Produced by James Linden.  HTML version by Al Haines.











The addresses are separated by three asterisks: ***


Complete State of the Union Addresses,
from 1790 to 2006


CONTENTS

  George Washington, State of the Union Address, January 8, 1790
  George Washington, State of the Union Address, December 8, 1790
  George Washington, State of the Union Address, October 25, 1791
  George Washington, State of the Union Address, November 6, 1792
  George Washington, State of the Union Address, December 3, 1793
  George Washington, State of the Union Address, November 19, 1794
  George Washington, State of the Union Address, December 8, 1795
  George Washington, State of the Union Address, December 7, 1796

  John Adams, State of the Union Address, November 22, 1797
  John Adams, State of the Union Address, December 8, 1798
  John Adams, State of the Union Address, December 3, 1799
  John Adams, State of the Union Address, November 11, 1800

  Thomas Jefferson, State of the Union Address, December 8, 1801
  Thomas Jefferson, State of the Union Address, December 15, 1802
  Thomas Jefferson, State of the Union Address, October 17, 1803
  Thomas Jefferson, State of the Union Address, November 8, 1804
  Thomas Jefferson, State of the Union Address, December 3, 1805
  Thomas Jefferson, State of the Union Address, December 2, 1806
  Thomas Jefferson, State of the Union Address, October 27, 1807
  Thomas Jefferson, State of the Union Address, November 8, 1808

  James Madison, State of the Union Address, November 29, 1809
  James Madison, State of the Union Address, December 5, 1810
  James Madison, State of the Union Address, November 5, 1811
  James Madison, State of the Union Address, November 4, 1812
  James Madison, State of the Union Address, December 7, 1813
  James Madison, State of the Union Address, September 20, 1814
  James Madison, State of the Union Address, December 5, 1815
  James Madison, State of the Union Address, December 3, 1816

  James Monroe, State of the Union Address, December 12, 1817
  James Monroe, State of the Union Address, November 16, 1818
  James Monroe, State of the Union Address, December 7, 1819
  James Monroe, State of the Union Address, November 14, 1820
  James Monroe, State of the Union Address, December 3, 1821
  James Monroe, State of the Union Address, December 3, 1822
  James Monroe, State of the Union Address, December 2, 1823
  James Monroe, State of the Union Address, December 7, 1824

  John Quincy Adams, State of the Union Address, December 6, 1825
  John Quincy Adams, State of the Union Address, December 5, 1826
  John Quincy Adams, State of the Union Address, December 4, 1827
  John Quincy Adams, State of the Union Address, December 2, 1828

  Andrew Jackson, State of the Union Address, December 8, 1829
  Andrew Jackson, State of the Union Address, December 6, 1830
  Andrew Jackson, State of the Union Address, December 6, 1831
  Andrew Jackson, State of the Union Address, December 4, 1832
  Andrew Jackson, State of the Union Address, December 3, 1833
  Andrew Jackson, State of the Union Address, December 1, 1834
  Andrew Jackson, State of the Union Address, December 7, 1835
  Andrew Jackson, State of the Union Address, December 5, 1836

  Martin van Buren, State of the Union Address, December 5, 1837
  Martin van Buren, State of the Union Address, December 3, 1838
  Martin van Buren, State of the Union Address, December 2, 1839
  Martin van Buren, State of the Union Address, December 5, 1840

  John Tyler, State of the Union Address, December 7, 1841
  John Tyler, State of the Union Address, December 6, 1842
  John Tyler, State of the Union Address, December 6, 1843
  John Tyler, State of the Union Address, December 3, 1844

  James Polk, State of the Union Address, December 2, 1845
  James Polk, State of the Union Address, December 8, 1846
  James Polk, State of the Union Address, December 7, 1847
  James Polk, State of the Union Address, December 5, 1848

  Zachary Taylor, State of the Union Address, December 4, 1849

  Millard Fillmore, State of the Union Address, December 2, 1850
  Millard Fillmore, State of the Union Address, December 2, 1851
  Millard Fillmore, State of the Union Address, December 6, 1852

  Franklin Pierce, State of the Union Address, December 5, 1853
  Franklin Pierce, State of the Union Address, December 4, 1854
  Franklin Pierce, State of the Union Address, December 31, 1855
  Franklin Pierce, State of the Union Address, December 2, 1856

  James Buchanan, State of the Union Address, December 8, 1857
  James Buchanan, State of the Union Address, December 6, 1858
  James Buchanan, State of the Union Address, December 19, 1859
  James Buchanan, State of the Union Address, December 3, 1860

  Abraham Lincoln, State of the Union Address, December 3, 1861
  Abraham Lincoln, State of the Union Address, December 1, 1862
  Abraham Lincoln, State of the Union Address, December 8, 1863
  Abraham Lincoln, State of the Union Address, December 6, 1864

  Andrew Johnson, State of the Union Address, December 4, 1865
  Andrew Johnson, State of the Union Address, December 3, 1866
  Andrew Johnson, State of the Union Address, December 3, 1867
  Andrew Johnson, State of the Union Address, December 9, 1868

  Ulysses S. Grant, State of the Union Address, December 6, 1869
  Ulysses S. Grant, State of the Union Address, December 5, 1870
  Ulysses S. Grant, State of the Union Address, December 4, 1871
  Ulysses S. Grant, State of the Union Address, December 2, 1872
  Ulysses S. Grant, State of the Union Address, December 1, 1873
  Ulysses S. Grant, State of the Union Address, December 7, 1874
  Ulysses S. Grant, State of the Union Address, December 7, 1875
  Ulysses S. Grant, State of the Union Address, December 5, 1876

  Rutherford B. Hayes, State of the Union Address, December 3, 1877
  Rutherford B. Hayes, State of the Union Address, December 2, 1878
  Rutherford B. Hayes, State of the Union Address, December 1, 1879
  Rutherford B. Hayes, State of the Union Address, December 6, 1880

  Chester A. Arthur, State of the Union Address, December 6, 1881
  Chester A. Arthur, State of the Union Address, December 4, 1882
  Chester A. Arthur, State of the Union Address, December 4, 1883
  Chester A. Arthur, State of the Union Address, December 1, 1884

  Grover Cleveland, State of the Union Address, December 8, 1885
  Grover Cleveland, State of the Union Address, December 6, 1886
  Grover Cleveland, State of the Union Address, December 6, 1887
  Grover Cleveland, State of the Union Address, December 3, 1888

  Benjamin Harrison, State of the Union Address, December 3, 1889
  Benjamin Harrison, State of the Union Address, December 1, 1890
  Benjamin Harrison, State of the Union Address, December 9, 1891
  Benjamin Harrison, State of the Union Address, December 6, 1892

  Grover Cleveland, State of the Union Address, December 4, 1893
  Grover Cleveland, State of the Union Address, December 3, 1894
  Grover Cleveland, State of the Union Address, December 2, 1895
  Grover Cleveland, State of the Union Address, December 7, 1896
  
  William McKinley, State of the Union Address, December 6, 1897
  William McKinley, State of the Union Address, December 5, 1898
  William McKinley, State of the Union Address, December 5, 1899
  William McKinley, State of the Union Address, December 3, 1900

  Theodore Roosevelt, State of the Union Address, December 3, 1901
  Theodore Roosevelt, State of the Union Address, December 2, 1902
  Theodore Roosevelt, State of the Union Address, December 7, 1903
  Theodore Roosevelt, State of the Union Address, December 6, 1904
  Theodore Roosevelt, State of the Union Address, December 5, 1905
  Theodore Roosevelt, State of the Union Address, December 3, 1906
  Theodore Roosevelt, State of the Union Address, December 3, 1907
  Theodore Roosevelt, State of the Union Address, December 8, 1908

  William H. Taft, State of the Union Address, December 7, 1909
  William H. Taft, State of the Union Address, December 6, 1910
  William H. Taft, State of the Union Address, December 5, 1911
  William H. Taft, State of the Union Address, December 3, 1912

  Woodrow Wilson, State of the Union Address, December 2, 1913
  Woodrow Wilson, State of the Union Address, December 8, 1914
  Woodrow Wilson, State of the Union Address, December 7, 1915
  Woodrow Wilson, State of the Union Address, December 5, 1916
  Woodrow Wilson, State of the Union Address, December 4, 1917
  Woodrow Wilson, State of the Union Address, December 2, 1918
  Woodrow Wilson, State of the Union Address, December 2, 1919
  Woodrow Wilson, State of the Union Address, December 7, 1920

  Warren Harding, State of the Union Address, December 6, 1921
  Warren Harding, State of the Union Address, December 8, 1922

  Calvin Coolidge, State of the Union Address, December 6, 1923
  Calvin Coolidge, State of the Union Address, December 3, 1924
  Calvin Coolidge, State of the Union Address, December 8, 1925
  Calvin Coolidge, State of the Union Address, December 7, 1926
  Calvin Coolidge, State of the Union Address, December 6, 1927
  Calvin Coolidge, State of the Union Address, December 4, 1928

  Herbert Hoover, State of the Union Address, December 3, 1929
  Herbert Hoover, State of the Union Address, December 2, 1930
  Herbert Hoover, State of the Union Address, December 8, 1931
  Herbert Hoover, State of the Union Address, December 6, 1932

  Franklin D. Roosevelt, State of the Union Address, January 3, 1934
  Franklin D. Roosevelt, State of the Union Address, January 4, 1935
  Franklin D. Roosevelt, State of the Union Address, January 3, 1936
  Franklin D. Roosevelt, State of the Union Address, January 6, 1937
  Franklin D. Roosevelt, State of the Union Address, January 3, 1938
  Franklin D. Roosevelt, State of the Union Address, January 4, 1939
  Franklin D. Roosevelt, State of the Union Address, January 3, 1940
  Franklin D. Roosevelt, State of the Union Address, January 6, 1941
  Franklin D. Roosevelt, State of the Union Address, January 6, 1942
  Franklin D. Roosevelt, State of the Union Address, January 7, 1943
  Franklin D. Roosevelt, State of the Union Address, January 11, 1944
  Franklin D. Roosevelt, State of the Union Address, January 6, 1945

  Harry S. Truman, State of the Union Address, January 21, 1946
  Harry S. Truman, State of the Union Address, January 6, 1947
  Harry S. Truman, State of the Union Address, January 7, 1948
  Harry S. Truman, State of the Union Address, January 5, 1949
  Harry S. Truman, State of the Union Address, January 4, 1950
  Harry S. Truman, State of the Union Address, January 8, 1951
  Harry S. Truman, State of the Union Address, January 9, 1952
  Harry S. Truman, State of the Union Address, January 7, 1953

  Dwight D. Eisenhower, State of the Union Address, February 2, 1953
  Dwight D. Eisenhower, State of the Union Address, January 7, 1954
  Dwight D. Eisenhower, State of the Union Address, January 6, 1955
  Dwight D. Eisenhower, State of the Union Address, January 5, 1956
  Dwight D. Eisenhower, State of the Union Address, January 10, 1957
  Dwight D. Eisenhower, State of the Union Address, January 9, 1958
  Dwight D. Eisenhower, State of the Union Address, January 9, 1959
  Dwight D. Eisenhower, State of the Union Address, January 7, 1960
  Dwight D. Eisenhower, State of the Union Address, January 12, 1961

  John F. Kennedy, State of the Union Address, January 30, 1961
  John F. Kennedy, State of the Union Address, January 11, 1962
  John F. Kennedy, State of the Union Address, January 14, 1963

  Lyndon B. Johnson, State of the Union Address, January 8, 1964
  Lyndon B. Johnson, State of the Union Address, January 4, 1965
  Lyndon B. Johnson, State of the Union Address, January 12, 1966
  Lyndon B. Johnson, State of the Union Address, January 10, 1967
  Lyndon B. Johnson, State of the Union Address, January 17, 1968
  Lyndon B. Johnson, State of the Union Address, January 14, 1969

  Richard Nixon, State of the Union Address, January 22, 1970
  Richard Nixon, State of the Union Address, January 22, 1971
  Richard Nixon, State of the Union Address, January 20, 1972
  Richard Nixon, State of the Union Address, February 2, 1973
  Richard Nixon, State of the Union Address, January 30, 1974

  Gerald R. Ford, State of the Union Address, January 15, 1975
  Gerald R. Ford, State of the Union Address, January 19, 1976
  Gerald R. Ford, State of the Union Address, January 12, 1977

  Jimmy Carter, State of the Union Address, January 19, 1978
  Jimmy Carter, State of the Union Address, January 25, 1979
  Jimmy Carter, State of the Union Address, January 21, 1980
  Jimmy Carter, State of the Union Address, January 16, 1981

  Ronald Reagan, State of the Union Address, January 26, 1982
  Ronald Reagan, State of the Union Address, January 25, 1983
  Ronald Reagan, State of the Union Address, January 25, 1984
  Ronald Reagan, State of the Union Address, February 6, 1985
  Ronald Reagan, State of the Union Address, February 4, 1986
  Ronald Reagan, State of the Union Address, January 27, 1987
  Ronald Reagan, State of the Union Address, January 25, 1988

  George H.W. Bush, State of the Union Address, February 9, 1989
  George H.W. Bush, State of the Union Address, January 31, 1990
  George H.W. Bush, State of the Union Address, January 29, 1991
  George H.W. Bush, State of the Union Address, January 28, 1992

  William J. Clinton, State of the Union Address, January 17, 1993
  William J. Clinton, State of the Union Address, January 25, 1994
  William J. Clinton, State of the Union Address, January 24, 1995
  William J. Clinton, State of the Union Address, January 23, 1996
  William J. Clinton, State of the Union Address, February 4, 1997
  William J. Clinton, State of the Union Address, January 27, 1998
  William J. Clinton, State of the Union Address, January 19, 1999
  William J. Clinton, State of the Union Address, January 27, 2000

  George W. Bush, State of the Union Address, February 27, 2001
  George W. Bush, State of the Union Address, September 20, 2001
  George W. Bush, State of the Union Address, January 29, 2002
  George W. Bush, State of the Union Address, January 28, 2003
  George W. Bush, State of the Union Address, January 20, 2004
  George W. Bush, State of the Union Address, February 2, 2005
  George W. Bush, State of the Union Address, January 31, 2006
  George W. Bush, State of the Union Address, January 23, 2007
  George W. Bush, State of the Union Address, January 28, 2008

***

State of the Union Address
George Washington
January 8, 1790

Fellow-Citizens of the Senate and House of Representatives:

I embrace with great satisfaction the opportunity which now presents
itself of congratulating you on the present favorable prospects of our
public affairs. The recent accession of the important state of North
Carolina to the Constitution of the United States (of which official
information has been received), the rising credit and respectability of
our country, the general and increasing good will toward the government
of the Union, and the concord, peace, and plenty with which we are
blessed are circumstances auspicious in an eminent degree to our
national prosperity.

In resuming your consultations for the general good you can not but
derive encouragement from the reflection that the measures of the last
session have been as satisfactory to your constituents as the novelty
and difficulty of the work allowed you to hope. Still further to realize
their expectations and to secure the blessings which a gracious
Providence has placed within our reach will in the course of the present
important session call for the cool and deliberate exertion of your
patriotism, firmness, and wisdom.

Among the many interesting objects which will engage your attention that
of providing for the common defense will merit particular regard. To be
prepared for war is one of the most effectual means of preserving peace.

A free people ought not only to be armed, but disciplined; to which end
a uniform and well-digested plan is requisite; and their safety and
interest require that they should promote such manufactories as tend to
render them independent of others for essential, particularly military,
supplies.

The proper establishment of the troops which may be deemed indispensable
will be entitled to mature consideration. In the arrangements which may
be made respecting it it will be of importance to conciliate the
comfortable support of the officers and soldiers with a due regard to
economy.

There was reason to hope that the pacific measures adopted with regard
to certain hostile tribes of Indians would have relieved the inhabitants
of our southern and western frontiers from their depredations, but you
will perceive from the information contained in the papers which I shall
direct to be laid before you (comprehending a communication from the
Commonwealth of Virginia) that we ought to be prepared to afford
protection to those parts of the Union, and, if necessary, to punish
aggressors.

The interests of the United States require that our intercourse with
other nations should be facilitated by such provisions as will enable me
to fulfill my duty in that respect in the manner which circumstances may
render most conducive to the public good, and to this end that the
compensation to be made to the persons who may be employed should,
according to the nature of their appointments, be defined by law, and a
competent fund designated for defraying the expenses incident to the
conduct of foreign affairs.

Various considerations also render it expedient that the terms on which
foreigners may be admitted to the rights of citizens should be speedily
ascertained by a uniform rule of naturalization.

Uniformity in the currency, weights, and measures of the United States
is an object of great importance, and will, I am persuaded, be duly
attended to.

The advancement of agriculture, commerce, and manufactures by all proper
means will not, I trust, need recommendation; but I can not forbear
intimating to you the expediency of giving effectual encouragement as
well to the introduction of new and useful inventions from abroad as to
the exertions of skill and genius in producing them at home, and of
facilitating the intercourse between the distant parts of our country by
a due attention to the post-office and post-roads.

Nor am I less persuaded that you will agree with me in opinion that
there is nothing which can better deserve your patronage than the
promotion of science and literature. Knowledge is in every country the
surest basis of public happiness. In one in which the measures of
government receive their impressions so immediately from the sense of
the community as in ours it is proportionably essential.

To the security of a free constitution it contributes in various
ways--by convincing those who are intrusted with the public
administration that every valuable end of government is best answered by
the enlightened confidence of the people, and by teaching the people
themselves to know and to value their own rights; to discern and provide
against invasions of them; to distinguish between oppression and the
necessary exercise of lawful authority; between burthens proceeding from
a disregard to their convenience and those resulting from the inevitable
exigencies of society; to discriminate the spirit of liberty from that
of licentiousness-- cherishing the first, avoiding the last--and uniting
a speedy but temperate vigilance against encroachments, with an
inviolable respect to the laws.

Whether this desirable object will be best promoted by affording aids to
seminaries of learning already established, by the institution of a
national university, or by any other expedients will be well worthy of a
place in the deliberations of the legislature.

Gentlemen of the House of Representatives:

I saw with peculiar pleasure at the close of the last session the
resolution entered into by you expressive of your opinion that an
adequate provision for the support of the public credit is a matter of
high importance to the national honor and prosperity. In this sentiment
I entirely concur; and to a perfect confidence in your best endeavors to
devise such a provision as will be truly with the end I add an equal
reliance on the cheerful cooperation of the other branch of the
legislature.

It would be superfluous to specify inducements to a measure in which the
character and interests of the United States are so obviously so deeply
concerned, and which has received so explicit a sanction from your
declaration.

Gentlemen of the Senate and House of Representatives:

I have directed the proper officers to lay before you, respectively,
such papers and estimates as regard the affairs particularly recommended
to your consideration, and necessary to convey to you that information
of the state of the Union which it is my duty to afford.

The welfare of our country is the great object to which our cares and
efforts ought to be directed, and I shall derive great satisfaction from
a cooperation with you in the pleasing though arduous task of insuring
to our fellow citizens the blessings which they have a right to expect
from a free, efficient, and equal government.

***

State of the Union Address
George Washington
December 8, 1790

Fellow-Citizens of the Senate and House of Representatives:

In meeting you again I feel much satisfaction in being able to repeat my
congratulations on the favorable prospects which continue to distinguish
our public affairs. The abundant fruits of another year have blessed our
country with plenty and with the means of a flourishing commerce.

The progress of public credit is witnessed by a considerable rise of
American stock abroad as well as at home, and the revenues allotted for
this and other national purposes have been productive beyond the
calculations by which they were regulated. This latter circumstance is
the more pleasing, as it is not only a proof of the fertility of our
resources, but as it assures us of a further increase of the national
respectability and credit, and, let me add, as it bears an honorable
testimony to the patriotism and integrity of the mercantile and marine
part of our citizens. The punctuality of the former in discharging their
engagements has been exemplary.

In conformity to the powers vested in me by acts of the last session, a
loan of 3,000,000 florins, toward which some provisional measures had
previously taken place, has been completed in Holland. As well the
celerity with which it has been filled as the nature of the terms
(considering the more than ordinary demand for borrowing created by the
situation of Europe) give a reasonable hope that the further execution
of those powers may proceed with advantage and success. The Secretary of
the Treasury has my directions to communicate such further particulars
as may be requisite for more precise information.

Since your last sessions I have received communications by which it
appears that the district of Kentucky, at present a part of Virginia,
has concurred in certain propositions contained in a law of that State,
in consequence of which the district is to become a distinct member of
the Union, in case the requisite sanction of Congress be added. For this
sanction application is now made. I shall cause the papers on this very
transaction to be laid before you.

The liberality and harmony with which it has been conducted will be
found to do great honor to both the parties, and the sentiments of warm
attachment to the Union and its present Government expressed by our
fellow citizens of Kentucky can not fail to add an affectionate concern
for their particular welfare to the great national impressions under
which you will decide on the case submitted to you.

It has been heretofore known to Congress that frequent incursions have
been made on our frontier settlements by certain banditti of Indians
from the northwest side of the Ohio. These, with some of the tribes
dwelling on and near the Wabash, have of late been particularly active
in their depredations, and being emboldened by the impunity of their
crimes and aided by such parts of the neighboring tribes as could be
seduced to join in their hostilities or afford them a retreat for their
prisoners and plunder, they have, instead of listening to the humane
invitations and overtures made on the part of the United States, renewed
their violences with fresh alacrity and greater effect. The lives of a
number of valuable citizens have thus been sacrificed, and some of them
under circumstances peculiarly shocking, whilst others have been carried
into a deplorable captivity.

These aggravated provocations rendered it essential to the safety of the
Western settlements that the aggressors should be made sensible that the
Government of the Union is not less capable of punishing their crimes
than it is disposed to respect their rights and reward their
attachments. As this object could not be effected by defensive measures,
it became necessary to put in force the act which empowers the President
to call out the militia for the protection of the frontiers, and I have
accordingly authorized an expedition in which the regular troops in that
quarter are combined with such drafts of militia as were deemed
sufficient. The event of the measure is yet unknown to me. The Secretary
of War is directed to lay before you a statement of the information on
which it is founded, as well as an estimate of the expense with which it
will be attended.

The disturbed situation of Europe, and particularly the critical posture
of the great maritime powers, whilst it ought to make us the more
thankful for the general peace and security enjoyed by the United
States, reminds us at the same time of the circumspection with which it
becomes us to preserve these blessings. It requires also that we should
not overlook the tendency of a war, and even of preparations for a war,
among the nations most concerned in active commerce with this country to
abridge the means, and thereby at least enhance the price, of
transporting its valuable productions to their markets. I recommend it
to your serious reflections how far and in what mode it may be expedient
to guard against embarrassments from these contingencies by such
encouragements to our own navigation as will render our commerce and
agriculture less dependent on foreign bottoms, which may fail us in the
very moments most interesting to both of these great objects. Our
fisheries and the transportation of our own produce offer us abundant
means for guarding ourselves against this evil.

Your attention seems to be not less due to that particular branch of our
trade which belongs to the Mediterranean. So many circumstances unite in
rendering the present state of it distressful to us that you will not
think any deliberations misemployed which may lead to its relief and
protection.

The laws you have already passed for the establishment of a judiciary
system have opened the doors of justice to all descriptions of persons.
You will consider in your wisdom whether improvements in that system may
yet be made, and particularly whether an uniform process of execution on
sentences issuing from the Federal courts be not desirable through all
the States.

The patronage of our commerce, of our merchants and sea men, has called
for the appointment of consuls in foreign countries. It seems expedient
to regulate by law the exercise of that jurisdiction and those functions
which are permitted them, either by express convention or by a friendly
indulgence, in the places of their residence. The consular convention,
too, with His Most Christian Majesty has stipulated in certain cases the
aid of the national authority to his consuls established here. Some
legislative provision is requisite to carry these stipulations into full
effect.

The establishment of the militia, of a mint, of standards of weights and
measures, of the post office and post roads are subjects which I presume
you will resume of course, and which are abundantly urged by their own
importance.

Gentlemen of the House of Representatives:

The sufficiency of the revenues you have established for the objects to
which they are appropriated leaves no doubt that the residuary
provisions will be commensurate to the other objects for which the
public faith stands now pledged. Allow me, moreover, to hope that it
will be a favorite policy with you, not merely to secure a payment of
the interest of the debt funded, but as far and as fast as the growing
resources of the country will permit to exonerate it of the principal
itself. The appropriation you have made of the Western land explains
your dispositions on this subject, and I am persuaded that the sooner
that valuable fund can be made to contribute, along with the other
means, to the actual reduction of the public debt the more salutary will
the measure be to every public interest, as well as the more
satisfactory to our constituents.

Gentlemen of the Senate and House of Representatives:

In pursuing the various and weighty business of the present session I
indulge the fullest persuasion that your consultation will be equally
marked with wisdom and animated by the love of your country. In whatever
belongs to my duty you shall have all the cooperation which an
undiminished zeal for its welfare can inspire. It will be happy for us
both, and our best reward, if, by a successful administration of our
respective trusts, we can make the established Government more and more
instrumental in promoting the good of our fellow citizens, and more and
more the object of their attachment and confidence.

GO. WASHINGTON

***

State of the Union Address
George Washington
October 25, 1791

Fellow-Citizens of the Senate and House of Representatives:

"In vain may we expect peace with the Indians on our frontiers so long
as a lawless set of unprincipled wretches can violate the rights of
hospitality, or infringe the most solemn treaties, without receiving the
punishment they so justly merit."

I meet you upon the present occasion with the feelings which are
naturally inspired by a strong impression of the prosperous situations
of our common country, and by a persuasion equally strong that the
labors of the session which has just commenced will, under the guidance
of a spirit no less prudent than patriotic, issue in measures conducive
to the stability and increase of national prosperity.

Numerous as are the providential blessings which demand our grateful
acknowledgments, the abundance with which another year has again
rewarded the industry of the husbandman is too important to escape
recollection.

Your own observations in your respective situations will have satisfied
you of the progressive state of agriculture, manufactures, commerce, and
navigation. In tracing their causes you will have remarked with
particular pleasure the happy effects of that revival of confidence,
public as well as private, to which the Constitution and laws of the
United States have so eminently contributed; and you will have observed
with no less interest new and decisive proofs of the increasing
reputation and credit of the nation. But you nevertheless can not fail
to derive satisfaction from the confirmation of these circumstances
which will be disclosed in the several official communications that will
be made to you in the course of your deliberations.

The rapid subscriptions to the Bank of the United States, which
completed the sum allowed to be subscribed in a single day, is among the
striking and pleasing evidences which present themselves, not only of
confidence in the Government, but of resource in the community.

In the interval of your recess due attention has been paid to the
execution of the different objects which were specially provided for by
the laws and resolutions of the last session.

Among the most important of these is the defense and security of the
western frontiers. To accomplish it on the most humane principles was a
primary wish.

Accordingly, at the same time the treaties have been provisionally
concluded and other proper means used to attach the wavering and to
confirm in their friendship the well-disposed tribes of Indians,
effectual measures have been adopted to make those of a hostile
description sensible that a pacification was desired upon terms of
moderation and justice.

Those measures having proved unsuccessful, it became necessary to
convince the refractory of the power of the United States to punish
their depredations. Offensive operations have therefore been directed,
to be conducted, however, as consistently as possible with the dictates
of humanity.

Some of these have been crowned with full success and others are yet
depending. The expeditions which have been completed were carried on
under the authority and at the expense of the United States by the
militia of Kentucky, whose enterprise, intrepidity, and good conduct are
entitled of peculiar commendation.

Overtures of peace are still continued to the deluded tribes, and
considerable numbers of individuals belonging to them have lately
renounced all further opposition, removed from their former situations,
and placed themselves under the immediate protection of the United
States.

It is sincerely to be desired that all need of coercion in future may
cease and that an intimate intercourse may succeed, calculated to
advance the happiness of the Indians and to attach them firmly to the
United States.

In order to this it seems necessary--That they should experience the
benefits of an impartial dispensation of justice. That the mode of
alienating their lands, the main source of discontent and war, should be
so defined and regulated as to obviate imposition and as far as may be
practicable controversy concerning the reality and extent of the
alienations which are made. That commerce with them should be promoted
under regulations tending to secure an equitable deportment toward them,
and that such rational experiments should be made for imparting to them
the blessings of civilization as may from time to time suit their
condition. That the Executive of the United States should be enabled to
employ the means to which the Indians have been long accustomed for
uniting their immediate interests with the preservation of peace. And
that efficacious provision should be made for inflicting adequate
penalties upon all those who, by violating their rights, shall infringe
the treaties and endanger the peace of the Union. A system corresponding
with the mild principles of religion and philanthropy toward an
unenlightened race of men, whose happiness materially depends on the
conduct of the United States, would be as honorable to the national
character as conformable to the dictates of sound policy.

The powers specially vested in me by the act laying certain duties on
distilled spirits, which respect the subdivisions of the districts into
surveys, the appointment of officers, and the assignment of
compensations, have likewise been carried into effect. In a manner in
which both materials and experience were wanting to guide the
calculation it will be readily conceived that there must have been
difficulty in such an adjustment of the rates of compensation as would
conciliate a reasonable competency with a proper regard to the limits
prescribed by the law. It is hoped that the circumspection which has
been used will be found in the result to have secured the last of the
two objects; but it is probable that with a view to the first in some
instances a revision of the provision will be found advisable.

The impressions with which this law has been received by the community
have been upon the whole such as were to be expected among enlightened
and well-disposed citizens from the propriety and necessity of the
measure. The novelty, however, of the tax in a considerable part of the
United States and a misconception of some of its provisions have given
occasion in particular places to some degree of discontent; but it is
satisfactory to know that this disposition yields to proper explanations
and more just apprehensions of the true nature of the law, and I
entertain a full confidence that it will in all give way to motives
which arise out of a just sense of duty and a virtuous regard to the
public welfare.

If there are any circumstances in the law which consistently with its
main design may be so varied as to remove any well-intentioned
objections that may happen to exist, it will consist with a wise
moderation to make the proper variations. It is desirable on all
occasions to unite with a steady and firm adherence to constitutional
and necessary acts of Government the fullest evidence of a disposition
as far as may be practicable to consult the wishes of every part of the
community and to lay the foundations of the public administration in the
affections of the people.

Pursuant to the authority contained in the several acts on that subject,
a district of 10 miles square for the permanent seat of the Government
of the United States has been fixed and announced by proclamation, which
district will comprehend lands on both sides of the river Potomac and
the towns of Alexandria and Georgetown. A city has also been laid out
agreeably to a plan which will be placed before Congress, and as there
is a prospect, favored by the rate of sales which have already taken
place, of ample funds for carrying on the necessary public buildings,
there is every expectation of their due progress.

The completion of the census of the inhabitants, for which provision was
made by law, has been duly notified (excepting one instance in which the
return has been informal, and another in which it has been omitted or
miscarried), and the returns of the officers who were charged with this
duty, which will be laid before you, will give you the pleasing
assurance that the present population of the United States borders on
4,000,000 persons.

It is proper also to inform you that a further loan of 2,500,000 florins
has been completed in Holland, the terms of which are similar to those
of the one last announced, except as to a small reduction of charges.
Another, on like terms, for 6,000,000 florins, had been set on foot
under circumstances that assured an immediate completion.

Gentlemen of the Senate:

Two treaties which have been provisionally concluded with the Cherokees
and Six Nations of Indians will be laid before you for your
consideration and ratification.

Gentlemen of the House of Representatives:

In entering upon the discharge of your legislative trust you must
anticipate with pleasure that many of the difficulties necessarily
incident to the first arrangements of a new government for an extensive
country have been happily surmounted by the zealous and judicious
exertions of your predecessors in cooperation with the other branch of
the Legislature. The important objects which remain to be accomplished
will, I am persuaded, be conducted upon principles equally comprehensive
and equally well calculated of the advancement of the general weal.

The time limited for receiving subscriptions to the loans proposed by
the act making provision for the debt of the United States having
expired, statements from the proper department will as soon as possible
apprise you of the exact result. Enough, however, is known already to
afford an assurance that the views of that act have been substantially
fulfilled. The subscription in the domestic debt of the United States
has embraced by far the greatest proportion of that debt, affording at
the same time proof of the general satisfaction of the public creditors
with the system which has been proposed to their acceptance and of the
spirit of accommodation to the convenience of the Government with which
they are actuated. The subscriptions in the debts of the respective
States as far as the provisions of the law have permitted may be said to
be yet more general. The part of the debt of the United States which
remains unsubscribed will naturally engage your further deliberations.

It is particularly pleasing to me to be able to announce to you that the
revenues which have been established promise to be adequate to their
objects, and may be permitted, if no unforeseen exigency occurs, to
supersede for the present the necessity of any new burthens upon our
constituents.

An object which will claim your early attention is a provision for the
current service of the ensuing year, together with such ascertained
demands upon the Treasury as require to be immediately discharged, and
such casualties as may have arisen in the execution of the public
business, for which no specific appropriation may have yet been made; of
all which a proper estimate will be laid before you.

Gentlemen of the Senate and of the House of Representatives:

I shall content myself with a general reference to former communications
for several objects upon which the urgency of other affairs has hitherto
postponed any definitive resolution. Their importance will recall them
to your attention, and I trust that the progress already made in the
most arduous arrangements of the Government will afford you leisure to
resume them to advantage.

These are, however, some of them of which I can not forbear a more
particular mention. These are the militia, the post office and post
roads, the mint, weights and measures, a provision for the sale of the
vacant lands of the United States.

The first is certainly an object of primary importance whether viewed in
reference to the national security to the satisfaction of the community
or to the preservation of order. In connection with this the
establishment of competent magazines and arsenals and the fortification
of such places as are peculiarly important and vulnerable naturally
present themselves to consideration. The safety of the United States
under divine protection ought to rest on the basis of systematic and
solid arrangements, exposed as little as possible to the hazards of
fortuitous circumstances.

The importance of the post office and post roads on a plan sufficiently
liberal and comprehensive, as they respect the expedition, safety, and
facility of communication, is increased by their instrumentality in
diffusing a knowledge of the laws and proceedings of the Government,
which, while it contributes to the security of the people, serves also
to guard them against the effects of misrepresentation and
misconception. The establishment of additional cross posts, especially
to some of the important points in the Western and Northern parts of the
Union, can not fail to be of material utility.

The disorders in the existing currency, and especially the scarcity of
small change, a scarcity so peculiarly distressing to the poorer
classes, strongly recommend the carrying into immediate effect the
resolution already entered into concerning the establishment of a mint.
Measures have been taken pursuant to that resolution for procuring some
of the most necessary artists, together with the requisite apparatus.

An uniformity in the weights and measures of the country is among the
important objects submitted to you by the Constitution, and if it can be
derived from a standard at once invariable and universal, must be no
less honorable to the public councils than conducive to the public
convenience.

A provision for the sale of the vacant lands of the United States is
particularly urged, among other reasons, by the important considerations
that they are pledged as a fund for reimbursing the public debt; that if
timely and judiciously applied they may save the necessity of burthening
our citizens with new taxes for the extinguishment of the principal; and
that being free to discharge the principal but in a limited proportion,
no opportunity ought to be lost for availing the public of its right.

GO. WASHINGTON

***

State of the Union Address
George Washington
November 6, 1792

Fellow-Citizens of the Senate and House of Representatives:

It is some abatement of the satisfaction with which I meet you on the
present occasion that, in felicitating you on a continuance of the
national prosperity generally, I am not able to add to it information
that the Indian hostilities which have for some time past distressed our
Northwestern frontier have terminated.

You will, I am persuaded, learn with no less concern than I communicate
it that reiterated endeavors toward effecting a pacification have
hitherto issued only in new and outrageous proofs of persevering
hostility on the part of the tribes with whom we are in contest. An
earnest desire to procure tranquillity to the frontier, to stop the
further effusion of blood, to arrest the progress of expense, to forward
the prevalent wish of the nation for peace has led to strenuous efforts
through various channels to accomplish these desirable purposes; in
making which efforts I consulted less my own anticipations of the event,
or the scruples which some considerations were calculated to inspire,
than the wish to find the object attainable, or if not attainable, to
ascertain unequivocally that such is the case.

A detail of the measures which have been pursued and of their
consequences, which will be laid before you, while it will confirm to
you the want of success thus far, will, I trust, evince that means as
proper and as efficacious as could have been devised have been employed.
The issue of some of them, indeed, is still depending, but a favorable
one, though not to be despaired of, is not promised by anything that has
yet happened.

In the course of the attempts which have been made some valuable
citizens have fallen victims to their zeal for the public service. A
sanction commonly respected even among savages has been found in this
instance insufficient to protect from massacre the emissaries of peace.
It will, I presume, be duly considered whether the occasion does not
call for an exercise of liberality toward the families of the deceased.

It must add to your concern to be informed that, besides the
continuation of hostile appearances among the tribes north of the Ohio,
some threatening symptoms have of late been revived among some of those
south of it.

A part of the Cherokees, known by the name of Chickamaugas, inhabiting
five villages on the Tennessee River, have long been in the practice of
committing depredations on the neighboring settlements.

It was hoped that the treaty of Holston, made with the Cherokee Nation
in July, 1791, would have prevented a repetition of such depredations;
but the event has not answered this hope. The Chickamaugas, aided by
some banditti of another tribe in their vicinity, have recently
perpetrated wanton and unprovoked hostilities upon the citizens of the
United States in that quarter. The information which has been received
on this subject will be laid before you. Hitherto defensive precautions
only have been strictly enjoined and observed.

It is not understood that any breach of treaty or aggression whatsoever
on the part of the United States or their citizens is even alleged as a
pretext for the spirit of hostility in this quarter.

I have reason to believe that every practicable exertion has been made
(pursuant to the provision by law for that purpose) to be prepared for
the alternative of a prosecution of the war in the event of a failure of
pacific overtures. A large proportion of the troops authorized to be
raised have been recruited, though the number is still incomplete, and
pains have been taken to discipline and put them in condition for the
particular kind of service to be performed. A delay of operations
(besides being dictated by the measures which were pursuing toward a
pacific termination of the war) has been in itself deemed preferable to
immature efforts. A statement from the proper department with regard to
the number of troops raised, and some other points which have been
suggested, will afford more precise information as a guide to the
legislative consultations, and among other things will enable Congress
to judge whether some additional stimulus to the recruiting service may
not be advisable.

In looking forward to the future expense of the operations which may be
found inevitable I derive consolation from the information I receive
that the product of the revenues for the present year is likely to
supersede the necessity of additional burthens on the community for the
service of the ensuing year. This, however, will be better ascertained
in the course of the session, and it is proper to add that the
information alluded to proceeds upon the supposition of no material
extension of the spirit of hostility.

I can not dismiss the subject of Indian affairs without again
recommending to your consideration the expediency of more adequate
provision for giving energy to the laws throughout our interior frontier
and for restraining the commission of outrages upon the Indians, without
which all pacific plans must prove nugatory. To enable, by competent
rewards, the employment of qualified and trusty persons to reside among
them as agents would also contribute to the preservation of peace and
good neighborhood. If in addition to these expedients an eligible plan
could be devised for promoting civilization among the friendly tribes
and for carrying on trade with them upon a scale equal to their wants
and under regulations calculated to protect them from imposition and
extortion, its influence in cementing their interest with ours could not
but be considerable.

The prosperous state of our revenue has been intimated. This would be
still more the case were it not for the impediments which in some places
continue to embarrass the collection of the duties on spirits distilled
within the United States. These impediments have lessened and are
lessening in local extent, and, as applied to the community at large,
the contentment with the law appears to be progressive.

But symptoms of increased opposition having lately manifested themselves
in certain quarters, I judged a special interposition on my part proper
and advisable, and under this impression have issued a proclamation
warning against all unlawful combinations and proceedings having for
their object or tending to obstruct the operation of the law in
question, and announcing that all lawful ways and means would be
strictly put in execution for bringing to justice the infractors thereof
and securing obedience thereto.

Measures have also been taken for the prosecution of offenders, and
Congress may be assured that nothing within constitutional and legal
limits which may depend upon me shall be wanting to assert and maintain
the just authority of the laws. In fulfilling this trust I shall count
entirely upon the full cooperation of the other departments of the
Government and upon the zealous support of all good citizens.

I can not forbear to bring again into the view of the Legislature the
subject of a revision of the judiciary system. A representation from the
judges of the Supreme Court, which will be laid before you, points out
some of the inconveniences that are experienced. In the course of the
execution of the laws considerations arise out of the structure of the
system which in some cases tend to relax their efficacy. As connected
with this subject, provisions to facilitate the taking of bail upon
processes out of the courts of the United States and a supplementary
definition of offenses against the Constitution and laws of the Union
and of the punishment for such offenses will, it is presumed, be found
worthy of particular attention.

Observations on the value of peace with other nations are unnecessary.
It would be wise, however, by timely provisions to guard against those
acts of our own citizens which might tend to disturb it, and to put
ourselves in a condition to give that satisfaction to foreign nations
which we may sometimes have occasion to require from them. I
particularly recommend to your consideration the means of preventing
those aggressions by our citizens on the territory of other nations, and
other infractions of the law of nations, which, furnishing just subject
of complaint, might endanger our peace with them; and, in general, the
maintenance of a friendly intercourse with foreign powers will be
presented to your attention by the expiration of the law for that
purpose, which takes place, if not renewed, at the close of the present
session.

In execution of the authority given by the Legislature measures have
been taken for engaging some artists from abroad to aid in the
establishment of our mint. Others have been employed at home. Provision
has been made of the requisite buildings, and these are now putting into
proper condition for the purposes of the establishment. There has also
been a small beginning in the coinage of half dimes, the want of small
coins in circulation calling the first attention to them.

The regulation of foreign coins in correspondency with the principles of
our national coinage, as being essential to their due operation and to
order in our money concerns, will, I doubt not, be resumed and
completed.

It is represented that some provisions in the law which establishes the
post office operate, in experiment, against the transmission of news
papers to distant parts of the country. Should this, upon due inquiry,
be found to be the fact, a full conviction of the importance of
facilitating the circulation of political intelligence and information
will, I doubt not, lead to the application of a remedy.

The adoption of a constitution for the State of Kentucky has been
notified to me. The Legislature will share with me in the satisfaction
which arises from an event interesting to the happiness of the part of
the nation to which it relates and conducive to the general order.

It is proper likewise to inform you that since my last communication on
the subject, and in further execution of the acts severally making
provision for the public debt and for the reduction thereof, three new
loans have been effected, each for 3,000,000 florins--one at Antwerp, at
the annual interest of 4.5%, with an allowance of 4% in lieu of all
charges, in the other 2 at Amsterdam, at the annual interest of 4%, with
an allowance of 5.5% in one case and of 5% in the other in lieu of all
charges. The rates of these loans and the circumstances under which they
have been made are confirmations of the high state of our credit abroad.

Among the objects to which these funds have been directed to be applied,
the payment of the debts due to certain foreign officers, according to
the provision made during the last session, has been embraced.

Gentlemen of the House of Representatives:

I entertain a strong hope that the state of the national finances is now
sufficiently matured to enable you to enter upon a systematic and
effectual arrangement for the regular redemption and discharge of the
public debt, according to the right which has been reserved to the
Government. No measure can be more desirable, whether viewed with an eye
to its intrinsic importance or to the general sentiment and wish of the
nation.

Provision is likewise requisite for the reimbursement of the loan which
has been made of the Bank of the United States, pursuant to the eleventh
section of the act by which it is incorporated. In fulfilling the public
stipulations in this particular it is expected a valuable saving will be
made.

Appropriations for the current service of the ensuing year and for such
extraordinaries as may require provision will demand, and I doubt not
will engage, your early attention.

Gentlemen of the Senate and of the House of Representatives:

I content myself with recalling your attention generally to such
objects, not particularized in my present, as have been suggested in my
former communications to you.

Various temporary laws will expire during the present session. Among
these, that which regulates trade and intercourse with the Indian tribes
will merit particular notice.

The results of your common deliberations hitherto will, I trust, be
productive of solid and durable advantages to our constituents, such as,
by conciliating more and more their ultimate suffrage, will tend to
strengthen and confirm their attachment to that Constitution of
Government upon which, under Divine Providence, materially depend their
union, their safety, and their happiness.

Still further to promote and secure these inestimable ends there is
nothing which can have a more powerful tendency than the careful
cultivation of harmony, combined with a due regard to stability, in the
public councils.

GO. WASHINGTON

***

State of the Union Address
George Washington
December 3, 1793

Fellow-Citizens of the Senate and House of Representatives:

Since the commencement of the term for which I have been again called
into office no fit occasion has arisen for expressing to my fellow
citizens at large the deep and respectful sense which I feel of the
renewed testimony of public approbation. While on the one hand it
awakened my gratitude for all those instances of affectionate partiality
with which I have been honored by my country, on the other it could not
prevent an earnest wish for that retirement from which no private
consideration should ever have torn me. But influenced by the belief
that my conduct would be estimated according to its real motives, and
that the people, and the authorities derived from them, would support
exertions having nothing personal for their object, I have obeyed the
suffrage which commanded me to resume the Executive power; and I humbly
implore that Being on whose will the fate of nations depends to crown
with success our mutual endeavors for the general happiness.

As soon as the war in Europe had embraced those powers with whom the
United States have the most extensive relations there was reason to
apprehend that our intercourse with them might be interrupted and our
disposition for peace drawn into question by the suspicions too often
entertained by belligerent nations. It seemed, therefore, to be my duty
to admonish our citizens of the consequences of a contraband trade and
of hostile acts to any of the parties, and to obtain by a declaration of
the existing legal state of things an easier admission of our right to
the immunities belonging to our situation. Under these impressions the
proclamation which will be laid before you was issued.

In this posture of affairs, both new and delicate, I resolved to adopt
general rules which should conform to the treaties and assert the
privileges of the United States. These were reduced into a system, which
will be communicated to you. Although I have not thought of myself at
liberty to forbid the sale of the prizes permitted by our treaty of
commerce with France to be brought into our ports, I have not refused to
cause them to be restored when they were taken within the protection of
our territory, or by vessels commissioned or equipped in a warlike form
within the limits of the United States.

It rests with the wisdom of Congress to correct, improve, or enforce
this plan of procedure; and it will probably be found expedient to
extend the legal code and the jurisdiction of the courts of the United
States to many cases which, though dependent on principles already
recognized, demand some further provisions.

Where individuals shall, within the United States, array themselves in
hostility against any of the powers at war, or enter upon military
expeditions or enterprises within the jurisdiction of the United States,
or usurp and exercise judicial authority within the United States, or
where the penalties on violations of the law of nations may have been
indistinctly marked, or are inadequate--these offenses can not receive
too early and close an attention, and require prompt and decisive
remedies.

Whatsoever those remedies may be, they will be well administered by the
judiciary, who possess a long-established course of investigation,
effectual process, and officers in the habit of executing it.

In like manner, as several of the courts have doubted, under particular
circumstances, their power to liberate the vessels of a nation at peace,
and even of a citizen of the United States, although seized under a
false color of being hostile property, and have denied their power to
liberate certain captures within the protection of our territory, it
would seem proper to regulate their jurisdiction in these points. But if
the Executive is to be the resort in either of the two last-mentioned
cases, it is hoped that he will be authorized by law to have facts
ascertained by the courts when for his own information he shall request
it.

I can not recommend to your notice measures for the fulfillment of our
duties to the rest of the world without again pressing upon you the
necessity of placing ourselves in a condition of complete defense and of
exacting from them the fulfillment of their duties toward us. The United
States ought not to indulge a persuasion that, contrary to the order of
human events, they will forever keep at a distance those painful appeals
to arms with which the history of every other nation abounds. There is a
rank due to the United States among nations which will be withheld, if
not absolutely lost, by the reputation of weakness. If we desire to
avoid insult, we must be able to repel it; if we desire to secure peace,
one of the most powerful instruments of our rising prosperity, it must
be known that we are at all times ready for war. The documents which
will be presented to you will shew the amount and kinds of arms and
military stores now in our magazines and arsenals; and yet an addition
even to these supplies can not with prudence be neglected, as it would
leave nothing to the uncertainty of procuring warlike apparatus in the
moment of public danger.

Nor can such arrangements, with such objects, be exposed to the censure
or jealousy of the warmest friends of republican government. They are
incapable of abuse in the hands of the militia, who ought to possess a
pride in being the depository of the force of the Republic, and may be
trained to a degree of energy equal to every military exigency of the
United States. But it is an inquiry which can not be too solemnly
pursued, whether the act "more effectually to provide for the national
defense by establishing an uniform militia throughout the United States"
has organized them so as to produce their full effect; whether your own
experience in the several States has not detected some imperfections in
the scheme, and whether a material feature in an improvement of it ought
not to be to afford an opportunity for the study of those branches of
the military art which can scarcely ever be attained by practice alone.

The connection of the United States with Europe has become extremely
interesting. The occurrences which relate to it and have passed under
the knowledge of the Executive will be exhibited to Congress in a
subsequent communication.

When we contemplate the war on our frontiers, it may be truly affirmed
that every reasonable effort has been made to adjust the causes of
dissension with the Indians north of the Ohio. The instructions given to
the commissioners evince a moderation and equity proceeding from a
sincere love of peace, and a liberality having no restriction but the
essential interests and dignity of the United States. The attempt,
however, of an amicable negotiation having been frustrated, the troops
have marched to act offensively. Although the proposed treaty did not
arrest the progress of military preparation, it is doubtful how far the
advance of the season, before good faith justified active movements, may
retard them during the remainder of the year. From the papers and
intelligence which relate to this important subject you will determine
whether the deficiency in the number of troops granted by law shall be
compensated by succors of militia, or additional encouragements shall be
proposed to recruits.

An anxiety has been also demonstrated by the Executive for peace with
the Creeks and the Cherokees. The former have been relieved with corn
and with clothing, and offensive measures against them prohibited during
the recess of Congress. To satisfy the complaints of the latter,
prosecutions have been instituted for the violences committed upon them.
But the papers which will be delivered to you disclose the critical
footing on which we stand in regard to both those tribes, and it is with
Congress to pronounce what shall be done.

After they shall have provided for the present emergency, it will merit
their most serious labors to render tranquillity with the savages
permanent by creating ties of interest. Next to a rigorous execution of
justice on the violators of peace, the establishment of commerce with
the Indian nations in behalf of the United States is most likely to
conciliate their attachment. But it ought to be conducted without fraud,
without extortion, with constant and plentiful supplies, with a ready
market for the commodities of the Indians and a stated price for what
they give in payment and receive in exchange. Individuals will not
pursue such a traffic unless they be allured by the hope of profit; but
it will be enough for the United States to be reimbursed only. Should
this recommendation accord with the opinion of Congress, they will
recollect that it can not be accomplished by any means yet in the hands
of the Executive.

Gentlemen of the House of Representatives:

The commissioners charged with the settlement of accounts between the
United States and individual States concluded their important function
within the time limited by law, and the balances struck in their report,
which will be laid before Congress, have been placed on the books of the
Treasury.

On the first day of June last an installment of 1,000,000 florins became
payable on the loans of the United States in Holland. This was adjusted
by a prolongation of the period of reimbursement in nature of a new loan
at an interest of 5% for the term of ten years, and the expenses of this
operation were a commission of 3%.

The first installment of the loan of $2,000,000 from the Bank of the
United States has been paid, as was directed by law. For the second it
is necessary that provision be made.

No pecuniary consideration is more urgent than the regular redemption
and discharge of the public debt. On none can delay be more injurious or
an economy of time more valuable.

The productiveness of the public revenues hitherto has continued to
equal the anticipations which were formed of it, but it is not expected
to prove commensurate with all the objects which have been suggested.
Some auxiliary provisions will therefore, it is presumed, be requisite,
and it is hoped that these may be made consistently with a due regard to
the convenience of our citizens, who can not but be sensible of the true
wisdom of encountering a small present addition to their contributions
to obviate a future accumulation of burthens.

But here I can not forbear to recommend a repeal of the tax on the
transportation of public prints. There is no resource so firm for the
Government of the United States as the affections of the people, guided
by an enlightened policy; and to this primary good nothing can conduce
more than a faithful representation of public proceedings, diffused
without restraint throughout the United States.

An estimate of the appropriations necessary for the current service of
the ensuing year and a statement of a purchase of arms and military
stores made during the recess will be presented to Congress.

Gentlemen of the Senate and of the House of Representatives:

The several subjects to which I have now referred open a wide range to
your deliberations and involve some of the choicest interests of our
common country. Permit me to bring to your remembrance the magnitude of
your task. Without an unprejudiced coolness the welfare of the
Government may be hazarded; without harmony as far as consists with
freedom of sentiment its dignity may be lost. But as the legislative
proceedings of the United States will never, I trust, be reproached for
the want of temper or of candor, so shall not the public happiness
languish from the want of my strenuous and warmest cooperation.

GO. WASHINGTON

***

State of the Union Address
George Washington
November 19, 1794

Fellow-Citizens of the Senate and House of Representatives:

When we call to mind the gracious indulgence of Heaven by which the
American people became a nation; when we survey the general prosperity
of our country, and look forward to the riches, power, and happiness to
which it seems destined, with the deepest regret do I announce to you
that during your recess some of the citizens of the United States have
been found capable of insurrection. It is due, however, to the character
of our Government and to its stability, which can not be shaken by the
enemies of order, freely to unfold the course of this event.

During the session of the year 1790 it was expedient to exercise the
legislative power granted by the Constitution of the United States "to
lay and collect excises". In a majority of the States scarcely an
objection was heard to this mode of taxation. In some, indeed, alarms
were at first conceived, until they were banished by reason and
patriotism. In the four western counties of Pennsylvania a prejudice,
fostered and imbittered by the artifice of men who labored for an
ascendency over the will of others by the guidance of their passions,
produced symptoms of riot and violence.

It is well known that Congress did not hesitate to examine the
complaints which were presented, and to relieve them as far as justice
dictated or general convenience would permit. But the impression which
this moderation made on the discontented did not correspond with what it
deserved. The arts of delusion were no longer confined to the efforts of
designing individuals. The very forbearance to press prosecutions was
misinterpreted into a fear of urging the execution of the laws, and
associations of men began to denounce threats against the officers
employed. From a belief that by a more formal concert their operation
might be defeated, certain self-created societies assumed the tone of
condemnation. Hence, while the greater part of Pennsylvania itself were
conforming themselves to the acts of excise, a few counties were
resolved to frustrate them. It is now perceived that every expectation
from the tenderness which had been hitherto pursued was unavailing, and
that further delay could only create an opinion of impotency or
irresolution in the Government. Legal process was therefore delivered to
the marshal against the rioters and delinquent distillers.

No sooner was he understood to be engaged in this duty than the
vengeance of armed men was aimed at his person and the person and
property of the inspector of the revenue. They fired upon the marshal,
arrested him, and detained him for some time as a prisoner. He was
obliged, by the jeopardy of his life, to renounce the service of other
process on the west side of the Allegheny Mountain, and a deputation was
afterwards sent to him to demand a surrender of that which he had
served. A numerous body repeatedly attacked the house of the inspector,
seized his papers of office, and finally destroyed by fire his buildings
and whatsoever they contained. Both of these officers, from a just
regard to their safety, fled to the seat of Government, it being avowed
that the motives to such outrages were to compel the resignation of the
inspector, to withstand by force of arms the authority of the United
States, and thereby to extort a repeal of the laws of excise and an
alteration in the conduct of Government.

Upon testimony of these facts an associate justice of the Supreme Court
of the United States notified to me that "in the counties of Washington
and Allegheny, in Pennsylvania, laws of the United States were opposed,
and the execution thereof obstructed, by combinations too powerful to be
suppressed by the ordinary course of judicial proceedings or by the
powers vested in the marshal of that district".

On this call, momentous in the extreme, I sought and weighted what might
best subdue the crisis. On the one hand the judiciary was pronounced to
be stripped of its capacity to enforce the laws; crimes which reached
the very existence of social order were perpetrated without control; the
friends of Government were insulted, abused, and overawed into silence
or an apparent acquiescence; and to yield to the treasonable fury of so
small a portion of the United States would be to violate the fundamental
principle of our Constitution, which enjoins that the will of the
majority shall prevail. On the other, to array citizen against citizen,
to publish the dishonor of such excesses, to encounter the expense and
other embarrassments of so distant an expedition, were steps too
delicate, too closely interwoven with many affecting considerations, to
be lightly adopted.

I postponed, therefore, the summoning of the militia immediately into
the field, but I required them to be held in readiness, that if my
anxious endeavors to reclaim the deluded and to convince the malignant
of their danger should be fruitless, military force might be prepared to
act before the season should be too far advanced.

My proclamation of the 7th of August last was accordingly issued, and
accompanied by the appointment of commissioners, who were charged to
repair to the scene of insurrection. They were authorized to confer with
any bodies of men or individuals. They were instructed to be candid and
explicit in stating the sensations which had been excited in the
Executive, and his earnest wish to avoid a resort to coercion; to
represent, however, that, without submission, coercion must be the
resort; but to invite them, at the same time, to return to the demeanor
of faithful citizens, by such accommodations as lay within the sphere of
Executive power. Pardon, too, was tendered to them by the Government of
the United States and that of Pennsylvania, upon no other condition than
a satisfactory assurance of obedience to the laws.

Although the report of the commissioners marks their firmness and
abilities, and must unite all virtuous men, by shewing that the means of
conciliation have been exhausted, all of those who had committed or
abetted the tumults did not subscribe the mild form which was proposed
as the atonement, and the indications of a peaceable temper were neither
sufficiently general nor conclusive to recommend or warrant the further
suspension of the march of the militia.

Thus the painful alternative could not be discarded. I ordered the
militia to march, after once more admonishing the insurgents in my
proclamation of the 25th of September last.

It was a task too difficult to ascertain with precision the lowest
degree of force competent to the quelling of the insurrection. From a
respect, indeed, to economy and the ease of my fellow citizens belonging
to the militia, it would have gratified me to accomplish such an
estimate. My very reluctance to ascribe too much importance to the
opposition, had its extent been accurately seen, would have been a
decided inducement to the smallest efficient numbers. In this
uncertainty, therefore, I put into motion fifteen thousand men, as being
an army which, according to all human calculation, would be prompt and
adequate in every view, and might, perhaps, by rendering resistance
desperate, prevent the effusion of blood. Quotas had been assigned to
the States of New Jersey, Pennsylvania, Maryland, and Virginia, the
governor of Pennsylvania having declared on this occasion an opinion
which justified a requisition to the other States.

As commander in chief of the militia when called into the actual service
of the United States, I have visited the places of general rendezvous to
obtain more exact information and to direct a plan for ulterior
movements. Had there been room for a persuasion that the laws were
secure from obstruction; that the civil magistrate was able to bring to
justice such of the most culpable as have not embraced the proffered
terms of amnesty, and may be deemed fit objects of example; that the
friends to peace and good government were not in need of that aid and
countenance which they ought always to receive, and, I trust, ever will
receive, against the vicious and turbulent, I should have caught with
avidity the opportunity of restoring the militia to their families and
homes. But succeeding intelligence has tended to manifest the necessity
of what has been done, it being now confessed by those who were not
inclined to exaggerate the ill conduct of the insurgents that their
malevolence was not pointed merely to a particular law, but that a
spirit inimical to all order has actuated many of the offenders. If the
state of things had afforded reason for the continuance of my presence
with the army, it would not have been withholden. But every appearance
assuring such an issue as will redound to the reputation and strength of
the United States, I have judged it most proper to resume my duties at
the seat of Government, leaving the chief command with the governor of
Virginia.

Still, however, as it is probable that in a commotion like the present,
whatsoever may be the pretense, the purposes of mischief and revenge may
not be laid aside, the stationing of a small force for a certain period
in the four western counties of Pennsylvania will be indispensable,
whether we contemplate the situation of those who are connected with the
execution of the laws or of others who may have exposed themselves by an
honorable attachment to them. Thirty days from the commencement of this
session being the legal limitation of the employment of the militia,
Congress can not be too early occupied with this subject.

Among the discussions which may arise from this aspect of our affairs,
and from the documents which will be submitted to Congress, it will not
escape their observation that not only the inspector of the revenue, but
other officers of the United States in Pennsylvania have, from their
fidelity in the discharge of their functions, sustained material
injuries to their property. The obligation and policy of indemnifying
them are strong and obvious. It may also merit attention whether policy
will not enlarge this provision to the retribution of other citizens
who, though not under the ties of office, may have suffered damage by
their generous exertions for upholding the Constitution and the laws.
The amount, even if all the injured were included, would not be great,
and on future emergencies the Government would be amply repaid by the
influence of an example that he who incurs a loss in its defense shall
find a recompense in its liberality.

While there is cause to lament that occurrences of this nature should
have disgraced the name or interrupted the tranquillity of any part of
our community, or should have diverted to a new application any portion
of the public resources, there are not wanting real and substantial
consolations for the misfortune. It has demonstrated that our prosperity
rests on solid foundations, by furnishing an additional proof that my
fellow citizens understand the true principles of government and
liberty; that they feel their inseparable union; that notwithstanding
all the devices which have been used to sway them from their interest
and duty, they are not as ready to maintain the authority of the laws
against licentious invasions as they were to defend their rights against
usurpation. It has been a spectacle displaying to the highest advantage
of republican government to behold the most and the least wealthy of our
citizens standing in the same ranks as private soldiers, preeminently
distinguished by being the army of the Constitution--undeterred by a
march of 300 miles over rugged mountains, by approach of an inclement
season, or by any other discouragement. Nor ought I to omit to
acknowledge the efficacious and patriotic cooperation which I have
experienced from the chief magistrates of the States to which my
requisitions have been addressed.

To every description of citizens, let praise be given, but let them
persevere in their affectionate vigilance over that precious depository
of American happiness, the Constitution of the United States. Let them
cherish it, too, for the sake of those who, from every clime, are daily
seeking a dwelling in our land. And when in the calm moments of
reflection they shall have retraced the origin and progress of the
insurrection, let them determine whether it has not been fomented by
combinations of men who, careless of consequences and disregarding the
unerring truth that those who rouse can not always appease a civil
convulsion, have disseminated, from an ignorance or perversion of facts,
suspicions, jealousies, and accusations of the whole Government.

Having thus fulfilled the engagement which I took when I entered into
office, "to the best of my ability to preserve, protect, and defend the
Constitution of the United States", on you, gentlemen, and the people by
whom you are deputed, I rely for support.

In the arrangement to which the possibility of a similar contingency
will naturally draw your attention it ought not to be forgotten that the
militia laws have exhibited such striking defects as could not have been
supplied by the zeal of our citizens. Besides the extraordinary expense
and waste, which are not the least of the defects, every appeal to those
laws is attended with a doubt on its success.

The devising and establishing of a well regulated militia would be a
genuine source of legislative honor and a perfect title to public
gratitude. I therefore entertain a hope that the present session will
not pass without carrying to its full energy the power of organizing,
arming, and disciplining the militia, and thus providing, in the
language of the Constitution, for calling them forth to execute the laws
of the Union, suppress insurrections, and repel invasions.

As auxiliary to the state of our defense, to which Congress can never
too frequently recur, they will not omit to inquire whether the
fortifications which have been already licensed by law be commensurate
with our exigencies.

The intelligence from the army under the command of General Wayne is a
happy presage to our military operations against the hostile Indians
north of the Ohio. From the advices which have been forwarded, the
advance which he has made must have damped the ardor of the savages and
weakened their obstinacy in waging war against the United States. And
yet, even at this late hour, when our power to punish them can not be
questioned, we shall not be unwilling to cement a lasting peace upon
terms of candor, equity, and good neighborhood.

Toward none of the Indian tribes have overtures of friendship been
spared. The Creeks in particular are covered from encroachment by the
imposition of the General Government and that of Georgia. From a desire
also to remove the discontents of the Six Nations, a settlement mediated
at Presque Isle, on Lake Erie, has been suspended, and an agent is now
endeavoring to rectify any misconception into which they may have
fallen. But I can not refrain from again pressing upon your
deliberations the plan which I recommended at the last session for the
improvement of harmony with all the Indians within our limits by the
fixing and conducting of trading houses upon the principles then
expressed.

Gentlemen of the House of Representatives:

The time which has elapsed since the commencement of our fiscal measures
has developed our pecuniary resources so as to open the way for a
definite plan for the redemption of the public debt. It is believed that
the result is such as to encourage Congress to consummate this work
without delay. Nothing can more promote the permanent welfare of the
nation and nothing would be more grateful to our constituents. Indeed,
whatsoever is unfinished of our system of public credit can not be
benefited by procrastination; and as far as may be practicable we ought
to place that credit on grounds which can not be disturbed, and to
prevent that progressive accumulation of debt which must ultimately
endanger all governments.

An estimate of the necessary appropriations, including the expenditures
into which we have been driven by the insurrection, will be submitted to
Congress.

Gentlemen of the Senate and of the House of Representatives:

The Mint of the United States has entered upon the coinage of the
precious metals, and considerable sums of defective coins and bullion
have been lodged with the Director by individuals. There is a pleasing
prospect that the institution will at no remote day realize the
expectation which was originally formed of its utility.

In subsequent communications certain circumstances of our intercourse
with foreign nations will be transmitted to Congress. However, it may
not be unseasonable to announce that my policy in our foreign
transactions has been to cultivate peace with all the world; to observe
the treaties with pure and absolute faith; to check every deviation from
the line of impartiality; to explain what may have been misapprehended
and correct what may have been injurious to any nation, and having thus
acquired the right, to lose no time in acquiring the ability to insist
upon justice being done to ourselves.

Let us unite, therefore, in imploring the Supreme Ruler of Nations to
spread his holy protection over these United States; to turn the
machinations of the wicked to the confirming of our Constitution; to
enable us at all times to root out internal sedition and put invasion to
flight; to perpetuate to our country that prosperity which his goodness
has already conferred, and to verify the anticipations of this
Government being a safeguard of human rights.

GO. WASHINGTON

***

State of the Union Address
George Washington
December 8, 1795

Fellow-Citizens of the Senate and House of Representatives:

I trust I do not deceive myself when I indulge the persuasion that I
have never met you at any period when more than at the present the
situation of our public affairs has afforded just cause for mutual
congratulation, and for inviting you to join with me in profound
gratitude to the Author of all Good for the numerous and extraordinary
blessings we enjoy.

The termination of the long, expensive, and distressing war in which we
have been engaged with certain Indians northwest of the Ohio is placed
in the option of the United States by a treaty which the commander of
our army has concluded provisionally with the hostile tribes in that
region.

In the adjustment of the terms the satisfaction of the Indians was
deemed worthy no less of the policy than of the liberality of the United
States as the necessary basis of durable tranquillity. The object, it is
believed, has been fully attained. The articles agreed upon will
immediately be laid before the Senate for their consideration.

The Creek and Cherokee Indians, who alone of the Southern tribes had
annoyed our frontiers, have lately confirmed their preexisting treaties
with us, and were giving evidence of a sincere disposition to carry them
into effect by the surrender of the prisoners and property they had
taken. But we have to lament that the fair prospect in this quarter has
been once more clouded by wanton murders, which some citizens of Georgia
are represented to have recently perpetrated on hunting parties of the
Creeks, which have again subjected that frontier to disquietude and
danger, which will be productive of further expense, and may occasion
more effusion of blood. Measures are pursuing to prevent or mitigate the
usual consequences of such outrages, and with the hope of their
succeeding at least to avert general hostility.

A letter from the Emperor of Morocco announces to me his recognition of
our treaty made with his father, the late Emperor, and consequently the
continuance of peace with that power. With peculiar satisfaction I add
that information has been received from an agent deputed on our part to
Algiers importing that the terms of the treaty with the Dey and Regency
of that country had been adjusted in such a manner as to authorize the
expectation of a speedy peace and the restoration of our unfortunate
fellow citizens from a grievous captivity.

The latest advices from our envoy at the Court of Madrid give, moreover,
the pleasing information that he had assurances of a speedy and
satisfactory conclusion of his negotiation. While the event depending
upon unadjusted particulars can not be regarded as ascertained, it is
agreeable to cherish the expectation of an issue which, securing
amicably very essential interests of the United States, will at the same
time lay the foundation of lasting harmony with a power whose friendship
we have uniformly and sincerely desired to cultivate.

Though not before officially disclosed to the House of Representatives,
you, gentlemen, are all apprised that a treaty of amity, commerce, and
navigation has been negotiated with Great Britain, and that the Senate
have advised and consented to its ratification upon a condition which
excepts part of one article. Agreeably thereto, and to the best judgment
I was able to form of the public interest after full and mature
deliberation, I have added my sanction. The result on the part of His
Britannic Majesty is unknown. When received, the subject will without
delay be placed before Congress.

This interesting summary of our affairs with regard to the foreign
powers between whom and the United States controversies have subsisted,
and with regard also to those of our Indian neighbors with whom we have
been in a state of enmity or misunderstanding, opens a wide field for
consoling and gratifying reflections. If by prudence and moderation on
every side the extinguishment of all the causes of external discord
which have heretofore menaced our tranquillity, on terms compatible with
our national rights and honor, shall be the happy result, how firm and
how precious a foundation will have been laid for accelerating,
maturing, and establishing the prosperity of our country.

Contemplating the internal situation as well as the external relations
of the United States, we discover equal cause for contentment and
satisfaction. While many of the nations of Europe, with their American
dependencies, have been involved in a contest unusually bloody,
exhausting, and calamitous, in which the evils of foreign war have been
aggravated by domestic convulsion and insurrection; in which many of the
arts most useful to society have been exposed to discouragement and
decay; in which scarcity of subsistence has imbittered other sufferings;
while even the anticipations of a return of the blessings of peace and
repose are alloyed by the sense of heavy and accumulating burthens,
which press upon all the departments of industry and threaten to clog
the future springs of government, our favored country, happy in a
striking contrast, has enjoyed tranquillity--a tranquillity the more
satisfactory because maintained at the expense of no duty. Faithful to
ourselves, we have violated no obligation to others.

Our agriculture, commerce, and manufactures prosper beyond former
example, the molestations of our trade (to prevent a continuance of
which, however, very pointed remonstrances have been made) being
overbalanced by the aggregate benefits which it derives from a neutral
position. Our population advances with a celerity which, exceeding the
most sanguine calculations, proportionally augments our strength and
resources, and guarantees our future security.

Every part of the Union displays indications of rapid and various
improvement; and with burthens so light as scarcely to be perceived,
with resources fully adequate to our present exigencies, with
governments founded on the genuine principles of rational liberty, and
with mild and wholesome laws, is it too much to say that our country
exhibits a spectacle of national happiness never surpassed, if ever
before equaled?

Placed in a situation every way so auspicious, motives of commanding
force impel us, with sincere acknowledgment to Heaven and pure love to
our country, to unite our efforts to preserve, prolong, and improve our
immense advantages. To cooperate with you in this desirable work is a
fervent and favorite wish of my heart.

It is a valuable ingredient in the general estimate of our welfare that
the part of our country which was lately the scene of disorder and
insurrection now enjoys the blessings of quiet and order. The misled
have abandoned their errors, and pay the respect to our Constitution and
laws which is due from good citizens to the public authorities of the
society. These circumstances have induced me to pardon generally the
offenders here referred to, and to extend forgiveness to those who had
been adjudged to capital punishment. For though I shall always think it
a sacred duty to exercise with firmness and energy the constitutional
powers with which I am vested, yet it appears to me no less consistent
with the public good than it is with my personal feelings to mingle in
the operations of Government every degree of moderation and tenderness
which the national justice, dignity, and safety may permit.

Gentlemen: Among the objects which will claim your attention in the
course of the session, a review of our military establishment is not the
least important. It is called for by the events which have changed, and
may be expected still further to change, the relative situation of our
frontiers. In this review you will doubtless allow due weight to the
considerations that the questions between us and certain foreign powers
are not yet finally adjusted, that the war in Europe is not yet
terminated, and that our Western posts, when recovered, will demand
provision for garrisoning and securing them. A statement of our present
military force will be laid before you by the Department of War.

With the review of our Army establishment is naturally connected that of
the militia. It will merit inquiry what imperfections in the existing
plan further experience may have unfolded. The subject is of so much
moment in my estimation as to excite a constant solicitude that the
consideration of it may be renewed until the greatest attainable
perfection shall be accomplished. Time is wearing away some advantages
for forwarding the object, while none better deserves the persevering
attention of the public councils.

While we indulge the satisfaction which the actual condition of our
Western borders so well authorizes, it is necessary that we should not
lose sight of an important truth which continually receives new
confirmations, namely, that the provisions heretofore made with a view
to the protection of the Indians from the violences of the lawless part
of our frontier inhabitants are insufficient. It is demonstrated that
these violences can now be perpetrated with impunity, and it can need no
argument to prove that unless the murdering of Indians can be restrained
by bringing the murderers to condign punishment, all the exertions of
the Government to prevent destructive retaliations by the Indians will
prove fruitless and all our present agreeable prospects illusory. The
frequent destruction of innocent women and children, who are chiefly the
victims of retaliation, must continue to shock humanity, and an enormous
expense to drain the Treasury of the Union.

To enforce upon the Indians the observance of justice it is
indispensable that there shall be competent means of rendering justice
to them. If these means can be devised by the wisdom of Congress, and
especially if there can be added an adequate provision for supplying the
necessities of the Indians on reasonable terms (a measure the mention of
which I the more readily repeat, as in all the conferences with them
they urge it with solicitude), I should not hesitate to entertain a
strong hope of rendering our tranquillity permanent. I add with pleasure
that the probability even of their civilization is not diminished by the
experiments which have been thus far made under the auspices of
Government. The accomplishment of this work, if practicable, will
reflect undecaying luster on our national character and administer the
most grateful consolations that virtuous minds can know.

Gentlemen of the House of Representatives:

The state of our revenue, with the sums which have been borrowed and
reimbursed pursuant to different acts of Congress, will be submitted
from the proper Department, together with an estimate of the
appropriations necessary to be made for the service of the ensuing year.

Whether measures may not be advisable to reinforce the provision of the
redemption of the public debt will naturally engage your examination.
Congress have demonstrated their sense to be, and it were superfluous to
repeat mine, that whatsoever will tend to accelerate the honorable
extinction of our public debt accords as much with the true interest of
our country as with the general sense of our constituents.

Gentlemen of the Senate and of the House of Representatives:

The statements which will be laid before you relative to the Mint will
shew the situation of that institution and the necessity of some further
legislative provisions for carrying the business of it more completely
into effect, and for checking abuses which appear to be arising in
particular quarters.

The progress in providing materials for the frigates and in building
them, the state of the fortifications of our harbors, the measures which
have been pursued for obtaining proper sites for arsenals and for
replenishing our magazines with military stores, and the steps which
have been taken toward the execution of the law for opening a trade with
the Indians will likewise be presented for the information of Congress.

Temperate discussion of the important subjects which may arise in the
course of the session and mutual forbearance where there is a difference
of opinion are too obvious and necessary for the peace, happiness, and
welfare of our country to need any recommendation of mine.

GO. WASHINGTON

***

State of the Union Address
George Washington
December 7, 1796

Fellow-Citizens of the Senate and House of Representatives:

In recurring to the internal situation of our country since I had last
the pleasure to address you, I find ample reason for a renewed
expression of that gratitude to the Ruler of the Universe which a
continued series of prosperity has so often and so justly called forth.

The acts of the last session which required special arrangements have
been as far as circumstances would admit carried into operation.

Measures calculated to insure a continuance of the friendship of the
Indians and to preserve peace along the extent of our interior frontier
have been digested and adopted. In the framing of these care has been
taken to guard on the one hand our advanced settlements from the
predatory incursions of those unruly individuals who can not be
restrained by their tribes, and on the other hand to protect the rights
secured to the Indians by treaty--to draw them nearer to the civilized
state and inspire them with correct conceptions of the power as well as
justice of the Government.

The meeting of the deputies from the Creek Nation at Colerain, in the
State of Georgia, which had for a principal object the purchase of a
parcel of their land by that State, broke up without its being
accomplished, the nation having previous to their departure instructed
them against making any sale. The occasion, however, has been improved
to confirm by a new treaty with the Creeks their preexisting engagements
with the United States, and to obtain their consent to the establishment
of trading houses and military posts within their boundary, by means of
which their friendship and the general peace may be more effectually
secured.

The period during the late session at which the appropriation was passed
for carrying into effect the treaty of amity, commerce, and navigation
between the United States and His Brittanic Majesty necessarily
procrastinated the reception of the posts stipulated to be delivered
beyond the date assigned for that event. As soon, however, as the
Governor-General of Canada could be addressed with propriety on the
subject, arrangements were cordially and promptly concluded for their
evacuation, and the United States took possession of the principal of
them, comprehending Oswego, Niagara, Detroit, Michilimackinac, and Fort
Miami, where such repairs and additions have been ordered to be made as
appeared indispensable.

The commissioners appointed on the part of the United States and of
Great Britain to determine which is the river St. Croix mentioned in the
treaty of peace of 1783, agreed in the choice of Egbert Benson, esq., of
New York, for the 3rd commissioner. The whole met at St. Andrew's, in
Passamaquoddy Bay, in the beginning of October, and directed surveys to
be made of the rivers in dispute; but deeming it impracticable to have
these surveys completed before the next year, they adjourned to meet at
Boston in August, 1797, for the final decision of the question.

Other commissioners appointed on the part of the United States,
agreeably to the 7th article of the treaty with Great Britain, relative
to captures and condemnation of vessels and other property, met the
commissioners of His Britannic Majesty in London in August last, when
John Trumbull, esq., was chosen by lot for the 5th commissioner. In
October following the board were to proceed to business. As yet there
has been no communication of commissioners on the part of Great Britain
to unite with those who have been appointed on the part of the United
States for carrying into effect the 6th article of the treaty.

The treaty with Spain required that the commissioners for running the
boundary line between the territory of the United States and His
Catholic Majesty's provinces of East and West Florida should meet at the
Natchez before the expiration of 6 months after the exchange of the
ratifications, which was effected at Aranjuez on the 25th day of April;
and the troops of His Catholic Majesty occupying any posts within the
limits of the United States were within the same time period to be
withdrawn. The commissioner of the United States therefore commenced his
journey for the Natchez in September, and troops were ordered to occupy
the posts from which the Spanish garrisons should be withdrawn.
Information has been recently received of the appointment of a
commissioner on the part of His Catholic Majesty for running the
boundary line, but none of any appointment for the adjustment of the
claims of our citizens whose vessels were captured by the armed vessels
of Spain.

In pursuance of the act of Congress passed in the last session for the
protection and relief of American sea-men, agents were appointed, one to
reside in Great Britain and the other in the West Indies. The effects of
the agency in the West Indies are not yet fully ascertained, but those
which have been communicated afford grounds to believe the measure will
be beneficial. The agent destined to reside in Great Britain declining
to accept the appointment, the business has consequently devolved on the
minister of the United States in London, and will command his attention
until a new agent shall be appointed.

After many delays and disappointments arising out of the European war,
the final arrangements for fulfilling the engagements made to the Dey
and Regency of Algiers will in all present appearance be crowned with
success, but under great, though inevitable, disadvantages in the
pecuniary transactions occasioned by that war, which will render further
provision necessary. The actual liberation of all our citizens who were
prisoners in Algiers, while it gratifies every feeling of heart, is
itself an earnest of a satisfactory termination of the whole
negotiation. Measures are in operation for effecting treaties with the
Regencies of Tunis and Tripoli.

To an active external commerce the protection of a naval force is
indispensable. This is manifest with regard to wars in which a State is
itself a party. But besides this, it is in our own experience that the
most sincere neutrality is not a sufficient guard against the
depredations of nations at war. To secure respect to a neutral flag
requires a naval force organized and ready to vindicate it from insult
or aggression. This may even prevent the necessity of going to war by
discouraging belligerent powers from committing such violations of the
rights of the neutral party as may, first or last, leave no other
option. From the best information I have been able to obtain it would
seem as if our trade to the Mediterranean without a protecting force
will always be insecure and our citizens exposed to the calamities from
which numbers of them have but just been relieved.

These considerations invite the United States to look to the means, and
to set about the gradual creation of a navy. The increasing progress of
their navigation promises them at no distant period the requisite supply
of sea-men, and their means in other respects favor the undertaking. It
is an encouragement, likewise, that their particular situation will give
weight and influence to a moderate naval force in their hands. Will it
not, then, be advisable to begin without delay to provide and lay up the
materials for the building and equipping of ships of war, and to proceed
in the work by degrees, in proportion as our resources shall render it
practicable without inconvenience, so that a future war of Europe may
not find our commerce in the same unprotected state in which it was
found by the present?

Congress have repeatedly, and not without success, directed their
attention to the encouragement of manufactures. The object is of too
much consequence not to insure a continuance of their efforts in every
way which shall appear eligible. As a general rule, manufactures on
public account are inexpedient; but where the state of things in a
country leaves little hope that certain branches of manufacture will for
a great length of time obtain, when these are of a nature essential to
the furnishing and equipping of the public force in time of war, are not
establishments for procuring them on public account to the extent of the
ordinary demand for the public service recommended by strong
considerations of national policy as an exception to the general rule?

Ought our country to remain in such cases dependent on foreign supply,
precarious because liable to be interrupted? If the necessary article
should in this mode cost more in time of peace, will not the security
and independence thence arising form an ample compensation?

Establishments of this sort, commensurate only with the calls of the
public service in time of peace, will in time of war easily be extended
in proportion to the exigencies of the Government, and may even perhaps
be made to yield a surplus for the supply of our citizens at large, so
as to mitigate the privations from the interruption of their trade. If
adopted, the plan ought to exclude all those branches which are already,
or likely soon to be, established in the country, in order that there
may be no danger of interference with pursuits of individual industry.

It will not be doubted that with reference either to individual or
national welfare agriculture is of primary importance. In proportion as
nations advance in population and other circumstances of maturity this
truth becomes more apparent, and renders the cultivation of the soil
more and more an object of public patronage. Institutions for promoting
it grow up, supported by the public purse; and to what object can it be
dedicated with greater propriety?

Among the means which have been employed to this end none have been
attended with greater success than the establishment of boards (composed
of proper characters) charged with collecting and diffusing information,
and enabled by premiums and small pecuniary aids to encourage and assist
a spirit of discovery and improvement. This species of establishment
contributes doubly to the increase of improvement by stimulating to
enterprise and experiment, and by drawing to a common center the results
everywhere of individual skill and observation, and spreading them
thence over the whole nation. Experience accordingly has shewn that they
are very cheap instruments of immense national benefits.

I have heretofore proposed to the consideration of Congress the
expediency of establishing a national university and also a military
academy. The desirableness of both these institutions has so constantly
increased with every new view I have taken of the subject that I can not
omit the opportunity of once for all recalling your attention to them.

The assembly to which I address myself is too enlightened not to be
fully sensible how much a flourishing state of the arts and sciences
contributes to national prosperity and reputation.

True it is that our country, much to its honor, contains many seminaries
of learning highly repeatable and useful; but the funds upon which they
rest are too narrow to command the ablest professors in the different
departments of liberal knowledge for the institution contemplated,
though they would be excellent auxiliaries.

Amongst the motives to such an institution, the assimilation of the
principles, opinions, and manners of our country-men by the common
education of a portion of our youth from every quarter well deserves
attention. The more homogenous our citizens can be made in these
particulars the greater will be our prospect of permanent union; and a
primary object of such a national institution should be the education of
our youth in the science of government. In a republic what species of
knowledge can be equally important and what duty more pressing on its
legislature than to patronize a plan for communicating it to those who
are to be the future guardians of the liberties of the country?

The institution of a military academy is also recommended by cogent
reasons. However pacific the general policy of a nation may be, it ought
never to be without an adequate stock of military knowledge for
emergencies. The first would impair the energy of its character, and
both would hazard its safety or expose it to greater evils when war
could not be avoided; besides that, war might often not depend upon its
own choice. In proportion as the observance of pacific maxims might
exempt a nation from the necessity of practicing the rules of the
military art ought to be its care in preserving and transmitting, by
proper establishments, the knowledge of that art.

Whatever argument may be drawn from particular examples superficially
viewed, a thorough examination of the subject will evince that the art
of war is at once comprehensive and complicated, that it demands much
previous study, and that the possession of it in its most improved and
perfect state is always of great moment to the security of a nation.
This, therefore, ought to be a serious care of every government, and for
this purpose an academy where a regular course of instruction is given
is an obvious expedient which different nations have successfully
employed.

The compensation to the officers of the United States in various
instances, and in none more than in respect to the most important
stations, appear to call for legislative revision. The consequences of a
defective provision are of serious import to the Government. If private
wealth is to supply the defect of public retribution, it will greatly
contract the sphere within which the selection of character for office
is to be made, and will proportionally diminish the probability of a
choice of men able as well as upright. Besides that, it should be
repugnant to the vital principles of our Government virtually to exclude
from public trusts talents and virtue unless accompanied by wealth.

While in our external relations some serious inconveniences and
embarrassments have been overcome and others lessened, it is with much
pain and deep regret I mention that circumstances of a very unwelcome
nature have lately occurred. Our trade has suffered and is suffering
extensive injuries in the West Indies from the cruisers and agents of
the French Republic, and communications have been received from its
minister here which indicate the danger of a further disturbance of our
commerce by its authority, and which are in other respects far from
agreeable.

It has been my constant, sincere, and earnest wish, in conformity with
that of our nation, to maintain cordial harmony and a perfectly friendly
understanding with that Republic. This wish remains unabated, and I
shall persevere in the endeavor to fulfill it to the utmost extent of
what shall be consistent with a just and indispensable regard to the
rights and honor of our country; nor will I easily cease to cherish the
expectation that a spirit of justice, candor, and friendship on the part
of the Republic will eventually insure success.

In pursuing this course, however, I can not forget what is due to the
character of our Government and nation, or to a full and entire
confidence in the good sense, patriotism, self-respect, and fortitude of
my country-men.

I reserve for a special message a more particular communication on this
interesting subject.

Gentlemen of the House of Representatives:

I have directed an estimate of the appropriations necessary for the
service of the ensuing year to be submitted from the proper Department,
with a view of the public receipts and expenditures to the latest period
to which an account can be prepared.

It is with satisfaction I am able to inform you that the revenues of the
United States continue in a state of progressive improvement.

A reenforcement of the existing provisions for discharging our public
debt was mentioned in my address at the opening of the last session.
Some preliminary steps were taken toward it, the maturing of which will
no doubt engage your zealous attention during the present. I will only
add that it will afford me a heart-felt satisfaction to concur in such
further measures as will ascertain to our country the prospect of a
speedy extinguishment of the debt. Posterity may have cause to regret if
from any motive intervals of tranquillity are left unimproved for
accelerating this valuable end.

Gentlemen of the Senate and of the House of Representatives:

My solicitude to see the militia of the United States placed on an
efficient establishment has been so often and so ardently expressed that
I shall but barely recall the subject to your view on the present
occasion, at the same time that I shall submit to your inquiry whether
our harbors are yet sufficiently secured.

The situation in which I now stand for the last time, in the midst of
the representatives of the people of the United States, naturally
recalls the period when the administration of the present form of
government commenced, and I can not omit the occasion to congratulate
you and my country on the success of the experiment, nor to repeat my
fervent supplications to the Supreme Ruler of the Universe and Sovereign
Arbiter of Nations that His providential care may still be extended to
the United States, that the virtue and happiness of the people may be
preserved, and that the Government which they have instituted for the
protection of their liberties may be perpetual.

GO. WASHINGTON

***

State of the Union Address
John Adams
November 22, 1797

Gentlemen of the Senate and Gentlemen of the House of Representatives:

I was for some time apprehensive that it would be necessary, on account
of the contagious sickness which afflicted the city of Philadelphia, to
convene the National Legislature at some other place. This measure it
was desirable to avoid, because it would occasion much public
inconvenience and a considerable public expense and add to the
calamities of the inhabitants of this city, whose sufferings must have
excited the sympathy of all their fellow citizens. Therefore, after
taking measures to ascertain the state and decline of the sickness, I
postponed my determination, having hopes, now happily realized, that,
without hazard to the lives or health of the members, Congress might
assemble at this place, where it was next by law to meet. I submit,
however, to your consideration whether a power to postpone the meeting
of Congress, without passing the time fixed by the Constitution upon
such occasions, would not be a useful amendment to the law of 1794.

Although I can not yet congratulate you on the reestablishment of peace
in Europe and the restoration of security to the persons and properties
of our citizens from injustice and violence at sea, we have,
nevertheless, abundant cause of gratitude to the source of benevolence
and influence for interior tranquillity and personal security, for
propitious seasons, prosperous agriculture, productive fisheries, and
general improvements, and, above all, for a rational spirit of civil and
religious liberty and a calm but steady determination to support our
sovereignty, as well as our moral and our religious principles, against
all open and secret attacks.

Our envoys extraordinary to the French Republic embarked--one in July,
the other in August--to join their colleague in Holland. I have received
intelligence of the arrival of both of them in Holland, from whence they
all proceeded on their journeys to Paris within a few days of the 19th
of September. Whatever may be the result of this mission, I trust that
nothing will have been omitted on my part to conduct the negotiation to
a successful conclusion, on such equitable terms as may be compatible
with the safety, honor and interest of the United States. Nothing, in
the mean time, will contribute so much to the preservation of peace and
the attainment of justice as manifestation of that energy and unanimity
of which on many former occasions the people of the United States have
given such memorable proofs, and the exertion of those resources for
national defense which a beneficent Providence has kindly placed within
their power.

It may be confidently asserted that nothing has occurred since the
adjournment of Congress which renders inexpedient those precautionary
measures recommended by me to the consideration of the two Houses at the
opening of your late extraordinary session. If that system was then
prudent, it is more so now, as increasing depredations strengthen the
reasons for its adoption.

Indeed, whatever may be the issue of the negotiation with France, and
whether the war in Europe is or is not to continue, I hold it most
certain that permanent tranquillity and order will not soon be obtained.
The state of society has so long been disturbed, the sense of moral and
religious obligations so much weakened, public faith and national honor
have been so impaired, respect to treaties has been so diminished, and
the law of nations has lost so much of its force, while pride, ambition,
avarice and violence have been so long unrestrained, there remains no
reasonable ground on which to raise an expectation that a commerce
without protection or defense will not be plundered.

The commerce of the United States is essential, if not to their
existence, at least to their comfort, their growth, prosperity, and
happiness. The genius, character, and habits of the people are highly
commercial. Their cities have been formed and exist upon commerce. Our
agriculture, fisheries, arts, and manufactures are connected with and
depend upon it. In short, commerce has made this country what it is, and
it can not be destroyed or neglected without involving the people in
poverty and distress. Great numbers are directly and solely supported by
navigation. The faith of society is pledged for the preservation of the
rights of commercial and sea faring no less than of the other citizens.
Under this view of our affairs, I should hold myself guilty of a neglect
of duty if I forbore to recommend that we should make every exertion to
protect our commerce and to place our country in a suitable posture of
defense as the only sure means of preserving both.

I have entertained an expectation that it would have been in my power at
the opening of this session to have communicated to you the agreeable
information of the due execution of our treaty with His Catholic Majesty
respecting the withdrawing of his troops from our territory and the
demarcation of the line of limits, but by the latest authentic
intelligence Spanish garrisons were still continued within our country,
and the running of the boundary line had not been commenced. These
circumstances are the more to be regretted as they can not fail to
affect the Indians in a manner injurious to the United States. Still,
however, indulging the hope that the answers which have been given will
remove the objections offered by the Spanish officers to the immediate
execution of the treaty, I have judged it proper that we should continue
in readiness to receive the posts and to run the line of limits. Further
information on this subject will be communicated in the course of the
session.

In connection with this unpleasant state of things on our western
frontier it is proper for me to mention the attempts of foreign agents
to alienate the affections of the Indian nations and to excite them to
actual hostilities against the United States. Great activity has been
exerted by those persons who have insinuated themselves among the Indian
tribes residing within the territory of the United States to influence
them to transfer their affections and force to a foreign nation, to form
them into a confederacy, and prepare them for war against the United
States. Although measures have been taken to counteract these
infractions of our rights, to prevent Indian hostilities, and to
preserve entire their attachment to the United States, it is my duty to
observe that to give a better effect to these measures and to obviate
the consequences of a repetition of such practices a law providing
adequate punishment for such offenses may be necessary.

The commissioners appointed under the 5th article of the treaty of
amity, commerce, and navigation between the United States and Great
Britain to ascertain the river which was truly intended under the name
of the river St. Croix mentioned in the treaty of peace, met at
Passamaquoddy Bay in 1796 October, and viewed the mouths of the rivers
in question and the adjacent shores and islands, and, being of opinion
that actual surveys of both rivers to their sources were necessary, gave
to the agents of the two nations instructions for that purpose, and
adjourned to meet at Boston in August. They met, but the surveys
requiring more time than had been supposed, and not being then
completed, the commissioners again adjourned, to meet at Providence, in
the State of Rhode Island, in June next, when we may expect a final
examination and decision.

The commissioners appointed in pursuance of the 6th article of the
treaty met at Philadelphia in May last to examine the claims of British
subjects for debts contracted before the peace and still remaining due
to them from citizens or inhabitants of the United States. Various
causes have hitherto prevented any determinations, but the business is
now resumed, and doubtless will be prosecuted without interruption.

Several decisions on the claims of citizens of the United States for
losses and damages sustained by reason of irregular and illegal captures
or condemnations of their vessels or other property have been made by
the commissioners in London conformably to the 7th article of the
treaty. The sums awarded by the commissioners have been paid by the
British Government. A considerable number of other claims, where costs
and damages, and not captured property, were the only objects in
question, have been decided by arbitration, and the sums awarded to the
citizens of the United States have also been paid.

The commissioners appointed agreeably to the 21st article of our treaty
with Spain met at Philadelphia in the summer past to examine and decide
on the claims of our citizens for losses they have sustained in
consequence of their vessels and cargoes having been taken by the
subjects of His Catholic Majesty during the late war between Spain and
France. Their sittings have been interrupted, but are now resumed.

The United States being obligated to make compensation for the losses
and damages sustained by British subjects, upon the award of the
commissioners acting under the 6th article of the treaty with Great
Britain, and for the losses and damages sustained by British subjects by
reason of the capture of their vessels and merchandise taken within the
limits and jurisdiction of the United States and brought into their
ports, or taken by vessels originally armed in ports of the United
States, upon the awards of the commissioners acting under the 7th
article of the same treaty, it is necessary that provision be made for
fulfilling these obligations.

The numerous captures of American vessels by the cruisers of the French
Republic and of some by those of Spain have occasioned considerable
expenses in making and supporting the claims of our citizens before
their tribunals. The sums required for this purpose have in divers
instances been disbursed by the consuls of the United States. By means
of the same captures great numbers of our sea men have been thrown
ashore in foreign countries, destitute of all means of subsistence, and
the sick in particular have been exposed to grievous sufferings. The
consuls have in these cases also advanced moneys for their relief. For
these advances they reasonably expect reimbursements from the United
States.

The consular act relative to sea men requires revision and amendment.
The provisions for their support in foreign countries and for their
return are found to be inadequate and ineffectual. Another provision
seems necessary to be added to the consular act. Some foreign vessels
have been discovered sailing under the flag of the United States and
with forged papers. It seldom happens that the consuls can detect this
deception, because they have no authority to demand an inspection of the
registers and sea letters.

Gentlemen of the House of Representatives:

It is my duty to recommend to your serious consideration those objects
which by the Constitution are placed particularly within your
sphere--the national debts and taxes.

Since the decay of the feudal system, by which the public defense was
provided for chiefly at the expense of individuals, the system of loans
has been introduced, and as no nation can raise within the year by taxes
sufficient sums for its defense and military operations in time of war
the sums loaned and debts contracted have necessarily become the
subjects of what have been called funding systems. The consequences
arising from the continual accumulation of public debts in other
countries ought to admonish us to be careful to prevent their growth in
our own. The national defense must be provided for as well as the
support of Government; but both should be accomplished as much as
possible by immediate taxes, and as little as possible by loans.

The estimates for the service of the ensuing year will by my direction
be laid before you.

Gentlemen of the Senate and Gentlemen of the House of Representatives:

We are met together at a most interesting period. The situations of the
principal powers of Europe are singular and portentous. Connected with
some by treaties and with all by commerce, no important event there can
be indifferent to us. Such circumstances call with peculiar importunity
not less for a disposition to unite in all those measures on which the
honor, safety, and prosperity of our country depend than for all the
exertions of wisdom and firmness.

In all such measures you may rely on my zealous and hearty concurrence.

***

State of the Union Address
John Adams
December 8, 1798

Gentlemen of the Senate and Gentlemen of the House of Representatives:

While with reverence and resignation we contemplate the dispensations of
Divine Providence in the alarming and destructive pestilence with which
several of our cities and towns have been visited, there is cause for
gratitude and mutual congratulations that the malady has disappeared and
that we are again permitted to assemble in safety at the seat of
Government for the discharge of our important duties. But when we
reflect that this fatal disorder has within a few years made repeated
ravages in some of our principal sea ports, and with increased
malignancy, and when we consider the magnitude of the evils arising from
the interruption of public and private business, whereby the national
interests are deeply affected, I think it my duty to invite the
Legislature of the Union to examine the expediency of establishing
suitable regulations in aid of the health laws of the respective States;
for these being formed on the idea that contagious sickness may be
communicated through the channels of commerce, there seems to be a
necessity that Congress, who alone can regulate trade, should frame a
system which, while it may tend to preserve the general health, may be
compatible with the interests of commerce and the safety of the revenue.

While we think on this calamity and sympathize with the immediate
sufferers, we have abundant reason to present to the Supreme Being our
annual oblations of gratitude for a liberal participation in the
ordinary blessings of His providence. To the usual subjects of gratitude
I can not omit to add one of the first importance to our well being and
safety; I mean that spirit which has arisen in our country against the
menaces and aggression of a foreign nation. A manly sense of national
honor, dignity, and independence has appeared which, if encouraged and
invigorated by every branch of the Government, will enable us to view
undismayed the enterprises of any foreign power and become the sure
foundation of national prosperity and glory.

The course of the transactions in relation to the United States and
France which have come to my knowledge during your recess will be made
the subject of a future communication. That communication will confirm
the ultimate failure of the measures which have been taken by the
Government of the United States toward an amicable adjustment of
differences with that power. You will at the same time perceive that the
French Government appears solicitous to impress the opinion that it is
averse to a rupture with this country, and that it has in a qualified
manner declared itself willing to receive a minister from the United
States for the purpose of restoring a good understanding. It is
unfortunate for professions of this kind that they should be expressed
in terms which may countenance the inadmissible pretension of a right to
prescribe the qualifications which a minister from the United States
should possess, and that while France is asserting the existence of a
disposition on her part to conciliate with sincerity the differences
which have arisen, the sincerity of a like disposition on the part of
the United States, of which so many demonstrative proofs have been
given, should even be indirectly questioned.

It is also worthy of observation that the decree of the Directory
alleged to be intended to restrain the depredations of French cruisers
on our commerce has not given, and can not give, any relief. It enjoins
them to conform to all the laws of France relative to cruising and
prizes, while these laws are themselves the sources of the depredations
of which we have so long, so justly, and so fruitlessly complained.

The law of France enacted in January last, which subjects to capture and
condemnation neutral vessels and their cargoes if any portion of the
latter are of British fabric or produce, although the entire property
belong to neutrals, instead of being rescinded has lately received a
confirmation by the failure of a proposition for its repeal. While this
law, which is an unequivocal act of war on the commerce of the nations
it attacks, continues in force those nations can see in the French
Government only a power regardless of their essential rights, of their
independence and sovereignty; and if they possess the means they can
reconcile nothing with their interest and honor but a firm resistance.

Hitherto, therefore, nothing is discoverable in the conduct of France
which ought to change or relax our measures of defense. On the contrary,
to extend and invigorate them is our true policy. We have no reason to
regret that these measures have been thus far adopted and pursued, and
in proportion as we enlarge our view of the portentous and incalculable
situation of Europe we shall discover new and cogent motives for the
full development of our energies and resources.

But in demonstrating by our conduct that we do not fear war in the
necessary protection of our rights and honor we shall give no room to
infer that we abandon the desire of peace. An efficient preparation for
war can alone insure peace. It is peace that we have uniformly and
perseveringly cultivated, and harmony between us and France may be
restored at her option. But to send another minister without more
determinate assurances that he would be received would be an act of
humiliation to which the United States ought not to submit. It must
therefore be left with France (if she is indeed desirous of
accommodation) to take the requisite steps.

The United States will steadily observe the maxims by which they have
hitherto been governed. They will respect the sacred rights of embassy;
and with a sincere disposition on the part of France to desist from
hostility, to make reparation for the injuries heretofore inflicted on
our commerce, and to do justice in future, there will be no obstacle to
the restoration of a friendly intercourse.

In making to you this declaration I give a pledge to France and the
world that the Executive authority of this country still adheres to the
humane and pacific policy which has invariably governed its proceedings,
in conformity with the wishes of the other branches of the Government
and of the people of the United States. But considering the late
manifestations of her policy toward foreign nations, I deem it a duty
deliberately and solemnly to declare my opinion that whether we
negotiate with her or not, vigorous preparations for war will be alike
indispensable. These alone will give to us an equal treaty and insure
its observance.

Among the measures of preparation which appear expedient, I take the
liberty to recall your attention to the naval establishment. The
beneficial effects of the small naval armament provided under the acts
of the last session are known and acknowledged. Perhaps no country ever
experienced more sudden and remarkable advantages from any measure of
policy than we have derived from the arming for our maritime protection
and defense.

We ought without loss of time to lay the foundation for an increase of
our Navy to a size sufficient to guard our coast and protect our trade.
Such a naval force as it is doubtless in the power of the United States
to create and maintain would also afford to them the best means of
general defense by facilitating the safe transportation of troops and
stores to every part of our extensive coast. To accomplish this
important object, a prudent foresight requires that systematic measures
be adopted for procuring at all times the requisite timber and other
supplies. In what manner this shall be done I leave to your
consideration.

I will now advert, gentlemen, to some matters of less moment, but proper
to be communicated to the National Legislature.

After the Spanish garrisons had evacuated the posts they occupied at the
Natchez and Walnut Hills the commissioner of the United States commences
his observations to ascertain the point near the Mississippi which
terminated the northernmost part of the 31st degree of north latitude.
From thence he proceeded to run the boundary line between the United
States and Spain. He was afterwards joined by the Spanish commissioner,
when the work of the former was confirmed, and they proceeded together
to the demarcation of the line.

Recent information renders it probable that the Southern Indians, either
instigated to oppose the demarcation or jealous of the consequences of
suffering white people to run a line over lands to which the Indian
title had not been extinguished, have ere this time stopped the progress
of the commissioners; and considering the mischiefs which may result
from continuing the demarcation in opposition to the will of the Indian
tribes, the great expense attending it, and that the boundaries which
the commissioners have actually established probably extend at least as
far as the Indian title has been extinguished, it will perhaps become
expedient and necessary to suspend further proceedings by recalling our
commissioner.

The commissioners appointed in pursuance of the 5th article of the
treaty of amity, commerce, and navigation between the United States and
His Britannic Majesty to determine what river was truly intended under
the name of the river St. Croix mentioned in the treaty of peace, and
forming a part of the boundary therein described, have finally decided
that question. On the 25th of October they made their declaration that a
river called Scoodiac, which falls into Passamaquoddy Bay at its
northwestern quarter, was the true St. Croix intended in the treaty of
peace, as far as its great fork, where one of its streams comes from the
westward and the other from the northward, and that the latter stream is
the continuation of the St. Croix to its source.

This decision, it is understood, will preclude all contention among the
individual claimants, as it seems that the Scoodiac and its northern
branch bound the grants of land which have been made by the respective
adjoining Governments.

A subordinate question, however, it has been suggested, still remains to
be determined. Between the mouth of the St. Croix as now settled and
what is usually called the Bay of Fundy lie a number of valuable
islands. The commissioners have not continued the boundary line through
any channel of these islands, and unless the bay of Passamaquoddy be a
part of the Bay of Fundy this further adjustment of boundary will be
necessary, but it is apprehended that this will not be a matter of any
difficulty.

Such progress has been made in the examination and decision of cases of
captures and condemnations of American vessels which were the subject of
the 7th article of the treaty of amity, commerce, and navigation between
the United States and Great Britain that it is supposed the
commissioners will be able to bring their business to a conclusion in
August of the ensuing year.

The commissioners acting under the 25th article of the treaty between
the United States and Spain have adjusted most of the claims of our
citizens for losses sustained in consequence of their vessels and
cargoes having been taken by the subjects of His Catholic Majesty during
the late war between France and Spain.

Various circumstances have concurred to delay the execution of the law
for augmenting the military establishment, among these the desire of
obtaining the fullest information to direct the best selection of
officers. As this object will now be speedily accomplished, it is
expected that the raising and organizing of the troops will proceed
without obstacle and with effect.

Gentlemen of the House of Representatives:

I have directed an estimate of the appropriations which will be
necessary for the service of the ensuing year to be laid before you,
accompanied with a view of the public receipts and expenditures to a
recent period.

It will afford you satisfaction to infer the great extent and solidity
of the public resources from the prosperous state of the finances,
notwithstanding the unexampled embarrassments which have attended
commerce. When you reflect on the conspicuous examples of patriotism and
liberality which have been exhibited by our mercantile fellow citizens,
and how great a proportion of the public resources depends on their
enterprise, you will naturally consider whether their convenience can
not be promoted and reconciled with the security of the revenue by a
revision of the system by which the collection is at present regulated.

During your recess measures have been steadily pursued for effecting the
valuations and returns directed by the act of the last session,
preliminary to the assessment and collection of a direct tax. No other
delays or obstacles have been experienced except such as were expected
to arise from the great extent of our country and the magnitude and
novelty of the operation, and enough has been accomplished to assure a
fulfillment of the views of the Legislature.

Gentlemen of the Senate and Gentlemen of the House of Representatives:

I can not close this address without once more adverting to our
political situation and inculcating the essential importance of uniting
in the maintenance of our dearest interests; and I trust that by the
temper and wisdom of your proceedings and by a harmony of measures we
shall secure to our country that weight and respect to which it is so
justly entitled.

***

State of the Union Address
John Adams
December 3, 1799

Gentlemen of the Senate and Gentlemen of the House of Representatives:

It is with peculiar satisfaction that I meet the 6th Congress of the
United States of America. Coming from all parts of the Union at this
critical and interesting period, the members must be fully possessed of
the sentiments and wishes of our constituents.

The flattering prospects of abundance from the labors of the people by
land and by sea; the prosperity of our extended commerce,
notwithstanding interruptions occasioned by the belligerent state of a
great part of the world; the return of health, industry, and trade to
those cities which have lately been afflicted with disease, and the
various and inestimable advantages, civil and religious, which, secured
under our happy frame of government, are continued to us unimpaired,
demand of the whole American people sincere thanks to a benevolent Deity
for the merciful dispensations of His providence.

But while these numerous blessings are recollected, it is a painful duty
to advert to the ungrateful return which has been made for them by some
of the people in certain counties of Pennsylvania, where, seduced by the
arts and misrepresentations of designing men, they have openly resisted
the law directing the valuation of houses and lands. Such defiance was
given to the civil authority as rendered hopeless all further attempts
by judicial process to enforce the execution of the law, and it became
necessary to direct a military force to be employed, consisting of some
companies of regular troops, volunteers, and militia, by whose zeal and
activity, in cooperation with the judicial power, order and submission
were restored and many of the offenders arrested. Of these, some have
been convicted of misdemeanors, and others, charged with various crimes,
remain to be tried.

To give due effect to the civil administration of Government and to
insure a just execution of the laws, a revision and amendment of the
judiciary system is indispensably necessary. In this extensive country
it can not but happen that numerous questions respecting the
interpretation of the laws and the rights and duties of officers and
citizens must arise. On the one hand, the laws should be executed; on
the other, individuals should be guarded from oppression. Neither of
these objects is sufficiently assured under the present organization of
the judicial department. I therefore earnestly recommend the subject to
your serious consideration.

Persevering in the pacific and humane policy which had been invariably
professed and sincerely pursued by the Executive authority of the United
States, when indications were made on the part of the French Republic of
a disposition to accommodate the existing differences between the two
countries, I felt it to be my duty to prepare for meeting their advances
by a nomination of ministers upon certain conditions which the honor of
our country dictated, and which its moderation had given it a right to
prescribe.

The assurances which were required of the French Government previous to
the departure of our envoys have been given through their minister of
foreign relations, and I have directed them to proceed on their mission
to Paris. They have full power to conclude a treaty, subject to the
constitutional advice and consent of the Senate. The characters of these
gentlemen are sure pledges to their country that nothing incompatible
with its honor or interest, nothing inconsistent with our obligations of
good faith or friendship to any other nation, will be stipulated.

It appearing probable from the information I received that our
commercial intercourse with some ports in the island of St. Domingo
might safely be renewed, I took such steps as seemed to me expedient to
ascertain that point. The result being satisfactory, I then, in
conformity with the act of Congress on the subject, directed the
restraints and prohibitions of that intercourse to be discontinued on
terms which were made known by proclamation. Since the renewal of this
intercourse our citizens trading to those ports, with their property,
have been duly respected, and privateering from those ports has ceased.

In examining the claims of British subjects by the commissioners at
Philadelphia, acting under the 6th article of the treaty of amity,
commerce, and navigation with Great Britain, a difference of opinion on
points deemed essential in the interpretation of that article has arisen
between the commissioners appointed by the United States and the other
members of that board, from which the former have thought it their duty
to withdraw. It is sincerely to be regretted that the execution of an
article produced by a mutual spirit of amity and justice should have
been thus unavoidably interrupted. It is, however, confidently expected
that the same spirit of amity and the same sense of justice in which it
originated will lead to satisfactory explanations.

In consequence of the obstacles to the progress of the commission in
Philadelphia, His Britannic Majesty has directed the commissioners
appointed by him under the 7th article of the treaty relating to the
British captures of American vessels to withdraw from the board sitting
in London, but with the express declaration of his determination to
fulfill with punctuality and good faith the engagements which His
Majesty has contracted by his treaty with the United States, and that
they will be instructed to resume their functions whenever the obstacles
which impede the progress of the commission at Philadelphia shall be
removed. It being in like manner my sincere determination, so far as the
same depends on me, that with equal punctuality and good faith the
engagements contracted by the United States in their treaties with His
Britannic Majesty shall be fulfilled, I shall immediately instruct our
minister at London to endeavor to obtain the explanation necessary to a
just performance of those engagements on the part of the United States.
With such dispositions on both sides, I can not entertain a doubt that
all difficulties will soon be removed and that the two boards will then
proceed and bring the business committed to them respectively to a
satisfactory conclusion.

The act of Congress relative to the seat of the Government of the United
States requiring that on the 1st Monday of December next it should be
transferred from Philadelphia to the District chosen for its permanent
seat, it is proper for me to inform you that the commissioners appointed
to provide suitable buildings for the accommodation of Congress and of
the President and of the public offices of the Government have made a
report of the state of the buildings designed for those purposes in the
city of Washington, from which they conclude that the removal of the
seat of Government to that place at the time required will be
practicable and the accommodation satisfactory. Their report will be
laid before you.

Gentlemen of the House of Representatives:

I shall direct the estimates of the appropriations necessary for the
service of the ensuing year, together with an account of the revenue and
expenditure, to be laid before you. During a period in which a great
portion of the civilized world has been involved in a war unusually
calamitous and destructive, it was not to be expected that the United
States could be exempted from extraordinary burthens. Although the
period is not arrived when the measures adopted to secure our country
against foreign attacks can be renounced, yet it is alike necessary for
the honor of the Government and the satisfaction of the community that
an exact economy should be maintained. I invite you, gentlemen, to
investigate the different branches of the public expenditure. The
examination will lead to beneficial retrenchments or produce a
conviction of the wisdom of the measures to which the expenditure
relates.

Gentlemen of the Senate and Gentlemen of the House of Representatives:

At a period like the present, when momentous changes are occurring and
every hour is preparing new and great events in the political world,
when a spirit of war is prevalent in almost every nation with whose
affairs the interests of the United States have any connection, unsafe
and precarious would be our situation were we to neglect the means of
maintaining our just rights. The result of the mission to France is
uncertain; but however it may terminate, a steady perseverance in a
system of national defense commensurate with our resources and the
situation of our country is an obvious dictate of wisdom; for, remotely
as we are placed from the belligerent nations, and desirous as we are,
by doing justice to all, to avoid offense to any, nothing short of the
power of repelling aggressions will secure to our country a rational
prospect of escaping the calamities of war or national degradation. As
to myself, it is my anxious desire so to execute the trust reposed in me
as to render the people of the United States prosperous and happy. I
rely with entire confidence on your cooperation in objects equally your
care, and that our mutual labors will serve to increase and confirm
union among our fellow citizens and an unshaken attachment to our
Government.

***

State of the Union Address
John Adams
November 11, 1800

Gentlemen of the Senate and Gentlemen of the House of Representatives:

Immediately after the adjournment of Congress at their last session in
Philadelphia I gave directions, in compliance with the laws, for the
removal of the public offices, records, and property. These directions
have been executed, and the public officers have since resided and
conducted the ordinary business of the Government in this place.

I congratulate the people of the United States on the assembling of
Congress at the permanent seat of their Government, and I congratulate
you, gentlemen, on the prospect of a residence not to be changed.
Although there is cause to apprehend that accommodations are not now so
complete as might be wished, yet there is great reason to believe that
this inconvenience will cease with the present session.

It would be unbecoming the representatives of this nation to assemble
for the first time in this solemn temple without looking up to the
Supreme Ruler of the Universe and imploring His blessing.

May this territory be the residence of virtue and happiness! In this
city may that piety and virtue, that wisdom and magnanimity, that
constancy and self-government, which adorned the great character whose
name it bears be forever held in veneration! Here and throughout our
country may simple manners, pure morals, and true religion flourish
forever!

It is with you, gentlemen, to consider whether the local powers over the
District of Columbia vested by the Constitution in the Congress of the
United States shall be immediately exercised. If in your opinion this
important trust ought now to be executed, you can not fail while
performing it to take into view the future probable situation of the
territory for the happiness of which you are about to provide. You will
consider it as the capital of a great nation advancing with unexampled
rapidity in arts, in commerce, in wealth, and in population, and
possessing within itself those energies and resources which, if not
thrown away or lamentably misdirected, will secure to it a long course
of prosperity and self-government.

In compliance with a law of the last session of Congress, the officers
and soldiers of the temporary army have been discharged. It affords real
pleasure to recollect the honorable testimony they gave of the patriotic
motives which brought them into the service of their country, by the
readiness and regularity with which they returned to the station of
private citizens.

It is in every point of view of such primary importance to carry the
laws into prompt and faithful execution, and to render that part of the
administration of justice which the Constitution and laws devolve on the
Federal courts as convenient to the people as may consist with their
present circumstances, that I can not omit once more to recommend to
your serious consideration the judiciary system of the United States. No
subject is more interesting than this to the public happiness, and to
none can those improvements which may have been suggested by experience
be more beneficially applied.

A treaty of amity and commerce with the King of Prussia has been
concluded and ratified. The ratifications have been exchanged, and I
have directed the treaty to be promulgated by proclamation.

The difficulties which suspended the execution of the 6th article of our
treaty of amity, commerce, and navigation with Great Britain have not
yet been removed. The negotiation on this subject is still depending. As
it must be for the interest and honor of both nations to adjust this
difference with good faith, I indulge confidently the expectation that
the sincere endeavors of the Government of the United States to bring it
to an amicable termination will not be disappointed.

The envoys extraordinary and ministers plenipotentiary from the United
States to France were received by the First Consul with the respect due
to their character, and 3 persons with equal powers were appointed to
treat with them. Although at the date of the last official intelligence
the negotiation had not terminated, yet it is to be hoped that our
efforts to effect an accommodation will at length meet with a success
proportioned to the sincerity with which they have been so often
repeated.

While our best endeavors for the preservation of harmony with all
nations will continue to be used, the experience of the world and our
own experience admonish us of the insecurity of trusting too confidently
to their success. We can not, without committing a dangerous imprudence,
abandon those measures of self protection which are adapted to our
situation and to which, notwithstanding our pacific policy, the violence
and injustice of others may again compel us to resort. While our vast
extent of sea coast, the commercial and agriculture habits of our
people, the great capital they will continue to trust on the ocean,
suggest the system of defense which will be most beneficial to
ourselves, our distance from Europe and our resources for maritime
strength will enable us to employ it with effect. Seasonable and
systematic arrangements, so far as our resources will justify, for a
navy adapted to defensive war, and which may in case of necessity be
quickly brought into use, seem to be as much recommended by a wise and
true economy as by a just regard for our future tranquillity, for the
safety of our shores, and for the protection of our property committed
to the ocean.

The present Navy of the United States, called suddenly into existence by
a great national exigency, has raised us in our own esteem, and by the
protection afforded to our commerce has effected to the extent of our
expectations the objects for which it was created.

In connection with a navy ought to be contemplated the fortification of
some of our principal sea ports and harbors. A variety of
considerations, which will readily suggest themselves, urge an attention
to this measure of precaution. To give security to our principal ports
considerable sums have already been expended, but the works remain
incomplete. It is for Congress to determine whether additional
appropriations shall be made in order to render competent to the
intended purposes the fortifications which have been commenced.

The manufacture of arms within the United States still invites the
attention of the National Legislature. At a considerable expense to the
public this manufacture has been brought to such a state of maturity as,
with continued encouragement, will supersede the necessity of future
importations from foreign countries.

Gentlemen of the House of Representatives:

I shall direct the estimates of the appropriations necessary for the
ensuing year, together with an account of the public revenue and
expenditure to a late period, to be laid before you. I observe with much
satisfaction that the product of the revenue during the present year has
been more considerable than during any former equal period. This result
affords conclusive evidence of the great resources of this country and
of the wisdom and efficiency of the measures which have been adopted by
Congress for the protection of commerce and preservation of public
credit.

Gentlemen of the Senate and Gentlemen of the House of Representatives:

As one of the grand community of nations, our attention is irresistibly
drawn to the important scenes which surround us. If they have exhibited
an uncommon portion of calamity, it is the province of humanity to
deplore and of wisdom to avoid the causes which may have produced it.
If, turning our eyes homeward, we find reason to rejoice at the prospect
which presents itself; if we perceive the interior of our country
prosperous, free, and happy; if all enjoy in safety, under the
protection of laws emanating only from the general will, the fruits of
their own labor, we ought to fortify and cling to those institutions
which have been the source of such real felicity and resist with
unabating perseverance the progress of those dangerous innovations which
may diminish their influence.

To your patriotism, gentlemen, has been confided the honorable duty of
guarding the public interests; and while the past is to your country a
sure pledge that it will be faithfully discharged, permit me to assure
you that your labors to promote the general happiness will receive from
me the most zealous cooperation.

***

State of the Union Address
Thomas Jefferson
December 8, 1801

Fellow Citizens of the Senate and House of Representatives:

It is a circumstance of sincere gratification to me that on meeting the
great council of our nation I am able to announce to them on grounds of
reasonable certainty that the wars and troubles which have for so many
years afflicted our sister nations have at length come to an end, and
that the communications of peace and commerce are once more opening
among them. Whilst we devoutly return thanks to the beneficent Being who
has been pleased to breathe into them the spirit of conciliation and
forgiveness, we are bound with peculiar gratitude to be thankful to Him
that our own peace has been preserved through so perilous a season, and
ourselves permitted quietly to cultivate the earth and to practice and
improve those arts which tend to increase our comforts. The assurances,
indeed, of friendly disposition received from all the powers with whom
we have principle relations had inspired a confidence that our peace
with them would not have been disturbed. But a cessation of
irregularities which had affected the commerce of neutral nations and of
the irritations and injuries produced by them can not but add to this
confidence, and strengthens at the same time the hope that wrongs
committed on unoffending friends under a pressure of circumstances will
now be reviewed with candor, and will be considered as founding just
claims of retribution for the past and new assurance for the future.

Among our Indian neighbors also a spirit of peace and friendship
generally prevails, and I am happy to inform you that the continued
efforts to introduce among them the implements and the practice of
husbandry and the household arts have not been without success; that
they are becoming more and more sensible of the superiority of this
dependence for clothing and subsistence over the precarious resources of
hunting and fishing, and already we are able to announce that instead of
that constant diminution of their numbers produced by their wars and
their wants, some of them begin to experience an increase of population.

To this state of general peace with which we have been blessed, one only
exception exists. Tripoli, the least considerable of the Barbary States,
had come forward with demands unfounded either in right or in compact,
and had permitted itself to denounce war on our failure to comply before
a given day. The style of the demand admitted but one answer.

I sent a small squadron of frigates into the Mediterranean, with
assurances to that power of our sincere desire to remain in peace, but
with orders to protect our commerce against the threatened attack. The
measure was seasonable and salutary. The Bey had already declared war.
His cruisers were out. Two had arrived at Gibraltar. Our commerce in the
Mediterranean was blockaded and that of the Atlantic in peril.

The arrival of our squadron dispelled the danger. One of the Tripolitan
cruisers having fallen in with and engaged the small schooner
Enterprise, commanded by Lieutenant Sterret, which had gone as a tender
to our larger vessels, was captured, after a heavy slaughter of her men,
without the loss of a single one on our part. The bravery exhibited by
our citizens on that element will, I trust, be a testimony to the world
that it is not the want of that virtue which makes us seek their peace,
but a conscientious desire to direct the energies of our nation to the
multiplication of the human race, and not to its destruction.
Unauthorized by the Constitution, without the sanction of Congress, to
go beyond the line of defense, the vessel, being disabled from
committing further hostilities, was liberated with its crew.

The Legislature will doubtless consider whether, by authorizing measures
of offense also, they will place our force on an equal footing with that
of its adversaries. I communicate all material information on this
subject, that in the exercise of this important function confided by the
Constitution to the Legislature exclusively their judgment may form
itself on a knowledge and consideration of every circumstance of weight.

I wish I could say that our situation with all the other Barbary States
was entirely satisfactory. Discovering that some delays had taken place
in the performance of certain articles stipulated by us, I thought it my
duty, by immediate measures for fulfilling them, to vindicate to
ourselves the right of considering the effect of departure from
stipulation on their side. From the papers which will be laid before you
you will be enabled to judge whether our treaties are regarded by them
as fixing at all the measure of their demands or as guarding from the
exercise of force our vessels within their power, and to consider how
far it will be safe and expedient to leave our affairs with them in
their present posture.

I lay before you the result of the census lately taken of our
inhabitants, to a conformity with which we are now to reduce the ensuing
ration of representation and taxation. You will perceive that the
increase of numbers during the last 10 years, proceeding in geometric
ratio, promises a duplication in little more than 22 years. We
contemplate this rapid growth and the prospect it holds up to us, not
with a view to the injuries it may enable us to do others in some future
day, but to the settlement of the extensive country still remaining
vacant within our limits to the multiplication of men susceptible of
happiness, educated in the love of order, habituated to self-government,
and valuing its blessings above all price.

Other circumstances, combined with the increase of numbers, have
produced an augmentation of revenue arising from consumption in a ratio
far beyond that of population alone; and though the changes in foreign
relations now taking place so desirably for the whole world may for a
season affect this branch of revenue, yet weighing all probabilities of
expense as well as of income, there is reasonable ground of confidence
that we may now safely dispense with all the internal taxes,
comprehending excise, stamps, auctions, licenses, carriages, and refined
sugars, to which the postage on news papers may be added to facilitate
the progress of information, and that the remaining sources of revenue
will be sufficient to provide for the support of Government, to pay the
interest of the public debts, and to discharge the principals within
shorter periods than the laws or the general expectation had
contemplated.

War, indeed, and untoward events may change this prospect of things and
call for expenses which imposts could not meet; but sound principles
will not justify our taxing the industry of our fellow citizens to
accumulate treasure for wars to happen we know not when, and which might
not, perhaps, happen but from the temptations offered by that treasure.

These views, however, of reducing our burthens are formed on the
expectation that a sensible and at the same time a salutary reduction
may take place in our habitual expenditures. For this purpose those of
the civil Government, the Army, and Navy will need revisal.

When we consider that this Government is charged with the external and
mutual relations only of these States; that the States themselves have
principal care of our persons, our property, and our reputation,
constituting the great field of human concerns, we may well doubt
whether our organization is not too complicated, too expensive; whether
offices and officers have not been multiplied unnecessarily and
sometimes injuriously to the service they were meant to promote.

I will cause to be laid before you an essay toward a statement of those
who, under public employment of various kinds, draw money from the
Treasury or from our citizens. Time has not permitted a perfect
enumeration, the ramifications of office being too multiplied and remote
to be completely traced in a first trial.

Among those who are dependent on Executive discretion I have begun the
reduction of what was deemed unnecessary. The expenses of diplomatic
agency have been considerably diminished. The inspectors of internal
revenue who were found to obstruct the accountability of the institution
have been discontinued. Several agencies created by Executive
authorities, on salaries fixed by that also, have been suppressed, and
should suggest the expediency of regulating that power by law, so as to
subject its exercises to legislative inspection and sanction.

Other reformations of the same kind will be pursued with that caution
which is requisite in removing useless things, not to injure what is
retained. But the great mass of public offices is established by law,
and therefore by law alone can be abolished. Should the Legislature
think it expedient to pass this roll in review and try all its parts by
the test of public utility, they may be assured of every aid and light
which Executive information can yield.

Considering the general tendency to multiply offices and dependencies
and to increase expense to the ultimate term of burthen which the
citizen can bear, it behooves us to avail ourselves of every occasion
which presents itself for taking off the surcharge, that it never may be
seen here that after leaving to labor the smallest portion of its
earnings on which it can subsist, Government shall itself consume the
whole residue of what it was instituted to guard.

In our care, too, of the public contributions intrusted to our direction
it would be prudent to multiply barriers against their dissipation by
appropriating specific sums to every specific purpose susceptible of
definition; by disallowing all applications of money varying from the
appropriation in object or transcending it in amount; by reducing the
undefined field of contingencies and thereby circumscribing
discretionary powers over money, and by bringing back to a single
department all accountabilities for money, where the examinations may be
prompt, efficacious, and uniform.

An account of the receipts and expenditures of the last year, as
prepared by the Secretary of the Treasury, will, as usual, be laid
before you. The success which has attended the late sales of the public
lands shews that with attention they may be made an important source of
receipt. Among the payments those made in discharge of the principal and
interest of the national debt will shew that the public faith has been
exactly maintained. To these will be added an estimate of appropriations
necessary for the ensuing year. This last will, of course, be affected
by such modifications of the system of expense as you shall think proper
to adopt.

A statement has been formed by the Secretary of War, on mature
consideration, of all the posts and stations where garrisons will be
expedient and of the number of men requisite for each garrison. The
whole amount is considerably short of the present military
establishment. For the surplus no particular use can be pointed out.

For defense against invasion their number is as nothing, nor is it
conceived needful or safe that a standing army should be kept up in time
of peace for that purpose. Uncertain as we must ever be of the
particular point in our circumference where an enemy may choose to
invade us, the only force which can be ready at every point and
competent to oppose them is the body of the neighboring citizens as
formed into a militia. On these, collected from the parts most
convenient in numbers proportioned to the invading force, it is best to
rely not only to meet the first attack, but if it threatens to be
permanent to maintain the defense until regulars may be engaged to
relieve them. These considerations render it important that we should at
every session continue to amend the defects which from time to time shew
themselves in the laws for regulating the militia until they are
sufficiently perfect. Nor should we now or at any time separate until we
say we have done everything for the militia which we could do were an
enemy at our door.

The provision of military stores on hand will be laid before you, that
you may judge of the additions still requisite.

With respect to the extent to which our naval preparations should be
expected to appear, but just attention to the circumstances of every
part of the Union will doubtless reconcile all. A small force will
probably continue to be wanted for actual service in the Mediterranean.
Whatever annual sum beyond that you may think proper to appropriate to
naval preparations would perhaps be better employed in providing those
articles which may be kept without waste or consumption, and be in
readiness when any exigence calls them into use. Progress has been made,
as will appear by papers now communicated, in providing materials for
74-gun ships as directed by law.

How far the authority given by the Legislature for procuring and
establishing sites for naval purposes has been perfectly understood and
pursued in the execution admits of some doubt. A statement of the
expenses already incurred on that subject is now laid before you. I have
in certain cases suspended or slackened these expenditures, that the
Legislature might determine whether so many yards are necessary as have
been contemplated.

The works at this place are among those permitted to go on, and 5 of the
7 frigates directed to be laid up have been brought and laid up here,
where, besides the safety of their position, they are under the eye of
the Executive Administration, as well as of its agents, and where
yourselves also will be guided by your own view in the legislative
provisions respecting them which may from time to time be necessary.
They are preserved in such condition, as well the vessels as whatever
belongs to them, as to be at all times ready for sea on a short warning.
Two others are yet to be laid up so soon as they shall have received the
repairs requisite to put them also into sound condition. As a
superintending officer will be necessary at each yard, his duties and
emoluments, hitherto fixed by the Executive, will be a more proper
subject for legislation. A communication will also be made of our
progress in the execution of the law respecting the vessels directed to
be sold.

The fortifications of our harbors, more or less advanced, present
considerations of great difficulty. While some of them are on a scale
sufficiently proportioned to the advantages of their position, to the
efficacy of their protection, and the importance of the points within
it, others are so extensive, will cost so much in their first erection,
so much in their maintenance, and require such a force to garrison them
as to make it questionable what is best now to be done. A statement of
those commenced or projected, of the expenses already incurred, and
estimates of their future cost, as far as can be foreseen, shall be laid
before you, that you may be enabled to judge whether any alteration is
necessary in the laws respecting this subject.

Agriculture, manufactures, commerce, and navigation, the four pillars of
our prosperity, are then most thriving when left most free to individual
enterprise. Protection from casual embarrassments, however, may
sometimes be seasonably interposed. If in the course of your
observations or inquiries they should appear to need any aid within the
limits of our constitutional powers, your sense of their importance is a
sufficient assurance they will occupy your attention. We can not,
indeed, but all feel an anxious solicitude for the difficulties under
which our carrying trade will soon be placed. How far it can be
relieved, otherwise than by time, is a subject of important
consideration.

The judiciary system of the United States, and especially that portion
of it recently erected, will of course present itself to the
contemplation of Congress, and, that they may be able to judge of the
proportion which the institution bears on the business it has to
perform, I have caused to be procured from the several States and now
lay before Congress an exact statement of all the causes decided since
the first establishment of the courts, and of those which were depending
when additional courts and judges were brought in to their aid.

And while on the judiciary organization it will be worthy your
consideration whether the protection of the inestimable institution of
juries has been extended to all the cases involving the security of our
persons and property. Their impartial selection also being essential to
their value, we ought further to consider whether that is sufficiently
secured in those States where they are named by a marshal depending on
Executive will or designated by the court or by officers dependent on
them.

I can not omit recommending a revisal of the laws on the subject of
naturalization. Considering the ordinary chances of human life, a denial
of citizenship under a residence of 14 years is a denial to a great
proportion of those who ask it, and controls a policy pursued from their
first settlement by many of these States, and still believed of
consequence to their prosperity; and shall we refuse to the unhappy
fugitives from distress that hospitality which the savages of the
wilderness extended to our fathers arriving in this land? Shall
oppressed humanity find no asylum on this globe? The Constitution indeed
has wisely provided that for admission to certain offices of important
trust a residence shall be required sufficient to develop character and
design. But might not the general character and capabilities of a
citizen be safely communicated to everyone manifesting a bona fide
purpose of embarking his life and fortunes permanently with us, with
restrictions, perhaps, to guard against the fraudulent usurpation of our
flag, an abuse which brings so much embarrassment and loss on the
genuine citizen and so much danger to the nation of being involved in
war that no endeavor should be spared to detect and suppress it?

These, fellow citizens, are the matters respecting the state of the
nation which I have thought of importance to be submitted to your
consideration at this time. Some others of less moment or not yet ready
for communication will be the subject of separate messages. I am happy
in this opportunity of committing the arduous affairs of our Government
to the collected wisdom of the Union. Nothing shall be wanting on my
part to inform as far as in my power the legislative judgment, nor to
carry that judgment into faithful execution.

The prudence and temperance of your discussions will promote within your
own walls that conciliation which so much befriends rational conclusion,
and by its example will encourage among our constituents that progress
of opinion which is tending to unite them in object and in will. That
all should be satisfied with any one order of things is not to be
expected; but I indulge the pleasing persuasion that the great body of
our citizens will cordially concur in honest and disinterested efforts
which have for their object to preserve the General and State
Governments in their constitutional form and equilibrium; to maintain
peace abroad, and order and obedience to the laws at home; to establish
principles and practices of administration favorable to the security of
liberty and property, and to reduce expenses to what is necessary for
the useful purposes of Government.

***

State of the Union Address
Thomas Jefferson
December 15, 1802

To the Senate and House of Representatives:

When we assemble together, fellow citizens, to consider the state of our
beloved country, our just attentions are first drawn to those pleasing
circumstances which mark the goodness of that Being from whose favor
they flow and the large measure of thankfulness we owe for His bounty.
Another year has come around, and finds us still blessed with peace and
friendship abroad; law, order, and religion at home; good affection and
harmony with our Indian neighbors; our burthens lightened, yet our
income sufficient for the public wants, and the produce of the year
great beyond example. These, fellow citizens, are the circumstances
under which we meet, and we remark with special satisfaction those which
under the smiles of Providence result from the skill, industry, and
order of our citizens, managing their own affairs in their own way and
for their own use, unembarrassed by too much regulation, unoppressed by
fiscal exactions.

On the restoration of peace in Europe that portion of the general
carrying trade which had fallen to our share during the war was abridged
by the returning competition of the belligerent powers. This was to be
expected, and was just. But in addition we find in some parts of Europe
monopolizing discriminations, which in the form of duties tend
effectually to prohibit the carrying thither our own produce in our own
vessels. From existing amities and a spirit of justice it is hoped that
friendly discussion will produce a fair and adequate reciprocity. But
should false calculations of interest defeat our hope, it rests with the
Legislature to decide whether they will meet inequalities abroad with
countervailing inequalities at home, or provide for the evil in any
other way.

It is with satisfaction I lay before you an act of the British
Parliament anticipating this subject so far as to authorize a mutual
abolition of the duties and countervailing duties permitted under the
treaty of 1794. It shows on their part a spirit of justice and friendly
accommodation which it is our duty and our interest to cultivate with
all nations. Whether this would produce a due equality in the navigation
between the two countries is a subject for your consideration.

Another circumstance which claims attention as directly affecting the
very source of our navigation is the defect or the evasion of the law
providing for the return of sea men, and particularly of those belonging
to vessels sold abroad. Numbers of them, discharged in foreign ports,
have been thrown on the hands of our consuls, who, to rescue them from
the dangers into which their distresses might plunge them and save them
to their country, have found it necessary in some cases to return them
at the public charge.

The cession of the Spanish Province of Louisiana to France, which took
place in the course of the late war, will, if carried into effect, make
a change in the aspect of our foreign relations which will doubtless
have just weight in any deliberations of the Legislature connected with
that subject.

There was reason not long since to apprehend that the warfare in which
we were engaged with Tripoli might be taken up by some other of the
Barbary Powers. A reenforcement, therefore, was immediately ordered to
the vessels already there. Subsequent information, however, has removed
these apprehensions for the present. To secure our commerce in that sea
with the smallest force competent, we have supposed it best to watch
strictly the harbor of Tripoli. Still, however, the shallowness of their
coast and the want of smaller vessels on our part has permitted some
cruisers to escape unobserved, and to one of these an American vessel
unfortunately fell prey. The captain, one American sea man, and two
others of color remain prisoners with them unless exchanged under an
agreement formerly made with the Bashaw, to whom, on the faith of that,
some of his captive subjects had been restored.

The convention with the State of Georgia has been ratified by their
legislature, and a repurchase from the Creeks has been consequently made
of a part of the Talasscee country. In this purchase has been also
comprehended a part of the lands within the fork of Oconee and Oakmulgee
rivers. The particulars of the contract will be laid before Congress so
soon as they shall be in a state for communication.

In order to remove every ground of difference possible with our Indian
neighbors, I have proceeded in the work of settling with them and
marking the boundaries between us. That with the Choctaw Nation is fixed
in one part and will be through the whole within a short time. The
country to which their title had been extinguished before the Revolution
is sufficient to receive a very respectable population, which Congress
will probably see the expediency of encouraging so soon as the limits
shall be declared. We are to view this position as an outpost of the
United States, surrounded by strong neighbors and distant from its
support; and how far that monopoly which prevents population should here
be guarded against and actual habitation made a condition of the
continuance of title will be for your consideration. A prompt
settlement, too, of all existing rights and claims within this territory
presents itself as a preliminary operation.

In that part of the Indiana Territory which includes Vincennes the lines
settled with the neighboring tribes fix the extinction of their title at
a breadth of 24 leagues from east to west and about the same length
parallel with and including the Wabash. They have also ceded a tract of
4 miles square, including the salt springs near the mouth of that river.

In the Department of Finance it is with pleasure I inform you, that the
receipts of external duties for the last 12 months have exceeded those
of any former year, and that the ration of increase has been also
greater than usual. This has enabled us to answer all the regular
exigencies of Government, to pay from the Treasury within one year
upward of $8 millions, principal and interest, of the public debt,
exclusive of upward of $1 million paid by the sale of bank stock, and
making in the whole a reduction of nearly $5.5 millions of principal,
and to have now in the Treasury $4.5 millions which are in a course of
application to the further discharge of debt and current demands.
Experience, too, so far, authorizes us to believe, if no extraordinary
event supervenes, and the expenses which will be actually incurred shall
not be greater than were contemplated by Congress at their last session,
that we shall not be disappointed in the expectations then formed. But
nevertheless, as the effect of peace on the amount of duties is not yet
fully ascertained, it is the more necessary to practice every useful
economy and to incur no expense which may be avoided without prejudice.

The collection of the internal taxes having been completed in some of
the States, the officers employed in it are of course out of commission.
In others they will be so shortly. But in a few, where the arrangements
for the direct tax had been retarded, it will be some time before the
system is closed. It has not yet been thought necessary to employ the
agent authorized by an act of the last session for transacting business
in Europe relative to debts and loans. Nor have we used the power
confided by the same act of prolonging the foreign debt by reloans, and
of redeeming instead thereof an equal sum of the domestic debt. Should,
however, the difficulties of remittance on so large a scale render it
necessary at any time, the power shall be executed and the money thus
employed abroad shall, in conformity with that law, be faithfully
applied here in an equivalent extinction of domestic debt.

When effects so salutary result from the plans you have already
sanctioned; when merely by avoiding false objects of expense we are
able, without a direct tax, without internal taxes, and without
borrowing to make large and effectual payments toward the discharge of
our public debt and the emancipation of our posterity from that mortal
canker, it is an encouragement, fellow citizens, of the highest order to
proceed as we have begun in substituting economy for taxation, and in
pursuing what is useful for a nation placed as we are, rather than what
is practiced by others under different circumstances. And when so ever
we are destined to meet events which shall call forth all the energies
of our country-men, we have the firmest reliance on those energies and
the comfort of leaving for calls like these the extraordinary resources
of loans and internal taxes. In the mean time, by payments of the
principal of our debt, we are liberating annually portions of the
external taxes and forming from them a growing fund still further to
lessen the necessity of recurring to extraordinary resources.

The usual account of receipts and expenditures for the last year, with
an estimate of the expenses of the ensuing one, will be laid before you
by the Secretary of the Treasury.

No change being deemed necessary in our military establishment, an
estimate of its expenses for the ensuing year on its present footing, as
also of the sums to be employed in fortifications and other objects
within that department, has been prepared by the Secretary of War, and
will make a part of the general estimates which will be presented you.

Considering that our regular troops are employed for local purposes, and
that the militia is our general reliance for great and sudden
emergencies, you will doubtless think this institution worthy of a
review, and give it those improvements of which you find it susceptible.

Estimates for the Naval Department, prepared by the Secretary of the
Navy, for another year will in like manner be communicated with the
general estimates. A small force in the Mediterranean will still be
necessary to restrain the Tripoline cruisers, and the uncertain tenure
of peace with some other of the Barbary Powers may eventually require
that force to be augmented. The necessity of procuring some smaller
vessels for that service will raise the estimate, but the difference in
their maintenance will soon make it a measure of economy.

Presuming it will be deemed expedient to expend annually a convenient
sum toward providing the naval defense which our situation may require,
I can not but recommend that the first appropriations for that purpose
may go to the saving what we already possess. No cares, no attentions,
can preserve vessels from rapid decay which lie in water and exposed to
the sun. These decays require great and constant repairs, and will
consume, if continued, a great portion of the moneys destined to naval
purposes. To avoid this waste of our resources it is proposed to add to
our navy-yard here a dock within which our present vessels may be laid
up dry and under cover from the sun. Under these circumstances
experience proves that works of wood will remain scarcely at all
affected by time. The great abundance of running water which this
situation possesses, at heights far above the level of the tide, if
employed as is practiced for lock navigation, furnishes the means for
raising and laying up our vessels on a dry and sheltered bed. And should
the measure be found useful here, similar depositories for laying up as
well as for building and repairing vessels may hereafter be undertaken
at other navy-yards offering the same means. The plans and estimates of
the work, prepared by a person of skill and experience, will be
presented to you without delay, and from this it will be seen that
scarcely more than has been the cost of one vessel is necessary to save
the whole, and that the annual sum to be employed toward its completion
may be adapted to the views of the Legislature as to naval expenditure.
To cultivate peace and maintain commerce and navigation in all their
lawful enterprises; to foster our fisheries as nurseries of navigation
and for the nurture of man, and protect the manufactures adapted to our
circumstances; to preserve the faith of the nation by an exact discharge
of its debts and contracts, expend the public money with the same care
and economy we would practice with our own, and impose on our citizens
no unnecessary burthens; to keep in all things within the pale of our
constitutional powers, and cherish the federal union as the only rock of
safety--these, fellow citizens, are the land-marks by which we are to
guide ourselves in all proceedings. By continuing to make these the rule
of our action we shall endear to our country-men the true principles of
their Constitution and promote an union of sentiment and of action
equally auspicious to their happiness and safety. On my part, you may
count on a cordial concurrence in every measure for the public good and
on all the information I possess which may enable you to discharge to
advantage the high functions with which you are invested by your
country.

TH. JEFFERSON

***

State of the Union Address
Thomas Jefferson
October 17, 1803

To The Senate and House of Representatives of the United States:

In calling you together, fellow citizens, at an earlier day than was
contemplated by the act of the last session of Congress, I have not been
insensible to the personal inconveniences necessarily resulting from an
unexpected change in your arrangements, but matters of great public
concernment have rendered this call necessary, and the interests you
feel in these will supersede in your minds all private considerations.

Congress witnessed at their late session the extraordinary agitation
produced in the public mind by the suspension of our right of deposit at
the port of New Orleans, no assignment of another place having been made
according to treaty. They were sensible that the continuance of that
privation would be more injurious to our nation than any consequences
which could flow from any mode of redress, but reposing just confidence
in the good faith of the Government whose officer had committed the
wrong, friendly and reasonable representations were resorted to, and the
right of deposit was restored.

Previous, however, to this period we had not been unaware of the danger
to which our peace would be perpetually exposed whilst so important a
key to the commerce of the Western country remained under foreign power.
Difficulties, too, were presenting themselves as to the navigation of
other streams which, arising within our territories, pass through those
adjacent. Propositions had therefore been authorized for obtaining on
fair conditions the sovereignty of New Orleans and of other possessions
in that quarter interesting to our quiet to such extent as was deemed
practicable, and the provisional appropriation of $2 millions to be
applied and accounted for by the President of the United States,
intended as part of the price, was considered as conveying the sanction
of Congress to the acquisition proposed. The enlightened Government of
France saw with just discernment the importance to both nations of such
liberal arrangements as might best and permanently promote the peace,
friendship, and interests of both, and the property and sovereignty of
all Louisiana which had been restored to them have on certain conditions
been transferred to the United States by instruments bearing date the
30th of April last. When these shall have received the constitutional
sanction of the Senate, they will without delay be communicated to the
Representatives also for the exercise of their functions as to those
conditions which are within the powers vested by the Constitution in
Congress.

Whilst the property and sovereignty of the Mississippi and its waters
secure an independent outlet for the produce of the Western States and
an uncontrolled navigation through their whole course, free from
collision with other powers and the dangers to our peace from that
source, the fertility of the country, its climate and extent, promise in
due season important aids to our Treasury, an ample provision for our
posterity, and a wide spread for the blessings of freedom and equal
laws.

With the wisdom of Congress it will rest to take those ulterior measures
which may be necessary for the immediate occupation and temporary
government of the country; for its incorporation into our Union; for
rendering the change of government a blessing to our newly adopted
brethren; for securing to them the rights of conscience and of property;
for confirming to the Indian inhabitants their occupancy and
self-government, establishing friendly and commercial relations with
them, and for ascertaining the geography of the country acquired. Such
materials, for your information, relative to its affairs in general as
the short space of time has permitted me to collect will be laid before
you when the subject shall be in a state for your consideration.

Another important acquisition of territory has also been made since the
last session of Congress. The friendly tribe of Kaskaskia Indians, with
which we have never had a difference, reduced by the wars and wants of
savage life to a few individuals unable to defend themselves against the
neighboring tribes, has transferred its country to the United States,
reserving only for its members what is sufficient to maintain them in an
agricultural way. The considerations stipulated are that we shall extend
to them our patronage and protection and give them certain annual aids
in money, in implements of agriculture, and other articles of their
choice. This country, among the most fertile within our limits,
extending along the Mississippi from the mouth of the Illinois to and up
to the Ohio, though not so necessary as a barrier since the acquisition
of the other bank, may yet be well worthy of being laid open to
immediate settlement, as its inhabitants may descend with rapidity in
support of the lower country should future circumstances expose that to
foreign enterprise. As the stipulations in this treaty involve matters
with the competence of both Houses only, it will be laid before Congress
as soon as the Senate shall have advised its ratification.

With many of the other Indian tribes improvements in agriculture and
household manufacture are advancing, and with all our peace and
friendship are established on grounds much firmer than heretofore. The
measure adopted of establishing trading houses among them and of
furnishing them necessaries in exchange for their commodities at such
moderate prices as leave no gain, but cover us from loss, has the most
conciliatory and useful effect on them, and is that which will best
secure their peace and good will.

The small vessels authorized by Congress with a view to the
Mediterranean service have been sent into that sea, and will be able
more effectually to confine the Tripoline cruisers within their harbors
and supersede the necessity of convoy to our commerce in that quarter.
They will sensibly lessen the expenses of that service the ensuing year.

A further knowledge of the ground in the northeastern and northwestern
angles of the United States has evinced that the boundaries established
by the treaty of Paris between the British territories and ours in those
parts were too imperfectly described to be susceptible of execution. It
has therefore been thought worthy of attention for preserving and
cherishing the harmony and useful intercourse subsisting between the two
nations to remove by timely arrangements what unfavorable incidents
might otherwise render a ground of future misunderstanding. A convention
has therefore been entered into which provides for a practicable
demarcation of those limits to the satisfaction of both parties.

An account of the receipts and expenditures of the year ending the 30th
of September last, with the estimates for the service of the ensuing
year, will be laid before you by the Secretary of the Treasury so soon
as the receipts of the last quarter shall be returned from the more
distant States. It is already ascertained that the amount paid into the
Treasury for that year has been between $11 millions and $12 millions,
and that the revenue accrued during the same term exceeds the sum
counted on as sufficient for our current expenses and to extinguish the
public debt within the period heretofore proposed.

The amount of debt paid for the same year is about $3.1 millions
exclusive of interest, and making, with the payment of the preceding
year, a discharge of more than $8.5 millions of the principal of that
debt, besides the accruing interest; and there remain in the Treasury
nearly $6 millions. Of these, $880 thousands have been reserved for
payment of the first installment due under the British convention of
January 8th, 1802, and $2 millions are what have been before mentioned
as placed by Congress under the power and accountability of the
President toward the price of New Orleans and other territories
acquired, which, remaining untouched, are still applicable to that
object and go in diminution of the sum to be funded for it.

Should the acquisition of Louisiana be constitutionally confirmed and
carried into effect, a sum of nearly $13 millions will then be added to
our public debt, most of which is payable after fifteen years, before
which term the present existing debts will all be discharged by the
established operation of the sinking fund. When we contemplate the
ordinary annual augmentation of impost from increasing population and
wealth, the augmentation of the same revenue by its extension to the new
acquisition, and the economies which may still be introduced into our
public expenditures, I can not but hope that Congress in reviewing their
resources will find means to meet the intermediate interest of this
additional debt without recurring to new taxes, and applying to this
object only the ordinary progression of our revenue. Its extraordinary
increase in times of foreign war will be the proper and sufficient fund
for any measures of safety or precaution which that state of things may
render necessary in our neutral position.

Remittances for the installments of our foreign debt having been found
practicable without loss, it has not been thought expedient to use the
power given by a former act of Congress of continuing them by reloans,
and of redeeming instead thereof equal sums of domestic debt, although
no difficulty was found in obtaining that accommodation.

The sum of $50 thousands appropriated by Congress for providing gun
boats remains unexpended. The favorable and peaceable turn of affairs on
the Mississippi rendered an immediate execution of that law unnecessary,
and time was desirable in order that the institution of that branch of
our force might begin on models the most approved by experience. The
same issue of events dispensed with a resort to the appropriation of
$1.5 millions, contemplated for purposes which were effected by happier
means.

We have seen with sincere concern the flames of war lighted up again in
Europe, and nations with which we have the most friendly and useful
relations engaged in mutual destruction. While we regret the miseries in
which we see others involved, let us bow with gratitude to that kind
Providence which, inspiring with wisdom and moderation our late
legislative councils while placed under the urgency of the greatest
wrongs guarded us from hastily entering into the sanguinary contest and
left us only to look on and pity its ravages.

These will be heaviest on those immediately engaged. Yet the nations
pursuing peace will not be exempt from all evil.

In the course of this conflict let it be our endeavor, as it is our
interest and desire, to cultivate the friendship of the belligerent
nations by every act of justice and of innocent kindness; to receive
their armed vessels with hospitality from the distresses of the sea, but
to administer the means of annoyance to none; to establish in our
harbors such a police as may maintain law and order; to restrain our
citizens from embarking individually in a war in which their country
takes no part; to punish severely those persons, citizens or alien, who
shall usurp the cover of our flag for vessels not entitled to it,
infecting thereby with suspicion those of real Americans and committing
us into controversies for the redress of wrongs not our own; to exact
from every nation the observance toward our vessels and citizens of
those principles and practices which all civilized people acknowledge;
to merit the character of a just nation, and maintain that of an
independent one, preferring every consequence to insult and habitual
wrong. Congress will consider whether the existing laws enable us
efficaciously to maintain this course with our citizens in all places
and with others while within the limits of our jurisdiction, and will
give them the new modifications necessary for these objects. Some
contraventions of right have already taken place, both within our
jurisdictional limits and on the high seas. The friendly disposition of
the Governments from whose agents they have proceeded, as well as their
wisdom and regard for justice, leave us in reasonable expectation that
they will be rectified and prevented in future, and that no act will be
countenanced by them which threatens to disturb our friendly
intercourse.

Separated by a wide ocean from the nations of Europe and from the
political interests which entangle them together, with productions and
wants which render our commerce and friendship useful to them and theirs
to us, it can not be the interest of any to assail us, nor ours to
disturb them. We should be most unwise, indeed, were we to cast away the
singular blessings of the position in which nature has placed us, the
opportunity she has endowed us with of pursuing, at a distance from
foreign contentions, the paths of industry, peace, and happiness, of
cultivating general friendship, and of bringing collisions of interest
to the umpirage of reason rather than of force.

How desirable, then, must it be in a Government like ours to see its
citizens adopt individually the views, the interests, and the conduct
which their country should pursue, divesting themselves of those
passions and partialities which tend to lessen useful friendships and to
embarrass and embroil us in the calamitous scenes of Europe. Confident,
fellow citizens, that you will duly estimate the importance of neutral
dispositions toward the observance of neutral conduct, that you will be
sensible how much it is our duty to look on the bloody arena spread
before us with commiseration indeed, but with no other wish than to see
it closed, I am persuaded you will cordially cherish these dispositions
in all discussions among yourselves and in all communications with your
constituents; and I anticipate with satisfaction the measures of wisdom
which the great interests now committed to you will give you an
opportunity of providing, and myself that of approving and carrying into
execution with the fidelity I owe to my country.

TH. JEFFERSON

***

State of the Union Address
Thomas Jefferson
November 8, 1804

The Senate and House of Representatives of the United States:

To a people, fellow citizens, who sincerely desire the happiness and
prosperity of other nations; to those who justly calculate that their
own well-being is advanced by that of the nations with which they have
intercourse, it will be a satisfaction to observe that the war which was
lighted up in Europe a little before our last meeting has not yet
extended its flames to other nations, nor been marked by the calamities
which sometimes stain the foot-steps of war. The irregularities, too, on
the ocean, which generally harass the commerce of neutral nations, have,
in distant parts, disturbed ours less than on former occasions; but in
the American seas they have been greater from peculiar causes, and even
within our harbors and jurisdiction infringements on the authority of
the laws have been committed which have called for serious attention.
The friendly conduct of the Governments from whose officers and subjects
these acts have proceeded, in other respects and in places more under
their observation and control, gives us confidence that our
representations on this subject will have been properly regarded.

While noticing the irregularities committed on the ocean by others,
those on our own part should not be omitted nor left unprovided for.
Complaints have been received that persons residing within the United
States have taken on themselves to arm merchant vessels and to force a
commerce into certain ports and countries in defiance of the laws of
those countries. That individuals should undertake to wage private war,
independently of the authority of their country, can not be permitted in
a well-ordered society. Its tendency to produce aggression on the laws
and rights of other nations and to endanger the peace of our own is so
obvious that I doubt not you will adopt measures for restraining it
effectually in future.

Soon after the passage of the act of the last session authorizing the
establishment of a district and port of entry on the waters of the
Mobile we learnt that its object was misunderstood on the part of Spain.
Candid explanations were immediately given and assurances that,
reserving our claims in that quarter as a subject of discussion and
arrangement with Spain, no act was meditated in the mean time
inconsistent with the peace and friendship existing between the two
nations, and that conformably to these intentions would be the execution
of the law. That Government had, however, thought proper to suspend the
ratification of the convention of 1802; but the explanations which would
reach them soon after, and still more the confirmation of them by the
tenor of the instrument establishing the port and district, may
reasonably be expected to replace them in the dispositions and views of
the whole subject which originally dictated the convention.

I have the satisfaction to inform you that the objections which had been
urged by that Government against the validity of our title to the
country of Louisiana have been withdrawn, its exact limits, however,
remaining still to be settled between us; and to this is to be added
that, having prepared and delivered the stock created in execution of
the convention of Paris of April 30th, 1803, in consideration of the
cession of that country, we have received from the Government of France
an acknowledgment, in due form, of the fulfillment of that stipulation.

With the nations of Europe in general our friendship and intercourse are
undisturbed, and from the Governments of the belligerent powers
especially we continue to receive those friendly manifestations which
are justly due to an honest neutrality and to such good offices
consistent with that as we have opportunities of rendering.

The activity and success of the small force employed in the
Mediterranean in the early part of the present year, the reenforcements
sent into that sea, and the energy of the officers having command in the
several vessels will, I trust, by the sufferings of war, reduce the
barbarians of Tripoli to the desire of peace on proper terms. Great
injury, however, ensues to ourselves, as well as to others interested,
from the distance to which prizes must be brought for adjudication and
from the impracticability of bringing hither such as are not sea worthy.

The Bey of Tunis having made requisitions unauthorized by our treaty,
their rejection has produced from him some expressions of discontent,
but to those who expect us to calculate whether a compliance with unjust
demands will not cost us less than a war we must leave as a question of
calculation for them also whether to retire from unjust demands will not
cost them less than a war. We can do to each other very sensible
injuries by war, but the mutual advantages of peace make that the best
interest of both.

Peace and intercourse with the other powers on the same coast continue
on the footing on which they are established by treaty.

In pursuance of the act providing for the temporary government of
Louisiana, the necessary officers for the Territory of Orleans were
appointed in due time to commence the exercise of their functions on the
first day of October. The distance, however, of some of them and
indispensable previous arrangements may have retarded its commencement
in some of its parts. The form of government thus provided having been
considered but as temporary, and open to such future improvements as
further information of the circumstances of our brethren there might
suggest, it will of course be subject to your consideration.

In the district of Louisiana it has been thought best to adopt the
division into subordinate districts which had been established under its
former government. These being five in number, a commanding officer has
been appointed to each, according to the provisions of the law, and so
soon as they can be at their stations that district will also be in its
due state of organization. In the mean time, their places are supplied
by the officers before commanding there, and the function of the
governor and judges of Indiana having commenced, the government, we
presume, is proceeding in its new form. The lead mines in that district
offer so rich a supply of that metal as to merit attention. The report
now communicated will inform you of their state and of the necessity of
immediate inquiry into their occupation and titles.

With the Indian tribes established within our newly acquired limits, I
have deemed it necessary to open conferences for the purpose of
establishing a good understanding and neighborly relations between us.
So far as we have yet learned, we have reason to believe that their
dispositions are generally favorable and friendly; and with these
dispositions on their part, we have in our own hands means which can not
fail us for preserving their peace and friendship. By pursuing an
uniform course of justice toward them, by aiding them in all the
improvements which may better their condition, and especially by
establishing a commerce on terms which shall be advantageous to them and
only not losing to us, and so regulated as that no incendiaries of our
own or any other nation may be permitted to disturb the natural effects
of our just and friendly offices, we may render ourselves so necessary
to their comfort and prosperity that the protection of our citizens from
their disorderly members will become their interest and their voluntary
care. Instead, therefore, of an augmentation of military force
proportioned to our extension of frontier, I propose a moderate
enlargement of the capital employed in that commerce as a more
effectual, economical, and humane instrument for preserving peace and
good neighborhood with them.

On this side of the Mississippi an important relinquishment of native
title has been received from the Delawares. That tribe, desiring to
extinguish in their people the spirit of hunting and to convert
superfluous lands into the means of improving what they retain, has
ceded to us all the country between the Wabash and Ohio south of and
including the road from the rapids toward Vincennes, for which they are
to receive annuities in animals and implements for agriculture and in
other necessaries. This acquisition is important, not only for its
extent and fertility, but as fronting three hundred miles on the Ohio,
and near half that on the Wabash. The produce of the settled country
descending those rivers will no longer pass in review of the Indian
frontier but in a small portion, and, with the cession heretofore made
by the Kaskaskias, nearly consolidates our possessions north of the
Ohio, in a very respectable breadth--from Lake Erie to the Mississippi.
The Piankeshaws having some claim to the country ceded by the Delawares,
it has been thought best to quiet that by fair purchase also. So soon as
the treaties on this subject shall have received their constitutional
sanctions they shall be laid before both houses.

The act of Congress of February 28th, 1803, for building and employing a
number of gun boats, is now in a course of execution to the extent there
provided for. The obstacle to naval enterprise which vessels of this
construction offer for our sea port towns, their utility toward
supporting within our waters the authority of the laws, the promptness
with which they will be manned by the sea men and militia of the place
in the moment they are wanting, the facility of their assembling from
different parts of the coast to any point where they are required in
greater force than ordinary, the economy of their maintenance and
preservation from decay when not in actual service, and the competence
of our finances to this defensive provision without any new burthen are
considerations which will have due weight with Congress in deciding on
the expediency of adding to their number from year to year, as
experience shall test their utility, until all our important harbors, by
these and auxiliary means, shall be secured against insult and
opposition to the laws.

No circumstance has arisen since your last session which calls for any
augmentation of our regular military force. Should any improvement occur
in the militia system, that will be always seasonable.

Accounts of the receipts and expenditures of the last year, with
estimates for the ensuing one, will as usual be laid before you.

The state of our finances continues to fulfill our expectations. $11.5
millions, received in the course of the year ending the 30th of
September last, have enabled us, after meeting all the ordinary expenses
of the year, to pay upward of $3.6 millions of the public debt,
exclusive of interest. This payment, with those of the two preceding
years, has extinguished upward of $12 millions of the principal and a
greater sum of interest within that period, and by a proportionate
diminution of interest renders already sensible the effect of the
growing sum yearly applicable to the discharge of the principal.

It is also ascertained that the revenue accrued during the last year
exceeds that of the preceding, and the probable receipts of the ensuing
year may safely be relied on as sufficient, with the sum already in the
Treasury, to meet all the current demands of the year, to discharge
upward of $3.5 millions of the engagements incurred under the British
and French conventions, and to advance in the further redemption of the
funded debt as rapidly as had been contemplated.

These, fellow citizens, are the principal matters which I have thought
it necessary at this time to communicate for your consideration and
attention. Some others will be laid before you in the course of the
session; but in the discharge of the great duties confided to you by our
country you will take a broader view of the field of legislation.

Whether the great interests of agriculture, manufactures, commerce, or
navigation can within the pale of your constitutional powers be aided in
any of their relations; whether laws are provided in all cases where
they are wanting; whether those provided are exactly what they should
be; whether any abuses take place in their administration, or in that of
the public revenues; whether the organization of the public agents or of
the public force is perfect in all its parts; in fine, whether anything
can be done to advance the general good, are questions within the limits
of your functions which will necessarily occupy your attention. In these
and all other matters which you in your wisdom may propose for the good
of our country, you may count with assurance on my hearty cooperation
and faithful execution.

TH. JEFFERSON

***

State of the Union Address
Thomas Jefferson
December 3, 1805

The Senate and House of Representatives of the United States:

At a moment when the nations of Europe are in commotion and arming
against each other, and when those with whom we have principal
intercourse are engaged in the general contest, and when the countenance
of some of them toward our peaceable country threatens that even that
may not be unaffected by what is passing on the general theater, a
meeting of the representatives of the nation in both Houses of Congress
has become more than usually desirable. Coming from every section of our
country, they bring with them the sentiments and the information of the
whole, and will be enabled to give a direction to the public affairs
which the will and the wisdom of the whole will approve and support.

In taking a view of the state of our country we in the first place
notice the late affliction of two of our cities under the fatal fever
which in latter times has occasionally visited our shores. Providence in
His goodness gave it an early termination on this occasion and lessened
the number of victims which have usually fallen before it. In the course
of the several visitations by this disease it has appeared that it is
strictly local, incident to cities and on the tide waters only,
incommunicable in the country either by persons under the disease or by
goods carried from diseased places; that its access is with the autumn
and it disappears with the early frosts.

These restrictions within narrow limits of time and space give security
even to our maritime cities during three quarter of the year, and to the
country always. Although from these facts it appears unnecessary, yet to
satisfy the fears of foreign nations and cautions on their part not to
be complained of in a danger whose limits are yet unknown to them I have
strictly enjoined on the officers at the head of the customs to certify
with exact truth for every vessel sailing for a foreign port the state
of health respecting this fever which prevails at the place from which
she sails. Under every motive from character and duty to certify the
truth, I have no doubt they have faithfully executed this injunction.
Much real injury has, however, been sustained from a propensity to
identify with this endemic and to call by the same name fevers of very
different kinds, which have been known at all times and in all
countries, and never have been placed among those deemed contagious.

As we advance in our knowledge of this disease, as facts develop the
source from which individuals receive it, the State authorities charged
with the care of the public health, and Congress with that of the
general commerce, will become able to regulate with effect their
respective functions in these departments. The burthen of quarantines is
felt at home as well as abroad; their efficacy merits examination.
Although the health laws of the States should be found to need no
present revisal by Congress, yet commerce claims that their attention be
ever awake to them.

Since our last meeting the aspect of our foreign relations has
considerably changed. Our coasts have been infested and our harbors
watched by private armed vessels, some of them without commissions, some
with illegal commissions, others with those of legal form, but
committing practical acts beyond the authority of their commissions.
They have captured in the very entrance of our harbors, as well as on
the high seas, not only the vessels of our friends coming to trade with
us, but our own also. They have carried them off under pretense of legal
adjudication, but not daring to approach a court of justice, they have
plundered and sunk them by the way or in obscure places where no
evidence could arise against them, maltreated the crews, and abandoned
them in boats in the open sea or on desert shores without food or
clothing. These enormities appearing to be unreached by any control of
their sovereigns, I found it necessary to equip a force to cruise within
our own seas, to arrest all vessels of these descriptions found hovering
on our coasts within the limits of the Gulf Stream and to bring the
offenders in for trial as pirates.

The same system of hovering on our coasts and harbors under color of
seeking enemies has been also carried on by public armed ships to the
great annoyance and oppression of our commerce. New principles, too,
have been interpolated into the law of nations, founded neither in
justice nor in the usage or acknowledgment of nations. According to
these a belligerent takes to itself a commerce with its own enemy which
it denies to a neutral on the ground of its aiding that enemy in the
war; but reason revolts at such inconsistency, and the neutral having
equal right with the belligerent to decide the question, the interests
of our constituents and the duty of maintaining the authority of reason,
the only umpire between just nations, impose on us the obligation of
providing an effectual and determined opposition to a doctrine so
injurious to the rights of peaceable nations. Indeed, the confidence we
ought to have in the justice of others still countenances the hope that
a sounder view of those rights will of itself induce from every
belligerent a more correct observance of them.

With Spain our negotiations for a settlement of differences have not had
a satisfactory issue. Spoliations during a former war, for which she had
acknowledged herself responsible, have been refused to be compensated
but on conditions affecting other claims in no wise connected with them.
Yet the same practices are renewed in the present war and are already of
great amount. On the Mobile, our commerce passing through that river
continues to be obstructed by arbitrary duties and vexatious searches.
Propositions for adjusting amicably the boundaries of Louisiana have not
been acceded to. While, however, the right is unsettled, we have avoided
changing the state of things by taking new posts or strengthening
ourselves in the disputed territories, in the hope that the other power
would not by a contrary conduct oblige us to meet their example and
endanger conflicts of authority, the issue of which may not be easily
controlled. But in this hope we have now reason to lessen our
confidence.

Inroads have been recently made into the Territories of Orleans and the
Mississippi, our citizens have been seized and their property plundered
in the very parts of the former which had been actually delivered up by
Spain, and this by the regular officers and soldiers of that Government.
I have therefore found it necessary at length to give orders to our
troops on that frontier to be in readiness to protect our citizens, and
to repel by arms any similar aggressions in future. Other details
necessary for your full information of the state of things between this
country and that shall be the subject of another communication.

In reviewing these injuries from some of the belligerent powers the
moderation, the firmness, and the wisdom of the Legislature will be
called into action. We ought still to hope that time and a more correct
estimate of interest as well as of character will produce the justice we
are bound to expect, but should any nation deceive itself by false
calculations, and disappoint that expectation, we must join in the
unprofitable contest of trying which party can do the other the most
harm.

Some of these injuries may perhaps admit a peaceable remedy. Where that
is competent it is always the most desirable. But some of them are of a
nature to be met by force only, and all of them may lead to it. I can
not, therefore, but recommend such preparations as circumstances call
for.

The first object is to place our sea port towns out of the danger of
insult. Measures have been already taken for furnishing them with heavy
cannon for the service of such land batteries as may make a part of
their defense against armed vessels approaching them. In aid of these it
is desirable we should have a competent number of gun boats, and the
number, to be competent, must be considerable. If immediately begun,
they may be in readiness for service at the opening of the next season.

Whether it will be necessary to augment our land forces will be decided
by occurrences probably in the course of your session. In the mean time
you will consider whether it would not be expedient for a state of peace
as well as of war so to organize or class the militia as would enable us
on any sudden emergency to call for the services of the younger
portions, unencumbered with the old and those having families. Upward of
three hundred thousand able-bodied men between the ages of 18 and 26
years, which the last census shews we may now count within our limits,
will furnish a competent number for offense or defense in any point
where they may be wanted, and will give time for raising regular forces
after the necessity of them shall become certain; and the reducing to
the early period of life all its active service can not but be desirable
to our younger citizens of the present as well as future times, in as
much as it engages to them in more advanced age a quiet and undisturbed
repose in the bosom of their families. I can not, then, but earnestly
recommend to your early consideration the expediency of so modifying our
militia system as, by a separation of the more active part from that
which is less so, we may draw from it when necessary an efficient corps
fit for real and active service, and to be called to it in regular
rotation.

Considerable provision has been made under former authorities from
Congress of material for the construction of ships of war of 74 guns.
These materials are on hand subject to the further will of the
Legislature.

An immediate prohibition of the exportation of arms and ammunition is
also submitted to your determination.

Turning from these unpleasant views of violence and wrong, I
congratulate you on the liberation of our fellow citizens who were
stranded on the coast of Tripoli and made prisoners of war. In a
government bottomed on the will of all the life and liberty of every
individual citizen become interesting to all.

In the treaty, therefore, which has concluded our warfare with that
State an article for the ransom of our citizens has been agreed to. An
operation by land by a small band of our country-men and others, engaged
for the occasion in conjunction with the troops of the ex-Bashaw of that
country, gallantly conducted by our late consul, Eaton, and their
successful enterprise on the city of Derne, contributed doubtless to the
impression which produced peace, and the conclusion of this prevented
opportunities of which the officers and men of our squadron destined for
Tripoli would have availed themselves to emulate the acts of valor
exhibited by their brethren in the attack of the last year. Reflecting
with high satisfaction on the distinguished bravery displayed whenever
occasions permitted it in the late Mediterranean service, I think it
would be an useful encouragement as well as a just reward to make an
opening for some present promotion by enlarging our peace establishment
of captains and lieutenants.

With Tunis some misunderstandings have arisen not yet sufficiently
explained, but friendly discussions with their ambassador recently
arrived and a mutual disposition to do whatever is just and reasonable
can not fail of dissipating these, so that we may consider our peace on
that coast, generally, to be on as sound a footing as it has been at any
preceding time. Still, it will not be expedient to withdraw immediately
the whole of our force from that sea.

The law providing for a naval peace establishment fixes the number of
frigates which shall be kept in constant service in time of peace, and
prescribes that they shall be manned by not more than two-thirds of
their complement of sea men and ordinary sea men. Whether a frigate may
be trusted to two-thirds only of her proper complement of men must
depend on the nature of the service on which she is ordered; that may
sometimes, for her safety as well as to insure her object, require her
fullest complement. In adverting to this subject Congress will perhaps
consider whether the best limitation on the Executive discretion in this
case would not be by the number of sea men which may be employed in the
whole service rather than by the number of vessels. Occasions oftener
arise for the employment of small than of large vessels, and it would
lessen risk as well as expense to be authorized to employ them of
preference. The limitation suggested by the number of sea men would
admit a selection of vessels best adapted to the service.

Our Indian neighbors are advancing, many of them with spirit, and others
beginning to engage in the pursuits of agriculture and household
manufacture. They are becoming sensible that the earth yields
subsistence with less labor and more certainty than the forest, and find
it their interest from time to time to dispose of parts of their surplus
and waste lands for the means of improving those they occupy and of
subsisting their families while they are preparing their farms. Since
your last session the Northern tribes have sold to us the lands between
the Connecticut Reserve and the former Indian boundary and those on the
Ohio from the same boundary to the rapids and for a considerable depth
inland. The Chickasaws and Cherokees have sold us the country between
and adjacent to the two districts of Tennessee, and the Creeks the
residue of their lands in the fork of the Ocmulgee up to the
Ulcofauhatche. The three former purchases are important, in as much as
they consolidate disjoined parts of our settled country and render their
intercourse secure; and the second particularly so, as, with the small
point on the river which we expect is by this time ceded by the
Piankeshaws, it completes our possession of the whole of both banks of
the Ohio from its source to near its mouth, and the navigation of that
river is thereby rendered forever safe to our citizens settled and
settling on its extensive waters. The purchase from the Creeks, too, has
been for some time particularly interesting to the State of Georgia.

The several treaties which have been mentioned will be submitted to both
Houses of Congress for the exercise of their respective functions.

Deputations now on their way to the seat of Government from various
nations of Indians inhabiting the Missouri and other parts beyond the
Mississippi come charged with assurances of their satisfaction with the
new relations in which they are placed with us, of their dispositions to
cultivate our peace and friendship, and their desire to enter into
commercial intercourse with us. A state of our progress in exploring the
principal rivers of that country, and of the information respecting them
hitherto obtained, will be communicated as soon as we shall receive some
further relations which we have reason shortly to expect.

The receipts of the Treasury during the year ending on the 30th day of
September last have exceeded the sum of $13 millions, which, with not
quite $5 millions in the Treasury at the beginning of the year, have
enabled us after meeting other demands to pay nearly $2 millions of the
debt contracted under the British treaty and convention, upward of $4
millions of principal of the public debt, and $4 millions of interest.
These payments, with those which had been made in three years and a half
preceding, have extinguished of the funded debt nearly $18 millions of
principal. Congress by their act of November 10th, 1803, authorized us
to borrow $1.75 millions toward meeting the claims of our citizens
assumed by the convention with France. We have not, however, made use of
this authority, because the sum of $4.5 millions, which remained in the
Treasury on the same 30th day of September last, with the receipts of
which we may calculate on for the ensuing year, besides paying the
annual sum of $8 millions appropriated to the funded debt and meeting
all the current demands which may be expected, will enable us to pay the
whole sum of $3.75 millions assumed by the French convention and still
leave us a surplus of nearly $1 million at our free disposal. Should you
concur in the provisions of arms and armed vessels recommended by the
circumstances of the times, this surplus will furnish the means of doing
so.

On this first occasion of addressing Congress since, by the choice of my
constituents, I have entered on a second term of administration, I
embrace the opportunity to give this public assurance that I will exert
my best endeavors to administer faithfully the executive department, and
will zealously cooperate with you in every measure which may tend to
secure the liberty, property, and personal safety of our fellow
citizens, and to consolidate the republican forms and principles of our
Government.

In the course of your session you shall receive all the aid which I can
give for the dispatch of public business, and all the information
necessary for your deliberations, of which the interests of our own
country and the confidence reposed in us by others will admit a
communication.

TH. JEFFERSON

***

State of the Union Address
Thomas Jefferson
December 2, 1806

The Senate and House of Representatives of the United States:

It would have given me, fellow citizens, great satisfaction to announce
in the moment of your meeting that the difficulties in our foreign
relations existing at the time of your last separation had been amicably
and justly terminated. I lost no time in taking those measures which
were most likely to bring them to such a termination--by special
missions charged with such powers and instructions as in the event of
failure could leave no imputation on either our moderation or
forbearance. The delays which have since taken place in our negotiations
with the British Government appear to have proceeded from causes which
do not forbid the expectation that during the course of the session I
may be enabled to lay before you their final issue. What will be that of
the negotiations for settling our differences with Spain nothing which
had taken place at the date of the last dispatches enables us to
pronounce. On the western side of the Mississippi she advanced in
considerable force, and took post at the settlement of Bayou Pierre, on
the Red River. This village was originally settled by France, was held
by her as long as she held Louisiana, and was delivered to Spain only as
a part of Louisiana. Being small, insulated, and distant, it was not
observed at the moment of redelivery to France and the United States
that she continued a guard of half a dozen men which had been stationed
there. A proposition, however, having been lately made by our commander
in chief to assume the Sabine River as a temporary line of separation
between the troops of the two nations until the issue of our
negotiations shall be known, this has been referred by the Spanish
commandant to his superior, and in the mean time he has withdrawn his
force to the western side of the Sabine River. The correspondence on
this subject now communicated will exhibit more particularly the present
state of things in that quarter.

The nature of that country requires indispensably that an unusual
proportion of the force employed there should be cavalry or mounted
infantry. In order, therefore, that the commanding officer might be
enabled to act with effect, I had authorized him to call on the
governors of Orleans and Mississippi for a corps of five hundred
volunteer cavalry. The temporary arrangement he has proposed may perhaps
render this unnecessary; but I inform you with great pleasure of the
promptitude with which the inhabitants of those Territories have
tendered their services in defense of their country. It has done honor
to themselves, entitled them to the confidence of their fellow citizens
in every part of the Union, and must strengthen the general
determination to protect them efficaciously under all circumstances
which may occur.

Having received information that in another part of the United States a
great number of private individuals were combining together, arming and
organizing themselves contrary to law, to carry on a military expedition
against the territories of Spain, I thought it necessary, by
proclamation as well as by special orders, to take measures for
preventing and suppressing this enterprise, for seizing the vessels,
arms, and other means provided for it, and for arresting and bringing to
justice its authors and abettors. It was due to that good faith which
ought ever to be the rule of action in public as well as in private
transactions, it was due to good order and regular government, that
while the public force was acting strictly on defensive and merely to
protect our citizens from aggression the criminal attempts of private
individuals to decide for their country the question of peace or war by
commencing active and unauthorized hostilities should be promptly and
efficaciously suppressed.

Whether it will be necessary to enlarge our regular forces will depend
on the result of our negotiations with Spain; but as it is uncertain
when that result will be known, the provisional measures requisite for
that, and to meet any pressure intervening in that quarter, will be a
subject for your early consideration.

The possession of both banks of the Mississippi reducing to a single
point the defense of that river, its waters, and the country adjacent,
it becomes highly necessary to provide for that point a more adequate
security. Some position above its mouth, commanding the passage of the
river, should be rendered sufficiently strong to cover the armed vessels
which may be stationed there for defense, and in conjunction with them
to present an insuperable obstacle to any force attempting to pass. The
approaches to the city of New Orleans from the eastern quarter also will
require to be examined and more effectually guarded. For the internal
support of the country the encouragement of a strong settlement on the
western side of the Mississippi, within reach of New Orleans, will be
worthy the consideration of the Legislature.

The gun boats authorized by an act of the last session are so advanced
that they will be ready for service in the ensuing spring. Circumstances
permitted us to allow the time necessary for their more solid
construction. As a much larger number will still be wanting to place our
sea port towns and waters in that state of defense to which we are
competent and they entitled, a similar appropriation for a further
provision for them is recommended for the ensuing year.

A further appropriation will also be necessary for repairing
fortifications already established and the erection of such other works
as may have real effect in obstructing the approach of an enemy to our
sea port towns, or their remaining before them.

In a country whose constitution is derived from the will of the people,
directly expressed by their free suffrages; where the principal
executive functionaries and those of the legislature are renewed by them
at short periods; where under the character of jurors they exercise in
person the greatest portion of the judiciary powers; where the laws are
consequently so formed and administered as to bear with equal weight and
favor on all, restraining no man in the pursuits of honest industry and
securing to everyone the property which that acquires, it would not be
supposed that any safe-guards could be needed against insurrection or
enterprise on the public peace or authority. The laws, however, aware
that these should not be trusted to moral restraints only, have wisely
provided punishment for these crimes when committed. But would it not be
salutary to give also the means of preventing their commission? Where an
enterprise is meditated by private individuals against a foreign nation
in amity with the United States, powers of prevention to a certain
extent are given by the laws. Would they not be as reasonable and useful
where the enterprise preparing is against the United States? While
adverting to this branch of law it is proper to observe that in
enterprises meditated against foreign nations the ordinary process of
binding to the observance of the peace and good behavior, could it be
extended to acts to be done out of the jurisdiction of the United
States, would be effectual in some cases where the offender is able to
keep out of sight every indication of his purpose which could draw on
him the exercise of the powers now given by law.

The States on the coast of Barbary seem generally disposed at present to
respect our peace and friendship; with Tunis alone some uncertainty
remains. Persuaded that it is our interest to maintain our peace with
them on equal terms or not at all, I propose to send in due time a
reenforcement into the Mediterranean unless previous information shall
show it to be unnecessary.

We continue to receive proofs of the growing attachment of our Indian
neighbors and of their dispositions to place all their interests under
the patronage of the United States. These dispositions are inspired by
their confidence in our justice and in the sincere concern we feel for
their welfare; and as long as we discharge these high and honorable
functions with the integrity and good faith which alone can entitle us
to their continuance we may expect to reap the just reward in their
peace and friendship.

The expedition of Messrs. Lewis and Clarke for exploring the river
Missouri and the best communication from that to the Pacific Ocean has
had all the success which could have been expected. They have traced the
Missouri nearly to its source, descended the Columbia to the Pacific
Ocean, ascertained with accuracy the geography of that interesting
communication across our continent, learnt the character of the country,
of its commerce and inhabitants; and it is but justice to say that
Messrs. Lewis and Clarke and their brave companions have by this arduous
service deserved well of their country.

The attempt to explore the Red River, under the direction of Mr.
Freeman, though conducted with a zeal and prudence meriting entire
approbation, has not been equally successful. After proceeding up it
about six hundred miles, nearly as far as the French settlements had
extended while the country was in their possession, our geographers were
obliged to return without completing their work.

Very useful additions have also been made to our knowledge of the
Mississippi by Lieutenant Pike, who has ascended it to its source, and
whose journal and map, giving the details of his journey, will shortly
be ready for communication to both Houses of Congress. Those of Messrs.
Lewis, Clarke, and Freeman will require further time to be digested and
prepared. These important surveys, in addition to those before
possessed, furnish materials for commencing an accurate map of the
Mississippi and its western waters. Some principal rivers, however,
remain still to be explored, toward which the authorization of Congress
by moderate appropriations will be requisite.

I congratulate you, fellow citizens, on the approach of the period at
which you may interpose your authority constitutionally to withdraw the
citizens of the United States from all further participation in those
violations of human rights which have been so long continued on the
unoffending inhabitants of Africa, and which the morality, the
reputation, and the best of our country have long been eager to
proscribe. Although no law you may pass can take prohibitory effect
until the first day of the year 1808, yet the intervening period is not
too long to prevent by timely notice expeditions which can not be
completed before that day.

The receipts at the Treasury during the year ending on the 30th day of
September last have amounted to near $15 millions, which have enabled
us, after meeting the current demands, to pay $2.7 millions of the
American claims in part of the price of Louisiana; to pay of the funded
debt upward of $3 millions of principal and nearly $4 millions of
interest, and, in addition, to reimburse in the course of the present
month near $2 millions of 5.5% stock. These payments and reimbursements
of the funded debt, with those which had been made in the four years and
a half preceding, will at the close of the present year have
extinguished upward of $23 millions of principal.

The duties composing the Mediterranean fund will cease by law at the end
of the present session. Considering, however, that they are levied
chiefly on luxuries and that we have an impost on salt, a necessary of
life, the free use of which otherwise is so important, I recommend to
your consideration the suppression of the duties on salt and the
continuation of the Mediterranean fund instead thereof for a short time,
after which that also will become unnecessary for any purpose now within
contemplation.

When both of these branches of revenue shall in this way be relinquished
there will still ere long be an accumulation of moneys in the Treasury
beyond the installments of public debt which we are permitted by
contract to pay. They can not then, without a modification assented to
by the public creditors, be applied to the extinguishment of this debt
and the complete liberation of our revenues, the most desirable of all
objects. Nor, if our peace continues, will they be wanting for any other
existing purpose. The question therefore now comes forward, To what
other objects shall these surpluses be appropriated, and the whole
surplus of impost, after the entire discharge of the public debt, and
during those intervals when the purposes of war shall not call for them?
Shall we suppress the impost and give that advantage to foreign over
domestic manufactures? On a few articles of more general and necessary
use the suppression in due season will doubtless be right, but the great
mass of the articles on which impost is paid are foreign luxuries,
purchased by those only who are rich enough to afford themselves the use
of them.

Their patriotism would certainly prefer its continuance and application
to the great purposes of the public education, roads, rivers, canals,
and such other objects of public improvement as it may be thought proper
to add to the constitutional enumeration of Federal powers. By these
operations new channels of communications will be opened between the
States, the lines of separation will disappear, their interests will be
identified, and their union cemented by new and indissoluble ties.
Education is here placed among the articles of public care, not that it
would be proposed to take its ordinary branches out of the hands of
private enterprise, which manages so much better all the concerns to
which it is equal, but a public institution can alone supply those
sciences which though rarely called for are yet necessary to complete
the circle, all the parts of which contribute to the improvement of the
country and some of them to its preservation.

The subject is now proposed for the consideration of Congress, because
if approved by the time the State legislatures shall have deliberated on
this extension of the Federal trusts, and the laws shall be passed and
other arrangements made for their execution, the necessary funds will be
on hand and without employment.

I suppose an amendment to the Constitution, by consent of the States,
necessary, because the objects now recommended are not among those
enumerated in the Constitution, and to which it permits the public
moneys to be applied.

The present consideration of a national establishment for education
particularly is rendered proper by this circumstance also, that if
Congress, approving the proposition, shall yet think it more eligible to
found it on a donation of lands, they have it now in their power to
endow it with those which will be among the earliest to produce the
necessary income. This foundation would have the advantage of being
independent of war, which may suspend other improvements by requiring
for its own purposes the resources destined for them.

This, fellow citizens, is the state of the public interests at the
present moment and according to the information now possessed. But such
is the situation of the nations of Europe and such, too, the predicament
in which we stand with some of them that we can not rely with certainty
on the present aspect of our affairs, that may change from moment to
moment during the course of your session or after you shall have
separated.

Our duty is, therefore, to act upon things as they are and to make a
reasonable provision for whatever they may be. Were armies to be raised
whenever a speck of war is visible in our horizon, we never should have
been without them. Our resources would have been exhausted on dangers
which have never happened, instead of being reserved for what is really
to take place. A steady, perhaps a quickened, pace in preparation for
the defense of our sea port towns and waters; an early settlement of the
most exposed and vulnerable parts of our country; a militia so organized
that its effective portions can be called to any point in the Union, or
volunteers instead of them to serve a sufficient time, are means which
may always be ready, yet never preying on our resources until actually
called into use. They will maintain the public interests while a more
permanent force shall be in course of preparation. But much will depend
on the promptitude with which these means can be brought into activity.
If war be forced upon us, in spite of our long and vain appeals to the
justice of nations, rapid and vigorous movements in its outset will go
far toward securing us in its course and issue, and toward throwing its
burthens on those who render necessary the resort from reason to force.

The result of our negotiations, or such incidents in their course as may
enable us to infer their probable issue; such further movements also on
our western frontiers as may shew whether war is to be pressed there
while negotiation is protracted elsewhere, shall be communicated to you
from time to time as they become known to me, with whatever other
information I possess or may receive, which may aid your deliberations
on the great national interests committed to your charge.

TH. JEFFERSON

***

State of the Union Address
Thomas Jefferson
October 27, 1807

The Senate and House of Representatives of the United States:

Circumstances, fellow citizens, which seriously threatened the peace of
our country have made it a duty to convene you at an earlier period than
usual. The love of peace so much cherished in the bosoms of our
citizens, which has so long guided the proceedings of their public
councils and induced forbearance under so many wrongs, may not insure
our continuance in the quiet pursuits of industry. The many injuries and
depredations committed on our commerce and navigation upon the high seas
for years past, the successive innovations on those principles of public
law which have been established by the reason and usage of nations as
the rule of their intercourse and the umpire and security of their
rights and peace, and all the circumstances which induced the
extraordinary mission to London are already known to you.

The instructions given to our ministers were framed in the sincerest
spirit of amity and moderation. They accordingly proceeded, in
conformity therewith, to propose arrangements which might embrace and
settle all the points in difference between us, which might bring us to
a mutual understanding on our neutral and national rights and provide
for a commercial intercourse on conditions of some equality. After long
and fruitless endeavors to effect the purposes of their mission and to
obtain arrangements within the limits of their instructions, they
concluded to sign such as could be obtained and to send them for
consideration, candidly declaring to the other negotiators at the same
time that they were acting against their instructions, and that their
Government, therefore, could not be pledged for ratification.

Some of the articles proposed might have been admitted on a principle of
compromise, but others were too highly disadvantageous, and no
sufficient provision was made against the principal source of the
irritations and collisions which were constantly endangering the peace
of the two nations. The question, therefore, whether a treaty should be
accepted in that form could have admitted but of one decision, even had
no declarations of the other party impaired our confidence in it. Still
anxious not to close the door against friendly adjustment, new
modifications were framed and further concessions authorized than could
before have been supposed necessary; and our ministers were instructed
to resume their negotiations on these grounds.

On this new reference to amicable discussion we were reposing in
confidence, when on the 22nd day of June last by a formal order from a
British admiral the frigate Chesapeake, leaving her port for a distant
service, was attacked by one of those vessels which had been lying in
our harbors under the indulgences of hospitality, was disabled from
proceeding, had several of her crew killed and four taken away. On this
outrage no commentaries are necessary. Its character has been pronounced
by the indignant voices of our citizens with an emphasis and unanimity
never exceeded. I immediately, by proclamation, interdicted our harbors
and waters to all British armed vessels, forbade intercourse with them,
and uncertain how far hostilities were intended, and the town of
Norfolk, indeed, being threatened with immediate attack, a sufficient
force was ordered for the protection of that place, and such other
preparations commenced and pursued as the prospect rendered proper. An
armed vessel of the United States was dispatched with instructions to
our ministers at London to call on that Government for the satisfaction
and security required by the outrage. A very short interval ought now to
bring the answer, which shall be communicated to you as soon as
received; then also, or as soon after as the public interests shall be
found to admit, the unratified treaty and proceedings relative to it
shall be made known to you.

The aggression thus begun has been continued on the part of the British
commanders by remaining within our waters in defiance of the authority
of the country, by habitual violations of its jurisdiction, and at
length by putting to death one of the persons whom they had forcibly
taken from on board the Chesapeake. These aggravations necessarily lead
to the policy either of never admitting an armed vessel into our harbors
or of maintaining in every harbor such an armed force as may constrain
obedience to the laws and protect the lives and property of our citizens
against their armed guests; but the expense of such a standing force and
its inconsistence with our principles dispense with those courtesies
which would necessarily call for it, and leave us equally free to
exclude the navy, as we are the army, of a foreign power from entering
our limits.

To former violations of maritime rights another is now added of very
extensive effect. The Government of that nation has issued an order
interdicting all trade by neutrals between ports not in amity with them;
and being now at war with nearly every nation on the Atlantic and
Mediterranean seas, our vessels are required to sacrifice their cargoes
at the first port they touch or to return home without the benefit of
going to any other market. Under this new law of the ocean our trade on
the Mediterranean has been swept away by seizures and condemnations, and
that in other seas is threatened with the same fate.

Our differences with Spain remain still unsettled, no measure having
been taken on her part since my last communications to Congress to bring
them to a close. But under a state of things which may favor
reconsideration they have been recently pressed, and an expectation is
entertained that they may now soon be brought to an issue of some sort.
With their subjects on our borders no new collisions have taken place
nor seem immediately to be apprehended. To our former grounds of
complaint has been added a very serious one, as you will see by the
decree a copy of which is now communicated. Whether this decree, which
professes to be conformable to that of the French Government of November
21st, 1806, heretofore communicated to Congress, will also be conformed
to that in its construction and application in relation to the United
States had not been ascertained at the date of our last communications.
These, however, gave reason to expect such a conformity.

With the other nations of Europe our harmony has been uninterrupted, and
commerce and friendly intercourse have been maintained on their usual
footing.

Our peace with the several states on the coast of Barbary appears as
firm as at any former period and as likely to continue as that of any
other nation.

Among our Indian neighbors in the northwestern quarter some fermentation
was observed soon after the late occurrences, threatening the
continuance of our peace. Messages were said to be interchanged and
tokens to be passing, which usually denote a state of restless among
them, and the character of the agitators pointed to the sources of
excitement. Measures were immediately taken for providing against that
danger; instructions were given to require explanations, and, with
assurances of our continued friendship, to admonish the tribes to remain
quiet at home, taking no part in quarrels not belonging to them. As far
as we are yet informed, the tribes in our vicinity, who are most
advanced in the pursuits of industry, are sincerely disposed to adhere
to their friendship with us and to their peace with all others, while
those more remote do not present appearances sufficiently quiet to
justify the intermission of military precaution on our part.

The great tribes on our southwestern quarter, much advanced beyond the
others in agriculture and household arts, appear tranquil and
identifying their views with ours in proportion to their advancement.
With the whole of these people, in every quarter, I shall continue to
inculcate peace and friendship with all their neighbors and perseverance
in those occupations and pursuits which will best promote their own
well-being.

The appropriations of the last session for the defense of our sea port
towns and harbors were made under expectation that a continuance of our
peace would permit us to proceed in that work according to our
convenience. It has been thought better to apply the sums then given
toward the defense of New York, Charleston, and New Orleans chiefly, as
most open and most likely first to need protection, and to leave places
less immediately in danger to the provisions of the present session.

The gun boats, too, already provided have on a like principle been
chiefly assigned to New York, New Orleans, and the Chesapeake. Whether
our movable force on the water, so material in aid of the defensive
works on the land, should be augmented in this or any other form is left
to the wisdom of the Legislature. For the purpose of manning these
vessels in sudden attacks on our harbors it is a matter for
consideration whether the sea men of the United States may not justly be
formed into a special militia, to be called on for tours of duty in
defense of the harbors where they shall happen to be, the ordinary
militia of the place furnishing that portion which may consist of
landsmen.

The moment our peace was threatened I deemed it indispensable to secure
a greater provision of those articles of military stores with which our
magazines were not sufficiently furnished. To have awaited a previous
and special sanction by law would have lost occasions which might not be
retrieved. I did not hesitate, therefore, to authorize engagements for
such supplements to our existing stock as would render it adequate to
the emergencies threatening us, and I trust that the Legislature,
feeling the same anxiety for the safety of our country, so materially
advanced by this precaution, will approve, when done, what they would
have seen so important to be done if then assembled. Expenses, also
unprovided for, arose out of the necessity of calling all our gun boats
into actual service for the defense of our harbors; all of which
accounts will be laid before you.

Whether a regular army is to be raised, and to what extent, must depend
on the information so shortly expected. In the mean time I have called
on the States for quotas of militia, to be in readiness for present
defense, and have, moreover, encouraged the acceptance of volunteers;
and I am happy to inform you that these have offered themselves with
great alacrity in every part of the Union. They are ordered to be
organized and ready at a moment's warning to proceed on any service to
which they may be called, and every preparation within the Executive
powers has been made to insure us the benefit of early exertions.

I informed Congress at their last session of the enterprises against the
public peace which were believed to be in preparation by Aaron Burr and
his associates, of the measures taken to defeat them and to bring the
offenders to justice. Their enterprises were happily defeated by the
patriotic exertions of the militia whenever called into action, by the
fidelity of the Army, and energy of the commander in chief in promptly
arranging the difficulties presenting themselves on the Sabine,
repairing to meet those arising on the Mississippi, and dissipating
before their explosion plots engendering there. I shall think it my duty
to lay before you the proceedings and the evidence publicly exhibited on
the arraignment of the principal offenders before the circuit court of
Virginia.

You will be enabled to judge whether the defect was in the testimony, in
the law, or in the administration of the law; and wherever it shall be
found, the Legislature alone can apply or originate the remedy. The
framers of our Constitution certainly supposed they had guarded as well
their Government against destruction by treason as their citizens
against oppression under pretense of it, and if these ends are not
attained it is of importance to inquire by what means more effectual
they may be secured.

The accounts of the receipts of revenue during the year ending on the
30th day of September last being not yet made up, a correct statement
will be hereafter transmitted from the Treasury. In the mean time, it is
ascertained that the receipts have amounted to near $16 millions, which,
with the $5.5 millions in the Treasury at the beginning of the year,
have enabled us, after meeting the current demands and interest
incurred, to pay more than $4 millions of the principal of our funded
debt. These payments, with those of the preceding five and a half years,
have extinguished of the funded debt $25.5 millions, being the whole
which could be paid or purchased within the limits of the law and of our
contracts, and have left us in the Treasury $8.5 millions.

A portion of this sum may be considered as a commencement of
accumulation of the surpluses of revenue which, after paying the
installments of debt as they shall become payable, will remain without
any specific object. It may partly, indeed, be applied toward completing
the defense of the exposed points of our country, on such a scale as
shall be adapted to our principles and circumstances. This object is
doubtless among the first entitled to attention in such a state of our
finances, and it is one which, whether we have peace or war, will
provide security where it is due. Whether what shall remain of this,
with the future surpluses, may be usefully applied to purposes already
authorized or more usefully to others requiring new authorities, or how
otherwise they shall be disposed of, are questions calling for the
notice of Congress, unless, indeed, they shall be superseded by a change
in our public relations now awaiting the determination of others.
Whatever be that determination, it is a great consolation that it will
become known at a moment when the supreme council of the nation is
assembled at its post, and ready to give the aids of its wisdom and
authority to whatever course the good of our country shall then call us
to pursue.

Matters of minor importance will be the subjects of future
communications, and nothing shall be wanting on my part which may give
information or dispatch to the proceedings of the Legislature in the
exercise of their high duties, and at a moment so interesting to the
public welfare.

TH. JEFFERSON

***

State of the Union Address
Thomas Jefferson
November 8, 1808

The Senate and House of Representatives of the United States:

It would have been a source, fellow citizens, of much gratification if
our last communications from Europe had enabled me to inform you that
the belligerent nations, whose disregard of neutral rights has been so
destructive to our commerce, had become awakened to the duty and true
policy of revoking their unrighteous edicts. That no means might be
omitted to produce this salutary effect, I lost no time in availing
myself of the act authorizing a suspension, in whole or in part, of the
several embargo laws. Our ministers at London and Paris were instructed
to explain to the respective Governments there our disposition to
exercise the authority in such manner as would withdraw the pretext on
which the aggressions were originally founded and open the way for a
renewal of that commercial intercourse which it was alleged on all sides
had been reluctantly obstructed.

As each of those Governments had pledged its readiness to concur in
renouncing a measure which reached its adversary through the
incontestable rights of neutrals only, and as the measure had been
assumed by each as a retaliation for an asserted acquiescence in the
aggression of the other, it was reasonably expected that the occasion
would have been seized by both for evincing the sincerity of their
professions, and for restoring to the commerce of the United States its
legitimate freedom. The instructions to our ministers with respect to
the different belligerents were necessarily modified with a reference to
their different circumstances, and to the condition annexed by law to
the Executive power of suspension, requiring a decree of security to our
commerce which would not result from a repeal of the decrees of France.
Instead of a pledge, therefore, of a suspension of the embargo as to her
in case of such a repeal, it was presumed that a sufficient inducement
might be found in other considerations, and particularly in the change
produced by a compliance with our just demands by one belligerent and a
refusal by the other in the relations between the other and the United
States.

To Great Britain, whose power on the ocean is so ascendant, it was
deemed not inconsistent with that condition to state explicitly that on
her rescinding her orders in relation to the United States their trade
would be opened with her, and remain shut to her enemy in case of his
failure to rescind his decrees also. From France no answer has been
received, nor any indication that the requisite change in her decrees is
contemplated. The favorable reception of the proposition to Great
Britain was the less to be doubted, as her orders of council had not
only been referred for their vindication to an acquiescence on the part
of the United States no longer to be pretended, but as the arrangement
proposed, whilst it resisted the illegal decrees of France, involved,
moreover, substantially the precise advantages professedly aimed at by
the British orders. The arrangement has nevertheless been rejected.

This candid and liberal experiment having thus failed, and no other
event having occurred on which a suspension of the embargo by the
Executive was authorized, it necessarily remains in the extent
originally given to it. We have the satisfaction, however, to reflect
that in return for the privations imposed by the measure, and which our
fellow citizens in general have borne with patriotism, it has had the
important effects of saving our mariners and our vast mercantile
property, as well as of affording time for prosecuting the defensive and
provisional measures called for by the occasion. It has demonstrated to
foreign nations the moderation and firmness which govern our councils,
and to our citizens the necessity of uniting in support of the laws and
the rights of their country, and has thus long frustrated those
usurpations and spoliations which, if resisted, involved war; if
submitted to, sacrificed a vital principle of our national independence.

Under a continuance of the belligerent measures which, in defiance of
laws which consecrate the rights of neutrals, overspread the ocean with
danger, it will rest with the wisdom of Congress to decide on the course
best adapted to such a state of things; and bringing with them, as they
do, from every part of the Union the sentiments of our constituents, my
confidence is strengthened that in forming this decision they will, with
an unerring regard to the essential rights and interests of the nation,
weigh and compare the painful alternatives out of which a choice is to
be made. Nor should I do justice to the virtues which on other occasions
have marked the character of our fellow citizens if I did not cherish an
equal confidence that the alternative chosen, whatever it may be, will
be maintained with all the fortitude and patriotism which the crisis
ought to inspire.

The documents containing the correspondences on the subject of the
foreign edicts against our commerce, with the instructions given to our
ministers at London and Paris, are now laid before you.

The communications made to Congress at their last session explained the
posture in which the close of the discussions relating to the attack by
a British ship of war on the frigate Chesapeake left a subject on which
the nation had manifested so honorable a sensibility. Every view of what
had passed authorized a belief that immediate steps would be taken by
the British Government for redressing a wrong which the more it was
investigated appeared the more clearly to require what had not been
provided for in the special mission. It is found that no steps have been
taken for the purpose. On the contrary, it will be seen in the documents
laid before you that the inadmissible preliminary which obstructed the
adjustment is still adhered to, and, moreover, that it is now brought
into connection with the distinct and irrelative case of the orders in
council. The instructions which had been given to our minister at London
with a view to facilitate, if necessary, the reparation claimed by the
United States are included in the documents communicated.

Our relations with the other powers of Europe have undergone no material
changes since your last session. The important negotiations with Spain
which had been alternately suspended and resumed necessarily experience
a pause under the extraordinary and interesting crisis which
distinguishes her internal situation.

With the Barbary Powers we continue in harmony, with the exception of an
unjustifiable proceeding of the Dey of Algiers toward our consul to that
Regency. Its character and circumstances are now laid before you, and
will enable you to decide how far it may, either now or hereafter, call
for any measures not within the limits of the Executive authority.

With our Indian neighbors the public peace has been steadily maintained.
Some instances of individual wrong have, as at other times, taken place,
but in no wise implicating the will of the nation. Beyond the
Mississippi the Ioways, the Sacs and the Alabamas have delivered up for
trial and punishment individuals from among themselves accused of
murdering citizens of the United States. On this side of the Mississippi
the Creeks are exerting themselves to arrest offenders of the same kind,
and the Choctaws have manifested their readiness and desire for amicable
and just arrangements respecting depredations committed by disorderly
persons of their tribe. And, generally, from a conviction that we
consider them as a part of ourselves, and cherish with sincerity their
rights and interests, the attachment of the Indian tribes is gaining
strength daily--is extending from the nearer to the more remote, and
will amply requite us for the justice and friendship practiced toward
them. Husbandry and household manufacture are advancing among them more
rapidly with the Southern than Northern tribes, from circumstances of
soil and climate, and one of the two great divisions of the Cherokee
Nation have now under consideration to solicit the citizenship of the
United States, and to be identified with us in laws and government in
such progressive manner as we shall think best.

In consequence of the appropriations of the last session of Congress for
the security of our sea port towns and harbors, such works of defense
have been erected as seemed to be called for by the situation of the
several places, their relative importance, and the scale of expense
indicated by the amount of the appropriation. These works will chiefly
be finished in the course of the present season, except at New York and
New Orleans, where most was to be done; and although a great proportion
of the last appropriation has been expended on the former place, yet
some further views will be submitted to Congress for rendering its
security entirely adequate against naval enterprise. A view of what has
been done at the several places, and of what is proposed to be done,
shall be communicated as soon as the several reports are received.

Of the gun boats authorized by the act of December last, it has been
thought necessary to build only one hundred and three in the present
year. These, with those before possessed, are sufficient for the harbors
and waters most exposed, and the residents will require little time for
their construction when it shall be deemed necessary.

Under the act of the last session for raising an additional military
force so many officers were immediately appointed as were necessary for
carrying on the business of recruiting, and in proportion as it advanced
others have been added. We have reason to believe their success has been
satisfactory, although such returns have not yet been received as enable
me to present you a statement of the numbers engaged.

I have not thought it necessary in the course of the last season to call
for any general detachments of militia or of volunteers under the laws
passed for that purpose. For the ensuing season, however, they will be
required to be in readiness should their service be wanted. Some small
and special detachments have been necessary to maintain the laws of
embargo on that portion of our northern frontier which offered peculiar
facilities for evasion, but these were replaced as soon as it could be
done by bodies of new recruits. By the aid of these and of the armed
vessels called into service in other quarters the spirit of disobedience
and abuse, which manifested itself early and with sensible effect while
we were unprepared to meet it, has been considerably repressed.

Considering the extraordinary character of the times in which we live,
our attention should unremittingly be fixed on the safety of our
country. For a people who are free, and who mean to remain so, a well
organized and armed militia is their best security. It is therefore
incumbent on us at every meeting to revise the condition of the militia,
and to ask ourselves if it is prepared to repel a powerful enemy at
every point of our territories exposed to invasion. Some of the States
have paid a laudable attention to this object, but every degree of
neglect is to be found among others. Congress alone having the power to
produce an uniform state of preparation in this great organ of defense,
the interests which they so deeply feel in their own and their country's
security will present this as among the most important objects of their
deliberation.

Under the acts of March 11th and April 23rd respecting arms, the
difficulty of procuring them from abroad during the present situation
and dispositions of Europe induced us to direct our whole efforts to the
means of internal supply. The public factories have therefore been
enlarged, additional machineries erected, and, in proportion as
artificers can be found or formed, their effect, already more than
doubled, may be increased so as to keep pace with the yearly increase of
the militia. The annual sums appropriated by the latter have been
directed to the encouragement of private factories of arms, and
contracts have been entered into with individual undertakers to nearly
the amount of the first year's appropriation.

The suspension of our foreign commerce, produced by the injustice of the
belligerent powers and the consequent losses and sacrifices of our
citizens are subjects of just concern. The situation into which we have
thus been forced has impelled us to apply a portion of our industry and
capital to internal manufactures and improvements. The extent of this
conversion is daily increasing, and little doubt remains that the
establishments formed and forming will, under the auspices of cheaper
materials and subsistence, the freedom of labor from taxation with us,
and of protecting duties and prohibitions, become permanent. The
commerce with the Indians, too, within our own boundaries is likely to
receive abundant aliment from the same internal source, and will secure
to them peace and the progress of civilization, undisturbed by practices
hostile to both.

The accounts of the receipts and expenditures during the year ending the
30th of September last being not yet made up, a correct statement will
hereafter be transmitted from the Treasury. In the mean time it is
ascertained that the receipts have amounted to near $18 millions, which,
with the $8.5 millions in the Treasury at the beginning of the year,
have enabled us, after meeting the current demands and interest
incurred, to pay $2.3 millions of the principal of our funded debt, and
left us in the Treasury on that day near $14 millions. Of these, $5.35
millions will be necessary to pay what will be due on the 1st day of
January next, which will complete the reimbursement of the 8% stock.
These payments, with those made in the six and a half years preceding,
will have extinguished $33.58 millions of the principal of the funded
debt, being the whole which could be paid or purchased within the limits
of the law and of our contracts, and the amount of principal thus
discharged will have liberated the revenue from about $2 millions of
interest and added that sum annually to the disposable surplus.

The probable accumulation of the surpluses of revenue beyond what can be
applied to the payment of the public debt whenever the freedom and
safety of our commerce shall be restored merits the consideration of
Congress. Shall it lie unproductive in the public vaults? Shall the
revenue be reduced? Or shall it not rather be appropriated to the
improvements of roads, canals, rivers, education, and other great
foundations of prosperity and union under the powers which Congress may
already possess or such amendment to the Constitution as may be approved
by the States? While uncertain of the course of things, the time may be
advantageously employed in obtaining the powers necessary for a system
of improvement, should that be thought best.

Availing myself of this the last occasion which will occur of addressing
the two Houses of the Legislature at their meeting, I can not omit the
expression of my sincere gratitude for the repeated proofs of confidence
manifested to me by themselves and their predecessors since my call to
the administration and the many indulgences experienced at their hands.
These same grateful acknowledgements are due to my fellow citizens
generally, whose support has been my great encouragement under all
embarrassments. In the transaction of their business I can not have
escaped error. It is incident to our imperfect nature. But I may say
with truth my errors have been of the understanding, not of intention,
and that the advancement of their rights and interests has been the
constant motive for every measure. On these considerations I solicit
their indulgence. Looking forward with anxiety to future destinies, I
trust that in their steady character, unshaken by difficulties, in their
love of liberty, obedience to law, and support of the public
authorities, I see a sure guaranty of the permanence of our Republic;
and, retiring from the charge of their affairs, I carry with me the
consolation of a firm persuasion that Heaven has in store for our
beloved country long ages to come of prosperity and happiness.

TH. JEFFERSON

***

State of the Union Address
James Madison
November 29, 1809

Fellow-Citizens of the Senate and House of Representatives:

At the period of our last meeting I had the satisfaction of
communicating an adjustment with one of the principal belligerent
nations, highly important in itself, and still more so as presaging a
more extended accommodation. It is with deep concern I am now to inform
you that the favorable prospect has been over-clouded by a refusal of
the British Government to abide by the act of its minister
plenipotentiary, and by its ensuing policy toward the United States as
seen through the communications of the minister sent to replace him.

Whatever pleas may be urged for a disavowal of engagements formed by
diplomatic functionaries in cases where by the terms of the engagements
a mutual ratification is reserved, or where notice at the time may have
been given of a departure from instructions, or in extraordinary cases
essentially violating the principles of equity, a disavowal could not
have been apprehended in a case where no such notice or violation
existed, where no such ratification was reserved, and more especially
where, as is now in proof, an engagement to be executed without any such
ratification was contemplated by the instructions given, and where it
had with good faith been carried into immediate execution on the part of
the United States.

These considerations not having restrained the British Government from
disavowing the arrangement by virtue of which its orders in council were
to be revoked, and the event authorizing the renewal of commercial
intercourse having thus not taken place, it necessarily became a
question of equal urgency and importance whether the act prohibiting
that intercourse was not to be considered as remaining in legal force.
This question being, after due deliberation, determined in the
affirmative, a proclamation to that effect was issued. It could not but
happen, however, that a return to this state of things from that which
had followed an execution of the arrangement by the United States would
involve difficulties. With a view to diminish these as much as possible,
the instructions from the Secretary of the Treasury now laid before you
were transmitted to the collectors of the several ports. If in
permitting British vessels to depart without giving bonds not to proceed
to their own ports it should appear that the tenor of legal authority
has not been strictly pursued, it is to be ascribed to the anxious
desire which was felt that no individuals should be injured by so
unforeseen an occurrence; and I rely on the regard of Congress for the
equitable interests of our own citizens to adopt whatever further
provisions may be found requisite for a general remission of penalties
involuntarily incurred.

The recall of the disavowed minister having been followed by the
appointment of a successor, hopes were indulged that the new mission
would contribute to alleviate the disappointment which had been
produced, and to remove the causes which had so long embarrassed the
good understanding of the two nations. It could not be doubted that it
would at least be charged with conciliatory explanations of the step
which had been taken and with proposals to be substituted for the
rejected arrangement.

Reasonable and universal as this expectation was, it also has not been
fulfilled. From the first official disclosures of the new minister it
was found that he had received no authority to enter into explanations
relative to either branch of the arrangement disavowed nor any authority
to substitute proposals as to that branch which concerned the British
orders in council, and, finally, that his proposals with regard to the
other branch, the attack on the frigate Chesapeake, were founded on a
presumption repeatedly declared to be inadmissible by the United States,
that the first step toward adjustment was due from them, the proposals
at the same time omitting even a reference to the officer answerable for
the murderous aggression, and asserting a claim not less contrary to the
British laws and British practice than to the principles and obligations
of the United States.

The correspondence between the Department of State and this minister
will show how unessentially the features presented in its commencement
have been varied in its progress. It will show also that, forgetting the
respect due to all governments, he did not refrain from imputations on
this, which required that no further communications should be received
from him. The necessity of this step will be made known to His Britannic
Majesty through the minister plenipotentiary of the United States in
London; and it would indicate a want of the confidence due to a
Government which so well understands and exacts what becomes foreign
ministers near it not to infer that the misconduct of its own
representative will be viewed in the same light in which it has been
regarded here. The British Government will learn at the same time that a
ready attention will be given to communications through any channel
which may be substituted. It will be happy if the change in this respect
should be accompanied by a favorable revision of the unfriendly policy
which has been so long pursued toward the United States.

With France, the other belligerent, whose trespasses on our commercial
rights have long been the subject of our just remonstrances, the posture
of our relations does not correspond with the measures taken on the part
of the United States to effect a favorable change. The result of the
several communications made to her Government, in pursuance of the
authorities vested by Congress in the Executive, is contained in the
correspondence of our minister at Paris now laid before you.

By some of the other belligerents, although professing just and amicable
dispositions, injuries materially affecting our commerce have not been
duly controlled or repressed. In these cases the interpositions deemed
proper on our part have not been omitted. But it well deserves the
consideration of the Legislature how far both the safety and the honor
of the American flag may be consulted, by adequate provisions against
that collusive prostitution of it by individuals unworthy of the
American name which has so much flavored the real or pretended
suspicions under which the honest commerce of their fellow citizens has
suffered.

In relation to the powers on the coast of Barbary, nothing has occurred
which is not of a nature rather to inspire confidence than distrust as
to the continuance of the existing amity. With our Indian neighbors, the
just and benevolent system continued toward them has also preserved
peace, and is more and more advancing habits favorable to their
civilization and happiness.

From a statement which will be made by the Secretary of War it will be
seen that the fortifications on our maritime frontier are in many of the
ports completed, affording the defense which was contemplated, and that
a further time will be required to render complete the works in the
harbor of New York and in some other places. By the enlargement of the
works and the employment of a greater number of hands at the public
armories the supply of small arms of an improving quality appears to be
annually increasing at a rate that, with those made on private contract,
may be expected to go far toward providing for the public exigency.

The act of Congress providing for the equipment of our vessels of war
having been fully carried into execution, I refer to the statement of
the Secretary of the Navy for the information which may be proper on
that subject. To that statement is added a view of the transfers of
appropriations authorized by the act of the session preceding the last
and of the grounds on which the transfers were made.

Whatever may be the course of your deliberations on the subject of our
military establishments, I should fail in my duty in not recommending to
your serious attention the importance of giving to our militia, the
great bulwark of our security and resource of our power, an organization
best adapted to eventual situations for which the United States ought to
be prepared.

The sums which had been previously accumulated in the Treasury, together
with the receipts during the year ending on the 30th of September last
(and amounting to more than $9 millions), have enabled us to fulfill all
our engagements and to defray the current expenses of Government without
recurring to any loan. But the insecurity of our commerce and the
consequent diminution of the public revenue will probably produce a
deficiency in the receipts of the ensuing year, for which and for other
details I refer to the statements which will be transmitted from the
Treasury.

In the state which has been presented of our affairs with the great
parties to a disastrous and protracted war, carried on in a mode equally
injurious and unjust to the United States as a neutral nation, the
wisdom of the National Legislature will be again summoned to the
important decision on the alternatives before them. That these will be
met in a spirit worthy the councils of a nation conscious both of its
rectitude and of its rights, and careful as well of its honor as of its
peace, I have an entire confidence; and that the result will be stamped
by a unanimity becoming the occasion, and be supported by every portion
of our citizens with a patriotism enlightened and invigorated by
experience, ought as little to be doubted.

In the midst of the wrongs and vexations experienced from external
causes there is much room for congratulation on the prosperity and
happiness flowing from our situation at home. The blessing of health has
never been more universal. The fruits of the seasons, though in
particular articles and districts short of their usual redundancy, are
more than sufficient for our wants and our comforts. The face of our
country ever presents evidence of laudable enterprise, of extensive
capital, and of durable improvement. In a cultivation of the materials
and the extension of useful manufactures, more especially in the general
application to household fabrics, we behold a rapid diminution of our
dependence on foreign supplies. Nor is it unworthy of reflection that
this revolution in our pursuits and habits is in no slight degree a
consequence of those impolitic and arbitrary edicts by which the
contending nations, in endeavoring each of them to obstruct our trade
with the other, have so far abridged our means of procuring the
productions and manufactures of which our own are now taking the place.

Recollecting always that for every advantage which may contribute to
distinguish our lot from that to which others are doomed by the unhappy
spirit of the times we are indebted to that Divine Providence whose
goodness has been so remarkably extended to this rising nation, it
becomes us to cherish a devout gratitude, and to implore from the same
omnipotent source a blessing on the consultations and measures about to
be undertaken for the welfare of our beloved country.

***

State of the Union Address
James Madison
December 5, 1810

Fellow-Citizens of the Senate and House of Representatives:

The embarrassments which have prevailed in our foreign relations, and so
much employed the deliberations of Congress, make it a primary duty in
meeting you to communicate whatever may have occurred in that branch of
our national affairs.

The act of the last session of Congress concerning the commercial
intercourse between the United States and Great Britain and France and
their dependencies having invited in a new form a termination of their
edicts against our neutral commerce, copies of the act were immediately
forwarded to our ministers at London and Paris, with a view that its
object might be within the early attention of the French and British
Governments.

By the communication received through our minister at Paris it appeared
that knowledge of the act by the French Government was followed by a
declaration that the Berlin and Milan decrees were revoked, and would
cease to have effect on the first day of November ensuing. These being
the only known edicts of France within the description of the act, and
the revocation of them being such that they ceased at that date to
violate our neutral commerce, the fact, as prescribed by law, was
announced by a proclamation bearing date the 2nd of November.

It would have well accorded with the conciliatory views indicated by
this proceeding on the part of France to have extended them to all the
grounds of just complaint which now remain unadjusted with the United
States. It was particularly anticipated that, as a further evidence of
just dispositions toward them, restoration would have been immediately
made of the property of our citizens under a misapplication of the
principle of reprisals combined with a misconstruction of a law of the
United States. This expectation has not been fulfilled.

From the British Government no communication on the subject of the act
has been received. To a communication from our minister at London of a
revocation by the French Government of its Berlin and Milan decrees it
was answered that the British system would be relinquished as soon as
the repeal of the French decrees should have actually taken effect and
the commerce of neutral nations have been restored to the condition in
which it stood previously to the promulgation of those decrees. This
pledge, although it does not necessarily import, does not exclude the
intention of relinquishing, along with the others in council, the
practice of those novel blockades which have a like effect of
interrupting our neutral commerce, and this further justice to the
United States is the rather to be looked for, in as much as the
blockades in question, being not more contrary to the established law of
nations than inconsistent with the rules of blockade formally recognized
by Great Britain herself, could have no alleged basis other than the
plea of retaliation alleged as the basis of the orders in council.

Under the modification of the original orders of November, 1807, into
the orders of April, 1809, there is, indeed, scarcely a nominal
distinction between the orders and the blockades. One of those
illegitimate blockades, bearing date in May, 1806, having been expressly
avowed to be still unrescinded, and to be in effect comprehended in the
orders in council, was too distinctly brought within the purview of the
act of Congress not to be comprehended in the explanation of the
requisites to a compliance with it. The British Government was
accordingly apprised by our minister near it that such was the light in
which the subject was to be regarded.

On the other important subjects depending between the United States and
the Government no progress has been made from which an early and
satisfactory result can be relied on.

In this new posture of our relations with those powers the consideration
of Congress will be properly turned to a removal of doubts which may
occur in the exposition and of difficulties in the execution of the act
above cited.

The commerce of the United States with the north of Europe, heretofore
much vexed by licentious cruisers, particularly under the Danish flag,
has latterly been visited with fresh and extensive depredations. The
measures pursued in behalf of our injured citizens not having obtained
justice for them, a further and more formal interposition with the
Danish Government is contemplated. The principles which have been
maintained by that Government in relation to neutral commerce, and the
friendly professions of His Danish Majesty toward the United States, are
valuable pledges in favor of a successful issue.

Among the events growing out of the state of the Spanish Monarchy, our
attention was imperiously attracted to the change developing itself in
that portion of West Florida which, though of right appertaining to the
United States, had remained in the possession of Spain awaiting the
result of negotiations for its actual delivery to them. The Spanish
authority was subverted and a situation produced exposing the country to
ulterior events which might essentially affect the rights and welfare of
the Union. In such a conjuncture I did not delay the interposition
required for the occupancy of the territory west of the river Perdido,
to which the title of the United States extends, and to which the laws
provided for the Territory of Orleans are applicable. With this view,
the proclamation of which a copy is laid before you was confided to the
governor of that Territory to be carried into effect. The legality and
necessity of the course pursued assure me of the favorable light in
which it will present itself to the Legislature, and of the promptitude
with which they will supply whatever provisions may be due to the
essential rights and equitable interests of the people thus brought into
the bosom of the American family.

Our amity with the powers of Barbary, with the exception of a recent
occurrence at Tunis, of which an explanation is just received, appears
to have been uninterrupted and to have become more firmly established.

With the Indian tribes also the peace and friendship of the United
States are found to be so eligible that the general disposition to
preserve both continues to gain strength.

I feel particular satisfaction in remarking that an interior view of our
country presents us with grateful proofs of its substantial and
increasing prosperity. To a thriving agriculture and the improvements
related to it is added a highly interesting extension of useful
manufactures, the combined product of professional occupations and of
household industry. Such indeed is the experience of economy as well as
of policy in these substitutes for supplies heretofore obtained by
foreign commerce that in a national view the change is justly regarded
as of itself more than a recompense for those privations and losses
resulting from foreign injustice which furnished the general impulse
required for its accomplishment. How far it may be expedient to guard
the infancy of this improvement in the distribution of labor by
regulations of the commercial tariff is a subject which can not fail to
suggest itself to your patriotic reflections.

It will rest with the consideration of Congress also whether a provident
as well as fair encouragement would not be given to our navigation by
such regulations as would place it on a level of competition with
foreign vessels, particularly in transporting the important and bulky
productions of our own soil. The failure of equality and reciprocity in
the existing regulations on this subject operates in our ports as a
premium to foreign competitors, and the inconvenience must increase as
these may be multiplied under more favorable circumstances by the more
than countervailing encouragements now given them by the laws of their
respective countries.

Whilst it is universally admitted that a well-instructed people alone
can be permanently a free people, and whilst it is evident that the
means of diffusing and improving useful knowledge form so small a
proportion of the expenditures for national purposes, I can not presume
it to be unseasonable to invite your attention to the advantages of
superadding to the means of education provided by the several States a
seminary of learning instituted by the National Legislature within the
limits of their exclusive jurisdiction, the expense of which might be
defrayed or reimbursed out of the vacant grounds which have accrued to
the nation within those limits.

Such an institution, though local in its legal character, would be
universal in its beneficial effects. By enlightening the opinions, by
expanding the patriotism, and by assimilating the principles, the
sentiments, and the manners of those who might resort to this temple of
science, to be redistributed in due time through every part of the
community, sources of jealousy and prejudice would be diminished, the
features of national character would be multiplied, and greater extent
given to social harmony. But, above all, a well-constituted seminary in
the center of the nation is recommended by the consideration that the
additional instruction emanating from it would contribute not less to
strengthen the foundations than to adorn the structure of our free and
happy system of government.

Among the commercial abuses still committed under the American flag, and
leaving in force my former reference to that subject, it appears that
American citizens are instrumental in carrying on a traffic in enslaved
Africans, equally in violation of the laws of humanity and in defiance
of those of their own country. The same just and benevolent motives
which produced interdiction in force against this criminal conduct will
doubtless be felt by Congress in devising further means of suppressing
the evil.

In the midst of uncertainties necessarily connected with the great
interests of the United States, prudence requires a continuance of our
defensive and precautionary arrangement. The Secretary of War and
Secretary of the Navy will submit the statements and estimates which may
aid Congress in their ensuing provisions for the land and naval forces.
The statements of the latter will include a view of the transfers of
appropriations in the naval expenditures and in the grounds on which
they were made.

The fortifications for the defense of our maritime frontier have been
prosecuted according to the plan laid down in 1808. The works, with some
exceptions, are completed and furnished with ordnance. Those for the
security of the city of New York, though far advanced toward completion,
will require a further time and appropriation. This is the case with a
few others, either not completed or in need of repairs.

The improvements in quality and quantity made in the manufacture of
cannon and small arms, both at the public armories and private
factories, warrant additional confidence in the competency of these
resources for supplying the public exigencies.

These preparations for arming the militia having thus far provided for
one of the objects contemplated by the power vested in Congress with
respect to that great bulwark of the public safety, it is for their
consideration whether further provisions are not requisite for the other
contemplated objects of organization and discipline. To give to this
great mass of physical and moral force the efficiency which it merits,
and is capable of receiving, it is indispensable that they should be
instructed and practiced in the rules by which they are to be governed.
Toward an accomplishment of this important work I recommend for the
consideration of Congress the expediency of instituting a system which
shall in the first instance call into the field at the public expense
and for a given time certain portions of the commissioned and
non-commissioned officers. The instruction and discipline thus acquired
would gradually diffuse through the entire body of the militia that
practical knowledge and promptitude for active service which are the
great ends to be pursued. Experience has left no doubt either of the
necessity or of the efficacy of competent military skill in those
portions of an army in fitting it for the final duties which it may have
to perform.

The Corps of Engineers, with the Military Academy, are entitled to the
early attention of Congress. The buildings at the seat fixed by law for
the present Academy are so far in decay as not to afford the necessary
accommodation. But a revision of the law is recommended, principally
with a view to a more enlarged cultivation and diffusion of the
advantages of such institutions, by providing professorships for all the
necessary branches of military instruction, and by the establishment of
an additional academy at the seat of Government or elsewhere. The means
by which war, as well for defense as for offense, are now carried on
render these schools of the more scientific operations an indispensable
part of every adequate system.

Even among nations whose large standing armies and frequent wars afford
every other opportunity of instruction these establishments are found to
be indispensable for the due attainment of the branches of military
science which require a regular course of study and experiment. In a
government happily without the other opportunities seminaries where the
elementary principles of the art of war can be taught without actual
war, and without the expense of extensive and standing armies, have the
precious advantage of uniting an essential preparation against external
danger with a scrupulous regard to internal safety. In no other way,
probably, can a provision of equal efficacy for the public defense be
made at so little expense or more consistently with the public liberty.

The receipts into the Treasury during the year ending on the 30th of
September last (and amounting to more than $8.5 millions) have exceeded
the current expenses of the Government, including the interest on the
public debt. For the purpose of reimbursing at the end of the year $3.75
millions of the principal, a loan, as authorized by law, had been
negotiated to that amount, but has since been reduced to $2.75 millions,
the reduction being permitted by the state of the Treasury, in which
there will be a balance remaining at the end of the year estimated at $2
millions. For the probable receipts of the next year and other details I
refer to statements which will be transmitted from the Treasury, and
which will enable you to judge what further provisions may be necessary
for the ensuing years.

Reserving for future occasions in the course of the session whatever
other communications may claim your attention, I close the present by
expressing my reliance, under the blessing of Divine Providence, on the
judgement and patriotism which will guide your measures at a period
particularly calling for united councils and flexible exertions for the
welfare of our country, and by assuring you of the fidelity and alacrity
with which my cooperation will be afforded.

***

State of the Union Address
James Madison
November 5, 1811

Fellow-Citizens of the Senate and House of Representatives:

In calling you together sooner than a separation from your homes would
otherwise have been required I yielded to considerations drawn from the
posture of our foreign affairs, and in fixing the present for the time
of your meeting regard was had to the probability of further
developments of the policy of the belligerent powers toward this country
which might the more unite the national councils in the measures to be
pursued.

At the close of the last session of Congress it was hoped that the
successive confirmations of the extinction of the French decrees, so far
as they violated our neutral commerce, would have induced the Government
of Great Britain to repeal its orders in council, and thereby authorize
a removal of the existing obstructions to her commerce with the United
States.

Instead of this reasonable step toward satisfaction and friendship
between the two nations, the orders were, at a moment when least to have
been expected, put into more rigorous execution; and it was communicated
through the British envoy just arrived that whilst the revocation of the
edicts of France, as officially made known to the British Government,
was denied to have taken place, it was an indispensable condition of the
repeal of the British orders that commerce should be restored to a
footing that would admit the productions and manufactures of Great
Britain, when owned by neutrals, into markets shut against them by her
enemy, the United States being given to understand that in the mean time
a continuance of their nonimportation act would lead to measures of
retaliation.

At a later date it has indeed appeared that a communication to the
British Government of fresh evidence of the repeal of the French decrees
against our neutral trade was followed by an intimation that it had been
transmitted to the British plenipotentiary here in order that it might
receive full consideration in the depending discussions. This
communication appears not to have been received; but the transmission of
it hither, instead of founding on it an actual repeal of the orders or
assurances that the repeal would ensue, will not permit us to rely on
any effective change in the British cabinet. To be ready to meet with
cordiality satisfactory proofs of such a change, and to proceed in the
mean time in adapting our measures to the views which have been
disclosed through that minister will best consult our whole duty.

In the unfriendly spirit of those disclosures indemnity and redress for
other wrongs have continued to be withheld, and our coasts and the
mouths of our harbors have again witnessed scenes not less derogatory to
the dearest of our national rights than vexation to the regular course
of our trade.

Among the occurrences produced by the conduct of British ships of war
hovering on our coasts was an encounter between one of them and the
American frigate commanded by Captain Rodgers, rendered unavoidable on
the part of the latter by a fire commenced without cause by the former,
whose commander is therefore alone chargeable with the blood
unfortunately shed in maintaining the honor of the American flag. The
proceedings of a court of inquiry requested by Captain Rodgers are
communicated, together with the correspondence relating to the
occurrence, between the Secretary of State and His Britannic Majesty's
envoy. To these are added the several correspondences which have passed
on the subject of the British orders in council, and to both the
correspondence relating to the Floridas, in which Congress will be made
acquainted with the interposition which the Government of Great Britain
has thought proper to make against the proceeding of the United States.

The justice and fairness which have been evinced on the part of the
United States toward France, both before and since the revocation of her
decrees, authorized an expectation that her Government would have
followed up that measure by all such others as were due to our
reasonable claims, as well as dictated by its amicable professions. No
proof, however, is yet given of an intention to repair the other wrongs
done to the United States, and particularly to restore the great amount
of American property seized and condemned under edicts which, though not
affecting our neutral relations, and therefore not entering into
questions between the United States and other belligerents, were
nevertheless founded in such unjust principles that the reparation ought
to have been prompt and ample.

In addition to this and other demands of strict right on that nation,
the United States have much reason to be dissatisfied with the rigorous
and unexpected restrictions to which their trade with the French
dominions has been subjected, and which, if not discontinued, will
require at least corresponding restrictions on importations from France
into the United States.

On all those subjects our minister plenipotentiary lately sent to Paris
has carried with him the necessary instructions, the result of which
will be communicated to you, by ascertaining the ulterior policy of the
French Government toward the United States, will enable you to adapt to
it that of the United States toward France.

Our other foreign relations remain without unfavorable changes. With
Russia they are on the best footing of friendship. The ports of Sweden
have afforded proofs of friendly dispositions toward our commerce in the
councils of that nation also, and the information from our special
minister to Denmark shews that the mission had been attended with
valuable effects to our citizens, whose property had been so extensively
violated and endangered by cruisers under the Danish flag.

Under the ominous indications which commanded attention it became a duty
to exert the means committed to the executive department in providing
for the general security. The works of defense on our maritime frontier
have accordingly been prosecuted with an activity leaving little to be
added for the completion of the most important ones, and, as
particularly suited for cooperation in emergencies, a portion of the gun
boats have in particular harbors been ordered into use. The ships of war
before in commission, with the addition of a frigate, have been chiefly
employed as a cruising guard to the rights of our coast, and such a
disposition has been made of our land forces as was thought to promise
the services most appropriate and important.

In this disposition is included a force consisting of regulars and
militia, embodied in the Indiana Territory and marched toward our
northwestern frontier. This measure was made requisite by several
murders and depredations committed by Indians, but more especially by
the menacing preparations and aspect of a combination of them on the
Wabash, under the influence and direction of a fanatic of the Shawanese
tribe. With these exceptions the Indian tribes retain their peaceable
dispositions toward us, and their usual pursuits.

I must now add that the period is arrived which claims from the
legislative guardians of the national rights a system of more ample
provisions for maintaining them. Notwithstanding the scrupulous justice,
the protracted moderation, and the multiplied efforts on the part of the
United States to substitute for the accumulating dangers to the peace of
the two countries all the mutual advantages of reestablished friendship
and confidence, we have seen that the British cabinet perseveres not
only in withholding a remedy for other wrongs, so long and so loudly
calling for it, but in the execution, brought home to the threshold of
our territory, of measures which under existing circumstances have the
character as well as the effect of war on our lawful commerce.

With this evidence of hostile inflexibility in trampling on rights which
no independent nation can relinquish, Congress will feel the duty of
putting the United States into an armor and an attitude demanded by the
crisis, and corresponding with the national spirit and expectations.

I recommend, accordingly, that adequate provisions be made for filling
the ranks and prolonging the enlistments of the regular troops; for an
auxiliary force to be engaged for a more limited term; for the
acceptance of volunteer corps, whose patriotic ardor may court a
participation in urgent services; for detachments as they may be wanted
of other portions of the militia, and for such a preparation of the
great body as will proportion its usefulness to its intrinsic
capacities. Nor can the occasion fail to remind you of the importance of
those military seminaries which in every event will form a valuable and
frugal part of our military establishment.

The manufacture of cannon and small arms has proceeded with due success,
and the stock and resources of all the necessary munitions are adequate
to emergencies. It will not be inexpedient, however, for Congress to
authorize an enlargement of them.

Your attention will of course be drawn to such provisions on the subject
of our naval force as may be required for the services to which it may
be best adapted. I submit to Congress the seasonableness also of an
authority to augment the stock of such materials as are imperishable in
their nature, or may not at once be attainable.

In contemplating the scenes which distinguish this momentous epoch, and
estimating their claims to our attention, it is impossible to overlook
those developing themselves among the great communities which occupy the
southern portion of our own hemisphere and extend into our neighborhood.
An enlarged philanthropy and an enlightened forecast concur in imposing
on the national councils an obligation to take a deep interest in their
destinies, to cherish reciprocal sentiments of good will, to regard the
progress of events, and not to be unprepared for whatever order of
things may be ultimately established.

Under another aspect of our situation the early attention of Congress
will be due to the expediency of further guards against evasions and
infractions of our commercial laws. The practice of smuggling, which is
odious everywhere, and particularly criminal in free governments, where,
the laws being made by all for the good of all, a fraud is committed on
every individual as well as on the state, attains its utmost guilt when
it blends with a pursuit of ignominious gain a treacherous subserviency,
in the transgressors, to a foreign policy adverse to that of their own
country. It is then that the virtuous indignation of the public should
be enabled to manifest itself through the regular animadversions of the
most competent laws.

To secure greater respect to our mercantile flag, and to the honest
interests which it covers, it is expedient also that it be made
punishable in our citizens to accept licenses from foreign governments
for a trade unlawfully interdicted by them to other American citizens,
or to trade under false colors or papers of any sort.

A prohibition is equally called for against the acceptance by our
citizens of special licenses to be used in a trade with the United
States, and against the admission into particular ports of the United
States of vessels from foreign countries authorized to trade with
particular ports only.

Although other subjects will press more immediately on your
deliberations, a portion of them can not but be well bestowed on the
just and sound policy of securing to our manufactures the success they
have attained, and are still attaining, in some degree, under the
impulse of causes not permanent, and to our navigation, the fair extent
of which is at present abridged by the unequal regulations of foreign
governments.

Besides the reasonableness of saving our manufactures from sacrifices
which a change of circumstances might bring on them, the national
interest requires that, with regard to such articles at least as belong
to our defense and our primary wants, we should not be left in
unnecessary dependence on external supplies. And whilst foreign
governments adhere to the existing discriminations in their ports
against our navigation, and an equality or lesser discrimination is
enjoyed by their navigation in our ports, the effect can not be
mistaken, because it has been seriously felt by our shipping interests;
and in proportion as this takes place the advantages of an independent
conveyance of our products to foreign markets and of a growing body of
mariners trained by their occupations for the service of their country
in times of danger must be diminished.

The receipts into the Treasury during the year ending on the 30th day of
September last have exceeded $13.5 millions, and have enabled us to
defray the current expenses, including the interest on the public debt,
and to reimburse more than $5 millions of the principal without
recurring to the loan authorized by the act of the last session. The
temporary loan obtained in the latter end of the year 1810 has also been
reimbursed, and is not included in that amount.

The decrease of revenue arising from the situation of our commerce, and
the extraordinary expenses which have and may become necessary, must be
taken into view in making commensurate provisions for the ensuing year;
and I recommend to your consideration the propriety of insuring a
sufficiency of annual revenue at least to defray the ordinary expenses
of Government, and to pay the interest on the public debt, including
that on new loans which may be authorized.

I can not close this communication without expressing my deep sense of
the crisis in which you are assembled, my confidence in a wise and
honorable result to your deliberations, and assurances of the faithful
zeal with which my cooperating duties will be discharged, invoking at
the same time the blessing of Heaven on our beloved country and on all
the means that may be employed in vindicating its rights and advancing
its welfare.

***

State of the Union Address
James Madison
November 4, 1812

Fellow-Citizens of the Senate and House of Representatives:

On our present meeting it is my first duty to invite your attention to
the providential favors which our country has experienced in the unusual
degree of health dispensed to its inhabitants, and in the rich abundance
with which the earth has rewarded the labors bestowed on it. In the
successful cultivation of other branches of industry, and in the
progress of general improvement favorable to the national prosperity,
there is just occasion also for our mutual congratulations and
thankfulness.

With these blessings are necessarily mingled the pressures and
vicissitudes incident to the state of war into which the United States
have been forced by the perseverance of a foreign power in its system of
injustice and aggression.

Previous to its declaration it was deemed proper, as a measure of
precaution and forecast, that a considerable force should be placed in
the Michigan Territory with a general view to its security, and, in the
event of war, to such operations in the uppermost Canada as would
intercept the hostile influence of Great Britain over the savages,
obtain the command of the lake on which that part of Canada borders, and
maintain cooperating relations with such forces as might be most
conveniently employed against other parts.

Brigadier-General Hull was charged with this provisional service, having
under his command a body of troops composed of regulars and of
volunteers from the State of Ohio. Having reached his destination after
his knowledge of the war, and possessing discretionary authority to act
offensively, he passed into the neighboring territory of the enemy with
a prospect of easy and victorious progress. The expedition,
nevertheless, terminated unfortunately, not only in a retreat to the
town and fort of Detroit, but in the surrender of both and of the
gallant corps commanded by that officer. The causes of this painful
reverse will be investigated by a military tribunal.

A distinguishing feature in the operations which preceded and followed
this adverse event is the use made by the enemy of the merciless savages
under their influence. Whilst the benevolent policy of the United States
invariably recommended peace and promoted civilization among that
wretched portion of the human race, and was making exertions to dissuade
them from taking either side in the war, the enemy has not scrupled to
call to his aid their ruthless ferocity, armed with the horrors of those
instruments of carnage and torture which are known to spare neither age
nor sex. In this outrage against the laws of honorable war and against
the feelings sacred to humanity the British commanders can not resort to
a plea of retaliation, for it is committed in the face of our example.
They can not mitigate it by calling it a self-defense against men in
arms, for it embraces the most shocking butcheries of defenseless
families. Nor can it be pretended that they are not answerable for the
atrocities perpetrated, since the savages are employed with a knowledge,
and even with menaces, that their fury could not be controlled. Such is
the spectacle which the deputed authorities of a nation boasting its
religion and morality have not been restrained from presenting to an
enlightened age.

The misfortune at Detroit was not, however, without a consoling effect.
It was followed by signal proofs that the national spirit rises
according to the pressure on it. The loss of an important post and of
the brave men surrendered with it inspired everywhere new ardor and
determination. In the States and districts least remote it was no sooner
known than every citizen was ready to fly with his arms at once to
protect his brethren against the blood-thirsty savages let loose by the
enemy on an extensive frontier, and to convert a partial calamity into a
source of invigorated efforts. This patriotic zeal, which it was
necessary rather to limit than excite, has embodied an ample force from
the States of Kentucky and Ohio and from parts of Pennsylvania and
Virginia. It is placed, with the addition of a few regulars, under the
command of Brigadier-General Harrison, who possesses the entire
confidence of his fellow soldiers, among whom are citizens, some of them
volunteers in the ranks, not less distinguished by their political
stations than by their personal merits. The greater portion of this
force is proceeding in relieving an important frontier post, and in
several incidental operations against hostile tribes of savages,
rendered indispensable by the subserviency into which they had been
seduced by the enemy--a seduction the more cruel as it could not fail to
impose a necessity of precautionary severities against those who yielded
to it.

At a recent date an attack was made on a post of the enemy near Niagara
by a detachment of the regular and other forces under the command of
Major-General Van Rensselaer, of the militia of the State of New York.
The attack, it appears, was ordered in compliance with the ardor of the
troops, who executed it with distinguished gallantry, and were for a
time victorious; but not receiving the expected support, they were
compelled to yield to reenforcements of British regulars and savages.
Our loss has been considerable, and is deeply to be lamented. That of
the enemy, less ascertained, will be the more felt, as it includes among
the killed the commanding general, who was also the governor of the
Province, and was sustained by veteran troops from unexperienced
soldiers, who must daily improve in the duties of the field.

Our expectation of gaining the command of the Lakes by the invasion of
Canada from Detroit having been disappointed, measures were instantly
taken to provide on them a naval force superior to that of the enemy.
From the talents and activity of the officer charged with this object
everything that can be done may be expected. Should the present season
not admit of complete success, the progress made will insure for the
next a naval ascendancy where it is essential to our permanent peace
with and control over the savages.

Among the incidents to the measures of the war I am constrained to
advert to the refusal of the governors of Maine and Connecticut to
furnish the required detachments of militia toward the defense of the
maritime frontier. The refusal was founded on a novel and unfortunate
exposition of the provisions of the Constitution relating to the
militia. The correspondences which will be laid before you contain the
requisite information on the subject. It is obvious that if the
authority of the United States to call into service and command the
militia for the public defense can be thus frustrated, even in a state
of declared war and of course under apprehensions of invasion preceding
war, they are not one nation for the purpose most of all requiring it,
and that the public safety may have no other resource than in those
large and permanent military establishments which are forbidden by the
principles of our free government, and against the necessity of which
the militia were meant to be a constitutional bulwark.

On the coasts and on the ocean the war has been as successful as
circumstances inseparable from its early stages could promise. Our
public ships and private cruisers, by their activity, and, where there
was occasion, by their intrepidity, have made the enemy sensible of the
difference between a reciprocity of captures and the long confinement of
them to their side. Our trade, with little exception, has safely reached
our ports, having been much favored in it by the course pursued by a
squadron of our frigates under the command of Commodore Rodgers, and in
the instance in which skill and bravery were more particularly tried
with those of the enemy the American flag had an auspicious triumph. The
frigate Constitution, commanded by Captain Hull, after a close and short
engagement completely disabled and captured a British frigate, gaining
for that officer and all on board a praise which can not be too
liberally bestowed, not merely for the victory actually achieved, but
for that prompt and cool exertion of commanding talents which, giving to
courage its highest character, and to the force applied its full effect,
proved that more could have been done in a contest requiring more.

Anxious to abridge the evils from which a state of war can not be
exempt, I lost no time after it was declared in conveying to the British
Government the terms on which its progress might be arrested, without
awaiting the delays of a formal and final pacification, and our charge
d'affaires at London was at the same time authorized to agree to an
armistice founded upon them. These terms required that the orders in
council should be repealed as they affected the United States, without a
revival of blockades violating acknowledged rules, and that there should
be an immediate discharge of American sea men from British ships, and a
stop to impressment from American ships, with an understanding that an
exclusion of the sea men of each nation from the ships of the other
should be stipulated, and that the armistice should be improved into a
definitive and comprehensive adjustment of depending controversies.

Although a repeal of the orders susceptible of explanations meeting the
views of this Government had taken place before this pacific advance was
communicated to that of Great Britain, the advance was declined from an
avowed repugnance to a suspension of the practice of impressments during
the armistice, and without any intimation that the arrangement proposed
with regard to sea men would be accepted. Whether the subsequent
communications from this Government, affording an occasion for
reconsidering the subject on the part of Great Britain, will be viewed
in a more favorable light or received in a more accommodating spirit
remains to be known. It would be unwise to relax our measures in any
respect on a presumption of such a result.

The documents from the Department of State which relate to this subject
will give a view also of the propositions for an armistice which have
been received here, one of them from the authorities at Halifax and in
Canada, the other from the British Government itself through Admiral
Warren, and of the grounds on which neither of them could be accepted.

Our affairs with France retain the posture which they held at my last
communications to you. Notwithstanding the authorized expectations of an
early as well as favorable issue to the discussions on foot, these have
been procrastinated to the latest date. The only intervening occurrence
meriting attention is the promulgation of a French decree purporting to
be a definitive repeal of the Berlin and Milan decrees. This proceeding,
although made the ground of the repeal of the British orders in council,
is rendered by the time and manner of it liable to many objections.

The final communications from our special minister to Denmark afford
further proofs of the good effects of his mission, and of the amicable
disposition of the Danish Government. From Russia we have the
satisfaction to receive assurances of continued friendship, and that it
will not be affected by the rupture between the United States and Great
Britain. Sweden also professes sentiments favorable to the subsisting
harmony.

With the Barbary Powers, excepting that of Algiers, our affairs remain
on the ordinary footing. The consul-general residing with that Regency
has suddenly and without cause been banished, together with all the
American citizens found there. Whether this was the transitory effect of
capricious despotism or the first act of predetermined hostility is not
ascertained. Precautions were taken by the consul on the latter
supposition.

The Indian tribes not under foreign instigations remain at peace, and
receive the civilizing attentions which have proved so beneficial to
them.

With a view to that vigorous prosecution of the war to which our
national faculties are adequate, the attention of Congress will be
particularly drawn to the insufficiency of existing provisions for
filling up the military establishment. Such is the happy condition of
our country, arising from the facility of subsistence and the high wages
for every species of occupation, that notwithstanding the augmented
inducements provided at the last session, a partial success only has
attended the recruiting service. The deficiency has been necessarily
supplied during the campaign by other than regular troops, with all the
inconveniences and expense incident to them. The remedy lies in
establishing more favorably for the private soldier the proportion
between his recompense and the term of his enlistment, and it is a
subject which can not too soon or too seriously be taken into
consideration.

The same insufficiency has been experienced in the provisions for
volunteers made by an act of the last session. The recompense for the
service required in this case is still less attractive than in the
other, and although patriotism alone has sent into the field some
valuable corps of that description, those alone who can afford the
sacrifice can be reasonably expected to yield to that impulse.

It will merit consideration also whether as auxiliary to the security of
our frontiers corps may not be advantageously organized with a
restriction of their services to particular districts convenient to
them, and whether the local and occasional services of mariners and
others in the sea port towns under a similar organization would not be a
provident addition to the means of their defense.

I recommend a provision for an increase of the general officers of the
Army, the deficiency of which has been illustrated by the number and
distance of separate commands which the course of the war and the
advantage of the service have required.

And I can not press too strongly on the earliest attention of the
Legislature the importance of the reorganization of the staff
establishment with a view to render more distinct and definite the
relations and responsibilities of its several departments. That there is
room for improvements which will materially promote both economy and
success in what appertains to the Army and the war is equally inculcated
by the examples of other countries and by the experience of our own.

A revision of the militia laws for the purpose of rendering them more
systematic and better adapting them to emergencies of the war is at this
time particularly desirable.

Of the additional ships authorized to be fitted for service, two will be
shortly ready to sail, a third is under repair, and delay will be
avoided in the repair of the residue. Of the appropriations for the
purchase of materials for ship building, the greater part has been
applied to that object and the purchase will be continued with the
balance.

The enterprising spirit which has characterized our naval force and its
success, both in restraining insults and depredations on our coasts and
in reprisals on the enemy, will not fail to recommend an enlargement of
it.

There being reason to believe that the act prohibiting the acceptance of
British licenses is not a sufficient guard against the use of them, for
purposes favorable to the interests and views of the enemy, further
provisions on that subject are highly important. Nor is it less so that
penal enactments should be provided for cases of corrupt and perfidious
intercourse with the enemy, not amounting to treason nor yet embraced by
any statutory provisions.

A considerable number of American vessels which were in England when the
revocation of the orders in council took place were laden with British
manufactures under an erroneous impression that the non-importation act
would immediately cease to operate, and have arrived in the United
States. It did not appear proper to exercise on unforeseen cases of such
magnitude the powers vested in the Treasury Department to mitigate
forfeitures without previously affording to Congress an opportunity of
making on the subject such provision as they may think proper. In their
decision they will doubtless equally consult what is due to equitable
considerations and to the public interest.

The receipts into the Treasury during the year ending on the 30th of
September last have exceeded $16.5 millions, which have been sufficient
to defray all the demands on the Treasury to that day, including a
necessary reimbursement of near $3 millions of the principal of the
public debt. In these receipts is included a sum of near $5.85 millions,
received on account of the loans authorized by the acts of the last
session; the whole sum actually obtained on loan amounts to $11
millions, the residue of which, being receivable subsequent to the 30th
of September last, will, together with the current revenue, enable us to
defray all the expenses of this year.

The duties on the late unexpected importations of British manufactures
will render the revenue of the ensuing year more productive than could
have been anticipated.

The situation of our country, fellow citizens, is not without its
difficulties, though it abounds in animating considerations, of which
the view here presented of our pecuniary resources is an example. With
more than one nation we have serious and unsettled controversies, and
with one, powerful in the means and habits of war, we are at war. The
spirit and strength of the nation are nevertheless equal to the support
of all its rights, and to carry it through all its trials. They can be
met in that confidence.

Above all, we have the inestimable consolation of knowing that the war
in which we are actually engaged is a war neither of ambition nor of
vain glory; that it is waged not in violation of the rights of others,
but in the maintenance of our own; that it was preceded by a patience
without example under wrongs accumulating without end, and that it was
finally not declared until every hope of averting it was extinguished by
the transfer of the British scepter into new hands clinging to former
councils, and until declarations were reiterated to the last hour,
through the British envoy here, that the hostile edicts against our
commercial rights and our maritime independence would not be revoked;
nay, that they could not be revoked without violating the obligations of
Great Britain to other powers, as well as to her own interests.

To have shrunk under such circumstances from manly resistance would have
been a degradation blasting our best and proudest hopes; it would have
struck us from the high rank where the virtuous struggles of our fathers
had placed us, and have betrayed the magnificent legacy which we hold in
trust for future generations. It would have acknowledged that on the
element which forms three-fourths of the globe we inhabit, and where all
independent nations have equal and common rights, the American people
were not an independent people, but colonists and vassals.

It was at this moment and with such an alternative that war was chosen.
The nation felt the necessity of it, and called for it. The appeal was
accordingly made, in a just cause, to the Just and All-powerful Being
who holds in His hand the chain of events and the destiny of nations.

It remains only that, faithful to ourselves, entangled in no connections
with the views of other powers, and ever ready to accept peace from the
hand of justice, we prosecute the war with united counsels and with the
ample faculties of the nation until peace be so obtained and as the only
means under the Divine blessing of speedily obtaining it.

***

State of the Union Address
James Madison
December 7, 1813

Fellow-Citizens of the Senate and House of Representatives:

In meeting you at the present interesting conjuncture it would have been
highly satisfactory if I could have communicated a favorable result to
the mission charged with negotiations for restoring peace. It was a just
expectation, from the respect due to the distinguished Sovereign who had
invited them by his offer of mediation, from the readiness with which
the invitation was accepted on the part of the United States, and from
the pledge to be found in an act of their Legislature for the liberality
which their plenipotentiaries would carry into the negotiations, that no
time would be lost by the British Government in embracing the experiment
for hastening a stop to the effusion of blood. A prompt and cordial
acceptance of the mediation on that side was the less to be doubted, as
it was of a nature not to submit rights or pretensions on either side to
the decision of an umpire, but to afford merely an opportunity,
honorable and desirable to both, for discussing and, if possible,
adjusting them for the interest of both.

The British cabinet, either mistaking our desire of peace for a dread of
British power or misled by other fallacious calculations, has
disappointed this reasonable anticipation. No communications from our
envoys having reached us, no information on the subject has been
received from that source; but it is known that the mediation was
declined in the first instance, and there is no evidence,
notwithstanding the lapse of time, that a change of disposition in the
British councils has taken place or is to be expected.

Under such circumstances a nation proud of its rights and conscious of
its strength has no choice but an exertion of the one in support of the
other.

To this determination the best encouragement is derived from the success
with which it has pleased the Almighty to bless our arms both on the
land and on the water.

Whilst proofs have been continued of the enterprise and skill of our
cruisers, public and private, on the ocean, and a trophy gained in the
capture of a British by an American vessel of war, after an action
giving celebrity to the name of the victorious commander, the great
inland waters on which the enemy were also to be encountered have
presented achievements of our naval arms as brilliant in their character
as they have been important in their consequences.

On Lake Erie, the squadron under command of Captain Perry having met the
British squadron of superior force, a sanguinary conflict ended in the
capture of the whole. The conduct of that officer, adroit as it was
daring, and which was so well seconded by his comrades, justly entitles
them to the admiration and gratitude of their country, and will fill an
early page in its naval annals with a victory never surpassed in luster,
however much it may have been in magnitude.

On Lake Ontario the caution of the British commander, favored by
contingencies, frustrated the efforts of the American commander to bring
on a decisive action. Captain Chauncey was able, however, to establish
an ascendancy on that important theater, and to prove by the manner in
which he effected everything possible that opportunities only were
wanted for a more shining display of his own talents and the gallantry
of those under his command.

The success on Lake Erie having opened a passage to the territory of the
enemy, the officer commanding the Northwestern army transferred the war
thither, and rapidly pursuing the hostile troops, fleeing with their
savage associates, forced a general action, which quickly terminated in
the capture of the British and dispersion of the savage force.

This result is signally honorable to Major-General Harrison, by whose
military talents it was prepared; to Colonel Johnson and his mounted
volunteers, whose impetuous onset gave a decisive blow to the ranks of
the enemy, and to the spirit of the volunteer militia, equally brave and
patriotic, who bore an interesting part in the scene; more especially to
the chief magistrate of Kentucky, at the head of them, whose heroism
signalized in the war which established the independence of his country,
sought at an advanced age a share in hardships and battles for
maintaining its rights and its safely.

The effect of these successes has been to rescue the inhabitants of
Michigan from their oppressions, aggravated by gross infractions of the
capitulation which subjected them to a foreign power; to alienate the
savages of numerous tribes from the enemy, by whom they were
disappointed and abandoned, and to relieve an extensive region of
country from a merciless warfare which desolated its frontiers and
imposed on its citizens the most harassing services.

In consequences of our naval superiority on Lake Ontario and the
opportunity afforded by it for concentrating our forces by water,
operations which had been provisionally planned were set on foot against
the possessions of the enemy on the St. Lawrence. Such, however, was the
delay produced in the first instance by adverse weather of unusual
violence and continuance and such the circumstances attending the final
movements of the army, that the prospect, at one time so favorable, was
not realized.

The cruelty of the enemy in enlisting the savages into a war with a
nation desirous of mutual emulation in mitigating its calamities has not
been confined to any one quarter. Wherever they could be turned against
us no exertions to effect it have been spared. On our southwestern
border the Creek tribes, who, yielding to our persevering endeavors,
were gradually acquiring more civilized habits, became the unfortunate
victims of seduction. A war in that quarter has been the consequence,
infuriated by a bloody fanaticism recently propagated among them. It was
necessary to crush such a war before it could spread among the
contiguous tribes and before it could favor enterprises of the enemy
into that vicinity. With this view a force was called into the service
of the United States from the States of Georgia and Tennessee, which,
with the nearest regular troops and other corps from the Massachussets
Territory, might not only chastise the savages into present peace but
make a lasting impression on their fears.

The progress of the expedition, as far as is yet known, corresponds with
the martial zeal with which it was espoused, and the best hopes of a
satisfactory issue are authorized by the complete success with which a
well-planned enterprise was executed against a body of hostile savages
by a detachment of the volunteer militia of Tennessee, under the gallant
command of General Coffee, and by a still more important victory over a
larger body of them, gained under the immediate command of Major-General
Jackson, an officer equally distinguished for his patriotism and his
military talents.

The systematic perseverance of the enemy in courting the aid of the
savages in all quarters had the natural effect of kindling their
ordinary propensity to war into a passion, which, even among those best
disposed toward the United States, was ready, if not employed on our
side, to be turned against us. A departure from our protracted
forbearance to accept the services tendered by them has thus been forced
upon us. But in yielding to it the retaliation has been mitigated as
much as possible, both in its extent and in its character, stopping far
short of the example of the enemy, who owe the advantages they have
occasionally gained in battle chiefly to the number of their savage
associates, and who have not controlled them either from their usual
practice of indiscriminate massacre on defenseless inhabitants or from
scenes of carnage without a parallel on prisoners to the British arms,
guarded by all the laws of humanity and of honorable war. For these
enormities the enemy are equally responsible, whether with the power to
prevent them they want the will or with the knowledge of a want of power
they still avail themselves of such instruments.

In other respects the enemy are pursuing a course which threatens
consequences most afflicting to humanity.

A standing law of Great Britain naturalizes, as is well known, all
aliens complying with conditions limited to a shorter period than those
required by the United States, and naturalized subjects are in war
employed by her Government in common with native subjects. In a
contiguous British Province regulations promulgated since the
commencement of the war compel citizens of the United States being there
under certain circumstances to bear arms, whilst of the native emigrants
from the United States, who compose much of the population of the
Province, a number have actually borne arms against the United States
within their limits, some of whom, after having done so, have become
prisoners of war, and are now in our possession. The British commander
in that Province, nevertheless, with the sanction, as appears, of his
Government, thought proper to select from American prisoners of war and
send to Great Britain for trial as criminals a number of individuals who
had emigrated from the British dominions long prior to the state of war
between the two nations, who had incorporated themselves into our
political society in the modes recognized by the law and the practice of
Great Britain, and who were made prisoners of war under the banners of
their adopted country, fighting for its rights and its safety.

The protection due to these citizens requiring an effectual
interposition in their behalf, a like number of British prisoners of war
were put into confinement, with a notification that they would
experience whatever violence might be committed on the American
prisoners of war sent to Great Britain.

It was hoped that this necessary consequence of the step unadvisedly
taken on the part of Great Britain would have led her Government to
reflect on the inconsistencies of its conduct, and that a sympathy with
the British, if not with the American, sufferers would have arrested the
cruel career opened by its example.

This was unhappily not the case. In violation both of consistency and of
humanity, American officers and non-commissioned officers in double the
number of the British soldiers confined here were ordered into close
confinement, with formal notice that in the event of a retaliation for
the death which might be inflicted on the prisoners of war sent to Great
Britain for trial the officers so confined would be put to death also.
It was notified at the same time that the commanders of the British
fleets and armies on our coasts are instructed in the same event to
proceed with a destructive severity against our towns and their
inhabitants.

That no doubt might be left with the enemy of our adherence to the
retaliatory resort imposed on us, a correspondent number of British
officers, prisoners of war in our hands, were immediately put into close
confinement to abide the fate of those confined by the enemy, and the
British Government was apprised of the determination of this Government
to retaliate any other proceedings against us contrary to the legitimate
modes of warfare.

It is fortunate for the United States that they have it in their power
to meet the enemy in this deplorable contest as it is honorable to them
that they do not join in it but under the most imperious obligations,
and with the humane purpose of effectuating a return to the established
usages of war.

The views of the French Government on the subjects which have been so
long committed to negotiation have received no elucidation since the
close of your late session. The minister plenipotentiary of the United
States at Paris had not been enabled by proper opportunities to press
the objects of his mission as prescribed by his instructions.

The militia being always to be regarded as the great bulwark of defense
and security for free states, and the Constitution having wisely
committed to the national authority a use of that force as the best
provision against an unsafe military establishment, as well as a
resource peculiarly adapted to a country having the extent and the
exposure of the United States, I recommend to Congress a revision of the
militia laws for the purpose of securing more effectually the services
of all detachments called into the employment and placed under the
Government of the United States.

It will deserve the consideration of Congress also whether among other
improvements in the militia laws justice does not require a regulation,
under due precautions, for defraying the expense incident to the first
assembling as well as the subsequent movements of detachments called
into the national service.

To give to our vessels of war, public and private, the requisite
advantage in their cruises, it is of much importance that they should
have, both for themselves and their prizes, the use of the ports and
markets of friendly powers. With this view, I recommend to Congress the
expediency of such legal provisions as may supply the defects or remove
the doubts of the Executive authority, to allow to the cruisers of other
powers at war with enemies of the United States such use of the American
ports as may correspond with the privileges allowed by such powers to
American cruisers.

During the year ending on the 30th of September last the receipts into
the Treasury have exceeded $37.5 millions, of which near $24 millions
were the produce of loans. After meeting all demands for the public
service there remained in the Treasury on that day near $7 millions.
Under the authority contained in the act of the 2nd of August last for
borrowing $7.5 millions, that sum has been obtained on terms more
favorable to the United States than those of the preceding loans made
during the present year. Further sums to a considerable amount will be
necessary to be obtained in the same way during the ensuing year, and
from the increased capital of the country, from the fidelity with which
the public engagements have been kept and the public credit maintained,
it may be expected on good grounds that the necessary pecuniary supplies
will not be wanting.

The expenses of the current year, from the multiplied operations falling
within it, have necessarily been extensive; but on a just estimate of
the campaign in which the mass of them has been incurred the cost will
not be found disproportionate to the advantages which have been gained.
The campaign has, indeed, in its latter stages in one quarter been less
favorable than was expected, but in addition to the importance of our
naval success the progress of the campaign has been filled with
incidents highly honorable to the American arms.

The attacks of the enemy on Craney Island, on Fort Meigs, on Sacketts
Harbor, and on Sandusky have been vigorously and successfully repulsed;
nor have they in any case succeeded on either frontier excepting when
directed against the peaceable dwellings of individuals or villages
unprepared or undefended.

On the other hand, the movements of the American Army have been followed
by the reduction of York, and of Forts George, Erie, and Malden; by the
recovery of Detroit and the extinction of the Indian war in the West,
and by the occupancy or command of a large portion of Upper Canada.
Battles have also been fought on the borders of the St. Lawrence, which,
though not accomplishing their entire objects, reflect honor on the
discipline and prowess of our soldiery, the best auguries of eventual
victory. In the same scale are to be placed the late successes in the
South over one of the most powerful, which had become one of the most
hostile also, of the Indian tribes.

It would be improper to close this communication without expressing a
thankfulness in which all ought to unite for the abundance; for the
preservation of our internal tranquillity, and the stability of our free
institutions, and, above all, for the light of divine truth and the
protection of every man's conscience in the enjoyment of it. And
although among our blessings we can not number an exemption from the
evils of war, yet these will never be regarded as the greatest of evils
by the friends of liberty and of the rights of nations. Our country has
before preferred them to the degraded condition which was the
alternative when the sword was drawn in the cause which gave birth to
our national independence, and none who contemplate the magnitude and
feel the value of that glorious event will shrink from a struggle to
maintain the high and happy ground on which it placed the American
people.

With all good citizens the justice and necessity of resisting wrongs and
usurpations no longer to be borne will sufficiently outweigh the
privations and sacrifices inseparable from a state of war. But it is a
reflection, moreover, peculiarly consoling, that, whilst wars are
generally aggravated by their baneful effects on the internal
improvements and permanent prosperity of the nations engaged in them,
such is the favored situation of the United States that the calamities
of the contest into which they have been compelled to enter are
mitigated by improvements and advantages of which the contest itself is
the source.

If the war has increased the interruptions of our commerce, it has at
the same time cherished and multiplied our manufactures so as to make us
independent of all other countries for the more essential branches for
which we ought to be dependent on none, and is even rapidly giving them
an extent which will create additional staples in our future intercourse
with foreign markets.

If much treasure has been expended, no inconsiderable portion of it has
been applied to objects durable in their value and necessary to our
permanent safety.

If the war has exposed us to increased spoliations on the ocean and to
predatory incursions on the land, it has developed the national means of
retaliating the former and of providing protection against the latter,
demonstrating to all that every blow aimed at our maritime independence
is an impulse accelerating the growth of our maritime power.

By diffusing through the mass of the nation the elements of military
discipline and instruction; by augmenting and distributing warlike
preparations applicable to future use; by evincing the zeal and valor
with which they will be employed and the cheerfulness with which every
necessary burden will be borne, a greater respect for our rights and a
longer duration of our future peace are promised than could be expected
without these proofs of the national character and resources.

The war has proved moreover that our free Government, like other free
governments, though slow in its early movements, acquires in its
progress a force proportioned to its freedom, and that the union of
these States, the guardian of the freedom and safety of all and of each,
is strengthened by every occasion that puts it to the test.

In fine, the war, with all its vicissitudes, is illustrating the
capacity and the destiny of the United States to be a great, a
flourishing, and a powerful nation, worthy of the friendship which it is
disposed to cultivate with all others, and authorized by its own example
to require from all an observance of the laws of justice and
reciprocity. Beyond these their claims have never extended, and in
contending for these we behold a subject for our congratulations in the
daily testimonies of increasing harmony throughout the nation, and may
humbly repose our trust in the smiles of Heaven on so righteous a cause.

***

State of the Union Address
James Madison
September 20, 1814

Fellow-Citizens of the Senate and House of Representatives:

Notwithstanding the early day which had been fixed for your session of
the present year, I was induced to call you together still sooner, as
well that any inadequacy in the existing provisions for the wants of the
Treasury might be supplied as that no delay might happen in providing
for the result of the negotiations on foot with Great Britain, whether
it should require arrangements adapted to a return of peace or further
and more effective provisions for prosecuting the war.

That result is not yet known. If, on the one hand, the repeal of the
orders in council and the general pacification in Europe, which withdrew
the occasion on which impressments from American vessels were practiced,
suggest expectations that peace and amity may be reestablished, we are
compelled, on the other hand, by the refusal of the British Government
to accept the offered mediation of the Emperor of Russia, by the delays
in giving effect to its own proposal of a direct negotiation, and, above
all, by the principles and manner in which the war is now avowedly
carried on to infer that a spirit of hostility is indulged more violent
than ever against the rights and prosperity of this country.

This increased violence is best explained by the two important
circumstances that the great contest in Europe for an equilibrium
guaranteeing all its States against the ambition of any has been closed
without any check on the over-bearing power of Great Britain on the
ocean, and it has left in her hands disposable armaments, with which,
forgetting the difficulties of a remote war with a free people, and
yielding to the intoxication of success, with the example of a great
victim to it before her eyes, she cherishes hopes of still further
aggrandizing a power already formidable in its abuses to the
tranquillity of the civilized and commercial world.

But whatever may have inspired the enemy with these more violent
purposes, the public councils of a nation more able to maintain than it
was to require its independence, and with a devotion to it rendered more
ardently by the experience of its blessings, can never deliberate but on
the means most effectual for defeating the extravagant views or
unwarrantable passions with which alone the war can now be pursued
against us.

In the events of the present campaign the enemy, with all his augmented
means and wanton use of them, has little ground for exultation, unless
he can feel it in the success of his recent enterprises against this
metropolis and the neighboring town of Alexandria, from both of which
his retreats were as precipitate as his attempts were bold and
fortunate. In his other incursions on our Atlantic frontier his
progress, often checked and chastised by the martial spirit of the
neighboring citizens, has had more effect in distressing individuals and
in dishonoring his arms than in promoting any object of legitimate
warfare; and in the two instances mentioned, however deeply to be
regretted on our part, he will find in his transient success, which
interrupted for a moment only the ordinary business at the seat of
Government, no compensation for the loss of character with the world by
his violations of private property and by his destruction of public
edifices protected as monuments of the arts by the laws of civilized
warfare.

On our side we can appeal to a series of achievements which have given
new luster to the American arms. Besides the brilliant incidents in the
minor operations of the campaign, the splendid victories gained on the
Canadian side of the Niagara by the American forces under Major-General
Brown and Brigadiers Scott and Gaines have gained for these heroes and
their emulating companions the most unfading laurels, and, having
triumphantly tested the progressive discipline of the American soldiery,
have taught the enemy that the longer he protracts his hostile efforts
the more certain and decisive will be his final discomfiture.

On our southern border victory has continued also to follow the American
standard. The bold and skillful operations of Major-General Jackson,
conducting troops drawn from the militia of the States least distant,
particularly Tennessee, have subdued the principal tribes of hostile
savages, and, by establishing a peace with them, preceded by recent and
exemplary chastisement, has best guarded against the mischief of their
cooperations with the British enterprises which may be planned against
that quarter of our country. Important tribes of Indians on our
northwestern frontier have also acceded to stipulations which bind them
to the interests of the United States and to consider our enemy as
theirs also.

In the recent attempt of the enemy on the city of Baltimore, defended by
militia and volunteers, aided by a small body of regulars and sea men,
he was received with a spirit which produced a rapid retreat to his
ships, whilst concurrent attack by a large fleet was successfully
resisted by the steady and well-directed fire of the fort and batteries
opposed to it.

In another recent attack by a powerful force on our troops at
Plattsburg, of which regulars made a part only, the enemy, after a
perseverance for many hours, was finally compelled to seek safety in a
hasty retreat, with our gallant bands pressing upon them.

On the Lakes, so much contested throughout the war, the great exertions
for the command made on our part have been well repaid. On Lake Ontario
our squadron is now and has been for some time in a condition to confine
that of the enemy to his own port, and to favor the operations of our
land forces on that frontier.

A part of the squadron on Lake Erie has been extended into Lake Huron,
and has produced the advantage of displaying our command on that lake
also. One object of the expedition was the reduction of Mackinaw, which
followed with the loss of a few brave men, among whom was an officer
justly distinguished for his gallant exploits. The expedition, ably
conducted by both the land and the naval commanders, was otherwise
highly valuable in its effects.

On Lake Champlain, where our superiority had for some time been
undisputed, the British squadron lately came into action with the
American, commanded by Captain Macdonough. It issued in the capture of
the whole of the enemy's ships. The best praise for this officer and his
intrepid comrades is in the likeness of his triumph to the illustrious
victory which immortalized another officer and established at a critical
moment our command of another lake.

On the ocean the pride of our naval arms had been amply supported. A
second frigate has indeed fallen into the hands of the enemy, but the
loss is hidden in the blaze of heroism with which she was defended.
Captain Porter, who commanded her, and whose previous career had been
distinguished by daring enterprise and by fertility of genius,
maintained a sanguinary contest against two ships, one of them superior
to his own, and under other severe disadvantages, 'til humanity tore
down the colors which valor had nailed to the mast. This officer and his
brave comrades have added much to the rising glory of the American flag,
and have merited all the effusions of gratitude which their country is
ever ready to bestow on the champions of its rights and of its safety.

Two smaller vessels of war have also become prizes to the enemy, but by
a superiority of force which sufficiently vindicates the reputation of
their commanders, whilst two others, one commanded by Captain
Warrington, the other by Captain Blakely, have captured British ships of
the same class with a gallantry and good conduct which entitle them and
their companions to a just share in the praise of their country.

In spite of the naval force of the enemy accumulated on our coasts, our
private cruisers also have not ceased to annoy his commerce and to bring
their rich prizes into our ports, contributing thus, with other proofs,
to demonstrate the incompetency and illegality of a blockade the
proclamation of which is made the pretext for vexing and discouraging
the commerce of neutral powers with the United States.

To meet the extended and diversified warfare adopted by the enemy, great
bodies of militia have been taken into service for the public defense,
and great expenses incurred. That the defense everywhere may be both
more convenient and more economical, Congress will see the necessity of
immediate measures for filling the ranks of the Regular Army and of
enlarging the provision for special corps, mounted and unmounted, to be
engaged for longer periods of service than are due from the militia. I
earnestly renew, at the same time, a recommendation of such changes in
the system of the militia as, by classing and disciplining for the most
prompt and active service the portions most capable of it, will give to
that great resource for the public safety all the requisite energy and
efficiency.

The moneys received into the Treasury during the nine months ending on
the 30th day of June last amounted to $32 millions, of which near $11
millions were the proceeds of the public revenue and the remainder
derived from loans. The disbursements for public expenditures during the
same period exceeded $34 millions, and left in the Treasury on the first
day of July near $5 millions. The demands during the remainder of the
present year already authorized by Congress and the expenses incident to
an extension of the operations of the war will render it necessary that
large sums should be provided to meet them.

From this view of the national affairs Congress will be urged to take up
without delay as well the subject of pecuniary supplies as that of
military force, and on a scale commensurate with the extent and the
character which the war has assumed. It is not to be disguised that the
situation of our country calls for its greatest efforts.

Our enemy is powerful in men and in money, on the land and on the water.
Availing himself of fortuitous advantages, he is aiming with his
undivided force a deadly blow at our growing prosperity, perhaps at our
national existence. He has avowed his purpose of trampling on the usages
of civilized warfare, and given earnests of it in the plunder and wanton
destruction of private property. In his pride of maritime dominion and
in his thirst of commercial monopoly he strikes with peculiar animosity
at the progress of our navigation and of our manufactures. His barbarous
policy has not even spared those monuments of the arts and models of
taste with which our country had enriched and embellished its infant
metropolis. From such an adversary hostility in its greatest force and
in its worst forms may be looked for.

The American people will face it with the undaunted spirit which in
their revolutionary struggle defeated his unrighteous projects. His
threats and his barbarities, instead of dismay, will kindle in every
bosom an indignation not to be extinguished but in the disaster and
expulsion of such cruel invaders.

In providing the means necessary the National Legislature will not
distrust the heroic and enlightened patriotism of its constituents. They
will cheerfully and proudly bear every burden of every kind which the
safety and honor of the nation demand. We have seen them everywhere
paying their taxes, direct and indirect, with the greatest promptness
and alacrity. We see them rushing with enthusiasm to the scenes where
danger and duty call. In offering their blood they give the surest
pledge that no other tribute will be withheld.

Having forborne to declare war until to other aggressions had been added
the capture of near one thousand American vessels and the impressment of
thousands of American sea faring citizens, and until a final declaration
had been made by the Government of Great Britain that her hostile orders
against our commerce would not be revoked but on conditions as
impossible as unjust, whilst it was known that these orders would not
otherwise cease but with a war which had lasted nearly twenty years, and
which, according to appearances at that time, might last as many more;
having manifested on every occasion and in every proper mode a sincere
desire to arrest the effusion of blood and meet our enemy on the ground
of justice and reconciliation, our beloved country, in still opposing to
his persevering hostility all its energies, with an undiminished
disposition toward peace and friendship on honorable terms, must carry
with it the good wishes of the impartial world and the best hopes of
support from an omnipotent and kind Providence.

***

State of the Union Address
James Madison
December 5, 1815

Fellow-Citizens of the Senate and House of Representatives:

I have the satisfaction on our present meeting of being able to
communicate the successful termination of the war which had been
commenced against the United States by the Regency of Algiers. The
squadron in advance on that service, under Commodore Decatur, lost not a
moment after its arrival in the Mediterranean in seeking the naval force
of the enemy then cruising in that sea, and succeeded in capturing two
of his ships, one of them the principal ship, commanded by the Algerine
admiral. The high character of the American commander was brilliantly
sustained on the occasion which brought his own ship into close action
with that of his adversary, as was the accustomed gallantry of all the
officers and men actually engaged. Having prepared the way by this
demonstration of American skill and prowess, he hastened to the port of
Algiers, where peace was promptly yielded to his victorious force.

In the terms stipulated the rights and honor of the United States were
particularly consulted by a perpetual relinquishment on the part of the
Dey of all pretensions to tribute from them. The impressions which have
thus been made, strengthened as they will have been by subsequent
transactions with the Regencies of Tunis and of Tripoli by the
appearance of the larger force which followed under Commodore
Bainbridge, the chief in command of the expedition, and by the judicious
precautionary arrangements left by him in that quarter, afford a
reasonable prospect of future security for the valuable portion of our
commerce which passes within reach of the Barbary cruisers.

It is another source of satisfaction that the treaty of peace with Great
Britain has been succeeded by a convention on the subject of commerce
concluded by the plenipotentiaries of the two countries. In this result
a disposition is manifested on the part of that nation corresponding
with the disposition of the United States, which it may be hoped will be
improved into liberal arrangements on other subjects on which the
parties have mutual interests, or which might endanger their future
harmony. Congress will decide on the expediency of promoting such a
sequel by giving effect to the measure of confining the American
navigation to American sea men--a measure which, at the same time that
it might have that conciliatory tendency, would have the further
advantage of increasing the independence of our navigation and the
resources for our maritime defense.

In conformity with the articles in the treaty of Ghent relating to the
Indians, as well as with a view to the tranquillity of our western and
northwestern frontiers, measures were taken to establish an immediate
peace with the several tribes who had been engaged in hostilities
against the United States. Such of them as were invited to Detroit
acceded readily to a renewal of the former treaties of friendship. Of
the other tribes who were invited to a station on the Mississippi the
greater number have also accepted the peace offered to them. The
residue, consisting of the more distant tribes or parts of tribes,
remain to be brought over by further explanations, or by such other
means as may be adapted to the dispositions they may finally disclose.

The Indian tribes within and bordering on the southern frontier, whom a
cruel war on their part had compelled us to chastise into peace, have
latterly shown a restlessness which has called for preparatory measures
for repressing it, and for protecting the commissioners engaged in
carrying the terms of the peace into execution.

The execution of the act for fixing the military peace establishment has
been attended with difficulties which even now can only be overcome by
legislative aid. The selection of officers, the payment and discharge of
the troops enlisted for the war, the payment of the retained troops and
their reunion from detached and distant stations, the collection and
security of the public property in the Quartermaster, Commissary, and
Ordnance departments, and the constant medical assistance required in
hospitals and garrisons rendered a complete execution of the act
impracticable on the 1st of May, the period more immediately
contemplated. As soon, however, as circumstances would permit, and as
far as it has been practicable consistently with the public interests,
the reduction of the Army has been accomplished; but the appropriations
for its pay and for other branches of the military service having proved
inadequate, the earliest attention to that subject will be necessary;
and the expediency of continuing upon the peace establishment the staff
officers who have hitherto been provisionally retained is also
recommended to the consideration of Congress.

In the performance of the Executive duty upon this occasion there has
not been wanting a just sensibility to the merits of the American Army
during the late war; but the obvious policy and design in fixing an
efficient military peace establishment did not afford an opportunity to
distinguish the aged and infirm on account of their past services nor
the wounded and disabled on account of their present sufferings.

The extent of the reduction, indeed, unavoidably involved the exclusion
of many meritorious officers of every rank from the service of their
country; and so equal as well as so numerous were the claims to
attention that a decision by the standard of comparative merit could
seldom be attained. Judged, however, in candor by a general standard of
positive merit, the Army Register will, it is believed, do honor to the
establishment, while the case of those officers whose names are not
included in it devolves with the strongest interest upon the legislative
authority for such provisions as shall be deemed the best calculated to
give support and solace to the veteran and the invalid, to display the
beneficence as well as the justice of the Government, and to inspire a
martial zeal for the public service upon every future emergency.

Although the embarrassments arising from the want of an uniform national
currency have not been diminished since the adjournment of Congress,
great satisfaction has been derived in contemplating the revival of the
public credit and the efficiency of the public resources. The receipts
into the Treasury from the various branches of revenue during the nine
months ending on the 30th of September last have been estimated at $12.5
millions; the issues of Treasury notes of every denomination during the
same period amounted to the sum of $14 millions, and there was also
obtained upon loan during the same period a sum of $9 millions, of which
the sum of $6 millions was subscribed in cash and the sum of $3 millions
in Treasury notes.

With these means, added to the sum of $1.5 millions, being the balance
of money in the Treasury on the 1st day of January, there has been paid
between the 1st of January and the 1st of October on account of the
appropriations of the preceding and of the present year (exclusively of
the amount of the Treasury notes subscribed to the loan and of the
amount redeemed in the payment of duties and taxes) the aggregate sum of
$33.5 millions, leaving a balance then in the Treasury estimated at the
sum of $3 millions. Independent, however of the arrearages due for
military services and supplies, it is presumed that a further sum of $5
millions, including the interest on the public debt payable on the 1st
of January next, will be demanded at the Treasury to complete the
expenditures of the present year, and for which the existing ways and
means will sufficiently provide.

The national debt, as it was ascertained on the 1st of October last,
amounted in the whole to the sum of $120 millions, consisting of the
unredeemed balance of the debt contracted before the late war ($39
millions), the amount of the funded debt contracted in consequence of
the war ($64 millions), and the amount of the unfunded and floating
debt, including the various issues of Treasury notes, $17 millions,
which is in gradual course of payment.

There will probably be some addition to the public debt upon the
liquidation of various claims which are depending, and a conciliatory
disposition on the part of Congress may lead honorably and
advantageously to an equitable arrangement of the militia expenses
incurred by the several States without the previous sanction or
authority of the Government of the United States; but when it is
considered that the new as well as the old portion of the debt has been
contracted in the assertion of the national rights and independence, and
when it is recollected that the public expenditures, not being
exclusively bestowed upon subjects of a transient nature, will long be
visible in the number and equipments of the American Navy, in the
military works for the defense of our harbors and our frontiers, and in
the supplies of our arsenals and magazines the amount will bear a
gratifying comparison with the objects which have been attained, as well
as with the resources of the country.

The arrangements of the finances with a view to the receipts and
expenditures of a permanent peace establishment will necessarily enter
into the deliberations of Congress during the present session. It is
true that the improved condition of the public revenue will not only
afford the means of maintaining the faith of the Government with its
creditors inviolate, and of prosecuting successfully the measures of the
most liberal policy, but will also justify an immediate alleviation of
the burdens imposed by the necessities of the war.

It is, however, essential to every modification of the finances that the
benefits of an uniform national currency should be restored to the
community. The absence of the precious metals will, it is believed, be a
temporary evil, but until they can again be rendered the general medium
of exchange it devolves on the wisdom of Congress to provide a
substitute which shall equally engage the confidence and accommodate the
wants of the citizens throughout the Union. If the operation of the
State banks can not produce this result, the probable operation of a
national bank will merit consideration; and if neither of these
expedients be deemed effectual it may become necessary to ascertain the
terms upon which the notes of the Government (no longer required as an
instrument of credit) shall be issued upon motives of general policy as
a common medium of circulation.

Notwithstanding the security for future repose which the United States
ought to find in their love of peace and their constant respect for the
rights of other nations, the character of the times particularly
inculcates the lesson that, whether to prevent or repel danger, we ought
not to be unprepared for it. This consideration will sufficiently
recommend to Congress a liberal provision for the immediate extension
and gradual completion of the works of defense, both fixed and floating,
on our maritime frontier, and an adequate provision for guarding our
inland frontier against dangers to which certain portions of it may
continue to be exposed.

As an improvement in our military establishment, it will deserve the
consideration of Congress whether a corps of invalids might not be so
organized and employed as at once to aid in the support of meritorious
individuals excluded by age or infirmities from the existing
establishment, and to procure to the public the benefit of their
stationary services and of their exemplary discipline.

I recommend also an enlargement of the Military Academy already
established, and the establishment of others in other sections of the
Union; and I can not press too much on the attention of Congress such a
classification and organization of the militia as will most effectually
render it the safeguard of a free state. If experience has shewn in the
recent splendid achievements of militia the value of this resource for
the public defense, it has shewn also the importance of that skill in
the use of arms and that familiarity with the essential rules of
discipline which can not be expected from the regulations now in force.

With this subject is intimately connected the necessity of accommodating
the laws in every respect to the great object of enabling the political
authority of the Union to employ promptly and effectually the physical
power of the Union in the cases designated by the Constitution.

The signal services which have been rendered by our Navy and the
capacities it has developed for successful cooperation in the national
defense will give to that portion of the public force its full value in
the eyes of Congress, at an epoch which calls for the constant vigilance
of all governments. To preserve the ships now in a sound state, to
complete those already contemplated, to provide amply the imperishable
materials for prompt augmentations, and to improve the existing
arrangements into more advantageous establishments for the construction,
the repairs, and the security of vessels of war is dictated by the
soundest policy.

In adjusting the duties on imports to the object of revenue the
influence of the tariff on manufactures will necessarily present itself
for consideration. However wise the theory may be which leaves to the
sagacity and interest of individuals the application of their industry
and resources, there are in this as in other cases exceptions to the
general rule. Besides the condition which the theory itself implies of
reciprocal adoption by other nations, experience teaches that so many
circumstances must concur in introducing and maturing manufacturing
establishments, especially of the more complicated kinds, that a country
may remain long without them, although sufficiently advanced and in some
respects even peculiarly fitted for carrying them on with success. Under
circumstances giving a powerful impulse to manufacturing industry it has
made among us a progress and exhibited an efficiency which justify the
belief that with a protection not more than is due to the enterprising
citizens whose interests are now at stake it will become at an early day
not only safe against occasional competitions from abroad, but a source
of domestic wealth and even of external commerce.

In selecting the branches more especially entitled to the public
patronage a preference is obviously claimed by such as will relieve the
United States from a dependence on foreign supplies, ever subject to
casual failures, for articles necessary for the public defense or
connected with the primary wants of individuals. It will be an
additional recommendation of particular manufactures where the materials
for them are extensively drawn from our agriculture, and consequently
impart and insure to that great fund of national prosperity and
independence an encouragement which can not fail to be rewarded.

Among the means of advancing the public interest the occasion is a
proper one for recalling the attention of Congress to the great
importance of establishing throughout our country the roads and canals
which can best be executed under the national authority. No objects
within the circle of political economy so richly repay the expense
bestowed on them; there are none the utility of which is more
universally ascertained and acknowledged; none that do more honor to the
governments whose wise and enlarged patriotism duly appreciates them.
Nor is there any country which presents a field where nature invites
more the art of man to complete her own work for his accommodation and
benefit.

These considerations are strengthened, moreover, by the political effect
of these facilities for intercommunication in bringing and binding more
closely together the various parts of our extended confederacy. Whilst
the States individually, with a laudable enterprise and emulation, avail
themselves of their local advantages by new roads, by navigable canals,
and by improving the streams susceptible of navigation, the General
Government is the more urged to similar undertakings, requiring a
national jurisdiction and national means, by the prospect of thus
systematically completing so inestimable a work; and it is a happy
reflection that any defect of constitutional authority which may be
encountered can be supplied in a mode which the Constitution itself has
providently pointed out.

The present is a favorable season also for bringing again into view the
establishment of a national seminary of learning within the District of
Columbia, and with means drawn from the property therein, subject to the
authority of the General Government. Such an institution claims the
patronage of Congress as a monument of their solicitude for the
advancement of knowledge, without which the blessings of liberty can not
be fully enjoyed or long preserved; as a model instructive in the
formation of other seminaries; as a nursery of enlightened preceptors,
and as a central resort of youth and genius from every part of their
country, diffusing on their return examples of those national feelings,
those liberal sentiments, and those congenial manners which contribute
cement to our Union and strength to the great political fabric of which
that is the foundation.

In closing this communication I ought not to repress a sensibility, in
which you will unite, to the happy lot of our country and to the
goodness of a superintending Providence, to which we are indebted for
it. Whilst other portions of mankind are laboring under the distresses
of war or struggling with adversity in other forms, the United States
are in the tranquil enjoyment of prosperous and honorable peace. In
reviewing the scenes through which it has been attained we can rejoice
in the proofs given that our political institutions, founded in human
rights and framed for their preservation, are equal to the severest
trials of war, as well adapted to the ordinary periods of repose.

As fruits of this experience and of the reputation acquired by the
American arms on the land and on the water, the nation finds itself
possessed of a growing respect abroad and of a just confidence in
itself, which are among the best pledges for its peaceful career. Under
other aspects of our country the strongest features of its flourishing
condition are seen in a population rapidly increasing on a territory as
productive as it is extensive; in a general industry and fertile
ingenuity which find their ample rewards, and in an affluent revenue
which admits a reduction of the public burdens without withdrawing the
means of sustaining the public credit, of gradually discharging the
public debt, of providing for the necessary defensive and precautionary
establishments, and of patronizing in every authorized mode undertakings
conducive to the aggregate wealth and individual comfort of our
citizens.

It remains for the guardians of the public welfare to persevere in that
justice and good will toward other nations which invite a return of
these sentiments toward the United States; to cherish institutions which
guarantee their safety and their liberties, civil and religious; and to
combine with a liberal system of foreign commerce an improvement of the
national advantages and a protection and extension of the independent
resources of our highly favored and happy country.

In all measures having such objects my faithful cooperation will be
afforded.

***

State of the Union Address
James Madison
December 3, 1816

Fellow-Citizens of the Senate and House of Representatives:

In reviewing the present state of our country, our attention cannot be
withheld from the effect produced by peculiar seasons which have very
generally impaired the annual gifts of the earth and threatened scarcity
in particular districts. Such, however, is the variety of soils, of
climates, and of products within our extensive limits that the aggregate
resources for subsistence are more than sufficient for the aggregate
wants. And as far as an economy of consumption, more than usual, may be
necessary, our thankfulness is due to Providence for what is far more
than a compensation, in the remarkable health which has distinguished
the present year.

Amidst the advantages which have succeeded the peace of Europe, and that
of the United States with Great Britain, in a general invigoration of
industry among us and in the extension of our commerce, the value of
which is more and more disclosing itself to commercial nations, it is to
be regretted that a depression is experienced by particular branches of
our manufactures and by a portion of our navigation. As the first
proceeds in an essential degree from an excess of imported merchandise,
which carries a check in its own tendency, the cause in its present
extent can not be very long in duration. The evil will not, however, be
viewed by Congress without a recollection that manufacturing
establishments, if suffered to sink too low or languish too long, may
not revive after the causes shall have ceased, and that in the
vicissitudes of human affairs situations may recur in which a dependence
on foreign sources for indispensable supplies may be among the most
serious embarrassments.

The depressed state of our navigation is to be ascribed in a material
degree to its exclusion from the colonial ports of the nation most
extensively connected with us in commerce, and from the indirect
operation of that exclusion.

Previous to the late convention at London between the United States and
Great Britain the relative state of the navigation laws of the two
countries, growing out of the treaty of 1794, had given to the British
navigation a material advantage over the American in the intercourse
between the American ports and British ports in Europe. The convention
of London equalized the laws of the two countries relating to those
ports, leaving the intercourse between our ports and the ports of the
British colonies subject, as before, to the respective regulations of
the parties. The British Government enforcing now regulations which
prohibit a trade between its colonies and the United States in American
vessels, whilst they permit a trade in British vessels, the American
navigation loses accordingly, and the loss is augmented by the advantage
which is given to the British competition over the American in the
navigation between our ports and British ports in Europe by the
circuitous voyages enjoyed by the one and not enjoyed by the other.

The reasonableness of the rule of reciprocity applied to one branch of
the commercial intercourse has been pressed on our part as equally
applicable to both branches; but it is ascertained that the British
cabinet declines all negotiation on the subject, with a disavowal,
however, of any disposition to view in an unfriendly light whatever
countervailing regulations the United States may oppose to the
regulations of which they complain. The wisdom of the Legislature will
decide on the course which, under these circumstances, is prescribed by
a joint regard to the amicable relations between the two nations and to
the just interests of the United States.

I have the satisfaction to state, generally, that we remain in amity
with foreign powers.

An occurrence has indeed taken place in the Gulf of Mexico which, if
sanctioned by the Spanish Government, may make an exception as to that
power. According to the report of our naval commander on that station,
one of our public armed vessels was attacked by an over-powering force
under a Spanish commander, and the American flag, with the officers and
crew, insulted in a manner calling for prompt reparation. This has been
demanded. In the mean time a frigate and a smaller vessel of war have
been ordered into that Gulf for the protection of our commerce. It would
be improper to omit that the representative of His Catholic Majesty in
the United States lost no time in giving the strongest assurances that
no hostile order could have emanated from his Government, and that it
will be as ready to do as to expect whatever the nature of the case and
the friendly relations of the two countries shall be found to require.

The posture of our affairs with Algiers at the present moment is not
known. The Dey, drawing pretexts from circumstances for which the United
States were not answerable, addressed a letter to this Government
declaring the treaty last concluded with him to have been annulled by
our violation of it, and presenting as the alternative war or a renewal
of the former treaty, which stipulated, among other things, an annual
tribute. The answer, with an explicit declaration that the United States
preferred war to tribute, required his recognition and observance of the
treaty last made, which abolishes tribute and the slavery of our
captured citizens. The result of the answer has not been received.
Should he renew his warfare on our commerce, we rely on the protection
it will find in our naval force actually in the Mediterranean.

With the other Barbary States our affairs have undergone no change.

The Indian tribes within our limits appear also disposed to remain at
peace. From several of them purchases of lands have been made
particularly favorable to the wishes and security of our frontier
settlements, as well as to the general interests of the nation. In some
instances the titles, though not supported by due proof, and clashing
those of one tribe with the claims of another, have been extinguished by
double purchases, the benevolent policy of the United States preferring
the augmented expense to the hazard of doing injustice or to the
enforcement of justice against a feeble and untutored people by means
involving or threatening an effusion of blood.

I am happy to add that the tranquillity which has been restored among
the tribes themselves, as well as between them and our own population,
will favor the resumption of the work of civilization which had made an
encouraging progress among some tribes, and that the facility is
increasing for extending that divided and individual ownership, which
exists now in movable property only, to the soil itself, and of thus
establishing in the culture and improvement of it the true foundation
for a transit from the habits of the savage to the arts and comforts of
social life.

As a subject of the highest importance to the national welfare, I must
again earnestly recommend to the consideration of Congress a
reorganization of the militia on a plan which will form it into classes
according to the periods of life more or less adapted to military
services. An efficient militia is authorized and contemplated by the
Constitution and required by the spirit and safety of free government.
The present organization of our militia is universally regarded as less
efficient than it ought to be made, and no organization can be better
calculated to give to it its due force than a classification which will
assign the foremost place in the defense of the country to that portion
of its citizens whose activity and animation best enable them to rally
to its standard. Besides the consideration that a time of peace is the
time when the change can be made with most convenience and equity, it
will now be aided by the experience of a recent war in which the militia
bore so interesting a part.

Congress will call to mind that no adequate provision has yet been made
for the uniformity of weights and measures also contemplated by the
Constitution. The great utility of a standard fixed in its nature and
founded on the easy rule of decimal proportions is sufficiently obvious.
It led the Government at an early stage to preparatory steps for
introducing it, and a completion of the work will be a just title to the
public gratitude.

The importance which I have attached to the establishment of a
university within this District on a scale and for objects worthy of the
American nation induces me to renew my recommendation of it to the
favorable consideration of Congress. And I particularly invite again
their attention to the expediency of exercising their existing powers,
and, where necessary, of resorting to the prescribed mode of enlarging
them, in order to effectuate a comprehensive system of roads and canals,
such as will have the effect of drawing more closely together every part
of our country by promoting intercourse and improvements and by
increasing the share of every part in the common stock of national
prosperity.

Occurrences having taken place which shew that the statutory provisions
for the dispensation of criminal justice are deficient in relation both
to places and to persons under the exclusive cognizance of the national
authority, an amendment of the law embracing such cases will merit the
earliest attention of the Legislature. It will be a seasonable occasion
also for inquiring how far legislative interposition may be further
requisite in providing penalties for offenses designated in the
Constitution or in the statutes, and to which either no penalties are
annexed or none with sufficient certainty. And I submit to the wisdom of
Congress whether a more enlarged revisal of the criminal code be not
expedient for the purpose of mitigating in certain cases penalties which
were adopted into it antecedent to experiment and examples which justify
and recommend a more lenient policy.

The United States, having been the first to abolish within the extent of
their authority the transportation of the natives of Africa into
slavery, by prohibiting the introduction of slaves and by punishing
their citizens participating in the traffic, can not but be gratified at
the progress made by concurrent efforts of other nations toward a
general suppression of so great an evil. They must feel at the same time
the greater solicitude to give the fullest efficacy to their own
regulations. With that view, the interposition of Congress appears to be
required by the violations and evasions which it is suggested are
chargeable on unworthy citizens who mingle in the slave trade under
foreign flags and with foreign ports, and by collusive importations of
slaves into the United States through adjoining ports and territories. I
present the subject to Congress with a full assurance of their
disposition to apply all the remedy which can be afforded by an
amendment of the law. The regulations which were intended to guard
against abuses of a kindred character in the trade between the several
States ought also to be rendered more effectual for their humane object.

To these recommendations I add, for the consideration of Congress, the
expediency of a remodification of the judiciary establishment, and of an
additional department in the executive branch of the Government.

The first is called for by the accruing business which necessarily
swells the duties of the Federal courts, and by the great and widening
space within which justice is to be dispensed by them. The time seems to
have arrived which claims for members of the Supreme Court a relief from
itinerary fatigues, incompatible as well with the age which a portion of
them will always have attained as with the researches and preparations
which are due to their stations and to the juridical reputation of their
country. And considerations equally cogent require a more convenient
organization of the subordinate tribunals, which may be accomplished
without an objectionable increase of the number or expense of the
judges.

The extent and variety of executive business also accumulating with the
progress of our country and its growing population call for an
additional department, to be charged with duties now over-burdening
other departments and with such as have not been annexed to any
department.

The course of experience recommends, as another improvement in the
executive establishment, that the provision for the station of
Attorney-General, whose residence at the seat of Government, official
connections with it, and the management of the public business before
the judiciary preclude an extensive participation in professional
emoluments, be made more adequate to his services and his
relinquishments, and that, with a view to his reasonable accommodation
and to a proper depository of his official opinions and proceedings,
there be included in the provision the usual appurtenances to a public
office.

In directing the legislative attention to the state of the finances it
is a subject of great gratification to find that even within the short
period which has elapsed since the return of peace the revenue has far
exceeded all the current demands upon the Treasury, and that under any
probable diminution of its future annual products which the vicissitudes
of commerce may occasion it will afford an ample fund for the effectual
and early extinguishment of the public debt. It has been estimated that
during the year 1816 the actual receipts of revenue at the Treasury,
including the balance at the commencement of the year, and excluding the
proceeds of loans and Treasury notes, will amount to about the sum of
$47 millions; that during the same year the actual payments at the
Treasury, including the payment of the arrearages of the War Department
as well as the payment of a considerable excess beyond the annual
appropriations, will amount to about the sum of $38 millions, and that
consequently at the close of the year there will be a surplus in the
Treasury of about the sum of $9 millions.

The operations of the Treasury continued to be obstructed by
difficulties arising from the condition of the national currency, but
they have nevertheless been effectual to a beneficial extent in the
reduction of the public debt and the establishment of the public credit.
The floating debt of Treasury notes and temporary loans will soon be
entirely discharged. The aggregate of the funded debt, composed of debts
incurred during the wars of 1776 and 1812, has been estimated with
reference to the first of January next at a sum not exceeding $110
millions. The ordinary annual expenses of the Government for the
maintenance of all its institutions, civil, military, and naval, have
been estimated at a sum greater than $20 millions, and the permanent
revenue to be derived from all the existing sources has been estimated
at a sum of $25 millions.

Upon this general view of the subject it is obvious that there is only
wanting to the fiscal prosperity of the Government the restoration of an
uniform medium of exchange. The resources and the faith of the nation,
displayed in the system which Congress has established, insure respect
and confidence both at home and abroad. The local accumulations of the
revenue have already enabled the Treasury to meet the public engagements
in the local currency of most of the States, and it is expected that the
same cause will produce the same effect throughout the Union; but for
the interests of the community at large, as well as for the purposes of
the Treasury, it is essential that the nation should possess a currency
of equal value, credit, and use wherever it may circulate. The
Constitution has intrusted Congress exclusively with the power of
creating and regulating a currency of that description, and the measures
which were taken during the last session in execution of the power give
every promise of success. The Bank of the United States has been
organized under auspices the most favorable, and can not fail to be an
important auxiliary to those measures.

For a more enlarged view of the public finances, with a view of the
measures pursued by the Treasury Department previous to the resignation
of the late Secretary, I transmit an extract from the last report of
that officer. Congress will perceive in it ample proofs of the solid
foundation on which the financial prosperity of the nation rests, and
will do justice to the distinguished ability and successful exertions
with which the duties of the Department were executed during a period
remarkable for its difficulties and its peculiar perplexities.

The period of my retiring from the public service being at little
distance, I shall find no occasion more proper than the present for
expressing to my fellow citizens my deep sense of the continued
confidence and kind support which I have received from them. My grateful
recollection of these distinguished marks of their favorable regard can
never cease, and with the consciousness that, if I have not served my
country with greater ability, I have served it with a sincere devotion
will accompany me as a source of unfailing gratification.

Happily, I shall carry with me from the public theater other sources,
which those who love their country most will best appreciate. I shall
behold it blessed with tranquillity and prosperity at home and with
peace and respect abroad. I can indulge the proud reflection that the
American people have reached in safety and success their 40th year as an
independent nation; that for nearly an entire generation they have had
experience of their present Constitution, the off-spring of their
undisturbed deliberations and of their free choice; that they have found
it to bear the trials of adverse as well as prosperous circumstances; to
contain in its combination of the federate and elective principles a
reconcilement of public strength with individual liberty, of national
power for the defense of national rights with a security against wars of
injustice, of ambition, and vain-glory in the fundamental provision
which subjects all questions of war to the will of the nation itself,
which is to pay its costs and feel its calamities. Nor is it less a
peculiar felicity of this Constitution, so dear to us all, that it is
found to be capable, without losing its vital energies, of expanding
itself over a spacious territory with the increase and expansion of the
community for whose benefit it was established.

And may I not be allowed to add to this gratifying spectacle that I
shall read in the character of the American people, in their devotion to
true liberty and to the Constitution which is its palladium, sure
presages that the destined career of my country will exhibit a
Government pursuing the public good as its sole object, and regulating
its means by the great principles consecrated in its charter and by
those moral principles to which they are so well allied; a Government
which watches over the purity of elections, the freedom of speech and of
the press, the trial by jury, and the equal interdict against
encroachments and compacts between religion and the state; which
maintains inviolably the maxims of public faith, the security of persons
and property, and encourages in every authorized mode the general
diffusion of knowledge which guarantees to public liberty its permanency
and to those who possess the blessing the true enjoyment of it; a
Government which avoids intrusions on the internal repose of other
nations, and repels them from its own; which does justice to all nations
with a readiness equal to the firmness with which it requires justice
from them; and which, whilst it refines its domestic code from every
ingredient not congenial with the precepts of an enlightened age and the
sentiments of a virtuous people, seeks by appeals to reason and by its
liberal examples to infuse into the law which governs the civilized
world a spirit which may diminish the frequency or circumscribe the
calamities of war, and meliorate the social and beneficent relations of
peace; a Government, in a word, whose conduct within and without may
bespeak the most noble of ambitions-- that of promoting peace on earth
and good will to man.

These contemplations, sweetening the remnant of my days, will animate my
prayers for the happiness of my beloved country, and a perpetuity of the
institutions under which it is enjoyed.

***

State of the Union Address
James Monroe
December 12, 1817

Fellow-Citizens of the Senate and House of Representatives:

At no period of our political existence had we so much cause to
felicitate ourselves at the prosperous and happy condition of our
country. The abundant fruits of the earth have filled it with plenty. An
extensive and profitable commerce has greatly augmented our revenue. The
public credit has attained an extraordinary elevation. Our preparations
for defense in case of future wars, from which, by the experience of all
nations, we ought not to expect to be exempted, are advancing under a
well-digested system with all the dispatch which so important a work
will admit. Our free Government, founded on the interest and affections
of the people, has gained and is daily gaining strength. Local
jealousies are rapidly yielding to more generous, enlarged, and
enlightened views of national policy. For advantages so numerous and
highly important it is our duty to unite in grateful acknowledgements to
that Omnipotent Being from whom they are derived, and in unceasing
prayer that He will endow us with virtue and strength to maintain and
hand them down in their utmost purity to our latest posterity.

I have the satisfaction to inform you that an arrangement which had been
commenced by my predecessor with the British Government for the
reduction of the naval force by Great Britain and the United States on
the Lakes has been concluded, by which it is provided that neither party
shall keep in service on Lake Champlain more than one vessel, on Lake
Ontario more than one, and on Lake Erie and the upper lakes more than
two, to be armed each with one cannon only, and that all the other armed
vessels of both parties, of which an exact list is interchanged, shall
be dismantled. It is also agreed that the force retained shall be
restricted in its duty to the internal purposes of each party, and that
the arrangement shall remain in force until six months shall have
expired after notice given by one of the parties to the other of its
desire that it should terminate. By this arrangement useless expense on
both sides and, what is of still greater importance, the danger of
collision between armed vessels in those inland waters, which was great,
is prevented.

I have the satisfaction also to state that the commissioners under the
fourth article of the treaty of Ghent, to whom it was referred to decide
to which party the several islands in the bay of Passamaquoddy belonged
under the treaty of 1783, have agreed in a report, by which all the
islands in the possession of each party before the late war have been
decreed to it. The commissioners acting under the other articles of the
treaty of Ghent for the settlement of boundaries have also been engaged
in the discharge of their respective duties, but have not yet completed
them.

The difference which arose between the two Governments under that treaty
respecting the right of the US to take and cure fish on the coast of the
British provinces north of our limits, which had been secured by the
treaty of 1783, is still in negotiation. The proposition made by this
Government to extend to the colonies of Great Britain the principle of
the convention of London, by which the commerce between the ports of the
United States and British ports in Europe had been placed on a footing
of equality, has been declined by the British Government. This subject
having been thus amicably discussed between the two Governments, and it
appearing that the British Government is unwilling to depart from its
present regulations, it remains for Congress to decide whether they will
make any other regulations in consequence thereof for the protection and
improvement of our navigation.

The negotiation with Spain for spoliations on our commerce and the
settlement of boundaries remains essentially in the state it held by the
communications that were made to Congress by my predecessor. It has been
evidently the policy of the Spanish Government to keep the negotiation
suspended, and in this the United States have acquiesced, from an
amicable disposition toward Spain and in the expectation that her
Government would, from a sense of justice, finally accede to such an
arrangement as would be equal between the parties. A disposition has
been lately shown by the Spanish Government to move in the negotiation,
which has been met by this Government, and should the conciliatory and
friendly policy which has invariably guided our councils be
reciprocated, a just and satisfactory arrangement may be expected. It is
proper, however, to remark that no proposition has yet been made from
which such a result can be presumed.

It was anticipated at an early stage that the contest between Spain and
the colonies would become highly interesting to the United States. It
was natural that our citizens should sympathize in events which affected
their neighbors. It seemed probable also that the prosecution of the
conflict along our coast and in contiguous countries would occasionally
interrupt our commerce and otherwise affect the persons and property of
our citizens. These anticipations have been realized. Such injuries have
been received from persons acting under authority of both the parties,
and for which redress has in most instances been withheld.

Through every stage of the conflict the United States have maintained an
impartial neutrality, giving aid to neither of the parties in men,
money, ships, or munitions of war. They have regarded the contest not in
the light of an ordinary insurrection or rebellion, but as a civil war
between parties nearly equal, having as to neutral powers equal rights.
Our ports have been open to both, and every article the fruit of our
soil or of the industry of our citizens which either was permitted to
take has been equally free to the other. Should the colonies establish
their independence, it is proper now to state that this Government
neither seeks nor would accept from them any advantage in commerce or
otherwise which will not be equally open to all other nations. The
colonies will in that event become independent states, free from any
obligation to or connection with us which it may not then be their
interest to form on the basis of a fair reciprocity.

In the summer of the present year an expedition was set on foot against
East Florida by persons claiming to act under the authority of some of
the colonies, who took possession of Amelia Island, at the mouth of the
St. Marys River, near the boundary of the State of Georgia. As this
Province lies eastward of the Mississippi, and is bounded by the United
States and the ocean on every side, and has been a subject of
negotiation with the Government of Spain as an indemnity for losses by
spoliation or in exchange for territory of equal value westward of the
Mississippi, a fact well known to the world, it excited surprise that
any countenance should be given to this measure by any of the colonies.

As it would be difficult to reconcile it with the friendly relations
existing between the United States and the colonies, a doubt was
entertained whether it had been authorized by them, or any of them. This
doubt has gained strength by the circumstances which have unfolded
themselves in the prosecution of the enterprise, which have marked it as
a mere private, unauthorized adventure. Projected and commenced with an
incompetent force, reliance seems to have been placed on what might be
drawn, in defiance of our laws, from within our limits; and of late, as
their resources have failed, it has assumed a more marked character of
unfriendliness to us, the island being made a channel for the illicit
introduction of slaves from Africa into the United States, an asylum for
fugitive slaves from the neighboring States, and a port for smuggling of
every kind.

A similar establishment was made at an earlier period by persons of the
same description in the Gulf of Mexico at a place called Galvezton,
within the limits of the United States, as we contend, under the cession
of Louisiana. This enterprise has been marked in a more signal manner by
all the objectionable circumstances which characterized the other, and
more particularly by the equipment of privateers which have annoyed our
commerce, and by smuggling. These establishments, if ever sanctioned by
any authority whatever, which is not believed, have abused their trust
and forfeited all claim to consideration. A just regard for the rights
and interests of the United States required that they should be
suppressed, and orders have been accordingly issued to that effect. The
imperious considerations which produced this measure will be explained
to the parties whom it may in any degree concern.

To obtain correct information on every subject in which the United
States are interested; to inspire just sentiments in all persons in
authority, on either side, of our friendly disposition so far as it may
comport with an impartial neutrality, and to secure proper respect to
our commerce in every port and from every flag, it has been thought
proper to send a ship of war with three distinguished citizens along the
southern coast with these purposes. With the existing authorities, with
those in the possession of and exercising the sovereignty, must the
communication be held; from them alone can redress for past injuries
committed by persons acting under them be obtained; by them alone can
the commission of the like in future be prevented.

Our relations with the other powers of Europe have experienced no
essential change since the last session. In our intercourse with each
due attention continues to be paid to the protection of our commerce,
and to every other object in which the United States are interested. A
strong hope is entertained that, by adhering to the maxims of a just, a
candid, and friendly policy, we may long preserve amicable relations
with all the powers of Europe on conditions advantageous and honorable
to our country.

With the Barbary States and the Indian tribes our pacific relations have
been preserved.

In calling your attention to the internal concerns of our country the
view which they exhibit is peculiarly gratifying. The payments which
have been made into the Treasury show the very productive state of the
public revenue. After satisfying the appropriations made by law for the
support of the civil Government and of the military and naval
establishments, embracing suitable provision for fortifications and for
the gradual increase of the Navy, paying the interest of the public
debt, and extinguishing more than $18 millions of the principal, within
the present year, it is estimated that a balance of more than $6
millions will remain in the Treasury on the first day of January
applicable to the current service of the ensuing year.

The payments into the Treasury during the year 1818 on account of
imposts and tonnage, resulting principally from duties which have
accrued in the present year, may be fairly estimated at $20 millions;
the internal revenues at $2.5 millions; the public lands at $1.5
millions; bank dividends and incidental receipts at $500,000; making in
the whole $24.5 millions.

The annual permanent expenditure for the support of the civil Government
and of the Army and Navy, as now established by law, amounts to $11.8
millions, and for the sinking fund to $10 millions, making in the whole
$21.8 millions, leaving an annual excess of revenue beyond the
expenditure of $2.7 millions, exclusive of the balance estimated to be
in the Treasury on the first day of January, 1818.

In the present state of the Treasury the whole of the Louisiana debt may
be redeemed in the year 1819, after which, if the public debt continues
as it now is, above par, there will be annually about $5 millions of the
sinking fund unexpended until the year 1825, when the loan of 1812 and
the stock created by funding Treasury notes will be redeemable.

It is also estimated that the Mississippi stock will be discharged
during the year 1819 from the proceeds of the public lands assigned to
that object, after which the receipts from those lands will annually add
to the public revenue the sum of $1.5 millions, making the permanent
annual revenue amount to $26 millions, and leaving an annual excess of
revenue after the year 1819 beyond the permanent authorized expenditure
of more than $4 millions.

By the last returns to the Department of War the militia force of the
several States may be estimated at 800,000 men--infantry, artillery, and
cavalry. Great part of this force is armed, and measures are taken to
arm the whole. An improvement in the organization and discipline of the
militia is one of the great objects which claims the unremitted
attention of Congress.

The regular force amounts nearly to the number required by law, and is
stationed along the Atlantic and inland frontiers.

Of the naval force it has been necessary to maintain strong squadrons in
the Mediterranean and in the Gulf of Mexico.

From several of the Indian tribes inhabiting the country bordering on
Lake Erie purchases have been made of lands on conditions very favorable
to the United States, and, as it is presumed, not less so to the tribes
themselves.

By these purchases the Indian title, with moderate reservations, has
been extinguished to the whole of the land within the limits of the
State of Ohio, and to a part of that in the Michigan Territory and of
the State of Indiana. From the Cherokee tribe a tract has been purchased
in the State of Georgia and an arrangement made by which, in exchange
for lands beyond the Mississippi, a great part, if not the whole, of the
land belonging to that tribe eastward of that river in the States of
North Carolina, Georgia, and Tennessee, and in the Alabama Territory
will soon be acquired. By these acquisitions, and others that may
reasonably be expected soon to follow, we shall be enabled to extend our
settlements from the inhabited parts of the State of Ohio along Lake
Erie into the Michigan Territory, and to connect our settlements by
degrees through the State of Indiana and the Illinois Territory to that
of Missouri. A similar and equally advantageous effect will soon be
produced to the south, through the whole extent of the States and
territory which border on the waters emptying into the Mississippi and
the Mobile.

In this progress, which the rights of nature demand and nothing can
prevent, marking a growth rapid and gigantic, it is our duty to make new
efforts for the preservation, improvement, and civilization of the
native inhabitants. The hunter state can exist only in the vast
uncultivated desert. It yields to the more dense and compact form and
greater force of civilized population; and of right it ought to yield,
for the earth was given to mankind to support the greatest number of
which it is capable, and no tribe or people have a right to withhold
from the wants of others more than is necessary for their own support
and comfort.

It is gratifying to know that the reservations of land made by the
treaties with the tribes on Lake Erie were made with a view to
individual ownership among them and to the cultivation of the soil by
all, and that an annual stipend has been pledged to supply their other
wants. It will merit the consideration of Congress whether other
provision not stipulated by treaty ought to be made for these tribes and
for the advancement of the liberal and humane policy of the United
States toward all the tribes within our limits, and more particularly
for their improvement in the arts of civilized life.

Among the advantages incident to these purchases, and to those which
have preceded, the security which may thereby be afforded to our inland
frontiers is peculiarly important. With a strong barrier, consisting of
our own people, thus planted on the Lakes, the Mississippi, and the
Mobile, with the protection to be derived from the regular force, Indian
hostilities, if they do not altogether cease, will henceforth lose their
terror. Fortifications in those quarters to any extent will not be
necessary, and the expense of attending them may be saved. A people
accustomed to the use of firearms only, as the Indian tribes are, will
shun even moderate works which are defended by cannon. Great
fortifications will therefore be requisite only in future along the
coast and at some points in the interior connected with it. On these
will the safety of our towns and the commerce of our great rivers, from
the Bay of Fundy to the Mississippi, depend. On these, therefore, should
the utmost attention, skill, and labor be bestowed.

A considerable and rapid augmentation in the value of all the public
lands, proceeding from these and other obvious cases, may henceforward
be expected. The difficulties attending early emigrations will be
dissipated even in the most remote parts. Several new States have been
admitted into our Union to the west and south, and Territorial
governments, happily organized, established over every other portion in
which there is vacant land for sale. In terminating Indian hostilities,
as must soon be done, in a formidable shape at least, the emigration,
which has heretofore been great, will probably increase, and the demand
for land and the augmentation in its value be in like proportion.

The great increase of our population throughout the Union will alone
produce an important effect, and in no quarter will it be so sensibly
felt as in those in contemplation. The public lands are a public stock,
which ought to be disposed of to the best advantage for the nation. The
nation should therefore derive the profit proceeding from the continual
rise in their value. Every encouragement should be given to the
emigrants consistent with a fair competition between them, but that
competition should operate in the first sale to the advantage of the
nation rather than of individuals.

Great capitalists will derive the benefit incident to their superior
wealth under any mode of sale which may be adopted, but if, looking
forward to the rise in the value of the public lands, they should have
the opportunity of amassing at a low price vast bodies in their hands,
the profit will accrue to them and not to the public. They would also
have the power in that degree to control the emigration and settlement
in such a manner as their opinion of their respective interests might
dictate. I submit this subject to the consideration of Congress, that
such further provision may be made in the sale of the public lands, with
a view to the public interest, should any be deemed expedient, as in
their judgment may be best adapted to the object.

When we consider the vast extent of territory within the United States,
the great amount and value of its productions, the connection of its
parts, and other circumstances on which their prosperity and happiness
depend, we can not fail to entertain a high sense of the advantage to be
derived from the facility which may be afforded in the intercourse
between them by means of good roads and canals. Never did a country of
such vast extent offer equal inducements to improvements of this kind,
nor ever were consequences of such magnitude involved in them. As this
subject was acted on by Congress at the last session, and there may be a
disposition to revive it at the present, I have brought it into view for
the purpose of communicating my sentiments on a very important
circumstance connected with it with that freedom and candor which a
regard for the public interest and a proper respect for Congress
require.

A difference of opinion has existed from the first formation of our
Constitution to the present time among our most enlightened and virtuous
citizens respecting the right of Congress to establish such a system of
improvement. Taking into view the trust with which I am now honored, it
would be improper after what has passed that this discussion should be
revived with an uncertainty of my opinion respecting the right.
Disregarding early impressions I have bestowed on the subject all the
deliberation which its great importance and a just sense of my duty
required, and the result is a settled conviction in my mind that
Congress do not possess the right. It is not contained in any of the
specified powers granted to Congress, nor can I consider it incidental
to or a necessary means, viewed on the most liberal scale, for carrying
into effect any of the powers which are specifically granted.

In communicating this result I can not resist the obligation which I
feel to suggest to Congress the propriety of recommending to the States
the adoption of an amendment to the Constitution which shall give to
Congress the right in question. In cases of doubtful construction,
especially of such vital interest, it comports with the nature and
origin of our institutions, and will contribute much to preserve them,
to apply to our constituents for an explicit grant of the power. We may
confidently rely that if it appears to their satisfaction that the power
is necessary, it will always be granted.

In this case I am happy to observe that experience has afforded the most
ample proof of its utility, and that the benign spirit of conciliation
and harmony which now manifests itself throughout our Union promises to
such a recommendation the most prompt and favorable result. I think
proper to suggest also, in case this measure is adopted, that it be
recommended to the States to include in the amendment sought a right in
Congress to institute likewise seminaries of learning, for the
all-important purpose of diffusing knowledge among our fellow-citizens
throughout the United States.

Our manufactories will require the continued attention of Congress. The
capital employed in them is considerable, and the knowledge acquired in
the machinery and fabric of all the most useful manufactures is of great
value. Their preservation, which depends on due encouragement, is
connected with the high interests of the nation.

Although the progress of the public buildings has been as favorable as
circumstances have permitted, it is to be regretted that the Capitol is
not yet in a state to receive you. There is good cause to presume that
the two wings, the only parts as yet commenced, will be prepared for
that purpose at the next session. The time seems now to have arrived
when this subject may be deemed worthy the attention of Congress on a
scale adequate to national purposes. The completion of the middle
building will be necessary to the convenient accommodation of Congress,
of the committees, and various offices belonging to it.

It is evident that the other public buildings are altogether
insufficient for the accommodation of the several Executive Departments,
some of whom are much crowded and even subjected to the necessity of
obtaining it in private buildings at some distance from the head of the
Department, and with inconvenience to the management of the public
business.

Most nations have taken an interest and a pride in the improvement and
ornament of their metropolis, and none were more conspicuous in that
respect than the ancient republics. The policy which dictated the
establishment of a permanent residence for the National Government and
the spirit in which it was commenced and has been prosecuted show that
such improvement was thought worthy the attention of this nation. Its
central position, between the northern and southern extremes of our
Union, and its approach to the west at the head of a great navigable
river which interlocks with the Western waters, prove the wisdom of the
councils which established it.

Nothing appears to be more reasonable and proper than that convenient
accommodation should be provided on a well-digested plan for the heads
of the several Departments and for the Attorney-General, and it is
believed that the public ground in the city applied to these objects
will be found amply sufficient. I submit this subject to the
consideration of Congress, that such further provision may be made in it
as to them may seem proper.

In contemplating the happy situation of the United States, our attention
is drawn with peculiar interest to the surviving officers and soldiers
of our Revolutionary army, who so eminently contributed by their
services to lay its foundation. Most of those very meritorious citizens
have paid the debt of nature and gone to repose. It is believed that
among the survivors there are some not provided for by existing laws,
who are reduced to indigence and even to real distress. These men have a
claim on the gratitude of their country, and it will do honor to their
country to provide for them. The lapse of a few years more and the
opportunity will be forever lost; indeed, so long already has been the
interval that the number to be benefitted by any provision which may be
made will not be great.

It appearing in a satisfactory manner that the revenue arising from
imposts and tonnage and from the sale of the public lands will be fully
adequate to the support of the civil Government, of the present military
and naval establishments, including the annual augmentation of the
latter to the extent provided for, to the payment of the interest of the
public debt, and to the extinguishment of it at the times authorized,
without the aid of the internal taxes, I consider it my duty to
recommend to Congress their repeal.

To impose taxes when the public exigencies require them is an obligation
of the most sacred character, especially with a free people. The
faithful fulfillment of it is among the highest proofs of their value
and capacity for self-government. To dispense with taxes when it may be
done with perfect safety is equally the duty of their representatives.

In this instance we have the satisfaction to know that they were imposed
when the demand was imperious, and have been sustained with exemplary
fidelity. I have to add that however gratifying it may be to me
regarding the prosperous and happy condition of our country to recommend
the repeal of these taxes at this time, I shall nevertheless be
attentive to events, and, should any future emergency occur, be not less
prompt to suggest such measures and burdens as may then be requisite and
proper.

***

State of the Union Address
James Monroe
November 16, 1818

Fellow-Citizens of the Senate and House of Representatives:

The auspicious circumstances under which you will commence the duties of
the present session will lighten the burdens inseparable from the high
trust committed to you. The fruits of the earth have been unusually
abundant, commerce has flourished, the revenue has exceeded the most
favorable anticipation, and peace and amity are preserved with foreign
nations on conditions just and honorable to our country. For these
inestimable blessings we can not but be grateful to that Providence
which watches over the destiny of nations.

As the term limited for the operation of the commercial convention with
Great Britain will expire early in the month of July next, and it was
deemed important that there should be no interval during which that
portion of our commerce which was provided for by that convention should
not be regulated, either by arrangement between the two Governments or
by the authority of Congress, the minister of the United States at
London was instructed early in the last summer to invite the attention
of the British Government to the subject, with a view to that object. He
was instructed to propose also that the negotiation which it was wished
to open might extend to the general commerce of the two countries, and
to every other interest and unsettled difference between them in the
hope that an arrangement might be made on principles of reciprocal
advantage which might comprehend and provide in a satisfactory manner
for all these high concerns.

I have the satisfaction to state that the proposal was received by the
British Government in the spirit which prompted it, and that a
negotiation has been opened at London embracing all these objects. On
full consideration of the great extent and magnitude of the trust it was
thought proper to commit it to not less than two of our distinguished
citizens, and in consequence the envoy extraordinary and minister
plenipotentiary of the United States at Paris has been associated with
our envoy extraordinary and minister plenipotentiary at London, to both
of whom corresponding instructions have been given, and they are now
engaged in the discharge of its duties. It is proper to add that to
prevent any inconvenience resulting from the delay incident to a
negotiation on so many important subjects it was agreed before entering
on it that the existing convention should be continued for a term not
less than eight years.

Our relations with Spain remain nearly in the state in which they were
at the close of the last session. The convention of 1802, providing for
the adjustment of a certain portion of the claims of our citizens for
injuries sustained by spoliation, and so long suspended by the Spanish
Government, has at length been ratified by it, but no arrangement has
yet been made for the payment of another portion of like claims, not
less extensive or well founded, or for other classes of claims, or for
the settlement of boundaries. These subjects have again been brought
under consideration in both countries, but no agreement has been entered
into respecting them.

In the mean time events have occurred which clearly prove the ill effect
of the policy which that Government has so long pursued on the friendly
relations of the two countries, which it is presumed is at least of as
much importance to Spain as to the United States to maintain. A state of
things has existed in the Floridas the tendency of which has been
obvious to all who have paid the slightest attention to the progress of
affairs in that quarter. Throughout the whole of those Provinces to
which the Spanish title extends the Government of Spain has scarcely
been felt. Its authority has been confined almost exclusively to the
walls of Pensacola and St. Augustine, within which only small garrisons
have been maintained. Adventurers from every country, fugitives from
justice, and absconding slaves have found an asylum there. Several
tribes of Indians, strong in the number of their warriors, remarkable
for their ferocity, and whose settlements extend to our limits, inhabit
those Provinces.

These different hordes of people, connected together, disregarding on
the one side the authority of Spain, and protected on the other by an
imaginary line which separates Florida from the United States, have
violated our laws prohibiting the introduction of slaves, have practiced
various frauds on our revenue, and committed every kind of outrage on
our peaceable citizens which their proximity to us enabled them to
perpetrate.

The invasion of Amelia Island last year by a small band of adventurers,
not exceeding one hundred and fifty in number, who wrested it from the
inconsiderable Spanish force stationed there, and held it several
months, during which a single feeble effort only was made to recover it,
which failed, clearly proves how completely extinct the Spanish
authority had become, as the conduct of those adventurers while in
possession of the island as distinctly shows the pernicious purposes for
which their combination had been formed.

This country had, in fact, become the theater of every species of
lawless adventure. With little population of its own, the Spanish
authority almost extinct, and the colonial governments in a state of
revolution, having no pretension to it, and sufficiently employed in
their own concerns, it was in great measure derelict, and the object of
cupidity to every adventurer. A system of buccaneering was rapidly
organizing over it which menaced in its consequences the lawful commerce
of every nation, and particularly the United States, while it presented
a temptation to every people, on whose seduction its success principally
depended.

In regard to the United States, the pernicious effect of this unlawful
combination was not confined to the ocean; the Indian tribes have
constituted the effective force in Florida. With these tribes these
adventurers had formed at an early period a connection with a view to
avail themselves of that force to promote their own projects of
accumulation and aggrandizement. It is to the interference of some of
these adventurers, in misrepresenting the claims and titles of the
Indians to land and in practicing on their savage propensities, that the
Seminole war is principally to be traced. Men who thus connect
themselves with savage communities and stimulate them to war, which is
always attended on their part with acts of barbarity the most shocking,
deserve to be viewed in a worse light than the savages. They would
certainly have no claim to an immunity from the punishment which,
according to the rules of warfare practiced by the savages, might justly
be inflicted on the savages themselves.

If the embarrassments of Spain prevented her from making an indemnity to
our citizens for so long a time from her treasury for their losses by
spoliation and otherwise, it was always in her power to have provided it
by the cession of this territory. Of this her Government has been
repeatedly apprised, and the cession was the more to have been
anticipated as Spain must have known that in ceding it she would
likewise relieve herself from the important obligation secured by the
treaty of 1795 and all other compromitments respecting it. If the United
States, from consideration of these embarrassments, declined pressing
their claims in a spirit of hostility, the motive ought at least to have
been duly appreciated by the Government of Spain. It is well known to
her Government that other powers have made to the United States an
indemnity for like losses sustained by their citizens at the same epoch.

There is nevertheless a limit beyond which this spirit of amity and
forbearance can in no instance be justified. If it was proper to rely on
amicable negotiation for an indemnity for losses, it would not have been
so to have permitted the inability of Spain to fulfill her engagements
and to sustain her authority in the Floridas to be perverted by foreign
adventurers and savages to purposes so destructive to the lives of our
fellow citizens and the highest interests of the United States.

The right of self defense never ceases. It is among the most sacred, and
alike necessary to nations and to individuals, and whether the attack be
made by Spain herself or by those who abuse her power, its obligation is
not the less strong.

The invaders of Amelia Island had assumed a popular and respected title
under which they might approach and wound us. As their object was
distinctly seen, and the duty imposed on the Executive by an existing
law was profoundly felt, that mask was not permitted to protect them. It
was thought incumbent on the United States to suppress the
establishment, and it was accordingly done. The combination in Florida
for the unlawful purposes stated, the acts perpetrated by that
combination, and, above all, the incitement of the Indians to massacre
our fellow citizens of every age and of both sexes, merited a like
treatment and received it.

In pursuing these savages to an imaginary line in the woods it would
have been the height of folly to have suffered that line to protect
them. Had that been done the war could never cease. Even if the
territory had been exclusively that of Spain and her power complete over
it, we had a right by the law of nations to follow the enemy on it and
to subdue him there. But the territory belonged, in a certain sense at
least, to the savage enemy who inhabited it; the power of Spain had
ceased to exist over it, and protection was sought under her title by
those who had committed on our citizens hostilities which she was bound
by treaty to have prevented, but had not the power to prevent. To have
stopped at that line would have given new encouragement to these savages
and new vigor to the whole combination existing there in the prosecution
of all its pernicious purposes.

In suppressing the establishment at Amelia Island no unfriendliness was
manifested toward Spain, because the post was taken from a force which
had wrested it from her. The measure, it is true, was not adopted in
concert with the Spanish Government or those in authority under it,
because in transactions connected with the war in which Spain and the
colonies are engaged it was thought proper in doing justice to the
United States to maintain a strict impartiality toward both the
belligerent parties without consulting or acting in concert with either.
It gives me pleasure to state that the Governments of Buenos Ayres and
Venezuela, whose names were assumed, have explicitly disclaimed all
participation in those measures, and even the knowledge of them until
communicated by this Government, and have also expressed their
satisfaction that a course of proceedings had been suppressed which if
justly imputable to them would dishonor their cause.

In authorizing Major-General Jackson to enter Florida in pursuit of the
Seminoles care was taken not to encroach on the rights of Spain. I
regret to have to add that in executing this order facts were disclosed
respecting the conduct of the officers of Spain in authority there in
encouraging the war, furnishing munitions of war and other supplies to
carry it on, and in other acts not less marked which evinced their
participation in the hostile purposes of that combination and justified
the confidence with which it inspired the savages that by those officers
they would be protected.

A conduct so incompatible with the friendly relations existing between
the two countries, particularly with the positive obligations of the 5th
article of the treaty of 1795, by which Spain was bound to restrain,
even by force, those savages from acts of hostility against the United
States, could not fail to excite surprise. The commanding general was
convinced that he should fail in his object, that he should in effect
accomplish nothing, if he did not deprive those savages of the resource
on which they had calculated and of the protection on which they had
relied in making the war. As all the documents relating to this
occurrence will be laid before Congress, it is not necessary to enter
into further detail respecting it.

Although the reasons which induced Major-General Jackson to take these
posts were duly appreciated, there was nevertheless no hesitation in
deciding on the course which it became the Government to pursue. As
there was reason to believe that the commanders of these posts had
violated their instructions, there was no disposition to impute to their
Government a conduct so unprovoked and hostile. An order was in
consequence issued to the general in command there to deliver the
posts--Pensacola unconditionally to any person duly authorized to
receive it, and St. Marks, which is in the heart of the Indian country,
on the arrival of a competent force to defend it against those savages
and their associates.

In entering Florida to suppress this combination no idea was entertained
of hostility to Spain, and however justifiable the commanding general
was, in consequence of the misconduct of the Spanish officers, in
entering St. Marks and Pensacola to terminate it by proving to the
savages and their associates that they should not be protected even
there, yet the amicable relations existing between the United States and
Spain could not be altered by that act alone. By ordering the
restitution of the posts those relations were preserved. To a change of
them the power of the Executive is deemed incompetent; it is vested in
Congress only.

By this measure, so promptly taken, due respect was shown to the
Government of Spain. The misconduct of her officers has not been imputed
to her. She was enabled to review with candor her relations with the
United States and her own situation, particularly in respect to the
territory in question, with the dangers inseparable from it, and
regarding the losses we have sustained for which indemnity has been so
long withheld, and the injuries we have suffered through that territory,
and her means of redress, she was likewise enabled to take with honor
the course best calculated to do justice to the United States and to
promote her own welfare.

Copies of the instructions to the commanding general, of his
correspondence with the Secretary of War, explaining his motives and
justifying his conduct, with a copy of the proceedings of the
courts-martial in the trial of Arbuthnot and Ambristie, and of the
correspondence between the Secretary of State and the minister
plenipotentiary of Spain near this Government, and of the minister
plenipotentiary of the United States at Madrid with the Government of
Spain, will be laid before Congress.

The civil war which has so long prevailed between Spain and the
Provinces in South America still continues, without any prospect of its
speedy termination. The information respecting the condition of those
countries which has been collected by the commissioners recently
returned from thence will be laid before Congress in copies of their
reports, with such other information as has been received from other
agents of the United States.

It appears from these communications that the Government at Buenos Ayres
declared itself independent in July, 1816, having previously exercised
the power of an independent Government, though in the name of the King
of Spain, from the year 1810; that the Banda Oriental, Entre Rios, and
Paraguay, with the city of Santa Fee, all of which are also independent,
are unconnected with the present Government of Buenos Ayres; that Chili
has declared itself independent and is closely connected with Buenos
Ayres; that Venezuela has also declared itself independent, and now
maintains the conflict with various success; and that the remaining
parts of South America, except Monte Video and such other portions of
the eastern bank of the La Plata as are held by Portugal, are still in
the possession of Spain or in a certain degree under her influence.

By a circular note addressed by the ministers of Spain to the allied
powers, with whom they are respectively accredited, it appears that the
allies have undertaken to mediate between Spain and the South American
Provinces, and that the manner and extent of their interposition would
be settled by a congress which was to have met at Aix-la-Chapelle in
September last. From the general policy and course of proceeding
observed by the allied powers in regard to this contest it is inferred
that they will confine their interposition to the expression of their
sentiments, abstaining from the application of force. I state this
impression that force will not be applied with the greater satisfaction
because it is a course more consistent with justice and likewise
authorizes a hope that the calamities of the war will be confined to the
parties only, and will be of shorter duration.

From the view taken of this subject, founded on all the information that
we have been able to obtain, there is good cause to be satisfied with
the course heretofore pursued by the United States in regard to this
contest, and to conclude that it is proper to adhere to it, especially
in the present state of affairs.

I have great satisfaction in stating that our relations with France,
Russia, and other powers continue on the most friendly basis.

In our domestic concerns we have ample cause of satisfaction. The
receipts into the Treasury during the three first quarters of the year
have exceeded $17 millions.

After satisfying all the demands which have been made under existing
appropriations, including the final extinction of the old 6% stock and
the redemption of a moiety of the Louisiana debt, it is estimated that
there will remain in the Treasury on the 1st day of January next more
than $2 millions.

It is ascertained that the gross revenue which has accrued from the
customs during the same period amounts to $21 millions, and that the
revenue of the whole year may be estimated at not less than $26
millions. The sale of the public lands during the year has also greatly
exceeded, both in quantity and price, that of any former year, and there
is just reason to expect a progressive improvement in that source of
revenue.

It is gratifying to know that although the annual expenditure has been
increased by the act of the last session of Congress providing for
Revolutionary pensions to an amount about equal to the proceeds of the
internal duties which were then repealed, the revenue for the ensuing
year will be proportionally augmented, and that whilst the public
expenditure will probably remain stationary, each successive year will
add to the national resources by the ordinary increase of our population
and by the gradual development of our latent sources of national
prosperity.

The strict execution of the revenue laws, resulting principally from the
salutary provisions of the act of the 20th of April last amending the
several collection laws, has, it is presumed, secured to domestic
manufactures all the relief that can be derived from the duties which
have been imposed upon foreign merchandise for their protection. Under
the influence of this relief several branches of this important national
interest have assumed greater activity, and although it is hoped that
others will gradually revive and ultimately triumph over every obstacle,
yet the expediency of granting further protection is submitted to your
consideration.

The measures of defense authorized by existing laws have been pursued
with the zeal and activity due to so important an object, and with all
the dispatch practicable in so extensive and great an undertaking. The
survey of our maritime and inland frontiers has been continued, and at
the points where it was decided to erect fortifications the work has
been commenced, and in some instances considerable progress has been
made. In compliance with resolutions of the last session, the Board of
Commissioners were directed to examine in a particular manner the parts
of the coast therein designated and to report their opinion of the most
suitable sites for two naval depots. This work is in a train of
execution. The opinion of the Board on this subject, with a plan of all
the works necessary to a general system of defense so far as it has been
formed, will be laid before Congress in a report from the proper
department as soon as it can be prepared.

In conformity with the appropriations of the last session, treaties have
been formed with the Quapaw tribe of Indians, inhabiting the country on
the Arkansaw, and the Great and Little Osages north of the White River;
with the tribes in the State of Indiana; with the several tribes within
the State of Ohio and the Michigan Territory, and with the Chickasaws,
by which very extensive cessions of territory have been made to the
United States. Negotiations are now depending with the tribes in the
Illinois Territory and with the Choctaws, by which it is expected that
other extensive cessions will be made. I take great interest in stating
that the cessions already made, which are considered so important to the
United States, have been obtained on conditions very satisfactory to the
Indians.

With a view to the security of our inland frontiers, it has been thought
expedient to establish strong posts at the mouth of Yellow Stone River
and at the Mandan village on the Missouri, and at the mouth of St.
Peters on the Mississippi, at no great distance from our northern
boundaries. It can hardly be presumed while such posts are maintained in
the rear of the Indian tribes that they will venture to attack our
peaceable inhabitants. A strong hope is entertained that this measure
will likewise be productive of much good to the tribes themselves,
especially in promoting the great object of their civilization.

Experience has clearly demonstrated that independent savage communities
can not long exist within the limits of a civilized population. The
progress of the latter has almost invariably terminated in the
extinction of the former, especially of the tribes belonging to our
portion of this hemisphere, among whom loftiness of sentiment and
gallantry in action have been conspicuous. To civilize them, and even to
prevent their extinction, it seems to be indispensable that their
independence as communities should cease, and that the control of the
United States over them should be complete and undisputed. The hunter
state will then be more easily abandoned, and recourse will be had to
the acquisition and culture of land and to other pursuits tending to
dissolve the ties which connect them together as a savage community and
to give a new character to every individual. I present this subject to
the consideration of Congress on the presumption that it may be found
expedient and practicable to adopt some benevolent provisions, having
these objects in view, relative to the tribes within our settlements.

It has been necessary during the present year to maintain a strong naval
force in the Mediterranean and in the Gulf of Mexico, and to send some
public ships along the southern coast and to the Pacific Ocean. By these
means amicable relations with the Barbary Powers have been preserved,
our commerce has been protected, and our rights respected. The
augmentation of our Navy is advancing with a steady progress toward the
limit contemplated by law.

I communicate with great satisfaction the accession of another State
(Illinois) to our Union, because I perceive from the proof afforded by
the additions already made the regular progress and sure consummation of
a policy of which history affords no example, and of which the good
effect can not be too highly estimated. By extending our Government on
the principles of our Constitution over the vast territory within our
limits, on the Lakes and the Mississippi and its numerous streams, new
life and vigor are infused into every part of our system. By increasing
the number of the States the confidence of the State governments in
their own security is increased and their jealousy of the National
Government proportionally diminished.

The impracticability of one consolidated Government for this great and
growing nation will be more apparent and will be universally admitted.
Incapable of exercising local authority except for general purposes, the
General Government will no longer be dreaded. In those cases of a local
nature and for all the great purposes for which it was instituted its
authority will be cherished. Each Government will acquire new force and
a greater freedom of action within its proper sphere.

Other inestimable advantages will follow. Our produce will be augmented
to an incalculable amount in articles of the greatest value for domestic
use and foreign commerce. Our navigation will in like degree be
increased, and as the shipping of the Atlantic States will be employed
in the transportation of the vast produce of the Western country, even
those parts of the United States which are most remote from each other
will be further bound together by the strongest ties which mutual
interest can create.

The situation of this District, it is thought, requires the attention of
Congress. By the Constitution the power of legislation is exclusively
vested in the Congress of the United States. In the exercise of this
power, in which the people have no participation, Congress legislate in
all cases directly on the local concerns of the District. As this is a
departure, for a special purpose, from the general principles of our
system, it may merit consideration whether an arrangement better adapted
to the principles of our Government and to the particular interests of
the people may not be devised which will neither infringe the
Constitution nor affect the object which the provision in question was
intended to secure. The growing population, already considerable, and
the increasing business of the District, which it is believed already
interferes with the deliberations of Congress on great national
concerns, furnish additional motives for recommending this subject to
your consideration.

When we view the great blessings with which our country has been
favored, those which we now enjoy, and the means which we possess of
handing them down unimpaired to our latest posterity, our attention is
irresistibly drawn to the source from whence they flow. Let us, then,
unite in offering our most grateful acknowledgments for these blessings
to the Divine Author of All Good.

***

State of the Union Address
James Monroe
December 7, 1819

Fellow-Citizens of the Senate and House of Representatives:

The public buildings being advanced to a stage to afford accommodation
for Congress, I offer you my sincere congratulations on the
recommencement of your duties in the Capitol.

In bringing you to view the incidents most deserving attention which
have occurred since your last session, I regret to have to state that
several of our principal cities have suffered by sickness, that an
unusual drought has prevailed in the Middle and Western States, and that
a derangement has been felt in some of our moneyed institutions which
has proportionably affected their credit. I am happy, however, to have
it in my power to assure you that the health of our cities is now
completely restored; that the produce of the year, though less abundant
than usual, will not only be amply sufficient for home consumption, but
afford a large surplus for the supply of the wants of other nations, and
that the derangement in the circulating paper medium, by being left to
those remedies which its obvious causes suggested and the good sense and
virtue of our fellow citizens supplied, has diminished.

Having informed Congress, on the 27th of February last, that a treaty of
amity, settlement, and limits had been concluded in this city between
the United States and Spain, and ratified by the competent authorities
of the former, full confidence was entertained that it would have been
ratified by His Catholic Majesty with equal promptitude and a like
earnest desire to terminate on the conditions of that treaty the
differences which had so long existed between the two countries. Every
view which the subject admitted of was thought to have justified this
conclusion.

Great losses had been sustained by citizens of the United States from
Spanish cruisers more than 20 years before, which had not been
redressed. These losses had been acknowledged and provided for by a
treaty as far back as the year 1802, which, although concluded at
Madrid, was not then ratified by the Government of Spain, nor since,
until the last year, when it was suspended by the late treaty, a more
satisfactory provision to both parties, as was presumed, having been
made for them. Other differences had arisen in this long interval,
affecting their highest interests, which were likewise provided for by
this last treaty.

The treaty itself was formed on great consideration and a thorough
knowledge of all circumstances, the subject matter of every article
having been for years under discussion and repeated references having
been made by the minister of Spain to his Government on the points
respecting which the greatest difference of opinion prevailed. It was
formed by a minister duly authorized for the purpose, who had
represented his Government in the United States and been employed in
this long-protracted negotiation several years, and who, it is not
denied, kept strictly within the letter of his instructions. The faith
of Spain was therefore pledged, under circumstances of peculiar force
and solemnity, for its ratification.

On the part of the United States this treaty was evidently acceded to in
a spirit of conciliation and concession. The indemnity for injuries and
losses so long before sustained, and now again acknowledged and provided
for, was to be paid by them without becoming a charge on the treasury of
Spain. For territory ceded by Spain other territory of great value, to
which our claim was believed to be well founded, was ceded by the United
States, and in a quarter more interesting to her. This cession was
nevertheless received as the means of indemnifying our citizens in a
considerable sum, the presumed amount of their losses.

Other considerations of great weight urged the cession of this territory
by Spain. It was surrounded by the Territories of the United States on
every side except on that of the ocean. Spain had lost her authority
over it, and, falling into the hands of adventurers connected with the
savages, it was made the means of unceasing annoyance and injury to our
Union in many of its most essential interests. By this cession, then,
Spain ceded a territory in reality of no value to her and obtained
concessions of the highest importance by the settlement of long-standing
differences with the United States affecting their respective claims and
limits, and likewise relieved herself from the obligation of a treaty
relating to it which she had failed to fulfill, and also from the
responsibility incident to the most flagrant and pernicious abuses of
her rights where she could not support her authority.

It being known that the treaty was formed under these circumstances, not
a doubt was entertained that His Catholic Majesty would have ratified it
without delay. I regret to have to state that this reasonable
expectation has been disappointed; that the treaty was not ratified
within the time stipulated and has not since been ratified. As it is
important that the nature and character of this unexpected occurrence
should be distinctly understood, I think it my duty to communicate to
you all the facts and circumstances in my possession relating to it.

Anxious to prevent all future disagreement with Spain by giving the most
prompt effect to the treaty which had been thus concluded, and
particularly by the establishment of a Government in Florida which
should preserve order there, the minister of the United States who had
been recently appointed to His Catholic Majesty, and to whom the
ratification by his Government had been committed to be exchanged for
that of Spain, was instructed to transmit the latter to the Department
of State as soon as obtained, by a public ship subjected to his order
for the purpose.

Unexpected delay occurring in the ratification by Spain, he requested to
be informed of the cause. It was stated in reply that the great
importance of the subject, and a desire to obtain explanations on
certain points which were not specified, had produced the delay, and
that an envoy would be dispatched to the United States to obtain such
explanations of this Government. The minister of the United States
offered to give full explanation on any point on which it might be
desired, which proposal was declined. Having communicated this result to
the Department of State in August last, he was instructed,
notwithstanding the disappointment and surprise which it produced, to
inform the Government of Spain that if the treaty should be ratified and
transmitted here at any time before the meeting of Congress it would be
received and have the same effect as if it had been ratified in due
time.

This order was executed, the authorized communication was made to the
Government of Spain, and by its answer, which has just been received, we
are officially made acquainted for the first time with the causes which
have prevented the ratification of the treaty by His Catholic Majesty.
It is alleged by the minister of Spain that his Government had attempted
to alter one of the principal articles of the treaty by a declaration
which the minister of the United States had been ordered to present when
he should deliver the ratification by his Government in exchange for
that of Spain, and of which he gave notice, explanatory of the sense in
which that article was understood. It is further alleged that this
Government had recently tolerated or protected an expedition from the
United States against the Province of Texas. These two imputed acts are
stated as the reasons which have induced His Catholic Majesty to
withhold his ratification from the treaty, to obtain explanations
respecting which it is repeated that an envoy would be forthwith
dispatched to the United States. How far these allegations will justify
the conduct of the Government of Spain will appear on a view of the
following facts and the evidence which supports them:

It will be seen by the documents transmitted herewith that the
declaration mentioned relates to a clause in the 8th article concerning
certain grants of land recently made by His Catholic Majesty in Florida,
which it was understood had conveyed all the lands which until then had
been ungranted; it was the intention of the parties to annul these
latter grants, and that clause was drawn for that express purpose and
for none other. The date of these grants was unknown, but it was
understood to be posterior to that inserted in the article; indeed, it
must be obvious to all that if that provision in the treaty had not the
effect of annulling these grants, it would be altogether nugatory.
Immediately after the treaty was concluded and ratified by this
Government an intimation was received that these grants were of anterior
date to that fixed on by the treaty and that they would not, of course,
be affected by it. The mere possibility of such a case, so inconsistent
with the intention of the parties and the meaning of the article,
induced this Government to demand an explanation on the subject, which
was immediately granted, and which corresponds with this statement.

With regard to the other act alleged, that this Government had tolerated
or protected an expedition against Texas, it is utterly without
foundation. Every discountenance has invariably been given to any such
attempt within the limits of the United States, as is fully evinced by
the acts of the Government and the proceedings of the courts. There
being cause, however, to apprehend, in the course of the last summer,
that some adventurers entertained views of the kind suggested, the
attention of the constituted authorities in that quarter was immediately
drawn to them, and it is known that the project, whatever it might be,
has utterly failed.

These facts will, it is presumed, satisfy every impartial mind that the
Government of Spain had no justifiable cause for declining to ratify the
treaty. A treaty concluded in conformity with instructions is
obligatory, in good faith, in all its stipulations, according to the
true intent and meaning of the parties. Each party is bound to ratify
it. If either could set it aside without the consent of the other, there
would be no longer any rules applicable to such transactions between
nations.

By this proceeding the Government of Spain has rendered to the United
States a new and very serious injury. It has been stated that a minister
would be sent to ask certain explanations of this Government; but if
such were desired, why were they not asked within the time limited for
the ratification?

Is it contemplated to open a new negotiation respecting any of the
articles or conditions of the treaty? If that were done, to what
consequences might it not lead? At what time and in what manner would a
new negotiation terminate? By this proceeding Spain has formed a
relation between the two countries which will justify any measures on
the part of the United States which a strong sense of injury and a
proper regard for the rights and interests of the nation may dictate.

In the course to be pursued these objects should be constantly held in
view and have their due weight. Our national honor must be maintained,
and a new and a distinguished proof be afforded of that regard for
justice and moderation which has invariably governed the councils of
this free people. It must be obvious to all that if the United States
had been desirous of making conquests, or had been even willing to
aggrandize themselves in that way, they could have had no inducement to
form this treaty. They would have much cause for gratulation at the
course which has been pursued by Spain. An ample field for ambition is
open before them, but such a career is not consistent with the
principles of their Government nor the interests of the nation.

From a full view of all circumstances, it is submitted to the
consideration of Congress whether it will not be proper for the United
States to carry the conditions of the treaty into effect in the same
manner as if it had been ratified by Spain, claiming on their part all
its advantages and yielding to Spain those secured to her. By pursuing
this course we shall rest on the sacred ground of right, sanctioned in
the most solemn manner by Spain herself by a treaty which she was bound
to ratify, for refusing to do which she must incur the censure of other
nations, even those most friendly to her, while by confining ourselves
within that limit we can not fail to obtain their well-merited
approbation.

We must have peace on a frontier where we have been so long disturbed;
our citizens must be indemnified for losses so long since sustained, and
for which indemnity has been so unjustly withheld from them.
Accomplishing these great objects, we obtain all that is desirable.

But His Catholic Majesty has twice declared his determination to send a
minister to the United States to ask explanations on certain points and
to give them respecting his delay to ratify the treaty. Shall we act by
taking the ceded territory and proceeding to execute the other
conditions of the treaty before this minister arrives and is heard?

This is a case which forms a strong appeal to the candor, the
magnanimity, and the honor of this people. Much is due to courtesy
between nations. By a short delay we shall lose nothing, for, resting on
the ground of immutable truth and justice, we can not be diverted from
our purpose.

It ought to be presumed that the explanations which may be given to the
minister of Spain will be satisfactory, and produce the desired result.
In any event, the delay for the purpose mentioned, being a further
manifestation of the sincere desire to terminate in the most friendly
manner all differences with Spain, can not fail to be duly appreciated
by His Catholic Majesty as well as by other powers. It is submitted,
therefore, whether it will not be proper to make the law proposed for
carrying the conditions of the treaty into effect, should it be adopted,
contingent; to suspend its operation, upon the responsibility of the
Executive, in such manner as to afford an opportunity for such friendly
explanations as may be desired during the present session of Congress.

I communicate to Congress a copy of the treaty and of the instructions
to the minister of the United States at Madrid respecting it; of his
correspondence with the minister of Spain, and of such other documents
as may be necessary to give a full view of the subject.

In the course which the Spanish Government have on this occasion thought
proper to pursue it is satisfactory to know that they have not been
countenanced by any other European power. On the contrary, the opinion
and wishes both of France and Great Britain have not been withheld
either from the United States or from Spain, and have been unequivocal
in favor of the ratification. There is also reason to believe that the
sentiments of the Imperial Government of Russia have been the same, and
that they have also been made known to the cabinet of Madrid.

In the civil war existing between Spain and the Spanish Provinces in
this hemisphere the greatest care has been taken to enforce the laws
intended to preserve an impartial neutrality. Our ports have continued
to be equally open to both parties and on the same conditions, and our
citizens have been equally restrained from interfering in favor of
either to the prejudice of the other. The progress of the war, however
has operated manifestly in favor of the colonies. Buenos Ayres still
maintains unshaken the independence which it declared in 1816, and has
enjoyed since 1810. Like success has also lately attended Chili and the
Provinces north of the La Plata bordering on it, and likewise Venezuela.

This contest has from its commencement been very interesting to other
powers, and to none more so than to the United States. A virtuous people
may and will confine themselves within the limit of a strict neutrality;
but it is not in their power to behold a conflict so vitally important
to their neighbors without the sensibility and sympathy which naturally
belong to such a case. It has been the steady purpose of this Government
to prevent that feeling leading to excess, and it is very gratifying to
have it in my power to state that so strong has been the sense
throughout the whole community of what was due to the character and
obligations of the nation that very few examples of a contrary kind have
occurred.

The distance of the colonies from the parent country and the great
extent of their population and resources gave them advantages which it
was anticipated at a very early period would be difficult for Spain to
surmount. The steadiness, consistency, and success with which they have
pursued their object, as evinced more particularly by the undisturbed
sovereignty which Buenos Ayres has so long enjoyed, evidently give them
a strong claim to the favorable consideration of other nations. These
sentiments on the part of the United States have not been withheld from
other powers, with whom it is desirable to act in concert. Should it
become manifest to the world that the efforts of Spain to subdue these
Provinces will be fruitless, it may be presumed that the Spanish
Government itself will give up the contest. In producing such a
determination it can not be doubted that the opinion of friendly powers
who have taken no part in the controversy will have their merited
influence.

It is of the highest importance to our national character and
indispensable to the morality of our citizens that all violations of our
neutrality should be prevented. No door should be left open for the
evasion of our laws, no opportunity afforded to any who may be disposed
to take advantage of it to compromit the interest or the honor of the
nation. It is submitted, therefore, to the consideration of Congress
whether it may not be advisable to revise the laws with a view to this
desirable result.

It is submitted also whether it may not be proper to designate by law
the several ports or places along the coast at which only foreign ships
of war and privateers may be admitted. The difficulty of sustaining the
regulations of our commerce and of other important interests from abuse
without such designation furnishes a strong motive for this measure.

At the time of the negotiation for the renewal of the commercial
convention between the United States and Great Britain a hope had been
entertained that an article might have been agreed upon mutually
satisfactory to both countries, regulating upon principles of justice
and reciprocity the commercial intercourse between the United States and
the British possessions as well in the West Indies as upon the continent
of North America. The plenipotentiaries of the two Governments not
having been able to come to an agreement on this important interest,
those of the United States reserved for the consideration of this
Government the proposals which had been presented to them as the
ultimate offer on the part of the British Government, and which they
were not authorized to accept. On their transmission here they were
examined with due deliberation, the result of which was a new effort to
meet the views of the British Government. The minister of the United
States was instructed to make a further proposal, which has not been
accepted. It was, however, declined in an amicable manner. I recommend
to the consideration of Congress whether further prohibitory provisions
in the laws relating to this intercourse may not be expedient. It is
seen with interest that although it has not been practicable as yet to
agree in any arrangement of this important branch of their commerce,
such is the disposition of the parties that each will view any
regulations which the other may make respecting it in the most friendly
light.

By the 5th article of the convention concluded on October 20th, 1818, it
was stipulated that the differences which have arisen between the two
Governments with respect to the true intent and meaning of the 5th
article of the treaty of Ghent, in relation to the carrying away by
British officers of slaves from the United States after the exchange of
the ratifications of the treaty of peace, should be referred to the
decision of some friendly sovereign or state to be named for that
purpose. The minister of the United States has been instructed to name
to the British Government a foreign sovereign, the common friend to both
parties, for the decision of this question. The answer of that
Government to the proposal when received will indicate the further
measures to be pursued on the part of the United States.

Although the pecuniary embarrassments which affected various parts of
the Union during the latter part of the preceding year have during the
present been considerably augmented, and still continue to exist, the
receipts into the Treasury to the 30th of September last have amounted
to $19 millions. After defraying the current expenses of the Government,
including the Interest and reimbursement of the public debt payable to
that period, amounting to $18.2 millions, there remained in the Treasury
on that day more than $2.5 millions, which, with the sums receivable
during the remainder of the year, will exceed the current demands upon
the Treasury for the same period.

The causes which have tended to diminish the public receipts could not
fail to have a corresponding effect upon the revenue which has accrued
upon imposts and tonnage during the three first quarters of the present
year. It is, however, ascertained that the duties which have been
secured during that period exceed $18 millions, and those of the whole
year will probably amount to $23 millions.

For the probable receipts of the next year I refer you to the statements
which will be transmitted from the Treasury, which will enable you to
judge whether further provision be necessary.

The great reduction in the price of the principal articles of domestic
growth which has occurred during the present year, and the consequent
fall in the price of labor, apparently so favorable to the success of
domestic manufactures, have not shielded them against other causes
adverse to their prosperity. The pecuniary embarrassments which have so
deeply affected the commercial interests of the nation have been no less
adverse to our manufacturing establishments in several sections of the
Union.

The great reduction of the currency which the banks have been
constrained to make in order to continue specie payments, and the
vitiated character of it where such reductions have not been attempted,
instead of placing within the reach of these establishments the
pecuniary aid necessary to avail themselves of the advantages resulting
from the reduction in the prices of the raw materials and of labor, have
compelled the banks to withdraw from them a portion of the capital
heretofore advanced to them. That aid which has been refused by the
banks has not been obtained from other sources, owing to the loss of
individual confidence from the frequent failures which have recently
occurred in some of our principal commercial cities.

An additional cause for the depression of these establishments may
probably be found in the pecuniary embarrassments which have recently
affected those countries with which our commerce has been principally
prosecuted. Their manufactures, for the want of a ready or profitable
market at home, have been shipped by the manufacturers to the United
States, and in many instances sold at a price below their current value
at the place of manufacture. Although this practice may from its nature
be considered temporary or contingent, it is not on that account less
injurious in its effects. Uniformity in the demand and price of an
article is highly desirable to the domestic manufacturer.

It is deemed of great importance to give encouragement to our domestic
manufacturers. In what manner the evils which have been adverted to may
be remedied, and how far it may be practicable in other respects to
afford to them further encouragement, paying due regard to the other
great interests of the nation, is submitted to the wisdom of Congress.

The survey of the coast for the establishment of fortifications is now
nearly completed, and considerable progress has been made in the
collection of materials for the construction of fortifications in the
Gulf of Mexico and in the Chesapeake Bay. The works on the eastern bank
of the Potomac below Alexandria and on the Pea Patch, in the Delaware,
are much advanced, and it is expected that the fortifications at the
Narrows, in the harbor of New York, will be completed the present year.
To derive all the advantages contemplated from these fortifications it
was necessary that they should be judiciously posted, and constructed
with a view to permanence. The progress hitherto has therefore been
slow; but as the difficulties in parts heretofore the least explored and
known are surmounted, it will in future be more rapid. As soon as the
survey of the coast is completed, which it is expected will be done
early in the next spring, the engineers employed in it will proceed to
examine for like purposes the northern and northwestern frontiers.

The troops intended to occupy a station at the mouth of the St. Peters,
on the Mississippi, have established themselves there, and those who
were ordered to the mouth of the Yellow Stone, on the Missouri, have
ascended that river to the Council Bluff, where they will remain until
the next spring, when they will proceed to the place of their
destination. I have the satisfaction to state that this measure has been
executed in amity with the Indian tribes, and that it promises to
produce, in regard to them, all the advantages which were contemplated
by it.

Much progress has likewise been made in the construction of ships of war
and in the collection of timber and other materials for ship building.
It is not doubted that our Navy will soon be augmented to the number and
placed in all respects on the footing provided for by law.

The Board, consisting of engineers and naval officers, have not yet made
their final report of sites for two naval depots, as instructed
according to the resolutions of March 18th, 1818 and April 20th, 1818,
but they have examined the coast therein designated, and their report is
expected in the next month.

For the protection of our commerce in the Mediterranean, along the
southern Atlantic coast, in the Pacific and Indian oceans, it has been
found necessary to maintain a strong naval force, which it seems proper
for the present to continue. There is much reason to believe that if any
portion of the squadron heretofore stationed in the Mediterranean should
be withdrawn our intercourse with the powers bordering on that sea would
be much interrupted, if not altogether destroyed. Such, too, has been
the growth of a spirit of piracy in the other quarters mentioned, by
adventurers from every country, in abuse of the friendly flags which
they have assumed, that not to protect our commerce there would be to
abandon it as a prey to their rapacity.

Due attention has likewise been paid to the suppression of the slave
trade, in compliance with a law of the last session. Orders have been
given to the commanders of all our public ships to seize all vessels
navigated under our flag engaged in that trade, and to bring them in to
be proceeded against in the manner prescribed by the law. It is hoped
that these vigorous measures, supported by like acts by other nations,
will soon terminate a commerce so disgraceful to the civilized world.

In the execution of the duty imposed by these acts, and of a high trust
connected with it, it is with deep regret I have to state the loss which
has been sustained by the death of Commodore Perry. His gallantry in a
brilliant exploit in the late war added to the renown of his country.
His death is deplored as a national misfortune.

***

State of the Union Address
James Monroe
November 14, 1820

Fellow-Citizens of the Senate and House of Representatives:

In communicating to you a just view of public affairs at the
commencement of your present labors, I do it with great satisfaction,
because, taking all circumstances into consideration which claim
attention, I see much cause to rejoice in the felicity of our situation.
In making this remark I do not wish to be understood to imply that an
unvaried prosperity is to be seen in every interest of this great
community. In the progress of a nation inhabiting a territory of such
vast extent and great variety of climate, every portion of which is
engaged in foreign commerce and liable to be affected in some degree by
the changes which occur in the condition and regulations of foreign
countries, it would be strange if the produce of our soil and the
industry and enterprise of our fellow citizens received at all times and
in every quarter an uniform and equal encouragement. This would be more
than we would have a right to expect under circumstances the most
favorable.

Pressures on certain interests, it is admitted, have been felt; but
allowing to these their greatest extent, they detract but little from
the force of the remarks already made. In forming a just estimate of our
present situation it is proper to look at the whole in the outline as
well as in the detail. A free, virtuous, and enlightened people know
well the great principles and causes on which their happiness depends,
and even those who suffer most occasionally in their transitory concerns
find great relief under their sufferings from the blessings which they
otherwise enjoy and in the consoling and animating hope which they
administer.

From whence do these pressures come? Not from a Government which is
founded by, administered for, and supported by the people. We trace them
to the peculiar character of the epoch in which we live, and to the
extraordinary occurrences which have signalized it. The convulsions with
which several of the powers of Europe have been shaken and the long and
destructive wars in which all were engaged, with their sudden transition
to a state of peace, presenting in the first instance unusual
encouragement to our commerce and withdrawing it in the second even
within its wonted limit, could not fail to be sensibly felt here. The
station, too, which we had to support through this long conflict,
compelled as we were finally to become a party to it with a principal
power, and to make great exertions, suffer heavy losses, and to contract
considerable debts, disturbing the ordinary course of affairs by
augmenting to a vast amount the circulating medium, and thereby
elevating at one time the price of every article above a just standard
and depressing it at another below it, had likewise its due effect.

It is manifest that the pressures of which we complain have proceeded in
a great measure from these causes. When, then, we take into view the
prosperous and happy condition of our country in all the great
circumstances which constitute the felicity of a nation--every
individual in the full enjoyment of all his rights, the Union blessed
with plenty and rapidly rising to greatness under a National Government
which operates with complete effect in every part without being felt in
any except by the ample protection which it affords, and under State
governments which perform their equal share, according to a wise
distribution of power between them, in promoting the public
happiness--it is impossible to behold so gratifying, so glorious a
spectacle without being penetrated with the most profound and grateful
acknowledgments to the Supreme Author of All Good for such manifold and
inestimable blessings.

Deeply impressed with these sentiments, I can not regard the pressures
to which I have adverted otherwise than in the light of mild and
instructive admonitions, warning us of dangers to be shunned in future,
teaching us lessons of economy corresponding with the simplicity and
purity of our institutions and best adapted to their support, evincing
the connection and dependence which the various parts of our happy Union
have on each other, thereby augmenting daily our social incorporation
and adding by its strong ties new strength and vigor to the political;
opening a wider range, and with new encouragement, to the industry and
enterprise of our fellow citizens at home and abroad, and more
especially by the multiplied proofs which it has accumulated of the
great perfection of our most excellent system of Government, the
powerful instrument in the hands of our All-merciful Creator in securing
to us these blessings.

Happy as our situation is, it does not exempt us from solicitude and
care for the future. On the contrary, as the blessings which we enjoy
are great, proportionably great should be our vigilance, zeal, and
activity to preserve them. Foreign wars may again expose us to new
wrongs, which would impose on us new duties for which we ought to be
prepared. The state of Europe is unsettled, and how long peace may be
preserved is altogether uncertain; in addition to which we have
interests of our own to adjust which will require particular attention.
A correct view of our relations with each power will enable you to form
a just idea of existing difficulties, and of the measures of precaution
best adapted to them.

Respecting our relations with Spain nothing explicit can now be
communicated. On the adjournment of Congress in May last the minister
plenipotentiary of the United States at Madrid was instructed to inform
the Government of Spain that if His Catholic Majesty should then ratify
the treaty this Government would accept the ratification so far as to
submit to the decision of the Senate the question whether such
ratification should be received in exchange for that of the United
States heretofore given.

By letters from the minister of the United States to the Secretary of
State it appears that a communication in conformity with his
instructions had been made to the Government of Spain, and that the
Cortes had the subject under consideration. The result of the
deliberations of that body, which is daily expected, will be made known
to Congress as soon as it is received. The friendly sentiment which was
expressed on the part of the United States in the message of the 9th of
May last is still entertained for Spain.

Among the causes of regret, however, which are inseparable from the
delay attending this transaction it is proper to state that satisfactory
information has been received that measures have been recently adopted
by designing persons to convert certain parts of the Province of East
Florida into depots for the reception of foreign goods, from whence to
smuggle them into the United States. By opening a port within the limits
of Florida, immediately on our boundary where there was no settlement,
the object could not be misunderstood. An early accommodation of
differences will, it is hoped, prevent all such fraudulent and
pernicious practices, and place the relations of the two countries on a
very amicable and permanent basis.

The commercial relations between the United States and the British
colonies in the West Indies and on this continent have undergone no
change, the British Government still preferring to leave that commerce
under the restriction heretofore imposed on it on each side. It is
satisfactory to recollect that the restraints resorted to by the United
States were defensive only, intended to prevent a monopoly under British
regulations in favor of Great Britain, as it likewise is to know that
the experiment is advancing in a spirit of amity between the parties.

The question depending between the United States and Great Britain
respecting the construction of the first article of the treaty of Ghent
has been referred by both Governments to the decision of the Emperor of
Russia, who has accepted the umpirage.

An attempt has been made with the Government of France to regulate by
treaty the commerce between the two countries on the principle of
reciprocity and equality. By the last communication from the minister
plenipotentiary of the United States at Paris, to whom full power had
been given, we learn that the negotiation has been commenced there; but
serious difficulties having occurred, the French Government had resolved
to transfer it to the United States, for which purpose the minister
plenipotentiary of France had been ordered to repair to this city, and
whose arrival might soon be expected. It is hoped that this important
interest may be arranged on just conditions and in a manner equally
satisfactory to both parties. It is submitted to Congress to decide,
until such arrangement is made, how far it may be proper, on the
principle of the act of the last session which augmented the tonnage
duty on French vessels, to adopt other measures for carrying more
completely into effect the policy of that act.

The act referred to, which imposed new tonnage on French vessels, having
been in force from and after the first day of July, it has happened that
several vessels of that nation which had been dispatched from France
before its existence was known have entered the ports of the United
States, and been subject to its operation, without that previous notice
which the general spirit of our laws gives to individuals in similar
cases. The object of that law having been merely to countervail the
inequalities which existed to the disadvantage of the United States in
their commercial intercourse with France, it is submitted also to the
consideration of Congress whether, in the spirit of amity and
conciliation which it is no less the inclination than the policy of the
United States to preserve in their intercourse with other powers, it may
not be proper to extend relief to the individuals interested in those
cases by exempting from the operation of the law all those vessels which
have entered our ports without having had the means of previously
knowing the existence of the additional duty.

The contest between Spain and the colonies, according to the most
authentic information, is maintained by the latter with improved
success. The unfortunate divisions which were known to exist some time
since at Buenos Ayres it is understood still prevail. In no part of
South America has Spain made any impression on the colonies, while in
many parts, and particularly in Venezuela and New Grenada, the colonies
have gained strength and acquired reputation, both for the management of
the war in which they have been successful and for the order of the
internal administration.

The late change in the Government of Spain, by the reestablishment of
the constitution of 1812, is an event which promises to be favorable to
the revolution. Under the authority of the Cortes the Congress of
Angostura was invited to open a negotiation for the settlement of
differences between the parties, to which it was replied that they would
willingly open the negotiation provided the acknowledgment of their
independence was made its basis, but not otherwise.

No facts are known to this Government to warrant the belief that any of
the powers of Europe will take part in the contest, whence it may be
inferred, considering all circumstances which must have weight in
producing the result, that an adjustment will finally take place on the
basis proposed by the colonies. To promote that result by friendly
counsels with other powers, including Spain herself, has been the
uniform policy of this Government.

In looking to the internal concerns of our country you will, I am
persuaded, derive much satisfaction from a view of the several objects
to which, in the discharge of your official duties, your attention will
be drawn. Among these none holds a more important place than the public
revenue, from the direct operation of the power by which it is raised on
the people, and by its influence in giving effect to every other power
of the Government. The revenue depends on the resources of the country,
and the facility by which the amount required is raised is a strong
proof of the extent of the resources and of the efficiency of the
Government.

A few prominent facts will place this great interest in a just light
before you. On September 30th, 1815, the funded and floating debt of the
United States was estimated at $119,635,558. If to this sum be added the
amount of 5% stock subscribed to the Bank of the United States, the
amount of Mississippi stock and of the stock which was issued
subsequently to that date, and as afterwards liquidated, to
$158,713,049.

On September 30th, 1820, it amounted to $91,993,883, having been reduced
in that interval by payments $66,879,165. During this term the expenses
of the Government of the United States were likewise defrayed in every
branch of the civil, military, and naval establishments; the public
edifices in this city have been rebuilt with considerable additions;
extensive fortifications have been commenced, and are in a train of
execution; permanent arsenals and magazines have been erected in various
parts of the Union; our Navy has been considerably augmented, and the
ordnance, munitions of war, and stores of the Army and Navy, which were
much exhausted during the war, have been replenished.

By the discharge of so large a proportion of the public debt and the
execution of such extensive and important operations in so short a time
a just estimate may be formed of the great extent of our national
resources. The demonstration is the more complete and gratifying when it
is recollected that the direct tax and excise were repealed soon after
the termination of the late war, and that the revenue applied to these
purposes has been derived almost wholly from other sources.

The receipts into the Treasury from every source to the 30th of
September last have amounted to $16,794,107.66, whilst the public
expenditures to the same period amounted to $16,871,534.72, leaving in
the Treasury on that day a sum estimated at $1.95 millions. For the
probable receipts of the following year I refer you to the statement
which will be transmitted from the Treasury.

The sum of $3 millions authorized to be raised by loan by an act of the
last session of Congress has been obtained upon terms advantageous to
the Government, indicating not only an increased confidence in the faith
of the nation, but the existence of a large amount of capital seeking
that mode of investment at a rate of interest not exceeding 5% per
annum.

It is proper to add that there is now due to the Treasury for the sale
of public lands $22,996,545. In bringing this subject to view I consider
it my duty to submit to Congress whether it may not be advisable to
extend to the purchasers of these lands, in consideration of the
unfavorable change which has occurred since the sales, a reasonable
indulgence. It is known that the purchases were made when the price of
every article had risen to its greatest height, and the installments are
becoming due at a period of great depression. It is presumed that some
plan may be devised by the wisdom of Congress, compatible with the
public interest, which would afford great relief to these purchasers.

Considerable progress has been made during the present season in
examining the coast and its various bays and other inlets, in the
collection of materials, and in the construction of fortifications for
the defense of the Union at several of the positions at which it has
been decided to erect such works. At Mobile Point and Dauphin Island,
and at the Rigolets, leading to Lake Pontchartrain, materials to a
considerable amount have been collected, and all the necessary
preparations made for the commencement of the works. At Old Point
Comfort, at the mouth of the James River, and at the Rip-Rap, on the
opposite shore in the Chesapeake Bay, materials to a vast amount have
been collected; and at the Old Point some progress has been made in the
construction of the fortification, which is on a very extensive scale.
The work at Fort Washington, on this river, will be completed early in
the next spring, and that on the Pea Patch, in the Delaware, in the
course of the next season. Fort Diamond, at the Narrows, in the harbor
of New York, will be finished this year. The works at Boston, New York,
Baltimore, Norfolk, Charleston, and Niagara have been in part repaired,
and the coast of North Carolina, extending south to Cape Fear, has been
examined, as have likewise other parts of the coast eastward of Boston.

Great exertions have been made to push forward these works with the
utmost dispatch possible; but when their extent is considered, with the
important purposes for which they are intended--the defense of the whole
coast, and, in consequence, of the whole interior--and that they are to
last for ages, it will be manifest that a well-digested plan, founded on
military principles, connecting the whole together, combining security
with economy, could not be prepared without repeated examinations of the
most exposed and difficult parts, and that it would also take
considerable time to collect the materials at the several points where
they would be required.

From all the light that has been shed on this subject I am satisfied
that every favorable anticipation which has been formed of this great
undertaking will be verified, and that when completed it will afford
very great if not complete protection to our Atlantic frontier in the
event of another war--protection sufficient to counterbalance in a
single campaign with an enemy powerful at sea the expense of all these
works, without taking into the estimate the saving of the lives of so
many of our citizens, the protection of our towns and other property, or
the tendency of such works to prevent war.

Our military positions have been maintained at Belle Point, on the
Arkansas, at Council Bluffs, on the Missouri, at St. Peters, on the
Mississippi, and at Green Bay, on the upper Lakes. Commodious barracks
have already been erected at most of these posts, with such works as
were necessary for their defense. Progress has also been made in opening
communications between them and in raising supplies at each for the
support of the troops by their own labor, particularly those most
remote.

With the Indians peace has been preserved and a progress made in
carrying into effect the act of Congress making an appropriation for
their civilization, with the prospect of favorable results. As connected
equally with both these objects, our trade with those tribes is thought
to merit the attention of Congress.

In their original state game is their sustenance and war their
occupation, and if they find no employment from civilized powers they
destroy each other. Left to themselves their extirpation is inevitable.

By a judicious regulation of our trade with them we supply their wants,
administer to their comforts, and gradually, as the game retires, draw
them to us. By maintaining posts far in the interior we acquire a more
thorough and direct control over them, without which it is confidently
believed that a complete change in their manners can never be
accomplished. By such posts, aided by a proper regulation of our trade
with them and a judicious civil administration over them, to be provided
for by law, we shall, it is presumed, be enabled not only to protect our
own settlements from their savage incursions and preserve peace among
the several tribes, but accomplish also the great purpose of their
civilization.

Considerable progress has also been made in the construction of ships of
war, some of which have been launched in the course of the present year.

Our peace with the powers on the coast of Barbary has been preserved,
but we owe it altogether to the presence of our squadron in the
Mediterranean. It has been found equally necessary to employ some of our
vessels for the protection of our commerce in the Indian Sea, the
Pacific, and along the Atlantic coast. The interests which we have
depending in those quarters, which have been much improved of late, are
of great extent and of high importance to the nation as well as to the
parties concerned, and would undoubtedly suffer if such protection was
not extended to them. In execution of the law of the last session for
the suppression of the slave trade some of our public ships have also
been employed on the coast of Africa, where several captures have
already been made of vessels engaged in that disgraceful traffic.

***

State of the Union Address
James Monroe
December 3, 1821

Fellow-Citizens of the Senate and House of Representatives:

The progress of our affairs since the last session has been such as may
justly be claimed and expected under a Government deriving all its
powers from an enlightened people, and under laws formed by their
representatives, on great consideration, for the sole purpose of
promoting the welfare and happiness of their constituents. In the
execution of those laws and of the powers vested by the Constitution in
the Executive, unremitted attention has been paid to the great objects
to which they extend.

In the concerns which are exclusively internal there is good cause to be
satisfied with the result. The laws have had their due operation and
effect.

In those relating to foreign powers, I am happy to state that peace and
amity are preserved with all by a strict observance on both sides of the
rights of each.

In matters touching our commercial intercourse, where a difference of
opinion has existed as to the conditions on which it should be placed,
each party has pursued its own policy without giving just cause of
offense to the other.

In this annual communication, especially when it is addressed to a new
Congress, the whole scope of our political concerns naturally comes into
view, that errors, if such have been committed, may be corrected; that
defects which have become manifest may be remedied; and, on the other
hand, that measures which were adopted on due deliberation, and which
experience has shewn are just in themselves and essential to the public
welfare, should be persevered in and supported. In performing this
necessary and very important duty I shall endeavor to place before you
on its merits every subject that is thought to be entitled to your
particular attention in as distinct and clear a light as I may be able.

By an act of March 3rd, 1815, so much of the several acts as imposed
higher duties on the tonnage of foreign vessels and on the manufactures
and productions of foreign nations when imported into the United States
in foreign vessels than when imported in vessels of the United States
were repealed so far as respected the manufactures and productions of
the nation to which such vessels belonged, on the condition that the
repeal should take effect only in favor of any foreign nation when the
Executive should be satisfied that such discriminating duties to the
disadvantage of the United States had likewise been repealed by such
nation.

By this act a proposition was made to all nations to place our commerce
with each on a basis which it was presumed would be acceptable to all.
Every nation was allowed to bring its manufactures and productions into
our ports and to take the manufactures and productions of the United
States back to their ports in their own vessels on the same conditions
that they might be transported in vessels of the United States, and in
return it was required that a like accommodation should be granted to
the vessels of the United States in the ports of other powers. The
articles to be admitted or prohibited on either side formed no part of
the proposed arrangement. Each party would retain the right to admit or
prohibit such articles from the other as it thought proper, and on its
own conditions.

When the nature of the commerce between the United States and every
other country was taken into view, it was thought that this proposition
would be considered fair, and even liberal, by every power. The exports
of the United States consist generally of articles of the first
necessity and of rude materials in demand for foreign manufactories, of
great bulk, requiring for their transportation many vessels, the return
for which in the manufactures and productions of any foreign country,
even when disposed of there to advantage, may be brought in a single
vessel. This observation is the more especially applicable to those
countries from which manufactures alone are imported, but it applies in
great extent to the European dominions of every European power and in a
certain extent to all the colonies of those powers. By placing, then,
the navigation precisely on the same ground in the transportation of
exports and imports between the United States and other countries it was
presumed that all was offered which could be desired. It seemed to be
the only proposition which could be devised which would retain even the
semblance of equality in our favor.

Many considerations of great weight gave us a right to expect that this
commerce should be extended to the colonies as well as to the European
dominions of other powers. With the latter, especially with countries
exclusively manufacturing, the advantage was manifestly on their side.
An indemnity for that loss was expected from a trade with the colonies,
and with the greater reason as it was known that the supplies which the
colonies derived from us were of the highest importance to them, their
labor being bestowed with so much greater profit in the culture of other
articles; and because, likewise, the articles of which those supplies
consisted, forming so large a proportion of the exports of the United
States, were never admitted into any of the ports of Europe except in
cases of great emergency to avert a serious calamity.

When no article is admitted which is not required to supply the wants of
the party admitting it, and admitted then not in favor of any particular
country to the disadvantage of others, but on conditions equally
applicable to all, it seems just that the articles thus admitted and
invited should be carried thither in the vessels of the country
affording such supply and that the reciprocity should be found in a
corresponding accommodation on the other side. By allowing each party to
participate in the transportation of such supplies on the payment of
equal tonnage a strong proof was afforded of an accommodating spirit. To
abandon to it the transportation of the whole would be a sacrifice which
ought not to be expected. The demand in the present instance would be
the more unreasonable in consideration of the great inequality existing
in the trade with the parent country.

Such was the basis of our system as established by the act of 1815 and
such its true character. In the year in which this act was passed a
treaty was concluded with Great Britain, in strict conformity with its
principles, in regard to her European dominions. To her colonies,
however, in the West Indies and on this continent it was not extended,
the British Government claiming the exclusive supply of those colonies,
and from our own ports, and of the productions of the colonies in return
in her own vessels. To this claim the United States could not assent,
and in consequence each party suspended the intercourse in the vessels
of the other by a prohibition which still exists.

The same conditions were offered to France, but not accepted. Her
Government has demanded other conditions more favorable to her
navigation, and which should also give extraordinary encouragement to
her manufactures and productions in ports of the United States. To these
it was thought improper to accede, and in consequence the restrictive
regulations which had been adopted on her part, being countervailed on
the part of the United States, the direct commerce between the two
countries in the vessels of each party has been in great measure
suspended. It is much to be regretted that, although a negotiation has
been long pending, such is the diversity of views entertained on the
various points which have been brought into discussion that there does
not appear to be any reasonable prospect of its early conclusion.

It is my duty to state, as a cause of very great regret, that very
serious differences have occurred in this negotiation respecting the
construction of the 8th article of the treaty of 1803, by which
Louisiana was ceded to the United States, and likewise respecting the
seizure of the Apollo, in 1820, for a violation of our revenue laws. The
claim of the Government of France has excited not less surprise than
concern, because there does not appear to be a just foundation for it in
either instance. By the 8th article of the treaty referred to it is
stipulated that after the expiration of twelve years, during which time
it was provided by the 7th or preceding article that the vessels of
France and Spain should be admitted into the ports of the ceded
territory without paying higher duties on merchandise or tonnage on the
vessels than such as were paid by citizens of the United States, the
ships of France should forever afterwards be placed on the footing of
the most favored nation.

By the obvious construction of this article it is presumed that it was
intended that no favor should be granted to any power in those ports to
which France should not be forthwith entitled, nor should any
accommodation be allowed to another power on conditions to which she
would not also be entitled on the same conditions. Under this
construction no favor or accommodation could be granted to any power to
the prejudice of France. By allowing the equivalent allowed by those
powers she would always stand in those ports on the footing of the most
favored nation.

But if this article should be so construed as that France should enjoy,
of right, and without paying the equivalent, all the advantages of such
conditions as might be allowed to other powers in return for important
concessions made by them, then the whole character of the stipulations
would be changed. She would not be placed on the footing of the most
favored nation, but on a footing held by no other nation. She would
enjoy all advantages allowed to them in consideration of like advantages
allowed to us, free from every and any condition whatever.

As little cause has the Government of France to complain of the seizure
of the Apollo and the removal of other vessels from the waters of the
St. Marys. It will not be denied that every nation has a right to
regulate its commercial system as it thinks fit and to enforce the
collection of its revenue, provided it be done without an invasion of
the rights of other powers. The violation of its revenue laws is an
offense which all nations punish, the punishment of which gives no just
cause of complaint to the power to which the offenders belong, provided
it be extended to all equally.

In this case every circumstance which occurred indicated a fixed purpose
to violate our revenue laws. Had the party intended to have pursued a
fair trade he would have entered the port of some other power, landed
his goods at the custom house according to law, and re-shipped and sent
them in the vessel of such power, or of some other power which might
lawfully bring them, free from such duties, to a port of the United
States. But the conduct of the party in this case was altogether
different. He entered the river St. Marys, the boundary line between the
United States and Florida, and took his position on the Spanish side, on
which in the whole extent of the river there was no town, no port or
custom house, and scarcely any settlement. His purpose, therefore, was
not to sell his goods to the inhabitants of Florida, but to citizens of
the United States, in exchange for their productions, which could not be
done without a direct and palpable breach of our laws. It is known that
a regular systematic plan had been formed by certain persons for the
violation of our revenue system, which made it the more necessary to
check the proceeding in its commencement.

That the unsettled bank of a river so remote from the Spanish garrisons
and population could give no protection to any party in such a practice
is believed to be in strict accord with the law of nations. It would not
have comported with a friendly policy in Spain herself to have
established a custom house there, since it could have subserved no other
purpose than to elude our revenue law. But the Government of Spain did
not adopt that measure. On the contrary, it is understood that the
Captain-General of Cuba, to whom an application to that effect was made
by these adventurers, had not acceded to it.

The condition of those Provinces for many years before they were ceded
to the United States need not now be dwelt on. Inhabited by different
tribes of Indians and an inroad for every kind of adventurer, the
jurisdiction of Spain may be said to have been almost exclusively
confined to her garrisons. It certainly could not extend to places where
she had no authority. The rules, therefore, applicable to settled
countries governed by laws could not be deemed so to the deserts of
Florida and to the occurrences there.

It merits attention also that the territory had been ceded to the United
States by a treaty the ratification of which had not been refused, and
which has since been performed. Under any circumstances, therefore,
Spain became less responsible for such acts committed there, and the
United States more at liberty to exercise authority to prevent so great
a mischief. The conduct of this Government has in every instance been
conciliatory and friendly to France. The construction of our revenue law
in its application to the cases which have formed the ground of such
serious complaint on her part and the order to the collector of St.
Marys, in accord with it, were given two years before these cases
occurred, and in reference to a breach which was attempted by the
subjects of another power. The application, therefore, to the cases in
question was inevitable. As soon as the treaty by which these Provinces
were ceded to the United States was ratified, and all danger of further
breach of our revenue laws ceased, an order was given for the release of
the vessel which had been seized and for the dismission of the libel
which had been instituted against her.

The principles of this system of reciprocity, founded on the law of
March 3rd, 1815, have been since carried into effect with the Kingdoms
of the Netherlands, Sweden, Prussia, and with Hamburg, Lubeck, and
Oldenburg, with a provision made by subsequent laws in regard to the
Netherlands, Prussia, Hamburg, and Bremen that such produce and
manufactures as could only be, or most usually were, first shipped from
the ports of those countries, the same being imported in vessels wholly
belonging to their subjects, should be considered and admitted as their
own manufactures and productions.

The Government of Norway has by an ordinance opened the ports of that
part of the dominions of the King of Sweden to the vessels of the United
States upon the payment of no other or higher duties than are paid by
Norwegian vessels, from whatever place arriving and with whatever
articles laden. They have requested the reciprocal allowance for the
vessels of Norway in the ports of the United States. As this privilege
is not within the scope of the act of March 3rd, 1815, and can only be
granted by Congress, and as it may involve the commercial relations of
the United States with other nations, the subject is submitted to the
wisdom of Congress.

I have presented thus fully to your view our commercial relations with
other powers, that, seeing them in detail with each power, and knowing
the basis on which they rest, Congress may in its wisdom decide whether
any change ought to be made, and, if any, in what respect. If this basis
is unjust or unreasonable, surely it ought to be abandoned; but if it be
just and reasonable, and any change in it will make concessions
subversive of equality and tending in its consequences to sap the
foundations of our prosperity, then the reasons are equally strong for
adhering to the ground already taken, and supporting it by such further
regulations as may appear to be proper, should any additional support be
found necessary.

The question concerning the construction of the first article of the
treaty of Ghent has been, by a joint act of the representatives of the
United States and of Great Britain at the Court of St. Petersburg,
submitted to the decision of His Imperial Majesty the Emperor of Russia.
The result of that submission has not yet been received. The
commissioners under the 5th article of that treaty not having been able
to agree upon their decision, their reports to the two Governments,
according to the provisions of the treaty, may be expected at an early
day.

With Spain the treaty of February 22nd, 1819, has been partly carried
into execution. Possession of East and West Florida has been given to
the United States, but the officers charged with that service by an
order from His Catholic Majesty, delivered by his minister to the
Secretary of State, and transmitted by a special agent to the
Captain-General of Cuba, to whom it was directed and in whom the
Government of those Provinces was vested, have not only omitted, in
contravention of the order of their Sovereign, the performance of the
express stipulation to deliver over the archives and documents relating
to the property and sovereignty of those Provinces, all of which it was
expected would have been delivered either before or when the troops were
withdrawn, but defeated since every effort of the United States to
obtain them, especially those of the greatest importance. This omission
has given rise to several incidents of a painful nature, the character
of which will be fully disclosed by the documents which will be
hereafter communicated.

In every other circumstance of the law of the 3rd of March last, for
carrying into effect that treaty, has been duly attended to. For the
execution of that part which preserved in force, for the Government of
the inhabitants for the term specified, all the civil, military, and
judicial powers exercised by the existing Government of those Provinces
an adequate number of officers, as was presumed, were appointed, and
ordered to their respective stations. Both Provinces were formed into
one Territory, and a governor appointed for it; but in consideration of
the pre-existing division and of the distance and difficulty of
communication between Pensacola, the residence of the governor of West
Florida, and St. Augustine, that of the governor of East Florida, at
which places the inconsiderable population of each Province was
principally collected, two secretaries were appointed, the one to reside
at Pensacola and the other at St. Augustine.

Due attention was likewise paid to the execution of the laws of the
United States relating to the revenue and the slave trade, which were
extended to these Provinces. The whole Territory was divided into three
collection districts, that part lying between the river St. Marys and
Cape Florida forming one, that from the Cape to the Apalachicola
another, and that from the Apalachicola to the Perdido the third. To
these districts the usual number of revenue officers were appointed; and
to secure the due operation of these laws one judge and a district
attorney were appointed to reside at Pensacola, and likewise one judge
and a district attorney to reside at St. Augustine, with a specified
boundary between them; and one marshal for the whole, with authority to
appoint a deputy.

In carrying this law into effect, and especially that part relating to
the powers of the existing Government of those Provinces, it was thought
important, in consideration of the short term for which it was to
operate and the radical change which would be made at the approaching
session of Congress, to avoid expense, to make no appointment which
should not be absolutely necessary to give effect to those powers, to
withdraw none of our citizens from their pursuits, whereby to subject
the Government to claims which could not be gratified and the parties to
losses which it would be painful to witness.

It has been seen with much concern that in the performance of these
duties a collision arose between the governor of the Territory and the
judge appointed for the western district. It was presumed that the law
under which this transitory Government was organized, and the
commissions which were granted to the officers who were appointed to
execute each branch of the system, and to which the commissions were
adapted, would have been understood in the same sense by them in which
they were understood by the Executive. Much allowance is due to officers
employed in each branch of this system, and the more so as there is good
cause to believe that each acted under the conviction that he possessed
the power which he undertook to exercise. Of the officer holding the
principal station, I think it proper to observe that he accepted it with
reluctance, in compliance with the invitation given him, and from a high
sense of duty to his country, being willing to contribute to the
consummation of an event which would insure complete protection to an
important part of our Union, which had suffered much from incursion and
invasion, and to the defense of which his very gallant and patriotic
services had been so signally and usefully devoted.

From the intrinsic difficulty of executing laws deriving their origin
from different sources, and so essentially different in many important
circumstances, the advantage, and indeed the necessity, of establishing
as soon as practicable a well-organized Government over that Territory
on the principles of our system is apparent. This subject is therefore
recommended to the early consideration of Congress.

In compliance with an injunction of the law of the 3rd of March last,
three commissioners have also been appointed and a board organized for
carrying into effect the 11th article of the treaty above recited,
making provision for the payment of such of our citizens as have
well-founded claims on Spain of the character specified by that treaty.
This board has entered on its duties and made some progress therein. The
commissioner and surveyor of His Catholic Majesty, provided for by the
4th article of the treaty, have not yet arrived in the United States,
but are soon expected. As soon as they do arrive corresponding
appointments will be made and every facility be afforded for the due
execution of this service.

The Government of His Most Faithful Majesty since the termination of the
last session of Congress has been removed from Rio de Janeiro to Lisbon,
where a revolution similar to that which had occurred in the neighboring
Kingdom of Spain had in like manner been sanctioned by the accepted and
pledged faith of the reigning monarch. The diplomatic intercourse
between the United States and the Portuguese dominions, interrupted by
this important event, has not yet been resumed, but the change of
internal administration having already materially affected the
commercial intercourse of the United States with the Portuguese
dominions, the renewal of the public missions between the two countries
appears to be desirable at an early day.

It is understood that the colonies in South America have had great
success during the present year in the struggle for their independence.
The new Government of Colombia has extended its territories and
considerably augmented its strength, and at Buenos Ayres, where civil
dissensions had for some time before prevailed, greater harmony and
better order appear to have been established. Equal success has attended
their efforts in the Provinces on the Pacific. It has long been manifest
that it would be impossible for Spain to reduce these colonies by force,
and equally so that no conditions short of their independence would be
satisfactory to them. It may therefore be presumed, and it is earnestly
hoped, that the Government of Spain, guided by enlightened and liberal
councils, will find it to comport with its interests and due to its
magnanimity to terminate this exhausting controversy on that basis. To
promote this result by friendly counsel with the Government of Spain
will be the object of the Government of the United States.

In conducting the fiscal operations of the year it has been found
necessary to carry into full effect the act of the last session of
Congress authorizing a loan of $5 millions. This sum has been raised at
an average premium of $5.59 per centum upon stock bearing an interest at
the rate of 5% per annum, redeemable at the option of the Government
after January 1st, 1835.

There has been issued under the provisions of this act $4,735,296.30 of
5% stock, and there has been or will be redeemed during the year
$3,197,030.71 of Louisiana 6% deferred stock and Mississippi stock.
There has therefore been an actual increase of the public debt
contracted during the year of $1,538,266.69.

The receipts into the Treasury from the first of January to the 30th of
September last have amounted to $16,219,197.70, which, with the balance
of $1,198,461.21 in the Treasury on the former day, make the aggregate
sum of $17,417,658.91. The payments from the Treasury during the same
period have amounted to $15,655,288.47, leaving in the Treasury on the
last-mentioned day the sum of $1,762,370.44. It is estimated that the
receipts of the 4th quarter of the year will exceed the demands which
will be made on the Treasury during the same period, and that the amount
in the Treasury on the 30th of September last will be increased on the
first day of January next.

At the close of the last session it was anticipated that the progressive
diminution of the public revenue in 1819 and 1820, which had been the
result of the languid state of our foreign commerce in those years, had
in the latter year reached its extreme point of depression. It has,
however, been ascertained that that point was reached only at the
termination of the first quarter of the present year. From that time
until the 30th of September last the duties secured have exceeded those
of the corresponding quarters of the last year $1.172 millions, whilst
the amount of debentures issued during the three first quarters of this
year is $952,000 less than that of the same quarters of the last year.

There are just grounds to believe that the improvement which has
occurred in the revenue during the last-mentioned period will not only
be maintained, but that it will progressively increase through the next
and several succeeding years, so as to realize the results which were
presented upon that subject by the official reports of the Treasury at
the commencement of the last session of Congress.

Under the influence of the most unfavorable circumstances the revenue
for the next and subsequent years to the year 1825 will exceed the
demands at present authorized by law.

It may fairly be presumed that under the protection given to domestic
manufactures by the existing laws we shall become at no distant period a
manufacturing country on an extensive scale. Possessing as we do the raw
materials in such vast amount, with a capacity to augment them to an
indefinite extent; raising within the country aliment of every kind to
an amount far exceeding the demand for home consumption, even in the
most unfavorable years, and to be obtained always at a very moderate
price; skilled also, as our people are, in the mechanic arts and in
every improvement calculated to lessen the demand for and the price of
labor, it is manifest that their success in every branch of domestic
industry may and will be carried, under the encouragement given by the
present duties, to an extent to meet any demand which under a fair
competition may be made upon it.

A considerable increase of domestic manufactures, by diminishing the
importation of foreign, will probably tend to lessen the amount of the
public revenue. As, however, a large proportion of the revenue which is
derived from duties is raised from other articles than manufactures, the
demand for which will increase with our population, it is believed that
a fund will still be raised from that source adequate to the greater
part of the public expenditures, especially as those expenditures,
should we continue to be blessed with peace, will be diminished by the
completion of the fortifications, dock yards, and other public works, by
the augmentation of the Navy to the point to which it is proposed to
carry it, and by the payment of the public debt, including pensions for
military services.

It can not be doubted that the more complete our internal resources and
the less dependent we are on foreign powers for every national as well
as domestic purpose the greater and more stable will be the public
felicity. By the increase of domestic manufactures will the demand for
the rude materials at home be increased, and thus will the dependence of
the several parts of our Union on each other and the strength of the
Union itself be proportionably augmented.

In this process, which is very desirable, and inevitable under the
existing duties, the resources which obviously present themselves to
supply a deficiency in the revenue, should it occur, are the interests
which may derive the principal benefit from the change. If domestic
manufactures are raised by duties on foreign, the deficiency in the fund
necessary for public purposes should be supplied by duties on the
former.

At the last session it seemed doubtful whether the revenue derived from
the present sources would be adequate to all the great purposes of our
Union, including the construction of our fortifications, the
augmentation of the Navy, and the protection of our commerce against the
dangers to which it is exposed. Had the deficiency been such as to
subject us to the necessity either to abandon those measures of defense
or to resort to the other means for adequate funds, the course presented
to the adoption of a virtuous and enlightened people appeared to be a
plain one. It must be gratifying to all to know that this necessity does
not exist. Nothing, however, in contemplation of such important objects,
which can be easily provided for, should be left to hazard. It is
thought that the revenue may receive an augmentation from the existing
sources, and in a manner to aid our manufactures, without hastening
prematurely the result which has been suggested. It is believed that a
moderate additional duty on certain articles would have that effect,
without being liable to any serious objection.

The examination of the whole coast, for the construction of permanent
fortifications, from St. Croix to the Sabine, with the exception of part
of the territory lately acquired, will be completed in the present year,
as will be the survey of the Mississippi, under the resolution of the
House of Representatives, from the mouth of the Ohio to the ocean, and
likewise of the Ohio from Louisville to the Mississippi. A progress
corresponding with the sums appropriated has also been made in the
construction of these fortifications at the ports designated. As they
will form a system of defense for the whole maritime frontier, and in
consequence for the interior, and are to last for ages, the greatest
care has been taken to fix the position of each work and to form it on
such a scale as will be adequate to the purpose intended by it. All the
inlets and assailable parts of our Union have been minutely examined,
and positions taken with a view to the best effect, observing in every
instance a just regard for economy. Doubts, however, being entertained
as to the propriety of the position and extent of the work at Dauphine
Island, further progress in it was suspended soon after the last session
of Congress, and an order given to the Board of Engineers and Naval
Commissioners to make a further and more minute examination of it in
both respects, and to report the result without delay.

Due progress has been made in the construction of vessels of war
according to the law providing for the gradual augmentation of the Navy,
and to the extent of existing appropriations. The vessels authorized by
the act of 1820 have all been completed and are now in actual service.
None of the larger ships have been or will be launched for the present,
the object being to protect all which may not be required for immediate
service from decay by suitable buildings erected over them.

A squadron has been maintained, as heretofore, in the Mediterranean, by
means whereof peace has been preserved with the Barbary Powers. This
squadron has been reduced the present year to as small a force as is
compatible with the fulfillment of the object intended by it. From past
experience and the best information respecting the views of those powers
it is distinctly understood that should our squadron be withdrawn they
would soon recommence their hostilities and depredations upon our
commerce. Their fortifications have lately been rebuilt and their
maritime force increased.

It has also been found necessary to maintain a naval force on the
Pacific for the protection of the very important interests of our
citizens engaged in commerce and the fisheries in that sea. Vessels have
likewise been employed in cruising along the Atlantic coast, in the Gulf
of Mexico, on the coast of Africa, and in the neighboring seas. In the
latter many piracies have been committed on our commerce, and so
extensive was becoming the range of those unprincipled adventurers that
there was cause to apprehend, without a timely and decisive effort to
suppress them, the worst consequences would ensue. Fortunately, a
considerable check has been given to that spirit by our cruisers, who
have succeeded in capturing and destroying several of their vessels.
Nevertheless, it is considered an object of high importance to continue
these cruises until the practice is entirely suppressed.

Like success has attended our efforts to suppress the slave trade. Under
the flag of the United States and the sanction of their papers the trade
may be considered as entirely suppressed, and if any of our citizens are
engaged in it under the flags and papers of other powers, it is only
from a respect of those powers that these offenders are not seized and
brought home to receive the punishment which the laws inflict. If every
other power should adopt the same policy and pursue the same vigorous
means for carrying it into effect, the trade could no longer exist.

Deeply impressed with the blessings which we enjoy, and of which we have
such manifold proofs, my mind is irresistibly drawn to that Almighty
Being, the great source from whence they proceed and to whom our most
grateful acknowledgments are due.

***

State of the Union Address
James Monroe
December 3, 1822

Fellow-Citizens of the Senate and House of Representatives:

Many causes unite to make your present meeting peculiarly interesting to
out constituents. The operation of our laws on the various subjects to
which they apply, with the amendments which they occasionally require,
imposes annually an important duty on the representatives of a free
people.

Our system has happily advanced to such maturity that I am not aware
that your cares in that respect will be augmented. Other causes exist
which are highly interesting to the whole civilized world and to no
portion of it more so, in certain views, than to the United States. Of
these causes and of their bearing on the interests of our Union I shall
communicate the sentiments which I have formed with that freedom which a
sense of duty dictates. It is proper, however, to invite your attention
in the first instance to those concerns respecting which legislative
provision is thought to be particularly urgent.

On the 24th of June last a convention of navigation and commerce was
concluded in this city between the United States and France by ministers
duly authorized for the purpose. The sanction of the Executive having
been given to this convention under a conviction that, taking all its
stipulations into view, it rested essentially on a basis of reciprocal
and equal advantage, I deemed it my duty, in compliance with the
authority vested in the Executive by the second section of the act of
the last session of the 6th of May, concerning navigation, to suspend by
proclamation until the end of the next session of Congress the operation
of the act entitled "An act to impose a new tonnage duty on French ships
and vessels, and for other purposes", and to suspend likewise all other
duties on French vessels or the goods imported in them which exceeded
the duties on American vessels and on similar goods imported in them. I
shall submit this convention forthwith to the Senate for its advice and
consent as to the ratification.

Since your last session the prohibition which had been imposed on the
commerce between the United States and the British colonies in the West
Indies and on this continent has likewise been removed. Satisfactory
evidence having been adduced that the ports of those colonies had been
opened to the vessels of the United States by an act of the British
Parliament bearing date on the 24th of June last, on the conditions
specified therein, I deemed it proper, in compliance with the provision
of the first section of the act of the last session above recited, to
declare, by proclamation bearing date on the 24th of August last, that
the ports of the United States should thenceforward and until the end of
the next session of Congress be opened to the vessels of Great Britain
employed in that trade, under the limitation specified in that
proclamation.

A doubt was entertained whether the act of Congress applied to the
British colonies on this continent as well as to those in the West
Indies, but as the act of Parliament opened the intercourse equally with
both, and it was the manifest intention of Congress, as well as the
obvious policy of the United States, that the provisions of the act of
Parliament should be met in equal extent on the part of the United
States, and as also the act of Congress was supposed to vest in the
President some discretion in the execution of it, I thought it advisable
to give it a corresponding construction.

Should the constitutional sanction of the Senate be given to the
ratification of the convention with France, legislative provisions will
be necessary to carry it fully into effect, as it likewise will be to
continue in force, on such conditions as may be deemed just and proper,
the intercourse which has been opened between the United States and the
British colonies. Every light in the possession of the Executive will in
due time be communicated on both subjects.

Resting essentially on a basis of reciprocal and equal advantage, it has
been the object of the Executive in transactions with other powers to
meet the propositions of each with a liberal spirit, believing that
thereby the interest of our country would be most effectually promoted.
This course has been systematically pursued in the late occurrences with
France and Great Britain, and in strict accord with the views of the
Legislature. A confident hope is entertained that by the arrangement
thus commenced with each all differences respecting navigation and
commerce with the dominions in question will be adjusted, and a solid
foundation be laid for an active and permanent intercourse which will
prove equally advantageous to both parties.

The decision of His Imperial Majesty the Emperor of Russia on the
question submitted to him by the United States and Great Britain,
concerning the construction of the first article of the treaty of Ghent,
has been received. A convention has since been concluded between the
parties, under the mediation of His Imperial Majesty, to prescribe the
mode by which that article shall be carried into effect in conformity
with that decision. I shall submit this convention to the Senate for its
advice and consent as to the ratification, and, if obtained, shall
immediately bring the subject before Congress for such provisions as may
require the interposition of the Legislature.

In compliance with an act of the last session a Territorial Government
has been established in Florida on the principles of our system. By this
act the inhabitants are secured in the full enjoyment of their rights
and liberties, and to admission into the Union, with equal participation
in the Government with the original States on the conditions heretofore
prescribed to other Territories. By a clause in the 9th article of the
treaty with Spain, by which that Territory was ceded to the United
States, it is stipulated that satisfaction shall be made for the
injuries, if any, which by process of law shall be established to have
been suffered by the Spanish officers and individual Spanish inhabitants
by the late operations of our troops in Florida. No provision having yet
been made to carry that stipulation into effect, it is submitted to the
consideration of Congress whether it will not be proper to vest the
competent power in the district court at Pensacola, or in some tribunal
to be specially organized for the purpose.

The fiscal operations of the year have been more successful than had
been anticipated at the commencement of the last session of Congress.

The receipts into the Treasury during the three first quarters of the
year have exceeded the sum of $14.745 millions. The payments made at the
Treasury during the same period have exceeded $12.279 millions, leaving
the Treasury on the 30th day of September last, including $1,168,592.24
which were in the Treasury on the first day of January last, a sum
exceeding $4.128 millions.

Besides discharging all demands for the current service of the year,
including the interest and reimbursement of the public debt, the 6%
stock of 1796, amounting to $80,000, has been redeemed. It is estimated
that, after defraying the current expenses of the present quarter and
redeeming the $2 millions of 6% stock of 1820, there will remain in the
Treasury on the first of January next nearly $3 millions. It is
estimated that the gross amount of duties which have been secured from
the first of January to the 30th of September last has exceeded $19.5
millions, and the amount for the whole year will probably not fall short
of $23 millions.

Of the actual force in service under the present military establishment,
the posts at which it is stationed, and the condition of each post, a
report from the Secretary of War which is now communicated will give a
distinct idea. By like reports the state of the Academy at West Point
will be seen, as will be the progress which has been made on the
fortifications along the coast and at the national armories and
arsenals.

The organization of the several corps composing the Army is such as to
admit its expansion to a great extent in case of emergency, the officers
carrying with them all the light which they possess to the new corps to
which they might be appointed.

With the organization of the staff there is equal cause to be satisfied.
By the concentration of every branch with its chief in this city, in the
presence of the Department, and with a grade in the chief military
station to keep alive and cherish a military spirit, the greatest
promptitude in the execution of orders, with the greatest economy and
efficiency, are secured. The same view is taken of the Military Academy.
Good order is preserved in it, and the youth are well instructed in
every science connected with the great objects of the institution. They
are also well trained and disciplined in the practical parts of the
profession. It has been always found difficult to control the ardor
inseparable from that early age in such manner as to give it a proper
direction. The rights of manhood are too often claimed prematurely, in
pressing which too far the respect which is due to age and the obedience
necessary to a course of study and instruction in every such institution
are sometimes lost sight of. The great object to be accomplished is the
restraint of that ardor by such wise regulations and Government as, by
directing all the energies of the youthful mind to the attainment of
useful knowledge, will keep it within a just subordination and at the
same time elevate it to the highest purposes. This object seems to be
essentially obtained in this institution, and with great advantage to
the Union.

The Military Academy forms the basis, in regard to science, on which the
military establishment rests. It furnishes annually, after due
examination and on the report of the academic staff, many well-informed
youths to fill the vacancies which occur in the several corps of the
Army, while others who retire to private life carry with them such
attainments as, under the right reserved to the several States to
appoint the officers and to train the militia, will enable them, by
affording a wider field for selection, to promote the great object of
the power vested in Congress of providing for the organizing, arming,
and disciplining the militia. Thus by the mutual and harmonious
cooperation of the two governments in the execution of a power divided
between them, an object always to be cherished, the attainment of a
great result, on which our liberties may depend, can not fail to be
secured. I have to add that in proportion as our regular force is small
should the instruction and discipline of the militia, the great resource
on which we rely, be pushed to the utmost extent that circumstances will
admit.

A report from the Secretary of the Navy will communicate the progress
which has been made in the construction of vessels of war, with other
interesting details respecting the actual state of the affairs of that
Department. It has been found necessary for the protection of our
commerce to maintain the usual squadrons on the Mediterranean, the
Pacific, and along the Atlantic coast, extending the cruises of the
latter into the West Indies, where piracy, organized into a system, has
preyed on the commerce of every country trading thither. A cruise has
also been maintained on the coast of Africa, when the season would
permit, for the suppression of the slave trade, and orders have been
given to the commanders of all our public ships to seize our own
vessels, should they find any engaging in that trade, and to bring them
in for adjudication.

In the West Indies piracy is of recent date, which may explain the cause
why other powers have not combined against it. By the documents
communicated it will be seen that the efforts of the United States to
suppress it have had a very salutary effect. The benevolent provision of
the act under which the protection has been extended alike to the
commerce of other nations can not fail to be duly appreciated by them.

In compliance with the act of the last session entitled "An act to
abolish the United States trading establishments", agents were
immediately appointed and instructed, under the direction of the
Secretary of the Treasury, to close the business of the trading houses
among the Indian tribes and to settle the accounts of the factors and
sub-factors engaged in that trade, and to execute in all other respects
the injunction of that act in the mode prescribed therein. A final
report of their proceedings shall be communicated to Congress as soon as
it is received.

It is with great regret I have to state that a serious malady has
deprived us of many valuable citizens of Pensacola and checked the
progress of some of those arrangements which are important to the
Territory. This effect has been sensibly felt in respect to the Indians
who inhabit that Territory, consisting of the remnants of the several
tribes who occupy the middle ground between St. Augustine and Pensacola,
with extensive claims but undefined boundaries. Although peace is
preserved with those Indians, yet their position and claims tend
essentially to interrupt the intercourse between the eastern and western
parts of the Territory, on which our inhabitants are principally
settled. It is essential to the growth and prosperity of the Territory,
as well as to the interests of the Union, that those Indians should be
removed, by special compact with them, to some other position or
concentration within narrower limits where they are. With the limited
means in the power of the Executive, instructions were given to the
governor to accomplish this object so far as it might be practicable,
which was prevented by the distressing malady referred to. To carry it
fully into effect in either mode additional funds will be necessary, to
the provision of which the powers of Congress are competent. With a view
to such provision as may be deemed proper, the subject is submitted to
your consideration, and in the interim further proceedings are
suspended.

It appearing that so much of the act entitled "An act regulating the
staff of the Army", which passed on April 14, 1818, as relates to the
commissariat will expire in April next, and the practical operation of
that department having evinced its great utility, the propriety of its
renewal is submitted to your consideration.

The view which has been taken of the probable productiveness of the lead
mines, connected with the importance of the material to the public
defense, makes it expedient that they should be managed with peculiar
care. It is therefore suggested whether it will not comport with the
public interest to provide by law for the appointment of an agent
skilled in mineralogy to superintend them, under the direction of the
proper department.

It is understood that the Cumberland road, which was constructed at
great expense, has already suffered from the want of that regular
superintendence and of those repairs which are indispensable to the
preservation of such a work. This road is of incalculable advantage in
facilitating the intercourse between the Western and the Atlantic
States. Through the whole country from the northern extremity of Lake
Erie to the Mississippi, and from all the waters which empty into each,
finds an easy and direct communication to the seat of Government, and
thence to the Atlantic. The facility which it affords to all military
and commercial operations, and also to those of the Post Office
Department, can not be estimated too highly. This great work is likewise
an ornament and an honor to the nation.

Believing that a competent power to adopt and execute a system of
internal improvement has not been granted to Congress, but that such a
power, confined to great national purposes and with proper limitations,
would be productive of eminent advantage to our Union, I have thought it
advisable that an amendment of the Constitution to that effect should be
recommended to the several States.

A bill which assumed the right to adopt and execute such a system having
been presented for my signature at the last session, I was compelled,
from the view which I had taken of the powers of the General Government,
to negative it, on which occasion I thought it proper to communicate the
sentiments which I had formed, on mature consideration, on the whole
subject. To that communication, in all the views in which the great
interest to which it relates may be supposed to merit your attention, I
have now to refer. Should Congress, however, deem it improper to
recommend such an amendment, they have, according to my judgment, the
right to keep the road in repair by providing for the superintendence of
it and appropriating the money necessary for repairs. Surely if they had
the right to appropriate money to make the road they have a right to
appropriate it to preserve the road from ruin. From the exercise of this
power no danger is to be apprehended.

Under our happy system the people are the sole and exclusive fountain of
power. Each Government originates from them, and to them alone, each to
its proper constituents, are they respectively and solely responsible
for the faithful discharge of their duties within their constitutional
limits; and that the people will confine their public agents of every
station to the strict line of their constitutional duties there is no
cause of doubt.

Having, however, communicated my sentiments to Congress at the last
session fully in the document to which I have referred, respecting the
right of appropriation as distinct from the right of jurisdiction and
sovereignty over the territory in question, I deem it improper to
enlarge on the subject here.

From the best information I have been able to obtain it appears that our
manufactures, though depressed immediately after the peace, have
considerably increased, and are still increasing, under the
encouragement given them by the tariff of 1816 and by subsequent laws.
Satisfied I am, whatever may be the abstract doctrine in favor of
unrestricted commerce, provided all nations would concur in it and it
was not liable to be interrupted by war, which has never occurred and
can not be expected, that there are other strong reasons applicable to
our situation and relations with other countries which impose on us the
obligation to cherish and sustain our manufactures.

Satisfied, however, I likewise am that the interest of every part of our
Union, even of those most benefitted by manufactures, requires that this
subject should be touched with the greatest caution, and a critical
knowledge of the effect to be produced by the slightest change. On full
consideration of the subject in all its relations I am persuaded that a
further augmentation may now be made of the duties on certain foreign
articles in favor of our own and without affecting injuriously any other
interest. For more precise details I refer you to the communications
which were made to Congress during the last session.

So great was the amount of accounts for moneys advanced during the late
war, in addition to others of a previous date which in the regular
operations of the Government necessarily remained unsettled, that it
required a considerable length of time for their adjustment. By a report
from the first Comptroller of the Treasury it appears that on March 4th,
1817, the accounts then unsettled amounted to $103,068,876.41, of which
on September 30th, 1822, $93,175,396.56 had been settled, leaving on
that day a balance unsettled of $9,893,479.85. That there have been
drawn from the Treasury, in paying the public debt and sustaining the
Government in all its operations and disbursements, since March 4th,
1817, $157,199,380.96, the accounts for which have been settled to the
amount of $137,501,451.12, leaving a balance unsettled of
$19,697,929.84. For precise details respecting each of these balances I
refer to the report of the Comptroller and the documents which accompany
it.

From this view it appears that our commercial differences with France
and Great Britain have been placed in a train of amicable arrangement on
conditions fair and honorable in both instances to each party; that our
finances are in a very productive state, our revenue being at present
fully competent to all the demands upon it; that our military force is
well organized in all its branches and capable of rendering the most
important service in case of emergency that its number will admit of;
that due progress has been made, under existing appropriations, in the
construction of fortifications and in the operations of the Ordnance
Department; that due progress has in like manner been made in the
construction of ships of war; that our Navy is in the best condition,
felt and respected in every sea in which it is employed for the
protection of our commerce; that our manufactures have augmented in
amount and improved in quality; that great progress has been made in the
settlement of accounts and in the recovery of the balances due by
individuals, and that the utmost economy is secured and observed in
every Department of the Administration. Other objects will likewise
claim your attention, because from the station which the United States
hold as a member of the great community of nations they have rights to
maintain, duties to perform, and dangers to encounter.

A strong hope was entertained that peace would ere this have been
concluded between Spain and the independent governments south of the
United States in this hemisphere. Long experience having evinced the
competency of those governments to maintain the independence which they
had declared, it was presumed that the considerations which induced
their recognition by the United States would have had equal weight with
other powers, and that Spain herself, yielding to those magnanimous
feelings of which her history furnishes so many examples, would have
terminated on that basis a controversy so unavailing and at the same
time so destructive. We still cherish the hope that this result will not
long be postponed.

Sustaining our neutral position and allowing to each party while the war
continues equal rights, it is incumbent on the United States to claim of
each with equal rigor the faithful observance of our rights according to
the well-known law of nations. From each, therefore, a like cooperation
is expected in the suppression of the piratical practice which has grown
out of this war and of blockades of extensive coasts on both seas,
which, considering the small force employed to sustain them, have not
the slightest foundation to rest on.

Europe is still unsettled, and although the war long menaced between
Russia and Turkey has not broken out, there is no certainty that the
differences between those powers will be amicably adjusted. It is
impossible to look to the oppressions of the country respecting which
those differences arose without being deeply affected. The mention of
Greece fills the mind with the most exalted sentiments and arouses in
our bosoms the best feelings of which our nature is susceptible.
Superior skill and refinement in the arts, heroic gallantry in action,
disinterested patriotism, enthusiastic zeal and devotion in favor of
public and personal liberty are associated with our recollections of
ancient Greece. That such a country should have been overwhelmed and so
long hidden, as it were, from the world under a gloomy despotism has
been a cause of unceasing and deep regret to generous minds for ages
past. It was natural, therefore, that the reappearance of those people
in their original character, contending in favor of their liberties,
should produce that great excitement and sympathy in their favor which
have been so signally displayed throughout the United States. A strong
hope is entertained that these people will recover their independence
and resume their equal station among the nations of the earth.

A great effort has been made in Spain and Portugal to improve the
condition of the people, and it must be very consoling to all benevolent
minds to see the extraordinary moderation with which it has been
conducted. That it may promote the happiness of both nations is the
ardent wish of this whole people, to the expression of which we confine
ourselves; for whatever may be the feelings or sentiments which every
individual under our Government has a right to indulge and express, it
is nevertheless a sacred maxim, equally with the Government and people,
that the destiny of every independent nation in what relates to such
improvements of right belongs and ought to be left exclusively to
themselves.

Whether we reason from the late wars or from those menacing symptoms
which now appear in Europe, it is manifest that if a convulsion should
take place in any of those countries it will proceed from causes which
have no existence and are utterly unknown in these States, in which
there is but one order, that of the people, to whom the sovereignty
exclusively belongs.

Should war break out in any of those countries who can foretell the
extent to which it may be carried or the desolation which it may spread?
Exempt as we are from these causes, our internal tranquillity is secure;
and distant as we are from the troubled scene, and faithful to first
principles in regard to other powers, we might reasonably presume that
we should not be molested by them. This, however, ought not to be
calculated on as certain. Unprovoked injuries are often inflicted and
even the peculiar felicity of our situation might with some be a cause
for excitement and aggression.

The history of the late wars in Europe furnishes a complete
demonstration that no system of conduct, however correct in principle,
can protect neutral powers from injury from any party; that a
defenseless position and distinguished love of peace are the surest
invitations to war, and that there is no way to avoid it other than by
being always prepared and willing for just cause to meet it. If there be
a people on earth whose more especial duty it is to be at all times
prepared to defend the rights with which they are blessed, and to
surpass all others in sustaining the necessary burthens, and in
submitting to sacrifices to make such preparations, it is undoubtedly
the people of these States.

When we see that a civil war of the most frightful character rages from
the Adriatic to the Black Sea; that strong symptoms of war appear in
other parts, proceeding from causes which, should it break out, may
become general and be of long duration; that the war still continues
between Spain and the independent governments, her late Provinces, in
this hemisphere; that it is likewise menaced between Portugal and
Brazil, in consequence of the attempt of the latter to dismember itself
from the former, and that a system of piracy of great extent is
maintained in the neighboring seas, which will require equal vigilance
and decision to suppress it, the reasons for sustaining the attitude
which we now hold and for pushing forward all our measures of defense
with the utmost vigor appear to me to acquire new force.

The United States owe to the world a great example, and, by means
thereof, to the cause of liberty and humanity a generous support. They
have so far succeeded to the satisfaction of the virtuous and
enlightened of every country. There is no reason to doubt that their
whole movement will be regulated by a sacred regard to principle, all
our institutions being founded on that basis. The ability to support our
own cause under any trial to which it may be exposed is the great point
on which the public solicitude rests.

It has been often charged against free governments that they have
neither the foresight nor the virtue to provide at the proper season for
great emergencies; that their course is improvident and expensive; that
war will always find them unprepared, and, whatever may be its
calamities, that its terrible warnings will be disregarded and forgotten
as soon as peace returns. I have full confidence that this charge so far
as relates to the United States will be shewn to be utterly destitute of
truth.

***

State of the Union Address
James Monroe
December 2, 1823

Fellow-Citizens of the Senate and House of Representatives:

Many important subjects will claim your attention during the present
session, of which I shall endeavor to give, in aid of your
deliberations, a just idea in this communication. I undertake this duty
with diffidence, from the vast extent of the interests on which I have
to treat and of their great importance to every portion of our Union. I
enter on it with zeal from a thorough conviction that there never was a
period since the establishment of our Revolution when, regarding the
condition of the civilized world and its bearing on us, there was
greater necessity for devotion in the public servants to their
respective duties, or for virtue, patriotism, and union in our
constituents.

Meeting in you a new Congress, I deem it proper to present this view of
public affairs in greater detail than might otherwise be necessary. I do
it, however, with peculiar satisfaction, from a knowledge that in this
respect I shall comply more fully with the sound principles of our
Government.

The people being with us exclusively the sovereign, it is indispensable
that full information be laid before them on all important subjects, to
enable them to exercise that high power with complete effect. If kept in
the dark, they must be incompetent to it. We are all liable to error,
and those who are engaged in the management of public affairs are more
subject to excitement and to be led astray by their particular interests
and passions than the great body of our constituents, who, living at
home in the pursuit of their ordinary avocations, are calm but deeply
interested spectators of events and of the conduct of those who are
parties to them.

To the people every department of the Government and every individual in
each are responsible, and the more full their information the better
they can judge of the wisdom of the policy pursued and of the conduct of
each in regard to it. From their dispassionate judgment much aid may
always be obtained, while their approbation will form the greatest
incentive and most gratifying reward for virtuous actions, and the dread
of their censure the best security against the abuse of their
confidence. Their interests in all vital questions are the same, and the
bond, by sentiment as well as by interest, will be proportionably
strengthened as they are better informed of the real state of public
affairs, especially in difficult conjunctures. It is by such knowledge
that local prejudices and jealousies are surmounted, and that a national
policy extending its fostering care and protection to all the great
interests of our Union, is formed and steadily adhered to.

A precise knowledge of our relations with foreign powers as respects our
negotiations and transactions with each is thought to be particularly
necessary. Equally necessary is it that we should form a just estimate
of our resources, revenue, and progress in every kind of improvement
connected with the national prosperity and public defense. It is by
rendering justice to other nations that we may expect it from them. It
is by our ability to resent injuries and redress wrongs that we may
avoid them.

The commissioners under the 5th article of the treaty of Ghent, having
disagreed in their opinions respecting that portion of the boundary
between the Territories of the United States and of Great Britain the
establishment of which had been submitted to them, have made their
respective reports in compliance with that article, that the same might
be referred to the decision of a friendly power. It being manifest,
however, that it would be difficult, if not impossible, for any power to
perform that office without great delay and much inconvenience to
itself, a proposal has been made by this Government, and acceded to by
that of Great Britain, to endeavor to establish that boundary by
amicable negotiation.

It appearing from long experience that no satisfactory arrangement could
be formed of the commercial intercourse between the United States and
the British colonies in this hemisphere by legislative acts while each
party pursued its own course without agreement or concert with the
other, a proposal has been made to the British Government to regulate
this commerce by treaty, as it has been to arrange in like manner the
just claim of the citizens of the United States inhabiting the States
and Territories bordering on the lakes and rivers which empty into the
St. Lawrence to the navigation of that river to the ocean. For these and
other objects of high importance to the interests of both parties a
negotiation has been opened with the British Government which it is
hoped will have a satisfactory result.

The commissioners under the 6th and 7th articles of the treaty of Ghent
having successfully closed their labors in relation to the 6th, have
proceeded to the discharge of those relating to the 7th. Their progress
in the extensive survey required for the performance of their duties
justifies the presumption that it will be completed in the ensuing year.

The negotiation which had been long depending with the French Government
on several important subjects, and particularly for a just indemnity for
losses sustained in the late wars by the citizens of the United States
under unjustifiable seizures and confiscations of their property, has
not as yet had the desired effect. As this claim rests on the same
principle with others which have been admitted by the French Government,
it is not perceived on what just ground it can be rejected. A minister
will be immediately appointed to proceed to France and resume the
negotiation on this and other subjects which may arise between the two
nations.

At the proposal of the Russian Imperial Government, made through the
minister of the Emperor residing here, a full power and instructions
have been transmitted to the minister of the United States at St.
Petersburg to arrange by amicable negotiation the respective rights and
interests of the two nations on the North West coast of this continent.
A similar proposal had been made by His Imperial Majesty to the
Government of Great Britain, which has likewise been acceded to. The
Government of the United States has been desirous by this friendly
proceeding of manifesting the great value which they have invariably
attached to the friendship of the Emperor and their solicitude to
cultivate the best understanding with his Government. In the discussions
to which this interest has given rise and in the arrangements by which
they may terminate the occasion has been judged proper for asserting, as
a principle in which the rights and interests of the United States are
involved, that the American continents, by the free and independent
condition which they have assumed and maintain, are henceforth not to be
considered as subjects for future colonization by any European powers.

Since the close of the last session of Congress the commissioners and
arbitrators for ascertaining and determining the amount of
indemnification which may be due to citizens of the United States under
the decision of His Imperial Majesty the Emperor of Russia, in
conformity to the convention concluded at St. Petersburg on July 12th,
1822, have assembled in this city, and organized themselves as a board
for the performance of the duties assigned to them by that treaty. The
commission constituted under the 11th article of the treaty of February
22nd, 1819, between the United States and Spain is also in session here,
and as the term of three years limited by the treaty for the execution
of the trust will expire before the period of the next regular meeting
of Congress, the attention of the Legislature will be drawn to the
measures which may be necessary to accomplish the objects for which the
commission was instituted.

In compliance with a resolution of the House of Representatives adopted
at their last session, instructions have been given to all the ministers
of the United States accredited to the powers of Europe and America to
propose the proscription of the African slave trade by classing it under
the denomination, and inflicting on its perpetrators the punishment, of
piracy. Should this proposal be acceded to, it is not doubted that this
odious and criminal practice will be promptly and entirely suppressed.
It is earnestly hoped that it will be acceded to, from the firm belief
that it is the most effectual expedient that can be adopted for the
purpose.

At the commencement of the recent war between France and Spain it was
declared by the French Government that it would grant no commissions to
privateers, and that neither the commerce of Spain herself nor of
neutral nations should be molested by the naval force of France, except
in the breach of a lawful blockade. This declaration, which appears to
have been faithfully carried into effect, concurring with principles
proclaimed and cherished by the United States from the first
establishment of their independence, suggested the hope that the time
had arrived when the proposal for adopting it as a permanent and
invariable rule in all future maritime wars might meet the favorable
consideration of the great European powers. Instructions have
accordingly been given to our ministers with France, Russia, and Great
Britain to make those proposals to their respective Governments, and
when the friends of humanity reflect on the essential amelioration to
the condition of the human race which would result from the abolition of
private war on the sea and on the great facility by which it might be
accomplished, requiring only the consent of a few sovereigns, an earnest
hope is indulged that these overtures will meet with an attention
animated by the spirit in which they were made, and that they will
ultimately be successful.

The ministers who were appointed to the Republics of Colombia and Buenos
Ayres during the last session of Congress proceeded shortly afterwards
to their destinations. Of their arrival there official intelligence has
not yet been received. The minister appointed to the Republic of Chile
will sail in a few days. An early appointment will also be made to
Mexico. A minister has been received from Colombia, and the other
Governments have been informed that ministers, or diplomatic agents of
inferior grade, would be received from each, accordingly as they might
prefer the one or the other.

The minister appointed to Spain proceeded soon after his appointment for
Cadiz, the residence of the Sovereign to whom he was accredited. In
approaching that port the frigate which conveyed him was warned off by
the commander of the French squadron by which it was blockaded and not
permitted to enter, although apprised by the captain of the frigate of
the public character of the person whom he had on board, the landing of
whom was the sole object of his proposed entry. This act, being
considered an infringement of the rights of ambassadors and of nations,
will form a just cause of complaint to the Government of France against
the officer by whom it was committed.

The actual condition of the public finances more than realizes the
favorable anticipations that were entertained of it at the opening of
the last session of Congress. On the first of January there was a
balance in the Treasury of $4,237,427.55. From that time to the 30th of
September the receipts amounted to upward of $16.1 millions, and the
expenditures to $11.4 millions. During the 4th quarter of the year it is
estimated that the receipts will at least equal the expenditures, and
that there will remain in the Treasury on the first day of January next
a surplus of nearly $9 millions.

On January 1st, 1825, a large amount of the war debt and a part of the
Revolutionary debt become redeemable. Additional portions of the former
will continue to become redeemable annually until the year 1835. it is
believed, however, that if the United States remain at peace the whole
of that debt may be redeemed by the ordinary revenue of those years
during that period under the provision of the act of March 3rd, 1817,
creating the sinking fund, and in that case the only part of the debt
that will remain after the year 1835 will be the $7 millions of 5% stock
subscribed to the Bank of the United States, and the 3% Revolutionary
debt, amounting to $13,296,099.06, both of which are redeemable at the
pleasure of the Government.

The state of the Army in its organization and discipline has been
gradually improving for several years, and has now attained a high
degree of perfection. The military disbursements have been regularly
made and the accounts regularly and promptly rendered for settlement.
The supplies of various descriptions have been of good quality, and
regularly issued at all of the posts. A system of economy and
accountability has been introduced into every branch of the service
which admits of little additional improvement. This desirable state has
been attained by the act reorganizing the staff of the Army, passed on
April 14th, 1818.

The moneys appropriated for fortifications have been regularly and
economically applied, and all the works advanced as rapidly as the
amount appropriated would admit. Three important works will be completed
in the course of this year--that is, Fort Washington, Fort Delaware, and
the fort at the Rigolets, in Louisiana.

The Board of Engineers and the Topographical Corps have been in constant
and active service in surveying the coast and projecting the works
necessary for its defense.

The Military Academy has attained a degree of perfection in its
discipline and instruction equal, as is believed, to any institution of
its kind in any country.

The money appropriated for the use of the Ordnance Department has been
regularly and economically applied. The fabrication of arms at the
national armories and by contract with the Department has been gradually
improving in quality and cheapness. It is believed that their quality is
now such as to admit of but little improvement.

The completion of the fortifications renders it necessary that there
should be a suitable appropriation for the purpose of fabricating the
cannon and carriages necessary for those works.

Under the appropriation of $5,000 for exploring the Western waters for
the location of a site for a Western armory, a commission was
constituted, consisting of Colonel McRee, Colonel Lee, and Captain
Talcott, who have been engaged in exploring the country. They have not
yet reported the result of their labors, but it is believed that they
will be prepared to do it at an early part of the session of Congress.

During the month of June last General Ashley and his party, who were
trading under a license from the Government, were attacked by the
Ricarees while peaceably trading with the Indians at their request.
Several of the party were killed and wounded and their property taken or
destroyed.

Colonel Leavenworth, who commanded Fort Atkinson, at the Council Bluffs,
the most western post, apprehending that the hostile spirit of the
Ricarees would extend to other tribes in that quarter, and that thereby
the lives of the traders on the Missouri and the peace of the frontier
would be endangered, took immediate measures to check the evil.

With a detachment of the regiment stationed at the Bluffs he
successfully attacked the Ricaree village, and it is hoped that such an
impression has been made on them as well as on the other tribes on the
Missouri as will prevent a recurrence of future hostility.

The report of the Secretary of War, which is herewith transmitted, will
exhibit in greater detail the condition of the Department in its various
branches, and the progress which has been made in its administration
during the three first quarters of the year.

I transmit a return of the militia of the several States according to
the last reports which have been made by the proper officers in each to
the Department of War. By reference to this return it will be seen that
it is not complete, although great exertions have been made to make it
so. As the defense and even the liberties of the country must depend in
times of imminent danger on the militia, it is of the highest importance
that it be well organized, armed, and disciplined throughout the Union.

The report of the Secretary of War shews the progress made during the
three first quarters of the present year by the application of the fund
appropriated for arming the militia. Much difficulty is found in
distributing the arms according to the act of Congress providing for it
from the failure of the proper departments in many of the States to make
regular returns. The act of May 12, 1820 provides that the system of
tactics and regulations of the various corps of the Regular Army shall
be extended to the militia. This act has been very imperfectly executed
from the want of uniformity in the organization of the militia,
proceeding from the defects of the system itself, and especially in its
application to that main arm of the public defense. It is thought that
this important subject in all its branches merits the attention of
Congress.

The report of the Secretary of the Navy, which is now communicated,
furnishes an account of the administration of that Department for the
three first quarters of the present year, with the progress made in
augmenting the Navy, and the manner in which the vessels in commission
have been employed.

The usual force has been maintained in the Mediterranean Sea, the
Pacific Ocean, and along the Atlantic coast, and has afforded the
necessary protection to our commerce in those seas.

In the West Indies and the Gulf of Mexico our naval force has been
augmented by the addition of several small vessels provided for by the
"act authorizing an additional naval force for the suppression of
piracy", passed by Congress at their last session. That armament has
been eminently successful in the accomplishment of its object. The
piracies by which our commerce in the neighborhood of the island of Cuba
had been afflicted have been repressed and the confidence of our
merchants in a great measure restored.

The patriotic zeal and enterprise of Commodore Porter, to whom the
command of the expedition was confided, has been fully seconded by the
officers and men under his command. And in reflecting with high
satisfaction on the honorable manner in which they have sustained the
reputation of their country and its Navy, the sentiment is alloyed only
by a concern that in the fulfillment of that arduous service the
diseases incident to the season and to the climate in which it was
discharged have deprived the nation of many useful lives, and among them
of several officers of great promise.

In the month of August a very malignant fever made its appearance at
Thompsons Island, which threatened the destruction of our station there.
Many perished, and the commanding officer was severely attacked.
Uncertain as to his fate and knowing that most of the medical officers
had been rendered incapable of discharging their duties, it was thought
expedient to send to that post an officer of rank and experience, with
several skilled surgeons, to ascertain the origin of the fever and the
probability of its recurrence there in future seasons; to furnish every
assistance to those who were suffering, and, if practicable, to avoid
the necessity of abandoning so important a station. Commodore Rodgers,
with a promptitude which did him honor, cheerfully accepted that trust,
and has discharged it in the manner anticipated from his skill and
patriotism. Before his arrival Commodore Porter, with the greater part
of the squadron, had removed from the island and returned to the United
States in consequence of the prevailing sickness. Much useful
information has, however, been obtained as to the state of the island
and great relief afforded to those who had been necessarily left there.

Although our expedition, cooperating with an invigorated administration
of the government of the island of Cuba, and with the corresponding
active exertions of a British naval force in the same seas, have almost
entirely destroyed the unlicensed piracies from that island, the success
of our exertions has not been equally effectual to suppress the same
crime, under other pretenses and colors, in the neighboring island of
Porto Rico. They have been committed there under the abusive issue of
Spanish commissions.

At an early period of the present year remonstrances were made to the
governor of that island, by an agent who was sent for the purpose,
against those outrages on the peaceful commerce of the United States, of
which many had occurred. That officer, professing his own want of
authority to make satisfaction for our just complaints, answered only by
a reference of them to the Government of Spain. The minister of the
United States to that court was specially instructed to urge the
necessity of immediate and effectual interposition of that Government,
directing restitution and indemnity for wrongs already committed and
interdicting the repetition of them. The minister, as has been seen, was
debarred access to the Spanish Government, and in the mean time several
new cases of flagrant outrage have occurred, and citizens of the United
States in the island of Porto Rico have suffered, and others been
threatened with assassination for asserting their unquestionable rights
even before the lawful tribunals of the country.

The usual orders have been given to all our public ships to seize
American vessels in the slave trade and bring them in for adjudication,
and I have the gratification to state that not one so employed has been
discovered, and there is good reason to believe that our flag is now
seldom, if at all, disgraced by that traffic.

It is a source of great satisfaction that we are always enabled to recur
to the conduct of our Navy with price and commendation. As a means of
national defense it enjoys the public confidence, and is steadily
assuming additional importance. It is submitted whether a more efficient
and equally economical organization of it might not in several respects
be effected. It is supposed that higher grades than now exist by law
would be useful. They would afford well-merited rewards to those who
have long and faithfully served their country, present the best
incentives to good conduct, and the best means of insuring a proper
discipline; destroy the inequality in that respect between military and
naval services, and relieve our officers from many inconveniences and
mortifications which occur when our vessels meet those of other nations,
ours being the only service in which such grades do not exist.

A report of the Post Master-General, which accompanies this
communication, will shew the present state of the Post-Office Department
and its general operations for some years past.

There is established by law 88,600 miles of post roads, on which the
mail is now transported 85,700 miles, and contracts have been made for
its transportation on all the established routes, with one or two
exceptions. There are 5,240 post offices in the Union, and as many post
masters. The gross amount of postage which accrued from July 1st, 1822
to July 1st, 1823 was $1,114,345.12. During the same period the
expenditures of the Post-Office Department amounted to $1,169,885.51 and
consisted of the following items, viz: Compensation to post masters,
$353,995.98; incidental expenses, $30,866.37; transportation of the
mail, $784,600.08; payments into the Treasury, $423.08. On the first of
July last there was due to the Department from post masters $135,245.28;
from late post masters and contractors, $256,749.31; making a total
amount of balances due to the Department of $391,994.59.

These balances embrace all delinquencies of post masters and contractors
which have taken place since the organization of the Department. There
was due by the Department to contractors on the first of July last
$26,548.64.

The transportation of the mail within five years past has been greatly
extended, and the expenditures of the Department proportionably
increased. Although the postage which has accrued within the last three
years has fallen short of the expenditures $262,821.46, it appears that
collections have been made from the outstanding balances to meet the
principal part of the current demands.

It is estimated that not more than $250,000 of the above balances can be
collected, and that a considerable part of this sum can only be realized
by a resort to legal process. Some improvements in the receipts for
postage is expected. A prompt attention to the collection of moneys
received by post masters, it is believed, will enable the Department to
continue its operations without aid from the Treasury, unless the
expenditures shall be increased by the establishment of new mail routes.

A revision of some parts of the post office law may be necessary; and it
is submitted whether it would not be proper to provide for the
appointment of post masters, where the compensation exceeds a certain
amount, by nomination to the Senate, as other officers of the General
Government are appointed.

Having communicated my views to Congress at the commencement of the last
session respecting the encouragement which ought to be given to our
manufactures and the principle on which it should be founded, I have
only to add that those views remain unchanged, and that the present
state of those countries with which we have the most immediate political
relations and greatest commercial intercourse tends to confirm them.
Under this impression I recommend a review of the tariff for the purpose
of affording such additional protection to those articles which we are
prepared to manufacture, or which are more immediately connected with
the defense and independence of the country.

The actual state of the public accounts furnishes additional evidence of
the efficiency of the present system of accountability in relation to
the public expenditure. Of the moneys drawn from the Treasury since
March 4th, 1817, the sum remaining unaccounted for on the 30th of
September last is more than $1.5 millions less than on the 30th of
September preceding; and during the same period a reduction of nearly $1
million has been made in the amount of the unsettled accounts for moneys
advanced previously to March 4th, 1817. It will be obvious that in
proportion as the mass of accounts of the latter description is
diminished by settlement the difficulty of settling the residue is
increased from the consideration that in many instances it can be
obtained only by legal process. For more precise details on this subject
I refer to a report from the first Comptroller of the Treasury.

The sum which was appropriated at the last session for the repairs of
the Cumberland road has been applied with good effect to that object. A
final report has not been received from the agent who was appointed to
superintend it. As soon as it is received it shall be communicated to
Congress.

Many patriotic and enlightened citizens who have made the subject an
object of particular investigation have suggested an improvement of
still greater importance. They are of the opinion that the waters of the
Chesapeake and Ohio may be connected together by one continued canal,
and at an expense far short of the value and importance of the object to
be obtained. If this could be accomplished it is impossible to calculate
the beneficial consequences which would result from it.

A great portion of the produce of the very fertile country through which
it would pass would find a market through that channel. Troops might be
moved with great facility in war, with cannon and every kind of
munition, and in either direction. Connecting the Atlantic with the
Western country in a line passing through the seat of the National
Government, it would contribute essentially to strengthen the bond of
union itself.

Believing as I do that Congress possess the right to appropriate money
for such a national object (the jurisdiction remaining to the States
through which the canal would pass), I submit it to your consideration
whether it may not be advisable to authorize by an adequate
appropriation the employment of a suitable number of the officers of the
Corps of Engineers to examine the unexplored ground during the next
season and to report their opinion thereon. It will likewise be proper
to extend their examination to the several routes through which the
waters of the Ohio may be connected by canals with those of Lake Erie.

As the Cumberland road will require annual repairs, and Congress have
not thought it expedient to recommend to the States an amendment to the
Constitution for the purpose of vesting in the United States a power to
adopt and execute a system of internal improvement, it is also submitted
to your consideration whether it may not be expedient to authorize the
Executive to enter into an arrangement with the several States through
which the road passes to establish tolls, each within its limits, for
the purpose of defraying the expense of future repairs and of providing
also by suitable penalties for its protection against future injuries.

The act of Congress of May 7th, 1822, appropriated the sum of $22,700
for the purpose of erecting two piers as a shelter for vessels from ice
near Cape Henlopen, Delaware Bay. To effect the object of the act the
officers of the Board of Engineers, with Commodore Bainbridge, were
directed to prepare plans and estimates of piers sufficient to answer
the purpose intended by the act. It appears by their report, which
accompanies the documents from the War Department, that the
appropriation is not adequate to the purpose intended; and as the piers
would be of great service both to the navigation of the Delaware Bay and
the protection of vessels on the adjacent parts of the coast, I submit
for the consideration of Congress whether additional and sufficient
appropriations should not be made.

The Board of Engineers were also directed to examine and survey the
entrance of the harbor of the port of Presqu'isle, in Pennsylvania, in
order to make an estimate of the expense of removing the obstructions to
the entrance, with a plan of the best mode of effecting the same, under
the appropriation for that purpose by act of Congress passed 3rd of
March last. The report of the Board accompanies the papers from the War
Department, and is submitted for the consideration of Congress.

A strong hope has been long entertained, founded on the heroic struggle
of the Greeks, that they would succeed in their contest and resume their
equal station among the nations of the earth. It is believed that the
whole civilized world take a deep interest in their welfare. Although no
power has declared in their favor, yet none according to our
information, has taken part against them. Their cause and their name
have protected them from dangers which might ere this have overwhelmed
any other people. The ordinary calculations of interest and of
acquisition with a view to aggrandizement, which mingles so much in the
transactions of nations, seem to have had no effect in regard to them.
From the facts which have come to our knowledge there is good cause to
believe that their enemy has lost forever all dominion over them; that
Greece will become again an independent nation. That she may obtain that
rank is the object of our most ardent wishes.

It was stated at the commencement of the last session that a great
effort was then making in Spain and Portugal to improve the condition of
the people of those countries, and that it appeared to be conducted with
extraordinary moderation. It need scarcely be remarked that the result
has been so far very different from what was then anticipated. Of events
in that quarter of the globe, with which we have so much intercourse and
from which we derive our origin, we have always been anxious and
interested spectators.

The citizens of the United States cherish sentiments the most friendly
in favor of the liberty and happiness of their fellow men on that side
of the Atlantic. In the wars of the European powers in matters relating
to themselves we have never taken any part, nor does it comport with our
policy so to do.

It is only when our rights are invaded or seriously menaced that we
resent injuries or make preparation for our defense. With the movements
in this hemisphere we are of necessity more immediately connected, and
by causes which must be obvious to all enlightened and impartial
observers.

The political system of the allied powers is essentially different in
this respect from that of America. This difference proceeds from that
which exists in their respective Governments; and to the defense of our
own, which has been achieved by the loss of so much blood and treasure,
and matured by the wisdom of their most enlightened citizens, and under
which we have enjoyed unexampled felicity, this whole nation is devoted.

We owe it, therefore, to candor and to the amicable relations existing
between the United States and those powers to declare that we should
consider any attempt on their part to extend their system to any portion
of this hemisphere as dangerous to our peace and safety. With the
existing colonies or dependencies of any European power we have not
interfered and shall not interfere, but with the Governments who have
declared their independence and maintained it, and whose independence we
have, on great consideration and on just principles, acknowledged, we
could not view any interposition for the purpose of oppressing them, or
controlling in any other manner their destiny, by any European power in
any other light than as the manifestation of an unfriendly disposition
toward the United States.

In the war between those new Governments and Spain we declared our
neutrality at the time of their recognition, and to this we have
adhered, and shall continue to adhere, provided no change shall occur
which, in the judgment of the competent authorities of this Government,
shall make a corresponding change on the part of the United States
indispensable to their security.

The late events in Spain and Portugal shew that Europe is still
unsettled. Of this important fact no stronger proof can be adduced than
that the allied powers should have thought it proper, on any principle
satisfactory to themselves, to have interposed by force in the internal
concerns of Spain. To what extent such interposition may be carried, on
the same principle, is a question in which all independent powers whose
governments differ from theirs are interested, even those most remote,
and surely none more so than the United States.

Our policy in regard to Europe, which was adopted at an early stage of
the wars which have so long agitated that quarter of the globe,
nevertheless remains the same, which is, not to interfere in the
internal concerns of any of its powers; to consider the government de
facto as the legitimate government for us; to cultivate friendly
relations with it, and to preserve those relations by a frank, firm, and
manly policy, meeting in all instances the just claims of every power,
submitting to injuries from none.

But in regard to those continents circumstances are eminently and
conspicuously different. It is impossible that the allied powers should
extend their political system to any portion of either continent without
endangering our peace and happiness; nor can anyone believe that our
southern brethren, if left to themselves, would adopt it of their own
accord. It is equally impossible, therefore, that we should behold such
interposition in any form with indifference. If we look to the
comparative strength and resources of Spain and those new Governments,
and their distance from each other, it must be obvious that she can
never subdue them. It is still the true policy of the United States to
leave the parties to themselves, in the hope that other powers will
pursue the same course.

If we compare the present condition of our Union with its actual state
at the close of our Revolution, the history of the world furnishes no
example of a progress in improvement in all the important circumstances
which constitute the happiness of a nation which bears any resemblance
to it. At the first epoch our population did not exceed 3,000,000. By
the last census it amounted to about 10,000,000, and, what is more
extraordinary, it is almost altogether native, for the immigration from
other countries has been inconsiderable.

At the first epoch half the territory within our acknowledged limits was
uninhabited and a wilderness. Since then new territory has been acquired
of vast extent, comprising within it many rivers, particularly the
Mississippi, the navigation of which to the ocean was of the highest
importance to the original States. Over this territory our population
has expanded in every direction, and new States have been established
almost equal in number to those which formed the first bond of our
Union. This expansion of our population and accession of new States to
our Union have had the happiest effect on all its highest interests.

That it has eminently augmented our resources and added to our strength
and respectability as a power is admitted by all, but it is not in these
important circumstances only that this happy effect is felt. It is
manifest that by enlarging the basis of our system and increasing the
number of States the system itself has been greatly strengthened in both
its branches. Consolidation and disunion have thereby been rendered
equally impracticable.

Each Government, confiding in its own strength, has less to apprehend
from the other, and in consequence each, enjoying a greater freedom of
action, is rendered more efficient for all the purposes for which it was
instituted.

It is unnecessary to treat here of the vast improvement made in the
system itself by the adoption of this Constitution and of its happy
effect in elevating the character and in protecting the rights of the
nation as well as individuals. To what, then, do we owe these blessings?
It is known to all that we derive them from the excellence of our
institutions. Ought we not, then, to adopt every measure which may be
necessary to perpetuate them?

***

State of the Union Address
James Monroe
December 7, 1824

Fellow-Citizens of the Senate and House of Representatives:

The view which I have now to present to you of our affairs, foreign and
domestic, realizes the most sanguine anticipations which have been
entertained of the public prosperity. If we look to the whole, our
growth as a nation continues to be rapid beyond example; if to the
States which compose it, the same gratifying spectacle is exhibited. Our
expansion over the vast territory within our limits has been great,
without indicating any decline in those sections from which the
emigration has been most conspicuous. We have daily gained strength by a
native population in every quarter--a population devoted to our happy
system of government and cherishing the bond of union with internal
affection.

Experience has already shewn that the difference of climate and of
industry, proceeding from that cause, inseparable from such vast
domains, and which under other systems might have a repulsive tendency,
can not fail to produce with us under wise regulations the opposite
effect. What one portion wants the other may supply; and this will be
most sensibly felt by the parts most distant from each other, forming
thereby a domestic market and an active intercourse between the extremes
and throughout every portion of our Union.

Thus by a happy distribution of power between the National and State
Governments, Governments which rest exclusively on the sovereignty of
the people and are fully adequate to the great purposes for which they
were respectively instituted, causes which might otherwise lead to
dismemberment operate powerfully to draw us closer together.

In every other circumstance a correct view of the actual state of our
Union must be equally gratifying to our constituents. Our relations with
foreign powers are of a friendly character, although certain interesting
differences remain unsettled with some. Our revenue under the mild
system of impost and tonnage continues to be adequate to all the
purposes of the Government. Our agriculture, commerce, manufactures, and
navigation flourish. Our fortifications are advancing in the degree
authorized by existing appropriations to maturity, and due progress is
made in the augmentation of the Navy to the limit prescribed for it by
law. For these blessings we owe to Almighty God, from whom we derive
them, and with profound reverence, our most grateful and unceasing
acknowledgments.

In adverting to our relations with foreign powers, which are always an
object of the highest importance, I have to remark that of the subjects
which have been brought into discussion with them during the present
Administration some have been satisfactorily terminated, others have
been suspended, to be resumed hereafter under circumstances more
favorable to success, and others are still in negotiation, with the hope
that they may be adjusted with mutual accommodation to the interests and
to the satisfaction of the respective parties. It has been the
invariable object of this Government to cherish the most friendly
relations with every power, and on principles and conditions which might
make them permanent. A systematic effort has been made to place our
commerce with each power on a footing of perfect reciprocity, to settle
with each in a spirit of candor and liberality all existing differences,
and to anticipate and remove so far as it might be practicable all
causes of future variance.

It having been stipulated by the 7th article of the convention of
navigation and commerce which was concluded on June 24th, 1822, between
the United States and France, that the said convention should continue
in force for two years from the first of October of that year, and for
an indefinite term afterwards, unless one of the parties should declare
its intention to renounce it, in which event it should cease to operate
at the end of six months from such declaration, and no such intention
having been announced, the convention having been found advantageous to
both parties, it has since remained, and still remains, in force.

At the time when that convention was concluded many interesting subjects
were left unsettled, and particularly our claim to indemnity for
spoliations which were committed on our commerce in the late wars. For
these interests and claims it was in the contemplation of the parties to
make provision at a subsequent day by a more comprehensive and
definitive treaty. The object has been duly attended to since by the
Executive, but as yet it has not been accomplished.

It is hoped that a favorable opportunity will present itself for opening
a negotiation which may embrace and arrange all existing differences and
every other concern in which they have a common interest upon the
accession of the present King of France, an event which has occurred
since the close of the last session of Congress.

With Great Britain our commercial intercourse rests on the same footing
that it did at the last session. By the convention of 1815, the commerce
between the United States and the British dominions in Europe and the
East Indies was arranged on a principle of reciprocity. That convention
was confirmed and continued in force, with slight exceptions, by a
subsequent treaty for the term of ten years from October 20th, 1818, the
date of the latter.

The trade with the British colonies in the West Indies has not as yet
been arranged, by treaty or otherwise, to our satisfaction. An approach
to that result has been made by legislative acts, whereby many serious
impediments which had been raised by the parties in defense of their
respective claims were removed. An earnest desire exists, and has been
manifested on the part of this Government, to place the commerce with
the colonies, likewise, on a footing of reciprocal advantage, and it is
hoped that the British Government, seeing the justice of the proposal
and its importance to the colonies, will ere long accede to it.

The commissioners who were appointed for the adjustment of the boundary
between the territories of the United States and those of Great Britain,
specified in the 5th article of the treaty of Ghent, having disagreed in
their decision, and both Governments having agreed to establish that
boundary by amicable negotiation between them, it is hoped that it may
be satisfactorily adjusted in that mode. The boundary specified by the
6th article has been established by the decision of the commissioners.
From the progress made in that provided for by the 7th, according to a
report recently received, there is good cause to presume that it will be
settled in the course of the ensuing year.

It is a cause of serious regret that no arrangement has yet been finally
concluded between the two Governments to secure by joint cooperation the
suppression of the slave trade. It was the object of the British
Government in the early stages of the negotiation to adopt a plan for
the suppression which should include the concession of the mutual right
of search by the ships of war of each party of the vessels of the other
for suspected offenders. This was objected to by this Government on the
principle that as the right of search was a right of war of a
belligerent toward a neutral power it might have an ill effect to extend
it by treaty, to an offense which had been made comparatively mild, to a
time of peace.

Anxious, however, for the suppression of this trade, it was thought
advisable, in compliance with a resolution of the House of
Representatives, founded on an act of Congress, to propose to the
British Government an expedient which should be free from that objection
and more effectual for the object, by making it piratical. In that mode
the enormity of the crime would place the offenders out of the
protection of their Government, and involve no question of search or
other question between the parties touching their respective rights. It
was believed, also, that it would completely suppress the trade in the
vessels of both parties, and by their respective citizens and subjects
in those of other powers, with whom it was hoped that the odium which
would thereby be attached to it would produce a corresponding
arrangement, and by means thereof its entire extirpation forever.

A convention to this effect was concluded and signed in London on March
13th, 1824, by plenipotentiaries duly authorized by both Governments, to
the ratification of which certain obstacles have arisen which are not
yet entirely removed. The difference between the parties still remaining
has been reduced to a point not of sufficient magnitude, as is presumed,
to be permitted to defeat an object so near to the heart of both nations
and so desirable to the friends of humanity throughout the world. As
objections, however, to the principle recommended by the House of
Representatives, or at least to the consequences inseparable from it,
and which are understood to apply to the law, have been raised, which
may deserve a reconsideration of the whole subject, I have thought it
proper to suspend the conclusion of a new convention until the
definitive sentiments of Congress may be ascertained. The documents
relating to the negotiation are with that intent submitted to your
consideration.

Our commerce with Sweden has been placed on a footing of perfect
reciprocity by treaty, and with Russia, the Netherlands, Prussia, the
free Hanseatic cities, the Dukedom of Oldenburg, and Sardinia by
internal regulations on each side, founded on mutual agreement between
the respective Governments.

The principles upon which the commercial policy of the United States is
founded are to be traced to an early period. They are essentially
connected with those upon which their independence was declared, and owe
their origin to the enlightened men who took the lead in our affairs at
that important epoch. They are developed in their first treaty of
commerce with France of February 6th, 1778, and by a formal commission
which was instituted Immediately after the conclusion of their
Revolutionary struggle, for the purpose of negotiating treaties of
commerce with every European power. The first treaty of the United
States with Prussia, which was negotiated by that commission, affords a
signal illustration of those principles. The act of Congress of March
3rd, 1815, adopted immediately after the return of a general peace, was
a new overture to foreign nations to establish our commercial relations
with them on the basis of free and equal reciprocity. That principle has
pervaded all the acts of Congress and all the negotiations of the
Executive on the subject.

A convention for the settlement of important questions in relation to
the North West coast of this continent and its adjoining seas was
concluded and signed at St. Petersburg on the 5th day of April last by
the minister plenipotentiary of the United States and plenipotentiaries
of the Imperial Government of Russia. It will immediately be laid before
the Senate for the exercise of the constitutional authority of that body
with reference to its ratification. It is proper to add that the manner
in which this negotiation was invited and conducted on the part of the
Emperor has been very satisfactory.

The great and extraordinary changes which have happened in the
Governments of Spain and Portugal within the last two years, without
seriously affecting the friendly relations which under all of them have
been maintained with those powers by the United States, have been
obstacles to the adjustment of the particular subjects of discussion
which have arisen with each. A resolution of the Senate adopted at their
last session called for information as to the effect produced upon our
relations with Spain by the recognition on the part of the United States
of the independent South American Governments. The papers containing
that information are now communicated to Congress.

A charge d'affaires has been received from the independent Government of
Brazil. That country, heretofore a colonial possession of Portugal, had
some years since been proclaimed by the Sovereign of Portugal himself an
independent Kingdom. Since his return to Lisbon a revolution in Brazil
has established a new Government there with an imperial title, at the
head of which is placed a prince, in whom the regency had been vested by
the King at the time of his departure. There is reason to expect that by
amicable negotiation the independence of Brazil will ere long be
recognized by Portugal herself.

With the remaining powers of Europe, with those on the coast of Barbary,
and with all the new South American States our relations are of a
friendly character. We have ministers plenipotentiary residing with the
Republics of Colombia and Chile, and have received ministers of the same
rank from Columbia, Guatemala, Buenos Ayres, and Mexico. Our commercial
relations with all those States are mutually beneficial and increasing.
With the Republic of Colombia a treaty of commerce has been formed, of
which a copy is received and the original daily expected. A negotiation
for a like treaty would have been commenced with Buenos Ayres had it not
been prevented by the indisposition and lamented decease of Mr. Rodney,
our minister there, and to whose memory the most respectful attention
has been shewn by the Government of that Republic. An advantageous
alteration in our treaty with Tunis has been obtained by our consular
agent residing there, the official document of which when received will
be laid before the Senate.

The attention of the Government has been drawn with great solicitude to
other subjects, and particularly to that relating to a state of maritime
war, involving the relative rights of neutral and belligerent in such
wars. Most of the difficulties which we have experienced and of the
losses which we have sustained since the establishment of our
independence have proceeded from the unsettled state of those rights and
the extent to which the belligerent claim has been carried against the
neutral party.

It is impossible to look back on the occurrences of the late wars in
Europe, and to behold the disregard which was paid to our rights as a
neutral power, and the waste which was made of our commerce by the
parties to those wars by various acts of their respective Governments,
and under the pretext by each that the other had set the example,
without great mortification and a fixed purpose never to submit to the
like in future. An attempt to remove those causes of possible variance
by friendly negotiation and on just principles which should be
applicable to all parties could, it was presumed, be viewed by none
other than as a proof of an earnest desire to preserve those relations
with every power.

In the late war between France and Spain a crisis occurred in which it
seemed probable that all controvertible principles involved in such wars
might be brought into discussion and settled to the satisfaction of all
parties. Propositions having this object in view have been made to the
Governments of Great Britain, France, Russia, and of other powers, which
have been received in a friendly manner by all, but as yet no treaty has
been formed with either for its accomplishment. The policy will, it is
presumed, be persevered in, and in the hope that it may be successful.

It will always be recollected that with one of the parties to those wars
and from whom we received those injuries, we sought redress by war. From
the other, by whose then reigning Government our vessels were seized in
port as well as at sea and their cargoes confiscated, indemnity has been
expected, but has not yet been rendered. It was under the influence of
the latter that our vessels were likewise seized by the Governments of
Spain, Holland, Denmark, Sweden, and Naples, and from whom indemnity has
been claimed and is still expected, with the exception of Spain, by whom
it has been rendered.

With both parties we had abundant cause of war, but we had no
alternative but to resist that which was most powerful at sea and
pressed us nearest at home. With this all differences were settled by a
treaty, founded on conditions fair and honorable to both, and which has
been so far executed with perfect good faith. It has been earnestly
hoped that the other would of its own accord, and from a sentiment of
justice and conciliation, make to our citizens the indemnity to which
they are entitled, and thereby remove from our relations any just cause
of discontent on our side.

It is estimated that the receipts into the Treasury during the current
year, exclusive of loans, will exceed $18.5 millions, which, with the
sum remaining in the Treasury at the end of the last year, amounting to
$9,463,922.81 will, after discharging the current disbursements of the
year, the interest on the public debt, and upward of $11,633,011.52 of
the principal, leave a balance of more than $3 millions in the Treasury
on the first day of January next.

A larger amount of the debt contracted during the late war, bearing an
interest of 6%, becoming redeemable in the course of the ensuing year
than could be discharged by the ordinary revenue, the act of the 26th of
May authorized a loan of $5 millions at 4.5% to meet the same. By this
arrangement an annual saving will accrue to the public of $75,000.

Under the act of the 24th of May last a loan of $5 millions was
authorized, In order to meet the awards under the Florida treaty, which
was negotiated at par with the Bank of the United States at 4.5%, the
limit of interest fixed by the act. By this provision the claims of our
citizens who had sustained so great a loss by spoliations, and from whom
indemnity had been so long withheld, were promptly paid. For these
advances the public will be amply repaid at no distant day by the sale
of the lands in Florida. Of the great advantages resulting from the
acquisition of the Territory in other respects too high an estimate can
not be formed.

It is estimated that the receipts into the Treasury during the year 1825
will be sufficient to meet the disbursements of the year, including the
sum of $10 millions, which is annually appropriated by the act of
constituting the sinking fund to the payment of the principal and
interest of the public debt.

The whole amount of the public debt on the first of January next may be
estimated at $86 millions, inclusive of $2.5 millions of the loan
authorized by the act of the 26th of May last. In this estimate is
included a stock of $7 millions, issued for the purchase of that amount
of the capital stock of the Bank of the United States, and which, as the
stock of the bank still held by the Government will at least be fully
equal to its reimbursement, ought not to be considered as constituting a
part of the public debt.

Estimating, then, the whole amount of the public debt at $79 millions
and regarding the annual receipts and expenditures of the Government, a
well-founded hope may be entertained that, should no unexpected event
occur, the whole of the public debt may be discharged in the course of
ten years, and the Government be left at liberty thereafter to apply
such portion of the revenue as may not be necessary for current expenses
to such other objects as may be most conducive to the public security
and welfare. That the sums applicable to these objects will be very
considerable may be fairly concluded when it is recollected that a large
amount of the public revenue has been applied since the late war to the
construction of the public buildings in this city; to the erection of
fortifications along the coast and of arsenals in different parts of the
Union; to the augmentation of the Navy; to the extinguishment of the
Indian title to large tracts of fertile territory; to the acquisition of
Florida; to pensions to Revolutionary officers and soldiers, and to
invalids of the late war.

On many of these objects the expense will annually be diminished and
cease at no distant period on most of them.

On the 1st of January, 1817, the public debt amounted to
$123,491,965.16, and, notwithstanding the large sums which have been
applied to these objects, it has been reduced since that period
$37,446,961.78. The last portion of the public debt will be redeemable
on January 1st, 1835, and, while there is the best reason to believe
that the resources of the Government will be continually adequate to
such portions of it as may become due in the interval, it is recommended
to Congress to seize every opportunity which may present itself to
reduce the rate of interest on every part thereof. The high state of the
public credit and the great abundance of money are at this time very
favorable to such a result. It must be very gratifying to our fellow
citizens to witness this flourishing state of the public finances when
it is recollected that no burthen whatever has been imposed upon them.

The military establishment in all its branches, in the performance of
the various duties assigned to each, justifies the favorable view which
was presented of the efficiency of its organization at the last session.
All the appropriations have been regularly applied to the objects
intended by Congress, and so far as the disbursements have been made the
accounts have been rendered and settled without loss to the public.

The condition of the Army itself, as relates to the officers and men, in
science and discipline is highly respectable. The Military Academy, on
which the Army essentially rests, and to which it is much indebted for
this state of improvement, has attained, in comparison with any other
institution of a like kind, a high degree of perfection.

Experience, however, has shewn that the dispersed condition of the corps
of artillery is unfavorable to the discipline of that important branch
of the military establishment. To remedy this inconvenience, eleven
companies have been assembled at the fortification erected at Old Point
Comfort as a school for artillery instruction, with intention as they
shall be perfected in the various duties of that service to order them
to other posts, and, to supply their places with other companies for
instruction in like manner. In this mode a complete knowledge of the
science and duties of this arm will be extended throughout the whole
corps of artillery. But to carry this object fully into effect will
require the aid of Congress, to obtain which the subject is now
submitted to your consideration.

Of the progress which has been made in the construction of
fortifications for the permanent defense of our maritime frontier,
according to the plan decided on and to the extent of the existing
appropriations, the report of the Secretary of War, which is herewith
communicated, will give a detailed account. Their final completion can
not fail to give great additional security to that frontier, and to
diminish proportionably the expense of defending it in the event of war.

The provisions in several acts of Congress of the last session for the
improvement of the navigation of the Mississippi and the Ohio, of the
harbor of Presqu'isle, on Lake Erie, and the repair of the Plymouth
beach are in a course of regular execution; and there is reason to
believe that the appropriation in each instance will be adequate to the
object. To carry these improvements fully into effect, the
superintendence of them has been assigned to officers of the Corps of
Engineers.

Under the act of 30th April last, authorizing the President to cause a
survey to be made, with the necessary plans and estimates, of such roads
and canals as he might deem of national importance in a commercial or
military point of view, or for the transportation of the mail, a board
has been instituted, consisting of two distinguished officers of the
Corps of Engineers and a distinguished civil engineer, with assistants,
who have been actively employed in carrying into effect the object of
the act. They have carefully examined the route between the Potomac and
the Ohio rivers; between the latter and Lake Erie; between the Alleghany
and the Susquehannah; and the routes between the Delaware and the
Raritan, Barnstable and Buzzards Bay, and between Boston Harbor and
Narraganset Bay. Such portion of the Corps of Topographical Engineers as
could be spared from the survey of the coast has been employed in
surveying the very important route between the Potomac and the Ohio.
Considerable progress has been made in it, but the survey can not be
completed until the next season. It is gratifying to add, from the view
already taken, that there is good cause to believe that this great
national object may be fully accomplished.

It is contemplated to commence early in the next season the execution of
the other branch of the act--that which relates to roads--and with the
survey of a route from this city, through the Southern States, to New
Orleans, the importance of which can not be too highly estimated. All
the officers of both the corps of engineers who could be spared from
other services have been employed in exploring and surveying the routes
for canals. To digest a plan for both objects for the great purposes
specified will require a thorough knowledge of every part of our Union
and of the relation of each part to the others and of all to the seat of
the General Government. For such a digest it will be necessary that the
information be full, minute, and precise.

With a view to these important objects, I submit to the consideration of
the Congress the propriety of enlarging both the corps of engineers--the
military and topographical. It need scarcely be remarked that the more
extensively these corps are engaged in the improvement of their country,
in the execution of the powers of Congress, and in aid of the States in
such improvements as lie beyond that limit, when such aid is desired,
the happier the effect will be in many views of which the subject is
perceptible. By profiting of their science the works will always be well
executed, and by giving to the officers such employment our Union will
derive all the advantage, in peace as well as in war, from their talents
and services which they can afford. In this mode, also, the military
will be incorporated with the civil, and unfounded and injurious
distinctions and prejudices of every kind be done away. To the corps
themselves this service can not fail to be equally useful, since by the
knowledge they would thus acquire they would be eminently better
qualified in the event of war for the great purposes for which they were
instituted.

Our relations with the Indian tribes within our limits have not been
materially changed during the year. The hostile disposition evinced by
certain tribes on the Missouri during the last year still continues, and
has extended in some degree to those on the Upper Mississippi and the
Upper Lakes. Several parties of our citizens have been plundered and
murdered by those tribes. In order to establish relations of friendship
with them, Congress at the last session made an appropriation for
treaties with them and for the employment of a suitable military escort
to accompany and attend the commissioners at the places appointed for
the negotiations. This object has not been effected. The season was too
far advanced when the appropriation was made and the distance too great
to permit it, but measures have been taken, and all the preparations
will be completed to accomplish it at an early period in the next
season.

Believing that the hostility of the tribes, particularly on the Upper
Mississippi and the Lakes, is in no small degree owing to the wars which
are carried on between the tribes residing in that quarter, measures
have been taken to bring about a general peace among them, which, if
successful, will not only tend to the security of our citizens, but be
of great advantage to the Indians themselves.

With the exception of the tribes referred to, our relations with all the
others are on the same friendly footing, and it affords me great
satisfaction to add that they are making steady advances in civilization
and the improvement of their condition. Many of the tribes have already
made great progress in the arts of civilized life. This desirable result
has been brought about by the humane and persevering policy of the
Government, and particularly by means of the appropriation for the
civilization of the Indians. There have been established under the
provisions of this act 32 schools, containing 916 scholars, who are well
instructed in several branches of literature, and likewise in
agriculture and the ordinary arts of life.

Under the appropriation to authorize treaties with the Creeks and
Quaupaw Indians commissioners have been appointed and negotiations are
now pending, but the result is not yet known.

For more full information respecting the principle which has been
adopted for carrying into effect the act of Congress authorizing
surveys, with plans and estimates for canals and roads, and on every
other branch of duty incident to the Department of War, I refer you to
the report of the Secretary.

The squadron in the Mediterranean has been maintained in the extent
which was proposed in the report of the Secretary of the Navy of the
last year, and has afforded to our commerce the necessary protection in
that sea. Apprehending, however, that the unfriendly relations which
have existed between Algiers and some of the powers of Europe might be
extended to us, it has been thought expedient to augment the force
there, and in consequence the North Carolina, a ship of the line, has
been prepared, and will sail in a few days to join it.

The force employed in the Gulf of Mexico and in the neighboring seas for
the suppression of piracy has likewise been preserved essentially in the
state in which it was during the last year. A persevering effort has
been made for the accomplishment of that object, and much protection has
thereby been afforded to our commerce, but still the practice is far
from being suppressed. From every view which has been taken of the
subject it is thought that it will be necessary rather to augment than
to diminish our force in that quarter.

There is reason to believe that the piracies now complained of are
committed by bands of robbers who inhabit the land, and who, by
preserving good intelligence with the towns and seizing favorable
opportunities, rush forth and fall on unprotected merchant vessels, of
which they make an easy prey. The pillage thus taken they carry to their
lurking places, and dispose of afterwards at prices tending to seduce
the neighboring population.

This combination is understood to be of great extent, and is the more to
be deprecated because the crime of piracy is often attended with the
murder of the crews, these robbers knowing if any survived their lurking
places would be exposed and they be caught and punished. That this
atrocious practice should be carried to such extent is cause of equal
surprise and regret. It is presumed that it must be attributed to the
relaxed and feeble state of the local governments, since it is not
doubted, from the high character of the governor of Cuba, who is well
known and much respected here, that if he had the power he would
promptly suppress it. Whether those robbers should be pursued on the
land, the local authorities be made responsible for these atrocities, or
any other measure be resorted to to suppress them, is submitted to the
consideration of Congress.

In execution of the laws for the suppression of the slave trade a vessel
has been occasionally sent from that squadron to the coast of Africa
with orders to return thence by the usual track of the slave ships, and
to seize any of our vessels which might be engaged in that trade. None
have been found, and it is believed that none are thus employed. It is
well known, however, that the trade still exists under other flags.

The health of our squadron while at Thompsons Island has been much
better during the present than it was the last season. Some improvements
have been made and others are contemplated there which, it is believed,
will have a very salutary effect.

On the Pacific, our commerce has much increased, and on that coast, as
well as on that sea, the United States have many important interests
which require attention and protection. It is thought that all the
considerations which suggested the expediency of placing a squadron on
that sea operate with augmented force for maintaining it there, at least
in equal extent.

For detailed information respecting the state of our maritime force on
each sea, the improvement necessary to be made on either in the
organization of the naval establishment generally, and of the laws for
its better government I refer you to the report of the Secretary of the
Navy, which is herewith communicated.

The revenue of the Post Office Department has received a considerable
augmentation in the present year. The current receipts will exceed the
expenditures, although the transportation of the mail within the year
has been much increased. A report of the Post Master General, which is
transmitted, will furnish in detail the necessary information respecting
the administration and present state of this Department.

In conformity with a resolution of Congress of the last session, an
invitation was given to General Lafayette to visit the United States,
with an assurance that a ship of war should attend at any port of France
which he might designate, to receive and convey him across the Atlantic,
whenever it might be convenient for him to sail. He declined the offer
of the public ship from motives of delicacy, but assured me that he had
long intended and would certainly visit our Union in the course of the
present year.

In August last he arrived at New York, where he was received with the
warmth of affection and gratitude to which his very important and
disinterested services and sacrifices in our Revolutionary struggle so
eminently entitled him. A corresponding sentiment has since been
manifested in his favor throughout every portion of our Union, and
affectionate invitations have been given him to extend his visits to
them. To these he has yielded all the accommodation in his power. At
every designated point of rendezvous the whole population of the
neighboring country has been assembled to greet him, among whom it has
excited in a peculiar manner the sensibility of all to behold the
surviving members of our Revolutionary contest, civil and military, who
had shared with him in the toils and dangers of the war, many of them in
a decrepit state. A more interesting spectacle, it is believed, was
never witnessed, because none could be founded on purer principles, none
proceed from higher or more disinterested motives. That the feelings of
those who had fought and bled with him in a common cause should have
been much excited was natural.

There are, however, circumstances attending these interviews which
pervaded the whole community and touched the breasts of every age, even
the youngest among us. There was not an individual present who had not
some relative who had not partaken in those scenes, nor an infant who
had not heard the relation of them. But the circumstance which was most
sensibly felt, and which his presence brought forcibly to the
recollection of all, was the great cause in which we were engaged and
the blessings which we have derived from our success in it.

The struggle was for independence and liberty, public and personal, and
in this we succeeded. The meeting with one who had borne so
distinguished a part in that great struggle, and from such lofty and
disinterested motives, could not fail to affect profoundly every
individual and of every age. It is natural that we should all take a
deep interest in his future welfare, as we do. His high claims on our
Union are felt, and the sentiment universal that they should be met in a
generous spirit. Under these impressions I invite your attention to the
subject, with a view that, regarding his very important services,
losses, and sacrifices, a provision may be made and tendered to him
which shall correspond with the sentiments and be worthy the character
of the American people.

In turning our attention to the condition of the civilized world, in
which the United States have always taken a deep interest, it is
gratifying to see how large a portion of it is blessed with peace. The
only wars which now exist within that limit are those between Turkey and
Greece, in Europe, and between Spain and the new Governments, our
neighbors, in this hemisphere. In both these wars the cause of
independence, of liberty and humanity, continues to prevail.

The success of Greece, when the relative population of the contending
parties is considered, commands our admiration and applause, and that it
has had a similar effect with the neighboring powers is obvious. The
feeling of the whole civilized world is excited in a high degree in
their favor. May we not hope that these sentiments, winning on the
hearts of their respective Governments, may lead to a more decisive
result; that they may produce an accord among them to replace Greece on
the ground which she formerly held, and to which her heroic exertions at
this day so eminently entitle her?

With respect to the contest to which our neighbors are a party, it is
evident that Spain as a power is scarcely felt in it. These new States
had completely achieved their independence before it was acknowledged by
the United States, and they have since maintained it with little foreign
pressure. The disturbances which have appeared in certain portions of
that vast territory have proceeded from internal causes, which had their
origin in their former Governments and have not yet been thoroughly
removed.

It is manifest that these causes are daily losing their effect, and that
these new States are settling down under Governments elective and
representative in every branch, similar to our own. In this course we
ardently wish them to persevere, under a firm conviction that it will
promote their happiness. In this, their career, however, we have not
interfered, believing that every people have a right to institute for
themselves the government which, in their judgment, may suit them best.

Our example is before them, of the good effect of which, being our
neighbors, they are competent judges, and to their judgment we leave it,
in the expectation that other powers will pursue the same policy. The
deep interest which we take in their independence, which we have
acknowledged, and in their enjoyment of all the rights incident thereto,
especially in the very important one of instituting their own
Governments, has been declared, and is known to the world.

Separated as we are from Europe by the great Atlantic Ocean, we can have
no concern in the wars of the European Governments nor in the causes
which produce them. The balance of power between them, into whichever
scale it may turn in its various vibrations, can not affect us. It is
the interest of the United States to preserve the most friendly
relations with every power and on conditions fair, equal, and applicable
to all.

But in regard to our neighbors our situation is different. It is
impossible for the European Governments to interfere in their concerns,
especially in those alluded to, which are vital, without affecting us;
indeed, the motive which might induce such interference in the present
state of the war between the parties, if a war it may be called, would
appear to be equally applicable to us. It is gratifying to know that
some of the powers with whom we enjoy a very friendly intercourse, and
to whom these views have been communicated, have appeared to acquiesce
in them.

The augmentation of our population with the expansion of our Union and
increased number of States have produced effects in certain branches of
our system which merit the attention of Congress. Some of our
arrangements, and particularly the judiciary establishment, were made
with a view to the original thirteen States only. Since then the United
States have acquired a vast extent of territory; eleven new States have
been admitted into the Union, and Territories have been laid off for
three others, which will likewise be admitted at no distant day.

An organization of the Supreme Court which assigns the judges any
portion of the duties which belong to the inferior, requiring their
passage over so vast a space under any distribution of the States that
may now be made, if not impracticable in the execution, must render it
impossible for them to discharge the duties of either branch with
advantage to the Union. The duties of the Supreme Court would be of
great importance if its decisions were confined to the ordinary limits
of other tribunals, but when it is considered that this court decides,
and in the last resort, on all the great questions which arise under our
Constitution, involving those between the United States individually,
between the States and the United States, and between the latter and
foreign powers, too high an estimate of their importance can not be
formed. The great interests of the nation seem to require that the
judges of the Supreme Court should be exempted from every other duty
than those which are incident to that high trust. The organization of
the inferior courts would of course be adapted to circumstances. It is
presumed that such an one might be formed as would secure an able and
faithful discharge of their duties, and without any material
augmentation of expense.

The condition of the aborigines within our limits, and especially those
who are within the limits of any of the States, merits likewise
particular attention. Experience has shown that unless the tribes be
civilized they can never be incorporated into our system in any form
whatever. It has likewise shown that in the regular augmentation of our
population with the extension of our settlements their situation will
become deplorable, if their extinction is not menaced.

Some well-digested plan which will rescue them from such calamities is
due to their rights, to the rights of humanity, and to the honor of the
nation. Their civilization is indispensable to their safety, and this
can be accomplished only by degrees. The process must commence with the
infant state, through whom some effect may be wrought on the parental.
Difficulties of the most serious character present themselves to the
attainment of this very desirable result on the territory on which they
now reside. To remove them from it by force, even with a view to their
own security and happiness, would be revolting to humanity and utterly
unjustifiable. Between the limits of our present States and Territories
and the Rocky Mountains and Mexico there is a vast territory to which
they might be invited with inducements which might be successful. It is
thought if that territory should be divided into districts by previous
agreement with the tribes now residing there and civil governments be
established in each, with schools for every branch of instruction in
literature and the arts of civilized life, that all the tribes now
within our limits might gradually be drawn there. The execution of this
plan would necessarily be attended with expense, and that not
inconsiderable, but it is doubted whether any other can be devised which
would be less liable to that objection or more likely to succeed.

In looking to the interests which the United States have on the Pacific
Ocean and on the western coast of this continent, the propriety of
establishing a military post at the mouth of the Columbia River, or at
some other point in that quarter within our acknowledged limits, is
submitted to the consideration of Congress. Our commerce and fisheries
on that sea and along the coast have much increased and are increasing.
It is thought that a military post, to which our ships of war might
resort, would afford protection to every interest, and have a tendency
to conciliate the tribes to the North West, with whom our trade is
extensive. It is thought also that by the establishment of such a post
the intercourse between our Western States and Territories and the
Pacific and our trade with the tribes residing in the interior on each
side of the Rocky Mountains would be essentially promoted. To carry this
object into effect the appropriation of an adequate sum to authorize the
employment of a frigate, with an officer of the Corps of Engineers, to
explore the mouth of the Columbia River and the coast contiguous
thereto, to enable the Executive to make such establishment at the most
suitable point, is recommended to Congress.

It is thought that attention is also due to the improvement of this
city. The communication between the public buildings and in various
other parts and the grounds around those buildings require it. It is
presumed also that the completion of the canal from the Tiber to the
Eastern Branch would have a very salutary effect. Great exertions have
been made and expenses incurred by the citizens in improvements of
various kinds; but those which are suggested belong exclusively to the
Government, or are of a nature to require expenditures beyond their
resources. The public lots which are still for sale would, it is not
doubted, be more than adequate for these purposes.

From the view above presented it is manifest that the situation of the
United States is in the highest degree prosperous and happy. There is no
object which as a people we can desire which we do not possess or which
is not within our reach. Blessed with governments the happiest which the
world ever knew, with no distinct orders in society or divided interests
in any portion of the vast territory over which their dominion extends,
we have every motive to cling together which can animate a virtuous and
enlightened people. The great object is to preserve these blessings, and
to hand them down to the latest posterity.

Our experience ought to satisfy us that our progress under the most
correct and provident policy will not be exempt from danger. Our
institutions form an important epoch in the history of the civilized
world. On their preservation and in their utmost purity everything will
depend. Extending as our interests do to every part of the inhabited
globe and to every sea to which our citizens are carried by their
industry and enterprise, to which they are invited by the wants of
others, and have a right to go, we must either protect them in the
enjoyment of their rights or abandon them in certain events to waste and
desolation.

Our attitude is highly interesting as relates to other powers, and
particularly to our southern neighbors. We have duties to perform with
regard to all to which we must be faithful. To every kind of danger we
should pay the most vigilant and unceasing attention, remove the cause
where it may be practicable, and be prepared to meet it when inevitable.

Against foreign danger the policy of the Government seems to be already
settled. The events of the late war admonished us to make our maritime
frontier impregnable by a well-digested chain of fortifications, and to
give efficient protection to our commerce by augmenting our Navy to a
certain extent, which has been steadily pursued, and which it is
incumbent upon us to complete as soon as circumstances will permit. In
the event of war it is on the maritime frontier that we shall be
assailed. It is in that quarter, therefore, that we should be prepared
to meet the attack. It is there that our whole force will be called into
action to prevent the destruction of our towns and the desolation and
pillage of the interior.

To give full effect to this policy great improvements will be
indispensable. Access to those works by every practicable communication
should be made easy and in every direction. The intercourse between
every part of our Union should also be promoted and facilitated by the
exercise of those powers which may comport with a faithful regard to the
great principles of our Constitution. With respect to internal causes,
those great principles point out with equal certainty the policy to be
pursued.

Resting on the people as our Governments do, State and National, with
well-defined powers, it is of the highest importance that they severally
keep within the limits prescribed to them. Fulfilling that sacred duty,
it is of equal importance that the movement between them be harmonious,
and in case of any disagreement, should any such occur, a calm appeal be
made to the people, and that their voice be heard and promptly obeyed.
Both Governments being instituted for the common good, we can not fail
to prosper while those who made them are attentive to the conduct of
their representatives and control their measures. In the pursuit of
these great objects let a generous spirit and national views and
feelings be indulged, and let every part recollect that by cherishing
that spirit and improving the condition of the others in what relates to
their welfare the general interest will not only be promoted, but the
local advantage be reciprocated by all.

I can not conclude this communication, the last of the kind which I
shall have to make, without recollecting with great sensibility and
heart felt gratitude the many instances of the public confidence and the
generous support which I have received from my fellow citizens in the
various trusts with which I have been honored. Having commenced my
service in early youth, and continued it since with few and short
intervals, I have witnessed the great difficulties to which our Union
has been surmounted. From the present prosperous and happy state I
derive a gratification which I can not express. That these blessings may
be preserved and perpetuated will be the object of my fervent and
unceasing prayers to the Supreme Ruler of the Universe.

***

State of the Union Address
John Quincy Adams
December 6, 1825

Fellow Citizens of the Senate and of the House of Representatives:

In taking a general survey of the concerns of our beloved country, with
reference to subjects interesting to the common welfare, the first
sentiment which impresses itself upon the mind is of gratitude to the
Omnipotent Disposer of All Good for the continuance of the signal
blessings of His providence, and especially for that health which to an
unusual extent has prevailed within our borders, and for that abundance
which in the vicissitudes of the seasons has been scattered with
profusion over our land. Nor ought we less to ascribe to Him the glory
that we are permitted to enjoy the bounties of His hand in peace and
tranquillity--in peace with all the other nations of the earth, in
tranquillity among our selves. There has, indeed, rarely been a period
in the history of civilized man in which the general condition of the
Christian nations has been marked so extensively by peace and
prosperity.

Europe, with a few partial and unhappy exceptions, has enjoyed ten years
of peace, during which all her Governments, what ever the theory of
their constitutions may have been, are successively taught to feel that
the end of their institution is the happiness of the people, and that
the exercise of power among men can be justified only by the blessings
it confers upon those over whom it is extended.

During the same period our intercourse with all those nations has been
pacific and friendly; it so continues. Since the close of your last
session no material variation has occurred in our relations with any one
of them. In the commercial and navigation system of Great Britain
important changes of municipal regulation have recently been sanctioned
by acts of Parliament, the effect of which upon the interests of other
nations, and particularly upon ours, has not yet been fully developed.
In the recent renewal of the diplomatic missions on both sides between
the two Governments assurances have been given and received of the
continuance and increase of the mutual confidence and cordiality by
which the adjustment of many points of difference had already been
effected, and which affords the surest pledge for the ultimate
satisfactory adjustment of those which still remain open or may
hereafter arise.

The policy of the United States in their commercial intercourse with
other nations has always been of the most liberal character. In the
mutual exchange of their respective productions they have abstained
altogether from prohibitions; they have interdicted themselves the power
of laying taxes upon exports, and when ever they have favored their own
shipping by special preferences or exclusive privileges in their own
ports it has been only with a view to countervail similar favors and
exclusions granted by the nations with whom we have been engaged in
traffic to their own people or shipping, and to the disadvantage of
ours. Immediately after the close of the last war a proposal was fairly
made by the act of Congress of March 3rd, 1815, to all the maritime
nations to lay aside the system of retaliating restrictions and
exclusions, and to place the shipping of both parties to the common
trade on a footing of equality in respect to the duties of tonnage and
impost. This offer was partially and successively accepted by Great
Britain, Sweden, the Netherlands, the Hanseatic cities, Prussia,
Sardinia, the Duke of Oldenburg, and Russia. It was also adopted, under
certain modifications, in our late commercial convention with France,
and by the act of Congress of January 1st, 1824, it has received a new
confirmation with all the nations who had acceded to it, and has been
offered again to all those who are or may here after be willing to abide
in reciprocity by it. But all these regulations, whether established by
treaty or by municipal enactments, are still subject to one important
restriction.

The removal of discriminating duties of tonnage and of impost is limited
to articles of the growth, produce, or manufacture of the country to
which the vessel belongs or to such articles as are most usually first
shipped from her ports. It will deserve the serious consideration of
Congress whether even this remnant of restriction may not be safely
abandoned, and whether the general tender of equal competition made in
the act of January 8th, 1824, maynot be extended to include all articles
of merchandise not prohibited, of what country so ever they may be the
produce or manufacture. Propositions of this effect have already been
made to us by more than one European Government, and it is probable that
if once established by legislation or compact with any distinguished
maritime state it would recommend itself by the experience of its
advantages to the general accession of all.

The convention of commerce and navigation between the United States and
France, concluded on June 24th, 1822, was, in the understanding and
intent of both parties, as appears upon its face, only a temporary
arrangement of the points of difference between them of the most
immediate and pressing urgency. It was limited in the first instance to
two years from January 10th, 1822, but with a proviso that it should
further continue in force 'til the conclusion of a general and
definitive treaty of commerce, unless terminated by a notice, six months
in advance, of either of the parties to the other. Its operation so far
as it extended has been mutually advantageous, and it still continues in
force by common consent. But it left unadjusted several objects of great
interest to the citizens and subjects of both countries, and
particularly a mass of claims to considerable amount of citizens of the
United States upon the Government of France of indemnity for property
taken or destroyed under circumstances of the most aggravated and
outrageous character. In the long period during which continual and
earnest appeals have been made to the equity and magnanimity of France
in behalf of these claims their justice has not been, as it could not
be, denied.

It was hoped that the accession of a new Sovereign to the throne would
have afforded a favorable opportunity for presenting them to the
consideration of his Government. They have been presented and urged
hither to without effect. The repeated and earnest representations of
our minister at the Court of France remain as yet even without an
answer. Were the demands of nations upon the justice of each other
susceptible of adjudication by the sentence of an impartial tribunal,
those to which I now refer would long since have been settled and
adequate indemnity would have been obtained.

There are large amounts of similar claims upon the Netherlands, Naples,
and Denmark. For those upon Spain prior to 1819 indemnity was, after
many years of patient forbearance, obtained; and those upon Sweden have
been lately compromised by a private settlement, in which the claimants
themselves have acquiesced. The Governments of Denmark and of Naples
have been recently reminded of those yet existing against them, nor will
any of them be forgotten while a hope may be indulged of obtaining
justice by the means within the constitutional power of the Executive,
and without resorting to those means of self-redress which, as well as
the time, circumstances, and occasion which may require them, are within
the exclusive competency of the Legislature.

It is with great satisfaction that I am enabled to bear witness to the
liberal spirit with which the Republic of Colombia has made satisfaction
for well-established claims of a similar character, and among the
documents now communicated to Congress will be distinguished a treaty of
commerce and navigation with that Republic, the ratifications of which
have been exchanged since the last recess of the Legislature. The
negotiation of similar treaties with all of the independent South
American States has been contemplated and may yet be accomplished. The
basis of them all, as proposed by the United States, has been laid in
two principles--the one of entire and unqualified reciprocity, the other
the mutual obligation of the parties to place each other permanently
upon the footing of the most favored nation. These principles are,
indeed, indispensable to the effectual emancipation of the American
hemisphere from the thralldom of colonizing monopolies and exclusions,
an event rapidly realizing in the progress of human affairs, and which
the resistance still opposed in certain parts of Europe to the
acknowledgment of the Southern American Republics as independent States
will, it is believed, contribute more effectually to accomplish. The
time has been, and that not remote, when some of those States might, in
their anxious desire to obtain a nominal recognition, have accepted of a
nominal independence, clogged with burdensome conditions, and exclusive
commercial privileges granted to the nation from which they have
separated to the disadvantage of all others. They are all now aware that
such concessions to any European nation would be incompatible with that
independence which they have declared and maintained.

Among the measures which have been suggested to them by the new
relations with one another, resulting from the recent changes in their
condition, is that of assembling at the Isthmus of Panama a congress, at
which each of them should be represented, to deliberate upon objects
important to the welfare of all. The Republics of Colombia, of Mexico,
and of Central America have already deputed plenipotentiaries to such a
meeting, and they have invited the United States to be also represented
there by their ministers. The invitation has been accepted, and
ministers on the part of the United States will be commissioned to
attend at those deliberations, and to take part in them so far as may be
compatible with that neutrality from which it is neither our intention
nor the desire of the other American States that we should depart.

The commissioners under the 7th article of the treaty of Ghent have so
nearly completed their arduous labors that, by the report recently
received from the agent on the part of the United States, there is
reason to expect that the commission will be closed at their next
session, appointed for May 22 of the ensuing year.

The other commission, appointed to ascertain the indemnities due for
slaves carried away from the United States after the close of the late
war, have met with some difficulty, which has delayed their progress in
the inquiry. A reference has been made to the British Government on the
subject, which, it may be hoped, will tend to hasten the decision of the
commissioners, or serve as a substitute for it.

Among the powers specifically granted to Congress by the Constitution
are those of establishing uniform laws on the subject of bankruptcies
throughout the United States and of providing for organizing, arming,
and disciplining the militia and for governing such part of them as may
be employed in the services of the United States. The magnitude and
complexity of the interests affected by legislation upon these subjects
may account for the fact that, long and often as both of them have
occupied the attention and animated the debates of Congress, no systems
have yet been devised for fulfilling to the satisfaction of the
community the duties prescribed by these grants of power.

To conciliate the claim of the individual citizen to the enjoyment of
personal liberty, with the effective obligation of private contracts, is
the difficult problem to be solved by a law of bankruptcy. These are
objects of the deepest interest to society, affecting all that is
precious in the existence of multitudes of persons, many of them in the
classes essentially dependent and helpless, of the age requiring
nurture, and of the sex entitled to protection from the free agency of
the parent and the husband. The organization of the militia is yet more
indispensable to the liberties of the country. It is only by an
effective militia that we can at once enjoy the repose of peace and bid
defiance to foreign aggression; it is by the militia that we are
constituted an armed nation, standing in perpetual panoply of defense in
the presence of all the other nations of the earth. To this end it would
be necessary, if possible, so to shape its organization as to give it a
more united and active energy. There are laws establishing an uniform
militia throughout the United States and for arming and equipping its
whole body. But it is a body of dislocated members, without the vigor of
unity and having little of uniformity but the name. To infuse into this
most important institution the power of which it is susceptible and to
make it available for the defense of the Union at the shortest notice
and at the smallest expense possible of time, of life, and of treasure
are among the benefits to be expected from the persevering deliberations
of Congress.

Among the unequivocal indications of our national prosperity is the
flourishing state of our finances. The revenues of the present year,
from all their principal sources, will exceed the anticipations of the
last. The balance in the Treasury on the first of January last was a
little short of $2,000,000, exclusive of $2,500,000, being the moiety of
the loan of $5,000,000 authorized by the act of May 26th, 1824. The
receipts into the Treasury from the first of January to the 30th of
September, exclusive of the other moiety of the same loan, are estimated
at $16,500,000, and it is expected that those of the current quarter
will exceed $5,000,000, forming an aggregate of receipts of nearly
$22,000,000, independent of the loan. The expenditures of the year will
not exceed that sum more than $2,000,000. By those expenditures nearly
$8,000,000 of the principal of the public debt that have been
discharged.

More than $1,500,000 has been devoted to the debt of gratitude to the
warriors of the Revolution; a nearly equal sum to the construction of
fortifications and the acquisition of ordnance and other permanent
preparations of national defense; $500,000 to the gradual increase of
the Navy; an equal sum for purchases of territory from the Indians and
payment of annuities to them; and upward of $1,000,000 for objects of
internal improvement authorized by special acts of the last Congress. If
we add to these $4,000,000 for payment of interest upon the public debt,
there remains a sum of $7,000,000, which have defrayed the whole expense
of the administration of Government in its legislative, executive, and
judiciary departments, including the support of the military and naval
establishments and all the occasional contingencies of a government
coextensive with the Union.

The amount of duties secured on merchandise imported since the
commencement of the year is about $25,500,000, and that which will
accrue during the current quarter is estimated at $5,500,000; from these
$31,000,000, deducting the draw-backs, estimated at less than
$7,000,000, a sum exceeding $24,000,000 will constitute the revenue of
the year, and will exceed the whole expenditures of the year. The entire
amount of the public debt remaining due on the first of January next
will be short of $81,000,000.

By an act of Congress of the 3d of March last a loan of $12,000,000 was
authorized at 4.5%, or an exchange of stock to that amount of 4.5% for a
stock of 6%, to create a fund for extinguishing an equal amount of the
public debt, bearing an interest of 6%, redeemable in 1826. An account
of the measures taken to give effect to this act will be laid before you
by the Secretary of the Treasury. As the object which it had in view has
been but partially accomplished, it will be for the consideration of
Congress whether the power with which it clothed the Executive should
not be renewed at an early day of the present session, and under what
modifications.

The act of Congress of the 3d of March last, directing the Secretary of
the Treasury to subscribe, in the name and for the use of the United
States, for 1,500 shares of the capital stock of the Chesapeake and
Delaware Canal Company, has been executed by the actual subscription for
the amount specified; and such other measures have been adopted by that
officer, under the act, as the fulfillment of its intentions requires.
The latest accounts received of this important undertaking authorize the
belief that it is in successful progress.

The payments into the Treasury from the proceeds of the sales of the
public lands during the present year were estimated at $1,000,000. The
actual receipts of the first two quarters have fallen very little short
of that sum; it is not expected that the second half of the year will be
equally productive, but the income of the year from that source may now
be safely estimated at $1,500,000. The act of Congress of May 18th,
1824, to provide for the extinguishment of the debt due to the United
States by the purchasers of public lands, was limited in its operation
of relief to the purchaser to the 10th of April last. Its effect at the
end of the quarter during which it expired was to reduce that debt from
$10,000,000 to $7,000,000 By the operation of similar prior laws of
relief, from and since that of March 2d, 1821, the debt had been reduced
from upward of $22,000,000 to $10,000,000.

It is exceedingly desirable that it should be extinguished altogether;
and to facilitate that consummation I recommend to Congress the revival
for one year more of the act of May 18th, 1824, with such provisional
modification as may be necessary to guard the public interests against
fraudulent practices in the resale of the relinquished land.

The purchasers of public lands are among the most useful of our fellow
citizens, and since the system of sales for cash alone has been
introduced great indulgence has been justly extended to those who had
previously purchased upon credit. The debt which had been contracted
under the credit sales had become unwieldy, and its extinction was alike
advantageous to the purchaser and to the public. Under the system of
sales, matured as it has been by experience, and adapted to the
exigencies of the times, the lands will continue as they have become, an
abundant source of revenue; and when the pledge of them to the public
creditor shall have been redeemed by the entire discharge of the
national debt, the swelling tide of wealth with which they replenish the
common Treasury may be made to reflow in unfailing streams of
improvement from the Atlantic to the Pacific Ocean.

The condition of the various branches of the public service resorting
from the Department of War, and their administration during the current
year, will be exhibited in the report of the Secretary of War and the
accompanying documents herewith communicated. The organization and
discipline of the Army are effective and satisfactory. To counteract the
prevalence of desertion among the troops it has been suggested to
withhold from the men a small portion of their monthly pay until the
period of their discharge; and some expedient appears to be necessary to
preserve and maintain among the officers so much of the art of
horsemanship as could scarcely fail to be found wanting on the possible
sudden eruption of a war, which should take us unprovided with a single
corps of cavalry.

The Military Academy at West Point, under the restrictions of a severe
but paternal superintendence, recommends itself more and more to the
patronage of the nation, and the numbers of meritorious officers which
it forms and introduces to the public service furnishes the means of
multiplying the undertakings of the public improvements to which their
acquirements at that institution are peculiarly adapted. The school of
artillery practice established at Fortress Monroe Hampton, Virginia is
well suited to the same purpose, and may need the aid of further
legislative provision to the same end. The reports of the various
officers at the head of the administrative branches of the military
service, connected with the quartering, clothing, subsistence, health,
and pay of the Army, exhibit the assiduous vigilance of those officers
in the performance of their respective duties, and the faithful
accountability which has pervaded every part of the system.

Our relations with the numerous tribes of aboriginal natives of this
country, scattered over its extensive surface and so dependent even for
their existence upon our power, have been during the present year highly
interesting. An act of Congress of May 25th, 1824, made an appropriation
to defray the expenses of making treaties of trade and friendship with
the Indian tribes beyond the Mississippi. An act of March 3d, 1825,
authorized treaties to be made with the Indians for their consent to the
making of a road from the frontier of Missouri to that of New Mexico,
and another act of the same date provided for defraying the expenses of
holding treaties with the Sioux, Chippeways, Menomenees, Sauks, Foxes,
etc., for the purpose of establishing boundaries and promoting peace
between said tribes.

The first and last objects of these acts have been accomplished, and the
second is yet in a process of execution. The treaties which since the
last session of Congress have been concluded with the several tribes
will be laid before the Senate for their consideration conformably to
the Constitution. They comprise large and valuable acquisitions of
territory, and they secure an adjustment of boundaries and give pledges
of permanent peace between several tribes which had been long waging
bloody wars against each other.

On the 12th of February last a treaty was signed at the Indian Springs
between commissioners appointed on the part of the United States and
certain chiefs and individuals of the Creek Nation of Indians, which was
received at the seat of Government only a very few days before the close
of the last session of Congress and of the late Administration. The
advice and consent of the Senate was given to it on the 3d of March, too
late for it to receive the ratification of the then President of the
United States; it was ratified on the 7th of March, under the
unsuspecting impression that it had been negotiated in good faith and in
the confidence inspired by the recommendation of the Senate. The
subsequent transactions in relation to this treaty will form the subject
of a separate communication.

The appropriations made by Congress for public works, as well in the
construction of fortifications as for purposes of internal improvement,
so far as they have been expended, have been faithfully applied. Their
progress has been delayed by the want of suitable officers for
superintending them. An increase of both the corps of engineers,
military and topographical, was recommended by my predecessor at the
last session of Congress. The reasons upon which that recommendation was
founded subsist in all their force and have acquired additional urgency
since that time. The Military Academy at West Point will furnish from
the cadets there officers well qualified for carrying this measure into
effect.

The Board of Engineers for Internal Improvement, appointed for carrying
into execution the act of Congress of April 30th, 1824, "to procure the
necessary surveys, plans, and estimates on the subject of roads and
canals", have been actively engaged in that service from the close of
the last session of Congress. They have completed the surveys necessary
for ascertaining the practicability of a canal from the Chesapeake Bay
to the Ohio River, and are preparing a full report on that subject,
which, when completed, will be laid before you. The same observation is
to be made with regard to the two other objects of national importance
upon which the Board have been occupied, namely, the accomplishment of a
national road from this city to New Orleans, and the practicability of
uniting the waters of Lake Memphramagog with Connecticut River and the
improvement of the navigation of that river. The surveys have been made
and are nearly completed. The report may be expected at an early period
during the present session of Congress.

The acts of Congress of the last session relative to the surveying,
marking, or laying out roads in the Territories of Florida, Arkansas,
and Michigan, from Missouri to Mexico, and for the continuation of the
Cumberland road, are, some of them, fully executed, and others in the
process of execution. Those for completing or commencing fortifications
have been delayed only so far as the Corps of Engineers has been
inadequate to furnish officers for the necessary superintendence of the
works. Under the act confirming the statutes of Virginia and Maryland
incorporating the Chesapeake and Ohio Canal Company, three commissioners
on the part of the United States have been appointed for opening books
and receiving subscriptions, in concert with a like number of
commissioners appointed on the part of each of those States. A meeting
of the commissioners has been postponed, to await the definitive report
of the board of engineers.

The light-houses and monuments for the safety of our commerce and
mariners, the works for the security of Plymouth Beach and for the
preservation of the islands in Boston Harbor, have received the
attention required by the laws relating to those objects respectively.
The continuation of the Cumberland road, the most important of them all,
after surmounting no inconsiderable difficulty in fixing upon the
direction of the road, has commenced under the most promising of
auspices, with the improvements of recent invention in the mode of
construction, and with advantage of a great reduction in the comparative
cost of the work.

The operation of the laws relating to the Revolutionary pensioners may
deserve the renewed consideration of Congress. The act of March 18th,
1818, while it made provision for many meritorious and indigent citizens
who had served in the War of Independence, opened a door to numerous
abuses and impositions. To remedy this the act of May 1st, 1820, exacted
proofs of absolute indigence, which many really in want were unable and
all susceptible of that delicacy which is allied to many virtues must be
deeply reluctant to give. The result has been that some among the least
deserving have been retained, and some in whom the requisites both of
worth and want were combined have been stricken from the list. As the
numbers of these venerable relics of an age gone by diminish; as the
decays of body, mind, and estate of those that survive must in the
common course of nature increase, should not a more liberal portion of
indulgence be dealt out to them? May not the want in most instances be
inferred from the demand when the service can be proved, and may not the
last days of human infirmity be spared the mortification of purchasing a
pittance of relief only by the exposure of its own necessities? I submit
to Congress the expediency of providing for individual cases of this
description by special enactment, or of revising the act of May 1st,
1820, with a view to mitigate the rigor of its exclusions in favor of
persons to whom charity now bestowed can scarcely discharge the debt of
justice.

The portion of the naval force of the Union in actual service has been
chiefly employed on three stations--the Mediterranean, the coasts of
South America bordering on the Pacific Ocean, and the West Indies. An
occasional cruiser has been sent to range along the African shores most
polluted by the traffic of slaves; one armed vessel has been stationed
on the coast of our eastern boundary, to cruise along the fishing
grounds in Hudsons Bay and on the coast of Labrador, and the first
service of a new frigate has been performed in restoring to his native
soil and domestic enjoyments the veteran hero whose youthful blood and
treasure had freely flowed in the cause of our country's independence,
and whose whole life has been a series of services and sacrifices to the
improvement of his fellow men.

The visit of General Lafayette, alike honorable to himself and to our
country, closed, as it had commenced, with the most affecting
testimonials of devoted attachment on his part, and of unbounded
gratitude of this people to him in return. It will form here-after a
pleasing incident in the annals of our Union, giving to real history the
intense interest of romance and signally marking the unpurchasable
tribute of a great nation's social affections to the disinterested
champion of the liberties of human-kind.

The constant maintenance of a small squadron in the Mediterranean is a
necessary substitute for the humiliating alternative of paying tribute
for the security of our commerce in that sea, and for a precarious
peace, at the mercy of every caprice of four Barbary States, by whom it
was liable to be violated. An additional motive for keeping a
respectable force stationed there at this time is found in the maritime
war raging between the Greeks and the Turks, and in which the neutral
navigation of this Union is always in danger of outrage and depredation.
A few instances have occurred of such depredations upon our merchant
vessels by privateers or pirates wearing the Grecian flag, but without
real authority from the Greek or any other Government. The heroic
struggles of the Greeks themselves, in which our warmest sympathies as
free men and Christians have been engaged, have continued to be
maintained with vicissitudes of success adverse and favorable.

Similar motives have rendered expedient the keeping of a like force on
the coasts of Peru and Chile on the Pacific. The irregular and
convulsive character of the war upon the shores has been extended to the
conflicts upon the ocean. An active warfare has been kept up for years
with alternate success, though generally to the advantage of the
American patriots. But their naval forces have not always been under the
control of their own Governments. Blockades, unjustifiable upon any
acknowledged principles of international law, have been proclaimed by
officers in command, and though disavowed by the supreme authorities,
the protection of our own commerce against them has been made cause of
complaint and erroneous imputations against some of the most gallant
officers of our Navy. Complaints equally groundless have been made by
the commanders of the Spanish royal forces in those seas; but the most
effective protection to our commerce has been the flag and the firmness
of our own commanding officers.

The cessation of the war by the complete triumph of the patriot cause
has removed, it is hoped, all cause of dissension with one party and all
vestige of force of the other. But an unsettled coast of many degrees of
latitude forming a part of our own territory and a flourishing commerce
and fishery extending to the islands of the Pacific and to China still
require that the protecting power of the Union should be displayed under
its flag as well upon the ocean as upon the land.

The objects of the West India Squadron have been to carry into execution
the laws for the suppression of the African slave trade; for the
protection of our commerce against vessels of piratical character,
though bearing commissions from either of the belligerent parties; for
its protection against open and unequivocal pirates. These objects
during the present year have been accomplished more effectually than at
any former period. The African slave trade has long been excluded from
the use of our flag, and if some few citizens of our country have
continued to set the laws of the Union as well as those of nature and
humanity at defiance by persevering in that abominable traffic, it has
been only by sheltering themselves under the banners of other nations
less earnest for the total extinction of the trade of ours.

The active, persevering, and unremitted energy of Captain Warrington and
of the officers and men under his command on that trying and perilous
service have been crowned with signal success, and are entitled to the
approbation of their country. But experience has shown that not even a
temporary suspension or relaxation from assiduity can be indulged on
that station without reproducing piracy and murder in all their horrors;
nor is it probably that for years to come our immensely valuable
commerce in those seas can navigate in security without the steady
continuance of an armed force devoted to its protection.

It were, indeed, a vain and dangerous illusion to believe that in the
present or probable condition of human society a commerce so extensive
and so rich as ours could exist and be pursued in safety without the
continual support of a military marine--the only arm by which the power
of this Confederacy can be estimated or felt by foreign nations, and the
only standing military force which can never be dangerous to our own
liberties at home. A permanent naval peace establishment, therefore,
adapted to our present condition, and adaptable to that gigantic growth
with which the nation is advancing in its career, is among the subjects
which have already occupied the foresight of the last Congress, and
which will deserve your serious deliberations. Our Navy, commenced at an
early period of our present political organization upon a scale
commensurate with the incipient energies, the scanty resources, and the
comparative indigence of our infancy, was even then found adequate to
cope with all the powers of Barbary, save the first, and with one of the
principle maritime powers of Europe.

At a period of further advancement, but with little accession of
strength, it not only sustained with honor the most unequal of
conflicts, but covered itself and our country with unfading glory. But
it is only since the close of the late war that by the numbers and force
of the ships of which it was composed it could deserve the name of a
navy. Yet it retains nearly the same organization as when it consisted
only of five frigates. The rules and regulations by which it is governed
earnestly call for revision, and the want of a naval school of
instruction, corresponding with the Military Academy at West Point, for
the formation of scientific and accomplished officers, is felt with
daily increasing aggravation.

The act of Congress of May 26th, 1824, authorizing an examination and
survey of the harbor of Charleston, in South Carolina, of St. Marys, in
Georgia, and of the coast of Florida, and for other purposes, has been
executed so far as the appropriation would admit. Those of the 3d of
March last, authorizing the establishment of a navy yard and depot on
the coast of Florida, in the Gulf of Mexico, and authorizing the
building of ten sloops of war, and for other purposes, are in the course
of execution, for the particulars of which and other objects connected
with this Department I refer to the report of the Secretary of the Navy,
herewith communicated.

A report from the Post Master General is also submitted, exhibiting the
present flourishing condition of that Department. For the first time for
many years the receipts for the year ending on the first of July last
exceeded the expenditures during the same period to the amount of more
than $45,000. Other facts equally creditable to the administration of
this Department are that in two years from July 1st, 1823, an
improvement of more than $185,000 in its pecuniary affairs has been
realized; that in the same interval the increase of the transportation
of the mail has exceeded 1,500,000 miles annually, and that 1,040 new
post offices have been established. It hence appears that under
judicious management the income from this establishment may be relied on
as fully adequate to defray its expenses, and that by the discontinuance
of post roads altogether unproductive, others of more useful character
may be opened, 'til the circulation of the mail shall keep pace with the
spread of our population, and the comforts of friendly correspondence,
the exchanges of internal traffic, and the lights of the periodical
press shall be distributed to the remotest corners of the Union, at a
charge scarcely perceptible to any individual, and without the cost of a
dollar to the public Treasury.

Upon this first occasion of addressing the Legislature of the Union,
with which I have been honored, in presenting to their view the
execution so far as it has been effected of the measures sanctioned by
them for promoting the internal improvement of our country, I can not
close the communication without recommending to their calm and
persevering consideration the general principle in a more enlarged
extent. The great object of the institution of civil government is the
improvement of the condition of those who are parties to the social
compact, and no government, in what ever form constituted, can
accomplish the lawful ends of its institution but in proportion as it
improves the condition of those over whom it is established. Roads and
canals, by multiplying and facilitating the communications and
intercourse between distant regions and multitudes of men, are among the
most important means of improvement. But moral, political, intellectual
improvement are duties assigned by the Author of Our Existence to social
no less than to individual man.

For the fulfillment of those duties governments are invested with power,
and to the attainment of the end--the progressive improvement of the
condition of the governed--the exercise of delegated powers is a duty as
sacred and indispensable as the usurpation of powers not granted is
criminal and odious.

Among the first, perhaps the very first, instrument for the improvement
of the condition of men is knowledge, and to the acquisition of much of
the knowledge adapted to the wants, the comforts, and enjoyments of
human life public institutions and seminaries of learning are essential.
So convinced of this was the first of my predecessors in this office,
now first in the memory, as, living, he was first in the hearts, of our
country-men, that once and again in his addresses to the Congresses with
whom he cooperated in the public service he earnestly recommended the
establishment of seminaries of learning, to prepare for all the
emergencies of peace and war--a national university and a military
academy. With respect to the latter, had he lived to the present day, in
turning his eyes to the institution at West Point he would have enjoyed
the gratification of his most earnest wishes; but in surveying the city
which has been honored with his name he would have seen the spot of
earth which he had destined and bequeathed to the use and benefit of his
country as the site for a university still bare and barren.

In assuming her station among the civilized nations of the earth it
would seem that our country had contracted the engagement to contribute
her share of mind, of labor, and of expense to the improvement of those
parts of knowledge which lie beyond the reach of individual acquisition,
and particularly to geographical and astronomical science. Looking back
to the history only of the half century since the declaration of our
independence, and observing the generous emulation with which the
Governments of France, Great Britain, and Russia have devoted the
genius, the intelligence, the treasures of their respective nations to
the common improvement of the species in these branches of science, is
it not incumbent upon us to inquire whether we are not bound by
obligations of a high and honorable character to contribute our portion
of energy and exertion to the common stock? The voyages of discovery
prosecuted in the course of that time at the expense of those nations
have not only redounded to their glory, but to the improvement of human
knowledge.

We have been partakers of that improvement and owe for it a sacred debt,
not only of gratitude, but of equal or proportional exertion in the same
common cause. Of the cost of these undertakings, if the mere
expenditures of outfit, equipment, and completion of the expeditions
were to be considered the only charges, it would be unworthy of a great
and generous nation to take a second thought. One hundred expeditions of
circumnavigation like those of Cook and La Prouse would not burden the
exchequer of the nation fitting them out so much as the ways and means
of defraying a single campaign in war. But if we take into account the
lives of those benefactors of man-kind of which their services in the
cause of their species were the purchase, how shall the cost of those
heroic enterprises be estimated, and what compensation can be made to
them or to their countries for them? Is it not by bearing them in
affectionate remembrance? Is it not still more by imitating their
example--by enabling country-men of our own to pursue the same career
and to hazard their lives in the same cause?

In inviting the attention of Congress to the subject of internal
improvements upon a view thus enlarged it is not my desire to recommend
the equipment of an expedition for circumnavigating the globe for
purposes of scientific research and inquiry. We have objects of useful
investigation nearer home, and to which our cares may be more
beneficially applied. The interior of our own territories has yet been
very imperfectly explored. Our coasts along many degrees of latitude
upon the shores of the Pacific Ocean, though much frequented by our
spirited commercial navigators, have been barely visited by our public
ships. The River of the West, first fully discovered and navigated by a
country-man of our own, still bears the name of the ship in which he
ascended its waters, and claims the protection of our armed national
flag at its mouth. With the establishment of a military post there or at
some other point of that coast, recommended by my predecessor and
already matured in the deliberations of the last Congress, I would
suggest the expediency of connecting the equipment of a public ship for
the exploration of the whole north-west coast of this continent.

The establishment of an uniform standard of weights and measures was one
of the specific objects contemplated in the formation of our
Constitution, and to fix that standard was on of the powers delegated by
express terms in that instrument to Congress. The Governments of Great
Britain and France have scarcely ceased to be occupied with inquiries
and speculations on the same subject since the existence of our
Constitution, and with them it has expanded into profound, laborious,
and expensive researches into the figure of the earth and the
comparative length of the pendulum vibrating seconds in various
latitudes from the equator to the pole. These researches have resulted
in the composition and publication of several works highly interesting
to the cause of science. The experiments are yet in the process of
performance. Some of them have recently been made on our own shores,
within the walls of one of our own colleges, and partly by one of our
own fellow citizens. It would be honorable to our country if the sequel
of the same experiments should be countenanced by the patronage of our
Government, as they have hitherto been by those of France and Britain.

Connected with the establishment of an university, or separate from it,
might be undertaken the erection of an astronomical observatory, with
provision for the support of an astronomer, to be in constant attendance
of observation upon the phenomena of the heavens, and for the periodical
publication of his observances. It is with no feeling of pride as an
American that the remark may be made that on the comparatively small
territorial surface of Europe there are existing upward of 130 of these
light-houses of the skies, while throughout the whole American
hemisphere there is not one. If we reflect a moment upon the discoveries
which in the last four centuries have been made in the physical
constitution of the universe by the means of these buildings and of
observers stationed in them, shall we doubt of their usefulness to every
nation? And while scarcely a year passes over our heads without bringing
some new astronomical discovery to light, which we must fain receive at
second hand from Europe, are we not cutting ourselves off from the means
of returning light for light while we have neither observatory nor
observer upon our half of the globe and the earth revolves in perpetual
darkness to our unsearching eyes?

When, on October 25th, 1791, the first President of the United States
announced to Congress the result of the first enumeration of the
inhabitants of this Union, he informed them that the returns gave the
pleasing assurance that the population of the United States bordered on
4,000,000 persons. At the distance of 30 years from that time the last
enumeration, five years since completed, presented a population
bordering on 10,000,000. Perhaps of all the evidence of a prosperous and
happy condition of human society the rapidity of the increase of
population is the most unequivocal. But the demonstration of our
prosperity rests not alone upon this indication.

Our commerce, our wealth, and the extent of our territories have
increased in corresponding proportions, and the number of independent
communities associated in our Federal Union has since that time nearly
doubled. The legislative representation of the States and people in the
two Houses of Congress has grown with the growth of their constituent
bodies. The House, which then consisted of 65 members, now numbers
upward of 200. The Senate, which consisted of 26 members, has now 48.
But the executive and, still more, the judiciary departments are yet in
a great measure confined to their primitive organization, and are now
not adequate to the urgent wants of a still growing community.

The naval armaments, which at an early period forced themselves upon the
necessities of the Union, soon led to the establishment of a Department
of the Navy. But the Departments of Foreign Affairs and of the Interior,
which early after the formation of the Government had been united in
one, continue so united to this time, to the unquestionable detriment of
the public service. The multiplication of our relations with the nations
and Governments of the Old World has kept pace with that of our
population and commerce, while within the last ten years a new family of
nations in our own hemisphere has arisen among the inhabitants of the
earth, with whom our intercourse, commercial and political, would of
itself furnish occupation to an active and industrious department.

The constitution of the judiciary, experimental and imperfect as it was
even in the infancy of our existing Government, is yet more inadequate
to the administration of national justice at our present maturity. Nine
years have elapsed since a predecessor in this office, now not the last,
the citizen who, perhaps, of all others throughout the Union contributed
most to the formation and establishment of our Constitution, in his
valedictory address to Congress, immediately preceding his retirement
from public life, urgently recommended the revision of the judiciary and
the establishment of an additional executive department. The exigencies
of the public service and its unavoidable deficiencies, as now in
exercise, have added yearly cumulative weight to the considerations
presented by him as persuasive to the measure, and in recommending it to
your deliberations I am happy to have the influence of this high
authority in aid of the undoubting convictions of my own experience.

The laws relating to the administration of the Patent Office are
deserving of much consideration and perhaps susceptible of some
improvement. The grant of power to regulate the action of Congress upon
this subject has specified both the end to be obtained and the means by
which it is to be effected, "to promote the progress of science and
useful arts by securing for limited times to authors and inventors the
exclusive right to their respective writings and discoveries". If an
honest pride might be indulged in the reflection that on the records of
that office are already found inventions the usefulness of which has
scarcely been transcended in the annals of human ingenuity, would not
its exultation be allayed by the inquiry whether the laws have
effectively insured to the inventors the reward destined to them by the
Constitution--even a limited term of exclusive right to their
discoveries?

On December 24th, 1799, it was resolved by Congress that a marble
monument should be erected by the United States in the Capitol at the
city of Washington; that the family of General Washington should be
requested to permit his body to be deposited under it, and that the
monument be so designed as to commemorate the great events of his
military and political life. In reminding Congress of this resolution
and that the monument contemplated by it remains yet without execution,
I shall indulge only the remarks that the works at the Capitol are
approaching to completion; that the consent of the family, desired by
the resolution, was requested and obtained; that a monument has been
recently erected in this city over the remains of another distinguished
patriot of the Revolution, and that a spot has been reserved within the
walls where you are deliberating for the benefit of this and future
ages, in which the mortal remains may be deposited of him whose spirit
hovers over you and listens with delight to every act of the
representatives of his nation which can tend to exalt and adorn his and
their country.

The Constitution under which you are assembled is a charter of limited
powers. After full and solemn deliberation upon all or any of the
objects which, urged by an irresistible sense of my own duty, I have
recommended to your attention should you come to the conclusion that,
however desirable in themselves, the enactment of laws for effecting
them would transcend the powers committed to you by that venerable
instrument which we are all bound to support, let no consideration
induce you to assume the exercise of powers not granted to you by the
people.

But if the power to exercise exclusive legislation in all cases what so
ever over the District of Columbia; if the power to lay and collect
taxes, duties, imposts, and excises, to pay the debts and provide for
the common defense and general welfare of the United States; if the
power to regulate commerce with foreign nations and among the several
States and with the Indian tribes, to fix the standard of weights and
measures, to establish post offices and post roads, to declare war, to
raise and support armies, to provide and maintain a navy, to dispose of
and make all needful rules and regulations respecting the territory or
other property belonging to the United States, and to make all laws
which shall be necessary and proper for carrying these powers into
execution--if these powers and others enumerated in the Constitution may
be effectually brought into action by laws promoting the improvement of
agriculture, commerce, and manufactures, the cultivation and
encouragement of the mechanic and of the elegant arts, the advancement
of literature, and the progress of the sciences, ornamental and
profound, to refrain from exercising them for the benefit of the people
themselves would be to hide in the earth the talent committed to our
charge--would be treachery to the most sacred of trusts.

The spirit of improvement is abroad upon the earth. It stimulates the
hearts and sharpens the faculties not of our fellow citizens alone, but
of the nations of Europe and of their rulers. While dwelling with
pleasing satisfaction upon the superior excellence of our political
institutions, let us not be unmindful that liberty is power; that the
nation blessed with the largest portion of liberty must in proportion to
its numbers be the most powerful nation upon earth, and that the tenure
of power by man is, in the moral purposes of his Creator, upon condition
that it shall be exercised to ends of beneficence, to improve the
condition of himself and his fellow men.

While foreign nations less blessed with that freedom which is power than
ourselves are advancing with gigantic strides in the career of public
improvement, were we to slumber in indolence or fold up our arms and
proclaim to the world that we are palsied by the will of our
constituents, would it not be to cast away the bounties of Providence
and doom ourselves to perpetual inferiority? In the course of the year
now drawing to its close we have beheld, under the auspices and at the
expense of one State of this Union, a new university unfolding its
portals to the sons of science and holding up the torch of human
improvement to eyes that seek the light. We have seen under the
persevering and enlightened enterprise of another State the waters of
our Western lakes mingle with those of the ocean. If undertakings like
these have been accomplished in the compass of a few years by the
authority of single members of our Confederation, can we, the
representative authorities of the whole Union, fall behind our fellow
servants in the exercise of the trust committed to us for the benefit of
our common sovereign by the accomplishment of works important to the
whole and to which neither the authority nor the resources of any one
State can be adequate?

Finally, fellow citizens, I shall await with cheering hope and faithful
cooperation the result of your deliberations, assured that, without
encroaching upon the powers reserved to the authorities of the
respective States or to the people, you will, with a due sense of your
obligations to your country and of the high responsibilities weighing
upon yourselves, give efficacy to the means committed to you for the
common good. And may He who searches the hearts of the children of men
prosper your exertions to secure the blessings of peace and promote the
highest welfare of your country.

JOHN QUINCY ADAMS

***

State of the Union Address
John Quincy Adams
December 5, 1826

Fellow Citizens of the Senate and of the House of Representatives:

The assemblage of the representatives of our Union in both Houses of the
Congress at this time occurs under circumstances calling for the renewed
homage of our grateful acknowledgments to the Giver of All Good. With
the exceptions incidental to the most felicitous condition of human
existence, we continue to be highly favored in all the elements which
contribute to individual comfort and to national prosperity. In the
survey of our extensive country we have generally to observe abodes of
health and regions of plenty. In our civil and political relations we
have peace without and tranquillity within our borders. We are, as a
people, increasing with unabated rapidity in population, wealth, and
national resources, and whatever differences of opinion exist among us
with regard to the mode and the means by which we shall turn the
beneficence of Heaven to the improvement of our own condition, there is
yet a spirit animating us all which will not suffer the bounties of
Providence to be showered upon us in vain, but will receive them with
grateful hearts, and apply them with unwearied hands to the advancement
of the general good.

Of the subjects recommended to Congress at their last session, some were
then definitively acted upon. Others, left unfinished, but partly
matured, will recur to your attention without needing a renewal of
notice from me. The purpose of this communication will be to present to
your view the general aspect of our public affairs at this moment and
the measures which have been taken to carry into effect the intentions
of the Legislature as signified by the laws then and heretofore enacted.

In our intercourse with the other nations of the earth we have still the
happiness of enjoying peace and a general good understanding, qualified,
however, in several important instances by collisions of interest and by
unsatisfied claims of justice, to the settlement of which the
constitutional interposition of the legislative authority may become
ultimately indispensable.

By the decease of the Emperor Alexander of Russia, which occurred
contemporaneously with the commencement of the last session of Congress,
the United States have been deprived of a long tried, steady, and
faithful friend. Born to the inheritance of absolute power and trained
in the school of adversity, from which no power on earth, however
absolute, is exempt, that monarch from his youth had been taught to feel
the force and value of public opinion and to be sensible that the
interests of his own Government would best be promoted by a frank and
friendly intercourse with this Republic, as those of his people would be
advanced by a liberal intercourse with our country. A candid and
confidential interchange of sentiments between him and the Government of
the United States upon the affairs of Southern America took place at a
period not long preceding his demise, and contributed to fix that course
of policy which left to the other Governments of Europe no alternative
but that of sooner or later recognizing the independence of our southern
neighbors, of which the example had by the United States already been
set.

The ordinary diplomatic communications between his successor, the
Emperor Nicholas, and the United States have suffered some interruption
by the illness, departure, and subsequent decease of his minister
residing here, who enjoyed, as he merited, the entire confidence of his
new sovereign, as he had eminently responded to that of his predecessor.
But we have had the most satisfactory assurances that the sentiments of
the reigning Emperor toward the United States are altogether conformable
to those which had so long and constantly animated his imperial brother,
and we have reason to hope that they will serve to cement that harmony
and good understanding between the two nations which, founded in
congenial interests, can not but result in the advancement of the
welfare and prosperity of both.

Our relations of commerce and navigation with France are, by the
operation of the convention of June 24th, 1822, with that nation, in a
state of gradual and progressive improvement. Convinced by all our
experience, no less than by the principles of fair and liberal
reciprocity which the United States have constantly tendered to all the
nations of the earth as the rule of commercial intercourse which they
would universally prefer, that fair and equal competition is most
conducive to the interests of both parties, the United States in the
negotiation of that convention earnestly contended for a mutual
renunciation of discriminating duties and charges in the ports of the
two countries. Unable to obtain the immediate recognition of this
principle in its full extent, after reducing the duties of
discrimination so far as was found attainable it was agreed that at the
expiration of two years from October 1st, 1822, when the convention was
to go into effect, unless a notice of six months on either side should
be given to the other that the convention itself must terminate, those
duties should be reduced one quarter, and that this reduction should be
yearly repeated, until all discrimination should cease, while the
convention itself should continue in force. By the effect of this
stipulation three quarters of the discriminating duties which had been
levied by each party upon the vessels of the other in its ports have
already been removed; and on the first of next October, should the
convention be still in force, the remaining one quarter will be
discontinued. French vessels laden with French produce will be received
in our ports on the same terms as our own, and ours in return will enjoy
the same advantages in the ports of France.

By these approximations to an equality of duties and of charges not only
has the commerce between the two countries prospered, but friendly
dispositions have been on both sides encouraged and promoted. They will
continue to be cherished and cultivated on the part of the United
States. It would have been gratifying to have had it in my power to add
that the claims upon the justice of the French Government, involving the
property and the comfortable subsistence of many of our fellow citizens,
and which have been so long and so earnestly urged, were in a more
promising train of adjustment than at your last meeting; but their
condition remains unaltered.

With the Government of the Netherlands the mutual abandonment of
discriminating duties had been regulated by legislative acts on both
sides. The act of Congress of April 20th, 1818, abolished all
discriminating duties of impost and tonnage upon the vessels and produce
of the Netherlands in the ports of the United States upon the assurance
given by the Government of the Netherlands that all such duties
operating against the shipping and commerce of the United States in that
Kingdom had been abolished. These reciprocal regulations had continued
in force several years when the discriminating principle was resumed by
the Netherlands in a new and indirect form by a bounty of 10% in the
shape of a return of duties to their national vessels, and in which
those of the United States are not permitted to participate. By the act
of Congress of January 7th, 1824, all discriminating duties in the
United States were again suspended, so far as related to the vessels and
produce of the Netherlands, so long as the reciprocal exemption should
be extended to the vessels and produce of the United States in the
Netherlands. But the same act provides that in the event of a
restoration of discriminating duties to operate against the shipping and
commerce of the United States in any of the foreign countries referred
to therein the suspension of discriminating duties in favor of the
navigation of such foreign country should cease and all the provisions
of the acts imposing discriminating foreign tonnage and impost duties in
the United States should revive and be in full force with regard to that
nation.

In the correspondence with the Government of the Netherlands upon this
subject they have contended that the favor shown to their own shipping
by this bounty upon their tonnage is not to be considered a
discriminating duty; but it can not be denied that it produces all the
same effects. Had the mutual abolition been stipulated by treaty, such a
bounty upon the national vessels could scarcely have been granted
consistent with good faith. Yet as the act of Congress of January 7th,
1824 has not expressly authorized the Executive authority to determine
what shall be considered as a revival of discriminating duties by a
foreign government to the disadvantage of the United States, and as the
retaliatory measure on our part, however just and necessary, may tend
rather to that conflict of legislation which we deprecate than to that
concert to which we invite all commercial nations, as most conducive to
their interest and our own, I have thought it more consistent with the
spirit of our institutions to refer to the subject again to the
paramount authority of the Legislature to decide what measure the
emergency may require than abruptly by proclamation to carry into effect
the minatory provisions of the act of 1824.

During the last session of Congress treaties of amity, navigation, and
commerce were negotiated and signed at this place with the Government of
Denmark, in Europe, and with the Federation of Central America, in this
hemisphere. These treaties then received the constitutional sanction of
the Senate, by the advice and consent to their ratification. They were
accordingly ratified on the part of the United States, and during the
recess of Congress have been also ratified by the other respective
contracting parties. The ratifications have been exchanged, and they
have been published by proclamations, copies of which are herewith
communicated to Congress.

These treaties have established between the contracting parties the
principles of equality and reciprocity in their broadest and most
liberal extent, each party admitting the vessels of the other into its
ports, laden with cargoes the produce or manufacture of any quarter of
the globe, upon the payment of the same duties of tonnage and impost
that are chargeable upon their own. They have further stipulated that
the parties shall hereafter grant no favor of navigation or commerce to
any other nation which shall not upon the same terms be granted to each
other, and that neither party will impose upon articles of merchandise
the produce or manufacture of the other any other or higher duties than
upon the like articles being the produce or manufacture of any other
country. To these principles there is in the convention with Denmark an
exception with regard to the colonies of that Kingdom in the arctic
seas, but none with regard to her colonies in the West Indies.

In the course of the last summer the term to which our last commercial
treaty with Sweden was limited has expired. A continuation of it is in
the contemplation of the Swedish Government, and is believed to be
desirable on the part of the United States. It has been proposed by the
King of Sweden that pending the negotiation of renewal the expired
treaty should be mutually considered as still in force, a measure which
will require the sanction of Congress to be carried into effect on our
part, and which I therefore recommend to your consideration.

With Prussia, Spain, Portugal, and, in general, all the European powers
between whom and the United States relations of friendly intercourse
have existed their condition has not materially varied since the last
session of Congress. I regret not to be able to say the same of our
commercial intercourse with the colonial possessions of Great Britain in
America. Negotiations of the highest importance to our common interests
have been for several years in discussion between the two Governments,
and on the part of the United States have been invariably pursued in the
spirit of candor and conciliation. Interests of great magnitude and
delicacy had been adjusted by the conventions of 1815 and 1818, while
that of 1822, mediated by the late Emperor Alexander, had promised a
satisfactory compromise of claims which the Government of the United
States, in justice to the rights of a numerous class of their citizens,
was bound to sustain.

But with regard to the commercial intercourse between the United States
and the British colonies in America, it has been hitherto found
impracticable to bring the parties to an understanding satisfactory to
both. The relative geographical position and the respective products of
nature cultivated by human industry had constituted the elements of a
commercial intercourse between the United States and British America,
insular and continental, important to the inhabitants of both countries;
but it had been interdicted by Great Britain upon a principle heretofore
practiced upon by the colonizing nations of Europe, of holding the trade
of their colonies each in exclusive monopoly to herself.

After the termination of the late war this interdiction had been
revived, and the British Government declined including this portion of
our intercourse with her possessions in the negotiation of the
convention of 1815. The trade was then carried on exclusively in British
vessels 'til the act of Congress, concerning navigation, of 1818 and the
supplemental act of 1820 met the interdict by a corresponding measure on
the part of the United States. These measures, not of retaliation, but
of necessary self defense, were soon succeeded by an act of Parliament
opening certain colonial ports to the vessels of the United States
coming directly from them, and to the importation from them of certain
articles of our produce burdened with heavy duties, and excluding some
of the most valuable articles of our exports. The United States opened
their ports to British vessels from the colonies upon terms as exactly
corresponding with those of the act of Parliament as in the relative
position of the parties could be made, and a negotiation was commenced
by mutual consent, with the hope on our part that a reciprocal spirit of
accommodation and a common sentiment of the importance of the trade to
the interests of the inhabitants of the two countries between whom it
must be carried on would ultimately bring the parties to a compromise
with which both might be satisfied. With this view the Government of the
United States had determined to sacrifice something of that entire
reciprocity which in all commercial arrangements with foreign powers
they are entitled to demand, and to acquiesce in some inequalities
disadvantageous to ourselves rather than to forego the benefit of a
final and permanent adjustment of this interest to the satisfaction of
Great Britain herself. The negotiation, repeatedly suspended by
accidental circumstances, was, however, by mutual agreement and express
assent, considered as pending and to be speedily resumed.

In the mean time another act of Parliament, so doubtful and ambiguous in
its import as to have been misunderstood by the officers in the colonies
who were to carry it into execution, opens again certain colonial ports
upon new conditions and terms, with a threat to close them against any
nation which may not accept those terms as prescribed by the British
Government. This act, passed July, 1825, not communicated to the
Government of the United States, not understood by the British officers
of the customs in the colonies where it was to be enforced, was never
the less submitted to the consideration of Congress at their last
session. With the knowledge that a negotiation upon the subject had long
been in progress and pledges given of its resumption at an early day, it
was deemed expedient to await the result of that negotiation rather than
to subscribe implicitly to terms the import of which was not clear and
which the British authorities themselves in this hemisphere were not
prepared to explain.

Immediately after the close of the last session of Congress one of our
most distinguished citizens was dispatched as envoy extraordinary and
minister plenipotentiary to Great Britain, furnished with instructions
which we could not doubt would lead to a conclusion of this long
controverted interest upon terms acceptable to Great Britain. Upon his
arrival, and before he had delivered his letters of credence, he was bet
by an order of the British council excluding from and after the first of
December now current the vessels of the United States from all the
colonial British ports excepting those immediately bordering on our
territories. In answer to his expostulations upon a measure thus
unexpected he is informed that according to the ancient maxims of policy
of European nations having colonies their trade is an exclusive
possession of the mother country; that all participation in it by other
nations is a boon or favor not forming a subject of negotiation, but to
be regulated by the legislative acts of the power owning the colony;
that the British Government therefore declines negotiating concerning
it, and that as the United States did not forthwith accept purely and
simply the terms offered by the act of Parliament of July, 1825, Great
Britain would not now admit the vessels of the United States even upon
the terms on which she has opened them to the navigation of other
nations.

We have been accustomed to consider the trade which we have enjoyed with
the British colonies rather as an interchange of mutual benefits than as
a mere favor received; that under every circumstance we have given an
ample equivalent. We have seen every other nation holding colonies
negotiate with other nations and grant them freely admission to the
colonies by treaty, and so far are the other colonizing nations of
Europe now from refusing to negotiate for trade with their colonies that
we ourselves have secured access to the colonies of more than one of
them by treaty. The refusal, however, of Great Britain to negotiate
leaves to the United States no other alternative than that of regulating
or interdicting altogether the trade on their part, according as either
measure may effect the interests of our own country, and with that
exclusive object I would recommend the whole subject to your calm and
candid deliberations.

It is hoped that our unavailing exertions to accomplish a cordial good
understanding on this interest will not have an unpropitious effect upon
the other great topics of discussion between the two Governments. Our
north-eastern and north-western boundaries are still unadjusted. The
commissioners under the 7th article of the treaty of Ghent have nearly
come to the close of their labors; nor can we renounce the expectation,
enfeebled as it is, that they may agree upon their report to the
satisfaction or acquiescence of both parties. The commission for
liquidating the claims for indemnity for slaves carried away after the
close of the war has been sitting, with doubtful prospects of success.
Propositions of compromise have, however, passed between the two
Governments, the result of which we flatter ourselves may yet prove
unsatisfactory. Our own dispositions and purposes toward Great Britain
are all friendly and conciliatory; nor can we abandon but with strong
reluctance the belief that they will ultimately meet a return, not of
favors, which we neither as nor desire, but of equal reciprocity and
good will.

With the American Governments of this hemisphere we continue to maintain
an intercourse altogether friendly, and between their nations and ours
that commercial interchange of which mutual benefit is the source of
mutual comfort and harmony the result is in a continual state of
improvement. The war between Spain and them since the total expulsion of
the Spanish military force from their continental territories has been
little more than nominal, and their internal tranquillity, though
occasionally menaced by the agitations which civil wars never fail to
leave behind them, has not been affected by any serious calamity.

The congress of ministers from several of those nations which assembled
at Panama, after a short session there, adjourned to meet again at a
more favorable season in the neighborhood of Mexico. The decease of one
of our ministers on his way to the Isthmus, and the impediments of the
season, which delayed the departure of the other, deprived United States
of the advantage of being represented at the first meeting of the
congress. There is, however, no reason to believe that any transactions
of the congress were of a nature to affect injuriously the interests of
the United States or to require the interposition of our ministers had
they been present. Their absence has, indeed, deprived United States of
the opportunity of possessing precise and authentic information of the
treaties which were concluded at Panama; and the whole result has
confirmed me in the conviction of the expediency to the United States of
being represented at the congress. The surviving member of the mission,
appointed during your last session, has accordingly proceeded to his
destination, and a successor to his distinguished and lamented associate
will be nominated to the Senate. A treaty of amity, navigation, and
commerce has in the course of the last summer been concluded by our
minister plenipotentiary at Mexico with the united states of that
Confederacy, which will also be laid before the Senate for their advice
with regard to its ratification.

In adverting to the present condition of our fiscal concerns and to the
prospects of our revenue the first remark that calls our attention is
that they are less exuberantly prosperous than they were at the
corresponding period of the last year. The severe shock so extensively
sustained by the commercial and manufacturing interests in Great Britain
has not been without a perceptible recoil upon ourselves. A reduced
importation from abroad is necessarily succeeded by a reduced return to
the Treasury at home. The net revenue of the present year will not equal
that of the last, and the receipts of that which is to come will fall
short of those in the current year. The diminution, however, is in part
attributable to the flourishing condition of some of our domestic
manufactures, and so far is compensated by an equivalent more profitable
to the nation.

It is also highly gratifying to perceive that the deficiency in the
revenue, while it scarcely exceeds the anticipations of the last year's
estimate from the Treasury, has not interrupted the application of more
than $11 millions during the present year to the discharge of the
principal and interest of the debt, nor the reduction of upward of
$7,000,000 of the capital of the debt itself. The balance in the
Treasury on the first of January last was $5,201,650.43; the receipts
from that time to the 30th of September last were $19,585,932.50; the
receipts of the current quarter, estimated at $6,000,000, yield, with
the sums already received, a revenue of about $25,500,000 for the year;
the expenditures for the first 3 quarters of the year have amounted to
$18,714,226.66; the expenditures of the current quarter are expected,
including the $2,000,000 of the principal of the debt to be paid, to
balance the receipts; so that the expense of the year, amounting to
upward of $1,000,000 less than its income, will leave a proportionally
increased balance in the Treasury on January 1st, 1827, over that of the
first of January last; instead of $5,200,000 there will be $6,400,000.

The amount of duties secured on merchandise imported from the commence
of the year 'til September 30 is estimated at $21,250,000, and the
amount that will probably accrue during the present quarter is estimated
at $4,250,000, making for the whole year $25,500,000, from which the
draw-backs being deducted will leave a clear revenue from the customs
receivable in the year 1827 of about $20,400,000, which, with the sums
to be received from the proceeds of public lands, the bank dividends,
and other incidental receipts, will form an aggregate of about
$23,000,000, a sum falling short of the whole expenses of the present
year little more than the portion of those expenditures applied to the
discharge of the public debt beyond the annual appropriation of
$10,000,000 by the act of March 3d, 1817. At the passage of that act the
public debt amounted to $123,500,000. On the first of January next it
will be short of $74,000,000. In the lapse of these 10 years $50,000,000
of public debt, with the annual charge of upward of $3,000,000 of
interest upon them, have been extinguished. At the passage of tat act,
of the annual appropriation of $10,000,000, $7,000,000 were absorbed in
the payment of interest, and not more than $3,000,000 went to reduce the
capital of the debt. Of the same $10,000,000, at this time scarcely
$4,000,000 are applicable to the interest and upward of $6,000,000 are
effective in melting down the capital.

Yet our experience has proved that a revenue consisting so largely of
imposts and tonnage ebbs and flows to an extraordinary extent, with all
the fluctuations incident to the general commerce of the world. It is
within our recollection that even in the compass of the same last ten
years the receipts of the Treasury were not adequate to the expenditures
of the year, and that in two successive years it was found necessary to
resort to loans to meet the engagements of the nation. The returning
tides of the succeeding years replenished the public coffers until they
have again begun to feel the vicissitude of a decline. To produce these
alternations of fullness and exhaustion the relative operation of
abundant or unfruitful seasons, the regulations of foreign governments,
political revolutions, the prosperous or decaying condition of
manufactures, commercial speculations, and many other causes, not always
to be traced, variously combine.

We have found the alternate swells and diminutions embracing periods of
from two to three years. The last period of depression to United States
was from 1819 to 1822. The corresponding revival was from 1823 to the
commencement of the present year. Still, we have no cause to apprehend a
depression comparable to that of the former period, or even to
anticipate a deficiency which will intrench upon the ability to apply
the annual $10 millions to the reduction of the debt. It is well for us,
however, to be admonished of the necessity of abiding by the maxims of
the most vigilant economy, and of resorting to all honorable and useful
expedients for pursuing with steady and inflexible perseverance the
total discharge of the debt.

Besides the $7,000,000 of the loans of 1813 which will have been
discharged in the course of the present year, there are $9,000,000 which
by the terms of the contracts would have been and are now redeemable.
$13,000,000 more of the loan of 1814 will become redeemable from and
after the expiration of the present month, and $9,000,000 other from and
after the close of the ensuing year. They constitute a mass of
$31,000,000, all bearing an interest of 6%, more than $20,000,000 of
which will be immediately redeemable, and the rest within little more
than a year. Leaving of this amount $15,000,000 to continue at the
interest of 6%, but to be paid off as far as shall be found practicable
in the years 1827 and 1828, there is scarcely a doubt that the remaining
$16,000,000 might within a few months be discharged by a loan at not
exceeding 5%, redeemable in the years 1829 and 1830. By this operation a
sum of nearly $500,000 may be saved to the nation, and the discharge of
the whole $31,000,000 within the four years may be greatly facilitated
if not wholly accomplished.

By an act of Congress of March 3d, 1825, a loan for the purpose now
referred to, or a subscription to stock, was authorized, at an interest
not exceeding 4.5%. But at that time so large a portion of the floating
capital of the country was absorbed in commercial speculations and so
little was left for investment in the stocks that the measure was but
partially successful. At the last session of Congress the condition of
the funds was still unpropitious to the measure; but the change so soon
afterwards occurred that, had the authority existed to redeem the $9
millions now redeemable by an exchange of stocks or a loan at 5%, it is
morally certain that it might have been effected, and with it a yearly
saving of $90,000.

With regard to the collection of the revenue of imposts, certain
occurrences have within the last year been disclosed in one or two of
our principal ports, which engaged the attention of Congress at their
last session and may hereafter require further consideration. Until
within a very few years the execution of the laws for raising the
revenue, like that of all our other laws, has been insured more by the
moral sense of the community than by the rigors of a jealous precaution
or by penal sanction. Confiding in the exemplary punctuality and
unsullied integrity of our importing merchants, a gradual relaxation
from the provisions of the collection laws, a close adherence to which
have caused inconvenience and expense to them, had long become habitual,
and indulgences had been extended universally because they had never
been abused. It may be worthy of your serious consideration whether some
further legislative provision may not be necessary to come in aid of
this state of unguarded security.

From the reports herewith communicated of the Secretaries of War and of
the Navy, with the subsidiary documents annexed to them, will be
discovered the present condition and administration of our military
establishment on the land and on the sea. The organization of the Army
having undergone no change since its reduction to the present peace
establishment in 1821, it remains only to observe that it is yet found
adequate to all the purposes for which a permanent armed force in time
of peace can be needed or useful. It may be proper to add that, from a
difference of opinion between the late President of the United States
and the Senate with regard to the construction of the act of Congress of
March 2d, 1821, to reduce and fix the military peace establishment of
the United States, it remains hitherto so far without execution that no
colonel has been appointed to command one of the regiments of artillery.
A supplementary or explanatory act of the Legislature appears to be the
only expedient practicable for removing the difficulty of this
appointment.

In a period of profound peace the conduct of the mere military
establishment forms but a very inconsiderable portion of the duties
devolving upon the administration of the Department of War. It will be
seen by the returns from the subordinate departments of the Army that
every branch of the service is marked with order, regularity, and
discipline; that from the commanding general through all the gradations
of superintendence the officers feel themselves to have been citizens
before they were soldiers, and that the glory of a republican army must
consist in the spirit of freedom, by which it is animated, and of
patriotism, by which it is impelled. It may be confidently stated that
the moral character of the Army is in a state of continual improvement,
and that all the arrangements for the disposal of its parts have a
constant reference to that end.

But to the War Department are attributed other duties, having, indeed,
relation to a future possible condition of war, but being purely
defensive, and in their tendency contributing rather to the security and
permanency of peace--the erection of the fortifications provided for by
Congress, and adapted to secure our shores from hostile invasion; the
distribution of the fund of public gratitude and justice to the
pensioners of the Revolutionary war; the maintenance of our relations of
peace and protection with the Indian tribes, and the internal
improvements and surveys for the location of roads and canals, which
during the last three sessions of Congress have engaged so much of their
attention, and may engross so large a share of their future benefactions
to our country.

By the act of April 30th, 1824, suggested and approved by my
predecessor, the sum of $30,000 was appropriated for the purpose of
causing to be made the necessary surveys, plans, and estimates of the
routes of such roads and canals as the President of the United States
might deem of national importance in a commercial or military point of
view, or necessary for the transportation of the public mail. The
surveys, plans, and estimates for each, when completed, will be laid
before Congress.

In execution of this act a board of engineers was immediately
instituted, and have been since most assiduously and constantly occupied
in carrying it into effect. The first object to which their labors were
directed, by order of the late President, was the examination of the
country between the tide waters of the Potomac, the Ohio, and Lake Erie,
to ascertain the practicability of a communication between them, to
designate the most suitable route for the same, and to form plans and
estimates in detail of the expense of execution.

On March 2d, 1825, they made their first report, which was immediately
communicated to Congress, and in which they declared that having
maturely considered the circumstances observed by them personally, and
carefully studied the results of such of the preliminary surveys as were
then completed, they were decidedly of opinion that the communication
was practicable.

At the last session of Congress, before the board of engineers were
enabled to make up their second report containing a general plan and
preparatory estimate for the work, the Committee of the House of
Representatives upon Roads and Canals closed the session with a report
expressing the hope that the plan and estimate of the board of engineers
might at this time be prepared, and that the subject be referred to the
early and favorable consideration of Congress at their present session.
That expected report of the board of engineers is prepared, and will
forthwith be laid before you.

Under the resolution of Congress authorizing the Secretary of War to
have prepared a complete system of cavalry tactics, and a system of
exercise and instruction of field artillery, for the use of the militia
of the United States, to be reported to Congress at the present session,
a board of distinguished officers of the Army and of the militia has
been convened, whose report will be submitted to you with that of the
Secretary of War. The occasion was thought favorable for consulting the
same board, aided by the results of a correspondence with the governors
of the several States and Territories and other citizens of intelligence
and experience, upon the acknowledged defective condition of our militia
system, and of the improvements of which it is susceptible. The report
of the board upon this subject is also submitted for your consideration.

In the estimates of appropriations for the ensuing year upward of $5
millions will be submitted for the expenditures to be paid from the
Department of War. Less than two fifths of this will be applicable to
the maintenance and support of the Army. $1,500,000, in the form of
pensions, goes as a scarcely adequate tribute to the services and
sacrifices of a former age, and a more than equal sum invested in
fortifications, or for the preparations of internal improvement,
provides for the quiet, the comfort, and happier existence of the ages
to come. The appropriations to indemnify those unfortunate remnants of
another race unable alike to share in the enjoyments and to exist in the
presence of civilization, though swelling in recent years to a magnitude
burdensome to the Treasury, are generally not without their equivalents
in profitable value, or serve to discharge the Union from engagements
more burdensome than debt.

In like manner the estimate of appropriations for the Navy Department
will present an aggregate sum of upward of $3,000,000. About half of
these, however, covers the current expenditures of the Navy in actual
service, and half constitutes a fund of national property, the pledge of
our future glory and defense. It was scarcely one short year after the
close of the late war, and when the burden of its expenses and charges
was weighing heaviest upon the country, that Congress, by the act of
April 29th, 1816, appropriated $1,000,000 annually for eight years to
the gradual increase of the Navy. At a subsequent period this annual
appropriation was reduced to $500,000 for six years, of which the
present year is the last. A yet more recent appropriation the last two
years, for building ten sloops of war, has nearly restored the original
appropriation of 1816 of $1,000,000 for every year.

The result is before United States all. We have 12 line-of-battle ships,
20 frigates, and sloops of war in proportion, which, with a few months
preparation, may present a line of floating fortifications along the
whole range of our coast ready to meet any invader who might attempt to
set foot upon our shores. Combining with a system of fortifications upon
the shores themselves, commenced about the same time under the auspices
of my immediate predecessor, and hitherto systematically pursued, it has
placed in our possession the most effective sinews of war and has left
us at once an example and a lesson from which our own duties may be
inferred.

The gradual increase of the Navy was the principle of which the act of
April 29th, 1816, was the first development. It was the introduction of
a system to act upon the character and history of our country for an
indefinite series of ages. It was a declaration of that Congress to
their constituents and to posterity that it was the destiny and the duty
of these confederated States to become in regular process of time and by
no petty advances a great naval power. That which they proposed to
accomplish in eight years is rather to be considered as the measure of
their means that the limitation of their design. They looked forward for
a term of years sufficient for the accomplishment of a definite portion
of their purpose, and they left to their successors to fill up the
canvas of which they had traced the large and prophetic outline. The
ships of the line and frigates which they had in contemplation will be
shortly completed. The time which they had allotted for the
accomplishment of the work has more than elapsed. It remains for your
consideration how their successors may contribute their portion of toil
and of treasure for the benefit of the succeeding age in the gradual
increase of our Navy.

There is perhaps no part of the exercise of the constitutional powers of
the Federal Government which has given more general satisfaction to the
people of the Union than this. The system has not been thus vigorously
introduced and hitherto sustained to be now departed from or abandoned.
In continuing to provide for the gradual increase of the Navy it may not
be necessary or expedient to add for the present any more to the number
of our ships; but should you deem it advisable to continue the yearly
appropriation of $0.5 millions to the same objects, it may be profitably
expended in a providing a supply of timber to be seasoned and other
materials for future use in the construction of docks or in laying the
foundations of a school for naval education, as to the wisdom of
Congress either of those measures may appear to claim the preference.

Of the small portions of this Navy engaged in actual service during the
peace, squadrons have continued to be maintained in the Pacific Ocean,
in the West India seas, and in the Mediterranean, to which has been
added a small armament to cruise on the eastern coast of South America.
In all they have afforded protection to our commerce, have contributed
to make our country advantageously known to foreign nations, have
honorably employed multitudes of our sea men in the service of their
country, and have inured numbers of youths of the rising generation to
lives of manly hardihood and of nautical experience and skill.

The piracies with which the West India seas were for several years
infested have been totally suppressed, but in the Mediterranean they
have increased in a manner afflictive to other nations, and but for the
continued presence of our squadron would probably have been distressing
to our own.

The war which has unfortunately broken out between the Republic of
Buenos Ayres and the Brazilian Government has given rise to very great
irregularities among the naval officers of the latter, by whom
principles in relation to blockades and to neutral navigation have been
brought forward to which we can not subscribe and which our own
commanders have found it necessary to resist. From the friendly
disposition toward the United States constantly manifested by the
Emperor of Brazil, and the very useful and friendly commercial
intercourse between the United States and his dominions, we have reason
to believe that the just reparation demanded for the injuries sustained
by several of our citizens from some of his officers will not be
withheld. Abstracts from the recent dispatches of the commanders of our
several squadrons are communicated with the report of the Secretary of
the Navy to Congress.

A report from the Post Master General is likewise communicated,
presenting in a highly satisfactory manner the result of a vigorous,
efficient, and economical administration of that Department. The revenue
of the office, even of the year including the latter half of 1824 and
the first half of 1825, had exceeded its expenditures by a sum of more
than $45,000. That of the succeeding year has been still more
productive. The increase of the receipts in the year preceding the first
of July last over that of the year before exceeds $136,000, and the
excess of the receipts over the expenditures of the year has swollen
from $45,000 to yearly $80,000.

During the same period contracts for additional transportation of the
mail in stages for about 260,000 miles have been made, and for 70,000
miles annually on horse back. 714 new post offices have been established
within the year, and the increase of revenue within the last three
years, as well as the augmentation of the transportation by mail, is
more than equal to the whole amount of receipts and of mail conveyance
at the commencement of the present century, when the seat of the General
Government was removed to this place. When we reflect that the objects
effected by the transportation of the mail are among the choicest
comforts and enjoyments of social life, it is pleasing to observe that
the dissemination of them to every corner of our country has
out-stripped in their increase even the rapid march of our population.

By the treaties with France and Spain, respectively ceding Louisiana and
the Floridas to the United States, provision was made for the security
of land titles derived from the Governments of those nations. Some
progress has been made under the authority of various acts of Congress
in the ascertainment and establishment of those titles, but claims to a
very large extent remain unadjusted. The public faith no less than the
just rights of individuals and the interest of the community itself
appears to require further provision for the speedy settlement of those
claims, which I therefore recommend to the care and attention of the
Legislature.

In conformity with the provisions of the act of May 20th, 1825, to
provide for erecting a penitentiary in the District of Columbia, and for
other purposes, three commissioners were appointed to select a site for
the erection of a penitentiary for the District, and also a site in the
county of Alexandria for a county jail, both of which objects have been
effected. The building of the penitentiary has been commenced, and is in
such a degree of forwardness as to promise that it will be completed
before the meeting of the next Congress. This consideration points to
the expediency of maturing at the present session a system for the
regulation and government of the penitentiary, and of defining a system
for the regulation and government of the penitentiary, and of defining
the class of offenses which shall be punishable by confinement in this
edifice.

In closing this communication I trust that it will not be deemed
inappropriate to the occasion and purposes upon which we are here
assembled to indulge a momentary retrospect, combining in a single
glance the period of our origin as a national confederation with that of
our present existence, at the precise interval of half a century from
each other. Since your last meeting at this place the 50th anniversary
of the day when our independence was declared has been celebrated
throughout our land, and on that day, while every heart was bounding
with joy and every voice was tuned to gratulation, amid the blessings of
freedom and independence which the sires of a former age had handed down
to their children, two of the principal actors in that solemn scene--the
hand that penned the ever memorable Declaration and the voice that
sustained it in debate--were by one summons, at the distance of 700
miles from each other, called before the Judge of All to account for
their deeds done upon earth. They departed cheered by the benedictions
of their country, to whom they left the inheritance of their fame and
the memory of their bright example.

If we turn our thoughts to the condition of their country, in the
contrast of the first and last day of that half century, how resplendent
and sublime is the transition from gloom to glory! Then, glancing
through the same lapse of time, in the condition of the individuals we
see the first day marked with the fullness and vigor of youth, in the
pledge of their lives, their fortunes, and their sacred honor to the
cause of freedom and of man-kind; and on the last, extended on the bed
of death, with but sense and sensibility left to breathe a last
aspiration to Heaven of blessing upon their country, may we not humbly
hope that to them too it was a pledge of transition from gloom to glory,
and that while their mortal vestments were sinking into the clod of the
valley their emancipated spirits were ascending to the bosom of their
God!

JOHN QUINCY ADAMS

***

State of the Union Address
John Quincy Adams
December 4, 1827

Fellow Citizens of the Senate and of the House of Representatives:

A revolution of the seasons has nearly been completed since the
representatives of the people and States of this Union were last
assembled at this place to deliberate and to act upon the common
important interests of their constituents. In that interval the never
slumbering eye of a wise and beneficent Providence has continued its
guardian care over the welfare of our beloved country; the blessing of
health has continued generally to prevail throughout the land; the
blessing of peace with our brethren of the human race has been enjoyed
without interruption; internal quiet has left our fellow citizens in the
full enjoyment of all their rights and in the free exercise of all their
faculties, to pursue the impulse of their nature and the obligation of
their duty in the improvement of their own condition; the productions of
the soil, the exchanges of commerce, the vivifying labors of human
industry, have combined to mingle in our cup a portion of enjoyment as
large and liberal as the indulgence of Heaven has perhaps ever granted
to the imperfect state of man upon earth; and as the purest of human
felicity consists in its participation with others, it is no small
addition to the sum of our national happiness at this time that peace
and prosperity prevail to a degree seldom experienced over the whole
habitable globe, presenting, though as yet with painful exceptions, a
foretaste of that blessed period of promise when the lion shall lie down
with the lamb and wars shall be no more.

To preserve, to improve, and to perpetuate the sources and to direct in
their most effective channels the streams which contribute to the public
weal is the purpose for which Government was instituted. Objects of deep
importance to the welfare of the Union are constantly recurring to
demand the attention of the Federal Legislature, and they call with
accumulated interest at the first meeting of the two Houses after their
periodical renovation. To present to their consideration from time to
time subjects in which the interests of the nation are most deeply
involved, and for the regulation of which the legislative will is alone
competent, is a duty prescribed by the Constitution, to the performance
of which the first meeting of the new Congress is a period eminently
appropriate, and which it is now my purpose to discharge.

Our relations of friendship with the other nations of the earth,
political and commercial, have been preserved unimpaired, and the
opportunities to improve them have been cultivated with anxious and
unremitting attention. A negotiation upon subjects of high and delicate
interest with the Government of Great Britain has terminated in the
adjustment of some of the questions at issue upon satisfactory terms and
the postponement of others for future discussion and agreement.

The purposes of the convention concluded at St. Petersburg on July 12th,
1822, under the mediation of the late Emperor Alexander, have been
carried into effect by a subsequent convention, concluded at London on
November 13th, 1826, the ratifications of which were exchanged at that
place on February 6th, 1827. A copy of the proclamations issued on March
19th, 1827, publishing this convention, is herewith communicated to
Congress. The sum of $1,204,960, therein stipulated to be paid to the
claimants of indemnity under the first article of the treaty of Ghent,
has been duly received, and the commission instituted, conformably to
the act of Congress of March 2d, 1827, for the distribution of the
indemnity of the persons entitled to receive it are now in session and
approaching the consummation of their labors. This final disposal of one
of the most painful topics of collision between the United States and
Great Britain not only affords an occasion of gratulation to ourselves,
but has had the happiest effect in promoting a friendly disposition and
in softening asperities upon other objects of discussion; nor ought it
to pass without the tribute of a frank and cordial acknowledgment of the
magnanimity with which an honorable nation, by the reparation of their
own wrongs, achieves a triumph more glorious than any field of blood can
ever bestow.

The conventions of March 7th, 1815, and of October 20th, 1818, will
expire by their own limitation on October 20th, 1828. These have
regulated the direct commercial intercourse between the United States
and Great Britain upon terms of the most perfect reciprocity; and they
effected a temporary compromise of the respective rights and claims to
territory westward of the Rocky Mountains. These arrangements have been
continued for an indefinite period of time after the expiration of the
above mentioned conventions, leaving each party the liberty of
terminating them by giving twelve months' notice to the other.

The radical principle of all commercial intercourse between independent
nations is the mutual interest of both parties. It is the vital spirit
of trade itself; nor can it be reconciled to the nature of man or to the
primary laws of human society that any traffic should long be willingly
pursued of which all the advantages are on one side and all the burdens
on the other. Treaties of commerce have been found by experience to be
among the most effective instruments for promoting peace and harmony
between nations whose interests, exclusively considered on either side,
are brought into frequent collisions by competition. In framing such
treaties it is the duty of each party not simply to urge with unyielding
pertinacity that which suits its own interest, but to concede liberally
to that which is adapted to the interest of the other.

To accomplish this, little more is generally required than a simple
observance of the rule of reciprocity, and were it possible for the
states-men of one nation by stratagem and management to obtain from the
weakness or ignorance of another an over-reaching treaty, such a compact
would prove an incentive to war rather than a bond of peace.

Our conventions with Great Britain are founded upon the principles of
reciprocity. The commercial intercourse between the two countries is
greater in magnitude and amount than between any two other nations on
the globe. It is for all purposes of benefit or advantage to both as
precious, and in all probability far more extensive, than if the parties
were still constituent parts of one and the same nation. Treaties
between such States, regulating the intercourse of peace between them
and adjusting interests of such transcendent importance to both, which
have been found in a long experience of years mutually advantageous,
should not be lightly cancelled or discontinued. Two conventions for
continuing in force those above mentioned have been concluded between
the plenipotentiaries of the two Governments on August 6th, 1827, and
will be forthwith laid before the Senate for the exercise of their
constitutional authority concerning them.

In the execution of the treaties of peace of November, 1782 and
September, 1783, between the United States and Great Britain, and which
terminated the war of our independence, a line of boundary was drawn as
the demarcation of territory between the two countries, extending over
nearly 20 degrees of latitude, and ranging over seas, lakes, and
mountains, then very imperfectly explored and scarcely opened to the
geographical knowledge of the age. In the progress of discovery and
settlement by both parties since that time several questions of boundary
between their respective territories have arisen, which have been found
of exceedingly difficult adjustment.

At the close of the last war with Great Britain four of these questions
pressed themselves upon the consideration of the negotiators of the
treaty of Ghent, but without the means of concluding a definitive
arrangement concerning them. They were referred to three separate
commissions consisting, of two commissioners, one appointed by each
party, to examine and decide upon their respective claims. In the event
of a disagreement between the commissioners, one appointed by each
party, to examine and decide upon their respective claims. In the event
of a disagreement between the commissioners it was provided that they
should make reports to their several Governments, and that the reports
should finally be referred to the decision of a sovereign the common
friend of both.

Of these commissions two have already terminated their sessions and
investigations, one by entire and the other by partial agreement. The
commissioners of the 5th article of the treaty of Ghent have finally
disagreed, and made their conflicting reports to their own Governments.
But from these reports a great difficulty has occurred in making up a
question to be decided by the arbitrator. This purpose has, however,
been effected by a 4th convention, concluded at London by the
plenipotentiaries of the two Governments on September 29th, 1827. It
will be submitted, together with the others, to the consideration of the
Senate.

While these questions have been pending incidents have occurred of
conflicting pretensions and of dangerous character upon the territory
itself in dispute between the two nations. By a common understanding
between the Governments it was agreed that no exercise of exclusive
jurisdiction by either party while the negotiation was pending should
change the state of the question of right to be definitively settled.
Such collision has, never the less, recently taken place by occurrences
the precise character of which has not yet been ascertained. A
communication from the governor of the State of Maine, with accompanying
documents, and a correspondence between the Secretary of State and the
minister of Great Britain on this subject are now communicated. Measures
have been taken to ascertain the state of the facts more correctly by
the employment of a special agent to visit the spot where the alleged
outrages have occurred, the result of those inquiries, when received,
will be transmitted to Congress.

While so many of the subjects of high interest to the friendly relations
between the two countries have been so far adjusted, it is a matter of
regret that their views respecting the commercial intercourse between
the United States and the British colonial possessions have not equally
approximated to a friendly agreement.

At the commencement of the last session of Congress they were informed
of the sudden and unexpected exclusion by the British Government of
access in vessels of the United States to all their colonial ports
except those immediately bordering upon our own territories. In the
amicable discussions which have succeeded the adoption of this measure
which, as it affected harshly the interests of the United States, became
subject of expostulation on our part, the principles upon which its
justification has been placed have been of a diversified character. It
has been at once ascribed to a mere recurrence to the old, long
established principle of colonial monopoly and at the same time to a
feeling of resentment because the offers of an act of Parliament opening
the colonial ports upon certain conditions had not been grasped at with
sufficient eagerness by an instantaneous conformity to them.

At a subsequent period it has been intimated that the new exclusion was
in resentment because a prior act of Parliament, of 1822, opening
certain colonial ports, under heavy and burdensome restrictions, to
vessels of the United States, had not been reciprocated by an admission
of British vessels from the colonies, and their cargoes, without any
restriction or discrimination what ever. But be the motive for the
interdiction what it may, the British Government have manifested no
disposition, either by negotiation or by corresponding legislative
enactments, to recede from it, and we have been given distinctly to
understand that neither of the bills which were under the consideration
of Congress at their last session would have been deemed sufficient in
their concessions to have been rewarded by any relaxation from the
British interdict. It is one of the inconveniences inseparably connected
with the attempt to adjust by reciprocal legislation interests of this
nature that neither party can know what would be satisfactory to the
other, and that after enacting a statute for the avowed and sincere
purpose of conciliation it will generally be found utterly inadequate to
the expectation of the other party, and will terminate in mutual
disappointment.

The session of Congress having terminated without any act upon the
subject, a proclamation was issued on March 17, 1827, conformably to the
provisions of the 6th section of the act of March 3rd, 1823 declaring
the fact that the trade and intercourse authorized by the British act of
Parliament of June 24th, 1822, between the United States and the British
enumerated colonial ports had been by the subsequent acts of Parliament
of July 5th, 1825, and the order of council of July 27th, 1826
prohibited. The effect of this proclamation, by the terms of the act
under which it was issued, has been that each and every provision of the
act concerning navigation of April 18th, 1818, and of the act
supplementary thereto of May 15th, 1820, revived and is in full force.

Such, then is the present condition of the trade that, useful as it is
to both parties it can, with a single momentary exception, be carried on
directly by the vessels of neither. That exception itself is found in a
proclamation of the governor of the island of St. Christopher and of the
Virgin Islands, inviting for three months from August 28th, 1827 the
importation of the articles of the produce of the United States which
constitute their export portion of this trade in the vessels of all
nations.

That period having already expired, the state of mutual interdiction has
again taken place. The British Government have not only declined
negotiation upon this subject, but by the principle they have assumed
with reference to it have precluded even the means of negotiation. It
becomes not the self respect of the United States either to solicit
gratuitous favors or to accept as the grant of a favor that for which an
ample equivalent is exacted. It remains to be determined by the
respective Governments whether the trade shall be opened by acts of
reciprocal legislation. It is, in the mean time, satisfactory to know
that apart from the inconvenience resulting from a disturbance of the
usual channels of trade no loss has been sustained by the commerce, the
navigation, or the revenue of the United States, and none of magnitude
is to be apprehended from this existing state of mutual interdict.

With the other maritime and commercial nations of Europe our intercourse
continues with little variation. Since the cessation by the convention
of June 24th, 1822, of all discriminating duties upon the vessels of the
United States and of France in either country our trade with that nation
has increased and is increasing. A disposition on the part of France has
been manifested to renew that negotiation, and in acceding to the
proposal we have expressed the wish that it might be extended to other
subjects upon which a good understanding between the parties would be
beneficial to the interests of both.

The origin of the political relations between the United States and
France is coeval with the first years of our independence. The memory of
it is interwoven with that of our arduous struggle for national
existence. Weakened as it has occasionally been since that time, it can
by us never be forgotten, and we should hail with exultation the moment
which should indicate a recollection equally friendly in spirit on the
part of France.

A fresh effort has recently been made by the minister of the United
States residing at Paris to obtain a consideration of the just claims of
citizens of the United States to the reparation of wrongs long since
committed, many of them frankly acknowledged and all of them entitled
upon every principle of justice to a candid examination. The proposal
last made to the French Government has been to refer the subject which
has formed an obstacle to this consideration to the determination of a
sovereign the common friend of both. To this offer no definitive answer
has yet been received, but the gallant and honorable spirit which has at
all times been the pride and glory of France will not ultimately permit
the demands of innocent sufferers to be extinguished in the mere
consciousness of the power to reject them.

A new treaty of amity, navigation, and commerce has been concluded with
the Kingdom of Sweden, which will be submitted to the Senate for their
advice with regard to its ratification. At a more recent date a minister
plenipotentiary from the Hanseatic Republics of Hamburg, Lubeck, and
Bremen has been received, charged with a special mission for the
negotiation of a treaty of amity and commerce between that ancient and
renowned league and the United States. This negotiation has accordingly
been commenced, and is now in progress, the result of which will, if
successful, be also submitted to the Senate for their consideration.

Since the accession of the Emperor Nicholas to the imperial throne of
all the Russias the friendly dispositions toward the United States so
constantly manifested by his predecessor have continued unabated, and
have been recently testified by the appointment of a minister
plenipotentiary to reside at this place. From the interest taken by this
Sovereign in behalf of the suffering Greeks and from the spirit with
which others of the great European powers are cooperating with him the
friends of freedom and of humanity may indulge the hope that they will
obtain relief from that most unequal of conflicts which they have so
long and so gallantly sustained; that they will enjoy the blessing of
self government, which by their sufferings in the cause of liberty they
have richly earned, and that their independence will be secured by those
liberal institutions of which their country furnished the earliest
examples in the history of man-kind, and which have consecrated to
immortal remembrance the very soil for which they are now again
profusely pouring forth their blood. The sympathies which the people and
Government of the United States have so warmly indulged with their cause
have been acknowledged by their Government in a letter of thanks, which
I have received from their illustrious President, a translation of which
is now communicated to Congress, the representatives of that nation to
whom this tribute of gratitude was intended to be paid, and to whom it
was justly due.

In the American hemisphere the cause of freedom and independence has
continued to prevail, and if signalized by none of those splendid
triumphs which had crowned with glory some of the preceding years it has
only been from the banishment of all external force against which the
struggle had been maintained. The shout of victory has been superseded
by the expulsion of the enemy over whom it could have been achieved.

Our friendly wishes and cordial good will, which have constantly
followed the southern nations of America in all the vicissitudes of
their war of independence, are succeeded by a solicitude equally ardent
and cordial that by the wisdom and purity of their institutions they may
secure to themselves the choicest blessings of social order and the best
rewards of virtuous liberty. Disclaiming alike all right and all
intention of interfering in those concerns which it is the prerogative
of their independence to regulate as to them shall seem fit, we hail
with joy every indication of their prosperity, of their harmony, of
their persevering and inflexible homage to those principles of freedom
and of equal rights which are alone suited to the genius and temper of
the American nations.

It has been, therefore, with some concern that we have observed
indications of intestine divisions in some of the Republics of the
south, and appearances of less union with one another than we believe to
be the interest of all. Among the results of this state of things has
been that the treaties concluded at Panama do not appear to have been
ratified by the contracting parties, and that the meeting of the
congress at Tacubaya has been indefinitely postponed. In accepting the
invitations to be represented at this congress, while a manifestation
was intended on the part of the United States of the most friendly
disposition toward the southern Republics by whom it had been proposed,
it was hoped that it would furnish an opportunity for bringing all the
nations of this hemisphere to the common acknowledgment and adoption of
the principles in the regulation of their internal relations which would
have secured a lasting peace and harmony between them and have promoted
the cause of mutual benevolence throughout the globe. But as obstacles
appear to have arisen to the reassembling of the congress, one of the
two ministers commissioned on the part of the United States has returned
to the bosom of his country, while the minister charged with the
ordinary mission to Mexico remains authorized to attend the conferences
of the congress when ever they may be resumed.

A hope was for a short time entertained that a treaty of peace actually
signed between the Government of Buenos Ayres and of Brazil would
supersede all further occasion for those collisions between belligerent
pretensions and neutral rights which are so commonly the result of
maritime war, and which have unfortunately disturbed the harmony of the
relations between the United States and the Brazilian Governments. At
their last session Congress were informed that some of the naval
officers of that Empire had advanced and practiced upon principles in
relation to blockades and to neutral navigation which we could not
sanction, and which our commanders found it necessary to resist. It
appears that they have not been sustained by the Government of Brazil
itself. Some of the vessels captured under the assumed authority of
these erroneous principles have been restored, and we trust that our
just expectations will be realized that adequate indemnity will be made
to all the citizens of the United States who have suffered by the
unwarranted captures which the Brazilian tribunals themselves have
pronounced unlawful.

In the diplomatic discussions at Rio de Janeiro of these wrongs
sustained by citizens of the United States and of others which seemed as
if emanating immediately from that Government itself the charge
d'affaires of the United States, under an impression that his
representations in behalf of the rights and interests of his country-
men were totally disregarded and useless, deemed it his duty, without
waiting for instructions, to terminate his official functions, to demand
his pass-ports, and return to the United States. This movement, dictated
by an honest zeal for the honor and interests of his country-- motives
which operated exclusively on the mind of the officer who resorted to
it--has not been disapproved by me.

The Brazilian Government, however, complained of it as a measure for
which no adequate intentional cause had been given by them, and upon an
explicit assurance through their charge d'affaires residing here that a
successor to the late representative of the United States near that
Government, the appointment of whom they desired, should be received and
treated with the respect due to his character, and that indemnity should
be promptly made for all injuries inflicted on citizens of the United
States or their property contrary to the laws of nations, a temporary
commission as charge d'affaires to that country has been issued, which
it is hopes will entirely restore the ordinary diplomatic intercourse
between the two Governments and the friendly relations between their
respective nations.

Turning from the momentous concerns of our Union in its intercourse with
foreign nations to those of the deepest interest in the administration
of our internal affairs, we find the revenues of the present year
corresponding as nearly as might be expected with the anticipations of
the last, and presenting an aspect still more favorable in the promise
of the next.

The balance in the Treasury on January 1st, 1827 was $6,358,686.18. The
receipts from that day to September 30th, 1827, as near as the returns
of them yet received can show, amount to $16,886,581.32. The receipts of
the present quarter, estimated at $4,515,000, added to the above form an
aggregate of $21,400,000 of receipts.

The expenditures of the year may perhaps amount to $22,300,000
presenting a small excess over the receipts. But of these $22,000,000,
upward of $6,000,000 have been applied to the discharge of the principal
of the public debt, the whole amount of which, approaching $74,000,000
on January 1st, 1827, will on January 1st, 1828 fall short of
$67,500,000. The balance in the Treasury on January 1st, 1828 it is
expected will exceed $5,450,000, a sum exceeding that of January 1st,
1825, though falling short of that exhibited on January 1st, 1827.

It was foreseen that the revenue of the present year 1827 would not
equal that of the last, which had itself been less than that of the next
preceding year. But the hope has been realized which was entertained,
that these deficiencies would in no wise interrupt the steady operation
of the discharge of the public debt by the annual $10,000,000 devoted to
that object by the act of March 3d, 1817.

The amount of duties secured on merchandise imported from the
commencement of the year until September 30th, 1827 is $21,226,000, and
the probably amount of that which will be secured during the remainder
of the year is $5,774,000, forming a sum total of $27,000,000. With the
allowances for draw-backs and contingent deficiencies which may occur,
though not specifically foreseen, we may safely estimate the receipts of
the ensuing year at $22,300,000--a revenue for the next equal to the
expenditure of the present year.

The deep solicitude felt by our citizens of all classes throughout the
Union for the total discharge of the public debt will apologize for the
earnestness with which I deem it my duty to urge this topic upon the
consideration of Congress--of recommending to them again the observance
of the strictest economy in the application of the public funds. The
depression upon the receipts of the revenue which had commenced with the
year 1826 continued with increased severity during the two first
quarters of the present year.

The returning tide began to flow with the third quarter, and, so far as
we can judge from experience, may be expected to continue through the
course of the ensuing year. In the mean time an alleviation from the
burden of the public debt will in the three years have been effected to
the amount of nearly $16,000,000, and the charge of annual interest will
have been reduced upward of $1,000,000. But among the maxims of
political economy which the stewards of the public moneys should never
suffer without urgent necessity to be transcended is that of keeping the
expenditures of the year within the limits of its receipts.

The appropriations of the two last years, including the yearly
$10,000,000 of the sinking fund, have each equaled the promised revenue
of the ensuing year. While we foresee with confidence that the public
coffers will be replenished from the receipts as fast as they will be
drained by the expenditures, equal in amount to those of the current
year, it should not be forgotten that they could ill suffer the
exhaustion of larger disbursements.

The condition of the Army and of all the branches of the public service
under the superintendence of the Secretary of War will be seen by the
report from that officer and the documents with which it is accompanied.

During the last summer a detachment of the Army has been usefully and
successfully called to perform their appropriate duties. At the moment
when the commissioners appointed for carrying into execution certain
provisions of the treaty of August 19th, 1825, with various tribes of
the North Western Indians were about to arrive at the appointed place of
meeting the unprovoked murder of several citizens and other acts of
unequivocal hostility committed by a party of the Winnebago tribe, one
of those associated in the treaty, followed by indications of a menacing
character among other tribes of the same region, rendered necessary an
immediate display of the defensive and protective force of the Union in
that quarter.

It was accordingly exhibited by the immediate and concerted movements of
the governors of the State of Illinois and of the Territory of Michigan,
and competent levies of militia, under their authority, with a corps of
700 men of United States troops, under the command of General Atkinson,
who, at the call of Governor Cass, immediately repaired to the scene of
danger from their station at St. Louis. Their presence dispelled the
alarms of our fellow citizens on those disorders, and overawed the
hostile purposes of the Indians. The perpetrators of the murders were
surrendered to the authority and operation of our laws, and every
appearance of purposed hostility from those Indian tribes has subsided.

Although the present organization of the Army and the administration of
its various branches of service are, upon the whole, satisfactory, they
are yet susceptible of much improvement in particulars, some of which
have been heretofore submitted to the consideration of Congress, and
others are now first presented in the report of the Secretary of War.

The expediency of providing for additional numbers of officers in the
two corps of engineers will in some degree depend upon the number and
extent of the objects of national importance upon which Congress may
think it proper that surveys should be made conformably to the act of
April 30th, 1824. Of the surveys which before the last session of
Congress had been made under the authority of that act, reports were
made--Of the Board of Internal Improvement, on the Chesapeake and Ohio
Canal. On the continuation of the national road from Cumberland to the
tide waters within the District of Columbia. On the continuation of the
national road from Canton to Zanesville. On the location of the national
road from Zanesville to Columbus. On the continuation of the same to the
seat of government in Missouri. On a post road from Baltimore to
Philadelphia. Of a survey of Kennebec River (in part). On a national
road from Washington to Buffalo. On the survey of Saugatuck Harbor and
River. On a canal from Lake Pont Chartrain to the Mississippi River. On
surveys at Edgartown, Newburyport, and Hyannis Harbor. On survey of La
Plaisance Bay, in the Territory of Michigan. And reports are now
prepared and will be submitted to Congress--On surveys of the peninsula
of Florida, to ascertain the practicability of a canal to connect the
waters of the Atlantic with the Gulf of Mexico across that peninsula;
and also of the country between the bays of Mobile and of Pensacola,
with the view of connecting them together by a canal. On surveys of a
route for a canal to connect the waters of James and Great Kenhawa
rivers. On the survey of the Swash, in Pamlico Sound, and that of Cape
Fear, below the town of Wilmington, in North Carolina. On the survey of
the Muscle Shoals, in the Tennessee River, and for a route for a
contemplated communication between the Hiwassee and Coosa rivers, in the
State of Alabama. Other reports of surveys upon objects pointed out by
the several acts of Congress of the last and preceding sessions are in
the progress of preparation, and most of them may be completed before
the close of this session. All the officers of both corps of engineers,
with several other persons duly qualified, have been constantly employed
upon these services from the passage of the act of April 30th, 1824, to
this time.

Were no other advantage to accrue to the country from their labors than
the fund of topographical knowledge which they have collected and
communicated, that alone would have been a profit to the Union more than
adequate to all the expenditures which have been devoted to the object;
but the appropriations for the repair and continuation of the Cumberland
road, for the construction of various other roads, for the removal of
obstructions from the rivers and harbors, for the erection of light
houses, beacons, piers, and buoys, and for the completion of canals
undertaken by individual associations, but needing the assistance of
means and resources more comprehensive than individual enterprise can
command, may be considered rather as treasures laid up from the
contributions of the present age for the benefit of posterity than as
unrequited applications of the accruing revenues of the nation.

To such objects of permanent improvement to the condition of the
country, of real addition to the wealth as well as to the comfort of the
people by whose authority and resources they have been effected, from
$3,000,000 to $4,000,000 of the annual income of the nation have, by
laws enacted at the three most recent sessions of Congress, been
applied, without intrenching upon the necessities of the Treasury,
without adding a dollar to the taxes or debts of the community, without
suspending even the steady and regular discharge of the debts contracted
in former days, which within the same three years have been diminished
by the amount of nearly $16,000,000.

The same observations are in a great degree applicable to the
appropriations made for fortifications upon the coasts and harbors of
the United States, for the maintenance of the Military Academy at West
Point, and for the various objects under the superintendence of the
Department of the Navy. The report from the Secretary of the Navy and
those from the subordinate branches of both the military departments
exhibit to Congress in minute detail the present condition of the public
establishments dependent upon them, the execution of the acts of
Congress relating to them, and the views of the officers engaged in the
several branches of the service concerning the improvements which may
tend to their perfection.

The fortification of the coasts and the gradual increase and improvement
of the Navy are parts of a great system of national defense which has
been upward of ten years in progress, and which for a series of years to
come will continue to claim the constant and persevering protection and
superintendence of the legislative authority. Among the measures which
have emanated from these principles the act of the last session of
Congress for the gradual improvement of the Navy holds a conspicuous
place. The collection of timber for the future construction of vessels
of war, the preservation and reproduction of the species of timber
peculiarly adapted to that purpose, the construction of dry docks for
the use of the Navy, the erection of a marine railway for the repair of
the public ships, and the improvement of the navy yards for the
preservation of the public property deposited in them have all received
from the Executive the attention required by that act, and will continue
to receive it, steadily proceeding toward the execution of all its
purposes.

The establishment of a naval academy, furnishing the means of theoretic
instruction to the youths who devote their lives to the service of their
country upon the ocean, still solicits the sanction of the Legislature.
Practical seamanship and the art of navigation may be acquired on the
cruises of the squadrons which from time to time are dispatched to
distant seas, but a competent knowledge even of the art of ship
building, the higher mathematics, and astronomy; the literature which
can place our officers on a level of polished education with the
officers of other maritime nations; the knowledge of the laws, municipal
and national, which in their intercourse with foreign states and their
governments are continually called into operation, and, above all, that
acquaintance with the principles of honor and justice, with the higher
obligations of morals and of general laws, human and divine, which
constitutes the great distinction between the warrior-patriot and the
licensed robber and pirate--these can be systematically taught and
eminently acquired only in a permanent school, stationed upon the shore
and provided with the teachers, the instruments, and the books
conversant with and adapted to the communication of the principles of
these respective sciences to the youthful and inquiring mind.

The report from the Post Master General exhibits the condition of that
Department as highly satisfactory for the present and still more
promising for the future. Its receipts for the year ending July 1st,
1827 amounted to $1,473,551, and exceeded its expenditures by upward of
$100,000. It can not be an over sanguine estimate to predict that in
less than ten years, of which half have elapsed, the receipts will have
been more than doubled.

In the mean time a reduced expenditure upon established routes has kept
pace with increased facilities of public accommodation and additional
services have been obtained at reduced rates of compensation. Within the
last year the transportation of the mail in stages has been greatly
augmented. The number of post offices has been increased to 7,000, and
it may be anticipated that while the facilities of intercourse between
fellow citizens in person or by correspondence will soon be carried to
the door of every villager in the Union, a yearly surplus of revenue
will accrue which may be applied as the wisdom of Congress under the
exercise of their constitutional powers may devise for the further
establishment and improvement of the public roads, or by adding still
further to the facilities in the transportation of the mails. Of the
indications of the prosperous condition of our country, none can be more
pleasing than those presented by the multiplying relations of personal
and intimate intercourse between the citizens of the Union dwelling at
the remotest distances from each other.

Among the subjects which have heretofore occupied the earnest solicitude
and attention of Congress is the management and disposal of that portion
of the property of the nation which consists of the public lands. The
acquisition of them, made at the expense of the whole Union, not only in
treasury but in blood, marks a right of property in them equally
extensive. By the report and statements from the General Land Office now
communicated it appears that under the present Government of the United
States a sum little short of $33,000,000 has been paid from the common
Treasury for that portion of this property which has been purchased from
France and Spain, and for the extinction of the aboriginal titles. The
amount of lands acquired is near 260,000,000 acres, of which on January
1st, 1826, about 139,000,000 acres had been surveyed, and little more
than 19,000,000 acres had been sold. The amount paid into the Treasury
by the purchasers of the public lands sold is not yet equal to the sums
paid for the whole, but leaves a small balance to be refunded. The
proceeds of the sales of the lands have long been pledged to the
creditors of the nation, a pledge from which we have reason to hope that
they will in a very few years be redeemed.

The system upon which this great national interest has been managed was
the result of long, anxious, and persevering deliberation. Matured and
modified by the progress of our population and the lessons of
experience, it has been hitherto eminently successful. More than nine
tenths of the lands still remain the common property of the Union, the
appropriation and disposal of which are sacred trusts in the hands of
Congress.

Of the lands sold, a considerable part were conveyed under extended
credits, which in the vicissitudes and fluctuations in the value of
lands and of their produce became oppressively burdensome to the
purchasers. It can never be the interest or the policy of the nation to
wring from its own citizens the reasonable profits of their industry and
enterprise by holding them to the rigorous import of disastrous
engagements. In March, 1821, a debt of $22,000,000, due by purchasers of
the public lands, had accumulated, which they were unable to pay. An act
of Congress of March 2nd, 1821, came to their relief, and has been
succeeded by others, the latest being the act of May 4th, 1826, the
indulgent provisions of which expired on July 4th, 1827. The effect of
these laws has been to reduce the debt from the purchasers to a
remaining balance of about $4,300,000 due, more than three fifths of
which are for lands within the State of Alabama. I recommend to Congress
the revival and continuance for a further term of the beneficent
accommodations to the public debtors of that statute, and submit to
their consideration, in the same spirit of equity, the remission, under
proper discriminations, of the forfeitures of partial payments on
account of purchases of the public lands, so far as to allow of their
application to other payments.

There are various other subjects of deep interest to the whole Union
which have heretofore been recommended to the consideration of Congress,
as well by my predecessors as, under the impression of the duties
devolving upon me, by myself. Among these are the debt, rather of
justice than gratitude, to the surviving warriors of the Revolutionary
war; the extension of the judicial administration of the Federal
Government to those extensive since the organization of the present
judiciary establishment, now constitute at least one third of its
territory, power, and population; the formation of a more effective and
uniform system for the government of the militia, and the amelioration
in some form or modification of the diversified and often oppressive
codes relating to insolvency. Amidst the multiplicity of topics of great
national concernment which may recommend themselves to the calm and
patriotic deliberations of the Legislature, it may suffice to say that
on these and all other measures which may receive their sanction my
hearty cooperation will be given, conformably to the duties enjoined
upon me and under the sense of all the obligations prescribed by the
Constitution.

JOHN QUINCY ADAMS

***

State of the Union Address
John Quincy Adams
December 2, 1828

Fellow Citizens of the Senate and of the House of Representatives:

If the enjoyment in profusion of the bounties of Providence forms a
suitable subject of mutual gratulation and grateful acknowledgment, we
are admonished at this return of the season when the representatives of
the nation are assembled to deliberate upon their concerns to offer up
the tribute of fervent and grateful hearts for the never failing mercies
of Him who ruleth over all. He has again favored us with healthful
seasons and abundant harvests; He has sustained us in peace with foreign
countries and in tranquillity within our borders; He has preserved us in
the quiet and undisturbed possession of civil and religious liberty; He
has crowned the year with His goodness, imposing on us no other
condition than of improving for our own happiness the blessings bestowed
by His hands, and, in the fruition of all His favors, of devoting his
faculties with which we have been endowed by Him to His glory and to our
own temporal and eternal welfare.

In the relations of our Federal Union with our brethren of the human
race the changes which have occurred since the close of your last
session have generally tended to the preservation of peace and to the
cultivation of harmony. Before your last separation a war had unhappily
been kindled between the Empire of Russia, one of those with which our
intercourse has been no other than a constant exchange of good offices,
and that of the Ottoman Porte, a nation from which geographical
distance, religious opinions and maxims of government on their part
little suited to the formation of those bonds of mutual benevolence
which result from the benefits of commerce had department us in a state,
perhaps too much prolonged, of coldness and alienation.

The extensive, fertile, and populous dominions of the Sultan belong
rather to the Asiatic than the European division of the human family.
They enter but partially into the system of Europe, nor have their wars
with Russia and Austria, the European States upon which they border, for
more than a century past disturbed the pacific relations of those States
with the other great powers of Europe. Neither France nor Prussia nor
Great Britain has ever taken part in them, nor is it to be expected that
they will at this time. The declaration of war by Russia has received
the approbation or acquiescence of her allies, and we may indulge the
hope that its progress and termination will be signalized by the
moderation and forbearance no less than by the energy of the Emperor
Nicholas, and that it will afford the opportunity for such collateral
agency in behalf of the suffering Greeks as will secure to them
ultimately the triumph of humanity and of freedom.

The state of our particular relations with France has scarcely varied in
the course of the present year. The commercial intercourse between the
two countries has continued to increase for the mutual benefit of both.
The claims of indemnity to numbers of our fellow citizens for
depredations upon their property, heretofore committed during the
revolutionary governments, remain unadjusted, and still form the subject
of earnest representation and remonstrance. Recent advices from the
minister of the United States at Paris encourage the expectation that
the appeal to the justice of the French Government will ere long receive
a favorable consideration.

The last friendly expedient has been resorted to for the decision of the
controversy with Great Britain relating to the north-eastern boundary of
the United States. By an agreement with the British Government, carrying
into effect the provisions of the 5th article of the treaty of Ghent,
and the convention of September 29th, 1827, His Majesty the King of the
Netherlands has by common consent been selected as the umpire between
the parties. The proposal to him to accept the designation for the
performance of this friendly office will be made at an early day, and
the United States, relying upon the justice of their cause, will
cheerfully commit the arbitrament of it to a prince equally
distinguished for the independence of his spirit, his indefatigable
assiduity to the duties of his station, and his inflexible personal
probity.

Our commercial relations with Great Britain will deserve the serious
consideration of Congress and the exercise of a conciliatory and
forbearing spirit in the policy of both Governments. The state of them
has been materially changed by the act of Congress, passed at their last
session, in alteration of several acts imposing duties on imports, and
by acts of more recent date of the British Parliament. The effect of the
interdiction of direct trade, commenced by Great Britain and
reciprocated by the United States, has been, as was to be foreseen, only
to substitute different channels for an exchange of commodities
indispensable to the colonies and profitable to a numerous class of our
fellow citizens. The exports, the revenue, the navigation of the United
States have suffered no diminution by our exclusion from direct access
to the British colonies. The colonies pay more dearly for the
necessaries of life which their Government burdens with the charges of
double voyages, freight, insurance, and commission, and the profits of
our exports are somewhat impaired and more injuriously transferred from
one portion of our citizens to another.

The resumption of this old and otherwise exploded system of colonial
exclusion has not secured to the shipping interest of Great Britain the
relief which, at the expense of the distant colonies and of the United
States, it was expected to afford. Other measures have been resorted to
more pointedly bearing upon the navigation of the United States, and
more pointedly bearing upon the navigation of the United States, and
which, unless modified by the construction given to the recent acts of
Parliament, will be manifestly incompatible with the positive
stipulations of the commercial convention existing between the two
countries. That convention, however, may be terminated with 12 months'
notice, at the option of either party.

A treaty of amity, navigation, and commerce between the United States
and His Majesty the Emperor of Austria, King of Hungary and Bohemia, has
been prepared for signature by the Secretary of State and by the Baron
de Lederer, intrusted with full powers of the Austrian Government.
Independently of the new and friendly relations which may be thus
commenced with one of the most eminent and powerful nations of the
earth, the occasion has been taken in it, as in other recent treaties
concluded by the United States, to extend those principles of liberal
intercourse and of fair reciprocity which intertwine with the exchanges
of commerce the principles of justice and the feelings of mutual
benevolence.

This system, first proclaimed to the world in the first commercial
treaty ever concluded by the United States--that of February 6th, 1778,
with France--has been invariably the cherished policy of our Union. It
is by treaties of commerce alone that it can be made ultimately to
prevail as the established system of all civilized nations. With this
principle our fathers extended the hand of friendship to every nation of
the globe, and to this policy our country has ever since adhered. What
ever of regulation in our laws has ever been adopted unfavorable to the
interest of any foreign nation has been essentially defensive and
counteracting to similar regulations of theirs operating against us.

Immediately after the close of the War of Independence commissioners
were appointed by the Congress of the Confederation authorized to
conclude treaties with every nation of Europe disposed to adopt them.
Before the wars of the French Revolution such treaties had been
consummated with the United Netherlands, Sweden, and Prussia. During
those wars treaties with Great Britain and Spain had been effected, and
those with Prussia and France renewed. In all these some concessions to
the liberal principles of intercourse proposed by the United States had
been obtained; but as in all the negotiations they came occasionally in
collision with previous internal regulations or exclusive and excluding
compacts of monopoly with which the other parties had been trammeled,
the advances made in them toward the freedom of trade were partial and
imperfect. Colonial establishments, chartered companies, and ship
building influence pervaded and encumbered the legislation of all the
great commercial states; and the United States, in offering free trade
and equal privilege to all, were compelled to acquiesce in many
exceptions with each of the parties to their treaties, accommodated to
their existing laws and anterior agreements.

The colonial system by which this whole hemisphere was bound has fallen
into ruins, totally abolished by revolutions converting colonies into
independent nations throughout the two American continents, excepting a
portion of territory chiefly at the northern extremity of our own, and
confined to the remnants of dominion retained by Great Britain over the
insular archipelago, geographically the appendages of our part of the
globe. With all the rest we have free trade, even with the insular
colonies of all the European nations, except Great Britain. Her
Government also had manifested approaches to the adoption of a free and
liberal intercourse between her colonies and other nations, though by a
sudden and scarcely explained revulsion the spirit of exclusion has been
revived for operation upon the United States alone.

The conclusion of our last treaty of peace with Great Britain was
shortly afterwards followed by a commercial convention, placing the
direct intercourse between the two countries upon a footing of more
equal reciprocity than had ever before been admitted. The same principle
has since been much further extended by treaties with France, Sweden,
Denmark, the Hanseatic cities, Prussia, in Europe, and with the
Republics of Colombia and of Central America, in this hemisphere. The
mutual abolition of discriminating duties and charges upon the
navigation and commercial intercourse between the parties is the general
maxim which characterizes them all. There is reason to expect that it
will at no distant period be adopted by other nations, both of Europe
and America, and to hope that by its universal prevalence one of the
fruitful sources of wars of commercial competition will be extinguished.

Among the nations upon whose Governments many of our fellow citizens
have had long-pending claims of indemnity for depredations upon their
property during a period when the rights of neutral commerce were
disregarded was that of Denmark. They were soon after the events
occurred the subject of a special mission from the United States, at the
close of which the assurance was given by His Danish Majesty that at a
period of more tranquillity and of less distress they would be
considered, examined, and decided upon in a spirit of determined purpose
for the dispensation of justice. I have much pleasure in informing
Congress that the fulfillment of this honorable promise is now in
progress; that a small portion of the claims has already been settled to
the satisfaction of the claimants, and that we have reason to hope that
the remainder will shortly be placed in a train of equitable adjustment.
This result has always been confidently expected, from the character of
personal integrity and of benevolence which the Sovereign of the Danish
dominions has through every vicissitude of fortune maintained.

The general aspect of the affairs of our neighboring American nations of
the south has been rather of approaching than of settled tranquillity.
Internal disturbances have been more frequent among them than their
common friends would have desired. Our intercourse with all has
continued to be that of friendship and of mutual good will. Treaties of
commerce and of boundaries with the United Mexican States have been
negotiated, but, from various successive obstacles, not yet brought to a
final conclusion.

The civil war which unfortunately still prevails in the Republics of
Central America has been unpropitious to the cultivation of our
commercial relations with them; and the dissensions and revolutionary
changes in the Republics of Colombia and of Peru have been seen with
cordial regret by us, who would gladly contribute to the happiness of
both. It is with great satisfaction, however, that we have witnessed the
recent conclusion of a peace between the Governments of Buenos Ayres and
of Brazil, and it is equally gratifying to observe that indemnity has
been obtained for some of the injuries which our fellow citizens had
sustained in the latter of those countries. The rest are in a train of
negotiation, which we hope may terminate to mutual satisfaction, and
that it may be succeeded by a treaty of commerce and navigation, upon
liberal principles, propitious to a great and growing commerce, already
important to the interests of our country.

The condition and prospects of the revenue are more favorable than our
most sanguine expectations had anticipated. The balance in the Treasury
on January 1st, 1828, exclusive of the moneys received under the
convention of November 13th, 1826, with Great Britain, was
$5,861,972.83. The receipts into the Treasury from January 1st, 1828 to
September 30th, 1828, so far as they have been ascertained to form the
basis of an estimate, amount to $18,633,580.27, which, with the receipts
of the present quarter, estimated at $5,461,283.40, form an aggregate of
receipts during the year of $24,094,863.67. The expenditures of the year
may probably amount to $25,637,111.63, and leave in the Treasury on
January 1st, 1829 the sum of $5,125,638.14.

The receipts of the present year have amounted to near $2,000,000 more
than was anticipated at the commencement of the last session of
Congress.

The amount of duties secured on importations from the first of January
to the 30th of September was about $22,997,000, and that of the
estimated accruing revenue is $5,000,000, forming an aggregate for the
year of near $28,000,000. This is $1,000,000 more than the estimate last
December for the accruing revenue of the present year, which, with
allowances for draw-backs and contingent deficiencies, was expected to
produce an actual revenue of $22,300,000. Had these only been realized
the expenditures of the year would have been also proportionally
reduced, for of these $24,000,000 received upward of $9,000,000 have
been applied to the extinction of public debt, bearing an interest of 6%
a year, and of course reducing the burden of interest annually payable
in future by the amount of more than $500,000. The payments on account
of interest during the current year exceed $3,000,000, presenting an
aggregate of more than $12,000,000 applied during the year to the
discharge of the public debt, the whole of which remaining due on
January 1st, 1829 will amount only to $58,362,135.78.

That the revenue of the ensuing year will not fall short of that
received in the one now expiring there are indications which can
scarcely prove deceptive. In our country an uniform experience of 40
years has shown that what ever the tariff of duties upon articles
imported from abroad has been, the amount of importations has always
borne an average value nearly approaching to that of the exports, though
occasionally differing in the balance, some times being more and some
times less. It is, indeed, a general law of prosperous commerce that the
real value of exports should by a small, and only a small, balance
exceed that of imports, that balance being a permanent addition to the
wealth of the nation.

The extent of the prosperous commerce of the nation must be regulated by
the amount of its exports, and an important addition to the value of
these will draw after it a corresponding increase of importations. It
has happened in the vicissitudes of the seasons that the harvests of all
Europe have in the late summer and autumn fallen short of their usual
average. A relaxation of the interdict upon the importation of grain and
flour from abroad has ensued, a propitious market has been opened to the
granaries of our country, and a new prospect of reward presented to the
labors of the husband-man, which for several years has been denied. This
accession to the profits of agriculture in the middle and western
portions of our Union is accidental and temporary. It may continue only
for a single year. It may be, as has been often experienced in the
revolutions of time, but the first of several scanty harvests in
succession. We may consider it certain that for the approaching year it
has added an item of large amount to the value of our exports and that
it will produce a corresponding increase of importations. It may
therefore confidently be foreseen that the revenue of 1829 will equal
and probably exceed that of 1828, and will afford the means of
extinguishing $10,000,000 more of the principal of the public debt.

This new element of prosperity to that part of our agricultural industry
which is occupied in producing the first article of human subsistence is
of the most cheering character to the feelings of patriotism. Proceeding
from a cause which humanity will view with concern, the sufferings of
scarcity in distant lands, it yields a consolatory reflection that this
scarcity is in no respect attributable to us; that it comes from the
dispensation of Him who ordains all in wisdom and goodness, and who
permits evil itself only as an instrument of good; that, far from
contributing to this scarcity, our agency will be applied only to the
alleviation of its severity, and that in pouring forth from the
abundance of our own garners the supplies which will partially restore
plenty to those who are in need we shall ourselves reduce our stores and
add to the price of our own bread, so as in some degree to participate
in the wants which it will be the good fortune of our country to
relieve.

The great interests of an agricultural, commercial, and manufacturing
nation are so linked in union together that no permanent cause of
prosperity to one of them can operate without extending its influence to
the others. All these interests are alike under the protecting power of
the legislative authority, and the duties of the representative bodies
are to conciliate them in harmony together.

So far as the object of taxation is to raise a revenue for discharging
the debts and defraying the expenses of the community, its operation
should be adapted as much as possible to suit the burden with equal hand
upon all in proportion with their ability of bearing it without
oppression. But the legislation of one nation is some times
intentionally made to bear heavily upon the interests of another. That
legislation, adapted, as it is meant to be, to the special interests of
its own people, will often press most unequally upon the several
component interests of its neighbors.

Thus the legislation of Great Britain, when, as has recently been
avowed, adapted to the depression of a rival nation, will naturally
abound with regulations to interdict upon the productions of the soil or
industry of the other which come in competition with its own, and will
present encouragement, perhaps even bounty, to the raw material of the
other State which it can not produce itself, and which is essential for
the use of its manufactures, competitors in the markets of the world
with those of its commercial rival.

Such is the state of commercial legislation of Great Britain as it bears
upon our interests. It excludes with interdicting duties all importation
(except in time of approaching famine) of the great staple of production
of our Middle and Western States; it proscribes with equal rigor the
bulkier lumber and live stock of the same portion and also of the
Northern and Eastern part of our Union. It refuses even the rice of the
South unless aggravated with a charge of duty upon the Northern carrier
who brings it to them. But the cotton, indispensable for their looms,
they will receive almost duty free to weave it into a fabric for our own
wear, to the destruction of our own manufactures, which they are enabled
thus to under-sell.

Is the self-protecting energy of this nation so helpless that there
exists in the political institutions of our country no power to
counter-act the bias of this foreign legislation; that the growers of
grain must submit to this exclusion from the foreign markets of their
produce; that the shippers must dismantle their ships, the trade of the
North stagnate at the wharves, and the manufacturers starve at their
looms, while the whole people shall pay tribute to foreign industry to
be clad in a foreign garb; that the Congress of the Union are impotent
to restore the balance in favor of native industry destroyed by the
statutes of another realm?

More just and generous sentiments will, I trust, prevail. If the tariff
adopted at the last session of Congress shall be found by experience to
bear oppressively upon the interests of any one section of the Union, it
ought to be, and I can not doubt will be, so modified as to alleviate
its burden. To the voice of just complaint from any portion of their
constituents the representatives of the States and of the people will
never turn away their ears.

But so long as the duty of the foreign shall operate only as a bounty
upon the domestic article; while the planter and the merchant and the
shepherd and the husbandman shall be found thriving in their occupations
under the duties imposed for the protection of domestic manufactures,
they will not repine at the prosperity shared with themselves by their
fellow citizens of other professions, nor denounce as violations of the
Constitution the deliberate acts of Congress to shield from the wrongs
of foreigns the native industry of the Union.

While the tariff of the last session of Congress was a subject of
legislative deliberation it was foretold by some of its opposers that
one of its necessary consequences would be to impair the revenue. It is
yet too soon to pronounce with confidence that this prediction was
erroneous. The obstruction of one avenue of trade not unfrequently opens
an issue to another. The consequence of the tariff will be to increase
the exportation and to diminish the importation of some specific
articles; but by the general law of trade the increase of exportation of
one article will be followed by an increased importation of others, the
duties upon which will supply the deficiencies which the diminished
importation would otherwise occasion. The effect of taxation upon
revenue can seldom be foreseen with certainty. It must abide the test of
experience.

As yet no symptoms of diminution are perceptible in the receipts of the
Treasury. As yet little addition of cost has even been experienced upon
the articles burdened with heavier duties by the last tariff. The
domestic manufacturer supplies the same or a kindred article at a
diminished price, and the consumer pays the same tribute to the labor of
his own country-man which he must otherwise have paid to foreign
industry and toil.

The tariff of the last session was in its details not acceptable to the
great interests of any portion of the Union, not even to the interest
which it was specially intended to subserve. Its object was to balance
the burdens upon native industry imposed by the operation of foreign
laws, but not to aggravate the burdens of one section of the Union by
the relief afforded to another. To the great principle sanctioned by
that act--one of those upon which the Constitution itself was formed--I
hope and trust the authorities of the Union will adhere. But if any of
the duties imposed by the act only relieve the manufacturer by
aggravating the burden of the planter, let a careful revisal of its
provisions, enlightened by the practical experience of its effects, be
directed to retain those which impart protection to native industry and
remove or supply the place of those which only alleviate one great
national interest by the depression of another.

The United States of America and the people of every State of which they
are composed are each of them sovereign powers. The legislative
authority of the whole is exercised by Congress under authority granted
them in the common Constitution. The legislative power of each State is
exercised by assemblies deriving their authority from the constitution
of the State. Each is sovereign within its own province. The
distribution of power between them presupposes that these authorities
will move in harmony with each other. The members of the State and
General Governments are all under oath to support both, and allegiance
is due to the one and to the other. The case of a conflict between these
two powers has not been supposed, nor has any provision been made for it
in our institutions; as a virtuous nation of ancient times existed more
than five centuries without a law for the punishment of parricide.

More than once, however, in the progress of our history have the people
and the legislatures of one or more States, in moments of excitement,
been instigated to this conflict; and the means of effecting this
impulse have been allegations that the acts of Congress to be resisted
were unconstitutional. The people of no one State have ever delegated to
their legislature the power of pronouncing an act of Congress
unconstitutional, but they have delegated to them powers by the exercise
of which the execution of the laws of Congress within the State may be
resisted. If we suppose the case of such conflicting legislation
sustained by the corresponding executive and judicial authorities,
patriotism and philanthropy turn their eyes from the condition in which
the parties would be placed, and from that of the people of both, which
must be its victims.

The reports from the Secretary of War and the various subordinate
offices of the resort of that Department present an exposition of the
public administration of affairs connected with them through the course
of the current year. The present state of the Army and the distribution
of the force of which it is composed will be seen from the report of the
Major General. Several alterations in the disposal of the troops have
been found expedient in the course of the year, and the discipline of
the Army, though not entirely free from exception, has been generally
good.

The attention of Congress is particularly invited to that part of the
report of the Secretary of War which concerns the existing system of our
relations with the Indian tribes. At the establishment of the Federal
Government under the present Constitution of the United States the
principle was adopted of considering them as foreign and independent
powers and also as proprietors of lands. They were, moreover, considered
as savages, whom it was our policy and our duty to use our influence in
converting to Christianity and in bringing within the pale of
civilization.

As independent powers, we negotiated with them by treaties; as
proprietors, we purchased of them all the lands which we could prevail
upon them to sell; as brethren of the human race, rude and ignorant, we
endeavored to bring them to the knowledge of religion and letters. The
ultimate design was to incorporate in our own institutions that portion
of them which could be converted to the state of civilization. In the
practice of European States, before our Revolution, they had been
considered as children to be governed; as tenants at discretion, to be
dispossessed as occasion might require; as hunters to be indemnified by
trifling concessions for removal from the grounds from which their game
was extirpated. In changing the system it would seem as if a full
contemplation of the consequences of the change had not been taken.

We have been far more successful in the acquisition of their lands than
in imparting to them the principles or inspiring them with the spirit of
civilization. But in appropriating to ourselves their hunting grounds we
have brought upon ourselves the obligation of providing them with
subsistence; and when we have had the rare good fortune of teaching them
the arts of civilization and the doctrines of Christianity we have
unexpectedly found them forming in the midst of ourselves communities
claiming to be independent of ours and rivals of sovereignty within the
territories of the members of our Union. This state of things requires
that a remedy should be provided--a remedy which, while it shall do
justice to those unfortunate children of nature, may secure to the
members of our confederation their rights of sovereignty and of soil. As
the outline of a project to that effect, the views presented in the
report of the Secretary of War are recommended to the consideration of
Congress.

The report from the Engineer Department presents a comprehensive view of
the progress which has been made in the great systems promotive of the
public interest, commenced and organized under authority of Congress,
and the effects of which have already contributed to the security, as
they will hereafter largely contribute to the honor and dignity, of the
nation.

The first of these great systems is that of fortifications, commenced
immediately after the close of our last war, under the salutary
experience which the events of that war had impressed upon our country-
men of its necessity. Introduced under the auspices of my immediate
predecessor, it has been continued with the persevering and liberal
encouragement of the Legislature, and, combined with corresponding
exertions for the gradual increase and improvement of the Navy, prepares
for our extensive country a condition of defense adapted to any critical
emergency which the varying course of events may bring forth. Our
advances in these concerted systems have for the last ten years been
steady and progressive, and in a few years more will be so completed as
to leave no cause for apprehension that our sea coast will ever again
offer a theater of hostile invasion.

The next of these cardinal measures of policy is the preliminary to
great and lasting works of public improvement in the surveys of roads,
examination for the course of canals, and labors for the removal of the
obstructions of rivers and harbors, first commenced by the act of
Congress of April 30th, 1824.

The report exhibits in one table the funds appropriated at the last and
preceding sessions of Congress for all these fortifications, surveys,
and works of public improvement, the manner in which these funds have
been applied, the amount expended upon the several works under
construction, and the further sums which may be necessary to complete
them; in a second, the works projected by the Board of Engineers which
have not been commenced, and the estimate of their cost; in a third, the
report of the annual Board of Visitors at the Military Academy at West
Point.

For thirteen fortifications erecting on various points of our Atlantic
coast, from Rhode Island to Louisiana, the aggregate expenditure of the
year has fallen little short of $1,000,000. For the preparation of five
additional reports of reconnoissances and surveys since the last session
of Congress, for the civil construction upon 37 different public works
commenced, eight others for which specific appropriations have been made
by acts of Congress, and twenty other incipient surveys under the
authority given by the act of April 30th, 1824, about $1,000,000 more
has been drawn from the Treasury.

To these $2,000,000 is to be added the appropriation of $250,000 to
commence the erection of a break-water near the mouth of the Delaware
River, the subscriptions to the Delaware and Chesapeake, the Louisville
and Portland, the Dismal Swamp, and the Chesapeake and Ohio canals, the
large donations of lands to the States of Ohio, Indiana, Illinois, and
Alabama for objects of improvements within those States, and the sums
appropriated for light-houses, buoys, and piers on the coast; and a full
view will be taken of the munificence of the nation in the application
of its resources to the improvement of its own condition.

Of these great national under-takings the Academy at West Point is among
the most important in itself and the most comprehensive in its
consequences. In that institution a part of the revenue of the nation is
applied to defray the expense of educating a competent portion of her
youth chiefly to the knowledge and the duties of military life. It is
the living armory of the nation. While the other works of improvement
enumerated in the reports now presented to the attention of Congress are
destined to ameliorate the face of nature, to multiply the facilities of
communication between the different parts of the Union, to assist the
labors, increase the comforts, and enhance the enjoyments of
individuals, the instruction acquired at West Point enlarges the
dominion and expands the capacities of the mind. Its beneficial results
are already experienced in the composition of the Army, and their
influence is felt in the intellectual progress of society. The
institution is susceptible still of great improvement from benefactions
proposed by several successive Boards of Visitors, to whose earnest and
repeated recommendations I cheerfully add my own.

With the usual annual reports from the Secretary of the Navy and the
Board of Commissioners will be exhibited to the view of Congress the
execution of the laws relating to that department of the public service.
The repression of piracy in the West Indian and in the Grecian seas has
been effectually maintained, with scarcely any exception. During the war
between the Governments of Buenos Ayres and of Brazil frequent
collisions between the belligerent acts of power and the rights of
neutral commerce occurred. Licentious blockades, irregularly enlisted or
impressed sea men, and the property of honest commerce seized with
violence, and even plundered under legal pretenses, are disorders never
separable from the conflicts of war upon the ocean.

With a portion of them the correspondence of our commanders on the
eastern aspect of the South American coast and among the islands of
Greece discover how far we have been involved. In these the honor of our
country and the rights of our citizens have been asserted and
vindicated. The appearance of new squadrons in the Mediterranean and the
blockade of the Dardanelles indicate the danger of other obstacles to
the freedom of commerce and the necessity of keeping our naval force in
those seas. To the suggestions repeated in the report of the Secretary
of the Navy, and tending to the permanent improvement of this
institution, I invite the favorable consideration of Congress.

A resolution of the House of Representatives requesting that one of our
small public vessels should be sent to the Pacific Ocean and South Sea
to examine the coasts, islands, harbors, shoals, and reefs in those
seas, and to ascertain their true situation and description, has been
put in a train of execution. The vessel is nearly ready to depart. The
successful accomplishment of the expedition may be greatly facilitated
by suitable legislative provisions, and particularly by an appropriation
to defray its necessary expense. The addition of a 2nd, and perhaps a
3rd, vessel, with a slight aggravation of the cost, would contribute
much to the safety of the citizens embarked on this under- taking, the
results of which may be of the deepest interest to our country.

With the report of the Secretary of the Navy will be submitted, in
conformity to the act of Congress of March 3d, 1827, for the gradual
improvement of the Navy of the United States, statements of the
expenditures under that act and of the measures for carrying the same
into effect. Every section of that statute contains a distinct provision
looking to the great object of the whole--the gradual improvement of the
Navy. Under its salutary sanction stores of ship timber have been
procured and are in process of seasoning and preservation for the future
uses of the Navy. Arrangements have been made for the preservation of
the live oak timber growing on the lands of the United States, and for
its reproduction, to supply at future and distant days the waste of that
most valuable material for ship building by the great consumption of it
yearly for the commercial as well as for the military marine of our
country.

The construction of the two dry docks at Charlestown and at Norfolk is
making satisfactory progress toward a durable establishment. The
examinations and inquiries to ascertain the practicability and
expediency of a marine railway at Pensacola, though not yet
accomplished, have been postponed but to be more effectually made. The
navy yards of the United States have been examined, and plans for their
improvement and the preservation of the public property therein at
Portsmouth, Charlestown, Philadelphia, Washington, and Gosport, and to
which two others are to be added, have been prepared and received my
sanction; and no other portion of my public duties has been performed
with a more intimate conviction of its importance to the future welfare
and security of the Union.

With the report from the Post Master General is exhibited a comparative
view of the gradual increase of that establishment, from five to five
years, since 1792 'til this time in the number of post offices, which
has grown from less than 200 to nearly 8,000; in the revenue yielded by
them, which from $67,000 has swollen to upward of $1,500,000, and in the
number of miles of post roads, which from 5,642 have multiplied to
114,536. While in the same period of time the population of the Union
has about thrice doubled, the rate of increase of these offices is
nearly 40, and of the revenue and of traveled miles from 20 to 25 for
one. The increase of revenue within the last five years has been nearly
equal to the whole revenue of the Department in 1812.

The expenditures of the Department during the year which ended on July
1st, 1828 have exceeded the receipts by a sum of about $25,000. The
excess has been occasioned by the increase of mail conveyances and
facilities to the extent of near 800,000 miles. It has been supplied by
collections from the post masters of the arrearages of preceding years.
While the correct principle seems to be that the income levied by the
Department should defray all its expenses, it has never been the policy
of this Government to raise from this establishment any revenue to be
applied to any other purposes. The suggestion of the Post Master General
that the insurance of the safe transmission of moneys by the mail might
be assumed by the Department for a moderate and competent remuneration
will deserve the consideration of Congress.

A report from the commissioner of the public buildings in this city
exhibits the expenditures upon them in the course of the current year.
It will be seen that the humane and benevolent intentions of Congress in
providing, by the act of May 20th, 1826, for the erection of a
penitentiary in this District have been accomplished. The authority of
further legislation is now required for the removal to this tenement of
the offenders against the laws sentenced to atone by personal
confinement for their crimes, and to provide a code for their employment
and government while thus confined.

The commissioners appointed, conformably to the act of March 2d, 1827,
to provide for the adjustment of claims of persons entitled to
indemnification under the first article of the treaty of Ghent, and for
the distribution among such claimants of the sum paid by the Government
of Great Britain under the convention of November 13th, 1826, closed
their labors on August 30th, 1828 last by awarding to the claimants the
sum of $1,197,422.18, leaving a balance of $7,537.82, which was
distributed ratably amongst all the claimants to whom awards had been
made, according to the directions of the act.

The exhibits appended to the report from the Commissioner of the General
Land Office present the actual condition of that common property of the
Union. The amount paid into the Treasury from the proceeds of lands
during the year 1827 and for the first half of 1828 falls little short
of $2,000,000. The propriety of further extending the time for the
extinguishment of the debt due to the United States by the purchasers of
the public lands, limited by the act of March 21st, 1828 to July 4th,
1829, will claim the consideration of Congress, to whose vigilance and
careful attention the regulation, disposal, and preservation of this
great national inheritance has by the people of the United States been
intrusted.

Among the important subjects to which the attention of the present
Congress has already been invited, and which may occupy their further
and deliberate discussion, will be the provision to be made for taking
the 5th census of enumeration of the inhabitants of the United States.
The Constitution of the United States requires that this enumeration
should be made within every term of ten years, and the date from which
the last enumeration commenced was the first Monday of August of the
year 1820.

The laws under which the former enumerations were taken were enacted at
the session of Congress immediately preceding the operation; but
considerable inconveniences were experienced from the delay of
legislation to so late a period. That law, like those of the preceding
enumerations, directed that the census should be taken by the marshals
of the several districts and Territories of the Union under instructions
from the Secretary of State. The preparation and transmission to the
marshals of those instructions required more time than was then allowed
between the passage of the law and the day when the enumeration was to
commence. The term of six months limited for the returns of the marshals
was also found even then too short, and must be more so now, when an
additional population of at least 3,000,000 must be presented upon the
returns.

As they are to be made at the short session of Congress, it would, as
well as from other considerations, be more convenient to commence the
enumeration from an earlier period of the year than the first of August.
The most favorable season would be the spring.

On a review of the former enumerations it will be found that the plan
for taking every census has contained many improvements upon that of its
predecessor. The last is still susceptible of much improvement. The 3rd
Census was the first at which any account was taken of the manufactures
of the country. It was repeated at the last enumeration, but the returns
in both cases were necessarily very imperfect. They must always be so,
resting, of course, only upon the communications voluntarily made by
individuals interested in some of the manufacturing establishments. Yet
they contained much valuable information, and may by some supplementary
provision of the law be rendered more effective.

The columns of age, commencing from infancy, have hitherto been confined
to a few periods, all under the number of 45 years. Important knowledge
would be obtained by extending these columns, in intervals of ten years,
to the utmost boundaries of human life. The labor of taking them would
be a trifling addition to that already prescribed, and the result would
exhibit comparative tables of longevity highly interesting to the
country. I deem it my duty further to observe that much of the
imperfections in the returns of the last and perhaps of preceding
enumerations proceeded from the inadequateness of the compensations
allowed to the marshals and their assistants in taking them.

In closing this communication it only remains for me to assure the
Legislature of my continued earnest wish for the adoption of measures
recommended by me heretofore and yet to be acted on by them, and of the
cordial concurrence on my part in every constitutional provision which
may receive their sanction during the session tending to the general
welfare.

JOHN QUINCY ADAMS

***

State of the Union Address
Andrew Jackson
December 8, 1829

Fellow Citizens of the Senate and of the House of Representatives:

It affords me pleasure to tender my friendly greetings to you on the
occasion of your assembling at the seat of Government to enter upon the
important duties to which you have been called by the voice of our
country-men. The task devolves on me, under a provision of the
Constitution, to present to you, as the Federal Legislature of 24
sovereign States and 12,000,000 happy people, a view of our affairs, and
to propose such measures as in the discharge of my official functions
have suggested themselves as necessary to promote the objects of our
Union.

In communicating with you for the first time it is to me a source of
unfeigned satisfaction, calling for mutual gratulation and devout thanks
to a benign Providence, that we are at peace with all man-kind, and that
our country exhibits the most cheering evidence of general welfare and
progressive improvement. Turning our eyes to other nations, our great
desire is to see our brethren of the human race secured in the blessings
enjoyed by ourselves, and advancing in knowledge, in freedom, and in
social happiness.

Our foreign relations, although in their general character pacific and
friendly, present subjects of difference between us and other powers of
deep interest as well to the country at large as to many of our
citizens. To effect an adjustment of these shall continue to be the
object of my earnest endeavors, and not with standing the difficulties
of the task, I do not allow myself to apprehend unfavorable results.
Blessed as our country is with every thing which constitutes national
strength, she is fully adequate to the maintenance of all her interests.
In discharging the responsible trust confided to the Executive in this
respect it is my settled purpose to ask nothing that is not clearly
right and to submit to nothing that is wrong; and I flatter myself that,
supported by the other branches of the Government and by the
intelligence and patriotism of the people, we shall be able, under the
protection of Providence, to cause all our just rights to be respected.

Of the unsettled matters between the United States and other powers, the
most prominent are those which have for years been the subject of
negotiation with England, France, and Spain. The late periods at which
our ministers to those Governments left the United States render it
impossible at this early day to inform you of what has been done on the
subjects with which they have been respectively charged. Relying upon
the justice of our views in relation to the points committed to
negotiation and the reciprocal good feeling which characterizes our
intercourse with those nations, we have the best reason to hope for a
satisfactory adjustment of existing differences.

With Great Britain, alike distinguished in peace and war, we may look
forward to years of peaceful, honorable, and elevated competition. Every
thing in the condition and history of the two nations is calculated to
inspire sentiments of mutual respect and to carry conviction to the
minds of both that it is their policy to preserve the most cordial
relations. Such are my own views, and it is not to be doubted that such
are also the prevailing sentiments of our constituents. Although neither
time nor opportunity has been afforded for a full development of the
policy which the present cabinet of Great Britain designs to pursue
toward this country, I indulge the hope that it will be of a just and
pacific character; and if this anticipation be realized we may look with
confidence to a speedy and acceptable adjustment of our affairs.

Under the convention for regulating the reference to arbitration of the
disputed points of boundary under the 5th article of the treaty of
Ghent, the proceedings have hitherto been conducted in that spirit of
candor and liberality which ought ever to characterize the acts of
sovereign States seeking to adjust by the most unexceptionable means
important and delicate subjects of contention. The first sentiments of
the parties have been exchanged, and the final replication on our part
is in a course of preparation. This subject has received the attention
demanded by its great and peculiar importance to a patriotic member of
this Confederacy. The exposition of our rights already made is such as,
from the high reputation of the commissioners by whom it has been
prepared, we had a right to expect. Our interests at the Court of the
Sovereign who has evinced his friendly disposition by assuming the
delicate task of arbitration have been committed to a citizen of the
State of Maine, whose character, talents, and intimate acquaintance with
the subject eminently qualify him for so responsible a trust. With full
confidence in the justice of our cause and in the probity, intelligence,
and uncompromising independence of the illustrious arbitrator, we can
have nothing to apprehend from the result.

From France, our ancient ally, we have a right to expect that justice
which becomes the sovereign of a powerful, intelligent, and magnanimous
people. The beneficial effects produced by the commercial convention of
1822, limited as are its provisions, are too obvious not to make a
salutary impression upon the minds of those who are charged with the
administration of her Government. Should this result induce a
disposition to embrace to their full extent the wholesome principles
which constitute our commercial policy, our minister to that Court will
be found instructed to cherish such a disposition and to aid in
conducting it to useful practical conclusions. The claims of our
citizens for depredations upon their property, long since committed
under the authority, and in many instances by the express direction, of
the then existing Government of France, remain unsatisfied, and must
therefore continue to furnish a subject of unpleasant discussion and
possible collision between the two Governments. I cherish, however, a
lively hope, founded as well on the validity of those claims and the
established policy of all enlightened governments as on the known
integrity of the French Monarch, that the injurious delays of the past
will find redress in the equity of the future. Our minister has been
instructed to press these demands on the French Government with all the
earnestness which is called for by their importance and irrefutable
justice, and in a spirit that will evince the respect which is due to
the feelings of those from whom the satisfaction is required.

Our minister recently appointed to Spain has been authorized to assist
in removing evils alike injurious to both countries, either by
concluding a commercial convention upon liberal and reciprocal terms or
by urging the acceptance in their full extent of the mutually beneficial
provisions of our navigation acts. He has also been instructed to make a
further appeal to the justice of Spain, in behalf of our citizens, for
indemnity for spoliations upon our commerce committed under her
authority--an appeal which the pacific and liberal course observed on
our part and a due confidence in the honor of that Government authorize
us to expect will not be made in vain.

With other European powers our intercourse is on the most friendly
footing. In Russia, placed by her territorial limits, extensive
population, and great power high in the rank of nations, the United
States have always found a steadfast friend. Although her recent
invasion of Turkey awakened a lively sympathy for those who were exposed
to the desolation of war, we can not but anticipate that the result will
prove favorable to the cause of civilization and to the progress of
human happiness. The treaty of peace between these powers having been
ratified, we can not be insensible to the great benefit to be derived by
the commerce of the United States from unlocking the navigation of the
Black Sea, a free passage into which is secured to all merchant vessels
bound to ports of Russia under a flag at peace with the Porte. This
advantage, enjoyed upon conditions by most of the powers of Europe, has
hitherto been withheld from us. During the past summer an antecedent but
unsuccessful attempt to obtain it was renewed under circumstances which
promised the most favorable results. Although these results have
fortunately been thus in part attained, further facilities to the
enjoyment of this new field for the enterprise of our citizens are, in
my opinion, sufficiently desirable to insure to them our most zealous
attention.

Our trade with Austria, although of secondary importance, has been
gradually increasing, and is now so extended as to deserve the fostering
care of the Government. A negotiation, commenced and nearly completed
with that power by the late Administration, has been consummated by a
treaty of amity, navigation, and commerce, which will be laid before the
Senate.

During the recess of Congress our diplomatic relations with Portugal
have been resumed. The peculiar state of things in that country caused a
suspension of the recognition of the representative who presented
himself until an opportunity was had to obtain from our official organ
there information regarding the actual and, as far as practicable,
prospective condition of the authority by which the representative in
question was appointed. This information being received, the application
of the established rule of our Government in like cases was no longer
withheld.

Considerable advances have been made during the present year in the
adjustment of claims of our citizens upon Denmark for spoliations, but
all that we have a right to demand from that Government in their behalf
has not yet been conceded. From the liberal footing, however, upon which
this subject has, with the approbation of the claimants, been placed by
the Government, together with the uniformly just and friendly
disposition which has been evinced by His Danish Majesty, there is a
reasonable ground to hope that this single subject of difference will
speedily be removed.

Our relations with the Barbary Powers continue, as they have long been,
of the most favorable character. The policy of keeping an adequate force
in the Mediterranean, as security for the continuance of this
tranquillity, will be persevered in, as well as a similar one for the
protection of our commerce and fisheries in the Pacific.

The southern Republics of our own hemisphere have not yet realized all
the advantages for which they have been so long struggling. We trust,
however, that the day is not distant when the restoration of peace and
internal quiet, under permanent systems of government, securing the
liberty and promoting the happiness of the citizens, will crown with
complete success their long and arduous efforts in the cause of
self-government, and enable us to salute them as friendly rivals in all
that is truly great and glorious.

The recent invasion of Mexico, and the effect thereby produced upon her
domestic policy, must have a controlling influence upon the great
question of South American emancipation. We have seen the fell spirit of
civil dissension rebuked, and perhaps for ever stifled, in that Republic
by the love of independence. If it be true, as appearances strongly
indicate, the spirit of independence is the master spirit, and if a
corresponding sentiment prevails in the other States, this devotion to
liberty can not be without a proper effect upon the counsels of the
mother country. The adoption by Spain of a pacific policy toward her
former colonies--an event consoling to humanity, and a blessing to the
world, in which she herself can not fail largely to participate--may be
most reasonably expected.

The claims of our citizens upon the South American Governments generally
are in a train of settlement, while the principal part of those upon
Brazil have been adjusted, and a decree in council ordering bonds to be
issued by the minister of the treasury for their amount has received the
sanction of His Imperial Majesty. This event, together with the exchange
of the ratifications of the treaty negotiated and concluded in 1828,
happily terminates all serious causes of difference with that power.

Measures have been taken to place our commercial relations with Peru
upon a better footing than that upon which they have hitherto rested,
and if met by a proper disposition on the part of that Government
important benefits may be secured to both countries.

Deeply interested as we are in the prosperity of our sister Republics,
and more particularly in that of our immediate neighbor, it would be
most gratifying to me were I permitted to say that the treatment which
we have received at her hands has been as universally friendly as the
early and constant solicitude manifested by the United States for her
success gave us a right to expect. But it becomes my duty to inform you
that prejudices long indulged by a portion of the inhabitants of Mexico
against the envoy extraordinary and minister plenipotentiary of the
United States have had an unfortunate influence upon the affairs of the
two countries, and have diminished that usefulness to his own which was
justly to be expected from his talents and zeal. To this cause, in a
great degree, is to be imputed the failure of several measures equally
interesting to both parties, but particularly that of the Mexican
Government to ratify a treaty negotiated and concluded in its own
capital and under its own eye. Under these circumstances it appeared
expedient to give to Mr. Poinsett the option either to return or not, as
in his judgment the interest of his country might require, and
instructions to that end were prepared; but before they could be
dispatched a communication was received from the Government of Mexico,
through its charge d'affaires here, requesting the recall of our
minister. This was promptly complied with, and a representative of a
rank corresponding with that of the Mexican diplomatic agent near this
Government was appointed. Our conduct toward that Republic has been
uniformly of the most friendly character, and having thus removed the
only alleged obstacle to harmonious intercourse, I can not but hope that
an advantageous change will occur in our affairs.

In justice to Mr. Poinsett it is proper to say that my immediate
compliance with the application for his recall and the appointment of a
successor are not to be ascribed to any evidence that the imputation of
an improper interference by him in the local politics of Mexico was well
founded, nor to a want of confidence in his talents or integrity, and to
add that the truth of the charges has never been affirmed by the federal
Government of Mexico in its communications with us.

I consider it one of the most urgent of my duties to bring to your
attention the propriety of amending that part of the Constitution which
relates to the election of President and Vice-President. Our system of
government was by its framers deemed an experiment, and they therefore
consistently provided a mode of remedying its defects.

To the people belongs the right of electing their Chief Magistrate; it
was never designed that their choice should in any case be defeated,
either by the intervention of electoral colleges or by the agency
confided, under certain contingencies, to the House of Representatives.
Experience proves that in proportion as agents to execute the will of
the people are multiplied there is danger of their wishes being
frustrated. Some may be unfaithful; all are liable to err. So far,
therefore, as the people can with convenience speak, it is safer for
them to express their own will.

The number of aspirants to the Presidency and the diversity of the
interests which may influence their claims leave little reason to expect
a choice in the first instance, and in that event the election must
devolve on the House of Representatives, where it is obvious the will of
the people may not be always ascertained, or, if ascertained, may not be
regarded. From the mode of voting by States the choice is to be made by
24 votes, and it may often occur that one of these will be controlled by
an individual Representative. Honors and offices are at the disposal of
the successful candidate. Repeated ballotings may make it apparent that
a single individual holds the cast in his hand. May he not be tempted to
name his reward?

But even without corruption, supposing the probity of the Representative
to be proof against the powerful motives by which it may be assailed,
the will of the people is still constantly liable to be misrepresented.
One may err from ignorance of the wishes of his constituents; another
from a conviction that it is his duty to be governed by his own judgment
of the fitness of the candidates; finally, although all were inflexibly
honest, all accurately informed of the wishes of their constituents, yet
under the present mode of election a minority may often elect a
President, and when this happens it may reasonably be expected that
efforts will be made on the part of the majority to rectify this
injurious operation of their institutions. But although no evil of this
character should result from such a perversion of the first principle of
our system--that the majority is to govern--it must be very certain that
a President elected by a minority can not enjoy the confidence necessary
to the successful discharge of his duties.

In this as in all other matters of public concern policy requires that
as few impediments as possible should exist to the free operation of the
public will. Let us, then, endeavor so to amend our system that the
office of Chief Magistrate may not be conferred upon any citizen but in
pursuance of a fair expression of the will of the majority.

I would therefore recommend such an amendment of the Constitution as may
remove all intermediate agency in the election of the President and
Vice-President. The mode may be so regulated as to preserve to each
State its present relative weight in the election, and a failure in the
first attempt may be provided for by confining the second to a choice
between the two highest candidates. In connection with such an amendment
it would seem advisable to limit the service of the Chief Magistrate to
a single term of either four or six years. If, however, it should not be
adopted, it is worthy of consideration whether a provision disqualifying
for office the Representatives in Congress on whom such an election may
have devolved would not be proper.

While members of Congress can be constitutionally appointed to offices
of trust and profit it will be the practice, even under the most
conscientious adherence to duty, to select them for such stations as
they are believed to be better qualified to fill than other citizens;
but the purity of our Government would doubtless be promoted by their
exclusion from all appointments in the gift of the President, in whose
election they may have been officially concerned. The nature of the
judicial office and the necessity of securing in the Cabinet and in
diplomatic stations of the highest rank the best talents and political
experience should, perhaps, except these from the exclusion.

There are, perhaps, few men who can for any great length of time enjoy
office and power without being more or less under the influence of
feelings unfavorable to the faithful discharge of their public duties.
Their integrity may be proof against improper considerations immediately
addressed to themselves, but they are apt to acquire a habit of looking
with indifference upon the public interests and of tolerating conduct
from which an unpracticed man would revolt. Office is considered as a
species of property, and government rather as a means of promoting
individual interests than as an instrument created solely for the
service of the people. Corruption in some and in others a perversion of
correct feelings and principles divert government from its legitimate
ends and make it an engine for the support of the few at the expense of
the many. The duties of all public officers are, or at least admit of
being made, so plain and simple that men of intelligence may readily
qualify themselves for their performance; and I can not but believe that
more is lost by the long continuance of men in office than is generally
to be gained by their experience. I submit, therefore, to your
consideration whether the efficiency of the Government would not be
promoted and official industry and integrity better secured by a general
extension of the law which limits appointments to four years.

In a country where offices are created solely for the benefit of the
people no one man has any more intrinsic right to official station than
another. Offices were not established to give support to particular men
at the public expense. No individual wrong is, therefore, done by
removal, since neither appointment to nor continuance in office is a
matter of right. The incumbent became an officer with a view to public
benefits, and when these require his removal they are not to be
sacrificed to private interests. It is the people, and they alone, who
have a right to complain when a bad officer is substituted for a good
one. He who is removed has the same means of obtaining a living that are
enjoyed by the millions who never held office. The proposed limitation
would destroy the idea of property now so generally connected with
official station, and although individual distress may be some times
produced, it would, by promoting that rotation which constitutes a
leading principle in the republican creed, give healthful action to the
system.

No very considerable change has occurred during the recess of Congress
in the condition of either our agriculture, commerce, or manufactures.
The operation of the tariff has not proved so injurious to the two
former or as beneficial to the latter as was anticipated. Importations
of foreign goods have not been sensibly diminished, while domestic
competition, under an illusive excitement, has increased the production
much beyond the demand for home consumption. The consequences have been
low prices, temporary embarrassment, and partial loss. That such of our
manufacturing establishments as are based upon capital and are prudently
managed will survive the shock and be ultimately profitable there is no
good reason to doubt.

To regulate its conduct so as to promote equally the prosperity of these
three cardinal interests is one of the most difficult tasks of
Government; and it may be regretted that the complicated restrictions
which now embarrass the intercourse of nations could not by common
consent be abolished, and commerce allowed to flow in those channels to
which individual enterprise, always its surest guide, might direct it.
But we must ever expect selfish legislation in other nations, and are
therefore compelled to adapt our own to their regulations in the manner
best calculated to avoid serious injury and to harmonize the conflicting
interests of our agriculture, our commerce, and our manufactures. Under
these impressions I invite your attention to the existing tariff,
believing that some of its provisions require modification.

The general rule to be applied in graduating the duties upon articles of
foreign growth or manufacture is that which will place our own in fair
competition with those of other countries; and the inducements to
advance even a step beyond this point are controlling in regard to those
articles which are of primary necessity in time of war. When we reflect
upon the difficulty and delicacy of this operation, it is important that
it should never be attempted but with the utmost caution. Frequent
legislation in regard to any branch of industry, affecting its value,
and by which its capital may be transferred to new channels, must always
be productive of hazardous speculation and loss.

In deliberating, therefore, on these interesting subjects local feelings
and prejudices should be merged in the patriotic determination to
promote the great interests of the whole. All attempts to connect them
with the party conflicts of the day are necessarily injurious, and
should be discountenanced. Our action upon them should be under the
control of higher and purer motives. Legislation subjected to such
influences can never be just, and will not long retain the sanction of a
people whose active patriotism is not bounded by sectional limits nor
insensible to that spirit of concession and forbearance which gave life
to our political compact and still sustains it. Discarding all
calculations of political ascendancy, the North, the South, the East,
and the West should unite in diminishing any burthen of which either may
justly complain.

The agricultural interest of our country is so essentially connected
with every other and so superior in importance to them all that it is
scarcely necessary to invite to it your particular attention. It is
principally as manufactures and commerce tend to increase the value of
agricultural productions and to extend their application to the wants
and comforts of society that they deserve the fostering care of
Government.

Looking forward to the period, not far distant, when a sinking fund will
no longer be required, the duties on those articles of importation which
can not come in competition with our own productions are the first that
should engage the attention of Congress in the modification of the
tariff. Of these, tea and coffee are the most important. They enter
largely into the consumption of the country, and have become articles of
necessity to all classes. A reduction, therefore, of the existing duties
will be felt as a common benefit, but like all other legislation
connected with commerce, to be efficacious and not injurious it should
be gradual and certain.

The public prosperity is evinced in the increased revenue arising from
the sales of the public lands and in the steady maintenance of that
produced by imposts and tonnage, not withstanding the additional duties
imposed by the act of May 19th, 1828, and the unusual importations in
the early part of that year.

The balance in the Treasury on January 1st, 1829 was $5,972,435.81. The
receipts of the current year are estimated at $24,602,230 and the
expenditures for the same time at $26,164,595, leaving a balance in the
Treasury on January 1st, 1830 of $4,410,070.81.

There will have been paid on account of the public debt during the
present year the sum of $12,405,005.80, reducing the whole debt of the
Government on January 1st, 1830 to $48,565,406.50, including $7 millions
of the 5% stock subscribed to the Bank of the United States. The payment
on account of public debt made on July 1st, 1829 was $8,715,462.87. It
was apprehended that the sudden withdrawal of so large a sum from the
banks in which it was deposited, at a time of unusual pressure in the
money market, might cause much injury to the interests dependent on bank
accommodations. But this evil was wholly averted by an early
anticipation of it at the Treasury, aided by the judicious arrangements
of the officers of the Bank of the United States.

This state of the finances exhibits the resources of the nation in an
aspect highly flattering to its industry and auspicious of the ability
of Government in a very short time to extinguish the public debt. When
this shall be done our population will be relieved from a considerable
portion of its present burthens, and will find not only new motives to
patriotic affection, but additional means for the display of individual
enterprise. The fiscal power of the States will also be increased, and
may be more extensively exerted in favor of education and other public
objects, while ample means will remain in the Federal Government to
promote the general weal in all the modes permitted to its authority.

After the extinction of the public debt it is not probable that any
adjustment of the tariff upon principles satisfactory to the people of
the Union will until a remote period, if ever, leave the Government
without a considerable surplus in the Treasury beyond what may be
required for its current service. As, then, the period approaches when
the application of the revenue to the payment of debt will cease, the
disposition of the surplus will present a subject for the serious
deliberation of Congress; and it may be fortunate for the country that
it is yet to be decided.

Considered in connection with the difficulties which have heretofore
attended appropriations for purposes of internal improvement, and with
those which this experience tells us will certainly arise when ever
power over such subjects may be exercised by the Central Government, it
is hoped that it may lead to the adoption of some plan which will
reconcile the diversified interests of the States and strengthen the
bonds which unite them. Every member of the Union, in peace and in war,
will be benefited by the improvement of inland navigation and the
construction of high ways in the several States. Let us, then, endeavor
to attain this benefit in a mode which will be satisfactory to all. That
hitherto adopted has by many of our fellow citizens been deprecated as
an infraction of the Constitution, while by others it has been viewed as
inexpedient. All feel that it has been employed at the expense of
harmony in the legislative councils.

To avoid these evils it appears to me that the most safe, just, and
federal disposition which could be made of the surplus revenue would be
its apportionment among the several States according to their ratio of
representation, and should this measure not be found warranted by the
Constitution that it would be expedient to propose to the States an
amendment authorizing it. I regard an appeal to the source of power in
cases of real doubt, and where its exercise is deemed indispensable to
the general welfare, as among the most sacred of all our obligations.

Upon this country more than any other has, in the providence of God,
been cast the special guardianship of the great principle of adherence
to written constitutions. If it fail here, all hope in regard to it will
be extinguished.

That this was intended to be a government of limited and specific, and
not general, powers must be admitted by all, and it is our duty to
preserve for it the character intended by its framers. If experience
points out the necessity for an enlargement of these powers, let us
apply for it to those for whose benefit it is to be exercised, and not
under-mine the whole system by a resort to over-strained constructions.
The scheme has worked well. It has exceeded the hopes of those who
devised it, and become an object of admiration to the world. We are
responsible to our country and to the glorious cause of self-government
for the preservation of so great a good.

The great mass of legislation relating to our internal affairs was
intended to be left where the Federal Convention found it--in the State
governments. Nothing is clearer, in my view, than that we are chiefly
indebted for the success of the Constitution under which we are now
acting to the watchful and auxiliary operation of the State authorities.
This is not the reflection of a day, but belongs to the most deeply
rooted convictions of my mind. I can not, therefore, too strongly or too
earnestly, for my own sense of its importance, warn you against all
encroachments upon the legitimate sphere of State sovereignty. Sustained
by its healthful and invigorating influence the federal system can never
fall.

In the collection of the revenue the long credits authorized on goods
imported from beyond the Cape of Good Hope are the chief cause of the
losses at present sustained. If these were shortened to 6, 9, and 12
months, and ware-houses provided by Government sufficient to receive the
goods offered in deposit for security and for debenture, and if the
right of the United States to a priority of payment out of the estates
of its insolvent debtors were more effectually secured, this evil would
in a great measure be obviated. An authority to construct such houses is
therefore, with the proposed alteration of the credits, recommended to
your attention.

It is worthy of notice that the laws for the collection and security of
the revenue arising from imposts were chiefly framed when the rates of
duties on imported goods presented much less temptation for illicit
trade than at present exists. There is reason to believe that these laws
are in some respects quite insufficient for the proper security of the
revenue and the protection of the interests of those who are disposed to
observe them. The injurious and demoralizing tendency of a successful
system of smuggling is so obvious as not to require comment, and can not
be too carefully guarded against. I therefore suggest to Congress the
propriety of adopting efficient measures to prevent this evil, avoiding,
however, as much as possible, every unnecessary infringement of
individual liberty and embarrassment of fair and lawful business.

On an examination of the records of the Treasury I have been forcibly
struck with the large amount of public money which appears to be
outstanding. Of the sum thus due from individuals to the Government a
considerable portion is undoubtedly desperate, and in many instances has
probably been rendered so by remissness in the agents charged with its
collection. By proper exertions a great part, however, may yet be
recovered; and what ever may be the portions respectively belonging to
these two classes, it behooves the Government to ascertain the real
state of the fact. This can be done only by the prompt adoption of
judicious measures for the collection of such as may be made available.
It is believed that a very large amount has been lost through the
inadequacy of the means provided for the collection of debts due to the
public, and that this inadequacy lies chiefly in the want of legal skill
habitually and constantly employed in the direction of the agents
engaged in the service. It must, I think, be admitted that the
supervisory power over suits brought by the public, which is now vested
in an accounting officer of the Treasury, not selected with a view to
his legal knowledge, and encumbered as he is with numerous other duties,
operates unfavorably to the public interest.

It is important that this branch of the public service should be
subjected to the supervision of such professional skill as will give it
efficiency. The expense attendant upon such a modification of the
executive department would be justified by the soundest principles of
economy. I would recommend, therefore, that the duties now assigned to
the agent of the Treasury, so far as they relate to the superintendence
and management of legal proceedings on the part of the United States, be
transferred to the Attorney General, and that this officer be placed on
the same footing in all respects as the heads of the other Departments,
receiving like compensation and having such subordinate officers
provided for his Department as may be requisite for the discharge of
these additional duties. The professional skill of the Attorney General,
employed in directing the conduct of marshals and district attorneys,
would hasten the collection of debts now in suit and hereafter save much
to the Government. It might be further extended to the superintendence
of all criminal proceedings for offenses against the United States. In
making this transfer great care should be taken, however, that the power
necessary to the Treasury Department be not impaired, one of its
greatest securities consisting in control over all accounts until they
are audited or reported for suit.

In connection with the foregoing views I would suggest also an inquiry
whether the provisions of the act of Congress authorizing the discharge
of the persons of the debtors to the Government from imprisonment may
not, consistently with the public interest, be extended to the release
of the debt where the conduct of the debtor is wholly exempt from the
imputation of fraud. Some more liberal policy than that which now
prevails in reference to this unfortunate class of citizens is certainly
due to them, and would prove beneficial to the country. The continuance
of the liability after the means to discharge it have been exhausted can
only serve to dispirit the debtor; or, where his resources are but
partial, the want of power in the Government to compromise and release
the demand instigates to fraud as the only resource for securing a
support to his family. He thus sinks into a state of apathy, and becomes
a useless drone in society or a vicious member of it, if not a feeling
witness of the rigor and inhumanity of his country. All experience
proves that oppressive debt is the bane of enterprise, and it should be
the care of a republic not to exert a grinding power over misfortune and
poverty.

Since the last session of Congress numerous frauds on the Treasury have
been discovered, which I thought it my duty to bring under the
cognizance of the United States court for this district by a criminal
prosecution. It was my opinion and that of able counsel who were
consulted that the cases came within the penalties of the act of the
17th Congress approved March 3d, 1823, providing for punishment of
frauds committed on the Government of the United States. Either from
some defect in the law or in its administration every effort to bring
the accused to trial under its provisions proved ineffectual, and the
Government was driven to the necessity of resorting to the vague and
inadequate provisions of the common law. It is therefore my duty to call
your attention to the laws which have been passed for the protection of
the Treasury. If, indeed, there be no provision by which those who may
be unworthily intrusted with its guardianship can be punished for the
most flagrant violation of duty, extending even to the most fraudulent
appropriation of the public funds to their own use, it is time to remedy
so dangerous an omission; or if the law has been perverted from its
original purposes, and criminals deserving to be punished under its
provisions have been rescued by legal subtleties, it ought to be made so
plain by amendatory provisions as to baffle the arts of perversion and
accomplish the ends of its original enactment.

In one of the most flagrant causes the court decided that the
prosecution was barred by the statute which limits prosecutions for
fraud to two years. In this case all the evidences of the fraud, and,
indeed, all knowledge that a fraud had been committed, were in
possession of the party accused until after the two years had elapsed.
Surely the statute ought not to run in favor of any man while he retains
all the evidences of his crime in his own possession, and least of all
in favor of a public officer who continues to defraud the Treasury and
conceal the transaction for the brief term of two years. I would
therefore recommend such an alteration of the law as will give the
injured party and the Government two years after the disclosure of the
fraud or after the accused is out of office to commence their
prosecution.

In connection with this subject I invite the attention of Congress to a
general and minute inquiry into the condition of the Government, with a
view to ascertain what offices can be dispensed with, what expenses
retrenched, and what improvements may be made in the organization of its
various parts to secure the proper responsibility of public agents and
promote efficiency and justice in all its operations.

The report of the Secretary of War will make you acquainted with the
condition of our Army, fortifications, arsenals, and Indian affairs. The
proper discipline of the Army, the training and equipment of the
militia, the education bestowed at West Point, and the accumulation of
the means of defense applicable to the naval force will tend to prolong
the peace we now enjoy, and which every good citizen, more especially
those who have felt the miseries of even a successful warfare, must
ardently desire to perpetuate.

The returns from the subordinate branches of this service exhibit a
regularity and order highly creditable to its character. Both officers
and soldiers seem imbued with a proper sense of duty, and conform to the
restraints of exact discipline with that cheerfulness which becomes the
profession of arms. There is need, however, of further legislation to
obviate the inconveniences specified in the report under consideration,
to some of which it is proper that I should call your particular
attention.

The act of Congress of March 2d, 1821, to reduce and fix the military
establishment, remaining unexecuted as it regards the command of one of
the regiments of artillery, can not now be deemed a guide to the
Executive in making the proper appointment. An explanatory act,
designating the class of officers out of which the grade is to be
filled--whether from the military list as existing prior to the act of
1821 or from it as it has been fixed by that act--would remove this
difficulty. It is also important that the laws regulating the pay and
emoluments of officers generally should be more specific than they now
are. Those, for example, in relation to the Pay Master and Surgeon
General assign to them an annual salary of $2.500, but are silent as to
allowances which in certain exigencies of the service may be deemed
indispensable to the discharge of their duties. This circumstance has
been the authority for extending to them various allowances at different
times under former Administrations, but no uniform rule has been
observed on the subject. Similar inconveniences exist in other cases, in
which the construction put upon the laws by the public accountants may
operate unequally, produce confusion, and expose officers to the odium
of claiming what is not their due.

I recommend to your fostering care, as one of our safest means of
national defense, the Military Academy. This institution has already
exercised the happiest influence upon the moral and intellectual
character of our Army; and such of the graduates as from various causes
may not pursue the profession of arms will be scarcely less useful as
citizens. Their knowledge of the military art will be advantageously
employed in the militia service, and in a measure secure to that class
of troops the advantages which in this respect belong to standing
armies.

I would also suggest a review of the pension law, for the purpose of
extending its benefits to every Revolutionary soldier who aided in
establishing our liberties, and who is unable to maintain himself in
comfort. These relics of the War of Independence have strong claims upon
their country's gratitude and bounty. The law is defective in not
embracing within its provisions all those who were during the last war
disabled from supporting themselves by manual labor. Such an amendment
would add but little to the amount of pensions, and is called for by the
sympathies of the people as well as by considerations of sound policy.

It will be perceived that a large addition to the list of pensioners has
been occasioned by an order of the late Administration, departing
materially from the rules which had previously prevailed. Considering it
an act of legislation, I suspended its operation as soon as I was
informed that it had commenced. Before this period, however,
applications under the new regulation had been preferred to the number
of 154, of which, on March 27, the date of its revocation, 87 were
admitted. For the amount there was neither estimate nor appropriation;
and besides this deficiency, the regular allowances, according to the
rules which have heretofore governed the Department, exceed the estimate
of its late Secretary by about $50,000, for which an appropriation is
asked.

Your particular attention is requested to that part of the report of the
Secretary of War which relates to the money held in trust for the Seneca
tribe of Indians. It will be perceived that without legislative aid the
Executive can not obviate the embarrassments occasioned by the
diminution of the dividends on that fund, which originally amounted to
$100,000, and has recently been invested in United States 3% stock.

The condition and ulterior destiny of the Indian tribes within the
limits of some of our States have become objects of much interest and
importance. It has long been the policy of Government to introduce among
them the arts of civilization, in the hope of gradually reclaiming them
from a wandering life. This policy has, however, been coupled with
another wholly incompatible with its success. Professing a desire to
civilize and settle them, we have at the same time lost no opportunity
to purchase their lands and thrust them farther into the wilderness. By
this means they have not only been kept in a wandering state, but been
led to look upon us as unjust and indifferent to their fate. Thus,
though lavish in its expenditures upon the subject, Government has
constantly defeated its own policy, and the Indians in general, receding
farther and farther to the west, have retained their savage habits. A
portion, however, of the Southern tribes, having mingled much with the
whites and made some progress in the arts of civilized life, have lately
attempted to erect an independent government within the limits of
Georgia and Alabama. These States, claiming to be the only sovereigns
within their territories, extended their laws over the Indians, which
induced the latter to call upon the United States for protection.

Under these circumstances the question presented was whether the General
Government had a right to sustain those people in their pretensions. The
Constitution declares that "no new State shall be formed or erected
within the jurisdiction of any other State" without the consent of its
legislature. If the General Government is not permitted to tolerate the
erection of a confederate State within the territory of one of the
members of this Union against her consent, much less could it allow a
foreign and independent government to establish itself there.

Georgia became a member of the Confederacy which eventuated in our
Federal Union as a sovereign State, always asserting her claim to
certain limits, which, having been originally defined in her colonial
charter and subsequently recognized in the treaty of peace, she has ever
since continued to enjoy, except as they have been circumscribed by her
own voluntary transfer of a portion of her territory to the United
States in the articles of cession of 1802. Alabama was admitted into the
Union on the same footing with the original States, with boundaries
which were prescribed by Congress.

There is no constitutional, conventional, or legal provision which
allows them less power over the Indians within their borders than is
possessed by Maine or New York. Would the people of Maine permit the
Penobscot tribe to erect an independent government within their State?
And unless they did would it not be the duty of the General Government
to support them in resisting such a measure? Would the people of New
York permit each remnant of the six Nations within her borders to
declare itself an independent people under the protection of the United
States? Could the Indians establish a separate republic on each of their
reservations in Ohio? And if they were so disposed would it be the duty
of this Government to protect them in the attempt? If the principle
involved in the obvious answer to these questions be abandoned, it will
follow that the objects of this Government are reversed, and that it has
become a part of its duty to aid in destroying the States which it was
established to protect.

Actuated by this view of the subject, I informed the Indians inhabiting
parts of Georgia and Alabama that their attempt to establish an
independent government would not be countenanced by the Executive of the
United States, and advised them to emigrate beyond the Mississippi or
submit to the laws of those States.

Our conduct toward these people is deeply interesting to our national
character. Their present condition, contrasted with what they once were,
makes a most powerful appeal to our sympathies. Our ancestors found them
the uncontrolled possessors of these vast regions. By persuasion and
force they have been made to retire from river to river and from
mountain to mountain, until some of the tribes have become extinct and
others have left but remnants to preserve for a while their once
terrible names. Surrounded by the whites with their arts of
civilization, which by destroying the resources of the savage doom him
to weakness and decay, the fate of the Mohegan, the Narragansett, and
the Delaware is fast over-taking the Choctaw, the Cherokee, and the
Creek. That this fate surely awaits them if they remain within the
limits of the States does not admit of a doubt. Humanity and national
honor demand that every effort should be made to avert so great a
calamity. It is too late to inquire whether it was just in the United
States to include them and their territory within the bounds of new
States, whose limits they could control. That step can not be retraced.
A State can not be dismembered by Congress or restricted in the exercise
of her constitutional power. But the people of those States and of every
State, actuated by feelings of justice and a regard for our national
honor, submit to you the interesting question whether something can not
be done, consistently with the rights of the States, to preserve this
much-injured race.  As a means of effecting this end I suggest for your
consideration the propriety of setting apart an ample district west of
the Mississippi, and without the limits of any State or Territory now
formed, to be guaranteed to the Indian tribes as long as they shall
occupy it, each tribe having a distinct control over the portion
designated for its use. There they may be secured in the enjoyment of
governments of their own choice, subject to no other control from the
United States than such as may be necessary to preserve peace on the
frontier and between the several tribes. There the benevolent may
endeavor to teach them the arts of civilization, and, by promoting union
and harmony among them, to raise up an interesting commonwealth,
destined to perpetuate the race and to attest the humanity and justice
of this Government.

This emigration should be voluntary, for it would be as cruel as unjust
to compel the aborigines to abandon the graves of their fathers and seek
a home in a distant land. But they should be distinctly informed that if
they remain within the limits of the States they must be subject to
their laws. In return for their obedience as individuals they will
without doubt be protected in the enjoyment of those possessions which
they have improved by their industry. But it seems to me visionary to
suppose that in this state of things claims can be allowed on tracts of
country on which they have neither dwelt nor made improvements, merely
because they have seen them from the mountain or passed them in the
chase. Submitting to the laws of the States, and receiving, like other
citizens, protection in their persons and property, they will ere long
become merged in the mass of our population.

The accompanying report of the Secretary of the Navy will make you
acquainted with the condition and useful employment of that branch of
our service during the present year. Constituting as it does the best
standing security of this country against foreign aggression, it claims
the especial attention of Government. In this spirit the measures which
since the termination of the last war have been in operation for its
gradual enlargement were adopted, and it should continue to be cherished
as the off-spring of our national experience. It will be seen, however,
that not withstanding the great solicitude which has been manifested for
the perfect organization of this arm and the liberality of the
appropriations which that solicitude has suggested, this object has in
many important respects not been secured.

In time of peace we have need of no more ships of war than are requisite
to the protection of our commerce. Those not wanted for this object must
lay in the harbors, where without proper covering they rapidly decay,
and even under the best precautions for their preservation must soon
become useless. Such is already the case with many of our finest
vessels, which, though unfinished, will now require immense sums of
money to be restored to the condition in which they were when committed
to their proper element.

On this subject there can be but little doubt that our best policy would
be to discontinue the building of ships of the first and second class,
and look rather to the possession of ample materials, prepared for the
emergencies of war, than to the number of vessels which we can float in
a season of peace, as the index of our naval power. Judicious deposits
in navy yards of timber and other materials, fashioned under the hands
of skillful work-men and fitted for prompt application to their various
purposes, would enable us at all times to construct vessels as fast as
they can be manned, and save the heavy expense of repairs, except to
such vessels as must be employed in guarding our commerce.

The proper points for the establishment of these yards are indicated
with so much force in the report of the Navy Board that in recommending
it to your attention I deem it unnecessary to do more than express my
hearty concurrence in their views. The yard in this District, being
already furnished with most of the machinery necessary for ship
building, will be competent to the supply of the two selected by the
Board as the best for the concentration of materials, and, from the
facility and certainty of communication between them, it will be useless
to incur at those depots the expense of similar machinery, especially
that used in preparing the usual metallic and wooden furniture of
vessels.

Another improvement would be effected by dispensing altogether with the
Navy Board as now constituted, and substituting in its stead bureaux
similar to those already existing in the War Department. Each member of
the Board, transferred to the head of a separate bureau charged with
specific duties, would feel in its highest degree that wholesome
responsibility which can not be divided without a far more than
proportionate diminution of its force. Their valuable services would
become still more so when separately appropriated to distinct portions
of the great interests of the Navy, to the prosperity of which each
would be impelled to devote himself by the strongest motives. Under such
an arrangement every branch of this important service would assume a
more simple and precise character, its efficiency would be increased,
and scrupulous economy in the expenditure of public money promoted.

I would also recommend that the Marine Corps be merged in the artillery
or infantry, as the best mode of curing the many defects in its
organization. But little exceeding in number any of the regiments of
infantry, that corps has, besides its lieutenant-colonel commandant,
five brevet lieutenant-colonels, who receive the full pay and emoluments
of their brevet rank, without rendering proportionate service. Details
for marine service could as well be made from the artillery or infantry,
there being no peculiar training requisite for it.

With these improvements, and such others as zealous watchfulness and
mature consideration may suggest, there can be little doubt that under
an energetic administration of its affairs the Navy may soon be made
every thing that the nation wishes it to be. Its efficiency in the
suppression of piracy in the West India seas, and wherever its squadrons
have been employed in securing the interests of the country, will appear
from the report of the Secretary, to which I refer you for other
interesting details. Among these I would bespeak the attention of
Congress for the views presented in relation to the inequality between
the Army and Navy as to the pay of officers. No such inequality should
prevail between these brave defenders of their country, and where it
does exist it is submitted to Congress whether it ought not to be
rectified.

The report of the Post Master General is referred to as exhibiting a
highly satisfactory administration of that Department. Abuses have been
reformed, increased expedition in the transportation of the mail
secured, and its revenue much improved. In a political point of view
this Department is chiefly important as affording the means of diffusing
knowledge. It is to the body politic what the veins and arteries are to
the natural--conveying rapidly and regularly to the remotest parts of
the system correct information of the operations of the Government, and
bringing back to it the wishes and feelings of the people. Through its
agency we have secured to ourselves the full enjoyment of the blessings
of a free press.

In this general survey of our affairs a subject of high importance
presents itself in the present organization of the judiciary. An uniform
operation of the Federal Government in the different States is certainly
desirable, and existing as they do in the Union on the basis of perfect
equality, each State has a right to expect that the benefits conferred
on the citizens of others should be extended to hers. The judicial
system of the United States exists in all its efficiency in only fifteen
members of the Union; to three others the circuit courts, which
constitute an important part of that system, have been imperfectly
extended, and to the remaining six altogether denied. The effect has
been to withhold from the inhabitants of the latter the advantages
afforded (by the Supreme Court) to their fellow citizens in other States
in the whole extent of the criminal and much of the civil authority of
the Federal judiciary. That this state of things ought to be remedied,
if it can be done consistently with the public welfare, is not to be
doubted. Neither is it to be disguised that the organization of our
judicial system is at once a difficult and delicate task. To extend the
circuit courts equally throughout the different parts of the Union, and
at the same time to avoid such a multiplication of members as would
encumber the supreme appellate tribunal, is the object desired. Perhaps
it might be accomplished by dividing the circuit judges into two
classes, and providing that the Supreme Court should be held by these
classes alternately, the Chief Justice always presiding.

If an extension of the circuit court system to those States which do not
now enjoy its benefits should be determined upon, it would of course be
necessary to revise the present arrangement of the circuits; and even if
that system should not be enlarged, such a revision is recommended.

A provision for taking the census of the people of the United States
will, to insure the completion of that work within a convenient time,
claim the early attention of Congress.

The great and constant increase of business in the Department of State
forced itself at an early period upon the attention of the Executive.
Thirteen years ago it was, in Mr. Madison's last message to Congress,
made the subject of an earnest recommendation, which has been repeated
by both of his successors; and my comparatively limited experience has
satisfied me of its justness. It has arisen from many causes, not the
least of which is the large addition that has been made to the family of
independent nations and the proportionate extension of our foreign
relations. The remedy proposed was the establishment of a home
department--a measure which does not appear to have met the views of
Congress on account of its supposed tendency to increase, gradually and
imperceptibly, the already too strong bias of the federal system toward
the exercise of authority not delegated to it. I am not, therefore,
disposed to revive the recommendation, but am not the less impressed
with the importance of so organizing that Department that its Secretary
may devote more of his time to our foreign relations. Clearly satisfied
that the public good would be promoted by some suitable provision on the
subject, I respectfully invite your attention to it.

The charter of the Bank of the United States expires in 1836, and its
stock holders will most probably apply for a renewal of their
privileges. In order to avoid the evils resulting from precipitancy in a
measure involving such important principles and such deep pecuniary
interests, I feel that I can not, in justice to the parties interested,
too soon present it to the deliberate consideration of the Legislature
and the people. Both the constitutionality and the expediency of the law
creating this bank are well questioned by a large portion of our fellow
citizens, and it must be admitted by all that it has failed in the great
end of establishing an uniform and sound currency.

Under these circumstances, if such an institution is deemed essential to
the fiscal operations of the Government, I submit to the wisdom of the
Legislature whether a national one, founded upon the credit of the
Government and its revenues, might not be devised which would avoid all
constitutional difficulties and at the same time secure all the
advantages to the Government and country that were expected to result
from the present bank.

I can not close this communication without bringing to your view the
just claim of the representatives of Commodore Decatur, his officers and
crew, arising from the recapture of the frigate Philadelphia under the
heavy batteries of Tripoli. Although sensible, as a general rule, of the
impropriety of Executive interference under a Government like ours,
where every individual enjoys the right of directly petitioning
Congress, yet, viewing this case as one of very peculiar character, I
deem it my duty to recommend it to your favorable consideration. Besides
the justice of this claim, as corresponding to those which have been
since recognized and satisfied, it is the fruit of a deed of patriotic
and chivalrous daring which infused life and confidence into our infant
Navy and contributed as much as any exploit in its history to elevate
our national character. Public gratitude, therefore, stamps her seal
upon it, and the meed should not be withheld which may here after
operate as a stimulus to our gallant tars.

I now commend you, fellow citizens, to the guidance of Almighty God,
with a full reliance on His merciful providence for the maintenance of
our free institutions, and with an earnest supplication that what ever
errors it may be my lot to commit in discharging the arduous duties
which have devolved on me will find a remedy in the harmony and wisdom
of your counsels.

***

State of the Union Address
Andrew Jackson
December 6, 1830

Fellow Citizens of the Senate and of the House of Representatives:

The pleasure I have in congratulating you upon your return to your
constitutional duties is much heightened by the satisfaction which the
condition of our beloved country at this period justly inspires. The
beneficent Author of All Good has granted to us during the present year
health, peace, and plenty, and numerous causes for joy in the wonderful
success which attends the progress of our free institutions.

With a population unparalleled in its increase, and possessing a
character which combines the hardihood of enterprise with the
considerateness of wisdom, we see in every section of our happy country
a steady improvement in the means of social intercourse, and
correspondent effects upon the genius and laws of our extended Republic.

The apparent exceptions to the harmony of the prospect are to be
referred rather to inevitable diversities in the various interests which
enter into the composition of so extensive a whole than any want of
attachment to the Union--interests whose collisions serve only in the
end to foster the spirit of conciliation and patriotism so essential to
the preservation of that Union which I most devoutly hope is destined to
prove imperishable.

In the midst of these blessings we have recently witnessed changes in
the conditions of other nations which may in their consequences call for
the utmost vigilance, wisdom, and unanimity in our councils, and the
exercise of all the moderation and patriotism of our people.

The important modifications of their Government, effected with so much
courage and wisdom by the people of France, afford a happy presage of
their future course, and have naturally elicited from the kindred
feelings of this nation that spontaneous and universal burst of applause
in which you have participated. In congratulating you, my fellow
citizens, upon an event so auspicious to the dearest interests of
man-kind I do no more than respond to the voice of my country, without
transcending in the slightest degree that salutary maxim of the
illustrious Washington which enjoins an abstinence from all interference
with the internal affairs of other nations. From a people exercising in
the most unlimited degree the right of self-government, and enjoying, as
derived from this proud characteristic, under the favor of Heaven, much
of the happiness with which they are blessed; a people who can point in
triumph to their free institutions and challenge comparison with the
fruits they bear, as well as with the moderation, intelligence, and
energy with which they are administered-- from such a people the deepest
sympathy was to be expected in a struggle for the sacred principles of
liberty, conducted in a spirit every way worthy of the cause, and
crowned by a heroic moderation which has disarmed revolution of its
terrors. Not withstanding the strong assurances which the man whom we so
sincerely love and justly admire has given to the world of the high
character of the present King of the French, and which if sustained to
the end will secure to him the proud appellation of Patriot King, it is
not in his success, but in that of the great principle which has borne
him to the throne--the paramount authority of the public will--that the
American people rejoice.

I am happy to inform you that the anticipations which were indulged at
the date of my last communication on the subject of our foreign affairs
have been fully realized in several important particulars.

An arrangement has been effected with Great Britain in relation to the
trade between the United States and her West India and North American
colonies which has settled a question that has for years afforded matter
for contention and almost uninterrupted discussion, and has been the
subject of no less than six negotiations, in a manner which promises
results highly favorable to the parties.

The abstract right of Great Britain to monopolize the trade with her
colonies or to exclude us from a participation therein has never been
denied by the United States. But we have contended, and with reason,
that if at any time Great Britain may desire the productions of this
country as necessary to her colonies they must be received upon
principles of just reciprocity, and, further, that it is making an
invidious and unfriendly distinction to open her colonial ports to the
vessels of other nations and close them against those of the United
States.

Antecedently to 1794 a portion of our productions was admitted into the
colonial islands of Great Britain by particular concessions, limited to
the term of one year, but renewed from year to year. In the
transportation of these productions, however, our vessels were not
allowed to engage, this being a privilege reserved to British shipping,
by which alone our produce could be taken to the islands and theirs
brought to us in return. From Newfoundland and her continental
possessions all our productions, as well as our vessels, were excluded,
with occasional relaxations, by which, in seasons of distress, the
former were admitted in British bottoms.

By the treaty of 1794 she offered to concede to us for a limited time
the right of carrying to her West India possessions in our vessels not
exceeding 70 tons burthen, and upon the same terms as British vessels,
any productions of the United States which British vessels might import
therefrom. But this privilege was coupled with conditions which are
supposed to have led to its rejection by the Senate; that is, that
American vessels should land their return cargoes in the United States
only, and, moreover, that they should during the continuance of the
privilege be precluded from carrying molasses, sugar, coffee, cocoa, or
cotton either from those islands or from the United States to any other
part of the world. Great Britain readily consented to expunge this
article from the treaty, and subsequent attempts to arrange the terms of
the trade either by treaty stipulations or concerted legislation have
failed, it has been successively suspended and allowed according to the
varying legislation of the parties.

The following are the prominent points which have in later years
separated the two Governments: Besides a restriction whereby all
importations into her colonies in American vessels are confined to our
own products carried hence, a restriction to which it does not appear
that we have ever objected, a leading object on the part of Great
Britain has been to prevent us from becoming the carriers of British
West India commodities to any other country than our own. On the part of
the United States it has been contended, first, that the subject should
be regulated by treaty stipulation in preference to separate
legislation; second, that our productions, when imported into the
colonies in question, should not be subject to higher duties than the
productions of the mother country or of her other colonial possessions,
and, 3rd, that our vessels should be allowed to participate in the
circuitous trade between the United States and different parts of the
British dominions.

The first point, after having been for a long time strenuously insisted
upon by Great Britain, was given up by the act of Parliament of July,
1825, all vessels suffered to trade with the colonies being permitted to
clear from thence with any articles which British vessels might export
and proceed to any part of the world, Great Britain and her dependencies
alone excepted. On our part each of the above points had in succession
been explicitly abandoned in negotiations preceding that of which the
result is now announced.

This arrangement secures to the United States every advantage asked by
them, and which the state of the negotiation allowed us to insist upon.
The trade will be placed upon a footing decidedly more favorable to this
country than any on which it ever stood, and our commerce and navigation
will enjoy in the colonial ports of Great Britain every privilege
allowed to other nations.

That the prosperity of the country so far as it depends on this trade
will be greatly promoted by the new arrangement there can be no doubt.
Independently of the more obvious advantages of an open and direct
intercourse, its establishment will be attended with other consequences
of a higher value. That which has been carried on since the mutual
interdict under all the expense and inconvenience unavoidably incident
to it would have been insupportably onerous had it not been in a great
degree lightened by concerted evasions in the mode of making the
transshipments at what are called the neutral ports. These indirections
are inconsistent with the dignity of nations that have so many motives
not only to cherish feelings of mutual friendship, but to maintain such
relations as will stimulate their respective citizens and subjects to
efforts of direct, open, and honorable competition only, and preserve
them from the influence of seductive and vitiating circumstances.

When your preliminary interposition was asked at the close of the last
session, a copy of the instructions under which Mr. McLane has acted,
together with the communications which had at that time passed between
him and the British Government, was laid before you. Although there has
not been any thing in the acts of the two Governments which requires
secrecy, it was thought most proper in the then state of the negotiation
to make that communication a confidential one. So soon, however, as the
evidence of execution on the part of Great Britain is received the whole
matter shall be laid before you, when it will be seen that the
apprehension which appears to have suggested one of the provisions of
the act passed at your last session, that the restoration of the trade
in question might be connected with other subjects and was sought to be
obtained at the sacrifice of the public interest in other particulars,
was wholly unfounded, and that the change which has taken place in the
views of the British Government has been induced by considerations as
honorable to both parties as I trust the result will prove beneficial.

This desirable result was, it will be seen, greatly promoted by the
liberal and confiding provisions of the act of Congress of the last
session, by which our ports were upon the reception and annunciation by
the President of the required assurance on the part of Great Britain
forthwith opened to her vessels before the arrangement could be carried
into effect on her part, pursuing in this act of prospective legislation
a similar course to that adopted by Great Britain in abolishing, by her
act of Parliament in 1825, a restriction then existing and permitting
our vessels to clear from the colonies on their return voyages for any
foreign country whatever before British vessels had been relieved from
the restriction imposed by our law of returning directly from the United
States to the colonies, a restriction which she required and expected
that we should abolish. Upon each occasion a limited and temporary
advantage has been given to the opposite party, but an advantage of no
importance in comparison with the restoration of mutual confidence and
good feeling, and the ultimate establishment of the trade upon fair
principles.

It gives me unfeigned pleasure to assure you that this negotiation has
been throughout characterized by the most frank and friendly spirit on
the part of Great Britain, and concluded in a manner strongly indicative
of a sincere desire to cultivate the best relations with the United
States. To reciprocate this disposition to the fullest extent of my
ability is a duty which I shall deem it a privilege to discharge.

Although the result is itself the best commentary on the services
rendered to his country by our minister at the Court of St. James, it
would be doing violence to my feelings were I to dismiss the subject
without expressing the very high sense I entertain of the talent and
exertion which have been displayed by him on the occasion.

The injury to the commerce of the United States resulting from the
exclusion of our vessels from the Black Sea and the previous footing of
mere sufferance upon which even the limited trade enjoyed by us with
Turkey has hitherto been placed have for a long time been a source of
much solicitude to this Government, and several endeavors have been made
to obtain a better state of things. Sensible of the importance of the
object, I felt it my duty to leave no proper means unemployed to acquire
for our flag the same privileges that are enjoyed by the principal
powers of Europe. Commissioners were consequently appointed to open a
negotiation with the Sublime Porte. Not long after the member of the
commission who went directly from the United States had sailed, the
account of the treaty of Adrianople, by which one of the objects in view
was supposed to be secured, reached this country. The Black Sea was
understood to be opened to us. Under the supposition that this was the
case, the additional facilities to be derived from the establishment of
commercial regulations with the Porte were deemed of sufficient
importance to require a prosecution of the negotiation as originally
contemplated. It was therefore persevered in, and resulted in a treaty,
which will be forthwith laid before the Senate.

By its provisions a free passage is secured, without limitations of
time, to the vessels of the United States to and from the Black Sea,
including the navigation thereof, and our trade with Turkey is placed on
the footing of the most favored nation. The latter is an arrangement
wholly independent of the treaty of Adrianople, and the former derives
much value, not only from the increased security which under any
circumstances it would give to the right in question, but from the fact,
ascertained in the course of the negotiation, that by the construction
put upon that treaty by Turkey the article relating to the passage of
the Bosphorus is confined to nations having treaties with the Porte. The
most friendly feelings appear to be entertained by the Sultan, and an
enlightened disposition is evinced by him to foster the intercourse
between the two countries by the most liberal arrangements. This
disposition it will be our duty and interest to cherish.

Our relations with Russia are of the most stable character. Respect for
that Empire and confidence in its friendship toward the United States
have been so long entertained on our part and so carefully cherished by
the present Emperor and his illustrious predecessor as to have become
incorporated with the public sentiment of the United States. No means
will be left unemployed on my part to promote these salutary feelings
and those improvements of which the commercial intercourse between the
two countries is susceptible, and which have derived increased
importance from our treaty with the Sublime Porte.

I sincerely regret to inform you that our minister lately commissioned
to that Court, on whose distinguished talents and great experience in
public affairs I place great reliance, has been compelled by extreme
indisposition to exercise a privilege which, in consideration of the
extent to which his constitution had been impaired in the public
service, was committed to his discretion--of leaving temporarily his
post for the advantage of a more genial climate.

If, as it is to be hoped, the improvement of his health should be such
as to justify him in doing so, he will repair to St. Petersburg and
resume the discharge of his official duties. I have received the most
satisfactory assurances that in the mean time the public interest in
that quarter will be preserved from prejudice by the intercourse which
he will continue through the secretary of legation with the Russian
cabinet.

You are apprised, although the fact has not yet been officially
announced to the House of Representatives, that a treaty was in the
month of March last concluded between the United States, and Denmark, by
which $650 thousand are secured to our citizens as an indemnity for
spoliations upon their commerce in the years 1808, 1809, 1810, and 1811.
This treaty was sanctioned by the Senate at the close of its last
session, and it now becomes the duty of Congress to pass the necessary
laws for the organization of the board of commissioners to distribute
the indemnity among the claimants. It is an agreeable circumstance in
this adjustment that the terms are in conformity with the previously
ascertained views of the claimants themselves, thus removing all
pretense for a future agitation of the subject in any form.

The negotiations in regard to such points in our foreign relations as
remain to be adjusted have been actively prosecuted during the recess.
Material advances have been made, which are of a character to promise
favorable results. Our country, by the blessing of God, is not in a
situation to invite aggression, and it will be our fault if she ever
becomes so. Sincerely desirous to cultivate the most liberal and
friendly relations with all; ever ready to fulfill our engagements with
scrupulous fidelity; limiting our demands upon others to mere justice;
holding ourselves ever ready to do unto them as we would wish to be done
by, and avoiding even the appearance of undue partiality to any nation,
it appears to me impossible that a simple and sincere application of our
principles to our foreign relations can fail to place them ultimately
upon the footing on which it is our wish they should rest.

Of the points referred to, the most prominent are our claims upon France
for spoliations upon our commerce; similar claims upon Spain, together
with embarrassments in the commercial intercourse between the two
countries which ought to be removed; the conclusion of the treaty of
commerce and navigation with Mexico, which has been so long in suspense,
as well as the final settlement of limits between ourselves and that
Republic, and, finally, the arbitrament of the question between the
United States and Great Britain in regard to the north-eastern boundary.

The negotiation with France has been conducted by our minister with zeal
and ability, and in all respects to my entire satisfaction. Although the
prospect of a favorable termination was occasionally dimmed by counter
pretensions to which the United States could not assent, he yet had
strong hopes of being able to arrive at a satisfactory settlement with
the late Government. The negotiation has been renewed with the present
authorities, and, sensible of the general and lively confidence of our
citizens in the justice and magnanimity of regenerated France, I regret
the more not to have it in my power yet to announce the result so
confidently anticipated. No ground, however, inconsistent with this
expectation has yet been taken, and I do not allow myself to doubt that
justice will soon be done us. The amount of the claims, the length of
time they have remained unsatisfied, and their incontrovertible justice
make an earnest prosecution of them by this Government an urgent duty.
The illegality of the seizures and confiscations out of which they have
arisen is not disputed, and what ever distinctions may have heretofore
been set up in regard to the liability of the existing Government it is
quite clear that such considerations can not now be interposed.

The commercial intercourse between the two countries is susceptible of
highly advantageous improvements, but the sense of this injury has had,
and must continue to have, a very unfavorable influence upon them. From
its satisfactory adjustment not only a firm and cordial friendship, but
a progressive development of all their relations, may be expected. It
is, therefore, my earnest hope that this old and vexatious subject of
difference may be speedily removed.

I feel that my confidence in our appeal to the motives which should
govern a just and magnanimous nation is alike warranted by the character
of the French people and by the high voucher we possess for the enlarged
views and pure integrity of the Monarch who now presides over their
councils, and nothing shall be wanting on my part to meet any
manifestation of the spirit we anticipate in one of corresponding
frankness and liberality.

The subjects of difference with Spain have been brought to the view of
that Government by our minister there with much force and propriety, and
the strongest assurances have been received of their early and favorable
consideration.

The steps which remained to place the matter in controversy between
Great Britain and the United States fairly before the arbitrator have
all been taken in the same liberal and friendly spirit which
characterized those before announced. Recent events have doubtless
served to delay the decision, but our minister at the Court of the
distinguished arbitrator has been assured that it will be made within
the time contemplated by the treaty.

I am particularly gratified in being able to state that a decidedly
favorable, and, as I hope, lasting, change has been effected in our
relations with the neighboring Republic of Mexico. The unfortunate and
unfounded suspicions in regard to our disposition which it became my
painful duty to advert to on a former occasion have been, I believe,
entirely removed, and the Government of Mexico has been made to
understand the real character of the wishes and views of this in regard
to that country. The consequences is the establishment of friendship and
mutual confidence. Such are the assurances I have received, and I see no
cause to doubt their sincerity.

I had reason to expect the conclusion of a commercial treaty with Mexico
in season for communication on the present occasion. Circumstances which
are not explained, but which I am persuaded are not the result of an
indisposition on her part to enter into it, have produced the delay.

There was reason to fear in the course of the last summer that the
harmony of our relations might be disturbed by the acts of certain
claimants, under Mexican grants, of territory which had hitherto been
under our jurisdiction. The cooperation of the representative of Mexico
near this Government was asked on the occasion and was readily afforded.
Instructions and advice have been given to the governor of Arkansas and
the officers in command in the adjoining Mexican State by which it is
hoped the quiet of that frontier will be preserved until a final
settlement of the dividing line shall have removed all ground of
controversy.

The exchange of ratifications of the treaty concluded last year with
Austria has not yet taken place. The delay has been occasioned by the
non-arrival of the ratification of that Government within the time
prescribed by the treaty. Renewed authority has been asked for by the
representative of Austria, and in the mean time the rapidly increasing
trade and navigation between the two countries have been placed upon the
most liberal footing of our navigation acts.

Several alleged depredations have been recently committed on our
commerce by the national vessels of Portugal. They have been made the
subject of immediate remonstrance and reclamation. I am not yet
possessed of sufficient information to express a definitive opinion of
their character, but expect soon to receive it. No proper means shall be
omitted to obtain for our citizens all the redress to which they may
appear to be entitled.

Almost at the moment of the adjournment of your last session two
bills--the one entitled "An act for making appropriations for building
light houses, light boats, beacons, and monuments, placing buoys, and
for improving harbors and directing surveys", and the other "An act to
authorize a subscription for stock in the Louisville and Portland Canal
Company"--were submitted for my approval. It was not possible within the
time allowed for me before the close of the session to give to these
bills the consideration which was due to their character and importance,
and I was compelled to retain them for that purpose. I now avail myself
of this early opportunity to return them to the Houses in which they
respectively originated with the reasons which, after mature
deliberation, compel me to withhold my approval.

The practice of defraying out of the Treasury of the United States the
expenses incurred by the establishment and support of light houses,
beacons, buoys, and public piers within the bays, inlets, harbors, and
ports of the United States, to render the navigation thereof safe and
easy, is coeval with the adoption of the Constitution, and has been
continued without interruption or dispute.

As our foreign commerce increased and was extended into the interior of
the country by the establishment of ports of entry and delivery upon our
navigable rivers the sphere of those expenditures received a
corresponding enlargement. Light houses, beacons, buoys, public piers,
and the removal of sand bars, sawyers, and other partial or temporary
impediments in the navigable rivers and harbors which were embraced in
the revenue districts from time to time established by law were
authorized upon the same principle and the expense defrayed in the same
manner. That these expenses have at times been extravagant and
disproportionate is very probable. The circumstances under which they
are incurred are well calculated to lead to such a result unless their
application is subjected to the closest scrutiny. The local advantages
arising from the disbursement of public money too frequently, it is to
be feared, invite appropriations for objects of this character that are
neither necessary nor useful.

The number of light house keepers is already very large, and the bill
before me proposes to add to it 51 more of various descriptions. From
representations upon the subject which are understood to be entitled to
respect I am induced to believe that there has not only been great
improvidence in the past expenditures of the Government upon these
objects, but that the security of navigation has in some instances been
diminished by the multiplication of light houses and consequent change
of lights upon the coast. It is in this as in other respects our duty to
avoid all unnecessary expense, as well as every increase of patronage
not called for by the public service.

But in the discharge of that duty in this particular it must not be
forgotten that in relation to our foreign commerce the burden and
benefit of protecting and accommodating it necessarily go together, and
must do so as long as the public revenue is drawn from the people
through the custom house. It is indisputable that whatever gives
facility and security to navigation cheapens imports and all who consume
them are alike interested in what ever produces this effect. If they
consume, they ought, as they now do, to pay; otherwise they do not pay.
The consumer in the most inland State derives the same advantage from
every necessary and prudent expenditure for the facility and security of
our foreign commerce and navigation that he does who resides in a
maritime State. Local expenditures have not of themselves a
corresponding operation.

From a bill making direct appropriations for such objects I should not
have withheld my assent. The one now returned does so in several
particulars, but it also contains appropriations for surveys of local
character, which I can not approve. It gives me satisfaction to find
that no serious inconvenience has arisen from withholding my approval
from this bill; nor will it, I trust, be cause of regret that an
opportunity will be thereby afforded for Congress to review its
provisions under circumstances better calculated for full investigation
than those under which it was passed.

In speaking of direct appropriations I mean not to include a practice
which has obtained to some extent, and to which I have in one instance,
in a different capacity, given my assent--that of subscribing to the
stock of private associations. Positive experience and a more thorough
consideration of the subject have convinced me of the impropriety as
well as inexpediency of such investments. All improvements effected by
the funds of the nation for general use should be open to the enjoyment
of all our fellow citizens, exempt from the payment of tolls or any
imposition of that character. The practice of thus mingling the concerns
of the Government with those of the States or of individuals is
inconsistent with the object of its institution and highly impolite. The
successful operation of the federal system can only be preserved by
confining it to the few and simple, but yet important, objects for which
it was designed.

A different practice, if allowed to progress, would ultimately change
the character of this Government by consolidating into one the General
and State Governments, which were intended to be kept for ever distinct.
I can not perceive how bills authorizing such subscriptions can be
otherwise regarded than as bills for revenue, and consequently subject
to the rule in that respect prescribed by the Constitution. If the
interest of the Government in private companies is subordinate to that
of individuals, the management and control of a portion of the public
funds is delegated to an authority unknown to the Constitution and
beyond the supervision of our constituents; if superior, its officers
and agents will be constantly exposed to imputations of favoritism and
oppression. Direct prejudice the public interest or an alienation of the
affections and respect of portions of the people may, therefore, in
addition to the general discredit resulting to the Government from
embarking with its constituents in pecuniary stipulations, be looked for
as the probable fruit of such associations. It is no answer to this
objection to say that the extent of consequences like these can not be
great from a limited and small number of investments, because experience
in other matters teaches us--and we are not at liberty to disregard its
admonitions--that unless an entire stop be put to them it will soon be
impossible to prevent their accumulation until they are spread over the
whole country and made to embrace many of the private and appropriate
concerns of individuals.

The power which the General Government would acquire within the several
States by becoming the principal stock-holder in corporations,
controlling every canal and each 60 or 100 miles of every important
road, and giving a proportionate vote in all their elections, is almost
inconceivable, and in my view dangerous to the liberties of the people.

This mode of aiding such works is also in its nature deceptive, and in
many cases conducive to improvidence in the administration of the
national funds. Appropriations will be obtained with much greater
facility and granted with less security to the public interest when the
measure is thus disguised than when definite and direct expenditures of
money are asked for. The interests of the nation would doubtless be
better served by avoiding all such indirect modes of aiding particular
objects. In a government like ours more especially should all public
acts be, as far as practicable, simple, undisguised, and intelligible,
that they may become fit subjects for the approbation to animadversion
of the people.

The bill authorizing a subscription to the Louisville and Portland Canal
affords a striking illustration of the difficulty of withholding
additional appropriations for the same object when the first erroneous
step has been taken by instituting a partnership between the Government
and private companies. It proposes a third subscription on the part of
the United States, when each preceding one was at the time regarded as
the extent of the aid which Government was to render to that work; and
the accompanying bill for light houses, etc., contains an appropriation
for a survey of the bed of the river, with a view to its improvement by
removing the obstruction which the canal is designed to avoid. This
improvement, if successful, would afford a free passage of the river and
render the canal entirely useless. To such improvidence is the course of
legislation subject in relation to internal improvements on local
matters, even with the best intentions on the part of Congress.

Although the motives which have influenced me in this matter may be
already sufficiently stated, I am, never the less, induced by its
importance to add a few observations of a general character.

In my objections to the bills authorizing subscriptions to the Maysville
and Rockville road companies I expressed my views fully in regard to the
power of Congress to construct roads and canals within a State of to
appropriate money for improvements of a local character. I at the same
time intimated me belief that the right to make appropriations for such
as were of a national character had been so generally acted upon and so
long acquiesced in by the Federal and State Governments and the
constituents of each as to justify its exercise on the ground of
continued and uninterrupted usage, but that it was, never the less,
highly expedient that appropriations even of that character should, with
the exception made at the time, be deferred until the national debt is
paid, and that in the mean while some general rule for the action of the
Government in that respect ought to be established.

These suggestions were not necessary to the decision of the question
then before me, and were, I readily admit, intended to awake the
attention and draw forth the opinion and observations of our
constituents upon a subject of the highest importance to their
interests, and one destined to exert a powerful influence upon the
future operations of our political system. I know of no tribunal to
which a public man in this country, in a case of doubt and difficulty,
can appeal with greater advantage or more propriety than the judgment of
the people; and although I must necessarily in the discharge of my
official duties be governed by the dictates of my own judgment, I have
no desire to conceal my anxious wish to conform as far as I can to the
views of those for whom I act.

All irregular expressions of public opinion are of necessity attended
with some doubt as to their accuracy, but making full allowances on that
account I can not, I think, deceive myself in believing that the acts
referred to, as well as the suggestions which I allowed myself to make
in relation to their bearing upon the future operations of the
Government, have been approved by the great body of the people. That
those whose immediate pecuniary interests are to be affected by proposed
expenditures should shrink from the application of a rule which prefers
their more general and remote interests to those which are personal and
immediate is to be expected. But even such objections must from the
nature of our population be but temporary in their duration, and if it
were otherwise our course should be the same, for the time is yet, I
hope, far distant when those intrusted with power to be exercised for
the good of the whole will consider it either honest or wise to purchase
local favors at the sacrifice of principle and general good.

So understanding public sentiment, and thoroughly satisfied that the
best interests of our common country imperiously require that the course
which I have recommended in this regard should be adopted, I have, upon
the most mature consideration, determined to pursue it.

It is due to candor, as well as to my own feelings, that I should
express the reluctance and anxiety which I must at all times experience
in exercising the undoubted right of the Executive to withhold his
assent from bills on other grounds than their constitutionality. That
this right should not be exercised on slight occasions all will admit.
It is only in matters of deep interest, when the principle involved may
be justly regarded as next in importance to infractions of the
Constitution itself, that such a step can be expected to meet with the
approbation of the people. Such an occasion do I conscientiously believe
the present to be.

In the discharge of this delicate and highly responsible duty I am
sustained by the reflection that the exercise of this power has been
deemed consistent with the obligation of official duty by several of my
predecessors, and by the persuasion, too, that what ever liberal
institutions may have to fear from the encroachments of Executive power,
which has been every where the cause of so much strife and bloody
contention, but little danger is to be apprehended from a precedent by
which that authority denies to itself the exercise of powers that bring
in their train influence and patronage of great extent, and thus
excludes the operation of personal interests, every where the bane of
official trust.

I derive, too, no small degree of satisfaction from the reflection that
if I have mistaken the interests and wishes of the people the
Constitution affords the means of soon redressing the error by selecting
for the place their favor has bestowed upon me a citizen whose opinions
may accord with their own. I trust, in the mean time, the interests of
the nation will be saved from prejudice by a rigid application of that
portion of the public funds which might otherwise be applied to
different objects to that highest of all our obligations, the payment of
the public debt, and an opportunity be afforded for the adoption of some
better rule for the operations of the Government in this matter than any
which has hitherto been acted upon.

Profoundly impressed with the importance of the subject, not merely as
relates to the general prosperity of the country, but to the safety of
the federal system, I can not avoid repeating my earnest hope that all
good citizens who take a proper interest in the success and harmony of
our admirable political institutions, and who are incapable of desiring
to convert an opposite state of things into means for the gratification
of personal ambition, will, laying aside minor considerations and
discarding local prejudices, unite their honest exertions to establish
some fixed general principle which shall be calculated to effect the
greatest extent of public good in regard to the subject of internal
improvement, and afford the least ground for sectional discontent.

The general grounds of my objection to local appropriations have been
heretofore expressed, and I shall endeavor to avoid a repetition of what
has been already urged--the importance of sustaining the State
sovereignties as far as is consistent with the rightful action of the
Federal Government, and of preserving the greatest attainable harmony
between them. I will now only add an expression of my conviction--a
conviction which every day's experience serves to confirm--that the
political creed which inculcates the pursuit of those great objects as a
paramount duty is the true faith, and one to which we are mainly
indebted for the present success of the entire system, and to which we
must alone look for its future stability.

That there are diversities in the interests of the different States
which compose this extensive Confederacy must be admitted. Those
diversities arising from situation, climate, population, and pursuits
are doubtless, as it is natural they should be, greatly exaggerated by
jealousies and that spirit of rivalry so inseparable from neighboring
communities. These circumstances make it the duty of those who are
intrusted with the management of its affairs to neutralize their effects
as far as practicable by making the beneficial operation of the Federal
Government as equal and equitable among the several States as can be
done consistently with the great ends of its institution.

It is only necessary to refer to undoubted facts to see how far the past
acts of the Government upon the subject under consideration have fallen
short of this object. The expenditures heretofore made for internal
improvements amount to upward of $5 millions, and have been distributed
in very unequal proportions amongst the States. The estimated expense of
works of which surveys have been made, together with that of others
projected and partially surveyed, amounts to more than $96 millions.

That such improvements, on account of particular circumstances, may be
more advantageously and beneficially made in some States than in others
is doubtless true, but that they are of a character which should prevent
an equitable distribution of the funds amongst the several States is not
to be conceded. The want of this equitable distribution can not fail to
prove a prolific source of irritation among the States.

We have it constantly before our eyes that professions of superior zeal
in the cause of internal improvement and a disposition to lavish the
public funds upon objects of this character are daily and earnestly put
forth by aspirants to power as constituting the highest claims to the
confidence of the people. Would it be strange, under such circumstances,
and in times of great excitement, that grants of this description should
find their motives in objects which may not accord with the public good?
Those who have not had occasion to see and regret the indication of a
sinister influence in these matters in past times have been more
fortunate than myself in their observation of the course of public
affairs. If to these evils be added the combinations and angry
contentions to which such a course of things gives rise, with their
baleful influences upon the legislation of Congress touching the leading
and appropriate duties of the Federal Government, it was but doing
justice to the character of our people to expect the severe condemnation
of the past which the recent exhibitions of public sentiment has
evinced.

Nothing short of a radical change in the action of the Government upon
the subject can, in my opinion, remedy the evil. If, as it would be
natural to expect, the States which have been least favored in past
appropriations should insist on being redressed in those here after to
be made, at the expense of the States which have so largely and
disproportionately participated, we have, as matters now stand, but
little security that the attempt would do more than change the
inequality from one quarter to another.

Thus viewing the subject, I have heretofore felt it my duty to recommend
the adoption of some plan for the distribution of the surplus funds,
which may at any time remain in the Treasury after the national debt
shall have been paid, among the States, in proportion to the number of
their Representatives, to be applied by them to objects of internal
improvement.

Although this plan has met with favor in some portions of the Union, it
has also elicited objections which merit deliberate consideration. A
brief notice of these objections here will not, therefore, I trust, be
regarded as out of place.

They rest, as far as they have come to my knowledge, on the following
grounds: first, an objection to the ration of distribution; second, an
apprehension that the existence of such a regulation would produce
improvident and oppressive taxation to raise the funds for distribution;
3rd, that the mode proposed would lead to the construction of works of a
local nature, to the exclusion of such as are general and as would
consequently be of a more useful character; and, last, that it would
create a discreditable and injurious dependence on the part of the State
governments upon the Federal power.

Of those who object to the ration of representatives as the basis of
distribution, some insist that the importations of the respective States
would constitute one that would be more equitable; and others again,
that the extent of their respective territories would furnish a standard
which would be more expedient and sufficiently equitable. The ration of
representation presented itself to my mind, and it still does, as one of
obvious equity, because of its being the ratio of contribution, whether
the funds to be distributed be derived from the customs or from direct
taxation. It does not follow, however, that its adoption is
indispensable to the establishment of the system proposed. There may be
considerations appertaining to the subject which would render a
departure, to some extent, from the rule of contribution proper. Nor is
it absolutely necessary that the basis of distribution be confined to
one ground. It may, if in the judgment of those whose right it is to fix
it it be deemed politic and just to give it that character, have regard
to several.

In my first message I stated it to be my opinion that "it is not
probably that any adjustment of the tariff upon principles satisfactory
to the people of the Union will until a remote period, if ever, leave
the Government without a considerable surplus in the Treasury beyond
what may be required for its current surplus". I have had no cause to
change that opinion, but much to confirm it. Should these expectations
be realized, a suitable fund would thus be produced for the plan under
consideration to operate upon, and if there be no such fund its adoption
will, in my opinion, work no injury to any interest; for I can not
assent to the justness of the apprehension that the establishment of the
proposed system would tend to the encouragement of improvident
legislation of the character supposed. What ever the proper authority in
the exercise of constitutional power shall at any time here after decide
to be for the general good will in that as in other respects deserve and
receive the acquiescence and support of the whole country, and we have
ample security that every abuse of power in that regard by agents of the
people will receive a speedy and effectual corrective at their hands.
The views which I take of the future, founded on the obvious and
increasing improvement of all classes of our fellow citizens in
intelligence and in public and private virtue, leave me without much
apprehension on that head.

I do not doubt that those who come after us will be as much alive as we
are to the obligation upon all the trustees of political power to exempt
those for whom they act from all unnecessary burthens, and as sensible
of the great truth that the resources of the nation beyond those
required for immediate and necessary purposes of Government can no where
be so well deposited as in the pockets of the people.

It may some times happen that the interests of particular States would
not be deemed to coincide with the general interest in relation to
improvements within such States. But if the danger to be apprehended
from this source is sufficient to require it, a discretion might be
reserved to Congress to direct to such improvements of a general
character as the States concerned might not be disposed to unite in, the
application of the quotas of those States, under the restriction of
confining to each State the expenditure of its appropriate quota. It
may, however, be assumed as a safe general rule that such improvements
as serve to increase the prosperity of the respective States in which
they are made, by giving new facilities to trade, and thereby augmenting
the wealth and comfort of their inhabitants, constitute the surest mode
of conferring permanent and substantial advantages upon the whole. The
strength as well as the true glory of the Confederacy is founded on the
prosperity and power of the several independent sovereignties of which
it is composed and the certainty with which they can be brought into
successful active cooperation through the agency of the Federal
Government.

It is, more over, within the knowledge of such as are at all conversant
with public affairs that schemes of internal improvement have from time
to time been proposed which, from their extent and seeming magnificence,
were readily regarded as of national concernment, but which upon fuller
consideration and further experience would now be rejected with great
unanimity.

That the plan under consideration would derive important advantages from
its certainty, and that the moneys set apart for these purposes would be
more judiciously applied and economically expended under the direction
of the State legislatures, in which every part of each State is
immediately represented, can not, I think, be doubted. In the new States
particularly, where a comparatively small population is scattered over
an extensive surface, and the representation in Congress consequently
very limited, it is natural to expect that the appropriations made by
the Federal Government would be more likely to be expended in the
vicinity of those numbers through whose immediate agency they were
obtained than if the funds were placed under the control of the
legislature, in which every county of the State has its own
representative. This supposition does not necessarily impugn the motives
of such Congressional representatives, nor is it so intended. We are all
sensible of the bias to which the strongest minds and purest hearts are,
under such circumstances, liable. In respect to the last objection--its
probable effect upon the dignity and independence of State
governments--it appears to me only necessary to state the case as it is,
and as it would be if the measure proposed were adopted, to show that
the operation is most likely to be the very reverse of that which the
objection supposes.

In the one case the State would receive its quota of the national
revenue for domestic use upon a fixed principle as a matter of right,
and from a fund to the creation of which it had itself contributed its
fair proportion. Surely there could be nothing derogatory in that. As
matters now stand the States themselves, in their sovereign character,
are not unfrequently petitioners at the bar of the Federal Legislature
for such allowances out of the National Treasury as it may comport with
their pleasure or sense of duty to bestow upon them. It can not require
argument to prove which of the two courses is most compatible with the
efficiency or respectability of the State governments.

But all these are matters for discussion and dispassionate
consideration. That the desired adjustment would be attended with
difficulty affords no reason why it should not be attempted. The
effective operation of such motives would have prevented the adoption of
the Constitution under which we have so long lived and under the benign
influence of which our beloved country has so signally prospered. The
framers of that sacred instrument had greater difficulties to overcome,
and they did overcome them. The patriotism of the people, directed by a
deep conviction of the importance of the Union, produced mutual
concession and reciprocal forbearance. Strict right was merged in a
spirit of compromise, and the result has consecrated their disinterested
devotion to the general weal. Unless the American people have
degenerated, the same result can be again effected when ever experience
points out the necessity of a resort to the same means to uphold the
fabric which their fathers have reared.

It is beyond the power of man to make a system of government like ours
or any other operate with precise equality upon States situated like
those which compose this Confederacy; nor is inequality always
injustice. Every State can not expect to shape the measures of the
General Government to suit its own particular interests. The causes
which prevent it are seated in the nature of things, and can not be
entirely counteracted by human means. Mutual forbearance becomes,
therefore, a duty obligatory upon all, and we may, I am confident, count
upon a cheerful compliance with this high injunction on the part of our
constituents. It is not to be supposed that they will object to make
such comparatively inconsiderable sacrifices for the preservation of
rights and privileges which other less favored portions of the world
have in vain waded through seas of blood to acquire.

Our course is a safe one if it be but faithfully adhered to.
Acquiescence in the constitutionally expressed will of the majority, and
the exercise of that will in a spirit of moderation, justice, and
brotherly kindness, will constitute a cement which would for ever
preserve our Union. Those who cherish and inculcate sentiments like
these render a most essential service to their country, while those who
seek to weaken their influence are, how ever conscientious and praise
worthy their intentions, in effect its worst enemies.

If the intelligence and influence of the country, instead of laboring to
foment sectional prejudices, to be made subservient to party warfare,
were in good faith applied to the eradication of causes of local
discontent, by the improvement of our institutions and by facilitating
their adaptation to the condition of the times, this task would prove
one of less difficulty. May we not hope that the obvious interests of
our common country and the dictates of an enlightened patriotism will in
the end lead the public mind in that direction?

After all, the nature of the subject does not admit of a plan wholly
free from objection. That which has for some time been in operation is,
perhaps, the worst that could exist, and every advance that can be made
in its improvement is a matter eminently worthy of your most deliberate
attention.

It is very possible that one better calculated to effect the objects in
view may yet be devised. If so, it is to be hoped that those who
disapprove the past and dissent from what is proposed for the future
will feel it their duty to direct their attention to it, as they must be
sensible that unless some fixed rule for the action of the Federal
Government in this respect is established the course now attempted to be
arrested will be again resorted to. Any mode which is calculated to give
the greatest degree of effect and harmony to our legislation upon the
subject, which shall best serve to keep the movements of the Federal
Government within the sphere intended by those who modeled and those who
adopted it, which shall lead to the extinguishment of the national debt
in the shortest period and impose the lightest burthens upon our
constituents, shall receive from me a cordial and firm support.

Among the objects of great national concern I can not omit to press
again upon your attention that part of the Constitution which regulates
the election of President and Vice-President. The necessity for its
amendment is made so clear to my mind by observation of its evils and by
the many able discussions which they have elicited on the floor of
Congress and elsewhere that I should be wanting to my duty were I to
withhold another expression of my deep solicitude on the subject. Our
system fortunately contemplates a recurrence to first principles,
differing in this respect from all that have preceded it, and securing
it, I trust, equally against the decay and the commotions which have
marked the progress of other governments.

Our fellow citizens, too, who in proportion to their love of liberty
keep a steady eye upon the means of sustaining it, do not require to be
reminded of the duty they owe to themselves to remedy all essential
defects in so vital a part of their system. While they are sensible that
every evil attendant upon its operation is not necessarily indicative of
a bad organization, but may proceed from temporary causes, yet the
habitual presence, or even a single instance, of evils which can be
clearly traced to an organic defect will not, I trust, be over-looked
through a too scrupulous veneration for the work of their ancestors.

The Constitution was an experiment committed to the virtue and
intelligence of the great mass of our country-men, in whose ranks the
framers of it themselves were to perform the part of patriotic
observation and scrutiny, and if they have passed from the stage of
existence with an increased confidence in its general adaptation to our
condition we should learn from authority so high the duty of fortifying
the points in it which time proves to be exposed rather than be deterred
from approaching them by the suggestions of fear or the dictates of
misplaced reverence.

A provision which does not secure to the people a direct choice of their
Chief Magistrate, but has a tendency to defeat their will, presented to
my mind such an inconsistence with the general spirit of our
institutions that I was indeed to suggest for your consideration the
substitute which appeared to me at the same time the most likely to
correct the evil and to meet the views of our constituents. The most
mature reflection since has added strength to the belief that the best
interests of our country require the speedy adoption of some plan
calculated to effect this end. A contingency which some times places it
in the power of a single member of the House of Representatives to
decide an election of so high and solemn a character is unjust to the
people, and becomes when it occurs a source of embarrassment to the
individuals thus brought into power and a cause of distrust of the
representative body.

Liable as the Confederacy is, from its great extent, to parties founded
upon sectional interests, and to a corresponding multiplication of
candidates for the Presidency, the tendency of the constitutional
reference to the House of Representatives is to devolve the election
upon that body in almost every instance, and, what ever choice may then
be made among the candidates thus presented to them, to swell the
influence of particular interests to a degree inconsistent with the
general good. The consequences of this feature of the Constitution
appear far more threatening to the peace and integrity of the Union than
any which I can conceive as likely to result from the simple legislative
action of the Federal Government.

It was a leading object with the framers of the Constitution to keep as
separate as possible the action of the legislative and executive
branches of the Government. To secure this object nothing is more
essential than to preserve the former from all temptations of private
interest, and therefore so to direct the patronage of the latter as not
to permit such temptations to be offered. Experience abundantly
demonstrates that every precaution in this respect is a valuable
safe-guard of liberty, and one which my reflections upon the tendencies
of our system incline me to think should be made still stronger.

It was for this reason that, in connection with an amendment of the
Constitution removing all intermediate agency in the choice of the
President, I recommended some restrictions upon the re-eligibility of
that officer and upon the tenure of offices generally. The reason still
exists, and I renew the recommendation with an increased confidence that
its adoption will strengthen those checks by which the Constitution
designed to secure the independence of each department of the Government
and promote the healthful and equitable administration of all the trusts
which it has created.

The agent most likely to contravene this design of the Constitution is
the Chief Magistrate. In order, particularly, that his appointment may
as far as possible be placed beyond the reach of any improper
influences; in order that he may approach the solemn responsibilities of
the highest office in the gift of a free people uncommitted to any other
course than the strict line of constitutional duty, and that the
securities for this independence may be rendered as strong as the nature
of power and the weakness of its possessor will admit, I can not too
earnestly invite your attention to the propriety of promoting such an
amendment of the Constitution as will render him ineligible after one
term of service.

It gives me pleasure to announce to Congress that the benevolent policy
of the Government, steadily pursued for nearly 30 years, in relation to
the removal of the Indians beyond the white settlements is approaching
to a happy consummation. Two important tribes have accepted the
provision made for their removal at the last session of Congress, and it
is believed that their example will induce the remaining tribes also to
seek the same obvious advantages.

The consequences of a speedy removal will be important to the United
States, to individual States, and to the Indians themselves. The
pecuniary advantages which it promises to the Government are the least
of its recommendations. It puts an end to all possible danger of
collision between the authorities of the General and State Governments
on account of the Indians. It will place a dense and civilized
population in large tracts of country now occupied by a few savage
hunters. By opening the whole territory between Tennessee on the north
and Louisiana on the south to the settlement of the whites it will
incalculably strengthen the south west frontier and render the adjacent
States strong enough to repel future invasions without remote aid. It
will relieve the whole State of Mississippi and the western part of
Alabama of Indian occupancy, and enable those States to advance rapidly
in population, wealth, and power. It will separate the Indians from
immediate contact with settlements of whites; free them from the power
of the States; enable them to pursue happiness in their own way and
under their own rude institutions; will retard the progress of decay,
which is lessening their numbers, and perhaps cause them gradually,
under the protection of the Government and through the influence of good
counsels, to cast off their savage habits and become an interesting,
civilized, and Christian community. These consequences, some of them so
certain and the rest so probable, make the complete execution of the
plan sanctioned by Congress at their last session an object of much
solicitude.

Toward the aborigines of the country no one can indulge a more friendly
feeling than myself, or would go further in attempting to reclaim them
from their wandering habits and make them a happy, prosperous people. I
have endeavored to impress upon them my own solemn convictions of the
duties and powers of the General Government in relation to the State
authorities. For the justice of the laws passed by the States within the
scope of their reserved powers they are not responsible to this
Government. As individuals we may entertain and express our opinions of
their acts, but as a Government we have as little right to control them
as we have to prescribe laws for other nations.

With a full understanding of the subject, the Choctaw and the Chickasaw
tribes have with great unanimity determined to avail themselves of the
liberal offers presented by the act of Congress, and have agreed to
remove beyond the Mississippi River. Treaties have been made with them,
which in due season will be submitted for consideration. In negotiating
these treaties they were made to understand their true condition, and
they have preferred maintaining their independence in the Western
forests to submitting to the laws of the States in which they now
reside. These treaties, being probably the last which will ever be made
with them, are characterized by great liberality on the part of the
Government. They give the Indians a liberal sum in consideration of
their removal, and comfortable subsistence on their arrival at their new
homes. If it be their real interest to maintain a separate existence,
they will there be at liberty to do so without the inconveniences and
vexations to which they would unavoidably have been subject in Alabama
and Mississippi.

Humanity has often wept over the fate of the aborigines of this country,
and Philanthropy has been long busily employed in devising means to
avert it, but its progress has never for a moment been arrested, and one
by one have many powerful tribes disappeared from the earth. To follow
to the tomb the last of his race and to tread on the graves of extinct
nations excite melancholy reflections. But true philanthropy reconciles
the mind to these vicissitudes as it does to the extinction of one
generation to make room for another. In the monuments and fortifications
of an unknown people, spread over the extensive regions of the West, we
behold the memorials of a once powerful race, which was exterminated of
has disappeared to make room for the existing savage tribes. Nor is
there any thing in this which, upon a comprehensive view of the general
interests of the human race, is to be regretted. Philanthropy could not
wish to see this continent restored to the condition in which it was
found by our forefathers. What good man would prefer a country covered
with forests and ranged by a few thousand savages to our extensive
Republic, studded with cities, towns, and prosperous farms, embellished
with all the improvements which art can devise or industry execute,
occupied by more than 12,000,000 happy people, and filled with all the
blessings of liberty, civilization, and religion?

The present policy of the Government is but a continuation of the same
progressive change by a milder process. The tribes which occupied the
countries now constituting the Eastern States were annihilated or have
melted away to make room for the whites. The waves of population and
civilization are rolling to the westward, and we now propose to acquire
the countries occupied by the red men of the South and West by a fair
exchange, and, at the expense of the United States, to send them to a
land where their existence may be prolonged and perhaps made perpetual.

Doubtless it will be painful to leave the graves of their fathers; but
what do they more than our ancestors did or than our children are now
doing? To better their condition in an unknown land our forefathers left
all that was dear in earthly objects. Our children by thousands yearly
leave the land of their birth to seek new homes in distant regions. Does
Humanity weep at these painful separations from every thing, animate and
inanimate, with which the young heart has become entwined? Far from it.
It is rather a source of joy that our country affords scope where our
young population may range unconstrained in body or in mind, developing
the power and faculties of man in their highest perfection.

These remove hundreds and almost thousands of miles at their own
expense, purchase the lands they occupy, and support themselves at their
new homes from the moment of their arrival. Can it be cruel in this
Government when, by events which it can not control, the Indian is made
discontented in his ancient home to purchase his lands, to give him a
new and extensive territory, to pay the expense of his removal, and
support him a year in his new abode? How many thousands of our own
people would gladly embrace the opportunity of removing to the West on
such conditions! If the offers made to the Indians were extended to
them, they would be hailed with gratitude and joy.

And is it supposed that the wandering savage has a stronger attachment
to his home than the settled, civilized Christian? Is it more afflicting
to him to leave the graves of his fathers than it is to our brothers and
children? Rightly considered, the policy of the General Government
toward the red man is not only liberal, but generous. He is unwilling to
submit to the laws of the States and mingle with their population. To
save him from this alternative, or perhaps utter annihilation, the
General Government kindly offers him a new home, and proposes to pay the
whole expense of his removal and settlement.

In the consummation of a policy originating at an early period, and
steadily pursued by every Administration within the present century--so
just to the States and so generous to the Indians--the Executive feels
it has a right to expect the cooperation of Congress and of all good and
disinterested men. The States, moreover, have a right to demand it. It
was substantially a part of the compact which made them members of our
Confederacy. With Georgia there is an express contract; with the new
States an implied one of equal obligation. Why, in authorizing Ohio,
Indiana, Illinois, Missouri, Mississippi, and Alabama to form
constitutions and become separate States, did Congress include within
their limits extensive tracts of Indian lands, and, in some instances,
powerful Indian tribes? Was it not understood by both parties that the
power of the States was to be coextensive with their limits, and that
with all convenient dispatch the General Government should extinguish
the Indian title and remove every obstruction to the complete
jurisdiction of the State governments over the soil? Probably not one of
those States would have accepted a separate existence--certainly it
would never have been granted by Congress--had it been understood that
they were to be confined for ever to those small portions of their
nominal territory the Indian title to which had at the time been
extinguished.

It is, therefore, a duty which this Government owes to the new States to
extinguish as soon as possible the Indian title to all lands which
Congress themselves have included within their limits. When this is done
the duties of the General Government in relation to the States and the
Indians within their limits are at an end. The Indians may leave the
State or not, as they choose. The purchase of their lands does not alter
in the least their personal relations with the State government. No act
of the General Government has ever been deemed necessary to give the
States jurisdiction over the persons of the Indians. That they possess
by virtue of their sovereign power within their own limits in as full a
manner before as after the purchase of the Indian lands; nor can this
Government add to or diminish it.

May we not hope, therefore, that all good citizens, and none more
zealously than those who think the Indians oppressed by subjection to
the laws of the States, will unite in attempting to open the eyes of
those children of the forest to their true condition, and by a speedy
removal to relieve them from all the evils, real or imaginary, present
or prospective, with which they may be supposed to be threatened.

Among the numerous causes of congratulation the condition of our impost
revenue deserves special mention, in as much as it promises the means of
extinguishing the public debt sooner than was anticipated, and furnishes
a strong illustration of the practical effects of the present tariff
upon our commercial interests.

The object of the tariff is objected to by some as unconstitutional, and
it is considered by almost all as defective in many of its parts.

The power to impose duties on imports originally belonged to the several
States. The right to adjust those duties with a view to the
encouragement of domestic branches of industry is so completely
incidental to that power that it is difficult to suppose the existence
of the one without the other. The States have delegated their whole
authority over imports to the General Government without limitation or
restriction, saving the very inconsiderable reservation relating to
their inspection laws. This authority having thus entirely passed from
the States, the right to exercise it for the purpose of protection does
not exist in them, and consequently if it be not possessed by the
General Government it must be extinct. Our political system would thus
present the anomaly of a people stripped of the right to foster their
own industry and to counteract the most selfish and destructive policy
which might be adopted by foreign nations. This sure can not be the
case. This indispensable power thus surrendered by the States must be
within the scope of the authority on the subject expressly delegated to
Congress.

In this conclusion I am confirmed as well by the opinions of Presidents
Washington, Jefferson, Madison, and Monroe, who have each repeatedly
recommended the exercise of this right under the Constitution, as by the
uniform practice of Congress, the continued acquiescence of the States,
and the general understanding of the people.

The difficulties of a more expedient adjustment of the present tariff,
although great, are far from being insurmountable. Some are unwilling to
improve any of its parts because they would destroy the whole; others
fear to touch the objectionable parts lest those they approve should be
jeoparded. I am persuaded that the advocates of these conflicting views
do injustice to the American people and to their representatives. The
general interest is the interest of each, and my confidence is entire
that to insure the adoption of such modifications of the tariff as the
general interest requires it is only necessary that that interest should
be understood.

It is an infirmity of our nature to mingle our interests and prejudices
with the operation of our reasoning powers, and attribute to the objects
of our likes and dislikes qualities they do not possess and effects they
can not produce. The effects of the present tariff are doubtless
over-rated, both in its evils and in its advantages. By one class of
reasoners the reduced price of cotton and other agricultural products is
ascribed wholly to its influence, and by another the reduced price of
manufactured articles.

The probability is that neither opinion approaches the truth, and that
both are induced by that influence of interests and prejudices to which
I have referred. The decrease of prices extends throughout the
commercial world, embracing not only the raw material and the
manufactured article, but provisions and lands. The cause must therefore
be deeper and more pervading than the tariff of the United States. It
may in a measure be attributable to the increased value of the precious
metals, produced by a diminution of the supply and an increase in the
demand, while commerce has rapidly extended itself and population has
augmented. The supply of gold and silver, the general medium of
exchange, has been greatly interrupted by civil convulsions in the
countries from which they are principally drawn. A part of the effect,
too, is doubtless owing to an increase of operatives and improvements in
machinery. But on the whole it is questionable whether the reduction in
the price of lands, produce, and manufactures has been greater than the
appreciation of the standard of value.

While the chief object of duties should be revenue, they may be so
adjusted as to encourage manufactures. In this adjustment, however, it
is the duty of the Government to be guided by the general good. Objects
of national importance alone ought to be protected. Of these the
productions of our soil, our mines, and our work shops, essential to
national defense, occupy the first rank. What ever other species of
domestic industry, having the importance to which I have referred, may
be expected, after temporary protection, to compete with foreign labor
on equal terms merit the same attention in a subordinate degree.

The present tariff taxes some of the comforts of life unnecessarily
high; it undertakes to protect interests too local and minute to justify
a general exaction, and it also attempts to force some kinds of
manufactures for which the country is not ripe. Much relief will be
derived in some of these respects from the measures of your last
session.

The best as well as fairest mode of determining whether from any just
considerations a particular interest ought to receive protection would
be to submit the question singly for deliberation. If after due
examination of its merits, unconnected with extraneous
considerations--such as a desire to sustain a general system or to
purchase support for a different interest--it should enlist in its favor
a majority of the representatives of the people, there can be little
danger of wrong or injury in adjusting the tariff with reference to its
protective effect. If this obviously just principle were honestly
adhered to, the branches of industry which deserve protection would be
saved from the prejudice excited against them when that protection forms
part of a system by which portions of the country feel or conceive
themselves to be oppressed. What is incalculably more important, the
vital principle of our system--that principle which requires
acquiescence in the will of the majority--would be secure from the
discredit and danger to which it is exposed by the acts of majorities
founded not on identity of conviction, but on combinations of small
minorities entered into for the purpose of mutual assistance in measures
which, resting solely on their own merits, could never be carried.

I am well aware that this is a subject of so much delicacy, on account
of the extended interests in involves, as to require that it should be
touched with the utmost caution, and that while an abandonment of the
policy in which it originated--a policy coeval with our Government, and
pursued through successive Administrations--is neither to be expected or
desired, the people have a right to demand, and have demanded, that it
be so modified as to correct abuses and obviate injustice.

That our deliberations on this interesting subject should be
uninfluenced by those partisan conflicts that are incident to free
institutions is the fervent wish of my heart. To make this great
question, which unhappily so much divides and excites the public mind,
subservient to the short-sighted views of faction, must destroy all hope
of settling it satisfactorily to the great body of the people and for
the general interest. I can not, therefore, in taking leave of the
subject, too earnestly for my own feelings or the common good warn you
against the blighting consequences of such a course.

According to the estimates at the Treasury Department, the receipts in
the Treasury during the present year will amount to $24,161,018, which
will exceed by about $300,000 the estimate presented in the last annual
report of the Secretary of the Treasury. The total expenditure during
the year, exclusive of public debt, is estimated at $13,742,311, and the
payment on account of public debt for the same period will have been
$11,354,630, leaving a balance in the Treasury on January 1st, 1831 of
$4,819,781.

In connection with the condition of our finances, it affords me pleasure
to remark that judicious and efficient arrangements have been made by
the Treasury Department for securing the pecuniary responsibility of the
public officers and the more punctual payment of the public dues. The
Revenue Cutter Service has been organized and placed on a good footing,
and aided by an increase of inspectors at exposed points, and
regulations adopted under the act of May, 1830, for the inspection and
appraisement of merchandise, has produced much improvement in the
execution of the laws and more security against the commission of frauds
upon the revenue. Abuses in the allowances for fishing bounties have
also been corrected, and a material saving in that branch of the service
thereby effected. In addition to these improvements the system of
expenditure for sick sea men belonging to the merchant service has been
revised, and being rendered uniform and economical the benefits of the
fund applicable to this object have been usefully extended.

The prosperity of our country is also further evinced by the increased
revenue arising from the sale of public lands, as will appear from the
report of the Commissioner of the General Land Office and the documents
accompanying it, which are herewith transmitted. I beg leave to draw
your attention to this report, and to the propriety of making early
appropriations for the objects which it specifies.

Your attention is again invited to the subjects connected with that
portion of the public interests intrusted to the War Department. Some of
them were referred to in my former message, and they are presented in
detail in the report of the Secretary of War herewith submitted. I refer
you also to the report of that officer for a knowledge of the state of
the Army, fortifications, arsenals, and Indian affairs, all of which it
will be perceived have been guarded with zealous attention and care. It
is worthy of your consideration whether the armaments necessary for the
fortifications on our maritime frontier which are now or shortly will be
completed should not be in readiness sooner than the customary
appropriations will enable the Department to provide them. This
precaution seems to be due to the general system of fortification which
has been sanctioned by Congress, and is recommended by that maxim of
wisdom which tells us in peace to prepare for war.

I refer you to the report of the Secretary of the Navy for a highly
satisfactory account of the manner in which the concerns of that
Department have been conducted during the present year. Our position in
relation to the most powerful nations of the earth, and the present
condition of Europe, admonish us to cherish this arm of our national
defense with peculiar care. Separated by wide seas from all those
Governments whose power we might have reason to dread, we have nothing
to apprehend from attempts at conquest. It is chiefly attacks upon our
commerce and harrassing in-roads upon our coast against which we have to
guard. A naval force adequate to the protection of our commerce, always
afloat, with an accumulation of the means to give it a rapid extension
in case of need, furnishes the power by which all such aggressions may
be prevented or repelled. The attention of the Government has therefore
been recently directed more to preserving the public vessels already
built and providing materials to be placed in depot for future use than
to increasing their number. With the aid of Congress, in a few years the
Government will be prepared in case of emergency to put afloat a
powerful navy of new ships almost as soon as old ones could be repaired.

The modifications in this part of the service suggested in my last
annual message, which are noticed more in detail in the report of the
Secretary of the Navy, are again recommended to your serious attention.

The report of the Post Master General in like manner exhibits a
satisfactory view of the important branch of the Government under his
charge. In addition to the benefits already secured by the operations of
the Post Office Department, considerable improvements within the present
year have been made by an increase in the accommodation afforded by
stage coaches, and in the frequency and celerity of the mail between
some of the most important points of the Union.

Under the late contracts improvements have been provided for the
southern section of the country, and at the same time an annual saving
made of upward of $72,000. Not with standing the excess of expenditure
beyond the current receipts for a few years past, necessarily incurred
in the fulfillment of existing contracts and in the additional expenses
between the periods of contracting to meet the demands created by the
rapid growth and extension of our flourishing country, yet the
satisfactory assurance is given that the future revenue of the
Department will be sufficient to meets its extensive engagements. The
system recently introduced that subjects its receipts and disbursements
to strict regulation has entirely fulfilled its designs. It gives full
assurance of the punctual transmission, as well as the security of the
funds of the Department. The efficiency and industry of its officers and
the ability and energy of contractors justify an increased confidence in
its continued prosperity.

The attention of Congress was called on a former occasion to the
necessity of such a modification in the office of Attorney General of
the United States as would render it more adequate to the wants of the
public service. This resulted in the establishment of the office of
Solicitor of the Treasury, and the earliest measures were taken to give
effect to the provisions of the law which authorized the appointment of
that officer and defined his duties. But it is not believed that this
provision, however useful in itself, is calculated to supersede the
necessity of extending the duties and powers of the Attorney General's
Office. On the contrary, I am convinced that the public interest would
be greatly promoted by giving to that officer the general
superintendence of the various law agents of the Government, and of all
law proceedings, whether civil or criminal, in which the United States
may be interested, allowing him at the same time such compensation as
would enable him to devote his undivided attention to the public
business. I think such a provision is alike due to the public and to the
officer.

Occasions of reference from the different Executive Departments to the
Attorney General are of frequent occurrence, and the prompt decision of
the questions so referred tends much to facilitate the dispatch of
business in those Departments. The report of the Secretary of the
Treasury hereto appended shows also a branch of the public service not
specifically intrusted to any officer which might be advantageously
committed to the Attorney General. But independently of those
considerations this office is now one of daily duty. It was originally
organized and its compensation fixed with a view to occasional service,
leaving to the incumbent time for the exercise of his profession in
private practice. The state of things which warranted such an
organization no longer exists. The frequent claims upon the services of
this officer would render his absence from the seat of Government in
professional attendance upon the courts injurious to the public service,
and the interests of the Government could not fail to be promoted by
charging him with the general superintendence of all its legal concerns.

Under a strong conviction of the justness of these suggestions, I
recommend it to Congress to make the necessary provisions for giving
effect to them, and to place the Attorney General in regard to
compensation on the same footing with the heads of the several Executive
Departments. To this officer might also be intrusted a cognizance of the
cases of insolvency in public debtors, especially if the views which I
submitted on this subject last year should meet the approbation of
Congress--to which I again solicit your attention.

Your attention is respectfully invited to the situation of the District
of Columbia. Placed by the Constitution under the exclusive jurisdiction
and control of Congress, this District is certainly entitled to a much
greater share of its consideration than it has yet received. There is a
want of uniformity in its laws, particularly in those of a penal
character, which increases the expense of their administration and
subjects the people to all the inconveniences which result from the
operation of different codes in so small a territory. On different sides
of the Potomac the same offense is punishable in unequal degrees, and
the peculiarities of many of the early laws of Maryland and Virginia
remain in force, not with standing their repugnance in some cases to the
improvements which have superseded them in those States.

Besides a remedy for these evils, which is loudly called for, it is
respectfully submitted whether a provision authorizing the election of a
delegate to represent the wants of the citizens of this District on the
floor of Congress is not due to them and to the character of our
Government. No principles of freedom, and there is none more important
than that which cultivates a proper relation between the governors and
the governed. Imperfect as this must be in this case, yet it is believed
that it would be greatly improved by a representation in Congress with
the same privileges that are allowed to the other Territories of the
United States.

The penitentiary is ready for the reception of convicts, and only awaits
the necessary legislation to put it into operation, as one object of
which I beg leave to recall your attention to the propriety of providing
suitable compensation for the officers charged with its inspection.

The importance of the principles involved in the inquiry whether it will
be proper to recharter the Bank of the United States requires that I
should again call the attention of Congress to the subject. Nothing has
occurred to lessen in any degree the dangers which many of our citizens
apprehend from that institution as at present organized. In the spirit
of improvement and compromise which distinguishes our country and its
institutions it becomes us to inquire whether it be not possible to
secure the advantages afforded by the present bank through the agency of
a Bank of the United States so modified in its principles and structures
as to obviate constitutional and other objections.

It is thought practicable to organize such a bank with the necessary
officers as a branch of the Treasury Department, based on the public and
individual deposits, without power to make loans or purchase property,
which shall remit the funds of the Government, and the expense of which
may be paid, if thought advisable, by allowing its officers to sell
bills of exchange to private individuals at a moderate premium. Not
being a corporate body, having no stock holders, debtors, or property,
and but few officers, it would not be obnoxious to the constitutional
objections which are urged against the present bank; and having no means
to operate on the hopes, fears, or interests of large masses of the
community, it would be shorn of the influence which makes that bank
formidable. The States would be strengthened by having in their hands
the means of furnishing the local paper currency through their own
banks, while the Bank of the United States, though issuing no paper,
would check the issues of the State banks by taking their notes in
deposit and for exchange only so long as they continue to be redeemed
with specie. In times of public emergency the capacities of such an
institution might be enlarged by legislative provisions.

These suggestions are made not so much as a recommendation as with a
view of calling the attention of Congress to the possible modifications
of a system which can not continue to exist in its present form without
occasional collisions with the local authorities and perpetual
apprehensions and discontent on the part of the States and the people.

In conclusion, fellow citizens, allow me to invoke in behalf of your
deliberations that spirit of conciliation and disinterestedness which is
the gift of patriotism. Under an over-ruling and merciful Providence the
agency of this spirit has thus far been signalized in the prosperity and
glory of our beloved country. May its influence be eternal.

***

State of the Union Address
Andrew Jackson
December 6, 1831

Fellow Citizens of the Senate and of the House of Representatives:

The representation of the people has been renewed for the 22nd time
since the Constitution they formed has been in force. For near half a
century the Chief Magistrates who have been successively chosen have
made their annual communications of the state of the nation to its
representatives. Generally these communications have been of the most
gratifying nature, testifying an advance in all the improvements of
social and all the securities of political life. But frequently and
justly as you have been called on to be grateful for the bounties of
Providence, at few periods have they been more abundantly or extensively
bestowed than at the present; rarely, if ever, have we had greater
reason to congratulate each other on the continued and increasing
prosperity of our beloved country.

Agriculture, the first and most important occupation of man, has
compensated the labors of the husband-man with plentiful crops of all
the varied products of our extensive country. Manufactures have been
established in which the funds of the capitalist find a profitable
investment, and which give employment and subsistence to a numerous and
increasing body of industrious and dexterous mechanics. The laborer is
rewarded by high wages in the construction of works of internal
improvement, which are extending with unprecedented rapidity. Science is
steadily penetrating the recesses of nature and disclosing her secrets,
while the ingenuity of free minds is subjecting the elements to the
power of man and making each new conquest auxiliary to his comfort. By
our mails, whose speed is regularly increased and whose routes are every
year extended, the communication of public intelligence and private
business is rendered frequent and safe; the intercourse between distant
cities, which it formerly required weeks to accomplish, is now effected
in a few days; and in the construction of rail roads and the application
of steam power we have a reasonable prospect that the extreme parts of
our country will be so much approximated and those most isolated by the
obstacles of nature rendered so accessible as to remove an apprehension
some times entertained that the great extent of the Union would endanger
its permanent existence.

If from the satisfactory view of our agriculture, manufactures, and
internal improvements we turn to the state of our navigation and trade
with foreign nations and between the States, we shall scarcely find less
cause for gratulation. A beneficent Providence has provided for their
exercise and encouragement an extensive coast, indented by capacious
bays, noble rivers, inland seas; with a country productive of every
material for ship building and every commodity for gainful commerce, and
filled with a population active, intelligent, well-informed, and
fearless of danger. These advantages are not neglected, and an impulse
has lately been given to commercial enterprise, which fills our ship
yards with new constructions, encourages all the arts and branches of
industry connected with them, crowds the wharves of our cities with
vessels, and covers the most distant seas with our canvas.

Let us be grateful for these blessings to the beneficent Being who has
conferred them, and who suffers us to indulge a reasonable hope of their
continuance and extension, while we neglect not the means by which they
may be preserved. If we may dare to judge of His future designs by the
manner in which His past favors have been bestowed, He has made our
national prosperity to depend on the preservation of our liberties, our
national force on our Federal Union, and our individual happiness on the
maintenance of our State rights and wise institutions. If we are
prosperous at home and respected abroad, it is because we are free,
united, industrious, and obedient to the laws. While we continue so we
shall by the blessing of Heaven go on in the happy career we have begun,
and which has brought us in the short period of our political existence
from a population of 3,000,000 to 13,000,000; from 13 separate colonies
to 24 united States; from weakness to strength; from a rank scarcely
marked in the scale of nations to a high place in their respect.

This last advantage is one that has resulted in a great degree from the
principles which have guided our intercourse with foreign powers since
we have assumed an equal station among them, and hence the annual
account which the Executive renders to the country of the manner in
which that branch of his duties has been fulfilled proves instructive
and salutary.

The pacific and wise policy of our Government kept us in a state of
neutrality during the wars that have at different periods since our
political existence been carried on by other powers; but this policy,
while it gave activity and extent to our commerce, exposed it in the
same proportion to injuries from the belligerent nations. Hence have
arisen claims of indemnity for those injuries. England, France, Spain,
Holland, Sweden, Denmark, Naples, and lately Portugal had all in a
greater or less degree infringed our neutral rights. Demands for
reparation were made upon all. They have had in all, and continue to
have in some, cases a leading influence on the nature of our relations
with the powers on whom they were made.

Of the claims upon England it is unnecessary to speak further than to
say that the state of things to which their prosecution and denial gave
rise has been succeeded by arrangements productive of mutual good
feeling and amicable relations between the two countries, which it is
hoped will not be interrupted. One of these arrangements is that
relating to the colonial trade which was communicated to Congress at the
last session; and although the short period during which it has been in
force will not enable me to form an accurate judgment of its operation,
there is every reason to believe that it will prove highly beneficial.
The trade thereby authorized has employed to September 30th, 1831 upward
of 30 thousand tons of American and 15 thousand tons of foreign shipping
in the outward voyages, and in the inward nearly an equal amount of
American and 20 thousand only of foreign tonnage. Advantages, too, have
resulted to our agricultural interests from the state of the trade
between Canada and our Territories and States bordering or the St.
Lawrence and the Lakes which may prove more than equivalent to the loss
sustained by the discrimination made to favor the trade of the northern
colonies with the West Indies.

After our transition from the state of colonies to that of an
independent nation many points were found necessary to be settled
between us and Great Britain. Among them was the demarcation of
boundaries not described with sufficient precision in the treaty of
peace. Some of the lines that divide the States and Territories of the
United States from the British Provinces have been definitively fixed.

That, however, which separates us from the Provinces of Canada and New
Brunswick to the North and the East was still in dispute when I came
into office, but I found arrangements made for its settlement over which
I had no control. The commissioners who had been appointed under the
provisions of the treaty of Ghent having been unable to agree, a
convention was made with Great Britain by my immediate predecessor in
office, with the advice and consent of the Senate, by which it was
agreed "that the points of difference which have arisen in the
settlement of the boundary line between the American and British
dominions, as described in the 5th article of the treaty of Ghent, shall
be referred, as therein provided, to some friendly sovereign or State,
who shall be invited to investigate and make a decision upon such points
of difference"; and the King of the Netherlands having by the late
President and His Britannic Majesty been designated as such friendly
sovereign, it became my duty to carry with good faith the agreement so
made into full effect. To this end I caused all the measures to be taken
which were necessary to a full exposition of our case to the sovereign
arbiter, and nominated as minister plenipotentiary to his Court a
distinguished citizen of the State most interested in the question, and
who had been one of the agents previously employed for settling the
controversy.

On January 10th, 1831 His Majesty the King of the Netherlands delivered
to the plenipotentiaries of the United States and of Great Britain his
written opinion on the case referred to him. The papers in relation to
the subject will be communicated by a special message to the proper
branch of the Government with the perfect confidence that its wisdom
will adopt such measures as will secure an amicable settlement of the
controversy without infringing any constitutional right of the States
immediately interested.

It affords me satisfaction to inform you that suggestions made by my
direction to the charge d'affaires of His Britannic Majesty to this
Government have had their desired effect in producing the release of
certain American citizens who were imprisoned for setting up the
authority of the State of Maine at a place in the disputed territory
under the actual jurisdiction of His Britannic Majesty. From this and
the assurances I have received of the desire of the local authorities to
avoid any cause of collision I have the best hopes that a good
understanding will be kept up until it is confirmed by the final
disposition of the subject.

The amicable relations which now subsist between the United States and
Great Britain, the increasing intercourse between their citizens, and
the rapid obliteration of unfriendly prejudices to which former events
naturally gave rise concurred to present this as a fit period for
renewing our endeavors to provide against the recurrence of causes of
irritation which in the event of war between Great Britain and any other
power would inevitably endanger our peace. Animated by the sincerest
desire to avoid such a state of things, and peacefully to secure under
all possible circumstances the rights and honor of the country, I have
given such instructions to the minister lately sent to the Court of
London as will evince that desire, and if met by a correspondent
disposition, which we can not doubt, will put an end to causes of
collision which, without advantage to either, tend to estrange from each
other two nations who have every motive to preserve not only peace, but
an intercourse of the most amicable nature.

In my message at the opening of the last session of Congress I expressed
a confident hope that the justice of our claims upon France, urged as
they were with perseverance and signal ability by our minister there,
would finally be acknowledged. This hope has been realized. A treaty has
been signed which will immediately be laid before the Senate for its
approbation, and which, containing stipulations that require legislative
acts, must have the concurrence of both houses before it can be carried
into effect.

By it the French Government engage to pay a sum which, if not quite
equal to that which may be found due to our citizens, will yet, it is
believed, under all circumstances, be deemed satisfactory by those
interested. The offer of a gross sum instead of the satisfaction of each
individual claim was accepted because the only alternatives were a
rigorous exaction of the whole amount stated to be due on each claim,
which might in some instances be exaggerated by design, in other
over-rated through error, and which, therefore, it would have been both
ungracious and unjust to have insisted on; or a settlement by a mixed
commission, to which the French negotiators were very averse, and which
experience in other cases had shewn to be dilatory and often wholly
inadequate to the end.

A comparatively small sum is stipulated on our part to go to the
extinction of all claims by French citizens on our Government, and a
reduction of duties on our cotton and their wines has been agreed on as
a consideration for the renunciation of an important claim for
commercial privileges under the construction they gave to the treaty for
the cession of Louisiana.

Should this treaty receive the proper sanction, a source of irritation
will be stopped that has for so many years in some degree alienated from
each other two nations who, from interest as well as the remembrance of
early associations, ought to cherish the most friendly relations; an
encouragement will be given for perseverance in the demands of justice
by this new proof that if steadily pursued they will be listened to, and
admonition will be offered to those powers, if any, which may be
inclined to evade them that they will never be abandoned; above all, a
just confidence will be inspired in our fellow citizens that their
Government will exert all the powers with which they have invested it in
support of their just claims upon foreign nations; at the same time that
the frank acknowledgment and provision for the payment of those which
were addressed to our equity, although unsupported by legal proof,
affords a practical illustration of our submission to the divine rule of
doing to others what we desire they should do unto us.

Sweden and Denmark having made compensation for the irregularities
committed by their vessels or in their ports to the perfect satisfaction
of the parties concerned, and having renewed the treaties of commerce
entered into with them, our political and commercial relations with
those powers continue to be on the most friendly footing.

With Spain our differences up to February 22d, 1819 were settled by the
treaty of Washington of that date, but at a subsequent period our
commerce with the States formerly colonies of Spain on the continent of
America was annoyed and frequently interrupted by her public and private
armed ships. They captured many of our vessels prosecuting a lawful
commerce and sold them and their cargoes, and at one time to our demands
for restoration and indemnity opposed the allegation that they were
taken in the violation of a blockade of all the ports of those States.
This blockade was declaratory only, and the inadequacy of the force to
maintain it was so manifest that this allegation was varied to a charge
of trade in contraband of war. This, in its turn, was also found
untenable, and the minister whom I sent with instructions to press for
the reparation that was due to our injured fellow citizens has
transmitted an answer to his demand by which the captures are declared
to have been legal, and are justified because the independence of the
States of America never having been acknowledged by Spain she had a
right to prohibit trade with them under her old colonial laws. This
ground of defense was contradictory, not only to those which had been
formerly alleged, but to the uniform practice and established laws of
nations, and had been abandoned by Spain herself in the convention which
granted indemnity to British subjects for captures made at the same
time, under the same circumstances, and for the same allegations with
those of which we complain.

I, however, indulge the hope that further reflection will lead to other
views, and feel confident that when His Catholic Majesty shall be
convinced of the justice of the claims his desire to preserve friendly
relations between the two countries, which it is my earnest endeavor to
maintain, will induce him to accede to our demand. I have therefore
dispatched a special messenger with instructions to our minister to
bring the case once more to his consideration, to the end that if (which
I can not bring myself to believe) the same decision (that can not but
be deemed an unfriendly denial of justice) should be persisted in the
matter may before your adjournment be laid before you, the
constitutional judges of what is proper to be done when negotiation for
redress of injury fails.

The conclusion of a treaty for indemnity with France seemed to present a
favorable opportunity to renew our claims of a similar nature on other
powers, and particularly in the case of those upon Naples, more
especially as in the course of former negotiations with that power our
failure to induce France to render us justice was used as an argument
against us. The desires of the merchants, who were the principal
sufferers, have therefore been acceded to, and a mission has been
instituted for the special purpose of obtaining for them a reparation
already too long delayed. This measure having been resolved on, it was
put in execution without waiting for the meeting of Congress, because
the state of Europe created an apprehension of events that might have
rendered our application ineffectual.

Our demands upon the Government of the two Sicilies are of a peculiar
nature. The injuries on which they are founded are not denied, nor are
the atrocity and perfidy under which those injuries were perpetrated
attempted to be extenuated. The sole ground on which indemnity has been
refused is the alleged illegality of the tenure by which the monarch who
made the seizures held his crown. This defense, always unfounded in any
principle of the law of nations, now universally abandoned, even by
those powers upon whom the responsibility for the acts of past rulers
bore the most heavily, will unquestionably be given up by His Sicilian
Majesty, whose counsels will receive an impulse from that high sense of
honor and regard to justice which are said to characterize him; and I
feel the fullest confidence that the talents of the citizen commissioned
for that purpose will place before him the just claims of our injured
citizens in such as light as will enable me before your adjournment to
announce that they have been adjusted and secured. Precise instructions
to the effect of bringing the negotiation to a speedy issue have been
given, and will be obeyed.

In the late blockade of Terceira some of the Portuguese fleet captured
several of our vessels and committed other excesses, for which
reparation was demanded, and I was on the point of dispatching an armed
force to prevent any recurrence of a similar violence and protect our
citizens in the prosecution of their lawful commerce when official
assurances, on which I relied, made the sailing of the ships
unnecessary. Since that period frequent promises have been made that
full indemnity shall be given for the injuries inflicted and the losses
sustained. In the performance there has been some, perhaps unavoidable,
delay; but I have the fullest confidence that my earnest desire that
this business may at once be closed, which our minister has been
instructed strongly to express, will very soon be gratified. I have the
better ground for this hope from the evidence of a friendly disposition
which that Government has shown an actual reduction in the duty on rice
the produce of our Southern States, authorizing the anticipation that
this important article of our export will soon be admitted on the same
footing with that produced by the most favored nation.

With the other powers of Europe we have fortunately had no cause of
discussions for the redress of injuries. With the Empire of the Russias
our political connection is of the most friendly and our commercial of
the most liberal kind. We enjoy the advantages of navigation and trade
given to the most favored nation, but it has not yet suited their
policy, or perhaps has not been found convenient from other
considerations, to give stability and reciprocity to those privileges by
a commercial treaty. The ill health of the minister last year charged
with making a proposition for that arrangement did not permit him to
remain at St. Petersburg, and the attention of that Government during
the whole of the period since his departure having been occupied by the
war in which it was engaged, we have been assured that nothing could
have been effected by his presence. A minister will soon be nominated,
as well to effect this important object as to keep up the relations of
amity and good understanding of which we have received so many
assurances and proofs from His Imperial Majesty and the Emperor his
predecessor.

The treaty with Austria is opening to us an important trade with the
hereditary dominions of the Emperor, the value of which has been
hitherto little known, and of course not sufficiently appreciated. While
our commerce finds an entrance into the south of Germany by means of
this treaty, those we have formed with the Hanseatic towns and Prussia
and others now in negotiation will open that vast country to the
enterprising spirit of our merchants on the north--a country abounding
in all the materials for a mutually beneficial commerce, filled with
enlightened and industrious inhabitants, holding an important place in
the politics of Europe, and to which we owe so many valuable citizens.
The ratification of the treaty with the Porte was sent to be exchanged
by the gentleman appointed our charge d'affaires to that Court. Some
difficulties occurred on his arrival, but at the date of his last
official dispatch he supposed they had been obviated and that there was
every prospect of the exchange being speedily effected.

This finishes the connected view I have thought it proper to give of our
political and commercial relations in Europe. Every effort in my power
will be continued to strengthen and extend them by treaties founded on
principles of the most perfect reciprocity of interest, neither asking
nor conceding any exclusive advantage, but liberating as far as it lies
in my power the activity and industry of our fellow citizens from the
shackles which foreign restrictions may impose.

To China and the East Indies our commerce continues in its usual extent,
and with increased facilities which the credit and capital of our
merchants afford by substituting bills for payments in specie. A daring
outrage having been committed in those seas by the plunder of one of our
merchant-men engaged in the pepper trade at a port in Sumatra, and the
piratical perpetrators belonging to tribes in such a state of society
that the usual course of proceedings between civilized nations could not
be pursued, I forthwith dispatched a frigate with orders to require
immediate satisfaction for the injury and indemnity to the sufferers.

Few changes have taken place in our connections with the independent
States of America since my last communication to Congress. The
ratification of a commercial treaty with the United Republics of Mexico
has been for some time under deliberation in their Congress, but was
still undecided at the date of our last dispatches. The unhappy civil
commotions that have prevailed there were undoubtedly the cause of the
delay, but as the Government is now said to be tranquillized we may hope
soon to receive the ratification of the treaty and an arrangement for
the demarcation of the boundaries between us. In the mean time, an
important trade has been opened with mutual benefit from St. Louis, in
the State of Missouri, by caravans to the interior Provinces of Mexico.
This commerce is protected in its progress through the Indian countries
by the troops of the United States, which have been permitted to escort
the caravans beyond our boundaries to the settled part of the Mexican
territory.

From Central America I have received assurances of the most friendly
kind and a gratifying application for our good offices to remove a
supposed indisposition toward that Government in a neighboring State.
This application was immediately and successfully complied with. They
gave us also the pleasing intelligence that differences which had
prevailed in their internal affairs had been peaceably adjusted. Our
treaty with this Republic continues to be faithfully observed, and
promises a great and beneficial commerce between the two countries--a
commerce of the greatest importance if the magnificent project of a ship
canal through the dominions of that State from the Atlantic to the
Pacific Ocean, now in serious contemplation, shall be executed.

I have great satisfaction in communicating the success which has
attended the exertions of our minister in Colombia to procure a very
considerable reduction in the duties on our flour in that Republic.
Indemnity also has been stipulated for injuries received by our
merchants from illegal seizures, and renewed assurances are given that
the treaty between the two countries shall be faithfully observed.

Chili and Peru seem to be still threatened with civil commotions, and
until they shall be settled disorders may naturally be apprehended,
requiring the constant presence of a naval force in the Pacific Ocean to
protect our fisheries and guard our commerce.

The disturbances that took place in the Empire of Brazil previously to
and immediately consequent upon the abdication of the late Emperor
necessarily suspended any effectual application for the redress of some
past injuries suffered by our citizens from that Government, while they
have been the cause of others, in which all foreigners seem to have
participated. Instructions have been given to our minister there to
press for indemnity due for losses occasioned by these irregularities,
and to take care of our fellow citizens shall enjoy all the privileges
stipulated in their favor by the treaty lately made between the two
powers, all which the good intelligence that prevails between our
minister at Rio Janeiro and the Regency gives us the best reason to
expect.

I should have placed Buenos Ayres in the list of South American powers
in respect to which nothing of importance affecting us was to be
communicated but for occurrences which have lately taken place at the
Falkland Islands, in which the name of that Republic has been used to
cover with a show of authority acts injurious to our commerce and to the
property and liberty of our fellow citizens. In the course of the
present year one of our vessels, engaged in the pursuit of a trade which
we have always enjoyed without molestation, has been captured by a band
acting, as they pretend, under the authority of the Government of Buenos
Ayres. I have therefore given orders for the dispatch of an armed vessel
to join our squadron in those seas and aid in affording all lawful
protection to our trade which shall be necessary, and shall without
delay send a minister to inquire into the nature of the circumstances
and also of the claim, if any, that is set up by that Government to
those islands. In the mean time, I submit the case to the consideration
of Congress, to the end that they may clothe the Executive with such
authority and means as they may deem necessary for providing a force
adequate to the complete protection of our fellow citizens fishing and
trading in those seas.

This rapid sketch of our foreign relations, it is hoped, fellow
citizens, may be of some use in so much of your legislation as may bear
on that important subject, while it affords to the country at large a
source of high gratification in the contemplation of our political and
commercial connection with the rest of the world. At peace with all;
having subjects of future difference with few, and those susceptible of
easy adjustment; extending our commerce gradually on all sides and on
none by any but the most liberal and mutually beneficial means, we may,
by the blessing of Providence, hope for all that national prosperity
which can be derived from an intercourse with foreign nations, guided by
those eternal principles of justice and reciprocal good will which are
binding as well upon States as the individuals of whom they are
composed.

I have great satisfaction in making this statement of our affairs,
because the course of our national policy enables me to do it without
any indiscreet exposure of what in other governments is usually
concealed from the people. Having none but a straight-forward, open
course to pursue, guided by a single principle that will bear the
strongest light, we have happily no political combinations to form, no
alliances to entangle us, no complicated interests to consult, and in
subjecting all we have done to the consideration of our citizens and to
the inspection of the world we give no advantage to other nations and
lay ourselves open to no injury.

It may not be improper to add that to preserve this state of things and
give confidence to the world in the integrity of our designs all our
consular and diplomatic agents are strictly enjoined to examine well
every cause of complaint preferred by our citizens, and while they urge
with proper earnestness those that are well founded, to countenance none
that are unreasonable or unjust, and to enjoin on our merchants and
navigators the strictest obedience to the laws of the countries to which
they resort, and a course of conduct in their dealings that may support
the character of our nation and render us respected abroad.

Connected with this subject, I must recommend a revisal of our consular
laws. Defects and omissions have been discovered in their operation that
ought to be remedied and supplied. For your further information on this
subject I have directed a report to be made by the Secretary of State,
which I shall hereafter submit to your consideration.

The internal peace and security of our confederated States is the next
principal object of the General Government. Time and experience have
proved that the abode of the native Indian within their limits is
dangerous to their peace and injurious to himself. In accordance with my
recommendation at a former session of Congress, an appropriation of $500
thousand was made to aid the voluntary removal of the various tribes
beyond the limits of the States. At the last session I had the happiness
to announce that the Chickasaws and Choctaws had accepted the generous
offer of the Government and agreed to remove beyond the Mississippi
River, by which the whole of the State of Mississippi and the western
part of Alabama will be freed from Indian occupancy and opened to a
civilized population. The treaties with these tribes are in a course of
execution, and their removal, it is hoped, will be completed in the
course of 1832.

At the request of the authorities of Georgia the registration of
Cherokee Indians for emigration has been resumed, and it is confidently
expected that half, if not two-third, of that tribe will follow the wise
example of their more westerly brethren. Those who prefer remaining at
their present homes will hereafter be governed by the laws of Georgia,
as all her citizens are, and cease to be the objects of peculiar care on
the part of the General Government.

During the present year the attention of the Government has been
particularly directed to those tribes in the powerful and growing State
of Ohio, where considerable tracts of the finest lands were still
occupied by the aboriginal proprietors. Treaties, either absolute or
conditional, have been made extinguishing the whole Indian title to the
reservations in that State, and the time is not distant, it is hoped,
when Ohio will be no longer embarrassed with the Indian population. The
same measures will be extended to Indiana as soon as there is reason to
anticipate success. It is confidently believed that perseverance for a
few years in the present policy of the Government will extinguish the
Indian title to all lands lying within the States composing our Federal
Union, and remove beyond their limits every Indian who is not willing to
submit to their laws.

Thus will all conflicting claims to jurisdiction between the States and
the Indian tribes be put to rest. It is pleasing to reflect that results
so beneficial, not only to the States immediately concerned, but to the
harmony of the Union, will have been accomplished by measures equally
advantageous to the Indians. What the native savages become when
surrounded by a dense population and by mixing with the whites may be
seen in the miserable remnants of a few Eastern tribes, deprived of
political and civil rights, forbidden to make contracts, and subjected
to guardians, dragging out a wretched existence, without excitement,
without hope, and almost without thought.

But the removal of the Indians beyond the limits and jurisdiction of the
States does not place them beyond the reach of philanthropic aid and
Christian instruction. On the contrary, those whom philanthropy or
religion may induce to live among them in their new abode will be more
free in the exercise of their benevolent functions than if they had
remained within the limits of the States, embarrassed by their internal
regulations. Now subject to no control but the superintending agency of
the General Government, exercised with the sole view of preserving
peace, they may proceed unmolested in the interesting experiment of
gradually advancing a community of American Indians from barbarism to
the habits and enjoyments of civilized life.

Among the happiest effects of the improved relations of our Republic has
been an increase of trade, producing a corresponding increase of revenue
beyond the most sanguine anticipations of the Treasury Department.

The state of the public finances will be fully shown by the Secretary of
the Treasury in the report which he will presently lay before you. I
will here, however, congratulate you upon their prosperous condition.
The revenue received in the present year will not fall short of
$27,700,000, and the expenditures for all objects other than the public
debt will not exceed $14,700,000. The payment on account of the
principal and interest of the debt during the year will exceed
$16,500,000, a greater sum than has been applied to that object out of
the revenue in any year since the enlargement of the sinking fund except
the two years following immediately there after. The amount which will
have been applied to the public debt from March 4th, 1829 to January
1st, 1832, which is less than three years since the Administration has
been placed in my hands, will exceed $40,000,000.

From the large importations of the present year it may be safely
estimated that the revenue which will be received into the Treasury from
that source during the next year, with the aid of that received from the
public lands, will considerably exceed the amount of the receipts of the
present year; and it is believed that with the means which the
Government will have at its disposal from various sources, which will be
fully stated by the proper Department, the whole of the public debt may
be extinguished, either by redemption or purchase, within the four years
of my Administration. We shall then exhibit the rare example of a great
nation, abounding in all the means of happiness and security, altogether
free from debt.

The confidence with which the extinguishment of the public debt may be
anticipated presents an opportunity for carrying into effect more fully
the policy in relation to import duties which has been recommended in my
former messages. A modification of the tariff which shall produce a
reduction of our revenue to the wants of the Government and an
adjustment of the duties on imports with a view to equal justice in
relation to all our national interests and to the counteraction of
foreign policy so far as it may be injurious to those interests, is
deemed to be one of the principal objects which demand the consideration
of the present Congress. Justice to the interests of the merchant as
well as the manufacturer requires that material reductions in the import
duties be prospective; and unless the present Congress shall dispose of
the subject the proposed reductions can not properly be made to take
effect at the period when the necessity for the revenue arising from
present rates shall cease. It is therefore desirable that arrangements
be adopted at your present session to relieve the people from
unnecessary taxation after the extinguishment of the public debt. In the
exercise of that spirit of concession and conciliation which has
distinguished the friends of our Union in all great emergencies, it is
believed that this object may be effected without injury to any national
interest.

In my annual message of December, 1829, I had the honor to recommend the
adoption of a more liberal policy than that which then prevailed toward
unfortunate debtors to the Government, and I deem it my duty again to
invite your attention to this subject.

Actuated by similar views, Congress at their last session passed an act
for the relief of certain insolvent debtors of the United States, but
the provisions of that law have not been deemed such as were adequate to
that relief to this unfortunate class of our fellow citizens which may
be safely extended to them. The points in which the law appears to be
defective will be particularly communicated by the Secretary of the
Treasury, and I take pleasure in recommending such an extension of its
provisions as will unfetter the enterprise of a valuable portion of our
citizens and restore to them the means of usefulness to themselves and
the community. While deliberating on this subject I would also recommend
to your consideration the propriety of so modifying the laws for
enforcing the payment of debts due either to the public or to
individuals suing in the courts of the United States as to restrict the
imprisonment of the person to cases of fraudulent concealment of
property. The personal liberty of the citizen seems too sacred to be
held, as in many cases it now is, at the will of a creditor to whom he
is willing to surrender all the means he has of discharging his debt.

The reports from the Secretaries of the War and Navy Departments and
from the Post Master General, which accompany this message, present
satisfactory views of the operations of the Departments respectively
under their charge, and suggest improvements which are worthy of and to
which I invite the serious attention of Congress. Certain defects and
omissions having been discovered in the operation of the laws respecting
patents, they are pointed out in the accompanying report from the
Secretary of State.

I have heretofore recommended amendments of the Federal Constitution
giving the election of President and Vice-President to the people and
limiting the service of the former to a single term. So important do I
consider these changes in our fundamental law that I can not, in
accordance with my sense of duty, omit to press them upon the
consideration of a new Congress. For my views more at large, as well in
relation to these points as to the disqualification of members of
Congress to receive an office from a President in whose election they
have had an official agency, which I proposed as a substitute, I refer
you to my former messages.

Our system of public accounts is extremely complicated, and it is
believed may be much improved. Much of the present machinery and a
considerable portion of the expenditure of public money may be dispensed
with, while greater facilities can be afforded to the liquidation of
claims upon the Government and an examination into their justice and
legality quite as efficient as the present secured. With a view to a
general reform in the system, I recommend the subject to the attention
of Congress.

I deem it my duty again to call your attention to the condition of the
District of Columbia. It was doubtless wise in the framers of our
Constitution to place the people of this District under the jurisdiction
of the General Government, but to accomplish the objects they had in
view it is not necessary that this people should be deprived of all the
privileges of self-government. Independently of the difficulty of
inducing the representatives of distant States to turn their attention
to projects of laws which are not of the highest interest to their
constituents, they are not individually, nor in Congress collectively,
well qualified to legislate over the local concerns of this District.
Consequently its interests are much neglected, and the people are almost
afraid to present their grievances, lest a body in which they are not
represented and which feels little sympathy in their local relations
should in its attempt to make laws for them do more harm than good.

Governed by the laws of the States whence they were severed, the two
shores of the Potomac within the ten miles square have different penal
codes--not the present codes of Virginia and Maryland, but such as
existed in those States at the time of the cession to the United States.
As Congress will not form a new code, and as the people of the District
can not make one for themselves, they are virtually under two
governments. Is it not just to allow them at least a Delegate in
Congress, if not a local legislature, to make laws for the District,
subject to the approval or rejection of Congress? I earnestly recommend
the extension to them of every political right which their interests
require and which may be compatible with the Constitution.

The extension of the judiciary system of the United States is deemed to
be one of the duties of the Government. One-fourth of the States in the
Union do not participate in the benefits of a circuit court. To the
States of Indiana, Illinois, Missouri, Alabama, Mississippi, and
Louisiana, admitted into the Union since the present judicial system was
organized, only a district court has been allowed. If this be
sufficient, then the circuit courts already existing in 18 States ought
to be abolished; if it be not sufficient, the defect ought to be
remedied, and these States placed on the same footing with the other
members of the Union. It was on this condition and on this footing that
they entered the Union, and they may demand circuit courts as a matter
not of concession, but of right. I trust that Congress will not adjourn
leaving this anomaly in our system.

Entertaining the opinions heretofore expressed in relation to the Bank
of the United States as at present organized, I felt it my duty in my
former messages frankly to disclose them, in order that the attention of
the Legislature and the people should be seasonably directed to that
important subject, and that it might be considered and finally disposed
of in a manner best calculated to promote the ends of the Constitution
and subserve the public interests. Having thus conscientiously
discharged a constitutional duty, I deem it proper on this occasion,
without a more particular reference to the views of the subject then
expressed to leave it for the present to the investigation of an
enlightened people and their representatives.

In conclusion permit me to invoke that Power which superintends all
governments to infuse into your deliberations at this important crisis
of our history a spirit of mutual forbearance and conciliation. In that
spirit was our Union formed, and in that spirit must it be preserved.

***

State of the Union Address
Andrew Jackson
December 4, 1832

Fellow Citizens of the Senate and of the House of Representatives:

It gives me pleasure to congratulate you upon your return to the seat of
Government for the purpose of discharging your duties to the people of
the United States. Although the pestilence which had traversed the Old
World has entered our limits and extended its ravages over much of our
land, it has pleased Almighty God to mitigate its severity and lessen
the number of its victims compared with those who have fallen in most
other countries over which it has spread its terrors. Not with standing
this visitation, our country presents on every side marks of prosperity
and happiness unequaled, perhaps, in any other portion of the world. If
we fully appreciate our comparative condition, existing causes of
discontent will appear unworthy of attention, and, with hearts of
thankfulness to that divine Being who has filled our cup of prosperity,
we shall feel our resolution strengthened to preserve and hand down to
our posterity that liberty and that union which we have received from
our fathers, and which constitute the sources and the shield of all our
blessings.

The relations of our country continue to present the same picture of
amicable intercourse that I had the satisfaction to hold up to your view
at the opening of your last session. The same friendly professions, the
same desire to participate in our flourishing commerce, the same
dispositions, evinced by all nations with whom we have any intercourse.
This desirable state of things may be mainly ascribed to our undeviating
practice of the rule which has long guided our national policy, to
require no exclusive privileges in commerce and to grant none. It is
daily producing its beneficial effect in the respect shown to our flag,
the protection of our citizens and their property abroad, and in the
increase of our navigation and the extension of our mercantile
operations. The returns which have been made out since we last met will
show an increase during the last preceding year of more than 80 thousand
tons in our shipping and of near $40,000,000 in the aggregate of our
imports and exports.

Nor have we less reason to felicitate ourselves on the position of our
political than of our commercial concerns. They remain in the state in
which they were when I last addressed you--a state of prosperity and
peace, the effect of a wise attention to the parting advice of the
revered Father of his Country on this subject, condensed into a maxim
for the use of posterity by one of his most distinguished successors--to
cultivate free commerce and honest friendship with all nations, but to
make entangling alliances with none. A strict adherence to this policy
has kept us aloof from the perplexing questions that now agitate the
European world and have more than once deluged those countries with
blood. Should those scenes unfortunately recur, the parties to the
contest may count on a faithful performance of the duties incumbent on
us as a neutral nation, and our own citizens may equally rely on the
firm assertion of their neutral rights.

With the nation that was our earliest friend and ally in the infancy of
our political existence the most friendly relations have subsisted
through the late revolutions of its Government, and, from the events of
the last, promise a permanent duration. It has made an approximation in
some of its political institutions to our own, and raised a monarch to
the throne who preserves, it is said, a friendly recollection of the
period during which he acquired among our citizens the high
consideration that could then have been produced by his personal
qualifications alone.

Our commerce with that nation is gradually assuming a mutually
beneficial character, and the adjustment of the claims of our citizens
has removed the only obstacle there was to an intercourse not only
lucrative, but productive of literary and scientific improvement.

From Great Britain I have the satisfaction to inform you that I continue
to receive assurances of the most amicable disposition, which have on my
part on all proper occasions been promptly and sincerely reciprocated.
The attention of that Government has latterly been so much engrossed by
matters of a deeply interesting domestic character that we could not
press upon it the renewal of negotiations which had been unfortunately
broken off by the unexpected recall of our minister, who had commenced
them with some hopes of success. My great object was the settlement of
questions which, though now dormant, might here-after be revived under
circumstances that would endanger the good understanding which it is the
interest of both parties to preserve inviolate, cemented as it is by a
community of language, manners, and social habits, and by the high
obligations we owe to our British ancestors for many of our most
valuable institutions and for that system of representative government
which has enabled us to preserve and improve them.  The question of our
North-East boundary still remains unsettled. In my last annual message I
explained to you the situation in which I found that business on my
coming into office, and the measures I thought it my duty to pursue for
asserting the rights of the United States before the sovereign who had
been chosen by my predecessor to determine the question, and also the
manner in which he had disposed of it. A special message to the Senate
in their executive capacity afterwards brought before them to the
question whether they would advise a submission to the opinion of the
sovereign arbiter. That body having considered the award as not
obligatory and advised me to open a further negotiation, the proposition
was immediately made to the British Government, but the circumstances to
which I have alluded have hitherto prevented any answer being given to
the overture. Early attention, however, has been promised to the
subject, and every effort on my part will be made for a satisfactory
settlement of this question, interesting to the Union generally, and
particularly so to one of its members.

The claims of our citizens on Spain are not yet acknowledged. On a
closer investigation of them than appears to have heretofore taken place
it was discovered that some of these demands, however strong they might
be upon the equity of that Government, were not such as could be made
the subject of national interference; and faithful to the principle of
asking nothing but what was clearly right, additional instructions have
been sent to modify our demands so as to embrace those only on which,
according to the laws of nations, we had a strict right to insist. An
inevitable delay in procuring the documents necessary for this review of
the merits of these claims retarded this operation until an unfortunate
malady which has afflicted His Catholic Majesty prevented an examination
of them. Being now for the first time presented in an unexceptionable
form, it is confidently hoped that the application will be successful.

I have the satisfaction to inform you that the application I directed to
be made for the delivery of a part of the archives of Florida, which had
been carried to The Havannah, has produced a royal order for their
delivery, and that measures have been taken to procure its execution.

By the report of the Secretary of State communicated to you on June
25th, 1832 you were informed of the conditional reduction obtained by
the minister of the United States at Madrid of the duties on tonnage
levied on American shipping in the ports of Spain. The condition of that
reduction having been complied with on our part by the act passed July
13th, 1832, I have the satisfaction to inform you that our ships now pay
no higher nor other duties in the continental ports of Spain than are
levied on their national vessels.

The demands against Portugal for illegal captures in the blockade of
Terceira have been allowed to the full amount of the accounts presented
by the claimants, and payment was promised to be made in three
installments. The first of these has been paid; the second, although
due, had not at the date of our last advices been received, owing, it
was alleged, to embarrassments in the finances consequent on the civil
war in which that nation is engaged.

The payments stipulated by the convention with Denmark have been
punctually made, and the amount is ready for distribution among the
claimants as soon as the board, now sitting, shall have performed their
functions.

I regret that by the last advices from our charge d'affaires at Naples
that Government had still delayed the satisfaction due to our citizens,
but at that date the effect of the last instructions was not known.
Dispatches from thence are hourly expected, and the result will be
communicated to you without delay.

With the rest of Europe our relations, political and commercial, remain
unchanged. Negotiations are going on to put on a permanent basis the
liberal system of commerce now carried on between us and the Empire of
Russia. The treaty concluded with Austria is executed by His Imperial
Majesty with the most perfect good faith, and as we have no diplomatic
agent at his Court he personally inquired into and corrected a
proceeding of some of his subaltern officers to the injury of our consul
in one of his ports.

Our treaty with the Sublime Porte is producing its expected effects on
our commerce. New markets are opening for our commodities and a more
extensive range for the employment of our ships. A slight augmentation
of the duties on our commerce, inconsistent with the spirit of the
treaty, had been imposed, but on the representation of our charge
d'affaires it has been promptly withdrawn, and we now enjoy the trade
and navigation of the Black Sea and of all the ports belonging to the
Turkish Empire and Asia on the most perfect equality with all foreign
nations.

I wish earnestly that in announcing to you the continuance of friendship
and the increase of a profitable commercial intercourse with Mexico,
with Central America, and the States of the South I could accompany it
with the assurance that they all are blessed with that internal
tranquillity and foreign peace which their heroic devotion to the cause
of their independence merits. In Mexico a sanguinary struggle is now
carried on, which has caused some embarrassment to our commerce, but
both parties profess the most friendly disposition toward us. To the
termination of this contest we look for the establishment of that secure
intercourse so necessary to nations whose territories are contiguous.
How important it will be to us we may calculate from the fact that even
in this unfavorable state of things our maritime commerce has increased,
and an internal trade by caravans from St. Louis to Santa Fe, under the
protection of escorts furnished by the Government, is carried on to
great advantage and is daily increasing. The agents provided for by the
treaty, with this power to designate the boundaries which it
established, have been named on our part, but one of the evils of the
civil war now raging there has been that the appointment of those with
whom they were to cooperate has not yet been announced to us.

The Government of Central America has expelled from its territory the
party which some time since disturbed its peace. Desirous of fostering a
favorable disposition toward us, which has on more than one occasion
been evinced by this interesting country, I made a second attempt in
this year to establish a diplomatic intercourse with them; but the death
of the distinguished citizen whom I had appointed for that purpose has
retarded the execution of measures from which I hoped much advantage to
our commerce. The union of the three States which formed the Republic of
Colombia has been dissolved, but they all, it is believed, consider
themselves as separately bound by the treaty which was made in their
federal capacity. The minister accredited to the federation continues in
that character near the Government of New Grenada, and hopes were
entertained that a new union would be formed between the separate
States, at least for the purposes of foreign intercourse. Our minister
has been instructed to use his good offices, when ever they shall be
desired, to produce the reunion so much to be wished for, the domestic
tranquillity of the parties, and the security and facility of foreign
commerce.

Some agitations naturally attendant on an infant reign have prevailed in
the Empire of Brazil, which have had the usual effect upon commercial
operations, and while they suspended the consideration of claims created
on similar occasions, they have given rise to new complaints on the part
of our citizens. A proper consideration for calamities and difficulties
of this nature has made us less urgent and peremptory in our demands for
justice than duty to our fellow citizens would under other circumstances
have required. But their claims are not neglected, and will on all
proper occasions be urged, and it is hoped with effect.

I refrain from making any communication on the subject of our affairs
with Buenos Ayres, because the negotiation communicated to you in my
last annual message was at the date of our last advices still pending
and in a state that would render a publication of the details
inexpedient.

A treaty of amity and commerce has been formed with the Republic of
Chili, which, if approved by the Senate, will be laid before you. That
Government seems to be established, and at peace with its neighbors; and
its ports being the resorts of our ships which are employed in the
highly important trade of the fisheries, this commercial convention can
not but be of great advantage to our fellow citizens engaged in that
perilous but profitable business.

Our commerce with the neighboring State of Peru, owing to the onerous
duties levied on our principal articles of export, has been on the
decline, and all endeavors to procure an alteration have hitherto proved
fruitless. With Bolivia we have yet no diplomatic intercourse, and the
continual contests carried on between it and Peru have made me defer
until a more favorable period the appointment of any agent for that
purpose.

An act of atrocious piracy having been committed on one of our trading
ships by the inhabitants of a settlement on the west coast of Sumatra, a
frigate was dispatched with orders to demand satisfaction for the injury
if those who committed it should be found to be members of a regular
government, capable of maintaining the usual relations with foreign
nations; but if, as it was supposed and as they proved to be, they were
a band of lawless pirates, to inflict such a chastisement as would deter
them and others from like aggressions. This last was done, and the
effect has been an increased respect for our flag in those distant seas
and additional security for our commerce.

In the view I have given of our connection with foreign powers allusions
have been made to their domestic disturbances or foreign wars, to their
revolutions or dissensions. It may be proper to observe that this is
done solely in cases where those events affect our political relations
with them, or to show their operation on our commerce. Further than this
it is neither our policy nor our right to interfere. Our best wishes on
all occasions, our good offices when required, will be afforded to
promote the domestic tranquillity and foreign peace of all nations with
whom we have any intercourse. Any intervention in their affairs further
than this, even by the expression of an official opinion, is contrary to
our principles of international policy, and will always be avoided.

The report which the Secretary of the Treasury will in due time lay
before you will exhibit the national finances in a highly prosperous
state. Owing to the continued success of our commercial enterprise,
which has enabled the merchants to fulfill their engagements with the
Government, the receipts from customs during the year will exceed the
estimate presented at the last session, and with the other means of the
Treasury will prove fully adequate not only to meet the increased
expenditures resulting from the large appropriations made by Congress,
but to provide for the payment of all the public debt which is at
present redeemable.

It is now estimated that the customs will yield to the Treasury during
the present year upward of $28,000,000. The public lands, however, have
proved less productive than was anticipated, and according to present
information will not much exceed $2,000,000. The expenditures for all
objects other than the public debt are estimated to amount during the
year to about $16,500,000, while a still larger sum, viz, $18,000,000,
will have been applied to the principal and interest of the public debt.
 It is expected, however, that in consequence of the reduced rates of
duty which will take effect after March 3d, 1833 there will be a
considerable falling off in the revenue from customs in the year 1833.
It will never the less be amply sufficient to provide for all the wants
of the public service, estimated even upon a liberal scale, and for the
redemption and purchase of the remainder of the public debt. On January
1st, 1833 the entire public debt of the United States, funded and
unfunded, will be reduced to within a fraction of $7,000,000, of which
$2,227,363 are not of right redeemable until January 1st, 1834 and
$4,735,296 not until January 2d, 1835. The commissioners of the sinking
funds, however, being invested with full authority to purchase the debt
at the market price, and the means of the Treasury being ample, it may
be hoped that the whole will be extinguished within the year 1833.

I can not too cordially congratulate Congress and my fellow citizens on
the near approach of that memorable and happy event--the extinction of
the public debt of this great and free nation.

Faithful to the wise and patriotic policy marked out by the legislation
of the country for this object, the present Administration has devoted
to it all the means which a flourishing commerce has supplied and a
prudent economy preserved for the public Treasury. Within the four years
for which the people have confided the Executive power to my charge
$58,000,000 will have been applied to the payment of the public debt.
That this has been accomplished without stinting the expenditures for
all other proper objects will be seen by referring to the liberal
provision made during the same period for the support and increase of
our means of maritime and military defense, for internal improvements of
a national character, for the removal and preservation of the Indians,
and, lastly, for the gallant veterans of the Revolution.

The final removal of this great burthen from our resources affords the
means of further provision for all the objects of general welfare and
public defense which the Constitution authorizes, and presents the
occasion for such further reductions in the revenue as may not be
required for them. From the report of the Secretary of the Treasury it
will be seen that after the present year such a reduction may be made to
a considerable extent, and the subject is earnestly recommended to the
consideration of Congress in the hope that the combined wisdom of the
representatives of the people will devise such means of effecting that
salutary object as may remove those burthens which shall be found to
fall unequally upon any and as may promote all the great interests of
the community.

Long and patient reflection has strengthened the opinions I have
heretofore expressed to Congress on this subject, and I deem it my duty
on the present occasion again to urge them upon the attention of the
Legislature. The soundest maxims of public policy and the principals
upon which our republican institutions are founded recommend a proper
adaptation of the revenue to the expenditure, and they also require that
the expenditure shall be limited to what, by an economical
administration, shall be consistent with the simplicity of the
Government and necessary to an efficient public service.

In effecting this adjustment it is due, in justice to the interests of
the different States, and even to the preservation of the Union itself,
that the protection afforded by existing laws to any branches of the
national industry should not exceed what may be necessary to counteract
the regulations of foreign nations and to secure a supply of those
articles of manufacture essential to the national independence and
safety in time of war. If upon investigation it shall be found, as it is
believed it will be, that the legislative protection granted to any
particular interest is greater than is indispensably requisite for these
objects, I recommend that it be gradually diminished, and that as far as
may be consistent with these objects the whole scheme of duties be
reduced to the revenue standard as soon as a just regard to the faith of
the Government and to the preservation of the large capital invested in
establishments of domestic industry will permit.

That manufactures adequate to the supply of our domestic consumption
would in the abstract be beneficial to our country there is no reason to
doubt, and to effect their establishment there is perhaps no American
citizen who would not for a while be willing to pay a higher price for
them. But for this purpose it is presumed that a tariff of high duties,
designed for perpetual protection, which they maintain has the effect to
reduce the price by domestic competition below that of the foreign
article. Experience, however, our best guide on this as on other
subjects, makes it doubtful whether the advantages of this system are
not counter-balanced by many evils, and whether it does not tend to
beget in the minds of a large portion of our country-men a spirit of
discontent and jealousy dangerous to the stability of the Union.

What, then, shall be done? Large interests have grown up under the
implied pledge of our national legislation, which it would seem a
violation of public faith suddenly to abandon. Nothing could justify it
but the public safety, which is the supreme law. But those who have
vested their capital in manufacturing establishments can not expect that
the people will continue permanently to pay high taxes for their
benefit, when the money is not required for any legitimate purpose in
the administration of the Government. Is it not enough that the high
duties have been paid as long as the money arising from them could be
applied to the common benefit in the extinguishment of the public debt?

Those who take an enlarged view of the condition of our country must be
satisfied that the policy of protection must be ultimately limited to
those articles of domestic manufacture which are indispensable to our
safety in time of war. Within this scope, on a reasonable scale, it is
recommended by every consideration of patriotism and duty, which will
doubtless always secure to it a liberal and efficient support. But
beyond this object we have already seen the operation of the system
productive of discontent. In some sections of the Republic its influence
is deprecated as tending to concentrate wealth into a few hands, and as
creating those germs of dependence and vice which in other countries
have characterized the existence of monopolies and proved so destructive
of liberty and the general good. A large portion of the people in one
section of the Republic declares it not only inexpedient on these
grounds, but as disturbing the equal relations of property by
legislation, and therefore unconstitutional and unjust.

Doubtless these effects are in a great degree exaggerated, and may be
ascribed to a mistaken view of the considerations which led to the
adoption of the tariff system; but they are never the less important in
enabling us to review the subject with a more thorough knowledge of all
its bearings upon the great interests of the Republic, and with a
determination to dispose of it so that none can with justice complain.

It is my painful duty to state that in one quarter of the United States
opposition to the revenue laws has arisen to a height which threatens to
thwart their execution, if not to endanger the integrity of the Union.
What ever obstructions may be thrown in the way of the judicial
authorities of the General Government, it is hoped they will be able
peaceably to overcome them by the prudence of their own officers and the
patriotism of the people. But should this reasonable reliance on the
moderation and good sense of all portions of our fellow citizens be
disappointed, it is believed that the laws themselves are fully adequate
to the suppression of such attempts as may be immediately made. Should
the exigency arise rendering the execution of the existing laws
impracticable from any cause what ever, prompt notice of it will be
given to Congress, with a suggestion of such views and measures as may
be deemed necessary to meet it.

In conformity with principles heretofore explained, and with the hope of
reducing the General Government to that simple machine which the
Constitution created and of withdrawing from the States all other
influence than that of its universal beneficence in preserving peace,
affording an uniform currency, maintaining the inviolability of
contracts, diffusing intelligence, and discharging unfelt its other
super-intending functions, I recommend that provision be made to dispose
of all stocks now held by it in corporations, whether created by the
General or State Governments, and placing the proceeds in the Treasury.
As a source of profit these stocks are of little or no value; as a means
of influence among the States they are adverse to the purity of our
institutions. The whole principle on which they are based is deemed by
many unconstitutional, and to persist in the policy which they indicate
is considered wholly inexpedient.

It is my duty to acquaint you with an arrangement made by the Bank of
the United States with a portion of the holders of the 3% stock, by
which the Government will be deprived of the use of the public funds
longer than was anticipated. By this arrangement, which will be
particularly explained by the Secretary of the Treasury, a surrender of
the certificates of this stock may be postponed until October, 1833, and
thus may be continued by the failure of the bank to perform its duties.

Such measures as are within the reach of the Secretary of the Treasury
have been taken to enable him to judge whether the public deposits in
that institution may be regarded as entirely safe; but as his limited
power may prove inadequate to this object, I recommend the subject to
the attention of Congress, under the firm belief that it is worthy of
their serious investigation. An inquiry into the transactions of the
institution, embracing the branches as well as the principal bank, seems
called for by the credit which is given throughout the country to many
serious charges impeaching its character, and which if true may justly
excite the apprehension that it is no longer a safe depository of the
money of the people.

Among the interests which merit the consideration of Congress after the
payment of the public debt, one of the most important, in my view, is
that of the public lands. Previous to the formation of our present
Constitution it was recommended by Congress that a portion of the waste
lands owned by the States should be ceded to the United States for the
purposes of general harmony and as a fund to meet the expenses of the
war. The recommendation was adopted, and at different periods of time
the States of Massachusetts, New York, Virginia, North and South
Carolina, and Georgia granted their vacant soil for the uses for which
they had been asked. As the lands may now be considered as relieved from
this pledge, it is in the discretion of Congress to dispose of them in
such way as best to conduce to the quiet, harmony, and general interest
of the American people. In examining this question all local and
sectional feelings should be discarded and the whole United States
regarded as one people, interested alike in the prosperity of their
common country.

It can not be doubted that the speedy settlement of these lands
constitutes the true interest of the Republic. The wealth and strength
of a country are its population, and the best part of that population
are cultivators of the soil. Independent farmers are every where the
basis of society and true friends of liberty.

In addition to these considerations questions have already arisen, and
may be expected hereafter to grow out of the public lands, which involve
the rights of the new States and the powers of the General Government,
and unless a liberal policy be now adopted there is danger that these
questions may speedily assume an importance not now generally
anticipated. The influence of a great sectional interest, when brought
into full action, will be found more dangerous to the harmony and union
of the States than any other cause of discontent, and it is the part of
wisdom and sound policy to foresee its approaches and endeavor if
possible to counteract them.

Of the various schemes which have been hitherto proposed in regard to
the disposal of the public lands, none has yet received the entire
approbation of the National Legislature. Deeply impressed with the
importance of a speedy and satisfactory arrangement of the subject, I
deem it my duty on this occasion to urge it upon your consideration, and
to the propositions which have been heretofore suggested by others to
contribute those reflections which have occurred to me, in the hope that
they may assist you in your future deliberations.

It seems to me to be our policy that the public lands shall cease as
soon as practicable to be a source of revenue, and that they be sold to
settlers in limited parcels at a price barely sufficient to reimburse to
the United States the expense of the present system and the cost arising
under our Indian compacts. The advantages of accurate surveys and
undoubted titles now secured to purchasers seem to forbid the abolition
of the present system, because none can be substituted which will more
perfectly accomplish these important ends. It is desirable, however,
that in convenient time this machinery be withdrawn from the States, and
that the right of soil and the future disposition of it be surrendered
to the States respectively in which it lies.

The adventurous and hardy population of the West, besides contributing
their equal share of taxation under our impost system, have in the
progress of our Government, for the lands they occupy, paid into the
Treasury a large proportion of $40,000,000, and of the revenue received
therefrom but a small part has been expended among them. When to the
disadvantage of their situation in this respect we add the consideration
that it is their labor alone which gives real value to the lands, and
that the proceeds arising from their sale are distributed chiefly among
States which had not originally any claim to them, and which have
enjoyed the undivided emolument arising from the sale of their own
lands, it can not be expected that the new States will remain longer
contented with the present policy after the payment of the public debt.
To avert the consequences which may be apprehended from this cause, to
pub an end for ever to all partial and interested legislation on the
subject, and to afford to every American citizen of enterprise the
opportunity of securing an independent freehold, it seems to me,
therefore, best to abandon the idea of raising a future revenue out of
the public lands.

In former messages I have expressed my conviction that the Constitution
does not warrant the application of the funds of the General Government
to objects of internal improvement which are not national in their
character, and, both as a means of doing justice to all interests and
putting an end to a course of legislation calculated to destroy the
purity of the Government, have urged the necessity of reducing the whole
subject to some fixed and certain rule. As there never will occur a
period, perhaps, more propitious than the present to the accomplishment
of this object, I beg leave to press the subject again upon your
attention.

Without some general and well-defined principles ascertaining those
objects of internal improvement to which the means of the nation may be
constitutionally applied, it is obvious that the exercise of the power
can never be satisfactory. Besides the danger to which it exposes
Congress of making hasty appropriations to works of the character of
which they may be frequently ignorant, it promotes a mischievous and
corrupting influence upon elections by holding out to the people the
fallacious hope that the success of a certain candidate will make
navigable their neighboring creek or river, bring commerce to their
doors, and increase the value of their property. It thus favors
combinations to squander the treasure of the country upon a multitude of
local objects, as fatal to just legislation as to the purity of public
men.

If a system compatible with the Constitution can not be devised which is
free from such tendencies, we should recollect that that instrument
provides within itself the mode of its amendment, and that there is,
therefore, no excuse for the assumption of doubtful powers by the
General Government. If those which are clearly granted shall be found
incompetent to the ends of its creation, it can at any time apply for
their enlargement; and there is no probability that such an application,
if founded on the public interest, will ever be refused. If the
propriety of the proposed grant be not sufficiently apparent to command
the assent of 3/4 of the States, the best possible reason why the power
should not be assumed on doubtful authority is afforded; for if more
than one quarter of the States are unwilling to make the grant its
exercise will be productive of discontents which will far over-balance
any advantages that could be derived from it. All must admit that there
is nothing so worthy of the constant solicitude of this Government as
the harmony and union of the people.

Being solemnly impressed with the conviction that the extension of the
power to make internal improvements beyond the limit I have suggested,
even if it be deemed constitutional, is subversive of the best interests
of our country, I earnestly recommend to Congress to refrain from its
exercise in doubtful cases, except in relation to improvements already
begun, unless they shall first procure from the States such an amendment
of the Constitution as will define its character and prescribe its
bounds. If the States feel themselves competent to these objects, why
should this Government wish to assume the power? If they do not, then
they will not hesitate to make the grant. Both Governments are the
Governments of the people; improvements must be made with the money of
the people, and if the money can be collected and applied by those more
simple and economical political machines, the State governments, it will
unquestionably be safer and better for the people than to add to the
splendor, the patronage, and the power of the General Government. But if
the people of the several States think otherwise they will amend the
Constitution, and in their decision all ought cheerfully to acquiesce.

For a detailed and highly satisfactory view of the operations of the War
Department I refer you to the accompanying report of the Secretary of
War.

The hostile incursions of the Sac and Fox Indians necessarily led to the
interposition of the Government. A portion of the troops, under Generals
Scott and Atkinson, and of the militia of the State of Illinois were
called into the field. After a harassing warfare, prolonged by the
nature of the country and by the difficulty of procuring subsistence,
the Indians were entirely defeated, and the disaffected band dispersed
or destroyed. The result has been creditable to the troops engaged in
the service. Severe as is the lesson to the Indians, it was rendered
necessary by their unprovoked aggressions, and it is to be hoped that
its impression will be permanent and salutary.

This campaign has evinced the efficient organization of the Army and its
capacity for prompt and active service. Its several departments have
performed their functions with energy and dispatch, and the general
movement was satisfactory.

Our fellow citizens upon the frontiers were ready, as they always are,
in the tender of their services in the hour of danger. But a more
efficient organization of our militia system is essential to that
security which is one of the principal objects of all governments.
Neither our situation nor our institutions require or permit the
maintenance of a large regular force. History offers too many lessons of
the fatal result of such a measure not to warn us against its adoption
here. The expense which attends it, the obvious tendency to employ it
because it exists and thus to engage in unnecessary wars, and its
ultimate danger to public liberty will lead us, I trust, to place our
principal dependence for protection upon the great body of the citizens
of the Republic. If in asserting rights or in repelling wrongs war
should come upon us, our regular force should be increased to an extent
proportional to the emergency, and our present small Army is a nucleus
around which such force could be formed and embodied. But for the
purposes of defense under ordinary circumstances we must rely upon the
electors of the country. Those by whom and for whom the Government was
instituted and is supported will constitute its protection in the hour
of danger as they do its check in the hour of safety.

But it is obvious that the militia system is imperfect. Much time is
lost, much unnecessary expense incurred, and much public property wasted
under the present arrangement. Little useful knowledge is gained by the
musters and drills as now established, and the whole subject evidently
requires a thorough examination. Whether a plan of classification
remedying these defects and providing for a system of instruction might
not be adopted is submitted to the consideration of Congress. The
Constitution has vested in the General Government an independent
authority upon the subject of the militia which renders its action
essential to the establishment or improvement of the system, and I
recommend the matter to your consideration in the conviction that the
state of this important arm of the public defense requires your
attention.

I am happy to inform you that the wise and humane policy of transferring
from the eastern to the western side of the Mississippi the remnants of
our aboriginal tribes, with their own consent and upon just terms, has
been steadily pursued, and is approaching, I trust, its consummation. By
reference to the report of the Secretary of War and to the documents
submitted with it you will see the progress which has been made since
your last session in the arrangement of the various matters connected
with our Indian relations. With one exception every subject involving
any question of conflicting jurisdiction or of peculiar difficulty has
been happily disposed of, and the conviction evidently gains ground
among the Indians that their removal to the country assigned by the
United States for their permanent residence furnishes the only hope of
their ultimate prosperity.

With that portion of the Cherokees, however, living within the State of
Georgia it has been found impracticable as yet to make a satisfactory
adjustment. Such was my anxiety to remove all the grounds of complaint
and to bring to a termination the difficulties in which they are
involved that I directed the very liberal propositions to be made to
them which accompany the documents herewith submitted. They can not but
have seen in these offers the evidence of the strongest disposition on
the part of the Government to deal justly and liberally with them. An
ample indemnity was offered for their present possessions, a liberal
provision for their future support and improvement, and full security
for their private and political rights. What ever difference of opinion
may have prevailed respecting the just claims of these people, there
will probably be none respecting the liberality of the propositions, and
very little respecting the expediency of their immediate acceptance.
They were, however, rejected, and thus the position of these Indians
remains unchanged, as do the views communicated in my message to the
Senate of February 22d, 1831.

I refer you to the annual report of the Secretary of the Navy, which
accompanies this message, for a detail of the operations of that branch
of the service during the present year.

Besides the general remarks on some of the transactions of our Navy
presented in the view which has been taken of our foreign relations, I
seize this occasion to invite to your notice the increased protection
which it has afforded to our commerce and citizens on distant seas
without any augmentation of the force in commission. In the gradual
improvement of its pecuniary concerns, in the constant progress in the
collection of materials suitable for use during future emergencies, and
in the construction of vessels and the buildings necessary to their
preservation and repair, the present state of this branch of the service
exhibits the fruits of that vigilance and care which are so
indispensable to its efficiency. Various new suggestions, contained in
the annexed report, as well as others heretofore to Congress, are worthy
of your attention, but none more so than that urging the renewal for
another term of six years of the general appropriation for the gradual
improvement of the Navy.

From the accompanying report of the Post Master General you will also
perceive that that Department continues to extend its usefulness without
impairing its resources or lessening the accommodations which it affords
in the secure and rapid transportation of the mail.

I beg leave to call the attention of Congress to the views heretofore
expressed in relation to the mode of choosing the President and Vice-
President of the United States, and to those respecting the tenure of
office generally. Still impressed with the justness of those views and
with the belief that the modifications suggested on those subjects if
adopted will contribute to the prosperity and harmony of the country, I
earnestly recommend them to your consideration at this time.

I have heretofore pointed out defects in the law for punishing official
frauds, especially within the District of Columbia. It has been found
almost impossible to bring notorious culprits to punishment, and,
according to a decision of the court for this District, a prosecution is
barred by a lapse of two years after the fraud has been committed. It
may happen again, as it has already happened, that during the whole two
years all the evidences of the fraud may be in the possession of the
culprit himself. However proper the limitation may be in relation to
private citizens, it would seem that it ought not to commence running in
favor of public officers until they go out of office.

The judiciary system of the United States remains imperfect. Of the 9
Western and South Western States, three only enjoy the benefits of a
circuit court. Ohio, Kentucky, and Tennessee are embraced in the general
system, but Indiana, Illinois, Missouri, Alabama, Mississippi, and
Louisiana have only district courts. If the existing system be a good
one, why should it not be extended? If it be a bad one, why is it
suffered to exist? The new States were promised equal rights and
privileges when they came into the Union, and such are the guaranties of
the Constitution. Nothing can be more obvious than the obligation of the
General Government to place all the States on the same footing in
relation to the administration of justice, and I trust this duty will be
neglected no longer.

On many of the subjects to which your attention is invited in this
communication it is a source of gratification to reflect that the steps
to be now adopted are uninfluenced by the embarrassments entailed upon
the country by the wars through which it has passed. In regard to most
of our great interests we may consider ourselves as just starting in our
career, and after a salutary experience about to fix upon a permanent
basis the policy best calculated to promote the happiness of the people
and facilitate their progress toward the most complete enjoyment of
civil liberty. On an occasion so interesting and important in our
history, and of such anxious concern to the friends of freedom
throughout the world, it is our imperious duty to lay aside all selfish
and local considerations and be guided by a lofty spirit of devotion to
the great principles on which our institutions are founded.

That this Government may be so administered as to preserve its
efficiency in promoting and securing these general objects should be the
only aim of our ambition, and we can not, therefore, too carefully
examine its structure, in order that we may not mistake its powers or
assume those which the people have reserved to themselves or have
preferred to assign to other agents. We should bear constantly in mind
the fact that the considerations which induced the framers of the
Constitution to withhold from the General Government the power to
regulate the great mass of the business and concerns of the people have
been fully justified by experience, and that it can not now be doubted
that the genius of all our institutions prescribes simplicity and
economy as the characteristics of the reform which is yet to be effected
in the present and future execution of the functions bestowed upon us by
the Constitution.

Limited to a general superintending power to maintain peace at home and
abroad, and to prescribe laws on a few subjects of general interest not
calculated to restrict human liberty, but to enforce human rights, this
Government will find its strength and its glory in the faithful
discharge of these plain and simple duties. Relieved by its protecting
shield from the fear of war and the apprehension of oppression, the free
enterprise of our citizens, aided by the State sovereignties, will work
out improvements and ameliorations which can not fail to demonstrate
that the great truth that the people can govern themselves is not only
realized in our example, but that it is done by a machinery in
government so simple and economical as scarcely to be felt. That the
Almighty Ruler of the Universe may so direct our deliberations and
over-rule our acts as to make us instrumental in securing a result so
dear to mankind is my most earnest and sincere prayer.

***

State of the Union Address
Andrew Jackson
December 3, 1833

Fellow Citizens of the Senate and of the House of Representatives:

On your assembling to perform the high trusts which the people of the
United States have confided to you, of legislating for their common
welfare, it gives me pleasure to congratulate you upon the happy
condition of our beloved country. By the favor of Divine Providence
health is again restored to us, peace reigns within our borders,
abundance crowns the labors of our fields, commerce and domestic
industry flourish and increase, and individual happiness rewards the
private virtue and enterprise of our citizens.

Our condition abroad is no less honorable than it is prosperous at home.
Seeking nothing that is not right and determined to submit to nothing
that is wrong, but desiring honest friendships and liberal intercourse
with all nations, the United States have gained throughout the world the
confidence and respect which are due to a policy so just and so
congenial to the character of the American people and to the spirit of
their institutions.

In bringing to your notice the particular state of our foreign affairs,
it affords me high gratification to inform you that they are in a
condition which promises the continuance of friendship with all nations.

With Great Britain the interesting question of our North East boundary
remains still undecided. A negotiation, however, upon that subject has
been renewed since the close of the last Congress, and a proposition has
been submitted to the British Government with the view of establishing,
in conformity with the resolution of the Senate, the line designated by
the treaty of 1783. Though no definitive answer has been received, it
may be daily looked for, and I entertain a hope that the overture may
ultimately lead to a satisfactory adjustment of this important matter.

I have the satisfaction to inform you that a negotiation which, by
desire of the House of Representatives, was opened some years ago with
the British Government, for the erection of light houses on the Bahamas,
has been successful. Those works, when completed, together with those
which the United States have constructed on the western side of the Gulf
of Florida, will contribute essentially to the safety of navigation in
that sea. This joint participation in establishments interesting to
humanity and beneficial to commerce is worthy of two enlightened
nations, and indicates feelings which can not fail to have a happy
influence upon their political relations. It is gratifying to the
friends of both to perceive that the intercourse between the two people
is becoming daily more extensive, and that sentiments of mutual good
will have grown up befitting their common origin and justifying the hope
that by wise counsels on each side not only unsettled questions may be
satisfactorily terminated, but new causes of misunderstanding prevented.

Not withstanding that I continue to receive the most amicable assurances
from the Government of France, and that in all other respects the most
friendly relations exist between the United States and that Government,
it is to be regretted that the stipulations of the convention concluded
on July 4th, 1831 remain in some important parts unfulfilled.

By the second article of that convention it was stipulated that the sum
payable to the United States should be paid at Paris, in six annual
installments, into the hands of such person or persons as should be
authorized by the Government of the United States to receive it, and by
the same article the first installment was payable on February 2d, 1833.
By the act of Congress of July 13th, 1832 it was made the duty of the
Secretary of the Treasury to cause the several installments, with the
interest thereon, to be received from the French Government and
transferred to the United States in such manner as he may deem best; and
by the same act of Congress the stipulations on the part of the United
States in the convention were in all respects fulfilled. Not doubting
that a treaty thus made and ratified by the two Governments, and
faithfully executed by the United States, would be promptly complied
with by the other party, and desiring to avoid the risk and expense of
intermediate agencies, the Secretary of the Treasury deemed it advisable
to receive and transfer the first installment by means of a draft upon
the French minister of finance.

A draft for this purpose was accordingly drawn in favor of the cashier
of the Bank of the United States for the amount accruing to the United
States out of the first installment, and the interest payable with it.
This bill was not drawn at Washington until five days after the
installment was payable at Paris, and was accompanied by a special
authority from the President authorizing the cashier or his assigns to
receive the amount. The mode thus adopted of receiving the installment
was officially made known to the French Government by the American
charge d'affaires at Paris, pursuant to instructions from the Department
of State. The bill, however, though not presented for payment until
March 23d, 1833, was not paid, and for the reason assigned by the French
minister of finance that no appropriation had been made by the French
Chambers. It is not known to me that up to that period any appropriation
had been required of the Chambers, and although a communication was
subsequently made to the Chambers by direction of the King, recommending
that the necessary provision should be made for carrying the convention
into effect, it was at an advanced period of the session, and the
subject was finally postponed until the next meeting of the Chambers.

Not withstanding it has been supposed by the French ministry that the
financial stipulations of the treaty can not be carried into effect
without an appropriation by the Chambers, it appears to me to be not
only consistent with the character of France, but due to the character
of both Governments, as well as to the rights of our citizens, to treat
the convention, made and ratified in proper form, as pledging the good
faith of the French Government for its execution, and as imposing upon
each department an obligation to fulfill it; and I have received
assurances through our charge d'affaires at Paris and the French
minister plenipotentiary at Washington, and more recently through the
minister of the United States at Paris, that the delay has not proceeded
from any indisposition on the part of the King and his ministers to
fulfill their treaty, and that measures will be presented at the next
meeting of the Chambers, and with a reasonable hope of success, to
obtain the necessary appropriation.

It is necessary to state, however, that the documents, except certain
lists of vessels captured, condemned, or burnt at sea, proper to
facilitate the examination and liquidation of the reclamations comprised
in the stipulations of the convention, and which by the 6th article
France engaged to communicate to the United States by the intermediary
of the legation, though repeatedly applied for by the American charge
d'affaires under instructions from this Government, have not yet been
communicated; and this delay, it is apprehended, will necessarily
prevent the completion of the duties assigned to the commissioners
within the time at present prescribed by law.

The reasons for delaying to communicate these documents have not been
explicitly stated, and this is the more to be regretted as it is not
understood that the interposition of the Chambers is in any manner
required for the delivery of those papers.

Under these circumstances, in a case so important to the interests of
our citizens and to the character of our country, and under
disappointments so unexpected, I deemed it my duty, however I might
respect the general assurances to which I have adverted, no longer to
delay the appointment of a minister plenipotentiary to Paris, but to
dispatch him in season to communicate the result of his application to
the French Government at an early period of your session. I accordingly
appointed a distinguished citizen for this purpose, who proceeded on his
mission in August last and was presented to the King early in the month
of October. He is particularly instructed as to all matters connected
with the present posture of affairs, and I indulge the hope that with
the representations he is instructed to make, and from the disposition
manifested by the King and his ministers in their recent assurances to
our minister at Paris, the subject will be early considered, and
satisfactorily disposed of at the next meeting of the Chambers.

As this subject involves important interests and has attracted a
considerable share of the public attention, I have deemed it proper to
make this explicit statement of its actual condition, and should I be
disappointed in the hope now entertained the subject will be again
brought to the notice of Congress in such manner as the occasion may
require.

The friendly relations which have always been maintained between the
United States and Russia have been further extended and strengthened by
the treaty of navigation and commerce concluded on December 6th, 1832,
and sanctioned by the Senate before the close of its last session. The
ratifications having been since exchanged, the liberal provisions of the
treaty are now in full force, and under the encouragement which they
have secured a flourishing and increasing commerce, yielding its
benefits to the enterprise of both nations, affords to each the just
recompense of wise measures, and adds new motives for that mutual
friendship which the two countries have hitherto cherished toward each
other.

It affords me peculiar satisfaction to state that the Government of
Spain has at length yielded to the justice of the claims which have been
so long urged in behalf of our citizens, and has expressed a willingness
to provide an indemnification as soon as the proper amount can be agreed
upon. Upon this latter point it is probable an understanding had taken
place between the minister of the United States and the Spanish
Government before the decease of the late King of Spain; and, unless
that event may have delayed its completion, there is reason to hope that
it may be in my power to announce to you early in your present session
the conclusion of a convention upon terms not less favorable than those
entered into for similar objects with other nations. That act of justice
would well accord with the character of Spain, and is due to the United
States from their ancient friend. It could not fail to strengthen the
sentiments of amity and good will between the two nations which it is so
much the wish of the United States to cherish and so truly the interest
of both to maintain.

By the first section of an act of Congress passed on July 13th, 1832 the
tonnage duty on Spanish ships arriving from the ports of Spain previous
to October 20th, 1817, being five cents per ton. That act was intended
to give effect on our side to an arrangement made with the Spanish
Government by which discriminating duties of tonnage were to be
abolished in the ports of the United States and Spain on he vessels of
the two nations. Pursuant to that arrangement, which was carried into
effect on the part of Spain on May 20th, 1832, by a royal order dated
April 29th, 1832, American vessels in the ports of Spain have paid five
cents per ton, which rate of duty is also paid in those ports by Spanish
ships; but as American vessels pay no tonnage duty in the ports of the
United States, the duty of five cents payable in our ports by Spanish
vessels under the act above mentioned is really a discriminating duty,
operating to the disadvantage of Spain.

Though no complaint has yet been made on the part of Spain, we are not
the less bound by the obligations of good faith to remove the
discrimination, and I recommend that the act be amended accordingly. As
the royal order above alluded to includes the ports of the Balearic and
Canary islands as well as those of Spain, it would seem that the
provisions of the act of Congress should be equally extensive, and that
for the repayments of such duties as may have been improperly received
an addition should be made to the sum appropriated at the last session
of Congress for refunding discriminating duties.

As the arrangement referred to, however, did not embrace the islands of
Cuba and Puerto Rico, discriminating duties to the prejudice of American
shipping continue to be levied there. From the extent of the commerce
carried on between the United States and those islands, particularly the
former, this discrimination causes serious injury to one of those great
national interests which it has been considered an essential part of our
policy to cherish, and has given rise to complaints on the part of our
merchants. Under instructions given to our minister at Madrid, earnest
representations have been made by him to the Spanish Government upon
this subject, and there is reason to expect, from the friendly
disposition which is entertained toward this country, that a beneficial
change will be produced.

The disadvantage, however, to which our shipping is subjected by the
operation of these discriminating duties requires that they be met by
suitable countervailing duties during your present session, power being
at the same time vested in the President to modify or discontinue them
as the discriminating duties on American vessels or their cargoes may be
modified or discontinued at those islands. Intimations have been given
to the Spanish Government that the United States may be obliged to
resort to such measures as are of necessary self-defense, and there is
no reason to apprehend that it would be unfavorably received. The
proposed proceeding if adopted would not be permitted, however, in any
degree to induce a relaxation in the efforts of our minister to effect a
repeal of this irregularity by friendly negotiation, and it might serve
to give force to his representations by showing the dangers to which
that valuable trade is exposed by the obstructions and burdens which a
system of discriminating and countervailing duties necessarily produces.

The selection and preparation of the Florida archives for the purpose of
being delivered over to the United States, in conformity with the royal
order as mentioned in my last annual message, though in progress, has
not yet been completed. This delay has been produced partly by causes
which were unavoidable, particularly the prevalence of the cholera at
Havana; but measures have been taken which it is believed will expedite
the delivery of those important records.

Congress were informed at the opening of the last session that "owing,
as was alleged, to embarrassments in the finances of Portugal,
consequent upon the civil war in which that nation was engaged", payment
had been made of only one installment of the amount which the Portuguese
Government had stipulated to pay for indemnifying our citizens for
property illegally captured in the blockade of Terceira. Since that time
a postponement for two years, with interest, of the two remaining
installments was requested by the Portuguese Government, and as a
consideration it offered to stipulate that rice of the United States
should be admitted into Portugal at the same duties as Brazilian rice.
Being satisfied that no better arrangement could be made, my consent was
given, and a royal order of the King of Portugal was accordingly issued
on February 4th, 1833 for the reduction of the duty on rice of the
United States. It would give me great pleasure if in speaking of that
country, in whose prosperity the United States are so much interested,
and with whom a long-subsisting, extensive, and mutually advantageous
commercial intercourse has strengthened the relation of friendship, I
could announce to you the restoration of its internal tranquillity.

Subsequently to the commencement of the last session of Congress the
final installment payable by Denmark under the convention of March 28th,
1830 was received. The commissioners for examining the claims have since
terminated their labors, and their awards have been paid at the Treasury
as they have been called for. The justice rendered to our citizens by
that Government is thus completed, and a pledge is thereby afforded for
the maintenance of that friendly intercourse becoming the relations that
the two nations mutually bear to each other.

It is satisfactory to inform you that the Danish Government have
recently issued an ordinance by which the commerce with the island of
St. Croix is placed on a more liberal footing than heretofore. This
change can not fail to prove beneficial to the trade between the United
States and that colony, and the advantages likely to flow from it may
lead to greater relaxations in the colonial systems of other nations.

The ratifications of the convention with the King of the two Sicilies
have been duly exchanged, and the commissioners appointed for examining
the claims under it have entered upon the duties assigned to them by
law. The friendship that the interests of the two nations require of
them being now established, it may be hoped that each will enjoy the
benefits which a liberal commerce should yield to both.

A treaty of amity and commerce between the United States and Belgium was
concluded during the last winter and received the sanction of the
Senate, but the exchange of the ratifications has been hitherto delayed,
in consequence, in the first instance, of some delay in the reception of
the treaty at Brussels, and, subsequently, of the absence of the Belgian
minister of foreign affairs at the important conferences in which his
Government is engaged at London. That treaty does but embody those
enlarged principles of friendly policy which it is sincerely hoped will
always regulate the conduct of the two nations having such strong
motives to maintain amicable relations toward each other and so
sincerely desirous to cherish them.

With all the other European powers with whom the United States have
formed diplomatic relations and with the Sublime Porte the best
understanding prevails. From all I continue to receive assurances of
good will toward the United States--assurances which it gives me no less
pleasure to reciprocate than to receive. With all, the engagements which
have been entered into are fulfilled with good faith on both sides.
Measures have also been taken to enlarge our friendly relations and
extend our commercial intercourse with other States. The system we have
pursued of aiming at no exclusive advantages, of dealing with all on
terms of fair and equal reciprocity, and of adhering scrupulously to all
our engagements is well calculated to give success to efforts intended
to be mutually beneficial.

The wars of which the southern part of this continent was so long the
theater, and which were carried on either by the mother country against
the States which had formerly been her colonies or by the States against
each other, having terminated, and their civil dissensions having so far
subsided as with few exceptions no longer to disturb the public
tranquillity, it is earnestly hoped those States will be able to employ
themselves without interruption in perfecting their institutions,
cultivating the arts of peace, and promoting by wise councils and able
exertions the public and private prosperity which their patriotic
struggles so well entitle them to enjoy.

With those States our relations have under-gone but little change during
the present year. No reunion having yet taken place between the States
which composed the Republic of Colombia, our charge d'affaires at Bogota
has been accredited to the Government of New Grenada, and we have,
therefore, no diplomatic relations with Venezuela and Equator, except as
they may be included in those heretofore formed with the Colombian
Republic.

It is understood that representatives from the three states were about
to assemble at Bogota to confer on the subject of their mutual
interests, particularly that of their union, and if the result should
render it necessary, measures will be taken on our part to preserve with
each that friendship and those liberal commercial connections which it
has been the constant desire of the United States to cultivate with
their sister Republics of this hemisphere. Until the important question
of reunion shall be settled, however, the different matters which have
been under discussion between the United States and the Republic of
Colombia, or either of the States which composed it, are not likely to
be brought to a satisfactory issue.

In consequence of the illness of the charge d'affaires appointed to
Central America at the last session of Congress, he was prevented from
proceeding on his mission until the month of October. It is hoped,
however, that he is by this time at his post, and that the official
intercourse, unfortunately so long interrupted, has been thus renewed on
the part of the two nations so amicably and advantageously connected by
engagements founded on the most enlarged principles of commercial
reciprocity.

It is gratifying to state that since my last annual message some of the
most important claims of our fellow citizens upon the Government of
Brazil have been satisfactorily adjusted, and a reliance is placed on
the friendly dispositions manifested by it that justice will also be
done in others. No new causes of complaint have arisen, and the trade
between the two countries flourishes under the encouragement secured to
it by the liberal provisions of the treaty.

It is cause of regret that, owing, probably, to the civil dissensions
which have occupied the attention of the Mexican Government, the time
fixed by the treaty of limits with the United States for the meeting of
the commissioners to define the boundaries between the two nations has
been suffered to expire without the appointment of any commissioners on
the part of that Government. While the true boundary remains in doubt by
either party it is difficult to give effect to those measures which are
necessary to the protection and quiet of our numerous citizens residing
near that frontier. The subject is one of great solicitude to the United
States, and will not fail to receive my earnest attention.

The treaty concluded with Chili and approved by the Senate at its last
session was also ratified by the Chilian Government, but with certain
additional and explanatory articles of a nature to have required it to
be again submitted to the Senate. The time limited for the exchange of
the ratification, however, having since expired, the action of both
Governments on the treaty will again become necessary.

The negotiations commenced with the Argentine Republic relative to the
outrages committed on our vessels engaged in the fisheries at the
Falkland Islands by persons acting under the color of its authority, as
well as the other matters in controversy between the two Governments,
have been suspended by the departure of the charge d'affaires of the
United States from Buenos Ayres. It is understood, however, that a
minister was subsequently appointed by that Government to renew the
negotiation in the United States, but though daily expected he has not
yet arrived in this country.

With Peru no treaty has yet been formed, and with Bolivia no diplomatic
intercourse has yet been established. It will be my endeavor to
encourage those sentiments of amity and that liberal commerce which
belong to the relations in which all the independent States of this
continent stand toward each other.

I deem it proper to recommend to your notice the revision of our
consular system. This has become an important branch of the public
service, in as much as it is intimately connected with the preservation
of our national character abroad, with the interest of our citizens in
foreign countries, with the regulation and care of our commerce, and
with the protection of our sea men. At the close of the last session of
Congress I communicated a report from the Secretary of State upon the
subject, to which I now refer, as containing information which may be
useful in any inquiries that Congress may see fit to institute with a
view to a salutary reform of the system.

It gives me great pleasure to congratulate you upon the prosperous
condition of the finances of the country, as will appear from the report
which the Secretary of the Treasury will in due time lay before you. The
receipts into the Treasury during the present year will amount to more
than $32,000,000. The revenue derived from customs will, it is believed,
be more than $28,000,000, and the public lands will yield about
$3,0900,000. The expenditures within the year for all objects, including
$2,572,240.99 on account of the public debt, will not amount to
$25,000,000, and a large balance will remain in the Treasury after
satisfying all the appropriations chargeable on the revenue for the
present year.

The measures taken by the Secretary of the Treasury will probably enable
to pay off in the course of the present year the residue of the
exchanged 4.5% stock, redeemable on January 1st, 1834. It has therefore
been included in the estimated expenditures of this year, and forms a
part of the sum above stated to have been paid on account of the public
debt. The payment of this stock will reduce the whole debt of the United
States, funded and unfunded, to the sum of $4,760,082.08, and as
provision has already been made for the 4.5% stocks above mentioned, and
charged in the expenses of the present year, the sum last stated is all
that now remains of the national debt; and the revenue of the coming
year, together with the balance now in the Treasury, will be sufficient
to discharge it, after meeting the current expenses of the Government.
Under the power given to the commissioners of the sinking fund, it will,
I have no doubt, be purchased on favorable terms within the year.

From this view of the state of the finances and the public engagements
yet to be fulfilled you will perceive that if Providence permits me to
meet you at another session I shall have the high gratification of
announcing to you that the national debt is extinguished. I can not
refrain from expressing the pleasure I feel at the near approach of that
desirable event. The short period of time within which the public debt
will have been discharged is strong evidence of the abundant resources
of the country and of the prudence and economy with which the Government
has heretofore been administered. We have waged two wars since we became
a nation, with one of the most powerful kingdoms in the world, both of
them undertaken in defense of our dearest rights, been successfully
prosecuted and honorably terminated; and many of those who partook in
the first struggle as well as in the second will have lived to see the
last item of the debt incurred in these necessary but expensive
conflicts faithfully and honestly discharged. And we shall have the
proud satisfaction of bequeathing to the public servants who follow us
in the administration of the Government the rare blessing of a revenue
sufficiently abundant, raised without injustice or oppression to our
citizens, and unencumbered with any burdens but what they themselves
shall think proper to impose upon it.

The flourishing state of the finances ought not, however, to encourage
us to indulge in a lavish expenditure of the public treasure. The
receipts of the present year do not furnish the test by which we are to
estimate the income of the next. The changes made in our revenue system
by the acts of Congress of 1832 and 1833, and more especially by the
former, have swelled the receipts of the present year far beyond the
amount to be expected in future years upon the reduced tariff of duties.
The shortened credits on revenue bonds and the cash duties on woolens
which were introduced by the act of 1832, and took effect on March 4th,
1832, have brought large sums into the Treasury in 1833, which,
according to the credits formerly given, would not have been payable
until 1834, and would have formed a part of the income of that year.
These causes would of themselves produce a great diminution of the
receipts in the year 1834 as compared with the present one, and they
will be still more diminished by the reduced rates of duties which take
place on January 1st, 1834 on some of the most important and productive
articles.

Upon the best estimates that can be made the receipts of the next year,
with the aid of the unappropriated amount now in the Treasury, will not
be much more than sufficient to meet the expenses of the year and pay
the small remnant of the national debt which yet remains unsatisfied. I
can not, therefore, recommend to you any alteration in the present
tariff of duties. The rate as now fixed by law on the various articles
was adopted at the last session of Congress, as a matter of compromise,
with unusual unanimity, and unless it is found to produce more than the
necessities of the Government call for there would seem to be no reason
at this time to justify a change.

But while I forbear to recommend any further reduction of the duties
beyond that already provided for by the existing laws, I must earnestly
and respectfully press upon Congress the importance of abstaining from
all appropriations which are not absolutely required for the public
interest and authorized by the powers clearly delegated to the United
States. We are beginning a new era in our Government. The national debt,
which has so long been a burden on the Treasury, will be finally
discharged in the course of the ensuing year. No more memory will
afterwards be needed than what may be necessary to meet the ordinary
expenses of the Government. Now, then, is the proper moment to fix our
system of expenditure on firm and durable principles, and I can not too
strongly urge the necessity of a rigid economy and an inflexible
determination not to enlarge the income beyond the real necessities of
the Government and not to increase the wants of the Government by
unnecessary and profuse expenditures.

If a contrary course should be pursued, it may happen that the revenue
of 1834 will fall short of the demands upon it, and after reducing the
tariff in order to lighten the burdens of the people, and providing for
a still further reduction to take effect hereafter, it would be much to
be deplored if at the end of another year we should find ourselves
obliged to retrace our steps and impose additional taxes to meet
unnecessary expenditures.

It is my duty on this occasion to call your attention to the destruction
of the public building occupied by the Treasury Department, which
happened since the last adjournment of Congress. A thorough inquiry into
the causes of this loss was directed and made at the time, the result of
which will be duly communicated to you. I take pleasure, however, in
stating here that by the laudable exertions of the officers of the
Department and many of the citizens of the District but few papers were
lost, and none that will materially affect the public interest.

The public convenience requires that another building should be erected
as soon as practicable, and in providing for it it will be advisable to
enlarge in some manner the accommodations for the public officers of the
several Departments, and to authorize the erection of suitable
depositories for the safe-keeping of the public documents and records.

Since the last adjournment of Congress the Secretary of the Treasury has
directed the money of the United States to be deposited in certain State
banks designated by him, and he will immediately lay before you his
reasons for this direction. I concur with him entirely in the view he
has taken on the subject, and some months before the removal I urged
upon the Department the propriety of taking that step. The near approach
of the day on which the charger will expire, as well as the conduct of
the bank, appeared to me to call for this measure upon the high
considerations of public interest and public duty. The extent of its
misconduct, however, although known to be great, was not at that time
fully developed by proof. It was not until late in the month of August
that I received from the Government directors an official report
establishing beyond question that this great and powerful institution
had been actively engaged in attempting to influence the elections of
the public officers by means of its money, and that, in violation of the
express provisions of its charter, it had by a formal resolution placed
its funds at the disposition of its president to be employed in
sustaining the political power of the bank. A copy of this resolution is
contained in the report of the Government directors before referred to,
and how ever the object may be disguised by cautious language, no one
can doubt that this money was in truth intended for electioneering
purposes, and the particular uses to which it was proved to have been
applied abundantly show that it was so understood. Not only was the
evidence complete as to the past application of the money and power of
the bank to electioneering purposes, but that the resolution of the
board of directors authorized the same course to be pursued in future.

It being thus established by unquestionable proof that the Bank of the
United States was converted into a permanent electioneering engine, it
appeared to me that the path of duty which the executive department of
the Government ought to pursue was not doubtful. As by the terms of the
bank charter no officer but the Secretary of the Treasury could remove
the deposits, it seemed to me that this authority ought to be at once
exerted to deprive that great corporation of the support and countenance
of the Government in such an use of its and such an exertion of its
power. In this point of the case the question is distinctly presented
whether the people of the United States are to govern through
representatives chosen by their unbiased suffrages or whether the money
and power of a great corporation are to be secretly exerted to influence
their judgment and control their decisions. It must now be determined
whether the bank is to have its candidates for all offices in the
country, from the highest to the lowest, or whether candidates on both
sides of political questions shall be brought forward as heretofore and
supported by the usual means.

At this time the efforts of the bank to control public opinion, through
the distresses of some and the fears of others, are equally apparent,
and, if possible, more objectionable. By a curtailment of its
accommodations more rapid than any emergency requires, and even while it
retains specie to an almost unprecedented amount in its vaults, it is
attempting to produce great embarrassment in one portion of the
community, while through presses known to have been sustained by its
money it attempts by unfounded alarms to create a panic in all.

These are the means by which it seems to expect that it can force a
restoration of the deposits, and as a necessary consequence extort from
Congress a renewal of its charter. I am happy to know that through the
good sense of our people the effort to get up a panic has hitherto
failed, and that through the increased accommodations which the State
banks have been enabled to afford, no public distress has followed the
exertions of the bank, and it can not be doubted that the exercise of
its power and the expenditure of its money, as well as its efforts to
spread groundless alarm, will be met and rebuked as they deserve. In my
own sphere of duty I should feel myself called on by the facts disclosed
to order a scire facias against the bank, with a view to put an end to
the chartered rights it has so palpably violated, were it not that the
charter itself will expire as soon as a decision would probably be
obtained from the court of last resort.

I called the attention of Congress to this subject in my last annual
message, and informed them that such measures as were within the reach
of the Secretary of the Treasury had been taken to enable him to judge
whether the public deposits in the Bank of the United States were
entirely safe; but that as his single powers might be inadequate to the
object, I recommended the subject to Congress as worthy of their serious
investigation, declaring it as my opinion that an inquiry into the
transactions of that institution, embracing the branches as well as the
principal bank, was called for by the credit which was given throughout
the country to many serious charges impeaching their character, and
which, if true, might justly excite the apprehension that they were no
longer a safe depository for the public money. The extent to which the
examination thus recommended was gone into is spread upon your journals,
and is too well known to require to be stated. Such as was made resulted
in a report from a majority of the Committee of Ways and Means touching
certain specified points only, concluding with a resolution that the
Government deposits might safely be continued in the Bank of the United
States. This resolution was adopted at the close of the session by the
vote of a majority of the House of Representatives.

Although I may not always be able to concur in the views of the public
interest or the duties of its agents which may be taken by the other
departments of the Government or either of its branches, I am, not
withstanding, wholly incapable of receiving otherwise than with the most
sincere respect all opinions or suggestions proceeding from such a
source, and in respect to none am I more inclined to do so than to the
House of Representatives. But it will be seen from the brief views at
this time taken of the subject by myself, as well as the more ample ones
presented by the Secretary of the Treasury, that the change in the
deposits which has been ordered has been deemed to be called for by
considerations which are not affected by the proceedings referred to,
and which, if correctly viewed by that Department, rendered its act a
matter of imperious duty.

Coming as you do, for the most part, immediately from the people and the
States by election, and possessing the fullest opportunity to know their
sentiments, the present Congress will be sincerely solicitous to carry
into full and fair effect the will of their constituents in regard to
this institution. It will be for those in whose behalf we all act to
decide whether the executive department of the Government, in the steps
which it has taken on this subject, has been found in the line of its
duty.

The accompanying report of the Secretary of War, with the documents
annexed to it, exhibits the operations of the War Department for the
past year and the condition of the various subjects intrusted to its
administration.

It will be seen from them that the Army maintains the character it has
heretofore acquired for efficiency and military knowledge. Nothing has
occurred since your last session to require its services beyond the
ordinary routine duties which upon the sea-board and the in-land
frontier devolve upon it in a time of peace. The system so wisely
adopted and so long pursued of constructing fortifications at exposed
points and of preparing and collecting the supplies necessary for the
military defense of the country, and thus providently furnishing in
peace the means of defense in war, has been continued with the usual
results. I recommend to your consideration the various subjects
suggested in the report of the Secretary of War. Their adoption would
promote the public service and meliorate the condition of the Army.

Our relations with the various Indian tribes have been undisturbed since
the termination of the difficulties growing out of the hostile
aggressions of the Sac and Fox Indians. Several treaties have been
formed for the relinquishment of territory to the United States and for
the migration of the occupants of the region assigned for their
residence West of the Mississippi. Should these treaties be ratified by
the Senate, provision will have been made for the removal of almost all
the tribes remaining E of that river and for the termination of many
difficult and embarrassing questions arising out of their anomalous
political condition.

It is to be hoped that those portions of two of the Southern tribes,
which in that event will present the only remaining difficulties, will
realize the necessity of emigration, and will speedily resort to it. My
original convictions upon this subject have been confirmed by the course
of events for several years, and experience is every day adding to their
strength. That those tribes can not exist surrounded by our settlements
and in continual contact with our citizens is certain. They have neither
the intelligence, the industry, the moral habits, nor the desire of
improvement which are essential to any favorable change in their
condition. Established in the midst of another and a superior race, and
without appreciating the causes of their inferiority or seeking to
control them, they must necessarily yield to the force of circumstances
and ere long disappear.

Such has been their fate heretofore, and if it is to be averted--and it
is--it can only be done by a general removal beyond our boundary and by
the reorganization of their political system upon principles adapted to
the new relations in which they will be placed. The experiment which has
been recently made has so far proved successful. The emigrants generally
are represented to be prosperous and contented, the country suitable to
their wants and habits, and the essential articles of subsistence easily
procured. When the report of the commissioners now engaged in
investigating the condition and prospects of these Indians and in
devising a plan for their intercourse and government is received, I
trust ample means of information will be in possession of the Government
for adjusting all the unsettled questions connected with this
interesting subject.

The operations of the Navy during the year and its present condition are
fully exhibited in the annual report from the Navy Department.

Suggestions are made by the Secretary of various improvements, which
deserve careful consideration, and most of which, if adopted, bid fair
to promote the efficiency of this important branch of the public
service. Among these are the new organization of the Navy Board, the
revision of the pay to officers, and a change in the period of time or
in the manner of making the annual appropriations, to which I beg leave
to call your particular attention.

The views which are presented on almost every portion of our naval
concerns, and especially on the amount of force and the number of
officers, and the general course of policy appropriate in the present
state of our country for securing the great and useful purposes of naval
protection in peace and due preparation for the contingencies of war,
meet with my entire approbation.

It will be perceived from the report referred to that the fiscal
concerns of the establishment are in an excellent condition, and it is
hoped that Congress may feel disposed to make promptly every suitable
provision desired either for preserving or improving the system.

The general Post Office Department has continued, upon the strength of
its own resources, to facilitate the means of communication between the
various portions of the Union with increased activity. The method,
however, in which the accounts of the transportation of the mail have
always been kept appears to have presented an imperfect view of its
expenses. It has recently been discovered that from the earliest records
of the Department the annual statements have been calculated to exhibit
an amount considerably short of the actual expense incurred for that
service. These illusory statements, together with the expense of
carrying into effect the law of the last session of Congress
establishing new mail routes, and a disposition on the part of the head
of the Department to gratify the wishes of the public in the extension
of mail facilities, have induced him to incur responsibilities for their
improvement beyond what the current resources of the Department would
sustain. As soon as he had discovered the imperfection of the method he
caused an investigation to be made of its results and applied the proper
remedy to correct the evil. It became necessary for him to withdraw some
of the improvements which he had made to bring the expenses of the
Department within its own resources. These expenses were incurred for
the public good, and the public have enjoyed their benefit. They are now
but partially suspended, and that where they may be discontinued with
the least inconvenience to the country.

The progressive increase in the income from postages has equaled the
highest expectations, and it affords demonstrative evidence of the
growing importance and great utility of this Department. The details are
exhibited in the accompanying report of the Post Master General.

The many distressing accidents which have of late occurred in that
portion of our navigation carried on by the use of steam power deserve
the immediate and unremitting attention of the constituted authorities
of the country. The fact that the number of those fatal disasters is
constantly increasing, not withstanding the great improvements which are
every where made in the machinery employed and in the rapid advances
which have made in that branch of science, shows very clearly that they
are in a great degree the result of criminal negligence on the part of
those by whom the vessels are navigated and to whose care and attention
the lives and property of our citizens are so extensively intrusted.

That these evils may be greatly lessened, if not substantially removed,
by means of precautionary and penal legislation seems to be highly
probably. So far, therefore, as the subject can be regarded as within
the constitutional purview of Congress I earnestly recommend it to your
prompt and serious consideration.

I would also call your attention to the views I have heretofore
expressed of the propriety of amending the Constitution in relation to
the mode of electing the President and the Vice-President of the United
States. Regarding it as all important to the future quiet and harmony of
the people that every intermediate agency in the election of these
officers should be removed and that their eligibility should be limited
to one term of either four or six years, I can not too earnestly invite
your consideration of the subject.

Trusting that your deliberations on all the topics of general interest
to which I have adverted, and such others as your more extensive
knowledge of the wants of our beloved country may suggest, may be
crowned with success, I tender you in conclusion the cooperation which
it may be in my power to afford them.

***

State of the Union Address
Andrew Jackson
December 1, 1834

Fellow Citizens of the Senate and of the House of Representatives:

In performing my duty at the opening of your present session it gives me
pleasure to congratulate you again upon the prosperous condition of our
beloved country. Divine Providence has favored us with general health,
with rich rewards in the fields of agriculture and in every branch of
labor, and with peace to cultivate and extend the various resources
which employ the virtue and enterprise of our citizens. Let us trust
that in surveying a scene so flattering to our free institutions our
joint deliberations to preserve them may be crowned with success.

Our foreign relations continue, with but few exceptions, to maintain the
favorable aspect which they bore in my last annual message, and promise
to extend those advantages which the principles that regulate our
intercourse with other nations are so well calculated to secure.

The question of our North East boundary is still pending with Great
Britain, and the proposition made in accordance with the resolution of
the Senate for the establishment of a line according to the treaty of
1783 has not been accepted by that Government. Believing that every
disposition is felt on both sides to adjust this perplexing question to
the satisfaction of all the parties interested in it, the hope is yet
indulged that it may be effected on the basis of that proposition.

With the Governments of Austria, Russia, Prussia, Holland, Sweden, and
Denmark the best understanding exists. Commerce with all is fostered and
protected by reciprocal good will under the sanction of liberal
conventional or legal provisions.

In the midst of her internal difficulties the Queen of Spain has
ratified the convention for the payment of the claims of our citizens
arising since 1819. It is in the course of execution on her part, and a
copy of it is now laid before you for such legislation as may be found
necessary to enable those interested to derive the benefits of it.

Yielding to the force of circumstances and to the wise counsels of time
and experience, that power has finally resolved no longer to occupy the
unnatural position in which she stood to the new Governments established
in this hemisphere. I have the great satisfaction of stating to you that
in preparing the way for the restoration of harmony between those who
have sprung from the same ancestors, who are allied by common interests,
profess the same religion, and speak the same language the United States
have been actively instrumental. Our efforts to effect this good work
will be persevered in while they are deemed useful to the parties and
our entire disinterestedness continues to be felt and understood. The
act of Congress to countervail the discriminating duties to the
prejudice of our navigation levied in Cuba and Puerto Rico has been
transmitted to the minister of the United States at Madrid, to be
communicated to the Government of the Queen. No intelligence of its
receipt has yet reached the Department of State. If the present
condition of the country permits the Government to make a careful and
enlarged examination of the true interests of these important portions
of its dominions, no doubt is entertained that their future intercourse
with the United States will be placed upon a more just and liberal
basis.

The Florida archives have not yet been selected and delivered. Recent
orders have been sent to the agent of the United States at Havana to
return with all that he can obtain, so that they may be in Washington
before the session of the Supreme Court, to be used in the legal
questions there pending to which the Government is a party.

Internal tranquillity is happily restored to Portugal. The distracted
state of the country rendered unavoidable the postponement of a final
payment of the just claims of our citizens. Our diplomatic relations
will be soon resumed, and the long-subsisting friendship with that power
affords the strongest guaranty that the balance due will receive prompt
attention.

The first installment due under the convention of indemnity with the
King of the Two Sicilies has been duly received, and an offer has been
made to extinguish the whole by a prompt payment--an offer I did not
consider myself authorized to accept, as the indemnification provided is
the exclusive property of individual citizens of the United States. The
original adjustment of our claims and the anxiety displayed to fulfill
at once the stipulations made for the payment of them are highly
honorable to the Government of the Two Sicilies. When it is recollected
that they were the result of the injustice of an intrusive power
temporarily dominant in its territory, a repugnance to acknowledge and
to pay which would have been neither unnatural nor unexpected, the
circumstances can not fail to exalt its character for justice and good
faith in the eyes of all nations.

The treaty of amity and commerce between the United States and Belgium,
brought to your notice in my last annual message as sanctioned by the
Senate, but the ratifications of which had not been exchanged owing to a
delay in its reception at Brussels and a subsequent absence of the
Belgian minister of foreign affairs, has been, after mature
deliberation, finally disavowed by that Government as inconsistent with
the powers and instructions given to their minister who negotiated it.
This disavowal was entirely unexpected, as the liberal principles
embodied in the convention, and which form the ground-work of the
objections to it, were perfectly satisfactory to the Belgian
representative, and were supposed to be not only within the powers
granted, but expressly conformable to the instructions given to him. An
offer, not yet accepted, has been made by Belgium to renew negotiations
for a treaty less liberal in its provisions on questions of general
maritime law.

Our newly established relations with the Sublime Porte promise to be
useful to our commerce and satisfactory in every respect to this
Government. Our intercourse with the Barbary Powers continues without
important change, except that the present political state of Algiers has
induced me to terminate the residence there of a salaried consul and to
substitute an ordinary consulate, to remain so long as the place
continues in the possession of France. Our first treaty with one of
these powers, the Emperor of Morocco, was formed in 1786, and was
limited to fifty years. That period has almost expired. I shall take
measures to renew it with the greater satisfaction as its stipulations
are just and liberal and have been, with mutual fidelity and reciprocal
advantage, scrupulously fulfilled.

Intestine dissensions have too frequently occurred to mar the
prosperity, interrupt the commerce, and distract the governments of most
of the nations of this hemisphere which have separated themselves from
Spain. When a firm and permanent understanding with the parent country
shall have produced a formal acknowledgment of their independence, and
the idea of danger from that quarter can be no longer entertained, the
friends of freedom expect that those countries, so favored by nature,
will be distinguished for their love of justice and their devotion to
those peaceful arts the assiduous cultivation of which confers honor
upon nations and gives value to human life.

In the mean time I confidently hope that the apprehensions entertained
that some of the people of these luxuriant regions may be tempted, in a
moment of unworthy distrust of their own capacity for the enjoyment of
liberty, to commit the too common error of purchasing present repose by
bestowing on some favorite leaders the fatal gift of irresponsible power
will not be realized. With all these Governments and with that of Brazil
no unexpected changes in our relations have occurred during the present
year.

Frequent causes of just complaint have arisen upon the part of the
citizens of the United States, some times from the irregular action of
the constituted subordinate authorities of the maritime regions and some
times from the leaders or partisans of those in arms against the
established Governments. In all cases representations have been or will
be made, and as soon as their political affairs are in a settled
position it is expected that our friendly remonstrances will be followed
by adequate redress.

The Government of Mexico made known in December last the appointment of
commissioners and a surveyor on its part to run, in conjunction with
ours, the boundary line between its territories and the United States,
and excused the delay for the reasons anticipated--the prevalence of
civil war. The commissioners and surveyors not having met within the
time stipulated by the treaty, a new arrangement became necessary, and
our charge d'affaires was instructed in January, 1833 to negotiate in
Mexico an article additional to the pre-existing treaty. This
instruction was acknowledged, and no difficulty was apprehended in the
accomplishment of that object. By information just received that
additional article to the treaty will be obtained and transmitted to
this country as soon as it can receive the ratification of the Mexican
Congress.

The reunion of the three States of New Grenada, Venezuela, and Equador,
forming the Republic of Colombia, seems every day to become more
improbable. The commissioners of the two first are understood to be now
negotiating a just division of the obligations contracted by them when
united under one government. The civil war in Equador, it is believed,
has prevented even the appointment of a commissioner on its part.

I propose at an early day to submit, in the proper form, the appointment
of a diplomatic agent to Venezuela, the importance of the commerce of
that country to the United States and the large claims of our citizens
upon the Government arising before and since the division of Colombia
rendering it, in my judgment, improper longer to delay this step.

Our representatives to Central America, Peru, and Brazil are either at
or on their way to their respective posts.

From the Argentine Republic, from which a minister was expected to this
Government, nothing further has been heard. Occasion has been taken on
the departure of a new consul to Buenos Ayres to remind that Government
that its long delayed minister, whose appointment had been made known to
us, had not arrived.

It becomes my unpleasant duty to inform you that this pacific and highly
gratifying picture of our foreign relations does not include those with
France at this time. It is not possible that any Government and people
could be more sincerely desirous of conciliating a just and friendly
intercourse with another nation than are those of the United States with
their ancient ally and friend. This disposition is founded as well on
the most grateful and honorable recollections associated with our
struggle for independence as upon a well grounded conviction that it is
consonant with the true policy of both. The people of the United States
could not, therefore, see without the deepest regret even a temporary
interruption of the friendly relations between the two countries--a
regret which would, I am sure, be greatly aggravated if there should
turn out to be any reasonable ground for attributing such a result to
any act of omission or commission on our part. I derive, therefore, the
highest satisfaction from being able to assure you that the whole course
of this Government has been characterized by a spirit so conciliatory
and for bearing as to make it impossible that our justice and moderation
should be questioned, what ever may be the consequences of a longer
perseverance on the part of the French Government in her omission to
satisfy the conceded claims of our citizens.

The history of the accumulated and unprovoked aggressions upon our
commerce committed by authority of the existing Governments of France
between the years 1800 and 1817 has been rendered too painfully familiar
to Americans to make its repetition either necessary or desirable. It
will be sufficient here to remark that there has for many years been
scarcely a single administration of the French Government by whom the
justice and legality of the claims of our citizens to indemnity were not
to a very considerable extent admitted, and yet near a quarter of a
century has been wasted in ineffectual negotiations to secure it.

Deeply sensible of the injurious effects resulting from this state of
things upon the interests and character of both nations, I regarded it
as among my first duties to cause one more effort to be made to satisfy
France that a just and liberal settlement of our claims was as well due
to her own honor as to their incontestable validity. The negotiation for
this purpose was commenced with the late Government of France, and was
prosecuted with such success as to leave no reasonable ground to doubt
that a settlement of a character quite as liberal as that which was
subsequently made would have been effected had not the revolution by
which the negotiation was cut off taken place. The discussions were
resumed with the present Government, and the result showed that we were
not wrong in supposing that an event by which the two Governments were
made to approach each other so much nearer in their political
principles, and by which the motives for the most liberal and friendly
intercourse were so greatly multiplied, could exercise no other than a
salutary influence upon the negotiation.

After the most deliberate and thorough examination of the whole subject
a treaty between the two Governments was concluded and signed at Paris
on July 4th, 1831, by which it was stipulated that "the French
Government, in order to liberate itself from all the reclamations
preferred against it by citizens of the United States for unlawful
seizures, captures, sequestrations, confiscations, or destruction of
their vessels, cargoes, or other property, engages to pay a sum of
25,000,000 francs to the United States, who shall distribute it among
those entitled in the manner and according to the rules it shall
determine"; and it was also stipulated on the part of the French
Government that this 25,000,000 francs should be paid at Paris, in six
annual installments of 4,166,666 francs and 66 centimes each, into the
hands of such person or persons "as shall be authorized by the
Government of the United States to receive it", the first installment to
be paid "at the expiration of one year next following the exchange of
the ratifications of this convention and the others at successive
intervals of a year, one after another, 'til the whole shall be paid. To
the amount of each of the said installments shall be added interest at
4% thereupon, as upon the other installments then remaining unpaid, the
said interest to be computed from the day of the exchange of the present
convention".

It was also stipulated on the part of the United States, for the purpose
of being completely liberated from all the reclamations presented by
France on behalf of its citizens, that the sum of 1,500,000 francs
should be paid to the Government of France in six annual installments,
to be deducted out of the annual sums which France had agreed to pay,
interest thereupon being in like manner computed from the day of the
exchange of the ratifications. In addition to this stipulation,
important advantages were secured to France by the following article,
viz: The wines of France, from and after the exchange of the
ratifications of the present conventions, shall be admitted to
consumption in the States of the Union at duties which shall not exceed
the following rates by the gallon (such as it is used at present for
wines in the United States), to wit: six cents for red wines in casks;
ten cents for white wines in casks, and 22 cents for wines of all sorts
in bottles. The proportions existing between the duties on French wines
thus reduced and the general rates of the tariff which went into
operation January 1st, 1829, shall be maintained in case the Government
of the United States should think proper to diminish those general rates
in a new tariff.

In consideration of this stipulation, which shall be binding on the
United States for ten years, the French Government abandons the
reclamations which it had formed in relation to the 8th article of the
treaty of cession of Louisiana. It engages, moreover, to establish on
the long-staple cottons of the United States which after the exchange of
the ratifications of the present convention shall be brought directly
thence to France by the vessels of the United States or by French
vessels the same duties as on short-staple cotton. This treaty was duly
ratified in the manner prescribed by the constitutions of both
countries, and the ratification was exchanged at the city of Washington
on February 2d, 1832. On account of its commercial stipulations it was
in five days thereafter laid before the Congress of the United States,
which proceeded to enact such laws favorable to the commerce of France
as were necessary to carry it into full execution, and France has from
that period to the present been in the unrestricted enjoyment of the
valuable privileges that were thus secured to her.

The faith of the French nation having been thus solemnly pledged through
its constitutional organ for the liquidation and ultimate payment of the
long deferred claims of our citizens, as also for the adjustment of
other points of great and reciprocal benefits to both countries, and the
United States having, with a fidelity and promptitude by which their
conduct will, I trust, be always characterized, done every thing that
was necessary to carry the treaty into full and fair effect on their
part, counted with the most perfect confidence on equal fidelity and
promptitude on the part of the French Government. In this reasonable
expectation we have been, I regret to inform you, wholly disappointed.
No legislative provision has been made by France for the execution of
the treaty, either as it respects the indemnity to be paid or the
commercial benefits to be secured to the United States, and the
relations between the United States and that power in consequence
thereof are placed in a situation threatening to interrupt the good
understanding which has so long and so happily existed between the two
nations.

Not only has the French Government been thus wanting in the performance
of the stipulations it has so solemnly entered into with the United
States, but its omissions have been marked by circumstances which would
seem to leave us without satisfactory evidences that such performance
will certainly take place at a future period. Advice of the exchange of
ratifications reached Paris prior to April 8th, 1832. The French
Chambers were then sitting, and continued in session until April 21st,
1832, and although one installment of the indemnity was payable on
February 2d, 1833, one year after the exchange of ratifications, no
application was made to the Chambers for the required appropriation, and
in consequence of no appropriation having then been made the draft of
the United States Government for that installment was dishonored by the
minister of finance, and the United States thereby involved in much
controversy.

The next session of the Chambers commenced on November 19th, 1832, and
continued until April 25th, 1833. Not withstanding the omission to pay
the first installment had been made the subject of earnest remonstrance
on our part, the treaty with the United States and a bill making the
necessary appropriations to execute it were not laid before the Chamber
of Deputies until April 6th, 1833, nearly five months after its meeting,
and only nineteen days before the close of the session. The bill was
read and referred to a committee, but there was no further action upon
it.

The next session of the Chambers commenced on April 26th, 1833, and
continued until June 26th, 1833. A new bill was introduced on June 11th,
1833, but nothing important was done in relation to it during the
session.

In 1834 April, nearly three years after the signature of the treaty, the
final action of the French Chambers upon the bill to carry the treaty
into effect was obtained, and resulted in a refusal of the necessary
appropriations. The avowed grounds upon which the bill was rejected are
to be found in the published debates of that body, and no observations
of mine can be necessary to satisfy Congress of their utter
insufficiency. Although the gross amount of the claims of our citizens
is probably greater than will be ultimately allowed by the
commissioners, sufficient is, never the less, shown to render it
absolutely certain that the indemnity falls far short of the actual
amount of our just claims, independently of the question of damages and
interest for the detention. That the settlement involved a sacrifice in
this respect was well known at the time--a sacrifice which was
cheerfully acquiesced in by the different branches of the Federal
Government, whose action upon the treaty was required from a sincere
desire to avoid further collision upon this old and disturbing subject
and in the confident expectation that the general relations between the
two countries would be improved thereby.

The refusal to vote the appropriation, the news of which was received
from our minister in Paris about May 15th, 1834, might have been
considered the final determination of the French Government not to
execute the stipulations of the treaty, and would have justified an
immediate communication of the facts to Congress, with a recommendation
of such ultimate measures as the interest and honor of the United States
might seem to require. But with the news of the refusal of the Chambers
to make the appropriation were conveyed the regrets of the King and a
declaration that a national vessel should be forthwith sent out with
instructions to the French minister to give the most ample explanations
of the past and the strongest assurances for the future. After a long
passage the promised dispatch vessel arrived.

The pledges given by the French minister upon receipt of his
instructions were that as soon after the election of the new members as
the charter would permit the legislative Chambers of France should be
called together and the proposition for an appropriation laid before
them; that all the constitutional powers of the King and his cabinet
should be exerted to accomplish the object, and that the result should
be made known early enough to be communicated to Congress at the
commencement of the present session. Relying upon these pledges, and not
doubting that the acknowledged justice of our claims, the promised
exertions of the King and his cabinet, and, above all, that sacred
regard for the national faith and honor for which the French character
has been so distinguished would secure an early execution of the treaty
in all its parts, I did not deem it necessary to call the attention of
Congress to the subject at the last session.

I regret to say that the pledges made through the minister of France
have not been redeemed. The new Chambers met on July 31st, 1834, and
although the subject of fulfilling treaties was alluded to in the speech
from the throne, no attempt was made by the King or his cabinet to
procure an appropriation to carry it into execution. The reasons given
for this omission, although they might be considered sufficient in an
ordinary case, are not consistent with the expectations founded upon the
assurances given here, for there is no constitutional obstacle to
entering into legislative business at the first meeting of the Chambers.
This point, however, might have been over-looked had not the Chambers,
instead of being called to meet at so early a day that the result of
their deliberations might be communicated to me before the meeting of
Congress, been prorogued to December 29th, 1834--a period so late that
their decision can scarcely be made known to the present Congress prior
to its dissolution. To avoid this delay our minister in Paris, in virtue
of the assurance given by the French minister in the United States,
strongly urged the convocation of the Chambers at an earlier day, but
without success. It is proper to remark, however, that this refusal has
been accompanied with the most positive assurances on the part of the
executive government of France of their intention to press the
appropriation at the ensuing session of the Chambers.

The executive branch of this Government has, as matters stand, exhausted
all the authority upon the subject with which it is invested and which
it had any reason to believe could be beneficially employed.

The idea of acquiescing in the refusal to execute the treaty will not, I
am confident, be for a moment entertained by any branch of this
Government, and further negotiation upon the subject is equally out of
the question.

If it shall be the pleasure of Congress to await the further action of
the French Chambers, no further consideration of the subject will at
this session probably be required at your hands. But if from the
original delay in asking for an appropriation, from the refusal of the
Chambers to grant it when asked, from the omission to bring the subject
before the Chambers at their last session, from the fact that, including
that session, there have been five different occasions when the
appropriation might have been made, and from the delay in convoking the
Chambers until some weeks after the meeting of Congress, when it was
well known that a communication of the whole subject to Congress at the
last session was prevented by assurances that it should be disposed of
before its present meeting, you should feel yourselves constrained to
doubt whether it be the intention of the French Government, in all its
branches, to carry the treaty into effect, and think that such measures
as the occasion may be deemed to call for should be now adopted, the
important question arises what those measures shall be.

Our institutions are essentially pacific. Peace and friendly intercourse
with all nations are as much the desire of our Government as they are
the interest of our people. But these objects are not to be permanently
secured by surrendering the rights of our citizens or permitting solemn
treaties for their indemnity, in cases of flagrant wrong, to be
abrogated or set aside.

It is undoubtedly in the power of Congress seriously to affect the
agricultural and manufacturing interests of France by the passage of
laws relating to her trade with the United States. Her products,
manufactures, and tonnage may be subjected to heavy duties in our ports,
or all commercial intercourse with her may be suspended. But there are
powerful and to my mind conclusive objections to this mode of
proceeding.

We can not embarrass or cut off the trade of France without at the same
time in some degree embarrassing or cutting off our own trade. The
injury of such a warfare must fall, though unequally, upon our own
citizens, and could not but impair the means of the Government and
weaken that united sentiment in support of the rights and honor of the
nation which must now pervade every bosom. Nor is it impossible that
such a course of legislation would introduce once more into our national
councils those disturbing questions in relation to the tariff of duties
which have been so recently put to rest. Besides, by every measure
adopted by the Government of the United States with the view of injuring
France the clear perception of right which will induce our own people
and the rulers and people of all other nations, even of France herself,
to pronounce our quarrel just will be obscured and the support rendered
to us in a final resort to more decisive measures will be more limited
and equivocal.

There is but one point of controversy, and upon that the whole civilized
world must pronounce France to be in the wrong. We insist that she shall
pay us a sum of money which she has acknowledged to be due, and of the
justice of this demand there can be but one opinion among mankind. True
policy would seem to dictate that the question at issue should be kept
thus disencumbered and that not the slightest pretense should be given
to France to persist in her refusal to make payment by any act on our
part affecting the interests of her people. The question should be left,
as it is now, in such an attitude that when France fulfills her treaty
stipulations all controversy will be at an end.

It is my conviction that the United States ought to insist on a prompt
execution of the treaty, and in case it be refused or longer delayed
take redress into their own hands. After the delay on the part of France
of a quarter of a century in acknowledging these claims by treaty, it is
not to be tolerated that another quarter of a century is to be wasted in
negotiating about the payment. The laws of nations provide a remedy for
such occasions. It is a well-settled principle of the international code
that where one nation owes another a liquidated debt which it refuses or
neglects to pay the aggrieved party may seize on the property belonging
to the other, its citizens or subjects, sufficient to pay the debt
without giving just cause of war. This remedy has been repeatedly
resorted to, and recently by France herself toward Portugal, under
circumstances less unquestionable.

The time at which resort should be had to this or any other mode of
redress is a point to be decided by Congress. If an appropriation shall
not be made by the French Chambers at their next session, it may justly
be concluded that the Government of France has finally determined to
disregard its own solemn undertaking and refuse to pay an acknowledged
debt. In that event every day's delay on our part will be a stain upon
our national honor, as well as a denial of justice to our injured
citizens. Prompt measures, when the refusal of France shall be complete,
will not only be most honorable and just, but will have the best effect
upon our national character.

Since France, in violation of the pledges given through her minister
here, has delayed her final action so long that her decision will not
probably be known in time to be communicated to this Congress, I
recommend that a law be passed authorizing reprisals upon French
property in case provision shall not be made for the payment of the debt
at the approaching session of the French Chambers. Her pride and power
are too well known to expect any thing from her fears and preclude the
necessity of a declaration that nothing partaking of the character of
intimidation is intended by us. She ought to look upon it as the
evidence only of an inflexible determination on the part of the United
States to insist on their rights.

That Government, by doing only what it has itself acknowledged to be
just, will be able to spare the United States the necessity of taking
redress into their own hands and save the property of French citizens
from that seizure and sequestration which American citizens so long
endured without retaliation or redress. If she should continue to refuse
that act of acknowledged justice and, in violation of the law of
nations, make reprisals on our part the occasion of hostilities against
the United States, she would but add violence to injustice, and could
not fail to expose herself to the just censure of civilized nations and
to the retributive judgments of Heaven.

Collision with France is the more to be regretted on account of the
position she occupies in Europe in relation to liberal institutions, but
in maintaining our national rights and honor all governments are alike
to us. If by a collision with France in a case where she is clearly in
the wrong the march of liberal principles shall be impeded, the
responsibility for that result as well as every other will rest on her
own head.

Having submitted these considerations, it belongs to Congress to decide
whether after what has taken place it will still await the further
action of the French Chambers or now adopt such provisional measures as
it may deem necessary and best adapted to protect the rights and
maintain the honor of the country. What ever that decision may be, it
will be faithfully enforced by the Executive as far as he is authorized
so to do.

According to the estimate of the Treasury Department, the revenue
accruing from all sources during the present year will amount to
$20,624,717, which, with the balance remaining in the Treasury on
January 1st, 1834 of $11,702,905, produces an aggregate of $32,327,623.
The total expenditure during the year for all objects, including the
public debt, is estimated at $25,591,390, which will leave a balance in
the Treasury on January 1st, 1835 of $6,736,232. In this balance,
however, will be included about $1,150,000 of what was heretofore
reported by the Department as not effective.

Of former appropriations it is estimated that there will remain
unexpended at the close of the year $8,002,925, and that of this sum
there will not be required more than $5,141,964 to accomplish the
objects of all the current appropriations. Thus it appears that after
satisfying all those appropriations and after discharging the last item
of our public debt, which will be done on January 1st, 1835, there will
remain unexpended in the Treasury an effective balance of about
$440,000. That such should be the aspect of our finances is highly
flattering to the industry and enterprise of our population and
auspicious of the wealth and prosperity which await the future
cultivation of their growing resources. It is not deemed prudent,
however, to recommend any change for the present in our impost rates,
the effect of the gradual reduction now in progress in many of them not
being sufficiently tested to guide us in determining the precise amount
of revenue which they will produce.

Free from public debt, at peace with all the world, and with no
complicated interests to consult in our intercourse with foreign powers,
the present may be hailed as the epoch in our history the most favorable
for the settlement of those principles in our domestic policy which
shall be best calculated to give stability to our Republic and secure
the blessings of freedom to our citizens.

Among these principles, from our past experience, it can not be doubted
that simplicity in the character of the Federal Government and a rigid
economy in its administration should be regarded as fundamental and
sacred. All must be sensible that the existence of the public debt, by
rendering taxation necessary for its extinguishment, has increased the
difficulties which are inseparable from every exercise of the taxing
power, and that it was in this respect a remote agent in producing those
disturbing questions which grew out of the discussions relating to the
tariff. If such has been the tendency of a debt incurred in the
acquisition and maintenance of our national rights and liberties, the
obligations of which all portions of the Union cheerfully acknowledged,
it must be obvious that what ever is calculated to increase the burdens
of Government without necessity must be fatal to all our hopes of
preserving its true character.

While we are felicitating ourselves, therefore, upon the extinguishment
of the national debt and the prosperous state of our finances, let us
not be tempted to depart from those sound maxims of public policy which
enjoin a just adaptation of the revenue to the expenditures that are
consistent with a rigid economy and an entire abstinence from all topics
of legislation that are not clearly within the constitutional powers of
the Government and suggested by the wants of the country. Properly
regarded under such a policy, every diminution of the public burdens
arising from taxation gives to individual enterprise increased power and
furnishes to all the members of our happy Confederacy new motives for
patriotic affection and support. But above all, its most important
effect will be found in its influence upon the character of the
Government by confining its action to those objects which will be sure
to secure to it the attachment and support of our fellow citizens.

Circumstances make it my duty to call the attention of Congress to the
Bank of the United States. Created for the convenience of the
Government, that institution has become the scourge of the people. Its
interference to postpone the payment of a portion of the national debt
that it might retain the public money appropriated for that purpose to
strengthen it in a political contest, the extraordinary extension and
contraction of its accommodations to the community, its corrupt and
partisan loans, its exclusion of the public directors from a knowledge
of its most important proceedings, the unlimited authority conferred on
the president to expend its funds in hiring writers and procuring the
execution of printing, and the use made of that authority, the retention
of the pension money and books after the selection of new agents, the
groundless claim to heavy damages in consequence of the protest of the
bill drawn on the French Government, have through various channels been
laid before Congress.

Immediately after the close of the last session the bank, through its
president, announced its ability and readiness to abandon the system of
unparalleled curtailment and the interruption of domestic exchanges
which it had practiced upon from August 1st, 1833 to June 30th, 1834,
and to extend its accommodations to the community. The grounds assumed
in this annunciation amounted to an acknowledgment that the curtailment,
in the extent to which it had been carried, was not necessary to the
safety of the bank, and had been persisted in merely to induce Congress
to grant the prayer of the bank in its memorial relative to the removal
of the deposits and to give it a new charter. They were substantially a
confession that all the real distresses which individuals and the
country had endured for the preceding six or eight months had been
needlessly produced by it, with the view of affecting through the
sufferings of the people the legislative action of Congress.

It is subject of congratulation that Congress and the country had the
virtue and firmness to bear the infliction, that the energies of our
people soon found relief from this wanton tyranny in vast importations
of the precious metals from almost every part of the world, and that at
the close of this tremendous effort to control our Government the bank
found itself powerless and no longer able to loan out its surplus means.
The community had learned to manage its affairs without its assistance,
and trade had already found new auxiliaries, so that on October 1st,
1834 the extraordinary spectacle was presented of a national more than
half of whose capital was either lying unproductive in its vaults or in
the hands of foreign bankers.

To the needless distresses brought on the country during the last
session of Congress has since been added the open seizure of the
dividends on the public stock to the amount of $170,041, under pretense
of paying damages, cost, and interest upon the protested French bill.
This sum constituted a portion of the estimated revenues for the year
1834, upon which the appropriations made by Congress were based. It
would as soon have been expected that our collectors would seize on the
customs or the receivers of our land offices on the moneys arising from
the sale of public lands under pretenses of claims against the United
States as that the bank would have retained the dividends. Indeed, if
the principle be established that any one who chooses to set up a claim
against the United States may without authority of law seize on the
public property or money wherever he can find it to pay such claim,
there will remain no assurance that our revenue will reach the Treasury
or that it will be applied after the appropriation to the purposes
designated in the law.

The pay masters of our Army and the pursers of our Navy may under like
pretenses apply to their own use moneys appropriated to set in motion
the public force, and in time of war leave the country without defense.
This measure resorted to by the bank is disorganizing and revolutionary,
and if generally resorted to by private citizens in like cases would
fill the land with anarchy and violence.

It is a constitutional provision "that no money shall be drawn from the
Treasury but in consequence of appropriations made by law". The palpable
object of this provision is to prevent the expenditure of the public
money for any purpose what so ever which shall not have been 1st
approved by the representatives of the people and the States in Congress
assembled. It vests the power of declaring for what purposes the public
money shall be expended in the legislative department of the Government,
to the exclusion of the executive and judicial, and it is not within the
constitutional authority of either of those departments to pay it away
without law or to sanction its payment.

According to this plain constitutional provision, the claim of the bank
can never be paid without an appropriation by act of Congress. But the
bank has never asked for an appropriation. It attempts to defeat the
provision of the Constitution and obtain payment without an act of
Congress. Instead of awaiting an appropriation passed by both Houses and
approved by the President, it makes an appropriation for itself and
invites an appeal to the judiciary to sanction it. That the money had
not technically been paid into the Treasury does not affect the
principle intended to be established by the Constitution.

The Executive and the judiciary have as little right to appropriate and
expend the public money without authority of law before it is placed to
the credit of the Treasury as to take it from the Treasury. In the
annual report of the Secretary of the Treasury, and in his
correspondence with the president of the bank, and the opinions of the
Attorney General accompanying it, you will find a further examination of
the claims of the bank and the course it has pursued.

It seems due to the safety of the people funds remaining in that bank
and to the honor of the American people that measures be taken to
separate the Government entirely from an institution so mischievous to
the public prosperity and so regardless of the Constitution and laws. By
transferring the public deposits, by appointing other pension agents as
far as it had the power, by ordering the discontinuance of the receipt
of bank checks in the payment of the public dues after January 1st,
1834, the Executive has exerted all its lawful authority to sever the
connection between the Government and this faithless corporation.

The high-handed career of this institution imposes upon the
constitutional functionaries of this Government duties of the gravest
and most imperative character--duties which they can not avoid and from
which I trust there will be no inclination on the part of any of them to
shrink. My own sense of them is most clear, as is also my readiness to
discharge those which may rightfully fall on me. To continue any
business relations with the Bank of the United States that may be
avoided without a violation of the national faith after that institution
has set at open defiance the conceded right of the Government to examine
its affairs, after it has done all in its power to deride the public
authority in other respects and to bring it into disrepute at home and
abroad, after it has attempted to defeat the clearly expressed will of
the people by turning against them the immense power intrusted to its
hands and by involving a country otherwise peaceful, flourishing, and
happy, in dissension, embarrassment, and distress, would make the nation
itself a party to the degradation so sedulously prepared for its public
agents and do much to destroy the confidence of man-kind in popular
governments and to bring into contempt their authority and efficiency.

In guarding against an evil of such magnitude consideration of temporary
convenience should be thrown out of the question, and we should be
influenced by such motives only as look to the honor and preservation of
the republican system. Deeply and solemnly impressed with the justice of
these views, I feel it to be my duty to recommend to you that a law be
passed authorizing the sale of the public stock; that the provision of
the charter requiring the receipt of notes of the bank in payment of
public dues shall, in accordance with the power reserved to Congress in
the 14th section of the charter, be suspended until the bank pays to the
Treasury the dividends withheld, and that all laws connecting the
Government or its officers with the bank, directly or indirectly, be
repealed, and that the institution be left hereafter to its own
resources and means.

Events have satisfied my mind, and I think the minds of the American
people, that the mischiefs and dangers which flow from a national bank
far over-balance all its advantages. The bold effort the present bank
has made to control the Government, the distresses it has wantonly
produced, the violence of which it has been the occasion in one of our
cities famed for its observance of law and order, are but premonitions
of the fate which awaits the American people should they be deluded into
a perpetuation of this institution or the establishment of another like
it. It is fervently hoped that thus admonished those who have heretofore
favored the establishment of a substitute for the present bank will be
induced to abandon it, as it is evidently better to incur any
inconvenience that may be reasonably expected than to concentrate the
whole moneyed power of the Republic in any form what so ever or under
any restrictions.

Happily it is already illustrated that the agency of such an institution
is not necessary to the fiscal operations of the Government. The State
banks are found fully adequate to the performance of all services which
were required of the Bank of the United States, quite as promptly and
with the same cheapness. They have maintained themselves and discharged
all these duties while the Bank of the United States was still powerful
and in the field as an open enemy, and it is not possible to conceive
that they will find greater difficulties in their operations when that
enemy shall cease to exist.

The attention of Congress is earnestly invited to the regulation of the
deposits in the State banks by law. Although the power now exercised by
the executive department in this behalf is only such as was uniformly
exerted through every Administration from the origin of the Government
up to the establishment of the present bank, yet it is one which is
susceptible of regulation by law, and therefore ought so to be
regulated. The power of Congress to direct in what places the Treasurer
shall keep the moneys in the Treasury and to impose restrictions upon
the Executive authority in relation to their custody and removal is
unlimited, and its exercise will rather be courted than discouraged by
those public officers and agents on whom rests the responsibility for
their safety. It is desirable that as little power as possible should be
left to the President or the Secretary of the Treasury over those
institutions, which, being thus freed from Executive influence, and
without a common head to direct their operations, would have neither the
temptation nor the ability to interfere in the political conflicts of
the country. Not deriving their charters from the national authorities,
they would never have those inducements to meddle in general elections
which have led the Bank of the United States to agitate and convulse the
country for upward of two years.

The progress of our gold coinage is creditable to the officers of the
Mint, and promises in a short period to furnish the country with a sound
and portable currency, which will much diminish the inconvenience to
travelers of the want of a general paper currency should the State banks
be incapable of furnishing it. Those institutions have already shown
themselves competent to purchase and furnish domestic exchange for the
convenience of trade at reasonable rates, and not a doubt is entertained
that in a short period all the wants of the country in bank
accommodations and exchange will be supplied as promptly and as cheaply
as they have heretofore been by the Bank of the United States. If the
several States shall be induced gradually to reform their banking
systems and prohibit the issue of all small notes, we shall in a few
years have a currency as sound and as little liable to fluctuations as
any other commercial country.

The report of the Secretary of War, together with the accompanying
documents from the several bureaux of that Department, will exhibit the
situation of the various objects committed to its administration.

No event has occurred since your last session rendering necessary any
movements of the Army, with the exception of the expedition of the
regiment of dragoons into the territory of the wandering and predatory
tribes inhabiting the western frontier and living adjacent to the
Mexican boundary. These tribes have been heretofore known to us
principally by their attacks upon our own citizens and upon other
Indians entitled to the protection of the United States. It became
necessary for the peace of the frontiers to check these habitual
inroads, and I am happy to inform you that the object has been effected
without the commission of any act of hostility. Colonel Dodge and the
troops under his command have acted with equal firmness and humanity,
and an arrangement has been made with those Indians which it is hoped
will assure their permanent pacific relations with the United States and
the other tribes of Indians upon that border. It is to be regretted that
the prevalence of sickness in that quarter has deprived the country of a
number of valuable lives, and particularly that General Leavenworth, an
officer well known, and esteemed for his gallant services in the late
war and for his subsequent good conduct, has fallen a victim to his zeal
and exertions in the discharge of his duty.

The Army is in a high state of discipline. Its moral condition, so far
as that is known here, is good, and the various branches of the public
service are carefully attended to. It is amply sufficient under its
present organization for providing the necessary garrisons for the
seaboard and for the defense of the internal frontier, and also for
preserving the elements of military knowledge and for keeping pace with
those improvements which modern experience is continually making. And
these objects appear to me to embrace all the legitimate purposes for
which a permanent military force should be maintained in our country.
The lessons of history teach us its danger and the tendency which exists
to an increase. This can be best met and averted by a just caution on
the part of the public itself, and of those who represent them in
Congress.

From the duties which devolve on the Engineer Department and upon the
topographical engineers, a different organization seems to be demanded
by the public interest, and I recommend the subject to your
consideration.

No important change has during this season taken place in the condition
of the Indians. Arrangements are in progress for the removal of the
Creeks, and will soon be for the removal of the Seminoles. I regret that
the Cherokees east of the Mississippi have not yet determined as a
community to remove. How long the personal causes which have heretofore
retarded that ultimately inevitable measure will continue to operate I
am unable to conjecture. It is certain, however, that delay will bring
with it accumulated evils which will render their condition more and
more unpleasant. The experience of every year adds to the conviction
that emigration, and that alone, can preserve from destruction the
remnant of the tribes yet living amongst us. The facility with which the
necessaries of life are procured and the treaty stipulations providing
aid for the emigrant Indians in their agricultural pursuits and in the
important concern of education, and their removal from those causes
which have heretofore depressed all and destroyed many of the tribes,
can not fail to stimulate their exertions and to reward their industry.

The two laws passed at the last session of Congress on the subject of
Indian affairs have been carried into effect, and detailed instructions
for their administration have been given. It will be seen by the
estimates for the present session that a great reduction will take place
in the expenditures of the Department in consequence of these laws, and
there is reason to believe that their operation will be salutary and
that the colonization of the Indians on the western frontier, together
with a judicious system of administration, will still further reduce the
expenses of this branch of the public service and at the same time
promote its usefulness and efficiency.

Circumstances have been recently developed showing the existence of
extensive frauds under the various laws granting pensions and gratuities
for Revolutionary services. It is impossible to estimate the amount
which may have been thus fraudulently obtained from the National
Treasury. I am satisfied, however, it has been such as to justify a
re-examination of the system and the adoption of the necessary checks in
its administration. All will agree that the services and sufferings of
the remnant of our Revolutionary band should be fully compensated; but
while this is done, every proper precaution should be taken to prevent
the admission of fabricated and fraudulent claims.

In the present mode of proceeding the attestations and certificates of
the judicial officers of the various States from a considerable portion
of the checks which are interposed against the commission of frauds.
These, however, have been and may be fabricated, and in such a way as to
elude detection at the examining offices. And independently of this
practical difficulty, it is ascertained that these documents are often
loosely granted; some times even blank certificates have been issued;
some times prepared papers have been signed without inquiry, and in one
instance, at least, the seal of the court has been within reach of a
person most interested in its improper application. It is obvious that
under such circumstances no severity of administration can check the
abuse of the law. And information has from time to time been
communicated to the Pension Office questioning or denying the right of
persons placed upon the pension list to the bounty of the country.

Such cautions are always attended to and examined, but a far more
general investigation is called for, and I therefore recommend, in
conformity with the suggestion of the Secretary of War, that an actual
inspection should be made in each State into the circumstances and
claims of every person now drawing a pension. The honest veteran has
nothing to fear from such a scrutiny, while the fraudulent claimant will
be detected and the public Treasury relieved to an amount, I have reason
to believe, far greater than has heretofore been suspected. The details
of such a plan could be so regulated as to interpose the necessary
checks without any burdensome operation upon the pensioners. The object
should be two-fold: To look into the original justice of the claims, so
far as this can be done under a proper system of regulations, by an
examination of the claimants themselves and by inquiring in the vicinity
of their residence into their history and into the opinion entertained
of their Revolutionary services. To ascertain in all cases whether the
original claimant is living and this by actual personal inspection. This
measure will, if adopted, be productive, I think, of the desired
results, and I therefore recommend it to your consideration, with the
further suggestion that all payments should be suspended 'til the
necessary reports are received.

It will be seen by a tabular statement annexed to the documents
transmitted to Congress that the appropriations for objects connected
with the War Department, made at the last session, for the service of
the year 1834, excluding the permanent appropriation for the payment of
military gratuities under the act of June 7th, 1832, the appropriation
of $200,000 for arming and equipping the militia, and the appropriation
of $10,000 for the civilization of the Indians, which are not annually
renewed, amounted to the sum of $9,003,261, and that the estimates of
appropriations necessary for the same branches of service for the year
1835 amount to the sum of $5,778,964, making a difference in the
appropriations of the current year over the estimates of the
appropriations for the next of $3,224,297.

The principal causes which have operated at this time to produce this
great difference are shown in the reports and documents and in the
detailed estimates. Some of these causes are accidental and temporary,
while others are permanent, and, aided by a just course of
administration, may continue to operate beneficially upon the public
expenditures.

A just economy, expending where the public service requires and
withholding where it does not, is among the indispensable duties of the
Government.

I refer you to the accompanying report of the Secretary of the Navy and
to the documents with it for a full view of the operations of that
important branch of our service during the present year. It will be seen
that the wisdom and liberality with which Congress has provided for the
gradual increase of our navy material have been seconded by a
corresponding zeal and fidelity on the part of those to whom has been
confided the execution of the laws on the subject, and that but a short
period would be now required to put in commission a force large enough
for any exigency into which the country may be thrown.

When we reflect upon our position in relation to other nations, it must
be apparent that in the event of conflicts with them we must look
chiefly to our Navy for the protection of our national rights. The wide
seas which separate us from other Governments must of necessity be the
theater on which an enemy will aim to assail us, and unless we are
prepared to meet him on this element we can not be said to possess the
power requisite to repel or prevent aggressions. We can not, therefore,
watch with too much attention this arm of our defense, or cherish with
too much care the means by which it can possess the necessary efficiency
and extension. To this end our policy has been heretofore wisely
directed to the constant employment of a force sufficient to guard our
commerce, and to the rapid accumulation of the materials which are
necessary to repair our vessels and construct with ease such new ones as
may be required in a state of war.

In accordance with this policy, I recommend to your consideration the
erection of the additional dry dock described by the Secretary of the
Navy, and also the construction of the steam batteries to which he has
referred, for the purpose of testing their efficacy as auxiliaries to
the system of defense now in use.

The report of the Post Master General herewith submitted exhibits the
condition and prospects of that Department. From that document it
appears that there was a deficit in the funds of the Department at the
commencement of the present year beyond its available means of
$315,599.98, which on the first of July last had been reduced to
$268,092.74. It appears also that the revenues for the coming year will
exceed the expenditures about $270,000, which, with the excess of
revenue which will result from the operations of the current half year,
may be expected, independently of any increase in the gross amount of
postages, to supply the entire deficit before the end of 1835. But as
this calculation is based on the gross amount of postages which had
accrued within the period embraced by the times of striking the
balances, it is obvious that without a progressive increase in the
amount of postages the existing retrenchments must be persevered in
through the year 1836 that the Department may accumulate a surplus fund
sufficient to place it in a condition of perfect ease.

It will be observed that the revenues of the Post Office Department,
though they have increased, and their amount is above that of any former
year, have yet fallen short of the estimates more than $100,000. This is
attributed in a great degree to the increase of free letters growing out
of the extension and abuse of the franking privilege. There has been a
gradual increase in the number of executive offices to which it has been
granted, and by an act passed in March, 1833, it was extended to members
of Congress throughout the whole year. It is believed that a revision of
the laws relative to the franking privilege, with some enactments to
enforce more rigidly the restrictions under which it is granted, would
operate beneficially to the country, by enabling the Department at an
earlier period to restore the mail facilities that have been withdrawn,
and to extend them more widely, as the growing settlements of the
country may require.

To a measure so important to the Government and so just to our
constituents, who ask no exclusive privileges for themselves and are not
willing to concede them to others, I earnestly recommend the serious
attention of Congress.

The importance of the Post Office Department and the magnitude to which
it has grown, both in its revenues and in its operations, seem to demand
its reorganization by law. The whole of its receipts and disbursements
have hitherto been left entirely to Executive control and individual
discretion. The principle is as sound in relation to this as to any
other Department of the Government, that as little discretion should be
confided to the executive officer who controls it as is compatible with
its efficiency. It is therefore earnestly recommended that it be
organized with an auditor and treasurer of its own, appointed by the
President and Senate, who shall be branches of the Treasury Department.

Your attention is again respectfully invited to the defect which exists
in the judicial system of the United States. Nothing can be more
desirable than the uniform operation of the Federal judiciary throughout
the several States, all of which, standing on the same footing as
members of the Union, have equal rights to the advantages and benefits
resulting from its laws. This object is not attained by the judicial
acts now in force, because they leave one quarter of the States without
circuit courts.

It is undoubtedly the duty of Congress to place all the States on the
same footing in this respect, either by the creation of an additional
number of associate judges or by an enlargement of the circuits assigned
to those already appointed so as to include the new States. What ever
may be the difficulty in a proper organization of the judicial system so
as to secure its efficiency and uniformity in all parts of the Union and
at the same time to avoid such an increase of judges as would encumber
the supreme appellate tribunal, it should not be allowed to weigh
against the great injustice which the present operation of the system
produces.

I trust that I may be also pardoned for renewing the recommendation I
have so often submitted to your attention in regard to the mode of
electing the President and Vice President of the United States. All the
reflection I have been able to bestow upon the subject increases my
conviction that the best interests of the country will be promoted by
the adoption of some plan which will secure in all contingencies that
important right of sovereignty to the direct control of the people.
Could this be attained, and the terms of those officers be limited to a
single period of either four or six years, I think our liberties would
possess an additional safeguard.

At your last session I called the attention of Congress to the
destruction of the public building occupied by the Treasury Department.
As the public interest requires that another building should be erected
with as little delay as possible, it is hoped that the means will be
seasonably provided and that they will be ample enough to authorize such
an enlargement and improvement in the plan of the building as will more
effectually accommodate the public officers and secure the public
documents deposited in it from the casualties of fire.

I have not been able to satisfy myself that the bill entitled "An act to
improve the navigation of the Wabash River", which was sent to me at the
close of your last session, ought to pass, and I have therefore withheld
from it my approval and now return it to the Senate, the body in which
it originated.

There can be no question connected with the administration of public
affairs more important or more difficult to be satisfactorily dealt with
than that which relates to the rightful authority and proper action of
the Federal Government upon the subject of internal improvements. To
inherent embarrassments have been added others resulting from the course
of our legislation concerning it.

I have heretofore communicated freely with Congress upon this subject,
and in adverting to it again I can not refrain from expressing my
increased conviction of its extreme importance as well in regard to its
bearing upon the maintenance of the Constitution and the prudent
management of the public revenue as on account of its disturbing effect
upon the harmony of the Union.

We are in no danger from violations of the Constitution by which
encroachments are made upon the personal rights of the citizen. The
sentence of condemnation long since pronounced by the American people
upon acts of that character will, I doubt not, continue to prove as
salutary in its effects as it is irreversible in its nature.

But against the dangers of unconstitutional acts which, instead of
menacing the vengeance of offended authority, proffer local advantages
and bring in their train the patronage of the Government, we are, I
fear, not so safe. To suppose that because our Government has been
instituted for the benefit of the people it must therefore have the
power to do what ever may seem to conduce to the public good is an error
into which even honest minds are too apt to fall. In yielding themselves
to this fallacy they overlook the great considerations in which the
Federal Constitution was founded. They forget that in consequence of the
conceded diversities in the interest and condition of the different
States it was foreseen at the period of its adoption that although a
particular measure of the Government might be beneficial and proper in
one State it might be the reverse in another; that it was for this
reason the States would not consent to make a grant to the Federal
Government of the general and usual powers of government, but of such
only as were specifically enumerated, and the probable effects of which
they could, as they thought, safely anticipate; and they forget also the
paramount obligation upon all to abide by the compact then so solemnly
and, as it was hoped, so firmly established.

In addition to the dangers to the Constitution springing from the
sources I have stated, there has been one which was perhaps greater than
all. I allude to the materials which this subject has afforded for
sinister appeals to selfish feelings, and the opinion heretofore so
extensively entertained of its adaptation to the purposes of personal
ambition. With such stimulus it is not surprising that the acts and
pretensions of the Federal Government in this behalf should some times
have been carried to an alarming extent. The questions which have arisen
upon this subject have related--To the power of making internal
improvements within the limits of a State, with the right of territorial
jurisdiction, sufficient at least for their preservation and use. To the
right of appropriating money in aid of such works when carried on by a
State of by a company in virtue of State authority, surrendering the
claim of jurisdiction; and To the propriety of appropriation for
improvements of a particular class, viz, for light houses, beacons,
buoys, public piers, and for the removal of sand bars, sawyers, and
other temporary and partial impediments in our navigable rivers and
harbors. The claims of power for the General Government upon each of
these points certainly present matter of the deepest interest. The first
is, however, of much the greatest importance, in as much as, in addition
to the dangers of unequal and improvident expenditures of public moneys
common to all, there is super-added to that the conflicting
jurisdictions of the respective governments. Federal jurisdiction, at
least to the extent I have stated, has been justly regarded by its
advocates as necessarily appurtenant to the power in question, if that
exists by the Constitution.

That the most injurious conflicts would unavoidably arise between the
respective jurisdictions of the State and Federal Governments in the
absence of a constitutional provision marking out their respective
boundaries can not be doubted. The local advantages to be obtained would
induce the States to overlook in the beginning the dangers and
difficulties to which they might ultimately be exposed. The powers
exercised by the Federal Government would soon be regarded with jealousy
by the State authorities, and originating as they must from implication
or assumption, it would be impossible to affix to them certain and safe
limits.

Opportunities and temptations to the assumption of power incompatible
with State sovereignty would be increased and those barriers which
resist the tendency of our system toward consolidation greatly weakened.
The officers and agents of the General Government might not always have
the discretion to abstain from intermeddling with State concerns, and if
they did they would not always escape the suspicion of having done so.
Collisions and consequent irritations would spring up; that harmony
which should ever exist between the General Government and each member
of the Confederacy would be frequently interrupted; a spirit of
contention would be engendered and the dangers of disunion greatly
multiplied.

Yet we know that not withstanding these grave objections this dangerous
doctrine was at one time apparently proceeding to its final
establishment with fearful rapidity. The desire to embark the Federal
Government in works of internal improvement prevailed in the highest
degree during the first session of the first Congress that I had the
honor to meet in my present situation. When the bill authorizing a
subscription on the part of the United States for stock in the Maysville
and Lexington Turn Pike Company passed the two houses, there had been
reported by the Committees of Internal Improvements bills containing
appropriations for such objects, inclusive of those for the Cumberland
road and for harbors and light houses, to the amount of $106,000,000. In
this amount was included authority to the Secretary of the Treasury to
subscribe for the stock of different companies to a great extent, and
the residue was principally for the direct construction of roads by this
Government. In addition to these projects, which had been presented to
the two Houses under the sanction and recommendation of their respective
Committees on Internal Improvements, there were then still pending
before the committees, and in memorials to Congress presented but not
referred, different projects for works of a similar character, the
expense of which can not be estimated with certainty, but must have
exceeded $100,000,000.

Regarding the bill authorizing a subscription to the stock of the
Maysville and Lexington Turn Pike Company as the entering wedge of a
system which, however weak at first, might soon become strong enough to
rive the bands of the Union asunder, and believing that if its passage
was acquiesced in by the Executive and the people there would no longer
be any limitation upon the authority of the General Government in
respect to the appropriation of money for such objects, I deemed it an
imperative duty to withhold from it the Executive approval.

Although from the obviously local character of that work I might well
have contented myself with a refusal to approve the bill upon that
ground, yet sensible of the vital importance of the subject, and anxious
that my views and opinions in regard to the whole matter should be fully
understood by Congress and by my constituents, I felt it my duty to go
further. I therefore embraced that early occasion to apprise Congress
that in my opinion the Constitution did not confer upon it the power to
authorize the construction of ordinary roads and canals within the
limits of a State and to say, respectfully, that no bill admitting such
a power could receive my official sanction. I did so in the confident
expectation that the speedy settlement of the public mind upon the whole
subject would be greatly facilitated by the difference between the two
Houses and myself, and that the harmonious action of the several
departments of the Federal Government in regard to it would be
ultimately secured.

So far, at least, as it regards this branch of the subject, my best
hopes have been realized. Nearly four years have elapsed, and several
sessions of Congress have intervened, and no attempt within my
recollection has been made to induce Congress to exercise this power.
The applications for the construction of roads and canals which were
formerly multiplied upon your files are no longer presented, and we have
good reason to infer that the current public sentiment has become so
decided against the pretension as effectually to discourage its
reassertion. So thinking, I derive the greatest satisfaction from the
conviction that thus much at least has been secured upon this important
and embarrassing subject.

From attempts to appropriate the national funds to objects which are
confessedly of a local character we can not, I trust, have anything
further to apprehend. My views in regard to the expediency of making
appropriations for works which are claimed to be of a national character
and prosecuted under State authority--assuming that Congress have the
right to do so--were stated in my annual message to Congress in 1830,
and also in that containing my objections to the Maysville road bill.

So thoroughly convinced am I that no such appropriations ought to be
made by Congress until a suitable constitutional provision is made upon
the subject, and so essential do I regard the point to the highest
interests of our country, that I could not consider myself as
discharging my duty to my constituents in giving the Executive sanction
to any bill containing such an appropriation. If the people of the
United States desire that the public Treasury shall be resorted to for
the means to prosecute such works, they will concur in an amendment of
the Constitution prescribing a rule by which the national character of
the works is to be tested, and by which the greatest practicable
equality of benefits may be secured to each member of the Confederacy.
The effects of such a regulation would be most salutary in preventing
unprofitable expenditures, in securing our legislation from the
pernicious consequences of a scramble for the favors of Government, and
in repressing the spirit of discontent which must inevitably arise from
an unequal distribution of treasures which belong alike to all.

There is another class of appropriations for what may be called, without
impropriety, internal improvements, which have always been regarded as
standing upon different grounds from those to which I have referred. I
allude to such as have for their object the improvement of our harbors,
the removal of partial and temporary obstructions in our navigable
rivers, for the facility and security of our foreign commerce. The
grounds upon which I distinguished appropriations of this character from
others have already been stated to Congress. I will now only add that at
the 1st session of Congress under the new Constitution it was provided
by law that all expenses which should accrue from and after the 15th day
of August, 1789, in the necessary support and maintenance and repairs of
all light houses, beacons, buoys, and public piers erected, placed, or
sunk before the passage of the act within any bay, inlet, harbor, or
port of the United States, for rendering the navigation thereof easy and
safe, should be defrayed out of the Treasury of the United States, and,
further, that it should be the duty of the Secretary of the Treasury to
provide by contracts, with the approbation of the President, for
rebuilding when necessary and keeping in good repair the light houses,
beacons, buoys, and public piers in the several States, and for
furnishing them with supplies.

Appropriations for similar objects have been continued from that time to
the present without interruption or dispute. As a natural consequence of
the increase and extension of our foreign commerce, ports of entry and
delivery have been multiplied and established, not only upon our
sea-board but in the interior of the country upon our lakes and
navigable rivers. The convenience and safety of this commerce have led
to the gradual extension of these expenditures; to the erection of light
houses, the placing, planting, and sinking of buoys, beacons, and piers,
and to the removal of partial and temporary obstructions in our
navigable rivers and in the harbors upon our Great Lakes as well as on
the sea-board.

Although I have expressed to Congress my apprehension that these
expenditures have some times been extravagant and disproportionate to
the advantages to be derived from them, I have not felt it to be my duty
to refuse my assent to bills containing them, and have contented myself
to follow in this respect in the foot-steps of all my predecessors.
Sensible, however, from experience and observation of the great abuses
to which the unrestricted exercise of this authority by Congress was
exposed, I have prescribed a limitation for the government of my own
conduct by which expenditures of this character are confined to places
below the ports of entry or delivery established by law. I am very
sensible that this restriction is not as satisfactory as could be
desired, and that much embarrassment may be caused to the executive
department in its execution by appropriations for remote and not
well-understood objects. But as neither my own reflections nor the
lights which I may properly derive from other sources have supplied me
with a better, I shall continue to apply my best exertions to a faithful
application of the rule upon which it is founded.

I sincerely regret that I could not give my assent to the bill entitled:
"An act to improve the navigation of the Wabash River"; but I could not
have done so without receding from the ground which I have, upon the
fullest consideration, taken upon this subject, and of which Congress
has been heretofore apprised, and without throwing the subject again
open to abuses which no good citizen entertaining my opinions could
desire.

I rely upon the intelligence and candor of my fellow citizens, in whose
liberal indulgence I have already so largely participated, for a correct
appreciation on my motives in interposing as I have done on this and
other occasions checks to a course of legislation which, without in the
slightest degree calling in question the motives of others, I consider
as sanctioning improper and unconstitutional expenditures of public
treasure.

I am not hostile to internal improvements, and wish to see them extended
to every part of the country. But I am fully persuaded, if they are not
commenced in a proper manner, confined to proper objects, and conducted
under an authority generally conceded to be rightful, that a successful
prosecution of them can not be reasonably expected. The attempt will
meet with resistance where it might otherwise receive support, and
instead of strengthening the bonds of our Confederacy it will only
multiply and aggravate the causes of disunion.

***

State of the Union Address
Andrew Jackson
December 7, 1835

Fellow Citizens of the Senate and of the House of Representatives:

In the discharge of my official duty the again devolves upon me of
communicating with a new Congress. The reflection that the
representation of the Union has been recently renewed, and that the
constitutional term of its service will expire with my own, heightens
the solicitude with which I shall attempt to lay before it the state of
our national concerns and the devout hope which I cherish that its
labors to improve them may be crowned with success.

You are assembled at a period of profound interest to the American
patriot. The unexampled growth and prosperity of our country having
given us a rank in the scale of nations which removes all apprehension
of danger to our integrity and independence from external foes, the
career of freedom is before us, with an earnest from the past that if
true to ourselves there can be no formidable obstacle in the future to
its peaceful and uninterrupted pursuit. Yet, in proportion to the
disappearance of those apprehensions which attended our weakness, as
once contrasted with the power of some of the States of the Old World,
should we now be solicitous as to those which belong to the conviction
that it is to our own conduct we must look for the preservation of those
causes on which depend the excellence and the duration of our happy
system of government.

In the example of other systems founded on the will of the people we
trace to internal dissension the influences which have so often blasted
the hopes of the friends of freedom. The social elements, which were
strong and successful when united against external danger, failed in the
more difficult task of properly adjusting their own internal
organization, and thus gave way the great principle of self-government.
Let us trust that this admonition will never be forgotten by the
Government or the people of the United States, and that the testimony
which our experience thus far holds out to the great human family of the
practicability and the blessings of free government will be confirmed in
all time to come.

We have but to look at the state of our agriculture, manufactures, and
commerce and the unexampled increase of our population to feel the
magnitude of the trust committed to us. Never in any former period of
our history have we had greater reason than we now have to be thankful
to Divine Providence for the blessings of health and general prosperity.
Every branch of labor we see crowned with the most abundant rewards. In
every element of national resources and wealth and of individual comfort
we witness the most rapid and solid improvements. With no interruptions
to this pleasing prospect at home which will not yield to the spirit of
harmony and good will that so strikingly pervades the mass of the people
in every quarter, amidst all the diversity of interest and pursuits to
which they are attached, and with no cause of solicitude in regard to
our external affairs which will not, it is hoped, disappear before the
principles of simple justice and the forbearance that mark our
intercourse with foreign powers, we have every reason to feel proud of
our beloved country.

The general state of our foreign relations has not materially changed
since my last annual message.

In the settlement of the question of the North Eastern boundary little
progress has been made. Great Britain has declined acceding to the
proposition of the United States, presented in accordance with the
resolution of the Senate, unless certain preliminary conditions were
admitted, which I deemed incompatible with a satisfactory and rightful
adjustment of the controversy. Waiting for some distinct proposal from
the Government of Great Britain, which has been invited, I can only
repeat the expression of my confidence that, with the strong mutual
disposition which I believe exists to make a just arrangement, this
perplexing question can be settled with a due regard to the well-founded
pretensions and pacific policy of all the parties to it. Events are
frequently occurring on the North Eastern frontier of a character to
impress upon all the necessity of a speedy and definitive termination of
the dispute. This consideration, added to the desire common to both to
relieve the liberal and friendly relations so happily existing between
the two countries from all embarrassment, will no doubt have its just
influence upon both.

Our diplomatic intercourse with Portugal has been renewed, and it is
expected that the claims of our citizens, partially paid, will be fully
satisfied as soon as the condition of the Queen's Government will permit
the proper attention to the subject of them. That Government has, I am
happy to inform you, manifested a determination to act upon the liberal
principles which have marked our commercial policy. The happiest effects
upon the future trade between the United States and Portugal are
anticipated from it, and the time is not thought to be remote when a
system of perfect reciprocity will be established.

The installments due under the convention with the King of the Two
Sicilies have been paid with that scrupulous fidelity by which his whole
conduct has been characterized, and the hope is indulged that the
adjustment of the vexed question of our claims will be followed by a
more extended and mutually beneficial intercourse between the two
countries.

The internal contest still continues in Spain. Distinguished as this
struggle has unhappily been by incidents of the most sanguinary
character, the obligations of the late treaty of indemnification with us
have been, never the less, faithfully executed by the Spanish
Government.

No provision having been made at the last session of Congress for the
ascertainment of the claims to be paid and the apportionment of the
funds under the convention made with Spain, I invite your early
attention to the subject. The public evidences of the debt have,
according to the terms of the convention and in the forms prescribed by
it, been placed in the possession of the United States, and the interest
as it fell due has been regularly paid upon them. Our commercial
intercourse with Cuba stands as regulated by the act of Congress. No
recent information has been received as to the disposition of the
Government of Madrid, and the lamented death of our recently appointed
minister on his way to Spain, with the pressure of their affairs at
home, renders it scarcely probable that any change is to be looked for
during the coming year.

Further portions of the Florida archives have been sent to the United
States, although the death of one of the commissioners at a critical
moment embarrassed the progress of the delivery of them. The higher
officers of the local government have recently shown an anxious desire,
in compliance with the orders from the parent Government, to facilitate
the selection and delivery of all we have a right to claim.

Negotiations have been opened at Madrid for the establishment of a
lasting peace between Spain and such of the Spanish American Governments
of this hemisphere as have availed themselves of the intimation given to
all of them of the disposition of Spain to treat upon the basis of their
entire independence. It is to be regretted that simultaneous
appointments by all of ministers to negotiate with Spain had not been
made. The negotiation itself would have been simplified, and this
long-standing dispute, spreading over a large portion of the world,
would have been brought to a more speedy conclusion.

Our political and commercial relations with Austria, Prussia, Sweden,
and Denmark stand on the usual favorable bases. One of the articles of
our treaty with Russia in relation to the trade on the North-West coast
of America having expired, instructions have been given to our minister
at St. Petersburg to negotiate a renewal of it. The long and unbroken
amity between the two Governments gives every reason for supposing the
article will be renewed, if stronger motives do not exist to prevent it
than with our view of the subject can be anticipated here. I ask your
attention to the message of my predecessor at the opening of the second
session of the 19th Congress, relative to our commercial intercourse
with Holland, and to the documents connected with that subject,
communicated to the House of Representatives on the 10th of January,
1825, and 18th of January, 1827.

Coinciding in the opinion of my predecessor that Holland is not, under
the regulations of her present system, entitled to have her vessels and
their cargoes received into the United States on the footing of American
vessels and cargoes as regards duties of tonnage and impost, a respect
for his reference of it to the Legislature has alone prevented me from
acting on the subject. I should still have waited without comment for
the action of Congress, but recently a claim has been made by Belgian
subjects to admission into our ports for their ships and cargoes on the
same footing as American, with the allegation we could not dispute that
our vessels received in their ports the identical treatment shewn to
them in the ports of Holland, upon whose vessels no discrimination is
made in the ports of the United States.

Given the same privileges the Belgians expected the same benefits--
benefits that were, in fact, enjoyed when Belgium and Holland were
united under one Government. Satisfied with the justice of their
pretension to be placed on the same footing with Holland, I could not,
never the less, without disregard to the principle of our laws, admit
their claim to be treated as Americans, and at the same time a respect
for Congress, to whom the subject had long since been referred, has
prevented me from producing a just equality by taking from the vessels
of Holland privileges conditionally granted by acts of Congress,
although the condition upon which the grant was made has, in my
judgment, failed since 1822. I recommend, therefore, a review of the act
of 1824, and such modification of it as will produce an equality on such
terms as Congress shall think best comports with our settled policy and
the obligations of justice to two friendly powers.

With the Sublime Porte and all the Governments on the coast of Barbary
our relations continue to be friendly. The proper steps have been taken
to renew our treaty with Morocco.

The Argentine Republic has again promised to send within the current
year a minister to the United States.

A convention with Mexico for extending the time for the appointment of
commissioners to run the boundary line has been concluded and will be
submitted to the Senate. Recent events in that country have awakened the
liveliest solicitude in the United States. Aware of the strong
temptations existing and powerful inducements held out to the citizens
of the United States to mingle in the dissensions of our immediate
neighbors, instructions have been given to the district attorneys of the
United States where indications warranted it to prosecute without
respect to persons all who might attempt to violate the obligations of
our neutrality, while at the same time it has been thought necessary to
apprise the Government of Mexico that we should require the integrity of
our territory to be scrupulously respected by both parties.

From our diplomatic agents in Brazil, Chile, Peru, Central America,
Venezuela, and New Granada constant assurances are received of the
continued good understanding with the Governments to which they are
severally accredited. With those Governments upon which our citizens
have valid and accumulating claims, scarcely an advance toward a
settlement of them is made, owing mainly to their distracted state or to
the pressure of imperative domestic questions. Our patience has been and
will probably be still further severely tried, but our fellow citizens
whose interests are involved may confide in the determination of the
Government to obtain for them eventually ample retribution.

Unfortunately, many of the nations of this hemisphere are still
self-tormented by domestic dissensions. Revolution succeeds revolution;
injuries are committed upon foreigners engaged in lawful pursuits; much
time elapses before a government sufficiently stable is erected to
justify expectation of redress; ministers are sent and received, and
before the discussions of past injuries are fairly begun fresh troubles
arise; but too frequently new injuries are added to the old, to be
discussed together with the existing government after it has proved its
ability to sustain the assaults made upon it, or with its successor if
overthrown. If this unhappy condition of things continues much longer,
other nations will be under the painful necessity of deciding whether
justice to their suffering citizens does not require a prompt redress of
injuries by their own power, without waiting for the establishment of a
government competent and enduring enough to discuss and to make
satisfaction for them.

Since the last session of Congress the validity of our claims upon
France, as liquidated by the treaty of 1831, has been acknowledged by
both branches of her legislature, and the money has been appropriated
for their discharge; but the payment is, I regret to inform you, still
withheld.

A brief recapitulation of the most important incidents in this
protracted controversy will shew how utterly untenable are the grounds
upon which this course is attempted to be justified.

On entering upon the duties of my station I found the United States an
unsuccessful applicant to the justice of France for the satisfaction of
claims the validity of which was never questionable, and has now been
most solemnly admitted by France herself. The antiquity of these claims,
their high justice, and the aggravating circumstances out of which they
arose are too familiar to the American people to require description. It
is sufficient to say that for a period of ten years and upward our
commerce was, with but little interruption, the subject of constant
aggression on the part of France--aggressions the ordinary features of
which were condemnations of vessels and cargoes under arbitrary decrees,
adopted in contravention as well of the laws of nations as of treaty
stipulations, burnings on the high seas, and seizures and confiscations
under special imperial rescripts in the ports of other nations occupied
by the armies or under the control of France. Such it is now conceded is
the character of the wrongs we suffered--wrongs in many cases so
flagrant that even their authors never denied our right to reparation.
Of the extent of these injuries some conception may be formed from the
fact that after the burning of a large amount at sea and the necessary
deterioration in other cases by long detention the American property so
seized and sacrificed at forced sales, excluding what was adjudged to
privateers before or without condemnation, brought into the French
treasury upward of 24,000,000 francs, besides large custom house duties.

The subject had already been an affair of 20 years' uninterrupted
negotiation, except for a short time when France was overwhelmed by the
military power of united Europe. During this period, whilst other
nations were extorting from her payment of their claims at the point of
the bayonet, the United States intermitted their demand for justice out
of respect to the oppressed condition of a gallant people to whom they
felt under obligations for fraternal assistance in their own days of
suffering and peril. The bad effects of these protracted and unavailing
discussions, were obvious, and the line of duty was to my mind equally
so.

This was either to insist upon the adjustment of our claims within a
reasonable period or to abandon them altogether. I could not doubt that
by this course the interests and honor of both countries would be best
consulted. Instructions were therefore given in this spirit to the
minister who was sent out once more to demand reparation.

Upon the meeting of Congress in December, 1829, I felt it my duty to
speak of these claims and the delays of France in terms calculated to
call the serious attention of both countries to the subject. The then
French ministry took exception to the message on the ground of its
containing a menace, under it was not agreeable to the French Government
to negotiate. The American minister of his own accord refuted the
construction which was attempted to be put upon the message and at the
same time called to the recollection of the French ministry that the
President's message was a communication addressed, not to foreign
governments, but to the Congress of the United States, in which it was
enjoined upon him by the Constitution to lay before that body
information of the state of the Union, comprehending its foreign as well
as its domestic relations, and that if in the discharge of this duty he
felt it incumbent upon him to summon the attention of Congress in due
time to what might be the possible consequences of existing difficulties
with any foreign government, he might fairly be supposed to do so under
a sense of his own Government, and not from any intention of holding a
menace over a foreign power.

The views taken by him received my approbation, the French Government
was satisfied, and the negotiation was continued. It terminated in the
treaty of July 4th, recognizing the justice of our claims in part and
promising payment to the amount of 25,000,000 francs in six annual
installments.

The ratifications of this treaty were exchanged at Washington on the
second of February, 1832, and in five days thereafter it was laid before
Congress, who immediately passed the acts necessary on our part to
secure to France the commercial advantages conceded to her in the
compact. The treaty had previously been solemnly ratified by the King of
the French in terms which are certainly not mere matters of form, and of
which the translation is as follows: WE, approving the above convention
in all and each of the dispositions which are contained in it, do
declare, by ourselves as well as by our heirs and successors, that it is
accepted, approved, ratified, and confirmed, and by these presents,
signed by our hand, we do accept, approve, ratify, and confirm it;
promising, on the faith and word of a king, to observe it and to cause
it to be observed inviolably, without ever contravening it or suffering
it to be contravened, directly or indirectly, for any cause or under any
pretense whatsoever. Official information of the exchange of
ratifications in the United States reached Paris whilst the Chambers
were in session. The extraordinary and to us injurious delays of the
French Government in their action upon the subject of its fulfillment
have been heretofore stated to Congress, and I have no disposition to
enlarge upon them here. It is sufficient to observe that the then
pending session was allowed to expire without even an effort to obtain
the necessary appropriations; that the two succeeding ones were also
suffered to pass away without anything like a serious attempt to obtain
a decision upon the subject, and that it was not until the fourth
session, almost three years after the conclusion of the treaty and more
than two years after the exchange of ratifications, that the bill for
the execution of the treaty was pressed to a vote and rejected.

In the mean time the Government of the United States, having full
confidence that a treaty entered into and so solemnly ratified by the
French King would be executed in good faith, and not doubting that
provision would be made for the payment of the first installment which
was to become due on the second day of February, 1833, negotiated a
draft for the amount through the Bank of the United States. When this
draft was presented by the holder with the credentials required by the
treaty to authorize him to receive the money, the Government of France
allowed it to be protested. In addition to the injury in the nonpayment
of the money by France, conformably to her engagement, the United States
were exposed to a heavy claim on the part of the bank under pretense of
damages, in satisfaction of which that institution seized upon and still
retains an equal amount of the public money.

Congress was in session when the decision of the Chambers reached
Washington, and an immediate communication of this apparently final
decision of France not to fulfill the stipulation of the treaty was the
course naturally to be expected from the President. The deep tone of
dissatisfaction which pervaded the public mind and the correspondent
excitement produced in Congress by only a general knowledge of the
result rendered it more than probable that a resort to immediate
measures of redress would be the consequence of calling the attention of
that body to the subject. Sincerely desirous of preserving the pacific
relations which had so long existed between the two countries, I was
anxious to avoid this course if I could be satisfied that by so neither
the interests nor the honor of my country would be compromitted. Without
the fullest assurances on that point, I could not hope to acquit myself
of the responsibility to be incurred in suffering Congress to adjourn
without laying the subject before them. Those received by me were
believed to be of that character.

That the feelings produced in the United States by the news of the
rejection of the appropriation would be such as I have described them to
have been was foreseen by the French Government, and prompt measures
were taken by it to prevent the consequence. The King in person
expressed through our minister at Paris his profound regret at the
decision of the Chambers, and promised to send forthwith a ship with
dispatches to his minister here authorizing him to give such assurances
as would satisfy the Government and people of the United States that the
treaty would yet be faithfully executed by France.

The national ship arrived, and the minister received his instructions.
Claiming to act under the authority derived from them, he gave to this
government in the name of his the most solemn assurances that as soon
after the new elections as the charter would permit the French Chambers
would be convened and the attempt to procure the necessary
appropriations renewed; that all the constitutional powers of the King
and his ministers should be put in requisition to accomplish the object,
and he was understood, and so expressly informed by this Government at
the time, to engage that the question should be pressed to a decision at
a period sufficiently early to permit information of the result to be
communicated to Congress at the commencement of their next session.
Relying upon these assurances, I incurred the responsibility, great as I
regarded it to be, of suffering Congress to separate without
communicating with them upon the subject.

The expectations justly founded upon the promises thus solemnly made to
this Government by that of France were not realized. The French Chambers
met on the thirty-first of July, 1834, soon after the election, and
although our minister in Paris urged the French ministry to bring the
subject before them, they declined doing so. He next insisted that the
Chambers, of prorogued without acting on the subject, should be
reassembled at a period so early that their action on the treaty might
be known in Washington prior to the meeting of Congress.

This reasonable request was not only declined, but the Chambers were
prorogued to the 29th of December, a day so late that their decision,
however urgently pressed, could not in all probability be obtained in
time to reach Washington before the necessary adjournment of Congress by
the Constitution. The reasons given by the ministry for refusing to
convoke the Chambers at an earlier period were afterwards shewn not to
be insuperable by their actual convocation on the first of December
under a special call for domestic purposes, which fact, however, did not
become known to this Government until after the commencement of the last
session of Congress.

Thus disappointed in our just expectations, it became my imperative duty
to consult with Congress in regard to the expediency of a resort to
retaliatory measures in case the stipulations of the treaty should not
be speedily complied with, and to recommend such as in my judgment the
occasion called for. To this end an unreserved communication of the case
in all its aspects became indispensable. To have shrunk in making it
from saying all that was necessary to its correct understanding, and
that the truth would justify, for fear of giving offense to others,
would have been unworthy of us. To have gone, on the other hand, a
single step further for the purpose of wounding the pride of a
Government and people with whom we had so many motives for cultivating
relations of amity and reciprocal advantage would have been unwise and
improper.

Admonished by the past of the difficulty of making even the simplest
statement of our wrongs without disturbing the sensibilities of those
who had by their position become responsible for their redress, and
earnestly desirous of preventing further obstacles from that source, I
went out of my way to preclude a construction of the message by which
the recommendation that was made to Congress might be regarded as a
menace to France in not only disavowing such a design, but in declaring
that her pride and her power were too well known to expect anything from
her fears. The message did not reach Paris until more than a month after
the Chambers had been in session, and such was the insensibility of the
ministry to our rightful claims and just expectations that our minister
had been informed that the matter when introduced would not be pressed
as a cabinet measure.

Although the message was not officially communicated to the French
Government, and not withstanding the declaration to the contrary which
it contained, the French ministry decided to consider the conditional
recommendation of reprisals a menace and an insult which the honor of
the nation made it incumbent on them to resent. The measures resorted to
by them to evince their sense of the supposed indignity were the
immediate recall of their minister at Washington, the offer of passports
to the American minister at Paris, and a public notice to the
legislative Chambers that all diplomatic intercourse with the United
States had been suspended.

Having in this manner vindicated the dignity of France, they next
proceeded to illustrate her justice. To this end a bill was immediately
introduced into the Chamber of Deputies proposing to make the
appropriations necessary to carry into effect the treaty. As this bill
subsequently passed into a law, the provisions of which now constitute
the main subject of difficulty between the two nations, it becomes my
duty, in order to place the subject before you in a clear light, to
trace the history of its passage and to refer with some particularity to
the proceedings and discussions in regard to it.

The minister of finance in his opening speech alluded to the measures
which had been adopted to resent the supposed indignity, and recommended
the execution of the treaty as a measure required by the honor and
justice of France. He as the organ of the ministry declared the message,
so long as it had not received the sanction of Congress, a mere
expression of the personal opinion of the President, for which neither
the Government nor people of the United States were responsible, and
that an engagement had been entered into for the fulfillment of which
the honor of France was pledged. Entertaining these views, the single
condition which the French ministry proposed to annex to the payment of
the money was that it should not be made until it was ascertained that
the Government of the United States had done nothing to injure the
interests of France, or, in other words, that no steps had been
authorized by Congress of a hostile character toward France.

What the disposition of action of Congress might be was then unknown to
the French cabinet; but on the 14th day of January the Senate resolved
that it was at that time inexpedient to adopt any legislative measures
in regard to the state of affairs between the United States and France,
and no action on the subject had occurred in the House of
Representatives. These facts were known in Paris prior to the 28th of
March, 1835, when the committee to whom the bill of indemnification had
been referred reported it to the Chamber of Deputies. That committee
substantially re-echoed the sentiments of the ministry, declared that
Congress had set aside the proposition of the President, and recommended
the passage of the bill without any other restriction than that
originally proposed. Thus was it known to the French ministry and
Chambers that if the position assumed by them, and which had been so
frequently and solemnly announced as the only one compatible with the
honor of France, was maintained and the bill passed as originally
proposed, the money would be paid and there would be an end of this
unfortunate controversy.

But this cheering prospect was soon destroyed by an amendment introduced
into the bill at the moment of its passage, providing that the money
should not be paid until the French Government had received satisfactory
explanations of the President's message of the second December, 1834,
and, what is still more extraordinary, the president of the council of
ministers adopted this amendment and consented to its incorporation in
the bill. In regard to a supposed insult which had been formally
resented by the recall of their minister and the offer of passports to
ours, they now for the first time proposed to ask explanations.
Sentiments and propositions which they had declared could not justly be
imputed to the Government or people of the United States are set up as
obstacles to the performance of an act of conceded justice to that
Government and people. They had declared that the honor of France
required the fulfillment of the engagement into which the King had
entered, unless Congress adopted the recommendations of the message.
They ascertained that Congress did not adopt them, and yet that
fulfillment is refused unless they first obtain from the President
explanations of an opinion characterized by themselves as personal and
inoperative.

The conception that it was my intention to menace or insult the
Government of France is as unfounded as the attempt to extort from the
fears of that nation what her sense of justice may deny would be vain
and ridiculous. But the Constitution of the United States imposes on the
President the duty of laying before Congress the condition of the
country in its foreign and domestic relations, and of recommending such
measures as may in his opinion be required by its interests. From the
performance of this duty he can not be deterred by the fear of wounding
the sensibilities of the people or government of whom it may become
necessary to speak; and the American people are incapable of submitting
to an interference by any government on earth, however powerful, with
the free performance of the domestic duties which the Constitution has
imposed on their public functionaries.

The discussions which intervene between the several departments of our
Government being to ourselves, and for anything said in them our public
servants are only responsible to their own constituents and to each
other. If in the course of their consultations facts are erroneously
stated or unjust deductions are made, they require no other inducement
to correct them, however informed of their error, than their love of
justice and what is due to their own character; but they can never
submit to be interrogated upon the subject as a matter of right by a
foreign power. When our discussions terminate in acts, our
responsibility to foreign powers commences, not as individuals, but as a
nation. The principle which calls in question the President for the
language of his message would equally justify a foreign power in
demanding explanations of the language used in the report of a committee
or by a member in debate.

This is not the first time that the Government of France has taken
exception to the messages of American Presidents. President Washington
and the first President Adams in the performance of their duties to the
American people fell under the animadversions of the French Directory.
The objection taken by the ministry of Charles X, and removed by the
explanation made by our minister upon the spot, has already been
adverted to. When it was understood that the ministry of the present
King took exception to my message of last year, putting a construction
upon it which was disavowed on its face, our late minister at Paris, in
answer to the note which first announced a dissatisfaction with the
language used in the message, made a communication to the French
Government under date of the 29th of January, 1835, calculated to remove
all impressions which an unreasonable susceptibility had created. He
repeated and called the attention of the French Government to the
disavowal contained in the message itself of any intention to intimidate
by menace; he truly declared that it contained and was intended to
contain no charge of ill faith against the King of the French, and
properly distinguished between the right to complain in unexceptionable
terms of the omission to execute an agreement and an accusation of bad
motives in withholding such execution, and demonstrated that the
necessary use of that right ought not to be considered as an offensive
imputation.

Although this communication was made without instructions and entirely
on the minister's own responsibility, yet it was afterwards made the act
of this Government by my full approbation, and that approbation was
officially made known on the 25th of April, 1835, to the French
Government. It, however, failed to have any effect. The law, after this
friendly explanation, passed with the obnoxious amendment, supported by
the King's ministers, and was finally approved by the King.

The people of the United States are justly attached to a pacific system
in their intercourse with foreign nations. It is proper, therefore, that
they should know whether their Government has adhered to it. In the
present instance it has been carried to the utmost extent that was
consistent with a becoming self-respect. The note of the 29th of
January, to which I have before alluded, was not the only one which our
minister took upon himself the responsibility of presenting on the same
subject and in the same spirit.

Finding that it was intended to make the payment of a just debt
dependent on the performance of a condition which he knew could never be
complied with, he thought it a duty to make another attempt to convince
the French Government that whilst self-respect and regard to the dignity
of other nations would always prevent us from using any language that
ought to give offense, yet we could never admit a right in any foreign
government to ask explanations of or to interfere in any manner in the
communications which one branch of our public councils made with
another; that in the present case no such language had been used, and
that this had in a former note been fully and voluntarily state, before
it was contemplated to make the explanation a condition; and that there
might be no misapprehension he stated the terms used in that note, and
he officially informed them that it had been approved by the President,
and that therefore every explanation which could reasonably be asked or
honorably given had been already made; that the contemplated measure had
been anticipated by a voluntary and friendly declaration, and was
therefore not only useless, but might be deemed offensive, and certainly
would not be complied with if annexed as a condition.

When this latter communication, to which I especially invite the
attention of Congress, was laid before me, I entertained the hope that
the means it was obviously intended to afford of an honorable and speedy
adjustment of the difficulties between the two nations would have been
accepted, and I therefore did not hesitate to give it my sanction and
full approbation. This was due to the minister who had made himself
responsible for the act, and it was published to the people of the
United States and is now laid before their representatives to shew how
far their Executive has gone in its endeavors to restore a good
understanding between the two countries. It would have been at any time
communicated to the Government of France had it been officially
requested.

The French Government having received all the explanation which honor
and principle permitted, and which could in reason be asked, it was
hoped it would no longer hesitate to pay the installments now due. The
agent authorized to receive the money was instructed to inform the
French minister of his readiness to do so. In reply to this notice he
was told that the money could not then be paid, because the formalities
required by the act of the Chambers had not been arranged.

Not having received any official information of the intentions of the
French Government, and anxious to bring, as far as practicable, this
unpleasant affair to a close before the meeting of Congress, that you
might have the whole subject before you, I caused our charge d'affaires
at Paris to be instructed to ask for the final determination of the
French Government, and in the event of their refusal to pay the
installments now due, without further explanations to return to the
United States.

The result of this last application has not yet reached us, but is daily
expected. That it may be favorable is my sincere wish. France having
now, through all the branches of her Government, acknowledged the
validity of our claims and the obligation of the treaty of 1831, and
there really existing no adequate cause for further delay, will at
length, it may be hoped, adopt the course which the interests of both
nations, not less than the principles of justice, so imperiously
require. The treaty being once executed on her part, little will remain
to disturb the friendly relations of the two countries--nothing, indeed,
which will not yield to the suggestions of a pacific and enlightened
policy and to the influence of that mutual good will and of those
generous recollections which we may confidently expect will then be
revived in all their ancient force.

In any event, however, the principle involved in the new aspect which
has been given to the controversy is so vitally important to the
independent administration of the Government that it can neither be
surrendered nor compromitted without national degradation. I hope it is
unnecessary for me to say that such a sacrifice will not be made through
any agency of mine. The honor of my country shall never be stained by an
apology from me for the statement of truth and the performance of duty;
nor can I give any explanation of my official acts except such as is due
to integrity and justice and consistent with the principles on which our
institutions have been framed. This determination will, I am confident,
be approved by my constituents. I have, indeed, studied their character
to but little purpose if the sum of 25,000,000 francs will have the
weight of a feather in the estimation of what appertains to their
national independence, and if, unhappily, a different impression should
at any time obtain in any quarter, they will, I am sure, rally round the
Government of their choice with alacrity and unanimity, and silence for
ever the degrading imputation.

Having thus frankly presented to you the circumstances which since the
last session of Congress have occurred in this interesting and important
matter, with the views of the Executive in regard to them, it is at this
time only necessary to add that when ever the advices now daily expected
from our charge d'affaires shall have been received they will be made
the subject of a special communication.

The condition of the public finances was never more flattering than at
the present period.

Since my last annual communication all the remains of the public debt
have been redeemed, or money has been placed in deposit for this purpose
when ever the creditors choose to receive it. All the other pecuniary
engagements of the Government have been honorably and promptly
fulfilled, and there will be a balance in the Treasury at the close of
the year of about $19,000,000. It is believed that after meeting all
outstanding and unexpended appropriations there will remain near
$11,000,000 to be applied to any new objects which Congress may
designate or to the more rapid execution of the works already in
progress. In aid of these objects, and to satisfy the current
expenditures of the ensuing year, it is estimated that there will be
received from various sources $20,000,000 more in 1836.

Should Congress make new appropriations in conformity with the estimates
which will be submitted from the proper Departments, amounting to about
$24,000,000, still the available surplus at the close of the next year,
after deducting all unexpended appropriations, will probably not be less
than $6,000,000. This sum can, in my judgment, be now usefully applied
to proposed improvements in our navy yards, and to new national works
which are not enumerated in the present estimates or to the more rapid
completion of those already begun. Either would be constitutional and
useful, and would render unnecessary any attempt in our present peculiar
condition to divide the surplus revenue or to reduce it any faster than
will be effected by the existing laws.

In any event, as the annual report from the Secretary of the Treasury
will enter into details, shewing the probability of some decrease in the
revenue during the next seven years and a very considerable deduction in
1842, it is not recommended that Congress should undertake to modify the
present tariff so as to disturb the principles on which the compromise
act was passed. Taxation on some of the articles of general consumption
which are not in competition with our own productions may be no doubt so
diminished as to lessen to some extent the source of this revenue, and
the same object can also be assisted by more liberal provisions for the
subjects of public defense, which in the present state of our prosperity
and wealth may be expected to engage your attention.

If, however, after satisfying all the demands which can arise from these
sources the unexpended balance in the Treasury should still continue to
increase, it would be better to bear with the evil until the great
changes contemplated in our tariff laws have occurred and shall enable
us to revise the system with that care and circumspection which are due
to so delicate and important a subject.

It is certainly our duty to diminish as far as we can the burdens of
taxation and to regard all the restrictions which are imposed on the
trade and navigation of our citizens as evils which we shall mitigate
when ever we are not prevented by the adverse legislation and policy of
foreign nations or those primary duties which the defense and
independence of our country enjoin upon us. That we have accomplished
much toward the relief of our citizens by the changes which have
accompanied the payment of the public debt and the adoption of the
present revenue laws is manifest from the fact that compared to 1833
there is a diminution of near $25,000,000 in the last two years, and
that our expenditures, independently of those for the public debt, have
been reduced near $9,000,000 during the same period. Let us trust that
by the continued observance of economy and by harmonizing the great
interests of agriculture, manufactures, and commerce much more may be
accomplished to diminish the burdens of government and to increase still
further the enterprise and the patriotic affection of all classes of our
citizens and all the members of our happy Confederacy. As the data which
the Secretary of the Treasury will lay before you in regard to our
financial resources are full and extended, and will afford a safe guide
in your future calculations, I think it unnecessary to offer any further
observations on that subject here.

Among the evidences of the increasing prosperity of the country, not the
least gratifying is that afforded by the receipts from the sales of the
public lands, which amount in the present year to the unexpected sum of
$11,000,000. This circumstance attests the rapidity with which
agriculture, the first and most important occupation of man, advances
and contributes to the wealth and power of our extended territory. Being
still of the opinion that it is our best policy, as far as we can
consistently with the obligations under which those lands were ceded to
the United States, to promote their speedy settlement, I beg leave to
call the attention of the present Congress to the suggestions I have
offered respecting it in my former messages.

The extraordinary receipts from the sales of the public lands invite you
to consider what improvements the land system, and particularly the
condition of the General Land Office, may require. At the time this
institution was organized, near a quarter century ago, it would probably
have been thought extravagant to anticipate for this period such an
addition to its business as has been produced by the vast increase of
those sales during the past and present years. It may also be observed
that since the year 1812 the land offices and surveying districts have
been greatly multiplied, and that numerous legislative enactments from
year to year since that time have imposed a great amount of new and
additional duties upon that office, while the want of a timely
application of force commensurate with the care and labor required has
caused the increasing embarrassment of accumulated arrears in the
different branches of the establishment.

These impediments to the expedition of much duty in the General Land
Office induce me to submit to your judgment whether some modification of
the laws relating to its organization, or an organization of a new
character, be not called for at the present juncture, to enable the
office to accomplish all the ends of its institution with a greater
degree of facility and promptitude than experience has proved to be
practicable under existing regulations. The variety of the concerns and
the magnitude and complexity of the details occupying and dividing the
attention of the Commissioner appear to render it difficult, if not
impracticable, for that officer by any possible assiduity to bestow on
all the multifarious subjects upon which he is called to act the ready
and careful attention due to their respective importance, unless the
Legislature shall assist him by a law providing, or enabling him to
provide, for a more regular and economical distribution of labor, with
the incident responsibility among those employed under his direction.
The mere manual operation of affixing his signature to the vast number
of documents issuing from his office subtracts so largely from the time
and attention claimed by the weighty and complicated subjects daily
accumulating in that branch of the public service as to indicate the
strong necessity of revising the organic law of the establishment. It
will be easy for Congress hereafter to proportion the expenditure on
account of this branch of the service to its real wants by abolishing
from time to time the offices which can be dispensed with.

The extinction of the public debt having taken place, there is no longer
any use for the offices of Commissioners of Loans and of the Sinking
Fund. I recommend, therefore, that they be abolished, and that proper
measures be taken for the transfer to the Treasury Department of any
funds, books, and papers connected with the operations of those offices,
and that the proper power be given to that Department for closing
finally any portion of their business which may remain to be settled.

It is also incumbent on Congress in guarding the pecuniary interests of
the country to discontinue by such a law as was passed in 1812 the
receipt of the bills of the Bank of the United States in payment of the
public revenue, and to provide for the designation of an agent whose
duty it shall be to take charge of the books and stock of the United
States in that institution, and to close all connection with it after
the 3d of March, 1833, when its charter expires. In making provision in
regard to the disposition of this stock it will be essential to define
clearly and strictly the duties and powers of the officer charged with
that branch of the public service.

It will be seen from the correspondence which the Secretary of the
Treasury will lay before you that not withstanding the large amount of
the stock which the United States hold in that institution no
information has yet been communicated which will enable the Government
to anticipate when it can receive any dividends or derive any benefit
from it.

Connected with the condition of the finances and the flourishing state
of the country in all its branches of industry, it is pleasing to
witness the advantages which have been already derived from the recent
laws regulating the value of the gold coinage. These advantages will be
more apparent in the course of the next year, when the branch mints
authorized to be established in North Carolina, Georgia, and Louisiana
shall have gone into operation. Aided, as it is hoped they will be, by
further reforms in the banking systems of the States and by judicious
regulations on the part of Congress in relation to the custody of the
public moneys, it may be confidently anticipated that the use of gold
and silver as circulating medium will become general in the ordinary
transactions connected with the labor of the country.

The great desideratum in modern times is an efficient check upon the
power of banks, preventing that excessive issue of paper whence arise
those fluctuations in the standard of value which render uncertain the
rewards of labor. It was supposed by those who established the Bank of
the United States that from the credit given to it by the custody of the
public moneys and other privileges and the precautions taken to guard
against the evils which the country had suffered in the bankruptcy of
many of the State institutions of that period we should derive from that
institution all the security and benefits of a sound currency and every
good end that was attainable under the provision of the Constitution
which authorizes Congress alone to coin money and regulate the value
thereof. But it is scarcely necessary now to say that these
anticipations have not been realized.

After the extensive embarrassment and distress recently produced by the
Bank of the United States, from which the country is now recovering,
aggravated as they were by pretensions to power which defied the public
authority, and which if acquiesced in by the people would have changed
the whole character of our Government, every candid and intelligent
individual must admit that for the attainment of the great advantages of
a sound currency we must look to a course of legislation radically
different from that which created such an institution.

In considering the means of obtaining so important an end we must set
aside all calculations of temporary convenience, and be influenced by
those only which are in harmony with the true character and the
permanent interests of the Republic. We must recur to first principles
and see what it is that has prevented the legislation of Congress and
the States on the subject of currency from satisfying the public
expectation and realizing results corresponding to those which have
attended the action of our system when truly consistent with the great
principle of equality upon which it rests, and with that spirit of
forbearance and mutual concession and generous patriotism which was
originally, and must ever continue to be, the vital element of our
Union.

On this subject I am sure that I can not be mistaken in ascribing our
want of success to the undue countenance which has been afforded to the
spirit of monopoly. All the serious dangers which our system has yet
encountered may be traced to the resort to implied powers and the use of
corporations clothed with privileges, the effect of which is to advance
the interests of the few at the expense of the many.

We have felt but one class of these dangers exhibited in the contest
waged by the Bank of the United States against the Government for the
last four years. Happily they have been obviated for the present by the
indignant resistance of the people, but we should recollect that the
principle whence they sprung is an ever-active one, which will not fail
to renew its efforts in the same and in other forms so long as there is
a hope of success, founded either on the inattention of the people or
the treachery of their representatives to the subtle progress of its
influence.

The bank is, in fact, but one of the fruits of a system at war with the
genius of all our institutions--a system founded upon a political creed
the fundamental principle of which is a distrust of the popular will as
a safe regulator of political power, and whose great ultimate object and
inevitable result, should it prevail, is the consolidation of all power
in our system in one central government. Lavish public disbursements and
corporations with exclusive privileges would be its substitutes for the
original and as yet sound checks and balances of the Constitution--the
means by whose silent and secret operation a control would be exercised
by the few over the political conduct of the many by first acquiring
that control over the labor and earnings of the great body of the
people. Wherever this spirit has effected an alliance with political
power, tyranny and despotism have been the fruit. If it is ever used for
the ends of government, it has to be incessantly watched, or it corrupts
the sources of the public virtue and agitates the country with questions
unfavorable to the harmonious and steady pursuit of its true interests.

We are now to see whether, in the present favorable condition of the
country, we can not take an effectual stand against the spirit of
monopoly, and practically prove in respect to the currency as well as
other important interests that there is no necessity for so extensive a
resort to it as that which has been heretofore practiced. The experience
of another year has confirmed the utter fallacy of the idea that the
Bank of the United States was necessary as a fiscal agent of the
Government. Without its aid as such, indeed, in despite of all the
embarrassment it was in its power to create, the revenue has been paid
with punctuality by our citizens, the business of exchange, both foreign
and domestic, has been conducted with convenience, and the circulating
medium has been greatly improved.

By the use of the State banks, which do not derive their charters from
the General Government and are not controlled by its authority, it is
ascertained that the moneys of the United States can be collected and
disbursed without loss or inconvenience, and that all the wants of the
community in relation to exchange and currency are supplied as well as
they have ever been before. If under circumstances the most unfavorable
to the steadiness of the money market it has been found that the
considerations on which the Bank of the United States rested its claims
to the public favor were imaginary and groundless, it can not be doubted
that the experience of the future will be more decisive against them.

It has been seen that without the agency of a great moneyed monopoly the
revenue can be collected and conveniently and safely applied to all the
purposes of the public expenditure. It is also ascertained that instead
of being necessarily made to promote the evils of an unchecked paper
system, the management of the revenue can be made auxiliary to the
reform which the legislatures of several of the States have already
commenced in regard to the suppression of small bills, and which has
only to be fostered by proper regulations on the part of Congress to
secure a practical return to the extent required for the security of the
currency to the constitutional medium.

Severed from the Government as political engines, and not susceptible of
dangerous extension and combination, the State banks will not be
tempted, nor will they have the power, which we have seen exercised, to
divert the public funds from the legitimate purposes of the Government.
The collection and custody of the revenue, being, on the contrary, a
source of credit to them, will increase the security which the States
provide for a faithful execution of their trusts by multiplying the
scrutinies to which their operations and accounts will be subjected.
Thus disposed, as well from interest as the obligations of their
charters, it can not be doubted that such conditions as Congress may see
fit to adopt respecting the deposits in these institutions, with a view
to the gradual disuse, of the small bills will be cheerfully complied
with, and that we shall soon gain in place of the Bank of the United
States a practical reform in the whole paper system of the country. If
by this policy we can ultimately witness the suppression of all bank
bills below $20, it is apparent that gold and silver will take their
place and become the principal circulating medium in the common business
of the farmers and mechanics of the country. The attainment of such a
result will form an era in the history of our country which will be
dwelt upon with delight by every true friend of its liberty and
independence. It will lighten the great tax which our paper system has
so long collected from the earnings of labor, and do more to revive and
perpetuate those habits of economy and simplicity which are so congenial
to the character of republicans than all the legislation which has yet
been attempted.

To this subject I feel that I can not too earnestly invite the special
attention of Congress, without the exercise of whose authority the
opportunity to accomplish so much public good must pass unimproved.
Deeply impressed with its vital importance, the Executive has taken all
the steps within his constitutional power to guard the public revenue
and defeat the expectation which the Bank of the United States indulged
of renewing and perpetuating its monopoly on the ground of its necessity
as a fiscal agent and as affording a sounder currency than could be
obtained without such an institution.

In the performance of this duty much responsibility was incurred which
would have been gladly avoided if the stake which the public had in the
question could have been otherwise preserved. Although clothed with the
legal authority and supported by precedent, I was aware that there was
in the act of the removal of the deposits a liability to excite that
sensitiveness to Executive power which it is characteristic and the duty
of free men to indulge; but I relied on this feeling also, directed by
patriotism and intelligence, to vindicate the conduct which in the end
would appear to have been called for by the interests of my country. The
apprehensions natural to this feeling that there may have been a desire,
through the instrumentality of that measure, to extend the Executive
influence, or that it may have been prompted by motives not sufficiently
free from ambition, were not over-looked. Under the operation of our
institutions the public servant who is called on to take a step of high
responsibility should feel in the freedom which gives rise to such
apprehensions his highest security. When unfounded the attention which
they arouse and the discussions they excite deprive those who indulge
them of the power to do harm; when just they but hasten the certainty
with which the great body of our citizens never fail to repel an attempt
to procure the sanction to any exercise of power inconsistent with the
jealous maintenance of their rights.

Under such convictions, and entertaining no doubt that my constitutional
obligations demanded the steps which were taken in reference to the
removal of the deposits, it was impossible for me to be deterred from
the path of duty by a fear that my motives could be misjudged or that
political prejudices could defeat the just consideration of the merits
of my conduct. The result has shewn how safe is this reliance upon the
patriotic temper and enlightened discernment of the people. That measure
has now been before them and has stood the test of all the severe
analysis which its general importance, the interests it affected, and
the apprehensions it excited were calculated to produce, and it now
remains for Congress to consider what legislation has become necessary
in consequence.

I need only add to what I have on former occasions said on this subject
generally that in the regulations which Congress may prescribe
respecting the custody of the public moneys it is desirable that as
little discretion as may be deemed consistent with their safe-keeping
should be given to the executive agents. No one can be more deeply
impressed than I am with the soundness of the doctrine which restrains
and limits, by specific provisions, executive discretion, as far as it
can be done consistently with the preservation of its constitutional
character. In respect to the control over the public money this doctrine
is peculiarly applicable, and is in harmony with the great principle
which I felt I was sustaining in the controversy with the Bank of the
United States, which has resulted in severing to some extent a dangerous
connection between a moneyed and political power. The duty of the
Legislature to define, by clear and positive enactments, the nature and
extent of the action which it belongs to the Executive to superintend
springs out of a policy analogous to that which enjoins upon all
branches of the Federal Government an abstinence from the exercise of
powers not clearly granted.

In such a Government, possessing only limited and specific powers, the
spirit of its general administration can not be wise or just when it
opposes the reference of all doubtful points to the great source of
authority, the States and the people, whose number and diversified
relations securing them against the influences and excitements which may
mislead their agents, make them the safest depository of power. In its
application to the Executive, with reference to the legislative branch
of the Government, the same rule of action should make the President
ever anxious to avoid the exercise of any discretionary authority which
can be regulated by Congress. The biases which may operate upon him will
not be so likely to extend to the representatives of the people in that
body.

In my former messages to Congress I have repeatedly urged the propriety
of lessening the discretionary authority lodged in the various
Departments, but it has produced no effect as yet, except the
discontinuance of extra allowances in the Army and Navy and the
substitution of fixed salaries in the latter. It is believed that the
same principles could be advantageously applied in all cases, and would
promote the efficiency and economy of the public service, at the same
time that greater satisfaction and more equal justice would be secured
to the public officers generally.

The accompanying report of the Secretary of War will put you in
possession of the operations of the Department confided to his care in
all its diversified relations during the past year.

I am gratified in being able to inform you that no occurrence has
required any movement of the military force, except such as is common to
a state of peace. The services of the Army have been limited to their
usual duties at the various garrisons upon the Atlantic and in-land
frontier, with the exceptions states by the Secretary of War. Our small
military establishment appears to be adequate to the purposes for which
it is maintained, and it forms a nucleus around which any additional
force may be collected should the public exigencies unfortunately
require any increase of our military means.

***

State of the Union Address
Andrew Jackson
December 5, 1836

Fellow Citizens of the Senate and of the House of Representatives:

Addressing to you the last annual message I shall ever present to the
Congress of the United States, it is a source of the most heartfelt
satisfaction to be able to congratulate you on the high state of
prosperity which our beloved country has attained. With no causes at
home or abroad to lessen the confidence with which we look to the future
for continuing proofs of the capacity of our free institutions to
produce all the fruits of good government, the general condition of our
affairs may well excite our national pride.

I can not avoid congratulating you, and my country particularly, on the
success of the efforts made during my Administration by the Executive
and Legislature, in conformity with the sincere, constant, and earnest
desire of the people, to maintain peace and establish cordial relations
with all foreign powers. Our gratitude is due to the Supreme Ruler of
the Universe, and I invite you to unite with me in offering to Him
fervent supplications that His providential care may ever be extended to
those who follow us, enabling them to avoid the dangers and the horrors
of war consistently with a just and indispensable regard to the rights
and honor of our country. But although the present state of our foreign
affairs, standing, without important change, as they did when you
separated in July last, is flattering in the extreme, I regret to say
that many questions of an interesting character, at issue with other
powers, are yet unadjusted. Amongst the most prominent of these is that
of our north east boundary. With an undiminished confidence in the
sincere desire of His Britannic Majesty's Government to adjust that
question, I am not yet in possession of the precise grounds upon which
it proposes a satisfactory adjustment.

With France our diplomatic relations have been resumed, and under
circumstances which attest the disposition of both Governments to
preserve a mutually beneficial intercourse and foster those amicable
feelings which are so strongly required by the true interests of the two
countries. With Russia, Austria, Prussia, Naples, Sweden, and Denmark
the best understanding exists, and our commercial intercourse is
gradually expanding itself with them. It is encouraged in all these
countries, except Naples, by their mutually advantageous and liberal
treaty stipulations with us.

The claims of our citizens on Portugal are admitted to be just, but
provision for the payment of them has been unfortunately delayed by
frequent political changes in that Kingdom.

The blessings of peace have not been secured by Spain. Our connections
with that country are on the best footing, with the exception of the
burdens still imposed upon our commerce with her possessions out of
Europe.

The claims of American citizens for losses sustained at the bombardment
of Antwerp have been presented to the Governments of Holland and
Belgium, and will be pressed, in due season, to settlement.

With Brazil and all our neighbors of this continent we continue to
maintain relations of amity and concord, extending our commerce with
them as far as the resources of the people and the policy of their
Governments will permit. The just and long-standing claims of our
citizens upon some of them are yet sources of dissatisfaction and
complaint. No danger is apprehended, however, that they will not be
peacefully, although tardily, acknowledged and paid by all, unless the
irritating effect of her struggle with Texas should unfortunately make
our immediate neighbor, Mexico, an exception.

It is already known to you, by the correspondence between the two
Governments communicated at your last session, that our conduct in
relation to that struggle is regulated by the same principles that
governed us in the dispute between Spain and Mexico herself, and I trust
that it will be found on the most severe scrutiny that our acts have
strictly corresponded with our professions. That the inhabitants of the
United States should feel strong prepossessions for the one party is not
surprising. But this circumstance should of itself teach us great
caution, lest it lead us into the great error of suffering public policy
to be regulated by partially or prejudice; and there are considerations
connected with the possible result of this contest between the two
parties of so much delicacy and importance to the United States that our
character requires that we should neither anticipate events nor attempt
to control them.

The known desire of the Texans to become a part of our system, although
its gratification depends upon the reconcilement of various and
conflicting interests, necessarily a work of time and uncertain in
itself, is calculated to expose our conduct to misconstruction in the
eyes of the world. There are already those who, indifferent to principle
themselves and prone to suspect the want of it in others, charge us with
ambitious designs and insidious policy.

You will perceive by the accompanying documents that the extraordinary
mission from Mexico has been terminated on the sole ground that the
obligations of this Government to itself and to Mexico, under treaty
stipulations, have compelled me to trust a discretionary authority to a
high officer of our Army to advance into territory claimed as part of
Texas if necessary to protect our own or the neighboring frontier from
Indian depredation. In the opinion of the Mexican functionary who has
just left us, the honor of his country will be wounded by American
soldiers entering, with the most amicable avowed purposes, upon ground
from which the followers of his Government have been expelled, and over
which there is at present no certainty of a serious effort on its part
to re-establish its dominion. The departure of this minister was the
more singular as he was apprised that the sufficiency of the causes
assigned for the advance of our troops by the commanding general had
been seriously doubted by me, and there was every reason to suppose that
the troops of the United States, their commander having had time to
ascertain the truth or falsehood of the information upon which they had
been marched to Nacogdoches, would be either there in perfect accordance
with the principles admitted to be just in his conference with the
Secretary of State by the Mexican minister himself, or were already
withdrawn in consequence of the impressive warnings their commanding
officer had received from the Department of War. It is hoped and
believed that his Government will take a more dispassionate and just
view of this subject, and not be disposed to construe a measure of
justifiable precaution, made necessary by its known inability in
execution of the stipulations of our treaty to act upon the frontier,
into an encroachment upon its rights or a stain upon its honor.

In the mean time the ancient complaints of injustice made on behalf of
our citizens are disregarded, and new causes of dissatisfaction have
arisen, some of them of a character requiring prompt remonstrance and
ample and immediate redress. I trust, however, by tempering firmness
with courtesy and acting with great forbearance upon every incident that
has occurred or that may happen, to do and to obtain justice, and thus
avoid the necessity of again bringing this subject to the view of
Congress.

It is my duty to remind you that no provision has been made to execute
our treaty with Mexico for tracing the boundary line between the two
countries. What ever may be the prospect of Mexico's being soon able to
execute the treaty on its part, it is proper that we should be in
anticipation prepared at all times to perform our obligations, without
regard to the probable condition of those with whom we have contracted
them.

The result of the confidential inquiries made into the condition and
prospects of the newly declared Texan Government will be communicated to
you in the course of the session.

Commercial treaties promising great advantages to our enterprising
merchants and navigators have been formed with the distant Governments
of Muscat and Siam. The ratifications have been exchanged, but have not
reached the Department of State. Copes of the treaties will be
transmitted to you if received before, or published if arriving after,
the close of the present session of Congress.

Nothing has occurred to interrupt the good understanding that has long
existed with the Barbary Powers, nor to check the good will which is
gradually growing up from our intercourse with the dominions of the
Government of growing of the distinguished chief of the Ottoman Empire.

Information has been received at the Department of State that a treaty
with the Emperor of Morocco has just been negotiated, which, I hope,
will be received in time to be laid before the Senate previous to the
close of the session.

You will perceive from the report of the Secretary of the Treasury that
the financial means of the country continue to keep pace with its
improvement in all other respects. The receipts into the Treasury during
the present year will amount to about $47,691,898; those from customs
being estimated at $22,523,151, those from lands at about $24,000,000,
and the residue from miscellaneous sources. The expenditures for all
objects during the year are estimated not to exceed $32,000,000, which
will leave a balance in the Treasury for public purposes on the first
day of January next of about $41,723,959. This sum, with the exception
of $5,000,000, will be transferred to the several States in accordance
with the provisions of the act regulating the deposits of the public
money.

The unexpended balances of appropriation on the first day of January
next are estimated at $14,636,062, exceeding by $9,636,062 the amount
which will be left in the deposit banks, subject to the draft of the
Treasurer of the United States, after the contemplated transfers to the
several States are made. If, therefore, the future receipts should not
be sufficient to meet these outstanding and future appropriations, there
may be soon a necessity to use a portion of the funds deposited with the
States.

The consequences apprehended when the deposit act of the last session
received a reluctant approval have been measurably realized. Though an
act merely for the deposit of the surplus moneys of the United States in
the State treasuries for safe-keeping until they may be wanted for the
service of the General Government, it has been extensively spoken of as
an act to give the money to the several States, and they have been
advised to use it as a gift, without regard to the means of refunding it
when called for. Such a suggestion has doubtless been made without a
proper attention to the various principles and interests which are
affected by it.

It is manifest that the law itself can not sanction such a suggestion,
and that as it now stands the States have no more authority to receive
and use these deposits without intending to return them than any deposit
bank or any individual temporarily charged with the safe-keeping or
application of the public money would now have for converting the same
to their private use without the consent and against the will of the
Government. But independently of the violation of public faith and moral
obligation which are involved in this suggestion when examined in
reference to the terms of the present deposit act, it is believed that
the considerations which should govern the future legislation of
Congress on this subject will be equally conclusive against the adoption
of any measure recognizing the principles on which the suggestion has
been made.

Considering the intimate connection of the subject with the financial
interests of the country and its great importance in whatever aspect it
can be viewed, I have bestowed upon it the most anxious reflection, and
feel it to be my duty to state to Congress such thoughts as have
occurred to me, to aid their deliberation in treating it in the manner
best calculated to conduce to the common good.

The experience of other nations admonished us to hasten the
extinguishment of the public debt; but it will be in vain that we have
congratulated each other upon the disappearance of this evil if we do
not guard against the equally great one of promoting the unnecessary
accumulation of public revenue. No political maxim is better established
than that which tells us that an improvident expenditure of money is the
parent of profligacy, and that no people can hope to perpetuate their
liberties who long acquiesce in a policy which taxes them for objects
not necessary to the legitimate and real wants of their Government.
Flattering as is the condition of our country at the present period,
because of its unexampled advance in all the steps of social and
political improvement, it can not be disguised that there is a lurking
danger already apparent in the neglect of this warning truth, and that
the time has arrived when the representatives of the people should be
employed in devising some more appropriate remedy than now exists to
avert it.

Under our present revenue system there is every probability that there
will continue to be a surplus beyond the wants of the Government, and it
has become our duty to decide whether such a result be consistent with
the true objects of our Government.

Should a surplus be permitted to accumulate beyond the appropriations,
it must be retained in the Treasury, as it now is, or distributed among
the people or the States.

To retain it in the Treasury unemployed in any way is impracticable; it
is, besides, against the genius of our free institutions to lock up in
vaults the treasure of the nation. To take from the people the right of
bearing arms and put their weapons of defense in the hands of a standing
army would be scarcely more dangerous to their liberties than to permit
the Government to accumulate immense amounts of treasure beyond the
supplies necessary to its legitimate wants. Such a treasure would
doubtless be employed at some time, as it has been in other countries,
when opportunity tempted ambition.

To collect it merely for distribution to the States would seem to be
highly impolitic, if not as dangerous as the proposition to retain it in
the Treasury.

The shortest reflection must satisfy everyone that to require the people
to pay taxes to the Government merely that they may be paid back again
is sporting with the substantial interests of the country, and no system
which produces such a result can be expected to receive the public
countenance. Nothing could be gained by it even if each individual who
contributed a portion of the tax could receive back promptly the same
portion. But it is apparent that no system of the kind can ever be
enforced which will not absorb a considerable portion of the money to be
distributed in salaries and commissions to the agents employed in the
process and in the various losses and depreciations which arise from
other causes, and the practical effect of such an attempt must ever be
to burden the people with taxes, not for purposes beneficial to them,
but to swell the profits of deposit banks and support a band of useless
public officers.

A distribution to the people is impracticable and unjust in other
respects. It would be taking one man's property and giving it to
another. Such would be the unavoidable result of a rule of equality (and
none other is spoken of or would be likely to be adopted), in as much as
there is no mode by which the amount of the individual contributions of
our citizens to the public revenue can be ascertained. We know that they
contribute unequally, and a rule, therefore, that would distribute to
them equally would be liable to all the objections which apply to the
principle of an equal division of property. To make the General
Government the instrument of carrying this odious principle into effect
would be at once to destroy the means of its usefulness and change the
character designed for it by the framers of the Constitution.

But the more extended and injurious consequences likely to result from a
policy which would collect a surplus revenue from the purpose of
distributing it may be forcibly illustrated by an examination of the
effects already produced by the present deposit act. This act, although
certainly designed to secure the safe-keeping of the public revenue, is
not entirely free in its tendencies from any of the objections which
apply to this principle of distribution. The Government had without
necessity received from the people a large surplus, which, instead of
being employed as heretofore and returned to them by means of the public
expenditure, was deposited with sundry banks. The banks proceeded to
make loans upon this surplus, and thus converted it into banking
capital, and in this manner it has tended to multiply bank charters and
has had a great agency in producing a spirit of wild speculation. The
possession and use of the property out of which this surplus was created
belonged to the people, but the Government has transferred its
possession to incorporated banks, whose interest and effort it is to
make large profits out of its use. This process need only be stated to
show its injustice and bad policy.

And the same observations apply to the influence which is produced by
the steps necessary to collect as well as to distribute such a revenue.
About 3/5 of all the duties on imports are paid in the city of New York,
but it is obvious that the means to pay those duties are drawn from
every quarter of the Union. Every citizen in every State who purchases
and consumes an article which has paid a duty at that port contributes
to the accumulating mass. The surplus collected there must therefore be
made up of moneys or property withdrawn from other points and other
States. Thus the wealth and business of every region from which these
surplus funds proceed must be to some extent injured, while that of the
place where the funds are concentrated and are employed in banking are
proportionably extended. But both in making the transfer of the funds
which are first necessary to pay the duties and collect the surplus and
in making the re-transfer which becomes necessary when the time arrives
for the distribution of that surplus there is a considerable period when
the funds can not be brought into use, and it is manifest that, besides
the loss inevitable from such an operation, its tendency is to produce
fluctuations in the business of the country, which are always productive
of speculation and detrimental to the interests of regular trade.
Argument can scarcely be necessary to show that a measure of this
character ought not to receive further legislative encouragement.

By examining the practical operation of the ration for distribution
adopted in the deposit bill of the last session we shall discover other
features that appear equally objectionable. Let it be assumed, for the
sake of argument, that the surplus moneys to be deposited with the
States have been collected and belong to them in the ration of their
federal representative population--an assumption founded upon the fact
that any deficiencies in our future revenue from imposts and public
lands must be made up by direct taxes collected from the States in that
ration. It is proposed to distribute this surplus--say $30,000,000--not
according to the ration in which it has been collected and belongs to
the people of the States, but in that of their votes in the colleges of
electors of President and Vice President. The effect of a distribution
upon that ration is shown by the annexed table, marked A.

By an examination of that table it will be perceived that in the
distribution of a surplus of $30,000,000 upon that basis there is a
great departure from the principle which regards representation as the
true measure of taxation, and it will be found that the tendency of that
departure will be to increase whatever inequalities have been supposed
to attend the operation of our federal system in respect to its bearings
upon the different interests of the Union. In making the basis of
representation the basis of taxation the framers of the Constitution
intended to equalize the burdens which are necessary to support the
Government, and the adoption of that ratio, while it accomplished this
object, was also the means of adjusting other great topics arising out
of the conflicting views respecting the political equality of the
various members of the Confederacy. What ever, therefore, disturbs the
liberal spirit of the compromises which established a rule of taxation
so just and equitable, and which experience has proved to be so well
adapted to the genius and habits of our people, should be received with
the greatest caution and distrust.

A bare inspection in the annexed table of the differences produced by
the ration used in the deposit act compared with the results of a
distribution according to the ration of direct taxation must satisfy
every unprejudiced mind that the former ration contravenes the spirit of
the Constitution and produces a degree of injustice in the operations of
the Federal Government which would be fatal to the hope of perpetuating
it. By the ration of direct taxation, for example, the State of Delaware
in the collection of $30,000,000 of revenue would pay into the Treasury
$188,716, and in a distribution of $30,000,000 she would receive back
from the Government, according to the ration of the deposit bill, the
sum of $306,122; and similar results would follow the comparison between
the small and the large States throughout the Union, thus realizing to
the small States an advantage which would be doubtless as unacceptable
to them as a motive for incorporating the principle in any system which
would produce it as it would be inconsistent with the rights and
expectations of the large States.

It was certainly the intention of that provision of the Constitution
which declares that "all duties, imposts, and excises" shall "be uniform
throughout the United States" to make the burdens of taxation fall
equally upon the people in what ever State of the Union they may reside.
But what would be the value of such a uniform rule if the moneys raised
by it could be immediately returned by a different one which will give
to the people of some States much more and to those of others much less
than their fair proportions? Were the Federal Government to exempt in
express terms the imports, products, and manufactures of some portions
of the country from all duties while it imposed heavy ones on others,
the injustice could not be greater. It would be easy to show how by the
operation of such a principle the large States of the Union would not
only have to contribute their just share toward the support of the
Federal Government, but also have to bear in some degree the taxes
necessary to support the governments of their smaller sisters; but it is
deemed unnecessary to state the details where the general principle is
so obvious.

A system liable to such objections can never be supposed to have been
sanctioned by the framers of the Constitution when they conferred on
Congress the taxing power, and I feel persuaded that a mature
examination of the subject will satisfy everyone that there are
insurmountable difficulties in the operation of any plan which can be
devised of collecting revenue for the purpose of distributing it.
Congress is only authorized to levy taxes "to pay the debts and provide
for the common defense and general welfare of the United States". There
is no such provision as would authorize Congress to collect together the
property of the country, under the name of revenue, for the purpose of
dividing it equally or unequally among the States or the people. Indeed,
it is not probable that such an idea ever occurred to the States when
they adopted the Constitution. But however this may be, the only safe
rule for us in interpreting the powers granted to the Federal Government
is to regard the absence of express authority to touch a subject so
important and delicate as this as equivalent to a prohibition.

Even if our powers were less doubtful in this respect as the
Constitution now stands, there are considerations afforded by recent
experience which would seem to make it our duty to avoid a resort to
such a system. All will admit that the simplicity and economy of the
State governments mainly depend on the fact that money has to be
supplied to support them by the same men, or their agents, who vote it
away in appropriations. Hence when there are extravagant and wasteful
appropriations there must be a corresponding increase of taxes, and the
people, becoming awakened, will necessarily scrutinize the character of
measures which thus increase their burdens. By the watchful eye of
self-interest the agents of the people in the State governments are
repressed and kept within the limits of a just economy.

But if the necessity of levying the taxes be taken from those who make
the appropriations and thrown upon a more distant and less responsible
set of public agents, who have power to approach the people by an
indirect and stealthy taxation, there is reason to fear that prodigality
will soon supersede those characteristics which have thus far made us
look with so much pride and confidence to the State governments as the
main-stay of our Union and liberties. The State legislatures, instead of
studying to restrict their State expenditures to the smallest possible
sum, will claim credit for their profusion, and harass the General
Government for increased supplies.

Practically there would soon be but one taxing power, and that vested in
a body of men far removed from the people, in which the farming and
mechanic interests would scarcely be represented. The States would
gradually lose their purity as well as their independence; they would
not dare to murmur at the proceedings of the General Government, lest
they should lose their supplies; all would be merged in a practical
consolidation, cemented by wide-spread corruption, which could only be
eradicated by one of those bloody revolutions which occasionally
over-throw the despotic systems of the Old World.

In all the other aspects in which I have been able to look at the effect
of such a principle of distribution upon the best interests of the
country I can see nothing to compensate for the disadvantages to which I
have adverted. If we consider the protective duties, which are in a
great degree the source of the surplus revenue, beneficial to one
section of the Union and prejudicial to another, there is no corrective
for the evil in such a plan of distribution. On the contrary, there is
reason to fear that all the complaints which have sprung from this cause
would be aggravated. Everyone must be sensible that a distribution of
the surplus must beget a disposition to cherish the means which create
it, and any system, therefore, into which it enters must have a powerful
tendency to increase rather than diminish the tariff. If it were even
admitted that the advantages of such a system could be made equal to all
the sections of the Union, the reasons already so urgently calling for a
reduction of the revenue would never the less lose none of their force,
for it will always be improbable that an intelligent and virtuous
community can consent to raise a surplus for the mere purpose of
dividing it, diminished as it must inevitably be by the expenses of the
various machinery necessary to the process.

The safest and simplest mode of obviating all the difficulties which
have been mentioned is to collect only revenue enough to meet the wants
of the Government, and let the people keep the balance of their property
in their own hands, to be used for their own profit. Each State will
then support its own government and contribute its due share toward the
support of the General Government. There would be no surplus to cramp
and lessen the resources of individual wealth and enterprise, and the
banks would be left to their ordinary means. Whatever agitations and
fluctuations might arise from our unfortunate paper system, they could
never be attributed, justly or unjustly, to the action of the Federal
Government. There would be some guaranty that the spirit of wild
speculation which seeks to convert the surplus revenue into banking
capital would be effectually checked, and that the scenes of
demoralization which are now so prevalent through the land would
disappear.

Without desiring to conceal that the experience and observation of the
last two years have operated a partial change in my views upon this
interesting subject, it is never the less regretted that the suggestions
made by me in my annual messages of 1829 and 1830 have been greatly
misunderstood. At that time the great struggle was begun against that
latitudinarian construction of the Constitution which authorizes the
unlimited appropriation of the revenues of the Union to internal
improvements within the States, tending to invest in the hands and place
under the control of the General Government all the principal roads and
canals of the country, in violation of State rights and in derogation of
State authority.

At the same time the condition of the manufacturing interest was such as
to create an apprehension that the duties on imports could not without
extensive mischief be reduced in season to prevent the accumulation of a
considerable surplus after the payment of the national debt. In view of
the dangers of such a surplus, and in preference to its application to
internal improvements in derogation of the rights and powers of the
States, the suggestion of an amendment of the Constitution to authorize
its distribution was made. It was an alternative for what were deemed
greater evils--a temporary resort to relieve an over-burdened treasury
until the Government could, without a sudden and destructive revulsion
in the business of the country, gradually return to the just principle
of raising no more revenue from the people in taxes than is necessary
for its economical support.

Even that alternative was not spoken of but in connection with an
amendment of the Constitution. No temporary inconvenience can justify
the exercise of a prohibited power not granted by that instrument, and
it was from a conviction that the power to distribute even a temporary
surplus of revenue is of that character that it was suggested only in
connection with an appeal to the source of all legal power in the
General Government, the States which have established it. No such appeal
has been taken, and in my opinion a distribution of the surplus revenue
by Congress either to the States or the people is to be considered as
among the prohibitions of the Constitution.

As already intimated, my views have undergone a change so far as to be
convinced that no alteration of the Constitution in this respect is wise
or expedient. The influence of an accumulating surplus upon the credit
system of the country, producing dangerous extensions and ruinous
contractions, fluctuations in the price of property, rash speculation,
idleness, extravagance, and a deterioration of morals, have taught us
the important lesson that any transient mischief which may attend the
reduction of our revenue to the wants of our Government is to be borne
in preference to an over-flowing treasury.

I beg leave to call your attention to another subject intimately
associated with the preceding one--the currency of the country.

It is apparent from the whole context of the Constitution, as well as
the history of the times which gave birth to it, that it was the purpose
of the Convention to establish a currency consisting of the precious
metals. These, from their peculiar properties which rendered them the
standard of value in all other countries, were adopted in this as well
to establish its commercial standard in reference to foreign countries
by a permanent rule as to exclude the use of a mutable medium of
exchange, such as of certain agricultural commodities recognized by the
statutes of some States as a tender for debts, or the still more
pernicious expedient of a paper currency.

The last, from the experience of the evils of the issues of paper during
the Revolution, had become so justly obnoxious as not only to suggest
the clause in the Constitution forbidding the emission of bills of
credit by the States, but also to produce that vote in the Convention
which negatived the proposition to grant power to Congress to charter
corporations--a proposition well understood at the time as intended to
authorize the establishment of a national bank, which was to issue a
currency of bank notes on a capital to be created to some extent out of
Government stocks. Although this proposition was refused by a direct
vote of the Convention, the object was afterwards in effect obtained by
its ingenious advocates through a strained construction of the
Constitution. The debts of the Revolution were funded at prices which
formed no equivalent compared with the nominal amount of the stock, and
under circumstances which exposed the motives of some of those who
participated in the passage of the act to distrust.

The facts that the value of the stock was greatly enhanced by the
creation of the bank, that it was well understood that such would be the
case, and that some of the advocates of the measure were largely
benefited by it belong to the history of the times, and are well
calculated to diminish the respect which might otherwise have been due
to the action of the Congress which created the institution.

On the establishment of a national bank it became the interest of its
creditors that gold should be superseded by the paper of the bank as a
general currency. A value was soon attached to the gold coins which made
their exportation to foreign countries as a mercantile commodity more
profitable than their retention and use at home as money. It followed as
a matter of course, if not designed by those who established the bank,
that the bank became in effect a substitute for the Mint of the United
States.

Such was the origin of a national bank currency, and such the beginning
of those difficulties which now appear in the excessive issues of the
banks incorporated by the various States.

Although it may not be possible by any legislative means within our
power to change at once the system which has thus been introduced, and
has received the acquiescence of all portions of the country, it is
certainly our duty to do all that is consistent with our constitutional
obligations in preventing the mischiefs which are threatened by its
undue extension. That the efforts of the fathers of our Government to
guard against it by a constitutional provision were founded on an
intimate knowledge of the subject has been frequently attested by the
bitter experience of the country. The same causes which led them to
refuse their sanction to a power authorizing the establishment of
incorporations for banking purposes now exist in a much stronger degree
to urge us to exert the utmost vigilance in calling into action the
means necessary to correct the evils resulting from the unfortunate
exercise of the power, and it is hoped that the opportunity for
effecting this great good will be improved before the country witnesses
new scenes of embarrassment and distress.

Variableness must ever be the characteristic of a currency of which the
precious metals are not the chief ingredient, or which can be expanded
or contracted without regard to the principles that regulate the value
of those metals as a standard in the general trade of the world. With us
bank issues constitute such a currency, and must ever do so until they
are made dependent on those just proportions of gold and silver as a
circulating medium which experience has proved to be necessary not only
in this but in all other commercial countries. Where those proportions
are not infused into the circulation and do not control it, it is
manifest that prices must vary according to the tide of bank issues, and
the value and stability of property must stand exposed to all the
uncertainty which attends the administration of institutions that are
constantly liable to the temptation of an interest distinct from that of
the community in which they are established.

The progress of an expansion, or rather a depreciation, of the currency
by excessive bank issues is always attended by a loss to the laboring
classes. This portion of the community have neither time nor opportunity
to watch the ebbs and flows of the money market. Engaged from day to day
in their useful toils, they do not perceive that although their wages
are nominally the same, or even somewhat higher, they are greatly
reduced in fact by the rapid increase of a spurious currency, which, as
it appears to make money abound, they are at first inclined to consider
a blessing.

It is not so with the speculator, by whom this operation is better
understood, and is made to contribute to his advantage. It is not until
the prices of the necessaries of life become so dear that the laboring
classes can not supply their wants out of their wages that the wages
rise and gradually reach a justly proportioned rate to that of the
products of their labor. When thus, by depreciation in consequence of
the quantity of paper in circulation, wages as well as prices become
exorbitant, it is soon found that the whole effect of the adulteration
is a tariff on our home industry for the benefit of the countries where
gold and silver circulate and maintain uniformity and moderation in
prices. It is then perceived that the enhancement of the price of land
and labor produces a corresponding increase in the price of products
until these products do not sustain a competition with similar ones in
other countries, and thus both manufactured and agricultural productions
cease to bear expectation from the country of the spurious currency,
because they can not be sold for cost.

This is the process by which specie is banished by the paper of the
banks. Their vaults are soon exhausted to pay for foreign commodities.
The next step is a stoppage of specie payment--a total degradation of
paper as a currency--unusual depression of prices, the ruin of debtors,
and the accumulation of property in the hands of creditors and cautious
capitalists.

It was in view of these evils, together with the dangerous power wielded
by the Bank of the United States and its repugnance to our Constitution,
that I was induced to exert the power conferred upon me by the American
people to prevent the continuance of that institution. But although
various dangers to our republican institutions have been obviated by the
failure of that bank to extort from the Government a renewal of its
charter, it is obvious that little has been accomplished except a
salutary change of public opinion toward restoring to the country the
sound currency provided for in the Constitution.

In the acts of several of the States prohibiting the circulation of
small notes and the auxiliary enactments of Congress at the last session
forbidding their reception or payment on public account, the true policy
of the country has been advanced and a larger portion of the precious
metals infused into our circulating medium. These measures will probably
be followed up in due time by the enactment of State laws banishing from
circulation bank notes of still higher denominations, and the object may
be materially promoted by further acts of Congress forbidding the
employment as fiscal agents of such banks as continue to issue notes of
low denominations and throw impediments in the way of the circulation of
gold and silver.

The effects of an extension of bank credits and over-issues of bank
paper have been strikingly illustrated in the sales of the public lands.
From the returns made by the various registers and receivers in the
early part of last summer it was perceived that the receipts arising
from the sales of the public lands were increasing to an unprecedented
amount. In effect, however, these receipts amounted to nothing more than
credits in bank. The banks lent out their notes to speculators. They
were paid to the receivers and immediately returned to the banks, to be
lent out again and again, being mere instruments to transfer to
speculators the most valuable public land and pay the Government by a
credit on the books of the banks.

Those credits on the books of some of the Western banks, usually called
deposits, were already greatly beyond their immediate means of payment,
and were rapidly increasing. Indeed, each speculation furnished means
for another; for no sooner had one individual or company paid in the
notes than they were immediately lent to another for a like purpose, and
the banks were extending their business and their issues so largely as
to alarm considerate men and render it doubtful whether these bank
credits, if permitted to accumulate, would ultimately be of the least
value to the Government. The spirit of expansion and speculation was not
confined to the deposit banks, but pervaded the whole multitude of banks
throughout the Union and was giving rise to new institutions to
aggravate the evil.

The safety of the public funds and the interest of the people generally
required that these operations should be checked; and it became the duty
of every branch of the General and State Governments to adopt all
legitimate and proper means to produce that salutary effect. Under this
view of my duty I directed the issuing of the order which will be laid
before you by the Secretary of the Treasury, requiring payment for the
public lands sold to be made in specie, with an exception until the 15th
of the present month in favor of actual settlers.

This measure has produced many salutary consequences. It checked the
career of the Western banks and gave them additional strength in
anticipation of the pressure which has since pervaded our Eastern as
well as the European commercial cities. By preventing the extension of
the credit system it measurably cut off the means of speculation and
retarded its progress in monopolizing the most valuable of the public
lands. It has tended to save the new States from a non-resident
proprietorship, one of the greatest obstacles to the advancement of a
new country and the prosperity of an old one. It has tended to keep open
the public lands for entry by emigrants at Government prices instead of
their being compelled to purchase of speculators at double or triple
prices. And it is conveying into the interior large sums in silver and
gold, there to enter permanently into the currency of the country and
place it on a firmer foundation. It is confidently believed that the
country will find in the motives which induced that order and the happy
consequences which will have ensued much to commend and nothing to
condemn.

It remains for Congress if they approve the policy which dictated this
order to follow it up in its various bearings. Much good, in my
judgment, would be produced by prohibiting sales of the public lands
except to actual settlers at a reasonable reduction of price, and to
limit the quantity which shall be sold to them. Although it is believed
the General Government never ought to receive anything but the
constitutional currency in exchange for the public lands, that point
would be of less importance if the lands were sold for immediate
settlement and cultivation. Indeed, there is scarcely a mischief arising
out of our present land system, including the accumulating surplus of
revenues, which would not be remedied at once by a restriction on land
sales to actual settlers; and it promises other advantages to the
country in general and to the new States in particular which can not
fail to receive the most profound consideration of Congress.

Experience continues to realize the expectations entertained as to the
capacity of the State banks to perform the duties of fiscal agents for
the Government at the time of the removal of the deposits. It was
alleged by the advocates of the Bank of the United States that the State
banks, what ever might be the regulations of the Treasury Department,
could not make the transfers required by the Government or negotiate the
domestic exchanges of the country. It is now well ascertained that the
real domestic exchanges performed through discounts by the United States
Bank and its 25 branches were at least one third less than those of the
deposit banks for an equal period of time; and if a comparison be
instituted between the amounts of service rendered by these institutions
on the broader basis which has been used by the advocates of the United
States Bank in estimating what they consider the domestic exchanges
transacted by it, the result will be still more favorable to the deposit
banks.

The whole amount of public money transferred by the Bank of the United
States in 1832 was $16,000,000. The amount transferred and actually paid
by the deposit banks in the year ending the first of October last was
$39,319,899; the amount transferred and paid between that period and the
6th of November was $5,399,000, and the amount of transfer warrants
outstanding on that day was $14,450,000, making an aggregate of
$59,168,894. These enormous sums of money first mentioned have been
transferred with the greatest promptitude and regularity, and the rates
at which the exchanges have been negotiated previously to the passage of
the deposit act were generally below those charged by the Bank of the
United States. Independently of these services, which are far greater
than those rendered by the United States Bank and its 25 branches, a
number of the deposit banks have, with a commendable zeal to aid in the
improvement of the currency, imported from abroad, at their own expense,
large sums of the precious metals for coinage and circulation.

In the same manner have nearly all the predictions turned out in respect
to the effect of the removal of the deposits--a step unquestionably
necessary to prevent the evils which it was foreseen the bank itself
would endeavor to create in a final struggle to procure a renewal of its
charter. It may be thus, too, in some degree with the further steps
which may be taken to prevent the excessive issue of other bank paper,
but it is to be hoped that nothing will now deter the Federal and State
authorities from the firm and vigorous performance of their duties to
themselves and to the people in this respect.

In reducing the revenue to the wants of the Government your particular
attention is invited to those articles which constitute the necessaries
of life. The duty on salt was laid as a war tax, and was no doubt
continued to assist in providing for the payment of the war debt. There
is no article the release of which from taxation would be felt so
generally and so beneficially. To this may be added all kinds of fuel
and provisions. Justice and benevolence unite in favor of releasing the
poor of our cities from burdens which are not necessary to the support
of our Government and tend only to increase the wants of the destitute.

It will be seen by the report of the Secretary of the Treasury and the
accompanying documents that the Bank of the United States has made no
payment on account of the stock held by the Government in that
institution, although urged to pay any portion which might suit its
convenience, and that it has given no information when payment may be
expected. Nor, although repeatedly requested, has it furnished the
information in relation to its condition which Congress authorized the
Secretary to collect at their last session. Such measures as are within
the power of the Executive have been taken to ascertain the value of the
stock and procure the payment as early as possible.

The conduct and present condition of that bank and the great amount of
capital vested in it by the United States require your careful
attention. Its charter expired on the third day of March last, and it
has now no power but that given in the twenty-first section, "to use the
corporate name, style, and capacity for the purpose of suits for the
final settlement and liquidation of the affairs and accounts of the
corporation, and for the sale and disposition of their estate--real,
personal, and mixed--but not for any other purpose or in any other
manner what so ever, nor for a period exceeding two years after the
expiration of the said term of incorporation".

Before the expiration of the charter the stock-holders of the bank
obtained an act of incorporation from the legislature of Pennsylvania,
excluding only the United States. Instead of proceeding to wind up their
concerns and pay over to the United States the amount due on account of
the stock held by them, the president and directors of the old bank
appear to have transferred the books, papers, notes, obligations, and
most or all of its property to this new corporation, which entered upon
business as a continuation of the old concern.

Amongst other acts of questionable validity, the notes of the expired
corporation are known to have been used as its own and again put in
circulation. That the old bank had no right to issue or re-issue its
notes after the expiration of its charter can not be denied, and that it
could not confer any such right on its substitute any more than exercise
it itself is equally plain. In law and honesty the notes of the bank in
circulation at the expiration of its charter should have been called in
by public advertisement, paid up as presented, and, together with those
on hand, canceled and destroyed.

Their re-issue is sanctioned by no law and warranted by no necessity. If
the United States be responsible in their stock for the payment of these
notes, their re-issue by the new corporation for their own profit is a
fraud on the Government. If the United States is not responsible, then
there is no legal responsibility in any quarter, and it is a fraud on
the country. They are the redeemed notes of a dissolved partnership,
but, contrary to the wishes of the retiring partner and without his
consent, are again re-issued and circulated.

It is the high and peculiar duty of Congress to decide whether any
further legislation be necessary for the security of the large amount of
public property now held and in use by the new bank, and for vindicating
the rights of the Government and compelling a speedy and honest
settlement with all the creditors of the old bank, public and private,
or whether the subject shall be left to the power now possessed by the
Executive and judiciary. It remains to be seen whether the persons who
as managers of the old bank undertook to control the Government,
retained the public dividends, shut their doors upon a committee of the
House of Representatives, and filled the country with panic to
accomplish their own sinister objects may now as managers of a new bank
continue with impunity to flood the country with a spurious currency,
use the $7 millions of Government stock for their own profit, and refuse
to the United States all information as to the present condition of
their own property and the prospect of recovering it into their own
possession.

The lessons taught by the Bank of the United States can not well be lost
upon the American people. They will take care never again to place so
tremendous a power in irresponsible hands, and it will be fortunate if
they seriously consider the consequences which are likely to result on a
smaller scale from the facility with which corporate powers are granted
by their State governments.

It is believed that the law of the last session regulating the deposit
banks operates onerously and unjustly upon them in many respects, and it
is hoped that Congress, on proper representations, will adopt the
modifications which are necessary to prevent this consequence.

The report of the Secretary of War ad interim and the accompanying
documents, all which are herewith laid before you, will give you a full
view of the diversified and important operations of that Department
during the past year.

The military movements rendered necessary by the aggressions of the
hostile portions of the Seminole and Creek tribes of Indians, and by
other circumstances, have required the active employment of nearly our
whole regular force, including the Marine Corps, and of large bodies of
militia and volunteers. With all these events so far as they were known
at the seat of Government before the termination of your last session
you are already acquainted, and it is therefore only needful in this
place to lay before you a brief summary of what has since occurred.

The war with the Seminoles during the summer was on our part chiefly
confined to the protection of our frontier settlements from the
incursions of the enemy, and, as a necessary and important means for the
accomplishment of that end, to the maintenance of the posts previously
established. In the course of this duty several actions took place, in
which the bravery and discipline of both officers and men were
conspicuously displayed, and which I have deemed it proper to notice in
respect to the former by the granting of brevet rank for gallant
services in the field. But as the force of the Indians was not so far
weakened by these partial successes as to lead them to submit, and as
their savage inroads were frequently repeated, early measures were taken
for placing at the disposal of Governor Call, who as commander in chief
of the Territorial militia had been temporarily invested with the
command, an ample force for the purpose of resuming offensive operations
in the most efficient manner so soon as the season should permit. Major
General Jesup was also directed, on the conclusion of his duties in the
Creek country, to repair to Florida and assume the command.

The result of the first movement made by the forces under the direction
of Governor Call in October last, as detailed in the accompanying
papers, excited much surprise and disappointment. A full explanation has
been required of the causes which led to the failure of that movement,
but has not yet been received. In the mean time, as it was feared that
the health of Governor Call, who was understood to have suffered much
from sickness, might not be adequate to the crisis, and as Major General
Jesup was known to have reached Florida, that officer was directed to
assume command, and to prosecute all needful operations with the utmost
promptitude and vigor. From the force at his disposal and the
dispositions he has made and is instructed to make, and from the very
efficient measures which it is since ascertained have been taken by
Governor Call, there is reason to hope that they will soon be enabled to
reduce the enemy to subjection. In the mean time, as you will perceive
from the report of the Secretary, there is urgent necessity for further
appropriations to suppress these hostilities.

Happily for the interests of humanity, the hostilities with the Creeks
were brought to a close soon after your adjournment, without that
effusion of blood which at one time was apprehended as inevitable. The
unconditional submission of the hostile party was followed by their
speedy removal to the country assigned them West of the Mississippi. The
inquiry as to alleged frauds in the purchase of the reservations of
these Indians and the causes of their hostilities, requested by the
resolution of the House of Representatives of the first of July last
July 1st, 1836 to be made by the President, is now going on through the
agency of commissioners appointed for that purpose. Their report may be
expected during your present session.

The difficulties apprehended in the Cherokee country have been
prevented, and the peace and safety of that region and its vicinity
effectually secured, by the timely measures taken by the War Department,
and still continued.

The discretionary authority given to General Gaines to cross the Sabine
and to occupy a position as far West as Nacogdoches, in case he should
deem such a step necessary to the protection of the frontier and to the
fulfillment of the stipulations contained in our treaty with Mexico, and
the movement subsequently made by that officer have been alluded to in a
former part of this message. At the date of the latest intelligence from
Nacogdoches our troops were yet at that station, but the officer who has
succeeded General Gaines has recently been advised that from the facts
known at the seat of Government there would seem to be no adequate cause
for any longer maintaining that position, and he was accordingly
instructed, in case the troops were not already withdrawn under the
discretionary powers before possessed by him, to give the requisite
orders for that purpose on the receipt of the instructions, unless he
shall then have in his possession such information as shall satisfy him
that the maintenance of the post is essential to the protection of our
frontiers and to the due execution of our treaty stipulations, as
previously explained to him.

Whilst the necessities existing during the present year for the service
of militia and volunteers have furnished new proofs of the patriotism of
our fellow citizens, they have also strongly illustrated the importance
of an increase in the rank and file of the Regular Army. The views of
this subject submitted by the Secretary of War in his report meet my
entire concurrence, and are earnestly commended to the deliberate
attention of Congress. In this connection it is also proper to remind
you that the defects in our present militia system are every day
rendered more apparent. The duty of making further provision by law for
organizing, arming, and disciplining this arm of defense has been so
repeatedly presented to Congress by myself and my predecessors that I
deem it sufficient on this occasion to refer to the last annual message
and to former Executive communications in which the subject has been
discussed.

It appears from the reports of the officers charged with mustering into
service the volunteers called for under the act of Congress of the last
session that more presented themselves at the place of rendezvous in
Tennessee than were sufficient to meet the requisition which had been
made by the Secretary of War upon the governor of that State. This was
occasioned by the omission of the governor to apportion the requisition
to the different regiments of militia so as to obtain the proper number
of troops and no more. It seems but just to the patriotic citizens who
repaired to the general rendezvous under circumstances authorizing them
to believe that their services were needed and would be accepted that
the expenses incurred by them while absent from their homes should be
paid by the Government. I accordingly recommend that a law to this
effect be passed by Congress, giving them a compensation which will
cover their expenses on the march to and from the place of rendezvous
and while there; in connection with which it will also be proper to make
provision for such other equitable claims growing out of the service of
the militia as may not be embraced in the existing laws.

On the unexpected breaking out of hostilities in Florida, Alabama, and
Georgia it became necessary in some cases to take the property of
individuals for public use. Provision should be made by law for
indemnifying the owners; and I would also respectfully suggest whether
some provision may not be made, consistently with the principles of our
Government, for the relief of the sufferers by Indian depredations or by
the operations of our own troops.

No time was lost after the making of the requisite appropriations in
resuming the great national work of completing the unfinished
fortifications on our sea-board and of placing them in a proper state of
defense. In consequence, however, of the very late day at which those
bills were passed, but little progress could be made during the season
which has just closed. A very large amount of the moneys granted at your
last session accordingly remains unexpended; but as the work will be
again resumed at the earliest moment in the coming spring, the balance
of the existing appropriations, and in several cases which will be laid
before you, with the proper estimates, further sums for the like
objects, may be usefully expended during the next year.

The recommendations of an increase in the Engineer Corps and for a
reorganization of the Topographical Corps, submitted to you in my last
annual message, derive additional strength from the great embarrassments
experienced during the present year in those branches of the service,
and under which they are now suffering. Several of the most important
surveys and constructions directed by recent laws have been suspended in
consequence of the want of adequate force in these corps.

The like observations may be applied to the Ordnance Corps and to the
general staff, the operations of which as they are now organized must
either be frequently interrupted or performed by officers taken from the
line of the Army, to the great prejudice of the service.

For a general view of the condition of the Military Academy and of other
branches of the military service not already noticed, as well as for
further illustrations of those which have been mentioned, I refer you to
the accompanying documents, and among the various proposals contained
therein for legislative action I would particularly notice the
suggestion of the Secretary of War for the revision of the pay of the
Army as entitled to your favorable regard.

The national policy, founded alike in interest and in humanity, so long
and so steadily pursued by this Government for the removal of the Indian
tribes originally settled on this side of the Mississippi to the W of
that river, may be said to have been consummated by the conclusion of
the late treaty with the Cherokees. The measures taken in the execution
of that treaty and in relation to our Indian affairs generally will
fully appear by referring to the accompanying papers. Without dwelling
on the numerous and important topics embraced in them, I again invite
your attention to the importance of providing a well-digested and
comprehensive system for the protection, supervision, and improvement of
the various tribes now planted in the Indian country.

The suggestions submitted by the Commissioner of Indian Affairs, and
enforced by the Secretary, on this subject, and also in regard to the
establishment of additional military posts in the Indian country, are
entitled to your profound consideration. Both measures are necessary,
for the double purpose of protecting the Indians from intestine war, and
in other respects complying with our engagements with them, and of
securing our western frontier against incursions which otherwise will
assuredly be made on it. The best hopes of humanity in regard to the
aboriginal race, the welfare of our rapidly extending settlements, and
the honor of the United States are all deeply involved in the relations
existing between this Government and the emigrating tribes. I trust,
therefore, that the various matters submitted in the accompanying
documents in respect to those relations will receive your early and
mature deliberation, and that it may issue in the adoption of
legislative measures adapted to the circumstances and duties of the
present crisis.

You are referred to the report of the Secretary of the Navy for a
satisfactory view of the operations of the Department under his charge
during the present year. In the construction of vessels at the different
navy yards and in the employment of our ships and squadrons at sea that
branch of the service has been actively and usefully employed. While the
situation of our commercial interests in the West Indies required a
greater number than usual of armed vessels to be kept on that station,
it is gratifying to perceive that the protection due to our commerce in
other quarters of the world has not proved insufficient. Every effort
has been made to facilitate the equipment of the exploring expedition
authorized by the act of the last session, but all the preparation
necessary to enable it to sail has not yet been completed. No means will
be spared by the Government to fit out the expedition on a scale
corresponding with the liberal appropriations for the purpose and with
the elevated character of the objects which are to be effected by it.

I beg leave to renew the recommendation made in my last annual message
respecting the enlistment of boys in our naval service, and to urge upon
your attention the necessity of further appropriations to increase the
number of ships afloat and to enlarge generally the capacity and force
of the Navy. The increase of our commerce and our position in regard to
the other powers of the world will always make it our policy and
interest to cherish the great naval resources of our country.

The report of the Post Master General presents a gratifying picture of
the condition of the Post Office Department. Its revenues for the year
ending the 30th June last were $3,398,455.19, showing an increase of
revenue over that of the preceding year of $404,878.53, or more than
13%. The expenditures for the same year were $2,755,623.76, exhibiting a
surplus of $642,831.43. The Department has been redeemed from
embarrassment and debt, has accumulated a surplus exceeding half a
million dollars, has largely extended and is preparing still further to
extend the mail service, and recommends a reduction of postages equal to
about 20%. It is practicing upon the great principle which should
control every branch of our Government of rendering to the public the
greatest good possible with the least possible taxation to the people.

The scale of postages suggested by the Post Master General recommends
itself, not only by the reduction it proposes, but by the simplicity of
its arrangement, its conformity with the Federal currency, and the
improvement it will introduce into the accounts of the Department and
its agents.

Your particular attention is invited to the subject of mail contracts
with railroad companies. The present laws providing for the making of
contracts are based upon the presumption that competition among bidders
will secure the service at a fair price; but on most of the railroad
lines there is no competition in that kind of transportation, and
advertising is therefore useless. No contract can now be made with them
except such as shall be negotiated before the time of offering or
afterwards, and the power of the Post Master General to pay them high
prices is practically without limitation. It would be a relief to him
and no doubt would conduce to the public interest to prescribe by law
some equitable basis upon which such contracts shall rest, and restrict
him by a fixed rule of allowance. Under a liberal act of that sort he
would undoubtedly be able to secure the services of most of the railroad
companies, and the interest of the Department would be thus advanced.

The correspondence between the people of the United States and the
European nations, and particularly with the British Islands, has become
very extensive, and requires the interposition of Congress to give it
security. No obstacle is perceived to an interchange of mails between
New York and Liverpool or other foreign ports, as proposed by the Post
Master General. On the contrary, it promises, by the security it will
afford, to facilitate commercial transactions and give rise to an
enlarged intercourse among the people of different nations, which can
not but have a happy effect. Through the city of New York most of the
correspondence between the Canadas and Europe is now carried on, and
urgent representations have been received from the head of the
provincial post office asking the interposition of the United States to
guard it from the accidents and losses to which it is now subjected.
Some legislation appears to be called for as well by our own interest as
by comity to the adjoining British provinces.

The expediency of providing a fire-proof building for the important
books and papers of the Post Office Department is worthy of
consideration. In the present condition of our Treasury it is neither
necessary nor wise to leave essential public interests exposed to so
much danger when they can so readily be made secure. There are weighty
considerations in the location of a new building for that Department in
favor of placing it near the other executive buildings.

The important subjects of a survey of the coast and the manufacture of a
standard of weights and measures for the different custom houses have
been in progress for some years under the general direction of the
Executive and the immediate superintendence of a gentleman possessing
high scientific attainments. At the last session of Congress the making
of a set of weights and measures for each State in the Union was added
to the others by a joint resolution.

The care and correspondence as to all these subjects have been devolved
on the Treasury Department during the last year. A special report from
the Secretary of the Treasury will soon be communicated to Congress,
which will show what has been accomplished as to the whole, the number
and compensation of the persons now employed in these duties, and the
progress expected to be made during the ensuing year, with a copy of the
various correspondence deemed necessary to throw light on the subjects
which seem to require additional legislation.

Claims have been made for retrospective allowances in behalf of the
superintendent and some of his assistants, which I did not feel
justified in granting. Other claims have been made for large increases
in compensation, which, under the circumstances of the several cases, I
declined making without the express sanction of Congress. In order to
obtain that sanction the subject was at the last session, on my
suggestion and by request of the immediate superintendent, submitted by
the Treasury Department to the Committee on Commerce of the House of
Representatives. But no legislative action having taken place, the early
attention of Congress is now invited to the enactment of some express
and detailed provisions in relation to the various claims made for the
past, and to the compensation and allowances deemed proper for the
future.

It is further respectfully recommended that, such being the
inconvenience of attention to these duties by the Chief Magistrate, and
such the great pressure of business on the Treasury Department, the
general supervision of the coast survey and the completion of the
weights and measures, if the works are kept united, should be devolved
on a board of officers organized specially for that purpose, or on the
Navy Board attached to the Navy Department.

All my experience and reflection confirm the conviction I have so often
expressed to Congress in favor of an amendment of the Constitution which
will prevent in any event the election of the President and Vice
President of the United States devolving on the House of Representatives
and the Senate, and I therefore beg leave again to solicit your
attention to the subject. There were various other suggestions in my
last annual message not acted upon, particularly that relating to the
want of uniformity in the laws of the District of Columbia, that are
deemed worthy of your favorable consideration.

Before concluding this paper I think it due to the various Executive
Departments to bear testimony to their prosperous condition and to the
ability and integrity with which they have been conducted. It has been
my aim to enforce in all of them a vigilant and faithful discharge of
the public business, and it is gratifying to me to believe that there is
no just cause of complaint from any quarter at the manner in which they
have fulfilled the objects of their creation.

Having now finished the observations deemed proper on this the last
occasion I shall have of communicating with the two Houses of Congress
at their meeting, I can not omit an expression of the gratitude which is
due to the great body of my fellow citizens, in whose partiality and
indulgence I have found encouragement and support in the many difficult
and trying scenes through which it has been my lot to pass during my
public career. Though deeply sensible that my exertions have not been
crowned with a success corresponding to the degree of favor bestowed
upon me, I am sure that they will be considered as having been directed
by an earnest desire to promote the good of my country, and I am
consoled by the persuasion that what ever errors have been committed
will find a corrective in the intelligence and patriotism of those who
will succeed us. All that has occurred during my Administration is
calculated to inspire me with increased confidence in the stability of
our institutions; and should I be spared to enter upon that retirement
which is so suitable to my age and infirm health and so much desired by
me in other respects, I shall not cease to invoke that beneficent Being
to whose providence we are already so signally indebted for the
continuance of His blessings on our beloved country.

***

State of the Union Address
Martin van Buren
December 5, 1837

Fellow-Citizens of the Senate and House of Representatives:

We have reason to renew the expression of our devout gratitude to the
Giver of All Good for His benign protection. Our country presents on
every side the evidences of that continued favor under whose auspices
it, has gradually risen from a few feeble and dependent colonies to a
prosperous and powerful confederacy. We are blessed with domestic
tranquillity and all the elements of national prosperity. The pestilence
which, invading for a time some flourishing portions of the Union,
interrupted the general prevalence of unusual health has happily been
limited in extent and arrested in its fatal career. The industry and
prudence of our citizens are gradually relieving them from the pecuniary
embarrassments under which portions of them have labored; judicious
legislation and the natural and boundless resources of the country have
afforded wise end timely aid to private enterprise, and the activity
always characteristic of our people has already in a great degree
resumed its usual and profitable channels.

The condition of our foreign relations has not materially changed since
the last annual message of my predecessor. We remain at peace with all
nations, and no efforts on my part consistent with the preservation of
our rights and the honor of the country shall be spared to maintain a
position so consonant to our institutions. We have faithfully sustained
the foreign policy with which the United States, under the guidance of
their first President, took their stand in the family of nations--that
of regulating their intercourse with other powers by the approved
principles of private life; asking and according equal rights and equal
privileges; rendering and demanding justice in all cases; advancing
their own and discussing the pretensions of others with candor,
directness, and sincerity; appealing at all times to reason, but never
yielding to force nor seeking to acquire anything for themselves by its
exercise.

A rigid adherence to this policy has left this Government with scarcely
a claim upon its justice for injuries arising from acts committed by its
authority. The most imposing and perplexing of those of the United
States upon foreign governments for aggressions upon our citizens were
disposed of by my predecessor. Independently of the benefits conferred
upon our citizens by restoring to the mercantile community so many
millions of which they had been wrongfully divested, a great service was
also rendered to his country by the satisfactory adjustment of so many
ancient and irritating subjects of contention; and it reflects no
ordinary credit on his successful administration of public affairs that
this great object was accomplished without compromising on any occasion
either the honor or the peace of the nation.

With European powers no new subjects of difficulty have arisen, and
those which were under discussion, although not terminated, do not
present a more unfavorable aspect for the future preservation of that
good understanding which it has ever been our desire to cultivate.

Of pending questions the most important is that which exists with the
Government of Great Britain in respect to our northeastern boundary. It
is with unfeigned regret that the people of the United States must look
back upon the abortive efforts made by the Executive, for a period of
more than half a century, to determine what no nation should suffer long
to remain in dispute--the true line which divides its possessions from
those of other powers. The nature of the settlements on the borders of
the United States and of the neighboring territory was for a season such
that this, perhaps, was not indispensable to a faithful performance of
the duties of the Federal Government. Time has, however, changed this
state of things, and has brought about a condition of affairs in which
the true interests of both countries imperatively require that this
question should be put at rest. It is not to be disguised that, with
full confidence, often expressed, in the desire of the British
Government to terminate it, we are apparently as far from its adjustment
as we were at the time of signing the treaty of peace in 1783. The sole
result of long-pending negotiations and a perplexing arbitration appears
to be a conviction on its part that a conventional line must be adopted,
from the impossibility of ascertaining the true one according to the
description contained in that treaty. Without coinciding in this
opinion, which is not thought to be well rounded, my predecessor gave
the strongest proof of the earnest desire of the United States to
terminate satisfactorily this dispute by proposing the substitution of a
conventional line if the consent of the States interested in the
question could be obtained. To this proposition no answer has as yet
been received. The attention of the British Government has, however,
been urgently invited to the subject, and its reply can not, I am
confident, be much longer delayed. The general relations between Great
Britain and the United States are of the most friendly character, and I
am well satisfied of the sincere disposition of that Government to
maintain them upon their present footing. This disposition has also, I
am persuaded, become more general with the people of England than at any
previous period. It is scarcely necessary to say to you how cordially it
is reciprocated by the Government and people of the United States. The
conviction, which must be common to all, of the injurious consequences
that result from keeping open this irritating question, and the
certainty that its final settlement can not be much longer deferred,
will, I trust, lead to an early and satisfactory adjustment. At your
last session I laid before you the recent communications between the two
Governments and between this Government and that of the State of Maine,
in whose solicitude concerning a subject in which she has so deep an
interest every portion of the Union participates.

The feelings produced by a temporary interruption of those harmonious
relations between France and the United States which are due as well to
the recollections of former times as to a correct appreciation of
existing interests have been happily succeeded by a cordial disposition
on both sides to cultivate an active friendship in their future
intercourse. The opinion, undoubtedly correct, and steadily entertained
by us, that the commercial relations at present existing between the two
countries are susceptible of great and reciprocally beneficial
improvements is obviously gaining ground in France, and I am assured of
the disposition of that Government to favor the accomplishment of such
an object. This disposition shall be met in a proper spirit on our part.
The few and comparatively unimportant questions that remain to be
adjusted between us can, I have no doubt, be settled with entire
satisfaction and without difficulty.

Between Russia and the United States sentiments of good will continue to
be mutually cherished. Our minister recently accredited to that Court
has been received with a frankness and cordiality and with evidences of
respect for his country which leave us no room to doubt the preservation
in future of those amicable and liberal relations which have so long and
so uninterruptedly existed between the two countries. On the few
subjects under discussion between us an early and just decision is
confidently anticipated.

A correspondence has been opened with the Government of Austria for the
establishment of diplomatic relations, in conformity with the wishes of
Congress as indicated by an appropriation act of the session of 1837,
and arrangements made for the purpose, which will be duly carried into
effect.

With Austria and Prussia and with the States of the German Empire (now
composing with the latter the Commercial League) our political relations
are of the most friendly character, whilst our commercial intercourse is
gradually extending, with benefit to all who are engaged in it.

Civil war yet rages in Spain, producing intense suffering to its own
people, and to other nations inconvenience and regret. Our citizens who
have claims upon that country will be prejudiced for a time by the
condition of its treasury, the inevitable consequence of long-continued
and exhausting internal wars. The last installment of the interest of
the debt due under the convention with the Queen of Spain has not been
paid and similar failures may be expected to happen until a portion of
the resources of her Kingdom can be devoted to the extinguishment of its
foreign debt.

Having received satisfactory evidence that discriminating tonnage duties
were charged upon the vessels of the United States in the ports of
Portugal, a proclamation was issued on the 11th day of October last, in
compliance with the act of May 25, 1832, declaring that fact, and the
duties on foreign tonnage which were levied upon Portuguese vessels in
the United States previously to the passage of that act are accordingly
revived.

The act of July 4, 1836, suspending the discriminating duties upon the
produce of Portugal imported into this country in Portuguese vessels,
was passed, upon the application of that Government through its
representative here, under the belief that no similar discrimination
existed in Portugal to the prejudice of the United States. I regret to
state that such duties are now exacted in that country upon the cargoes
of American vessels, and as the act referred to vests no discretion in
the Executive, it is for Congress to determine upon the expediency of
further legislation on the subject. Against these discriminations
affecting the vessels of this country and their cargoes seasonable
remonstrance was made, and notice was given to the Portuguese Government
that unless they should be discontinued the adoption of countervailing
measures on the part of the United States would become necessary; but
the reply of that Government, received at the Department of State
through our charge d'affaires at Lisbon in the month of September last,
afforded no ground to hope for the abandonment of a system so little in
harmony with the treatment shown to the vessels of Portugal and their
cargoes in the ports of this country and so contrary to the expectations
we had a right to entertain.

With Holland, Sweden, Denmark, Naples, and Belgium a friendly
intercourse has been uninterruptedly maintained.

With the Government of the Ottoman Porte and its dependencies on the
coast of the Mediterranean peace and good will are carefully cultivated,
and have been fostered by such good offices as the relative distance and
the condition of those countries would permit.

Our commerce with Greece is carried on under the laws of the two
Governments, reciprocally beneficial to the navigating interests of
both; and I have reason to look forward to the adoption of other
measures which will be more extensively and permanently advantageous.

Copies of the treaties concluded with the Governments of Siam and Muscat
are transmitted for the information of Congress, the ratifications
having been received and the treaties made public since the close of the
last annual session. Already have we reason to congratulate ourselves on
the prospect of considerable commercial benefit; and we have, besides,
received from the Sultan of Muscat prompt evidence of his desire to
cultivate the most friendly feelings, by liberal acts toward one of our
vessels, bestowed in a manner so striking as to require on our part a
grateful acknowledgment.

Our commerce with the islands of Cuba and Porto Rico still labors under
heavy restrictions, the continuance of which is a subject of regret. The
only effect of an adherence to them will be to benefit the navigation of
other countries at the expense of both the United States and Spain.

The independent nations of this continent have ever since they emerged
from the colonial state experienced severe trials in their progress to
the permanent establishment of liberal political institutions. Their
unsettled condition not only interrupts their own advances to
prosperity, but has often seriously injured the other powers of the
world. The claims of our citizens upon Peru, Chili, Brazil, the
Argentine Republic, the Governments formed out of the Republics of
Colombia and Mexico, are still pending, although many of them have been
presented for examination more than twenty years. New Granada,
Venezuela, and Ecuador have recently formed a convention for the purpose
of ascertaining and adjusting claims upon the Republic of Colombia, from
which it is earnestly hoped our citizens will ere long receive full
compensation for the injuries inflicted upon them and for the delay in
affording it.

An advantageous treaty of commerce has been concluded by the United
States with the Peru-Bolivian Confederation, which wants only the
ratification of that Government. The progress of a subsequent
negotiation for the settlement of claims upon Peru has been unfavorably
affected by the war between that power and Chili and the Argentine
Republic, and the same event is also likely to produce delays in the
settlement of out demands on those powers.

The aggravating circumstances connected with our claims upon Mexico and
a variety of events touching the honor and integrity of our Government
led my predecessor to make at the second session of the last Congress a
special recommendation of the course to be pursued to obtain a speedy
and final satisfaction of the injuries complained of by this Government
and by our citizens. He recommended a final demand of redress, with a
contingent authority to the Executive to make reprisals if that demand
should be made in vain. From the proceedings of Congress on that
recommendation it appeared that the opinion of both branches of the
Legislature coincided with that of the Executive, that any mode of
redress known to the law of nations might justifiably be used. It was
obvious, too, that Congress believed with the President that another
demand should be made, in order to give undeniable and satisfactory
proof of our desire to avoid extremities with a neighboring power, but
that there was an indisposition to vest a discretionary authority in the
Executive to take redress should it unfortunately be either denied or
unreasonably delayed by the Mexican Government.

So soon as the necessary documents were prepared, after entering upon
the duties of my office, a special messenger was sent to Mexico to make
a final demand of redress, with the documents required by the provisions
of our treaty. The demand was made on the 20th of July last. The reply,
which bears date the 29th of the same month, contains assurances of a
desire on the part of that Government to give a prompt and explicit
answer respecting each of the complaints, but that the examination of
them would necessarily be deliberate; that in this examination it would
be guided by the principles of public law and the obligation of
treaties; that nothing should be left undone that might lead to the most
speedy and equitable adjustment of our demands, and that its
determination in respect to each case should be communicated through the
Mexican minister here.

Since that time an envoy extraordinary and minister plenipotentiary has
been accredited to this Government by that of the Mexican Republic. He
brought with him assurances of a sincere desire that the pending
differences between the two Governments should be terminated in a manner
satisfactory to both. He was received with reciprocal assurances, and a
hope was entertained that his mission would lead to a speedy,
satisfactory, and final adjustment of all existing subjects of
complaint. A sincere believer in the wisdom of the pacific policy by
which the United States have always been governed in their intercourse
with foreign nations, it was my particular desire, from the proximity of
the Mexican Republic and well-known occurrences on our frontier, to be
instrumental in obviating all existing difficulties with that Government
and in restoring to the intercourse between the two Republics that
liberal and friendly character by which they should always be
distinguished. I regret, therefore, the more deeply to have found in the
recent communications of that Government so little reason to hope that
any future efforts of mine for the accomplishment of those desirable
objects would be successful.

Although the larger number--and many of them aggravated cases of
personal wrongs--have been now for years before the Mexican Government,
and some of the causes of national complaint, and those of the most
offensive character, admitted of immediate, simple, and satisfactory
replies, it is only within a few days past that any specific
communication in answer to our last demand, made five months ago, has
been received from the Mexican minister. By the report of the Secretary
of State herewith presented and the accompanying documents it will be
seen that for not one of our public complaints has satisfaction been
given or offered, that but one of the cases of personal wrong has been
favorably considered, and that but four cases of both descriptions out
of all those formally presented and earnestly pressed have as yet been
decided upon by the Mexican Government.

Not perceiving in what manner any of the powers given to the Executive
alone could be further usefully employed in bringing this unfortunate
controversy to a satisfactory termination, the subject was by my
predecessor referred to Congress as one calling for its interposition.
In accordance with the clearly understood wishes of the Legislature,
another and formal demand for satisfaction has been made upon the
Mexican Government, with what success the documents now communicated
will show. On a careful and deliberate examination of their contents,
and considering the spirit manifested by the Mexican Government, it has
become my painful duty to return the subject as it now stands to
Congress, to whom it belongs to decide upon the time, the mode, and the
measure of redress. Whatever may be your decision, it shall be
faithfully executed, confident that it will be characterized by that
moderation and justice which will, I trust, under all circumstances
govern the councils of our country.

The balance in the Treasury on the 1st January, 1837, was $45,968,523.
The receipts during the present year from all sources, including the
amount of Treasury notes issued, are estimated at $23,499,981,
constituting an aggregate of $69,468,504. Of this amount about
$35,281,361 will have been expended at the end of the year on
appropriations made by Congress, and the residue, amounting to
$34,187,143, will be the nominal balance in the Treasury on the 1st of
January next; but of that sum only $1,085,498 is considered as
immediately available for and applicable to public purposes. Those
portions of it which will be for some time unavailable consist chiefly
of sums deposited with the States and due from the former deposit banks.
The details upon this subject will be found in the annual report of the
Secretary of the Treasury. The amount of Treasury notes which it will be
necessary to issue during the year on account of those funds being
unavailable will, it is supposed, not exceed four and a half millions.
It seemed proper, in the condition of the country, to have the estimates
on all subjects made as low as practicable without prejudice to any
great public measures. The Departments were therefore desired to prepare
their estimates accordingly, and I am happy to find that they have been
able to graduate them on so economical a scale. In the great and often
unexpected fluctuations to which the revenue is subjected it is not
possible to compute the receipts beforehand with great certainty, but
should they not differ essentially from present anticipations, and
should the appropriations not much exceed the estimates, no difficulty
seems likely to happen in defraying the current expenses with
promptitude and fidelity.

Notwithstanding the great embarrassments which have recently occurred in
commercial affairs, and the liberal indulgence which in consequence of
these embarrassments has been extended to both the merchants and the
banks, it is gratifying to be able to anticipate that the Treasury notes
which have been issued during the present year will be redeemed and that
the resources of the Treasury, without any resort to loans or increased
taxes, will prove ample for defraying all charges imposed on it during
1838.

The report of the Secretary of the Treasury will afford you a more
minute exposition of all matters connected with the administration of
the finances during the current year--a period which for the amount of
public moneys disbursed and deposited with the States, as well as the
financial difficulties encountered and overcome, has few parallels in
our history.

Your attention was at the last session invited to the necessity of
additional legislative provisions in respect to the collection,
safe-keeping, and transfer of the public money. No law having been then
matured, and not understanding the proceedings of Congress as intended
to be final, it becomes my duty again to bring the subject to your
notice.

On that occasion three modes of performing this branch of the public
service were presented for consideration. These were, the creation of a
national bank; the revival, with modifications, of the deposit system
established by the act of the 23d of June, 1836, permitting the use of
the public moneys by the banks; and the discontinuance of the use of
such institutions for the purposes referred to, with suitable provisions
for their accomplishment through the agency of public officers.
Considering the opinions of both Houses of Congress on the first two
propositions as expressed in the negative, in which I entirely concur,
it is unnecessary for me again in to recur to them. In respect to the
last, you have had an opportunity since your adjournment not only to
test still further the expediency of the measure by the continued
practical operation of such parts of it as are now in force, but also to
discover what should ever be sought for and regarded with the utmost
deference--the opinions and wishes of the people.

The national will is the supreme law of the Republic, and on all
subjects within the limits of his constitutional powers should be
faithfully obeyed by the public servant. Since the measure in question
was submitted to your consideration most of you have enjoyed the
advantage of personal communication with your constituents. For one
State only has an election been held for the Federal Government; but the
early day at which it took place deprived the measure under
consideration of much of the support it might otherwise have derived
from the result. Local elections for State officers have, however, been
held in several of the States, at which the expediency of the plan
proposed by the Executive has been more or less discussed. You will, I
am confident, yield to their results the respect due to every expression
of the public voice. Desiring, however, to arrive at truth and a just
view of the subject in all its bearings, you will at the same time
remember that questions of far deeper and more immediate local interest
than the fiscal plans of the National Treasury were involved in those
elections. Above all, we can not overlook the striking fact that there
were at the time in those States more than one hundred and sixty
millions of bank capital, of which large portions were subject to actual
forfeiture, other large portions upheld only by special and limited
legislative indulgences, and most of it, if not all, to a greater or
less extent dependent for a continuance of its corporate existence upon
the will of the State legislatures to be then chosen. Apprised of this
circumstance, you will judge whether it is not most probable that the
peculiar condition of that vast interest in these respects, the extent
to which it has been spread through all the ramifications of society,
its direct connection with the then pending elections, and the feelings
it was calculated to infuse into the canvass have exercised a far
greater influence over the result than any which could possibly have
been produced by a conflict of opinion in respect to a question in the
administration of the General Government more remote and far less
important in its bearings upon that interest.

I have found no reason to change my own opinion as to the expediency of
adopting the system proposed, being perfectly satisfied that there will
be neither stability nor safety either in the fiscal affairs of the
Government or in the pecuniary transactions of individuals and
corporations so long as a connection exists between them which, like the
past, offers such strong inducements to make them the subjects of
political agitation. Indeed, I am more than ever convinced of the
dangers to which the free and unbiased exercise of political
opinion--the only sure foundation and safeguard of republican
government--would be exposed by any further increase of the already
overgrown influence of corporate authorities. I can not, therefore,
consistently with my views of duty, advise a renewal of a connection
which circumstances have dissolved.

The discontinuance of the use of State banks for fiscal purposes ought
not to be regarded as a measure of hostility toward those institutions.
Banks properly established and conducted are highly useful to the
business of the country, and will doubtless continue to exist in the
States so long as they conform to their laws and are found to be safe
and beneficial. How they should be created, what privileges they should
enjoy, under what responsibilities they should act, and to what
restrictions they should be subject are questions which, as I observed
on a previous occasion, belong to the States to decide. Upon their
rights or the exercise of them the General Government can have no motive
to encroach. Its duty toward them is well performed when it refrains
from legislating for their special benefit, because such legislation
would violate the spirit of the Constitution and be unjust to other
interests; when it takes no steps to impair their usefulness, but so
manages its own affairs as to make it the interest of those institutions
to strengthen and improve their condition for the security and welfare
of the community at large. They have no right to insist on a connection
with the Federal Government, nor on the use of the public money for
their own benefit. The object of the measure under consideration is to
avoid for the future a compulsory connection of this kind. It proposes
to place the General Government, in regard to the essential points of
the collection, safe-keeping, and transfer of the public money, in a
situation which shall relieve it from all dependence on the will of
irresponsible individuals or corporations; to withdraw those moneys from
the uses of private trade and confide them to agents constitutionally
selected and controlled by law; to abstain from improper interference
with the industry of the people and withhold inducements to improvident
dealings on the part of individuals; to give stability to the concerns
of the Treasury; to preserve the measures of the Government from the
unavoidable reproaches that flow from such a connection, and the banks
themselves from the injurious effects of a supposed participation in the
political conflicts of the day, from which they will otherwise find it
difficult to escape.

These are my views upon this important subject, formed after careful
reflection and with no desire but to arrive at what is most likely to
promote the public interest. They are now, as they were before,
submitted with unfeigned deference for the opinions of others. It was
hardly to be hoped that changes so important on a subject so interesting
could be made without producing a serious diversity of opinion; but so
long as those conflicting views are kept above the influence of
individual or local interests, so long as they pursue only the general
good and are discussed with moderation and candor, such diversity is a
benefit, not an injury. If a majority of Congress see the public welfare
in a different light, and more especially if they should be satisfied
that the measure proposed would not be acceptable to the people, I shall
look to their wisdom to substitute such as may be more conducive to the
one and more satisfactory to the other. In any event, they may
confidently rely on my hearty cooperation to the fullest extent to which
my views of the Constitution and my sense of duty will permit.

It is obviously important to this branch of the public service and to
the business and quiet of the country that the whole subject should in
some way be settled and regulated by law, and, if possible, at your
present session. Besides the plans above referred to, I am not aware
that any one has been suggested except that of keeping the public money
in the State banks in special deposit. This plan is to some extent in
accordance with the practice of the Government and with the present
arrangements of the Treasury Department, which, except, perhaps, during
the operation of the late deposit act, has always been allowed, even
during the existence of a national bank, to make a temporary use of the
State banks in particular places for the safe-keeping of portions of the
revenue. This discretionary power might be continued if Congress deem it
desirable, whatever general system be adopted. So long as the connection
is voluntary we need, perhaps, anticipate few of those difficulties and
little of that dependence on the banks which must attend every such
connection when compulsory in its nature and when so arranged as to make
the banks a fixed part of the machinery of government. It is undoubtedly
in the power of Congress so to regulate and guard it as to prevent the
public money from being applied to the use or intermingled with the
affairs of individuals. Thus arranged, although it would not give to the
Government that entire control over its own funds which I desire to
secure to it by the plan I have proposed, it would, it must be admitted,
in a great degree accomplish one of the objects which has recommended
that plan to my judgment--the separation of the fiscal concerns of the
Government from those of individuals or corporations.

With these observations I recommend the whole matter to your
dispassionate reflection, confidently hoping that some conclusion may be
reached by your deliberations which on the one hand shall give safety
and stability to the fiscal operations of the Government, and be
consistent, on the other, with the genius of our institutions and with
the interests and wishes of the great mass of our constituents.

It was my hope that nothing would occur to make necessary on this
occasion any allusion to the late national bank. There are
circumstances, however, connected with the present state of its affairs
that bear so directly on the character of the Government and the welfare
of the citizen that I should not feel myself excused in neglecting to
notice them. The charter which terminated its banking privileges on the
4th of March, 1836, continued its corporate power two years more for the
sole purpose of closing its affairs, with authority "to use the
corporate name, style, and capacity for the purpose of suits for a final
settlement and liquidation of the affairs and acts of the corporation,
and for the sale and disposition of their estate--real, personal, and
mixed--but for no other purpose or in any other manner whatsoever." Just
before the banking privileges ceased, its effects were transferred by
the bank to a new State institution, then recently incorporated, in
trust, for the discharge of its debts and the settlement of its affairs.
With this trustee, by authority of Congress, an adjustment was
subsequently made of the large interest which the Government had in the
stock of the institution. The manner in which a trust unexpectedly
created upon the act granting the charter, and involving such great
public interests, has been executed would under any circumstances be a
fit subject of inquiry; but much more does it deserve your attention
when it embraces the redemption of obligations to which the authority
and credit of the United States have given value. The two years allowed
are now nearly at an end. It is well understood that the trustee has not
redeemed and canceled the outstanding notes of the bank, but has
reissued and is actually reissuing, since the 3d of March, 1836, the
notes which have been received by it to a vast amount. According to its
own official statement, so late as the 1st of October last, nineteen
months after the banking privileges given by the charter had expired, it
had under its control uncanceled notes of the late Bank of the United
States to the amount of $27,561,866, of which $6,175,861 were in actual
circulation, $ 1,468,627 at State bank agencies, and $3,002,390 in
transitu, thus showing that upward of ten millions and a half of the
notes of the old bank were then still kept outstanding.

The impropriety of this procedure is obvious, it being the duty of the
trustee to cancel and not to put forth the notes of an institution whose
concerns it had undertaken to wind up. If the trustee has a right to
reissue these notes now, I can see no reason why it may not continue to
do so after the expiration of the two years. As no one could have
anticipated a course so extraordinary, the prohibitory clause of the
charter above quoted was not accompanied by any penalty or other special
provision for enforcing it, nor have we any general law for the
prevention of similar acts in future.

But it is not in this view of the subject alone that your interposition
is required. The United States in settling with the trustee for their
stock have withdrawn their funds from their former direct liability to
the creditors of the old bank, yet notes of the institution continue to
be sent forth in its name, and apparently upon the authority of the
United States. The transactions connected with the employment of the
bills of the old bank are of vast extent, and should they result
unfortunately the interests of individuals may be deeply compromised.
Without undertaking to decide how far or in what form, if any, the
trustee could be made liable for notes which contain no obligation on
its part, or the old bank for such as are put in circulation after the
expiration of its charter and without its authority, or the Government
for indemnity in case of loss, the question still presses itself upon
your consideration whether it is consistent with duty and good faith on
the part of the Government to witness this proceeding without a single
effort to arrest it.

The report of the Commissioner of the General Land Office, which will be
laid before you by the Secretary of the Treasury, will show how the
affairs of that office have been conducted for the past year. The
disposition of the public lands is one of the most important trusts
confided to Congress. The practicability of retaining the title and
control of such extensive domains in the General Government, and at the
same time admitting the Territories embracing them into the Federal
Union as coequals with the original States, was seriously doubted by
many of our wisest statesmen. All feared that they would become a source
of discord, and many carried their apprehensions so far as to see in
them the seeds of a future dissolution of the Confederacy. But happily
our experience has already been sufficient to quiet in a great degree
all such apprehensions. The position at one time assumed, that the
admission of new States into the Union on the same footing with the
original States was incompatible with a right of soil in the United
States and operated as a surrender thereof, notwithstanding the terms of
the compacts by which their admission was designed to be regulated, has
been wisely abandoned. Whether in the new or the old States, all now
agree that the right of soil to the public lands remains in the Federal
Government, and that these lands constitute a common property, to be
disposed of for the common benefit of all the States, old and new.
Acquiescence in this just principle by the people of the new States has
naturally promoted a disposition to adopt the most liberal policy in the
sale of the public lands. A policy which should be limited to the mere
object of selling the lands for the greatest possible sum of money,
without regard to higher considerations, finds but few advocates. On the
contrary, it is generally conceded that whilst the mode of disposition
adopted by the Government should always be a prudent one, yet its
leading object ought to be the early settlement and cultivation of the
lands sold, and that it should discountenance, if it can not prevent,
the accumulation of large tracts in the same hands, which must
necessarily retard the growth of the new States or entail upon them a
dependent tenantry and its attendant evils.

A question embracing such important interests and so well calculated to
enlist the feelings of the people in every quarter of the Union has very
naturally given rise to numerous plans for the improvement of the
existing system. The distinctive features of the policy that has
hitherto prevailed are to dispose of the public lands at moderate
prices, thus enabling a greater number to enter into competition for
their purchase and accomplishing a double object--of promoting their
rapid settlement by the purchasers and at the same time increasing the
receipts of the Treasury; to sell for cash, thereby preventing the
disturbing influence of a large mass of private citizens indebted to the
Government which they have a voice in controlling; to bring them into
market no faster than good lands are supposed to be wanted for
improvement, thereby preventing the accumulation of large tracts in few
hands; and to apply the proceeds of the sales to the general purposes of
the Government, thus diminishing the amount to be raised from the people
of the States by taxation and giving each State its portion of the
benefits to be derived from this common fund in a manner the most quiet,
and at the same time, perhaps, the most equitable, that can be devised.
These provisions, with occasional enactments in behalf of special
interests deemed entitled to the favor of the Government, have in their
execution produced results as beneficial upon the whole as could
reasonably be expected in a matter so vast, so complicated, and so
exciting. Upward of 70,000,000, acres have been sold, the greater part
of which is believed to have been purchased for actual settlement. The
population of the new States and Territories created out of the public
domain increased between 1800 and 1830 from less than 60,000 to upward
of 2,300,000 souls, constituting at the latter period about one-fifth of
the whole people of the United States. The increase since can not be
accurately known, but the whole may now be safely estimated at over
three and a half millions of souls, composing nine States, the
representatives of which constitute above one-third of the Senate and
over one-sixth of the House of Representatives of the United States.

Thus has been formed a body of free and independent landholders with a
rapidity unequaled in the history of mankind; and this great result has
been produced without leaving anything for future adjustment between the
Government and its citizens. The system under which so much has been
accomplished can not be intrinsically bad, and with occasional
modifications to correct abuses and adapt it to changes of circumstances
may, I think, be safely trusted for the future. There is in the
management of such extensive interests much virtue in stability; and
although great and obvious improvements should not be declined, changes
should never be made without the fullest examination and the clearest
demonstration of their practical utility. In the history of the past we
have an assurance that this safe rule of action will not be departed
from in relation to the public lands; nor is it believed that any
necessity exists for interfering with the fundamental principles of the
system, or that the public mind, even in the new States, is desirous of
any radical alterations. On the contrary, the general disposition
appears to be to make such modifications and additions only as will the
more effectually carry out the original policy of filling our new States
and Territories with an industrious and independent population.

The modification most perseveringly pressed upon Congress, which has
occupied so much of its time for years past, and will probably do so for
a long time to come, if not sooner satisfactorily adjusted, is a
reduction in the cost of such portions of the public lands as are
ascertained to be unsalable at the rate now established by law, and a
graduation according to their relative value of the prices at which they
may hereafter be sold. It is worthy of consideration whether justice may
not be done to every interest in this matter, and a vexed question set
at rest, perhaps forever, by a reasonable compromise of conflicting
opinions. Hitherto, after being offered at public sale, lands have been
disposed of at one uniform price, whatever difference there might be in
their intrinsic value. The leading considerations urged in favor of the
measure referred to are that in almost all the land districts, and
particularly in those in which the lands have been long surveyed and
exposed to sale, there are still remaining numerous and large tracts of
every gradation of value, from the Government price downward; that these
lands will not be purchased at the Government price so long as better
can be conveniently obtained for the same amount; that there are large
tracts which even the improvements of the adjacent lands will never
raise to that price, and that the present uniform price, combined with
their irregular value, operates to prevent a desirable compactness of
settlements in the new States and to retard the full development of that
wise policy on which our land system is founded, to the injury not only
of the several States where the lands lie, but of the United States as a
whole.

The remedy proposed has been a reduction of the prices according to the
length of time the lands have been in market, without reference to any
other circumstances. The certainty that the efflux of time would not
always in such cases, and perhaps not even generally, furnish a true
criterion of value, and the probability that persons residing in the
vicinity, as the period for the reduction of prices approached, would
postpone purchases they would otherwise make, for the purpose of
availing themselves of the lower price, with other considerations of a
similar character, have hitherto been successfully urged to defeat the
graduation upon time.

May not all reasonable desires upon this subject be satisfied without
encountering any of these objections? All will concede the abstract
principle that the price of the public lands should be proportioned to
their relative value, so far as can be accomplished without departing
from the rule heretofore observed requiring fixed prices in cases of
private entries. The difficulty of the subject seems to lie in the mode
of ascertaining what that value is. Would not the safest plan be that
which has been adopted by many of the States as the basis of
taxation--an actual valuation of lands and classification of them into
different rates? Would it not be practicable and expedient to cause the
relative value of the public lands in the old districts which have been
for a certain length of time in market to be appraised and classed into
two or more rates below the present minimum price by the officers now
employed in this branch of the public service or in any other mode
deemed preferable, and to make those prices permanent if upon the coming
in of the report they shall prove satisfactory to Congress? Could not
all the objects of graduation be accomplished in this way, and the
objections which have hitherto been urged against it avoided? It would
seem to me that such a step, with a restriction of the sales to limited
quantities and for actual improvement, would be free from all just
exception.

By the full exposition of the value of the lands thus furnished and
extensively promulgated persons living at a distance would be informed
of their true condition and enabled to enter into competition with those
residing in the vicinity; the means of acquiring an independent home
would be brought within the reach of many who are unable to purchase at
present prices; the population of the new States would be made more
compact, and large tracts would be sold which would otherwise remain on
hand. Not only would the land be brought within the means of a larger
number of purchasers, but many persons possessed of greater means would
be content to settle on a larger quantity of the poorer lands rather
than emigrate farther west in pursuit of a smaller quantity of better
lands. Such a measure would also seem to be more consistent with the
policy of the existing laws--that of converting the public domain into
cultivated farms owned by their occupants. That policy is not best
promoted by sending emigration up the almost interminable streams of the
West to occupy in groups the best spots of land, leaving immense wastes
behind them and enlarging the frontier beyond the means of the
Government to afford it adequate protection, but in encouraging it to
occupy with reasonable denseness the territory over which it advances,
and find its best defense in the compact front which it presents to the
Indian tribes. Many of you will bring to the consideration of the
subject the advantages of local knowledge and greater experience, and
all will be desirous of making an early and final disposition of every
disturbing question in regard to this important interest. If these
suggestions shall in any degree contribute to the accomplishment of so
important a result, it will afford me sincere satisfaction.

In some sections of the country most of the public lands have been sold,
and the registers and receivers have very little to do. It is a subject
worthy of inquiry whether in many cases two or more districts may not be
consolidated and the number of persons employed in this business
considerably reduced. Indeed, the time will come when it will be the
true policy of the General Government, as to some of the States, to
transfer to them for a reasonable equivalent all the refuse and unsold
lands and to withdraw the machinery of the Federal land offices
altogether. All who take a comprehensive view of our federal system and
believe that one of its greatest excellencies consists in interfering as
little as possible with the internal concerns of the States look forward
with great interest to this result.

A modification of the existing laws in respect to the prices of the
public lands might also have a favorable influence on the legislation of
Congress in relation to another branch of the subject. Many who have not
the ability to buy at present prices settle on those lands with the hope
of acquiring from their cultivation the means of purchasing under
preemption laws from time to time passed by Congress. For this
encroachment on the rights of the United States they excuse themselves
under the plea of their own necessities; the fact that they dispossess
nobody and only enter upon the waste domain: that they give additional
value to the public lands in their vicinity, and their intention
ultimately to pay the Government price. So much weight has from time to
time been attached to these considerations that Congress have passed
laws giving actual settlers on the public lands a right of preemption to
the tracts occupied by them at the minimum price. These laws have in all
instances been retrospective in their operation, but in a few years
after their passage crowds of new settlers have been found on the public
lands for similar reasons and under like expectations, who have been
indulged with the same privilege. This course of legislation tends to
impair public respect for the laws of the country. Either the laws to
prevent intrusion upon the public lands should be executed, or, if that
should be impracticable or inexpedient, they should be modified or
repealed. If the public lands are to be considered as open to be
occupied by any, they should by law be thrown open to all. That which is
intended in all instances to be legalized should at once be made legal,
that those who are disposed to conform to the laws may enjoy at least
equal privileges with those who are not. But it is not believed to be
the disposition of Congress to open the public lands to occupancy
without regular entry and payment of the Government price, as such a
course must tend to worse evils than the credit system, which it was
found necessary to abolish.

It would seem, therefore, to be the part of wisdom and sound policy to
remove as far as practicable the causes which produce intrusions upon
the public lands, and then take efficient steps to prevent them in
future. Would any single measure be so effective in removing all
plausible grounds for these intrusions as the graduation of price
already suggested? A short period of industry and economy in any part of
our country would enable the poorest citizen to accumulate the means to
buy him a home at the lower prices, and leave him without apology for
settling on lands not his own. If he did not under such circumstances,
he would enlist no sympathy in his favor, and the laws would be readily
executed without doing violence to public opinion.

A large portion of our citizens have seated themselves on the public
lands without authority since the passage of the last preemption law,
and now ask the enactment of another to enable them to retain the lands
occupied upon payment of the minimum Government price. They ask that
which has been repeatedly granted before. If the future may be judged of
by the past, little harm can be done to the interests of the Treasury by
yielding to their request. Upon a critical examination it is found that
the lands sold at the public sales since the introduction of cash
payments, in 1820, have produced on an average the net revenue of only 6
cents an acre more than the minimum Government price. There is no reason
to suppose that future sales will be more productive. The Government,
therefore, has no adequate pecuniary interest to induce it to drive
these people from the lands they occupy for the purpose of selling them
to others.

Entertaining these views, I recommend the passage of a preemption law
for their benefit in connection with the preparatory steps toward the
graduation of the price of the public lands, and further and more
effectual provisions to prevent intrusions hereafter. Indulgence to
those who have settled on these lands with expectations that past
legislation would be made a rule for the future, and at the same time
removing the most plausible ground on which intrusions are excused and
adopting more efficient means to prevent them hereafter, appears to me
the most judicious disposition which can be made of this difficult
subject. The limitations and restrictions to guard against abuses in the
execution of a preemption law will necessarily attract the careful
attention of Congress, but under no circumstances is it considered
expedient to authorize floating claims in any shape. They have been
heretofore, and doubtless would be hereafter, most prolific sources of
fraud and oppression, and instead of operating to confer the favor of
the Government on industrious settlers are often used only to minister
to a spirit of cupidity at the expense of the most meritorious of that
class.

The accompanying report of the Secretary of War will bring to your view
the state of the Army and all the various subjects confided to the
superintendence of that officer.

The principal part of the Army has been concentrated in Florida, with a
view and in the expectation of bringing the war in that Territory to a
speedy close. The necessity of stripping the posts on the maritime and
inland frontiers of their entire garrisons for the purpose of assembling
in the field an army of less than 4,000 men would seem to indicate the
necessity of increasing our regular forces; and the superior efficiency,
as well as greatly diminished expense of that description of troops,
recommend this measure as one of economy as well as of expediency. I
refer to the report for the reasons which have induced the Secretary of
War to urge the reorganization and enlargement of the staff of the Army,
and of the Ordnance Corps, in which I fully concur.

It is not, however, compatible with the interests of the people to
maintain in time of peace a regular force adequate to the defense of our
extensive frontiers. In periods of danger and alarm we must rely
principally upon a well-organized militia, and some general arrangement
that will render this description of force more efficient has long been
a subject of anxious solicitude. It was recommended to the First
Congress by General Washington, and has been since frequently brought to
your notice, and recently its importance strongly urged by my immediate
predecessor. The provision in the Constitution that renders it necessary
to adopt a uniform system of organization for the militia throughout the
United States presents an insurmountable obstacle to an efficient
arrangement by the classification heretofore proposed, and I invite your
attention to the plan which will be submitted by the Secretary of War,
for the organization of volunteer corps and the instruction of militia
officers, as more simple and practicable, if not equally advantageous,
as a general arrangement of the whole militia of the United States.

A moderate increase of the corps both of military and topographical
engineers has been more than once recommended by my predecessor, and my
conviction of the propriety, not to say necessity, of the measure, in
order to enable them to perform the various and important duties imposed
upon them, induces me to repeat the recommendation.

The Military Academy continues to answer all the purposes of its
establishment, and not only furnishes well-educated officers to the
Army, but serves to diffuse throughout the mass of our citizens
individuals possessed of military knowledge and the scientific
attainments of civil and military engineering. At present the cadet is
bound, with consent of his parents or guardians, to remain in service
five years from the period of his enlistment, unless sooner discharged,
thus exacting only one year's service in the Army after his education is
completed. This does not appear to me sufficient. Government ought to
command for a longer period the services of those who are educated at
the public expense, and I recommend that the time of enlistment be
extended to seven years, and the terms of the engagement strictly
enforced.

The creation of a national foundry for cannon, to be common to the
service of the Army and Navy of the United States, has been heretofore
recommended, and appears to be required in order to place our ordnance
on an equal footing with that of other countries and to enable that
branch of the service to control the prices of those articles and
graduate the supplies to the wants of the Government, as well as to
regulate their quality and insure their uniformity. The same reasons
induce me to recommend the erection of a manufactory of gunpowder, to be
under the direction of the Ordnance Office. The establishment of a
manufactory of small arms west of the Alleghany Mountains, upon the plan
proposed by the Secretary of War, will contribute to extend throughout
that country the improvements which exist in establishments of a similar
description in the Atlantic States, and tend to a much more economical
distribution of the armament required in the western portion of our
Union.

The system of removing the Indians west of the Mississippi, commenced by
Mr. Jefferson in 1804, has been steadily persevered in by every
succeeding President, and may be considered the settled policy of the
country. Unconnected at first with any well-defined system for their
improvement, the inducements held out to the Indians were confined to
the greater abundance of game to be found in the West; but when the
beneficial effects of their removal were made apparent a more
philanthropic and enlightened policy was adopted in purchasing their
lands east of the Mississippi. Liberal prices were given and provisions
inserted in all the treaties with them for the application of the funds
they received in exchange to such purposes as were best calculated to
promote their present welfare and advance their future civilization.
These measures have been attended thus far with the happiest results.

It will be seen by referring to the report of the Commissioner of Indian
Affairs that the most sanguine expectations of the friends and promoters
of this system have been realized. The Choctaws, Cherokees, and other
tribes that first emigrated beyond the Mississippi have for the most
part abandoned the hunter state and become cultivators of the soil. The
improvement in their condition has been rapid, and it is believed that
they are now fitted to enjoy the advantages of a simple form of
government, which has been submitted to them and received their
sanction; and I can not too strongly urge this subject upon the
attention of Congress.

Stipulations have been made with all the Indian tribes to remove them
beyond the Mississippi, except with the bands of the Wyandots, the Six
Nations in New York, the Menomonees, Munsees, and Stockbridges in
Wisconsin, and Miamies in Indiana. With all but the Menomonees it is
expected that arrangements for their emigration will be completed the
present year. The resistance which has been opposed to their removal by
some of the tribes even after treaties had been made with them to that
effect has arisen from various causes, operating differently on each of
them. In most instances they have been instigated to resistance by
persons to whom the trade with them and the acquisition of their
annuities were important, and in some by the personal influence of
interested chiefs. These obstacles must be overcome, for the Government
can not relinquish the execution of this policy without sacrificing
important interests and abandoning the tribes remaining east of the
Mississippi to certain destruction.

The decrease in numbers of the tribes within the limits of the States
and Territories has been most rapid. If they be removed, they can be
protected from those associations and evil practices which exert so
pernicious and destructive an influence over their destinies. They can
be induced to labor and to acquire property, and its acquisition will
inspire them with a feeling of independence. Their minds can be
cultivated, and they can be taught the value of salutary and uniform
laws and be made sensible of the blessings of free government and
capable of enjoying its advantages. In the possession of property,
knowledge, and a good government, free to give what direction they
please to their labor, and sharers in the legislation by which their
persons and the profits of their industry are to be protected and
secured, they will have an ever-present conviction of the importance of
union and peace among themselves and of the preservation of amicable
relations with us. The interests of the United States would also be
greatly promoted by freeing the relations between the General and State
Governments from what has proved a most embarrassing incumbrance by a
satisfactory adjustment of conflicting titles to lands caused by the
occupation of the Indians, and by causing the resources of the whole
country to be developed by the power of the State and General
Governments and improved by the enterprise of a white population.

Intimately connected with this subject is the obligation of the
Government to fulfill its treaty stipulations and to protect the Indians
thus assembled "at their new residences from all interruptions and
disturbances from any other tribes or nations of Indians or from any
other person or persons whatsoever," and the equally solemn obligation
to guard from Indian hostility its own border settlements, stretching
along a line of more than 1,000 miles. To enable the Government to
redeem this pledge to the Indians and to afford adequate protection to
its own citizens will require the continual presence of a considerable
regular force on the frontiers and the establishment of a chain of
permanent posts. Examinations of the country are now making, with a view
to decide on the most suitable points for the erection of fortresses and
other works of defense, the results of which will be presented to you by
the Secretary of War at an early day, together with a plan for the
effectual protection of the friendly Indians and the permanent defense
of the frontier States.

By the report of the Secretary of the Navy herewith communicated it
appears that unremitted exertions have been made at the different
navy-yards to carry into effect all authorized measures for the
extension and employment of our naval force. The launching and
preparation of the ship of the line Pennsylvania and the complete
repairs of the ships of the line Ohio, Delaware, and Columbus may be
noticed as forming a respectable addition to this important arm of our
national defense. Our commerce and navigation have received increased
aid and protection during the present year. Our squadrons in the Pacific
and on the Brazilian station have been much increased, and that in the
Mediterranean, although small, is adequate to the present wants of our
commerce in that sea. Additions have been made to our squadron on the
West India station, where the large force under Commodore Dallas has
been most actively and efficiently employed in protecting our commerce,
in preventing the importation of slaves, and in cooperating with the
officers of the Army in carrying on the war in Florida.

The satisfactory condition of our naval force abroad leaves at our
disposal the means of conveniently providing for a home squadron for the
protection of commerce upon our extensive coast. The amount of
appropriations required for such a squadron will be found in the general
estimates for the naval service for the year 1838.

The naval officers engaged upon our coast survey have rendered important
service to our navigation. The discovery of a new channel into the
harbor of New York, through which our largest ships may pass without
danger, must afford important commercial advantages to that harbor and
add greatly to its value as a naval station. The accurate survey of
Georges Shoals, off the coast of Massachusetts, lately completed, will
render comparatively safe a navigation hitherto considered dangerous.

Considerable additions have been made to the number of captains,
commanders, lieutenants, surgeons, and assistant surgeons in the Navy.
These additions were rendered necessary by the increased number of
vessels put in commission to answer the exigencies of our growing
commerce.

Your attention is respectfully invited to the various suggestions of the
Secretary for the improvement of the naval service.

The report of the Postmaster-General exhibits the progress and condition
of the mail service. The operations of the Post-Office Department
constitute one of the most active elements of our national prosperity,
and it is gratifying to observe with what vigor they are conducted. The
mail routes of the United States cover an extent of about 142,877 miles,
having been increased about 37,103 miles within the last two years. The
annual mail transportation on these routes is about 36,228,962 miles,
having been increased about 10,359,476 miles within the same period. The
number of post-offices has also been increased from 10,770 to 12,099,
very few of which receive the mails less than once a week, and a large
portion of them daily. Contractors and postmasters in general are
represented as attending to their duties with most commendable zeal and
fidelity. The revenue of the Department within the year ending on the
30th of June last was $4,137,056.59, and its liabilities accruing within
the same time were $3,380,847.75. The increase of revenue over that of
the preceding year was $708,166.41.

For many interesting details I refer you to the report of the
Postmaster-General, with the accompanying papers, Your particular
attention is invited to the necessity of providing a more safe and
convenient building for the accommodation of that Department.

I lay before Congress copies of reports submitted in pursuance of a call
made by me upon the heads of Departments for such suggestions as their
experience might enable them to make as to what further legislative
provisions may be advantageously adopted to secure the faithful
application of public moneys to the objects for which they are
appropriated, to prevent their misapplication or embezzlement by those
intrusted with the expenditure of them, and generally to increase the
security of the Government against losses in their disbursement. It is
needless to dilate on the importance of providing such new safeguards as
are within the power of legislation to promote these ends, and I have
little to add to the recommendations submitted in the accompanying
papers.

By law the terms of service of our most important collecting and
disbursing officers in the civil departments are limited to four years,
and when reappointed their bonds are required to be renewed. The safety
of the public is much increased by this feature of the law, and there
can be no doubt that its application to all officers intrusted with the
collection or disbursement of the public money, whatever may be the
tenure of their offices, would be equally beneficial. I therefore
recommend, in addition to such of the suggestions presented by the heads
of Departments as you may think useful, a general provision that all
officers of the Army or Navy, or in the civil departments, intrusted
with the receipt or payment of public money, and whose term of service
is either unlimited or for a longer time than four years, be required to
give new bonds, with good and sufficient sureties, at the expiration of
every such period.

A change in the period of terminating the fiscal year, from the 1st of
October to the 1st of April, has been frequently recommended, and
appears to be desirable.

The distressing casualties in steamboats which have so frequently
happened during the year seem to evince the necessity of attempting to
prevent them by means of severe provisions connected with their
customhouse papers. This subject was submitted to the attention of
Congress by the Secretary of the Treasury in his last annual report, and
will be again noticed at the present session, with additional details.
It will doubtless receive that early and careful consideration which its
pressing importance appears to require.

Your attention has heretofore been frequently called to the affairs of
the District of Columbia, and I should not again ask it did not their
entire dependence on Congress give them a constant claim upon its
notice. Separated by the Constitution from the rest of the Union,
limited in extent, and aided by no legislature of its own, it would seem
to be a spot where a wise and uniform system of local government might
have been easily adopted. This District has, however, unfortunately been
left to linger behind the rest of the Union. Its codes, civil and
criminal, are not only very defective, but full of obsolete or
inconvenient provisions. Being formed of portions of two States,
discrepancies in the laws prevail in different parts of the territory,
small as it is; and although it was selected as the seat of the General
Government, the site of its public edifices, the depository of its
archives, and the residence of officers intrusted with large amounts of
public property and the management of public business, yet it has never
been subjected to or received that special and comprehensive legislation
which these circumstances peculiarly demand. I am well aware of the
various subjects of greater magnitude and immediate interest that press
themselves on the consideration of Congress, but I believe there is not
one that appeals more directly to its justice than a liberal and even
generous attention to the interests of the District of Columbia and a
thorough and careful revision of its local government. M. VAN BUREN

***

State of the Union Address
Martin van Buren
December 3, 1838

Fellow-Citizens of the Senate and House of Representatives:

I congratulate you on the favorable circumstances in the condition of
our country under which you reassemble for the performance of your
official duties. Though the anticipations of an abundant harvest have
not everywhere been realized, yet on the whole the labors of the
husbandman are rewarded with a bountiful return; industry prospers in
its various channels of business and enterprise; general health again
prevails through our vast diversity of climate; nothing threatens from
abroad the continuance of external peace; nor has anything at home
impaired the strength of those fraternal and domestic ties which
constitute the only guaranty to the success and permanency of our happy
Union, and which, formed in the hour of peril, have hitherto been
honorably sustained through every vicissitude in our national affairs.
These blessings, which evince the care and beneficence of Providence,
call for our devout and fervent gratitude.

We have not less reason to be grateful for other bounties bestowed by
the same munificent hand, and more exclusively our own.

The present year closes the first half century of our Federal
institutions, and our system, differing from all others in the
acknowledged practical and unlimited operation which it has for so long
a period given to the sovereignty of the people, has now been fully
tested by experience.

The Constitution devised by our forefathers as the framework and bond of
that system, then untried, has become a settled form of government; not
only preserving and protecting the great principles upon which it was
rounded, but wonderfully promoting individual happiness and private
interests. Though subject to change and entire revocation whenever
deemed inadequate to all these purposes, yet such is the wisdom of its
construction and so stable has been the public sentiment that it remains
unaltered except in matters of detail comparatively unimportant. It has
proved amply sufficient for the various emergencies incident to our
condition as a nation. A formidable foreign war; agitating collisions
between domestic, and in some respects rival, sovereignties; temptations
to interfere in the intestine commotions of neighboring countries; the
dangerous influences that arise in periods of excessive prosperity, and
the antirepublican tendencies of associated wealth--these, with other
trials not less formidable, have all been encountered, and thus far
successfully resisted.

It was reserved for the American Union to test the advantages of a
government entirely dependent on the continual exercise of the popular
will, and our experience has shown that it is as beneficent in practice
as it is just in theory. Each successive change made in our local
institutions has contributed to extend the right of suffrage, has
increased the direct influence of the mass of the community, given
greater freedom to individual exertion, and restricted more and more the
powers of Government; yet the intelligence, prudence, and patriotism of
the people have kept pace with this augmented responsibility. In no
country has education been so widely diffused. Domestic peace has
nowhere so largely reigned. The close bonds of social intercourse have
in no instance prevailed with such harmony over a space so vast. All
forms of religion have united for the first time to diffuse charity and
piety, because for the first time in the history of nations all have
been totally untrammeled and absolutely free. The deepest recesses of
the wilderness have been penetrated; yet instead of the rudeness in the
social condition consequent upon such adventures elsewhere, numerous
communities have sprung up, already unrivaled in prosperity, general
intelligence, internal tranquillity, and the wisdom of their political
institutions. Internal improvement, the fruit of individual enterprise,
fostered by the protection of the States, has added new links to the
Confederation and fresh rewards to provident industry. Doubtful
questions of domestic policy have been quietly settled by mutual
forbearance, and agriculture, commerce, and manufactures minister to
each other. Taxation and public debt, the burdens which bear so heavily
upon all other countries, have pressed with comparative lightness upon
us. Without one entangling alliance, our friendship is prized by every
nation, and the rights of our citizens are everywhere respected, because
they are known to be guarded by a united, sensitive, and watchful
people.

To this practical operation of our institutions, so evident and
successful, we owe that increased attachment to them which is among the
most cheering exhibitions of popular sentiment and will prove their best
security in time to come against foreign or domestic assault.

This review of the results of our institutions for half a century,
without exciting a spirit of vain exultation, should serve to impress
upon us the great principles from which they have sprung--constant and
direct supervision by the people over every public measure, strict
forbearance on the part of the Government from exercising any doubtful
or disputed powers, and a cautious abstinence from all interference with
concerns which properly belong and are best left to State regulations
and individual enterprise.

Full information of the state of our foreign affairs having been
recently on different occasions submitted to Congress, I deem it
necessary now to bring to your notice only such events as have
subsequently occurred or are of such importance as to require particular
attention.

The most amicable dispositions continue to be exhibited by all the
nations with whom the Government and citizens of the United States have
an habitual intercourse. At the date of my last annual message Mexico
was the only nation which could not be included in so gratifying a
reference to our foreign relations.

I am happy to be now able to inform you that an advance has been made
toward the adjustment of our differences with that Republic and the
restoration of the customary good feeling between the two nations. This
important change has been effected by conciliatory negotiations that
have resulted in the conclusion of a treaty between the two Governments,
which, when ratified, will refer to the arbitrament of a friendly power
all the subjects of controversy between us growing out of injuries to
individuals. There is at present also reason to believe that an
equitable settlement of all disputed points will be attained without
further difficulty or unnecessary delay, and thus authorize the free
resumption of diplomatic intercourse with our sister Republic.

With respect to the northeastern boundary of the United States, no
official correspondence between this Government and that of Great
Britain has passed since that communicated to Congress toward the close
of their last session. The offer to negotiate a convention for the
appointment of a joint commission of survey and exploration I am,
however, assured will be met by Her Majesty's Government in a
conciliatory and friendly spirit, and instructions to enable the British
minister here to conclude such an arrangement will be transmitted to him
without needless delay. It is hoped and expected that these instructions
will be of a liberal character, and that this negotiation, if
successful, will prove to be an important step toward the satisfactory
and final adjustment of the controversy.

I had hoped that the respect for the laws and regard for the peace and
honor of their own country which have ever characterized the citizens of
the United States would have prevented any portion of them from using
any means to promote insurrection in the territory of a power with which
we are at peace, and with which the United States are desirous of
maintaining the most friendly relations. I regret deeply, however, to be
obliged to inform you that this has not been the case. Information has
been given to me, derived from official and other sources, that many
citizens of the United States have associated together to make hostile
incursions from our territory into Canada and to aid and abet
insurrection there, in violation of the obligations and laws of the
United States and in open disregard of their own duties as citizens.
This information has been in part confirmed by a hostile invasion
actually made by citizens of the United States, in conjunction with
Canadians and others, and accompanied by a forcible seizure of the
property of our citizens and an application thereof to the prosecution
of military operations against the authorities and people of Canada.

The results of these criminal assaults upon the peace and order of a
neighboring country have been, as was to be expected, fatally
destructive to the misguided or deluded persons engaged in them and
highly injurious to those in whose behalf they are professed to have
been undertaken. The authorities in Canada, from intelligence received
of such intended movements among our citizens, have felt themselves
obliged to take precautionary measures against them; have actually
embodied the militia and assumed an attitude to repel the invasion to
which they believed the colonies were exposed from the United States. A
state of feeling on both sides of the frontier has thus been produced
which called for prompt and vigorous interference. If an insurrection
existed in Canada, the amicable dispositions of the United States toward
Great Britain, as well as their duty to themselves, would lead them to
maintain a strict neutrality and to restrain their citizens from all
violations of the laws which have been passed for its enforcement. But
this Government recognizes a still higher obligation to repress all
attempts on the part of its citizens to disturb the peace of a country
where order prevails or has been reestablished. Depredations by our
citizens upon nations at peace with the United States, or combinations
for committing them, have at all times been regarded by the American
Government and people with the greatest abhorrence. Military incursions
by our citizens into countries so situated, and the commission of acts
of violence on the members thereof, in order to effect a change in their
government, or under any pretext whatever, have from the commencement of
our Government been held equally criminal on the part of those engaged
in them, and as much deserving of punishment as would be the disturbance
of the public peace by the perpetration of similar acts within our own
territory.

By no country or persons have these invaluable principles of
international law--principles the strict observance of which is so
indispensable to the preservation of social order in the world--been
more earnestly cherished or sacredly respected than by those great and
good men who first declared and finally established the independence of
our own country. They promulgated and maintained them at an early and
critical period in our history; they were subsequently embodied in
legislative enactments of a highly penal character, the faithful
enforcement of which has hitherto been, and will, I trust, always
continue to be, regarded as a duty inseparably associated with the
maintenance of our national honor. That the people of the United States
should feel an interest in the spread of political institutions as free
as they regard their own to be is natural, nor can a sincere solicitude
for the success of all those who are at any time in good faith
struggling for their acquisition be imputed to our citizens as a crime.
With the entire freedom of opinion and an undisguised expression thereof
on their part the Government has neither the right nor, I trust, the
disposition to interfere. But whether the interest or the honor of the
United States requires that they should be made a party to any such
struggle, and by inevitable consequence to the war which is waged in its
support, is a question which by our Constitution is wisely left to
Congress alone to decide. It is by the laws already made criminal in our
citizens to embarrass or anticipate that decision by unauthorized
military operations on their part. Offenses of this character, in
addition to their criminality as violations of the laws of our country,
have a direct tendency to draw down upon our own citizens at large the
multiplied evils of a foreign war and expose to injurious imputations
the good faith and honor of the country. As such they deserve to be put
down with promptitude and decision. I can not be mistaken, I am
confident, in counting on the cordial and general concurrence of our
fellow-citizens in this sentiment. A copy of the proclamation which I
have felt it my duty to issue is herewith communicated. I can not but
hope that the good sense and patriotism, the regard for the honor and
reputation of their country, the respect for the laws which they have
themselves enacted for their own government, and the love of order for
which the mass of our people have been so long and so justly
distinguished will deter the comparatively few who are engaged in them
from a further prosecution of such desperate enterprises. In the
meantime the existing laws have been and will continue to be faithfully
executed, and every effort will be made to carry them out in their full
extent. Whether they are sufficient or not to meet the actual state of
things on the Canadian frontier it is for Congress to decide.

It will appear from the correspondence herewith submitted that the
Government of Russia declines a renewal of the fourth article of the
convention of April, 1824, between the United States and His Imperial
Majesty, by the third article of which it is agreed that "hereafter
there shall not be formed by the citizens of the United States or under
the authority of the said States any establishment upon the northwest
coast of America, nor in any of the islands adjacent, to the north of 54
 40' of north latitude, and that in the same manner there shall be none
formed by Russian subjects or under the authority of Russia south of the
same parallel;" and by the fourth article, "that during a term of ten
years, counting from the signature of the present convention, the ships
of both powers, or which belong to their citizens or subjects,
respectively, may reciprocally frequent, without any hindrance whatever,
the interior seas, gulfs, harbors, and creeks upon the coast mentioned
in the preceding article, for the purpose of fishing and trading with
the natives of the country." The reasons assigned for declining to renew
the provisions of this article are, briefly, that the only use made by
our citizens of the privileges it secures to them has been to supply the
Indians with spirituous liquors, ammunition, and firearms; that this
traffic has been excluded from the Russian trade; and as the supplies
furnished from the United States are injurious to the Russian
establishments on the northwest coast and calculated to produce
complaints between the two Governments, His Imperial Majesty thinks it
for the interest of both countries not to accede to the proposition made
by the American Government for the renewal of the article last referred
to.

The correspondence herewith communicated will show the grounds upon
which we contend that the citizens of the United States have,
independent of the provisions of the convention of 1824, a right to
trade with the natives upon the coast in question at unoccupied places,
liable, however, it is admitted, to be at any time extinguished by the
creation of Russian establishments at such points. This right is denied
by the Russian Government, which asserts that by the operation of the
treaty of 1824 each party agreed to waive the general right to land on
the vacant coasts on the respective sides of the degree of latitude
referred to, and accepted in lieu thereof the mutual privileges
mentioned in the fourth article. The capital and tonnage employed by our
citizens in their trade with the northwest coast of America will,
perhaps, on adverting to the official statements of the commerce and
navigation of the United States for the last few years, be deemed too
inconsiderable in amount to attract much attention; yet the subject may
in other respects deserve the careful consideration of Congress.

I regret to state that the blockade of the principal ports on the
eastern coast of Mexico, which, in consequence of differences between
that Republic and France, was instituted in May last, unfortunately
still continues, enforced by a competent French naval armament, and is
necessarily embarrassing to our own trade in the Gulf, in common with
that of other nations. Every disposition, however, is believed to exist
on the part of the French Government to render this measure as little
onerous as practicable to the interests of the citizens of the United
States and to those of neutral commerce, and it is to be hoped that an
early settlement of the difficulties between France and Mexico will soon
reestablish the harmonious relations formerly subsisting between them
and again open the ports of that Republic to the vessels of all friendly
nations.

A convention for marking that part of the boundary between the United
States and the Republic of Texas which extends from the mouth of the
Sabine to the Red River was concluded and signed at this city on the
25th of April last. It has since been ratified by both Governments, and
seasonable measures will be taken to carry it into effect on the part of
the United States.

The application of that Republic for admission into this Union, made in
August, 1837, and which was declined for reasons already made known to
you, has been formally withdrawn, as will appear from the accompanying
copy of the note of the minister plenipotentiary of Texas, which was
presented to the Secretary of State on the occasion of the exchange of
the ratifications of the convention above mentioned.

Copies of the convention with Texas, of a commercial treaty concluded
with the King of Greece, and of a similar treaty with the Peru-Bolivian
Confederation, the ratifications of which have been recently exchanged,
accompany this message, for the information of Congress and for such
legislative enactments as may be found necessary or expedient in
relation to either of them.

To watch over and foster the interests of a gradually increasing and
widely extended commerce, to guard the rights of American citizens whom
business or pleasure or other motives may tempt into distant climes, and
at the same time to cultivate those sentiments of mutual respect and
good will which experience has proved so beneficial in international
intercourse, the Government of the United States has deemed it expedient
from time to time to establish diplomatic connections with different
foreign states, by the appointment of representatives to reside within
their respective territories. I am gratified to be enabled to announce
to you that since the close of your last session these relations have
been opened under the happiest auspices with Austria and the Two
Sicilies, that new nominations have been made in the respective missions
of Russia, Brazil, Belgium, and Sweden and Norway in this country, and
that a minister extraordinary has been received, accredited to this
Government, from the Argentine Confederation.

An exposition of the fiscal affairs of the Government and of their
condition for the past year will be made to you by the Secretary of the
Treasury.

The available balance in the Treasury on the 1st of January next is
estimated at $2,765,342. The receipts of the year from customs and lands
will probably amount to $20,615,598. These usual sources of revenue have
been increased by an issue of Treasury notes, of which less than
$8,000,000, including interest and principal, will be outstanding at the
end of the year, and by the sale of one of the bonds of the Bank of the
United States for $2,254,871. The aggregate of means from these and
other sources, with the balance on hand on the 1st of January last, has
been applied to the payment of appropriations by Congress. The whole
expenditure for the year on their account, including the redemption of
more than eight millions of Treasury notes, constitutes an aggregate of
about $40,000,000, and will still leave in the Treasury the balance
before stated.

Nearly $8,000,000 of Treasury notes are to be paid during the coming
year in addition to the ordinary appropriations for the support of
Government. For both these purposes the resources of the Treasury will
undoubtedly be sufficient if the charges upon it are not increased
beyond the annual estimates. No excess, however, is likely to exist. Nor
can the postponed installment of the surplus revenue be deposited with
the States nor any considerable appropriations beyond the estimates be
made without causing a deficiency in the Treasury. The great caution,
advisable at all times, of limiting appropriations to the wants of the
public service is rendered necessary at present by the prospective and
rapid reduction of the tariff, while the vigilant jealousy evidently
excited among the people by the occurrences of the last few years
assures us that they expect from their representatives, and will sustain
them in the exercise of, the most rigid economy. Much can be effected by
postponing appropriations not immediately required for the ordinary
public service or for any pressing emergency, and much by reducing the
expenditures where the entire and immediate accomplishment of the
objects in view is not indispensable.

When we call to mind the recent and extreme embarrassments produced by
excessive issues of bank paper, aggravated by the unforeseen withdrawal
of much foreign capital and the inevitable derangement arising from the
distribution of the surplus revenue among the States as required by
Congress, and consider the heavy expenses incurred by the removal of
Indian tribes, by the military operations in Florida, and on account of
the unusually large appropriations made at the last two annual sessions
of Congress for other objects, we have striking evidence in the present
efficient state of our finances of the abundant resources of the country
to fulfill all its obligations. Nor is it less gratifying to find that
the general business of the community, deeply affected as it has been,
is reviving with additional vigor, chastened by the lessons of the past
and animated by the hopes of the future. By the curtailment of paper
issues, by curbing the sanguine and adventurous spirit of speculation,
and by the honorable application of all available means to the
fulfillment of obligations, confidence has been restored both at home
and abroad, and ease and facility secured to all the operations of
trade.

The agency of the Government in producing these results has been as
efficient as its powers and means permitted. By withholding from the
States the deposit of the fourth installment, and leaving several
millions at long credits with the banks, principally in one section of
the country, and more immediately beneficial to it, and at the same time
aiding the banks and commercial communities in other sections by
postponing the payment of bonds for duties to the amount of between four
and five millions of dollars; by an issue of Treasury notes as a means
to enable the Government to meet the consequences of their indulgences,
but affording at the same time facilities for remittance and exchange;
and by steadily declining to employ as general depositories of the
public revenues, or receive the notes of, all banks which refused to
redeem them with specie--by these measures, aided by the favorable
action of some of the banks and by the support and cooperation of a
large portion of the community, we have witnessed an early resumption of
specie payments in our great commercial capital, promptly followed in
almost every part of the United States. This result has been alike
salutary to the true interests of agriculture, commerce, and
manufactures; to public morals, respect for the laws, and that
confidence between man and man which is so essential in all our social
relations.

The contrast between the suspension of 1814 and that of 1837 is most
striking. The short duration of the latter, the prompt restoration of
business, the evident benefits resulting from an adherence by the
Government to the constitutional standard of value instead of
sanctioning the suspension by the receipt of irredeemable paper, and the
advantages derived from the large amount of specie introduced into the
country previous to 1837 afford a valuable illustration of the true
policy of the Government in such a crisis. Nor can the comparison fail
to remove the impression that a national bank is necessary in such
emergencies. Not only were specie payments resumed without its aid, but
exchanges have also been more rapidly restored than when it existed,
thereby showing that private capital, enterprise, and prudence are fully
adequate to these ends. On all these points experience seems to have
confirmed the views heretofore submitted to Congress. We have been saved
the mortification of seeing the distresses of the community for the
third time seized on to fasten upon the country so dangerous an
institution, and we may also hope that the business of individuals will
hereafter be relieved from the injurious effects of a continued
agitation of that disturbing subject. The limited influence of a
national bank in averting derangement in the exchanges of the country or
in compelling the resumption of specie payments is now not less apparent
than its tendency to increase inordinate speculation by sudden
expansions and contractions; its disposition to create panic and
embarrassment for the promotion of its own designs; its interference
with politics, and its far greater power for evil than for good, either
in regard to the local institutions or the operations of Government
itself. What was in these respects but apprehension or opinion when a
national bank was first established now stands confirmed by humiliating
experience. The scenes through which we have passed conclusively prove
how little our commerce, agriculture, manufactures, or finances require
such an institution, and what dangers are attendant on its power--a
power, I trust, never to be conferred by the American people upon their
Government, and still less upon individuals not responsible to them for
its unavoidable abuses.

My conviction of the necessity of further legislative provisions for the
safe-keeping and disbursement of the public moneys and my opinion in
regard to the measures best adapted to the accomplishment of those
objects have been already submitted to you. These have been strengthened
by recent events, and in the full conviction that time and experience
must still further demonstrate their propriety I feel it my duty, with
respectful deference to the conflicting views of others, again to invite
your attention to them.

With the exception of limited sums deposited in the few banks still
employed under the act of 1836, the amounts received for duties, and,
with very inconsiderable exceptions, those accruing from lands also,
have since the general suspension of specie payments by the deposit
banks been kept and disbursed by the Treasurer under his general legal
powers, subject to the superintendence of the Secretary of the Treasury.
The propriety of defining more specifically and of regulating by law the
exercise of this wide scope of Executive discretion has been already
submitted to Congress.

A change in the office of collector at one of our principal ports has
brought to light a defalcation of the gravest character, the particulars
of which will be laid before you in a special report from the Secretary
of the Treasury. By his report and the accompanying documents it will be
seen that the weekly returns of the defaulting officer apparently
exhibited throughout a faithful administration of the affairs intrusted
to his management. It, however, now appears that he commenced
abstracting the public moneys shortly after his appointment and
continued to do so, progressively increasing the amount, for the term of
more than seven years, embracing a portion of the period during which
the public moneys were deposited in the Bank of the United States, the
whole of that of the State bank deposit system, and concluding only on
his retirement from office, after that system had substantially failed
in consequence of the suspension of specie payments.

The way in which this defalcation was so long concealed and the steps
taken to indemnify the United States, as far as practicable, against
loss will also be presented to you. The case is one which imperatively
claims the attention of Congress and furnishes the strongest motive for
the establishment of a more severe and secure system for the
safe-keeping and disbursement of the public moneys than any that has
heretofore existed.

It seems proper, at all events, that by an early enactment similar to
that of other countries the application of public money by an officer of
Government to private uses should be made a felony and visited with
severe and ignominious punishment. This is already in effect the law in
respect to the Mint, and has been productive of the most salutary
results. Whatever system is adopted, such an enactment would be wise as
an independent measure, since much of the public moneys must in their
collection and ultimate disbursement pass twice through the hands of
public officers, in whatever manner they are intermediately kept. The
Government, it must be admitted, has been from its commencement
comparatively fortunate in this respect. But the appointing power can
not always be well advised in its selections, and the experience of
every country has shown that public officers are not at all times proof
against temptation. It is a duty, therefore, which the Government owes,
as well to the interests committed to its care as to the officers
themselves, to provide every guard against transgressions of this
character that is consistent with reason and humanity. Congress can not
be too jealous of the conduct of those who are intrusted with the public
money, and I shall at all times be disposed to encourage a watchful
discharge of this duty.

If a more direct cooperation on the part of Congress in the supervision
of the conduct of the officers intrusted with the custody and
application of the public money is deemed desirable, it will give me
pleasure to assist in the establishment of any judicious and
constitutional plan by which that object may be accomplished. You will
in your wisdom determine upon the propriety of adopting such a plan and
upon the measures necessary to its effectual execution. When the late
Bank of the United States was incorporated and made the depository of
the public moneys, a right was reserved to Congress to inspect at its
pleasure, by a committee of that body, the books and the proceedings of
the bank. In one of the States, whose banking institutions are supposed
to rank amongst the first in point of stability, they are subjected to
constant examination by commissioners appointed for that purpose, and
much of the success of its banking system is attributed to this watchful
supervision.

The same course has also, in view of its beneficial operation, been
adopted by an adjoining State, favorably known for the care it has
always bestowed upon whatever relates to its financial concerns. I
submit to your consideration whether a committee of Congress might not
be profitably employed in inspecting, at such intervals as might be
deemed proper, the affairs and accounts of officers intrusted with the
custody of the public moneys. The frequent performance of this duty
might be made obligatory on the committee in respect to those officers
who have large sums in their possession, and left discretionary in
respect to others. They might report to the Executive such defalcations
as were found to exist, with a view to a prompt removal from office
unless the default was satisfactorily accounted for, and report also to
Congress, at the commencement of each session, the result of their
examinations and proceedings. It does appear to me that with a
subjection of this class of public officers to the general supervision
of the Executive, to examinations by a committee of Congress at periods
of which they should have no previous notice, and to prosecution and
punishment as for felony for every breach of trust, the safe-keeping of
the public moneys might under the system proposed be placed on a surer
foundation than it has ever occupied since the establishment of the
Government.

The Secretary of the Treasury will lay before you additional information
containing new details on this interesting subject. To these I ask your
early attention. That it should have given rise to great diversity of
opinion can not be a subject of surprise. After the collection and
custody of the public moneys had been for so many years connected with
and made subsidiary to the advancement of private interests, a return to
the simple self-denying ordinances of the Constitution could not but be
difficult. But time and free discussion, eliciting the sentiments of the
people, and aided by that conciliatory spirit which has ever
characterized their course on great emergencies, were relied upon for a
satisfactory settlement of the question. Already has this anticipation,
on one important point at least--the impropriety of diverting public
money to private purposes--been fully realized. There is no reason to
suppose that legislation upon that branch of the subject would now be
embarrassed by a difference of opinion, or fail to receive the cordial
support of a large majority of our constituents.

The connection which formerly existed between the Government and banks
was in reality injurious to both, as well as to the general interests of
the community at large. It aggravated the disasters of trade and the
derangements of commercial intercourse, and administered new excitements
and additional means to wild and reckless speculations, the
disappointment of which threw the country into convulsions of panic, and
all but produced violence and bloodshed. The imprudent expansion of bank
credits, which was the natural result of the command of the revenues of
the State, furnished the resources for unbounded license in every
species of adventure, seduced industry from its regular and salutary
occupations by the hope of abundance without labor, and deranged the
social state by tempting all trades and professions into the vortex of
speculation on remote contingencies.

The same wide-spreading influence impeded also the resources of the
Government, curtailed its useful operations, embarrassed the fulfillment
of its obligations, and seriously interfered with the execution of the
laws. Large appropriations and oppressive taxes are the natural
consequences of such a connection, since they increase the profits of
those who are allowed to use the public funds, and make it their
interest that money should be accumulated and expenditures multiplied.
It is thus that a concentrated money power is tempted to become an
active agent in political affairs; and all past experience has shown on
which side that influence will be arrayed. We deceive ourselves if we
suppose that, it will ever be found asserting and supporting the rights
of the community at large in opposition to the claims of the few.

In a government whose distinguishing characteristic should be a
diffusion and equalization of its benefits and burdens the advantage of
individuals will be augmented at the expense of the community at large.
Nor is it the nature of combinations for the acquisition of legislative
influence to confine their interference to the single object for which
they were originally formed. The temptation to extend it to other
matters is, on the contrary, not unfrequently too strong to be resisted.
The rightful influence in the direction of public affairs of the mass of
the people is therefore in no slight danger of being sensibly and
injuriously affected by giving to a comparatively small but very
efficient class a direct and exclusive personal interest in so important
a portion of the legislation of Congress as that which relates to the
custody of the public moneys. If laws acting upon private interests can
not always be avoided, they should be confined within the narrowest
limits, and left wherever possible to the legislatures of the States.
When not thus restricted they lead to combinations of powerful
associations, foster an influence necessarily selfish, and turn the fair
course of legislation to sinister ends rather than to objects that
advance public liberty and promote the general good.

The whole subject now rests with you, and I can not but express a hope
that some definite measure will be adopted at the present session.

It will not, I am sure, be deemed out of place for me here to remark
that the declaration of my views in opposition to the policy of
employing banks as depositories of the Government funds can not justly
be construed as indicative of hostility, official or personal, to those
institutions; or to repeat in this form and in connection with this
subject opinions which I have uniformly entertained and on all proper
occasions expressed. Though always opposed to their creation in the form
of exclusive privileges, and, as a State magistrate, aiming by
appropriate legislation to secure the community against the consequences
of their occasional mismanagement, I have yet ever wished to see them
protected in the exercise of rights conferred by law, and have never
doubted their utility when properly managed in promoting the interests
of trade, and through that channel the other interests of the community.
To the General Government they present themselves merely as State
institutions, having no necessary connection with its legislation or its
administration. Like other State establishments, they may be used or not
in conducting the affairs of the Government, as public policy and the
general interests of the Union may seem to require. The only safe or
proper principle upon which their intercourse with the Government can be
regulated is that which regulates their intercourse with the private
citizen--the conferring of mutual benefits. When the Government can
accomplish a financial operation better with the aid of the banks than
without it, it should be at liberty to seek that aid as it would the
services of a private banker or other capitalist or agent, giving the
preference to those who will serve it on the best terms. Nor can there
ever exist an interest in the officers of the General Government, as
such, inducing them to embarrass or annoy the State banks any more than
to incur the hostility of any other class of State institutions or of
private citizens. It is not in the nature of things that hostility to
these institutions can spring from this source, or any opposition to
their course of business, except when they themselves depart from the
objects of their creation and attempt to usurp powers not conferred upon
them or to subvert the standard of value established by the
Constitution. While opposition to their regular operations can not exist
in this quarter, resistance to any attempt to make the Government
dependent upon them for the successful administration of public affairs
is a matter of duty, as I trust it ever will be of inclination, no
matter from what motive or consideration the attempt may originate.

It is no more than just to the banks to say that in the late emergency
most of them firmly resisted the strongest temptations to extend their
paper issues when apparently sustained in a suspension of specie
payments by public opinion, even though in some cases invited by
legislative enactments. To this honorable course, aided by the
resistance of the General Government, acting in obedience to the
Constitution and laws of the United States, to the introduction of an
irredeemable paper medium, may be attributed in a great degree the
speedy restoration of our currency to a sound state and the business of
the country to its wonted prosperity.

The banks have but to continue in the same safe course and be content in
their appropriate sphere to avoid all interference from the General
Government and to derive from it all the protection and benefits which
it bestows on other State establishments, on the people of the States,
and on the States themselves. In this, their true position, they can not
but secure the confidence and good will of the people and the
Government, which they can only lose when, leaping from their legitimate
sphere, they attempt to control the legislation of the country and
pervert the operations of the Government to their own purposes.

Our experience under the act, passed at the last session, to grant
preemption rights to settlers on the public lands has as yet been too
limited to enable us to pronounce with safety upon the efficacy of its
provisions to carry out the wise and liberal policy of the Government in
that respect. There is, however, the best reason to anticipate favorable
results from its operation. The recommendations formerly submitted to
you in respect to a graduation of the price of the public lands remain
to be finally acted upon. Having found no reason to change the views
then expressed, your attention to them is again respectfully requested.

Every proper exertion has been made and will be continued to carry out
the wishes of Congress in relation to the tobacco trade, as indicated in
the several resolutions of the House of Representatives and the
legislation of the two branches. A favorable impression has, I trust,
been made in the different foreign countries to which particular
attention has been directed; and although we can not hope for an early
change in their policy, as in many of them a convenient and large
revenue is derived from monopolies in the fabrication and sale of this
article, yet, as these monopolies are really injurious to the people
where they are established, and the revenue derived from them may be
less injuriously and with equal facility obtained from another and a
liberal system of administration, we can not doubt that our efforts will
be eventually crowned with, success if persisted in with temperate
firmness and sustained by prudent legislation.

In recommending to Congress the adoption of the necessary provisions at
this session for taking the next census or enumeration of the
inhabitants of the United States, the suggestion presents itself whether
the scope of the measure might not be usefully extended by causing it to
embrace authentic statistical returns of the great interests specially
intrusted to or necessarily affected by the legislation of Congress.

The accompanying report of the Secretary of War presents a satisfactory
account of the state of the Army and of the several branches of the
public service confided to the superintendence of that officer.

The law increasing and organizing the military establishment of the
United States has been nearly carried into effect, and the Army has been
extensively and usefully employed during the past season.

I would again call to your notice the subjects connected with and
essential to the military defenses of the country which were submitted
to you at the last session, but which were not acted upon, as is
supposed, for want of time. The most important of them is the
organization of the militia on the maritime and inland frontiers. This
measure is deemed important, as it is believed that it will furnish an
effective volunteer force in aid of the Regular Army, and may form the
basis of a general system of organization for the entire militia of the
United States. The erection of a national foundry and gunpowder
manufactory, and one for making small arms, the latter to be situated at
some point west of the Allegany Mountains, all appear to be of
sufficient importance to be again urged upon your attention.

The plan proposed by the Secretary of War for the distribution of the
forces of the United States in time of peace is well calculated to
promote regularity and economy in the fiscal administration of the
service, to preserve the discipline of the troops, and to render them
available for the maintenance of the peace and tranquillity of the
Country. With this view, likewise, I recommend the adoption of the plan
presented by that officer for the defense of the western frontier. The
preservation of the lives and property of our fellow-citizens who are
settled upon that border country, as well as the existence of the Indian
population, which might be tempted by our want of preparation to rush on
their own destruction and attack the white settlements, all seem to
require that this subject should be acted upon without delay, and the
War Department authorized to place that country in a state of complete
defense against any assault from the numerous and warlike tribes which
are congregated on that border.

It affords me sincere pleasure to be able to apprise you of the entire
removal of the Cherokee Nation of Indians to their new homes west of the
Mississippi. The measures authorized by Congress at its last session,
with a view to the long-standing controversy with them, have had the
happiest effects. By an agreement concluded with them by the commanding
general in that country, who has performed the duties assigned to him on
the occasion with commendable energy and humanity, their removal has
been principally under the conduct of their own chiefs, and they have
emigrated without any apparent reluctance.

The successful accomplishment of this important object, the removal also
of the entire Creek Nation with the exception of a small number of
fugitives amongst the Seminoles in Florida, the progress already made
toward a speedy completion of the removal of the Chickasaws, the
Choctaws, the Pottawatamies, the Ottawas, and the Chippewas, with the
extensive purchases of Indian lands during the present year, have
rendered the speedy and successful result of the long-established policy
of the Government upon the subject of Indian affairs entirely certain.
The occasion is therefore deemed a proper one to place this policy in
such a point of view as will exonerate the Government of the United
States from the undeserved reproach which has been cast upon it through
several successive Administrations. That a mixed occupancy of the same
territory by the white and red man is incompatible with the safety or
happiness of either is a position in respect to which there has long
since ceased to be room for a difference of opinion. Reason and
experience have alike demonstrated its impracticability. The bitter
fruits of every attempt heretofore to overcome the barriers interposed
by nature have only been destruction, both physical and moral, to the
Indian, dangerous conflicts of authority between the Federal and State
Governments, and detriment to the individual prosperity of the citizen
as well as to the general improvement of the country. The remedial
policy, the principles of which were settled more than thirty years ago
under the Administration of Mr. Jefferson, consists in an extinction,
for a fair consideration, of the title to all the lands still occupied
by the Indians within the States and Territories of the United States;
their removal to a country west of the Mississippi much more extensive
and better adapted to their condition than that on which they then
resided; the guarantee to them by the United States of their exclusive
possession of that country forever, exempt from all intrusions by white
men, with ample provisions for their security against external violence
and internal dissensions, and the extension to them of suitable
facilities for their advancement in civilization. This has not been the
policy of particular Administrations only, but of each in succession
since the first attempt to carry it out under that of Mr. Monroe. All
have labored for its accomplishment, only with different degrees of
success. The manner of its execution has, it is true, from time to time
given rise to conflicts of opinion and unjust imputations; but in
respect to the wisdom and necessity of the policy itself there has not
from the beginning existed a doubt in the mind of any calm, judicious,
disinterested friend of the Indian race accustomed to reflection and
enlightened by experience.

Occupying the double character of contractor on its own account and
guardian for the parties contracted with, it was hardly to be expected
that the dealings of the Federal Government with the Indian tribes would
escape misrepresentation. That there occurred ill the early settlement
of this country, as in all others where the civilized race has succeeded
to the possessions of the savage, instances of oppression and fraud on
the part of the former there is too much reason to believe. No such
offenses can, however, be justly charged upon this Government since it
became free to pursue its own course. Its dealings with the Indian
tribes have been just and friendly throughout; its efforts for their
civilization constant, and directed by the best feelings of humanity;
its watchfulness in protecting them from individual frauds unremitting;
its forbearance under the keenest provocations, the deepest injuries,
and the most flagrant outrages may challenge at least a comparison with
any nation, ancient or modern, in similar circumstances; and if in
future times a powerful, civilized, and happy nation of Indians shall be
found to exist within the limits of this northern continent it will be
owing to the consummation of that policy which has been so unjustly
assailed. Only a very brief reference to facts in confirmation of this
assertion can in this form be given, and you are therefore necessarily
referred to the report of the Secretary of War for further details. To
the Cherokees, whose case has perhaps excited the greatest share of
attention and sympathy, the United States have granted in fee, with a
perpetual guaranty of exclusive and peaceable possession, 13,554,135
acres of land on the west side of the Mississippi, eligibly situated, in
a healthy climate, and in all respects better suited to their condition
than the country they have left, in exchange for only 9,492, 160 acres
on the east side of the same river. The United States have in addition
stipulated to pay them $5,600,000 for their interest in and improvements
on the lands thus relinquished, and $1,160,000 for subsistence and other
beneficial purposes, thereby putting it in their power to become one of
the most wealthy and independent separate communities of the same extent
in the world.

By the treaties made and ratified with the Miamies, the Chippewas, the
Sioux, the Sacs and Foxes, and the Winnebagoes during the last year the
Indian title to 18,458,000 acres has been extinguished. These purchases
have been much more extensive than those of any previous year, and have,
with other Indian expenses, borne very heavily upon the Treasury. They
leave, however, but a small quantity of unbought Indian lands within the
States and Territories, and the Legislature and Executive were equally
sensible of the propriety of a final and more speedy extinction of
Indian titles within those limits. The treaties, which were with a
single exception made in pursuance of previous appropriations for
defraying the expenses, have subsequently been ratified by the Senate,
and received the sanction of Congress by the appropriations necessary to
carry them into effect. Of the terms upon which these important
negotiations were concluded I can speak from direct knowledge, and I
feel no difficulty in affirming that the interest of the Indians in the
extensive territory embraced by them is to be paid for at its fair
value, and that no more favorable terms have been granted to the United
States than would have been reasonably expected in a negotiation with
civilized men fully capable of appreciating and protecting their own
rights. For the Indian title to 116,349,897 acres acquired since the 4th
of March, 1829, the United States have paid $72,560,056 in permanent
annuities, lands, reservations for Indians, expenses of removal and
subsistence, merchandise, mechanical and agricultural establishments and
implements. When the heavy expenses incurred by the United States and
the circumstance that so large a portion of the entire territory will be
forever unsalable are considered, and this price is compared with that
for which the United States sell their own lands, no one can doubt that
justice has been done to the Indians in these purchases also. Certain it
is that the transactions of the Federal Government with the Indians have
been uniformly characterized by a sincere and paramount desire to
promote their welfare; and it must be a source of the highest
gratification to every friend to justice and humanity to learn that not
withstanding the obstructions from time to time thrown in its way and
the difficulties which have arisen from the peculiar and impracticable
nature of the Indian character, the wise, humane, and undeviating policy
of the Government in this the most difficult of all our relations,
foreign or domestic, has at length been justified to the world in its
near approach to a happy and certain consummation.

The condition of the tribes which occupy the country set apart for them
in the West is highly prosperous, and encourages the hope of their early
civilization. They have for the most part abandoned the hunter state and
turned their attention to agricultural pursuits. All those who have been
established for any length of time in that fertile region maintain
themselves by their own industry. There are among them traders of no
inconsiderable capital, and planters exporting cotton to some extent,
but the greater number are small agriculturists, living in comfort upon
the produce of their farms. The recent emigrants, although they have in
some instances removed reluctantly, have readily acquiesced in their
unavoidable destiny. They have found at once a recompense for past
sufferings and an incentive to industrious habits in the abundance and
comforts around them. There is reason to believe that all these tribes
are friendly in their feelings toward the United States; and it is to be
hoped that the acquisition of individual wealth, the pursuits of
agriculture, and habits of industry will gradually subdue their warlike
propensities and incline them to maintain peace among themselves. To
effect this desirable object the attention of Congress is solicited to
the measures recommended by the Secretary of War for their future
government and protection, as well from each other as from the hostility
of the warlike tribes around them and the intrusions of the whites. The
policy of the Government has given them a permanent home and guaranteed
to them its peaceful and undisturbed possession. It only remains to give
them a government and laws which will encourage industry and secure to
them the rewards of their exertions. The importance of some form of
government can not be too much insisted upon. The earliest effects will
be to diminish the causes and occasions for hostilities among the
tribes, to inspire an interest in the observance of laws to which they
will have themselves assented, and to multiply the securities of
property and the motives for self-improvement. Intimately connected with
this subject is the establishment of the military defenses recommended
by the Secretary of War, which have been already referred to. Without
them the Government will be powerless to redeem its pledge of protection
to the emigrating Indians against the numerous warlike tribes that
surround them and to provide for the safety of the frontier settlers of
the bordering States.

The case of the Seminoles constitutes at present the only exception to
the successful efforts of the Government to remove the Indians to the
homes assigned them west of the Mississippi. Four hundred of this tribe
emigrated in 1836 and 1,500 in 1837 and 1838, leaving in the country, it
is supposed, about 2,000 Indians. The continued treacherous conduct of
these people; the savage and unprovoked murders they have lately
committed, butchering whole families of the settlers of the Territory
without distinction of age or sex, and making their way into the very
center and heart of the country, so that no part of it is free from
their ravages; their frequent attacks on the light-houses along that
dangerous coast, and the barbarity with which they have murdered the
passengers and crews of such vessels as have been wrecked upon the reefs
and keys which border the Gulf, leave the Government no alternative but
to continue the military operations against them until they are totally
expelled from Florida. There are other motives which would urge the
Government to pursue this course toward the Seminoles. The United States
have fulfilled in good faith all their treaty stipulations with the
Indian tribes, and have in every other instance insisted upon a like
performance of their obligations. To relax from this salutary rule
because the Seminoles have maintained themselves so long in the
territory they had relinquished, and in defiance of their frequent and
solemn engagements still continue to wage a ruthless war against the
United States, would not only evince a want of constancy on our part,
but be of evil example in our intercourse with other tribes. Experience
has shown that but little is to be gained by the march of armies through
a country so intersected with inaccessible swamps and marshes, and
which, from the fatal character of the climate, must be abandoned at the
end of the winter. I recommend, therefore, to your attention the plan
submitted by the Secretary of War in the accompanying report, for the
permanent occupation of the portion of the Territory freed from the
Indians and the more efficient protection of the people of Florida from
their inhuman warfare.

From the report of the Secretary of the Navy herewith transmitted it
will appear that a large portion of the disposable naval force is either
actively employed or in a state of preparation for the purposes of
experience and discipline and the protection of our commerce. So
effectual has been this protection that so far as the information of
Government extends not a single outrage has been attempted on a vessel
carrying the flag of the United States within the present year, in any
quarter, however distant or exposed.

The exploring expedition sailed from Norfolk on the 19th of August last,
and information has been received of its safe arrival at the island of
Madeira. The best spirit animates the officers and crews, and there is
every reason to anticipate from its efforts results beneficial to
commerce and honorable to the nation.

It will also be seen that no reduction of the force now in commission is
contemplated. The unsettled state of a portion of South America renders
it indispensable that our commerce should receive protection in that
quarter; the vast and increasing interests embarked in the trade of the
Indian and China seas, in the whale fisheries of the Pacific Ocean, and
in the Gulf of Mexico require equal attention to their safety, and a
small squadron may be employed to great advantage on our Atlantic coast
in meeting sudden demands for the reenforcement of other stations, in
aiding merchant vessels in distress, in affording active service to an
additional number of officers, and in visiting the different ports of
the United States, an accurate knowledge of which is obviously of the
highest importance.

The attention of Congress is respectfully called to that portion of the
report recommending an increase in the number of smaller vessels, and to
other suggestions contained in that document. The rapid increase and
wide expansion of our commerce, which is every day seeking new avenues
of profitable adventure; the absolute necessity of a naval force for its
protection precisely in the degree of its extension; a due regard to the
national rights and honor; the recollection of its former exploits, and
the anticipation of its future triumphs whenever opportunity presents
itself, which we may rightfully indulge from the experience of the
past--all seem to point to the Navy as a most efficient arm of our
national defense and a proper object of legislative encouragement.

The progress and condition of the Post-Office Department will be seen by
reference to the report of the Postmaster-General. The extent of
post-roads covered by mail contracts is stated to be 134,818 miles, and
the annual transportation upon them 34,580,202 miles. The number of
post-offices in the United States is 12,553, and rapidly increasing. The
gross revenue for the year ending on the 30th day of June last was
$4,262,145; the accruing expenditures, $4,680,068; excess of
expenditures, $417,923. This has been made up out of the surplus
previously on hand. The cash on hand on the 1st instant was $314,068.
The revenue for the year ending June 30, 1838, was $161,540 more than
that for the year ending June 30, 1837. The expenditures of the
Department had been graduated upon the anticipation of a largely
increased revenue. A moderate curtailment of mail service consequently
became necessary, and has been effected, to shield the Department
against the danger of embarrassment. Its revenue is now improving, and
it will soon resume its onward course in the march of improvement.

Your particular attention is requested to so much of the
Postmaster-Generals report as relates to the transportation of the mails
upon railroads. The laws on that subject do not seem adequate to secure
that service, now become almost essential to the public interests, and
at the same time protect the Department from combinations and
unreasonable demands.

Nor can I too earnestly request your attention to the necessity of
providing a more secure building for this Department. The danger of
destruction to which its important books and papers are continually
exposed, as well from the highly combustible character of the building
occupied as from that of others in the vicinity, calls loudly for prompt
action.

Your attention is again earnestly invited to the suggestions and
recommendations submitted at the last session in respect to the District
of Columbia.

I feel it my duty also to bring to your notice certain proceedings at
law which have recently been prosecuted in this District in the name of
the United States, on the relation of Messrs. Stockton & Stokes, of the
State of Maryland, against the Postmaster-General, and which have
resulted in the payment of money out of the National Treasury, for the
first time since the establishment of the Government, by judicial
compulsion exercised by the common-law writ of mandamus issued by the
circuit court of this District.

The facts of the case and the grounds of the proceedings will be found
fully stated in the report of the decision, and any additional
information which you may desire will be supplied by the proper
Department. No interference in the particular case is contemplated. The
money has been paid, the claims of the prosecutors have been satisfied,
and the whole subject, so far as they are concerned, is finally disposed
of; but it is on the supposition that the case may be regarded as an
authoritative exposition of the law as it now stands that I have thought
it necessary to present it to your consideration.

The object of the application to the circuit court was to compel the
Postmaster-General to carry into effect an award made by the Solicitor
of the Treasury, under a special act of Congress for the settlement of
certain claims of the relators on the Post-Office Department, which
award the Postmaster-General declined to execute in full until he should
receive further legislative direction on the subject. If the duty
imposed on the Postmaster-General by that law was to be regarded as one
of an official nature, belonging to his office as a branch of the
executive, then it is obvious that the constitutional competency of the
judiciary to direct and control him in its discharge was necessarily
drawn in question; and if the duty so imposed on the Postmaster-General
was to be considered as merely ministerial, and not executive, it yet
remained to be shown that the circuit court of this District had
authority to interfere by mandamus, such a power having never before
been asserted or claimed by that court. With a view to the settlement of
these important questions, the judgment of the circuit court was carried
by a writ of error to the Supreme Court of the United States. In the
opinion of that tribunal the duty imposed on the Postmaster-General was
not an official executive duty, but one of a merely ministerial nature.
The grave constitutional questions which had been discussed were
therefore excluded from the decision of the case, the court, indeed,
expressly admitting that with powers and duties properly belonging to
the executive no other department can interfere by the writ of mandamus;
and the question therefore resolved itself into this: Has Congress
conferred upon the circuit court of this District the power to issue
such a writ to an officer of the General Government commanding him to
perform a ministerial act? A majority of the court have decided that it
has, but have rounded their decision upon a process of reasoning which
in my judgment renders further legislative provision indispensable to
the public interests and the equal administration of justice.

It has long since been decided by the Supreme Court that neither that
tribunal nor the circuit courts of the United States, held within the
respective States, possess the power in question; but it is now held
that this power, denied to both of these high tribunals (to the former
by the Constitution and to the latter by Congress), has been by its
legislation vested in the circuit court of this District. No such direct
grant of power to the circuit court of this District is claimed, but it
has been held to result by necessary implication from several sections
of the law establishing the court. One of these sections declares that
the laws of Maryland, as they existed at the time of the cession, should
be in force in that part of the District ceded by that State, and by
this provision the common law in civil and criminal cases, as it
prevailed in Maryland in 1801, was established in that part of the
District.

In England the court of king's bench--because the Sovereign, who,
according to the theory of the constitution, is the fountain of justice
originally sat there in person, and is still deemed to be present in
construction of law--alone possesses the high power of issuing the writ
of mandamus, not only to inferior jurisdictions and corporations, but
also to magistrates and others, commanding them in the King's name to do
what their duty requires in cases where there is a vested right and no
other specific remedy. It has been held in the case referred to that as
the Supreme Court of the United States is by the Constitution rendered
incompetent to exercise this power, and as the circuit court of this
District is a court of general jurisdiction in cases at common law, and
the highest court of original jurisdiction in the District, the right to
issue the writ of mandamus is incident to its common-law powers. Another
ground relied upon to maintain the power in question is that it was
included by fair construction in the powers granted to the circuit
courts of the United States by the act "to provide for the more
convenient organization of the courts of the United States," passed 13th
February, 1801; that the act establishing the circuit court of this
District, passed the 27th day of February, 1801, conferred upon that
court and the judges thereof the same powers as were by law vested in
the circuit courts of the United States and in the judges of the said
courts; that the repeal of the first-mentioned act, which took place in
the next year, did not divest the circuit court of this District of the
authority in dispute, but left it still clothed with the powers over the
subject which, it is conceded, were taken away from the circuit courts
of the United States by the repeal of the act of 13th February, 1801.

Admitting that the adoption of the laws of Maryland for a portion of
this District confers on the circuit court thereof, in that portion, the
transcendent extrajudicial prerogative powers of the court of king's
bench in England, or that either of the acts of Congress by necessary
implication authorizes the former court to issue a writ of mandamus to
an officer of the United States to compel him to perform a ministerial
duty, the consequences are in one respect the same. The result in either
case is that the officers of the United States stationed in different
parts of the United States are, in respect to the performance of their
official duties, subject to different laws and a different
supervision--those in the States to one rule, and those in the District
of Columbia to another and a very different one. In the District their
official conduct is subject to a judicial control from which in the
States they are exempt.

Whatever difference of opinion may exist as to the expediency of vesting
such a power in the judiciary in a system of government constituted like
that of the United States, all must agree that these disparaging
discrepancies in the law and in the administration of justice ought not
to he permitted to continue; and as Congress alone can provide the
remedy, the subject is unavoidably presented to your consideration.

M. VAN BUREN

***

State of the Union Address
Martin van Buren
December 2, 1839

Fellow-Citizens of the Senate and House of Representatives:

I regret that I can not on this occasion congratulate you that the past
year has been one of unalloyed prosperity. The ravages of fire and
disease have painfully afflicted otherwise flourishing portions of our
country, and serious embarrassments yet derange the trade of many of our
cities. But notwithstanding these adverse circumstances, that general
prosperity which has been heretofore so bountifully bestowed upon us by
the Author of All Good still continues to call for our warmest
gratitude. Especially have we reason to rejoice in the exuberant
harvests which have lavishly recompensed well-directed industry and
given to it that sure reward which is vainly sought in visionary
speculations. I cannot, indeed, view without peculiar satisfaction the
evidences afforded by the past season of the benefits that spring from
the steady devotion of the husbandman to his honorable pursuit. No means
of individual comfort is more certain and no source of national
prosperity is so sure. Nothing can compensate a people for a dependence
upon others for the bread they eat, and that cheerful abundance on which
the happiness of everyone so much depends is to be looked for nowhere
with such sure reliance as in the industry of the agriculturist and the
bounties of the earth.

With foreign countries our relations exhibit the same favorable aspect
which was presented in my last annual message, and afford continued
proof of the wisdom of the pacific, just, and forbearing policy adopted
by the first Administration of the Federal Government and pursued by its
successors. The extraordinary powers vested in me by an act of Congress
for the defense of the country in an emergency, considered so far
probable as to require that the Executive should possess ample means to
meet it, have not been exerted. They have therefore been attended with
no other result than to increase, by the confidence thus reposed in me,
my obligations to maintain with religious exactness the cardinal
principles that govern our intercourse with other nations. Happily, in
our pending questions with Great Britain, out of which this unusual
grant of authority arose, nothing has occurred to require its exertion,
and as it is about to return to the Legislature I trust that no future
necessity may call for its exercise by them or its delegation to another
Department of the Government.

For the settlement of our northeastern boundary the proposition promised
by Great Britain for a commission of exploration and survey has been
received, and a counter project, including also a provision for the
certain and final adjustment of the limits in dispute, is now before the
British Government for its consideration. A just regard to the delicate
state of this question and a proper respect for the natural impatience
of the State of Maine, not less than a conviction that the negotiation
has been already protracted longer than is prudent on the part of either
Government, have led me to believe that the present favorable moment
should on no account be suffered to pass without putting the question
forever at rest. I feel confident that the Government of Her Britannic
Majesty will take the same view of this subject, as I am persuaded it is
governed by desires equally strong and sincere for the amicable
termination of the controversy.

To the intrinsic difficulties of questions of boundary lines, especially
those described in regions unoccupied and but partially known, is to be
added in our country the embarrassment necessarily arising out of our
Constitution by which the General Government is made the organ of
negotiating and deciding upon the particular interests of the States on
whose frontiers these lines are to be traced. To avoid another
controversy in which a State government might rightfully claim to have
her wishes consulted previously to the conclusion of conventional
arrangements concerning her rights of jurisdiction or territory, I have
thought it necessary to call the attention of the Government of Great
Britain to another portion of our conterminous dominion of which the
division still remains to be adjusted I refer to the line from the
entrance of Lake Superior to the most northwestern point of the Lake of
the Woods, stipulations for the settlement of which are to be found in
the seventh article of the treaty of Ghent. The commissioners appointed
under that article by the two Governments having differed in their
opinions, made separate reports, according to its stipulations, upon the
points of disagreement, and these differences are now to be submitted to
the arbitration of some friendly sovereign or state. The disputed points
should be settled and the line designated before the Territorial
government of which it is one of the boundaries takes its place in the
Union as a State, and I rely upon the cordial cooperation of the British
Government to effect that object.

There is every reason to believe that disturbances like those which
lately agitated the neighboring British Provinces will not again prove
the sources of border contentions or interpose obstacles to the
continuance of that good understanding which it is the mutual interest
of Great Britain and the United States to preserve and maintain.

Within the Provinces themselves tranquillity is restored, and on our
frontier that misguided sympathy in favor of what was presumed to be a
general effort in behalf of popular rights, and which in some instances
misled a few of our more inexperienced citizens, has subsided into a
rational conviction strongly opposed to all intermeddling with the
internal affairs of our neighbors. The people of the United States feel,
as it is hoped they always will, a warm solicitude for the success of
all who are sincerely endeavoring to improve the political condition of
mankind. This generous feeling they cherish toward the most distant
nations, and it was natural, therefore, that it should be awakened with
more than common warmth in behalf of their immediate neighbors; but it
does not belong to their character as a community to seek the
gratification of those feelings in acts which violate their duty as
citizens, endanger the peace of their country, and tend to bring upon it
the stain of a violated faith toward foreign nations. If, zealous to
confer benefits on others, they appear for a moment to lose sight of the
permanent obligations imposed upon them as citizens, they are seldom
long misled. From all the information I receive, confirmed to some
extent by personal observation, I am satisfied that no one can now hope
to engage in such enterprises without encountering public indignation,
in addition to the severest penalties of the law.

Recent information also leads me to hope that the emigrants from Her
Majesty's Provinces who have sought refuge within our boundaries are
disposed to become peaceable residents and to abstain from all attempts
to endanger the peace of that country which has afforded them an asylum.
On a review of the occurrences on both sides of the line it is
satisfactory to reflect that in almost every complaint against our
country the offense may be traced to emigrants from the Provinces who
have sought refuge here. In the few instances in which they were aided
by citizens of the United States the acts of these misguided men were
not only in direct contravention of the laws and well-known wishes of
their own Government, but met with the decided disapprobation of the
people of the United States.

I regret to state the appearance of a different spirit among Her
Majesty's subjects in the Canadas. The sentiments of hostility to our
people and institutions which have been so frequently expressed there,
and the disregard of our rights which has been manifested on some
occasions, have, I am sorry to say, been applauded and encouraged by the
people, and even by some of the subordinate local authorities, of the
Provinces. The chief officers in Canada, fortunately, have not
entertained the same feeling, and have probably prevented excesses that
must have been fatal to the peace of the two countries.

I look forward anxiously to a period when all the transactions which
have grown out of this condition of our affairs, and which have been
made the subjects of complaint and remonstrance by the two Governments,
respectively, shall be fully examined, and the proper satisfaction given
where it is due from either side.

Nothing has occurred to disturb the harmony of our intercourse with
Austria, Belgium, Denmark, France, Naples, Portugal, Prussia, Russia, or
Sweden. The internal state of Spain has sensibly improved, and a
well-grounded hope exists that the return of peace will restore to the
people of that country their former prosperity and enable the Government
to fulfill all its obligations at home and abroad. The Government of
Portugal, I have the satisfaction to state, has paid in full the
eleventh and last installment due to our citizens for the claims
embraced in the settlement made with it on the 3d of March, 1837.

I lay before you treaties of commerce negotiated with the Kings of
Sardinia and of the Netherlands, the ratifications of which have been
exchanged since the adjournment of Congress. The liberal principles of
these treaties will recommend them to your approbation. That with
Sardinia is the first treaty of commerce formed by that Kingdom, and it
will, I trust, answer the expectations of the present Sovereign by
aiding the development of the resources of his country and stimulating
the enterprise of his people. That with the Netherlands happily
terminates a long-existing subject of dispute and removes from our
future commercial intercourse all apprehension of embarrassment. The
King of the Netherlands has also, in further illustration of his
character for justice and of his desire to remove every cause of
dissatisfaction, made compensation for an American vessel captured in
1800 by a French privateer, and carried into Curacoa, where the proceeds
were appropriated to the use of the colony, then, and for a short time
after, under the dominion of Holland.

The death of the late Sultan has produced no alteration in our relations
with Turkey. Our newly appointed minister resident has reached
Constantinople, and I have received assurances from the present ruler
that the obligations of our treaty and those of friendship will be
fulfilled by himself in the same spirit that actuated his illustrious
father.

I regret to be obliged to inform you that no convention for the
settlement of the claims of our citizens upon Mexico has yet been
ratified by the Government of that country. The first convention formed
for that purpose was not presented by the President of Mexico for the
approbation of its Congress, from a belief that the King of Prussia, the
arbitrator in case of disagreement in the joint commission to be
appointed by the United States and Mexico, would not consent to take
upon himself that friendly office. Although not entirely satisfied with
the course pursued by Mexico, I felt no hesitation in receiving in the
most conciliatory spirit the explanation offered, and also cheerfully
consented to a new convention, in order to arrange the payments proposed
to be made to our citizens in a manner which, while equally just to
them, was deemed less onerous and inconvenient to the Mexican
Government. Relying confidently upon the intentions of that Government,
Mr. Ellis was directed to repair to Mexico, and diplomatic intercourse
has been resumed between the two countries. The new convention has, he
informs us, been recently submitted by the President of that Republic to
its Congress under circumstances which promise a speedy ratification, a
result which I can not allow myself to doubt.

Instructions have been given to the commissioner of the United States
under our convention with Texas for the demarcation of the line which
separates us from that Republic. The commissioners of both Governments
met in New Orleans in August last. The joint commission was organized,
and adjourned to convene at the same place on the 12th of October. It is
presumed to be now in the performance of its duties.

The new Government of Texas has shown its desire to cultivate friendly
relations with us by a prompt reparation for injuries complained of in
the cases of two vessels of the United States.

With Central America a convention has been concluded for the renewal of
its former treaty with the United States. This was not ratified before
the departure of our late charge d'affaires from that country, and the
copy of it brought by him was not received before the adjournment of the
Senate at the last session. In the meanwhile, the period limited for the
exchange of ratifications having expired, I deemed it expedient, in
consequence of the death of the charge d'affaires, to send a special
agent to Central America to close the affairs of our mission there and
to arrange with the Government an extension of the time for the exchange
of ratifications.

The commission created by the States which formerly composed the
Republic of Colombia for adjusting the claims against that Government
has by a very unexpected construction of the treaty under which it acts
decided that no provision was made for those claims of citizens of the
United States which arose from captures by Colombian privateers and were
adjudged against the claimants in the judicial tribunals. This decision
will compel the United States to apply to the several Governments
formerly united for redress. With all these--New Granada, Venezuela, and
Ecuador--a perfectly good understanding exists. Our treaty with
Venezuela is faithfully carried into execution, and that country, in the
enjoyment of tranquillity, is gradually advancing in prosperity under
the guidance of its present distinguished President, General Paez. With
Ecuador a liberal commercial convention has lately been concluded, which
will be transmitted to the Senate at an early day.

With the great American Empire of Brazil our relations continue
unchanged, as does our friendly intercourse with the other Governments
of South America--the Argentine Republic and the Republics of Uruguay,
Chili, Peru, and Bolivia. The dissolution of the Peru-Bolivian
Confederation may occasion some temporary inconvenience to our citizens
in that quarter, but the obligations on the new Governments which have
arisen out of that Confederation to observe its treaty stipulations will
no doubt be soon understood, and it is presumed that no indisposition
will exist to fulfill those which it contracted with the United States.

The financial operations of the Government during the present year have,
I am happy to say, been very successful. The difficulties under which
the Treasury Department has labored, from known defects in the existing
laws relative to the safe-keeping of the public moneys, aggravated by
the suspension of specie payments by several of the banks holding public
deposits or indebted to public officers for notes received in payment of
public dues, have been surmounted to a very gratifying extent. The large
current expenditures have been punctually met, and the faith of the
Government in all its pecuniary concerns has been scrupulously
maintained.

The nineteen millions of Treasury notes authorized by the act of
Congress of 1837, and the modifications thereof with a view to the
indulgence of merchants on their duty bonds and of the deposit banks in
the payment of public moneys held by them, have been so punctually
redeemed as to leave less than the original ten millions outstanding at
any one time, and the whole amount unredeemed now falls short of three
millions. Of these the chief portion is not due till next year, and the
whole would have been already extinguished could the Treasury have
realized the payments due to it from the banks. If those due from them
during the next year shall be punctually made, and if Congress shall
keep the appropriations within the estimates, there is every reason to
believe that all the outstanding Treasury notes can be redeemed and the
ordinary expenses defrayed without imposing on the people any additional
burden, either of loans or increased taxes.

To avoid this and to keep the expenditures within reasonable bounds is a
duty second only in importance to the preservation of our national
character and the protection of our citizens in their civil and
political rights. The creation in time of peace of a debt likely to
become permanent is an evil for which there is no equivalent. The
rapidity with which many of the States are apparently approaching to
this condition admonishes us of our own duties in a manner too
impressive to be disregarded. One, not the least important, is to keep
the Federal Government always in a condition to discharge with ease and
vigor its highest functions should their exercise be required by any
sudden conjuncture of public affairs--a condition to which we are always
exposed and which may occur when it is least expected. To this end it is
indispensable that its finances should be untrammeled and its resources
as far as practicable unencumbered. No circumstance could present
greater obstacles to the accomplishment of these vitally important
objects than the creation of an onerous national debt. Our own
experience and also that of other nations have demonstrated the
unavoidable and fearful rapidity with which a public debt is increased
when the Government has once surrendered itself to the ruinous practice
of supplying its supposed necessities by new loans. The struggle,
therefore, on our part to be successful must be made at the threshold.
To make our efforts effective, severe economy is necessary. This is the
surest provision for the national welfare, and it is at the same time
the best preservative of the principles on which our institutions rest.
Simplicity and economy in the affairs of state have never failed to
chasten and invigorate republican principles, while these have been as
surely subverted by national prodigality, under whatever specious
pretexts it may have been introduced or fostered.

These considerations can not be lost upon a people who have never been
inattentive to the effect of their policy upon the institutions they
have created for themselves, but at the present moment their force is
augmented by the necessity which a decreasing revenue must impose. The
check lately given to importations of articles subject to duties, the
derangements in the operations of internal trade, and especially the
reduction gradually taking place in our tariff of duties, all tend
materially to lessen our receipts; indeed, it is probable that the
diminution resulting from the last cause alone will not fall short of
$5,000,000 in the year 1842, as the final reduction of all duties to 20
per cent then takes effect. The whole revenue then accruing from the
customs and from the sales of public lands, if not more, will
undoubtedly be wanted to defray the necessary expenses of the Government
under the most prudent administration of its affairs. These are
circumstances that impose the necessity of rigid economy and require its
prompt and constant exercise. With the Legislature rest the power and
duty of so adjusting the public expenditure as to promote this end. By
the provisions of the Constitution it is only in consequence of
appropriations made by law that money can be drawn from the Treasury. No
instance has occurred since the establishment of the Government in which
the Executive, though a component part of the legislative power, has
interposed an objection to an appropriation bill on the sole ground of
its extravagance. His duty in this respect has been considered fulfilled
by requesting such appropriations only as the public service may be
reasonably expected to require. In the present earnest direction of the
public mind toward this subject both the Executive and the Legislature
have evidence of the strict responsibility to which they will be held;
and while I am conscious of my own anxious efforts to perform with
fidelity this portion of my public functions, it is a satisfaction to me
to be able to count on a cordial cooperation from you.

At the time I entered upon my present duties our ordinary disbursements,
without including those on account of the public debt, the Post-Office,
and the trust funds in charge of the Government, had been largely
increased by appropriations for the removal of the Indians, for
repelling Indian hostilities, and for other less urgent expenses which
grew out of an overflowing Treasury. Independent of the redemption of
the public debt and trusts, the gross expenditures of seventeen and
eighteen millions in 1834 and 1835 had by these causes swelled to
twenty-nine millions in 1836, and the appropriations for 1837, made
previously to the 4th of March, caused the expenditure to rise to the
very large amount of thirty-three millions. We were enabled during the
year 1838, notwithstanding the continuance of our Indian embarrassments,
somewhat to reduce this amount, and that for the present year (1839)
will not in all probability exceed twenty-six millions, or six millions
less than it was last year. With a determination, so far as depends on
me, to continue this reduction, I have directed the estimates for 1840
to be subjected to the severest scrutiny and to be limited to the
absolute requirements of the public service. They will be found less
than the expenditures of 1839 by over $5,000,000.

The precautionary measures which will be recommended by the Secretary of
the Treasury to protect faithfully the public credit under the
fluctuations and contingencies to which our receipts and expenditures
are exposed, and especially in a commercial crisis like the present, are
commended to your early attention.

On a former occasion your attention was invited to various
considerations in support of a preemption law in behalf of the settlers
on the public lands, and also of a law graduating the prices for such
lands as had long been in the market unsold in consequence of their
inferior quality. The execution of the act which was passed on the first
subject has been attended with the happiest consequences in quieting
titles and securing improvements to the industrious, and it has also to
a very gratifying extent been exempt from the frauds which were
practiced under previous preemption laws. It has at the same time, as
was anticipated, contributed liberally during the present year to the
receipts of the Treasury.

The passage of a graduation law, with the guards before recommended,
would also, I am persuaded, add considerably to the revenue for several
years, and prove in other respects just and beneficial. Your early
consideration of the subject is therefore once more earnestly requested.

The present condition of the defenses of our principal seaports and
navy-yards, as represented by the accompanying report of the Secretary
of War, calls for the early and serious attention of Congress; and, as
connecting itself intimately with this subject, I can not recommend too
strongly to your consideration the plan submitted by that officer for
the organization of the militia of the United States.

In conformity with the expressed wishes of Congress, an attempt was made
in the spring to terminate the Florida war by negotiation. It is to be
regretted that these humane intentions should have been frustrated and
that the effort to bring these unhappy difficulties to a satisfactory
conclusion should have failed; but after entering into solemn
engagements with the commanding general, the Indians, without any
provocation, recommenced their acts of treachery and murder. The renewal
of hostilities in that Territory renders it necessary that I should
recommend to your favorable consideration the plan which will be
submitted to you by the Secretary of War, in order to enable that
Department to conduct them to a successful issue.

Having had an opportunity of personally inspecting a portion of the
troops during the last summer, it gives me pleasure to bear testimony to
the success of the effort to improve their discipline by keeping them
together in as large bodies as the nature of our service will permit. I
recommend, therefore, that commodious and permanent barracks be
constructed at the several posts designated by the Secretary of War.
Notwithstanding the high state of their discipline and excellent police,
the evils resulting to the service from the deficiency of company
officers were very apparent, and I recommend that the staff officers be
permanently separated from the line.

The Navy has been usefully and honorably employed in protecting the
rights and property of our citizens wherever the condition of affairs
seemed to require its presence. With the exception of one instance,
where an outrage, accompanied by murder, was committed on a vessel of
the United States while engaged in a lawful commerce, nothing is known
to have occurred to impede or molest the enterprise of our citizens on
that element, where it is so signally displayed. On learning this daring
act of piracy, Commodore Reed proceeded immediately to the spot, and
receiving no satisfaction, either in the surrender of the murderers or
the restoration of the plundered property, inflicted severe and merited
chastisement on the barbarians.

It will be seen by the report of the Secretary of the Navy respecting
the disposition of our ships of war that it has been deemed necessary to
station a competent force on the coast of Africa to prevent a fraudulent
use of our flag by foreigners.

Recent experience has shown that the provisions in our existing laws
which relate to the sale and transfer of American vessels while abroad
are extremely defective. Advantage has been taken of these defects to
give to vessels wholly belonging to foreigners and navigating the ocean
an apparent American ownership. This character has been so well
simulated as to afford them comparative security in prosecuting the
slave trade--a traffic emphatically denounced in our statutes, regarded
with abhorrence by our citizens, and of which the effectual suppression
is nowhere more sincerely desired than in the United States. These
circumstances make it proper to recommend to your early attention a
careful revision of these laws, so that without impeding the freedom and
facilities of our navigation or impairing an important branch of our
industry connected with it the integrity and honor of our flag may be
carefully preserved. Information derived from our consul at Havana
showing the necessity of this was communicated to a committee of the
Senate near the close of the last session, but too late, as it appeared,
to be acted upon. It will be brought to your notice by the proper
Department, with additional communications from other sources.

The latest accounts from the exploring expedition represent it as
proceeding successfully in its objects and promising results no less
useful to trade and navigation than to science.

The extent of post-roads covered by mail service on the 1st of July last
was about 133,999 miles and the rate of annual transportation upon them
34,496,878 miles. The number of post-offices on that day was 12,780 and
on the 30th ultimo 13,028.

The revenue of the Post-Office Department for the year ending with the
30th of June last was $4,476,638, exhibiting an increase over the
preceding year of $241,560. The engagements and liabilities of the
Department for the same period are $4,624,117.

The excess of liabilities over the revenue for the last two years has
been met out of the surplus which had previously accumulated. The cash
on hand on the 30th ultimo was about $206,701.95 and the current income
of the Department varies very little from the rate of current
expenditures. Most of the service suspended last year has been restored,
and most of the new routes established by the act of 7th July, 1838,
have been set in operation, at an annual cost of $136,963.
Notwithstanding the pecuniary difficulties of the country, the revenue
of the Department appears to be increasing, and unless it shall be
seriously checked by the recent suspension of payment by so many of the
banks it will be able not only to maintain the present mail service, but
in a short time to extend it. It is gratifying to witness the
promptitude and fidelity with which the agents of this Department in
general perform their public duties.

Some difficulties have arisen in relation to contracts for the
transportation of the mails by railroad and steamboat companies. It
appears that the maximum of compensation provided by Congress for the
transportation of the mails upon railroads is not sufficient to induce
some of the companies to convey them at such hours as are required for
the accommodation of the public. It is one of the most important duties
of the General Government to provide and maintain for the use of the
people of the States the best practicable mail establishment. To arrive
at that end it is indispensable that the Post-Office Department shall be
enabled to control the hours at which the mails shall be carried over
railroads, as it now does over all other roads. Should serious
inconveniences arise from the inadequacy of the compensation now
provided by law, or from unreasonable demands by any of the railroad
companies, the subject is of such general importance as to require the
prompt attention of Congress.

In relation to steamboat lines, the most efficient remedy is obvious and
has been suggested by the Postmaster-General. The War and Navy
Departments already employ steamboats in their service; and although it
is by no means desirable that the Government should undertake the
transportation of passengers or freight as a business, there can be no
reasonable objection to running boats, temporarily, whenever it may be
necessary to put down attempts at extortion, to be discontinued as soon
as reasonable contracts can be obtained.

The suggestions of the Postmaster-General relative to the inadequacy of
the legal allowance to witnesses in cases of prosecutions for mail
depredations merit your serious consideration. The safety of the mails
requires that such prosecutions shall be efficient, and justice to the
citizen whose time is required to be given to the public demands not
only that his expenses shall be paid, but that he shall receive a
reasonable compensation.

The reports from the War, Navy, and Post-Office Departments will
accompany this communication, and one from the Treasury Department will
be presented to Congress in a few days.

For various details in respect to the matters in charge of these
Departments I would refer you to those important documents, satisfied
that you will find in them many valuable suggestions which will be found
well deserving the attention of the Legislature.

From a report made in December of last year by the Secretary of State to
the Senate, showing the trial docket of each of the circuit courts and
the number of miles each judge has to travel in the performance of his
duties, a great inequality appears in the amount of labor assigned to
each judge. The number of terms to be held in each of the courts
composing the ninth circuit, the distances between the places at which
they sit and from thence to the seat of Government, are represented to
be such as to render it impossible for the judge of that circuit to
perform in a manner corresponding with the public exigencies his term
and circuit duties. A revision, therefore, of the present arrangement of
the circuit seems to be called for and is recommended to your notice.

I think it proper to call your attention to the power assumed by
Territorial legislatures to authorize the issue of bonds by corporate
companies on the guaranty of the Territory. Congress passed a law in
1836 providing that no act of a Territorial legislature incorporating
banks should have the force of law until approved by Congress, but acts
of a very exceptionable character previously passed by the legislature
of Florida were suffered to remain in force, by virtue of which bonds
may be issued to a very large amount by those institutions upon the
faith of the Territory. A resolution, intending to be a joint one,
passed the Senate at the same session, expressing the sense of Congress
that the laws in question ought not to be permitted to remain in force
unless amended in many material respects; but it failed in the House of
Representatives for want of time, and the desired amendments have not
been made. The interests involved are of great importance, and the
subject deserves your early and careful attention.

The continued agitation of the question relative to the best mode of
keeping and disbursing the public money still injuriously affects the
business of the country. The suspension of specie payments in 1837
rendered the use of deposit banks as prescribed by the act of 1836 a
source rather of embarrassment than aid, and of necessity placed the
custody of most of the public money afterwards collected in charge of
the public officers. The new securities for its safety which this
required were a principal cause of my convening an extra session of
Congress, but in consequence of a disagreement between the two Houses
neither then nor at any subsequent period has there been any legislation
on the subject. The effort made at the last session to obtain the
authority of Congress to punish the use of public money for private
purposes as a crime a measure attended under other governments with
signal advantage--was also unsuccessful, from diversities of opinion in
that body, notwithstanding the anxiety doubtless felt by it to afford
every practicable security. The result of this is still to leave the
custody of the public money without those safeguards which have been for
several years earnestly desired by the Executive, and as the remedy is
only to be found in the action of the Legislature it imposes on me the
duty of again submitting to you the propriety of passing a law providing
for the safe-keeping of the public moneys, and especially to ask that
its use for private purposes by any officers intrusted with it may be
declared to be a felony, punishable with penalties proportioned to the
magnitude of the offense.

These circumstances, added to known defects in the existing laws and
unusual derangement in the general operations of trade, have during the
last three years much increased the difficulties attendant on the
collection, keeping, and disbursement of the revenue, and called forth
corresponding exertions from those having them in charge. Happily these
have been successful beyond expectation. Vast sums have been collected
and disbursed by the several Departments with unexpected cheapness and
ease, transfers have been readily made to every part of the Union,
however distant, and defalcations have been far less than might have
been anticipated from the absence of adequate legal restraints. Since
the officers of the Treasury and Post-Office Departments were charged
with the custody of most of the public moneys received by them there
have been collected $66,000,000, and, excluding the case of the late
collector at New York, the aggregate amount of losses sustained in the
collection can not, it is believed, exceed $60,000. The defalcation of
the late collector at that city, of the extent and circumstances of
which Congress have been fully informed, ran through all the modes of
keeping the public money that have been hitherto in use, and was
distinguished by an aggravated disregard of duty that broke through the
restraints of every system, and can not, therefore, be usefully referred
to as a test of the comparative safety of either. Additional information
will also be furnished by the report of the Secretary of the Treasury,
in reply to a call made upon that officer by the House of
Representatives at the last session requiring detailed information on
the subject of defaults by public officers or agents under each
Administration from 1789 to 1837. This document will be submitted to you
in a few days. The general results (independent of the Post-Office,
which is kept separately and will be stated by itself), so far as they
bear upon this subject, are that the losses which have been and are
likely to be sustained by any class of agents have been the greatest by
banks, including, as required in the resolution, their depreciated paper
received for public dues; that the next largest have been by disbursing
officers, and the least by collectors and receivers. If the losses on
duty bonds are included, they alone will be threefold those by both
collectors and receivers. Our whole experience, therefore, furnishes the
strongest evidence that the desired legislation of Congress is alone
wanting to insure in those operations the highest degree of security and
facility. Such also appears to have been the experience of other
nations. From the results of inquiries made by the Secretary of the
Treasury in regard to the practice among them I am enabled to state that
in twenty-two out of twenty-seven foreign governments from which
undoubted information has been obtained the public moneys are kept in
charge of public officers. This concurrence of opinion in favor of that
system is perhaps as great as exists on any question of internal
administration.

In the modes of business and official restraints on disbursing officers
no legal change was produced by the suspension of specie payments. The
report last referred to will be found to contain also much useful
information in relation to this subject.

I have heretofore assigned to Congress my reasons for believing that the
establishment of an independent National Treasury, as contemplated by
the Constitution, is necessary to the safe action of the Federal
Government. The suspension of specie payments in 1837 by the banks
having the custody of the public money showed in so alarming a degree
our dependence on those institutions for the performance of duties
required by law that I then recommended the entire dissolution of that
connection. This recommendation has been subjected, as I desired it
should be, to severe scrutiny and animated discussion, and I allow
myself to believe that notwithstanding the natural diversities of
opinion which may be anticipated on all subjects involving such
important considerations, it has secured in its favor as general a
concurrence of public sentiment as could be expected on one of such
magnitude.

Recent events have also continued to develop new objections to such a
connection. Seldom is any bank, under the existing system and practice,
able to meet on demand all its liabilities for deposits and notes in
circulation. It maintains specie payments and transacts a profitable
business only by the confidence of the public in its solvency, and
whenever this is destroyed the demands of its depositors and note
holders, pressed more rapidly than it can make collections from its
debtors, force it to stop payment. This loss of confidence, with its
consequences, occurred in 1837, and afforded the apology of the banks
for their suspension. The public then acquiesced in the validity of the
excuse, and while the State legislatures did not exact from them their
forfeited charters, Congress, in accordance with the recommendation of
the Executive, allowed them time to pay over the public money they held,
although compelled to issue Treasury notes to supply the deficiency thus
created.

It now appears that there are other motives than a want of public
confidence under which the banks seek to justify themselves in a refusal
to meet their obligations. Scarcely were the country and Government
relieved in a degree from the difficulties occasioned by the general
suspension of 1837 when a partial one, occurring within thirty months of
the former, produced new and serious embarrassments, though it had no
palliation in such circumstances as were alleged in justification of
that which had previously taken place. There was nothing in the
condition of the country to endanger a well-managed banking institution;
commerce was deranged by no foreign war; every branch of manufacturing
industry was crowned with rich rewards, and the more than usual
abundance of our harvests, after supplying our domestic wants, had left
our granaries and storehouses filled with a surplus for exportation. It
is in the midst of this that an irredeemable and depreciated paper
currency is entailed upon the people by a large portion of the banks.
They are not driven to it by the exhibition of a loss of public
confidence or of a sudden pressure from their depositors or note
holders, but they excuse themselves by alleging that the current of
business and exchange with foreign countries, which draws the precious
metals from their vaults, would require in order to meet it a larger
curtailment of their loans to a comparatively small portion of the
community than it will be convenient for them to bear or perhaps safe
for the banks to exact. The plea has ceased to be one of necessity.
Convenience and policy are now deemed sufficient to warrant these
institutions in disregarding their solemn obligations. Such conduct is
not merely an injury to individual creditors, but it is a wrong to the
whole community, from whose liberality they hold most valuable
privileges, whose rights they violate, whose business they derange, and
the value of whose property they render unstable and insecure. It must
be evident that this new ground for bank suspensions, in reference to
which their action is not only disconnected with, but wholly independent
of, that of the public, gives a character to their suspensions more
alarming than any which they exhibited before, and greatly increases the
impropriety of relying on the banks in the transactions of the
Government.

A large and highly respectable portion of our banking institutions are,
it affords me unfeigned pleasure to state, exempted from all blame on
account of this second delinquency. They have, to their great credit,
not only continued to meet their engagements, but have even repudiated
the grounds of suspension now resorted to. It is only by such a course
that the confidence and good will of the community can be preserved, and
in the sequel the best interests of the institutions themselves
promoted.

New dangers to the banks are also daily disclosed from the extension of
that system of extravagant credit of which they are the pillars.
Formerly our foreign commerce was principally rounded on an exchange of
commodities, including the precious metals, and leaving in its
transactions but little foreign debt. Such is not now the case. Aided by
the facilities afforded by the banks, mere credit has become too
commonly the basis of trade. Many of the banks themselves, not content
with largely stimulating this system among others, have usurped the
business, while they impair the stability, of the mercantile community;
they have become borrowers instead of lenders; they establish their
agencies abroad; they deal largely in stocks and merchandise; they
encourage the issue of State securities until the foreign market is
glutted with them; and, unsatisfied with the legitimate use of their own
capital and the exercise of their lawful privileges, they raise by large
loans additional means for every variety of speculation. The disasters
attendant on this deviation from the former course of business in this
country are now shared alike by banks and individuals to an extent of
which there is perhaps no previous example in the annals of our country.
So long as a willingness of the foreign lender and a sufficient export
of our productions to meet any necessary partial payments leave the flow
of credit undisturbed all appears to be prosperous, but as soon as it is
checked by any hesitation abroad or by an inability to make payment
there in our productions the evils of the system are disclosed. The
paper currency, which might serve for domestic purposes, is useless to
pay the debt due in Europe. Gold and silver are therefore drawn in
exchange for their notes from the banks. To keep up their supply of coin
these institutions are obliged to call upon their own debtors, who pay
them principally in their own notes, which are as unavailable to them as
they are to the merchants to meet the foreign demand. The calls of the
banks, therefore, in such emergencies of necessity exceed that demand,
and produce a corresponding curtailment of their accommodations and of
the currency at the very moment when the state of trade renders it most
inconvenient to be borne. The intensity of this pressure on the
community is in proportion to the previous liberality of credit and
consequent expansion of the currency. Forced sales of property are made
at the time when the means of purchasing are most reduced, and the worst
calamities to individuals are only at last arrested by an open violation
of their obligations by the banks--a refusal to pay specie for their
notes and an imposition upon the community of a fluctuating and
depreciated currency.

These consequences are inherent in the present system. They are not
influenced by the banks being large or small, created by National or
State Governments. They are the results of the irresistible laws of
trade or credit. In the recent events, which have so strikingly
illustrated the certain effects of these laws, we have seen the bank of
the largest capital in the Union, established under a national charter,
and lately strengthened, as we were authoritatively informed, by
exchanging that for a State charter with new and unusual privileges--in
a condition, too, as it was said, of entire soundness and great
prosperity--not merely unable to resist these effects, but the first to
yield to them.

Nor is it to be overlooked that there exists a chain of necessary
dependence among these institutions which obliges them to a great extent
to follow the course of others, notwithstanding its injustice to their
own immediate creditors or injury to the particular community in which
they are placed. This dependence of a bank, which is in proportion to
the extent of its debts for circulation and deposits, is not merely on
others in its own vicinity, but on all those which connect it with the
center of trade. Distant banks may fail without seriously affecting
those in our principal commercial cities, but the failure of the latter
is felt at the extremities of the Union. The suspension at New York in
1837 was everywhere, with very few exceptions, followed as soon as it
was known. That recently at Philadelphia immediately affected the banks
of the South and West in a similar manner. This dependence of our whole
banking system on the institutions in a few large cities is not found in
the laws of their organization, but in those of trade and exchange. The
banks at that center, to which currency flows and where it is required
in payments for merchandise, hold the power of controlling those in
regions whence it comes, while the latter possess no means of
restraining them; so that the value of individual property and the
prosperity of trade through the whole interior of the country are made
to depend on the good or bad management of the banking institutions in
the great seats of trade on the seaboard.

But this chain of dependence does not stop here. It does not terminate
at Philadelphia or New York. It reaches across the ocean and ends in
London, the center of the credit system. The same laws of trade which
give to the banks in our principal cities power over the whole banking
system of the United States subject the former, in their turn, to the
money power in Great Britain. It is not denied that the suspension of
the New York banks in 1837, which was followed in quick succession
throughout the Union, was produced by an application of that power, and
it is now alleged, in extenuation of the present condition of so large a
portion of our banks, that their embarrassments have arisen from the
same cause.

From this influence they can not now entirely escape, for it has its
origin in the credit currencies of the two countries; it is strengthened
by the current of trade and exchange which centers in London, and is
rendered almost irresistible by the large debts contracted there by our
merchants, our banks, and our States. It is thus that an introduction of
a new bank into the most distant of our villages places the business of
that village within the influence of the money power in England; it is
thus that every new debt which we contract in that country seriously
affects our own currency and extends over the pursuits of our citizens
its powerful influence. We can not escape from this by making new banks,
great or small, State or national. The same chains which bind those now
existing to the center of this system of paper credit must equally
fetter every similar institution we create. It is only by the extent to
which this system has been pushed of late that we have been made fully
aware of its irresistible tendency to subject our own banks and currency
to a vast controlling power in a foreign lad, and it adds a new argument
to those which illustrate their precarious situation.. Endangered in the
first place by their own mismanagement and again by the conduct of every
institution which connects them with the center of trade in our own
country, they are yet subjected beyond all this to the effect of
whatever measures policy, necessity, or caprice may induce those who
control the credits of England to resort to. I mean not to comment upon
these measures, present or past, and much less to discourage the
prosecution of fair commercial dealing between the two countries, based
on reciprocal benefits; but it having now been made manifest that the
power of inflicting these and similar injuries is by the resistless law
of a credit currency and credit trade equally capable of extending their
consequences through all the ramifications of our banking system, and by
that means indirectly obtaining, particularly when our banks are used as
depositories of the public moneys, a dangerous political influence in
the United States, I have deemed it my duty to bring the subject to your
notice and ask for it your serious consideration.

Is an argument required beyond the exposition of these facts to show the
impropriety of using our banking institutions as depositories of the
public money? Can we venture not only to encounter the risk of their
individual and mutual mismanagement, but at the same time to place our
foreign and domestic policy entirely under the control of a foreign
moneyed interest? To do so is to impair the independence of our
Government, as the present credit system has already impaired the
independence of our banks; it is to submit all its important operations,
whether of peace or war, to be controlled or thwarted, at first by our
own banks and then by a power abroad greater than themselves. I can not
bring myself to depict the humiliation to which this Government and
people might be sooner or later reduced if the means for defending their
rights are to be made dependent upon those who may have the most
powerful of motives to impair them.

Nor is it only in reference to the effect of this state of things on the
independence of our Government or of our banks that the subject presents
itself for consideration; it is to be viewed also in its relations to
the general trade of our country. The time is not long passed when a
deficiency of foreign crops was thought to afford a profitable market
for the surplus of our industry, but now we await with feverish anxiety
the news of the English harvest, not so much from motives of commendable
sympathy, but fearful lest its anticipated failure should narrow the
field of credit there. Does not this speak volumes to the patriot? Can a
system be beneficent, wise, or just which creates greater anxiety for
interests dependent on foreign credit than for the general prosperity of
our own country and the profitable exportation of the surplus produce of
our labor?

The circumstances to which I have thus adverted appear to me to afford
weighty reasons, developed by late events, to be added to those which I
have on former occasions offered when submitting to your better
knowledge and discernment the propriety of separating the custody of the
public money from banking institutions. Nor has anything occurred to
lessen, in my opinion, the force of what has been heretofore urged. The
only ground on which that custody can be desired by the banks is the
profitable use which they may make of the money. Such use would be
regarded in individuals as a breach of trust or a crime of great
magnitude, and yet it may be reasonably doubted whether, first and last,
it is not attended with more mischievous consequences when permitted to
the former than to the latter. The practice of permitting the public
money to be used by its keepers, as here, is believed to be peculiar to
this country and to exist scarcely anywhere else. To procure it here
improper influences are appealed to, unwise connections are established
between the Government and vast numbers of powerful State institutions,
other motives than the public good are brought to bear both on the
executive and legislative departments, and selfish combinations leading
to special legislation are formed. It is made the interest of banking
institutions and their stockholders throughout the Union to use their
exertions for the increase of taxation and the accumulation of a surplus
revenue, and while an excuse is afforded the means are furnished for
those excessive issues which lead to extravagant trading and speculation
and are the forerunners of a vast debt abroad and a suspension of the
banks at home.

Impressed, therefore, as I am with the propriety of the funds of the
Government being withdrawn from the private use of either banks or
individuals, and the public money kept by duly appointed public agents,
and believing as I do that such also is the judgment which discussion,
reflection, and experience have produced on the public mind, I leave the
subject with you. It is, at all events, essential to the interests of
the community and the business of the Government that a decision should
be made.

Most of the arguments that dissuade us from employing banks in the
custody and disbursement of the public money apply with equal force to
the receipt of their notes for public dues. The difference is only in
form. In one instance the Government is a creditor for its deposits, and
in the other for the notes it holds. They afford the same opportunity
for using the public moneys, and equally lead to all the evils attendant
upon it, since a bank can as safely extend its discounts on a deposit of
its notes in the hands of a public officer as on one made in its own
vaults. On the other hand, it would give to the Government no greater
security, for in case of failure the claim of the note holder would be
no better than that of a depositor.

I am aware that the danger of inconvenience to the public and
unreasonable pressure upon sound banks have been urged as objections to
requiring the payment of the revenue in gold and silver. These
objections have been greatly exaggerated. From the best estimates we may
safely fix the amount of specie in the country at $85,000,000, and the
portion of that which would be employed at any one time in the receipts
and disbursements of the Government, even if the proposed change were
made at once, would not, it is now, after fuller investigation, believed
exceed four or five millions. If the change were gradual, several years
would elapse before that sum would be required, with annual
opportunities in the meantime to alter the law should experience prove
it to be oppressive or inconvenient. The portions of the community on
whose business the change would immediately operate are comparatively
small, nor is it believed that its effect would be in the least unjust
or injurious to them.

In the payment of duties, which constitute by far the greater portion of
the revenue, a very large proportion is derived from foreign commission
houses and agents of foreign manufacturers, who sell the goods consigned
to them generally at auction, and after paying the duties out of the
avails remit the rest abroad in specie or its equivalent. That the
amount of duties should in such cases be also retained in specie can
hardly be made a matter of complaint. Our own importing merchants, by
whom the residue of the duties is paid, are not only peculiarly
interested in maintaining a sound currency, which the measure in
question will especially promote, but are from the nature of their
dealings best able to know when specie will be needed and to procure it
with the least difficulty or sacrifice. Residing, too, almost
universally in places where the revenue is received and where the drafts
used by the Government for its disbursements must concentrate, they have
every opportunity to obtain and use them in place of specie should it be
for their interest or convenience. Of the number of these drafts and the
facilities they may afford, as well as of the rapidity with which the
public funds are drawn and disbursed, an idea may be formed from the
fact that of nearly $20,000,000 paid to collectors and receivers during
the present year the average amount in their hands at any one time has
not exceeded a million and a half, and of the fifteen millions received
by the collector of New York alone during the present year the average
amount held by him subject to draft during each week has been less than
half a million.

The ease and safety of the operations of the Treasury in keeping the
public money are promoted by the application of its own drafts to the
public dues. The objection arising from having them too long outstanding
might be obviated and they yet made to afford to merchants and banks
holding them an equivalent for specie, and in that way greatly lessen
the amount actually required. Still less inconvenience will attend the
requirement of specie in purchases of public lands. Such purchases,
except when made on speculation, are in general but single transactions,
rarely repeated by the same person; and it is a fact that for the last
year and a half, during which the notes of sound banks have been
received, more than a moiety of these payments has been voluntarily made
in specie, being a larger proportion than would have been required in
three years under the graduation proposed.

It is, moreover, a principle than which none is better settled by
experience that the supply of the precious metals will always be found
adequate to the uses for which they are required. They abound in
countries where no other currency is allowed. In our own States, where
small notes are excluded, gold and silver supply their place. When
driven to their hiding places by bank suspensions, a little firmness in
the community soon restores them in a sufficient quantity for ordinary
purposes. Postage and other public dues have been collected in coin
without serious inconvenience even in States where a depreciated paper
currency has existed for years, and this, with the aid of Treasury notes
for a part of the time, was done without interruption during the
suspension of 1837. At the present moment the receipts and disbursements
of the Government are made in legal currency in the largest portion of
the Union. No one suggests a departure from this rule, and if it can now
be successfully carried out it will be surely attended with even less
difficulty when bank notes are again redeemed in specie.

Indeed, I can not think that a serious objection would anywhere be
raised to the receipt and payment of gold and silver in all public
transactions were it not from an apprehension that a surplus in the
Treasury might withdraw a large portion of it from circulation and lock
it up unprofitably in the public vaults. It would not, in my opinion, be
difficult to prevent such an inconvenience from occurring; but the
authentic statements which I have already submitted to you in regard to
the actual amount in the public Treasury at any one time during the
period embraced in them and the little probability of a different state
of the Treasury for at least some years to come seem to render it
unnecessary to dwell upon it. Congress, moreover, as I have before
observed, will in every year have an opportunity to guard against it
should the occurrence of any circumstances lead us to apprehend injury
from this source. Viewing the subject in all its aspects, I can not
believe that any period will be more auspicious than the present for the
adoption of all measures necessary to maintain the sanctity of our own
engagements and to aid in securing to the community that abundant supply
of the precious metals which adds so much to their prosperity and gives
such increased stability to all their dealings.

In a country so commercial as ours banks in some form will probably
always exist, but this serves only to render it the more incumbent on
us, notwithstanding the discouragements of the past, to strive in our
respective stations to mitigate the evils they produce; to take from
them as rapidly as the obligations of public faith and a careful
consideration of the immediate interests of the community will permit
the unjust character of monopolies; to check, so far as may be
practicable, by prudent legislation those temptations of interest and
those opportunities for their dangerous indulgence which beset them on
every side, and to confine them strictly to the performance of their
paramount duty--that of aiding the operations of commerce rather than
consulting their own exclusive advantage. These and other salutary
reforms may, it is believed, be accomplished without the violation of
any of the great principles of the social compact, the observance of
which is indispensable to its existence, or interfering in any way with
the useful and profitable employment of real capital.

Institutions so framed have existed and still exist elsewhere, giving to
commercial intercourse all necessary facilities without inflating or
depreciating the currency or stimulating speculation. Thus accomplishing
their legitimate ends, they have gained the surest guaranty for their
protection and encouragement in the good will of the community. Among a
people so just as ours the same results could not fail to attend a
similar course. The direct supervision of the banks belongs, from the
nature of our Government, to the States who authorize them. It is to
their legislatures that the people must mainly look for action on that
subject. But as the conduct of the Federal Government in the management
of its revenue has also a powerful, though less immediate, influence
upon them, it becomes our duty to see that a proper direction is given
to it. While the keeping of the public revenue in a separate and
independent treasury and of collecting it in gold and silver will have a
salutary influence on the system of paper credit with which all banks
are connected, and thus aid those that are sound and well managed, it
will at the same time sensibly check such as are otherwise by at once
withholding the means of extravagance afforded by the public funds and
restraining them from excessive issues of notes which they would be
constantly called upon to redeem.

I am aware it has been urged that this control may be best attained and
exerted by means of a national bank. The constitutional objections which
I am well known to entertain would prevent me in any event from
proposing or assenting to that remedy; but in addition to this, I can
not after past experience bring myself to think that it can any longer
be extensively regarded as effective for such a purpose. The history of
the late national bank, through all its mutations, shows that it was not
so. On the contrary, it may, after a careful consideration of the
subject, be, I think, safely stated that at every period of banking
excess it took the lead; that in 1817 and 1818, in 1823, in 1831, and in
1834 its vast expansions, followed by distressing contractions, led to
those of the State institutions. It swelled and maddened the tides of
the banking system, but seldom allayed or safely directed them. At a few
periods only was a salutary control exercised, but an eager desire, on
the contrary, exhibited for profit in the first place; and if afterwards
its measures were severe toward other institutions, it was because its
own safety compelled it to adopt them. It did not differ from them in
principle or in form; its measures emanated from the same spirit of
gain; it felt the same temptation to overissues; it suffered from and
was totally unable to avert those inevitable laws of trade by which it
was itself affected equally with them; and at least on one occasion, at
an early day, it was saved only by extraordinary exertions from the same
fate that attended the weakest institution it professed to supervise. In
1837 it failed equally with others in redeeming its notes (though the
two years allowed by its charter for that purpose had not expired), a
large amount of which remains to the present time outstanding. It is
true that, having so vast a capital and strengthened by the use of all
the revenues of the Government, it possessed more power; but while it
was itself by that circumstance freed from the control which all banks
require, its paramount object and inducement were left the same--to make
the most for its stockholders, not to regulate the currency of the
country. Nor has it, as far as we are advised, been found to be greatly
otherwise elsewhere. The national character given to the Bank of England
has not prevented excessive fluctuations in their currency, and it
proved unable to keep off a suspension of specie payments, which lasted
for nearly a quarter of a century. And why should we expect it to be
otherwise? A national institution, though deriving its charter from a
different source than the State banks, is yet constituted upon the same
principles, is conducted by men equally exposed to temptation, and is
liable to the same disasters, with the additional disadvantage that its
magnitude occasions an extent of confusion and distress which the
mismanagement of smaller institutions could not produce. It can scarcely
be doubted that the recent suspension of the United State Bank of
Pennsylvania, of which the effects are felt not in that State alone, but
over half the Union, had its origin in a course of business commenced
while it was a national institution, and there is no good reason for
supposing that the same consequences would not have followed had it
still derived its powers from the General Government. It is in vain,
when the influences and impulses are the same, to look for a difference
in conduct or results. By such creations we do, therefore, but increase
the mass of paper credit and paper currency, without checking their
attendant evils and fluctuations. The extent of power and the efficiency
of organization which we give, so far from being beneficial, are in
practice positively injurious. They strengthen the chain of dependence
throughout the Union, subject all parts more certainly to common
disaster, and bind every bank more effectually in the first instance to
those of our commercial cities, and in the end to a foreign power. In a
word, I can not but believe that, with the full understanding of the
operations of our banking system which experience has produced, public
sentiment is not less opposed to the creation of a national bank for
purposes connected with currency and commerce than for those connected
with the fiscal operations of the Government.

Yet the commerce and currency of the country are suffering evils from
the operations of the State banks which can not and ought not to be
overlooked. By their means we have been flooded with a depreciated
paper, which it was evidently the design of the framers of the
Constitution to prevent when they required Congress to "Coin money and
regulate the value of foreign coins," and when they forbade the States
"to coin money, emit bills of credit, make anything but gold and silver
a tender in payment of debts," or "pass any law impairing the obligation
of contracts." If they did not guard more explicitly against the present
state of things, it was because they could not have anticipated that the
few banks then existing were to swell to an extent which would expel to
so great a degree the gold and silver for which they had provided from
the channels of circulation, and fill them with a currency that defeats
the objects they had in view. The remedy for this must chiefly rest with
the States from whose legislation it has sprung. No good that might
accrue in a particular case front the exercise of powers not obviously
conferred on the General Government would authorize its interference or
justify a course that might in the slightest degree increase at the
expense of the States the power of the Federal authorities; nor do I
doubt that the States will apply the remedy. Within the last few years
events have appealed to them too strongly to be disregarded. They have
seen that the Constitution, though theoretically adhered to, is
subverted in practice; that while on the statute books there is no legal
tender but gold and silver, no law impairing the obligations of
contracts, yet that in point of fact the privileges conferred on banking
corporations have made their notes the currency of the country; that the
obligations imposed by these notes are violated under the impulses of
interest or convenience, and that the number and power of the persons
connected with these corporations or placed under their influence give
them a fearful weight when their interest is in opposition to the spirit
of the Constitution and laws. To the people it is immaterial whether
these results are produced by open violations of the latter or by the
workings of a system of which the result is the same. An inflexible
execution even of the existing statutes of most of the States would
redress many evils now endured, would effectually show the banks the
dangers of mismanagement which impunity encourages them to repeat, and
would teach all corporations the useful lesson that they are the
subjects of the law and the servants of the people. What is still
wanting to effect these objects must be sought in additional
legislation, or, if that be inadequate, in such further constitutional
grants or restrictions as may bring us back into the path from which we
have so widely wandered.

In the meantime it is the duty of the General Government to cooperate
with the States by a wise exercise of its constitutional powers and the
enforcement of its existing laws. The extent to which it may do so by
further enactments I have already adverted to, and the wisdom of
Congress may yet enlarge them. But above all, it is incumbent upon us to
hold erect the principles of morality and law, constantly executing our
own contracts in accordance with the provisions of the Constitution, and
thus serving as a rallying point by which our whole country may be
brought back to that safe and honored standard.

Our people will not long be insensible to the extent of the burdens
entailed upon them by the false system that has been operating on their
sanguine, energetic, and industrious character, nor to the means
necessary to extricate themselves from these embarrassments. The weight
which presses upon a large portion of the people and the States is an
enormous debt, foreign and domestic. The foreign debt of our States,
corporations, and men of business can scarcely be less than
$200,000,000, requiring more than $10,000,000 a year to pay the
interest. This sum has to be paid out of the exports of the country, and
must of necessity cut off imports to that extent or plunge the country
more deeply in debt from year to year. It is easy to see that the
increase of this foreign debt must augment the annual demand on the
exports to pay the interest, and to the same extent diminish the
imports, and in proportion to the enlargement of the foreign debt and
the consequent increase of interest must be the decrease of the import
trade. In lieu of the comforts which it now brings us we might have our.
gigantic banking institutions and splendid, but in many instances
profitless, railroads and canals absorbing to a great extent in interest
upon the capital borrowed to construct them the surplus fruits of
national industry for years to come, and securing to posterity no
adequate return for the comforts which the labors of their hands might
otherwise have secured. It is not by the increase of this debt that
relief is to be sought, but in its diminution. Upon this point there is,
I am happy to say, hope before us; not so much in the return of
confidence abroad, which will enable the States to borrow more money, as
in a change of public feeling at home, which prompts our people to pause
in their career and think of the means by which debts are to be paid
before they are contracted. If we would escape embarrassment, public and
private, we must cease to run in debt except for objects of necessity or
such as will yield a certain return. Let the faith of the States,
corporations, and individuals already pledged be kept with the most
punctilious regard. It is due to our national character as well as to
justice that this should on the part of each be a fixed principle of
conduct. But it behooves us all to be more chary in pledging it
hereafter. By ceasing to run in debt and applying the surplus of our
crops and incomes to the discharge of existing obligations, buying less
and selling more, and managing all affairs, public and private, with
strict economy and frugality, we shall see our country soon recover from
a temporary depression, arising not from natural and permanent causes,
but from those I have enumerated, and advance with renewed vigor in her
career of prosperity.

Fortunately for us at this moment, when the balance of trade is greatly
against us and the difficulty of meeting it enhanced by the disturbed
state of our money affairs, the bounties of Providence have come to
relieve us from the consequences of past errors. A faithful application
of the immense results of the labors of the last season will afford
partial relief for the present, and perseverance in the same course will
in due season accomplish the rest. We have had full experience in times
past of the extraordinary results which can in this respect be brought
about in a short period by the united and well-directed efforts of a
community like ours. Our surplus profits, the energy and industry of our
population, and the wonderful advantages which Providence has bestowed
upon our country in its climate, its various productions, indispensable
to other nations, will in due time afford abundant means to perfect the
most useful of those objects for which the States have been plunging
themselves of late in embarrassment and debt, without imposing on
ourselves or our children such fearful burdens.

But let it be indelibly engraved on our minds that relief is not to be
found in expedients. Indebtedness can not be lessened by borrowing more
money or by changing the form of the debt. The balance of trade is not
to be turned in our favor by creating new demands upon us abroad. Our
currency can not be improved by the creation of new banks or more issues
from those which now exist. Although these devices sometimes appear to
give temporary relief, they almost invariably aggravate the evil in the
end. It is only by retrenchment and reform--by curtailing public and
private expenditures, by paying our debts, and by reforming our banking
system--that we are to expect effectual relief, security for the future,
and an enduring prosperity. In shaping the institutions and policy of
the General Government so as to promote as far as it can with its
limited powers these important ends, you may rely on my most cordial
cooperation.

That there should have been in the progress of recent events doubts in
many quarters and in some a heated opposition to every change can not
surprise us. Doubts are properly attendant on all reform, and it is
peculiarly in the nature of such abuses as we are now encountering to
seek to perpetuate their power by means of the influence they have been
permitted to acquire. It is their result, if not their object, to gain
for the few an ascendency over the many by securing to them a monopoly
of the currency, the medium through which most of the wants of mankind
are supplied; to produce throughout society a chain of dependence which
leads all classes to look to privileged associations for the means of
speculation and extravagance; to nourish, in preference to the manly
virtues that give dignity to human nature, a craving desire for
luxurious enjoyment and sudden wealth, which renders those who seek them
dependent on those who supply them; to substitute for republican
simplicity and economical habits a sickly appetite for effeminate
indulgence and an imitation of that reckless extravagance which
impoverished and enslaved the industrious people of foreign lands, and
at last to fix upon us, instead of those equal political rights the
acquisition of which was alike the object and supposed reward of our
Revolutionary struggle, a system of exclusive privileges conferred by
partial legislation. To remove the influences which had thus gradually
grown up among us, to deprive them of their deceptive advantages, to
test them by the light of wisdom and truth, to oppose the force which
they concentrate in their sup-port--all this was necessarily the work of
time, even among a people so enlightened and pure as that of the United
States. In most other countries, perhaps, it could only be accomplished
through that series of revolutionary movements which are too often found
necessary to effect any great and radical reform; but it is the crowning
merit of our institutions that they create and nourish in the vast
majority of our people a disposition and a power peaceably to remedy
abuses which have elsewhere caused the effusion of rivers of blood and
the sacrifice of thousands of the human race. The result thus far is
most honorable to the self-denial, the intelligence, and the patriotism
of our citizens; it justifies the confident hope that they will carry
through the reform which has been so well begun, and that they will go
still further than they have yet gone in illustrating the important
truth that a people as free and enlightened as ours will, whenever it
becomes necessary, show themselves to be indeed capable of
self-government by voluntarily adopting appropriate remedies for every
abuse, and submitting to temporary sacrifices, however great, to insure
their permanent welfare.

My own exertions for the furtherance of these desirable objects have
been bestowed throughout my official career with a zeal that is
nourished by ardent wishes for the welfare of my country, and by an
unlimited reliance on the wisdom that marks its ultimate decision on all
great and controverted questions. Impressed with the solemn obligations
imposed upon me by the Constitution, desirous also of laying before my
fellow-citizens, with whose confidence and support I have been so highly
honored, such measures as appear to me conducive to their prosperity,
and anxious to submit to their fullest consideration the grounds upon
which my opinions are formed, I have on this as on preceding occasions
freely offered my views on those points of domestic policy that seem at
the present time most prominently to require the action of the
Government. I know that they will receive from Congress that full and
able consideration which the importance of the subjects merits, and I
can repeat the assurance heretofore made that I shall cheerfully and
readily cooperate with you in every measure that will tend to promote
the welfare of the Union.

M. VAN BUREN

***

State of the Union Address
Martin van Buren
December 5, 1840

Fellow-Citizens of the Senate and House of Representatives:

Our devout gratitude is due to the Supreme Being for having graciously
continued to our beloved country through the vicissitudes of another
year the invaluable blessings of health, plenty, and peace. Seldom has
this favored land been so generally exempted from the ravages of disease
or the labor of the husbandman more amply rewarded, and never before
have our relations with other countries been placed on a more favorable
basis than that which they so happily occupy at this critical
conjuncture in the affairs of the world. A rigid and persevering
abstinence from all interference with the domestic and political
relations of other States, alike due to the genius and distinctive
character of our Government and to the principles by which it is
directed; a faithful observance in the management of our foreign
relations of the practice of speaking plainly, dealing justly, and
requiring truth and justice in return as the best conservatives of the
peace of nations; a strict impartiality in our manifestations of
friendship in the commercial privileges we concede and those we require
from others--these, accompanied by a disposition as prompt to maintain
in every emergency our own rights as we are from principle averse to the
invasion of those of others, have given to our country and Government a
standing in the great family of nations of which we have just cause to
be proud and the advantages of which are experienced by our citizens
throughout every portion of the earth to which their enterprising and
adventurous spirit may carry them. Few, if any, remain insensible to the
value of our friendship or ignorant of the terms on which it can be
acquired and by which it can alone be preserved.

A series of questions of long standing, difficult in their adjustment
and important in their consequences, in which the rights of our citizens
and the honor of the country were deeply involved, have in the course of
a few years (the most of them during the successful Administration of my
immediate predecessor) been brought to a satisfactory conclusion; and
the most important of those remaining are, I am happy to believe, in a
fair way of being speedily and satisfactorily adjusted.

With all the powers of the world our relations are those of honorable
peace. Since your adjournment nothing serious has occurred to interrupt
or threaten this desirable harmony. If clouds have lowered above the
other hemisphere, they have not cast their portentous shadows upon our
happy shores. Bound by no entangling alliances, yet linked by a common
nature and interest with the other nations of mankind, our aspirations
are for the preservation of peace, in whose solid and civilizing
triumphs all may participate with a generous emulation. Yet it behooves
us to be prepared for any event and to be always ready to maintain those
just and enlightened principles of national intercourse for which this
Government has ever contended. In the shock of contending empires it is
only by assuming a resolute bearing and clothing themselves with
defensive armor that neutral nations can maintain their independent
rights.

The excitement which grew out of the territorial controversy between the
United States and Great Britain having in a great measure subsided, it
is hoped that a favorable period is approaching for its final
settlement. Both Governments must now be convinced of the dangers with
which the question is fraught, and it must be their desire, as it is
their interest, that this perpetual cause of irritation should be
removed as speedily as practicable. In my last annual message you were
informed that the proposition for a commission of exploration and survey
promised by Great Britain had been received, and that a counter project,
including also a provision for the certain and final adjustment of the
limits in dispute, was then before the British Government for its
consideration. The answer of that Government, accompanied by additional
propositions of its own, was received through its minister here since
your separation. These were promptly considered, such as were deemed
correct in principle and consistent with a due regard to the just rights
of the United States and of the State of Maine concurred in, and the
reasons for dissenting from the residue, with an additional suggestion
on our part, communicated by the Secretary of State to Mr. Fox. That
minister, not feeling himself sufficiently instructed upon some of the
points raised in the discussion, felt it to be his duty to refer the
matter to his own Government for its further decision. Having now been
for some time under its advisement, a speedy answer may be confidently
expected. From the character of the points still in difference and the
undoubted disposition of both parties to bring the matter to an early
conclusion, I look with entire confidence to a prompt and satisfactory
termination of the negotiation. Three commissioners were appointed
shortly after the adjournment of Congress under the act of the last
session providing for the exploration and survey of the line which
separates the States of Maine and New Hampshire from the British
Provinces. They have been actively employed until their progress was
interrupted by the inclemency of the season, and will resume their
labors as soon as practicable in the ensuing year.

It is understood that their respective examinations will throw new light
upon the subject in controversy and serve to remove any erroneous
impressions which may have been made elsewhere prejudicial to the rights
of the United States. It was, among other reasons, with a view of
preventing the embarrassments which in our peculiar system of government
impede and complicate negotiations involving the territorial rights of a
State that I thought it my duty, as you have been informed on a previous
occasion, to propose to the British Government, through its minister at
Washington, that early steps should be taken to adjust the points of
difference on the line of boundary from the entrance of Lake Superior to
the most northwestern point of the Lake of the Woods by the arbitration
of a friendly power in conformity with the seventh article of the treaty
of Ghent. No answer has yet been returned by the British Government to
this proposition.

With Austria, France, Prussia, Russia, and the remaining powers of
Europe I am happy to inform you our relations continue to be of the most
friendly character. With Belgium a treaty of commerce and navigation,
based upon liberal principles of reciprocity and equality, was concluded
in March last, and, having been ratified by the Belgian Government, will
be duly laid before the Senate. It is a subject of congratulation that
it provides for the satisfactory adjustment of a long-standing question
of controversy, thus removing the only obstacle which could obstruct the
friendly and mutually advantageous intercourse between the two nations.
A messenger has been dispatched with the Hanoverian treaty to Berlin,
where, according to stipulation, the ratifications are to be exchanged.
I am happy to announce to you that after many delays and difficulties a
treaty of commerce and navigation between the United States and Portugal
was concluded and signed at Lisbon on the 26th of August last by the
plenipotentiaries of the two Governments. Its stipulations are founded
upon those principles of mutual liberality and advantage which the
United States have always sought to make the basis of their intercourse
with foreign powers, and it is hoped they will tend to foster and
strengthen the commercial intercourse of the two countries.

Under the appropriation of the last session of Congress an agent has
been sent to Germany for the purpose of promoting the interests of our
tobacco trade.

The commissioners appointed under the convention for the adjustment of
claims of citizens of the United States upon Mexico having met and
organized at Washington in August last, the papers in the possession of
the Government relating to those claims were communicated to the board.
The claims not embraced by that convention are now the subject of
negotiation between the two Governments through the medium of our
minister at Mexico.

Nothing has occurred to disturb the harmony of our relations with the
different Governments of South America. I regret, however, to be obliged
to inform you that the claims of our citizens upon the late Republic of
Colombia have not yet been satisfied by the separate Governments into
which it has been resolved.

The charge d'affaires of Brazil having expressed the intention of his
Government not to prolong the treaty of 1828, it will cease to be
obligatory upon either party on the 12th day of December, 1841, when the
extensive commercial intercourse between the United States and that vast
Empire will no longer be regulated by express stipulations.

It affords me pleasure to communicate to you that the Government of
Chili has entered into an agreement to indemnify the claimants in the
case of the Macectonian for American property seized in 1819, and to add
that information has also been received which justifies the hope of an
early adjustment of the remaining claims upon that Government.

The commissioners appointed in pursuance of the convention between the
United States and Texas for marking the boundary between them have,
according to the last report received from our commissioner, surveyed
and established the whole extent of the boundary north along the western
bank of the Sabine River from its entrance into the Gulf of Mexico to
the thirty-second degree of north latitude. The commission adjourned on
the 16th of June last, to reassemble on the 1st of November for the
purpose of establishing accurately the intersection of the thirty-second
degree of latitude with the western bank of the Sabine and the meridian
line thence to Red River. It is presumed that the work will be concluded
in the present season.

The present sound condition of their finances and the success with which
embarrassments in regard to them, at times apparently insurmountable,
have been overcome are matters upon which the people and Government of
the United States may well congratulate themselves. An overflowing
Treasury, however it may be regarded as an evidence of public
prosperity, is seldom conducive to the permanent welfare of any people,
and experience has demonstrated its incompatibility with the salutary
action of political institutions like those of the United States. Our
safest reliance for financial efficiency and independence has, on the
contrary, been found to consist in ample resources unencumbered with
debt, and in this respect the Federal Government occupies a singularly
fortunate and truly enviable position.

When I entered upon the discharge of my official duties in March, 1837,
the act for the distribution of the surplus revenue was in a course of
rapid execution. Nearly $28,000,000 of the public moneys were, in
pursuance of its provisions, deposited with the States in the months of
January, April, and July of that year. In May there occurred a general
suspension of specie payments by the banks, including, with very few
exceptions, those in which the public moneys were deposited and upon
whose fidelity the Government had unfortunately made itself dependent
for the revenues which had been collected from the people and were
indispensable to the public service.

This suspension and the excesses in banking and commerce out of which it
arose, and which were greatly aggravated by its occurrence, made to a
great extent unavailable the principal part of the public money then on
hand, suspended the collection of many millions accruing on merchants'
bonds, and greatly reduced the revenue arising from customs and the
public lands. These effects have continued to operate in various degrees
to the present period, and in addition to the decrease in the revenue
thus produced two and a half millions of duties have been relinquished
by two biennial reductions under the act of 1833, and probably as much
more upon the importation of iron for railroads by special legislation.

Whilst such has been our condition for the last four years in relation
to revenue, we have during the same period been subjected to an
unavoidable continuance of large extraordinary expenses necessarily
growing out of past transactions, and which could not be immediately
arrested without great prejudice to the public interest. Of these, the
charge upon the Treasurer in consequence of the Cherokee treaty alone,
without adverting to others arising out of Indian treaties, has already
exceeded $5,000,000; that for the prosecution of measures for the
removal of the Seminole Indians, which were found in progress, has been
nearly fourteen millions, and the public buildings have required the
unusual sum of nearly three millions.

It affords me, however, great pleasure to be able to say that from the
commencement of this period to the present day every demand upon the
Government, at home or abroad, has been promptly met. This has been done
not only without creating a permanent debt or a resort to additional
taxation in any form, but in the midst of a steadily progressive
reduction of existing burdens upon the people, leaving still a
considerable balance of available funds which will remain in the
Treasury at the end of the year. The small amount of Treasury notes, not
exceeding $4,500,000, still outstanding, and less by twenty-three
millions than the United States have in deposit with the States, is
composed of such only as are not yet due or have not been presented for
payment. They may be redeemed out of the accruing revenue if the
expenditures do not exceed the amount within which they may, it is
thought, be kept without prejudice to the public interest, and the
revenue shall prove to be as large as may justly be anticipated.

Among the reflections arising from the contemplation of these
circumstances, one, not the least gratifying, is the consciousness that
the Government had the resolution and the ability to adhere in every
emergency to the sacred obligations of law, to execute all its contracts
according to the requirements of the Constitution, and thus to present
when most needed a rallying point by which the business of the whole
country might be brought back to a safe and unvarying standard--a result
vitally important as well to the interests as to the morals of the
people. There can surely now be no difference of opinion in regard to
the incalculable evils that would have arisen if the Government at that
critical moment had suffered itself to be deterred from upholding the
only true standard of value, either by the pressure of adverse
circumstances or the violence of unmerited denunciation. The manner in
which the people sustained the performance of this duty was highly
honorable to their fortitude and patriotism. It can not fail to
stimulate their agents to adhere under all circumstances to the line of
duty and to satisfy them of the safety with which a course really right
and demanded by a financial crisis may in a community like ours be
pursued, however apparently severe its immediate operation.

The policy of the Federal Government in extinguishing as rapidly as
possible the national debt, and subsequently in resisting every
temptation to create a new one, deserves to be regarded in the same
favorable light. Among the many objections to a national debt, the
certain tendency of public securities to concentrate ultimately in the
coffers of foreign stockholders is one which is every day gathering
strength. Already have the resources of many of the States and the
future industry of their citizens been indefinitely mortgaged to the
subjects of European Governments to the amount of twelve millions
annually to pay the constantly accruing interest on borrowed money--a
sum exceeding half the ordinary revenues of the whole United States. The
pretext which this relation affords to foreigners to scrutinize the
management of our domestic affairs, if not actually to intermeddle with
them, presents a subject for earnest attention, not to say of serious
alarm. Fortunately, the Federal Government, with the exception of an
obligation entered into in behalf of the District of Columbia, which
must soon be discharged, is wholly exempt from any such embarrassment.
It is also, as is believed, the only Government which, having fully and
faithfully paid all its creditors, has also relieved itself entirely
from debt. To maintain a distinction so desirable and so honorable to
our national character should be an object of earnest solicitude. Never
should a free people, if it be possible to avoid it, expose themselves
to the necessity of having to treat of the peace, the honor, or the
safety of the Republic with the governments of foreign creditors, who,
however well disposed they may be to cultivate with us in general
friendly relations, are nevertheless by the law of their own condition
made hostile to the success and permanency of political institutions
like ours. Most humiliating may be the embarrassments consequent upon
such a condition. Another objection, scarcely less formidable, to the
commencement of a new debt is its inevitable tendency to increase in
magnitude and to foster national extravagance. He has been an
unprofitable observer of events who needs at this day to be admonished
of the difficulties which a government habitually dependent on loans to
sustain its ordinary expenditures has to encounter in resisting the
influences constantly exerted in favor of additional loans; by
capitalists, who enrich themselves by government securities for amounts
much exceeding the money they actually advance--a prolific source of
individual aggrandizement in all borrowing countries; by stockholders,
who seek their gains in the rise and fall of public stocks; and by the
selfish importunities of applicants for appropriations for works
avowedly for the accommodation of the public, but the real objects of
which are too frequently the advancement of private interests. The known
necessity which so many of the States will be under to impose taxes for
the payment of the interest on their debts furnishes an additional and
very cogent reason why the Federal Governments should refrain from
creating a national debt, by which the people would be exposed to double
taxation for a similar object. We possess within ourselves ample
resources for every emergency, and we may be quite sure that our
citizens in no future exigency will be unwilling to supply the
Government with all the means asked for the defense of the country. In
time of peace there can, at all events, be no justification for the
creation of a permanent debt by the Federal Government. Its limited
range of constitutional duties may certainly under such circumstances be
performed without such a resort. It has, it is seen, been avoided during
four years of greater fiscal difficulties than have existed in a similar
period since the adoption of the Constitution, and one also remarkable
for the occurrence of extraordinary causes of expenditures.

But to accomplish so desirable an object two things are indispensable:
First, that the action of the Federal Government be kept within the
boundaries prescribed by its founders, and, secondly, that all
appropriations for objects admitted to be constitutional, and the
expenditure of them also, be subjected to a standard of rigid but
well-considered and practical economy. The first depends chiefly on the
people themselves--the opinions they form of the true construction of
the Constitution and the confidence they repose in the political
sentiments of those they select as their representatives in the Federal
Legislature; the second rests upon the fidelity with which their more
immediate representatives and other public functionaries discharge the
trusts committed to them. The duty of economizing the expenses of the
public service is admitted on all hands; yet there are few subjects upon
which there exists a wider difference of opinion than is constantly
manifested in regard to the fidelity with which that duty is discharged.
Neither diversity of sentiment nor even mutual recriminations upon a
point in respect to which the public mind is so justly sensitive can
well be entirely avoided, and least so at periods of great political
excitement. An intelligent people, however, seldom fail to arrive in the
end at correct conclusions in such a matter. Practical economy in the
management of public affairs can have no adverse influence to contend
with more powerful than a large surplus revenue, and the unusually large
appropriations for 1837 may without doubt, independently of the
extraordinary requisitions for the public service growing out of the
state of our Indian relations, be in no inconsiderable degree traced to
this source. The sudden and rapid distribution of the large surplus then
in the Treasury and the equally sudden and unprecedentedly severe
revulsion in the commerce and business of the country, pointing with
unerring certainty to a great and protracted reduction of the revenue,
strengthened the propriety of the earliest practicable reduction of the
public expenditures.

But to change a system operating upon so large a surface and applicable
to such numerous and diversified interests and objects was more than the
work of a day. The attention of every department of the Government was
immediately and in good faith directed to that end, and has been so
continued to the present moment. The estimates and appropriations for
the year 1838 (the first over which I had any control) were somewhat
diminished. The expenditures of 1839 were reduced $6,000,000. Those of
1840, exclusive of disbursements for public debt and trust claims, will
probably not exceed twenty-two and a half millions, being between two
and three millions less than those of the preceding year and nine or ten
millions less than those of 1837. Nor has it been found necessary in
order to produce this result to resort to the power conferred by
Congress of postponing certain classes of the public works, except by
deferring expenditures for a short period upon a limited portion of
them, and which postponement terminated some time since--at the moment
the Treasury Department by further receipts from the indebted banks
became fully assured of its ability to meet them without prejudice to
the public service in other respects. Causes are in operation which
will, it is believed, justify a still further reduction without injury
to any important national interest. The expenses of sustaining the
troops employed in Florida have been gradually and greatly reduced
through the persevering efforts of the War Department, and a reasonable
hope may be entertained that the necessity for military operations in
that quarter will soon cease. The removal of the Indians from within our
settled borders is nearly completed. The pension list, one of the
heaviest charges upon the Treasury, is rapidly diminishing by death. The
most costly of our public buildings are either finished or nearly so,
and we may, I think, safely promise ourselves a continued exemption from
border difficulties.

The available balance in the Treasury on the 1st of January next is
estimated at $ 1,500,000. This sum, with the expected receipts from all
sources during the next year, will, it is believed, be sufficient to
enable the Government to meet every engagement and have a suitable
balance, in the Treasury at the end of the year, if the remedial
measures connected with the customs and the public lands heretofore
recommended are adopted and the new appropriations by Congress shall not
carry the expenditures beyond the official estimates.

The new system established by Congress for the safe-keeping of the
public money, prescribing the kind of currency to be received for the
public revenue and providing additional guards and securities against
losses, has now been several mouths in operation. Although it might be
premature upon an experience of such limited duration to form a definite
opinion in regard to the extent of its influences in correcting many
evils under which the Federal Government and the country have hitherto
suffered, especially those that have grown out of banking expansions, a
depreciated currency, and official defalcations, yet it is but right to
say that nothing has occurred in the practical operation of the system
to weaken in the slightest degree, but much to strengthen, the confident
anticipations of its friends. The grounds of these have been heretofore
so fully explained as to require no recapitulation. In respect to the
facility and convenience it affords in conducting the public service,
and the ability of the Government to discharge through its agency every
duty attendant on the collection, transfer, and disbursement of the
public money with promptitude and success, I can say with confidence
that the apprehensions of those who felt it to be their duty to oppose
its adoption have proved to be unfounded. On the contrary, this branch
of the fiscal affairs of the Government has been, and it is believed may
always be, thus carried on with every desirable facility and security. A
few changes and improvements in the details of the system, without
affecting any principles involved in it, will be submitted to you by the
Secretary of the Treasury, and will, I am sure, receive at your hands
that attention to which they may on examination be found to be entitled.

I have deemed this brief summary of our fiscal affairs necessary to the
due performance of a duty specially enjoined upon me by the
Constitution. It will serve also to illustrate more fully the principles
by which I have been guided in reference to two contested points in our
public policy which were earliest in their development and have been
more important in their consequences than any that have arisen under our
complicated and difficult, yet admirable, system of government. I allude
to a national debt and a national bank. It was in these that the
political contests by which the country has been agitated ever since the
adoption of the Constitution in a great measure originated, and there is
too much reason to apprehend that the conflicting interests and opposing
principles thus marshaled will continue as heretofore to produce similar
if not aggravated consequences. Coming into office the declared enemy of
both, I have earnestly endeavored to prevent a resort to either.

The consideration that a large public debt affords an apology, and
produces in some degree a necessity also, for resorting to a system and
extent of taxation which is not only oppressive throughout, but is
likewise so apt to lead in the end to the commission of that most odious
of all offenses against the principles of republican government, the
prostitution of political power, conferred for the general benefit, to
the aggrandizement of particular classes and the gratification of
individual cupidity, is alone sufficient, independently of the weighty
objections which have already been urged, to render its creation and
existence the sources of bitter and unappeasable discord. If we add to
this its inevitable tendency to produce and foster extravagant
expenditures of the public moneys, by which a necessity is created for
new loans and new burdens on the people, and, finally, refer to the
examples of every government which has existed for proof, how seldom it
is that the system, when once adopted and implanted in the policy of a
country, has failed to expand itself until public credit was exhausted
and the people were no longer able to endure its increasing weight, it
seems impossible to resist the conclusion that no benefits resulting
from its career, no extent of conquest, no accession of wealth to
particular classes, nor any nor all its combined advantages, can
counterbalance its ultimate but certain results--a splendid government
and an impoverished people.

If a national bank was, as is undeniable, repudiated by the framers of
the Constitution as incompatible with the rights of the States and the
liberties of the people; if from the beginning it has been regarded by
large portions of our citizens as coming in direct collision with that
great and vital amendment of the Constitution which declares that all
powers not conferred by that instrument on the General Government are
reserved to the States and to the people; if it has been viewed by them
as the first great step in the march of latitudinous construction, which
unchecked would render that sacred instrument of as little value as an
unwritten constitution, dependent, as it would alone be, for its meaning
on the interested interpretation of a dominant party, and affording no
security to the rights of the minority--if such is undeniably the case,
what rational grounds could have been conceived for anticipating aught
but determined opposition to such an institution at the present day.

Could a different result have been expected when the consequences which
have flowed from its creation, and particularly from its struggles to
perpetuate its existence, had confirmed in so striking a manner the
apprehensions of its earliest opponents; when it had been so clearly
demonstrated that a concentrated money power, wielding so vast a capital
and combining such incalculable means of influence, may in those
peculiar conjunctures to which this Government is unavoidably exposed
prove an overmatch for the political power of the people themselves;
when the true character of its capacity to regulate according to its
will and its interests and the interests of its favorites the value and
production of the labor and property of every man in this extended
country had been so fully and fearfully developed; when it was notorious
that all classes of this great community had, by means of the power and
influence it thus possesses, been infected to madness with a spirit of
heedless speculation; when it had been seen that, secure in the support
of the combination of influences by which it was surrounded, it could
violate its charter and set the laws at defiance with impunity; and
when, too, it had become most apparent that to believe that such an
accumulation of powers can ever be granted without the certainty of
being abused was to indulge in a fatal delusion?

To avoid the necessity of a permanent debt and its inevitable
consequences I have advocated and endeavored to carry into effect the
policy of confining the appropriations for the public service to such
objects only as are clearly within the constitutional authority of the
Federal Government; of excluding from its expenses those improvident and
unauthorized grants of public money for works of internal improvement
which were so wisely arrested by the constitutional interposition of my
predecessor, and which, if they had not been so checked, would long
before this time have involved the finances of the General Government in
embarrassments far greater than those which are now experienced by any
of the States; of limiting all our expenditures to that simple,
unostentatious, and economical administration of public affairs which is
alone consistent with the character of our institutions; of collecting
annually from the customs, and the sales of public lands a revenue fully
adequate to defray all the expenses thus incurred; but under no pretense
whatsoever to impose taxes upon the people to a greater amount than was
actually necessary to the public service conducted upon the principles I
have stated.

In lieu of a national bank or a dependence upon banks of any description
for the management of our fiscal affairs, I recommended the adoption of
the system which is now in successful operation. That system affords
every requisite facility for the transaction of the pecuniary concerns
of the Government; will, it is confidently anticipated, produce in other
respects many of the benefits which have been from time to time expected
from the creation of a national bank, but which have never been
realized; avoid the manifold evils inseparable from such an institution;
diminish to a greater extent than could be accomplished by any other
measure of reform the patronage of the Federal Government--a wise policy
in all governments, but more especially so in one like ours, which works
well only in proportion as it is made to rely for its support upon the
unbiased and unadulterated opinions of its constituents; do away forever
all dependence on corporate bodies either in the raising, collecting,
safekeeping, or disbursing the public revenues, and place the Government
equally above the temptation of fostering a dangerous and
unconstitutional institution at home or the necessity of adapting its
policy to the views and interests of a still more formidable money power
abroad.

It is by adopting and carrying out these principles under circumstances
the most arduous and discouraging that the attempt has been made, thus
far successfully, to demonstrate to the people of the United States that
a national bank at all times, and a national debt except it be incurred
at a period when the honor and safety of the nation demand the temporary
sacrifice of a policy which should only be abandoned in such exigencies,
are not merely unnecessary, but in direct and deadly hostility to the
principles of their Government and to their own permanent welfare.

The progress made in the development of these positions appears in the
preceding sketch of the past history and present state of the financial
concerns of the Federal Government. The facts there stated fully
authorize the assertion that all the purposes for which this Government
was instituted have been accomplished during four years of greater
pecuniary embarrassment than were ever before experienced in time of
peace, and in the face of opposition as formidable as any that was ever
before arrayed against the policy of an Administration; that this has
been done when the ordinary revenues of the Government were generally
decreasing as well from the operation of the laws as the condition of
the country, without the creation of a permanent public debt or
incurring any liability other than such as the ordinary resources of the
Government will speedily discharge, and without the agency of a national
bank.

If this view of the proceedings of the Government for the period it
embraces be warranted by the facts as they are known to exist; if the
Army and Navy have been sustained to the full extent authorized by law,
and which Congress deemed sufficient for the defense of the country and
the protection of its rights and its honor; if its civil and diplomatic
service has been equally sustained; if ample provision has been made for
the administration of justice and the execution of the laws; if the
claims upon public gratitude in behalf of the soldiers of the Revolution
have been promptly met and faithfully discharged; if there have been no
failures in defraying the very large expenditures growing out of that
long-continued and salutary policy of peacefully removing the Indians to
regions of comparative safety and prosperity; if the public faith has at
all times and everywhere been most scrupulously maintained by a prompt
discharge of the numerous, extended, and diversified claims on the
Treasury--if all these great and permanent objects, with many others
that might be stated, have for a series of years, marked by peculiar
obstacles and difficulties, been successfully accomplished without a
resort to a permanent debt or the aid of a national bank, have we not a
right to expect that a policy the object of which has been to sustain
the public service independently of either of these fruitful sources of
discord will receive the final sanction of a people whose unbiased and
fairly elicited judgment upon public affairs is never ultimately wrong?

That embarrassments in the pecuniary concerns of individuals of
unexampled extent and duration have recently existed in this as in other
commercial nations is undoubtedly true. To suppose it necessary now to
trace these reverses to their sources would be a reflection on the
intelligence of my fellow-citizens. Whatever may have been the obscurity
in which the subject was involved during the earlier stages of the
revulsion, there can not now be many by whom the whole question is not
fully understood.

Not deeming it within the constitutional powers of the General
Government to repair private losses sustained by reverses in business
having no connection with the public service, either by direct
appropriations from the Treasury or by special legislation designed to
secure exclusive privileges and immunities to individuals or classes in
preference to or at the expense of the great majority necessarily
debarred from any participation in them, no attempt to do so has been
either made, recommended, or encouraged by the present Executive.

It is believed, however, that the great purposes for the attainment of
which the Federal Government was instituted have not been lost sight of.
Intrusted only with certain limited powers, cautiously enumerated,
distinctly specified, and defined with a precision and clearness which
would seem to defy misconstruction, it has been my constant aim to
confine myself within the limits so clearly marked out and so carefully
guarded. Having always been of opinion that the best preservative of the
union of the States is to be found in a total abstinence from the
exercise of all doubtful powers on the part of the Federal Government
rather than in attempts to assume them by a loose construction of the
Constitution or an ingenious perversion of its words, I have endeavored
to avoid recommending any measure which I had reason to apprehend would,
in the opinion even of a considerable minority of my fellow-citizens, be
regarded as trenching on the rights of the States or the provisions of
the hallowed instrument of our Union. Viewing the aggregate powers of
the Federal Government as a voluntary concession of the States, it
seemed to me that such only should be exercised as were at the time
intended to be given.

I have been strengthened, too, in the propriety of this course by the
conviction that all efforts to go beyond this tend only to produce
dissatisfaction and distrust, to excite jealousies, and to provoke
resistance. Instead of adding strength to the Federal Government, even
when successful they must ever prove a source of incurable weakness by
alienating a portion of those whose adhesion is indispensable to the
great aggregate of united strength and whose voluntary attachment is in
my estimation far more essential to the efficiency of a government
strong in the best of all possible strength--the confidence and
attachment of all those who make up its constituent elements.

Thus believing, it has been my purpose to secure to the whole people and
to every member of the Confederacy, by general, salutary, and equal laws
alone, the benefit of those republican institutions which it was the end
and aim of the Constitution to establish, and the impartial influence of
which is in my judgment indispensable to their preservation. I can not
bring myself to believe that the lasting happiness of the people, the
prosperity of the States, or the permanency of their Union can be
maintained by giving preference or priority to any class of citizens in
the distribution of benefits or privileges, or by the adoption of
measures which enrich one portion of the Union at the expense of
another; nor can I see in the interference of the Federal Government
with the local legislation and reserved rights of the States a remedy
for present or a security against future dangers.

The first, and assuredly not the least, important step toward relieving
the country from the condition into which it had been plunged by
excesses in trade, banking, and credits of all kinds was to place the
business transactions of the Government itself on a solid basis, giving
and receiving in all cases value for value, and neither countenancing
nor encouraging in others that delusive system of credits from which it
has been found so difficult to escape, and which has left nothing behind
it but the wrecks that mark its fatal career.

That the financial affairs of the Government are now and have been
during the whole period of these wide-spreading difficulties conducted
with a strict and invariable regard to this great fundamental principle,
and that by the assumption and maintenance of the stand thus taken on
the very threshold of the approaching crisis more than by any other
cause or causes whatever the community at large has been shielded from
the incalculable evils of a general and indefinite suspension of specie
payments, and a consequent annihilation for the whole period it might
have lasted of a just and invariable standard of value, will, it is
believed, at this period scarcely be questioned.

A steady adherence on the part of the Government to the policy which has
produced such salutary results, aided by judicious State legislation
and, what is not less .important, by the industry, enterprise,
perseverance, and economy of the American people, can not fail to raise
the whole country at an early period to a state of solid and enduring
prosperity, not subject to be again overthrown by the suspension of
banks or the explosion of a bloated credit system. It is for the people
and their representatives to decide whether or not the permanent welfare
of the country (which all good citizens equally desire, however widely
they may differ as to the means of its accomplishment) shall be in this
way secured, or whether the management of the pecuniary concerns of the
Government, and by consequence to a great extent those of individuals
also, shall be carried back to a condition of things which fostered
those contractions and expansions of the currency and those reckless
abuses of credit from the baleful effects of which the country has so
deeply suffered--a return that can promise in the end no better results
than to reproduce the embarrassments the Government has experienced, and
to remove from the shoulders of the present to those of fresh victims
the bitter fruits of that spirit of speculative enterprise to which our
countrymen are so liable and upon which the lessons of experience are so
unavailing. The choice is an important one, and I sincerely hope that it
may be wisely made.

A report from the Secretary of War, presenting a detailed view of the
affairs of that Department, accompanies this communication.

The desultory duties connected with the removal of the Indians, in which
the Army has been constantly engaged on the northern and western
frontiers and in Florida, have rendered it impracticable to carry into
full effect the plan recommended by the Secretary for improving its
discipline. In every instance where the regiments have been concentrated
they have made great progress, and the best results may be anticipated
from a continuance of this system. During the last season a part of the
troops have been employed in removing Indians from the interior to the
territory assigned them in the West--a duty which they have performed
efficiently and with praiseworthy humanity--and that portion of them
which has been stationed in Florida continued active operations there
throughout the heats of summer.

The policy of the United States in regard to the Indians, of which a
succinct account is given in my message of 1838, and of the wisdom and
expediency of which I am fully satisfied, has been continued in active
operation throughout the whole period of my Administration. Since the
spring of 1837 more than 40,000 Indians have been removed to their new
homes west of the Mississippi, and I am happy to add that all accounts
concur in representing the result of this measure as eminently
beneficial to that people.

The emigration of the Seminoles alone has been attended with serious
difficulty and occasioned bloodshed, hostilities having been commenced
by the Indians in Florida under the apprehension that they would be
compelled by force to comply with their treaty stipulations. The
execution of the treaty of Paynes Landing, signed in 1832, but not
ratified until 1834, was postponed at the solicitation of the Indians
until 1836, when they again renewed their agreement to remove peaceably
to their new homes in the West. In the face of this solemn and renewed
compact they broke their faith and commenced hostilities by the massacre
of Major Dade's command, the murder of their agent, General Thompson,
and other acts of cruel treachery. When this alarming and unexpected
intelligence reached the seat of Government, every effort appears to
have been made to reenforce General Clinch, who commanded the troops
then in Florida. General Eustis was dispatched with reenforcements from
Charleston, troops were called out from Alabama, Tennessee, and Georgia,
and General Scott was sent to take the command, with ample powers and
ample means. At the first alarm General Gaines organized a force at New
Orleans, and without waiting for orders landed in Florida, where he
delivered over the troops he had brought with him to General Scott.

Governor Call was subsequently appointed to conduct a summer campaign,
and at the close of it was replaced by General Jesup. These events and
changes took place under the Administration of my predecessor.
Notwithstanding the exertions of the experienced officers who had
command there for eighteen months, on entering upon the administration
of the Government I found the Territory of Florida a prey to Indian
atrocities. A strenuous effort was immediately made to bring those
hostilities to a close, and the army under General Jesup was reenforced
until it amounted to 10,000 men, and furnished with abundant supplies of
every description. In this campaign a great number of the enemy were
captured and destroyed, but the character of the contest only was
changed. The Indians, having been defeated in every engagement,
dispersed in small bands throughout the country and became an
enterprising, formidable, and ruthless banditti. General Taylor, who
succeeded General Jesup, used his best exertions to subdue them, and was
seconded in his efforts by the officers under his command; but he too
failed to protect the Territory from their depredations. By an act of
signal and cruel treachery they broke the truce made with them by
General MacGrab, who was sent from Washington for the purpose of
carrying into effect the expressed wishes of Congress, and have
continued their devastations ever since. General Armistead, who was in
Florida when General Taylor left the army by permission, assumed the
command, and after active summer operations was met by propositions for
peace, and from the fortunate coincidence of the arrival in Florida at
the same period of a delegation from the Seminoles who are happily
settled west of the Mississippi and are now anxious to persuade their
countrymen to join them there hopes were for some time entertained that
the Indians might be induced to leave the Territory without further
difficulty. These hopes have proved fallacious and hostilities have been
renewed throughout the whole of the Territory. That this contest has
endured so long is to be attributed to causes beyond the control of the
Government. Experienced generals have had the command of the troops,
officers and soldiers have alike distinguished themselves for their
activity, patience, and enduring courage, the army has been constantly
furnished with supplies of every description, and we must look for the
causes which have so long procrastinated the issue of the contest in the
vast extent of the theater of hostilities, the almost insurmountable
obstacles presented by the nature of the country, the climate, and the
wily character of the savages.

The sites for marine hospitals on the rivers and lakes which I was
authorized to select and cause to be purchased have all been designated,
but the appropriation not proving sufficient, conditional arrangements
only have been made for their acquisition. It is for Congress to decide
whether these Conditional purchases shall be sanctioned and the humane
intentions of the law carried into full effect.

The Navy, as will appear from the accompanying report of the Secretary,
has been usefully and honorably employed in the protection of our
commerce and citizens in the Mediterranean, the Pacific, on the coast of
Brazil, and in the Gulf of Mexico. A small squadron, consisting of the
frigate Constellation and the sloop of war Boston, under Commodore
Kearney, is now on its way to the China and Indian seas for the purpose
of attending to our interests in that quarter, and Commander Aulick, in
the sloop of war Yorktown, has been instructed to visit the Sandwich and
Society islands, the coasts of New Zealand and Japan, together with
other ports and islands frequented by our whale ships, for the purpose
of giving them countenance and protection should they be required. Other
smaller vessels have been and still are employed in prosecuting the
surveys of the coast of the United States directed by various acts of
Congress, and those which have been completed will shortly be laid
before you.

The exploring expedition at the latest date was preparing to leave the
Bay of Islands, New Zealand, in further prosecution of objects which
have thus far been successfully accomplished. The discovery of a new
continent, which was first seen in latitude 66  2' south, longitude 154
27' east, and afterwards in latitude 66  31' south, longitude 153  40'
east, by Lieutenants Wilkes and Hudson, for an extent of 1,800 miles,
but on which they were prevented from landing by vast bodies of ice
which encompassed it, is one of the honorable results of the enterprise.
Lieutenant Wilkes bears testimony to the zeal and good conduct of his
officers and men, and it is but justice to that officer to state that he
appears to have performed the duties assigned him with an ardor,
ability, and perseverance which give every assurance of an honorable
issue to the undertaking.

The report of the Postmaster-General herewith transmitted will exhibit
the service of that Department the past year and its present condition.
The transportation has been maintained during the year to the full
extent authorized by the existing laws; some improvements have been
effected which the public interest seemed urgently to demand, but not
involving any material additional expenditure; the contractors have
generally performed their engagements with fidelity; the postmasters,
with few exceptions, have rendered their accounts and paid their
quarterly balances with promptitude, and the whole service of the
Department has maintained the efficiency for which it has for several
years been distinguished.

The acts of Congress establishing new mail routes and requiring more
expensive services on others and the increasing wants of the country
have for three years past carried the expenditures something beyond the
accruing revenues, the excess having been met until the past year by the
surplus which had previously accumulated. That surplus having been
exhausted and the anticipated increase in the revenue not having been
realized owing to the depression in the commercial business of the
country, the finances of the Department exhibit a small deficiency at
the close of the last fiscal year. Its resources, however, are ample,
and the reduced rates of compensation for the transportation service
which may be expected on the future lettings from the general reduction
of prices, with the increase of revenue that may reasonably be
anticipated from the revival of commercial activity, must soon place the
finances of the Department in a prosperous condition.

Considering the unfavorable circumstances which have existed during the
past year, it is a gratifying result that the revenue has not declined
as compared with the preceding year, but, on the contrary, exhibits a
small increase, the circumstances referred to having had no other effect
than to check the expected income.

It will be seen that the Postmaster-General suggests certain
improvements in the establishment designed to reduce the weight of the
mails, cheapen the transportation, insure greater regularity in the
service, and secure a considerable reduction in the rates of letter
postage--an object highly desirable. The subject is one of general
interest to the community, and is respectfully recommended to your
consideration.

The suppression of the African slave trade has received the continued
attention of the Government. The brig Dolphin and schooner Grampus have
been employed during the last season on the coast of Africa for the
purpose of preventing such portions of that trade as were said to be
prosecuted under the American flag. After cruising off those parts of
the coast most usually resorted to by slavers until the commencement of
the rainy season, these vessels returned to the United States for
supplies, and have since been dispatched on a similar service.

From the reports of the commanding officers it appears that the trade is
now principally carried on under Portuguese colors, and they express the
opinion that the apprehension of their presence on the slave coast has
in a great degree arrested the prostitution of the American flag to this
inhuman purpose. It is hoped that by continuing to maintain this force
in that quarter and by the exertions of the officers in command much
will be done to put a stop to whatever portion of this traffic may have
been carried on under the American flag and to prevent its use in a
trade which, while it violates the laws, is equally an outrage on the
rights of others and the feelings of humanity. The efforts of the
several Governments who are anxiously seeking to suppress this traffic
must, however, be directed against the facilities afforded by what are
now recognized as legitimate commercial pursuits before that object can
be fully accomplished.

Supplies of provisions, water casks, merchandise, and articles connected
with the prosecution of the slave trade are, it is understood, freely
carried by vessels of different nations to the slave factories, and the
effects of the factors are transported openly from one slave station to
another without interruption or punishment by either of the nations to
which they belong engaged in the commerce of that region. I submit to
your judgments whether this Government, having been the first to
prohibit by adequate penalties the slave trade, the first to declare it
piracy, should not be the first also to forbid to its citizens all trade
with the slave factories on the coast of Africa, giving an example to
all nations in this respect which if fairly followed can not fail to
produce the most effective results in breaking up those dens of
iniquity.

M. VAN BUREN

***

State of the Union Address
John Tyler
December 7, 1841

To the Senate and House of Representatives of the United States:

In coming together, fellow-citizens, to enter again upon the discharge
of the duties with which the people have charged us severally, we find
great occasion to rejoice in the general prosperity of the country. We
are in the enjoyment of all the blessings of civil and religious
liberty, with unexampled means of education, knowledge, and improvement.
Through the year which is now drawing to a close peace has been in our
borders and plenty in our habitations, and although disease has visited
some few portions of the land with distress and mortality, yet in
general the health of the people has been preserved, and we are all
called upon by the highest obligations of duty to renew our thanks and
our devotion to our Heavenly Parent, who has continued to vouchsafe to
us the eminent blessings which surround us and who has so signally
crowned the year with His goodness. If we find ourselves increasing
beyond example in numbers, in strength, in wealth, in knowledge, in
everything which promotes human and social happiness, let us ever
remember our dependence for all these on the protection and merciful
dispensations of Divine Providence.

Since your last adjournment Alexander McLeod, a British subject who was
indicted for the murder of an American citizen, and whose case has been
the subject of a correspondence heretofore communicated to you, has been
acquitted by the verdict of an impartial and intelligent jury, and has
under the judgment of the court been regularly discharged.

Great Britain having made known to this Government that the expedition
which was fitted out from Canada for the destruction of the steamboat
Caroline in the winter of 1837, and which resulted in the destruction of
said boat and in the death of an American citizen, was undertaken by
orders emanating from the authorities of the British Government in
Canada, and demanding the discharge of McLeod upon the ground that if
engaged in that expedition he did but fulfill the orders of his
Government, has thus been answered in the only way in which she could be
answered by a government the powers of which are distributed among its
several departments by the fundamental law. Happily for the people of
Great Britain, as well as those of the United States, the only mode by
which an individual arraigned for a criminal offense before the courts
of either can obtain his discharge is by the independent action of the
judiciary and by proceedings equally familiar to the courts of both
countries.

If in Great Britain a power exists in the Crown to cause to be entered a
nolle prosequi, which is not the case with the Executive power of the
United States upon a prosecution pending in a State court, yet there no
more than here can the chief executive power rescue a prisoner from
custody without an order of the proper tribunal directing his discharge.
The precise stage of the proceedings at which such order may be made is
a matter of municipal regulation exclusively, and not to be complained
of by any other government. In cases of this kind a government becomes
politically responsible only when its tribunals of last resort are shown
to have rendered unjust and injurious judgments in matters not doubtful.
To the establishment and elucidation of this principle no nation has
lent its authority more efficiently than Great Britain. Alexander
McLeod, having his option either to prosecute a writ of error from the
decision of the supreme court of New York, which had been rendered upon
his application for a discharge, to the Supreme Court of the United
States, or to submit his case to the decision of a jury, preferred the
latter, deeming it the readiest mode of obtaining his liberation; and
the result has fully sustained the wisdom of his choice. The manner in
which the issue submitted was tried will satisfy the English Government
that the principles of justice will never fail to govern the enlightened
decision of an American tribunal. I can not fail, however, to suggest to
Congress the propriety, and in some degree the necessity, of making such
provisions by law, so far as they may constitutionally do so, for the
removal at their commencement and at the option of the party of all such
cases as may hereafter arise, and which may involve the faithful
observance and execution of our international obligations, from the
State to the Federal judiciary. This Government, by our institutions, is
charged with the maintenance of peace and the preservation of amicable
relations with the nations of the earth, and ought to possess without
question all the reasonable and proper means of maintaining the one and
preserving the other. While just confidence is felt in the judiciary of
the States, yet this Government ought to be competent in itself for the
fulfillment of the high duties which have been devolved upon it under
the organic law by the States themselves.

In the month of September a party of armed men from Upper Canada invaded
the territory of the United States and forcibly seized upon the person
of one Grogan, and under circumstances of great harshness hurriedly
carried him beyond the limits of the United States and delivered him up
to the authorities of Upper Canada. His immediate discharge was ordered
by those authorities upon the facts of the case being brought to their
knowledge--a course of procedure which was to have been expected from a
nation with whom we are at peace, and which was not more due to the
rights of the United States than to its own regard for justice. The
correspondence which passed between the Department of State and the
British envoy, Mr. Fox, and with the governor of Vermont, as soon as the
facts had been made known to this department, are herewith communicated.

I regret that it is not in my power to make known to you an equally
satisfactory conclusion in the case of the Caroline steamer, with the
circumstances connected with the destruction of which, in December,
1837, by an armed force fitted out in the Province of Upper Canada, you
are already made acquainted. No such atonement as was due for the public
wrong done to the United States by this invasion of her territory, so
wholly irreconcilable with her rights as an independent power, has yet
been made. In the view taken by this Government the inquiry whether the
vessel was in the employment of those who were prosecuting an
unauthorized war against that Province or was engaged by the owner in
the business of transporting passengers to and from Navy Island in hopes
of private gain, which was most probably the case, in no degree alters
the real question at issue between the two Governments. This Government
can never concede to any foreign government the power, except in a case
of the most urgent and extreme necessity, of invading its territory,
either to arrest the persons or destroy the property of those who may
have violated the municipal laws of such foreign government or have
disregarded their obligations arising under the law of nations. The
territory of the United States must be regarded as sacredly secure
against all such invasions until they shall voluntarily acknowledge
their inability to acquit themselves of their duties to others. And in
announcing this sentiment I do but affirm a principle which no nation on
earth would be more ready to vindicate at all hazards than the people
and Government of Great Britain. If upon a full investigation of all the
facts it shall appear that the owner of the Caroline was governed by a
hostile intent or had made common cause with those who were in the
occupancy of Navy Island, then so far as he is concerned there can be no
claim to indemnity for the destruction of his boat which this Government
would feel itself bound to prosecute, since he would have acted not only
in derogation of the rights of Great Britain, but in clear violation of
the laws of the United States; but that is a question which, however
settled, in no manner involves the higher consideration of the violation
of territorial sovereignty and jurisdiction. To recognize it as an
admissible practice that each Government in its turn, upon any sudden
and unauthorized outbreak which, on a frontier the extent of which
renders it impossible for either to have an efficient force on every
mile of it, and which outbreak, therefore, neither may be able to
suppress in a day, may take vengeance into its own hands, and without
even a remonstrance, and in the absence of any pressing or overruling
necessity may invade the territory of the other, would inevitably lead
to results equally to be deplored by both. When border collisions come
to receive the sanction or to be made on the authority of either
Government general war must be the inevitable result. While it is the
ardent desire of the United States to cultivate the relations of peace
with all nations and to fulfill all the duties of good neighborhood
toward those who possess territories adjoining their own, that very
desire would lead them to deny the right of any foreign power to invade
their boundary with an armed force. The correspondence between the two
Governments on this subject will at a future day of your session be
submitted to your consideration; and in the meantime I can not but
indulge the hope that the British Government will see the propriety of
renouncing as a rule of future action the precedent which has been set
in the affair at Schlosser.

I herewith submit the correspondence which has recently taken place
between the American minister at the Court of St. James, Mr. Stevenson,
and the minister of foreign affairs of that Government on the right
claimed by that Government to visit and detain vessels sailing under the
American flag and engaged in prosecuting lawful commerce in the African
seas. Our commercial interests in that region have experienced
considerable increase and have become an object of much importance, and
it is the duty of this Government to protect them against all improper
and vexatious interruption. However desirous the United States may be
for the suppression of the slave trade, they can not consent to
interpolations into the maritime code at the mere will and pleasure of
other governments. We deny the right of any such interpolation to any
one or all the nations of the earth without our consent. We claim to
have a voice in all amendments or alterations of that code, and when we
are given to understand, as in this instance, by a foreign government
that its treaties with other nations can not be executed without the
establishment and enforcement of new principles of maritime police, to
be applied without our consent, we must employ a language neither of
equivocal import or susceptible of misconstruction. American citizens
prosecuting a lawful commerce in the African seas under the flag of
their country are not responsible for the abuse or unlawful use of that
flag by others; nor can they rightfully on account of any such alleged
abuses be interrupted, molested, or detained while on the ocean, and if
thus molested and detained while pursuing honest voyages in the usual
way and violating no law themselves they are unquestionably entitled to
indemnity. This Government has manifested its repugnance to the slave
trade in a manner which can not be misunderstood. By its fundamental law
it prescribed limits in point of time to its continuance, and against
its own citizens who might so far forget the rights of humanity as to
engage in that wicked traffic it has long since by its municipal laws
denounced the most condign punishment. Many of the States composing this
Union had made appeals to the civilized world for its suppression long
before the moral sense of other nations had become shocked by the
iniquities of the traffic. Whether this Government should now enter into
treaties containing mutual stipulations upon this subject is a question
for its mature deliberation. Certain it is that if the right to detain
American ships on the high seas can be justified on the plea of a
necessity for such detention arising out of the existence of treaties
between other nations, the same plea may, be extended and enlarged by
the new stipulations of new treaties to which the United States may not
be a party. This Government will not cease to urge upon that of Great
Britain full and ample remuneration for all losses, whether arising from
detention or otherwise, to which American citizens have heretofore been
or may hereafter be subjected by the exercise of rights which this
Government can not recognize as legitimate and proper. Nor will I
indulge a doubt but that the sense of justice of Great Britain will
constrain her to make retribution for any wrong or loss which any
American citizen engaged in the prosecution of lawful commerce may have
experienced at the hands of her cruisers or other public authorities.
This Government, at the same time, will relax no effort to prevent its
citizens, if there be any so disposed, from prosecuting a traffic so
revolting to the feelings of humanity. It seeks to do no more than to
protect the fair and honest trader from molestation and injury; but
while the enterprising mariner engaged in the pursuit of an honorable
trade is entitled to its protection, it will visit with condign
punishment others of an opposite character.

I invite your attention to existing laws for the suppression of the
African slave trade, and recommend all such alterations as may give to
them greater force and efficacy. That the American flag is grossly
abused by the abandoned and profligate of other nations is but too
probable. Congress has not long since had this subject under its
consideration, and its importance well justifies renewed and anxious
attention.

I also communicate herewith the copy of a correspondence between Mr.
Stevenson and Lord Palmerston upon the subject, so interesting to
several of the Southern States, of the rice duties, which resulted
honorably to the justice of Great Britain and advantageously to the
United States.

At the opening of the last annual session the President informed
Congress of the progress which had then been made in negotiating a
convention between this Government and that of England with a view to
the final settlement of the question of the boundary between the
territorial limits of the two countries. I regret to say that little
further advancement of the object has been accomplished since last year,
but this is owing to circumstances no way indicative of any abatement of
the desire of both parties to hasten the negotiation to its conclusion
and to settle the question in dispute as early as possible. In the
course of the session it is my hope to be able to announce some further
degree of progress toward the accomplishment of this highly desirable
end.

The commission appointed by this Government for the exploration and
survey of the line of boundary separating the States of Maine and New
Hampshire from the conterminous British Provinces is, it is believed,
about to close its field labors and is expected soon to report the
results of its examinations to the Department of State. The report, when
received, will be laid before Congress.

The failure on the part of Spain to pay with punctuality the interest
due under the convention of 1834 for the settlement of claims between
the two countries has made it the duty of the Executive to call the
particular attention of that Government to the subject. A disposition
has been manifested by it, which is believed to be entirely sincere, to
fulfill its obligations in this respect so soon as its internal
condition and the state of its finances will permit. An arrangement is
in progress from the result of which it is trusted that those of our
citizens who have claims under the convention will at no distant day
receive the stipulated payments.

A treaty of commerce and navigation with Belgium was concluded and
signed at Washington on the 29th of March, 1840, and was duly sanctioned
by the Senate of the United States. The treaty was ratified by His
Belgian Majesty, but did not receive the approbation of the Belgian
Chambers within the time limited by its terms, and has therefore become
void.

This occurrence assumes the graver aspect from the consideration that in
1833 a treaty negotiated between the two Governments and ratified on the
part of the United States failed to be ratified on the part of Belgium.
The representative of that Government at Washington informs the
Department of State that he has been instructed to give explanations of
the causes which occasioned delay in the approval of the late treaty by
the legislature, and to express the regret of the King at the
occurrence.

The joint commission under the convention with Texas to ascertain the
true boundary between the two countries has concluded its labors, but
the final report of the commissioner of the United States has not been
received. It is understood, however, that the meridian line as traced by
the commission lies somewhat farther east than the position hitherto
generally assigned to it, and consequently includes in Texas some part
of the territory which had been considered as belonging to the States of
Louisiana and Arkansas.

The United States can not but take a deep interest in whatever relates
to this young but growing Republic. Settled principally by emigrants
from the United States, we have the happiness to know that the great
principles of civil liberty are there destined to flourish under wise
institutions and wholesome laws, and that through its example another
evidence is to be afforded of the capacity of popular institutions to
advance the prosperity, happiness, and permanent glory of the human
race. The great truth that government was made for the people and not
the people for government has already been established in the practice
and by the example of these United States, and we can do no other than
contemplate its further exemplification by a sister republic with the
deepest interest.

Our relations with the independent States of this hemisphere, formerly
under the dominion of Spain, have not undergone any material change
within the past year. The incessant sanguinary conflicts in or between
those countries are to be greatly deplored as necessarily tending to
disable them from performing their duty as members of the community of
nations and rising to the destiny which the position and natural
resources of many of them might lead them justly to anticipate, as
constantly giving occasion also, directly or indirectly, for complaints
on the part of our citizens who resort thither for purposes of
commercial intercourse, and as retarding reparation for wrongs already
committed, some of which are by no means of recent date.

The failure of the Congress of Ecuador to hold a session at the time
appointed for that purpose, in January last, will probably render
abortive a treaty of commerce with that Republic, which was signed at
Quito on the 13th of June, 1839, and had been duly ratified on our part,
but which required the approbation of that body prior to its
ratification by the Ecuadorian Executive.

A convention which has been concluded with the Republic of Peru,
providing for the settlement of certain claims of citizens of the United
States upon the Government of that Republic, will be duly submitted to
the Senate.

The claims of our citizens against the Brazilian Government originating
from captures and other causes are still unsatisfied. The United States
have, however, so uniformly shown a disposition to cultivate relations
of amity with that Empire that it is hoped the unequivocal tokens of the
same spirit toward us which an adjustment of the affairs referred to
would afford will be given without further avoidable delay.

The war with the Indian tribes on the peninsula of Florida has during
the last summer and fall been prosecuted with untiring activity and
zeal. A summer campaign was resolved upon as the best mode of bringing
it to a close. Our brave officers and men who have been engaged in that
service have suffered toils and privations and exhibited an energy which
in any other war would have won for them unfading laurels. In despite of
the sickness incident to the climate, they have penetrated the
fastnesses of the Indians, broken up their encampments, and harassed
them unceasingly. Numbers have been captured, and still greater numbers
have surrendered and have been transported to join their brethren on the
lands elsewhere allotted to them by the Government, and a strong hope is
entertained that under the conduct of the gallant officer at the head of
the troops in Florida that troublesome and expensive war is destined to
a speedy termination. With all the other Indian tribes we are enjoying
the blessings of peace. Our duty as well as our best interests prompts
us to observe in all our intercourse with them fidelity in fulfilling
our engagements, the practice of strict justice, as well as the constant
exercise of acts of benevolence and kindness. These are the great
instruments of civilization, and through the use of them alone can the
untutored child of the forest be induced to listen to its teachings.

The Secretary of State, on whom the acts of Congress have devolved the
duty of directing the proceedings for the taking of the sixth census or
enumeration of the inhabitants of the United States, will report to the
two Houses the progress of that work. The enumeration of persons has
been completed, and exhibits a grand total of 17,069,453, making an
increase over the census of 1830 of 4,202,646 inhabitants, and showing a
gain in a ratio exceeding 32 1/2 per cent for the last ten years.

From the report of the Secretary of the Treasury you will be informed of
the condition of the finances. The balance in the Treasury on the 1st of
January last, as stated in the report of the Secretary of the Treasury
submitted to Congress at the extra session, was $987,345.03. The
receipts into the Treasury during the first three quarters of this year
from all sources amount to $23,467,072.52; the estimated receipts for
the fourth quarter amount to $6,943,095.25, amounting to $30,410,167.77,
and making with the balance in the Treasury on the 1st of January last
$31,397,512.80. The expenditures for the first three quarters of this
year amount to $24,734,346.97. The expenditures for the fourth quarter
as estimated will amount to $7,290,723.73, thus making a total of
$32,025,070.70, and leaving a deficit to be provided for on the 1st of
January next of about $627,557.90.

Of the loan of $12,000,000 which was authorized by Congress at its late
session only $5,432,726.88 have been negotiated. The shortness of time
which it had to run has presented no inconsiderable impediment in the
way of its being taken by capitalists at home, while the same cause
would have operated with much greater force in the foreign market. For
that reason the foreign market has not been resorted to; and it is now
submitted whether it would not be advisable to amend the law by making
what remains undisposed of payable at a more distant day.

Should it be necessary, in any view that Congress may take of the
subject, to revise the existing tariff of duties, I beg leave to say
that in the performance of that most delicate operation moderate
counsels would seem to be the wisest. The Government under which it is
our happiness to live owes its existence to the spirit of compromise
which prevailed among its framers; jarring and discordant opinions could
only have been reconciled by that noble spirit of patriotism which
prompted conciliation and resulted in harmony. In the same spirit the
compromise bill, as it is commonly called, was adopted at the session of
1833. While the people of no portion of the Union will ever hesitate to
pay all necessary taxes for the support of Government, yet an innate
repugnance exists to the imposition of burthens not really necessary for
that object. In imposing duties, however, for the purposes of revenue a
right to discriminate as to the articles on which the duty shall be
laid, as well as the amount, necessarily and most properly exists;
otherwise the Government would be placed in the condition of having to
levy the same duties upon all articles, the productive as well as the
unproductive. The slightest duty upon some might have the effect of
causing their importation to cease, whereas others, entering extensively
into the consumption of the country, might bear the heaviest without any
sensible diminution in the amount imported. So also the Government may
be justified in so discriminating by reference to other considerations
of domestic policy connected with our manufactures. So long as the
duties shall be laid with distinct reference to the wants of the
Treasury no well-rounded objection can exist against them. It might be
esteemed desirable that no such augmentation of the taxes should take
place as would have the effect of annulling the land-proceeds
distribution act of the last session, which act is declared to be
inoperative the moment the duties are increased beyond 20 per cent, the
maximum rate established by the compromise act. Some of the provisions
of the compromise act, which will go into effect on the 30th day of June
next, may, however, be found exceedingly inconvenient in practice under
any regulations that Congress may adopt. I refer more particularly to
that relating to the home valuation. A difference in value of the same
articles to some extent will necessarily exist at different ports, but
that is altogether insignificant when compared with the conflicts in
valuation which are likely to arise from the differences of opinion
among the numerous appraisers of merchandise. In many instances the
estimates of value must be conjectural, and thus as many different rates
of value may be established as there are appraisers. These differences
in valuation may also be increased by the inclination which, without the
slightest imputation on their honesty, may arise on the part of the
appraisers in favor of their respective ports of entry. I recommend this
whole subject to the consideration of Congress with a single additional
remark. Certainty and permanency in any system of governmental policy
are in all respects eminently desirable, but more particularly is this
true in all that affects trade and commerce, the operations of which
depend much more on the certainty of their returns and calculations
which embrace distant periods of time than on high bounties or duties,
which are liable to constant fluctuations.

At your late session I invited your attention to the condition of the
currency and exchanges and urged the necessity of adopting such measures
as were consistent with the constitutional competency of the Government
in order to correct the unsoundness of the one and, as far as
practicable, the inequalities of the other. No country can be in the
enjoyment of its full measure of prosperity without the presence of a
medium of exchange approximating to uniformity of value. What is
necessary as between the different nations of the earth is also
important as between the inhabitants of different parts of the same
country. With the first the precious metals constitute the chief medium
of circulation, and such also would be the case as to the last but for
inventions comparatively modern, which have furnished in place of gold
and silver a paper circulation. I do not propose to enter into a
comparative analysis of the merits of the two systems. Such belonged
more properly to the period of the introduction of the paper system. The
speculative philosopher might find inducements to prosecute the inquiry,
but his researches could only lead him to conclude that the paper system
had probably better never have been introduced and that society might
have been much happier without it. The practical statesman has a very
different task to perform. He has to look at things as they are, to take
them as he finds them, to supply deficiencies and to prune excesses as
far as in him lies. The task of furnishing a corrective for derangements
of the paper medium with us is almost inexpressibly great. The power
exerted by the States to charter banking corporations, and which, having
been carried to a great excess, has filled the country with, in most of
the States, an irredeemable paper medium, is an evil which in some way
or other requires a corrective. The rates at which bills of exchange are
negotiated between different parts of the country furnish an index of
the value of the local substitute for gold and silver, which is in many
parts so far depreciated as not to be received except at a large
discount in payment of debts or in the purchase of produce. It could
earnestly be desired that every bank not possessing the means of
resumption should follow the example of the late United States Bank of
Pennsylvania and go into liquidation rather than by refusing to do so to
continue embarrassments in the way of solvent institutions, thereby
augmenting the difficulties incident to the present condition of things.
Whether this Government, with due regard to the rights of the States,
has any power to constrain the banks either to resume specie payments or
to force them into liquidation, is an inquiry which will not fail to
claim your consideration. In view of the great advantages which are
allowed the corporators, not among the least of which is the authority
contained in most of their charters to make loans to three times the
amount of their capital, thereby often deriving three times as much
interest on the same amount of money as any individual is permitted by
law to receive, no sufficient apology can be urged for a long-continued
suspension of specie payments. Such suspension is productive of the
greatest detriment to the public by expelling from circulation the
precious metals and seriously hazarding the success of any effort that
this Government can make to increase commercial facilities and to
advance the public interests.

This is the more to be regretted and the indispensable necessity for a
sound currency becomes the more manifest when we reflect on the vast
amount of the internal commerce of the country. Of this we have no
statistics nor just data for forming adequate opinions. But there can be
no doubt but that the amount of transportation coastwise by sea, and the
transportation inland by railroads and canals, and by steamboats and
other modes of conveyance over the surface of our vast rivers and
immense lakes, and the value of property carried and interchanged by
these means form a general aggregate to which the foreign commerce of
the country, large as it is, makes but a distant approach.

In the absence of any controlling power over this subject, which, by
forcing a general resumption of specie payments, would at once have the
effect of restoring a sound medium of exchange and would leave to the
country but little to desire, what measure of relief falling within the
limits of our constitutional competency does it become this Government
to adopt? It was my painful duty at your last session, under the weight
of most solemn obligations, to differ with Congress on the measures
which it proposed for my approval, and which it doubtless regarded as
corrective of existing evils. Subsequent reflection and events since
occurring have only served to confirm me in the opinions then
entertained and frankly expressed. I must be permitted to add that no
scheme of governmental policy unaided by individual exertions can be
available for ameliorating the present condition of things. Commercial
modes of exchange and a good currency are but the necessary means of
commerce and intercourse, not the direct productive sources of wealth.
Wealth can only be accumulated by the earnings of industry and the
savings of frugality, and nothing can be more ill judged than to look to
facilities in borrowing or to a redundant circulation for the power of
discharging pecuniary obligations. The country is full of resources and
the people fall of energy, and the great and permanent remedy for
present embarrassments must be sought in industry, economy, the
observance of good faith, and the favorable influence of time. In
pursuance of a pledge given to you in my last message to Congress, which
pledge I urge as an apology for adventuring to present you the details
of any plan, the Secretary of the Treasury will be ready to submit to
you, should you require it, a plan of finance which, while it throws
around the public treasure reasonable guards for its protection and
rests on powers acknowledged in practice to exist from the origin of the
Government, will at the same time furnish to the country a sound paper
medium and afford all reasonable facilities for regulating the
exchanges. When submitted, you will perceive in it a plan amendatory of
the existing laws in relation to the Treasury Department, subordinate in
all respects to the will of Congress directly and the will of the people
indirectly, self-sustaining should it be found in practice to realize
its promises in theory, and repealable at the pleasure of Congress. It
proposes by effectual restraints and by invoking the true spirit of our
institutions to separate the purse from the sword, or, more properly to
speak, denies any other control to the President over the agents who may
be selected to carry it into execution but what may be indispensably
necessary to secure the fidelity of such agents, and by wise regulations
keeps plainly apart from each other private and public funds. It
contemplates the establishment of a board of control at the seat of
government, with agencies at prominent commercial points or wherever
else Congress shall direct, for the safe-keeping and disbursement of the
public moneys and a substitution at the option of the public creditor of
Treasury notes in lieu of gold and silver. It proposes to limit the
issues to an amount not to exceed $15,000,000 without the express
sanction of the legislative power. It also authorizes the receipt of
individual deposits of gold and silver to a limited amount, and the
granting certificates of deposit divided into such sums as may be called
for by the depositors. It proceeds a step further and authorizes the
purchase and sale of domestic bills and drafts resting on a real and
substantial basis, payable at sight or having but a short time to run,
and drawn on places not less than 100 miles apart, which authority,
except in so far as may be necessary for Government purposes
exclusively, is only to be exerted upon the express condition that its
exercise shall not be prohibited by the State in which the agency is
situated. In order to cover the expenses incident to the plan, it will
be authorized to receive moderate premiums for certificates issued on
deposits and on bills bought and sold, and thus, as far as its dealings
extend, to furnish facilities to commercial intercourse at the lowest
possible rates and to subduct from the earnings of industry the least
possible sum. It uses the State banks at a distance from the agencies as
auxiliaries without imparting any power to trade in its name. It is
subjected to such guards and restraints as have appeared to be
necessary. It is the creature of law and exists only at the pleasure of
the Legislature. It is made to rest on an actual specie basis in order
to redeem the notes at the places of issue, produces no dangerous
redundancy of circulation, affords no temptation to speculation, is
attended by no inflation of prices, is equable in its operation, makes
the Treasury notes (which it may use along with the certificates of
deposit and the notes of specie-paying banks) convertible at the place
where collected, receivable in payment of Government dues, and without
violating any principle of the Constitution affords the Government and
the people such facilities as are called for by the wants of both. Such,
it has appeared to me, are its recommendations, and in view of them it
will be submitted, whenever you may require it, to your consideration.

I am not able to perceive that any fair and candid objection can be
urged against the plan, the principal outlines of which I have thus
presented. I can not doubt but that the notes which it proposes to
furnish at the voluntary option of the public creditor, issued in lieu
of the revenue and its certificates of deposit, will be maintained at an
equality with gold and silver everywhere. They are redeemable in gold
and silver on demand at the places of issue. They are receivable
everywhere in payment of Government dues. The Treasury notes are limited
to an amount of one-fourth less than the estimated annual receipts of
the Treasury, and in addition they rest upon the faith of the Government
for their redemption. If all these assurances are not sufficient to make
them available, then the idea, as it seems to me, of furnishing a sound
paper medium of exchange may be entirely abandoned.

If a fear be indulged that the Government may be tempted to run into
excess in its issues at any future day, it seems to me that no such
apprehension can reasonably be entertained until all confidence in the
representatives of the States and of the people, as well as of the
people themselves, shall be lost. The weightiest considerations of
policy require that the restraints now proposed to be thrown around the
measure should not for light causes be removed. To argue against any
proposed plan its liability to possible abuse is to reject every
expedient, since everything dependent on human action is liable to
abuse. Fifteen millions of Treasury notes may be issued as the maximum,
but a discretionary power is to be given to the board of control under
that sum, and every consideration will unite in leading them to feel
their way with caution. For the first eight years of the existence of
the late Bank of the United States its circulation barely exceeded
$4,000,000, and for five of its most prosperous years it was about equal
to $16,000,000; furthermore, the authority given to receive private
deposits to a limited amount and to issue certificates in such sums as
may be called for by the depositors may so far fill up the channels of
circulation as greatly to diminish the necessity of any considerable
issue of Treasury notes. A restraint upon the amount of private deposits
has seemed to be indispensably necessary from an apprehension, thought
to be well founded, that in any emergency of trade confidence might be
so far shaken in the banks as to induce a withdrawal from them of
private deposits with a view to insure their unquestionable safety when
deposited with the Government, which might prove eminently disastrous to
the State banks. Is it objected that it is proposed to authorize the
agencies to deal in bills of exchange? It is answered that such dealings
are to be carried on at the lowest possible premium, are made to rest on
an unquestionably sound basis, are designed to reimburse merely the
expenses which would otherwise devolve upon the Treasury, and are in
strict subordination to the decision of the Supreme Court in the case of
the Bank of Augusta against Earle, and other reported cases, and thereby
avoids all conflict with State jurisdiction, which I hold to be
indispensably requisite. It leaves the banking privileges of the States
without interference, looks to the Treasury and the Union, and while
furnishing every facility to the first is careful of the interests of
the last. But above all, it is created by law, is amendable by law, and
is repealable by law, and, wedded as I am to no theory, but looking
solely to the advancement of the public good, I shall be among the very
first to urge its repeal if it be found not to subserve the purposes and
objects for which it may be created. Nor will the plan be submitted in
any overweening confidence in the sufficiency of my own judgment, but
with much greater reliance on the wisdom and patriotism of Congress. I
can not abandon this subject without urging upon you in the most
emphatic manner, whatever may be your action on the suggestions which I
have felt it to be my duty to submit, to relieve the Chief Executive
Magistrate, by any and all constitutional means, from a controlling
power over the public Treasury. If in the plan proposed, should you deem
it worthy of your consideration, that separation is not as complete as
you may desire, you will doubtless amend it in that particular. For
myself, I disclaim all desire to have any control over the public moneys
other than what is indispensably necessary to execute the laws which you
may pass.

Nor can I fail to advert in this connection to the debts which many of
the States of the Union have contracted abroad and under which they
continue to labor. That indebtedness amounts to a sum not less than
$200,000,000, and which has been retributed to them for the most part in
works of internal improvement which are destined to prove of vast
importance in ultimately advancing their prosperity and wealth. For the
debts thus contracted the States are alone responsible. I can do not
more than express the belief that each State will feel itself bound by
every consideration of honor as well as of interest to meet its
engagements with punctuality. The failure, however, of any one State to
do so should in no degree affect the credit of the rest, and the foreign
capitalist will have no just cause to experience alarm as to all other
State stocks because any one or more of the States may neglect to
provide with punctuality the means of redeeming their engagements. Even
such States, should there be any, considering the great rapidity with
which their resources are developing themselves, will not fail to have
the means at no very distant day to redeem their obligations to the
uttermost farthing; nor will I doubt but that, in view of that honorable
conduct which has evermore governed the States and the people of the
Union, they will each and all resort to every legitimate expedient
before they will forego a faithful compliance with their obligations.

From the report of the Secretary of War and other reports accompanying
it you will be informed of the progress which has been made in the
fortifications designed for the protection of our principal cities,
roadsteads, and inland frontier during the present year, together with
their true state and condition. They will be prosecuted to completion
with all the expedition which the means placed by Congress at the
disposal of the Executive will allow.

I recommend particularly to your consideration that portion of the
Secretary's report which proposes the establishment of a chain of
military posts from Council Bluffs to some point on the Pacific Ocean
within our limits. The benefit thereby destined to accrue to our
citizens engaged in the fur trade over that wilderness region, added to
the importance of cultivating friendly relations with savage tribes
inhabiting it, and at the same time of giving protection to our frontier
settlements and of establishing the means of safe intercourse between
the American settlements at the mouth of the Columbia River and those on
this side of the Rocky Mountains, would seem to suggest the importance
of carrying into effect the recommendations upon this head with as
little delay as may be practicable.

The report of the Secretary of the Navy will place you in possession of
the present condition of that important arm of the national defense.
Every effort will be made to add to its efficiency, and I can not too
strongly urge upon you liberal appropriations to that branch of the
public service. Inducements of the weightiest character exist for the
adoption of this course of policy. Our extended and otherwise exposed
maritime frontier calls for protection, to the furnishing of which an
efficient naval force is indispensable. We look to no foreign conquests,
nor do we propose to enter into competition with any other nation for
supremacy on the ocean; but it is due not only to the honor but to the
security of the people of the United States that no nation should be
permitted to invade our waters at pleasure and subject our towns and
villages to conflagration or pillage. Economy in all branches of the
public service is due from all the public agents to the people, but
parsimony alone would suggest the withholding of the necessary means for
the protection of our domestic firesides from invasion and our national
honor from disgrace. I would most earnestly recommend to Congress to
abstain from all appropriations for objects not absolutely necessary;
but I take upon myself, without a moment of hesitancy, all the
responsibility of recommending the increase and prompt equipment of that
gallant Navy which has lighted up every sea with its victories and
spread an imperishable glory over the country.

The report of the Postmaster-General will claim your particular
attention, not only because of the valuable suggestions which it
contains, but because of the great importance which at all times
attaches to that interesting branch of the public service. The increased
expense of transporting the mail along the principal routes necessarily
claims the public attention, and has awakened a corresponding solicitude
on the part of the Government. The transmission of the mail must keep
pace with those facilities of intercommunication which are every day
becoming greater through the building of railroads and the application
of steam power, but it can not be disguised that in order to do so the
Post-Office Department is subjected to heavy exactions. The lines of
communication between distant parts of the Union are to a great extent
occupied by railroads, which, in the nature of things, possess a
complete monopoly, and the Department is therefore liable to heavy and
unreasonable charges. This evil is destined to great increase in future,
and some timely measure may become necessary to guard against it.

I feel it my duty to bring under your consideration a practice which has
grown up in the administration of the Government, and which, I am deeply
convinced, ought to be corrected. I allude to the exercise of the power
which usage rather than reason has vested in the Presidents of removing
incumbents from office in order to substitute others more in favor with
the dominant party. My own conduct in this respect has been governed by
a conscientious purpose to exercise the removing power only in cases of
unfaithfulness or inability, or in those in which its exercise appeared
necessary in order to discountenance and suppress that spirit of active
partisanship on the part of holders of office which not only withdraws
them from the steady and impartial discharge of their official duties,
but exerts an undue and injurious influence over elections and degrades
the character of the Government itself, inasmuch as it exhibits the
Chief Magistrate as being a party through his agents in the secret plots
or open workings of political parties.

In respect to the exercise of this power nothing should be left to
discretion which may safely be regulated by law, and it is of high
importance to restrain as far as possible the stimulus of personal
interests in public elections. Considering the great increase which has
been made in public offices in the last quarter of a century and the
probability of further increase, we incur the hazard of witnessing
violent political contests, directed too often to the single object of
retaining office by those who are in or obtaining it by those who are
out. Under the influence of these convictions I shall cordially concur
in any constitutional measure for regulating and, by regulating,
restraining the power of removal.

I suggest for your consideration the propriety of making without further
delay some specific application of the funds derived under the will of
Mr. Smithson, of England, for the diffusion of knowledge, and which have
heretofore been vested in public stocks until such time as Congress
should think proper to give them a specific direction. Nor will you, I
feel confident, permit any abatement of the principal of the legacy to
be made should it turn out that the stocks in which the investments have
been made have undergone a depreciation.

In conclusion I commend to your care the interests of this District, for
which you are the exclusive legislators. Considering that this city is
the residence of the Government and for a large part of the year of
Congress, and considering also the great cost of the public buildings
and the propriety of affording them at all times careful protection, it
seems not unreasonable that Congress should contribute toward the
expense of an efficient police.

***

State of the Union Address
John Tyler
December 6, 1842

To the Senate and House of Representatives of the United States:

We have continued reason to express our profound gratitude to the Great
Creator of All Things for numberless benefits conferred upon us as a
people. Blessed with genial seasons, the husbandman has his garners
filled with abundance, and the necessaries of life, not to speak of its
luxuries, abound in every direction. While in some other nations steady
and industrious labor can hardly find the means of subsistence, the
greatest evil which we have to encounter is a surplus of production
beyond the home demand, which seeks, and with difficulty finds, a
partial market in other regions. The health of the country, with partial
exceptions, has for the past year been well preserved, and under their
free and wise institutions the United States are rapidly advancing
toward the consummation of the high destiny which an overruling
Providence seems to have marked out for them. Exempt from domestic
convulsion and at peace with all the world, we are left free to consult
as to the best means of securing and advancing the happiness of the
people. Such are the circumstances under which you now assemble in your
respective chambers and which should lead us to unite in praise and
thanksgiving to that great Being who made us and who preserves us as a
nation.

I congratulate you, fellow-citizens, on the happy change in the aspect
of our foreign affairs since my last annual message. Causes of complaint
at that time existed between the United States and Great Britain which,
attended by irritating circumstances, threatened most seriously the
public peace. The difficulty of adjusting amicably the questions at
issue between the two countries was in no small degree augmented by the
lapse of time since they had their origin. The opinions entertained by
the Executive on several of the leading topics in dispute were frankly
set forth in the message at the opening of your late session. The
appointment of a special minister by Great Britain to the United States
with power to negotiate upon most of the points of difference indicated
a desire on her part amicably to adjust them, and that minister was met
by the Executive in the same spirit which had dictated his mission. The
treaty consequent thereon having been duly ratified by the two
Governments, a copy, together with the correspondence which accompanied
it, is herewith communicated. I trust that whilst you may see in it
nothing objectionable, it may be the means of preserving for an
indefinite period the amicable relations happily existing between the
two Governments. The question of peace or war between the United States
and Great Britain is a question of the deepest interest, not only to
themselves, but to the civilized world, since it is scarcely possible
that a war could exist between them without endangering the peace of
Christendom. The immediate effect of the treaty upon ourselves will be
felt in the security afforded to mercantile enterprise, which, no longer
apprehensive of interruption, adventures its speculations in the most
distant seas, and, freighted with the diversified productions of every
land, returns to bless our own. There is nothing in the treaty which in
the slightest degree compromits the honor or dignity of either nation.
Next to the settlement of the boundary line, which must always be a
matter of difficulty between states as between individuals, the question
which seemed to threaten the greatest embarrassment was that connected
with the African slave trade.

By the tenth article of the treaty of Ghent it was expressly declared
that--

Whereas the traffic in slaves is irreconcilable with the principles of
humanity and justice, and whereas both His Majesty and the United States
are desirous of continuing their efforts to promote its entire
abolition, it is hereby agreed that both the contracting parties shall
use their best endeavors to accomplish so desirable an object.

In the enforcement of the laws and treaty stipulations of Great Britain
a practice had threatened to grow up on the part of its cruisers of
subjecting to visitation ships sailing under the American flag, which,
while it seriously involved our maritime rights, would subject to
vexation a branch of our trade which was daily increasing, and which
required the fostering care of Government. And although Lord Aberdeen in
his correspondence with the American envoys at London expressly
disclaimed all right to detain an American ship on the high seas, even
if found with a cargo of slaves on board, and restricted the British
pretension to a mere claim to visit and inquire, yet it could not well
be discerned by the Executive of the United States how such visit and
inquiry could be made without detention on the voyage and consequent
interruption to the trade. It was regarded as the right of search
presented only in a new form and expressed in different words, and I
therefore felt it to be my duty distinctly to declare in my annual
message to Congress that no such concession could be made, and that the
United States had both the will and the ability to enforce their own
laws and to protect their flag from being used for purposes wholly
forbidden by those laws and obnoxious to the moral censure of the world.
Taking the message as his letter of instructions, our then minister at
Paris felt himself required to assume the same ground in a remonstrance
which he felt it to be his duty to present to Mr. Guizot, and through
him to the King of the French, against what has been called the
"quintuple treaty;" and his conduct in this respect met with the
approval of this Government. In close conformity with these views the
eighth article of the treaty was framed; which provides "that each
nation shall keep afloat in the African seas a force not less than 80
guns, to act separately and apart, under instructions from their
respective Governments, and for the enforcement of their respective laws
and obligations." From this it will be seen that the ground assumed in
the message has been fully maintained at the same time that the
stipulations of the treaty of Ghent are to be carried out in good faith
by the two countries, and that all pretense is removed for interference
with our commerce for any purpose whatever by a foreign government.
While, therefore, the United States have been standing up for the
freedom of the seas, they have not thought proper to make that a pretext
for avoiding a fulfillment of their treaty stipulations or a ground for
giving countenance to a trade reprobated by our laws. A similar
arrangement by the other great powers could not fail to sweep from the
ocean the slave trade without the interpolation of any new principle
into the maritime code. We may be permitted to hope that the example
thus set will be followed by some if not all of them. We thereby also
afford suitable protection to the fair trader in those seas, thus
fulfilling at the same time the dictates of a sound policy and complying
with the claims of justice and humanity.

It would have furnished additional cause for congratulation if the
treaty could have embraced all subjects calculated in future to lead to
a misunderstanding between the two Governments. The Territory of the
United States commonly called the Oregon Territory, lying on the Pacific
Ocean north of the forty-second degree of latitude, to a portion of
which Great Britain lays claim, begins to attract the attention of our
fellow-citizens, and the tide of population which has reclaimed what was
so lately an unbroken wilderness in more contiguous regions is preparing
to flow over those vast districts which stretch from the Rocky Mountains
to the Pacific Ocean. In advance of the acquirement of individual rights
to these lands, sound policy dictates that every effort should be
resorted to by the two Governments to settle their respective claims. It
became manifest at an early hour of the late negotiations that any
attempt for the time being satisfactorily to determine those rights
would lead to a protracted discussion, which might embrace in its
failure other more pressing matters, and the Executive did not regard it
as proper to waive all the advantages of an honorable adjustment of
other difficulties of great magnitude and importance because this, not
so immediately pressing, stood in the way. Although the difficulty
referred to may not for several years to come involve the peace of the
two countries, yet I shall not delay to urge on Great Britain the
importance of its early settlement. Nor will other matters of commercial
importance to the two countries be overlooked, and I have good reason to
believe that it will comport with the policy of England, as it does with
that of the United States, to seize upon this moment, when most of the
causes of irritation have passed away, to cement the peace and amity of
the two countries by wisely removing all grounds of probable future
collision.

With the other powers of Europe our relations continue on the most
amicable footing. Treaties now existing with them should be rigidly
observed, and every opportunity compatible with the interests of the
United States should be seized upon to enlarge the basis of commercial
intercourse. Peace with all the world is the true foundation of our
policy, which can only be rendered permanent by the practice of equal
and impartial justice to all. Our great desire should be to enter only
into that rivalry which looks to the general good in the cultivation of
the sciences, the enlargement of the field for the exercise of the
mechanical arts, and the spread of commerce--that great civilizer--to
every land and sea. Carefully abstaining from interference in all
questions exclusively referring themselves to the political interests of
Europe, we may be permitted to hope an equal exemption from the
interference of European Governments in what relates to the States of
the American continent.

On the 23d of April last the commissioners on the part of the United
States under the convention with the Mexican Republic of the 11th of
April, 1839, made to the proper Department a final report in relation to
the proceedings of the commission. From this it appears that the total
amount awarded to the claimants by the commissioners and the umpire
appointed under that convention was $2,026,079.68. The arbiter having
considered that his functions were required by the convention to
terminate at the same time with those of the commissioners, returned to
the board, undecided for want of time, claims which had been allowed by
the American commissioners to the amount of $928,620.88. Other claims,
in which the amount sought to be recovered was $3,336,837.05, were
submitted to the board too late for its consideration. The minister of
the United States at Mexico has been duly authorized to make demand for
payment of the awards according to the terms of the convention and the
provisions of the act of Congress of the 12th of June, 1840. He has also
been instructed to communicate to that Government the expectations of
the Government of the United States in relation to those claims which
were not disposed of according to the provisions of the convention, and
all others of citizens of the United States against the Mexican
Government. He has also been furnished with other instructions, to be
followed by him in case the Government of Mexico should not find itself
in a condition to make present payment of the amount of the awards in
specie or its equivalent.

I am happy to be able to say that information which is esteemed
favorable both to a just satisfaction of the awards and a reasonable
provision for other claims has been recently received from Mr. Thompson,
the minister of the United States, who has promptly and efficiently
executed the instructions of his Government in regard to this important
subject.

The citizens of the United States who accompanied the late Texan
expedition to Santa Fe, and who were wrongfully taken and held as
prisoners of war in Mexico, have all been liberated.

A correspondence has taken place between the Department of State and the
Mexican minister of foreign affairs upon the complaint of Mexico that
citizens of the United States were permitted to give aid to the
inhabitants of Texas in the war existing between her and that Republic.
Copies of this correspondence are herewith communicated to Congress,
together with copies of letters on the same subject addressed to the
diplomatic corps at Mexico by the American minister and the Mexican
secretary of state.

Mexico has thought proper to reciprocate the mission of the United
States to that Government by accrediting to this a minister of the same
rank as that of the representative of the United States in Mexico. From
the circumstances connected with his mission favorable results are
anticipated from it. It is so obviously for the interest of both
countries as neighbors and friends that all just causes of mutual
dissatisfaction should be removed that it is to be hoped neither will
omit or delay the employment of any practicable and honorable means to
accomplish that end.

The affairs pending between this Government and several others of the
States of this hemisphere formerly under the dominion of Spain have
again within the past year been materially obstructed by the military
revolutions and conflicts in those countries.

The ratifications of the treaty between the United States and the
Republic of Ecuador of the 13th of June, 1839, have been exchanged, and
that instrument has been duly promulgated on the part of this
Government. Copies are now communicated to Congress with a view to
enable that body to make such changes in the laws applicable to our
intercourse with that Republic as may be deemed requisite.

Provision has been made by the Government of Chile for the payment of
the claim on account of the illegal detention of the brig Warrior at
Coquimbo in 1820. This Government has reason to expect that other claims
of our citizens against Chile will be hastened to a final and
satisfactory close.

The Empire of Brazil has not been altogether exempt from those
convulsions which so constantly afflict the neighboring republics.
Disturbances which recently broke out are, however, now understood to be
quieted. But these occurrences, by threatening the stability of the
governments, or by causing incessant and violent changes in them or in
the persons who administer them, tend greatly to retard provisions for a
just indemnity for losses and injuries suffered by individual subjects
or citizens of other states. The Government of the United States will
feel it to be its duty, however, to consent to no delay not unavoidable
in making satisfaction for wrongs and injuries sustained by its own
citizens. Many years having in some cases elapsed, a decisive and
effectual course of proceeding will be demanded of the respective
governments against whom claims have been preferred.

The vexatious, harassing, and expensive war which so long prevailed with
the Indian tribes inhabiting the peninsula of Florida has happily been
terminated, whereby our Army has been relieved from a service of the
most disagreeable character and the Treasury from a large expenditure.
Some casual outbreaks may occur, such as are incident to the close
proximity of border settlers and the Indians, but these, as in all other
cases, may be left to the care of the local authorities, aided when
occasion may require by the forces of the United States. A sufficient
number of troops will be maintained in Florida so long as the remotest
apprehensions of danger shall exist, yet their duties will be limited
rather to the garrisoning of the necessary posts than to the maintenance
of active hostilities. It is to be hoped that a territory so long
retarded in its growth will now speedily recover from the evils incident
to a protracted war, exhibiting in the increased amount of its rich
productions true evidences of returning wealth and prosperity. By the
practice of rigid justice toward the numerous Indian tribes residing
within our territorial limits and the exercise of a parental vigilance
over their interests, protecting them against fraud and intrusion, and
at the same time using every proper expedient to introduce among them
the arts of civilized life, we may fondly hope not only to wean them
from their love of war, but to inspire them with a love for peace and
all its avocations. With several of the tribes great progress in
civilizing them has already been made. The schoolmaster and the
missionary are found side by side, and the remnants of what were once
numerous and powerful nations may yet be preserved as the builders up of
a new name for themselves and their posterity.

The balance in the Treasury on the 1st of January, 1842, exclusive of
the amount deposited with the States, trust funds, and indemnities, was
$230,483.68. The receipts into the Treasury during the three first
quarters of the present year from all sources amount to $26,616,593.78,
of which more than fourteen millions were received from customs and
about one million from the public lands. The receipts for the fourth
quarter are estimated at nearly eight millions, of which four millions
are expected from customs and three millions and a half from loans and
Treasury notes. The expenditures of the first three quarters of the
present year exceed twenty-six millions, and those estimated for the
fourth quarter amount to about eight millions; and it is anticipated
there will be a deficiency of half a million on the 1st of January next,
but that the amount of outstanding warrants (estimated at $800,000) will
leave an actual balance of about $224,000 in the Treasury. Among the
expenditures of this year are more than eight millions for the public
debt and about $600,000 on account of the distribution to the States of
the proceeds of sales of the public lands.

The present tariff of duties was somewhat hastily and hurriedly passed
near the close of the late session of Congress. That it should have
defects can therefore be surprising to no one. To remedy such defects as
may be found to exist in any of its numerous provisions will not fail to
claim your serious attention. It may well merit inquiry whether the
exaction of all duties in cash does not call for the introduction of a
system which has proved highly beneficial in countries where it has been
adopted. I refer to the warehousing system. The first and most prominent
effect which it would produce would be to protect the market alike
against redundant or deficient supplies of foreign fabrics, both of
which in the long run are injurious as well to the manufacturer as the
importer. The quantity of goods in store being at all times readily
known, it would enable the importer with an approach to accuracy to
ascertain the actual wants of the market and to regulate himself
accordingly. If, however, he should fall into error by importing an
excess above the public wants, he could readily correct its evils by
availing himself of the benefits and advantages of the system thus
established. In the storehouse the goods imported would await the demand
of the market and their issues would be governed by the fixed principles
of demand and supply. Thus an approximation would be made to a
steadiness and uniformity of price, which if attainable would conduce to
the decided advantage of mercantile and mechanical operations.

The apprehension may be well entertained that without something to
ameliorate the rigor of cash payments the entire import trade may fall
into the hands of a few wealthy capitalists in this country and in
Europe. The small importer, who requires all the money he can raise for
investments abroad, and who can but ill afford to pay the lowest duty,
would have to subduct in advance a portion of his funds in order to pay
the duties, and would lose the interest upon the amount thus paid for
all the time the goods might remain unsold, which might absorb his
profits. The rich capitalist, abroad as well as at home, would thus
possess after a short time an almost exclusive monopoly of the import
trade, and laws designed for the benefit of all would thus operate for
the benefit of a few--a result wholly uncongenial with the spirit of our
institutions and antirepublican in all its tendencies. The warehousing
system would enable the importer to watch the market and to select his
own time for offering his goods for sale. A profitable portion of the
carrying trade in articles entered for the benefit of drawback must also
be most seriously affected without the adoption of some expedient to
relieve the cash system. The warehousing system would afford that
relief, since the carrier would have a safe recourse to the public
storehouses and might without advancing the duty reship within some
reasonable period to foreign ports. A further effect of the measure
would be to supersede the system of drawbacks, thereby effectually
protecting the Government against fraud, as the right of debenture would
not attach to goods after their withdrawal from the public stores.

In revising the existing tariff of duties, should you deem it proper to
do so at your present session, I can only repeat the suggestions and
recommendations which upon several occasions I have heretofore felt it
to be my duty to offer to Congress. The great primary and controlling
interest of the American people is union--union not only in the mere
forms of government, forms which may be broken, but union rounded in an
attachment of States and individuals for each other. This union in
sentiment and feeling can only be preserved by the adoption of that
course of policy which, neither giving exclusive benefits to some nor
imposing unnecessary burthens upon others, shall consult the interests
of all by pursuing a course of moderation and thereby seeking to
harmonize public opinion, and causing the people everywhere to feel and
to know that the Government is careful of the interests of all alike.
Nor is there any subject in regard to which moderation, connected with a
wise discrimination, is more necessary than in the imposition of duties
on imports. Whether reference be had to revenue, the primary object in
the imposition of taxes, or to the incidents which necessarily flow from
their imposition, this is entirely true. Extravagant duties defeat their
end and object, not only by exciting in the public mind an hostility to
the manufacturing interests, but by inducing a system of smuggling on an
extensive scale and the practice of every manner of fraud upon the
revenue, which the utmost vigilance of Government can not effectually
suppress. An opposite course of policy would be attended by results
essentially different, of which every interest of society, and none more
than those of the manufacturer, would reap important advantages. Among
the most striking of its benefits would be that derived from the general
acquiescence of the country in its support and the consequent permanency
and stability which would be given to all the operations of industry. It
can not be too often repeated that no system of legislation can be wise
which is fluctuating and uncertain. No interest can thrive under it. The
prudent capitalist will never adventure his capital in manufacturing
establishments, or in any other leading pursuit of life, if there exists
a state of uncertainty as to whether the Government will repeal
to-morrow what it has enacted to-day. Fitful profits, however high, if
threatened with a ruinous reduction by a vacillating policy on the part
of Government, will scarcely tempt him to trust the money which he has
acquired by a life of labor upon the uncertain adventure. I therefore,
in the spirit of conciliation, and influenced by no other desire than to
rescue the great interests of the country from the vortex of political
contention, and in the discharge of the high and solemn duties of the
place which I now occupy, recommend moderate duties, imposed with a wise
discrimination as to their several objects, as being not only most
likely to be durable, but most advantageous to every interest of
society.

The report of the Secretary of the War Department exhibits a very full
and satisfactory account of the various and important interests
committed to the charge of that officer. It is particularly gratifying
to find that the expenditures for the military service are greatly
reduced in amount--that a strict system of economy has been introduced
into the service and the abuses of past years greatly reformed. The
fortifications on our maritime frontier have been prosecuted with much
vigor, and at many points our defenses are in a very considerable state
of forwardness. The suggestions in reference to the establishment of
means of communication with our territories on the Pacific and to the
surveys so essential to a knowledge of the resources of the intermediate
country are entitled to the most favorable consideration. While I would
propose nothing inconsistent with friendly negotiations to settle the
extent of our claims in that region, yet a prudent forecast points out
the necessity of such measures as may enable us to maintain our rights.
The arrangements made for preserving our neutral relations on the
boundary between us and Texas and keeping in check the Indians in that
quarter will be maintained so long as circumstances may require. For
several years angry contentions have grown out of the disposition
directed by law to be made of the mineral lands held by the Government
in several of the States. The Government is constituted the landlord,
and the Citizens of the States wherein lie the lands are its tenants.
The relation is an unwise one, and it would be much more conducive of
the public interest that a sale of the lands should be made than that
they should remain in their present condition. The supply of the ore
would be more abundantly and certainly furnished when to be drawn from
the enterprise and the industry of the proprietor than under the present
system.

The recommendations of the Secretary in regard to the improvements of
the Western waters and certain prominent harbors on the Lakes merit, and
I doubt not will receive, your serious attention. The great importance
of these subjects to the prosperity of the extensive region referred to
and the security of the whole country in time of war can not escape
observation. The losses of life and property which annually occur in the
navigation of the Mississippi alone because of the dangerous
obstructions in the river make a loud demand upon Congress for the
adoption of efficient measures for their removal.

The report of the Secretary of the Navy will bring you acquainted with
that important branch of the public defenses. Considering the already
vast and daily increasing commerce of the country, apart from the
exposure to hostile inroad of an extended seaboard, all that relates to
the Navy is calculated to excite particular attention. Whatever tends to
add to its efficiency without entailing unnecessary charges upon the
Treasury is well worthy of your serious consideration. It will be seen
that while an appropriation exceeding by more than a million the
appropriations of the current year is asked by the Secretary, yet that
in this sum is proposed to be included $400,000 for the purchase of
clothing, which when once expended will be annually reimbursed by the
sale of the clothes, and will thus constitute a perpetual fund without
any new appropriation to the same object. To this may also be added
$50,000 asked to cover the arrearages of past years and $250,000 in
order to maintain a competent squadron on the coast of Africa; all of
which when deducted will reduce the expenditures nearly within the
limits of those of the current year. While, however, the expenditures
will thus remain very nearly the same as of the antecedent year, it is
proposed to add greatly to the operations of the marine, and in lieu of
only 25 ships in commission and but little in the way of building, to
keep with the same expenditure 41 vessels afloat and to build 12 ships
of a small class.

A strict system of accountability is established and great pains are
taken to insure industry, fidelity, and economy in every department of
duty. Experiments have been instituted to test the quality of various
materials, particularly copper, iron, and coal, so as to prevent fraud
and imposition.

It will appear by the report of the Postmaster-General that the great
point which for several years has been so much desired has during the
current year been fully accomplished. The expenditures of the Department
for current service have been brought within its income without
lessening its general usefulness. There has been an increase of revenue
equal to $166,000 for the year 1842 over that of 1841, without, as it is
believed, any addition having been made to the number of letters and
newspapers transmitted through the mails. The post-office laws have been
honestly administered, and fidelity has been observed in accounting for
and paying over by the subordinates of the Department the moneys which
have been received. For the details of the service I refer you to the
report.

I flatter myself that the exhibition thus made of the condition of the
public administration will serve to convince you that every proper
attention has been paid to the interests of the country by those who
have been called to the heads of the different Departments. The
reduction in the annual expenditures of the Government already
accomplished furnishes a sure evidence that economy in the application
of the public moneys is regarded as a paramount duty.

At peace with all the world, the personal liberty of the citizen
sacredly maintained and his rights secured under political institutions
deriving all their authority from the direct sanction of the people,
with a soil fertile almost beyond example and a country blessed with
every diversity of climate and production, what remains to be done in
order to advance the happiness and prosperity of such a people? Under
ordinary circumstances this inquiry could readily be answered. The best
that probably could be done for a people inhabiting such a country would
be to fortify their peace and security in the prosecution of their
various pursuits by guarding them against invasion from without and
violence from within. The rest for the greater part might be left to
their own energy and enterprise. The chief embarrassments which at the
moment exhibit themselves have arisen from overaction, and the most
difficult task which remains to be accomplished is that of correcting
and overcoming its effects. Between the years 1833 and 1838 additions
were made to bank capital and bank issues, in the form of notes designed
for circulation, to an extent enormously great. The question seemed to
be not how the best currency could be provided, but in what manner the
greatest amount of bank paper could be put in circulation. Thus a vast
amount of what was called money--since for the time being it answered
the purposes of money--was thrown upon the country, an overissue which
was attended, as a necessary consequence, by an extravagant increase of
the prices of all articles of property, the spread of a speculative
mania all over the country, and has finally ended in a general
indebtedness on the part of States and individuals, the prostration of
public and private credit, a depreciation in the market value of real
and personal estate, and has left large districts of country almost
entirely without any circulating medium. In view of the fact that in
1830 the whole bank-note circulation within the United States amounted
to but $61,323,898, according to the Treasury statements, and that an
addition had been made thereto of the enormous sum of $88,000,000 in
seven years (the circulation on the 1st of January, 1837, being stated
at $149,185,890), aided by the great facilities afforded in obtaining
loans from European capitalists, who were seized with the same
speculative mania which prevailed in the United States, and the large
importations of funds from abroad--the result of stock sales and
loans--no one can be surprised at the apparent but unsubstantial state
of prosperity which everywhere prevailed over the land; and as little
cause of surprise should be felt at the present prostration of
everything and the ruin which has befallen so many of our
fellow-citizens in the sudden withdrawal from circulation of so large an
amount of bank issues since 1837--exceeding, as is believed, the amount
added to the paper currency for a similar period antecedent to 1837--it
ceases to be a matter of astonishment that such extensive shipwreck
should have been made of private fortunes or that difficulties should
exist in meeting their engagements on the part of the debtor States;
apart from which, if there be taken into account the immense losses
sustained in the dishonor of numerous banks, it is less a matter of
surprise that insolvency should have visited many of our fellow-citizens
than that so many should have escaped the blighting influences of the
times.

In the solemn conviction of these truths and with an ardent desire to
meet the pressing necessities of the country, I felt it to be my duty to
cause to be submitted to you at the commencement of your last session
the plan of an exchequer, the whole power and duty of maintaining which
in purity and vigor was to be exercised by the representatives of the
people and the States, and therefore virtually by the people themselves.
It was proposed to place it under the control and direction of a
Treasury board to consist of three commissioners, whose duty it should
be to see that the law of its creation was faithfully executed and that
the great end of supplying a paper medium of exchange at all times
convertible into gold and silver should be attained. The board thus
constituted was given as much permanency as could be imparted to it
without endangering the proper share of responsibility which should
attach to all public agents. In order to insure all the advantages of a
well-matured experience, the commissioners were to hold their offices
for the respective periods of two, four, and six years, thereby securing
at all times in the management of the exchequer the services of two men
of experience; and to place them in a condition to exercise perfect
independence of mind and action it was provided that their removal
should only take place for actual incapacity or infidelity to the trust,
and to be followed by the President with an exposition of the causes of
such removal, should it occur. It was proposed to establish subordinate
boards in each of the States, under the same restrictions and
limitations of the power of removal, which, with the central board,
should receive, safely keep, and disburse the public moneys. And in
order to furnish a sound paper medium of exchange the exchequer should
retain of the revenues of the Government a sum not to exceed $5,000,000
in specie, to be set apart as required by its operations, and to pay the
public creditor at his own option either in specie or Treasury notes of
denominations not less than $5 nor exceeding $100, which notes should be
redeemed at the several places of issue, and to be receivable at all
times and everywhere in payment of Government dues, with a restraint
upon such issue of bills that the same should not exceed the maximum of
$15,000,000. In order to guard against all the hazards incident to
fluctuations in trade, the Secretary of the Treasury was invested with
authority to issue $5,000,000 of Government stock, should the same at
any time be regarded as necessary in order to place beyond hazard the
prompt redemption of the bills which might be thrown into circulation;
thus in fact making the issue of $15,000,000 of exchequer bills rest
substantially on $10,000,000, and keeping in circulation never more than
one and one-half dollars for every dollar in specie. When to this it is
added that the bills are not only everywhere receivable in Government
dues, but that the Government itself would be bound for their ultimate
redemption, no rational doubt can exist that the paper which the
exchequer would furnish would readily enter into general circulation and
be maintained at all times at or above par with gold and silver, thereby
realizing the great want of the age and fulfilling the wishes of the
people. In order to reimburse the Government the expenses of the plan,
it was proposed to invest the exchequer with the limited authority to
deal in bills of exchange (unless prohibited by the State in which an
agency might be situated) having only thirty days to run and resting on
a fair and bona fide basis. The legislative will on this point might be
so plainly announced as to avoid all pretext for partiality or
favoritism. It was furthermore proposed to invest this Treasury agent
with authority to receive on deposit to a limited amount the specie
funds of individuals and to grant certificates therefor to be redeemed
on presentation, under the idea, which is believed to be well founded,
that such certificates would come in aid of the exchequer bills in
supplying a safe and ample paper circulation. Or if in place of the
contemplated dealings in exchange the exchequer should be authorized not
only to exchange its bills for actual deposits of specie, but, for
specie or its equivalent, to sell drafts, charging therefor a small but
reasonable premium, I can not doubt but that the benefits of the law
would be speedily manifested in the revival of the credit, trade, and
business of the whole country. Entertaining this opinion, it becomes my
duty to urge its adoption upon Congress by reference to the strongest
considerations of the public interests, with such alterations in its
details as Congress may in its wisdom see fit to make.

I am well aware that this proposed alteration and amendment of the laws
establishing the Treasury Department has encountered various objections,
and that among others it has been proclaimed a Government bank of
fearful and dangerous import. It is proposed to confer upon it no
extraordinary power. It purports to do no more than pay the debts of the
Government with the redeemable paper of the Government, in which respect
it accomplishes precisely what the Treasury does daily at this time in
issuing to the public creditors the Treasury notes which under law it is
authorized to issue. It has no resemblance to an ordinary bank, as it
furnishes no profits to private stockholders and lends no capital to
individuals. If it be objected to as a Government bank and the objection
be available, then should all the laws in relation to the Treasury be
repealed and the capacity of the Government to collect what is due to it
or pay what it owes be abrogated.

This is the chief purpose of the proposed exchequer, and surely if in
the accomplishment of a purpose so essential it affords a sound
circulating medium to the country and facilities to trade it should be
regarded as no slight recommendation of it to public consideration.
Properly guarded by the provisions of law, it can run into no dangerous
evil, nor can any abuse arise under it but such as the Legislature
itself will be answerable for if it be tolerated, since it is but the
creature of the law and is susceptible at all times of modification,
amendment, or repeal at the pleasure of Congress. I know that it has
been objected that the system would be liable to be abused by the
Legislature, by whom alone it could be abused, in the party conflicts of
the day; that such abuse would manifest itself in a change of the law
which would authorize an excessive issue of paper for the purpose of
inflating prices and winning popular favor. To that it may be answered
that the ascription of such a motive to Congress is altogether
gratuitous and inadmissible. The theory of our institutions would lead
us to a different conclusion. But a perfect security against a
proceeding so reckless would be found to exist in the very nature of
things. The political party which should be so blind to the true
interests of the country as to resort to such an expedient would
inevitably meet with final overthrow in the fact that the moment the
paper ceased to be convertible into specie or otherwise promptly
redeemed it would become worthless, and would in the end dishonor the
Government, involve the people in ruin and such political party in
hopeless disgrace. At the same time, such a view involves the utter
impossibility of furnishing any currency other than that of the precious
metals; for if the Government itself can not forego the temptation of
excessive paper issues what reliance can be placed in corporations upon
whom the temptations of individual aggrandizement would most strongly
operate? The people would have to blame none but themselves for any
injury that might arise from a course so reckless, since their agents
would be the wrongdoers and they the passive spectators.

There can be but three kinds of public currency--first, gold and silver;
second, the paper of State institutions; or, third, a representative of
the precious metals provided by the General Government or under its
authority. The subtreasury system rejected the last in any form, and as
it was believed that no reliance could be placed on the issues of local
institutions for the purposes of general circulation it necessarily and
unavoidably adopted specie as the exclusive currency for its own use;
and this must ever be the case unless one of the other kinds be used.
The choice in the present state of public sentiment lies between an
exclusive specie currency on the one hand and Government issues of some
kind on the other. That these issues can not be made by a chartered
institution is supposed to be conclusively settled. They must be made,
then, directly by Government agents. For several years past they have
been thus made in the form of Treasury notes, and have answered a
valuable purpose. Their usefulness has been limited by their being
transient and temporary; their ceasing to bear interest at given periods
necessarily causes their speedy return and thus restricts their range of
circulation, and being used only in the disbursements of Government they
can not reach those points where they are most required. By rendering
their use permanent, to the moderate extent already mentioned, by
offering no inducement for their return and by exchanging them for coin
and other values, they will constitute to a certain extent the general
currency so much needed to maintain the internal trade of the country.
And this is the exchequer plan so far as it may operate in furnishing a
currency.

I can not forego the occasion to urge its importance to the credit of
the Government in a financial point of view. The great necessity of
resorting to every proper and becoming expedient in order to place the
Treasury on a footing of the highest respectability is entirely obvious.
The credit of the Government may be regarded as the very soul of the
Government itself--a principle of vitality without which all its
movements are languid and all its operations embarrassed. In this spirit
the Executive felt itself bound by the most imperative sense of duty to
submit to Congress at its last session the propriety of making a
specific pledge of the land fund as the basis for the negotiation of the
loans authorized to be contracted. I then thought that such an
application of the public domain would without doubt have placed at the
command of the Government ample funds to relieve the Treasury from the
temporary embarrassments under which it labored. American credit has
suffered a considerable shock in Europe from the large indebtedness of
the States and the temporary inability of some of them to meet the
interest on their debts. The utter and disastrous prostration of the
United States Bank of Pennsylvania had contributed largely to increase
the sentiment of distrust by reason of the loss and ruin sustained by
the holders of its stock, a large portion of whom were foreigners and
many of whom were alike ignorant of our political organization and of
our actual responsibilities.

It was the anxious desire of the Executive that in the effort to
negotiate the loan abroad the American negotiator might be able to point
the money lender to the fund mortgaged for the redemption of the
principal and interest of any loan he might contract, and thereby
vindicate the Government from all suspicion of bad faith or inability to
meet its engagements. Congress differed from the Executive in this view
of the subject. It became, nevertheless, the duty of the Executive to
resort to every expedient in its power to do so.

After a failure in the American market a citizen of high character and
talent was sent to Europe, with no better success; and thus the
mortifying spectacle has been presented of the inability of this
Government to obtain a loan so small as not in the whole to amount to
more than one-fourth of its ordinary annual income, at a time when the
Governments of Europe, although involved in debt and with their subjects
heavily burthened with taxation, readily obtained loans of any amount at
a greatly reduced rate of interest. It would be unprofitable to look
further into this anomalous state of things, but I can not conclude
without adding that for a Government which has paid off its debts of two
wars with the largest maritime power of Europe, and now owing a debt
which is almost next to nothing when compared with its boundless
resources--a Government the strongest in the world, because emanating
from the popular will and firmly rooted in the affections of a great and
free people, and whose fidelity to its engagements has never been
questioned--for such a Government to have tendered to the capitalists of
other countries an opportunity for a small investment in its stock, and
yet to have failed, implies either the most unfounded distrust in its
good faith or a purpose to obtain which the course pursued is the most
fatal which could have been adopted. It has now become obvious to all
men that the Government must look to its own means for supplying its
wants, and it is consoling to know that these means are altogether
adequate for the object. The exchequer, if adopted, will greatly aid in
bringing about this result. Upon what I regard as a well-rounded
supposition that its bills would be readily sought for by the public
creditors and that the issue would in a short time reach the maximum of
$15,000,000, it is obvious that $10,000,000 would thereby be added to
the available means of the Treasury without cost or charge. Nor can I
fail to urge the great and beneficial effects which would be produced in
aid of all the active pursuits of life. Its effects upon the solvent
State banks, while it would force into liquidation those of an opposite
character through its weekly settlements, would be highly beneficial;
and with the advantages of a sound currency the restoration of
confidence and credit would follow with a numerous train of blessings.
My convictions are most strong that these benefits would flow from the
adoption of this measure; but if the result should be adverse there is
this security in connection with it--that the law creating it may be
repealed at the pleasure of the Legislature without the slightest
implication of its good faith.

I recommend to Congress to take into consideration the propriety of
reimbursing a fine imposed on General Jackson at New Orleans at the time
of the attack and defense of that city, and paid by him. Without
designing any reflection on the judicial tribunal which imposed the
fine, the remission at this day may be regarded as not unjust or
inexpedient. The voice of the civil authority was heard amidst the
glitter of arms and obeyed by those who held the sword, thereby giving
additional luster to a memorable military achievement. If the laws were
offended, their majesty was fully vindicated; and although the penalty
incurred and paid is worthy of little regard in a pecuniary point of
view, it can hardly be doubted that it would be gratifying to the
war-worn veteran, now in retirement and in the winter of his days, to be
relieved from the circumstances in which that judgment placed him. There
are cases in which public functionaries may be called on to weigh the
public interest against their own personal hazards, and if the civil law
be violated from praiseworthy motives or an overruling sense of public
danger and public necessity punishment may well be restrained within
that limit which asserts and maintains the authority of the law and the
subjection of the military to the civil power. The defense of New
Orleans, while it saved a city from the hands of the enemy, placed the
name of General Jackson among those of the greatest captains of the age
and illustrated one of the brightest pages of our history. Now that the
causes of excitement existing at the time have ceased to operate, it is
believed that the remission of this fine and whatever of gratification
that remission might cause the eminent man who incurred and paid it
would be in accordance with the general feeling and wishes of the
American people.

I have thus, fellow-citizens, acquitted myself of my duty under the
Constitution by laying before you as succinctly as I have been able the
state of the Union and by inviting your attention to measures of much
importance to the country. The executive will most zealously unite its
efforts with those of the legislative department in the accomplishment
of all that is required to relieve the wants of a common constituency or
elevate the destinies of a beloved country.

***

State of the Union Address
John Tyler
December 6, 1843

To the Senate and House of Representatives of the United States:

If any people ever had cause to render up thanks to the Supreme Being
for parental care and protection extended to them in all the trials and
difficulties to which they have been from time to time exposed, we
certainly are that people. From the first settlement of our forefathers
on this continent, through the dangers attendant upon the occupation of
a savage wilderness, through a long period of colonial dependence,
through the War of the Revolution, in the wisdom which led to the
adoption of the existing forms of republican government, in the hazards
incident to a war subsequently waged with one of the most powerful
nations of the earth, in the increase of our population, in the spread
of the arts and sciences, and in the strength and durability conferred
on political institutions emanating from the people and sustained by
their will, the superintendence of an overruling Providence has been
plainly visible. As preparatory, therefore, to entering once more upon
the high duties of legislation, it becomes us humbly to acknowledge our
dependence upon Him as our guide and protector and to implore a
continuance of His parental watchfulness over our beloved country. We
have new cause for the expression of our gratitude in the preservation
of the health of our fellow-citizens, with some partial and local
exceptions, during the past season, for the abundance with which the
earth has yielded up its fruits to the labors of the husbandman, for the
renewed activity which has been imparted to commerce, for the revival of
trade in all its departments, for the increased rewards attendant on the
exercise of the mechanic arts, for the continued growth of our
population and the rapidly reviving prosperity of the whole country. I
shall be permitted to exchange congratulations with you, gentlemen of
the two Houses of Congress, on these auspicious circumstances, and to
assure you in advance of my ready disposition to concur with you in the
adoption of all such measures as shall be calculated to increase the
happiness of our constituents and to advance the glory of our common
country.

Since the last adjournment of Congress the Executive has relaxed no
effort to render indestructible the relations of amity which so happily
exist between the United States and other countries. The treaty lately
concluded with Great Britain has tended greatly to increase the good
understanding which a reciprocity of interests is calculated to
encourage, and it is most ardently to be hoped that nothing may
transpire to interrupt the relations of amity which it is so obviously
the policy of both nations to cultivate. A question of much importance
still remains to be adjusted between them. The territorial limits of the
two countries relation to what is commonly known as the Oregon Territory
still remain in dispute. The United States would be at all times
indisposed to aggrandize itself at the expense of any other nation; but
while they would be restrained by principles of honor, which should
govern the conduct of nations as well as that of individuals, from
setting up a demand for territory which does not belong to them, they
would as unwillingly sent to a surrender of their rights. After the most
rigid and, as far as practicable, unbiased examination of the subject,
the United States have always contended that their rights appertain to
the entire region of country lying on the Pacific and embraced within 42
and 54  40' of north latitude. This claim being controverted by Great
Britain, those who have preceded the present Executive--actuated, no
doubt, by an earnest desire to adjust the matter upon terms mutually
satisfactory to both countries--have caused to be submitted to the
British Government propositions for settlement and final adjustment,
which, however, have not proved heretofore acceptable to it. Our
minister at London has, under instructions, again brought the subject to
the consideration of that Government, and while nothing will be done to
compromise the rights or honor of the United States, every proper
expedient will be resorted to in order to bring the negotiation now in
the progress of resumption to a speedy and happy termination. In the
meantime it is proper to remark that many of our citizens are either
already established in the Territory or are on their way thither for the
purpose of forming permanent settlements, while others are preparing to
follow; and in view of these facts I must repeat the recommendation
contained in previous messages for the establishment of military posts
at such places on the line of travel as will furnish security and
protection to our hardy adventurers against hostile tribes of Indians
inhabiting those extensive regions. Our laws should also follow them, so
modified as the circumstances of the case may seem to require. Under the
influence of our free system of government new republics are destined to
spring up at no distant day on the shores of the Pacific similar in
policy and in feeling to those existing on this side of the Rocky
Mountains, and giving a wider and more extensive spread to the
principles of civil and religious liberty.

I am happy to inform you that the cases which have from time to time
arisen of the detention of American vessels by British cruisers on the
coast of Africa under pretense of being engaged in the slave trade have
been placed in a fair train of adjustment. In the case of the William
and Francis full satisfaction will be allowed. In the cases of the
Tygris and Seamew the British Government admits that satisfaction is
due. In the case of the Jones the sum accruing from the sale of that
vessel and cargo will be paid to the owners, while I can not but flatter
myself that full indemnification will be allowed for all damages
sustained by the detention of the vessel; and in the case of the Douglas
Her Majesty's Government has expressed its determination to make
indemnification. Strong hopes are therefore entertained that most, if
not all, of these cases will be speedily adjusted. No new cases have
arisen since the ratification of the treaty of Washington, and it is
confidently anticipated that the slave trade, under the operation of the
eighth article of that treaty, will be altogether suppressed.

The occasional interruption experienced by our fellow-citizens engaged
in the fisheries on the neighboring coast of Nova Scotia has not failed
to claim the attention of the Executive. Representations upon this
subject have been made, but as yet no definitive answer to those
representations has been received from the British Government.

Two other subjects of comparatively minor importance, but nevertheless
of too much consequence to be neglected, remain still to be adjusted
between the two countries. By the treaty between the United States and
Great Britain of July, 1815, it is provided that no higher duties shall
be levied in either country on articles imported from the other than on
the same articles imported from any other place. In 1836 rough rice by
act of Parliament was admitted from the coast of Africa into Great
Britain on the payment of a duty of 1 penny a quarter, while the same
article from all other countries, including the United States, was
subjected to the payment of a duty of 20 shillings a quarter. Our
minister at London has from time to time brought this subject to the
attention of the British Government, but so far without success. He is
instructed to renew his representations upon it.

Some years since a claim was preferred against the British Government on
the part of certain American merchants for the return of export duties
paid by them on shipments of woolen goods to the United States after the
duty on similar articles exported to other countries had been repealed,
and consequently in contravention of the commercial convention between
the two nations securing to us equality in such cases. The principle on
which the claim rests has long since been virtually admitted by Great
Britain, but obstacles to a settlement have from time to time been
interposed, so that a large portion of the amount claimed has not yet
been refunded. Our minister is now engaged in the prosecution of the
claim, and I can not but persuade myself that the British Government
will no longer delay its adjustment.

I am happy to be able to say that nothing has occurred to disturb in any
degree the relations of amity which exist between the United States and
France, Austria, and Russia, as well as with the other powers of Europe,
since the adjournment of Congress. Spain has been agitated with internal
convulsions for many years, from the effects of which, it is hoped, she
is destined speedily to recover, when, under a more liberal system of
commercial policy on her part, our trade with her may again fill its old
and, so far as her continental possessions are concerned, its almost
forsaken channels, thereby adding to the mutual prosperity of the two
countries.

The Germanic Association of Customs and Commerce, which since its
establishment in 1833 has been steadily growing in power and importance,
and consists at this time of more than twenty German States, and
embraces a population of 27,000,000 people united for all fire purposes
of commercial intercourse with each other and with foreign states,
offers to the latter the most valuable exchanges on principles more
liberal than are offered in the fiscal system of any other European
power. From its origin the importance of the German union has never been
lost sight of by the United States. The industry, morality, and other
valuable qualities of the German nation have always been well known and
appreciated. On this subject I invite the attention of Congress to the
report of the Secretary of State, from which it will be seen that while
our cotton is admitted free of duty and the duty on rice has been much
reduced (which has already led to a greatly increased consumption), a
strong disposition has been recently evinced by that great body to
reduce, upon certain conditions, their present duty upon tobacco. This
being the first intimation of a concession on this interesting subject
ever made by any European power, I can not but regard it as well
calculated to remove the only impediment which has so far existed to the
most liberal commercial intercourse between us and them. In this view
our minister at Berlin, who has heretofore industriously pursued the
subject, has been instructed to enter upon the negotiation of a
commercial treaty, which, while it will open new advantages to the
agricultural interests of the United States and a more free and expanded
field for commercial operations, will affect injuriously no existing
interest of the Union. Should the negotiation be crowned with success,
its results will be communicated to both Houses of Congress.

I communicate herewith certain dispatches received from our minister at
Mexico, and also a correspondence which has recently occurred between
the envoy from that Republic and the Secretary of State. It must but be
regarded as not a little extraordinary that the Government of Mexico, in
anticipation of a public discussion (which it has been pleased to infer
from newspaper publications as likely to take place in Congress,
relating to the annexation of Texas to the United States), should have
so far anticipated the result of such discussion as to have announced
its determination to visit any such anticipated decision by a formal
declaration of war against the United States. If designed to prevent
Congress from introducing that question as a fit subject for its calm
deliberation and final judgment, the Executive has no reason to doubt
that it will entirely fail of its object. The representatives of a brave
and patriotic people will suffer no apprehension of future consequences
to embarrass them in the course of their proposed deliberations, nor
will the executive department of the Government fail for any such cause
to discharge its whole duty to the country.

The war which has existed for so long a time between Mexico and Texas
has since the battle of San Jacinto consisted for the most part of
predatory incursions, which, while they have been attended with much of
suffering to individuals and have kept the borders of the two countries
in a state of constant alarm, have failed to approach to any definitive
result. Mexico has fitted out no formidable armament by land or by sea
for the subjugation of Texas. Eight years have now elapsed since Texas
declared her independence of Mexico, and during that time she has been
recognized as a sovereign power by several of the principal civilized
states. Mexico, nevertheless, perseveres in her plans of reconquest, and
refuses to recognize her independence. The predatory incursions to which
I have alluded have been attended in one instance with the breaking up
of the courts of justice, by the seizing upon the persons of the judges,
jury, and officers of the court and dragging them along with unarmed,
and therefore noncombatant, citizens into a cruel and oppressive
bondage, thus leaving crime to go unpunished and immorality to pass
unreproved. A border warfare is evermore to be deprecated, and over such
a war as has existed for so many years between these two States humanity
has had great cause to lament. Nor is such a condition of things to be
deplored only because of the individual suffering attendant upon it. The
effects are far more extensive. The Creator of the Universe has given
man the earth for his resting place and its fruits for his subsistence.
Whatever, therefore, shall make the first or any part of it a scene of
desolation affects injuriously his heritage and may be regarded as a
general calamity. Wars may sometimes be necessary, but all nations have
a common interest in bringing them speedily to a close. The United
States have an immediate interest in seeing an end put to the state of
hostilities existing between Mexico and Texas. They are our neighbors,
of the same continent, with whom we are not only desirous of cultivating
the relations of amity, but of the most extended commercial intercourse,
and to practice all the rites of a neighborhood hospitality. Our own
interests are involved in the matter, since, however neutral may be our
course of policy, we can not hope to escape the effects of a spirit of
jealousy on the part of both of the powers. Nor can this Government be
indifferent to the fact that a warfare such as is waged between those
two nations is calculated to weaken both powers and finally to render
them--and especially the weaker of the two--the subjects of interference
on the part of stronger and more powerful nations, who, intent only on
advancing their own peculiar views, may sooner or later attempt to bring
about a compliance with terms as the condition of their interposition
alike derogatory to the nation granting them and detrimental to the
interests of the United States. We could not be expected quietly to
permit any such interference to our disadvantage. Considering that Texas
is separated from the United States by a mere geographical line; that
her territory, in the opinion of many, down to a late period formed a
portion of the territory of the United States; that it is homogeneous in
its population and pursuits with adjoining States, makes contributions
to the commerce of the world in the same articles with them, and that
most of her inhabitants have been citizens of the United States, speak
the same language, and live under similar political institutions with
ourselves, this Government is bound by every consideration of interest
as well as of sympathy to see that she shall be left free to act,
especially in regard to her domestic affairs, unawed by force and
unrestrained by the policy or views of other countries. In full view of
all these considerations, the Executive has not hesitated to express to
the Government of Mexico how deeply it deprecated a continuance of the
war and how anxiously it desired to witness its termination. I can not
but think that it becomes the United States, as the oldest of the
American Republics, to hold a language to Mexico upon this subject of an
unambiguous character. It is time that this war had ceased. There must
be a limit to all wars, and if the parent state after an eight years'
struggle has failed to reduce to submission a portion of its subjects
standing out in revolt against it, and who have not only proclaimed
themselves to be independent, but have been recognized as such by other
powers, she ought not to expect that other nations will quietly look on,
to their obvious injury, upon a protraction of hostilities. These United
States threw off their colonial dependence and established independent
governments, and Great Britain, after having wasted her energies in the
attempt to subdue them for a less period than Mexico has attempted to
subjugate Texas, had the wisdom and justice to acknowledge their
independence, thereby recognizing the obligation which rested on her as
one of the family of nations. An example thus set by one of the proudest
as well as most powerful nations of the earth it could in no way
disparage Mexico to imitate. While, therefore, the Executive would
deplore any collision with Mexico or any disturbance of the friendly
relations which exist between the two countries, it can not permit that
Government to control its policy, whatever it may be, toward Texas, but
will treat her--as by the recognition of her independence the United
States have long since declared they would do--as entirely independent
of Mexico. The high obligations of public duty may enforce from the
constituted authorities of the United States a policy which the course
persevered in by Mexico will have mainly contributed to produce, and the
Executive in such a touting they will with confidence throw itself upon
the patriotism of the people to sustain the Government in its course of
action.

Measures of an unusual character have recently been adopted by the
Mexican Government, calculated in no small degree to affect the trade of
other nations with Mexico and to operate injuriously to the United
States. All foreigners, by a decree of the 23d day of September, and
after six months from the day of its promulgation, are forbidden to
carry on the business of selling by retail any goods within the confines
of Mexico. Against this decree our minister has not failed to
remonstrate.

The trade heretofore carried on by our citizens with Santa Fe, in which
much capital was already invested and which was becoming of daily
increasing importance, has suddenly been arrested by a decree of virtual
prohibition on the part of the Mexican Government. Whatever may be the
right of Mexico to prohibit any particular course of trade to the
citizens or subjects of foreign powers, this late procedure, to say the
least of it, wears a harsh and unfriendly aspect.

The installments on the claims recently settled by the convention with
Mexico have been punctually paid as they have fallen due, and our
minister is engaged in urging the establishment of a new commission in
pursuance of the convention for the settlement of unadjusted claims.

With the other American States our relations of amity and good will have
remained uninterrupted. Our minister near the Republic of New Granada
has succeeded in effecting an adjustment of the claim upon that
Government for the schooner By Chance, which had been pending for many
years. The claim for the brig Morris, which had its origin during the
existence of the Republic of Colombia, and indemnification for which
since the dissolution of that Republic has devolved upon its several
members, will be urged with renewed zeal.

I have much pleasure in saying that the Government of Brazil has
adjusted the claim upon that Government in the case of the schooner John
S. Bryan, and that sanguine hopes are entertained that the same spirit
of justice will influence its councils in arriving at an early decision
upon the remaining claims, thereby removing all cause of dissension
between two powers whose interests are to some extent interwoven with
each other.

Our minister at Chili has succeeded in inducing a recognition by that
Government of the adjustment effected by his predecessor of the first
claim in the case of the Macedonian. The first installment has been
received by the claimants in the United States.

Notice of the exchange of ratifications of the treaty with Peru, which
will take place at Lima, has not yet reached this country, but is
shortly expected to be received, when the claims upon that Republic will
doubtless be liquidated and paid.

In consequence of a misunderstanding between this Government and that of
Buenos Ayres, occurring several years ago, this Government has remained
unrepresented at that Court, while a minister from it has been
constantly resident here. The causes of irritation have in a great
measure passed away, and it is in contemplation, in view of important
interests which have grown up in that country, at some early period
during the present session of Congress, with the concurrence of the
Senate, to restore diplomatic relations between the two countries.

Under the provisions of an act of Congress of the last session a
minister was dispatched from the United States to China in August of the
present year, who, from the latest accounts we have from him, was at
Suez, in Egypt, on the 25th of September last, on his route to China.

In regard to the Indian tribes residing within our jurisdictional
limits, the greatest vigilance of the Government has been exerted to
preserve them at peace among themselves and to inspire them with
feelings of confidence in the justice of this Government and to
cultivate friendship with the border inhabitants. This has happily
succeeded to a great extent, but it is a subject of regret that they
suffer themselves in some instances to be imposed upon by artful and
designing men and this notwithstanding all efforts of the Government to
prevent it.

The receipts into the Treasury for the calendar year 1843, exclusive of
loans, were little more than $ 18,000,000, and the expenditures,
exclusive of the payments on the public debt, will have been about
$23,000,000. By the act of 1842 a new arrangement of the fiscal year was
made, so that it should commence on the 1st day of July in each year.
The accounts and estimates for the current fiscal year will show that
the loans and Treasury notes made and issued before the close of the
last Congress to meet the anticipated deficiency have not been entirely
adequate. Although on the 1st of October last there was a balance in the
Treasury, in consequence of the provisions thus made, of $3,914,082.77,
yet the appropriations already made by Congress will absorb that balance
and leave a probable deficiency of $2,000,000 at the close of the
present fiscal year. There are outstanding Treasury notes to about the
amount of $4,600,000, and should they be returned upon the Treasury
during the fiscal year they will require provision for their redemption.
I do not, however, regard this as probable, since they have obviously
entered into the currency of the country and will continue to form a
portion of it if the system now adopted be continued. The loan of 1841,
amounting to $5,672,976.88, falls due on the 1st day of January, 1845,
and must be provided for or postponed by a new loan; and unless the
resources of revenue should be materially increased by you there will be
a probable deficiency for the service of the fiscal year ending June 30,
1845, of upward of $4,000,000.

The delusion incident to an enormously excessive paper circulation,
which gave a fictitious value to everything and stimulated adventure and
speculation to an extravagant extent, has been happily succeeded by the
substitution of the precious metals and paper promptly redeemable in
specie; and thus false values have disappeared and a sounder condition
of things has been introduced. This transition, although intimately
connected with the prosperity of the country, has nevertheless been
attended with much embarrassment to the Government in its financial
concerns. So long as the foreign importers could receive payment for
their cargoes in a currency of greatly less value than that in Europe,
but fully available here in the purchase of our agricultural productions
(their profits being immeasurably augmented by the operation), the
shipments were large and the revenues of the Government became
superabundant. But the change in the character of the circulation from a
nominal and apparently real value in the first stage of its existence to
an obviously depreciated value in its second, so that it no longer
answered the purposes of exchange or barter, and its ultimate
substitution by a sound metallic and paper circulation combined, has
been attended by diminished importations and a consequent falling off in
the revenue. This has induced Congress, from 1837, to resort to the
expedient of issuing Treasury notes, and finally of funding them, in
order to supply deficiencies. I can not, however, withhold the remark
that it is in no way compatible with the dignity of the Government that
a public debt should be created in time of peace to meet the current
expenses of the Government, or that temporary expedients should be
resorted to an hour longer than it is possible to avoid them. The
Executive can do no more than apply the means which Congress places in
its hands for the support of Government, and, happily for the good of
the country and for the preservation of its liberties, it possesses no
power to levy exactions on the people or to force from them
contributions to the public revenue in any form. It can only recommend
such measures as may in its opinion be called for by the wants of the
public service to Congress, with whom alone rests the power to "lay and
collect taxes, duties, imposts, and excises." This duty has upon several
occasions heretofore been performed. The present condition of things
gives flattering promise that trade and commerce are rapidly reviving,
and, fortunately for the country, the sources of revenue have only to be
opened in order to prove abundant.

While we can anticipate no considerable increase in the proceeds of the
sales of the public lands, for reasons perfectly obvious to all, for
several years to come, yet the public lands can not otherwise than be
regarded as the foundation of the public credit. With so large a body of
the most fertile lands in the world under the control and at the
disposal of this Government, no one can reasonably doubt the entire
ability to meet its engagements under every emergency. In seasons of
trial and difficulty similar to those through which we are passing the
capitalist makes his investments in the Government cut stocks with the
most assured confidence of ultimate reimbursement; and whatever may be
said of a period of great financial prosperity, such as existed for some
years after 1833, I should regard it as suicidal in a season of
financial embarrassment either to alienate the lands themselves or the
proceeds arising from their sales. The first and paramount duty of those
to whom may be intrusted the administration of public affairs is to
guard the public credit. In reestablishing the credit of this central
Government the readiest and most obvious mode is taken to restore the
credit of the States. The extremities can only be made sound by
producing a healthy action in the central Government, and the history of
the present day fully establishes the fact that an increase in the value
of the stocks of this Government will in a great majority of instances
be attended by an increase in the value of the stocks of the States. It
should therefore be a matter of general congratulation that amidst all
the embarrassments arising from surrounding circumstances the credit of
the Government should have been so fully restored that it has been
enabled to effect a loan of $7,000,000 to redeem that amount of Treasury
notes on terms more favorable than any that have been offered for many
years. And the 6 per cent stock which was created in 1842 has advanced
in the hands of the holders nearly 20 per cent above its par value. The
confidence of the people in the integrity of their Government has thus
been signally manifested. These opinions relative to the public lands do
not in any manner conflict with the observance of the most liberal
policy toward those of our fellow-citizens who press forward into the
wilderness and are the pioneers in the work of its reclamation. In
securing to all such their rights of preemption the Government performs
but an act of retributive justice for sufferings encountered and
hardships endured, and finds ample remuneration in the comforts which
its policy insures and the happiness which it imparts.

Should a revision of the tariff with a view to revenue become necessary
in the estimation of Congress, I doubt not you will approach the subject
with a just and enlightened regard to the interests of the whole Union.
The principles and views which I have heretofore had occasion to submit
remain unchanged. It can, however, never be too often repeated that the
prominent interest of every important pursuit of life requires for
success permanency and stability in legislation. These can only be
attained by adopting as the basis of action moderation in all things,
which is as indispensably necessary to secure the harmonious action of
the political as of the animal system. In our political organization no
one section of the country should desire to have its supposed interests
advanced at the sacrifice of all others, but union, being the great
interest, equally precious to all, should be fostered and sustained by
mutual concessions and the cultivation of that spirit of compromise from
which the Constitution itself proceeded.

You will be informed by the report from the Treasury Department of the
measures taken under the act of the last session authorizing the reissue
of Treasury notes in lieu of those then outstanding. The system adopted
in pursuance of existing laws seems well calculated to save the country
a large amount of interest, while it affords conveniences and obviates
dangers and expense in the transmission of funds to disbursing agents. I
refer you also to that report for the means proposed by the Secretary to
increase the revenue, and particularly to that portion of it which
relates to the subject of the warehousing system, which I earnestly
urged upon Congress at its last session and as to the importance of
which my opinion has undergone no change.

In view of the disordered condition of the currency at the time and the
high rates of exchange between different parts of the country, I felt it
to be incumbent on me to present to the consideration of your
predecessors a proposition conflicting in no degree with the
Constitution or with the rights of the States and having the sanction
(not in detail, but in principle) of some of the eminent men who have
preceded me in the Executive office. That proposition contemplated the
issuing of Treasury notes of denominations of not less than $5 nor more
than $100, to be employed in the payment of the obligations of the
Government in lieu of gold and silver at the option of the public
creditor, and to an amount not exceeding $15,000,000. It was proposed to
make them receivable everywhere and to establish at various points
depositories of gold and silver to be held in trust for the redemption
of such notes, so as to insure their convertibility into specie. No
doubt was entertained that such notes would have maintained a par value
with gold and silver, thus furnishing a paper currency of equal value
over the Union, thereby meeting the just expectations of the people and
fulfilling the duties of a parental government. Whether the depositories
should be permitted to sell or purchase bills under very limited
restrictions, together with all its other details, was submitted to the
wisdom of Congress and was regarded as of secondary importance. I
thought then and think now that such an arrangement would have been
attended with the happiest results. The whole matter of the currency
would have been placed where by the Constitution it was designed to be
placed--under the immediate supervision and control of Congress. The
action of the Government would have been independent of all
corporations, and the same eye which rests unceasingly on the specie
currency and guards it against adulteration would also have rested on
the paper currency, to control and regulate its issues and protect it
against depreciation. The same reasons which would forbid Congress from
parting with the power over the coinage would seem to operate with
nearly equal force hi regard to any substitution for the precious metals
in the form of a circulating medium. Paper when substituted for specie
constitutes a standard of value by which the operations of society are
regulated, and whatsoever causes its depreciation affects society to an
extent nearly, if not quite, equal to the adulteration of the coin. Nor
can I withhold the remark that its advantages contrasted with a bank of
the United States, apart from the fact that a bank was esteemed as
obnoxious to the public sentiment as well on the score of expediency as
of constitutionality, appeared to me to be striking and obvious. The
relief which a bank would afford by an issue of $15,000,000 of its
notes, judging from the experience of the late United States Bank, would
not have occurred in less than fifteen years, whereas under the proposed
arrangement the relief arising from the issue of $15,000,000 of Treasury
notes would have been consummated in one year, thus furnishing in
one-fifteenth part of the time in which a bank could have accomplished
it a paper medium of exchange equal in amount to the real wants of the
country at par value with gold and silver. The saving to the Government
would have been equal to all the interest which it has had to pay on
Treasury notes of previous as well as subsequent issues, thereby
relieving the Government and at the same time affording relief to the
people. Under all the responsibilities attached to the station which I
occupy, and in redemption of a pledge given to the last Congress at the
close of its first session, I submitted the suggestion to its
consideration at two consecutive sessions. The recommendation, however,
met with no favor at its hands. While I am free to admit that the
necessities of the times have since become greatly ameliorated and that
there is good reason to hope that the country is safely and rapidly
emerging from the difficulties and embarrassments which everywhere
surrounded it in 1841, yet I can not but think that its restoration to a
sound and healthy condition would be greatly expedited by a resort to
the expedient in a modified form.

The operations of the Treasury now rest upon the act of 1789 and the
resolution of 1816, and those laws have been so administered as to
produce as great a quantum of good to the country as their provisions
are capable of yielding. If there had been any distinct expression of
opinion going to show that public sentiment is averse to the plan,
either as heretofore recommended to Congress or in a modified form,
while my own opinion in regard to it would remain unchanged I should be
very far from again presenting it to your consideration. The Government
has originated with the States and the people, for their own benefit and
advantage, and it would be subversive of the foundation principles of
the political edifice which they have reared to persevere in a measure
which in their mature judgments they had either repudiated or condemned.
The will of our constituents clearly expressed should be regarded as the
light to guide our footsteps, the true difference between a monarchical
or aristocratical government and a republic being that in the first the
will of the few prevails over the will of the many, while in the last
the will of the many should be alone consulted.

The report of the Secretary of War will bring you acquainted with the
condition of that important branch of the public service. The Army may
be regarded, in consequence of the small number of the rank and file in
each company and regiment, as little more than a nucleus around which to
rally the military force of the country in case of war, and yet its
services in preserving the peace of the frontiers are of a most
important nature. In all cases of emergency the reliance of the country
is properly placed in the militia of the several States, and it may well
deserve the consideration of Congress whether a new and more perfect
organization might not be introduced, looking mainly to the volunteer
companies of the Union for the present and of easy application to the
great body of the militia in time of war.

The expenditures of the War Department have been considerably reduced in
the last two years. Contingencies, however, may arise which would call
for the filling up of the regiments with a full complement of men and
make it very desirable to remount the corps of dragoons, which by an act
of the last Congress was directed to be dissolved.

I refer you to the accompanying report of the Secretary for information
in relation to the Navy of the United States. While every effort has
been and will continue to be made to retrench all superfluities and lop
off all excrescences which from time to time may have grown up, yet it
has not been regarded as wise or prudent to recommend any material
change in the annual appropriations. The interests which are involved
are of too important a character to lead to the recommendation of any
other than a liberal policy. Adequate appropriations ought to be made to
enable the Executive to fit out all the ships that are now in a course
of building or that require repairs for active service in the shortest
possible time should any emergency arise which may require it. An
efficient navy, while it is the cheapest means of public defense,
enlists in its support the feelings of pride and confidence which
brilliant deeds and heroic valor have heretofore served to strengthen
and confirm.

I refer you particularly to that part of the Secretary's report which
has reference to recent experiments in the application of steam and in
the construction of our war steamers, made under the superintendence of
distinguished officers of the Navy. In addition to other manifest
improvements in the construction of the steam engine and application of
the motive power which has rendered them more appropriate to the uses of
ships of war, one of those officers has brought into use a power which
makes the steamship most formidable either for attack or defense. I can
not too strongly recommend this subject to your consideration and do not
hesitate to express my entire conviction of its great importance.

I call your particular attention also to that portion of the Secretary's
report which has reference to the act of the late session of Congress
which prohibited the transfer of any balance of appropriation from other
heads of appropriation to that for building, equipment, and repair. The
repeal of that prohibition will enable the Department to give renewed
employment to a large class of workmen who have been necessarily
discharged in consequence of the want of means to pay them--a
circumstance attended, especially at this season of the year, with much
privation and suffering.

It gives me great pain to announce to you the loss of the steamship the
Missouri by fire in the Bay of Gibraltar, where she had stopped to renew
her supplies of coal on her voyage to Alexandria, with Mr. Cushing, the
American minister to China, on board. There is ground for high
commendation of the officers and men for the coolness and intrepidity
and perfect submission to discipline evinced under the most trying
circumstances. Surrounded by a raging fire, which the utmost exertions
could not subdue, and which threatened momentarily the explosion of her
well-supplied magazines, the officers exhibited no signs of fear and the
men obeyed every order with alacrity. Nor was she abandoned until the
last gleam of hope of saving her had expired. It is well worthy of your
consideration whether the losses sustained by the officers and crew in
this unfortunate affair should not be reimbursed to them.

I can not take leave of this painful subject without adverting to the
aid rendered upon the occasion by the British authorities at Gibraltar
and the commander, officers, and crew of the British ship of the line
the Malabar, which was lying at the time in the bay. Everything that
generosity or humanity could dictate was promptly performed. It is by
such acts of good will by one to another of the family of nations that
fraternal feelings are nourished and the blessings of permanent peace
secured.

The report of the Postmaster-General will bring you acquainted with the
operations of that Department during the past year, and will suggest to
you such modifications of the existing laws as in your opinion the
exigencies of the public service may require. The change which the
country has undergone of late years in the mode of travel and
transportation has afforded so many facilities for the transmission of
mail matter out of the regular mail as to require the greatest vigilance
and circumspection in order to enable the officer at the head of the
Department to restrain the expenditures within the income. There is also
too much reason to fear that the franking privilege has run into great
abuse. The Department, nevertheless, has been conducted with the
greatest vigor, and has attained at the least possible expense all the
useful objects for which it was established.

In regard to all the Departments, I am quite happy in the belief that
nothing has been left undone which was called for by a true spirit of
economy or by a system of accountability rigidly enforced. This is in
some degree apparent from the fact that the Government has sustained no
loss by the default of any of its agents. In the complex, but at the
same time beautiful, machinery of our system of government, it is not a
matter of surprise that some remote agency may have failed for an
instant to fulfill its desired office; but I feel confident in the
assertion that nothing has occurred to interrupt the harmonious action
of the Government itself, and that, while the laws have been executed
with efficiency and vigor, the rights neither of States nor individuals
have been trampled on or disregarded.

In the meantime the country has been steadily advancing in all that
contributes to national greatness. The tide of population continues
unbrokenly to flow into the new States and Territories, where a refuge
is found not only for our native-born fellow-citizens, but for emigrants
from all parts of the civilized world, who come among us to partake of
the blessings of our free institutions and to aid by their labor to
swell the current of our wealth and power.

It is due to every consideration of public policy that the lakes and
rivers of the West should receive all such attention at the hands of
Congress as the Constitution will enable it to bestow. Works in
favorable and proper situations on the Lakes would be found to be as
indispensably necessary, in case of war, to carry on safe and successful
naval operations as fortifications on the Atlantic seaboard. The
appropriation made by the last Congress for the improvement of the
navigation of the Mississippi River has been diligently and efficiently
applied.

I can not close this communication, gentlemen, without recommending to
your most favorable consideration the interests of this District.
Appointed by the Constitution its exclusive legislators, and forming in
this particular the only anomaly in our system of government--of the
legislative body being elected by others than those for whose advantage
they are to legislate--you will feel a superadded obligation to look
well into their condition and to leave no cause for complaint or regret.
The seat of Government of our associated republics can not but be
regarded as worthy of your parental care.

In connection with its other interests, as well as those of the whole
country, I recommend that at your present session you adopt such
measures in order to carry into effect the Smithsonian bequest as in
your judgment will be best calculated to consummate the liberal intent
of the testator.

When, under a dispensation of Divine Providence, I succeeded to the
presidential office, the state of public affairs was embarrassing and
critical. To add to the irritation consequent upon a long-standing
controversy with one of the most powerful nations of modern times,
involving not only questions of boundary (which under the most favorable
circumstances are always embarrassing), but at the same time important
and high principles of maritime law, border controversies between the
citizens and subjects of the two countries had engendered a state of
feeling and of conduct which threatened the most calamitous
consequences. The hazards incident to this state of things were greatly
heightened by the arrest and imprisonment of a subject of Great Britain,
who, acting (as it was alleged) as a part of a military force, had aided
in the commission of an act violative of the territorial jurisdiction of
the United States and involving the murder of a citizen, of the State of
New York. A large amount of claims against the Government of Mexico
remained unadjusted and a war of several years' continuance with the
savage tribes of Florida still prevailed, attended with the desolation
of a large portion of that beautiful Territory and with the sacrifice of
many valuable lives. To increase the embarrassments of the Government,
individual and State credit had been nearly stricken down and confidence
in the General Government was so much impaired that-loans of a small
amount could only be negotiated at a considerable sacrifice. As a
necessary consequence of the blight which had fallen on commerce and
mechanical industry, the ships of the one were thrown out of employment
and the operations of the other had been greatly diminished. Owing to
the condition of the currency, exchanges between different parts of the
country had become ruinously high and trade had to depend on a
depreciated paper currency in conducting its transactions. I shall be
permitted to congratulate the country that under an overruling
Providence peace was preserved without a sacrifice of the national
honor; the war in Florida was brought to a speedy termination; a large
portion of the claims on Mexico have been fully adjudicated and are in a
course of payment, while justice has been rendered to us in other
matters by other nations; confidence between man and man is in a great
measure restored and the credit of this Government fully and perfectly
reestablished; commerce is becoming more and more extended in its
operations and manufacturing and mechanical industry once more reap the
rewards of skill and labor honestly applied; the operations of trade
rest on a sound currency and the rates of exchange are reduced to their
lowest amount.

In this condition of things I have felt it to be my duty to bring to
your favorable consideration matters of great interest in their present
and ultimate results; and the only desire which I feel in connection
with the future is and will continue to be to leave the country
prosperous and its institutions unimpaired.

***

State of the Union Address
John Tyler
December 3, 1844

To the Senate and House of Representatives of the United States:

We have continued cause for expressing our gratitude to the Supreme
Ruler of the Universe for the benefits and blessings which our country,
under His kind providence, has enjoyed during the past year.
Notwithstanding the exciting scenes through which we have passed,
nothing has occurred to disturb the general peace or to derange the
harmony of our political system. The great moral spectacle has been
exhibited of a nation approximating in number to 20,000,000 people
having performed the high and important function of electing their Chief
Magistrate for the term of four years without the commission of any acts
of violence or the manifestation of a spirit of insubordination to the
laws. The great and inestimable right of suffrage has been exercised by
all who were invested with it under the laws of the different States in
a spirit dictated alone by a desire, in the selection of the agent, to
advance the interests of the country and to place beyond jeopardy the
institutions under which it is our happiness to live. That the deepest
interest has been manifested by all our countrymen in the result of the
election is not less true than highly creditable to them. Vast
multitudes have assembled from time to time at various places for the
purpose of canvassing the merits and pretensions of those who were
presented for their suffrages, but no armed soldiery has been necessary
to restrain within proper limits the popular zeal or to prevent violent
outbreaks. A principle much more controlling was found in the love of
order and obedience to the laws, which, with mere individual exceptions,
everywhere possesses the American mind, and controls with an influence
far more powerful than hosts of armed men. We can not dwell upon this
picture without recognizing in it that deep and devoted attachment on
the part of the people to the institutions under which we live which
proclaims their perpetuity. The great objection which has always
prevailed against the election by the people of their chief executive
officer has been the apprehension of tumults and disorders which might
involve in ruin the entire Government. A security against this is found
not only in the fact before alluded to, trot in the additional fact that
we live under a Confederacy embracing already twenty-six States, no one
of which has power to control the election. The popular vote in each
State is taken at the time appointed by the laws, and such vote is
announced by the electoral college without reference to the decision of
other States. The right of suffrage and the mode of conducting the
election are regulated by the laws of each State, and the election is
distinctly federative in all its prominent features. Thus it is that,
unlike what might be the results under a consolidated system, riotous
proceedings, should they prevail, could only affect the elections in
single States without disturbing to any dangerous extent the
tranquillity of others. The great experiment of a political
confederation each member of which is supreme as to all matters
appertaining to its local interests and its internal peace and
happiness, while by a voluntary compact with others it confides to the
united power of all the protection of its citizens in matters not
domestic has been so far crowned with complete success. The world has
witnessed its rapid growth in wealth and population, and under the guide
and direction of a superintending Providence the developments of the
past may be regarded but as the shadowing forth of the mighty future. In
the bright prospects of that future we shall find, as patriots and
philanthropists, the highest inducements to cultivate and cherish a love
of union and to frown down every measure or effort which may be made to
alienate the States or the people of the States in sentiment and feeling
from each other. A rigid and close adherence to the terms of our
political compact and, above all, a sacred observance of the guaranties
of the Constitution will preserve union on a foundation which can not be
shaken, while personal liberty is placed beyond hazard or jeopardy. The
guaranty of religious freedom, of the freedom of the press, of the
liberty of speech, of the trial by jury, of the habeas corpus, and of
the domestic institutions of each of the States, leaving the private
citizen in the full exercise of the high and ennobling attributes of his
nature and to each State the privilege (which can only be judiciously
exerted by itself) of consulting the means best calculated to advance
its own happiness--these are the great and important guaranties of the
Constitution which the lovers of liberty must cherish and the advocates
of union must ever cultivate. Preserving these and avoiding all
interpolations by forced construction under the guise of an imagined
expediency upon the Constitution, the influence of our political system
is destined to be as actively and as beneficially felt on the distant
shores of the Pacific as it is now on those of the Atlantic Ocean. The
only formidable impediments in the way of its successful expansion (time
and space) are so far in the progress of modification by the
improvements of the age as to render no longer speculative the ability
of representatives from that remote region to come up to the Capitol, so
that their constituents shall participate in all the benefits of Federal
legislation. Thus it is that in the progress of time the inestimable
principles of civil liberty will be enjoyed by millions yet unborn and
the great benefits of our system of government be extended to now
distant and uninhabited regions. In view of the vast wilderness yet to
be reclaimed, we may well invite the lover of freedom of every land to
take up his abode among us and assist us in the great work of advancing
the standard of civilization and giving a wider spread to the arts and
refinements of cultivated life. Our prayers should evermore be offered
up to the Father of the Universe for His wisdom to direct us in the path
of our duty so as to enable us to consummate these high purposes.

One of the strongest objections which has been urged against
confederacies by writers on government is the liability of the members
to be tampered with by foreign governments or the people of foreign
states, either in their local affairs or in such as affected the peace
of others or endangered the safety of the whole confederacy. We can not
hope to be entirely exempt from such attempts on our peace and safety.
The United States are becoming too important in population and resources
not to attract the observation of other nations. It therefore may in the
progress of time occur that opinions entirely abstract in the States
which they may prevail and in no degree affecting their domestic
institutions may be artfully but secretly encouraged with a view to
undermine the Union. Such opinions may become the foundation of
political parties, until at last the conflict of opinion, producing an
alienation of friendly feeling among the people of the different States,
may involve in general destruction the happy institutions under which we
live. It should ever be borne in mind that what is true in regard to
individuals is equally so in regard to states. An interference of one in
the affairs of another is the fruitful cause of family dissensions and
neighborhood disputes, and the same cause affects the peace, happiness,
and prosperity of states. It may be most devoutly hoped that the good
sense of the American people will ever be ready to repel all such
attempts should they ever be made.

There has been no material change in our foreign relations since my last
annual message to Congress. With all the powers of Europe we continue on
the most friendly terms. Indeed, it affords me much satisfaction to
state that at no former period has the peace of that enlightened and
important quarter of the globe ever been, apparently, more firmly
established. The conviction that peace is the true policy of nations
would seem to be growing and becoming deeper amongst the enlightened
everywhere, and there is no people who have a stronger interest in
cherishing the sentiments and adopting the means of preserving and
giving it permanence than those of the United States. Amongst these, the
first and most effective are, no doubt, the strict observance of justice
and the honest and punctual fulfillment of all engagements. But it is
not to be forgotten that in the present state of the world it is no less
necessary to be ready to enforce their observance and fulfillment in
reference to ourselves than to observe and fulfill them on our part in
regard to others.

Since the close of your last session a negotiation has been formally
entered upon between the Secretary of State and Her Britannic Majesty's
minister plenipotentiary and envoy extraordinary residing at Washington
relative to the rights of their respective nations in and over the
Oregon Territory. That negotiation is still pending. Should it during
your session be brought to a definitive conclusion, the result will be
promptly communicated to Congress. I would, however, again call your
attention to the recommendations contained in previous messages designed
to protect and facilitate emigration to that Territory. The
establishment of military posts at suitable points upon the extended
line of land travel would enable our citizens to emigrate in comparative
safety to the fertile regions below the Falls of the Columbia, and make
the provision of the existing convention for the joint occupation of the
territory by subjects of Great Britain and the citizens of the United
States more available than heretofore to the latter. These posts would
constitute places of rest for the weary emigrant, where he would be
sheltered securely against the danger of attack from the Indians and be
enabled to recover from the exhaustion of a long line of travel.
Legislative enactments should also be made which should spread over him
the aegis of our laws, so as to afford protection to his person and
property when he shall have reached his distant home. In this latter
respect the British Government has been much more careful of the
interests of such of her people as are to be found in that country than
the United States. She has made necessary provision for their security
and protection against the acts of the viciously disposed and lawless,
and her emigrant reposes in safety under the panoply of her laws.
Whatever may be the result of the pending negotiation, such measures are
necessary. It will afford me the greatest pleasure to witness a happy
and favorable termination to the existing negotiation upon terms
compatible with the public honor, and the best efforts of the Government
will continue to be directed to this end.

It would have given me the highest gratification in this my last annual
communication to Congress to have been able to announce to you the
complete and entire settlement and adjustment of other matters in
difference between the United States and the Government of Her Britannic
Majesty, which were adverted to in a previous message. It is so
obviously the interest of both countries, in respect to the large and
valuable commerce which exists between them, that all causes of
complaint, however inconsiderable, should be with the greatest
promptitude removed that it must be regarded as cause of regret that any
unnecessary delays should be permitted to intervene. It is true that in
a pecuniary point of view the matters alluded to are altogether
insignificant in amount when compared with the ample resources of that
great nation, but they nevertheless, more particularly that limited
class which arise under seizures and detentions of American ships on the
coast of Africa upon the mistaken supposition indulged in at the time
the wrong was committed of their being engaged in the slave trade,
deeply affect the sensibilities of this Government and people. Great
Britain, having recognized her responsibility to repair all such wrongs
by her action in other cases, leaves nothing to be regretted upon the
subject as to all cases arising prior to the treaty of Washington than
the delay in making suitable reparation in such of them as fall plainly
within the principle of others which she has long since adjusted. The
injury inflicted by delays in the settlement of these claims falls with
severity upon the individual claimants and makes a strong appeal to her
magnanimity and sense of justice for a speedy settlement. Other matters
arising out of the construction of existing treaties also remain
unadjusted, and will continue to be urged upon her attention.

The labors of the joint commission appointed by the two Governments to
run the dividing line established by the treaty of Washington were,
unfortunately, much delayed in the commencement of the season by the
failure of Congress at its last session to make a timely appropriation
of funds to meet the expenses of the American party, and by other
causes. The United States commissioner, however, expresses his
expectation that by increased diligence and energy the party will be
able to make up for lost time.

We continue to receive assurances of the most friendly feelings on the
part of all the other European powers, with each and all of whom it is
so obviously our interest to cultivate the most amicable relations; nor
can I anticipate the occurrence of any event which would be likely in
any degree to disturb those relations. Russia, the great northern power,
under the judicious sway of her Emperor, is constantly advancing in the
road of science and improvement, while France, guided by the counsels of
her wise Sovereign, pursues a course calculated to consolidate the
general peace. Spain has obtained a breathing spell of some duration
from the internal convulsions which have through so many years marred
her prosperity, while Austria, the Netherlands, Prussia, Belgium, and
the other powers of Europe reap a rich harvest of blessings from the
prevailing peace.

I informed the two Houses of Congress in my message of December last
that instructions had been given to Mr. Wheaton, our minister at Berlin,
to negotiate a treaty with the Germanic States composing the Zollverein
if it could be done, stipulating, as far as it was practicable to
accomplish it, for a reduction of the heavy and onerous duties levied on
our tobacco and other leading articles of agricultural production, and
yielding in return on our part a reduction of duties on such articles
the product of their industry as should not come into competition, or
but a limited one, with articles the product of our manufacturing
industry. The Executive in giving such instructions considered itself as
acting in strict conformity with the wishes of Congress as made known
through several measures which it had adopted, all directed to the
accomplishment of this important result. The treaty was therefore
negotiated, by which essential reductions were secured in the duties
levied by the Zollverein on tobacco, rice, and lard, accompanied by a
stipulation for the admission of raw cotton free of duty; in exchange
for which highly important concessions a reduction of duties imposed by
the laws of the United States on a variety of articles, most of which
were admitted free of all duty under the act of Congress commonly known
as the compromise law, and but few of which were produced in the United
States, was stipulated for on our part. This treaty was communicated to
the Senate at an early day of its last session, but not acted upon until
near its close, when, for the want (as I am bound to presume) of full
time to consider it, it was laid upon the table. This procedure had the
effect of virtually rejecting it, in consequence of a stipulation
contained in the treaty that its ratifications should be exchanged on or
before a day which has already passed. The Executive, acting upon the
fair inference that the Senate did not intend its absolute rejection,
gave instructions to our minister at Berlin to reopen the negotiation so
far as to obtain an extension of time for the exchange of ratifications.
I regret, however, to say that his efforts in this respect have been
unsuccessful. I am nevertheless not without hope that the great
advantages which were intended to be secured by the treaty may yet be
realized.

I am happy to inform you that Belgium has, by an "arrete royale" issued
in July last, assimilated the flag of the United States to her own, so
far as the direct trade between the two countries is concerned. This
measure will prove of great service to our shipping interest, the trade
having heretofore been carried on chiefly in foreign bottoms. I flatter
myself that she will speedily resort to a modification of her system
relating to the tobacco trade, which would decidedly benefit the
agriculture of the United States and operate to the mutual advantage of
both countries.

No definitive intelligence has yet been received from our minister of
the conclusion of a treaty with the Chinese Empire, but enough is known
to induce the strongest hopes that the mission will be crowned with
success.

With Brazil our relations continue on the most friendly footing. The
commercial intercourse between that growing Empire and the United States
is becoming daily of greater importance to both, and it is to the
interest of both that the firmest relations of amity and good will
should continue to be cultivated between them.

The Republic of New Granada still withholds, notwithstanding the most
persevering efforts have been employed by our charge d'affaires, Mr.
Blackford, to produce a different result, indemnity in the case of the
brig Morris; and the Congress of Venezuela, although an arrangement has
been effected between our minister and the minister of foreign affairs
of that Government for the payment of $18,000 in discharge of its
liabilities in the same case, has altogether neglected to make provision
for its payment. It is to be hoped that a sense of justice will soon
induce a settlement of these claims.

Our late minister to Chili, Mr. Pendleton, has returned to the United
States without having effected an adjustment in the second claim of the
Macedonian, which is delayed on grounds altogether frivolous and
untenable. Mr. Pendleton's successor has been directed to urge the claim
in the strongest terms, and, in the event of a failure to obtain a
prompt adjustment, to report the fact to the Executive at as early a day
as possible, so that the whole matter may be communicated to Congress.

At your last session I submitted to the attention of Congress the
convention with the Republic of Peru of the 17th March, 1841, providing
for the adjustment of the claims of citizens of the United States
against that Republic, but no definitive action was taken upon the
subject. I again invite to it your attention and prompt action.

In my last annual message I felt it to be my duty to make known to
Congress, in terms both plain and emphatic, my opinion in regard to the
war which has so long existed between Mexico and Texas which since the
battle of San Jacinto has consisted altogether of predatory incursions,
attended by circumstances revolting to humanity. I repeat now what I
then said, that after eight years of feeble and ineffectual efforts to
reconquer Texas it was time that the war should have ceased. The United
States have a direct interest in the question. The contiguity of the two
nations to our territory was but too well calculated to involve our
peace. Unjust suspicions were engendered in the mind of one or the other
of the belligerents against us, and as a necessary consequence American
interests were made to suffer and our peace became daily endangered; in
addition to which it must have been obvious to all that the exhaustion
produced by the war subjected both Mexico and Texas to the interference
of other powers, which, without the interposition of this Government,
might eventuate in the most serious injury to the United States. This
Government from time to time exerted its friendly offices to bring about
a termination of hostilities upon terms honorable alike to both the
belligerents. Its efforts in this behalf proved unavailing. Mexico
seemed almost without an object to persevere in the war, and no other
alternative was left the Executive but to take advantage of the
well-known dispositions of Texas and to invite her to enter into a
treaty for annexing her territory to that of the United States.

Since your last session Mexico has threatened to renew the war, and has
either made or proposes to make formidable preparations for invading
Texas. She has issued decrees and proclamations, preparatory to the
commencement of hostilities, full of threats revolting to humanity, and
which if carried into effect would arouse the attention of all
Christendom. This new demonstration of feeling, there is too much reason
to believe, has been produced in consequence of the negotiation of the
late treaty of annexation with Texas. The Executive, therefore, could
not be indifferent to such proceedings, and it felt it to be due as well
to itself as to the honor of the country that a strong representation
should be made to the Mexican Government upon the subject. This was
accordingly done, as will be seen by the copy of the accompanying
dispatch from the Secretary of State to the United States envoy at
Mexico. Mexico has no right to jeopard the peace of the world by urging
any longer a useless and fruitless contest. Such a condition of things
would not be tolerated on the European continent. Why should it be on
this? A war of desolation, such as is now threatened by Mexico, can not
be waged without involving our peace and tranquillity. It is idle to
believe that such a war could be looked upon with indifference by our
own citizens inhabiting adjoining States; and our neutrality would be
violated in despite of all efforts on the part of the Government to
prevent it. The country is settled by emigrants from the United States
under invitations held out to them by Spain and Mexico. Those emigrants
have left behind them friends and relatives, who would not fail to
sympathize with them in their difficulties, and who would be led by
those sympathies to participate in their struggles, however energetic
the action of the Government to prevent it. Nor would the numerous and
formidable bands of Indians--the most warlike to be found in any
land--which occupy the extensive regions contiguous to the States of
Arkansas and Missouri, and who are in possession of large tracts of
country within the limits of Texas, be likely to remain passive. The
inclinations of those numerous tribes lead them invariably to war
whenever pretexts exist.

Mexico had no just ground of displeasure against this Government or
people for negotiating the treaty. What interest of hers was affected by
the treaty? She was despoiled of nothing, since Texas was forever lost
to her. The independence of Texas was recognized by several of the
leading powers of the earth. She was free to treat, free to adopt her
own line of policy, free to take the course which she believed was best
calculated to secure her happiness.

Her Government and people decided on annexation to the United States,
and the Executive saw in the acquisition of such a territory the means
of advancing their permanent happiness and glory. What principle of good
faith, then, was violated? What rule of political morals trampled under
foot? So far as Mexico herself was concerned, the measure should have
been regarded by her as highly beneficial. Her inability to reconquer
Texas had been exhibited, I repeat, by eight (now nine) years of
fruitless and ruinous contest. In the meantime Texas has been growing in
population and resources. Emigration has flowed into her territory from
all parts of the world in a current which continues to increase in
strength. Mexico requires a permanent boundary between that young
Republic and herself. Texas at no distant day, if she continues separate
and detached from the United States, will inevitably seek to consolidate
her strength by adding to her domain the contiguous Provinces of Mexico.
The spirit of revolt from the control of the central Government has
heretofore manifested itself in some of those Provinces, and it is fair
to infer that they would be inclined to take the first favorable
opportunity to proclaim their independence and to form close alliances
with Texas. The war would thus be endless, or if cessations of
hostilities should occur they would only endure for a season. The
interests of Mexico, therefore, could in nothing be better consulted
than in a peace with her neighbors which would result in the
establishment of a permanent boundary. Upon the ratification of the
treaty the Executive was prepared to treat with her on the most liberal
basis. Hence the boundaries of Texas were left undefined by the treaty.
The Executive proposed to settle these upon terms that all the world
should have pronounced just and reasonable. No negotiation upon that
point could have been undertaken between the United States and Mexico in
advance of the ratification of the treaty. We should have had no right,
no power, no authority, to have conducted such a negotiation, and to
have undertaken it would have been an assumption equally revolting to
the pride of Mexico and Texas and subjecting us to the charge of
arrogance, while to have proposed in advance of annexation to satisfy
Mexico for any contingent interest she might have in Texas would have
been to have treated Texas not as an independent power, but as a mere
dependency of Mexico. This assumption could not have been acted on by
the Executive without setting at defiance your own solemn declaration
that that Republic was an independent State. Mexico had, it is true,
threatened war against the United States in the event the treaty of
annexation was ratified. The Executive could not permit itself to be
influenced by this threat. It represented in this the spirit of our
people, who are ready to sacrifice much for peace, but nothing to
intimidation. A war under any circumstances is greatly to be deplored,
and the United States is the last nation to desire it; but if, as the
condition of peace, it be required of us to forego the unquestionable
right of treating with an independent power of our own continent upon
matters highly interesting to both, and that upon a naked and
unsustained pretension of claim by a third power to control the free
will of the power with whom we treat, devoted as we may be to peace and
anxious to cultivate friendly relations with the whole world, the
Executive does not hesitate to say that the people of the United States
would be ready to brave all consequences sooner than submit to such
condition. But no apprehension of war was entertained by the Executive,
and I must express frankly the opinion that had the treaty been ratified
by the Senate it would have been followed by a prompt settlement, to the
entire satisfaction of Mexico, of every matter in difference between the
two countries. Seeing, then, that new preparations for hostile invasion
of Texas were about to be adopted by Mexico, and that these were brought
about because Texas had adopted the suggestions of the Executive upon
the subject of annexation, it could not passively have folded its arms
and permitted a war, threatened to be accompanied by every act that
could mark a barbarous age, to be waged against her because she had done
so.

Other considerations of a controlling character influenced the course of
the Executive. The treaty which had thus been negotiated had failed to
receive the ratification of the Senate. One of the chief objections
which was urged against it was found to consist in the fact that the
question of annexation had not been submitted to the ordeal of public
opinion in the United States. However untenable such an objection was
esteemed to be, in view of the unquestionable power of the Executive to
negotiate the treaty and the great and lasting interests involved in the
question, I felt it to be my duty to submit the whole subject to
Congress as the best expounders of popular sentiment. No definitive
action having been taken on the subject by Congress, the question
referred itself directly to the decision of the States and people. The
great popular election which has just terminated afforded the best
opportunity of ascertaining the will of the States and the people upon
it. Pending that issue it became the imperative duty of the Executive to
inform Mexico that the question of annexation was still before the
American people, and that until their decision was pronounced any
serious invasion of Texas would be regarded as an attempt to forestall
their judgment and could not be looked upon with indifference. I am most
happy to inform you that no such invasion has taken place; and I trust
that whatever your action may be upon it Mexico will see the importance
of deciding the matter by a resort to peaceful expedients in preference
to those of arms. The decision of the people and the States on this
great and interesting subject has been decisively manifested. The
question of annexation has been presented nakedly to their
consideration. By the treaty itself all collateral and incidental issues
which were calculated to divide and distract the public councils were
carefully avoided. These were left to the wisdom of the future to
determine. It presented, I repeat, the isolated question of annexation,
and in that form it has been submitted to the ordeal of public
sentiment. A controlling majority of the people and a large majority of
the States have declared in favor of immediate annexation. Instructions
have thus come up to both branches of Congress from their respective
constituents in terms the most emphatic. It is the will of both the
people and the States that Texas shall be annexed to the Union promptly
and immediately. It may be hoped that in carrying into execution the
public will thus declared all collateral issues may be avoided. Future
Legislatures can best decide as to the number of States which should be
formed out of the territory when the time has arrived for deciding that
question. So with all others. By the treaty the United States assumed
the payment of the debts of Texas to an amount not exceeding
$10,000,000, to be paid, with the exception of a sum falling short of
$400,000, exclusively out of the proceeds of the sales of her public
lands. We could not with honor take the lands without assuming the full
payment of all incumbencies upon them.

Nothing has occurred since your last session to induce a doubt that the
dispositions of Texas remain unaltered. No intimation of an altered
determination on the part of her Government and people has been
furnished to the Executive. She still desires to throw herself under the
protection of our laws and to partake of the blessings of our federative
system, while every American interest would seem to require it. The
extension of our coastwise and foreign trade to an amount almost
incalculable, the enlargement of the market for our manufactures, a
constantly growing market for our agricultural productions, safety to
our frontiers, and additional strength and stability to the Union--these
are the results which would rapidly develop themselves upon the
consummation of the measure of annexation. In such event I will not
doubt but that Mexico would find her true interest to consist in meeting
the advances of this Government in a spirit of amity. Nor do I apprehend
any serious complaint from any other quarter; no sufficient ground
exists for such complaint. We should interfere in no respect with the
rights of any other nation. There can not be gathered from the act any
design on our part to do so with their possessions on this continent. We
have interposed no impediments in the way of such acquisitions of
territory, large and extensive as many of them are, as the leading
powers of Europe have made from time to time in every part of the world.
We seek no conquest made by war. No intrigue will have been resorted to
or acts of diplomacy essayed to accomplish the annexation of Texas. Free
and independent herself, she asks to be received into our Union. It is a
question for our own decision whether she shall be received or not.

The two Governments having already agreed through their respective
organs on the terms of annexation, I would recommend their adoption by
Congress in the form of a joint resolution or act to be perfected and
made binding on the two countries when adopted in like manner by the
Government of Texas.

In order that the subject may be fully presented in all its bearings,
the correspondence which has taken place in reference to it since the
adjournment of Congress between the United States, Texas, and Mexico is
herewith transmitted.

The amendments proposed by the Senate to the convention concluded
between the United States and Mexico on the 20th of November, 1843, have
been transmitted through our minister for the concurrence of the Mexican
Government, but, although urged thereto, no action has yet been had on
the subject, nor has any answer been given which would authorize a
favorable conclusion in the future.

The decree of September, 1843, in relation to the retail trade, the
order for the expulsion of foreigners, and that of a more recent date in
regard to passports--all which are considered as in violation of the
treaty of amity and commerce between the two countries--have led to a
correspondence of considerable length between the minister for foreign
relations and our representatives at Mexico, but without any
satisfactory result. They remain still unadjusted, and many and serious
inconveniences have already resulted to our citizens in consequence of
them.

Questions growing out of the act of disarming a body of Texan troops
under the command of Major Snively by an officer in the service of the
United States, acting under the orders of our Government, and the
forcible entry into the custom-house at Bryarlys Landing, on Red River,
by certain citizens of the United States, and taking away therefrom the
goods seized by the collector of the customs as forfeited under the laws
of Texas, have been adjusted so far as the powers of the Executive
extend. The correspondence between the two Governments in reference to
both subjects will be found amongst the accompanying documents. It
contains a full statement of all the facts and circumstances, with the
views taken on both sides and the principles on which the questions have
been adjusted. It remains for Congress to make the necessary
appropriation to carry the arrangement into effect, which I respectfully
recommend.

The greatly improved condition of the Treasury affords a subject for
general congratulation. The paralysis which had fallen on trade and
commerce, and which subjected the Government to the necessity of
resorting to loans and the issue of Treasury notes to a large amount,
has passed away, and after the payment of upward of $7,000,000 on
account of the interest, and in redemption of more than $5,000,000 of
the public debt which falls due on the 1st of January next, and setting
apart upward of $2,000,000 for the payment of outstanding Treasury notes
and meeting an installment of the debts of the corporate cities of the
District of Columbia, an estimated surplus of upward of $7,000,000 over
and above the existing appropriations will remain in the Treasury at the
close of the fiscal year. Should the Treasury notes continue outstanding
as heretofore, that surplus will be considerably augmented. Although all
interest has ceased upon them and the Government has invited their
return to the Treasury, yet they remain outstanding, affording great
facilities to commerce, and establishing the fact that under a
well-regulated system of finance the Government has resources within
itself which render it independent in time of need, not only of private
loans, but also of bank facilities.

The only remaining subject of regret is that the remaining stocks of the
Government do not fall due at an earlier day, since their redemption
would be entirely within its control. As it is, it may be well worthy
the consideration of Congress whether the law establishing the sinking
fund (under the operation of which the debts of the Revolution and last
war with Great Britain were to a great extent extinguished) should not,
with proper modifications, so as to prevent an accumulation of
surpluses, and limited in amount to a specific sum, be reenacted. Such
provision, which would authorize the Government to go into the market
for a purchase of its own stock on fair terms, would serve to maintain
its credit at the highest point and prevent to a great extent those
fluctuations in the price of its securities which might under other
circumstances affect its credit. No apprehension of this sort is at this
moment entertained, since the stocks of the Government, which but two
years ago were offered for sale to capitalists at home and abroad at a
depreciation, and could find no purchasers, are now greatly above par in
the hands of the holders; but a wise and prudent forecast admonishes us
to place beyond the reach of contingency the public credit.

It must also be a matter of unmingled gratification that under the
existing financial system (resting upon the act of 1789 and the
resolution of 1816) the currency of the country has attained a state of
perfect soundness; and the rates of exchange between different parts of
the Union, which in 1841 denoted by their enormous amount the great
depreciation and, in fact, worthlessness of the currency in most of the
States, are now reduced to little more than the mere expense of
transporting specie from place to place and the risk incident to the
operation. In a new country like that of the United States, where so
many inducements are held out for speculation, the depositories of the
surplus revenue, consisting of banks of any description, when it reaches
any considerable amount, require the closest vigilance on the part of
the Government. All banking institutions, under whatever denomination
they may pass, are governed by an almost exclusive regard to the
interest of the stockholders. That interest consists in the augmentation
of profits in the form of dividends, and a large surplus revenue
intrusted to their custody is but too apt to lead to excessive loans and
to extravagantly large issues of paper. As a necessary consequence
prices are nominally increased and the speculative mania very soon
seizes upon the public mind. A fictitious state of prosperity for a
season exists, and, in the language of the day, money becomes plenty.
Contracts are entered into by individuals resting on this unsubstantial
state of things, but the delusion speedily passes away and the country
is overrun with an indebtedness so weighty as to overwhelm many and to
visit every department of industry with great and ruinous embarrassment.
The greatest vigilance becomes necessary on the part of Government to
guard against this state of things. The depositories must be given
distinctly to understand that the favors of the Government will be
altogether withdrawn, or substantially diminished, if its revenues shall
be regarded as additions to their banking capital or as the foundation
of an enlarged circulation.

The Government, through its revenue, has at all times an important part
to perform in connection with the currency, and it greatly depends upon
its vigilance and care whether the country be involved in embarrassments
similar to those which it has had recently to encounter, or, aided by
the action of the Treasury, shall be preserved in a sound and healthy
condition.

The dangers to be guarded against are greatly augmented by too large a
surplus of revenue. When that surplus greatly exceeds in amount what
shall be required by a wise and prudent forecast to meet unforeseen
contingencies, the Legislature itself may come to be seized with a
disposition to indulge in extravagant appropriations to objects many of
which may, and most probably would, be found to conflict with the
Constitution. A fancied expediency is elevated above constitutional
authority, and a reckless and wasteful extravagance but too certainly
follows.

The important power of taxation, which when exercised in its most
restricted form is a burthen on labor and production, is resorted to
under various pretexts for purposes having no affinity to the motives
which dictated its grant, and the extravagance of Government stimulates
individual extravagance until the spirit of a wild and ill-regulated
speculation involves one and all in its unfortunate results. In view of
such fatal consequences, it may be laid down as an axiom rounded in
moral and political truth that no greater taxes should be imposed than
are necessary for an economical administration of the Government, and
that whatever exists beyond should be reduced or modified. This doctrine
does in no way conflict with the exercise of a sound discrimination in
the selection of the articles to be taxed, which a due regard to the
public weal would at all times suggest to the legislative mind. It
leaves the range of selection undefined; and such selection should
always be made with an eye to the great interests of the country.
Composed as is the Union of separate and independent States, a patriotic
Legislature will not fail in consulting the interests of the parts to
adopt such course as will be best calculated to advance the harmony of
the whole, and thus insure that permanency in the policy of the
Government without which all efforts to advance the public prosperity
are vain and fruitless.

This great and vitally important task rests with Congress, and the
Executive can do no more than recommend the general principles which
should govern in its execution.

I refer you to the report of the Secretary of War for an exhibition of
the condition of the Army, and recommend to you as well worthy your best
consideration many of the suggestions it contains. The Secretary in no
degree exaggerates the great importance of pressing forward without
delay in the work of erecting and finishing the fortifications to which
he particularly alludes. Much has been done toward placing our cities
and roadsteads in a state of security against the hazards of hostile
attack within the last four years; but considering the new elements
which have been of late years employed in the propelling of ships and
the formidable implements of destruction which have been brought into
service, we can not be too active or vigilant in preparing and
perfecting the means of defense. I refer you also to his report for a
full statement of the condition of the Indian tribes within our
jurisdiction. The Executive has abated no effort in carrying into effect
the well-established policy of the Government which contemplates a
removal of all the tribes residing within the limits of the several
States beyond those limits, and it is now enabled to congratulate the
country at the prospect of an early consummation of this object. Many of
the tribes have already made great progress in the arts of civilized
life, and through the operation of the schools established among them,
aided by the efforts of the pious men of various religious denominations
who devote themselves to the task of their improvement, we may fondly
hope that the remains of the formidable tribes which were once masters
of this country will in their transition from the savage state to a
condition of refinement and cultivation add another bright trophy to
adorn the labors of a well-directed philanthropy.

The accompanying report of the Secretary of the Navy will explain to you
the situation of that branch of the service. The present organization of
the Department imparts to its operations great efficiency, but I concur
fully in the propriety of a division of the Bureau of Construction,
Equipment, Increase, and Repairs into two bureaus. The subjects as now
arranged are incongruous, and require to a certain extent information
and qualifications altogether dissimilar.

The operations of the squadron on the coast of Africa have been
conducted with all due attention to the object which led to its
origination, and I am happy to say that the officers and crews have
enjoyed the best possible health under the system adopted by the officer
in command. It is believed that the United States is the only nation
which has by its laws subjected to the punishment of death as pirates
those who may be engaged in the slave trade. A similar enactment on the
part of other nations would not fail to be attended by beneficial
results.

In consequence of the difficulties which have existed in the way of
securing titles for the necessary grounds, operations have not yet been
commenced toward the establishment of the navy-yard at Memphis. So soon
as the title is perfected no further delay will be permitted to
intervene. It is well worthy of your consideration whether Congress
should not direct the establishment of a ropewalk in connection with the
contemplated navy-yard, as a measure not only of economy, but as highly
useful and necessary. The only establishment of the sort now connected
with the service is located at Boston, and the advantages of a similar
establishment convenient to the hemp-growing region must be apparent to
all.

The report of the Secretary presents other matters to your consideration
of an important character in connection with the service.

In referring you to the accompanying report of the Postmaster-General it
affords me continued cause of gratification to be able to advert to the
fact that the affairs of the Department for the last four years have
been so conducted as from its unaided resources to meet its large
expenditures. On my coming into office a debt of nearly $500,000 existed
against the Department, which Congress discharged by an appropriation
from the Treasury. The Department on the 4th of March next will be
found, under the management of its present efficient head, free of debt
or embarrassment, which could only have been done by the observance and
practice of the greatest vigilance and economy. The laws have
contemplated throughout that the Department should be self-sustained,
but it may become necessary, with the wisest regard to the public
interests, to introduce amendments and alterations in the system.

There is a strong desire manifested in many quarters so to alter the
tariff of letter postage as to reduce the amount of tax at present
imposed. Should such a measure be carried into effect to the full extent
desired, it can not well be doubted but that for the first years of its
operation a diminished revenue would be collected, the supply of which
would necessarily constitute a charge upon the Treasury. Whether such a
result would be desirable it will be for Congress in its wisdom to
determine. It may in general be asserted as true that radical
alterations in any system should rather be brought about gradually than
by sudden changes and by pursuing this prudent policy in the reduction
of letter postage the Department might still sustain itself through the
revenue which would accrue by the increase of letters. The state and
condition of the public Treasury has heretofore been such as to have
precluded the recommendation of any material change. The difficulties
upon this head have, however, ceased, and a larger discretion is now
left to the Government.

I can not too strongly urge the policy of authorizing the establishment
of a line of steamships regularly to ply between this country and
foreign ports and upon our own waters for the transportation of the
mail. The example of the British Government is well worthy of imitation
in this respect. The belief is strongly entertained that the emoluments
arising from the transportation of mail matter to foreign countries
would operate of itself as an inducement to cause individual enterprise
to undertake that branch of the task, and the remuneration of the
Government would consist in the addition readily made to our steam navy
in case of emergency by the ships so employed. Should this suggestion
meet your approval, the propriety of placing such ships under the
command of experienced officers of the Navy will not escape your
observation. The application of steam to the purposes of naval warfare
cogently recommends an extensive steam marine as important in estimating
the defenses of the country. Fortunately this may be obtained by us to a
great extent without incurring any large amount of expenditure. Steam
vessels to be engaged in the transportation of the mails on our
principal water courses, lakes, and ports of our coast could also be so
constructed as to be efficient as war vessels when needed, and would of
themselves constitute a formidable force in order to repel attacks from
abroad.. We can not be blind to the fact that other nations have already
added large numbers of steamships to their naval armaments and that this
new and powerful agent is destined to revolutionize the condition of the
world. It becomes the United States, therefore, looking to their
security, to adopt a similar policy, and the plan suggested will enable
them to do so at a small comparative cost.

I take the greatest pleasure in bearing testimony to the zeal and
untiring industry which has characterized the conduct of the members of
the Executive Cabinet. Each in his appropriate sphere has rendered me
the most efficient aid in carrying on the Government, and it will not, I
trust, appear out of place for me to bear this public testimony. The
cardinal objects which should ever be held in view by those intrusted
with the administration of public affairs are rigidly, and without favor
or affection, so to interpret the national will expressed in the laws as
that injustice should be done to none, justice to all. This has been the
rule upon which they have acted, and thus it is believed that few cases,
if any, exist wherein our fellow-citizens, who from time to time have
been drawn to the seat of Government for the settlement of their
transactions with the Government, have gone away dissatisfied. Where the
testimony has been perfected and was esteemed satisfactory their claims
have been promptly audited, and this in the absence of all favoritism or
partiality. The Government which is not just to its own people can
neither claim their affection nor the respect of the world. At the same
time, the Closest attention has been paid to those matters which relate
more immediately to the great concerns of the country. Order and
efficiency in each branch of the public service have prevailed,
accompanied by a system of the most rigid responsibility on the part of
the receiving and disbursing agents. The fact, in illustration of the
truth of this remark, deserves to be noticed that the revenues of the
Government, amounting in the last four years to upward of $120,000,000,
have been collected and disbursed through the numerous governmental
agents without the loss by default of any amount worthy of serious
commentary.

The appropriations made by Congress for the improvement of the rivers of
the West and of the harbors on the Lakes are in a course of judicious
expenditure under suitable agents, and are destined, it is to be hoped,
to realize all the benefits designed to be accomplished by Congress. I
can not, however, sufficiently impress upon Congress the great
importance of withholding appropriations from improvements which are not
ascertained by previous examination and survey to be necessary for the
shelter and protection of trade from the dangers of stores and tempests.
Without this precaution the expenditures are but too apt to inure to the
benefit of individuals, without reference to the only consideration
which can render them constitutional--the public interests and the
general good.

I can not too earnestly urge upon you the interests of this District,
over which by the Constitution Congress has exclusive jurisdiction. It
would be deeply to be regretted should there be at any time ground to
complain of neglect on the part of a community which, detached as it is
from the parental care of the States of Virginia and Maryland, can only
expect aid from Congress as its local legislature. Amongst the subjects
which claim your attention is the prompt organization of an asylum for
the insane who may be found from time to time sojourning within the
District. Such course is also demanded by considerations which apply to
branches of the public service. For the necessities in this behalf I
invite your particular attention to the report of the Secretary of the
Navy.

I have thus, gentlemen of the two Houses of Congress, presented you a
true and faithful picture of the condition of public affairs, both
foreign and domestic. The wants of the public service are made known to
you, and matters of no ordinary importance are urged upon your
consideration. Shall I not be permitted to congratulate you on the happy
auspices under which you have assembled and at the important change in
the condition of things which has occurred in the last three years?
During that period questions with foreign powers of vital importance to
the peace of our country have been settled and adjusted. A desolating
and wasting war with savage tribes has been brought to a close. The
internal tranquillity of the country, threatened by agitating questions,
has been preserved. The credit of the Government, which had experienced
a temporary embarrassment, has been thoroughly restored. Its coffers,
which for a season were empty, have been replenished. A currency nearly
uniform in its value has taken the place of one depreciated and almost
worthless. Commerce and manufactures, which had suffered in common with
every other interest, have once more revived, and the whole country
exhibits an aspect of prosperity and happiness. Trade and barter, no
longer governed by a wild and speculative mania, rest upon a solid and
substantial footing, and the rapid growth of our cities in every
direction bespeaks most strongly the favorable circumstances by which we
are surrounded. My happiness in the retirement which shortly awaits me
is the ardent hope which I experience that this state of prosperity is
neither deceptive nor destined to be short lived, and that measures
which have not yet received its sanction, but which I can not but regard
as closely connected with the honor, the glory, and still more enlarged
prosperity of the country, are destined at an early day to receive the
approval of Congress. Under these circumstances and with these
anticipations I shall most gladly leave to others more able than myself
the noble and pleasing task of sustaining the public prosperity. I shall
carry with me into retirement the gratifying reflection that as my sole
object throughout has been to advance the public good I may not entirely
have failed in accomplishing it; and this gratification is heightened in
no small degree by the fact that when under a deep and abiding sense of
duty I have found myself constrained to resort to the qualified veto it
has neither been followed by disapproval on the part of the people nor
weakened in any degree their attachment to that great conservative
feature of our Government.

***

State of the Union Address
James Polk
December 2, 1845

Fellow-Citizens of the Senate and of the House of Representatives:

It is to me a source of unaffected satisfaction to meet the
representatives of the States and the people in Congress assembled, as
it will be to receive the aid of their combined wisdom in the
administration of public affairs. In performing for the first time the
duty imposed on me by the Constitution of giving to you information of
the state of the Union and recommending to your consideration such
measures as in my judgment are necessary and expedient, I am happy that
I can congratulate you on the continued prosperity of our country. Under
the blessings of Divine Providence and the benign influence of our free
institutions, it stands before the world a spectacle of national
happiness.

With our unexampled advancement in all the elements of national
greatness, the affection of the people is confirmed for the Union of the
States and for the doctrines of popular liberty which lie at the
foundation of our Government.

It becomes us in humility to make our devout acknowledgments to the
Supreme Ruler of the Universe for the inestimable civil and religious
blessings with which we are favored.

In calling the attention of Congress to our relations with foreign
powers, I am gratified to be able to state that though with some of them
there have existed since your last session serious causes of irritation
and misunderstanding, yet no actual hostilities have taken place.
Adopting the maxim in the conduct of our foreign affairs "to ask nothing
that is not right and submit to nothing that is wrong," it has been my
anxious desire to preserve peace with all nations, but at the same time
to be prepared to resist aggression and maintain all our just rights.

In pursuance of the joint resolution of Congress "for annexing Texas to
the United States," my predecessor, on the 3d day of March, 1845,
elected to submit the first and second sections of that resolution to
the Republic of Texas as an overture on the part of the United States
for her admission as a State into our Union. This election I approved,
and accordingly the charge d'affaires of the United States in Texas,
under instructions of the 10th of March, 1845, presented these sections
of the resolution for the acceptance of that Republic. The executive
government, the Congress, and the people of Texas in convention have
successively complied with all the terms and conditions of the joint
resolution. A constitution for the government of the State of Texas,
formed by a convention of deputies, is herewith laid before Congress. It
is well known, also, that the people of Texas at the polls have accepted
the terms of annexation and ratified the constitution. I communicate to
Congress the correspondence between the Secretary of State and our
charge d'affaires in Texas, and also the correspondence of the latter
with the authorities of Texas, together with the official documents
transmitted by him to his own Government. The terms of annexation which
were offered by the United States having been accepted by Texas, the
public faith of both parties is solemnly pledged to the compact of their
union. Nothing remains to consummate the event but the passage of an act
by Congress to admit the State of Texas into the Union upon an equal
footing with the original States. Strong reasons exist why this should
be done at an early period of the session. It will be observed that by
the constitution of Texas the existing government is only continued
temporarily till Congress can act, and that the third Monday of the
present month is the day appointed for holding the first general
election. On that day a governor, a lieutenant-governor, and both
branches of the legislature will be chosen by the people. The President
of Texas is required, immediately after the receipt of official
information that the new State has been admitted into our Union by
Congress, to convene the legislature, and upon its meeting the existing
government will be superseded and the State government organized.
Questions deeply interesting to Texas, in common with the other States,
the extension of our revenue laws and judicial system over her people
and territory, as well as measures of a local character, will claim the
early attention of Congress, and therefore upon every principle of
republican government she ought to be represented in that body without
unnecessary delay. I can not too earnestly recommend prompt action on
this important subject. As soon as the act to admit Texas as a State
shall be passed the union of the two Republics will be consummated by
their own voluntary consent.

This accession to our territory has been a bloodless achievement. No arm
of force has been raised to produce the result. The sword has had no
part in the victory. We have not sought to extend our territorial
possessions by conquest, or our republican institutions over a reluctant
people. It was the deliberate homage of each people to the great
principle of our federative union. If we consider the extent of
territory involved in the annexation, its prospective influence on
America, the means by which it has been accomplished, springing purely
from the choice of the people themselves to share the blessings of our
union, the history of the world may be challenged to furnish a parallel.
The jurisdiction of the United States, which at the formation of the
Federal Constitution was bounded by the St. Marys on the Atlantic, has
passed the capes of Florida and been peacefully extended to the Del
Norte. In contemplating the grandeur of this event it is not to be
forgotten that the result was achieved in despite of the diplomatic
interference of European monarchies. Even France, the country which had
been our ancient ally, the country which has a common interest with us
in maintaining the freedom of the seas, the country which, by the
cession of Louisiana, first opened to us access to the Gulf of Mexico,
the country with which we have been every year drawing more and more
closely the bonds of successful commerce, most unexpectedly, and to our
unfeigned regret, took part in an effort to prevent annexation and to
impose on Texas, as a condition of the recognition of her independence
by Mexico, that she would never join herself to the United States. We
may rejoice that the tranquil and pervading influence of the American
principle of self-government was sufficient to defeat the purposes of
British and French interference, and that the almost unanimous voice of
the people of Texas has given to that interference a peaceful and
effective rebuke. From this example European Governments may learn how
vain diplomatic arts and intrigues must ever prove upon this continent
against that system of self-government which seems natural to our soil,
and which will ever resist foreign interference.

Toward Texas I do not doubt that a liberal and generous spirit will
actuate Congress in all that concerns her interests and prosperity, and
that she will never have cause to regret that she has united her "lone
star" to our glorious constellation.

I regret to inform you that our relations with Mexico since your last
session have not been of the amicable character which it is our desire
to cultivate with all foreign nations. On the 6th day of March last the
Mexican envoy extraordinary and minister plenipotentiary to the United
States made a formal protest in the name of his Government against the
joint resolution passed by Congress "for the annexation of Texas to the
United States," which he chose to regard as a violation of the rights of
Mexico, and in consequence of it he demanded his passports. He was
informed that the Government of the United States did not consider this
joint resolution as a violation of any of the rights of Mexico, or that
it afforded any just cause of offense to his Government; that the
Republic of Texas was an independent power, owing no allegiance to
Mexico and constituting no part of her territory or rightful sovereignty
and jurisdiction. He was also assured that it was the sincere desire of
this Government to maintain with that of Mexico relations of peace and
good understanding. That functionary, however, notwithstanding these
representations and assurances, abruptly terminated his mission and
shortly afterwards left the country. Our envoy extraordinary and
minister plenipotentiary to Mexico was refused all official intercourse
with that Government, and, after remaining several months, by the
permission of his own Government he returned to the United States. Thus,
by the acts of Mexico, all diplomatic intercourse between the two
countries was suspended.

Since that time Mexico has until recently occupied an attitude of
hostility toward the United States--has been marshaling and organizing
armies, issuing proclamations, and avowing the intention to make war on
the United States, either by an open declaration or by invading Texas.
Both the Congress and convention of the people of Texas invited this
Government to send an army into that territory to protect and defend
them against the menaced attack. The moment the terms of annexation
offered by the United States were accepted by Texas the latter became so
far a part of our own country as to make it our duty to afford such
protection and defense. I therefore deemed it proper, as a precautionary
measure, to order a strong squadron to the coasts of Mexico and to
concentrate an efficient military force on the western frontier of
Texas. Our Army was ordered to take position in the country between the
Nueces and the Del Norte, and to repel any invasion of the Texan
territory which might be attempted by the Mexican forces. Our squadron
in the Gulf was ordered to cooperate with the Army. But though our Army
and Navy were placed in a position to defend our own and the rights of
Texas, they were ordered to commit no act of hostility against Mexico
unless she declared war or was herself the aggressor by striking the
first blow. The result has been that Mexico has made no aggressive
movement, and our military and naval commanders have executed their
orders with such discretion that the peace of the two Republics has not
been disturbed. Texas had declared her independence and maintained it by
her arms for more than nine years. She has had an organized government
in successful operation during that period. Her separate existence as an
independent state had been recognized by the United States and the
principal powers of Europe. Treaties of commerce and navigation had been
concluded with her by different nations, and it had become manifest to
the whole world that any further attempt on the part of Mexico to
conquer her or overthrow her Government would be vain. Even Mexico
herself had become satisfied of this fact, and whilst the question of
annexation was pending before the people of Texas during the past summer
the Government of Mexico, by a formal act, agreed to recognize the
independence of Texas on condition that she would not annex herself to
any other power. The agreement to acknowledge the independence of Texas,
whether with or without this condition, is conclusive against Mexico.
The independence of Texas is a fact conceded by Mexico herself, and she
had no right or authority to prescribe restrictions as to the form of
government which Texas might afterwards choose to assume. But though
Mexico can not complain of the United States on account of the
annexation of Texas, it is to be regretted that serious causes of
misunderstanding between the two countries continue to exist, growing
out of unredressed injuries inflicted by the Mexican authorities and
people on the persons and property of citizens of the United States
through a long series of years. Mexico has admitted these injuries, but
has neglected and refused to repair them. Such was the character of the
wrongs and such the insults repeatedly offered to American citizens and
the American flag by Mexico, in palpable violation of the laws of
nations and the treaty between the two countries of the 5th of April,
1831, that they have been repeatedly brought to the notice of Congress
by my predecessors. As early as the 6th of February, 1837, the President
of the United States declared in a message to Congress that--

The length of time since some of the injuries have been committed, the
repeated and unavailing applications for redress, the wanton character
of some of the outrages upon the property and persons of our citizens,
upon the officers and flag of the United States, independent of recent
insults to this Government and people by the late extraordinary Mexican
minister, would justify in the eyes of all nations immediate war.

He did not, however, recommend an immediate resort to this extreme
measure, which, he declared, "should not be used by just and generous
nations, confiding in their strength for injuries committed, if it can
be honorably avoided," but, in a spirit of forbearance, proposed that
another demand be made on Mexico for that redress which had been so long
and unjustly withheld. In these views committees of the two Houses of
Congress, in reports made to their respective bodies, concurred. Since
these proceedings more than eight years have elapsed, during which, in
addition to the wrongs then complained of, others of an aggravated
character have been committed on the persons and property of our
citizens. A special agent was sent to Mexico in the summer of 1838 with
full authority to make another and final demand for redress. The demand
was made; the Mexican Government promised to repair the wrongs of which
we complained, and after much delay a treaty of indemnity with that view
was concluded between the two powers on the 11th of April, 1839, and was
duly ratified by both Governments. By this treaty a joint commission was
created to adjudicate and decide on the claims of American citizens on
the Government of Mexico. The commission was organized at Washington on
the 25th day of August, 1840. Their time was limited to eighteen months,
at the expiration of which they had adjudicated and decided claims
amounting to $2,026,139.68 in favor of citizens of the United States
against the Mexican Government, leaving a large amount of claims
undecided. Of the latter the American commissioners had decided in favor
of our citizens claims amounting to $928,627.88, which were left unacted
on by the umpire authorized by the treaty. Still further claims,
amounting to between three and four millions of dollars, were submitted
to the board too late to be considered, and were left undisposed of. The
sum of $2,026,139.68, decided by the board, was a liquidated and
ascertained debt due by Mexico to the claimants, and there was no
justifiable reason for delaying its payment according to the terms of
the treaty. It was not, however, paid. Mexico applied for further
indulgence, and, in that spirit of liberality and forbearance which has
ever marked the policy of the United States toward that Republic, the
request was granted, and on the 30th of January, 1843, a new treaty was
concluded. By this treaty it was provided that the interest due on the
awards in favor of claimants under the convention of the 11th of April,
1839, should be paid out the 30th of April, 1843, and that--

The principal of the said awards and the interest accruing thereon shall
be paid in five years, in equal installments every three months, the
said term of five years to commence on the 30th day of April, 1843,
aforesaid.

The interest due on the 30th day of April, 1843, and the three first of
the twenty installments have been paid. Seventeen of these installments,
remain unpaid, seven of which are now due.

The claims which were left undecided by the joint commission, amounting
to more than $3,000,000, together with other claims for spoliations on
the property of our citizens, were subsequently presented to the Mexican
Government for payment, and were so far recognized that a treaty
providing for their examination and settlement by a joint commission was
concluded and signed at Mexico on the 20th day of November, 1843. This
treaty was ratified by the United States with certain amendments to
which no just exception could have been taken, but it has not yet
received the ratification of the Mexican Government. In the meantime our
citizens, who suffered great losses--and some of whom have been reduced
from affluence to bankruptcy--are without remedy unless their rights be
enforced by their Government. Such a continued and unprovoked series of
wrongs could never have been tolerated by the United States had they
been committed by one of the principal nations of Europe. Mexico was,
however, a neighboring sister republic, which, following our example,
had achieved her independence, and for whose success and prosperity all
our sympathies were early enlisted. The United States were the first to
recognize her independence and to receive her into the family of
nations, and have ever been desirous of cultivating with her a good
understanding. We have therefore borne the repeated wrongs she has
committed with great patience, in the hope that a returning sense of
justice would ultimately guide her councils and that we might, if
possible, honorably avoid any hostile collision with her. Without the
previous authority of Congress the Executive possessed no power to adopt
or enforce adequate remedies for the injuries we had suffered, or to do
more than to be prepared to repel the threatened aggression on the part
of Mexico. After our Army and Navy had remained on the frontier and
coasts of Mexico for many weeks without any hostile movement on her
part, though her menaces were continued, I deemed it important to put an
end, if possible, to this state of things. With this view I caused steps
to be taken in the month of September last to ascertain distinctly and
in an authentic form what the designs of the Mexican Government
were--whether it was their intention to declare war, or invade Texas, or
whether they were disposed to adjust and settle in an amicable manner
the pending differences between the two countries. On the 9th of
November an official answer was received that the Mexican Government
consented to renew the diplomatic relations which had been suspended in
March last, and for that purpose were willing to accredit a minister
from the United States. With a sincere desire to preserve peace and
restore relations of good understanding between the two Republics, I
waived all ceremony as to the manner of renewing diplomatic intercourse
between them, and, assuming the initiative, on the 10th of November a
distinguished citizen of Louisiana was appointed envoy extraordinary and
minister plenipotentiary to Mexico, clothed with full powers to adjust
and definitively settle all pending differences between the two
countries, including those of boundary between Mexico and the State of
Texas. The minister appointed has set out on his mission and is probably
by this time near the Mexican capital. He has been instructed to bring
the negotiation with which he is charged to a conclusion at the earliest
practicable period, which it is expected will be in time to enable me to
communicate the result to Congress during the present session. Until
that result is known I forbear to recommend to Congress such ulterior
measures of redress for the wrongs and injuries we have so long borne as
it would have been proper to make had no such negotiation been
instituted.

Congress appropriated at the last session the sum of $275,000 for the
payment of the April and July installments of the Mexican indemnities
for the year 1844:

Provided it shall be ascertained to the satisfaction of the American
Government that said installments have been paid by the Mexican
Government to the agent appointed by the United States to receive the
same in such manner as to discharge all claim on the Mexican Government,
and said agent to be delinquent in remitting the money to the United
States.

The unsettled state of our relations with Mexico has involved this
subject in much mystery. The first information in an authentic form from
the agent of the United States, appointed under the Administration of my
predecessor, was received at the State Department on the 9th of November
last. This is contained in a letter, dated the 17th of October,
addressed by him to one of our citizens then in Mexico with a view of
having it communicated to that Department. From this it appears that the
agent on the 20th of September, 1844, gave a receipt to the treasury of
Mexico for the amount of the April and July installments of the
indemnity. In the same communication, however, he asserts that he had
not received a single dollar in cash, but that he holds such securities
as warranted him at the time in giving the receipt, and entertains no
doubt but that he will eventually obtain the money. As these
installments appear never to have been actually paid by the Government
of Mexico to the agent, and as that Government has not, therefore, been
released so as to discharge the claim, I do not feel myself warranted in
directing payment to be made to the claimants out of the Treasury
without further legislation. Their case is undoubtedly one of much
hardship, and it remains for Congress to decide whether any, and what,
relief ought to be granted to them. Our minister to Mexico has been
instructed to ascertain the facts of the case from the Mexican
Government in an authentic and official form and report the result with
as little delay as possible.

My attention was early directed to the negotiation which on the 4th of
March last I found pending at Washington between the United States and
Great Britain on the subject of the Oregon Territory. Three several
attempts had been previously made to settle the questions in dispute
between the two countries by negotiation upon the principle of
compromise, but each had proved unsuccessful. These negotiations took
place at London in the years 1818, 1824, and 1826--the two first under
the Administration of Mr. Monroe and the last under that of Mr. Adams.
The negotiation of 1818, having failed to accomplish its object,
resulted in the convention of the 20th of October of that year.

By the third article of that convention it was--

Agreed that any country that may be claimed by either party on the
northwest coast of America westward of the Stony Mountains shall,
together with its harbors, bays, and creeks, and the navigation of all
rivers within the same, be free and open for the term of ten years from
the date of the signature of the present convention to the vessels,
citizens, and subjects of the two powers; it being well understood that
this agreement is not to be construed to the prejudice of any claim
which either of the two high contracting parties may have to any part of
the said country, nor shall it be taken to affect the claims of any
other power or state to any part of the said country, the only object of
the high contracting parties in that respect being to prevent disputes
and differences amongst themselves.

The negotiation of 1824 was productive of no result, and the convention
of 1818 was left unchanged.

The negotiation of 1826, having also failed to effect an adjustment by
compromise, resulted in the convention of August 6, 1827, by which it
was agreed to continue in force for an indefinite period the provisions
of the third article of the convention of the 20th of October, 1818; and
it was further provided that--

It shall be competent, however, to either of the contracting parties, in
case either should think fit, at any time after the 20th of October,
1828, on giving due notice of twelve months to the other contracting
party, to annul and abrogate this convention; and it shall in such case
be accordingly entirely annulled and abrogated after the expiration of
the said term of notice.

In these attempts to adjust the controversy the parallel of the
forty-ninth degree of north latitude had been offered by the United
States to Great Britain, and in those of 1818 and 1826, with a further
concession of the free navigation of the Columbia River south of that
latitude. The parallel of the forty-ninth degree from the Rocky
Mountains to its intersection with the northeasternmost branch of the
Columbia, and thence down the channel of that river to the sea, had been
offered by Great Britain, with an addition of a small detached territory
north of the Columbia. Each of these propositions had been rejected by
the parties respectively. In October, 1843, the envoy extraordinary and
minister plenipotentiary of the United States in London was authorized
to make a similar offer to those made in 1818 and 1826. Thus stood the
question when the negotiation was shortly afterwards transferred to
Washington, and on the 23d of August, 1844, was formally opened under
the direction of my immediate predecessor. Like all the previous
negotiations, it was based upon principles of "compromise," and the
avowed purpose of the parties was "to treat of the respective claims of
the two countries to the Oregon Territory with the view to establish a
permanent boundary between them westward of the Rocky Mountains to the
Pacific Ocean."

Accordingly, on the 26th of August, 1844, the British plenipotentiary
offered to divide the Oregon Territory by the forty-ninth parallel of
north latitude from the Rocky Mountains to the point of its intersection
with the northeasternmost branch of the Columbia River, and thence down
that river to the sea, leaving the free navigation of the river to be
enjoyed in common by both parties, the country south of this line to
belong to the United States and that north of it to Great Britain. At
the same time he proposed in addition to yield to the United States a
detached territory north of the Columbia extending along the Pacific and
the Straits of Fuca from Bulfinchs Harbor, inclusive, to Hoods Canal,
and to make free to the United States any port or ports south of
latitude 49  which they might desire, either on the mainland or on
Quadra and Vancouvers Island. With the exception of the free ports, this
was the same offer which had been made by the British and rejected by
the American Government in the negotiation of 1826. This proposition was
properly rejected by the American plenipotentiary on the day it was
submitted. This was the only proposition of compromise offered by the
British plenipotentiary. The proposition on the part of Great Britain
having been rejected, the British plenipotentiary requested that a
proposal should be made by the United States for "an equitable
adjustment of the question." When I came into office I found this to be
the state of the negotiation. Though entertaining the settled conviction
that the British pretensions of title could not be maintained to any
portion of the Oregon Territory upon any principle of public law
recognized by nations, yet in deference to what had been done by my
predecessors, and especially in consideration that propositions of
compromise had been thrice made by two preceding Administrations to
adjust the question on the parallel of 49 , and in two of them yielding
to Great Britain the free navigation of the Columbia, and that the
pending negotiation had been commenced on the basis of compromise, I
deemed it to be my duty not abruptly to break it off. In consideration,
too, that under the conventions of 1818 and 1827 the citizens and
subjects of the two powers held a joint occupancy of the country, I was
induced to make another effort to settle this long-pending controversy
in the spirit of moderation which had given birth to the renewed
discussion. A proposition was accordingly made, which was rejected by
the British plenipotentiary, who, without submitting any other
proposition, suffered the negotiation on his part to drop, expressing
his trust that the United States would offer what he saw fit to call
"some further proposal for the settlement of the Oregon question more
consistent with fairness and equity and with the reasonable expectations
of the British Government." The proposition thus offered and rejected
repeated the offer of the parallel of 49  of north latitude, which had
been made by two preceding Administrations, but without proposing to
surrender to Great Britain, as they had done, the free navigation of the
Columbia River. The right of any foreign power to the free navigation of
any of our rivers through the heart of our country was one which I was
unwilling to concede. It also embraced a provision to make free to Great
Britain any port or ports on the cap of Quadra and Vancouvers Island
south of this parallel. Had this been a new question, coming under
discussion for the first time, this proposition would not have been
made. The extraordinary and wholly inadmissible demands of the British
Government and the rejection of the proposition made in deference alone
to what had been done by my predecessors and the implied obligation
which their acts seemed to impose afford satisfactory evidence that no
compromise which the United States ought to accept can be effected. With
this conviction the proposition of compromise which had been made and
rejected was by my direction subsequently withdrawn and our title to the
whole Oregon Territory asserted, and, as is believed, maintained by
irrefragable facts and arguments.

The civilized world will see in these proceedings a spirit of liberal
concession on the part of the United States, and this Government will be
relieved from all responsibility which may follow the failure to settle
the controversy.

All attempts at compromise having failed, it becomes the duty of
Congress to consider what measures it may be proper to adopt for the
security and protection of our citizens now inhabiting or who may
hereafter inhabit Oregon, and for the maintenance of our just title to
that Territory. In adopting measures for this purpose care should be
taken that nothing be done to violate the stipulations of the convention
of 1827, which is still in force. The faith of treaties, in their letter
and spirit, has ever been, and, I trust, will ever be, scrupulously
observed by the United States. Under that convention a year's notice is
required to be given by either party to the other before the joint
occupancy shall terminate and before either can rightfully assert or
exercise exclusive jurisdiction over any portion of the territory. This
notice it would, in my judgment, be proper to give, and I recommend that
provision be made by law for giving it accordingly, and terminating in
this manner the convention of the 6th of August, 1827.

It will become proper for Congress to determine what legislation they
can in the meantime adopt without violating this convention. Beyond all
question the protection of our laws and our jurisdiction, civil and
criminal, ought to be immediately extended over our citizens in Oregon.
They have had just cause to complain of our long neglect in this
particular, and have in consequence been compelled for their own
security and protection to establish a provisional government for
themselves. Strong in their allegiance and ardent in their attachment to
the United States, they have been thus cast upon their own resources.
They are anxious that our laws should be extended over them, and I
recommend that this be done by Congress with as little delay as possible
in the full extent to which the British Parliament have proceeded in
regard to British subjects in that Territory by their act of July 2,
1821, "for regulating the fur trade and establishing a criminal and
civil jurisdiction within certain parts of North America." By this act
Great Britain extended her laws and jurisdiction, civil and criminal,
over her subjects engaged in the fur trade in that Territory. By it the
courts of the Province of Upper Canada were empowered to take cognizance
of causes civil and criminal. Justices of the peace and other judicial
officers were authorized to be appointed in Oregon with power to execute
all process issuing from the courts of that Province, and to "sit and
hold courts of record for the trial of criminal offenses and
misdemeanors" not made the subject of capital punishment, and also of
civil cases where the cause of action shall not "exceed in value the
amount or sum of lbs. 200."

Subsequent to the date of this act of Parliament a grant was made from
the "British Crown" to the Hudsons Bay Company of the exclusive trade
with the Indian tribes in the Oregon Territory, subject to a reservation
that it shall not operate to the exclusion "of the subjects of any
foreign states who, under or by force of any convention for the time
being between us and such foreign states, respectively, may be entitled
to and shall be engaged in the said trade." It is much to be regretted
that while under this act British subjects have enjoyed the protection
of British laws and British judicial tribunals throughout the whole of
Oregon, American citizens in the same Territory have enjoyed no such
protection from their Government. At the same time, the result
illustrates the character of our people and their institutions. In spite
of this neglect they have multiplied, and their number is rapidly
increasing in that Territory. They have made no appeal to arms, but have
peacefully fortified themselves in their new homes by the adoption of
republican institutions for themselves, furnishing another example of
the truth that self-government is inherent in the American breast and
must prevail. It is due to them that they should be embraced and
protected by our laws. It is deemed important that our laws regulating
trade and intercourse with the Indian tribes east of the Rocky Mountains
should be extended to such tribes as dwell beyond them. The increasing
emigration to Oregon and the care and protection which is due from the
Government to its citizens in that distant region make it our duty, as
it is our interest, to cultivate amicable relations with the Indian
tribes of that Territory. For this purpose I recommend that provision be
made for establishing an Indian agency and such subagencies as may be
deemed necessary beyond the Rocky Mountains.

For the protection of emigrants whilst on their way to Oregon against
the attacks of the Indian tribes occupying the country through which
they pass, I recommend that a suitable number of stockades and
blockhouse forts be erected along the usual route between our frontier
settlements on the Missouri and the Rocky Mountains, and that an
adequate force of mounted riflemen be raised to guard and protect them
on their journey. The immediate adoption of these recommendations by
Congress will not violate the provisions of the existing treaty. It will
be doing nothing more for American citizens than British laws have long
since done for British subjects in the same territory.

It requires several months to perform the voyage by sea from the
Atlantic States to Oregon, and although we have a large number of whale
ships in the Pacific, but few of them afford an opportunity of
interchanging intelligence without great delay between our settlements
in that distant region and the United States. An overland mail is
believed to be entirely practicable, and the importance of establishing
such a mail at least once a month is submitted to the favorable
consideration of Congress.

It is submitted to the wisdom of Congress to determine whether at their
present session, and until after the expiration of the year's notice,
any other measures may be adopted consistently with the convention of
1827 for the security of our rights and the government and protection of
our citizens in Oregon. That it will ultimately be wise and proper to
make liberal grants of land to the patriotic pioneers who amidst
privations and dangers lead the way through savage tribes inhabiting the
vast wilderness intervening between our frontier settlements and Oregon,
and who cultivate and are ever ready to defend the soil, I am fully
satisfied. To doubt whether they will obtain such grants as soon as the
convention between the United States and Great Britain shall have ceased
to exist would be to doubt the justice of Congress; but, pending the
year's notice, it is worthy of consideration whether a stipulation to
this effect may be made consistently with the spirit of that convention.

The recommendations which I have made as to the best manner of securing
our rights in Oregon are submitted to Congress with great deference.
Should they in their wisdom devise any other mode better calculated to
accomplish the same object, it shall meet with my hearty concurrence.

At the end of the year's notice, should Congress think it proper to make
provision for giving that notice, we shall have reached a period when
the national rights in Oregon must either be abandoned or firmly
maintained. That they can not be abandoned without a sacrifice of both
national honor and interest is too clear to admit of doubt.

Oregon is a part of the North American continent, to which, it is
confidently affirmed, the title of the United States is the best now in
existence. For the grounds on which that title rests I refer you to the
correspondence of the late and present Secretary of State with the
British plenipotentiary during the negotiation. The British proposition
of compromise, which would make the Columbia the line south of 49 , with
a trifling addition of detached territory to the United States north of
that river, and would leave on the British side two-thirds of the whole
Oregon Territory, including the free navigation of the Columbia and all
the valuable harbors on the Pacific, can never for a moment be
entertained by the United States without an abandonment of their just
and dear territorial rights, their own self-respect, and the national
honor. For the information of Congress, I communicate herewith the
correspondence which took place between the two Governments during the
late negotiation.

The rapid extension of our settlements over our territories heretofore
unoccupied, the addition of new States to our Confederacy, the expansion
of free principles, and our rising greatness as a nation are attracting
the attention of the powers of Europe, and lately the doctrine has been
broached in some of them of a "balance of power" on this continent to
check our advancement. The United States, sincerely desirous of
preserving relations of good understanding with all nations, can not in
silence permit any European interference on the North American
continent, and should any such interference be attempted will be ready
to resist it at any and all hazards.

It is well known to the American people and to all nations that this
Government has never interfered with the relations subsisting between
other governments. We have never made ourselves parties to their wars or
their alliances; we have not sought their territories by conquest; we
have not mingled with parties in their domestic struggles; and believing
our own form of government to be the best, we have never attempted to
propagate it by intrigues, by diplomacy, or by force. We may claim on
this continent a like exemption from European interference. The nations
of America are equally sovereign and independent with those of Europe.
They possess the same rights, independent of all foreign interposition,
to make war, to conclude peace, and to regulate their internal affairs.
The people of the United States can not, therefore, view with
indifference attempts of European powers to interfere with the
independent action of the nations on this continent. The American system
of government is entirely different from that of Europe. Jealousy among
the different sovereigns of Europe, lest any one of them might become
too powerful for the rest, has caused them anxiously to desire the
establishment of what they term the "balance of power." It can not be
permitted to have any application on the North American continent, and
especially to the United States. We must ever maintain the principle
that the people of this continent alone have the right to decide their
own destiny. Should any portion of them, constituting an independent
state, propose to unite themselves with our Confederacy, this will be a
question for them and us to determine without any foreign interposition.
We can never consent that European powers shall interfere to prevent
such a union because it might disturb the "balance of power" which they
may desire to maintain upon this continent. Near a quarter of a century
ago the principle was distinctly announced to the world, in the annual
message of one of my predecessors, that--

The American continents, by the free and independent condition which
they have assumed and maintain, are henceforth not to be considered as
subjects for colonization by any European powers.

This principle will apply with greatly increased force should any
European power attempt to establish any new colony in North America. In
the existing circumstances of the world the present is deemed a proper
occasion to reiterate and reaffirm the principle avowed by Mr. Monroe
and to state my cordial concurrence in its wisdom and sound policy. The
reassertion of this principle, especially in reference to North America,
is at this day but the promulgation of a policy which no European power
should cherish the disposition to resist. Existing rights of every
European nation should be respected, but it is due alike to our safety
and our interests that the efficient protection of our laws should be
extended over our whole territorial limits, and that it should be
distinctly announced to the world as our settled policy that no future
European colony or dominion shall with our consent be planted or
established on any part of the North American continent.

A question has recently arisen under the tenth article of the subsisting
treaty between the United States and Prussia. By this article the
consuls of the two countries have the right to sit as judges and
arbitrators "in such differences as may arise between the captains and
crews of the vessels belonging to the nation whose interests are
committed to their charge without the interference of the local
authorities, unless the conduct of the crews or of the captain should
disturb the order or tranquillity of the country, or the said consuls
should require their assistance to cause their decisions to be carried
into effect or supported."

The Prussian consul at New Bedford in June, 1844, applied to Mr. Justice
Story to carry into effect a decision made by him between the captain
and crew of the Prussian ship Borussia, but the request was refused on
the ground that without previous legislation by Congress the judiciary
did not possess the power to give effect to this article of the treaty.
The Prussian Government, through their minister here, have complained of
this violation of the treaty, and have asked the Government of the
United States to adopt the necessary measures to prevent similar
violations hereafter. Good faith to Prussia, as well as to other nations
with whom we have similar treaty stipulations, requires that these
should be faithfully observed. I have deemed it proper, therefore, to
lay the subject before Congress and to recommend such legislation as may
be necessary to give effect to these treaty obligations.

By virtue of an arrangement made between the Spanish Government and that
of the United States in December, 1831, American vessels, since the 29th
of April, 1832, have been admitted to entry in the ports of Spain,
including those of the Balearic and Canary islands, on payment of the
same tonnage duty of 5 cents per ton, as though they had been Spanish
vessels; and this whether our vessels arrive in Spain directly from the
United States or indirectly from any other country. When Congress, by
the act of 13th July, 1832, gave effect to this arrangement between the
two Governments, they confined the reduction of tonnage duty merely to
Spanish vessels "coming from a port in Spain," leaving the former
discriminating duty to remain against such vessels coming from a port in
any other country. It is manifestly unjust that whilst American vessels
arriving in the ports of Spain from other countries pay no more duty
than Spanish vessels, Spanish vessels arriving in the ports of the
United States from other countries should be subjected to heavy
discriminating tonnage duties. This is neither equality nor reciprocity,
and is in violation of the arrangement concluded in December, 1831,
between the two countries. The Spanish Government have made repeated and
earnest remonstrances against this inequality, and the favorable
attention of Congress has been several times invoked to the subject by
my predecessors. I recommend, as an act of justice to Spain, that this
inequality be removed by Congress and that the discriminating duties
which have been levied under the act of the 13th of July, 1832, on
Spanish vessels coming to the United States from any other foreign
country be refunded. This recommendation does not embrace Spanish
vessels arriving in the United States from Cuba and Porto Rico, which
will still remain subject to the provisions of the act of June 30, 1834,
concerning tonnage duty on such vessels. By the act of the 14th of July,
1832, coffee was exempted from duty altogether. This exemption was
universal, without reference to the country where it was produced or the
national character of the vessel in which it was imported. By the tariff
act of the 30th of August, 1842, this exemption from duty was restricted
to coffee imported in American vessels from the place of its production,
whilst coffee imported under all other circumstances was subjected to a
duty of 20 per cent ad valorem. Under this act and our existing treaty
with the King of the Netherlands Java coffee imported from the European
ports of that Kingdom into the United States, whether in Dutch or
American vessels, now pays this rate of duty. The Government of the
Netherlands complains that such a discriminating duty should have been
imposed on coffee the production of one of its colonies, and which is
chiefly brought from Java to the ports of that Kingdom and exported from
thence to foreign countries. Our trade with the Netherlands is highly
beneficial to both countries and our relations with them have ever been
of the most friendly character. Under all the circumstances of the case,
I recommend that this discrimination should be abolished and that the
coffee of Java imported from the Netherlands be placed upon the same
footing with that imported directly from Brazil and other countries
where it is produced.

Under the eighth section of the tariff act of the 30th of August, 1842,
a duty of 15 cents per gallon was imposed on port wine in casks, while
on the red wines of several other countries, when imported in casks, a
duty of only 6 cents per gallon was imposed. This discrimination, so far
as regarded the port wine of Portugal, was deemed a violation of our
treaty with that power, which provides that--

No higher or other duties shall be imposed on the importation into the
United States of America of any article the growth, produce, or
manufacture of the Kingdom and possessions of Portugal than such as are
or shall be payable on the like article being the growth, produce, or
manufacture of any other foreign country.

Accordingly, to give effect to the treaty as well as to the intention of
Congress, expressed in a proviso to the tariff act itself, that nothing
therein contained should be so construed as to interfere with subsisting
treaties with foreign nations, a Treasury circular was issued on the
16th of July, 1844, which, among other things, declared the duty on the
port wine of Portugal, in casks, under the existing laws and treaty to
be 6 cents per gallon, and directed that the excess of duties which had
been collected on such wine should be refunded. By virtue of another
clause in the same section of the act it is provided that all imitations
of port or any other wines "shall be subject to the duty provided for
the genuine article." Imitations of port wine, the production of France,
are imported to some extent into the United States, and the Government
of that country now claims that under a correct construction of the act
these imitations ought not to pay a higher duty than that imposed upon
the original port wine of Portugal. It appears to me to be unequal and
unjust that French imitations of port wine should be subjected to a duty
of 15 cents, while the more valuable article from Portugal should pay a
duty of 6 cents only per gallon. I therefore recommend to Congress such
legislation as may be necessary to correct the inequality.

The late President, in his annual message of December last, recommended
an appropriation to satisfy the claims of the Texan Government against
the United States, which had been previously adjusted so far as the
powers of the Executive extend. These claims arose out of the act of
disarming a body of Texan troops under the command of Major Snively by
an officer in the service of the United States, acting under the orders
of our Government, and the forcible entry into the custom-house at
Bryarlys Landing, on Red River, by certain citizens of the United States
and taking away therefrom the goods seized by the collector of the
customs as forfeited under the laws of Texas. This was a liquidated debt
ascertained to be due to Texas when an independent state. Her acceptance
of the terms of annexation proposed by the United States does not
discharge or invalidate the claim. I recommend that provision be made
for its payment.

The commissioner appointed to China during the special session of the
Senate in March last shortly afterwards set out on his mission in the
United States ship Columbus. On arriving at Rio de Janeiro on his
passage the state of his health had become so critical that by the
advice of his medical attendants he returned to the United States early
in the month of October last. Commodore Biddle, commanding the East
India Squadron, proceeded on his voyage in the Columbus, and was charged
by the commissioner with the duty of exchanging with the proper
authorities the ratifications of the treaty lately concluded with the
Emperor of China. Since the return of the commissioner to the United
States his health has been much improved, and he entertains the
confident belief that he will soon be able to proceed on his mission.

Unfortunately, differences continue to exist among some of the nations
of South America which, following our example, have established their
independence, while in others internal dissensions prevail. It is
natural that our sympathies should be warmly enlisted for their welfare;
that we should desire that all controversies between them should be
amicably adjusted and their Governments administered in a manner to
protect the rights and promote the prosperity of their people. It is
contrary, however, to our settled policy to interfere in their
controversies, whether external or internal.

I have thus adverted to all the subjects connected with our foreign
relations to which I deem it necessary to call your attention. Our
policy is not only peace with all, but good will toward all the powers
of the earth. While we are just to all, we require that all shall be
just to us. Excepting the differences with Mexico and Great Britain, our
relations with all civilized nations are of the most satisfactory
character. It is hoped that in this enlightened age these differences
may be amicably adjusted.

The Secretary of the Treasury in his annual report to Congress will
communicate a full statement of the condition of our finances. The
imports for the fiscal year ending on the 30th of June last were of the
value of $117,254,564, of which the amount exported was $15,346,830,
leaving a balance of $101,907,734 for domestic consumption. The exports
for the same year were of the value of $114,646,606, of which the amount
of domestic articles was $99,299,776. The receipts into the Treasury
during the same year were $29,769,133.56, of which there were derived
from customs $27,528,122.70, from sales of public lands $2,077,022.30,
and from incidental and miscellaneous sources $163,998.56. The
expenditures for the same period were $29,968,206.98, of which
$8,588,157.62 were applied to the payment of the public debt. The
balance in the Treasury on the 1st of July last was $7,658,306.22. The
amount of the public debt remaining unpaid on the 1st of October last
was $17,075,445.52. Further payments of the public debt would have been
made, in anticipation of the period of its reimbursement under the
authority conferred upon the Secretary of the Treasury by the acts of
July 21, 1841, and of April 15, 1842, and March 3, 1843, had not the
unsettled state of our relations with Mexico menaced hostile collision
with that power. In view of such a contingency it was deemed prudent to
retain in the Treasury an amount unusually large for ordinary purposes.

A few years ago our whole national debt growing out of the Revolution
and the War of 1812 with Great Britain was extinguished, and we
presented to the world the rare and noble spectacle of a great and
growing people who had fully discharged every obligation. Since that
time the existing debt has been contracted, and, small as it is in
comparison with the similar burdens of most other nations, it should be
extinguished at the earliest practicable period. Should the state of the
country permit, and especially if our foreign relations interpose no
obstacle, it is contemplated to apply all the moneys in the Treasury as
they accrue, beyond what is required for the appropriations by Congress,
to its liquidation. I cherish the hope of soon being able to
congratulate the country on its recovering once more the lofty position
which it so recently occupied. Our country, which exhibits to the world
the benefits of self-government, in developing all the sources of
national prosperity owes to mankind the permanent example of a nation
free from the blighting influence of a public debt.

The attention of Congress is invited to the importance of making
suitable modifications and reductions of the rates of duty imposed by
our present tariff laws. The object of imposing duties on imports should
be to raise revenue to pay the necessary expenses of Government.
Congress may undoubtedly, in the exercise of a sound discretion,
discriminate in arranging the rates of duty on different articles, but
the discriminations should be within the revenue standard and be made
with the view to raise money for the support of Government.

It becomes important to understand distinctly what is meant by a revenue
standard the maximum of which should not be exceeded in the rates of
duty imposed. It is conceded, and experience proves, that duties may be
laid so high as to diminish or prohibit altogether the importation of
any given article, and thereby lessen or destroy the revenue which at
lower rates would be derived from its importation. Such duties exceed
the revenue rates and are not imposed to raise money for the support of
Government. If Congress levy a duty for revenue of 1 per cent on a given
article, it will produce a given amount of money to the Treasury and
will incidentally and necessarily afford protection or advantage to the
amount of 1 per cent to the home manufacturer of a similar or like
article over the importer. If the duty be raised to 10 per cent, it will
produce a greater amount of money and afford greater protection. If it
be still raised to 20, 25, or 30 per cent, and if as it is raised the
revenue derived from it is found to be increased, the protection or
advantage will also be increased; but if it be raised to 31 per cent,
and it is found that the revenue produced at that rate is less than at
30 per cent, it ceases to be a revenue duty. The precise point in the
ascending scale of duties at which it is ascertained from experience
that the revenue is greatest is the maximum rate of duty which can be
laid for the bona fide purpose of collecting money for the support of
Government. To raise the duties higher than that point, and thereby
diminish the amount collected, is to levy them for protection merely,
and not for revenue. As long, then, as Congress may gradually increase
the rate of duty on a given article, and the revenue is increased by
such increase of duty, they are within the revenue standard. When they
go beyond that point, and as they increase the duties, the revenue is
diminished or destroyed; the act ceases to have for its object the
raising of money to support Government, but is for protection merely. It
does not follow that Congress should levy the highest duty on all
articles of import which they will bear within the revenue standard, for
such rates would probably produce a much larger amount than the
economical administration of the Government would require. Nor does it
follow that the duties on all articles should be at the same or a
horizontal rate. Some articles will bear a much higher revenue duty than
others. Below the maximum of the revenue standard Congress may and ought
to discriminate in the rates imposed, taking care so to adjust them on
different articles as to produce in the aggregate the amount which, when
added to the proceeds of the sales of public lands, may be needed to pay
the economical expenses of the Government.

In levying a tariff of duties Congress exercise the taxing power, and
for purposes of revenue may select the objects of taxation. They may
exempt certain articles altogether and permit their importation free of
duty. On others they may impose low duties. In these classes should be
embraced such articles of necessity as are in general use, and
especially such as are consumed by the laborer and poor as well as by
the wealthy citizen. Care should be taken that all the great interests
of the country, including manufactures, agriculture, commerce,
navigation, and the mechanic arts, should, as far as may be practicable,
derive equal advantages from the incidental protection which a just
system of revenue duties may afford. Taxation, direct or indirect, is a
burden, and it should be so imposed as to operate as equally as may be
on all classes in the proportion of their ability to bear it. To make
the taxing power an actual benefit to one class necessarily increases
the burden of the others beyond their proportion, and would be
manifestly unjust. The terms "protection to domestic industry" are of
popular import, but they should apply under a just system to all the
various branches of industry in our country. The farmer or planter who
toils yearly in his fields is engaged in "domestic industry," and is as
much entitled to have his labor "protected" as the manufacturer, the man
of commerce, the navigator, or the mechanic, who are engaged also in
"domestic industry" in their different pursuits. The joint labors of all
these classes constitute the aggregate of the "domestic industry" of the
nation, and they are equally entitled to the nation's "protection." No
one of them can justly claim to be the exclusive recipient of
"protection," which can only be afforded by increasing burdens on the
"domestic industry" of the others.

If these views be correct, it remains to inquire how far the tariff act
of 1842 is consistent with them. That many of the provisions of that act
are in violation of the cardinal principles here laid down all must
concede. The rates of duty imposed by it on some articles are
prohibitory and on others so high as greatly to diminish importations
and to produce a less amount of revenue than would be derived from lower
rates. They operate as "protection merely" to one branch of "domestic
industry" by taxing other branches.

By the introduction of minimums, or assumed and false values, and by the
imposition of specific duties the injustice and inequality of the act of
1842 in its practical operations on different classes and pursuits are
seen and felt. Many of the oppressive duties imposed by it under the
operation of these principles range from 1 per cent to more than 200 per
cent. They are prohibitory on some articles and partially so on others,
and bear most heavily on articles of common necessity and but lightly on
articles of luxury. It is so framed that much the greatest burden which
it imposes is thrown on labor and the poorer classes, who are least able
to bear it, while it protects capital and exempts the rich from paying
their just proportion of the taxation required for the support of
Government. While it protects the capital of the wealthy manufacturer
and increases his profits, it does not benefit the operatives or
laborers in his employment, whose wages have not been increased by it.
Articles of prime necessity or of coarse quality and low price, used by
the masses of the people, are in many instances subjected by it to heavy
taxes, while articles of finer quality and higher price, or of luxury,
which can be used only by the opulent, are lightly taxed. It imposes
heavy and unjust burdens on the farmer, the planter, the commercial man,
and those of all other pursuits except the capitalist who has made his
investments in manufactures. All the great interests of the country are
not as nearly as may be practicable equally protected by it.

The Government in theory knows no distinction of persons or classes, and
should not bestow upon some favors and privileges which all others may
not enjoy. It was the purpose of its illustrious founders to base the
institutions which they reared upon the great and unchanging principles
of justice and equity, conscious that if administered in the spirit in
which they were conceived they would be felt only by the benefits which
they diffused, and would secure for themselves a defense in the hearts
of the people more powerful than standing armies and all the means and
appliances invented to sustain governments founded in injustice and
oppression.

The well-known fact that the tariff act of 1842 was passed by a majority
of one vote in the Senate and two in the House of Representatives, and
that some of those who felt themselves constrained, under the peculiar
circumstances existing at the time, to vote in its favor, proclaimed its
defects and expressed their determination to aid in its modification on
the first opportunity, affords strong and conclusive evidence that it
was not intended to be permanent, and of the expediency and necessity of
its thorough revision.

In recommending to Congress a reduction of the present rates of duty and
a revision and modification of the act of 1842, I am far from
entertaining opinions unfriendly to the manufacturers. On the contrary,
I desire to see them prosperous as far as they can be so without
imposing unequal burdens on other interests. The advantage under any
system of indirect taxation, even within the revenue standard, must be
in favor of the manufacturing interest, and of this no other interest
will complain.

I recommend to Congress the abolition of the minimum principle, or
assumed, arbitrary, and false values, and of specific duties, and the
substitution in their place of ad valorem duties as the fairest and most
equitable indirect tax which can be imposed. By the ad valorem principle
all articles are taxed according to their cost or value, and those which
are of inferior quality or of small cost bear only the just proportion
of the tax with those which are of superior quality or greater cost. The
articles consumed by all are taxed at the same rate. A system of ad
valorem revenue duties, with proper discriminations and proper guards
against frauds in collecting them, it is not doubted will afford ample
incidental advantages to the manufacturers and enable them to derive as
great profits as can be derived from any other regular business. It is
believed that such a system strictly within the revenue standard will
place the manufacturing interests on a stable footing and inure to their
permanent advantage, while it will as nearly as may be practicable
extend to all the great interests of the country the incidental
protection which can be afforded by our revenue laws. Such a system,
when once firmly established, would be permanent, and not be subject to
the constant complaints, agitations, and changes which must ever occur
when duties are not laid for revenue, but for the "protection merely" of
a favored interest.

In the deliberations of Congress on this subject it is hoped that a
spirit of mutual concession and compromise between conflicting interests
may prevail, and that the result of their labors may be crowned with the
happiest consequences.

By the Constitution of the United States it is provided that "no money
shall be drawn from the Treasury but in consequence of appropriations
made by law." A public treasury was undoubtedly contemplated and
intended to be created, in which the public money should be kept from
the period of collection until needed for public uses. In the collection
and disbursement of the public money no agencies have ever been employed
by law except such as were appointed by the Government, directly
responsible to it and under its control. The safe-keeping of the public
money should be confided to a public treasury created by law and under
like responsibility and control. It is not to be imagined that the
framers of the Constitution could have intended that a treasury should
be created as a place of deposit and safe-keeping of the public money
which was irresponsible to the Government. The first Congress under the
Constitution, by the act of the 2d of September, 1789, "to establish the
Treasury Department," provided for the appointment of a Treasurer, and
made it his duty "to receive and keep the moneys of the United States"
and "at all times to submit to the Secretary of the Treasury and the
Comptroller, or either of them, the inspection of the moneys in his
hands."

That banks, national or State, could not have been intended to be used
as a substitute for the Treasury spoken of in the Constitution as
keepers of the public money is manifest from the fact that at that time
there was no national bank, and but three or four State banks, of
limited Capital, existed in the country. Their employment as
depositories was at first resorted to to a limited extent, but with no
avowed intention of continuing them permanently in place of the Treasury
of the Constitution. When they were afterwards from time to time
employed, it was from motives of supposed convenience. Our experience
has shown that when banking corporations have been the keepers of the
public money, and been thereby made in effect the Treasury, the
Government can have no guaranty that it can command the use of its own
money for public purposes. The late Bank of the United States proved to
be faithless. The State banks which were afterwards employed were
faithless. But a few years ago, with millions of public money in their
keeping, the Government was brought almost to bankruptcy and the public
credit seriously impaired because of their inability or indisposition to
pay on demand to the public creditors in the only currency recognized by
the Constitution. Their failure occurred in a period of peace, and great
inconvenience and loss were suffered by the public from it. Had the
country been involved in a foreign war, that inconvenience and loss
would have been much greater, and might have resulted in extreme public
calamity. The public money should not be mingled with the private funds
of banks or individuals or be used for private purposes. When it is
placed in banks for safe-keeping, it is in effect loaned to them without
interest, and is loaned by them upon interest to the borrowers from
them. The public money is converted into banking capital, and is used
and loaned out for the private profit of bank stockholders, and when
called for, as was the case in 1837, it may be in the pockets of the
borrowers from the banks instead of being in the public Treasury
contemplated by the Constitution. The framers of the Constitution could
never have intended that the money paid into the Treasury should be thus
converted to private use and placed beyond the control of the
Government.

Banks which hold the public money are often tempted by a desire of gain
to extend their loans, increase their circulation, and thus stimulate,
if not produce, a spirit of speculation and extravagance which sooner or
later must result in ruin to thousands. If the public money be not
permitted to be thus used, but be kept in the Treasure and paid out to
the public creditors in gold and silver, the temptation afforded by its
deposit with banks to an undue expansion of their business would be
checked, while the amount of the constitutional currency left in
circulation would be enlarged by its employment in the public
collections and disbursements, and the banks themselves would in
consequence be found in a safer and sounder condition. At present State
banks are employed as depositories, but without adequate regulation of
law whereby the public money can be secured against the casualties and
excesses, revulsions, suspensions, and defalcations to which from
overissues, overtrading, an inordinate desire for gain, or other causes
they are constantly exposed. The Secretary of the Treasury has in all
cases when it was practicable taken collateral security for the amount
which they hold, by the pledge of stocks of the United States or such of
the States as were in good credit. Some of the deposit banks have given
this description of security and others have declined to do so.

Entertaining the opinion that "the separation of the moneys of the
Government from banking institutions is indispensable for the safety of
the funds of the Government and the rights of the people," I recommend
to Congress that provision be made by law for such separation, and that
a constitutional treasury be created for the safe-keeping of the public
money. The constitutional treasury recommended is designed as a secure
depository for the public money, without any power to make loans or
discounts or to issue any paper whatever as a currency or circulation. I
can not doubt that such a treasury as was contemplated by the
Constitution should be independent of all banking corporations. The
money of the people should be kept in the Treasury of the people created
by law, and be in the custody of agents of the people chosen by
themselves according to the forms of the Constitution--agents who are
directly responsible to the Government, who are under adequate bonds and
oaths, and who are subject to severe punishments for any embezzlement,
private use, or misapplication of the public funds, and for any failure
in other respects to perform their duties. To say that the people or
their Government are incompetent or not to be trusted with the custody
of their own money in their own Treasury, provided by themselves, but
must rely on the presidents, cashiers, and stockholders of banking
corporations, not appointed by them nor responsible to them, would be to
concede that they are incompetent for self-government.

In recommending the establishment of a constitutional treasury in which
the public money shall be kept, I desire that adequate provision be made
by law for its safety and that all Executive discretion or control over
it shall be removed, except such as may be necessary in directing its
disbursement in pursuance of appropriations made by law.

Under our present land system, limiting the minimum price at which the
public lands can be entered to $1.25 per acre, large quantities of lands
of inferior quality remain unsold because they will not command that
price. From the records of the General Land Office it appears that of
the public lands remaining unsold in the several States and Territories
in which they are situated, 39,105,577 acres have been in the market
subject to entry more than twenty years, 49,638,644 acres for more than
fifteen years, 73,074,600 acres for more than ten years, and 106,176,961
acres for more than five years. Much the largest portion of these lands
will continue to be unsalable at the minimum price at which they are
permitted to be sold so long as large territories of lands from which
the more valuable portions have not been selected are annually brought
into market by the Government. With the view to the sale and settlement
of these inferior lands, I recommend that the price be graduated and
reduced below the present minimum rate, confining the sales at the
reduced prices to settlers and cultivators, in limited quantities. If
graduated and reduced in price for a limited term to $1 per acre, and
after the expiration of that period for a second and third term to lower
rates, a large portion of these lands would be purchased, and many
worthy citizens who are unable to pay higher rates could purchase homes
for themselves and their families. By adopting the policy of graduation
and reduction of price these inferior lands will be sold for their real
value, while the States in which they lie will be freed from the
inconvenience, if not injustice, to which they are subjected in
consequence of the United States continuing to own large quantities of
the public lands within their borders not liable to taxation for the
support of their local governments.

I recommend the continuance of the policy of granting preemptions in its
most liberal extent to all those who have settled or may hereafter
settle on the public lands, whether surveyed or unsurveyed, to which the
Indian title may have been extinguished at the time of settlement. It
has been found by experience that in consequence of combinations of
purchasers and other causes a very small quantity of the public lands,
when sold at public auction, commands a higher price than the minimum
rates established by law. The settlers on the public lands are, however,
but rarely able to secure their homes and improvements at the public
sales at that rate, because these combinations, by means of the capital
they command and their superior ability to purchase, render it
impossible for the settler to compete with them in the market. By
putting down all competition these combinations of capitalists and
speculators are usually enabled to purchase the lands, including the
improvements of the settlers, at the minimum price of the Government,
and either turn them out of their homes or extort from them, according
to their ability to pay, double or quadruple the amount paid for them to
the Government. It is to the enterprise and perseverance of the hardy
pioneers of the West, who penetrate the wilderness with their families,
suffer the dangers, the privations, and hardships attending the
settlement of a new country, and prepare the way for the body of
emigrants who in the course of a few years usually follow them, that we
are in a great degree indebted for the rapid extension and
aggrandizement of our country.

Experience has proved that no portion of our population are more
patriotic than the hardy and brave men of the frontier, or more ready to
obey the call of their country and to defend her rights and her honor
whenever and by whatever enemy assailed. They should be protected from
the grasping speculator and secured, at the minimum price of the public
lands, in the humble homes which they have improved by their labor. With
this end in view, all vexatious or unnecessary restrictions imposed upon
them by the existing preemption laws should be repealed or modified. It
is the true policy of the Government to afford facilities to its
citizens to become the owners of small portions of our vast public
domain at low and moderate rates.

The present system of managing the mineral lands of the United States is
believed to be radically defective. More than 1,000,000 acres of the
public lands, supposed to contain lead and other minerals, have been
reserved from sale, and numerous leases upon them have been granted to
individuals upon a stipulated rent. The system of granting leases has
proved to be not only unprofitable to the Government, but unsatisfactory
to the citizens who have gone upon the lands, and must, if continued,
lay the foundation of much future difficulty between the Government and
the lessees. According to the official records, the amount of rents
received by the Government for the years 1841, 1842, 1843, and 1844 was
$6,354.74, while the expenses of the system during the same period,
including salaries of superintendents, agents, clerks, and incidental
expenses, were $26,111.11, the income being less than one-fourth of the
expenses. To this pecuniary loss may be added the injury sustained by
the public in consequence of the destruction of timber and the careless
and wasteful manner of working the mines. The system has given rise to
much litigation between the United States and individual citizens,
producing irritation and excitement in the mineral region, and involving
the Government in heavy additional expenditures. It is believed that
similar losses and embarrassments will continue to occur while the
present System of leasing these lands remains unchanged. These lands are
now under the superintendence and care of the War Department, with the
ordinary duties of which they have no proper or natural connection. I
recommend the repeal of the present system, and that these lands be
placed under the superintendence and management of the General Land
Office, as other public lands, and be brought into market and sold upon
such terms as Congress in their wisdom may prescribe, reserving to the
Government an equitable percentage of the gross amount of mineral
product, and that the preemption principle be extended to resident
miners and settlers upon them at the minimum price which may be
established by Congress.

I refer you to the accompanying report of the Secretary of War for
information respecting the present situation of the Army and its
operations during the past year, the state of our defenses, the
condition of the public works, and our relations with the various Indian
tribes within our limits or upon our borders. I invite your attention to
the suggestions contained in that report in relation to these prominent
objects of national interest. When orders were given during the past
summer for concentrating a military force on the western frontier of
Texas, our troops were widely dispersed and in small detachments,
occupying posts remote from each other. The prompt and expeditious
manner in which an army embracing more than half our peace establishment
was drawn together on an emergency so sudden reflects great credit on
the officers who were intrusted with the execution of these orders, as
well as upon the discipline of the Army itself. To be in strength to
protect and defend the people and territory of Texas in the event Mexico
should commence hostilities or invade her territories with a large army,
which she threatened, I authorized the general assigned to the command
of the army of occupation to make requisitions for additional forces
from several of the States nearest the Texan territory, and which could
most expeditiously furnish them, if in his opinion a larger force than
that under his command and the auxiliary aid which under like
circumstances he was authorized to receive from Texas should be
required. The contingency upon which the exercise of this authority
depended has not occurred. The circumstances under which two companies
of State artillery from the city of New Orleans were sent into Texas and
mustered into the service of the United States are fully stated in the
report of the Secretary of War. I recommend to Congress that provision
be made for the payment of these troops, as well as a small number of
Texan volunteers whom the commanding general thought it necessary to
receive or muster into our service.

During the last summer the First Regiment of Dragoons made extensive
excursions through the Indian country on our borders, a part of them
advancing nearly to the possessions of the Hudsons Bay Company in the
north, and a part as far as the South Pass of the Rocky Mountains and
the head waters of the tributary streams of the Colorado of the West.
The exhibition of this military force among the Indian tribes in those
distant regions and the councils held with them by the commanders of the
expeditions, it is believed, will have a salutary influence in
restraining them from hostilities among themselves and maintaining
friendly relations between them and the United States. An interesting
account of one of these excursions accompanies the report of the
Secretary of War. Under the directions of the War Department Brevet
Captain Fremont, of the Corps of Topographical Engineers, has been
employed since 1842 in exploring the country west of the Mississippi and
beyond the Rocky Mountains. Two expeditions have already been brought to
a close, and the reports of that scientific and enterprising officer
have furnished much interesting and valuable information. He is now
engaged in a third expedition, but it is not expected that this arduous
service will be completed in season to enable me to communicate the
result to Congress at the present session.

Our relations with the Indian tribes are of a favorable character. The
policy of removing them to a country designed for their permanent
residence west of the Mississippi, and without the limits of the
organized States and Territories, is better appreciated by them than it
was a few years ago, while education is now attended to and the habits
of civilized life are gaining ground among them.

Serious difficulties of long standing continue to distract the several
parties into which the Cherokees are unhappily divided. The efforts of
the Government to adjust the difficulties between them have heretofore
proved unsuccessful, and there remains no probability that this
desirable object can be accomplished without the aid of further
legislation by Congress. I will at an early period of your session
present the subject for your consideration, accompanied with an
exposition of the complaints and claims of the several parties into
which the nation is divided, with a view to the adoption of such
measures by Congress as may enable the Executive to do justice to them,
respectively, and to put an end, if possible, to the dissensions which
have long prevailed and still prevail among them.

I refer you to the report of the Secretary of the Navy for the present
condition of that branch of the national defense and for grave
suggestions having for their object the increase of its efficiency and a
greater economy in its management. During the past year the officers and
men have performed their duty in a satisfactory manner. The orders which
have been given have been executed with promptness and fidelity. A
larger force than has often formed one squadron under our flag was
readily concentrated in the Gulf of Mexico, and apparently without
unusual effort. It is especially to be observed that notwithstanding the
union of so considerable a force, no act was committed that even the
jealousy of an irritated power could construe as an act of aggression,
and that the commander of the squadron and his officers, in strict
conformity with their instructions, holding themselves ever ready for
the most active duty, have achieved the still purer glory of
contributing to the preservation of peace. It is believed that at all
our foreign stations the honor of our flag has been maintained and that
generally our ships of war have been distinguished for their good
discipline and order. I am happy to add that the display of maritime
force which was required by the events of the summer has been made
wholly within the usual appropriations for the service of the year, so
that no additional appropriations are required.

The commerce of the United States, and with it the navigating interests,
have steadily and rapidly increased since the organization of our
Government, until, it is believed, we are now second to but one power in
the world, and at no distant day we shall probably be inferior to none.
Exposed as they must be, it has been a wise policy to afford to these
important interests protection with our ships of war distributed in the
great highways of trade throughout the world. For more than thirty years
appropriations have been made and annually expended for the gradual
increase of our naval forces. In peace our Navy performs the important
duty of protecting our commerce, and in the event of war will be, as it
has been, a most efficient means of defense.

The successful use of steam navigation on the ocean has been followed by
the introduction of war steamers in great and increasing numbers into
the navies of the principal maritime powers of the world. A due regard
to our own safety and to an efficient protection to our large and
increasing commerce demands a corresponding increase on our part. No
country has greater facilities for the construction of vessels of this
description than ours, or can promise itself greater advantages from
their employment. They are admirably adapted to the protection of our
commerce, to the rapid transmission of intelligence, and to the coast
defense. In pursuance of the wise policy of a gradual increase of our
Navy, large supplies of live-oak timber and other materials for
shipbuilding have been collected and are now under shelter and in a
state of good preservation, while iron steamers can be built with great
facility in various parts of the Union. The use of iron as a material,
especially in the construction of steamers which can enter with safety
many of the harbors along our coast now inaccessible to vessels of
greater draft, and the practicability of constructing them in the
interior, strongly recommend that liberal appropriations should be made
for this important object. Whatever may have been our policy in the
earlier stages of the Government, when the nation was in its infancy,
our shipping interests and commerce comparatively small, our resources
limited, our population sparse and scarcely extending beyond the limits
of the original thirteen States, that policy must be essentially
different now that we have grown from three to more than twenty millions
of people, that our commerce, carried in our own ships, is found in
every sea, and that our territorial boundaries and settlements have been
so greatly expanded. Neither our commerce nor our long line of coast on
the ocean and on the Lakes can be successfully defended against foreign
aggression by means of fortifications alone. These are essential at
important commercial and military points, but our chief reliance for
this object must be on a well-organized, efficient navy. The benefits
resulting from such a navy are not confined to the Atlantic States. The
productions of the interior which seek a market abroad are directly
dependent on the safety and freedom of our commerce. The occupation of
the Balize below New Orleans by a hostile force would embarrass, if not
stagnate, the whole export trade of the Mississippi and affect the value
of the agricultural products of the entire valley of that mighty river
and its tributaries.

It has never been our policy to maintain large standing armies in time
of peace. They are contrary to the genius of our free institutions,
would impose heavy burdens on the people and be dangerous to public
liberty. Our reliance for protection and defense on the land must be
mainly on our citizen soldiers, who will be ever ready, as they ever
have been ready in times past, to rush with alacrity, at the call of
their country, to her defense. This description of force, however, can
not defend our coast, harbors, and inland seas, nor protect our commerce
on the ocean or the Lakes. These must be protected by our Navy.

Considering an increased naval force, and especially of steam vessels,
corresponding with our growth and importance as a nation, and
proportioned to the increased and increasing naval power of other
nations, of vast importance as regards our safety, and the great and
growing interests to be protected by it, I recommend the subject to the
favorable consideration of Congress.

The report of the Postmaster-General herewith communicated contains a
detailed statement of the operations of his Department during the pass
year. It will be seen that the income from postages will fall short of
the expenditures for the year between $1,000,000 and $2,000,000. This
deficiency has been caused by the reduction of the rates of postage,
which was made by the act of the 3d of March last. No principle has been
more generally acquiesced in by the people than that this Department
should sustain itself by limiting its expenditures to its income.
Congress has never sought to make it a source of revenue for general
purposes except for a short period during the last war with Great
Britain, nor should it ever become a charge on the general Treasury. If
Congress shall adhere to this principle, as I think they ought, it will
be necessary either to curtail the present mail service so as to reduce
the expenditures, or so to modify the act of the 3d of March last as to
improve its revenues. The extension of the mail service and the
additional facilities which will be demanded by the rapid extension and
increase of population on our western frontier will not admit of such
curtailment as will materially reduce the present expenditures. In the
adjustment of the tariff of postages the interests of the people demand
that the lowest rates be adopted which will produce the necessary
revenue to meet the expenditures of the Department. I invite the
attention of Congress to the suggestions of the Postmaster-General on
this subject, under the belief that such a modification of the late law
may be made as will yield sufficient revenue without further calls on
the Treasury, and with very little change in the present rates of
postage. Proper measures have been taken in pursuance of the act of the
3d of March last for the establishment of lines of mail steamers between
this and foreign countries. The importance of this service commends
itself strongly to favorable consideration.

With the growth of our country the public business which devolves on the
heads of the several Executive Departments has greatly increased. In
some respects the distribution of duties among them seems to be
incongruous, and many of these might be transferred from one to another
with advantage to the public interests. A more auspicious time for the
consideration of this subject by Congress, with a view to system in the
organization of the several Departments and a more appropriate division
of the public business, will not probably occur.

The most important duties of the State Department relate to our foreign
affairs. By the great enlargement of the family of nations, the increase
of our commerce, and the corresponding extension of our consular system
the business of this Department has been greatly increased. In its
present organization many duties of a domestic nature and consisting of
details are devolved on the Secretary of State, which do not
appropriately belong to the foreign department of the Government and may
properly be transferred to some other Department. One of these grows out
of the present state of the law concerning the Patent Office, which a
few years since was a subordinate clerkship, but has become a distinct
bureau of great importance. With an excellent internal organization, it
is still connected with the State Department. In the transaction of its
business questions of much importance to inventors and to the community
frequently arise, which by existing laws are referred for decision to a
board of which the Secretary of State is a member. These questions are
legal, and the connection which now exists between the State Department
and the Patent Office may with great propriety and advantage be
transferred to the Attorney-General.

In his last annual message to Congress Mr. Madison invited attention to
a proper provision for the Attorney-General as "an important improvement
in the executive establishment." This recommendation was repeated by
some of his successors. The official duties of the Attorney-General have
been much increased within a few years, and his office has become one of
great importance. His duties may be still further increased with
advantage to the public interests. As an executive officer his residence
and constant attention at the seat of Government are required. Legal
questions involving important principles and large amounts of public
money are constantly referred to him by the President and Executive
Departments for his examination and decision. The public business under
his official management before the judiciary has been so augmented by
the extension of our territory and the acts of Congress authorizing
suits against the United States for large bodies of valuable public
lands as greatly to increase his labors and responsibilities. I
therefore recommend that the Attorney-General be placed on the same
footing with the heads of the other Executive Departments, with such
subordinate officers provided by law for his Department as may be
required to discharge the additional duties which have been or may be
devolved upon him.

Congress possess the power of exclusive legislation over the District of
Columbia, and I commend the interests of its inhabitants to your
favorable consideration. The people of this District have no legislative
body of their own, and must confide their local as well as their general
interests to representatives in whose election they have no voice and
over whose official conduct they have no control. Each member of the
National Legislature should consider himself as their immediate
representative, and should be the more ready to give attention to their
interests and wants because he is not responsible to them. I recommend
that a liberal and generous spirit may characterize your measures in
relation to them. I shall be ever disposed to show a proper regard for
their wishes and, within constitutional limits, shall at all times
cheerfully cooperate with you for the advancement of their welfare.

I trust it may not be deemed inappropriate to the occasion for me to
dwell for a moment on the memory of the most eminent citizen of our
country who during the summer that is gone by has descended to the tomb.
The enjoyment of contemplating, at the advanced age of near fourscore
years, the happy condition of his country cheered the last hours of
Andrew Jackson, who departed this life in the tranquil hope of a blessed
immortality. His death was happy, as his life had been eminently useful.
He had an unfaltering confidence in the virtue and capacity of the
people and in the permanence of that free Government which he had
largely contributed to establish and defend. His great deeds had secured
to him the affections of his fellow-citizens, and it was his happiness
to witness the growth and glory of his country, which he loved so well.
He departed amidst the benedictions of millions of free-men. The nation
paid its tribute to his memory at his tomb. Coming generations will
learn from his example the love of country and the rights of man. In his
language on a similar occasion to the present, "I now commend you,
fellow-citizens, to the guidance of Almighty God, with a full reliance
on His merciful providence for the maintenance of our free institutions,
and with an earnest supplication that whatever errors it may be my lot
to commit in discharging the arduous duties which have devolved on me
will find a remedy in the harmony and wisdom of your counsels."

JAMES K. POLK

***

State of the Union Address
James Polk
December 8, 1846

Fellow-Citizens of the Senate and of the House of Representatives:

In resuming your labors in the service of the people it is a subject of
congratulation that there has been no period in our past history when
all the elements of national prosperity have been so fully developed.
Since your last session no afflicting dispensation has visited our
country. General good health has prevailed, abundance has crowned the
toil of the husbandman, and labor in all its branches is receiving an
ample reward, while education, science, and the arts are rapidly
enlarging the means of social happiness. The progress of our country in
her career of greatness, not only in the vast extension of our
territorial limits and the rapid increase of our population, but in
resources and wealth and in the happy condition of our people, is
without an example in the history of nations.

As the wisdom, strength, and beneficence of our free institutions are
unfolded, every day adds fresh motives to contentment and fresh
incentives to patriotism.

Our devout and sincere acknowledgments are due to the gracious Giver of
All Good for the numberless blessings which our beloved country enjoys.

It is a source of high satisfaction to know that the relations of the
United States with all other nations, with a single exception, are of
the most amicable character. Sincerely attached to the policy of peace
early adopted and steadily pursued by this Government, I have anxiously
desired to cultivate and cherish friendship and commerce with every
foreign power. The spirit and habits of the American people are
favorable to the maintenance of such international harmony. In adhering
to this wise policy, a preliminary and paramount duty obviously consists
in the protection of our national interests from encroachment or
sacrifice and our national honor from reproach. These must be maintained
at any hazard. They admit of no compromise or neglect, and must be
scrupulously and constantly guarded. In their vigilant vindication
collision and conflict with foreign powers may sometimes become
unavoidable. Such has been our scrupulous adherence to the dictates of
justice in all our foreign intercourse that, though steadily and rapidly
advancing in prosperity and power, we have given no just cause of
complaint to any nation and have enjoyed the blessings of peace for more
than thirty years. From a policy so sacred to humanity and so salutary
in its effects upon our political system we should never be induced
voluntarily to depart.

The existing war with Mexico was neither desired nor provoked by the
United States. On the contrary, all honorable means were resorted to to
avert it. After years of endurance of aggravated and unredressed wrongs
on our part, Mexico, in violation of solemn treaty stipulations and of
every principle of justice recognized by civilized nations, commenced
hostilities, and thus by her own act forced the war upon us. Long before
the advance of our Army to the left bank of the Rio Grande we had ample
cause of war against Mexico, and had the United States resorted to this
extremity we might have appealed to the whole civilized world for the
justice of our cause. I deem it to be my duty to present to you on the
present occasion a condensed review of the injuries we had sustained, of
the causes which led to the war, and of its progress since its
commencement. This is rendered the more necessary because of the
misapprehensions which have to some extent prevailed as to its origin
and true character. The war has been represented as unjust and
unnecessary and as one of aggression on our part upon a weak and injured
enemy. Such erroneous views, though entertained by but few, have been
widely and extensively circulated, not only at home, but have been
spread throughout Mexico and the whole world. A more effectual means
could not have been devised to encourage the enemy and protract the war
than to advocate and adhere to their cause, and thus give them "aid and
comfort." It is a source of national pride and exultation that the great
body of our people have thrown no such obstacles in the way of the
Government in prosecuting the war successfully, but have shown
themselves to be eminently patriotic and ready to vindicate their
country's honor and interests at any sacrifice. The alacrity and
promptness with which our volunteer forces rushed to the field on their
country's call prove not only their patriotism, but their deep
conviction that our cause is just.

The wrongs which we have suffered from Mexico almost ever since she
became an independent power and the patient endurance with which we have
borne them are without a parallel in the history of modern civilized
nations. There is reason to believe that if these wrongs had been
resented and resisted in the first instance the present war might have
been avoided. One outrage, however, permitted to pass with impunity
almost necessarily encouraged the perpetration of another, until at last
Mexico seemed to attribute to weakness and indecision on our part a
forbearance which was the offspring of magnanimity and of a sincere
desire to preserve friendly relations with a sister republic.

Scarcely had Mexico achieved her independence, which the United States
were the first among the nations to acknowledge, when she commenced the
system of insult and spoliation which she has ever since pursued. Our
citizens engaged in lawful commerce were imprisoned, their vessels
seized, and our flag insulted in her ports. If money was wanted, the
lawless seizure and confiscation of our merchant vessels and their
cargoes was a ready resource, and if to accomplish their purposes it
became necessary to imprison the owners, captains, and crews, it was
done. Rulers superseded rulers in Mexico in rapid succession, but still
there was no change in this system of depredation. The Government of the
United States made repeated reclamations on behalf of its citizens, but
these were answered by the perpetration of new outrages. Promises of
redress made by Mexico in the most solemn forms were postponed or
evaded. The files and records of the Department of State contain
conclusive proofs of numerous lawless acts perpetrated upon the property
and persons of our citizens by Mexico, and of wanton insults to our
national flag. The interposition of our Government to obtain redress was
again and again invoked under circumstances which no nation ought to
disregard. It was hoped that these outrages would cease and that Mexico
would be restrained by the laws which regulate the conduct of civilized
nations in their intercourse with each other after the treaty of amity,
commerce, and navigation of the 5th of April, 1831, was concluded
between the two Republics; but this hope soon proved to be vain. The
course of seizure and confiscation of the property of our citizens, the
violation of their persons, and the insults to our flag pursued by
Mexico previous to that time were scarcely suspended for even a brief
period, although the treaty so clearly defines the rights and duties of
the respective parties that it is impossible to misunderstand or mistake
them. In less than seven years after the conclusion of that treaty our
grievances had become so intolerable that in the opinion of President
Jackson they should no longer be endured. In his message to Congress in
February, 1837, he presented them to the consideration of that body, and
declared that--

The length of time since some of the injuries have been committed, the
repeated and unavailing applications for redress, the wanton character
of some of the outrages upon the property and persons of our citizens,
upon the officers and flag of the United States, independent of recent
insults to this Government and people by the late extraordinary Mexican
minister, would justify in the eyes of all nations immediate war.

In a spirit of kindness and forbearance, however, he recommended
reprisals as a milder mode of redress. He declared that war should not
be used as a remedy "by just and generous nations, confiding in their
strength for injuries committed, if it can be honorably avoided," and
added:

It has occurred to me that, considering the present embarrassed
condition of that country, we should act with both wisdom and moderation
by giving to Mexico one more opportunity to atone for the past before we
take redress into our Own hands. To avoid all misconception on the part
of Mexico, as well as to protect our own national character from
reproach, this opportunity should be given with the avowed design and
full preparation to take immediate satisfaction if it should not be
obtained on a repetition of the demand for it. To this end I recommend
that an act be passed authorizing reprisals, and the use of the naval
force of the United States by the Executive against Mexico to enforce
them, in the event of a refusal by the Mexican Government to come to an
amicable adjustment of the matters in controversy between us upon
another demand thereof made from on board out of our vessels of war on
the coast of Mexico.

Committees of both Houses of Congress, to which this message of the
President was referred, fully sustained his views of the character of
the wrongs which we had suffered from Mexico, and recommended that
another demand for redress should be made before authorizing war or
reprisals. The Committee on Foreign Relations of the Senate, in their
report, say:

After such a demand, should prompt justice be refused by the Mexican
Government, we may appeal to all nations, not only for the equity and
moderation with which we shall have acted toward a sister republic, but
for the necessity which will then compel us to seek redress for our
wrongs, either by actual war or by reprisals. The subject will then be
presented before Congress, at the commencement of the next session, in a
clear and distinct form, and the committee can not doubt but that such
measures will be immediately adopted as may be necessary to vindicate
the honor of the country and insure ample reparation to our injured
fellow-citizens.

The Committee on Foreign Affairs of the House of Representatives made a
similar recommendation. In their report they say that--

They fully concur with the President that ample cause exists for taking
redress into our own hands, and believe that we should be justified in
the opinion of other nations for taking such a step. But they are
willing to try the experiment of another demand, made in the most solemn
form, upon the justice of the Mexican Government before any further
proceedings are adopted.

No difference of opinion upon the subject is believed to have existed in
Congress at that time; the executive and legislative departments
concurred; and yet such has been our forbearance and desire to preserve
peace with Mexico that the wrongs of which we then complained, and which
gave rise to these solemn proceedings, not only remain unredressed to
this day, but additional causes of complaint of an aggravated character
have ever since been accumulating. Shortly after these proceedings a
special messenger was dispatched to Mexico to make a final demand for
redress, and on the 20th of July, 1837, the demand was made. The reply
of the Mexican Government bears date on the 29th of the same month, and
contains assurances of the "anxious wish" of the Mexican Government "not
to delay the moment of that final and equitable adjustment which is to
terminate the existing difficulties between the two Governments;" that
"nothing should be left undone which may contribute to the most speedy
and equitable determination of the subjects which have so seriously
engaged the attention of the American Government;" that the "Mexican
Government would adopt as the only guides for its conduct the plainest
principles of public right, the sacred obligations imposed by
international law, and the religious faith of treaties," and that
"whatever reason and justice may dictate respecting each case will be
done." The assurance was further given that the decision of the Mexican
Government upon each cause of complaint for which redress had been
demanded should be communicated to the Government of the United States
by the Mexican minister at Washington.

These solemn assurances in answer to our demand for redress were
disregarded. By making them, however, Mexico obtained further delay.
President Van Buren, in his annual message to Congress of the 5th of
December, 1837, states that "although the larger number" of our demands
for redress, "and many of them aggravated cases of personal wrongs, have
been now for years before the Mexican Government, and some of the causes
of national complaint, and those of the most offensive character,
admitted of immediate, simple, and satisfactory replies, it is only
within a few days past that any specific communication in answer to our
last demand, made five months ago, has been received from the Mexican
minister;" and that "for not one of our public complaints has
satisfaction been given or offered, that but one of the cases of
personal wrong has been favorably considered, and that but four cases of
both descriptions out of all those formally presented and earnestly
pressed have as yet been decided upon by the Mexican Government."
President Van Buren, believing that it would be vain to make any further
attempt to obtain redress by the ordinary means within the power of the
Executive, communicated this opinion to Congress in the message referred
to, in which he said:

On a careful and deliberate examination of their contents of the
correspondence with the Mexican Government, and considering the spirit
manifested by the Mexican Government, it has become my painful duty to
return the subject as it now stands to Congress, to whom it belongs to
decide upon the time, the mode, and the measure of redress.

Had the United States at that time adopted compulsory measures and taken
redress into their own hands, all our difficulties with Mexico would
probably have been long since adjusted and the existing war have been
averted. Magnanimity and moderation on our part only had the effect to
complicate these difficulties and render an amicable settlement of them
the more embarrassing. That such measures of redress under similar
provocations committed by any of the powerful nations of Europe would
have been promptly resorted to by the United States can not be doubted.
The national honor and the preservation of the national character
throughout the world, as well as our own self-respect and the protection
due to our own citizens, would have rendered such a resort
indispensable. The history of no civilized nation in modern times has
presented within so brief a period so many wanton attacks upon the honor
of its flag and upon the property and persons of its citizens as had at
that time been borne by the United States from the Mexican authorities
and people. But Mexico was a sister republic on the North American
continent, occupying a territory contiguous to our own, and was in a
feeble and distracted condition, and these considerations, it is
presumed, induced Congress to forbear still longer.

Instead of taking redress into our own hands, a new negotiation was
entered upon with fair promises on the part of Mexico, but with the real
purpose, as the event has proved, of indefinitely postponing the
reparation which we demanded, and which was so justly due. This
negotiation, after more than a year's delay, resulted in the convention
of the 11th of April, 1839, "for the adjustment of claims of citizens of
the United States of America upon the Government of the Mexican
Republic." The joint board of commissioners created by this convention
to examine and decide upon these claims was not organized until the
month of August, 1840, and under the terms of the convention they were
to terminate their duties within eighteen months from that time. Four of
the eighteen months were consumed in preliminary discussions on
frivolous and dilatory points raised by the Mexican commissioners, and
it was not until the month of December, 1840, that they commenced the
examination of the claims of our citizens upon Mexico. Fourteen months
only remained to examine and decide upon these numerous and complicated
cases. In the month of February, 1842, the term of the commission
expired, leaving many claims undisposed of for want of time. The claims
which were allowed by the board and by the umpire authorized by the
convention to decide in case of disagreement between the Mexican and
American commissioners amounted to $2,026,139.68. There were pending
before the umpire when the commission expired additional claims, which
had been examined and awarded by the American commissioners and had not
been allowed by the Mexican commissioners, amounting to $928,627.88,
upon which he did not decide, alleging that his authority had ceased
with the termination of the joint commission. Besides these claims,
there were others of American citizens amounting to $3,336,837.05, which
had been submitted to the board, and upon which they had not time to
decide before their final adjournment.

The sum of $2,026,139.68, which had been awarded to the claimants, was a
liquidated and ascertained debt due by Mexico, about which there could
be no dispute, and which she was bound to pay according to the terms of
the convention. Soon after the final awards for this amount had been
made the Mexican Government asked for a postponement of the time of
making payment, alleging that it would be inconvenient to make the
payment at the time stipulated. In the spirit of forbearing kindness
toward a sister republic, which Mexico has so long abused, the United
States promptly complied with her request. A second convention was
accordingly concluded between the two Governments on the 30th of
January, 1843, which upon its face declares that "this new arrangement
is entered into for the accommodation of Mexico." By the terms of this
convention all the interest due on the awards which had been made in
favor of the claimants under the convention of the 11th of April, 1839,
was to be paid to them on the 30th of April, 1843, and "the principal of
the said awards and the interest accruing thereon" was stipulated to "be
paid in five years, in equal installments every three months."
Notwithstanding this new convention was entered into at the request of
Mexico and for the purpose of relieving her from embarrassment, the
claimants have only received the interest due on the 30th of April,
1843, and three of the twenty installments. Although the payment of the
sum thus liquidated and confessedly due by Mexico to our citizens as
indemnity for acknowledged acts of outrage and wrong was secured by
treaty, the obligations of which are ever held sacred by all just
nations, yet Mexico has violated this solemn engagement by failing and
refusing to make the payment. The two installments due in April and
July, 1844, under the peculiar circumstances connected with them, have
been assumed by the United States and discharged to the claimants, but
they are still due by Mexico. But this is not all of which we have just
cause of complaint. To provide a remedy for the claimants whose cases
were not decided by the joint commission under the convention of April
11, 1839, it was expressly stipulated by the sixth article of the
convention of the 30th of January, 1843, that--

A new convention shall be entered into for the settlement of all claims
of the Government and citizens of the United States against the Republic
of Mexico which were not finally decided by the late commission which
met in the city of Washington, and of all claims of the Government and
citizens of Mexico against the United States.

In conformity with this stipulation, a third convention was concluded
and signed at the city of Mexico on the 20th of November, 1843, by the
plenipotentiaries of the two Governments, by which provision was made
for ascertaining and paying these claims. In January, 1844, this
convention was ratified by the Senate of the United States with two
amendments, which were manifestly reasonable in their character. Upon a
reference of the amendments proposed to the Government of Mexico, the
same evasions, difficulties, and delays were interposed which have so
long marked the policy of that Government toward the United States. It
has not even yet decided whether it would or would not accede to them,
although the subject has been repeatedly pressed upon its consideration.
Mexico has thus violated a second time the faith of treaties by failing
or refusing to carry into effect the sixth article of the convention of
January, 1843.

Such is the history of the wrongs which we have suffered and patiently
endured from Mexico through a long series of years. So far from
affording reasonable satisfaction for the injuries and insults we had
borne, a great aggravation of them consists in the fact that while the
United States, anxious to preserve a good understanding with Mexico,
have been constantly but vainly employed in seeking redress for past
wrongs, new outrages were constantly occurring, which have continued to
increase our causes of complaint and to swell the amount of our demands.
While the citizens of the United States were conducting a lawful
commerce with Mexico under the guaranty of a treaty of "amity, commerce,
and navigation," many of them have suffered all the injuries which would
have resulted from open war. This treaty, instead of affording
protection to our citizens, has been the means of inviting them into the
ports of Mexico that they might be, as they have been in numerous
instances, plundered of their property and deprived of their personal
liberty if they dared insist on their rights. Had the unlawful seizures
of American property and the violation of the personal liberty of our
citizens, to say nothing of the insults to our flag, which have occurred
in the ports of Mexico taken place on the high seas, they would
themselves long since have constituted a state of actual war between the
two countries. In so long suffering Mexico to violate her most solemn
treaty obligations, plunder our citizens of their property, and imprison
their persons without affording them any redress we have failed to
perform one of the first and highest duties which every government owes
to its citizens, and the consequence has been that many of them have
been reduced from a state of affluence to bankruptcy. The proud name of
American citizen, which ought to protect all who bear it from insult and
injury throughout the world, has afforded no such protection to our
citizens in Mexico. We had ample cause of war against Mexico long before
the breaking out of hostilities; but even then we forbore to take
redress into our own hands until Mexico herself became the aggressor by
invading our soil in hostile array and shedding the blood of our
citizens.

Such are the grave causes of complaint on the part of the United States
against Mexico--causes which existed long before the annexation of Texas
to the American Union; and yet, animated by the love of peace and a
magnanimous moderation, we did not adopt those measures of redress which
under such circumstances are the justified resort of injured nations.

The annexation of Texas to the United States constituted no just cause
of offense to Mexico. The pretext that it did so is wholly inconsistent
and irreconcilable with well-authenticated facts connected with the
revolution by which Texas became independent of Mexico. That this may be
the more manifest, it may be proper to advert to the causes and to the
history of the principal events of that revolution.

Texas constituted a portion of the ancient Province of Louisiana, ceded
to the United States by France in the year 1803. In the year 1819 the
United States, by the Florida treaty, ceded to Spain all that part of
Louisiana within the present limits of Texas, and Mexico, by the
revolution which separated her from Spain and rendered her an
independent nation, succeeded to the rights of the mother country over
this territory. In the year 1824 Mexico established a federal
constitution, under which the Mexican Republic was composed of a number
of sovereign States confederated together in a federal union similar to
our own. Each of these States had its own executive, legislature, and
judiciary, and for all except federal purposes was as independent of the
General Government and that of the other States as is Pennsylvania or
Virginia under our Constitution. Texas and Coahuila united and formed
one of these Mexican States. The State constitution which they adopted,
and which was approved by the Mexican Confederacy, asserted that they
were "free and independent of the other Mexican United States and of
every other power and dominion whatsoever," and proclaimed the great
principle of human liberty that "the sovereignty of the state resides
originally and essentially in the general mass of the individuals who
compose it." To the Government under this constitution, as well as to
that under the federal constitution, the people of Texas owed
allegiance.

Emigrants from foreign countries, including the United States, were
invited by the colonization laws of the State and of the Federal
Government to settle in Texas. Advantageous terms were offered to induce
them to leave their own country and become Mexican citizens. This
invitation was accepted by many of our citizens in the full faith that
in their new home they would be governed by laws enacted by
representatives elected by themselves, and that their lives, liberty,
and property would be protected by constitutional guaranties similar to
those which existed in the Republic they had left. Under a Government
thus organized they continued until the year 1835, when a military
revolution broke out in the City of Mexico which entirely subverted the
federal and State constitutions and placed a military dictator at the
head of the Government. By a sweeping decree of a Congress subservient
to the will of the Dictator the several State constitutions were
abolished and the States themselves converted into mere departments of
the central Government. The people of Texas were unwilling to submit to
this usurpation. Resistance to such tyranny became a high duty. Texas
was fully absolved from all allegiance to the central Government of
Mexico from the moment that Government had abolished her State
constitution and in its place substituted an arbitrary and despotic
central government. Such were the principal causes of the Texan
revolution. The people of Texas at once determined upon resistance and
flew to arms. In the midst of these important and exciting events,
however, they did not omit to place their liberties upon a secure and
permanent foundation. They elected members to a convention, who in the
month of March, 1836, issued a formal declaration that their "political
connection with the Mexican nation has forever ended, and that the
people of Texas do now constitute a free, sovereign, and independent
Republic, and are fully invested with all the rights and attributes
which properly belong to independent nations." They also adopted for
their government a liberal republican constitution. About the same time
Santa Anna, then the Dictator of Mexico, invaded Texas with a numerous
army for the purpose of subduing her people and enforcing obedience to
his arbitrary and despotic Government. On the 21st of April, 1836, he
was met by the Texan citizen soldiers, and on that day was achieved by
them the memorable victory of San Jacinto, by which they conquered their
independence. Considering the numbers engaged on the respective sides,
history does not record a more brilliant achievement. Santa Anna himself
was among the captives.

In the month of May, 1836, Santa Anna acknowledged by a treaty with the
Texan authorities in the most solemn form "the full, entire, and perfect
independence of the Republic of Texas." It is true he was then a
prisoner of war, but it is equally true that he had failed to reconquer
Texas, and had met with signal defeat; that his authority had not been
revoked, and that by virtue of this treaty he obtained his personal
release. By it hostilities were suspended, and the army which had
invaded Texas under his command returned in pursuance of this
arrangement unmolested to Mexico.

From the day that the battle of San Jacinto was fought until the present
hour Mexico has never possessed the power to reconquer Texas. In the
language of the Secretary of State of the United States in a dispatch to
our minister in Mexico under date of the 8th of July, 1842--

Mexico may have chosen to consider, and may still choose to consider,
Texas as having been at all times since 1835, and as still continuing, a
rebellious province; but the world has been obliged to take a very
different view of the matter. From the time of the battle of San
Jacinto, in April, 1836, to the present moment, Texas has exhibited the
same external signs of national independence as Mexico herself, and with
quite as much stability of government. Practically free and independent,
acknowledged as a political sovereignty by the principal powers of the
world, no hostile foot finding rest within her territory for six or
seven years, and Mexico herself refraining for all that period from any
further attempt to reestablish her own authority over that territory, it
can not but be surprising to find Mr. De Bocanegra the secretary of
foreign affairs of Mexico complaining that for that whole period
citizens of the United States or its Government have been favoring the
rebels of Texas and supplying them with vessels, ammunition, and money,
as if the war for the reduction of the Province of Texas had been
constantly prosecuted by Mexico, and her success prevented by these
influences from abroad.

In the same dispatch the Secretary of State affirms that--

Since 1837 the United States have regarded Texas as an independent
sovereignty as much as Mexico, and that trade and commerce with citizens
of a government at war with Mexico can not on that account be regarded
as an intercourse by which assistance and succor are given to Mexican
rebels. The whole current of Mr. De Bocanegra's remarks runs in the same
direction, as if the independence of Texas had not been acknowledged. It
has been acknowledged; it was acknowledged in 1837 against the
remonstrance and protest of Mexico, and most of the acts of any
importance of which Mr. De Bocanegra complains flow necessarily from
that recognition. He speaks of Texas as still being "an integral part of
the territory of the Mexican Republic," but he can not but understand
that the United States do not so regard it. The real complaint of
Mexico, therefore, is in substance neither more nor less than a
complaint against the recognition of Texan independence. It may be
thought rather late to repeat that complaint, and not quite just to
confine it to the United States to the exemption of England, France, and
Belgium, unless the United States, having been the first to acknowledge
the independence of Mexico herself, are to be blamed for setting an
example for the recognition of that of Texas.

And he added that--

The Constitution, public treaties, and the laws oblige the President to
regard Texas as an independent state, and its territory as no part of
the territory of Mexico.

Texas had been an independent state, with an organized government,
defying the power of Mexico to overthrow or reconquer her, for more than
ten years before Mexico commenced the present war against the United
States. Texas had given such evidence to the world of her ability to
maintain her separate existence as an independent nation that she had
been formally recognized as such not only by the United States, but by
several of the principal powers of Europe. These powers had entered into
treaties of amity, commerce, and navigation with her. They had received
and accredited her ministers and other diplomatic agents at their
respective courts, and they had commissioned ministers and diplomatic
agents on their part to the Government of Texas. If Mexico,
notwithstanding all this and her utter inability to subdue or reconquer
Texas, still stubbornly refused to recognize her as an independent
nation, she was none the less so on that account. Mexico herself had
been recognized as an independent nation by the United States and by
other powers many years before Spain, of which before her revolution she
had been a colony, would agree to recognize her as such; and yet Mexico
was at that time in the estimation of the civilized world, and in fact,
none the less an independent power because Spain still claimed her as a
colony. If Spain had continued until the present period to assert that
Mexico was one of her colonies in rebellion against her, this would not
have made her so or changed the fact of her independent existence. Texas
at the period of her annexation to the United States bore the same
relation to Mexico that Mexico had borne to Spain for many years before
Spain acknowledged her independence, with this important difference,
that before the annexation of Texas to the United States was consummated
Mexico herself, by a formal act of her Government, had acknowledged the
independence of Texas as a nation. It is true that in the act of
recognition she prescribed a condition which she had no power or
authority to impose--that Texas should not annex herself to any other
power--but this could not detract in any degree from the recognition
which Mexico then made of her actual independence. Upon this plain
statement of facts, it is absurd for Mexico to allege as a pretext for
commencing hostilities against the United States that Texas is still a
part of her territory.

But there are those who, conceding all this to be true, assume the
ground that the true western boundary of Texas is the Nueces instead of
the Rio Grande, and that therefore in marching our Army to the east bank
of the latter river we passed the Texan line and invaded the territory
of Mexico. A simple statement of facts known to exist will conclusively
refute such an assumption. Texas, as ceded to the United States by
France in 1803, has been always claimed as extending west to the Rio
Grande or Rio Bravo. This fact is established by the authority of our
most eminent statesmen at a period when the question was as well, if not
better, understood than it is at present. During Mr. Jefferson's
Administration Messrs. Monroe and Pinckney, who had been sent on a
special mission to Madrid, charged among other things with the
adjustment of boundary between the two countries, in a note addressed to
the Spanish minister of foreign affairs under date of the 28th of
January, 1805, assert that the boundaries of Louisiana, as ceded to the
United States by France, "are the river Perdido on the east and the
river Bravo on the west," and they add that "the facts and principles
which justify this conclusion are so satisfactory to our Government as
to convince it that the United States have not a better right to the
island of New Orleans under the cession referred to than they have to
the whole district of territory which is above described." Down to the
conclusion of the Florida treaty, in February, 1819, by which this
territory was ceded to Spain, the United States asserted and maintained
their territorial rights to this extent. In the month of June, 1818,
during Mr. Monroe's Administration, information having been received
that a number of foreign adventurers had landed at Galveston with the
avowed purpose of forming a settlement in that vicinity, a special
messenger was dispatched by the Government of the United States with
instructions from the Secretary of State to warn them to desist, should
they be found there, "or any other place north of the Rio Bravo, and
within the territory claimed by the United States." He was instructed,
should they be found in the country north of that river, to make known
to them "the surprise with which the President has seen possession thus
taken, without authority from the United States, of a place within their
territorial limits, and upon which no lawful settlement can be made
without their sanction." He was instructed to call upon them to "avow
under what national authority they profess to act," and to give them due
warning "that the place is within the United States, who will suffer no
permanent settlement to be made there under any authority other than
their own." As late as the 8th of July, 1842, the Secretary of State of
the United States, in a note addressed to our minister in Mexico,
maintains that by the Florida treaty of 1819 the territory as far west
as the Rio Grande was confirmed to Spain. In that note he states that--

By the treaty of the 22d of February, 1819, between the United States
and Spain, the Sabine was adopted as the line of boundary between the
two powers. Up to that period no considerable colonization had been
effected in Texas; but the territory between the Sabine and the Rio
Grande being confirmed to Spain by the treaty, applications were made to
that power for grants of land, and such grants or permissions of
settlement were in fact made by the Spanish authorities in favor of
citizens of the United States proposing to emigrate to Texas in numerous
families before the declaration of independence by Mexico.

The Texas which was ceded to Spain by the Florida treaty of 1819
embraced all the country now claimed by the State of Texas between the
Nueces and the Rio Grande. The Republic of Texas always claimed this
river as her western boundary, and in her treaty made with Santa Anna in
May, 1836, he recognized it as such. By the constitution which Texas
adopted in March, 1836, senatorial and representative districts were
organized extending west of the Nueces. The Congress of Texas on the
19th of December, 1836, passed "An act to define the boundaries of the
Republic of Texas," in which they declared the Rio Grande from its mouth
to its source to be their boundary, and by the said act they extended
their "civil and political jurisdiction" over the country up to that
boundary. During a period of more than nine years which intervened
between the adoption of her constitution and her annexation as one of
the States of our Union Texas asserted and exercised many acts of
sovereignty and jurisdiction over the territory and inhabitants west of
the Nueces. She organized and defined the limits of counties extending
to the Rio Grande; she established courts of justice and extended her
judicial system over the territory; she established a custom-house and
collected duties, and also post-offices and post-roads, in it; she
established a land office and issued numerous grants for land within its
limits; a senator and a representative residing in it were elected to
the Congress of the Republic and served as such before the act of
annexation took place. In both the Congress and convention of Texas
which gave their assent to the terms of annexation to the United States
proposed by our Congress were representatives residing west of the
Nueces, who took part in the act of annexation itself. This was the
Texas which by the act of our Congress of the 29th of December, 1845,
was admitted as one of the States of our Union. That the Congress of the
United States understood the State of Texas which they admitted into the
Union to extend beyond the Nueces is apparent from the fact that on the
31st of December, 1845, only two days after the act of admission, they
passed a law "to establish a collection district in the State of Texas,"
by which they created a port of delivery at Corpus Christi, situated
west of the Nueces, and being the same point at which the Texas
custom-house under the laws of that Republic had been located, and
directed that a surveyor to collect the revenue should be appointed for
that port by the President, by and with the advice and consent of the
Senate. A surveyor was accordingly nominated, and confirmed by the
Senate, and has been ever since in the performance of his duties. All
these acts of the Republic of Texas and of our Congress preceded the
orders for the advance of our Army to the east bank of the Rio Grande.
Subsequently Congress passed an act "establishing certain post routes"
extending west of the Nueces. The country west of that river now
constitutes a part of one of the Congressional districts of Texas and is
represented in the House of Representatives. The Senators from that
State were chosen by a legislature in which the country west of that
river was represented. In view of all these facts it is difficult to
conceive upon what ground it can be maintained that in occupying the
country west of the Nueces with our Army, with a view solely to its
security and defense, we invaded the territory of Mexico. But it would
have been still more difficult to justify the Executive, whose duty it
is to see that the laws be faithfully executed, if in the face of all
these proceedings, both of the Congress of Texas and of the United
States, he had assumed the responsibility of yielding up the territory
west of the Nueces to Mexico or of refusing to protect and defend this
territory and its inhabitants, including Corpus Christi as well as the
remainder of Texas, against the threatened Mexican invasion.

But Mexico herself has never placed the war which she has waged upon the
ground that our Army occupied the intermediate territory between the
Nueces and the Rio Grande. Her refuted pretension that Texas was not in
fact an independent state, but a rebellious province, was obstinately
persevered in, and her avowed purpose in commencing a war with the
United States was to reconquer Texas and to restore Mexican authority
over the whole territory--not to the Nueces only, but to the Sabine. In
view of the proclaimed menaces of Mexico to this effect, I deemed it my
duty, as a measure of precaution and defense, to order our Army to
occupy a position on our frontier as a military post, from which our
troops could best resist and repel any attempted invasion which Mexico
might make. Our Army had occupied a position at Corpus Christi, west of
the Nueces, as early as August, 1845, without complaint from any
quarter. Had the Nueces been regarded as the true western boundary of
Texas, that boundary had been passed by our Army many months before it
advanced to the eastern bank of the Rio Grande. In my annual message of
December last I informed Congress that upon the invitation of both the
Congress and convention of Texas I had deemed it proper to order a
strong squadron to the coasts of Mexico and to concentrate an efficient
military force on the western frontier of Texas to protect and defend
the inhabitants against the menaced invasion of Mexico. In that message
I informed Congress that the moment the terms of annexation offered by
the United States were accepted by Texas the latter became so far a part
of our own country as to make it our duty to afford such protection and
defense, and that for that purpose our squadron had been ordered to the
Gulf and our Army to take a "position between the Nueces and the Del
Norte" or Rio Grande and to "repel any invasion of the Texan territory
which might be attempted by the Mexican forces."

It was deemed proper to issue this order, because soon after the
President of Texas, in April, 1845, had issued his proclamation
convening the Congress of that Republic for the purpose of submitting to
that body the terms of annexation proposed by the United States the
Government of Mexico made serious threats of invading the Texan
territory. These threats became more imposing as it became more apparent
in the progress of the question that the people of Texas would decide in
favor of accepting the terms of annexation, and finally they had assumed
such a formidable character as induced both the Congress and convention
of Texas to request that a military force should be sent by the United
States into her territory for the purpose of protecting and defending
her against the threatened invasion. It would have been a violation of
good faith toward the people of Texas to have refused to afford the aid
which they desired against a threatened invasion to which they had been
exposed by their free determination to annex themselves to our Union in
compliance with the overture made to them by the joint resolution of our
Congress. Accordingly, a portion of the Army was ordered to advance into
Texas. Corpus Christi was the position selected by General Taylor. He
encamped at that place in August, 1845, and the Army remained in that
position until the 11th of March, 1846, when it moved westward, and on
the 28th of that month reached the east bank of the Rio Grande opposite
to Matamoras. This movement was made in pursuance of orders from the War
Department, issued on the 13th of January, 1846. Before these orders
were issued the dispatch of our minister in Mexico transmitting the
decision of the council of government of Mexico advising that he should
not be received, and also the dispatch of our consul residing in the
City of Mexico, the former bearing date on the 17th and the latter on
the 18th of December, 1845, copies of both of which accompanied my
message to Congress of the 11th of May last, were received at the
Department of State. These communications rendered it highly probable,
if not absolutely certain, that our minister would not be received by
the Government of General Herrera. It was also well known that but
little hope could be entertained of a different result from General
Paredes in case the revolutionary movement which he was prosecuting
should prove successful, as was highly probable. The partisans of
Paredes, as our minister in the dispatch referred to states, breathed
the fiercest hostility against the United States, denounced the proposed
negotiation as treason, and openly called upon the troops and the people
to put down the Government of Herrera by force. The reconquest of Texas
and war with the United States were openly threatened. These were the
circumstances existing when it was deemed proper to order the Army under
the command of General Taylor to advance to the western frontier of
Texas and occupy a position on or near the Rio Grande.

The apprehensions of a contemplated Mexican invasion have been since
fully justified by the event. The determination of Mexico to rush into
hostilities with the United States was afterwards manifested from the
whole tenor of the note of the Mexican minister of foreign affairs to
our minister bearing date on the 12th of March, 1846. Paredes had then
revolutionized the Government, and his minister, after referring to the
resolution for the annexation of Texas which had been adopted by our
Congress in March, 1845, proceeds to declare that--

A fact such as this, or, to speak with greater exactness, so notable an
act of usurpation, created an imperious necessity that Mexico, for her
own honor, should repel it with proper firmness and dignity. The supreme
Government had beforehand declared that it would look upon such an act
as a casus belli, and as a consequence of this declaration negotiation
was by its very nature at an end, and war was the only recourse of the
Mexican Government.

It appears also that on the 4th of April following General Paredes,
through his minister of war, issued orders to the Mexican general in
command on the Texan frontier to "attack" our Army "by every means which
war permits." To this General Paredes had been pledged to the army and
people of Mexico during the military revolution which had brought him
into power. On the 18th of April, 1846, General Paredes addressed a
letter to the commander on that frontier in which he stated to him: "At
the present date I suppose you, at the head of that valiant army, either
fighting already or preparing for the operations of a campaign;" and,
"Supposing you already on the theater of operations and with all the
forces assembled, it is indispensable that hostilities be commenced,
yourself taking the initiative against the enemy."

The movement of our Army to the Rio Grande was made by the commanding
general under positive orders to abstain from all aggressive acts toward
Mexico or Mexican citizens, and to regard the relations between the two
countries as peaceful unless Mexico should declare war or commit acts of
hostility indicative of a state of war, and these orders he faithfully
executed. Whilst occupying his position on the east bank of the Rio
Grande, within the limits of Texas, then recently admitted as one of the
States of our Union, the commanding general of the Mexican forces, who,
in pursuance of the orders of his Government, had collected a large army
on the opposite shore of the Rio Grande, crossed the river, invaded our
territory, and commenced hostilities by attacking our forces. Thus,
after all the injuries which we had received and borne from Mexico, and
after she had insultingly rejected a minister sent to her on a mission
of peace, and whom she had solemnly agreed to receive, she consummated
her long course of outrage against our country by commencing an
offensive war and shedding the blood of our citizens on our own soil.

The United States never attempted to acquire Texas by conquest. On the
contrary, at an early period after the people of Texas had achieved
their independence they sought to be annexed to the United States. At a
general election in September, 1836, they decided with great unanimity
in favor of "annexation," and in November following the Congress of the
Republic authorized the appointment of a minister to bear their request
to this Government. This Government, however, having remained neutral
between Texas and Mexico during the war between them, and considering it
due to the honor of our country and our fair fame among the nations of
the earth that we should not at this early period consent to annexation,
nor until it should be manifest to the whole world that the reconquest
of Texas by Mexico was impossible, refused to accede to the overtures
made by Texas. On the 12th of April, 1844, after more than seven years
had elapsed since Texas had established her independence, a treaty was
concluded for the annexation of that Republic to the United States,
which was rejected by the Senate. Finally, on the 1st of March, 1845,
Congress passed a joint resolution for annexing her to the United States
upon certain preliminary conditions to which her assent was required.
The solemnities which characterized the deliberations and conduct of the
Government and people of Texas on the deeply interesting questions
presented by these resolutions are known to the world. The Congress, the
Executive, and the people of Texas, in a convention elected for that
purpose, accepted with great unanimity the proposed terms of annexation,
and thus consummated on her part the great act of restoring to our
Federal Union a vast territory which had been ceded to Spain by the
Florida treaty more than a quarter of a century before.

After the joint resolution for the annexation of Texas to the United
States had been passed by our Congress the Mexican minister at
Washington addressed a note to the Secretary of State, bearing date on
the 6th of March, 1845, protesting against it as "an act of aggression
the most unjust which can be found recorded in the annals of modern
history, namely, that of despoiling a friendly nation like Mexico of a
considerable portion of her territory," and protesting against the
resolution of annexation as being an act "whereby the Province of Texas,
an integral portion of the Mexican territory, is agreed and admitted
into the American Union;" and he announced that as a consequence his
mission to the United States had terminated, and demanded his passports,
which were granted. It was upon the absurd pretext, made by Mexico
(herself indebted for her independence to a successful revolution), that
the Republic of Texas still continued to be, notwithstanding all that
had passed, a Province of Mexico that this step was taken by the Mexican
minister.

Every honorable effort has been used by me to avoid the war which
followed, but all have proved vain. All our attempts to preserve peace
have been met by insult and resistance on the part of Mexico. My efforts
to this end commenced in the note of the Secretary of State of the 10th
of March, 1845, in answer to that of the Mexican minister. Whilst
declining to reopen a discussion which had already been exhausted, and
proving again what was known to the whole world, that Texas had long
since achieved her independence, the Secretary of State expressed the
regret of this Government that Mexico should have taken offense at the
resolution of annexation passed by Congress, and gave assurance that our
"most strenuous efforts shall be devoted to the amicable adjustment of
every cause of complaint between the two Governments and to the
cultivation of the kindest and most friendly relations between the
sister Republics." That I have acted in the spirit of this assurance
will appear from the events which have since occurred. Notwithstanding
Mexico had abruptly terminated all diplomatic intercourse with the
United States, and ought, therefore, to have been the first to ask for
its resumption, yet, waiving all ceremony, I embraced the earliest
favorable opportunity "to ascertain from the Mexican Government whether
they would receive an envoy from the United States intrusted with full
power to adjust all the questions in dispute between the two
Governments." In September, 1845, I believed the propitious moment for
such an overture had arrived. Texas, by the enthusiastic and almost
unanimous will of her people, had pronounced in favor of annexation.
Mexico herself had agreed to acknowledge the independence of Texas,
subject to a condition, it is true, which she had no right to impose and
no power to enforce. The last lingering hope of Mexico, if she still
could have retained any, that Texas would ever again become one of her
Provinces, must have been abandoned.

The consul of the United States at the City of Mexico was therefore
instructed by the Secretary of State on the 15th of September, 1845, to
make the inquiry of the Mexican Government. The inquiry was made, and on
the 15th of October, 1845, the minister of foreign affairs of the
Mexican Government, in a note addressed to our consul, gave a favorable
response, requesting at the same time that our naval force might be
withdrawn from Vera Cruz while negotiations should be pending. Upon the
receipt of this note our naval force was promptly withdrawn from Vera
Cruz. A minister was immediately appointed, and departed to Mexico.
Everything bore a promising aspect for a speedy and peaceful adjustment
of all our difficulties. At the date of my annual message to Congress in
December last no doubt was entertained but that he would be received by
the Mexican Government, and the hope was cherished that all cause of
misunderstanding between the two countries would be speedily removed. In
the confident hope that such would be the result of his mission, I
informed Congress that I forbore at that time to "recommend such
ulterior measures of redress for the wrongs and injuries we had so long
borne as it would have been proper to make had no such negotiation been
instituted." To my surprise and regret the Mexican Government, though
solemnly pledged to do so, upon the arrival of our minister in Mexico
refused to receive and accredit him. When he reached Vera Cruz, on the
30th of November, 1845, he found that the aspect of affairs had
undergone an unhappy change. The Government of General Herrera, who was
at that time President of the Republic, was tottering to its fall.
General Paredes, a military leader, had manifested his determination to
overthrow the Government of Herrera by a military revolution, and one of
the principal means which he employed to effect his purpose and render
the Government of Herrera odious to the army and people of Mexico was by
loudly condemning its determination to receive a minister of peace from
the United States, alleging that it was the intention of Herrera, by a
treaty with the United States, to dismember the territory of Mexico by
ceding away the department of Texas. The Government of Herrera is
believed to have been well disposed to a pacific adjustment of existing
difficulties, but probably alarmed for its own security, and in order to
ward off the danger of the revolution led by Paredes, violated its
solemn agreement and refused to receive or accredit our minister; and
this although informed that he had been invested with full power to
adjust all questions in dispute between the two Governments. Among the
frivolous pretexts for this refusal, the principal one was that our
minister had not gone upon a special mission confined to the question of
Texas alone, leaving all the outrages upon our flag and our citizens
unredressed. The Mexican Government well knew that both our national
honor and the protection due to our citizens imperatively required that
the two questions of boundary and indemnity should be treated of
together, as naturally and inseparably blended, and they ought to have
seen that this course was best calculated to enable the United States to
extend to them the most liberal justice. On the 30th of December, 1845,
General Herrera resigned the Presidency and yielded up the Government to
General Paredes without a struggle. Thus a revolution was accomplished
solely by the army commanded by Paredes, and the supreme power in Mexico
passed into the hands of a military usurper who was known to be bitterly
hostile to the United States.

Although the prospect of a pacific adjustment with the new Government
was unpromising from the known hostility of its head to the United
States, yet, determined that nothing should be left undone on our part
to restore friendly relations between the two countries, our minister
was instructed to present his credentials to the new Government and ask
to be accredited by it in the diplomatic character in which he had been
commissioned. These instructions he executed by his note of the 1st of
March, 1846, addressed to the Mexican minister of foreign affairs, but
his request was insultingly refused by that minister in his answer of
the 12th of the same month. No alternative remained for our minister but
to demand his passports and return to the United States.

Thus was the extraordinary spectacle presented to the civilized world of
a Government, in violation of its own express agreement, having twice
rejected a minister of peace invested with full powers to adjust all the
existing differences between the two countries in a manner just and
honorable to both. I am not aware that modern history presents a
parallel case in which in time of peace one nation has refused even to
hear propositions from another for terminating existing difficulties
between them. Scarcely a hope of adjusting our difficulties, even at a
remote day, or of preserving peace with Mexico, could be cherished while
Paredes remained at the head of the Government. He had acquired the
supreme power by a military revolution and upon the most solemn pledges
to wage war against the United States and to reconquer Texas, which he
claimed as a revolted province of Mexico. He had denounced as guilty of
treason all those Mexicans who considered Texas as no longer
constituting a part of the territory of Mexico and who were friendly to
the cause of peace. The duration of the war which he waged against the
United States was indefinite, because the end which he proposed of the
reconquest of Texas was hopeless. Besides, there was good reason to
believe from all his conduct that it was his intention to convert the
Republic of Mexico into a monarchy and to call a foreign European prince
to the throne. Preparatory to this end, he had during his short rule
destroyed the liberty of the press, tolerating that portion of it only
which openly advocated the establishment of a monarchy. The better to
secure the success of his ultimate designs, he had by an arbitrary
decree convoked a Congress, not to be elected by the free voice of the
people, but to be chosen in a manner to make them subservient to his
will and to give him absolute control over their deliberations.

Under all these circumstances it was believed that any revolution in
Mexico founded upon opposition to the ambitious projects of Paredes
would tend to promote the cause of peace as well as prevent any
attempted European interference in the affairs of the North American
continent, both objects of deep interest to the United States. Any such
foreign interference, if attempted, must have been resisted by the
United States. My views upon that subject were fully communicated to
Congress in my last annual message. In any event, it was certain that no
change whatever in the Government of Mexico which would deprive Paredes
of power could be for the worse so far as the United States were
concerned, while it was highly probable that any change must be for the
better. This was the state of affairs existing when Congress, on the
13th of May last, recognized the existence of the war which had been
commenced by the Government of Paredes; and it became an object of much
importance, with a view to a speedy settlement of our difficulties and
the restoration of an honorable peace, that Paredes should not retain
power in Mexico.

Before that time there were symptoms of a revolution in Mexico, favored,
as it was understood to be, by the more liberal party, and especially by
those who were opposed to foreign interference and to the monarchical
form of government. Santa Anna was then in exile in Havana, having been
expelled from power and banished from his country by a revolution which
occurred in December, 1844; but it was known that he had still a
considerable party in his favor in Mexico. It was also equally well
known that no vigilance which could be exerted by our squadron would in
all probability have prevented him from effecting a landing somewhere on
the extensive Gulf coast of Mexico if he desired to return to his
country. He had openly professed an entire change of policy, had
expressed his regret that he had subverted the federal constitution of
1824, and avowed that he was now in favor of its restoration. He had
publicly declared his hostility, in strongest terms, to the
establishment of a monarchy and to European interference in the affairs
of his country. Information to this effect had been received, from
sources believed to be reliable, at the date of the recognition of the
existence of the war by Congress, and was afterwards fully confirmed by
the receipt of the dispatch of our consul in the City of Mexico, with
the accompanying documents, which are herewith transmitted. Besides, it
was reasonable to suppose that he must see the ruinous consequences to
Mexico of a war with the United States, and that it would be his
interest to favor peace.

It was under these circumstances and upon these considerations that it
was deemed expedient not to obstruct his return to Mexico should he
attempt to do so. Our object was the restoration of peace, and, with
that view, no reason was perceived why we should take part with Paredes
and aid him by means of our blockade in preventing the return of his
rival to Mexico. On the contrary, it was believed that the intestine
divisions which ordinary sagacity could not but anticipate as the fruit
of Santa Anna's return to Mexico, and his contest with Paredes, might
strongly tend to produce a disposition with both parties to restore and
preserve peace with the United States. Paredes was a soldier by
profession and a monarchist in principle. He had but recently before
been successful in a military revolution, by which he had obtained
power. He was the sworn enemy of the United States, with which he had
involved his country in the existing war. Santa Anna had been expelled
from power by the army, was known to be in open hostility to Paredes,
and publicly pledged against foreign intervention and the restoration of
monarchy in Mexico. In view of these facts and circumstances it was that
when orders were issued to the commander of our naval forces in the
Gulf, on the 13th day of May last, the same day on which the existence
of the war was recognized by Congress, to place the coasts of Mexico
under blockade, he was directed not to obstruct the passage of Santa
Anna to Mexico should he attempt to return.

A revolution took place in Mexico in the early part of August following,
by which the power of Paredes was overthrown, and he has since been
banished from the country, and is now in exile. Shortly afterwards Santa
Anna returned. It remains to be seen whether his return may not yet
prove to be favorable to a pacific adjustment of the existing
difficulties, it being manifestly his interest not to persevere in the
prosecution of a war commenced by Paredes to accomplish a purpose so
absurd as the reconquest of Texas to the Sabine. Had Paredes remained in
power, it is morally certain that any pacific adjustment would have been
hopeless.

Upon the commencement of hostilities by Mexico against the United States
the indignant spirit of the nation was at once aroused. Congress
promptly responded to the expectations of the country, and by the act of
the 13th of May last recognized the fact that war existed, by the act of
Mexico, between the United States and that Republic, and granted the
means necessary for its vigorous prosecution. Being involved in a war
thus commenced by Mexico, and for the justice of which on our part we
may confidently appeal to the whole world, I resolved to prosecute it
with the utmost vigor. Accordingly the ports of Mexico on the Gulf and
on the Pacific have been placed under blockade and her territory invaded
at several important points. The reports from the Departments of War and
of the Navy will inform you more in detail of the measures adopted in
the emergency in which our country was placed and of the gratifying
results which have been accomplished.

The various columns of the Army have performed their duty under great
disadvantages with the most distinguished skill and courage. The
victories of Palo Alto and Resaca de la Palma and of Monterey, won
against greatly superior numbers and against most decided advantages in
other respects on the part of the enemy, were brilliant in their
execution, and entitle our brave officers and soldiers to the grateful
thanks of their country. The nation deplores the loss of the brave
officers and men who have gallantly fallen while vindicating and
defending their country's rights and honor.

It is a subject of pride and satisfaction that our volunteer citizen
soldiers, who so promptly responded to their country's call, with an
experience of the discipline of a camp of only a few weeks, have borne
their part in the hard-fought battle of Monterey with a constancy and
courage equal to that of veteran troops and worthy of the highest
admiration. The privations of long marches through the enemy's country
and through a wilderness have been borne without a murmur. By rapid
movements the Province of New Mexico, with Santa Fe, its capital, has
been captured without bloodshed. The Navy has cooperated with the Army
and rendered important services; if not so brilliant, it is because the
enemy had no force to meet them on their own element and because of the
defenses which nature has interposed in the difficulties of the
navigation on the Mexican coast. Our squadron in the Pacific, with the
cooperation of a gallant officer of the Army and a small force hastily
collected in that distant country, has acquired bloodless possession of
the Californias, and the American flag has been raised at every
important point in that Province.

I congratulate you on the success which has thus attended our military
and naval operations. In less than seven months after Mexico commenced
hostilities, at a time selected by herself, we have taken possession of
many of her principal ports, driven back and pursued her invading army,
and acquired military possession of the Mexican Provinces of New Mexico,
New Leon, Coahuila, Tamaulipas, and the Californias, a territory larger
in extent than that embraced in the original thirteen States of the
Union, inhabited by a considerable population, and much of it more than
1,000 miles from the points at which we had to collect our forces and
commence our movements. By the blockade the import and export trade of
the enemy has been cut off. Well may the American people be proud of the
energy and gallantry of our regular and volunteer officers and soldiers.
The events of these few months afford a gratifying proof that our
country can under any emergency confidently rely for the maintenance of
her honor and the defense of her rights on an effective force, ready at
all times voluntarily to relinquish the comforts of home for the perils
and privations of the camp. And though such a force may be for the time
expensive, it is in the end economical, as the ability to command it
removes the necessity of employing a large standing army in time of
peace, and proves that our people love their institutions and are ever
ready to defend and protect them.

While the war was in a course of vigorous and successful prosecution,
being still anxious to arrest its evils, and considering that after the
brilliant victories of our arms on the 8th and 9th of May last the
national honor could not be compromitted by it, another overture was
made to Mexico, by my direction, on the 27th of July last to terminate
hostilities by a peace just and honorable to both countries. On the 31st
of August following the Mexican Government declined to accept this
friendly overture, but referred it to the decision of a Mexican Congress
to be assembled in the early part of the present month. I communicate to
you herewith a copy of the letter of the Secretary of State proposing to
reopen negotiations, of the answer of the Mexican Government, and of the
reply thereto of the Secretary of State,

The war will continue to be prosecuted with vigor as the best means of
securing peace. It is hoped that the decision of the Mexican Congress,
to which our last overture has been referred, may result in a speedy and
honorable peace. With our experience, however, of the unreasonable
course of the Mexican authorities, it is the part of wisdom not to relax
in the energy of our military operations until the result is made known.
In this view it is deemed important to hold military possession of all
the Provinces which have been taken until a definitive treaty of peace
shall have been concluded and ratified by the two countries.

The war has not been waged with a view to conquest, but, having been
commenced by Mexico, it has been carried into the enemy's country and
will be vigorously prosecuted there with a view to obtain an honorable
peace, and thereby secure ample indemnity for the expenses of the war,
as well as to our much-injured citizens, who hold large pecuniary
demands against Mexico.

By the laws of nations a conquered country is subject to be governed by
the conqueror during his military possession and until there is either a
treaty of peace or he shall voluntarily withdraw from it. The old civil
government being necessarily superseded, it is the right and duty of the
conqueror to secure his conquest and to provide for the maintenance of
civil order and the rights of the inhabitants. This right has been
exercised and this duty performed by our military and naval commanders
by the establishment of temporary governments in some of the conquered
Provinces of Mexico, assimilating them as far as practicable to the free
institutions of our own country. In the Provinces of New Mexico and of
the Californias little, if any, further resistance is apprehended from
the inhabitants to the temporary governments which have thus, from the
necessity of the case and according to the laws of war, been
established. It may be proper to provide for the security of these
important conquests by making an adequate appropriation for the purpose
of erecting fortifications and defraying the expenses necessarily
incident to the maintenance of our possession and authority over them.

Near the close of your last session, for reasons communicated to
Congress, I deemed it important as a measure for securing a speedy peace
with Mexico, that a sum of money should be appropriated and placed in
the power of the Executive, similar to that which had been made upon two
former occasions during the Administration of President Jefferson.

On the 26th of February, 1803, an appropriation of $2,000.000 was made
and placed at the disposal of the President. Its object is well known.
It was at that time in contemplation to acquire Louisiana from France,
and it was intended to be applied as a part of the consideration which
might be paid for that territory. On the 13th of February, 1806, the
same sum was in like manner appropriated, with a view to the purchase of
the Floridas from Spain. These appropriations were made to facilitate
negotiations and as a means to enable the President to accomplish the
important objects in view. Though it did not become necessary for the
President to use these appropriations, yet a state of things might have
arisen in which it would have been highly important for him to do so,
and the wisdom of making them can not be doubted. It is believed that
the measure recommended at your last session met with the approbation of
decided majorities in both Houses of Congress. Indeed, in different
forms, a bill making an appropriation of $2,000,000 passed each House,
and it is much to be regretted that it did not become a law. The reasons
which induced me to recommend the measure at that time still exist, and
I again submit the subject for your consideration and suggest the
importance of early action upon it. Should the appropriation be made and
be not needed, it will remain in the Treasury; should it be deemed
proper to apply it in whole or in part, it will be accounted for as
other public expenditures.

Immediately after Congress had recognized the existence of the war with
Mexico my attention was directed to the danger that privateers might be
fitted out in the ports of Cuba and Porto Rico to prey upon the commerce
of the United States, and I invited the special attention of the Spanish
Government to the fourteenth article of our treaty with that power of
the 27th of October, 1795, under which the citizens and subjects of
either nation who shall take commissions or letters of marque to act as
privateers against the other "shall be punished as pirates."

It affords me pleasure to inform you that I have received assurances
from the Spanish Government that this article of the treaty shall be
faithfully observed on its part. Orders for this purpose were
immediately transmitted from that Government to the authorities of Cuba
and Porto Rico to exert their utmost vigilance in preventing any
attempts to fit out privateers in those islands against the United
States. From the good faith of Spain I am fully satisfied that this
treaty will be executed in its spirit as well as its letter, whilst the
United States will on their part faithfully perform all the obligations
which it imposes on them.

Information has been recently received at the Department of State that
the Mexican Government has sent to Havana blank commissions to
privateers and blank certificates of naturalization signed by General
Salas, the present head of the Mexican Government. There is also reason
to apprehend that similar documents have been transmitted to other parts
of the world. Copies of these papers, in translation, are herewith
transmitted.

As the preliminaries required by the practice of civilized nations for
commissioning privateers and regulating their conduct appear not to have
been observed, and as these commissions are in blank, to be filled up
with the names of citizens and subjects of all nations who may be
willing to purchase them, the whole proceeding can only be construed as
an invitation to all the freebooters upon earth who are willing to pay
for the privilege to cruise against American commerce. It will be for
our courts of justice to decide whether under such circumstances these
Mexican letters of marque and reprisal shall protect those who accept
them, and commit robberies upon the high seas under their authority,
from the pains and penalties of piracy.

If the certificates of naturalization thus granted be intended by Mexico
to shield Spanish subjects from the guilt and punishment of pirates
under our treaty with Spain, they will certainly prove unavailing. Such
a subterfuge would be but a weak device to defeat the provisions of a
solemn treaty.

I recommend that Congress should immediately provide by law for the
trial and punishment as pirates of Spanish subjects who, escaping the
vigilance of their Government, shall be found guilty of privateering
against the United States. I do not apprehend serious danger from these
privateers. Our Navy will be constantly on the alert to protect our
commerce. Besides, in case prizes should be made of American vessels,
the utmost vigilance will be exerted by our blockading squadron to
prevent the captors from taking them into Mexican ports, and it is not
apprehended that any nation will violate its neutrality by suffering
such prizes to be condemned and sold within its jurisdiction.

I recommend that Congress should immediately provide by law for granting
letters of marque and reprisal against vessels under the Mexican flag.
It is true that there are but few, if any, commercial vessels of Mexico
upon the high seas, and it is therefore not probable that many American
privateers would be fitted out in case a law should pass authorizing
this mode of warfare. It is, notwithstanding, certain that such
privateers may render good service to the commercial interests of the
country by recapturing our merchant ships should any be taken by armed
vessels under the Mexican flag, as well as by capturing these vessels
themselves. Every means within our power should be rendered available
for the protection of our commerce.

The annual report of the Secretary of the Treasury will exhibit a
detailed statement of the condition of the finances. The imports for the
fiscal year ending on the 30th of June last were of the value of
$121,691,797, of which the amount exported was $11,346,623, leaving the
amount retained in the country for domestic consumption $110,345,174.
The value of the exports for the same period was $113,488,516, of which
$102,141,893 consisted of domestic productions and $11,346,623 of
foreign articles.

The receipts into the Treasury for the same year were $29,499,247.06, of
which there was derived from customs $26,712,667.87, from the sales of
public lands $2,694,452.48, and from incidental and miscellaneous
sources $92,126.71. The expenditures for the same period were
$28,031,114.20, and the balance in the Treasury on the 1st day of July
last was $9,126,439. 08.

The amount of the public debt, including Treasury notes, on the 1st of
the present month was $24,256,494.60, of which the sum of $17,788,799.62
was outstanding on the 4th of March, 1845, leaving the amount incurred
since that time $6,467,694.98.

In order to prosecute the war with Mexico with vigor and energy, as the
best means of bringing it to a speedy and honorable termination, a
further loan will be necessary to meet the expenditures for the present
and the next fiscal year. If the war should be continued until the 30th
of June, 1848, being the end of the next fiscal year, it is estimated
that an additional loan of $23,000,000 will be required. This estimate
is made upon the assumption that it will be necessary to retain
constantly in the Treasury $4,000,000 to guard against contingencies. If
such surplus were not required to be retained, then a loan of
$19,000,000 would be sufficient. If, however, Congress should at the
present session impose a revenue duty on the principal articles now
embraced in the free list, it is estimated that an additional annual
revenue of about two millions and a half, amounting, it is estimated, on
the 30th of June, 1848, to $4,000,000, would be derived from that
source, and the loan required would be reduced by that amount. It is
estimated also that should Congress graduate and reduce the price of
such of the public lands as have been long in the market the additional
revenue derived from that source would be annually, for several years to
come, between half a million and a million dollars; and the loan
required may be reduced by that amount also. Should these measures be
adopted, the loan required would not probably exceed $18,000,000 or
$19,000,000, leaving in the Treasury a constant surplus of $4,000,000.
The loan proposed, it is estimated, will be sufficient to cover the
necessary expenditures both for the war and for all other purposes up to
the 30th of June, 1848, and an amount of this loan not exceeding
one-half may be required during the present fiscal year, and the greater
part of the remainder during the first half of the fiscal year
succeeding.

In order that timely notice may be given and proper measures taken to
effect the loan, or such portion of it as may be required, it is
important that the authority of Congress to make it be given at an early
period of your present session. It is suggested that the loan should be
contracted for a period of twenty years, with authority to purchase the
stock and pay it off at an earlier period at its market value out of any
surplus which may at any time be in the Treasury applicable to that
purpose. After the establishment of peace with Mexico, it is supposed
that a considerable surplus will exist, and that the debt may be
extinguished in a much shorter period than that for which it may be
contracted. The period of twenty years, as that for which the proposed
loan may be contracted, in preference to a shorter period, is suggested,
because all experience, both at home and abroad, has shown that loans
are effected upon much better terms upon long time than when they are
reimbursable at short dates.

Necessary as this measure is to sustain the honor and the interests of
the country engaged in a foreign war, it is not doubted but that
Congress will promptly authorize it.

The balance in the Treasury on the 1st July last exceeded $9,000,000,
notwithstanding considerable expenditures had been made for the war
during the months of May and June preceding. But for the war the whole
public debt could and would have been extinguished within a short
period; and it was a part of my settled policy to do so, and thus
relieve the people from its burden and place the Government in a
position which would enable it to reduce the public expenditures to that
economical standard which is most consistent with the general welfare
and the pure and wholesome progress of our institutions.

Among our just causes of complaint against Mexico arising out of her
refusal to treat for peace, as well before as since the war so unjustly
commenced on her part, are the extraordinary expenditures in which we
have been involved. Justice to our own people will make it proper that
Mexico should be held responsible for these expenditures.

Economy in the public expenditures is at all times a high duty which all
public functionaries of the Government owe to the people. This duty
becomes the more imperative in a period of war, when large and
extraordinary expenditures become unavoidable. During the existence of
the war with Mexico all our resources should be husbanded, and no
appropriations made except such as are absolutely necessary for its
vigorous prosecution and the due administration of the Government.
Objects of appropriation which in peace may be deemed useful or proper,
but which are not indispensable for the public service, may when the
country is engaged in a foreign war be well postponed to a future
period. By the observance of this policy at your present session large
amounts may be saved to the Treasury and be applied to objects of
pressing and urgent necessity, and thus the creation of a corresponding
amount of public debt may be avoided.

It is not meant to recommend that the ordinary and necessary
appropriations for the support of Government should be withheld; but it
is well known that at every session of Congress appropriations are
proposed for numerous objects which may or may not be made without
materially affecting the public interests, and these it is recommended
should not be granted.

The act passed at your last session "reducing the duties on imports" not
having gone into operation until the 1st of the present month, there has
not been time for its practical effect upon the revenue and the business
of the country to be developed. It is not doubted, however, that the
just policy which it adopts will add largely to our foreign trade and
promote the general prosperity. Although it can not be certainly
foreseen what amount of revenue it will yield, it is estimated that it
will exceed that produced by the act of 1842, which it superseded. The
leading principles established by it are to levy the taxes with a view
to raise revenue and to impose them upon the articles imported according
to their actual value.

The act of 1842, by the excessive rates of duty which it imposed on many
articles, either totally excluded them from importation or greatly
reduced the amount imported, and thus diminished instead of producing
revenue. By it the taxes were imposed not for the legitimate purpose of
raising revenue, but to afford advantages to favored classes at the
expense of a large majority of their fellow-citizens. Those employed in
agriculture, mechanical pursuits, commerce, and navigation were
compelled to contribute from their substance to swell the profits and
overgrown wealth of the comparatively few who had invested their capital
in manufactures. The taxes were not levied in proportion to the value of
the articles upon which they were imposed, but, widely departing from
this just rule, the lighter taxes were in many cases levied upon
articles of luxury and high price and the heavier taxes on those of
necessity and low price, consumed by the great mass of the people. It
was a system the inevitable effect of which was to relieve favored
classes and the wealthy few from contributing their just proportion for
the support of Government, and to lay the burden on the labor of the
many engaged in other pursuits than manufactures.

A system so unequal and unjust has been superseded by the existing law,
which imposes duties not for the benefit or injury of classes or
pursuits, but distributes and, as far as practicable, equalizes the
public burdens among all classes and occupations. The favored classes
who under the unequal and unjust system which has been repealed have
heretofore realized large profits, and many of them amassed large
fortunes at the expense of the many who have been made tributary to
them, will have no reason to complain if they shall be required to bear
their just proportion of the taxes necessary for the support of
Government. So far from it, it will be perceived by an examination of
the existing law that discriminations in the rates of duty imposed
within the revenue principle have been retained in their favor. The
incidental aid against foreign competition which they still enjoy gives
them an advantage which no other pursuits possess, but of this none
others will complain, because the duties levied are necessary for
revenue. These revenue duties, including freights and charges, which the
importer must pay before he can come in competition with the home
manufacturer in our markets, amount on nearly all our leading branches
of manufacture to more than one-third of the value of the imported
article, and in some cases to almost one-half its value. With such
advantages it is not doubted that our domestic manufacturers will
continue to prosper, realizing in well-conducted establishments even
greater profits than can be derived from any other regular business.
Indeed, so far from requiring the protection of even incidental revenue
duties, our manufacturers in several leading branches are extending
their business, giving evidence of great ingenuity and skill and of
their ability to compete, with increased prospect of success, for the
open market of the world. Domestic manufactures to the value of several
millions of dollars, which can not find a market at home, are annually
exported to foreign countries. With such rates of duty as those
established by the existing law the system will probably be permanent,
and capitalists who are made or shall hereafter make their investments
in manufactures will know upon what to rely. The country will be
satisfied with these rates, because the advantages which the
manufacturers still enjoy result necessarily from the collection of
revenue for the support of Government. High protective duties, from
their unjust operation upon the masses of the people, can not fail to
give rise to extensive dissatisfaction and complaint and to constant
efforts to change or repeal them, rendering all investments in
manufactures uncertain and precarious. Lower and more permanent rates of
duty, at the same time that they will yield to the manufacturer fair and
remunerating profits, will secure him against the danger of frequent
changes in the system, which can not fail to ruinously affect his
interests.

Simultaneously with the relaxation of the restrictive policy by the
United States, Great Britain, from whose example we derived the system,
has relaxed hers. She has modified her corn laws and reduced many other
duties to moderate revenue rates. After ages of experience the statesmen
of that country have been constrained by a stern necessity and by a
public opinion having its deep foundation in the sufferings and wants of
impoverished millions to abandon a system the effect of which was to
build up immense fortunes in the hands of the few and to reduce the
laboring millions to pauperism and misery. Nearly in the same ratio that
labor was depressed capital was increased and concentrated by the
British protective policy.

The evils of the system in Great Britain were at length rendered
intolerable, and it has been abandoned, but not without a severe
struggle on the part of the protected and favored classes to retain the
unjust advantages which they have so long enjoyed. It was to be expected
that a similar struggle would be made by the same classes in the United
States whenever an attempt was made to modify or abolish the same unjust
system here. The protective policy had been in operation in the United
States for a much shorter period, and its pernicious effects were not,
therefore, so clearly perceived and felt. Enough, however, was known of
these effects to induce its repeal.

It would be strange if in the face of the example of Great Britain, our
principal foreign customer, and of the evils of a system rendered
manifest in that country by long and painful experience, and in the face
of the immense advantages which under a more liberal commercial policy
we are already deriving, and must continue to derive, by supplying her
starving population with food, the United States should restore a policy
which she has been compelled to abandon, and thus diminish her ability
to purchase from us the food and other articles which she so much needs
and we so much desire to sell. By the simultaneous abandonment of the
protective policy by Great Britain and the United States new and
important markets have already been opened for our agricultural and
other products, commerce and navigation have received a new impulse,
labor and trade have been released from the artificial trammels which
have so long fettered them, and to a great extent reciprocity in the
exchange of commodities has been introduced at the same time by both
countries, and greatly for the benefit of both. Great Britain has been
forced by the pressure of circumstances at home to abandon a policy
which has been upheld for ages, and to open her markets for our immense
surplus of breadstuffs, and it is confidently believed that other powers
of Europe will ultimately see the wisdom, if they be not compelled by
the pauperism and sufferings of their crowded population, to pursue a
similar policy.

Our farmers are more deeply interested in maintaining the just and
liberal policy of the existing law than any other class of our citizens.
They constitute a large majority of our population, and it is well known
that when they prosper all other pursuits prosper also. They have
heretofore not only received none of the bounties or favors of
Government, but by the unequal operations of the protective policy have
been made by the burdens of taxation which it imposed to contribute to
the bounties which have enriched others.

When a foreign as well as a home market is opened to them, they must
receive, as they are now receiving, increased prices for their products.
They will find a readier sale, and at better prices, for their wheat,
flour, rice, Indian corn, beef, pork, lard, butter, cheese, and other
articles which they produce. The home market alone is inadequate to
enable them to dispose of the immense surplus of food and other articles
which they are capable of producing, even at the most reduced prices,
for the manifest reason that they can not be consumed in the country.
The United States can from their immense surplus supply not only the
home demand, but the deficiencies of food required by the whole world.

That the reduced production of some of the chief articles of food in
Great Britain and other parts of Europe may have contributed to increase
the demand for our breadstuffs and provisions is not doubted, but that
the great and efficient cause of this increased demand and of increased
prices consists in the removal of artificial restrictions heretofore
imposed is deemed to be equally certain. That our exports of food,
already increased and increasing beyond former example under the more
liberal policy which has been adopted, will be still vastly enlarged
unless they be checked or prevented by a restoration of the protective
policy can not be doubted. That our commercial and navigating interests
will be enlarged in a corresponding ratio with the increase of our trade
is equally certain, while our manufacturing interests will still be the
favored interests of the country and receive the incidental protection
afforded them by revenue duties; and more than this they can not justly
demand.

In my annual message of December last a tariff of revenue duties based
upon the principles of the existing law was recommended, and I have seen
no reason to change the opinions then expressed. In view of the probable
beneficial effects of that law, I recommend that the policy established
by it be maintained. It has but just commenced to operate, and to
abandon or modify it without giving it a fair trial would be inexpedient
and unwise. Should defects in any of its details be ascertained by
actual experience to exist, these may be hereafter corrected; but until
such defects shall become manifest the act should be fairly tested.

It is submitted for your consideration whether it may not be proper, as
a war measure, to impose revenue duties on some of the articles now
embraced in the free list. Should it be deemed proper to impose such
duties with a view to raise revenue to meet the expenses of the war with
Mexico or to avoid to that extent the creation of a public debt, they
may be repealed when the emergency which gave rise to them shall cease
to exist, and constitute no part of the permanent policy of the country.

The act of the 6th of August last, "to provide for the better
organization of the Treasury and for the collection, safe-keeping,
transfer, and disbursement of the public revenue," has been carried into
execution as rapidly as the delay necessarily arising out of the
appointment of new officers, taking and approving their bonds, and
preparing and securing proper places for the safe-keeping of the public
money would permit. It is not proposed to depart in any respect from the
principles or policy on which this great measure is rounded. There are,
however, defects in the details of the measure, developed by its
practical operation, which are fully set forth in the report of the
Secretary of the Treasury, to which the attention of Congress is
invited. These defects would impair to some extent the successful
operation of the law at all times, but are especially embarrassing when
the country is engaged in a war, when the expenditures are greatly
increased, when loans are to be effected and the disbursements are to be
made at points many hundred miles distant, in some cases, from any
depository, and a large portion of them in a foreign country. The
modifications suggested in the report of the Secretary of the Treasury
are recommended to your favorable consideration.

In connection with this subject I invite your attention to the
importance of establishing a branch of the Mint of the United States at
New York. Two-thirds of the revenue derived from customs being collected
at that point, the demand for specie to pay the duties will be large,
and a branch mint where foreign coin and bullion could be immediately
converted into American coin would greatly facilitate the transaction of
the public business, enlarge the circulation of gold and silver, and be
at the same time a safe depository of the public money.

The importance of graduating and reducing the price of such of the
public lands as have been long offered in the market at the minimum rate
authorized by existing laws, and remain unsold, induces me again to
recommend the subject to your favorable consideration. Many millions of
acres of these lands have been offered in the market for more than
thirty years and larger quantities for more than ten or twenty years,
and, being of an inferior quality, they must remain unsalable for an
indefinite period unless the price at which they may be purchased shall
be reduced. To place a price upon them above their real value is not
only to prevent their sale, and thereby deprive the Treasury of any
income from that source, but is unjust to the States in which they lie,
because it retards their growth and increase of population, and because
they have no power to levy a tax upon them as upon other lands within
their limits, held by other proprietors than the United States, for the
support of their local governments.

The beneficial effects of the graduation principle have been realized by
some of the States owning the lands within their limits in which it has
been adopted. They have been demonstrated also by the United States
acting as the trustee of the Chickasaw tribe of Indians in the sale of
their lands lying within the States of Mississippi and Alabama. The
Chickasaw lands, which would not command in the market the minimum price
established by the laws of the United States for the sale of their
lands, were, in pursuance of the treaty of 1834 with that tribe,
subsequently offered for sale at graduated and reduced rates for limited
periods. The result was that large quantities of these lands were
purchased which would otherwise have remained unsold. The lands were
disposed of at their real value, and many persons of limited means were
enabled to purchase small tracts, upon which they have settled with
their families. That similar results would be produced by the adoption
of the graduation policy by the United States in all the States in which
they are the owners of large bodies of lands which have been long in the
market can not be doubted. It can not be a sound policy to withhold
large quantities of the public lands from the use and occupation of our
citizens by fixing upon them prices which experience has shown they will
not command. On the contrary, it is a wise policy to afford facilities
to our citizens to become the owners at low and moderate rates of
freeholds of their own instead of being the tenants and dependents of
others. If it be apprehended that these lands if reduced in price would
be secured in large quantities by speculators or capitalists, the sales
may be restricted in limited quantities to actual settlers or persons
purchasing for purposes of cultivation.

In my last annual message I submitted for the consideration of Congress
the present system of managing the mineral lands of the United States,
and recommended that they should be brought into market and sold upon
such terms and under such restrictions as Congress might prescribe. By
the act of the 11th of July last "the reserved lead mines and contiguous
lands in the States of Illinois and Arkansas and Territories of
Wisconsin and Iowa" were authorized to be sold. The act is confined in
its operation to "lead mines and contiguous lands." A large portion of
the public lands, containing copper and other ores, is represented to be
very valuable, and I recommend that provision be made authorizing the
sale of these lands upon such terms and conditions as from their
supposed value may in the judgment of Congress be deemed advisable,
having due regard to the interests of such of our citizens as may be
located upon them.

It will be important during your present session to establish a
Territorial government and to extend the jurisdiction and laws of the
United States over the Territory of Oregon. Our laws regulating trade
and intercourse with the Indian tribes east of the Rocky Mountains
should be extended to the Pacific Ocean; and for the purpose of
executing them and preserving friendly relations with the Indian tribes
within our limits, an additional number of Indian agencies will be
required, and should be authorized by law. The establishment of
custom-houses and of post-offices and post-roads and provision for the
transportation of the mail on such routes as the public convenience will
suggest require legislative authority. It will be proper also to
establish a surveyor-general's office in that Territory and to make the
necessary provision for surveying the public lands and bringing them
into market. As our citizens who now reside in that distant region have
been subjected to many hardships, privations, and sacrifices in their
emigration, and by their improvements have enhanced the value of the
public lands in the neighborhood of their settlements, it is recommended
that liberal grants be made to them of such portions of these lands as
they may occupy, and that similar grants or rights of preemption be made
to all who may emigrate thither within a limited period, prescribed by
law.

The report of the Secretary of War contains detailed information
relative to the several branches of the public service connected with
that Department. The operations of the Army have been of a satisfactory
and highly gratifying character. I recommend to your early and favorable
consideration the measures proposed by the Secretary of War for speedily
filling up the rank and file of the Regular Army, for its greater
efficiency in the field, and for raising an additional force to serve
during the war with Mexico.

Embarrassment is likely to arise for want of legal provision authorizing
compensation to be made to the agents employed in the several States and
Territories to pay the Revolutionary and other pensioners the amounts
allowed them by law. Your attention is invited to the recommendations of
the Secretary of War on this subject. These agents incur heavy
responsibilities and perform important duties, and no reason exists why
they should not be placed on the same footing as to compensation with
other disbursing officers.

Our relations with the various Indian tribes continue to be of a pacific
character. The unhappy dissensions which have existed among the
Cherokees for many years past have been healed. Since my last annual
message important treaties have been negotiated with some of the tribes,
by which the Indian title to large tracts of valuable land within the
limits of the States and Territories has been extinguished and
arrangements made for removing them to the country west of the
Mississippi. Between 3,000 and 4,000 of different tribes have been
removed to the country provided for them by treaty stipulations, and
arrangements have been made for others to follow.

In our intercourse with the several tribes particular attention has been
given to the important subject of education. The number of schools
established among them has been increased, and additional means provided
not only for teaching them the rudiments of education, but of
instructing them in agriculture and the mechanic arts.

I refer you to the report of the Secretary of the Navy for a
satisfactory view of the operations of the Department under his charge
during the past year. It is gratifying to perceive that while the war
with Mexico has rendered it necessary to employ an unusual number of our
armed vessels on her coasts, the protection due to our commerce in other
quarters of the world has not proved insufficient. No means will be
spared to give efficiency to the naval service in the prosecution of the
war; and I am happy to know that the officers and men anxiously desire
to devote themselves to the service of their country in any enterprise,
however difficult of execution.

I recommend to your favorable consideration the proposition to add to
each of our foreign squadrons an efficient sea steamer, and, as
especially demanding attention, the establishment at Pensacola of the
necessary means of repairing and refitting the vessels of the Navy
employed in the Gulf of Mexico.

There are other suggestions in the report which deserve and I doubt not
will receive your consideration.

The progress and condition of the mail service for the past year are
fully presented in the report of the Postmaster-General. The revenue for
the year ending on the 30th of June last amounted to $3,487,199, which
is $802,642.45 less than that of the preceding year. The payments for
that Department during the same time amounted to $4,084,297.22. Of this
sum $597,097.80 have been drawn from the Treasury. The disbursements for
the year were $236,434.77 less than those of the preceding year. While
the disbursements have been thus diminished, the mail facilities have
been enlarged by new mail routes of 5,739 miles, an increase of
transportation of 1,764,145 miles, and the establishment of 418 new
post-offices. Contractors, postmasters, and others engaged in this
branch of the service have performed their duties with energy and
faithfulness deserving commendation. For many interesting details
connected with the operations of this establishment you are referred to
the report of the Postmaster-General, and his suggestions for improving
its revenues are recommended to your favorable consideration. I repeat
the opinion expressed in my last annual message that the business of
this Department should be so regulated that the revenues derived from it
should be made to equal the expenditures, and it is believed that this
may be done by proper modifications of the present laws, as suggested in
the report of the Postmaster-General, without changing the present rates
of postage.

With full reliance upon the wisdom and patriotism of your deliberations,
it will be my duty, as it will be my anxious desire, to cooperate with
you in every constitutional effort to promote the welfare and maintain
the honor of our common country.

JAMES K. POLK

***

State of the Union Address
James Polk
December 7, 1847

Fellow-Citizens of the Senate and of the House of Representatives:

The annual meeting of Congress is always an interesting event. The
representatives of the States and of the people come fresh from their
constituents to take counsel together for the common good.

After an existence of near three-fourths of a century as a free and
independent Republic, the problem no longer remains to be solved whether
man is capable of self-government. The success of our admirable system
is a conclusive refutation of the theories of those in other countries
who maintain that a "favored few" are born to rule and that the mass of
mankind must be governed by force. Subject to no arbitrary or hereditary
authority, the people are the only sovereigns recognized by our
Constitution.

Numerous emigrants, of every lineage and language, attracted by the
civil and religious freedom we enjoy and by our happy condition,
annually crowd to our shores, and transfer their heart, not less than
their allegiance, to the country whose dominion belongs alone to the
people. No country has been so much favored, or should acknowledge with
deeper reverence the manifestations of the divine protection. An all
wise Creator directed and guarded us in our infant struggle for freedom
and has constantly watched over our surprising progress until we have
become one of the great nations of the earth.

It is in a country thus favored, and under a Government in which the
executive and legislative branches hold their authority for limited
periods alike from the people, and where all are responsible to their
respective constituencies, that it is again my duty to communicate with
Congress upon the state of the Union and the present condition of public
affairs.

During the past year the most gratifying proofs are presented that our
country has been blessed with a widespread and universal prosperity.
There has been no period since the Government was founded when all the
industrial pursuits of our people have been more successful or when
labor in all branches of business has received a fairer or better
reward. From our abundance we have been enabled to perform the pleasing
duty of furnishing food for the starving millions of less favored
countries.

In the enjoyment of the bounties of Providence at home such as have
rarely fallen to the lot of any people, it is cause of congratulation
that our intercourse with all the powers of the earth except Mexico
continues to be of an amicable character.

It has ever been our cherished policy to cultivate peace and good will
with all nations, and this policy has been steadily pursued by me. No
change has taken place in our relations with Mexico since the
adjournment of the last Congress. The war in which the United States
were forced to engage with the Government of that country still
continues.

I deem it unnecessary, after the full exposition of them contained in my
message of the 11th of May, 1846, and in my annual message at the
commencement of the session of Congress in December last, to reiterate
the serious causes of complaint which we had against Mexico before she
commenced hostilities.

It is sufficient on the present occasion to say that the wanton
violation of the rights of person and property of our citizens committed
by Mexico, her repeated acts of bad faith through a long series of
years, and her disregard of solemn treaties stipulating for indemnity to
our injured citizens not only constituted ample cause of war on our
part, but were of such an aggravated character as would have justified
us before the whole world in resorting to this extreme remedy. With an
anxious desire to avoid a rupture between the two countries, we forbore
for years to assert our clear rights by force, and continued to seek
redress for the wrongs we had suffered by amicable negotiation in the
hope that Mexico might yield to pacific counsels and the demands of
justice. In this hope we were disappointed. Our minister of peace sent
to Mexico was insultingly rejected. The Mexican Government refused even
to hear the terms of adjustment which he was authorized to propose, and
finally, under wholly unjustifiable pretexts, involved the two countries
in war by invading the territory of the State of Texas, striking the
first blow, and shedding the blood of our citizens on our own soil.

Though the United States were the aggrieved nation, Mexico commenced the
war, and we were compelled in self-defense to repel the invader and to
vindicate the national honor and interests by prosecuting it with vigor
until we could obtain a just and honorable peace. On learning that
hostilities had been commenced by Mexico I promptly communicated that
fact, accompanied with a succinct statement of our other causes of
complaint against Mexico, to Congress, and that body, by the act of the
13th of May, 1846, declared that "by the act of the Republic of Mexico a
state of war exists between that Government and the United States." This
act declaring "the war to exist by the act of the Republic of Mexico,"
and making provision for its prosecution "to a speedy and successful
termination," was passed with great unanimity by Congress, there being
but two negative votes in the Senate and but fourteen in the House of
Representatives.

The existence of the war having thus been declared by Congress, it
became my duty under the Constitution and the laws to conduct and
prosecute it. This duty has been performed, and though at every stage of
its progress I have manifested a willingness to terminate it by a just
peace, Mexico has refused to accede to any terms which could be accepted
by the United States consistently with the national honor and interest.

The rapid and brilliant successes of our arms and the vast extent of the
enemy's territory which had been overrun and conquered before the close
of the last session of Congress were fully known to that body. Since
that time the war has been prosecuted with increased energy, and, I am
gratified to state, with a success which commands universal admiration..
History presents no parallel of so many glorious victories achieved by
any nation within so short a period. Our Army, regulars and volunteers,
have covered themselves with imperishable honors. Whenever and wherever
our forces have encountered the enemy, though he was in vastly superior
numbers and often intrenched in fortified positions of his own selection
and of great strength, he has been defeated. Too much praise can not be
bestowed upon our officers and men, regulars and volunteers, for their
gallantry, discipline, indomitable courage, and perseverance, all
seeking the post of danger and vying with each other in deeds of noble
daring.

While every patriot's heart must exult and a just national pride animate
every bosom in beholding the high proofs of courage, consummate military
skill, steady discipline, and humanity to the vanquished enemy exhibited
by our gallant Army, the nation is called to mourn over the loss of many
brave officers and soldiers, who have fallen in defense of their
country's honor and interests. The brave dead met their melancholy fate
in a foreign land, nobly discharging their duty, and with their
country's flag waving triumphantly in the face of the foe. Their
patriotic deeds are justly appreciated, and will long be remembered by
their grateful countrymen. The parental care of the Government they
loved and served should be extended to their surviving families.

Shortly after the adjournment of the last session of Congress the
gratifying intelligence was received of the signal victory of Buena
Vista, and of the fall of the city of Vera Cruz, and with it the strong
castle of San Juan de Ulloa, by which it was defended. Believing that
after these and other successes so honorable to our arms and so
disastrous to Mexico the period was propitious to afford her another
opportunity, if she thought proper to embrace it, to enter into
negotiations for peace, a commissioner was appointed to proceed to the
headquarters of our Army with full powers to enter upon negotiations and
to conclude a just and honorable treaty of peace. He was not directed to
make any new overtures of peace, but was the bearer of a dispatch from
the Secretary of State of the United States to the minister of foreign
affairs of Mexico, in reply to one received from the latter of the 22d
of February, 1847, in which the Mexican Government was informed of his
appointment and of his presence at the headquarters of our Army, and
that he was invested with full powers to conclude a definitive treaty of
peace whenever the Mexican Government might signify a desire to do so.
While I was unwilling to subject the United States to another indignant
refusal, I was yet resolved that the evils of the war should not be
protracted a day longer than might be rendered absolutely necessary by
the Mexican Government.

Care was taken to give no instructions to the commissioner which could
in any way interfere with our military operations or relax our energies
in the prosecution of the war. He possessed no authority in any manner
to control these operations. He was authorized to exhibit his
instructions to the general in command of the Army, and in the event of
a treaty being concluded and ratified on the part of Mexico he was
directed to give him notice of that fact. On the happening of such
contingency, and on receiving notice thereof, the general in command was
instructed by the Secretary of War to suspend further active military
operations until further orders. These instructions were given with a
view to intermit hostilities until the treaty thus ratified by Mexico
could be transmitted to Washington and receive the action of the
Government of the United States. The commissioner was also directed on
reaching the Army to deliver to the general in command the dispatch
which he bore from the Secretary of State to the minister of foreign
affairs of Mexico, and on receiving it the general was instructed by the
Secretary of War to cause it to be transmitted to the commander of the
Mexican forces, with a quest that it might be communicated to his
Government. The commissioner did not reach the headquarters of the Army
until after another brilliant victory had crowned our arms at Cerro
Gordo. The dispatch which he bore from the Secretary of War to the
general in command of the Army was received by that officer, then at
Jalapa, on the 7th of May, 1847, together with the dispatch from the
Secretary of State to the minister of foreign affairs of Mexico, having
been transmitted to him from Vera Cruz. The commissioner arrived at the
headquarters of the Army a few days afterwards. His presence with the
Army and his diplomatic character were made known to the Mexican
Government from Puebla on the 12th of June, 1847, by the transmission of
the dispatch from the Secretary of State to the minister of foreign
affairs of Mexico.

Many weeks elapsed after its receipt, and no overtures were made nor was
any desire expressed by the Mexican Government to enter into
negotiations for peace.

Our Army pursued its march upon the capital, and as it approached it was
met by formidable resistance. Our forces first encountered the enemy,
and achieved signal victories in the severely contested battles of
Contreras and Churubusco. It was not until after these actions had
resulted in decisive victories and the capital of the enemy was within
our power that the Mexican Government manifested any disposition to
enter into negotiations for peace, and even then, as events have proved,
there is too much reason to believe they were insincere, and that in
agreeing to go through the forms of negotiation the object was to gain
time to strengthen the defenses of their capital and to prepare for
fresh resistance.

The general in command of the Army deemed it expedient to suspend
hostilities temporarily by entering into an armistice with a view to the
opening of negotiations. Commissioners were appointed on the part of
Mexico to meet the commissioner on the part of the United States. The
result of the conferences which took place between these functionaries
of the two Governments was a failure to conclude a treaty of peace. The
commissioner of the United States took with him the project of a treaty
already prepared, by the terms of which the indemnity required by the
United States was a cession of territory.

It is well known that the only indemnity which it is in the power of
Mexico to make in satisfaction of the just and long-deferred claims of
our citizens against her and the only means by which she can reimburse
the United States for the expenses of the war is a cession to the United
States of a portion of her territory. Mexico has no money to pay, and no
other means of making the required indemnity. If we refuse this, we can
obtain nothing else. To reject indemnity by refusing to accept a cession
of territory would be to abandon all our just demands, and to wage the
war, bearing all its expenses, without a purpose or definite object.

A state of war abrogates treaties previously existing between the
belligerents and a treaty of peace puts an end to all claims for
indemnity for tortious acts committed under the authority of one
government against the citizens or subjects of another unless they are
provided for in its stipulations. A treaty of peace which would
terminate the existing war without providing for indemnity would enable
Mexico, the acknowledged debtor and herself the aggressor in the war, to
relieve herself from her just liabilities. By such a treaty our citizens
who hold just demands against her would have no remedy either against
Mexico or their own Government. Our duty to these citizens must forever
prevent such a peace, and no treaty which does not provide ample means
of discharging these demands can receive my sanction.

A treaty of peace should settle all existing differences between the two
countries. If an adequate cession of territory should be made by such a
treaty, the United States should release Mexico from all her liabilities
and assume their payment to our own citizens. If instead of this the
United States were to consent to a treaty by which Mexico should again
engage to pay the heavy amount of indebtedness which a just indemnity to
our Government and our citizens would impose on her, it is notorious
that she does not possess the means to meet such an undertaking. From
such a treaty no result could be anticipated but the same irritating
disappointments which have heretofore attended the violations of similar
treaty stipulations on the part of Mexico. Such a treaty would be but a
temporary cessation of hostilities, without the restoration of the
friendship and good understanding which should characterize the future
intercourse between the two countries.

That Congress contemplated the acquisition of territorial indemnity when
that body made provision for the prosecution of the war is obvious.
Congress could not have meant when, in May, 1846, they appropriated
$10,000,000 and authorized the President to employ the militia and naval
and military forces of the United States and to accept the services of
50,000 volunteers to enable him to prosecute the war, and when, at their
last session, and after our Army had invaded Mexico, they made
additional appropriations and authorized the raising of additional
troops for the same purpose, that no indemnity was to be obtained from
Mexico at the conclusion of the war; and yet it was certain that if no
Mexican territory was acquired no indemnity could be obtained. It is
further manifest that Congress contemplated territorial indemnity from
the fact that at their last session an act was passed, upon the
Executive recommendation, appropriating $3,000,000 with that express
object. This appropriation was made "to enable the President to conclude
a treaty of peace, limits, and boundaries with the Republic of Mexico,
to be used by him in the event that said treaty, when signed by the
authorized agents of the two Governments and duly ratified by Mexico,
shall call for the expenditure of the same or any part thereof." The
object of asking this appropriation was distinctly stated in the several
messages on the subject which I communicated to Congress. Similar
appropriations made in 1803 and 1806, which were referred to, were
intended to be applied in part consideration for the cession of
Louisiana and the Floridas. In like manner it was anticipated that in
settling the terms of a treaty of "limits and boundaries" with Mexico a
cession of territory estimated to be of greater value than the amount of
our demands against her might be obtained, and that the prompt payment
of this sum in part consideration for the territory ceded, on the
conclusion of a treaty and its ratification on her part, might be an
inducement with her to make such a cession of territory as would be
satisfactory to the United States; and although the failure to conclude
such a treaty has rendered it unnecessary to use any part of the
$3,000,000 appropriated by that act, and the entire sum remains in the
Treasury, it is still applicable to that object should the contingency
occur making such application proper.

The doctrine of no territory is the doctrine of no indemnity, and if
sanctioned would be a public acknowledgment that our country was wrong
and that the war declared by Congress with extraordinary unanimity was
unjust and should be abandoned--an admission unfounded in fact and
degrading to the national character.

The terms of the treaty proposed by the United States were not only just
to Mexico, but, considering the character and amount of our claims, the
unjustifiable and unprovoked commencement of hostilities by her, the
expenses of the war to which we have been subjected, and the success
which had attended our arms, were deemed to be of a most liberal
character.

The commissioner of the United States was authorized to agree to the
establishment of the Rio Grande as the boundary from its entrance into
the Gulf to its intersection with the southern boundary of New Mexico,
in north latitude about 32 degree, and to obtain a cession to the United
States of the Provinces of New Mexico and the Californias and the
privilege of the right of way across the Isthmus of Tehuantepec. The
boundary of the Rio Grande and the cession to the United States of New
Mexico and Upper California constituted an ultimatum which our
commissioner was under no circumstances to yield.

That it might be manifest, not only to Mexico, but to all other nations,
that the United States were not disposed to take advantage of a feeble
power by insisting upon wrestling from her all the other Provinces,
including many of her principal towns and cities, which we had conquered
and held in our military occupation but were willing to conclude a
treaty in a spirit of liberality, our commissioner was authorized to
stipulate for the restoration to Mexico of all our other conquests.

As the territory to be acquired by the boundary proposed might be
estimated to be of greater value than a fair equivalent for our just
demands, our commissioner was authorized to stipulate for the payment of
such additional pecuniary consideration as was deemed reasonable.

The terms of a treaty proposed by the Mexican commissioners were wholly
inadmissible. They negotiated as if Mexico were the victorious, and not
the vanquished, party. They must have known that their ultimatum could
never be accepted. It required the United States to dismember Texas by
surrendering to Mexico that part of the territory of that State lying
between the Nueces and the Rio Grande, included within her limits by her
laws when she was an independent republic, and when she was annexed to
the United States and admitted by Congress as one of the States of our
Union. It contained no provision for the payment by Mexico of the just
claims of our citizens. It required indemnity to Mexican citizens for
injuries they may have sustained by our troops in the prosecution of the
war. It demanded the right for Mexico to levy and collect the Mexican
tariff of duties on goods imported into her ports while in our military
occupation during the war, and the owners of which had paid to officers
of the United States the military contributions which had been levied
upon them; and it offered to cede to the United States, for a pecuniary
consideration, that part of Upper California lying north of latitude 37
. Such were the unreasonable terms proposed by the Mexican
commissioners.

The cession to the United States by Mexico of the Provinces of New
Mexico and the Californias, as proposed by the commissioner of the
United States, it was believed would be more in accordance with the
convenience and interests of both nations than any other cession of
territory which it was probable Mexico could be induced to make.

It is manifest to all who have observed the actual condition of the
Mexican Government for some years past and at present that if these
Provinces should be retained by her she could not long continue to hold
and govern them. Mexico is too feeble a power to govern these Provinces,
lying as they do at a distance of more than 1,000 miles from her
capital, and if attempted to be retained by her they would constitute
but for a short time even nominally a part of her dominions. This would
be especially the case with Upper California.

The sagacity of powerful European nations has long since directed their
attention to the commercial importance of that Province, and there can
be little doubt that the moment the United States shall relinquish their
present occupation of it and their claim to it as indemnity an effort
would be made by some foreign power to possess it, either by conquest or
by purchase. If no foreign government should acquire it in either of
these modes, an independent revolutionary government would probably be
established by the inhabitants and such foreigners as may remain in or
remove to the country as soon as it shall be known that the United
States have abandoned it. Such a government would be too feeble long to
maintain its separate independent existence, and would finally become
annexed to or be a dependent colony of some more powerful state. Should
any foreign government attempt to possess it as a colony, or otherwise
to incorporate it with itself, the principle avowed by President Monroe
in 1824, and reaffirmed in my first annual message, that no foreign
power shall with our consent be permitted to plant or establish any new
colony or dominion on any part of the North American continent must be
maintained. In maintaining this principle and in resisting its invasion
by any foreign power we might be involved in other wars more expensive
and more difficult than that in which we are now engaged. The Provinces
of New Mexico and the Californias are contiguous to the territories of
the United States, and if brought under the government of our laws their
resources--mineral, agricultural, manufacturing, and commercial--would
soon be developed.

Upper California is bounded on the north by our Oregon possessions, and
if held by the United States would soon be settled by a hardy,
enterprising, and intelligent portion of our population. The Bay of San
Francisco and other harbors along the Californian coast would afford
shelter for our Navy, for our numerous whale ships, and other merchant
vessels employed in the Pacific Ocean, and would in a short period
become the marts of an extensive and profitable commerce with China and
other countries of the East.

These advantages, in which the whole commercial world would participate,
would at once be secured to the United States by the cession of this
territory; while it is certain that as long as it remains a part of the
Mexican dominions they can be enjoyed neither by Mexico herself nor by
any other nation.

New Mexico is a frontier Province, and has never been of any
considerable value to Mexico. From its locality it is naturally
connected with our Western settlements. The territorial limits of the
State of Texas, too, as defined by her laws before her admission into
our Union, embrace all that portion of New Mexico lying east of the Rio
Grande, while Mexico still claims to hold this territory as a part of
her dominions. The adjustment of this question of boundary is important.

There is another consideration which induced the belief that the Mexican
Government might even desire to place this Province under the protection
of the Government of the United States. Numerous bands of fierce and
warlike savages wander over it and upon its borders. Mexico has been and
must continue to be too feeble to restrain them from committing
depredations, robberies, and murders, not only upon the inhabitants of
New Mexico itself, but upon those of the other northern States of
Mexico. It would be a blessing to all these northern States to have
their citizens protected against them by the power of the United States.
At this moment many Mexicans, principally females and children, are in
captivity among them. If New Mexico were held and governed by the United
States, we could effectually prevent these tribes from committing such
outrages, and compel them to release these captives and restore them to
their families and friends.

In proposing to acquire New Mexico and the Californias, it was known
that but an inconsiderable portion of the Mexican people would be
transferred with them, the country embraced within these Provinces being
chiefly an uninhabited region.

These were the leading considerations which induced me to authorize the
terms of peace which were proposed to Mexico. They were rejected, and,
negotiations being at an end, hostilities were renewed. An assault was
made by our gallant Army upon the strongly fortified places near the
gates of the City of Mexico and upon the city itself, and after several
days of severe conflict the Mexican forces, vastly superior in number to
our own, were driven from the city, and it was occupied by our troops.

Immediately after information was received of the unfavorable result of
the negotiations, believing that his continued presence with the Army
could be productive of no good, I determined to recall our commissioner.
A dispatch to this effect was transmitted to him on the 6th of October
last. The Mexican Government will be informed of his recall, and that in
the existing state of things I shall not deem it proper to make any
further overtures of peace, but shall be at all times ready to receive
and consider any proposals which may be made by Mexico.

Since the liberal proposition of the United States was authorized to be
made, in April last, large expenditures have been incurred and the
precious blood of many of our patriotic fellow-citizens has been shed in
the prosecution of the war. This consideration and the obstinate
perseverance of Mexico in protracting the war must influence the terms
of peace which it may be deemed proper hereafter to accept. Our arms
having been everywhere victorious, having subjected to our military
occupation a large portion of the enemy's country, including his
capital, and negotiations for peace having failed, the important
questions arise, in what manner the war ought to be prosecuted and what
should be our future policy. I can not doubt that we should secure and
render available the conquests which we have already made, and that with
this view we should hold and occupy by our naval and military forces all
the ports, towns, cities, and Provinces now in our occupation or which
may hereafter fall into our possession; that we should press forward our
military operations and levy such military contributions on the enemy as
may, as far as practicable, defray the future expenses of the war.

Had the Government of Mexico acceded to the equitable and liberal terms
proposed, that mode of adjustment would have been preferred, Mexico
having declined to do this and failed to offer any other terms which
could be accepted by the United States, the national honor, no less than
the public interests, requires that the war should be prosecuted with
increased energy and power until a just and satisfactory peace can be
obtained. In the meantime, as Mexico refuses all indemnity, we should
adopt measures to indemnify ourselves by appropriating permanently a
portion of her territory. Early after the commencement of the war New
Mexico and the Californias were taken possession of by our forces. Our
military and naval commanders were ordered to conquer and hold them,
subject to be disposed of by a treaty of peace.

These Provinces are now in our undisputed occupation, and have been so
for many months, all resistance on the part of Mexico having ceased
within their limits. I am satisfied that they should never be
surrendered to Mexico. Should Congress concur with me in this opinion,
and that they should be retained by the United States as indemnity, I
can perceive no good reason why the civil jurisdiction and laws of the
United States should not at once be extended over them. To wait for a
treaty of peace such as we are willing to make, by which our relations
toward them would not be changed, can not be good policy; whilst our own
interest and that of the people inhabiting them require that a stable,
responsible, and free government under our authority should as soon as
possible be established over them. Should Congress, therefore, determine
to hold these Provinces permanently, and that they shall hereafter be
considered as constituent parts of our country, the early establishment
of Territorial governments over them will be important for the more
perfect protection of persons and property; and I recommend that such
Territorial governments be established. It will promote peace and
tranquillity among the inhabitants, by allaying all apprehension that
they may still entertain of being again subjected to the jurisdiction of
Mexico. I invite the early and favorable consideration of Congress to
this important subject.

Besides New Mexico and the Californias, there are other Mexican
Provinces which have been reduced to our possession by conquest. These
other Mexican Provinces are now governed by our military and naval
commanders under the general authority which is conferred upon a
conqueror by the laws of war. They should continue to be held, as a
means of coercing Mexico to accede to just terms of peace. Civil as well
as military officers are required to conduct such a government. Adequate
compensation, to be drawn from contributions levied on the enemy, should
be fixed by law for such officers as may be thus employed. What further
provision may become necessary and what final disposition it may be
proper to make of them must depend on the future progress of the war and
the course which Mexico may think proper hereafter to pursue.

With the views I entertain I can not favor the policy which has been
suggested, either to withdraw our Army altogether or to retire to a
designated line and simply hold and defend it. To withdraw our Army
altogether from the conquests they have made by deeds of unparalleled
bravery, and at the expense of so much blood and treasure, in a just war
on our part, and one which, by the act of the enemy, we could not
honorably have avoided, would be to degrade the nation in its own
estimation and in that of the world. To retire to a line and simply hold
and defend it would not terminate the war. On the contrary, it would
encourage Mexico to persevere and tend to protract it indefinitely. It
is not to be expected that Mexico, after refusing to establish such a
line as a permanent boundary when our victorious Army are in possession
of her capital and in the heart of her country, would permit us to hold
it without resistance. That she would continue the war, and in the most
harassing and annoying forms, there can be no doubt. A border warfare of
the most savage character, extending over a long line, would be
unceasingly waged. It would require a large army to be kept constantly
in the field, stationed at posts and garrisons along such a line, to
protect and defend it. The enemy, relieved from the pressure of our arms
on his coasts and in the populous parts of the interior, would direct
his attention to this line, and, selecting an isolated post for attack,
would concentrate his forces upon it. This would be a condition of
affairs which the Mexicans, pursuing their favorite system of guerrilla
warfare, would probably prefer to any other. Were we to assume a
defensive attitude on such a line, all the advantages of such a state of
war would be on the side of the enemy. We could levy no contributions
upon him, or in any other way make him feel the pressure of the war, but
must remain inactive and await his approach, being in constant
uncertainty at what point on the line or at what time he might make an
assault. He may assemble and organize an overwhelming force in the
interior on his own side of the line, and, concealing his purpose, make
a sudden assault upon some one of our posts so distant from any other as
to prevent the possibility of timely succor or reenforcements, and in
this way our gallant Army would be exposed to the danger of being cut
off in detail; or if by their unequaled bravery and prowess everywhere
exhibited during this war they should repulse the enemy, their numbers
stationed at any one post may be too small to pursue him. If the enemy
be repulsed in one attack, he would have nothing to do but to retreat to
his own side of the line, and, being in no fear of a pursuing army, may
reenforce himself at leisure for another attack on the same or some
other post. He may, too, cross the line between our posts, make rapid
incursions into the country which we hold, murder the inhabitants,
commit depredations on them, and then retreat to the interior before a
sufficient force can be concentrated to pursue him. Such would probably
be the harassing character of a mere defensive war on our part. If our
forces when attacked, or threatened with attack, be permitted to cross
the line, drive back the enemy, and conquer him, this would be again to
invade the enemy's country after having lost all the advantages of the
conquests we have already made by having voluntarily abandoned them. To
hold such a line successfully and in security it is far from being
certain that it would not require as large an army as would be necessary
to hold all the conquests we have already made and to continue the
prosecution of the war in the heart of the enemy's country. It is also
far from being certain that the expenses of the war would be diminished
by such a policy. I am persuaded that the best means of vindicating the
national honor and interest and of bringing the war to an honorable
close will be to prosecute it with increased energy and power in the
vital parts of the enemy's country.

In my annual message to Congress of December last I declared that--

The war has not been waged with a view to conquest, but, having been
commenced by Mexico, it has been carried into the enemy's country and
will be vigorously prosecuted there with a view to obtain an honorable
peace, and thereby secure ample indemnity for the expenses of the war,
as well as to our much-injured citizens, who hold large pecuniary
demands against Mexico.

Such, in my judgment, continues to be our true policy; indeed, the only
policy which will probably secure a permanent peace.

It has never been contemplated by me, as an object of the war, to make a
permanent conquest of the Republic of Mexico or to annihilate her
separate existence as an independent nation. On the contrary, it has
ever been my desire that she should maintain her nationality, and under
a good government adapted to her condition be a free, independent, and
prosperous Republic. The United States were the first among the nations
to recognize her independence, and have always desired to be on terms of
amity and good neighborhood with her. This she would not suffer. By her
own conduct we have been compelled to engage in the present war. In its
prosecution we seek not her overthrow as a nation, but in vindicating
our national honor we seek to obtain redress for the wrongs she has done
us and indemnity for our just demands against her. We demand an
honorable peace, and that peace must bring with it indemnity for the
past and security for the future. Hitherto Mexico has refused all
accommodation by which such a peace could be obtained.

Whilst our armies have advanced from victory to victory from the
commencement of the war, it has always been with the olive branch of
peace in their hands, and it has been in the power of Mexico at every
step to arrest hostilities by accepting it.

One great obstacle to the attainment of peace has undoubtedly arisen
from the fact that Mexico has been so long held in subjection by one
faction or military usurper after another, and such has been the
condition of insecurity in which their successive governments have been
placed that each has been deterred from making peace lest for this very
cause a rival faction might expel it from power. Such was the fate of
President Herrera's administration in 1845 for being disposed even to
listen to the overtures of the United States to prevent the war, as is
fully confirmed by an official correspondence which took place in the
month of August last between him and his Government, a copy of which is
herewith communicated. "For this cause alone the revolution which
displaced him from power was set on foot" by General Paredes. Such may
be the condition of insecurity of the present Government.

There can be no doubt that the peaceable and well-disposed inhabitants
of Mexico are convinced that it is the true interest of their country to
conclude an honorable peace with the United States, but the apprehension
of becoming the victims of some military faction or usurper may have
prevented them from manifesting their feelings by any public act. The
removal of any such apprehension would probably cause them to speak
their sentiments freely and to adopt the measures necessary for the
restoration of peace. With a people distracted and divided by contending
factions and a Government subject to constant changes by successive
revolutions, the continued successes of our arms may fail to secure a
satisfactory peace. In such event it may become proper for our
commanding generals in the field to give encouragement and assurances of
protection to the friends of peace in Mexico in the establishment and
maintenance of a free republican government of their own choice, able
and willing to conclude a peace which would be just to them and secure
to us the indemnity we demand. This may become the only mode of
obtaining such a peace. Should such be the result, the war which Mexico
has forced upon us would thus be converted into an enduring blessing to
herself. After finding her torn and distracted by factions, and ruled by
military usurpers, we should then leave her with a republican government
in the enjoyment of real independence and domestic peace and prosperity,
performing all her relative duties in the great family of nations and
promoting her own happiness by wise laws and their faithful execution.

If, after affording this encouragement and protection, and after all the
persevering and sincere efforts we have made from the moment Mexico
commenced the war, and prior to that time, to adjust our differences
with her, we shall ultimately fail, then we shall have exhausted all
honorable means in pursuit of peace, and must continue to occupy her
country with our troops, taking the full measure of indemnity into our
own hands, and must enforce the terms which our honor demands.

To act otherwise in the existing state of things in Mexico, and to
withdraw our Army without a peace, would not only leave all the wrongs
of which we complain unredressed, but would be the signal for new and
fierce civil dissensions and new revolutions--all alike hostile to
peaceful relations with the United States. Besides, there is danger, if
our troops were withdrawn before a peace was conducted, that the Mexican
people, wearied with successive revolutions and deprived of protection
for their persons and property, might at length be inclined to yield to
foreign influences and to cast themselves into the arms of some European
monarch for protection from the anarchy and suffering which would ensue.
This, for our own safety and in pursuance of our established policy, we
should be compelled to resist. We could never consent that Mexico should
be thus converted into a monarchy governed by a foreign prince.

Mexico is our near neighbor, and her boundaries are coterminous with our
own through the whole extent across the North American continent, from
ocean to ocean. Both politically and commercially we have the deepest
interest in her regeneration and prosperity. Indeed, it is impossible
that, with any just regard to our own safety, we can ever become
indifferent to her fate.

It may be that the Mexican Government and people have misconstrued or
misunderstood our forbearance and our objects in desiring to conclude an
amicable adjustment of the existing differences between the two
countries. They may have supposed that we would submit to terms
degrading to the nation, or they may have drawn false inferences from
the supposed division of opinion in the United States on the subject of
the war, and may have calculated to gain much by protracting it, and,
indeed, that we might ultimately abandon it altogether without insisting
on any indemnity, territorial or otherwise. Whatever may be the false
impressions under which they have acted, the adoption and prosecution of
the energetic policy proposed must soon undeceive them.

In the future prosecution of the war the enemy must be made to feel its
pressure more than they have heretofore done. At its commencement it was
deemed proper to conduct it in a spirit of forbearance and liberality.
With this end in view, early measures were adopted to conciliate, as far
as a state of war would permit, the mass of the Mexican population; to
convince them that the war was waged, not against the peaceful
inhabitants of Mexico, but against their faithless Government, which had
commenced hostilities; to remove from their minds the false impressions
which their designing and interested rulers had artfully attempted to
make, that the war on our part was one of conquest, that it was a war
against their religion and their churches, which were to be desecrated
and overthrown, and that their rights of person and private property
would be violated. To remove these false impressions, our commanders in
the field were directed scrupulously to respect their religion, their
churches, and their church property, which were in no manner to be
violated; they were directed also to respect the rights of persons and
property of all who should not take up arms against us.

Assurances to this effect were given to the Mexican people by Major
General Taylor in a proclamation issued in pursuance of instructions
from the Secretary of War in the month of June, 1846, and again by
Major-General Scott, who acted upon his own convictions of the propriety
of issuing it, in a proclamation of the 11th of May, 1847. In this
spirit of liberality and conciliation, and with a view to prevent the
body of the Mexican population from taking up arms against us, was the
war conducted on our part. Provisions and other supplies furnished to
our Army by Mexican citizens were paid for at fair and liberal prices,
agreed upon by the parties. After the lapse of a few months it became
apparent that these assurances and this mild treatment had failed to
produce the desired effect upon the Mexican population. While the war
had been conducted on our part according to the most humane and liberal
principles observed by civilized nations, it was waged in a far
different spirit on the part of Mexico. Not appreciating our
forbearance, the Mexican people generally became hostile to the United
States, and availed themselves of every opportunity to commit the most
savage excesses upon our troops. Large numbers of the population took up
arms, and, engaging in guerrilla warfare, robbed and murdered in the
most cruel manner individual soldiers or small parties whom accident or
other causes had separated from the main body of our Army; bands of
guerrilleros and robbers infested the roads, harassed our trains, and
whenever it was in their power cut off our supplies.

The Mexicans having thus shown themselves to be wholly incapable of
appreciating our forbearance and liberality, it was deemed proper to
change the manner of conducting the war, by making them feel its
pressure according to the usages observed under similar circumstances by
all other civilized nations.

Accordingly, as early as the 22d of September, 1846, instructions were
given by the Secretary of War to Major-General Taylor to "draw supplies"
for our Army "from the enemy without paying for them, and to require
contributions for its support, if in that way he was satisfied he could
get abundant supplies for his forces." In directing the execution of
these instructions much was necessarily left to the discretion of the
commanding officer, who was best acquainted with the circumstances by
which he was surrounded, the wants of the Army, and the practicability
of enforcing the measure. General Taylor, on the 26th of October, 1846,
replied from Monterey that "it would have been impossible hitherto, and
is so now, to sustain the Army to any extent by forced contributions of
money or supplies." For the reasons assigned by him, he did not adopt
the policy of his instructions, but declared his readiness to do so
"should the Army in its future operations reach a portion of the country
which may be made to supply the troops with advantage." He continued to
pay for the articles of supply which were drawn from the enemy's
country.

Similar instructions were issued to Major-General Scott on the 3d of
April, 1847, who replied from Jalapa on the 20th of May, 1847, that if
it be expected "that the Army is to support itself by forced
contributions levied upon the country we may ruin and exasperate the
inhabitants and starve ourselves." The same discretion was given to him
that had been to General Taylor in this respect. General Scott, for the
reasons assigned by him, also continued to pay for the articles of
supply for the Army which were drawn from the enemy.

After the Army had reached the heart of the most wealthy portion of
Mexico it was supposed that the obstacles which had before that time
prevented it would not be such as to render impracticable the levy of
forced contributions for its support, and on the 1st of September and
again on the 6th of October, 1847, the order was repeated in dispatches
addressed by the Secretary of War to General Scott, and his attention
was again called to the importance of making the enemy bear the burdens
of the war by requiring them to furnish the means of supporting our
Army, and he was directed to adopt this policy unless by doing so there
was danger of depriving the Army of the necessary supplies. Copies of
these dispatches were forwarded to General Taylor for his government.

On the 31st of March last I caused an order to be issued to our military
and naval commanders to levy and collect a military contribution upon
all vessels and merchandise which might enter any of the ports of Mexico
in our military occupation, and to apply such contributions toward
defraying the expenses of the war. By virtue of the right of conquest
and the laws of war, the conqueror, consulting his own safety or
convenience, may either exclude foreign commerce altogether from all
such ports or permit it upon such terms and conditions as he may
prescribe. Before the principal ports of Mexico were blockaded by our
Navy the revenue derived from import duties under the laws of Mexico was
paid into the Mexican treasury. After these ports had fallen into our
military possession the blockade was raised and commerce with them
permitted upon prescribed terms and conditions. They were opened to the
trade of all nations upon the payment of duties more moderate in their
amount than those which had been previously levied by Mexico, and the
revenue, which was formerly paid into the Mexican treasury, was directed
to be collected by our military and naval officers and applied to the
use of our Army and Navy. Care was taken that the officers, soldiers,
and sailors of our Army and Navy should be exempted from the operations
of the order, and, as the merchandise imported upon which the order
operated must be consumed by Mexican citizens, the contributions exacted
were in effect the seizure of the public revenues of Mexico and the
application of them to our own use. In directing this measure the object
was to compel the enemy to contribute as far as practicable toward the
expenses of the war.

For the amount of contributions which have been levied in this form I
refer you to the accompanying reports of the Secretary of War and of the
Secretary of the Navy, by which it appears that a sum exceeding half a
million of dollars has been collected. This amount would undoubtedly
have been much larger but for the difficulty of keeping open
communications between the coast and the interior, so as to enable the
owners of the merchandise imported to transport and vend it to the
inhabitants of the country. It is confidently expected that this
difficulty will to a great extent be soon removed by our increased
forces which have been sent to the field.

Measures have recently been adopted by which the internal as well as the
external revenues of Mexico in all places in our military occupation
will be seized and appropriated to the use of our Army and Navy.

The policy of levying upon the enemy contributions in every form
consistently with the laws of nations, which it may be practicable for
our military commanders to adopt, should, in my judgment, be rigidly
enforced, and orders to this effect have accordingly been given. By such
a policy, at the same time that our own Treasury will be relieved from a
heavy drain, the Mexican people will be made to feel the burdens of the
war, and, consulting their own interests, may be induced the more
readily to require their rulers to accede to a just peace.

After the adjournment of the last session of Congress events transpired
in the prosecution of the war which in my judgment required a greater
number of troops in the field than had been anticipated. The strength of
the Army was accordingly increased by "accepting" the services of all
the volunteer forces authorized by the act of the 13th of May, 1846,
without putting a construction on that act the correctness of which was
seriously questioned. The volunteer forces now in the field, with those
which had been "accepted" to "serve for twelve months" and were
discharged at the end of their term of service, exhaust the 50,000 men
authorized by that act. Had it been clear that a proper construction of
the act warranted it, the services of an additional number would have
been called for and accepted; but doubts existing upon this point, the
power was not exercised. It is deemed important that Congress should at
an early period of their session confer the authority to raise an
additional regular force to serve during the war with Mexico and to be
discharged upon the conclusion and ratification of a treaty of peace. I
invite the attention of Congress to the views presented by the Secretary
of War in his report upon this subject.

I recommend also that authority be given by law to call for and accept
the services of an additional number of volunteers, to be exercised at
such time and to such extent as the emergencies of the service may
require.

In prosecuting the war with Mexico, whilst the utmost care has been
taken to avoid every just cause of complaint on the part of neutral
nations, and none has been given, liberal privileges have been granted
to their commerce in the ports of the enemy in our military occupation.
The difficulty with the Brazilian Government, which at one time
threatened to interrupt the friendly relations between the two
countries, will, I trust, be speedily adjusted. I have received
information that an envoy extraordinary and minister plenipotentiary to
the United States will shortly be appointed by His Imperial Majesty, and
it is hoped that he will come instructed and prepared to adjust all
remaining differences between the two Governments in a manner acceptable
and honorable to both. In the meantime, I have every reason to believe
that nothing will occur to interrupt our amicable relations with Brazil.

It has been my constant effort to maintain and cultivate the most
intimate relations of friendship with all the independent powers of
South America, and this policy has been attended with the happiest
results. It is true that the settlement and payment of many just claims
of American citizens against these nations have been long delayed. The
peculiar position in which they have been placed and the desire on the
part of my predecessors as well as myself to grant them the utmost
indulgence have hitherto prevented these claims from being urged in a
manner demanded by strict justice. The time has arrived when they ought
to be finally adjusted and liquidated, and efforts are now making for
that purpose.

It is proper to inform you that the Government of Peru has in good faith
paid the first two installments of the indemnity of $30,000 each, and
the greater portion of the interest due thereon, in execution of the
convention between that Government and the United States the
ratifications of which were exchanged at Lima on the 31st of October,
1846. The Attorney-General of the United States early in August last
completed the adjudication of the claims under this convention, and made
his report thereon in pursuance of the act of the 8th of August, 1846.
The sums to which the claimants are respectively entitled will be paid
on demand at the Treasury.

I invite the early attention of Congress to the present condition of our
citizens in China. Under our treaty with that power American citizens
are withdrawn from the jurisdiction, whether civil or criminal, of the
Chinese Government and placed under that of our public functionaries in
that country. By these alone can our citizens be tried and punished for
the commission of any crime; by these alone can questions be decided
between them involving the rights of persons and property, and by these
alone can contracts be enforced into which they may have entered with
the citizens or subjects of foreign powers. The merchant vessels of the
United States lying in the waters of the five ports of China open to
foreign commerce are under the exclusive jurisdiction of officers of
their own Government. Until Congress shall establish competent tribunals
to try and punish crimes and to exercise jurisdiction in civil cases in
China, American citizens there are subject to no law whatever. Crimes
may be committed with impunity and debts may be contracted without any
means to enforce their payment. Inconveniences have already resulted
from the omission of Congress to legislate upon the subject, and still
greater are apprehended. The British authorities in China have already
complained that this Government has not provided for the punishment of
crimes or the enforcement of contracts against American citizens in that
country, whilst their Government has established tribunals by which an
American citizen can recover debts due from British subjects.
Accustomed, as the Chinese are, to summary justice, they could not be
made to comprehend why criminals who are citizens of the United States
should escape with impunity, in violation of treaty obligations, whilst
the punishment of a Chinese who had committed any crime against an
American citizen would be rigorously exacted. Indeed, the consequences
might be fatal to American citizens in China should a flagrant crime be
committed by any one of them upon a Chinese, and should trial and
punishment not follow according to the requisitions of the treaty. This
might disturb, if not destroy, our friendly relations with that Empire,
and cause an interruption of our valuable commerce. Our treaties with
the Sublime Porte, Tripoli, Tunis, Morocco, and Muscat also require the
legislation of Congress to carry them into execution, though the
necessity for immediate action may not be so urgent as in regard to
China.

The Secretary of State has submitted an estimate to defray the expense
of opening diplomatic relations with the Papal States. The interesting
political events now in progress in these States, as well as a just
regard to our commercial interests, have, in my opinion, rendered such a
measure highly expedient.

Estimates have also been submitted for the outfits and salaries of
charges' d'affaires to the Republics of Bolivia, Guatemala, and Ecuador.
The manifest importance of cultivating the most friendly relations with
all the independent States upon this continent has induced me to
recommend appropriations necessary for the maintenance of these
missions.

I recommend to Congress that an appropriation be made to be paid to the
Spanish Government for the purpose of distribution among the claimants
in the Amistad case. I entertain the conviction that this is due to
Spain under the treaty of the 20th of October, 1795, and, moreover, that
from the earnest manner in which the claim continues to be urged so long
as it shall remain unsettled it will be a source of irritation and
discord between the two countries, which may prove highly prejudicial to
the interests of the United States. Good policy, no less than a faithful
compliance with our treaty obligations, requires that the inconsiderable
appropriation demanded should be made.

A detailed statement of the condition of the finances will be presented
in the annual report of the Secretary of the Treasury. The imports for
the last fiscal year, ending on the 30th of June, 1847, were of the
value of $146,545,638, of which the amount exported was $8,011,158,
leaving $138,534,480 in the country for domestic use. The value of the
exports for the same period was $158,648,622, of which $150,637,464
consisted of domestic productions and $8,011,158 of foreign articles.

The receipts into the Treasury for the same period amounted to
$26,346,790.37, of which there was derived from customs $23,747,864.66,
from sales of public lands $2,498,335.20, and from incidental and
miscellaneous sources $100,570.51. The last fiscal year, during which
this amount was received, embraced five months under the operation of
the tariff act of 1842 and seven months during which the tariff act of
1846 was in force. During the five months under the act of 1842 the
amount received from customs was $7,842,306.90, and during the seven
months under the act of 1846 the amount received was $15,905,557.76.

The net revenue from customs during the year ending on the 1st of
December, 1846, being the last year under the operation of the tariff
act of 1842, was $22,971,403.10, and the net revenue from customs during
the year ending on the 1st of December, 1847, being the first year under
the operations of the tariff act of 1846, was about $31,500,000, being
an increase of revenue for the first year under the tariff of 1846 of
more than $8,500,000 over that of the last year under the tariff of
1842.

The expenditures during the fiscal year ending on the 30th of June last
were $59,451,177.65, of which $3,522,082.37 was on account payment of
principal and interest of the public debt, including Treasury notes
redeemed and not funded. The expenditures exclusive of payment of public
debt were $55,929,095.28.

It is estimated that the receipts into the Treasury for the fiscal year
ending on the 30th of June, 1848, including the balance in the Treasury
on the 1st of July last, will amount to $42,886,545.80, of which
$31,000,000, it is estimated, will be derived from customs, $3,500,000
from the sale of the public lands, $400,000 from incidental sources,
eluding sales made by the Solicitor of the Treasury, and $6,285,294.55
from loans already authorized by law, which, together with the balance
in the Treasury on the 1st of July last, make the sum estimated.

The expenditures for the same period, if peace with Mexico shall not be
concluded and the Army shall be increased as is proposed, will amount,
including the necessary payments on account of principal and interest of
the public debt and Treasury notes, to $58,615,660.07. On the 1st of the
present month the amount of the public debt actually incurred, including
Treasury notes, was $45,659,659.40. The public debt due on the 4th of
March, 1845, including Treasury notes, was $17,788,799.62, and
consequently the addition made to the public debt since that time is
$27,870,859.78.

Of the loan of twenty-three millions authorized by the act of the 28th
of January, 1847, the sum of five millions was paid out to the public
creditors or exchanged at par for specie; the remaining eighteen
millions was offered for specie to the highest bidder not below par, by
an advertisement issued by the Secretary of the Treasury and published
from the 9th of February until the 10th of April, 1847, when it was
awarded to the several highest bidders at premiums varying from
one-eighth of per cent to 2 per cent above par. The premium has been
paid into the Treasury and the sums awarded deposited in specie in the
Treasury as fast as it was required by the wants of the Government.

To meet the expenditures for the remainder of the present and for the
next fiscal year, ending on the 30th of June, 1849, a further loan in
aid of the ordinary revenues of the Government will be necessary.
Retaining a sufficient surplus in the Treasury, the loan required for
the remainder of the present fiscal year will be about $18,500,000. If
the duty on tea and coffee be imposed and the graduation of the price of
the public lands shall be made at an early period of your session, as
recommended, the loan for the present fiscal year may be reduced to
$17,000,000. The loan may be further reduced by whatever amount of
expenditures can be saved by military contributions collected in Mexico.
The most vigorous measures for the augmentation of these contributions
have been directed and a very considerable sum is expected from that
source. Its amount can not, however, be calculated with any certainty.
It is recommended that the loan to be made be authorized upon the same
terms and for the same time as that which was authorized under the
provisions of the act of the 28th of January, 1847.

Should the war with Mexico be continued until the 30th of June, 1849, it
is estimated that a further loan of $20,500,000 will be required for the
fiscal year ending on that day, in case no duty be imposed on tea and
coffee, and the public lands be not reduced and graduated in price, and
no military contributions shall be collected in Mexico. If the duty on
tea and coffee be imposed and the lands be reduced and graduated in
price as proposed, the loan may be reduced to $17,000,000, and will be
subject to be still further reduced by the amount of the military
contributions which may be collected in Mexico. It is not proposed,
however, at present to ask Congress for authority to negotiate this loan
for the next fiscal year, as it is hoped that the loan asked for the
remainder of the present fiscal year, aided by military contributions
which may be collected in Mexico, may be sufficient. If, contrary to my
expectation, there should be a necessity for it, the fact will be
communicated to Congress in time for their action during the present
session. In no event will a sum exceeding $6,000,000 of this amount be
needed before the meeting of the session of Congress in December, 1848.

The act of the 30th of July, 1846, "reducing the duties on imports," has
been in force since the 1st of December last, and I am gratified to
state that all the beneficial effects which were anticipated from its
operation have been fully realized. The public revenue derived from
customs during the year ending on the 1st of December, 1847, exceeds by
more than $8,000,000 the amount received in the preceding year under the
operation of the act of 1842, which was superseded and repealed by it.
Its effects are visible in the great and almost unexampled prosperity
which prevails in every branch of business.

While the repeal of the prohibitory and restrictive duties of the act of
1842 and the substitution in their place of reasonable revenue rates
levied on articles imported according to their actual value has
increased the revenue and augmented our foreign trade, all the great
interests of the country have been advanced and promoted.

The great and important interests of agriculture, which had been not
only too much neglected, but actually taxed under the protective policy
for the benefit of other interests, have been relieved of the burdens
which that policy imposed on them; and our farmers and planters, under a
more just and liberal commercial policy, are finding new and profitable
markets abroad for their augmented products. Our commerce is rapidly
increasing, and is extending more widely the circle of international
exchanges. Great as has been the increase of our imports during the past
year, our exports of domestic products sold in foreign markets have been
still greater.

Our navigating interest is eminently prosperous. The number of vessels
built in the United States has been greater than during any preceding
period of equal length. Large profits have been derived by those who
have constructed as well as by those who have navigated them. Should the
ratio of increase in the number of our merchant vessels be progressive,
and be as great for the future as during the past year, the time is not
distant when our tonnage and commercial marine will be larger than that
of any other nation in the world.

Whilst the interests of agriculture, of commerce, and of navigation have
been enlarged and invigorated, it is highly gratifying to observe that
our manufactures are also in a prosperous condition. None of the ruinous
effects upon this interest which were apprehended by some as the result
of the operation of the revenue system established by the act of 1846
have been experienced. On the contrary, the number of manufactories and
the amount of capital invested in them is steadily and rapidly
increasing, affording gratifying proofs that American enterprise and
skill employed in this branch of domestic industry, with no other
advantages than those fairly and incidentally accruing from a just
System of revenue duties, are abundantly able to meet successfully all
competition from abroad and still derive fair and remunerating profits.
While capital invested in manufactures is yielding adequate and fair
profits under the new system, the wages of labor, whether employed in
manufactures, agriculture, commerce, or navigation, have been augmented.
The toiling millions whose daily labor furnishes the supply of food and
raiment and all the necessaries and comforts of life are receiving
higher wages and more steady and permanent employment than in any other
country or at any previous period of our own history.

So successful have been all branches of our industry that a foreign war,
which generally diminishes the resources of a nation, has in no
essential degree retarded our onward progress or checked our general
prosperity.

With such gratifying evidences of prosperity and of the successful
operation of the revenue act of 1846, every consideration of public
policy recommends that it shall remain unchanged. It is hoped that the
system of impost duties which it established may be regarded as the
permanent policy of the country, and that the great interests affected
by it may not again be subject to be injuriously disturbed, as they have
heretofore been by frequent and sometimes sudden changes.

For the purpose of increasing the revenue, and without changing or
modifying the rates imposed by the act of 1846 on the dutiable articles
embraced by its provisions, I again recommend to your favorable
consideration the expediency of levying a revenue duty on tea and
coffee. The policy which exempted these articles from duty during peace,
and when the revenue to be derived from them was not needed, ceases to
exist when the country is engaged in war and requires the use of all of
its available resources. It is a tax which would be so generally
diffused among the people that it would be felt oppressively by none and
be complained of by none. It is believed that there are not in the list
of imported articles any which are more properly the subject of war
duties than tea and coffee.

It is estimated that $3,000,000 would be derived annually by a moderate
duty imposed on these articles.

Should Congress avail itself of this additional source of revenue, not
only would the amount of the public loan rendered necessary by the war
with Mexico be diminished to that extent, but the public credit and the
public confidence in the ability and determination of the Government to
meet all its engagements promptly would be more firmly established, and
the reduced amount of the loan which it may be necessary to negotiate
could probably be obtained at cheaper rates.

Congress is therefore called upon to determine whether it is wiser to
impose the war duties recommended or by omitting to do so increase the
public debt annually $3,000,000 so long as loans shall be required to
prosecute the war, and afterwards provide in some other form to pay the
semiannual interest upon it, and ultimately to extinguish the principal.
If in addition to these duties Congress should graduate and reduce the
price of such of the public lands as experience has proved will not
command the price placed upon them by the Government, an additional
annual income to the Treasury of between half a million and a million of
dollars, it is estimated, would be derived from this source. Should both
measures receive the sanction of Congress, the annual amount of public
debt necessary to be contracted during the continuance of the war would
be reduced near $4,000,000. The duties recommended to be levied on tea
and coffee it is proposed shall be limited in their duration to the end
of the war, and until the public debt rendered necessary to be
contracted by it shall be discharged. The amount of the public debt to
be contracted should be limited to the lowest practicable sum, and
should be extinguished as early after the conclusion of the war as the
means of the Treasury will permit.

With this view, it is recommended that as soon as the war shall be over
all the surplus in the Treasury not needed for other indispensable
objects shall constitute a sinking fund and be applied to the purchase
of the funded debt, and that authority be conferred by laws for that
purpose. The act of the 6th of August, 1846, "to establish a warehousing
system," has been in operation more than a year, and has proved to be an
important auxiliary to the tariff act of 1846 in augmenting the revenue
and extending the commerce of the country. Whilst it has tended to
enlarge commerce, it has been beneficial to our manufactures by
diminishing forced sales at auction of foreign goods at low prices to
raise the duties to be advanced on them, and by checking fluctuations in
the market. The system, although sanctioned by the experience of other
countries, was entirely new in the United States, and is susceptible of
improvement in some of its provisions. The Secretary of the Treasury,
upon whom was devolved large discretionary powers in carrying this
measure into effect, has collected and is now collating the practical
results of the system in other countries where it has long been
established, and will report at an early period of your session such
further regulations suggested by the investigation as may render it
still more effective and beneficial.

By the act to "provide for the better organization of the Treasury and
for the collection, safe-keeping, and disbursement of the public
revenue" all banks were discontinued as fiscal agents of the Government,
and the paper currency issued by them was no longer permitted to be
received in payment of public dues. The constitutional treasury created
by this act went into operation on the 1st of January last. Under the
system established by it the public moneys have been collected, safely
kept, and disbursed by the direct agency of officers of the Government
in gold and silver, and transfers of large amounts have been made from
points of collection to points of disbursement without loss to the
Treasury or injury or inconvenience to the trade of the country.

While the fiscal operations of the Government have been conducted with
regularity and ease under this system, it has had a salutary effect in
checking and preventing an undue inflation of the paper currency issued
by the banks which exist under State charters. Requiring, as it does,
all dues to the Government to be paid in gold and silver, its effect is
to restrain excessive issues of bank paper by the banks disproportioned
to the specie in their vaults, for the reason that they are at all times
liable to be called on by the holders of their notes for their
redemption in order to obtain specie for the payment of duties and other
public dues. The banks, therefore, must keep their business within
prudent limits, and be always in a condition to meet such calls, or run
the hazard of being compelled to suspend specie payments and be thereby
discredited. The amount of specie imported into the United States during
the last fiscal year was $24,121,289, of which there was retained in the
country $22,276,170. Had the former financial system prevailed and the
public moneys been placed on deposit in the banks, nearly the whole of
this amount would have gone into their vaults, not to be thrown into
circulation by them, but to be withheld from the hands of the people as
a currency and made the basis of new and enormous issues of bank paper.
A large proportion of the specie imported has been paid into the
Treasury for public dues, and after having been to a great extent
recoined at the Mint has been paid out to the public creditors and gone
into circulation as a currency among the people. The amount of gold and
silver coin now in circulation in the country is larger than at any
former period.

The financial system established by the constitutional treasury has been
thus far eminently successful in its operations, and I recommend an
adherence to all its essential provisions, and especially to that vital
provision which wholly separates the Government from all connection with
banks and excludes bank paper from all revenue receipts.

In some of its details, not involving its general principles, the system
is defective and will require modification. These defects and such
amendments as are deemed important were set forth in the last annual
report of the Secretary of the Treasury. These amendments are again
recommended to the early and favorable consideration of Congress.

During the past year the coinage at the Mint and its branches has
exceeded $20,000,000. This has consisted chiefly in converting the coins
of foreign countries into American coin.

The largest amount of foreign coin imported has been received at New
York, and if a branch mint were established at that city all the foreign
coin received at that port could at once be converted into our own coin
without the expense, risk, and delay of transporting it to the Mint for
that purpose, and the amount recoined would be much larger.

Experience has proved that foreign coin, and especially foreign gold
coin, will not circulate extensively as a currency among the people. The
important measure of extending our specie circulation, both of gold and
silver, and of diffusing it among the people can only be effected by
converting such foreign coin into American coin. I repeat the
recommendation contained in my last annual message for the establishment
of a branch of the Mint of the United States at the city of New York.

All the public lands which had been surveyed and were ready for market
have been proclaimed for sale during the past year. The quantity offered
and to be offered for sale under proclamations issued since the 1st of
January last amounts to 9,138,531 acres. The prosperity of the Western
States and Territories in which these lands lie will be advanced by
their speedy sale. By withholding them from market their growth and
increase of population would be retarded, while thousands of our
enterprising and meritorious frontier population would be deprived of
the opportunity of securing freeholds for themselves and their families.
But in addition to the general considerations which rendered the early
sale of these lands proper, it was a leading object at this time to
derive as large a sum as possible from this source, and thus diminish by
that amount the public loan rendered necessary by the existence of a
foreign war.

It is estimated that not less than 10,000,000 acres of the public lands
will be surveyed and be in a condition to be proclaimed for sale during
the year 1848.

In my last annual message I presented the reasons which in my judgment
rendered it proper to graduate and reduce the price of such of the
public lands as have remained unsold for long periods after they had
been offered for sale at public auction.

Many millions of acres of public lands lying within the limits of
several of the Western States have been offered in the market and been
subject to sale at private entry for more than twenty years and large
quantities for more than thirty years at the lowest price prescribed by
the existing laws, and it has been found that they will not command that
price. They must remain unsold and uncultivated for an indefinite period
unless the price demanded for them by the Government shall be reduced.
No satisfactory reason is perceived why they should be longer held at
rates above their real value. At the present period an additional reason
exists for adopting the measure recommended. When the country is engaged
in a foreign war, and we must necessarily resort to loans, it would seem
to be the dictate of wisdom that we should avail ourselves of all our
resources and thus limit the amount of the public indebtedness to the
lowest possible sum.

I recommend that the existing laws on the subject of preemption rights
be amended and modified so as to operate prospectively and to embrace
all who may settle upon the public lands and make improvements upon
them, before they are surveyed as well as afterwards, in all cases where
such settlements may be made after the Indian title shall have been
extinguished.

If the right of preemption be thus extended, it will embrace a large and
meritorious class of our citizens. It will increase the number of small
freeholders upon our borders, who will be enabled thereby to educate
their children and otherwise improve their condition, while they will be
found at all times, as they have ever proved themselves to be in the
hour of danger to their country, among our hardiest and best volunteer
soldiers, ever ready to attend to their services in cases of emergencies
and among the last to leave the field as long as an enemy remains to be
encountered. Such a policy will also impress these patriotic pioneer
emigrants with deeper feelings of gratitude for the parental care of
their Government, when they find their dearest interests secured to them
by the permanent laws of the land and that they are no longer in danger
of losing their homes and hard-earned improvements by being brought into
competition with a more wealthy class of purchasers at the land sales.
The attention of Congress was invited at their last and the preceding
session to the importance of establishing a Territorial government over
our possessions in Oregon, and it is to be regretted that there was no
legislation on the subject. Our citizens who inhabit that distant region
of country are still left without the protection of our laws, or any
regularly organized government. Before the question of limits and
boundaries of the Territory of Oregon was definitely settled, from the
necessity of their condition the inhabitants had established a temporary
government of their own. Besides the want of legal authority for
continuing such a government, it is wholly inadequate to protect them in
their rights of person and property, or to secure to them the enjoyment
of the privileges of other citizens, to which they are entitled under
the Constitution of the United States. They should have the right of
suffrage, be represented in a Territorial legislature and by a Delegate
in Congress, and possess all the rights and privileges which citizens of
other portions of the territories of the United States have heretofore
enjoyed or may now enjoy.

Our judicial system, revenue laws, laws regulating trade and intercourse
with the Indian tribes, and the protection of our laws generally should
be extended over them.

In addition to the inhabitants in that Territory who had previously
emigrated to it, large numbers of our citizens have followed them during
the present year, and it is not doubted that during the next and
subsequent years their numbers will be greatly increased.

Congress at its last session established post routes leading to Oregon,
and between different points within that Territory, and authorized the
establishment of post-offices at "Astoria and such other places on the
coasts of the Pacific within the territory of the United States as the
public interests may require." Post-offices have accordingly been
established, deputy postmasters appointed, and provision made for the
transportation of the mails.

The preservation of peace with the Indian tribes residing west of the
Rocky Mountains will render it proper that authority should be given by
law for the appointment of an adequate number of Indian agents to reside
among them.

I recommend that a surveyor-general's office be established in that
Territory, and that the public lands be surveyed and brought into market
at an early period.

I recommend also that grants, upon liberal terms, of limited quantities
of the public lands be made to all citizens of the United States who
have emigrated, or may hereafter within a prescribed period emigrate, to
Oregon and settle upon them. These hardy and adventurous citizens, who
have encountered the dangers and privations of a long and toilsome
journey, and have at length found an abiding place for themselves and
their families upon the utmost verge of our western limits, should be
secured in the homes which they have improved by their labor. I refer
you to the accompanying report of the Secretary of War for a detailed
account of the operations of the various branches of the public service
connected with the Department under his charge. The duties devolving on
this Department have been unusually onerous and responsible during the
past year, and have been discharged with ability and success.

Pacific relations continue to exist with the various Indian tribes, and
most of them manifest a strong friendship for the United States. Some
depredations were committed during the past year upon our trains
transporting supplies for the Army, on the road between the western
border of Missouri and Santa Fe. These depredations, which are supposed
to have been committed by bands from the region of New Mexico, have been
arrested by the presence of a military force ordered out for that
purpose. Some outrages have been perpetrated by a portion of the
northwestern bands upon the weaker and comparatively defenseless
neighboring tribes. Prompt measures were taken to prevent such
occurrences in future.

Between 1,000 and 2,000 Indians, belonging to several tribes, have been
removed during the year from the east of the Mississippi to the country
allotted to them west of that river as their permanent home, and
arrangements have been made for others to follow.

Since the treaty of 1846 with the Cherokees the feuds among them appear
to have subsided, and they have become more united and contented than
they have been for many years past. The commissioners appointed in
pursuance of the act of June 27, 1846, to settle claims arising under
the treaty of 1835-36 with that tribe have executed their duties, and
after a patient investigation and a full and fair examination of all the
cases brought before them closed their labors in the month of July last.
This is the fourth board of commissioners which has been organized under
this treaty. Ample opportunity has been afforded to all those interested
to bring forward their claims. No doubt is entertained that impartial
justice has been done by the late board, and that all valid claims
embraced by the treaty have been considered and allowed. This result and
the final settlement to be made with this tribe under the treaty of
1846, which will be completed and laid before you during your session,
will adjust all questions of controversy between them and the United
States and produce a state of relations with them simple, well defined,
and satisfactory. Under the discretionary authority conferred by the act
of the 3d of March last the annuities due to the various tribes have
been paid during the present year to the heads of families instead of to
their chiefs or such persons as they might designate, as required by the
law previously existing. This mode of payment has given general
satisfaction to the great body of the Indians. Justice has been done to
them, and they are grateful to the Government for it. A few chiefs and
interested persons may object to this mode of payment, but it is
believed to be the only mode of preventing fraud and imposition from
being practiced upon the great body of common Indians, constituting a
majority of all the tribes. It is gratifying to perceive that a number
of the tribes have recently manifested an increased interest in the
establishment of schools among them, and are making rapid advances in
agriculture, some of them producing a sufficient quantity of food for
their support and in some cases a surplus to dispose of to their
neighbors. The comforts by which those who have received even a very
limited education and have engaged in agriculture are surrounded tend
gradually to draw off their less civilized brethren from the precarious
means of subsistence by the chase to habits of labor and civilization.

The accompanying report of the Secretary of the Navy presents a
satisfactory and gratifying account of the condition and operations of
the naval service during the past year. Our commerce has been pursued
with increased activity and with safety and success in every quarter of
the globe under the protection of our flag, which the Navy has caused to
be respected in the most distant seas.

In the Gulf of Mexico and in the Pacific the officers and men of our
squadrons have displayed distinguished gallantry and performed valuable
services. In the early stages of the war with Mexico her ports on both
coasts were blockaded, and more recently many of them have been captured
and held by the Navy. When acting in cooperation with the land forces,
the naval officers and men have performed gallant and distinguished
services on land as well as on water, and deserve the high commendation
of the country.

While other maritime powers are adding to their navies large numbers of
war steamers, it was a wise policy on our part to make similar additions
to our Navy. The four war steamers authorized by the act of the 3d of
March, 1847, are in course of construction.

In addition to the four war steamers authorized by this act, the
Secretary of the Navy has, in pursuance of its provisions, entered into
contracts for the construction of five steamers to be employed in the
transportation of the United States mail "from New York to New Orleans,
touching at Charleston, Savannah, and Havana, and from Havana to
Chagres;" for three steamers to be employed in like manner from Panama
to Oregon, "so as to connect with the mail from Havana to Chagres across
the Isthmus;" and for five steamers to be employed in like manner from
New York to Liverpool. These steamers will be the property of the
contractors, but are to be built "under the superintendence and
direction of a naval constructor in the employ of the Navy Department,
and to be so constructed as to render them convertible at the least
possible expense into war steamers of the first class." A prescribed
number of naval officers, as well as a post-office agent, are to be on
board of them, and authority is reserved to the Navy Department at all
times to "exercise control over said steamships" and "to have the right
to take them for the exclusive use and service of the United States upon
making proper compensation to the contractors therefor."

Whilst these steamships will be employed in transporting the mails of
the United States coastwise and to foreign countries upon an annual
compensation to be paid to the owners, they will be always ready, upon
an emergency requiring it, to be converted into war steamers; and the
right reserved to take them for public use will add greatly to the
efficiency and strength of this description of our naval force. To the
steamers thus authorized under contracts made by the Secretary of the
Navy should be added five other steamers authorized under contracts made
in pursuance of laws by the Postmaster-General, making an addition, in
the whole, of eighteen war steamers subject to be taken for public use.
As further contracts for the transportation of the mail to foreign
countries may be authorized by Congress, this number may be enlarged
indefinitely.

The enlightened policy by which a rapid communication with the various
distant parts of the globe is established, by means of American built
sea steamers, would find an ample reward in the increase of our commerce
and in making our country and its resources more favorably known abroad;
but the national advantage is still greater--of having our naval
officers made familiar with steam navigation and of having the privilege
of taking the ships already equipped for immediate service at a moment's
notice, and will be cheaply purchased by the compensation to be paid for
the transportation of the mail in them over and above the postages
received.

A just national pride, no less than our commercial interests, would Seem
to favor the policy of augmenting the number of this description of
vessels. They can be built in our country cheaper and in greater numbers
than in any other in the world.

I refer you to the accompanying report of the Postmaster-General for a
detailed and satisfactory account of the condition and operations of
that Department during the past year. It is gratifying to find that
within so short a period after the reduction in the rates of postage,
and notwithstanding the great increase of mail service, the revenue
received for the year will be sufficient to defray all the expenses, and
that no further aid will be required from the Treasury for that purpose.

The first of the American mail steamers authorized by the act of the 3d
of March, 1845, was completed and entered upon the service on the 1st of
June last, and is now on her third voyage to Bremen and other
intermediate ports. The other vessels authorized under the provisions of
that act are in course of construction, and will be put upon the line as
soon as completed. Contracts have also been made for the transportation
of the mail in a steamer from Charleston to Havana.

A reciprocal and satisfactory postal arrangement has been made by the
Postmaster-General with the authorities of Bremen, and no difficulty is
apprehended in making similar arrangements with all other powers with
which we may have communications by mail steamers, except with Great
Britain.

On the arrival of the first of the American steamers bound to Bremen at
Southampton, in the month of June last, the British post-office directed
the collection of discriminating postages on all letters and other
mailable matter which she took out to Great Britain or which went into
the British post-office on their way to France and other parts of
Europe. The effect of the order of the British, post-office is to
subject all letters and other matter transported by American steamers to
double postage, one postage having been previously paid on them to the
United States, while letters transported in British steamers are subject
to pay but a single postage. This measure was adopted with the avowed
object of protecting the British line of mail steamers now running
between Boston and Liverpool, and if permitted to Continue must speedily
put an end to the transportation of all letters and other matter by
American steamers and give to British steamers a monopoly of the
business. A just and fair reciprocity is all that we desire, and on this
we must insist. By our laws no such discrimination is made against
British steamers bringing letters into our ports, but all letters
arriving in the United States are subject to the same rate of postage,
whether brought in British or American vessels. I refer you to the
report of the Postmaster-General for a full statement of the facts of
the case and of the steps taken by him to correct this inequality. He
has exerted all the power conferred upon him by the existing laws.

The minister of the United States at London has brought the subject to
the attention of the British Government, and is now engaged in
negotiations for the purpose of adjusting reciprocal postal arrangements
which shall be equally just to both countries. Should he fail in
concluding such arrangements, and should Great Britain insist on
enforcing the unequal and unjust measure she has adopted, it will become
necessary to confer additional powers on the Postmaster-General in order
to enable him to meet the emergency and to put our own steamers on an
equal footing with British steamers engaged in transporting the mails
between the two countries, and I recommend that such powers be
conferred. In view of the existing state of our country, I trust it may
not be inappropriate, in closing this communication, to call to mind the
words of wisdom and admonition of the first and most illustrious of my
predecessors in his Farewell Address to his countrymen.

That greatest and best of men, who served his country so long and loved
it so much, foresaw with "serious concern" the danger to our Union of
"characterizing parties by geographical discriminations--Northern and
Southern, Atlantic and Western--whence designing men may endeavor to
excite a belief that there is a real difference of local interests and
views," and warned his countrymen against it.

So deep and solemn was his conviction of the importance of the Union and
of preserving harmony between its different parts, that he declared to
his countrymen in that address:

It is of infinite moment that you should properly estimate the immense
value of your national union to your collective and individual
happiness; that you should cherish a cordial, habitual, and immovable
attachment to it; accustoming yourselves to think and speak of it as of
the palladium of your political safety and prosperity; watching for its
preservation with jealous anxiety; discountenancing whatever may suggest
even a suspicion that it can in any event be abandoned, and indignantly
frowning upon the first dawning of every attempt to alienate any portion
of our country from the rest or to enfeeble the sacred ties which now
link together the various parts.

After the lapse of half a century these admonitions of Washington fall
upon us with all the force of truth. It is difficult to estimate the
"immense value" of our glorious Union of confederated States, to which
we are so much indebted for our growth in population and wealth and for
all that constitutes us a great and a happy nation. How unimportant are
all our differences of opinion upon minor questions of public policy
compared with its preservation, and how scrupulously should we avoid all
agitating topics which may tend to distract and divide us into
contending parties, separated by geographical lines, whereby it may be
weakened or endangered.

Invoking the blessing of the Almighty Ruler of the Universe upon your
deliberations, it will be my highest duty, no less than my sincere
pleasure, to cooperate with you in all measures which may tend to
promote the honor and enduring welfare of our common country.

JAMES K. POLK

***

State of the Union Address
James Polk
December 5, 1848

Fellow-Citizens of the Senate and of the House of Representatives:

Under the benignant providence of Almighty God the representatives of
the States and of the people are again brought together to deliberate
for the public good. The gratitude of the nation to the Sovereign
Arbiter of All Human Events should be commensurate with the boundless
blessings which we enjoy.

Peace, plenty, and contentment reign throughout our borders, and our
beloved country presents a sublime moral spectacle to the world.

The troubled and unsettled condition of some of the principal European
powers has had a necessary tendency to check and embarrass trade and to
depress prices throughout all commercial nations, but notwithstanding
these causes, the United States, with their abundant products, have felt
their effects less severely than any other country, and all our great
interests are still prosperous and successful.

In reviewing the great events of the past year and contrasting the
agitated and disturbed state of other countries with our own tranquil
and happy condition, we may congratulate ourselves that we are the most
favored people on the face of the earth. While the people of other
countries are struggling to establish free institutions, under which man
may govern himself, we are in the actual enjoyment of them--a rich
inheritance from our fathers. While enlightened nations of Europe are
convulsed and distracted by civil war or intestine strife, we settle all
our political controversies by the peaceful exercise of the rights of
freemen at the ballot box.

The great republican maxim, so deeply engraven on the hearts of our
people, that the will of the majority, constitutionally expressed, shall
prevail, is our sure safeguard against force and violence. It is a
subject of just pride that our fame and character as a nation continue
rapidly to advance in the estimation of the civilized world.

To our wise and free institutions it is to be attributed that while
other nations have achieved glory at the price of the suffering,
distress, and impoverishment of their people, we have won our honorable
position in the midst of an uninterrupted prosperity and of an
increasing individual comfort and happiness.

I am happy to inform you that our relations with all nations are
friendly and pacific. Advantageous treaties of commerce have been
concluded within the last four years with New Granada, Peru, the Two
Sicilies, Belgium, Hanover, Oldenburg, and Mecklenburg-Schwerin.
Pursuing our example, the restrictive system of Great Britain, our
principal foreign customer, has been relaxed, a more liberal commercial
policy has been adopted by other enlightened nations, and our trade has
been greatly enlarged and extended. Our country stands higher in the
respect of the world than at any former period. To continue to occupy
this proud position, it is only necessary to preserve peace and
faithfully adhere to the great and fundamental principle of our foreign
policy of noninterference in the domestic concerns of other nations. We
recognize in all nations the right which we enjoy ourselves, to change
and reform their political institutions according to their own will and
pleasure. Hence we do not look behind existing governments capable of
maintaining their own authority. We recognize all such actual
governments, not only from the dictates of true policy, but from a
sacred regard for the independence of nations. While this is our settled
policy, it does not follow that we can ever be indifferent spectators of
the progress of liberal principles. The Government and people of the
United States hailed with enthusiasm and delight the establishment of
the French Republic, as we now hail the efforts in progress to unite the
States of Germany in a confederation similar in many respects to our own
Federal Union. If the great and enlightened German States, occupying, as
they do, a central and commanding position in Europe, shall succeed in
establishing such a confederated government, securing at the same time
to the citizens of each State local governments adapted to the peculiar
condition of each, with unrestricted trade and intercourse with each
other, it will be an important era in the history of human events.
Whilst it will consolidate and strengthen the power of Germany, it must
essentially promote the cause of peace, commerce, civilization, and
constitutional liberty throughout the world.

With all the Governments on this continent our relations, it is
believed, are now on a more friendly and satisfactory footing than they
have ever been at any former period.

Since the exchange of ratifications of the treaty of peace with Mexico
our intercourse with the Government of that Republic has been of the
most friendly character. The envoy extraordinary and minister
plenipotentiary of the United States to Mexico has been received and
accredited, and a diplomatic representative from Mexico of similar rank
has been received and accredited by this Government. The amicable
relations between the two countries, which had been suspended, have been
happily restored, and are destined, I trust, to be long preserved. The
two Republics, both situated on this continent, and with coterminous
territories, have every motive of sympathy and of interest to bind them
together in perpetual amity.

This gratifying condition of our foreign relations renders it
unnecessary for me to call your attention more specifically to them.

It has been my constant aim and desire to cultivate peace and commerce
with all nations. Tranquility at home and peaceful relations abroad
constitute the true permanent policy of our country. War, the scourge of
nations, sometimes becomes inevitable, but is always to be avoided when
it can be done consistently with the rights and honor of a nation.

One of the most important results of the war into which we were recently
forced with a neighboring nation is the demonstration it has afforded of
the military strength of our country. Before the late war with Mexico
European and other foreign powers entertained imperfect and erroneous
views of our physical strength as a nation and of our ability to
prosecute war, and especially a war waged out of out own country. They
saw that our standing Army on the peace establishment did not exceed
10,000 men. Accustomed themselves to maintain in peace large standing
armies for the protection of thrones against their own subjects, as well
as against foreign enemies, they had not conceived that it was possible
for a nation without such an army, well disciplined and of long service,
to wage war successfully. They held in low repute our militia, and were
far from regarding them as an effective force, unless it might be for
temporary defensive operations when invaded on our own soil. The events
of the late war with Mexico have not only undeceived them, but have
removed erroneous impressions which prevailed to some extent even among
a portion of our own countrymen. That war has demonstrated that upon the
breaking out of hostilities not anticipated, and for which no previous
preparation had been made, a volunteer army of citizen soldiers equal to
veteran troops, and in numbers equal to any emergency, can in a short
period be brought into the field. Unlike what would have occurred in any
other country, we were under no necessity of resorting to drafts or
conscriptions. On the contrary, such was the number of volunteers who
patriotically tendered their services that the chief difficulty was in
making selections and determining who should be disappointed and
compelled to remain at home. Our citizen soldiers are unlike those drawn
from the population of any other country. They are composed
indiscriminately of all professions and pursuits--of farmers, lawyers,
physicians, merchants, manufacturers, mechanics, and laborers--and this
not only among the officers, but the private soldiers in the ranks. Our
citizen soldiers are unlike those of any other country in other
respects. They are armed, and have been accustomed from their youth up
to handle and use firearms, and a large proportion of them, especially
in the Western and more newly settled States, are expert marksmen. They
are men who have a reputation to maintain at home by their good conduct
in the field. They are intelligent, and there is an individuality of
character which is found in the ranks of no other army. In battle each
private man, as well as every officer, rights not only for his country,
but for glory and distinction among his fellow-citizens when he shall
return to civil life.

The war with Mexico has demonstrated not only the ability of the
Government to organize a numerous army upon a sudden call, but also to
provide it with all the munitions and necessary supplies with dispatch,
convenience, and ease, and to direct its operations with efficiency. The
strength of our institutions has not only been displayed in the valor
and skill of our troops engaged in active service in the field, but in
the organization of those executive branches which were charged with the
general direction and conduct of the war. While too great praise can not
be bestowed upon the officers and men who fought our battles, it would
be unjust to withhold from those officers necessarily stationed at home,
who were charged with the duty of furnishing the Army in proper time and
at proper places with all the munitions of war and other supplies so
necessary to make it efficient, the commendation to which they are
entitled. The credit due to this class of our officers is the greater
when it is considered that no army in ancient or modern times was even
better appointed or provided than our Army in Mexico. Operating in an
enemy's country, removed 2,000 miles from the seat of the Federal
Government, its different corps spread over a vast extent of territory,
hundreds and even thousands of miles apart from each other, nothing
short of the untiring vigilance and extraordinary energy of these
officers could have enabled them to provide the Army at all points and
in proper season with all that was required for the most efficient
service.

It is but an act of justice to declare that the officers in charge of
the several executive bureaus, all under the immediate eye and
supervision of the Secretary of War, performed their respective duties
with ability, energy, and efficiency. They have reaped less of the glory
of the war, not having been personally exposed to its perils in battle,
than their companions in arms; but without their forecast, efficient
aid, and cooperation those in the field would not have been provided
with the ample means they possessed of achieving for themselves and
their country the unfading honors which they have won for both.

When all these facts are considered, it may cease to be a matter of so
much amazement abroad how it happened that our noble Army in Mexico,
regulars and volunteers, were victorious upon every battlefield, however
fearful the odds against them.

The war with Mexico has thus fully developed the capacity of republican
governments to prosecute successfully a just and necessary foreign war
with all the vigor usually attributed to more arbitrary forms of
government. It has been usual for writers on public law to impute to
republics a want of that unity, concentration of purpose, and vigor of
execution which are generally admitted to belong to the monarchical and
aristocratic forms; and this feature of popular government has been
supposed to display itself more particularly in the conduct of a war
carried on in an enemy's territory. The war with Great Britain in 1812
was to a great extent confined within our own limits, and shed but
little light on this subject; but the war which we have just closed by
an honorable peace evinces beyond all doubt that a popular
representative government is equal to any emergency which is likely to
arise in the affairs of a nation.

The war with Mexico has developed most strikingly and conspicuously
another feature in our institutions. It is that without cost to the
Government or danger to our liberties we have in the bosom of our
society of freemen, available in a just and necessary war, virtually a
standing army of 2,000,000 armed citizen soldiers, such as fought the
battles of Mexico. But our military strength does not consist alone in
our capacity for extended and successful operations on land. The Navy is
an important arm of the national defense. If the services of the Navy
were not so brilliant as those of the Army in the late war with Mexico,
it was because they had no enemy to meet on their own element. While the
Army had opportunity of performing more conspicuous service, the Navy
largely participated in the conduct of the war. Both branches of the
service performed their whole duty to the country. For the able and
gallant services of the officers and men of the Navy, acting
independently as well as in cooperation with our troops, in the conquest
of the Californias, the capture of Vera Cruz, and the seizure and
occupation of other important positions on the Gulf and Pacific coasts,
the highest praise is due. Their vigilance, energy, and skill rendered
the most effective service in excluding munitions of war and other
supplies from the enemy, while they secured a safe entrance for abundant
supplies for our own Army. Our extended commerce was nowhere
interrupted, and for this immunity from the evils of war the country is
indebted to the Navy.

High praise is due to the officers of the several executive bureaus,
navy-yards, and stations connected with the service, all under the
immediate direction of the Secretary of the Navy, for the industry,
foresight, and energy with which everything was directed and furnished
to give efficiency to that branch of the service. The same vigilance
existed in directing the operations of the Navy as of the Army. There
was concert of action and of purpose between the heads of the two arms
of the service. By the orders which were from time to time issued, our
vessels of war on the Pacific and the Gulf of Mexico were stationed in
proper time and in proper positions to cooperate efficiently with the
Army. By this means their combined power was brought to bear
successfully on the enemy.

The great results which have been developed and brought to light by this
war will be of immeasurable importance in the future progress of our
country. They will tend powerfully to preserve us from foreign
collisions, and to enable us to pursue uninterruptedly our cherished
policy of "peace with all nations, entangling alliances with none."

Occupying, as we do, a more commanding position among nations than at
any former period, our duties and our responsibilities to ourselves and
to posterity are correspondingly increased. This will be the more
obvious when we consider the vast additions which have been recently
made to our territorial possessions and their great importance and
value.

Within less than four years the annexation of Texas to the Union has
been consummated; all conflicting title to the Oregon Territory south of
the forty-ninth degree of north latitude, being all that was insisted on
by any of my predecessors, has been adjusted, and New Mexico and Upper
California have been acquired by treaty. The area of these several
Territories, according to a report carefully prepared by the
Commissioner of the General Land Office from the most authentic
information in his possession, and which is herewith transmitted,
contains 1,193,061 square miles, or 763,559,040 acres; while the area of
the remaining twenty-nine States and the territory not yet organized
into States east of the Rocky Mountains contains 2,059,513 square miles,
or 1,318,126,058 acres. These estimates show that the territories
recently acquired, and over which our exclusive jurisdiction and
dominion have been extended, constitute a country more than half as
large as all that which was held by the United States before their
acquisition. If Oregon be excluded from the estimate, there will still
remain within the limits of Texas, New Mexico, and California 851,598
square miles, or 545,012,720 acres, being an addition equal to more than
one-third of all the territory owned by the United States before their
acquisition, and, including Oregon, nearly as great an extent of
territory as the whole of Europe, Russia only excepted. The Mississippi,
so lately the frontier of our country, is now only its center. With the
addition of the late acquisitions, the United States are now estimated
to be nearly as large as the whole of Europe. It is estimated by the
Superintendent of the Coast Survey in the accompanying report that the
extent of the seacoast of Texas on the Gulf of Mexico is upward of 400
miles; of the coast of Upper California on the Pacific, of 970 miles,
and of Oregon, including the Straits of Fuca, of 650 miles, making the
whole extent of seacoast on the Pacific 1,620 miles and the whole extent
on both the Pacific and the Gulf of Mexico 2,020 miles. The length of
the coast on the Atlantic from the northern limits of the United States
around the capes of Florida to the Sabine, on the eastern boundary of
Texas, is estimated to be 3,100 miles; so that the addition of seacoast,
including Oregon, is very nearly two-thirds as great as all we possessed
before, and, excluding Oregon, is an addition of 1,370 miles, being
nearly equal to one-half of the extent of coast which we possessed
before these acquisitions. We have now three great maritime fronts--on
the Atlantic, the Gulf of Mexico, and the Pacific--making in the whole
an extent of seacoast exceeding 5,000 miles. This is the extent of the
seacoast of the United States, not including bays, sounds, and small
irregularities of the main shore and of the sea islands. If these be
included, the length of the shore line of coast, as estimated by the
Superintendent of the Coast Survey in his report, would be 33,063 miles.

It would be difficult to calculate the value of these immense additions
to our territorial possessions. Texas, lying contiguous to the western
boundary of Louisiana, embracing within its limits a part of the
navigable tributary waters of the Mississippi and an extensive seacoast,
could not long have remained in the hands of a foreign power without
endangering the peace of our southwestern frontier. Her products in the
vicinity of the tributaries of the Mississippi must have sought a market
through these streams, running into and through our territory, and the
danger of irritation and collision of interests between Texas as a
foreign state and ourselves would have been imminent, while the
embarrassments in the commercial intercourse between them must have been
constant and unavoidable. Had Texas fallen into the hands or under the
influence and control of a strong maritime or military foreign power, as
she might have done, these dangers would have been still greater. They
have been avoided by her voluntary and peaceful annexation to the United
States. Texas, from her position, was a natural and almost indispensable
part of our territories. Fortunately, she has been restored to our
country, and now constitutes one of the States of our Confederacy, "upon
an equal footing with the original States." The salubrity of climate,
the fertility of soil, peculiarly adapted to the production of some of
our most valuable staple commodities, and her commercial advantages must
soon make her one of our most populous States.

New Mexico, though situated in the interior and without a seacoast, is
known to contain much fertile land, to abound in rich mines of the
precious metals, and to be capable of sustaining a large population.
From its position it is the intermediate and connecting territory
between our settlements and our possessions in Texas and those on the
Pacific Coast.

Upper California, irrespective of the vast mineral wealth recently
developed there, holds at this day, in point of value and importance, to
the rest of the Union the same relation that Louisiana did when that
fine territory was acquired from France forty-five years ago. Extending
nearly ten degrees of latitude along the Pacific, and embracing the only
safe and commodious harbors on that coast for many hundred miles, with a
temperate climate and an extensive interior of fertile lands, it is
scarcely possible to estimate its wealth until it shall be brought under
the government of our laws and its resources fully developed. From its
position it must command the rich commerce of China, of Asia, of the
islands of the Pacific, of western Mexico, of Central America, the South
American States, and of the Russian possessions bordering on that ocean.
A great emporium will doubtless speedily arise on the Californian coast
which may be destined to rival in importance New Orleans itself. The
depot of the vast commerce which must exist on the Pacific will probably
be at some point on the Bay of San Francisco, and will occupy the same
relation to the whole western coast of that ocean as New Orleans does to
the valley of the Mississippi and the Gulf of Mexico. To this depot our
numerous whale ships will resort with their cargoes to trade, refit, and
obtain supplies. This of itself will largely contribute to build up a
city, which would soon become the center of a great and rapidly
increasing commerce. Situated on a safe harbor, sufficiently capacious
for all the navies as well as the marine of the world, and convenient to
excellent timber for shipbuilding, owned by the United States, it must
become our great Western naval depot.

It was known that mines of the precious metals existed to a considerable
extent in California at the time of its acquisition. Recent discoveries
render it probable that these mines are more extensive and valuable than
was anticipated. The accounts of the abundance of gold in that territory
are of such an extraordinary character as would scarcely command belief
were they not corroborated by the authentic reports of officers in the
public service who have visited the mineral district and derived the
facts which they detail from personal observation. Reluctant to credit
the reports in general circulation as to the quantity of gold, the
officer commanding our forces in California visited the mineral district
in July last for the purpose of obtaining accurate information on the
subject. His report to the War Department of the result of his
examination and the facts obtained on the spot is herewith laid before
Congress. When he visited the country there were about 4,000 persons
engaged in collecting gold. There is every reason to believe that the
number of persons so employed has since been augmented. The explorations
already made warrant the belief that the supply is very large and that
gold is found at various places in an extensive district of country.

Information received from officers of the Navy and other sources, though
not so full and minute, confirms the accounts of the commander of our
military force in California. It appears also from these reports that
mines of quicksilver are found in the vicinity of the gold region. One
of them is now being worked, and is believed to be among the most
productive in the world.

The effects produced by the discovery of these rich mineral deposits and
the success which has attended the labors of those who have resorted to
them have produced a surprising change in the state of affairs in
California. Labor commands a most exorbitant price, and all other
pursuits but that of searching for the precious metals are abandoned.
Nearly the whole of the male population of the country have gone to the
gold districts. Ships arriving on the coast are deserted by their crews
and their voyages suspended for want of sailors. Our commanding officer
there entertains apprehensions that soldiers can not be kept in the
public service without a large increase of pay. Desertions in his
command have become frequent, and he recommends that those who shall
withstand the strong temptation and remain faithful should be rewarded.

This abundance of gold and the all-engrossing pursuit of it have already
caused in California an unprecedented rise in the price of all the
necessaries of life.

That we may the more speedily and fully avail ourselves of the
undeveloped wealth of these mines, it is deemed of vast importance that
a branch of the Mint of the United States be authorized to be
established at your present session in California. Among other signal
advantages which would result from such an establishment would be that
of raising the gold to its par value in that territory. A branch mint of
the United States at the great commercial depot on the west coast would
convert into our own coin not only the gold derived from our own rich
mines, but also the bullion and specie which our commerce may bring from
the whole west coast of Central and South America. The west coast of
America and the adjacent interior embrace the richest and best mines of
Mexico, New Granada, Central America, Chili, and Peru. The bullion and
specie drawn from these countries, and especially from those of western
Mexico and Peru, to an amount in value of many millions of dollars, are
now annually diverted and carried by the ships of Great Britain to her
own ports, to be recoined or used to sustain her national bank, and thus
contribute to increase her ability to command so much of the commerce of
the world. If a branch mint be established at the great commercial point
upon that coast, a vast amount of bullion and specie would flow thither
to be recoined, and pass thence to New Orleans, New York, and other
Atlantic cities. The amount of our constitutional currency at home would
be greatly increased, while its circulation abroad would be promoted. It
is well known to our merchants trading to China and the west coast of
America that great inconvenience and loss are experienced from the fact
that our coins are not current at their par value in those countries.

The powers of Europe, far removed from the west coast of America by the
Atlantic Ocean, which intervenes, and by a tedious and dangerous
navigation around the southern cape of the continent of America, can
never successfully compete with the United States in the rich and
extensive commerce which is opened to us at so much less cost by the
acquisition of California.

The vast importance and commercial advantages of California have
heretofore remained undeveloped by the Government of the country of
which it constituted a part. Now that this fine province is a part of
our country, all the States of the Union, some more immediately and
directly than others, are deeply interested in the speedy development of
its wealth and resources. No section of our country is more interested
or will be more benefited than the commercial, navigating, and
manufacturing interests of the Eastern States. Our planting and farming
interests in every part of the Union will Be greatly benefited by it. As
our commerce and navigation are enlarged and extended, our exports of
agricultural products and of manufactures will be increased, and in the
new markets thus opened they can not fail to command remunerating and
profitable prices.

The acquisition of California and New Mexico, the settlement of the
Oregon boundary, and the annexation of Texas, extending to the Rio
Grande, are results which, combined, are of greater consequence and will
add more to the strength and wealth of the nation than any which have
preceded them since the adoption of the Constitution.

But to effect these great results not only California, but New Mexico,
must be brought under the control of regularly organized governments.
The existing condition of California and of that part of New Mexico
lying west of the Rio Grande and without the limits of Texas imperiously
demands that Congress should at its present session organize Territorial
governments over them.

Upon the exchange of ratifications of the treaty of peace with Mexico,
on the 30th of May last, the temporary governments which had been
established over New Mexico and California by our military and naval
commanders by virtue of the rights of war ceased to derive any
obligatory force from that source of authority, and having been ceded to
the United States, all government and control over them under the
authority of Mexico had ceased to exist. Impressed with the necessity of
establishing Territorial governments over them, I recommended the
subject to the favorable consideration of Congress in my message
communicating the ratified treaty of peace, on the 6th of July last, and
invoked their action at that session. Congress adjourned without making
any provision for their government. The inhabitants by the transfer of
their country had become entitled to the benefit of our laws and
Constitution, and yet were left without any regularly organized
government. Since that time the very limited power possessed by the
Executive has been exercised to preserve and protect them from the
inevitable consequences of a state of anarchy. The only government which
remained was that established by the military authority during the war.
Regarding this to be a de facto government, and that by the presumed
consent of the inhabitants it might be continued temporarily, they were
advised to conform and submit to it for the short intervening period
before Congress would again assemble and could legislate on the subject.
The views entertained by the Executive on this point are contained in a
communication of the Secretary of State dated the 7th of October last,
which was forwarded for publication to California and New Mexico, a copy
of which is herewith transmitted. The small military force of the
Regular Army which was serving within the limits of the acquired
territories at the close of the war was retained in them, and additional
forces have been ordered there for the protection of the inhabitants and
to preserve and secure the rights and interests of the United States.

No revenue has been or could be collected at the ports in California,
because Congress failed to authorize the establishment of custom-houses
or the appointment of officers for that purpose.

The Secretary of the Treasury, by a circular letter addressed to
collectors of the customs on the 7th day of October last, a copy of
which is herewith transmitted, exercised all the power with which he was
invested by law.

In pursuance of the act of the 14th of August last, extending the
benefit of our post-office laws to the people of California, the
Postmaster-General has appointed two agents, who have proceeded, the one
to California and the other to Oregon, with authority to make the
necessary arrangements for carrying its provisions into effect.

The monthly line of mail steamers from Panama to Astoria has been
required to "stop and deliver and take mails at San Diego, Monterey, and
San Francisco." These mail steamers, connected by the Isthmus of Panama
with the line of mail steamers on the Atlantic between New York and
Chagres, will establish a regular mail communication with California.

It is our solemn duty to provide with the least practicable delay for
New Mexico and California regularly organized Territorial governments.
The causes of the failure to do this at the last session of Congress are
well known and deeply to be regretted. With the opening prospects of
increased prosperity and national greatness which the acquisition of
these rich and extensive territorial possessions affords, how irrational
it would be to forego or to reject these advantages by the agitation of
a domestic question which is coeval with the existence of our Government
itself, and to endanger by internal strifes, geographical divisions, and
heated contests for political power, or for any other cause, the harmony
of the glorious Union of our confederated States--that Union which binds
us together as one people, and which for sixty years has been our shield
and protection against every danger. In the eyes of the world and of
posterity how trivial and insignificant will be all our internal
divisions and struggles compared with the preservation of this Union of
the States in all its vigor and with all its countless blessings! No
patriot would foment and excite geographical and sectional divisions. No
lover of his country would deliberately calculate the value of the
Union. Future generations would look in amazement upon the folly of such
a course. Other nations at the present day would look upon it with
astonishment, and such of them as desire to maintain and perpetuate
thrones and monarchical or aristocratical principles will view it with
exultation and delight, because in it they will see the elements of
faction, which they hope must ultimately overturn our system. Ours is
the great example of a prosperous and free self-governed republic,
commanding the admiration and the imitation of all the lovers of freedom
throughout the world. How solemn, therefore, is the duty, how impressive
the call upon us and upon all parts of our country, to cultivate a
patriotic spirit of harmony, of good-fellowship, of compromise and
mutual concession, in the administration of the incomparable system of
government formed by our fathers in the midst of almost insuperable
difficulties, and transmitted to us with the injunction that we should
enjoy its blessings and hand it down unimpaired to those who may come
after us.

In view of the high and responsible duties which we owe to ourselves and
to mankind, I trust you may be able at your present session to approach
the adjustment of the only domestic question which seriously threatens,
or probably ever can threaten, to disturb the harmony and successful
operations of our system.

The immensely valuable possessions of New Mexico and California are
already inhabited by a considerable population. Attracted by their great
fertility, their mineral wealth, their commercial advantages, and the
salubrity of the climate, emigrants from the older States in great
numbers are already preparing to seek new homes in these inviting
regions. Shall the dissimilarity of the domestic institutions in the
different States prevent us from providing for them suitable
governments? These institutions existed at the adoption of the
Constitution, but the obstacles which they interposed were overcome by
that spirit of compromise which is now invoked. In a conflict of
opinions or of interests, real or imaginary, between different sections
of our country, neither can justly demand all which it might desire to
obtain. Each, in the true spirit of our institutions, should concede
something to the other.

Our gallant forces in the Mexican war, by whose patriotism and
unparalleled deeds of arms we obtained these possessions as an indemnity
for our just demands against Mexico, were composed of citizens who
belonged to no one State or section of our Union. They were men from
slaveholding and nonslaveholding States, from the North and the South,
from the East and the West. They were all companions in arms and
fellow-citizens of the same common country, engaged in the same common
cause. When prosecuting that war they were brethren and friends, and
shared alike with each other common toils, dangers, and sufferings. Now,
when their work is ended, when peace is restored, and they return again
to their homes, put off the habiliments of war, take their places in
society, and resume their pursuits in civil life, surely a spirit of
harmony and concession and of equal regard for the rights of all and of
all sections of the Union ought to prevail in providing governments for
the acquired territories--the fruits of their common service. The whole
people of the United States, and of every State, contributed to defray
the expenses of that war, and it would not be just for any one section
to exclude another from all participation in the acquired territory.
This would not be in consonance with the just system of government which
the framers of the Constitution adopted.

The question is believed to be rather abstract than practical whether
slavery ever can or would exist in any portion of the acquired territory
even if it were left to the option of the slaveholding States
themselves. From the nature of the climate and productions in much the
larger portion of it it is certain it could never exist, and in the
remainder the probabilities are it would not. But however this may be,
the question, involving, as it does, a principle of equality of rights
of the separate and several States as equal copartners in the
Confederacy, should not be disregarded.

In organizing governments over these territories no duty imposed on
Congress by the Constitution requires that they should legislate on the
subject of slavery, while their power to do so is not only seriously
questioned, but denied by many of the soundest expounders of that
instrument. Whether Congress shall legislate or not, the people of the
acquired territories, when assembled in convention to form State
constitutions, will possess the sole and exclusive power to determine
for themselves whether slavery shall or shall not exist within their
limits. If Congress shall abstain from interfering with the question,
the people of these territories will be left free to adjust it as they
may think proper when they apply for admission as States into the Union.
No enactment of Congress could restrain the people of any of the
sovereign States of the Union, old or new, North or South, slaveholding
or nonslaveholding, from determining the character of their own domestic
institutions as they may deem wise and proper. Any and all the States
possess this right, and Congress can not deprive them of it. The people
of Georgia might if they chose so alter their constitution as to abolish
slavery within its limits, and the people of Vermont might so alter
their constitution as to admit slavery within its limits. Both States
would possess the right, though, as all know, it is not probable that
either would exert it.

It is fortunate for the peace and harmony of the Union that this
question is in its nature temporary and can only continue for the brief
period which will intervene before California and New Mexico may be
admitted as States into the Union. From the tide of population now
flowing into them it is highly probable that this will soon occur.

Considering the several States and the citizens of the several States as
equals and entitled to equal rights under the Constitution, if this were
an original question it might well be insisted on that the principle of
noninterference is the true doctrine and that Congress could not, in the
absence of any express grant of power, interfere with their relative
rights. Upon a great emergency, however, and under menacing dangers to
the Union, the Missouri compromise line in respect to slavery was
adopted. The same line was extended farther west in the acquisition of
Texas. After an acquiescence of nearly thirty years in the principle of
compromise recognized and established by these acts, and to avoid the
danger to the Union which might follow if it were now disregarded, I
have heretofore expressed the opinion that that line of compromise
should be extended on the parallel of 36  30' from the western boundary
of Texas, where it now terminates, to the Pacific Ocean. This is the
middle ground of compromise, upon which the different sections of the
Union may meet, as they have heretofore met. If this be done, it is
confidently believed a large majority of the people of every section of
the country, however widely their abstract opinions on the subject of
slavery may differ, would cheerfully and patriotically acquiesce in it,
and peace and harmony would again fill our borders.

The restriction north of the line was only yielded to in the case of
Missouri and Texas upon a principle of compromise, made necessary for
the sake of preserving the harmony and possibly the existence of the
Union.

It was upon these considerations that at the close of your last session
I gave my sanction to the principle of the Missouri compromise line by
approving and signing the bill to establish "the Territorial government
of Oregon." From a sincere desire to preserve the harmony of the Union,
and in deference for the acts of my predecessors, I felt constrained to
yield my acquiescence to the extent to which they had gone in
compromising this delicate and dangerous question. But if Congress shall
now reverse the decision by which the Missouri compromise was effected,
and shall propose to extend the restriction over the whole territory,
south as well as north of the parallel of 36  30', it will cease to be a
compromise, and must be regarded as an original question.

If Congress, instead of observing the course of noninterference, leaving
the adoption of their own domestic institutions to the people who may
inhabit these territories, or if, instead of extending the Missouri
compromise line to the Pacific, shall prefer to submit the legal and
constitutional questions which may arise to the decision of the judicial
tribunals, as was proposed in a bill which passed the Senate at your
last session, an adjustment may be effected in this mode. If the whole
subject be referred to the judiciary, all parts of the Union should
cheerfully acquiesce in the final decision of the tribunal created by
the Constitution for the settlement of all questions which may arise
under the Constitution, treaties, and laws of the United States.

Congress is earnestly invoked, for the sake of the Union, its harmony,
and our continued prosperity as a nation, to adjust at its present
session this, the only dangerous question which lies in our path, if not
in some one of the modes suggested, in some other which may be
satisfactory.

In anticipation of the establishment of regular governments over the
acquired territories, a joint commission of officers of the Army and
Navy has been ordered to proceed to the coast of California and Oregon
for the purpose of making reconnoissances and a report as to the proper
sites for the erection of fortifications or other defensive works on
land and of suitable situations for naval stations. The information
which may be expected from a scientific and skillful examination of the
whole face of the coast will be eminently useful to Congress when they
come to consider the propriety of making appropriations for these great
national objects. Proper defenses on land will be necessary for the
security and protection of our possessions, and the establishment of
navy-yards and a dock for the repair and construction of vessels will be
important alike to our Navy and commercial marine. Without such
establishments every vessel, whether of the Navy or of the merchant
service, requiring repair must at great expense come round Cape Horn to
one of our Atlantic yards for that purpose. With such establishments
vessels, it is believed may be built or repaired as cheaply in
California as upon the Atlantic coast. They would give employment to
many of our enterprising shipbuilders and mechanics and greatly
facilitate and enlarge our commerce in the Pacific.

As it is ascertained that mines of gold, silver, copper, and quicksilver
exist in New Mexico and California, and that nearly all the lands where
they are found belong to the United States, it is deemed important to
the public interest that provision be made for a geological and
mineralogical examination of these regions. Measures should be adopted
to preserve the mineral lands, especially such as contain the precious
metals, for the use of the United States, or, if brought into market, to
separate them from the farming lands and dispose of them in such manner
as to secure a large return of money to the Treasury and at the same
time to lead to the development of their wealth by individual
proprietors and purchasers. To do this it will be necessary to provide
for an immediate survey and location of the lots. If Congress should
deem it proper to dispose of the mineral lands, they should be sold in
small quantities and at a fixed minimum price.

I recommend that surveyors-general's offices be authorized to be
established in New Mexico and California and provision made for
surveying and bringing the public lands into market at the earliest
practicable period. In disposing of these lands, I recommend that the
right of preemption be secured and liberal grants made to the early
emigrants who have settled or may settle upon them.

It will be important to extend our revenue laws over these territories,
and especially over California, at an early period. There is already a
considerable commerce with California, and until ports of entry shall be
established and collectors appointed no revenue can be received.

If these and other necessary and proper measures be adopted for the
development of the wealth and resources of New Mexico and California and
regular Territorial governments be established over them, such will
probably be the rapid enlargement of our commerce and navigation and
such the addition to the national wealth that the present generation may
live to witness the controlling commercial and monetary power of the
world transferred from London and other European emporiums to the city
of New York.

The apprehensions which were entertained by some of our statesmen in the
earlier periods of the Government that our system was incapable of
operating with sufficient energy and success over largely extended
territorial limits, and that if this were attempted it would fall to
pieces by its own weakness, have been dissipated by our experience. By
the division of power between the States and Federal Government the
latter is found to operate with as much energy in the extremes as in the
center. It is as efficient in the remotest of the thirty States which
now compose the Union as it was in the thirteen States which formed our
Constitution. Indeed, it may well be doubted whether if our present
population had been confined within the limits of the original thirteen
States the tendencies to centralization and consolidation would not have
been such as to have encroached upon the essential reserved rights of
the States, and thus to have made the Federal Government a widely
different one, practically, from what it is in theory and was intended
to be by its framers. So far from entertaining apprehensions of the
safety of our system by the extension of our territory, the belief is
confidently entertained that each new State gives strength and an
additional guaranty for the preservation of the Union itself.

In pursuance of the provisions of the thirteenth article of the treaty
of peace, friendship, limits, and settlement with the Republic of
Mexico, and of the act of July 29, 1848, claims of our citizens, which
had been "already liquidated and decided, against the Mexican Republic"
amounting, with the interest thereon, to $2,023,832.51 have been
liquidated and paid. There remain to be paid of these claims $74,192.26.

Congress at its last session having made no provision for executing the
fifteenth article of the treaty, by which the United States assume to
make satisfaction for the "unliquidated claims" of our citizens against
Mexico to "an amount not exceeding three and a quarter millions of
dollars," the subject is again recommended to your favorable
consideration.

The exchange of ratifications of the treaty with Mexico took place on
the 30th of May, 1848. Within one year after that time the commissioner
and surveyor which each Government stipulates to appoint are required to
meet "at the port of San Diego and proceed to run and mark the said
boundary in its whole course to the mouth of the Rio Bravo del Norte."
It will be seen from this provision that the period within which a
commissioner and surveyor of the respective Governments are to meet at
San Diego will expire on the 30th of May, 1849. Congress at the close of
its last session made an appropriation for "the expenses of running and
marking the boundary line" between the two countries, but did not fix
the amount of salary which should be paid to the commissioner and
surveyor to be appointed on the part of the United States. It is
desirable that the amount of compensation which they shall receive
should be prescribed by law, and not left, as at present, to Executive
discretion.

Measures were adopted at the earliest practicable period to organize the
"Territorial government of Oregon," as authorized by the act of the 14th
of August last. The governor and marshal of the Territory, accompanied
by a small military escort, left the frontier of Missouri in September
last, and took the southern route, by the way of Santa Fe and the river
Gila, to California, with the intention of proceeding thence in one of
our vessels of war to their destination. The governor was fully advised
of the great importance of his early arrival in the country, and it is
confidently believed he may reach Oregon in the latter part of the
present month or early in the next. The other officers for the Territory
have proceeded by sea.

In the month of May last I communicated information to Congress that an
Indian war had broken out in Oregon, and recommended that authority be
given to raise an adequate number of volunteers to proceed without delay
to the assistance of our fellow-citizens in that Territory. The
authority to raise such a force not having been granted by Congress, as
soon as their services could be dispensed with in Mexico orders were
issued to the regiment of mounted riflemen to proceed to Jefferson
Barracks, in Missouri, and to prepare to march to Oregon as soon as the
necessary provision could be made. Shortly before it was ready to march
it was arrested by the provision of the act passed by Congress on the
last day of the last session, which directed that all the
noncommissioned officers, musicians, and privates of that regiment who
had been in service in Mexico should, upon their application, be
entitled to be discharged. The effect of this provision was to disband
the rank and file of the regiment, and before their places could be
filled by recruits the season had so far advanced that it was
impracticable for it to proceed until the opening of the next spring.

In the month of October last the accompanying communication was received
from the governor of the temporary government of Oregon, giving
information of the continuance of the Indian disturbances and of the
destitution and defenseless condition of the inhabitants. Orders were
immediately transmitted to the commander of our squadron in the Pacific
to dispatch to their assistance a part of the naval forces on that
station, to furnish them with arms and ammunition, and to continue to
give them such aid and protection as the Navy could afford until the
Army could reach the country.

It is the policy of humanity, and one which has always been pursued by
the United States, to cultivate the good will of the aboriginal tribes
of this continent and to restrain them from making war and indulging in
excesses by mild means rather than by force. That this could have been
done with the tribes in Oregon had that Territory been brought under the
government of our laws at an earlier period, and had other suitable
measures been adopted by Congress, such as now exist in our intercourse
with the other Indian tribes within our limits, can not be doubted.
Indeed, the immediate and only cause of the existing hostility of the
Indians of Oregon is represented to have been the long delay of the
United States in making to them some trifling compensation, in such
articles as they wanted, for the country now occupied by our emigrants,
which the Indians claimed and over which they formerly roamed. This
compensation had been promised to them by the temporary government
established in Oregon, but its fulfillment had been postponed from time
to time for nearly two years, whilst those who made it had been
anxiously waiting for Congress to establish a Territorial government
over the country. The Indians became at length distrustful of their good
faith and sought redress by plunder and massacre, which finally led to
the present difficulties. A few thousand dollars in suitable presents,
as a compensation for the country which had been taken possession of by
our citizens, would have satisfied the Indians and have prevented the
war. A small amount properly distributed, it is confidently believed,
would soon restore quiet. In this Indian war our fellow-citizens of
Oregon have been compelled to take the field in their own defense, have
performed valuable military services, and been subjected to expenses
which have fallen heavily upon them. Justice demands that provision
should be made by Congress to compensate them for their services and to
refund to them the necessary expenses which they have incurred.

I repeat the recommendation heretofore made to Congress, that provision
be made for the appointment of a suitable number of Indian agents to
reside among the tribes of Oregon, and that a small sum be appropriated
to enable these agents to cultivate friendly relations with them. If
this be done, the presence of a small military force will be all that is
necessary to keep them in check and preserve peace. I recommend that
similar provisions be made as regards the tribes inhabiting northern
Texas, New Mexico, California, and the extensive region lying between
our settlements in Missouri and these possessions, as the most effective
means of preserving peace upon our borders and within the recently
acquired territories.

The Secretary of the Treasury will present in his annual report a highly
satisfactory statement of the condition of the finances.

The imports for the fiscal year ending on the 30th of June last were of
the value of $154,977,876, of which the amount exported was $21,128,010,
leaving $133,849,866 in the country for domestic use. The value of the
exports for the same period was $154,032,131, consisting of domestic
productions amounting to $132,904,121 and $21,128,010 of foreign
articles. The receipts into the Treasury for the same period, exclusive
of loans, amounted to $35,436,750.59, of which there was derived from
customs $31,757,070.96, from sales of public lands $3,328,642.56, and
from miscellaneous and incidental sources $351,037.07.

It will be perceived that the revenue from customs for the last fiscal
year exceeded by $757,070.96 the estimate of the Secretary of the
Treasury in his last annual report, and that the aggregate receipts
during the same period from customs, lands, and miscellaneous sources
also exceeded the estimate by the sum of $536,750.59, indicating,
however, a very near approach in the estimate to the actual result.

The expenditures during the fiscal year ending on the 30th of June last,
including those for the war and exclusive of payments of principal and
interest for the public debt, were $42,811,970.03.

It is estimated that the receipts into the Treasury for the fiscal year
ending on the 30th of June, 1849, including the balance in the Treasury
on the 1st of July last, will amount to the sum of $57,048,969.90, of
which $32,000,000, it is estimated, will be derived from customs,
$3,000,000 from the sales of the public lands, and $1,200,000 from
miscellaneous and incidental sources, including the premium upon the
loan, and the amount paid and to be paid into the Treasury on account of
military contributions in Mexico, and the sales of arms and vessels and
other public property rendered unnecessary for the use of the Government
by the termination of the war, and $20,695,435.30 from loans already
negotiated, including Treasury notes funded, which, together with the
balance in the Treasury on the 1st of July last, make the sum estimated.

The expenditures for the same period, including the necessary payment on
account of the principal and interest of the public debt, and the
principal and interest of the first installment due to Mexico on the
30th of May next, and other expenditures growing out of the war to be
paid during the present year, will amount, including the reimbursement
of Treasury notes, to the sum of $54,195,275.06, leaving an estimated
balance in the Treasury on the 1st of July, 1849, of $2,853,694.84.

The Secretary of the Treasury will present, as required by law, the
estimate of the receipts and expenditures for the next fiscal year. The
expenditures as estimated for that year are $33,213,152.73, including
$3,799,102.18 for the interest on the public debt and $3,540,000 for the
principal and interest due to Mexico on the 30th of May, 1850, leaving
the sum of $25,874,050.35, which, it is believed, will be ample for the
ordinary peace expenditures.

The operations of the tariff act of 1846 have been such during the past
year as fully to meet the public expectation and to confirm the opinion
heretofore expressed of the wisdom of the change in our revenue system
which was effected by it. The receipts under it into the Treasury for
the first fiscal year after its enactment exceeded by the sum of
$5,044,403.09 the amount collected during the last fiscal year under the
tariff act of 1842, ending the 30th of June, 1846. The total revenue
realized from the commencement of its operation, on the 1st of December,
1846, until the close of the last quarter, on the 30th of September
last, being twenty-two months, was $56,654,563.79, being a much larger
sum than was ever before received from duties during any equal period
under the tariff acts of 1824, 1828, 1832, and 1842. Whilst by the
repeal of highly protective and prohibitory duties the revenue has been
increased, the taxes on the people have been diminished. They have been
relieved from the heavy amounts with which they were burthened under
former laws in the form of increased prices or bounties paid to favored
classes and pursuits.

The predictions which were made that the tariff act of 1846 would reduce
the amount of revenue below that collected under the act of 1842, and
would prostrate the business and destroy the prosperity of the country,
have not been verified. With an increased and increasing revenue, the
finances are in a highly flourishing condition. Agriculture, commerce,
and navigation are prosperous; the prices of manufactured fabrics and of
other products are much less injuriously affected than was to have been
anticipated from the unprecedented revulsions which during the last and
the present year have overwhelmed the industry and paralyzed the credit
and commerce of so many great and enlightened nations of Europe.

Severe commercial revulsions abroad have always heretofore operated to
depress and often to affect disastrously almost every branch of American
industry. The temporary depression of a portion of our manufacturing
interests is the effect of foreign causes, and is far less severe than
has prevailed on all former similar occasions.

It is believed that, looking to the great aggregate of all our
interests, the whole country was never more prosperous than at the
present period, and never more rapidly advancing in wealth and
population. Neither the foreign war in which we have been involved, nor
the loans which have absorbed so large a portion of our capital, nor the
commercial revulsion in Great Britain in 1847, nor the paralysis of
credit and commerce throughout Europe in 1848, have affected injuriously
to any considerable extent any of the great interests of the country or
arrested our onward march to greatness, wealth, and power.

Had the disturbances in Europe not occurred, our commerce would
undoubtedly have been still more extended, and would have added still
more to the national wealth and public prosperity. But notwithstanding
these disturbances, the operations of the revenue system established by
the tariff act of 1846 have been so generally beneficial to the
Government and the business of the country that no change in its
provisions is demanded by a wise public policy, and none is recommended.

The operations of the constitutional treasury established by the act of
the 6th of August, 1846, in the receipt, custody, and disbursement of
the public money have continued to be successful. Under this system the
public finances have been carried through a foreign war, involving the
necessity of loans and extraordinary expenditures and requiring distant
transfers and disbursements, without embarrassment, and no loss has
occurred of any of the public money deposited under its provisions.
Whilst it has proved to be safe and useful to the Government, its
effects have been most beneficial upon the business of the country. It
has tended powerfully to secure an exemption from that inflation and
fluctuation of the paper currency so injurious to domestic industry and
rendering so uncertain the rewards of labor, and, it is believed, has
largely contributed to preserve the whole country from a serious
commercial revulsion, such as often occurred under the bank deposit
system. In the year 1847 there was a revulsion in the business of Great
Britain of great extent and intensity, which was followed by failures in
that Kingdom unprecedented in number and amount of losses. This is
believed to be the first instance when such disastrous bankruptcies,
occurring in a country with which we have such extensive commerce,
produced little or no injurious effect upon our trade or currency. We
remained but little affected in our money market, and our business and
industry were still prosperous and progressive.

During the present year nearly the whole continent of Europe has been
convulsed by civil war and revolutions, attended by numerous
bankruptcies, by an unprecedented fall in their public securities, and
an almost universal paralysis of commerce and industry; and yet,
although our trade and the prices of our products must have been
somewhat unfavorably affected by these causes, we have escaped a
revulsion, our money market is comparatively easy, and public and
private credit have advanced and improved.

It is confidently believed that we have been saved from their effect by
the salutary operation of the constitutional treasury. It is certain
that if the twenty-four millions of specie imported into the country
during the fiscal year ending on the 30th of June, 1847, had gone into
the banks, as to a great extent it must have done, it would in the
absence of this system have been made the basis of augmented bank paper
issues, probably to an amount not less than $60,000,000 or $70,000,000,
producing, as an inevitable consequence of an inflated currency,
extravagant prices for a time and wild speculation, which must have been
followed, on the reflux to Europe the succeeding year of so much of that
specie, by the prostration of the business of the country, the
suspension of the banks, and most extensive bankruptcies. Occurring, as
this would have done, at a period when the country was engaged in a
foreign war, when considerable loans of specie were required for distant
disbursements, and when the banks, the fiscal agents of the Government
and the depositories of its money, were suspended, the public credit
must have sunk, and many millions of dollars, as was the case during the
War of 1812, must have been sacrificed in discounts upon loans and upon
the depreciated paper currency which the Government would have been
compelled to use.

Under the operations of the constitutional treasury not a dollar has
been lost by the depreciation of the currency. The loans required to
prosecute the war with Mexico were negotiated by the Secretary of the
Treasury above par, realizing a large premium to the Government. The
restraining effect of the system upon the tendencies to excessive paper
issues by banks has saved the Government from heavy losses and thousands
of our business men from bankruptcy and ruin. The wisdom of the system
has been tested by the experience of the last two years, and it is the
dictate of sound policy that it should remain undisturbed. The
modifications in some of the details of this measure, involving none of
its essential principles, heretofore recommended, are again presented
for your favorable consideration.

In my message of the 6th of July last, transmitting to Congress the
ratified treaty of peace with Mexico, I recommended the adoption of
measures for the speedy payment of the public debt. In reiterating that
recommendation I refer you to the considerations presented in that
message in its support. The public debt, including that authorized to be
negotiated in pursuance of existing laws, and including Treasury notes,
amounted at that time to $65,778,450.41.

Funded stock of the United States amounting to about half a million of
dollars has been purchased, as authorized by law, since that period, and
the public debt has thus been reduced, the details of which will be
presented in the annual report of the Secretary of the Treasury.

The estimates of expenditures for the next fiscal year, submitted by the
Secretary of the Treasury, it is believed will be ample for all
necessary purposes. If the appropriations made by Congress shall not
exceed the amount estimated, the means in the Treasury will be
sufficient to defray all the expenses of the Government, to pay off the
next installment of $3,000,000 to Mexico, which will fall due on the
30th of May next, and still a considerable surplus will remain, which
should be applied to the further purchase of the public stock and
reduction of the debt. Should enlarged appropriations be made, the
necessary consequence will be to postpone the payment of the debt.
Though our debt, as compared with that of most other nations, is small,
it is our true policy, and in harmony with the genius of our
institutions, that we should present to the world the rare spectacle of
a great Republic, possessing vast resources and wealth, wholly exempt
from public indebtedness. This would add still more to our strength, and
give to us a still more commanding position among the nations of the
earth.

The public expenditures should be economical, and be confined to such
necessary objects as are clearly within the powers of Congress. All such
as are not absolutely demanded should be postponed, and the payment of
the public debt at the earliest practicable period should be a cardinal
principle of our public policy.

For the reason assigned in my last annual message, I repeat the
recommendation that a branch of the Mint of the United States be
established at the city of New York. The importance of this measure is
greatly increased by the acquisition of the rich mines of the precious
metals in New Mexico and California, and especially in the latter.

I repeat the recommendation heretofore made in favor of the graduation
and reduction of the price of such of the public lands as have been long
offered in the market and have remained unsold, and in favor of
extending the rights of preemption to actual settlers on the unsurveyed
as well as the surveyed lands.

The condition and operations of the Army and the state of other branches
of the public service under the supervision of the War Department are
satisfactorily presented in the accompanying report of the Secretary of
War.

On the return of peace our forces were withdrawn from Mexico, and the
volunteers and that portion of the Regular Army engaged for the war were
disbanded. Orders have been issued for stationing the forces of our
permanent establishment at various positions in our extended country
where troops may be required. Owing to the remoteness of some of these
positions, the detachments have not yet reached their destination.
Notwithstanding the extension of the limits of our country and the
forces required in the new territories, it is confidently believed that
our present military establishment is sufficient for all exigencies so
long as our peaceful relations remain undisturbed.

Of the amount of military contributions collected in Mexico, the sum of
$769,650 was applied toward the payment of the first installment due
under the treaty with Mexico. The further sum of $346,369.30 has been
paid into the Treasury, and unexpended balances still remain in the
hands of disbursing officers and those who were engaged in the
collection of these moneys. After the proclamation of peace no further
disbursements were made of any unexpended moneys arising from this
source. The balances on hand were directed to be paid into the Treasury,
and individual claims on the fund will remain unadjusted until Congress
shall authorize their settlement and payment. These claims are not
considerable in number or amount.

I recommend to your favorable consideration the suggestions of the
Secretary of War and the Secretary of the Navy in regard to legislation
on this subject.

Our Indian relations are presented in a most favorable view in the
report from the War Department. The wisdom of our policy in regard to
the tribes within our limits is clearly manifested by their improved and
rapidly improving condition.

A most important treaty with the Menomonies has been recently negotiated
by the Commissioner of Indian Affairs in person, by which all their land
in the State of Wisconsin--being about 4,000,000 acres--has been ceded
to the United States. This treaty will be submitted to the Senate for
ratification at an early period of your present session.

Within the last four years eight important treaties have been negotiated
with different Indian tribes, and at a cost of $1,842,000; Indian lands
to the amount of more than 18,500,000 acres have been ceded to the
United States, and provision has been made for settling in the country
west of the Mississippi the tribes which occupied this large extent of
the public domain. The title to all the Indian lands within the several
States of our Union, with the exception of a few small reservations, is
now extinguished, and a vast region opened for settlement and
cultivation.

The accompanying report of the Secretary of the Navy gives a
satisfactory exhibit of the operations and condition of that branch of
the public service.

A number of small vessels, suitable for entering the mouths of rivers,
were judiciously purchased during the war, and gave great efficiency to
the squadron in the Gulf of Mexico. On the return of peace, when no
longer valuable for naval purposes, and liable to constant
deterioration, they were sold and the money placed in the Treasury.

The number of men in the naval service authorized by law during the war
has been reduced by discharges below the maximum fixed for the peace
establishment. Adequate squadrons are maintained in the several quarters
of the globe where experience has shown their services may be most
usefully employed, and the naval service was never in a condition of
higher discipline or greater efficiency.

I invite attention to the recommendation of the Secretary of the Navy on
the subject of the Marine Corps. The reduction of the Corps at the end
of the war required that four officers of each of the three lower grades
should be dropped from the rolls. A board of officers made the
selection, and those designated were necessarily dismissed, but without
any alleged fault. I concur in opinion with the Secretary that the
service would be improved by reducing the number of landsmen and
increasing the marines. Such a measure would justify an increase of the
number of officers to the extent of the reduction by dismissal, and
still the Corps would have fewer officers than a corresponding number of
men in the Army.

The contracts for the transportation of the mail in steamships,
convertible into war steamers, promise to realize all the benefits to
our commerce and to the Navy which were anticipated. The first steamer
thus secured to the Government was launched in January, 1847. There are
now seven, and in another year there will probably be not less than
seventeen afloat. While this great national advantage is secured, our
social and commercial intercourse is increased and promoted with
Germany, Great Britain, and other parts of Europe, with all the
countries on the west coast of our continent, especially with Oregon and
California, and between the northern and southern sections of the United
States. Considerable revenue may be expected from postages, but the
connected line from New York to Chagres, and thence across the Isthmus
to Oregon, can not fail to exert a beneficial influence, not now to be
estimated, on the interests of the manufactures, commerce, navigation,
and currency of the United States. As an important part of the system, I
recommend to your favorable consideration the establishment of the
proposed line of steamers between New Orleans and Vera Cruz. It promises
the most happy results in cementing friendship between the two Republics
and extending reciprocal benefits to the trade and manufactures of both.

The report of the Postmaster-General will make known to you the
operations of that Department for the past year.

It is gratifying to find the revenues of the Department, under the rates
of postage now established by law, so rapidly increasing. The gross
amount of postages during the last fiscal year amounted to $4,371,077,
exceeding the annual average received for the nine years immediately
preceding the passage of the act of the 3d of March, 1845, by the sum of
$6,453, and exceeding the amount received for the year ending the 30th
of June, 1847, by the sum of $425,184.

The expenditures for the year, excluding the sum of $94,672, allowed by
Congress at its last session to individual claimants, and including the
sum of $100,500, paid for the services of the line of steamers between
Bremen and New York, amounted to $4,198,845, which is less than the
annual average for the nine years previous to the act of 1845 by
$300,748.

The mail routes on the 30th day of June last were 163,208 miles in
extent, being an increase during the last year of 9,390 miles. The mails
were transported over them during the same time 41,012,579 miles, making
an increase of transportation for the year of 2,124,680 miles, whilst
the expense was less than that of the previous year by $4,235.

The increase in the mail transportation within the last three years has
been 5,378,310 miles, whilst the expenses were reduced $456,738, making
an increase of service at the rate of 15 per cent and a reduction in the
expenses of more than 15 per cent.

During the past year there have been employed, under contracts with the
Post-Office Department, two ocean steamers in conveying the mails
monthly between New York and Bremen, and one, since October last,
performing semimonthly service between Charleston and Havana; and a
contract has been made for the transportation of the Pacific mails
across the Isthmus from Chagres to Panama.

Under the authority given to the Secretary of the Navy, three ocean
steamers have been constructed and sent to the Pacific, and are expected
to enter upon the mail service between Panama and Oregon and the
intermediate ports on the 1st of January next; and a fourth has been
engaged by him for the service between Havana and Chagres, so that a
regular monthly mail line will be kept up after that time between the
United States and our territories on the Pacific.

Notwithstanding this great increase in the mail service, should the
revenue continue to increase the present year as it did in the last,
there will be received near $450,000 more than the expenditures.

These considerations have satisfied the Postmaster-General that, with
certain modifications of the act of 1845, the revenue may be still
further increased and a reduction of postages made to a uniform rate of
5 cents, without an interference with the principle, which has been
constantly and properly enforced, of making that Department sustain
itself.

A well-digested cheap-postage system is the best means of diffusing
intelligence among the people, and is of so much importance in a country
so extensive as that of the United States that I recommend to your
favorable consideration the suggestions of the Postmaster-General for
its improvement.

Nothing can retard the onward progress of our country and prevent us
from assuming and maintaining the first rank among nations but a
disregard of the experience of the past and a recurrence to an unwise
public policy. We have just closed a foreign war by an honorable
peace--a war rendered necessary and unavoidable in vindication of the
national rights and honor. The present condition of the country is
similar in some respects to that which existed immediately after the
close of the war with Great Britain in 1815, and the occasion is deemed
to be a proper one to take a retrospect of the measures of public policy
which followed that war. There was at that period of our history a
departure from our earlier policy. The enlargement of the powers of the
Federal Government by construction, which obtained, was not warranted by
any just interpretation of the Constitution. A few years after the close
of that war a series of measures was adopted which, united and combined,
constituted what was termed by their authors and advocates the "American
system."

The introduction of the new policy was for a time favored by the
condition of the country, by the heavy debt which had been contracted
during the war, by the depression of the public credit, by the deranged
state of the finances and the currency, and by the commercial and
pecuniary embarrassment which extensively prevailed. These were not the
only causes which led to its establishment. The events of the war with
Great Britain and the embarrassments which had attended its prosecution
had left on the minds of many of our statesmen the impression that our
Government was not strong enough, and that to wield its resources
successfully in great emergencies, and especially in war, more power
should be concentrated in its hands. This increased power they did not
seek to obtain by the legitimate and prescribed mode--an amendment of
the Constitution--but by construction. They saw Governments in the Old
World based upon different orders of society, and so constituted as to
throw the whole power of nations into the hands of a few, who taxed and
controlled the many without responsibility or restraint. In that
arrangement they conceived the strength of nations in war consisted.
There was also something fascinating in the ease, luxury, and display of
the higher orders, who drew their wealth from the toil of the laboring
millions. The authors of the system drew their ideas of political
economy from what they had witnessed in Europe, and particularly in
Great Britain. They had viewed the enormous wealth concentrated in few
hands and had seen the splendor of the overgrown establishments of an
aristocracy which was upheld by the restrictive policy. They forgot to
look down upon the poorer classes of the English population, upon whose
daily and yearly labor the great establishments they so much admired
were sustained and supported. They failed to perceive that the scantily
fed and half-clad operatives were not only in abject poverty, but were
bound in chains of oppressive servitude for the benefit of favored
classes, who were the exclusive objects of the care of the Government.

It was not possible to reconstruct society in the United States upon the
European plan. Here there was a written Constitution, by which orders
and titles were not recognized or tolerated. A system of measures was
therefore devised, calculated, if not intended, to withdraw power
gradually and silently from the States and the mass of the people, and
by construction to approximate our Government to the European models,
substituting an aristocracy of wealth for that of orders and titles.

Without reflecting upon the dissimilarity of our institutions and of the
condition of our people and those of Europe, they conceived the vain
idea of building up in the United States a system similar to that which
they admired abroad. Great Britain had a national bank of large capital,
in whose hands was concentrated the controlling monetary and financial
power of the nation--an institution wielding almost kingly power, and
exerting vast influence upon all the operations of trade and upon the
policy of the Government itself. Great Britain had an enormous public
debt, and it had become a part of her public policy to regard this as a
"public blessing." Great Britain had also a restrictive policy, which
placed fetters and burdens on trade and trammeled the productive
industry of the mass of the nation. By her combined system of policy the
landlords and other property holders were protected and enriched by the
enormous taxes which were levied upon the labor of the country for their
advantage. Imitating this foreign policy, the first step in establishing
the new system in the United States was the creation of a national bank.
Not foreseeing the dangerous power and countless evils which such an
institution might entail on the country, nor perceiving the connection
which it was designed to form between the bank and the other branches of
the miscalled "American system," but feeling the embarrassments of the
Treasury and of the business of the country consequent upon the war,
some of our statesmen who had held different and sounder views were
induced to yield their scruples and, indeed, settled convictions of its
unconstitutionality, and to give it their sanction as an expedient which
they vainly hoped might produce relief. It was a most unfortunate error,
as the subsequent history and final catastrophe of that dangerous and
corrupt institution have abundantly proved. The bank, with its numerous
branches ramified into the States, soon brought many of the active
political and commercial men in different sections of the country into
the relation of debtors to it and dependents upon it for pecuniary
favors, thus diffusing throughout the mass of society a great number of
individuals of power and influence to give tone to public opinion and to
act in concert in cases of emergency. The corrupt power of such a
political engine is no longer a matter of speculation, having been
displayed in numerous instances, but most signally in the political
struggles of 1832, 1833, and 1834 in opposition to the public will
represented by a fearless and patriotic President.

But the bank was but one branch of the new system. A public debt of more
than $120,000,000 existed, and it is not to be disguised that many of
the authors of the new system did not regard its speedy payment as
essential to the public prosperity, but looked upon its continuance as
no national evil. Whilst the debt existed it furnished aliment to the
national bank and rendered increased taxation necessary to the amount of
the interest, exceeding $7,000,000 annually.

This operated in harmony with the next branch of the new system, which
was a high protective tariff. This was to afford bounties to favored
classes and particular pursuits at the expense of all others. A
proposition to tax the whole people for the purpose of enriching a few
was too monstrous to be openly made. The scheme was therefore veiled
under the plausible but delusive pretext of a measure to protect "home
industry," and many of our people were for a time led to believe that a
tax which in the main fell upon labor was for the benefit of the laborer
who paid it. This branch of the system involved a partnership between
the Government and the favored classes, the former receiving the
proceeds of the tax imposed on articles imported and the latter the
increased price of similar articles produced at home, caused by such
tax. It is obvious that the portion to be received by the favored
classes would, as a general rule, be increased in proportion to the
increase of the rates of tax imposed and diminished as those rates were
reduced to the revenue standard required by the wants of the Government.
The rates required to produce a sufficient revenue for the ordinary
expenditures of Government for necessary purposes were not likely to
give to the private partners in this scheme profits sufficient to
satisfy their cupidity, and hence a variety of expedients and pretexts
were resorted to for the purpose of enlarging the expenditures and
thereby creating a necessity for keeping up a high protective tariff.
The effect of this policy was to interpose artificial restrictions upon
the natural course of the business and trade of the country, and to
advance the interests of large capitalists and monopolists at the
expense of the great mass of the people, who were taxed to increase
their wealth.

Another branch of this system was a comprehensive scheme of internal
improvements, capable of indefinite enlargement and sufficient to
swallow up as many millions annually as could be exacted from the
foreign commerce of the country. This was a convenient and necessary
adjunct of the protective tariff. It was to be the great absorbent of
any surplus which might at any time accumulate in the Treasury and of
the taxes levied on the people, not for necessary revenue purposes, but
for the avowed object of affording protection to the favored classes.

Auxiliary to the same end, if it was not an essential part of the system
itself, was the scheme, which at a later period obtained, for
distributing the proceeds of the sales of the public lands among the
States. Other expedients were devised to take money out of the Treasury
and prevent its coming in from any other source than the protective
tariff. The authors and supporters of the system were the advocates of
the largest expenditures, whether for necessary or useful purposes or
not, because the larger the expenditures the greater was the pretext for
high taxes in the form of protective duties.

These several measures were sustained by popular names and plausible
arguments, by which thousands were deluded. The bank was represented to
be an indispensable fiscal agent for the Government; was to equalize
exchanges and to regulate and furnish a sound currency, always and
everywhere of uniform value. The protective tariff was to give
employment to "American labor" at advanced prices; was to protect "home
industry" and furnish a steady market for the farmer. Internal
improvements were to bring trade into every neighborhood and enhance the
value of every man's property. The distribution of the land money was to
enrich the States, finish their public works, plant schools throughout
their borders, and relieve them from taxation. But the fact that for
every dollar taken out of the Treasury for these objects a much larger
sum was transferred from the pockets of the people to the favored
classes was carefully concealed, as was also the tendency, if not the
ultimate design, of the system to build up an aristocracy of wealth, to
control the masses of society, and monopolize the political power of the
country.

The several branches of this system were so intimately blended together
that in their operation each sustained and strengthened the others.
Their joint operation was to add new burthens of taxation and to
encourage a largely increased and wasteful expenditure of public money.
It was the interest of the bank that the revenue collected and the
disbursements made by the Government should be large, because, being the
depository of the public money, the larger the amount the greater would
be the bank profits by its use. It was the interest of the favored
classes, who were enriched by the protective tariff, to have the rates
of that protection as high as possible, for the higher those rates the
greater would be their advantage. It was the interest of the people of
all those sections and localities who expected to be benefited by
expenditures for internal improvements that the amount collected should
be as large as possible, to the end that the sum disbursed might also be
the larger. The States, being the beneficiaries in the distribution of
the land money, had an interest in having the rates of tax imposed by
the protective tariff large enough to yield a sufficient revenue from
that source to meet the wants of the Government without disturbing or
taking from them the land fund; so that each of the branches
constituting the system had a common interest in swelling the public
expenditures. They had a direct interest in maintaining the public debt
unpaid and increasing its amount, because this would produce an annual
increased drain upon the Treasury to the amount of the interest and
render augmented taxes necessary. The operation and necessary effect of
the whole system were to encourage large and extravagant expenditures,
and thereby to increase the public patronage, and maintain a rich and
splendid government at the expense of a taxed and impoverished people.

It is manifest that this scheme of enlarged taxation and expenditures,
had it continued to prevail, must soon have converted the Government of
the Union, intended by its framers to be a plain, cheap, and simple
confederation of States, united together for common protection and
charged with a few specific duties, relating chiefly to our foreign
affairs, into a consolidated empire, depriving the States of their
reserved rights and the people of their just power and control in the
administration of their Government. In this manner the whole form and
character of the Government would be changed, not by an amendment of the
Constitution, but by resorting to an unwarrantable and unauthorized
construction of that instrument.

The indirect mode of levying the taxes by a duty on imports prevents the
mass of the people from readily perceiving the amount they pay, and has
enabled the few who are thus enriched, and who seek to wield the
political power of the country, to deceive and delude them. Were the
taxes collected by a direct levy upon the people, as is the case in the
States, this could not occur.

The whole system was resisted from its inception by many of our ablest
statesmen, some of whom doubted its constitutionality and its
expediency, while others believed it was in all its branches a flagrant
and dangerous infraction of the Constitution.

That a national bank, a protective tariff--levied not to raise the
revenue needed, but for protection merely--internal improvements, and
the distribution of the proceeds of the sale of the public lands are
measures without the warrant of the Constitution would, upon the
maturest consideration, seem to be clear. It is remarkable that no one
of these measures, involving such momentous consequences, is authorized
by any express grant of power in the Constitution. No one of them is
"incident to, as being necessary and proper for the execution of, the
specific powers" granted by the Constitution. The authority under which
it has been attempted to justify each of them is derived from inferences
and constructions of the Constitution which its letter and its whole
object and design do not warrant. Is it to be conceived that such
immense powers would have been left by the framers of the Constitution
to mere inferences and doubtful constructions? Had it been intended to
confer them on the Federal Government, it is but reasonable to conclude
that it would have been done by plain and unequivocal grants. This was
not done; but the whole structure of which the "American system"
consisted was reared on no other or better foundation than forced
implications and inferences of power, which its authors assumed might be
deduced by construction from the Constitution.

But it has been urged that the national bank, which constituted so
essential a branch of this combined system of measures, was not a new
measure, and that its constitutionality had been previously sanctioned,
because a bank had been chartered in 1791 and had received the official
signature of President Washington. A few facts will show the just weight
to which this precedent should be entitled as bearing upon the question
of constitutionality.

Great division of opinion upon the subject existed in Congress. It is
well known that President Washington entertained serious doubts both as
to the constitutionality and expediency of the measure, and while the
bill was before him for his official approval or disapproval so great
were these doubts that he required "the opinion in writing" of the
members of his Cabinet to aid him in arriving at a decision. His Cabinet
gave their opinions and were divided upon the subject, General Hamilton
being in favor of and Mr. Jefferson and Mr. Randolph being opposed to
the constitutionality and expediency of the bank. It is well known also
that President Washington retained the bill from Monday, the 14th, when
it was presented to him, until Friday, the 25th of February, being the
last moment permitted him by the Constitution to deliberate, when he
finally yielded to it his reluctant assent and gave it his signature. It
is certain that as late as the 23d of February, being the ninth day
after the bill was presented to him, he had arrived at no satisfactory
conclusion, for on that day he addressed a note to General Hamilton in
which he informs him that "this bill was presented to me by the joint
committee of Congress at 12 o'clock on Monday, the 14th instant," and he
requested his opinion "to what precise period, by legal interpretation
of the Constitution, can the President retain it in his possession
before it becomes a law by the lapse of ten days." If the proper
construction was that the day on which the bill was presented to the
President and the day on which his action was had upon it were both to
be counted inclusive, then the time allowed him within which it would be
competent for him to return it to the House in which it originated with
his objections would expire on Thursday, the 24th of February. General
Hamilton on the same day returned an answer, in which he states:

I give it as my opinion that you have ten days exclusive of that on
which the bill was delivered to you and Sundays; hence, in the present
case if it is returned on Friday it will be in time.

By this construction, which the President adopted, he gained another day
for deliberation, and it was not until the 25th of February that he
signed the bill, thus affording conclusive proof that he had at last
obtained his own consent to sign it not without great and almost
insuperable difficulty. Additional light has been recently shed upon the
serious doubts which he had on the subject, amounting at one time to a
conviction that it was his duty to withhold his approval from the bill.
This is found among the manuscript papers of Mr. Madison, authorized to
be purchased for the use of the Government by an act of the last session
of Congress, and now for the first time accessible to the public. From
these papers it appears that President Washington, while he yet held the
bank bill in his hands, actually requested Mr. Madison, at that time a
member of the House of Representatives, to prepare the draft of a veto
message for him. Mr. Madison, at his request, did prepare the draft of
such a message, and sent it to him on the 21st of February, 1791. A copy
of this original draft, in Mr. Madison's own handwriting, was carefully
preserved by him, and is among the papers lately purchased by Congress.
It is preceded by a note, written on the same sheet, which is also in
Mr. Madison's handwriting, and is as follows:

February 21, 1791.--Copy of a paper made out and sent to the President,
at his request, to be ready in case his judgment should finally decide
against the bill for incorporating a national bank, the bill being then
before him.

Among the objections assigned in this paper to the bill, and which were
submitted for the consideration of the President, are the following:

I object to the bill, because it is an essential principle of the
Government that powers not delegated by the Constitution can not be
rightfully exercised; because the power proposed by the bill to be
exercised is not expressly delegated, and because I can not satisfy
myself that it results from any express power by fair and safe rules of
interpretation.

The weight of the precedent of the bank of 1791 and the sanction of the
great name of Washington, which has been so often invoked in its
support, are greatly weakened by the development of these facts.

The experiment of that bank satisfied the country that it ought not to
be continued, and at the end of twenty years Congress refused to
recharter it. It would have been fortunate for the country, and saved
thousands from bankruptcy and ruin, had our public men of 1816 resisted
the temporary pressure of the times upon our financial and pecuniary
interests and refused to charter the second bank. Of this the country
became abundantly satisfied, and at the close of its twenty years'
duration, as in the case of the first bank, it also ceased to exist.
Under the repeated blows of President Jackson it reeled and fell, and a
subsequent attempt to charter a similar institution was arrested by the
veto of President Tyler.

Mr. Madison, in yielding his signature to the charter of 1816, did so
upon the ground of the respect due to precedents; and, as he
subsequently declared--

The Bank of the United States, though on the original question held to
be unconstitutional, received the Executive signature.

It is probable that neither the bank of 1791 nor that of 1816 would have
been chartered but for the embarrassments of the Government in its
finances, the derangement of the currency, and the pecuniary pressure
which existed, the first the consequence of the War of the Revolution
and the second the consequence of the War of 1812. Both were resorted to
in the delusive hope that they would restore public credit and afford
relief to the Government and to the business of the country.

Those of our public men who opposed the whole "American system" at its
commencement and throughout its progress foresaw and predicted that it
was fraught with incalculable mischiefs and must result in serious
injury to the best interests of the country. For a series of years their
wise counsels were unheeded, and the system was established. It was soon
apparent that its practical operation was unequal and unjust upon
different portions of the country and upon the people engaged in
different pursuits. All were equally entitled to the favor and
protection of the Government. It fostered and elevated the money power
and enriched the favored few by taxing labor, and at the expense of the
many. Its effect was to "make the rich richer and the poor poorer." Its
tendency was to create distinctions in society based on wealth and to
give to the favored classes undue control and sway in our Government. It
was an organized money power, which resisted the popular will and sought
to shape and control the public policy.

Under the pernicious workings of this combined system of measures the
country witnessed alternate seasons of temporary apparent prosperity, of
sudden and disastrous commercial revulsions, of unprecedented
fluctuation of prices and depression of the great interests of
agriculture, navigation, and commerce, of general pecuniary suffering,
and of final bankruptcy of thousands. After a severe struggle of more
than a quarter of a century, the system was overthrown.

The bank has been succeeded by a practical system of finance, conducted
and controlled solely by the Government. The constitutional currency has
been restored, the public credit maintained unimpaired even in a period
of a foreign war, and the whole country has become satisfied that banks,
national or State, are not necessary as fiscal agents of the Government.
Revenue duties have taken the place of the protective tariff. The
distribution of the money derived from the sale of the public lands has
been abandoned and the corrupting system of internal improvements, it is
hoped, has been effectually checked.

It is not doubted that if this whole train of measures, designed to take
wealth from the many and bestow it upon the few, were to prevail the
effect would be to change the entire character of the Government. One
only danger remains. It is the seductions of that branch of the system
which consists in internal improvements, holding out, as it does,
inducements to the people of particular sections and localities to
embark the Government in them without stopping to calculate the
inevitable consequences. This branch of the system is so intimately
combined and linked with the others that as surely as an effect is
produced by an adequate cause, if it be resuscitated and revived and
firmly established it requires no sagacity to foresee that it will
necessarily and speedily draw after it the reestablishment of a national
bank, the revival of a protective tariff, the distribution of the land
money, and not only the postponement to the distant future of the
payment of the present national debt, but its annual increase.

I entertain the solemn conviction that if the internal-improvement
branch of the "American system" be not firmly resisted at this time the
whole series of measures composing it will be speedily reestablished and
the country be thrown back from its present high state of prosperity,
which the existing policy has produced, and be destined again to witness
all the evils, commercial revulsions, depression of prices, and
pecuniary embarrassments through which we have passed during the last
twenty-five years.

To guard against consequences so ruinous is an object of high national
importance, involving, in my judgment, the continued prosperity of the
country.

I have felt it to be an imperative obligation to withhold my
constitutional sanction from two bills which had passed the two Houses
of Congress, involving the principle of the internal improvement branch
of the "American system" and conflicting in their provisions with the
views here expressed.

This power, conferred upon the President by the Constitution, I have on
three occasions during my administration of the executive department of
the Government deemed it my duty to exercise, and on this last occasion
of making to Congress an annual communication "of the state of the
Union" it is not deemed inappropriate to review the principles and
considerations which have governed my action. I deem this the more
necessary because, after the lapse of nearly sixty years since the
adoption of the Constitution, the propriety of the exercise of this
undoubted constitutional power by the President has for the first time
been drawn seriously in question by a portion of my fellow-citizens.

The Constitution provides that--

Every bill which shall have passed the House of Representatives and the
Senate shall, before it become a law, be presented to the President of
the United States. If he approve he shall sign it, but if not he shall
return it with his objections to that House in which it shall have
originated, who shall enter the objections at large on their Journal and
proceed to reconsider it.

The preservation of the Constitution from infraction is the President's
highest duty. He is bound to discharge that duty at whatever hazard of
incurring the displeasure of those who may differ with him in opinion.
He is bound to discharge it as well by his obligations to the people who
have clothed him with his exalted trust as by his oath of office, which
he may not disregard. Nor are the obligations of the President in any
degree lessened by the prevalence of views different from his own in one
or both Houses of Congress. It is not alone hasty and inconsiderate
legislation that he is required to check; but if at any time Congress
shall, after apparently full deliberation, resolve on measures which he
deems subversive of the Constitution or of the vital interests of the
country, it is his solemn duty to stand in the breach and resist them.
The President is bound to approve or disapprove every bill which passes
Congress and is presented to him for his signature. The Constitution
makes this his duty, and he can not escape it if he would. He has no
election. In deciding upon any bill presented to him he must exercise
his own best judgment. If he can not approve, the Constitution commands
him to return the bill to the House in which it originated with his
objections, and if he fail to do this within ten days (Sundays excepted)
it shall become a law without his signature. Right or wrong, he may be
overruled by a vote of two-thirds of each House, and in that event the
bill becomes a law without his sanction. If his objections be not thus
overruled, the subject is only postponed, and is referred to the States
and the people for their consideration and decision. The President's
power is negative merely, and not affirmative. He can enact no law. The
only effect, therefore, of his withholding his approval of a bill passed
by Congress is to suffer the existing laws to remain unchanged, and the
delay occasioned is only that required to enable the States and the
people to consider and act upon the subject in the election of public
agents who will carry out their wishes and instructions. Any attempt to
coerce the President to yield his sanction to measures which he can not
approve would be a violation of the spirit of the Constitution, palpable
and flagrant, and if successful would break down the independence of the
executive department and make the President, elected by the people and
clothed by the Constitution with power to defend their rights, the mere
instrument of a majority of Congress. A surrender on his part of the
powers with which the Constitution has invested his office would effect
a practical alteration of that instrument without resorting to the
prescribed process of amendment.

With the motives or considerations which may induce Congress to pass any
bill the President can have nothing to do. He must presume them to be as
pure as his own, and look only to the practical effect of their measures
when compared with the Constitution or the public good.

But it has been urged by those who object to the exercise of this
undoubted constitutional power that it assails the representative
principle and the capacity of the people to govern themselves; that
there is greater safety in a numerous representative body than in the
single Executive created by the Constitution, and that the Executive
veto is a "one-man power," despotic in its character. To expose the
fallacy of this objection it is only necessary to consider the frame and
true character of our system. Ours is not a consolidated empire, but a
confederated union. The States before the adoption of the Constitution
were coordinate, co-equal, and separate independent sovereignties, and
by its adoption they did not lose that character. They clothed the
Federal Government with certain powers and reserved all others,
including their own sovereignty, to themselves. They guarded their own
rights as States and the rights of the people by the very limitations
which they incorporated into the Federal Constitution, whereby the
different departments of the General Government were checks upon each
other. That the majority should govern is a general principle
controverted by none, but they must govern according to the
Constitution, and not according to an undefined and unrestrained
discretion, whereby they may oppress the minority.

The people of the United States are not blind to the fact that they may
be temporarily misled, and that their representatives, legislative and
executive, may be mistaken or influenced in their action by improper
motives. They have therefore interposed between themselves and the laws
which may be passed by their public agents various representations, such
as assemblies, senates, and governors in their several States, a House
of Representatives, a Senate, and a President of the United States. The
people can by their own direct agency make no law, nor can the House of
Representatives, immediately elected by them, nor can the Senate, nor
can both together without the concurrence of the President or a vote of
two-thirds of both Houses.

Happily for themselves, the people in framing our admirable system of
government were conscious of the infirmities of their representatives,
and in delegating to them the power of legislation they have fenced them
around with checks to guard against the effects of hasty action, of
error, of combination, and of possible corruption. Error, selfishness,
and faction have often sought to rend asunder this web of checks and
subject the Government to the control of fanatic and sinister
influences, but these efforts have only satisfied the people of the
wisdom of the checks which they have imposed and of the necessity of
preserving them unimpaired.

The true theory of our system is not to govern by the acts or decrees of
any one set of representatives. The Constitution interposes checks upon
all branches of the Government, in order to give time for error to be
corrected and delusion to pass away; but if the people settle down into
a firm conviction different from that of their representatives they give
effect to their opinions by changing their public servants. The checks
which the people imposed on their public servants in the adoption of the
Constitution are the best evidence of their capacity for
self-government. They know that the men whom they elect to public
stations are of like infirmities and passions with themselves, and not
to be trusted without being restricted by coordinate authorities and
constitutional limitations. Who that has witnessed the legislation of
Congress for the last thirty years will say that he knows of no instance
in which measures not demanded by the public good have been carried? Who
will deny that in the State governments, by combinations of individuals
and sections, in derogation of the general interest, banks have been
chartered, systems of internal improvements adopted, and debts entailed
upon the people repressing their growth and impairing their energies for
years to come?

After so much experience it can not be said that absolute unchecked
power is safe in the hands of any one set of representatives, or that
the capacity of the people for self-government, which is admitted in its
broadest extent, is a conclusive argument to prove the prudence, wisdom,
and integrity of their representatives.

The people, by the Constitution, have commanded the President, as much
as they have commanded the legislative branch of the Government, to
execute their will. They have said to him in the Constitution, which
they require he shall take a solemn oath to support, that if Congress
pass any bill which he can not approve "he shall return it to the House
in which it originated with his objections." In withholding from it his
approval and signature he is executing the will of the people,
constitutionally expressed, as much as the Congress that passed it. No
bill is presumed to be in accordance with the popular will until it
shall have passed through all the branches of the Government required by
the Constitution to make it a law. A bill which passes the House of
Representatives may be rejected by the Senate, and so a bill passed by
the Senate may be rejected by the House. In each case the respective
Houses exercise the veto power on the other.

Congress, and each House of Congress, hold under the Constitution a
check upon the President, and he, by the power of the qualified veto, a
check upon Congress. When the President recommends measures to Congress,
he avows in the most solemn form his opinions, gives his voice in their
favor, and pledges himself in advance to approve them if passed by
Congress. If he acts without due consideration, or has been influenced
by improper or corrupt motives, or if from any other cause Congress, or
either House of Congress, shall differ with him in opinion, they
exercise their veto upon his recommendations and reject them; and there
is no appeal from their decision but to the people at the ballot box.
These are proper checks upon the Executive, wisely interposed by the
Constitution. None will be found to object to them or to wish them
removed. It is equally important that the constitutional checks of the
Executive upon the legislative branch should be preserved.

If it be said that the Representatives in the popular branch of Congress
are chosen directly by the people, it is answered, the people elect the
President. If both Houses represent the States and the people, so does
the President. The President represents in the executive department the
whole people of the United States, as each member of the legislative
department represents portions of them.

The doctrine of restriction upon legislative and executive power, while
a well-settled public opinion is enabled within a reasonable time to
accomplish its ends, has made our country what it is, and has opened to
us a career of glory and happiness to which all other nations have been
strangers.

In the exercise of the power of the veto the President is responsible
not only to an enlightened public opinion, but to the people of the
whole Union, who elected him, as the representatives in the legislative
branches who differ with him in opinion are responsible to the people of
particular States or districts, who compose their respective
constituencies. To deny to the President the exercise of this power
would be to repeal that provision of the Constitution which confers it
upon him. To charge that its exercise unduly controls the legislative
will is to complain of the Constitution itself.

If the Presidential veto be objected to upon the ground that it checks
and thwarts the popular will, upon the same principle the equality of
representation of the States in the Senate should be stricken out of the
Constitution. The vote of a Senator from Delaware has equal weight in
deciding upon the most important measures with the vote of a Senator
from New York, and yet the one represents a State containing, according
to the existing apportionment of Representatives in the House of
Representatives, but one thirty-fourth part of the population of the
other. By the constitutional composition of the Senate a majority of
that body from the smaller States represent less than one-fourth of the
people of the Union. There are thirty States, and under the existing
apportionment of Representatives there are 230 Members in the House of
Representatives. Sixteen of the smaller States are represented in that
House by but 50 Members, and yet the Senators from these States
constitute a majority of the Senate. So that the President may recommend
a measure to Congress, and it may receive the sanction and approval of
more than three-fourths of the House of Representatives and of all the
Senators from the large States, containing more than three-fourths of
the whole population of the United States, and yet the measure may be
defeated by the votes of the Senators from the smaller States. None, it
is presumed, can be found ready to change the organization of the Senate
on this account, or to strike that body practically out of existence by
requiring that its action shall be conformed to the will of the more
numerous branch.

Upon the same principle that the veto of the President should be
practically abolished the power of the Vice-President to give the
casting vote upon an equal division of the Senate should be abolished
also. The Vice-President exercises the veto power as effectually by
rejecting a bill by his casting vote as the President does by refusing
to approve and sign it. This power has been exercised by the
Vice-President in a few instances, the most important of which was the
rejection of the bill to recharter the Bank of the United States in
1811. It may happen that a bill may be passed by a large majority of the
House of Representatives, and may be supported by the Senators from the
larger States, and the Vice-President may reject it by giving his vote
with the Senators from the smaller States; and yet none, it is presumed,
are prepared to deny to him the exercise of this power under the
Constitution.

But it is, in point of fact, untrue that an act passed by Congress is
conclusive evidence that it is an emanation of the popular will. A
majority of the whole number elected to each House of Congress
constitutes a quorum, and a majority of that quorum is competent to pass
laws. It might happen that a quorum of the House of Representatives,
consisting of a single member more than half of the whole number elected
to that House, might pass a bill by a majority of a single vote, and in
that case a fraction more than one-fourth of the people of the United
States would be represented by those who voted for it. It might happen
that the same bill might be passed by a majority of one of a quorum of
the Senate, composed of Senators from the fifteen smaller States and a
single Senator from a sixteenth State; and if the Senators voting for it
happened to be from the eight of the smallest of these States, it would
be passed by the votes of Senators from States having but fourteen
Representatives in the House of Representatives, and containing less
than one-sixteenth of the whole population of the United States. This
extreme case is stated to illustrate the fact that the mere passage of a
bill by Congress is no conclusive evidence that those who passed it
represent the majority of the people of the United States or truly
reflect their will. If such an extreme case is not likely to happen,
cases that approximate it are of constant occurrence. It is believed
that not a single law has been passed since the adoption of the
Constitution upon which all the members elected to both Houses have been
present and voted. Many of the most important acts which have passed
Congress have been carried by a close vote in thin Houses. Many
instances of this might be given. Indeed, our experience proves that
many of the most important acts of Congress are postponed to the last
days, and often the last hours, of a session, when they are disposed of
in haste, and by Houses but little exceeding the number necessary to
form a quorum.

Besides, in most of the States the members of the House of
Representatives are chosen by pluralities, and not by majorities of all
the voters in their respective districts, and it may happen that a
majority of that House may be returned by a less aggregate vote of the
people than that received by the minority.

If the principle insisted on be sound, then the Constitution should be
so changed that no bill shall become a law unless it is voted for by
members representing in each House a majority of the whole people of the
United States. We must remodel our whole system, strike down and abolish
not only the salutary checks lodged in the executive branch, but must
strike out and abolish those lodged in the Senate also, and thus
practically invest the whole power of the Government in a majority of a
single assembly--a majority uncontrolled and absolute, and which may
become despotic. To conform to this doctrine of the right of majorities
to rule, independent of the checks and limitations of the Constitution,
we must revolutionize our whole system; we must destroy the
constitutional compact by which the several States agreed to form a
Federal Union and rush into consolidation, which must end in monarchy or
despotism. No one advocates such a proposition, and yet the doctrine
maintained, if carried out, must lead to this result.

One great object of the Constitution in conferring upon the President a
qualified negative upon the legislation of Congress was to protect
minorities from injustice and oppression by majorities. The equality of
their representation in the Senate and the veto power of the President
are the constitutional guaranties which the smaller States have that
their rights will be respected. Without these guaranties all their
interests would be at the mercy of majorities in Congress representing
the larger States. To the smaller and weaker States, therefore, the
preservation of this power and its exercise upon proper occasions
demanding it is of vital importance. They ratified the Constitution and
entered into the Union, securing to themselves an equal representation
with the larger States in the Senate; and they agreed to be bound by all
laws passed by Congress upon the express condition, and none other, that
they should be approved by the President or passed, his objections to
the contrary notwithstanding, by a vote of two-thirds of both Houses.
Upon this condition they have a right to insist as a part of the compact
to which they gave their assent.

A bill might be passed by Congress against the will of the whole people
of a particular State and against the votes of its Senators and all its
Representatives. However prejudicial it might be to the interests of
such State, it would be bound by it if the President shall approve it or
it shall be passed by a vote of two-thirds of both Houses; but it has a
right to demand that the President shall exercise his constitutional
power and arrest it if his judgment is against it. If he surrender this
power, or fail to exercise it in a case where he can not approve, it
would make his formal approval a mere mockery, and would be itself a
violation of the Constitution, and the dissenting State would become
bound by a law which had not been passed according to the sanctions of
the Constitution.

The objection to the exercise of the veto power is founded upon an idea
respecting the popular will, which, if carried out, would annihilate
State sovereignty and substitute for the present Federal Government a
consolidation directed by a supposed numerical majority. A revolution of
the Government would be silently effected and the States would be
subjected to laws to which they had never given their constitutional
consent.

The Supreme Court of the United States is invested with the power to
declare, and has declared, acts of Congress passed with the concurrence
of the Senate, the House of Representatives, and the approval of the
President to be unconstitutional and void, and yet none, it is presumed,
can be found who will be disposed to strip this highest judicial
tribunal under the Constitution of this acknowledged power--a power
necessary alike to its independence and the rights of individuals.

For the same reason that the Executive veto should, according to the
doctrine maintained, be rendered nugatory, and be practically expunged
from the Constitution, this power of the court should also be rendered
nugatory and be expunged, because it restrains the legislative and
Executive will, and because the exercise of such a power by the court
may be regarded as being in conflict with the capacity of the people to
govern themselves. Indeed, there is more reason for striking this power
of the court from the Constitution than there is that of the qualified
veto of the president, because the decision of the court is final, and
can never be reversed even though both Houses of Congress and the
President should be unanimous in opposition to it, whereas the veto of
the President may be overruled by a vote of two-thirds of both Houses of
Congress or by the people at the polls.

It is obvious that to preserve the system established by the
Constitution each of the coordinate branches of the Government--the
executive, legislative, and judicial--must be left in the exercise of
its appropriate powers. If the executive or the judicial branch be
deprived of powers conferred upon either as checks on the legislative,
the preponderance of the latter will become disproportionate and
absorbing and the others impotent for the accomplishment of the great
objects for which they were established. Organized, as they are, by the
Constitution, they work together harmoniously for the public good. If
the Executive and the judiciary shall be deprived of the constitutional
powers invested in them, and of their due proportions, the equilibrium
of the system must be destroyed, and consolidation, with the most
pernicious results, must ensue--a consolidation of unchecked, despotic
power, exercised by majorities of the legislative branch.

The executive, legislative, and judicial each constitutes a separate
coordinate department of the Government, and each is independent of the
others. In the performance of their respective duties under the
Constitution neither can in its legitimate action control the others.
They each act upon their several responsibilities in their respective
spheres. But if the doctrines now maintained be correct, the executive
must become practically subordinate to the legislative, and the
judiciary must become subordinate to both the legislative and the
executive; and thus the whole power of the Government would be merged in
a single department. Whenever, if ever, this shall occur, our glorious
system of well-regulated self-government will crumble into ruins, to be
succeeded, first by anarchy, and finally by monarchy or despotism. I am
far from believing that this doctrine is the sentiment of the American
people; and during the short period which remains in which it will be my
duty to administer the executive department it will be my aim to
maintain its independence and discharge its duties without infringing
upon the powers or duties of either of the other departments of the
Government.

The power of the Executive veto was exercised by the first and most
illustrious of my predecessors and by four of his successors who
preceded me in the administration of the Government, and it is believed
in no instance prejudicially to the public interests. It has never been
and there is but little danger that it ever can be abused. No President
will ever desire unnecessarily to place his opinion in opposition to
that of Congress. He must always exercise the power reluctantly, and
only in cases where his convictions make it a matter of stern duty,
which he can not escape. Indeed, there is more danger that the
President, from the repugnance he must always feel to come in collision
with Congress, may fail to exercise it in cases where the preservation
of the Constitution from infraction, or the public good, may demand it
than that he will ever exercise it unnecessarily or wantonly.

During the period I have administered the executive department of the
Government great and important questions of public policy, foreign and
domestic, have arisen, upon which it was my duty to act. It may, indeed,
be truly said that my Administration has fallen upon eventful times. I
have felt most sensibly the weight of the high responsibilities devolved
upon me. With no other object than the public good, the enduring fame,
and permanent prosperity of my country, I have pursued the convictions
of my own best judgment. The impartial arbitrament of enlightened public
opinion, present and future, will determine how far the public policy I
have maintained and the measures I have from time to time recommended
may have tended to advance or retard the public prosperity at home and
to elevate or depress the estimate of our national character abroad.

Invoking the blessings of the Almighty upon your deliberations at your
present important session, my ardent hope is that in a spirit of harmony
and concord you may be guided to wise results, and such as may redound
to the happiness, the honor, and the glory of our beloved country.

JAMES K. POLK

***

State of the Union Address
Zachary Taylor
December 4, 1849

Fellow-Citizens of the Senate and House of Representatives:

Sixty years have elapsed since the establishment of this Government, and
the Congress of the United States again assembles to legislate for an
empire of freemen. The predictions of evil prophets, who formerly
pretended to foretell the downfall of our institutions, are now
remembered only to be derided, and the United States of America at this
moment present to the world the most stable and permanent Government on
earth.

Such is the result of the labors of those who have gone before us. Upon
Congress will eminently depend the future maintenance of our system of
free government and the transmission of it unimpaired to posterity.

We are at peace with all the other nations of the world, and seek to
maintain our cherished relations of amity with them. During the past
year we have been blessed by a kind Providence with an abundance of the
fruits of the earth, and although the destroying angel for a time
visited extensive portions of our territory with the ravages of a
dreadful pestilence, yet the Almighty has at length deigned to stay his
hand and to restore the inestimable blessing of general health to a
people who have acknowledged His power, deprecated His wrath, and
implored His merciful protection.

While enjoying the benefits of amicable intercourse with foreign
nations, we have not been insensible to the distractions and wars which
have prevailed in other quarters of the world. It is a proper theme of
thanksgiving to Him who rules the destinies of nations that we have been
able to maintain amidst all these contests an independent and neutral
position toward all belligerent powers.

Our relations with Great Britain are of the most friendly character. In
consequence of the recent alteration of the British navigation acts,
British vessels, from British and other foreign ports, will under our
existing laws, after the 1st day of January next, be admitted to entry
in our ports with cargoes of the growth, manufacture, or production of
any part of the world on the same terms as to duties, imposts, and
charges as vessels of the United States with their cargoes, and our
vessels will be admitted to the same advantages in British ports,
entering therein on the same terms as British vessels. Should no order
in council disturb this legislative arrangement, the late act of the
British Parliament, by which Great Britain is brought within the terms
proposed by the act of Congress of the 1st of March, 1817, it is hoped
will be productive of benefit to both countries.

A slight interruption of diplomatic intercourse which occurred between
this Government and France, I am happy to say, has been terminated, and
our minister there has been received. It is therefore unnecessary to
refer now to the circumstances which led to that interruption. I need
not express to you the sincere satisfaction with which we shall welcome
the arrival of another envoy extraordinary and minister plenipotentiary
from a sister Republic to which we have so long been, and still remain,
bound by the strongest ties of amity.

Shortly after I had entered upon the discharge of the Executive duties I
was apprised that a war steamer belonging to the German Empire was being
fitted out in the harbor of New York with the aid of some of our naval
officers, rendered under the permission of the late Secretary of the
Navy. This permission was granted during an armistice between that
Empire and the Kingdom of Denmark, which had been engaged in the
Schleswig-Holstein war. Apprehensive that this act of intervention on
our part might be viewed as a violation of our neutral obligations
incurred by the treaty with Denmark and of the provisions of the act of
Congress of the 20th of April, 1818, I directed that no further aid
should be rendered by any agent or officer of the Navy; and I instructed
the Secretary of State to apprise the minister of the German Empire
accredited to this Government of my determination to execute the law of
the United States and to maintain the faith of treaties with all
nations. The correspondence which ensued between the Department of State
and the minister of the German Empire is herewith laid before you. The
execution of the law and the observance of the treaty were deemed by me
to be due to the honor of the country, as well as to the sacred
obligations of the Constitution. I shall not fail to pursue the same
course should a similar case arise with any other nation. Having avowed
the opinion on taking the oath of office that in disputes between
conflicting foreign governments it is our interest not less than our
duty to remain strictly neutral, I shall not abandon it. You will
perceive from the correspondence submitted to you in connection with
this subject that the course adopted in this case has been properly
regarded by the belligerent powers interested in the matter.

Although a minister of the United States to the German Empire was
appointed by my predecessor in August, 1848, and has for a long time
been in attendance at Frankfort-on-the-Main, and although a minister
appointed to represent that Empire was received and accredited here, yet
no such government as that of the German Empire has been definitively
constituted. Mr. Donelson, our representative at Frankfort, remained
there several months in the expectation that a union of the German
States under one constitution or form of government might at length be
organized. It is believed by those well acquainted with the existing
relations between Prussia and the States of Germany that no such union
can be permanently established without her cooperation. In the event of
the formation of such a union and the organization of a central power in
Germany of which she should form a part, it would become necessary to
withdraw our minister at Berlin; but while Prussia exists as an
independent kingdom and diplomatic relations are maintained with her
there can be no necessity for the continuance of the mission to
Frankfort. I have therefore recalled Mr. Donelson and directed the
archives of the legation at Frankfort to be transferred to the American
legation at Berlin.

Having been apprised that a considerable number of adventurers were
engaged in fitting out a, military expedition within the United States
against a foreign country, and believing from the best information I
could obtain that it was destined to invade the island of Cuba, I deemed
it due to the friendly relations existing between the United States and
Spain, to the treaty between the two nations, to the laws of the United
States, and, above all, to the American honor to exert the lawful
authority of this Government in suppressing the expedition and
preventing the invasion. To this end I issued a proclamation enjoining
it upon the officers of the United States, civil and military, to use
all lawful means within their power. A copy of that proclamation is
herewith submitted. The expedition has been suppressed. So long as the
act of Congress of the 20th of April, 1818, which owes its existence to
the law of nations and to the policy of Washington himself, shall remain
on our statute books, I hold it to be the duty of the Executive
faithfully to obey its injunctions.

While this expedition was in progress I was informed that a foreigner
who claimed our protection had been clandestinely and, as was supposed,
forcibly carried off in a vessel from New Orleans to the island of Cuba.
I immediately caused such steps to be taken as I thought necessary, in
case the information I had received should prove correct, to vindicate
the honor of the country and the right of every person seeking an asylum
on our soil to the protection of our laws. The person alleged to have
been abducted was promptly restored, and the circumstances of the case
are now about to undergo investigation before a judicial tribunal. I
would respectfully suggest that although the crime charged to have been
committed in this case is held odious, as being in conflict with our
opinions on the subject of national sovereignty and personal freedom,
there is no prohibition of it or punishment for it provided in any act
of Congress. The expediency of supplying this defect in our criminal
code is therefore recommended to your consideration.

I have scrupulously avoided any interference in the wars and contentions
which have recently distracted Europe. During the late conflict between
Austria and Hungary there seemed to be a prospect that the latter might
become an independent nation. However faint that prospect at the time
appeared, I thought it my duty, in accordance with the general sentiment
of the American people, who deeply sympathized with the Magyar patriots,
to stand prepared, upon the contingency of the establishment by her of a
permanent government, to be the first to welcome independent Hungary
into the family of nations. For this purpose I invested an agent then in
Europe with power to declare our willingness promptly to recognize her
independence in the event of her ability to sustain it. The powerful
intervention of Russia in the contest extinguished the hopes of the
struggling Magyars. The United States did not at any time interfere in
the contest, but the feelings of the nation were strongly enlisted in
the cause, and by the sufferings of a brave people, who had made a
gallant, though unsuccessful, effort to be free.

Our claims upon Portugal have been during the past year prosecuted with
renewed vigor, and it has been my object to employ every effort of
honorable diplomacy to procure their adjustment. Our late charge
d'affaires at Lisbon, the Hon. George W. Hopkins, made able and
energetic, but unsuccessful, efforts to settle these unpleasant matters
of controversy and to obtain indemnity for the wrongs which were the
subjects of complaint. Our present charge d'affaires at that Court will
also bring to the prosecution of these claims ability and zeal. The
revolutionary and distracted condition of Portugal in past times has
been represented as one of the leading causes of her delay in
indemnifying our suffering citizens. But I must now say it is matter of
profound regret that these claims have not yet been settled. The
omission of Portugal to do justice to the American claimants has now
assumed a character so grave and serious that I shall shortly make it
the subject of a special message to Congress, with a view to such
ultimate action as its wisdom and patriotism may suggest.

With Russia, Austria, Prussia, Sweden, Denmark, Belgium, the
Netherlands, and the Italian States we still maintain our accustomed
amicable relations.

During the recent revolutions in the Papal States our charge d'affaires
at Rome has been unable to present his letter of credence, which,
indeed, he was directed by my predecessor to withhold until he should
receive further orders. Such was the unsettled condition of things in
those States that it was not deemed expedient to give him any
instructions on the subject of presenting his credential letter
different from those with which he had been furnished by the late
Administration until the 25th of June last, when, in consequence of the
want of accurate information of the exact state of things at that
distance from us, he was instructed to exercise his own discretion in
presenting himself to the then existing Government if in his judgment
sufficiently stable, or, if not, to await further events. Since that
period Rome has undergone another revolution, and he abides the
establishment of a government sufficiently permanent to justify him in
opening diplomatic intercourse with it.

With the Republic of Mexico it is our true policy to cultivate the most
friendly relations. Since the ratification of the treaty of Guadalupe
Hidalgo nothing has occurred of a serious character to disturb them. A
faithful observance of the treaty and a sincere respect for her rights
can not fail to secure the lasting confidence and friendship of that
Republic. The message of my predecessor to the House of Representatives
of the 8th of February last, communicating, in compliance with a
resolution of that body, a copy of a paper called a protocol, signed at
Queretaro on the 30th of May, 1848, by the commissioners of the United
States and the minister of foreign affairs of the Mexican Government,
having been a subject of correspondence between the Department of State
and the envoy extraordinary and minister plenipotentiary of that
Republic accredited to this Government, a transcript of that
correspondence is herewith submitted.

The commissioner on the part of the United States for marking the
boundary between the two Republics, though delayed in reaching San Diego
by unforeseen obstacles, arrived at that place within a short period
after the time required by the treaty, and was there joined by the
commissioner on the part of Mexico. They entered upon their duties, and
at the date of the latest intelligence from that quarter some progress
had been made in the survey. The expenses incident to the organization
of the commission and to its conveyance to the point where its
operations were to begin have so much reduced the fund appropriated by
Congress that a further sum, to cover the charges which must be incurred
during the present fiscal year, will be necessary. The great length of
frontier along which the boundary extends, the nature of the adjacent
territory, and the difficulty of obtaining supplies except at or near
the extremes of the line render it also indispensable that a liberal
provision should be made to meet the necessary charges during the fiscal
year ending on the 30th of June, 1851. I accordingly recommend this
subject to your attention.

In the adjustment of the claims of American citizens on Mexico, provided
for by the late treaty, the employment of counsel on the part of the
Government may become important for the purpose of assisting the
commissioners in protecting the interests of the United States. I
recommend this subject to the early and favorable consideration of
Congress.

Complaints have been made in regard to the inefficiency of the means
provided by the Government of New Granada for transporting the United
States mail across the Isthmus of Panama, pursuant to our postal
convention with that Republic of the 6th of March, 1844. Our charge
d'affaires at Bogota has been directed to make such representations to
the Government of New Granada as will, it is hoped, lead to a prompt
removal of this cause of complaint.

The sanguinary civil war with which the Republic of Venezuela has for
some time past been ravaged has been brought to a close. In its progress
the rights of some of our citizens resident or trading there have been
violated. The restoration of order will afford the Venezuelan Government
an opportunity to examine and redress these grievances and others of
longer standing which our representatives at Caracas have hitherto
ineffectually urged upon the attention of that Government.

The extension of the coast of the United States on the Pacific and the
unexampled rapidity with which the inhabitants of California especially
are increasing in numbers have imparted new consequence to our relations
with the other countries whose territories border upon that ocean. It is
probable that the intercourse between those countries and our
possessions in that quarter, particularly with the Republic of Chili,
will become extensive and mutually advantageous in proportion as
California and Oregon shall increase in population and wealth. It is
desirable, therefore, that this Government should do everything in its
power to foster and strengthen its relations with those States, and that
the spirit of amity between us should be mutual and cordial.

I recommend the observance of the same course toward all other American
States. The United States stand as the great American power, to which,
as their natural ally and friend, they will always be disposed first to
look for mediation and assistance in the event of any collision between
them and any European nation. As such we may often kindly mediate in
their behalf without entangling ourselves in foreign wars or unnecessary
controversies. Whenever the faith of our treaties with any of them shall
require our interference, we must necessarily interpose.

A convention has been negotiated with Brazil providing for the
satisfaction of American claims on that Government, and it will be
submitted to the Senate. Since the last session of Congress we have
received an envoy extraordinary and minister plenipotentiary from that
Empire, and our relations with it are rounded upon the most amicable
understanding.

Your attention is earnestly invited to an amendment of our existing laws
relating to the African slave trade with a view to the effectual
suppression of that barbarous traffic. It is not to be denied that this
trade is still in part carried on by means of vessels built in the
United States and owned or navigated by some of our citizens. The
correspondence between the Department of State and the minister and
consul of the United States at Rio de Janeiro, which has from time to
time been laid before Congress, represents that it is a customary device
to evade the penalties of our laws by means of sea letters. Vessels sold
in Brazil, when provided with such papers by the consul, instead of
returning to the United States for a new register proceed at once to the
coast of Africa for the purpose of obtaining cargoes of slaves. Much
additional information of the same character has recently been
transmitted to the Department of State. It has not been considered the
policy of our laws to subject an American citizen who in a foreign
country purchases a vessel built in the United States to the
inconvenience of sending her home for a new register before permitting
her to proceed on a voyage. Any alteration of the laws which might have
a tendency to impede the free transfer of property in vessels between
our citizens, or the free navigation of those vessels between different
parts of the world when employed in lawful commerce, should be well and
cautiously considered; but I trust that your wisdom will devise a method
by which our general policy in this respect may be preserved, and at the
same time the abuse of our flag by means of sea letters, in the manner
indicated, may be prevented.

Having ascertained that there is no prospect of the reunion of the five
States of Central America which formerly composed the Republic of that
name, we have separately negotiated with some of them treaties of amity
and commerce, which will be laid before the Senate.

A contract having been concluded with the State of Nicaragua by a
company composed of American citizens for the purpose of constructing a
ship canal through the territory of that State to connect the Atlantic
and Pacific oceans, I have directed the negotiation of a treaty with
Nicaragua pledging both Governments to protect those who shall engage in
and perfect the work. All other nations are invited by the State of
Nicaragua to enter into the same treaty stipulations with her; and the
benefit to be derived by each from such an arrangement will be the
protection of this great interoceanic communication against any power
which might seek to obstruct it or to monopolize its advantages. All
States entering into such a treaty will enjoy the right of passage
through the canal on payment of the same tolls. The work, if constructed
under these guaranties, will become a bond of peace instead of a subject
of contention and strife between the nations of the earth. Should the
great maritime States of Europe consent to this arrangement (and we have
no reason to suppose that a proposition so fair and honorable will be
opposed by any), the energies of their people and ours will cooperate in
promoting the success of the enterprise. I do not recommend any
appropriation from the National Treasury for this purpose, nor do I
believe that such an appropriation is necessary. Private enterprise, if
properly protected, will complete the work should it prove to be
feasible. The parties who have procured the charter from Nicaragua for
its construction desire no assistance from this Government beyond its
protection; and they profess that, having examined the proposed line of
communication, they will be ready to commence the undertaking whenever
that protection shall be extended to them. Should there appear to be
reason, on examining the whole evidence, to entertain a serious doubt of
the practicability of constructing such a canal, that doubt could be
speedily solved by an actual exploration of the route.

Should such a work be constructed under the common protection of all
nations, for equal benefits to all, it would be neither just nor
expedient that any great maritime state should command the
communication. The territory through which the canal may be opened ought
to be freed from the claims of any foreign power. No such power should
occupy a position that would enable it hereafter to exercise so
controlling an influence over the commerce of the world or to obstruct a
highway which ought to be dedicated to the common uses of mankind.

The routes across the Isthmus at Tehuantepec and Panama are also worthy
of our serious consideration.. They did not fail to engage the attention
of my predecessor. The negotiator of the treaty of Guadalupe Hidalgo was
instructed to offer a very large sum of money for the right of transit
across the Isthmus of Tehuantepec. The Mexican Government did not accede
to the proposition for the purchase of the right of way, probably
because it had already contracted with private individuals for the
construction of a passage from the Guasacualco River to Tehuantepec. I
shall not renew any proposition to purchase for money a right which
ought to be equally secured to all nations on payment of a reasonable
toll to the owners of the improvement, who would doubtless be well
contented with that compensation and the guaranties of the maritime
states of the world in separate treaties negotiated with Mexico, binding
her and them to protect those who should construct the work. Such
guaranties would do more to secure the completion of the communication
through the territory of Mexico than any other reasonable consideration
that could be offered; and as Mexico herself would be the greatest
gainer by the opening of this communication between the Gulf and the
Pacific Ocean, it is presumed that she would not hesitate to yield her
aid in the manner proposed to accomplish an improvement so important to
her own best interests.

We have reason to hope that the proposed railroad across the Isthmus at
Panama will be successfully constructed under the protection of the late
treaty with New Granada, ratified and exchanged by my predecessor on the
10th day of June, 1848, which guarantees the perfect neutrality of the
Isthmus and the rights of sovereignty and property of New Granada over
that territory, "with a view that the free transit from ocean to ocean
may not be interrupted or embarrassed" during the existence of the
treaty. It is our policy to encourage every practicable route across the
isthmus which connects North and South America, either by railroad or
canal, which the energy and enterprise of our citizens may induce them
to complete, and I consider it obligatory upon me to adopt that policy,
especially in consequence of the absolute necessity of facilitating
intercourse with our possessions on the Pacific.

The position of the Sandwich Islands with reference to the territory of
the United States on the Pacific, the success of our persevering and
benevolent citizens who have repaired to that remote quarter in
Christianizing the natives and inducing them to adopt a system of
government and laws suited to their capacity and wants, and the use made
by our numerous whale ships of the harbors of the islands as places of
resort for obtaining refreshments and repairs all combine to render
their destiny peculiarly interesting to us. It is our duty to encourage
the authorities of those islands in their efforts to improve and elevate
the moral and political condition of the inhabitants, and we should make
reasonable allowances for the difficulties inseparable from this task.
We desire that the islands may maintain their independence and that
other nations should concur with us in this sentiment. We could in no
event be indifferent to their passing under the dominion of any other
power. The principal commercial states have in this a common interest,
and it is to be hoped that no one of them will attempt to interpose
obstacles to the entire independence of the islands.

The receipts into the Treasury for the fiscal year ending on the 30th of
June last were, in cash, $48,830,097.50, and in Treasury notes funded
$10,833,000, making an aggregate of $59,663,097.50; and the expenditures
for the same time were, in cash, $46,798,667.82, and in Treasury notes
funded $10,833,000, making an aggregate of $57,631,667.82.

The accounts and estimates which will be submitted to Congress in the
report of the Secretary of the Treasury show that there will probably be
a deficit occasioned by the expenses of the Mexican War and treaty on
the 1st day of July next of $5,828,121.66, and on the 1st day of July,
1851, of $10,547,092.73, making in the whole a probable deficit to be
provided for of $16,375,214.39. The extraordinary expenses of the war
with Mexico and the purchase of California and New Mexico exceed in
amount this deficit, together with the loans heretofore made for those
objects. I therefore recommend that authority be given to borrow what
ever sum may be necessary to cover that deficit. I recommend the
observance of strict economy in the appropriation and expenditure of
public money.

I recommend a revision of the existing tariff and its adjustment on a
basis which may augment the revenue. I do not doubt the right or duty of
Congress to encourage domestic industry, which is the great source of
national as well as individual wealth and prosperity. I look to the
wisdom and patriotism of Congress for the adoption of a system which may
place home labor at last on a sure and permanent footing and by due
encouragement of manufactures give a new and increased stimulus to
agriculture and promote the development of our vast resources and the
extension of our commerce. Believing that to the attainment of these
ends, as well as the necessary augmentation of the revenue and the
prevention of frauds, a system of specific duties is best adapted, I
strongly recommend to Congress the adoption of that system, fixing the
duties at rates high enough to afford substantial and sufficient
encouragement to our own industry and at the same time so adjusted as to
insure stability.

The question of the continuance of the subtreasury system is
respectfully submitted to the wisdom of Congress. If continued,
important modifications of it appear to be indispensable.

For further details and views on the above and other matters connected
with commerce, the finances, and revenue I refer to the report of the
Secretary of the Treasury.

No direct aid has been given by the General Government to the
improvement of agriculture except by the expenditure of small sums for
the collection and publication of agricultural statistics and for some
chemical analyses, which have been thus far paid for out of the patent
fund. This aid is, in my opinion, wholly inadequate. To give to this
leading branch of American industry the encouragement which it merits, I
respectfully recommend the establishment of an agricultural bureau, to
be connected with the Department of the Interior. To elevate the social
condition of the agriculturist, to increase his prosperity, and to
extend his means of usefulness to his country, by multiplying his
sources of information, should be the study of every statesman and a
primary object with every legislator.

No civil government having been provided by Congress for California, the
people of that Territory, impelled by the necessities of their political
condition, recently met in convention for the purpose of forming a
constitution and State government, which the latest advices give me
reason to suppose has been accomplished; and it is believed they will
shortly apply for the admission of California into the Union as a
sovereign State. Should such be the case, and should their constitution
be conformable to the requisitions of the Constitution of the United
States, I recommend their application to the favorable consideration of
Congress. The people of New Mexico will also, it is believed, at no very
distant period present themselves for admission into the Union.
Preparatory to the admission of California and New Mexico the people of
each will have instituted for themselves a republican form of
government, "laying its foundation in such principles and organizing its
powers in such form as to them shall seem most likely to effect their
safety and happiness." By awaiting their action all causes of uneasiness
may be avoided and confidence and kind feeling preserved. With a view of
maintaining the harmony and tranquillity so dear to all, we should
abstain from the introduction of those exciting topics of a sectional
character which have hitherto produced painful apprehensions in the
public mind; and I repeat the solemn warning of the first and most
illustrious of my predecessors against furnishing "any ground for
characterizing parties by geographical discriminations."

A collector has been appointed at San Francisco under the act of
Congress extending the revenue laws over California, and measures have
been taken to organize the custom-houses at that and the other ports
mentioned in that act at the earliest period practicable. The collector
proceeded overland, and advices have not yet been received of his
arrival at San Francisco. Meanwhile, it is understood that the customs
have continued to be collected there by officers acting under the
military authority, as they were during the Administration of my
predecessor. It will, I think, be expedient to confirm the collections
thus made, and direct the avails (after such allowances as Congress may
think fit to authorize) to be expended within the Territory or to be
paid into the Treasury for the purpose of meeting appropriations for the
improvement of its rivers and harbors.

A party engaged on the coast survey was dispatched to Oregon in January
last. According to the latest advices, they had not left California; and
directions have been given to them, as soon as they shall have fixed on
the sites of the two light-houses and the buoys authorized to be
constructed and placed in Oregon, to proceed without delay to make
reconnaissance of the most important points on the coast of California,
and especially to examine and determine on sites for light-houses on
that coast, the speedy erection of which is urgently demanded by our
rapidly increasing commerce.

I have transferred the Indian agencies from upper Missouri and Council
Bluffs to Santa Fe and Salt Lake, and have caused to be appointed
subagents in the valleys of the Gila, the Sacramento, and the San
Joaquin rivers. Still further legal provisions will be necessary for the
effective and successful extension of our system of Indian intercourse
over the new territories.

I recommend the establishment of a branch mint in California, as it
will, in my opinion, afford important facilities to those engaged in
mining, as well as to the Government in the disposition of the mineral
lands.

I also recommend that commissions be organized by Congress to examine
and decide upon the validity of the present subsisting land titles in
California and New Mexico, and that provision be made for the
establishment of offices of surveyor-general in New Mexico, California,
and Oregon and for the surveying and bringing into market the public
lands in those Territories. Those lands, remote in position and
difficult of access, ought to be disposed of on terms liberal to all,
but especially favorable to the early emigrants.

In order that the situation and character of the principal mineral
deposits in California may be ascertained, I recommend that a geological
and mineralogical exploration be connected with the linear surveys, and
that the mineral lands be divided into small lots suitable for mining
and be disposed of by sale or lease, so as to give our citizens an
opportunity of procuring a permanent right of property in the soil. This
would seem to be as important to the success of mining as of
agricultural pursuits.

The great mineral wealth of California and the advantages which its
ports and harbors and those of Oregon afford to commerce, especially
with the islands of the Pacific and Indian oceans and the populous
regions of eastern Asia, make it certain that there will arise in a few
years large and prosperous communities on our western coast. It
therefore becomes important that a line of communication, the best and
most expeditious which the nature of the country will admit, should be
opened within the territory of the United States from the navigable
waters of the Atlantic or the Gulf of Mexico to the Pacific. Opinion, as
elicited and expressed by two large and respectable conventions lately
assembled at St. Louis and Memphis, points to a railroad as that which,
if practicable, will best meet the wishes and wants of the country. But
while this, if in successful operation, would be a work of great
national importance and of a value to the country which it would be
difficult to estimate, it ought also to be regarded as an undertaking of
vast magnitude and expense, and one which must, if it be indeed
practicable, encounter many difficulties in its construction and use.
Therefore, to avoid failure and disappointment; to enable Congress to
judge whether in the condition of the country through which it must pass
the work be feasible, and, if it be found so, whether it should be
undertaken as a national improvement or left to individual enterprise,
and in the latter alternative what aid, if any, ought to be extended to
it by the Government, I recommend as a preliminary measure a careful
reconnaissance of the several proposed routes by a scientific corps and
a report as to the practicability of making such a road, with an
estimate of the cost of its construction and support.

For further views on these and other matters connected with the duties
of the home department I refer you to the report of the Secretary of the
Interior.

I recommend early appropriations for continuing the river and harbor
improvements which have been already begun, and also for the
construction of those for which estimates have been made, as well as for
examinations and estimates preparatory to the commencement of such
others as the wants of the country, and especially the advance of our
population over new districts and the extension of commerce, may render
necessary. An estimate of the amount which can be advantageously
expended within the next fiscal year under the direction of the Bureau
of Topographical Engineers accompanies the report of the Secretary of
War, to which I respectfully invite the attention of Congress.

The cession of territory made by the late treaty with Mexico has greatly
extended our exposed frontier and rendered its defense more difficult.
That treaty has also brought us under obligations to Mexico, to comply
with which a military force is requisite. But our military establishment
is not materially changed as to its efficiency from the condition in
which it stood before the commencement of the Mexican War. Some addition
to it will therefore be necessary, and I recommend to the favorable
consideration of Congress an increase of the several corps of the Army
at our distant Western posts, as proposed in the accompanying report of
the Secretary of War.

Great embarrassment has resulted from the effect upon rank in the Army
heretofore given to brevet and staff commissions. The views of the
Secretary of War on this subject are deemed important, and if carried
into effect will, it is believed, promote the harmony of the service.
The plan proposed for retiring disabled officers and providing an asylum
for such of the rank and file as from age, wounds, and other infirmities
occasioned by service have become unfit to perform their respective
duties is recommended as a means of increasing the efficiency of the
Army and as an act of justice due from a grateful country to the
faithful soldier.

The accompanying report of the Secretary of the Navy presents a full and
satisfactory account of the condition and operations of the naval
service during the past year. Our citizens engaged in the legitimate
pursuits of commerce have enjoyed its benefits. Wherever our national
vessels have gone they have been received with respect, our officers
have been treated with kindness and courtesy, and they have on all
occasions pursued a course of strict neutrality, in accordance with the
policy of our Government.

The naval force at present in commission is as large as is admissible
with the number of men authorized by Congress to be employed.

I invite your attention to the recommendation of the Secretary of the
Navy on the subject of a reorganization of the Navy in its various
grades of officers, and the establishing of a retired list for such of
the officers as are disqualified for active and effective service.
Should Congress adopt some such measure as is recommended, it will
greatly increase the efficiency of the Navy and reduce its expenditures.

I also ask your attention to the views expressed by him in reference to
the employment of war steamers and in regard to the contracts for the
transportation of the United States mails and the operation of the
system upon the prosperity of the Navy.

By an act of Congress passed August 14, 1848, provision was made for
extending post-office and mail accommodations to California and Oregon.
Exertions have been made to execute that law, but the limited provisions
of the act, the inadequacy of the means it authorizes, the ill
adaptation of our post-office laws to the situation of that country, and
the measure of compensation for services allowed by those laws, compared
with the prices of labor and rents in California, render those exertions
in a great degree ineffectual. More particular and efficient provision
by law is required on this subject.

The act of 1845 reducing postage has now, by its operation during four
years, produced results fully showing that the income from such reduced
postage is sufficient to sustain the whole expense of the service of the
Post-Office Department, not including the cost of transportation in mail
steamers on the lines from New York to Chagres and from Panama to
Astoria, which have not been considered by Congress as properly
belonging to the mail service.

It is submitted to the wisdom of Congress whether a further reduction of
postage should not now be made, more particularly on the letter
correspondence. This should be relieved from the unjust burden of
transporting and delivering the franked matter of Congress, for which
public service provision should be made from the Treasury. I confidently
believe that a change may safely be made reducing all single letter
postage to the uniform rate of 5 cents, regardless of distance, without
thereby imposing any greater tax on the Treasury than would constitute a
very moderate compensation for this public service; and I therefore
respectfully recommend such a reduction. Should Congress prefer to
abolish the franking privilege entirely, it seems probable that no
demand on the Treasury would result from the proposed reduction of
postage. Whether any further diminution should now be made, or the
result of the reduction to 5 cents, which I have recommended, should be
first tested, is submitted to your decision.

Since the commencement of the last session of Congress a postal treaty
with Great Britain has been received and ratified, and such relations
have been formed by the post-office departments of the two countries in
pursuance of that treaty as to carry its provisions into full operation.
The attempt to extend this same arrangement through England to France
has not been equally successful, but the purpose has not been abandoned.

For a particular statement of the condition of the Post-Office
Department and other matters connected with that branch of the public
service I refer you to the report of the Postmaster-General.

By the act of the 3d of March, 1849, a board was constituted to make
arrangements for taking the Seventh Census, composed of the Secretary of
State, the Attorney-General, and the Postmaster-General; and it was made
the duty of this board "to prepare and cause to be printed such forms
and schedules as might be necessary for the full enumeration of the
inhabitants of the United States, and also proper forms and schedules
for collecting in statistical tables, under proper heads, such
information as to mines, agriculture, commerce, manufactures, education,
and other topics as would exhibit a full view of the pursuits, industry,
education, and resources of the country." The duties enjoined upon the
census board thus established having been performed, it now rests with
Congress to enact a law for carrying into effect the provision of the
Constitution which requires an actual enumeration of the people of the
United States within the ensuing year.

Among the duties assigned by the Constitution to the General Government
is one of local and limited application, but not on that account the
less obligatory. I allude to the trust committed to Congress as the
exclusive legislator and sole guardian of the interests of the District
of Columbia. I beg to commend these interests to your kind attention. As
the national metropolis the city of Washington must be an object of
general interest; and founded, as it was, under the auspices of him
whose immortal name it bears, its claims to the fostering care of
Congress present themselves with additional strength. Whatever can
contribute to its prosperity must enlist the feelings of its
constitutional guardians and command their favorable consideration.

Our Government is one of limited powers, and its successful
administration eminently depends on the confinement of each of its
coordinate branches within its own appropriate sphere. The first section
of the Constitution ordains that--

All legislative powers herein granted shall be vested in a Congress of
the United States, which shall consist of a Senate and House of
Representatives.

The Executive has authority to recommend (not to dictate) measures to
Congress. Having performed that duty, the executive department of the
Government can not rightfully control the decision of Congress on any
subject of legislation until that decision shall have been officially
submitted to the President for approval. The check provided by the
Constitution in the clause conferring the qualified veto will never be
exercised by me except in the cases contemplated by the fathers of the
Republic. I view it as an extreme measure, to be resorted to only in
extraordinary cases, as where it may become necessary to defend the
executive against the encroachments of the legislative power or to
prevent hasty and inconsiderate or unconstitutional legislation. By
cautiously confining this remedy within the sphere prescribed to it in
the contemporaneous expositions of the framers of the Constitution, the
will of the people, legitimately expressed on all subjects of
legislation through their constitutional organs, the Senators and
Representatives of the United States, will have its full effect. As
indispensable to the preservation of our system of self-government, the
independence of the representatives of the States and the people is
guaranteed by the Constitution, and they owe no responsibility to any
human power but their constituents. By holding the representative
responsible only to the people, and exempting him from all other
influences, we elevate the character of the constituent and quicken his
sense of responsibility to his country. It is under these circumstances
only that the elector can feel that in the choice of the lawmaker he is
himself truly a component part of the sovereign power of the nation.
With equal care we should study to defend the rights of the executive
and judicial departments. Our Government can only be preserved in its
purity by the suppression and entire elimination of every claim or
tendency of one coordinate branch to encroachment upon another. With the
strict observance of this rule and the other injunctions of the
Constitution, with a sedulous inculcation of that respect and love for
the Union of the States which our fathers cherished and enjoined upon
their children, and with the aid of that overruling Providence which has
so long and so kindly guarded our liberties and institutions, we may
reasonably expect to transmit them, with their innumerable blessings, to
the remotest posterity.

But attachment to the Union of the States should be habitually fostered
in every American heart. For more than half a century, during which
kingdoms and empires have fallen, this Union has stood unshaken. The
patriots who formed it have long since descended to the grave; yet still
it remains, the proudest monument to their memory and the object of
affection and admiration with everyone worthy to bear the American name.
In my judgment its dissolution would be the greatest of calamities, and
to avert that should be the study of every American. Upon its
preservation must depend our own happiness and that of countless
generations to come. Whatever dangers may threaten it, I shall stand by
it and maintain it in its integrity to the full extent of the
obligations imposed and the powers conferred upon me by the
Constitution.

Z. TAYLOR.

***

State of the Union Address
Millard Fillmore
December 2, 1850

Fellow-Citizens of the Senate and of the House of Representatives:

Being suddenly called in the midst of the last session of Congress by a
painful dispensation of Divine Providence to the responsible station
which I now hold, I contented myself with such communications to the
Legislature as the exigency of the moment seemed to require. The country
was shrouded in mourning for the loss of its venerable Chief Magistrate
and all hearts were penetrated with grief. Neither the time nor the
occasion appeared to require or to justify on my part any general
expression of political opinions or any announcement of the principles
which would govern me in the discharge of the duties to the performance
of which I had been so unexpectedly called. I trust, therefore, that it
may not be deemed inappropriate if I avail myself of this opportunity of
the reassembling of Congress to make known my sentiments in a general
manner in regard to the policy which ought to be pursued by the
Government both in its intercourse with foreign nations and its
management and administration of internal affairs.

Nations, like individuals in a state of nature, are equal and
independent, possessing certain rights and owing certain duties to each
other, arising from their necessary and unavoidable relations; which
rights and duties there is no common human authority to protect and
enforce. Still, they are rights and duties, binding in morals, in
conscience, and in honor, although there is no tribunal to which an
injured party can appeal but the disinterested judgment of mankind, and
ultimately the arbitrament of the sword.

Among the acknowledged rights of nations is that which each possesses of
establishing that form of government which it may deem most conducive to
the happiness and prosperity of its own citizens, of changing that form
as circumstances may require, and of managing its internal affairs
according to its own will. The people of the United States claim this
right for themselves, and they readily concede it to others. Hence it
becomes an imperative duty not to interfere in the government or
internal policy of other nations; and although we may sympathize with
the unfortunate or the oppressed everywhere in their struggles for
freedom, our principles forbid us from taking any part in such foreign
contests. We make no wars to promote or to prevent successions to
thrones, to maintain any theory of a balance of power, or to suppress
the actual government which any country chooses to establish for itself.
We instigate no revolutions, nor suffer any hostile military expeditions
to be fitted out in the United States to invade the territory or
provinces of a friendly nation. The great law of morality ought to have
a national as well as a personal and individual application. We should
act toward other nations as we wish them to act toward us, and justice
and conscience should form the rule of conduct between governments,
instead of mere power, self interest, or the desire of aggrandizement.
To maintain a strict neutrality in foreign wars, to cultivate friendly
relations, to reciprocate every noble and generous act, and to perform
punctually and scrupulously every treaty obligation--these are the
duties which we owe to other states, and by the performance of which we
best entitle ourselves to like treatment from them; or, if that, in any
case, be refused, we can enforce our own rights with justice and a clear
conscience.

In our domestic policy the Constitution will be my guide, and in
questions of doubt I shall look for its interpretation to the judicial
decisions of that tribunal which was established to expound it and to
the usage of the Government, sanctioned by the acquiescence of the
country. I regard all its provisions as equally binding. In all its
parts it is the will of the people expressed in the most solemn form,
and the constituted authorities are but agents to carry that will into
effect. Every power which it has granted is to be exercised for the
public good; but no pretense of utility, no honest conviction, even, of
what might be expedient, can justify the assumption of any power not
granted. The powers conferred upon the Government and their distribution
to the several departments are as clearly expressed in that sacred
instrument as the imperfection of human language will allow, and I deem
it my first duty not to question its wisdom, add to its provisions,
evade its requirements, or nullify its commands.

Upon you, fellow-citizens, as the representatives of the States and the
people, is wisely devolved the legislative power. I shall comply with my
duty in laying before you from time to time any information calculated
to enable you to discharge your high and responsible trust for the
benefit of our common constituents.

My opinions will be frankly expressed upon the leading subjects of
legislation; and if--which I do not anticipate--any act should pass the
two Houses of Congress which should appear to me unconstitutional, or an
encroachment on the just powers of other departments, or with provisions
hastily adopted and likely to produce consequences injurious and
unforeseen, I should not shrink from the duty of returning it to you,
with my reasons, for your further consideration. Beyond the due
performance of these constitutional obligations, both my respect for the
Legislature and my sense of propriety will restrain me from any attempt
to control or influence your proceedings. With you is the power, the
honor, and the responsibility of the legislation of the country.

The Government of the United States is a limited Government. It is
confined to the exercise of powers expressly granted and such others as
may be necessary for carrying those powers into effect; and it is at all
times an especial duty to guard against any infringement on the just
rights of the States. Over the objects and subjects intrusted to
Congress its legislative authority is supreme. But here that authority
ceases, and every citizen who truly loves the Constitution and desires
the continuance of its existence and its blessings will resolutely and
firmly resist any interference in those domestic affairs which the
Constitution has dearly and unequivocally left to the exclusive
authority of the States. And every such citizen will also deprecate
useless irritation among the several members of the Union and all
reproach and crimination tending to alienate one portion of the country
from another. The beauty of our system of government consists, and its
safety and durability must consist, in avoiding mutual collisions and
encroachments and in the regular separate action of all, while each is
revolving in its own distinct orbit.

The Constitution has made it the duty of the President to take care that
the laws be faithfully executed. In a government like ours, in which all
laws are passed by a majority of the representatives of the people, and
these representatives are chosen for such short periods that any
injurious or obnoxious law can very soon be repealed, it would appear
unlikely that any great numbers should be found ready to resist the
execution of the laws. But it must be borne in mind that the country is
extensive; that there may be local interests or prejudices rendering a
law odious in one part which is not so in another, and that the
thoughtless and inconsiderate, misled by their passions or their
imaginations, may be induced madly to resist such laws as they
disapprove. Such persons should recollect that without law there can be
no real practical liberty; that when law is trampled under foot tyranny
rules, whether it appears in the form of a military despotism or of
popular violence. The law is the only sure protection of the weak and
the only efficient restraint upon the strong. When impartially and
faithfully administered, none is beneath its protection and none above
its control. You, gentlemen, and the country may be assured that to the
utmost of my ability and to the extent of the power vested in me I shall
at all times and in all places take care that the laws be faithfully
executed. In the discharge of this duty, solemnly imposed upon me by the
Constitution and by my oath of office, I shall shrink from no
responsibility, and shall endeavor to meet events as they may arise with
firmness, as well as with prudence and discretion.

The appointing power is one of the most delicate with which the
Executive is invested. I regard it as a sacred trust, to be exercised
with the sole view of advancing the prosperity and happiness of the
people. It shall be my effort to elevate the standard of official
employment by selecting for places of importance individuals fitted for
the posts to which they are assigned by their known integrity, talents,
and virtues. In so extensive a country, with so great a population, and
where few persons appointed to office can be known to the appointing
power, mistakes will sometimes unavoidably happen and unfortunate
appointments be made notwithstanding the greatest care. In such cases
the power of removal may be properly exercised; and neglect of duty or
malfeasance in office will be no more tolerated in individuals appointed
by myself than in those appointed by others. I am happy in being able to
say that no unfavorable change in our foreign relations has taken place
since the message at the opening of the last session of Congress. We are
at peace with all nations and we enjoy in an eminent degree the
blessings of that peace in a prosperous and growing commerce and in all
the forms of amicable national intercourse. The unexampled growth of the
country, the present amount of its population, and its ample means of
self-protection assure for it the respect of all nations, while it is
trusted that its character for justice and a regard to the rights of
other States will cause that respect to be readily and cheerfully paid.

A convention was negotiated between the United States and Great Britain
in April last for facilitating and protecting the construction of a ship
canal between the Atlantic and Pacific oceans and for other purposes.
The instrument has since been ratified by the contracting parties, the
exchange of ratifications has been effected, and proclamation thereof
has been duly made.

In addition to the stipulations contained in this convention, two other
objects remain to be accomplished between the contracting powers: First.
The designation and establishment of a free port at each end of the
canal.

Second. An agreement fixing the distance from the shore within which
belligerent maritime operations shall not be carried on. On these points
there is little doubt that the two Governments will come to an
understanding.

The company of citizens of the United States who have acquired from the
State of Nicaragua the privilege of constructing a ship canal between
the two oceans through the territory of that State have made progress in
their preliminary arrangements. The treaty between the United States and
Great Britain of the 19th of April last, above referred to, being now in
operation, it is to be hoped that the guaranties which it offers will be
sufficient to secure the completion of the work with all practicable
expedition. It is obvious that this result would be indefinitely
postponed if any other than peaceful measures for the purpose of
harmonizing conflicting claims to territory in that quarter should be
adopted. It will consequently be my endeavor to cause any further
negotiations on the part of this Government which may be requisite for
this purpose to be so conducted as to bring them to a speedy and
successful close.

Some unavoidable delay has occurred, arising from distance and the
difficulty of intercourse between this Government and that of Nicaragua,
but as intelligence has just been received of the appointment of an
envoy extraordinary and minister plenipotentiary of that Government to
reside at Washington, whose arrival may soon be expected, it is hoped
that no further impediments will be experienced in the prompt
transaction of business between the two Governments.

Citizens of the United States have undertaken the connection of the two
oceans by means of a railroad across the Isthmus of Tehuantepec, under
grants of the Mexican Government to a citizen of that Republic. It is
understood that a thorough survey of the course of the communication is
in preparation, and there is every reason to expect that it will be
prosecuted with characteristic energy, especially when that Government
shall have consented to such stipulations with the Government of the
United States as may be necessary to impart a feeling of security to
those who may embark their property in the enterprise. Negotiations are
pending for the accomplishment of that object, and a hope is confidently
entertained that when the Government of Mexico shall become duly
sensible of the advantages which that country can not fail to derive
from the work, and learn that the Government of the United States
desires that the right of sovereignty of Mexico in the Isthmus shall
remain unimpaired, the stipulations referred to will be agreed to with
alacrity.

By the last advices from Mexico it would appear, however, that that
Government entertains strong objections to some of the stipulations
which the parties concerned in the project of the railroad deem
necessary for their protection and security. Further consideration, it
is to be hoped, or some modification of terms, may yet reconcile the
differences existing between the two Governments in this respect.

Fresh instructions have recently been given to the minister of the
United States in Mexico, who is prosecuting the subject with promptitude
and ability.

Although the negotiations with Portugal for the payment of claims of
citizens of the United States against that Government have not yet
resulted in a formal treaty, yet a proposition, made by the Government
of Portugal for the final adjustment and payment of those claims, has
recently been accepted on the part of the United States. It gives me
pleasure to say that Mr. Clay, to whom the negotiation on the part of
the United States had been intrusted, discharged the duties of his
appointment with ability and discretion, acting always within the
instructions of his Government.

It is expected that a regular convention will be immediately negotiated
for carrying the agreement between the two Governments into effect. The
commissioner appointed under the act of Congress for carrying into
effect the convention with Brazil of the 27th of January, 1849, has
entered upon the performance of the duties imposed upon him by that act.
It is hoped that those duties may be completed within the time which it
prescribes. The documents, however, which the Imperial Government, by
the third article of the convention, stipulates to furnish to the
Government of the United States have not yet been received. As it is
presumed that those documents will be essential for the correct
disposition of the claims, it may become necessary for Congress to
extend the period limited for the duration of the commission. The sum
stipulated by the fourth article of the convention to be paid to this
Government has been received.

The collection in the ports of the United States of discriminating
duties upon the vessels of Chili and their cargoes has been suspended,
pursuant to the provisions of the act of Congress of the 24th of May,
1828. It is to be hoped that this measure will impart a fresh impulse to
the commerce between the two countries, which of late, and especially
since our acquisition of California, has, to the mutual advantage of the
parties, been much augmented.

Peruvian guano has become so desirable an article to the agricultural
interest of the United States that it is the duty of the Government to
employ all the means properly in its power for the purpose of causing
that article to be imported into the country at a reasonable price.
Nothing will be omitted on my part toward accomplishing this desirable
end. I am persuaded that in removing any restraints on this traffic the
Peruvian Government will promote its own best interests, while it will
afford a proof of a friendly disposition toward this country, which will
be duly appreciated.

The treaty between the United States and His Majesty the King of the
Hawaiian Islands, which has recently been made public, will, it is
believed, have a beneficial effect upon the relations between the two
countries.

The relations between those parts of the island of St. Domingo which
were formerly colonies of Spain and France, respectively, are still in
an unsettled condition. The proximity of that island to the United
States and the delicate questions involved in the existing controversy
there render it desirable that it should be permanently and speedily
adjusted. The interests of humanity and of general commerce also demand
this; and as intimations of the same sentiment have been received from
other governments, it is hoped that some plan may soon be devised to
effect the object in a manner likely to give general satisfaction. The
Government of the United States will not fail, by the exercise of all
proper friendly offices, to do all in its power to put an end to the
destructive war which has raged between the different parts of the
island and to secure to them both the benefits of peace and commerce.

I refer you to the report of the Secretary of the Treasury for a
detailed statement of the finances.

The total receipts into the Treasury for the year ending 30th of June
last were $47,421,748.90. The total expenditures during the same period
were $43,002,168.90. The public debt has been reduced since the last
annual report from the Treasury Department $495,276.79.

By the nineteenth section of the act of 28th January, 1847, the proceeds
of the sales of the public lands were pledged for the interest and
principal of the public debt. The great amount of those lands
subsequently granted by Congress for military bounties will, it is
believed, very nearly supply the public demand for several years to
come, and but little reliance can, therefore, be placed on that hitherto
fruitful source of revenue. Aside from the permanent annual
expenditures, which have necessarily largely increased, a portion of the
public debt, amounting to $8,075,986.59, must be provided for within the
next two fiscal years. It is most desirable that these accruing demands
should be met without resorting to new loans.

All experience has demonstrated the wisdom and policy of raising a large
portion of revenue for the support of Government from duties on goods
imported. The power to lay these duties is unquestionable, and its chief
object, of course, is to replenish the Treasury. But if in doing this an
incidental advantage may be gained by encouraging the industry of our
own citizens, it is our duty to avail ourselves of that advantage.

A duty laid upon an article which can not be produced in this country,
such as tea or coffee, adds to the cost of the article, and is chiefly
or wholly paid by the consumer. But a duty laid upon an article which
may be produced here stimulates the skill and industry of our own
country to produce the same article, which is brought into the market in
competition with the foreign article, and the importer is thus compelled
to reduce his price to that at which the domestic article can be sold,
thereby throwing a part of the duty upon the producer of the foreign
article. The continuance of this process creates the skill and invites
the capital which finally enable us to produce the article much cheaper
than it could have been procured from abroad, thereby benefiting both
the producer and the consumer at home. The consequence of this is that
the artisan and the agriculturist are brought together, each affords a
ready market for the produce of the other, the whole country becomes
prosperous, and the ability to produce every necessary of life renders
us independent in war as well as in peace.

A high tariff can never be permanent. It will cause dissatisfaction, and
will be changed. It excludes competition, and thereby invites the
investment of capital in manufactures to such excess that when changed
it brings distress, bankruptcy, and ruin upon all who have been misled
by its faithless protection. What the manufacturer wants is uniformity
and permanency, that he may feel a confidence that he is not to be
ruined by sudden exchanges. But to make a tariff uniform and permanent
it is not only necessary that the laws should not be altered, but that
the duty should not fluctuate. To effect this all duties should be
specific wherever the nature of the article is such as to admit of it.
Ad valorem duties fluctuate with the price and offer strong temptations
to fraud and perjury. Specific duties, on the contrary, are equal and
uniform in all ports and at all times, and offer a strong inducement to
the importer to bring the best article, as he pays no more duty upon
that than upon one of inferior quality. I therefore strongly recommend a
modification of the present tariff, which has prostrated some of our
most important and necessary manufactures, and that specific duties be
imposed sufficient to raise the requisite revenue, making such
discriminations in favor of the industrial pursuits of our own country
as to encourage home production without excluding foreign competition.
It is also important that an unfortunate provision in the present
tariff, which imposes a much higher duty upon the raw material that
enters into our manufactures than upon the manufactured article, should
be remedied.

The papers accompanying the report of the Secretary of the Treasury will
disclose frauds attempted upon the revenue, in variety and amount so
great as to justify the conclusion that it is impossible under any
system of ad valorem duties levied upon the foreign cost or value of the
article to secure an honest observance and an effectual administration
of the laws. The fraudulent devices to evade the law which have been
detected by the vigilance of the appraisers leave no room to doubt that
similar impositions not discovered, to a large amount, have been
successfully practiced since the enactment of the law now in force. This
state of things has already had a prejudicial influence upon those
engaged in foreign commerce. It has a tendency to drive the honest
trader from the business of importing and to throw that important branch
of employment into the hands of unscrupulous and dishonest men, who are
alike regardless of law and the obligations of an oath. By these means
the plain intentions of Congress, as expressed in the law, are daily
defeated. Every motive of policy and duty, therefore, impels me to ask
the earnest attention of Congress to this subject. If Congress should
deem it unwise to attempt any important changes in the system of levying
duties at this session, it will become indispensable to the protection
of the revenue that such remedies as in the judgment of Congress may
mitigate the evils complained of should be at once applied.

As before stated, specific duties would, in my opinion, afford the most
perfect remedy for this evil; but if you should not concur in this view,
then, as a partial remedy, I beg leave respectfully to recommend that
instead of taking the invoice of the article abroad as a means of
determining its value here, the correctness of which invoice it is in
many cases impossible to verify, the law be so changed as to require a
home valuation or appraisal, to be regulated in such manner as to give,
as far as practicable, uniformity in the several ports.

There being no mint in California, I am informed that the laborers in
the mines are compelled to dispose of their gold dust at a large
discount. This appears to me to be a heavy and unjust tax upon the labor
of those employed in extracting this precious metal, and I doubt not you
will be disposed at the earliest period possible to relieve them from it
by the establishment of a mint. In the meantime, as an assayer's office
is established there, I would respectfully submit for your consideration
the propriety of authorizing gold bullion which has been assayed and
stamped to be received in payment of Government dues. I can not conceive
that the Treasury would suffer any loss by such a provision, which will
at once raise bullion to its par value, and thereby save (if I am
rightly informed) many millions of dollars to the laborers which are now
paid in brokerage to convert this precious metal into available funds.
This discount upon their hard earnings is a heavy tax, and every effort
should be made by the Government to relieve them from so great a burden.

More than three-fourths of our population are engaged in the cultivation
of the soil. The commercial, manufacturing, and navigating interests are
all to a great extent dependent on the agricultural. It is therefore the
most important interest of the nation, and has a just claim to the
fostering care and protection of the Government so far as they can be
extended consistently with the provisions of the Constitution. As this
can not be done by the ordinary modes of legislation, I respectfully
recommend the establishment of an agricultural bureau, to be charged
with the duty of giving to this leading branch of American industry the
encouragement which it so well deserves. In view of the immense mineral
resources of our country, provision should also be made for the
employment of a competent mineralogist and chemist, who should be
required, under the direction of the head of the bureau, to collect
specimens of the various minerals of our country and to ascertain by
careful analysis their respective elements and properties and their
adaptation to useful purposes. He should also be required to examine and
report upon the qualities of different soils and the manures best
calculated to improve their productiveness. By publishing the results of
such experiments, with suitable explanations, and by the collection and
distribution of rare seeds and plants, with instructions as to the best
system of cultivation, much may be done to promote this great national
interest.

In compliance with the act of Congress passed on the 23d of May, 1850,
providing, among other things, for taking the Seventh Census, a
superintendent was appointed and all other measures adopted which were
deemed necessary to insure the prompt and faithful performance of that
duty. The appropriation already made will, it is believed, be sufficient
to defray the whole expense of the work, but further legislation may be
necessary in regard to the compensation of some of the marshals of the
Territories. It will also be proper to make provision by law at an early
day for the publication of such abstracts of the returns as the public
interests may require.

The unprecedented growth of our territories on the Pacific in wealth and
population and the consequent increase of their social and commercial
relations with the Atlantic States seem to render it the duty of the
Government to use all its constitutional power to improve the means of
intercourse with them. The importance of opening "a line of
communication, the best and most expeditious of which the nature of the
country will admit," between the Valley of the Mississippi and the
Pacific was brought to your notice by my predecessor in his annual
message; and as the reasons which he presented in favor of the measure
still exist in full force, I beg leave to call your attention to them
and to repeat the recommendations then made by him.

The uncertainty which exists in regard to the validity of land titles in
California is a subject which demands your early consideration. Large
bodies of land in that State are claimed under grants said to have been
made by authority of the Spanish and Mexican Governments. Many of these
have not been perfected, others have been revoked, and some are believed
to be fraudulent. But until they shall have been judicially investigated
they will continue to retard the settlement and improvement of the
country. I therefore respectfully recommend that provision be made by
law for the appointment of commissioners to examine all such claims with
a view to their final adjustment.

I also beg leave to call your attention to the propriety of extending at
an early day our system of land laws, with such modifications as may be
necessary, over the State of California and the Territories of Utah and
New Mexico. The mineral lands of California will, of course, form an
exception to any general system which may be adopted. Various methods of
disposing of them have been suggested. I was at first inclined to favor
the system of leasing, as it seemed to promise the largest revenue to
the Government and to afford the best security against monopolies; but
further reflection and our experience in leasing the lead mines and
selling lands upon credit have brought my mind to the conclusion that
there would be great difficulty in collecting the rents, and that the
relation of debtor and creditor between the citizens and the Government
would be attended with many mischievous consequences. I therefore
recommend that instead of retaining the mineral lands under the
permanent control of the Government they be divided into small parcels
and sold, under such restrictions as to quantity and time as will insure
the best price and guard most effectually against combinations of
capitalists to obtain monopolies.

The annexation of Texas and the acquisition of California and New Mexico
have given increased importance to our Indian relations. The various
tribes brought under our jurisdiction by these enlargements of our
boundaries are estimated to embrace a population of 124,000. Texas and
New Mexico are surrounded by powerful tribes of Indians, who are a
source of constant terror and annoyance to the inhabitants. Separating
into small predatory bands, and always mounted, they overrun the
country, devastating farms, destroying crops, driving off whole herds of
cattle, and occasionally murdering the inhabitants or carrying them into
captivity. The great roads leading into the country are infested with
them, whereby traveling is rendered extremely dangerous and immigration
is almost entirely arrested. The Mexican frontier, which by the eleventh
article of the treaty of Guadalupe Hidalgo we are bound to protect
against the Indians within our border, is exposed to these incursions
equally with our own. The military force stationed in that country,
although forming a large proportion of the Army, is represented as
entirely inadequate to our own protection and the fulfillment of our
treaty stipulations with Mexico. The principal deficiency is in cavalry,
and I recommend that Congress should, at as early a period as
practicable, provide for the raising of one or more regiments of mounted
men.

For further suggestions on this subject and others connected with our
domestic interests and the defense of our frontier, I refer you to the
reports of the Secretary of the Interior and of the Secretary of War.

I commend also to your favorable consideration the suggestion contained
in the last-mentioned report and in the letter of the General in Chief
relative to the establishment of an asylum for the relief of disabled
and destitute soldiers. This subject appeals so strongly to your
sympathies that it would be superfluous in me to say anything more than
barely to express my cordial approbation of the proposed object.

The Navy continues to give protection to our commerce and other national
interests in the different quarters of the globe, and, with the
exception of a single steamer on the Northern lakes, the vessels in
commission are distributed in six different squadrons.

The report of the head of that Department will exhibit the services of
these squadrons and of the several vessels employed in each during the
past year. It is a source of gratification that, while they have been
constantly prepared for any hostile emergency, they have everywhere met
with the respect and courtesy due as well to the dignity as to the
peaceful dispositions and just purposes of the nation.

The two brigantines accepted by the Government from a generous citizen
of New York and placed under the command of an officer of the Navy to
proceed to the Arctic Seas in quest of the British commander Sir John
Franklin and his companions, in compliance with the act of Congress
approved in May last, had when last heard from penetrated into a high
northern latitude; but the success of this noble and humane enterprise
is yet uncertain.

I invite your attention to the view of our present naval establishment
and resources presented in the report of the Secretary of the Navy, and
the suggestions therein made for its improvement, together with the
naval policy recommended for the security of our Pacific Coast and the
protection and extension of our commerce with eastern Asia. Our
facilities for a larger participation in the trade of the East, by means
of our recent settlements on the shores of the Pacific, are too obvious
to be overlooked or disregarded.

The questions in relation to rank in the Army and Navy and relative rank
between officers of the two branches of the service, presented to the
Executive by certain resolutions of the House of Representatives at the
last session of Congress, have been submitted to a board of officers in
each branch of the service, and their report may be expected at an early
day.

I also earnestly recommend the enactment of a law authorizing officers
of the Army and Navy to be retired from the service when incompetent for
its vigorous and active duties, taking care to make suitable provision
for those who have faithfully served their country and awarding
distinctions by retaining in appropriate commands those who have been
particularly conspicuous for gallantry and good conduct. While the
obligation of the country to maintain and honor those who, to the
exclusion of other pursuits, have devoted themselves to its arduous
service is acknowledged, this obligation should not be permitted to
interfere with the efficiency of the service itself.

I am gratified in being able to state that the estimates of expenditure
for the Navy in the ensuing year are less by more than $1,000,000 than
those of the present, excepting the appropriation which may become
necessary for the construction of a dock on the coast of the Pacific,
propositions for which are now being considered and on which a special
report may be expected early in your present session.

There is an evident justness in the suggestion of the same report that
appropriations for the naval service proper should be separated from
those for fixed and permanent objects, such as building docks and navy
yards and the fixtures attached, and from the extraordinary objects
under the care of the Department which, however important, are not
essentially naval.

A revision of the code for the government of the Navy seems to require
the immediate consideration of Congress. Its system of crimes and
punishments had undergone no change for half a century until the last
session, though its defects have been often and ably pointed out; and
the abolition of a particular species of corporal punishment, which then
took place, without providing any substitute, has left the service in a
state of defectiveness which calls for prompt correction. I therefore
recommend that the whole subject be revised without delay and such a
system established for the enforcement of discipline as shall be at once
humane and effectual.

The accompanying report of the Postmaster-General presents a
satisfactory view of the operations and condition of that Department. At
the close of the last fiscal year the length of the inland mail routes
in the United States (not embracing the service in Oregon and
California) was 178,672 miles, the annual transportation thereon
46,541,423 miles, and the annual cost of such transportation $2,724,426.
The increase of the annual transportation over that of the preceding
year was 3,997,354 miles and the increase in cost was $342,440. The
number of post-offices in the United States on the 1st day of July last
was 18,417, being an increase of 1,670 during the preceding year.

The gross revenues of the Department for the fiscal year ending June 30,
1850, amounted to $5,552,971.48, including the annual appropriation of
$200,000 for the franked matter of the Departments and excluding the
foreign postages collected for and payable to the British Government.

The expenditures for the same period were $5,212,953.43, leaving a
balance of revenue over expenditures of $340,018.05.

I am happy to find that the fiscal condition of the Department is such
as to justify the Postmaster-General in recommending the reduction of
our inland letter postage to 3 cents the single letter when prepaid and
5 cents when not prepaid. He also recommends that the prepaid rate shall
be reduced to 2 cents whenever the revenues of the Department, after the
reduction, shall exceed its expenditures by more than 5 per cent for two
consecutive years; that the postage upon California and other letters
sent by our ocean steamers shall be much reduced, and that the rates of
postage on newspapers, pamphlets, periodicals, and other printed matter
shall be modified and some reduction thereon made.

It can not be doubted that the proposed reductions will for the present
diminish the revenues of the Department. It is believed that the
deficiency, after the surplus already accumulated shall be exhausted,
may be almost wholly met either by abolishing the existing privileges of
sending free matter through the mails or by paying out of the Treasury
to the Post-Office Department a sum equivalent to the postage of which
it is deprived by such privileges. The last is supposed to be the
preferable mode, and will, if not entirely, so nearly supply that
deficiency as to make any further appropriation that may be found
necessary so inconsiderable as to form no obstacle to the proposed
reductions.

I entertain no doubt of the authority of Congress to make appropriations
for leading objects in that class of public works comprising what are
usually called works of internal improvement. This authority I suppose
to be derived chiefly from the power of regulating commerce with foreign
nations and among the States and the power of laying and collecting
imposts. Where commerce is to be carried on and imposts collected there
must be ports and harbors as well as wharves and custom-houses. If ships
laden with valuable cargoes approach the shore or sail along the coast,
light-houses are necessary at suitable points for the protection of life
and property. Other facilities and securities for commerce and
navigation are hardly less important; and those clauses of the
Constitution, therefore, to which I have referred have received from the
origin of the Government a liberal and beneficial construction. Not only
have light-houses, buoys, and beacons been established and floating
lights maintained, but harbors have been cleared and improved, piers
constructed, and even breakwaters for the safety of shipping and sea
walls to protect harbors from being filled up and rendered useless by
the action of the ocean, have been erected at very great expense. And
this construction of the Constitution appears the more reasonable from
the consideration that if these works, of such evident importance and
utility, are not to be accomplished by Congress they can not be
accomplished at all. By the adoption of the Constitution the several
States voluntarily parted with the power of collecting duties of imposts
in their own ports, and it is not to be expected that they should raise
money by internal taxation, direct or indirect, for the benefit of that
commerce the revenues derived from which do not, either in whole or in
part, go into their own treasuries. Nor do I perceive any difference
between the power of Congress to make appropriations for objects of this
kind on the ocean and the power to make appropriations for similar
objects on lakes and rivers, wherever they are large enough to bear on
their waters an extensive traffic. The magnificent Mississippi and its
tributaries and the vast lakes of the North and Northwest appear to me
to fall within the exercise of the power as justly and as clearly as the
ocean and the Gulf of Mexico. It is a mistake to regard expenditures
judiciously made for these objects as expenditures for local purposes.
The position or sight of the work is necessarily local, but its utility
is general. A ship canal around the Falls of St. Mary of less than a
mile in length, though local in its construction, would yet be national
in its purpose and its benefits, as it would remove the only obstruction
to a navigation of more than 1,000 miles, affecting several States, as
well as our commercial relations with Canada. So, too, the breakwater at
the mouth of the Delaware is erected, not for the exclusive benefit of
the States bordering on the bay and river of that name, but for that of
the whole coastwise navigation of the United States and, to a
considerable extent, also of foreign commerce. If a ship be lost on the
bar at the entrance of a Southern port for want of sufficient depth of
water, it is very likely to be a Northern ship; and if a steamboat be
sunk in any part of the Mississippi on account of its channel not having
been properly cleared of obstructions, it may be a boat belonging to
either of eight or ten States. I may add, as somewhat remarkable, that
among all the thirty-one States there is none that is not to a greater
or less extent bounded on the ocean, or the Gulf of Mexico, or one of
the Great Lakes, or some navigable river.

In fulfilling our constitutional duties, fellow-citizens, on this
subject, as in carrying into effect all other powers conferred by the
Constitution, we should consider ourselves as deliberating and acting
for one and the same country, and bear constantly in mind that our
regard and our duty are due not to a particular part only, but to the
whole.

I therefore recommend that appropriations be made for completing such
works as have been already begun and for commencing such others as may
seem to the wisdom of Congress to be of public and general importance.

The difficulties and delays incident to the settlement of private claims
by Congress amount in many cases to a denial of justice. There is reason
to apprehend that many unfortunate creditors of the Government have
thereby been unavoidably ruined. Congress has so much business of a
public character that it is impossible it should give much attention to
mere private claims, and their accumulation is now so great that many
claimants must despair of ever being able to obtain a hearing. It may
well be doubted whether Congress, from the nature of its organization,
is properly constituted to decide upon such cases. It is impossible that
each member should examine the merits of every claim on which he is
compelled to vote, and it is preposterous to ask a judge to decide a
case which he has never heard. Such decisions may, and frequently must,
do injustice either to the claimant or the Government, and I perceive no
better remedy for this growing evil than the establishment of some
tribunal to adjudicate upon such claims. I beg leave, therefore, most
respectfully to recommend that provision be made by law for the
appointment of a commission to settle all private claims against the
United States; and as an ex parte hearing must in all contested cases be
very unsatisfactory, I also recommend the appointment of a solicitor,
whose duty it shall be to represent the Government before such
commission and protect it against all illegal, fraudulent, or unjust
claims which may be presented for their adjudication. This District,
which has neither voice nor vote in your deliberations, looks to you for
protection and aid, and I commend all its wants to your favorable
consideration, with a full confidence that you will meet them not only
with justice, but with liberality. It should be borne in mind that in
this city, laid out by Washington and consecrated by his name, is
located the Capitol of our nation, the emblem of our Union and the
symbol of our greatness. Here also are situated all the public buildings
necessary for the use of the Government, and all these are exempt from
taxation. It should be the pride of Americans to render this place
attractive to the people of the whole Republic and convenient and safe
for the transaction of the public business and the preservation of the
public records. The Government should therefore bear a liberal
proportion of the burdens of all necessary and useful improvements. And
as nothing could contribute more to the health, comfort, and safety of
the city and the security of the public buildings and records than an
abundant supply of pure water, I respectfully recommend that you make
such provisions for obtaining the same as in your wisdom you may deem
proper.

The act, passed at your last session, making certain propositions to
Texas for settling the disputed boundary between that State and the
Territory of New Mexico was, immediately on its passage, transmitted by
express to the governor of Texas, to be laid by him before the general
assembly for its agreement thereto. Its receipt was duly acknowledged,
but no official information has yet been received of the action of the
general assembly thereon. It may, however, be very soon expected, as, by
the terms of the propositions submitted they were to have been acted
upon on or before the first day of the present month.

It was hardly to have been expected that the series of measures passed
at your last session with the view of healing the sectional differences
which had sprung from the slavery and territorial questions should at
once have realized their beneficent purpose. All mutual concession in
the nature of a compromise must necessarily be unwelcome to men of
extreme opinions. And though without such concessions our Constitution
could not have been formed, and can not be permanently sustained, yet we
have seen them made the subject of bitter controversy in both sections
of the Republic. It required many months of discussion and deliberation
to secure the concurrence of a majority of Congress in their favor. It
would be strange if they had been received with immediate approbation by
people and States prejudiced and heated by the exciting controversies of
their representatives. I believe those measures to have been required by
the circumstances and condition of the country. I believe they were
necessary to allay asperities and animosities that were rapidly
alienating one section of the country from another and destroying those
fraternal sentiments which are the strongest supports of the
Constitution. They were adopted in the spirit of conciliation and for
the purpose of conciliation. I believe that a great majority of our
fellow citizens sympathize in that spirit and that purpose, and in the
main approve and are prepared in all respects to sustain these
enactments. I can not doubt that the American people, bound together by
kindred blood and common traditions, still cherish a paramount regard
for the Union of their fathers, and that they are ready to rebuke any
attempt to violate its integrity, to disturb the compromises on which it
is based, or to resist the laws which have been enacted under its
authority.

The series of measures to which I have alluded are regarded by me as a
settlement in principle and substance--a final settlement of the
dangerous and exciting subjects which they embraced. Most of these
subjects, indeed, are beyond your reach, as the legislation which
disposed of them was in its character final and irrevocable. It may be
presumed from the opposition which they all encountered that none of
those measures was free from imperfections, but in their mutual
dependence and connection they formed a system of compromise the most
conciliatory and best for the entire country that could be obtained from
conflicting sectional interests and opinions.

For this reason I recommend your adherence to the adjustment established
by those measures until time and experience shall demonstrate the
necessity of further legislation to guard against evasion or abuse.

By that adjustment we have been rescued from the wide and boundless
agitation that surrounded us, and have a firm, distinct, and legal
ground to rest upon. And the occasion, I trust, will justify me in
exhorting my countrymen to rally upon and maintain that ground as the
best, if not the only, means of restoring peace and quiet to the country
and maintaining inviolate the integrity of the Union.

And now, fellow-citizens, I can not bring this communication to a close
without invoking you to join me in humble and devout thanks to the Great
Ruler of Nations for the multiplied blessings which He has graciously
bestowed upon us. His hand, so often visible in our preservation, has
stayed the pestilence, saved us from foreign wars and domestic
disturbances, and scattered plenty throughout the land.

Our liberties, religions and civil, have been maintained, the fountains
of knowledge have all been kept open, and means of happiness widely
spread and generally enjoyed greater than have fallen to the lot of any
other nation. And while deeply penetrated with gratitude for the past,
let us hope that His all-wise providence will so guide our counsels as
that they shall result in giving satisfaction to our constituents,
securing the peace of the country, and adding new strength to the united
Government under which we live.

***

State of the Union Address
Millard Fillmore
December 2, 1851

Fellow-Citizens of the Senate and of the House of Representatives:

I congratulate you and our common constituency upon the favorable
auspices under which you meet for your first session. Our country is at
peace with all the world. The agitation which for a time threatened to
disturb the fraternal relations which make us one people is fast
subsiding, and a year of general prosperity and health has crowned the
nation with unusual blessings. None can look back to the dangers which
are passed or forward to the bright prospect before us without feeling a
thrill of gratification, at the same time that he must be impressed with
a grateful sense of our profound obligations to a beneficent Providence,
whose paternal care is so manifest in the happiness of this highly
favored land.

Since the close of the last Congress certain Cubans and other foreigners
resident in the United States, who were more or less concerned in the
previous invasion of Cuba, instead of being discouraged by its failure
have again abused the hospitality of this country by making it the scene
of the equipment of another military expedition against that possession
of Her Catholic Majesty, in which they were countenanced, aided, and
joined by citizens of the United States. On receiving intelligence that
such designs were entertained, I lost no time in issuing such
instructions to the proper officers of the United States as seemed to be
called for by the occasion. By the proclamation a copy of which is
herewith submitted I also warned those who might be in danger of being
inveigled into this scheme of its unlawful character and of the
penalties which they would incur. For some time there was reason to hope
that these measures had sufficed to prevent any such attempt. This hope,
however, proved to be delusive. Very early in the morning of the 3d of
August a steamer called the Pampero departed from New Orleans for Cuba,
having on board upward of 400 armed men with evident intentions to make
war upon the authorities of the island. This expedition was set on foot
in palpable violation of the laws of the United States. Its leader was a
Spaniard, and several of the chief officers and some others engaged in
it were foreigners. The persons composing it, however, were mostly
citizens of the United States.

Before the expedition set out, and probably before it was organized, a
slight insurrectionary movement, which appears to have been soon
suppressed, had taken place in the eastern quarter of Cuba. The
importance of this movement was, unfortunately, so much exaggerated in
the accounts of it published in this country that these adventurers seem
to have been led to believe that the Creole population of the island not
only desired to throw off the authority of the mother country, but had
resolved upon that step and had begun a well-concerted enterprise for
effecting it. The persons engaged in the expedition were generally young
and ill informed. The steamer in which they embarked left New Orleans
stealthily and without a clearance. After touching at Key West, she
proceeded to the coast of Cuba, and on the night between the 11th and
12th of August landed the persons on board at Playtas, within about 20
leagues of Havana.

The main body of them proceeded to and took possession of an inland
village 6 leagues distant, leaving others to follow in charge of the
baggage as soon as the means of transportation could be obtained. The
latter, having taken up their line of march to connect themselves with
the main body, and having proceeded about 4 leagues into the country,
were attacked on the morning of the 13th by a body of Spanish troops,
and a bloody conflict ensued, after which they retreated to the place of
disembarkation, where about 50 of them obtained boats and reembarked
therein. They were, however, intercepted among the keys near the shore
by a Spanish steamer cruising on the coast, captured and carried to
Havana, and after being examined before a military court were sentenced
to be publicly executed, and the sentence was carried into effect on the
16th of August.

On receiving information of what had occurred Commodore Foxhall A.
Parker was instructed to proceed in the steam frigate Saranac to Havana
and inquire into the charges against the persons executed, the
circumstances under which they were taken, and whatsoever referred to
their trial and sentence. Copies of the instructions from the Department
of State to him and of his letters to that Department are herewith
submitted.

According to the record of the examination, the prisoners all admitted
the offenses charged against them, of being hostile invaders of the
island. At the time of their trial and execution the main body of the
invaders was still in the field making war upon the Spanish authorities
and Spanish subjects. After the lapse of some days, being overcome by
the Spanish troops, they dispersed on the 24th of August. Lopez, their
leader, was captured some days after, and executed on the 1st of
September. Many of his remaining followers were killed or died of hunger
and fatigue, and the rest were made prisoners. Of these none appear to
have been tried or executed. Several of them were pardoned upon
application of their friends and others, and the rest, about 160 in
number, were sent to Spain. Of the final disposition made of these we
have no official information.

Such is the melancholy result of this illegal and ill-fated expedition.
Thus thoughtless young men have been induced by false and fraudulent
representations to violate the law of their country through rash and
unfounded expectations of assisting to accomplish political revolutions
in other states, and have lost their lives in the undertaking. Too
severe a judgment can hardly be passed by the indignant sense of the
community upon those who, being better informed themselves, have yet led
away the ardor of youth and an ill-directed love of political liberty.
The correspondence between this Government and that of Spain relating to
this transaction is herewith communicated.

Although these offenders against the laws have forfeited the protection
of their country, yet the Government may, so far as consistent with its
obligations to other countries and its fixed purpose to maintain and
enforce the laws, entertain sympathy for their unoffending families and
friends, as well as a feeling of compassion for themselves. Accordingly,
no proper effort has been spared and none will be spared to procure the
release of such citizens of the United States engaged in this unlawful
enterprise as are now in confinement in Spain; but it is to be hoped
that such interposition with the Government of that country may not be
considered as affording any ground of expectation that the Government of
the United States will hereafter feel itself under any obligation of
duty to intercede for the liberation or pardon of such persons as are
flagrant offenders against the law of nations and the laws of the United
States. These laws must be executed. If we desire to maintain our
respectability among the nations of the earth, it behooves us to enforce
steadily and sternly the neutrality acts passed by Congress and to
follow as far as may be the violation of those acts with condign
punishment.

But what gives a peculiar criminality to this invasion of Cuba is that,
under the lead of Spanish subjects and with the aid of citizens of the
United States, it had its origin with many in motives of cupidity. Money
was advanced by individuals, probably in considerable amounts, to
purchase Cuban bonds, as they have been called, issued by Lopez, sold,
doubtless, at a very large discount, and for the payment of which the
public lands and public property of Cuba, of whatever kind, and the
fiscal resources of the people and government of that island, from
whatever source to be derived, were pledged, as well as the good faith
of the government expected to be established. All these means of
payment, it is evident, were only to be obtained by a process of
bloodshed, war, and revolution. None will deny that those who set on
foot military expeditions against foreign states by means like these are
far more culpable than the ignorant and the necessitous whom they induce
to go forth as the ostensible parties in the proceeding. These
originators of the invasion of Cuba seem to have determined with
coolness and system upon an undertaking which should disgrace their
country, violate its laws, and put to hazard the lives of ill-informed
and deluded men. You will consider whether further legislation be
necessary to prevent the perpetration of such offenses in future.

No individuals have a right to hazard the peace of the country or to
violate its laws upon vague notions of altering or reforming governments
in other states. This principle is not only reasonable in itself and in
accordance with public law, but is ingrafted into the codes of other
nations as well as our own. But while such are the sentiments of this
Government, it may be added that every independent nation must be
presumed to be able to defend its possessions against unauthorized
individuals banded together to attack them. The Government of the United
States at all times since its establishment has abstained and has sought
to restrain the citizens of the country from entering into controversies
between other powers, and to observe all the duties of neutrality. At an
early period of the Government, in the Administration of Washington,
several laws were passed for this purpose. The main provisions of these
laws were reenacted by the act of April, 1818, by which, amongst other
things, it was declared that--

If any person shall, within the territory or jurisdiction of the United
States, begin, or set on foot, or provide or prepare the means for, any
military expedition or enterprise to be carried on from thence against
the territory or dominions of any foreign prince or state, or of any
colony, district, or people, with whom the United States are at peace,
every person so offending shall be deemed guilty of a high misdemeanor,
and shall be fined not exceeding $3,000 and imprisoned not more than
three years.

And this law has been executed and enforced to the full extent of the
power of the Government from that day to this.

In proclaiming and adhering to the doctrine of neutrality and
nonintervention, the United States have not followed the lead of other
civilized nations; they have taken the lead themselves and have been
followed by others. This was admitted by one of the most eminent of
modern British statesmen, who said in Parliament, while a minister of
the Crown, "that if he wished for a guide in a system of neutrality he
should take that laid down by America in the days of Washington and the
secretaryship of Jefferson;" and we see, in fact, that the act of
Congress of 1818 was followed the succeeding year by an act of the
Parliament of England substantially the same in its general provisions.
Up to that time there had been no similar law in England, except certain
highly penal statutes passed in the reign of George II, prohibiting
English subjects from enlisting in foreign service, the avowed object of
which statutes was that foreign armies, raised for the purpose of
restoring the house of Stuart to the throne, should not be strengthened
by recruits from England herself.

All must see that difficulties may arise in carrying the laws referred
to into execution in a country now having 3,000 or 4,000 miles of
seacoast, with an infinite number of ports and harbors and small inlets,
from some of which unlawful expeditious may suddenly set forth, without
the knowledge of Government, against the possessions of foreign states.

"Friendly relations with all, but entangling alliances with none," has
long been a maxim with us. Our true mission is not to propagate our
opinions or impose upon other countries our form of government by
artifice or force, but to teach by example and show by our success,
moderation, and justice the blessings of self-government and the
advantages of free institutions. Let every people choose for itself and
make and alter its political institutions to suit its own condition and
convenience. But while we avow and maintain this neutral policy
ourselves, we are anxious to see the same forbearance on the part of
other nations whose forms of government are different from our own. The
deep interest which we feel in the spread of liberal principles and the
establishment of free governments and the sympathy with which we witness
every struggle against oppression forbid that we should be indifferent
to a case in which the strong arm of a foreign power is invoked to
stifle public sentiment and repress the spirit of freedom in any
country.

The Governments of Great Britain and France have issued orders to their
naval commanders on the West India station to prevent, by force if
necessary, the landing of adventurers from any nation on the island of
Cuba with hostile intent. The copy of a memorandum of a conversation on
this subject between the charge d'affaires of Her Britannic Majesty and
the Acting Secretary of State and of a subsequent note of the former to
the Department of State are herewith submitted, together with a copy of
a note of the Acting Secretary of State to the minister of the French
Republic and of the reply of the latter on the same subject. These
papers will acquaint you with the grounds of this interposition of two
leading commercial powers of Europe, and with the apprehensions, which
this Government could not fail to entertain, that such interposition, if
carried into effect, might lead to abuses in derogation of the maritime
rights of the United States. The maritime rights of the United States
are founded on a firm, secure, and well-defined basis; they stand upon
the ground of national independence and public law, and will be
maintained in all their full and just extent. The principle which this
Government has heretofore solemnly announced it still adheres to, and
will maintain under all circumstances and at all hazards. That principle
is that in every regularly documented merchant vessel the crew who
navigate it and those on board of it will find their protection in the
flag which is over them. No American ship can be allowed to be visited
or searched for the purpose of ascertaining the character of individuals
on board, nor can there be allowed any watch by the vessels of any
foreign nation over American vessels on the coast of the United States
or the seas adjacent thereto. It will be seen by the last communication
from the British charge d'affaires to the Department of State that he is
authorized to assure the Secretary of State that every care will be
taken that in executing the preventive measures against the expeditions
which the United States Government itself has denounced as not being
entitled to the protection of any government no interference shall take
place with the lawful commerce of any nation.

In addition to the correspondence on this subject herewith submitted,
official information has been received at the Department of State of
assurances by the French Government that in the orders given to the
French naval forces they were expressly instructed, in any operations
they might engage in, to respect the flag of the United States wherever
it might appear, and to commit no act of hostility upon any vessel or
armament under its protection.

Ministers and consuls of foreign nations are the means and agents of
communication between us and those nations, and it is of the utmost
importance that while residing in the country they should feel a perfect
security so long as they faithfully discharge their respective duties
and are guilty of no violation of our laws. This is the admitted law of
nations and no country has a deeper interest in maintaining it than the
United States. Our commerce spreads over every sea and visits every
clime, and our ministers and consuls are appointed to protect the
interests of that commerce as well as to guard the peace of the country
and maintain the honor of its flag. But how can they discharge these
duties unless they be themselves protected? And if protected it must be
by the laws of the country in which they reside. And what is due to our
own public functionaries residing in foreign nations is exactly the
measure of what is due to the functionaries of other governments
residing here. As in war the bearers of flags of truce are sacred, or
else wars would be interminable, so in peace ambassadors, public
ministers, and consuls, charged with friendly national intercourse, are
objects of especial respect and protection, each according to the rights
belonging to his rank and station. In view of these important
principles, it is with deep mortification and regret I announce to you
that during the excitement growing out of the executions at Havana the
office of Her Catholic Majesty's consul at New Orleans was assailed by a
mob, his property destroyed, the Spanish flag found in the office
carried off and torn in pieces, and he himself induced to flee for his
personal safety, which he supposed to be in danger. On receiving
intelligence of these events I forthwith directed the attorney of the
United States residing at New Orleans to inquire into the facts and the
extent of the pecuniary loss sustained by the consul, with the intention
of laying them before you, that you might make provision for such
indemnity to him as a just regard for the honor of the nation and the
respect which is due to a friendly power might, in your judgment, seem
to require. The correspondence upon this subject between the Secretary
of State and Her Catholic Majesty's minister plenipotentiary is herewith
transmitted.

The occurrence at New Orleans has led me to give my attention to the
state of our laws in regard to foreign ambassadors, ministers, and
consuls. I think the legislation of the country is deficient in not
providing sufficiently either for the protection or the punishment of
consuls. I therefore recommend the subject to the consideration of
Congress.

Your attention is again invited to the question of reciprocal trade
between the United States and Canada and other British possessions near
our frontier. Overtures for a convention upon this subject have been
received from Her Britannic Majesty's minister plenipotentiary, but it
seems to be in many respects preferable that the matter should be
regulated by reciprocal legislation. Documents are laid before you
showing the terms which the British Government is willing to offer and
the measures which it may adopt if some arrangement upon this subject
shall not be made.

From the accompanying copy of a note from the British legation at
Washington and the reply of the Department of State thereto it will
appear that Her Britannic Majesty's Government is desirous that a part
of the boundary line between Oregon and the British possessions should
be authoritatively marked out, and that an intention was expressed to
apply to Congress for an appropriation to defray the expense thereof on
the part of the United States. Your attention to this subject is
accordingly invited and a proper appropriation recommended. A convention
for the adjustment of claims of citizens of the United States against
Portugal has been concluded and the ratifications have been exchanged.
The first installment of the amount to be paid by Portugal fell due on
the 30th of September last and has been paid. The President of the
French Republic, according to the provisions of the convention, has been
selected as arbiter in the case of the General Armstrong, and has
signified that he accepts the trust and the high satisfaction he feels
in acting as the common friend of two nations with which France is
united by sentiments of sincere and lasting amity.

The Turkish Government has expressed its thanks for the kind reception
given to the Sultan's agent, Amin Bey, on the occasion of his recent
visit to the United States. On the 28th of February last a dispatch was
addressed by the Secretary of State to Mr. Marsh, the American minister
at Constantinople, instructing him to ask of the Turkish Government
permission for the Hungarians then imprisoned within the dominions of
the Sublime Porte to remove to this country. On the 3d of March last
both Houses of Congress passed a resolution requesting the President to
authorize the employment of a public vessel to convey to this country
Louis Kossuth and his associates in captivity. The instruction above
referred to was complied with, and the Turkish Government having
released Governor Kossuth and his companions from prison, on the 10th of
September last they embarked on board of the United States steam frigate
Mississippi, which was selected to carry into effect the resolution of
Congress. Governor Kossuth left the Mississippi at Gibraltar for the
purpose of making a visit to England, and may shortly be expected in New
York. By communications to the Department of State he has expressed his
grateful acknowledgments for the interposition of this Government in
behalf of himself and his associates. This country has been justly
regarded as a safe asylum for those whom political events have exiled
from their own homes in Europe. and it is recommended to Congress to
consider in what manner Governor Kossuth and his companions, brought
hither by its authority, shall be received and treated.

It is earnestly to be hoped that the differences which have for some
time past been pending between the Government of the French Republic and
that of the Sandwich Islands may be peaceably and durably adjusted so as
to secure the independence of those islands. Long before the events
which have of late imparted so much importance to the possessions of the
United States on the Pacific we acknowledged the independence of the
Hawaiian Government. This Government was first in taking that step, and
several of the leading powers of Europe immediately followed. We were
influenced in this measure by the existing and prospective importance of
the islands as a place of refuge and refreshment for our vessels engaged
in the whale fishery, and by the consideration that they lie in the
course of the great trade which must at no distant day be carried on
between the western coast of North America and eastern Asia.

We were also influenced by a desire that those islands should not pass
under the control of any other great maritime state, but should remain
in an independent condition, and so be accessible and useful to the
commerce of all nations. I need not say that the importance of these
considerations has been greatly enhanced by the sudden and vast
development which the interests of the United States have attained in
California and Oregon, and the policy heretofore adopted in regard to
those islands will be steadily pursued.

It is gratifying, not only to those who consider the commercial
interests of nations, but also to all who favor the progress of
knowledge and the diffusion of religion, to see a community emerge from
a savage state and attain such a degree of civilization in those distant
seas. It is much to be deplored that the internal tranquillity of the
Mexican Republic should again be seriously disturbed, for since the
peace between that Republic and the United States it had enjoyed such
comparative repose that the most favorable anticipations for the future
might with a degree of confidence have been indulged. These, however,
have been thwarted by the recent outbreak in the State of Tamaulipas, on
the right bank of the Rio Bravo. Having received information that
persons from the United States had taken part in the insurrection, and
apprehending that their example might be followed by others, I caused
orders to be issued for the purpose of preventing any hostile
expeditions against Mexico from being set on foot in violation of the
laws of the United States. I likewise issued a proclamation upon the
subject, a copy of which is herewith laid before you. This appeared to
be rendered imperative by the obligations of treaties and the general
duties of good neighborhood.

In my last annual message I informed Congress that citizens of the
United States had undertaken the connection of the two oceans by means
of a railroad across the Isthmus of Tehuantepec, under a grant of the
Mexican Government to a citizen of that Republic, and that this
enterprise would probably be prosecuted with energy whenever Mexico
should consent to such stipulations with the Government of the United
States as should impart a feeling of security to those who should invest
their property in the enterprise. A convention between the two
Governments for the accomplishment of that end has been ratified by this
Government, and only awaits the decision of the Congress and the
Executive of that Republic.

Some unexpected difficulties and delays have arisen in the ratification
of that convention by Mexico, but it is to be presumed that her decision
will be governed by just and enlightened views, as well of the general
importance of the object as of her own interests and obligations.

In negotiating upon this important subject this Government has had in
view one, and only one, object. That object has been, and is, the
construction or attainment of a passage from ocean to ocean, the
shortest and the best for travelers and merchandise, and equally open to
all the world. It has sought to obtain no territorial acquisition, nor
any advantages peculiar to itself; and it would see with the greatest
regret that Mexico should oppose any obstacle to the accomplishment of
an enterprise which promises so much convenience to the whole commercial
world and such eminent advantages to Mexico herself. Impressed with
these sentiments and these convictions, the Government will continue to
exert all proper efforts to bring about the necessary arrangement with
the Republic of Mexico for the speedy completion of the work. For some
months past the Republic of Nicaragua has been the theater of one of
those civil convulsions from which the cause of free institutions and
the general prosperity and social progress of the States of Central
America have so often and so severely suffered. Until quiet shall have
been restored and a government apparently stable shall have been
organized, no advance can prudently be made in disposing of the
questions pending between the two countries.

I am happy to announce that an interoceanic communication from the mouth
of the St. John to the Pacific has been so far accomplished as that
passengers have actually traversed it and merchandise has been
transported over it, and when the canal shall have been completed
according to the original plan the means of communication will be
further improved. It is understood that a considerable part of the
railroad across the Isthmus of Panama has been completed, and that the
mail and passengers will in future be conveyed thereon. Whichever of the
several routes between the two oceans may ultimately prove most eligible
for travelers to and from the different States on the Atlantic and Gulf
of Mexico and our coast on the Pacific, there is little reason to doubt
that all of them will be useful to the public, and will liberally reward
that individual enterprise by which alone they have been or are expected
to be carried into effect. Peace has been concluded between the
contending parties in the island of St. Domingo, and, it is hoped, upon
a durable basis. Such is the extent of our commercial relations with
that island that the United States can not fail to feel a strong
interest in its tranquillity. The office of commissioner to China
remains unfilled. Several persons have been appointed, and the place has
been offered to others, all of whom have declined its acceptance on the
ground of the inadequacy of the compensation. The annual allowance by
law is $6,000, and there is no provision for any outfit. I earnestly
recommend the consideration of this subject to Congress. Our commerce
with China is highly important, and is becoming more and more so in
consequence of the increasing intercourse between our ports on the
Pacific Coast and eastern Asia. China is understood to be a country in
which living is very expensive, and I know of no reason why the American
commissioner sent thither should not be placed, in regard to
compensation, on an equal footing with ministers who represent this
country at the Courts of Europe.

By reference to the report of the Secretary of the Treasury it will be
seen that the aggregate receipts for the last fiscal year amounted to
$52,312,979.87, which, with the balance in the Treasury on the 1st July,
1850, gave as the available means for the year the sum of
$58,917,524.36.

The total expenditures for the same period were $48,005,878.68. The
total imports for the year ending June 30, 1851, were $215,725,995, of
which there were in specie $4,967,901. The exports for the same period
were $217,517,130, of which there were of domestic products
$178,546,555; foreign goods reexported, $9,738,695; specie, $29,231,880.

Since the 1st of December last the payments in cash on account of the
public debt, exclusive of interest, have amounted to $7,501,456.56,
which, however, includes the sum of $3,242,400, paid under the twelfth
article of the treaty with Mexico, and the further sum of $2,591,213.45,
being the amount of awards to American citizens under the late treaty
with Mexico, for which the issue of stock was authorized, but which was
paid in cash from the Treasury.

The public debt on the 20th ultimo, exclusive of the stock authorized to
be issued to Texas by the act of 9th September, 1850, was
$62,560,395.26.

The receipts for the next fiscal year are estimated at $51,800,000,
which, with the probable unappropriated balance in the Treasury on the
30th June next, will give as the probable available means for that year
the sum of $63,258,743.09.

It has been deemed proper, in view of the large expenditures consequent
upon the acquisition of territory from Mexico, that the estimates for
the next fiscal year should be laid before Congress in such manner as to
distinguish the expenditures so required from the otherwise ordinary
demands upon the Treasury.

The total expenditures for the next fiscal year are estimated at
$42,892,299.19, of which there is required for the ordinary purposes of
the Government, other than those consequent upon the acquisition of our
new territories, and deducting the payments on account of the public
debt, the sum of $33,343,198.08, and for the purposes connected,
directly or indirectly, with those territories and in the fulfillment of
the obligations of the Government contracted in consequence of their
acquisition the sum of $9,549,101.11.

If the views of the Secretary of the Treasury in reference to the
expenditures required for these territories shall be met by
corresponding action on the part of Congress, and appropriations made in
accordance therewith, there will be an estimated unappropriated balance
in the Treasury on the 30th June, 1853, of $20,366,443.90 wherewith to
meet that portion of the public debt due on the 1st of July following,
amounting to $6,237,931.35, as well as any appropriations which may be
made beyond the estimates.

In thus referring to the estimated expenditures on account of our newly
acquired territories, I may express the hope that Congress will concur
with me in the desire that a liberal course of policy may be pursued
toward them, and that every obligation, express or implied, entered into
in consequence of their acquisition shall be fulfilled by the most
liberal appropriations for that purpose.

The values of our domestic exports for the last fiscal year, as compared
with those of the previous year, exhibit an increase of $43,646,322. At
first view this condition of our trade with foreign nations would seem
to present the most flattering hopes of its future prosperity. An
examination of the details of our exports, however, will show that the
increased value of our exports for the last fiscal year is to be found
in the high price of cotton which prevailed during the first half of
that year, which price has since declined about one-half.

The value of our exports of breadstuffs and provisions, which it was
supposed the incentive of a low tariff and large importations from
abroad would have greatly augmented, has fallen from $68,701,921 in 1847
to $26,051,373 in 1850 and to $21,948,653 in 1851, with a strong
probability, amounting almost to a certainty, of a still further
reduction in the current year.

The aggregate values of rice exported during the last fiscal year, as
compared with the previous year, also exhibit a decrease, amounting to
$460,917, which, with a decline in the values of the exports of tobacco
for the same period, make an aggregate decrease in these two articles of
$1,156,751.

The policy which dictated a low rate of duties on foreign merchandise,
it was thought by those who promoted and established it, would tend to
benefit the farming population of this country by increasing the demand
and raising the price of agricultural products in foreign markets.

The foregoing facts, however, seem to show incontestably that no such
result has followed the adoption of this policy. On the contrary,
notwithstanding the repeal of the restrictive corn laws in England, the
foreign demand for the products of the American farmer has steadily
declined, since the short crops and consequent famine in a portion of
Europe have been happily replaced by full crops and comparative
abundance of food.

It will be seen by recurring to the commercial statistics for the past
year that the value of our domestic exports has been increased in the
single item of raw cotton by $40,000,000 over the value of that export
for the year preceding. This is not due to any increased general demand
for that article, but to the short crop of the preceding year, which
created an increased demand and an augmented price for the crop of last
year. Should the cotton crop now going forward to market be only equal
in quantity to that of the year preceding and be sold at the present
prices, then there would be a falling off in the value of our exports
for the present fiscal year of at least $40,000,000 compared with the
amount exported for the year ending 30th June, 1851.

The production of gold in California for the past year seems to promise
a large supply of that metal from that quarter for some time to come.
This large annual increase of the currency of the world must be attended
with its usual results. These have been already partially disclosed in
the enhancement of prices and a rising spirit of speculation and
adventure, tending to overtrading, as well at home as abroad. Unless
some salutary check shall be given to these tendencies it is to be
feared that importations of foreign goods beyond a healthy demand in
this country will lead to a sudden drain of the precious metals from us,
bringing with it, as it has done in former times, the most disastrous
consequences to the business and capital of the American people.

The exports of specie to liquidate our foreign debt during the past
fiscal year have been $24,963,979 over the amount of specie imported.
The exports of specie during the first quarter of the present fiscal
year have been $14,651,827. Should specie continue to be exported at
this rate for the remaining three quarters of this year, it will drain
from our metallic currency during the year ending 30th June, 1852, the
enormous amount of $58,607,308.

In the present prosperous condition of the national finances it will
become the duty of Congress to consider the best mode of paying off the
public debt. If the present and anticipated surplus in the Treasury
should not be absorbed by appropriations of an extraordinary character,
this surplus should be employed in such way and under such restrictions
as Congress may enact in extinguishing the outstanding debt of the
nation.

By reference to the act of Congress approved 9th September, 1850, it
will be seen that, in consideration of certain concessions by the State
of Texas, it is provided that--

The United States shall pay to the State of Texas the sum of $10,000,000
in a stock bearing 5 per cent interest and redeemable at the end of
fourteen years, the interest payable half-yearly at the Treasury of the
United States.

In the same section of the law it is further provided--

That no more than five millions of said stock shall be issued until the
creditors of the State holding bonds and other certificates of stock of
Texas, for which duties on imports were specially pledged, shall first
file at the Treasury of the United States releases of all claims against
the United States for or on account of said bonds or certificates, in
such form as shall be prescribed by the Secretary of the Treasury and
approved by the President of the United States.

The form of release thus provided for has been prescribed by the
Secretary of the Treasury and approved. It has been published in all the
leading newspapers in the commercial cities of the United States, and
all persons holding claims of the kind specified in the foregoing
proviso were required to file their releases (in the form thus
prescribed) in the Treasury of the United States on or before the 1st
day of October, 1851. Although this publication has been continued from
the 25th day of March, 1851, yet up to the 1st of October last
comparatively few releases had been filed by the creditors of Texas.

The authorities of the State of Texas, at the request of the Secretary
of the Treasury, have furnished a schedule of the public debt of that
State created prior to her admission into the Union, with a copy of the
laws under which each class was contracted. I have, from the documents
furnished by the State of Texas, determined the classes of claims which
in my judgment fall within the provisions of the act of Congress of the
9th of September, 1850.

On being officially informed of the acceptance by Texas of the
propositions contained in the act referred to I caused the stock to be
prepared, and the five millions which are to be issued unconditionally,
bearing an interest of 5 per cent from the 1st day of January, 1851,
have been for some time ready to be delivered to the State of Texas. The
authorities of Texas up to the present time have not authorized anyone
to receive this stock, and it remains in the Treasury Department subject
to the order of Texas. The releases required by law to be deposited in
the Treasury not having been filed there, the remaining five millions
have not been issued. This last amount of the stock will be withheld
from Texas until the conditions upon which it is to be delivered shall
be complied with by the creditors of that State, unless Congress shall
otherwise direct by a modification of the law.

In my last annual message, to which I respectfully refer, I stated
briefly the reasons which induced me to recommend a modification of the
present tariff by converting the ad valorem into a specific duty
wherever the article imported was of such a character as to permit it,
and that such a discrimination should be made in favor of the industrial
pursuits of our own country as to encourage home production without
excluding foreign competition.

The numerous frauds which continue to be practiced upon the revenue by
false invoices and undervaluations constitute an unanswerable reason for
adopting specific instead of ad valorem duties in all cases where the
nature of the commodity does not forbid it. A striking illustration of
these frauds will be exhibited in the report of the Secretary of the
Treasury, showing the custom-house valuation of articles imported under
a former law, subject to specific duties, when there was no inducement
to undervaluation, and the custom-house valuations of the same articles
under the present system of ad valorem duties, so greatly reduced as to
leave no doubt of the existence of the most flagrant abuses under the
existing laws. This practical evasion of the present law, combined with
the languishing condition of some of the great interests of the country,
caused by over importations and consequent depressed prices, and with
the failure in obtaining a foreign market for our increasing surplus of
breadstuffs and provisions, has induced me again to recommend a
modification of the existing tariff. The report of the Secretary of the
Interior, which accompanies this communication, will present a condensed
statement of the operations of that important Department of the
Government.

It will be seen that the cash sales of the public lands exceed those of
the preceding year, and that there is reason to anticipate a still
further increase, notwithstanding the large donations which have been
made to many of the States and the liberal grants to individuals as a
reward for military services. This fact furnishes very gratifying
evidence of the growing wealth and prosperity of our country.

Suitable measures have been adopted for commencing the survey of the
public lands in California and Oregon. Surveying parties have been
organized and some progress has been made in establishing the principal
base and meridian lines. But further legislation and additional
appropriations will be necessary before the proper subdivisions can be
made and the general land system extended over those remote parts of our
territory.

On the 3d of March last an act was passed providing for the appointment
of three commissioners to settle private land claims in California.
Three persons were immediately appointed, all of whom, however, declined
accepting the office in consequence of the inadequacy of the
compensation. Others were promptly selected, who for the same reason
also declined, and it was not until late in the season that the services
of suitable persons could be secured. A majority of the commissioners
convened in this city on the 10th of September last, when detailed
instructions were given to them in regard to their duties. Their first
meeting for the transaction of business will be held in San Francisco on
the 8th day of the present month.

I have thought it proper to refer to these facts, not only to explain
the causes of the delay in filling the commission, but to call your
attention to the propriety of increasing the compensation of the
commissioners. The office is one of great labor and responsibility, and
the compensation should be such as to command men of a high order of
talents and the most unquestionable integrity.

The proper disposal of the mineral lands of California is a subject
surrounded by great difficulties. In my last annual message I
recommended the survey and sale of them in small parcels under such
restrictions as would effectually guard against monopoly and
speculation; but upon further information, and in deference to the
opinions of persons familiar with the subject, I am inclined to change
that recommendation and to advise that they be permitted to remain as at
present, a common field, open to the enterprise and industry of all our
citizens, until further experience shall have developed the best policy
to be ultimately adopted in regard to them. It is safer to suffer the
inconveniences that now exist for a short period than by premature
legislation to fasten on the country a system founded in error, which
may place the whole subject beyond the future control of Congress.

The agricultural lands should, however, be surveyed and brought into
market with as little delay as possible, that the titles may become
settled and the inhabitants stimulated to make permanent improvements
and enter on the ordinary pursuits of life. To effect these objects it
is desirable that the necessary provision be made by law for the
establishment of land offices in California and Oregon and for the
efficient prosecution of the surveys at an early day.

Some difficulties have occurred in organizing the Territorial
governments of New Mexico and Utah, and when more accurate information
shall be obtained of the causes a further communication will be made on
that subject.

In my last annual communication to Congress I recommended the
establishment of an agricultural bureau, and I take this occasion again
to invoke your favorable consideration of the subject.

Agriculture may justly be regarded as the great interest of our people.
Four-fifths of our active population are employed in the cultivation of
the soil, and the rapid expansion of our settlements over new territory
is daily adding to the number of those engaged in that vocation. Justice
and sound policy, therefore, alike require that the Government should
use all the means authorized by the Constitution to promote the
interests and welfare of that important class of our fellow-citizens.
And yet it is a singular fact that whilst the manufacturing and
commercial interests have engaged the attention of Congress during a
large portion of every session and our statutes abound in provisions for
their protection and encouragement, little has yet been done directly
for the advancement of agriculture. It is time that this reproach to our
legislation should be removed, and I sincerely hope that the present
Congress will not close their labors without adopting efficient means to
supply the omissions of those who have preceded them.

An agricultural bureau, charged with the duty of collecting and
disseminating correct information as to the best modes of cultivation
and of the most effectual means of preserving and restoring the
fertility of the soil and of procuring and distributing seeds and plants
and other vegetable productions, with instructions in regard to the
soil, climate, and treatment best adapted to their growth, could not
fail to be, in the language of Washington in his last annual message to
Congress, a "very cheap instrument of immense national benefit."

Regarding the act of Congress approved 28th September, 1850, granting
bounty lands to persons who had been engaged in the military service of
the country, as a great measure of national justice and munificence, an
anxious desire has been felt by the officers intrusted with its
immediate execution to give prompt effect to its provisions. All the
means within their control were therefore brought into requisition to
expedite the adjudication of claims, and I am gratified to be able to
state that near 100,000 applications have been considered and about
70,000 warrants issued within the short space of nine months. If
adequate provision be made by law to carry into effect the
recommendations of the Department, it is confidently expected that
before the close of the next fiscal year all who are entitled to the
benefits of the act will have received their warrants.

The Secretary of the Interior has suggested in his report various
amendments of the laws relating to pensions and bounty lands for the
purpose of more effectually guarding against abuses and frauds on the
Government, to all of which I invite your particular attention. The
large accessions to our Indian population consequent upon the
acquisition of New Mexico and California and the extension of our
settlements into Utah and Oregon have given increased interest and
importance to our relations with the aboriginal race. No material change
has taken place within the last year in the condition and prospects of
the Indian tribes who reside in the Northwestern Territory and west of
the Mississippi River. We are at peace with all of them, and it will be
a source of pleasure to you to learn that they are gradually advancing
in civilization and the pursuits of social life.

Along the Mexican frontier and in California and Oregon there have been
occasional manifestations of unfriendly feeling and some depredations
committed. I am satisfied, however, that they resulted more from the
destitute and starving condition of the Indians than from any settled
hostility toward the whites. As the settlements of our citizens progress
toward them, the game, upon which they mainly rely for subsistence, is
driven off or destroyed, and the only alternative left to them is
starvation or plunder. It becomes us to consider, in view of this
condition of things, whether justice and humanity, as well as an
enlightened economy, do not require that instead of seeking to punish
them for offenses which are the result of our own policy toward them we
should not provide for their immediate wants and encourage them to
engage in agriculture and to rely on their labor instead of the chase
for the means of support.

Various important treaties have been negotiated with different tribes
during the year, by which their title to large and valuable tracts of
country has been extinguished, all of which will at the proper time be
submitted to the Senate for ratification.

The joint commission under the treaty of Guadalupe Hidalgo has been
actively engaged in running and marking the boundary line between the
United States and Mexico. It was stated in the last annual report of the
Secretary of the Interior that the initial point on the Pacific and the
point of junction of the Gila with the Colorado River had been
determined and the intervening line, about 150 miles in length, run and
marked by temporary monuments. Since that time a monument of marble has
been erected at the initial point, and permanent landmarks of iron have
been placed at suitable distances along the line.

The initial point on the Rio Grande has also been fixed by the
commissioners, at latitude 32 degrees 22', and at the date of the last
communication the survey of the line had been made thence westward about
150 miles to the neighborhood of the copper mines. The commission on our
part was at first organized on a scale which experience proved to be
unwieldy and attended with unnecessary expense. Orders have therefore
been issued for the reduction of the number of persons employed within
the smallest limits consistent with the safety of those engaged in the
service and the prompt and efficient execution of their important
duties.

Returns have been received from all the officers engaged in taking the
census in the States and Territories except California. The
superintendent employed to make the enumeration in that State has not
yet made his full report, from causes, as he alleges, beyond his
control. This failure is much to be regretted, as it has prevented the
Secretary of the Interior from making the decennial apportionment of
Representatives among the States, as required by the act approved May
23, 1850. It is hoped, however, that the returns will soon be received,
and no time will then be lost in making the necessary apportionment and
in transmitting the certificates required by law.

The Superintendent of the Seventh Census is diligently employed, under
the direction of the Secretary of the Interior, in classifying and
arranging in tabular form all the statistical information derived from
the returns of the marshals, and it is believed that when the work shall
be completed it will exhibit a more perfect view of the population,
wealth, occupations, and social condition of a great country than has
ever been presented to the world. The value of such a work as the basis
of enlightened legislation can hardly be overestimated, and I earnestly
hope that Congress will lose no time in making the appropriations
necessary to complete the classifications and to publish the results in
a style worthy of the subject and of our national character.

The want of a uniform fee bill, prescribing the compensation to be
allowed district attorneys, clerks, marshals, and commissioners in civil
and criminal cases, is the cause of much vexation, injustice, and
complaint. I would recommend a thorough revision of the laws on the
whole subject and the adoption of a tariff of fees which, as far as
practicable, should be uniform, and prescribe a specific compensation
for every service which the officer may be required to perform. This
subject will be fully presented in the report of the Secretary of the
Interior. In my last annual message I gave briefly my reasons for
believing that you possessed the constitutional power to improve the
harbors of our Great Lakes and seacoast and the navigation of our
principal rivers, and recommended that appropriations should be made for
completing such works as had already been commenced and for commencing
such others as might seem to the wisdom of Congress to be of public and
general importance. Without repeating the reasons then urged, I deem it
my duty again to call your attention to this important subject. The
works on many of the harbors were left in an unfinished state, and
consequently exposed to the action of the elements, which is fast
destroying them. Great numbers of lives and vast amounts of property are
annually lost for want of safe and convenient harbors on the Lakes. None
but those who have been exposed to that dangerous navigation can fully
appreciate the importance of this subject. The whole Northwest appeals
to you for relief, and I trust their appeal will receive due
consideration at your hands.

The same is in a measure true in regard to some of the harbors and
inlets on the seacoast.

The unobstructed navigation of our large rivers is of equal importance.
Our settlements are now extending to the sources of the great rivers
which empty into and form a part of the Mississippi, and the value of
the public lands in those regions would be greatly enhanced by freeing
the navigation of those waters from obstructions. In view, therefore, of
this great interest, I deem it my duty again to urge upon Congress to
make such appropriations for these improvements as they may deem
necessary.

The surveys of the Delta of the Mississippi, with a view to the
prevention of the overflows that have proved so disastrous to that
region of country, have been nearly completed, and the reports thereof
are now in course of preparation and will shortly be laid before you.

The protection of our southwestern frontier and of the adjacent Mexican
States against the Indian tribes within our border has claimed my
earnest and constant attention. Congress having failed at the last
session to adopt my recommendation that an additional regiment of
mounted men specially adapted to that service should be raised, all that
remained to be done was to make the best use of the means at my
disposal. Accordingly, all the troops adapted to that service that could
properly be spared from other quarters have been concentrated on that
frontier and officers of high reputation selected to command them. A new
arrangement of the military posts has also been made, whereby the troops
are brought nearer to the Mexican frontier and to the tribes they are
intended to overawe.

Sufficient time has not yet elapsed to realize all the benefits that are
expected to result from these arrangements, but I have every reason to
hope that they will effectually check their marauding expeditions. The
nature of the country, which furnishes little for the support of an army
and abounds in places of refuge and concealment, is remarkably well
adapted to this predatory warfare, and we can scarcely hope that any
military force, combined with the greatest vigilance, can entirely
suppress it.

By the treaty of Guadalupe Hidalgo we are bound to protect the territory
of Mexico against the incursions of the savage tribes within our border
"with equal diligence and energy" as if the same were made within our
territory or against our citizens. I have endeavored to comply as far as
possible with this provision of the treaty. Orders have been given to
the officers commanding on that frontier to consider the Mexican
territory and its inhabitants as equally with our own entitled to their
protection, and to make all their plans and arrangements with a view to
the attainment of this object. Instructions have also been given to the
Indian commissioners and agents among these tribes in all treaties to
make the clauses designed for the protection of our own citizens apply
also to those of Mexico. I have no reason to doubt that these
instructions have been fully carried into effect; nevertheless, it is
probable that in spite of all our efforts some of the neighboring States
of Mexico may have suffered, as our own have, from depredations by the
Indians.

To the difficulties of defending our own territory, as above mentioned,
are superadded, in defending that of Mexico, those that arise from its
remoteness, from the fact that we have no right to station our troops
within her limits and that there is no efficient military force on the
Mexican side to cooperate with our own.

So long as this shall continue to be the case the number and activity of
our troops will rather increase than diminish the evil, as the Indians
will naturally turn toward that country where they encounter the least
resistance. Yet these troops are necessary to subdue them and to compel
them to make and observe treaties. Until this shall have been done
neither country will enjoy any security from their attacks.

The Indians in California, who had previously appeared of a peaceable
character and disposed to cultivate the friendship of the whites, have
recently committed several acts of hostility. As a large portion of the
reenforcements sent to the Mexican frontier were drawn from the Pacific,
the military force now stationed there is considered entirely inadequate
to its defense. It can not be increased, however, without an increase of
the Army, and I again recommend that measure as indispensable to the
protection of the frontier.

I invite your attention to the suggestions on this subject and on others
connected with his Department in the report of the Secretary of War. The
appropriations for the support of the Army during the current fiscal
year ending 30th June next were reduced far below the estimate submitted
by the Department. The consequence of this reduction is a considerable
deficiency, to which I invite your early attention. The expenditures of
that Department for the year ending 30th June last were $9,060,268.58,
The estimates for the year commencing 1st July next and ending June 30,
1853, are $7,898,775.83, showing a reductions of $1,161,492.75, The
board of commissioners to whom the management of the affairs of the
military asylum created by the act of 3d March last was intrusted have
selected a site for the establishment of an asylum in the vicinity of
this city, which has been approved by me subject to the production of a
satisfactory title.

The report of the Secretary of the Navy will exhibit the condition of
the public service under the supervision of that Department. Our naval
force afloat during the present year has been actively and usefully
employed in giving protection to our widely extended and increasing
commerce and interests in the various quarters of the globe, and our
flag has everywhere afforded the security and received the respect
inspired by the justice and liberality of our intercourse and the
dignity and power of the nation.

The expedition commanded by Lieutenant De Haven, dispatched in search of
the British commander Sir John Franklin and his companions in the Arctic
Seas, returned to New York in the month of October, after having
undergone great peril and suffering from an unknown and dangerous
navigation and the rigors of a northern climate, without any
satisfactory information of the objects of their search, but with new
contributions to science and navigation from the unfrequented polar
regions. The officers and men of the expedition having been all
volunteers for this service and having so conducted it as to meet the
entire approbation of the Government, it is suggested, as an act of
grace and generosity, that the same allowance of extra pay and
emoluments be extended to them that were made to the officers and men of
like rating in the late exploring expedition to the South Seas.

I earnestly recommend to your attention the necessity of reorganizing
the naval establishment, apportioning and fixing the number of officers
in each grade, providing some mode of promotion to the higher grades of
the Navy having reference to merit and capacity rather than seniority or
date of entry into the service, and for retiring from the effective list
upon reduced pay those who may be incompetent to the performance of
active duty. As a measure of economy, as well as of efficiency, in this
arm of the service, the provision last mentioned is eminently worthy of
your consideration.

The determination of the questions of relative rank between the sea
officers and civil officers of the Navy, and between officers of the
Army and Navy, in the various grades of each, will also merit your
attention. The failure to provide any substitute when corporal
punishment was abolished for offenses in the Navy has occasioned the
convening of numerous courts-martial upon the arrival of vessels in
port, and is believed to have had an injurious effect upon the
discipline and efficiency of the service. To moderate punishment from
one grade to another is among the humane reforms of the age, but to
abolish one of severity, which applied so generally to offenses on
shipboard, and provide nothing in its stead is to suppose a progress of
improvement in every individual among seamen which is not assumed by the
Legislature in respect to any other class of men. It is hoped that
Congress, in the ample opportunity afforded by the present session, will
thoroughly investigate this important subject, and establish such modes
of determining guilt and such gradations of punishment as are consistent
with humanity and the personal rights of individuals, and at the same
time shall insure the most energetic and efficient performance of duty
and the suppression of crime in our ships of war.

The stone dock in the navy-yard at New York, which was ten years in
process of construction, has been so far finished as to be surrendered
up to the authorities of the yard. The dry dock at Philadelphia is
reported as completed, and is expected soon to be tested and delivered
over to the agents of the Government. That at Portsmouth, N. H., is also
nearly ready for delivery; and a contract has been concluded, agreeably
to the act of Congress at its last session, for a floating sectional
dock on the Bay of San Francisco. I invite your attention to the
recommendation of the Department touching the establishment of a
navy-yard in conjunction with this dock on the Pacific. Such a station
is highly necessary to the convenience and effectiveness of our fleet in
that ocean, which must be expected to increase with the growth of
commerce and the rapid extension of our whale fisheries over its waters.

The Naval Academy at Annapolis, under a revised and improved system of
regulations, now affords opportunities of education and instruction to
the pupils quite equal, it is believed, for professional improvement, to
those enjoyed by the cadets in the Military Academy. A large class of
acting midshipmen was received at the commencement of the last academic
term, and a practice ship has been attached to the institution to afford
the amplest means for regular instruction in seamanship, as well as for
cruises during the vacations of three or four months in each year.

The advantages of science in nautical affairs have rarely been more
strikingly illustrated than in the fact, stated in the report of the
Navy Department, that by means of the wind and current charts projected
and prepared by Lieutenant Maury, the Superintendent of the Naval
Observatory, the passage from the Atlantic to the Pacific ports of our
country has been shortened by about forty days.

The estimates for the support of the Navy and Marine Corps the ensuing
fiscal year will be found to be $5,856,472.19, the estimates for the
current year being $5,900,621.

The estimates for special objects under the control of this Department
amount to $2,684,220.89, against $2,210,980 for the present year, the
increase being occasioned by the additional mail service on the Pacific
Coast and the construction of the dock in California, authorized at the
last session of Congress, and some slight additions under the head of
improvements and repairs in navy-yards, buildings, and machinery. I deem
it of much importance to a just economy and a correct understanding of
naval expenditures that there should be an entire separation of the
appropriations for the support of the naval service proper from those
for permanent improvements at navy-yards and stations and from ocean
steam mail service and other special objects assigned to the supervision
of this Department.

The report of the Postmaster-General, herewith communicated, presents an
interesting view of the progress, operations, and condition of his
Department.

At the close of the last fiscal year the length of mail routes within
the United States was 196,290 miles, the annual transportation thereon
53,272,252 miles, and the annual cost of such transportation $3,421,754.

The length of the foreign mail routes is estimated at 18,349 miles and
the annual transportation thereon at 615,206 miles. The annual cost of
this service is $1,472,187, of which $448,937 are paid by the
Post-Office Department and $1,023,250 are paid through the Navy
Department.

The annual transportation within the United States, excluding the
service in California and Oregon, which is now for the first time
reported and embraced in the tabular statements of the Department,
exceeds that of the preceding year 6,162,855 miles, at an increased cost
of $547,110.

The whole number of post-offices in the United States on the 30th day of
June last was 19,796. There were 1,698 post-offices established and 256
discontinued during the year.

The gross revenues of the Department for the fiscal year, including the
appropriations for the franked matter of Congress, of the Departments,
and officers of Government, and excluding the foreign postages collected
for and payable to the British post-office, amounted to $6,727,866.78.

The expenditures for the same period, excluding $20,599.49, paid under
an award of the Auditor, in pursuance of a resolution of the last
Congress, for mail service on the Ohio and Mississippi rivers in 1832
and 1833, and the amount paid to the British post-office for foreign
postages collected for and payable to that office, amounted to
$6,024,566.79, leaving a balance of revenue over the proper expenditures
of the year of $703,299.99.

The receipts for postages during the year, excluding the foreign
postages collected for and payable to the British post-office, amounted
to $6,345,747.21, being an increase of $997,610.79, or 18.65 per cent,
over the like receipts for the preceding year.

The reduction of postage under the act of March last did not take effect
until the commencement of the present fiscal year. The accounts for the
first quarter under the operation of the reduced rates will not be
settled before January next, and no reliable estimate of the receipts
for the present year can yet be made. It is believed, however, that they
will fall far short of those of the last year. The surplus of the
revenues now on hand is, however, so large that no further appropriation
from the Treasury in aid of the revenues of the Department is required
for the current fiscal year, but an additional appropriation for the
year ending June 30, 1853, will probably be found necessary when the
receipts of the first two quarters of the fiscal year are fully
ascertained.

In his last annual report the Postmaster-General recommended a reduction
of postage to rates which he deemed as low as could be prudently adopted
unless Congress was prepared to appropriate from the Treasury for the
support of the Department a sum more than equivalent to the mail
services performed by it for the Government. The recommendations of the
Postmaster-General in respect to letter postage, except on letters from
and to California and Oregon, were substantially adopted by the last
Congress. He now recommends adherence to the present letter rates and
advises against a further reduction until justified by the revenue of
the Department.

He also recommends that the rates of postage on printed matter be so
revised as to render them more simple and more uniform in their
operation upon all classes of printed matter. I submit the
recommendations of the report to your favorable consideration.

The public statutes of the United States have now been accumulating for
more than sixty years, and, interspersed with private acts, are
scattered through numerous volumes, and, from the cost of the whole,
have become almost inaccessible to the great mass of the community. They
also exhibit much of the incongruity and imperfection of hasty
legislation. As it seems to be generally conceded that there is no
"common law" of the United States to supply the defects of their
legislation, it is most important that that legislation should be as
perfect as possible, defining every power intended to be conferred,
every crime intended to be made punishable, and prescribing the
punishment to be inflicted. In addition to some particular cases spoken
of more at length, the whole criminal code is now lamentably defective.
Some offenses are imperfectly described and others are entirely omitted,
so that flagrant crimes may be committed with impunity. The scale of
punishment is not in all cases graduated according to the degree and
nature of the offense, and is often rendered more unequal by the
different modes of imprisonment or penitentiary confinement in the
different States.

Many laws of a permanent character have been introduced into
appropriation bills, and it is often difficult to determine whether the
particular clause expires with the temporary act of which it is a part
or continues in force. It has also frequently happened that enactments
and provisions of law have been introduced into bills with the title or
general subject of which they have little or no connection or relation.
In this mode of legislation so many enactments have been heaped upon
each other, and often with but little consideration, that in many
instances it is difficult to search out and determine what is the law.

The Government of the United States is emphatically a government of
written laws. The statutes should therefore, as far as practicable, not
only be made accessible to all, but be expressed in language so plain
and simple as to be understood by all and arranged in such method as to
give perspicuity to every subject. Many of the States have revised their
public acts with great and manifest benefit, and I recommend that
provision be made by law for the appointment of a commission to revise
the public statutes of the United States, arranging them in order,
supplying deficiencies, correcting incongruities, simplifying their
language, and reporting them to Congress for its action.

An act of Congress approved 30th September, 1850, contained a provision
for the extension of the Capitol according to such plan as might be
approved by the President, and appropriated $100,000 to be expended
under his direction by such architect as he should appoint to execute
the same. On examining the various plans which had been submitted by
different architects in pursuance of an advertisement by a committee of
the Senate no one was found to be entirely satisfactory, and it was
therefore deemed advisable to combine and adopt the advantages of
several.

The great object to be accomplished was to make such an addition as
would afford ample and convenient halls for the deliberations of the two
Houses of Congress, with sufficient accommodations for spectators and
suitable apartments for the committees and officers of the two branches
of the Legislature. It was also desirable not to mar the harmony and
beauty of the present structure, which, as a specimen of architecture,
is so universally admired. Keeping these objects in view, I concluded to
make the addition by wings, detached from the present building, yet
connected with it by corridors. This mode of enlargement will leave the
present Capitol uninjured and afford great advantages for ventilation
and the admission of light, and will enable the work to progress without
interrupting the deliberations of Congress. To carry this plan into
effect I have appointed an experienced and competent architect. The
corner stone was laid on the 4th day of July last with suitable
ceremonies, since which time the work has advanced with commendable
rapidity, and the foundations of both wings are now nearly complete.

I again commend to your favorable regard the interests of the District
of Columbia, and deem it only necessary to remind you that although its
inhabitants have no voice in the choice of Representatives in Congress,
they are not the less entitled to a just and liberal consideration in
your legislation. My opinions on this subject were more fully expressed
in my last annual communication.

Other subjects were brought to the attention of Congress in my last
annual message, to which I would respectfully refer. But there was one
of more than ordinary interest, to which I again invite your special
attention. I allude to the recommendation for the appointment of a
commission to settle private claims against the United States. Justice
to individuals, as well as to the Government, imperatively demands that
some more convenient and expeditious mode than an appeal to Congress
should be adopted.

It is deeply to be regretted that in several instances officers of the
Government, in attempting to execute the law for the return of fugitives
from labor, have been openly resisted and their efforts frustrated and
defeated by lawless and violent mobs; that in one case such resistance
resulted in the death of an estimable citizen, and in others serious
injury ensued to those officers and to individuals who were using their
endeavors to sustain the laws. Prosecutions have been instituted against
the alleged offenders so far as they could be identified, and are still
pending. I have regarded it as my duty in these cases to give all aid
legally in my power to the enforcement of the laws, and I shall continue
to do so wherever and whenever their execution may be resisted.

The act of Congress for the return of fugitives from labor is one
required and demanded by the express words of the Constitution. The
Constitution declares that--No person held to service or labor in one
State, under the laws thereof, escaping into another, shall, in
consequence of any law or regulation therein, be discharged from such
service or labor, but shall be delivered up on claim of the party to
whom such service or labor may be due. This constitutional provision is
equally obligatory upon the legislative, the executive, and judicial
departments of the Government, and upon every citizen of the United
States.

Congress, however, must from necessity first act upon the subject by
prescribing the proceedings necessary to ascertain that the person is a
fugitive and the means to be used for his restoration to the claimant.
This was done by an act passed during the first term of President
Washington, which was amended by that enacted by the last Congress, and
it now remains for the executive and judicial departments to take care
that these laws be faithfully executed. This injunction of the
Constitution is as peremptory and as binding as any other; it stands
exactly on the same foundation as that clause which provides for the
return of fugitives from justice, or that which declares that no bill of
attainder or ex post facto law shall be passed, or that which provides
for an equality of taxation according to the census, or the clause
declaring that all duties shall be uniform throughout the United States,
or the important provision that the trial of all crimes shall be by
jury. These several articles and clauses of the Constitution, all
resting on the same authority, must stand or fall together. Some
objections have been urged against the details of the act for the return
of fugitives from labor, but it is worthy of remark that the main
opposition is aimed against the Constitution itself, and proceeds from
persons and classes of persons many of whom declare their wish to see
that Constitution overturned. They avow their hostility to any law which
shall give full and practical effect to this requirement of the
Constitution. Fortunately, the number of these persons is comparatively
small, and is believed to be daily diminishing; but the issue which they
present is one which involves the supremacy and even the existence of
the Constitution.

Cases have heretofore arisen in which individuals have denied the
binding authority of acts of Congress, and even States have proposed to
nullify such acts upon the ground that the Constitution was the supreme
law of the land, and that those acts of Congress were repugnant to that
instrument; but nullification is now aimed not so much against
particular laws as being inconsistent with the Constitution as against
the Constitution itself, and it is not to be disguised that a spirit
exists, and has been actively at work, to rend asunder this Union, which
is our cherished inheritance from our Revolutionary fathers.

In my last annual message I stated that I considered the series of
measures which had been adopted at the previous session in reference to
the agitation growing out of the Territorial and slavery questions as a
final settlement in principle and substance of the dangerous and
exciting subjects which they embraced, and I recommended adherence to
the adjustment established by those measures until time and experience
should demonstrate the necessity of further legislation to guard against
evasion or abuse. I was not induced to make this recommendation because
I thought those measures perfect, for no human legislation can be
perfect. Wide differences and jarring opinions can only be reconciled by
yielding something on all sides, and this result had been reached after
an angry conflict of many months, in which one part of the country was
arrayed against another, and violent convulsion seemed to be imminent.
Looking at the interests of the whole country, I felt it to be my duty
to seize upon this compromise as the best that could be obtained amid
conflicting interests and to insist upon it as a final settlement, to be
adhered to by all who value the peace and welfare of the country. A year
has now elapsed since that recommendation was made. To that
recommendation I still adhere, and I congratulate you and the country
upon the general acquiescence in these measures of peace which has been
exhibited in all parts of the Republic. And not only is there this
general acquiescence in these measures, but the spirit of conciliation
which has been manifested in regard to them in all parts of the country
has removed doubts and uncertainties in the minds of thousands of good
men concerning the durability of our popular institutions and given
renewed assurance that our liberty and our Union may subsist together
for the benefit of this and all succeeding generations.

***

State of the Union Address
Millard Fillmore
December 6, 1852

Fellow-Citizens of the Senate and of the House of Representatives:

The brief space which has elapsed since the close of your last session
has been marked by no extraordinary political event. The quadrennial
election of Chief Magistrate has passed off with less than the usual
excitement. However individuals and parties may have been disappointed
in the result, it is, nevertheless, a subject of national congratulation
that the choice has been effected by the independent suffrages of a free
people, undisturbed by those influences which in other countries have
too often affected the purity of popular elections.

Our grateful thanks are due to an all-merciful Providence, not only for
staying the pestilence which in different forms has desolated some of
our cities, but for crowning the labors of the husbandman with an
abundant harvest and the nation generally with the blessings of peace
and prosperity.

Within a few weeks the public mind has been deeply affected by the death
of Daniel Webster, filling at his decease the office of Secretary of
State. His associates in the executive government have sincerely
sympathized with his family and the public generally on this mournful
occasion. His commanding talents, his great political and professional
eminence, his well-tried patriotism, and his long and faithful services
in the most important public trusts have caused his death to be lamented
throughout the country and have earned for him a lasting place in our
history. In the course of the last summer considerable anxiety was
caused for a short time by an official intimation from the Government of
Great Britain that orders had been given for the protection of the
fisheries upon the coasts of the British provinces in North America
against the alleged encroachments of the fishing vessels of the United
States and France. The shortness of this notice and the season of the
year seemed to make it a matter of urgent importance. It was at first
apprehended that an increased naval force had been ordered to the
fishing grounds to carry into effect the British interpretation of those
provisions in the convention of 1818 in reference to the true intent of
which the two Governments differ. It was soon discovered that such was
not the design of Great Britain, and satisfactory explanations of the
real objects of the measure have been given both here and in London.

The unadjusted difference, however, between the two Governments as to
the interpretation of the first article of the convention of 1818 is
still a matter of importance. American fishing vessels, within nine or
ten years, have been excluded from waters to which they had free access
for twenty-five years after the negotiation of the treaty. In 1845 this
exclusion was relaxed so far as concerns the Bay of Fundy, but the just
and liberal intention of the home Government, in compliance with what we
think the true construction of the convention, to open all the other
outer bays to our fishermen was abandoned in consequence of the
opposition of the colonies. Notwithstanding this, the United States
have, since the Bay of Fundy was reopened to our fishermen in 1845,
pursued the most liberal course toward the colonial fishing interests.
By the revenue law of 1846 the duties on colonial fish entering our
ports were very greatly reduced, and by the warehousing act it is
allowed to be entered in bond without payment of duty. In this way
colonial fish has acquired the monopoly of the export trade in our
market and is entering to some extent into the home consumption. These
facts were among those which increased the sensibility of our fishing
interest at the movement in question. These circumstances and the
incidents above alluded to have led me to think the moment favorable for
a reconsideration of the entire subject of the fisheries on the coasts
of the British Provinces, with a view to place them upon a more liberal
footing of reciprocal privilege. A willingness to meet us in some
arrangement of this kind is understood to exist on the part of Great
Britain, with a desire on her part to include in one comprehensive
settlement as well this subject as the commercial intercourse between
the United States and the British Provinces. I have thought that,
whatever arrangements may be made on these two subjects, it is expedient
that they should be embraced in separate conventions. The illness and
death of the late Secretary of State prevented the commencement of the
contemplated negotiation. Pains have been taken to collect the
information required for the details of such an arrangement. The subject
is attended with considerable difficulty. If it is found practicable to
come to an agreement mutually acceptable to the two parties, conventions
may be concluded in the course of the present winter. The control of
Congress over all the provisions of such an arrangement affecting the
revenue will of course be reserved.

The affairs of Cuba formed a prominent topic in my last annual message.
They remain in an uneasy condition, and a feeling of alarm and
irritation on the part of the Cuban authorities appears to exist. This
feeling has interfered with the regular commercial intercourse between
the United States and the island and led to some acts of which we have a
fight to complain. But the Captain-General of Cuba is clothed with no
power to treat with foreign governments, nor is he in any degree under
the control of the Spanish minister at Washington. Any communication
which he may hold with an agent of a foreign power is informal and
matter of courtesy. Anxious to put an end to the existing inconveniences
(which seemed to rest on a misconception), I directed the newly
appointed minister to Mexico to visit Havana on his way to Vera Cruz. He
was respectfully received by the Captain-General, who conferred with him
freely on the recent occurrences, but no permanent arrangement was
effected.

In the meantime the refusal of the Captain-Generalto allow passengers
and the mail to be landed in certain cases, for a reason which does not
furnish, in the opinion of this Government, even a good presumptive
ground for such prohibition, has been made the subject of a serious
remonstrance at Madrid, and I have no reason to doubt that due respect
will be paid by the Government of Her Catholic Majesty to the
representations which our minister has been instructed to make on the
subject.

It is but justice to the Captain-General to add that his conduct toward
the steamers employed to carry the mails of the United States to Havana
has, with the exceptions above alluded to, been marked with kindness and
liberality, and indicates no general purpose of interfering with the
commercial correspondence and intercourse between the island and this
country.

Early in the present year official notes were received from the
ministers of France and England inviting the Government of the United
States to become a party with Great Britain and France to a tripartite
convention, in virtue of which the three powers should severally and
collectively disclaim now and for the future all intention to obtain
possession of the island of Cuba, and should bind themselves to
discountenance all attempts to that effect on the part of any power or
individual whatever. This invitation has been respectfully declined, for
reasons which it would occupy too much space in this communication to
state in detail, but which led me to think that the proposed measure
would be of doubtful constitutionality, impolitic, and unavailing. I
have, however, in common with several of my predecessors, directed the
ministers of France and England to be assured that the United States
entertain no designs against Cuba, but that, on the contrary, I should
regard its incorporation into the Union at the present time as fraught
with serious peril.

Were this island comparatively destitute of inhabitants or occupied by a
kindred race, I should regard it, if voluntarily ceded by Spain, as a
most desirable acquisition. But under existing circumstances I should
look upon its incorporation into our Union as a very hazardous measure.
It would bring into the Confederacy a population of a different national
stock, speaking a different language, and not likely to harmonize with
the other members. It would probably affect in a prejudicial manner the
industrial interests of the South, and it might revive those conflicts
of opinion between the different sections of the country which lately
shook the Union to its center, and which have been so happily
compromised.

The rejection by the Mexican Congress of the convention which had been
concluded between that Republic and the United States for the protection
of a transit way across the Isthmus of Tehuantepec and of the interests
of those citizens of the United States who had become proprietors of the
rights which Mexico had conferred on one of her own citizens in regard
to that transit has thrown a serious obstacle in the way of the
attainment of a very desirable national object. I am still willing to
hope that the differences on the subject which exist, or may hereafter
arise, between the Governments will be amicably adjusted. This subject,
however, has already engaged the attention of the Senate of the United
States, and requires no further comment in this communication.

The settlement of the question respecting the port of San Juan de
Nicaragua and of the controversy between the Republics of Costa Rica and
Nicaragua in regard to their boundaries was considered indispensable to
the commencement of the ship canal between the two oceans, which was the
subject of the convention between the United States and Great Britain of
the 19th of April, 1850. Accordingly, a proposition for the same
purposes, addressed to the two Governments in that quarter and to the
Mosquito Indians, was agreed to in April last by the Secretary of State
and the minister of Her Britannic Majesty. Besides the wish to aid in
reconciling the differences of the two Republics, I engaged in the
negotiation from a desire to place the great work of a ship canal
between the two oceans under one jurisdiction and to establish the
important port of San Juan de Nicaragua under the government of a
civilized power. The proposition in question was assented to by Costs
Rica and the Mosquito Indians. It has not proved equally acceptable to
Nicaragua, but it is to be hoped that the further negotiations on the
subject which are in train will be carried on in that spirit of
conciliation and compromise which ought always to prevail on such
occasions, and that they will lead to a satisfactory result.

I have the satisfaction to inform you that the executive government of
Venezuela has acknowledged some claims of citizens of the United States
which have for many years past been urged by our charge d'affaires at
Caracas. It is hoped that the same sense of justice will actuate the
Congress of that Republic in providing the means for their payment.

The recent revolution in Buenos Ayres and the Confederated States having
opened the prospect of an improved state of things in that quarter, the
Governments of Great Britain and France determined to negotiate with the
chief of the new confederacy for the free access of their commerce to
the extensive countries watered by the tributaries of the La Plata; and
they gave a friendly notice of this purpose to the United States, that
we might, if we thought proper, pursue the same course. In compliance
with this invitation, our minister at Rio Janeiro and our charge
d'affaires at Buenos Ayres have been fully authorized to conclude
treaties with the newly organized confederation or the States composing
it. The delays which have taken place in the formation of the new
government have as yet prevented the execution of those instructions,
but there is every reason to hope that these vast countries will be
eventually opened to our commerce.

A treaty of commerce has been concluded between the United States and
the Oriental Republic of Uruguay, which will be laid before the Senate.
Should this convention go into operation, it will open to the commercial
enterprise of our citizens a country of great extent and unsurpassed in
natural resources, but from which foreign nations have hitherto been
almost wholly excluded.

The correspondence of the late Secretary of State with the Peruvian
charge d'affaires relative to the Lobos Islands was communicated to
Congress toward the close of the last session. Since that time, on
further investigation of the subject, the doubts which had been
entertained of the title of Peru to those islands have been removed, and
I have deemed it just that the temporary wrong which had been
unintentionally done her from want of information should be repaired by
an unreserved acknowledgment of her sovereignty.

I have the satisfaction to inform you that the course pursued by Peru
has been creditable to the liberality of her Government. Before it was
known by her that her title would be acknowledged at Washington, her
minister of foreign affairs had authorized our charge d'affaires at Lima
to announce to the American vessels which had gone to the Lobos for
guano that the Peruvian Government was willing to freight them on its
own account. This intention has been carried into effect by the Peruvian
minister here by an arrangement which is believed to be advantageous to
the parties in interest.

Our settlements on the shores of the Pacific have already given a great
extension, and in some respects a new direction, to our commerce in that
ocean. A direct and rapidly increasing intercourse has sprung up with
eastern Asia. The waters of the Northern Pacific, even into the Arctic
Sea, have of late years been frequented by our whalemen. The application
of steam to the general purposes of navigation is becoming daily more
common, and makes it desirable to obtain fuel and other necessary
supplies at convenient points on the route between Asia and our Pacific
shores. Our unfortunate countrymen who from time to time suffer
shipwreck on the coasts of the eastern seas are entitled to protection.
Besides these specific objects, the general prosperity of our States on
the Pacific requires that an attempt should be made to open the opposite
regions of Asia to a mutually beneficial intercourse. It is obvious that
this attempt could be made by no power to so great advantage as by the
United States, whose constitutional system excludes every idea of
distant colonial dependencies. I have accordingly been led to order an
appropriate naval force to Japan, under the command of a discreet and
intelligent officer of the highest rank known to our service. He is
instructed to endeavor to obtain from the Government of that country
some relaxation of the inhospitable and antisocial system which it has
pursued for about two centuries. He has been directed particularly to
remonstrate in the strongest language against the cruel treatment to
which our shipwrecked mariners have often been subjected and to insist
that they shall be treated with humanity. He is instructed, however, at
the same time, to give that Government the amplest assurances that the
objects of the United States are such, and such only, as I have
indicated, and that the expedition is friendly and peaceful.
Notwithstanding the jealousy with which the Governments of eastern Asia
regard all overtures from foreigners, I am not without hopes of a
beneficial result of the expedition. Should it be crowned with success,
the advantages will not be confined to the United States, but, as in the
case of China, will be equally enjoyed by all the other maritime powers.
I have much satisfaction in stating that in all the steps preparatory to
this expedition the Government of the United States has been materially
aided by the good offices of the King of the Netherlands, the only
European power having any commercial relations with Japan.

In passing from this survey of our foreign relations, I invite the
attention of Congress to the condition of that Department of the
Government to which this branch of the public business is intrusted. Our
intercourse with foreign powers has of late years greatly increased,
both in consequence of our own growth and the introduction of many new
states into the family of nations. In this way the Department of State
has become overburdened. It has by the recent establishment of the
Department of the Interior been relieved of some portion of the domestic
business. If the residue of the business of that kind--such as the
distribution of Congressional documents, the keeping, publishing, and
distribution of the laws of the United States, the execution of the
copyright law, the subject of reprieves and pardons, and some other
subjects relating to interior administration--should be transferred from
the Department of State, it would unquestionably be for the benefit of
the public service. I would also suggest that the building appropriated
to the State Department is not fireproof; that there is reason to think
there are defects in its construction, and that the archives of the
Government in charge of the Department, with the precious collections of
the manuscript papers of Washington, Jefferson, Hamilton, Madison, and
Monroe, are exposed to destruction by fire. A similar remark may be made
of the buildings appropriated to the War and Navy Departments.

The condition of the Treasury is exhibited in the annual report from
that Department.

The cash receipts into the Treasury for the fiscal year ending the 30th
June last, exclusive of trust funds, were $49,728,386.89, and the
expenditures for the same period, likewise exclusive of trust funds,
were $46,007,896.20, of which $9,455,815.83 was on account of the
principal and interest of the public debt, including the last
installment of the indemnity to Mexico under the treaty of Guadalupe
Hidalgo, leaving a balance of $14,632,136.37 in the Treasury on the 1st
day of July last. Since this latter period further purchases of the
principal of the public debt have been made to the extent of
$2,456,547.49, and the surplus in the Treasury will continue to be
applied to that object whenever the stock can be procured within the
limits as to price authorized by law.

The value of foreign merchandise imported during the last fiscal year
was $207,240,101, and the value of domestic productions exported was
$149,861,911, besides $17,204,026 of foreign merchandise exported,
making the aggregate of the entire exports $167,065,937. Exclusive of
the above, there was exported $42,507,285 in specie, and imported from
foreign ports $5,262,643.

In my first annual message to Congress I called your attention to what
seemed to me some defects in the present tariff, and recommended such
modifications as in my judgment were best adapted to remedy its evils
and promote the prosperity of the country. Nothing has since occurred to
change my views on this important question.

Without repeating the arguments contained in my former message in favor
of discriminating protective duties, I deem it my duty to call your
attention to one or two other considerations affecting this subject. The
first is the effect of large importations of foreign goods upon our
currency. Most of the gold of California, as fast as it is coined, finds
its way directly to Europe in payment for goods purchased. In the second
place, as our manufacturing establishments are broken down by
competition with foreigners, the capital invested in them is lost,
thousands of honest and industrious citizens are thrown out of
employment, and the farmer, to that extent, is deprived of a home market
for the sale of his surplus produce. In the third place, the destruction
of our manufactures leaves the foreigner without competition in our
market, and he consequently raises the price of the article sent here
for sale, as is now seen in the increased cost of iron imported from
England. The prosperity and wealth of every nation must depend upon its
productive industry. The farmer is stimulated to exertion by finding a
ready market for his surplus products, and benefited by being able to
exchange them without loss of time or expense of transportation for the
manufactures which his comfort or convenience requires. This is always
done to the best advantage where a portion of the community in which he
lives is engaged in other pursuits. But most manufactures require an
amount of capital and a practical skill which can not be commanded
unless they be protected for a time from ruinous competition from
abroad. Hence the necessity of laying those duties upon imported goods
which the Constitution authorizes for revenue in such a manner as to
protect and encourage the labor of our own citizens. Duties, however,
should not be fixed at a rate so high as to exclude the foreign article,
but should be so graduated as to enable the domestic manufacturer fairly
to compete with the foreigner in our own markets, and by this
competition to reduce the price of the manufactured article to the
consumer to the lowest rate at which it can be produced. This policy
would place the mechanic by the side of the farmer, create a mutual
interchange of their respective commodities, and thus stimulate the
industry of the whole country and render us independent of foreign
nations for the supplies required by the habits or necessities of the
people.

Another question, wholly independent of protection, presents itself, and
that is, whether the duties levied should be upon the value of the
article at the place of shipment, or, where it is practicable, a
specific duty, graduated according to quantity, as ascertained by weight
or measure. All our duties are at present ad valorem. A certain
percentage is levied on the price of the goods at the port of shipment
in a foreign country. Most commercial nations have found it
indispensable, for the purpose of preventing fraud and perjury, to make
the duties specific whenever the article is of such a uniform value in
weight or measure as to justify such a duty. Legislation should never
encourage dishonesty or crime. It is impossible that the revenue
officers at the port where the goods are entered and the duties paid
should know with certainty what they cost in the foreign country. Yet
the law requires that they should levy the duty according to such cost.
They are therefore compelled to resort to very unsatisfactory evidence
to ascertain what that cost was. They take the invoice of the importer,
attested by his oath, as the best evidence of which the nature of the
case admits. But everyone must see that the invoice may be fabricated
and the oath by which it is supported false, by reason of which the
dishonest importer pays a part only of the duties which are paid by the
honest one, and thus indirectly receives from the Treasury of the United
States a reward for his fraud and perjury. The reports of the Secretary
of the Treasury heretofore made on this subject show conclusively that
these frauds have been practiced to a great extent. The tendency is to
destroy that high moral character for which our merchants have long been
distinguished, to defraud the Government of its revenue, to break down
the honest importer by a dishonest competition, and, finally, to
transfer the business of importation to foreign and irresponsible
agents, to the great detriment of our own citizens. I therefore again
most earnestly recommend the adoption of specific duties wherever it is
practicable, or a home valuation, to prevent these frauds.

I would also again call your attention to the fact that the present
tariff in some cases imposes a higher duty upon the raw material
imported than upon the article manufactured from it, the consequence of
which is that the duty operates to the encouragement of the foreigner
and the discouragement of our own citizens.

For full and detailed information in regard to the general condition of
our Indian affairs, I respectfully refer you to the report of the
Secretary of the Interior and the accompanying documents.

The Senate not having thought proper to ratify the treaties which have
been negotiated with the tribes of Indians in California and Oregon, our
relations with them have been left in a very unsatisfactory condition.

In other parts of our territory particular districts of country have
been set apart for the exclusive occupation of the Indians, and their
right to the lands within those limits has been acknowledged and
respected. But in California and Oregon there has been no recognition by
the Government of the exclusive right of the Indians to any part of the
country. They are therefore mere tenants at sufferance, and liable to be
driven from place to place at the pleasure of the whites.

The treaties which have been rejected proposed to remedy this evil by
allotting to the different tribes districts of country suitable to their
habits of life and sufficient for their support. This provision, more
than any other, it is believed, led to their rejection; and as no
substitute for it has been adopted by Congress, it has not been deemed
advisable to attempt to enter into new treaties of a permanent
character, although no effort has been spared by temporary arrangements
to preserve friendly relations with them.

If it be the desire of Congress to remove them from the country
altogether, or to assign to them particular districts more remote from
the settlements of the whites, it will be proper to set apart by law the
territory which they are to occupy and to provide the means necessary
for removing them to it. Justice alike to our own citizens and to the
Indians requires the prompt action of Congress on this subject. The
amendments proposed by the Senate to the treaties which were negotiated
with the Sioux Indians of Minnesota have been submitted to the tribes
who were parties to them, and have received their assent. A large tract
of valuable territory has thus been opened for settlement and
cultivation, and all danger of collision with these powerful and warlike
bands has been happily removed.

The removal of the remnant of the tribe of Seminole Indians from Florida
has long been a cherished object of the Government, and it is one to
which my attention has been steadily directed. Admonished by past
experience of the difficulty and cost of the attempt to remove them by
military force, resort has been had to conciliatory measures. By the
invitation of the Commissioner of Indian Affairs, several of the
principal chiefs recently visited Washington, and whilst here
acknowledged in writing the obligation of their tribe to remove with the
least possible delay. Late advices from the special agent of the
Government represent that they adhere to their promise, and that a
council of their people has been called to make their preliminary
arrangements. A general emigration may therefore be confidently expected
at an early day.

The report from the General Land Office shows increased activity in its
operations. The survey of the northern boundary of Iowa has been
completed with unexampled dispatch. Within the last year 9,522,953 acres
of public land have been surveyed and 8,032,463 acres brought into
market.

Acres In the last fiscal year there were sold 1,553,071 Located with
bounty-land warrants 3,201,314 Located with other certificates 115,682
Making a total of 4,870,067

In addition there were--Reported under swamp-land grants 5,219,188 For
internal improvements, railroads, etc 3,025,920 Making an aggregate of
13,115,175 Being an increase of the amount sold and located under land
warrants of 569,220 acres over the previous year. The whole amount thus
sold, located under land warrants, reported under swamp-land grants, and
selected for internal improvements exceeds that of the previous year by
3,342,372 acres; and the sales would without doubt have been much larger
but for the extensive reservations for railroads in Missouri,
Mississippi, and Alabama.

Acres For the quarter ending 30th September, 1852, there were sold
243,255 Located with bounty-land warrants 1,387,116 Located with other
certificates 15,649 Reported under swamp-land grants 2,485,233 Making an
aggregate for the quarter of 4,131,253

Much the larger portion of the labor of arranging and classifying the
returns of the last census has been finished, and it will now devolve
upon Congress to make the necessary provision for the publication of the
results in such form as shall be deemed best. The apportionment of
representation on the basis of the new census has been made by the
Secretary of the Interior in conformity with the provisions of law
relating to that subject, and the recent elections have been made in
accordance with it.

I commend to your favorable regard the suggestion contained in the
report of the Secretary of the Interior that provision be made by law
for the publication and distribution, periodically, of an analytical
digest of all the patents which have been or may hereafter be granted
for useful inventions and discoveries, with such descriptions and
illustrations as may be necessary to present an intelligible view of
their nature and operation. The cost of such publication could easily be
defrayed out of the patent fund, and I am persuaded that it could be
applied to no object more acceptable to inventors and beneficial to the
public at large.

An appropriation of $100,000 having been made at the last session for
the purchase of a suitable site and for the erection, furnishing, and
fitting up of an asylum for the insane of the District of Columbia and
of the Army and Navy of the United States, the proper measures have been
adopted to carry this beneficent purpose into effect.

By the latest advices from the Mexican boundary commission it appears
that the survey of the river Gila from its continence with the Colorado
to its supposed intersection with the western line of New Mexico has
been completed. The survey of the Rio Grande has also been finished from
the point agreed on by the commissioners as "the point where it strikes
the southern boundary of New Mexico" to a point 135 miles below Eagle
Pass, which is about two-thirds of the distance along the course of the
river to its mouth.

The appropriation which was made at the last session of Congress for the
continuation of the survey is subject to the following proviso:
Provided, That no part of this appropriation shall be used or expended
until it shall be made satisfactorily to appear to the President of the
United States that the southern boundary of New Mexico is not
established by the commissioner and surveyor of the United States
farther north of the town called "Paso" than the same is laid down in
Disturnell's map, which is added to the treaty.

My attention was drawn to this subject by a report from the Department
of the Interior, which reviewed all the facts of the case and submitted
for my decision the question whether under existing circumstances any
part of the appropriation could be lawfully used or expended for the
further prosecution of the work. After a careful consideration of the
subject I came to the conclusion that it could not, and so informed the
head of that Department. Orders were immediately issued by him to the
commissioner and surveyor to make no further requisitions on the
Department, as they could not be paid, and to discontinue all operations
on the southern line of New Mexico. But as the Department had no exact
information as to the amount of provisions and money which remained
unexpended in the hands of the commissioner and surveyor, it was left
discretionary with them to continue the survey down the Rio Grande as
far as the means at their disposal would enable them or at once to
disband the commission. A special messenger has since arrived from the
officer in charge of the survey on the river with information that the
funds subject to his control were exhausted and that the officers and
others employed in the service were destitute alike of the means of
prosecuting the work and of returning to their homes.

The object of the proviso was doubtless to arrest the survey of the
southern and western lines of New Mexico, in regard to which different
opinions have been expressed; for it is hardly to be supposed that there
could be any objection to that part of the line which extends along the
channel of the Rio Grande. But the terms of the law are so broad as to
forbid the use of any part of the money for the prosecution of the work,
or even for the payment to the officers and agents of the arrearages of
pay which are justly due to them.

I earnestly invite your prompt attention to this subject, and recommend
a modification of the terms of the proviso, so as to enable the
Department to use as much of the appropriation as will be necessary to
discharge the existing obligations of the Government and to complete the
survey of the Rio Grande to its mouth.

It will also be proper to make further provision by law for the
fulfillment of our treaty with Mexico for running and marking the
residue of the boundary line between the two countries.

Permit me to invite your particular attention to the interests of the
District of Columbia, which are confided by the Constitution to your
peculiar care.

Among the measures which seem to me of the greatest importance to its
prosperity are the introduction of a copious supply of water into the
city of Washington and the construction of suitable bridges across the
Potomac to replace those which were destroyed by high water in the early
part of the present year.

At the last session of Congress an appropriation was made to defray the
cost of the surveys necessary for determining the best means of
affording an unfailing supply of good and wholesome water. Some progress
has been made in the survey, and as soon as it is completed the result
will be laid before you.

Further appropriations will also be necessary for grading and paving the
streets and avenues and inclosing and embellishing the public grounds
within the city of Washington.

I commend all these objects, together with the charitable institutions
of the District, to your favorable regard. Every effort has been made to
protect our frontier and that of the adjoining Mexican States from the
incursions of the Indian tribes. Of about 11,000 men of which the Army
is composed, nearly 8,000 are employed in the defense of the newly
acquired territory (including Texas) and of emigrants proceeding
thereto. I am gratified to say that these efforts have been unusually
successful. With the exception of some partial outbreaks in California
and Oregon and occasional depredations on a portion of the Rio Grande,
owing, it is believed, to the disturbed state of that border region, the
inroads of the Indians have been effectually restrained.

Experience has shown, however, that whenever the two races are brought
into contact collisions will inevitably occur. To prevent these
collisions the United States have generally set apart portions of their
territory for the exclusive occupation of the Indian tribes. A
difficulty occurs, however, in the application of this policy to Texas.
By the terms of the compact by which that State was admitted into the
Union she retained the ownership of all the vacant lands within her
limits. The government of that State, it is understood, has assigned no
portion of her territory to the Indians, but as fast as her settlements
advance lays it off into counties and proceeds to survey and sell it.
This policy manifestly tends not only to alarm and irritate the Indians,
but to compel them to resort to plunder for subsistence. It also
deprives this Government of that influence and control over them without
which no durable peace can ever exist between them and the whites. I
trust, therefore, that a due regard for her own interests, apart from
considerations of humanity and justice, will induce that State to assign
a small portion of her vast domain for the provisional occupancy of the
small remnants of tribes within her borders, subject, of course, to her
ownership and eventual jurisdiction. If she should fail to do this, the
fulfillment of our treaty stipulations with Mexico and our duty to the
Indians themselves will, it is feared, become a subject of serious
embarrassment to the Government. It is hoped, however, that a timely and
just provision by Texas may avert this evil.

No appropriations for fortifications were made at the two last sessions
of Congress. The cause of this omission is probably to be found in a
growing belief that the system of fortifications adopted in 1816, and
heretofore acted on, requires revision.

The subject certainly deserves full and careful investigation, but it
should not be delayed longer than can be avoided. In the meantime there
are certain works which have been commenced, some of them nearly
completed, designed to protect our principal seaports from Boston to New
Orleans and a few other important points. In regard to the necessity for
these works, it is believed that little difference of opinion exists
among military men. I therefore recommend that the appropriations
necessary to prosecute them be made.

I invite your attention to the remarks on this subject and on others
connected with his Department contained in the accompanying report of
the Secretary of War.

Measures have been taken to carry into effect the law of the last
session making provision for the improvement of certain rivers and
harbors, and it is believed that the arrangements made for that purpose
will combine efficiency with economy. Owing chiefly to the advanced
season when the act was passed, little has yet been done in regard to
many of the works beyond making the necessary preparations. With respect
to a few of the improvements, the sums already appropriated will suffice
to complete them; but most of them will require additional
appropriations. I trust that these appropriations will be made, and that
this wise and beneficent policy, so auspiciously resumed, will be
continued. Great care should be taken, however, to commence no work
which is not of sufficient importance to the commerce of the country to
be viewed as national in its character. But works which have been
commenced should not be discontinued until completed, as otherwise the
sums expended will in most cases be lost.

The report from the Navy Department will inform you of the prosperous
condition of the branch of the public service committed to its charge.
It presents to your consideration many topics and suggestions of which I
ask your approval. It exhibits an unusual degree of activity in the
operations of the Department during the past year. The preparations for
the Japan expedition, to which I have already alluded; the arrangements
made for the exploration and survey of the China Seas, the Northern
Pacific, and Behrings Straits; the incipient measures taken toward a
reconnoissance of the continent of Africa eastward of Liberia; the
preparation for an early examination of the tributaries of the river La
Plata, which a recent decree of the provisional chief of the Argentine
Confederation has opened to navigation--all these enterprises and the
means by which they are proposed to be accomplished have commanded my
full approbation, and I have no doubt will be productive of most useful
results.

Two officers of the Navy were heretofore instructed to explore the whole
extent of the Amazon River from the confines of Peru to its mouth. The
return of one of them has placed in the possession of the Government an
interesting and valuable account of the character and resources of a
country abounding in the materials of commerce, and which if opened to
the industry of the world will prove an inexhaustible fund of wealth.
The report of this exploration will be communicated to you as soon as it
is completed.

Among other subjects offered to your notice by the Secretary of the
Navy, I select for special commendation, in view of its connection with
the interests of the Navy, the plan submitted by him for the
establishment of a permanent corps of seamen and the suggestions he has
presented for the reorganization of the Naval Academy.

In reference to the first of these, I take occasion to say that I think
it will greatly improve the efficiency of the service, and that I regard
it as still more entitled to favor for the salutary influence it must
exert upon the naval discipline, now greatly disturbed by the increasing
spirit of insubordination resulting from our present system. The plan
proposed for the organization of the seamen furnishes a judicious
substitute for the law of September, 1850, abolishing corporal
punishment, and satisfactorily sustains the policy of that act under
conditions well adapted to maintain the authority of command and the
order and security of our ships. It is believed that any change which
proposes permanently to dispense with this mode of punishment should be
preceded by a system of enlistment which shall supply the Navy with
seamen of the most meritorious class, whose good deportment and pride of
character may preclude all occasion for a resort to penalties of a harsh
or degrading nature. The safety of a ship and her crew is often
dependent upon immediate obedience to a command, and the authority to
enforce it must be equally ready. The arrest of a refractory seaman in
such moments not only deprives the ship of indispensable aid, but
imposes a necessity for double service on others, whose fidelity to
their duties may be relied upon in such an emergency. The exposure to
this increased and arduous labor since the passage of the act of 1850
has already had, to a most observable and injurious extent, the effect
of preventing the enlistment of the best seamen in the Navy. The plan
now suggested is designed to promote a condition of service in which
this objection will no longer exist. The details of this plan may be
established in great part, if not altogether, by the Executive under the
authority of existing laws, but I have thought it proper, in accordance
with the suggestion of the Secretary of the Navy, to submit it to your
approval.

The establishment of a corps of apprentices for the Navy, or boys to be
enlisted until they become of age, and to be employed under such
regulations as the Navy Department may devise, as proposed in the
report, I cordially approve and commend to your consideration; and I
also concur in the suggestion that this system for the early training of
seamen may be most usefully ingrafted upon the service of our merchant
marine. The other proposition of the report to which I have
referred--the reorganization of the Naval Academy--I recommend to your
attention as a project worthy of your encouragement and support. The
valuable services already rendered by this institution entitle it to the
continuance of your fostering care.

Your attention is respectfully called to the report of the Postmaster
General for the detailed operation of his Department during the last
fiscal year, from which it will be seen that the receipts from postages
for that time were less by $1,431,696 than for the preceding fiscal
year, being a decrease of about 23 per cent.

This diminution is attributable to the reduction in the rates of postage
made by the act of March 3, 1851, which reduction took effect at the
commencement of the last fiscal year.

Although in its operation during the last year the act referred to has
not fulfilled the predictions of its friends by increasing the
correspondence of the country in proportion to the reduction of postage,
I should, nevertheless, question the policy of returning to higher
rates. Experience warrants the expectation that as the community becomes
accustomed to cheap postage correspondence will increase. It is believed
that from this cause and from the rapid growth of the country in
population and business the receipts of the Department must ultimately
exceed its expenses, and that the country may safely rely upon the
continuance of the present cheap rate of postage.

In former messages I have, among other things, respectfully recommended
to the consideration of Congress the propriety and necessity of further
legislation for the protection and punishment of foreign consuls
residing in the United States; to revive, with certain modifications,
the act of 10th March, 1838, to restrain unlawful military expeditions
against the inhabitants of conterminous states or territories; for the
preservation and protection from mutilation or theft of the papers,
records, and archives of the nation; for authorizing the surplus revenue
to be applied to the payment of the public debt in advance of the time
when it will become due; for the establishment of land offices for the
sale of the public lands in California and the Territory of Oregon; for
the construction of a road from the Mississippi Valley to the Pacific
Ocean; for the establishment of a bureau of agriculture for the
promotion of that interest, perhaps the most important in the country;
for the prevention of frauds upon the Government in applications for
pensions and bounty lands; for the establishment of a uniform fee bill,
prescribing a specific compensation for every service required of
clerks, district attorneys, and marshals; for authorizing an additional
regiment of mounted men for the defense of our frontiers against the
Indians and for fulfilling our treaty stipulations with Mexico to defend
her citizens against the Indians "with equal diligence and energy as our
own;" for determining the relative rank between the naval and civil
officers in our public ships and between the officers of the Army and
Navy in the various grades of each; for reorganizing the naval
establishment by fixing the number of officers in each grade, and
providing for a retired list upon reduced pay of those unfit for active
duty; for prescribing and regulating punishments in the Navy; for the
appointment of a commission to revise the public statutes of the United
States by arranging them in order, supplying deficiencies, correcting
incongruities, simplifying their language, and reporting them to
Congress for its final action; and for the establishment of a commission
to adjudicate and settle private claims against the United States. I am
not aware, however, that any of these subjects have been finally acted
upon by Congress. Without repeating the reasons for legislation on these
subjects which have been assigned in former messages, I respectfully
recommend them again to your favorable consideration.

I think it due to the several Executive Departments of this Government
to bear testimony to the efficiency and integrity with which they are
conducted. With all the careful superintendence which it is possible for
the heads of those Departments to exercise, still the due administration
and guardianship of the public money must very much depend on the
vigilance, intelligence, and fidelity of the subordinate officers and
clerks, and especially on those intrusted with the settlement and
adjustment of claims and accounts. I am gratified to believe that they
have generally performed their duties faithfully and well. They are
appointed to guard the approaches to the public Treasury, and they
occupy positions that expose them to all the temptations and seductions
which the cupidity of peculators and fraudulent claimants can prompt
them to employ. It will be but a wise precaution to protect the
Government against that source of mischief and corruption, as far as it
can be done, by the enactment of all proper legal penalties. The laws in
this respect are supposed to be defective, and I therefore deem it my
duty to call your attention to the subject and to recommend that
provision be made by law for the punishment not only of those who shall
accept bribes, but also of those who shall either promise, give, or
offer to give to any of those officers or clerks a bribe or reward
touching or relating to any matter of their official action or duty.

It has been the uniform policy of this Government, from its foundation
to the present day, to abstain from all interference in the domestic
affairs of other nations. The consequence has been that while the
nations of Europe have been engaged in desolating wars our country has
pursued its peaceful course to unexampled prosperity and happiness. The
wars in which we have been compelled to engage in defense of the rights
and honor of the country have been, fortunately, of short duration.
During the terrific contest of nation against nation which succeeded the
French Revolution we were enabled by the wisdom and firmness of
President Washington to maintain our neutrality. While other nations
were drawn into this wide-sweeping whirlpool, we sat quiet and unmoved
upon our own shores. While the flower of their numerous armies was
wasted by disease or perished by hundreds of thousands upon the
battlefield, the youth of this favored land were permitted to enjoy the
blessings of peace beneath the paternal roof. While the States of Europe
incurred enormous debts, under the burden of which their subjects still
groan, and which must absorb no small part of the product of the honest
industry of those countries for generations to come, the United States
have once been enabled to exhibit the proud spectacle of a nation free
from public debt, and if permitted to pursue our prosperous way for a
few years longer in peace we may do the same again.

But it is now said by some that this policy must be changed. Europe is
no longer separated from us by a voyage of months, but steam navigation
has brought her within a few days' sail of our shores. We see more of
her movements and take a deeper interest in her controversies. Although
no one proposes that we should join the fraternity of potentates who
have for ages lavished the blood and treasure of their subjects in
maintaining "the balance of power," yet it is said that we ought to
interfere between contending sovereigns and their subjects for the
purpose of overthrowing the monarchies of Europe and establishing in
their place republican institutions. It is alleged that we have
heretofore pursued a different course from a sense of our weakness, but
that now our conscious strength dictates a change of policy, and that it
is consequently our duty to mingle in these contests and aid those who
are struggling for liberty.

This is a most seductive but dangerous appeal to the generous sympathies
of freemen. Enjoying, as we do, the blessings of a free Government,
there is no man who has an American heart that would not rejoice to see
these blessings extended to all other nations. We can not witness the
struggle between the oppressed and his oppressor anywhere without the
deepest sympathy for the former and the most anxious desire for his
triumph. Nevertheless, is it prudent or is it wise to involve ourselves
in these foreign wars? Is it indeed true that we have heretofore
refrained from doing so merely from the degrading motive of a conscious
weakness? For the honor of the patriots who have gone before us, I can
not admit it. Men of the Revolution, who drew the sword against the
oppressions of the mother country and pledged to Heaven "their lives,
their fortunes, and their sacred honor" to maintain their freedom, could
never have been actuated by so unworthy a motive. They knew no weakness
or fear where right or duty pointed the way, and it is a libel upon
their fair fame for us, while we enjoy the blessings for which they so
nobly fought and bled, to insinuate it. The truth is that the course
which they pursued was dictated by a stern sense of international
justice, by a statesmanlike prudence and a far-seeing wisdom, looking
not merely to the present necessities but to the permanent safety and
interest of the country. They knew that the world is governed less by
sympathy than by reason and force; that it was not possible for this
nation to become a "propagandist" of free principles without arraying
against it the combined powers of Europe, and that the result was more
likely to be the overthrow of republican liberty here than its
establishment there. History has been written in vain for those who can
doubt this. France had no sooner established a republican form of
government than she manifested a desire to force its blessings on all
the world. Her own historian informs us that, hearing of some petty acts
of tyranny in a neighboring principality, "the National Convention
declared that she would afford succor and fraternity to all nations who
wished to recover their liberty, and she gave it in charge to the
executive power to give orders to the generals of the French armies to
aid all citizens who might have been or should be oppressed in the cause
of liberty." Here was the false step which led to her subsequent
misfortunes. She soon found herself involved in war with all the rest of
Europe. In less than ten years her Government was changed from a
republic to an empire, and finally, after shedding rivers of blood,
foreign powers restored her exiled dynasty and exhausted Europe sought
peace and repose in the unquestioned ascendency of monarchical
principles. Let us learn wisdom from her example. Let us remember that
revolutions do not always establish freedom. Our own free institutions
were not the offspring of our Revolution. They existed before. They were
planted in the free charters of self-government under which the English
colonies grew up, and our Revolution only freed us from the dominion of
a foreign power whose government was at variance with those
institutions. But European nations have had no such training for
self-government, and every effort to establish it by bloody revolutions
has been, and must without that preparation continue to be, a failure.
Liberty unregulated by law degenerates into anarchy, which soon becomes
the most horrid of all despotisms. Our policy is wisely to govern
ourselves, and thereby to set such an example of national justice,
prosperity, and true glory as shall teach to all nations the blessings
of self-government and the unparalleled enterprise and success of a free
people.

We live in an age of progress, and ours is emphatically a country of
progress. Within the last half century the number of States in this
Union has nearly doubled, the population has almost quadrupled, and our
boundaries have been extended from the Mississippi to the Pacific. Our
territory is checkered over with railroads and furrowed with canals. The
inventive talent of our country is excited to the highest pitch, and the
numerous applications for patents for valuable improvements distinguish
this age and this people from all others. The genius of one American has
enabled our commerce to move against wind and tide and that of another
has annihilated distance in the transmission of intelligence. The whole
country is full of enterprise. Our common schools are diffusing
intelligence among the people and our industry is fast accumulating the
comforts and luxuries of life. This is in part owing to our peculiar
position, to our fertile soil and comparatively sparse population; but
much of it is also owing to the popular institutions under which we
live, to the freedom which every man feels to engage in any useful
pursuit according to his taste or inclination, and to the entire
confidence that his person and property will be protected by the laws.
But whatever may be the cause of this unparalleled growth in population,
intelligence, and wealth, one tiring is clear--that the Government must
keep pace with the progress of the people. It must participate in their
spirit of enterprise, and while it exacts obedience to the laws and
restrains all unauthorized invasions of the rights of neighboring
states, it should foster and protect home industry and lend its powerful
strength to the improvement of such means of intercommunication as are
necessary to promote our internal commerce and strengthen the ties which
bind us together as a people.

It is not strange, however much it may be regretted, that such an
exuberance of enterprise should cause some individuals to mistake change
for progress and the invasion of the rights of others for national
prowess and glory. The former are constantly agitating for some change
in the organic law, or urging new and untried theories of human rights.
The latter are ever ready to engage in any wild crusade against a
neighboring people, regardless of the justice of the enterprise and
without looking at the fatal consequences to ourselves and to the cause
of popular government. Such expeditions, however, are often stimulated
by mercenary individuals, who expect to share the plunder or profit of
the enterprise without exposing themselves to danger, and are led on by
some irresponsible foreigner, who abuses the hospitality of our own
Government by seducing the young and ignorant to join in his scheme of
personal ambition or revenge under the false and delusive pretense of
extending the area of freedom. These reprehensible aggressions but
retard the true progress of our nation and tarnish its fair fame. They
should therefore receive the indignant frowns of every good citizen who
sincerely loves his country and takes a pride in its prosperity and
honor. Our Constitution, though not perfect, is doubtless the best that
ever was formed. Therefore let every proposition to change it be well
weighed and, if found beneficial, cautiously adopted. Every patriot will
rejoice to see its authority so exerted as to advance the prosperity and
honor of the nation, whilst he will watch with jealousy any attempt to
mutilate this charter of our liberties or pervert its powers to acts of
aggression or injustice. Thus shall conservatism and progress blend
their harmonious action in preserving the form and spirit of the
Constitution and at the same time carry forward the great improvements
of the country with a rapidity and energy which freemen only can
display.

In closing this my last annual communication, permit me,
fellow-citizens, to congratulate you on the prosperous condition of our
beloved country. Abroad its relations with all foreign powers are
friendly, its rights are respected, and its high place in the family of
nations cheerfully recognized. At home we enjoy an amount of happiness,
public and private, which has probably never fallen to the lot of any
other people. Besides affording to our own citizens a degree of
prosperity of which on so large a scale I know of no other instance, our
country is annually affording a refuge and a home to multitudes,
altogether without example, from the Old World.

We owe these blessings, under Heaven, to the happy Constitution and
Government which were bequeathed to us by our fathers, and which it is
our sacred duty to transmit in all their integrity to our children. We
must all consider it a great distinction and privilege to have been
chosen by the people to bear a part in the administration of such a
Government. Called by an unexpected dispensation to its highest trust at
a season of embarrassment and alarm, I entered upon its arduous duties
with extreme diffidence. I claim only to have discharged them to the
best of an humble ability, with a single eye to the public good, and it
is with devout gratitude in retiring from office that I leave the
country in a state of peace and prosperity.

***

State of the Union Address
Franklin Pierce
December 5, 1853

Fellow-Citizens of the Senate and of the House of Representatives:

The interest with which the people of the Republic anticipate the
assembling of Congress and the fulfillment on that occasion of the duty
imposed upon a new President is one of the best evidences of their
capacity to realize the hopes of the founders of a political system at
once complex and symmetrical. While the different branches of the
Government are to a certain extent independent of each other, the duties
of all alike have direct reference to the source of power. Fortunately,
under this system no man is so high and none so humble in the scale of
public station as to escape from the scrutiny or to be exempt from the
responsibility which all official functions imply.

Upon the justice and intelligence of the masses, in a government thus
organized, is the sole reliance of the confederacy and the only security
for honest and earnest devotion to its interests against the usurpations
and encroachment of power on the one hand and the assaults of personal
ambition on the other.

The interest of which I have spoken is inseparable from an inquiring,
self-governing community, but stimulated, doubtless, at the present time
by the unsettled condition of our relations with several foreign powers,
by the new obligations resulting from a sudden extension of the field of
enterprise, by the spirit with which that field has been entered and the
amazing energy with which its resources for meeting the demands of
humanity have been developed.

Although disease, assuming at one time the characteristics of a
widespread and devastating pestilence, has left its sad traces upon some
portions of our country, we have still the most abundant cause for
reverent thankfulness to God for an accumulation of signal mercies
showered upon us as a nation. It is well that a consciousness of rapid
advancement and increasing strength be habitually associated with an
abiding sense of dependence upon Him who holds in His hands the destiny
of men and of nations.

Recognizing the wisdom of the broad principle of absolute religious
toleration proclaimed in our fundamental law, and rejoicing in the
benign influence which it has exerted upon our social and political
condition, I should shrink from a clear duty did I fail to express my
deepest conviction that we can place no secure reliance upon any
apparent progress if it be not sustained by national integrity, resting
upon the great truths affirmed and illustrated by divine revelation. In
the midst of our sorrow for the afflicted and suffering, it has been
consoling to see how promptly disaster made true neighbors of districts
and cities separated widely from each other, and cheering to watch the
strength of that common bond of brotherhood which unites all hearts, in
all parts of this Union, when danger threatens from abroad or calamity
impends over us at home.

Our diplomatic relations with foreign powers have undergone no essential
change since the adjournment of the last Congress. With some of them
questions of a disturbing character are still pending, but there are
good reasons to believe that these may all be amicably adjusted. For
some years past Great Britain has so construed the first article of the
convention of the 20th of April, 1818, in regard to the fisheries on the
northeastern coast, as to exclude our citizens from some of the fishing
grounds to which they freely resorted for nearly a quarter of a century
subsequent to the date of that treaty. The United States have never
acquiesced in this construction, but have always claimed for their
fishermen all the rights which they had so long enjoyed without
molestation. With a view to remove all difficulties on the subject, to
extend the rights of our fishermen beyond the limits fixed by the
convention of 1818, and to regulate trade between the United States and
the British North American Provinces, a negotiation has been opened with
a fair prospect of a favorable result. To protect our fishermen in the
enjoyment of their rights and prevent collision between them and British
fishermen, I deemed it expedient to station a naval force in that
quarter during the fishing season.

Embarrassing questions have also arisen between the two Governments in
regard to Central America. Great Britain has proposed to settle them by
an amicable arrangement, and our minister at London is instructed to
enter into negotiations on that subject. A commission for adjusting the
claims of our citizens against Great Britain and those of British
subjects against the United States, organized under the convention of
the 8th of February last, is now sitting in London for the transaction
of business. It is in many respects desirable that the boundary line
between the United States and the British Provinces in the northwest, as
designated in the convention of the 15th of June, 1846, and especially
that part which separates the Territory of Washington from the British
possessions on the north, should be traced and marked. I therefore
present the subject to your notice.

With France our relations continue on the most friendly footing. The
extensive commerce between the United States and that country might, it
is conceived, be released from some unnecessary restrictions to the
mutual advantage of both parties. With a view to this object, some
progress has been made in negotiating a treaty of commerce and
navigation.

Independently of our valuable trade with Spain, we have important
political relations with her growing out of our neighborhood to the
islands of Cuba and Porto Rico. I am happy to announce that since the
last Congress no attempts have been made by unauthorized expeditions
within the United States against either of those colonies. Should any
movement be manifested within our limits, all the means at my command
will be vigorously exerted to repress it. Several annoying occurrences
have taken place at Havana, or in the vicinity of the island of Cuba,
between our citizens and the Spanish authorities. Considering the
proximity of that island to our shores, lying, as it does, in the track
of trade between some of our principal cities, and the suspicious
vigilance with which foreign intercourse, particularly that with the
United States, is there guarded, a repetition of such occurrences may
well be apprehended.

As no diplomatic intercourse is allowed between our consul at Havana and
the Captain-General of Cuba, ready explanations can not be made or
prompt redress afforded where injury has resulted. All complaint on the
part of our citizens under the present arrangement must be, in the first
place, presented to this Government and then referred to Spain. Spain
again refers it to her local authorities in Cuba for investigation, and
postpones an answer till she has heard from those authorities. To avoid
these irritating and vexatious delays, a proposition has been made to
provide for a direct appeal for redress to the Captain-General by our
consul in behalf of our injured fellow-citizens. Hitherto the Government
of Spain has declined to enter into any such arrangement. This course on
her part is deeply regretted, for without some arrangement of this kind
the good understanding between the two countries may be exposed to
occasional interruption. Our minister at Madrid is instructed to renew
the proposition and to press it again upon the consideration of Her
Catholic Majesty's Government.

For several years Spain has been calling the attention of this
Government to a claim for losses by some of her subjects in the case of
the schooner Amistad. This claim is believed to rest on the obligations
imposed by our existing treaty with that country. Its justice was
admitted in our diplomatic correspondence with the Spanish Government as
early as March, 1847, and one of my predecessors, in his annual message
of that year, recommended that provision should be made for its payment.
In January last it was again submitted to Congress by the Executive. It
has received a favorable consideration by committees of both branches,
but as yet there has been no final action upon it. I conceive that good
faith requires its prompt adjustment, and I present it to your early and
favorable consideration.

Martin Koszta, a Hungarian by birth, came to this country in 1850, and
declared his intention in due form of law to become a citizen of the
United States. After remaining here nearly two years he visited Turkey.
While at Smyrna he was forcibly seized, taken on board an Austrian brig
of war then lying in the harbor of that place, and there confined in
irons, with the avowed design to take him into the dominions of Austria.
Our consul at Smyrna and legation at Constantinople interposed for his
release, but their efforts were ineffectual. While thus in prison
Commander Ingraham, with the United States ship of war St. Louis,
arrived at Smyrna, and after inquiring into the circumstances of the
case came to the conclusion that Koszta was entitled to the protection
of this Government, and took energetic and prompt measures for his
release. Under an arrangement between the agents of the United States
and of Austria, he was transferred to the custody of the French
consul-general at Smyrna, there to remain until he should be disposed of
by the mutual agreement of the consuls of the respective Governments at
that place. Pursuant to that agreement, he has been released, and is now
in the United States. The Emperor of Austria has made the conduct of our
officers who took part in this transaction a subject of grave complaint.
Regarding Koszta as still his subject, and claiming a right to seize him
within the limits of the Turkish Empire, he has demanded of this
Government its consent to the surrender of the prisoner, a disavowal of
the acts of its agents, and satisfaction for the alleged outrage. After
a careful consideration of the case I came to the conclusion that Koszta
was seized without legal authority at Smyrna; that he was wrongfully
detained on board of the Austrian brig of war; that at the time of his
seizure he was clothed with the nationality of the United States, and
that the acts of our officers, under the circumstances of the case, were
justifiable, and their conduct has been fully approved by me, and a
compliance with the several demands of the Emperor of Austria has been
declined.

For a more full account of this transaction and my views in regard to it
I refer to the correspondence between the charge d'affaires of Austria
and the Secretary of State, which is herewith transmitted. The
principles and policy therein maintained on the part of the United
States will, whenever a proper occasion occurs, be applied and enforced.

The condition of China at this time renders it probable that some
important changes will occur in that vast Empire which will lead to a
more unrestricted intercourse with it. The commissioner to that country
who has been recently appointed is instructed to avail himself of all
occasions to open and extend our commercial relations, not only with the
Empire of China, but with other Asiatic nations.

In 1852 an expedition was sent to Japan, under the command of Commodore
Perry, for the purpose of opening commercial intercourse with that
Empire. Intelligence has been received of his arrival there and of his
having made known to the Emperor of Japan the object of his visit. But
it is not yet ascertained how far the Emperor will be disposed to
abandon his restrictive policy and open that populous country to a
commercial intercourse with the United States.

It has been my earnest desire to maintain friendly intercourse with the
Governments upon this continent and to aid them in preserving good
understanding among themselves. With Mexico a dispute has arisen as to
the true boundary line between our Territory of New Mexico and the
Mexican State of Chihuahua. A former commissioner of the United States,
employed in running that line pursuant to the treaty of Guadalupe
Hidalgo, made a serious mistake in determining the initial point on the
Rio Grande; but inasmuch as his decision was clearly a departure from
the directions for tracing the boundary contained in that treaty, and
was not concurred in by the surveyor appointed on the part of the United
States, whose concurrence was necessary to give validity to that
decision, this Government is not concluded thereby; but that of Mexico
takes a different view of the subject.

There are also other questions of considerable magnitude pending between
the two Republics. Our minister in Mexico has ample instructions to
adjust them. Negotiations have been opened, but sufficient progress has
not been made therein to enable me to speak of the probable result.
Impressed with the importance of maintaining amicable relations with
that Republic and of yielding with liberality to all her just claims, it
is reasonable to expect that an arrangement mutually satisfactory to
both countries may be concluded and a lasting friendship between them
confirmed and perpetuated.

Congress having provided for a full mission to the States of Central
America, a minister was sent thither in July last. As yet he has had
time to visit only one of these States (Nicaragua), where he was
received in the most friendly manner. It is hoped that his presence and
good offices will have a benign effect in composing the dissensions
which prevail among them, and in establishing still more intimate and
friendly relations between them respectively and between each of them
and the United States.

Considering the vast regions of this continent and the number of states
which would be made accessible by the free navigation of the river
Amazon, particular attention has been given to this subject. Brazil,
through whose territories it passes into the ocean, has hitherto
persisted in a policy so restricted in regard to the use of this river
as to obstruct and nearly exclude foreign commercial intercourse with
the States which lie upon its tributaries and upper branches. Our
minister to that country is instructed to obtain a relaxation of that
policy and to use his efforts to induce the Brazilian Government to open
to common use, under proper safeguards, this great natural highway for
international trade. Several of the South American States are deeply
interested in this attempt to secure the free navigation of the Amazon,
and it is reasonable to expect their cooperation in the measure. As the
advantages of free commercial intercourse among nations are better
understood, more liberal views are generally entertained as to the
common rights of all to the free use of those means which nature has
provided for international communication. To these more liberal and
enlightened views it is hoped that Brazil will conform her policy and
remove all unnecessary restrictions upon the free use of a river which
traverses so many states and so large a part of the continent. I am
happy to inform you that the Republic of Paraguay and the Argentine
Confederation have yielded to the liberal policy still resisted by
Brazil in regard to the navigable rivers within their respective
territories. Treaties embracing this subject, among others, have been
negotiated with these Governments, which will be submitted to the Senate
at the present session.

A new branch of commerce, important to the agricultural interests of the
United States, has within a few years past been opened with Peru.
Notwithstanding the inexhaustible deposits of guano upon the islands of
that country, considerable difficulties are experienced in obtaining the
requisite supply. Measures have been taken to remove these difficulties
and to secure a more abundant importation of the article. Unfortunately,
there has been a serious collision between our citizens who have
resorted to the Chincha Islands for it and the Peruvian authorities
stationed there. Redress for the outrages committed by the latter was
promptly demanded by our minister at Lima. This subject is now under
consideration, and there is reason to believe that Peru is disposed to
offer adequate indemnity to the aggrieved parties. We are thus not only
at peace with all foreign countries, but, in regard to political
affairs, are exempt from any cause of serious disquietude in our
domestic relations.

The controversies which have agitated the country heretofore are passing
away with the causes which produced them and the passions which they had
awakened; or, if any trace of them remains, it may be reasonably hoped
that it will only be perceived in the zealous rivalry of all good
citizens to testify their respect for the rights of the States, their
devotion to the Union, and their common determination that each one of
the States, its institutions, its welfare, and its domestic peace, shall
be held alike secure under the sacred aegis of the Constitution. This
new league of amity and of mutual confidence and support into which the
people of the Republic have entered happily affords inducement and
opportunity for the adoption of a more comprehensive and unembarrassed
line of policy and action as to the great material interests of the
country, whether regarded in themselves or in connection with the powers
of the civilized world.

The United States have continued gradually and steadily to expand
through acquisitions of territory, which, how much soever some of them
may have been questioned, are now universally seen and admitted to have
been wise in policy, just in character, and a great element in the
advancement of our country, and with it of the human race, in freedom,
in prosperity, and in happiness. The thirteen States have grown to be
thirty-one, with relations reaching to Europe on the one side and on the
other to the distant realms of Asia.

I am deeply sensible of the immense responsibility which the present
magnitude of the Republic and the diversity and multiplicity of its
interests devolves upon me, the alleviation of which so far as relates
to the immediate conduct of the public business, is, first, in my
reliance on the wisdom and patriotism of the two Houses of Congress,
and, secondly, in the directions afforded me by the principles of public
polity affirmed by our fathers of the epoch of 1798, sanctioned by long
experience, and consecrated anew by the overwhelming voice of the people
of the United States.

Recurring to these principles, which constitute the organic basis of
union, we perceive that vast as are the functions and the duties of the
Federal Government, vested in or intrusted to its three great
departments--the legislative, executive, and judicial--yet the
substantive power, the popular force, and the large capacities for
social and material development exist in the respective States, which,
all being of themselves well-constituted republics, as they preceded so
they alone are capable of maintaining and perpetuating the American
Union. The Federal Government has its appropriate line of action in the
specific and limited powers conferred on it by the Constitution, chiefly
as to those things in which the States have a common interest in their
relations to one another and to foreign governments, while the great
mass of interests which belong to cultivated men--the ordinary business
of life, the springs of industry, all the diversified personal and
domestic affairs of society--rest securely upon the general reserved
powers of the people of the several States. There is the effective
democracy of the nation, and there the vital essence of its being and
its greatness.

Of the practical consequences which flow from the nature of the Federal
Government, the primary one is the duty of administering with integrity
and fidelity the high trust reposed in it by the Constitution,
especially in the application of the public funds as drawn by taxation
from the people and appropriated to specific objects by Congress.

Happily, I have no occasion to suggest any radical changes in the
financial policy of the Government. Ours is almost, if not absolutely,
the solitary power of Christendom having a surplus revenue drawn
immediately from imposts on commerce, and therefore measured by the
spontaneous enterprise and national prosperity of the country, with such
indirect relation to agriculture, manufactures, and the products of the
earth and sea as to violate no constitutional doctrine and yet
vigorously promote the general welfare. Neither as to the sources of the
public treasure nor as to the manner of keeping and managing it does any
grave controversy now prevail, there being a general acquiescence in the
wisdom of the present system.

The report of the Secretary of the Treasury will exhibit in detail the
state of the public finances and the condition of the various branches
of the public service administered by that Department of the Government.

The revenue of the country, levied almost insensibly to the taxpayer,
goes on from year to year, increasing beyond either the interests or the
prospective wants of the Government.

At the close of the fiscal year ending June 30, 1852, there remained in
the Treasury a balance of $14,632,136. The public revenue for the fiscal
year ending June 30, 1853, amounted to $58,931,865 from customs and to
$2,405,708 from public lands and other miscellaneous sources, amounting
together to $61,337,574, while the public expenditures for the same
period, exclusive of payments on account of the public debt, amounted to
$43,554,262, leaving a balance of $32,425,447 of receipts above
expenditures.

This fact of increasing surplus in the Treasury became the subject of
anxious consideration at a very early period of my Administration, and
the path of duty in regard to it seemed to me obvious and clear, namely:
First, to apply the surplus revenue to the discharge of the public debt
so far as it could judiciously be done, and, secondly, to devise means
for the gradual reduction of the revenue to the standard of the public
exigencies.

Of these objects the first has been in the course of accomplishment in a
manner and to a degree highly satisfactory. The amount of the public
debt of all classes was on the 4th of March, 1853, $69,190,037, payments
on account of which have been made since that period to the amount of
$12,703,329, leaving unpaid and in continuous course of liquidation the
sum of $56,486,708. These payments, although made at the market price of
the respective classes of stocks, have been effected readily and to the
general advantage of the Treasury, and have at the same time proved of
signal utility in the relief they have incidentally afforded to the
money market and to the industrial and commercial pursuits of the
country.

The second of the above-mentioned objects, that of the reduction of the
tariff, is of great importance, and the plan suggested by the Secretary
of the Treasury, which is to reduce the duties on certain articles and
to add to the free list many articles now taxed, and especially such as
enter into manufactures and are not largely, or at all, produced in the
country, is commended to your candid and careful consideration.

You will find in the report of the Secretary of the Treasury, also,
abundant proof of the entire adequacy of the present fiscal system to
meet all the requirements of the public service, and that, while
properly administered, it operates to the advantage of the community in
ordinary business relations.

I respectfully ask your attention to sundry suggestions of improvements
in the settlement of accounts, especially as regards the large sums of
outstanding arrears due to the Government, and of other reforms in the
administrative action of his Department which are indicated by the
Secretary; as also to the progress made in the construction of marine
hospitals, custom-houses, and of a new mint in California and assay
office in the city of New York, heretofore provided for by Congress, and
also to the eminently successful progress of the Coast Survey and of the
Light House Board.

Among the objects meriting your attention will be important
recommendations from the Secretaries of War and Navy. I am fully
satisfied that the Navy of the United States is not in a condition of
strength and efficiency commensurate with the magnitude of our
commercial and other interests, and commend to your especial attention
the suggestions on this subject made by the Secretary of the Navy. I
respectfully submit that the Army, which under our system must always be
regarded with the highest interest as a nucleus around which the
volunteer forces of the nation gather in the hour of danger, requires
augmentation, or modification, to adapt it to the present extended
limits and frontier relations of the country and the condition of the
Indian tribes in the interior of the continent, the necessity of which
will appear in the communications of the Secretaries of War and the
Interior.

In the administration of the Post-Office Department for the fiscal year
ending June 30, 1853, the gross expenditure was $7,982,756, and the
gross receipts during the same period $5,942,734, showing that the
current revenue failed to meet the current expenses of the Department by
the sum of $2,042,032. The causes which, under the present postal system
and laws, led inevitably to this result are fully explained by the
report of the Postmaster-General, one great cause being the enormous
rates the Department has been compelled to pay for mail service rendered
by railroad companies.

The exhibit in the report of the Postmaster-General of the income and
expenditures by mail steamers will be found peculiarly interesting and
of a character to demand the immediate action of Congress.

Numerous and flagrant frauds upon the Pension Bureau have been brought
to light within the last year, and in some instances merited punishments
inflicted; but, unfortunately, in others guilty parties have escaped,
not through the want of sufficient evidence to warrant a conviction, but
in consequence of the provisions of limitation in the existing laws.

From the nature of these claims, the remoteness of the tribunals to pass
upon them, and the mode in which the proof is of necessity furnished,
temptations to crime have been greatly stimulated by the obvious
difficulties of detection. The defects in the law upon this subject are
so apparent and so fatal to the ends of justice that your early action
relating to it is most desirable.

During the last fiscal year 9,819,411 acres of the public lands have
been surveyed and 10,363,891 acres brought into market. Within the same
period the sales by public purchase and private entry amounted to
1,083,495 acres; located under military bountys and warrants, 6,142,360
acres; located under other certificates, 9,427 acres; ceded to the
States as swamp lands, 16,684,253 acres; selected for railroad and other
objects under acts of Congress, 1,427,457 acres: total amount of lands
disposed of within the fiscal year, 25,346,992 acres, which is an
increase in quantity sold and located under land warrants and grants of
12,231, 818 acres over the fiscal year immediately preceding. The
quantity of land sold during the second and third quarters of 1852 was
334,451 acres; the amount received therefor was $623,687. The quantity
sold the second and third quarters of the year 1853 was 1,609,919 acres,
and the amount received therefor $2,226,876.

The whole number of land warrants issued under existing laws prior to
the 30th of September last was 266,042, of which there were outstanding
at that date 66,947. The quantity of land required to satisfy these
outstanding warrants is 4,778,120 acres. Warrants have been issued to
30th of September last under the act of 11th February, 1847, calling for
12,879,280 acres, under acts of September 28, 1850, and March 22, 1852,
calling for 12,505,360 acres, making a total of 25,384,640 acres.

It is believed that experience has verified the wisdom and justice of
the present system with regard to the public domain in most essential
particulars.

You will perceive from the report of the Secretary of the Interior that
opinions which have often been expressed in relation to the operation of
the land system as not being a source of revenue to the Federal Treasury
were erroneous. The net profits from the sale of the public lands to
June 30, 1853, amounted to the sum of $53,289,465.

I recommend the extension of the land system over the Territories of
Utah and New Mexico, with such modifications as their peculiarities may
require.

Regarding our public domain as chiefly valuable to provide homes for the
industrious and enterprising, I am not prepared to recommend any
essential change in the land system, except by modifications in favor of
the actual settler and an extension of the preemption principle in
certain cases, for reasons and on grounds which will be fully developed
in the reports to be laid before you.

Congress, representing the proprietors of the territorial domain and
charged especially with power to dispose of territory belonging to the
United States, has for a long course of years, beginning with the
Administration of Mr. Jefferson, exercised the power to construct roads
within the Territories, and there are so many and obvious distinctions
between this exercise of power and that of making roads within the
States that the former has never been considered subject to such
objections as apply to the latter; and such may now be considered the
settled construction of the power of the Federal Government upon the
subject.

Numerous applications have been and no doubt will continue to be made
for grants of land in aid of the construction of railways. It is not
believed to be within the intent and meaning of the Constitution that
the power to dispose of the public domain should be used otherwise than
might be expected from a prudent proprietor and therefore that grants of
land to aid in the construction of roads should be restricted to cases
where it would be for the interest of a proprietor under like
circumstances thus to contribute to the construction of these works. For
the practical operation of such grants thus far in advancing the
interests of the States in which the works are located, and at the same
time the substantial interests of all the other States, by enhancing the
value and promoting the rapid sale of the public domain, I refer you to
the report of the Secretary of the Interior. A careful examination,
however, will show that this experience is the result of a just
discrimination and will be far from affording encouragement to a
reckless or indiscriminate extension of the principle.

I commend to your favorable consideration the men of genius of our
country who by their inventions and discoveries in science and arts have
contributed largely to the improvements of the age without, in many
instances, securing for themselves anything like an adequate reward. For
many interesting details upon this subject I refer you to the
appropriate reports, and especially urge upon your early attention the
apparently slight, but really important, modifications of existing laws
therein suggested.

The liberal spirit which has so long marked the action of Congress in
relation to the District of Columbia will, I have no doubt, continue to
be manifested.

The erection of an asylum for the insane of the District of Columbia and
of the Army and Navy of the United States has been somewhat retarded by
the great demand for materials and labor during the past summer, but
full preparation for the reception of patients before the return of
another winter is anticipated; and there is the best reason to believe,
from the plan and contemplated arrangements which have been devised,
with the large experience furnished within the last few years in
relation to the nature and treatment of the disease, that it will prove
an asylum indeed to this most helpless and afflicted class of sufferers
and stand as a noble monument of wisdom and mercy. Under the acts of
Congress of August 31, 1852, and of March 3, 1853, designed to secure
for the cities of Washington and Georgetown an abundant supply of good
and wholesome water, it became my duty to examine the report and plans
of the engineer who had charge of the surveys under the act first named.
The best, if not the only, plan calculated to secure permanently the
object sought was that which contemplates taking the water from the
Great Falls of the Potomac, and consequently I gave to it my approval.

For the progress and present condition of this important work and for
its demands so far as appropriations are concerned I refer you to the
report of the Secretary of War.

The present judicial system of the United States has now been in
operation for so long a period of time and has in its general theory and
much of its details become so familiar to the country and acquired so
entirely the public confidence that if modified in any respect it should
only be in those particulars which may adapt it to the increased extent,
population, and legal business of the United States. In this relation
the organization of the courts is now confessedly inadequate to the
duties to be performed by them, in consequence of which the States of
Florida, Wisconsin, Iowa, Texas, and California, and districts of other
States, are in effect excluded from the full benefits of the general
system by the functions of the circuit court being devolved on the
district judges in all those States or parts of States. The spirit of
the Constitution and a due regard to justice require that all the States
of the Union should be placed on the same footing in regard to the
judicial tribunals. I therefore commend to your consideration this
important subject, which in my judgment demands the speedy action of
Congress. I will present to you, if deemed desirable, a plan which I am
prepared to recommend for the enlargement and modification of the
present judicial system.

The act of Congress establishing the Smithsonian Institution provided
that the President of the United States and other persons therein
designated should constitute an "establishment" by that name, and that
the members should hold stated and special meetings for the supervision
of the affairs of the Institution. The organization not having taken
place, it seemed to me proper that it should be effected without delay.
This has been done; and an occasion was thereby presented for inspecting
the condition of the Institution and appreciating its successful
progress thus far and its high promise of great and general usefulness.

I have omitted to ask your favorable consideration for the estimates of
works of a local character in twenty-seven of the thirty-one States,
amounting to $1,754,500, because, independently of the grounds which
have so often been urged against the application of the Federal revenue
for works of this character, inequality, with consequent injustice, is
inherent in the nature of the proposition, and because the plan has
proved entirely inadequate to the accomplishment of the objects sought.

The subject of internal improvements, claiming alike the interest and
good will of all, has, nevertheless, been the basis of much political
discussion and has stood as a deep-graven line of division between
statesmen of eminent ability and patriotism. The rule of strict
construction of all powers delegated by the States to the General
Government has arrayed itself from time to time against the rapid
progress of expenditures from the National Treasury on works of a local
character within the States. Memorable as an epoch in the history of
this subject is the message of President Jackson of the 27th of May,
1830, which met the system of internal improvements in its comparative
infancy; but so rapid had been its growth that the projected
appropriations in that year for works of this character had risen to the
alarming amount of more than $100,000,000

In that message the President admitted the difficulty of bringing back
the operations of the Government to the construction of the Constitution
set up in 1798, and marked it as an admonitory proof of the necessity of
guarding that instrument with sleepless vigilance against the authority
of precedents which had not the sanction of its most plainly defined
powers.

Our Government exists under a written compact between sovereign States,
uniting for specific objects and with specific grants to their general
agent. If, then, in the progress of its administration there have been
departures from the terms and intent of the compact, it is and will ever
be proper to refer back to the fixed standard which our fathers left us
and to make a stern effort to conform our action to it. It would seem
that the fact of a principle having been resisted from the first by many
of the wisest and most patriotic men of the Republic, and a policy
having provoked constant strife without arriving at a conclusion which
can be regarded as satisfactory to its most earnest advocates, should
suggest the inquiry whether there may not be a plan likely to be crowned
by happier results. Without perceiving any sound distinction or
intending to assert any principle as opposed to improvements needed for
the protection of internal commerce which does not equally apply to
improvements upon the seaboard for the protection of foreign commerce, I
submit to you whether it may not be safely anticipated that if the
policy were once settled against appropriations by the General
Government for local improvements for the benefit of commerce,
localities requiring expenditures would not, by modes and means clearly
legitimate and proper, raise the fund necessary for such constructions
as the safety or other interests of their commerce might require.

If that can be regarded as a system which in the experience of mere than
thirty years has at no time so commanded the public judgment as to give
it the character of a settled policy; which, though it has produced some
works of conceded importance, has been attended with an expenditure
quite disproportionate to their value and has resulted in squandering
large sums upon objects which have answered no valuable purpose, the
interests of all the States require it to be abandoned unless hopes may
be indulged for the future which find no warrant in the past.

With an anxious desire for the completion of the works which are
regarded by all good citizens with sincere interest, I have deemed it my
duty to ask at your hands a deliberate reconsideration of the question,
with a hope that, animated by a desire to promote the permanent and
substantial interests of the country, your wisdom may prove equal to the
task of devising and maturing a plan which, applied to this subject, may
promise something better than constant strife, the suspension of the
powers of local enterprise, the exciting of vain hopes, and the
disappointment of cherished expectations.

In expending the appropriations made by the last Congress several cases
have arisen in relation to works for the improvement of harbors which
involve questions as to the right of soil and jurisdiction, and have
threatened conflict between the authority of the State and General
Governments. The right to construct a breakwater, jetty, or dam would
seem necessarily to carry with it the power to protect and preserve such
constructions. This can only be effectually done by having jurisdiction
over the soil. But no clause of the Constitution is found on which to
rest the claim of the United States to exercise jurisdiction over the
soil of a State except that conferred by the eighth section of the first
article of the Constitution. It is, then, submitted whether, in all
cases where constructions are to be erected by the General Government,
the right of soil should not first be obtained and legislative provision
be made to cover all such cases. For the progress made in the
construction of roads within the Territories, as provided for in the
appropriations of the last Congress, I refer you to the report of the
Secretary of War.

There is one subject of a domestic nature which, from its intrinsic
importance and the many interesting questions of future policy which it
involves, can not fail to receive your early attention. I allude to the
means of communication by which different parts of the wide expanse of
our country are to be placed in closer connection for purposes both of
defense and commercial intercourse, and more especially such as
appertain to the communication of those great divisions of the Union
which lie on the opposite sides of the Rocky Mountains. That the
Government has not been unmindful of this heretofore is apparent from
the aid it has afforded through appropriations for mail facilities and
other purposes. But the general subject will now present itself under
aspects more imposing and more purely national by reason of the surveys
ordered by Congress, and now in the process of completion, for
communication by railway across the continent, and wholly within the
limits of the United States.

The power to declare war, to raise and support armies, to provide and
maintain a navy, and to call forth the militia to execute the laws,
suppress insurrections, and repel invasions was conferred upon Congress
as means to provide for the common defense and to protect a territory
and a population now widespread and vastly multiplied. As incidental to
and indispensable for the exercise of this power, it must sometimes be
necessary to construct military roads and protect harbors of refuge. To
appropriations by Congress for such objects no sound objection can be
raised. Happily for our country, its peaceful policy and rapidly
increasing population impose upon us no urgent necessity for
preparation, and leave but few trackless deserts between assailable
points and a patriotic people ever ready and generally able to protect
them. These necessary links the enterprise and energy of our people are
steadily and boldly struggling to supply. All experience affirms that
wherever private enterprise will avail it is most wise for the General
Government to leave to that and individual watchfulness the location and
execution of all means of communication.

The surveys before alluded to were designed to ascertain the most
practicable and economical route for a railroad from the river
Mississippi to the Pacific Ocean. Parties are now in the field making
explorations, where previous examinations had not supplied sufficient
data and where there was the best reason to hope the object sought might
be found. The means and time being both limited, it is not to be
expected that all the accurate knowledge desired will be obtained, but
it is hoped that much and important information will be added to the
stock previously possessed, and that partial, if not full, reports of
the surveys ordered will be received in time for transmission to the two
Houses of Congress on or before the first Monday in February next, as
required by the act of appropriation. The magnitude of the enterprise
contemplated has aroused and will doubtless continue to excite a very
general interest throughout the country. In its political, its
commercial, and its military bearings it has varied, great, and
increasing claims to consideration. The heavy expense, the great delay,
and, at times, fatality attending travel by either of the Isthmus routes
have demonstrated the advantage which would result from interterritorial
communication by such safe and rapid means as a railroad would supply.

These difficulties, which have been encountered in a period of peace,
would be magnified and still further increased in time of war. But
whilst the embarrassments already encountered and others under new
contingencies to be anticipated may serve strikingly to exhibit the
importance of such a work, neither these nor all considerations combined
can have an appreciable value when weighed against the obligation
strictly to adhere to the Constitution and faithfully to execute the
powers it confers.

Within this limit and to the extent of the interest of the Government
involved it would seem both expedient and proper if an economical and
practicable route shall be found to aid by all constitutional means in
the construction of a road which will unite by speedy transit the
populations of the Pacific and Atlantic States. To guard against
misconception, it should be remarked that although the power to
construct or aid in the construction of a road within the limits of a
Territory is not embarrassed by that question of jurisdiction which
would arise within the limits of a State, it is, nevertheless, held to
be of doubtful power and more than doubtful propriety, even within the
limits of a Territory, for the General Government to undertake to
administer the affairs of a railroad, a canal, or other similar
construction, and therefore that its connection with a work of this
character should be incidental rather than primary. I will only add at
present that, fully appreciating the magnitude of the subject and
solicitous that the Atlantic and Pacific shores of the Republic may be
bound together by inseparable ties of common interest, as well as of
common fealty and attachment to the Union, I shall be disposed, so far
as my own action is concerned, to follow the lights of the Constitution
as expounded and illustrated by those whose opinions and expositions
constitute the standard of my political faith in regard to the powers of
the Federal Government. It is, I trust, not necessary to say that no
grandeur of enterprise and no present urgent inducement promising
popular favor will lead me to disregard those lights or to depart from
that path which experience has proved to be safe, and which is now
radiant with the glow of prosperity and legitimate constitutional
progress. We can afford to wait, but we can not afford to overlook the
ark of our security.

It is no part of my purpose to give prominence to any subject which may
properly be regarded as set at rest by the deliberate judgment of the
people. But while the present is bright with promise and the future full
of demand and inducement for the exercise of active intelligence, the
past can never be without useful lessons of admonition and instruction.
If its dangers serve not as beacons, they will evidently fail to fulfill
the object of a wise design. When the grave shall have closed over all
who are now endeavoring to meet the obligations of duty, the year 1850
will be recurred to as a period filled with anxious apprehension. A
successful war had just terminated. Peace brought with it a vast
augmentation of territory. Disturbing questions arose bearing upon the
domestic institutions of one portion of the Confederacy and involving
the constitutional rights of the States. But notwithstanding differences
of opinion and sentiment which then existed in relation to details and
specific provisions, the acquiescence of distinguished citizens, whose
devotion to the Union can never be doubted, has given renewed vigor to
our institutions and restored a sense of repose and security to the
public mind throughout the Confederacy. That this repose is to suffer no
shock during my official term, if I have power to avert it, those who
placed me here may be assured. The wisdom of men who knew what
independence cost, who had put all at stake upon the issue of the
Revolutionary struggle, disposed of the subject to which I refer in the
only way consistent with the Union of these States and with the march of
power and prosperity which has made us what we are. It is a significant
fact that from the adoption of the Constitution until the officers and
soldiers of the Revolution had passed to their graves, or, through the
infirmities of age and wounds, had ceased to participate actively in
public affairs, there was not merely a quiet acquiescence in, but a
prompt vindication of, the constitutional rights of the States. The
reserved powers were scrupulously respected. No statesman put forth the
narrow views of casuists to justify interference and agitation, but the
spirit of the compact was regarded as sacred in the eye of honor and
indispensable for the great experiment of civil liberty, which,
environed by inherent difficulties, was yet borne forward in apparent
weakness by a power superior to all obstacles. There is no condemnation
which the voice of freedom will not pronounce upon us should we prove
faithless to this great trust. While men inhabiting different parts of
this vast continent can no more be expected to hold the same opinions or
entertain the same sentiments than every variety of climate or soil can
be expected to furnish the same agricultural products, they can unite in
a common object and sustain common principles essential to the
maintenance of that object. The gallant men of the South and the North
could stand together during the struggle of the Revolution; they could
stand together in the more trying period which succeeded the clangor of
arms. As their united valor was adequate to all the trials of the camp
and dangers of the field, so their united wisdom proved equal to the
greater task of founding upon a deep and broad basis institutions which
it has been our privilege to enjoy and will ever be our most sacred duty
to sustain. It is but the feeble expression of a faith strong and
universal to say that their sons, whose blood mingled so often upon the
same field during the War of 1812 and who have more recently borne in
triumph the flag of the country upon a foreign soil, will never permit
alienation of feeling to weaken the power of their united efforts nor
internal dissensions to paralyze the great arm of freedom, uplifted for
the vindication of self-government.

I have thus briefly presented such suggestions as seem to me especially
worthy of your consideration. In providing for the present you can
hardly fail to avail yourselves of the light which the experience of the
past casts upon the future.

The growth of our population has now brought us, in the destined career
of our national history, to a point at which it well behooves us to
expand our vision over the vast prospective.

The successive decennial returns of the census since the adoption of the
Constitution have revealed a law of steady, progressive development,
which may be stated in general terms as a duplication every quarter
century. Carried forward from the point already reached for only a short
period of time, as applicable to the existence of a nation, this law of
progress, if unchecked, will bring us to almost incredible results. A
large allowance for a diminished proportional effect of emigration would
not very materially reduce the estimate, while the increased average
duration of human life known to have already resulted from the
scientific and hygienic improvements of the past fifty years will tend
to keep up through the next fifty, or perhaps hundred, the same ratio of
growth which has been thus revealed in our past progress; and to the
influence of these causes may be added the influx of laboring masses
from eastern Asia to the Pacific side of our possessions, together with
the probable accession of the populations already existing in other
parts of our hemisphere, which within the period in question will feel
with yearly increasing force the natural attraction of so vast,
powerful, and prosperous a confederation of self-governing republics and
will seek the privilege of being admitted within its safe and happy
bosom, transferring with themselves, by a peaceful and healthy process
of incorporation, spacious regions of virgin and exuberant soil, which
are destined to swarm with the fast growing and fast-spreading millions
of our race.

These considerations seem fully to justify the presumption that the law
of population above stated will continue to act with undiminished effect
through at least the next half century, and that thousands of persons
who have already arrived at maturity and are now exercising the rights
of freemen will close their eyes on the spectacle of more than
100,000,000 of population embraced within the majestic proportions of
the American Union. It is not merely as an interesting topic of
speculation that I present these views for your consideration. They have
important practical bearings upon all the political duties we are called
upon to perform. Heretofore our system of government has worked on what
may be termed a miniature scale in comparison with the development which
it must thus assume within a future so near at hand as scarcely to be
beyond the present of the existing generation.

It is evident that a confederation so vast and so varied, both in
numbers and in territorial extent, in habits and in interests, could
only be kept in national cohesion by the strictest fidelity to the
principles of the Constitution as understood by those who have adhered
to the most restricted construction of the powers granted by the people
and the States. Interpreted and applied according to those principles,
the great compact adapts itself with healthy ease and freedom to an
unlimited extension of that benign system of federative self-government
of which it is our glorious and, I trust, immortal charter. Let us,
then, with redoubled vigilance, be on our guard against yielding to the
temptation of the exercise of doubtful powers, even under the pressure
of the motives of conceded temporary advantage and apparent temporary
expediency. The minimum of Federal government compatible with the
maintenance of national unity and efficient action in our relations with
the rest of the world should afford the rule and measure of construction
of our powers under the general clauses of the Constitution. A spirit of
strict deference to the sovereign rights and dignity of every State,
rather than a disposition to subordinate the States into a provincial
relation to the central authority, should characterize all our exercise
of the respective powers temporarily vested in us as a sacred trust from
the generous confidence of our constituents.

In like manner, as a manifestly indispensable condition of the
perpetuation of the Union and of the realization of that magnificent
national future adverted to, does the duty become yearly stronger and
clearer upon us, as citizens of the several States, to cultivate a
fraternal and affectionate spirit, language, and conduct in regard to
other States and in relation to the varied interests, institutions, and
habits of sentiment and opinion which may respectively characterize
them. Mutual forbearance, respect, and noninterference in our personal
action as citizens and an enlarged exercise of the most liberal
principles of comity in the public dealings of State with State, whether
in legislation or in the execution of laws, are the means to perpetuate
that confidence and fraternity the decay of which a mere political
union, on so vast a scale, could not long survive.

In still another point of view is an important practical duty suggested
by this consideration of the magnitude of dimensions to which our
political system, with its corresponding machinery of government, is so
rapidly expanding. With increased vigilance does it require us to
cultivate the cardinal virtues of public frugality and official
integrity and purity. Public affairs ought to be so conducted that a
settled conviction shall pervade the entire Union that nothing short of
the highest tone and standard of public morality marks every part of the
administration and legislation of the General Government. Thus will the
federal system, whatever expansion time and progress may give it,
continue more and more deeply rooted in the love and confidence of the
people.

That wise economy which is as far removed from parsimony as from corrupt
and corrupting extravagance; that single regard for the public good
which will frown upon all attempts to approach the Treasury with
insidious projects of private interest cloaked under public pretexts;
that sound fiscal administration which, in the legislative department,
guards against the dangerous temptations incident to overflowing
revenue, and, in the executive, maintains an unsleeping watchfulness
against the tendency of all national expenditure to extravagance, while
they are admitted elementary political duties, may, I trust, be deemed
as properly adverted to and urged in view of the more impressive sense
of that necessity which is directly suggested by the considerations now
presented.

Since the adjournment of Congress the Vice-President of the United
States has passed from the scenes of earth, without having entered upon
the duties of the station to which he had been called by the voice of
his countrymen. Having occupied almost continuously for more than thirty
years a seat in one or the other of the two Houses of Congress, and
having by his singular purity and wisdom secured unbounded confidence
and universal respect, his failing health was watched by the nation with
painful solicitude. His loss to the country, under all the
circumstances, has been justly regarded as irreparable.

In compliance with the act of Congress of March 2, 1853, the oath of
office was administered to him on the 24th of that month at Ariadne
estate, near Matanzas, in the island of Cuba; but his strength gradually
declined, and was hardly sufficient to enable him to return to his home
in Alabama, where, on the 18th day of April, in the most calm and
peaceful way, his long and eminently useful career was terminated.
Entertaining unlimited confidence in your intelligent and patriotic
devotion to the public interest, and being conscious of no motives on my
part which are not inseparable from the honor and advancement of my
country, I hope it may be my privilege to deserve and secure not only
your cordial cooperation in great public measures, but also those
relations of mutual confidence and regard which it is always so
desirable to cultivate between members of coordinate branches of the
Government.

***

State of the Union Address
Franklin Pierce
December 4, 1854

Fellow-Citizens of the Senate and of the House of Representatives:

The past has been an eventful year, and will be hereafter referred to as
a marked epoch in the history of the world. While we have been happily
preserved from the calamities of war, our domestic prosperity has not
been entirely uninterrupted. The crops in portions of the country have
been nearly cut off. Disease has prevailed to a greater extent than
usual, and the sacrifice of human life through casualties by sea and
land is without parallel. But the pestilence has swept by, and restored
salubrity invites the absent to their homes and the return of business
to its ordinary channels. If the earth has rewarded the labor of the
husbandman less bountifully than in preceding seasons, it has left him
with abundance for domestic wants and a large surplus for exportation.
In the present, therefore, as in the past, we find ample grounds for
reverent thankfulness to the God of grace and providence for His
protecting care and merciful dealings with us as a people.

Although our attention has been arrested by painful interest in passing
events, yet our country feels no more than the slight vibrations of the
convulsions which have shaken Europe. As individuals we can not repress
sympathy with human suffering nor regret for the causes which produce
it; as a nation we are reminded that whatever interrupts the peace or
checks the prosperity of any part of Christendom tends more or less to
involve our own. The condition of States is not unlike that of
individuals; they are mutually dependent upon each other. Amicable
relations between them and reciprocal good will are essential for the
promotion of whatever is desirable in their moral, social, and political
condition. Hence it has been my earnest endeavor to maintain peace and
friendly intercourse with all nations.

The wise theory of this Government, so early adopted and steadily
pursued, of avoiding all entangling alliances has hitherto exempted it
from many complications in which it would otherwise have become
involved. Notwithstanding this our clearly defined and well-sustained
course of action and our geographical position, so remote from Europe,
increasing disposition has been manifested by some of its Governments to
supervise and in certain respects to direct our foreign policy. In plans
for adjusting the balance of power among themselves they have assumed to
take us into account, and would constrain us to conform our conduct to
their views. One or another of the powers of Europe has from time to
time undertaken to enforce arbitrary regulations contrary in many
respects to established principles of international law. That law the
United States have in their foreign intercourse uniformly respected and
observed, and they can not recognize any such interpolations therein as
the temporary interests of others may suggest. They do not admit that
the sovereigns of one continent or of a particular community of states
can legislate for all others.

Leaving the transatlantic nations to adjust their political system in
the way they may think best for their common welfare, the independent
powers of this continent may well assert the right to be exempt from all
annoying interference on their part. Systematic abstinence from intimate
political connection with distant foreign nations does not conflict with
giving the widest range to our foreign commerce. This distinction, so
clearly marked in history, seems to have been overlooked or disregarded
by some leading foreign states. Our refusal to be brought within and
subjected to their peculiar system has, I fear, created a jealous
distrust of our conduct and induced on their part occasional acts of
disturbing effect upon our foreign relations. Our present attitude and
past course give assurances, which should not be questioned, that our
purposes are not aggressive nor threatening to the safety and welfare of
other nations. Our military establishment in time of peace is adapted to
maintain exterior defenses and to preserve order among the aboriginal
tribes within the limits of the Union. Our naval force is intended only
for the protection of our citizens abroad and of our commerce, diffused,
as it is, over all the seas of the globe. The Government of the United
States, being essentially pacific in policy, stands prepared to repel
invasion by the voluntary service of a patriotic people, and provides no
permanent means of foreign aggression. These considerations should allay
all apprehension that we are disposed to encroach on the rights or
endanger the security of other states.

Some European powers have regarded with disquieting concern the
territorial expansion of the United States. This rapid growth has
resulted from the legitimate exercise of sovereign rights belonging
alike to all nations, and by many liberally exercised. Under such
circumstances it could hardly have been expected that those among them
which have within a comparatively recent period subdued and absorbed
ancient kingdoms, planted their standards on every continent, and now
possess or claim the control of the islands of every ocean as their
appropriate domain would look with unfriendly sentiments upon the
acquisitions of this country, in every instance honorably obtained, or
would feel themselves justified in imputing our advancement to a spirit
of aggression or to a passion for political predominance. Our foreign
commerce has reached a magnitude and extent nearly equal to that of the
first maritime power of the earth, and exceeding that of any other. Over
this great interest, in which not only our merchants, but all classes of
citizens, at least indirectly, are concerned, it is the duty of the
executive and legislative branches of the Government to exercise a
careful supervision and adopt proper measures for its protection. The
policy which I had in view in regard to this interest embraces its
future as well as its present security. Long experience has shown that,
in general, when the principal powers of Europe are engaged in war the
rights of neutral nations are endangered. This consideration led, in the
progress of the War of our Independence, to the formation of the
celebrated confederacy of armed neutrality, a primary object of which
was to assert the doctrine that free ships make free goods, except in
the case of articles contraband of war--a doctrine which from the very
commencement of our national being has been a cherished idea of the
statesmen of this country. At one period or another every maritime power
has by some solemn treaty stipulation recognized that principle, and it
might have been hoped that it would come to be universally received and
respected as a rule of international law. But the refusal of one power
prevented this, and in the next great war which ensued--that of the
French Revolution--it failed to be respected among the belligerent
States of Europe. Notwithstanding this, the principle is generally
admitted to be a sound and salutary one, so much so that at the
commencement of the existing war in Europe Great Britain and France
announced their purpose to observe it for the present; not, however, as
a recognized international fight, but as a mere concession for the time
being. The cooperation, however, of these two powerful maritime nations
in the interest of neutral rights appeared to me to afford an occasion
inviting and justifying on the part of the United States a renewed
effort to make the doctrine in question a principle of international
law, by means of special conventions between the several powers of
Europe and America. Accordingly, a proposition embracing not only the
rule that free ships make free goods, except contraband articles, but
also the less contested one that neutral property other than contraband,
though on board enemy's ships, shall be exempt from confiscation, has
been submitted by this Government to those of Europe and America.

Russia acted promptly in this matter, and a convention was concluded
between that country and the United States providing for the observance
of the principles announced, not only as between themselves, but also as
between them and all other nations which shall enter into like
stipulations. None of the other powers have as yet taken final action on
the subject. I am not aware, however, that any objection to the proposed
stipulations has been made, but, on the contrary, they are acknowledged
to be essential to the security of neutral commerce, and the only
apparent obstacle to their general adoption is in the possibility that
it may be encumbered by inadmissible conditions. The King of the Two
Sicilies has expressed to our minister at Naples his readiness to concur
in our proposition relative to neutral rights and to enter into a
convention on that subject.

The King of Prussia entirely approves of the project of a treaty to the
same effect submitted to him, but proposes an additional article
providing for the renunciation of privateering. Such an article, for
most obvious reasons, is much desired by nations having naval
establishments large in proportion to their foreign commerce. If it were
adopted as an international rule, the commerce of a nation having
comparatively a small naval force would be very much at the mercy of its
enemy in case of war with a power of decided naval superiority. The bare
statement of the condition in which the United States would be placed,
after having surrendered the right to resort to privateers, in the event
of war with a belligerent of naval supremacy will show that this
Government could never listen to such a proposition. The navy of the
first maritime power in Europe is at least ten times as large as that of
the United States. The foreign commerce of the two countries is nearly
equal, and about equally exposed to hostile depredations. In war between
that power and the United States, without resort on our part to our
mercantile marine the means of our enemy to inflict injury upon our
commerce would be tenfold greater than ours to retaliate. We could not
extricate our country from this unequal condition, with such an enemy,
unless we at once departed from our present peaceful policy and became a
great naval power. Nor would this country be better situated in war with
one of the secondary naval powers. Though the naval disparity would be
less, the greater extent and more exposed condition of our widespread
commerce would give any of them a like advantage over us.

The proposition to enter into engagements to forego a resort to
privateers in case this country should be forced into war with a great
naval power is not entitled to more favorable consideration than would
be a proposition to agree not to accept the services of volunteers for
operations on land. When the honor or the rights of our country require
it to assume a hostile attitude, it confidently relies upon the
patriotism of its citizens, not ordinarily devoted to the military
profession, to augment the Army and the Navy so as to make them fully
adequate to the emergency which calls them into action. The proposal to
surrender the right to employ privateers is professedly founded upon the
principle that private property of unoffending noncombatants, though
enemies, should be exempt from the ravages of war; but the proposed
surrender goes but little way in carrying out that principle, which
equally requires that such private property should not be seized or
molested by national ships of war. Should the leading powers of Europe
concur in proposing as a rule of international law to exempt private
property upon the ocean from seizure by public armed cruisers as well as
by privateers, the United States will readily meet them upon that broad
ground.

Since the adjournment of Congress the ratifications of the treaty
between the United States and Great Britain relative to coast fisheries
and to reciprocal trade with the British North American Provinces have
been exchanged, and some of its anticipated advantages are already
enjoyed by us, although its full execution was to abide certain acts of
legislation not yet fully performed. So soon as it was ratified Great
Britain opened to our commerce the free navigation of the river St.
Lawrence and to our fishermen unmolested access to the shores and bays,
from which they had been previously excluded, on the coasts of her North
American Provinces; in return for which she asked for the introduction
free of duty into the ports of the United States of the fish caught on
the same coast by British fishermen. This being the compensation
stipulated in the treaty for privileges of the highest importance and
value to the United States, which were thus voluntarily yielded before
it became effective, the request seemed to me to be a reasonable one;
but it could not be acceded to from want of authority to suspend our
laws imposing duties upon all foreign fish. In the meantime the Treasury
Department issued a regulation for ascertaining the duties paid or
secured by bonds on fish caught on the coasts of the British Provinces
and brought to our markets by British subjects after the fishing grounds
had been made fully accessible to the citizens of the United States. I
recommend to your favorable consideration a proposition, which will be
submitted to you, for authority to refund the duties and cancel the
bonds thus received. The Provinces of Canada and New Brunswick have also
anticipated the full operation of the treaty by legislative
arrangements, respectively, to admit free of duty the products of the
United States mentioned in the free list of the treaty; and an
arrangement similar to that regarding British fish has been made for
duties now chargeable on the products of those Provinces enumerated in
the same free list and introduced therefrom into the United States, a
proposition for refunding which will, in my judgment, be in like manner
entitled to your favorable consideration.

There is difference of opinion between the United States and Great
Britain as to the boundary line of the Territory of Washington adjoining
the British possessions on the Pacific, which has already led to
difficulties on the part of the citizens and local authorities of the
two Governments I recommend that provision he made for a commission, to
be joined by one on the part of Her Britannic Majesty, for the purpose
of running and establishing the line in controversy. Certain
stipulations of the third and fourth articles of the treaty concluded by
the United States and Great Britain in 1846, regarding possessory rights
of the Hudsons Bay Company and property of the Pugets Sound Agricultural
Company, have given rise to serious disputes, and it is important to all
concerned that summary means of settling them amicably should be
devised. I have reason to believe that an arrangement can be made on
just terms for the extinguishment of the rights in question, embracing
also the right of the Hudsons Bay Company to the navigation of the river
Columbia; and I therefore suggest to your consideration the expediency
of making a contingent appropriation for that purpose.

France was the early and efficient ally of the United States in their
struggle for independence. From that time to the present, with
occasional slight interruptions, cordial relations of friendship have
existed between the Governments and people of the two countries. The
kindly sentiments cherished alike by both nations have led to extensive
social and commercial intercourse, which I trust will not be interrupted
or checked by any casual event of an apparently unsatisfactory
character. The French consul at San Francisco was not long since brought
into the United States district court at that place by compulsory
process as a witness in favor of another foreign consul, in violation,
as the French Government conceives, of his privileges under our consular
convention with France. There being nothing in the transaction which
could imply any disrespect to France or its consul, such explanation has
been made as, I hope, will be satisfactory. Subsequently
misunderstanding arose on the subject of the French Government having,
as it appeared, abruptly excluded the American minister to Spain from
passing through France on his way from London to Madrid. But that
Government has unequivocally disavowed any design to deny the right of
transit to the minister of the United States, and after explanations to
this effect he has resumed his journey and actually returned through
France to Spain. I herewith lay before Congress the correspondence on
this subject between our envoy at Paris and the minister of foreign
relations of the French Government.

The position of our affairs with Spain remains as at the close of the
last session. Internal agitation, assuming very nearly the character of
political revolution, has recently convulsed that country. The late
ministers were violently expelled from power, and men of very different
views in relation to its internal affairs have succeeded. Since this
change there has been no propitious opportunity to resume and press on
negotiations for the adjustment of serious questions of difficulty
between the Spanish Government and the United States. There is reason to
believe that our minister will find the present Government more
favorably inclined than the preceding to comply with our just demands
and to make suitable arrangements for restoring harmony and preserving
peace between the two countries.

Negotiations are pending with Denmark to discontinue the practice of
levying tolls on our vessels and their cargoes passing through the
Sound. I do not doubt that we can claim exemption therefrom as a matter
of right. It is admitted on all hands that this exaction is sanctioned,
not by the general principles of the law of nations, but only by special
conventions which most of the commercial nations have entered into with
Denmark. The fifth article of our treaty of 1826 with Denmark provides
that there shall not be paid on the vessels of the United States and
their cargoes when passing through the Sound higher duties than those of
the most favored nations. This may be regarded as an implied agreement
to submit to the tolls during the continuance of the treaty, and
consequently may embarrass the assertion of our right to be released
therefrom. There are also other provisions in the treaty which ought to
be modified. It was to remain in force for ten years and until one year
after either party should give notice to the other of intention to
terminate it. I deem it expedient that the contemplated notice should be
given to the Government of Denmark.

The naval expedition dispatched about two years since for the purpose of
establishing relations with the Empire of Japan has been ably and
skillfully conducted to a successful termination by the officer to whom
it was intrusted. A treaty opening certain of the ports of that populous
country has been negotiated, and in order to give full effect thereto it
only remains to exchange ratifications and adopt requisite commercial
regulations.

The treaty lately concluded between the United States and Mexico settled
some of our most embarrassing difficulties with that country, but
numerous claims upon it for wrongs and injuries to our citizens remained
unadjusted, and many new cases have been recently added to the former
list of grievances. Our legation has been earnest in its endeavors to
obtain from the Mexican Government a favorable consideration of these
claims, but hitherto without success. This failure is probably in some
measure to be ascribed to the disturbed condition of that country. It
has been my anxious desire to maintain friendly relations with the
Mexican Republic and to cause its rights and territories to be
respected, not only by our citizens, but by foreigners who have resorted
to the United States for the purpose of organizing hostile expeditions
against some of the States of that Republic. The defenseless condition
in which its frontiers have been left has stimulated lawless adventurers
to embark in these enterprises and greatly increased the difficulty of
enforcing our obligations of neutrality. Regarding it as my solemn duty
to fulfill efficiently these obligations not only toward Mexico, but
other foreign nations, I have exerted all the powers with which I am
invested to defeat such proceedings and bring to punishment those who by
taking a part therein violated our laws. The energy and activity of our
civil and military authorities have frustrated the designs of those who
meditated expeditions of this character except in two instances. One of
these, composed of foreigners, was at first countenanced and aided by
the Mexican Government itself, it having been deceived as to their real
object. The other, small in number, eluded the vigilance of the
magistrates at San Francisco and succeeded in reaching the Mexican
territories; but the effective measures taken by this Government
compelled the abandonment of the undertaking.

The commission to establish the new line between the United States and
Mexico, according to the provisions of the treaty of the 30th of
December last, has been organized, and the work is already commenced.

Our treaties with the Argentine Confederation and with the Republics of
Uruguay and Paraguay secure to us the free navigation of the river La
Plata and some of its larger tributaries, but the same success has not
attended our endeavors to open the Amazon. The reasons in favor of the
free use of that river I had occasion to present fully in a former
message, and, considering the cordial relations which have long existed
between this Government and Brazil, it may be expected that pending
negotiations will eventually reach a favorable result.

Convenient means of transit between the several parts of a country are
not only desirable for the objects of commercial and personal
communication, but essential to its existence under one government.
Separated, as are the Atlantic and Pacific coasts of the United States,
by the whole breadth of the continent, still the inhabitants of each are
closely bound together by community of origin and institutions and by
strong attachment to the Union. Hence the constant and increasing
intercourse and vast interchange of commercial productions between these
remote divisions of the Republic. At the present time the most
practicable and only, commodious routes for communication between them
are by the way of the isthmus of Central America. It is the duty of the
Government to secure these avenues against all danger of interruption.

In relation to Central America, perplexing questions existed between the
United States and Great Britain at the time of the cession of
California. These, as well as questions which subsequently arose
concerning interoceanic communication across the Isthmus, were, as it
was supposed, adjusted by the treaty of April 19, 1850, but,
unfortunately, they have been reopened by serious misunderstanding as to
the import of some or its provisions, a readjustment of which is now
under consideration. Our minister at London has made strenuous efforts
to accomplish this desirable object, but has not yet found it possible
to bring the negotiations to a termination.

As incidental to these questions, I deem it proper to notice an
occurrence which happened in Central America near the close of the last
session of Congress. So soon as the necessity was perceived of
establishing interoceanic communications across the Isthmus a company
was organized, under the authority of the State of Nicaragua, but
composed for the most part of citizens of the United States, for the
purpose of opening such a transit way by the river San Juan and Lake
Nicaragua, which soon became an eligible and much used route in the
transportation of our citizens and their property between the Atlantic
and Pacific. Meanwhile, and in anticipation of the completion and
importance of this transit way, a number of adventurers had taken
possession of the old Spanish port at the mouth of the river San Juan in
open defiance of the State or States of Central America, which upon
their becoming independent had rightfully succeeded to the local
sovereignty and jurisdiction of Spain. These adventurers undertook to
change the name of the place from San Juan del Norte to Greytown, and
though at first pretending to act as the subjects of the fictitious
sovereign of the Mosquito Indians, they subsequently repudiated the
control of any power whatever, assumed to adopt a distinct political
organization, and declared themselves an independent sovereign state. If
at some time a faint hope was entertained that they might become a
stable and respectable community, that hope soon vanished. They
proceeded to assert unfounded claims to civil jurisdiction over Punta
Arenas, a position on the opposite side of the river San Juan, which was
in possession, under a title wholly independent of them, of citizens of
the United States interested in the Nicaragua Transit Company, and which
was indispensably necessary to the prosperous operation of that route
across the Isthmus. The company resisted their groundless claims,
whereupon they proceeded to destroy some of its buildings and attempted
violently to dispossess it.

At a later period they organized a strong force for the purpose of
demolishing the establishment at Punta Arenas, but this mischievous
design was defeated by the interposition of one of our ships of war at
that time in the harbor of San Juan. Subsequently to this, in May last,
a body of men from Greytown crossed over to Punta Arenas, arrogating
authority to arrest on the charge of murder a captain of one of the
steamboats of the Transit Company. Being well aware that the claim to
exercise jurisdiction there would be resisted then, as it had been on
previous occasions, they went prepared to assert it by force of arms.
Our minister to Central America happened to be present on that occasion.
Believing that the captain of the steamboat was innocent (for he
witnessed the transaction on which the charge was founder), and
believing also that the intruding party, having no jurisdiction over the
place where they proposed to make the arrest, would encounter desperate
resistance if they persisted in their purpose, he interposed,
effectually, to prevent violence and bloodshed. The American minister
afterwards visited Greytown, and whilst he was there a mob, including
certain of the so-called public functionaries of the place, surrounded
the house in which he was, avowing that they had come to arrest him by
order of some person exercising the chief authority. While parleying
with them he was wounded by a missile from the crowd. A boat dispatched
from the American steamer Northern Light to release him from the
perilous situation in which he was understood to be was fired into by
the town guard and compelled to return. These incidents, together with
the known character of the population of Greytown and their excited
state, induced just apprehensions that the lives and property of our
citizens at Punta Arenas would be in imminent danger after the departure
of the steamer, with her passengers, for New York, unless a guard was
left for their protection. For this purpose, and in order to insure the
safety of passengers and property passing over the route, a temporary
force was organized, at considerable expense to the United States, for
which provision was made at the last session of Congress.

This pretended community, a heterogeneous assemblage gathered from
various countries, and composed for the most part of blacks and persons
of mixed blood, had previously given other indications of mischievous
and dangerous propensities. Early in the same month property was
clandestinely abstracted from the depot of the Transit Company and taken
to Greytown. The plunderers obtained shelter there and their pursuers
were driven back by its people, who not only protected the wrongdoers
and shared the plunder, but treated with rudeness and violence those who
sought to recover their property.

Such, in substance, are the facts submitted to my consideration, and
proved by trustworthy evidence. I could not doubt that the case demanded
the interposition of this Government. Justice required that reparation
should be made for so many and such gross wrongs, and that a course of
insolence and plunder, tending directly to the insecurity of the lives
of numerous travelers and of the rich treasure belonging to our citizens
passing over this transit way, should be peremptorily arrested. Whatever
it might be in other respects, the community in question, in power to do
mischief, was not despicable. It was well provided with ordnance, small
arms, and ammunition, and might easily seize on the unarmed boats,
freighted with millions of property, which passed almost daily within
its reach. It did not profess to belong to any regular government, and
had, in fact, no recognized dependence on or connection with anyone to
which the United States or their injured citizens might apply for
redress or which could be held responsible in any way for the outrages
committed. Not standing before the world in the attitude of an organized
political society, being neither competent to exercise the rights nor to
discharge the obligations of a government, it was, in fact, a marauding
establishment too dangerous to be disregarded and too guilty to pass
unpunished, and yet incapable of being treated in any other way than as
a piratical resort of outlaws or a camp of savages depredating on
emigrant trains or caravans and the frontier settlements of civilized
states.

Seasonable notice was given to the people of Greytown that this
Government required them to repair the injuries they had done to our
citizens and to make suitable apology for their insult of our minister,
and that a ship of war would be dispatched thither to enforce compliance
with these demands. But the notice passed unheeded. Thereupon a
commander of the Navy, in charge of the sloop of war Cyane, was ordered
to repeat the demands and to insist upon a compliance therewith. Finding
that neither the populace nor those assuming to have authority over them
manifested any disposition to make the required reparation, or even to
offer excuse for their conduct, he warned them by a public proclamation
that if they did not give satisfaction within a time specified he would
bombard the town. By this procedure he afforded them opportunity to
provide for their personal safety. To those also who desired to avoid
loss of property in the punishment about to be inflicted on the
offending town he furnished the means of removing their effects by the
boats of his own ship and of a steamer which he procured and tendered to
them for that purpose. At length, perceiving no disposition on the part
of the town to comply with his requisitions, he appealed to the
commander of Her Britannic Majesty's schooner Bermuda, who was seen to
have intercourse and apparently much influence with the leaders among
them, to interpose and persuade them to take some course calculated to
save the necessity of resorting to the extreme measure indicated in his
proclamation; but that officer, instead of acceding to the request, did
nothing more than to protest against the contemplated bombardment. No
steps of any sort were taken by the people to give the satisfaction
required. No individuals, if any there were, who regarded themselves as
not responsible for the misconduct of the community adopted any means to
separate themselves from the fate of the guilty. The several charges on
which the demands for redress were founded had been publicly known to
all for some time, and were again announced to them. They did not deny
any of these charges; they offered no explanation, nothing in
extenuation of their conduct, but contumaciously refused to hold any
intercourse with the commander of the Cyane. By their obstinate silence
they seemed rather desirous to provoke chastisement than to escape it.
There is ample reason to believe that this conduct of wanton defiance on
their part is imputable chiefly to the delusive idea that the American
Government would be deterred from punishing them through fear of
displeasing a formidable foreign power, which they presumed to think
looked with complacency upon their aggressive and insulting deportment
toward the United States. The Cyane at length fired upon the town.
Before much injury had been done the fire was twice suspended in order
to afford opportunity for an arrangement, but this was declined. Most of
the buildings of the place, of little value generally, were in the
sequel destroyed, but, owing to the considerate precautions taken by our
naval commander, there was no destruction of life.

When the Cyane was ordered to Central America, it was confidently hoped
and expected that no occasion would arise for "a resort to violence and
destruction of property and loss of life." Instructions to that effect
were given to her commander; and no extreme act would have been
requisite had not the people themselves, by their extraordinary conduct
in the affair, frustrated all the possible mild measures for obtaining
satisfaction. A withdrawal from the place, the object of his visit
entirely defeated, would under the circumstances in which the commander
of the Cyane found himself have been absolute abandonment of all claim
of our citizens for indemnification and submissive acquiescence in
national indignity. It would have encouraged in these lawless men a
spirit of insolence and rapine most dangerous to the lives and property
of our citizens at Punta Arenas, and probably emboldened them to grasp
at the treasures and valuable merchandise continually passing over the
Nicaragua route. It certainly would have been most satisfactory to me if
the objects of the Cyane's mission could have been consummated without
any act of public force, but the arrogant contumacy of the offenders
rendered it impossible to avoid the alternative either to break up their
establishment or to leave them impressed with the idea that they might
persevere with impunity in a career of insolence and plunder.

This transaction has been the subject of complaint on the part of some
foreign powers, and has been characterized with more of harshness than
of justice. If comparisons were to be instituted, it would not be
difficult to present repeated instances in the history of states
standing in the very front of modern civilization where communities far
less offending and more defenseless than Greytown have been chastised
with much greater severity, and where not cities only have been laid in
ruins, but human life has been recklessly sacrificed and the blood of
the innocent made profusely to mingle with that of the guilty.

Passing from foreign to domestic affairs, your attention is naturally
directed to the financial condition of the country, always a subject of
general interest. For complete and exact information regarding the
finances and the various branches of the public service connected
therewith I refer you to the report of the Secretary of the Treasury,
from which it will appear that the amount of revenue during the last
fiscal year from all sources was $73,549,705, and that the public
expenditures for the same period, exclusive of payments on account of
the public debt, amounted to $51, 018,249. During the same period the
payments made in redemption of the public debt, including interest and
premium, amounted to $24,336,380. To the sum total of the receipts of
that year is to be added a balance remaining in the Treasury at the
commencement thereof, amounting to $21,942,892; and at the close of the
same year a corresponding balance, amounting to $20,137,967, of receipts
above expenditures also remained in the Treasury. Although, in the
opinion of the Secretary of the Treasury, the receipts of the current
fiscal year are not likely to equal in amount those of the last, yet
they will undoubtedly exceed the amount of expenditures by at least
$15,000,000. I shall therefore continue to direct that the surplus
revenue be applied, so far as it can be judiciously and economically
done, to the reduction of the public debt, the amount of which at the
commencement of the last fiscal year was $67,340,628; of which there had
been paid on the 20th day of November, 1854, the sum of $22,365,172,
leaving a balance of outstanding public debt of only $44,975,456,
redeemable at different periods within fourteen years. There are also
remnants of other Government stocks, most of which are already due, and
on which the interest has ceased, but which have not yet been presented
for payment, amounting to $233,179. This statement exhibits the fact
that the annual income of the Government greatly exceeds the amount of
its public debt, which latter remains unpaid only because the time of
payment has not yet matured, and it can not be discharged at once except
at the option of public creditors, who prefer to retain the securities
of the United States; and the other fact, not less striking, that the
annual revenue from all sources exceeds by many millions of dollars the
amount needed for a prudent and economical administration of the
Government.

The estimates presented to Congress from the different Executive
Departments at the last session amounted to $38,406,581 and the
appropriations made to the sum of $58,116,958. Of this excess of
appropriations over estimates, however, more than twenty millions was
applicable to extraordinary objects, having no reference to the usual
annual expenditures. Among these objects was embraced ten millions to
meet the third article of the treaty between the United States and
Mexico; so that, in fact, for objects of ordinary expenditure the
appropriations were limited to considerably less than $40,000,000. I
therefore renew my recommendation for a reduction of the duties on
imports. The report of the Secretary of the Treasury presents a series
of tables showing the operation of the revenue system for several
successive years; and as the general principle of reduction of duties
with a view to revenue, and not protection, may now be regarded as the
settled policy of the country, I trust that little difficulty will be
encountered in settling the details of a measure to that effect.

In connection with this subject I recommend a change in the laws, which
recent experience has shown to be essential to the protection of the
Government. There is no express provision of law requiring the records
and papers of a public character of the several officers of the
Government to be left in their offices for the use of their successors,
nor any provision declaring it felony on their part to make false
entries in the books or return false accounts. In the absence of such
express provision by law, the outgoing officers in many instances have
claimed and exercised the right to take into their own possession
important books and papers, on the ground that these were their private
property, and have placed them beyond the reach of the Government.
Conduct of this character, brought in several instances to the notice of
the present Secretary of the Treasury, naturally awakened his suspicion,
and resulted in the disclosure that at four ports--namely, Oswego,
Toledo, Sandusky, and Milwaukee--the Treasury had, by false entries,
been defrauded within the four years next preceding March, 1853, of the
sum of $198,000. The great difficulty with which the detection of these
frauds has been attended, in consequence of the abstraction of books and
papers by the retiring officers, and the facility with which similar
frauds in the public service may be perpetrated render the necessity of
new legal enactments in the respects above referred to quite obvious.
For other material modifications of the revenue laws which seem to me
desirable, I refer you to the report of the Secretary of the Treasury.
That report and the tables which accompany it furnish ample proofs of
the solid foundation on which the financial security of the country
rests and of the salutary influence of the independent-treasury system
upon commerce and all monetary operations.

The experience of the last year furnishes additional reasons, I regret
to say, of a painful character, for the recommendation heretofore made
to provide for increasing the military force employed in the Territory
inhabited by the Indians. The settlers-on the frontier have suffered
much from the incursions of predatory bands, and large parties of
emigrants to our Pacific possessions have been massacred with impunity.
The recurrence of such scenes can only be prevented by teaching these
wild tribes the power of and their responsibility to the United States.
From the garrisons of our frontier posts it is only possible to detach
troops in small bodies; and though these have on all occasions displayed
a gallantry and a stern devotion to duty which on a larger field would
have commanded universal admiration, they have usually suffered severely
in these conflicts with superior numbers, and have sometimes been
entirely sacrificed. All the disposable force of the Army is already
employed on this service, and is known to be wholly inadequate to the
protection which should be afforded. The public mind of the country has
been recently shocked by savage atrocities committed upon defenseless
emigrants and border settlements, and hardly less by the unnecessary
destruction of valuable lives where inadequate detachments of troops
have undertaken to furnish the needed aid. Without increase of the
military force these scenes will be repeated, it is to be feared, on a
larger scale and with more disastrous consequences. Congress, I am sure,
will perceive that the plainest duties and responsibilities of
Government are involved in this question, and I doubt not that prompt
action may be confidently anticipated when delay must be attended by
such fearful hazards.

The bill of the last session providing for an increase of the pay of the
rank and file of the Army has had beneficial results, not only in
facilitating enlistments, but in obvious improvement in the class of men
who enter the service. I regret that corresponding consideration was not
bestowed on the officers, who, in view of their character and services
and the expenses to which they are necessarily subject, receive at
present what is, in my judgment, inadequate compensation.

The valuable services constantly rendered by the Army and its
inestimable importance as the nucleus around which the volunteer forces
of the nation can promptly gather in the hour of danger, sufficiently
attest the wisdom of maintaining a military peace establishment; but the
theory of our system and the wise practice under it require that any
proposed augmentation in time of peace be only commensurate with our
extended limits and frontier relations. While scrupulously adhering to
this principle, I find in existing circumstances a necessity for
increase of our military force, and it is believed that four new
regiments, two of infantry and two of mounted men, will be sufficient to
meet the present exigency. If it were necessary carefully to weigh the
cost in a case of such urgency, it would be shown that the additional
expense would be comparatively light.

With the increase of the numerical force of the Army should, I think, be
combined certain measures of reform in its organic arrangement and
administration. The present organization is the result of partial
legislation often directed to special objects and interests; and the
laws regulating rank and command, having been adopted many years ago
from the British code, are not always applicable to our service. It is
not surprising, therefore, that the system should be deficient in the
symmetry and simplicity essential to the harmonious working of its
several parts, and require a careful revision.

The present organization, by maintaining large staff corps or
departments, separates many officers from that close connection with
troops and those active duties in the field which are deemed requisite
to qualify them for the varied responsibilities of high command. Were
the duties of the Army staff mainly discharged by officers detached from
their regiments, it is believed that the special service would be
equally well performed and the discipline and instruction of the Army be
improved. While due regard to the security of the rights of officers and
to the nice sense of honor which should be cultivated among them would
seem to exact compliance with the established rule of promotion in
ordinary cases, still it can hardly be doubted that the range of
promotion by selection, which is now practically confined to the grade
of general officers, might be somewhat extended with benefit to the
public service. Observance of the rule of seniority sometimes leads,
especially in time of peace, to the promotion of officers who, after
meritorious and even distinguished service, may have been rendered by
age or infirmity incapable of performing active duty, and whose
advancement, therefore, would tend to impair the efficiency of the Army.
Suitable provision for this class of officers, by the creation of a
retired list, would remedy the evil without wounding the just pride of
men who by past services have established a claim to high consideration.
In again commending this measure to the favorable consideration of
Congress I would suggest that the power of placing officers on the
retired list be limited to one year. The practical operation of the
measure would thus be tested, and if after the lapse of years there
should be occasion to renew the provision it can be reproduced with any
improvements which experience may indicate. The present organization of
the artillery into regiments is liable to obvious objections. The
service of artillery is that of batteries, and an organization of
batteries into a corps of artillery would be more consistent with the
nature of their duties. A large part of the troops now called artillery
are, and have been, on duty as infantry, the distinction between the two
arms being merely nominal. This nominal artillery in our service is
disproportionate to the whole force and greater than the wants of the
country demand. I therefore commend the discontinuance of a distinction
which has no foundation in either the arms used or the character of the
service expected to be performed.

In connection with the proposition for the increase of the Army, I have
presented these suggestions with regard to certain measures of reform as
the complement of a system which would produce the happiest results from
a given expenditure, and which, I hope, may attract the early attention
and be deemed worthy of the approval of Congress.

The recommendation of the Secretary of the Navy having reference to more
ample provisions for the discipline and general improvement in the
character of seamen and for the reorganization and gradual increase of
the Navy I deem eminently worthy of your favorable consideration. The
principles which have controlled our policy in relation to the permanent
military force by sea and land are sound, consistent with the theory of
our system, and should by no means be disregarded. But, limiting the
force to the objects particularly set forth in the preceding part of
this message, we should not overlook the present magnitude and
prospective extension of our commercial marine, nor fail to give due
weight to the fact that besides the 2,000 miles of Atlantic seaboard we
have now a Pacific coast stretching from Mexico to the British
possessions in the north, teeming with wealth and enterprise and
demanding the constant presence of ships of war. The augmentation of the
Navy has not kept pace with the duties properly and profitably assigned
to it in time of peace, and it is inadequate for the large field of its
operations, not merely in the present, but still more in the
progressively increasing exigencies of the commerce of the United
States. I cordially approve of the proposed apprentice system for our
national vessels recommended by the Secretary of the Navy. The
occurrence during the last few months of marine disasters of the most
tragic nature, involving great loss of human life, has produced intense
emotions of sympathy and sorrow throughout the country. It may well be
doubted whether all these calamitous events are wholly attributable to
the necessary and inevitable dangers of the sea. The merchants,
mariners, and shipbuilders of the United States are, it is true,
unsurpassed in far-reaching enterprise, skill, intelligence, and courage
by any others in the world. But with the increasing amount of our
commercial tonnage in the aggregate and the larger size and improved
equipment of the ships now constructed a deficiency in the supply of
reliable seamen begins to be very seriously felt. The inconvenience may
perhaps be met in part by due regulation for the introduction into our
merchant ships of indented apprentices, which, while it would afford
useful and eligible occupation to numerous young men, would have a
tendency to raise the character of seamen as a class. And it is
deserving of serious reflection whether it may not be desirable to
revise the existing laws for the maintenance of discipline at sea, upon
which the security of life and property on the ocean must to so great an
extent depend. Although much attention has already been given by
Congress to the proper construction and arrangement of steam vessels and
all passenger ships, still it is believed that the resources of science
and mechanical skill in this direction have not been exhausted. No good
reason exists for the marked distinction which appears upon our statutes
between the laws for protecting life and property at sea and those for
protecting them on land. In most of the States severe penalties are
provided to punish conductors of trains, engineers, and others employed
in the transportation of persons by railway or by steamboats on rivers.
Why should not the same principle be applied to acts of insubordination,
cowardice, or other misconduct on the part of masters and mariners
producing injury or death to passengers on the high seas, beyond the
jurisdiction of any of the States, and where such delinquencies can be
reached only by the power of Congress? The whole subject is earnestly
commended to your consideration.

The report of the Postmaster-General, to which you are referred for many
interesting details in relation to this important and rapidly extending
branch of the public service, shows that the expenditure of the year
ending June 30, 1854, including $133,483 of balance due to foreign
offices, amounted to $8,710,907. The gross receipts during the same
period amounted to $6,955,586, exhibiting an expenditure over income of
$1,755,321 and a diminution of deficiency as compared with the last year
of $361,756. The increase of the revenue of the Department for the year
ending June 30, 1854, over the preceding year was $970,399. No
proportionate increase, however, can be anticipated for the current
year, in consequence of the act of Congress of June 23, 1854, providing
for increased compensation to all postmasters. From these statements it
is apparent that the Post-Office Department, instead of defraying its
expenses according to the design at the time of its creation, is now,
and under existing laws must continue to be, to no small extent a charge
upon the general Treasury. The cost of mail transportation during the
year ending June 30, 1854, exceeds the cost of the preceding year by
$495,074. I again call your attention to the subject of mail
transportation by ocean steamers, and commend the suggestions of the
Postmaster General to your early attention.

During the last fiscal year 11,070,935 acres of the public lands have
been surveyed and 8,190,017 acres brought into market. The number of
acres sold is 7,035,735 and the amount received therefor $9,285,533. The
aggregate amount of lands sold, located under military scrip and land
warrants, selected as swamp lands by States, and by locating under
grants for roads is upward of 23,000,000 acres. The increase of lands
sold over the previous year is about 6,000,000 acres, and the sales
during the first two quarters of the current year present the
extraordinary result of five and a half millions sold, exceeding by
nearly 4,000,000 acres the sales of the corresponding quarters of the
last year.

The commendable policy of the Government in relation to setting apart
public domain for those who have served their country in time of war is
illustrated by the fact that since 1790 no less than 30,000,000 acres
have been applied to this object.

The suggestions which I submitted in my annual message of last year in
reference to grants of land in aid of the construction of railways were
less full and explicit than the magnitude of the subject and subsequent
developments would seem to render proper and desirable. Of the soundness
of the principle then asserted with regard to the limitation of the
power of Congress I entertain no doubt, but in its application it is not
enough that the value of lands in a particular locality may be enhanced;
that, in fact, a larger amount of money may probably be received in a
given time for alternate sections than could have been realized for all
the sections without the impulse and influence of the proposed
improvements. A prudent proprietor looks beyond limited sections of his
domain, beyond present results to the ultimate effect which a particular
line of policy is likely to produce upon all his possessions and
interests. The Government, which is trustee in this matter for the
people of the States, is bound to take the same wise and comprehensive
view. Prior to and during the last session of Congress upward of
30,000,000 acres of land were withdrawn from public sale with a view to
applications for grants of this character pending before Congress. A
careful review of the whole subject led me to direct that all such
orders be abrogated and the lands restored to market, and instructions
were immediately given to that effect. The applications at the last
session contemplated the construction of more than 5,000 miles of road
and grants to the amount of nearly 20,000,000 acres of the public
domain. Even admitting the right on the part of Congress to be
unquestionable, is it quite clear that the proposed grants would be
productive of good, and not evil? The different projects are confined
for the present to eleven States of this Union and one Territory. The
reasons assigned for the grants show that it is proposed to put the
works speedily in process of construction. When we reflect that since
the commencement of the construction of railways in the United States,
stimulated, as they have been, by the large dividends realized from the
earlier works over the great thoroughfares and between the most
important points of commerce and population, encouraged by State
legislation, and pressed forward by the amazing energy of private
enterprise, only 17,000 miles have been completed in all the States in a
quarter of a century; when we see the crippled condition of many works
commenced and prosecuted upon what were deemed to be sound principles
and safe calculations; when we contemplate the enormous absorption of
capital withdrawn from the ordinary channels of business, the
extravagant rates of interest at this moment paid to continue
operations, the bankruptcies, not merely in money but in character, and
the inevitable effect upon finances generally, can it be doubted that
the tendency is to run to excess in this matter? Is it wise to augment
this excess by encouraging hopes of sudden wealth expected to flow from
magnificent schemes dependent upon the action of Congress? Does the
spirit which has produced such results need to be stimulated or checked?
Is it not the better rule to leave all these works to private
enterprise, regulated and, when expedient, aided by the cooperation of
States? If constructed by private capital the stimulant and the check go
together and furnish a salutary restraint against speculative schemes
and extravagance. But it is manifest that with the most effective guards
there is danger of going too fast and too far. We may well pause before
a proposition contemplating a simultaneous movement for the construction
of railroads which in extent will equal, exclusive of the great Pacific
road and all its branches, nearly one-third of the entire length of such
works now completed in the United States, and which can not cost with
equipments less than $150,000,000. The dangers likely to result from
combinations of interests of this character can hardly be overestimated.
But independently of these considerations, where is the accurate
knowledge, the comprehensive intelligence, which shall discriminate
between the relative claims of these twenty eight proposed roads in
eleven States and one Territory? Where will you begin and where end? If
to enable these companies to execute their proposed works it is
necessary that the aid of the General Government be primarily given, the
policy will present a problem so comprehensive in its bearings and so
important to our political and social well-being as to claim in
anticipation the severest analysis. Entertaining these views, I recur
with satisfaction to the experience and action of the last session of
Congress as furnishing assurance that the subject will not fail to
elicit a careful reexamination and rigid scrutiny. It was my intention
to present on this occasion some suggestions regarding internal
improvements by the General Government, which want of time at the close
of the last session prevented my submitting on the return to the House
of Representatives with objections of the bill entitled "An act making
appropriations for the repair, preservation, and completion of certain
public works heretofore commenced under the authority of law;" but the
space in this communication already occupied with other matter of
immediate public exigency constrains me to reserve that subject for a
special message, which will be transmitted to the two Houses of Congress
at an early day. The judicial establishment of the United States
requires modification, and certain reforms in the manner of conducting
the legal business of the Government are also much needed; but as I have
addressed you upon both of these subjects at length before, I have only
to call your attention to the suggestions then made.

My former recommendations in relation to suitable provision for various
objects of deep interest to the inhabitants of the District of Columbia
are renewed. Many of these objects partake largely of a national
character, and are important independently of their relation to the
prosperity of the only considerable organized community in the Union
entirely unrepresented in Congress.

I have thus presented suggestions on such subjects as appear to me to be
of particular interest or importance, and therefore most worthy of
consideration during the short remaining period allotted to the labors
of the present Congress.

Our forefathers of the thirteen united colonies, in acquiring their
independence and in rounding this Republic of the United States of
America, have devolved upon us, their descendants, the greatest and the
most noble trust ever committed to the hands of man, imposing upon all,
and especially such as the public will may have invested for the time
being with political functions, the most sacred obligations. We have to
maintain inviolate the great doctrine of the inherent right of popular
self-government; to reconcile the largest liberty of the individual
citizen with complete security of the public order; to render cheerful
obedience to the laws of the land, to unite in enforcing their
execution, and to frown indignantly on all combinations to resist them;
to harmonize a sincere and ardent devotion to the institutions of
religions faith with the most universal religious toleration; to
preserve the rights of all by causing each to respect those of the
other; to carry forward every social improvement to the uttermost limit
of human perfectibility, by the free action of mind upon mind, not by
the obtrusive intervention of misapplied force; to uphold the integrity
and guard the limitations of our organic law; to preserve sacred from
all touch of usurpation, as the very palladium of our political
salvation, the reserved rights and powers of the several States and of
the people; to cherish with loyal fealty and devoted affection this
Union, as the only sure foundation on which the hopes of civil liberty
rest; to administer government with vigilant integrity and rigid
economy; to cultivate peace and friendship with foreign nations, and to
demand and exact equal justice from all, but to do wrong to none; to
eschew intermeddling with the national policy and the domestic repose of
other governments, and to repel it from our own; never to shrink from
war when the rights and the honor of the country call us to arms, but to
cultivate in preference the arts of peace, seek enlargement of the
rights of neutrality, and elevate and liberalize the intercourse of
nations; and by such just and honorable means, and such only, whilst
exalting the condition of the Republic, to assure to it the legitimate
influence and the benign authority of a great example amongst all the
powers of Christendom.

Under the solemnity of these convictions the blessing of Almighty God is
earnestly invoked to attend upon your deliberations and upon all the
counsels and acts of the Government, to the end that, with common zeal
and common efforts, we may, in humble submission to the divine will,
cooperate for the promotion of the supreme good of these United States.

***

State of the Union Address
Franklin Pierce
December 31, 1855

Fellow-Citizens of the Senate and of the House of Representatives:

The Constitution of the United States provides that Congress shall
assemble annually on the first Monday of December, and it has been usual
for the President to make no communication of a public character to the
Senate and House of Representatives until advised of their readiness to
receive it. I have deferred to this usage until the close of the first
month of the session, but my convictions of duty will not permit me
longer to postpone the discharge of the obligation enjoined by the
Constitution upon the President "to give to the Congress information of
the state of the Union and recommend to their consideration such
measures as he shall judge necessary and expedient." It is matter of
congratulation that the Republic is tranquilly advancing in a career of
prosperity and peace.

Whilst relations of amity continue to exist between the United States
and all foreign powers, with some of them grave questions are depending
which may require the consideration of Congress.

Of such questions, the most important is that which has arisen out of
the negotiations with Great Britain in reference to Central America. By
the convention concluded between the two Governments on the 19th of
April, 1850, both parties covenanted that "neither will ever" "occupy,
or fortify, or colonize, or assume or exercise any dominion over
Nicaragua. Costa Rica, the Mosquito Coast, or any part of Central
America."

It was the undoubted understanding of the United States in making this
treaty that all the present States of the former Republic of Central
America and the entire territory of each would thenceforth enjoy
complete independence, and that both contracting parties engaged equally
and to the same extent, for the present and, for the future, that if
either then had any claim of right in Central America such claim and all
occupation or authority under it were unreservedly relinquished by the
stipulations of the convention, and that no dominion was thereafter to
be exercised or assumed in any part of Central America by Great Britain
or the United States.

This Government consented to restrictions in regard to a region of
country wherein we had specific and peculiar interests only upon the
conviction that the like restrictions were in the same sense obligatory
on Great Britain. But for this understanding of the force and effect of
the convention it would never have been concluded by us.

So clear was this understanding on the part of the United States that in
correspondence contemporaneous with the ratification of the convention
it was distinctly expressed that the mutual covenants of nonoccupation
were not intended to apply to the British establishment at the Balize.
This qualification is to be ascribed to the fact that, in virtue of
successive treaties with previous sovereigns of the country, Great
Britain had obtained a concession of the right to cut mahogany or
dyewoods at the Balize, but with positive exclusion of all domain or
sovereignty; and thus it confirms the natural construction and
understood import of the treaty as to all the rest of the region to
which the stipulations applied.

It, however, became apparent at an early day after entering upon the
discharge of my present functions that Great Britain still continued in
the exercise or assertion of large authority in all that part of Central
America commonly called the Mosquito Coast, and covering the entire
length of the State of Nicaragua and a part of Costa Rica; that she
regarded the Balize as her absolute domain and was gradually extending
its limits at the expense of the State of Honduras, and, that she had
formally colonized a considerable insular group known as the Bay
Islands, and belonging of right to that State.

All these acts or pretensions of Great Britain, being contrary to the
rights of the States of Central America and to the manifest tenor of her
stipulations with the United States as understood by this Government,
have been made the subject of negotiation through the American minister
in London. I transmit herewith the instructions to him on the subject
and the correspondence between him and the British secretary for foreign
affairs, by which you will perceive that the two Governments differ
widely and irreconcilably as to the construction of the convention and
its effect on their respective relations to Central America.

Great Britain so construes the convention as to maintain unchanged all
her previous pretensions over the Mosquito Coast and in different parts
of Central America. These pretensions as to the Mosquito Coast are
founded on the assumption of political relation between Great Britain
and the remnant of a tribe of Indians on that coast, entered into at a
time when the whole country was a colonial possession of Spain. It can
not be successfully controverted that by the public law of Europe and
America no possible act of such Indians or their predecessors could
confer on Great Britain any political rights.

Great Britain does not allege the assent of Spain as the origin of her
claims on the Mosquito Coast. She has, on the contrary, by repeated and
successive treaties renounced and relinquished all pretensions of her
own and recognized the full and sovereign rights of Spain in the most
unequivocal terms. Yet these pretensions, so without solid foundation in
the beginning and thus repeatedly abjured, were at a recent period
revived by Great Britain against the Central American States, the
legitimate successors to all the ancient jurisdiction of Spain in that
region. They were first applied only to a defined part of the coast of
Nicaragua, afterwards to the whole of its Atlantic coast, and lastly to
a part of the coast of Costa Rica, and they are now reasserted to this
extent notwithstanding engagements to the United States.

On the eastern coast of Nicaragua and Costa Rica the interference of
Great Britain, though exerted at one time in the form of military
occupation of the port of San Juan del Norte, then in the peaceful
possession of the appropriate authorities of the Central American
States, is now presented by her as the rightful exercise of a
protectorship over the Mosquito tribe of Indians.

But the establishment at the Balize, now reaching far beyond its treaty
limits into the State of Honduras, and that of the Bay Islands,
appertaining of right to the same State, are as distinctly colonial
governments as those of Jamaica or Canada, and therefore contrary to the
very letter, as well as the spirit, of the convention with the United
States as it was at the time of ratification and now is understood by
this Government.

The interpretation which the British Government thus, in assertion and
act, persists in ascribing to the convention entirely changes its
character. While it holds us to all our obligations, it in a great
measure releases Great Britain from those which constituted the
consideration of this Government for entering into the convention. It is
impossible, in my judgment, for the United States to acquiesce in such a
construction of the respective relations of the two Governments to
Central America.

To a renewed call by this Government upon Great Britain to abide by and
Carry into effect the stipulations of the convention according to its
obvious import by withdrawing from the possession or colonization of
portions of the Central American States of Honduras, Nicaragua, and
Costa Rica, the British Government has at length replied, affirming that
the operation of the treaty is prospective only and did not require
Great Britain to abandon or contract any possessions held by her in
Central America at the date of its conclusion.

This reply substitutes a partial issue in the place of the general one
presented by the United States. The British Government passes over the
question of the rights of Great Britain, real or supposed, in Central
America, and assumes that she had such rights at the date of the treaty
and that those rights comprehended the protectorship of the Mosquito
Indians, the extended jurisdiction and limits of the Balize, and the
colony of the Bay Islands, and thereupon proceeds by implication to
infer that if the stipulations of the treaty be merely future in effect
Great Britain may still continue to hold the contested portions of
Central America. The United States can not admit either the inference or
the premises. We steadily deny that at the date of the treaty Great
Britain had any possessions there other than the limited and peculiar
establishment at the Balize, and maintain that if she had any they were
surrendered by the convention.

This Government, recognizing the obligations of the treaty, has, of
course, desired to see it executed in good faith by both parties, and in
the discussion, therefore, has not looked to rights which we might
assert independently of the treaty in consideration of our geographical
position and of other circumstances which create for us relations to the
Central American States different from those of any government of
Europe. The British Government, in its last communication, although well
knowing the views of the United States, still declares that it sees no
reason why a conciliatory spirit may not enable the two Governments to
overcome all obstacles to a satisfactory adjustment of the subject.

Assured of the correctness of the construction of the treaty constantly
adhered to by this Government and resolved to insist on the rights of
the United States, yet actuated also by the same desire which is avowed
by the British Government, to remove all causes of serious
misunderstanding between two nations associated by so many ties of
interest and kindred, it has appeared to me proper not to consider an
amicable solution of the controversy hopeless.

There is, however, reason to apprehend that with Great Britain in the
actual occupation of the disputed territories, and the treaty therefore
practically null so far as regards our rights, this international
difficulty can not long remain undetermined without involving in serious
danger the friendly relations which it is the interest as well as the
duty of both countries to cherish and preserve. It will afford me
sincere gratification if future efforts shall result in the success
anticipated heretofore with more confidence than the aspect of the case
permits me now to entertain.

One other subject of discussion between the United States and Great
Britain has grown out of the attempt, which the exigencies of the war in
which she is engaged with Russia induced her to make, to draw recruits
from the United States.

It is the traditional and settled policy of the United States to
maintain impartial neutrality during the wars which from time to time
occur among the great powers of the world. Performing all the duties of
neutrality toward the respective belligerent states, we may reasonably
expect them not to interfere with our lawful enjoyment of its benefits.
Notwithstanding the existence of such hostilities, our citizens retained
the individual right to continue all their accustomed pursuits, by land
or by sea, at home or abroad, subject only to such restrictions in this
relation as the laws of war, the usage of nations, or special treaties
may impose; and it is our sovereign right that our territory and
jurisdiction shall not be invaded by either of the belligerent parties
for the transit of their armies, the operations of their fleets, the
levy of troops for their service, the fitting out of cruisers by or
against either, or any other act or incident of war. And these
undeniable rights of neutrality, individual and national, the United
States will under no circumstances surrender.

In pursuance of this policy, the laws of the United States do not forbid
their citizens to sell to either of the belligerent powers articles
contraband of war or take munitions of war or soldiers on board their
private ships for transportation; and although in so doing the
individual citizen exposes his property or person to some of the hazards
of war, his acts do not involve any breach of national neutrality nor of
themselves implicate the Government. Thus, during the progress of the
present war in Europe, our citizens have, without national
responsibility therefor, sold gunpowder and arms to all buyers,
regardless of the destination of those articles. Our merchantmen have
been, and still continue to be, largely employed by Great Britain and by
France in transporting troops, provisions, and munitions of war to the
principal seat of military operations and in bringing home their sick
and wounded soldiers; but such use of our mercantile marine is not
interdicted either by the international or by our municipal law, and
therefore does not compromise our neutral relations with Russia. But our
municipal law, in accordance with the law of nations, peremptorily
forbids not only foreigners, but our own citizens, to fit out within the
United States a vessel to commit hostilities against any state with
which the United States are at peace, or to increase the force of any
foreign armed vessel intended for such hostilities against a friendly
state.

Whatever concern may have been felt by either of the belligerent powers
lest private armed cruisers or other vessels in the service of one might
be fitted out in the ports of this country to depredate on the property
of the other, all such fears have proved to be utterly groundless. Our
citizens have been withheld from any such act or purpose by good faith
and by respect for the law.

While the laws of the Union are thus peremptory in their prohibition of
the equipment or armament of belligerent cruisers in our ports, they
provide not less absolutely that no person shall, within the territory
or jurisdiction of the United States, enlist or enter himself, or hire
or retain another person to enlist or enter himself, or to go beyond the
limits or jurisdiction of the United States with intent to be enlisted
or entered, in the service of any foreign state, either as a soldier or
as a marine or seaman on board of any vessel of war, letter of marque,
or privateer. And these enactments are also in strict conformity with
the law of nations, which declares that no state has the right to raise
troops for land or sea service in another state without its consent, and
that, whether forbidden by the municipal law or not, the very attempt to
do it without such consent is an attack on the national sovereignty.

Such being the public rights and the municipal law of the United States,
no solicitude on the subject was entertained by this Government when, a
year since, the British Parliament passed an act to provide for the
enlistment of foreigners in the military service of Great Britain.
Nothing on the face of the act or in its public history indicated that
the British Government proposed to attempt recruitment in the United
States, nor did it ever give intimation of such intention to this
Government. It was matter of surprise, therefore, to find subsequently
that the engagement of persons within the United States to proceed to
Halifax, in the British Province of Nova Scotia, and there enlist in the
service of Great Britain, was going on extensively, with little or no
disguise. Ordinary legal steps were immediately taken to arrest and
punish parties concerned, and so put an end to acts infringing the
municipal law and derogatory to our sovereignty. Meanwhile suitable
representations on the subject were addressed to the British Government.

Thereupon it became known, by the admission of the British Government
itself, that the attempt to draw recruits from this country originated
with it, or at least had its approval and sanction; but it also appeared
that the public agents engaged in it had "stringent instructions" not to
violate the municipal law of the United States.

It is difficult to understand how it should have been supposed that
troops could be raised here by Great Britain without violation of the
municipal law. The unmistakable object of the law was to prevent every
such act which if performed must be either in violation of the law or in
studied evasion of it, and in either alternative the act done would be
alike injurious to the sovereignty of the United States. In the meantime
the matter acquired additional importance by the recruitments in the
United States not being discontinued, and the disclosure of the fact
that they were prosecuted upon a systematic plan devised by official
authority; that recruiting rendezvous had been opened in our principal
cities and depots for the reception of recruits established on our
frontier, and the whole business conducted under the supervision and by
the regular cooperation of British officers, civil and military, some in
the North American Provinces and some in the United States. The
complicity of those officers in an undertaking which could only be
accomplished by defying our laws, throwing suspicion over our attitude
of neutrality, and disregarding our territorial rights is conclusively
proved by the evidence elicited on the trial of such of their agents as
have been apprehended and convicted. Some of the officers thus
implicated are of high official position, and many of them beyond our
jurisdiction, so that legal proceedings could not reach the source of
the mischief.

These considerations, and the fact that the cause of complaint was not a
mere casual occurrence, trot a deliberate design, entered upon with full
knowledge of our laws and national policy and conducted by responsible
public functionaries, impelled me to present the case to the British
Government, in order to secure not only a cessation of the, wrong, but
its reparation. The subject is still under discussion, the result of
which will be communicated to you in due time.

I repeat the recommendation submitted to the last Congress, that
provision be made for the appointment of a commissioner, in connection
with Great Britain, to survey and establish the boundary line which
divides the Territory of Washington from the contiguous British
possessions. By reason of the extent and importance of the country in
dispute, there has been imminent danger of collision between the
subjects of Great Britain and the citizens of the United States,
including their respective authorities, in that quarter. The prospect of
a speedy arrangement has contributed hitherto to induce on both sides
forbearance to assert by force what each claims as a right. Continuance
of delay on the part of the two Governments to act in the matter will
increase the dangers and difficulties of the controversy.

Misunderstanding exists as to the extent, character, and value of the
possessory rights of the Hudsons Bay Company and the property of the
Pugets Sound Agricultural Company reserved in our treaty with Great
Britain relative to the Territory of Oregon. I have reason to believe
that a cession of the rights of both companies to the United States,
which would be the readiest means of terminating all questions, can be
obtained on reasonable terms, and with a view to this end I present the
subject to the attention of Congress.

The colony of Newfoundland, having enacted the laws required by the
treaty of the 5th of June, 1854, is now placed on the same footing in
respect to commercial intercourse with the United States as the other
British North American Provinces.

The commission which that treaty contemplated, for determining the
rights of fishery in rivers and mouths of rivers on the coasts of the
United States and the British North American Provinces, has been
organized, and has commenced its labors, to complete which there are
needed further appropriations for the service of another season.

In pursuance of the authority conferred by a resolution of the Senate of
the United States passed on the 3d of March last, notice was given to
Denmark on the 14th day of April of the intention of this Government to
avail itself of the stipulation of the subsisting convention of
friendship, commerce, and navigation between that Kingdom and the United
States whereby either party might after ten years terminate the same at
the expiration of one year from the date of notice for that purpose.

The considerations which led me to call the attention of Congress to
that convention and induced the Senate to adopt the resolution referred
to still continue in full force. The convention contains an article
which, although it does not directly engage the United States to submit
to the imposition of tolls on the vessels and cargoes of Americans
passing into or from the Baltic Sea during the continuance of the
treaty, yet may by possibility be construed as implying such submission.
The exaction of those tolls not being justified by any principle of
international law, it became the right and duty of the United States to
relieve themselves from the implication of engagement on the subject, so
as to be perfectly free to act in the premises in such way as their
public interests and honor shall demand.

I remain of the opinion that the United States ought not to submit to
the payment of the Sound dues, not so much because of their amount,
which is a secondary matter, but because it is in effect the recognition
of the right of Denmark to treat one of the great maritime highways of
nations as a close sea, and prevent the navigation of it as a privilege,
for which tribute may be imposed upon those who have occasion to use it.

This Government on a former occasion, not unlike the present, signalized
its determination to maintain the freedom of the seas and of the great
natural channels of navigation. The Barbary States had for a long time
coerced the payment of tribute from all nations whose ships frequented
the Mediterranean. To the last demand of such payment made by them the
United States, although suffering less by their depredations than many
other nations, returned the explicit answer that we preferred war to
tribute, and thus opened the way to the relief of the commerce of the
world from an ignominious tax, so long submitted to by the more powerful
nations of Europe.

If the manner of payment of the Sound dues differ from that of the
tribute formerly conceded to the Barbary States, still their exaction by
Denmark has no better foundation in right. Each was in its origin
nothing but a tax on a common natural right, extorted by those who were
at that time able to obstruct the free and secure enjoyment of it, but
who no longer possess that power.

Denmark, while resisting our assertion of the freedom of the Baltic
Sound and Belts, has indicated a readiness to make some new arrangement
on the subject, and has invited the governments interested, including
the United States, to be represented in a convention to assemble for the
purpose of receiving and considering a proposition which she intends to
submit for the capitalization of the Sound dues and the distribution of
the sum to be paid as commutation among the governments according to the
respective proportions of their maritime commerce to and from the
Baltic. I have declined, in behalf of the United States, to accept this
invitation, for the most cogent reasons. One is that Denmark does not
offer to submit to the convention the question of her right to levy the
Sound dues. The second is that if the convention were allowed to take
cognizance of that particular question, still it would not be competent
to deal with the great international principle involved, which affects
the right in other cases of navigation and commercial freedom, as well
as that of access to the Baltic. Above all, by the express terms of the
proposition it is contemplated that the consideration of the Sound dues
shall be commingled with and made subordinate to a matter wholly
extraneous--the balance of power among the Governments of Europe.

While, however, rejecting this proposition and insisting on the right of
free transit into and from the Baltic, I have expressed to Denmark a
willingness on the part of the United States to share liberally with
other powers in compensating her for any advantages which commerce shall
hereafter derive from expenditures made by her for the improvement and
safety of the navigation of the Sound or Belts.

I lay before you herewith sundry documents on the subject, in which my
views are more fully disclosed. Should no satisfactory arrangement be
soon concluded, I shall again call your attention to the subject, with
recommendation of such measures as may appear to be required in order to
assert and secure the rights of the United States, so far as they are
affected by the pretensions of Denmark.

I announce with much gratification that since the adjournment of the
last Congress the question then existing between this Government and
that of France respecting the French consul at San Francisco has been
satisfactorily determined, and that the relations of the two Governments
continue to be of the most friendly nature.

A question, also, which has been pending for several years between the
United States and the Kingdom of Greece, growing out of the
sequestration by public authorities of that country of property
belonging to the present American consul at Athens, and which had been
the subject of very earnest discussion heretofore, has recently been
settled to the satisfaction of the party interested and of both
Governments.

With Spain peaceful relations are still maintained, and some progress
has been made in securing the redress of wrongs complained of by this
Government. Spain has not only disavowed and disapproved the conduct of
the officers who illegally seized and detained the steamer Black Warrior
at Havana, but has also paid the sum claimed as indemnity for the loss
thereby inflicted on citizens of the United States.

In consequence of a destructive hurricane which visited Cuba in 1844,
the supreme authority of that island issued a decree permitting the
importation for the period of six months of certain building materials
and provisions free of duty, but revoked it when about half the period
only had elapsed, to the injury of citizens of the United States who had
proceeded to act on the faith of that decree. The Spanish Government
refused indemnification to the parties aggrieved until recently, when it
was assented to, payment being promised to be made so soon as the amount
due can be ascertained.

Satisfaction claimed for the arrest and search of the steamer El Dorado
has not yet been accorded, but there is reason to believe that it will
be; and that case, with others, continues to be urged on the attention
of the Spanish Government. I do not abandon the hope of concluding with
Spain some general arrangement which, if it do not wholly prevent the
recurrence of difficulties in Cuba, will render them less frequent, and,
whenever they shall occur, facilitate their more speedy settlement.

The interposition of this Government has been invoked by many of its
citizens on account of injuries done to their persons and property for
which the Mexican Republic is responsible. The unhappy situation of that
country for some time past has not allowed its Government to give due
consideration to claims of private reparation, and has appeared to call
for and justify some forbearance in such matters on the part of this
Government. But if the revolutionary movements which have lately
occurred in that Republic end in the organization of a stable
government, urgent appeals to its justice will then be made, and, it may
be hoped, with success, for the redress of all complaints of our
citizens.

In regard to the American Republics, which from their proximity and
other considerations have peculiar relations to this Government, while
it has been my constant aim strictly to observe all the obligations of
political friendship and of good neighborhood, obstacles to this have
arisen in some of them from their own insufficient power to cheek
lawless irruptions, which in effect throws most of the task on the
United States. Thus it is that the distracted internal condition of the
State of Nicaragua has made it incumbent on me to appeal to the good
faith of our citizens to abstain from unlawful intervention in its
affairs and to adopt preventive measures to the same end, which on a
similar occasion had the best results in reassuring the peace of the
Mexican States of Sonora and Lower California.

Since the last session of Congress a treaty of amity, commerce, and
navigation and for the surrender of fugitive criminals with the Kingdom
of the Two Sicilies; a treaty of friendship, commerce, and navigation
with Nicaragua, and a convention of commercial reciprocity with the
Hawaiian Kingdom have been negotiated. The latter Kingdom and the State
of Nicaragua have also acceded to a declaration recognizing as
international rights the principles contained in the convention between
the United States and Russia of July 22, 1854. These treaties and
conventions will be laid before the Senate for ratification.

The statements made in my last annual message respecting the anticipated
receipts and expenditures of the Treasury have been substantially
verified.

It appears from the report of the Secretary of the Treasury that the
receipts during the last fiscal year, ending June 30, 1855, from all
sources were $65,003,930, and that the public expenditures for the same
period, exclusive of payments on account of the public debt, amounted to
$56,365,393. During the same period the payments made in redemption of
the public debt, including interest and premium, amounted to $9,844,528.

The balance in the Treasury at the beginning of the present fiscal year,
July 1, 1855, was $18,931,976; the receipts for the first quarter and
the estimated receipts for the remaining three quarters amount together
to $67,918,734; thus affording in all, as the available resources of the
current fiscal year, the sum of $86,856,710.

If to the actual expenditures of the first quarter of the current fiscal
year be added the probable expenditures for the remaining three
quarters, as estimated by the Secretary of the Treasury, the sum total
will be $71,226,846, thereby leaving an estimated balance in the
Treasury on July 1, 1856, of $15,623,863.41.

In the above-estimated expenditures of the present fiscal year are
included $3,000,000 to meet the last installment of the ten millions
provided for in the late treaty with Mexico and $7,750,000 appropriated
on account of the debt due to Texas, which two sums make an aggregate
amount of $10,750,000 and reduce the expenditures, actual or estimated,
for ordinary objects of the year to the sum of $60,476,000.

The amount of the public debt at the commencement of the present fiscal
year was $40,583,631, and, deduction being made of subsequent payments,
the whole public debt of the Federal Government remaining at this time
is less than $40,000,000. The remnant of certain other Government
stocks, amounting to $243,000, referred to in my last message as
outstanding, has since been paid.

I am fully persuaded that it would be difficult to devise a system
superior to that by which the fiscal business of the Government is now
conducted. Notwithstanding the great number of public agents of
collection and disbursement, it is believed that the checks and guards
provided, including the requirement of monthly returns, render it
scarcely possible for any considerable fraud on the part of those agents
or neglect involving hazard of serious public loss to escape detection.
I renew, however, the recommendation heretofore made by me of the
enactment of a law declaring it felony on the part of public officers to
insert false entries in their books of record or account or to make
false returns, and also requiring them on the termination of their
service to deliver to their successors all books, records, and other
objects of a public nature in their custody.

Derived, as our public revenue is, in chief part from duties on imports,
its magnitude affords gratifying evidence of the prosperity, not only of
our commerce, but of the other great interests upon which that depends.

The principle that all moneys not required for the current expenses of
the Government should remain for active employment in the hands of the
people and the conspicuous fact that the annual revenue from all sources
exceeds by many millions of dollars the amount needed for a prudent and
economical administration of public affairs can not fail to suggest the
propriety of an early revision and reduction of the tariff of duties on
imports. It is now so generally conceded that the purpose of revenue
alone can justify the imposition of duties on imports that in
readjusting the impost tables and schedules, which unquestionably
require essential modifications, a departure from the principles of the
present tariff is not anticipated.

The Army during the past year has been actively engaged in defending the
Indian frontier, the state of the service permitting but few and small
garrisons in our permanent fortifications. The additional regiments
authorized at the last session of Congress have been recruited and
organized, and a large portion of the troops have already been sent to
the field. All the duties which devolve on the military establishment
have been satisfactorily performed, and the dangers and privations
incident to the character of the service required of our troops have
furnished additional evidence of their courage, zeal, and capacity to
meet any requisition which their country may make upon them. For the
details of the military operations, the distribution of the troops, and
additional provisions required for the military service, I refer to the
report of the Secretary of War and the accompanying documents.

Experience gathered from events which have transpired since my last
annual message has but served to confirm the opinion then expressed of
the propriety of making provision by a retired list for disabled
officers and for increased compensation to the officers retained on the
list for active duty. All the reasons which existed when these measures
were recommended on former occasions continue without modification,
except so far as circumstances have given to some of them additional
force.

The recommendations heretofore made for a partial reorganization of the
Army are also renewed. The thorough elementary education given to those
officers who commenced their service with the grade of cadet qualifies
them to a considerable extent to perform the duties of every arm of the
service; but to give the highest efficiency to artillery requires the
practice and special study of many years, and it is not, therefore,
believed to be advisable to maintain in time of peace a larger force of
that arm than can be usually employed in the duties appertaining to the
service of field and siege artillery. The duties of the staff in all its
various branches belong to the movements of troops, and the efficiency
of an army in the field would materially depend upon the ability with
which those duties are discharged. It is not, as in the case of the
artillery, a specialty, but requires also an intimate knowledge of the
duties of an officer of the line, and it is not doubted that to complete
the education of an officer for either the line or the general staff it
is desirable that he shall have served in both. With this view, it was
recommended on a former occasion that the duties of the staff should be
mainly performed by details from the line, and, with conviction of the
advantages which would result from such a change, it is again presented
for the consideration of Congress.

The report of the Secretary of the Navy, herewith submitted, exhibits in
full the naval operations of the past year, together with the present
condition of the service, and it makes suggestions of further
legislation, to which your attention is invited.

The construction of the six steam frigates for which appropriations were
made by the last Congress has proceeded in the most satisfactory manner
and with such expedition as to warrant the belief that they will be
ready for service early in the coming spring. Important as this addition
to our naval force is, it still remains inadequate to the contingent
exigencies of the protection of the extensive seacoast and vast
commercial interests of the United States. In view of this fact and of
the acknowledged wisdom of the policy of a gradual and systematic
increase of the Navy an appropriation is recommended for the
construction of six steam sloops of war.

In regard to the steps taken in execution of the act of Congress to
promote the efficiency of the Navy, it is unnecessary for me to say more
than to express entire concurrence in the observations on that subject
presented by the Secretary in his report.

It will be perceived by the report of the postmaster-General that the
gross expenditure of the Department for the last fiscal year was
$9,968,342 and the gross receipts $7,342,136, making an excess of
expenditure over receipts of $2,626,206; and that the cost of mail
transportation during that year was $674,952 greater than the previous
year. Much of the heavy expenditures to which the Treasury is thus
subjected is to be ascribed to the large quantity of printed matter
conveyed by the mails, either franked or liable to no postage by law or
to very low rates of postage compared with that charged on letters, and
to the great cost of mail service on railroads and by ocean steamers.
The suggestions of the Postmaster-General on the subject deserve the
consideration of Congress.

The report of the Secretary of the Interior will engage your attention
as well for useful suggestions it contains as for the interest and
importance of the subjects to which they refer.

The aggregate amount of public land sold during the last fiscal year,
located with military scrip or land warrants, taken up under grants for
roads, and selected as swamp lands by States is 24,557,409 acres, of
which the portion sold was 15,729,524 acres, yielding in receipts the
sum of $11,485,380. In the same period of time 8,723,854 acres have been
surveyed, but, in consideration of the quantity already subject to
entry, no additional tracts have been brought into market.

The peculiar relation of the General Government to the District of
Columbia renders it proper to commend to your care not only its material
but also its moral interests, including education, more especially in
those parts of the District outside of the cities of Washington and
Georgetown.

The commissioners appointed to revise and codify the laws of the
District have made such progress in the performance of their task as to
insure its completion in the time prescribed by the act of Congress.

Information has recently been received that the peace of the settlements
in the Territories of Oregon and Washington is disturbed by hostilities
on the part of the Indians, with indications of extensive combinations
of a hostile character among the tribes in that quarter, the more
serious in their possible effect by reason of the undetermined foreign
interests existing in those Territories, to which your attention has
already been especially invited. Efficient measures have been taken,
which, it is believed, will restore quiet and afford protection to our
citizens.

In the Territory of Kansas there have been acts prejudicial to good
order, but as yet none have occurred under circumstances to justify the
interposition of the Federal Executive. That could only be in case of
obstruction to Federal law or of organized resistance to Territorial
law, assuming the character of insurrection, which, if it should occur,
it would be my duty promptly to overcome and suppress. I cherish the
hope, however, that the occurrence of any such untoward event will be
prevented by the sound sense of the people of the Territory, who by its
organic law, possessing the right to determine their own domestic
institutions, are entitled while deporting themselves peacefully to the
free exercise of that right, and must be protected in the enjoyment of
it without interference on the part of the citizens of any of the
States. The southern boundary line of this Territory has never been
surveyed and established. The rapidly extending settlements in that
region and the fact that the main route between Independence, in the
State of Missouri, and New Mexico is contiguous in this line suggest the
probability that embarrassing questions of jurisdiction may consequently
arise. For these and other considerations I commend the subject to your
early attention.

I have thus passed in review the general state of the Union, including
such particular concerns of the Federal Government, whether of domestic
or foreign relation, as it appeared to me desirable and useful to bring
to the special notice of Congress. Unlike the great States of Europe and
Asia and many of those of America, these United States are wasting their
strength neither in foreign war nor domestic strife. Whatever of
discontent or public dissatisfaction exists is attributable to the
imperfections of human nature or is incident to all governments, however
perfect, which human wisdom can devise. Such subjects of political
agitation as occupy the public mind consist to a great extent of
exaggeration of inevitable evils, or over zeal in social improvement, or
mere imagination of grievance, having but remote connection with any of
the constitutional functions or duties of the Federal Government. To
whatever extent these questions exhibit a tendency menacing to the
stability of the Constitution or the integrity of the Union, and no
further, they demand the consideration of the Executive and require to
be presented by him to Congress.

Before the thirteen colonies became a confederation of independent
States they were associated only by community of transatlantic origin,
by geographical position, and by the mutual tie of common dependence on
Great Britain. When that tie was sundered they severally assumed the
powers and rights of absolute self-government. The municipal and social
institutions of each, its laws of property and of personal relation,
even its political organization, were such only as each one chose to
establish, wholly without interference from any other. In the language
of the Declaration of Independence, each State had "full power to levy
war, conclude peace, contract alliances, establish commerce, and to do
all other acts and things which independent states may of right do." The
several colonies differed in climate, in soil, in natural productions,
in religion, in systems of education, in legislation, and in the forms
of political administration, and they continued to differ in these
respects when they voluntarily allied themselves as States to carry on
the War of the Revolution. The object of that war was to disenthrall the
united colonies from foreign rule, which had proved to be oppressive,
and to separate them permanently from the mother country. The political
result was the foundation of a Federal Republic of the free white men of
the colonies, constituted, as they were, in distinct and reciprocally
independent State governments. As for the subject races, whether Indian
or African, the wise and brave statesmen of that day, being engaged in
no extravagant scheme of social change, left them as they were, and thus
preserved themselves and their posterity from the anarchy and the
ever-recurring civil wars which have prevailed in other revolutionized
European colonies of America.

When the confederated States found it convenient to modify the
conditions of their association by giving to the General Government
direct access in some respects to the people of the States, instead of
confining it to action on the States as such, they proceeded to frame
the existing Constitution, adhering steadily to one guiding thought,
which was to delegate only such power as was necessary and proper to the
execution of specific purposes, or, in other words, to retain as much as
possible consistently with those purposes of the independent powers of
the individual States. For objects of common defense and security, they
intrusted to the General Government certain carefully defined functions,
leaving all others as the undelegated rights of the separate independent
sovereignties.

Such is the constitutional theory of our Government, the practical
observance of which has carried us, and us alone among modern republics,
through nearly three generations of time without the cost of one drop of
blood shed in civil war. With freedom and concert of action, it has
enabled us to contend successfully on the battlefield against foreign
foes, has elevated the feeble colonies into powerful States, and has
raised our industrial productions and our commerce which transports them
to the level of the richest and the greatest nations of Europe. And the
admirable adaptation of our political institutions to their objects,
combining local self-government with aggregate strength, has established
the practicability of a government like ours to cover a continent with
confederate states.

The Congress of the United States is in effect that congress of
sovereignties which good men in the Old World have sought for, but could
never attain, and which imparts to America an exemption from the mutable
leagues for common action, from the wars, the mutual invasions, and
vague aspirations after the balance of power which convulse from time to
time the Governments of Europe. Our cooperative action rests in the
conditions of permanent confederation prescribed by the Constitution.
Our balance of power is in the separate reserved rights of the States
and their equal representation in the Senate. That independent
sovereignty in every one of the States, with its reserved rights of
local self-government assured to each by their coequal power in the
Senate, was the fundamental condition of the Constitution. Without it
the Union would never have existed. However desirous the larger States
might be to reorganize the Government so as to give to their population
its proportionate weight in the common counsels, they knew it was
impossible unless they conceded to the smaller ones authority to
exercise at least a negative influence on all the measures of the
Government, whether legislative or executive, through their equal
representation in the Senate. Indeed, the larger States themselves could
not have failed to perceive that the same power was equally necessary to
them for the security of their own domestic interests against the
aggregate force of the General Government. In a word, the original
States went into this permanent league on the agreed premises of
exerting their common strength for the defense of the whole and of all
its parts, but of utterly excluding all capability of reciprocal
aggression. Each solemnly bound itself to all the others neither to
undertake nor permit any encroachment upon or intermeddling with
another's reserved rights.

Where it was deemed expedient particular rights of the States were
expressly guaranteed by the Constitution, but in all things besides
these rights were guarded by the limitation of the powers granted and by
express reservation of all powers not granted in the compact of union.
Thus the great power of taxation was limited to purposes of common
defense and general welfare, excluding objects appertaining to the local
legislation of the several States; and those purposes of general welfare
and common defense were afterwards defined by specific enumeration as
being matters only of co-relation between the States themselves or
between them and foreign governments, which, because of their common and
general nature, could not be left to the separate control of each State.

Of the circumstances of local condition, interest, and rights in which a
portion of the States, constituting one great section of the Union,
differed from the rest and from another section, the most important was
the peculiarity of a larger relative colored population in the Southern
than in the Northern States.

A population of this class, held in subjection, existed in nearly all
the States, but was more numerous and of more serious concernment in the
South than in the North on account of natural differences of climate and
production; and it was foreseen that, for the same reasons, while this
population would diminish and sooner or later cease to exist in some
States, it might increase in others. The peculiar character and
magnitude of this question of local rights, not in material relations
only, but still more in social ones, caused it to enter into the special
stipulations of the Constitution.

Hence, while the General Government, as well by the enumerated powers
granted to it as by those not enumerated, and therefore refused to it,
was forbidden to touch this matter in the sense of attack or offense, it
was placed under the general safeguard of the Union in the sense of
defense against either invasion or domestic violence, like all other
local interests of the several States. Each State expressly stipulated,
as well for itself as for each and all of its citizens, and every
citizen of each State became solemnly bound by his allegiance to the
Constitution that any person held to service or labor in one State,
escaping into another, should not, in consequence of any law or
regulation thereof, be discharged from such service or labor, but should
be delivered up on claim of the party to whom such service or labor
might be due by the laws of his State.

Thus and thus only, by the reciprocal guaranty of all the rights of
every State against interference on the part of another, was the present
form of government established by our fathers and transmitted to us, and
by no other means is it possible for it to exist. If one State ceases to
respect the rights of another and obtrusively intermeddles with its
local interests; if a portion of the States assume to impose their
institutions on the others or refuse to fulfill their obligations to
them, we are no longer united, friendly States, but distracted, hostile
ones, with little capacity left of common advantage, but abundant means
of reciprocal injury and mischief. Practically it is immaterial whether
aggressive interference between the States or deliberate refusal on the
part of any one of them to comply with constitutional obligations arise
from erroneous conviction or blind prejudice, whether it be perpetrated
by direction or indirection. In either case it is full of threat and of
danger to the durability of the Union.

Placed in the office of Chief Magistrate as the executive agent of the
whole country, bound to take care that the laws be faithfully executed,
and specially enjoined by the Constitution to give information to
Congress on the state of the Union, it would be palpable neglect of duty
on my part to pass over a subject like this, which beyond all things at
the present time vitally concerns individual and public security.

It has been matter of painful regret to see States conspicuous for their
services in rounding this Republic and equally sharing its advantages
disregard their constitutional obligations to it. Although conscious of
their inability to heal admitted and palpable social evils of their own,
and which are completely within their jurisdiction, they engage in the
offensive and hopeless undertaking of reforming the domestic
institutions of other States, wholly beyond their control and authority.
In the vain pursuit of ends by them entirely unattainable, and which
they may not legally attempt to compass, they peril the very existence
of the Constitution and all the countless benefits which it has
conferred. While the people of the Southern States confine their
attention to their own affairs, not presuming officiously to intermeddle
with the social institutions of the Northern States, too many of the
inhabitants of the latter are permanently organized in associations to
inflict injury on the former by wrongful acts, which would be cause of
war as between foreign powers and only fail to be such in our system
because perpetrated under cover of the Union.

Is it possible to present this subject as truth and the occasion require
without noticing the reiterated but groundless allegation that the South
has persistently asserted claims and obtained advantages in the
practical administration of the General Government to the prejudice of
the North, and in which the latter has acquiesced? That is, the States
which either promote or tolerate attacks on the rights of persons and of
property in other States, to disguise their own injustice, pretend or
imagine, and constantly aver, that they, whose constitutional rights are
thus systematically assailed, are themselves the aggressors. At the
present time this imputed aggression, resting, as it does, only in the
vague declamatory charges of political agitators, resolves itself into
misapprehension, or misinterpretation, of the principles and facts of
the political organization of the new Territories of the United States.

What is the voice of history? When the ordinance which provided for the
government of the territory northwest of the river Ohio and for its
eventual subdivision into new States was adopted in the Congress of the
Confederation, it is not to be supposed that the question of future
relative power as between the States which retained and those which did
not retain a numerous colored population escaped notice or failed to be
considered. And yet the concession of that vast territory to the
interests and opinions of the Northern States, a territory now the seat
of five among the largest members of the Union, was in great measure the
act of the State of Virginia and of the South.

When Louisiana was acquired by the United States, it was an acquisition
not less to the North than to the South; for while it was important to
the country at the mouth of the river Mississippi to become the emporium
of the country above it, so also it was even more important to the whole
Union to have that emporium; and although the new province, by reason of
its imperfect settlement, was mainly regarded as on the Gulf of Mexico,
yet in fact it extended to the opposite boundaries of the United States,
with far greater breadth above than below, and was in territory, as in
everything else, equally at least an accession to the Northern States.
It is mere delusion and prejudice, therefore, to speak of Louisiana as
acquisition in the special interest of the South.

The patriotic and just men who participated in the act were influenced
by motives far above all sectional jealousies. It was in truth the great
event which, by completing for us the possession of the Valley of the
Mississippi, with commercial access to the Gulf of Mexico, imparted
unity and strength to the whole Confederation and attached together by
indissoluble ties the East and the West, as well as the North and the
South.

As to Florida, that was but the transfer by Spain to the United States
of territory on the east side of the river Mississippi in exchange for
large territory which the United States transferred to Spain on the west
side of that river, as the entire diplomatic history of the transaction
serves to demonstrate. Moreover, it was an acquisition demanded by the
commercial interests and the security of the whole Union. In the
meantime the people of the United States had grown up to a proper
consciousness of their strength, and in a brief contest with France and
in a second serious war with Great Britain they had shaken off all which
remained of undue reverence for Europe, and emerged from the atmosphere
of those transatlantic influences which surrounded the infant Republic,
and had begun to turn their attention to the full and systematic
development of the internal resources of the Union.

Among the evanescent controversies of that period the most conspicuous
was the question of regulation by Congress of the social condition of
the future States to be rounded in the territory of Louisiana.

The ordinance for the government of the territory northwest of the river
Ohio had contained a provision which prohibited the use of servile labor
therein, subject to the condition of the extraditions of fugitives from
service due in any other part of the United States. Subsequently to the
adoption of the Constitution this provision ceased to remain as a law,
for its operation as such was absolutely superseded by the Constitution.
But the recollection of the fact excited the zeal of social propagandism
in some sections of the Confederation, and when a second State, that of
Missouri, came to be formed in the territory of Louisiana proposition
was made to extend to the latter territory the restriction originally
applied to the country situated between the rivers Ohio and Mississippi.

Most questionable as was this proposition in all its constitutional
relations, nevertheless it received the sanction of Congress, with some
slight modifications of line, to save the existing rights of the
intended new State. It was reluctantly acquiesced in by Southern States
as a sacrifice to the cause of peace and of the Union, not only of the
rights stipulated by the treaty of Louisiana, but of the principle of
equality among the States guaranteed by the Constitution. It was
received by the Northern States with angry and resentful condemnation
and complaint, because it did not concede all which they had exactingly
demanded. Having passed through the forms of legislation, it took its
place in the statute book, standing open to repeal, like any other act
of doubtful constitutionality, subject to be pronounced null and void by
the courts of law, and possessing no possible efficacy to control the
rights of the States which might thereafter be organized out of any part
of the original territory of Louisiana.

In all this, if any aggression there were, any innovation upon
preexisting rights, to which portion of the Union are they justly
chargeable? This controversy passed away with the occasion, nothing
surviving it save the dormant letter of the statute.

But long afterwards, when by the proposed accession of the Republic of
Texas the United States were to take their next step in territorial
greatness, a similar contingency occurred and became the occasion for
systematized attempts to intervene in the domestic affairs of one
section of the Union, in defiance of their rights as States and of the
stipulations of the Constitution. These attempts assumed a practical
direction in the shape of persevering endeavors by some of the
Representatives in both Houses of Congress to deprive the Southern
States of the supposed benefit of the provisions of the act authorizing
the organization of the State of Missouri.

But the good sense of the people and the vital force of the Constitution
triumphed over sectional prejudice and the political errors of the day,
and the State of Texas returned to the Union as she was, with social
institutions which her people had chosen for themselves and with express
agreement by the reannexing act that she should be susceptible of
subdivision into a plurality of States.

Whatever advantage the interests of the Southern States, as such, gained
by this were far inferior in results, as they unfolded in the progress
of time, to those which sprang from previous concessions made by the
South.

To every thoughtful friend of the Union, to the true lovers of their
country, to all who longed and labored for the full success of this
great experiment of republican institutions, it was cause of gratulation
that such an opportunity had occurred to illustrate our advancing power
on this continent and to furnish to the world additional assurance of
the strength and stability of the Constitution. Who would wish to see
Florida still a European colony? Who would rejoice to hail Texas as a
lone star instead of one in the galaxy of States? Who does not
appreciate the incalculable benefits of the acquisition of Louisiana?
And yet narrow views and sectional purposes would inevitably have
excluded them all from the Union.

But another struggle on the same point ensued when our victorious armies
returned from Mexico and it devolved on Congress to provide for the
territories acquired by the treaty of Guadalupe Hidalgo. The great
relations of the subject had now become distinct and clear to the
perception of the public mind, which appreciated the evils of sectional
controversy upon the question of the admission of new States. In that
crisis intense solicitude pervaded the nation. But the patriotic
impulses of the popular heart, guided by the admonitory advice of the
Father of his Country, rose superior to all the difficulties of the
incorporation of a new empire into the Union. In the counsels of
Congress there was manifested extreme antagonism of opinion and action
between some Representatives, who sought by the abusive and
unconstitutional employment of the legislative powers of the Government
to interfere in the condition of the inchoate States and to impose their
own social theories upon the latter, and other Representatives, who
repelled the interposition of the General Government in this respect and
maintained the self-constituting rights of the States. In truth, the
thing attempted was in form alone action of the General Government,
while in reality it was the endeavor, by abuse of legislative power, to
force the ideas of internal policy entertained in particular States upon
allied independent States. Once more the Constitution and the Union
triumphed signally. The new territories were organized without
restrictions on the disputed point, and were thus left to judge in that
particular for themselves; and the sense of constitutional faith proved
vigorous enough in Congress not only to accomplish this primary object,
but also the incidental and hardly less important one of so amending the
provisions of the statute for the extradition of fugitives from service
as to place that public duty under the safeguard of the General
Government, and thus relieve it from obstacles raised up by the
legislation of some of the States.

Vain declamation regarding the provisions of law for the extradition of
fugitives from service, with occasional episodes of frantic effort to
obstruct their execution by riot and murder, continued for a brief time
to agitate certain localities. But the true principle of leaving each
State and Territory to regulate its own laws of labor according to its
own sense of right and expediency had acquired fast hold of the public
judgment, to such a degree that by common consent it was observed in the
organization of the Territory of Washington. When, more recently, it
became requisite to organize the Territories of Nebraska and Kansas, it
was the natural and legitimate, if not the inevitable, consequence of
previous events and legislation that the same great and sound principle
which had already been applied to Utah and New Mexico should be applied
to them--that they should stand exempt from the restrictions proposed in
the act relative to the State of Missouri.

These restrictions were, in the estimation of many thoughtful men, null
from the beginning, unauthorized by the Constitution, contrary to the
treaty stipulations for the cession of Louisiana, and inconsistent with
the equality of these States.

They had been stripped of all moral authority by persistent efforts to
procure their indirect repeal through contradictory enactments. They had
been practically abrogated by the legislation attending the organization
of Utah, New Mexico, and Washington. If any vitality remained in them it
would have been taken away, in effect, by the new Territorial acts in
the form originally proposed to the Senate at the first session of the
last Congress. It was manly and ingenuous, as well as patriotic and
just, to do this directly and plainly, and thus relieve the statute book
of an act which might be of possible future injury, but of no possible
future benefit; and the measure of its repeal was the final consummation
and complete recognition of the principle that no portion of the United
States shall undertake through assumption of the powers of the General
Government to dictate the social institutions of any other portion.

The scope and effect of the language of repeal were not left in doubt.
It was declared in terms to be "the true intent and meaning of this act
not to legislate slavery into any Territory or State, nor to exclude it
therefrom, but to leave the people thereof perfectly free to form and
regulate their domestic institutions in their own way, subject only to
the Constitution of the United States."

The measure could not be withstood upon its merits alone. It was
attacked with violence on the false or delusive pretext that it
constituted a breach of faith. Never was objection more utterly
destitute of substantial justification. When before was it imagined by
sensible men that a regulative or declarative statute, whether enacted
ten or forty years ago, is irrepealable; that an act of Congress is
above the Constitution? If, indeed, there were in the facts any cause to
impute bad faith, it would attach to those only who have never ceased,
from the time of the enactment of the restrictive provision to the
present day, to denounce and condemn it; who have constantly refused to
complete it by needful supplementary legislation; who have spared no
exertion to deprive it of moral force; who have themselves again and
again attempted its repeal by the enactment of incompatible provisions,
and who, by the inevitable reactionary effect of their own violence on
the subject, awakened the country to perception of the true
constitutional principle of leaving the matter involved to the
discretion of the people of the respective existing or incipient States.

It is not pretended that this principle or any other precludes the
possibility of evils in practice, disturbed, as political action is
liable to be, by human passions. No form of government is exempt from
inconveniences; but in this case they are the result of the abuse, and
not of the legitimate exercise, of the powers reserved or conferred in
the organization of a Territory. They are not to be charged to the great
principle of popular sovereignty. On the contrary, they disappear before
the intelligence and patriotism of the people, exerting through the
ballot box their peaceful and silent but irresistible power.

If the friends of the Constitution are to have another struggle, its
enemies could not present a more acceptable issue than that of a State
whose constitution clearly embraces "a republican form of government"
being excluded from the Union because its domestic institutions may not
in all respects comport with the ideas of what is wise and expedient
entertained in some other State. Fresh from groundless imputations of
breach of faith against others, men will commence the agitation of this
new question with indubitable violation of an express compact between
the independent sovereign powers of the United States and of the
Republic of Texas, as well as of the older and equally solemn compacts
which assure the equality of all the States.

But deplorable as would be such a violation of compact in itself and in
all its direct consequences, that is the very least of the evils
involved. When sectional agitators shall have succeeded in forcing on
this issue, can their pretensions fail to be met by counter pretensions?
Will not different States be compelled, respectively, to meet extremes
with extremes? And if either extreme carry its point, what is that so
far forth but dissolution of the Union? If a new State, formed from the
territory of the United States, be absolutely excluded from admission
therein, that fact of itself constitutes the disruption of union between
it and the other States. But the process of dissolution could not stop
there. Would not a sectional decision producing such result by a
majority of votes, either Northern or Southern, of necessity drive out
the oppressed and aggrieved minority and place in presence of each other
two irreconcilably hostile confederations?

It is necessary to speak thus plainly of projects the offspring of that
sectional agitation now prevailing in some of the States, which are as
impracticable as they are unconstitutional, and which if persevered in
must and will end calamitously. It is either disunion and civil war or
it is mere angry, idle, aimless disturbance of public peace and
tranquillity. Disunion for what? If the passionate rage of fanaticism
and partisan spirit did not force the fact upon our attention, it would
be difficult to believe that any considerable portion of the people of
this enlightened country could have so surrendered themselves to a
fanatical devotion to the supposed interests of the relatively few
Africans in the United States as totally to abandon and disregard the
interests of the 25,000,000 Americans; to trample under foot the
injunctions of moral and constitutional obligation, and to engage in
plans of vindictive hostility against those who are associated with them
in the enjoyment of the common heritage of our national institutions.

Nor is it hostility against their fellow-citizens of one section of the
Union alone. The interests, the honor, the duty, the peace, and the
prosperity of the people of all sections are equally involved and
imperiled in this question. And are patriotic men in any part of the
Union prepared on such issue thus madly to invite all the consequences
of the forfeiture of their constitutional engagements? It is impossible.
The storm of frenzy and faction must inevitably dash itself in vain
against the unshaken rock of the Constitution. I shall never doubt it. I
know that the Union is stronger a thousand times than all the wild and
chimerical schemes of social change which are generated one after
another in the unstable minds of visionary sophists and interested
agitators. I rely confidently on the patriotism of the people, on the
dignity and self-respect of the States, on the wisdom of Congress, and,
above all, on the continued gracious favor of Almighty God to maintain
against all enemies, whether at home or abroad, the sanctity of the
Constitution and the integrity of the Union.

***

State of the Union Address
Franklin Pierce
December 2, 1856

Fellow-Citizens of the Senate and of the House of Representatives:

The Constitution requires that the President shall from time to time not
only recommend to the consideration of Congress such measures as he may
judge necessary and expedient, but also that he shall give information
to them of the state of the Union. To do this fully involves exposition
of all matters in the actual condition of the country, domestic or
foreign, which essentially concern the general welfare. While performing
his constitutional duty in this respect, the President does not speak
merely to express personal convictions, but as the executive minister of
the Government, enabled by his position and called upon by his official
obligations to scan with an impartial eye the interests of the whole and
of every part of the United States.

Of the condition of the domestic interests of the Union--its
agriculture, mines, manufactures, navigation, and commerce--it is
necessary only to say that the internal prosperity of the country, its
continuous and steady advancement in wealth and population and in
private as well as public well-being, attest the wisdom of our
institutions and the predominant spirit of intelligence and patriotism
which, notwithstanding occasional irregularities of opinion or action
resulting from popular freedom, has distinguished and characterized the
people of America. In the brief interval between the termination of the
last and the commencement of the present session of Congress the public
mind has been occupied with the care of selecting for another
constitutional term the President and Vice-President of the United
States.

The determination of the persons who are of right, or contingently, to
preside over the administration of the Government is under our system
committed to the States and the people. We appeal to them, by their
voice pronounced in the forms of law, to call whomsoever they will to
the high post of Chief Magistrate.

And thus it is that as the Senators represent the respective States of
the Union and the members of the House of Representatives the several
constituencies of each State, so the President represents the aggregate
population of the United States. Their election of him is the explicit
and solemn act of the sole sovereign authority of the Union.

It is impossible to misapprehend the great principles which by their
recent political action the people of the United States have sanctioned
and announced.

They have asserted the constitutional equality of each and all of the
States of the Union as States: they have affirmed the constitutional
equality of each and all of the citizens of the United States as
citizens, whatever their religion, wherever their birth or their
residence; they have maintained the inviolability of the constitutional
rights of the different sections of the Union, and they have proclaimed
their devoted and unalterable attachment to the Union and to the
Constitution, as objects of interest superior to all subjects of local
or sectional controversy, as the safeguard of the rights of all, as the
spirit and the essence of the liberty, peace, and greatness of the
Republic. In doing this they have at the same time emphatically
condemned the idea of organizing in these United States mere
geographical parties, of marshaling in hostile array toward each other
the different parts of the country, North or South, East or West.

Schemes of this nature, fraught with incalculable mischief, and which
the considerate sense of the people has rejected, could have had
countenance in no part of the country had they not been disguised by
suggestions plausible in appearance, acting upon an excited state of the
public mind, induced by causes temporary in their character and, it is
to be hoped, transient in their influence.

Perfect liberty of association for political objects and the widest
scope of discussion are the received and ordinary conditions of
government in our country. Our institutions, framed in the spirit of
confidence in the intelligence and integrity of the people, do not
forbid citizens, either individually or associated together, to attack
by writing, speech, or any other methods short of physical force the
Constitution and the very existence of the Union. Under the shelter of
this great liberty, and protected by the laws and usages of the
Government they assail, associations have been formed in some of the
States of individuals who, pretending to seek only to prevent the spread
of the institution of slavery into the present or future inchoate States
of the Union, are really inflamed with desire to change the domestic
institutions of existing States. To accomplish their objects they
dedicate themselves to the odious task of depreciating the government
organization which stands in their way and of calumniating with
indiscriminate invective not only the citizens of particular States with
whose laws they find fault, but all others of their fellow citizens
throughout the country who do not participate with them in their
assaults upon the Constitution, framed and adopted by our fathers, and
claiming for the privileges it has secured and the blessings it has
conferred the steady support and grateful reverence of their children.
They seek an object which they well know to be a revolutionary one. They
are perfectly aware that the change in the relative condition of the
white and black races in the slaveholding States which they would
promote is beyond their lawful authority; that to them it is a foreign
object; that it can not be effected by any peaceful instrumentality of
theirs; that for them and the States of which they are citizens the only
path to its accomplishment is through burning cities, and ravaged
fields, and slaughtered populations, and all there is most terrible in
foreign complicated with civil and servile war; and that the first step
in the attempt is the forcible disruption of a country embracing in its
broad bosom a degree of liberty and an amount of individual and public
prosperity to which there is no parallel in history, and substituting in
its place hostile governments, driven at once and inevitably into mutual
devastation and fratricidal carnage, transforming the now peaceful and
felicitous brotherhood into a vast permanent camp of armed men like the
rival monarchies of Europe and Asia. Well knowing that such, and such
only, are the means and the consequences of their plans and purposes,
they endeavor to prepare the people of the United States for civil war
by doing everything in their power to deprive the Constitution and the
laws of moral authority and to undermine the fabric of the Union by
appeals to passion and sectional prejudice, by indoctrinating its people
with reciprocal hatred, and by educating them to stand face to face as
enemies, rather than shoulder to shoulder as friends.

It is by the agency of such unwarrantable interference, foreign and
domestic, that the minds of many otherwise good citizens have been so
inflamed into the passionate condemnation of the domestic institutions
of the Southern States as at length to pass insensibly to almost equally
passion late hostility toward their fellow-citizens of those States, and
thus finally to fall into temporary fellowship with the avowed and
active enemies of the Constitution. Ardently attached to liberty in the
abstract, they do not stop to consider practically how the objects they
would attain can be accomplished, nor to reflect that, even if the evil
were as great as they deem it, they have no remedy to apply, and that it
can be only aggravated by their violence and unconstitutional action. A
question which is one of the most difficult of all the problems of
social institution, political economy, and statesmanship they treat with
unreasoning intemperance of thought and language. Extremes beget
extremes. Violent attack from the North finds its inevitable consequence
in the growth of a spirit of angry defiance at the South. Thus in the
progress of events we had reached that consummation, which the voice of
the people has now so pointedly rebuked, of the attempt of a portion of
the States, by a sectional organization and movement, to usurp the
control of the Government of the United States.

I confidently believe that the great body of those who inconsiderately
took this fatal step are sincerely attached to the Constitution and the
Union. They would upon deliberation shrink with unaffected horror from
any conscious act of disunion or civil war. But they have entered into a
path which leads nowhere unless it be to civil war and disunion, and
which has no other possible outlet. They have proceeded thus far in that
direction in consequence of the successive stages of their progress
having consisted of a series of secondary issues, each of which
professed to be confined within constitutional and peaceful limits, but
which attempted indirectly what few men were willing to do directly;
that is, to act aggressively against the constitutional rights of nearly
one-half of the thirty-one States.

In the long series of acts of indirect aggression, the first was the
strenuous agitation by citizens of the Northern States, in Congress and
out of it, of the question of Negro emancipation in the Southern States.

The second step in this path of evil consisted of acts of the people of
the Northern States, and in several instances of their governments,
aimed to facilitate the escape of persons held to service in the
Southern States and to prevent their extradition when reclaimed
according to law and in virtue of express provisions of the
Constitution. To promote this object, legislative enactments and other
means were adopted to take away or defeat rights which the Constitution
solemnly guaranteed. In order to nullify the then existing act of
Congress concerning the extradition of fugitives from service, laws were
enacted in many States forbidding their officers, under the severest
penalties, to participate in the execution of any act of Congress
whatever. In this way that system of harmonious cooperation between the
authorities of the United States and of the several States, for the
maintenance of their common institutions, which existed in the early
years of the Republic was destroyed; conflicts of jurisdiction came to
be frequent, and Congress found itself compelled, for the support of the
Constitution and the vindication of its power, to authorize the
appointment of new officers charged with the execution of its acts, as
if they and the officers of the States were the ministers, respectively,
of foreign governments in a state of mutual hostility rather than
fellow-magistrates of a common country peacefully subsisting under the
protection of one well-constituted Union. Thus here also aggression was
followed by reaction, and the attacks upon the Constitution at this
point did but serve to raise up new barriers for its defense and
security.

The third stage of this unhappy sectional controversy was in connection
with the organization of Territorial governments and the admission of
new States into the Union. When it was proposed to admit the State of
Maine, by separation of territory from that of Massachusetts, and the
State of Missouri, formed of a portion of the territory ceded by France
to the United States, representatives in Congress objected to the
admission of the latter unless with conditions suited to particular
views of public policy. The imposition of such a condition was
successfully resisted; but at the same period the question was presented
of imposing restrictions upon the residue of the territory ceded by
France. That question was for the time disposed of by the adoption of a
geographical line of limitation.

In this connection it should not be forgotten that when France, of her
own accord, resolved, for considerations of the most farsighted
sagacity, to cede Louisiana to the United States, and that accession was
accepted by the United States, the latter expressly engaged that "the
inhabitants of the ceded territory shall be incorporated in the Union of
the United States and admitted as soon as possible, according to the
principles of the Federal Constitution, to the enjoyment of all the
rights, advantages, and immunities of citizens of the United States; and
in the meantime they shall be maintained and protected in the free
enjoyment of their liberty, property, and the religion which they
profess;" that is to say, while it remains in a Territorial condition
its inhabitants are maintained and protected in the free enjoyment of
their liberty and property, with a right then to pass into the condition
of States on a footing of perfect equality with the original States.

The enactment which established the restrictive geographical line was
acquiesced in rather than approved by the States of the Union. It stood
on the statute book, however, for a number of years; and the people of
the respective States acquiesced in the reenactment of the principle as
applied to the State of Texas, and it was proposed to acquiesce in its
further application to the territory acquired by the United States from
Mexico. But this proposition was successfully resisted by the
representatives from the Northern States, who, regardless of the statute
line, insisted upon applying restriction to the new territory generally,
whether lying north or south of it, thereby repealing it as a
legislative compromise, and, on the part of the North, persistently
violating the compact, if compact there was.

Thereupon this enactment ceased to have binding virtue in any sense,
whether as respects the North or the South, and so in effect it was
treated on the occasion of the admission of the State of California and
the organization of the Territories of New Mexico, Utah, and Washington.

Such was the state of this question when the time arrived for the
organization of the Territories of Kansas and Nebraska. In the progress
of constitutional inquiry and reflection it had now at length come to be
seen clearly that Congress does not possess constitutional power to
impose restrictions of this character upon any present or future State
of the Union. In a long series of decisions, on the fullest argument and
after the most deliberate consideration, the Supreme Court of the United
States had finally determined this point in every form under which the
question could arise, whether as affecting public or private rights--in
questions of the public domain, of religion, of navigation, and of
servitude.

The several States of the Union are by force of the Constitution coequal
in domestic legislative power. Congress can not change a law of domestic
relation in the State of Maine; no more can it in the State of Missouri.
Any statute which proposes to do this is a mere nullity; it takes away
no right, it confers none. If it remains on the statute book unrepealed,
it remains there only as a monument of error and a beacon of warning to
the legislator and the statesman. To repeal it will be only to remove
imperfection from the statutes, without affecting, either in the sense
of permission, or of prohibition, the action of the States or of their
citizens.

Still, when the nominal restriction of this nature, already a dead
letter in law, was in terms repealed by the last Congress, in a clause
of the act organizing the Territories of Kansas and Nebraska, that
repeal was made the occasion of a widespread and dangerous agitation. It
was alleged that the original enactment being a compact of perpetual
moral obligation, its repeal constituted an odious breach of faith. An
act of Congress, while it remains unrepealed, more especially if it be
constitutionally valid in the judgment of those public functionaries
whose duty it is to pronounce on that point, is undoubtedly binding on
the conscience of each good citizen of the Republic. But in what sense
can it be asserted that the enactment in question was invested with
perpetuity and entitled to the respect of a solemn Compact? Between whom
was the compact? No distinct contending powers of the Government, no
separate sections of the Union treating as such, entered into treaty
stipulations on the subject. It was a mere clause of an act of Congress,
and, like any other controverted matter of legislation, received its
final shape and was passed by compromise of the conflicting opinions or
sentiments of the members of Congress. But if it had moral authority
over men's consciences, to whom did this authority attach? Not to those
of the North, who had repeatedly refused to confirm it by extension and
who had zealously striven to establish other and incompatible
regulations upon the subject. And if, as it thus appears, the supposed
compact had no obligatory force as to the North, of course it could not
have had any as to the South, for all such compacts must be mutual and
of reciprocal obligation.

It has not unfrequently happened that lawgivers, with undue estimation
of the value of the law they give or in the view of imparting to it
peculiar strength, make it perpetual in terms; but they can not thus
bind the conscience, the judgment, and the will of those who may succeed
them, invested with similar responsibilities and clothed with equal
authority. More careful investigation may prove the law to be unsound in
principle. Experience may show it to be imperfect in detail and
impracticable in execution. And then both reason and right combine not
merely to justify but to require its repeal.

The Constitution, supreme, as it is, over all the departments of the
Government--legislative, executive, and judicial--is open to amendment
by its very terms; and Congress or the States may, in their discretion,
propose amendment to it, solemn compact though it in truth is between
the sovereign States of the Union. In the present instance a political
enactment which had ceased to have legal power or authority of any kind
was repealed. The position assumed that Congress had no moral right to
enact such repeal was strange enough, and singularly so in view of the
fact that the argument came from those who openly refused obedience to
existing laws of the land, having the same popular designation and
quality as compromise acts; nay, more, who unequivocally disregarded and
condemned the most positive and obligatory injunctions of the
Constitution itself, and sought by every means within their reach to
deprive a portion of their fellow-citizens of the equal enjoyment of
those rights and privileges guaranteed alike to all by the fundamental
compact of our Union.

This argument against the repeal of the statute line in question was
accompanied by another of congenial character and equally with the
former destitute of foundation in reason and truth. It was imputed that
the measure originated in the conception of extending the limits of
slave labor beyond those previously assigned to it, and that such was
its natural as well as intended effect; and these baseless assumptions
were made, in the Northern States, the ground of unceasing assault upon
constitutional right.

The repeal in terms of a statute, which was already obsolete and also
null for unconstitutionality, could have no influence to obstruct or to
promote the propagation of conflicting views of political or social
institution. When the act organizing the Territories of Kansas and
Nebraska was passed, the inherent effect upon that portion of the public
domain thus opened to legal settlement was to admit settlers from all
the States of the Union alike, each with his convictions of public
policy and private interest, there to found, in their discretion,
subject to such limitations as the Constitution and acts of Congress
might prescribe, new States, hereafter to be admitted into the Union. It
was a free field, open alike to all, whether the statute line of assumed
restriction were repealed or not. That repeal did not open to free
competition of the diverse opinions and domestic institutions a field
which without such repeal would have been closed against them; it found
that field of competition already opened, in fact and in law. All the
repeal did was to relieve the statute book of an objectionable
enactment, unconstitutional in effect and injurious in terms to a large
portion of the States.

Is it the fact that in all the unsettled regions of the United States,
if emigration be left free to act in this respect for itself, without
legal prohibitions on either side, slave labor will spontaneously go
everywhere in preference to free labor? Is it the fact that the peculiar
domestic institutions of the Southern States possess relatively so much
of vigor that wheresoever an avenue is freely opened to all the world
they will penetrate to the exclusion of those of the Northern States? Is
it the fact that the former enjoy, compared with the latter, such
irresistibly superior vitality, independent of climate, soil, and all
other accidental circumstances, as to be able to produce the supposed
result in spite of the assumed moral and natural obstacles to its
accomplishment and of the more numerous population of the Northern
States? The argument of those who advocate the enactment of new laws of
restriction and condemn the repeal of old ones in effect avers that
their particular views of government have no self-extending or
self-sustaining power of their own, and will go nowhere unless forced by
act of Congress. And if Congress do but pause for a moment in the policy
of stern coercion; if it venture to try the experiment of leaving men to
judge for themselves what institutions will best suit them; if it be not
strained up to perpetual legislative exertion on this point--if Congress
proceed thus to act in the very spirit of liberty, it is at once charged
with aiming to extend slave labor into all the new Territories of the
United States.

Of course these imputations on the intentions of Congress in this
respect, conceived, as they were, in prejudice and disseminated in
passion, are utterly destitute of any justification in the nature of
things and contrary to all the fundamental doctrines and principles of
civil liberty and self-government.

While, therefore, in general, the people of the Northern States have
never at any time arrogated for the Federal Government the power to
interfere directly with the domestic condition of persons in the
Southern States, but, on the contrary, have disavowed all such
intentions and have shrunk from conspicuous affiliation with those few
who pursue their fanatical objects avowedly through the contemplated
means of revolutionary change of the Government and with acceptance of
the necessary consequences--a civil and servile war--yet many citizens
have suffered themselves to be drawn into one evanescent political issue
of agitation after another, appertaining to the same set of opinions,
and which subsided as rapidly as they arose when it came to be seen, as
it uniformly did, that they were incompatible with the compacts of the
Constitution and the existence of the Union. Thus when the acts of some
of the States to nullify the existing extradition law imposed upon
Congress the duty of passing a new one, the country was invited by
agitators to enter into party organization for its repeal; but that
agitation speedily ceased by reason of the impracticability of its
object. So when the statute restriction upon the institutions of new
States by a geographical line had been repealed, the country was urged
to demand its restoration, and that project also died almost with its
birth. Then followed the cry of alarm from the North against imputed
Southern encroachments, which cry sprang in reality from the spirit of
revolutionary attack on the domestic institutions of the South, and,
after a troubled existence of a few months, has been rebuked by the
voice of a patriotic people.

Of this last agitation, one lamentable feature was that it was carried
on at the immediate expense of the peace and happiness of the people of
the Territory of Kansas. That was made the battlefield, not so much of
opposing factions or interests within itself as of the conflicting
passions of the whole people of the United States. Revolutionary
disorder in Kansas had its origin in projects of intervention
deliberately arranged by certain members of that Congress which enacted
the law for the organization of the Territory; and when propagandist
colonization of Kansas had thus been undertaken in one section of the
Union for the systematic promotion of its peculiar views of policy there
ensued as a matter of course a counteraction with opposite views in
other sections of the Union.

In consequence of these and other incidents, many acts of disorder, it
is undeniable, have been perpetrated in Kansas, to the occasional
interruption rather than the permanent suspension of regular government.
Aggressive and most reprehensible incursions into the Territory were
undertaken both in the North and the South, and entered it on its
northern border by the way of Iowa, as well as on the eastern by way of
Missouri; and there has existed within it a state of insurrection
against the constituted authorities, not without countenance from
inconsiderate persons in each of the great sections of the Union. But
the difficulties in that Territory have been extravagantly exaggerated
for purposes of political agitation elsewhere. The number and gravity of
the acts of violence have been magnified partly by statements entirely
untrue and partly by reiterated accounts of the same rumors or facts.
Thus the Territory has been seemingly filled with extreme violence, when
the whole amount of such acts has not been greater than what
occasionally passes before us in single cities to the regret of all good
citizens, but without being regarded as of general or permanent
political consequence.

Imputed irregularities in the elections had in Kansas, like occasional
irregularities of the same description in the States, were beyond the
sphere of action of the Executive. But incidents of actual violence or
of organized obstruction of law, pertinaciously renewed from time to
time, have been met as they occurred by such means as were available and
as the circumstances required, and nothing of this character now remains
to affect the general peace of the Union. The attempt of a part of the
inhabitants of the Territory to erect a revolutionary government, though
sedulously encouraged and supplied with pecuniary aid from active agents
of disorder in some of the States, has completely failed. Bodies of
armed men, foreign to the Territory, have been prevented from entering
or compelled to leave it; predatory bands, engaged in acts of rapine
under cover of the existing political disturbances, have been arrested
or dispersed, and every well-disposed person is now enabled once more to
devote himself in peace to the pursuits of prosperous industry, for the
prosecution of which he undertook to participate in the settlement of
the Territory.

It affords me unmingled satisfaction thus to announce the peaceful
condition of things in Kansas, especially considering the means to which
it was necessary to have recourse for the attainment of the end, namely,
the employment of a part of the military force of the United States. The
withdrawal of that force from its proper duty of defending the country
against foreign foes or the savages of the frontier to employ it for the
suppression of domestic insurrection is, when the exigency occurs, a
matter of the most earnest solicitude. On this occasion of imperative
necessity it has been done with the best results, and my satisfaction in
the attainment of such results by such means is greatly enhanced by the
consideration that, through the wisdom and energy of the present
executive of Kansas and the prudence, firmness, and vigilance of the
military officers on duty there tranquillity has been restored without
one drop of blood having been shed in its accomplishment by the forces
of the United States.

The restoration of comparative tranquillity in that Territory furnishes
the means of observing calmly and appreciating at their just value the
events which have occurred there and the discussions of which the
government of the Territory has been the subject. We perceive that
controversy concerning its future domestic institutions was inevitable;
that no human prudence, no form of legislation, no wisdom on the part of
Congress, could have prevented it.

It is idle to suppose that the particular provisions of their organic
law were the cause of agitation. Those provisions were but the occasion,
or the pretext, of an agitation which was inherent in the nature of
things. Congress legislated upon the subject in such terms as were most
consonant with the principle of popular sovereignty which underlies our
Government. It could not have legislated otherwise without doing
violence to another great principle of our institutions--the
imprescriptible right of equality of the several States.

We perceive also that sectional interests and party passions have been
the great impediment to the salutary operation of the organic principles
adopted and the chief cause of the successive disturbances in Kansas.
The assumption that because in the organization of the Territories of
Nebraska and Kansas Congress abstained from imposing restraints upon
them to which certain other Territories had been subject, therefore
disorders occurred in the latter Territory, is emphatically contradicted
by the fact that none have occurred in the former. Those disorders were
not the consequence, in Kansas, of the freedom of self-government
conceded to that Territory by Congress, but of unjust interference on
the part of persons not inhabitants of the Territory. Such interference,
wherever it has exhibited itself by acts of insurrectionary character or
of obstruction to process of law, has been repelled or suppressed by all
the means which the Constitution and the laws place in the hands of the
Executive.

In those parts of the United States where, by reason of the inflamed
state of the public mind, false rumors and misrepresentations have the
greatest currency it has been assumed that it was the duty of the
Executive not only to suppress insurrectionary movements in Kansas, but
also to see to the regularity of local elections. It needs little
argument to show that the President has no such power. All government in
the United States rests substantially upon popular election. The freedom
of elections is liable to be impaired by the intrusion of unlawful votes
or the exclusion of lawful ones, by improper influences, by violence, or
by fraud. But the people of the United States are themselves the all
sufficient guardians of their own rights, and to suppose that they will
not remedy in due season any such incidents of civil freedom is to
suppose them to have ceased to be capable of self-government. The
President of the United States has not power to interpose in elections,
to see to their freedom, to canvass their votes, or to pass upon their
legality in the Territories any more than in the States. If he had such
power the Government might be republican in form, but it would be a
monarchy in fact; and if he had undertaken to exercise it in the case of
Kansas he would have been justly subject to the charge of usurpation and
of violation of the dearest rights of the people of the United States.

Unwise laws, equally with irregularities at elections, are in periods of
great excitement the occasional incidents of even the freest and best
political institutions; but all experience demonstrates that in a
country like ours, where the right of self-constitution exists in the
completest form, the attempt to remedy unwise legislation by resort to
revolution is totally out of place, inasmuch as existing legal
institutions afford more prompt and efficacious means for the redress of
wrong.

I confidently trust that now, when the peaceful condition of Kansas
affords opportunity for calm reflection and wise legislation, either the
legislative assembly of the Territory or Congress will see that no act
shall remain on its statute book violative of the provisions of the
Constitution or subversive of the great objects for which that was
ordained and established, and will take all other necessary steps to
assure to its inhabitants the enjoyment, without obstruction or
abridgment, of all the constitutional rights, privileges, and immunities
of citizens of the United States, as contemplated by the organic law of
the Territory.

Full information in relation to recent events in this Territory will be
found in the documents communicated herewith from the Departments of
State and War.

I refer you to the report of the Secretary of the Treasury for
particular information concerning the financial condition of the
Government and the various branches of the public service connected with
the Treasury Department.

During the last fiscal year the receipts from customs were for the first
time more than $64,000,000, and from all sources $73,918,141, which,
with the balance on hand up to the 1st of July, 1855, made the total
resources of the year amount to $92,850,117. The expenditures, including
$3,000,000 in execution of the treaty with Mexico and excluding sums
paid on account of the public debt, amounted to $60,172,401, and
including the latter to $72,948,792, the payment on this account having
amounted to $12,776,390.

On the 4th of March, 1853, the amount of the public debt was
$69,129,937. There was a subsequent increase of $2,750,000 for the debt
of Texas, making a total of $71,879,937. Of this the sum of $45,525,319,
including premium, has been discharged, reducing the debt to
$30,963,909, all which might be paid within a year without embarrassing
the public service, but being not yet due and only redeemable at the
option of the holder, can not be pressed to payment by the Government.

On examining the expenditures of the last five years it will be seen
that the average, deducting payments on account of the public debt and
$10,000,000 paid by treaty to Mexico, has been but about $48,000,000. It
is believed that under an economical administration of the Government
the average expenditure for the ensuing five years will not exceed that
sum, unless extraordinary occasion for its increase should occur. The
acts granting bounty lands will soon have been executed, while the
extension of our frontier settlements will cause a continued demand for
lands and augmented receipts, probably, from that source. These
considerations will justify a reduction of the revenue from customs so
as not to exceed forty-eight or fifty million dollars. I think the
exigency for such reduction is imperative, and again urge it upon the
consideration of Congress.

The amount of reduction, as well as the manner of effecting it, are
questions of great and general interest, it being essential to
industrial enterprise and the public prosperity, as well as the dictate
of obvious justice, that the burden of taxation be made to rest as
equally as possible upon all classes and all sections and interests of
the country.

I have heretofore recommended to your consideration the revision of the
revenue laws, prepared under the direction of the Secretary of the
Treasury, and also legislation upon some special questions affecting the
business of that Department, more especially the enactment of a law to
punish the abstraction of official books or papers from the files of the
Government and requiring all such books and papers and all other public
property to be turned over by the outgoing officer to his successor; of
a law requiring disbursing officers to deposit all public money in the
vaults of the Treasury or in other legal depositories, where the same
are conveniently accessible, and a law to extend existing penal
provisions to all persons who may become possessed of public money by
deposit or otherwise and who shall refuse or neglect on due demand to
pay the same into the Treasury. I invite your attention anew to each of
these objects.

The Army during the past year has been so constantly employed against
hostile Indians in various quarters that it can scarcely be said, with
propriety of language, to have been a peace establishment. Its duties
have been satisfactorily performed, and we have reason to expect as a
result of the year's operations greater security to the frontier
inhabitants than has been hitherto enjoyed. Extensive combinations among
the hostile Indians of the Territories of Washington and Oregon at one
time threatened the devastation of the newly formed settlements of that
remote portion of the country. From recent information we are permitted
to hope that the energetic and successful operations conducted there
will prevent such combinations in future and secure to those Territories
an opportunity to make steady progress in the development of their
agricultural and mineral resources.

Legislation has been recommended by me on previous occasions to cure
defects in the existing organization and to increase the efficiency of
the Army, and further observation has but served to confirm me in the
views then expressed and to enforce on my mind the conviction that such
measures are not only proper, but necessary.

I have, in addition, to invite the attention of Congress to a change of
policy in the distribution of troops and to the necessity of providing a
more rapid increase of the military armament. For details of these and
other subjects relating to the Army I refer to the report of the
Secretary of War.

The condition of the Navy is not merely satisfactory, but exhibits the
most gratifying evidences of increased vigor. As it is comparatively
small, it is more important that it should be as complete as possible in
all the elements of strength; that it should be efficient in the
character of its officers, in the zeal and discipline of its men, in the
reliability of its ordnance, and in the capacity of its ships. In all
these various qualities the Navy has made great progress within the last
few years. The execution of the law of Congress of February 28, 1855,
"to promote the efficiency of the Navy," has been attended by the most
advantageous results. The law for promoting discipline among the men is
found convenient and salutary. The system of granting an honorable
discharge to faithful seamen on the expiration of the period of their
enlistment and permitting them to reenlist after a leave of absence of a
few months without cessation of pay is highly beneficial in its
influence. The apprentice system recently adopted is evidently destined
to incorporate into the service a large number of our countrymen,
hitherto so difficult to procure. Several hundred American boys are now
on a three years' cruise in our national vessels and will return
well-trained seamen. In the Ordnance Department there is a decided and
gratifying indication of progress, creditable to it and to the country.
The suggestions of the Secretary of the Navy in regard to further
improvement in that branch of the service I commend to your favorable
action. The new frigates ordered by Congress are now afloat and two of
them in active service. They are superior models of naval architecture,
and with their formidable battery add largely to public strength and
security. I concur in the views expressed by the Secretary of the
Department in favor of a still further increase of our naval force.

The report of the Secretary of the Interior presents facts and views in
relation to internal affairs over which the supervision of his
Department extends of much interest and importance.

The aggregate sales of the public lands during the last fiscal year
amount to 9,227,878 acres, for which has been received the sum of
$8,821,414. During the same period there have been located with military
scrip and land warrants and for other purposes 30,100,230 acres, thus
making a total aggregate of 39,328,108 acres. On the 30th of September
last surveys had been made of 16,873,699 acres, a large proportion of
which is ready for market.

The suggestions in this report in regard to the complication and
progressive expansion of the business of the different bureaus of the
Department, to the pension system, to the colonization of Indian tribes,
and the recommendations in relation to various improvements in the
District of Columbia are especially commended to your consideration.

The report of the Postmaster-General presents fully the condition of
that Department of the Government. Its expenditures for the last fiscal
year were $10,407,868 and its gross receipts $7,620,801, making an
excess of expenditure over receipts of $2,787,046. The deficiency of
this Department is thus $744,000 greater than for the year ending June
30, 1853. Of this deficiency $330,000 is to be attributed to the
additional compensation allowed to postmasters by the act of Congress of
June 22, 1854. The mail facilities in every part of the country have
been very much increased in that period, and the large addition of
railroad service, amounting to 7,908 miles, has added largely to the
cost of transportation.

The inconsiderable augmentation of the income of the Post-Office
Department under the reduced rates of postage and its increasing
expenditures must for the present make it dependent to some extent upon
the Treasury for support. The recommendations of the Postmaster-General
in relation to the abolition of the franking privilege and his views on
the establishment of mail steamship lines deserve the consideration of
Congress. I also call the special attention of Congress to the statement
of the Postmaster-General respecting the sums now paid for the
transportation of mails to the Panama Railroad Company, and commend to
their early and favorable consideration the suggestions of that officer
in relation to new contracts for mail transportation upon that route,
and also upon the Tehuantepec and Nicaragua routes.

The United States continue in the enjoyment of amicable relations with
all foreign powers.

When my last annual message was transmitted to Congress two subjects of
controversy, one relating to the enlistment of soldiers in this country
for foreign service and the other to Central America, threatened to
disturb the good understanding between the United States and Great
Britain. Of the progress and termination of the former question you were
informed at the time, and the other is now in the way of satisfactory
adjustment.

The object of the convention between the United States and Great Britain
of the 19th of April, 1850, was to secure for the benefit of all nations
the neutrality and the common use of any transit way or interoceanic
communication across the Isthmus of Panama which might be opened within
the limits of Central America. The pretensions subsequently asserted by
Great Britain to dominion or control over territories in or near two of
the routes, those of Nicaragua and Honduras, were deemed by the United
States not merely incompatible with the main object of the treaty, but
opposed even to its express stipulations. Occasion of controversy on
this point has been removed by an additional treaty, which our minister
at London has concluded, and which will be immediately submitted to the
Senate for its consideration. Should the proposed supplemental
arrangement be concurred in by all the parties to be affected by it, the
objects contemplated by the original convention will have been fully
attained.

The treaty between the United States and Great Britain of the 5th of
June, 1854, which went into effective operation in 1855, put an end to
causes of irritation between the two countries, by securing to the
United States the right of fishery on the coast of the British North
American Provinces, with advantages equal to those enjoyed by British
subjects. Besides the signal benefits of this treaty to a large class of
our citizens engaged in a pursuit connected to no inconsiderable degree
with our national prosperity and strength, it has had a favorable effect
upon other interests in the provision it made for reciprocal freedom of
trade between the United States and the British Provinces in America.
The exports of domestic articles to those Provinces during the last year
amounted to more than $22,000,000, exceeding those of the preceding year
by nearly $7,000,000; and the imports therefrom during the same period
amounted to more than twenty-one million, an increase of six million
upon those of the previous year.

The improved condition of this branch of our commerce is mainly
attributable to the above-mentioned treaty.

Provision was made in the first article of that treaty for a commission
to designate the mouths of rivers to which the common right of fishery
on the coast of the United States and the British Provinces was not to
extend. This commission has been employed a part of two seasons, but
without much progress in accomplishing the object for which it was
instituted, in consequence of a serious difference of opinion between
the commissioners, not only as to the precise point where the rivers
terminate, but in many instances as to what constitutes a river. These
difficulties, however, may be overcome by resort to the umpirage
provided for by the treaty.

The efforts perseveringly prosecuted since the commencement of my
Administration to relieve our trade to the Baltic from the exaction of
Sound dues by Denmark have not yet been attended with success. Other
governments have also sought to obtain a like relief to their commerce,
and Denmark was thus induced to propose an arrangement to all the
European powers interested in the subject, and the manner in which her
proposition was received warranting her to believe that a satisfactory
arrangement with them could soon be concluded, she made a strong appeal
to this Government for temporary suspension of definite action on its
part, in consideration of the embarrassment which might result to her
European negotiations by an immediate adjustment of the question with
the United States. This request has been acceded to upon the condition
that the sums collected after the 16th of June last and until the 16th
of June next from vessels and cargoes belonging to our merchants are to
be considered as paid under protest and subject to future adjustment.
There is reason to believe that an arrangement between Denmark and the
maritime powers of Europe on the subject will be soon concluded, and
that the pending negotiation with the United States may then be resumed
and terminated in a satisfactory manner.

With Spain no new difficulties have arisen, nor has much progress been
made in the adjustment of pending ones.

Negotiations entered into for the purpose of relieving our commercial
intercourse with the island of Cuba of some of its burdens and providing
for the more speedy settlement of local disputes growing out of that
intercourse have not yet been attended with any results. Soon after the
commencement of the late war in Europe this Government submitted to the
consideration of all maritime nations two principles for the security of
neutral commerce--one that the neutral flag should cover enemies' goods,
except articles contraband of war, and the other that neutral property
on board merchant vessels of belligerents should be exempt from
condemnation, with the exception of contraband articles. These were not
presented as new rules of international law, having been generally
claimed by neutrals, though not always admitted by belligerents. One of
the parties to the war (Russia), as well as several neutral powers,
promptly acceded to these propositions, and the two other principal
belligerents (Great Britain and France) having consented to observe them
for the present occasion, a favorable opportunity seemed to be presented
for obtaining a general recognition of them, both in Europe and America.
But Great Britain and France, in common with most of the States of
Europe, while forbearing to reject, did not affirmatively act upon the
overtures of the United States.

While the question was in this position the representatives of Russia,
France, Great Britain, Austria, Prussia, Sardinia, and Turkey, assembled
at Paris, took into consideration the subject of maritime rights, and
put forth a declaration containing the two principles which this
Government had submitted nearly two years before to the consideration of
maritime powers, and adding thereto the following propositions:
"Privateering is and remains abolished," and "Blockades in order to be
binding must be effective; that is to say, maintained by a force
sufficient really to prevent access to the coast of the enemy;" and to
the declaration thus composed of four points, two of which had already
been proposed by the United States, this Government has been invited to
accede by all the powers represented at Paris except Great Britain and
Turkey. To the last of the two additional propositions--that in relation
to blockades--there can certainly be no objection. It is merely the
definition of what shall constitute the effectual investment of a
blockaded place, a definition for which this Government has always
contended, claiming indemnity for losses where a practical violation of
the rule thus defined has been injurious to our commerce. As to the
remaining article of the declaration of the conference of Paris, that
"privateering is and remains abolished," I certainly can not ascribe to
the powers represented in the conference of Paris any but liberal and
philanthropic views in the attempt to change the unquestionable rule of
maritime law in regard to privateering. Their proposition was doubtless
intended to imply approval of the principle that private property upon
the ocean, although it might belong to the citizens of a belligerent
state, should be exempted from capture; and had that proposition been so
framed as to give full effect to the principle, it would have received
my ready assent on behalf of the United States. But the measure proposed
is inadequate to that purpose. It is true that if adopted private
property upon the ocean would be withdrawn from one mode of plunder, but
left exposed meanwhile to another mode, which could be used with
increased effectiveness. The aggressive capacity of great naval powers
would be thereby augmented, while the defensive ability of others would
be reduced. Though the surrender of the means of prosecuting hostilities
by employing privateers, as proposed by the conference of Paris, is
mutual in terms, yet in practical effect it would be the relinquishment
of a right of little value to one class of states, but of essential
importance to another and a far larger class. It ought not to have been
anticipated that a measure so inadequate to the accomplishment of the
proposed object and so unequal in its operation would receive the assent
of all maritime powers. Private property would be still left to the
depredations of the public armed cruisers.

I have expressed a readiness on the part of this Government to accede to
all the principles contained in the declaration of the conference of
Paris provided that the one relating to the abandonment of privateering
can be so amended as to effect the object for which, as is presumed, it
was intended--the immunity of private property on the ocean from hostile
capture. To effect this object, it is proposed to add to the declaration
that "privateering is and remains abolished" the following amendment:

And that the private property of subjects and citizens of a belligerent
on the high seas shall be exempt from seizure by the public armed
vessels of the other belligerent, except it be contraband.

This amendment has been presented not only to the powers which have
asked our assent to the declaration to abolish privateering, but to all
other maritime states. Thus far it has not been rejected by any, and is
favorably entertained by all which have made any communication in reply.

Several of the governments regarding with favor the proposition of the
United States have delayed definitive action upon it only for the
purpose of consulting with others, parties to the conference of Paris. I
have the satisfaction of stating, however, that the Emperor of Russia
has entirely and explicitly approved of that modification and will
cooperate in endeavoring to obtain the assent of other powers, and that
assurances of a similar purport have been received in relation to the
disposition of the Emperor of the French. The present aspect of this
important subject allows us to cherish the hope that a principle so
humane in its character, so just and equal in its operation, so
essential to the prosperity of commercial nations, and so consonant to
the sentiments of this enlightened period of the world will command the
approbation of all maritime powers, and thus be incorporated into the
code of international law.

My views on the subject are more fully set forth in the reply of the
Secretary of State, a copy of which is herewith transmitted, to the
communications on the subject made to this Government, especially to the
communication of France.

The Government of the United States has at all times regarded with
friendly interest the other States of America, formerly, like this
country, European colonies, and now independent members of the great
family of nations. But the unsettled condition of some of them,
distracted by frequent revolutions, and thus incapable of regular and
firm internal administration, has tended to embarrass occasionally our
public intercourse by reason of wrongs which our citizens suffer at
their hands, and which they are slow to redress.

Unfortunately, it is against the Republic of Mexico, with which it is
our special desire to maintain a good understanding, that such
complaints are most numerous; and although earnestly urged upon its
attention, they have not as yet received the consideration which this
Government had a right to expect. While reparation for past injuries has
been withheld, others have been added. The political condition of that
country, however, has been such as to demand forbearance on the part of
the United States. I shall continue my efforts to procure for the wrongs
of our citizens that redress which is indispensable to the continued
friendly association of the two Republics.

The peculiar condition of affairs in Nicaragua in the early part of the
present year rendered it important that this Government should have
diplomatic relations with that State. Through its territory had been
opened one of the principal thoroughfares across the isthmus connecting
North and South America, on which a vast amount of property was
transported and to which our citizens resorted in great numbers in
passing between the Atlantic and Pacific coasts of the United States.
The protection of both required that the existing power in that State
should be regarded as a responsible Government, and its minister was
accordingly received. But he remained here only a short time. Soon
thereafter the political affairs of Nicaragua underwent unfavorable
change and became involved in much uncertainty and confusion. Diplomatic
representatives from two contending parties have been recently sent to
this Government, but with the imperfect information possessed it was not
possible to decide which was the Government de facto, and, awaiting
further developments, I have refused to receive either.

Questions of the most serious nature are pending between the United
States and the Republic of New Granada. The Government of that Republic
undertook a year since to impose tonnage duties on foreign vessels in
her ports, but the purpose was resisted by this Government as being
contrary to existing treaty stipulations with the United States and to
rights conferred by charter upon the Panama Railroad Company, and was
accordingly refurbished at that time, it being admitted that our vessels
were entitled to be exempt from tonnage duty in the free ports of Panama
and Aspinwall. But the purpose has been recently revived on the part of
New Granada by the enactment of a law to subject vessels visiting her
ports to the tonnage duty of 40 cents per ton, and although the law has
not been put in force, yet the right to enforce it is still asserted and
may at any time be acted on by the Government of that Republic.

The Congress of New Granada has also enacted a law during the last year
which levies a tax of more than $3 on every pound of mail matter
transported across the Isthmus. The sum thus required to be paid on the
mails of the United States would be nearly $2,000,000 annually in
addition to the large sum payable by contract to the Panama Railroad
Company. If the only objection to this exaction were the exorbitancy of
its amount, it could not be submitted to by the United States.

The imposition of it, however, would obviously contravene our treaty
with New Granada and infringe the contract of that Republic with the
Panama Railroad Company. The law providing for this tax was by its terms
to take effect on the 1st of September last, but the local authorities
on the Isthmus have been induced to suspend its execution and to await
further instructions on the subject from the Government of the Republic.
I am not yet advised of the determination of that Government. If a
measure so extraordinary in its character and so clearly contrary to
treaty stipulations and the contract rights of the Panama Railroad
Company, composed mostly of American citizens, should be persisted in,
it will be the duty of the United States to resist its execution.

I regret exceedingly that occasion exists to invite your attention to a
subject of still graver import in our relations with the Republic of New
Granada. On the 15th day of April last a riotous assemblage of the
inhabitants of Panama committed a violent and outrageous attack on the
premises of the railroad company and the passengers and other persons in
or near the same, involving the death of several citizens of the United
States, the pillage of many others, and the destruction of a large
amount of property belonging to the railroad company. I caused full
investigation of that event to be made, and the result shows
satisfactorily that complete responsibility for what occurred attaches
to the Government of New Granada. I have therefore demanded of that
Government that the perpetrators of the wrongs in question should be
punished; that provision should be made for the families of citizens of
the United States who were killed, with full indemnity for the property
pillaged or destroyed.

The present condition of the Isthmus of Panama, in so far as regards the
security of persons and property passing over it, requires serious
consideration. Recent incidents tend to show that the local authorities
can not be relied on to maintain the public peace of Panama, and there
is just ground for apprehension that a portion of the inhabitants are
meditating further outrages, without adequate measures for the security
and protection of persons or property having been taken, either by the
State of Panama or by the General Government of New Granada. Under the
guaranties of treaty, citizens of the United States have, by the outlay
of several million dollars, constructed a railroad across the Isthmus,
and it has become the main route between our Atlantic and Pacific
possessions, over which multitudes of our citizens and a vast amount of
property are constantly passing; to the security and protection of all
which and the continuance of the public advantages involved it is
impossible for the Government of the United States to be indifferent.

I have deemed the danger of the recurrence of scenes of lawless violence
in this quarter so imminent as to make it my duty to station a part of
our naval force in the harbors of Panama and Aspinwall, in order to
protect the persons and property of the citizens of the United States in
those ports and to insure to them safe passage across the Isthmus. And
it would, in my judgment, be unwise to withdraw the naval force now in
those ports until, by the spontaneous action of the Republic of New
Granada or otherwise, some adequate arrangement shall have been made for
the protection and security of a line of interoceanic communication, so
important at this time not to the United States only, but to all other
maritime states, both of Europe and America.

Meanwhile negotiations have been instituted, by means of a special
commission, to obtain from New Granada full indemnity for injuries
sustained by our citizens on the Isthmus and satisfactory security for
the general interests of the United States.

In addressing to you my last annual message the occasion seems to me an
appropriate one to express my congratulations, in view of the peace,
greatness, and felicity which the United States now possess and enjoy.
To point you to the state of the various Departments of the Government
and of all the great branches of the public service, civil and military,
in order to speak of the intelligence and the integrity which pervades
the whole, would be to indicate but imperfectly the administrative
condition of the country and the beneficial effects of that on the
general welfare. Nor would it suffice to say that the nation is actually
at peace at home and abroad; that its industrial interests are
prosperous; that the canvas of its mariners whitens every sea, and the
plow of its husbandmen is marching steadily onward to the bloodless
conquest of the continent; that cities and populous States are springing
up, as if by enchantment, from the bosom of oar Western wilds, and that
the courageous energy of our people is making of these United States the
great Republic of the world. These results have not been attained
without passing through trials and perils, by experience of which, and
thus only, nations can harden into manhood. Our forefathers were trained
to the wisdom which conceived and the courage which achieved
independence by the circumstances which surrounded them, and they were
thus made capable of the creation of the Republic. It devolved on the
next generation to consolidate the work of the Revolution, to deliver
the country entirely from the influences of conflicting transatlantic
partialities or antipathies which attached to our colonial and
Revolutionary history, and to organize the practical operation of the
constitutional and legal institutions of the Union. To us of this
generation remains the not less noble task of maintaining and extending
the national power. We have at length reached that stage of our
country's career in which the dangers to be encountered and the
exertions to be made are the incidents, not of weakness, but of
strength. In foreign relations we have to attemper our power to the less
happy condition of other Republics in America and to place ourselves in
the calmness and conscious dignity of right by the side of the greatest
and wealthiest of the Empires of Europe. In domestic relations we have
to guard against the shock of the discontents, the ambitions, the
interests, and the exuberant, and therefore sometimes irregular,
impulses of opinion or of action which are the natural product of the
present political elevation, the self-reliance, and the restless spirit
of enterprise of the people of the United States.

I shall prepare to surrender the Executive trust to my successor and
retire to private life with sentiments of profound gratitude to the good
Providence which during the period of my Administration has vouchsafed
to carry the country through many difficulties, domestic and foreign,
and which enables me to contemplate the spectacle of amicable and
respectful relations between ours and all other governments and the
establishment of constitutional order and tranquillity throughout the
Union.

***

State of the Union Address
James Buchanan
December 8, 1857

Fellow-Citizens of the Senate and House of Representatives:

In obedience to the command of the Constitution, it has now become my
duty "to give to Congress information of the state of the Union and
recommend to their consideration such measures" as I judge to be
"necessary and expedient."

But first and above all, our thanks are due to Almighty God for the
numerous benefits which He has bestowed upon this people, and our united
prayers ought to ascend to Him that He would continue to bless our great
Republic in time to come as He has blessed it in time past. Since the
adjournment of the last Congress our constituents have enjoyed an
unusual degree of health. The earth has yielded her fruits abundantly
and has bountifully rewarded the toil of the husbandman. Our great
staples have commanded high prices, and up till within a brief period
our manufacturing, mineral, and mechanical occupations have largely
partaken of the general prosperity. We have possessed all the elements
of material wealth in rich abundance, and yet, notwithstanding all these
advantages, our country in its monetary interests is at the present
moment in a deplorable condition. In the midst of unsurpassed plenty in
all the productions of agriculture and in all the elements of national
wealth, we find our manufactures suspended, our public works retarded,
our private enterprises of different kinds abandoned, and thousands of
useful laborers thrown out of employment and reduced to want. The
revenue of the Government, which is chiefly derived from duties on
imports from abroad, has been greatly reduced, whilst the appropriations
made by Congress at its last session for the current fiscal year are
very large in amount.

Under these circumstances a loan may be required before the close of
your present session; but this, although deeply to be regretted, would
prove to be only a slight misfortune when compared with the suffering
and distress prevailing among the people. With this the Government can
not fail deeply to sympathize, though it may be without the power to
extend relief.

It is our duty to inquire what has produced such unfortunate results and
whether their recurrence can be prevented. In all former revulsions the
blame might have been fairly attributed to a variety of cooperating
causes, but not so upon the present occasion. It is apparent that our
existing misfortunes have proceeded solely from our extravagant and
vicious system of paper currency and bank credits, exciting the people
to wild speculations and gambling in stocks. These revulsions must
continue to recur at successive intervals so long as the amount of the
paper currency and bank loans and discounts of the country shall be left
to the discretion of 1,400 irresponsible banking institutions, which
from the very law of their nature will consult the interest of their
stockholders rather than the public welfare.

The framers of the Constitution, when they gave to Congress the power
"to coin money and to regulate the value thereof" and prohibited the
States from coining money, emitting bills of credit, or making anything
but gold and silver coin a tender in payment of debts, supposed they had
protected the people against the evils of an excessive and irredeemable
paper currency. They are not responsible for the existing anomaly that a
Government endowed with the sovereign attribute of coining money and
regulating the value thereof should have no power to prevent others from
driving this coin out of the country and filling up the channels of
circulation with paper which does not represent gold and silver.

It is one of the highest and most responsible duties of Government to
insure to the people a sound circulating medium, the amount of which
ought to be adapted with the utmost possible wisdom and skill to the
wants of internal trade and foreign exchanges. If this be either greatly
above or greatly below the proper standard, the marketable value of
every man's property is increased or diminished in the same proportion,
and injustice to individuals as well as incalculable evils to the
community are the consequence.

Unfortunately, under the construction of the Federal Constitution which
has now prevailed too long to be changed this important and delicate
duty has been dissevered from the coining power and virtually
transferred to more than 1,400 State banks acting independently of each
other and regulating their paper issues almost exclusively by a regard
to the present interest of their stockholders. Exercising the sovereign
power of providing a paper currency instead of coin for the country, the
first duty which these banks owe to the public is to keep in their
vaults a sufficient amount of gold and silver to insure the
convertibility of their notes into coin at all times and under all
circumstances. No bank ought ever to be chartered without such
restrictions on its business as to secure this result. All other
restrictions are comparatively vain. This is the only true touchstone,
the only efficient regulator of a paper currency--the only one which can
guard the public against overissues and bank suspensions. As a
collateral and eventual security, it is doubtless wise, and in all cases
ought to be required, that banks shall hold an amount of United States
or State securities equal to their notes in circulation and pledged for
their redemption. This, however, furnishes no adequate security against
overissue. On the contrary, it may be perverted to inflate the currency.
Indeed, it is possible by this means to convert all the debts of the
United States and State Governments into bank notes, without reference
to the specie required to redeem them. However valuable these securities
may be in themselves, they can not be converted into gold and silver at
the moment of pressure, as our experience teaches, in sufficient time to
prevent bank suspensions and the depreciation of bank notes. In England,
which is to a considerable extent a paper-money country, though vastly
behind our own in this respect, it was deemed advisable, anterior to the
act of Parliament of 1844, which wisely separated the issue of notes
from the banking department, for the Bank of England always to keep on
hand gold and silver equal to one-third of its combined circulation and
deposits. If this proportion was no more than sufficient to secure the
convertibility of its notes with the whole of Great Britain and to some
extent the continent of Europe as a field for its circulation, rendering
it almost impossible that a sudden and immediate run to a dangerous
amount should be made upon it, the same proportion would certainly be
insufficient under our banking system. Each of our 1,400 banks has but a
limited circumference for its circulation, and in the course of a very
few days the depositors and note holders might demand from such a bank a
sufficient amount in specie to compel it to suspend, even although it
had coin in its vaults equal to one-third of its immediate liabilities.
And yet I am not aware, with the exception of the banks of Louisiana,
that any State bank throughout the Union has been required by its
charter to keep this or any other proportion of gold and silver compared
with the amount of its combined circulation and deposits. What has been
the consequence? In a recent report made by the Treasury Department on
the condition of the banks throughout the different States, according to
returns dated nearest to January, 1857, the aggregate amount of actual
specie in their vaults is $58,349,838, of their circulation
$214,778,822, and of their deposits $230,351,352. Thus it appears that
these banks in the aggregate have considerably less than one dollar in
seven of gold and silver compared with their circulation and deposits.
It was palpable, therefore, that the very first pressure must drive them
to suspension and deprive the people of a convertible currency, with all
its disastrous consequences. It is truly wonderful that they should have
so long continued to preserve their credit when a demand for the payment
of one-seventh of their immediate liabilities would have driven them
into insolvency. And this is the condition of the banks, notwithstanding
that four hundred millions of gold from California have flowed in upon
us within the last eight years, and the tide still continues to flow.
Indeed, such has been the extravagance of bank credits that the banks
now hold a considerably less amount of specie, either in proportion to
their capital or to their circulation and deposits combined, than they
did before the discovery of gold in California. Whilst in the year 1848
their specie in proportion to their capital was more than equal to one
dollar for four and a half, in 1857 it does not amount to one dollar for
every six dollars and thirty-three cents of their capital. In the year
1848 the specie was equal within a very small fraction to one dollar in
five of their circulation and deposits; in 1857 it is not equal to one
dollar in seven and a half of their circulation and deposits.

From this statement it is easy to account for our financial history for
the last forty years. It has been a history of extravagant expansions in
the business of the country, followed by ruinous contractions. At
successive intervals the best and most enterprising men have been
tempted to their ruin by excessive bank loans of mere paper credit,
exciting them to extravagant importations of foreign goods, wild
speculations, and ruinous and demoralizing stock gambling. When the
crisis arrives, as arrive it must, the banks can extend no relief to the
people. In a vain struggle to redeem their liabilities in specie they
are compelled to contract their loans and their issues, and at last, in
the hour of distress, when their assistance is most needed, they and
their debtors together sink into insolvency.

It is this paper system of extravagant expansion, raising the nominal
price of every article far beyond its real value when compared with the
cost of similar articles in countries whose circulation is wisely
regulated, which has prevented us from competing in our own markets with
foreign manufacturers, has produced extravagant importations, and has
counteracted the effect of the large incidental protection afforded to
our domestic manufactures by the present revenue tariff. But for this
the branches of our manufactures composed of raw materials, the
production of our own country--such as cotton, iron, and woolen
fabrics--would not only have acquired almost exclusive possession of the
home market, but would have created for themselves a foreign market
throughout the world.

Deplorable, however, as may be our present financial condition, we may
yet indulge in bright hopes for the future. No other nation has ever
existed which could have endured such violent expansions and
contractions of paper credits without lasting injury; yet the buoyancy
of youth, the energies of our population, and the spirit which never
quails before difficulties will enable us soon to recover from our
present financial embarrassments, and may even occasion us speedily to
forget the lesson which they have taught. In the meantime it is the duty
of the Government, by all proper means within its power, to aid in
alleviating the sufferings of the people occasioned by the suspension of
the banks and to provide against a recurrence of the same calamity.
Unfortunately, in either aspect of the case it can do but little. Thanks
to the independent treasury, the Government has not suspended payment,
as it was compelled to do by the failure of the banks in 1837. It will
continue to discharge its liabilities to the people in gold and silver.
Its disbursements in coin will pass into circulation and materially
assist in restoring a sound currency. From its high credit, should we be
compelled to make a temporary loan, it can be effected on advantageous
terms. This, however, shall if possible be avoided, but if not, then the
amount shall be limited to the lowest practicable sum.

I have therefore determined that whilst no useful Government works
already in progress shall be suspended, new works not already commenced
will be postponed if this can be done without injury to the country.
Those necessary for its defense shall proceed as though there had been
no crisis in our monetary affairs.

But the Federal Government can not do much to provide against a
recurrence of existing evils. Even if insurmountable constitutional
objections did not exist against the creation of a national bank, this
would furnish no adequate preventive security. The history of the last
Bank of the United States abundantly proves the truth of this assertion.
Such a bank could not, if it would, regulate the issues and credits of
1,400 State banks in such a manner as to prevent the ruinous expansions
and contractions in our currency which afflicted the country throughout
the existence of the late bank, or secure us against future suspensions.
In 1825 an effort was made by the Bank of England to curtail the issues
of the country banks under the most favorable circumstances. The paper
currency had been expanded to a ruinous extent, and the bank put forth
all its power to contract it in order to reduce prices and restore the
equilibrium of the foreign exchanges. It accordingly commenced a system
of curtailment of its loans and issues, in the vain hope that the joint
stock and private banks of the Kingdom would be compelled to follow its
example. It found, however, that as it contracted they expanded, and at
the end of the process, to employ the language of a very high official
authority, "whatever reduction of the paper circulation was effected by
the Bank of England (in 1825) was more than made up by the issues of the
country banks."

But a bank of the United States would not, if it could, restrain the
issues and loans of the State banks, because its duty as a regulator of
the currency must often be in direct conflict with the immediate
interest of its stockholders. If we expect one agent to restrain or
control another, their interests must, at least in some degree, be
antagonistic. But the directors of a bank of the United States would
feel the same interest and the same inclination with the directors of
the State banks to expand the currency, to accommodate their favorites
and friends with loans, and to declare large dividends. Such has been
our experience in regard to the last bank.

After all, we must mainly rely upon the patriotism and wisdom of the
States for the prevention and redress of the evil. If they will afford
us a real specie basis for our paper circulation by increasing the
denomination of bank notes, first to twenty and afterwards to fifty
dollars; if they will require that the banks shall at all times keep on
hand at least one dollar of gold and silver for every three dollars of
their circulation and deposits, and if they will provide by a
self-executing enactment, which nothing can arrest, that the moment they
suspend they shall go into liquidation, I believe that such provisions,
with a weekly publication by each bank of a statement of its condition,
would go far to secure us against future suspensions of specie payments.

Congress, in my opinion, possess the power to pass a uniform bankrupt
law applicable to all banking institutions throughout the United States,
and I strongly recommend its exercise. This would make it the
irreversible organic law of each bank's existence that a suspension of
specie payments shall produce its civil death. The instinct of
self-preservation would then compel it to perform its duties in such a
manner as to escape the penalty and preserve its life.

The existence of banks and the circulation of bank paper are so
identified with the habits of our people that they can not at this day
be suddenly abolished without much immediate injury to the country. If
we could confine them to their appropriate sphere and prevent them from
administering to the spirit of wild and reckless speculation by
extravagant loans and issues, they might be continued with advantage to
the public.

But this I say, after long and much reflection: If experience shall
prove it to be impossible to enjoy the facilities which well-regulated
banks might afford without at the same time suffering the calamities
which the excesses of the banks have hitherto inflicted upon the
country, it would then be far the lesser evil to deprive them altogether
of the power to issue a paper currency and confine them to the functions
of banks of deposit and discount.

Our relations with foreign governments are upon the whole in a
satisfactory condition.

The diplomatic difficulties which existed between the Government of the
United States and that of Great Britain at the adjournment of the last
Congress have been happily terminated by the appointment of a British
minister to this country, who has been cordially received. Whilst it is
greatly to the interest, as I am convinced it is the sincere desire, of
the Governments and people of the two countries to be on terms of
intimate friendship with each other, it has been our misfortune almost
always to have had some irritating, if not dangerous, outstanding
question with Great Britain.

Since the origin of the Government we have been employed in negotiating
treaties with that power, and afterwards in discussing their true intent
and meaning. In this respect the convention of April 19, 1850, commonly
called the Clayton and Bulwer treaty, has been the most unfortunate of
all, because the two Governments place directly opposite and
contradictory constructions upon its first and most important article.
Whilst in the United States we believed that this treaty would place
both powers upon an exact equality by the stipulation that neither will
ever "occupy, or fortify, or colonize, or assume, or exercise any
dominion" over any part of Central America, it is contended by the
British Government that the true construction of this language has left
them in the rightful possession of all that portion of Central America
which was in their occupancy at the date of the treaty; in fact, that
the treaty is a virtual recognition on the part of the United States of
the right of Great Britain, either as owner or protector, to the whole
extensive coast of Central America, sweeping round from the Rio Hondo to
the port and harbor of San Juan de Nicaragua, together with the adjacent
Bay Islands, except the comparatively small portion of this between the
Sarstoon and Cape Honduras. According to their construction, the treaty
does no more than simply prohibit them from extending their possessions
in Central America beyond the present limits. It is not too much to
assert that if in the United States the treaty had been considered
susceptible of such a construction it never would have been negotiated
under the authority of the President, nor would it have received the
approbation of the Senate. The universal conviction in the United States
was that when our Government consented to violate its traditional and
time-honored policy and to stipulate with a foreign government never to
occupy or acquire territory in the Central American portion of our own
continent, the consideration for this sacrifice was that Great Britain
should, in this respect at least, be placed in the same position with
ourselves. Whilst we have no right to doubt the sincerity of the British
Government in their construction of the treaty, it is at the same time
my deliberate conviction that this construction is in opposition both to
its letter and its spirit.

Under the late Administration negotiations were instituted between the
two Governments for the purpose, if possible, of removing these
difficulties, and a treaty having this laudable object in view was
signed at London on the 17th October, 1856, and was submitted by the
President to the Senate on the following 10th of December. Whether this
treaty, either in its original or amended form, would have accomplished
the object intended without giving birth to new and embarrassing
complications between the two Governments, may perhaps be well
questioned. Certain it is, however, it was rendered much less
objectionable by the different amendments made to it by the Senate. The
treaty as amended was ratified by me on the 12th March, 1857, and was
transmitted to London for ratification by the British Government. That
Government expressed its willingness to concur in all the amendments
made by the Senate with the single exception of the clause relating to
Ruatan and the other islands in the Bay of Honduras. The article in the
original treaty as submitted to the Senate, after reciting that these
islands and their inhabitants "having been, by a convention bearing date
the 27th day of August, 1856, between Her Britannic Majesty and the
Republic of Honduras, constituted and declared a free territory under
the sovereignty of the said Republic of Honduras," stipulated that "the
two contracting parties do hereby mutually engage to recognize and
respect in all future time the independence and rights of the said free
territory as a part of the Republic of Honduras."

Upon an examination of this convention between Great Britain and
Honduras of the 27th August, 1856, it was found that whilst declaring
the Bay Islands to be "a free territory under the sovereignty of the
Republic of Honduras" it deprived that Republic of rights without which
its sovereignty over them could scarcely be said to exist. It divided
them from the remainder of Honduras and gave to their inhabitants a
separate government of their own, with legislative, executive, and
judicial officers elected by themselves. It deprived the Government of
Honduras of the taxing power in every form and exempted the people of
the islands from the performance of military duty except for their own
exclusive defense. It also prohibited that Republic from erecting
fortifications upon them for their protection, thus leaving them open to
invasion from any quarter; and, finally, it provided "that slavery shall
not at any time hereafter be permitted to exist therein."

Had Honduras ratified this convention, she would have ratified the
establishment of a state substantially independent within her own
limits, and a state at all times subject to British influence and
control. Moreover, had the United States ratified the treaty with Great
Britain in its original form, we should have been bound "to recognize
and respect in all future time" these stipulations to the prejudice of
Honduras. Being in direct opposition to the spirit and meaning of the
Clayton and Bulwer treaty as understood in the United States, the Senate
rejected the entire clause, and substituted in its stead a simple
recognition of the sovereign right of Honduras to these islands in the
following language: The two contracting parties do hereby mutually
engage to recognize and respect the islands of Ruatan, Bonaco, Utila,
Barbaretta, Helena, and Moral, situate in the Bay of Honduras and off
the coast of the Republic of Honduras, as under the sovereignty and as
part of the said Republic of Honduras.

Great Britain rejected this amendment, assigning as the only reason that
the ratifications of the convention of the 27th August, 1856, between
her and Honduras had not been "exchanged, owing to the hesitation of
that Government." Had this been done, it is stated that "Her Majesty's
Government would have had little difficulty in agreeing to the
modification proposed by the Senate, which then would have had in effect
the same signification as the original wording." Whether this would have
been the effect, whether the mere circumstance of the exchange of the
ratifications of the British convention with Honduras prior in point of
time to the ratification of our treaty with Great Britain would "in
effect" have had "the same signification as the original wording," and
thus have nullified the amendment of the Senate, may well be doubted. It
is, perhaps, fortunate that the question has never arisen.

The British Government, immediately after rejecting the treaty as
amended, proposed to enter into a new treaty with the United States,
similar in all respects to the treaty which they had just refused to
ratify, if the United States would consent to add to the Senate's clear
and unqualified recognition of the sovereignty of Honduras over the Bay
Islands the following conditional stipulation: Whenever and so soon as
the Republic of Honduras shall have concluded and ratified a treaty with
Great Britain by which Great Britain shall have ceded and the Republic
of Honduras shall have accepted the said islands, subject to the
provisions and conditions contained in such treaty.

This proposition was, of course, rejected. After the Senate had refused
to recognize the British convention with Honduras of the 27th August,
1856, with full knowledge of its contents, it was impossible for me,
necessarily ignorant of "the provisions and conditions" which might be
contained in a future convention between the same parties, to sanction
them in advance.

The fact is that when two nations like Great Britain and the United
States, mutually desirous, as they are, and I trust ever may be, of
maintaining the most friendly relations with each other, have
unfortunately concluded a treaty which they understand in senses
directly opposite, the wisest course is to abrogate such a treaty by
mutual consent and to commence anew. Had this been done promptly, all
difficulties in Central America would most probably ere this have been
adjusted to the satisfaction of both parties. The time spent in
discussing the meaning of the Clayton and Bulwer treaty would have been
devoted to this praiseworthy purpose, and the task would have been the
more easily accomplished because the interest of the two countries in
Central America is identical, being confined to securing safe transits
over all the routes across the Isthmus.

Whilst entertaining these sentiments, I shall, nevertheless, not refuse
to contribute to any reasonable adjustment of the Central American
questions which is not practically inconsistent with the American
interpretation of the treaty. Overtures for this purpose have been
recently made by the British Government in a friendly spirit, which I
cordially reciprocate, but whether this renewed effort will result in
success I am not yet prepared to express an opinion. A brief period will
determine.

With France our ancient relations of friendship still continue to exist.
The French Government have in several recent instances, which need not
be enumerated, evinced a spirit of good will and kindness toward our
country, which I heartily reciprocate. It is, notwithstanding, much to
be regretted that two nations whose productions are of such a character
as to invite the most extensive exchanges and freest commercial
intercourse should continue to enforce ancient and obsolete restrictions
of trade against each other. Our commercial treaty with France is in
this respect an exception from our treaties with all other commercial
nations. It jealously levies discriminating duties both on tonnage and
on articles the growth, produce, or manufacture of the one country when
arriving in vessels belonging to the other.

More than forty years ago, on the 3d March, 1815, Congress passed an act
offering to all nations to admit their vessels laden with their national
productions into the ports of the United States upon the same terms with
our own vessels provided they would reciprocate to us similar
advantages. This act confined the reciprocity to the productions of the
respective foreign nations who might enter into the proposed arrangement
with the United States. The act of May 24, 1828, removed this
restriction and offered a similar reciprocity to all such vessels
without reference to the origin of their cargoes. Upon these principles
our commercial treaties and arrangements have been rounded, except with
France, and let us hope that this exception may not long exist.

Our relations with Russia remain, as they have ever been, on the most
friendly footing. The present Emperor, as well as his predecessors, have
never failed when the occasion offered to manifest their good will to
our country, and their friendship has always been highly appreciated by
the Government and people of the United States.

With all other European Governments, except that of Spain, our relations
are as peaceful as we could desire. I regret to say that no progress
whatever has been made since the adjournment of Congress toward the
settlement of any of the numerous claims of our citizens against the
Spanish Government. Besides, the outrage committed on our flag by the
Spanish war frigate Ferrolana on the high seas off the coast of Cuba in
March, 1855, by firing into the American mail steamer El Dorado and
detaining and searching her, remains unacknowledged and unredressed. The
general tone and temper of the Spanish Government toward that of the
United States are much to be regretted. Our present envoy extraordinary
and minister plenipotentiary to Madrid has asked to be recalled, and it
is my purpose to send out a new minister to Spain with special
instructions on all questions pending between the two Governments, and
with a determination to have them speedily and amicably adjusted if this
be possible. In the meantime, whenever our minister urges the just
claims of our citizens on the notice of the Spanish Government he is met
with the objection that Congress has never made the appropriation
recommended by President Polk in his annual message of December, 1847,
"to be paid to the Spanish Government for the purpose of distribution
among the claimants in the Amistad case." A similar recommendation was
made by my immediate predecessor in his message of December, 1853, and
entirely concurring with both in the opinion that this indemnity is
justly due under the treaty with Spain of the 27th of October, 1795, I
earnestly recommend such an appropriation to the favorable consideration
of Congress.

A treaty of friendship and commerce was concluded at Constantinople on
the 13th December, 1856, between the United States and Persia, the
ratifications of which were exchanged at Constantinople on the 13th
June, 1857, and the treaty was proclaimed by the President on the 18th
August, 1857. This treaty, it is believed, will prove beneficial to
American commerce. The Shah has manifested an earnest disposition to
cultivate friendly relations with our country, and has expressed a
strong wish that we should be represented at Teheran by a minister
plenipotentiary; and I recommend that an appropriation be made for this
purpose.

Recent occurrences in China have been unfavorable to a revision of the
treaty with that Empire of the 3d July, 1844, with a view to the
security and extension of our commerce. The twenty-fourth article of
this treaty stipulated for a revision of it in case experience should
prove this to be requisite, "in which case the two Governments will, at
the expiration of twelve years from the date of said convention, treat
amicably concerning the same by means of suitable persons appointed to
conduct such negotiations." These twelve years expired on the 3d July,
1856, but long before that period it was ascertained that important
changes in the treaty were necessary, and several fruitless attempts
were made by the commissioner of the United States to effect these
changes. Another effort was about to be made for the same purpose by our
commissioner in conjunction with the ministers of England and France,
but this was suspended by the occurrence of hostilities in the Canton
River between Great Britain and the Chinese Empire. These hostilities
have necessarily interrupted the trade of all nations with Canton, which
is now in a state of blockade, and have occasioned a serious loss of
life and property. Meanwhile the insurrection within the Empire against
the existing imperial dynasty still continues, and it is difficult to
anticipate what will be the result.

Under these circumstances I have deemed it advisable to appoint a
distinguished citizen of Pennsylvania envoy extraordinary and minister
plenipotentiary to proceed to China and to avail himself of any
opportunities which may offer to effect changes in the existing treaty
favorable to American commerce. He left the United States for the place
of his destination in July last in the war steamer Minnesota. Special
ministers to China have also been appointed by the Governments of Great
Britain and France.

Whilst our minister has been instructed to occupy a neutral position in
reference to the existing hostilities at Canton, he will cordially
cooperate with the British and French ministers in all peaceful measures
to secure by treaty stipulations those just concessions to commerce
which the nations of the world have a right to expect and which China
can not long be permitted to withhold. From assurances received I
entertain no doubt that the three ministers will act in harmonious
concert to obtain similar commercial treaties for each of the powers
they represent.

We can not fail to feel a deep interest in all that concerns the welfare
of the independent Republics on our own continent, as well as of the
Empire of Brazil.

Our difficulties with New Granada, which a short time since bore so
threatening an aspect, are, it is to be hoped, in a fair train of
settlement in a manner just and honorable to both parties.

The isthmus of Central America, including that of Panama, is the great
highway between the Atlantic and Pacific over which a large portion of
the commerce of the world is destined to pass. The United States are
more deeply interested than any other nation in preserving the freedom
and security of all the communications across this isthmus. It is our
duty, therefore, to take care that they shall not be interrupted either
by invasions from our own country or by wars between the independent
States of Central America. Under our treaty with New Granada of the 12th
December, 1846, we are bound to guarantee the neutrality of the Isthmus
of Panama, through which the Panama Railroad passes, "as well as the
rights of sovereignty and property which New Granada has and possesses
over the said territory." This obligation is rounded upon equivalents
granted by the treaty to the Government and people of the United States.

Under these circumstances I recommend to Congress the passage of an act
authorizing the President, in case of necessity, to employ the land and
naval forces of the United States to carry into effect this guaranty of
neutrality and protection. I also recommend similar legislation for the
security of any other route across the Isthmus in which we may acquire
an interest by treaty.

With the independent Republics on this continent it is both our duty and
our interest to cultivate the most friendly relations. We can never feel
indifferent to their fate, and must always rejoice in their prosperity.
Unfortunately both for them and for us, our example and advice have lost
much of their influence in consequence of the lawless expeditions which
have been fitted out against some of them within the limits of our
country. Nothing is better calculated to retard our steady material
progress or impair our character as a nation than the toleration of such
enterprises in violation of the law of nations.

It is one of the first and highest duties of any independent state in
its relations with the members of the great family of nations to
restrain its people from acts of hostile aggression against their
citizens or subjects. The most eminent writers on public law do not
hesitate to denounce such hostile acts as robbery and murder.

Weak and feeble states like those of Central America may not feel
themselves able to assert and vindicate their rights. The case would be
far different if expeditions were set on foot within our own territories
to make private war against a powerful nation. If such expeditions were
fitted out from abroad against any portion of our own country, to burn
down our cities, murder and plunder our people, and usurp our
Government, we should call any power on earth to the strictest account
for not preventing such enormities.

Ever since the Administration of General Washington acts of Congress
have been enforced to punish severely the crime of setting on foot a
military expedition within the limits of the United States to proceed
from thence against a nation or state with whom we are at peace. The
present neutrality act of April 20, 1818, is but little more than a
collection of preexisting laws. Under this act the President is
empowered to employ the land and naval forces and the militia "for the
purpose of preventing the carrying on of any such expedition or
enterprise from the territories and jurisdiction of the United States,"
and the collectors of customs are authorized and required to detain any
vessel in port when there is reason to believe she is about to take part
in such lawless enterprises.

When it was first rendered probable that an attempt would be made to get
up another unlawful expedition against Nicaragua, the Secretary of State
issued instructions to the marshals and district attorneys, which were
directed by the Secretaries of War and the Navy to the appropriate army
and navy officers, requiring them to be vigilant and to use their best
exertions in carrying into effect the provisions of the act of 1818.
Notwithstanding these precautions, the expedition has escaped from our
shores. Such enterprises can do no possible good to the country, but
have already inflicted much injury both on its interests and its
character. They have prevented peaceful emigration from the United
States to the States of Central America, which could not fail to prove
highly beneficial to all the parties concerned. In a pecuniary point of
view alone our citizens have sustained heavy losses from the seizure and
closing of the transit route by the San Juan between the two oceans.

The leader of the recent expedition was arrested at New Orleans, but was
discharged on giving bail for his appearance in the insufficient sum of
$2,000.

I commend the whole subject to the serious attention of Congress,
believing that our duty and our interest, as well as our national
character, require that we should adopt such measures as will be
effectual in restraining our citizens from committing such outrages.

I regret to inform you that the President of Paraguay has refused to
ratify the treaty between the United States and that State as amended by
the Senate, the signature of which was mentioned in the message of my
predecessor to Congress at the opening of its session in December, 1853.
The reasons assigned for this refusal will appear in the correspondence
herewith submitted.

It being desirable to ascertain the fitness of the river La Plata and
its tributaries for navigation by steam, the United States steamer Water
Witch was sent thither for that purpose in 1853. This enterprise was
successfully carried on until February, 1855, when, whilst in the
peaceful prosecution of her voyage up the Parana River, the steamer was
fired upon by a Paraguayan fort. The fire was returned, but as the Water
Witch was of small force and not designed for offensive operations, she
retired from the conflict. The pretext upon which the attack was made
was a decree of the President of Paraguay of October, 1854, prohibiting
foreign vessels of war from navigating the rivers of that State. As
Paraguay, however, was the owner of but one bank of the river of that
name, the other belonging to Corientes, a State of the Argentine
Confederation, the right of its Government to expect that such a decree
would be obeyed can not be acknowledged. But the Water Witch was not,
properly speaking, a vessel of war. She was a small steamer engaged in a
scientific enterprise intended for the advantage of commercial states
generally. Under these circumstances I am constrained to consider the
attack upon her as unjustifiable and as calling for satisfaction from
the Paraguayan Government.

Citizens of the United States also who were established in business in
Paraguay have had their property seized and taken from them, and have
otherwise been treated by the authorities in an insulting and arbitrary
manner, which requires redress.

A demand for these purposes will be made in a firm but conciliatory
spirit. This will the more probably be granted if the Executive shall
have authority to use other means in the event of a refusal. This is
accordingly recommended.

It is unnecessary to state in detail the alarming condition of the
Territory of Kansas at the time of my inauguration. The opposing parties
then stood in hostile array against each other, and any accident might
have relighted the flames of civil war. Besides, at this critical moment
Kansas was left without a governor by the resignation of Governor Geary.

On the 19th of February previous the Territorial legislature had passed
a law providing for the election of delegates on the third Monday of
June to a convention to meet on the first Monday of September for the
purpose of framing a constitution preparatory to admission into the
Union. This law was in the main fair and just, and it is to be regretted
that all the qualified electors had not registered themselves and voted
under its provisions.

At the time of the election for delegates an extensive organization
existed in the Territory whose avowed object it was, if need be, to put
down the lawful government by force and to establish a government of
their own under the so-called Topeka constitution. The persons attached
to this revolutionary organization abstained from taking any part in the
election.

The act of the Territorial legislature had omitted to provide for
submitting to the people the constitution which might be framed by the
convention, and in the excited state of public feeling throughout Kansas
an apprehension extensively prevailed that a design existed to force
upon them a constitution in relation to slavery against their will. In
this emergency it became my duty, as it was my unquestionable right,
having in view the union of all good citizens in support of the
Territorial laws, to express an opinion on the true construction of the
provisions concerning slavery contained in the organic act of Congress
of the 30th May, 1854. Congress declared it to be "the true intent and
meaning of this act not to legislate slavery into any Territory or
State, nor to exclude it therefrom, but to leave the people thereof
perfectly free to form and regulate their domestic institutions in their
own way." Under it Kansas, "when admitted as a State," was to "be
received into the Union with or without slavery, as their constitution
may prescribe at the time of their admission."

Did Congress mean by this language that the delegates elected to frame a
constitution should have authority finally to decide the question of
slavery, or did they intend by leaving it to the people that the people
of Kansas themselves should decide this question by a direct vote? On
this subject I confess I had never entertained a serious doubt, and
therefore in my instructions to Governor Walker of the 28th March last I
merely said that when "a constitution shall be submitted to the people
of the Territory they must be protected in the exercise of their right
of voting for or against that instrument, and the fair expression of the
popular will must not be interrupted by fraud or violence."

In expressing this opinion it was far from my intention to interfere
with the decision of the people of Kansas, either for or against
slavery. From this I have always carefully abstained. Intrusted with the
duty of taking "care that the laws be faithfully executed," my only
desire was that the people of Kansas should furnish to Congress the
evidence required by the organic act, whether for or against slavery,
and in this manner smooth their passage into the Union. In emerging from
the condition of Territorial dependence into that of a sovereign State
it was their duty, in my opinion, to make known their will by the votes
of the majority on the direct question whether this important domestic
institution should or should not continue to exist. Indeed, this was the
only possible mode in which their will could be authentically
ascertained.

The election of delegates to a convention must necessarily take place in
separate districts. From this cause it may readily happen, as has often
been the case, that a majority of the people of a State or Territory are
on one side of a question, whilst a majority of the representatives from
the several districts into which it is divided may be upon the other
side. This arises front the fact that in some districts delegates may be
elected by small majorities, whilst in others those of different
sentiments may receive majorities sufficiently great not only to
overcome the votes given for the former, but to leave a large majority
of the whole people in direct opposition to a majority of the delegates.
Besides, our history proves that influences may be brought to bear on
the representative sufficiently powerful to induce him to disregard the
will of his constituents. The truth is that no other authentic and
satisfactory mode exists of ascertaining the will of a majority of the
people of any State or Territory on an important and exciting question
like that of slavery in Kansas except by leaving it to a direct vote.
How wise, then, was it for Congress to pass over all subordinate and
intermediate agencies and proceed directly to the source of all
legitimate power under our institutions!

How vain would any other principle prove in practice! This may be
illustrated by the case of Kansas. Should she be admitted into the Union
with a constitution either maintaining or abolishing slavery against the
sentiment of the people, this could have no other effect than to
continue and to exasperate the existing agitation during the brief
period required to make the constitution conform to the irresistible
will of the majority.

The friends and supporters of the Nebraska and Kansas act, when
struggling on a recent occasion to sustain its wise provisions before
the great tribunal of the American people, never differed about its true
meaning on this subject. Everywhere throughout the Union they publicly
pledged their faith and their honor that they would cheerfully submit
the question of slavery to the decision of the bona fide people of
Kansas, without any restriction or qualification whatever. All were
cordially united upon the great doctrine of popular sovereignty, which
is the vital principle of our free institutions. Had it then been
insinuated from any quarter that it would be a sufficient compliance
with the requisitions of the organic law for the members of a convention
thereafter to be elected to withhold the question of slavery from the
people and to substitute their own will for that of a legally
ascertained majority of all their constituents, this would have been
instantly rejected. Everywhere they remained true to the resolution
adopted on a celebrated occasion recognizing "the right of the people of
all the Territories, including Kansas and Nebraska, acting through the
legally and fairly expressed will of a majority of actual residents, and
whenever the number of their inhabitants justifies it, to form a
constitution with or without slavery and be admitted into the Union upon
terms of perfect equality with the other States."

The convention to frame a constitution for Kansas met on the first
Monday of September last. They were called together by virtue of an act
of the Territorial legislature, whose lawful existence had been
recognized by Congress in different forms and by different enactments. A
large proportion of the citizens of Kansas did not think proper to
register their names and to vote at the election for delegates; but an
opportunity to do this having been fairly afforded, their refusal to
avail themselves of their right could in no manner affect the legality
of the convention. This convention proceeded to frame a constitution for
Kansas, and finally adjourned on the 7th day of November. But little
difficulty occurred in the convention except on the subject of slavery.
The truth is that the general provisions of our recent State
constitutions are so similar and, I may add, so excellent that the
difference between them is not essential. Under the earlier practice of
the Government no constitution framed by the convention of a Territory
preparatory to its admission into the Union as a State had been
submitted to the people. I trust, however, the example set by the last
Congress, requiring that the constitution of Minnesota "should be
subject to the approval and ratification of the people of the proposed
State," may be followed on future occasions. I took it for granted that
the convention of Kansas would act in accordance with this example,
rounded, as it is, on correct principles, and hence my instructions to
Governor Walker in favor of submitting the constitution to the people
were expressed in general and unqualified terms.

In the Kansas-Nebraska act, however, this requirement, as applicable to
the whole constitution, had not been inserted, and the convention were
not bound by its terms to submit any other portion of the instrument to
an election except that which relates to the "domestic institution" of
slavery. This will be rendered clear by a simple reference to its
language. It was "not to legislate slavery into any Territory or State,
nor to exclude it therefrom, but to leave the people thereof perfectly
free to form and regulate their domestic institutions in their own way."
According to the plain construction of the sentence, the words "domestic
institutions" have a direct, as they have an appropriate, reference to
slavery. "Domestic institutions" are limited to the family. The relation
between master and slave and a few others are "domestic institutions,"
and are entirely distinct from institutions of a political character.
Besides, there was no question then before Congress, nor, indeed, has
there since been any serious question before the people of Kansas or the
country, except that which relates to the "domestic institution" of
slavery. The convention, after an angry and excited debate, finally
determined, by a majority of only two, to submit the question of slavery
to the people, though at the last forty-three of the fifty delegates
present affixed their signatures to the constitution.

A large majority of the convention were in favor of establishing slavery
in Kansas. They accordingly inserted an article in the constitution for
this purpose similar in form to those which had been adopted by other
Territorial conventions. In the schedule, however, providing for the
transition from a Territorial to a State government the question has
been fairly and explicitly referred to the people whether they will have
a constitution "with or without slavery." It declares that before the
constitution adopted by the convention "shall be sent to Congress for
admission into the Union as a State" an election shall be held to decide
this question, at which all the white male inhabitants of the Territory
above the age of 21 are entitled to vote. They are to vote by ballot,
and "the ballots cast at said election shall be indorsed 'constitution
with slavery' and 'constitution with no slavery.'" If there be a
majority in favor of the "constitution with slavery," then it is to be
transmitted to Congress by the president of the convention in its
original form; if, on the contrary, there shall be a majority in favor
of the "constitution with no slavery," "then the article providing for
slavery shall be stricken from the constitution by the president of this
convention;" and it is expressly declared that "no slavery shall exist
in the State of Kansas, except that the right of property in slaves now
in the Territory shall in no manner be interfered with;" and in that
event it is made his duty to have the constitution thus ratified
transmitted to the Congress of the United States for the admission of
the State into the Union.

At this election every citizen will have an opportunity of expressing
his opinion by his vote "whether Kansas shall be received into the Union
with or without slavery," and thus this exciting question may be
peacefully settled in the very mode required by the organic law. The
election will be held under legitimate authority, and if any portion of
the inhabitants shall refuse to vote, a fair opportunity to do so having
been presented, this will be their own voluntary act and they alone will
be responsible for the consequences.

Whether Kansas shall be a free or a slave State must eventually, under
some authority, be decided by an election; and the question can never be
more clearly or distinctly presented to the people than it is at the
present moment. Should this opportunity be rejected she may be involved
for years in domestic discord, and possibly in civil war, before she can
again make up the issue now so fortunately tendered and again reach the
point she has already attained.

Kansas has for some years occupied too much of the public attention. It
is high time this should be directed to far more important objects. When
once admitted into the Union, whether with or without slavery, the
excitement beyond her own limits will speedily pass away, and she will
then for the first time be left, as she ought to have been long since,
to manage her own affairs in her own way. If her constitution on the
subject of slavery or on any other subject be displeasing to a majority
of the people, no human power can prevent them from changing it within a
brief period. Under these circumstances it may well be questioned
whether the peace and quiet of the whole country are not of greater
importance than the mere temporary triumph of either of the political
parties in Kansas.

Should the constitution without slavery be adopted by the votes of the
majority, the rights of property in slaves now in the Territory are
reserved. The number of these is very small, but if it were greater the
provision would be equally just and reasonable. The slaves were brought
into the Territory under the Constitution of the United States and are
now the property of their masters. This point has at length been finally
decided by the highest judicial tribunal of the country, and this upon
the plain principle that when a confederacy of sovereign States acquire
a new territory at their joint expense both equality and justice demand
that the citizens of one and all of them shall have the right to take
into it whatsoever is recognized as property by the common Constitution.
To have summarily confiscated the property in slaves already in the
Territory would have been an act of gross injustice and contrary to the
practice of the older States of the Union which have abolished slavery.

A Territorial government was established for Utah by act of Congress
approved the 9th September, 1850, and the Constitution and laws of the
United States were thereby extended over it "so far as the same or any
provisions thereof may be applicable." This act provided for the
appointment by the President, by and with the advice and consent of the
Senate, of a governor (who was to be ex officio superintendent of Indian
affairs), a secretary, three judges of the supreme court, a marshal, and
a district attorney. Subsequent acts provided for the appointment of the
officers necessary to extend our land and our Indian system over the
Territory. Brigham Young was appointed the first governor on the 20th
September, 1850, and has held the office ever since. Whilst Governor
Young has been both governor and superintendent of Indian affairs
throughout this period, he has been at the same time the head of the
church called the Latter-day Saints, and professes to govern its members
and dispose of their property by direct inspiration and authority from
the Almighty. His power has been, therefore, absolute over both church
and state.

The people of Utah almost exclusively belong to this church, and
believing with a fanatical spirit that he is governor of the Territory
by divine appointment, they obey his commands as if these were direct
revelations from Heaven. If, therefore, he chooses that his government
shall come into collision with the Government of the United States, the
members of the Mormon Church will yield implicit obedience to his will.
Unfortunately, existing facts leave but little doubt that such is his
determination. Without entering upon a minute history of occurrences, it
is sufficient to say that all the officers of the United States,
judicial and executive, with the single exception of two Indian agents,
have found it necessary for their own personal safety to withdraw from
the Territory, and there no longer remains any government in Utah but
the despotism of Brigham Young. This being the condition of affairs in
the Territory, I could not mistake the path of duty. As Chief Executive
Magistrate I was bound to restore the supremacy of the Constitution and
laws within its limits. In order to effect this purpose, I appointed a
new governor and other Federal officers for Utah and sent with them a
military force for their protection and to aid as a posse comitatus in
case of need in the execution of the laws.

With the religious opinions of the Mormons, as long as they remained
mere opinions, however deplorable in themselves and revolting to the
moral and religious sentiments of all Christendom, I had no right to
interfere. Actions alone, when in violation of the Constitution and laws
of the United States, become the legitimate subjects for the
jurisdiction of the civil magistrate. My instructions to Governor
Cumming have therefore been framed in strict accordance with these
principles. At their date a hope was indulged that no necessity might
exist for employing the military in restoring and maintaining the
authority of the law, but this hope has now vanished. Governor Young has
by proclamation declared his determination to maintain his power by
force, and has already committed acts of hostility against the United
States. Unless he should retrace his steps the Territory of Utah will be
in a state of open rebellion. He has committed these acts of hostility
notwithstanding Major Van Vliet, an officer of the Army, sent to Utah by
the Commanding General to purchase provisions for the troops, had given
him the strongest assurances of the peaceful intentions of the
Government, and that the troops would only be employed as a posse
comitatus when called on by the civil authority to aid in the execution
of the laws.

There is reason to believe that Governor Young has long contemplated
this result. He knows that the continuance of his despotic power depends
upon the exclusion of all settlers from the Territory except those who
will acknowledge his divine mission and implicitly obey his will, and
that an enlightened public opinion there would soon prostrate
institutions at war with the laws both of God and man. "He has therefore
for several years, in order to maintain his independence, been
industriously employed in collecting and fabricating arms and munitions
of war and in disciplining the Mormons for military service." As
superintendent of Indian affairs he has had an opportunity of tampering
with the Indian tribes and exciting their hostile feelings against the
United States. This, according to our information, he has accomplished
in regard to some of these tribes, while others have remained true to
their allegiance and have communicated his intrigues to our Indian
agents. He has laid in a store of provisions for three years, which in
case of necessity, as he informed Major Van Vliet, he will conceal, "and
then take to the mountains and bid defiance to all the powers of the
Government."

A great part of all this may be idle boasting, but yet no wise
government will lightly estimate the efforts which may be inspired by
such frenzied fanaticism as exists among the Mormons in Utah. This is
the first rebellion which has existed in our Territories, and humanity
itself requires that we should put it down in such a manner that it
shall be the last. To trifle with it would be to encourage it and to
render it formidable. We ought to go there with such an imposing force
as to convince these deluded people that resistance would be vain, and
thus spare the effusion of blood. We can in this manner best convince
them that we are their friends, not their enemies. In order to
accomplish this object it will be necessary, according to the estimate
of the War Department, to raise four additional regiments; and this I
earnestly recommend to Congress. At the present moment of depression in
the revenues of the country I am sorry to be obliged to recommend such a
measure; but I feel confident of the support of Congress, cost what it
may, in suppressing the insurrection and in restoring and maintaining
the sovereignty of the Constitution and laws over the Territory of Utah.

I recommend to Congress the establishment of a Territorial government
over Arizona, incorporating with it such portions of New Mexico as they
may deem expedient. I need scarcely adduce arguments in support of this
recommendation. We are bound to protect the lives and the property of
our citizens inhabiting Arizona, and these are now without any efficient
protection. Their present number is already considerable, and is rapidly
increasing, notwithstanding the disadvantages under which they labor.
Besides, the proposed Territory is believed to be rich in mineral and
agricultural resources, especially in silver and copper. The mails of
the United States to California are now carried over it throughout its
whole extent, and this route is known to be the nearest and believed to
be the best to the Pacific.

Long experience has deeply convinced me that a strict construction of
the powers granted to Congress is the only true, as well as the only
safe, theory of the Constitution. Whilst this principle shall guide my
public conduct, I consider it clear that under the war-making power
Congress may appropriate money for the Construction of a military road
through the Territories of the United States when this is absolutely
necessary for the defense of any of the States against foreign invasion.
The Constitution has conferred upon Congress power "to declare war," "to
raise and support armies," "to provide and maintain a navy," and to call
forth the militia to "repel invasions." These high sovereign powers
necessarily involve important and responsible public duties, and among
them there is none so sacred and so imperative as that of preserving our
soil from the invasion of a foreign enemy. The Constitution has
therefore left nothing on this point to construction, but expressly
requires that "the United States shall protect each of them [the States]
against invasion." Now if a military road over our own Territories be
indispensably necessary to enable us to meet and repel the invader, it
follows as a necessary consequence not only that we possess the power,
but it is our imperative duty to construct such a road. It would be an
absurdity to invest a government with the unlimited power to make and
conduct war and at the same time deny to it the only means of reaching
and defeating the enemy at the frontier. Without such a road it is quite
evident we can not "protect" California and our Pacific possessions
"against invasion." We can not by any other means transport men and
munitions of war from the Atlantic States in sufficient time
successfully to defend these remote and distant portions of the
Republic.

Experience has proved that the routes across the isthmus of Central
America are at best but a very uncertain and unreliable mode of
communication. But even if this were not the case, they would at once be
closed against us in the event of war with a naval power so much
stronger than our own as to enable it to blockade the ports at either
end of these routes. After all, therefore, we can only rely upon a
military road through our own Territories; and ever since the origin of
the Government Congress has been in the practice of appropriating money
from the public Treasury for the construction of such roads.

The difficulties and the expense of constructing a military railroad to
connect our Atlantic and Pacific States have been greatly exaggerated.
The distance on the Arizona route, near the thirty-second parallel of
north latitude, between the western boundary of Texas, on the Rio
Grande, and the eastern boundary of California, on the Colorado, from
the best explorations now within our knowledge, does not exceed 470
miles, and the face of the country is in the main favorable. For obvious
reasons the Government ought not to undertake the work itself by means
of its own agents. This ought to be committed to other agencies, which
Congress might assist, either by grants of land or money, or by both,
upon such terms and conditions as they may deem most beneficial for the
country. Provision might thus be made not only for the safe, rapid, and
economical transportation of troops and munitions of war, but also of
the public mails. The commercial interests of the whole country, both
East and West, would be greatly promoted by such a road, and, above all,
it would be a powerful additional bond of union. And although advantages
of this kind, whether postal, commercial, or political, can not confer
constitutional power, yet they may furnish auxiliary arguments in favor
of expediting a work which, in my judgment, is clearly embraced within
the war-making power.

For these reasons I commend to the friendly consideration of Congress
the subject of the Pacific Railroad, without finally committing myself
to any particular route.

The report of the Secretary of the Treasury will furnish a detailed
statement of the condition of the public finances and of the respective
branches of the public service devolved upon that Department of the
Government. By this report it appears that the amount of revenue
received from all sources into the Treasury during the fiscal year
ending the 30th June, 1857, was $68,631,513.67, which amount, with the
balance of $19,901,325.45 remaining in the Treasury at the commencement
of the year, made an aggregate for the service of the year of
$88,532,839.12.

The public expenditures for the fiscal year ending 30th June, 1857,
amounted to $70,822,724.85, of which $5,943,896.91 were applied to the
redemption of the public debt, including interest and premium, leaving
in the Treasury at the commencement of the present fiscal year, on the
1st July, 1857, $17,710,114.27.

The receipts into the Treasury for the first quarter of the present
fiscal year, commencing 1st July, 1857, were $20,929,819.81, and the
estimated receipts of the remaining three quarters to the 30th June,
1858, are $36,750,000, making, with the balance before stated, an
aggregate of $75,389,934.08 for the service of the present fiscal year.

The actual expenditures during the first quarter of the present fiscal
year were $23,714,528.37, of which $3,895,232.39 were applied to the
redemption of the public debt, including interest and premium. The
probable expenditures of the remaining three quarters to 30th June,
1858, are $51,248,530.04, including interest on the public debt, making
an aggregate of $74,963,058.41, leaving an estimated balance in the
Treasury at the close of the present fiscal year of $426,875.67.

The amount of the public debt at the commencement of the present fiscal
year was $29,060,386.90.

The amount redeemed since the 1st of July was $3,895,232.39, leaving a
balance unredeemed at this time of $25,165,154.51.

The amount of estimated expenditures for the remaining three quarters of
the present fiscal year will in all probability be increased from the
causes set forth in the report of the Secretary. His suggestion,
therefore, that authority should be given to supply any temporary
deficiency by the issue of a limited amount of Treasury notes is
approved, and I accordingly recommend the passage of such a law.

As stated in the report of the Secretary, the tariff of March 3, 1857,
has been in operation for so short a period of time and under
circumstances so unfavorable to a just development of its results as a
revenue measure that I should regard it as inexpedient, at least for the
present, to undertake its revision.

I transmit herewith the reports made to me by the Secretaries of War and
of the Navy, of the Interior, and of the Postmaster-General. They all
contain valuable and important information and suggestions, which I
commend to the favorable consideration of Congress.

I have already recommended the raising of four additional regiments, and
the report of the Secretary of War presents strong reasons proving this
increase of the Army under existing circumstances to be indispensable.

I would call the special attention of Congress to the recommendation of
the Secretary of the Navy in favor of the construction of ten small war
steamers of light draft. For some years the Government has been obliged
on many occasions to hire such steamers from individuals to supply its
pressing wants. At the present moment we have no armed vessel in the
Navy which can penetrate the rivers of China. We have but few which can
enter any of the harbors south of Norfolk, although many millions of
foreign and domestic commerce annually pass in and out of these harbors.
Some of our most valuable interests and most vulnerable points are thus
left exposed. This class of vessels of light draft, great speed, and
heavy guns would be formidable in coast defense. The cost of their
construction will not be great and they will require but a comparatively
small expenditure to keep them in commission. In time of peace they will
prove as effective as much larger vessels and more useful. One of them
should be at every station where we maintain a squadron, and three or
four should be constantly employed on our Atlantic and Pacific coasts.
Economy, utility, and efficiency combine to recommend them as almost
indispensable. Ten of these small vessels would be of incalculable
advantage to the naval service, and the whole cost of their construction
would not exceed $2,300,000, or $230,000 each.

The report of the Secretary of the Interior is worthy of grave
consideration. It treats of the numerous important and diversified
branches of domestic administration intrusted to him by law. Among these
the most prominent are the public lands and our relations with the
Indians. Our system for the disposal of the public lands, originating
with the fathers of the Republic, has been improved as experience
pointed the way, and gradually adapted to the growth and settlement of
our Western States and Territories. It has worked well in practice.
Already thirteen States and seven Territories have been carved out of
these lands, and still more than a thousand millions of acres remain
unsold. What a boundless prospect this presents to our country of future
prosperity and power!

We have heretofore disposed of 363,862,464 acres of the public land.
Whilst the public lands, as a source of revenue, are of great
importance, their importance is far greater as furnishing homes for a
hardy and independent race of honest and industrious citizens who desire
to subdue and cultivate the soil. They ought to be administered mainly
with a view of promoting this wise and benevolent policy. In
appropriating them for any other purpose we ought to use even greater
economy than if they had been converted into money and the proceeds were
already in the public Treasury. To squander away this richest and
noblest inheritance which any people have ever enjoyed upon objects of
doubtful constitutionality or expediency would be to violate one of the
most important trusts ever committed to any people. Whilst I do not deny
to Congress the power, when acting bona fide as a proprietor, to give
away portions of them for the purpose of increasing the value of the
remainder, yet, considering the great temptation to abuse this power, we
can not be too cautious in its exercise. Actual settlers under existing
laws are protected against other purchasers at the public sales in their
right of preemption to the extent of a quarter section, or 160 acres, of
land. The remainder may then be disposed of at public or entered at
private sale in unlimited quantities. Speculation has of late years
prevailed to a great extent in the public lands. The consequence has
been that large portions of them have become the property of individuals
and companies, and thus the price is greatly enhanced to those who
desire to purchase for actual settlement. In order to limit the area of
speculation as much as possible, the extinction of the Indian title and
the extension of the public surveys ought only to keep pace with the
tide of emigration.

If Congress should hereafter grant alternate sections to States or
companies, as they have done heretofore, I recommend that the
intermediate sections retained by the Government should be subject to
preemption by actual settlers.

It ought ever to be our cardinal policy to reserve the public lands as
much as may be for actual settlers, and this at moderate prices. We
shall thus not only best promote the prosperity of the new States and
Territories and the power of the Union, but shall secure homes for our
posterity for many generations.

The extension of our limits has brought within our jurisdiction many
additional and populous tribes of Indians, a large proportion of which
are wild, untractable, and difficult to control. Predatory and warlike
in their disposition and habits, it is impossible altogether to restrain
them from committing aggressions on each other, as well as upon our
frontier citizens and those emigrating to our distant States and
Territories. Hence expensive military expeditions are frequently
necessary to overawe and chastise the more lawless and hostile. The
present system of making them valuable presents to influence them to
remain at peace has proved ineffectual. It is believed to be the better
policy to colonize them in suitable localities where they can receive
the rudiments of education and be gradually induced to adopt habits of
industry. So far as the experiment has been tried it has worked well in
practice, and it will doubtless prove to be less expensive than the
present system.

The whole number of Indians within our territorial limits is believed to
be, from the best data in the Interior Department, about 325,000. The
tribes of Cherokees, Choctaws, Chickasaws, and Creeks settled in the
Territory set apart for them west of Arkansas are rapidly advancing in
education and in all the arts of civilization and self-government and we
may indulge the agreeable anticipation that at no very distant day they
will be incorporated into the Union as one of the sovereign States.

It will be seen from the report of the Postmaster-General that the
Post-Office Department still continues to depend on the Treasury, as it
has been compelled to do for several years past, for an important
portion of the means of sustaining and extending its operations. Their
rapid growth and expansion are shown by a decennial statement of the
number of post-offices and the length of post-roads, commencing with the
year 1827. In that year there were 7,000 post-offices; in 1837, 11,177;
in 1847, 15,146, and in 1857 they number 26,586. In this year 1,725
post-offices have been established and 704 discontinued, leaving a net
increase of 1,021. The postmasters of 368 offices are appointed by the
President.

The length of post-roads in 1827 was 105,336 miles; in 1837,141,242
miles; in 1847, 153,818 miles, and in the year 1857 there are 242,601
miles of post-road, including 22,530 miles of railroad on which the
mails are transported.

The expenditures of the Department for the fiscal year ending on the
30th June, 1857, as adjusted by the Auditor, amounted to $11,507,670. To
defray these expenditures there was to the credit of the Department on
the 1st July, 1856, the sum of $789,599; the gross revenue of the year,
including the annual allowances for the transportation of free mail
matter, produced $8,053,951, and the remainder was supplied by the
appropriation from the Treasury of $2,250,000 granted by the act of
Congress approved August 18, 1856, and by the appropriation of $666,883
made by the act of March 3, 1857, leaving $252,763 to be carried to the
credit of the Department in the accounts of the current year. I commend
to your consideration the report of the Department in relation to the
establishment of the overland mail route from the Mississippi River to
San Francisco, Cal. The route was selected with my full concurrence, as
the one, in my judgment, best calculated to attain the important objects
contemplated by Congress.

The late disastrous monetary revulsion may have one good effect should
it cause both the Government and the people to return to the practice of
a wise and judicious economy both in public and private expenditures.

An overflowing Treasury has led to habits of prodigality and
extravagance in our legislation. It has induced Congress to make large
appropriations to objects for which they never would have provided had
it been necessary to raise the amount of revenue required to meet them
by increased taxation or by loans. We are now compelled to pause in our
career and to scrutinize our expenditures with the utmost vigilance; and
in performing this duty I pledge my cooperation to the extent of my
constitutional competency.

It ought to be observed at the same time that true public economy does
not consist in withholding the means necessary to accomplish important
national objects intrusted to us by the Constitution, and especially
such as may be necessary for the common defense. In the present crisis
of the country it is our duty to confine our appropriations to objects
of this character, unless in cases where justice to individuals may
demand a different course. In all cases care ought to be taken that the
money granted by Congress shall be faithfully and economically applied.

Under the Federal Constitution "every bill which shall have passed the
House of Representatives and the Senate shall, before it become a law,"
be approved and signed by the President; and if not approved, "he shall
return it with his objections to that House in which it shall have
originated." In order to perform this high and responsible duty,
sufficient time must be allowed the President to read and examine every
bill presented to him for approval. Unless this be afforded, the
Constitution becomes a dead letter in this particular, and; even worse,
it becomes a means of deception. Our constituents, seeing the
President's approval and signature attached to each act of Congress, are
induced to believe that he has actually performed his duty, when in
truth nothing is in many cases more unfounded.

From the practice of Congress such an examination of each bill as the
Constitution requires has been rendered impossible. The most important
business of each session is generally crowded into its last hours, and
the alternative presented to the President is either to violate the
constitutional duty which he owes to the people and approve bills which
for want of time it is impossible he should have examined, or by his
refusal to do this subject the country and individuals to great loss and
inconvenience.

Besides, a practice has grown up of late years to legislate in
appropriation bills at the last hours of the session on new and
important subjects. This practice constrains the President either to
suffer measures to become laws which he does not approve or to incur the
risk of stopping the wheels of the Government by vetoing an
appropriation bill. Formerly such bills were confined to specific
appropriations for carrying into effect existing laws and the
well-established policy of the country, and little time was then
requited by the President for their examination.

For my own part, I have deliberately determined that I shall approve no
bills which I have not examined, and it will be a case of extreme and
most urgent necessity which shall ever induce me to depart from this
rule. I therefore respectfully but earnestly recommend that the two
Houses would allow the President at least two days previous to the
adjournment of each session within which no new bill shall be presented
to him for approval. Under the existing joint rule one day is allowed,
but this rule has been hitherto so constantly suspended in practice that
important bills continue to be presented to him up till the very last
moments of the session. In a large majority of cases no great public
inconvenience can arise from the want of time to examine their
provisions, because the Constitution has declared that if a bill be
presented to the President within the last ten days of the session he is
not required to return it, either with an approval or with a veto, "in
which case it shall not be a law." It may then lie over and be taken up
and passed at the next session. Great inconvenience would only be
experienced in regard to appropriation bills, but, fortunately, under
the late excellent law allowing a salary instead of a per diem to
members of Congress the expense and inconvenience of a called session
will be greatly reduced.

I can not conclude without commending to your favorable consideration
the interest of the people of this District. Without a representative on
the floor of Congress, they have for this very reason peculiar claims
upon our just regard. To this I know, from my long acquaintance with
them, they are eminently entitled.

***

State of the Union Address
James Buchanan
December 6, 1858

Fellow-Citizens of the Senate and House of Representatives:

When we compare the condition of the country at the present day with
what it was one year ago at the meeting of Congress, we have much reason
for gratitude to that Almighty Providence which has never failed to
interpose for our relief at the most critical periods of our history.
One year ago the sectional strife between the North and the South on the
dangerous subject of slavery had again become so intense as to threaten
the peace and perpetuity of the Confederacy. The application for the
admission of Kansas as a State into the Union fostered this unhappy
agitation and brought the whole subject once more before Congress. It
was the desire of every patriot that such measures of legislation might
be adopted as would remove the excitement from the States and confine it
to the Territory where it legitimately belonged. Much has been done, I
am happy to say, toward the accomplishment of this object during the
last session of Congress. The Supreme Court of the United States had
previously decided that all American citizens have an equal right to
take into the Territories whatever is held as property under the laws of
any of the States, and to hold such property there under the
guardianship of the Federal Constitution so long as the Territorial
condition shall remain.

This is now a well-established position, and the proceedings of the last
session were alone wanting to give it practical effect. The principle
has been recognized in some form or other by an almost unanimous vote of
both Houses of Congress that a Territory has a right to come into the
Union either as a free or a slave State, according to the will of a
majority of its people. The just equality of all the States has thus
been vindicated and a fruitful source of dangerous dissension among them
has been removed.

Whilst such has been the beneficial tendency of your legislative
proceedings outside of Kansas, their influence has nowhere been so happy
as within that Territory itself. Left to manage and control its own
affairs in its own way, without the pressure of external influence, the
revolutionary Topeka organization and all resistance to the Territorial
government established by Congress have been finally abandoned. As a
natural consequence that fine Territory now appears to be tranquil and
prosperous and is attracting increasing thousands of immigrants to make
it their happy home.

The past unfortunate experience of Kansas has enforced the lesson, so
often already taught, that resistance to lawful authority under our form
of government can not fail in the end to prove disastrous to its
authors. Had the people of the Territory yielded obedience to the laws
enacted by their legislature, it would at the present moment have
contained a large additional population of industrious and enterprising
citizens, who have been deterred from entering its borders by the
existence of civil strife and organized rebellion.

It was the resistance to rightful authority and the persevering attempts
to establish a revolutionary government under the Topeka constitution
which caused the people of Kansas to commit the grave error of refusing
to vote for delegates to the convention to frame a constitution under a
law not denied to be fair and just in its provisions. This refusal to
vote has been the prolific source of all the evils which have followed,
In their hostility to the Territorial government they disregarded the
principle, absolutely essential to the working of our form of
government, that a majority of those who vote, not the majority who may
remain at home, from whatever cause, must decide the result of an
election. For this reason, seeking to take advantage of their own error,
they denied the authority of the convention thus elected to frame a
constitution.

The convention, notwithstanding, proceeded to adopt a constitution
unexceptionable in its general features, and providing for the
submission of the slavery question to a vote of the people, which, in my
opinion, they were bound to do under the Kansas and Nebraska act. This
was the all-important question which had alone convulsed the Territory;
and yet the opponents of the lawful government, persisting in their
first error, refrained from exercising their right to vote, and
preferred that slavery should continue rather than surrender their
revolutionary Topeka organization.

A wiser and better spirit seemed to prevail before the first Monday of
January last, when an election was held under the constitution. A
majority of the people then voted for a governor and other State
officers, for a Member of Congress and members of the State legislature.
This election was warmly contested by the two political parties in
Kansas, and a greater vote was polled than at any previous election. A
large majority of the members of the legislature elect belonged to that
party which had previously refused to vote. The antislavery party were
thus placed in the ascendant, and the political power of the State was
in their own hands. Had Congress admitted Kansas into the Union under
the Lecompton constitution, the legislature might at its very first
session have submitted the question to a vote of the people whether they
would or would not have a convention to amend their constitution, either
on the slavery or any other question, and have adopted all necessary
means for giving speedy effect to the will of the majority. Thus the
Kansas question would have been immediately and finally settled.

Under these circumstances I submitted to Congress the constitution thus
framed, with all the officers already elected necessary to put the State
government into operation, accompanied by a strong recommendation in
favor of the admission of Kansas as a State. In the course of my long
public life I have never performed any official act which in the
retrospect has afforded me more heartfelt satisfaction. Its admission
could have inflicted no possible injury on any human being, whilst it
would within a brief period have restored peace to Kansas and harmony to
the Union. In that event the slavery question would ere this have been
finally settled according to the legally expressed will of a majority of
the voters, and popular sovereignty would thus have been vindicated in a
constitutional manner.

With my deep convictions of duty I could have pursued no other course.
It is true that as an individual I had expressed an opinion, both before
and during the session of the convention, in favor of submitting the
remaining clauses of the constitution, as well as that concerning
slavery, to the people. But, acting in an official character, neither
myself nor any human authority had the power to rejudge the proceedings
of the convention and declare the constitution which it had framed to be
a nullity. To have done this would have been a violation of the Kansas
and Nebraska act, which left the people of the Territory "perfectly free
to form and regulate their domestic institutions in their own way,
subject only to the Constitution of the United States." It would equally
have violated the great principle of popular sovereignty, at the
foundation of our institutions, to deprive the people of the power, if
they thought proper to exercise it, of confiding to delegates elected by
themselves the trust of framing a constitution without requiring them to
subject their constituents to the trouble, expense, and delay of a
second election. It would have been in opposition to many precedents in
our history, commencing in the very best age of the Republic, of the
admission of Territories as States into the Union without a previous
vote of the people approving their constitution.

It is to be lamented that a question so insignificant when viewed in its
practical effects on the people of Kansas, whether decided one way or
the other, should have kindled such a flame of excitement throughout the
country. This reflection may prove to be a lesson of wisdom and of
warning for our future guidance. Practically considered, the question is
simply whether the people of that Territory should first come into the
Union and then change any provision in their constitution not agreeable
to themselves, or accomplish the very same object by remaining out of
the Union and framing another constitution in accordance with their
will. In either case the result would be precisely the same. The only
difference, in point of fact, is that the object would have been much
sooner attained and the pacification of Kansas more speedily effected
had it been admitted as a State during the last session of Congress.

My recommendation, however, for the immediate admission of Kansas failed
to meet the approbation of Congress. They deemed it wiser to adopt a
different measure for the settlement of the question. For my own part, I
should have been willing to yield my assent to almost any constitutional
measure to accomplish this object. I therefore cordially acquiesced in
what has been called the English compromise and approved the "act for
the admission of the State of Kansas into the Union" upon the terms
therein prescribed.

Under the ordinance which accompanied the Lecompton constitution the
people of Kansas had claimed double the quantity of public lands for the
support of common schools which had ever been previously granted to any
State upon entering the Union, and also the alternate sections of land
for 12 miles on each side of two railroads proposed to be constructed
from the northern to the southern boundary and from the eastern to the
western boundary of the State. Congress, deeming these claims
unreasonable, provided by the act of May 4, 1858, to which I have just
referred, for the admission of the State on an equal footing with the
original States, but "upon the fundamental condition precedent" that a
majority of the people thereof, at an election to be held for that
purpose, should, in place of the very large grants of public lands which
they had demanded under the ordinance, accept such grants as had been
made to Minnesota and other new States. Under this act, should a
majority reject the proposition offered them, "it shall be deemed and
held that the people of Kansas do not desire admission into the Union
with said constitution under the conditions set forth in said
proposition." In that event the act authorizes the people of the
Territory to elect delegates to form a constitution and State government
for themselves "whenever, and not before, it is ascertained by a census,
duly and legally taken, that the population of said Territory equals or
exceeds the ratio of representation required for a member of the House
of Representatives of the Congress of the United States." The delegates
thus assembled "shall first determine by a vote whether it is the wish
of the people of the proposed State to be admitted into the Union at
that time, and, if so, shall proceed to form a constitution and take all
necessary steps for the establishment of a State government in
conformity with the Federal Constitution." After this constitution shall
have been formed, Congress, carrying out the principles of popular
sovereignty and nonintervention, have left "the mode and manner of its
approval or ratification by the people of the proposed State" to be
"prescribed by law," and they "shall then be admitted into the Union as
a State under such constitution, thus fairly and legally made, with or
without slavery, as said constitution may prescribe."

An election was held throughout Kansas, in pursuance of the provisions
of this act, on the 2d day of August last, and it resulted in the
rejection by a large majority of the proposition submitted to the people
by Congress. This being the case, they are now authorized to form
another constitution, preparatory to admission into the Union, but not
until their number, as ascertained by a census, shall equal or exceed
the ratio required to elect a member to the House of Representatives.

It is not probable, in the present state of the case, that a third
constitution can be lawfully framed and presented to Congress by Kansas
before its population shall have reached the designated number. Nor is
it to be presumed that after their sad experience in resisting the
Territorial laws they will attempt to adopt a constitution in express
violation of the provisions of an act of Congress. During the session of
1856 much of the time of Congress was occupied on the question of
admitting Kansas under the Topeka constitution. Again, nearly the whole
of the last session was devoted to the question of its admission under
the Lecompton constitution. Surely it is not unreasonable to require the
people of Kansas to wait before making a third attempt until the number
of their inhabitants shall amount to 93,420. During this brief period
the harmony of the States as well as the great business interests of the
country demand that the people of the Union shall not for a third time
be convulsed by another agitation on the Kansas question. By waiting for
a short time and acting in obedience to law Kansas will glide into the
Union without the slightest impediment.

This excellent provision, which Congress have applied to Kansas, ought
to be extended and rendered applicable to all Territories which may
hereafter seek admission into the Union.

Whilst Congress possess the undoubted power of admitting a new State
into the Union, however small may be the number of its inhabitants, yet
this power ought not, in my opinion, to be exercised before the
population shall amount to the ratio required by the act for the
admission of Kansas. Had this been previously the rule, the country
would have escaped all the evils and misfortunes to which it has been
exposed by the Kansas question.

Of course it would be unjust to give this rule a retrospective
application, and exclude a State which, acting upon the past practice of
the Government, has already formed its constitution, elected its
legislature and other officers, and is now prepared to enter the Union.
The rule ought to be adopted, whether we consider its bearing on the
people of the Territories or upon the people of the existing States.
Many of the serious dissentions which have prevailed in Congress and
throughout the country would have been avoided had this rule been
established at an earlier period of the Government.

Immediately upon the formation of a new Territory people from different
States and from foreign countries rush into it for the laudable purpose
of improving their condition. Their first duty to themselves is to open
and cultivate farms, to construct roads, to establish schools, to erect
places of religious worship, and to devote their energies generally to
reclaim the wilderness and to lay the foundations of a flourishing and
prosperous commonwealth. If in this incipient condition, with a
population of a few thousand, they should prematurely enter the Union,
they are oppressed by the burden of State taxation, and the means
necessary for the improvement of the Territory and the advancement of
their own interests are thus diverted to very different purposes.

The Federal Government has ever been a liberal parent to the Territories
and a generous contributor to the useful enterprises of the early
settlers. It has paid the expenses of their governments and legislative
assemblies out of the common Treasury, and thus relieved them from a
heavy charge. Under these circumstances nothing can be better calculated
to retard their material progress than to divert them from their useful
employments by prematurely exciting angry political contests among
themselves for the benefit of aspiring leaders. It is surely no hardship
for embryo governors, Senators, and Members of Congress to wait until
the number of inhabitants shall equal those of a single Congressional
district. They surely ought not to be permitted to rush into the Union
with a population less than one-half of several of the large counties in
the interior of some of the States. This was the condition of Kansas
when it made application to be admitted under the Topeka constitution.
Besides, it requires some time to render the mass of a population
collected in a new Territory at all homogeneous and to unite them on
anything like a fixed policy. Establish the rule, and all will look
forward to it and govern themselves accordingly. But justice to the
people of the several States requires that this rule should be
established by Congress. Each State is entitled to two Senators and at
least one Representative in Congress. Should the people of the States
fail to elect a Vice-President, the power devolves upon the Senate to
select this officer from the two highest candidates on the list. In case
of the death of the President, the Vice-President thus elected by the
Senate becomes President of the United States. On all questions of
legislation the Senators from the smallest States of the Union have an
equal vote with those from the largest. The same may be said in regard
to the ratification of treaties and of Executive appointments. All this
has worked admirably in practice, whilst it conforms in principle with
the character of a Government instituted by sovereign States. I presume
no American citizen would desire the slightest change in the
arrangement. Still, is it not unjust and unequal to the existing States
to invest some 40,000 or 50,000 people collected in a Territory with the
attributes of sovereignty and place them on an equal footing with
Virginia and New York in the Senate of the United States?

For these reasons I earnestly recommend the passage of a general act
which shall provide that, upon the application of a Territorial
legislature declaring their belief that the Territory contains a number
of inhabitants which, if in a State, would entitle them to elect a
Member of Congress, it shall be the duty of the President to cause a
census of the inhabitants to be taken, and if found sufficient then by
the terms of this act to authorize them to proceed "in their own way" to
frame a State constitution preparatory to admission into the Union. I
also recommend that an appropriation may be made to enable the President
to take a census of the people of Kansas.

The present condition of the Territory of Utah, when contrasted with
what it was one year ago, is a subject for congratulation. It was then
in a state of open rebellion, and, cost what it might, the character of
the Government required that this rebellion should be suppressed and the
Mormons compelled to yield obedience to the Constitution and the laws.
In order to accomplish this object, as I informed you in my last annual
message, I appointed a new governor instead of Brigham Young, and other
Federal officers to take the place of those who, consulting their
personal safety, had found it necessary to withdraw from the Territory.

To protect these civil officers, and to aid them, as a posse comitatus,
in the execution of the laws in case of need, I ordered a detachment of
the Army to accompany them to Utah. The necessity for adopting these
measures is now demonstrated.

On the 15th of September, 1857, Governor Young issued his proclamation,
in the style of an independent sovereign, announcing his purpose to
resist by force of arms the entry of the United States troops into our
own Territory of Utah. By this he required all the forces in the
Territory to "hold themselves in readiness to march at a moment's notice
to repel any and all such invasion," and established martial law from
its date throughout the Territory. These proved to be no idle threats.
Forts Bridger and Supply were vacated and burnt down by the Mormons to
deprive our troops of a shelter after their long and fatiguing march.
Orders were issued by Daniel H. Wells, styling himself "Lieutenant
General, Nauvoo Legion," to stampede the animals of the United States
troops on their march, to set fire to their trains, to burn the grass
and the whole country before them and on their flanks, to keep them from
sleeping by night surprises, and to blockade the road by felling trees
and destroying the fords of rivers, etc.

These orders were promptly and effectually obeyed. On the 4th of
October, 1857, the Mormons captured and burned, on Green River, three of
our supply trains, consisting of seventy-five wagons loaded with
provisions and tents for the army, and carried away several hundred
animals. This diminished the supply of provisions so materially that
General Johnston was obliged to reduce the ration, and even with this
precaution there was only sufficient left to subsist the troops until
the 1st of June.

Our little army behaved admirably in their encampment at Fort Bridger
under these trying privations. In the midst of the mountains, in a
dreary, unsettled, and inhospitable region, more than a thousand miles
from home, they passed the severe and inclement winter without a murmur.
They looked forward with confidence for relief from their country in due
season, and in this they were not disappointed. The Secretary of War
employed all his energies to forward them the necessary supplies and to
muster and send such a military force to Utah as would render resistance
on the part of the Mormons hopeless, and thus terminate the war without
the effusion of blood. In his efforts he was efficiently sustained by
Congress. They granted appropriations sufficient to cover the deficiency
thus necessarily created, and also provided for raising two regiments of
volunteers "for the purpose of quelling disturbances in the Territory of
Utah, for the protection of supply and emigrant trains, and the
suppression of Indian hostilities on the frontiers." Happily, there was
no occasion to call these regiments into service. If there had been, I
should have felt serious embarrassment in selecting them, so great was
the number of our brave and patriotic citizens anxious to serve their
country in this distant and apparently dangerous expedition. Thus it has
ever been, and thus may it ever be.

The wisdom and economy of sending sufficient reenforcements to Utah are
established, not only by the event, but in the opinion of those who from
their position and opportunities are the most capable of forming a
correct judgment. General Johnston, the commander of the forces, in
addressing the Secretary of War from Fort Bridger under date of October
18, 1857, expresses the opinion that "unless a large force is sent here,
from the nature of the country a protracted war on their [the Mormons's]
part is inevitable." This he considered necessary to terminate the war
"speedily and more economically than if attempted by insufficient
means."

In the meantime it was my anxious desire that the Mormons should yield
obedience to the Constitution and the laws without rendering it
necessary to resort to military force. To aid in accomplishing this
object, I deemed it advisable in April last to dispatch two
distinguished citizens of the United States, Messrs. Powell and
McCulloch, to Utah. They bore with them a proclamation addressed by
myself to the inhabitants of Utah, dated on the 6th day of that month,
warning them of their true condition and how hopeless it was on their
part to persist in rebellion against the United States, and offering all
those who should submit to the laws a full pardon for their past
seditions and treasons. At the same time I assured those who should
persist in rebellion against the United States that they must expect no
further lenity, but look to be rigorously dealt with according to their
deserts. The instructions to these agents, as well as a copy of the
proclamation and their reports, are herewith submitted. It will be seen
by their report of the 3d of July last that they have fully confirmed
the opinion expressed by General Johnston in the previous October as to
the necessity of sending reenforcements to Utah. In this they state that
they "are firmly impressed with the belief that the presence of the Army
here and the large additional force that had been ordered to this
Territory were the chief inducements that caused the Mormons to abandon
the idea of resisting the authority of the United States. A less
decisive policy would probably have resulted in a long, bloody, and
expensive war."

These gentlemen conducted themselves to my entire satisfaction and
rendered useful services in executing the humane intentions of the
Government.

It also affords me great satisfaction to state that Governor Cumming has
performed his duty in an able and conciliatory manner and with the
happiest effect. I can not in this connection refrain from mentioning
the valuable services of Colonel Thomas L. Kane, who, from motives of
pure benevolence and without any official character or pecuniary
compensation, visited Utah during the last inclement winter for the
purpose of contributing to the pacification of the Territory.

I am happy to inform you that the governor and other civil officers of
Utah are now performing their appropriate functions without resistance.
The authority of the Constitution and the laws has been fully restored
and peace prevails throughout the Territory. A portion of the troops
sent to Utah are now encamped in Cedar Valley, 44 miles southwest of
Salt Lake City, and the remainder have been ordered to Oregon to
suppress Indian hostilities.

The march of the army to Salt Lake City through the Indian Territory has
had a powerful effect in restraining the hostile feelings against the
United States which existed among the Indians in that region and in
securing emigrants to the far West against their depredations. This will
also be the means of establishing military posts and promoting
settlements along the route. I recommend that the benefits of our land
laws and preemption system be extended to the people of Utah by the
establishment of a land office in that Territory.

I have occasion also to congratulate you on the result of our
negotiations with China.

You were informed by my last annual message that our minister had been
instructed to occupy a neutral position in the hostilities conducted by
Great Britain and France against Canton. He was, however, at the same
time directed to cooperate cordially with the British and French
ministers in all peaceful measures to secure by treaty those just
concessions to foreign commerce which the nations of the world had a
right to demand. It was impossible for me to proceed further than this
on my own authority without usurping the war-making power, which under
the Constitution belongs exclusively to Congress.

Besides, after a careful examination of the nature and extent of our
grievances, I did not believe they were of such a pressing and
aggravated character as would have justified Congress in declaring war
against the Chinese Empire without first making another earnest attempt
to adjust them by peaceful negotiation. I was the more inclined to this
opinion because of the severe chastisement which had then but recently
been inflicted upon the Chinese by our squadron in the capture and
destruction of the Barrier forts to avenge an alleged insult to our
flag. The event has proved the wisdom of our neutrality. Our minister
has executed his instructions with eminent skill and ability. In
conjunction with the Russian plenipotentiary, he has peacefully, but
effectually, cooperated with the English and French plenipotentiaries,
and each of the four powers has concluded a separate treaty with China
of a highly satisfactory character. The treaty concluded by our own
plenipotentiary will immediately be submitted to the Senate.

I am happy to announce that through the energetic yet conciliatory
efforts of our consul-general in Japan a new treaty has been concluded
with that Empire, which may be expected materially to augment our trade
and intercourse in that quarter and remove from our countrymen the
disabilities which have heretofore been imposed upon the exercise of
their religion. The treaty shall be submitted to the Senate for approval
without delay.

It is my earnest desire that every misunderstanding with the Government
of Great Britain should be amicably and speedily adjusted. It has been
the misfortune of both countries, almost ever since the period of the
Revolution, to have been annoyed by a succession of irritating and
dangerous questions, threatening their friendly relations. This has
partially prevented the full development of those feelings of mutual
friendship between the people of the two countries so natural in
themselves and so conducive to their common interest. Any serious
interruption of the commerce between the United States and Great Britain
would be equally injurious to both. In fact, no two nations have ever
existed on the face of the earth which could do each other so much good
or so much harm.

Entertaining these sentiments, I am gratified to inform you that the
long-pending controversy between the two Governments in relation to the
question of visitation and search has been amicably adjusted. The claim
on the part of Great Britain forcibly to visit American vessels on the
high seas in time of peace could not be sustained under the law of
nations, and it had been overruled by her own most eminent jurists. This
question was recently brought to an issue by the repeated acts of
British cruisers in boarding and searching our merchant vessels in the
Gulf of Mexico and the adjacent seas. These acts were the more injurious
and annoying, as these waters are traversed by a large portion of the
commerce and navigation of the United States and their free and
unrestricted use is essential to the security of the coastwise trade
between the different States of the Union. Such vexatious interruptions
could not fail to excite the feelings of the country and to require the
interposition of the Government. Remonstrances were addressed to the
British Government against these violations of our rights of
sovereignty, and a naval force was at the same time ordered to the Cuban
waters with directions "to protect all vessels of the United States on
the high seas from search or detention by the vessels of war of any
other nation." These measures received the unqualified and even
enthusiastic approbation of the American people. Most fortunately,
however, no collision took place, and the British Government promptly
avowed its recognition of the principles of international law upon this
subject as laid down by the Government of the United States in the note
of the Secretary of State to the British minister at Washington of April
10, 1858, which secure the vessels of the United States upon the high
seas from visitation or search in time of peace under any circumstances
whatever. The claim has been abandoned in a manner reflecting honor on
the British Government and evincing a just regard for the law of
nations, and can not fail to strengthen the amicable relations between
the two countries.

The British Government at the same time proposed to the United States
that some mode should be adopted, by mutual arrangement between the two
countries, of a character which may be found effective without being
offensive, for verifying the nationality of vessels suspected on good
grounds of carrying false colors. They have also invited the United
States to take the initiative and propose measures for this purpose.
Whilst declining to assume so grave a responsibility, the Secretary of
State has informed the British Government that we are ready to receive
any proposals which they may feel disposed to offer having this object
in view, and to consider them in an amicable spirit. A strong opinion
is, however, expressed that the occasional abuse of the flag of any
nation is an evil far less to be deprecated than would be the
establishment of any regulations which might be incompatible with the
freedom of the seas. This Government has yet received no communication
specifying the manner in which the British Government would propose to
carry out their suggestion, and I am inclined to believe that no plan
which can be devised will be free from grave embarrassments. Still, I
shall form no decided opinion on the subject until I shall have
carefully and in the best spirit examined any proposals which they may
think proper to make.

I am truly sorry I can not also inform you that the complications
between Great Britain and the United States arising out of the Clayton
and Bulwer treaty of April, 1850, have been finally adjusted.

At the commencement of your last session I had reason to hope that,
emancipating themselves from further unavailing discussions, the two
Governments would proceed to settle the Central American questions in a
practical manner, alike honorable and satisfactory to both; and this
hope I have not yet abandoned. In my last annual message I stated that
overtures had been made by the British Government for this purpose in a
friendly spirit, which I cordially reciprocated. Their proposal was to
withdraw these questions from direct negotiation between the two
Governments, but to accomplish the same object by a negotiation between
the British Government and each of the Central American Republics whose
territorial interests are immediately involved. The settlement was to be
made in accordance with the general tenor of the interpretation placed
upon the Clayton and Bulwer treaty by the United States, with certain
modifications. As negotiations are still pending upon this basis, it
would not be proper for me now to communicate their present condition. A
final settlement of these questions is greatly to be desired, as this
would wipe out the last remaining subject of dispute between the two
countries.

Our relations with the great Empires of France and Russia, as well as
with all other Governments on the continent of Europe, except that of
Spain, continue to be of the most friendly character.

With Spain our relations remain in an unsatisfactory condition. In my
message of December last I informed you that our envoy extraordinary and
minister plenipotentiary to Madrid had asked for his recall, and it was
my purpose to send out a new minister to that Court with special
instructions on all questions pending between the two Governments, and
with a determination to have them speedily and amicably adjusted if that
were possible. This purpose has been hitherto defeated by causes which I
need not enumerate. The mission to Spain has been intrusted to a
distinguished citizen of Kentucky, who will proceed to Madrid without
delay and make another and a final attempt to obtain justice from that
Government.

Spanish officials under the direct control of the Captain-General of
Cuba have insulted our national flag and in repeated instances have from
time to time inflicted injuries on the persons and property of our
citizens. These have given birth to numerous claims against the Spanish
Government, the merits of which have been ably discussed for a series of
years by our successive diplomatic representatives. Notwithstanding
this, we have not arrived at a practical result in any single instance,
unless we may except the case of the Black Warrior, under the late
Administration, and that presented an outrage of such a character as
would have justified an immediate resort to war. All our attempts to
obtain redress have been baffled and defeated. The frequent and
oft-recurring changes in the Spanish ministry have been employed as
reasons for delay. We have been compelled to wait again and again until
the new minister shall have had time to investigate the justice of our
demands.

Even what have been denominated "the Cuban claims," in which more than
100 of our citizens are directly interested, have furnished no
exception. These claims were for the refunding of duties unjustly
exacted from American vessels at different custom-houses in Cuba so long
ago as the year 1844. The principles upon which they rest are so
manifestly equitable and just that, after a period of nearly ten years,
in 1854 they were recognized by the Spanish Government. Proceedings were
afterwards instituted to ascertain their amount, and this was finally
fixed, according to their own statement (with which we were satisfied),
at the sum of $128,635.54. Just at the moment, after a delay of fourteen
years, when we had reason to expect that this sum would be repaid with
interest, we have received a proposal offering to refund one-third of
that amount ($42,878.41), but without interest, if we would accept this
in full satisfaction. The offer is also accompanied by a declaration
that this indemnification is not founded on any reason of strict
justice, but is made as a special favor.

One alleged cause for procrastination in the examination and adjustment
of our claims arises from an obstacle which it is the duty of the
Spanish Government to remove. Whilst the Captain-General of Cuba is
invested with general despotic authority in the government of that
island, the power is withheld from him to examine and redress wrongs
committed by officials under his control on citizens of the United
States. Instead of making our complaints directly to him at Havana, we
are obliged to present them through our minister at Madrid. These are
then referred back to the Captain-General for information, and much time
is thus consumed in preliminary investigations and correspondence
between Madrid and Cuba before the Spanish Government will consent to
proceed to negotiation. Many of the difficulties between the two
Governments would be obviated and a long train of negotiation avoided if
the Captain-General were invested with authority to settle questions of
easy solution on the spot, where all the facts are fresh and could be
promptly and satisfactorily ascertained. We have hitherto in vain urged
upon the Spanish Government to confer this power upon the
Captain-General, and our minister to Spain will again be instructed to
urge this subject on their notice. In this respect we occupy a different
position from the powers of Europe. Cuba is almost within sight of our
shores; our commerce with it is far greater than that of any other
nation, including Spain itself, and our citizens are in habits of daily
and extended personal intercourse with every part of the island. It is
therefore a great grievance that when any difficulty occurs, no matter
how unimportant, which might be readily settled at the moment, we should
be obliged to resort to Madrid, especially when the very first step to
be taken there is to refer it back to Cuba.

The truth is that Cuba, in its existing colonial condition, is a
constant source of injury and annoyance to the American people. It is
the only spot in the civilized world where the African slave trade is
tolerated, and we are bound by treaty with Great Britain to maintain a
naval force on the coast of Africa, at much expense both of life and
treasure, solely for the purpose of arresting slavers bound to that
island. The late serious difficulties between the United States and
Great Britain respecting the right of search, now so happily terminated,
could never have arisen if Cuba had not afforded a market for slaves. As
long as this market shall remain open there can be no hope for the
civilization of benighted Africa. Whilst the demand for slaves continues
in Cuba wars will be waged among the petty and barbarous chiefs in
Africa for the purpose of seizing subjects to supply this trade. In such
a condition of affairs it is impossible that the light of civilization
and religion can ever penetrate these dark abodes.

It has been made known to the world by my predecessors that the United
States have on several occasions endeavored to acquire Cuba from Spain
by honorable negotiation. If this were accomplished, the last relic of
the African slave trade would instantly disappear. We would not, if we
could, acquire Cuba in any other manner. This is due to our national
character. All the territory which we have acquired since the origin of
the Government has been by fair purchase from France, Spain, and Mexico
or by the free and voluntary act of the independent State of Texas in
blending her destinies with our own. This course we shall ever pursue,
unless circumstances should occur which we do not now anticipate,
rendering a departure from it clearly justifiable under the imperative
and overruling law of self-preservation. The island of Cuba, from its
geographical position, commands the mouth of the Mississippi and the
immense and annually increasing trade, foreign and coastwise, from the
valley of that noble river, now embracing half the sovereign States of
the Union. With that island under the dominion of a distant foreign
power this trade, of vital importance to these States, is exposed to the
danger of being destroyed in time of war, and it has hitherto been
subjected to perpetual injury and annoyance in time of peace. Our
relations with Spain, which ought to be of the most friendly character,
must always be placed in jeopardy whilst the existing colonial
government over the island shall remain in its present condition.

Whilst the possession of the island would be of vast importance to the
United States, its value to Spain is comparatively unimportant. Such was
the relative situation of the parties when the great Napoleon
transferred Louisiana to the United States. Jealous as he ever was of
the national honor and interests of France, no person throughout the
world has imputed blame to him for accepting a pecuniary equivalent for
this cession.

The publicity which has been given to our former negotiations upon this
subject and the large appropriation which may be required to effect the
purpose render it expedient before making another attempt to renew the
negotiation that I should lay the whole subject before Congress. This is
especially necessary, as it may become indispensable to success that I
should be intrusted with the means of making an advance to the Spanish
Government immediately after the signing of the treaty, without awaiting
the ratification of it by the Senate. I am encouraged to make this
suggestion by the example of Mr. Jefferson previous to the purchase of
Louisiana from France and by that of Mr. Polk in view of the acquisition
of territory from Mexico. I refer the whole subject to Congress and
commend it to their careful consideration.

I repeat the recommendation made in my message of December last in favor
of an appropriation "to be paid to the Spanish Government for the
purpose of distribution among the claimants in the Amistad case."
President Polk first made a similar recommendation in December, 1847,
and it was repeated by my immediate predecessor in December, 1853. I
entertain no doubt that indemnity is fairly due to these claimants under
our treaty with Spain of October 27, 1795; and whilst demanding justice
we ought to do justice. An appropriation promptly made for this purpose
could not fail to exert a favorable influence on our negotiations with
Spain.

Our position in relation to the independent States south of us on this
continent, and especially those within the limits of North America, is
of a peculiar character. The northern boundary of Mexico is coincident
with our own southern boundary from ocean to ocean, and we must
necessarily feel a deep interest in all that concerns the well-being and
the fate of so near a neighbor. We have always cherished the kindest
wishes for the success of that Republic, and have indulged the hope that
it might at last, after all its trials, enjoy peace and prosperity under
a free and stable government. We have never hitherto interfered,
directly or indirectly, with its internal affairs, and it is a duty
which we owe to ourselves to protect the integrity of its territory
against the hostile interference of any other power. Our geographical
position, our direct interest in all that concerns Mexico, and our
well-settled policy in regard to the North American continent render
this an indispensable duty.

Mexico has been in a state of constant revolution almost ever since it
achieved its independence. One military leader after another has usurped
the Government in rapid succession, and the various constitutions from
time to time adopted have been set at naught almost as soon as they were
proclaimed. The successive Governments have afforded no adequate
protection, either to Mexican citizens or foreign residents, against
lawless violence. Heretofore a seizure of the capital by a military
chieftain has been generally followed by at least the nominal submission
of the country to his rule for a brief period, but not so at the present
crisis of Mexican affairs. A civil war has been raging for some time
throughout the Republic between the central Government at the City of
Mexico, which has endeavored to subvert the constitution last framed by
military power, and those who maintain the authority of that
constitution. The antagonist parties each hold possession of different
States of the Republic, and the fortunes of the war are constantly
changing. Meanwhile the most reprehensible means have been employed by
both parties to extort money from foreigners, as well as natives, to
carry on this ruinous contest. The truth is that this fine country,
blessed with a productive soil and a benign climate, has been reduced by
civil dissension to a condition of almost hopeless anarchy and
imbecility. It would be vain for this Government to attempt to enforce
payment in money of the claims of American citizens, now amounting to
more than $10,000,000, against Mexico, because she is destitute of all
pecuniary means to satisfy these demands.

Our late minister was furnished with ample powers and instructions for
the adjustment of all pending questions with the central Government of
Mexico, and he performed his duty with zeal and ability. The claims of
our citizens, some of them arising out of the violation of an express
provision of the treaty of Guadalupe Hidalgo, and others from gross
injuries to persons as well as property, have remained unredressed and
even unnoticed. Remonstrances against these grievances have been
addressed without effect to that Government. Meantime in various parts
of the Republic instances have been numerous of the murder,
imprisonment, and plunder of our citizens by different parties claiming
and exercising a local jurisdiction; but the central Government,
although repeatedly urged thereto, have made no effort either to punish
the authors of these outrages or to prevent their recurrence. No
American citizen can now visit Mexico on lawful business without
imminent danger to his person and property. There is no adequate
protection to either, and in this respect our treaty with that Republic
is almost a dead letter.

This state of affairs was brought to a crisis in May last by the
promulgation of a decree levying a contribution pro rata upon all the
capital in the Republic between certain specified amounts, whether held
by Mexicans or foreigners. Mr. Forsyth, regarding this decree in the
light of a "forced loan," formally protested against its application to
his countrymen and advised them not to pay the contribution, but to
suffer it to be forcibly exacted. Acting upon this advice, an American
citizen refused to pay the contribution, and his property was seized by
armed men to satisfy the amount. Not content with this, the Government
proceeded still further and issued a decree banishing him from the
country. Our minister immediately notified them that if this decree
should be carried into execution he would feel it to be his duty to
adopt "the most decided measures that belong to the powers and
obligations of the representative office." Notwithstanding this warning,
the banishment was enforced, and Mr. Forsyth promptly announced to the
Government the suspension of the political relations of his legation
with them until the pleasure of his own Government should be
ascertained.

This Government did not regard the contribution imposed by the decree of
the 15th May last to be in strictness a "forced loan," and as such
prohibited by the tenth article of the treaty of 1826 between Great
Britain and Mexico, to the benefits of which American citizens are
entitled by treaty; yet the imposition of the contribution upon
foreigners was considered an unjust and oppressive measure. Besides,
internal factions in other parts of the Republic were at the same time
levying similar exactions upon the property of our citizens and
interrupting their commerce. There had been an entire failure on the
part of our minister to secure redress for the wrongs which our citizens
had endured, notwithstanding his persevering efforts. And from the
temper manifested by the Mexican Government he had repeatedly assured us
that no favorable change could be expected until the United States
should "give striking evidence of their will and power to protect their
citizens," and that "severe chastening is the only earthly remedy for
our grievances." From this statement of facts it would have been worse
than idle to direct Mr. Forsyth to retrace his steps and resume
diplomatic relations with that Government, and it was therefore deemed
proper to sanction his withdrawal of the legation from the City of
Mexico.

Abundant cause now undoubtedly exists for a resort to hostilities
against the Government still holding possession of the capital. Should
they succeed in subduing the constitutional forces, all reasonable hope
will then have expired of a peaceful settlement of our difficulties. On
the other hand, should the constitutional party prevail and their
authority be established over the Republic, there is reason to hope that
they will be animated by a less unfriendly spirit and may grant that
redress to American citizens which justice requires so far as they may
possess the means. But for this expectation I should at once have
recommended to Congress to grant the necessary power to the President to
take possession of a sufficient portion of the remote and unsettled
territory of Mexico, to be held in pledge until our injuries shall be
redressed and our just demands be satisfied. We have already exhausted
every milder means of obtaining justice. In such a case this remedy of
reprisals is recognized by the law of nations, not only as just in
itself, but as a means of preventing actual war.

But there is another view of our relations with Mexico, arising from the
unhappy condition of affairs along our southwestern frontier, which
demands immediate action. In that remote region, where there are but few
white inhabitants, large bands of hostile and predatory Indians roam
promiscuously over the Mexican States of Chihuahua and Sonora and our
adjoining Territories. The local governments of these States are
perfectly helpless and are kept in a state of constant alarm by the
Indians. They have not the power, if they possessed the will, even to
restrain lawless Mexicans from passing the border and committing
depredations on our remote settlers. A state of anarchy and violence
prevails throughout that distant frontier. The laws are a dead letter
and life and property wholly insecure. For this reason the settlement of
Arizona is arrested, whilst it is of great importance that a chain of
inhabitants should extend all along its southern border sufficient for
their own protection and that of the United States mail passing to and
from California. Well-founded apprehensions are now entertained that the
Indians and wandering Mexicans, equally lawless, may break up the
important stage and postal communication recently established between
our Atlantic and Pacific possessions. This passes very near to the
Mexican boundary throughout the whole length of Arizona. I can imagine
no possible remedy for these evils and no mode of restoring law and
order on that remote and unsettled frontier but for the Government of
the United States to assume a temporary protectorate over the northern
portions of Chihuahua and Sonora and to establish military posts within
the same; and this I earnestly recommend to Congress. This protection
may be withdrawn as soon as local governments shall be established in
these Mexican States capable of performing their duties to the United
States, restraining the lawless, and preserving peace along the border.

I do not doubt that this measure will be viewed in a friendly spirit by
the governments and people of Chihuahua and Sonora, as it will prove
equally effectual for the protection of their citizens on that remote
and lawless frontier as for citizens of the United States. And in this
connection permit me to recall your attention to the condition of
Arizona. The population of that Territory, numbering, as is alleged,
more than 10,000 souls, are practically without a government, without
laws, and without any regular administration of justice. Murder and
other crimes are committed with impunity. This state of things calls
loudly for redress, and I therefore repeat my recommendation for the
establishment of a Territorial government over Arizona.

The political condition of the narrow isthmus of Central America,
through which transit routes pass between the Atlantic and Pacific
oceans, presents a subject of deep interest to all commercial nations.
It is over these transits that a large proportion of the trade and
travel between the European and Asiatic continents is destined to pass.
To the United States these routes are of incalculable importance as a
means of communication between their Atlantic and Pacific possessions.
The latter now extend throughout seventeen degrees of latitude on the
Pacific coast, embracing the important State of California and the
flourishing territories of Oregon and Washington. All commercial nations
therefore have a deep and direct interest that these communications
shall be rendered secure from interruption. If an arm of the sea
connecting the two oceans penetrated through Nicaragua and Costa Rica,
it could not be pretended that these States would have the right to
arrest or retard its navigation to the injury of other nations. The
transit by land over this narrow isthmus occupies nearly the same
position. It is a highway in which they themselves have little interest
when compared with the vast interests of the rest of the world. Whilst
their rights of sovereignty ought to be respected, it is the duty of
other nations to require that this important passage shall not be
interrupted by the civil wars and revolutionary outbreaks which have so
frequently occurred in that region. The stake is too important to be
left at the mercy of rival companies claiming to hold conflicting
contracts with Nicaragua. The commerce of other nations is not to stand
still and await the adjustment of such petty controversies. The
Government of the United States expect no more than this, and they will
not be satisfied with less. They would not, if they could, derive any
advantage from the Nicaragua transit not common to the rest of the
World. Its neutrality and protection for the common use of all nations
is their only object. They have no objection that Nicaragua shall demand
and receive a fair compensation from the companies and individuals who
may traverse the route, but they insist that it shall never hereafter be
closed by an arbitrary decree of that Government. If disputes arise
between it and those with whom they may have entered into contracts,
these must be adjusted by some fair tribunal provided for the purpose,
and the route must not be closed pending the controversy. This is our
whole policy, and it can not fail to be acceptable to other nations.

All these difficulties might be avoided if, consistently with the good
faith of Nicaragua, the use of this transit could be thrown open to
general competition, providing at the same time for the payment of a
reasonable rate to the Nicaraguan Government on passengers and freight.
In August, 1852, the Accessory Transit Company made its first
interoceanic trip over the Nicaraguan route, and continued in successful
operation, with great advantage to the public, until the 18th February,
1856, when it was closed and the grant to this company as well as its
charter were summarily and arbitrarily revoked by the Government of
President Rivas. Previous to this date, however, in 1854, serious
disputes concerning the settlement of their accounts had arisen between
the company and the Government, threatening the interruption of the
route at any moment. These the United States in vain endeavored to
compose. It would be useless to narrate the various proceedings which
took place between the parties up till the time when the transit was
discontinued. Suffice it to say that since February, 1856, it has
remained closed, greatly to the prejudice of citizens of the United
States. Since that time the competition has ceased between the rival
routes of Panama and Nicaragua, and in consequence thereof an unjust and
unreasonable amount has been exacted from our citizens for their passage
to and from California.

A treaty was signed on the 16th day of November, 1857, by the Secretary
of State and minister of Nicaragua, under the stipulations of which the
use and protection of the transit route would have been secured, not
only to the United States, but equally to all other nations. How and on
what pretext this treaty has failed to receive the ratification of the
Nicaraguan Government will appear by the papers herewith communicated
from the State Department. The principal objection seems to have been to
the provision authorizing the United States to employ force to keep the
route open in case Nicaragua should fail to perform her duty in this
respect. From the feebleness of that Republic, its frequent changes of
government, and its constant internal dissensions, this had become a
most important stipulation, and one essentially necessary, not only for
the security of the route, but for the safety of American citizens
passing and repassing to and from our Pacific possessions. Were such a
stipulation embraced in a treaty between the United States and
Nicaragua, the knowledge of this fact would of itself most probably
prevent hostile parties from committing aggressions on the route, and
render our actual interference for its protection unnecessary.

The executive government of this country in its intercourse with foreign
nations is limited to the employment of diplomacy alone. When this fails
it can proceed no further. It can not legitimately resort to force
without the direct authority of Congress, except in resisting and
repelling hostile attacks. It would have no authority to enter the
territories of Nicaragua even to prevent the destruction of the transit
and protect the lives and property of our own citizens on their passage.
It is true that on a sudden emergency of this character the President
would direct any armed force in the vicinity to march to their relief,
but in doing this he would act upon his own responsibility.

Under these circumstances I earnestly recommend to Congress the passage
of an act authorizing the president, under such restrictions as they may
deem proper, to employ the land and naval forces of the United States in
preventing the transit from being obstructed or closed by lawless
violence, and in protecting the lives and property of American citizens
traveling thereupon, requiring at the same time that these forces shall
be withdrawn the moment the danger shall have passed away. Without such
a provision our citizens will be constantly exposed to interruption in
their progress and to lawless violence.

A similar necessity exists for the passage of such an act for the
protection of the Panama and Tehuantepec routes. In reference to the
Panama route, the United States, by their existing treaty with New
Granada, expressly guarantee the neutrality of the Isthmus, "with the
view that the free transit from the one to the other sea may not be
interrupted or embarrassed in any future time while this treaty exists."

In regard to the Tehuantepec route, which has been recently opened under
the most favorable auspices, our treaty with Mexico of the 30th
December, 1853, secures to the citizens of the United States a right of
transit over it for their persons and merchandise and stipulates that
neither Government shall "interpose any obstacle" thereto. It also
concedes to the United States the "right to transport across the
Isthmus, in closed bags, the mails of the United States not intended for
distribution along the line of the communication; also the effects of
the United States Government and its citizens which may be intended for
transit and not for distribution on the Isthmus, free of custom-house or
other charges by the Mexican Government."

These treaty stipulations with New Granada and Mexico, in addition to
the considerations applicable to the Nicaragua route, seem to require
legislation for the purpose of carrying them into effect.

The injuries which have been inflicted upon our citizens in Costa Rica
and Nicaragua during the last two or three years have received the
prompt attention of this Government. Some of these injuries were of the
most aggravated character. The transaction at Virgin Bay in April, 1856,
when a company of unarmed Americans, who were in no way connected with
any belligerent conduct or party, were fired upon by the troops of Costa
Rica and numbers of them killed and wounded, was brought to the
knowledge of Congress by my predecessor soon after its occurrence, and
was also presented to the Government of Costa Rica for that immediate
investigation and redress which the nature of the case demanded. A
similar course was pursued with reference to other outrages in these
countries, some of which were hardly less aggravated in their character
than the transaction at Virgin Bay. At the time, however, when our
present minister to Nicaragua was appointed, in December, 1857, no
redress had been obtained for any of these wrongs and no reply even had
been received to the demands which had been made by this Government upon
that of Costa Rica more than a year before. Our minister was instructed,
therefore, to lose no time in expressing to those Governments the deep
regret with which the President had witnessed this inattention to the
just claims of the United States and in demanding their prompt and
satisfactory adjustment. Unless this demand shall be complied with at an
early day it will only remain for this Government to adopt such other
measures as may be necessary in order to obtain for itself that justice
which it has in vain attempted to secure by peaceful means from the
Governments of Nicaragua and Costa Rica. While it has shown, and will
continue to show, the most sincere regard for the rights and honor of
these Republics, it can not permit this regard to be met by an utter
neglect on their part of what is due to the Government and citizens of
the United States.

Against New Granada we have long-standing causes of complaint, arising
out of the unsatisfied claims of our citizens upon that Republic, and to
these have been more recently added the outrages committed upon our
citizens at Panama in April, 1856. A treaty for the adjustment of these
difficulties was concluded by the Secretary of State and the minister of
New Granada in September, 1857, which contained just and acceptable
provisions for that purpose. This treaty was transmitted to Bogota and
was ratified by the Government of New Granada, but with certain
amendments. It was not, however, returned to this city until after the
close of the last session of the Senate. It will be immediately
transmitted to that body for their advice and consent, and should this
be obtained it will remove all our existing causes of complaint against
New Granada on the subject of claims.

Questions have arisen between the two Governments as to the right of New
Granada to levy a tonnage duty upon the vessels of the United States in
its ports of the Isthmus and to levy a passenger tax upon our citizens
arriving in that country, whether with a design to remain there or to
pass from ocean to ocean by the transit route; and also a tax upon the
mail of the United States transported over the Panama Railroad. The
Government of New Granada has been informed that the United States would
consider the collection of either of these taxes as an act in violation
of the treaty between the two countries, and as such would be resisted
by the United States. At the same time, we are prepared to discuss these
questions in a spirit of amity and justice and with a sincere desire to
adjust them in a satisfactory manner. A negotiation for that purpose has
already been commenced. No effort has recently been made to collect
these taxes nor is any anticipated under present circumstances.

With the Empire of Brazil our relations are of the most friendly
character. The productions of the two countries, and especially those of
an agricultural nature, are such as to invite extensive mutual
exchanges. A large quantity of American flour is consumed in Brazil,
whilst more than treble the amount in value of Brazilian coffee is
consumed in the United States. Whilst this is the case, a heavy duty has
been levied until very recently upon the importation of American flour
into Brazil. I am gratified, however, to be able to inform you that in
September last this has been reduced from $1.32 to about 49 cents per
barrel, and the duties on other articles of our production have been
diminished in nearly the same proportion.

I regret to state that the Government of Brazil still continues to levy
an export duty of about 11 per cent on coffee, notwithstanding this
article is admitted free from duty in the United States. This is a heavy
charge upon the consumers of coffee in our country, as we purchase half
of the entire surplus crop of that article raised in Brazil. Our
minister, under instructions, will reiterate his efforts to have this
export duty removed, and it is hoped that the enlightened Government of
the Emperor will adopt this wise, just, and equal policy. In that event,
there is good reason to believe that the commerce between the two
countries will greatly increase, much to the advantage of both. The
claims of our citizens against the Government of Brazil are not in the
aggregate of very large amount; but some of these rest upon plain
principles of justice and their settlement ought not to be longer
delayed. A renewed and earnest, and I trust a successful, effort will be
made by our minister to procure their final adjustment.

On the 2d of June last Congress passed a joint resolution authorizing
the President "to adopt such measures and use such force as in his
judgment may be necessary and advisable" "for the purpose of the
differences between the United States and the Republic of Paraguay, in
connection with the attack on the United States steamer Water Witch and
with other measures referred to" in his annual message, and on the 12th
of July following they made an appropriation to defray the expenses and
compensation of a commissioner to that Republic should the President
deem it proper to make such all appointment.

In compliance with these enactments, I have appointed a commissioner,
who has proceeded to Paraguay with full powers and instructions to
settle these differences in an amicable and peaceful manner if this be
practicable. His experience and discretion justify the hope that he may
prove successful in convincing the Paraguayan Government that it is due
both to honor and justice that they should voluntarily and promptly make
atonement for the wrongs which they have committed against the United
States and indemnify our injured citizens whom they have forcibly
despoiled of their property.

Should our commissioner prove unsuccessful after a sincere and earnest
effort to accomplish the object of his mission, then no alternative will
remain but the employment of force to obtain "just satisfaction" from
Paraguay. In view of this contingency, the Secretary of the Navy, under
my direction, has fitted out and dispatched a naval force to rendezvous
near Buenos Ayres, which, it is believed, will prove sufficient for the
occasion. It is my earnest desire, however, that it may not be found
necessary to resort to this last alternative.

When Congress met in December last the business of the country had just
been crushed by one of those periodical revulsions which are the
inevitable consequence of our unsound and extravagant system of bank
credits and inflated currency. With all the elements of national wealth
in abundance, our manufactures were suspended, our useful public and
private enterprises were arrested, and thousands of laborers were
deprived of employment and reduced to want. Universal distress prevailed
among the commercial, manufacturing, and mechanical classes. This
revulsion was felt the more severely in the United States because
similar causes had produced the like deplorable effects throughout the
commercial nations of Europe. All were experiencing sad reverses at the
same moment. Our manufacturers everywhere suffered severely, not because
of the recent reduction in the tariff of duties on imports, but because
there was no demand at any price for their productions. The people were
obliged to restrict themselves in their purchases to articles of prime
necessity. In the general prostration of business the iron manufacturers
in different States probably suffered more than any other class, and
much destitution was the inevitable consequence among the great number
of workmen who had been employed in this useful branch of industry.
There could be no supply where there was no demand. To present an
example, there could be no demand for railroad iron after our
magnificent system of railroads, extending its benefits to every portion
of the Union, had been brought to a dead pause. The same consequences
have resulted from similar causes to many other branches of useful
manufactures. It is self-evident that where there is no ability to
purchase manufactured articles these can not be sold, and consequently
must cease to be produced.

No government, and especially a government of such limited powers as
that of the United States, could have prevented the late revulsion. The
whole commercial world seemed for years to have been rushing to this
catastrophe. The same ruinous consequences would have followed in the
United States whether the duties upon foreign imports had remained as
they were under the tariff of 1846 or had been raised to a much higher
standard. The tariff of 1857 had no agency in the result. The general
causes existing throughout the world could not have been controlled by
the legislation of any particular country.

The periodical revulsions which have existed in our past history must
continue to return at intervals so long as our present unbounded system
of bank credits shall prevail. They will, however, probably be the less
severe in future, because it is not to be expected, at least for many
years to come, that the commercial nations of Europe, with whose
interests our own are so materially involved, will expose themselves to
similar calamities. But this subject was treated so much at large in my
last annual message that I shall not now pursue it further. Still, I
respectfully renew the recommendation in favor of the passage of a
uniform bankrupt law applicable to banking institutions. This is all the
direct power over the subject which I believe the Federal Government
possesses. Such a law would mitigate, though it might not prevent, the
evil. The instinct of self-preservation might produce a wholesome
restraint upon their banking business if they knew in advance that a
suspension of specie payments would inevitably produce their civil
death.

But the effects of the revulsion are now slowly but surely passing away.
The energy and enterprise of our citizens, with our unbounded resources,
will within the period of another year restore a state of wholesome
industry and trade. Capital has again accumulated in our large cities.
The rate of interest is there very low. Confidence is gradually
reviving, and so soon as it is discovered that this capital can be
profitably employed in commercial and manufacturing enterprises and in
the construction of railroads and other works of public and private
improvement prosperity will again smile throughout the land. It is vain,
however, to disguise the fact from ourselves that a speculative
inflation of our currency without a corresponding inflation in other
countries whose manufactures come into competition with our own must
ever produce disastrous results to our domestic manufactures. No tariff
short of absolute prohibition can prevent these evil consequences. In
connection with this subject it is proper to refer to our financial
condition. The same causes which have produced pecuniary distress
throughout the country have so reduced the amount of imports from
foreign countries that the revenue has proved inadequate to meet the
necessary expenses of the Government. To supply the deficiency,
Congress, by the act of December 23, 1857, authorized the issue of
$20,000,000 of Treasury notes; and this proving inadequate, they
authorized, by the act of June 14, 1858, a loan of $20,000,000, to be
applied to the payment of appropriations made by law."

No statesman would advise that we should go on increasing the national
debt to meet the ordinary expenses of the Government. This would be a
most ruinous policy. In case of war our credit must be our chief
resource, at least for the first year, and this would be greatly
impaired by having contracted a large debt in time of peace. It is our
true policy to increase our revenue so as to equal our expenditures. It
would be ruinous to continue to borrow. Besides, it may be proper to
observe that the incidental protection thus afforded by a revenue tariff
would at the present moment to some extent increase the confidence of
the manufacturing interests and give a fresh impulse to our reviving
business. To this surely no person will object.

In regard to the mode of assessing and collecting duties under a
strictly revenue tariff, I have long entertained and often expressed the
opinion that sound policy requires this should be done by specific
duties in cases to which these can be properly applied. They are well
adapted to commodities which are usually sold by weight or by measure,
and which from their nature are of equal or of nearly equal value. Such,
for example, are the articles of iron of different classes, raw sugar,
and foreign wines and spirits.

In my deliberate judgment specific duties are the best, if not the only,
means of securing the revenue against false and fraudulent invoices, and
such has been the practice adopted for this purpose by other commercial
nations. Besides, specific duties would afford to the American
manufacturer the incidental advantages to which he is fairly entitled
under a revenue tariff. The present system is a sliding scale to his
disadvantage. Under it, when prices are high and business prosperous,
the duties rise in amount when he least requires their aid. On the
contrary, when prices fall and he is struggling against adversity, the
duties are diminished in the same proportion, greatly to his injury.
Neither would there be danger that a higher rate of duty than that
intended by Congress could be levied in the form of specific duties. It
would be easy to ascertain the average value of any imported article for
a series of years, and, instead of subjecting it to an ad valorem duty
at a certain rate per centum, to substitute in its place an equivalent
specific duty.

By such an arrangement the consumer would not be injured. It is true he
might have to pay a little more duty on a given article in one year,
but, if so, he would pay a little less in another, and in a series of
years these would counterbalance each other and amount to the same thing
so far as his interest is concerned. This inconvenience would be
trifling when contrasted with the additional security thus afforded
against frauds upon the revenue, in which every consumer is directly
interested.

I have thrown out these suggestions as the fruit of my own observation,
to which Congress, in their better judgment, will give such weight as
they may justly deserve.

The report of the Secretary of the Treasury will explain in detail the
operations of that Department of the Government. The receipts into the
Treasury from all sources during the fiscal year ending June 30, 1858,
including the Treasury notes authorized by the act of December 23, 1857,
were $70,273,869.59, which amount, with the balance of $17,710,114.27
remaining in the Treasury at the commencement of the year, made an
aggregate for the service of the year of $87,983,983.86.

The public expenditures during the fiscal year ending June 30, 1858,
amounted to $81,585,667.76, of which $9,684,537.99 were applied to the
payment of the public debt and the redemption of Treasury notes with the
interest thereon, leaving in the Treasury on July 1, 1858, being the
commencement of the present fiscal year, $6,398,316.10.

The receipts into the Treasury during the first quarter of the present
fiscal year, commencing the 1st of July, 1858, including one-half of the
loan of $20,000,000, with the premium upon it, authorized by the act of
June 14, 1858, were $25,230,879.46, and the estimated receipts for the
remaining three quarters to the 30th of June, 1859, from ordinary
sources are $38,500,000, making, with the balance before stated, an
aggregate of $70,129,195.56.

The expenditures during the first quarter of the present fiscal year
were $21,708,198.51, of which $1,010,142.37 were applied to the payment
of the public debt and the redemption of Treasury notes and the interest
thereon. The estimated expenditures during the remaining three quarters
to June 30, 1859, are $52,357,698.48, making an aggregate of
$74,065,896.99, being an excess of expenditure beyond the estimated
receipts into the Treasury from ordinary sources during the fiscal year
to the 30th of June, 1859, of $3,936,701.43. Extraordinary means are
placed by law within the command of the Secretary of the Treasury, by
the reissue of Treasury notes redeemed and by negotiating the balance of
the loan authorized by the act of June 14, 1858, to the extent of
$11,000,000, which, if realized during the present fiscal year, will
leave a balance in the Treasury on the 1st day of July, 1859, of
$7,063,298.57.

The estimated receipts during the next fiscal year, ending June 30,
1860, are $62,000,000, which, with the above-estimated balance of
$7,063,298.57 make an aggregate for the service of the next fiscal year
of $69,063,298.57. The estimated expenditures during the next fiscal
year, ending June 30, 1860, are $73,139,147.46, which leaves a deficit
of estimated means, compared with the estimated expenditures, for that
year, commencing on July 1, 1859, of $4,075,848.89.

In addition to this sum the Postmaster-General will require from the
Treasury for the service of the Post-Office Department $3,838,728, as
explained in the report of the Secretary of the Treasury, which will
increase the estimated deficit on June 30, 1860, to $7,914,576.89. To
provide for the payment of this estimated deficiency, which will be
increased by such appropriations as may be made by Congress not
estimated for in the report of the Treasury Department, as well as to
provide for the gradual redemption from year to year of the outstanding
Treasury notes, the Secretary of the Treasury recommends such a revision
of the present tariff as will raise the required amount. After what I
have already said I need scarcely add that I concur in the opinion
expressed in his report--that the public debt should not be increased by
an additional loan--and would therefore strongly urge upon Congress the
duty of making at their present session the necessary provision for
meeting these liabilities.

The public debt on July 1, 1858, the commencement of the present fiscal
year, was $25,155,977.66.

During the first quarter of the present year the sum of $10,000,000 has
been negotiated of the loan authorized by the act of June 14, 1858,
making the present outstanding public debt, exclusive of Treasury notes,
$35,155,977.66. There was on the 1st of July, 1858, of Treasury notes
issued by authority of the act of December 23, 1857, unredeemed, the sum
of $19,754,800, making the amount of actual indebtedness at that date
$54,910,777.66. To this will be added $10,000,000 during the present
fiscal year, this being the remaining half of the loan of $20,000,000
not yet negotiated.

The rapid increase of the public debt and the necessity which exists for
a modification of the tariff to meet even the ordinary expenses of the
Government ought to admonish us all, in our respective spheres of duty,
to the practice of rigid economy. The objects of expenditure should be
limited in number, as far as this may be practicable, and the
appropriations necessary to carry them into effect ought to be disbursed
under the strictest accountability. Enlightened economy does not consist
in the refusal to appropriate money for constitutional purposes
essential to the defense, progress, and prosperity of the Republic, but
in taking care that none of this money shall be wasted by mismanagement
in its application to the objects designated by law.

Comparisons between the annual expenditure at the present time and what
it was ten or twenty years ago are altogether fallacious. The rapid
increase of our country in extent and population renders a corresponding
increase of expenditure to some extent unavoidable. This is constantly
creating new objects of expenditure and augmenting the amount required
for the old. The true questions, then, are, Have these objects been
unnecessarily multiplied, or has the amount expended upon any or all of
them been larger than comports with due economy? In accordance with
these principles, the heads of the different Executive Departments of
the Government have been instructed to reduce their estimates for the
next fiscal year to the lowest standard consistent with the efficiency
of the service, and this duty they have performed in a spirit of just
economy. The estimates of the Treasury, War, Navy, and Interior
Departments have each been in some degree reduced, and unless a sudden
and unforeseen emergency should arise it is not anticipated that a
deficiency will exist in either within the present or the next fiscal
year. The Post-Office Department is placed in a peculiar position,
different from the other Departments, and to this I shall hereafter
refer.

I invite Congress to institute a rigid scrutiny to ascertain whether the
expenses in all the Departments can not be still further reduced, and I
promise them all the aid in my power in pursuing the investigation.

I transmit herewith the reports made to me by the Secretaries of War, of
the Navy, of the Interior, and of the Postmaster-General. They each
contain valuable information and important recommendations, to which I
invite the attention of Congress.

In my last annual message I took occasion to recommend the immediate
construction of ten small steamers of light draft, for the purpose of
increasing the efficiency of the Navy. Congress responded to the
recommendation by authorizing the construction of eight of them. The
progress which has been made in executing this authority is stated in
the report of the Secretary of the Navy. I concur with him in the
opinion that a greater number of this class of vessels is necessary for
the purpose of protecting in a more efficient manner the persons and
property of American citizens on the high seas and in foreign countries,
as well as in guarding more effectually our own coasts. I accordingly
recommend the passage of an act for this purpose.

The suggestions contained in the report of the Secretary of the
Interior, especially those in regard to the disposition of the public
domain, the pension and bounty-land system, the policy toward the
Indians, and the amendment of our patent laws, are worthy of the serious
consideration of Congress.

The Post-Office Department occupies a position very different from that
of the other Departments. For many years it was the policy of the
Government to render this a self-sustaining Department; and if this can
not now be accomplished, in the present condition of the country, we
ought to make as near an approach to it as may be practicable.

The Postmaster-General is placed in a most embarrassing position by the
existing laws. He is obliged to carry these into effect. He has no other
alternative. He finds, however, that this can not be done without heavy
demands upon the Treasury over and above what is received for postage,
and these have been progressively increasing from year to year until
they amounted for the last fiscal year, ending on the 30th of June,
1858, to more than $4,500,000, whilst it is estimated that for the
present fiscal year they will amount to $6,290,000. These sums are
exclusive of the annual appropriation of $700,000 for "compensation for
the mail service performed for the two Houses of Congress and the other
Departments and officers of the Government in the transmission of free
matter."

The cause of these large deficits is mainly attributable to the
increased expense of transporting the mails. In 1852 the sum paid for
this service was but a fraction above four millions and a quarter. Since
that year it has annually increased, until in 1858 it has reached more
than eight millions and a quarter, and for the service of 1859 it is
estimated that it will amount to more than $10,000,000.

The receipts of the Post-Office Department can be made to approach or to
equal its expenditure only by means of the legislation of Congress. In
applying any remedy care should be taken that the people shall not be
deprived of the advantages which they are fairly entitled to enjoy from
the Post-Office Department. The principal remedies recommended to the
consideration of Congress by the Postmaster-General are to restore the
former rate of postage upon single letters to 5 cents; to substitute for
the franking privilege the delivery to those now entitled to enjoy it of
post-office stamps for their correspondence, and to direct the
Department in making contracts for the transportation of the mail to
confine itself to the payment of the sum necessary for this single
purpose, without requiring it to be transported in post coaches or
carriages of any particular description. Under the present system the
expense to the Government is greatly increased by requiring that the
mail shall be carried in such vehicles as will accommodate passengers.
This will be done, without pay from the Department, over all roads where
the travel will remunerate the contractors.

These recommendations deserve the grave consideration of Congress. I
would again call your attention to the construction of a Pacific
railroad. Time and reflection have but served to confirm me in the truth
and justice of the observations which I made on this subject in my last
annual message, to which I beg leave respectfully to refer.

It is freely admitted that it would be inexpedient for this Government
to exercise the power of constructing the Pacific railroad by its own
immediate agents. Such a policy would increase the patronage of the
Executive to a dangerous extent, and introduce a system of jobbing and
corruption which no vigilance on the part of Federal officials could
either prevent or detect. This can only be done by the keen eye and
active and careful supervision of individual and private interest. The
construction of this road ought therefore to be committed to companies
incorporated by the States or other agencies whose pecuniary interests
would be directly involved. Congress might then assist them in the work
by grants of land or of money, or both, under such conditions and
restrictions as would secure the transportation of troops and munitions
of war free from any charge and that of the United States mail at a fair
and reasonable price.

The progress of events since the commencement of your last session has
shown how soon difficulties disappear before a firm and determined
resolution. At that time such a road was deemed by wise and patriotic
men to be a visionary project. The great distance to be overcome and the
intervening mountains and deserts in the way were obstacles which, in
the opinion of many, could not be surmounted. Now, after the lapse of
but a single year, these obstacles, it has been discovered, are far less
formidable than they were supposed to be, and mail stages with
passengers now pass and repass regularly twice in each week, by a common
wagon road, between San Francisco and St. Louis and Memphis in less than
twenty-five days. The service has been as regularly performed as it was
in former years between New York and this city.

Whilst disclaiming all authority to appropriate money for the
construction of this road, except that derived from the war-making power
of the Constitution, there are important collateral considerations
urging us to undertake the work as speedily as possible. The first and
most momentous of these is that such a road would be a powerful bond of
union between the States east and west of the Rocky Mountains. This is
so self-evident as to require no illustration.

But again, in a commercial point of view, I consider this the great
question of the day. With the eastern front of our Republic stretching
along the Atlantic and its western front along the Pacific, if all the
parts should be united by a safe, easy, and rapid intercommunication we
must necessarily command a very large proportion of the trade both of
Europe and Asia. Our recent treaties with China and Japan will open
these rich and populous Empires to our commerce; and the history of the
world proves that the nation which has gained possession of the trade
with eastern Asia has always become wealthy and powerful. The peculiar
geographical position of California and our Pacific possessions invites
American capital and enterprise into this fruitful field. To reap the
rich harvest, however, it is an indispensable prerequisite that we shall
first have a railroad to convey and circulate its products throughout
every portion of the Union. Besides, such a railroad through our
temperate latitude, which would not be impeded by the frosts and snows
of winter nor by the tropical heats of summer, would attract to itself
much of the travel and the trade of all nations passing between Europe
and Asia.

On the 21st of August last Lieutenant J. N. Maffit, of the United States
brig Dolphin, captured the slaver Echo (formerly the Putnam, of New
Orleans) near Kay Verde, on the coast of Cuba, with more than 300
African negroes on board. The prize, under the command of Lieutenant
Bradford, of the United States Navy, arrived at Charleston on the 27th
August, when the negroes, 306 in number, were delivered into the custody
of the United States marshal for the district of South Carolina. They
were first placed in Castle Pinckney, and afterwards in Fort Sumter, for
safe-keeping, and were detained there until the 19th September, when the
survivors, 271 in number, were delivered on board the United States
steamer Niagara to be transported to the coast of Africa under the
charge of the agent of the United States, pursuant to the provisions of
the act of the 3d March, 1819, "in addition to the acts prohibiting the
slave trade." Under the second section of this act the President is
"authorized to make such regulations and arrangements as he may deem
expedient for the safe-keeping, support, and removal beyond the limits
of the United States of all such negroes, mulattoes, or persons of
color" captured by vessels of the United States as may be delivered to
the marshal of the district into which they are brought, "and to appoint
a proper person or persons residing upon the coast of Africa as agent or
agents for receiving the negroes, mulattoes, or persons of color
delivered from on board vessels seized in the prosecution of the slave
trade by commanders of United States armed vessels."

A doubt immediately arose as to the true construction of this act. It is
quite clear from its terms that the President was authorized to provide
"for the safe-keeping, support, and removal" of these negroes up till
the time of their delivery to the agent on the coast of Africa, but no
express provision was made for their protection and support after they
had reached the place of their destination. Still, an agent was to be
pointed to receive them in Africa, and it could not have been supposed
that Congress intended he should desert them at the moment they were
received and turn them loose on that inhospitable coast to perish for
want of food or to become again the victims of the slave trade. Had this
been the intention of Congress, the employment of an agent to receive
them, who is required to reside on the coast, was unnecessary, and they
might have been landed by our vessels anywhere in Africa and left
exposed to the sufferings and the fate which would certainly await them.

Mr. Monroe, in his special message of December 17, 1819, at the first
session after the act was passed, announced to Congress what in his
opinion was its true construction. He believed it to be his duty under
it to follow these unfortunates into Africa and make provision for them
there until they should be able to provide for themselves. In
communicating this interpretation of the act to Congress he stated that
some doubt had been entertained as to its true intent and meaning, and
he submitted the question to them so that they might, "should it be
deemed advisable, amend the same before further proceedings are had
under it." Nothing was done by Congress to explain the act, and Mr.
Monroe proceeded to carry it into execution according to his own
interpretation. This, then, became the practical construction. When the
Africans from on board the Echo were delivered to the marshal at
Charleston, it became my duty to consider what disposition ought to be
made of them under the law. For many reasons it was expedient to remove
them from that locality as speedily as possible. Although the conduct of
the authorities and citizens of Charleston in giving countenance to the
execution of the law was just what might have been expected from their
high character, yet a prolonged continuance of 300 Africans in the
immediate vicinity of that city could not have failed to become a source
of inconvenience and anxiety to its inhabitants. Where to send them was
the question. There was no portion of the coast of Africa to which they
could be removed with any regard to humanity except to Liberia. Under
these circumstances an agreement was entered into with the Colonization
Society on the 7th of September last, a copy of which is herewith
transmitted, under which the society engaged, for the consideration of
$45,000, to receive these Africans in Liberia from the agent of the
United States and furnish them during the period of one year thereafter
with comfortable shelter, clothing, provisions, and medical attendance,
causing the children to receive schooling, and all, whether children or
adults, to be instructed in the arts of civilized life suitable to their
condition. This aggregate of $45,000 was based upon an allowance of $150
for each individual; and as there has been considerable mortality among
them and may be more before they reach Africa, the society have agreed,
in an equitable spirit, to make such a deduction from the amount as
under the circumstances may appear just and reasonable. This can not be
fixed until we shall ascertain the actual number which may become a
charge to the society. It was also distinctly agreed that under no
circumstances shall this Government be called upon for any additional
expenses. The agents of the society manifested a laudable desire to
conform to the wishes of the Government throughout the transaction. They
assured me that after a careful calculation they would be required to
expend the sum of $150 on each individual in complying with the
agreement, and they would have nothing left to remunerate them for their
care, trouble, and responsibility. At all events, I could make no better
arrangement, and there was no other alternative. During the period when
the Government itself, through its own agents, undertook the task of
providing for captured negroes in Africa the cost per head was very much
greater.

There having been no outstanding appropriation applicable to this
purpose, I could not advance any money on the agreement. I therefore
recommend that an appropriation may be made of the amount necessary to
carry it into effect.

Other captures of a similar character may, and probably will, be made by
our naval forces, and I earnestly recommend that Congress may amend the
second section of the act of March 3, 1819, so as to free its
construction from the ambiguity which has so long existed and render the
duty of the President plain in executing its provisions.

I recommend to your favorable regard the local interests of the District
of Columbia. As the residence of Congress and the Executive Departments
of the Government, we can not fail to feel a deep concern in its
welfare. This is heightened by the high character and the peaceful and
orderly conduct of its resident inhabitants.

I can not conclude without performing the agreeable duty of expressing
my gratification that Congress so kindly responded to the recommendation
of my last annual message by affording me sufficient time before the
close of their late session for the examination of all the bills
presented to me for approval. This change in the practice of Congress
has proved to be a wholesome reform. It exerted a beneficial influence
on the transaction of legislative business and elicited the general
approbation of the country. It enabled Congress to adjourn with that
dignity and deliberation so becoming to the representatives of this
great Republic, without having crowded into general appropriation bills
provisions foreign to their nature and of doubtful constitutionality and
expediency. Let me warmly and strongly commend this precedent
established by themselves as a guide to their proceedings during the
present session.

***

State of the Union Address
James Buchanan
December 19, 1859

Fellow-Citizens of the Senate and House of Representatives:

Our deep and heartfelt gratitude is due to that Almighty Power which has
bestowed upon us such varied and numerous blessings throughout the past
year. The general health of the country has been excellent, our harvests
have been unusually plentiful, and prosperity smiles throughout the
land. Indeed, notwithstanding our demerits, we have much reason to
believe from the past events in our history that we have enjoyed the
special protection of Divine Providence ever since our origin as a
nation. We have been exposed to many threatening and alarming
difficulties in our progress, but on each successive occasion the
impending cloud has been dissipated at the moment it appeared ready to
burst upon our head, and the danger to our institutions has passed away.
May we ever be under the divine guidance and protection. Whilst it is
the duty of the President "from time to time to give to Congress
information of the state of the Union," I shall not refer in detail to
the recent sad and bloody occurrences at Harpers Ferry. Still, it is
proper to observe that these events, however bad and cruel in
themselves, derive their chief importance from the apprehension that
they are but symptoms of an incurable disease in the public mind, which
may break out in still more dangerous outrages and terminate at last in
an open war by the North to abolish slavery in the South. Whilst for
myself I entertain no such apprehension, they ought to afford a solemn
warning to us all to beware of the approach of danger. Our Union is a
stake of such inestimable value as to demand our constant and watchful
vigilance for its preservation. In this view, let me implore my
countrymen, North and South, to cultivate the ancient feelings of mutual
forbearance and good will toward each other and strive to allay the
demon spirit of sectional hatred and strife now alive in the land. This
advice proceeds from the heart of an old public functionary whose
service commenced in the last generation, among the wise and
conservative statesmen of that day, now nearly all passed away, and
whose first and dearest earthly wish is to leave his country tranquil,
prosperous, united, and powerful.

We ought to reflect that in this age, and especially in this country,
there is an incessant flux and reflux of public opinion. Questions which
in their day assumed a most threatening aspect have now nearly gone from
the memory of men. They are "volcanoes burnt out, and on the lava and
ashes and squalid scoria of old eruptions grow the peaceful olive, the
cheering vine, and the sustaining corn." Such, in my opinion, will prove
to be the fate of the present sectional excitement should those who
wisely seek to apply the remedy continue always to confine their efforts
within the pale of the Constitution. If this course be pursued, the
existing agitation on the subject of domestic slavery, like everything
human, will have its day and give place to other and less threatening
controversies. Public opinion in this country is all-powerful, and when
it reaches a dangerous excess upon any question the good sense of the
people will furnish the corrective and bring it back within safe limits.
Still, to hasten this auspicious result at the present crisis we ought
to remember that every rational creature must be presumed to intend the
natural consequences of his own teachings. Those who announce abstract
doctrines subversive of the Constitution and the Union must not be
surprised should their heated partisans advance one step further and
attempt by violence to carry these doctrines into practical effect. In
this view of the subject, it ought never to be forgotten that however
great may have been the political advantages resulting from the Union to
every portion of our common country, these would all prove to be as
nothing should the time ever arrive when they can not be enjoyed without
serious danger to the personal safety of the people of fifteen members
of the Confederacy. If the peace of the domestic fireside throughout
these States should ever be invaded, if the mothers of families within
this extensive region should not be able to retire to rest at night
without suffering dreadful apprehensions of what may be their own fate
and that of their children before the morning, it would be vain to
recount to such a people the political benefits which result to them
from the Union. Self-preservation is the first instinct of nature, and
therefore any state of society in which the sword is all the time
suspended over the heads of the people must at last become intolerable.
But I indulge in no such gloomy forebodings. On the contrary, I firmly
believe that the events at Harpers Ferry, by causing the people to pause
and reflect upon the possible peril to their cherished institutions,
will be the means under Providence of allaying the existing excitement
and preventing further outbreaks of a similar character. They will
resolve that the Constitution and the Union shall not be endangered by
rash counsels, knowing that should "the silver cord be loosed or the
golden bowl be broken at the fountain" human power could never reunite
the scattered and hostile fragments.

I cordially congratulate you upon the final settlement by the Supreme
Court of the United States of the question of slavery in the
Territories, which had presented an aspect so truly formidable at the
commencement of my Administration. The right has been established of
every citizen to take his property of any kind, including slaves, into
the common Territories belonging equally to all the States of the
Confederacy, and to have it protected there under the Federal
Constitution. Neither Congress nor a Territorial legislature nor any
human power has any authority to annul or impair this vested right. The
supreme judicial tribunal of the country, which is a coordinate branch
of the Government, has sanctioned and affirmed these principles of
constitutional law, so manifestly just in themselves and so well
calculated to promote peace and harmony among the States. It is a
striking proof of the sense of justice which is inherent in our people
that the property in slaves has never been disturbed, to my knowledge,
in any of the Territories. Even throughout the late troubles in Kansas
there has not been any attempt, as I am credibly informed, to interfere
in a single instance with the right of the master. Had any such attempt
been made, the judiciary would doubtless have afforded an adequate
remedy. Should they fail to do this hereafter, it will then be time
enough to strengthen their hands by further legislation. Had it been
decided that either Congress or the Territorial legislature possess the
power to annul or impair the right to property in slaves, the evil would
be intolerable. In the latter event there would be a struggle for a
majority of the members of the legislature at each successive election,
and the sacred rights of property held under the Federal Constitution
would depend for the time being on the result. The agitation would thus
be rendered incessant whilst the Territorial condition remained, and its
baneful influence would keep alive a dangerous excitement among the
people of the several States.

Thus has the status of a Territory during the intermediate period from
its first settlement until it shall become a State been irrevocably
fixed by the final decision of the Supreme Court. Fortunate has this
been for the prosperity of the Territories, as well as the tranquillity
of the States. Now emigrants from the North and the South, the East and
the West, will meet in the Territories on a common platform, having
brought with them that species of property best adapted, in their own
opinion, to promote their welfare. From natural causes the slavery
question will in each case soon virtually settle itself, and before the
Territory is prepared for admission as a State into the Union this
decision, one way or the other, will have been a foregone conclusion.
Meanwhile the settlement of the new Territory will proceed without
serious interruption, and its progress and prosperity will not be
endangered or retarded by violent political struggles.

When in the progress of events the inhabitants of any Territory shall
have reached the number required to form a State, they will then proceed
in a regular manner and in the exercise of the rights of popular
sovereignty to form a constitution preparatory to admission into the
Union. After this has been done, to employ the language of the Kansas
and Nebraska act, they "shall be received into the Union with or without
slavery, as their constitution may prescribe at the time of their
admission." This sound principle has happily been recognized in some
form or other by an almost unanimous vote of both Houses of the last
Congress.

All lawful means at my command have been employed, and shall continue to
be employed, to execute the laws against the African slave trade. After
a most careful and rigorous examination of our coasts and a thorough
investigation of the subject, we have not been able to discover that any
slaves have been imported into the United States except the cargo by the
Wanderer, numbering between three and four hundred. Those engaged in
this unlawful enterprise have been rigorously prosecuted, but not with
as much success as their crimes have deserved. A number of them are
still under prosecution.

Our history proves that the fathers of the Republic, in advance of all
other nations, condemned the African slave trade. It was,
notwithstanding, deemed expedient by the framers of the Constitution to
deprive Congress of the power to prohibit "the migration or importation
of such persons as any of the States now existing shall think proper to
admit" "prior to the year 1808." It will be seen that this restriction
on the power of Congress was confined to such States only as might think
proper to admit the importation of slaves. It did not extend to other
States or to the trade carried on abroad. Accordingly, we find that so
early as the 22d March, 1794, Congress passed an act imposing severe
penalties and punishments upon citizens and residents of the United
States who should engage in this trade between foreign nations. The
provisions of this act were extended and enforced by the act of 10th
May, 1800.

Again, the States themselves had a clear right to waive the
constitutional privilege intended for their benefit, and to prohibit by
their own laws this trade at any time they thought proper previous to
1808. Several of them exercised this right before that period, and among
them some containing the greatest number of slaves. This gave to
Congress the immediate power to act in regard to all such States,
because they themselves had removed the constitutional barrier. Congress
accordingly passed an act on 28th February, 1803, "to prevent the
importation of certain persons into certain States where by the laws
thereof their admission is prohibited." In this manner the importation
of African slaves into the United States was to a great extent
prohibited some years in advance of 1808.

As the year 1808 approached Congress determined not to suffer this trade
to exist even for a single day after they had the power to abolish it.
On the 2d of March, 1807, they passed an act, to take effect "from and
after the 1st day of January, 1808," prohibiting the importation of
African slaves into the United States. This was followed by subsequent
acts of a similar character, to which I need not specially refer. Such
were the principles and such the practice of our ancestors more than
fifty years ago in regard to the African slave trade. It did not occur
to the revered patriots who had been delegates to the Convention, and
afterwards became members of Congress, that in passing these laws they
had violated the Constitution which they had framed with so much care
and deliberation. They supposed that to prohibit Congress in express
terms from exercising a specified power before an appointed day
necessarily involved the right to exercise this power after that day had
arrived.

If this were not the case, the framers of the Constitution had expended
much labor in vain. Had they imagined that Congress would possess no
power to prohibit the trade either before or after 1808, they would not
have taken so much care to protect the States against the exercise of
this power before that period. Nay, more, they would not have attached
such vast importance to this provision as to have excluded it from the
possibility of future repeal or amendment, to which other portions of
the Constitution were exposed. It would, then, have been wholly
unnecessary to ingraft on the fifth article of the Constitution,
prescribing the mode of its own future amendment, the proviso "that no
amendment which may be made prior to the year 1808 shall in any manner
affect" the provision in the Constitution securing to the States the
right to admit the importation of African slaves previous to that
period. According to the adverse construction, the clause itself, on
which so much care and discussion had been employed by the members of
the Convention, was an absolute nullity from the beginning, and all that
has since been done under it a mere usurpation.

It was well and wise to confer this power on Congress, because had it
been left to the States its efficient exercise would have been
impossible. In that event any one State could have effectually continued
the trade, not only for itself, but for all the other slave States,
though never so much against their will. And why? Because African
slaves, when once brought within the limits of any one State in
accordance with its laws, can not practically be excluded from any State
where slavery exists. And even if all the States had separately passed
laws prohibiting the importation of slaves, these laws would have failed
of effect for want of a naval force to capture the slavers and to guard
the coast. Such a force no State can employ in time of peace without the
consent of Congress.

These acts of Congress, it is believed, have, with very rare and
insignificant exceptions, accomplished their purpose. For a period of
more than half a century there has been no perceptible addition to the
number of our domestic slaves. During this period their advancement in
civilization has far surpassed that of any other portion of the African
race. The light and the blessings of Christianity have been extended to
them, and both their moral and physical condition has been greatly
improved.

Reopen the trade and it would be difficult to determine whether the
effect would be more deleterious on the interests of the master or on
those of the native-born slave. Of the evils to the master, the one most
to be dreaded would be the introduction of wild, heathen, and ignorant
barbarians among the sober, orderly, and quiet slaves whose ancestors
have been on the soil for several generations. This might tend to
barbarize, demoralize, and exasperate the whole mass and produce most
deplorable consequences.

The effect upon the existing slave would, if possible, be still more
deplorable. At present he is treated with kindness and humanity. He is
well fed, well clothed, and not overworked. His condition is
incomparably better than that of the coolies which modern nations of
high civilization have employed as a substitute for African slaves. Both
the philanthropy and the self-interest of the master have combined to
produce this humane result. But let this trade be reopened and what will
be the effect? The same to a considerable extent as on a neighboring
island, the only spot now on earth where the African slave trade is
openly tolerated, and this in defiance of solemn treaties with a power
abundantly able at any moment to enforce their execution. There the
master, intent upon present gain, extorts from the slave as much labor
as his physical powers are capable of enduring, knowing that when death
comes to his relief his place can be supplied at a price reduced to the
lowest point by the competition of rival African slave traders. Should
this ever be the case in our country, which I do not deem possible, the
present useful character of the domestic institution, wherein those too
old and too young to work are provided for with care and humanity and
those capable of labor are not overtasked, would undergo an unfortunate
change. The feeling of reciprocal dependence and attachment which now
exists between master and slave would be converted into mutual distrust
and hostility.

But we are obliged as a Christian and moral nation to consider what
would be the effect upon unhappy Africa itself if we should reopen the
slave trade. This would give the trade an impulse and extension which it
has never had, even in its palmiest days. The numerous victims required
to supply it would convert the whole slave coast into a perfect
pandemonium, for which this country would be held responsible in the
eyes both of God and man. Its petty tribes would then be constantly
engaged in predatory wars against each other for the purpose of seizing
slaves to supply the American market. All hopes of African civilization
would thus be ended.

On the other hand, when a market for African slaves shall no longer be
furnished in Cuba, and thus all the world be closed against this trade,
we may then indulge a reasonable hope for the gradual improvement of
Africa. The chief motive of war among the tribes will cease whenever
there is no longer any demand for slaves. The resources of that fertile
but miserable country might then be developed by the hand of industry
and afford subjects for legitimate foreign and domestic commerce. In
this manner Christianity and civilization may gradually penetrate the
existing gloom.

The wisdom of the course pursued by this Government toward China has
been vindicated by the event. Whilst we sustained a neutral position in
the war waged by Great Britain and France against the Chinese Empire,
our late minister, in obedience to his instructions, judiciously
cooperated with the ministers of these powers in all peaceful measures
to secure by treaty the just concessions demanded by the interests of
foreign commerce. The result is that satisfactory treaties have been
concluded with China by the respective ministers of the United States,
Great Britain, France, and Russia. Our "treaty, or general convention,
of peace, amity, and commerce" with that Empire was concluded at
Tien-tsin on the 18th June, 1858, and was ratified by the President, by
and with the advice and consent of the Senate, on the 21st December
following. On the 15th December, 1858, John E. Ward, a distinguished
citizen of Georgia, was duly commissioned as envoy extraordinary and
minister plenipotentiary to China.

He left the United States for the place of his destination on the 5th of
February, 1859, bearing with him the ratified copy of this treaty, and
arrived at Shanghai on the 28th May. From thence he proceeded to Peking
on the 16th June, but did not arrive in that city until the 27th July.
According to the terms of the treaty, the ratifications were to be
exchanged on or before the 18th June, 1859. This was rendered impossible
by reasons and events beyond his control, not necessary to detail; but
still it is due to the Chinese authorities at Shanghai to state that
they always assured him no advantage should be taken of the delay, and
this pledge has been faithfully redeemed.

On the arrival of Mr. Ward at Peking he requested an audience of the
Emperor to present his letter of credence. This he did not obtain, in
consequence of his very proper refusal to submit to the humiliating
ceremonies required by the etiquette of this strange people in
approaching their sovereign. Nevertheless, the interviews on this
question were conducted in the most friendly spirit and with all due
regard to his personal feelings and the honor of his country. When a
presentation to His Majesty was found to be impossible, the letter of
credence from the President was received with peculiar honors by
Kweiliang, "the Emperor's prime minister and the second man in the
Empire to the Emperor himself." The ratifications of the treaty were
afterwards, on the 16th of August, exchanged in proper form at
Peit-sang. As the exchange did not take place until after the day
prescribed by the treaty, it is deemed proper before its publication
again to submit it to the Senate. It is but simple justice to the
Chinese authorities to observe that throughout the whole transaction
they appear to have acted in good faith and in a friendly spirit toward
the United States. It is true this has been done after their own
peculiar fashion; but we ought to regard with a lenient eye the ancient
customs of an empire dating back for thousands of years, so far as this
may be consistent with our own national honor. The conduct of our
minister on the occasion has received my entire approbation.

In order to carry out the spirit of this treaty and to give it full
effect it became necessary to conclude two supplemental conventions, the
one for the adjustment and satisfaction of the claims of our citizens
and the other to fix the tariff on imports and exports and to regulate
the transit duties and trade of our merchants with China. This duty was
satisfactorily performed by our late minister. These conventions bear
date at Shanghai on the 8th November, 1858. Having been considered in
the light of binding agreements subsidiary to the principal treaty, and
to be carried into execution without delay, they do not provide for any
formal ratification or exchange of ratifications by the contracting
parties. This was not deemed necessary by the Chinese, who are already
proceeding in good faith to satisfy the claims of our citizens and, it
is hoped, to carry out the other provisions of the conventions. Still, I
thought it was proper to submit them to the Senate by which they were
ratified on the 3d of March, 1859. The ratified copies, however, did not
reach Shanghai until after the departure of our minister to Peking, and
these conventions could not, therefore, be exchanged at the same time
with the principal treaty. No doubt is entertained that they will be
ratified and exchanged by the Chinese Government should this be thought
advisable; but under the circumstances presented I shall consider them
binding engagements from their date on both parties, and cause them to
be published as such for the information and guidance of our merchants
trading with the Chinese Empire.

It affords me much satisfaction to inform you that all our difficulties
with the Republic of Paraguay have been satisfactorily adjusted. It
happily did not become necessary to employ the force for this purpose
which Congress had placed at my command under the joint resolution of 2d
June, 1858. On the contrary, the President of that Republic, in a
friendly spirit, acceded promptly to the just and reasonable demands of
the Government of the United States. Our commissioner arrived at
Assumption, the capital of the Republic, on the 25th of January, 1859,
and left it on the 17th of February, having in three weeks ably and
successfully accomplished all the objects of his mission. The treaties
which he has concluded will be immediately submitted to the Senate.

In the view that the employment of other than peaceful means might
become necessary to obtain "just satisfaction" from Paraguay, a strong
naval force was concentrated in the waters of the La Plata to await
contingencies whilst our commissioner ascended the rivers to Assumption.
The Navy Department is entitled to great credit for the promptness,
efficiency, and economy with which this expedition was fitted out and
conducted. It consisted of 19 armed vessels, great and small, carrying
200 guns and 2,500 men, all under the command of the veteran and gallant
Shubrick. The entire expenses of the expedition have been defrayed out
of the ordinary appropriations for the naval service, except the sum of
$289,000, applied to the purchase of seven of the steamers constituting
a part of it, under the authority of the naval appropriation act of the
3d March last. It is believed that these steamers are worth more than
their cost, and they are all now usefully and actively employed in the
naval service.

The appearance of so large a force, fitted out in such a prompt manner,
in the far-distant waters of the La Plata, and the admirable conduct of
the officers and men employed in it, have had a happy effect in favor of
our country throughout all that remote portion of the world. Our
relations with the great Empires of France and Russia, as well as with
all other governments on the continent of Europe, unless we may except
that of Spain, happily continue to be of the most friendly character. In
my last annual message I presented a statement of the unsatisfactory
condition of our relations with Spain, and I regret to say that this has
not materially improved.

Without special reference to other claims, even the "Cuban claims," the
payment of which has been ably urged by our ministers, and in which more
than a hundred of our citizens are directly interested, remain
unsatisfied, notwithstanding both their justice and their amount
($128,635.54) had been recognized and ascertained by the Spanish
Government itself.

I again recommend that an appropriation be made "to be paid to the
Spanish Government for the purpose of distribution among the claimants
in the Amistad case." In common with two of my predecessors, I entertain
no doubt that this is required by our treaty with Spain of the 27th
October, 1795. The failure to discharge this obligation has been
employed by the cabinet of Madrid as a reason against the settlement of
our claims.

I need not repeat the arguments which I urged in my last annual message
in favor of the acquisition of Cuba by fair purchase. My opinions on
that measure remain unchanged. I therefore again invite the serious
attention of Congress to this important subject. Without a recognition
of this policy on their part it will be almost impossible to institute
negotiations with any reasonable prospect of success. Until a recent
period there was good reason to believe that I should be able to
announce to you on the present occasion that our difficulties with Great
Britain arising out of the Clayton and Bulwer treaty had been finally
adjusted in a manner alike honorable and satisfactory to both parties.
From causes, however, which the British Government had not anticipated,
they have not yet completed treaty arrangements with the Republics of
Honduras and Nicaragua, in pursuance of the understanding between the
two Governments. It is, nevertheless, confidently expected that this
good work will ere long be accomplished.

Whilst indulging the hope that no other subject remained which could
disturb the good understanding between the two countries, the question
arising out of the adverse claims of the parties to the island of San
Juan, under the Oregon treaty of the 15th June, 1846, suddenly assumed a
threatening prominence. In order to prevent unfortunate collisions on
that remote frontier, the late Secretary of State, on the 17th July,
1855, addressed a note to Mr. Crampton, then British minister at
Washington, communicating to him a copy of the instructions which he
(Mr. Marcy) had given on the 14th July to Governor Stevens, of
Washington Territory, having a special reference to an "apprehended
conflict between our citizens and the British subjects on the island of
San Juan." To prevent this the governor was instructed "that the
officers of the Territory should abstain from all acts on the disputed
grounds which are calculated to provoke any conflicts, so far as it can
be done without implying the concession to the authorities of Great
Britain of an exclusive right over the premises. The title ought to be
settled before either party should attempt to exclude the other by force
or exercise complete and exclusive sovereign rights within the fairly
disputed limits." In acknowledging the receipt on the next day of Mr.
Marcy's note the British minister expressed his entire concurrence "in
the propriety of the course recommended to the governor of Washington
Territory by your [Mr. Marcy's] instructions to that officer," and
stating that he had "lost no time in transmitting a copy of that
document to the Governor-General of British North America" and had
"earnestly recommended to His Excellency to take such measures as to him
may appear best calculated to secure on the part of the British local
authorities and the inhabitants of the neighborhood of the line in
question the exercise of the same spirit of forbearance which is
inculcated by you [Mr. Marcy] on the authorities and citizens of the
United States."

Thus matters remained upon the faith of this arrangement until the 9th
July last, when General Harney paid a visit to the island. He found upon
it twenty-five American residents with their families, and also an
establishment of the Hudsons Bay Company for the purpose of raising
sheep. A short time before his arrival one of these residents had shot
an animal belonging to the company whilst trespassing upon his premises,
for which, however, he offered to pay twice its value, but that was
refused. Soon after "the chief factor of the company at Victoria, Mr.
Dalles, son-in-law of Governor Douglas, came to the island in the
British sloop of war Satellite and threatened to take this American [Mr.
Cutler] by force to Victoria to answer for the trespass he had
committed. The American seized his rifle and told Mr. Dalles if any such
attempt was made he would kill him upon the spot. The affair then
ended."

Under these circumstances the American settlers presented a petition to
the General "through the United States inspector of customs, Mr. Hubbs,
to place a force upon the island to protect them from the Indians as
well as the oppressive interference of the authorities of the Hudsons
Bay Company at Victoria with their rights as American citizens." The
General immediately responded to this petition, and ordered Captain
George E. Pickett, Ninth Infantry, "to establish his company on
Bellevue, or San Juan Island, on some suitable position near the harbor
at the southeastern extremity." This order was promptly obeyed and a
military post was established at the place designated. The force was
afterwards increased, so that by the last return the whole number of
troops then on the island amounted in the aggregate to 691 men.

Whilst I do not deem it proper on the present occasion to go further
into the subject and discuss the weight which ought to be attached to
the statements of the British colonial authorities contesting the
accuracy of the information on which the gallant General acted, it was
due to him that I should thus present his own reasons for issuing the
order to Captain Pickett. From these it is quite clear his object was to
prevent the British authorities on Vancouvers Island from exercising
jurisdiction over American residents on the island of San Juan, as well
as to protect them against the incursions of the Indians. Much
excitement prevailed for some time throughout that region, and serious
danger of collision between the parties was apprehended. The British had
a large naval force in the vicinity, and it is but an act of simple
justice to the admiral on that station to state that he wisely and
discreetly forbore to commit any hostile act, but determined to refer
the whole affair to his Government and await their instructions.

This aspect of the matter, in my opinion, demanded serious attention. It
would have been a great calamity for both nations had they been
precipitated into acts of hostility, not on the question of title to the
island, but merely concerning what should be its condition during the
intervening period whilst the two Governments might be employed in
settling the question to which of them it belongs. For this reason
Lieutenant-General Scott was dispatched, on the 17th of September last,
to Washington Territory to take immediate command of the United States
forces on the Pacific Coast, should he deem this necessary. The main
object of his mission was to carry out the spirit of the precautionary
arrangement between the late Secretary of State and the British
minister, and thus to preserve the peace and prevent collision between
the British and American authorities pending the negotiations between
the two Governments. Entertaining no doubt of the validity of our title,
I need scarcely add that in any event American citizens were to be
placed on a footing at least as favorable as that of British subjects,
it being understood that Captain Pickett's company should remain on the
island. It is proper to observe that, considering the distance from the
scene of action and in ignorance of what might have transpired on the
spot before the General's arrival, it was necessary to leave much to his
discretion; and I am happy to state the event has proven that this
discretion could not have been intrusted to more competent hands.
General Scott has recently returned from his mission, having
successfully accomplished its objects, and there is no longer any good
reason to apprehend a collision between the forces of the two countries
during the pendency of the existing negotiations. I regret to inform you
that there has been no improvement in the affairs of Mexico since my
last annual message, and I am again obliged to ask the earnest attention
of Congress to the unhappy condition of that Republic.

The constituent Congress of Mexico, which adjourned on the 17th
February, 1857, adopted a constitution and provided for a popular
election. This took place in the following July (1857), and General
Comonfort was chosen President almost without opposition. At the same
election a new Congress was chosen, whose first session commenced on the
16th of September (1857). By the constitution of 1857 the Presidential
term was to begin on the 1st of December (1857) and continue for four
years. On that day General Comonfort appeared before the assembled
Congress in the City of Mexico, took the oath to support the new
constitution, and was duly inaugurated as President. Within a month
afterwards he had been driven from the capital and a military rebellion
had assigned the supreme power of the Republic to General Zuloaga. The
constitution provided that in the absence of the President his office
should devolve upon the chief justice of the supreme court; and General
Comonfort having left the country, this functionary, General Juarez,
proceeded to form at Guanajuato a constitutional Government. Before this
was officially known, however, at the capital the Government of Zuloaga
had been recognized by the entire diplomatic corps, including the
minister of the United States, as the de facto Government of Mexico. The
constitutional President, nevertheless, maintained his position with
firmness, and was soon established, with his cabinet, at Vera Cruz.
Meanwhile the Government of Zuloaga was earnestly resisted in many parts
of the Republic, and even in the capital, a portion of the army having
pronounced against it, its functions were declared terminated, and an
assembly of citizens was invited for the choice of a new President. This
assembly elected General Miramort, but that officer repudiated the plan
under which he was chosen, and Zuloaga was thus restored to his previous
position. He assumed it, however, only to withdraw from it; and Miramon,
having become by his appointment "President substitute," continues with
that title at the head of the insurgent party.

In my last annual message I communicated to Congress the circumstances
under which the late minister of the United States suspended his
official relations with the central Government and withdrew from the
country. It was impossible to maintain friendly intercourse with a
government like that at the capital, under whose usurped authority
wrongs were constantly committed, but never redressed. Had this been an
established government, with its power extending by the consent of the
people over the whole of Mexico, a resort to hostilities against it
would have been quite justifiable, and, indeed, necessary. But the
country was a prey to civil war, and it was hoped that the success of
the constitutional President might lead to a condition of things less
injurious to the United States. This success became so probable that in
January last I employed a reliable agent to visit Mexico and report to
me the actual condition and prospects of the contending parties. In
consequence of his report and from information which reached me from
other sources favorable to the prospects of the constitutional cause, I
felt justified in appointing a new minister to Mexico, who might embrace
the earliest suitable opportunity of restoring our diplomatic relations
with that Republic. For this purpose a distinguished citizen of Maryland
was selected, who proceeded on his mission on the 8th of March last,
with discretionary authority to recognize the Government of President
Juarez if on his arrival in Mexico he should find it entitled to such
recognition according to the established practice of the United States.

On the 7th of April following Mr. McLane presented his credentials to
President Juarez, having no hesitation "in pronouncing the Government of
Juarez to be the only existing government of the Republic." He was
cordially received by the authorities at Vera Cruz, and they have ever
since manifested the most friendly disposition toward the United States.

Unhappily, however, the constitutional Government has not been able to
establish its power over the whole Republic. It is supported by a large
majority of the people and the States, but there are important parts of
the country where it can enforce no obedience.

General Miramon maintains himself at the capital, and in some of the
distant Provinces there are military governors who pay little respect to
the decrees of either Government. In the meantime the excesses which
always attend upon civil war, especially in Mexico, are constantly
recurring. Outrages of the worst description are committed both upon
persons and property. There is scarcely any form of injury which has not
been suffered by our citizens in Mexico during the last few years. We
have been nominally at peace with that Republic, but "so far as the
interests of our commerce, or of our citizens who have visited the
country as merchants, shipmasters, or in other capacities, are
concerned, we might as well have been at war." Life has been insecure,
property unprotected, and trade impossible except at a risk of loss
which prudent men can not be expected to incur. Important contracts,
involving large expenditures, entered into by the central Government,
have been set at defiance by the local governments. Peaceful American
residents, occupying their rightful possessions, have been suddenly
expelled the country, in defiance of treaties and by the mere force of
arbitrary power. Even the course of justice has not been safe from
control, and a recent decree of Miramort permits the intervention of
Government in all suits where either party is a foreigner. Vessels of
the United States have been seized without law, and a consular officer
who protested against such seizure has been fined and imprisoned for
disrespect to the authorities. Military contributions have been levied
in violation of every principle of right, and the American who resisted
the lawless demand has had his property forcibly taken away and has been
himself banished. From a conflict of authority in different parts of the
country tariff duties which have been paid in one place have been
exacted over again in another place. Large numbers of our citizens have
been arrested and imprisoned without any form of examination or any
opportunity for a hearing, and even when released have only obtained
their liberty after much suffering and injury, and without any hope of
redress. The wholesale massacre of Crabbe and his associates without
trial in Sonora, as well as the seizure and murder of four sick
Americans who had taken shelter in the house of an American upon the
soil of the United States, was communicated to Congress at its last
session. Murders of a still more atrocious character have been committed
in the very heart of Mexico, under the authority of Miramon's
Government, during the present year. Some of these were only worthy of a
barbarous age, and if they had not been dearly proven would have seemed
impossible in a country which claims to be civilized. Of this
description was the brutal massacre in April last, by order of General
Marquez, of three American physicians who were seized in the hospital at
Tacubaya while attending upon the sick and the dying of both parties,
and without trial, as without crime, were hurried away to speedy
execution. Little less shocking was the recent fate of Ormond Chase, who
was shot in Tepic on the 7th of August by order of the same Mexican
general, not only without a trial, but without any conjecture by his
friends of the cause of his arrest. He is represented as a young man of
good character and intelligence, who had made numerous friends in Tepic
by the courage and humanity which he had displayed on several trying
occasions; and his death was as unexpected as it was shocking to the
whole community. Other outrages might be enumerated, but these are
sufficient to illustrate the wretched state of the country and the
unprotected condition of the persons and property of our citizens in
Mexico.

In all these cases our ministers have been constant and faithful in
their demands for redress, but both they and this Government, which they
have successively represented, have been wholly powerless to make their
demands effective. Their testimony in this respect and in reference to
the only remedy which in their judgments would meet the exigency has
been both uniform and emphatic. "Nothing but a manifestation of the
power of the Government of the United States," wrote our late minister
in 1856, "and of its purpose to punish these wrongs will avail. I assure
you that the universal belief here is that there is nothing to be
apprehended from the Government of the United States, and that local
Mexican officials can commit these outrages upon American citizens with
absolute impunity." "I hope the President," wrote our present minister
in August last, "will feel authorized to ask from Congress the power to
enter Mexico with the military forces of the United States at the call
of the constitutional authorities, in order to protect the citizens and
the treaty rights of the United States. Unless such a power is conferred
upon him, neither the one nor the other will be respected in the
existing state of anarchy and disorder, and the outrages already
perpetrated will never be chastised; and, as I assured you in my No. 23,
all these evils must increase until every vestige of order and
government disappears from the country." I have been reluctantly led to
the same opinion, and in justice to my countrymen who have suffered
wrongs from Mexico and who may still suffer them I feel bound to
announce this conclusion to Congress.

The case presented, however, is not merely a case of individual claims,
although our just claims against Mexico have reached a very large
amount; nor is it merely the case of protection to the lives and
property of the few Americans who may still remain in Mexico, although
the life and property of every American citizen ought to be sacredly
protected in every quarter of the world; but it is a question which
relates to the future as well as to the present and the past, and which
involves, indirectly at least, the whole subject of our duty to Mexico
as a neighboring State. The exercise of the power of the United States
in that country to redress the wrongs and protect the rights of our own
citizens is none the less to be desired because efficient and necessary
aid may thus be rendered at the same time to restore peace and order to
Mexico itself. In the accomplishment of this result the people of the
United States must necessarily feel a deep and earnest interest. Mexico
ought to be a rich and prosperous and powerful Republic. She possesses
an extensive territory, a fertile soil, and an incalculable store of
mineral wealth. She occupies an important position between the Gulf and
the ocean for transit routes and for commerce. Is it possible that such
a country as this can be given up to anarchy and ruin without an effort
from any quarter for its rescue and its safety? Will the commercial
nations of the world, which have so many interests connected with it,
remain wholly indifferent to such a result? Can the United States
especially, which ought to share most largely in its commercial
intercourse, allow their immediate neighbor thus to destroy itself and
injure them? Yet without support from some quarter it is impossible to
perceive how Mexico can resume her position among nations and enter upon
a career which promises any good results. The aid which she requires,
and which the interests of all commercial countries require that she
should have, it belongs to this Government to render, not only by virtue
of our neighborhood to Mexico, along whose territory we have a
continuous frontier of nearly a thousand miles, but by virtue also of
our established policy, which is inconsistent with the intervention of
any European power in the domestic concerns of that Republic.

The wrongs which we have suffered from Mexico are before the world and
must deeply impress every American citizen. A government which is either
unable or unwilling to redress such wrongs is derelict to its highest
duties. The difficulty consists in selecting and enforcing the remedy.
We may in vain apply to the constitutional Government at Vera Cruz,
although it is well disposed to do us justice, for adequate redress.
Whilst its authority is acknowledged in all the important ports and
throughout the seacoasts of the Republic, its power does not extend to
the City of Mexico and the States in its vicinity, where nearly all the
recent outrages have been committed on American citizens. We must
penetrate into the interior before we can reach the offenders, and this
can only be done by passing through the territory in the occupation of
the constitutional Government. The most acceptable and least difficult
mode of accomplishing the object will be to act in concert with that
Government. Their consent and their aid might, I believe, be obtained;
but if not, our obligation to protect our own citizens in their just
rights secured by treaty would not be the less imperative. For these
reasons I recommend to Congress to pass a law authorizing the President
under such conditions as they may deem expedient, to employ a sufficient
military force to enter Mexico for the purpose of obtaining indemnity
for the past and security for the future. I purposely refrain from any
suggestion as to whether this force shall consist of regular troops or
volunteers, or both. This question may be most appropriately left to the
decision of Congress. I would merely observe that should volunteers be
selected such a force could be easily raised in this country among those
who sympathize with the sufferings of our unfortunate fellow-citizens in
Mexico and with the unhappy condition of that Republic. Such an
accession to the forces of the constitutional Government would enable it
soon to reach the City of Mexico and extend its power over the whole
Republic. In that event there is no reason to doubt that the just claims
of our citizens would be satisfied and adequate redress obtained for the
injuries inflicted upon them. The constitutional Government have ever
evinced a strong desire to do justice, and this might be secured in
advance by a preliminary treaty.

It may be said that these measures will, at least indirectly, be
inconsistent with our wise and settled policy not to interfere in the
domestic concerns of foreign nations. But does not the present case
fairly constitute an exception? An adjoining Republic is in a state of
anarchy and confusion from which she has proved wholly unable to
extricate herself. She is entirely destitute of the power to maintain
peace upon her borders or to prevent the incursions of banditti into our
territory. In her fate and in her fortune, in her power to establish and
maintain a settled government, we have a far deeper interest, socially,
commercially, and politically, than any other nation. She is now a wreck
upon the ocean, drifting about as she is impelled by different factions.
As a good neighbor, shall we not extend to her a helping hand to save
her? If we do not, it would not be surprising should some other nation
undertake the task, and thus force us to interfere at last, under
circumstances of increased difficulty, for the maintenance of our
established policy.

I repeat the recommendation contained in my last annual message that
authority may be given to the President to establish one or more
temporary military posts across the Mexican line in Sonora and
Chihuahua, where these may be necessary to protect the lives and
property of American and Mexican citizens against the incursions and
depredations of the Indians, as well as of lawless rovers, on that
remote region. The establishment of one such post at a point called
Arispe, in Sonora, in a country now almost depopulated by the hostile
inroads of the Indians from our side of the line, would, it is believed,
have prevented much injury and many cruelties during the past season. A
state of lawlessness and violence prevails on that distant frontier.
Life and property are there wholly insecure. The population of Arizona,
now numbering more than 10,000 souls, are practically destitute of
government, of laws, or of any regular administration of justice.
Murder, rapine, and other crimes are committed with impunity. I
therefore again call the attention of Congress to the necessity for
establishing a Territorial government over Arizona.

The treaty with Nicaragua of the 16th of February, 1857, to which I
referred in my last annual message, failed to receive the ratification
of the Government of that Republic, for reasons which I need not
enumerate. A similar treaty has been since concluded between the
parties, bearing date on the 16th March, 1859, which has already been
ratified by the Nicaraguan Congress. This will be immediately submitted
to the Senate for their ratification. Its provisions can not, I think,
fail to be acceptable to the people of both countries.

Our claims against the Governments of Costa Rica and Nicaragua remain
unredressed, though they are pressed in an earnest manner and not
without hope of success.

I deem it to be my duty once more earnestly to recommend to Congress the
passage of a law authorizing the President to employ the naval force at
his command for the purpose of protecting the lives and property of
American citizens passing in transit across the Panama, Nicaragua, and
Tehuantepec routes against sudden and lawless outbreaks and
depredations. I shall not repeat the arguments employed in former
messages in support of this measure. Suffice it to say that the lives of
many of our people and the security of vast amounts of treasure passing
and repassing over one or more of these routes between the Atlantic and
Pacific may be deeply involved in the action of Congress on this
subject.

I would also again recommend to Congress that authority be given to the
President to employ the naval force to protect American merchant
vessels, their crews and cargoes, against violent and lawless seizure
and confiscation in the ports of Mexico and the Spanish American States
when these countries may be in a disturbed and revolutionary condition.
The mere knowledge that such an authority had been conferred, as I have
already stated, would of itself in a great degree prevent the evil.
Neither would this require any additional appropriation for the naval
service.

The chief objection urged against the grant of this authority is that
Congress by conferring it would violate the Constitution; that it would
be a transfer of the war-making, or, strictly speaking, the
war-declaring, power to the Executive. If this were well rounded, it
would, of course, be conclusive. A very brief examination, however, will
place this objection at rest.

Congress possess the sole and exclusive power under the Constitution "to
declare war." They alone can "raise and support armies" and "provide and
maintain a navy." But after Congress shall have declared war and
provided the force necessary to carry it on the President, as Commander
in Chief of the Army and Navy, can alone employ this force in making war
against the enemy. This is the plain language, and history proves that
it was the well-known intention of the framers, of the Constitution.

It will not be denied that the general "power to declare war" is without
limitation and embraces within itself not only what writers on the law
of nations term a public or perfect war, but also an imperfect war, and,
in short, every species of hostility, however confined or limited.
Without the authority of Congress the President can not fire a hostile
gun in any case except to repel the attacks of an enemy. It will not be
doubted that under this power Congress could, if they thought proper,
authorize the President to employ the force at his command to seize a
vessel belonging to an American citizen which had been illegally and
unjustly captured in a foreign port and restore it to its owner. But can
Congress only act after the fact, after the mischief has been done? Have
they no power to confer upon the President the authority in advance to
furnish instant redress should such a case afterwards occur? Must they
wait until the mischief has been done, and can they apply the remedy
only when it is too late? To confer this authority to meet future cases
under circumstances strictly specified is as clearly within the
war-declaring power as such an authority conferred upon the President by
act of Congress after the deed had been done. In the progress of a great
nation many exigencies must arise imperatively requiring that Congress
should authorize the President to act promptly on certain conditions
which may or may not afterwards arise. Our history has already presented
a number of such cases. I shall refer only to the latest. Under the
resolution of June 2, 1858, "for the adjustment of difficulties with the
Republic of Paraguay," the President is "authorized to adopt such
measures and use such force as in his judgment may be necessary and
advisable in the event of a refusal of just satisfaction by the
Government of Paraguay." "Just satisfaction" for what? For "the attack
on the United States steamer Water Witch" and "other matters referred to
in the annual message of the President." Here the power is expressly
granted upon the condition that the Government of Paraguay shall refuse
to render this "just satisfaction." In this and other similar cases
Congress have conferred upon the President power in advance to employ
the Army and Navy upon the happening of contingent future events; and
this most certainly is embraced within the power to declare war.

Now, if this conditional and contingent power could be constitutionally
conferred upon the President in the case of Paraguay, why may it not be
conferred for the purpose of protecting the lives and property of
American citizens in the event that they may be violently and unlawfully
attacked in passing over the transit routes to and from California or
assailed by the seizure of their vessels in a foreign port? To deny this
power is to render the Navy in a great degree useless for the protection
of the lives and property of American citizens in countries where
neither protection nor redress can be otherwise obtained.

The Thirty-fifth Congress terminated on the 3d of March, 1859, without
having passed the "act making appropriations for the service of the
Post-Office Department during the fiscal year ending the 30th of June,
1860," This act also contained an appropriation "to supply deficiencies
in the revenue of the Post-Office Department for the year ending 30th
June, 1859." I believe this is the first instance since the origin of
the Federal Government, now more than seventy years ago, when any
Congress went out of existence without having passed all the general
appropriation bills necessary to carry on the Government until the
regular period for the meeting of a new Congress. This event imposed on
the Executive a grave responsibility. It presented a choice of evils.

Had this omission of duty occurred at the first session of the last
Congress, the remedy would have been plain. I might then have instantly
recalled them to complete their work, and this without expense to the
Government. But on the 4th of March last there were fifteen of the
thirty-three States which had not elected any Representatives to the
present Congress. Had Congress been called together immediately, these
States would have been virtually disfranchised. If an intermediate
period had been selected, several of the States would have been
compelled to hold extra sessions of their legislatures, at great
inconvenience and expense, to provide for elections at an earlier day
than that previously fixed by law. In the regular course ten of these
States would not elect until after the beginning of August, and five of
these ten not until October and November.

On the other hand, when I came to examine carefully the condition of the
Post-Office Department, I did not meet as many or as great difficulties
as I had apprehended. Had the bill which failed been confined to
appropriations for the fiscal year ending on the 30th June next, there
would have been no reason of pressing importance for the call of an
extra session. Nothing would become due on contracts (those with
railroad companies only excepted) for carrying the mail for the first
quarter of the present fiscal year, commencing on the 1st of July, until
the 1st of December--less than one week before the meeting of the
present Congress. The reason is that the mail contractors for this and
the current year did not complete their first quarter's service until
the 30th September last, and by the terms of their contracts sixty days
more are allowed for the settlement of their accounts before the
Department could be called upon for payment.

The great difficulty and the great hardship consisted in the failure to
provide for the payment of the deficiency in the fiscal year ending the
30th June, 1859. The Department had entered into contracts, in obedience
to existing laws, for the service of that fiscal year, and the
contractors were fairly entitled to their compensation as it became due.
The deficiency as stated in the bill amounted to $3,838,728, but after a
careful settlement of all these accounts it has been ascertained that it
amounts to $4,296,009. With the scanty means at his command the
Postmaster-General has managed to pay that portion of this deficiency
which occurred in the first two quarters of the past fiscal year, ending
on the 31st December last. In the meantime the contractors themselves,
under these trying circumstances, have behaved in a manner worthy of all
commendation. They had one resource in the midst of their
embarrassments. After the amount due to each of them had been
ascertained and finally settled according to law, this became a specific
debt of record against the United States, which enabled them to borrow
money on this unquestionable security. Still, they were obliged to pay
interest in consequence of the default of Congress, and on every
principle of justice ought to receive interest from the Government. This
interest should commence from the date when a warrant would have issued
for the payment of the principal had an appropriation been made for this
purpose. Calculated up to the 1st December, it will not exceed
$96,660--a sum not to be taken into account when contrasted with the
great difficulties and embarrassments of a public and private character,
both to the people and the States, which would have resulted from
convening and holding a special session of Congress. For these reasons I
recommend the passage of a bill at as early a day as may be practicable
to provide for the payment of the amount, with interest, due to these
last-mentioned contractors, as well as to make the necessary
appropriations for the service of the Post-Office Department for the
current fiscal year.

The failure to pass the Post-Office bill necessarily gives birth to
serious reflections. Congress, by refusing to pass the general
appropriation bills necessary to carry on the Government, may not only
arrest its action, but might even destroy its existence. The Army, the
Navy, the judiciary, in short, every department of the Government, can
no longer perform their functions if Congress refuse the money necessary
for their support. If this failure should teach the country the
necessity of electing a full Congress in sufficient time to enable the
President to convene them in any emergency, even immediately after the
old Congress has expired, it will have been productive of great good. In
a time of sudden and alarming danger, foreign or domestic, which all
nations must expect to encounter in their progress, the very salvation
of our institutions may be staked upon the assembling of Congress
without delay. If under such circumstances the President should find
himself in the condition in which he was placed at the close of the last
Congress, with nearly half the States of the Union destitute of
representatives, the consequences might he disastrous. I therefore
recommend to Congress to carry into effect the provisions of the
Constitution on this subject, and to pass a law appointing some day
previous to the 4th March in each year of odd number for the election of
Representatives throughout all the States. They have already appointed a
day for the election of electors for President and Vice-President, and
this measure has been approved by the country.

I would again express a most decided opinion in favor of the
construction of a Pacific railroad, for the reasons stated in my two
last annual messages. When I reflect upon what would be the defenseless
condition of our States and Territories west of the Rocky Mountains in
case of a war with a naval power sufficiently strong to interrupt all
intercourse with them by the routes across the Isthmus, I am still more
convinced than ever of the vast importance of this railroad. I have
never doubted the constitutional competency of Congress to provide for
its construction, but this exclusively under the war-making power.
Besides, the Constitution expressly requires as an imperative duty that
"the United States shall protect each of them [the States] against
invasion." I am at a loss to conceive how this protection can be
afforded to California and Oregon against such a naval power by any
other means. I repeat the opinion contained in my last annual message
that it would be inexpedient for the Government to undertake this great
work by agents of its own appointment and under its direct and exclusive
control. This would increase the patronage of the Executive to a
dangerous extent and would foster a system of jobbing and corruption
which no vigilance on the part of Federal officials could prevent. The
construction of this road ought, therefore, to be intrusted to
incorporated companies or other agencies who would exercise that active
and vigilant supervision over it which can be inspired alone by a sense
of corporate and individual interest. I venture to assert that the
additional cost of transporting troops, munitions of war, and necessary
supplies for the Army across the vast intervening plains to our
possessions on the Pacific Coast would be greater in such a war than the
whole amount required to construct the road. And yet this resort would
after all be inadequate for their defense and protection.

We have yet scarcely recovered from the habits of extravagant
expenditure produced by our overflowing Treasury during several years
prior to the commencement of my Administration. The financial reverses
which we have since experienced ought to teach us all to scrutinize our
expenditures with the greatest vigilance and to reduce them to the
lowest possible point. The Executive Departments of the Government have
devoted themselves to the accomplishment of this object with
considerable success, as will appear from their different reports and
estimates. To these I invite the scrutiny of Congress, for the purpose
of reducing them still lower, if this be practicable consistent with the
great public interests of the country. In aid of the policy of
retrenchment, I pledge myself to examine closely the bills appropriating
lands or money, so that if any of these should inadvertently pass both
Houses, as must sometimes be the case, I may afford them an opportunity
for reconsideration. At the same time, we ought never to forget that
true public economy consists not in withholding the means necessary to
accomplish important national objects confided to us by the
Constitution, but in taking care that the money appropriated for these
purposes shall be faithfully and frugally expended.

It will appear from the report of the Secretary of the Treasury that it
is extremely doubtful, to say the least, whether we shall be able to
pass through the present and the next fiscal year without providing
additional revenue. This can only be accomplished by strictly confining
the appropriations within the estimates of the different Departments,
without making an allowance for any additional expenditures which
Congress may think proper, in their discretion, to authorize, and
without providing for the redemption of any portion of the $20,000,000
of Treasury notes which have been already issued. In the event of a
deficiency, which I consider probable, this ought never to be supplied
by a resort to additional loans. It would be a ruinous practice in the
days of peace and prosperity to go on increasing the national debt to
meet the ordinary expenses of the Government. This policy would cripple
our resources and impair our credit in case the existence of war should
render it necessary to borrow money. Should such a deficiency occur as I
apprehend, I would recommend that the necessary revenue be raised by an
increase of our present duties on imports. I need not repeat the
opinions expressed in my last annual message as to the best mode and
manner of accomplishing this object, and shall now merely observe that
these have since undergone no change. The report of the Secretary of the
Treasury will explain in detail the operations of that Department of the
Government. The receipts into the Treasury from all sources during the
fiscal year ending June 30, 1859, including the loan authorized by the
act of June 14, 1858, and the issues of Treasury notes authorized by
existing laws, were $81,692,471.01, which sum, with the balance of
$6,398,316.10 remaining in the Treasury at the commencement of that
fiscal year, made an aggregate for the service of the year of
$88,090,787.11.

The public expenditures during the fiscal year ending June 30, 1859,
amounted to $83,751,511.57. Of this sum $17,405,285.44 were applied to
the payment of interest on the public debt and the redemption of the
issues of Treasury notes. The expenditures for all other branches of the
public service during that fiscal year were therefore $66,346,226.13.
The balance remaining in the Treasury on the 1st July, 1859, being the
commencement of the present fiscal year, was $4,339,275.54. The receipts
into the Treasury during the first quarter of the present fiscal year,
commencing July 1, 1859, were $20,618,865.85. Of this amount $3,821,300
was received on account of the loan and the issue of Treasury notes, the
amount of $16,797,565.85 having been received during the quarter from
the ordinary sources of public revenue. The estimated receipts for the
remaining three quarters of the present fiscal year, to June 30, 1860,
are $50,426,400. Of this amount it is estimated that $5,756,400 will be
received for Treasury notes which may be reissued under the fifth
section of the act of 3d March last, and $1,170,000 on account of the
loan authorized by the act of June 14, 1858, making $6,926,400 from
these extraordinary sources, and $43,500,000 from the ordinary sources
of the public revenue, making an aggregate, with the balance in the
Treasury on the 1st July, 1859, of $75,384,541.89 for the estimated
means of the present fiscal year, ending June 30, 1860.

The expenditures during the first quarter of the present fiscal year
were $20,007,174.76. Four million six hundred and sixty-four thousand
three hundred and sixty-six dollars and seventy-six cents of this sum
were applied to the payment of interest on the public debt and the
redemption of the issues of Treasury notes, and the remainder, being
$15,342,808, were applied to ordinary expenditures during the quarter.
The estimated expenditures during the remaining three quarters, to June
30, 1860, are $40,995,558.23, of which sum $2,886,621.34 are estimated
for the interest on the public debt. The ascertained and estimated
expenditures for the fiscal year ending June 30, 1860, on account of the
public debt are accordingly $7,550,988.10, and for the ordinary
expenditures of the Government $53,451,744.89, making an aggregate of
$61,002,732.99, leaving an estimated balance in the Treasury on June 30,
1860, of $14,381,808.40.

The estimated receipts during the next fiscal year, ending June 30,
1861, are $66,225,000, which, with the balance estimated, as before
stated, as remaining in the Treasury on the 30th June, 1860, will make
an aggregate for the service of the next fiscal year of $80,606,808.40.

The estimated expenditures during the next fiscal year, ending 30th
June, 1861, are $66,714,928.79. Of this amount $3,386,621.34 will be
required to pay the interest on the public debt, leaving the sum of
$63,328,307.45 for the estimated ordinary expenditures during the fiscal
year ending 30th June, 1861. Upon these estimates a balance will be left
in the Treasury on the 30th June, 1861, of $13,891,879.61. But this
balance, as well as that estimated to remain in the Treasury on the 1st
July, 1860, will be reduced by such appropriations as shall be made by
law to carry into effect certain Indian treaties during the present
fiscal year, asked for by the Secretary of the Interior, to the amount
of $539,350; and upon the estimates of the postmaster-General for the
service of his Department the last fiscal year, ending 30th June, 1859,
amounting to $4,296,009, together with the further estimate of that
officer for the service of the present fiscal year, ending 30th June,
1860, being $5,526,324, making an aggregate of $10,361,683.

Should these appropriations be made as requested by the proper
Departments, the balance in the Treasury on the 30th June, 1861, will
not, it is estimated, exceed $3,530,196.61.

I transmit herewith the reports of the Secretaries of War, of the Navy,
of the Interior, and of the postmaster-General. They each contain
valuable information and important recommendations well worthy of the
serious consideration of Congress. It will appear from the report of the
Secretary of War that the Army expenditures have been materially reduced
by a system of rigid economy, which in his opinion offers every guaranty
that the reduction will be permanent. The estimates of the Department
for the next have been reduced nearly $2,000,000 below the estimates for
the present fiscal year and $500,000 below the amount granted for this
year at the last session of Congress.

The expenditures of the Post-Office Department during the past fiscal
year, ending on the 30th June, 1859, exclusive of payments for mail
service specially provided for by Congress out of the general Treasury,
amounted to $14,964,493.33 and its receipts to $7,968,484.07, showing a
deficiency to be supplied from the Treasury of $6,996,009.26, against
$5,235,677.15 for the year ending 30th June, 1858. The increased cost of
transportation, growing out of the expansion of the service required by
Congress, explains this rapid augmentation of the expenditures. It is
gratifying, however, to observe an increase of receipts for the year
ending on the 30th of June, 1859, equal to $481,691.21 compared with
those in the year ending on the 30th June, 1858.

It is estimated that the deficiency for the current fiscal year will be
$5,988,424.04, but that for the year ending 30th June, 1861, it will not
exceed $1,342,473.90 should Congress adopt the measures of reform
proposed and urged by the Postmaster-General. Since the month of March
retrenchments have been made in the expenditures amounting to $1,826,471
annually, which, however, did not take effect until after the
commencement of the present fiscal year. The period seems to have
arrived for determining the question whether this Department shall
become a permanent and ever-increasing charge upon the Treasury, or
shall be permitted to resume the self-sustaining policy which had so
long controlled its administration. The course of legislation
recommended by the Postmaster-General for the relief of the Department
from its present embarrassments and for restoring it to its original
independence is deserving of your early and earnest consideration.

In conclusion I would again commend to the just liberality of Congress
the local interests of the District of Columbia. Surely the city bearing
the name of Washington, and destined, I trust, for ages to be the
capital of our united, free, and prosperous Confederacy, has strong
claims on our favorable regard.

***

State of the Union Address
James Buchanan
December 3, 1860

Fellow-Citizens of the Senate and House of Representatives:

Throughout the year since our last meeting the country has been
eminently prosperous in all its material interests. The general health
has been excellent, our harvests have been abundant, and plenty smiles
throughout the laud. Our commerce and manufactures have been prosecuted
with energy and industry, and have yielded fair and ample returns. In
short, no nation in the tide of time has ever presented a spectacle of
greater material prosperity than we have done until within a very recent
period.

Why is it, then, that discontent now so extensively prevails, and the
Union of the States, which is the source of all these blessings, is
threatened with destruction?

The long-continued and intemperate interference of the Northern people
with the question of slavery in the Southern States has at length
produced its natural effects. The different sections of the Union are
now arrayed against each other, and the time has arrived, so much
dreaded by the Father of his Country, when hostile geographical parties
have been formed.

I have long foreseen and often forewarned my countrymen of the now
impending danger. This does not proceed solely from the claim on the
part of Congress or the Territorial legislatures to exclude slavery from
the Territories, nor from the efforts of different States to defeat the
execution of the fugitive-slave law. All or any of these evils might
have been endured by the South without danger to the Union (as others
have been) in the hope that time and reflection might apply the remedy.
The immediate peril arises not so much from these causes as from the
fact that the incessant and violent agitation of the slavery question
throughout the North for the last quarter of a century has at length
produced its malign influence on the slaves and inspired them with vague
notions of freedom. Hence a sense of security no longer exists around
the family altar. This feeling of peace at home has given place to
apprehensions of servile insurrections. Many a matron throughout the
South retires at night in dread of what may befall herself and children
before the morning. Should this apprehension of domestic danger, whether
real or imaginary, extend and intensify itself until it shall pervade
the masses of the Southern people, then disunion will become inevitable.
Self-preservation is the first law of nature, and has been implanted in
the heart of man by his Creator for the wisest purpose; and no political
union, however fraught with blessings and benefits in all other
respects, can long continue if the necessary consequence be to render
the homes and the firesides of nearly half the parties to it habitually
and hopelessly insecure. Sooner or later the bonds of such a union must
be severed. It is my conviction that this fatal period has not yet
arrived, and my prayer to God is that He would preserve the Constitution
and the Union throughout all generations.

But let us take warning in time and remove the cause of danger. It can
not be denied that for five and twenty years the agitation at the North
against slavery has been incessant. In 1835 pictorial handbills and
inflammatory appeals were circulated extensively throughout the South of
a character to excite the passions of the slaves, and, in the language
of General Jackson, "to stimulate them to insurrection and produce all
the horrors of a servile war." This agitation has ever since been
continued by the public press, by the proceedings of State and county
conventions and by abolition sermons and lectures. The time of Congress
has been occupied in violent speeches on this never-ending subject, and
appeals, in pamphlet and other forms, indorsed by distinguished names,
have been sent forth from this central point and spread broadcast over
the Union.

How easy would it be for the American people to settle the slavery
question forever and to restore peace and harmony to this distracted
country! They, and they alone, can do it. All that is necessary to
accomplish the object, and all for which the slave States have ever
contended, is to be let alone and permitted to manage their domestic
institutions in their own way. As sovereign States, they, and they
alone, are responsible before God and the world for the slavery existing
among them. For this the people of the North are not more responsible
and have no more fight to interfere than with similar institutions in
Russia or in Brazil.

Upon their good sense and patriotic forbearance I confess I still
greatly rely. Without their aid it is beyond the power of any President,
no matter what may be his own political proclivities, to restore peace
and harmony among the States. Wisely limited and restrained as is his
power under our Constitution and laws, he alone can accomplish but
little for good or for evil on such a momentous question.

And this brings me to observe that the election of any one of our
fellow-citizens to the office of President does not of itself afford
just cause for dissolving the Union. This is more especially true if his
election has been effected by a mere plurality, and not a majority of
the people, and has resulted from transient and temporary causes, which
may probably never again occur. In order to justify a resort to
revolutionary resistance, the Federal Government must be guilty of "a
deliberate, palpable, and dangerous exercise" of powers not granted by
the Constitution.

The late Presidential election, however, has been held in strict
conformity with its express provisions. How, then, can the result
justify a revolution to destroy this very Constitution? Reason, justice,
a regard for the Constitution, all require that we shall wait for some
overt and dangerous act on the part of the President elect before
resorting to such a remedy. It is said, however, that the antecedents of
the President-elect have been sufficient to justify the fears of the
South that he will attempt to invade their constitutional rights. But
are such apprehensions of contingent danger in the future sufficient to
justify the immediate destruction of the noblest system of government
ever devised by mortals? From the very nature of his office and its high
responsibilities he must necessarily be conservative. The stern duty of
administering the vast and complicated concerns of this Government
affords in itself a guaranty that he will not attempt any violation of a
clear constitutional right.

After all, he is no more than the chief executive officer of the
Government. His province is not to make but to execute the laws. And it
is a remarkable fact in our history that, notwithstanding the repeated
efforts of the antislavery party, no single act has ever passed
Congress, unless we may possibly except the Missouri compromise,
impairing in the slightest degree the rights of the South to their
property in slaves; and it may also be observed, judging from present
indications, that no probability exists of the passage of such an act by
a majority of both Houses, either in the present or the next Congress.
Surely under these circumstances we ought to be restrained from present
action by the precept of Him who spake as man never spoke, that
"sufficient unto the day is the evil thereof." The day of evil may never
come unless we shall rashly bring it upon ourselves.

It is alleged as one cause for immediate secession that the Southern
States are denied equal rights with the other States in the common
Territories. But by what authority are these denied? Not by Congress,
which has never passed, and I believe never will pass, any act to
exclude slavery from these Territories; and certainly not by the Supreme
Court, which has solemnly decided that slaves are property, and, like
all other property, their owners have a right to take them into the
common Territories and hold them there under the protection of the
Constitution.

So far then, as Congress is concerned, the objection is not to anything
they have already done, but to what they may do hereafter. It will
surely be admitted that this apprehension of future danger is no good
reason for an immediate dissolution of the Union. It is true that the
Territorial legislature of Kansas, on the 23d February, 1860, passed in
great haste an act over the veto of the governor declaring that slavery
"is and shall be forever prohibited in this Territory." Such an act,
however, plainly violating the rights of property secured by the
Constitution, will surely be declared void by the judiciary whenever it
shall be presented in a legal form.

Only three days after my inauguration the Supreme Court of the United
States solemnly adjudged that this power did not exist in a Territorial
legislature. Yet such has been the factious temper of the times that the
correctness of this decision has been extensively impugned before the
people, and the question has given rise to angry political conflicts
throughout the country. Those who have appealed from this judgment of
our highest constitutional tribunal to popular assemblies would, if they
could, invest a Territorial legislature with power to annul the sacred
rights of property. This power Congress is expressly forbidden by the
Federal Constitution to exercise. Every State legislature in the Union
is forbidden by its own constitution to exercise it. It can not be
exercised in any State except by the people in their highest sovereign
capacity, when framing or amending their State constitution. In like
manner it can only be exercised by the people of a Territory represented
in a convention of delegates for the purpose of framing a constitution
preparatory to admission as a State into the Union. Then, and not until
then, are they invested with power to decide the question whether
slavery shall or shall not exist within their limits. This is an act of
sovereign authority, and not of subordinate Territorial legislation.
Were it otherwise, then indeed would the equality of the States in the
Territories be destroyed, and the rights of property in slaves would
depend not upon the guaranties of the Constitution, but upon the
shifting majorities of an irresponsible Territorial legislature. Such a
doctrine, from its intrinsic unsoundness, can not long influence any
considerable portion of our people, much less can it afford a good
reason for a dissolution of the Union.

The most palpable violations of constitutional duty which have yet been
committed consist in the acts of different State legislatures to defeat
the execution of the fugitive-slave law. It ought to be remembered,
however, that for these acts neither Congress nor any President can
justly be held responsible. Having been passed in violation of the
Federal Constitution, they are therefore null and void. All the courts,
both State and national, before whom the question has arisen have from
the beginning declared the fugitive-slave law to be constitutional. The
single exception is that of a State court in Wisconsin, and this has not
only been reversed by the proper appellate tribunal, but has met with
such universal reprobation that there can be no danger from it as a
precedent. The validity of this law has been established over and over
again by the Supreme Court of the United States with perfect unanimity.
It is rounded upon an express provision of the Constitution, requiring
that fugitive slaves who escape from service in one State to another
shall be "delivered up" to their masters. Without this provision it is a
well-known historical fact that the Constitution itself could never have
been adopted by the Convention. In one form or other, under the acts of
1793 and 1850, both being substantially the same, the fugitive-slave law
has been the law of the land from the days of Washington until the
present moment. Here, then, a clear case is presented in which it will
be the duty of the next President, as it has been my own, to act with
vigor in executing this supreme law against the conflicting enactments
of State legislatures. Should he fail in the performance of this high
duty, he will then have manifested a disregard of the Constitution and
laws, to the great injury of the people of nearly one-half of the States
of the Union. But are we to presume in advance that he will thus violate
his duty? This would be at war with every principle of justice and of
Christian charity. Let us wait for the overt act. The fugitive-slave law
has been carried into execution in every contested case since the
commencement of the present Administration, though Often, it is to be
regretted, with great loss and inconvenience to the master and with
considerable expense to the Government. Let us trust that the State
legislatures will repeal their unconstitutional and obnoxious
enactments. Unless this shall be done without unnecessary delay, it is
impossible for any human power to save the Union.

The Southern States, standing on the basis of the Constitution, have
right to demand this act of justice from the States of the North. Should
it be refused, then the Constitution, to which all the States are
parties, will have been willfully violated by one portion of them in a
provision essential to the domestic security and happiness of the
remainder. In that event the injured States, after having first used all
peaceful and constitutional means to obtain redress, would be justified
in revolutionary resistance to the Government of the Union.

I have purposely confined my remarks to revolutionary resistance,
because it has been claimed within the last few years that any State,
whenever this shall be its sovereign will and pleasure, may secede from
the Union in accordance with the Constitution and without any violation
of the constitutional rights of the other members of the Confederacy;
that as each became parties to the Union by the vote of its own people
assembled in convention, so any one of them may retire from the Union in
a similar manner by the vote of such a convention.

In order to justify secession as a constitutional remedy, it must be on
the principle that the Federal Government is a mere voluntary
association of States, to be dissolved at pleasure by any one of the
contracting parties. If this be so, the Confederacy is a rope of sand,
to be penetrated and dissolved by the first adverse wave of public
opinion in any of the States. In this manner our thirty-three States may
resolve themselves into as many petty, jarring, and hostile republics,
each one retiring from the Union without responsibility whenever any
sudden excitement might impel them to such a course. By this process a
Union might be entirely broken into fragments in a few weeks which cost
our forefathers many years of toil, privation, and blood to establish.

Such a principle is wholly inconsistent with the history as well as the
character of the Federal Constitution. After it was framed with the
greatest deliberation and care it was submitted to conventions of the
people of the several States for ratification. Its provisions were
discussed at length in these bodies, composed of the first men of the
country. Its opponents contended that it conferred powers upon the
Federal Government dangerous to the rights of the States, whilst its
advocates maintained that under a fair construction of the instrument
there was no foundation for such apprehensions. In that mighty struggle
between the first intellects of this or any other country it never
occurred to any individual, either among its opponents or advocates, to
assert or even to intimate that their efforts were all vain labor,
because the moment that any State felt herself aggrieved she might
secede from the Union. What a crushing argument would this have proved
against those who dreaded that the rights of the States would be
endangered by the Constitution! The truth is that it was not until many
years after the origin of the Federal Government that such a proposition
was first advanced. It was then met and refuted by the conclusive
arguments of General Jackson, who in his message of the 16th of January,
1833, transmitting the nullifying ordinance of South Carolina to
Congress, employs the following language:

The right of the people of a single State to absolve themselves at will
and without the consent of the other States from their most solemn
obligations, and hazard the liberties and happiness of the millions
composing this Union, can not be acknowledged. Such authority is
believed to be utterly repugnant both to the principles upon which the
General Government is constituted and to the objects which it is
expressly formed to attain.

It is not pretended that any clause in the Constitution gives
countenance to such a theory. It is altogether rounded upon inference;
not from any language contained in the instrument itself, but from the
sovereign character of the several States by which it was ratified. But
is it beyond the power of a State, like an individual, to yield a
portion of its sovereign rights to secure the remainder? In the language
of Mr. Madison, who has been called the father of the Constitution--

It was formed by the States; that is, by the people in each of the
States acting in their highest sovereign capacity, and formed,
consequently, by the same authority which formed the State
constitutions. Nor is the Government of the United States, created by
the Constitution, less a government, in the strict sense of the term,
within the sphere of its powers than the governments created by the
constitutions of the States are within their several spheres. It is,
like them, organized into legislative, executive, and judiciary
departments. It operates, like them directly on persons and things, and,
like them, it has at command a physical force for executing the powers
committed to it.

It was intended to be perpetual, and not to be annulled at the pleasure
of any one of the contracting parties. The old Articles of Confederation
were entitled "Articles of Confederation and Perpetual Union between the
States," and by the thirteenth article it is expressly declared that
"the articles of this Confederation shall be inviolably observed by
every State, and the Union shall be perpetual." The preamble to the
Constitution of the United States, having express reference to the
Articles of Confederation, recites that it was established "in order to
form a more perfect union." And yet it is contended that this "more
perfect union" does not include the essential attribute of perpetuity.

But that the Union was designed to be perpetual appears conclusively
from the nature and extent of the powers conferred by the Constitution
on the Federal Government. These powers embrace the very highest
attributes of national sovereignty. They place both the sword and the
purse under its control. Congress has power to make war and to make
peace, to raise and support armies and navies, and to conclude treaties
with foreign governments. It is invested with the power to coin money
and to regulate the value thereof, and to regulate commerce with foreign
nations and among the several States. It is not necessary to enumerate
the other high powers which have been conferred upon the Federal
Government. In order to carry the enumerated powers into effect,
Congress possesses the exclusive right to lay and collect duties on
imports, and, in common with the States, to lay and collect all other
taxes.

But the Constitution has not only conferred these high powers upon
Congress, but it has adopted effectual means to restrain the States from
interfering with their exercise. For that purpose it has in strong
prohibitory language expressly declared that--

No State shall enter into any treaty, alliance, or confederation; grant
letters of marque and reprisal; coin money; emit bills of credit; make
anything but gold and silver coin a tender in payment of debts; pass any
bill of attainder, ex post facto law, or law impairing the obligation of
contracts. Moreover--

No State shall without the consent of the Congress lay any imposts or
duties on imports or exports, except what may be absolutely necessary
for executing its inspection laws.

And if they exceed this amount the excess shall belong, to the United
States. And--

No State shall without the consent of Congress lay any duty of tonnage,
keep troops or ships of war in time of peace, enter into any agreement
or compact with another State or with a foreign power, or engage in war,
unless actually invaded or in such imminent danger as will not admit of
delay.

In order still further to secure the uninterrupted exercise of these
high powers against State interposition, it is provided that--

This Constitution and the laws of the United States which shall be made
in pursuance thereof, and all treaties made or which shall be made under
the authority of the United States, shall be the supreme law of the
land, and the judges in every State shall be bound thereby, anything in
the constitution or laws of any State to the contrary notwithstanding.

The solemn sanction of religion has been superadded to the obligations
of official duty, and all Senators and Representatives of the United
States, all members of State legislatures, and all executive and
judicial officers, "both of the United States and of the several States,
shall be bound by oath or affirmation to support this Constitution."

In order to carry into effect these powers, the Constitution has
established a perfect Government in all its forms--legislative,
executive, and judicial; and this Government to the extent of its powers
acts directly upon the individual citizens of every State, and executes
its own decrees by the agency of its own officers. In this respect it
differs entirely from the Government under the old Confederation, which
was confined to making requisitions on the States in their sovereign
character. This left it in the discretion of each whether to obey or to
refuse, and they often declined to comply with such requisitions. It
thus became necessary for the purpose of removing this barrier and "in
order to form a more perfect union" to establish a Government which
could act directly upon the people and execute its own laws without the
intermediate agency of the States. This has been accomplished by the
Constitution of the United States. In short, the Government created by
the Constitution, and deriving its authority from the sovereign people
of each of the several States, has precisely the same right to exercise
its power over the people of all these States in the enumerated cases
that each one of them possesses over subjects not delegated to the
United States, but "reserved to the States respectively or to the
people."

To the extent of the delegated powers the Constitution of the United
States is as much a part of the constitution of each State and is as
binding upon its people as though it had been textually inserted
therein.

This Government, therefore, is a great and powerful Government, invested
with all the attributes of sovereignty over the special subjects to
which its authority extends. Its framers never intended to implant in
its bosom the seeds of its own destruction, nor were they at its
creation guilty of the absurdity of providing for its own dissolution.
It was not intended by its framers to be the baseless fabric of a
vision, which at the touch of the enchanter would vanish into thin air,
but a substantial and mighty fabric, capable of resisting the slow decay
of time and of defying the storms of ages. Indeed, well may the jealous
patriots of that day have indulged fears that a Government of such high
powers might violate the reserved rights of the States, and wisely did
they adopt the rule of a strict construction of these powers to prevent
the danger. But they did not fear, nor had they any reason to imagine,
that the Constitution would ever be so interpreted as to enable any
State by her own act, and without the consent of her sister States, to
discharge her people from all or any of their federal obligations.

It may be asked, then, Are the people of the States without redress
against the tyranny and oppression of the Federal Government? By no
means. The right of resistance on the part of the governed against the
oppression of their governments can not be denied. It exists
independently of all constitutions, and has been exercised at all
periods of the world's history. Under it old governments have been
destroyed and new ones have taken their place. It is embodied in strong
and express language in our own Declaration of Independence. But the
distinction must ever be observed that this is revolution against an
established government, and not a voluntary secession from it by virtue
of an inherent constitutional right. In short, let us look the danger
fairly in the face. Secession is neither more nor less than revolution.
It may or it may not be a justifiable revolution, but still it is
revolution.

What, in the meantime, is the responsibility and true position of the
Executive? He is bound by solemn oath, before God and the country, "to
take care that the laws be faithfully executed," and from this
obligation he can not be absolved by any human power. But what if the
performance of this duty, in whole or in part, has been rendered
impracticable by events over which he could have exercised no control?
Such at the present moment is the case throughout the State of South
Carolina so far as the laws of the United States to secure the
administration of justice by means of the Federal judiciary are
concerned. All the Federal officers within its limits through whose
agency alone these laws can be carried into execution have already
resigned. We no longer have a district judge, a district attorney, or a
marshal in South Carolina. In fact, the whole machinery of the Federal
Government necessary for the distribution of remedial justice among the
people has been demolished, and it would be difficult, if not
impossible, to replace it.

The only acts of Congress on the statute book bearing upon this subject
are those of February 28, 1795, and March 3, 1807. These authorize the
President, after he shall have ascertained that the marshal, with his
posse comitatus, is unable to execute civil or criminal process in any
particular case, to call forth the militia and employ the Army and Navy
to aid him in performing this service, having first by proclamation
commanded the insurgents "to disperse and retire peaceably to their
respective abodes within a limited time" This duty can not by
possibility be performed in a State where no judicial authority exists
to issue process, and where there is no marshal to execute it, and
where, even if there were such an officer, the entire population would
constitute one solid combination to resist him.

The bare enumeration of these provisions proves how inadequate they are
without further legislation to overcome a united opposition in a single
State, not to speak of other States who may place themselves in a
similar attitude. Congress alone has power to decide whether the present
laws can or can not be amended so as to carry out more effectually the
objects of the Constitution.

The same insuperable obstacles do not lie in the way of executing the
laws for the collection of the customs. The revenue still continues to
be collected as heretofore at the custom-house in Charleston, and should
the collector unfortunately resign a successor may be appointed to
perform this duty.

Then, in regard to the property of the United States in South Carolina.
This has been purchased for a fair equivalent, "by the consent of the
legislature of the State," "for the erection of forts, magazines,
arsenals," etc., and over these the authority "to exercise exclusive
legislation" has been expressly granted by the Constitution to Congress.
It is not believed that any attempt will be made to expel the United
States from this property by force; but if in this I should prove to be
mistaken, the officer in command of the forts has received orders to act
strictly on the defensive. In such a contingency the responsibility for
consequences would rightfully rest upon the heads of the assailants.

Apart from the execution of the laws, so far as this may be practicable,
the Executive has no authority to decide what shall be the relations
between the Federal Government and South Carolina. He has been invested
with no such discretion. He possesses no power to change the relations
heretofore existing between them, much less to acknowledge the
independence of that State. This would be to invest a mere executive
officer with the power of recognizing the dissolution of the confederacy
among our thirty-three sovereign States. It bears no resemblance to the
recognition of a foreign de facto government, involving no such
responsibility. Any attempt to do this would, on his part, be a naked
act of usurpation. It is therefore my duty to submit to Congress the
whole question in all its beatings. The course of events is so rapidly
hastening forward that the emergency may soon arise when you may be
called upon to decide the momentous question whether you possess the
power by force of arms to compel a State to remain in the Union. I
should feel myself recreant to my duty were I not to express an opinion
on this important subject.

The question fairly stated is, Has the Constitution delegated to
Congress the power to coerce a State into submission which is attempting
to withdraw or has actually withdrawn from the Confederacy? If answered
in the affirmative, it must be on the principle that the power has been
conferred upon Congress to declare and to make war against a State.
After much serious reflection I have arrived at the conclusion that no
such power has been delegated to Congress or to any other department of
the Federal Government. It is manifest upon an inspection of the
Constitution that this is not among the specific and enumerated powers
granted to Congress, and it is equally apparent that its exercise is not
"necessary and proper for carrying into execution" any one of these
powers. So far from this power having been delegated to Congress, it was
expressly refused by the Convention which framed the Constitution.

It appears from the proceedings of that body that on the 31st May, 1787,
the clause "authorizing an exertion of the force of the whole against a
delinquent State" came up for consideration. Mr. Madison opposed it in a
brief but powerful speech, from which I shall extract but a single
sentence. He observed:

The use of force against a State would look more like a declaration of
war than an infliction of punishment, and would probably be considered
by the party attacked as a dissolution of all previous compacts by which
it might be bound.

Upon his motion the clause was unanimously postponed, and was never, I
believe, again presented. Soon afterwards, on the 8th June, 1787, when
incidentally adverting to the subject, he said: "Any government for the
United States formed on the supposed practicability of using force
against the unconstitutional proceedings of the States would prove as
visionary and fallacious as the government of Congress," evidently
meaning the then existing Congress of the old Confederation.

Without descending to particulars, it may be safely asserted that the
power to make war against a State is at variance with the whole spirit
and intent of the Constitution. Suppose such a war should result in the
conquest of a State; how are we to govern it afterwards? Shall we hold
it as a province and govern it by despotic power? In the nature of
things, we could not by physical force control the will of the people
and compel them to elect Senators and Representatives to Congress and to
perform all the other duties depending upon their own volition and
required from the free citizens of a free State as a constituent member
of the Confederacy.

But if we possessed this power, would it be wise to exercise it under
existing circumstances? The object would doubtless be to preserve the
Union. War would not only present the most effectual means of destroying
it, but would vanish all hope of its peaceable reconstruction. Besides,
in the fraternal conflict a vast amount of blood and treasure would be
expended, rendering future reconciliation between the States impossible.
In the meantime, who can foretell what would be the sufferings and
privations of the people during its existence?

The fact is that our Union rests upon public opinion, and can never be
cemented by the blood of its citizens shed in civil war. If it can not
live in the affections of the people, it must one day perish. Congress
possesses many means of preserving it by conciliation, but the sword was
not placed in their hand to preserve it by force.

But may I be permitted solemnly to invoke my countrymen to pause and
deliberate before they determine to destroy this the grandest temple
which has ever been dedicated to human freedom since the world began? It
has been consecrated by the blood of our fathers, by the glories of the
past, and by the hopes of the future. The Union has already made us the
most prosperous, and ere long will, if preserved, render us the most
powerful, nation on the face of the earth. In every foreign region of
the globe the title of American citizen is held in the highest respect,
and when pronounced in a foreign land it causes the hearts of our
countrymen to swell with honest pride. Surely when we reach the brink of
the yawning abyss we shall recoil with horror from the last fatal
plunge.

By such a dread catastrophe the hopes of the friends of freedom
throughout the world would be destroyed, and a long night of leaden
despotism would enshroud the nations. Our example for more than eighty
years would not only be lost, but it would be quoted as a conclusive
proof that man is unfit for self-government.

It is not every wrong--nay, it is not every grievous wrong--which can
justify a resort to such a fearful alternative. This ought to be the
last desperate remedy of a despairing people, after every other
constitutional means of conciliation had been exhausted. We should
reflect that under this free Government there is an incessant ebb and
flow in public opinion. The slavery question, like everything human,
will have its day. I firmly believe that it has reached and passed the
culminating point. But if in the midst of the existing excitement the
Union shall perish, the evil may then become irreparable.

Congress can contribute much to avert it by proposing and recommending
to the legislatures of the several States the remedy for existing evils
which the Constitution has itself provided for its own preservation.
This has been tried at different critical periods of our history, and
always with eminent success. It is to be found in the fifth article,
providing for its own amendment. Under this article amendments have been
proposed by two-thirds of both Houses of Congress, and have been
"ratified by the legislatures of three-fourths of the several States,"
and have consequently become parts of the Constitution. To this process
the country is indebted for the clause prohibiting Congress from passing
any law respecting an establishment of religion or abridging the freedom
of speech or of the press or of the right of petition. To this we are
also indebted for the bill of rights which secures the people against
any abuse of power by the Federal Government. Such were the
apprehensions justly entertained by the friends of State rights at that
period as to have rendered it extremely doubtful whether the
Constitution could have long survived without those amendments.

Again the Constitution was amended by the same process, after the
election of President Jefferson by the House of Representatives, in
February, 1803. This amendment was rendered necessary to prevent a
recurrence of the dangers which had seriously threatened the existence
of the Government during the pendency of that election. The article for
its own amendment was intended to secure the amicable adjustment of
conflicting constitutional questions like the present which might arise
between the governments of the States and that of the United States.
This appears from contemporaneous history. In this connection I shall
merely call attention to a few sentences in Mr. Madison's justly
celebrated report, in 1799, to the legislature of Virginia. In this he
ably and conclusively defended the resolutions of the preceding
legislature against the strictures of several other State legislatures.
These were mainly rounded upon the protest of the Virginia legislature
against the "alien and sedition acts," as "palpable and alarming
infractions of the Constitution." In pointing out the peaceful and
constitutional remedies--and he referred to none other--to which the
States were authorized to resort on such occasions, he concludes by
saying that--

The legislatures of the States might have made a direct representation
to Congress with a view to obtain a rescinding of the two offensive
acts, or they might have represented to their respective Senators in
Congress their wish that two-thirds thereof would propose an explanatory
amendment to the Constitution; or two-thirds of themselves, if such had
been their option, might by an application to Congress have obtained a
convention for the same object.

This is the very course which I earnestly recommend in order to obtain
an "explanatory amendment" of the Constitution on the subject of
slavery. This might originate with Congress or the State legislatures,
as may be deemed most advisable to attain the object. The explanatory
amendment might be confined to the final settlement of the true
construction of the Constitution on three special points:

1. An express recognition of the right of property in slaves in the
States where it now exists or may hereafter exist.

2. The duty of protecting this right in all the common Territories
throughout their Territorial existence, and until they shall be admitted
as States into the Union, with or without slavery, as their
constitutions may prescribe.

3. A like recognition of the right of the master to have his slave who
has escaped from one State to another restored and "delivered up" to
him, and of the validity of the fugitive-slave law enacted for this
purpose, together with a declaration that all State laws impairing or
defeating this right are violations of the Constitution, and are
consequently null and void. It may be objected that this construction of
the Constitution has already been settled by the Supreme Court of the
United States, and what more ought to be required? The answer is that a
very large proportion of the people of the United States still contest
the correctness of this decision, and never will cease from agitation
and admit its binding force until clearly established by the people of
the several States in their sovereign character. Such an explanatory
amendment would, it is believed, forever terminate the existing
dissensions, and restore peace and harmony among the States.

It ought not to be doubted that such an appeal to the arbitrament
established by the Constitution itself would be received with favor by
all the States of the Confederacy. In any event, it ought to be tried in
a spirit of conciliation before any of these States shall separate
themselves from the Union.

When I entered upon the duties of the Presidential office, the aspect
neither of our foreign nor domestic affairs was at all satisfactory. We
were involved in dangerous complications with several nations, and two
of our Territories were in a state of revolution against the Government.
A restoration of the African slave trade had numerous and powerful
advocates. Unlawful military expeditions were countenanced by many of
our citizens, and were suffered, in defiance of the efforts of the
Government, to escape from our shores for the purpose of making war upon
the offending people of neighboring republics with whom we were at
peace. In addition to these and other difficulties, we experienced a
revulsion in monetary affairs soon after my advent to power of
unexampled severity and of ruinous consequences to all the great
interests of the country. When we take a retrospect of what was then our
condition and contrast this with its material prosperity at the time of
the late Presidential election, we have abundant reason to return our
grateful thanks to that merciful Providence which has never forsaken us
as a nation in all our past trials.

Our relations with Great Britain are of the most friendly character.
Since the commencement of my Administration the two dangerous questions
arising from the Clayton and Bulwer treaty and from the right of search
claimed by the British Government have been amicably and honorably
adjusted.

The discordant constructions of the Clayton and Bulwer treaty between
the two Governments, which at different periods of the discussion bore a
threatening aspect, have resulted in a final settlement entirely
satisfactory to this Government. In my last annual message I informed
Congress that the British Government had not then "completed treaty
arrangements with the Republics of Honduras and Nicaragua in pursuance
of the understanding between the two Governments. It is, nevertheless,
confidently expected that this good work will ere long be accomplished."
This confident expectation has since been fulfilled. Her Britannic
Majesty concluded a treaty with Honduras on the 28th November, 1859, and
with Nicaragua on the 28th August, 1860, relinquishing the Mosquito
protectorate. Besides, by the former the Bay Islands are recognized as a
part of the Republic of Honduras. It may be observed that the
stipulations of these treaties conform in every important particular to
the amendments adopted by the Senate of the United States to the treaty
concluded at London on the 17th October, 1856, between the two
Governments. It will be recollected that this treaty was rejected by the
British Government because of its objection to the just and important
amendment of the Senate to the article relating to Ruatan and the other
islands in the Bay of Honduras.

It must be a source of sincere satisfaction to all classes of our
fellow-citizens, and especially to those engaged in foreign commerce,
that the claim on the part of Great Britain forcibly to visit and search
American merchant vessels on the high seas in time of peace has been
abandoned. This was by far the most dangerous question to the peace of
the two countries which has existed since the War of 1812. Whilst it
remained open they might at any moment have been precipitated into a
war. This was rendered manifest by the exasperated state of public
feeling throughout our entire country produced by the forcible search of
American merchant vessels by British cruisers on the coast of Cuba in
the spring of 1858. The American people hailed with general acclaim the
orders of the Secretary of the Navy to our naval force in the Gulf of
Mexico "to protect all vessels of the United States on the high seas
from search or detention by the vessels of war of any other nation."
These orders might have produced an immediate collision between the
naval forces of the two countries. This was most fortunately prevented
by an appeal to the justice of Great Britain and to the law of nations
as expounded by her own most eminent jurists.

The only question of any importance which still remains open is the
disputed title between the two Governments to the island of San Juan, in
the vicinity of Washington Territory. As this question is still under
negotiation, it is not deemed advisable at the present moment to make
any other allusion to the subject.

The recent visit of the Prince of Wales, in a private character, to the
people of this country has proved to be a most auspicious event. In its
consequences it can not fail to increase the kindred and kindly feelings
which I trust may ever actuate the Government and people of both
countries in their political and social intercourse with each other.

With France, our ancient and powerful ally, our relations continue to be
of the most friendly character. A decision has recently been made by a
French judicial tribunal, with the approbation of the Imperial
Government, which can not fail to foster the sentiments of mutual regard
that have so long existed between the two countries. Under the French
law no person can serve in the armies of France unless he be a French
citizen. The law of France recognizing the natural right of
expatriation, it follows as a necessary consequence that a Frenchman by
the fact of having become a citizen of the United States has changed his
allegiance and has lost his native character. He can not therefore be
compelled to serve in the French armies in case he should return to his
native country. These principles were announced in 1852 by the French
minister of war and in two late cases have been confirmed by the French
judiciary. In these, two natives of France have been discharged from the
French army because they had become American citizens. To employ the
language of our present minister to France, who has rendered good
service on this occasion. "I do not think our French naturalized
fellow-citizens will hereafter experience much annoyance on this
subject."

I venture to predict that the time is not far distant when the other
continental powers will adopt the same wise and just policy which has
done so much honor to the enlightened Government of the Emperor. In any
event, our Government is bound to protect the rights of our naturalized
citizens everywhere to the same extent as though they had drawn their
first breath in this country. We can recognize no distinction between
our native and naturalized citizens.

Between the great Empire of Russia and the United States the mutual
friendship and regard which has so long existed still continues to
prevail, and if possible to increase. Indeed, our relations with that
Empire are all that we could desire. Our relations with Spain are now of
a more complicated, though less dangerous, character than they have been
for many years. Our citizens have long held and continue to hold
numerous claims against the Spanish Government. These had been ably
urged for a series of years by our successive diplomatic representatives
at Madrid, but without obtaining redress. The Spanish Government finally
agreed to institute a joint commission for the adjustment of these
claims, and on the 5th day of March, 1860, concluded a convention for
this purpose with our present minister at Madrid.

Under this convention what have been denominated the "Cuban claims,"
amounting to $128,635.54, in which more than 100 of our fellow-citizens
are interested, were recognized, and the Spanish Government agreed to
pay $100,000 of this amount "within three months following the exchange
of ratifications." The payment of the remaining $28,635.54 was to await
the decision of the commissioners for or against the Amistad claim; but
in any event the balance was to be paid to the claimants either by Spain
or the United States. These terms, I have every reason to know, are
highly satisfactory to the holders of the Cuban claims. Indeed, they
have made a formal offer authorizing the State Department to settle
these claims and to deduct the amount of the Amistad claim from the sums
which they are entitled to receive from Spain. This offer, of course,
can not be accepted. All other claims of citizens of the United States
against Spain, or the subjects of the Queen of Spain against the United
States, including the Amistad claim, were by this convention referred to
a board of commissioners in the usual form. Neither the validity of the
Amistad claim nor of any other claim against either party, with the
single exception of the Cuban claims, was recognized by the convention.
Indeed, the Spanish Government did not insist that the validity of the
Amistad claim should be thus recognized, notwithstanding its payment had
been recommended to Congress by two of my predecessors, as well as by
myself, and an appropriation for that purpose had passed the Senate of
the United States.

They were content that it should be submitted to the board for
examination and decision like the other claims. Both Governments were
bound respectively to pay the amounts awarded to the several claimants
"at such times and places as may be fixed by and according to the tenor
of said awards."

I transmitted this convention to the Senate for their constitutional
action on the 3d of May, 1860, and on the 27th of the succeeding June
they determined that they would "not advise and consent" to its
ratification.

These proceedings place our relations with Spain in an awkward and
embarrassing position. It is more than probable that the final
adjustment of these claims will devolve upon my successor.

I reiterate the recommendation contained in my annual message of
December, 1858, and repeated in that of December, 1859, in favor of the
acquisition of Cuba from Spain by fair purchase. I firmly believe that
such an acquisition would contribute essentially to the well-being and
prosperity of both countries in all future time, as well as prove the
certain means of immediately abolishing the African slave trade
throughout the world. I would not repeat this recommendation upon the
present occasion if I believed that the transfer of Cuba to the United
States upon conditions highly favorable to Spain could justly tarnish
the national honor of the proud and ancient Spanish monarchy. Surely no
person ever attributed to the first Napoleon a disregard of the national
honor of France for transferring Louisiana to the United States for a
fair equivalent, both in money and commercial advantages.

With the Emperor of Austria and the remaining continental powers of
Europe, including that of the Sultan, our relations continue to be of
the most friendly character.

The friendly and peaceful policy pursued by the Government of the United
States toward the Empire of China has produced the most satisfactory
results. The treaty of Tien-tsin of the 18th June, 1858, has been
faithfully observed by the Chinese authorities. The convention of the
8th November, 1858, supplementary to this treaty, for the adjustment and
satisfaction of the claims of our citizens on China referred to in my
last annual message, has been already carried into effect so far as this
was practicable. Under this convention the sum of 500,000 taels, equal
to about $700,000, was stipulated to be paid in satisfaction of the
claims of American citizens out of the one-fifth of the receipts for
tonnage, import, and export duties on American vessels at the ports of
Canton, Shanghai, and Fuchau, and it was "agreed that this amount shall
be in full liquidation of all claims of American citizens at the various
ports to this date." Debentures for this amount, to wit, 300,000 taels
for Canton, 100,000 for Shanghai, and 100,000 for Fuchau, were
delivered, according to the terms of the convention, by the respective
Chinese collectors of the customs of these ports to the agent selected
by our minister to receive the same. Since that time the claims of our
citizens have been adjusted by the board of commissioners appointed for
that purpose under the act of March 3, 1859, and their awards, which
proved satisfactory to the claimants, have been approved by our
minister. In the aggregate they amount to the sum of $498,694.78. The
claimants have already received a large proportion of the sums awarded
to them out of the fund provided, and it is confidently expected that
the remainder will ere long be entirely paid. After the awards shall
have been satisfied there will remain a surplus of more than $200,000 at
the disposition of Congress. As this will, in equity, belong to the
Chinese Government, would not justice require its appropriation to some
benevolent object in which the Chinese may be specially interested?

Our minister to China, in obedience to his instructions, has remained
perfectly neutral in the war between Great Britain and France and the
Chinese Empire, although, in conjunction with the Russian minister, he
was ever ready and willing, had the opportunity offered, to employ his
good offices in restoring peace between the parties. It is but an act of
simple justice, both to our present minister and his predecessor, to
state that they have proved fully equal to the delicate, trying, and
responsible positions in which they have on different occasions been
placed.

The ratifications of the treaty with Japan concluded at Yeddo on the
29th July, 1858, were exchanged at Washington on the 22d May last, and
the treaty itself was proclaimed on the succeeding day. There is good
reason to expect that under its protection and influence our trade and
intercourse with that distant and interesting people will rapidly
increase.

The ratifications of the treaty were exchanged with unusual solemnity.
For this purpose the Tycoon had accredited three of his most
distinguished subjects as envoys extraordinary and ministers
plenipotentiary, who were received and treated with marked distinction
and kindness, both by the Government and people of the United States.
There is every reason to believe that they have returned to their native
land entirely satisfied with their visit and inspired by the most
friendly feelings for our country. Let us ardently hope, in the language
of the treaty itself, that "there shall henceforward be perpetual peace
and friendship between the United States of America and His Majesty the
Tycoon of Japan and his successors."

With the wise, conservative, and liberal Government of the Empire of
Brazil our relations continue to be of the most amicable character.

The exchange of the ratifications of the convention with the Republic of
New Granada signed at Washington on the 10th of September, 1857, has
been long delayed from accidental causes for which neither party is
censurable. These ratifications were duly exchanged in this city on the
5th of November last. Thus has a controversy been amicably terminated
which had become so serious at the period of my inauguration as to
require me, on the 17th of April, 1857, to direct our minister to demand
his passports and return to the United States.

Under this convention the Government of New Granada has specially
acknowledged itself to be responsible to our citizens "for damages which
were caused by the riot at Panama on the 15th April, 1856." These
claims, together with other claims of our citizens which had been long
urged in vain, are referred for adjustment to a board of commissioners.
I submit a copy of the convention to Congress, and recommend the
legislation necessary to carry it into effect.

Persevering efforts have been made for the adjustment of the claims of
American citizens against the Government of Costa Rica, and I am happy
to inform you that these have finally prevailed. A convention was signed
at the city of San Jose on the 2d July last, between the minister
resident of the United States in Costa Rica and the plenipotentiaries of
that Republic, referring these claims to a board of commissioners and
providing for the payment of their awards. This convention will be
submitted immediately to the Senate for their constitutional action.

The claims of our citizens upon the Republic of Nicaragua have not yet
been provided for by treaty, although diligent efforts for this purpose
have been made by our minister resident to that Republic. These are
still continued, with a fair prospect of success.

Our relations with Mexico remain in a most unsatisfactory condition. In
my last two annual messages I discussed extensively the subject of these
relations, and do not now propose to repeat at length the facts and
arguments then presented. They proved conclusively that our citizens
residing in Mexico and our merchants trading thereto had suffered a
series of wrongs and outrages such as we have never patiently borne from
any other nation. For these our successive ministers, invoking the faith
of treaties, had in the name of their country persistently demanded
redress and indemnification, but without the slightest effect. Indeed,
so confident had the Mexican authorities become of our patient endurance
that they universally believed they might commit these outrages upon
American citizens with absolute impunity. Thus wrote our minister in
1856, and expressed the opinion that "nothing but a manifestation of the
power of the Government and of its purpose to punish these wrongs will
avail."

Afterwards, in 1857, came the adoption of a new constitution for Mexico,
the election of a President and Congress under its provisions, and the
inauguration of the President. Within one short month, however, this
President was expelled from the capital by a rebellion in the army, and
the supreme power of the Republic was assigned to General Zuloaga. This
usurper was in his turn soon compelled to retire and give place to
General Miramon.

Under the constitution which had thus been adopted Senor Juarez, as
chief justice of the supreme court, became the lawful President of the
Republic, and it was for the maintenance of the constitution and his
authority derived from it that the civil war commenced and still
continues to be prosecuted.

Throughout the year 1858 the constitutional party grew stronger and
stronger. In the previous history of Mexico a successful military
revolution at the capital had almost universally been the signal for
submission throughout the Republic. Not so on the present occasion. A
majority of the citizens persistently sustained the constitutional
Government. When this was recognized, in April, 1859, by the Government
of the United States, its authority extended over a large majority of
the Mexican States and people, including Vera Cruz and all the other
important seaports of the Republic. From that period our commerce with
Mexico began to revive, and the constitutional Government has afforded
it all the protection in its power.

Meanwhile the Government of Miramon still held sway at the capital and
over the surrounding country, and continued its outrages against the few
American citizens who still had the courage to remain within its power.
To cap the climax, after the battle of Tacubaya, in April, 1859, General
Marquez ordered three citizens of the United States, two of them
physicians, to be seized in the hospital at that place, taken out and
shot, without crime and without trial. This was done, notwithstanding
our unfortunate countrymen were at the moment engaged in the holy cause
of affording relief to the soldiers of both parties who had been wounded
in the battle, without making any distinction between them.

The time had arrived, in my opinion, when this Government was bound to
exert its power to avenge and redress the wrongs of our citizens and to
afford them protection in Mexico. The interposing obstacle was that the
portion of the country under the sway of Miramon could not be reached
without passing over territory under the jurisdiction of the
constitutional Government. Under these circumstances I deemed it my duty
to recommend to Congress in my last annual message the employment of a
sufficient military force to penetrate into the interior, where the
Government of Miramon was to be found, with or, if need be, without the
consent of the Juarez Government, though it was not doubted that this
consent could be obtained. Never have I had a clearer conviction on any
subject than of the justice as well as wisdom of such a policy. No other
alternative was left except the entire abandonment of our
fellow-citizens who had gone to Mexico under the faith of treaties to
the systematic injustice, cruelty, and oppression of Miramon's
Government. Besides, it is almost certain that the simple authority to
employ this force would of itself have accomplished all our objects
without striking a single blow. The constitutional Government would then
ere this have been established at the City of Mexico, and would have
been ready and willing to the extent of its ability to do us justice.

In addition--and I deem this a most important consideration--European
Governments would have been deprived of all pretext to interfere in the
territorial and domestic concerns of Mexico. We should thus have been
relieved from the obligation of resisting, even by force should this
become necessary, any attempt by these Governments to deprive our
neighboring Republic of portions of her territory--a duty from which we
could not shrink without abandoning the traditional and established
policy of the American people. I am happy to observe that, firmly
relying upon the justice and good faith of these Governments, there is
no present danger that such a contingency will happen.

Having discovered that my recommendations would not be sustained by
Congress, the next alternative was to accomplish in some degree, if
possible, the same objects by treaty stipulations with the
constitutional Government. Such treaties were accordingly concluded by
our late able and excellent minister to Mexico, and on the 4th of
January last were submitted to the Senate for ratification. As these
have not yet received the final action of that body, it would be
improper for me to present a detailed statement of their provisions.
Still, I may be permitted to express the opinion in advance that they
are calculated to promote the agricultural, manufacturing, and
commercial interests of the country and to secure our just influence
with an adjoining Republic as to whose fortunes and fate we can never
feel indifferent, whilst at the same time they provide for the payment
of a considerable amount toward the satisfaction of the claims of our
injured fellow-citizens.

At the period of my inauguration I was confronted in Kansas by a
revolutionary government existing under what is called the "Topeka
constitution." Its avowed object was to subdue the Territorial
government by force and to inaugurate what was called the "Topeka
government" in its stead. To accomplish this object an extensive
military organization was formed, and its command intrusted to the most
violent revolutionary leaders. Under these circumstances it became my
imperative duty to exert the whole constitutional power of the Executive
to prevent the flames of civil war from again raging in Kansas, which in
the excited state of the public mind, both North and South, might have
extended into the neighboring States. The hostile parties in Kansas had
been inflamed against each other by emissaries both from the North and
the South to a degree of malignity without parallel in our history. To
prevent actual collision and to assist the civil magistrates in
enforcing the laws, a strong detachment of the Army was stationed in the
Territory, ready to aid the marshal and his deputies when lawfully
called upon as a posse comitatus in the execution of civil and criminal
process. Still, the troubles in Kansas could not have been permanently
settled without an election by the people.

The ballot box is the surest arbiter of disputes among freemen. Under
this conviction every proper effort was employed to induce the hostile
parties to vote at the election of delegates to frame a State
constitution, and afterwards at the election to decide whether Kansas
should be a slave or free State.

The insurgent party refused to vote at either, lest this might be
considered a recognition on their part of the Territorial government
established by Congress. A better spirit, however, seemed soon after to
prevail, and the two parties met face to face at the third election,
held on the first Monday of January, 1858, for members of the
legislature and State officers under the Lecompton constitution. The
result was the triumph of the antislavery party at the polls. This
decision of the ballot box proved clearly that this party were in the
majority, and removed the danger of civil war. From that time we have
heard little or nothing of the Topeka government, and all serious danger
of revolutionary troubles in Kansas was then at an end.

The Lecompton constitution, which had been thus recognized at this State
election by the votes of both political parties in Kansas, was
transmitted to me with the request that I should present it to Congress.
This I could not have refused to do without violating my clearest and
strongest convictions of duty. The constitution and all the proceedings
which preceded and followed its formation were fair and regular on their
face. I then believed, and experience has proved, that the interests of
the people of Kansas would have been best consulted by its admission as
a State into the Union, especially as the majority within a brief period
could have amended the constitution according to their will and
pleasure. If fraud existed in all or any of these proceedings, it was
not for the President but for Congress to investigate and determine the
question of fraud and what ought to be its consequences. If at the first
two elections the majority refused to vote, it can not be pretended that
this refusal to exercise the elective franchise could invalidate an
election fairly held under lawful authority, even if they had not
subsequently voted at the third election. It is true that the whole
constitution had not been submitted to the people, as I always desired;
but the precedents are numerous of the admission of States into the
Union without such submission. It would not comport with my present
purpose to review the proceedings of Congress upon the Lecompton
constitution. It is sufficient to observe that their final action has
removed the last vestige of serious revolutionary troubles. The
desperate hand recently assembled under a notorious outlaw in the
southern portion of the Territory to resist the execution of the laws
and to plunder peaceful citizens will, I doubt not be speedily subdued
and brought to justice.

Had I treated the Lecompton constitution as a nullity and refused to
transmit it to Congress, it is not difficult to imagine, whilst
recalling the position of the country at that moment, what would have
been the disastrous consequences, both in and out of the Territory, from
such a dereliction of duty on the part of the Executive.

Peace has also been restored within the Territory of Utah, which at the
commencement of my Administration was in a state of open rebellion. This
was the more dangerous, as the people, animated by a fanatical spirit
and intrenched within their distant mountain fastnesses, might have made
a long and formidable resistance. Cost what it might, it was necessary
to bring them into subjection to the Constitution and the laws. Sound
policy, therefore, as well as humanity, required that this object should
if possible be accomplished without the effusion of blood. This could
only be effected by sending a military force into the Territory
sufficiently strong to convince the people that resistance would be
hopeless, and at the same time to offer them a pardon for past offenses
on condition of immediate submission to the Government. This policy was
pursued with eminent success, and the only cause for regret is the heavy
expenditure required to march a large detachment of the Army to that
remote region and to furnish it subsistence.

Utah is now comparatively peaceful and quiet, and the military force has
been withdrawn, except that portion of it necessary to keep the Indians
in check and to protect the emigrant trains on their way to our Pacific
possessions.

In my first annual message I promised to employ my best exertions in
cooperation with Congress to reduce the expenditures of the Government
within the limits of a wise and judicious economy. An overflowing
Treasury had produced habits of prodigality and extravagance which could
only be gradually corrected. The work required both time and patience. I
applied myself diligently to this task from the beginning and was aided
by the able and energetic efforts of the heads of the different
Executive Departments. The result of our labors in this good cause did
not appear in the sum total of our expenditures for the first two years,
mainly in consequence of the extraordinary expenditure necessarily
incurred in the Utah expedition and the very large amount of the
contingent expenses of Congress during this period. These greatly
exceeded the pay and mileage of the members. For the year ending June
30, 1858, whilst the pay and mileage amounted to $1,490,214, the
contingent expenses rose to $2,093,309.79; and for the year ending June
30, 1859, whilst the pay and mileage amounted to $859,093.66, the
contingent expenses amounted to $1,431,565.78. I am happy, however, to
be able to inform you that during the last fiscal year, ending June 30,
1860, the total expenditures of the Government in all its
branches--legislative, executive, and judicial--exclusive of the public
debt, were reduced to the sum of $55,402,465.46. This conclusively
appears from the books of the Treasury. In the year ending June 30,
1858, the total expenditure, exclusive of the public debt, amounted to
$71,901,129.77, and that for the year ending June 30, 1859, to
$66,346,226.13. Whilst the books of the Treasury show an actual
expenditure of $59,848,474.72 for the year ending June 30, 1860,
including $1,040,667.71 for the contingent expenses of Congress, there
must be deducted from this amount the sum of $4,296,009.26, with the
interest upon it of $150,000, appropriated by the act of February 15,
1860, "for the purpose of supplying the deficiency in the revenues and
defraying the expenses of the Post-Office Department for the year ending
June 30, 1859." This sum therefore justly chargeable to the year 1859,
must be deducted from the sum of $59,848,474.72 in order to ascertain
the expenditure for the year ending June 30, 1860, which leaves a
balance for the expenditures of that year of $55,402,465.46. The
interest on the public debt, including Treasury notes, for the same
fiscal year, ending June 30, 1860, amounted to $3,177,314.62, which,
added to the above sum of $55,402,465.46, makes the aggregate of
$58,579,780.08.

It ought in justice to be observed that several of the estimates from
the Departments for the year ending June 30, 1860, were reduced by
Congress below what was and still is deemed compatible with the public
interest. Allowing a liberal margin of $2,500,000 for this reduction and
for other causes, it may be safely asserted that the sum of $61,000,000,
or, at the most, $62,000,000, is amply sufficient to administer the
Government and to pay the interest on the public debt, unless contingent
events should hereafter render extraordinary expenditures necessary.

This result has been attained in a considerable degree by the care
exercised by the appropriate Departments in entering into public
contracts. I have myself never interfered with the award of any such
contract, except in a single case, with the Colonization Society,
deeming it advisable to cast the whole responsibility in each case on
the proper head of the Department, with the general instruction that
these contracts should always be given to the lowest and best bidder. It
has ever been my opinion that public contracts are not a legitimate
source of patronage to be conferred upon personal or political
favorites, but that in all such cases a public officer is bound to act
for the Government as a prudent individual would act for himself.

It is with great satisfaction I communicate the fact that since the date
of my last annual message not a single slave has been imported into the
United States in violation of the laws prohibiting the African slave
trade. This statement is rounded upon a thorough examination and
investigation of the subject. Indeed, the spirit which prevailed some
time since among a portion of our fellow-citizens in favor of this trade
seems to have entirely subsided.

I also congratulate you upon the public sentiment which now exists
against the crime of setting on foot military expeditions within the
limits of the United States to proceed from thence and make war upon the
people of unoffending States with whom we are at peace. In this respect
a happy change has been effected since the commencement of my
Administration. It surely ought to be the prayer of every Christian and
patriot that such expeditions may never again receive countenance in our
country or depart from our shores.

It would be a useless repetition to do more than refer with earnest
commendation to my former recommendations in favor of the Pacific
railroad; of the grant of power to the President to employ the naval
force in the vicinity for the protection of the lives and property of
our fellow-citizens passing in transit over the different Central
American routes against sudden and lawless outbreaks and depredations,
and also to protect American merchant vessels, their crews and cargoes,
against violent and unlawful seizure and confiscation in the ports of
Mexico and the South American Republics when these may be in a disturbed
and revolutionary condition. It is my settled conviction that without
such a power we do not afford that protection to those engaged in the
commerce of the country which they have a right to demand.

I again recommend to Congress the passage of a law, in pursuance of the
provisions of the Constitution, appointing a day certain previous to the
4th March in each year of an odd number for the election of
Representatives throughout all the States. A similar power has already
been exercised, with general approbation, in the appointment of the same
day throughout the Union for holding the election of electors for
President and Vice-President of the United States. My attention was
earnestly directed to this subject from the fact that the Thirty-fifth
Congress terminated on the 3d March, 1859, without making the necessary
appropriation for the service of the Post-Office Department. I was then
forced to consider the best remedy for this omission, and an immediate
call of the present Congress was the natural resort. Upon inquiry,
however, I ascertained that fifteen out of the thirty-three States
composing the Confederacy were without Representatives, and that
consequently these fifteen States would be disfranchised by such a call.
These fifteen States will be in the same condition on the 4th March
next. Ten of them can not elect Representatives, according to existing
State laws, until different periods, extending from the beginning of
August next until the months of October and November. In my last message
I gave warning that in a time of sudden and alarming danger the
salvation of our institutions might depend upon the power of the
President immediately to assemble a full Congress to meet the emergency.

It is now quite evident that the financial necessities of the Government
will require a modification of the tariff during your present session
for the purpose of increasing the revenue. In this aspect, I desire to
reiterate the recommendation contained in my last two annual messages in
favor of imposing specific instead of ad valorem duties on all imported
articles to which these can be properly applied. From long observation
and experience I am convinced that specific duties are necessary, both
to protect the revenue and to secure to our manufacturing interests that
amount of incidental encouragement which unavoidably results from a
revenue tariff.

As an abstract proposition it may be admitted that ad valorem duties
would in theory be the most just and equal. But if the experience of
this and of all other commercial nations has demonstrated that such
duties can not be assessed and collected without great frauds upon the
revenue, then it is the part of wisdom to resort to specific duties.
Indeed, from the very nature of an ad valorem duty this must be the
result. Under it the inevitable consequence is that foreign goods will
be entered at less than their true value. The Treasury will therefore
lose the duty on the difference between their real and fictitious value,
and to this extent we are defrauded.

The temptations which ad valorem duties present to a dishonest importer
are irresistible. His object is to pass his goods through the
custom-house at the very lowest valuation necessary to save them from
confiscation. In this he too often succeeds in spite of the vigilance of
the revenue officers. Hence the resort to false invoices, one for the
purchaser and another for the custom-house, and to other expedients to
defraud the Government. The honest importer produces his invoice to the
collector, stating the actual price at which he purchased the articles
abroad. Not so the dishonest importer and the agent of the foreign
manufacturer. And here it may be observed that a very large proportion
of the manufactures imported from abroad are consigned for sale to
commission merchants, who are mere agents employed by the manufacturers.
In such cases no actual sale has been made to fix their value. The
foreign manufacturer, if he be dishonest, prepares an invoice of the
goods, not at their actual value, but at the very lowest rate necessary
to escape detection. In this manner the dishonest importer and the
foreign manufacturer enjoy a decided advantage over the honest merchant.
They are thus enabled to undersell the fair trader and drive him from
the market. In fact the operation of this system has already driven from
the pursuits of honorable commerce many of that class of regular and
conscientious merchants whose character throughout the world is the
pride of our country.

The remedy for these evils is to be found in specific duties, so far as
this may be practicable. They dispense with any inquiry at the
custom-house into the actual cost or value of the article, and it pays
the precise amount of duty previously fixed by law. They present no
temptations to the appraisers of foreign goods, who receive but small
salaries, and might by undervaluation in a few cases render themselves
independent.

Besides, specific duties best conform to the requisition in the
Constitution that "no preference shall be given by any regulation of
commerce or revenue to the ports of one State over those of another."
Under our ad valorem system such preferences are to some extent
inevitable, and complaints have often been made that the spirit of this
provision has been violated by a lower appraisement of the same articles
at one port than at another.

An impression strangely enough prevails to some extent that specific
duties are necessarily protective duties. Nothing can be more
fallacious. Great Britain glories in free trade, and yet her whole
revenue from imports is at the present moment collected under a system
of specific duties. It is a striking fact in this connection that in the
commercial treaty of January 23, 1860, between France and England one of
the articles provides that the ad valorem duties which it imposes shall
be converted into specific duties within six months from its date, and
these are to be ascertained by making an average of the prices for six
months previous to that time. The reverse of the propositions would be
nearer to the truth, because a much larger amount of revenue would be
collected by merely converting the ad valorem duties of a tariff into
equivalent specific duties. To this extent the revenue would be
increased, and in the same proportion the specific duty might be
diminished.

Specific duties would secure to the American manufacturer the incidental
protection to which he is fairly entitled under a revenue tariff, and to
this surely no person would object. The framers of the existing tariff
have gone further, and in a liberal spirit have discriminated in favor
of large and useful branches of our manufactures, not by raising the
rate of duty upon the importation of similar articles from abroad, but,
what is the same in effect, by admitting articles free of duty which
enter into the composition of their fabrics.

Under the present system it has been often truly remarked that this
incidental protection decreases when the manufacturer needs it most and
increases when he needs it least, and constitutes a sliding scale which
always operates against him. The revenues of the country are subject to
similar fluctuations. Instead of approaching a steady standard, as would
be the case under a system of specific duties, they sink and rise with
the sinking and rising prices of articles in foreign countries. It would
not be difficult for Congress to arrange a system of specific duties
which would afford additional stability both to our revenue and our
manufactures and without injury or injustice to any interest of the
country. This might be accomplished by ascertaining the average value of
any given article for a series of years at the place of exportation and
by simply converting the rate of ad valorem duty upon it which might be
deemed necessary for revenue purposes into the form of a specific duty.
Such an arrangement could not injure the consumer. If he should pay a
greater amount of duty one year, this would be counterbalanced by a
lesser amount the next, and in the end the aggregate would be the same.

I desire to call your immediate attention to the present condition of
the Treasury, so ably and clearly presented by the Secretary in his
report to Congress, and to recommend that measures be promptly adopted
to enable it to discharge its pressing obligations. The other
recommendations of the report are well worthy of your favorable
consideration.

I herewith transmit to Congress the reports of the Secretaries of War,
of the Navy, of the Interior, and of the Postmaster-General. The
recommendations and suggestions which they contain are highly valuable
and deserve your careful attention.

The report of the Postmaster-General details the circumstances under
which Cornelius Vanderbilt, on my request, agreed in the month of July
last to carry the ocean mails between our Atlantic and Pacific coasts.
Had he not thus acted this important intercommunication must have been
suspended, at least for a season. The Postmaster-General had no power to
make him any other compensation than the postages on the mail matter
which he might carry. It was known at the time that these postages would
fall far short of an adequate compensation, as well as of the sum which
the same service had previously cost the Government. Mr. Vanderbilt, in
a commendable spirit, was willing to rely upon the justice of Congress
to make up the deficiency, and I therefore recommend that an
appropriation may be granted for this purpose.

I should do great injustice to the Attorney-General were I to omit the
mention of his distinguished services in the measures adopted and
prosecuted by him for the defense of the Government against numerous and
unfounded claims to land in California purporting to have been made by
the Mexican Government previous to the treaty of cession. The successful
opposition to these claims has saved the United States public property
worth many millions of dollars and to individuals holding title under
them to at least an equal amount.

It has been represented to me from sources which I deem reliable that
the inhabitants in several portions of Kansas have been reduced nearly
to a state of starvation on account of the almost total failure of their
crops, whilst the harvests in every other portion of the country have
been abundant. The prospect before them for the approaching winter is
well calculated to enlist the sympathies of every heart. The destitution
appears to be so general that it can not be relieved by private
contributions, and they are in such indigent circumstances as to be
unable to purchase the necessaries of life for themselves. I refer the
subject to Congress. If any constitutional measure for their relief can
be devised, I would recommend its adoption.

I cordially commend to your favorable regard the interests of the people
of this District. They are eminently entitled to your consideration,
especially since, unlike the people of the States, they can appeal to no
government except that of the Union.

***

State of the Union Address
Abraham Lincoln
December 3, 1861

Fellow-Citizens of the Senate and House of Representatives:

In the midst of unprecedented political troubles we have cause of great
gratitude to God for unusual good health and most abundant harvests.

You will not be surprised to learn that in the peculiar exigencies of
the times our intercourse with foreign nations has been attended with
profound solicitude, chiefly turning upon our own domestic affairs.

A disloyal portion of the American people have during the whole year
been engaged in an attempt to divide and destroy the Union. A nation
which endures factious domestic division is exposed to disrespect
abroad, and one party, if not both, is sure sooner or later to invoke
foreign intervention.

Nations thus tempted to interfere are not always able to resist the
counsels of seeming expediency and ungenerous ambition, although
measures adopted under such influences seldom fail to be unfortunate and
injurious to those adopting them.

The disloyal citizens of the United States who have offered the ruin of
our country in return for the aid and comfort which they have invoked
abroad have received less patronage and encouragement than they probably
expected. If it were just to suppose, as the insurgents have seemed to
assume, that foreign nations in this case, discarding all moral, social,
and treaty obligations, would act solely and selfishly for the most
speedy restoration of commerce, including especially the acquisition of
cotton, those nations appear as yet not to have seen their way to their
object more directly or clearly through the destruction than through the
preservation of the Union. If we could dare to believe that foreign
nations are actuated by no higher principle than this, I am quite sure a
sound argument could be made to show them that they can reach their aim
more readily and easily by aiding to crush this rebellion than by giving
encouragement to it.

The principal lever relied on by the insurgents for exciting foreign
nations to hostility against us, as already intimated, is the
embarrassment of commerce. Those nations, however, not improbably saw
from the first that it was the Union which made as well our foreign as
our domestic commerce. They can scarcely have failed to perceive that
the effort for disunion produces the existing difficulty, and that one
strong nation promises more durable peace and a more extensive,
valuable, and reliable commerce than can the same nation broken into
hostile fragments.

It is not my purpose to review our discussions with foreign states,
because, whatever might be their wishes or dispositions, the integrity
of our country and the stability of our Government mainly depend not
upon them, but on the loyalty, virtue, patriotism, and intelligence of
the American people. The correspondence itself, with the usual
reservations, is herewith submitted.

I venture to hope it will appear that we have practiced prudence and
liberality toward foreign powers, averting causes of irritation and with
firmness maintaining our own rights and honor.

Since, however, it is apparent that here, as in every other state,
foreign dangers necessarily attend domestic difficulties, I recommend
that adequate and ample measures be adopted for maintaining the public
defenses on every side. While under this general recommendation
provision for defending our seacoast line readily occurs to the mind, I
also in the same connection ask the attention of Congress to our great
lakes and rivers. It is believed that some fortifications and depots of
arms and munitions, with harbor and navigation improvements, all at
well-selected points upon these, would be of great importance to the
national defense and preservation. I ask attention to the views of the
Secretary of War, expressed in his report, upon the same general
subject.  I deem it of importance that the loyal regions of east
Tennessee and western North Carolina should be connected with Kentucky
and other faithful parts of the Union by railroad. I therefore
recommend, as a military measure, that Congress provide for the
construction of such road as speedily as possible. Kentucky no doubt
will cooperate, and through her legislature make the most judicious
selection of a line. The northern terminus must connect with some
existing railroad, and whether the route shall be from Lexington or
Nicholasville to the Cumberland Gap, or from Lebanon to the Tennessee
line, in the direction of Knoxville, or on some still different line,
can easily be determined. Kentucky and the General Government
cooperating, the work can be completed in a very short time, and when
done it will be not only of vast present usefulness, but also a valuable
permanent improvement, worth its cost in all the future.

Some treaties, designed chiefly for the interests of commerce, and
having no grave political importance, have been negotiated, and will be
submitted to the Senate for their consideration.

Although we have failed to induce some of the commercial powers to adopt
a desirable melioration of the rigor of maritime war, we have removed
all obstructions from the way of this humane reform except such as are
merely of temporary and accidental occurrence.

I invite your attention to the correspondence between Her Britannic
Majesty's minister accredited to this Government and the Secretary of
State relative to the detention of the British ship Perthshire in June
last by the United States steamer Massachusetts for a supposed breach of
the blockade. As this detention was occasioned by an obvious
misapprehension of the facts, and as justice requires that we should
commit no belligerent act not rounded in strict right as sanctioned by
public law, I recommend that an appropriation be made to satisfy the
reasonable demand of the owners of the vessel for her detention.

I repeat the recommendation of my predecessor in his annual message to
Congress in December last in regard to the disposition of the surplus
which will probably remain after satisfying the claims of American
citizens against China, pursuant to the awards of the commissioners
under the act of the 3d of March, 1859. If, however, it should not be
deemed advisable to carry that recommendation into effect, I would
suggest that authority be given for investing the principal, over the
proceeds of the surplus referred to, in good securities, with a view to
the satisfaction of such other just claims of our citizens against China
as are not unlikely to arise hereafter in the course of our extensive
trade with that Empire.

By the act of the 5th of August last Congress authorized the President
to instruct the commanders of suitable vessels to defend themselves
against and to capture pirates. This authority has been exercised in a
single instance only. For the more effectual protection of our extensive
and valuable commerce in the Eastern seas especially, it seems to me
that it would also be advisable to authorize the commanders of sailing
vessels to recapture any prizes which pirates may make of United States
vessels and their cargoes, and the consular courts now established by
law in Eastern countries to adjudicate the cases in the event that this
should not be objected to by the local authorities.

If any good reason exists why we should persevere longer in withholding
our recognition of the independence and sovereignty of Hayti and
Liberia, I am unable to discern it. Unwilling, however, to inaugurate a
novel policy in regard to them without the approbation of Congress, I
submit for your consideration the expediency of an appropriation for
maintaining a charge d'affaires near each of those new States. It does
not admit of doubt that important commercial advantages might be secured
by favorable treaties with them.

The operations of the Treasury during the period which has elapsed since
your adjournment have been conducted with signal success. The patriotism
of the people has placed at the disposal of the Government the large
means demanded by the public exigencies. Much of the national loan has
been taken by citizens of the industrial classes, whose confidence in
their country's faith and zeal for their country's deliverance from
present peril have induced them to contribute to the support of the
Government the whole of their limited acquisitions. This fact imposes
peculiar obligations to economy in disbursement and energy in action.

The revenue from all sources, including loans, for the financial year
ending on the 30th of June, 1861, was $86,835,900.27, and the
expenditures for the same period, including payments on account of the
public debt, were $84,578,834.47, leaving a balance in the Treasury on
the 1st of July of 52,257,065.80. For the first quarter of the financial
year ending on the 30th of September, 1861, the receipts from all
sources, including the balance of the 1st of July, were $102,532,509.27,
and the expenses $98,239,733.09, leaving a balance on the 1st of
October, 1861, of $4,292,776.18.

Estimates for the remaining three quarters of the year and for the
financial year 1863, together with his views of ways and means for
meeting the demands contemplated by them, will be submitted to Congress
by the Secretary of the Treasury. It is gratifying to know that the
expenditures made necessary by the rebellion are not beyond the
resources of the loyal people, and to believe that the same patriotism
which has thus far sustained the Government will continue to sustain it
till peace and union shall again bless the land.

I respectfully refer to the report of the Secretary of War for
information respecting the numerical strength of the Army and for
recommendations having in view an increase of its efficiency and the
well-being of the various branches of the service intrusted to his care.
It is gratifying to know that the patriotism of the people has proved
equal to the occasion, and that the number of troops tendered greatly
exceeds the force which Congress authorized me to call into the field.

I refer with pleasure to those portions of his report which make
allusion to the creditable degree of discipline already attained by our
troops and to the excellent sanitary condition of the entire Army.

The recommendation of the Secretary for an organization of the militia
upon a uniform basis is a subject of vital importance to the future
safety of the country, and is commended to the serious attention of
Congress.

The large addition to the Regular Army, in connection with the defection
that has so considerably diminished the number of its officers, gives
peculiar importance to his recommendation for increasing the corps of
cadets to the greatest capacity of the Military Academy.

By mere omission, I presume, Congress has failed to provide chaplains
for hospitals occupied by volunteers. This subject was brought to my
notice, and I was induced to draw up the form of a letter, one copy of
which, properly addressed, has been delivered to each of the persons,
and at the dates respectively named and stated in a schedule, containing
also the form of the letter marked A, and herewith transmitted.

These gentlemen, I understand, entered upon the duties designated at the
times respectively stated in the schedule, and have labored faithfully
therein ever since. I therefore recommend that they be compensated at
the same rate as chaplains in the Army. I further suggest that general
provision be made for chaplains to serve at hospitals, as well as with
regiments.

The report of the Secretary of the Navy presents in detail the
operations of that branch of the service, the activity and energy which
have characterized its administration, and the results of measures to
increase its efficiency and power. Such have been the additions, by
construction and purchase, that it may almost be said a navy has been
created and brought into service since our difficulties commenced.

Besides blockading our extensive coast, squadrons larger than ever
before assembled under our flag have been put afloat and performed deeds
which have increased our naval renown.

I would invite special attention to the recommendation of the Secretary
for a more perfect organization of the Navy by introducing additional
grades in the service.

The present organization is defective and unsatisfactory, and the
suggestions submitted by the Department will, it is believed, if
adopted, obviate the difficulties alluded to, promote harmony, and
increase the efficiency of the Navy.

There are three vacancies on the bench of the Supreme Court--two by the
decease of Justices Daniel and McLean and one by the resignation of
Justice Campbell. I have so far forborne making nominations to fill
these vacancies for reasons which I will now state. Two of the outgoing
judges resided within the States now overrun by revolt, so that if
successors were appointed in the same localities they could not now
serve upon their circuits; and many of the most competent men there
probably would not take the personal hazard of accepting to serve, even
here, upon the Supreme bench. I have been unwilling to throw all the
appointments northward, thus disabling myself from doing justice to the
South on the return of peace; although I may remark that to transfer to
the North one which has heretofore been in the South would not, with
reference to territory and population, be unjust.

During the long and brilliant judicial career of Judge McLean his
circuit grew into an empire altogether too large for any one judge to
give the courts therein more than a nominal attendance--rising in
population from 1,470,018 in 1830 to 6,151,405 in 1860.

Besides this, the country generally has outgrown our present judicial
system. If uniformity was at all intended, the system requires that all
the States shall be accommodated with circuit courts, attended by
Supreme judges, while, in fact, Wisconsin, Minnesota, Iowa, Kansas,
Florida, Texas, California, and Oregon have never had any such courts.
Nor can this well be remedied without a change in the system, because
the adding of judges to the Supreme Court, enough for the accommodation
of all parts of the country with circuit courts, would create a court
altogether too numerous for a judicial body of any sort. And the evil,
if it be one, will increase as new States come into the Union. Circuit
courts are useful or they are not useful. If useful, no State should be
denied them; if not useful, no State should have them. Let them be
provided for all or abolished as to all.

Three modifications occur to me, either of which, I think, would be an
improvement upon our present system. Let the Supreme Court be of
convenient number in every event; then, first, let the whole country be
divided into circuits of convenient size, the Supreme judges to serve in
a number of them corresponding to their own number, and independent
circuit judges be provided for all the rest; or, secondly, let the
Supreme judges be relieved from circuit duties and circuit judges
provided for all the circuits; or, thirdly, dispense with circuit courts
altogether, leaving the judicial functions wholly to the district courts
and an independent Supreme Court.

I respectfully recommend to the consideration of Congress the present
condition of the statute laws, with the hope that Congress will be able
to find an easy remedy for many of the inconveniences and evils which
constantly embarrass those engaged in the practical administration of
them. Since the organization of the Government Congress has enacted some
5,000 acts and joint resolutions, which fill more than 6,000 closely
printed pages and are scattered through many volumes. Many of these acts
have been drawn in haste and without sufficient caution, so that their
provisions are often obscure in themselves or in conflict with each
other, or at least so doubtful as to render it very difficult for even
the best-informed persons to ascertain precisely what the statute law
really is.

It seems to me very important that the statute laws should be made as
plain and intelligible as possible, and be reduced to as small a compass
as may consist with the fullness and precision of the will of the
Legislature and the perspicuity of its language. This well done would, I
think, greatly facilitate the labors of those whose duty it is to assist
in the administration of the laws, and would be a lasting benefit to the
people, by placing before them in a more accessible and intelligible
form the laws which so deeply concern their interests and their duties.

I am informed by some whose opinions I respect that all the acts of
Congress now in force and of a permanent and general nature might be
revised and rewritten so as to be embraced in one volume (or at most two
volumes) of ordinary and convenient size; and I respectfully recommend
to Congress to consider of the subject, and if my suggestion be approved
to devise such plan as to their wisdom shall seem most proper for the
attainment of the end proposed.

One of the unavoidable consequences of the present insurrection is the
entire suppression in many places of all the ordinary means of
administering civil justice by the officers and in the forms of existing
law. This is the case, in whole or in part, in all the insurgent States;
and as our armies advance upon and take possession of parts of those
States the practical evil becomes more apparent. There are no courts nor
officers to whom the citizens of other States may apply for the
enforcement of their lawful claims against citizens of the insurgent
States, and there is a vast amount of debt constituting such claims.
Some have estimated it as high as $200,000,000, due in large part from
insurgents in open rebellion to loyal citizens who are even now making
great sacrifices in the discharge of their patriotic duty to support the
Government.

Under these circumstances I have been urgently solicited to establish by
military power courts to administer summary justice in such cases I have
thus far declined to do it, not because I had any doubt that the end
proposed--the collection of the debts--was just and right in itself, but
because I have been unwilling to go beyond the pressure of necessity in
the unusual exercise of power. But the powers of Congress, I suppose,
are equal to the anomalous occasion, and therefore I refer the whole
matter to Congress, with the hope that a plan may be devised for the
administration of justice in all such parts of the insurgent States and
Territories as may be under the control of this Government, whether by a
voluntary return to allegiance and order or by the power of our arms;
this, however, not to be a permanent institution, but a temporary
substitute, and to cease as soon as the ordinary courts can be
reestablished in peace.

It is important that some more convenient means should be provided, if
possible, for the adjustment of claims against the Government,
especially in view of their increased number by reason of the war. It is
as much the duty of Government to render prompt justice against itself
in favor of citizens as it is to administer the same between private
individuals. The investigation and adjudication of claims in their
nature belong to the judicial department. Besides, it is apparent that
the attention of Congress will be more than usually engaged for some
time to come with great national questions. It was intended by the
organization of the Court of Claims mainly to remove this branch of
business from the halls of Congress: but while the court has proved to
be an effective and valuable means of investigation, it in great degree
fails to effect the object of its creation for want of power to make its
judgments final.

Fully aware of the delicacy, not to say the danger, of the subject, I
commend to your careful consideration whether this power of making
judgments final may not properly be given to the court, reserving the
right of appeal on questions of law to the Supreme Court, with such
other provisions as experience may have shown to be necessary.

I ask attention to the report of the Postmaster-General, the following
being a summary statement of the condition of the Department:

The revenue from all sources during the fiscal year ending June 30,
1861, including the annual permanent appropriation of $700,000 for the
transportation of "free mail matter," was $9,049,296.40, being about 2
per cent less than the revenue for 1860.

The expenditures were $13,606,759.11, showing a decrease of more than 8
per cent as compared with those of the previous year and leaving an
excess of expenditure over the revenue for the last fiscal year of
$4,557,462.71.

The gross revenue for the year ending June 30, 1863, is estimated at an
increase of 4 per cent on that of 1861, making $8,683,000, to which
should be added the earnings of the Department in carrying free matter,
viz, $700,000, making $9,383,000.

The total expenditures for 1863 are estimated at $12,528,000, leaving an
estimated deficiency of $3,145,000 to be supplied from the Treasury in
addition to the permanent appropriation.

The present insurrection shows, I think, that the extension of this
District across the Potomac River at the time of establishing the
capital here was eminently wise, and consequently that the
relinquishment of that portion of it which lies within the State of
Virginia was unwise and dangerous. I submit for your consideration the
expediency of regaining that part of the District and the restoration of
the original boundaries thereof through negotiations with the State of
Virginia.

The report of the Secretary of the Interior, with the accompanying
documents, exhibits the condition of the several branches of the public
business pertaining to that Department. The depressing influences of the
insurrection have been specially felt in the operations of the Patent
and General Land Offices. The cash receipts from the sales of public
lands during the past year have exceeded the expenses of our land system
only about $200,000. The sales have been entirely suspended in the
Southern States, while the interruptions to the business of the country
and the diversion of large numbers of men from labor to military service
have obstructed settlements in the new States and Territories of the
Northwest.

The receipts of the Patent Office have declined in nine months about
$100,000, rendering a large reduction of the force employed necessary to
make it self-sustaining.

The demands upon the Pension Office will be largely increased by the
insurrection. Numerous applications for pensions, based upon the
casualties of the existing war, have already been made. There is reason
to believe that many who are now upon the pension rolls and in receipt
of the bounty of the Government are in the ranks of the insurgent army
or giving them aid and comfort. The Secretary of the Interior has
directed a suspension of the payment of the pensions of such persons
upon proof of their disloyalty. I recommend that Congress authorize that
officer to cause the names of such persons to be stricken from the
pension rolls.

The relations of the Government with the Indian tribes have been greatly
disturbed by the insurrection, especially in the southern
superintendency and in that of New Mexico. The Indian country south of
Kansas is in the possession of insurgents from Texas and Arkansas. The
agents of the United States appointed since the 4th of March for this
superintendency have been unable to reach their posts, while the most of
those who were in office before that time have espoused the
insurrectionary cause, and assume to exercise the powers of agents by
virtue of commissions from the insurrectionists. It has been stated in
the public press that a portion of those Indians have been organized as
a military force and are attached to the army of the insurgents.
Although the Government has no official information upon this subject,
letters have been written to the Commissioner of Indian Affairs by
several prominent chiefs giving assurance of their loyalty to the United
States and expressing a wish for the presence of Federal troops to
protect them. It is believed that upon the repossession of the country
by the Federal forces the Indians will readily cease all hostile
demonstrations and resume their former relations to the Government.

Agriculture, confessedly the largest interest of the nation, has not a
department nor a bureau, but a clerkship only, assigned to it in the
Government. While it is fortunate that this great interest is so
independent in its nature as to not have demanded and extorted more from
the Government, I respectfully ask Congress to consider whether
something more can not be given voluntarily with general advantage.

Annual reports exhibiting the condition of our agriculture, commerce,
and manufactures would present a fund of information of great practical
value to the country. While I make no suggestion as to details, I
venture the opinion that an agricultural and statistical bureau might
profitably be organized.

The execution of the laws for the suppression of the African slave trade
has been confided to the Department of the Interior. It is a subject of
gratulation that the efforts which have been made for the suppression of
this inhuman traffic have been recently attended with unusual success.
Five vessels being fitted out for the slave trade have been seized and
condemned. Two mates of vessels engaged in the trade and one person in
equipping a vessel as a slaver have been convicted and subjected to the
penalty of fine and imprisonment, and one captain, taken with a cargo of
Africans on board his vessel, has been convicted of the highest grade of
offense under our laws, the punishment of which is death.

The Territories of Colorado, Dakota, and Nevada, created by the last
Congress, have been organized, and civil administration has been
inaugurated therein under auspices especially gratifying when it is
considered that the leaven of treason was found existing in some of
these new countries when the Federal officers arrived there.

The abundant natural resources of these Territories, with the security
and protection afforded by organized government, will doubtless invite
to them a large immigration when peace shall restore the business of the
country to its accustomed channels. I submit the resolutions of the
legislature of Colorado, which evidence the patriotic spirit of the
people of the Territory. So far the authority of the United States has
been upheld in all the Territories, as it is hoped it will be in the
future. I commend their interests and defense to the enlightened and
generous care of Congress.

I recommend to the favorable consideration of Congress the interests of
the District of Columbia. The insurrection has been the cause of much
suffering and sacrifice to its inhabitants, and as they have no
representative in Congress that body should not overlook their just
claims upon the Government.

At your late session a joint resolution was adopted authorizing the
President to take measures for facilitating a proper representation of
the industrial interests of the United States at the exhibition of the
industry of all nations to be holden at London in the year 1862. I
regret to say I have been unable to give personal attention to this
subject--a subject at once so interesting in itself and so extensively
and intimately connected with the material prosperity of the world.
Through the Secretaries of State and of the Interior a plan or system
has been devised and partly matured, and which will be laid before you.

Under and by virtue of the act of Congress entitled "An act to
confiscate property used for insurrectionary purposes," approved August
6, 1861, the legal claims of certain persons to the labor and service of
certain other persons have become forfeited, and numbers of the latter
thus liberated are already dependent on the United States and must be
provided for in some way. Besides this, it is not impossible that some
of the States will pass similar enactments for their own benefit
respectively, and by operation of which persons of the same class will
be thrown upon them for disposal. In such case I recommend that Congress
provide for accepting such persons from such States, according to some
mode of valuation, in lieu, pro tanto, of direct taxes, or upon some
other plan to be agreed on with such States respectively; that such
persons, on such acceptance by the General Government, be at once deemed
free, and that in any event steps be taken for colonizing both classes
(or the one first mentioned if the other shall not be brought into
existence) at some place or places in a climate congenial to them. It
might be well to consider, too, whether the free colored people already
in the United States could not, so far as individuals may desire, be
included in such colonization.

To carry out the plan of colonization may involve the acquiring of
territory, and also the appropriation of money beyond that to be
expended in the territorial acquisition. Having practiced the
acquisition of territory for nearly sixty years, the question of
constitutional power to do so is no longer an open one with us. The
power was questioned at first by Mr. Jefferson, who, however, in the
purchase of Louisiana, yielded his scruples on the plea of great
expediency. If it be said that the only legitimate object of acquiring
territory is to furnish homes for white men, this measure effects that
object, for the emigration of colored men leaves additional room for
white men remaining or coming here. Mr. Jefferson, however, placed the
importance of procuring Louisiana more on political and commercial
grounds than on providing room for population.

On this whole proposition, including the appropriation of money with the
acquisition of territory, does not the expediency amount to absolute
necessity--that without which the Government itself can not be
perpetuated?

The war continues. In considering the policy to be adopted for
suppressing the insurrection I have been anxious and careful that the
inevitable conflict for this purpose shall not degenerate into a violent
and remorseless revolutionary struggle. I have therefore in every case
thought it proper to keep the integrity of the Union prominent as the
primary object of the contest on our pan, leaving all questions which
are not of vital military importance to the more deliberate action of
the Legislature.

In the exercise of my best discretion I have adhered to the blockade of
the ports held by the insurgents, instead of putting in force by
proclamation the law of Congress enacted .at the late session for
closing those ports.

So also, obeying the dictates of prudence, as well as the obligations of
law, instead of transcending I have adhered to the act of Congress to
confiscate property used for insurrectionary purposes. If a new law upon
the same subject shall be proposed, its propriety will be duly
considered. The Union must be preserved, and hence all indispensable
means must be employed. We should not be in haste to determine that
radical and extreme measures, which may reach the loyal as well as the
disloyal, are indispensable.

The inaugural address at the beginning of the Administration and the
message to Congress at the late special session were both mainly devoted
to the domestic controversy out of which the insurrection and consequent
war have sprung. Nothing now occurs to add or subtract to or from the
principles or general purposes stated and expressed in those documents.

The last ray of hope for preserving the Union peaceably expired at the
assault upon Fort Sumter, and a general review of what has occurred
since may not be unprofitable. What was painfully uncertain then is much
better defined and more distinct now, and the progress of events is
plainly in the right direction. The insurgents confidently claimed a
strong support from north of Mason and Dixon's line, and the friends of
the Union were not free from apprehension on the point. This, however,
was soon settled definitely, and on the right side. South of the line
noble little Delaware led off right from the first. Maryland was made to
seem against the Union. Our soldiers were assaulted, bridges were
burned, and railroads torn up within her limits, and we were many days
at one time without the ability to bring a single regiment over her soil
to the capital. Now her bridges and railroads are repaired and open to
the Government; she already gives seven regiments to the cause of the
Union, and none to the enemy; and her people, at a regular election,
have sustained the Union by a larger majority and a larger aggregate
vote than they ever before gave to any candidate or any question.
Kentucky, too, for some time in doubt, is now decidedly and, I think,
unchangeably ranged on the side of the Union. Missouri is comparatively
quiet, and, I believe, can not again be overrun by the insurrectionists.
These three States of Maryland, Kentucky, and Missouri, neither of which
would promise a single soldier at first, have now an aggregate of not
less than 40,000 in the field for the Union, while of their citizens
certainly not more than a third of that number, and they of doubtful
whereabouts and doubtful existence, are in arms against us. After a
somewhat bloody struggle of months, winter closes on the Union people of
western Virginia, leaving them masters of their own country.

An insurgent force of about 1,500, for months dominating the narrow
peninsular region constituting the counties of Accomac and Northampton,
and known as Eastern Shore of Virginia, together with some contiguous
parts of Maryland, have laid down their arms, and the people there have
renewed their allegiance to and accepted the protection of the old flag.
This leaves no armed insurrectionist north of the Potomac or east of the
Chesapeake.

Also we have obtained a footing at each of the isolated points on the
southern coast of Hatteras, Port Royal, Tybee Island (near Savannah),
and Ship Island; and we likewise have some general accounts of popular
movements in behalf of the Union in North Carolina and Tennessee.

These things demonstrate that the cause of the Union is advancing
steadily and certainly southward.

Since your last adjournment Lieutenant-General Scott has retired from
the head of the Army. During his long life the nation has not been
unmindful of his merit; yet on calling to mind how faithfully, ably, and
brilliantly he has served the country, from a time far back in our
history, when few of the now living had been born, and thenceforward
continually, I can not but think we are still his debtors. I submit,
therefore, for your consideration what further mark of recognition is
due to him, and to ourselves as a grateful people.

With the retirement of General Scott came the Executive duty of
appointing in his stead a General in Chief of the Army. It is a
fortunate circumstance that neither in council nor country was there, so
far as I know, any difference of opinion as to the proper person to be
selected. The retiring chief repeatedly expressed his judgment in favor
of General McClellan for the position, and in this the nation seemed to
give a unanimous concurrence. The designation of General McClellan is
therefore in considerable degree the selection of the country as well as
of the Executive, and hence there is better reason to hope there will be
given him the confidence and cordial support thus by fair implication
promised, and without which he can not with so full efficiency serve the
country.

It has been said that one bad general is better than two good ones, and
the saying is true if taken to mean no more than that an army is better
directed by a single mind, though inferior, than by two superior ones at
variance and cross-purposes with each other.

And the same is true in all joint operations wherein those engaged can
have none but a common end in view and can differ only as to the choice
of means. In a storm at sea no one on board can wish the ship to sink,
and yet not unfrequently all go down together because too many will
direct and no single mind can be allowed to control.

It continues to develop that the insurrection is largely, if not
exclusively, a war upon the first principle of popular government--the
rights of the people. Conclusive evidence of this is found in the most
grave and maturely considered public documents, as well as in the
general tone of the insurgents. In those documents we find the
abridgment of the existing right of suffrage and the denial to the
people of all right to participate in the selection of public officers
except the legislative boldly advocated, with labored arguments to prove
that large control of the people in government is the source of all
political evil. Monarchy itself is sometimes hinted at as a possible
refuge from the power of the people.

In my present position I could scarcely be justified were I to omit
raising a warning voice against this approach of returning despotism.

It is not needed nor fitting here that a general argument should be made
in favor of popular institutions, but there is one point, with its
connections, not so hackneyed as most others, to which I ask a brief
attention. It is the effort to place capital on an equal footing with,
if not above, labor in the structure of government. It is assumed that
labor is available only in connection with capital; that nobody labors
unless somebody else, owning capital, somehow by the use of it induces
him to labor. This assumed, it is next considered whether it is best
that capital shall hire laborers, and thus induce them to work by their
own consent, or buy them and drive them to it without their consent.
Having proceeded so far, it is naturally concluded that all laborers are
either hired laborers or what we call slaves. And further, it is assumed
that whoever is once a hired laborer is fixed in that condition for
life.

Now there is no such relation between capital and labor as assumed, nor
is there any such thing as a free man being fixed for life in the
condition of a hired laborer. Both these assumptions are false, and all
inferences from them are groundless.

Labor is prior to and independent of capital. Capital is only the fruit
of labor, and could never have existed if labor had not first existed.
Labor is the superior of capital, and deserves much the higher
consideration. Capital has its rights, which are as worthy of protection
as any other rights. Nor is it denied that there is, and probably always
will be, a relation between labor and capital producing mutual benefits.
The error is in assuming that the whole labor of community exists within
that relation. A few men own capital, and that few avoid labor
themselves, and with their capital hire or buy another few to labor for
them. A large majority belong to neither class--neither work for others
nor have others working for them. In most of the Southern States a
majority of the whole people of all colors are neither slaves nor
masters, while in the Northern a large majority are neither hirers nor
hired. Men, with their families--wives, sons, and daughters--work for
themselves on their farms, in their houses, and in their shops, taking
the whole product to themselves, and asking no favors of capital on the
one hand nor of hired laborers or slaves on the other. It is not
forgotten that a considerable number of persons mingle their own labor
with capital; that is, they labor with their own hands and also buy or
hire others to labor for them; but this is only a mixed and not a
distinct class. No principle stated is disturbed by the existence of
this mixed class.

Again, as has already been said, there is not of necessity any such
thing as the free hired laborer being fixed to that condition for life.
Many independent men everywhere in these States a few years back in
their lives were hired laborers. The prudent, penniless beginner in the
world labors for wages awhile, saves a surplus with which to buy tools
or land for himself, then labors on his own account another while, and
at length hires another new beginner to help him. This is the just and
generous and prosperous system which opens the way to all, gives hope to
all, and consequent energy and progress and improvement of condition to
all. No men living are more worthy to be trusted than those who toil up
from poverty; none less inclined to take or touch aught which they have
not honestly earned. Let them beware of surrendering a political power
which they already possess, and which if surrendered will surely be used
to close the door of advancement against such as they and to fix new
disabilities and burdens upon them till all of liberty shall be lost.

From the first taking of our national census to the last are seventy
years, and we find our population at the end of the period eight times
as great as it was at the beginning. The increase of those other things
which men deem desirable has been even greater. We thus have at one view
what the popular principle, applied to Government through the machinery,
of the States and the Union, has produced in a given time, and also what
if firmly maintained it promises for the future. There are already among
us those who if the Union be preserved will live to see it contain
250,000,000. The struggle of to-day is not altogether for to-day; it is
for a vast future also. With a reliance on Providence all the more firm
and earnest, let us proceed in the great task which events have devolved
upon us.

***

State of the Union Address
Abraham Lincoln
December 1, 1862

Fellow-Citizens of the Senate and House of Representatives:

Since your last annual assembling another year of health and bountiful
harvests has passed, and while it has not pleased the Almighty to bless
us with a return of peace, we can but press on, guided by the best light
He gives us, trusting that in His own good time and wise way all will
yet be well.

The correspondence touching foreign affairs which has taken place during
the last year is herewith submitted, in virtual compliance with a
request to that effect made by the House of Representatives near the
close of the last session of Congress. If the condition of our relations
with other nations is less gratifying than it has usually been at former
periods, it is certainly more satisfactory than a nation so unhappily
distracted as we are might reasonably have apprehended. In the month of
June last there were some grounds to expect that the maritime powers
which at the beginning of our domestic difficulties so unwisely and
unnecessarily, as we think, recognized the insurgents as a belligerent
would soon recede from that position, which has proved only less
injurious to themselves than to our own country. But the temporary
reverses which afterwards befell the national arms, and which were
exaggerated by our own disloyal citizens abroad, have hitherto delayed
that act of simple justice.

The civil war, which has so radically changed for the moment the
occupations and habits of the American people, has necessarily disturbed
the social condition and affected very deeply the prosperity of the
nations with which we have carried on a commerce that has been steadily
increasing throughout a period of half a century. It has at the same
time excited political ambitions and apprehensions which have produced a
profound agitation throughout the civilized world. In this unusual
agitation we have forborne from taking part in any controversy between
foreign states and between parties or factions in such states. We have
attempted no propagandism and acknowledged no revolution. But we have
left to every nation the exclusive conduct and management of its own
affairs. Our struggle has been, of course, contemplated by foreign
nations with reference less to its own merits than to its supposed and
often exaggerated effects and consequences resulting to those nations
themselves. Nevertheless, complaint on the part of this Government, even
if it were just, would certainly be unwise. The treaty with Great
Britain for the suppression of the slave trade has been put into
operation with a good prospect of complete success. It is an occasion of
special pleasure to acknowledge that the execution of it on the part of
Her Majesty's Government has been marked with a jealous respect for the
authority of the United States and the rights of their moral and loyal
citizens.

The convention with Hanover for the abolition of the Stade dues has been
carried into full effect under the act of Congress for that purpose. A
blockade of 3,000 miles of seacoast could not be established and
vigorously enforced in a season of great commercial activity like the
present without committing occasional mistakes and inflicting
unintentional injuries upon foreign nations and their subjects. A civil
war occurring in a country, where foreigners reside and carry on trade
under treaty stipulations is necessarily fruitful of complaints of the
violation of neutral rights. All such collisions tend to excite
misapprehensions, and possibly to produce mutual reclamations between
nations which have a common interest in preserving peace and friendship.
In clear cases of these kinds I have so far as possible heard and
redressed complaints which have been presented by friendly powers. There
is still, however, a large and an augmenting number of doubtful cases
upon which the Government is unable to agree with the governments whose
protection is demanded by the claimants. There are, moreover, many cases
in which the United States or their citizens suffer wrongs from the
naval or military authorities of foreign nations which the governments
of those states are not at once prepared to redress. I have proposed to
some of the foreign states thus interested mutual conventions to examine
and adjust such complaints. This proposition has been made especially to
Great Britain, to France, to Spain, and to Prussia. In each case it has
been kindly received, but has not yet been formally adopted.

I deem it my duty to recommend an appropriation in behalf of the owners
of the Norwegian bark Admiral P. Tordenskiold, which vessel was in May,
1861, prevented by the commander of the blockading force off Charleston
from leaving that port with cargo, notwithstanding a similar privilege
had shortly before been granted to an English vessel. I have directed
the Secretary of State to cause the papers in the case to be
communicated to the proper committees.

Applications have been made to me by many free Americans of African
descent to favor their emigration, with a view to such colonization as
was contemplated in recent acts of Congress. Other parties, at home and
abroad--some from interested motives, others upon patriotic
considerations, and still others influenced by philanthropic
sentiments--have suggested similar measures, while, on the other hand,
several of the Spanish American Republics have protested against the
sending of such colonies to their respective territories. Under these
circumstances I have declined to move any such colony to any state
without first obtaining the consent of its government, with an agreement
on its part to receive and protect such emigrants in all the rights of
freemen; and I have at the same time offered to the several States
situated within the Tropics, or having colonies there, to negotiate with
them, subject to the advice and consent of the Senate, to favor the
voluntary emigration of persons of that class to their respective
territories, upon conditions which shall be equal, just, and humane.
Liberia and Hayti are as yet the only countries to which colonists of
African descent from here could go with certainty of being received and
adopted as citizens; and I regret to say such persons contemplating
colonization do not seem so willing to migrate to those countries as to
some others, nor so willing as I think their interest demands. I
believe, however, opinion among them in this respect is improving, and
that ere long there will be an augmented and considerable migration to
both these countries from the United States.

The new commercial treaty between the United States and the Sultan of
Turkey has been carried into execution.

A commercial and consular treaty has been negotiated, subject to the
Senate's consent, with Liberia, and a similar negotiation is now pending
with the Republic of Hayti. A considerable improvement of the national
commerce is expected to result from these measures. Our relations with
Great Britain, France, Spain, Portugal, Russia, Prussia, Denmark,
Sweden, Austria, the Netherlands, Italy, Rome, and the other European
States remain undisturbed. Very favorable relations also continue to be
maintained with Turkey, Morocco, China, and Japan.

During the last year there has not only been no change of our previous
relations with the independent States of our own continent, but more
friendly sentiments than have heretofore existed are believed to be
entertained by these neighbors, whose safety and progress are so
intimately connected with our own. This statement especially applies to
Mexico, Nicaragua, Costa Rica, Honduras, Peru, and Chile. The commission
under the convention with the Republic of New Granada closed its session
without having audited and passed upon all the claims which were
submitted to it. A proposition is pending to revive the convention, that
it may be able to do more complete justice. The joint commission between
the United States and the Republic of Costa Rica has completed its
labors and submitted its report. I have favored the project for
connecting the United States with Europe by an Atlantic telegraph, and a
similar project to extend the telegraph from San Francisco to connect by
a Pacific telegraph with the line which is being extended across the
Russian Empire. The Territories of the United States, with unimportant
exceptions have remained undisturbed by the civil war; and they are
exhibiting such evidence of prosperity as justifies an expectation that
some of them will soon be in a condition to be organized as States and
be constitutionally admitted into the Federal Union.

The immense mineral resources of some of those Territories ought to be
developed as rapidly as possible. Every step in that direction would
have a tendency to improve the revenues of the Government and diminish
the burdens of the people. It is worthy of your serious consideration
whether some extraordinary measures to promote that end can not be
adopted. The means which suggests itself as most likely to be effective
is a scientific exploration of the mineral regions in those Territories
with a view to the publication of its results at home and in foreign
countries--results which can not fail to be auspicious.

The condition of the finances will claim your most diligent
consideration. The vast expenditures incident to the military and naval
operations required for the suppression of the rebellion have hitherto
been met with a promptitude and certainty unusual in similar
circumstances, and the public credit has been fully maintained. The
continuance of the war, however, and the increased disbursements made
necessary by the augmented forces now in the field demand your best
reflections as to the best modes of providing the necessary revenue
without injury to business and with the least possible burdens upon
labor.

The suspension of specie payments by the banks soon after the
commencement of your last session made large issues of United States
notes unavoidable. In no other way could the payment of the troops and
the satisfaction of other just demands be so economically or so well
provided for. The judicious legislation of Congress, securing the
receivability of these notes for loans and internal duties and making
them a legal tender for other debts, has made them an universal
currency, and has satisfied, partially at least, and for the time, the
long-felt want of an uniform circulating medium, saving thereby to the
people immense sums in discounts and exchanges.

A return to specie payments, however, at the earliest period compatible
with due regard to all interests concerned should ever be kept in view.
Fluctuations in the value of currency are always injurious, and to
reduce these fluctuations to the lowest possible point will always be a
leading purpose in wise legislation. Convertibility, prompt and certain
convertibility, into coin is generally acknowledged to be the best and
surest safeguard against them; and it is extremely doubtful whether a
circulation of United States notes payable in coin and sufficiently
large for the wants of the people can be permanently, usefully, and
safely maintained.

Is there, then, any other mode in which the necessary provision for the
public wants can be made and the great advantages of a safe and uniform
currency secured?

I know of none which promises so certain results and is at the same time
so unobjectionable as the organization of banking associations, under a
general act of Congress, well guarded in its provisions. To such
associations the Government might furnish circulating notes, on the
security of United States bonds deposited in the Treasury. These notes,
prepared under the supervision of proper officers, being uniform in
appearance and security and convertible always into coin, would at once
protect labor against the evils of a vicious currency and facilitate
commerce by cheap and safe exchanges.

A moderate reservation from the interest on the bonds would compensate
the United States for the preparation and distribution of the notes and
a general supervision of the system, and would lighten the burden of
that part of the public debt employed as securities. The public credit,
moreover, would be greatly improved and the negotiation of new loans
greatly facilitated by the steady market demand for Government bonds
which the adoption of the proposed system would create. It is an
additional recommendation of the measure, of considerable weight, in my
judgment, that it would reconcile as far as possible all existing
interests by the opportunity offered to existing institutions to
reorganize under the act, substituting only the secured uniform national
circulation for the local and various circulation, secured and
unsecured, now issued by them.

The receipts into the treasury from all sources, including loans and
balance from the preceding year, for the fiscal year ending on the 30th
June, 1862, were $583,885,247.06, of which sum $49,056,397.62 were
derived from customs; $1,795,331.73 from the direct tax; from public
lands, $152,203.77; from miscellaneous sources, $931,787.64; from loans
in all forms, $529,692,460.50. The remainder, :$2,257,065.80, was the
balance from last year.

The disbursements during the same period were: For Congressional,
executive, and judicial purposes, $5,939.009.29; for foreign
intercourse, $1,339,710.35; for miscellaneous expenses, including the
mints, loans, Post-Office deficiencies, collection of revenue, and other
like charges, $14,129,771.50; for expenses under the Interior
Department, 985.52; under the War Department, $394,368,407.36; under the
Navy Department, $42,674,569.69; for interest on public debt,
$13,190,324.45; and for payment of public debt, including reimbursement
of temporary loan and redemptions, $96,096,922.09; making an aggregate
of $570,841,700.25, and leaving a balance in the Treasury on the 1st day
of July, 1862, of $13,043,546.81.

It should be observed that the sum of $96,096,922.09, expended for
reimbursements and redemption of public debt, being included also in the
loans made, may be properly deducted both from receipts and
expenditures, leaving the actual receipts for the year $487,788,324.97,
and the expenditures $474,744,778.16.

Other information on the subject of the finances will be found in the
report of the Secretary of the Treasury, to whose statements and views I
invite your most candid and considerate attention.

The reports of the Secretaries of War and of the Navy are herewith
transmitted. These reports, though lengthy, are scarcely more than brief
abstracts of the very numerous and extensive transactions and operations
conducted through those Departments. Nor could I give a summary of them
here upon any principle which would admit of its being much shorter than
the reports themselves. I therefore content myself with laying the
reports before you and asking your attention to them.

It gives me pleasure to report a decided improvement in the financial
condition of the Post-Office Department as compared with several
preceding years. The receipts for the fiscal year 1861 amounted to
$8,349,296.40, which embraced the revenue from all the States of the
Union for three quarters of that year. Notwithstanding the cessation of
revenue from the so-called seceded States during the last fiscal year,
the increase of the correspondence of the loyal States has been
sufficient to produce a revenue during the same year of $8,299,820.90,
being only $50,000 less than was derived from all the States of the
Union during the previous year. The expenditures show a still more
favorable result. The amount expended in 1861 was $13,606,759.11. For
the last year the amount has been reduced to $11,125,364.13, showing a
decrease of about $2,481,000 in the expenditures as compared with the
preceding year, and about $3,750,000 as compared with the fiscal year
1860. The deficiency in the Department for the previous year was
$4,551,966.98. For the last fiscal year it was reduced to $2,112,814.57.
These favorable results are in part owing to the cessation of mail
service in the insurrectionary States and in part to a careful review of
all expenditures in that Department in the interest of economy. The
efficiency of the postal service, it is believed, has also been much
improved. The Postmaster-General has also opened a correspondence
through the Department of State with foreign governments proposing a
convention of postal representatives for the purpose of simplifying the
rates of foreign postage and to expedite the foreign mails. This
proposition, equally important to our adopted citizens and to the
commercial interests of this country, has been favorably entertained and
agreed to by all the governments from whom replies have been received.

I ask the attention of Congress to the suggestions of the
Postmaster-General in his report respecting the further legislation
required, in his opinion, for the benefit of the postal service.

The Secretary of the Interior reports as follows in regard to the public
lands: The public lands have ceased to be a source of revenue. From the
1st July, 1861, to the 30th September, 1862, the entire cash receipts
from the sale of lands were $137,476.26--a sum much less than the
expenses of our land system during the same period. The homestead law,
which will take effect on the 1st of January next, offers such
inducements to settlers that sales for cash can not be expected to an
extent sufficient to meet the expenses of the General Land Office and
the cost of surveying and bringing the land into market.

The discrepancy between the sum here stated as arising from the sales of
the public lands and the sum derived from the same source as reported
from the Treasury Department arises, as I understand, from the fact that
the periods of time, though apparently, were not really coincident at
the beginning point, the Treasury report including a considerable sum
now which had previously been reported from the Interior, sufficiently
large to greatly overreach the sum derived from the three months now
reported upon by the Interior and not by the Treasury. The Indian tribes
upon our frontiers have during the past year manifested a spirit of
insubordination, and at several points have engaged in open hostilities
against the white settlements in their vicinity. The tribes occupying
the Indian country south of Kansas renounced their allegiance to the
United States and entered into treaties with the insurgents. Those who
remained loyal to the United States were driven from the country. The
chief of the Cherokees has visited this city for the purpose of
restoring the former relations of the tribe with the United States. He
alleges that they were constrained by superior force to enter into
treaties with the insurgents, and that the United States neglected to
furnish the protection which their treaty stipulations required.

In the month of August last the Sioux Indians in Minnesota attacked the
settlements in their vicinity with extreme ferocity, killing
indiscriminately men, women, and children. This attack was wholly
unexpected, and therefore no means of defense had been prodded. It is
estimated that not less than 800 persons were killed by the Indians, and
a large amount of property was destroyed. How this outbreak was induced
is not definitely known, and suspicions, which may be unjust, need not
to be stated. Information was received by the Indian Bureau from
different sources about the time hostilities were commenced that a
simultaneous attack was to be made upon the white settlements by all the
tribes between the Mississippi River and the Rocky Mountains. The State
of Minnesota has suffered great injury from this Indian war. A large
portion of her territory has been depopulated, and a severe loss has
been sustained by the destruction of property. The people of that State
manifest much anxiety for the removal of the tribes beyond the limits of
the State as a guaranty against future hostilities. The Commissioner of
Indian Affairs will furnish full details. I submit for your especial
consideration whether our Indian system shall not be remodeled. Many
wise and good men have impressed me with the belief that this can be
profitably done.

I submit a statement of the proceedings of commissioners, which shows
the progress that has been made in the enterprise of constructing the
Pacific Railroad. And this suggests the earliest completion of this
road, and also the favorable action of Congress upon the projects now
pending before them for enlarging the capacities of the great canals in
New York and Illinois, as being of vital and rapidly increasing
importance to the whole nation, and especially to the vast interior
region hereinafter to be noticed at some greater length. I purpose
having prepared and laid before you at an early day some interesting and
valuable statistical information upon this subject. The military and
commercial importance of enlarging the Illinois and Michigan Canal and
improving the Illinois River is presented in the report of Colonel
Webster to the Secretary of War, and now transmitted to Congress. I
respectfully ask attention to it.

To carry out the provisions of the act of Congress of the 15th of May
last, I have caused the Department of Agriculture of the United States
to be organized.

The Commissioner informs me that within the period of a few months this
Department has established an extensive system of correspondence and
exchanges, both at home and abroad, which promises to effect highly
beneficial results in the development of a correct knowledge of recent
improvements in agriculture, in the introduction of new products, and in
the collection of the agricultural statistics of the different States.

Also, that it will soon be prepared to distribute largely seeds,
cereals, plants, and cuttings, and has already published and liberally
diffused much valuable information in anticipation of a more elaborate
report, which will in due time be furnished, embracing some valuable
tests in chemical science now in progress in the laboratory.

The creation of this Department was for the more immediate benefit of a
large class of our most valuable citizens, and I trust that the liberal
basis upon which it has been organized will not only meet your
approbation, but that it will realize at no distant day all the fondest
anticipations of its most sanguine friends and become the fruitful
source of advantage to all our people.

On the 22d day of September last a proclamation was issued by the
Executive, a copy of which is herewith submitted. In accordance with the
purpose expressed in the second paragraph of that paper, I now
respectfully recall your attention to what may be called "compensated
emancipation."

A nation may be said to consist of its territory, its people, and its
laws. The territory is the only part which is of certain durability.
"One generation passeth away and another generation cometh, but the
earth abideth forever." It is of the first importance to duly consider
and estimate this ever-enduring part. That portion of the earth's
surface which is owned and inhabited by the people of the United States
is well adapted to be the home of one national family, and it is not
well adapted for two or more. Its vast extent and its variety of climate
and productions are of advantage in this age for one people, whatever
they might have been in former ages. Steam, telegraphs, and intelligence
have brought these to be an advantageous combination for one united
people.

In the inaugural address I briefly pointed out the total inadequacy of
disunion as a remedy for the differences between the people of the two
sections. I did so in language which I can not improve, and which,
therefore, I beg to repeat: One section of our country believes slavery
is right and ought to be extended, while the other believes it is wrong
and ought not to be extended. This is the only substantial dispute. The
fugitive-slave clause of the Constitution and the law for the
suppression of the foreign slave trade are each as well enforced,
perhaps, as any law can ever be in a community where the moral sense of
the people imperfectly supports the law itself. The great body of the
people abide by the dry legal obligation in both cases, and a few break
over in each. This I think, can not be perfectly cured, and it would be
worse in both cases after the separation of the sections than before.
The foreign slave trade, now imperfectly suppressed, would be ultimately
revived without restriction in one section, while fugitive slaves, now
only partially surrendered, would not be surrendered at all by the
other. Physically speaking, we can not separate. We can not remove our
respective sections from each other nor build an impassable wall between
them. A husband and wife may be divorced and go out of the presence and
beyond the reach of each other, but the different parts of our country
can not do this. They can not but remain face to face, and intercourse,
either amicable or hostile, must continue between them, Is it possible,
then, to make that intercourse more advantageous or more satisfactory
after separation than before? Can aliens make treaties easier than
friends can make laws? Can treaties be more faithfully enforced between
aliens than laws can among friends? Suppose you go to war, you can not
fight always; and when, after much loss on both sides and no gain on
either, you cease fighting, the identical old questions, as to terms of
intercourse, are again upon you. There is no line, straight or crooked,
suitable for a national boundary upon which to divide. Trace through,
from east to west, upon the line between the free and slave country, and
we shall find a little more than one-third of its length are rivers,
easy to be crossed, and populated, or soon to be populated, thickly upon
both sides; while nearly all its remaining length are merely surveyors'
lines, over which people may walk back and forth without any
consciousness of their presence. No part of this line can be made any
more difficult to pass by writing it down on paper or parchment as a
national boundary. The fact of separation, if it comes, gives up on the
part of the seceding section the fugitive-slave clause, along with all
other constitutional obligations upon the section seceded from, while I
should expect no treaty stipulation would ever be made to take its
place.

But there is another difficulty. The great interior region bounded east
by the Alleghanies, north by the British dominions, west by the Rocky
Mountains, and south by the line along which the culture of corn and
cotton meets, and which includes part of Virginia, part of Tennessee,
all of Kentucky, Ohio, Indiana, Michigan, Wisconsin, Illinois, Missouri,
Kansas, Iowa, Minnesota, and the Territories of Dakota, Nebraska, and
part of Colorado, already has above 10,000,000 people, and will have
50,000,000 within fifty years if not prevented by any political folly or
mistake. It contains more than one-third of the country owned by the
United States--certainly more than 1,000,000 square miles. Once half as
populous as Massachusetts already is, it would have more than 75,000,000
people. A glance at the map shows that, territorially speaking, it is
the great body of the Republic. The other parts are but marginal borders
to it. The magnificent region sloping west from the Rocky Mountains to
the Pacific being the deepest and also the richest in undeveloped
resources. In the production of provisions grains, grasses, and all
which proceed from them this great interior region is naturally one of
the most important in the world. Ascertain from the statistics the small
proportion of the region which has as yet been brought into cultivation,
and also the large and rapidly increasing amount of its products, and we
shall be overwhelmed with the magnitude of the prospect presented. And
yet this region has no seacoast--touches no ocean anywhere. As part of
one nation, its people now find, and may forever find, their way to
Europe by New York, to South America and Africa by New Orleans, and to
Asia by San Francisco; but separate our common country into two nations,
as designed by the present rebellion, and every man of this great
interior region is thereby cut off from some one or more of these
outlets, not perhaps by a physical barrier, but by embarrassing and
onerous trade regulations.

And this is true, wherever a dividing or boundary line may be fixed.
Place it between the now free and slave country, or place it south of
Kentucky or north of Ohio, and still the truth remains that none south
of it can trade to any port or place north of it, and none north of it
can trade to any port or place south of it, except upon terms dictated
by a government foreign to them. These outlets, east, west, and south,
are indispensable to the well-being of the people inhabiting and to
inhabit this vast interior region. Which of the three may be the best is
no proper question. All are better than either, and all of right belong
to that people and to their successors forever. True to themselves, they
will not ask where a line of separation shall be, but will vow rather
that there shall be no such line. Nor are the marginal regions less
interested in these communications to and through them to the great
outside world. They, too, and each of them, must have access to this
Egypt of the West without paying toll at the crossing of any national
boundary.

Our national strife springs not from our permanent part; not from the
land we inhabit: not from our national homestead. There is no possible
severing of this but would multiply and not mitigate evils among us. In
all its adaptations and aptitudes it demands union and abhors
separation. In fact, it would ere long force reunion, however much of
blood and treasure the separation might have cost. Our strife pertains
to ourselves--to the passing generations of men--and it can without
convulsion be hushed forever with the passing of one generation.

In this view I recommend the adoption of the following resolution and
articles amendatory to the Constitution of the United States: Resolved
by the Senate and House of Representatives of the United States of
America in Congress assembled (two-thirds of both Houses concurring),
That the following articles be proposed to the legislatures (or
conventions) of the several States as amendments to the Constitution of
the United States, all or any of which articles, when ratified by
three-fourths of the said legislatures (or conventions ), to be valid as
part or parts of the said Constitution, viz:

ART.--. Every State wherein slavery now exists which shall abolish the
same therein at any time or times before the 1st day of January, A. D.
1900, shall receive compensation from the United States as follows, to
wit:

The President of the United States shall deliver to every such State
bonds of the United States bearing interest at the rate of per cent per
annum to an amount equal to the aggregate sum of ____ for each slave
shown to have been therein by the Eighth Census of the United States,
said bonds to be delivered to such State by installments or in one
parcel at the completion of the abolishment, accordingly as the same
shall have been gradual or at one time within such State; and interest
shall begin to run upon any such bond only from the proper time of its
delivery as aforesaid. Any State having received bonds as aforesaid and
afterwards reintroducing or tolerating slavery therein shall refund to
the United States the bonds so received, or the value thereof, and all
interest paid thereon.

ART.--All slaves who shall have enjoyed actual freedom by the chances of
the war at any time before the end of the rebellion shall be forever
free; but all owners of such who shall not have been disloyal shall be
compensated for them at the same rates as is provided for States
adopting abolishment of slavery, but in such way that no slave shall be
twice accounted for.

ART.--Congress may appropriate money and otherwise provide for
colonizing free colored persons with their own consent at any place or
places without the United States. I beg indulgence to discuss these
proposed articles at some length. Without slavery the rebellion could
never have existed; without slavery it could not continue.

Among the friends of the Union there is great diversity of sentiment and
of policy in regard to slavery and the African race amongst us. Some
would perpetuate slavery; some would abolish it suddenly and without
compensation; some would abolish it gradually and with compensation:
some would remove the freed people from us, and some would retain them
with us; and there are yet other minor diversities. Because of these
diversities we waste much strength in struggles among ourselves. By
mutual concession we should harmonize and act together. This would be
compromise, but it would be compromise among the friends and not with
the enemies of the Union. These articles are intended to embody a plan
of such mutual concessions. If the plan shall be adopted, it is assumed
that emancipation will follow, at least in several of the States.

As to the first article, the main points are, first, the emancipation;
secondly, the length of time for consummating it (thirty-seven years);
and, thirdly, the compensation.

The emancipation will be unsatisfactory to the advocates of perpetual
slavery, but the length of time should greatly mitigate their
dissatisfaction. The time spares both races from the evils of sudden
derangement--in fact, from the necessity of any derangement--while most
of those whose habitual course of thought will be disturbed by the
measure will have passed away before its consummation. They will never
see it. Another class will hail the prospect of emancipation, but will
deprecate the length of time. They will feel that it gives too little to
the now living slaves. But it really gives them much. It saves them from
the vagrant destitution which must largely attend immediate emancipation
in localities where their numbers are very great, and it gives the
inspiring assurance that their posterity shall be free forever. The plan
leaves to each State choosing to act under it to abolish slavery now or
at the end of the century, or at any intermediate time, or by degrees
extending over the whole or any part of the period, and it obliges no
two States to proceed alike. It also provides for compensation, and
generally the mode of making it. This, it would seem, must further
mitigate the dissatisfaction of those who favor perpetual slavery, and
especially of those who are to receive the compensation. Doubtless some
of those who are to pay and not to receive will object. Yet the measure
is both just and economical. In a certain sense the liberation of slaves
is the destruction of property--property acquired by descent or by
purchase, the same as any other property. It is no less true for having
been often said that the people of the South are not more responsible
for the original introduction of this property than are the people of
the North; and when it is remembered how unhesitatingly we all use
cotton and sugar and share the profits of dealing in them, it may not be
quite safe to say that the South has been more responsible than the
North for its continuance. If, then, for a common object this property
is to be sacrificed, is it not just that it be done at a common charge?

And if with less money, or money more easily paid, we can preserve the
benefits of the Union by this means than we can by the war alone, is it
not also economical to do it? Let us consider it, then. Let us ascertain
the sum we have expended in the war since compensated emancipation was
proposed last March, and consider whether if that measure had been
promptly accepted by even some of the slave States the same sum would
not have done more to close the war than has been otherwise done. If so,
the measure would save money, and in that view would be a prudent and
economical measure. Certainly it is not so easy to pay something as it
is to pay nothing, but it is easier to pay a large sum than it is to pay
a larger one. And it is easier to pay any sum when we are able than it
is to pay it before we are able. The war requires large sums, and
requires them at once. The aggregate sum necessary for compensated
emancipation of course would be large. But it would require no ready
cash, nor the bonds even any faster than the emancipation progresses.
This might not, and probably would not, close before the end of the
thirty-seven years. At that time we shall probably have a hundred
millions of people to share the burden, instead of thirty-one millions
as now. And not only so, but the increase of our population may be
expected to continue for a long time after that period as rapidly as
before, because our territory will not have become full. I do not state
this inconsiderately. At the same ratio of increase which we have
maintained, on an average, from our first national census, in 1790,
until that of 1860, we should in 1900 have a population of 103,208,415.
And why may we not continue that ratio far beyond that period? Our
abundant room, our broad national homestead, is our ample resource. Were
our territory as limited as are the British Isles, very certainly our
population could not expand as stated. Instead of receiving the foreign
born as now, we should be compelled to send part of the native born
away. But such is not our condition. We have 2,963,000 square miles.
Europe has 3,800,000, with a population averaging 73 1/3 persons to the
square mile. Why may not our country at some time average as many? Is it
less fertile? Has it more waste surface by mountains, rivers, lakes,
deserts, or other causes? Is it inferior to Europe in any natural
advantage? If, then, we are at some time to be as populous as Europe,
how soon? As to when this may be, we can judge by the past and the
present; as to when it will be, if ever, depends much on whether we
maintain the Union. Several of our States are already above the average
of Europe 73 1/3 to the square mile. Massachusetts has 157; Rhode
Island, 133; Connecticut, 99; New York and New Jersey, each 80. Also two
other great States, Pennsylvania and Ohio, are not far below, the former
having 63 and the latter 59. The States already above the European
average, except New York, have increased in as rapid a ratio since
passing that point as ever before, while no one of them is equal to some
other parts of our country in natural capacity for sustaining a dense
population.

Taking the nation in the aggregate, and we find its population and ratio
of increase for the several decennial periods to be as follows:

Year - Population - Ratio of increase.

- - Per cent.

1790 - 3,929,827 - ..........

1800 - 5,304,937 - 35.02

1810 - 7,239,814 - 36.45

1820 - 9,638,131 - 36.45

1830 - 12,866,020 - 33.49

1840 - 17,069,453 - 32.67

1850 - 23,191,876 - 35.87

1860 - 31,443,790 - 35.58

This shows an average decennial increase of 34.60 per cent in population
through the seventy years from our first to our last census yet taken.
It is seen that the ratio of increase at no one of these seven periods
is either 2 per cent below or 2 per cent above the average, thus showing
how inflexible, and consequently how reliable, the law of increase in
our case is. Assuming that it will continue, it gives the following
results:

Year - Population

1870 - 42,323,341

1880 - 56,967,216

1890 - 76,677,872

1900 - 103,208,415

1910 - 138,918,526

1920 - 186,984,335

1930 - 251,680,914

These figures show that our country may be as populous as Europe now is
at some point between 1920 and 1930--say about 1925--our territory, at
73 1/3 persons to the square mile, being of capacity to contain
217,186,000.

And we will reach this, too, if we do not ourselves relinquish the
chance by the folly and evils of disunion or by long and exhausting war
springing from the only great element of national discord among us.
While it can not be foreseen exactly how much one huge example of
secession, breeding lesser ones indefinitely, would retard population,
civilization, and prosperity, no one can doubt that the extent of it
would be very great and injurious.

The proposed emancipation would shorten the war, perpetuate peace,
insure this increase of population, and proportionately the wealth of
the country. With these we should pay all the emancipation would cost,
together with our other debt, easier than we should pay our other debt
without it. If we had allowed our old national debt to run at 6 per cent
per annum, simple interest, from the end of our revolutionary struggle
until to-day, without paying anything on either principal or interest,
each man of us would owe less upon that debt now than each man owed upon
it then; and this because our increase of men through the whole period
has been greater than 6 per cent--has run faster than the interest upon
the debt. Thus time alone relieves a debtor nation, so long as its
population increases faster than unpaid interest accumulates on its
debt.

This fact would be no excuse for delaying payment of what is justly due,
but it shows the great importance of time in this connection--the great
advantage of a policy by which we shall not have to pay until we number
100,000,000 what by a different policy we would have to pay now, when we
number but 31,000,000. In a word, it shows that a dollar will be much
harder to pay for the war than will be a dollar for emancipation on the
proposed plan. And then the latter will cost no blood, no precious life.
It will be a saving of both.

As to the second article, I think it would be impracticable to return to
bondage the class of persons therein contemplated. Some of them,
doubtless, in the property sense belong to loyal owners, and hence
provision is made in this article for compensating such. The third
article relates to the future of the freed people. It does not oblige,
but merely authorizes Congress to aid in colonizing such as may consent.
This ought not to be regarded as objectionable on the one hand or on the
other, insomuch as it comes to nothing unless by the mutual consent of
the people to be deported and the American voters, through their
representatives in Congress.

I can not make it better known than it already is that I strongly favor
colonization; and yet I wish to say there is an objection urged against
free colored persons remaining in the country which is largely
imaginary, if not sometimes malicious.

It is insisted that their presence would injure and displace white labor
and white laborers. If there ever could be a proper time for mere catch
arguments, that time surely is not now. In times like the present men
should utter nothing for which they would not willingly be responsible
through time and in eternity. Is it true, then, that colored people can
displace any more white labor by being free than by remaining slaves? If
they stay in their old places, they jostle no white laborers; if they
leave their old places, they leave them open to white laborers.
Logically, there is neither more nor less of it. Emancipation, even
without deportation, would probably enhance the wages of white labor,
and very surely would not reduce them. Thus the customary amount of
labor would still have to be performed--the freed people would surely
not do more than their old proportion of it, and very probably for a
time would do less, leaving an increased part to white laborers,
bringing their labor into greater demand, and consequently enhancing the
wages of it. With deportation, even to a limited extent, enhanced wages
to white labor is mathematically certain. Labor is like any other
commodity in the market--increase the demand for it and you increase the
price of it. Reduce the supply of black labor by colonizing the black
laborer out of the country, and by precisely so much you increase the
demand for and wages of white labor.

But it is dreaded that the freed people will swarm forth and cover the
whole land. Are they not already in the land? Will liberation make them
any more numerous? Equally distributed among the whites of the whole
country, and there would be but one colored to seven whites. Could the
one in any way greatly disturb the seven? There are many communities now
having more than one free colored person to seven whites and this
without any apparent consciousness of evil from it. The District of
Columbia and the States of Maryland and Delaware are all in this
condition. The District has more than one free colored to six whites,
and yet in its frequent petitions to Congress I believe it has never
presented the presence of free colored persons as one of its grievances.
But why should emancipation South send the free people North? People of
any color seldom run unless there be something to run from. Heretofore
colored people to some extent have fled North from bondage, and now,
perhaps, from both bondage and destitution. But if gradual emancipation
and deportation be adopted, they will have neither to flee from. Their
old masters will give them wages at least until new laborers can be
procured, and the freedmen in turn will gladly give their labor for the
wages till new homes can be found for them in congenial climes and with
people of their own blood and race. This proposition can be trusted on
the mutual interests involved. And in any event, can not the North
decide for itself whether to receive them?

Again, as practice proves more than theory in any case, has there been
any irruption of colored people northward because of the abolishment of
slavery in this District last spring?

What I have said of the proportion of free colored persons to the whites
in the District is from the census of 1860, having no reference to
persons called contrabands nor to those made free by the act of Congress
abolishing slavery here.

The plan consisting of these articles is recommended, not but that a
restoration of the national authority would be accepted without its
adoption.

Nor will the war nor proceedings under the proclamation of September 22,
1862, be stayed because of the recommendation of this plan. Its timely
adoption, I doubt not, would bring restoration, and thereby stay both.

And notwithstanding this plan, the recommendation that Congress provide
by law for compensating any State which may adopt emancipation before
this plan shall have been acted upon is hereby earnestly renewed. Such
would be only an advance part of the plan, and the same arguments apply
to both.

This plan is recommended as a means, not in exclusion of, but additional
to, all others for restoring and preserving the national authority
throughout the Union. The subject is presented exclusively in its
economical aspect. The plan would, I am confident, secure peace more
speedily and maintain it more permanently than can be done by force
alone, while all it would cost, considering amounts and manner of
payment and times of payment, would be easier paid than will be the
additional cost of the war if we rely solely upon force. It is much,
very much, that it would cost no blood at all.

The plan is proposed as permanent constitutional law. It can not become
such without the concurrence of, first, two-thirds of Congress, and
afterwards three-fourths of the States. The requisite three-fourths of
the States will necessarily include seven of the slave States. Their
concurrence, if obtained, will give assurance of their severally
adopting emancipation at no very distant day upon the new constitutional
terms. This assurance would end the struggle now and save the Union
forever.

I do not forget the gravity which should characterize a paper addressed
to the Congress of the nation by the Chief Magistrate of the nation, nor
do I forget that some of you are my seniors, nor that many of you have
more experience than I in the conduct of public affairs. Yet I trust
that in view of the great responsibility resting upon me you will
perceive no want of respect to yourselves in any undue earnestness I may
seem to display.

Is it doubted, then, that the plan I propose, if adopted, would shorten
the war, and thus lessen its expenditure of money and of blood? Is it
doubted that it would restore the national authority and national
prosperity and perpetuate both indefinitely? Is it doubted that we
here--Congress and Executive can secure its adoption? Will not the good
people respond to a united and earnest appeal from us? Can we, can they,
by any other means so certainly or so speedily assure these vital
objects? We can succeed only by concert. It is not "Can any of us
imagine better?" but "Can we all do better?" Object whatsoever is
possible, still the question recurs, "Can we do better?" The dogmas of
the quiet past are inadequate to the stormy present. The occasion is
piled high with difficulty, and we must rise with the occasion. As our
case is new, so we must think anew and act anew. We must disenthrall
ourselves, and then we shall save our country.

Fellow-citizens, we can not escape history. We of this Congress and this
Administration will be remembered in spite of ourselves. No personal
significance or insignificance can spare one or another of us. The fiery
trial through which we pass will light us down in honor or dishonor to
the latest generation. We say we are for the Union. The world will not
forget that we say this. We know how to save the Union. The world knows
we do know how to save it. We, even we here, hold the power and bear the
responsibility. In giving freedom to the slave we assure freedom to the
free--honorable alike in what we give and what we preserve. We shall
nobly save or meanly lose the last best hope of earth. Other means may
succeed; this could not fail. The way is plain, peaceful, generous,
just--a way which if followed the world will forever applaud and God
must forever bless.

***

State of the Union Address
Abraham Lincoln
December 8, 1863

Fellow-Citizens of the Senate and House of Representatives:

Another year of health and of sufficiently abundant harvests has passed.
For these, and especially for the improved condition of our national
affairs, our renewed and profoundest gratitude to God is due.

We remain in peace and friendship with foreign powers.

The efforts of disloyal citizens of the United States to involve us in
foreign wars to aid an inexcusable insurrection have been unavailing.
Her Britannic Majesty's Government, as was justly expected, have
exercised their authority to prevent the departure of new hostile
expeditions from British ports. The Emperor of France has by a like
proceeding promptly vindicated the neutrality which he proclaimed at the
beginning of the contest. Questions of great intricacy and importance
have arisen out of the blockade and other belligerent operations between
the Government and several of the maritime powers, but they have been
discussed and, as far as was possible, accommodated in a spirit of
frankness, justice, and mutual good will. It is especially gratifying
that our prize courts, by the impartiality of their adjudications, have
commanded the respect and confidence of maritime powers.

The supplemental treaty between the United States and Great Britain for
the suppression of the African slave trade, made on the 17th day of
February last, has been duly ratified and carried into execution. It is
believed that so far as American ports and American citizens are
concerned that inhuman and odious traffic has been brought to an end.

I shall submit for the consideration of the Senate a convention for the
adjustment of possessory claims in Washington Territory arising out of
the treaty of the 15th June, 1846, between the United States and Great
Britain, and which have been the source of some disquiet among the
citizens of that now rapidly improving part of the country.

A novel and important question, involving the extent of the maritime
jurisdiction of Spain in the waters which surround the island of Cuba,
has been debated without reaching an agreement, and it is proposed in an
amicable spirit to refer it to the arbitrament of a friendly power. A
convention for that purpose will be submitted to the Senate.

I have thought it proper, subject to the approval of the Senate, to
concur with the interested commercial powers in an arrangement for the
liquidation of the Scheldt dues, upon the principles which have been
heretofore adopted in regard to the imposts upon navigation in the
waters of Denmark.  The long-pending controversy between this Government
and that of Chile touching the seizure at Sitana, in Peru, by Chilean
officers, of a large amount in treasure belonging to citizens of the
United States has been brought to a close by the award of His Majesty
the King of the Belgians, to whose arbitration the question was referred
by the parties. The subject was thoroughly and patiently examined by
that justly respected magistrate, and although the sum awarded to the
claimants may not have been as large as they expected there is no reason
to distrust the wisdom of His Majesty's decision. That decision was
promptly complied with by Chile when intelligence in regard to it
reached that country.

The joint commission under the act of the last session for carrying into
effect the convention with Peru on the subject of claims has been
organized at Lima, and is engaged in the business intrusted to it.

Difficulties concerning interoceanic transit through Nicaragua are in
course of amicable adjustment.

In conformity with principles set forth in my last annual message, I
have received a representative from the United States of Colombia, and
have accredited a minister to that Republic.

Incidents occurring in the progress of our civil war have forced upon my
attention the uncertain state of international questions touching the
rights of foreigners in this country and of United States citizens
abroad. In regard to some governments these rights are at least
partially, defined by treaties. In no instance, however, is it expressly
stipulated that in the event of civil war a foreigner residing in this
country within the lines of the insurgents is to be exempted from the
rule which classes him as a belligerent, in whose behalf the Government
or his country can not expect any privileges or immunities distinct from
that character. I regret to say, however, that such claims have been put
forward, and in some instances in behalf of foreigners who have lived in
the United States the greater part of their lives.

There is reason to believe that many persons born in foreign countries
who have declared their intention to become citizens, or who have been
fully naturalized, have evaded the military duty required of them by
denying the fact and thereby throwing upon the Government the burden of
proof. It has been found difficult or impracticable to obtain this
proof, from the want of guides to the proper sources of information.
These might be supplied by requiring clerks of courts where declarations
of intention may be made or naturalizations effected to send
periodically lists of the names of the persons naturalized or declaring
their intention to become citizens to the Secretary of the Interior, in
whose Department those names might be arranged and printed for general
information.

There is also reason to believe that foreigners frequently become
citizens of the United States for the sole purpose of evading duties
imposed by the laws of their native countries, to which on becoming
naturalized here they at once repair, and though never returning to the
United States they still claim the interposition of this Government as
citizens. Many altercations and great prejudices have heretofore arisen
out of this abuse. It is therefore submitted to your serious
consideration. It might be advisable to fix a limit beyond which no
citizen of the United States residing abroad may claim the interposition
of his Government.

The right of suffrage has often been assumed and exercised by aliens
under pretenses of naturalization, which they have disavowed when
drafted into the military service. I submit the expediency of such an
amendment of the law as will make the fact of voting an estoppel against
any plea of exemption from military service or other civil obligation on
the ground of alienage.

In common with other Western powers, our relations with Japan have been
brought into serious jeopardy through the perverse opposition of the
hereditary aristocracy of the Empire to the enlightened and liberal
policy of the Tycoon, designed to bring the country into the society of
nations. It is hoped, although not with entire confidence, that these
difficulties may be peacefully overcome. I ask your attention to the
claim of the minister residing there for the damages he sustained in the
destruction by fire of the residence of the legation at Yedo.

Satisfactory arrangements have been made with the Emperor of Russia,
which, it is believed, will result in effecting a continuous line of
telegraph through that Empire from our Pacific coast.

I recommend to your favorable consideration the subject of an
international telegraph across the Atlantic Ocean, and also of a
telegraph between this capital and the national forts along the Atlantic
seaboard and the Gulf of Mexico. Such communications, established with
any reasonable outlay, would be economical as well as effective aids to
the diplomatic, military, and naval service.

The consular system of the United States, under the enactments of the
last Congress, begins to be self-sustaining, and there is reason to hope
that it may become entirely so with the increase of trade which will
ensue whenever peace is restored. Our ministers abroad have been
faithful in defending American rights. In protecting commercial
interests our consuls have necessarily had to encounter increased labors
and responsibilities growing out of the war. These they have for the
most part met and discharged with zeal and efficiency. This
acknowledgment justly includes those consuls who, residing in Morocco,
Egypt, Turkey, Japan, China, and other Oriental countries, are charged
with complex functions and extraordinary powers.

The condition of the several organized Territories is generally
satisfactory, although Indian disturbances in New Mexico have not been
entirely suppressed. The mineral resources of Colorado, Nevada, Idaho,
New Mexico, and Arizona are proving far richer than has been heretofore
understood. I lay before you a communication on this subject from the
governor of New Mexico. I again submit to your consideration the
expediency of establishing a system for the encouragement of
immigration. Although this source of national wealth and strength is
again flowing with greater freedom than for several years before the
insurrection occurred, there is still a great deficiency of laborers in
every field of industry, especially in agriculture and in our mines, as
well of iron and coal as of the precious metals. While the demand for
labor is much increased here, tens of thousands of persons, destitute of
remunerative occupation, are thronging our foreign consulates and
offering to emigrate to the United States if essential, but very cheap,
assistance can be afforded them. It is easy to see that under the sharp
discipline of civil war the nation is beginning a new life. This noble
effort demands the aid and ought to receive the attention and support of
the Government.

Injuries unforeseen by the Government and unintended may in some cases
have been inflicted on the subjects or citizens of foreign countries,
both at sea and on land, by persons in the service of the United States.
As this Government expects redress from other powers when similar
injuries are inflicted by persons in their service upon citizens of the
United States, we must be prepared to do justice to foreigners. If the
existing judicial tribunals are inadequate to this purpose, a special
court may be authorized, with power to hear and decide such claims of
the character referred to as may have arisen under treaties and the
public law. Conventions for adjusting the claims by joint commission
have been proposed to some governments, but no definitive answer to the
proposition has yet been received from any.

In the course of the session I shall probably have occasion to request
you to provide indemnification to claimants where decrees of restitution
have been rendered and damages awarded by admiralty courts, and in other
cases where this Government may be acknowledged to be liable in
principle and where the amount of that liability has been ascertained by
an informal arbitration.

The proper officers of the Treasury have deemed themselves required by
the law of the United States upon the subject to demand a tax upon the
incomes of foreign consuls in this country. While such a demand may not
in strictness be in derogation of public law, or perhaps of any existing
treaty between the United States and a foreign country, the expediency
of so far modifying the act as to exempt from tax the income of such
consuls as are not citizens of the United States, derived from the
emoluments of their office or from property not situated in the United
States, is submitted to your serious consideration. I make this
suggestion upon the ground that a comity which ought to be reciprocated
exempts our consuls in all other countries from taxation to the extent
thus indicated. The United States, I think, ought not to be
exceptionally illiberal to international trade and commerce.

The operations of the Treasury during the last year have been
successfully conducted. The enactment by Congress of a national banking
law has proved a valuable support of the public credit and the general
legislation in relation to loans has fully answered the expectations of
its favorers. Some amendments may be required to perfect existing laws,
but no change in their principles or general scope is believed to be
needed.

Since these measures have been in operation all demands on the Treasury,
including the pay of the Army and Navy, have been promptly met and fully
satisfied. No considerable body of troops, it is believed, were ever
more amply provided and more liberally and punctually paid, and it may
be added that by no people were the burdens incident to a great war ever
more cheerfully borne.

The receipts during the year from all sources, including loans and
balance in the Treasury at its commencement, were $901,125,674.86, and
the aggregate disbursements $895,796,630.65, leaving a balance on the
1st of July, 1863, of $5,329,044.21. Of the receipts there were derived
from customs $69,059,642.40, from internal revenue $37,640,787.95, from
direct tax $1,485,103.61, from lands $167,617.17, from miscellaneous
sources $3,046,615.35, and from loans $776,682,361.57, making the
aggregate $901,125,674.86. Of the disbursements there were for the civil
service $23,253,922.08, for pensions and Indians $4,216,520.79, for
interest on public debt $24,729,846.51, for the War Department
$599,298,600.83, for the Navy Department $63,211,105.27, for payment of
funded and temporary debt $181,086,635.07, making the aggregate
$895,796,630.65 and leaving the balance of $5,329,044.21. But the
payment of funded and temporary debt, having been made from moneys
borrowed during the year, must be regarded as merely nominal payments
and the moneys borrowed to make them as merely nominal receipts, and
their amount, $181,086,635.07, should therefore be deducted both from
receipts and disbursements. This being done there remains as actual
receipts $720,039,039.79 and the actual disbursements $714,709,995.58,
leaving the balance as already stated.

The actual receipts and disbursements for the first quarter and the
estimated receipts and disbursements for the remaining three quarters of
the current fiscal year (1864) will be shown in detail by the report of
the Secretary of the Treasury, to which I invite your attention. It is
sufficient to say here that it is not believed that actual results will
exhibit a state of the finances less favorable to the country than the
estimates of that officer heretofore submitted, while it is confidently
expected that at the close of the year both disbursements and debt will
be found very considerably less than has been anticipated.

The report of the Secretary of War is a document of great interest. It
consists of--

1. The military operations of the year, detailed in the report of the
General in Chief. 2. The organization of colored persons into the war
service. 3. The exchange of prisoners, fully set forth in the letter of
General Hitchcock. 4. The operations under the act for enrolling and
calling out the national forces, detailed in the report of the
Provost-Marshal-General. 5. The organization of the invalid corps, and
6. The operation of the several departments of the
Quartermaster-General, Commissary-General, Paymaster-General, Chief of
Engineers, Chief of Ordnance, and Surgeon-General.

It has appeared impossible to make a valuable summary of this report,
except such as would be too extended for this place, and hence I content
myself by asking your careful attention to the report itself.

The duties devolving on the naval branch of the service during the year
and throughout the whole of this unhappy contest have been discharged
with fidelity and eminent success. The extensive blockade has been
constantly increasing in efficiency as the Navy has expanded, yet on so
long a line it has so far been impossible to entirely suppress illicit
trade. From returns received at the Navy Department it appears that more
than 1,000 vessels have been captured since the blockade was instituted,
and that the value of prizes already sent in for adjudication amounts to
over $13,000,000.

The naval force of the United States consists at this time of 588
vessels completed and in the course of completion, and of these 75 are
ironclad or armored steamers. The events of the war give an increased
interest and importance to the Navy which will probably extend beyond
the war itself.

The armored vessels in our Navy completed and in service, or which are
under contract and approaching completion, are believed to exceed in
number those of any other power; but while these may be relied upon for
harbor defense and coast service, others of greater strength and
capacity will be necessary for cruising purposes and to maintain our
rightful position on the ocean.

The change that has taken place in naval vessels and naval warfare since
the introduction of steam as a motive power for ships of war demands
either a corresponding change in some of our existing navy-yards or the
establishment of new ones for the construction and necessary repair of
modern naval vessels. No inconsiderable embarrassment, delay, and public
injury have been experienced from the want of such governmental
establishments. The necessity of such a navy-yard, so furnished, at some
suitable place upon the Atlantic seaboard has on repeated occasions been
brought to the attention of Congress by the Navy Department, and is
again presented in the report of the Secretary which accompanies this
communication. I think it my duty to invite your special attention to
this subject, and also to that of establishing a yard and depot for
naval purposes upon one of the Western rivers. A naval force has been
created on those interior waters, and under many disadvantages, within
little more than two years, exceeding in numbers the whole naval force
of the country at the commencement of the present Administration.
Satisfactory and important as have been the performances of the heroic
men of the Navy at this interesting period, they are scarcely more
wonderful than the success of our mechanics and artisans in the
production of war vessels, which has created a new form of naval power.

Our country has advantages superior to any other nation in our resources
of iron and timber, with inexhaustible quantities of fuel in the
immediate vicinity of both, and all available and in close proximity to
navigable waters. Without the advantage of public works, the resources
of the nation have been developed and its power displayed in the
construction of a Navy of such magnitude, which has at the very period
of its creation rendered signal service to the Union.

The increase of the number of seamen in the public service from 7,500
men in the spring of 1861 to about 34,000 at the present time has been
accomplished without special legislation or extraordinary bounties to
promote that increase. It has been found, however, that the operation of
the draft, with the high bounties paid for army recruits, is beginning
to affect injuriously the naval service, and will, if not corrected, be
likely to impair its efficiency by detaching seamen from their proper
vocation and inducing them to enter the Army. I therefore respectfully
suggest that Congress might aid both the army and naval services by a
definite provision on this subject which would at the same time be
equitable to the communities more especially interested.

I commend to your consideration the suggestions of the Secretary of the
Navy in regard to the policy of fostering and training seamen and also
the education of officers and engineers for the naval service. The Naval
Academy is rendering signal service in preparing midshipmen for the
highly responsible duties which in after life they will be required to
perform. In order that the country should not be deprived of the proper
quota of educated officers, for which legal provision has been made at
the naval school, the vacancies caused by the neglect or omission to
make nominations from the States in insurrection have been filled by the
Secretary of the Navy. The school is now more full and complete than at
any former period, and in every respect entitled to the favorable
consideration of Congress.

During the past fiscal year the financial condition of the Post-Office
Department has been one of increasing prosperity, and I am gratified in
being able to state that the actual postal revenue has nearly equaled
the entire expenditures, the latter amounting to $11,314,206.84 and the
former to $11,163,789.59, leaving a deficiency of but $150,417.25. In
1860, the year immediately preceding the rebellion, the deficiency
amounted to $5,656,705.49, the postal receipts of that year being
$2,645,722.19 less than those of 1863. The decrease since 1860 in the
annual amount of transportation has been only about 25 per cent, but the
annual expenditure on account of the same has been reduced 35 per cent.
It is manifest, therefore, that the Post-Office Department may become
self-sustaining in a few years, even with the restoration of the whole
service.

The international conference of postal delegates from the principal
countries of Europe and America, which was called at the suggestion of
the Postmaster-General, met at Paris on the 11th of May last and
concluded its deliberations on the 8th of June. The principles
established by the conference as best adapted to facilitate postal
intercourse between nations and as the basis of future postal
conventions inaugurate a general system of uniform international charges
at reduced rates of postage, and can not fail to produce beneficial
results.

I refer you to the report of the Secretary of the Interior, which is
herewith laid before you, for useful and varied information in relation
to the public lands, Indian affairs, patents, pensions, and other
matters of public concern pertaining to his Department.

The quantity of land disposed of during the last and the first quarter
of the present fiscal years was 3,841,549 acres, of which 161,911 acres
were sold for cash, 1,456,514 acres were taken up under the homestead
law, and the residue disposed of under laws granting lands for military
bounties, for railroad and other purposes. It also appears that the sale
of the public lands is largely on the increase.

It has long been a cherished opinion of some of our wisest statesmen
that the people of the United States had a higher and more enduring
interest in the early settlement and substantial cultivation of the
public lands than in the amount of direct revenue to be derived from the
sale of them. This opinion has had a controlling influence in shaping
legislation upon the subject of our national domain. I may cite as
evidence of this the liberal measures adopted in reference to actual
settlers; the grant to the States of the overflowed lands within their
limits, in order to their being reclaimed and rendered fit for
cultivation; the grants to railway companies of alternate sections of
land upon the contemplated issues of their roads, which when completed
will so largely multiply the facilities for reaching our distant
possessions. This policy has received its most signal and beneficent
illustration in the recent enactment granting homesteads to actual
settlers. Since the 1st day of January last the before-mentioned
quantity of 1,456,514 acres of land have been taken up under its
provisions. This fact and the amount of sales furnish gratifying
evidence of increasing settlement upon the public lands, notwithstanding
the great struggle in which the energies of the nation have been
engaged, and which has required so large a withdrawal of our citizens
from their accustomed pursuits. I cordially concur in the recommendation
of the Secretary of the Interior suggesting a modification of the act in
favor of those engaged in the military and naval service of the United
States. I doubt not that Congress will cheerfully adopt such measures as
will, without essentially changing the general features of the system,
secure to the greatest practicable extent its benefits to those who have
left their homes in the defense of the country in this arduous crisis.

I invite your attention to the views of the Secretary as to the
propriety of raising by appropriate legislation a revenue from the
mineral lands of the United States.

The measures provided at your last session for the removal of certain
Indian tribes have been carried into effect. Sundry treaties have been
negotiated, which will in due time be submitted for the constitutional
action of the Senate. They contain stipulations for extinguishing the
possessory rights of the Indians to large and valuable tracts of lands.
It is hoped that the effect of these treaties will result in the
establishment of permanent friendly relations with such of these tribes
as have been brought into frequent and bloody collision with our
outlying settlements and emigrants. Sound policy and our imperative duty
to these wards of the Government demand our anxious and constant
attention to their material well-being, to their progress in the arts of
civilization, and, above all, to that moral training which under the
blessing of Divine Providence will confer upon them the elevated and
sanctifying influences, the hopes and consolations, of the Christian
faith. I suggested in my last annual message the propriety of remodeling
our Indian system. Subsequent events have satisfied me of its necessity.
The details set forth in the report of the Secretary evince the urgent
need for immediate legislative action.

I commend the benevolent institutions established or patronized by the
Government in this District to your generous and fostering care. The
attention of Congress during the last session was engaged to some extent
with a proposition for enlarging the water communication between the
Mississippi River and the northeastern seaboard, which proposition,
however, failed for the time. Since then, upon a call of the greatest
respectability, a convention has been held at Chicago upon the same
subject, a summary of whose views is contained in a memorial addressed
to the President and Congress, and which I now have the honor to lay
before you. That this interest is one which ere long will force its own
way I do not entertain a doubt, while it is submitted entirely to your
wisdom as to what can be done now. Augmented interest is given to this
subject by the actual commencement of work upon the Pacific Railroad,
under auspices so favorable to rapid progress and completion. The
enlarged navigation becomes a palpable need to the great road.

I transmit the second annual report of the Commissioner of the
Department of Agriculture, asking your attention to the developments in
that vital interest of the nation. When Congress assembled a year ago,
the war had already lasted nearly twenty months, and there had been many
conflicts on both land and sea, with varying results; the rebellion had
been pressed back into reduced limits; yet the tone of public feeling
and opinion, at home and abroad was not satisfactory. With other signs,
the popular elections then just past indicated uneasiness among
ourselves, while, amid much that was cold and menacing, the kindest
words coming from Europe were uttered in accents of pity that we were
too blind to surrender a hopeless cause. Our commerce was suffering
greatly by a few armed vessels built upon and furnished from foreign
shores, and we were threatened with such additions from the same quarter
as would sweep our trade from the sea and raise our blockade. We had
failed to elicit from European Governments anything hopeful upon this
subject. The preliminary emancipation proclamation, issued in September,
was running its assigned period to the beginning of the new year. A
month later the final proclamation came, including the announcement that
colored men of suitable condition would be received into the war
service. The policy of emancipation and of employing black soldiers gave
to the future a new aspect, about which hope and fear and doubt
contended in uncertain conflict. According to our political system, as a
matter of civil administration, the General Government had no lawful
power to effect emancipation in any State, and for a long time it had
been hoped that the rebellion could be suppressed without resorting to
it as a military measure. It was all the while deemed possible that the
necessity for it might come, and that if it should the crisis of the
contest would then be presented. It came, and, as was anticipated, it
was followed by dark and doubtful days. Eleven months having now passed,
we are permitted to take another review. The rebel borders are pressed
still farther back, and by the complete opening of the Mississippi the
country dominated by the rebellion is divided into distinct parts, with
no practical communication between them. Tennessee and Arkansas have
been substantially cleared of insurgent control, and influential
citizens in each, owners of slaves and advocates of slavery at the
beginning of the rebellion, now declare openly for emancipation in their
respective States. Of those States not included in the emancipation
proclamation, Maryland and Missouri, neither of which three years ago
would tolerate any restraint upon the extension of slavery into new
Territories, only dispute now as to the best mode of removing it within
their own limits.

Of those who were slaves at the beginning of the rebellion full 100,000
are now in the United States military service, about one-half of which
number actually bear arms in the ranks, thus giving the double advantage
of taking so much labor from the insurgent cause and supplying the
places which otherwise must be filled with so many white men. So far as
tested, it is difficult to say they are not as good soldiers as any. No
servile insurrection or tendency to violence or cruelty has marked the
measures of emancipation and arming the blacks. These measures have been
much discussed in foreign countries, and, contemporary with such
discussion, the tone of public sentiment there is much improved. At home
the same measures have been fully discussed, supported, criticised, and
denounced, and the annual elections following are highly encouraging to
those whose official duty it is to bear the country through this great
trial. Thus we have the new reckoning. The crisis which threatened to
divide the friends of the Union is past.

Looking now to the present and future, and with reference to a
resumption of the national authority within the States wherein that
authority has been suspended, I have thought fit to issue a
proclamation, a copy of which is herewith transmitted. On examination of
this proclamation it will appear, as is believed, that nothing will be
attempted beyond what is amply justified by the Constitution. True, the
form of an oath is given, but no man is coerced to take it. The man is
only promised a pardon in case he voluntarily takes the oath. The
Constitution authorizes the Executive to grant or withhold the pardon at
his own absolute discretion, and this includes the power to grant on
terms, as is fully established by judicial and other authorities.

It is also proffered that if in any of the States named a State
government shall be in the mode prescribed set up, such government shall
be recognized and guaranteed by the United States, and that under it the
State shall, on the constitutional conditions, be protected against
invasion and domestic violence. The constitutional obligation of the
United States to guarantee to every State in the Union a republican form
of government and to protect the State in the cases stated is explicit
and full. But why tender the benefits of this provision only to a State
government set up in this particular way? This section of the
Constitution contemplates a case wherein the element within a State
favorable to republican government in the Union may be too feeble for an
opposite and hostile element external to or even within the State, and
such are precisely the cases with which we are now dealing.

An attempt to guarantee and protect a revived State government,
constructed in whole or in preponderating part from the very element
against whose hostility and violence it is to be protected, is simply
absurd. There must be a test by which to separate the opposing elements,
so as to build only from the sound; and that test is a sufficiently
liberal one which accepts as sound whoever will make a sworn recantation
of his former unsoundness.

But if it be proper to require as a test of admission to the political
body an oath of allegiance to the Constitution of the United States and
to the Union under it, why also to the laws and proclamations in regard
to slavery? Those laws and proclamations were enacted and put forth for
the purpose of aiding in the suppression of the rebellion. To give them
their fullest effect there had to be a pledge for their maintenance. In
my judgment, they have aided and will further aid the cause for which
they were intended. To now abandon them would be not only to relinquish
a lever of power, but would also be a cruel and an astounding breach of
faith. I may add at this point that while I remain in my present
position I shall not attempt to retract or modify the emancipation
proclamation, nor shall I return to slavery any person who is free by
the terms of that proclamation or by any of the acts of Congress. For
these and other reasons it is thought best that support of these
measures shall be included in the oath, and it is believed the Executive
may lawfully claim it in return for pardon and restoration of forfeited
rights, which he has clear constitutional power to withhold altogether
or grant upon the terms which he shall deem wisest for the public
interest. It should be observed also that this part of the oath is
subject to the modifying and abrogating power of legislation and supreme
judicial decision.

The proposed acquiescence of the National Executive in any reasonable
temporary State arrangement for the freed people is made with the view
of possibly modifying the confusion and destitution which must at best
attend all classes by a total revolution of labor throughout whole
States. It is hoped that the already deeply afflicted people in those
States may be somewhat more ready to give up the cause of their
affliction if to this extent this vital matter be left to themselves,
while no power of the National Executive to prevent an abuse is abridged
by the proposition.

The suggestion in the proclamation as to maintaining the political
framework of the States on what is called reconstruction is made in the
hope that it may do good without danger of harm. It will save labor and
avoid great confusion.

But why any proclamation now upon this subject? This question is beset
with the conflicting views that the step might be delayed too long or be
taken too soon. In some States the elements for resumption seem ready
for action, but remain inactive apparently for want of a rallying
point--a plan of action, Why shall A adopt the plan of B rather than B
that of A? And if A and B should agree, how can they know but that the
General Government here will reject their plan? By the proclamation a
plan is presented which may be accepted by them as a rallying point, and
which they are assured in advance will not be rejected here. This may
bring them to act sooner than they otherwise would. The objections to a
premature presentation of a plan by the National Executive consist in
the danger of committals on points which could be more safely left to
further developments. Care has been taken to so shape the document as to
avoid embarrassments from this source. Saying that on certain terms
certain classes will be pardoned with rights restored, it is not said
that other classes or other terms will never be in included. Saying
specified way, it is said that reconstruction will be accepted if
presented in a not said it will never be accepted in any other way.

The movements by State action for emancipation in several of the States
not included in the emancipation proclamation are matters of profound
gratulation. And while I do not repeat in detail what I have heretofore
so earnestly urged upon this subject, my general views and feelings
remain unchanged; and I trust that Congress will omit no fair
opportunity of aiding these important steps to a great consummation. In
the midst of other cares, however important, we must not lose sight of
the fact that the war power is still our main reliance. To that power
alone can we look yet for a time to give confidence to the people in the
contested regions that the insurgent power will not again overrun them.
Until that confidence shall be established little can be done anywhere
for what is called reconstruction. Hence our chiefest care must still be
directed to the Army and Navy, who have thus far borne their harder part
so nobly and well; and it may be esteemed fortunate that in giving the
greatest efficiency to these indispensable arms we do also honorably
recognize the gallant men, from commander to sentinel, who compose them,
and to whom more than to others the world must stand indebted for the
home of freedom disenthralled, regenerated, enlarged, and perpetuated.

***

State of the Union Address
Abraham Lincoln
December 6, 1864

Fellow-Citizens of the Senate and House of Representatives:

Again the blessings of health and abundant harvests claim our
profoundest gratitude to Almighty God.

The condition of our foreign affairs is reasonably satisfactory.

Mexico continues to be a theater of civil war. While our political
relations with that country have undergone no change, we have at the
same time strictly maintained neutrality between the belligerents.

At the request of the States of Costa Rica and Nicaragua, a competent
engineer has been authorized to make a survey of the river San Juan and
the port of San Juan. It is a source of much satisfaction that the
difficulties which for a moment excited some political apprehensions and
caused a closing of the interoceanic transit route have been amicably
adjusted, and that there is a good prospect that the route will soon be
reopened with an increase of capacity and adaptation. We could not
exaggerate either the commercial or the political importance of that
great improvement.

It would be doing injustice to an important South American State not to
acknowledge the directness, frankness, and cordiality with which the
United States of Colombia have entered into intimate relations with this
Government. A claims convention has been constituted to complete the
unfinished work of the one which closed its session in 1861.

The new liberal constitution of Venezuela having gone into effect with
the universal acquiescence of the people, the Government under it has
been recognized and diplomatic intercourse with it has opened in a
cordial and friendly spirit. The long-deferred Aves Island claim has
been satisfactorily paid and discharged.

Mutual payments have been made of the claims awarded by the late joint
commission for the settlement of claims between the United States and
Peru. An earnest and cordial friendship continues to exist between the
two countries, and such efforts as were in my power have been used to
remove misunderstanding and avert a threatened war between Peru and
Spain.

Our relations are of the most friendly nature with Chile, the Argentine
Republic, Bolivia, Costa Rica, Paraguay, San Salvador, and Hayti. During
the past year no differences of any kind have arisen with any of those
Republics, and, on the other hand, their sympathies with the United
States are constantly expressed with cordiality and earnestness.

The claim arising from the seizure of the cargo of the brig Macedonian
in 1821 has been paid in full by the Government of Chile. Civil war
continues in the Spanish part of San Domingo, apparently without
prospect of an early close.

Official correspondence has been freely opened with Liberia, and it
gives us a pleasing view of social and political progress in that
Republic. It may be expected to derive new vigor from American
influence, improved by the rapid disappearance of slavery in the United
States.

I solicit your authority to furnish to the Republic a gunboat at
moderate cost, to be reimbursed to the United States by installments.
Such a vessel is needed for the safety of that State against the native
African races, and in Liberian hands it would be more effective in
arresting the African slave trade than a squadron in our own hands. The
possession of the least organized naval force would stimulate a generous
ambition in the Republic, and the confidence which we should manifest by
furnishing it would win forbearance and favor toward the colony from all
civilized nations.

The proposed overland telegraph between America and Europe, by the way
of Behrings Straits and Asiatic Russia, which was sanctioned by Congress
at the last session, has been undertaken, under very favorable
circumstances, by an association of American citizens, with the cordial
good will and support as well of this Government as of those of Great
Britain and Russia. Assurances have been received from most of the South
American States of their high appreciation of the enterprise and their
readiness to cooperate in constructing lines tributary to that
world-encircling communication. I learn with much satisfaction that the
noble design of a telegraphic communication between the eastern coast of
America and Great Britain has been renewed, with full expectation of its
early accomplishment.

Thus it is hoped that with the return of domestic peace the country will
be able to resume with energy and advantage its former high career of
commerce and civilization.

Our very popular and estimable representative in Egypt died in April
last. An unpleasant altercation which arose between the temporary
incumbent of the office and the Government of the Pasha resulted in a
suspension of intercourse. The evil was promptly corrected on the
arrival of the successor in the consulate, and our relations with Egypt,
as well as our relations with the Barbary Powers, are entirely
satisfactory.

The rebellion which has so long been flagrant in China has at last been
suppressed, with the cooperating good offices of this Government and of
the other Western commercial States. The judicial consular establishment
there has become very difficult and onerous, and it will need
legislative revision to adapt it to the extension of our commerce and to
the more intimate intercourse which has been instituted with the
Government and people of that vast Empire. China seems to be accepting
with hearty good will the conventional laws which regulate commercial
and social intercourse among the Western nations.

Owing to the peculiar situation of Japan and the anomalous form of its
Government, the action of that Empire in performing treaty stipulations
is inconstant and capricious. Nevertheless, good progress has been
effected by the Western powers, moving with enlightened concert. Our own
pecuniary claims have been allowed or put in course of settlement, and
the inland sea has been reopened to commerce. There is reason also to
believe that these proceedings have increased rather than diminished the
friendship of Japan toward the United States.

The ports of Norfolk, Fernandina, and Pensacola have been opened by
proclamation. It is hoped that foreign merchants will now consider
whether it is not safer and more profitable to themselves, as well as
just to the United States, to resort to these and other open ports than
it is to pursue, through many hazards and at vast cost, a contraband
trade with other ports which are closed, if not by actual military
occupation, at least by a lawful and effective blockade.

For myself, I have no doubt of the power and duty of the Executive,
under the law of nations, to exclude enemies of the human race from an
asylum in the United States. If Congress should think that proceedings
in such cases lack the authority of law, or ought to be further
regulated by it, I recommend that provision be made for effectually
preventing foreign slave traders from acquiring domicile and facilities
for their criminal occupation in our country.

It is possible that if it were new and open question the maritime
powers, with the lights they now enjoy, would not concede the privileges
of a naval belligerent to the insurgents of the United States,
destitute, as they are, and always have been, equally of ships of war
and of ports and harbors. Disloyal emissaries have been neither less
assiduous nor more successful during the last year than they were before
that time in their efforts under favor of that privilege, to embroil our
country in foreign wars. The desire and determination of the governments
of the maritime states to defeat that design are believed to be as
sincere as and can not be more earnest than our own. Nevertheless,
unforeseen political difficulties have arisen, especially in Brazilian
and British ports and on the northern boundary of the United States,
which have required, and are likely to continue to require, the practice
of constant vigilance and a just and conciliatory spirit on the part of
the United States, as well as of the nations concerned and their
governments.

Commissioners have been appointed under the treaty with Great Britain on
the adjustment of the claims of the Hudsons Bay and Pugets Sound
Agricultural Companies, in Oregon, and are now proceeding to the
execution of the trust assigned to them.

In view of the insecurity of life and property in the region adjacent to
the Canadian border, by reason of recent assaults and depredations
committed by inimical and desperate persons who are harbored there, it
has been thought proper to give notice that after the expiration of six
months, the period conditionally stipulated in the existing arrangement
with Great Britain, the United States must hold themselves at liberty to
increase their naval armament upon the Lakes if they shall find that
proceeding necessary. The condition of the border will necessarily come
into consideration in connection with the question of continuing or
modifying the rights of transit from Canada through the United States,
as well as the regulation of imposts, which were temporarily established
by the reciprocity treaty of the 5th June, 1854.

I desire, however, to be understood while making this statement that the
colonial authorities of Canada are not deemed to be intentionally unjust
or unfriendly toward the United States, but, on the contrary, there is
every reason to expect that, with the approval of the Imperial
Government, they will take the necessary measures to prevent new
incursions across the border.

The act passed at the last session for the encouragement of immigration
has so far as was possible been put into operation. It seems to need
amendment which will enable the officers of the Government to prevent
the practice of frauds against the immigrants while on their way and on
their arrival in the ports, so as to secure them here a free choice of
avocations and places of settlement. A liberal disposition toward this
great national policy is manifested by most of the European States, and
ought to be reciprocated on our part by giving the immigrants effective
national protection. I regard our immigrants as one of the principal
replenishing streams which are appointed by Providence to repair the
ravages of internal war and its wastes of national strength and health.
All that is necessary is to secure the flow of that stream in its
present fullness, and to that end the Government must in every way make
it manifest that it neither needs nor designs to impose involuntary
military service upon those who come from other lands to cast their lot
in our country.

The financial affairs of the Government have been successfully
administered during the last year. The legislation of the last session
of Congress has beneficially affected the revenues, although sufficient
time has not yet elapsed to experience the full effect of several of the
provisions of the acts of Congress imposing increased taxation.

The receipts during the year from all sources, upon the basis of
warrants signed by the Secretary of the Treasury, including loans and
the balance in the Treasury on the 1st day of July, 1863, were
$1,394,796,007.62, and the aggregate disbursements, upon the same basis,
were $1,298,056,101.89, leaving a balance in the Treasury, as shown by
warrants, of $96,739,905.73.

Deduct from these amounts the amount of the principal of the public debt
redeemed and the amount of issues in substitution therefor, and the
actual cash operations of the Treasury were: Receipts, $884,076,646.57;
disbursements, $865,234,087.86; which leaves a cash balance in the
Treasury of $18,842,558.71.

Of the receipts there were derived from customs $102,316,152.99, from
lands $588,333.29. from direct taxes $475,648.96, from internal revenue
$109,741,134.10, from miscellaneous sources $47,511,448.10, and from
loans applied to actual expenditures, including former balance,
$623,443,929.13.

There were disbursed for the civil service $27,505,599.46, for pensions
and Indians $7,517,930.97, for the War Department $690,791,842.97, for
the Navy Department $85,733,292.77, for interest on the public debt
$53,685,421.69, making an aggregate of $865,234,087.86 and leaving a
balance in the Treasury of $18,842,558.71, as before stated.

For the actual receipts and disbursements for the first quarter and the
estimated receipts and disbursements for the three remaining quarters of
the current fiscal year, and the general operations of the Treasury in
detail, I refer you to the report of the Secretary of the Treasury. I
concur with him in the opinion that the proportion of moneys required to
meet the expenses consequent upon the war derived from taxation should
be still further increased; and I earnestly invite your attention to
this subject, to the end that there may be such additional legislation
as shall be required to meet the just expectations of the Secretary.

The public debt on the 1st day of July last, as appears by the books of
the Treasury, amounted to $1,740,690,489.49. Probably, should the war
continue for another year, that amount may be increased by not far from
five hundred millions. Held, as it is, for the most part by our own
people, it has become a substantial branch of national, though private,
property. For obvious reasons the more nearly this property can be
distributed among all the people the better. To favor such general
distribution, greater inducements to become owners might, perhaps, with
good effect and without injury be presented to persons of limited means.
With this view I suggest whether it might not be both competent and
expedient for Congress to provide that a limited amount of some future
issue of public securities might be held by any bona fide purchaser
exempt from taxation and from seizure for debt, under such restrictions
and limitations as might be necessary to guard against abuse of so
important a privilege. This would enable every prudent person to set
aside a small annuity against a possible day of want.

Privileges like these would render the possession of such securities to
the amount limited most desirable to every person of small means who
might be able to save enough for the purpose. The great advantage of
citizens being creditors as well as debtors with relation to the public
debt is obvious. Men readily perceive that they can not be much
oppressed by a debt which they owe to themselves.

The public debt on the 1st day of July last, although somewhat exceeding
the estimate of the Secretary of the Treasury made to Congress at the
commencement of the last session, falls short of the estimate of that
officer made in the preceding December as to its probable amount at the
beginning of this year by the sum of $3,995,097.31. This fact exhibits a
satisfactory condition and conduct of the operations of the Treasury.

The national banking system is proving to be acceptable to capitalists
and to the people. On the 25th day of November 584 national banks had
been organized, a considerable number of which were conversions from
State banks. Changes from State systems to the national system are
rapidly taking place, and it is hoped that very soon there will be in
the United States no banks of issue not authorized by Congress and no
bank-note circulation not secured by the Government. That the Government
and the people will derive great benefit from this change in the banking
systems of the country can hardly be questioned. The national system
will create a reliable and permanent influence in support of the
national credit and protect the people against losses in the use of
paper money. Whether or not any further legislation is advisable for the
suppression of State-bank issues it will be for Congress to determine.
It seems quite clear that the Treasury can not be satisfactorily
conducted unless the Government can exercise a restraining power over
the bank-note circulation of the country. The report of the Secretary of
War and the accompanying documents will detail the campaigns of the
armies in the field since the date of the last annual message, and also
the operations of the several administrative bureaus of the War
Department during the last year. It will also specify the measures
deemed essential for the national defense and to keep up and supply the
requisite military force.

The report of the Secretary of the Navy presents a comprehensive and
satisfactory exhibit of the affairs of that Department and of the naval
service. It is a subject of congratulation and laudable pride to our
countrymen that a Navy of such vast proportions has been organized in so
brief a period and conducted with so much efficiency and success.

The general exhibit of the Navy, including vessels under construction on
the 1st of December, 1864, shows a total of 671 vessels, carrying 4,610
guns, and of 510,396 tons, being an actual increase during the year,
over and above all losses by shipwreck or in battle, of 83 vessels, 167
guns, and 42,427 tons.

The total number of men at this time in the naval service, including
officers, is about 51,000.

There have been captured by the Navy during the year 324 vessels, and
the whole number of naval captures since hostilities commenced is 1,379,
of which 267 are steamers.

The gross proceeds arising from the sale of condemned prize property
thus far reported amount to $14,396,250.51. A large amount of such
proceeds is still under adjudication and yet to be reported.

The total expenditure of the Navy Department of every description,
including the cost of the immense squadrons that have been called into
existence from the 4th of March, 1861, to the 1st of November, 1864, is
$238,647,262.35.

Your favorable consideration is invited to the various recommendations
of the Secretary of the Navy, especially in regard to a navy-yard and
suitable establishment for the construction and repair of iron vessels
and the machinery and armature for our ships, to which reference was
made in my last annual message.

Your attention is also invited to the views expressed in the report in
relation to the legislation of Congress at its last session in respect
to prize on our inland waters.

I cordially concur in the recommendation of the Secretary as to the
propriety of creating the new rank of vice-admiral in our naval service.
Your attention is invited to the report of the Postmaster-General for a
detailed account of the operations and financial condition of the
Post-Office Department.

The postal revenues for the year ending June 30, 1864, amounted to
$12,438,253.78 and the expenditures to $12,644,786.20, the excess of
expenditures over receipts being $206,652.42.

The views presented by the Postmaster-General on the subject of special
grants by the Government in aid of the establishment of new lines of
ocean mail steamships and the policy he recommends for the development
of increased commercial intercourse with adjacent and neighboring
countries should receive the careful consideration of Congress.

It is of noteworthy interest that the steady expansion of population,
improvement, and governmental institutions over the new and unoccupied
portions of our country have scarcely been checked, much less impeded or
destroyed, by our great civil war, which at first glance would seem to
have absorbed almost the entire energies of the nation.

The organization and admission of the State of Nevada has been completed
in conformity with law, and thus our excellent system is firmly
established in the mountains, which once seemed a barren and
uninhabitable waste between the Atlantic States and those which have
grown up on the coast of the Pacific Ocean.

The Territories of the Union are generally in a condition of prosperity
and rapid growth. Idaho and Montana, by reason of their great distance
and the interruption of communication with them by Indian hostilities,
have been only partially organized; but it is understood that these
difficulties are about to disappear, which will permit their
governments, like those of the others, to go into speedy and full
operation. As intimately connected with and promotive of this material
growth of the nation, I ask the attention of Congress to the valuable
information and important recommendations relating to the public lands,
Indian affairs, the Pacific Railroad, and mineral discoveries contained
in the report of the Secretary of the Interior which is herewith
transmitted, and which report also embraces the subjects of patents,
pensions, and other topics of public interest pertaining to his
Department.

The quantity of public land disposed of during the five quarters ending
on the 30th of September last was 4,221,342 acres, of which 1,538,614
acres were entered under the homestead law. The remainder was located
with military land warrants, agricultural scrip certified to States for
railroads, and sold for cash. The cash received from sales and location
fees was $1,019,446.

The income from sales during the fiscal year ending June 30, 1864, was
$678,007.21, against $136,077.95 received during the preceding year. The
aggregate number of acres surveyed during the year has been equal to the
quantity disposed of, and there is open to settlement about 133,000,000
acres of surveyed land.

The great enterprise of connecting the Atlantic with the Pacific States
by railways and telegraph lines has been entered upon with a vigor that
gives assurance of success, notwithstanding the embarrassments arising
from the prevailing high prices of materials and labor. The route of the
main line of the road has been definitely located for 100 miles westward
from the initial point at Omaha City, Nebr., and a preliminary location
of the Pacific Railroad of California has been made from Sacramento
eastward to the great bend of the Truckee River in Nevada. Numerous
discoveries of gold, silver, and cinnabar mines have been added to the
many heretofore known, and the country occupied by the Sierra Nevada and
Rocky mountains and the subordinate ranges now teems with enterprising
labor, which is richly remunerative. It is believed that the product of
the mines of precious metals in that region has during the year reached,
if not exceeded, one hundred millions in value.

It was recommended in my last annual message that our Indian system be
remodeled. Congress at its last session, acting upon the recommendation,
did provide for reorganizing the system in California, and it is
believed that under the present organization the management of the
Indians there will be attended with reasonable success. Much yet remains
to be done to provide for the proper government of the Indians in other
parts of the country, to render it secure for the advancing set-tier,
and to provide for the welfare of the Indian. The Secretary reiterates
his recommendations, and to them the attention of Congress is invited.

The liberal provisions made by Congress for paying pensions to invalid
soldiers and sailors of the Republic and to the widows, orphans, and
dependent mothers of those who have fallen in battle or died of disease
contracted or of wounds received in the service of their country have
been diligently administered. There have been added to the pension rolls
during the year ending the 30th day of June last the names of 16,770
invalid soldiers and of 271 disabled seamen, making the present number
of army invalid pensioners 22,767 and of navy invalid pensioners 712.

Of widows, orphans, and mothers 22,198 have been placed on the army
pension rolls and 248 on the navy rolls. The present number of army
pensioners of this class is 25,433 and of navy pensioners 793. At the
beginning of the year the number of Revolutionary pensioners was 1,430.
Only 12 of them were soldiers, of whom 7 have since died. The remainder
are those who under the law receive pensions because of relationship to
Revolutionary soldiers. During the year ending the 30th of June, 1864,
$4,504,616.92 have been paid to pensioners of all classes.

I cheerfully commend to your continued patronage the benevolent
institutions of the District of Columbia which have hitherto been
established or fostered by Congress, and respectfully refer for
information concerning them and in relation to the Washington Aqueduct,
the Capitol, and other matters of local interest to the report of the
Secretary.

The Agricultural Department, under the supervision of its present
energetic and faithful head, is rapidly commending itself to the great
and vital interest it was created to advance It is peculiarly the
people's Department, in which they feel more directly concerned than in
any other. I commend it to the continued attention and fostering care of
Congress.

The war continues. Since the last annual message all the important lines
and positions then occupied by our forces have been maintained and our
arms have steadily advanced, thus liberating the regions left in rear,
so that Missouri, Kentucky, Tennessee, and parts of other States have
again produced reasonably fair crops.

The most remarkable feature in the military operations of the year is
General Sherman's attempted march of 300 miles directly through the
insurgent region. It tends to show a great increase of our relative
strength that our General in Chief should feel able to confront and hold
in check every active force of the enemy, and yet to detach a
well-appointed large army to move on such an expedition. The result not
yet being known, conjecture in regard to it is not here indulged.

Important movements have also occurred during the year to the effect of
molding society for durability in the Union. Although short of complete
success, it is much in the fight direction that 12,000 citizens in each
of the States of Arkansas and Louisiana have organized loyal State
governments, with free constitutions, and are earnestly struggling to
maintain and administer them. The movements in the same direction, more
extensive though less definite, in Missouri, Kentucky, and Tennessee
should not be overlooked. But Maryland presents the example of complete
success. Maryland is secure to liberty and union for all the future. The
genius of rebellion will no more claim Maryland. Like another foul
spirit being driven out, it may seek to tear her, but it will woo her
no-more.

At the last session of Congress a proposed amendment of the Constitution
abolishing slavery throughout the United States passed the Senate, but
failed for lack of the requisite two-thirds vote in the House of
Representatives. Although the present is the same Congress and nearly
the same members, and without questioning the wisdom or patriotism of
those who stood in opposition, I venture to recommend the
reconsideration and passage of the measure at the present session. Of
course the abstract question is not changed; but in intervening election
shows almost certainly that the next Congress will pass the measure if
this does not. Hence there is only a question of time as to when the
proposed amendment will go to the States for their action. And as it is
to so go at all events, may we not agree that the sooner the better? It
is not claimed that the election has imposed a duty on members to change
their views or their votes any further than, as an additional element to
be considered, their judgment may be affected by it. It is the voice of
the people now for the first time heard upon the question. In a great
national crisis like ours unanimity of action among those seeking a
common end is very desirable--almost indispensable. And yet no approach
to such unanimity is attainable unless some deference shall be paid to
the will of the majority simply because it is the will of the majority.
In this case the common end is the maintenance of the Union, and among
the means to secure that end such will, through the election, is most
dearly declared in favor of such constitutional amendment.

The most reliable indication of public purpose in this country is
derived through our popular elections. Judging by the recent canvass and
its result, the purpose of the people within the loyal States to
maintain the integrity of the Union was never more firm nor more nearly
unanimous than now. The extraordinary calmness and good order with which
the millions of voters met and mingled at the polls give strong
assurance of this. Not only all those who supported the Union ticket, so
called, but a great majority of the opposing party also may be fairly
claimed to entertain and to be actuated by the same purpose. It is an
unanswerable argument to this effect that no candidate for any office
whatever, high or low, has ventured to seek votes on the avowal that he
was for giving up the Union. There have been much impugning of motives
and much heated controversy as to the proper means and best mode of
advancing the Union cause, but on the distinct issue of Union or no
Union the politicians have shown their instinctive knowledge that there
is no diversity among the people. In affording the people the fair
opportunity of showing one to another and to the world this firmness and
unanimity of purpose, the election has been of vast value to the
national cause.

The election has exhibited another tact not less valuable to be
known--the fact that we do not approach exhaustion in the most important
branch of national resources, that of living men. While it is melancholy
to reflect that the war has filled so many graves and carried mourning
to so many hearts, it is some relief to know that, compared with the
surviving, the fallen have been so few. While corps and divisions and
brigades and regiments have formed and fought and dwindled and gone out
of existence, a great majority of the men who composed them are still
living. The same is true of the naval service. The election returns
prove this. So many voters could not else be found. The States regularly
holding elections, both now and four years ago, to wit, California,
Connecticut, Delaware, Illinois, Indiana, Iowa, Kentucky, Maine,
Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire,
New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Vermont,
West Virginia, and Wisconsin, east 3,982,011 votes now, against
3,870,222 cast then, showing an aggregate now of 3,982,011. To this is
to be added 33,762 cast now in the new States of Kansas and Nevada,
which States did not vote in 1860, thus swelling the aggregate to
4,015,773 and the net increase during the three years and a half of war
to 145,551. A table is appended showing particulars. To this again
should be added the number of all soldiers in the field from
Massachusetts, Rhode Island, New Jersey, Delaware, Indiana, Illinois,
and California, who by the laws of those States could not vote away from
their homes, and which number can not be less than 90,000. Nor yet is
this all. The number in organized Territories is triple now what it was
four years ago, while thousands, white and black, join us as the
national arms press back the insurgent lines. So much is shown,
affirmatively and negatively, by the election. It is not material to
inquire how the increase has been produced or to show that it would have
been greater but for the war, which is probably true. The important fact
remains demonstrated that we have more men now than we had when the war
began; that we are not exhausted nor in process of exhaustion; that we
are gaining strength and may if need be maintain the contest
indefinitely. This as to men. Material resources are now more complete
and abundant than ever.

The national resources, then, are unexhausted, and, as we believe,
inexhaustible. The public purpose to reestablish and maintain the
national authority is unchanged, and, as we believe, unchangeable. The
manner of continuing the effort remains to choose. On careful
consideration of all the evidence accessible it seems to me that no
attempt at negotiation with the insurgent leader could result in any
good. He would accept nothing short of severance of the Union, precisely
what we will not and can not give. His declarations to this effect are
explicit and oft repeated. He does not attempt to deceive us. He affords
us no excuse to deceive ourselves. He can not voluntarily reaccept the
Union; we can not voluntarily yield it. Between him and us the issue is
distinct, simple, and inflexible. It is an issue which can only be tried
by war and decided by victory. If we yield, we are beaten; if the
Southern people fail him, he is beaten. Either way it would be the
victory and defeat following war. What is true, however, of him who
heads the insurgent cause is not necessarily true of those who follow.
Although he can not reaccept the Union, they can. Some of them, we know,
already desire peace and reunion. The number of such may increase. They
can at any moment have peace simply by laying down their arms and
submitting to the national authority under the Constitution. Alter so
much the Government could not, if it would, maintain war against them.
The loyal people would not sustain or allow it. If questions should
remain, we would adjust them by the peaceful means of legislation,
conference, courts, and votes, operating only in constitutional and
lawful channels. Some certain, and other possible, questions are and
would be beyond the Executive power to adjust; as, for instance, the
admission of members into Congress and whatever might require the
appropriation of money. The Executive power itself would be greatly
diminished by the cessation of actual war. Pardons and remissions of
forfeitures, however, would still be within Executive control. In what
spirit and temper this control would be exercised can be fairly judged
of by the past.

A year ago general pardon and amnesty, upon specified terms, were
offered to all except certain designated classes, and it was at the same
time made known that the excepted classes were still within
contemplation of special clemency. During the year many availed
themselves of the general provision, and many more would, only that the
signs of bad faith in some led to such precautionary measures as
rendered the practical process less easy and certain. During the same
time also special pardons have been granted to individuals of the
excepted classes, and no voluntary application has been denied. Thus
practically the door has been for a full year open to all except such as
were not in condition to make free choice; that is, such as were in
custody or under constraint. It is still so open to all. But the time
may come, probably will come, when public duty shall demand that it be
closed and that in lieu more rigorous measures than heretofore shall be
adopted. In presenting the abandonment of armed resistance to the
national authority on the part of the insurgents as the only
indispensable condition to ending the war on the part of the Government,
I retract nothing heretofore said as to slavery. I repeat the
declaration made a year a ago, that "while I remain in my present
position I shall not attempt to retract or modify the emancipation
proclamation, nor shall I return to slavery any person who is free by
the terms of that proclamation or by any of the acts of Congress." If
the people should, by whatever mode or means, make it an Executive duty
to re-enslave such persons, another, and not I, must be their instrument
to perform it. In stating a single condition of peace I mean simply to
say that the war will cease on the part of the Government whenever it
shall have ceased on the part of those who began it.

State - 1860 - 1864

California - 118,840 - 110,000

Connecticut - 77,246 - 86,616

Delaware - 16,039 - 16,924

Illinois - 339,693 - 348,235

Indiana - 272,143 - 280,645

Iowa - 128,331 - 143,331

Kentucky - 146,216 - 91,300

Maine - 97,918 - 115,141

Maryland - 92,502 - 72,703

Massachusetts - 169,533 - 175,487

Michigan - 154,747 - 162,413

Minnesota - 34,799 - 42,534

Missouri - 165,538 - 90,000

New Hampshire - 65,953 - 69,111

New Jersey - 121,125 - 128,680

New York - 675,156 - 730,664

Ohio - 42,441 - 470,745

Oregon - 14,410 - 14,410+

Pennsylvania - 476,442 - 572,697

Rhode Island - 19,931 - 22,187

Vermont - 42,844 - 55,811

West Virginia - 46,195 - 33,874

Wisconsin - 152,180 - 148,513 -

***

State of the Union Address
Andrew Johnson
December 4, 1865

Fellow-Citizens of the Senate and House of Representatives:

To express gratitude to God in the name of the people for the
preservation of the United States is my first duty in addressing you.
Our thoughts next revert to the death of the late President by an act of
parricidal treason. The grief of the nation is still fresh. It finds
some solace in the consideration that he lived to enjoy the highest
proof of its confidence by entering on the renewed term of the Chief
Magistracy to which he had been elected; that he brought the civil war
substantially to a close; that his loss was deplored in all parts of the
Union, and that foreign nations have rendered justice to his memory. His
removal cast upon me a heavier weight of cares than ever devolved upon
any one of his predecessors. To fulfill my trust I need the support and
confidence of all who are associated with me in the various departments
of Government and the support and confidence of the people. There is but
one way in which I can hope to gain their necessary aid. It is to state
with frankness the principles which guide my conduct, and their
application to the present state of affairs, well aware that the
efficiency of my labors will in a great measure depend on your and their
undivided approbation.

The Union of the United States of America was intended by its authors to
last as long as the States themselves shall last. "The Union shall be
perpetual" are the words of the Confederation. "To form a more perfect
Union," by an ordinance of the people of the United States, is the
declared purpose of the Constitution. The hand of Divine Providence was
never more plainly visible in the affairs of men than in the framing and
the adopting of that instrument. It is beyond comparison the greatest
event in American history, and, indeed, is it not of all events in
modern times the most pregnant with consequences for every people of the
earth? The members of the Convention which prepared it brought to their
work the experience of the Confederation, of their several States, and
of other republican governments, old and new; but they needed and they
obtained a wisdom superior to experience. And when for its validity it
required the approval of a people that occupied a large part of a
continent and acted separately in many distinct conventions, what is
more wonderful than that, after earnest contention and long discussion,
all feelings and all opinions were ultimately drawn in one way to its
support? The Constitution to which life was thus imparted contains
within itself ample resources for its own preservation. It has power to
enforce the laws, punish treason, and insure domestic tranquillity. In
case of the usurpation of the government of a State by one man or an
oligarchy, it becomes a duty of the United States to make good the
guaranty to that State of a republican form of government, and so to
maintain the homogeneousness of all. Does the lapse of time reveal
defects? A simple mode of amendment is provided in the Constitution
itself, so that its conditions can always be made to conform to the
requirements of advancing civilization. No room is allowed even for the
thought of a possibility of its coming to an end. And these powers of
self-preservation have always been asserted in their complete integrity
by every patriotic Chief Magistrate by Jefferson and Jackson not less
than by Washington and Madison. The parting advice of the Father of his
Country, while yet President, to the people of the United States was
that the free Constitution, which was the work of their hands, might be
sacredly maintained; and the inaugural words of President Jefferson held
up "the preservation of the General Government in its whole
constitutional vigor as the sheet anchor of our peace at home and safety
abroad." The Constitution is the work of "the people of the United
States," and it should be as indestructible as the people.

It is not strange that the framers of the Constitution, which had no
model in the past, should not have fully comprehended the excellence of
their own work. Fresh from a struggle against arbitrary power, many
patriots suffered from harassing fears of an absorption of the State
governments by the General Government, and many from a dread that the
States would break away from their orbits. But the very greatness of our
country should allay the apprehension of encroachments by the General
Government. The subjects that come unquestionably within its
jurisdiction are so numerous that it must ever naturally refuse to be
embarrassed by questions that lie beyond it. Were it otherwise the
Executive would sink beneath the burden, the channels of justice would
be choked, legislation would be obstructed by excess, so that there is a
greater temptation to exercise some of the functions of the General
Government through the States than to trespass on their rightful sphere.
The "absolute acquiescence in the decisions of the majority" was at the
beginning of the century enforced by Jefferson as "the vital principle
of republics;" and the events of the last four years have established,
we will hope forever, that there lies no appeal to force.

The maintenance of the Union brings with it "the support of the State
governments in all their rights," but it is not one of the rights of any
State government to renounce its own place in the Union or to nullify
the laws of the Union. The largest liberty is to be maintained in the
discussion of the acts of the Federal Government, but there is no appeal
from its laws except to the various branches of that Government itself,
or to the people, who grant to the members of the legislative and of the
executive departments no tenure but a limited one, and in that manner
always retain the powers of redress.

"The sovereignty of the States" is the language of the Confederacy, and
not the language of the Constitution. The latter contains the emphatic
words--This Constitution and the laws of the United States which shall
be made in pursuance thereof, and all treaties made or which shall be
made under the authority of the United States, shall be the supreme law
of the land, and the judges in every State shall be bound thereby,
anything in the constitution or laws of any State to the contrary
notwithstanding. Certainly the Government of the United States is a
limited government, and so is every State government a limited
government. With us this idea of limitation spreads through every form
of administration--general, State, and municipal--and rests on the great
distinguishing principle of the recognition of the rights of man. The
ancient republics absorbed the individual in the state--prescribed his
religion and controlled his activity. The American system rests on the
assertion of the equal right of every man to life, liberty, and the
pursuit of happiness, to freedom of conscience, to the culture and
exercise of all his faculties. As a consequence the State government is
limited--as to the General Government in the interest of union, as to
the individual citizen in the interest of freedom.

States, with proper limitations of power, are essential to the existence
of the Constitution of the United States. At the very commencement, when
we assumed a place among the powers of the earth, the Declaration of
Independence was adopted by States; so also were the Articles of
Confederation: and when "the people of the United States" ordained and
established the Constitution it was the assent of the States, one by
one, which gave it vitality. In the event, too, of any amendment to the
Constitution, the proposition of Congress needs the confirmation of
States. Without States one great branch of the legislative government
would be wanting. And if we look beyond the letter of the Constitution
to the character of our country, its capacity for comprehending within
its jurisdiction a vast continental empire is due to the system of
States. The best security for the perpetual existence of the States is
the "supreme authority" of the Constitution of the United States. The
perpetuity of the Constitution brings with it the perpetuity of the
States; their mutual relation makes us what we are, and in our political
system their connection is indissoluble. The whole can not exist without
the parts, nor the parts without the whole. So long as the Constitution
of the United States endures, the States will endure. The destruction of
the one is the destruction of the other; the preservation of the one is
the preservation of the other.

I have thus explained my views of the mutual relations of the
Constitution and the States, because they unfold the principles on which
I have sought to solve the momentous questions and overcome the
appalling difficulties that met me at the very commencement of my
Administration. It has been my steadfast object to escape from the sway
of momentary passions and to derive a healing policy from the
fundamental and unchanging principles of the Constitution.

I found the States suffering from the effects of a civil war. Resistance
to the General Government appeared to have exhausted itself. The United
States had recovered possession of their forts and arsenals, and their
armies were in the occupation of every State which had attempted to
secede. Whether the territory within the limits of those States should
be held as conquered territory, under military authority emanating from
the President as the head of the Army, was the first question that
presented itself for decision.

Now military governments, established for an indefinite period, would
have offered no security for the early suppression of discontent, would
have divided the people into the vanquishers and the vanquished, and
would have envenomed hatred rather than have restored affection. Once
established, no precise limit to their continuance was conceivable. They
would have occasioned an incalculable and exhausting expense. Peaceful
emigration to and from that portion of the country is one of the best
means that can be thought of for the restoration of harmony, and that
emigration would have been prevented; for what emigrant from abroad,
what industrious citizen at home, would place himself willingly under
military rule? The chief persons who would have followed in the train of
the Army would have been dependents on the General Government or men who
expected profit from the miseries of their erring fellow-citizens. The
powers of patronage and rule which would have been exercised under the
President, over a vast and populous and naturally wealthy region are
greater than, unless under extreme necessity, I should be willing to
intrust to any one man. They are such as, for myself, I could never,
unless on occasions of great emergency, consent to exercise. The willful
use of such powers, if continued through a period of years, would have
endangered the purity of the general administration and the liberties of
the States which remained loyal.

Besides, the policy of military rule over a conquered territory would
have implied that the States whose inhabitants may have taken part in
the rebellion had by the act of those inhabitants ceased to exist. But
the true theory is that all pretended acts of secession were from the
beginning null and void. The States can not commit treason nor screen
the individual citizens who may have committed treason any more than
they can make valid treaties or engage in lawful commerce with any
foreign power. The States attempting to secede placed themselves in a
condition where their vitality was impaired, but not extinguished; their
functions suspended, but not destroyed.

But if any State neglects or refuses to perform its offices there is the
more need that the General Government should maintain all its authority
and as soon as practicable resume the exercise of all its functions. On
this principle I have acted, and have gradually and quietly, and by
almost imperceptible steps, sought to restore the rightful energy of the
General Government and of the States. To that end provisional governors
have been appointed for the States, conventions called, governors
elected, legislatures assembled, and Senators and Representatives chosen
to the Congress of the United States. At the same time the courts of the
United States, as far as could be done, have been reopened, so that the
laws of the United States may be enforced through their agency. The
blockade has been removed and the custom-houses reestablished in ports
of entry, so that the revenue of the United States may be collected. The
Post-Office Department renews its ceaseless activity, and the General
Government is thereby enabled to communicate promptly with its officers
and agents. The courts bring security to persons and property; the
opening of the ports invites the restoration of industry and commerce;
the post-office renews the facilities of social intercourse and of
business. And is it not happy for us all that the restoration of each
one of these functions of the General Government brings with it a
blessing to the States over which they are extended? Is it not a sure
promise of harmony and renewed attachment to the Union that after all
that has happened the return of the General Government is known only as
a beneficence?

I know very well that this policy is attended with some risk; that for
its success it requires at least the acquiescence of the States which it
concerns; that it implies an invitation to those States, by renewing
their allegiance to the United States, to resume their functions as
States of the Union. But it is a risk that must be taken. In the choice
of difficulties it is the smallest risk; and to diminish and if possible
to remove all danger, I have felt it incumbent on me to assert one other
power of the General Government--the power of pardon. As no State can
throw a defense over the crime of treason, the power of pardon is
exclusively vested in the executive government of the United States. In
exercising that power I have taken every precaution to connect it with
the clearest recognition of the binding force of the laws of the United
States and an unqualified acknowledgment of the great social change of
condition in regard to slavery which has grown out of the war.

The next step which I have taken to restore the constitutional relations
of the States has been an invitation to them to participate in the high
office of amending the Constitution. Every patriot must wish for a
general amnesty at the earliest epoch consistent with public safety. For
this great end there is need of a concurrence of all opinions and the
spirit of mutual conciliation. All parties in the late terrible conflict
must work together in harmony. It is not too much to ask, in the name of
the whole people, that on the one side the plan of restoration shall
proceed in conformity with a willingness to cast the disorders of the
past into oblivion, and that on the other the evidence of sincerity in
the future maintenance of the Union shall be put beyond any doubt by the
ratification of the proposed amendment to the Constitution, which
provides for the abolition of slavery forever within the limits of our
country. So long as the adoption of this amendment is delayed, so long
will doubt and jealousy and uncertainty prevail. This is the measure
which will efface the sad memory of the past; this is the measure which
will most certainly call population and capital and security to those
parts of the Union that need them most. Indeed, it is not too much to
ask of the States which are now resuming their places in the family of
the Union to give this pledge of perpetual loyalty and peace. Until it
is done the past, however much we may desire it, will not be forgotten,
The adoption of the amendment reunites us beyond all power of
disruption; it heals the wound that is still imperfectly closed: it
removes slavery, the element which has so long perplexed and divided the
country; it makes of us once more a united people, renewed and
strengthened, bound more than ever to mutual affection and support.

The amendment to the Constitution being adopted, it would remain for the
States whose powers have been so long in abeyance to resume their places
in the two branches of the National Legislature, and thereby complete
the work of restoration. Here it is for you, fellow-citizens of the
Senate, and for you, fellow-citizens of the House of Representatives, to
judge, each of you for yourselves, of the elections, returns, and
qualifications of your own members.

The full assertion of the powers of the General Government requires the
holding of circuit courts of the United States within the districts
where their authority has been interrupted. In the present posture of
our public affairs strong objections have been urged to holding those
courts in any of the States where the rebellion has existed; and it was
ascertained by inquiry, that the circuit court of the United States
would not be held within the district of Virginia during the autumn or
early winter, nor until Congress should have "an opportunity to consider
and act on the whole subject." To your deliberations the restoration of
this branch of the civil authority of the United States is therefore
necessarily referred, with the hope that early provision will be made
for the resumption of all its functions. It is manifest that treason,
most flagrant in character, has been committed. Persons who are charged
with its commission should have fair and impartial trials in the highest
civil tribunals of the country, in order that the Constitution and the
laws may be fully vindicated, the truth dearly established and affirmed
that treason is a crime, that traitors should be punished and the
offense made infamous, and, at the same time, that the question may be
judicially settled, finally and forever, that no State of its own will
has the right to renounce its place in the Union.

The relations of the General Government toward the 4,000,000 inhabitants
whom the war has called into freedom have engaged my most serious
consideration. On the propriety of attempting to make the freedmen
electors by the proclamation of the Executive I took for my counsel the
Constitution itself, the interpretations of that instrument by its
authors and their contemporaries, and recent legislation by Congress.
When, at the first movement toward independence, the Congress of the
United States instructed the several States to institute governments of
their own, they left each State to decide for itself the conditions for
the enjoyment of the elective franchise. During the period of the
Confederacy there continued to exist a very great diversity in the
qualifications of electors in the several States, and even within a
State a distinction of qualifications prevailed with regard to the
officers who were to be chosen. The Constitution of the United States
recognizes these diversities when it enjoins that in the choice of
members of the House of Representatives of the United States "the
electors in each State shall have the qualifications requisite for
electors of the most numerous branch of the State legislature." After
the formation of the Constitution it remained, as before, the uniform
usage for each State to enlarge the body of its electors according to
its own judgment, and under this system one State after another has
proceeded to increase the number of its electors, until now universal
suffrage, or something very near it, is the general rule. So fixed was
this reservation of power in the habits of the people and so
unquestioned has been the interpretation of the Constitution that during
the civil war the late President never harbored the purpose--certainly
never avowed the purpose--of disregarding it; and in the acts of
Congress during that period nothing can be found which, during the
continuance of hostilities much less after their close, would have
sanctioned any departure by the Executive from a policy which has so
uniformly obtained. Moreover, a concession of the elective franchise to
the freedmen by act of the President of the United States must have been
extended to all colored men, wherever found, and so must have
established a change of suffrage in the Northern, Middle, and Western
States, not less than in the Southern and Southwestern. Such an act
would have created a new class of voters, and would have been an
assumption of power by the President which nothing in the Constitution
or laws of the United States would have warranted.

On the other hand, every danger of conflict is avoided when the
settlement of the question is referred to the several States. They can,
each for itself, decide on the measure, and whether it is to be adopted
at once and absolutely or introduced gradually and with conditions. In
my judgment the freedmen, if they show patience and manly virtues, will
sooner obtain a participation in the elective franchise through the
States than through the General Government, even if it had power to
intervene. When the tumult of emotions that have been raised by the
suddenness of the social change shall have subsided, it may prove that
they will receive the kindest usage from some of those on whom they have
heretofore most closely depended.

But while I have no doubt that now, after the close of the war, it is
not competent for the General Government to extend the elective
franchise in the several States, it is equally clear that good faith
requires the security of the freedmen in their liberty and their
property, their right to labor, and their right to claim the just return
of their labor. I can not too strongly urge a dispassionate treatment of
this subject, which should be carefully kept aloof from all party
strife. We must equally avoid hasty assumptions of any natural
impossibility for the two races to live side by side in a state of
mutual benefit and good will. The experiment involves us in no
inconsistency; let us, then, go on and make that experiment in good
faith, and not be too easily disheartened. The country is in need of
labor, and the freedmen are in need of employment, culture, and
protection. While their right of voluntary migration and expatriation is
not to be questioned, I would not advise their forced removal and
colonization. Let us rather encourage them to honorable and useful
industry, where it may be beneficial to themselves and to the country;
and, instead of hasty anticipations of the certainty of failure, let
there be nothing wanting to the fair trial of the experiment. The change
in their condition is the substitution of labor by contract for the
status of slavery. The freedman can not fairly be accused of
unwillingness to work so long as a doubt remains about his freedom of
choice in his pursuits and the certainty of his recovering his
stipulated wages. In this the interests of the employer and the employed
coincide. The employer desires in his workmen spirit and alacrity, and
these can be permanently secured in no other way. And if the one ought
to be able to enforce the contract, so ought the other. The public
interest will be best promoted if the several States will provide
adequate protection and remedies for the freedmen. Until this is in some
way accomplished there is no chance for the advantageous use of their
labor, and the blame of ill success will not rest on them.

I know that sincere philanthropy is earnest for the immediate
realization of its remotest aims; but time is always an element in
reform. It is one of the greatest acts on record to have brought
4,000,000 people into freedom. The career of free industry must be
fairly opened to them, and then their future prosperity and condition
must, after all, rest mainly on themselves. If they fail, and so perish
away, let us be careful that the failure shall not be attributable to
any denial of justice. In all that relates to the destiny of the
freedmen we need not be too anxious to read the future; many incidents
which, from a speculative point of view, might raise alarm will quietly
settle themselves. Now that slavery is at an end, or near its end, the
greatness of its evil in the point of view of public economy becomes
more and more apparent. Slavery was essentially a monopoly of labor, and
as such locked the States where it prevailed against the incoming of
free industry. Where labor was the property of the capitalist, the white
man was excluded from employment, or had but the second best chance of
finding it; and the foreign emigrant turned away from the region where
his condition would be so precarious. With the destruction of the
monopoly free labor will hasten from all pans of the civilized world to
assist in developing various and immeasurable resources which have
hitherto lain dormant. The eight or nine States nearest the Gulf of
Mexico have a soil of exuberant fertility, a climate friendly to long
life, and can sustain a denser population than is found as yet in any
part of our country. And the future influx of population to them will be
mainly from the North or from the most cultivated nations in Europe.
From the sufferings that have attended them during our late struggle let
us look away to the future, which is sure to be laden for them with
greater prosperity than has ever before been known. The removal of the
monopoly of slave labor is a pledge that those regions will be peopled
by a numerous and enterprising population, which will vie with any in
the Union in compactness, inventive genius, wealth, and industry.

Our Government springs from and was made for the people--not the people
for the Government. To them it owes allegiance; from them it must derive
its courage, strength, and wisdom. But while the Government is thus
bound to defer to the people, from whom it derives its existence, it
should, from the very consideration of its origin, be strong in its
power of resistance to the establishment of inequalities. Monopolies,
perpetuities, and class legislation are contrary to the genius of free
government, and ought not to be allowed. Here there is no room for
favored classes or monopolies; the principle of our Government is that
of equal laws and freedom of industry. Wherever monopoly attains a
foothold, it is sure to be a source of danger, discord, and trouble. We
shall but fulfill our duties as legislators by according "equal and
exact justice to all men," special privileges to none. The Government is
subordinate to the people; but, as the agent and representative of the
people, it must be held superior to monopolies, which in themselves
ought never to be granted, and which, where they exist, must be
subordinate and yield to the Government.

The Constitution confers on Congress the right to regulate commerce
among the several States. It is of the first necessity, for the
maintenance of the Union, that that commerce should be free and
unobstructed. No State can be justified in any device to tax the transit
of travel and commerce between States. The position of many States is
such that if they were allowed to take advantage of it for purposes of
local revenue the commerce between States might be injuriously burdened,
or even virtually prohibited. It is best, while the country is still
young and while the tendency to dangerous monopolies of this kind is
still feeble, to use the power of Congress so as to prevent any selfish
impediment to the free circulation of men and merchandise. A tax on
travel and merchandise in their transit constitutes one of the worst
forms of monopoly, and the evil is increased if coupled with a denial of
the choice of route. When the vast extent of our country is considered,
it is plain that every obstacle to the free circulation of commerce
between the States ought to be sternly guarded against by appropriate
legislation within the limits of the Constitution.

The report of the Secretary of the Interior explains the condition of
the public lands, the transactions of the Patent Office and the Pension
Bureau, the management of our Indian affairs, the progress made in the
construction of the Pacific Railroad, and furnishes information in
reference to matters of local interest in the District of Columbia. It
also presents evidence of the successful operation of the homestead act,
under the provisions of which 1,160,533 acres of the public lands were
entered during the last fiscal year--more than one-fourth of the whole
number of acres sold or otherwise disposed of during that period. It is
estimated that the receipts derived from this source are sufficient to
cover the expenses incident to the survey and disposal of the lands
entered under this act, and that payments in cash to the extent of from
40 to 50 per cent will be made by settlers who may thus at any time
acquire title before the expiration of the period at which it would
otherwise vest. The homestead policy was established only after long and
earnest resistance; experience proves its wisdom. The lands in the hands
of industrious settlers, whose labor creates wealth and contributes to
the public resources, are worth more to the United States than if they
had been reserved as a solitude for future purchasers.

The lamentable events of the last four years and the sacrifices made by
the gallant men of our Army and Navy have swelled the records of the
Pension Bureau to an unprecedented extent. On the 30th day of June last
the total number of pensioners was 85,986, requiring for their annual
pay, exclusive of expenses, the sum of $8,023,445. The number of
applications that have been allowed since that date will require a large
increase of this amount for the next fiscal year. The means for the
payment of the stipends due under existing laws to our disabled soldiers
and sailors and to the families of such as have perished in the service
of the country will no doubt be cheerfully and promptly granted. A
grateful people will not hesitate to sanction any measures having for
their object the relief of soldiers mutilated and families made
fatherless in the efforts to preserve our national existence.

The report of the Postmaster-General presents an encouraging exhibit of
the operations of the Post-Office Department during the year. The
revenues of the past year, from the loyal States alone, exceeded the
maximum annual receipts from all the States previous to the rebellion in
the sum of $6,038,091; and the annual average increase of revenue during
the last four years, compared with the revenues of the four years
immediately preceding the rebellion, was $3,533,845. The revenues of the
last fiscal year amounted to $14,556,158 and the expenditures to
$13,694,728, leaving a surplus of receipts over expenditures of
$861,430. Progress has been made in restoring the postal service in the
Southern States. The views presented by the Postmaster-General against
the policy of granting subsidies to the ocean mail steamship lines upon
established routes and in favor of continuing the present system, which
limits the compensation for ocean service to the postage earnings, are
recommended to the careful consideration of Congress.

It appears from the report of the Secretary of the Navy that while at
the commencement of the present year there were in commission 530
vessels of all classes and descriptions, armed with 3,000 guns and
manned by 51,000 men, the number of vessels at present in commission is
117, with 830 guns and 12,128 men. By this prompt reduction of the naval
forces the expenses of the Government have been largely diminished, and
a number of vessels purchased for naval purposes from the merchant
marine have been returned to the peaceful pursuits of commerce. Since
the suppression of active hostilities our foreign squadrons have been
reestablished, and consist of vessels much more efficient than those
employed on similar service previous to the rebellion. The suggestion
for the enlargement of the navy-yards, and especially for the
establishment of one in fresh water for ironclad vessels, is deserving
of consideration, as is also the recommendation for a different location
and more ample grounds for the Naval Academy.

In the report of the Secretary of War a general summary is given of the
military campaigns of 1864 and 1865, ending in the suppression of armed
resistance to the national authority in the insurgent States. The
operations of the general administrative bureaus of the War Department
during the past year are detailed and an estimate made of the
appropriations that will be required for military purposes in the fiscal
year commencing the 1st day of July, 1866. The national military force
on the 1st of May, 1865, numbered 1,000,516 men. It is proposed to
reduce the military establishment to a peace footing, comprehending
50,000 troops of all arms, organized so as to admit of an enlargement by
filling up the ranks to 82,600 if the circumstances of the country
should require an augmentation of the Army. The volunteer force has
already been reduced by the discharge from service of over 800,000
troops, and the Department is proceeding rapidly in the work of further
reduction. The war estimates are reduced from $516,240,131 to
$33,814,461, which amount, in the opinion of the Department, is adequate
for a peace establishment. The measures of retrenchment in each bureau
and branch of the service exhibit a diligent economy worthy of
commendation. Reference is also made in the report to the necessity of
providing for a uniform militia system and to the propriety of making
suitable provision for wounded and disabled officers and soldiers.

The revenue system of the country is a subject of vital interest to its
honor and prosperity, and should command the earnest consideration of
Congress. The Secretary of the Treasury will lay before you a full and
detailed report of the receipts and disbursements of the last fiscal
year, of the first quarter of the present fiscal year, of the probable
receipts and expenditures for the other three quarters, and the
estimates for the year following the 30th of June, 1866. I might content
myself with a reference to that report, in which you will find all the
information required for your deliberations and decision, but the
paramount importance of the subject so presses itself on my own mind
that I can not but lay before you my views of the measures which are
required for the good character, and I might almost say for the
existence, of this people. The life of a republic lies certainly in the
energy, virtue, and intelligence of its citizens; but it is equally true
that a good revenue system is the life of an organized government. I
meet you at a time when the nation has voluntarily burdened itself with
a debt unprecedented in our annals. Vast as is its amount, it fades away
into nothing when compared with the countless blessings that will be
conferred upon our country and upon man by the preservation of the
nation's life. Now, on the first occasion of the meeting of Congress
since the return of peace, it is of the utmost importance to inaugurate
a just policy, which shall at once be put in motion, and which shall
commend itself to those who come after us for its continuance. We must
aim at nothing less than the complete effacement of the financial evils
that necessarily followed a state of civil war. We must endeavor to
apply the earliest remedy to the deranged state of the currency, and not
shrink from devising a policy which, with-out being oppressive to the
people, shall immediately begin to effect a reduction of the debt, and,
if persisted in, discharge it fully within a definitely fixed number of
years.

It is our first duty to prepare in earnest for our recovery from the
ever-increasing evils of an irredeemable currency without a sudden
revulsion, and yet without untimely procrastination. For that end we
must each, in our respective positions, prepare the way. I hold it the
duty of the Executive to insist upon frugality in the expenditures, and
a sparing economy is itself a great national resource. Of the banks to
which authority has been given to issue notes secured by bonds of the
United States we may require the greatest moderation and prudence, and
the law must be rigidly enforced when its limits are exceeded. We may
each one of us counsel our active and enterprising countrymen to be
constantly on their guard, to liquidate debts contracted in a paper
currency, and by conducting business as nearly as possible on a system
of cash payments or short credits to hold themselves prepared to return
to the standard of gold and silver. To aid our fellow-citizens in the
prudent management of their monetary affairs, the duty devolves on us to
diminish by law the amount of paper money now in circulation. Five years
ago the bank-note circulation of the country amounted to not much more
than two hundred millions; now the circulation, bank and national,
exceeds seven hundred millions. The simple statement of the fact
recommends more strongly than any words of mine could do the necessity
of our restraining this expansion. The gradual reduction of the currency
is the only measure that can save the business of the country from
disastrous calamities, and this can be almost imperceptibly accomplished
by gradually funding the national circulation in securities that may be
made redeemable at the pleasure of the Government.

Our debt is doubly secure--first in the actual wealth and still greater
undeveloped resources of the country, and next in the character of our
institutions. The most intelligent observers among political economists
have not failed to remark that the public debt of a country is safe in
proportion as its people are free; that the debt of a republic is the
safest of all. Our history confirms and establishes the theory, and is,
I firmly believe, destined to give it a still more signal illustration.
The secret of this superiority springs not merely from the fact that in
a republic the national obligations are distributed more widely through
countless numbers in all classes of society; it has its root in the
character of our laws. Here all men contribute to the public welfare and
bear their fair share of the public burdens. During the war, under the
impulses of patriotism, the men of the great body of the people, without
regard to their own comparative want of wealth, thronged to our armies
and filled our fleets of war, and held themselves ready to offer their
lives for the public good. Now, in their turn, the property and income
of the country should bear their just proportion of the burden of
taxation, while in our impost system, through means of which increased
vitality is incidentally imparted to all the industrial interests of the
nation, the duties should be so adjusted as to fall most heavily on
articles of luxury leaving the necessaries of life as free from taxation
as the absolute wants of the Government economically administered will
justify. No favored class should demand freedom from assessment, and the
taxes should be so distributed as not to fall unduly on the poor, but
rather on the accumulated wealth of the country. We should look at the
national debt just as it is--not as a national blessing, but as a heavy
burden on the industry of the country, to be discharged without
unnecessary delay.

It is estimated by the Secretary of the Treasury that the expenditures
for the fiscal year ending the 30th of June, 1866, will exceed the
receipts $112,194,947. It is gratifying, however, to state that it is
also estimated that the revenue for the year ending the 30th of June,
1867, will exceed the expenditures in the sum of $111,682,818. This
amount, or so much as may be deemed sufficient for the purpose, may be
applied to the reduction of the public debt, which on the 31st day of
October, 1865, was $2,740,854,750. Every reduction will diminish the
total amount of interest to be paid, and so enlarge the means of still
further reductions, until the whole shall be liquidated; and this, as
will be seen from the estimates of the Secretary of the Treasury, may be
accomplished by annual payments even within a period not exceeding
thirty years. I have faith that we shall do all this within a reasonable
time; that as we have amazed the world by the suppression of a civil war
which was thought to be beyond the control of any government, so we
shall equally show the superiority of our institutions by the prompt and
faithful discharge of our national obligations.

The Department of Agriculture under its present direction is
accomplishing much in developing and utilizing the vast agricultural
capabilities of the country, and for information respecting the details
of its management reference is made to the annual report of the
Commissioner.

I have dwelt thus fully on our domestic affairs because of their
transcendent importance. Under any circumstances our great extent of
territory and variety of climate, producing almost everything that is
necessary for the wants and even the comforts of man, make us singularly
independent of the varying policy of foreign powers and protect us
against every temptation to "entangling alliances," while at the present
moment the reestablishment of harmony and the strength that comes from
harmony will be our best security against "nations who feel power and
forget right." For myself, it has been and it will be my constant aim to
promote peace and amity with all foreign nations and powers, and I have
every reason to believe that they all, without exception, are animated
by the same disposition. Our relations with the Emperor of China, so
recent in their origin, are most friendly. Our commerce with his
dominions is receiving new developments, and it is very pleasing to find
that the Government of that great Empire manifests satisfaction with our
policy and reposes just confidence in the fairness which marks our
intercourse. The unbroken harmony between the United States and the
Emperor of Russia is receiving a new support from an enterprise designed
to carry telegraphic lines across the continent of Asia, through his
dominions, and so to connect us with all Europe by a new channel of
intercourse. Our commerce with South America is about to receive
encouragement by a direct line of mail steamships to the rising Empire
of Brazil. The distinguished party of men of science who have recently
left our country to make a scientific exploration of the natural history
and rivers and mountain ranges of that region have received from the
Emperor that generous welcome which was to have been expected from his
constant friendship for the United States and his well-known zeal in
promoting the advancement of knowledge. A hope is entertained that our
commerce with the rich and populous countries that border the
Mediterranean Sea may be largely increased. Nothing will be wanting on
the part of this Government to extend the protection of our flag over
the enterprise of our fellow-citizens. We receive from the powers in
that region assurances of good will; and it is worthy of note that a
special envoy has brought us messages of condolence on the death of our
late Chief Magistrate from the Bey of Tunis, whose rule includes the old
dominions of Carthage, on the African coast.

Our domestic contest, now happily ended, has left some traces in our
relations with one at least of the great maritime powers. The formal
accordance of belligerent rights to the insurgent States was
unprecedented, and has not been justified by the issue. But in the
systems of neutrality pursued by the powers which made that concession
there was a marked difference. The materials of war for the insurgent
States were furnished, in a great measure, from the workshops of Great
Britain, and British ships, manned by British subjects and prepared for
receiving British armaments, sallied from the ports of Great Britain to
make war on American commerce under the shelter of a commission from the
insurgent States. These ships, having once escaped from British ports,
ever afterwards entered them in every part of the world to refit, and so
to renew their depredations. The consequences of this conduct were most
disastrous to the States then in rebellion, increasing their desolation
and misery by the prolongation of our civil contest. It had, moreover,
the effect, to a great extent, to drive the American flag from the sea,
and to transfer much of our shipping and our commerce to the very power
whose subjects had created the necessity for such a change. These events
took place before I was called to the administration of the Government.
The sincere desire for peace by which I am animated led me to approve
the proposal, already made, to submit the question which had thus arisen
between the countries to arbitration. These questions are of such moment
that they must have commanded the attention of the great powers, and are
so interwoven with the peace and interests of every one of them as to
have insured an impartial decision. I regret to inform you that Great
Britain declined the arbitrament, but, on the other hand, invited us to
the formation of a joint commission to settle mutual claims between the
two countries, from which those for the depredations before mentioned
should be excluded. The proposition, in that very unsatisfactory form,
has been declined.

The United States did not present the subject as an impeachment of the
good faith of a power which was professing the most friendly
dispositions, but as involving questions of public law of which the
settlement is essential to the peace of nations; and though pecuniary
reparation to their injured citizens would have followed incidentally on
a decision against Great Britain, such compensation was not their
primary object. They had a higher motive, and it was in the interests of
peace and justice to establish important principles of international
law. The correspondence will be placed before you. The ground on which
the British minister rests his justification is, substantially, that the
municipal law of a nation and the domestic interpretations of that law
are the measure of its duty as a neutral, and I feel bound to declare my
opinion before you and before the world that that justification can not
be sustained before the tribunal of nations. At the same time; I do not
advise to any present attempt at redress by acts of legislation. For the
future, friendship between the two countries must rest on the basis of
mutual justice.

From the moment of the establishment of our free Constitution the
civilized world has been convulsed by revolutions in the interests of
democracy or of monarchy, but through all those revolutions the United
States have wisely and firmly refused to become propagandists of
republicanism. It is the only government suited to our condition; but we
have never sought to impose it on others, and we have consistently
followed the advice of Washington to recommend it only by the careful
preservation and prudent use of the blessing. During all the intervening
period the policy of European powers and of the United States has, on
the whole, been harmonious. Twice, indeed, rumors of the invasion of
some parts of America in the interest of monarchy have prevailed; twice
my predecessors have had occasion to announce the views of this nation
in respect to such interference. On both occasions the remonstrance of
the United States was respected from a deep conviction on the part of
European Governments that the system of noninterference and mutual
abstinence from propagandism was the true rule for the two hemispheres.
Since those times we have advanced in wealth and power, but we retain
the same purpose to leave the nations of Europe to choose their own
dynasties and form their own systems of government. This consistent
moderation may justly demand a corresponding moderation. We should
regard it as a great calamity to ourselves, to the cause of good
government, and to the peace of the world should any European power
challenge the American people, as it were, to the defense of
republicanism against foreign interference. We can not foresee and are
unwilling to consider what opportunities might present themselves, what
combinations might offer to protect ourselves against designs inimical
to our form of government. The United States desire to act in the future
as they have ever acted heretofore; they never will be driven from that
course but by the aggression of European powers, and we rely on the
wisdom and justice of those powers to respect the system of
noninterference which has so long been sanctioned by time, and which by
its good results has approved itself to both continents.

The correspondence between the United States and France in reference to
questions which have become subjects of discussion between the two
Governments will at a proper time be laid before Congress.

When, on the organization of our Government under the Constitution, the
President of the United States delivered his inaugural address to the
two Houses of Congress, he said to them, and through them to the country
and to mankind, that--The preservation of the sacred fire of liberty and
the destiny of the republican model of government are justly considered,
perhaps, as deeply, as finally, staked on the experiment intrusted to
the hands of the American people. And the House of Representatives
answered Washington by the voice of Madison: We adore the Invisible Hand
which has led the American people, through so many difficulties, to
cherish a conscious responsibility for the destiny of republican
liberty. More than seventy-six years have glided away since these words
were spoken; the United States have passed through severer trials than
were foreseen; and now, at this new epoch in our existence as one
nation, with our Union purified by sorrows and strengthened by conflict
and established by the virtue of the people, the greatness of the
occasion invites us once more to repeat with solemnity the pledges of
our fathers to hold ourselves answerable before our fellow-men for the
success of the republican form of government. Experience has proved its
sufficiency in peace and in war; it has vindicated its authority through
dangers and afflictions, and sudden and terrible emergencies, which
would have crushed any system that had been less firmly fixed in the
hearts of the people. At the inauguration of Washington the foreign
relations of the country were few and its trade was repressed by hostile
regulations; now all the civilized nations of the globe welcome our
commerce, and their governments profess toward us amity. Then our
country felt its way hesitatingly along an untried path, with States so
little bound together by rapid means of communication as to be hardly
known to one another, and with historic traditions extending over very
few years; now intercourse between the States is swift and intimate; the
experience of centuries has been crowded into a few generations, and has
created an intense, indestructible nationality. Then our jurisdiction
did not reach beyond the inconvenient boundaries of the territory which
had achieved independence; now, through cessions of lands, first
colonized by Spain and France, the country has acquired a more complex
character, and has for its natural limits the chain of lakes, the Gulf
of Mexico, and on the east and the west the two great oceans. Other
nations were wasted by civil wars for ages before they could establish
for themselves the necessary degree of unity; the latent conviction that
our form of government is the best ever known to the world has enabled
us to emerge from civil war within four years with a complete
vindication of the constitutional authority of the General Government
and with our local liberties and State institutions unimpaired.

The throngs of emigrants that crowd to our shores are witnesses of the
confidence of all peoples in our permanence. Here is the great land of
free labor, where industry is blessed with unexampled rewards and the
bread of the workingman is sweetened by the consciousness that the cause
of the country "is his own cause, his own safety, his own dignity." Here
everyone enjoys the free use of his faculties and the choice of activity
as a natural right. Here, under the combined influence of a fruitful
soil, genial climes, and happy institutions, population has increased
fifteen-fold within a century. Here, through the easy development of
boundless resources, wealth has increased with twofold greater rapidity
than numbers, so that we have become secure against the financial
vicissitudes of other countries and, alike in business and in opinion,
are self-centered and truly independent. Here more and more care is
given to provide education for everyone born on our soil. Here religion,
released from political connection with the civil government, refuses to
subserve the craft of statesmen, and becomes in its independence the
spiritual life of the people. Here toleration is extended to every
opinion, in the quiet certainty that truth needs only a fair field to
secure the victory. Here the human mind goes forth unshackled in the
pursuit of science, to collect stores of knowledge and acquire an
ever-increasing mastery over the forces of nature. Here the national
domain is offered and held in millions of separate freeholds, so that
our fellow-citizens, beyond the occupants of any other part of the
earth, constitute in reality a people. Here exists the democratic form
of government; and that form of government, by the confession of
European statesmen, "gives a power of which no other form is capable,
because it incorporates every man with the state and arouses everything
that belongs to the soul."

Where in past history does a parallel exist to the public happiness
which is within the reach of the people of the United States? Where in
any part of the globe can institutions be found so suited to their
habits or so entitled to their love as their own free Constitution?
Every one of them, then, in whatever part of the land he has his home,
must wish its perpetuity. Who of them will not now acknowledge, in the
words of Washington, that "every step by which the people of the United
States have advanced to the character of an independent nation seems to
have been distinguished by some token of providential agency"? Who will
not join with me in the prayer that the Invisible Hand which has led us
through the clouds that gloomed around our path will so guide us onward
to a perfect restoration of fraternal affection that we of this day may
be able to transmit our great inheritance of State governments in all
their rights, of the General Government in its whole constitutional
vigor, to our posterity, and they to theirs through countless
generations?

***

State of the Union Address
Andrew Johnson
December 3, 1866

Fellow-Citizens of the Senate and House of Representatives:

After a brief interval the Congress of the United States resumes its
annual legislative labors. An all-wise and merciful Providence has
abated the pestilence which visited our shores, leaving its calamitous
traces upon some portions of our country. Peace, order, tranquillity,
and civil authority have been formally declared to exist throughout the
whole of the United States. In all of the States civil authority has
superseded the coercion of arms, and the people, by their voluntary
action, are maintaining their governments in full activity and complete
operation. The enforcement of the laws is no longer "obstructed in any
State by combinations too powerful to be suppressed by the ordinary
course of judicial proceedings," and the animosities engendered by the
war are rapidly yielding to the beneficent influences of our free
institutions and to the kindly effects of unrestricted social and
commercial intercourse. An entire restoration of fraternal feeling must
be the earnest wish of every patriotic heart; and we will have
accomplished our grandest national achievement when, forgetting the sad
events of the past and remembering only their instructive lessons, we
resume our onward career as a free, prosperous, and united people.

In my message of the 4th of December, 1865, Congress was informed of the
measures which had been instituted by the Executive with a view to the
gradual restoration of the States in which the insurrection occurred to
their relations with the General Government. Provisional governors had
been appointed, conventions called, governors elected, legislatures
assembled, and Senators and Representatives chosen to the Congress of
the United States. Courts had been opened for the enforcement of laws
long in abeyance. The blockade had been removed, custom-houses
reestablished, and the internal-revenue laws put in force, in order that
the people might contribute to the national income. Postal operations
had been renewed, and efforts were being made to restore them to their
former condition of efficiency. The States themselves had been asked to
take Dart in the high function of amending the Constitution, and of thus
sanctioning the extinction of African slavery as one of the legitimate
results of our internecine struggle.

Having progressed thus far, the executive department found that it had
accomplished nearly all that was within the scope of its constitutional
authority. One thing, however, yet remained to be done before the work
of restoration could be completed, and that was the admission to
Congress of loyal Senators and Representatives from the States whose
people had rebelled against the lawful authority of the General
Government. This question devolved upon the respective Houses, which by
the Constitution are made the judges of the elections, returns, and
qualifications of their own members, and its consideration at once
engaged the attention of Congress.

In the meantime the executive department--no other plan having been
proposed by Congress--continued its efforts to perfect, as far as was
practicable, the restoration of the proper relations between the
citizens of the respective States, the States, and the Federal
Government, extending from time to time, as the public interests seemed
to require, the judicial, revenue, and postal systems of the country.
With the advice and consent of the Senate, the necessary officers were
appointed and appropriations made by Congress for the payment of their
salaries. The proposition to amend the Federal Constitution, so as to
prevent the existence of slavery within the United States or any place
subject to their jurisdiction, was ratified by the requisite number of
States, and on the 18th day of December, 1865, it was officially
declared to have become valid as a part of the Constitution of the
United States. All of the States in which the insurrection had existed
promptly amended their constitutions so as to make them conform to the
great change thus effected in the organic law of the land; declared null
and void all ordinances and laws of secession; repudiated all pretended
debts and obligations created for the revolutionary purposes of the
insurrection, and proceeded in good faith to the enactment of measures
for the protection and amelioration of the condition of the colored
race. Congress, however, yet hesitated to admit any of these States to
representation, and it was not until toward the close of the eighth
month of the session that an exception was made in favor of Tennessee by
the admission of her Senators and Representatives.

I deem it a subject of profound regret that Congress has thus far failed
to admit to seats loyal Senators and Representatives from the other
States whose inhabitants, with those of Tennessee, had engaged in the
rebellion. Ten States--more than one-fourth of the whole number--remain
without representation; the seats of fifty members in the House of
Representatives and of twenty members in the Senate are yet vacant, not
by their own consent, not by a failure of election, but by the refusal
of Congress to accept their credentials. Their admission, it is
believed, would have accomplished much toward the renewal and
strengthening of our relations as one people and removed serious cause
for discontent on the part of the inhabitants of those States. It would
have accorded with the great principle enunciated in the Declaration of
American Independence that no people ought to bear the burden of
taxation and yet be denied the right of representation. It would have
been in consonance with the express provisions of the Constitution that
"each State shall have at least one Representative" and "that no State,
without its consent, shall be deprived of its equal suffrage in the
Senate." These provisions were intended to secure to every State and to
the people of every State the right of representation in each House of
Congress; and so important was it deemed by the framers of the
Constitution that the equality of the States in the Senate should be
preserved that not even by an amendment of the Constitution can any
State, without its consent, be denied a voice in that branch of the
National Legislature.

It is true it has been assumed that the existence of the States was
terminated by the rebellious acts of their inhabitants, and that, the
insurrection having been suppressed, they were thenceforward to be
considered merely as conquered territories. The legislative, executive,
and judicial departments of the Government have, however, with Heat
distinctness and uniform consistency, refused to sanction an assumption
so incompatible with the nature of our republican system and with the
professed objects of the war. Throughout the recent legislation of
Congress the undeniable fact makes itself apparent that these ten
political communities are nothing less than States of this Union. At the
very commencement of the rebellion each House declared, with a unanimity
as remarkable as it was significant, that the war was not "waged upon
our part in any spirit of oppression, nor for any purpose of conquest or
subjugation, nor purpose of overthrowing or interfering with the rights
or established institutions of those States, but to defend and maintain
the supremacy of the Constitution and all laws made in pursuance
thereof, and to preserve the Union, with all the dignity, equality, and
rights of the several States unimpaired; and that as soon as these
objects" were "accomplished the war ought to cease." In some instances
Senators were permitted to continue their legislative functions, while
in other instances Representatives were elected and admitted to seats
after their States had formally declared their right to withdraw from
the Union and were endeavoring to maintain that right by force of arms.
All of the States whose people were in insurrection, as States, were
included in the apportionment of the direct tax of $20,000,000 annually
laid upon the United States by the act approved 5th August, 1861.
Congress, by the act of March 4, 1862, and by the apportionment of
representation thereunder also recognized their presence as States in
the Union; and they have, for judicial purposes, been divided into
districts, as States alone can be divided. The same recognition appears
in the recent legislation in reference to Tennessee, which evidently
rests upon the fact that the functions of the State were not destroyed
by the rebellion, but merely suspended; and that principle is of course
applicable to those States which, like Tennessee, attempted to renounce
their places in the Union.

The action of the executive department of the Government upon this
subject has been equally definite and uniform, and the purpose of the
war was specifically stated in the proclamation issued by my predecessor
on the 22d day of September, 1862. It was then solemnly proclaimed and
declared "that hereafter, as heretofore, the war will be prosecuted for
the object of practically restoring the constitutional relation between
the United States and each of the States and the people thereof in which
States that relation is or may be suspended or disturbed."

The recognition of the States by the judicial department of the
Government has also been dear and conclusive in all proceedings
affecting them as States had in the Supreme, circuit, and district
courts. In the admission of Senators and Representatives from any and
all of the States there can be no just ground of apprehension that
persons who are disloyal will be clothed with the powers of legislation,
for this could not happen when the Constitution and the laws are
enforced by a vigilant and faithful Congress. Each House is made the
"judge of the elections, returns, and qualifications of its own
members," and may, "with the concurrence of two-thirds, expel a member."
When a Senator or Representative presents his certificate of election,
he may at once be admitted or rejected; or, should there be any question
as to his eligibility, his credentials may be referred for investigation
to the appropriate committee. If admitted to a seat, it must be upon
evidence satisfactory to the House of which he thus becomes a member
that he possesses the requisite constitutional and legal qualifications.
If refused admission as a member for want of due allegiance to the
Government and returned to his constituents, they are admonished that
none but persons loyal to the United States will be allowed a voice in
the legislative councils of the nation, and the political power and
moral influence of Congress are thus effectively exerted in the
interests of loyalty to the Government and fidelity to the Union. Upon
this question, so vitally affecting the restoration of the Union and the
permanency of our present form of government, my convictions, heretofore
expressed, have undergone no change, but, on the contrary, their
correctness has been confirmed by reflection and time. If the admission
of loyal members to seats in the respective Houses of Congress was wise
and expedient a year ago, it is no less wise and expedient now. If this
anomalous condition is right now--if in the exact condition of these
States at the present time it is lawful to exclude them from
representation--I do not see that the question will be changed by the
efflux of time. Ten years hence, if these States remain as they are, the
right of representation will be no stronger, the right of exclusion will
be no weaker.

The Constitution of the United States makes it the duty of the President
to recommend to the consideration of Congress "such measures as he shall
judge necessary and expedient." I know of no measure more imperatively
demanded by every consideration of national interest, sound policy, and
equal justice than the admission of loyal members from the now
unrepresented States. This would consummate the work of restoration and
exert a most salutary influence in the reestablishment of peace,
harmony, and fraternal feeling. It would tend greatly to renew the
confidence of the American people in the vigor and stability of their
institutions. It would bind us more closely together as a nation and
enable us to show to the world the inherent and recuperative power of a
government founded upon the will of the people and established upon the
principles of liberty, justice, and intelligence. Our increased strength
and enhanced prosperity would irrefragably demonstrate the fallacy of
the arguments against free institutions drawn from our recent national
disorders by the enemies of republican government. The admission of
loyal members from the States now excluded from Congress, by allaying
doubt and apprehension, would turn capital now awaiting an opportunity
for investment into the channels of trade and industry. It would
alleviate the present troubled condition of those States, and by
inducing emigration aid in the settlement of fertile regions now
uncultivated and lead to an increased production of those staples which
have added so greatly to the wealth of the nation and commerce of the
world. New fields of enterprise would be opened to our progressive
people and soon the devastations of war would be repaired and all traces
of our domestic differences effaced from the minds of our countrymen.

In our efforts to preserve "the unity of government which constitutes as
one people" by restoring the States to the condition which they held
prior to the rebellion, we should be cautious, lest, having rescued our
nation from perils of threatened disintegration, we resort to
consolidation, and in the end absolute despotism, as a remedy for the
recurrence of similar troubles. The war having terminated, and with it
all occasion for the exercise of powers of doubtful constitutionality,
we should hasten to bring legislation within the boundaries prescribed
by the Constitution and to return to the ancient landmarks established
by our fathers for the guidance of succeeding generations. The
constitution which at any time exists till changed by an explicit and
authentic act of the whole people is sacredly obligatory upon all. If in
the opinion of the people the distribution or modification of the
constitutional powers be in any particular wrong, let it be corrected by
an amendment in the way which the Constitution designates; but let there
be no change by usurpation, for it is the customary weapon by which free
governments are destroyed.  Washington spoke these words to his
countrymen when, followed by their love and gratitude, he voluntarily
retired from the cares of public life. "To keep in all things within the
pale of our constitutional powers and cherish the Federal Union as the
only rock of safety" were prescribed by Jefferson as rules of action to
endear to his "countrymen the true principles of their Constitution and
promote a union of sentiment and action, equally auspicious to their
happiness and safety." Jackson held that the action of the General
Government should always be strictly confined to the sphere of its
appropriate duties, and justly and forcibly urged that our Government is
not to be maintained nor our Union preserved "by invasions of the rights
and powers of the several States. In thus attempting to make our General
Government strong we make it weak. Its true strength consists in leaving
individuals and States as much as possible to themselves; in making
itself felt, not in its power, but in its beneficence; not in its
control, but in its protection; not in binding the States more closely
to the center, but leaving each to move unobstructed in its proper
constitutional orbit." These are the teachings of men whose deeds and
services have made them illustrious, and who, long since withdrawn from
the scenes of life, have left to their country the rich legacy of their
example, their wisdom, and their patriotism. Drawing fresh inspiration
from their lessons, let us emulate them in love of country and respect
for the Constitution and the laws.

The report of the Secretary of the Treasury affords much information
respecting the revenue and commerce of the country. His views upon the
currency and with reference to a proper adjustment of our revenue
system, internal as well as impost, are commended to the careful
consideration of Congress. In my last annual message I expressed my
general views upon these subjects. I need now only call attention to the
necessity of carrying into every department of the Government a system
of rigid accountability, thorough retrenchment, and wise economy. With
no exceptional nor unusual expenditures, the oppressive burdens of
taxation can be lessened by such a modification of our revenue laws as
will be consistent with the public faith and the legitimate and
necessary wants of the Government.

The report presents a much more satisfactory condition of our finances
than one year ago the most sanguine could have anticipated. During the
fiscal year ending the 30th June, 1865 (the last year of the war), the
public debt was increased $941,902,537, and on the 31st of October,
1865, it amounted to $2,740,854,750. On the 31st day of October, 1866,
it had been reduced to $2,552,310,006, the diminution during a period of
fourteen months, commencing September 1, 1865, and ending October 31,
1866, having been $206,379,565. In the last annual report on the state
of the finances it was estimated that during the three quarters of the
fiscal year ending the 30th of June last the debt would be increased
$112,194,947. During that period, however, it was reduced $31,196,387,
the receipts of the year having been $89,905,905 more and the
expenditures $200,529,235 less than the estimates. Nothing could more
clearly indicate than these statements the extent and availability of
the national resources and the rapidity and safety with which under our
form of government, great military and naval establishments can be
disbanded and expenses reduced from a war to a peace footing.

During the fiscal year ending June 30, 1866, the receipts were
$558,032,620 and the expenditures $520,750,940, leaving an available
surplus of $37,281,680. It is estimated that the receipts for the fiscal
year ending the 30th June, 1867, will be $475,061.386, and that the
expenditures will reach the sum of $316,428,078, leaving in the Treasury
a surplus of $158,633,308. For the fiscal year ending June 30, 1886, it
is estimated that the receipts will amount to $436,000,000 and that the
expenditures will be $350,247,641, showing an excess of $85,752,359 in
favor of the Government. These estimated receipts may be diminished by a
reduction of excise and import duties, but after all necessary
reductions shall have been made the revenue of the present and of
following years will doubtless be sufficient to cover all legitimate
charges upon the Treasury and leave a large annual surplus to be applied
to the payment of the principal of the debt. There seems now to be no
good reason why taxes may not be reduced as the country advances in
population and wealth, and yet the debt be extinguished within the next
quarter of a century.

The report of the Secretary of War furnishes valuable and important
information in reference to the operations of his Department during the
past year. Few volunteers now remain in the service, and they are being
discharged as rapidly as they can be replaced by regular troops. The
Army has been promptly paid, carefully provided with medical treatment,
well sheltered and subsisted, and is to be furnished with breech-loading
small arms. The military strength of the nation has been unimpaired by
the discharge of volunteers, the disposition of unserviceable or
perishable stores, and the retrenchment of expenditure. Sufficient war
material to meet any emergency has been retained, and from the disbanded
volunteers standing ready to respond to the national call large armies
can be rapidly organized, equipped, and concentrated. Fortifications on
the coast and frontier have received or are being prepared for more
powerful armaments; lake surveys and harbor and river improvements are
in course of energetic prosecution. Preparations have been made for the
payment of the additional bounties authorized during the recent session
of Congress, under such regulations as will protect the Government from
fraud and secure to the honorably discharged soldier the well-earned
reward of his faithfulness and gallantry. More than 6,000 maimed
soldiers have received artificial limbs or other surgical apparatus, and
41 national cemeteries, containing the remains of 104,526 Union
soldiers, have already been established. The total estimate of military
appropriations is $25,205,669.

It is stated in the report of the Secretary of the Navy that the naval
force at this time consists of 278 vessels, armed with 2,351 guns. Of
these, 115 vessels, carrying 1,029 guns, are in commission, distributed
chiefly among seven squadrons. The number of men in the service is
13,600. Great activity and vigilance have been displayed by all the
squadrons, and their movements have been judiciously and efficiently
arranged in such manner as would best promote American commerce and
protect the rights and interests of our countrymen abroad. The vessels
unemployed are undergoing repairs or are laid up until their services
may be required. Most of the ironclad fleet is at League Island, in the
vicinity of Philadelphia, a place which, until decisive action should be
taken by Congress, was selected by the Secretary of the Navy as the most
eligible location for that class of vessels. It is important that a
suitable public station should be provided for the ironclad fleet. It is
intended that these vessels shall be in proper condition for any
emergency, and it is desirable that the bill accepting League Island for
naval purposes, which passed the House of Representatives at its last
session, should receive final action at an early period, in order that
there may be a suitable public station for this class of vessels, as
well as a navy-yard of area sufficient for the wants of the service on
the Delaware River. The naval pension fund amounts to $11,750,000,
having been increased $2,750,000 during the year. The expenditures of
the Department for the fiscal year ending 30th June last were
$43,324,526, and the estimates for the coming year amount to
$23,568,436. Attention is invited to the condition of our seamen and the
importance of legislative measures for their relief and improvement. The
suggestions in behalf of this deserving class of our fellow-citizens are
earnestly recommended to the favorable attention of Congress.

The report of the Postmaster-General presents a most satisfactory
condition of the postal service and submits recommendations which
deserve the consideration of Congress. The revenues of the Department
for the year ending June 30, 1866, were $14,386,986 and the expenditures
$15,352,079, showing an excess of the latter of $965,093. In
anticipation of this deficiency, however, a special appropriation was
made by Congress in the act approved July 28, 1866. Including the
standing appropriation of $700,000 for free mail matter as a legitimate
portion of the revenues, yet remaining unexpended, the actual deficiency
for the past year is only $265,093--a sum within $51,141 of the amount
estimated in the annual report of 1864. The decrease of revenue compared
with the previous year was 1 1/5 per cent, and the increase of
expenditures, owing principally to the enlargement of the mail service
in the South, was 12 per cent. On the 30th of June last there were in
operation 6,930 mail routes, with an aggregate length of 180,921 miles,
an aggregate annual transportation of 71,837,914 miles, and an aggregate
annual cost, including all expenditures, of $8,410,184. The length of
railroad routes is 32,092 miles and the annual transportation 30,609,467
miles. The length of steamboat routes is 14,346 miles and the annual
transportation 3,411,962 miles. The mail service is rapidly increasing
throughout the whole country, and its steady extension in the Southern
States indicates their constantly improving condition. The growing
importance of the foreign service also merits attention. The post-office
department of Great Britain and our own have agreed upon a preliminary
basis for a new postal convention, which it is believed will prove
eminently beneficial to the commercial interests of the United States,
inasmuch as it contemplates a reduction of the international letter
postage to one-half the existing rates: a reduction of postage with all
other countries to and from which correspondence is transmitted in the
British mail, or in closed mails through the United Kingdom; the
establishment of uniform and reasonable charges for the sea and
territorial transit of correspondence in closed mails; and an allowance
to each post-office department of the right to use all mail
communications established under the authority of the other for the
dispatch of correspondence, either in open or closed mails, on the same
terms as those applicable to the inhabitants of the country providing
the means of transmission.

The report of the Secretary of the Interior exhibits the condition of
those branches of the public service which are committed to his
supervision. During the last fiscal year 4,629,312 acres of public land
were disposed of, 1,892,516 acres of which were entered under the
homestead act. The policy originally adopted relative to the public
lands has undergone essential modifications. Immediate revenue, and not
their rapid settlement, was the cardinal feature of our land system.
Long experience and earnest discussion have resulted in the conviction
that the early development of our agricultural resources and the
diffusion of an energetic population over our vast territory are objects
of far greater importance to the national growth and prosperity than the
proceeds of the sale of the land to the highest bidder in open market.
The preemption laws confer upon the pioneer who complies with the terms
they impose the privilege of purchasing a limited portion of "unoffered
lands" at the minimum price. The homestead enactments relieve the
settler from the payment of purchase money, and secure him a permanent
home upon the condition of residence for a term of years. This liberal
policy invites emigration from the Old and from the more crowded
portions of the New World. Its propitious results are undoubted, and
will be more signally manifested when time shall have given to it a
wider development.

Congress has made liberal grants of public land to corporations in aid
of the construction of railroads and other internal improvements. Should
this policy hereafter prevail, more stringent provisions will be
required to secure a faithful application of the fund. The title to the
lands should not pass, by patent or otherwise, but remain in the
Government and subject to its control until some portion of the road has
been actually built. Portions of them might then from time to time be
conveyed to the corporation, but never in a greater ratio to the whole
quantity embraced by the grant than the completed parts bear to the
entire length of the projected improvement. This restriction would not
operate to the prejudice of any undertaking conceived in good faith and
executed with reasonable energy, as it is the settled practice to
withdraw from market the lands falling within the operation of such
grants, and thus to exclude the inception of a subsequent adverse right.
A breach of the conditions which Congress may deem proper to impose
should work a forfeiture of claim to the lands so withdrawn but
unconveyed, and of title to the lands conveyed which remain unsold.

Operations on the several lines of the Pacific Railroad have been
prosecuted with unexampled vigor and success. Should no unforeseen
causes of delay occur, it is confidently anticipated that this great
thoroughfare will be completed before the expiration of the period
designated by Congress.

During the last fiscal year the amount paid to pensioners, including the
expenses of disbursement, was $13,459,996, and 50,177 names were added
to the pension rolls. The entire number of pensioners June 30, 1866, was
126,722. This fact furnishes melancholy and striking proof of the
sacrifices made to vindicate the constitutional authority of the Federal
Government and to maintain inviolate the integrity of the Union They
impose upon us corresponding obligations. It is estimated that
$33,000,000 will be required to meet the exigencies of this branch of
the service during the next fiscal year.

Treaties have been concluded with the Indians, who, enticed into armed
opposition to our Government at the outbreak of the rebellion, have
unconditionally submitted to our authority and manifested an earnest
desire for a renewal of friendly relations.

During the year ending September 30, 1866, 8,716 patents for useful
inventions and designs were issued, and at that date the balance in the
Treasury to the credit of the patent fund was $228,297.

As a subject upon which depends an immense amount of the production and
commerce of the country, I recommend to Congress such legislation as may
be necessary for the preservation of the levees of the Mississippi
River. It is a matter of national importance that early steps should be
taken, not only to add to the efficiency of these barriers against
destructive inundations, but for the removal of all obstructions to the
free and safe navigation of that great channel of trade and commerce.

The District of Columbia under existing laws is not entitled to that
representation in the national councils which from our earliest history
has been uniformly accorded to each Territory established from time to
time within our limits. It maintains peculiar relations to Congress, to
whom the Constitution has granted the power of exercising exclusive
legislation over the seat of Government. Our fellow-citizens residing in
the District, whose interests are thus confided to the special
guardianship of Congress, exceed in number the population of several of
our Territories, and no just reason is perceived why a Delegate of their
choice should not be admitted to a seat in the House of Representatives.
No mode seems so appropriate and effectual of enabling them to make
known their peculiar condition and wants and of securing the local
legislation adapted to them. I therefore recommend the passage of a law
authorizing the electors of the District of Columbia to choose a
Delegate, to be allowed the same rights and privileges as a Delegate
representing a Territory. The increasing enterprise and rapid progress
of improvement in the District are highly gratifying, and I trust that
the efforts of the municipal authorities to promote the prosperity of
the national metropolis will receive the efficient and generous
cooperation of Congress.

The report of the Commissioner of Agriculture reviews the operations of
his Department during the past year, and asks the aid of Congress in its
efforts to encourage those States which, scourged by war, are now
earnestly engaged in the reorganization of domestic industry.

It is a subject of congratulation that no foreign combinations against
our domestic peace and safety or our legitimate influence among the
nations have been formed or attempted. While sentiments of
reconciliation, loyalty, and patriotism have increased at home, a more
just consideration of our national character and rights has been
manifested by foreign nations.

The entire success of the Atlantic telegraph between the coast of
Ireland and the Province of Newfoundland is an achievement which has
been justly celebrated in both hemispheres as the opening of an era in
the progress of civilization. There is reason to expect that equal
success will attend and even greater results follow the enterprise for
connecting the two continents through the Pacific Ocean by the projected
line of telegraph between Kamchatka and the Russian possessions in
America.

The resolution of Congress protesting against pardons by foreign
governments of persons convicted of infamous offenses on condition of
emigration to our country has been communicated to the states with which
we maintain intercourse, and the practice, so justly the subject of
complaint on our part, has not been renewed.

The congratulations of Congress to the Emperor of Russia upon his escape
from attempted assassination have been presented to that humane and
enlightened ruler and received by him with expressions of grateful
appreciation.

The Executive, warned of an attempt by Spanish American adventurers to
induce the emigration of freedmen of the United States to a foreign
country, protested against the project as one which, if consummated,
would reduce them to a bondage even more oppressive than that from which
they have just been relieved. Assurance has been received from the
Government of the State in which the plan was matured that the
proceeding will meet neither its encouragement nor approval. It is a
question worthy of your consideration whether our laws upon this subject
are adequate to the prevention or punishment of the crime thus
meditated.

In the month of April last, as Congress is aware, a friendly arrangement
was made between the Emperor of France and the President of the United
States for the withdrawal from Mexico of the French expeditionary
military forces. This withdrawal was to be effected in three
detachments, the first of which, it was understood, would leave Mexico
in November, now past, the second in March next, and the third and last
in November, 1867. Immediately upon the completion of the evacuation the
French Government was to assume the same attitude of nonintervention in
regard to Mexico as is held by the Government of the United States.
Repeated assurances have been given by the Emperor since that agreement
that he would complete the promised evacuation within the period
mentioned, or sooner.

It was reasonably expected that the proceedings thus contemplated would
produce a crisis of great political interest in the Republic of Mexico.
The newly appointed minister of the United States, Mr. Campbell, was
therefore sent forward on the 9th day of November last to assume his
proper functions as minister plenipotentiary of the United States to
that Republic. It was also thought expedient that he should be attended
in the vicinity of Mexico by the Lieutenant-General of the Army of the
United States, with the view of obtaining such information as might be
important to determine the course to be pursued by the United States in
reestablishing and maintaining necessary and proper intercourse with the
Republic of Mexico. Deeply interested in the cause of liberty and
humanity, it seemed an obvious duty on our part to exercise whatever
influence we possessed for the restoration and permanent establishment
in that country of a domestic and republican form of government.

Such was the condition of our affairs in regard to Mexico when, on the
22d of November last, official information was received from Paris that
the Emperor of France had some time before decided not to withdraw a
detachment of his forces in the month of November past, according to
engagement, but that this decision was made with the purpose of
withdrawing the whole of those forces in the ensuing spring. Of this
determination, however, the United States had not received any notice or
intimation, and so soon as the information was received by the
Government care was taken to make known its dissent to the Emperor of
France.

I can not forego the hope that France will reconsider the subject and
adopt some resolution in regard to the evacuation of Mexico which will
conform as nearly as practicable with the existing engagement, and thus
meet the just expectations of the United States. The papers relating to
the subject will be laid before you. It is believed that with the
evacuation of Mexico by the expeditionary forces no subject for serious
differences between France and the United States would remain. The
expressions of the Emperor and people of France warrant a hope that the
traditionary friendship between the two countries might in that case be
renewed and permanently restored.

A claim of a citizen of the United States for indemnity for spoliations
committed on the high seas by the French authorities in the exercise of
a belligerent power against Mexico has been met by the Government of
France with a proposition to defer settlement until a mutual convention
for the adjustment of all claims of citizens and subjects of both
countries arising out of the recent wars on this continent shall be
agreed upon by the two countries. The suggestion is not deemed
unreasonable, but it belongs to Congress to direct the manner in which
claims for indemnity by foreigners as well as by citizens of the United
States arising out of the late civil war shall be adjudicated and
determined. I have no doubt that the subject of all such claims will
engage your attention at a convenient and proper time.

It is a matter of regret that no considerable advance has been made
toward an adjustment of the differences between the United States and
Great Britain arising out of the depredations upon our national commerce
and other trespasses committed during our civil war by British subjects,
in violation of international law and treaty obligations. The delay,
however, may be believed to have resulted in no small degree from the
domestic situation of Great Britain. An entire change of ministry
occurred in that country during the last session of Parliament. The
attention of the new ministry was called to the subject at an early day,
and there is some reason to expect that it will now be considered in a
becoming and friendly spirit. The importance of an early disposition of
the question can not be exaggerated. Whatever might be the wishes of the
two Governments, it is manifest that good will and friendship between
the two countries can not be established until a reciprocity in the
practice of good faith and neutrality shall be restored between the
respective nations.

On the 6th of June last, in violation of our neutrality laws, a military
expedition and enterprise against the British North American colonies
was projected and attempted to be carried on within the territory and
jurisdiction of the United States. In obedience to the obligation
imposed upon the Executive by the Constitution to see that the laws are
faithfully executed, all citizens were warned by proclamation against
taking part in or aiding such unlawful proceedings, and the proper
civil, military, and naval officers were directed to take all necessary
measures for the enforcement of the laws. The expedition failed, but it
has not been without its painful consequences. Some of our citizens who,
it was alleged, were engaged in the expedition were captured, and have
been brought to trial as for a capital offense in the Province of
Canada. Judgment and sentence of death have been pronounced against
some, while others have been acquitted. Fully believing in the maxim of
government that severity of civil punishment for misguided persons who
have engaged in revolutionary attempts which have disastrously failed is
unsound and unwise, such representations have been made to the British
Government in behalf of the convicted persons as, being sustained by an
enlightened and humane judgment, will, it is hoped, induce in their
cases an exercise of clemency and a judicious amnesty to all who were
engaged in the movement. Counsel has been employed by the Government to
defend citizens of the United States on trial for capital offenses in
Canada, and a discontinuance of the prosecutions which were instituted
in the courts of the United States against those who took part in the
expedition has been directed.

I have regarded the expedition as not only political in its nature, but
as also in a great measure foreign from the United States in its causes,
character, and objects. The attempt was understood to be made in
sympathy with an insurgent party in Ireland, and by striking at a
British Province on this continent was designed to aid in obtaining
redress for political grievances which, it was assumed, the people of
Ireland had suffered at the hands of the British Government during a
period of several centuries. The persons engaged in it were chiefly
natives of that country, some of whom had, while others had not, become
citizens of the United States under our general laws of naturalization.
Complaints of misgovernment in Ireland continually engage the attention
of the British nation, and so great an agitation is now prevailing in
Ireland that the British Government have deemed it necessary to suspend
the writ of habeas corpus in that country. These circumstances must
necessarily modify the opinion which we might otherwise have entertained
in regard to an expedition expressly prohibited by our neutrality laws.
So long as those laws remain upon our statute books they should be
faithfully executed, and if they operate harshly, unjustly, or
oppressively Congress alone can apply the remedy by their modification
or repeal.

Political and commercial interests of the United States are not unlikely
to be affected in some degree by events which are transpiring in the
eastern regions of Europe, and the time seems to have come when our
Government ought to have a proper diplomatic representation in Greece.

This Government has claimed for all persons not convicted or accused or
suspected of crime an absolute political right of self-expatriation and
a choice of new national allegiance. Most of the European States have
dissented from this principle, and have claimed a right to hold such of
their subjects as have emigrated to and been naturalized in the United
States and afterwards returned on transient visits to their native
countries to the performance of military service in like manner as
resident subjects. Complaints arising from the claim in this respect
made by foreign states have heretofore been matters of controversy
between the United States and some of the European powers, and the
irritation consequent upon the failure to settle this question increased
during the war in which Prussia, Italy, and Austria were recently
engaged. While Great Britain has never acknowledged the right of
expatriation, she has not for some years past practically insisted upon
the opposite doctrine. France has been equally forbearing, and Prussia
has proposed a compromise, which, although evincing increased
liberality, has not been accepted by the United States. Peace is now
prevailing everywhere in Europe, and the present seems to be a favorable
time for an assertion by Congress of the principle so long maintained by
the executive department that naturalization by one state fully exempts
the native-born subject of any other state from the performance of
military service under any foreign government, so long as he does not
voluntarily renounce its rights and benefits.

In the performance of a duty imposed upon me by the Constitution I have
thus submitted to the representatives of the States and of the people
such information of our domestic and foreign affairs as the public
interests seem to require. Our Government is now undergoing its most
trying ordeal, and my earnest prayer is that the peril may be
successfully and finally passed without impairing its original strength
and symmetry. The interests of the nation are best to be promoted by the
revival of fraternal relations, the complete obliteration of our past
differences, and the reinauguration of all the pursuits of peace.
Directing our efforts to the early accomplishment of these great ends,
let us endeavor to preserve harmony between the coordinate departments
of the Government, that each in its proper sphere may cordially
cooperate with the other in securing the maintenance of the
Constitution, the preservation of the Union, and the perpetuity of our
free institutions.

***

State of the Union Address
Andrew Johnson
December 3, 1867

Fellow-Citizens of the Senate and House of Representatives:

The continued disorganization of the Union, to which the President has
so often called the attention of Congress, is yet a subject of profound
and patriotic concern. We may, however, find some relief from that
anxiety in the reflection that the painful political situation, although
before untried by ourselves, is not new in the experience of nations.
Political science, perhaps as highly perfected in our own time and
country as in any other, has not yet disclosed any means by which civil
wars can be absolutely prevented. An enlightened nation, however, with a
wise and beneficent constitution of free government, may diminish their
frequency and mitigate their severity by directing all its proceedings
in accordance with its fundamental law.

When a civil war has been brought to a close, it is manifestly the first
interest and duty of the state to repair the injuries which the war has
inflicted, and to secure the benefit of the lessons it teaches as fully
and as speedily as possible. This duty was, upon the termination of the
rebellion, promptly accepted not only by the executive department, but
by the insurrectionary States themselves, and restoration in the first
moment of peace was believed to be as easy and certain as it was
indispensable. The expectations, however, then so reasonably and
confidently entertained were disappointed by legislation from which I
felt constrained by my obligations to the Constitution to withhold my
assent.

It is therefore a source of profound regret that in complying with the
obligation imposed upon the President by the Constitution to give to
Congress from time to time information of the state of the Union I am
unable to communicate any definitive adjustment satisfactory to the
American people, of the questions which since the close of the rebellion
have agitated the public mind. On the contrary, candor compels me to
declare that at this time there is no Union as our fathers understood
the term, and as they meant it to be understood by us. The Union which
they established can exist only where all the States are represented in
both Houses of Congress; where one State is as free as another to
regulate its internal concerns according to its own will, and where the
laws of the central Government, strictly confined to matters of national
jurisdiction, apply with equal force to all the people of every section.
That such is not the present "state of the Union" is a melancholy fact,
and we must all acknowledge that the restoration of the States to their
proper legal relations with the Federal Government and with one another,
according to the terms of the original compact, would be the greatest
temporal blessing which God, in His kindest providence, could bestow
upon this nation. It becomes our imperative duty to consider whether or
not it is impossible to effect this most desirable consummation.  The
Union and the Constitution are inseparable. As long as one is obeyed by
all parties, the other will be preserved; and if one is destroyed, both
must perish together. The destruction of the Constitution will be
followed by other and still greater calamities. It was ordained not only
to form a more perfect union between the States, but to "establish
justice, insure domestic tranquillity, provide for the common defense,
promote the general welfare, and secure the blessings of liberty to
ourselves and our posterity." Nothing but implicit obedience to its
requirements in all parts of the country will accomplish these great
ends. Without that obedience we can look forward only to continual
outrages upon individual rights, incessant breaches of the public peace,
national weakness, financial dishonor, the total loss of our prosperity,
the general corruption of morals, and the final extinction of popular
freedom. To save our country from evils so appalling as these, we should
renew our efforts again and again.

To me the process of restoration seems perfectly plain and simple. It
consists merely in a faithful application of the Constitution and laws.
The execution of the laws is not now obstructed or opposed by physical
force. There is no military or other necessity, real or pretended, which
can prevent obedience to the Constitution, either North or South. All
the rights and all the obligations of States and individuals can be
protected and enforced by means perfectly consistent with the
fundamental law. The courts may be everywhere open, and if open their
process would be unimpeded. Crimes against the United States can be
prevented or punished by the proper judicial authorities in a manner
entirely practicable and legal. There is therefore no reason why the
Constitution should not be obeyed, unless those who exercise its powers
have determined that it shall be disregarded and violated. The mere
naked will of this Government, or of some one or more of its branches,
is the only obstacle that can exist to a perfect union of all the
States.

On this momentous question and some of the measures growing out of it I
have had the misfortune to differ from Congress, and have expressed my
convictions without reserve, though with becoming deference to the
opinion of the legislative department. Those convictions are not only
unchanged, but strengthened by subsequent events and further reflection
The transcendent importance of the subject will be a sufficient excuse
for calling your attention to some of the reasons which have so strongly
influenced my own judgment. The hope that we may all finally concur in a
mode of settlement consistent at once with our true interests and with
our sworn duties to the Constitution is too natural and too just to be
easily relinquished.

It is clear to my apprehension that the States lately in rebellion are
still members of the National Union. When did they cease to be so? The
"ordinances of secession" adopted by a portion (in most of them a very
small portion) of their citizens were mere nullities. If we admit now
that they were valid and effectual for the purpose intended by their
authors, we sweep from under our feet the whole ground upon which we
justified the war. Were those States afterwards expelled from the Union
by the war? The direct contrary was averred by this Government to be its
purpose, and was so understood by all those who gave their blood and
treasure to aid in its prosecution. It can not be that a successful war,
waged for the preservation of the Union, had the legal effect of
dissolving it. The victory of the nation's arms was not the disgrace of
her policy; the defeat of secession on the battlefield was not the
triumph of its lawless principle. Nor could Congress, with or without
the consent of the Executive, do anything which would have the effect,
directly or indirectly, of separating the States from each other. To
dissolve the Union is to repeal the Constitution which holds it
together, and that is a power which does not belong to any department of
this Government, or to all of them united.

This is so plain that it has been acknowledged by all branches of the
Federal Government. The Executive (my predecessor as well as myself) and
the heads of all the Departments have uniformly acted upon the principle
that the Union is not only undissolved, but indissoluble. Congress
submitted an amendment of the Constitution to be ratified by the
Southern States, and accepted their acts of ratification as a necessary
and lawful exercise of their highest function. If they were not States,
or were States out of the Union, their consent to a change in the
fundamental law of the Union would have been nugatory, and Congress in
asking it committed a political absurdity. The judiciary has also given
the solemn sanction of its authority to the same view of the case. The
judges of the Supreme Court have included the Southern States in their
circuits, and they are constantly, in banc and elsewhere, exercising
jurisdiction which does not belong to them unless those States are
States of the Union.

If the Southern States are component parts of the Union, the
Constitution is the supreme law for them, as it is for all the other
States. They are bound to obey it, and so are we. The right of the
Federal Government, which is clear and unquestionable, to enforce the
Constitution upon them implies the correlative obligation on our part to
observe its limitations and execute its guaranties. Without the
Constitution we are nothing; by, through, and under the Constitution we
are what it makes us. We may doubt the wisdom of the law, we may not
approve of its provisions, but we can not violate it merely because it
seems to confine our powers within limits narrower than we could wish.
It is not a question of individual or class or sectional interest, much
less of party predominance, but of duty--of high and sacred duty--which
we are all sworn to perform. If we can not support the Constitution with
the cheerful alacrity of those who love and believe in it, we must give
to it at least the fidelity of public servants who act under solemn
obligations and commands which they dare not disregard.

The constitutional duty is not the only one which requires the States to
be restored. There is another consideration which, though of minor
importance, is yet of great weight. On the 22d day of July, 1861,
Congress declared by an almost unanimous vote of both Houses that the
war should be conducted solely for the purpose of preserving the Union
and maintaining the supremacy of the Federal Constitution and laws,
without impairing the dignity, equality, and rights of the States or of
individuals, and that when this was done the war should cease. I do not
say that this declaration is personally binding on those who joined in
making it, any more than individual members of Congress are personally
bound to pay a public debt created under a law for which they voted. But
it was a solemn public, official pledge of the national honor, and I can
not imagine upon what grounds the repudiation of it is to be justified.
If it be said that we are not bound to keep faith with rebels, let it be
remembered that this promise was not made to rebels only. Thousands of
true men in the South were drawn to our standard by it, and hundreds of
thousands in the North gave their lives in the belief that it would be
carried out. It was made on the day after the first great battle of the
war had been fought and lost. All patriotic and intelligent men then saw
the necessity of giving such an assurance, and believed that without it
the war would end in disaster to our cause. Having given that assurance
in the extremity of our peril, the violation of it now, in the day of
our power, would be a rude rending of that good faith which holds the
moral world together; our country would cease to have any claim upon the
confidence of men; it would make the war not only a failure, but a
fraud.

Being sincerely convinced that these views are correct, I would be
unfaithful to my duty if I did not recommend the repeal of the acts of
Congress which place ten of the Southern States under the domination of
military masters. If calm reflection shall satisfy a majority of your
honorable bodies that the acts referred to are not only a violation of
the national faith, but in direct conflict with the Constitution, I dare
not permit myself to doubt that you will immediately strike them from
the statute book.

To demonstrate the unconstitutional character of those acts I need do no
more than refer to their general provisions. It must be seen at once
that they are not authorized. To dictate what alterations shall be made
in the constitutions of the several States; to control the elections of
State legislators and State officers, members of Congress and electors
of President and Vice-President, by arbitrarily declaring who shall vote
and who shall be excluded from that privilege; to dissolve State
legislatures or prevent them from assembling; to dismiss judges and
other civil functionaries of the State and appoint others without regard
to State law; to organize and operate all the political machinery of the
States; to regulate the whole administration of their domestic and local
affairs according to the mere will of strange and irresponsible agents,
sent among them for that purpose--these are powers not granted to the
Federal Government or to any one of its branches. Not being granted, we
violate our trust by assuming them as palpably as we would by acting in
the face of a positive interdict; for the Constitution forbids us to do
whatever it does not affirmatively authorize, either by express words or
by clear implication. If the authority we desire to use does not come to
us through the Constitution, we can exercise it only by usurpation, and
usurpation is the most dangerous of political crimes. By that crime the
enemies of free government in all ages have worked out their designs
against public liberty and private right. It leads directly and
immediately to the establishment of absolute rule, for undelegated power
is always unlimited and unrestrained.

The acts of Congress in question are not only objectionable for their
assumption of ungranted power, but many of their provisions are in
conflict with the direct prohibitions of the Constitution. The
Constitution commands that a republican form of government shall be
guaranteed to all the States; that no person shall be deprived of life,
liberty, or property without due process of law, arrested without a
judicial warrant, or punished without a fair trial before an impartial
jury; that the privilege of habeas corpus shall not be denied in time of
peace, and that no bill of attainder shall be passed even against a
single individual. Yet the system of measures established by these acts
of Congress does totally subvert and destroy the form as well as the
substance of republican government in the ten States to which they
apply. It binds them hand and foot in absolute slavery, and subjects
them to a strange and hostile power, more unlimited and more likely to
be abused than any other now known among civilized men. It tramples down
all those rights in which the essence of liberty consists, and which a
free government is always most careful to protect. It denies the habeas
corpus and the trial by jury. Personal freedom, property, and life, if
assailed by the passion, the prejudice, or the rapacity of the ruler,
have no security whatever. It has the effect of a bill of attainder or
bill of pains and penalties, not upon a few individuals, but upon whole
masses, including the millions who inhabit the subject States, and even
their unborn children. These wrongs, being expressly forbidden, can not
be constitutionally inflicted upon any portion of our people, no matter
how they may have come within our jurisdiction, and no matter whether
they live in States, Territories, or districts.

I have no desire to save from the proper and just consequences of their
great crime those who engaged in rebellion against the Government, but
as a mode of punishment the measures under consideration are the most
unreasonable that could be invented. Many of those people are perfectly
innocent; many kept their fidelity to the Union untainted to the last;
many were incapable of any legal offense; a large proportion even of the
persons able to bear arms were forced into rebellion against their will,
and of those who are guilty with their own consent the degrees of guilt
are as various as the shades of their character and temper. But these
acts of Congress confound them all together in one common doom.
Indiscriminate vengeance upon classes, sects, and parties, or upon whole
communities, for offenses committed by a portion of them against the
governments to which they owed obedience was common in the barbarous
ages of the world; but Christianity and civilization have made such
progress that recourse to a punishment so cruel and unjust would meet
with the condemnation of all unprejudiced and right-minded men. The
punitive justice of this age, and especially of this country, does not
consist in stripping whole States of their liberties and reducing all
their people, without distinction, to the condition of slavery. It deals
separately with each individual, confines itself to the forms of law,
and vindicates its own purity by an impartial examination of every case
before a competent judicial tribunal. If this does not satisfy all our
desires with regard to Southern rebels, let us console ourselves by
reflecting that a free Constitution, triumphant in war and unbroken in
peace, is worth far more to us and our children than the gratification
of any present feeling.

I am aware it is assumed that this system of government for the Southern
States is not to be perpetual. It is true this military government is to
be only provisional, but it is through this temporary evil that a
greater evil is to be made perpetual. If the guaranties of the
Constitution can be broken provisionally to serve a temporary purpose,
and in a part only of the country, we can destroy them everywhere and
for all time. Arbitrary measures often change, but they generally change
for the worse. It is the curse of despotism that it has no halting
place. The intermitted exercise of its power brings no sense of security
to its subjects, for they can never know what more they will be called
to endure when its red right hand is armed to plague them again. Nor is
it possible to conjecture how or where power, unrestrained by law, may
seek its next victims. The States that are still free may be enslaved at
any moment; for if the Constitution does not protect all, it protects
none.

It is manifestly and avowedly the object of these laws to confer upon
Negroes the privilege of voting and to disfranchise such a number of
white citizens as will give the former a clear majority at all elections
in the Southern States. This, to the minds of some persons, is so
important that a violation of the Constitution is justified as a means
of bringing it about. The morality is always false which excuses a wrong
because it proposes to accomplish a desirable end. We are not permitted
to do evil that good may come. But in this case the end itself is evil,
as well as the means. The subjugation of the States to Negro domination
would be worse than the military despotism under which they are now
suffering. It was believed beforehand that the people would endure any
amount of military oppression for any length of time rather than degrade
themselves by subjection to the Negro race. Therefore they have been
left without a choice. Negro suffrage was established by act of
Congress, and the military officers were commanded to superintend the
process of clothing the Negro race with the political privileges torn
from white men.

The blacks in the South are entitled to be well and humanely governed,
and to have the protection of just laws for all their rights of person
and property. If it were practicable at this time to give them a
Government exclusively their own, under which they might manage their
own affairs in their own way, it would become a grave question whether
we ought to do so, or whether common humanity would not require us to
save them from themselves. But under the circumstances this is only a
speculative point. It is not proposed merely that they shall govern
themselves, but that they shall rule the white race, make and administer
State laws, elect Presidents and members of Congress, and shape to a
greater or less extent the future destiny of the whole country. Would
such a trust and power be safe in such hands?

The peculiar qualities which should characterize any people who are fit
to decide upon the management of public affairs for a great state have
seldom been combined. It is the glory of white men to know that they
have had these qualities in sufficient measure to build upon this
continent a great political fabric and to preserve its stability for
more than ninety years, while in every other part of the world all
similar experiments have failed. But if anything can be proved by known
facts, if all reasoning upon evidence is not abandoned, it must be
acknowledged that in the progress of nations Negroes have shown less
capacity for government than any other race of people. No independent
government of any form has ever been successful in their hands. On the
contrary, wherever they have been left to their own devices they have
shown a constant tendency to relapse into barbarism. In the Southern
States, however, Congress has undertaken to confer upon them the
privilege of the ballot. Just released from slavery, it may be doubted
whether as a class they know more than their ancestors how to organize
and regulate civil society. Indeed, it is admitted that the blacks of
the South are not only regardless of the rights of property, but so
utterly ignorant of public affairs that their voting can consist in
nothing more than carrying a ballot to the place where they are directed
to deposit it. I need not remind you that the exercise of the elective
franchise is the highest attribute of an American citizen, and that when
guided by virtue, intelligence, patriotism, and a proper appreciation of
our free institutions it constitutes the true basis of a democratic form
of government, in which the sovereign power is lodged in the body of the
people. A trust artificially created, not for its own sake, but solely
as a means of promoting the general welfare, its influence for good must
necessarily depend upon the elevated character and true allegiance of
the elector. It ought, therefore, to be reposed in none except those who
are fitted morally and mentally to administer it well; for if conferred
upon persons who do not justly estimate its value and who are
indifferent as to its results, it will only serve as a means of placing
power in the hands of the unprincipled and ambitious, and must eventuate
in the complete destruction of that liberty of which it should be the
most powerful conservator. I have therefore heretofore urged upon your
attention the great danger--to be apprehended from an untimely extension
of the elective franchise to any new class in our country, especially
when the large majority of that class, in wielding the power thus placed
in their hands, can not be expected correctly to comprehend the duties
and responsibilities which pertain to suffrage. Yesterday, as it were,
4,000,000 persons were held in a condition of slavery that had existed
for generations; to-day they are freemen and are assumed by law to be
citizens. It can not be presumed, from their previous condition of
servitude, that as a class they are as well informed as to the nature of
our Government as the intelligent foreigner who makes our land the home
of his choice. In the case of the latter neither a residence of five
years and the knowledge of our institutions which it gives nor
attachment to the principles of the Constitution are the only conditions
upon which he can be admitted to citizenship; he must prove in addition
a good moral character, and thus give reasonable ground for the belief
that he will be faithful to the obligations which he assumes as a
citizen of the Republic. Where a people--the source of all political
power--speak by their suffrages through the instrumentality of the
ballot box, it must be carefully guarded against the control of those
who are corrupt in principle and enemies of free institutions, for it
can only become to our political and social system a safe conductor of
healthy popular sentiment when kept free from demoralizing influences.
Controlled through fraud and usurpation by the designing, anarchy and
despotism must inevitably follow. In the hands of the patriotic and
worthy our Government will be preserved upon the principles of the
Constitution inherited from our fathers. It follows, therefore, that in
admitting to the ballot box a new class of voters not qualified for the
exercise of the elective franchise we weaken our system of government
instead of adding to its strength and durability.

I yield to no one in attachment to that rule of general suffrage which
distinguishes our policy as a nation. But there is a limit, wisely
observed hitherto, which makes the ballot a privilege and a trust, and
which requires of some classes a time suitable for probation and
preparation. To give it indiscriminately to a new class, wholly
unprepared by previous habits and opportunities to perform the trust
which it demands, is to degrade it, and finally to destroy its power,
for it may be safely assumed that no political truth is better
established than that such indiscriminate and all-embracing extension of
popular suffrage must end at last in its destruction. I repeat the
expression of my willingness to join in any plan within the scope of our
constitutional authority which promises to better the condition of the
Negroes in the South, by encouraging them in industry, enlightening
their minds, improving their morals, and giving protection to all their
just rights as freedmen. But the transfer of our political inheritance
to them would, in my opinion, be an abandonment of a duty which we owe
alike to the memory of our fathers and the rights of our children.

The plan of putting the Southern States wholly and the General
Government partially into the hands of Negroes is proposed at a time
peculiarly unpropitious. The foundations of society have been broken up
by civil war. Industry must be reorganized, justice reestablished,
public credit maintained, and order brought out of confusion. To
accomplish these ends would require all the wisdom and virtue of the
great men who formed our institutions originally. I confidently believe
that their descendants will be equal to the arduous task before them,
but it is worse than madness to expect that Negroes will perform it for
us. Certainly we ought not to ask their assistance till we despair of
our own competency.

The great difference between the two races in physical, mental, and
moral characteristics will prevent an amalgamation or fusion of them
together in one homogeneous mass. If the inferior obtains the ascendency
over the other, it will govern with reference only to its own interests
for it will recognize no common interest--and create such a tyranny as
this continent has never yet witnessed. Already the Negroes are
influenced by promises of confiscation and plunder. They are taught to
regard as an enemy every white man who has any respect for the rights of
his own race. If this continues it must become worse and worse, until
all order will be subverted, all industry cease, and the fertile fields
of the South grow up into a wilderness. Of all the dangers which our
nation has yet encountered, none are equal to those which must result
from the success of the effort now making to Africanize the half of our
country.

I would not put considerations of money in competition with justice and
right; but the expenses incident to "reconstruction" under the system
adopted by Congress aggravate what I regard as the intrinsic wrong of
the measure itself. It has cost uncounted millions already, and if
persisted in will add largely to the weight of taxation, already too
oppressive to be borne without just complaint, and may finally reduce
the Treasury of the nation to a condition of bankruptcy. We must not
delude ourselves. It will require a strong standing army and probably
more than $200,000,000 per annum to maintain the supremacy of Negro
governments after they are established. The sum thus thrown away would,
if properly used, form a sinking fund large enough to pay the whole
national debt in less than fifteen years. It is vain to hope that
Negroes will maintain their ascendency themselves. Without military
power they are wholly incapable of holding in subjection the white
people of the South.

I submit to the judgment of Congress whether the public credit may not
be injuriously affected by a system of measures like this. With our debt
and the vast private interests which are complicated with it, we can not
be too cautious of a policy which might by possibility impair the
confidence of the world in our Government. That confidence can only be
retained by carefully inculcating the principles of justice and honor on
the popular mind and by the most scrupulous fidelity to all our
engagements of every sort. Any serious breach of the organic law,
persisted in for a considerable time, can not but create fears for the
stability of our institutions. Habitual violation of prescribed rules,
which we bind ourselves to observe, must demoralize the people. Our only
standard of civil duty being set at naught, the sheet anchor of our
political morality is lost, the public conscience swings from its
moorings and yields to every impulse of passion and interest. If we
repudiate the Constitution, we will not be expected to care much for
mere pecuniary obligations. The violation of such a pledge as we made on
the 22d day of July, 1861, will assuredly diminish the market value of
our other promises. Besides, if we acknowledge that the national debt
was created, not to hold the States in the Union, as the taxpayers were
led to suppose, but to expel them from it and hand them over to be
governed by Negroes, the moral duty to pay it may seem much less clear.
I say it may seem so, for I do not admit that this or any other argument
in favor of repudiation can be entertained as sound; but its influence
on some classes of minds may well be apprehended. The financial honor of
a great commercial nation, largely indebted and with a republican form
of government administered by agents of the popular choice, is a thing
of such delicate texture and the destruction of it would be followed by
such unspeakable calamity that every true patriot must desire to avoid
whatever might expose it to the slightest danger.

The great interests of the country require immediate relief from these
enactments. Business in the South is paralyzed by a sense of general
insecurity, by the terror of confiscation, and the dread of Negro
supremacy. The Southern trade, from which the North would have derived
so great a profit under a government of law, still languishes, and can
never be revived until it ceases to be fettered by the arbitrary power
which makes all its operations unsafe. That rich country--the richest in
natural resources the world ever saw--is worse than lost if it be not
soon placed under the protection of a free constitution. Instead of
being, as it ought to be, a source of wealth and power, it will become
an intolerable burden upon the rest of the nation.

Another reason for retracing our steps will doubtless be seen by
Congress in the late manifestations of public opinion upon this subject.
We live in a country where the popular will always enforces obedience to
itself, sooner or later. It is vain to think of opposing it with
anything short of legal authority backed by overwhelming force. It can
not have escaped your attention that from the day on which Congress
fairly and formally presented the proposition to govern the Southern
States by military force, with a view to the ultimate establishment of
Negro supremacy, every expression of the general sentiment has been more
or less adverse to it. The affections of this generation can not be
detached from the institutions of their ancestors. Their determination
to preserve the inheritance of free government in their own hands and
transmit it undivided and unimpaired to their own posterity is too
strong to be successfully opposed. Every weaker passion will disappear
before that love of liberty and law for which the American people are
distinguished above all others in the world.

How far the duty of the President "to preserve, protect, and defend the
Constitution" requires him to go in opposing an unconstitutional act of
Congress is a very serious and important question, on which I have
deliberated much and felt extremely anxious to reach a proper
conclusion. Where an act has been passed according to the forms of the
Constitution by the supreme legislative authority, and is regularly
enrolled among the public statutes of the country, Executive resistance
to it, especially in times of high party excitement, would be likely to
produce violent collision between the respective adherents of the two
branches of the Government. This would be simply civil war, and civil
war must be resorted to only as the last remedy for the worst of evils.
Whatever might tend to provoke it should be most carefully avoided. A
faithful and conscientious magistrate will concede very much to honest
error, and something even to perverse malice, before he will endanger
the public peace; and he will not adopt forcible measures, or such as
might lead to force, as long as those which are peaceable remain open to
him or to his constituents. It is true that cases may occur in which the
Executive would be compelled to stand on its rights, and maintain them
regardless of all consequences. If Congress should pass an act which is
not only in palpable conflict with the Constitution, but will certainly,
if carried out, produce immediate and irreparable injury to the organic
structure of the Government, and if there be neither judicial remedy for
the wrongs it inflicts nor power in the people to protect themselves
without the official aid of their elected defender--if, for instance,
the legislative department should pass an act even through all the forms
of law to abolish a coordinate department of the Government--in such a
case the President must take the high responsibilities of his office and
save the life of the nation at all hazards. The so-called reconstruction
acts, though as plainly unconstitutional as any that can be imagined,
were not believed to be within the class last mentioned. The people were
not wholly disarmed of the power of self-defense. In all the Northern
States they still held in their hands the sacred right of the ballot,
and it was safe to believe that in due time they would come to the
rescue of their own institutions. It gives me pleasure to add that the
appeal to our common constituents was not taken in vain, and that my
confidence in their wisdom and virtue seems not to have been misplaced.

It is well and publicly known that enormous frauds have been perpetrated
on the Treasury and that colossal fortunes have been made at the public
expense. This species of corruption has increased, is increasing, and if
not diminished will soon bring us into total ruin and disgrace. The
public creditors and the taxpayers are alike interested in an honest
administration of the finances, and neither class will long endure the
large-handed robberies of the recent past. For this discreditable state
of things there are several causes. Some of the taxes are so laid as to
present an irresistible temptation to evade payment. The great sums
which officers may win by connivance at fraud create a pressure which is
more than the virtue of many can withstand, and there can be no doubt
that the open disregard of constitutional obligations avowed by some of
the highest and most influential men in the country has greatly weakened
the moral sense of those who serve in subordinate places. The expenses
of the United States, including interest on the public debt, are more
than six times as much as they were seven years ago. To collect and
disburse this vast amount requires careful supervision as well as
systematic vigilance. The system, never perfected, was much disorganized
by the "tenure-of-office bill," which has almost destroyed official
accountability. The President may be thoroughly convinced that an
officer is incapable, dishonest, or unfaithful to the Constitution, but
under the law which I have named the utmost he can do is to complain to
the Senate and ask the privilege of supplying his place with a better
man. If the Senate be regarded as personally or politically hostile to
the President, it is natural, and not altogether unreasonable, for the
officer to expect that it will take his part as far as possible, restore
him to his place, and give him a triumph over his Executive superior.
The officer has other chances of impunity arising from accidental
defects of evidence, the mode of investigating it, and the secrecy of
the hearing. It is not wonderful that official malfeasance should become
bold in proportion as the delinquents learn to think themselves safe. I
am entirely persuaded that under such a rule the President can not
perform the great duty assigned to him of seeing the laws faithfully
executed, and that it disables him most especially from enforcing that
rigid accountability which is necessary to the due execution of the
revenue laws.

The Constitution invests the President with authority to decide whether
a removal should be made in any given case; the act of Congress declares
in substance that he shall only accuse such as he supposes to be
unworthy of their trust. The Constitution makes him sole judge in the
premises, but the statute takes away his jurisdiction, transfers it to
the Senate, and leaves him nothing but the odious and sometimes
impracticable duty of becoming a prosecutor. The prosecution is to be
conducted before a tribunal whose members are not, like him, responsible
to the whole people, but to separate constituent bodies, and who may
hear his accusation with great disfavor. The Senate is absolutely
without any known standard of decision applicable to such a case. Its
judgment can not be anticipated, for it is not governed by any rule. The
law does not define what shall be deemed good cause for removal. It is
impossible even to conjecture what may or may not be so considered by
the Senate. The nature of the subject forbids clear proof. If the charge
be incapacity, what evidence will support it? Fidelity to the
Constitution may be understood or misunderstood in a thousand different
ways, and by violent party men, in violent party times, unfaithfulness
to the Constitution may even come to be considered meritorious. If the
officer be accused of dishonesty, how shall it be made out? Will it be
inferred from acts unconnected with public duty, from private history,
or from general reputation, or must the President await the commission
of an actual misdemeanor in office? Shall he in the meantime risk the
character and interest of the nation in the hands of men to whom he can
not give his confidence? Must he forbear his complaint until the
mischief is done and can not be prevented? If his zeal in the public
service should impel him to anticipate the overt act, must he move at
the peril of being tried himself for the offense of slandering his
subordinate? In the present circumstances of the country someone must be
held responsible for official delinquency of every kind. It is extremely
difficult to say where that responsibility should be thrown if it be not
left where it has been placed by the Constitution. But all just men will
admit that the President ought to be entirely relieved from such
responsibility if he can not meet it by reason of restrictions placed by
law upon his action.

The unrestricted power of removal from office is a very great one to be
trusted even to a magistrate chosen by the general suffrage of the whole
people and accountable directly to them for his acts. It is undoubtedly
liable to abuse, and at some periods of our history perhaps has been
abused. If it be thought desirable and constitutional that it should be
so limited as to make the President merely a common informer against
other public agents, he should at least be permitted to act in that
capacity before some open tribunal, independent of party politics, ready
to investigate the merits of every case, furnished with the means of
taking evidence, and bound to decide according to established rules.
This would guarantee the safety of the accuser when he acts in good
faith, and at the same time secure the rights of the other party. I
speak, of course, with all proper respect for the present Senate, but it
does not seem to me that any legislative body can be so constituted as
to insure its fitness for these functions.

It is not the theory of this Government that public offices are the
property of those who hold them. They are given merely as a trust for
the public benefit, sometimes for a fixed period, sometimes during good
behavior, but generally they are liable to be terminated at the pleasure
of the appointing power, which represents the collective majesty and
speaks the will of the people. The forced retention in office of a
single dishonest person may work great injury to the public interests.
The danger to the public service comes not from the power to remove, but
from the power to appoint. Therefore it was that the framers of the
Constitution left the power of removal unrestricted, while they gave the
Senate a fight to reject all appointments which in its opinion were not
fit to be made. A little reflection on this subject will probably
satisfy all who have the good of the country at heart that our best
course is to take the Constitution for our guide, walk in the path
marked out by the founders of the Republic, and obey the rules made
sacred by the observance of our great predecessors.

The present condition of our finances and circulating medium is one to
which your early consideration is invited.

The proportion which the currency of any country should bear to the
whole value of the annual produce circulated by its means is a question
upon which political economists have not agreed. Nor can it be
controlled by legislation, but must be left to the irrevocable laws
which everywhere regulate commerce and trade. The circulating medium
will ever irresistibly flow to those points where it is in greatest
demand. The law of demand and supply is as unerring as that which
regulates the tides of the ocean; and, indeed, currency, like the tides,
has its ebbs and flows throughout the commercial world.

At the beginning of the rebellion the bank-note circulation of the
country amounted to not much more than $200,000,000; now the circulation
of national-bank notes and those known as "legal-tenders" is nearly
seven hundred millions. While it is urged by some that this amount
should be increased, others contend that a decided reduction is
absolutely essential to the best interests of the country. In view of
these diverse opinions, it may be well to ascertain the real value of
our paper issues when compared with a metallic or convertible currency.
For this purpose let us inquire how much gold and silver could be
purchased by the seven hundred millions of paper money now in
circulation. Probably not more than half the amount of the latter,
showing that when our paper currency is compared with gold and silver
its commercial value is compressed into three hundred and fifty
millions. This striking fact makes it the obvious duty of the
Government, as early as may be consistent with the principles of sound
political economy, to take such measures as will enable the holder of
its notes and those of the national banks to convert them without loss
into specie or its equivalent. A reduction of our paper circulating
medium need not necessarily follow. This, however, would depend upon the
law of demand and supply, though it should be borne in mind that by
making legal-tender and bank notes convertible into coin or its
equivalent their present specie value in the hands of their holders
would be enhanced 100 per cent.

Legislation for the accomplishment of a result so desirable is demanded
by the highest public considerations. The Constitution contemplates that
the circulating medium of the country shall be uniform in quality and
value. At the time of the formation of that instrument the country had
just emerged from the War of the Revolution, and was suffering from the
effects of a redundant and worthless paper currency. The sages of that
period were anxious to protect their posterity from the evils that they
themselves had experienced. Hence in providing a circulating medium they
conferred upon Congress the power to coin money and regulate the value
thereof, at the same time prohibiting the States from making anything
but gold and silver a tender in payment of debts.

The anomalous condition of our currency is in striking contrast with
that which was originally designed. Our circulation now embraces, first,
notes of the national banks, which are made receivable for all dues to
the Government, excluding imposts, and by all its creditors, excepting
in payment of interest upon its bonds and the securities themselves;
second, legal-tender notes, issued by the United States, and which the
law requires shall be received as well in payment of all debts between
citizens as of all Government dues, excepting imposts; and, third, gold
and silver coin. By the operation of our present system of finance,
however, the metallic currency, when collected, is reserved only for one
class of Government creditors, who, holding its bonds, semiannually
receive their interest in coin from the National Treasury. They are thus
made to occupy an invidious position, which may be used to strengthen
the arguments of those who would bring into disrepute the obligations of
the nation. In the payment of all its debts the plighted faith of the
Government should be inviolably maintained. But while it acts with
fidelity toward the bondholder who loaned his money that the integrity
of the Union might be preserved, it should at the same time observe good
faith with the great masses of the people, who, having rescued the Union
from the perils of rebellion, now bear the burdens of taxation, that the
Government may be able to fulfill its engagements. There is no reason
which will be accepted as satisfactory by the people why those who
defend us on the land and protect us on the sea; the pensioner upon the
gratitude of the nation, bearing the scars and wounds received while in
its service; the public servants in the various Departments of the
Government; the farmer who supplies the soldiers of the Army and the
sailors of the Navy; the artisan who toils in the nation's workshops, or
the mechanics and laborers who build its edifices and construct its
forts and vessels of war, should, in payment of their just and
hard-earned dues, receive depreciated paper, while another class of
their countrymen, no more deserving, are paid in coin of gold and
silver. Equal and exact justice requires that all the creditors of the
Government should be paid in a currency possessing a uniform value. This
can only be accomplished by the restoration of the currency to the
standard established by the Constitution; and by this means we would
remove a discrimination which may, if it has not already done so, create
a prejudice that may become deep rooted and widespread and imperil the
national credit.

The feasibility of making our currency correspond with the
constitutional standard may be seen by reference to a few facts derived
from our commercial statistics.

The production of precious metals in the United States from 1849 to
1857, inclusive, amounted to $579,000,000; from 1858 to 1860, inclusive,
to $137,500,000, and from 1861 to 1867, inclusive, to
$457,500,000--making the grand aggregate of products since 1849
$1,174,000,000. The amount of specie coined from 1849 to 1857 inclusive,
was $439,000,000; from 1858 to 1860, inclusive, $125,000,000, and from
1861 to 1867, inclusive, $310,000,000--making the total coinage since
1849 $874,000,000. From 1849 to 1857, inclusive, the net exports of
specie amounted to $271,000,000; from 1858 to 1860, inclusive, to
$148,000,000, and from 1861 to 1867, inclusive, $322,000,000--making the
aggregate of net exports since 1849 $741,000,000. These figures show an
excess of product over net exports of $433,000,000. There are in the
Treasury $111,000,000 in coin, something more than $40,000,000 in
circulation on the Pacific Coast, and a few millions in the national and
other banks--in all about $160,000,000. This, however, taking into
account the specie in the country prior to 1849 leaves more than
$300,000,000 which have not been accounted for by exportation, and
therefore may yet remain in the country.

These are important facts and show how completely the inferior currency
will supersede the better, forcing it from circulation among the masses
and causing it to be exported as a mere article of trade, to add to the
money capital of foreign lands. They show the necessity of retiring our
paper money, that the return of gold and silver to the avenues of trade
may be invited and a demand created which will cause the retention at
home of at least so much of the productions of our rich and
inexhaustible gold-bearing fields as may be sufficient for purposes of
circulation. It is unreasonable to expect a return to a sound currency
so long as the Government by continuing to issue irredeemable notes
fills the channels of circulation with depreciated paper.
Notwithstanding a coinage by our mints, since 1849, of $874,000,000, the
people are now strangers to the currency which was designed for their
use and benefit, and specimens of the precious metals bearing the
national device are seldom seen, except when produced to gratify the
interest excited by their novelty. If depreciated paper is to be
continued as the permanent currency of the country, and all our coin is
to become a mere article of traffic and speculation, to the enhancement
in price of all that is indispensable to the comfort of the people, it
would be wise economy to abolish our mints thus saving the nation the
care and expense incident to such establishments, and let all our
precious metals be exported in bullion. The time has come, however, when
the Government and national banks should be required to take the most
efficient steps and make all necessary arrangements for a resumption of
specie payments at the earliest practicable period. Specie payments
having been once resumed by the Government and banks, all notes or bills
of paper issued by either of a less denomination than $20 should by law
be excluded from circulation, so that the people may have the benefit
and convenience of a gold and silver currency which in all their
business transactions will be uniform in value at home and abroad. Every
man of property or industry, every man who desires to preserve what he
honestly possesses or to obtain what he can honestly earn, has a direct
interest in maintaining a safe circulating medium--such a medium as
shall be real and substantial, not liable to vibrate with opinions, not
subject to be blown up or blown down by the breath of speculation, but
to be made stable and secure. A disordered currency is one of the
greatest political evils. It undermines the virtues necessary for the
support of the social system and encourages propensities destructive of
its happiness; it wars against industry, frugality, and economy, and it
fosters the evil spirits of extravagance and speculation. It has been
asserted by one of our profound and most gifted statesmen that--Of all
the contrivances for cheating the laboring classes of mankind, none has
been more effectual than that which deludes them with paper money. This
is the most effectual of inventions to fertilize the rich man's fields
by the sweat of the poor man's brow. Ordinary tyranny, oppression,
excessive taxation--these bear lightly on the happiness of the mass of
the community compared with a fraudulent currency and the robberies
committed by depreciated paper. Our own history has recorded for our
instruction enough, and more than enough, of the demoralizing tendency,
the injustice, and the intolerable oppression on the virtuous and well
disposed of a degraded paper currency authorized by law or in any way
countenanced by government. It is one of the most successful devices, in
times of peace or war, expansions or revulsions, to accomplish the
transfer of all the precious metals from the great mass of the people
into the hands of the few, where they are hoarded in secret places or
deposited in strong boxes under bolts and bars, while the people are
left to endure all the inconvenience, sacrifice, and demoralization
resulting from the use of a depreciated and worthless paper money.

The condition of our finances and the operations of our revenue system
are set forth and fully explained in the able and instructive report of
the Secretary of the Treasury. On the 30th of June, 1866, the public
debt amounted to $2,783,425,879; on the 30th of June last it was
$2,692,199,215, showing a reduction during the fiscal year of
$91,226,664. During the fiscal year ending June 30, 1867, the receipts
were $490,634,010 and the expenditures $346,729,129, leaving an
available surplus of $143,904,880. It is estimated that the receipts for
the fiscal year ending June 30, 1868, will be $417,161,928 and that the
expenditures will reach the sum of $393,269,226, leaving in the Treasury
a surplus of $23,892,702. For the fiscal year ending June 30, 1869, it
is estimated that the receipts will amount to $381,000,000 and that the
expenditures will be $372,000,000, showing an excess of $9,000,000 in
favor of the Government.

The attention of Congress is earnestly invited to the necessity of a
thorough revision of our revenue system. Our internal-revenue laws and
impost system should be so adjusted as to bear most heavily on articles
of luxury, leaving the necessaries of life as free from taxation as may
be consistent with the real wants of the Government, economically
administered. Taxation would not then fall unduly on the man of moderate
means; and while none would be entirely exempt from assessment, all, in
proportion to their pecuniary abilities, would contribute toward the
support of the State. A modification of the internal-revenue system, by
a large reduction in the number of articles now subject to tax, would be
followed by results equally advantageous to the citizen and the
Government. It would render the execution of the law less expensive and
more certain, remove obstructions to industry, lessen the temptations to
evade the law, diminish the violations and frauds perpetrated upon its
provisions, make its operations less inquisitorial, and greatly reduce
in numbers the army of taxgatherers created by the system, who "take
from the mouth of honest labor the bread it has earned." Retrenchment,
reform, and economy should be carried into every branch of the public
service, that the expenditures of the Government may be reduced and the
people relieved from oppressive taxation; a sound currency should be
restored, and the public faith in regard to the national debt sacredly
observed. The accomplishment of these important results, together with
the restoration of the Union of the States upon the principles of the
Constitution, would inspire confidence at home and abroad in the
stability of our institutions and bring to the nation prosperity, peace,
and good will.

The report of the Secretary of War ad interim exhibits the operations of
the Army and of the several bureaus of the War Department. The aggregate
strength of our military force on the 30th of September last was 56,315.
The total estimate for military appropriations is $77,124,707, including
a deficiency in last year's appropriation of $13,600,000. The payments
at the Treasury on account of the service of the War Department from
January 1 to October 29, 1867--a period of ten months--amounted to
$109,807,000. The expenses of the military establishment, as well as the
numbers of the Army, are now three times as great as they have ever been
in time of peace, while the discretionary, power is vested in the
Executive to add millions to this expenditure by an increase of the Army
to the maximum strength allowed by the law.

The comprehensive report of the Secretary of the Interior furnishes
interesting information in reference to the important branches of the
public service connected with his Department. The menacing attitude of
some of the warlike bands of Indians inhabiting the district of country
between the Arkansas and Platte rivers and portions of Dakota Territory
required the presence of a large military force in that region.
Instigated by real or imaginary grievances, the Indians occasionally
committed acts of barbarous violence upon emigrants and our frontier
settlements; but a general Indian war has been providentially averted.
The commissioners under the act of 20th July, 1867, were invested with
full power to adjust existing difficulties, negotiate treaties with the
disaffected bands, and select for them reservations remote from the
traveled routes between the Mississippi and the Pacific. They entered
without delay upon the execution of their trust, but have not yet made
any official report of their proceedings. It is of vital importance that
our distant Territories should be exempt from Indian outbreaks, and that
the construction of the Pacific Railroad, an object of national
importance, should not be interrupted by hostile tribes. These objects,
as well as the material interests and the moral and intellectual
improvement of the Indians, can be most effectually secured by
concentrating them upon portions of country set apart for their
exclusive use and located at points remote from our highways and
encroaching white settlements.

Since the commencement of the second session of the Thirty-ninth
Congress 510 miles of road have been constructed on the main line and
branches of the Pacific Railway. The line from Omaha is rapidly
approaching the eastern base of the Rocky Mountains, while the terminus
of the last section of constructed road in California, accepted by the
Government on the 24th day of October last, was but 11 miles distant
from the summit of the Sierra Nevada. The remarkable energy evinced by
the companies offers the strongest assurance that the completion of the
road from Sacramento to Omaha will not be long deferred.

During the last fiscal year 7,041,114 acres of public land were disposed
of, and the cash receipts from sales and fees exceeded by one-half
million dollars the sum realized from those sources during the preceding
year. The amount paid to pensioners, including expenses of
disbursements, was $18,619,956, and 36,482 names were added to the
rolls. The entire number of pensioners on the 30th of June last was
155,474. Eleven thousand six hundred and fifty-five patents and designs
were issued during the year ending September 30, 1867, and at that date
the balance in the Treasury to the credit of the patent fund was
$286,607.

The report of the Secretary of the Navy states that we have seven
squadrons actively and judiciously employed, under efficient and able
commanders, in protecting the persons and property of American citizens,
maintaining the dignity and power of the Government, and promoting the
commerce and business interests of our countrymen in every part of the
world. Of the 238 vessels composing the present Navy of the United
States, 56, carrying 507 guns, are in squadron service. During the year
the number of vessels in commission has been reduced 12, and there are
13 less on squadron duty than there were at the date of the last report.
A large number of vessels were commenced and in the course of
construction when the war terminated, and although Congress had made the
necessary appropriations for their completion, the Department has either
suspended work upon them or limited the slow completion of the steam
vessels, so as to meet the contracts for machinery made with private
establishments. The total expenditures of the Navy Department for the
fiscal year ending June 30, 1867, were $31,034,011. No appropriations
have been made or required since the close of the war for the
construction and repair of vessels, for steam machinery, ordnance,
provisions and clothing, fuel, hemp, etc., the balances under these
several heads having been more than sufficient for current expenditures.
It should also be stated to the credit of the Department that, besides
asking no appropriations for the above objects for the last two years,
the Secretary of the Navy, on the 30th of September last, in accordance
with the act of May 1, 1820, requested the Secretary of the Treasury to
carry to the surplus fund the sum of $65,000.000, being the amount
received from the sales of vessels and other war property and the
remnants of former appropriations.

The report of the Postmaster-General shows the business of the
Post-Office Department and the condition of the postal service in a very
favorable light, and the attention of Congress is called to its
practical recommendations. The receipts of the Department for the year
ending June 30, 1867, including all special appropriations for sea and
land service and for free mail matter, were $19,978,693. The
expenditures for all purposes were $19,235,483, leaving an unexpended
balance in favor of the Department of $743,210, which can be applied
toward the expenses of the Department for the current year. The increase
of postal revenue, independent of specific appropriations, for the year
1867 over that of 1866 was $850,040. The increase of revenue from the
sale of stamps and stamped envelopes was $783,404. The increase of
expenditures for 1867 over those of the previous year was owing chiefly
to the extension of the land and ocean mail service. During the past
year new postal conventions have been ratified and exchanged with the
United Kingdom of Great Britain and Ireland, Belgium, the Netherlands,
Switzerland, the North German Union, Italy, and the colonial government
at Hong Kong, reducing very largely the rates of ocean and land postages
to and from and within those countries.

The report of the Acting Commissioner of Agriculture concisely presents
the condition, wants, and progress of an interest eminently worthy the
fostering care of Congress, and exhibits a large measure of useful
results achieved during the year to which it refers.

The reestablishment of peace at home and the resumption of extended
trade, travel, and commerce abroad have served to increase the number
and variety of questions in the Department for Foreign Affairs. None of
these questions, however, have seriously disturbed our relations with
other states.

The Republic of Mexico, having been relieved from foreign intervention,
is earnestly engaged in efforts to reestablish her constitutional system
of government. A good understanding continues to exist between our
Government and the Republics of Hayti and San Domingo, and our cordial
relations with the Central and South American States remain unchanged.
The tender, made in conformity with a resolution of Congress, of the
good offices of the Government with a view to an amicable adjustment of
peace between Brazil and her allies on one side and Paraguay on the
other, and between Chile and her allies on the one side and Spain on the
other, though kindly received, has in neither case been fully accepted
by the belligerents. The war in the valley of the Parana is still
vigorously maintained. On the other hand, actual hostilities between the
Pacific States and Spain have been more than a year suspended. I shall,
on any proper occasion that may occur, renew the conciliatory
recommendations which have been already made. Brazil, with enlightened
sagacity and comprehensive statesmanship, has opened the great channels
of the Amazon and its tributaries to universal commerce. One thing more
seems needful to assure a rapid and cheering progress in South America.
I refer to those peaceful habits without which states and nations can
not in this age well expect material prosperity or social advancement.

The Exposition of Universal Industry at Paris has passed, and seems to
have fully realized the high expectations of the French Government. If
due allowance be made for the recent political derangement of industry
here, the part which the United States has borne in this exhibition of
invention and art may be regarded with very high satisfaction. During
the exposition a conference was held of delegates from several nations,
the United States being one, in which the inconveniences of commerce and
social intercourse resulting from the diverse standards of money value
were very fully discussed, and plans were developed for establishing by
universal consent a common principle for the coinage of gold. These
conferences are expected to be renewed, with the attendance of many
foreign states not hitherto represented. A report of these interesting
proceedings will be submitted to Congress, which will, no doubt, justly
appreciate the great object and be ready to adopt any measure which may
tend to facilitate its ultimate accomplishment.

On the 25th of February, 1862, Congress declared by law that Treasury
notes, without interest, authorized by that act should be legal tender
in payment of all debts, public and private, within the United States.
An annual remittance of $30,000, less stipulated expenses, accrues to
claimants under the convention made with Spain in 1834. These
remittances, since the passage of that act, have been paid in such
notes. The claimants insist that the Government ought to require payment
in coin. The subject may be deemed worthy of your attention.

No arrangement has yet been reached for the settlement of our claims for
British depredations upon the commerce of the United States. I have felt
it my duty to decline the proposition of arbitration made by Her
Majesty's Government, because it has hitherto been accompanied by
reservations and limitations incompatible with the rights, interest, and
honor of our country. It is not to be apprehended that Great Britain
will persist in her refusal to satisfy these just and reasonable claims,
which involve the sacred principle of nonintervention--a principle
henceforth not more important to the United States than to all other
commercial nations.

The West India islands were settled and colonized by European States
simultaneously with the settlement and colonization of the American
continent. Most of the colonies planted here became independent nations
in the close of the last and the beginning of the present century. Our
own country embraces communities which at one period were colonies of
Great Britain, France, Spain, Holland, Sweden, and Russia. The people in
the West Indies, with the exception of those of the island of Hayti,
have neither attained nor aspired to independence, nor have they become
prepared for self-defense. Although possessing considerable commercial
value, they have been held by the several European States which
colonized or at some time conquered them, chiefly for purposes of
military and naval strategy in carrying out European policy and designs
in regard to this continent. In our Revolutionary War ports and harbors
in the West India islands were used by our enemy, to the great injury
and embarrassment of the United States. We had the same experience in
our second war with Great Britain. The same European policy for a long
time excluded us even from trade with the West Indies, while we were at
peace with all nations. In our recent civil war the rebels and their
piratical and blockade-breaking allies found facilities in the same
ports for the work, which they too successfully accomplished, of
injuring and devastating the commerce which we are now engaged in
rebuilding. We labored especially under this disadvantage, that European
steam vessels employed by our enemies found friendly shelter,
protection, and supplies in West Indian ports, while our naval
operations were necessarily carried on from our own distant shores.
There was then a universal feeling of the want of an advanced naval
outpost between the Atlantic coast and Europe. The duty of obtaining
such an outpost peacefully and lawfully, while neither doing nor
menacing injury to other states, earnestly engaged the attention of the
executive department before the close of the war, and it has not been
lost sight of since that time. A not entirely dissimilar naval want
revealed itself during the same period on the Pacific coast. The
required foothold there was fortunately secured by our late treaty with
the Emperor of Russia, and it now seems imperative that the more obvious
necessities of the Atlantic coast should not be less carefully provided
for. A good and convenient port and harbor, capable of easy defense,
will supply that want. With the possession of such a station by the
United States, neither we nor any other American nation need longer
apprehend injury or offense from any transatlantic enemy. I agree with
our early statesmen that the West Indies naturally gravitate to, and may
be expected ultimately to be absorbed by, the continental States,
including our own. I agree with them also that it is wise to leave the
question of such absorption to this process of natural political
gravitation. The islands of St. Thomas and St. John, which constitute a
part of the group called the Virgin Islands, seemed to offer us
advantages immediately desirable, while their acquisition could be
secured in harmony with the principles to which I have alluded. A treaty
has therefore been concluded with the King of Denmark for the cession of
those islands, and will be submitted to the Senate for consideration.

It will hardly be necessary to call the attention of Congress to the
subject of providing for the payment to Russia of the sum stipulated in
the treaty for the cession of Alaska. Possession having been formally
delivered to our commissioner, the territory remains for the present in
care of a military force, awaiting such civil organization as shall be
directed by Congress.

The annexation of many small German States to Prussia and the
reorganization of that country under a new and liberal constitution have
induced me to renew the effort to obtain a just and prompt settlement of
the long-vexed question concerning the claims of foreign states for
military service from their subjects naturalized in the United States.

In connection with this subject the attention of Congress is
respectfully called to a singular and embarrassing conflict of laws. The
executive department of this Government has hitherto uniformly held, as
it now holds, that naturalization in conformity with the Constitution
and laws of the United States absolves the recipient from his native
allegiance. The courts of Great Britain hold that allegiance to the
British Crown is indefensible, and is not absolved by our laws of
naturalization. British judges cite courts and law authorities of the
United States in support of that theory against the position held by the
executive authority of the United States. This conflict perplexes the
public mind concerning the rights of naturalized citizens and impairs
the national authority abroad. I called attention to this subject in my
last annual message, and now again respectfully appeal to Congress to
declare the national will unmistakably upon this important question.

The abuse of our laws by the clandestine prosecution of the African
slave trade from American ports or by American citizens has altogether
ceased, and under existing circumstances no apprehensions of its renewal
in this part of the world are entertained. Under these circumstances it
becomes a question whether we shall not propose to Her Majesty's
Government a suspension or discontinuance of the stipulations for
maintaining a naval force for the suppression of that trade.

***

State of the Union Address
Andrew Johnson
December 9, 1868

Fellow-Citizens of the Senate and House of Representatives:

Upon the reassembling of Congress it again becomes my duty to call your
attention to the state of the Union and to its continued disorganized
condition under the various laws which have been passed upon the subject
of reconstruction.

It may be safely assumed as an axiom in the government of states that
the greatest wrongs inflicted upon a people are caused by unjust and
arbitrary legislation, or by the unrelenting decrees of despotic rulers,
and that the timely revocation of injurious and oppressive measures is
the greatest good that can be conferred upon a nation. The legislator or
ruler who has the wisdom and magnanimity to retrace his steps when
convinced of error will sooner or later be rewarded with the respect and
gratitude of an intelligent and patriotic people.

Our own history, although embracing a period less than a century,
affords abundant proof that most, if not all, of our domestic troubles
are directly traceable to violations of the organic law and excessive
legislation. The most striking illustrations of this fact are furnished
by the enactments of the past three years upon the question of
reconstruction. After a fair trial they have substantially failed and
proved pernicious in their results, and there seems to be no good reason
why they should longer remain upon the statute book. States to which the
Constitution guarantees a republican form of government have been
reduced to military dependencies in each of which the people have been
made subject to the arbitrary will of the commanding general. Although
the Constitution requires that each State shall be represented in
Congress, Virginia, Mississippi, and Texas are yet excluded from the two
Houses, and, contrary to the express provisions of that instrument were
denied participation in the recent election for a President and
Vice-President of the United States. The attempt to place the white
population under the domination of persons of color in the South has
impaired, if not destroyed, the kindly relations that had previously
existed between them: and mutual distrust has engendered a feeling of
animosity which leading in some instances to collision and bloodshed,
has prevented that cooperation between the two races so essential to the
success of industrial enterprise in the Southern States. Nor have the
inhabitants of those States alone suffered from the disturbed condition
of affairs growing out of these Congressional enactments. The entire
Union has been agitated by grave apprehensions of troubles which might
again involve the peace of the nation; its interests have been
injuriously affected by the derangement of business and labor, and the
consequent want of prosperity throughout that portion of the country.

The Federal Constitution--the magna charta of American rights, under
whose wise and salutary provisions we have successfully conducted all
our domestic and foreign affairs, sustained ourselves in peace and in
war, and become a great nation among the powers of the earth--must
assuredly be now adequate to the settlement of questions growing out of
the civil war, waged alone for its vindication. This great fact is made
most manifest by the condition of the country when Congress assembled in
the month of December, 1865. Civil strife had ceased, the spirit of
rebellion had spent its entire force, in the Southern States the people
had warmed into national life, and throughout the whole country a
healthy reaction in public sentiment had taken place. By the application
of the simple yet effective provisions of the Constitution the executive
department, with the voluntary aid of the States, had brought the work
of restoration as near completion as was within the scope of its
authority, and the nation was encouraged by the prospect of an early and
satisfactory adjustment of all its difficulties. Congress, however,
intervened, and, refusing to perfect the work so nearly consummated,
declined to admit members from the unrepresented States, adopted a
series of measures which arrested the progress of restoration,
frustrated all that had been so successfully accomplished, and, after
three years of agitation and strife, has left the country further from
the attainment of union and fraternal feeling than at the inception of
the Congressional plan of reconstruction. It needs no argument to show
that legislation which has produced such baneful consequences should be
abrogated, or else made to conform to the genuine principles of
republican government.

Under the influence of party passion and sectional prejudice, other acts
have been passed not warranted by the Constitution. Congress has already
been made familiar with my views respecting the "tenure-of-office bill."
Experience has proved that its repeal is demanded by the best interests
of the country, and that while it remains in force the President can not
enjoin that rigid accountability of public officers so essential to an
honest and efficient execution of the laws. Its revocation would enable
the executive department to exercise the power of appointment and
removal in accordance with the original design of the Federal
Constitution.

The act of March 2, 1867, making appropriations for the support of the
Army for the year ending June 30, 1868, and for other purposes, contains
provisions which interfere with the President's constitutional functions
as Commander in Chief of the Army and deny to States of the Union the
right to protect themselves by means of their own militia. These
provisions should be at once annulled; for while the first might, in
times of great emergency, seriously embarrass the Executive in efforts
to employ and direct the common strength of the nation for its
protection and preservation, the other is contrary to the express
declaration of the Constitution that "a well-regulated militia being
necessary to the security of a free state, the right of the people to
keep and bear arms shall not be infringed."

It is believed that the repeal of all such laws would be accepted by the
American people as at least a partial return to the fundamental
principles of the Government, and an indication that hereafter the
Constitution is to be made the nation's safe and unerring guide. They
can be productive of no permanent benefit to the country, and should not
be permitted to stand as so many monuments of the deficient wisdom which
has characterized our recent legislation.

The condition of our finances demands the early and earnest
consideration of Congress. Compared with the growth of our population,
the public expenditures have reached an amount unprecedented in our
history.

The population of the United States in 1790 was nearly 4,000,000 people.
Increasing each decade about 33 per cent, it reached in 1860 31,000,000,
an increase of 700 per cent on the population in 1790. In 1869 it is
estimated that it will reach 38,000,000, or an increase of 868 per cent
in seventy-nine years.

The annual expenditures of the Federal Government in 1791 were
$4,200,000; in 1820, $18.200,000; in 1850, forty-one millions; in 1860,
sixty-three millions; in 1865, nearly thirteen hundred millions; and in
1869 it is estimated by the Secretary of the Treasury, in his last
annual report, that they will be three hundred and seventy-two millions.

By comparing the public disbursements of 1869, as estimated, with those
of 1791, it will be seen that the increase of expenditure since the
beginning of the Government has been 8,618 per cent, while the increase
of the population for the same period was only 868 per cent. Again, the
expenses of the Government in 1860, the year of peace immediately
preceding the war, were only sixty--three millions, while in 1869, the
year of peace three years after the war it is estimated they will be
three hundred and seventy-two millions, an increase of 489 per cent,
while the increase of population was only 21 per cent for the same
period.

These statistics further show that in 1791 the annual national expenses,
compared with the population, were little more than $1 per capita, and
in 1860 but $2 per capita; while in 1869 they will reach the extravagant
sum of $9.78 per capita.

It will be observed that all these statements refer to and exhibit the
disbursements of peace periods. It may, therefore, be of interest to
compare the expenditures of the three war periods--the war with Great
Britain, the Mexican War, and the War of the Rebellion.

In 1814 the annual expenses incident to the War of 1812 reached their
highest amount--about thirty-one millions--while our population slightly
exceeded 8,000,000, showing an expenditure of only $3.80 per capita. In
1847 the expenditures growing out of the war with Mexico reached
fifty-five millions, and the population about 21,000,000, giving only
$2.60 per capita for the war expenses of that year. In 1865 the
expenditures called for by the rebellion reached the vast amount of
twelve hundred and ninety millions, which, compared with a population of
34,000,000, gives $38.20 per capita.

From the 4th day of March, 1789, to the 30th of June, 1861, the entire
expenditures of the Government were $1,700,000,000. During that period
we were engaged in wars with Great Britain and Mexico, and were involved
in hostilities with powerful Indian tribes; Louisiana was purchased from
France at a cost of $15,000,000; Florida was ceded to us by Spain for
five millions; California was acquired from Mexico for fifteen millions,
and the territory of New Mexico was obtained from Texas for the sum of
ten millions. Early in 1861 the War of the Rebellion commenced; and from
the 1st of July of that year to the 30th of June, 1865, the public
expenditures reached the enormous aggregate of thirty-three hundred
millions. Three years of peace have intervened, and during that time the
disbursements of the Government have successively been five hundred and
twenty millions, three hundred and forty-six millions, and three hundred
and ninety-three millions. Adding to these amounts three hundred and
seventy-two millions, estimated as necessary for the fiscal year ending
the 30th of June, 1869, we obtain a total expenditure of $1,600,000,000
during the four years immediately succeeding the war, or nearly as much
as was expended during the seventy-two years that preceded the rebellion
and embraced the extraordinary expenditures already named.

These startling facts clearly illustrate the necessity of retrenchment
in all branches of the public service. Abuses which were tolerated
during the war for the preservation of the nation will not be endured by
the people, now that profound peace prevails. The receipts from internal
revenues and customs have during the past three years gradually
diminished, and the continuance of useless and extravagant expenditures
will involve us in national bankruptcy, or else make inevitable an
increase of taxes already too onerous and in many respects obnoxious on
account of their inquisitorial character. One hundred millions annually
are expended for the military force, a large portion of which is
employed in the execution of laws both unnecessary and unconstitutional;
one hundred and fifty millions are required each year to pay the
interest on the public debt: an army of taxgatherers impoverishes the
nation, and public agents, placed by Congress beyond the control of the
Executive, divert from their legitimate purposes large sums of money
which they collect from the people in the name of the Government.
Judicious legislation and prudent economy can alone remedy defects and
avert evils which, if suffered to exist, can not fail to diminish
confidence in the public councils and weaken the attachment and respect
of the people toward their political institutions. Without proper care
the small balance which it is estimated will remain in the Treasury at
the close of the present fiscal year will not be realized, and
additional millions be added to a debt which is now enumerated by
billions.

It is shown by the able and comprehensive report of the Secretary of the
Treasury that the receipts for the fiscal year ending June 30, 1868,
were $405,638,083, and that the expenditures for the same period were
$377,340,284, leaving in the Treasury a surplus of $28,297,798. It is
estimated that the receipts during the present fiscal year, ending June
30, 1869, will be $341,392,868 and the expenditures $336,152,470,
showing a small balance of $5,240,398 in favor of the Government. For
the fiscal year ending June 30, 1870, it is estimated that the receipts
will amount to $327,000,000 and the expenditures to $303,000,000,
leaving an estimated surplus of $24,000,000.

It becomes proper in this connection to make a brief reference to our
public indebtedness, which has accumulated with such alarming rapidity
and assumed such colossal proportions.

In 1789, when the Government commenced operations under the Federal
Constitution, it was burdened with an indebtedness of $75,000,000,
created during the War of the Revolution. This amount had been reduced
to $45,000,000 when, in 1812, war was declared against Great Britain.
The three years' struggle that followed largely increased the national
obligations, and in 1816 they had attained the sum of $127,000,000. Wise
and economical legislation, however, enabled the Government to pay the
entire amount within a period of twenty years, and the extinguishment of
the national debt filled the land with rejoicing and was one of the
great events of President Jackson's Administration. After its redemption
a large fund remained in the Treasury, which was deposited for
safe-keeping with the several States. on condition that it should be
returned when required by the public wants. In 1849--the year after the
termination of an expensive war with Mexico--we found ourselves involved
in a debt of $64,000,000; and this was the amount owed by the Government
in 1860, just prior to the outbreak of the rebellion. In the spring of
1861 our civil war commenced. Each year of its continuance made an
enormous addition to the debt: and when in the spring of 1865, the
nation successfully emerged from the conflict, the obligations of the
Government had reached the immense sum of $2.873,992,909. The Secretary
of the Treasury shows that on the 1st day of November, 1867, this amount
had been reduced to $2,491,504,450; but at the same time his report
exhibits an increase during the past year of $35,625,102, for the debt
on the 1st day of November last is stated to have been $2,527,129,552.
It is estimated by the Secretary that the returns for the past month
will add to our liabilities the further sum of $11,000,000, making a
total increase during thirteen months of $46,500,000.

In my message to Congress December 4, 1865, it was suggested that a
policy should be devised which, without being oppressive to the people,
would at once begin to effect a reduction of the debt, and, if persisted
in, discharge it fully within a definite number of years. The Secretary
of the Treasury forcibly recommends legislation of this character, and
justly urges that the longer it is deferred the more difficult must
become its accomplishment. We should follow the wise precedents
established in 1789 and 1816, and without further delay make provision
for the payment of our obligations at as early a period as may be
practicable. The fruits of their labors should be enjoyed by our
citizens rather than used to build up and sustain moneyed monopolies in
our own and other lands. Our foreign debt is already computed by the
Secretary of the Treasury at $850,000,000; citizens of foreign countries
receive interest upon a large portion of our securities, and American
taxpayers are made to contribute large sums for their support. The idea
that such a debt is to become permanent should be at all times discarded
as involving taxation too heavy to be borne, and payment once in every
sixteen years, at the present rate of interest, of an amount equal to
the original sum. This vast debt, if permitted to become permanent and
increasing, must eventually be gathered into the hands of a few, and
enable them to exert a dangerous and controlling power in the affairs of
the Government. The borrowers would become servants to the lenders, the
lenders the masters of the people. We now pride ourselves upon having
given freedom to 4,000,000 of the colored race; it will then be our
shame that 40,000,000 of people, by their own toleration of usurpation
and profligacy, have suffered themselves to become enslaved, and merely
exchanged slave owners for new taskmasters in the shape of bondholders
and taxgatherers. Besides, permanent debts pertain to monarchical
governments, and, tending to monopolies, perpetuities, and class
legislation, are totally irreconcilable with free institutions
introduced into our republican system, they would gradually but surely
sap its foundations, eventually subvert our governmental fabric, and
erect upon its ruins a moneyed aristocracy. It is our sacred duty to
transmit unimpaired to our posterity the blessings of liberty which were
bequeathed to us by the founders of the Republic. and by our example
teach those who are to follow us carefully to avoid the dangers which
threaten a free and independent people.

Various plans have been proposed for the payment of the public debt.
However they may have varied as to the time and mode in which it should
be redeemed, there seems to be a general concurrence as to the propriety
and justness of a reduction in the present rate of interest. The
Secretary of the Treasury in his report recommends 5 per cent; Congress,
in a bill passed prior to adjournment on the 27th of July last, agreed
upon 4 and 4 1/2 per cent; while by many 3 per cent has been held to be
an amply sufficient return for the investment. The general impression as
to the exorbitancy of the existing rate of interest has led to an
inquiry in the public mind respecting the consideration which the
Government has actually received for its bonds, and the conclusion is
becoming prevalent that the amount which it obtained was in real money
three or four hundred per cent less than the obligations which it issued
in return. It can not be denied that we are paying an extravagant
percentage for the use of the money borrowed, which was paper currency,
greatly depreciated below the value of coin. This fact is made apparent
when we consider that bondholders receive from the Treasury upon each
dollar they own in Government securities 6 per cent in gold, which is
nearly or quite equal to 9 per cent in currency; that the bonds are then
converted into capital for the national banks, upon which those
institutions issue their circulation, bearing 6 per cent interest; and
that they are exempt from taxation by the Government and the States, and
thereby enhanced 2 per cent in the hands of the holders. We thus have an
aggregate of 17 per cent which may be received upon each dollar by the
owners of Government securities. A system that produces such results is
justly regarded as favoring a few at the expense of the many, and has
led to the further inquiry whether our bondholders, in view of the large
profits which they have enjoyed, would themselves be averse to a
settlement of our indebtedness upon a plan which would yield them a fair
remuneration and at the same time be just to the taxpayers of the
nation. Our national credit should be sacredly observed, but in making
provision for our creditors we should not forget what is due to the
masses of the people. It may be assumed that the holders of our
securities have already received upon their bonds a larger amount than
their original investment, measured by a gold standard. Upon this
statement of facts it would seem but just and equitable that the 6 per
cent interest now paid by the Government should be applied to the
reduction of the principal in semiannual installments, which in sixteen
years and eight months would liquidate the entire national debt. Six per
cent in gold would at present rates be equal to 9 per cent in currency,
and equivalent to the payment of the debt one and a half times in a
fraction less than seventeen years. This, in connection with all the
other advantages derived from their investment, would afford to the
public creditors a fair and liberal compensation for the use of their
capital, and with this they should be satisfied. The lessons of the past
admonish the lender that it is not well to be over-anxious in exacting
from the borrower rigid compliance with the letter of the bond.

If provision be made for the payment of the indebtedness of the
Government in the manner suggested, our nation will rapidly recover its
wonted prosperity. Its interests require that some measure should be
taken to release the large amount of capital invested in the securities
of the Government. It is not now merely unproductive, but in taxation
annually consumes $150,000,000, which would otherwise be used by our
enterprising people in adding to the wealth of the nation. Our commerce,
which at one time successfully rivaled that of the great maritime
powers, has rapidly diminished, and our industrial interests are in a
depressed and languishing condition. The development of our
inexhaustible resources is checked, and the fertile fields of the South
are becoming waste for want of means to till them. With the release of
capital, new life would be infused into the paralyzed energies of our
people and activity and vigor imparted to every branch of industry. Our
people need encouragement in their efforts to recover from the effects
of the rebellion and of injudicious legislation, and it should be the
aim of the Government to stimulate them by the prospect of an early
release from the burdens which impede their prosperity. If we can not
take the burdens from their shoulders, we should at least manifest a
willingness to help to bear them.

In referring to the condition of the circulating medium, I shall merely
reiterate substantially that portion of my last annual message which
relates to that subject.

The proportion which the currency of any country should bear to the
whole value of the annual produce circulated by its means is a question
upon which political economists have not agreed. Nor can it be
controlled by legislation, but must be left to the irrevocable laws
which everywhere regulate commerce and trade. The circulating medium
will ever irresistibly flow to those points where it is in greatest
demand. The law of demand and supply is as unerring as that which
regulates the tides of the ocean; and, indeed, currency, like the tides,
has its ebbs and flows throughout the commercial world.

At the beginning of the rebellion the bank-note circulation of the
country amounted to not much more than $200,000,000; now the circulation
of national-bank notes and those known as "legal-tenders" is nearly
seven hundred millions. While it is urged by some that this amount
should be increased, others contend that a decided reduction is
absolutely essential to the best interests of the country. In view of
these diverse opinions, it may be well to ascertain the real value of
our paper issues when compared with a metallic or convertible currency.
For this purpose let us inquire how much gold and silver could be
purchased by the seven hundred millions of paper money now in
circulation. Probably not more than half the amount of the latter;
showing that when our paper currency is compared with gold and silver
its commercial value is compressed into three hundred and fifty
millions. This striking fact makes it the obvious duty of the
Government, as early as may be consistent with the principles of sound
political economy, to take such measures as will enable the holders of
its notes and those of the national banks to convert them, without loss,
into specie or its equivalent. A reduction of our paper circulating
medium need not necessarily follow. This, however, would depend upon the
law of demand and supply, though it should be borne in mind that by
making legal-tender and bank notes convertible into coin or its
equivalent their present specie value in the hands of their holders
would be enhanced 100 per cent.

Legislation for the accomplishment of a result so desirable is demanded
by the highest public considerations. The Constitution contemplates that
the circulating medium of the country shall be uniform in quality and
value. At the time of the formation of that instrument the country had
just emerged from the War of the Revolution, and was suffering from the
effects of a redundant and worthless paper currency. The sages of that
period were anxious to protect their posterity from the evils which they
themselves had experienced. Hence in providing a circulating medium they
conferred upon Congress the power to coin money and regulate the value
thereof, at the same time prohibiting the States from making anything
but gold and silver a tender in payment of debts.

The anomalous condition of our currency is in striking contrast with
that which was originally designed. Our circulation now embraces, first,
notes of the national banks, which are made receivable for all dues to
the Government, excluding imposts, and by all its creditors, excepting
in payment of interest upon its bonds and the securities themselves;
second, legal tender, issued by the United States, and which the law
requires shall be received as well in payment of all debts between
citizens as of all Government dues, excepting imposts; and, third, gold
and silver coin. By the operation of our present system of finance
however, the metallic currency, when collected, is reserved only for one
class of Government creditors, who, holding its bonds, semiannually
receive their interest in coin from the National Treasury. There is no
reason which will be accepted as satisfactory by the people why those
who defend us on the land and protect us on the sea; the pensioner upon
the gratitude of the nation, bearing the scars and wounds received while
in its service; the public servants in the various departments of the
Government; the farmer who supplies the soldiers of the Army and the
sailors of the Navy; the artisan who toils in the nation's workshops, or
the mechanics and laborers who build its edifices and construct its
forts and vessels of war, should, in payment of their just and
hard-earned dues, receive depreciated paper, while another class of
their countrymen, no more deserving are paid in coin of gold and silver.
Equal and exact justice requires that all the creditors of the
Government should be paid in a currency possessing a uniform value. This
can only be accomplished by the restoration of the currency to the
standard established by the Constitution, and by this means we would
remove a discrimination which may, if it has not already done so, create
a prejudice that may become deep-rooted and widespread and imperil the
national credit.

The feasibility of making our currency correspond with the
constitutional standard may be seen by reference to a few facts derived
from our commercial statistics.

The aggregate product of precious metals in the United States from 1849
to 1867 amounted to $1,174,000,000, while for the same period the net
exports of specie were $741,000,000. This shows an excess of product
over net exports of $433,000,000. There are in the Treasury $103,407,985
in coin; in circulation in the States on the Pacific Coast about
$40,000,000, and a few millions in the national and other banks--in all
less than $160,000,000. Taking into consideration the specie in the
country prior to 1849 and that produced since 1867, and we have more
than $300,000,000 not accounted for by exportation or by returns of the
Treasury, and therefore most probably remaining in the country.

These are important facts, and show how completely the inferior currency
will supersede the better, forcing it from circulation among the masses
and causing it to be exported as a mere article of trade, to add to the
money capital of foreign lands. They show the necessity of retiring our
paper money, that the return of gold and silver to the avenues of trade
may be invited and a demand created which will cause the retention at
home of at least so much of the productions of our rich and
inexhaustible gold-bearing fields as may be sufficient for purposes of
circulation. It is unreasonable to expect a return to a sound currency
so long as the Government and banks, by continuing to issue irredeemable
notes, fill the channels of circulation with depreciated paper.
Notwithstanding a coinage by our mints since 1849 of $874,000,000, the
people are now strangers to the currency which was designed for their
use and benefit, and specimens of the precious metals bearing the
national device are seldom seen, except when produced to gratify the
interest excited by their novelty. If depreciated paper is to be
continued as the permanent currency of the country, and all our coin is
to become a mere article of traffic and speculation to the enhancement
in price of all that is indispensable to the comfort of the people, it
would be wise economy to abolish our mints, thus saving the nation the
care and expense incident to such establishments, and let our precious
metals be exported in bullion. The time has come, however, when the
Government and national banks should be required to take the most
efficient steps and make all necessary arrangements for a resumption of
specie payments. Let specie payments once be earnestly inaugurated by
the Government and banks, and the value of the paper circulation would
directly approximate a specie standard.

Specie payments having been resumed by the Government and banks, all
notes or bills of paper issued by either of a less denomination than $20
should by law be excluded from circulation, so that the people may have
the benefit and convenience of a gold and silver currency which in all
their business transactions will be uniform in value at home and abroad.
Every man of property or industry, every man who desires to preserve
what he honestly possesses or to obtain what he can honestly earn, has a
direct interest in maintaining a safe circulating medium--such a medium
as shall be real and substantial, not liable to vibrate with opinions,
not subject to be blown up or blown down by the breath of speculation,
but to be made stable and secure. A disordered currency is one of the
greatest political evils. It undermines the virtues necessary for the
support of the social system and encourages propensities destructive of
its happiness; it wars against industry, frugality, and economy, and it
fosters the evil spirits of extravagance and speculation. It has been
asserted by one of our profound and most gifted statesmen that--Of all
the contrivances for cheating the laboring classes of mankind, none has
been more effectual than that which deludes them with paper money. This
is the most effectual of inventions to fertilize the rich man's fields
by the sweat of the poor man's brow. Ordinary tyranny, oppression,
excessive taxation--these bear lightly on the happiness of the mass of
the community compared with a fraudulent currency and the robberies
committed by depreciated paper. Our own history has recorded for our
instruction enough, and more than enough, of the demoralizing tendency,
the injustice, and the intolerable oppression on the virtuous and
well-disposed of a degraded paper currency authorized by law or in any
way countenanced by government. It is one of the most successful
devices, in times of peace or war, of expansions or revulsions, to
accomplish the transfer of all the precious metals from the great mass
of the people into the hands of the few, where they are hoarded in
secret places or deposited under bolts and bars, while the people are
left to endure all the inconvenience, sacrifice, and demoralization
resulting from the use of depreciated and worthless paper.

The Secretary of the Interior in his report gives valuable information
in reference to the interests confided to the supervision of his
Department, and reviews the operations of the Land Office, Pension
Office, Patent Office, and Indian Bureau.

During the fiscal year ending June 30. 1868, 6,655,700 acres of public
land were disposed of. The entire cash receipts of the General Land
Office for the same period were $1,632,745, being greater by $284,883
than the amount realized from the same sources during the previous year.
The entries under the homestead law cover 2,328,923 acres, nearly
one-fourth of which was taken under the act of June 21, 1866, which
applies only to the States of Alabama, Mississippi, Louisiana, Arkansas,
and Florida.

On the 30th of June, 1868, 169,643 names were borne on the pension
rolls, and during the year ending on that day the total amount paid for
pensions, including the expenses of disbursement, was $24,010,982, being
$5,391,025 greater than that expended for like purposes during the
preceding year.

During the year ending the 30th of September last the expenses of the
Patent Office exceeded the receipts by $171, and, including reissues and
designs, 14,153 patents were issued.

Treaties with various Indian tribes have been concluded, and will be
submitted to the Senate for its constitutional action. I cordially
sanction the stipulations which provide for reserving lands for the
various tribes, where they may be encouraged to abandon their nomadic
habits and engage in agricultural and industrial pursuits. This policy,
inaugurated many years since, has met with signal success whenever it
has been pursued in good faith and with becoming liberality by the
United States. The necessity for extending it as far as practicable in
our relations with the aboriginal population is greater now than at any
preceding period. Whilst we furnish subsistence and instruction to the
Indians and guarantee the undisturbed enjoyment of their treaty rights,
we should habitually insist upon the faithful observance of their
agreement to remain within their respective reservations. This is the
only mode by which collisions with other tribes and with the whites can
be avoided and the safety of our frontier settlements secured.

The companies constructing the railway from Omaha to Sacramento have
been most energetically engaged in prosecuting the work, and it is
believed that the line will be completed before the expiration of the
next fiscal year. The 6 per cent bonds issued to these companies
amounted on the 5th instant to $44,337,000, and additional work had been
performed to the extent of $3,200,000.

The Secretary of the Interior in August last invited my attention to the
report of a Government director of the Union Pacific Railroad Company
who had been specially instructed to examine the location, construction,
and equipment of their road. I submitted for the opinion of the
Attorney-General certain questions in regard to the authority of the
Executive which arose upon this report and those which had from time to
time been presented by the commissioners appointed to inspect each
successive section of the work. After carefully considering the law of
the case, he affirmed the right of the Executive to order, if necessary,
a thorough revision of the entire road. Commissioners were thereupon
appointed to examine this and other lines, and have recently submitted a
statement of their investigations, of which the report of the Secretary
of the Interior furnishes specific information.

The report of the Secretary of War contains information of interest and
importance respecting the several bureaus of the War Department and the
operations of the Army. The strength of our military force on the 30th
of September last was 48,000 men, and it is computed that by the 1st of
January next this number will be decreased to 43,000. It is the opinion
of the Secretary of War that within the next year a considerable
diminution of the infantry force may be made without detriment to the
interests of the country; and in view of the great expense attending the
military peace establishment and the absolute necessity of retrenchment
wherever it can be applied, it is hoped that Congress will sanction the
reduction which his report recommends. While in 1860 sixteen thousand
three hundred men cost the nation $16,472,000, the sum of $65,682,000 is
estimated as necessary for the support of the Army during the fiscal
year ending June 30, 1870. The estimates of the War Department for the
last two fiscal years were, for 1867, $33,814,461, and for 1868
$25,205,669. The actual expenditures during the same periods were,
respectively, $95,224,415 and $123,246,648. The estimate submitted in
December last for the fiscal year ending June 30, 1869, was $77,124,707;
the expenditures for the first quarter, ending the 30th of September
last, were $27,219,117, and the Secretary of the Treasury gives
$66,000,000 as the amount which will probably be required during the
remaining three quarters, if there should be no reduction of the
Army--making its aggregate cost for the year considerably in excess of
ninety-three millions. The difference between the estimates and
expenditures for the three fiscal years which have been named is thus
shown to be $175,545,343 for this single branch of the public service.

The report of the Secretary of the Navy exhibits the operations of that
Department and of the Navy during the year. A considerable reduction of
the force has been effected. There are 42 vessels, carrying 411 guns, in
the six squadrons which are established in different parts of the world.
Three of these vessels are returning to the United States and 4 are used
as storeships, leaving the actual cruising force 35 vessels, carrying
356 guns. The total number of vessels in the Navy is 206, mounting 1,743
guns. Eighty-one vessels of every description are in use, armed with 696
guns. The number of enlisted men in the service, including apprentices,
has been reduced to 8,500. An increase of navy-yard facilities is
recommended as a measure which will in the event of war be promotive of
economy and security. A more thorough and systematic survey of the North
Pacific Ocean is advised in view of our recent acquisitions, our
expanding commerce, and the increasing intercourse between the Pacific
States and Asia. The naval pension fund, which consists of a moiety of
the avails of prizes captured during the war, amounts to $14,000,000.
Exception is taken to the act of 23d July last, which reduces the
interest on the fund loaned to the Government by the Secretary, as
trustee, to 3 per cent instead of 6 per cent, which was originally
stipulated when the investment was made. An amendment of the pension
laws is suggested to remedy omissions and defects in existing
enactments. The expenditures of the Department during the last fiscal
year were $20,120,394, and the estimates for the coming year amount to
$20,993,414.

The Postmaster-General's report furnishes a full and clear exhibit of
the operations and condition of the postal service. The ordinary postal
revenue for the fiscal year ending June 30, 1868. was $16,292,600, and
the total expenditures, embracing all the service for which special
appropriations have been made by Congress, amounted to $22,730,592,
showing an excess of expenditures of $6,437,991. Deducting from the
expenditures the sum of $1,896,525, the amount of appropriations for
ocean-steamship and other special service, the excess of expenditures
was $4,541,466. By using an unexpended balance in the Treasury of
$3,800,000 the actual sum for which a special appropriation is required
to meet the deficiency is $741,466. The causes which produced this large
excess of expenditure over revenue were the restoration of service in
the late insurgent States and the putting into operation of new service
established by acts of Congress, which amounted within the last two
years and a half to about 48,700 miles--equal to more than one-third of
the whole amount of the service at the close of the war. New postal
conventions with Great Britain, North Germany, Belgium, the Netherlands,
Switzerland, and Italy, respectively, have been carried into effect.
Under their provisions important improvements have resulted in reduced
rates of international postage and enlarged mail facilities with
European countries. The cost of the United States transatlantic ocean
mail service since January 1, 1868, has been largely lessened under the
operation of these new conventions, a reduction of over one-half having
been effected under the new arrangements for ocean mail steamship
service which went into effect on that date. The attention of Congress
is invited to the practical suggestions and recommendations made in his
report by the Postmaster-General.

No important question has occurred during the last year in our
accustomed cordial and friendly intercourse with Costa Rica, Guatemala,
Honduras, San Salvador, France, Austria, Belgium, Switzerland, Portugal,
the Netherlands, Denmark, Sweden and Norway, Rome, Greece, Turkey,
Persia, Egypt, Liberia, Morocco, Tripoli, Tunis, Muscat, Siam, Borneo,
and Madagascar.

Cordial relations have also been maintained with the Argentine and the
Oriental Republics. The expressed wish of Congress that our national
good offices might be tendered to those Republics, and also to Brazil
and Paraguay, for bringing to an end the calamitous war which has so
long been raging in the valley of the La Plata, has been assiduously
complied with and kindly acknowledged by all the belligerents. That
important negotiation, however, has thus far been without result.

Charles A. Washburn, late United States minister to Paraguay, having
resigned, and being desirous to return to the United States, the
rear-admiral commanding the South Atlantic Squadron was early directed
to send a ship of war to Asuncion, the capital of Paraguay, to receive
Mr. Washburn and his family and remove them from a situation which was
represented to be endangered by faction and foreign war. The Brazilian
commander of the allied invading forces refused permission to the Wasp
to pass through the blockading forces, and that vessel returned to its
accustomed anchorage. Remonstrance having been made against this
refusal, it was promptly overruled, and the Wasp therefore resumed her
errand, received Mr. Washburn and his family, and conveyed them to a
safe and convenient seaport. In the meantime an excited controversy had
arisen between the President of Paraguay and the late United States
minister, which, it is understood, grew out of his proceedings in giving
asylum in the United States legation to alleged enemies of that
Republic. The question of the right to give asylum is one always
difficult and often productive of great embarrassment. In states well
organized and established, foreign powers refuse either to concede or
exercise that right, except as to persons actually belonging to the
diplomatic service. On the other hand, all such powers insist upon
exercising the right of asylum in states where the law of nations is not
fully acknowledged, respected, and obeyed.

The President of Paraguay is understood to have opposed to Mr.
Washburn's proceedings the injurious and very improbable charge of
personal complicity in insurrection and treason. The correspondence,
however, has not yet reached the United States.

Mr. Washburn, in connection with this controversy, represents that two
United States citizens attached to the legation were arbitrarily seized
at his side, when leaving the capital of Paraguay, committed to prison,
and there subjected to torture for the purpose of procuring confessions
of their own criminality and testimony to support the President's
allegation against the United States minister. Mr. McMahon, the newly
appointed minister to Paraguay, having reached the La Plata, has been
instructed to proceed without delay to Asuncion, there to investigate
the whole subject. The rear-admiral commanding the United States South
Atlantic Squadron has been directed to attend the new minister with a
proper naval force to sustain such just demands as the occasion may
require, and to vindicate the rights of the United States citizens
referred to and of any others who may be exposed to danger in the
theater of war. With these exceptions, friendly relations have been
maintained between the United States and Brazil and Paraguay.

Our relations during the past year with Bolivia, Ecuador, Peru, and
Chile have become especially friendly and cordial. Spain and the
Republics of Peru, Bolivia, and Ecuador have expressed their willingness
to accept the mediation of the United States for terminating the war
upon the South Pacific coast. Chile has not finally declared upon the
question. In the meantime the conflict has practically exhausted itself,
since no belligerent or hostile movement has been made by either party
during the last two years, and there are no indications of a present
purpose to resume hostilities on either side. Great Britain and France
have cordially seconded our proposition of mediation, and I do not
forego the hope that it may soon be accepted by all the belligerents and
lead to a secure establishment of peace and friendly relations between
the Spanish American Republics of the Pacific and Spain--a result which
would be attended with common benefits to the belligerents and much
advantage to all commercial nations. I communicate, for the
consideration of Congress, a correspondence which shows that the
Bolivian Republic has established the extremely liberal principle of
receiving into its citizenship any citizen of the United States, or of
any other of the American Republics, upon the simple condition of
voluntary registry.

The correspondence herewith submitted will be found painfully replete
with accounts of the ruin and wretchedness produced by recent
earthquakes, of unparalleled severity, in the Republics of Peru,
Ecuador, and Bolivia. The diplomatic agents and naval officers of the
United States who were present in those countries at the time of those
disasters furnished all the relief in their power to the sufferers, and
were promptly rewarded with grateful and touching acknowledgments by the
Congress of Peru. An appeal to the charity of our fellow-citizens has
been answered by much liberality. In this connection I submit an appeal
which has been made by the Swiss Republic, whose Government and
institutions are kindred to our own, in behalf of its inhabitants, who
are suffering extreme destitution, produced by recent devastating
inundations.

Our relations with Mexico during the year have been marked by an
increasing growth of mutual confidence. The Mexican Government has not
yet acted upon the three treaties celebrated here last summer for
establishing the rights of naturalized citizens upon a liberal and just
basis, for regulating consular powers, and for the adjustment of mutual
claims.

All commercial nations, as well as all friends of republican
institutions, have occasion to regret the frequent local disturbances
which occur in some of the constituent States of Colombia. Nothing has
occurred, however, to affect the harmony and cordial friendship which
have for several years existed between that youthful and vigorous
Republic and our own.

Negotiations are pending with a view to the survey and construction of a
ship canal across the Isthmus of Darien, under the auspices of the
United States. I hope to be able to submit the results of that
negotiation to the Senate during its present session.

The very liberal treaty which was entered into last year by the United
States and Nicaragua has been ratified by the latter Republic.

Costa Rica, with the earnestness of a sincerely friendly neighbor,
solicits a reciprocity of trade, which I commend to the consideration of
Congress.

The convention created by treaty between the United States and Venezuela
in July, 1865, for the mutual adjustment of claims, has been held, and
its decisions have been received at the Department of State. The
heretofore-recognized Government of the United States of Venezuela has
been subverted. A provisional government having been instituted under
circumstances which promise durability, it has been formally recognized.

I have been reluctantly obliged to ask explanation and satisfaction for
national injuries committed by the President of Hayti. The political and
social condition of the Republics of Hayti and St. Domingo is very
unsatisfactory and painful. The abolition of slavery, which has been
carried into effect throughout the island of St. Domingo and the entire
West Indies, except the Spanish islands of Cuba and Porto Rico, has been
followed by a profound popular conviction of the rightfulness of
republican institutions and an intense desire to secure them. The
attempt, however, to establish republics there encounters many
obstacles, most of which may be supposed to result from long-indulged
habits of colonial supineness and dependence upon European monarchical
powers. While the United States have on all occasions professed a
decided unwillingness that any part of this continent or of its adjacent
islands shall be made a theater for a new establishment of monarchical
power, too little has been done by us, on the other hand, to attach the
communities by which we are surrounded to our own country, or to lend
even a moral support to the efforts they are so resolutely and so
constantly making to secure republican institutions for themselves. It
is indeed a question of grave consideration whether our recent and
present example is not calculated to check the growth and expansion of
free principles, and make those communities distrust, if not dread, a
government which at will consigns to military domination States that are
integral parts of our Federal Union, and, while ready to resist any
attempts by other nations to extend to this hemisphere the monarchical
institutions of Europe, assumes to establish over a large portion of its
people a rule more absolute, harsh, and tyrannical than any known to
civilized powers.

The acquisition of Alaska was made with the view of extending national
jurisdiction and republican principles in the American hemisphere.
Believing that a further step could be taken in the same direction, I
last year entered into a treaty with the King of Denmark for the
purchase of the islands of St. Thomas and St. John, on the best terms
then attainable, and with the express consent of the people of those
islands. This treaty still remains under consideration in the Senate. A
new convention has been entered into with Denmark, enlarging the time
fixed for final ratification of the original treaty.

Comprehensive national policy would seem to sanction the acquisition and
incorporation into our Federal Union of the several adjacent continental
and insular communities as speedily as it can be done peacefully,
lawfully, and without any violation of national justice, faith, or
honor. Foreign possession or control of those communities has hitherto
hindered the growth and impaired the influence of the United States.
Chronic revolution and anarchy there would be equally injurious. Each
one of them, when firmly established as an independent republic, or when
incorporated into the United States, would be a new source of strength
and power. Conforming my Administration to these principles, I have or
no occasion lent support or toleration to unlawful expeditions set on
foot upon the plea of republican propagandism or of national extension
or aggrandizement. The necessity, however, of repressing such unlawful
movements clearly indicates the duty which rests upon us of adapting our
legislative action to the new circumstances of a decline of European
monarchical power and influence and the increase of American republican
ideas, interests, and sympathies.

It can not be long before it will become necessary for this Government
to lend some effective aid to the solution of the political and social
problems which are continually kept before the world by the two
Republics of the island of St. Domingo, and which are now disclosing
themselves more distinctly than heretofore in the island of Cuba. The
subject is commended to your consideration with all the more earnestness
because I am satisfied that the time has arrived when even so direct a
proceeding as a proposition for an annexation of the two Republics of
the island of St. Domingo would not only receive the consent of the
people interested, but would also give satisfaction to all other foreign
nations.

I am aware that upon the question of further extending our possessions
it is apprehended by some that our political system can not successfully
be applied to an area more extended than our continent; but the
conviction is rapidly gaining ground in the American mind that with the
increased facilities for intercommunication between all portions of the
earth the principles of free government, as embraced in our
Constitution, if faithfully maintained and carried out, would prove of
sufficient strength and breadth to comprehend within their sphere and
influence the civilized nations of the world.

The attention of the Senate and of Congress is again respectfully
invited to the treaty for the establishment of commercial reciprocity
with the Hawaiian Kingdom entered into last year, and already ratified
by that Government. The attitude of the United States toward these
islands is not very different from that in which they stand toward the
West Indies. It is known and felt by the Hawaiian Government and people
that their Government and institutions are feeble and precarious; that
the United States, being so near a neighbor, would be unwilling to see
the islands pass under foreign control. Their prosperity is continually
disturbed by expectations and alarms of unfriendly political
proceedings, as well from the United States as from other foreign
powers. A reciprocity treaty, while it could not materially diminish the
revenues of the United States, would be a guaranty of the good will and
forbearance of all nations until the people of the islands shall of
themselves, at no distant day, voluntarily apply for admission into the
Union.

The Emperor of Russia has acceded to the treaty negotiated here in
January last for the security of trade-marks in the interest of
manufacturers and commerce. I have invited his attention to the
importance of establishing, now while it seems easy and practicable, a
fair and equal regulation of the vast fisheries belonging to the two
nations in the waters of the North Pacific Ocean.

The two treaties between the United States and Italy for the regulation
of consular powers and the extradition of criminals, negotiated and
ratified here during the last session of Congress, have been accepted
and confirmed by the Italian Government. A liberal consular convention
which has been negotiated with Belgium will be submitted to the Senate.
The very important treaties which were negotiated between the United
States and North Germany and Bavaria for the regulation of the rights of
naturalized citizens have been duly ratified and exchanged, and similar
treaties have been entered into with the Kingdoms of Belgium and
Wurtemberg and with the Grand Duchies of Baden and Hesse-Darmstadt. I
hope soon to be able to submit equally satisfactory conventions of the
same character now in the course of negotiation with the respective
Governments of Spain, Italy, and the Ottoman Empire.

Examination of claims against the United States by the Hudsons Bay
Company and the Puget Sound Agricultural Company, on account of certain
possessory rights in the State of Oregon and Territory of Washington,
alleged by those companies in virtue of provisions of the treaty between
the United States and Great Britain of June 15, 1846, has been
diligently prosecuted, under the direction of the joint international
commission to which they were submitted for adjudication by treaty
between the two Governments of July 1, 1863, and will, it is expected,
be concluded at an early day.

No practical regulation concerning colonial trade and the fisheries can
be accomplished by treaty between the United States and Great Britain
until Congress shall have expressed their judgment concerning the
principles involved. Three other questions, however, between the United
States and Great Britain remain open for adjustment. These are the
mutual rights of naturalized citizens, the boundary question involving
the title to the island of San Juan, on the Pacific coast, and mutual
claims arising since the year 1853 of the citizens and subjects of the
two countries for injuries and depredations committed under the
authority of their respective Governments. Negotiations upon these
subjects are pending, and I am not without hope of being able to lay
before the Senate, for its consideration during the present session,
protocols calculated to bring to an end these justly exciting and
long-existing controversies.

We are not advised of the action of the Chinese Government upon the
liberal and auspicious treaty which was recently celebrated with its
plenipotentiaries at this capital.

Japan remains a theater of civil war, marked by religious incidents and
political severities peculiar to that long-isolated Empire. The
Executive has hitherto maintained strict neutrality among the
belligerents, and acknowledges with pleasure that it has been frankly
and fully sustained in that course by the enlightened concurrence and
cooperation of the other treaty powers, namely Great Britain, France,
the Netherlands, North Germany, and Italy.

Spain having recently undergone a revolution marked by extraordinary
unanimity and preservation of order, the provisional government
established at Madrid has been recognized, and the friendly intercourse
which has so long happily existed between the two countries remains
unchanged.

I renew the recommendation contained in my communication to Congress
dated the 18th July last--a copy of which accompanies this message that
the judgment of the people should be taken on the propriety of so
amending the Federal Constitution that it shall provide--

First. For an election of President and Vice-President by a direct vote
of the people, instead of through the agency of electors, and making
them ineligible for reelection to a second term.

Second. For a distinct designation of the person who shall discharge the
duties of President in the event of a vacancy in that office by the
death, resignation, or removal of both the President and Vice-President.

Third. For the election of Senators of the United States directly by the
people of the several States, instead of by the legislatures; and

Fourth. For the limitation to a period of years of the terms of Federal
judges.

Profoundly impressed with the propriety of making these important
modifications in the Constitution, I respectfully submit them for the
early and mature consideration of Congress. We should, as far as
possible, remove all pretext for violations of the organic law, by
remedying such imperfections as time and experience may develop, ever
remembering that "the constitution which at any time exists until
changed by an explicit and authentic act of the whole people is sacredly
obligatory upon all."

In the performance of a duty imposed upon me by the Constitution, I have
thus communicated to Congress information of the state of the Union and
recommended for their consideration such measures as have seemed to me
necessary and expedient. If carried into effect, they will hasten the
accomplishment of the great and beneficent purposes for which the
Constitution was ordained, and which it comprehensively states were "to
form a more perfect Union, establish justice, insure domestic
tranquillity, provide for the common defense, promote the general
welfare, and secure the blessings of liberty to ourselves and our
posterity." In Congress are vested all legislative powers, and upon them
devolves the responsibility as well for framing unwise and excessive
laws as for neglecting to devise and adopt measures absolutely demanded
by the wants of the country. Let us earnestly hope that before the
expiration of our respective terms of service, now rapidly drawing to a
close, an all-wise Providence will so guide our counsels as to
strengthen and preserve the Federal Unions, inspire reverence for the
Constitution, restore prosperity and happiness to our whole people, and
promote "on earth peace, good will toward men."

***

State of the Union Address
Ulysses S. Grant
December 6, 1869

To the Senate and House of Representatives:

In coming before you for the first time as Chief Magistrate of this
great nation, it is with gratitude to the Giver of All Good for the many
benefits we enjoy. We are blessed with peace at home, and are without
entangling alliances abroad to forebode trouble; with a territory
unsurpassed in fertility, of an area equal to the abundant support of
500,000,000 people, and abounding in every variety of useful mineral in
quantity sufficient to supply the world for generations; with exuberant
crops; with a variety of climate adapted to the production of every
species of earth's riches and suited to the habits, tastes, and
requirements of every living thing; with a population of 40,000,000 free
people, all speaking one language; with facilities for every mortal to
acquire an education; with institutions closing to none the avenues to
fame or any blessing of fortune that may be coveted; with freedom of the
pulpit, the press, and the school; with a revenue flowing into the
National Treasury beyond the requirements of the Government. Happily,
harmony is being rapidly restored within our own borders. Manufactures
hitherto unknown in our country are springing up in all sections,
producing a degree of national independence unequaled by that of any
other power.

These blessings and countless others are intrusted to your care and mine
for safe-keeping for the brief period of our tenure of office. In a
short time we must, each of us, return to the ranks of the people, who
have conferred upon us our honors, and account to them for our
stewardship. I earnestly desire that neither you nor I may be condemned
by a free and enlightened constituency nor by our own consciences.

Emerging from a rebellion of gigantic magnitude, aided, as it was, by
the sympathies and assistance of nations with which we were at peace,
eleven States of the Union were, four years ago, left without legal
State governments. A national debt had been contracted; American
commerce was almost driven from the seas; the industry of one-half of
the country had been taken from the control of the capitalist and placed
where all labor rightfully belongs--in the keeping of the laborer. The
work of restoring State governments loyal to the Union, of protecting
and fostering free labor, and providing means for paying the interest on
the public debt has received ample attention from Congress. Although
your efforts have not met with the success in all particulars that might
have been desired, yet on the whole they have been more successful than
could have been reasonably anticipated.

Seven States which passed ordinances of secession have been fully
restored to their places in the Union. The eighth (Georgia) held an
election at which she ratified her constitution, republican in form,
elected a governor, Members of Congress, a State legislature, and all
other officers required. The governor was duly installed, and the
legislature met and performed all the acts then required of them by the
reconstruction acts of Congress. Subsequently, however, in violation of
the constitution which they had just ratified (as since decided by the
supreme court of the State), they unseated the colored members of the
legislature and admitted to seats some members who are disqualified by
the third clause of the fourteenth amendment to the Constitution--an
article which they themselves had contributed to ratify. Under these
circumstances I would submit to you whether it would not be wise,
without delay, to enact a law authorizing the governor of Georgia to
convene the members originally elected to the legislature, requiring
each member to take the oath prescribed by the reconstruction acts, and
none to be admitted who are ineligible under the third clause of the
fourteenth amendment.

The freedmen, under the protection which they have received, are making
rapid progress in learning, and no complaints are heard of lack of
industry on their part where they receive fair remuneration for their
labor. The means provided for paying the interest on the public debt,
with all other expenses of Government, are more than ample. The loss of
our commerce is the only result of the late rebellion which has not
received sufficient attention from you. To this subject I call your
earnest attention. I will not now suggest plans by which this object may
be effected, but will, if necessary, make it the subject of a special
message during the session of Congress.

At the March term Congress by joint resolution authorized the Executive
to order elections in the States of Virginia, Mississippi, and Texas, to
submit to them the constitutions which each had previously, in
convention, framed, and submit the constitutions, either entire or in
separate parts, to be voted upon, at the discretion of the Executive.
Under this authority elections were called. In Virginia the election
took place on the 6th of July, 1869. The governor and
lieutenant-governor elected have been installed. The legislature met and
did all required by this resolution and by all the reconstruction acts
of Congress, and abstained from all doubtful authority. I recommend that
her Senators and Representatives be promptly admitted to their seats,
and that the State be fully restored to its place in the family of
States. Elections were called in Mississippi and Texas, to commence on
the 30th of November, 1869, and to last two days in Mississippi and four
days in Texas. The elections have taken place, but the result is not
known. It is to be hoped that the acts of the legislatures of these
States, when they meet, will be such as to receive your approval, and
thus close the work of reconstruction.

Among the evils growing out of the rebellion, and not yet referred to,
is that of an irredeemable currency. It is an evil which I hope will
receive your most earnest attention. It is a duty, and one of the
highest duties, of Government to secure to the citizen a medium of
exchange of fixed, unvarying value. This implies a return to a specie
basis, and no substitute for it can be devised. It should be commenced
now and reached at the earliest practicable moment consistent with a
fair regard to the interests of the debtor class. Immediate resumption,
if practicable, would not be desirable. It would compel the debtor class
to pay, beyond their contracts, the premium on gold at the date of their
purchase and would bring bankruptcy and ruin to thousands. Fluctuation,
however, in the paper value of the measure of all values (gold) is
detrimental to the interests of trade. It makes the man of business an
involuntary gambler, for in all sales where future payment is to be made
both parties speculate as to what will be the value of the currency to
be paid and received. I earnestly recommend to you, then, such
legislation as will insure a gradual return to specie payments and put
an immediate stop to fluctuations in the value of currency.

The methods to secure the former of these results are as numerous as are
the speculators on political economy. To secure the latter I see but one
way, and that is to authorize the Treasury to redeem its own paper, at a
fixed price, whenever presented, and to withhold from circulation all
currency so redeemed until sold again for gold.

The vast resources of the nation, both developed and undeveloped, ought
to make our credit the best on earth. With a less burden of taxation
than the citizen has endured for six years past, the entire public debt
could be paid in ten years. But it is not desirable that the people
should be taxed to pay it in that time. Year by year the ability to pay
increases in a rapid ratio. But the burden of interest ought to be
reduced as rapidly as can be done without the violation of contract. The
public debt is represented in great part by bonds having from five to
twenty and from ten to forty years to run, bearing interest at the rate
of 6 per cent and 5 per cent, respectively. It is optional with the
Government to pay these bonds at any period after the expiration of the
least time mentioned upon their face. The time has already expired when
a great part of them may be taken up, and is rapidly approaching when
all may be. It is believed that all which are now due may be replaced by
bonds bearing a rate of interest not exceeding 4 1/2 per cent, and as
rapidly as the remainder become due that they may be replaced in the
same way. To accomplish this it may be necessary to authorize the
interest to be paid at either of three or four of the money centers of
Europe, or by any assistant treasurer of the United States, at the
option of the holder of the bond. I suggest this subject for the
consideration of Congress, and also, simultaneously with this, the
propriety of redeeming our currency, as before suggested, at its market
value at the time the law goes into effect, increasing the rate at which
currency shall be bought and sold from day to day or week to week, at
the same rate of interest as Government pays upon its bonds.

The subjects of tariff and internal taxation will necessarily receive
your attention. The revenues of the country are greater than the
requirements, and may with safety be reduced. But as the funding of the
debt in a 4 or a 4 1/2 per cent loan would reduce annual current
expenses largely, thus, after funding, justifying a greater reduction of
taxation than would be now expedient, I suggest postponement of this
question until the next meeting of Congress.

It may be advisable to modify taxation and tariff in instances where
unjust or burdensome discriminations are made by the present laws, but a
general revision of the laws regulating this subject I recommend the
postponement of for the present. I also suggest the renewal of the tax
on incomes, but at a reduced rate, say of 3 per cent, and this tax to
expire in three years.

With the funding of the national debt, as here suggested, I feel safe in
saying that taxes and the revenue from imports may be reduced safely
from sixty to eighty millions per annum at once, and may be still
further reduced from year to year, as the resources of the country are
developed.

The report of the Secretary of the Treasury shows the receipts of the
Government for the fiscal year ending June 30, 1869, to be $370,943,747,
and the expenditures, including interest, bounties, etc., to be
$321,490,597. The estimates for the ensuing year are more favorable to
the Government, and will no doubt show a much larger decrease of the
public debt.

The receipts in the Treasury beyond expenditures have exceeded the
amount necessary to place to the credit of the sinking fund, as provided
by law. To lock up the surplus in the Treasury and withhold it from
circulation would lead to such a contraction of the currency as to
cripple trade and seriously affect the prosperity of the country. Under
these circumstances the Secretary of the Treasury and myself heartily
concurred in the propriety of using all the surplus currency in the
Treasury in the purchase of Government bonds, thus reducing the
interest-bearing indebtedness of the country, and of submitting to
Congress the question of the disposition to be made of the bonds so
purchased. The bonds now held by the Treasury amount to about
seventy-five millions, including those belonging to the sinking fund. I
recommend that the whole be placed to the credit of the sinking fund.

Your attention is respectfully invited to the recommendations of the
Secretary of the Treasury for the creation of the office of commissioner
of customs revenue; for the increase of salaries to certain classes of
officials; the substitution of increased national-bank circulation to
replace the outstanding 3 per cent certificates; and most especially to
his recommendation for the repeal of laws allowing shares of fines,
penalties, forfeitures, etc., to officers of the Government or to
informers.

The office of Commissioner of Internal Revenue is one of the most
arduous and responsible under the Government. It falls but little, if
any, short of a Cabinet position in its importance and responsibilities.
I would ask for it, therefore, such legislation as in your judgment will
place the office upon a footing of dignity commensurate with its
importance and with the character and qualifications of the class of men
required to fill it properly.

As the United States is the freest of all nations, so, too, its people
sympathize with all people struggling for liberty and self-government;
but while so sympathizing it is due to our honor that we should abstain
from enforcing our views upon unwilling nations and from taking an
interested part, without invitation, in the quarrels between different
nations or between governments and their subjects. Our course should
always be in conformity with strict justice and law, international and
local. Such has been the policy of the Administration in dealing with
these questions. For more than a year a valuable province of Spain, and
a near neighbor of ours, in whom all our people can not but feel a deep
interest, has been struggling for independence and freedom. The people
and Government of the United States entertain the same warm feelings and
sympathies for the people of Cuba in their pending struggle that they
manifested throughout the previous struggles between Spain and her
former colonies in behalf of the latter. But the contest has at no time
assumed the conditions which amount to a war in the sense of
international law, or which would show the existence of a de facto
political organization of the insurgents sufficient to justify a
recognition of belligerency.

The principle is maintained, however, that this nation is its own judge
when to accord the rights of belligerency, either to a people struggling
to free themselves from a government they believe to be oppressive or to
independent nations at war with each other.

The United States have no disposition to interfere with the existing
relations of Spain to her colonial possessions on this continent. They
believe that in due time Spain and other European powers will find their
interest in terminating those relations and establishing their present
dependencies as independent powers--members of the family of nations.
These dependencies are no longer regarded as subject to transfer from
one European power to another. When the present relation of colonies
ceases, they are to become independent powers, exercising the right of
choice and of self-control in the determination of their future
condition and relations with other powers.

The United States, in order to put a stop to bloodshed in Cuba, and in
the interest of a neighboring people, proposed their good offices to
bring the existing contest to a termination. The offer, not being
accepted by Spain on a basis which we believed could be received by
Cuba, was withdrawn. It is hoped that the good offices of the United
States may yet prove advantageous for the settlement of this unhappy
strife. Meanwhile a number of illegal expeditions against Cuba have been
broken up. It has been the endeavor of the Administration to execute the
neutrality laws in good faith, no matter how unpleasant the task, made
so by the sufferings we have endured from lack of like good faith toward
us by other nations.

On the 26th of March last the United States schooner Lizzie Major was
arrested on the high seas by a Spanish frigate, and two passengers taken
from it and carried as prisoners to Cuba. Representations of these facts
were made to the Spanish Government as soon as official information of
them reached Washington. The two passengers were set at liberty, and the
Spanish Government assured the United States that the captain of the
frigate in making the capture had acted without law, that he had been
reprimanded for the irregularity of his conduct, and that the Spanish
authorities in Cuba would not sanction any act that could violate the
rights or treat with disrespect the sovereignty of this nation.

The question of the seizure of the brig Mary Lowell at one of the Bahama
Islands by Spanish authorities is now the subject of correspondence
between this Government and those of Spain and Great Britain.

The Captain-General of Cuba about May last issued a proclamation
authorizing search to be made of vessels on the high seas. Immediate
remonstrance was made against this, whereupon the Captain-General issued
a new proclamation limiting the right of search to vessels of the United
States so far as authorized under the treaty of 1795. This proclamation,
however, was immediately withdrawn.

I have always felt that the most intimate relations should be cultivated
between the Republic of the United States and all independent nations on
this continent. It may be well worth considering whether new treaties
between us and them may not be profitably entered into, to secure more
intimate relations--friendly, commercial, and otherwise.

The subject of an interoceanic canal to connect the Atlantic and Pacific
oceans through the Isthmus of Darien is one in which commerce is greatly
interested. Instructions have been given to our minister to the Republic
of the United States of Colombia to endeavor to obtain authority for a
survey by this Government, in order to determine the practicability of
such an undertaking, and a charter for the right of way to build, by
private enterprise, such a work, if the survey proves it to be
practicable.

In order to comply with the agreement of the United States as to a mixed
commission at Lima for the adjustment of claims, it became necessary to
send a commissioner and secretary to Lima in August last. No
appropriation having been made by Congress for this purpose, it is now
asked that one be made covering the past and future expenses of the
commission.

The good offices of the United States to bring about a peace between
Spain and the South American Republics with which she is at war having
been accepted by Spain, Peru, and Chile, a congress has been invited to
be held in Washington during the present winter.

A grant has been given to Europeans of an exclusive right of transit
over the territory of Nicaragua, to which Costa Rico has given its
assent, which, it is alleged, conflicts with vested rights of citizens
of the United States. The Department of State has now this subject under
consideration.

The minister of Peru having made representations that there was a state
of war between Peru and Spain, and that Spain was constructing, in and
near New York, thirty gunboats, which might be used by Spain in such a
way as to relieve the naval force at Cuba, so as to operate against
Peru, orders were given to prevent their departure. No further steps
having been taken by the representative of the Peruvian Government to
prevent the departure of these vessels, and I not feeling authorized to
detain the property of a nation with which we are at peace on a mere
Executive order, the matter has been referred to the courts to decide.

The conduct of the war between the allies and the Republic of Paraguay
has made the intercourse with that country so difficult that it has been
deemed advisable to withdraw our representative from there.

Toward the close of the last Administration a convention was signed at
London for the settlement of all outstanding claims between Great
Britain and the United States, which failed to receive the advice and
consent of the Senate to its ratification. The time and the
circumstances attending the negotiation of that treaty were unfavorable
to its acceptance by the people of the United States, and its provisions
were wholly inadequate for the settlement of the grave wrongs that had
been sustained by this Government, as well as by its citizens. The
injuries resulting to the United States by reason of the course adopted
by Great Britain during our late civil war--in the increased rates of
insurance; in the diminution of exports and imports, and other
obstructions to domestic industry and production; in its effect upon the
foreign commerce of the country; in the decrease and transfer to Great
Britain of our commercial marine; in the prolongation of the war and the
increased cost (both in treasure and in lives) of its suppression could
not be adjusted and satisfied as ordinary commercial claims, which
continually arise between commercial nations; and yet the convention
treated them simply as such ordinary claims, from which they differ more
widely in the gravity of their character than in the magnitude of their
amount, great even as is that difference. Not a word was found in the
treaty, and not an inference could be drawn from it, to remove the sense
of the unfriendliness of the course of Great Britain in our struggle for
existence, which had so deeply and universally impressed itself upon the
people of this country.

Believing that a convention thus misconceived in its scope and
inadequate in its provisions would not have produced the hearty, cordial
settlement of pending questions, which alone is consistent with the
relations which I desire to have firmly established between the United
States and Great Britain, I regarded the action of the Senate in
rejecting the treaty to have been wisely taken in the interest of peace
and as a necessary step in the direction of a perfect and cordial
friendship between the two countries. A sensitive people, conscious of
their power, are more at ease under a great wrong wholly unatoned than
under the restraint of a settlement which satisfies neither their ideas
of justice nor their grave sense of the grievance they have sustained.
The rejection of the treaty was followed by a state of public feeling on
both sides which I thought not favorable to an immediate attempt at
renewed negotiations. I accordingly so instructed the minister of the
United States to Great Britain, and found that my views in this regard
were shared by Her Majesty's ministers. I hope that the time may soon
arrive when the two Governments can approach the solution of this
momentous question with an appreciation of what is due to the rights,
dignity, and honor of each, and with the determination not only to
remove the causes of complaint in the past, but to lay the foundation of
a broad principle of public law which will prevent future differences
and tend to firm and continued peace and friendship.

This is now the only grave question which the United States has with any
foreign nation.

The question of renewing a treaty for reciprocal trade between the
United States and the British Provinces on this continent has not been
favorably considered by the Administration. The advantages of such a
treaty would be wholly in favor of the British producer. Except,
possibly, a few engaged in the trade between the two sections, no
citizen of the United States would be benefited by reciprocity. Our
internal taxation would prove a protection to the British producer
almost equal to the protection which our manufacturers now receive from
the tariff. Some arrangement, however, for the regulation of commercial
intercourse between the United States and the Dominion of Canada may be
desirable.

The commission for adjusting the claims of the "Hudsons Bay and Puget
Sound Agricultural Company" upon the United States has terminated its
labors. The award of $650,000 has been made and all rights and titles of
the company on the territory of the United States have been
extinguished. Deeds for the property of the company have been delivered.
An appropriation by Congress to meet this sum is asked.

The commissioners for determining the northwestern land boundary between
the United States and the British possessions under the treaty of 1856
have completed their labors, and the commission has been dissolved.

In conformity with the recommendation of Congress, a proposition was
early made to the British Government to abolish the mixed courts created
under the treaty of April 7, 1862, for the suppression of the slave
trade. The subject is still under negotiation.

It having come to my knowledge that a corporate company, organized under
British laws, proposed to land upon the shores of the United States and
to operate there a submarine cable, under a concession from His Majesty
the Emperor of the French of an exclusive right for twenty years of
telegraphic communication between the shores of France and the United
States, with the very objectionable feature of subjecting all messages
conveyed thereby to the scrutiny and control of the French Government, I
caused the French and British legations at Washington to be made
acquainted with the probable policy of Congress on this subject, as
foreshadowed by the bill which passed the Senate in March last. This
drew from the representatives of the company an agreement to accept as
the basis of their operations the provisions of that bill, or of such
other enactment on the subject as might be passed during the approaching
session of Congress; also, to use their influence to secure from the
French Government a modification of their concession, so as to permit
the landing upon French soil of any cable belonging to any company
incorporated by the authority of the United States or of any State in
the Union, and, on their part, not to oppose the establishment of any
such cable. In consideration of this agreement I directed the withdrawal
of all opposition by the United States authorities to the landing of the
cable and to the working of it until the meeting of Congress. I regret
to say that there has been no modification made in the company's
concession, nor, so far as I can learn, have they attempted to secure
one. Their concession excludes the capital and the citizens of the
United States from competition upon the shores of France. I recommend
legislation to protect the rights of citizens of the United States, as
well as the dignity and sovereignty of the nation, against such an
assumption. I shall also endeavor to secure, by negotiation, an
abandonment of the principle of monopolies in ocean telegraphic cables.
Copies of this correspondence are herewith furnished.

The unsettled political condition of other countries, less fortunate
than our own, sometimes induces their citizens to come to the United
States for the sole purpose of becoming naturalized. Having secured
this, they return to their native country and reside there, without
disclosing their change of allegiance. They accept official positions of
trust or honor, which can only be held by citizens of their native land;
they journey under passports describing them as such citizens; and it is
only when civil discord, after perhaps years of quiet, threatens their
persons or their property, or when their native state drafts them into
its military service, that the fact of their change of allegiance is
made known. They reside permanently away from the United States, they
contribute nothing to its revenues, they avoid the duties of its
citizenship, and they only make themselves known by a claim of
protection. I have directed the diplomatic and consular officers of the
United States to scrutinize carefully all such claims for protection.
The citizen of the United States, whether native or adopted, who
discharges his duty to his country, is entitled to its complete
protection. While I have a voice in the direction of affairs I shall not
consent to imperil this sacred right by conferring it upon fictitious or
fraudulent claimants.

On the accession of the present Administration it was found that the
minister for North Germany had made propositions for the negotiation of
a convention for the protection of emigrant passengers, to which no
response had been given. It was concluded that to be effectual all the
maritime powers engaged in the trade should join in such a measure.
Invitations have been extended to the cabinets of London, Paris,
Florence, Berlin, Brussels, The Hague, Copenhagen, and Stockholm to
empower their representatives at Washington to simultaneously enter into
negotiations and to conclude with the United States conventions
identical in form, making uniform regulations as to the construction of
the parts of vessels to be devoted to the use of emigrant passengers, as
to the quality and quantity of food, as to the medical treatment of the
sick, and as to the rules to be observed during the voyage, in order to
secure ventilation, to promote health, to prevent intrusion, and to
protect the females; and providing for the establishment of tribunals in
the several countries for enforcing such regulations by summary process.

Your attention is respectfully called to the law regulating the tariff
on Russian hemp, and to the question whether to fix the charges on
Russian hemp higher than they are fixed upon manila is not a violation
of our treaty with Russia placing her products upon the same footing
with those of the most favored nations.

Our manufactures are increasing with wonderful rapidity under the
encouragement which they now receive. With the improvements in machinery
already effected, and still increasing, causing machinery to take the
place of skilled labor to a large extent, our imports of many articles
must fall off largely within a very few years. Fortunately, too,
manufactures are not confined to a few localities, as formerly, and it
is to be hoped will become more and more diffused, making the interest
in them equal in all sections. They give employment and support to
hundreds of thousands of people at home, and retain with us the means
which otherwise would be shipped abroad. The extension of railroads in
Europe and the East is bringing into competition with our agricultural
products like products of other countries. Self-interest, if not
self-preservation, therefore dictates caution against disturbing any
industrial interest of the country. It teaches us also the necessity of
looking to other markets for the sale of our surplus. Our neighbors
south of us and China and Japan, should receive our special attention.
It will be the endeavor of the Administration to cultivate such
relations with all these nations as to entitle us to their confidence
and make it their interest, as well as ours, to establish better
commercial relations.

Through the agency of a more enlightened policy than that heretofore
pursued toward China, largely due to the sagacity and efforts of one of
our own distinguished citizens, the world is about to commence largely
increased relations with that populous and hitherto exclusive nation. As
the United States have been the initiators in this new policy, so they
should be the most earnest in showing their good faith in making it a
success. In this connection I advise such legislation as will forever
preclude the enslavement of the Chinese upon our soil under the name of
coolies, and also prevent American vessels from engaging in the
transportation of coolies to any country tolerating the system. I also
recommend that the mission to China be raised to one of the first class.

On my assuming the responsible duties of Chief Magistrate of the United
States it was with the conviction that three things were essential to
its peace, prosperity, and fullest development. First among these is
strict integrity in fulfilling all our obligations; second, to secure
protection to the person and property of the citizen of the United
States in each and every portion of our common country, wherever he may
choose to move, without reference to original nationality, religion,
color, or politics, demanding of him only obedience to the laws and
proper respect for the rights of others; third, union of all the States,
with equal rights, indestructible by any constitutional means.

To secure the first of these, Congress has taken two essential steps:
First, in declaring by joint resolution that the public debt shall be
paid, principal and interest, in coin; and, second, by providing the
means for paying. Providing the means, however, could not secure the
object desired without a proper administration of the laws for the
collection of the revenues and an economical disbursement of them. To
this subject the Administration has most earnestly addressed itself,
with results, I hope, satisfactory to the country. There has been no
hesitation in changing officials in order to secure an efficient
execution of the laws, sometimes, too, when, in a mere party view,
undesirable political results were likely to follow; nor any hesitation
in sustaining efficient officials against remonstrances wholly
political.

It may be well to mention here the embarrassment possible to arise from
leaving on the statute books the so-called "tenure-of-office acts," and
to earnestly recommend their total repeal. It could not have been the
intention of the framers of the Constitution, when providing that
appointments made by the President should receive the consent of the
Senate, that the latter should have the power to retain in office
persons placed there by Federal appointment against the will of the
President. The law is inconsistent with a faithful and efficient
administration of the Government. What faith can an Executive put in
officials forced upon him, and those, too, whom he has suspended for
reason? How will such officials be likely to serve an Administration
which they know does not trust them?

For the second requisite to our growth and prosperity time and a firm
but humane administration of existing laws (amended from time to time as
they may prove ineffective or prove harsh and unnecessary) are probably
all that are required.

The third can not be attained by special legislation, but must be
regarded as fixed by the Constitution itself and gradually acquiesced in
by force of public opinion.

From the foundation of the Government to the present the management of
the original inhabitants of this continent--the Indians--has been a
subject of embarrassment and expense, and has been attended with
continuous robberies, murders, and wars. From my own experience upon the
frontiers and in Indian countries, I do not hold either legislation or
the conduct of the whites who come most in contact with the Indian
blameless for these hostilities. The past, however, can not be undone,
and the question must be met as we now find it. I have attempted a new
policy toward these wards of the nation (they can not be regarded in any
other light than as wards), with fair results so far as tried, and which
I hope will be attended ultimately with great success. The Society of
Friends is well known as having succeeded in living in peace with the
Indians in the early settlement of Pennsylvania, while their white
neighbors of other sects in other sections were constantly embroiled.
They are also known for their opposition to all strife, violence, and
war, and are generally noted for their strict integrity and fair
dealings. These considerations induced me to give the management of a
few reservations of Indians to them and to throw the burden of the
selection of agents upon the society itself. The result has proven most
satisfactory. It will be found more fully set forth in the report of the
Commissioner of Indian Affairs. For superintendents and Indian agents
not on the reservations, officers of the Army were selected. The reasons
for this are numerous. Where Indian agents are sent, there, or near
there, troops must be sent also. The agent and the commander of troops
are independent of each other, and are subject to orders from different
Departments of the Government. The army officer holds a position for
life; the agent, one at the will of the President. The former is
personally interested in living in harmony with the Indian and in
establishing a permanent peace, to the end that some portion of his life
may be spent within the limits of civilized society; the latter has no
such personal interest. Another reason is an economic one; and still
another, the hold which the Government has upon a life officer to secure
a faithful discharge of duties in carrying out a given policy.

The building of railroads, and the access thereby given to all the
agricultural and mineral regions of the country, is rapidly bringing
civilized settlements into contact with all the tribes of Indians. No
matter what ought to be the relations between such settlements and the
aborigines, the fact is they do not harmonize well, and one or the other
has to give way in the end. A system which looks to the extinction of a
race is too horrible for a nation to adopt without entailing upon itself
the wrath of all Christendom and engendering in the citizen a disregard
for human life and the rights of others, dangerous to society. I see no
substitute for such a system, except in placing all the Indians on large
reservations, as rapidly as it can be done, and giving them absolute
protection there. As soon as they are fitted for it they should be
induced to take their lands in severalty and to set up Territorial
governments for their own protection. For full details on this subject I
call your special attention to the reports of the Secretary of the
Interior and the Commissioner of Indian Affairs.

The report of the Secretary of War shows the expenditures of the War
Department for the year ending June 30, 1869, to be $80,644,042, of
which $23,882,310 was disbursed in the payment of debts contracted
during the war, and is not chargeable to current army expenses. His
estimate of $34,531,031 for the expenses of the Army for the next fiscal
year is as low as it is believed can be relied on. The estimates of
bureau officers have been carefully scrutinized, and reduced wherever it
has been deemed practicable. If, however, the condition of the country
should be such by the beginning of the next fiscal year as to admit of a
greater concentration of troops, the appropriation asked for will not be
expended.

The appropriations estimated for river and harbor improvements and for
fortifications are submitted separately. Whatever amount Congress may
deem proper to appropriate for these purposes will be expended.

The recommendation of the General of the Army that appropriations be
made for the forts at Boston. Portland, New York, Philadelphia, New
Orleans, and San Francisco, if for no other, is concurred in. I also ask
your special attention to the recommendation of the general commanding
the Military Division of the Pacific for the sale of the seal islands of
St. Paul and St. George, Alaska Territory, and suggest that it either be
complied with or that legislation be had for the protection of the seal
fisheries from which a revenue should be derived.

The report of the Secretary of War contains a synopsis of the reports of
the heads of bureaus, of the commanders of military divisions, and of
the districts of Virginia, Mississippi, and Texas, and the report of the
General of the Army in full. The recommendations therein contained have
been well considered, and are submitted for your action. I, however,
call special attention to the recommendation of the Chief of Ordnance
for the sale of arsenals and lands no longer of use to the Government;
also, to the recommendation of the Secretary of War that the act of 3d
March, 1869, prohibiting promotions and appointments in the staff corps
of the Army, be repealed. The extent of country to be garrisoned and the
number of military posts to be occupied is the same with a reduced Army
as with a large one. The number of staff officers required is more
dependent upon the latter than the former condition.

The report of the Secretary of the Navy accompanying this shows the
condition of the Navy when this Administration came into office and the
changes made since. Strenuous efforts have been made to place as many
vessels "in commission," or render them fit for service if required, as
possible, and to substitute the sail for steam while cruising, thus
materially reducing the expenses of the Navy and adding greatly to its
efficiency. Looking to our future, I recommend a liberal, though not
extravagant, policy toward this branch of the public service.

The report of the Postmaster-General furnishes a clear and comprehensive
exhibit of the operations of the postal service and of the financial
condition of the Post-Office Department. The ordinary postal revenues
for the year ending the 30th of June, 1869, amounted to $18,344,510, and
the expenditures to $23,698,131, showing an excess of expenditures over
receipts of $5,353,620. The excess of expenditures over receipts for the
previous year amounted to $6,437,992. The increase of revenues for 1869
over those of 1868 was $2,051,909, and the increase of expenditures was
$967,538. The increased revenue in 1869 exceeded the increased revenue
in 1868 by $996,336, and the increased expenditure in 1869 was
$2,527,570 less than the increased expenditure in 1868, showing by
comparison this gratifying feature of improvement, that while the
increase of expenditures over the increase of receipts in 1868 was
$2,439,535, the increase of receipts over the increase of expenditures
in 1869 was $1,084,371.

Your attention is respectfully called to the recommendations made by the
Postmaster-General for authority to change the rate of compensation to
the main trunk railroad lines for their services in carrying the mails;
for having post-route maps executed; for reorganizing and increasing the
efficiency of the special-agency service; for increase of the mail
service on the Pacific, and for establishing mail service, under the
flag of the Union, on the Atlantic; and most especially do I call your
attention to his recommendation for the total abolition of the franking
privilege. This is an abuse from which no one receives a commensurate
advantage; it reduces the receipts for postal service from 25 to 30 per
cent and largely increases the service to be performed. The method by
which postage should be paid upon public matter is set forth fully in
the report of the Postmaster-General.

The report of the Secretary of the Interior shows that the quantity of
public lands disposed of during the year ending the 30th of June, 1869,
was 7,666,152 acres, exceeding that of the preceding year by 1,010,409
acres. Of this amount 2,899,544 acres were sold for cash and 2,737,365
acres entered under the homestead laws. The remainder was granted to aid
in the construction of works of internal improvement, approved to the
States as swamp land, and located with warrants and scrip. The cash
receipts from all sources were $4,472,886, exceeding those of the
preceding year $2,840,140.

During the last fiscal year 23,196 names were added to the pension rolls
and 4,876 dropped therefrom, leaving at its close 187,963. The amount
paid to pensioners, including the compensation of disbursing agents, was
$28,422,884, an increase of $4,411,902 on that of the previous year. The
munificence of Congress has been conspicuously manifested in its
legislation for the soldiers and sailors who suffered in the recent
struggle to maintain "that unity of government which makes us one
people." The additions to the pension rolls of each successive year
since the conclusion of hostilities result in a great degree from the
repeated amendments of the act of the 14th of July, 1862, which extended
its provisions to cases not falling within its original scope. The large
outlay which is thus occasioned is further increased by the more liberal
allowance bestowed since that date upon those who in the line of duty
were wholly or permanently disabled. Public opinion has given an
emphatic sanction to these measures of Congress, and it will be conceded
that no part of our public burden is more cheerfully borne than that
which is imposed by this branch of the service. It necessitates for the
next fiscal year, in addition to the amount justly chargeable to the
naval pension fund, an appropriation of $30,000,000.

During the year ending the 30th of September, 1869, the Patent Office
issued 13,762 patents, and its receipts were $686,389, being $213,926
more than the expenditures.

Messages and Papers of the Presidents, Ulysses S. Grant, vol. 6, p.3995

I would respectfully call your attention to the recommendation of the
Secretary of the Interior for uniting the duties of supervising the
education of freedmen with the other duties devolving upon the
Commissioner of Education.

If it is the desire of Congress to make the census which must be taken
during the year 1870 more complete and perfect than heretofore, I would
suggest early action upon any plan that may be agreed upon. As Congress
at the last session appointed a committee to take into consideration
such measures as might be deemed proper in reference to the census and
report a plan, I desist from saying more.

I recommend to your favorable consideration the claims of the
Agricultural Bureau for liberal appropriations. In a country so
diversified in climate and soil as ours, and with a population so
largely dependent upon agriculture, the benefits that can be conferred
by properly fostering this Bureau are incalculable.

I desire respectfully to call the attention of Congress to the
inadequate salaries of a number of the most important offices of the
Government. In this message I will not enumerate them, but will specify
only the justices of the Supreme Court. No change has been made in their
salaries for fifteen years. Within that time the labors of the court
have largely increased and the expenses of living have at least doubled.
During the same time Congress has twice found it necessary to increase
largely the compensation of its own members, and the duty which it owes
to another department of the Government deserves, and will undoubtedly
receive, its due consideration.

There are many subjects not alluded to in this message which might with
propriety be introduced, but I abstain, believing that your patriotism
and statesmanship will suggest the topics and the legislation most
conducive to the interests of the whole people. On my part I promise a
rigid adherence to the laws and their strict enforcement.

U. S. GRANT

***

State of the Union Address
Ulysses S. Grant
December 5, 1870

To the Senate and House of Representatives:

A year of peace and general prosperity to this nation has passed since
the last assembling of Congress. We have, through a kind Providence,
been blessed with abundant crops, and have been spared from
complications and war with foreign nations. In our midst comparative
harmony has been restored. It is to be regretted, however, that a free
exercise of the elective franchise has by violence and intimidation been
denied to citizens in exceptional cases in several of the States lately
in rebellion, and the verdict of the people has thereby been reversed.
The States of Virginia, Mississippi, and Texas have been restored to
representation in our national councils. Georgia, the only State now
without representation, may confidently be expected to take her place
there also at the beginning of the new year, and then, let us hope, will
be completed the work of reconstruction. With an acquiescence on the
part of the whole people in the national obligation to pay the public
debt created as the price of our Union, the pensions to our disabled
soldiers and sailors and their widows and orphans, and in the changes to
the Constitution which have been made necessary by a great rebellion,
there is no reason why we should not advance in material prosperity and
happiness as no other nation ever did after so protracted and
devastating a war.

Soon after the existing war broke out in Europe the protection of the
United States minister in Paris was invoked in favor of North Germans
domiciled in French territory. Instructions were issued to grant the
protection. This has been followed by an extension of American
protection to citizens of Saxony, Hesse and Saxe-Coburg, Gotha,
Colombia, Portugal, Uruguay, the Dominican Republic, Ecuador, Chile,
Paraguay, and Venezuela in Paris. The charge was an onerous one,
requiring constant and severe labor, as well as the exercise of
patience, prudence, and good judgment. It has been performed to the
entire satisfaction of this Government, and, as I am officially
informed, equally so to the satisfaction of the Government of North
Germany.

As soon as I learned that a republic had been proclaimed at Paris and
that the people of France had acquiesced in the change, the minister of
the United States was directed by telegraph to recognize it and to
tender my congratulations and those of the people of the United States.
The reestablishment in France of a system of government disconnected
with the dynastic traditions of Europe appeared to be a proper subject
for the felicitations of Americans. Should the present struggle result
in attaching the hearts of the French to our simpler forms of
representative government, it will be a subject of still further
satisfaction to our people. While we make no effort to impose our
institutions upon the inhabitants of other countries, and while we
adhere to our traditional neutrality in civil contests elsewhere, we can
not be indifferent to the spread of American political ideas in a great
and highly civilized country like France.

We were asked by the new Government to use our good offices, jointly
with those of European powers, in the interests of peace. Answer was
made that the established policy and the true interests of the United
States forbade them to interfere in European questions jointly with
European powers. I ascertained, informally and unofficially, that the
Government of North Germany was not then disposed to listen to such
representations from any power, and though earnestly wishing to see the
blessings of peace restored to the belligerents, with all of whom the
United States are on terms of friendship, I declined on the part of this
Government to take a step which could only result in injury to our true
interests without advancing the object for which our intervention was
invoked. Should the time come when the action of the United States can
hasten the return of peace by a single hour, that action will be
heartily taken. I deemed it prudent, in view of the number of persons of
German and French birth living in the United States, to issue, soon
after official notice of a state of war had been received from both
belligerents, a proclamation defining the duties of the United States as
a neutral and the obligations of persons residing within their territory
to observe their laws and the laws of nations. This proclamation was
followed by others, as circumstances seemed to call for them. The
people, thus acquainted in advance of their duties and obligations, have
assisted in preventing violations of the neutrality of the United
States.

It is not understood that the condition of the insurrection in Cuba has
materially changed since the close of the last session of Congress. In
an early stage of the contest the authorities of Spain inaugurated a
system of arbitrary arrests, of close confinement, and of military trial
and execution of persons suspected of complicity with the insurgents,
and of summary embargo of their properties, and sequestration of their
revenues by executive warrant. Such proceedings, so far as they affected
the persons or property of citizens of the United States, were in
violation of the provisions of the treaty of 1795 between the United
States and Spain.

Representations of injuries resulting to several persons claiming to be
citizens of the United States by reason of such violations were made to
the Spanish Government. From April, 1869, to June last the Spanish
minister at Washington had been clothed with a limited power to aid in
redressing such wrongs. That power was found to be withdrawn, "in view,"
as it was said, "of the favorable situation in which the island of Cuba"
then "was," which, however, did not lead to a revocation or suspension
of the extraordinary and arbitrary functions exercised by the executive
power in Cuba, and we were obliged to make our complaints at Madrid. In
the negotiations thus opened, and still pending there, the United States
only claimed that for the future the rights secured to their citizens by
treaty should be respected in Cuba, and that as to the past a joint
tribunal should be established in the United States with full
jurisdiction over all such claims. Before such an impartial tribunal
each claimant would be required to prove his case. On the other hand,
Spain would be at liberty to traverse every material fact, and thus
complete equity would be done. A case which at one time threatened
seriously to affect the relations between the United States and Spain
has already been disposed of in this way. The claim of the owners of the
Colonel Lloyd Aspinwall for the illegal seizure and detention of that
vessel was referred to arbitration by mutual consent, and has resulted
in an award to the United States, for the owners, of the sum of
$19,702.50 in gold. Another and long-pending claim of like nature, that
of the whaleship Canada, has been disposed of by friendly arbitrament
during the present year. It was referred, by the joint consent of Brazil
and the United States, to the decision of Sir Edward Thornton, Her
Britannic Majesty's minister at Washington, who kindly undertook the
laborious task of examining the voluminous mass of correspondence and
testimony submitted by the two Governments, and awarded to the United
States the sum of $100,740.09 in gold, which has since been paid by the
Imperial Government. These recent examples show that the mode which the
United States have proposed to Spain for adjusting the pending claims is
just and feasible, and that it may be agreed to by either nation without
dishonor. It is to be hoped that this moderate demand may be acceded to
by Spain without further delay. Should the pending negotiations,
unfortunately and unexpectedly, be without result, it will then become
my duty to communicate that fact to Congress and invite its action on
the subject.

The long-deferred peace conference between Spain and the allied South
American Republics has been inaugurated in Washington under the auspices
of the United States. Pursuant to the recommendation contained in the
resolution of the House of Representatives of the 17th of December,
1866, the executive department of the Government offered its friendly
offices for the promotion of peace and harmony between Spain and the
allied Republics. Hesitations and obstacles occurred to the acceptance
of the offer. Ultimately, however, a conference was arranged, and was
opened in this city on the 29th of October last, at which I authorized
the Secretary of State to preside. It was attended by the ministers of
Spain, Peru, Chile, and Ecuador. In consequence of the absence of a
representative from Bolivia, the conference was adjourned until the
attendance of a plenipotentiary from that Republic could be secured or
other measures could be adopted toward compassing its objects.

The allied and other Republics of Spanish origin on this continent may
see in this fact a new proof of our sincere interest in their welfare,
of our desire to see them blessed with good governments, capable of
maintaining order and of preserving their respective territorial
integrity, and of our sincere wish to extend our own commercial and
social relations with them. The time is not probably far distant when,
in the natural course of events, the European political connection with
this continent will cease. Our policy should be shaped, in view of this
probability, so as to ally the commercial interests of the Spanish
American States more closely to our own, and thus give the United States
all the preeminence and all the advantage which Mr. Monroe, Mr. Adams,
and Mr. Clay contemplated when they proposed to join in the congress of
Panama.

During the last session of Congress a treaty for the annexation of the
Republic of San Domingo to the United States failed to receive the
requisite two-thirds vote of the Senate. I was thoroughly convinced then
that the best interests of this country, commercially and materially,
demanded its ratification. Time has only confirmed me in this view. I
now firmly believe that the moment it is known that the United States
have entirely abandoned the project of accepting as a part of its
territory the island of San Domingo a free port will be negotiated for
by European nations in the Bay of Samana. A large commercial city will
spring up, to which we will be tributary without receiving corresponding
benefits, and then will be seen the folly of our rejecting so great a
prize. The Government of San Domingo has voluntarily sought this
annexation. It is a weak power, numbering probably less than 120,000
souls, and yet possessing one of the richest territories under the sun,
capable of supporting a population of 10,000,000 people in luxury. The
people of San Domingo are not capable of maintaining themselves in their
present condition, and must look for outside support. They yearn for the
protection of our free institutions and laws, our progress and
civilization. Shall we refuse them?

The acquisition of San Domingo is desirable because of its geographical
position. It commands the entrance to the Caribbean Sea and the Isthmus
transit of commerce. It possesses the richest soil, best and most
capacious harbors, most salubrious climate, and the most valuable
products of the forests, mine, and soil of any of the West India
Islands. Its possession by us will in a few years build up a coastwise
commerce of immense magnitude, which will go far toward restoring to us
our lost merchant marine. It will give to us those articles which we
consume so largely and do not produce, thus equalizing our exports and
imports. In case of foreign war it will give us command of all the
islands referred to, and thus prevent an enemy from ever again
possessing himself of rendezvous upon our very coast. At present our
coast trade between the States bordering on the Atlantic and those
bordering on the Gulf of Mexico is cut into by the Bahamas and the
Antilies. Twice we must, as it were, pass through foreign countries to
get by sea from Georgia to the west coast of Florida.

San Domingo, with a stable government, under which her immense resources
can be developed, will give remunerative wages to tens of thousands of
laborers not now upon the island. This labor will take advantage of
every available means of transportation to abandon the adjacent islands
and seek the blessings of freedom and its sequence--each inhabitant
receiving the reward of his own labor. Porto Rico and Cuba will have to
abolish slavery, as a measure of self-preservation, to retain their
laborers.

San Domingo will become a large consumer of the products of Northern
farms and manufactories. The cheap rate at which her citizens can be
furnished with food, tools, and machinery will make it necessary that
contiguous islands should have the same advantages in order to compete
in the production of sugar, coffee, tobacco, tropical fruits, etc. This
will open to us a still wider market for our products. The production of
our own supply of these articles will cut off more than one hundred
millions of our annual imports, besides largely increasing our exports.
With such a picture it is easy to see how our large debt abroad is
ultimately to be extinguished. With a balance of trade against us
(including interest on bonds held by foreigners and money spent by our
citizens traveling in foreign lands) equal to the entire yield of the
precious metals in this country, it is not so easy to see how this
result is to be otherwise accomplished.

The acquisition of San Domingo is an adherence to the "Monroe doctrine;"
it is a measure of national protection; it is asserting our just claim
to a controlling influence over the great commercial traffic soon to
flow from west to east by way of the Isthmus of Darien; it is to build
up our merchant marine; it is to furnish new markets for the products of
our farms, shops, and manufactories; it is to make slavery insupportable
in Cuba and Porto Rico at once, and ultimately so in Brazil; it is to
settle the unhappy condition of Cuba and end an exterminating conflict;
it is to provide honest means of paying our honest debts without
overtaxing the people; it is to furnish our citizens with the
necessaries of everyday life at cheaper rates than ever before; and it
is, in fine, a rapid stride toward that greatness which the
intelligence, industry, and enterprise of the citizens of the United
States entitle this country to assume among nations.

In view of the importance of this question, I earnestly urge upon
Congress early action expressive of its views as to the best means of
acquiring San Domingo. My suggestion is that by joint resolution of the
two Houses of Congress the Executive be authorized to appoint a
commission to negotiate a treaty with the authorities of San Domingo for
the acquisition of that island, and that an appropriation be made to
defray the expenses of such a commission. The question may then be
determined, either by the action of the Senate upon the treaty or the
joint action of the two Houses of Congress upon a resolution of
annexation, as in the case of the acquisition of Texas. So convinced am
I of the advantages to flow from the acquisition of San Domingo, and of
the great disadvantages--I might almost say calamities--to flow from
nonacquisition, that I believe the subject has only to be investigated
to be approved.

It is to be regretted that our representations in regard to the
injurious effects, especially upon the revenue of the United States, of
the policy of the Mexican Government in exempting from impost duties a
large tract of its territory on our borders have not only been
fruitless, but that it is even proposed in that country to extend the
limits within which the privilege adverted to has hitherto been enjoyed.
The expediency of taking into your serious consideration proper measures
for countervailing the policy referred to will, it is presumed, engage
your earnest attention.

It is the obvious interest, especially of neighboring nations, to
provide against impunity to those who may have committed high crimes
within their borders and who may have sought refuge abroad. For this
purpose extradition treaties have been concluded with several of the
Central American Republics, and others are in progress.

The sense of Congress is desired, as early as may be convenient, upon
the proceedings of the commission on claims against Venezuela, as
communicated in my messages of March 16, 1869, March 1, 1870, and March
31, 1870. It has not been deemed advisable to distribute any of the
money which has been received from that Government until Congress shall
have acted on the subject.

The massacres of French and Russian residents at Tien-Tsin, under
circumstances of great barbarity, was supposed by some to have been
premeditated, and to indicate a purpose among the populace to
exterminate foreigners in the Chinese Empire. The evidence fails to
establish such a supposition, but shows a complicity between the local
authorities and the mob. The Government at Peking, however, seems to
have been disposed to fulfill its treaty obligations so far as it was
able to do so. Unfortunately, the news of the war between the German
States and France reached China soon after the massacre. It would appear
that the popular mind became possessed with the idea that this contest,
extending to Chinese waters, would neutralize the Christian influence
and power, and that the time was coming when the superstitious masses
might expel all foreigners and restore mandarin influence. Anticipating
trouble from this cause, I invited France and North Germany to make an
authorized suspension of hostilities in the East (where they were
temporarily suspended by act of the commanders), and to act together for
the future protection in China of the lives and properties of Americans
and Europeans.

Since the adjournment of Congress the ratifications of the treaty with
Great Britain for abolishing the mixed courts for the suppression of the
slave trade have been exchanged. It is believed that the slave trade is
now confined to the eastern coast of Africa, whence the slaves are taken
to Arabian markets.

The ratifications of the naturalization convention between Great Britain
and the United States have also been exchanged during the recess, and
thus a long-standing dispute between the two Governments has been
settled in accordance with the principles always contended for by the
United States.

In April last, while engaged in locating a military reservation near
Pembina, a corps of engineers discovered that the commonly received
boundary line between the United States and the British possessions at
that place is about 4,700 feet south of the true position of the
forty-ninth parallel, and that the line, when run on what is now
supposed to be the true position of that parallel, would leave the fort
of the Hudsons Bay Company at Pembina within the territory of the United
States. This information being communicated to the British Government, I
was requested to consent, and did consent, that the British occupation
of the fort of the Hudsons Bay Company should continue for the present.
I deem it important, however, that this part of the boundary line should
be definitely fixed by a joint commission of the two Governments, and I
submit herewith estimates of the expense of such a commission on the
part of the United States and recommend that an appropriation be made
for that purpose. The land boundary has already been fixed and marked
from the summit of the Rocky Mountains to the Georgian Bay. It should
now be in like manner marked from the Lake of the Woods to the summit of
the Rocky Mountains.

I regret to say that no conclusion has been reached for the adjustment
of the claims against Great Britain growing out of the course adopted by
that Government during the rebellion. The cabinet of London, so far as
its views have been expressed, does not appear to be willing to concede
that Her Majesty's Government was guilty of any negligence, or did or
permitted any act during the war by which the United States has just
cause of complaint. Our firm and unalterable convictions are directly
the reverse. I therefore recommend to Congress to authorize the
appointment of a commission to take proof of the amount and the
ownership of these several claims, on notice to the representative of
Her Majesty at Washington, and that authority be given for the
settlement of these claims by the United States, so that the Government
shall have the ownership of the private claims, as well as the
responsible control of all the demands against Great Britain. It can not
be necessary to add that whenever Her Majesty's Government shall
entertain a desire for a full and friendly adjustment of these claims
the United States will enter upon their consideration with an earnest
desire for a conclusion consistent with the honor and dignity of both
nations.

The course pursued by the Canadian authorities toward the fishermen of
the United States during the past season has not been marked by a
friendly feeling. By the first article of the convention of 1818 between
Great Britain and the United States it was agreed that the inhabitants
of the United States should have forever, in common with British
subjects, the right of taking fish in certain waters therein defined. In
the waters not included in the limits named in the convention (within 3
miles of parts of the British coast) it has been the custom for many
years to give to intruding fishermen of the United States a reasonable
warning of their violation of the technical rights of Great Britain. The
Imperial Government is understood to have delegated the whole or a share
of its jurisdiction or control of these inshore fishing grounds to the
colonial authority known as the Dominion of Canada, and this
semi-independent but irresponsible agent has exercised its delegated
powers in an unfriendly way. Vessels have been seized without notice or
warning, in violation of the custom previously prevailing, and have been
taken into the colonial ports, their voyages broken up, and the vessels
condemned. There is reason to believe that this unfriendly and vexatious
treatment was designed to bear harshly upon the hardy fishermen of the
United States, with a view to political effect upon this Government. The
statutes of the Dominion of Canada assume a still broader and more
untenable jurisdiction over the vessels of the United States. They
authorize officers or persons to bring vessels hovering within 3 marine
miles of any of the coasts, bays, creeks, or harbors of Canada into
port, to search the cargo, to examine the master on oath touching the
cargo and voyage, and to inflict upon him a heavy pecuniary penalty if
true answers are not given; and if such a vessel is found "preparing to
fish" within 3 marine miles of any of such coasts, bays, creeks, or
harbors without a license, or after the expiration of the period named
in the last license granted to it, they provide that the vessel, with
her tackle, etc., shall be forfeited. It is not known that any
condemnations have been made under this statute. Should the authorities
of Canada attempt to enforce it, it will become my duty to take such
steps as may be necessary to protect the rights of the citizens of the
United States.

It has been claimed by Her Majesty's officers that the fishing vessels
of the United States have no right to enter the open ports of the
British possessions in North America, except for the purposes of shelter
and repairing damages, of purchasing wood and obtaining water; that they
have no right to enter at the British custom-houses or to trade there
except in the purchase of wood and water, and that they must depart
within twenty-four hours after notice to leave. It is not known that any
seizure of a fishing vessel carrying the flag of the United States has
been made under this claim. So far as the claim is founded on an alleged
construction of he convention of 1818, it can not be acquiesced in by
the United States. It is hoped that it will not be insisted on by Her
Majesty's Government.

During the conferences which preceded the negotiation of the convention
of 1818 the British commissioners proposed to expressly exclude the
fishermen of the United States from "the privilege of carrying on trade
with any of His Britannic Majesty's subjects residing within the limits
assigned for their use;" and also that it should not be "lawful for the
vessels of the United States engaged in said fishery to have on board
any goods, wares, or merchandise whatever, except such as may be
necessary for the prosecution of their voyages to and from the said
fishing grounds: and any vessel of the United States which shall
contravene this regulation may be seized, condemned, and confiscated,
with her cargo."

This proposition, which is identical with the construction now put upon
the language of the convention, was emphatically rejected by the
American commissioners, and thereupon was abandoned by the British
plenipotentiaries, and Article I, as it stands in the convention, was
substituted.

If, however, it be said that this claim is founded on provincial or
colonial statutes, and not upon the convention, this Government can not
but regard them as unfriendly, and in contravention of the spirit, if
not of the letter, of the treaty, for the faithful execution of which
the Imperial Government is alone responsible.

Anticipating that an attempt may possibly be made by the Canadian
authorities in the coming season to repeat their unneighborly acts
toward our fishermen, I recommend you to confer upon the Executive the
power to suspend by proclamation the operation of the laws authorizing
the transit of goods, wares, and merchandise in bond across the
territory of the United States to Canada, and, further, should such an
extreme measure become necessary, to suspend the operation of any laws
whereby the vessels of the Dominion of Canada are permitted to enter the
waters of the United States.

A like unfriendly disposition has been manifested on the part of Canada
in the maintenance of a claim of right to exclude the citizens of the
United States from the navigation of the St. Lawrence. This river
constitutes a natural outlet to the ocean for eight States, with an
aggregate population of about 17,600,000 inhabitants, and with an
aggregate tonnage of 661,367 tons upon the waters which discharge into
it. The foreign commerce of our ports on these waters is open to British
competition, and the major part of it is done in British bottoms.

If the American seamen be excluded from this natural avenue to the
ocean, the monopoly of the direct commerce of the lake ports with the
Atlantic would be in foreign hands, their vessels on transatlantic
voyages having an access to our lake ports which would be denied to
American vessels on similar voyages. To state such a proposition is to
refute its justice.

During the Administration of Mr. John Quincy Adams Mr. Clay unanswerably
demonstrated the natural right of the citizens of the United States to
the navigation of this river, claiming that the act of the congress of
Vienna in opening the Rhine and other rivers to all nations showed the
judgment of European jurists and statesmen that the inhabitants of a
country through which a navigable river passes have a natural right to
enjoy the navigation of that river to and into the sea, even though
passing through the territories of another power. This right does not
exclude the coequal right of the sovereign possessing the territory
through which the river debouches into the sea to make such regulations
relative to the police of the navigation as may be reasonably necessary;
but those regulations should be framed in a liberal spirit of comity,
and should not impose needless burdens upon the commerce which has the
right of transit. It has been found in practice more advantageous to
arrange these regulations by mutual agreement. The United States are
ready to make any reasonable arrangement as to the police of the St.
Lawrence which may be suggested by Great Britain.

If the claim made by Mr. Clay was just when the population of States
bordering on the shores of the Lakes was only 3,400,000, it now derives
greater force and equity from the increased population, wealth,
production, and tonnage of the States on the Canadian frontier. Since
Mr. Clay advanced his argument in behalf of our right the principle for
which he contended has been frequently, and by various nations,
recognized by law or by treaty, and has been extended to several other
great rivers. By the treaty concluded at Mayence in 1831 the Rhine was
declared free from the point where it is first navigable into the sea.
By the convention between Spain and Portugal concluded in 1835 the
navigation of the Douro throughout its whole extent was made free for
the subjects of both Crowns. In 1853 the Argentine Confederation by
treaty threw open the free navigation of the Parana and the Uruguay to
the merchant vessels of all nations. In 1856 the Crimean War was closed
by a treaty which provided for the free navigation of the Danube. In
1858 Bolivia by treaty declared that it regarded the rivers Amazon and
La Plata, in accordance with fixed principles of national law, as
highways or channels opened by nature for the commerce of all nations.
In 1859 the Paraguay was made free by treaty, and in December, 1866, the
Emperor of Brazil by imperial decree declared the Amazon to be open to
the frontier of Brazil to the merchant ships of all nations. The
greatest living British authority on this subject, while asserting the
abstract right of the British claim, says: It seems difficult to deny
that Great Britain may ground her refusal upon strict law, but it is
equally difficult to deny, first, that in so doing she exercises harshly
an extreme and hard law; secondly, that her conduct with respect to the
navigation of the St. Lawrence is in glaring and discreditable
inconsistency with her conduct with respect to the navigation of the
Mississippi. On the ground that she possessed a small domain in which
the Mississippi took its rise, she insisted on the right to navigate the
entire volume of its waters. On the ground that she possesses both banks
of the St. Lawrence, where it disembogues itself into the sea, she
denies to the United States the right of navigation, though about
one-half of the waters of Lakes Ontario. Erie, Huron, and Superior, and
the whole of Lake Michigan, through which the river flows, are the
property of the United States. The whole nation is interested in
securing cheap transportation from the agricultural States of the West
to the Atlantic Seaboard. To the citizens of those States it secures a
greater return for their labor; to the inhabitants of the seaboard it
affords cheaper food; to the nation, an increase in the annual surplus
of wealth. It is hoped that the Government of Great Britain will see the
justice of abandoning the narrow and inconsistent claim to which her
Canadian Provinces have urged her adherence.

Our depressed commerce is a subject to which I called your special
attention at the last session, and suggested that we will in the future
have to look more to the countries south of us, and to China and Japan,
for its revival. Our representatives to all these Governments have
exerted their influence to encourage trade between the United States and
the countries to which they are accredited. But the fact exists that the
carrying is done almost entirely in foreign bottoms, and while this
state of affairs exists we can not control our due share of the commerce
of the world; that between the Pacific States and China and Japan is
about all the carrying trade now conducted in American vessels. I would
recommend a liberal policy toward that line of American steamers--one
that will insure its success, and even increased usefulness.

The cost of building iron vessels, the only ones that can compete with
foreign ships in the carrying trade, is so much greater in the United
States than in foreign countries that without some assistance from the
Government they can not be successfully built here. There will be
several propositions laid before Congress in the course of the present
session looking to a remedy for this evil. Even if it should be at some
cost to the National Treasury, I hope such encouragement will be given
as will secure American shipping on the high seas and American
shipbuilding at home.

The condition of the archives at the Department of State calls for the
early action of Congress. The building now rented by that Department is
a frail structure, at an inconvenient distance from the Executive
Mansion and from the other Departments, is ill adapted to the purpose
for which it is used, has not capacity to accommodate the archives, and
is not fireproof. Its remote situation, its slender construction, and
the absence of a supply of water in the neighborhood leave but little
hope of safety for either the building or its contents in case of the
accident of a fire. Its destruction would involve the loss of the rolls
containing the original acts and resolutions of Congress, of the
historic records of the Revolution and of the Confederation, of the
whole series of diplomatic and consular archives since the adoption of
the Constitution, and of the many other valuable records and papers left
with that Department when it was the principal depository of the
governmental archives. I recommend an appropriation for the construction
of a building for the Department of State.

I recommend to your consideration the propriety of transferring to the
Department of the Interior, to which they seem more appropriately to
belong, all powers and duties in relation to the Territories with which
the Department of State is now charged by law or usage; and from the
Interior Department to the War Department the Pension Bureau, so far as
it regulates the payment of soldiers' pensions. I would further
recommend that the payment of naval pensions be transferred to one of
the bureaus of the Navy Department.

The estimates for the expenses of the Government for the next fiscal
year are $18,244,346.01 less than for the current one, but exceed the
appropriations for the present year for the same items $8,972,127.56. In
this estimate, however, is included $22,338,278.37 for public works
heretofore begun under Congressional provision, and of which only so
much is asked as Congress may choose to give. The appropriation for the
same works for the present fiscal year was $11,984,518.08.

The average value of gold, as compared with national currency, for the
whole of the year 1869 was about 134, and for eleven months of 1870 the
same relative value has been about 115. The approach to a specie basis
is very gratifying, but the fact can not be denied that the instability
of the value of our currency is prejudicial to our prosperity, and tends
to keep up prices, to the detriment of trade. The evils of a depreciated
and fluctuating currency are so great that now, when the premium on gold
has fallen so much, it would seem that the time has arrived when by wise
and prudent legislation Congress should look to a policy which would
place our currency at par with gold at no distant day.

The tax collected from the people has been reduced more than $80,000,000
per annum. By steadiness in our present course there is no reason why in
a few short years the national tax gatherer may not disappear from the
door of the citizen almost entirely. With the revenue stamp dispensed by
postmasters in every community, a tax upon liquors of all sorts and
tobacco in all its forms, and by a wise adjustment of the tariff, which
will put a duty only upon those articles which we could dispense with,
known as luxuries, and on those which we use more of than we produce,
revenue enough may be raised after a few years of peace and consequent
reduction of indebtedness to fulfill all our obligations. A further
reduction of expenses, in addition to a reduction of interest account,
may be relied on to make this practicable. Revenue reform, if it means
this, has my hearty support. If it implies a collection of all the
revenue for the support of the Government, for the payment of principal
and interest of the public debt, pensions, etc., by directly taxing the
people, then I am against revenue reform, and confidently believe the
people are with me. If it means failure to provide the necessary means
to defray all the expenses of Government, and thereby repudiation of the
public debt and pensions, then I am still more opposed to such kind of
revenue reform. Revenue reform has not been defined by any of its
advocates to my knowledge, but seems to be accepted as something which
is to supply every man's wants without any cost or effort on his part.

A true revenue reform can not be made in a day, but must be the work of
national legislation and of time. As soon as the revenue can be
dispensed with, all duty should be removed from coffee, tea and other
articles of universal use not produced by ourselves. The necessities of
the country compel us to collect revenue from our imports. An army of
assessors and collectors is not a pleasant sight to the citizen, but
that of a tariff for revenue is necessary. Such a tariff, so far as it
acts as an encouragement to home production, affords employment to labor
at living wages, in contrast to the pauper labor of the Old World, and
also in the development of home resources.

Under the act of Congress of the 15th day of July, 1870, the Army has
gradually been reduced, so that on the 1st day of January, 1871, the
number of commissioned officers and men will not exceed the number
contemplated by that law.

The War Department building is an old structure, not fireproof, and
entirely inadequate in dimensions to our present wants. Many thousands
of dollars are now paid annually for rent of private buildings to
accommodate the various bureaus of the Department. I recommend an
appropriation for a new War Department building, suited to the present
and growing wants of the nation.

The report of the Secretary of War shows a very satisfactory reduction
in the expenses of the Army for the last fiscal year. For details you
are referred to his accompanying report.

The expenses of the Navy for the whole of the last year--i.e., from
December 1, 1869, the date of the last report--are less than
$19,000,000, or about $1,000,000 less than they were the previous year.
The expenses since the commencement of this fiscal year--i.e., since
July 1--show for the five months a decrease of over $2,400,000 from
those of the corresponding months last year. The estimates for the
current year were $28,205,671.37. Those for next year are $20,683,317,
with $955,100 additional for necessary permanent improvements. These
estimates are made closely for the mere maintenance of the naval
establishment as now is, without much in the nature of permanent
improvement. The appropriations made for the last and current years were
evidently intended by Congress, and are sufficient only, to keep the
Navy on its present footing by the repairing and refitting of our old
ships.

This policy must, of course, gradually but surely destroy the Navy, and
it is in itself far from economical, as each year that it is pursued the
necessity for mere repairs in ships and navy-yards becomes more
imperative and more costly, and our current expenses are annually
increased for the mere repair of ships, many of which must soon become
unsafe and useless. I hope during the present session of Congress to be
able to submit to it a plan by which naval vessels can be built and
repairs made with great saving upon the present cost.

It can hardly be wise statesmanship in a Government which represents a
country with over 5,000 miles of coast line on both oceans, exclusive of
Alaska, and containing 40,000,000 progressive people, with relations of
every nature with almost every foreign country, to rest with such
inadequate means of enforcing any foreign policy, either of protection
or redress. Separated by the ocean from the nations of the Eastern
Continent, our Navy is our only means of direct protection to our
citizens abroad or for the enforcement of any foreign policy.

The accompanying report of the Postmaster-General shows a most
satisfactory working of that Department. With the adoption of the
recommendations contained therein, particularly those relating to a
reform in the franking privilege and the adoption of the "correspondence
cards," a self-sustaining postal system may speedily be looked for, and
at no distant day a further reduction of the rate of postage be
attained.

I recommend authorization by Congress to the Postmaster-General and
Attorney-General to issue all commissions to officials appointed through
their respective Departments. At present these commissions, where
appointments are Presidential, are issued by the State Department. The
law in all the Departments of Government, except those of the
Post-Office and of Justice, authorizes each to issue its own
commissions.

Always favoring practical reforms, I respectfully call your attention to
one abuse of long standing which I would like to see remedied by this
Congress. It is a reform in the civil service of the country. I would
have it go beyond the mere fixing of the tenure of office of clerks and
employees who do not require "the advice and consent of the Senate" to
make their appointments complete. I would have it govern, not the
tenure, but the manner of making all appointments. There is no duty
which so much embarrasses the Executive and heads of Departments as that
of appointments, nor is there any such arduous and thankless labor
imposed on Senators and Representatives as that of finding places for
constituents. The present system does not secure the best men, and often
not even fit men, for public place. The elevation and purification of
the civil service of the Government will be hailed with approval by the
whole people of the United States.

Reform in the management of Indian affairs has received the special
attention of the Administration from its inauguration to the present
day. The experiment of making it a missionary work was tried with a few
agencies given to the denomination of Friends, and has been found to
work most advantageously. All agencies and superintendencies not so
disposed of were given to officers of the Army. The act of Congress
reducing the Army renders army officers ineligible for civil positions.
Indian agencies being civil offices, I determined to give all the
agencies to such religious denominations as had heretofore established
missionaries among the Indians, and perhaps to some other denominations
who would undertake the work on the same terms--i.e., as a missionary
work. The societies selected are allowed to name their own agents,
subject to the approval of the Executive, and are expected to watch over
them and aid them as missionaries, to Christianize and civilize the
Indian, and to train him in the arts of peace. The Government watches
over the official acts of these agents, and requires of them as strict
an accountability as if they were appointed in any other manner. I
entertain the confident hope that the policy now pursued will in a few
years bring all the Indians upon reservations, where they will live in
houses, and have schoolhouses and churches, and will be pursuing
peaceful and self-sustaining avocations, and where they may be visited
by the law-abiding white man with the same impunity that he now visits
the civilized white settlements. I call your special attention to the
report of the Commissioner of Indian Affairs for full information on
this subject.

During the last fiscal year 8,095,413 acres of public land were disposed
of. Of this quantity 3,698,910.05 acres were taken under the homestead
law and 2,159,515.81 acres sold for cash. The remainder was located with
military warrants, college or Indian scrip, or applied in satisfaction
of grants to railroads or for other public uses. The entries under the
homestead law during the last year covered 961,545 acres more than those
during the preceding year. Surveys have been vigorously prosecuted to
the full extent of the means applicable to the purpose. The quantity of
land in market will amply supply the present demand. The claim of the
settler under the homestead or the preemption laws is not, however,
limited to lands subject to sale at private entry. Any unappropriated
surveyed public land may, to a limited amount, be acquired under the
former laws if the party entitled to enter under them will comply with
the requirements they prescribe in regard to the residence and
cultivation. The actual settler's preference right of purchase is even
broader, and extends to lands which were unsurveyed at the time of his
settlement. His right was formerly confined within much narrower limits,
and at one period of our history was conferred only by special statutes.
They were enacted from time to time to legalize what was then regarded
as an unauthorized intrusion upon the national domain. The opinion that
the public lands should be regarded chiefly as a source of revenue is no
longer maintained. The rapid settlement and successful cultivation of
them are now justly considered of more importance to our well-being than
is the fund which the sale of them would produce. The remarkable growth
and prosperity of our new States and Territories attest the wisdom of
the legislation which invites the tiller of the soil to secure a
permanent home on terms within the reach of all. The pioneer who incurs
the dangers and privations of a frontier life, and thus aids in laying
the foundation of new commonwealths, renders a signal service to his
country, and is entitled to its special favor and protection. These laws
secure that object and largely promote the general welfare. They should
therefore be cherished as a permanent feature of our land system.

Good faith requires us to give full effect to existing grants. The
time-honored and beneficent policy of setting apart certain sections of
public land for educational purposes in the new States should be
continued. When ample provision shall have been made for these objects,
I submit as a question worthy of serious consideration whether the
residue of our national domain should not be wholly disposed of under
the provisions the homestead and preemption laws.

In addition to the swamp and overflowed lands granted to the States in
which they are situated, the lands taken under the agricultural-college
acts and for internal-improvement purposes under the act of September,
1841, and the acts supplemental thereto, there had been conveyed up to
the close of the last fiscal year, by patent or other equivalent title,
to States and corporations 27,836,257.63 acres for railways, canals, and
wagon roads. It is estimated that an additional quantity of 174,735,523
acres is still due under grants for like uses. The policy of thus aiding
the States in building works of internal improvement was inaugurated
more than forty years since in the grants to Indiana and Illinois, to
aid those States in opening canals to connect the waters of the Wabash
with those of Lake Erie and the waters of the Illinois with those of
Lake Michigan. It was followed, with some modifications, in the grant to
Illinois of alternate sections of public land within certain limits of
the Illinois Central Railway. Fourteen States and sundry corporations
have received similar subsidies in connection with railways completed or
in process of construction. As the reserved sections are rated at the
double minimum, the sale of them at the enhanced price has thus in many
instances indemnified the Treasury for the granted lands. The
construction of some of these thoroughfares has undoubtedly given a
vigorous impulse to the development of our resources and the settlement
of the more distant portions of the country. It may, however, be well
insisted that much of our legislation in this regard has been
characterized by indiscriminate and profuse liberality. The United
States should not loan their credit in aid of any enterprise undertaken
by States or corporations, nor grant lands in any instance, unless the
projected work is of acknowledged national importance. I am strongly
inclined to the opinion that it is inexpedient and unnecessary to bestow
subsidies of either description; but should Congress determine otherwise
I earnestly recommend that the right of settlers and of the public be
more effectually secured and protected by appropriate legislation.

During the year ending September 30, 1870, there were filed in the
Patent Office 19,411 applications for patents, 3,374 caveats, and 160
applications for the extension of patents. Thirteen thousand six hundred
and twenty-two patents, including reissues and designs, were issued,
1,010 extended, and 1,089 allowed, but not issued by reason of the
nonpayment of the final fees. The receipts of the office during the year
were $136,304.29 in excess of its expenditures.

The work of the Census Bureau has been energetically prosecuted. The
preliminary report, containing much information of special value and
interest, will be ready for delivery during the present session. The
remaining volumes will be completed with all the dispatch consistent
with perfect accuracy in arranging and classifying the returns. We shall
thus at no distant day be furnished with an authentic record of our
condition and resources. It will, I doubt not, attest the growing
prosperity of the country, although during the decade which has just
closed it was so severely tried by the great war waged to maintain its
integrity and to secure and perpetuate our free institutions.

During the last fiscal year the sum paid to pensioners, including the
cost of disbursement, was $27,780,811.11, and 1,758 bounty-land warrants
were issued. At its close 198,686 names were on the pension rolls.

The labors of the Pension Office have been directed to the severe
scrutiny of the evidence submitted in favor of new claims and to the
discovery of fictitious claims which have been heretofore allowed. The
appropriation for the employment of special agents for the investigation
of frauds has been judiciously used, and the results obtained have been
of unquestionable benefit to the service.

The subjects of education and agriculture are of great interest to the
success of our republican institutions, happiness, and grandeur as a
nation. In the interest of one a bureau has been established in the
Interior Department--the Bureau of Education; and in the interest of the
other, a separate Department, that of Agriculture. I believe great
general good is to flow from the operations of both these Bureaus if
properly fostered. I can not commend to your careful consideration too
highly the reports of the Commissioners of Education and of Agriculture,
nor urge too strongly such liberal legislation as to secure their
efficiency.

In conclusion I would sum up the policy of the Administration to be a
thorough enforcement of every law; a faithful collection of every tax
provided for; economy in the disbursement of the same; a prompt payment
of every debt of the nation; a reduction of taxes as rapidly as the
requirements of the country will admit; reductions of taxation and
tariff, to be so arranged as to afford the greatest relief to the
greatest number; honest and fair dealings with all other peoples, to the
end that war, with all its blighting consequences, may be avoided, but
without surrendering any right or obligation due to us; a reform in the
treatment of Indians and in the whole civil service of the country; and,
finally, in securing a pure, untrammeled ballot, where every man
entitled to cast a vote may do so, just once at each election, without
fear of molestation or proscription on account of his political faith,
nativity, of color.

U. S. GRANT

***

State of the Union Address
Ulysses S. Grant
December 4, 1871

To the Senate and House of Representatives:

In addressing my third annual message to the law-making branch of the
Government it is gratifying to be able to state that during the past
year success has generally attended the effort to execute all laws found
upon the statute books. The policy has been not to inquire into the
wisdom of laws already enacted, but to learn their spirit and intent and
to enforce them accordingly.

The past year has, under a wise Providence, been one of general
prosperity to the nation. It has, however, been attended with more than
usual chastisements in the loss of life and property by storm and fire.
These disasters have served to call forth the best elements of human
nature in our country and to develop a friendship for us on the part of
foreign nations which goes far toward alleviating the distresses
occasioned by these calamities. The benevolent, who have so generously
shared their means with the victims of these misfortunes, will reap
their reward in the consciousness of having performed a noble act and in
receiving the grateful thanks of men, women, and children whose
sufferings they have relieved.

The relations of the United States with foreign powers continue to be
friendly. The year has been an eventful one in witnessing two great
nations, speaking one language and having one lineage, settling by
peaceful arbitration disputes of long standing and liable at any time to
bring those nations into bloody and costly conflict. An example has thus
been set which, if successful in its final issue, may be followed by
other civilized nations, and finally be the means of returning to
productive industry millions of men now maintained to settle the
disputes of nations by the bayonet and the broadside.

I transmit herewith a copy of the treaty alluded to, which has been
concluded since the adjournment of Congress with Her Britannic Majesty,
and a copy of the protocols of the conferences of the commissioners by
whom it was negotiated. This treaty provides methods for adjusting the
questions pending between the two nations.

Various questions are to be adjusted by arbitration. I recommend
Congress at an early day to make the necessary provision for the
tribunal at Geneva and for the several commissioners on the part of the
United States called for by the treaty.

His Majesty the King of Italy, the President of the Swiss Confederation,
and His Majesty the Emperor of Brazil have each consented, on the joint
request of the two powers, to name an arbiter for the tribunal at
Geneva. I have caused my thanks to be suitably expressed for the
readiness with which the joint request has been complied with, by the
appointment of gentlemen of eminence and learning to these important
positions.

His Majesty the Emperor of Germany has been pleased to comply with the
joint request of the two Governments, and has consented to act as the
arbitrator of the disputed water boundary between the United States and
Great Britain.

The contracting parties in the treaty have undertaken to regard as
between themselves certain principles of public law, for which the
United States have contended from the commencement of their history.
They have also agreed to bring those principles to the knowledge of the
other maritime powers and to invite them to accede to them. Negotiations
are going on as to the form of the note by which the invitation is to be
extended to the other powers.

I recommend the legislation necessary on the part of the United States
to bring into operation the articles of the treaty relating to the
fisheries and to the other matters touching the relations of the United
States toward the British North American possessions, to become
operative so soon as the proper legislation shall be had on the part of
Great Britain and its possessions. It is much to be desired that this
legislation may become operative before the fishermen of the United
States begin to make their arrangements for the coming season.

I have addressed a communication, of which a copy is transmitted
herewith, to the governors of New York, Pennsylvania, Ohio, Indiana,
Michigan, Illinois, and Wisconsin, urging upon the governments of those
States, respectively, the necessary action on their part to carry into
effect the object of the article of the treaty which contemplates the
use of the canals, on either side, connected with the navigation of the
lakes and rivers forming the boundary, on terms of equality, by the
inhabitants of both countries. It is hoped that the importance of the
object and the benefits to flow therefrom will secure the speedy
approval and legislative sanction of the States concerned.

I renew the recommendation for an appropriation for determining the true
position of the forty-ninth parallel of latitude where it forms the
boundary between the United States and the British North American
possessions, between the Lake of the Woods and the summit of the Rocky
Mountains. The early action of Congress on this recommendation would put
it in the power of the War Department to place a force in the field
during the next summer.

The resumption of diplomatic relations between France and Germany has
enabled me to give directions for the withdrawal of the protection
extended to Germans in France by the diplomatic and consular
representatives of the United States in that country. It is just to add
that the delicate duty of this protection has been performed by the
minister and the consul-general at Paris, and the various consuls in
France under the supervision of the latter, with great kindness as well
as with prudence and tact. Their course has received the commendation of
the German Government, and has wounded no susceptibility of the French.

The Government of the Emperor of Germany continues to manifest a
friendly feeling toward the United States, and a desire to harmonize
with the moderate and just policy which this Government maintains in its
relations with Asiatic powers, as well as with the South American
Republics. I have given assurances that the friendly feelings of that
Government are fully shared by the United States.

The ratifications of the consular and naturalization conventions with
the Austro-Hungarian Empire have been exchanged.

I have been officially informed of the annexation of the States of the
Church to the Kingdom of Italy, and the removal of the capital of that
Kingdom to Rome. In conformity with the established policy of the United
States, I have recognized this change. The ratifications of the new
treaty of commerce between the United States and Italy have been
exchanged. The two powers have agreed in this treaty that private
property at sea shall be exempt from capture in case of war between the
two powers. The United States have spared no opportunity of
incorporating this rule into the obligation of nations.

The Forty-first Congress, at its third session, made an appropriation
for the organization of a mixed commission for adjudicating upon the
claims of citizens of the United States against Spain growing out of the
insurrection in Cuba. That commission has since been organized. I
transmit herewith the correspondence relating to its formation and its
jurisdiction. It is to be hoped that this commission will afford the
claimants a complete remedy for their injuries.

It has been made the agreeable duty of the United States to preside over
a conference at Washington between the plenipotentiaries of Spain and
the allied South American Republics, which has resulted in an armistice,
with the reasonable assurance of a permanent peace.

The intimate friendly relations which have so long existed between the
United States and Russia continue undisturbed. The visit of the third
son of the Emperor is a proof that there is no desire on the part of his
Government to diminish the cordiality of those relations. The hospitable
reception which has been given to the Grand Duke is a proof that on our
side we share the wishes of that Government. The inexcusable course of
the Russian minister at Washington rendered it necessary to ask his
recall and to decline to longer receive that functionary as a diplomatic
representative. It was impossible, with self-respect or with a just
regard to the dignity of the country, to permit Mr. Catacazy to continue
to hold intercourse with this Government after his personal abuse of
Government officials, and during his persistent interferences, through
various means, with the relations between the United States and other
powers. In accordance with my wishes, this Government has been relieved
of further intercourse with Mr. Catacazy, and the management of the
affairs of the imperial legation has passed into the hands of a
gentleman entirely unobjectionable.

With Japan we continue to maintain intimate relations. The cabinet of
the Mikado has since the close of the last session of Congress selected
citizens of the United States to serve in offices of importance in
several departments of Government. I have reason to think that this
selection is due to an appreciation of the disinterestedness of the
policy which the United States have pursued toward Japan. It is our
desire to continue to maintain this disinterested and just policy with
China as well as Japan. The correspondence transmitted herewith shows
that there is no disposition on the part of this Government to swerve
from its established course.

Prompted by a desire to put an end to the barbarous treatment of our
shipwrecked sailors on the Korean coast, I instructed our minister at
Peking to endeavor to conclude a convention with Korea for securing the
safety and humane treatment of such mariners.

Admiral Rodgers was instructed to accompany him with a sufficient force
to protect him in case of need.

A small surveying party sent out, on reaching the coast was
treacherously attacked at a disadvantage. Ample opportunity was given
for explanation and apology for the insult. Neither came. A force was
then landed. After an arduous march over a rugged and difficult country,
the forts from which the outrages had been committed were reduced by a
gallant assault and were destroyed. Having thus punished the criminals,
and having vindicated the honor of the flag, the expedition returned,
finding it impracticable under the circumstances to conclude the desired
convention. I respectfully refer to the correspondence relating thereto,
herewith submitted, and leave the subject for such action as Congress
may see fit to take.

The Republic of Mexico has not yet repealed the very objectionable laws
establishing what is known as the "free zone" on the frontier of the
United States. It is hoped that this may yet be done, and also that more
stringent measures may be taken by that Republic for restraining lawless
persons on its frontiers. I hope that Mexico by its own action will soon
relieve this Government of the difficulties experienced from these
causes.

Our relations with the various Republics of Central and South America
continue, with one exception, to be cordial and friendly.

I recommend some action by Congress regarding the overdue installments
under the award of the Venezuelan Claims Commission of 1866. The
internal dissensions of this Government present no justification for the
absence of effort to meet their solemn treaty obligations.

The ratification of an extradition treaty with Nicaragua has been
exchanged.

It is a subject for congratulation that the great Empire of Brazil has
taken the initiatory step toward the abolition of slavery. Our relations
with that Empire, always cordial, will naturally be made more so by this
act. It is not too much to hope that the Government of Brazil may
hereafter find it for its interest, as well as intrinsically right, to
advance toward entire emancipation more rapidly than the present act
contemplates.

The true prosperity and greatness of a nation is to be found in the
elevation and education of its laborers.

It is a subject for regret that the reforms in this direction which were
voluntarily promised by the statesmen of Spain have not been carried out
in its West India colonies. The laws and regulations for the apparent
abolition of slavery in Cuba and Porto Rico leave most of the laborers
in bondage, with no hope of release until their lives become a burden to
their employers.

I desire to direct your attention to the fact that citizens of the
United States, or persons claiming to be citizens of the United States,
are large holders in foreign lands of this species of property,
forbidden by the fundamental law of their alleged country. I recommend
to Congress to provide by stringent legislation a suitable remedy
against the holding, owning or dealing in slaves, or being interested in
slave property, in foreign lands, either as owners, hirers, or
mortgagors, by citizens of the United States.

It is to be regretted that the disturbed condition of the island of Cuba
continues to be a source of annoyance and of anxiety. The existence of a
protracted struggle in such close proximity to our own territory,
without apparent prospect of an early termination, can not be other than
an object of concern to a people who, while abstaining from interference
in the affairs of other powers, naturally desire to see every country in
the undisturbed enjoyment of peace, liberty, and the blessings of free
institutions.

Our naval commanders in Cuban waters have been instructed, in case it
should become necessary, to spare no effort to protect the lives and
property of bona fide American citizens and to maintain the dignity of
the flag.

It is hoped that all pending questions with Spain growing out of the
affairs in Cuba may be adjusted in the spirit of peace and conciliation
which has hitherto guided the two powers in their treatment of such
questions.

To give importance to and to add to the efficiency of our diplomatic
relations with Japan and China, and to further aid in retaining the good
opinion of those peoples, and to secure to the United States its share
of the commerce destined to flow between those nations and the balance
of the commercial world, I earnestly recommend that an appropriation be
made to support at least four American youths in each of those
countries, to serve as a part of the official family of our ministers
there. Our representatives would not even then be placed upon an
equality with the representatives of Great Britain and of some other
powers. As now situated, our representatives in Japan and China have to
depend for interpreters and translators upon natives of those countries
who know our language imperfectly, or procure for the occasion the
services of employees in foreign business houses or the interpreters to
other foreign ministers.

I would also recommend liberal measures for the purpose of supporting
the American lines of steamers now plying between San Francisco and
Japan and China, and the Australian line--almost our only remaining
lines of ocean steamers--and of increasing their services.

The national debt has been reduced to the extent of $86,057, 126.80
during the year, and by the negotiation of national bonds at a lower
rate of interest the interest on the public debt has been so far
diminished that now the sum to be raised for the interest account is
nearly $17,000,000 less than on the 1st of March, 1869. It was highly
desirable that this rapid diminution should take place, both to
strengthen the credit of the country and to convince its citizens of
their entire ability to meet every dollar of liability without
bankrupting them. But in view of the accomplishment of these desirable
ends: of the rapid development of the resources of the country; its
increasing ability to meet large demands, and the amount already paid,
it is not desirable that the present resources of the country should
continue to be taxed in order to continue this rapid payment. I
therefore recommend a modification of both the tariff and internal-tax
law. I recommend that all taxes from internal sources be abolished,
except those collected from spirituous, vinous, and malt liquors,
tobacco in its various forms, and from stamps.

In readjusting the tariff I suggest that a careful estimate be made of
the amount of surplus revenue collected under the present laws, after
providing for the current expenses of the Government, the interest
count, and a sinking fund, and that this surplus be reduced in such a
manner as to afford the greatest relief to the greatest number. There
are many articles not produced at home, but which enter largely into
general consumption through articles which are manufactured at home,
such as medicines compounded, etc., etc., from which very little revenue
is derived, but which enter into general use. All such articles I
recommend to be placed on the "free list." Should a further reduction
prove advisable, I would then recommend that it be made upon those
articles which can best bear it without disturbing home production or
reducing the wages of American labor.

I have not entered into figures, because to do so would be to repeat
what will be laid before you in the report of the Secretary of the
Treasury. The present laws for collecting revenue pay collectors of
customs small salaries, but provide for moieties (shares in all
seizures), which, at principal ports of entry particularly, raise the
compensation of those officials to a large sum. It has always seemed to
me as if this system must at times work perniciously. It holds out an
inducement to dishonest men, should such get possession of those
offices, to be lax in their scrutiny of goods entered, to enable them
finally to make large seizures. Your attention is respectfully invited
to this subject.

Continued fluctuations in the value of gold, as compared with the
national currency, has a most damaging effect upon the increase and
development of the country, in keeping up prices of all articles
necessary in everyday life. It fosters a spirit of gambling, prejudicial
alike to national morals and the national finances. If the question can
be met as to how to get a fixed value to our currency, that value
constantly and uniformly approaching par with specie, a very desirable
object will be gained.

For the operations of the Army in the past year, the expense of
maintaining it, the estimate for the ensuing year, and for continuing
seacoast and other improvements conducted under the supervision of the
War Department, I refer you to the accompanying report of the Secretary
of War.

I call your attention to the provisions of the act of Congress approved
March 3, 1869, which discontinues promotions in the staff corps of the
Army until provided for by law. I recommend that the number of officers
in each grade in the staff corps be fixed, and that whenever the number
in any one grade falls below the number so fixed, that the vacancy may
be filled by promotion from the grade below. I also recommend that when
the office of chief of a corps becomes vacant the place may be filled by
selection from the corps in which the vacancy exists.

The report of the Secretary of the Navy shows an improvement in the
number and efficiency of the naval force, without material increase in
the expense of supporting it. This is due to the policy which has been
adopted, and is being extended as fast as our material will admit, of
using smaller vessels as cruisers on the several stations. By this means
we have been enabled to occupy at once a larger extent of cruising
grounds, to visit more frequently the ports where the presence of our
flag is desirable, and generally to discharge more efficiently the
appropriate duties of the Navy in time of peace, without exceeding the
number of men or the expenditure authorized by law.

During the past year the Navy has, in addition to its regular service,
supplied the men and officers for the vessels of the Coast Survey, and
has completed the surveys authorized by Congress of the isthmuses of
Darien and Tehuantepec, and, under like authority, has sent out an
expedition, completely furnished and equipped, to explore the unknown
ocean of the north.

The suggestions of the report as to the necessity for increasing and
improving the materiel of the Navy, and the plan recommended for
reducing the personnel of the service to a peace standard, by the
gradual abolition of certain grades of officers, the reduction of
others, and the employment of some in the service of the commercial
marine, are well considered and deserve the thoughtful attention of
Congress.

I also recommend that all promotions in the Navy above the rank of
captain be by selection instead of by seniority. This course will secure
in the higher grades greater efficiency and hold out an incentive to
young officers to improve themselves in the knowledge of their
profession.

The present cost of maintaining the Navy, its cost compared with that of
the preceding year, and the estimates for the ensuing year are contained
in the accompanying report of the Secretary of the Navy.

The enlarged receipts of the Post-Office Department, as shown by the
accompanying report of the Postmaster-General, exhibit a gratifying
increase in that branch of the public service. It is the index of the
growth of education and of the prosperity of the people, two elements
highly conducive to the vigor and stability of republics. With a vast
territory like ours, much of it sparsely populated, but all requiring
the services of the mail, it is not at present to be expected that this
Department can be made self-sustaining. But a gradual approach to this
end from year to year is confidently relied on, and the day is not far
distant when the Post-Office Department of the Government will prove a
much greater blessing to the whole people than it is now.

The suggestions of the Postmaster-General for improvements in the
Department presided over by him are earnestly recommended to you,
special attention. Especially do I recommend favorable consideration of
the plan for uniting the telegraphic system of the United States with
the postal system. It is believed that by such a course the cost of
telegraphing could be much reduced, and the service as well, if not
better, rendered. It would secure the further advantage of extending the
telegraph through portions of the country where private enterprise will
not construct it. Commerce, trade, and, above all, the efforts to bring
a people widely separated into a community of interest are always
benefited by a rapid intercommunication. Education, the groundwork of
republican institutions, is encouraged by increasing the facilities to
gather speedy news from all parts of the country. The desire to reap the
benefit of such improvements will stimulate education. I refer you to
the report of the Postmaster-General for full details of the operations
of last year and for comparative statements of results with former
years.

There has been imposed upon the executive branch of the Government the
execution of the act of Congress approved April 20, 1871, and commonly
known as the Kuklux law, in a portion of the State of South Carolina.
The necessity of the course pursued will be demonstrated by the report
of the Committee to Investigate Southern Outrages. Under the provisions
of the above act I issued a proclamation calling the attention of the
people of the United States to the same, and declaring my reluctance to
exercise any of the extraordinary powers thereby conferred upon me,
except in case of imperative necessity, but making known my purpose to
exercise such powers whenever it should become necessary to do so for
the purpose of securing to all citizens of the United States the
peaceful enjoyment of the rights guaranteed to them by the Constitution
and the laws.

After the passage of this law information was received from time to time
that combinations of the character referred to in this law existed and
were powerful in many parts of the Southern States, particularly in
certain counties in the State of South Carolina.

Careful investigation was made, and it was ascertained that in nine
counties of that State such combinations were active and powerful,
embracing a sufficient portion of the citizens to control the local
authority, and having, among other things, the object of depriving the
emancipated class of the substantial benefits of freedom and of
preventing the free political action of those citizens who did not
sympathize with their own views. Among their operations were frequent
scourgings and occasional assassinations, generally perpetrated at night
by disguised persons, the victims in almost all cases being citizens of
different political sentiments from their own or freed persons who had
shown a disposition to claim equal rights with other citizens. Thousands
of inoffensive and well disposed citizens were the sufferers by this
lawless violence,

Thereupon, on the 12th of October, 1871, a proclamation was issued, in
terms of the law, calling upon the members of those combinations to
disperse within five days and to deliver to the marshal or military
officers of the United States all arms, ammunition, uniforms, disguises,
and other means and implements used by them for carrying out their
unlawful purposes.

This warning not having been heeded, on the 17th of October another
proclamation was issued, suspending the privileges of the writ of habeas
corpus in nine counties in that State.

Direction was given that within the counties so designated persons
supposed, upon creditable information, to be members of such unlawful
combinations should be arrested by the military forces of the United
States and delivered to the marshal, to be dealt with according to law.
In two of said counties, York and Spartanburg, many arrests have been
made. At the last account the number of persons thus arrested was 168.
Several hundred, whose criminality was ascertained to be of an inferior
degree, were released for the present. These have generally made
confessions of their guilt.

Great caution has been exercised in making these arrests, and,
notwithstanding the large number, it is believed that no innocent person
is now in custody. The prisoners will be held for regular trial in the
judicial tribunals of the United States.

As soon as it appeared that the authorities of the United States were
about to take vigorous measures to enforce the law, many persons
absconded, and there is good ground for supposing that all of such
persons have violated the law. A full report of what has been done under
this law will be submitted to Congress by the Attorney-General.

In Utah there still remains a remnant of barbarism, repugnant to
civilization, to decency, and to the laws of the United States.
Territorial officers, however, have been found who are willing to
perform their duty in a spirit of equity and with a due sense of the
necessity of sustaining the majesty of the law. Neither polygamy nor any
other violation of existing statutes will be permitted within the
territory of the United States. It is not with the religion of the
self-styled Saints that we are now dealing, but with their practices.
They will be protected in the worship of God according to the dictates
of their consciences, but they will not be permitted to violate the laws
under the cloak of religion.

It may be advisable for Congress to consider what, in the execution of
the laws against polygamy, is to be the status of plural wives and their
offspring. The propriety of Congress passing an enabling act authorizing
the Territorial legislature of Utah to legitimize all children born
prior to a time fixed in the act might be justified by its humanity to
these innocent children. This is a suggestion only, and not a
recommendation.

The policy pursued toward the Indians has resulted favorably, so far as
can be judged from the limited time during which it has been in
operation. Through the exertions of the various societies of Christians
to whom has been intrusted the execution of the policy, and the board of
commissioners authorized by the law of April 10, 1869, many tribes of
Indians have been induced to settle upon reservations, to cultivate the
soil, to perform productive labor of various kinds, and to partially
accept civilization. They are being cared for in such a way, it is
hoped, as to induce those still pursuing their old habits of life to
embrace the only opportunity which is left them to avoid extermination.

I recommend liberal appropriations to carry out the Indian peace policy,
not only because it is humane, Christian like, and economical, but
because it is right.

I recommend to your favorable consideration also the policy of granting
a Territorial government to the Indians in the Indian Territory west of
Arkansas and Missouri and south of Kansas. In doing so every right
guaranteed to the Indian by treaty should be secured. Such a course
might in time be the means of collecting most of the Indians now between
the Missouri and the Pacific and south of the British possessions into
one Territory or one State. The Secretary of the Interior has treated
upon this subject at length, and I commend to you his suggestions.

I renew my recommendation that the public lands be regarded as a
heritage to our children, to be disposed of only as required for
occupation and to actual settlers. Those already granted have been in
great part disposed of in such a way as to secure access to the balance
by the hardy settler who may wish to avail himself of them, but caution
should be exercised even in attaining so desirable an object.

Educational interest may well be served by the grant of the proceeds of
the sale of public lands to settlers. I do not wish to be understood as
recommending in the least degree a curtailment of what is being done by
the General Government for the encouragement of education.

The report of the Secretary of the Interior submitted with this will
give you all the information collected and prepared for publication in
regard to the census taken during the year 1870; the operations of the
Bureau of Education for the year; the Patent Office; the Pension Office;
the Land Office, and the Indian Bureau.

The report of the Commissioner of Agriculture gives the operations of
his Department for the year. As agriculture is the groundwork of our
prosperity, too much importance can not be attached to the labors of
this Department. It is in the hands of an able head, with able
assistants, all zealously devoted to introducing into the agricultural
productions of the nation all useful products adapted to any of the
various climates and soils of our vast territory, and to giving all
useful information as to the method of cultivation, the plants, cereals,
and other products adapted to particular localities. Quietly but surely
the Agricultural Bureau is working a great national good, and if
liberally supported the more widely its influence will be extended and
the less dependent we shall be upon the products of foreign countries.

The subject of compensation to the heads of bureaus and officials
holding positions of responsibility, and requiring ability and character
to fill properly, is one to which your attention is invited. But few of
the officials receive a compensation equal to the respectable support of
a family, while their duties are such as to involve millions of
interest. In private life services demand compensation equal to the
services rendered; a wise economy would dictate the same rule in the
Government service.

I have not given the estimates for the support of Government for the
ensuing year, nor the comparative statement between the expenditures for
the year just passed and the one just preceding, because all these
figures are contained in the accompanying reports or in those presented
directly to Congress. These estimates have my approval.

More than six years having elapsed since the last hostile gun was fired
between the armies then arrayed against each other--one for the
perpetuation, the other for the destruction, of the Union--it may well
be considered whether it is not now time that the disabilities imposed
by the fourteenth amendment should be removed. That amendment does not
exclude the ballot, but only imposes the disability to hold offices upon
certain classes. When the purity of the ballot is secure, majorities are
sure to elect officers reflecting the views of the majority. I do not
see the advantage or propriety of excluding men from office merely
because they were before the rebellion of standing and character
sufficient to be elected to positions requiring them to take oaths to
support the Constitution, and admitting to eligibility those
entertaining precisely the same views, but of less standing in their
communities. It may be said that the former violated an oath, while the
latter did not; the latter did not have it in their power to do so. If
they had taken this oath, it can not be doubted they would have broken
it as did the former class. If there are any great criminals,
distinguished above all others for the part they took in opposition to
the Government, they might, in the judgment of Congress, be excluded
from such an amnesty.

This subject is submitted for your careful consideration.

The condition of the Southern States is, unhappily, not such as all true
patriotic citizens would like to see. Social ostracism for opinion's
sake, personal violence or threats toward persons entertaining political
views opposed to those entertained by the majority of the old citizens,
prevents immigration and the flow of much-needed capital into the States
lately in rebellion. It will be a happy condition of the country when
the old citizens of these States will take an interest in public
affairs, promulgate ideas honestly entertained, vote for men
representing their views, and tolerate the same freedom of expression
and ballot in those entertaining different political convictions.

Under the provisions of the act of Congress approved February 21, 1871,
a Territorial government was organized in the District of Columbia. Its
results have thus far fully realized the expectations of its advocates.
Under the direction of the Territorial officers, a system of
improvements has been inaugurated by means of which Washington is
rapidly becoming a city worthy of the nation's capital. The citizens of
the District having voluntarily taxed themselves to a large amount for
the purpose of contributing to the adornment of the seat of Government,
I recommend liberal appropriations on the part of Congress, in order
that the Government may bear its just share of the expense of carrying
out a judicious system of improvements.

By the great fire in Chicago the most important of the Government
buildings in that city were consumed. Those burned had already become
inadequate to the wants of the Government in that growing city, and,
looking to the near future, were totally inadequate. I recommend,
therefore, that an appropriation be made immediately to purchase the
remainder of the square on which the burned buildings stood, provided it
can be purchased at a fair valuation, or provided that the legislature
of Illinois will pass a law authorizing its condemnation for Government
purposes; and also an appropriation of as much money as can properly be
expended toward the erection of new buildings during this fiscal year.

The number of immigrants ignorant of our laws, habits, etc., coming into
our country annually has become so great and the impositions practiced
upon them so numerous and flagrant that I suggest Congressional action
for their protection. It seems to me a fair subject of legislation by
Congress. I can not now state as fully as I desire the nature of the
complaints made by immigrants of the treatment they receive, but will
endeavor to do so during the session of Congress, particularly if the
subject should receive your attention.

It has been the aim of the Administration to enforce honesty and
efficiency in all public offices. Every public servant who has violated
the trust placed in him has been proceeded against with all the rigor of
the law. If bad men have secured places, it has been the fault of the
system established by law and custom for making appointments, or the
fault of those who recommend for Government positions persons not
sufficiently well known to them personally, or who give letters
indorsing the characters of office seekers without a proper sense of the
grave responsibility which such a course devolves upon them. A
civil-service reform which can correct this abuse is much desired. In
mercantile pursuits the business man who gives a letter of
recommendation to a friend to enable him to obtain credit from a
stranger is regarded as morally responsible for the integrity of his
friend and his ability to meet his obligations. A reformatory law which
would enforce this principle against all indorsers of persons for public
place would insure great caution in making recommendations. A salutary
lesson has been taught the careless and the dishonest public servant in
the great number of prosecutions and convictions of the last two years.

It is gratifying to notice the favorable change which is taking place
throughout the country in bringing to punishment those who have proven
recreant to the trusts confided to them and in elevating to public
office none but those who possess the confidence of the honest and the
virtuous, who, it will always be found, comprise the majority of the
community in which they live.

In my message to Congress one year ago I urgently recommended a reform
in the civil service of the country. In conformity with that
recommendation Congress, in the ninth section of "An act making
appropriations for sundry civil expenses of the Government, and for
other purposes," approved March 3, 1871, gave the necessary authority to
the Executive to inaugurate a civil-service reform, and placed upon him
the responsibility of doing so. Under the authority of said act I
convened a board of gentlemen eminently qualified for the work to devise
rules and regulations to effect the needed reform. Their labors are not
yet complete, but it is believed that they will succeed in devising a
plan that can be adopted to the great relief of the Executive, the heads
of Departments, and members of Congress, and which will redound to the
true interest of the public service. At all events, the experiment shall
have a fair trial.

I have thus hastily summed up the operations of the Government during
the last year, and made such suggestions as occur to me to be proper for
your consideration. I submit them with a confidence that your combined
action will be wise, statesmanlike, and in the best interests of the
whole country.

U. S. GRANT

***

State of the Union Address
Ulysses S. Grant
December 2, 1872

To the Senate and House of Representatives:

In transmitting to you this my fourth annual message it is with
thankfulness to the Giver of All Good that as a nation we have been
blessed for the past year with peace at home, peace abroad, and a
general prosperity vouchsafed to but few peoples.

With the exception of the recent devastating fire which swept from the
earth with a breath, as it were, millions of accumulated wealth in the
city of Boston, there has been no overshadowing calamity within the year
to record. It is gratifying to note how, like their fellow-citizens of
the city of Chicago under similar circumstances a year earlier, the
citizens of Boston are rallying under their misfortunes, and the
prospect that their energy and perseverance will overcome all obstacles
and show the same prosperity soon that they would had no disaster
befallen them. Otherwise we have been free from pestilence, war, and
calamities, which often overtake nations; and, as far as human judgment
can penetrate the future, no cause seems to exist to threaten our
present peace.

When Congress adjourned in June last, a question had been raised by
Great Britain, and was then pending, which for a time seriously
imperiled the settlement by friendly arbitration of the grave
differences between this Government and that of Her Britannic Majesty,
which by the treaty of Washington had been referred to the tribunal of
arbitration which had met at Geneva, in Switzerland.

The arbitrators, however, disposed of the question which had jeoparded
the whole of the treaty and threatened to involve the two nations in
most unhappy relations toward each other in a manner entirely
satisfactory to this Government and in accordance with the views and the
policy which it had maintained.

The tribunal, which had convened at Geneva in December, concluded its
laborious session on the 14th day of September last, on which day,
having availed itself of the discretionary power given to it by the
treaty to award a sum in gross, it made its decision, whereby it awarded
the sum of $15,500,000 in gold as the indemnity to be paid by Great
Britain to the United States for the satisfaction of all the claims
referred to its consideration.

This decision happily disposes of a long-standing difference between the
two Governments, and, in connection with another award, made by the
German Emperor under a reference to him by the same treaty, leaves these
two Governments without a shadow upon the friendly relations which it is
my sincere hope may forever remain equally unclouded.

The report of the agent of the United States appointed to attend the
Geneva tribunal, accompanied by the protocols of the proceedings of the
arbitrators, the arguments of the counsel of both Governments, the award
of the tribunal, and the opinions given by the several arbitrators, is
transmitted herewith.

I have caused to be communicated to the heads of the three friendly
powers who complied with the joint request made to them under the treaty
the thanks of this Government for the appointment of arbitrators made by
them respectively, and also my thanks to the eminent personages named by
them, and my appreciation of the dignity, patience, impartiality, and
great ability with which they discharged their arduous and high
functions.

Her Majesty's Government has communicated to me the appreciation by Her
Majesty of the ability and indefatigable industry displayed by Mr.
Adams, the arbitrator named on the part of this Government during the
protracted inquiries and discussions of the tribunal. I cordially unite
with Her Majesty in this appreciation.

It is due to the agent of the United States before the tribunal to
record my high appreciation of the marked ability, unwearied patience,
and the prudence and discretion with which he has conducted the very
responsible and delicate duties committed to him, as it is also due to
the learned and eminent counsel who attended the tribunal on the part of
this Government to express my sense of the talents and wisdom which they
brought to bear in the attainment of the result so happily reached.

It will be the province of Congress to provide for the distribution
among those who may be entitled to it of their respective shares of the
money to be paid. Although the sum awarded is not payable until a year
from the date of the award, it is deemed advisable that no time be lost
in making a proper examination of the several cases in which
indemnification may be due. I consequently recommend the creation of a
board of commissioners for the purpose.

By the thirty-fourth article of the treaty of Washington the respective
claims of the United States and of Great Britain in their construction
of the treaty of the 15th of June, 1846, defining the boundary line
between their respective territories, were submitted to the arbitration
and award of His Majesty the Emperor of Germany, to decide which of
those claims is most in accordance with the true interpretation of the
treaty of 1846.

His Majesty the Emperor of Germany, having been pleased to undertake the
arbitration, has the earnest thanks of this Government and of the people
of the United States for the labor, pains, and care which he has devoted
to the consideration of this long-pending difference. I have caused an
expression of my thanks to be communicated to His Majesty. Mr. Bancroft,
the representative of this Government at Berlin, conducted the case and
prepared the statement on the part of the United States with the ability
that his past services justified the public in expecting at his hands.
As a member of the Cabinet at the date of the treaty which has given
rise to the discussion between the two Governments, as the minister to
Great Britain when the construction now pronounced unfounded was first
advanced, and as the agent and representative of the Government to
present the case and to receive the award, he has been associated with
the question in all of its phases, and in every stage has manifested a
patriotic zeal and earnestness in maintenance of the claim of the United
States. He is entitled to much credit for the success which has attended
the submission.

After a patient investigation of the case and of the statements of each
party, His Majesty the Emperor, on the 21st day of October last, signed
his award in writing, decreeing that the claim of the Government of the
United States, that the boundary line between the territories of Her
Britannic Majesty and the United States should be drawn through the Haro
Channel, is most in accordance with the true interpretation of the
treaty concluded on the 15th of June, 1846, between the Governments of
Her Britannic Majesty and of the United States.

Copies of the "case" presented on behalf of each Government, and of the
"statement in reply" of each, and a translation of the award, are
transmitted herewith.

This award confirms the United States in their claim to the important
archipelago of islands lying between the continent and Vancouvers
Island, which for more than twenty-six years (ever since the
ratification of the treaty) Great Britain has contested, and leaves us,
for the first time in the history of the United States as a nation,
without a question of disputed boundary between our territory and the
possessions of Great Britain on this continent.

It is my grateful duty to acknowledge the prompt, spontaneous action of
Her Majesty's Government in giving effect to the award. In anticipation
of any request from this Government, and before the reception in the
United States of the award signed by the Emperor, Her Majesty had given
instructions for the removal of her troops which had been stationed
there and for the cessation of all exercise or claim of jurisdiction, so
as to leave the United States in the exclusive possession of the lately
disputed territory. I am gratified to be able to announce that the
orders for the removal of the troops have been executed, and that the
military joint occupation of San Juan has ceased. The islands are now in
the exclusive possession of the United States.

It now becomes necessary to complete the survey and determination of
that portion of the boundary line (through the Haro Channel) upon which
the commission which determined the remaining part of the line were
unable to agree. I recommend the appointment of a commission to act
jointly with one which may be named by Her Majesty for that purpose.

Experience of the difficulties attending the determination of our
admitted line of boundary, after the occupation of the territory and its
settlement by those owing allegiance to the respective Governments,
points to the importance of establishing, by natural objects or other
monuments, the actual line between the territory acquired by purchase
from Russia and the adjoining possessions of Her Britannic Majesty. The
region is now so sparsely occupied that no conflicting interests of
individuals or of jurisdiction are likely to interfere to the delay or
embarrassment of the actual location of the line. If deferred until
population shall enter and occupy the territory, some trivial contest of
neighbors may again array the two Governments in antagonism. I therefore
recommend the appointment of a commission, to act jointly with one that
may be appointed on the part of Great Britain, to determine the line
between our Territory of Alaska and the conterminous possessions of
Great Britain.

In my last annual message I recommended the legislation necessary on the
part of the United States to bring into operation the articles of the
treaty of Washington of May 8, 1871, relating to the fisheries and to
other matters touching the relations of the United States toward the
British North American possessions, to become operative so soon as the
proper legislation should be had on the part of Great Britain and its
possessions.

That legislation on the part of Great Britain and its possessions had
not then been had, and during the session of Congress a question was
raised which for the time raised a doubt whether any action by Congress
in the direction indicated would become important. This question has
since been disposed of, and I have received notice that the Imperial
Parliament and the legislatures of the provincial governments have
passed laws to carry the provisions of the treaty on the matters
referred to into operation. I therefore recommend your early adoption of
the legislation in the same direction necessary on the part of this
Government.

The joint commission for determining the boundary line between the
United States and the British possessions between the Lake of the Woods
and the Rocky Mountains has organized and entered upon its work. It is
desirable that the force be increased, in order that the completion of
the survey and determination of the line may be the sooner attained. To
this end I recommend that a sufficient appropriation be made.

With France, our earliest ally; Russia, the constant and steady friend
of the United States; Germany, with whose Government and people we have
so many causes of friendship and so many common sympathies, and the
other powers of Europe, our relations are maintained on the most
friendly terms.

Since my last annual message the exchange has been made of the
ratifications of a treaty with the Austro-Hungarian Empire relating to
naturalization; also of a treaty with the German Empire respecting
consuls and trade-marks; also of a treaty with Sweden and Norway
relating to naturalization; all of which treaties have been duly
proclaimed.

Congress at its last session having made an appropriation to defray the
expense of commissioners on the part of the United States to the
International Statistical Congress at St. Petersburg, the persons
appointed in that character proceeded to their destination and attended
the sessions of the congress. Their report shall in due season be laid
before you. This congress meets at intervals of about three years, and
has held its sessions in several of the countries of Europe. I submit to
your consideration the propriety of extending an invitation to the
congress to hold its next meeting in the United States. The Centennial
Celebration to be held in 1876 would afford an appropriate occasion for
such meeting.

Preparations are making for the international exposition to be held
during the next year in Vienna, on a scale of very great magnitude. The
tendency of these expositions is in the direction of advanced
civilization, and of the elevation of industry and of labor, and of the
increase of human happiness, as well as of greater intercourse and good
will between nations. As this exposition is to be the first which will
have been held in eastern Europe, it is believed that American inventors
and manufacturers will be ready to avail themselves of the opportunity
for the presentation of their productions if encouraged by proper aid
and protection.

At the last session of Congress authority was given for the appointment
of one or more agents to represent this Government at the exposition.
The authority thus given has been exercised, but, in the absence of any
appropriation, there is danger that the important benefits which the
occasion offers will in a large degree be lost to citizens of the United
States. I commend the subject strongly to your consideration, and
recommend that an adequate appropriation be made for the purpose.

To further aid American exhibitors at the Vienna Exposition, I would
recommend, in addition to an appropriation of money, that the Secretary
of the Navy be authorized to fit up two naval vessels to transport
between our Atlantic cities and Trieste, or the most convenient port to
Vienna, and back, their articles for exhibition.

Since your last session the President of the Mexican Republic,
distinguished by his high character and by his services to his country,
has died. His temporary successor has now been elected with great
unanimity by the people a proof of confidence on their part in his
patriotism and wisdom which it is believed will be confirmed by the
results of his administration. It is particularly desirable that nothing
should be left undone by the Government of either Republic to strengthen
their relations as neighbors and friends.

It is much to be regretted that many lawless acts continue to disturb
the quiet of the settlements on the border between our territory and
that of Mexico, and that complaints of wrongs to American citizens in
various parts of the country are made. The revolutionary condition in
which the neighboring Republic has so long been involved has in some
degree contributed to this disturbance. It is to be hoped that with a
more settled rule of order through the Republic, which may be expected
from the present Government, the acts of which just complaint is made
will cease.

The proceedings of the commission under the convention with Mexico of
the 4th of July, 1868, on the subject of claims, have, unfortunately,
been checked by an obstacle, for the removal of which measures have been
taken by the two Governments which it is believed will prove successful.

The commissioners appointed, pursuant to the joint resolution of
Congress of the 7th of May last, to inquire into depredations on the
Texan frontier have diligently made investigations in that quarter.
Their report upon the subject will be communicated to you. Their
researches were necessarily incomplete, partly on account of the limited
appropriation made by Congress. Mexico, on the part of that Government,
has appointed a similar commission to investigate these outrages. It is
not announced officially, but the press of that country states that the
fullest investigation is desired, and that the cooperation of all
parties concerned is invited to secure that end. I therefore recommend
that a special appropriation be made at the earliest day practicable, to
enable the commissioners on the part of the United States to return to
their labors without delay.

It is with regret that I have again to announce a continuance of the
disturbed condition of the island of Cuba. No advance toward the
pacification of the discontented part of the population has been made.
While the insurrection has gained no advantages and exhibits no more of
the elements of power or of the prospects of ultimate success than were
exhibited a year ago, Spain, on the other hand, has not succeeded in its
repression, and the parties stand apparently in the same relative
attitude which they have occupied for a long time past.

This contest has lasted now for more than four years. Were its scene at
a distance from our neighborhood, we might be indifferent to its result,
although humanity could not be unmoved by many of its incidents wherever
they might occur. It is, however, at our door.

I can not doubt that the continued maintenance of slavery in Cuba is
among the strongest inducements to the continuance of this strife. A
terrible wrong is the natural cause of a terrible evil. The abolition of
slavery and the introduction of other reforms in the administration of
government in Cuba could not fail to advance the restoration of peace
and order. It is greatly to be hoped that the present liberal Government
of Spain will voluntarily adopt this view.

The law of emancipation, which was passed more than two years since, has
remained unexecuted in the absence of regulations for its enforcement.
It was but a feeble step toward emancipation, but it was the recognition
of right, and was hailed as such, and exhibited Spain in harmony with
sentiments of humanity and of justice and in sympathy with the other
powers of the Christian and civilized world.

Within the past few weeks the regulations for carrying out the law of
emancipation have been announced, giving evidence of the sincerity of
intention of the present Government to carry into effect the law of
1870. I have not failed to urge the consideration of the wisdom, the
policy, and the justice of a more effective system for the abolition of
the great evil which oppresses a race and continues a bloody and
destructive contest close to our border, as well as the expediency and
the justice of conceding reforms of which the propriety is not
questioned.

Deeply impressed with the conviction that the continuance of slavery is
one of the most active causes of the continuance of the unhappy
condition in Cuba, I regret to believe that citizens of the United
States, or those claiming to be such, are large holders in Cuba of what
is there claimed as property, but which is forbidden and denounced by
the laws of the United States. They are thus, in defiance of the spirit
of our own laws, contributing to the continuance of this distressing and
sickening contest. In my last annual message I referred to this subject,
and I again recommend such legislation as may be proper to denounce,
and, if not prevent, at least to discourage American citizens from
holding or dealing in slaves.

It is gratifying to announce that the ratifications of the convention
concluded under the auspices of this Government between Spain on the one
part and the allied Republics of the Pacific on the other, providing for
an armistice, have been exchanged. A copy of the instrument is herewith
submitted. It is hoped that this may be followed by a permanent peace
between the same parties.

The differences which at one time threatened the maintenance of peace
between Brazil and the Argentine Republic it is hoped are in the way of
satisfactory adjustment.

With these States, as with the Republics of Central and of South
America, we continue to maintain the most friendly relations.

It is with regret, however, I announce that the Government of Venezuela
has made no further payments on account of the awards under the
convention of the 25th of April, 1866. That Republic is understood to be
now almost, if not quite, tranquilized. It is hoped, therefore, that it
will lose no time in providing for the unpaid balance of its debt to the
United States, which, having originated in injuries to our citizens by
Venezuelan authorities, and having been acknowledged, pursuant to a
treaty, in the most solemn form known among nations, would seem to
deserve a preference over debts of a different origin and contracted in
a different manner. This subject is again recommended to the attention
of Congress for such action as may be deemed proper.

Our treaty relations with Japan remain unchanged. An imposing embassy
from that interesting and progressive nation visited this country during
the year that is passing, but, being unprovided with powers for the
signing of a convention in this country, no conclusion in that direction
was reached. It is hoped, however, that the interchange of opinions
which took place during their stay in this country has led to a mutual
appreciation of the interests which may be promoted when the revision of
the existing treaty shall be undertaken.

In this connection I renew my recommendation of one year ago, that--

To give importance to and to add to the efficiency of our diplomatic
relations with Japan and China, and to further aid in retaining the good
opinion of those peoples, and to secure to the United States its share
of the commerce destined to flow between those nations and the balance
of the commercial world, an appropriation be made to support at least
four American youths in each of those countries, to serve as a part of
the official family of our ministers there. Our representatives would
not even then be placed upon an equality with the representatives of
Great Britain and of some other powers. As now situated, our
representatives in Japan and China have to depend for interpreters and
translators upon natives of those countries, who know our language
imperfectly, or procure for the occasion the services of employees in
foreign business houses or the interpreters to other foreign ministers.

I renew the recommendation made on a previous occasion, of the transfer
to the Department of the Interior, to which they seem more appropriately
to belong, of all the powers and duties in relation to the Territories
with which the Department of State is now charged by law or by custom.

Congress from the beginning of the Government has wisely made provision
for the relief of distressed seamen in foreign countries. No similar
provision, however, has hitherto been made for the relief of citizens in
distress abroad other than seamen. It is understood to be customary with
other governments to authorize consuls to extend such relief to their
citizens or subjects in certain cases. A similar authority and an
appropriation to carry it into effect are recommended in the case of
citizens of the United States destitute or sick under such
circumstances. It is well known that such citizens resort to foreign
countries in great numbers. Though most of them are able to bear the
expenses incident to locomotion, there are some who, through accident or
otherwise, become penniless, and have no friends at home able to succor
them. Persons in this situation must either perish, cast themselves upon
the charity of foreigners, or be relieved at the private charge of our
own officers, who usually, even with the most benevolent dispositions,
have nothing to spare for such purposes.

Should the authority and appropriation asked for be granted, care will
be taken so to carry the beneficence of Congress into effect that it
shall not be unnecessarily or unworthily bestowed. TREASURY.

The moneys received and covered into the Treasury during the fiscal year
ended June 30, 1872, were:

From customs - $216,370,286.77

From sales of public lands - 2,575,714.19

From internal revenue - 130,642,177.72

From tax on national-bank circulation, etc - 6,523,396.39

From Pacific railway companies - 749,861.87

From customs fines, etc - 1,136,442.34

From fees--consular, patent, lands, etc - 2,284,095.92

From miscellaneous - 412,254.71 -

***

State of the Union Address
Ulysses S. Grant
December 1, 1873

To the Senate and House of Representatives:

The year that has passed since the submission of my last message to
Congress has, especially during the latter part of it, been an eventful
one to the country. In the midst of great national prosperity a
financial crisis has occurred that has brought low fortunes of gigantic
proportions; political partisanship has almost ceased to exist,
especially in the agricultural regions; and, finally, the capture upon
the high seas of a vessel bearing our flag has for a time threatened the
most serious consequences, and has agitated the public mind from one end
of the country to the other. But this, happily, now is in the course of
satisfactory adjustment, honorable to both nations concerned.

The relations of the United States, however, with most of the other
powers continue to be friendly and cordial. With France, Germany,
Russia, Italy, and the minor European powers; with Brazil and most of
the South American Republics, and with Japan, nothing has occurred
during the year to demand special notice. The correspondence between the
Department of State and various diplomatic representatives in or from
those countries is transmitted herewith.

In executing the will of Congress, as expressed in its joint resolution
of the 14th of February last, and in accordance with the provisions of
the resolution, a number of "practical artisans," of "scientific men,"
and of "honorary commissioners" were authorized to attend the exposition
at Vienna as commissioners on the part of the United States. It is
believed that we have obtained the object which Congress had in view
when it passed the joint resolution--"in order to enable the people of
the United States to participate in the advantages of the International
Exhibition of the Products of Agriculture, Manufactures, and the Fine
Arts to be held at Vienna." I take pleasure in adding that the American
exhibitors have received a gratifying number of diplomas and of medals.

During the exposition a conference was held at Vienna for the purpose of
consultation on the systems prevailing in different countries for the
protection of inventions. I authorized a representative from the Patent
Office to be present at Vienna at the time when this conference was to
take place, in order to aid as far as he might in securing any possible
additional protection to American inventors in Europe. The report of
this agent will be laid before Congress.

It is my pleasant duty to announce to Congress that the Emperor of
China, on attaining his majority, received the diplomatic
representatives of the Western powers in person. An account of these
ceremonies and of the interesting discussions which preceded them will
be found in the documents transmitted herewith. The accompanying papers
show that some advance, although slight, has been made during the past
year toward the suppression of the infamous Chinese cooly trade. I
recommend Congress to inquire whether additional legislation be not
needed on this subject.

The money awarded to the United States by the tribunal of arbitration at
Geneva was paid by Her Majesty's Government a few days in advance of the
time when it would have become payable according to the terms of the
treaty. In compliance with the provisions of the act of March 3, 1873,
it was at once paid into the Treasury, and used to redeem, so far as it
might, the public debt of the United States; and the amount so redeemed
was invested in a 5 per cent registered bond of the United States for
$15,500,000, which is now held by the Secretary of State, subject to the
future disposition of Congress.

I renew my recommendation, made at the opening of the last session of
Congress, that a commission be created for the purpose of auditing and
determining the amounts of the several "direct losses growing out of the
destruction of vessels and their cargoes" by the Alabama, the Florida,
or the Shenandoah after leaving Melbourne, for which the sufferers have
received no equivalent or compensation, and of ascertaining the names of
the persons entitled to receive compensation for the same, making the
computations upon the basis indicated by the tribunal of arbitration at
Geneva; and that payment of such losses be authorized to an extent not
to exceed the awards of the tribunal at Geneva.

By an act approved on the 14th day of February last Congress made
provision for completing, jointly with an officer or commissioner to be
named by Her Britannic Majesty, the determination of so much of the
boundary line between the territory of the United States and the
possessions of Great Britain as was left uncompleted by the
commissioners appointed under the act of Congress of August 11, 1856.
Under the provisions of this act the northwest water boundary of the
United States has been determined and marked in accordance with the
award of the Emperor of Germany. A protocol and a copy of the map upon
which the line was thus marked are contained in the papers submitted
herewith.

I also transmit a copy of the report of the commissioner for marking the
northern boundary between the United States and the British possessions
west of the Lake of the Woods, of the operations of the commission
during the past season. Surveys have been made to a point 497 miles west
of the Lake of the Woods, leaving about 350 miles to be surveyed, the
field work of which can be completed during the next season.

The mixed commission organized under the provisions of the treaty of
Washington for settling and determining the claims of citizens of either
power against the other arising out of acts committed against their
persons or property during the period between April 13, 1861, and April
9, 1865, made its final award on the 25th day of September last. It was
awarded that the Government of the United States should pay to the
Government of Her Britannic Majesty, within twelve months from the date
of the award, the sum of $1,929,819 in gold. The commission disallowed
or dismissed all other claims of British subjects against the United
States. The amount of the claims presented by the British Government,
but disallowed or dismissed, is understood to be about $93,000,000. It
also disallowed all the claims of citizens of the United States against
Great Britain which were referred to it.

I recommend the early passage of an act appropriating the amount
necessary to pay this award against the United States.

I have caused to be communicated to the Government of the King of Italy
the thanks of this Government for the eminent services rendered by Count
Corti as the third commissioner on this commission. With dignity,
learning, and impartiality he discharged duties requiring great labor
and constant patience, to the satisfaction, I believe, of both
Governments. I recommend legislation to create a special court, to
consist of three judges, who shall be empowered to hear and determine
all claims of aliens upon the United States arising out of acts
committed against their persons or property during the insurrection. The
recent reference under the treaty of Washington was confined to claims
of British subjects arising during the period named in the treaty; but
it is understood that there are other British claims of a similar
nature, arising after the 9th of April, 1865, and it is known that other
claims of a like nature are advanced by citizens or subjects of other
powers. It is desirable to have these claims also examined and disposed
of.

Official information being received from the Dutch Government of a state
of war between the King of the Netherlands and the Sultan of Acheen, the
officers of the United States who were near the seat of the war were
instructed to observe an impartial neutrality. It is believed that they
have done so.

The joint commission under the convention with Mexico of 1868, having
again been legally prolonged, has resumed its business, which, it is
hoped, may be brought to an early conclusion. The distinguished
representative of Her Britannic Majesty at Washington has kindly
consented, with the approval of his Government, to assume the arduous
and responsible duties of umpire in this commission, and to lend the
weight of his character and name to such decisions as may not receive
the acquiescence of both the arbitrators appointed by the respective
Governments.

The commissioners appointed pursuant to the authority of Congress to
examine into the nature and extent of the forays by trespassers from
that country upon the herds of Texas have made a report, which will be
submitted for your consideration.

The Venezuelan Government has been apprised of the sense of Congress in
regard to the awards of the joint commission under the convention of
25th April, 1866, as expressed in the act of the 25th of February last.

It is apprehended that that Government does not realize the character of
its obligations under that convention. As there is reason to believe,
however, that its hesitancy in recognizing them springs, in part at
least, from real difficulty in discharging them in connection with its
obligations to other governments, the expediency of further forbearance
on our part is believed to be worthy of your consideration.

The Ottoman Government and that of Egypt have latterly shown a
disposition to relieve foreign consuls of the judicial powers which
heretofore they have exercised in the Turkish dominions, by organizing
other tribunals. As Congress, however, has by law provided for the
discharge of judicial functions by consuls of the United States in that
quarter under the treaty of 1830, I have not felt at liberty formally to
accept the proposed change without the assent of Congress, whose
decision upon the subject at as early a period as may be convenient is
earnestly requested.

I transmit herewith, for the consideration and determination of
Congress, an application of the Republic of Santo Domingo to this
Government to exercise a protectorate over that Republic.

Since the adjournment of Congress the following treaties with foreign
powers have been proclaimed: A naturalization convention with Denmark; a
convention with Mexico for renewing the Claims Commission; a convention
of friendship, commerce, and extradition with the Orange Free State, and
a naturalization convention with Ecuador.

I renew the recommendation made in my message of December, 1870, that
Congress authorize the Postmaster-General to issue all commissions to
officials appointed through his Department.

I invite the earnest attention of Congress to the existing laws of the
United States respecting expatriation and the election of nationality by
individuals. Many citizens of the United States reside permanently
abroad with their families. Under the provisions of the act approved
February 10, 1855, the children of such persons are to be deemed and
taken to be citizens of the United States, but the rights of citizenship
are not to descend to persons whose fathers never resided in the United
States.

It thus happens that persons who have never resided within the United
States have been enabled to put forward a pretension to the protection
of the United States against the claim to military service of the
government under whose protection they were born and have been reared.
In some cases even naturalized citizens of the United States have
returned to the land of their birth, with intent to remain there, and
their children, the issue of a marriage contracted there after their
return, and who have never been in the United States, have laid claim to
our protection when the lapse of many years had imposed upon them the
duty of military service to the only government which had ever known
them personally.

Until the year 1868 it was left, embarrassed by conflicting opinions of
courts and of jurists, to determine how far the doctrine of perpetual
allegiance derived from our former colonial relations with Great Britain
was applicable to American citizens. Congress then wisely swept these
doubts away by enacting that--Any declaration, instruction, opinion,
order, or decision of any officer of this Government which denies,
restricts, impairs, or questions the right of expatriation is
inconsistent with the fundamental principles of this Government. But
Congress did not indicate in that statute, nor has it since done so,
what acts are to be deemed to work expatriation. For my own guidance in
determining such questions I required (under the provisions of the
Constitution) the opinion in writing of the principal officer in each of
the Executive Departments upon certain questions relating to this
subject. The result satisfies me that further legislation has become
necessary. I therefore commend the subject to the careful consideration
of Congress, and I transmit herewith copies of the several opinions of
the principal officers of the Executive Departments, together with other
correspondence and pertinent information on the same subject.

The United States, who led the way in the overthrow of the feudal
doctrine of perpetual allegiance, are among the last to indicate how
their own citizens may elect another nationality. The papers submitted
herewith indicate what is necessary to place us on a par with other
leading nations in liberality of legislation on this international
question. We have already in our treaties assented to the principles
which would need to be embodied in laws intended to accomplish such
results. We have agreed that citizens of the United States may cease to
be citizens and may voluntarily render allegiance to other powers. We
have agreed that residence in a foreign land, without intent to return,
shall of itself work expatriation. We have agreed in some instances upon
the length of time necessary for such continued residence to work a
presumption of such intent. I invite Congress now to mark out and define
when and how expatriation can be accomplished; to regulate by law the
condition of American women marrying foreigners; to fix the status of
children born in a foreign country of American parents residing more or
less permanently abroad, and to make rules for determining such other
kindred points as may seem best to Congress.

In compliance with the request of Congress, I transmitted to the
American minister at Madrid, with instructions to present it to the
Spanish Government, the joint resolution approved on the 3d of March
last, tendering to the people of Spain, in the name and on the behalf of
the American people, the congratulations of Congress upon the efforts to
consolidate in Spain the principles of universal liberty in a republican
form of government.

The existence of this new Republic was inaugurated by striking the
fetters from the slaves in Porto Rico. This beneficent measure was
followed by the release of several thousand persons illegally held as
slaves in Cuba. Next, the Captain-General of that colony was deprived of
the power to set aside the orders of his superiors at Madrid, which had
pertained to the office since 1825. The sequestered estates of American
citizens, which had been the cause of long and fruitless correspondence,
were ordered to be restored to their owners. All these liberal steps
were taken in the face of a violent opposition directed by the
reactionary slave-holders of Havana, who are vainly striving to stay the
march of ideas which has terminated slavery in Christendom, Cuba only
excepted. Unhappily, however, this baneful influence has thus far
succeeded in defeating the efforts of all liberal-minded men in Spain to
abolish slavery in Cuba, and in preventing the promised reform in that
island. The struggle for political supremacy continues there.

The proslavery and aristocratic party in Cuba is gradually arraigning
itself in more and more open hostility and defiance of the home
government, while it still maintains a political connection with the
Republic in the peninsula; and although usurping and defying the
authority of the home government whenever such usurpation or defiance
tends in the direction of oppression or of the maintenance of abuses, it
is still a power in Madrid, and is recognized by the Government. Thus an
element more dangerous to continued colonial relations between Cuba and
Spain than that which inspired the insurrection at Yara--an element
opposed to granting any relief from misrule and abuse, with no
aspirations after freedom, commanding no sympathies in generous breasts,
aiming to rivet still stronger the shackles of slavery and
oppression--has seized many of the emblems of power in Cuba, and, under
professions of loyalty to the mother country, is exhausting the
resources of the island, and is doing acts which are at variance with
those principles of justice, of liberality, and of right which give
nobility of character to a republic. In the interests of humanity, of
civilization, and of progress, it is to be hoped that this evil
influence may be soon averted.

The steamer Virginius was on the 26th day of September, 1870, duly
registered at the port of New York as a part of the commercial marine of
the United States. On the 4th of October, 1870, having received the
certificate of her register in the usual legal form, she sailed from the
port of New York and has not since been within the territorial
jurisdiction of the United States. On the 31st day of October last,
while sailing under the flag of the United States on the high seas, she
was forcibly seized by the Spanish gunboat Tornado, and was carried into
the port of Santiago de Cuba, where fifty-three of her passengers and
crew were inhumanly, and, so far at least as relates to those who were
citizens of the United States, without due process of law, put to death.

It is a well-established principle, asserted by the United States from
the beginning of their national independence, recognized by Great
Britain and other maritime powers, and stated by the Senate in a
resolution passed unanimously on the 16th of June, 1858, that--American
vessels on the high seas in time of peace, bearing the American flag,
remain under the jurisdiction of the country to which they belong, and
therefore any visitation, molestation, or detention of such vessel by
force, or by the exhibition of force, on the part of a foreign power is
in derogation of the sovereignty of the United States. In accordance
with this principle, the restoration of the Virginius and the surrender
of the survivors of her passengers and crew, and a due reparation to the
flag, and the punishment of the authorities who had been guilty of the
illegal acts of violence, were demanded. The Spanish Government has
recognized the justice of the demand, and has arranged for the immediate
delivery of the vessel, and for the surrender of the survivors of the
passengers and crew, and for a salute to the flag, and for proceedings
looking to the punishment of those who may be proved to have been guilty
of illegal acts of violence toward citizens of the United States, and
also toward indemnifying those who may be shown to be entitled to
indemnity. A copy of a protocol of a conference between the Secretary of
State and the Spanish minister, in which the terms of this arrangement
were agreed to, is transmitted herewith.

The correspondence on this subject with the legation of the United
States in Madrid was conducted in cipher and by cable, and needs the
verification of the actual text of the correspondence. It has seemed to
me to be due to the importance of the case not to submit this
correspondence until the accurate text can be received by mail. It is
expected shortly, and will be submitted when received.

In taking leave of this subject for the present I wish to renew the
expression of my conviction that the existence of African slavery in
Cuba is a principal cause of the lamentable condition of the island. I
do not doubt that Congress shares with me the hope that it will soon be
made to disappear, and that peace and prosperity may follow its
abolition.

The embargoing of American estates in Cuba, cruelty to American citizens
detected in no act of hostility to the Spanish Government, the murdering
of prisoners taken with arms in their hands, and, finally, the capture
upon the high seas of a vessel sailing under the United States flag and
bearing a United States registry have culminated in an outburst of
indignation that has seemed for a time to threaten war. Pending
negotiations between the United States and the Government of Spain on
the subject of this capture, I have authorized the Secretary of the Navy
to put our Navy on a war footing, to the extent, at least, of the entire
annual appropriation for that branch of the service, trusting to
Congress and the public opinion of the American people to justify my
action.

Assuming from the action of the last Congress in appointing a Committee
on Privileges and Elections to prepare and report to this Congress a
constitutional amendment to provide a better method of electing the
President and Vice-President of the United States, and also from the
necessity of such an amendment, that there will be submitted to the
State legislatures for ratification such an improvement in our
Constitution, I suggest two others for your consideration:

First. To authorize the Executive to approve of so much of any measure
passing the two Houses of Congress as his judgment may dictate, without
approving the whole, the disapproved portion or portions to be subjected
to the same rules as now, to wit, to be referred back to the House in
which the measure or measures originated, and, if passed by a two-thirds
vote of the two Houses, then to become a law without the approval of the
President. I would add to this a provision that there should be no
legislation by Congress during the last twenty-four hours of its
sitting, except upon vetoes, in order to give the Executive an
opportunity to examine and approve or disapprove bills understandingly.

Second. To provide by amendment that when an extra session of Congress
is convened by Executive proclamation legislation during the continuance
of such extra session shall be confined to such subjects as the
Executive may bring before it from time to time in writing.

The advantages to be gained by these two amendments are too obvious for
me to comment upon them. One session in each year is provided for by the
Constitution, in which there are no restrictions as to the subjects of
legislation by Congress. If more are required, it is always in the power
of Congress, during their term of office, to provide for sessions at any
time. The first of these amendments would protect the public against the
many abuses and waste of public moneys which creep into appropriation
bills and other important measures passing during the expiring hours of
Congress, to which otherwise due consideration can not be given.

TREASURY DEPARTMENT.

The receipts of the Government from all sources for the last fiscal year
were $333,738,204, and expenditures on all accounts $290,345,245, thus
showing an excess of receipts over expenditures of $43,392,959. But it
is not probable that this favorable exhibit will be shown for the
present fiscal year. Indeed, it is very doubtful whether, except with
great economy on the part of Congress in making appropriations and the
same economy in administering the various Departments of Government, the
revenues will not fall short of meeting actual expenses, including
interest on the public debt.

I commend to Congress such economy, and point out two sources where It
seems to me it might commence, to wit, in the appropriations for public
buildings in the many cities where work has not yet been commenced; in
the appropriations for river and harbor improvement in those localities
where the improvements are of but little benefit to general commerce,
and for fortifications.

There is a still more fruitful source of expenditure, which I will point
out later in this message. I refer to the easy method of manufacturing
claims for losses incurred in suppressing the late rebellion.

I would not be understood here as opposing the erection of good,
substantial, and even ornamental buildings by the Government wherever
such buildings are needed. In fact, I approve of the Government owning
its own buildings in all sections of the country, and hope the day is
not far distant when it will not only possess them, but will erect in
the capital suitable residences for all persons who now receive
commutation for quarters or rent at Government expense, and for the
Cabinet, thus setting an example to the States which may induce them to
erect buildings for their Senators. But I would have this work conducted
at a time when the revenues of the country would abundantly justify it.

The revenues have materially fallen off for the first five months of the
present fiscal year from what they were expected to produce, owing to
the general panic now prevailing, which commenced about the middle of
September last. The full effect of this disaster, if it should not prove
a "blessing in disguise," is yet to be demonstrated. In either event it
is your duty to heed the lesson and to provide by wise and
well-considered legislation, as far as it lies in your power, against
its recurrence, and to take advantage of all benefits that may have
accrued.

My own judgment is that, however much individuals may have suffered, one
long step has been taken toward specie payments; that we can never have
permanent prosperity until a specie basis is reached: and that a specie
basis can not be reached and maintained until our exports, exclusive of
gold, pay for our imports, interest due abroad, and other specie
obligations, or so nearly so as to leave an appreciable accumulation of
the precious metals in the country from the products of our mines.

The development of the mines of precious metals during the past year and
the prospective development of them for years to come are gratifying in
their results. Could but one-half of the gold extracted from the mines
be retained at home, our advance toward specie payments would be rapid.

To increase our exports sufficient currency is required to keep all the
industries of the country employed. Without this national as well as
individual bankruptcy must ensue. Undue inflation, on the other hand,
while it might give temporary relief, would only lead to inflation of
prices, the impossibility of competing in our own markets for the
products of home skill and labor, and repeated renewals of present
experiences. Elasticity to our circulating medium, therefore, and just
enough of it to transact the legitimate business of the country and to
keep all industries employed, is what is most to be desired. The exact
medium is specie, the recognized medium of exchange the world over. That
obtained, we shall have a currency of an exact degree of elasticity. If
there be too much of it for the legitimate purposes of trade and
commerce, it will flow out of the country. If too little, the reverse
will result. To hold what we have and to appreciate our currency to that
standard is the problem deserving of the most serious consideration of
Congress.

The experience of the present panic has proven that the currency of the
country, based, as it is, upon the credit of the country, is the best
that has ever been devised. Usually in times of such trials currency has
become worthless, or so much depreciated in value as to inflate the
values of all the necessaries of life as compared with the currency.
Everyone holding it has been anxious to dispose of it on any terms. Now
we witness the reverse. Holders of currency hoard it as they did gold in
former experiences of a like nature.

It is patent to the most casual observer that much more currency, or
money, is required to transact the legitimate trade of the country
during the fall and winter months, when the vast crops are being
removed, than during the balance of the year. With our present system
the amount in the country remains the same throughout the entire year,
resulting in an accumulation of all the surplus capital of the country
in a few centers when not employed in the moving of crops, tempted there
by the offer of interest on call loans. Interest being paid, this
surplus capital must earn this interest paid with a profit. Being
subject to "call," it can not be loaned, only in part at best, to the
merchant or manufacturer for a fixed term. Hence, no matter how much
currency there might be in the country, it would be absorbed, prices
keeping pace with the volume, and panics, stringency, and disasters
would ever be recurring with the autumn. Elasticity in our monetary
system, therefore, is the object to be attained first, and next to that,
as far as possible, a prevention of the use of other people's money in
stock and other species of speculation. To prevent the latter it seems
to me that one great step would be taken by prohibiting the national
banks from paying interest on deposits, by requiring them to hold their
reserves in their own vaults, and by forcing them into resumption,
though it would only be in legal-tender notes. For this purpose I would
suggest the establishment of clearing houses for your consideration.

To secure the former many plans have been suggested, most, if not all,
of which look to me more like inflation on the one hand, or compelling
the Government, on the other, to pay interest, without corresponding
benefits, upon the surplus funds of the country during the seasons when
otherwise unemployed.

I submit for your consideration whether this difficulty might not be
overcome by authorizing the Secretary of the Treasury to issue at any
time to national banks of issue any amount of their own notes below a
fixed percentage of their issue (say 40 per cent), upon the banks'
depositing with the Treasurer of the United States an amount of
Government bonds equal to the amount of notes demanded, the banks to
forfeit to the Government, say, 4 per cent of the interest accruing on
the bonds so pledged during the time they remain with the Treasurer as
security for the increased circulation, the bonds so pledged to be
redeemable by the banks at their pleasure, either in whole or in part,
by returning their own bills for cancellation to an amount equal to the
face of the bonds withdrawn. I would further suggest for your
consideration the propriety of authorizing national banks to diminish
their standing issue at pleasure, by returning for cancellation their
own bills and withdrawing so many United States bonds as are pledged for
the bills returned.

In view of the great actual contraction that has taken place in the
currency and the comparative contraction continuously going on, due to
the increase of population, increase of manufactories and all the
industries, I do not believe there is too much of it now for the dullest
period of the year. Indeed, if clearing houses should be established,
thus forcing redemption, it is a question for your consideration whether
banking should not be made free, retaining all the safeguards now
required to secure bill holders. In any modification of the present laws
regulating national banks, as a further step toward preparing for
resumption of specie payments, I invite your attention to a
consideration of the propriety of exacting from them the retention as a
part of their reserve either the whole or a part of the gold interest
accruing upon the bonds pledged as security for their issue. I have not
reflected enough on the bearing this might have in producing a scarcity
of coin with which to pay duties on imports to give it my positive
recommendation. But your attention is invited to the subject.

During the last four years the currency has been contracted, directly,
by the withdrawal of 3 per cent certificates, compound-interest notes,
and "seven-thirty" bonds outstanding on the 4th of March, 1869, all of
which took the place of legal-tenders in the bank reserves to the extent
of $63,000,000.

During the same period there has been a much larger comparative
contraction of the currency. The population of the country has largely
increased. More than 25,000 miles of railroad have been built, requiring
the active use of capital to operate them. Millions of acres of land
have been opened to cultivation, requiring capital to move the products.
Manufactories have multiplied beyond all precedent in the same period of
time, requiring capital weekly for the payment of wages and for the
purchase of material; and probably the largest of all comparative
contraction arises from the organizing of free labor in the South. Now
every laborer there receives his wages, and, for want of savings banks,
the greater part of such wages is carried in the pocket or hoarded until
required for use.

These suggestions are thrown out for your consideration, without any
recommendation that they shall be adopted literally, but hoping that the
best method may be arrived at to secure such an elasticity of the
currency as will keep employed all the industries of the country and
prevent such an inflation as will put off indefinitely the resumption of
specie payments, an object so devoutly to be wished for by all, and by
none more earnestly than the class of people most directly
interested--those who "earn their bread by the sweat of their brow." The
decisions of Congress on this subject will have the hearty support of
the Executive.

In previous messages I have called attention to the decline in American
shipbuilding and recommended such legislation as would secure to us our
proportion of the carrying trade. Stimulated by high rates and abundance
of freight, the progress for the last year in shipbuilding has been very
satisfactory. There has been an increase of about 3 per cent in the
amount transported in American vessels over the amount of last year.
With the reduced cost of material which has taken place, it may
reasonably be hoped that this progress will be maintained, and even
increased. However, as we pay about $80,000,000 per annum to foreign
vessels for the transportation to a market of our surplus products, thus
increasing the balance of trade against us to this amount, the subject
is one worthy of your serious consideration.

"Cheap transportation" is a subject that has attracted the attention of
both producers and consumers for the past few years, and has contributed
to, if it has not been the direct cause of, the recent panic and
stringency.

As Congress, at its last session, appointed a special committee to
investigate this whole subject during the vacation and report at this
session, I have nothing to recommend until their report is read.

There is one work, however, of a national character, in which the
greater portion of the East and the West, the North and the South, are
equally interested, to which I will invite your attention.

The State of New York has a canal connecting Lake Erie with tide water
on the Hudson River. The State of Illinois has a similar work connecting
Lake Michigan with navigable water on the Illinois River, thus making
water communication inland between the East and the West and South.
These great artificial water courses are the property of the States
through which they pass, and pay toll to those States. Would it not be
wise statesmanship to pledge these States that if they will open these
canals for the passage of large vessels the General Government will look
after and keep in navigable condition the great public highways with
which they connect, to wit, the Overslaugh on the Hudson, the St. Clair
Flats, and the Illinois and Mississippi rivers? This would be a national
work; one of great value to the producers of the West and South in
giving them cheap transportation for their produce to the seaboard and a
market, and to the consumers in the East in giving them cheaper food,
particularly of those articles of food which do not find a foreign
market, and the prices of which, therefore, are not regulated by foreign
demands. The advantages of such a work are too obvious for argument. I
submit the subject to you, therefore, without further comment.

In attempting to regain our lost commerce and carrying trade I have
heretofore called attention to the States south of us offering a field
where much might be accomplished. To further this object I suggest that
a small appropriation be made, accompanied with authority for the
Secretary of the Navy to fit out a naval vessel to ascend the Amazon
River to the mouth of the Madeira; thence to explore that river and its
tributaries into Bolivia, and to report to Congress at its next session,
or as soon as practicable, the accessibility of the country by water,
its resources, and the population so reached. Such an exploration would
cost but little; it can do no harm, and may result in establishing a
trade of value to both nations.

In further connection with the Treasury Department I would recommend a
revision and codification of the tariff laws and the opening of more
mints for coining money, with authority to coin for such nations as may
apply.

WAR DEPARTMENT.

The attention of Congress is invited to the recommendations contained in
the report of the Secretary of War herewith accompanying.

The apparent great cost of supporting the Army is fully explained by
this report, and I hope will receive your attention.

While inviting your general attention to all the recommendations made by
the Secretary of War, there are two which I would especially invite you
to consider: First, the importance of preparing for war in time of peace
by providing proper armament for our seacoast defenses. Proper armament
is of vastly more importance than fortifications. The latter can be
supplied very speedily for temporary purposes when needed; the former
can not. The second is the necessity of reopening promotion in the staff
corps of the Army. Particularly is this necessity felt in the Medical,
Pay, and Ordnance departments.

At this time it is necessary to employ "contract surgeons" to supply the
necessary medical attendance required by the Army.

With the present force of the Pay Department it is now difficult to make
the payments to troops provided for by law. Long delays in payments are
productive of desertions and other demoralization, and the law prohibits
the payment of troops by other than regular army paymasters.

There are now sixteen vacancies in the Ordnance Department, thus leaving
that branch of the service without sufficient officers to conduct the
business of the different arsenals on a large scale if ever required.

NAVY DEPARTMENT.

During the past year our Navy has been depleted by the sale of some
vessels no longer fit for naval service and by the condemnation of
others not yet disposed of. This, however, has been more than
compensated for by the repair of six of the old wooden ships and by the
building of eight new sloops of war, authorized by the last Congress.
The building of these latter has occurred at a doubly fortunate time.
They are about being completed at a time when they may possibly be much
needed, and the work upon them has not only given direct employment to
thousands of men, but has no doubt been the means of keeping open
establishments for other work at a time of great financial distress.

Since the commencement of the last month, however, the distressing
occurrences which have taken place in the waters of the Caribbean Sea,
almost on our very seaboard, while they illustrate most forcibly the
necessity always existing that a nation situated like ours should
maintain in a state of possible efficiency a navy adequate to its
responsibilities, has at the same time demanded that all the effective
force we really have shall be put in immediate readiness for warlike
service. This has been and is being done promptly and effectively, and I
am assured that all the available ships and every authorized man of the
American Navy will be ready for whatever action is required for the
safety of our citizens or the maintenance of our honor. This, of course,
will require the expenditure in a short time of some of the
appropriations which were calculated to extend through the fiscal year,
but Congress will, I doubt not, understand and appreciate the emergency,
and will provide adequately not only for the present preparation, but
for the future maintenance of our naval force. The Secretary of the Navy
has during the past year been quietly putting some of our most effective
monitors in condition for service, and thus the exigency finds us in a
much better condition for work than we could possibly have been without
his action.

POST-OFFICE DEPARTMENT.

A complete exhibit is presented in the accompanying report of the
postmaster-General of the operations of the Post-Office Department
during the year. The ordinary postal revenues for the fiscal year ended
June 30, 1873, amounted to $22,996,741.57, and the expenditures of all
kinds to $29,084,945.67. The increase of revenues over 1872 was
$1,081,315.20, and the increase of expenditures $2,426,753.36.

Independent of the payments made from special appropriations for mail
steamship lines, the amount drawn from the General Treasury to meet
deficiencies was $5,265,475. The constant and rapid extension of our
postal service, particularly upon railways, and the improved facilities
for the collection, transmission, distribution, and delivery of the
mails which are constantly being provided account for the increased
expenditures of this popular branch of the public service.

The total number of post-offices in operation on June 30, 1873, was
33,244, a net increase of 1,381 over the number reported the preceding
year. The number of Presidential offices was 1,363, an increase of 163
during the year. The total length of railroad mail routes at the close
of the year was 63,457 miles, an increase of 5,546 miles over the year
1872. Fifty-nine railway post-office lines were in operation June 30,
1873, extending over 14,866 miles of railroad routes and performing an
aggregate service of 34,925 miles daily.

The number of letters exchanged with foreign countries was 27,459,185,
an increase of 3,096,685 over the previous year, and the postage thereon
amounted to $2,021,310.86. The total weight of correspondence exchanged
in the mails with European countries exceeded 912 tons, an increase of
92 tons over the previous year. The total cost of the United States
ocean steamship service, including $725,000 paid from special
appropriations to subsidized lines of mail steamers, was $1,047,271.35.

New or additional postal conventions have been concluded with Sweden,
Norway, Belgium, Germany, Canada, Newfoundland, and Japan, reducing
postage rates on correspondence exchanged with those countries; and
further efforts have been made to conclude a satisfactory postal
convention with France, but without success.

I invite the favorable consideration of Congress to the suggestions and
recommendations of the Postmaster-General for an extension of the
free-delivery system in all cities having a population of not less than
10,000; for the prepayment of postage on newspapers and other printed
matter of the second class; for a uniform postage and limit of weight on
miscellaneous matter; for adjusting the compensation of all postmasters
not appointed by the President, by the old method of commissions on the
actual receipts of the office, instead of the present mode of fixing the
salary in advance upon special returns; and especially do I urge
favorable action by Congress on the important recommendations of the
Postmaster-General for the establishment of United States postal savings
depositories.

Your attention is also again called to a consideration of the question
of postal telegraphs and the arguments adduced in support thereof, in
the hope that you may take such action in connection therewith as in
your judgment will most contribute to the best interests of the country.

DEPARTMENT OF JUSTICE.

Affairs in Utah require your early and special attention. The Supreme
Court of the United States, in the case of Clinton vs. Englebrecht,
decided that the United States marshal of that Territory could not
lawfully summon jurors for the district courts; and those courts hold
that the Territorial marshal can not lawfully perform that duty, because
he is elected by the legislative assembly, and not appointed as provided
for in the act organizing the Territory. All proceedings at law are
practically abolished by these decisions, and there have been but few or
no jury trials in the district courts of that Territory since the last
session of Congress. Property is left without protection by the courts,
and crimes go unpunished. To prevent anarchy there it is absolutely
necessary that Congress provide the courts with some mode of obtaining
jurors, and I recommend legislation to that end, and also that the
probate courts of the Territory, now assuming to issue writs of
injunction and habeas corpus and to try criminal cases and questions as
to land titles, be denied all jurisdiction not possessed ordinarily by
courts of that description.

I have become impressed with the belief that the act approved March 2,
1867, entitled "An act to establish a uniform system of bankruptcy
throughout the United States," is productive of more evil than good at
this time. Many considerations might be urged for its total repeal, but,
if this is not considered advisable, I think it will not be seriously
questioned that those portions of said act providing for what is called
involuntary bankruptcy operate to increase the financial embarrassments
of the country. Careful and prudent men very often become involved in
debt in the transaction of their business, and though they may possess
ample property, if it could be made available for that purpose, to meet
all their liabilities, yet, on account of the extraordinary scarcity of
money, they may be unable to meet all their pecuniary obligations as
they become due, in consequence of which they are liable to be
prostrated in their business by proceedings in bankruptcy at the
instance of unrelenting creditors. People are now so easily alarmed as
to monetary matters that the mere filing of a petition in bankruptcy by
an unfriendly creditor will necessarily embarrass, and oftentimes
accomplish the financial ruin, of a responsible business man. Those who
otherwise might make lawful and just arrangements to relieve themselves
from difficulties produced by the present stringency in money are
prevented by their constant exposure to attack and disappointment by
proceedings against them in bankruptcy, and, besides, the law is made
use of in many cases by obdurate creditors to frighten or force debtors
into a compliance with their wishes and into acts of injustice to other
creditors and to themselves. I recommend that so much of said act as
provides for involuntary bankruptcy on account of the suspension of
payment be repealed.

Your careful attention is invited to the subject of claims against the
Government and to the facilities afforded by existing laws for their
prosecution. Each of the Departments of State, Treasury, and War has
demands for many millions of dollars upon its files, and they are
rapidly accumulating. To these may be added those now pending before
Congress, the Court of Claims, and the Southern Claims Commission,
making in the aggregate an immense sum. Most of these grow out of the
rebellion, and are intended to indemnify persons on both sides for their
losses during the war; and not a few of them are fabricated and
supported by false testimony. Projects are on foot, it is believed, to
induce Congress to provide for new classes of claims, and to revive old
ones through the repeal or modification of the statute of limitations,
by which they are now barred. I presume these schemes, if proposed, will
be received with little favor by Congress, and I recommend that persons
having claims against the United States cognizable by any tribunal or
Department thereof be required to present them at an early day, and that
legislation be directed as far as practicable to the defeat of unfounded
and unjust demands upon the Government; and I would suggest, as a means
of preventing fraud, that witnesses be called upon to appear in person
to testify before those tribunals having said claims before them for
adjudication. Probably the largest saving to the National Treasury can
be secured by timely legislation on these subjects of any of the
economic measures that will be proposed.

You will be advised of the operations of the Department of Justice by
the report of the Attorney-General, and I invite your attention to the
amendments of existing laws suggested by him, with the view of reducing
the expenses of that Department.

DEPARTMENT OF THE INTERIOR.

The policy inaugurated toward the Indians at the beginning of the last
Administration has been steadily pursued, and, I believe, with
beneficial results. It will be continued with only such modifications as
time and experience may demonstrate as necessary.

With the encroachment of civilization upon the Indian reservations and
hunting grounds, disturbances have taken place between the Indians and
whites during the past year, and probably will continue to do so until
each race appreciates that the other has rights which must be respected.

The policy has been to collect the Indians as rapidly as possible on
reservations, and as far as practicable within what is known as the
Indian Territory, and to teach them the arts of civilization and
self-support. Where found off their reservations, and endangering the
peace and safety of the whites, they have been punished, and will
continue to be for like offenses.

The Indian Territory south of Kansas and west of Arkansas is sufficient
in area and agricultural resources to support all the Indians east of
the Rocky Mountains. In time, no doubt, all of them, except a few who
may elect to make their homes among white people, will be collected
there. As a preparatory step for this consummation, I am now satisfied
that a Territorial form of government should be given them, which will
secure the treaty rights of the original settlers and protect their
homesteads from alienation for a period of twenty years.

The operations of the Patent Office are growing to such a magnitude and
the accumulation of material is becoming so great that the necessity of
more room is becoming more obvious day by day. I respectfully invite
your attention to the reports of the Secretary of the Interior and
Commissioner of Patents on this subject.

The business of the General Land Office exhibits a material increase in
all its branches during the last fiscal year. During that time there
were disposed of out of the public lands 13,030,606 acres, being an
amount greater by 1,165,631 acres than was disposed of during the
preceding year. Of the amount disposed of, 1,626,266 acres were sold for
cash, 214,940 acres were located with military land warrants, 3,793,612
acres were taken for homesteads, 653,446 acres were located with
agricultural-college scrip, 6,083,536 acres were certified by railroads,
76,576 acres were granted to wagon roads, 238,548 acres were approved to
States as swamp lands, 138,681 acres were certified for agricultural
colleges, common schools, universities, and seminaries, 190,775 acres
were approved to States for internal improvements, and 14,222 acres were
located with Indian scrip. The cash receipts during the same time were
$3,408,515.50, being $190,415.50 in excess of the receipts of the
previous year. During the year 30,488,132 acres of public land were
surveyed, an increase over the amount surveyed the previous year of
1,037,193 acres, and, added to the area previously surveyed, aggregates
616,554,895 acres which have been surveyed, leaving 1,218,443,505 acres
of the public land still unsurveyed.

The increased and steadily increasing facilities for reaching our
unoccupied public domain and for the transportation of surplus products
enlarge the available field for desirable homestead locations, thus
stimulating settlement and extending year by year in a gradually
increasing ratio the area of occupation and cultivation.

The expressed desire of the representatives of a large colony of
citizens of Russia to emigrate to this country, as is understood, with
the consent of their Government, if certain concessions can be made to
enable them to settle in a compact colony, is of great interest, as
going to show the light in which our institutions are regarded by an
industrious, intelligent, and wealthy people, desirous of enjoying civil
and religious liberty; and the acquisition of so large an immigration of
citizens of a superior class would without doubt be of substantial
benefit to the country. I invite attention to the suggestion of the
Secretary of the Interior in this behalf.

There was paid during the last fiscal year for pensions, including the
expense of disbursement, $29,185,289.62, being an amount less by
$984,050.98 than was expended for the same purpose the preceding year.
Although this statement of expenditures would indicate a material
reduction in amount compared with the preceding year, it is believed
that the changes in the pension laws at the last session of Congress
will absorb that amount the current year. At the close of the last
fiscal year there were on the pension rolls 99,804 invalid military
pensioners and 112,088 widows, orphans, and dependent relatives of
deceased soldiers, making a total of that class of 211,892; 18,266
survivors of the War of 1812 and 5,058 widows of soldiers of that war
pensioned under the act of Congress of February 14, 1871, making a total
of that class of 23,319; 1,480 invalid navy pensioners and 1,770 widows,
orphans, and dependent relatives of deceased officers, sailors, and
marines of the Navy, making a total of navy pensioners of 3,200, and a
grand total of pensioners of 311 classes of 238,411, showing a net
increase during the last fiscal year of 6,182. During the last year the
names of 16,405 pensioners were added to the rolls, and 10,223 names
were dropped therefrom for various causes.

The system adopted for the detection of frauds against the Government in
the matter of pensions has been productive of satisfactory results, but
legislation is needed to provide, if possible, against the perpetration
of such frauds in future.

The evidently increasing interest in the cause of education is a most
encouraging feature in the general progress and prosperity of the
country, and the Bureau of Education is earnest in its efforts to give
proper direction to the new appliances and increased facilities which
are being offered to aid the educators of the country in their great
work.

The Ninth Census has been completed, the report thereof published and
distributed, and the working force of the Bureau disbanded. The
Secretary of the Interior renews his recommendation for a census to be
taken in 1875, to which subject the attention of Congress is invited.
The original suggestion in that behalf has met with the general approval
of the country; and even if it be not deemed advisable at present to
provide for a regular quinquennial census, a census taken in 1875, the
report of which could be completed and published before the one
hundredth anniversary of our national independence, would be especially
interesting and valuable, as showing the progress of the country during
the first century of our national existence. It is believed, however,
that a regular census every five years would be of substantial benefit
to the country, inasmuch as our growth hitherto has been so rapid that
the results of the decennial census are necessarily unreliable as a
basis of estimates for the latter years of a decennial period.

DISTRICT OF COLUMBIA.

Under the very efficient management of the governor and the board of
public works of this District the city of Washington is rapidly assuming
the appearance of a capital of which the nation may well be proud. From
being a most unsightly place three years ago, disagreeable to pass
through in summer in consequence of the dust arising from unpaved
streets, and almost impassable in the winter from the mud, it is now one
of the most sightly cities in the country, and can boast of being the
best paved.

The work has been done systematically, the plans, grades, location of
sewers, water and gas mains being determined upon before the work was
commenced, thus securing permanency when completed. I question whether
so much has ever been accomplished before in any American city for the
same expenditures. The Government having large reservations in the city,
and the nation at large having an interest in their capital, I recommend
a liberal policy toward the District of Columbia, and that the
Government should bear its just share of the expense of these
improvements. Every citizen visiting the capital feels a pride in its
growing beauty, and that he too is part owner in the investments made
here.

I would suggest to Congress the propriety of promoting the establishment
in this District of an institution of learning, or university of the
highest class, by the donation of lands. There is no place better suited
for such an institution than the national capital. There is no other
place in which every citizen is so directly interested.

CIVIL-SERVICE REFORM.

In three successive messages to Congress I have called attention to the
subject of "civil-service reform."

Action has been taken so far as to authorize the appointment of a board
to devise rules governing methods of making appointments and promotions,
but there never has been any action making these rules, or any rules,
binding, or even entitled to observance, where persons desire the
appointment of a friend or the removal of an official who may be
disagreeable to them.

To have any rules effective they must have the acquiescence of Congress
as well as of the Executive. I commend, therefore, the subject to your
attention, and suggest that a special committee of Congress might confer
with the Civil-Service Board during the present session for the purpose
of devising such rules as can be maintained, and which will secure the
services of honest and capable officials, and which will also protect
them in a degree of independence while in office.

Proper rules will protect Congress, as well as the Executive, from much
needless persecution, and will prove of great value to the public at
large.

I would recommend for your favorable consideration the passage of an
enabling act for the admission of Colorado as a State in the Union. It
possesses all the elements of a prosperous State, agricultural and
mineral, and, I believe, has a population now to justify such admission.
In connection with this I would also recommend the encouragement of a
canal for purposes of irrigation from the eastern slope of the Rocky
Mountains to the Missouri River. As a rule I am opposed to further
donations of public lands for internal improvements owned and controlled
by private corporations, but in this instance I would make an exception.
Between the Missouri River and the Rocky Mountains there is an arid belt
of public land from 300 to 500 miles in width, perfectly valueless for
the occupation of man, for the want of sufficient rain to secure the
growth of any product. An irrigating canal would make productive a belt
as wide as the supply of water could be made to spread over across this
entire country, and would secure a cordon of settlements connecting the
present population of the mountain and mining regions with that of the
older States. All the land reclaimed would be clear gain. If alternate
sections are retained by the Government, I would suggest that the
retained sections be thrown open to entry under the homestead laws, or
sold to actual settlers for a very low price.

I renew my previous recommendation to Congress for general amnesty. The
number engaged in the late rebellion yet laboring under disabilities is
very small, but enough to keep up a constant irritation. No possible
danger can accrue to the Government by restoring them to eligibility to
hold office.

I suggest for your consideration the enactment of a law to better secure
the civil rights which freedom should secure, but has not effectually
secured, to the enfranchised slave.

U. S. GRANT

***

State of the Union Address
Ulysses S. Grant
December 7, 1874

To the Senate and House of Representatives:

Since the convening of Congress one year ago the nation has undergone a
prostration in business and industries such as has not been witnessed
with us for many years. Speculation as to the causes for this
prostration might be indulged in without profit, because as many
theories would be advanced as there would be independent writers--those
who expressed their own views without borrowing--upon the subject.
Without indulging in theories as to the cause of this prostration,
therefore, I will call your attention only to the fact, and to some
plain questions as to which it would seem there should be no
disagreement.

During this prostration two essential elements of prosperity have been
most abundant--labor and capital. Both have been largely unemployed.
Where security has been undoubted, capital has been attainable at very
moderate rates. Where labor has been wanted, it has been found in
abundance, at cheap rates compared with what--of necessaries and
comforts of life--could be purchased with the wages demanded. Two great
elements of prosperity, therefore, have not been denied us. A third
might be added: Our soil and climate are unequaled, within the limits of
any contiguous territory under one nationality, for its variety of
products to feed and clothe a people and in the amount of surplus to
spare to feed less favored peoples. Therefore, with these facts in view,
it seems to me that wise statesmanship, at this session of Congress,
would dictate legislation ignoring the past; directing in proper
channels these great elements of prosperity to any people. Debt, debt
abroad, is the only element that can, with always a sound currency,
enter into our affairs to cause any continued depression in the
industries and prosperity of our people.

A great conflict for national existence made necessary, for temporary
purposes, the raising of large sums of money from whatever source
attainable. It made it necessary, in the wisdom of Congress--and I do
not doubt their wisdom in the premises, regarding the necessity of the
times--to devise a system of national currency which it proved to be
impossible to keep on a par with the recognized currency of the
civilized world. This begot a spirit of speculation involving an
extravagance and luxury not required for the happiness or prosperity of
a people, and involving, both directly and indirectly, foreign
indebtedness. The currency, being of fluctuating value, and therefore
unsafe to hold for legitimate transactions requiring money, became a
subject of speculation within itself. These two causes, however, have
involved us in a foreign indebtedness, contracted in good faith by
borrower and lender, which should be paid in coin, and according to the
bond agreed upon when the debt was contracted--gold or its equivalent.
The good faith of the Government can not be violated toward creditors
without national disgrace. But our commerce should be encouraged;
American shipbuilding and carrying capacity increased; foreign markets
sought for products of the soil and manufactories, to the end that we
may be able to pay these debts. Where a new market can be created for
the sale of our products, either of the soil, the mine, or the
manufactory, a new means is discovered of utilizing our idle capital and
labor to the advantage of the whole people. But, in my judgment, the
first step toward accomplishing this object is to secure a currency of
fixed, stable value; a currency good wherever civilization reigns; one
which, if it becomes superabundant with one people, will find a market
with some other; a currency which has as its basis the labor necessary
to produce it, which will give to it its value. Gold and silver are now
the recognized medium of exchange the civilized world over, and to this
we should return with the least practicable delay. In view of the
pledges of the American Congress when our present legal-tender system
was adopted, and debt contracted, there should be no delay--certainly no
unnecessary delay--in fixing by legislation a method by which we will
return to specie. To the accomplishment of this end I invite your
special attention. I believe firmly that there can be no prosperous and
permanent revival of business and industries until a policy is
adopted--with legislation to carry it out--looking to a return to a
specie basis. It is easy to conceive that the debtor and speculative
classes may think it of value to them to make so-called money abundant
until they can throw a portion of their burdens upon others. But even
these, I believe, would be disappointed in the result if a course should
be pursued which will keep in doubt the value of the legal-tender medium
of exchange. A revival of productive industry is needed by all classes;
by none more than the holders of property, of whatever sort, with debts
to liquidate from realization upon its sale. But admitting that these
two classes of citizens are to be benefited by expansion, would it be
honest to give it? Would not the general loss be too great to justify
such relief? Would it not be just as honest and prudent to authorize
each debtor to issue his own legal-tenders to the extent of his
liabilities? Than to do this, would it not be safer, for fear of
overissues by unscrupulous creditors, to say that all debt obligations
are obliterated in the United States, and now we commence anew, each
possessing all he has at the time free from incumbrance? These
propositions are too absurd to be entertained for a moment by thinking
or honest people. Yet every delay in preparation for final resumption
partakes of this dishonesty, and is only less in degree as the hope is
held out that a convenient season will at last arrive for the good work
of redeeming our pledges to commence. It will never come, in my opinion,
except by positive action by Congress, or by national disasters which
will destroy, for a time at least, the credit of the individual and the
State at large. A sound currency might be reached by total bankruptcy
and discredit of the integrity of the nation and of individuals. I
believe it is in the power of Congress at this session to devise such
legislation as will renew confidence, revive all the industries, start
us on a career of prosperity to last for many years and to save the
credit of the nation and of the people. Steps toward the return to a
specie basis are the great requisites to this devoutly to be sought for
end. There are others which I may touch upon hereafter.

A nation dealing in a currency below that of specie in value labors
under two great disadvantages: First, having no use for the world's
acknowledged medium of exchange, gold and silver, these are driven out
of the country because there is no need for their use; second, the
medium of exchange in use being of a fluctuating value--for, after all,
it is only worth just what it will purchase of gold and silver, metals
having an intrinsic value just in proportion to the honest labor it
takes to produce them--a larger margin must be allowed for profit by the
manufacturer and producer. It is months from the date of production to
the date of realization. Interest upon capital must be charged, and risk
of fluctuation in the value of that which is to be received in payment
added. Hence high prices, acting as a protection to the foreign
producer, who receives nothing in exchange for the products of his skill
and labor except a currency good, at a stable value, the world over It
seems to me that nothing is clearer than that the greater part of the
burden of existing prostration, for the want of a sound financial
system, falls upon the working man, who must after all produce the
wealth, and the salaried man, who superintends and conducts business.
The burden falls upon them in two ways--by the deprivation of employment
and by the decreased purchasing power of their salaries. It is the duty
of Congress to devise the method of correcting the evils which are
acknowledged to exist, and not mine. But I will venture to suggest two
or three things which seem to me as absolutely necessary to a return to
specie payments, the first great requisite in a return to prosperity.
The legal-tender clause to the law authorizing the issue of currency by
the National Government should be repealed, to take effect as to all
contracts entered into after a day fixed in the repealing act--not to
apply, however, to payments of salaries by Government, or for other
expenditures now provided by law to be paid in currency, in the interval
pending between repeal and final resumption. Provision should be made by
which the Secretary of the Treasury can obtain gold as it may become
necessary from time to time from the date when specie redemption
commences. To this might and should be added a revenue sufficiently in
excess of expenses to insure an accumulation of gold in the Treasury to
sustain permanent redemption.

I commend this subject to your careful consideration, believing that a
favorable solution is attainable, and if reached by this Congress that
the present and future generations will ever gratefully remember it as
their deliverer from a thraldom of evil and disgrace.

With resumption, free banking may be authorized with safety, giving the
same full protection to bill holders which they have under existing
laws. Indeed, I would regard free banking as essential. It would give
proper elasticity to the currency. As more currency should be required
for the transaction of legitimate business, new banks would be started,
and in turn banks would wind up their business when it was found that
there was a superabundance of currency. The experience and judgment of
the people can best decide just how much currency is required for the
transaction of the business of the country. It is unsafe to leave the
settlement of this question to Congress, the Secretary of the Treasury,
or the Executive. Congress should make the regulation under which banks
may exist, but should not make banking a monopoly by limiting the amount
of redeemable paper currency that shall be authorized. Such importance
do I attach to this subject, and so earnestly do I commend it to your
attention, that I give it prominence by introducing it at the beginning
of this message.

During the past year nothing has occurred to disturb the general
friendly and cordial relations of the United States with other powers.

The correspondence submitted herewith between this Government and its
diplomatic representatives, as also with the representatives of other
countries, shows a satisfactory condition of all questions between the
United States and the most of those countries, and with few exceptions,
to which reference is hereafter made, the absence of any points of
difference to be adjusted.

The notice directed by the resolution of Congress of June 17, 1874, to
be given to terminate the convention of July 17, 1858, between the
United States and Belgium has been given, and the treaty will
accordingly terminate on the 1st day of July, 1875. This convention
secured to certain Belgian vessels entering the ports of the United
States exceptional privileges which are not accorded to our own vessels.
Other features of the convention have proved satisfactory, and have
tended to the cultivation of mutually beneficial commercial intercourse
and friendly relations between the two countries. I hope that
negotiations which have been invited will result in the celebration of
another treaty which may tend to the interests of both countries.

Our relations with China continue to be friendly. During the past year
the fear of hostilities between China and Japan, growing out of the
landing of an armed force upon the island of Formosa by the latter, has
occasioned uneasiness. It is earnestly hoped, however, that the
difficulties arising from this cause will be adjusted, and that the
advance of civilization in these Empires may not be retarded by a state
of war. In consequence of the part taken by certain citizens of the
United States in this expedition, our representatives in those countries
have been instructed to impress upon the Governments of China and Japan
the firm intention of this country to maintain strict neutrality in the
event of hostilities, and to carefully prevent any infraction of law on
the part of our citizens.

In connection with this subject I call the attention of Congress to a
generally conceded fact--that the great proportion of the Chinese
immigrants who come to our shores do not come voluntarily, to make their
homes with us and their labor productive of general prosperity, but come
under contracts with headmen, who own them almost absolutely. In a worse
form does this apply to Chinese women. Hardly a perceptible percentage
of them perform any honorable labor, but they are brought for shameful
purposes, to the disgrace of the communities where settled and to the
great demoralization of the youth of those localities. If this evil
practice can be legislated against, it will be my pleasure as well as
duty to enforce any regulation to secure so desirable an end.

It is hoped that negotiations between the Government of Japan and the
treaty powers, looking to the further opening of the Empire and to the
removal of various restrictions upon trade and travel, may soon produce
the results desired, which can not fail to inure to the benefit of all
the parties. Having on previous occasions submitted to the consideration
of Congress the propriety of the release of the Japanese Government from
the further payment of the indemnity under the convention of October 22,
1864, and as no action had been taken thereon, it became my duty to
regard the obligations of the convention as in force; and as the other
powers interested had received their portion of the indemnity in full,
the minister of the United States in Japan has, in behalf of this
Government, received the remainder of the amount due to the United
States under the convention of Simonosaki. I submit the propriety of
applying the income of a part, if not of the whole, of this fund to the
education in the Japanese language of a number of young men to be under
obligations to serve the Government for a specified time as interpreters
at the legation and the consulates in Japan. A limited number of
Japanese youths might at the same time be educated in our own
vernacular, and mutual benefits would result to both Governments. The
importance of having our own citizens, competent and familiar with the
language of Japan, to act as interpreters and in other capacities
connected with the legation and the consulates in that country can not
readily be overestimated.

The amount awarded to the Government of Great Britain by the mixed
commission organized under the provisions of the treaty of Washington in
settlement of the claims of British subjects arising from acts committed
between April 13, 1861, and April 9, 1865, became payable, under the
terms of the treaty, within the past year, and was paid upon the 21st
day of September, 1874. In this connection I renew my recommendation,
made at the opening of the last session of Congress, that a special
court be created to hear and determine all claims of aliens against the
United States arising from acts committed against their persons or
property during the insurrection. It appears equitable that opportunity
should be offered to citizens of other states to present their claims,
as well as to those British subjects whose claims were not admissible
under the late commission, to the early decision of some competent
tribunal. To this end I recommend the necessary legislation to organize
a court to dispose of all claims of aliens of the nature referred to in
an equitable and satisfactory manner, and to relieve Congress and the
Departments from the consideration of these questions.

The legislation necessary to extend to the colony of Newfoundland
certain articles of the treaty of Washington of the 8th day of May,
1871, having been had, a protocol to that effect was signed in behalf of
the United States and of Great Britain on the 28th day of May last, and
was duly proclaimed on the following day. A copy of the proclamation is
submitted herewith.

A copy of the report of the commissioner appointed under the act of
March 19, 1872, for surveying and marking the boundary between the
United States and the British possessions from the Lake of the Woods to
the summit of the Rocky Mountains is herewith transmitted. I am happy to
announce that the field work of the commission has been completed, and
the entire line from the northwest corner of the Lake of the Woods to
the summit of the Rocky Mountains has been run and marked upon the
surface of the earth. It is believed that the amount remaining
unexpended of the appropriation made at the last session of Congress
will be sufficient to complete the office work. I recommend that the
authority of Congress be given to the use of the unexpended balance of
the appropriation in the completion of the work of the commission in
making its report and preparing the necessary maps.

The court known as the Court of Commissioners of Alabama Claims, created
by an act of Congress of the last session, has organized and commenced
its work, and it is to be hoped that the claims admissible under the
provisions of the act may be speedily ascertained and paid.

It has been deemed advisable to exercise the discretion conferred upon
the Executive at the last session by accepting the conditions required
by the Government of Turkey for the privilege of allowing citizens of
the United States to hold real estate in the former country, and by
assenting to a certain change in the jurisdiction of courts in the
latter. A copy of the proclamation upon these subjects is herewith
communicated.

There has been no material change in our relations with the independent
States of this hemisphere which were formerly under the dominion of
Spain. Marauding on the frontiers between Mexico and Texas still
frequently takes place, despite the vigilance of the civil and military
authorities in that quarter. The difficulty of checking such trespasses
along the course of a river of such length as the Rio Grande, and so
often fordable, is obvious. It is hoped that the efforts of this
Government will be seconded by those of Mexico to the effectual
suppression of these acts of wrong.

From a report upon the condition of the business before the American and
Mexican Joint Claims Commission, made by the agent on the part of the
United States, and dated October 28, 1874, it appears that of the 1,017
claims filed on the part of citizens of the United States, 483 had been
finally decided and 75 were in the hands of the umpire, leaving 462 to
be disposed of; and of the 998 claims filed against the United States,
726 had been finally decided, I was before the umpire, and 271 remained
to be disposed of. Since the date of such report other claims have been
disposed of, reducing somewhat the number still pending; and others have
been passed upon by the arbitrators. It has become apparent, in view of
these figures and of the fact that the work devolving on the umpire is
particularly laborious, that the commission will be unable to dispose of
the entire number of claims pending prior to the 1st day of February,
1875--the date fixed for its expiration. Negotiations are pending
looking to the securing of the results of the decisions which have been
reached and to a further extension of the commission for a limited time,
which it is confidently hoped will suffice to bring all the business now
before it to a final close.

The strife in the Argentine Republic is to be deplored, both on account
of the parties thereto and from the probable effects on the interests of
those engaged in the trade to that quarter, of whom the United States
are among the principal. As yet, so far as I am aware, there has been no
violation of our neutrality rights, which, as well as our duties in that
respect, it shall be my endeavor to maintain and observe.

It is with regret I announce that no further payment has been received
from the Government of Venezuela on account of awards in favor of
citizens of the United States. Hopes have been entertained that if that
Republic could escape both foreign and civil war for a few years its
great natural resources would enable it to honor its obligations. Though
it is now understood to be at peace with other countries, a serious
insurrection is reported to be in progress in an important region of
that Republic. This may be taken advantage of as another reason to delay
the payment of the dues of our citizens.

The deplorable strife in Cuba continues without any marked change in the
relative advantages of the contending forces. The insurrection
continues, but Spain has gained no superiority. Six years of strife give
to the insurrection a significance which can not be denied. Its duration
and the tenacity of its adherence, together with the absence of
manifested power of suppression on the part of Spain, can not be
controverted, and may make some positive steps on the part of other
powers a matter of self-necessity. I had confidently hoped at this time
to be able to announce the arrangement of some of the important
questions between this Government and that of Spain, but the
negotiations have been protracted. The unhappy intestine dissensions of
Spain command our profound sympathy, and must be accepted as perhaps a
cause of some delay. An early settlement, in part at least, of the
questions between the Governments is hoped. In the meantime, awaiting
the results of immediately pending negotiations, I defer a further and
fuller communication on the subject of the relations of this country and
Spain.

I have again to call the attention of Congress to the unsatisfactory
condition of the existing laws with reference to expatriation and the
election of nationality. Formerly, amid conflicting opinions and
decisions, it was difficult to exactly determine how far the doctrine of
perpetual allegiance was applicable to citizens of the United States.
Congress by the act of the 27th of July, 1868, asserted the abstract
right of expatriation as a fundamental principle of this Government.
Notwithstanding such assertion and the necessity of frequent application
of the principle, no legislation has been had defining what acts or
formalities shall work expatriation or when a citizen shall be deemed to
have renounced or to have lost his citizenship. The importance of such
definition is obvious. The representatives of the United States in
foreign countries are continually called upon to lend their aid and the
protection of the United States to persons concerning the good faith or
the reality of whose citizenship there is at least great question. In
some cases the provisions of the treaties furnish some guide; in others
it seems left to the person claiming the benefits of citizenship, while
living in a foreign country, contributing in no manner to the
performance of the duties of a citizen of the United States, and without
intention at any time to return and undertake those duties, to use the
claims to citizenship of the United States simply as a shield from the
performance of the obligations of a citizen elsewhere.

The status of children born of American parents residing in a foreign
country, of American women who have married aliens, of American citizens
residing abroad where such question is not regulated by treaty, are all
sources of frequent difficulty and discussion. Legislation on these and
similar questions, and particularly defining when and under what
circumstances expatriation can be accomplished or is to be presumed, is
especially needed. In this connection I earnestly call the attention of
Congress to the difficulties arising from fraudulent naturalization. The
United States wisely, freely, and liberally offers its citizenship to
all who may come in good faith to reside within its limits on their
complying with certain prescribed reasonable and simple formalities and
conditions. Among the highest duties of the Government is that to afford
firm, sufficient, and equal protection to all its citizens, whether
native born or naturalized. Care should be taken that a right carrying
with it such support from the Government should not be fraudulently
obtained, and should be bestowed only upon full proof of a compliance
with the law; and yet frequent instances are brought to the attention of
the Government of illegal and fraudulent naturalization and of the
unauthorized use of certificates thus improperly obtained. In some cases
the fraudulent character of the naturalization has appeared upon the
face of the certificate itself; in others examination discloses that the
holder had not complied with the law, and in others certificates have
been obtained where the persons holding them not only were not entitled
to be naturalized, but had not even been within the United States at the
time of the pretended naturalization. Instances of each of these classes
of fraud are discovered at our legations, where the certificates of
naturalization are presented either for the purpose of obtaining
passports or in demanding the protection of the legation. When the fraud
is apparent on the face of such certificates, they are taken up by the
representatives of the Government and forwarded to the Department of
State. But even then the record of the court in which the fraudulent
naturalization occurred remains, and duplicate certificates are readily
obtainable. Upon the presentation of these for the issue of passports or
in demanding protection of the Government, the fraud sometimes escapes
notice, and such certificates are not infrequently used in transactions
of business to the deception and injury of innocent parties. Without
placing any additional obstacles in the way of the obtainment of
citizenship by the worthy and well-intentioned foreigner who comes in
good faith to cast his lot with ours, I earnestly recommend further
legislation to punish fraudulent naturalization and to secure the ready
cancellation of the record of every naturalization made in fraud.

Since my last annual message the exchange has been made of the
ratification of treaties of extradition with Belgium, Ecuador, Peru, and
Salvador; also of a treaty of commerce and navigation with Peru, and one
of commerce and consular privileges with Salvador; all of which have
been duly proclaimed, as has also a declaration with Russia with
reference to trade-marks.

The report of the Secretary of the Treasury, which by law is made
directly to Congress, and forms no part of this message, will show the
receipts and expenditures of the Government for the last fiscal year,
the amount received from each source of revenue, and the amount paid out
for each of the Departments of Government. It will be observed from this
report that the amount of receipts over expenditures has been but
$2,344,882.30 for the fiscal year ending June 30, 1874, and that for the
current fiscal year the estimated receipts over expenditures will not
much exceed $9,000,000. In view of the large national debt existing and
the obligation to add 1 per cent per annum to the sinking fund, a sum
amounting now to over $34,000,000 per annum, I submit whether revenues
should not be increased or expenditures diminished to reach this amount
of surplus. Not to provide for the sinking fund is a partial failure to
comply with the contracts and obligations of the Government. At the last
session of Congress a very considerable reduction was made in rates of
taxation and in the number of articles submitted to taxation; the
question may well be asked, whether or not, in some instances, unwisely.
In connection with this subject, too, I venture the opinion that the
means of collecting the revenue, especially from imports, have been so
embarrassed by legislation as to make it questionable whether or not
large amounts are not lost by failure to collect, to the direct loss of
the Treasury and to the prejudice of the interests of honest importers
and taxpayers.

The Secretary of the Treasury in his report favors legislation looking
to an early return to specie payments, thus supporting views previously
expressed in this message. He also recommends economy in appropriations;
calls attention to the loss of revenue from repealing the tax on tea and
coffee, without benefit to the consumer; recommends an increase of 10
cents a gallon on whisky, and, further, that no modification be made in
the banking and currency bill passed at the last session of Congress,
unless modification should become necessary by reason of the adoption of
measures for returning to specie payments. In these recommendations I
cordially join.

I would suggest to Congress the propriety of readjusting the tariff so
as to increase the revenue, and at the same time decrease the number of
articles upon which duties are levied. Those articles which enter into
our manufactures and are not produced at home, it seems to me, should be
entered free. Those articles of manufacture which we produce a
constituent part of, but do not produce the whole, that part which we do
not produce should enter free also. I will instance fine wool, dyes,
etc. These articles must be imported to form a part of the manufacture
of the higher grades of woolen goods. Chemicals used as dyes, compounded
in medicines, and used in various ways in manufactures come under this
class. The introduction free of duty of such wools as we do not produce
would stimulate the manufacture of goods requiring the use of those we
do produce, and therefore would be a benefit to home production. There
are many articles entering into "home manufactures" which we do not
produce ourselves the tariff upon which increases the cost of producing
the manufactured article. All corrections in this regard are in the
direction of bringing labor and capital in harmony with each other and
of supplying one of the elements of prosperity so much needed.

The report of the Secretary of War herewith attached, and forming a part
of this message, gives all the information concerning the operations,
wants, and necessities of the Army, and contains many suggestions and
recommendations which I commend to your special attention.

There is no class of Government employees who are harder worked than the
Army--officers and men; none who perform their tasks more cheerfully and
efficiently and under circumstances of greater privations and hardships.

Legislation is desirable to render more efficient this branch of the
public service. All the recommendations of the Secretary of War I regard
as judicious, and I especially commend to your attention the following:
The consolidation of Government arsenals; the restoration of mileage to
officers traveling under orders; the exemption of money received from
the sale of subsistence stores from being covered into the Treasury; the
use of appropriations for the purchase of subsistence stores without
waiting for the beginning of the fiscal year for which the appropriation
is made; for additional appropriations for the collection of torpedo
material; for increased appropriations for the manufacture of arms; for
relieving the various States from indebtedness for arms charged to them
during the rebellion; for dropping officers from the rolls of the Army
without trial for the offense of drawing pay more than once for the same
period; for the discouragement of the plan to pay soldiers by cheek, and
for the establishment of a professorship of rhetoric and English
literature at West Point. The reasons for these recommendations are
obvious, and are set forth sufficiently in the reports attached. I also
recommend that the status of the staff corps of the Army be fixed, where
this has not already been done, so that promotions may be made and
vacancies filled as they occur in each grade when reduced below the
number to be fixed by law. The necessity for such legislation is
specially felt now in the Pay Department. The number of officers in that
department is below the number adequate to the performance of the duties
required of them by law.

The efficiency of the Navy has been largely increased during the last
year. Under the impulse of the foreign complications which threatened us
at the commencement of the last session of Congress, most of our
efficient wooden ships were put in condition for immediate service, and
the repairs of our ironclad fleet were pushed with the utmost vigor. The
result is that most of these are now in an effective state and need only
to be manned and put in commission to go at once into service.

Some of the new sloops authorized by Congress are already in commission,
and most of the remainder are launched and wait only the completion of
their machinery to enable them to take their places as part of our
effective force.

Two iron torpedo ships have been completed during the last year, and
four of our large double-turreted ironclads are now undergoing repairs.
When these are finished, everything that is useful of our Navy, as now
authorized, will be in condition for service, and with the advance in
the science of torpedo warfare the American Navy, comparatively small as
it is, will be found at any time powerful for the purposes of a peaceful
nation.

Much has been accomplished during the year in aid of science and to
increase the sum of general knowledge and further the interests of
commerce and civilization. Extensive and much-needed soundings have been
made for hydrographic purposes and to fix the proper routes of ocean
telegraphs. Further surveys of the great Isthmus have been undertaken
and completed, and two vessels of the Navy are now employed, in
conjunction with those of England, France, Germany, and Russia, in
observations connected with the transit of Venus, so useful and
interesting to the scientific world.

The estimates for this branch of the public service do not differ
materially from those of last year, those for the general support of the
service being somewhat less and those for permanent improvements at the
various stations rather larger than the corresponding estimate made a
year ago. The regular maintenance and a steady increase in the
efficiency of this most important arm in proportion to the growth of our
maritime intercourse and interests is recommended to the attention of
Congress.

The use of the Navy in time of peace might be further utilized by a
direct authorization of the employment of naval vessels in explorations
and surveys of the supposed navigable waters of other nationalities on
this continent, especially the tributaries of the two great rivers of
South America, the Orinoco and the Amazon. Nothing prevents, under
existing laws, such exploration, except that expenditures must be made
in such expeditions beyond those usually provided for in the
appropriations. The field designated is unquestionably one of interest
and one capable of large development of commercial
interests--advantageous to the peoples reached and to those who may
establish relations with them.

Education of the people entitled to exercise the right of franchise I
regard essential to general prosperity everywhere, and especially so in
republics, where birth, education, or previous condition does not enter
into account in giving suffrage. Next to the public school, the
post-office is the great agent of education over our vast territory. The
rapidity with which new sections are being settled, thus increasing the
carrying of mails in a more rapid ratio than the increase of receipts,
is not alarming. The report of the Postmaster-General herewith attached
shows that there was an increase of revenue in his Department in 1873
over the previous year of $1,674,411, and an increase of cost of
carrying the mails and paying employees of $3,041,468.91. The report of
the Postmaster-General gives interesting statistics of his Department,
and compares them with the corresponding statistics of a year ago,
showing a growth in every branch of the Department.

A postal convention has been concluded with New South Wales, an exchange
of postal cards established with Switzerland, and the negotiations
pending for several years past with France have been terminated in a
convention with that country, which went into effect last August.

An international postal congress was convened in Berne, Switzerland, in
September last, at which the United States was represented by an officer
of the Post-Office Department of much experience and of qualification
for the position. A convention for the establishment of an international
postal union was agreed upon and signed by the delegates of the
countries represented, subject to the approval of the proper authorities
of those countries.

I respectfully direct your attention to the report of the
Postmaster-General and to his suggestions in regard to an equitable
adjustment of the question of compensation to railroads for carrying the
mails.

Your attention will be drawn to the unsettled condition of affairs in
some of the Southern States.

On the 14th of September last the governor of Louisiana called upon me,
as provided by the Constitution and laws of the United States, to aid in
suppressing domestic violence in that State. This call was made in view
of a proclamation issued on that day by D. B. Penn, claiming that he was
elected lieutenant-governor in 1872, and calling upon the militia of the
State to arm, assemble, and drive from power the usurpers, as he
designated the officers of the State government. On the next day I
issued my proclamation commanding the insurgents to disperse within five
days from the date thereof, and subsequently learned that on that day
they had taken forcible possession of the statehouse. Steps were taken
by me to support the existing and recognized State government, but
before the expiration of the five days the insurrectionary movement was
practically abandoned, and the officers of the State government, with
some minor exceptions, resumed their powers and duties. Considering that
the present State administration of Louisiana has been the only
government in that State for nearly two years; that it has been tacitly
acknowledged and acquiesced in as such by Congress, and more than once
expressly recognized by me, I regarded it as my clear duty, when legally
called upon for that purpose, to prevent its overthrow by an armed mob
under pretense of fraud and irregularity in the election of 1872. I have
heretofore called the attention of Congress to this subject, stating
that on account of the frauds and forgeries committed at said election,
and because it appears that the returns thereof were never legally
canvassed, it was impossible to tell thereby who were chosen; but from
the best sources of information at my command I have always believed
that the present State officers received a majority of the legal votes
actually cast at that election. I repeat what I said in my special
message of February 23, 1873, that in the event of no action by Congress
I must continue to recognize the government heretofore recognized by me.

I regret to say that with preparations for the late election decided
indications appeared in some localities in the Southern States of a
determination, by acts of violence and intimidation, to deprive citizens
of the freedom of the ballot because of their political opinions. Bands
of men, masked and armed, made their appearance; White Leagues and other
societies were formed; large quantities of arms and ammunition were
imported and distributed to these organizations; military drills, with
menacing demonstrations, were held, and with all these murders enough
were committed to spread terror among those whose political action was
to be suppressed, if possible, by these intolerant and criminal
proceedings. In some places colored laborers were compelled to vote
according to the wishes of their employers, under threats of discharge
if they acted otherwise; and there are too many instances in which, when
these threats were disregarded, they were remorselessly executed by
those who made them. I understand that the fifteenth amendment to the
Constitution was made to prevent this and a like state of things, and
the act of May 31, 1870, with amendments, was passed to enforce its
provisions, the object of both being to guarantee to all citizens the
right to vote and to protect them in the free enjoyment of that right.
Enjoined by the Constitution "to take care that the laws be faithfully
executed," and convinced by undoubted evidence that violations of said
act had been committed and that a widespread and flagrant disregard of
it was contemplated, the proper officers were instructed to prosecute
the offenders, and troops were stationed at convenient points to aid
these officers, if necessary, in the performance of their official
duties. Complaints are made of this interference by Federal authority;
but if said amendment and act do not provide for such interference under
the circumstances as above stated, then they are without meaning, force,
or effect, and the whole scheme of colored enfranchisement is worse than
mockery and little better than a crime. Possibly Congress may find it
due to truth and justice to ascertain, by means of a committee, whether
the alleged wrongs to colored citizens for political purposes are real
or the reports thereof were manufactured for the occasion.

The whole number of troops in the States of Louisiana, Alabama, Georgia,
Florida, South Carolina, North Carolina, Kentucky, Tennessee, Arkansas,
Mississippi, Maryland, and Virginia at the time of the election was
4,082. This embraces the garrisons of all the forts from the Delaware to
the Gulf of Mexico.

Another trouble has arisen in Arkansas. Article 13 of the constitution
of that State (which was adopted in 1868, and upon the approval of which
by Congress the State was restored to representation as one of the
States of the Union) provides in effect that before any amendments
proposed to this constitution shall become a part thereof they shall be
passed by two successive assemblies and then submitted to and ratified
by a majority of the electors of the State voting thereon. On the 11th
of May, 1874, the governor convened an extra session of the general
assembly of the State, which on the 18th of the same month passed an act
providing for a convention to frame a new constitution. Pursuant to this
act, and at an election held on the 30th of June, 1874, the convention
was approved, and delegates were chosen thereto, who assembled on the
14th of last July and framed a new constitution, the schedule of which
provided for the election of an entire new set of State officers in a
manner contrary to the then existing election laws of the State. On the
13th of October, 1874, this constitution, as therein provided, was
submitted to the people for their approval or rejection, and according
to the election returns was approved by a large majority of those
qualified to vote thereon; and at the same election persons were chosen
to fill all the State, county, and township offices. The governor
elected in 1872 for the term of four years turned over his office to the
governor chosen under the new constitution, whereupon the
lieutenant-governor, also elected in 1872 for a term of four years,
claiming to act as governor, and alleging that said proceedings by which
the new constitution was made and a new set of officers elected were
unconstitutional, illegal, and void, called upon me, as provided in
section 4, Article IV, of the Constitution, to protect the State against
domestic violence. As Congress is now investigating the political
affairs of Arkansas, I have declined to interfere.

The whole subject of Executive interference with the affairs of a State
is repugnant to public opinion, to the feelings of those who, from their
official capacity, must be used in such interposition, and to him or
those who must direct. Unless most clearly on the side of law, such
interference becomes a crime; with the law to support it, it is
condemned without a heating. I desire, therefore, that all necessity for
Executive direction in local affairs may become unnecessary and
obsolete. I invite the attention, not of Congress, but of the people of
the United States, to the causes and effects of these unhappy questions.
Is there not a disposition on one side to magnify wrongs and outrages,
and on the other side to belittle them or justify them? If public
opinion could be directed to a correct survey of what is and to rebuking
wrong and aiding the proper authorities in punishing it, a better state
of feeling would be inculcated, and the sooner we would have that peace
which would leave the States free indeed to regulate their own domestic
affairs. I believe on the part of our citizens of the Southern
States--the better part of them--there is a disposition to be law
abiding, and to do no violence either to individuals or to the laws
existing. But do they do right in ignoring the existence of violence and
bloodshed in resistance to constituted authority? I sympathize with
their prostrate condition, and would do all in my power to relieve them,
acknowledging that in some instances they have had most trying
governments to live under, and very oppressive ones in the way of
taxation for nominal improvements, not giving benefits equal to the
hardships imposed. But can they proclaim themselves entirely
irresponsible for this condition? They can not. Violence has been
rampant in some localities, and has either been justified or denied by
those who could have prevented it. The theory is even raised that there
is to be no further interference on the part of the General Government
to protect citizens within a State where the State authorities fail to
give protection. This is a great mistake. While I remain Executive all
the laws of Congress and the provisions of the Constitution, including
the recent amendments added thereto, will be enforced with rigor, but
with regret that they should have added one jot or tittle to Executive
duties or powers. Let there be fairness in the discussion of Southern
questions, the advocates of both or all political parties giving honest,
truthful reports of occurrences, condemning the wrong and upholding the
tight, and soon all will be well. Under existing conditions the negro
votes the Republican ticket because he knows his friends are of that
party. Many a good citizen votes the opposite, not because he agrees
with the great principles of state which separate parties, but because,
generally, he is opposed to negro rule. This is a most delusive cry.
Treat the negro as a citizen and a voter, as he is and must remain, and
soon parties will be divided, not on the color line, but on principle.
Then we shall have no complaint of sectional interference.

The report of the Attorney-General contains valuable recommendations
relating to the administration of justice in the courts of the United
States, to which I invite your attention.

I respectfully suggest to Congress the propriety of increasing the
number of judicial districts in the United States to eleven (the present
number being nine) and the creation of two additional judgeships. The
territory to be traversed by the circuit judges is so great and the
business of the courts so steadily increasing that it is growing more
and more impossible for them to keep up with the business requiring
their attention. Whether this would involve the necessity of adding two
more justices of the Supreme Court to the present number I submit to the
judgment of Congress.

The attention of Congress is invited to the report of the Secretary of
the Interior and to the legislation asked for by him. The domestic
interests of the people are more intimately connected with this
Department than with either of the other Departments of Government. Its
duties have been added to from time to time until they have become so
onerous that without the most perfect system and order it will be
impossible for any Secretary of the Interior to keep trace of all
official transactions having his sanction and done in his name, and for
which he is held personally responsible.

The policy adopted for the management of Indian affairs, known as the
peace policy, has been adhered to with most beneficial results. It is
confidently hoped that a few years more will relieve our frontiers from
danger of Indian depredations.

I commend the recommendation of the Secretary for the extension of the
homestead laws to the Indians and for some sort of Territorial
government for the Indian Territory. A great majority of the Indians
occupying this Territory are believed yet to be incapable of maintaining
their rights against the more civilized and enlightened white man. Any
Territorial form of government given them, therefore, should protect
them in their homes and property for a period of at least twenty years,
and before its final adoption should be ratified by a majority of those
affected.

The report of the Secretary of the Interior herewith attached gives much
interesting statistical information, which I abstain from giving an
abstract of, but refer you to the report itself.

The act of Congress providing the oath which pensioners must subscribe
to before drawing their pensions cuts off from this bounty a few
survivors of the War of 1812 residing in the Southern States. I
recommend the restoration of this bounty to all such. The number of
persons whose names would thus be restored to the list of pensioners is
not large. They are all old persons, who could have taken no part in the
rebellion, and the services for which they were awarded pensions were in
defense of the whole country.

The report of the Commissioner of Agriculture herewith contains
suggestions of much interest to the general public, and refers to the
sly approaching Centennial and the part his Department is ready to take
in it. I feel that the nation at large is interested in having this
exposition a success, and commend to Congress such action as will secure
a greater general interest in it. Already many foreign nations have
signified their intention to be represented at it, and it may be
expected that every civilized nation will be represented.

The rules adopted to improve the civil service of the Government have
been adhered to as closely as has been practicable with the opposition
with which they meet. The effect, I believe, has been beneficial on the
whole, and has tended to the elevation of the service. But it is
impracticable to maintain them without direct and positive support of
Congress. Generally the support which this reform receives is from those
who give it their support only to find fault when the rules are
apparently departed from. Removals from office without preferring
charges against parties removed are frequently cited as departures from
the rules adopted, and the retention of those against whom charges are
made by irresponsible persons and without good grounds is also often
condemned as a violation of them. Under these circumstances, therefore,
I announce that if Congress adjourns without positive legislation on the
subject of "civil-service reform" I will regard such action as a
disapproval of the system, and will abandon it, except so far as to
require examinations for certain appointees, to determine their fitness.
Competitive examinations will be abandoned.

The gentlemen who have given their services, without compensation, as
members of the board to devise rules and regulations for the government
of the civil service of the country have shown much zeal and earnestness
in their work, and to them, as well as to myself, it will be a source of
mortification if it is to be thrown away. But I repeat that it is
impossible to carry this system to a successful issue without general
approval and assistance and positive law to support it.

I have stated that three elements of prosperity to the nation--capital,
labor, skilled and unskilled, and products of the soil--still remain
with us. To direct the employment of these is a problem deserving the
most serious attention of Congress. If employment can be given to all
the labor offering itself, prosperity necessarily follows. I have
expressed the opinion, and repeat it, that the first requisite to the
accomplishment of this end is the substitution of a sound currency in
place of one of a fluctuating value. This secured, there are many
interests that might be fostered to the great profit of both labor and
capital. How to induce capital to employ labor is the question. The
subject of cheap transportation has occupied the attention of Congress.
Much new light on this question will without doubt be given by the
committee appointed by the last Congress to investigate and report upon
this subject.

A revival of shipbuilding, and particularly of iron steamship building,
is of vast importance to our national prosperity. The United States is
now paying over $100,000,000 per annum for freights and passage on
foreign ships--to be carried abroad and expended in the employment and
support of other peoples--beyond a fair percentage of what should go to
foreign vessels, estimating on the tonnage and travel of each
respectively. It is to be regretted that this disparity in the carrying
trade exists, and to correct it I would be willing to see a great
departure from the usual course of Government in supporting what might
usually be termed private enterprise. I would not suggest as a remedy
direct subsidy to American steamship lines, but I would suggest the
direct offer of ample compensation for carrying the mails between
Atlantic Seaboard cities and the Continent on American-owned and
American-built steamers, and would extend this liberality to vessels
carrying the mails to South American States and to Central America and
Mexico, and would pursue the same policy from our Pacific seaports to
foreign seaports on the Pacific. It might be demanded that vessels built
for this service should come up to a standard fixed by legislation in
tonnage, speed, and all other qualities, looking to the possibility of
Government requiring them at some time for war purposes. The right also
of taking possession of them in such emergency should be guarded.

I offer these suggestions, believing them worthy of consideration, in
all seriousness, affecting all sections and all interests alike. If
anything better can be done to direct the country into a course of
general prosperity, no one will be more ready than I to second the plan.

Forwarded herewith will be found the report of the commissioners
appointed under an act of Congress approved June 20, 1874, to wind up
the affairs of the District government. It will be seen from the report
that the net debt of the District of Columbia, less securities on hand
and available, is:

Bonded debt issued prior to July 1, 1874 - - $8,883,940.93

3.65 bonds, act of Congress June 20, 1874 - - 2,088,168.73

Certificates of the board of audit - - 4,770,558.45

- -

***

State of the Union Address
Ulysses S. Grant
December 7, 1875

To the Senate and House of Representatives:

In submitting my seventh annual message to Congress, in this centennial
year of our national existence as a free and independent people, it
affords me great pleasure to recur to the advancement that has been made
from the time of the colonies, one hundred years ago. We were then a
people numbering only 3,000,000. Now we number more than 40,000,000.
Then industries were confined almost exclusively to the tillage of the
soil. Now manufactories absorb much of the labor of the country.

Our liberties remain unimpaired; the bondmen have been freed from
slavery; we have become possessed of the respect, if not the friendship,
of all civilized nations. Our progress has been great in all the
arts--in science, agriculture, commerce, navigation, mining, mechanics,
law, medicine, etc.; and in general education the progress is likewise
encouraging. Our thirteen States have become thirty-eight, including
Colorado (which has taken the initiatory steps to become a State), and
eight Territories, including the Indian Territory and Alaska, and
excluding Colorado, making a territory extending from the Atlantic to
the Pacific. On the south we have extended to the Gulf of Mexico, and in
the west from the Mississippi to the Pacific.

One hundred years ago the cotton gin, the steamship, the railroad, the
telegraph, the reaping, sewing, and modern printing machines, and
numerous other inventions of scarcely less value to our business and
happiness were entirely unknown.

In 1776 manufactories scarcely existed even in name in all this vast
territory. In 1870 more than 2,000,000 persons were employed in
manufactories, producing more than $2,100,000,000 of products in amount
annually, nearly equal to our national debt. From nearly the whole of
the population of 1776 being engaged in the one occupation of
agriculture, in 1870 so numerous and diversified had become the
occupation of our people that less than 6,000,000 out of more than
40,000,000 were so engaged. The extraordinary effect produced in our
country by a resort to diversified occupations has built a market for
the products of fertile lands distant from the seaboard and the markets
of the world.

The American system of locating various and extensive manufactories next
to the plow and the pasture, and adding connecting railroads and
steamboats, has produced in our distant interior country a result
noticeable by the intelligent portions of all commercial nations. The
ingenuity and skill of American mechanics have been demonstrated at home
and abroad in a manner most flattering to their pride. But for the
extraordinary genius and ability of our mechanics, the achievements of
our agriculturists, manufacturers, and transporters throughout the
country would have been impossible of attainment.

The progress of the miner has also been great. Of coal our production
has small; now many millions of tons are mined annually. So with iron,
which formed scarcely an appreciable part of our products half a century
ago, we now produce more than the world consumed at the beginning of our
national existence. Lead, zinc, and copper, from being articles of
import, we may expect to be large exporters of in the near future. The
development of gold and silver mines in the United States and
Territories has not only been remarkable, but has had a large influence
upon the business of all commercial nations. Our merchants in the last
hundred years have had a success and have established a reputation for
enterprise, sagacity, progress, and integrity unsurpassed by peoples of
older nationalities. This "good name" is not confined to their homes,
but goes out upon every sea and into every port where commerce enters.
With equal pride we can point to our progress in all of the learned
professions.

As we are now about to enter upon our second centennial--commenting our
manhood as a nation--it is well to look back upon the past and study
what will be best to preserve and advance our future greatness From the
fall of Adam for his transgression to the present day no nation has ever
been free from threatened danger to its prosperity and happiness. We
should look to the dangers threatening us, and remedy them so far as
lies in our power. We are a republic whereof one man is as good as
another before the law. Under such a form of government it is of the
greatest importance that all should be possessed of education and
intelligence enough to cast a vote with a right understanding of its
meaning. A large association of ignorant men can not for any
considerable period oppose a successful resistance to tyranny and
oppression from the educated few, but will inevitably sink into
acquiescence to the will of intelligence, whether directed by the
demagogue or by priestcraft. Hence the education of the masses becomes
of the first necessity for the preservation of our institutions. They
are worth preserving, because they have secured the greatest good to the
greatest proportion of the population of any form of government yet
devised. All other forms of government approach it just in proportion to
the general diffusion of education and independence of thought and
action. As the primary step, therefore, to our advancement in all that
has marked our progress in the past century, I suggest for your earnest
consideration, and most earnestly recommend it, that a constitutional
amendment be submitted to the legislatures of the several States for
ratification, making it the duty of each of the several States to
establish and forever maintain free public schools adequate to the
education of all the children in the rudimentary branches within their
respective limits, irrespective of sex, color, birthplace, or religions;
forbidding the teaching in said schools of religious, atheistic, or
pagan tenets; and prohibiting the granting of any school funds or school
taxes, or any part thereof, either by legislative, municipal, or other
authority, for the benefit or in aid, directly or indirectly, of any
religious sect or denomination, or in aid or for the benefit of any
other object of any nature or kind whatever.

In connection with this important question I would also call your
attention to the importance of correcting an evil that, if permitted to
continue, will probably lead to great trouble in our land before the
close of the nineteenth century. It is the accumulation of vast amounts
of untaxed church property.

In 1850, I believe, the church property of the United States which paid
no tax, municipal or State, amounted to about $83,000,000. In 1860 the
amount had doubled; in 1875 it is about $1,000,000,000. By 1900, without
check, it is safe to say this property will reach a sum exceeding
$3,000,000,000. So vast a sum, receiving all the protection and benefits
of Government without bearing its proportion of the burdens and expenses
of the same, will not be looked upon acquiescently by those who have to
pay the taxes. In a growing country, where real estate enhances so
rapidly with time as in the United States, there is scarcely a limit to
the wealth that may be acquired by corporations, religious or otherwise,
if allowed to retain real estate without taxation. The contemplation of
so vast a property as here alluded to, without taxation, may lead to
sequestration without constitutional authority and through blood.

I would suggest the taxation of all property equally, whether church or
corporation, exempting only the last resting place of the dead and
possibly, with proper restrictions, church edifices.

Our relations with most of the foreign powers continue on a satisfactory
and friendly footing.

Increased intercourse, the extension of commerce, and the cultivation of
mutual interests have steadily improved our relations with the large
majority of the powers of the world, rendering practicable the peaceful
solution of questions which from time to time necessarily arise, leaving
few which demand extended or particular notice.

The correspondence of the Department of State with our diplomatic
representatives abroad is transmitted herewith.

I am happy to announce the passage of an act by the General Cortes of
Portugal, proclaimed since the adjournment of Congress, for the
abolition of servitude in the Portuguese colonies. It is to be hoped
that such legislation may be another step toward the great consummation
to be reached, when no man shall be permitted, directly or indirectly,
under any guise, excuse, or form of law, to hold his fellow-man in
bondage. I am of opinion also that it is the duty of the United States,
as contributing toward that end, and required by the spirit of the age
in which we live, to provide by suitable legislation that no citizen of
the United States shall hold slaves as property in any other country or
be interested therein.

Chile has made reparation in the case of the whale ship Good Return,
seized without sufficient cause upward of forty years ago. Though she
had hitherto denied her accountability, the denial was never acquiesced
in by this Government, and the justice of the claim has been so
earnestly contended for that it has been gratifying that she should have
at last acknowledged it.

The arbitrator in the case of the United States steamer Montijo, for the
seizure and detention of which the Government of the United States of
Colombia was held accountable, has decided in favor of the claim. This
decision has settled a question which had been pending for several
years, and which, while it continued open, might more or less disturb
the good understanding which it is desirable should be maintained
between the two Republics.

A reciprocity treaty with the King of the Hawaiian Islands was concluded
some months since. As it contains a stipulation that it shall not take
effect until Congress shall enact the proper legislation for that
purpose, copies of the instrument are herewith submitted, in order that,
if such should be the pleasure of Congress, the necessary legislation
upon the subject may be adopted.

In March last an arrangement was made, through Mr. Cushing, our minister
in Madrid, with the Spanish Government for the payment by the latter to
the United States of the sum of $80,000 in coin, for the purpose of the
relief of the families or persons of the ship's company and certain
passengers of the Virginius. This sum was to have been paid in three
installments at two months each. It is due to the Spanish Government
that I should state that the payments were fully and spontaneously
anticipated by that Government, and that the whole amount was paid
within but a few days more than two months from the date of the
agreement, a copy of which is herewith transmitted. In pursuance of the
terms of the adjustment, I have directed the distribution of the amount
among the parties entitled thereto, including the ship's company and
such of the passengers as were American citizens. Payments are made
accordingly, on the application by the parties entitled thereto.

The past year has furnished no evidence of an approaching termination of
the ruinous conflict which has been raging for seven years in the
neighboring island of Cuba. The same disregard of the laws of civilized
warfare and of the just demands of humanity which has heretofore called
forth expressions of condemnation from the nations of Christendom has
continued to blacken the sad scene. Desolation, ruin, and pillage are
pervading the rich fields of one of the most fertile and productive
regions of the earth, and the incendiary's torch, firing plantations and
valuable factories and buildings, is the agent marking the alternate
advance or retreat of contending parties.

The protracted continuance of this strife seriously affects the
interests of all commercial nations, but those of the United States more
than others, by reason of close proximity, its larger trade and
intercourse with Cuba, and the frequent and intimate personal and social
relations which have grown up between its citizens and those of the
island. Moreover, the property of our citizens in Cuba is large, and is
rendered insecure and depreciated in value and in capacity of production
by the continuance of the strife and the unnatural mode of its conduct.
The same is true, differing only in degree, with respect to the
interests and people of other nations; and the absence of any reasonable
assurance of a near termination of the conflict must of necessity soon
compel the States thus suffering to consider what the interests of their
own people and their duty toward themselves may demand.

I have hoped that Spain would be enabled to establish peace in her
colony, to afford security to the property and the interests of our
citizens, and allow legitimate scope to trade and commerce and the
natural productions of the island. Because of this hope, and from an
extreme reluctance to interfere in the most remote manner in the affairs
of another and a friendly nation, especially of one whose sympathy and
friendship in the struggling infancy of our own existence must ever be
remembered with gratitude, I have patiently and anxiously waited the
progress of events. Our own civil conflict is too recent for us not to
consider the difficulties which surround a government distracted by a
dynastic rebellion at home at the same time that it has to cope with a
separate insurrection in a distant colony. But whatever causes may have
produced the situation which so grievously affects our interests, it
exists, with all its attendant evils operating directly upon this
country and its people. Thus far all the efforts of Spain have proved
abortive, and time has marked no improvement in the situation. The armed
bands of either side now occupy nearly the same ground as in the past,
with the difference, from time to time, of more lives sacrificed, more
property destroyed, and wider extents of fertile and productive fields
and more and more of valuable property constantly wantonly sacrificed to
the incendiary's torch.

In contests of this nature, where a considerable body of people who have
attempted to free themselves of the control of the superior government
have reached such point in occupation of territory, in power, and in
general organization as to constitute in fact a body politic; having a
government in substance as well as in name; possessed of the elements of
stability and equipped with the machinery for the administration of
internal policy and the execution of its laws; prepared and able to
administer justice at home, as well as in its dealings with other
powers, it is within the province of those other powers to recognize its
existence as a new and independent nation. In such cases other nations
simply deal with an actually existing condition of things, and recognize
as one of the powers of the earth that body politic which, possessing
the necessary elements, has in fact become a new power. In a word, the
creation of a new state is a fact.

To establish the condition of things essential to the recognition of
this fact there must be a people occupying a known territory, united
under some known and defined form of government, acknowledged by those
subject thereto, in which the functions of government are administered
by usual methods, competent to mete out justice to citizens and
strangers, to afford remedies for public and for private wrongs, and
able to assume the correlative international obligations and capable of
performing the corresponding international duties resulting from its
acquisition of the rights of sovereignty. A power should exist complete
in its organization, ready to take and able to maintain its place among
the nations of the earth.

While conscious that the insurrection in Cuba has shown a strength and
endurance which make it at least doubtful whether it be in the power of
Spain to subdue it, it seems unquestionable that no such civil
organization exists which may be recognized as an independent government
capable of performing its international obligations and entitled to be
treated as one of the powers of the earth. A recognition under such
circumstances would be inconsistent with the facts, and would compel the
power granting it soon to support by force the government to which it
had really given its only claim of existence. In my judgment the United
States should adhere to the policy and the principles which have
heretofore been its sure and safe guides in like contests between
revolted colonies and their mother country, and, acting only upon the
clearest evidence, should avoid any possibility of suspicion or of
imputation.

A recognition of the independence of Cuba being, in my opinion,
impracticable and indefensible, the question which next presents itself
is that of the recognition of belligerent rights in the parties to the
contest.

In a former message to Congress I had occasion to consider this
question, and reached the conclusion that the conflict in Cuba, dreadful
and devastating as were its incidents, did not rise to the fearful
dignity of war. Regarding it now, after this lapse of time, I am unable
to see that any notable success or any marked or real advance on the
part of the insurgents has essentially changed the character of the
contest. It has acquired greater age, but not greater or more formidable
proportions. It is possible that the acts of foreign powers, and even
acts of Spain herself, of this very nature, might be pointed to in
defense of such recognition. But now, as in its past history, the United
States should carefully avoid the false lights which might lead it into
the mazes of doubtful law and of questionable propriety, and adhere
rigidly and sternly to the rule, which has been its guide, of doing only
that which is right and honest and of good report. The question of
according or of withholding rights of belligerency must be judged in
every case in view of the particular attending facts. Unless justified
by necessity, it is always, and justly, regarded as an unfriendly act
and a gratuitous demonstration of moral support to the rebellion. It is
necessary, and it is required, when the interests and rights of another
government or of its people are so far affected by a pending civil
conflict as to require a definition of its relations to the parties
thereto. But this conflict must be one which will be recognized in the
sense of international law as war. Belligerence, too, is a fact. The
mere existence of contending armed bodies and their occasional conflicts
do not constitute war in the sense referred to. Applying to the existing
condition of affairs in Cuba the tests recognized by publicists and
writers on international law, and which have been observed by nations of
dignity, honesty, and power when free from sensitive or selfish and
unworthy motives, I fail to find in the insurrection the existence of
such a substantial political organization, real, palpable, and manifest
to the world, having the forms and capable of the ordinary functions of
government toward its own people and to other states, with courts for
the administration of justice, with a local habitation, possessing such
organization of force, such material, such occupation of territory, as
to take the contest out of the category of a mere rebellious
insurrection or occasional skirmishes and place it on the terrible
footing of war, to which a recognition of belligerency would aim to
elevate it. The contest, moreover, is solely on land; the insurrection
has not possessed itself of a single seaport whence it may send forth
its flag, nor has it any means of communication with foreign powers
except through the military lines of its adversaries. No apprehension of
any of those sudden and difficult complications which a war upon the
ocean is apt to precipitate upon the vessels, both commercial and
national, and upon the consular officers of other powers calls for the
definition of their relations to the parties to the contest. Considered
as a question of expediency, I regard the accordance of belligerent
rights still to be as unwise and premature as I regard it to be, at
present, indefensible as a measure of right. Such recognition entails
upon the country according the rights which flow from it difficult and
complicated duties, and requires the exaction from the contending
parties of the strict observance of their rights and obligations; it
confers the right of search upon the high seas by vessels of both
parties; it would subject the carrying of arms and munitions of war,
which now may be transported freely and without interruption in the
vessels of the United States, to detention and to possible seizure; it
would give rise to countless vexatious questions, would release the
parent Government from responsibility for acts done by the insurgents,
and would invest Spain with the right to exercise the supervision
recognized by our treaty of 1795 over our commerce on the high seas, a
very large part of which, in its traffic between the Atlantic and the
Gulf States and between all of them and the States on the Pacific,
passes through the waters which wash the shores of Cuba. The exercise of
this supervision could scarce fail to lead, if not to abuses, certainly
to collisions perilous to the peaceful relations of the two States.
There can be little doubt to what result such supervision would before
long draw this nation. It would be unworthy of the United States to
inaugurate the possibilities of such result by measures of questionable
right or expediency or by any indirection. Apart from any question of
theoretical right, I am satisfied that while the accordance of
belligerent rights to the insurgents in Cuba might give them a hope and
an inducement to protract the struggle, it would be but a delusive hope,
and would not remove the evils which this Government and its people are
experiencing, but would draw the United States into complications which
it has waited long and already suffered much to avoid. The recognition
of independence or of belligerency being thus, in my judgment, equally
inadmissible, it remains to consider what course shall be adopted should
the conflict not soon be brought to an end by acts of the parties
themselves, and should the evils which result therefrom, affecting all
nations, and particularly the United States, continue. In such event I
am of opinion that other nations will be compelled to assume the
responsibility which devolves upon them, and to seriously consider the
only remaining measures possible--mediation and intervention, Owing,
perhaps, to the large expanse of water separating the island from the
peninsula, the want of harmony and of personal sympathy between the
inhabitants of the colony and those sent thither to rule them, and want
of adaptation of the ancient colonial system of Europe to the present
times and to the ideas which the events of the past century have
developed, the contending parties appear to have within themselves no
depository of common confidence to suggest wisdom when passion and
excitement have their sway and to assume the part of peacemaker. In this
view in the earlier days of the contest the good offices of the United
States as a mediator were tendered in good faith, without any selfish
purpose, in the interest of humanity and in sincere friendship for both
parties, but were at the time declined by Spain, with the declaration,
nevertheless, that at a future time they would be indispensable. No
intimation has been received that in the opinion of Spain that time has
been reached. And yet the strife continues, with all its dread horrors
and all its injuries to the interests of the United States and of other
nations. Each party seems quite capable of working great injury and
damage to the other, as well as to all the relations and interests
dependent on the existence of peace in the island; but they seem
incapable of reaching any adjustment, and both have thus far failed of
achieving any success whereby one party shall possess and control the
island to the exclusion of the other. Under these circumstances the
agency of others, either by mediation or by intervention, seems to be
the only alternative which must, sooner or later, be invoked for the
termination of the strife. At the same time, while thus impressed I do
not at this time recommend the adoption of any measure of intervention.
I shall be ready at all times, and as the equal friend of both parties,
to respond to a suggestion that the good offices of the United States
will be acceptable to aid in bringing about a peace honorable to both.
It is due to Spain, so far as this Government is concerned, that the
agency of a third power, to which I have adverted, shall be adopted only
as a last expedient. Had it been the desire of the United States to
interfere in the affairs of Cuba, repeated opportunities for so doing
have been presented within the last few years; but we have remained
passive, and have performed our whole duty and all international
obligations to Spain with friendship, fairness, and fidelity, and with a
spirit of patience and forbearance which negatives every possible
suggestion of desire to interfere or to add to the difficulties with
which she has been surrounded.

The Government of Spain has recently submitted to our minister at Madrid
certain proposals which it is hoped may be found to be the basis, if not
the actual submission, of terms to meet the requirements of the
particular griefs of which this Government has felt itself entitled to
complain. These proposals have not yet reached me in their full text. On
their arrival they will be taken into careful examination, and may, I
hope, lead to a satisfactory adjustment of the questions to which they
refer and remove the possibility of future occurrences such as have
given rise to our just complaints.

It is understood also that renewed efforts are being made to introduce
reforms in the internal administration of the island. Persuaded,
however, that a proper regard for the interests of the United States and
of its citizens entitles it to relief from the strain to which it has
been subjected by the difficulties of the questions and the wrongs and
losses which arise from the contest in Cuba, and that the interests of
humanity itself demand the cessation of the strife before the whole
island shall be laid waste and larger sacrifices of life be made, I
shall feel it my duty, should my hopes of a satisfactory adjustment and
of the early restoration of peace and the removal of future causes of
complaint be, unhappily, disappointed, to make a further communication
to Congress at some period not far remote, and during the present
session, recommending what may then seem to me to be necessary.

The free zone, so called, several years since established by the Mexican
Government in certain of the States of that Republic adjacent to our
frontier, remains in full operation. It has always been materially
injurious to honest traffic, for it operates as an incentive to traders
in Mexico to supply without customs charges the wants of inhabitants on
this side of the line, and prevents the same wants from being supplied
by merchants of the United States, thereby to a considerable extent
defrauding our revenue and checking honest commercial enterprise.

Depredations by armed bands from Mexico on the people of Texas near the
frontier continue. Though the main object of these incursions is
robbery, they frequently result in the murder of unarmed and peaceably
disposed persons, and in some instances even the United States
post-offices and mail communications have been attacked. Renewed
remonstrances upon this subject have been addressed to the Mexican
Government, but without much apparent effect. The military force of this
Government disposable for service in that quarter is quite inadequate to
effectually guard the line, even at those points where the incursions
are usually made. An experiment of an armed vessel on the Rio Grande for
that purpose is on trial, and it is hoped that, if not thwarted by the
shallowness of the river and other natural obstacles, it may materially
contribute to the protection of the herdsmen of Texas.

The proceedings of the joint commission under the convention between the
United States and Mexico of the 4th of July, 1868, on the subject of
claims, will soon be brought to a close. The result of those proceedings
will then be communicated to Congress.

I am happy to announce that the Government of Venezuela has, upon
further consideration, practically abandoned its objection to pay to the
United States that share of its revenue which some years since it
allotted toward the extinguishment of the claims of foreigners
generally. In thus reconsidering its determination that Government has
shown a just sense of self-respect which can not fail to reflect credit
upon it in the eyes of all disinterested persons elsewhere. It is to be
regretted, however, that its payments on account of claims of citizens
of the United States are still so meager in amount, and that the
stipulations of the treaty in regard to the sums to be paid and the
periods when those payments were to take place should have been so
signally disregarded.

Since my last annual message the exchange has been made of the
ratification of a treaty of commerce and navigation with Belgium, and of
conventions with the Mexican Republic for the further extension of the
joint commission respecting claims; with the Hawaiian Islands for
commercial reciprocity, and with the Ottoman Empire for extradition; all
of which have been duly proclaimed.

The Court of Commissioners of Alabama Claims has prosecuted its
important duties very assiduously and very satisfactorily. It convened
and was organized on the 22d day of July, 1874, and by the terms of the
act under which it was created was to exist for one year from that date.
The act provided, however, that should it be found impracticable to
complete the work of the court before the expiration of the year the
President might by proclamation extend the time of its duration to a
period not more than six months beyond the expiration of the one year.

Having received satisfactory evidence that it would be impracticable to
complete the work within the time originally fixed, I issued a
proclamation (a copy of which is presented herewith) extending the time
of duration of the court for a period of six months from and after the
22d day of July last.

A report made through the clerk of the court (communicated herewith)
shows the condition of the calendar on the 1st of November last and the
large amount of work which has been accomplished. One thousand three
hundred and eighty-two claims have been presented, of which 682 had been
disposed of at the date of the report. I am informed that 170 cases were
decided during the month of November. Arguments are being made and
decisions given in the remaining cases with all the dispatch consistent
with the proper consideration of the questions submitted. Many of these
claims are in behalf of mariners, or depend on the evidence of mariners,
whose absence has delayed the taking or the return of the necessary
evidence.

It is represented to me that it will be impracticable for the court to
finally dispose of all the cases before it within the present limit of
its duration. Justice to the parties claimant, who have been at large
expense in preparing their claims and obtaining the evidence in their
support, suggests a short extension, to enable the court to dispose of
all of the claims which have been presented.

I recommend the legislation which may be deemed proper to enable the
court to complete the work before it.

I recommend that some suitable provision be made, by the creation of a
special court or by conferring the necessary jurisdiction upon some
appropriate tribunal, for the consideration and determination of the
claims of aliens against the Government of the United States which have
arisen within some reasonable limitation of time, or which may hereafter
arise, excluding all claims barred by treaty provisions or otherwise. It
has been found impossible to give proper consideration to these claims
by the Executive Departments of the Government. Such a tribunal would
afford an opportunity to aliens other than British subjects to present
their claims on account of acts committed against their persons or
property during the rebellion, as also to those subjects of Great
Britain whose claims, having arisen subsequent to the 9th day of April,
1865, could not be presented to the late commission organized pursuant
to the provisions of the treaty of Washington.

The electric telegraph has become an essential and indispensable agent
in the transmission of business and social messages. Its operation on
land, and within the limit of particular states, is necessarily under
the control of the jurisdiction within which it operates. The lines on
the high seas, however, are not subject to the particular control of any
one government.

In 1869 a concession was granted by the French Government to a company
which proposed to lay a cable from the shores of France to the United
States. At that time there was a telegraphic connection between the
United States and the continent of Europe (through the possessions of
Great Britain at either end of the line), under the control of an
association which had, at large outlay of capital and at great risk,
demonstrated the practicability of maintaining such means of
communication. The cost of correspondence by this agency was great,
possibly not too large at the time for a proper remuneration for so
hazardous and so costly an enterprise. It was, however, a heavy charge
upon a means of communication which the progress in the social and
commercial intercourse of the world found to be a necessity, and the
obtaining of this French concession showed that other capital than that
already invested was ready to enter into competition, with assurance of
adequate return for their outlay. Impressed with the conviction that the
interests, not only of the people of the United States, but of the world
at large, demanded, or would demand, the multiplication of such means of
communication between separated continents, I was desirous that the
proposed connection should be made; but certain provisions of this
concession were deemed by me to be objectionable, particularly one which
gave for a long term of years the exclusive right of telegraphic
communication by submarine cable between the shores of France and the
United States. I could not concede that any power should claim the right
to land a cable on the shores of the United States and at the same time
deny to the United States, or to its citizens or grantees, an equal
fight to land a cable on its shores. The right to control the conditions
for the laying of a cable within the jurisdictional waters of the United
States, to connect our shores with those of any foreign state, pertains
exclusively to the Government of the United States, under such
limitations and conditions as Congress may impose. In the absence of
legislation by Congress I was unwilling, on the one hand, to yield to a
foreign state the right to say that its grantees might land on our
shores while it denied a similar right to our people to land on its
shores, and, on the other hand, I was reluctant to deny to the great
interests of the world and of civilization the facilities of such
communication as were proposed. I therefore withheld any resistance to
the landing of the cable on condition that the offensive monopoly
feature of the concession be abandoned, and that the right of any cable
which may be established by authority of this Government to land upon
French territory and to connect with French land lines and enjoy all the
necessary facilities or privileges incident to the use thereof upon as
favorable terms as any other company be conceded. As the result thereof
the company in question renounced the exclusive privilege, and the
representative of France was informed that, understanding this
relinquishment to be construed as granting the entire reciprocity and
equal facilities which had been demanded, the opposition to the landing
of the cable was withdrawn. The cable, under this French concession, was
landed in the month of July, 1869, and has been an efficient and
valuable agent of communication between this country and the other
continent. It soon passed under the control, however, of those who had
the management of the cable connecting Great Britain with this
continent, and thus whatever benefit to the public might have ensued
from competition between the two lines was lost, leaving only the
greater facilities of an additional line and the additional security in
case of accident to one of them. But these increased facilities and this
additional security, together with the control of the combined capital
of the two companies, gave also greater power to prevent the future
construction of other lines and to limit the control of telegraphic
communication between the two continents to those possessing the lines
already laid. Within a few months past a cable has been laid, known as
the United States Direct Cable Company, connecting the United States
directly with Great Britain. As soon as this cable was reported to be
laid and in working order the rates of the then existing consolidated
companies were greatly reduced. Soon, however, a break was announced in
this new cable, and immediately the rates of the other line, which had
been reduced, were again raised. This cable being now repaired, the
rates appear not to be reduced by either line from those formerly
charged by the consolidated companies.

There is reason to believe that large amounts of capital, both at home
and abroad, are ready to seek profitable investment in the advancement
of this useful and most civilizing means of intercourse and
correspondence. They await, however, the assurance of the means and
conditions on which they may safely be made tributary to the general
good.

As these cable telegraph lines connect separate states, there are
questions as to their organization and control which probably can be
best, if not solely, settled by conventions between the respective
states. In the absence, however, of international conventions on the
subject, municipal legislation may secure many points which appear to me
important, if not indispensable for the protection of the public against
the extortions which may result from a monopoly of the right of
operating cable telegrams or from a combination between several lines:

I. No line should be allowed to land on the shores of the United States
under the concession from another power which does not admit the right
of any other line or lines, formed in the United States, to land and
freely connect with and operate through its land lines.

II. No line should be allowed to land on the shores of the United States
which is not, by treaty stipulation with the government from whose
shores it proceeds, or by prohibition in its charter, or otherwise to
the satisfaction of this Government, prohibited from consolidating or
amalgamating with any other cable telegraph line, or combining therewith
for the purpose of regulating and maintaining the cost of telegraphing.

III. All lines should be bound to give precedence in the transmission of
the official messages of the governments of the two countries between
which it may be laid.

IV. A power should be reserved to the two governments, either conjointly
or to each, as regards the messages dispatched from its shores, to fix a
limit to the charges to be demanded for the transmission of messages.

I present this subject to the earnest consideration of Congress.

In the meantime, and unless Congress otherwise direct, I shall not
oppose the landing of any telegraphic cable which complies with and
assents to the points above enumerated, but will feel it my duty to
prevent the landing of any which does not conform to the first and
second points as stated, and which will not stipulate to concede to this
Government the precedence in the transmission of its official messages
and will not enter into a satisfactory arrangement with regard to its
charges.

Among the pressing and important subjects to which, in my opinion, the
attention of Congress should be directed are those relating to
fraudulent naturalization and expatriation.

The United States, with great liberality, offers its citizenship to all
who in good faith comply with the requirements of law. These
requirements are as simple and upon as favorable terms to the emigrant
as the high privilege to which he is admitted can or should permit. I do
not propose any additional requirements to those which the law now
demands; but the very simplicity and the want of unnecessary formality
in our law have made fraudulent naturalization not infrequent, to the
discredit and injury of all honest citizens, whether native or
naturalized. Cases of this character are continually being brought to
the notice of the Government by our representatives abroad, and also
those of persons resident in other countries, most frequently those who,
if they have remained in this country long enough to entitle them to
become naturalized, have generally not much overpassed that period, and
have returned to the country of their origin, where they reside,
avoiding all duties to the United States by their absence, and claiming
to be exempt from all duties to the country of their nativity and of
their residence by reason of their alleged naturalization. It is due to
this Government itself and to the great mass of the naturalized citizens
who entirely, both in name and in fact, become citizens of the United
States that the high privilege of citizenship of the United States
should not be held by fraud or in derogation of the laws and of the good
name of every honest citizen. On many occasions it has been brought to
the knowledge of the Government that certificates of naturalization are
held and protection or interference claimed by parties who admit that
not only they were not within the United States at the time of the
pretended naturalization, but that they have never resided in the United
States; in others the certificate and record of the court show on their
face that the person claiming to be naturalized had not resided the
required time in the United States; in others it is admitted upon
examination that the requirements of law have not been complied with; in
some cases, even, such certificates have been matter of purchase. These
are not isolated cases, arising at rare intervals, but of common
occurrence, and which are reported from all quarters of the globe. Such
occurrences can not, and do not, fail to reflect upon the Government and
injure all honest citizens. Such a fraud being discovered, however,
there is no practicable means within the control of the Government by
which the record of naturalization can be vacated; and should the
certificate be taken up, as it usually is, by the diplomatic and
consular representatives of the Government to whom it may have been
presented, there is nothing to prevent the person claiming to have been
naturalized from obtaining a new certificate from the court in place of
that which has been taken from him.

The evil has become so great and of such frequent occurrence that I can
not too earnestly recommend that some effective measures be adopted to
provide a proper remedy and means for the vacating of any record thus
fraudulently made, and of punishing the guilty parties to the
transaction.

In this connection I refer also to the question of expatriation and the
election of nationality.

The United States was foremost in upholding the right of expatriation,
and was principally instrumental in overthrowing the doctrine of
perpetual allegiance. Congress has declared the right of expatriation to
be a natural and inherent right of all people; but while many other
nations have enacted laws providing what formalities shall be necessary
to work a change of allegiance, the United States has enacted no
provisions of law and has in no respect marked out how and when
expatriation may be accomplished by its citizens. Instances are brought
to the attention of the Government where citizens of the United States,
either naturalized or native born, have formally become citizens or
subjects of foreign powers, but who, nevertheless, in the absence of any
provisions of legislation on this question, when involved in
difficulties or when it seems to be their interest, claim to be citizens
of the United States and demand the intervention of a Government which
they have long since abandoned and to which for years they have rendered
no service nor held themselves in any way amenable.

In other cases naturalized citizens, immediately after naturalization,
have returned to their native country; have become engaged in business;
have accepted offices or pursuits inconsistent with American
citizenship, and evidence no intent to return to the United States until
called upon to discharge some duty to the country where they are
residing, when at once they assert their citizenship and call upon the
representatives of the Government to aid them in their unjust
pretensions. It is but justice to all bona fide citizens that no doubt
should exist on such questions, and that Congress should determine by
enactment of law how expatriation may be accomplished and change of
citizenship be established.

I also invite your attention to the necessity of regulating by law the
status of American women who may marry foreigners, and of defining more
fully that of children born in a foreign country of American parents who
may reside abroad; and also of some further provision regulating or
giving legal effect to marriages of American citizens contracted in
foreign countries. The correspondence submitted herewith shows a few of
the constantly occurring questions on these points presented to the
consideration of the Government. There are few subjects to engage the
attention of Congress on which more delicate relations or more important
interests are dependent.

In the month of July last the building erected for the Department of
State was taken possession of and occupied by that Department. I am
happy to announce that the archives and valuable papers of the
Government in the custody of that Department are now safely deposited
and properly cared for.

The report of the Secretary of the Treasury shows the receipts from
customs for the fiscal year ending June 30, 1874, to have been
$163,103,833.69, and for the fiscal year ending June 30, 1875, to have
been $157,267,722.35, a decrease for the last fiscal year of
$5,936,111.34. Receipts from internal revenue for the year ending the
30th of June, 1874, were $102,409,784.90, and for the year ending June
30, 1875, $110,007,493.58; increase, $7,597,708.68.

The report also shows a complete history of the workings of the
Department for the last year, and contains recommendations for reforms
and for legislation which I concur in, but can not comment on so fully
as I should like to do if space would permit, but will confine myself to
a few suggestions which I look upon as vital to the best interests of
the whole people--coming within the purview of "Treasury;" I mean specie
resumption. Too much stress can not be laid upon this question, and I
hope Congress may be induced, at the earliest day practicable, to insure
the consummation of the act of the last Congress, at its last session,
to bring about specie resumption "on and after the 1st of January,
1879," at furthest. It would be a great blessing if this could be
consummated even at an earlier day.

Nothing seems to me more certain than that a full, healthy, and
permanent reaction can not take place in favor of the industries and
financial welfare of the country until we return to a measure of values
recognized throughout the civilized world. While we use a currency not
equivalent to this standard the world's recognized standard, specie,
becomes a commodity like the products of the soil, the surplus seeking a
market wherever there is a demand for it.

Under our present system we should want none, nor would we have any,
were it not that customs dues must be paid in coin and because of the
pledge to pay interest on the public debt in coin. The yield of precious
metals would flow out for the purchase of foreign productions and the
United States "hewers of wood and drawers of water," because of wiser
legislation on the subject of finance by the nations with whom we have
dealings. I am not prepared to say that I can suggest the best
legislation to secure the end most heartily recommended. It will be a
source of great gratification to me to be able to approve any measure of
Congress looking effectively toward securing "resumption."

Unlimited inflation would probably bring about specie payments more
speedily than any legislation looking to redemption of the legal-tenders
in coin; but it would be at the expense of honor. The legal-tenders
would have no value beyond settling present liabilities, or, properly
speaking, repudiating them. They would buy nothing after debts were all
settled.

There are a few measures which seem to me important in this connection
and which I commend to your earnest consideration:

A repeal of so much of the legal-tender act as makes these notes
receivable for debts contracted after a date to be fixed in the act
itself, say not later than the 1st of January, 1877. We should then have
quotations at real values, not fictitious ones. Gold would no longer be
at a premium, but currency at a discount. A healthy reaction would set
in at once, and with it a desire to make the currency equal to what it
purports to be. The merchants, manufacturers, and tradesmen of every
calling could do business on a fair margin of profit, the money to be
received having an unvarying value. Laborers and all classes who work
for stipulated pay or salary would receive more for their income,
because extra profits would no longer be charged by the capitalists to
compensate for the risk of a downward fluctuation in the value of the
currency.

Second. That the Secretary of the Treasury be authorized to redeem, say,
not to exceed $2,000,000 monthly of legal-tender notes, by issuing in
their stead a long bond, bearing interest at the rate of 3.65 per cent
per annum, of denominations ranging from $50 up to $1,000 each. This
would in time reduce the legal-tender notes to a volume that could be
kept afloat without demanding redemption in large sums suddenly.

Third. That additional power be given to the Secretary of the Treasury
to accumulate gold for final redemption, either by increasing revenue,
curtailing expenses, or both (it is preferable to do both); and I
recommend that reduction of expenditures be made wherever it can be done
without impairing Government obligations or crippling the due execution
thereof. One measure for increasing the revenue--and the only one I
think of--is the restoration of the duty on tea and coffee. These duties
would add probably $18,000,000 to the present amount received from
imports, and would in no way increase the prices paid for those articles
by the consumers.

These articles are the products of countries collecting revenue from
exports, and as we, the largest consumers, reduce the duties they
proportionately increase them. With this addition to the revenue, many
duties now collected, and which give but an insignificant return for the
cost of collection, might be remitted, and to the direct advantage of
consumers at home.

I would mention those articles which enter into manufactures of all
sorts. All duty paid upon such articles goes directly to the cost of the
article when manufactured here, and must be paid for by the consumers.
These duties not only come from the consumers at home, but act as a
protection to foreign manufacturers of the same completed articles in
our own and distant markets.

I will suggest or mention another subject bearing upon the problem of
"how to enable the Secretary of the Treasury to accumulate balances." It
is to devise some better method of verifying claims against the
Government than at present exists through the Court of Claims,
especially those claims growing out of the late war. Nothing is more
certain than that a very large percentage of the amounts passed and paid
are either wholly fraudulent or are far in excess of the real losses
sustained. The large amount of losses proven--on good testimony
according to existing laws, by affidavits of fictitious or unscrupulous
persons--to have been sustained on small farms and plantations are not
only far beyond the possible yield of those places for any one year,
but, as everyone knows who has had experience in tilling the soil and
who has visited the scenes of these spoliations, are in many instances
more than the individual claimants were ever worth, including their
personal and real estate.

The report of the Attorney-General, which will be submitted to Congress
at an early day, will contain a detailed history of awards made and of
claim pending of the class here referred to.

The report of the Secretary of War, accompanying this message, gives a
detailed account of Army operations for the year just passed, expenses
for maintenance, etc., with recommendations for legislation to which I
respectfully invite your attention. To some of these I invite special
attention:

First. The necessity of making $300,000 of the appropriation for the
Subsistence Department available before the beginning of the next fiscal
year. Without this provision troops at points distant from supply
production must either go without food or existing laws must be
violated. It is not attended with cost to the Treasury.

Second. His recommendation for the enactment of a system of annuities
for the families of deceased officers by voluntary deductions from the
monthly pay of officers. This again is not attended with burden upon the
Treasury, and would for the future relieve much distress which every old
army officer has witnessed in the past--of officers dying suddenly or
being killed, leaving families without even the means of reaching their
friends, if fortunate enough to have friends to aid them.

Third. The repeal of the law abolishing mileage, and a return to the old
system.

Fourth. The trial with torpedoes under the Corps of Engineers, and
appropriation for the same. Should war ever occur between the United
States and any maritime power, torpedoes will be among if not the most
effective and cheapest auxiliary for the defense of harbors, and also in
aggressive operations, that we can have. Hence it is advisable to learn
by experiment their best construction and application, as well as
effect.

Fifth. A permanent organization for the Signal-Service Corps. This
service has now become a necessity of peace as well as war, under the
advancement made by the present able management.

Sixth. A renewal of the appropriation for compiling the official records
of the war, etc.

The condition of our Navy at this time is a subject of satisfaction. It
does not contain, it is true, any of the powerful cruising ironclads
which make so much of the maritime strength of some other nations, but
neither our continental situation nor our foreign policy requires that
we should have a large number of ships of this character, while this
situation and the nature of our ports combine to make those of other
nations little dangerous to us under any circumstances.

Our Navy does contain, however, a considerable number of ironclads of
the monitor class, which, though not properly cruisers, are powerful and
effective for harbor defense and for operations near our own shores. Of
these all the single-turreted ones, fifteen in number, have been
substantially rebuilt, their rotten wooden beams replaced with iron,
their hulls strengthened, and their engines and machinery thoroughly
repaired, so that they are now in the most efficient condition and ready
for sea as soon as they can be manned and put in commission.

The five double-turreted ironclads belonging to our Navy, by far the
most powerful of our ships for fighting purposes, are also in hand
undergoing complete repairs, and could be ready for sea in periods
varying from four to six months. With these completed according to the
present design and our two iron torpedo boats now ready, our ironclad
fleet will be, for the purposes of defense at home, equal to any force
that can readily be brought against it.

Of our wooden navy also cruisers of various sizes, to the number of
about forty, including those now in commission, are in the Atlantic, and
could be ready for duty as fast as men could be enlisted for those not
already in commission. Of these, one-third are in effect new ships, and
though some of the remainder need considerable repairs to their boilers
and machinery, they all are, or can readily be made, effective.

This constitutes a fleet of more than fifty war ships, of which fifteen
are ironclad, now in hand on the Atlantic coast. The Navy has been
brought to this condition by a judicious and practical application of
what could be spared from the current appropriations of the last few
years and from that made to meet the possible emergency of two years
ago. It has been done quietly, without proclamation or display, and
though it has necessarily straitened the Department in its ordinary
expenditure, and, as far as the ironclads are concerned, has added
nothing to the cruising force of the Navy, yet the result is not the
less satisfactory because it is to be found in a great increase of real
rather than apparent force. The expenses incurred in the maintenance of
an effective naval force in all its branches are necessarily large, but
such force is essential to our position, relations, and character, and
affects seriously the weight of our principles and policy throughout the
whole sphere of national responsibilities.

The estimates for the regular support of this branch of the service for
the next year amount to a little less in the aggregate than those made
for the current year; but some additional appropriations are asked for
objects not included in the ordinary maintenance of the Navy, but
believed to be of pressing importance at this time. It would, in my
opinion, be wise at once to afford sufficient means for the immediate
completion of the five double-turreted monitors now undergoing repairs,
which must otherwise advance slowly, and only as money can be spared
from current expenses. Supplemented by these, our Navy, armed with the
destructive weapons of modern warfare, manned by our seamen, and in
charge of our instructed officers, will present a force powerful for the
home purposes of a responsible though peaceful nation.

The report of the Postmaster-General herewith transmitted gives a full
history of the workings of the Department for the year just past. It
will be observed that the deficiency to be supplied from the General
Treasury is increased over the amount required for the preceding year.
In a country so vast in area as the United States, with large portions
sparsely settled, it must be expected that this important service will
be more or less a burden upon the Treasury for many years to come. But
there is no branch of the public service which interests the whole
people more than that of cheap and rapid transmission of the mails to
every inhabited part of our territory. Next to the free school, the
post-office is the great educator of the people, and it may well receive
the support of the General Government.

The subsidy of $150,000 per annum given to vessels of the United States
for carrying the mails between New York and Rio de Janeiro having ceased
on the 30th day of September last, we are without direct mail facilities
with the South American States. This is greatly to be regretted, and I
do not hesitate to recommend the authorization of a renewal of that
contract, and also that the service may be increased from monthly to
semi-monthly trips. The commercial advantages to be gained by a direct
line of American steamers to the South American States will far outweigh
the expense of the service.

By act of Congress approved March 3, 1875, almost all matter, whether
properly mail matter or not, may be sent any distance through the mails,
in packages not exceeding 4 pounds in weight, for the sum of 16 cents
per pound. So far as the transmission of real mail matter goes, this
would seem entirely proper; but I suggest that the law be so amended as
to exclude from the mails merchandise of all descriptions, and limit
this transportation to articles enumerated, and which may be classed as
mail matter proper.

The discovery of gold in the Black Hills, a portion of the Sioux
Reservation, has had the effect to induce a large emigration of miners
to that point. Thus far the effort to protect the treaty rights of the
Indians to that section has been successful, but the next year will
certainly witness a large increase of such emigration. The negotiations
for the relinquishment of the gold fields having failed, it will be
necessary for Congress to adopt some measures to relieve the
embarrassment growing out of the causes named. The Secretary of the
Interior suggests that the supplies now appropriated for the sustenance
of that people, being no longer obligatory under the treaty of 1868, but
simply a gratuity, may be issued or withheld at his discretion.

The condition of the Indian Territory, to which I have referred in
several of my former annual messages, remains practically unchanged. The
Secretary of the Interior has taken measures to obtain a full report of
the condition of that Territory, and will make it the subject of a
special report at an early day. It may then be necessary to make some
further recommendation in regard to legislation for the government of
that Territory.

The steady growth and increase of the business of the Patent Office
indicates in some measure the progress of the industrial activity of the
country. The receipts of the office are in excess of its expenditures,
and the office generally is in a prosperous and satisfactory condition.

The report of the General Land Office shows that there were 2,459,601
acres less disposed of during this than during the last year. More than
one-half of this decrease was in lands disposed of under the homestead
and timber-culture laws. The cause of this decrease is supposed to be
found in the grasshopper scourge and the droughts which prevailed so
extensively in some of the frontier States and Territories during that
time as to discourage and deter entries by actual settlers. The cash
receipts were less by $690,322.23 than during the preceding year.

The entire surveyed area of the public domain is 680,253,094 acres, of
which 26,077,531 acres were surveyed during the past year, leaving
1,154,471,762 acres still unsurveyed.

The report of the Commissioner presents many interesting suggestions in
regard to the management and disposition of the public domain and the
modification of existing laws, the apparent importance of which should
insure for them the careful consideration of Congress.

The number of pensioners still continues to decrease, the highest number
having been reached during the year ending June 30, 1873. During the
last year 11,557 names were added to the rolls, and 12,977 were dropped
therefrom, showing a net decrease of 1,420. But while the number of
pensioners has decreased, the annual amount due on the pension rolls has
increased $44,733.13. This is caused by the greatly increased average
rate of pensions, which, by the liberal legislation of Congress, has
increased from $90.26 in 1872 to $103.91 in 1875 to each invalid
pensioner, an increase in the average rate of 15 per cent in the three
years. During the year ending June 30, 1875, there was paid on account
of pensions, including the expenses of disbursement, $29,683,116, being
$910,632 less than was paid the preceding year. This reduction in amount
of expenditures was produced by the decrease in the amount of arrearages
due on allowed claims and on pensions the rate of which was increased by
the legislation of the preceding session of Congress. At the close of
the last fiscal year there were on the pension rolls 234,821 persons, of
whom 210,363 were army pensioners, 105,478 being invalids and 104,885
widows and dependent relatives; 3,420 were navy pensioners, of whom
1,636 were invalids and 1,784 widows and dependent relatives; 21,038
were pensioners of the War of 1812, 15,875 of whom were survivors and
5,163 were widows.

It is estimated that $29,535,000 will be required for the payment of
pensions for the next fiscal year, an amount $965,000 less than the
estimate for the present year.

The geological explorations have been prosecuted with energy during the
year, covering an area of about 40,000 square miles in the Territories
of Colorado, Utah, and New Mexico, developing the agricultural and
mineral resources and furnishing interesting scientific and
topographical details of that region.

The method for the treatment of the Indians adopted at the beginning of
my first term has been steadily pursued, and with satisfactory and
encouraging results. It has been productive of evident improvement in
the condition of that race, and will be continued, with only such
modifications as further experience may indicate to be necessary.

The board heretofore appointed to take charge of the articles and
materials pertaining to the War, the Navy, the Treasury, the Interior,
and the Post-Office Departments, and the Department of Agriculture, the
Smithsonian Institution, and the Commission of Food Fishes, to be
contributed, under the legislation of last session, to the international
exhibition to be held at Philadelphia during the centennial year 1876,
has been diligent in the discharge of the duties which have devolved
upon it; and the preparations so far made with the means at command give
assurance that the governmental contribution will be made one of the
marked characteristics of the exhibition. The board has observed
commendable economy in the matter of the erection of a building for the
governmental exhibit, the expense of which it is estimated will not
exceed, say, $80,000. This amount has been withdrawn, under the law,
from the appropriations of five of the principal Departments, which
leaves some of those Departments without sufficient means to render
their respective practical exhibits complete and satisfactory. The
exhibition being an international one, and the Government being a
voluntary contributor, it is my opinion that its contribution should be
of a character, in quality and extent, to sustain the dignity and credit
of so distinguished a contributor. The advantages to the country of a
creditable display are, in an international point of view, of the first
importance, while an indifferent or uncreditable participation by the
Government would be humiliating to the patriotic feelings of our people
themselves. I commend the estimates of the board for the necessary
additional appropriations to the favorable consideration of Congress.

The powers of Europe almost without exception, many of the South
American States, and even the more distant Eastern powers have
manifested their friendly sentiments toward the United States and the
interest of the world in our progress by taking steps to join with us in
celebrating the centennial of the nation, and I strongly recommend that
a more national importance be given to this exhibition by such
legislation and by such appropriation as will insure its success. Its
value in bringing to our shores innumerable useful works of art and
skill, the commingling of the citizens of foreign countries and our own,
and the interchange of ideas and manufactures will far exceed any
pecuniary outlay we may make.

I transmit herewith the report of the Commissioner of Agriculture,
together with the reports of the Commissioners, the board of audit, and
the board of health of the District of Columbia, to all of which I
invite your attention.

The Bureau of Agriculture has accomplished much in disseminating useful
knowledge to the agriculturist, and also in introducing new and useful
productions adapted to our soil and climate, and is worthy of the
continued encouragement of the Government.

The report of the Commissioner of Education, which accompanies the
report of the Secretary of the Interior, shows a gratifying progress in
educational matters.

In nearly every annual message that I have had the honor of transmitting
to Congress I have called attention to the anomalous, not to say
scandalous, condition of affairs existing in the Territory of Utah, and
have asked for definite legislation to correct it. That polygamy should
exist in a free, enlightened, and Christian country, without the power
to punish so flagrant a crime against decency and morality, seems
preposterous. True, there is no law to sustain this unnatural vice; but
what is needed is a law to punish it as a crime, and at the same time to
fix the status of the innocent children, the offspring of this system,
and of the possibly innocent plural wives. But as an institution
polygamy should be banished from the land.

While this is being done I invite the attention of Congress to another,
though perhaps no less an evil--the importation of Chinese women, but
few of whom are brought to our shores to pursue honorable or useful
occupations.

Observations while visiting the Territories of Wyoming, Utah, and
Colorado during the past autumn convinced me that existing laws
regulating the disposition of public lands, timber, etc., and probably
the mining laws themselves, are very defective and should be carefully
amended, and at an early day. Territory where cultivation of the soil
can only be followed by irrigation, and where irrigation is not
practicable the lands can only be used as pasturage, and this only where
stock can reach water (to quench its thirst), can not be governed by the
same laws as to entries as lands every acre of which is an independent
estate by itself.

Land must be held in larger quantities to justify the expense of
conducting water upon it to make it fruitful, or to justify utilizing it
as pasturage. The timber in most of the Territories is principally
confined to the mountain regions, which are held for entry in small
quantities only, and as mineral lands. The timber is the property of the
United States, for the disposal of which there is now no adequate law.
The settler must become a consumer of this timber, whether he lives upon
the plain or engages in working the mines. Hence every man becomes
either a trespasser himself or knowingly a patron of trespassers.

My opportunities for observation were not sufficient to justify me in
recommending specific legislation on these subjects, but I do recommend
that a joint committee of the two Houses of Congress, sufficiently large
to be divided into subcommittees, be organized to visit all the mining
States and Territories during the coming summer, and that the committee
shall report to Congress at the next session such laws or amendments to
laws as it may deem necessary to secure the best interests of the
Government and the people of these Territories, who are doing so much
for their development.

I am sure the citizens occupying the territory described do not wish to
be trespassers, nor will they be if legal ways are provided for them to
become owners of these actual necessities of their position.

As this will be the last annual message which I shall have the honor of
transmitting to Congress before my successor is chosen, I will repeat or
recapitulate the questions which I deem of vital importance which may be
legislated upon and settled at this session:

First. That the States shall be required to afford the opportunity of a
good common-school education to every child within their limits.

Second. No sectarian tenets shall ever be taught in any school supported
in whole or in part by the State, nation, or by the proceeds of any tax
levied upon any community. Make education compulsory so far as to
deprive all persons who can not read and write from becoming voters
after the year 1890, disfranchising none, however, on grounds of
illiteracy who may be voters at the time this amendment takes effect.

Third. Declare church and state forever separate and distinct, but each
free within their proper spheres; and that all church property shall
bear its own proportion of taxation.

Fourth. Drive out licensed immorality, such as polygamy and the
importation of women for illegitimate purposes. To recur again to the
centennial year, it would seem as though now, as we are about to begin
the second century of our national existence, would be a most fitting
time for these reforms.

Fifth. Enact such laws as will insure a speedy return to a sound
currency, such as will command the respect of the world.

Believing that these views will commend themselves to the great majority
of the right-thinking and patriotic citizens of the United States, I
submit the rest to Congress.

U. S. GRANT

***

State of the Union Address
Ulysses S. Grant
December 5, 1876

To the Senate and House of Representatives:

In submitting my eighth and last annual message to Congress it seems
proper that I should refer to and in some degree recapitulate the events
and official acts of the past eight years.

It was my fortune, or misfortune, to be called to the office of Chief
Executive without any previous political training. From the age of 17 I
had never even witnessed the excitement attending a Presidential
campaign but twice antecedent to my own candidacy, and at but one of
them was I eligible as a voter.

Under such circumstances it is but reasonable to suppose that errors of
judgment must have occurred. Even had they not, differences of opinion
between the Executive, bound by an oath to the strict performance of his
duties, and writers and debaters must have arisen. It is not necessarily
evidence of blunder on the part of the Executive because there are these
differences of views. Mistakes have been made, as all can see and I
admit, but it seems to me oftener in the selections made of the
assistants appointed to aid in carrying out the various duties of
administering the Government--in nearly every case selected without a
personal acquaintance with the appointee, but upon recommendations of
the representatives chosen directly by the people. It is impossible,
where so many trusts are to be allotted, that the right parties should
be chosen in every instance. History shows that no Administration from
the time of Washington to the present has been free from these mistakes.
But I leave comparisons to history, claiming only that I have acted in
every instance from a conscientious desire to do what was right,
constitutional, within the law, and for the very best interests of the
whole people. Failures have been errors of judgment, not of intent.

My civil career commenced, too, at a most critical and difficult time.
Less than four years before, the country had emerged from a conflict
such as no other nation had ever survived. Nearly one-half of the States
had revolted against the Government, and of those remaining faithful to
the Union a large percentage of the population sympathized with the
rebellion and made an "enemy in the rear" almost as dangerous as the
more honorable enemy in the front. The latter committed errors of
judgment, but they maintained them openly and courageously; the former
received the protection of the Government they would see destroyed, and
reaped all the pecuniary advantage to be gained out of the then existing
state of affairs, many of them by obtaining contracts and by swindling
the Government in the delivery of their goods.

Immediately on the cessation of hostilities the then noble President,
who had carried the country so far through its perils, fell a martyr to
his patriotism at the hands of an assassin.

The intervening time to my first inauguration was filled up with
wranglings between Congress and the new Executive as to the best mode of
"reconstruction," or, to speak plainly, as to whether the control of the
Government should be thrown immediately into the hands of those who had
so recently and persistently tried to destroy it, or whether the victors
should continue to have an equal voice with them in this control.
Reconstruction, as finally agreed upon, means this and only this, except
that the late slave was enfranchised, giving an increase, as was
supposed, to the Union-loving and Union-supporting votes. If free in the
full sense of the word, they would not disappoint this expectation.
Hence at the beginning of my first Administration the work of
reconstruction, much embarrassed by the long delay, virtually commenced.
It was the work of the legislative branch of the Government. My province
was wholly in approving their acts, which I did most heartily, urging
the legislatures of States that had not yet done so to ratify the
fifteenth amendment to the Constitution. The country was laboring under
an enormous debt, contracted in the suppression of rebellion, and
taxation was so oppressive as to discourage production. Another danger
also threatened us--a foreign war. The last difficulty had to be
adjusted and was adjusted without a war and in a manner highly honorable
to all parties concerned. Taxes have been reduced within the last seven
years nearly $300,000,000, and the national debt has been reduced in the
same time over $435,000,000. By refunding the 6 per cent bonded debt for
bonds bearing 5 and 4 1/2 per cent interest, respectively, the annual
interest has been reduced from over $130,000,000 in 1869 to but little
over $100,000,000 in 1876. The balance of trade has been changed from
over $130,000,000 against the United States in 1869 to more than
$120,000,000 in our favor in 1876.

It is confidently believed that the balance of trade in favor of the
United States will increase, not diminish, and that the pledge of
Congress to resume specie payments in 1879 will be easily accomplished,
even in the absence of much-desired further legislation on the subject.

A policy has been adopted toward the Indian tribes inhabiting a large
portion of the territory of the United States which has been humane and
has substantially ended Indian hostilities in the whole land except in a
portion of Nebraska, and Dakota, Wyoming, and Montana Territories--the
Black Hills region and approaches thereto. Hostilities there have grown
out of the avarice of the white man, who has violated our treaty
stipulations in his search for gold. The question might be asked why the
Government has not enforced obedience to the terms of the treaty
prohibiting the occupation of the Black Hills region by whites. The
answer is simple: The first immigrants to the Black Hills were removed
by troops, but rumors of rich discoveries of gold took into that region
increased numbers. Gold has actually been found in paying quantity, and
an effort to remove the miners would only result in the desertion of the
bulk of the troops that might be sent there to remove them. All
difficulty in this matter has, however, been removed--subject to the
approval of Congress--by a treaty ceding the Black Hills and approaches
to settlement by citizens.

The subject of Indian policy and treatment is so fully set forth by the
Secretary of the Interior and the Commissioner of Indian Affairs, and my
views so fully expressed therein, that I refer to their reports and
recommendations as my own.

The relations of the United States with foreign powers continue on a
friendly footing.

Questions have arisen from time to time in the foreign relations of the
Government, but the United States have been happily free during the past
year from the complications and embarrassments which have surrounded
some of the foreign powers.

The diplomatic correspondence submitted herewith contains information as
to certain of the matters which have occupied the Government.

The cordiality which attends our relations with the powers of the earth
has been plainly shown by the general participation of foreign nations
in the exhibition which has just closed and by the exertions made by
distant powers to show their interest in and friendly feelings toward
the United States in the commemoration of the centennial of the nation.
The Government and people of the United States have not only fully
appreciated this exhibition of kindly feeling, but it may be justly and
fairly expected that no small benefits will result both to ourselves and
other nations from a better acquaintance, and a better appreciation of
our mutual advantages and mutual wants.

Congress at its last session saw fit to reduce the amount usually
appropriated for foreign intercourse by withholding appropriations for
representatives of the United States in certain foreign countries and
for certain consular officers, and by reducing the amounts usually
appropriated for certain other diplomatic posts, and thus necessitating
a change in the grade of the representatives. For these reasons,
immediately upon the passage of the bill making appropriations for the
diplomatic and consular service for the present fiscal year,
instructions were issued to the representatives of the United States at
Bolivia, Ecuador, and Colombia, and to the consular officers for whom no
appropriation had been made, to close their respective legations and
consulates and cease from the performance of their duties; and in like
manner steps were immediately taken to substitute charge's d'affaires
for ministers resident in Portugal, Denmark, Greece, Switzerland, and
Paraguay.

While thoroughly impressed with the wisdom of sound economy in the
foreign service, as in other branches of the Government, I can not
escape the conclusion that in some instances the withholding of
appropriations will prove an expensive economy, and that the small
retrenchment secured by a change of grade in certain diplomatic posts is
not an adequate consideration for the loss of influence and importance
which will attend our foreign representatives under this reduction. I am
of the opinion that a reexamination of the subject will cause a change
in some instances in the conclusions reached on these subjects at the
last session of Congress.

The Court of Commissioners of Alabama Claims, whose functions were
continued by an act of the last session of Congress until the 1st day of
January, 1877, has carried on its labors with diligence and general
satisfaction. By a report from the clerk of the court, transmitted
herewith, bearing date November 14, 1876, it appears that within the
time now allowed by law the court will have disposed of all the claims
presented for adjudication. This report also contains a statement of the
general results of the labors of the court to the date thereof. It is a
cause of satisfaction that the method adopted for the satisfaction of
the classes of claims submitted to the court, which are of long standing
and justly entitled to early consideration, should have proved
successful and acceptable.

It is with satisfaction that I am enabled to state that the work of the
joint commission for determining the boundary line between the United
States and British possessions from the northwest angle of the Lake of
the Woods to the Rocky Mountains, commenced in 1872, has been completed.
The final agreements of the commissioners, with the maps, have been duly
signed, and the work of the commission is complete.

The fixing of the boundary upon the Pacific coast by the protocol of
March 10, 1873, pursuant to the award of the Emperor of Germany by
Article XXXIV of the treaty of Washington, with the termination of the
work of this commission, adjusts and fixes the entire boundary between
the United States and the British possessions, except as to the portion
of territory ceded by Russia to the United States under the treaty of
1867. The work intrusted to the commissioner and the officers of the
Army attached to the commission has been well and satisfactorily
performed. The original of the final agreement of the commissioners,
signed upon the 29th of May, 1876, with the original official "lists of
astronomical stations observed," the original official "list of
monuments marking the international boundary line," and the maps,
records, and general reports relating to the commission, have been
deposited in the Department of State. The official report of the
commissioner on the part of the United States, with the report of the
chief astronomer of the United States, will be submitted to Congress
within a short time.

I reserve for a separate communication to Congress a statement of the
condition of the questions which lately arose with Great Britain
respecting the surrender of fugitive criminals under the treaty of 1842.

The Ottoman Government gave notice, under date of January 15, 1874, of
its desire to terminate the treaty of 1862, concerning commerce and
navigation, pursuant to the provisions of the twenty-second article
thereof. Under this notice the treaty terminated upon the 5th day of
June, 1876. That Government has invited negotiations toward the
conclusion of a new treaty.

By the act of Congress of March 23, 1874, the President was authorized,
when he should receive satisfactory information that the Ottoman
Government or that of Egypt had organized new tribunals likely to secure
to citizens of the United States the same impartial justice enjoyed
under the exercise of judicial functions by diplomatic and consular
officers of the United States, to suspend the operation of the act of
June 22, 1860, and to accept for citizens of the United States the
jurisdiction of the new tribunals. Satisfactory information having been
received of the organization of such new tribunals in Egypt, I caused a
proclamation to be issued upon the 27th of March last, suspending the
operation of the act of June 22, 1860, in Egypt, according to the
provisions of the act. A copy of the proclamation accompanies this
message. The United States has united with the other powers in the
organization of these courts. It is hoped that the jurisdictional
questions which have arisen may be readily adjusted, and that this
advance in judicial reform may be hindered by no obstacles.

The necessary legislation to carry into effect the convention respecting
commercial reciprocity concluded with the Hawaiian Islands in 1875
having been had, the proclamation to carry into effect the convention,
as provided by the act approved August 15, 1876, was duly issued upon
the 9th day of September last. A copy thereof accompanies this message.

The commotions which have been prevalent in Mexico for some time past,
and which, unhappily, seem to be not yet wholly quieted, have led to
complaints of citizens of the United States of injuries by persons in
authority. It is hoped, however, that these will ultimately be adjusted
to the satisfaction of both Governments. The frontier of the United
States in that quarter has not been exempt from acts of violence by
citizens of one Republic on those of the other. The frequency of these
is supposed to be increased and their adjustment made more difficult by
the considerable changes in the course of the lower part of the Rio
Grande River, which river is a part of the boundary between the two
countries. These changes have placed on either side of that river
portions of land which by existing conventions belong to the
jurisdiction of the Government on the opposite side of the river. The
subject of adjustment of this cause of difficulty is under consideration
between the two Republics.

The Government of the United States of Colombia has paid the award in
the case of the steamer Montijo, seized by authorities of that
Government some years since, and the amount has been transferred to the
claimants.

It is with satisfaction that I am able to announce that the joint
commission for the adjustment of claims between the United States and
Mexico under the convention of 1868, the duration of which has been
several times extended, has brought its labors to a close. From the
report of the agent of the United States, which accompanies the papers
transmitted herewith, it will be seen that within the time limited by
the commission 1,017 claims on the part of citizens of the United States
against Mexico were referred to the commission. Of these claims 831 were
dismissed or disallowed, and in 186 cases awards were made in favor of
the claimants against the Mexican Republic, amounting in the aggregate
to $4,125,622.20. Within the same period 998 claims on the part of
citizens of the Mexican Republic against the United States were referred
to the commission. Of these claims 831 were dismissed or disallowed, and
in 167 cases awards were made in favor of the claimants against the
United States, amounting in the aggregate to $150,498.41.

By the terms of the convention the amount of these awards is to be
deducted from the amount awarded in favor of our citizens against
Mexico, and the balance only to be paid by Mexico to the United States,
leaving the United States to make provision for this proportion of the
awards in favor of its Own citizens.

I invite your attention to the legislation which will be necessary to
provide for the payment.

In this connection I am pleased to be able to express the
acknowledgments due to Sir Edward Thornton, the umpire of the
commission, who has given to the consideration of the large number of
claims submitted to him much time, unwearied patience, and that firmness
and intelligence which are well known to belong to the accomplished
representative of Great Britain, and which are likewise recognized by
the representative in this country of the Republic of Mexico.

Monthly payments of a very small part of the amount due by the
Government of Venezuela to citizens of the United States on account of
claims of the latter against that Government continue to be made with
reasonable punctuality. That Government has proposed to change the
system which it has hitherto pursued in this respect by issuing bonds
for part of the amount of the several claims. The proposition, however,
could not, it is supposed, properly be accepted, at least without the
consent of the holders of certificates of the indebtedness of Venezuela.
These are so much dispersed that it would be difficult, if not
impossible, to ascertain their disposition on the subject.

In former messages I have called the attention of Congress to the
necessity of legislation with regard to fraudulent naturalization and to
the subject of expatriation and the election of nationality.

The numbers of persons of foreign birth seeking a home in the United
States, the ease and facility with which the honest emigrant may, after
the lapse of a reasonable time, become possessed of all the privileges
of citizenship of the United States, and the frequent occasions which
induce such adopted citizens to return to the country of their birth
render the subject of naturalization and the safeguards which experience
has proved necessary for the protection of the honest naturalized
citizen of paramount importance. The very simplicity in the requirements
of law on this question affords opportunity for fraud, and the want of
uniformity in the proceedings and records of the various courts and in
the forms of the certificates of naturalization issued affords a
constant source of difficulty.

I suggest no additional requirements to the acquisition of citizenship
beyond those now existing, but I invite the earnest attention of
Congress to the necessity and wisdom of some provisions regarding
uniformity in the records and certificates, and providing against the
frauds which frequently take place and for the vacating of a record of
naturalization obtained in fraud.

These provisions are needed in aid and for the protection of the honest
citizen of foreign birth, and for the want of which he is made to suffer
not infrequently. The United States has insisted upon the right of
expatriation, and has obtained, after a long struggle, an admission of
the principle contended for by acquiescence therein on the part of many
foreign powers and by the conclusion of treaties on that subject. It is,
however, but justice to the government to which such naturalized
citizens have formerly owed allegiance, as well as to the United States,
that certain fixed and definite rules should be adopted governing such
cases and providing how expatriation may be accomplished.

While emigrants in large numbers become citizens of the United States,
it is also true that persons, both native born and naturalized, once
citizens of the United States, either by formal acts or as the effect of
a series of facts and circumstances, abandon their citizenship and cease
to be entitled to the protection of the United States, but continue on
convenient occasions to assert a claim to protection in the absence of
provisions on these questions.

And in this connection I again invite your attention to the necessity of
legislation concerning the marriages of American citizens contracted
abroad, and concerning the status of American women who may marry
foreigners and of children born of American parents in a foreign
country.

The delicate and complicated questions continually occurring with
reference to naturalization, expatriation, and the status of such
persons as I have above referred to induce me to earnestly direct your
attention again to these subjects.

In like manner I repeat my recommendation that some means be provided
for the hearing and determination of the just and subsisting claims of
aliens upon the Government of the United States within a reasonable
limitation, and of such as may hereafter arise. While by existing
provisions of law the Court of Claims may in certain cases be resorted
to by an alien claimant, the absence of any general provisions governing
all such cases and the want of a tribunal skilled in the disposition of
such cases upon recognized fixed and settled principles, either provides
no remedy in many deserving cases or compels a consideration of such
claims by Congress or the executive department of the Government.

It is believed that other governments are in advance of the United
States upon this question, and that the practice now adopted is entirely
unsatisfactory.

Congress, by an act approved the 3d day of March, 1875, authorized the
inhabitants of the Territory of Colorado to form a State government,
with the name of the State of Colorado, and therein provided for the
admission of said State, when formed, into the Union upon an equal
footing with the original States.

A constitution having been adopted and ratified by the people of that
State, and the acting governor having certified to me the facts as
provided by said act, together with a copy of such constitution and
ordinances as provided for in the said act, and the provisions of the
said act of Congress having been duly complied with, I issued a
proclamation upon the 1st of August, 1876, a copy of which is hereto
annexed.

The report of the Secretary of War shows that the Army has been actively
employed during the year in subduing, at the request of the Indian
Bureau, certain wild bands of the Sioux Indian Nation and in preserving
the peace at the South during the election. The commission constituted
under the act of July 24, 1876, to consider and report on the "whole
subject of the reform and reorganization of the Army" met in August
last, and has collected a large mass of statistics and opinions bearing
on the subject before it. These are now under consideration, and their
report is progressing. I am advised, though, by the president of the
commission that it will be impracticable to comply with the clause of
the act requiring the report to be presented, through me, to Congress on
the first day of this session, as there has not yet been time for that
mature deliberation which the importance of the subject demands.
Therefore I ask that the time of making the report be extended to the
29th day of January, 1877.

In accordance with the resolution of August 15, 1876, the Army
regulations prepared under the act of March 1, 1875, have not been
promulgated, but are held until after the report of the above-mentioned
commission shall have been received and acted on.

By the act of August 15, 1876, the cavalry force of the Army was
increased by 2,500 men, with the proviso that they should be discharged
on the expiration of hostilities. Under this authority the cavalry
regiments have been strengthened, and a portion of them are now in the
field pursuing the remnants of the Indians with whom they have been
engaged during the summer.

The estimates of the War Department are made up on the basis of the
number of men authorized by law, and their requirements as shown by
years of experience, and also with the purpose on the part of the bureau
officers to provide for all contingencies that may arise during the time
for which the estimates are made. Exclusive of engineer estimates
(presented in accordance with acts of Congress calling for surveys and
estimates for improvements at various localities), the estimates now
presented are about six millions in excess of the appropriations for the
years 1874-75 and 1875-76. This increase is asked in order to provide
for the increased cavalry force (should their services be necessary), to
prosecute economically work upon important public buildings, to provide
for armament of fortifications and manufacture of small arms, and to
replenish the working stock in the supply departments. The
appropriations for these last named have for the past few years been so
limited that the accumulations in store will be entirely exhausted
during the present year, and it will be necessary to at once begin to
replenish them.

I invite your special attention to the following recommendations of the
Secretary of War:

First. That the claims under the act of July 4, 1864, for supplies taken
by the Army during the war be removed from the offices of the
Quartermaster and Commissary Generals and transferred to the Southern
Claims Commission. These claims are of precisely similar nature to those
now before the Southern Claims Commission, and the War Department
bureaus have not the clerical force for their examination nor proper
machinery for investigating the loyalty of the claimants.

Second. That Congress sanction the scheme of an annuity fund for the
benefit of the families of deceased officers, and that it also provide
for the permanent organization of the Signal Service, both of which were
recommended in my last annual message.

Third. That the manufacturing operations of the Ordnance Department be
concentrated at three arsenals and an armory, and that the remaining
arsenals be sold and the proceeds applied to this object by the Ordnance
Department.

The appropriations for river and harbor improvements for the current
year were $5,015,000. With my approval, the Secretary of War directed
that of this amount $2,000,000 should be expended, and no new works
should be begun and none prosecuted which were not of national
importance. Subsequently this amount was increased to $2,237,600, and
the works are now progressing on this basis.

The improvement of the South Pass of the Mississippi River, under James
B. Eads and his associates, is progressing favorably. At the present
time there is a channel of 20.3 feet in depth between the jetties at the
mouth of the pass and 18.5 feet at the head of the pass. Neither
channel, however, has the width required before payments can be made by
the United States. A commission of engineer officers is now examining
these works, and their reports will be presented as soon as received.

The report of the Secretary of the Navy shows that branch of the service
to be in condition as effective as it is possible to keep it with the
means and authority given the Department. It is, of course, not possible
to rival the costly and progressive establishments of great European
powers with the old material of our Navy, to which no increase has been
authorized since the war, except the eight small cruisers built to
supply the place of others which had gone to decay. Yet the most has
been done that was possible with the means at command; and by
substantially rebuilding some of our old ships with durable material and
completely repairing and refitting our monitor fleet the Navy has been
gradually so brought up that, though it does not maintain its relative
position among the progressive navies of the world, it is now in a
condition more powerful and effective than it ever has been in time of
peace.

The complete repairs of our five heavy ironclads are only delayed on
account of the inadequacy of the appropriations made last year for the
working bureaus of the Department, which were actually less in amount
than those made before the war, notwithstanding the greatly enhanced
price of labor and materials and the increase in the cost of the naval
service growing out of the universal use and great expense of steam
machinery. The money necessary for these repairs should be provided at
once, that they may be completed without further unnecessary delay and
expense.

When this is done, all the strength that there is in our Navy will be
developed and useful to its full capacity, and it will be powerful for
purposes of defense, and also for offensive action, should the necessity
for that arise within a reasonable distance from our shores.

The fact that our Navy is not more modern and powerful than it is has
been made a cause of complaint against the Secretary of the Navy by
persons who at the same time criticise and complain of his endeavors to
bring the Navy that we have to its best and most efficient condition;
but the good sense of the country will understand that it is really due
to his practical action that we have at this time any effective naval
force at command.

The report of the Postmaster-General shows the excess of expenditures
(excluding expenditures on account of previous years) over receipts for
the fiscal year ended June 30, 1876, to be $4,151,988.66.

Estimated expenditures for the fiscal year ending June 30, 1878, are
$36,723,432.43.

Estimated revenue for same period is $30,645,165, leaving estimated
excess of expenditure, to be appropriated as a deficiency, of
$6,078,267.43.

The Postmaster-General, like his predecessor, is convinced that a change
in the basis of adjusting the salaries of postmasters of the fourth
class is necessary for the good of the service as well as for the
interests of the Government, and urgently recommends that the
compensation of the class of postmasters above mentioned be based upon
the business of their respective offices, as ascertained from the sworn
returns to the Auditor of stamps canceled.

A few postmasters in the Southern States have expressed great
apprehension of their personal safety on account of their connection
with the postal service, and have specially requested that their reports
of apprehended danger should not be made public lest it should result in
the loss of their lives. But no positive testimony of interference has
been submitted, except in the case of a mail messenger at Spartanburg,
in South Carolina, who reported that he had been violently driven away
while in charge of the mails on account of his political affiliations.
An assistant superintendent of the Railway Mail Service investigated
this case and reported that the messenger had disappeared from his post,
leaving his work to be performed by a substitute. The Postmaster-General
thinks this case is sufficiently suggestive to justify him in
recommending that a more severe punishment should be provided for the
offense of assaulting any person in charge of the mails or of retarding
or otherwise obstructing them by threats of personal injury.

"A very gratifying result is presented in the fact that the deficiency
of this Department during the last fiscal year was reduced to
$4,081,790.18, as against $6,169,938.88 of the preceding year. The
difference can be traced to the large increase in its ordinary receipts
(which greatly exceed the estimates therefor) and a slight decrease in
its expenditures."

The ordinary receipts of the Post-Office Department for the past seven
fiscal years have increased at an average of over 8 per cent per annum,
while the increase of expenditures for the same period has been but
about 5.50 per cent per annum, and the decrease of deficiency in the
revenues has been at the rate of nearly 2 per cent per annum.

The report of the Commissioner of Agriculture accompanying this message
will be found one of great interest, marking, as it does, the great
progress of the last century in the variety of products of the soil;
increased knowledge and skill in the labor of producing, saving, and
manipulating the same to prepare them for the use of man; in the
improvements in machinery to aid the agriculturist in his labors, and in
a knowledge of those scientific subjects necessary to a thorough system
of economy in agricultural production, namely, chemistry, botany,
entomology, etc. A study of this report by those interested in
agriculture and deriving their support from it will find it of value in
pointing out those articles which are raised in greater quantity than
the needs of the world require, and must sell, therefore, for less than
the cost of production, and those which command a profit over cost of
production because there is not an overproduction.

I call special attention to the need of the Department for a new gallery
for the reception of the exhibits returned from the Centennial
Exhibition, including the exhibits donated by very many foreign nations,
and to the recommendations of the Commissioner of Agriculture generally.

The reports of the District Commissioners and the board of health are
just received--too late to read them and to make recommendations
thereon--and are herewith submitted.

The international exhibition held in Philadelphia this year, in
commemoration of the one hundredth anniversary of American independence,
has proven a great success, and will, no doubt, be of enduring advantage
to the country. It has shown the great progress in the arts, sciences,
and mechanical skill made in a single century, and demonstrated that we
are but little behind older nations in any one branch, while in some we
scarcely have a rival. It has served, too, not only to bring peoples and
products of skill and labor from all parts of the world together, but in
bringing together people from all sections of our own country, which
must prove a great benefit in the information imparted and pride of
country engendered.

It has been suggested by scientists interested in and connected with the
Smithsonian Institution, in a communication herewith, that the
Government exhibit be removed to the capital and a suitable building be
erected or purchased for its accommodation as a permanent exhibit. I
earnestly recommend this; and believing that Congress would second this
view, I directed that all Government exhibits at the Centennial
Exhibition should remain where they are, except such as might be injured
by remaining in a building not intended as a protection in inclement
weather, or such as may be wanted by the Department furnishing them,
until the question of permanent exhibition is acted on.

Although the moneys appropriated by Congress to enable the participation
of the several Executive Departments in the International Exhibition of
1876 were not sufficient to carry out the undertaking to the full extent
at first contemplated, it gives me pleasure to refer to the very
efficient and creditable manner in which the board appointed from these
several Departments to provide an exhibition on the part of the
Government have discharged their duties with the funds placed at their
command. Without a precedent to guide them in the preparation of such a
display, the success of their labors was amply attested by the sustained
attention which the contents of the Government building attracted during
the period of the exhibition from both foreign and native visitors.

I am strongly impressed with the value of the collection made by the
Government for the purposes of the exhibition, illustrating, as it does,
the mineral resources of the country, the statistical and practical
evidences of our growth as a nation, and the uses of the mechanical arts
and the applications of applied science in the administration of the
affairs of Government.

Many nations have voluntarily contributed their exhibits to the United
States to increase the interest in any permanent exhibition Congress may
provide for. For this act of generosity they should receive the thanks
of the people, and I respectfully suggest that a resolution of Congress
to that effect be adopted.

The attention of Congress can not be too earnestly called to the
necessity of throwing some greater safeguard over the method of choosing
and declaring the election of a President. Under the present system
there seems to be no provided remedy for contesting the election in any
one State. The remedy is partially, no doubt, in the enlightenment of
electors. The compulsory support of the free school and the
disfranchisement of all who can not read and write the English language,
after a fixed probation, would meet my hearty approval. I would not make
this apply, however, to those already voters, but I would to all
becoming so after the expiration of the probation fixed upon. Foreigners
coming to this country to become citizens, who are educated in their own
language, should acquire the requisite knowledge of ours during the
necessary residence to obtain naturalization. If they did not take
interest enough in our language to acquire sufficient knowledge of it to
enable them to study the institutions and laws of the country
intelligently, I would not confer upon them the right to make such laws
nor to select those who do.

I append to this message, for convenient reference, a synopsis of
administrative events and of all recommendations to Congress made by me
during the last seven years. Time may show some of these recommendations
not to have been wisely conceived, but I believe the larger part will do
no discredit to the Administration. One of these recommendations met
with the united opposition of one political party in the Senate and with
a strong opposition from the other, namely, the treaty for the
annexation of Santo Domingo to the United States, to which I will
specially refer, maintaining, as I do, that if my views had been
concurred in the country would be in a more prosperous condition to-day,
both politically and financially.

Santo Domingo is fertile, and upon its soil may be grown just those
tropical products of which the United States use so much, and which are
produced or prepared for market now by slave labor almost exclusively,
namely, sugar, coffee, dyewoods, mahogany, tropical fruits, tobacco,
etc. About 75 per cent of the exports of Cuba are consumed in the United
States. A large percentage of the exports of Brazil also find the same
market. These are paid for almost exclusively in coin, legislation,
particularly in Cuba, being unfavorable to a mutual exchange of the
products of each country. Flour shipped from the Mississippi River to
Havana can pass by the very entrance to the city on its way to a port in
Spain, there pay a duty fixed upon articles to be reexported,
transferred to a Spanish vessel and brought back almost to the point of
starting, paying a second duty, and still leave a profit over what would
be received by direct shipment. All that is produced in Cuba could be
produced in Santo Domingo. Being a part of the United States, commerce
between the island and mainland would be free. There would be no export
duties on her shipments nor import duties on those coming here. There
would be no import duties upon the supplies, machinery, etc., going from
the States. The effect that would have been produced upon Cuban
commerce, with these advantages to a rival, is observable at a glance.
The Cuban question would have been settled long ago in favor of "free
Cuba." Hundreds of American vessels would now be advantageously used in
transporting the valuable woods and other products of the soil of the
island to a market and in carrying supplies and emigrants to it. The
island is but sparsely settled, while it has an area sufficient for the
profitable employment of several millions of people. The soil would have
soon fallen into the hands of United States capitalists. The products
are so valuable in commerce that emigration there would have been
encouraged; the emancipated race of the South would have found there a
congenial home, where their civil rights would not be disputed and where
their labor would be so much sought after that the poorest among them
could have found the means to go. Thus in cases of great oppression and
cruelty, such as has been practiced upon them in many places within the
last eleven years, whole communities would have sought refuge in Santo
Domingo. I do not suppose the whole race would have gone, nor is it
desirable that they should go. Their labor is desirable--indispensable
almost--where they now are. But the possession of this territory would
have left the negro "master of the situation," by enabling him to demand
his rights at home on pain of finding them elsewhere.

I do not present these views now as a recommendation for a renewal of
the subject of annexation, but I do refer to it to vindicate my previous
action in regard to it.

With the present term of Congress my official life terminates. It is not
probable that public affairs will ever again receive attention from me
further than as a citizen of the Republic, always taking a deep interest
in the honor, integrity, and prosperity of the whole land.

U. S. GRANT

***

State of the Union Address
Rutherford B. Hayes
December 3, 1877

Fellow-Citizens of the Senate and House of Representatives:

With devout gratitude to the bountiful Giver of All Good, I congratulate
you that at the beginning of your first regular session you find our
country blessed with health and peace and abundant harvests, and with
encouraging prospects of an early return of general prosperity.

To complete and make permanent the pacification of the country continues
to be, and until it is fully accomplished must remain, the most
important of all our national interests. The earnest purpose of good
citizens generally to unite their efforts in this endeavor is evident.
It found decided expression in the resolutions announced in 1876 by the
national conventions of the leading political parties of the country.
There was a widespread apprehension that the momentous results in our
progress as a nation marked by the recent amendments to the Constitution
were in imminent jeopardy; that the good understanding which prompted
their adoption, in the interest of a loyal devotion to the general
welfare, might prove a barren truce, and that the two sections of the
country, once engaged in civil strife, might be again almost as widely
severed and disunited as they were when arrayed in arms against each
other.

The course to be pursued, which, in my judgment, seemed wisest in the
presence of this emergency, was plainly indicated in my inaugural
address. It pointed to the time, which all our people desire to see,
when a genuine love of our whole country and of all that concerns its
true welfare shall supplant the destructive forces of the mutual
animosity of races and of sectional hostility. Opinions have differed
widely as to the measures best calculated to secure this great end. This
was to be expected. The measures adopted by the Administration have been
subjected to severe and varied criticism. Any course whatever which
might have been entered upon would certainly have encountered distrust
and opposition. These measures were, in my judgment, such as were most
in harmony with the Constitution and with the genius of our people, and
best adapted, under all the circumstances, to attain the end in view.
Beneficent results, already apparent, prove that these endeavors are not
to be regarded as a mere experiment, and should sustain and encourage us
in our efforts. Already, in the brief period which has elapsed, the
immediate effectiveness, no less than the justice, of the course pursued
is demonstrated, and I have an abiding faith that time will furnish its
ample vindication in the minds of the great majority of my
fellow-citizens. The discontinuance of the use of the Army for the
purpose of upholding local governments in two States of the Union was no
less a constitutional duty and requirement, under the circumstances
existing at the time, than it was a much-needed measure for the
restoration of local self-government and the promotion of national
harmony. The withdrawal of the troops from such employment was effected
deliberately, and with solicitous care for the peace and good order of
society and the protection of the property and persons and every right
of all classes of citizens.

The results that have followed are indeed significant and encouraging.
All apprehension of danger from remitting those States to local
self-government is dispelled, and a most salutary change in the minds of
the people has begun and is in progress in every part of that section of
the country once the theater of unhappy civil strife, substituting for
suspicion, distrust, and aversion, concord, friendship, and patriotic
attachment to the Union. No unprejudiced mind will deny that the
terrible and often fatal collisions which for several years have been of
frequent occurrence and have agitated and alarmed the public mind have
almost entirely ceased, and that a spirit of mutual forbearance and
hearty national interest has succeeded. There has been a general
reestablishment of order and of the orderly administration of justice.
Instances of remaining lawlessness have become of rare occurrence;
political turmoil and turbulence have disappeared; useful industries
have been resumed; public credit in the Southern States has been greatly
strengthened, and the encouraging benefits of a revival of commerce
between the sections of the country lately embroiled in civil war are
fully enjoyed. Such are some of the results already attained, upon which
the country is to be congratulated. They are of such importance that we
may with confidence patiently await the desired consummation that will
surely come with the natural progress of events.

It may not be improper here to say that it should be our fixed and
unalterable determination to protect by all available and proper means
under the Constitution and the laws the lately emancipated race in the
enjoyment of their rights and privileges; and I urge upon those to whom
heretofore the colored people have sustained the relation of bondmen the
wisdom and justice of humane and liberal local legislation with respect
to their education and general welfare. A firm adherence to the laws,
both national and State, as to the civil and political rights of the
colored people, now advanced to full and equal citizenship; the
immediate repression and sure punishment by the national and local
authorities, within their respective jurisdictions, of every instance of
lawlessness and violence toward them, is required for the security alike
of both races, and is justly demanded by the public opinion of the
country and the age. In this way the restoration of harmony and good
will and the complete protection of every citizen in the full enjoyment
of every constitutional right will surely be attained. Whatever
authority rests with me to this end I shall not hesitate to put forth.

Whatever belongs to the power of Congress and the jurisdiction of the
courts of the Union, they may confidently be relied upon to provide and
perform; and to the legislatures, the courts, and the executive
authorities of the several States I earnestly appeal to secure, by
adequate, appropriate, and seasonable means, Within their borders, these
common and uniform rights of a united people which loves liberty, abhors
oppression, and reveres justice. These objects are very dear to my
heart. I shall continue most earnestly to strive for their attainment.
The cordial cooperation of all classes, of all sections of the country
and of both races, is required for this purpose; and with these
blessings assured, and not otherwise, we may safely hope to hand down
our free institutions of government unimpaired to the generations that
will succeed us.

Among the other subjects of great and general importance to the people
of this country, I can not be mistaken, I think, in regarding as
preeminent the policy and measures which are designed to secure the
restoration of the currency to that normal and healthful condition in
which, by the resumption of specie payments, our internal trade and
foreign commerce may be brought into harmony with the system of
exchanges which is based upon the precious metals as the intrinsic money
of the world. In the public judgment that this end should be sought and
compassed as speedily and securely as the resources of the people and
the wisdom of their Government can accomplish, there is a much greater
degree of unanimity than is found to concur in the specific measures
which will bring the country to this desired end or the rapidity of the
steps by which it can be safely reached.

Upon a most anxious and deliberate examination, which I have felt it my
duty to give to the subject, I am but the more confirmed in the opinion
which I expressed in accepting the nomination for the Presidency, and
again upon my inauguration, that the policy of resumption should be
pursued by every suitable means, and that no legislation would be wise
that should disparage the importance or retard the attainment of that
result. I have no disposition, and certainly no right, to question the
sincerity or the intelligence of opposing opinions, and would neither
conceal nor undervalue the considerable difficulties, and even
occasional distresses, which may attend the progress of the nation
toward this primary condition to its general and permanent prosperity. I
must, however, adhere to my most earnest conviction that any wavering in
purpose or unsteadiness in methods, so far from avoiding or reducing the
inconvenience inseparable from the transition from an irredeemable to a
redeemable paper currency, would only tend to increased and prolonged
disturbance in values, and unless retrieved must end in serious
disorder, dishonor, and disaster in the financial affairs of the
Government and of the people.

The mischiefs which I apprehend and urgently deprecate are confined to
no class of the people, indeed, but seem to me most certainly to
threaten the industrious masses, whether their occupations are of
skilled or common labor. To them, it seems to me, it is of prime
importance that their labor should be compensated in money which is
itself fixed in exchangeable value by being irrevocably measured by the
labor necessary to its production. This permanent quality of the money
of the people is sought for, and can only be gained by the resumption of
specie payments. The rich, the speculative, the operating, the
money-dealing classes may not always feel the mischiefs of, or may find
casual profits in, a variable currency, but the misfortunes of such a
currency to those who are paid salaries or wages are inevitable and
remediless.

Closely connected with this general subject of the resumption of specie
payments is one of subordinate, but still of grave, importance; I mean
the readjustment of our coinage system by the renewal of the silver
dollar as an element in our specie currency, endowed by legislation with
the quality of legal tender to a greater or less extent.

As there is no doubt of the power of Congress under the Constitution "to
coin money and regulate the value thereof," and as this power covers the
whole range of authority applicable to the metal, the rated value and
the legal-tender quality which shall be adopted for the coinage, the
considerations which should induce or discourage a particular measure
connected with the coinage, belong clearly to the province of
legislative discretion and of public expediency. Without intruding upon
this province of legislation in the least, I have yet thought the
subject of such critical importance, in the actual condition of our
affairs, as to present an occasion for the exercise of the duty imposed
by the Constitution on the President of recommending to the
consideration of Congress "such measures as he shall judge necessary and
expedient."

Holding the opinion, as I do, that neither the interests of the
Government nor of the people of the United States would be promoted by
disparaging silver as one of the two precious metals which furnish the
coinage of the world, and that legislation which looks to maintaining
the volume of intrinsic money to as full a measure of both metals as
their relative commercial values will permit would be neither unjust nor
inexpedient, I must ask your indulgence to a brief and definite
statement of certain essential features in any such legislative measure
which I feel it my duty to recommend.

I do not propose to enter the debate, represented on both sides by such
able disputants in Congress and before the people and in the press, as
to the extent to which the legislation of any one nation can control
this question, even within its own borders, against the unwritten laws
of trade or the positive laws of other governments. The wisdom of
Congress in shaping any particular law that may be presented for my
approval may wholly supersede the necessity of my entering into these
considerations, and I willingly avoid either vague or intricate
inquiries. It is only certain plain and practical traits of such
legislation that I desire to recommend to your attention.

In any legislation providing for a silver coinage, regulating its value,
and imparting to it the quality of legal tender, it seems to me of great
importance that Congress should not lose sight of its action as
operating in a twofold capacity and in two distinct directions. If the
United States Government were free from a public debt, its legislative
dealing with the question of silver coinage would be purely sovereign
and governmental, under no restraints but those of constitutional power
and the public good as affected by the proposed legislation. But in the
actual circumstances of the nation, with a vast public debt distributed
very widely among our own citizens and held in great amounts also
abroad, the nature of the silver-coinage measure, as affecting this
relation of the Government to the holders of the public debt, becomes an
element, in any proposed legislation, of the highest concern. The
obligation of the public faith transcends all questions of profit or
public advantage otherwise. Its unquestionable maintenance is the
dictate as well of the highest expediency as of the most necessary duty,
and will ever be carefully guarded by Congress and people alike.

The public debt of the United States to the amount of $729,000,000 bears
interest at the rate of 6 per cent, and $708,000,000 at the rate of 5
per cent, and the only way in which the country can be relieved from the
payment of these high rates of interest is by advantageously refunding
the indebtedness. Whether the debt is ultimately paid in gold or in
silver coin is of but little moment compared with the possible reduction
of interest one-third by refunding it at such reduced rate. If the
United States had the unquestioned right to pay its bonds in silver
coin, the little benefit from that process would be greatly overbalanced
by the injurious effect of such payment if made or proposed against the
honest convictions of the public creditors.

All the bonds that have been issued since February 12, 1873, when gold
became the only unlimited legal-tender metallic currency of the country,
are justly payable in gold coin or in coin of equal value. During the
time of these issues the only dollar that could be or was received by
the Government in exchange for bonds was the gold dollar. To require the
public creditors to take in repayment any dollar of less commercial
value would be regarded by them as a repudiation of the full obligation
assumed. The bonds issued prior to 1873 were issued at a time when the
gold dollar was the only coin in circulation or contemplated by either
the Government or the holders of the bonds as the coin in which they
were to be paid. It is far better to pay these bonds in that coin than
to seem to take advantage of the unforeseen fall in silver bullion to
pay in a new issue of silver coin thus made so much less valuable. The
power of the United States to coin money and to regulate the value
thereof ought never to be exercised for the purpose of enabling the
Government to pay its obligations in a coin of less value than that
contemplated by the parties when the bonds were issued. Any attempt to
pay the national indebtedness in a coinage of less commercial value than
the money of the world would involve a violation of the public faith and
work irreparable injury to the public credit.

It was the great merit of the act of March, 1869, in strengthening the
public credit, that it removed all doubt as to the purpose of the United
States to pay their bonded debt in coin. That act was accepted as a
pledge of public faith. The Government has derived great benefit from it
in the progress thus far made in refunding the public debt at low rates
of interest. An adherence to the wise and just policy of an exact
observance of the public faith will enable the Government rapidly to
reduce the burden of interest on the national debt to an amount
exceeding $20,000,000 per annum, and effect an aggregate saving to the
United States of more than $300,000,000 before the bonds can be fully
paid.

In adapting the new silver coinage to the ordinary uses of currency in
the everyday transactions of life and prescribing the quality of legal
tender to be assigned to it, a consideration of the first importance
should be so to adjust the ratio between the silver and the gold
coinage, which now constitutes our specie currency, as to accomplish the
desired end of maintaining the circulation of the two metallic
currencies and keeping up the volume of the two precious metals as our
intrinsic money. It is a mixed question, for scientific reasoning and
historical experience to determine, how far and by what methods a
practical equilibrium can be maintained which will keep both metals in
circulation in their appropriate spheres of common use.

An absolute equality of commercial value, free from disturbing
fluctuations, is hardly attainable, and without it an unlimited legal
tender for private transactions assigned to both metals would
irresistibly tend to drive out of circulation the clearer coinage and
disappoint the principal object proposed by the legislation in view. I
apprehend, therefore, that the two conditions of a near approach to
equality of commercial value between the gold and silver coinage of the
same denomination and of a limitation of the amounts for which the
silver coinage is to be a legal tender are essential to maintaining both
in circulation. If these conditions can be successfully observed, the
issue from the mint of silver dollars would afford material assistance
to the community in the transition to redeemable paper money, and would
facilitate the resumption of specie payment and its permanent
establishment. Without these conditions I fear that only mischief and
misfortune would flow from a coinage of silver dollars with the quality
of unlimited legal tender, even in private transactions.

Any expectation of temporary ease from an issue of silver coinage to
pass as a legal tender at a rate materially above its commercial value
is, I am persuaded, a delusion. Nor can I think that there is any
substantial distinction between an original issue of silver dollars at a
nominal value materially above their commercial value and the
restoration of the silver dollar at a rate which once was, but has
ceased to be, its commercial value. Certainly the issue of our gold
coinage, reduced in weight materially below its legal-tender value,
would not be any the less a present debasement of the coinage by reason
of its equaling, or even exceeding, in weight a gold coinage which at
some past time had been commercially equal to the legal-tender value
assigned to the new issue.

In recommending that the regulation of any silver coinage which may be
authorized by Congress should observe these conditions of commercial
value and limited legal tender, I am governed by the feeling that every
possible increase should be given to the volume of metallic money which
can be kept in circulation, and thereby every possible aid afforded to
the people in the process of resuming specie payments. It is because of
my firm conviction that a disregard of these conditions would frustrate
the good results which are desired from the proposed coinage, and
embarrass with new elements of confusion and uncertainty the business of
the country, that I urge upon your attention these considerations.

I respectfully recommend to Congress that in any legislation providing
for a silver coinage and imparting to it the quality of legal tender
there be impressed upon the measure a firm provision exempting the
public debt heretofore issued and now outstanding from payment, either
of principal or interest, in any coinage of less commercial value than
the present gold coinage of the country.

The organization of the civil service of the country has for a number of
years attracted more and more of the public attention. So general has
become the opinion that the methods of admission to it and the
conditions of remaining in it are unsound that both the great political
parties have agreed in the most explicit declarations of the necessity
of reform and in the most emphatic demands for it. I have fully believed
these declarations and demands to be the expression of a sincere
conviction of the intelligent masses of the people upon the subject, and
that they should be recognized and followed by earnest and prompt action
on the part of the legislative and executive departments of the
Government, in pursuance of the purpose indicated.

Before my accession to office I endeavored to have my own views
distinctly understood, and upon my inauguration my accord with the
public opinion was stated in terms believed to be plain and unambiguous.
My experience in the executive duties has strongly confirmed the belief
in the great advantage the country would find in observing strictly the
plan of the Constitution, which imposes upon the Executive the sole duty
and responsibility of the selection of those Federal officers who by law
are appointed, not elected, and which in like manner assigns to the
Senate the complete right to advise and consent to or to reject the
nominations so made, whilst the House of Representatives stands as the
public censor of the performance of official duties, with the
prerogative of investigation and prosecution in all cases of
dereliction. The blemishes and imperfections in the civil service may,
as I think, be traced in most cases to a practical confusion of the
duties assigned to the several Departments of the Government. My purpose
in this respect has been to return to the system established by the
fundamental law, and to do this with the heartiest cooperation and most
cordial understanding with the Senate and House of Representatives.

The practical difficulties in the selection of numerous officers for
posts of widely varying responsibilities and duties are acknowledged to
be very great. No system can be expected to secure absolute freedom from
mistakes, and the beginning of any attempted change of custom is quite
likely to be more embarrassed in this respect than any subsequent
period. It is here that the Constitution seems to me to prove its claim
to the great wisdom accorded to it. It gives to the Executive the
assistance of the knowledge and experience of the Senate, which, when
acting upon nominations as to which they may be disinterested and
impartial judges, secures as strong a guaranty of freedom from errors of
importance as is perhaps possible in human affairs.

In addition to this, I recognize the public advantage of making all
nominations, as nearly as possible, impersonal, in the sense of being
free from mere caprice or favor in the selection; and in those offices
in which special training is of greatly increased value I believe such a
rule as to the tenure of office should obtain as may induce men of
proper qualifications to apply themselves industriously to the task of
becoming proficients. Bearing these things in mind, I have endeavored to
reduce the number of changes in subordinate places usually made upon the
change of the general administration, and shall most heartily cooperate
with Congress in the better systematizing of such methods and rules of
admission to the public service and of promotion within it as, may
promise to be most successful in making thorough competency, efficiency,
and character the decisive tests in these matters.

I ask the renewed attention of Congress to what has already been done by
the Civil Service Commission, appointed, in pursuance of an act of
Congress, by my predecessor, to prepare and revise civil-service rules.
In regard to much of the departmental service, especially at Washington,
it may be difficult to organize a better system than that which has thus
been provided, and it is now being used to a considerable extent under
my direction. The Commission has still a legal existence, although for
several years no appropriation has been made for defraying its expenses.
Believing that this Commission has rendered valuable service and will be
a most useful agency in improving the administration of the civil
service, I respectfully recommend that a suitable appropriation, to be
immediately available, be made to enable it to continue its labors.

It is my purpose to transmit to Congress as early as practicable a
report by the chairman of the Commission, and to ask your attention to
such measures on this subject as in my opinion will further promote the
improvement of the civil service.

During the past year the United States have continued to maintain
peaceful relations with foreign powers.

The outbreak of war between Russia and Turkey, though at one time
attended by grave apprehension as to its effect upon other European
nations, has had no tendency to disturb the amicable relations existing
between the United States and each of the two contending powers. An
attitude of just and impartial neutrality has been preserved, and I am
gratified to state that in the midst of their hostilities both the
Russian and the Turkish Governments have shown an earnest disposition to
adhere to the obligations of all treaties with the United States and to
give due regard to the rights of American citizens.

By the terms of the treaty defining the rights, immunities, and
privileges of consuls, between Italy and the United States, ratified in
1868, either Government may, after the lapse of ten years, terminate the
existence of the treaty by giving twelve months' notice of its
intention. The Government of Italy, availing itself of this faculty, has
now given the required notice, and the treaty will accordingly end on
the 17th of September, 1878. It is understood, however, that the Italian
Government wishes to renew it in its general scope, desiring only
certain modifications in some of its articles. In this disposition I
concur, and shall hope that no serious obstacles may intervene to
prevent or delay the negotiation of a satisfactory treaty.

Numerous questions in regard to passports, naturalization, and exemption
from military service have continued to arise in cases of emigrants from
Germany who have returned to their native country. The provisions of the
treaty of February 22, 1868, however, have proved to be so ample and so
judicious that the legation of the United States at Berlin has been able
to adjust all claims arising under it, not only without detriment to the
amicable relations existing between the two Governments, but, it is
believed, without injury or injustice to any duly naturalized American
citizen. It is desirable that the treaty originally made with the North
German Union in 1868 should now be extended so as to apply equally to
all the States of the Empire of Germany.

The invitation of the Government of France to participate in the
Exposition of the Products of Agriculture, Industry, and the Fine Arts
to be held at Paris during the coming year was submitted for your
consideration at the extra session. It is not doubted that its
acceptance by the United States, and a well-selected exhibition of the
products of American industry on that occasion, will tend to stimulate
international commerce and emigration, as well as to promote the
traditional friendship between the two countries.

A question arose some time since as to the proper meaning of the
extradition articles of the treaty of 1842 between the United States and
Great Britain. Both Governments, however, are now in accord in the
belief that the question is not one that should be allowed to frustrate
the ends of justice or to disturb the friendship between the two
nations. No serious difficulty has arisen in accomplishing the
extradition of criminals when necessary. It is probable that all points
of disagreement will in due time be settled, and, if need be, more
explicit declarations be made in a new treaty.

The Fishery Commission under Articles XVIII to XXV of the treaty of
Washington has concluded its session at Halifax. The result of the
deliberations of the commission, as made public by the commissioners,
will be communicated to Congress.

A treaty for the protection of trade-marks has been negotiated with
Great Britain, which has been submitted to the Senate for its
consideration.

The revolution which recently occurred in Mexico was followed by the
accession of the successful party to power and the installation of its
chief, General Porfirio Diaz, in the Presidential office. It has been
the custom of the United States, when such changes of government have
heretofore occurred in Mexico, to recognize and enter into official
relations with the de facto government as soon as it should appear to
have the approval of the Mexican people and should manifest a
disposition to adhere to the obligations of treaties and international
friendship. In the present case such official recognition has been
deferred by the occurrences on the Rio Grande border, the records of
which have been already communicated to each House of Congress in answer
to their respective resolutions of inquiry. Assurances have been
received that the authorities at the seat of the Mexican Government have
both the disposition and the power to prevent and punish such unlawful
invasions and depredations. It is earnestly to be hoped that events may
prove these assurances to be well rounded. The best interests of both
countries require the maintenance of peace upon the border and the
development of commerce between the two Republics.

It is gratifying to add that this temporary interruption of official
relations has not prevented due attention by the representatives of the
United States in Mexico to the protection of American citizens, so far
as practicable; nor has it interfered with the prompt payment of the
amounts due from Mexico to the United States under the treaty of July 4,
1868, and the awards of the joint commission. While I do not anticipate
an interruption of friendly relations with Mexico, yet I can not but
look with some solicitude upon a continuance of border disorders as
exposing the two countries to initiations of popular feeling and
mischances of action which are naturally unfavorable to complete amity.
Firmly determined that nothing shall be wanting on my part to promote a
good understanding between the two nations, I yet must ask the attention
of Congress to the actual occurrences on the border, that the lives and
property of our citizens may be adequately protected and peace
preserved.

Another year has passed without bringing to a close the protracted
contest between the Spanish Government and the insurrection in the
island of Cuba. While the United States have sedulously abstained from
any intervention in this contest, it is impossible not to feel that it
is attended with incidents affecting the rights and interests of
American citizens. Apart from the effect of the hostilities upon trade
between the United States and Cuba, their progress is inevitably
accompanied by complaints, having more or less foundation, of searches,
arrests, embargoes, and oppressive taxes upon the property of American
residents, and of unprovoked interference with American vessels and
commerce. It is due to the Government of Spain to say that during the
past year it has promptly disavowed and offered reparation for any
unauthorized acts of unduly zealous subordinates whenever such acts have
been brought to its attention. Nevertheless, such occurrences can not
but tend to excite feelings of annoyance, suspicion, and resentment,
which are greatly to be deprecated, between the respective subjects and
citizens of two friendly powers.

Much delay (consequent upon accusations of fraud in some of the awards)
has occurred in respect to the distribution of the limited amounts
received from Venezuela under the treaty of April 25, 1866, applicable
to the awards of the joint commission created by that treaty. So long as
these matters are pending in Congress the Executive can not assume
either to pass upon the questions presented or to distribute the fund
received. It is eminently desirable that definite legislative action
should be taken, either affirming the awards to be final or providing
some method for reexamination of the claims. Our relations with the
Republics of Central and South America and with the Empire of Brazil
have continued without serious change, further than the temporary
interruption of diplomatic intercourse with Venezuela and with
Guatemala. Amicable relations have already been fully restored with
Venezuela, and it is not doubted that all grounds of misunderstanding
with Guatemala will speedily be removed. From all these countries there
are favorable indications of a disposition on the part of their
Governments and people to reciprocate our efforts in the direction of
increased commercial intercourse.

The Government of the Samoan Islands has sent an envoy, in the person of
its secretary of state, to invite the Government of the United States to
recognize and protect their independence, to establish commercial
relations with their people, and to assist them in their steps toward
regulated and responsible government. The inhabitants of these islands,
having made considerable progress in Christian civilization and the
development of trade, are doubtful of their ability to maintain peace
and independence without the aid of some stronger power. The subject is
deemed worthy of respectful attention, and the claims upon our
assistance by this distant community will be carefully considered.

The long commercial depression in the United States has directed
attention to the subject of the possible increase of our foreign trade
and the methods for its development, not only with Europe, but with
other countries, and especially with the States and sovereignties of the
Western Hemisphere. Instructions from the Department of State were
issued to the various diplomatic and consular officers of the
Government, asking them to devote attention to the question of methods
by which trade between the respective countries of their official
residence and the United States could be most judiciously fostered. In
obedience to these instructions, examinations and reports upon this
subject have been made by many of these officers and transmitted to the
Department, and the same are submitted to the consideration of Congress.

The annual report of the Secretary of the Treasury on the state of the
finances presents important questions for the action of Congress, upon
some of which I have already remarked.

The revenues of the Government during the fiscal year ending June 30,
1877, were $269,000,586.62; the total expenditures for the same period
were $238,660,008.93, leaving a surplus revenue of $30,340,577.69. This
has substantially supplied the requirements of the sinking fund for that
year. The estimated revenues of the current fiscal year are
$265,500,000, and the estimated expenditures for the same period are
$232,430,643.72. If these estimates prove to be correct, there will be a
surplus revenue of $33,069,356.28--an amount nearly sufficient for the
sinking fund for that year. The estimated revenues for the next fiscal
year are $269,250,000. It appears from the report that during the last
fiscal year the revenues of the Government, compared with the previous
year, have largely decreased. This decrease, amounting to the sum of
$18,481,452.54, was mainly in customs duties, caused partly by a large
falling off of the amount of imported dutiable goods and partly by the
general fall of prices in the markets of production of such articles as
pay ad valorem taxes.

While this is felt injuriously in the diminution of the revenue, it has
been accompanied with a very large increase of exportations. The total
exports during the last fiscal year, including coin, have been
$658,637,457, and the imports have been $492,097,540, leaving a balance
of trade in favor of the United States amounting to the sum of
$166,539,917, the beneficial effects of which extend to all branches of
business.

The estimated revenue for the next fiscal year will impose upon Congress
the duty of strictly limiting appropriations, including the requisite
sum for the maintenance of the sinking fund, within the aggregate
estimated receipts.

While the aggregate of taxes should not be increased, amendments might
be made to the revenue laws that would, without diminishing the revenue,
relieve the people from unnecessary burdens. A tax on tea and coffee is
shown by the experience not only of our own country, but of other
countries, to be easily collected, without loss by undervaluation or
fraud, and largely borne in the country of production. A tax of 10 cents
a pound on tea and 2 cents a pound on coffee would produce a revenue
exceeding $12,000,000, and thus enable Congress to repeal a multitude of
annoying taxes yielding a revenue not exceeding that sum. The
internal-revenue system grew out of the necessities of the war, and most
of the legislation imposing taxes upon domestic products under this
system has been repealed. By the substitution of a tax on tea and coffee
all forms of internal taxation may be repealed, except that on whisky,
spirits, tobacco, and beer. Attention is also called to the necessity of
enacting more vigorous laws for the protection of the revenue and for
the punishment of frauds and smuggling. This can best be done by
judicious provisions that will induce the disclosure of attempted fraud
by undervaluation and smuggling. All revenue laws should be simple in
their provisions and easily understood. So far as practicable, the rates
of taxation should be in the form of specific duties, and not ad
valorem, requiring the judgment of experienced men to ascertain values
and exposing the revenue to the temptation of fraud.

My attention has been called during the recess of Congress to abuses
existing in the collection of the customs, and strenuous efforts have
been made for their correction by Executive orders. The recommendations
submitted to the Secretary of the Treasury by a commission appointed to
examine into the collection of customs duties at the port of New York
contain many suggestions for the modification of the customs laws, to
which the attention of Congress is invited.

It is matter of congratulation that notwithstanding the severe burdens
caused by the war the public faith with all creditors has been
preserved, and that as the result of this policy the public credit has
continuously advanced and our public securities are regarded with the
highest favor in the markets of the world. I trust that no act of the
Government will cast a shadow upon its credit.

The progress of refunding the public debt has been rapid and
satisfactory. Under the contract existing when I entered upon the
discharge of the duties of my office, bonds bearing interest at the rate
of 4 1/2 per cent were being rapidly sold, and within three months the
aggregate sales of these bonds had reached the sum of $200,000,000. With
my sanction the Secretary of the Treasury entered into a new contract
for the sale of 4 per cent bonds, and within thirty days after the
popular subscription for such bonds was opened subscriptions were had
amounting to $75,496,550, which were paid for within ninety days after
the date of subscription. By this process, within but little more than
one year, the annual interest on the public debt was reduced in the sum
of $3,775,000.

I recommended that suitable provision be made to enable the people to
easily convert their savings into Government securities, as the best
mode in which small savings may be well secured and yield a moderate
interest. It is an object of public policy to retain among our own
people the securities of the United States. In this way our country is
guarded against their sudden return from foreign countries, caused by
war or other disturbances beyond our limits.

The commerce of the United States with foreign nations, and especially
the export of domestic productions, has of late years largely increased;
but the greater portion of this trade is conducted in foreign vessels.
The importance of enlarging our foreign trade, and especially by direct
and speedy interchange with countries on this continent, can not be
overestimated; and it is a matter of great moment that our own shipping
interest should receive, to the utmost practical extent, the benefit of
our commerce with other lands. These considerations are forcibly urged
by all the large commercial cities of the country, and public attention
is generally and wisely attracted to the solution of the problems they
present. It is not doubted that Congress will take them up in the
broadest spirit of liberality and respond to the public demand by
practical legislation upon this important subject.

The report of the Secretary of War shows that the Army has been actively
employed during the year, and has rendered very important service in
suppressing hostilities in the Indian country and in preserving peace
and protecting life and property in the interior as well as along the
Mexican border. A long and arduous campaign has been prosecuted, with
final complete success, against a portion of the Nez Perce tribe of
Indians. A full account of this campaign will be found in the report of
the General of the Army. It will be seen that in its course several
severe battles were fought, in which a number of gallant officers and
men lost their lives. I join with the Secretary of War and the General
of the Army in awarding to the officers and men employed in the long and
toilsome pursuit and in the final capture of these Indians the honor and
praise which are so justly their due.

The very serious riots which occurred in several of the States in July
last rendered necessary the employment of a considerable portion of the
Army to preserve the peace and maintain order. In the States of West
Virginia, Maryland, Pennsylvania, and Illinois these disturbances were
so formidable as to defy the local and State authorities, and the
National Executive was called upon, in the mode provided by the
Constitution and laws, to furnish military aid. I am gratified to be
able to state that the troops sent in response to these calls for aid in
the suppression of domestic violence were able, by the influence of
their presence in the disturbed regions, to preserve the peace and
restore order without the use of force. In the discharge of this
delicate and important duty both officers and men acted with great
prudence and courage, and for their services deserve the thanks of the
country.

Disturbances along the Rio Grande in Texas, to which I have already
referred, have rendered necessary the constant employment of a military
force in that vicinity. A full report of all recent military operations
in that quarter has been transmitted to the House of Representatives in
answer to a resolution of that body, and it will therefore not be
necessary to enter into details. I regret to say that these lawless
incursions into our territory by armed bands from the Mexican side of
the line, for the purpose of robbery, have been of frequent occurrence,
and in spite of the most vigilant efforts of the commander of our forces
the marauders have generally succeeded in escaping into Mexico with
their plunder. In May last I gave orders for the exercise of the utmost
vigilance on the part of our troops for the suppression of these raids
and the punishment of the guilty parties, as well as the recapture of
property stolen by them. General Ord, commanding in Texas, was directed
to invite the cooperation of the Mexican authorities in efforts to this
end, and to assure them that I was anxious to avoid giving the least
offense to Mexico. At the same time, he was directed to give notice of
my determination to put an end to the invasion of our territory by
lawless bands intent upon the plunder of our peaceful citizens, even if
the effectual punishment of the outlaws should make the crossing of the
border by our troops in their pursuit necessary. It is believed that
this policy has had the effect to check somewhat these depredations, and
that with a considerable increase of our force upon that frontier and
the establishment of several additional military posts along the Rio
Grande, so as more effectually to guard that extensive border, peace may
be preserved and the lives and property of our citizens in Texas fully
protected.

Prior to the 1st day of July last the Army was, in accordance with law,
reduced to the maximum of 25,000 enlisted men, being a reduction of
2,500 below the force previously authorized. This reduction was made, as
required by law, entirely from the infantry and artillery branches of
the service, without any reduction of the cavalry. Under the law as it
now stands it is necessary that the cavalry regiments be recruited to
100 men in each company for service on the Mexican and Indian frontiers.
The necessary effect of this legislation is to reduce the infantry and
artillery arms of the service below the number required for efficiency,
and I concur with the Secretary of War in recommending that authority be
given to recruit all companies of infantry to at least 50 men and all
batteries of artillery to at least 75 men, with the power, in case of
emergency, to increase the former to 100 and the latter to 122 men each.

I invite your special attention to the following recommendations of the
Secretary of War:

First. That provision be made for supplying to the Army a more abundant
and better supply of reading matter.

Second. That early action be taken by Congress looking to a complete
revision and republication of the Army Regulations.

Third. That section 1258 of the Revised Statutes, limiting the number of
officers on the retired list, be repealed.

Fourth. That the claims arising under the act of July 4, 1864, for
supplies taken by the Army during the war, be taken from the offices of
the Quartermaster and Commissary Generals and transferred to the
Southern Claims Commission, or some other tribunal having more time and
better facilities for their prompt investigation and decision than are
possessed by these officers.

Fifth. That Congress provide for an annuity fund for the families of
deceased soldiers, as recommended by the paymaster-General of the Army.

The report of the Secretary of the Navy shows that we have six squadrons
now engaged in the protection of our foreign commerce and other duties
pertaining to the naval service. The condition and operations of the
Department are also shown. The total expenditures for the fiscal year
ending June 30, 1877, were $16,077,974.54. There are unpaid claims
against the Department chargeable to the last year, which are presented
to the consideration of Congress by the report of the Secretary. The
estimates for the fiscal year commencing July 1, 1878, are
$16,233,234.40, exclusive of the sum of $2,314,231 submitted for new
buildings, repairs, and improvements at the several navy-yards. The
appropriations for the present fiscal year, commencing July 1, 1877, are
$13,592,932.90. The amount drawn from the Treasury from July 1 to
November 1, 1877, is $5,343,037.40, of which there is estimated to be
yet available $1,029,528.30, showing the amount of actual expenditure
during the first four months of the present fiscal year to have been
$4,313,509.10.

The report of the Postmaster-General contains a full and clear statement
of the operations and condition of the Post-Office Department. The
ordinary revenues of the Department for the fiscal year ending June 30,
1877, including receipts from the money-order business and from official
stamps and stamped envelopes, amounted to the sum of $27,531,585.26. The
additional sum of $7,013,000 was realized from appropriations from the
general Treasury for various purposes, making the receipts from all
sources $34,544,885.26. The total expenditures during the fiscal year
amounted to $33,486,322.44, leaving an excess of total receipts over
total expenditures of $1,058,562.82, and an excess of total expenditures
over ordinary receipts of $5,954,737.18. Deducting from the total
receipts the sum of $63,261.84, received from international money orders
of the preceding fiscal year, and deducting from the total expenditures
the sum of $1,163,818.20, paid on liabilities incurred in previous
fiscal years, the expenditures and receipts appertaining to the business
of the last fiscal year were as follows:

Expenditures - $32,322,504.24

Receipts (ordinary, from money-order business and from official postage
stamps) - 27,468,323,420 -

***

State of the Union Address
Rutherford B. Hayes
December 2, 1878

Fellow-Citizens of the Senate and House of Representatives:

Our heartfelt gratitude is due to the Divine Being who holds in His
hands the destinies of nations for the continued bestowal during the
last year of countless blessings upon our country.

We are at peace with all other nations. Our public credit has greatly
improved, and is perhaps now stronger than ever before. Abundant
harvests have rewarded the labors of those who till the soil, our
manufacturing industries are reviving, and it is believed that general
prosperity, which has been so long anxiously looked for, is at last
within our reach.

The enjoyment of health by our people generally has, however, been
interrupted during the past season by the prevalence of a fatal
pestilence (the yellow fever) in some portions of the Southern States,
creating an emergency which called for prompt and extraordinary measures
of relief. The disease appeared as an epidemic at New Orleans and at
other places on the Lower Mississippi soon after midsummer. It was
rapidly spread by fugitives from the infected cities and towns, and did
not disappear until early in November. The States of Louisiana,
Mississippi, and Tennessee have suffered severely. About 100,000 cases
are believed to have occurred, of which about 20,000, according to
intelligent estimates, proved fatal. It is impossible to estimate with
any approach to accuracy the loss to the country occasioned by this
epidemic It is to be reckoned by the hundred millions of dollars. The
suffering and destitution that resulted excited the deepest sympathy in
all parts of the Union. Physicians and nurses hastened from every
quarter to the assistance of the afflicted communities. Voluntary
contributions of money and supplies, in every needed form, were speedily
and generously furnished. The Government was able to respond in some
measure to the call for help, by providing tents, medicines, and food
for the sick and destitute, the requisite directions for the purpose
being given in the confident expectation that this action of the
Executive would receive the sanction of Congress. About 1,800 tents, and
rations of the value of about $25,000, were sent to cities and-towns
which applied for them, full details of which will be furnished to
Congress by the proper Department.

The fearful spread of this pestilence has awakened a very general public
sentiment in favor of national sanitary administration, which shall not
only control quarantine, but have the sanitary supervision of internal
commerce in times of epidemics, and hold an advisory relation to the
State and municipal health authorities, with power to deal with whatever
endangers the public health, and which the municipal and State
authorities are unable to regulate. The national quarantine act approved
April 29, 1878, which was passed too late in the last session of
Congress to provide the means for carrying it into practical operation
during the past season, is a step in the direction here indicated. In
view of the necessity for the most effective measures, by quarantine and
otherwise, for the protection of our seaports and the country generally
from this and other epidemics, it is recommended that Congress give to
the whole subject early and careful consideration.

The permanent pacification of the country by the complete protection of
all citizens in every civil and political right continues to be of
paramount interest with the great body of our people. Every step in this
direction is welcomed with public approval, and every interruption of
steady and uniform progress to the desired consummation awakens general
uneasiness and widespread condemnation. The recent Congressional
elections have furnished a direct and trustworthy test of the advance
thus far made in the practical establishment of the right of suffrage
secured by the Constitution to the liberated race in the Southern
States. All disturbing influences, real or imaginary, had been removed
from all of these States.

The three constitutional amendments which conferred freedom and equality
of civil and political rights upon the colored people of the South were
adopted by the concurrent action of the great body of good citizens who
maintained the authority of the National Government and the integrity
and perpetuity of the Union at such a cost of treasure and life, as a
wise and necessary embodiment in the organic law of the just results of
the war. The people of the former slaveholding States accepted these
results, and gave in every practicable form assurances that the
thirteenth, fourteenth, and fifteenth amendments, and laws passed in
pursuance thereof, should in good faith be enforced, rigidly and
impartially, in letter and spirit, to the end that the humblest citizen,
without distinction of race or color, should under them receive full and
equal protection in person and property and in political rights and
privileges. By these constitutional amendments the southern section of
the Union obtained a large increase of political power in Congress and
in the electoral college, and the country justly expected that elections
would proceed, as to the enfranchised race, upon the same circumstances
of legal and constitutional freedom and protection which obtained in all
the other States of the Union. The friends of law and order looked
forward to the conduct of these elections as offering to the general
judgment of the country an important opportunity to measure the degree
in which the right of suffrage could be exercised by the colored people
and would be respected by their fellow-citizens; but a more general
enjoyment of freedom of suffrage by the colored people and a more just
and generous protection of that freedom by the communities of which they
form a part were generally anticipated than the record of the elections
discloses. In some of those States in which the colored people have been
unable to make their opinions felt in the elections the result is mainly
due to influences not easily measured or remedied by legal protection;
but in the States of Louisiana and South Carolina at large, and in some
particular Congressional districts outside of those States, the records
of the elections seem to compel the conclusion that the rights of the
colored voters have been overridden and their participation in the
elections not permitted to be either general or free.

It will be for the Congress for which these elections were held to make
such examinations into their conduct as may be appropriate to determine
the validity of the claims of members to their seats. In the meanwhile
it becomes the duty of the executive and judicial departments of the
Government, each in its province, to inquire into and punish violations
of the laws of the United States which have occurred. I can but repeat
what I said in this connection in my last message, that whatever
authority rests with me to this end I shall not hesitate to put forth;
and I am unwilling to forego a renewed appeal to the legislatures, the
courts, the executive authorities, and the people of the States where
these wrongs have been perpetrated to give their assistance toward
bringing to justice the offenders and preventing a repetition of the
crimes. No means within my power will be spared to obtain a full and
fair investigation of the alleged crimes and to secure the conviction
and just punishment of the guilty.

It is to be observed that the principal appropriation made for the
Department of Justice at the last session contained the following
clause: And for defraying the expenses which may be incurred in the
enforcement of the act approved February 28, 1871, entitled "An act to
amend an act approved May 31, 1870, entitled 'An act to enforce the
rights of citizens of the United States to vote in the several States of
this Union, and for other purposes,'" or any acts amendatory thereof or
supplementary thereto. It is the opinion of the Attorney-General that
the expenses of these proceedings will largely exceed the amount which
was thus provided, and I rely confidently upon Congress to make adequate
appropriations to enable the executive department to enforce the laws.

I respectfully urge upon your attention that the Congressional
elections, in every district, in a very important sense, are justly a
matter of political interest and concern throughout the whole country.
Each State, every political party, is entitled to the share of power
which is conferred by the legal and constitutional suffrage. It is the
right of every citizen possessing the qualifications prescribed by law
to east one unintimidated ballot and to have his ballot honestly
counted. So long as the exercise of this power and the enjoyment of this
right are common and equal, practically as well as formally, submission
to the results of the suffrage will be accorded loyally and cheerfully,
and all the departments of Government will feel the true vigor of the
popular will thus expressed. No temporary or administrative interests of
Government, however urgent or weighty, will ever displace the zeal of
our people in defense of the primary rights of citizenship. They
understand that the protection of liberty requires the maintenance in
full vigor of the manly methods of free speech, free press, and free
suffrage, and will sustain the full authority of Government to enforce
the laws which are framed to preserve these inestimable rights. The
material progress and welfare of the States depend on the protection
afforded to their citizens. There can be no peace without such
protection, no prosperity without peace, and the whole country is deeply
interested in the growth and prosperity of all its parts.

While the country has not yet reached complete unity of feeling and
reciprocal confidence between the communities so lately and so seriously
estranged, I feel an absolute assurance that the tendencies are in that
direction, and with increasing force. The power of public opinion will
override all political prejudices and all sectional or State attachments
in demanding that all over our wide territory the name and character of
citizen of the United States shall mean one and the same thing and carry
with them unchallenged security and respect.

Our relations with other countries continue peaceful. Our neutrality in
contests between foreign powers has been maintained and respected.

The Universal Exposition held at Paris during the past summer has been
attended by large numbers of our citizens. The brief period allowed for
the preparation and arrangement of the contributions of our citizens to
this great exposition was well employed in energetic and judicious
efforts to overcome this disadvantage. These efforts, led and directed
by the commissioner-general, were remarkably successful, and the
exhibition of the products of American industry was creditable and
gratifying in scope and character. The reports of the United States
commissioners, giving its results in detail, will be duly laid before
you. Our participation in this international competition for the favor
and the trade of the world may be expected to produce useful and
important results--in promoting intercourse, friendship, and commerce
with other nations.

In accordance with the provisions of the act of February 28, 1878, three
commissioners were appointed to an international conference on the
subject of adopting a common ratio between gold and silver, for the
purpose of establishing internationally the use of bimetallic money and
securing fixity of relative value between those metals.

Invitations were addressed to the various governments which had
expressed a willingness to participate in its deliberations. The
conference held its meetings in Paris in August last. The report of the
commissioners, herewith submitted, will show its results. No common
ratio between gold and silver could be agreed upon by the conference.
The general conclusion was reached that it is necessary to maintain in
the world the monetary functions of silver as well as of gold, leaving
the selection of the use of one or the other of these two metals, or of
both, to be made by each state.

Congress having appropriated at its last session the sum of $5,500,000
to pay the award of the joint commission at Halifax, if, after
correspondence with the British Government on the subject of the
conformity of the award to the requirements of the treaty and to the
terms of the question thereby submitted to the commission, the President
shall deem it his duty to make the payment, communications upon these
points were addressed to the British Government through the legation of
the United States at London. Failing to obtain the concurrence of the
British Government in the views of this Government respecting the award,
I have deemed it my duty to tender the sum named within the year fixed
by the treaty, accompanied by a notice of the grounds of the payment and
a protest against any other construction of the same. The correspondence
upon this subject will be laid before you.

The Spanish Government has officially announced the termination of the
insurrection in Cuba and the restoration of peace throughout that
island. Confident expectations are expressed of a revival of trade and
prosperity, which it is earnestly hoped may prove well rounded. Numerous
claims of American citizens for relief for injuries or restoration of
property have been among the incidents of the long-continued
hostilities. Some of these claims are in process of adjustment by Spain,
and the others are promised early and careful consideration.

The treaty made with Italy in regard to reciprocal consular privileges
has been duly ratified and proclaimed.

No questions of grave importance have arisen with any other of the
European powers.

The Japanese Government has been desirous of a revision of such parts of
its treaties with foreign powers as relate to commerce, and it is
understood has addressed to each of the treaty powers a request to open
negotiations with that view. The United States Government has been
inclined to regard the matter favorably. Whatever restrictions upon
trade with Japan are found injurious to that people can not but affect
injuriously nations holding commercial intercourse with them. Japan,
after a long period of seclusion, has within the past few years made
rapid strides in the path of enlightenment and progress, and, not
unreasonably, is looking forward to the time when her relations with the
nations of Europe and America shall be assimilated to those which they
hold with each other. A treaty looking to this end has been made, which
will be submitted for the consideration of the Senate.

After an interval of several years the Chinese Government has again sent
envoys to the United States. They have been received, and a permanent
legation is now established here by that Government. It is not doubted
that this step will be of advantage to both nations in promoting
friendly relations and removing causes of difference.

The treaty with the Samoan Islands, having been duly ratified and
accepted on the part of both Governments, is now in operation, and a
survey and soundings of the harbor of Pago-Pago have been made by a
naval vessel of the United States, with a view of its occupation as a
naval station if found desirable to the service.

Since the resumption of diplomatic relations with Mexico correspondence
has been opened and still continues between the two Governments upon the
various questions which at one time seemed to endanger their relations.
While no formal agreement has been reached as to the troubles on the
border, much has been done to repress and diminish them. The effective
force of United States troops on the Rio Grande, by a strict and
faithful compliance with instructions, has done much to remove the
sources of dispute, and it is now understood that a like force of
Mexican troops on the other side of the river is also making an
energetic movement against the marauding Indian tribes. This Government
looks with the greatest satisfaction upon every evidence of strength in
the national authority of Mexico, and upon every effort put forth to
prevent or to punish incursions upon our territory. Reluctant to assume
any action or attitude in the control of these incursions by military
movements across the border not imperatively demanded for the protection
of the lives and property of our own citizens, I shall take the earliest
opportunity consistent with the proper discharge of this plain duty to
recognize the ability of the Mexican Government to restrain effectively
violations of our territory. It is proposed to hold next year an
international exhibition in Mexico, and it is believed that the display
of the agricultural and manufacturing products of the two nations will
tend to better understanding and increased commercial intercourse
between their people.

With Brazil and the Republics of Central and South America some steps
have been taken toward the development of closer commercial intercourse.
Diplomatic relations have been resumed with Colombia and with Bolivia. A
boundary question between the Argentine Republic and Paraguay has been
submitted by those Governments for arbitration to the President of the
United States, and I have, after careful examination, given a decision
upon it.

A naval expedition up the Amazon and Madeira rivers has brought back
information valuable both for scientific and commercial purposes. A like
expedition is about visiting the coast of Africa and the Indian Ocean.
The reports of diplomatic and consular officers in relation to the
development of our foreign commerce have furnished many facts that have
proved of public interest and have stimulated to practical exertion the
enterprise of our people.

The report of the Secretary of the Treasury furnishes a detailed
statement of the operations of that Department of the Government and of
the condition of the public finances.

The ordinary revenues from all sources for the fiscal year ended June
30, 1878, were $257,763,878.70; the ordinary expenditures for the same
period were $236,964,326.80, leaving a surplus revenue for the year of
$20,799,551.90. The receipts for the present fiscal year, ending June
30, 1879, actual and estimated, are as follows: Actual receipts for the
first quarter, commencing July 1, 1878, $73,389,743.43; estimated
receipts for the remaining three quarters of the year, $191,110,256.57;
total receipts for the current fiscal year, actual and estimated,
$264,500,000. The expenditures for the same period will be, actual and
estimated, as follows: For the quarter commencing July 1, 1878, actual
expenditures, $73,344,573.27; and for the remaining three quarters of
the year the expenditures are estimated at $166,755,426.73, making the
total expenditures $240,100,000, and leaving an estimated surplus
revenue for the year ending June 30, 1879, of $24,400,000. The total
receipts during the next fiscal year, ending June 30, 1880, estimated
according to existing laws, will be $264,500,000, and the estimated
ordinary expenditures for the same period will be $236,320,412.68,
leaving a surplus of $28,179,587.32 for that year.

In the foregoing statements of expenditures, actual and estimated, no
amount is allowed for the sinking fund provided for by the act approved
February 25, 1862, which requires that 1 per cent of the entire debt of
the United States shall be purchased or paid within each fiscal year, to
be set apart as a sinking fund. There has been, however, a substantial
compliance with the conditions of the law. By its terms the public debt
should have been reduced between 1862 and the close of the last fiscal
year $518,361,806.28; the actual reduction of the ascertained debt in
that period has been $720,644,739.61, being in excess of the reduction
required by the sinking fund act $202,282,933.33.

The amount of the public debt, less cash in the Treasury, November 1,
1878, was $2,024,200,083.18 a reduction since the same date last year of
$23,150,617.39.

The progress made during the last year in refunding the public debt at
lower rates of interest is very gratifying. The amount of 4 per cent
bonds sold during the present year prior to November 23, 1878, is
$100,270,900, and 6 per cent bonds, commonly known as five-twenties, to
an equal amount, have been or will be redeemed as calls mature.

It has been the policy of the Department to place the 4 per cent bonds
within easy reach of every citizen who desires to invest his savings,
whether small or great, in these securities. The Secretary of the
Treasury recommends that the law be so modified that small sums may be
invested, and that through the post-offices or other agents of the
Government the freest opportunity may be given in all parts of the
country for such investments.

The best mode suggested is that the Department be authorized to issue
certificates of deposit, of the denomination of $10, bearing interest at
the rate of 3.65 per cent per annum and convertible at any time within
one year after their issue into the 4 per cent bonds authorized by the
refunding act, and to be issued only in exchange for United States notes
sent to the Treasury by mail or otherwise. Such a provision of law,
supported by suitable regulations, would enable any person readily,
without cost or risk, to convert his money into an interest-bearing
security of the United States, and the money so received could be
applied to the redemption of 6 per cent bonds.

The coinage of gold during the last fiscal year was $52,798,980. The
coinage of silver dollars under the act passed February 28, 1878,
amounted on the 23d of November, 1878, to $19,814,550, of which amount
$4,984,947 are in circulation, and the balance, $14,829,603, is still in
the possession of the Government.

With views unchanged with regard to the act under which the coinage of
silver proceeds, it has been the purpose of the Secretary faithfully to
execute the law and to afford a fair trial to the measure.

In the present financial condition of the country I am persuaded that
the welfare of legitimate business and industry of every description
will be best promoted by abstaining from all attempts to make radical
changes in the existing financial legislation. Let it be understood that
during the coming year the business of the country will be undisturbed
by governmental interference with the laws affecting it, and we may
confidently expect that the resumption of specie payments, which will
take place at the appointed time, will be successfully and easily
maintained, and that it will be followed by a healthful and enduring
revival of business prosperity.

Let the healing influence of time, the inherent energies of our people,
and the boundless resources of our country have a fair opportunity, and
relief from present difficulties will surely follow.

The report of the Secretary of War shows that the Army has been well and
economically supplied; that our small force has been actively employed
and has faithfully performed all the service required of it. The morale
of the Army has improved and the number of desertions has materially
decreased during the year.

The Secretary recommends--

1. That a pension be granted to the widow of the late Lieutenant Henry
H. Benner, Eighteenth Infantry, who lost his life by yellow fever while
in command of the steamer. J.M. Chambers, sent with supplies for the
relief of sufferers in the South from that disease.

2. The establishment of the annuity scheme for the benefit of the heirs
of deceased officers, as suggested by the Paymaster-General.

3. The adoption by Congress of a plan for the publication of the records
of the War of the Rebellion, now being prepared for that purpose.

4. The increase of the extra per diem of soldier teachers employed in
post schools, and liberal appropriations for the erection of buildings
for schools and libraries at the different posts.

5. The repeal or amendment of the act of June 18, 1878, forbidding the
use of the Army "as a posse comitatus, or otherwise, for the purpose of
executing the laws, except in such cases and under such circumstances as
such employment of said force may be expressly authorized by the
Constitution or by act of Congress."

6. The passage of a joint resolution of Congress legalizing the issues
of rations, tents, and medicines which were made for the relief of
sufferers from yellow fever.

7. That provision be made for the erection of a fireproof building for
the preservation of certain valuable records, now constantly exposed to
destruction by fire.

These recommendations are all commended to your favorable consideration.

The report of the Secretary of the Navy shows that the Navy has improved
during the last fiscal year. Work has been done on seventy-five vessels,
ten of which have been thoroughly repaired and made ready for sea. Two
others are in rapid progress toward completion. The total expenditures
of the year, including the amount appropriated for the deficiencies of
the previous year, were $17,468,392.65. The actual expenses chargeable
to the year, exclusive of these deficiencies, were $13,306,914.09, or
$767,199.18 less than those of the previous year, and $4,928,677.74 less
than the expenses including the deficiencies. The estimates for the
fiscal year ending June 30, 1880, are $14,562,381.45, exceeding the
appropriations of the present year only $33,949.75, which excess is
occasioned by the demands of the Naval Academy and the Marine Corps, as
explained in the Secretary's report. The appropriations for the present
fiscal year are $14,528,431.70, which, in the opinion of the Secretary,
will be ample for all the current expenses of the Department during the
year. The amount drawn from the Treasury from July 1 to November 1,
1878, is $4,740,544.14, of which $70,980.75 has been refunded, leaving
as the expenditure for that period $4,669,563.39, or $520,899.24 less
than the corresponding period of the last fiscal year.

The report of the Postmaster-General embraces a detailed statement of
the operations of the Post-Office Department. The expenditures of that
Department for the fiscal year ended June 30, 1878, were $34,165,084.49.
The receipts, including sales of stamps, money-order business, and
official stamps, were $29,277,516.95. The sum of $290,436.90, included
in the foregoing statement of expenditures, is chargeable to preceding
years, so that the actual expenditures for the fiscal year ended June
30, 1878, are $33,874,647.59. The amount drawn from the Treasury on
appropriations, in addition to the revenues of the Department, was
$5,307,652.82. The expenditures for the fiscal year ending June 30,
1880, are estimated at $36,571,900 and the receipts from all sources at
$30,664,023.90, leaving a deficiency to be appropriated out of the
Treasury of $5,907,876.10. The report calls attention to the fact that
the compensation of postmasters and of railroads for carrying the mail
is regulated by law, and that the failure of Congress to appropriate the
amounts required for these purposes does not relieve the Government of
responsibility, but necessarily increases the deficiency bills which
Congress will be called upon to pass.

In providing for the postal service the following questions are
presented: Should Congress annually appropriate a sum for its expenses
largely in excess of its revenues, or should such rates of postage be
established as will make the Department self-sustaining? Should the
postal service be reduced by excluding from the mails matter which does
not pay its way? Should the number of post routes be diminished? Should
other methods be adopted which will increase the revenues or diminish
the expenses of the postal service?

The International Postal Congress which met at Paris May 1, 1878, and
continued in session until June 4 of the same year, was composed of
delegates from nearly all the civilized countries of the world. It
adopted a new convention (to take the place of the treaty concluded at
Berne October 9, 1874), which goes into effect on the 1st of April,
1879, between the countries whose delegates have signed it. It was
ratified and approved, by and with the consent of the President, August
13, 1878. A synopsis of this Universal Postal Convention will be found
in the report of the Postmaster-General, and the full text in the
appendix thereto. In its origin the Postal Union comprised twenty-three
countries, having a population of 350,000,000 people. On the 1st of
April next it will comprise forty-three countries and colonies, with a
population of more than 650,000,000 people, and will soon, by the
accession of the few remaining countries and colonies which maintain
organized postal services, constitute in fact as well as in name, as its
new title indicates, a universal union, regulating, upon a uniform basis
of cheap postage rates, the postal intercourse between all civilized
nations.

Some embarrassment has arisen out of the conflict between the customs
laws of this country and the provisions of the Postal Convention in
regard to the transmission of foreign books and newspapers to this
country by mail. It is hoped that Congress will be able to devise some
means of reconciling the difficulties which have thus been created, so
as to do justice to all parties involved.

The business of the Supreme Court and of the courts in many of the
circuits has increased to such an extent during the past year that
additional legislation is imperative to relieve and prevent the delay of
justice and possible oppression to suitors which is thus occasioned. The
encumbered condition of these dockets is presented anew in the report of
the Attorney-General, and the remedy suggested is earnestly urged for
Congressional action. The creation of additional circuit judges, as
proposed, would afford a complete remedy, and would involve an expense,
at the present rate of salaries of not more than $60,000 a year.

The annual reports of the Secretary of the Interior and of the
Commissioner of Indian Affairs present an elaborate account of the
present condition of the Indian tribes and of that branch of the public
service which ministers to their interests. While the conduct of the
Indians generally has been orderly and their relations with their
neighbors friendly and peaceable, two local disturbances have occurred,
which were deplorable in their character, but remained, happily,
confined to a comparatively small number of Indians. The discontent
among the Bannocks, which led first to some acts of violence on the part
of some members of the tribe and finally to the outbreak, appears to
have been caused by an insufficiency of food on the reservation, and
this insufficiency to have been owing to the inadequacy of the
appropriations made by Congress to the wants of the Indians at a time
when the Indians were prevented from supplying the deficiency by
hunting. After an arduous pursuit by the troops of the United States,
and several engagements, the hostile Indians were reduced to subjection,
and the larger part of them surrendered themselves as prisoners. In this
connection I desire to call attention to the recommendation made by the
Secretary of the Interior, that a sufficient fund be placed at the
disposal of the Executive, to be used, with proper accountability, at
discretion, in sudden emergencies of the Indian service.

The other case of disturbance was that of a band of Northern Cheyennes,
who suddenly left their reservation in the Indian Territory and marched
rapidly through the States of Kansas and Nebraska in the direction of
their old hunting grounds, committing murders and other crimes on their
way. From documents accompanying the report of the Secretary of the
Interior it appears that this disorderly band was as fully supplied with
the necessaries of life as the 4,700 other Indians who remained quietly
on the reservation, and that the disturbance was caused by men of a
restless and mischievous disposition among the Indians themselves.
Almost the whole of this band have surrendered to the military
authorities; and it is a gratifying fact that when some of them had
taken refuge in the camp of the Red Cloud Sioux, with whom they had been
in friendly relations, the Sioux held them as prisoners and readily gave
them up to the officers of the United States, thus giving new proof of
the loyal spirit which, alarming rumors to the contrary notwithstanding,
they have uniformly shown ever since the wishes they expressed at the
council of September, 1877, had been complied with.

Both the Secretary of the Interior and the Secretary of War unite in the
recommendation that provision be made by Congress for the organization
of a corps of mounted "Indian auxiliaries," to be under the control of
the Army and to be used for the purpose of keeping the Indians on their
reservations and preventing or repressing disturbance on their part. I
earnestly concur in this recommendation. It is believed that the
organization of such a body of Indian cavalry, receiving a moderate pay
from the Government, would considerably weaken the restless element
among the Indians by withdrawing from it a number of young men and
giving them congenial employment under the Government, it being a matter
of experience that Indians in our service almost without exception are
faithful in the performance of the duties assigned to them. Such an
organization would materially aid the Army in the accomplishment of a
task for which its numerical strength is sometimes found insufficient.

But while the employment of force for the prevention or repression of
Indian troubles is of occasional necessity, and wise preparation should
be made to that end, greater reliance must be placed on humane and
civilizing agencies for the ultimate solution of what is called the
Indian problem. It may be very difficult and require much patient effort
to curb the unruly spirit of the savage Indian to the restraints of
civilized life, but experience shows that it is not impossible. Many of
the tribes which are now quiet and orderly and self-supporting were once
as savage as any that at present roam over the plains or in the
mountains of the far West, and were then considered inaccessible to
civilizing influences. It may be impossible to raise them fully up to
the level of the white population of the United States; but we should
not forget that they are the aborigines of the country, and called the
soil their own on which our people have grown rich, powerful, and happy.
We owe it to them as a moral duty to help them in attaining at least
that degree of civilization which they may be able to reach. It is not
only our duty, it is also our interest to do so. Indians who have become
agriculturists or herdsmen, and feel an interest in property, will
thenceforth cease to be a warlike and disturbing element. It is also a
well-authenticated fact that Indians are apt to be peaceable and quiet
when their children are at school, and I am gratified to know, from the
expressions of Indians themselves and from many concurring reports, that
there is a steadily increasing desire, even among Indians belonging to
comparatively wild tribes, to have their children educated. I invite
attention to the reports of the Secretary of the Interior and the
Commissioner of Indian Affairs touching the experiment recently
inaugurated, in taking fifty Indian children, boys and girls, from
different tribes, to the Hampton Normal Agricultural Institute in
Virginia, where they are to receive an elementary English education and
training in agriculture and other useful works, to be returned to their
tribes, after the completed course, as interpreters, instructors, and
examples. It is reported that the officer charged with the selection of
those children might have had thousands of young Indians sent with him
had it been possible to make provision for them. I agree with the
Secretary of the Interior in saying that "the result of this interesting
experiment, if favorable, may be destined to become an important factor
in the advancement of civilization among the Indians."

The question whether a change in the control of the Indian service
should be made was at the last session of Congress referred to a
committee for inquiry and report. Without desiring to anticipate that
report, I venture to express the hope that in the decision of so
important a question the views expressed above may not be lost sight of,
and that the decision, whatever it may be, will arrest further agitation
of this subject, such agitation being apt to produce a disturbing effect
upon the service, as well as on the Indians themselves.

In the enrollment of the bill making appropriations for sundry civil
expenses, at the last session of Congress, that portion which provided
for the continuation of the Hot Springs Commission was omitted. As the
commission had completed the work of taking testimony on the many
conflicting claims, the suspension of their labors, before determining
the rights of claimants, threatened for a time to embarrass the
interests, not only of the Government, but also of a large number of the
citizens of Hot Springs, who were waiting for final action on their
claims before beginning contemplated improvements. In order to prevent
serious difficulties, which were apprehended, and at the solicitation of
many leading citizens of Hot Springs and others interested in the
welfare of the town, the Secretary of the Interior was authorized to
request the late commissioners to take charge of the records of their
proceedings and to perform such work as could properly be done by them
under such circumstances to facilitate the future adjudication of the
claims at an early day and to preserve the status of the claimants until
their rights should be finally determined. The late commissioners
complied with that request, and report that the testimony in all the
cases has been written out, examined, briefed, and so arranged as to
facilitate an early settlement when authorized by law. It is recommended
that the requisite authority be given at as early a day in the session
as possible, and that a fair compensation be allowed the late
commissioners for the expense incurred and the labor performed by them
since the 25th of June last.

I invite the attention of Congress to the recommendations made by the
Secretary of the Interior with regard to the preservation of the timber
on the public lands of the United States. The protection of the public
property is one of the first duties of the Government. The Department of
the Interior should therefore be enabled by sufficient appropriations to
enforce the laws in that respect. But this matter appears still more
important as a question of public economy. The rapid destruction of our
forests is an evil fraught with the gravest consequences, especially in
the mountainous districts, where the rocky slopes, once denuded of their
trees, will remain so forever. There the injury, once done, can not be
repaired. I fully concur with the Secretary of the Interior in the
opinion that for this reason legislation touching the public timber in
the mountainous States and Territories of the West should be especially
well considered, and that existing laws in which the destruction of the
forests is not sufficiently guarded against should be speedily modified.
A general law concerning this important subject appears to me to be a
matter of urgent public necessity.

From the organization of the Government the importance of encouraging by
all possible means the increase of our agricultural productions has been
acknowledged and urged upon the attention of Congress and the people as
the surest and readiest means of increasing our substantial and enduring
prosperity.

The words of Washington are as applicable to-day as when, in his eighth
annual message, he said: It will not be doubted that, with reference
either to individual or national welfare, agriculture is of primary
importance. In proportion as nations advance in population and other
circumstances of maturity this truth becomes more apparent, and renders
the cultivation of the soil more and more an object of public patronage.
Institutions for promoting it grow up, supported by the public purse;
and to what object can it be dedicated with greater propriety? Among the
means which have been employed to this end none have been attended with
greater success than the establishment of boards (composed of proper
characters) charged with collecting and diffusing information, and
enabled by premiums and small pecuniary aids to encourage and assist a
spirit of discovery and improvement. This species of establishment
contributes doubly to the increase of improvement, by stimulating to
enterprise and experiment, and by drawing to a common center the results
everywhere of individual skill and observation and spreading them thence
over the whole nation. Experience accordingly hath shewn that they are
very cheap instruments of immense national benefits. The preponderance
of the agricultural over any other interest in the United States
entitles it to all the consideration claimed for it by Washington. About
one-half of the population of the United States is engaged in
agriculture. The value of the agricultural products of the United States
for the year 1878 is estimated at $3,000,000,000. The exports of
agricultural products for the year 1877, as appears from the report of
the Bureau of Statistics, were $524,000,000. The great extent of our
country, with its diversity of soil and climate, enables us to produce
within our own borders and by our own labor not only the necessaries,
but most of the luxuries, that are consumed in civilized countries. Yet,
notwithstanding our advantages of soil, climate, and
inter-communication, it appears from the statistical statements in the
report of the Commissioner of Agriculture that we import annually from
foreign lands many millions of dollars worth of agricultural products
which could be raised in our own country.

Numerous questions arise in the practice of advanced agriculture which
can only be answered by experiments, often costly and sometimes
fruitless, which are beyond the means of private individuals and are a
just and proper charge on the whole nation for the benefit of the
nation. It is good policy, especially in times of depression and
uncertainty in other business pursuits, with a vast area of
uncultivated, and hence unproductive, territory, wisely opened to
homestead settlement, to encourage by every proper and legitimate means
the occupation and tillage of the soil. The efforts of the Department of
Agriculture to stimulate old and introduce new agricultural industries,
to improve the quality and increase the quantity of our products, to
determine the value of old or establish the importance of new methods of
culture, are worthy of your careful and favorable consideration, and
assistance by such appropriations of money and enlargement of facilities
as may seem to be demanded by the present favorable conditions for the
growth and rapid development of this important interest.

The abuse of animals in transit is widely attracting public attention. A
national convention of societies specially interested in the subject has
recently met at Baltimore, and the facts developed, both in regard to
cruelties to animals and the effect of such cruelties upon the public
health, would seem to demand the careful consideration of Congress and
the enactment of more efficient laws for the prevention of these abuses.

The report of the Commissioner of the Bureau of Education shows very
gratifying progress throughout the country in all the interests
committed to the care of this important office. The report is especially
encouraging with respect to the extension of the advantages of the
common-school system in sections of the country where the general
enjoyment of the privilege of free schools is not yet attained.

To education more than to any other agency we are to look as the
resource for the advancement of the people in the requisite knowledge
and appreciation of their rights and responsibilities as citizens, and I
desire to repeat the suggestion contained in my former message in behalf
of the enactment of appropriate measures by Congress for the purpose of
supplementing with national aid the local systems of education in the
several States.

Adequate accommodations for the great library, which is overgrowing the
capacity of the rooms now occupied at the Capitol, should be provided
without further delay. This invaluable collection of books, manuscripts,
and illustrative art has grown to such proportions, in connection with
the copyright system of the country, as to demand the prompt and careful
attention of Congress to save it from injury in its present crowded and
insufficient quarters. As this library is national in its character, and
must from the nature of the case increase even more rapidly in the
future than in the past, it can not be doubted that the people will
sanction any wise expenditure to preserve it and to enlarge its
usefulness.

The appeal of the Regents of the Smithsonian Institution for the means
to organize, exhibit, and make available for the public benefit the
articles now stored away belonging to the National Museum I heartily
recommend to your favorable consideration.

The attention of Congress is again invited to the condition of the river
front of the city of Washington. It is a matter of vital importance to
the health of the residents of the national capital, both temporary and
permanent, that the lowlands in front of the city, now subject to tidal
overflow, should be reclaimed. In their present condition these flats
obstruct the drainage of the city and are a dangerous source of malarial
poison. The reclamation will improve the navigation of the river by
restricting, and consequently deepening, its channel, and is also of
importance when considered in connection with the extension of the
public ground and the enlargement of the park west and south of the
Washington Monument. The report of the board of survey, heretofore
ordered by act of Congress, on the improvement of the harbor of
Washington and Georgetown, is respectfully commended to consideration.

The report of the Commissioners of the District of Columbia presents a
detailed statement of the affairs of the District.

The relative expenditures by the United States and the District for
local purposes is contrasted, showing that the expenditures by the
people of the District greatly exceed those of the General Government.
The exhibit is made in connection with estimates for the requisite
repair of the defective pavements and sewers of the city, which is a
work of immediate necessity; and in the same connection a plan is
presented for the permanent funding of the outstanding securities of the
District.

The benevolent, reformatory, and penal institutions of the District are
all entitled to the favorable attention of Congress. The Reform School
needs additional buildings and teachers. Appropriations which will place
all of these institutions in a condition to become models of usefulness
and beneficence will be regarded by the country as liberality wisely
bestowed.

The Commissioners, with evident justice, request attention to the
discrimination made by Congress against the District in the donation of
land for the support of the public schools, and ask that the same
liberality that has been shown to the inhabitants of the various States
and Territories of the United States may be extended to the District of
Columbia.

The Commissioners also invite attention to the damage inflicted upon
public and private interests by the present location of the depots and
switching tracks of the several railroads entering the city, and ask for
legislation looking to their removal. The recommendations and
suggestions contained in the report will, I trust, receive the careful
consideration of Congress.

Sufficient time has, perhaps, not elapsed since the reorganization of
the government of the District under the recent legislation of Congress
for the expression of a confident opinion as to its successful
operation, but the practical results already attained are so
satisfactory that the friends of the new government may well urge upon
Congress the wisdom of its continuance, without essential modification,
until by actual experience its advantages and defects may be more fully
ascertained.

R. B. HAYES

***

State of the Union Address
Rutherford B. Hayes
December 1, 1879

Fellow-Citizens of the Senate and House of Representatives:

The members of the Forty-sixth Congress have assembled in their first
regular session under circumstances calling for mutual congratulation
and grateful acknowledgment to the Giver of All Good for the large and
unusual measure of national prosperity which we now enjoy.

The most interesting events which have occurred in our public affairs
since my last annual message to Congress are connected with the
financial operations of the Government, directly affecting the business
interests of the country. I congratulate Congress on the successful
execution of the resumption act. At the time fixed, and in the manner
contemplated by law, United States notes began to be redeemed in coin.
Since the 1st of January last they have been promptly redeemed on
presentation, and in all business transactions, public and private, in
all parts of the country, they are received and paid out as the
equivalent of coin. The demand upon the Treasury for gold and silver in
exchange for United States notes has been comparatively small, and the
voluntary deposit of coin and bullion in exchange for notes has been
very large. The excess of the precious metals deposited or exchanged for
United States notes over the amount of United States notes redeemed is
about $40,000,000.

The resumption of specie payments has been followed by a very great
revival of business. With a currency equivalent in value to the money of
the commercial world, we are enabled to enter upon an equal competition
with other nations in trade and production. The increasing foreign
demand for our manufactures and agricultural products has caused a large
balance of trade in our favor, which has been paid in gold, from the 1st
of July last to November 15, to the amount of about $59,000,000. Since
the resumption of specie payments there has also been a marked and
gratifying improvement of the public credit. The bonds of the Government
bearing only 4 per cent interest have been sold at or above par,
sufficient in amount to pay off all of the national debt which was
redeemable under present laws. The amount of interest saved annually by
the process of refunding the debt since March 1, 1877, is $14,297,177.
The bonds sold were largely in small sums, and the number of our
citizens now holding the public securities is much greater than ever
before. The amount of the national debt which matures within less than
two years is $792,121,700, of which $500,000,000 bear interest at the
rate of 5 per cent, and the balance is in bonds bearing 6 per cent
interest. It is believed that this part of the public debt can be
refunded by the issue of 4 per cent bonds, and, by the reduction of
interest which will thus be effected, about $11,000,000 can be annually
saved to the Treasury. To secure this important reduction of interest to
be paid by the United States further legislation is required, which it
is hoped will be provided by Congress during its present session.

The coinage of gold by the mints of the United States during the last
fiscal year was $40,986,912. The coinage of silver dollars since the
passage of the act for that purpose up to November 1, 1879, was
$45,000,850, of which $12,700,344 have been issued from the Treasury and
are now in circulation, and $32,300,506 are still in the possession of
the Government.

The pendency of the proposition for unity of action between the United
States and the principal commercial nations of Europe to effect a
permanent system for the equality of gold and silver in the recognized
money of the world leads me to recommend that Congress refrain from new
legislation on the general subject. The great revival of trade, internal
and foreign, will supply during the coming year its own instructions,
which may well be awaited before attempting further experimental
measures with the coinage. I would, however, strongly urge upon Congress
the importance of authorizing the Secretary of the Treasury to suspend
the coinage of silver dollars upon the present legal ratio. The market
value of the silver dollar being uniformly and largely less than the
market value of the gold dollar, it is obviously impracticable to
maintain them at par with each other if both are coined without limit.
If the cheaper coin is forced into circulation, it will, if coined
without limit, soon become the sole standard of value, and thus defeat
the desired object, which is a currency of both gold and silver which
shall be of equivalent value, dollar for dollar, with the universally
recognized money of the world.

The retirement from circulation of United States notes with the capacity
of legal tender in private contracts is a step to be taken in our
progress toward a safe and stable currency which should be accepted as
the policy and duty of the Government and the interest and security of
the people. It is my firm conviction that the issue of legal-tender
paper money based wholly upon the authority and credit of the
Government, except in extreme emergency, is without warrant in the
Constitution and a violation of sound financial principles. The issue of
United States notes during the late civil war with the capacity of legal
tender between private individuals was not authorized except as a means
of rescuing the country from imminent peril. The circulation of these
notes as paper money for any protracted period of time after the
accomplishment of this purpose was not contemplated by the framers of
the law under which they were issued. They anticipated the redemption
and withdrawal of these notes at the earliest practicable period
consistent with the attainment of the object for which they were
provided.

The policy of the United States, steadily adhered to from the adoption
of the Constitution, has been to avoid the creation of a national debt;
and when, from necessity in time of war, debts have been created, they
have been paid off, on the return of peace, as rapidly as possible. With
this view, and for this purpose, it is recommended that the existing
laws for the accumulation of a sinking fund sufficient to extinguish the
public debt within a limited period be maintained. If any change of the
objects or rates of taxation is deemed necessary by Congress, it is
suggested that experience has shown that a duty can be placed on tea and
coffee which will not enhance the price of those articles to the
consumer, and which will add several millions of dollars annually to the
Treasury.

The continued deliberate violation by a large number of the prominent
and influential citizens of the Territory of Utah of the laws of the
United States for the prosecution and punishment of polygamy demands the
attention of every department of the Government. This Territory has a
population sufficient to entitle it to admission as a State, and the
general interests of the nation, as well as the welfare of the citizens
of the Territory, require its advance from the Territorial form of
government to the responsibilities and privileges of a State. This
important change will not, however, be approved by the country while the
citizens of Utah in very considerable number uphold a practice which is
condemned as a crime by the laws of all civilized communities throughout
the world.

The law for the suppression of this offense was enacted with great
unanimity by Congress more than seventeen years ago, but has remained
until recently a dead letter in the Territory of Utah, because of the
peculiar difficulties attending its enforcement. The opinion widely
prevailed among the citizens of Utah that the law was in contravention
of the constitutional guaranty of religious freedom. This objection is
now removed. The Supreme Court of the United States has decided the law
to be within the legislative power of Congress and binding as a rule of
action for all who reside within the Territories. There is no longer any
reason for delay or hesitation in its enforcement. It should be firmly
and effectively executed. If not sufficiently stringent in its
provisions, it should be amended; and in aid of the purpose in view I
recommend that more comprehensive and more searching methods for
preventing as well as punishing this crime be provided. If necessary to
secure obedience to the law, the enjoyment and exercise of the rights
and privileges of citizenship in the Territories of the United States
may be withheld or withdrawn from those who violate or oppose the
enforcement of the law on this subject.

The elections of the past year, though occupied only with State
officers, have not failed to elicit in the political discussions which
attended them all over the country new and decisive evidence of the deep
interest which the great body of citizens take in the progress of the
country toward a more general and complete establishment, at whatever
cost, of universal security and freedom in the exercise of the elective
franchise. While many topics of political concern demand great attention
from our people, both in the sphere of national and State authority, I
find no reason to qualify the opinion I expressed in my last annual
message, that no temporary or administrative interests of government,
however urgent or weighty, will ever displace the zeal of our people in
defense of the primary rights of citizenship, and that the power of
public opinion will override all political prejudices, and all sectional
and State attachments in demanding that all over our wide territory the
name and character of citizen of the United States shall mean one and
the same thing and carry with them unchallenged security and respect. I
earnestly appeal to the intelligence and patriotism of all good citizens
of every part of the country, however much they maybe divided in
opinions on other political subjects, to unite in compelling obedience
to existing laws aimed at the protection of the right of suffrage. I
respectfully urge upon Congress to supply any defects in these laws
which experience has shown and which it is within its power to remedy. I
again invoke the cooperation of the executive and legislative
authorities of the States in this great purpose. I am fully convinced
that if the public mind can be set at rest on this paramount question of
popular rights no serious obstacle will thwart or delay the complete
pacification of the country or retard the general diffusion of
prosperity.

In a former message I invited the attention of Congress to the subject
of the reformation of the civil service of the Government, and expressed
the intention of transmitting to Congress as early as practicable a
report upon this subject by the chairman of the Civil Service
Commission.

In view of the facts that during a considerable period the Government of
Great Britain has been dealing with administrative problems and abuses
in various particulars analogous to those presented in this country, and
that in recent years the measures adopted were understood to have been
effective and in every respect highly satisfactory, I thought it
desirable to have fuller information upon the subject, and accordingly
requested the chairman of the Civil Service Commission to make a
thorough investigation for this purpose. The result has been an
elaborate and comprehensive report.

The report sets forth the history of the partisan spoils system in Great
Britain, and of the rise and fall of the parliamentary patronage, and of
official interference with the freedom of elections. It shows that after
long trials of various kinds of examinations those which are competitive
and open on equal terms to all, and which are carried on under the
superintendence of a single commission, have, with great advantage, been
established as conditions of admission to almost every official place in
the subordinate administration of that country and of British India. The
completion of the report, owing to the extent of the labor involved in
its preparation and the omission of Congress to make any provision
either for the compensation or the expenses of the Commission, has been
postponed until the present time. It is herewith transmitted to
Congress.

While the reform measures of another government are of no authority for
us, they are entitled to influence to the extent to which their
intrinsic wisdom and their adaptation to our institutions and social
life may commend them to our consideration. The views I have heretofore
expressed concerning the defects and abuses in our civil administration
remain unchanged, except in so far as an enlarged experience has
deepened my sense of the duty both of officers and of the people
themselves to cooperate for their removal. The grave evils and perils of
a partisan spoils system of appointment to office and of office tenure
are now generally recognized. In the resolutions of the great parties,
in the reports of Departments, in the debates and proceedings of
Congress, in the messages of Executives, the gravity of these evils has
been pointed out and the need of their reform has been admitted.

To command the necessary support, every measure of reform must be based
on common right and justice, and must be compatible with the healthy
existence of great parties, which are inevitable and essential in a free
state.

When the people have approved a policy at a national election,
confidence on the part of the officers they have selected and of the
advisers who, in accordance with our political institutions, should be
consulted in the policy which it is their duty to carry into effect is
indispensable. It is eminently proper that they should explain it before
the people, as well as illustrate its spirit in the performance of their
official duties.

Very different considerations apply to the greater number of those who
fill the subordinate places in the civil service. Their responsibility
is to their superiors in official position. It is their duty to obey the
legal instructions of those upon whom that authority is devolved, and
their best public service consists in the discharge of their functions
irrespective of partisan politics. Their duties are the same whatever
party is in power and whatever policy prevails. As a consequence it
follows that their tenure of office should not depend on the prevalence
of any policy or the supremacy of any party, but should be determined by
their capacity to serve the people most usefully quite irrespective of
partisan interests. The same considerations that should govern the
tenure should also prevail in the appointment, discipline, and removal
of these subordinates. The authority of appointment and removal is not a
perquisite, which may be used to aid a friend or reward a partisan, but
is a trust, to be exercised in the public interest under all the
sanctions which attend the obligation to apply the public funds only for
public purposes.

Every citizen has an equal right to the honor and profit of entering the
public service of his country. The only just ground of discrimination is
the measure of character and capacity he has to make that service most
useful to the people. Except in cases where, upon just and recognized
principles--as upon the theory of pensions--offices and promotions are
bestowed as rewards for past services, their bestowal upon any theory
which disregards personal merit is an act of injustice to the citizen,
as well as a breach of that trust subject to which the appointing power
is held.

In the light of these principles it becomes of great importance to
provide just and adequate means, especially for every Department and
large administrative office, where personal discrimination on the part
of its head is not practicable, for ascertaining those qualifications to
which appointments and removals should have reference. To fail to
provide such means is not only to deny the opportunity of ascertaining
the facts upon which the most righteous claim to office depends, but of
necessity to discourage all worthy aspirants by handing over
appointments and removals to mere influence and favoritism. If it is the
right of the worthiest claimant to gain the appointment and the interest
of the people to bestow it upon him, it would seem clear that a wise and
just method of ascertaining personal fitness for office must be an
important and permanent function of every just and wise government. It
has long since become impossible in the great offices for those having
the duty of nomination and appointment to personally examine into the
individual qualifications of more than a small proportion of those
seeking office, and with the enlargement of the civil service that
proportion must continue to become less.

In the earlier years of the Government the subordinate offices were so
few in number that it was quite easy for those making appointments and
promotions to personally ascertain the merits of candidates. Party
managers and methods had not then become powerful agencies of coercion,
hostile to the free and just exercise of the appointing power.

A large and responsible part of the duty of restoring the civil service
to the desired purity and efficiency rests upon the President, and it is
my purpose to do what is within my power to advance such prudent and
gradual measures of reform as will most surely and rapidly bring about
that radical change of system essential to make our administrative
methods satisfactory to a free and intelligent people. By a proper
exercise of authority it is in the power of the Executive to do much to
promote such a reform. But it can not be too clearly understood that
nothing adequate can be accomplished without cooperation on the part of
Congress and considerate and intelligent support among the people.
Reforms which challenge the generally accepted theories of parties and
demand changes in the methods of Departments are not the work of a day.
Their permanent foundations must be laid in sound principles and in an
experience which demonstrates their wisdom and exposes the errors of
their adversaries. Every worthy officer desires to make his official
action a gain and an honor to his country; but the people themselves,
far more than their officers in public station, are interested in a
pure, economical, and vigorous administration.

By laws enacted in 1853 and 1855, and now in substance incorporated in
the Revised Statutes, the practice of arbitrary appointments to the
several subordinate grades in the great Departments was condemned, and
examinations as to capacity, to be conducted by departmental boards of
examiners, were provided for and made conditions of admission to the
public service. These statutes are a decision by Congress that
examinations of some sort as to attainments and capacity are essential
to the well-being of the public service. The important questions since
the enactment of these laws have been as to the character of these
examinations, and whether official favor and partisan influence or
common right and merit were to control the access to the examinations.
In practice these examinations have not always been open to worthy
persons generally who might wish to be examined. Official favoritism and
partisan influence, as a rule, appear to have designated those who alone
were permitted to go before the examining boards, subjecting even the
examiners to a pressure from the friends of the candidates very
difficult to resist. As a consequence the standard of admission fell
below that which the public interest demanded. It was also almost
inevitable that a system which provided for various separate boards of
examiners, with no common supervision or uniform method of procedure,
should result in confusion, inconsistency, and inadequate tests of
capacity, highly detrimental to the public interest. A further and more
radical change was obviously required.

In the annual message of December, 1870, my predecessor declared that--
There is no duty which so much embarrasses the Executive and heads of
Departments as that of appointments, nor is there any such arduous and
thankless labor imposed on Senators and Representatives as that of
finding places for constituents. The present system does not secure the
best men, and often not even fit men, for public place. The elevation
and purification of the civil service of the Government will be hailed
with approval by the whole people of the United States. Congress
accordingly passed the act approved March 3, 1871, "to regulate the
civil service of the United States and promote the efficiency thereof,"
giving the necessary authority to the Executive to inaugurate a
civil-service reform.

Acting under this statute, which was interpreted as intended to secure a
system of just and effectual examinations under uniform supervision, a
number of eminently competent persons were selected for the purpose, who
entered with zeal upon the discharge of their duties, prepared with an
intelligent appreciation of the requirements of the service the
regulations contemplated, and took charge of the examinations, and who
in their capacity as a board have been known as the "Civil Service
Commission." Congress for two years appropriated the money needed for
the compensation and for the expense of carrying on the work of the
Commission.

It appears from the report of the Commission submitted to the President
in April, 1874, that examinations had been held in various sections of
the country, and that an appropriation of about $25,000 would be
required to meet the annual expenses, including salaries, involved in
discharging the duties of the Commission. The report was transmitted to
Congress by special message of April 18, 1874, with the following
favorable comment upon the labors of the Commission: If sustained by
Congress, I have no doubt the rules can, after the experience gained, be
so improved and enforced as to still more materially benefit the public
service and relieve the Executive, members of Congress, and the heads of
Departments from influences prejudicial to good administration. The
rules, as they have hitherto been enforced, have resulted beneficially,
as is shown by the opinions of the members of the Cabinet and their
subordinates in the Departments, and in that opinion I concur. And in
the annual message of December of the same year similar views are
expressed and an appropriation for continuing the work of the Commission
again advised.

The appropriation was not made, and as a consequence the active work of
the Commission was suspended, leaving the Commission itself still in
existence. Without the means, therefore, of causing qualifications to be
tested in any systematic manner or of securing for the public service
the advantages of competition upon any extensive plan, I recommended in
my annual message of December, 1877, the making of an appropriation for
the resumption of the work of the Commission.

In the meantime, however, competitive examinations, under many
embarrassments, have been conducted within limited spheres in the
Executive Departments in Washington and in a number of the custom-houses
and post-offices of the principal cities of the country, with a view to
further test their effects, and in every instance they have been found
to be as salutary as they are stated to have been under the
Administration of my predecessor. I think the economy, purity, and
efficiency of the public service would be greatly promoted by their
systematic introduction, wherever practicable, throughout the entire
civil service of the Government, together with ample provision for their
general supervision in order to secure consistency and uniform justice.

Reports from the Secretary of the Interior, from the Postmaster-General,
from the postmaster in the city of New York, where such examinations
have been some time on trial, and also from the collector of the port,
the naval officer, and the surveyor in that city, and from the
postmasters and collectors in several of the other large cities, show
that the competitive system, where applied, has in various ways
contributed to improve the public service.

The reports show that the results have been salutary in a marked degree,
and that the general application of similar rules can not fail to be of
decided benefit to the service.

The reports of the Government officers, in the city of New York
especially, bear decided testimony to the utility of open competitive
examinations in their respective offices, showing that--These
examinations and the excellent qualifications of those admitted to the
service through them have had a marked incidental effect upon the
persons previously in the service, and particularly upon those aspiring
to promotion. There has been on the part of these latter an increased
interest in the work and a desire to extend acquaintance with it beyond
the particular desk occupied, and thus the morale of the entire force
has been raised. The examinations have been attended by many citizens,
who have had an opportunity to thoroughly investigate the scope and
character of the tests and the method of determining the results, and
those visitors have without exception approved the methods employed, and
several of them have publicly attested their favorable opinion. Upon
such considerations I deem it my duty to renew the recommendation
contained in my annual message of December, 1877, requesting Congress to
make the necessary appropriation for the resumption of the work of the
Civil Service Commission. Economy will be promoted by authorizing a
moderate compensation to persons in the public service who may perform
extra labor upon or under the Commission, as the Executive may direct.

I am convinced that if a just and adequate test of merit is enforced for
admission to the public service and in making promotions such abuses as
removals without good cause and partisan and official interference with
the proper exercise of the appointing power will in large measure
disappear.

There are other administrative abuses to which the attention of Congress
should be asked in this connection. Mere partisan appointments and the
constant peril of removal without cause very naturally lead to an
absorbing and mischievous political activity on the part of those thus
appointed, which not only interferes with the due discharge of official
duty, but is incompatible with the freedom of elections. Not without
warrant in the views of several of my predecessors in the Presidential
office, and directly within the law of 1871, already cited, I
endeavored, by regulation made on the 22d day of June, 1877, to put some
reasonable limits to such abuses. It may not be easy, and it may never
perhaps be necessary, to define with precision the proper limit of
political action on the part of Federal officers. But while their right
to hold and freely express their opinions can not be questioned, it is
very plain that they should neither be allowed to devote to other
subjects the time needed for the proper discharge of their official
duties nor to use the authority of their office to enforce their own
opinions or to coerce the political action of those who hold different
opinions.

Reasons of justice and public policy quite analogous to those which
forbid the use of official power for the oppression of the private
citizen impose upon the Government the duty of protecting its officers
and agents from arbitrary exactions. In whatever aspect considered, the
practice of making levies for party purposes upon the salaries of
officers is highly demoralizing to the public service and discreditable
to the country. Though an officer should be as free as any other citizen
to give his own money in aid of his opinions or his party, he should
also be as free as any other citizen to refuse to make such gifts. If
salaries are but a fair compensation for the time and labor of the
officer, it is gross injustice to levy a tax upon them. If they are made
excessive in order that they may bear the tax, the excess is an indirect
robbery of the public funds.

I recommend, therefore, such a revision and extension of present
statutes as shall secure to those in every grade of official life or
public employment the protection with which a great and enlightened
nation should guard those who are faithful in its service.

Our relations with foreign countries have continued peaceful.

With Great Britain there are still unsettled questions, growing out of
the local laws of the maritime provinces and the action of provincial
authorities deemed to be in derogation of rights secured by treaty to
American fishermen. The United States minister in London has been
instructed to present a demand for $105,305.02 in view of the damages
received by American citizens at Fortune Bay on the 6th day of January,
1878. The subject has been taken into consideration by the British
Government, and an early reply is anticipated.

Upon the completion of the necessary preliminary examinations the
subject of our participation in the provincial fisheries, as regulated
by treaty, will at once be brought to the attention of the British
Government, with a view to an early and permanent settlement of the
whole question, which was only temporarily adjusted by the treaty of
Washington.

Efforts have been made to obtain the removal of restrictions found
injurious to the exportation of cattle to the United Kingdom.

Some correspondence has also occurred with regard to the rescue and
saving of life and property upon the Lakes, which has resulted in
important modifications of the previous regulations of the Dominion
government on the subject in the interest of humanity and commerce.

In accordance with the joint resolution of the last session of Congress,
commissioners were appointed to represent the United States at the two
international exhibitions in Australia, one of which is now in progress
at Sydney, and the other to be held next year at Melbourne. A desire has
been expressed by our merchants and manufacturers interested in the
important and growing trade with Australia that an increased provision
should be made by Congress for the representation of our industries at
the Melbourne exhibition of next year, and the subject is respectfully
submitted to your favorable consideration.

The assent of the Government has been given to the landing on the coast
of Massachusetts of a new and independent transatlantic cable between
France, by way of the French island of St. Pierre, and this country,
subject to any future legislation of Congress on the subject. The
conditions imposed before allowing this connection with our shores to be
established are such as to secure its competition with any existing or
future lines of marine cable and preclude amalgamation therewith, to
provide for entire equality of rights to our Government and people with
those of France in the use of the cable, and prevent any exclusive
possession of the privilege as accorded by France to the disadvantage of
any future cable communication between France and the United States
which may be projected and accomplished by our citizens. An important
reduction of the present rates of cable communication with Europe, felt
to be too burdensome to the interests of our commerce, must necessarily
flow from the establishment of this competing line.

The attention of Congress was drawn to the propriety of some general
regulation by Congress of the whole subject of transmarine cables by my
predecessor in his message of December 7, 1875, and I respectfully
submit to your consideration the importance of Congressional action in
the matter.

The questions of grave importance with Spain growing out of the
incidents of the Cuban insurrection have been for the most part happily
and honorably settled. It may reasonably be anticipated that the
commission now sitting in Washington for the decision of private cases
in this connection will soon be able to bring its labors to a
conclusion.

The long-standing question of East Florida claims has lately been
renewed as a subject of correspondence, and may possibly require
Congressional action for its final disposition.

A treaty with the Netherlands with respect to consular rights and
privileges similar to those with other powers has been signed and
ratified, and the ratifications were exchanged on the 31st of July last.
Negotiations for extradition treaties with the Netherlands and with
Denmark are now in progress.

Some questions with Switzerland in regard to pauper and convict
emigrants have arisen, but it is not doubted that they will be arranged
upon a just and satisfactory basis. A question has also occurred with
respect to an asserted claim by Swiss municipal authorities to exercise
tutelage over persons and property of Swiss citizens naturalized in this
country. It is possible this may require adjustment by treaty.

With the German Empire frequent questions arise in connection with the
Subjects of naturalization and expatriation, but the Imperial Government
has constantly manifested a desire to strictly maintain and comply with
all treaty stipulations in regard to them.

In consequence of the omission of Congress to provide for a diplomatic
representative at Athens, the legation to Greece has been withdrawn.
There is now no channel of diplomatic communication between the two
countries, and the expediency of providing for one in some form is
submitted to Congress.

Relations with Austria, Russia, Italy, Portugal, Turkey, and Belgium
continue amicable, and marked by no incident of especial importance.

A change of the personal head of the Government of Egypt has taken
place. No change, however, has occurred in the relations between Egypt
and the United States. The action of the Egyptian Government in
presenting to the city of New York one of the ancient obelisks, which
possess such historic interest, is highly appreciated as a generous mark
of international regard. If prosperity should attend the enterprise of
its transportation across the Atlantic, its erection in a conspicuous
position in the chief commercial city of the nation will soon be
accomplished.

The treaty recently made between Japan and the United States in regard
to the revision of former commercial treaties it is now believed will be
followed by similar action on the part of other treaty powers. The
attention of Congress is again invited to the subject of the indemnity
funds received some years since from Japan and China, which, with their
accumulated interest, now amount to considerable sums. If any part of
these funds is justly due to American citizens, they should receive it
promptly; and whatever may have been received by this Government in
excess of strictly just demands should in some form be returned to the
nations to whom it equitably belongs.

The Government of China has signified its willingness to consider the
question of the emigration of its subjects to the United States with a
dispassionate fairness and to cooperate in such measures as may tend to
prevent injurious consequences to the United States. The negotiations
are still proceeding, and will be pressed with diligence.

A question having arisen between China and Japan about the Lew Chew
Islands, the United States Government has taken measures to inform those
powers of its readiness to extend its good offices for the maintenance
of peace if they shall mutually deem it desirable and find it
practicable to avail themselves of the proffer.

It is a gratification to be able to announce that, through the judicious
and energetic action of the military commanders of the two nations on
each side of the Rio Grande, under the instructions of their respective
Governments, raids and depredations have greatly decreased, and in the
localities where formerly most destructive have now almost wholly
ceased. In view of this result, I entertain a confident expectation that
the prevalence of quiet on the border will soon become so assured as to
justify a modification of the present orders to our military commanders
as to crossing the border, without encouraging such disturbances as
would endanger the peace of the two countries.

The third installment of the award against Mexico under the claims
commission of July 4, 1868, was duly paid, and has been put in course of
distribution in pursuance of the act of Congress providing for the same.
This satisfactory situation between the two countries leads me to
anticipate an expansion of our trade with Mexico and an increased
contribution of capital and industry by our people to the development of
the great resources of that country. I earnestly commend to the wisdom
of Congress the provision of suitable legislation looking to this
result.

Diplomatic intercourse with Colombia is again fully restored by the
arrival of a minister from that country to the United States. This is
especially fortunate in view of the fact that the question of an
inter-oceanic canal has recently assumed a new and important aspect and
is now under discussion with the Central American countries through
whose territory the canal, by the Nicaragua route, would have to pass.
It is trusted that enlightened statesmanship on their part will see that
the early prosecution of such a work will largely inure to the benefit,
not only of their own citizens and those of the United States, but of
the commerce of the civilized world. It is not doubted that should the
work be undertaken under the protective auspices of the United States,
and upon satisfactory concessions for the right of way and its security
by the Central American Governments, the capital for its completion
would be readily furnished from this country and Europe, which might,
failing such guaranties, prove inaccessible.

Diplomatic relations with Chile have also been strengthened by the
reception of a minister from that country.

The war between Peru, Bolivia, and Chile still continues. The United
States have not deemed it proper to interpose in the matter further than
to convey to all the Governments concerned the assurance that the
friendly offices of the Government of the United States for the
restoration of peace upon an honorable basis will be extended in case
the belligerents shall exhibit a readiness to accept them.

Cordial relations continue with Brazil and the Argentine Republic, and
trade with those countries is improving. A provision for regular and
more frequent mail communication, in our own ships, between the ports of
this country and the nations of South America seems to me to deserve the
attention of Congress as an essential precursor of an enlargement of our
commerce with them and an extension of our carrying trade.

A recent revolution in Venezuela has been followed by the establishment
of a provisional government. This government has not yet been formally
recognized, and it is deemed desirable to await the proposed action of
the people which is expected to give it the sanction of constitutional
forms.

A naval vessel has been sent to the Samoan Islands to make surveys and
take possession of the privileges ceded to the United States by Samoa in
the harbor of Pago-Pago. A coaling station is to be established there,
which will be convenient and useful to United States vessels.

The subject of opening diplomatic relations with Roumania and Servia,
now become independent sovereignties, is at present under consideration,
and is the subject of diplomatic correspondence.

There is a gratifying increase of trade with nearly all European and
American countries, and it is believed that with judicious action in
regard to its development it can and will be still more enhanced and
that American products and manufactures will find new and expanding
markets. The reports of diplomatic and consular officers upon this
subject, under the system now adopted, have resulted in obtaining much
valuable information, which has been and will continue to be laid before
Congress and the public from time to time.

The third article of the treaty with Russia of March 30, 1867, by which
Alaska was ceded to the United States, provides that the inhabitants of
the ceded territory, with the exception of the uncivilized native
tribes, shall be admitted to the enjoyment of all the rights of citizens
of the United States and shall be maintained and protected in the free
enjoyment of their liberty, property, and religion. The uncivilized
tribes are subject to such laws and regulations as the United States may
from time to time adopt in regard to the aboriginal tribes of that
country.

Both the obligations of this treaty and the necessities of the people
require that some organized form of government over the Territory of
Alaska be adopted.

There appears to be no law for the arrest of persons charged with
common-law offenses, such as assault, robbery, and murder, and no
magistrate authorized to issue or execute process in such cases. Serious
difficulties have already arisen from offenses of this character, not
only among the original inhabitants, but among citizens of the United
States and other countries who have engaged in mining, fishing, and
other business operations within the territory. A bill authorizing the
appointment of justices of the peace and constables and the arrest and
detention of persons charged with criminal offenses, and providing for
an appeal to United States courts for the district of Oregon in suitable
cases, will at a proper time be submitted to Congress.

The attention of Congress is called to the annual report of the
Secretary of the Treasury on the condition of the public finances.

The ordinary revenues from all sources for the fiscal year ended June
30, 1879, were $273,827,184.46; the ordinary expenditures for the same
period were $266,947,883.53, leaving a surplus revenue for the year of
$6,879,300.93.

The receipts for the present fiscal year, ending June 30, 1880, actual
and estimated, are as follows: Actual receipts for the first quarter,
commencing July 1, 1879, $79,843,663.61; estimated receipts for the
remaining three quarters of the year, $208,156,336.39; total receipts
for the current fiscal year, actual and estimated, $288,000,000.

The expenditures for the same period will be, actual and estimated, as
follows: For the quarter commencing July 1, 1879, actual expenditures,
$91,683,385.10; and for the remaining three quarters of the year the
expenditures are estimated at $172,316,614.90, making the total
expenditures $264,000,000, and leaving an estimated surplus revenue for
the year ending June 30, 1880, of $24,000,000. The total receipts during
the next fiscal year, ending June 30, 1881, estimated according to
existing laws, will be $288,000,000, and the estimated ordinary
expenditures for the same period will be $278,097,364.39, leaving a
surplus of $9,902,635.61 for that year.

The large amount expended for arrears of pensions during the last and
the present fiscal year, amounting to $21,747,249.60, has prevented the
application of the full amount required by law to the sinking fund for
the current year; but these arrears having been substantially paid, it
is believed that the sinking fund can hereafter be maintained without
any change of existing law.

The Secretary of War reports that the War Department estimates for the
fiscal year ending June 30, 1881, are $40,380,428.93, the same being for
a less sum of money than any annual estimate rendered to Congress from
that Department during a period of at least twelve years.

He concurs with the General of the Army in recommending such legislation
as will authorize the enlistment of the full number of 25,000 men for
the line of the Army, exclusive of the 3,463 men required for detached
duty, and therefore not available for service in the field.

He also recommends that Congress be asked to provide by law for the
disposition of a large number of abandoned military posts and
reservations, which, though very valuable in themselves, have been
rendered useless for military purposes by the advance of civilization
and settlement.

He unites with the Quartermaster-General in recommending that an
appropriation be made for the construction of a cheap and perfectly
fireproof building for the safe storage of a vast amount of money
accounts, vouchers, claims, and other valuable records now in the
Quartermaster-General's Office, and exposed to great risk of total
destruction by fire.

He also recommends, in conformity with the views of the
Judge-Advocate-General, some declaratory legislation in reference to the
military statute of limitations as applied to the crime of desertion. In
these several recommendations I concur.

The Secretary of War further reports that the work for the improvement
of the South Pass of the Mississippi River, under contract with Mr.
James B. Eads, made in pursuance of an act of Congress, has been
prosecuted during the past year with a greater measure of success in the
attainment of results than during any previous year. The channel through
the South Pass, which at the beginning of operations in June, 1875, had
a depth of only 7 1/2 feet of water, had on the 8th of July, 1879, a
minimum depth of 26 feet, having a width of not less than 200 feet and a
central depth of 30 feet. Payments have been made in accordance with the
statute, as the work progressed, amounting in the aggregate to
$4,250,000; and further payments will become due, as provided by the
statute, in the event of success in maintaining the channel now secured.

The reports of the General of the Army and of his subordinates present a
full and detailed account of the military operations for the suppression
of hostilities among the Indians of the Ute and Apache tribes, and
praise is justly awarded to the officers and troops engaged for
promptness, skill, and courage displayed.

The past year has been one of almost unbroken peace and quiet on the
Mexican frontier, and there is reason to believe that the efforts of
this Government and of Mexico to maintain order in that region will
prove permanently successful.

This Department was enabled during the past year to find temporary,
though crowded, accommodations and a safe depository for a portion of
its records in the completed east wing of the building designed for the
State, War, and Navy Departments. The construction of the north wing of
the building, a part of the structure intended for the use of the War
Department, is being carried forward with all possible dispatch, and the
work should receive from Congress such liberal appropriations as will
secure its speedy completion.

The report of the Secretary of the Navy shows continued improvement in
that branch of the service during the last fiscal year. Extensive
repairs have been made upon vessels, and two new ships have been
completed and made ready for sea.

The total expenditures of the year ended June 30, 1879, including
specific appropriations not estimated for by the Department, were
$13,555,710.09. The expenses chargeable to the year, after deducting the
amount of these specific appropriations, were $13,343,317.79; but this
is subject to a reduction of $283,725.99, that amount having been drawn
upon warrants, but not paid out during the year. The amount of
appropriations applicable to the last fiscal year was $14,538,646.17.
There was, therefore, a balance of $1,479,054.37 remaining unexpended
and to the credit of the Department on June 30, 1879. The estimates for
the fiscal year ending June 30, 1881, are $14,864,147.95, which exceeds
the appropriations for the present fiscal year $361,897.28. The reason
for this increase is explained in the Secretary's report. The
appropriations available for the present fiscal year are $14,502,250.67,
which will, in the opinion of the Secretary, answer all the ordinary
demands of the service. The amount drawn from the Treasury from July 1
to November 1, 1879 was $5,770,404.12, of which $1,095,440.33 has been
refunded, leaving as the expenditure for that period $4,674,963.79. If
the expenditures of the remaining two-thirds of the year do not exceed
the proportion for these four months, there will remain unexpended at
the end of the year $477,359.30 of the current appropriations. The
report of the Secretary shows the gratifying fact that among all the
disbursing officers of the Pay Corps of the Navy there is not one who is
a defaulter to the extent of a single dollar. I unite with him in
recommending the removal of the observatory to a more healthful
location. That institution reflects credit upon the nation, and has
obtained the approbation of scientific men in all parts of the world.
Its removal from its present location would not only be conducive to the
health of its officers and professors, but would greatly increase its
usefulness.

The appropriation for judicial expenses, which has heretofore been made
for the Department of Justice in gross, was subdivided at the last
session of Congress, and no appropriation whatever was made for the
payment of the fees of marshals and their deputies, either in the
service of process or for the discharge of other duties; and since June
30 these officers have continued the performance of their duties without
compensation from the Government, taking upon themselves the necessary
incidental outlays, as well as rendering their own services. In only a
few unavoidable instances has the proper execution of the process of the
United States failed by reason of the absence of the requisite
appropriation. This course of official conduct on the part of these
officers, highly creditable to their fidelity, was advised by the
Attorney-General, who informed them, however, that they would
necessarily have to rely for their compensation upon the prospect of
future legislation by Congress. I therefore especially recommend that
immediate appropriation be made by Congress for this purpose.

The act making the principal appropriation for the Department of Justice
at previous sessions has uniformly contained the following clause: And
for defraying the expenses which my be incurred in the enforcement of
the act approved February 28, 1871, entitled "An act to amend an act
approved May 31, 1870, entitled 'An act to enforce the rights of
citizens of the United States to vote in the several States of this
Union, and for other purposes,'" or any acts amendatory thereof or
supplementary thereto. No appropriation was made for this purpose for
the current year. As no general election for Members of Congress
occurred, the omission was a matter of little practical importance. Such
election will, however, take place during the ensuing year, and the
appropriation made for the pay of marshals and deputies should be
sufficient to embrace compensation for the services they may be required
to perform at such elections.

The business of the Supreme Court is at present largely in arrears. It
can not be expected that more causes can be decided than are now
disposed of in its annual session, or that by any assiduity the
distinguished magistrates who compose the court can accomplish more than
is now done. In the courts of many of the circuits also the business has
increased to such an extent that the delay of justice will call the
attention of Congress to an appropriate remedy. It is believed that all
is done in each circuit which can fairly be expected from its judicial
force. The evils arising from delay are less heavily felt by the United
States than by private suitors, as its causes are advanced by the courts
when it is seen that they involve the discussion of questions of a
public character.

The remedy suggested by the Attorney-General is the appointment of
additional circuit judges and the creation of an intermediate court of
errors and appeals, which shall relieve the Supreme Court of a part of
its jurisdiction, while a larger force is also obtained for the
performance of circuit duties.

I commend this suggestion to the consideration of Congress. It would
seem to afford a complete remedy, and would involve, if ten additional
circuit judges are appointed, an expenditure, at the present rate of
salaries, of not more than $60,000 a year, which would certainly be
small in comparison with the objects to be attained.

The report of the Postmaster-General bears testimony to the general
revival of business throughout the country. The receipts of the
Post-Office Department for the fiscal year ended June 30, 1879, were
$30,041,982.86, being $764,465.91 more than the revenues of the
preceding year. The amount realized from the sale of postage stamps,
stamped envelopes, and postal cards was $764,465.91 more than in the
preceding year, and $2,387,559.23 more than in 1877. The expenditures of
the Department were $33,449,899.45, of which the sum of $376,461.63 was
paid on liabilities incurred in preceding years.

The expenditures during the year were $801,209.77 less than in the
preceding year. This reduction is to be attributed mainly to the
operation of the law passed June 17, 1878, changing the compensation of
postmasters from a commission on the value of stamps sold to a
commission on stamps canceled.

The amount drawn from the Treasury on appropriations, in addition to the
revenues of the Department, was $3,031,454.96, being $2,276,197.86 less
than in the preceding year.

The expenditures for the fiscal year ending June 30, 1881, are estimated
at $39,920,900 and the receipts from all sources at $32,210,000, leaving
a deficiency to be appropriated for out of the Treasury of $7,710,900.

The relations of the Department with railroad companies have been
harmonized, notwithstanding the general reduction by Congress of their
compensation by the appropriation for special facilities, and the
railway post-office lines have been greatly extended, especially in the
Southern States. The interests of the Railway Mail Service and of the
public would be greatly promoted and the expenditures could be more
readily controlled by the classification of the employees of the Railway
Mail Service as recommended by the Postmaster-General, the appropriation
for salaries, with respect to which the maximum limit is already fixed
by law, to be made in gross.

The Postmaster-General recommends an amendment of the law regulating the
increase of compensation for increased service and increased speed on
star routes, so as to enable him to advertise for proposals for such
increased service and speed. He also suggests the advantages to accrue
to the commerce of the country from the enactment of a general law
authorizing contracts with American-built steamers, carrying the
American flag, for transporting the mail between ports of the United
States and ports of the West Indies and South America, at a fixed
maximum price per mile, the amount to be expended being regulated by
annual appropriations, in like manner with the amount paid for the
domestic star service.

The arrangement made by the Postmaster-General and the Secretary of the
Treasury for the collection of duty upon books received in the mail from
foreign countries has proved so satisfactory in its practical operation
that the recommendation is now made that Congress shall extend the
provisions of the act of March 3, 1879, under which this arrangement was
made, so as to apply to all other dutiable articles received in the
mails from foreign countries.

The reports of the Secretary of the Interior and of the Commissioner of
Indian Affairs, setting forth the present state of our relations with
the Indian tribes on our territory, the measures taken to advance their
civilization and prosperity, and the progress already achieved by them,
will be found of more than ordinary interest. The general conduct of our
Indian population has been so satisfactory that the occurrence of two
disturbances, which resulted in bloodshed and destruction of property,
is all the more to be lamented.

The history of the outbreak on the White River Ute Reservation, in
western Colorado, has become so familiar by elaborate reports in the
public press that its remarkable incidents need not be stated here in
detail. It is expected that the settlement of this difficulty will lead
to such arrangements as will prevent further hostile contact between the
Indians and the border settlements in western Colorado.

The other disturbance occurred at the Mescalero Agency, in New Mexico,
where Victoria, at the head of a small band of marauders, after
committing many atrocities, being vigorously chased by a military force,
made his way across the Mexican border and is now on foreign soil.

While these occurrences, in which a comparatively small number of
Indians were engaged, are most deplorable, a vast majority of our Indian
population have fully justified the expectations of those who believe
that by humane and peaceful influences the Indian can be led to abandon
the habits of savage life and to develop a capacity for useful and
civilized occupations. What they have already accomplished in the
pursuit of agricultural and mechanical work, the remarkable success
which has attended the experiment of employing as freighters a class of
Indians hitherto counted among the wildest and most intractable, and the
general and urgent desire expressed by them for the education of their
children may be taken as sufficient proof that they will be found
capable of accomplishing much more if they continue to be wisely and
fairly guided. The "Indian policy" sketched in the report of the
Secretary of the Interior, the object of which is to make liberal
provision for the education of Indian youth, to settle the Indians upon
farm lots in severalty, to give them title in fee to their farms,
inalienable for a certain number of years, and when their wants are thus
provided for to dispose by sale of the lands on their reservations not
occupied and used by them, a fund to be formed out of the proceeds for
the benefit of the Indians, which will gradually relieve the Government
of the expenses now provided for by annual appropriations, must commend
itself as just and beneficial to the Indians, and as also calculated to
remove those obstructions which the existence of large reservations
presents to the settlement and development of the country. I therefore
earnestly recommend the enactment of a law enabling the Government to
give Indians a title in fee, inalienable for twenty-five years, to the
farm lands assigned to them by allotment. I also repeat the
recommendation made in my first annual message, that a law be passed
admitting Indians who can give satisfactory proof of having by their own
labor supported their families for a number of years, and who are
willing to detach themselves from their tribal relations, to the benefit
of the homestead act, and to grant them patents containing the same
provision of inalienability for a certain period.

The experiment of sending a number of Indian children of both sexes to
the Hampton Normal and Agricultural Institute, in Virginia, to receive
an elementary English education and practical instruction in farming and
other useful industries, has led to results so promising that it was
thought expedient to turn over the cavalry barracks at Carlisle, in
Pennsylvania, to the Interior Department for the establishment of an
Indian school on a larger scale. This school has now 158 pupils,
selected from various tribes, and is in full operation. Arrangements are
also made for the education of a number of Indian boys and girls
belonging to tribes on the Pacific Slope in a similar manner, at Forest
Grove, in Oregon. These institutions will commend themselves to the
liberality of Congress and to the philanthropic munificence of the
American people.

Last spring information was received of the organization of an extensive
movement in the Western States, the object of which was the occupation
by unauthorized persons of certain lands in the Indian Territory ceded
by the Cherokees to the Government for the purpose of settlement by
other Indian tribes.

On the 26th of April I issued a proclamation warning all persons against
participation in such an attempt, and by the cooperation of a military
force the invasion was promptly checked. It is my purpose to protect the
rights of the Indian inhabitants of that Territory to the full extent of
the executive power; but it would be unwise to ignore the fact that a
territory so large and so fertile, with a population so sparse and with
so great a wealth of unused resources, will be found more exposed to the
repetition of such attempts as happened this year when the surrounding
States are more densely settled and the westward movement of our
population looks still more eagerly for fresh lands to occupy. Under
such circumstances the difficulty of maintaining the Indian Territory in
its present state will greatly increase, and the Indian tribes
inhabiting it would do well to prepare for such a contingency. I
therefore fully approve of the advice given to them by the Secretary of
the Interior on a recent occasion, to divide among themselves in
severalty as large a quantity of their lands as they can cultivate; to
acquire individual title in fee instead of their present tribal
ownership in common, and to consider in what manner the balance of their
lands may be disposed of by the Government for their benefit. By
adopting such a policy they would more certainly secure for themselves
the value of their possessions, and at the same time promote their
progress in civilization and prosperity, than by endeavoring to
perpetuate the present state of things in the Territory.

The question whether a change in the control of the Indian service
should be made was in the Forty-fifth Congress referred to a joint
committee of both Houses for inquiry and report. In my last annual
message I expressed the hope that the decision of that question, then in
prospect, would "arrest further agitation of this subject, such
agitation being apt to produce a disturbing effect upon the service as
well as on the Indians themselves." Since then, the committee having
reported, the question has been decided in the negative by a vote in the
House of Representatives.

For the reasons here stated, and in view of the fact that further
uncertainty on this point will be calculated to obstruct other
much-needed legislation, to weaken the discipline of the service, and to
unsettle salutary measures now in progress for the government and
improvement of the Indians, I respectfully recommend that the decision
arrived at by Congress at its last session be permitted to stand.

The efforts made by the Department of the Interior to arrest the
depredations on the timber lands of the United States have been
continued, and have met with considerable success. A large number of
cases of trespass have been prosecuted in the courts of the United
States; others have been settled, the trespassers offering to make
payment to the Government for the value of the timber taken by them. The
proceeds of these prosecutions and settlements turned into the Treasury
far exceed in amount the sums appropriated by Congress for this purpose.
A more important result, however, consists in the fact that the
destruction of our public forests by depredation, although such cases
still occur, has been greatly reduced in extent, and it is probable that
if the present policy is vigorously pursued and sufficient provision to
that end is made by Congress such trespasses, at least those on a large
scale, can be entirely suppressed, except in the Territories, where
timber for the daily requirements of the population can not, under the
present state of the law, be otherwise obtained. I therefore earnestly
invite the attention of Congress to the recommendation made by the
Secretary of the Interior, that a law be enacted enabling the Government
to sell timber from the public lands without conveying the fee, where
such lands are principally valuable for the timber thereon, such sales
to be so regulated as to conform to domestic wants and business
requirements, while at the same time guarding against a sweeping
destruction of the forests. The enactment of such a law appears to
become a more pressing necessity every day.

My recommendations in former messages are renewed in favor of enlarging
the facilities of the Department of Agriculture. Agriculture is the
leading interest and the permanent industry of our people. It is to the
abundance of agricultural production, as compared with our home
consumption, and the largely increased and highly profitable market
abroad which we have enjoyed in recent years, that we are mainly
indebted for our present prosperity as a people. We must look for its
continued maintenance to the same substantial resource. There is no
branch of industry in which labor, directed by scientific knowledge,
yields such increased production in comparison with unskilled labor, and
no branch of the public service to which the encouragement of liberal
appropriations can be more appropriately extended. The omission to
render such aid is not a wise economy, but, on the contrary, undoubtedly
results in losses of immense sums annually that might be saved through
well-directed efforts by the Government to promote this vital interest.

The results already accomplished with the very limited means heretofore
placed at the command of the Department of Agriculture is an earnest of
what may be expected with increased appropriations for the several
purposes indicated in the report of the Commissioner, with a view to
placing the Department upon a footing which will enable it to prosecute
more effectively the objects for which it is established.

Appropriations are needed for a more complete laboratory, for the
establishment of a veterinary division and a division of forestry, and
for an increase of force.

The requirements for these and other purposes, indicated in the report
of the Commissioner under the head of the immediate necessities of the
Department, will not involve any expenditure of money that the country
can not with propriety now undertake in the interests of agriculture.

It is gratifying to learn from the Bureau of Education the extent to
which educational privileges throughout the United States have been
advanced during the year. No more fundamental responsibility rests upon
Congress than that of devising appropriate measures of financial aid to
education, supplemental to local action in the States and Territories
and in the District of Columbia. The wise forethought of the founders of
our Government has not only furnished the basis for the support of the
common-school systems of the newer States, but laid the foundations for
the maintenance of their universities and colleges of agriculture and
the mechanic arts. Measures in accordance with this traditional policy,
for the further benefit of all these interests and the extension of the
same advantages to every portion of the country, it is hoped will
receive your favorable consideration.

To preserve and perpetuate the national literature should be among the
foremost cares of the National Legislature. The library gathered at the
Capitol still remains unprovided with any suitable accommodations for
its rapidly increasing stores. The magnitude and importance of the
collection, increased as it is by the deposits made under the law of
copyright, by domestic and foreign exchanges, and by the scientific
library of the Smithsonian Institution, call for building accommodations
which shall be at once adequate and fireproof. The location of such a
public building, which should provide for the pressing necessities of
the present and for the vast increase of the nation's books in the
future, is a matter which addresses itself to the discretion of
Congress. It is earnestly recommended as a measure which should unite
all suffrages and which should no longer be delayed.

The joint commission created by the act of Congress of August 2, 1876,
for the purpose of supervising and directing the completion of the
Washington National Monument, of which commission the President is a
member, has given careful attention to this subject, and already the
strengthening of the foundation has so far progressed as to insure the
entire success of this part of the work. A massive layer of masonry has
been introduced below the original foundation, widening the base,
increasing the stability of the structure, and rendering it possible to
carry the shaft to completion. It is earnestly recommended that such
further appropriations be made for the continued prosecution of the work
as may be necessary for the completion of this national monument at an
early day.

In former messages, impressed with the importance of the subject, I have
taken occasion to commend to Congress the adoption of a generous policy
toward the District of Columbia. The report of the Commissioners of the
District, herewith transmitted, contains suggestions and
recommendations, to all of which I earnestly invite your careful
attention. I ask your early and favorable consideration of the views
which they express as to the urgent need of legislation for the
reclamation of the marshes of the Potomac and its Eastern Branch within
the limits of the city, and for the repair of the streets of the
capital, heretofore laid with wooden blocks and now by decay rendered
almost impassable and a source of imminent danger to the health of its
citizens. The means at the disposal of the Commissioners are wholly
inadequate for the accomplishment of these important works, and should
be supplemented by timely appropriations from the Federal Treasury.

The filling of the flats in front of the city will add to the adjacent
lands and parks now owned by the United States a large and valuable
domain, sufficient, it is thought, to reimburse its entire cost, and
will also, as an incidental result, secure the permanent improvement of
the river for the purposes of navigation.

The Constitution having invested Congress with supreme and exclusive
jurisdiction over the District of Columbia, its citizens must of
necessity look to Congress alone for all needful legislation affecting
their interests; and as the territory of this District is the common
property of the people of the United States, who equally with its
resident citizens are interested in the prosperity of their capital, I
can not doubt that you will be amply sustained by the general voice of
the country in any measures you may adopt for this purpose.

I also invite the favorable consideration of Congress to the wants of
the public schools of this District, as exhibited in the report of the
Commissioners. While the number of pupils is rapidly increasing, no
adequate provision exists for a corresponding increase of school
accommodation, and the Commissioners are without the means to meet this
urgent need. A number of the buildings now used for school purposes are
rented, and are in important particulars unsuited for the purpose. The
cause of popular education in the District of Columbia is surely
entitled to the same consideration at the hands of the National
Government as in the several States and Territories, to which munificent
grants of the public lands have been made for the endowment of schools
and universities.

***

State of the Union Address
Rutherford B. Hayes
December 6, 1880

Fellow-Citizens of the Senate and House of Representatives:

I congratulate you on the continued and increasing prosperity of our
country. By the favor of Divine Providence we have been blessed during
the past year with health, with abundant harvests, with profitable
employment for all our people, and with contentment at home, and with
peace and friendship with other nations. The occurrence of the
twenty-fourth election of Chief Magistrate has afforded another
opportunity to the people of the United States to exhibit to the world a
significant example of the peaceful and safe transmission of the power
and authority of government from the public servants whose terms of
office are about to expire to their newly chosen successors. This
example can not fail to impress profoundly thoughtful people of other
countries with the advantages which republican institutions afford. The
immediate, general, and cheerful acquiescence of all good citizens in
the result of the election gives gratifying assurance to our country and
to its friends throughout the world that a government based on the free
consent of an intelligent and patriotic people possesses elements of
strength, stability, and permanency not found in any other form of
government.

Continued opposition to the full and free enjoyment of the rights of
citizenship conferred upon the colored people by the recent amendments
to the Constitution still prevails in several of the late slaveholding
States. It has, perhaps, not been manifested in the recent election to
any large extent in acts of violence or intimidation. It has, however,
by fraudulent practices in connection with the ballots, with the
regulations as to the places and manner of voting, and with counting,
returning, and canvassing the votes cast, been successful in defeating
the exercise of the right preservative of all rights--the right of
suffrage--which the Constitution expressly confers upon our enfranchised
citizens.

It is the desire of the good people of the whole country that
sectionalism as a factor in our politics should disappear. They prefer
that no section of the country should be united in solid opposition to
any other section. The disposition to refuse a prompt and hearty
obedience to the equal-rights amendments to the Constitution is all that
now stands in the way of a complete obliteration of sectional lines in
our political contests. As long as either of these amendments is
flagrantly violated or disregarded, it is safe to assume that the people
who placed them in the Constitution, as embodying the legitimate results
of the war for the Union, and who believe them to be wise and necessary,
will continue to act together and to insist that they shall be obeyed.
The paramount question still is as to the enjoyment of the fight by
every American citizen who has the requisite qualifications to freely
cast his vote and to have it honestly counted. With this question
rightly settled, the country will be relieved of the contentions of the
past; bygones will indeed be bygones, and political and party issues,
with respect to economy and efficiency of administration, internal
improvements, the tariff, domestic taxation, education, finance, and
other important subjects, will then receive their full share of
attention; but resistance to and nullification of the results of the war
will unite together in resolute purpose for their support all who
maintain the authority of the Government and the perpetuity of the
Union, and who adequately appreciate the value of the victory achieved.
This determination proceeds from no hostile sentiment or feeling to any
part of the people of our country or to any of their interests. The
inviolability of the amendments rests upon the fundamental principle of
our Government. They are the solemn expression of the will of the people
of the United States.

The sentiment that the constitutional rights of all our citizens must be
maintained does not grow weaker. It will continue to control the
Government of the country. Happily, the history of the late election
shows that in many parts of the country where opposition to the
fifteenth amendment has heretofore prevailed it is diminishing, and is
likely to cease altogether if firm and well-considered action is taken
by Congress. I trust the House of Representatives and the Senate, which
have the right to judge of the elections, returns, and qualifications of
their own members, will see to it that every case of violation of the
letter or spirit of the fifteenth amendment is thoroughly investigated,
and that no benefit from such violation shall accrue to any person or
party. It will be the duty of the Executive, with sufficient
appropriations for the purpose, to prosecute unsparingly all who have
been engaged in depriving citizens of the rights guaranteed to them by
the Constitution.

It is not, however, to be forgotten that the best and surest guaranty of
the primary rights of citizenship is to be found in that capacity for
self-protection which can belong only to a people whose right to
universal suffrage is supported by universal education. The means at the
command of the local and State authorities are in many cases wholly
inadequate to furnish free instruction to all who need it. This is
especially true where before emancipation the education of the people
was neglected or prevented, in the interest of slavery. Firmly convinced
that the subject of popular education deserves the earnest attention of
the people of the whole country, with a view to wise and comprehensive
action by the Government of the United States, I respectfully recommend
that Congress, by suitable legislation and with proper safeguards,
supplement the local educational funds in the several States where the
grave duties and responsibilities of citizenship have been devolved on
uneducated people by devoting to the purpose grants of the public lands
and, if necessary, by appropriations from the Treasury of the United
States. Whatever Government can fairly do to promote free popular
education ought to be done. Wherever general education is found, peace,
virtue, and social order prevail and civil and religious liberty are
secure.

In my former annual messages I have asked the attention of Congress to
the urgent necessity of a reformation of the civil-service system of the
Government. My views concerning the dangers of patronage, or
appointments for personal or partisan considerations, have been
strengthened by my observation and experience in the Executive office,
and I believe these dangers threaten the stability of the Government.
Abuses so serious in their nature can not be permanently tolerated. They
tend to become more alarming with the enlargement of administrative
service, as the growth of the country in population increases the number
of officers and placemen employed.

The reasons are imperative for the adoption of fixed rules for the
regulation of appointments, promotions, and removals, establishing a
uniform method having exclusively in view in every instance the
attainment of the best qualifications for the position in question. Such
a method alone is consistent with the equal rights of all citizens and
the most economical and efficient administration of the public business.

Competitive examinations in aid of impartial appointments and promotions
have been conducted for some years past in several of the Executive
Departments, and by my direction this system has been adopted in the
custom-houses and post-offices of the larger cities of the country. In
the city of New York over 2,000 positions in the civil service have been
subject in their appointments and tenure of place to the operation of
published rules for this purpose during the past two years. The results
of these practical trials have been very satisfactory, and have
confirmed my opinion in favor of this system of selection. All are
subjected to the same tests, and the result is free from prejudice by
personal favor or partisan influence. It secures for the position
applied for the best qualifications attainable among the competing
applicants. It is an effectual protection from the pressure of
importunity, which under any other course pursued largely exacts the
time and attention of appointing officers, to their great detriment in
the discharge of other official duties preventing the abuse of the
service for the mere furtherance of private or party purposes, and
leaving the employee of the Government, freed from the obligations
imposed by patronage, to depend solely upon merit for retention and
advancement, and with this constant incentive to exertion and
improvement.

These invaluable results have been attained in a high degree in the
offices where the rules for appointment by competitive examination have
been applied.

A method which has so approved itself by experimental tests at points
where such tests may be fairly considered conclusive should be extended
to all subordinate positions under the Government. I believe that a
strong and growing public sentiment demands immediate measures for
securing and enforcing the highest possible efficiency in the civil
service and its protection from recognized abuses, and that the
experience referred to has demonstrated the feasibility of such
measures.

The examinations in the custom-houses and post-offices have been held
under many embarrassments and without provision for compensation for the
extra labor performed by the officers who have conducted them, and whose
commendable interest in the improvement of the public service has
induced this devotion of time and labor without pecuniary reward. A
continuance of these labors gratuitously ought not to be expected, and
without an appropriation by Congress for compensation it is not
practicable to extend the system of examinations generally throughout
the civil service. It is also highly important that all such
examinations should be conducted upon a uniform system and under general
supervision. Section 1753 of the Revised Statutes authorizes the
President to prescribe the regulations for admission to the civil
service of the United States, and for this purpose to employ suitable
persons to conduct the requisite inquiries with reference to "the
fitness of each candidate, in respect to age, health, character,
knowledge, and ability for the branch of service into which he seeks to
enter;" but the law is practically inoperative for want of the requisite
appropriation.

I therefore recommend an appropriation of $25,000 per annum to meet the
expenses of a commission, to be appointed by the President in accordance
with the terms of this section, whose duty it shall be to devise a just,
uniform, and efficient system of competitive examinations and to
supervise the application of the same throughout the entire civil
service of the Government. I am persuaded that the facilities which such
a commission will afford for testing the fitness of those who apply for
office will not only be as welcome a relief to members of Congress as it
will be to the President and heads of Departments, but that it will also
greatly tend to remove the causes of embarrassment which now inevitably
and constantly attend the conflicting claims of patronage between the
legislative and executive departments. The most effectual check upon the
pernicious competition of influence and official favoritism in the
bestowal of office will be the substitution of an open competition of
merit between the applicants, in which everyone can make his own record
with the assurance that his success will depend upon this alone.

I also recommend such legislation as, while leaving every officer as
free as any other citizen to express his political opinions and to use
his means for their advancement, shall also enable him to feel as safe
as any private citizen in refusing all demands upon his salary for
political purposes. A law which should thus guarantee true liberty and
justice to all who are engaged in the public service, and likewise
contain stringent provisions against the use of official authority to
coerce the political action of private citizens or of official
subordinates, is greatly to be desired.

The most serious obstacle, however, to an improvement of the civil
service, and especially to a reform in the method of appointment and
removal, has been found to be the practice, under what is known as the
spoils system, by which the appointing power has been so largely
encroached upon by members of Congress. The first step in the reform of
the civil service must be a complete divorce between Congress and the
Executive in the matter of appointments. The corrupting doctrine that
"to the victors belong the spoils" is inseparable from Congressional
patronage as the established rule and practice of parties in power. It
comes to be understood by applicants for office and by the people
generally that Representatives and Senators are entitled to disburse the
patronage of their respective districts and States. It is not necessary
to recite at length the evils resulting from this invasion of the
Executive functions. The true principles of Government on the subject of
appointments to office, as stated in the national conventions of the
leading parties of the country, have again and again been approved by
the American people, and have not been called in question in any
quarter. These authentic expressions of public opinion upon this
all-important subject are the statement of principles that belong to the
constitutional structure of the Government. Under the Constitution the
President and heads of Departments are to make nominations for office.
The Senate is to advise and consent to appointments, and the House of
Representatives is to accuse and prosecute faithless officers. The best
interest of the public service demands that these distinctions be
respected; that Senators and Representatives, who may be judges and
accusers, should not dictate appointments to office. To this end the
cooperation of the legislative department of the Government is required
alike by the necessities of the case and by public opinion. Members of
Congress will not be relieved from the demands made upon them with
reference to appointments to office until by legislative enactment the
pernicious practice is condemned and forbidden.

It is therefore recommended that an act be passed defining the relations
of members of Congress with respect to appointment to office by the
President; and I also recommend that the provisions of section 1767 and
of the sections following of the Revised Statutes, comprising the
tenure-of-office act of March 2, 1867, be repealed.

Believing that to reform the system and methods of the civil service in
our country is one of the highest and most imperative duties of
statesmanship, and that it can be permanently done only by the
cooperation of the legislative and executive departments of the
Government, I again commend the whole subject to your considerate
attention.

It is the recognized duty and purpose of the people of the United States
to suppress polygamy where it now exists in our Territories and to
prevent its extension. Faithful and zealous efforts have been made by
the United States authorities in Utah to enforce the laws against it.
Experience has shown that the legislation upon this subject, to be
effective, requires extensive modification and amendment. The longer
action is delayed the more difficult it will be to accomplish what is
desired. Prompt and decided measures are necessary. The Mormon sectarian
organization which upholds polygamy has the whole power of making and
executing the local legislation of the Territory. By its control of the
grand and petit juries it possesses large influence over the
administration of justice. Exercising, as the heads of this sect do, the
local political power of the Territory, they are able to make effective
their hostility to the law of Congress on the subject of polygamy, and,
in fact, do prevent its enforcement. Polygamy will not be abolished if
the enforcement of the law depends on those who practice and uphold the
crime. It can only be suppressed by taking away the political power of
the sect which encourages and sustains it.

The power of Congress to enact suitable laws to protect the Territories
is ample. It is not a case for halfway measures. The political power of
the Mormon sect is increasing. It controls now one of our wealthiest and
most populous Territories. It is extending steadily into other
Territories. Wherever it goes it establishes polygamy and sectarian
political power. The sanctity of marriage and the family relation are
the corner stone of our American society and civilization. Religious
liberty and the separation of church and state are among the elementary
ideas of free institutions. To reestablish the interests and principles
which polygamy and Mormonism have imperiled, and to fully reopen to
intelligent and virtuous immigrants of all creeds that part of our
domain which has been in a great degree closed to general immigration by
intolerant and immoral institutions, it is recommended that the
government of the Territory of Utah be reorganized.

I recommend that Congress provide for the government of Utah by a
governor and judges, or commissioners, appointed by the President and
confirmed by the Senate--a government analogous to the provisional
government established for the territory northwest of the Ohio by the
ordinance of 1787. If, however, it is deemed best to continue the
existing form of local government, I recommend that the right to vote,
hold office, and sit on juries in the Territory of Utah be confined to
those who neither practice nor uphold polygamy. If thorough measures are
adopted, it is believed that within a few years the evils which now
afflict Utah will be eradicated, and that this Territory will in good
time become one of the most prosperous and attractive of the new States
of the Union.

Our relations with all foreign countries have been those of undisturbed
peace, and have presented no occasion for concern as to their continued
maintenance.

My anticipation of an early reply from the British Government to the
demand of indemnity to our fishermen for the injuries suffered by that
industry at Fortune Bay in January, 1878, which I expressed in my last
annual message, was disappointed. This answer was received only in the
latter part of April in the present year, and when received exhibited a
failure of accord between the two Governments as to the measure of the
inshore fishing privilege secured to our fishermen by the treaty of
Washington of so serious a character that I made it the subject of a
communication to Congress, in which I recommended the adoption of the
measures which seemed to me proper to be taken by this Government in
maintenance of the rights accorded to our fishermen under the treaty and
toward securing an indemnity for the injury these interests had
suffered. A bill to carry out these recommendations was under
consideration by the House of Representatives at the time of the
adjournment of Congress in June last.

Within a few weeks I have received a communication from Her Majesty's
Government renewing the consideration of the subject, both of the
indemnity for the injuries at Fortune Bay and of the interpretation of
the treaty in which the previous correspondence had shown the two
Governments to be at variance. Upon both these topics the disposition
toward a friendly agreement is manifested by a recognition of our right
to an indemnity for the transaction at Fortune Bay, leaving the measure
of such indemnity to further conference, and by an assent to the view of
this Government, presented in the previous correspondence, that the
regulation of conflicting interests of the shore fishery of the
provincial seacoasts and the vessel fishery of our fishermen should be
made the subject of conference and concurrent arrangement between the
two Governments.

I sincerely hope that the basis may be found for a speedy adjustment of
the very serious divergence of views in the interpretation of the
fishery clauses of the treaty of Washington, which, as the
correspondence between the two Governments stood at the close of the
last session of Congress, seemed to be irreconcilable.

In the important exhibition of arts and industries which was held last
year at Sydney, New South Wales, as well as in that now in progress at
Melbourne, the United States have been efficiently and honorably
represented. The exhibitors from this country at the former place
received a large number of awards in some of the most considerable
departments, and the participation of the United States was recognized
by a special mark of distinction. In the exhibition at Melbourne the
share taken by our country is no less notable, and an equal degree of
success is confidently expected.

The state of peace and tranquillity now enjoyed by all the nations of
the continent of Europe has its favorable influence upon our diplomatic
and commercial relations with them. We have concluded and ratified a
convention with the French Republic for the settlement of claims of the
citizens of either country against the other. Under this convention a
commission, presided over by a distinguished publicist, appointed in
pursuance of the request of both nations by His Majesty the Emperor of
Brazil, has been organized and has begun its sessions in this city. A
congress to consider means for the protection of industrial property has
recently been in session in Paris, to which I have appointed the
ministers of the United States in France and in Belgium as delegates.
The International Commission upon Weights and Measures also continues
its work in Paris. I invite your attention to the necessity of an
appropriation to be made in time to enable this Government to comply
with its obligations under the metrical convention.

Our friendly relations with the German Empire continue without
interruption. At the recent International Exhibition of Fish and
Fisheries at Berlin the participation of the United States,
notwithstanding the haste with which the commission was forced to make
its preparations, was extremely successful and meritorious, winning for
private exhibitors numerous awards of a high class and for the country
at large the principal prize of honor offered by His Majesty the
Emperor. The results of this great success can not but be advantageous
to this important and growing industry. There have been some questions
raised between the two Governments as to the proper effect and
interpretation of our treaties of naturalization, but recent dispatches
from our minister at Berlin show that favorable progress is making
toward an understanding in accordance with the views of this Government,
which makes and admits no distinction whatever between the rights of a
native and a naturalized citizen of the United States. In practice the
complaints of molestation suffered by naturalized citizens abroad have
never been fewer than at present.

There is nothing of importance to note in our unbroken friendly
relations with the Governments of Austria-Hungary, Russia, Portugal,
Sweden and Norway, Switzerland, Turkey, and Greece.

During the last summer several vessels belonging to the merchant marine
of this country, sailing in neutral waters of the West Indies, were
fired at, boarded, and searched by an armed cruiser of the Spanish
Government. The circumstances as reported involve not only a private
injury to the persons concerned, but also seemed too little observant of
the friendly relations existing for a century between this country and
Spain. The wrong was brought to the attention of the Spanish Government
in a serious protest and remonstrance, and the matter is undergoing
investigation by the royal authorities with a view to such explanation
or reparation as may be called for by the facts.

The commission sitting in this city for the adjudication of claims of
our citizens against the Government of Spain is, I hope, approaching the
termination of its labors.

The claims against the United States under the Florida treaty with Spain
were submitted to Congress for its action at the late session, and I
again invite your attention to this long-standing question, with a view
to a final disposition of the matter.

At the invitation of the Spanish Government, a conference has recently
been held at the city of Madrid to consider the subject of protection by
foreign powers of native Moors in the Empire of Morocco. The minister of
the United States in Spain was directed to take part in the
deliberations of this conference, the result of which is a convention
signed on behalf of all the powers represented. The instrument will be
laid before the Senate for its consideration. The Government of the
United States has also lost no opportunity to urge upon that of the
Emperor of Morocco the necessity, in accordance with the humane and
enlightened spirit of the age, of putting an end to the persecutions,
which have been so prevalent in that country, of persons of a faith
other than the Moslem, and especially of the Hebrew residents of
Morocco.

The consular treaty concluded with Belgium has not yet been officially
promulgated, owing to the alteration of a word in the text by the Senate
of the United States, which occasioned a delay, during which the time
allowed for ratification expired. The Senate will be asked to extend the
period for ratification.

The attempt to negotiate a treaty of extradition with Denmark failed on
account of the objection of the Danish Government to the usual clause
providing that each nation should pay the expense of the arrest of the
persons whose extradition it asks.

The provision made by Congress at its last session for the expense of
the commission which had been appointed to enter upon negotiations with
the Imperial Government of China on subjects of great interest to the
relations of the two countries enabled the commissioners to proceed at
once upon their mission. The Imperial Government was prepared to give
prompt and respectful attention to the matters brought under
negotiation, and the conferences proceeded with such rapidity and
success that on the 17th of November last two treaties were signed at
Peking, one relating to the introduction of Chinese into this country
and one relating to commerce. Mr. Trescot, one of the commissioners, is
now on his way home bringing the treaties, and it is expected that they
will be received in season to be laid before the Senate early in
January.

Our minister in Japan has negotiated a convention for the reciprocal
relief of shipwrecked seamen. I take occasion to urge once more upon
Congress the propriety of making provision for the erection of suitable
fireproof buildings at the Japanese capital for the use of the American
legation and the court-house and jail connected with it. The Japanese
Government, with great generosity and courtesy, has offered for this
purpose an eligible piece of land.

In my last annual message I invited the attention of Congress to the
subject of the indemnity funds received some years ago from China and
Japan. I renew the recommendation then made that whatever portions of
these funds are due to American citizens should be promptly paid and the
residue returned to the nations, respectively, to which they justly and
equitably belong.

The extradition treaty with the Kingdom of the Netherlands, Which has
been for some time in course of negotiation, has during the past year
been concluded and duly ratified.

Relations of friendship and amity have been established between the
Government of the United States and that of Roumania. We have sent a
diplomatic representative to Bucharest, and have received at this
capital the special envoy who has been charged by His Royal Highness
Prince Charles to announce the independent sovereignty of Roumania. We
hope for a speedy development of commercial relations between the two
countries.

In my last annual message I expressed the hope that the prevalence of
quiet on the border between this country and Mexico would soon become so
assured as to justify the modification of the orders then in force to
our military commanders in regard to crossing the frontier, without
encouraging such disturbances as would endanger the peace of the two
countries. Events moved in accordance with these expectations, and the
orders were accordingly withdrawn, to the entire satisfaction of our own
citizens and the Mexican Government. Subsequently the peace of the
border was again disturbed by a savage foray under the command of the
Chief Victoria, but by the combined and harmonious action of the
military forces of both countries his band has been broken up and
substantially destroyed.

There is reason to believe that the obstacles which have so long
prevented rapid and convenient communication between the United States
and Mexico by railways are on the point of disappearing, and that
several important enterprises of this character will soon be set on
foot, which can not fail to contribute largely to the prosperity of both
countries.

New envoys from Guatemala, Colombia, Bolivia, Venezuela, and Nicaragua
have recently arrived at this capital, whose distinction and
enlightenment afford the best guaranty of the continuance of friendly
relations between ourselves and these sister Republics.

The relations between this Government and that of the United States of
Colombia have engaged public attention during the past year, mainly by
reason of the project of an interoceanic canal across the Isthmus of
Panama, to be built by private capital under a concession from the
Colombian Government for that purpose. The treaty obligations subsisting
between the United States and Colombia, by which we guarantee the
neutrality of the transit and the sovereignty and property of Colombia
in the Isthmus, make it necessary that the conditions under which so
stupendous a change in the region embraced in this guaranty should be
effected--transforming, as it would, this Isthmus from a barrier between
the Atlantic and Pacific oceans into a gateway and thoroughfare between
them for the navies and the merchant ships of the world--should receive
the approval of this Government, as being compatible with the discharge
of these obligations on our part and consistent with our interests as
the principal commercial power of the Western Hemisphere. The views
which I expressed in a special message to Congress in March last in
relation to this project I deem it my duty again to press upon your
attention. Subsequent consideration has but confirmed the opinion "that
it is the right and duty of the United States to assert and maintain
such supervision and authority over any interoceanic canal across the
isthmus that connects North and South America as will protect our
national interest."

The war between the Republic of Chile on the one hand and the allied
Republics of Peru and Bolivia on the other still continues. This
Government has not felt called upon to interfere in a contest that is
within the belligerent rights of the parties as independent states. We
have, however, always held ourselves in readiness to aid in
accommodating their difference, and have at different times reminded
both belligerents of our willingness to render such service.

Our good offices in this direction were recently accepted by all the
belligerents, and it was hoped they would prove efficacious; but I
regret to announce that the measures which the ministers of the United
States at Santiago and Lima were authorized to take with the view to
bring about a peace were not successful. In the course of the war some
questions have arisen affecting neutral rights. In all of these the
ministers of the United States have, under their instructions, acted
with promptness and energy in protection of American interests.

The relations of the United States with the Empire of Brazil continue to
be most cordial, and their commercial intercourse steadily increases, to
their mutual advantage.

The internal disorders with which the Argentine Republic has for some
time past been afflicted, and which have more or less influenced its
external trade, are understood to have been brought to a close. This
happy result may be expected to redound to the benefit of the foreign
commerce of that Republic, as well as to the development of its vast
interior resources.

In Samoa the Government of King Malietoa, under the support and
recognition of the consular representatives of the United States, Great
Britain, and Germany, seems to have given peace and tranquillity to the
islands. While it does not appear desirable to adopt as a whole the
scheme of tripartite local government which has been proposed, the
common interests of the three great treaty powers require harmony in
their relations to the native frame of government, and this may be best
secured by a simple diplomatic agreement between them. It would be well
if the consular jurisdiction of our representative at Apia were
increased in extent and importance so as to guard American interests in
the surrounding and outlying islands of Oceanica.

The obelisk generously presented by the Khedive of Egypt to the city of
New York has safely arrived in this country, and will soon be erected in
that metropolis. A commission for the liquidation of the Egyptian debt
has lately concluded its work, and this Government, at the earnest
solicitation of the Khedive, has acceded to the provisions adopted by
it, which will be laid before Congress for its information. A commission
for the revision of the judicial code of the reform tribunal of Egypt is
now in session in Cairo. Mr. Farman, consul-general, and J. M.
Batchelder, esq., have been appointed as commissioners to participate in
this work. The organization of the reform tribunals will probably be
continued for another period of five years.

In pursuance of the act passed at the last session of Congress,
invitations have been extended to foreign maritime states to join in a
sanitary conference in Washington, beginning the 1st of January. The
acceptance of this invitation by many prominent powers gives promise of
success in this important measure, designed to establish a system of
international notification by which the spread of infectious or epidemic
diseases may be more effectively checked or prevented. The attention of
Congress is invited to the necessary appropriations for carrying into
effect the provisions of the act referred to.

The efforts of the Department of State to enlarge the trade and commerce
of the United States, through the active agency of consular officers and
through the dissemination of information obtained from them, have been
unrelaxed. The interest in these efforts, as developed in our commercial
communities, and the value of the information secured by this means to
the trade and manufactures of the country were recognized by Congress at
its last session, and provision was made for the more frequent
publication of consular and other reports by the Department of State.
The first issue of this publication has now been prepared, and
subsequent issues may regularly be expected. The importance and interest
attached to the reports of consular officers are witnessed by the
general demand for them by all classes of merchants and manufacturers
engaged in our foreign trade. It is believed that the system of such
publications is deserving of the approval of Congress, and that the
necessary appropriations for its continuance and enlargement will
commend itself to your consideration.

The prosperous energies of our domestic industries and their immense
production of the subjects of foreign commerce invite, and even require,
an active development of the wishes and interests of our people in that
direction. Especially important is it that our commercial relations with
the Atlantic and Pacific coasts of South America, with the West Indies
and the Gulf of Mexico, should be direct, and not through the circuit of
European systems, and should be carried on in our own bottoms. The full
appreciation of the opportunities which our front on the Pacific Ocean
gives to commerce with Japan, China, and the East Indies, with Australia
and the island groups which lie along these routes of navigation, should
inspire equal efforts to appropriate to our own shipping and to
administer by our own capital a due proportion of this trade. Whatever
modifications of our regulations of trade and navigation may be
necessary or useful to meet and direct these impulses to the enlargement
of our exchanges and of our carrying trade I am sure the wisdom of
Congress will be ready to supply. One initial measure, however, seems to
me so dearly useful and efficient that I venture to press it upon your
earnest attention. It seems to be very evident that the provision of
regular steam postal communication by aid from government has been the
forerunner of the commercial predominance of Great Britain on all these
coasts and seas, a greater share in whose trade is now the desire and
the intent of our people. It is also manifest that the efforts of other
European nations to contend with Great Britain for a share of this
commerce have been successful in proportion with their adoption of
regular steam postal communication with the markets whose trade they
sought. Mexico and the States of South America are anxious to receive
such postal communication with this country and to aid in their
development. Similar cooperation may be looked for in due time from the
Eastern nations and from Australia. It is difficult to see how the lead
in this movement can be expected from private interests. In respect of
foreign commerce quite as much as in internal trade postal communication
seems necessarily a matter of common and public administration, and thus
pertaining to Government. I respectfully recommend to your prompt
attention such just and efficient measures as may conduce to the
development of our foreign commercial exchanges and the building up of
our carrying trade.

In this connection I desire also to suggest the very great service which
might be expected in enlarging and facilitating our commerce on the
Pacific Ocean were a transmarine cable laid from San Francisco to the
Sandwich Islands, and thence to Japan at the north and Australia at the
south. The great influence of such means of communication on these
routes of navigation in developing and securing the due share of our
Pacific Coast in the commerce of the world needs no illustration or
enforcement. It may be that such an enterprise, useful, and in the end
profitable, as it would prove to private investment, may need to be
accelerated by prudent legislation by Congress in its aid, and I submit
the matter to your careful consideration.

An additional and not unimportant, although secondary, reason for
fostering and enlarging the Navy may be found in the unquestionable
service to the expansion of our commerce which would be rendered by the
frequent circulation of naval ships in the seas and ports of all
quarters of the globe. Ships of the proper construction and equipment to
be of the greatest efficiency in case of maritime war might be made
constant and active agents in time of peace in the advancement and
protection of our foreign trade and in the nurture and discipline of
young seamen, who would naturally in some numbers mix with and improve
the crews of our merchant ships. Our merchants at home and abroad
recognize the value to foreign commerce of an active movement of our
naval vessels, and the intelligence and patriotic zeal of our naval
officers in promoting every interest of their countrymen is a just
subject of national pride.

The condition of the financial affairs of the Government, as shown by
the report of the Secretary of the Treasury, is very satisfactory. It is
believed that the present financial situation of the United States,
whether considered with respect to trade, currency, credit, growing
wealth, or the extent and variety of our resources, is more favorable
than that of any other country of our time, and has never been surpassed
by that of any country at any period of its history. All our industries
are thriving; the rate of interest is low; new railroads are being
constructed; a vast immigration is increasing our population, capital,
and labor; new enterprises in great number are in progress, and our
commercial relations with other countries are improving.

The ordinary revenues from all sources for the fiscal year ended June
30, 1880, were--

From customs - $186,522,064.60

From internal revenue - 124,009,373.92

From sales of public lands - 1,016,506.60

From tax on circulation and deposits of national banks - 7,014,971.44

From repayment of interest by Pacific Railway companies - 1,707,367.18

From sinking fund for Pacific Railway companies - 786,621.22

From customs fees, fines, penalties, etc - 1,148,800.16

From fees-consular, letters patent, and lands - 2,337,029.00

From proceeds of sales of Government property - 282,616.50

From profits on coinage, etc - 2,792,186.78

From revenues of the District of Columbia - 1,809,469.70

From miscellaneous sources - 4,099,603.88 -

***

State of the Union Address
Chester A. Arthur
December 6, 1881

To the Senate and House of Representatives of the United States:

An appalling calamity has befallen the American people since their
chosen representatives last met in the halls where you are now
assembled. We might else recall with unalloyed content the rare
prosperity with which throughout the year the nation has been blessed.
Its harvests have been plenteous; its varied industries have thriven;
the health of its people has been preserved; it has maintained with
foreign governments the undisturbed relations of amity and peace. For
these manifestations of His favor we owe to Him who holds our destiny in
His hands the tribute of our grateful devotion.

To that mysterious exercise of His will which has taken from us the
loved and illustrious citizen who was but lately the head of the nation
we bow in sorrow and submission.

The memory of his exalted character, of his noble achievements, and of
his patriotic life will be treasured forever as a sacred possession of
the whole people.

The announcement of his death drew from foreign governments and peoples
tributes of sympathy and sorrow which history will record as signal
tokens of the kinship of nations and the federation of mankind.

The feeling of good will between our own Government and that of Great
Britain was never more marked than at present. In recognition of this
pleasing fact I directed, on the occasion of the late centennial
celebration at Yorktown, that a salute be given to the British flag.

Save for the correspondence to which I shall refer hereafter in relation
to the proposed canal across the Isthmus of Panama, little has occurred
worthy of mention in the diplomatic relations of the two countries.

Early in the year the Fortune Bay claims were satisfactorily settled by
the British Government paying in full the sum of 15,000 pounds, most of
which has been already distributed. As the terms of the settlement
included compensation for injuries suffered by our fishermen at Aspee
Bay, there has been retained from the gross award a sum which is deemed
adequate for those claims.

The participation of Americans in the exhibitions at Melbourne and
Sydney will be approvingly mentioned in the reports of the two
exhibitions, soon to be presented to Congress. They will disclose the
readiness of our countrymen to make successful competition in distant
fields of enterprise.

Negotiations for an international copyright convention are in hopeful
progress.

The surrender of Sitting Bull and his forces upon the Canadian frontier
has allayed apprehension, although bodies of British Indians still cross
the border in quest of sustenance. Upon this subject a correspondence
has been opened which promises an adequate understanding. Our troops
have orders to avoid meanwhile all collisions with alien Indians.

The presence at the Yorktown celebration of representatives of the
French Republic and descendants of Lafayette and of his gallant
compatriots who were our allies in the Revolution has served to
strengthen the spirit of good will which has always existed between the
two nations.

You will be furnished with the proceedings of the Bimetallic Conference
held during the summer at the city of Paris. No accord was reached, but
a valuable interchange of views was had, and the conference will next
year be renewed.

At the Electrical Exhibition and Congress, also held at Paris, this
country was creditably represented by eminent specialists, who, in the
absence of an appropriation, generously lent their efficient aid at the
instance of the State Department. While our exhibitors in this almost
distinctively American field of achievement have won several valuable
awards, I recommend that Congress provide for the repayment of the
personal expenses incurred in the public interest by the honorary
commissioners and delegates.

No new questions respecting the status of our naturalized citizens in
Germany have arisen during the year, and the causes of complaint,
especially in Alsace and Lorraine, have practically ceased through the
liberal action of the Imperial Government in accepting our
often-expressed views on the subject. The application of the treaty of
1868 to the lately acquired Rhenish provinces has received very earnest
attention, and a definite and lasting agreement on this point is
confidently expected. The participation of the descendants of Baron von
Steuben in the Yorktown festivities, and their subsequent reception by
their American kinsmen, strikingly evinced the ties of good will which
unite the German people and our own.

Our intercourse with Spain has been friendly. An agreement concluded in
February last fixes a term for the labors of the Spanish and American
Claims Commission. The Spanish Government has been requested to pay the
late awards of that Commission, and will, it is believed, accede to the
request as promptly and courteously as on former occasions.

By recent legislation onerous fines have been imposed upon American
shipping in Spanish and colonial ports for slight irregularities in
manifests. One case of hardship is specially worthy of attention. The
bark Masonic, bound for Japan, entered Manila in distress, and is there
sought to be confiscated under Spanish revenue laws for an alleged
shortage in her transshipped cargo. Though efforts for her relief have
thus far proved unavailing, it is expected that the whole matter will be
adjusted in a friendly spirit.

The Senate resolutions of condolence on the assassination of the Czar
Alexander II were appropriately communicated to the Russian Government,
which in turn has expressed its sympathy in our late national
bereavement. It is desirable that our cordial relations with Russia
should be strengthened by proper engagements assuring to peaceable
Americans who visit the Empire the consideration which is due to them as
citizens of a friendly state. This is especially needful with respect to
American Israelites, whose classification with the native Hebrews has
evoked energetic remonstrances from this Government.

A supplementary consular agreement with Italy has been sanctioned and
proclaimed, which puts at rest conflicts of jurisdiction in the case of
crimes on shipboard.

Several important international conferences have been held in Italy
during the year. At the Geographical Congress of Venice, the Beneficence
Congress of Milan, and the Hygienic Congress of Turin this country was
represented by delegates from branches of the public service or by
private citizens duly accredited in an honorary capacity. It is hoped
that Congress will give such prominence to the results of their
participation as they may seem to deserve.

The abolition of all discriminating duties against such colonial
productions of the Dutch East Indies as are imported hither from Holland
has been already considered by Congress. I trust that at the present
session the matter may be favorably concluded.

The insecurity of life and property in many parts of Turkey has given
rise to correspondence with the Porte looking particularly to the better
protection of American missionaries in the Empire. The condemned
murderer of the eminent missionary Dr. Justin W. Parsons has not yet
been executed, although this Government has repeatedly demanded that
exemplary justice be done.

The Swiss Government has again solicited the good offices of our
diplomatic and consular agents for the protection of its citizens in
countries where it is not itself represented. This request has, within
proper limits, been granted.

Our agents in Switzerland have been instructed to protest against the
conduct of the authorities of certain communes in permitting the
emigration to this country of criminals and other objectionable persons.
Several such persons, through the cooperation of the commissioners of
emigration at New York, have been sent back by the steamers which
brought them. A continuance of this course may prove a more effectual
remedy than diplomatic remonstrance.

Treaties of commerce and navigation and for the regulation of consular
privileges have been concluded with Roumania and Servia since their
admission into the family of European States.

As is natural with contiguous states having like institutions and like
aims of advancement and development, the friendship of the United States
and Mexico has been constantly maintained. This Government has lost no
occasion of encouraging the Mexican Government to a beneficial
realization of the mutual advantages which will result from more
intimate commercial intercourse and from the opening of the rich
interior of Mexico to railway enterprise. I deem it important that means
be provided to restrain the lawlessness unfortunately so common on the
frontier and to suppress the forays of the reservation Indians on either
side of the Rio Grande.

The neighboring States of Central America have preserved internal peace,
and their outward relations toward us have been those of intimate
friendship. There are encouraging signs of their growing disposition to
subordinate their local interests to those which are common to them by
reason of their geographical relations.

The boundary dispute between Guatemala and Mexico has afforded this
Government an opportunity to exercise its good offices for preventing a
rupture between those States and for procuring a peaceable solution of
the question. I cherish strong hope that in view of our relations of
amity with both countries our friendly counsels may prevail.

A special envoy of Guatemala has brought to me the condolences of his
Government and people on the death of President Garfield.

The Costa Rican Government lately framed an engagement with Colombia for
settling by arbitration the boundary question between those countries,
providing that the post of arbitrator should be offered successively to
the King of the Belgians, the King of Spain, and the President of the
Argentine Confederation. The King of the Belgians has declined to act,
but I am not as yet advised of the action of the King of Spain. As we
have certain interests in the disputed territory which are protected by
our treaty engagements with one of the parties, it is important that the
arbitration should not without our consent affect our rights, and this
Government has accordingly thought proper to make its views known to the
parties to the agreement, as well as to intimate them to the Belgian and
Spanish Governments.

The questions growing out of the proposed interoceanic waterway across
the Isthmus of Panama are of grave national importance. This Government
has not been unmindful of the solemn obligations imposed upon it by its
compact of 1846 with Colombia, as the independent and sovereign mistress
of the territory crossed by the canal, and has sought to render them
effective by fresh engagements with the Colombian Republic looking to
their practical execution. The negotiations to this end, after they had
reached what appeared to be a mutually satisfactory solution here, were
met in Colombia by a disavowal of the powers which its envoy had assumed
and by a proposal for renewed negotiation on a modified basis.

Meanwhile this Government learned that Colombia had proposed to the
European powers to join in a guaranty of the neutrality of the proposed
Panama canal--a guaranty which would be in direct contravention of our
obligation as the sole guarantor of the integrity of Colombian territory
and of the neutrality of the canal itself. My lamented predecessor felt
it his duty to place before the European powers the reasons which make
the prior guaranty of the United States indispensable, and for which the
interjection of any foreign guaranty might be regarded as a superfluous
and unfriendly act.

Foreseeing the probable reliance of the British Government on the
provisions of the Clayton-Bulwer treaty of 1850 as affording room for a
share in the guaranties which the United States covenanted with Colombia
four years before, I have not hesitated to supplement the action of my
predecessor by proposing to Her Majesty's Government the modification of
that instrument and the abrogation of such clauses thereof as do not
comport with the obligations of the United States toward Colombia or
with the vital needs of the two friendly parties to the compact.

This Government sees with great concern the continuance of the hostile
relations between Chile, Bolivia, and Peru. An early peace between these
Republics is much to be desired, not only that they may themselves be
spared further misery and bloodshed, but because their continued
antagonism threatens consequences which are, in my judgment, dangerous
to the interests of republican government on this continent and
calculated to destroy the best elements of our free and peaceful
civilization.

As in the present excited condition of popular feeling in these
countries there has been serious misapprehension of the position of the
United States, and as separate diplomatic intercourse with each through
independent ministers is sometimes subject, owing to the want of prompt
reciprocal communication, to temporary misunderstanding, I have deemed
it judicious at the present time to send a special envoy accredited to
all and each of them, and furnished with general instructions which
will, I trust, enable him to bring these powers into friendly relations.

The Government of Venezuela maintains its attitude of warm friendship
and continues with great regularity its payment of the monthly quota of
the diplomatic debt. Without suggesting the direction in which Congress
should act, I ask its attention to the pending questions affecting the
distribution of the sums thus far received.

The relations between Venezuela and France growing out of the same debt
have been for some time past in an unsatisfactory state, and this
Government, as the neighbor and one of the largest creditors of
Venezuela, has interposed its influence with the French Government with
the view of producing a friendly and honorable adjustment.

I regret that the commercial interests between the United States and
Brazil, from which great advantages were hoped a year ago, have suffered
from the withdrawal of the American lines of communication between the
Brazilian ports and our own.

Through the efforts of our minister resident at Buenos Ayres and the
United States minister at Santiago, a treaty has been concluded between
the Argentine Republic and Chile, disposing of the long-pending
Patagonian boundary question. It is a matter of congratulation that our
Government has been afforded the opportunity of successfully exerting
its good influence for the prevention of disagreements between these
Republics of the American continent.

I am glad to inform you that the treaties lately negotiated with China
have been duly ratified on both sides and the exchange made at Peking.
Legislation is necessary to carry their provisions into effect. The
prompt and friendly spirit with which the Chinese Government, at the
request of the United States, conceded the modification of existing
treaties should secure careful regard for the interests and
susceptibilities of that Government in the enactment of any laws
relating to Chinese immigration.

Those clauses of the treaties which forbid the participation of citizens
or vessels of the United States in the opium trade will doubtless
receive your approval. They will attest the sincere interest which our
people and Government feel in the commendable efforts of the Chinese
Government to put a stop to this demoralizing and destructive traffic.

In relation both to China and Japan some changes are desirable in our
present system of consular jurisdiction. I hope at some future time to
lay before you a scheme for its improvement in the entire East.

The intimacy between our own country and Japan, the most advanced of the
Eastern nations, continues to be cordial. I am advised that the Emperor
contemplates the establishment of full constitutional government, and
that he has already summoned a parliamentary congress for the purpose of
effecting the change. Such a remarkable step toward complete
assimilation with the Western system can not fail to bring Japan into
closer and more beneficial relationship with ourselves as the chief
Pacific power.

A question has arisen in relation to the exercise in that country of the
judicial functions conferred upon our ministers and consuls. The
indictment, trial, and conviction in the consular court at Yokohama of
John Ross, a merchant seaman on board an American vessel, have made it
necessary for the Government to institute a careful examination into the
nature and methods of this jurisdiction.

It appeared that Ross was regularly shipped under the flag of the United
States, but was by birth a British subject. My predecessor felt it his
duty to maintain the position that during his service as a regularly
shipped seaman on board an American merchant vessel Ross was subject to
the laws of that service and to the jurisdiction of the United States
consular authorities.

I renew the recommendation which has been heretofore urged by the
Executive upon the attention of Congress, that after the deduction of
such amount as may be found due to American citizens the balance of the
indemnity funds heretofore obtained from China and Japan, and which are
now in the hands of the State Department, be returned to the Governments
of those countries.

The King of Hawaii, in the course of his homeward return after a journey
around the world, has lately visited this country. While our relations
with that Kingdom are friendly, this Government has viewed with concern
the efforts to seek replenishment of the diminishing population of the
islands from outward sources, to a degree which may impair the native
sovereignty and independence, in which the United States was among the
first to testify a lively interest.

Relations of unimpaired amity have been maintained throughout the year
with the respective Governments of Austria-Hungary, Belgium, Denmark,
Hayti, Paraguay and Uruguay, Portugal, and Sweden and Norway. This may
also be said of Greece and Ecuador, although our relations with those
States have for some years been severed by the withdrawal of
appropriations for diplomatic representatives at Athens and Quito. It
seems expedient to restore those missions, even on a reduced scale, and
I decidedly recommend such a course with respect to Ecuador, which is
likely within the near future to play an important part among the
nations of the Southern Pacific.

At its last extra session the Senate called for the text of the Geneva
convention for the relief of the wounded in war. I trust that this
action foreshadows such interest in the subject as will result in the
adhesion of the United States to that humane and commendable engagement.

I invite your attention to the propriety of adopting the new code of
international rules for the prevention of collisions on the high seas
and of conforming the domestic legislation of the United States thereto,
so that no confusion may arise from the application of conflicting rules
in the case of vessels of different nationalities meeting in tidal
waters. These international rules differ but slightly from our own. They
have been adopted by the Navy Department for the governance of the war
ships of the United States on the high seas and in foreign waters, and,
through the action of the State Department in disseminating the rules
and in acquainting shipmasters with the option of conforming to them
without the jurisdictional waters of the United States, they are now
very generally known and obeyed.

The State Department still continues to publish to the country the trade
and manufacturing reports received from its officers abroad. The success
of this course warrants its continuance and such appropriation as may be
required to meet the rapidly increasing demand for these publications.
With special reference to the Atlanta Cotton Exposition, the October
number of the reports was devoted to a valuable collection of papers on
the cotton-goods trade of the world.

The International Sanitary Conference for which, in 1879, Congress made
provision assembled in this city early in January last, and its sessions
were prolonged until March. Although it reached no specific conclusions
affecting the future action of the participant powers, the interchange
of views proved to be most valuable. The full protocols of the sessions
have been already presented to the Senate.

As pertinent to this general subject, I call your attention to the
operations of the National Board of Health. Established by act of
Congress approved March 3, 1879, its sphere of duty was enlarged by the
act of June 2 in the same year. By the last-named act the board was
required to institute such measures as might be deemed necessary for
preventing the introduction of contagious or infectious diseases from
foreign countries into the United States or from one State into another.

The execution of the rules and regulations prepared by the board and
approved by my predecessor has done much to arrest the progress of
epidemic disease, and has thus rendered substantial service to the
nation.

The International Sanitary Conference, to which I have referred, adopted
a form of a bill of health to be used by all vessels seeking to enter
the ports of the countries whose representatives participated in its
deliberations. This form has since been prescribed by the National Board
of Health and incorporated with its rules and regulations, which have
been approved by me in pursuance of law.

The health of the people is of supreme importance. All measures looking
to their protection against the spread of contagious diseases and to the
increase of our sanitary knowledge for such purposes deserve attention
of Congress.

The report of the Secretary of the Treasury presents in detail a highly
satisfactory exhibit of the state of the finances and the condition of
the various branches of the public service administered by that
Department.

The ordinary revenues from all sources for the fiscal year ending June
30, 1881, were:

From customs - $198,159,676.02

From internal revenue - 135,264,385.51

From sales of public lands - 2,201,863.17

From tax on circulation and deposits of national banks - 8,116,115.72

From repayment of interest by Pacific Railway companies - 810,833.80

From sinking fund for Pacific Railway companies - 805,180.54

From customs fees, fines, penalties, etc. - 1,225,514.86

From fees--consular, letters patent, and lands - 2,244,983.98

From proceeds of sales of Government property - 262,174.00

From profits on coinage - 3,468,485.61

From revenues of the District of Columbia - 2,016,199.23

From miscellaneous sources - 6,206,880.13

Total ordinary receipts - 360,782,292.57

The ordinary expenditures for the same period were:

For civil expenses - $17,941,177.19

For foreign intercourse - 1,093,954.92

For Indians - 6,514,161.09

For pensions - 50,059,279.62

For the military establishment, including river and harbor improvements
and arsenals - 40,466,460.55

For the naval establishment, including vessels, machinery, and
improvements at navy-yards - 15,686,671.66

For miscellaneous expenditures, including public buildings,
light-houses, and collecting the revenue - 41,837,280.57

For expenditures on account of the District of Columbia - 3,543,912.03

For interest on the public debt - 82,508,741.18

For premium on bonds purchased - 1,061,248.78

Total ordinary expenditures - 260,712,887.59

Leaving a surplus revenue of $100,069,404.98, which was applied as
follows:

To the redemption of--

Bonds for the sinking fund - $74,371,200.00

Fractional currency for the sinking fund - 109,001.05

Loan of February, 1861 - 7,418,000.00

Ten-forties of 1864 - 2,016,150.00

Five-twenties of 1862 - 18,300.00

Five-twenties of 1864 - 3,400.00

Five-twenties of 1865 - 37,300.00

Consols of 1865 - 143,150.00

Consols of 1867 - 959,150.00

Consols of 1868 - 337,400.00

Texan indemnity stock - 1,000.00

Old demand, compound-interest, and other notes - 18,330.00

And to the increase of cash in the Treasury - 14,637,023.93 -

***

State of the Union Address
Chester A. Arthur
December 4, 1882

To the Senate and House of Representatives of the United States:

It is provided by the Constitution that the President shall from time to
time give to the Congress information of the state of the Union and
recommend to their consideration such measures as he shall judge
necessary and expedient.

In reviewing the events of the year which has elapsed since the
commencement of your sessions, I first call your attention to the
gratifying condition of our foreign affairs. Our intercourse with other
powers has continued to be of the most friendly character.

Such slight differences as have arisen during the year have been already
settled or are likely to reach an early adjustment. The arrest of
citizens of the United States in Ireland under recent laws which owe
their origin to the disturbed condition of that country has led to a
somewhat extended correspondence with the Government of Great Britain. A
disposition to respect our rights has been practically manifested by the
release of the arrested parties.

The claim of this nation in regard to the supervision and control of any
interoceanic canal across the American Isthmus has continued to be the
subject of conference.

It is likely that time will be more powerful than discussion in removing
the divergence between the two nations whose friendship is so closely
cemented by the intimacy of their relations and the community of their
interests.

Our long-established friendliness with Russia has remained unshaken. It
has prompted me to proffer the earnest counsels of this Government that
measures be adopted for suppressing the proscription which the Hebrew
race in that country has lately suffered. It has not transpired that any
American citizen has been subjected to arrest or injury, but our
courteous remonstrance has nevertheless been courteously received. There
is reason to believe that the time is not far distant when Russia will
be able to secure toleration to all faiths within her borders.

At an international convention held at Paris in 1880, and attended by
representatives of the United States, an agreement was reached in
respect to the protection of trade-marks, patented articles, and the
rights of manufacturing firms and corporations. The formulating into
treaties of the recommendations thus adopted is receiving the attention
which it merits.

The protection of submarine cables is a subject now under consideration
by an international conference at Paris. Believing that it is clearly
the true policy of this Government to favor the neutralization of this
means of intercourse, I requested our minister to France to attend the
convention as a delegate. I also designated two of our eminent
scientists to attend as our representatives at the meeting of an
international committee at Paris for considering the adoption of a
common unit to measure electric force.

In view of the frequent occurrence of conferences for the consideration
of important matters of common interest to civilized nations, I
respectfully suggest that the Executive be invested by Congress with
discretionary powers to send delegates to such conventions, and that
provision be made to defray the expenses incident thereto.

The difference between the United States and Spain as to the effect of a
judgment and certificate of naturalization has not yet been adjusted,
but it is hoped and believed that negotiations now in progress will
result in the establishment of the position which seems to this
Government so reasonable and just.

I have already called the attention of Congress to the fact that in the
ports of Spain and its colonies onerous fines have lately been imposed
upon vessels of the United States for trivial technical offenses against
local regulations. Efforts for the abatement of these exactions have
thus far proved unsuccessful.

I regret to inform you also that the fees demanded by Spanish consuls in
American ports are in some cases so large, when compared with the value
of the cargo, as to amount in effect to a considerable export duty, and
that our remonstrances in this regard have not as yet received the
attention which they seem to deserve.

The German Government has invited the United States to participate in an
international exhibition of domestic cattle to be held at Hamburg in
July, 1883. If this country is to be represented, it is important that
in the early days of this session Congress should make a suitable
appropriation for that purpose.

The death of Mr. Marsh, our late minister to Italy, has evoked from that
Government expressions of profound respect for his exalted character and
for his honorable career in the diplomatic service of his country. The
Italian Government has raised a question as to the propriety of
recognizing in his dual capacity the representative of this country
recently accredited both as secretary of legation and as consul-general
at Rome. He has been received as secretary, but his exequatur as
consul-general has thus far been withheld.

The extradition convention with Belgium, which has been in operation
since 1874, has been lately supplanted by another. The Senate has
signified its approval, and ratifications have been duly exchanged
between the contracting countries. To the list of extraditable crimes
has been added that of the assassination or attempted assassination of
the chief of the State.

Negotiations have been opened with Switzerland looking to a settlement
by treaty of the question whether its citizens can renounce their
allegiance and become citizens of the United States without obtaining
the consent of the Swiss Government.

I am glad to inform you that the immigration of paupers and criminals
from certain of the Cantons of Switzerland has substantially ceased and
is no longer sanctioned by the authorities.

The consideration of this subject prompts the suggestion that the act of
August 3, 1882, which has for its object the return of foreign convicts
to their own country, should be so modified as not to be open to the
interpretation that it affects the extradition of criminals on preferred
charges of crime.

The Ottoman Porte has not yet assented to the interpretation which this
Government has put upon the treaty of 1830 relative to its
jurisdictional rights in Turkey. It may well be, however, that this
difference will be adjusted by a general revision of the system of
jurisdiction of the United States in the countries of the East, a
subject to which your attention has been already called by the Secretary
of State.

In the interest of justice toward China and Japan, I trust that the
question of the return of the indemnity fund to the Governments of those
countries will reach at the present session the satisfactory solution
which I have already recommended, and which has recently been
foreshadowed by Congressional discussion.

The treaty lately concluded with Korea awaits the action of the Senate.
During the late disturbance in Egypt the timely presence of American
vessels served as a protection to the persons and property of many of
our own citizens and of citizens of other countries, whose governments
have expressed their thanks for this assistance.

The recent legislation restricting immigration of laborers from China
has given rise to the question whether Chinese proceeding to or from
another country may lawfully pass through our own.

Construing the act of May 6, 1882, in connection with the treaty of
November 7, 1880, the restriction would seem to be limited to Chinese
immigrants coming to the United States as laborers, and would not forbid
a mere transit across our territory. I ask the attention of Congress to
the subject, for such action, if any, as may be deemed advisable.

This Government has recently had occasion to manifest its interest in
the Republic of Liberia by seeking to aid the amicable settlement of the
boundary dispute now pending between that Republic and the British
possession of Sierra Leone.

The reciprocity treaty with Hawaii will become terminable after
September 9, 1883, on twelve months' notice by either party. While
certain provisions of that compact may have proved onerous, its
existence has fostered commercial relations which it is important to
preserve. I suggest, therefore, that early consideration be given to
such modifications of the treaty as seem to be demanded by the interests
of our people.

In view of our increasing trade with both Hayti and Santo Domingo, I
advise that provision be made for diplomatic intercourse with the latter
by enlarging the scope of the mission at Port au Prince.

I regret that certain claims of American citizens against the Government
of Hayti have thus far been urged unavailingly.

A recent agreement with Mexico provides for the crossing of the frontier
by the armed forces of either country in pursuit of hostile Indians. In
my message of last year I called attention to the prevalent lawlessness
upon the borders and to the necessity of legislation for its
suppression. I again invite the attention of Congress to the subject.

A partial relief from these mischiefs has been sought in a convention,
which now awaits the approval of the Senate, as does also another
touching the establishment of the international boundary between the
United States and Mexico. If the latter is ratified, the action of
Congress will be required for establishing suitable commissions of
survey. The boundary dispute between Mexico and Guatemala, which led
this Government to proffer its friendly counsels to both parties, has
been amicably settled.

No change has occurred in our relations with Venezuela. I again invoke
your action in the matter of the pending awards against that Republic,
to which reference was made by a special message from the Executive at
your last session.

An invitation has been received from the Government of Venezuela to send
representatives in July, 1883, to Caracas for participating in the
centennial celebration of the birth of Bolivar, the founder of South
American independence. In connection with this event it is designed to
commence the erection at Caracas of a statue of Washington and to
conduct an industrial exhibition which will be open to American
products. I recommend that the United States be represented and that
suitable provision be made therefor.

The elevation of the grade of our mission in Central America to the
plenipotentiary rank, which was authorized by Congress at its late
session, has been since effected.

The war between Peru and Bolivia on the one side and Chile on the other
began more than three years ago. On the occupation by Chile in 1880 of
all the littoral territory of Bolivia, negotiations for peace were
conducted under the direction of the United States. The allies refused
to concede any territory, but Chile has since become master of the whole
coast of both countries and of the capital of Peru. A year since, as you
have already been advised by correspondence transmitted to you in
January last, this Government sent a special mission to the belligerent
powers to express the hope that Chile would be disposed to accept a
money indemnity for the expenses of the war and to relinquish her demand
for a portion of the territory of her antagonist.

This recommendation, which Chile declined to follow, this Government did
not assume to enforce; nor can it be enforced without resort to measures
which would be in keeping neither with the temper of our people nor with
the spirit of our institutions.

The power of Peru no longer extends over its whole territory, and in the
event of our interference to dictate peace would need to be supplemented
by the armies and navies of the United States. Such interference would
almost inevitably lead to the establishment of a protectorate--a result
utterly at odds with our past policy, injurious to our present
interests, and full of embarrassments for the future.

For effecting the termination of hostilities upon terms at once just to
the victorious nation and generous to its adversaries, this Government
has spared no efforts save such as might involve the complications which
I have indicated.

It is greatly to be deplored that Chile seems resolved to exact such
rigorous conditions of peace and indisposed to submit to arbitration the
terms of an amicable settlement. No peace is likely to be lasting that
is not sufficiently equitable and just to command the approval of other
nations.

About a year since invitations were extended to the nations of this
continent to send representatives to a peace congress to assemble at
Washington in November, 1882. The time of meeting was fixed at a period
then remote, in the hope, as the invitation itself declared, that in the
meantime the disturbances between the South American Republics would be
adjusted. As that expectation seemed unlikely to be realized, I asked in
April last for an expression of opinion from the two Houses of Congress
as to the advisability of holding the proposed convention at the time
appointed. This action was prompted in part by doubts which mature
reflection had suggested whether the diplomatic usage and traditions of
the Government did not make it fitting that the Executive should consult
the representatives of the people before pursuing a line of policy
somewhat novel in its character and far reaching in its possible
consequences. In view of the fact that no action was taken by Congress
in the premises and that no provision had been made for necessary
expenses, I subsequently decided to postpone the convocation, and so
notified the several Governments which had been invited to attend.

I am unwilling to dismiss this subject without assuring you of my
support of any measures the wisdom of Congress may devise for the
promotion of peace on this continent and throughout the world, and I
trust that the time is nigh when, with the universal assent of civilized
peoples, all international differences shall be determined without
resort to arms by the benignant processes of arbitration.

Changes have occurred in the diplomatic representation of several
foreign powers during the past year. New ministers from the Argentine
Republic, Austria-Hungary, Brazil, Chile, China, France, Japan, Mexico,
the Netherlands, and Russia have presented their credentials. The
missions of Denmark and Venezuela at this capital have been raised in
grade. Switzerland has created a plenipotentiary mission to this
Government, and an embassy from Madagascar and a minister from Siam will
shortly arrive.

Our diplomatic intercourse has been enlarged by the establishment of
relations with the new Kingdom of Servia, by the creation of a mission
to Siam, and by the restoration of the mission to Greece. The Shah of
Persia has expressed his gratification that a charge d'affaires will
shortly be sent to that country, where the rights of our citizens have
been hitherto courteously guarded by the representatives of Great
Britain.

I renew my recommendation of such legislation as will place the United
States in harmony with other maritime powers with respect to the
international rules for the prevention of collisions at sea.

In conformity with your joint resolution of the 3d of August last, I
have directed the Secretary of State to address foreign governments in
respect to a proposed conference for considering the subject of the
universal adoption of a common prime meridian to be used in the
reckoning of longitude and in the regulation of time throughout the
civilized world. Their replies will in due time be laid before you.

An agreement was reached at Paris in 1875 between the principal powers
for the interchange of official publications through the medium of their
respective foreign departments.

The admirable system which has been built up by the enterprise of the
Smithsonian Institution affords a practical basis for our cooperation in
this scheme, and an arrangement has been effected by which that
institution will perform the necessary labor, under the direction of the
Department of State. A reasonable compensation therefor should be
provided by law.

A clause in the act making appropriations for the diplomatic and
consular service contemplates the reorganization of both branches of
such service on a salaried basis, leaving fees to inure to the benefit
of the Treasury. I cordially favor such a project, as likely to correct
abuses in the present system. The Secretary of State will present to you
at an early day a plan for such reorganization.

A full and interesting exhibit of the operations of the Treasury
Department is afforded by the report of the Secretary.

It appears that the ordinary revenues from all sources for the fiscal
year ended June 30, 1882, were as follows:

From customs - $220,410,730.25

From internal revenue - 146,497,595.45

From sales of public lands - 4,753,140.37

From tax on circulation and deposits of national banks - 8,956,794.45

From repayment of interest by Pacific Railway companies - 840,554.37

From sinking fund for Pacific Railway companies - 796,271.42

From customs fees, fines, penalties, etc. - 1,343,348.00

From fees--consular, letters patent, and lands - 2,638,990.97

From proceeds of sales of Government property - 314,959.85

From profits on coinage, bullion deposits, and assays - 4,116,693.73

From Indian trust funds - 5,705,243.22

From deposits by individuals for surveying public lands - 2,052,306.36

From revenues of the District of Columbia - 1,715,176.41

From miscellaneous sources - 3,383,445.43

Total ordinary receipts - 403,525,250.28

The ordinary expenditures for the same period were--

For civil expenses - $18,042,386.42

For foreign intercourse - 1,307,583.19

For Indians - 9,736,747.40

For pensions - 61,345,193.95

For the military establishment, including river and harbor improvements,
and arsenals - 43,570,494.19

For the naval establishment, including vessels, machinery, and
improvements at navy-yards - 15,032,046.26

For miscellaneous expenditures, including public buildings,
light-houses, and collecting the revenue - 34,539,237.50

For expenditures on account of the District of Columbia - 3,330,543.87

For interest on the public debt - 71,077,206.79

Total ordinary expenditures - 257,981,439.57

Leaving a surplus revenue of $145,543,810.71, which, with an amount
drawn from the cash balance in the Treasury of $20,737,694.84, making
$166,281,505.55, was applied to the redemption--

Of bonds for the sinking fund - $60,079,150.00

Of fractional currency for the sinking fund - 58,705.55

Of loan of July and August, 1861 - 62,572,050.00

Of loan of March, 1863 - 4,472,900.00

Of funded loan of 1881 - 37,194,450.00

Of loan of 1858 - 303,000.00

Of loan of February, 1861 - 1,000.00

Of five-twenties of 1862 - 2,100.00

Of five-twenties of 1864 - 7,400.00

Of five-twenties of 1865 - 6,500.00

Of ten-forties of 1864 - 254,550.00

Of consols of 1865 - 86,450.00

Of consols of 1867 - 408,250.00

Of consols of 1868 - 141,400.00

Of Oregon War debt - 675,250.00

Of old demand, compound-interest, and other notes - 18,350.00 -

***

State of the Union Address
Chester A. Arthur
December 4, 1883

To the Congress of the United States:

At the threshold of your deliberations I congratulate you upon the
favorable aspect of the domestic and foreign affairs of this Government.

Our relations with other countries continue to be upon a friendly
footing. With the Argentine Republic, Austria, Belgium, Brazil, Denmark,
Hayti, Italy, Santo Domingo, and Sweden and Norway no incident has
occurred which calls for special comment. The recent opening of new
lines of telegraphic communication with Central America and Brazil
permitted the interchange of messages of friendship with the Governments
of those countries.

During the year there have been perfected and proclaimed consular and
commercial treaties with Servia and a consular treaty with Roumania,
thus extending our intercourse with the Danubian countries, while our
Eastern relations have been put upon a wider basis by treaties with
Korea and Madagascar. The new boundary-survey treaty with Mexico, a
trade-marks convention and a supplementary treaty of extradition with
Spain, and conventions extending the duration of the Franco-American
Claims Commission have also been proclaimed.

Notice of the termination of the fisheries articles of the treaty of
Washington was duly given to the British Government, and the reciprocal
privileges and exemptions of the treaty will accordingly cease on July
1, 1885. The fisheries industries, pursued by a numerous class of our
citizens on the northern coasts, both of the Atlantic and Pacific
oceans, are worthy of the fostering care of Congress. Whenever brought
into competition with the like industries of other countries, our
fishermen, as well as our manufacturers of fishing appliances and
preparers of fish products, have maintained a foremost place. I suggest
that Congress create a commission to consider the general question of
our rights in the fisheries and the means of opening to our citizens,
under just and enduring conditions, the richly stocked fishing waters
and sealing grounds of British North America.

Question has arisen touching the deportation to the United States from
the British Islands, by governmental or municipal aid, of persons unable
there to gain a living and equally a burden on the community here. Such
of these persons as fall under the pauper class as defined by law have
been sent back in accordance with the provisions of our statutes. Her
Majesty's Government has insisted that precautions have been taken
before shipment to prevent these objectionable visitors from coming
hither without guaranty of support by their relatives in this country.
The action of the British authorities in applying measures for relief
has, however, in so many cases proved ineffectual, and especially so in
certain recent instances of needy emigrants reaching our territory
through Canada, that a revision of our legislation upon this subject may
be deemed advisable.

Correspondence relative to the Clayton-Bulwer treaty has been continued
and will be laid before Congress.

The legislation of France against the importation of prepared swine
products from the United States has been repealed. That result is due no
less to the friendly representations of this Government than to a
growing conviction in France that the restriction was not demanded by
any real danger to health.

Germany still prohibits the introduction of all swine products from
America. I extended to the Imperial Government a friendly invitation to
send experts to the United States to inquire whether the use of those
products was dangerous to health. This invitation was declined. I have
believed it of such importance, however, that the exact facts should be
ascertained and promulgated that I have appointed a competent commission
to make a thorough investigation of the subject. Its members have shown
their public spirit by accepting their trust without pledge of
compensation, but I trust that Congress will see in the national and
international bearings of the matter a sufficient motive for providing
at least for reimbursement of such expenses as they may necessarily
incur.

The coronation of the Czar at Moscow afforded to this Government an
occasion for testifying its continued friendship by sending a special
envoy and a representative of the Navy to attend the ceremony.

While there have arisen during the year no grave questions affecting the
status in the Russian Empire of American citizens of other faith than
that held by the national church, this Government remains firm in its
conviction that the rights of its citizens abroad should be in no wise
affected by their religious belief.

It is understood that measures for the removal of the restrictions which
now burden our trade with Cuba and Puerto Rico are under consideration
by the Spanish Government.

The proximity of Cuba to the United States and the peculiar methods of
administration which there prevail necessitate constant discussion and
appeal on our part from the proceedings of the insular authorities. I
regret to say that the just protests of this Government have not as yet
produced satisfactory results.

The commission appointed to decide certain claims of our citizens
against the Spanish Government, after the recognition of a satisfactory
rule as to the validity and force of naturalization in the United
States, has finally adjourned. Some of its awards, though made more than
two years ago, have not yet been paid. Their speedy payment is expected.

Claims to a large amount which were held by the late commission to be
without its jurisdiction have been diplomatically presented to the
Spanish Government. As the action of the colonial authorities which has
given rise to these claims was admittedly illegal, full reparation for
the injury sustained by our citizens should be no longer delayed.

The case of the Masonic has not yet reached a settlement. Manila court
has found that the proceedings of which this Government has complained
were unauthorized, and it is hoped that the Government of Spain will not
withhold the speedy reparation which its sense of justice should impel
it to offer for the unusual severity and unjust action of its
subordinate colonial officers in the case of this vessel.

The Helvetian Confederation has proposed the inauguration of a class of
international treaties for the referment to arbitration of grave
questions between nations. This Government has assented to the proposed
negotiation of such a treaty with Switzerland.

Under the treaty of Berlin liberty of conscience and civil rights are
assured to all strangers in Bulgaria. As the United States have no
distinct conventional relations with that country and are not a party to
the treaty, they should, in my opinion, maintain diplomatic
representation at Sofia for the improvement of intercourse and the
proper protection of the many American citizens who resort to that
country as missionaries and teachers. I suggest that I be given
authority to establish an agency and consulate-general at the Bulgarian
capital.

The United States are now participating in a revision of the tariffs of
the Ottoman Empire. They have assented to the application of a license
tax to foreigners doing business in Turkey, but have opposed the
oppressive storage tax upon petroleum entering the ports of that
country.

The Government of the Khedive has proposed that the authority of the
mixed judicial tribunals in Egypt be extended so as to cover citizens of
the United States accused of crime, who are now triable before consular
courts. This Government is not indisposed to accept the change, but
believes that its terms should be submitted for criticism to the
commission appointed to revise the whole subject.

At no time in our national history has there been more manifest need of
close and lasting relations with a neighboring state than now exists
with respect to Mexico. The rapid influx of our capital and enterprise
into that country shows, by what has already been accomplished, the vast
reciprocal advantages which must attend the progress of its internal
development. The treaty of commerce and navigation of 1848 has been
terminated by the Mexican Government, and in the absence of conventional
engagements the rights of our citizens in Mexico now depend upon the
domestic statutes of that Republic. There have been instances of harsh
enforcement of the laws against our vessels and citizens in Mexico and
of denial of the diplomatic resort for their protection. The initial
step toward a better understanding has been taken in the negotiation by
the commission authorized by Congress of a treaty which is still before
the Senate awaiting its approval.

The provisions for the reciprocal crossing of the frontier by the troops
in pursuit of hostile Indians have been prolonged for another year. The
operations of the forces of both Governments against these savages have
been successful, and several of their most dangerous bands have been
captured or dispersed by the skill and valor of United States and
Mexican soldiers fighting in a common cause.

The convention for the resurvey of the boundary from the Rio Grande to
the Pacific having been ratified and exchanged, the preliminary
reconnoissance therein stipulated has been effected. It now rests with
Congress to make provision for completing the survey and relocating the
boundary monuments.

A convention was signed with Mexico on July 13, 1882, providing for the
rehearing of the cases of Benjamin Well and the Abra Silver Mining
Company, in whose favor awards were made by the late American and
Mexican Claims Commission. That convention still awaits the consent of
the Senate. Meanwhile, because of those charges of fraudulent awards
which have made a new commission necessary, the Executive has directed
the suspension of payments of the distributive quota received from
Mexico.

Our geographical proximity to Central America and our political and
commercial relations with the States of that country justify, in my
judgment, such a material increase of our consular corps as will place
at each capital a consul-general.

The contest between Bolivia, Chile, and Peru has passed from the stage
of strategic hostilities to that of negotiation, in which the counsels
of this Government have been exercised. The demands of Chile for
absolute cession of territory have been maintained and accepted by the
party of General Iglesias to the extent of concluding a treaty of peace
with the Government of Chile in general conformity with the terms of the
protocol signed in May last between the Chilean commander and General
Iglesias. As a result of the conclusion of this treaty General Iglesias
has been formally recognized by Chile as President of Peru and his
government installed at Lima, which has been evacuated by the Chileans.
A call has been issued by General Iglesias for a representative
assembly, to be elected on the 13th of January, and to meet at Lima on
the 1st of March next. Meanwhile the provisional government of General
Iglesias has applied for recognition to the principal powers of America
and Europe. When the will of the Peruvian people shall be manifested, I
shall not hesitate to recognize the government approved by them.

Diplomatic and naval representatives of this Government attended at
Caracas the centennial celebration of the birth of the illustrious
Bolivar. At the same time the inauguration of the statue of Washington
in the Venezuelan capital testified to the veneration in which his
memory is there held.

Congress at its last session authorized the Executive to propose to
Venezuela a reopening of the awards of the mixed commission of Caracas.
The departure from this country of the Venezuelan minister has delayed
the opening of negotiations for reviving the commission. This Government
holds that until the establishment of a treaty upon this subject the
Venezuelan Government must continue to make the payments provided for in
the convention of 1866.

There is ground for believing that the dispute growing out of the unpaid
obligations due from Venezuela to France will be satisfactorily
adjusted. The French cabinet has proposed a basis of settlement which
meets my approval, but as it involves a recasting of the annual quotas
of the foreign debt it has been deemed advisable to submit the proposal
to the judgment of the cabinets of Berlin, Copenhagen, The Hague,
London, and Madrid.

At the recent coronation of His Majesty King Kalakaua this Government
was represented both diplomatically and by the formal visit of a vessel
of war.

The question of terminating or modifying the existing reciprocity treaty
with Hawaii is now before Congress. I am convinced that the charges of
abuses and frauds under that treaty have been exaggerated, and I renew
the suggestion of last year's message that the treaty be modified
wherever its provisions have proved onerous to legitimate trade between
the two countries. I am not disposed to favor the entire cessation of
the treaty relations which have fostered good will between the countries
and contributed toward the equality of Hawaii in the family of nations.

In pursuance of the policy declared by this Government of extending our
intercourse with the Eastern nations, legations have during the past
year been established in Persia, Siam, and Korea. It is probable that
permanent missions of those countries will ere long be maintained in the
United States. A special embassy from Siam is now on its way hither.

Treaty relations with Korea were perfected by the exchange at Seoul, on
the 19th of May last, of the ratifications of the lately concluded
convention, and envoys from the King of Chosen have visited this country
and received a cordial welcome. Korea, as yet unacquainted with the
methods of Western civilization, now invites the attention of those
interested in the advancement of our foreign trade, as it needs the
implements and products which the United States are ready to supply. We
seek no monopoly of its commerce and no advantages over other nations,
but as the Chosenese, in reaching for a higher civilization, have
confided in this Republic, we can not regard with indifference any
encroachment on their rights.

China, by the payment of a money indemnity, has settled certain of the
long-pending claims of our citizens, and I have strong hopes that the
remainder will soon be adjusted.

Questions have arisen touching the rights of American and other foreign
manufacturers in China under the provisions of treaties which permit
aliens to exercise their industries in that country. On this specific
point our own treaty is silent, but under the operation of the
most-favored-nation clause we have like privileges with those of other
powers. While it is the duty of the Government to see that our citizens
have the full enjoyment of every benefit secured by treaty, I doubt the
expediency of leading in a movement to constrain China to admit an
interpretation which we have only an indirect treaty right to exact. The
transference to China of American capital for the employment there of
Chinese labor would in effect inaugurate a competition for the control
of markets now supplied by our home industries.

There is good reason to believe that the law restricting the immigration
of Chinese has been violated, intentionally or otherwise, by the
officials of China upon whom is devolved the duty of certifying that the
immigrants belong to the excepted classes.

Measures have been taken to ascertain the facts incident to this
supposed infraction, and it is believed that the Government of China
will cooperate with the United States in securing the faithful
observance of the law.

The same considerations which prompted Congress at its last session to
return to Japan the Simonoseki indemnity seem to me to require at its
hands like action in respect to the Canton indemnity fund, now amounting
to $300,000.

The question of the general revision of the foreign treaties of Japan
has been considered in an international conference held at Tokyo, but
without definite result as yet. This Government is disposed to concede
the requests of Japan to determine its own tariff duties, to provide
such proper judicial tribunals as may commend themselves to the Western
powers for the trial of causes to which foreigners are parties, and to
assimilate the terms and duration of its treaties to those of other
civilized states.

Through our ministers at London and at Monrovia this Government has
endeavored to aid Liberia in its differences with Great Britain touching
the northwestern boundary of that Republic. There is a prospect of
adjustment of the dispute by the adoption of the Mannah River as the
line. This arrangement is a compromise of the conflicting territorial
claims and takes from Liberia no country over which it has maintained
effective jurisdiction.

The rich and populous valley of the Kongo is being opened to commerce by
a society called the International African Association, of which the
King of the Belgians is the president and a citizen of the United States
the chief executive officer. Large tracts of territory have been ceded
to the association by native chiefs, roads have been opened, steamboats
placed on the river, and the nuclei of states established at twenty-two
stations under one flag which offers freedom to commerce and prohibits
the slave trade. The objects of the society are philanthropic. It does
not aim at permanent political control, but seeks the neutrality of the
valley. The United States can not be indifferent to this work nor to the
interests of their citizens involved in it. It may become advisable for
us to cooperate with other commercial powers in promoting the rights of
trade and residence in the Kongo Valley free from the interference or
political control of any one nation.

In view of the frequency of invitations from foreign governments to
participate in social and scientific congresses for the discussion of
important matters of general concern, I repeat the suggestion of my last
message that provision be made for the exercise of discretionary power
by the Executive in appointing delegates to such convocations. Able
specialists are ready to serve the national interests in such capacity
without personal profit or other compensation than the defrayment of
expenses actually incurred, and this a comparatively small annual
appropriation would suffice to meet.

I have alluded in my previous messages to the injurious and vexatious
restrictions suffered by our trade in the Spanish West Indies. Brazil,
whose natural outlet for its great national staple, coffee, is in and
through the United States, imposes a heavy export duty upon that
product. Our petroleum exports are hampered in Turkey and in other
Eastern ports by restrictions as to storage and by onerous taxation. For
these mischiefs adequate relief is not always afforded by reciprocity
treaties like that with Hawaii or that lately negotiated with Mexico and
now awaiting the action of the Senate. Is it not advisable to provide
some measure of equitable retaliation in our relations with governments
which discriminate against our own? If, for example, the Executive were
empowered to apply to Spanish vessels and cargoes from Cuba and Puerto
Rico the same rules of treatment and scale of penalties for technical
faults which are applied to our vessels and cargoes in the Antilles, a
resort to that course might not be barren of good results.

The report of the Secretary of the Treasury gives a full and interesting
exhibit of the financial condition of the country.

It shows that the ordinary revenues from all sources for the fiscal year
ended June 30, 1883, amounted to $398,287,581.95, whereof there was
received--

From customs - $214,706,496.93

From internal revenue - 144,720,368.98

From sales of public lands - 7,955,864.42

From tax on circulation and deposits of national banks - 9,111,008.85

From profits on coinage, bullion deposits, and assays - 4,460,205.17

From other sources - 17,333,637.60

Total - 398,287,581.95

For the same period the ordinary expenditures were:

For civil expenses - $22,343,285.76

For foreign intercourse - 2,419,275.24

For Indians - 7,362,590.34

For Pensions - 66,012,573.64

For the military establishment, including river and harbor improvements
and arsenals - 48,911,382.93

For the naval establishment, including vessels, machinery, and
improvements at navy-yards - 15,283,437.17

For miscellaneous expenditures, including public buildings,
light-houses, and collecting the revenue - 40,098,432.73

For expenditures on account of the District of Columbia - 3,817,028.48

For interest on the public debt - 59,160,131.25

Total - 265,408,137.54

Leaving a surplus revenue of $132,879,444.41, which, with an amount
drawn from the cash balance in the Treasury of $1,299,312.55, making
$134,178,756.96, was applied to the redemption--

Of bonds for the sinking fund - $44,850,700.00

Of fractional currency for the sinking fund - 46,556.96

Of funded loan of 1881, continued at 3 1\2 per cent - 65,380,250.00

Of loan of July and August, 1861, continued at 3 1/2 per cent -
20,594,600.00

Of funded loan of 1907 - 1,418,850.00

Of funded loan of 1881 - 719,150.00

Of loan of February, 1861 - 18,000.00

Of loan of July and August, 1861 - 266,600.00

Of loan of March, 1863 - 116,850.00

Of loan of July, 1882 - 47,650.00

Of five-twenties of 1862 - 10,300.00

Of five-twenties of 1864 - 7,050.00

Of five-twenties of 1865 - 9,600.00

Of ten-forties of 1864 - 133,550.00

Of consols of 1865 - 40,800.00

Of consols of 1867 - 235,700.00

Of consols of 1868 - 154,650.00

Of Oregon War debt - 5,450.00

Of refunding certificates - 109,150.00

Of old demand, compound-interest and other notes - 13,300.00

Total - 134,178,756.96

The revenue for the present fiscal year, actual and estimated, is as
follows:

Source - For the quarter ended September 30, 1883 (actual) - For the
remaining three quarters of the year (estimated)

From customs - $57,402,975.67 - $137,597,024.33

From internal revenue - 29,662,078.60 - 90,337,921.40

From sales of public lands - 2,932,635.17 - 5,067,634.83

From tax on circulation and deposits of national banks - 1,557,800.88 -
1,542,199.12

From repayment of interest and sinking fund, Pacific Railway companies -
521,059.51 - 1,478,940.49

From customs fees, fines, penalties, etc. - 298,696.78 - 901,303.22

From fees--consular, letters patent, and lands - 863,209.80 -
2,436,790.20

From proceeds of sales of Government property - 112,562.23 - 167,437.77

From profits on coinage, etc. - 950,229.46 - 3,149,770.54

From deposits for surveying public lands - 172,461.31 - 327,538.69

From revenues of the District of Columbia - 256,017.99 - 1,643,982.01

From miscellaneous sources - 1,237,189.63 - 2,382,810.37

Total receipts - 95,966,917.03 - 247,033,082.97

The actual and estimated expenses for the same period are:

Object - For the quarter ended September 30, 1883 (actual) - For the
remaining three quarters of the year (estimated)

For civil and miscellaneous expenses, including public buildings,
light-houses, and collecting the revenue - $15,385,799.42 -
$51,114,200.58

For Indians - 2,623,390.54 - 4,126,609.46

For pensions - 16,285,261.98 - 53,714,738.02

For military establishment, including fortifications, river and harbor
improvements, and arsenals - 13,512,204.33 - 26,487,795.67

For naval establishment, including vessels and machinery, and
improvements at navy-yards - 4,199,299.69 - 12,300,700.31

For expenditures on account of the District of Columbia - 1,138,836.41 -
2,611,163.59

For interest on the public debt - 14,797,297.96 - 39,702,702.04

Total ordinary expenditures - 67,942,090.33 - 190,057,909.67

Total receipts, actual and estimated - $343,000,000.00

Total expenditures, actual and estimated - 258,000,000.00 -

***

State of the Union Address
Chester A. Arthur
December 1, 1884

To the Congress of the United States:

Since the close of your last session the American people, in the
exercise of their highest right of suffrage, have chosen their Chief
Magistrate for the four years ensuing.

When it is remembered that at no period in the country's history has the
long political contest which customarily precedes the day of the
national election been waged with greater fervor and intensity, it is a
subject of general congratulation that after the controversy at the
polls was over, and while the slight preponderance by which the issue
had been determined was as yet unascertained, the public peace suffered
no disturbance, but the people everywhere patiently and quietly awaited
the result.

Nothing could more strikingly illustrate the temper of the American
citizen, his love of order, and his loyalty to law. Nothing could more
signally demonstrate the strength and wisdom of our political
institutions.

Eight years have passed since a controversy concerning the result of a
national election sharply called the attention of the Congress to the
necessity of providing more precise and definite regulations for
counting the electoral vote.

It is of the gravest importance that this question be solved before
conflicting claims to the Presidency shall again distract the country,
and I am persuaded that by the people at large any of the measures of
relief thus far proposed would be preferred to continued inaction.

Our relations with all foreign powers continue to be amicable.

With Belgium a convention has been signed whereby the scope of present
treaties has been so enlarged as to secure to citizens of either country
within the jurisdiction of the other equal rights and privileges in the
acquisition and alienation of property. A trade-marks treaty has also
been concluded.

The war between Chile and Peru is at an end. For the arbitration of the
claims of American citizens who during its continuance suffered through
the acts of the Chilean authorities a convention will soon be
negotiated.

The state of hostilities between France and China continues to be an
embarrassing feature of our Eastern relations. The Chinese Government
has promptly adjusted and paid the claims of American citizens whose
property was destroyed in the recent riots at Canton. I renew the
recommendation of my last annual message, that the Canton indemnity fund
be returned to China.

The true interpretation of the recent treaty with that country
permitting the restriction of Chinese immigration is likely to be again
the subject of your deliberations. It may be seriously questioned
whether the statute passed at the last session does not violate the
treaty rights of certain Chinese who left this country with return
certificates valid under the old law, and who now seem to be debarred
from relanding for lack of the certificates required by the new.

The recent purchase by citizens of the United States of a large trading
fleet heretofore under the Chinese flag has considerably enhanced our
commercial importance in the East. In view of the large number of
vessels built or purchased by American citizens in other countries and
exclusively employed in legitimate traffic between foreign ports under
the recognized protection of our flag, it might be well to provide a
uniform rule for their registration and documentation, so that the bona
fide property rights of our citizens therein shall be duly evidenced and
properly guarded.

Pursuant to the advice of the Senate at the last session, I recognized
the flag of the International Association of the Kongo as that of a
friendly government, avoiding in so doing any prejudgment of conflicting
territorial claims in that region. Subsequently, in execution of the
expressed wish of the Congress, I appointed a commercial agent for the
Kongo basin.

The importance of the rich prospective trade of the Kongo Valley has led
to the general conviction that it should be open to all nations upon
equal terms. At an international conference for the consideration of
this subject called by the Emperor of Germany, and now in session at
Berlin, delegates are in attendance on behalf of the United States. Of
the results of the conference you will be duly advised.

The Government of Korea has generously aided the efforts of the United
States minister to secure suitable premises for the use of the legation.
As the conditions of diplomatic intercourse with Eastern nations demand
that the legation premises be owned by the represented power, I advise
that an appropriation be made for the acquisition of this property by
the Government. The United States already possess valuable premises at
Tangier as a gift from the Sultan of Morocco. As is stated hereafter,
they have lately received a similar gift from the Siamese Government.
The Government of Japan stands ready to present to us extensive grounds
at Tokyo whereon to erect a suitable building for the legation,
court-house, and jail, and similar privileges can probably be secured in
China and Persia. The owning of such premises would not only effect a
large saving of the present rentals, but would permit of the due
assertion of extraterritorial rights in those countries, and would the
better serve to maintain the dignity of the United States.

The failure of Congress to make appropriation for our representation at
the autonomous court of the Khedive has proved a serious embarrassment
in our intercourse with Egypt; and in view of the necessary intimacy of
diplomatic relationship due to the participation of this Government as
one of the treaty powers in all matters of administration there
affecting the rights of foreigners, I advise the restoration of the
agency and consulate-general at Cairo on its former basis. I do not
conceive it to be the wish of Congress that the United States should
withdraw altogether from the honorable position they have hitherto held
with respect to the Khedive, or that citizens of this Republic residing
or sojourning in Egypt should hereafter be without the aid and
protection of a competent representative.

With France the traditional cordial relationship continues. The colossal
statue of Liberty Enlightening the World, the generous gift of the
people of France, is expected to reach New York in May next. I suggest
that Congressional action be taken in recognition of the spirit which
has prompted this gift and in aid of the timely completion of the
pedestal upon which it is to be placed.

Our relations with Germany, a country which contributes to our own some
of the best elements of citizenship, continue to be cordial. The United
States have extradition treaties with several of the German States, but
by reason of the confederation of those States under the imperial rule
the application of such treaties is not as uniform and comprehensive as
the interests of the two countries require. I propose, therefore, to
open negotiations for a single convention of extradition to embrace all
the territory of the Empire.

It affords me pleasure to say that our intercourse with Great Britain
continues to be of a most friendly character.

The Government of Hawaii has indicated its willingness to continue for
seven years the provisions of the existing reciprocity treaty. Such
continuance, in view of the relations of that country to the American
system of States, should, in my judgment, be favored.

The revolution in Hayti against the established Government has
terminated. While it was in progress it became necessary to enforce our
neutrality laws by instituting proceedings against individuals and
vessels charged with their infringement. These prosecutions were in all
cases successful.

Much anxiety has lately been displayed by various European Governments,
and especially by the Government of Italy, for the abolition of our
import duties upon works of art. It is well to consider whether the
present discrimination in favor of the productions of American artists
abroad is not likely to result, as they themselves seem very generally
to believe it may, in the practical exclusion of our painters and
sculptors from the rich fields for observation, study, and labor which
they have hitherto enjoyed.

There is prospect that the long-pending revision of the foreign treaties
of Japan may be concluded at a new conference to be held at Tokyo. While
this Government fully recognizes the equal and independent station of
Japan in the community of nations, it would not oppose the general
adoption of such terms of compromise as Japan may be disposed to offer
in furtherance of a uniform policy of intercourse with Western nations.

During the past year the increasing good will between our own Government
and that of Mexico has been variously manifested. The treaty of
commercial reciprocity concluded January 20, 1883, has been ratified and
awaits the necessary tariff legislation of Congress to become effective.
This legislation will, I doubt not, be among the first measures to claim
your attention.

A full treaty of commerce, navigation, and consular rights is much to be
desired, and such a treaty I have reason to believe that the Mexican
Government stands ready to conclude.

Some embarrassment has been occasioned by the failure of Congress at its
last session to provide means for the due execution of the treaty of
July 29, 1882, for the resurvey of the Mexican boundary and the
relocation of boundary monuments.

With the Republic of Nicaragua a treaty has been concluded which
authorizes the construction by the United States of a canal, railway,
and telegraph line across the Nicaraguan territory.

By the terms of this treaty 60 miles of the river San Juan, as well as
Lake Nicaragua, an inland sea 40 miles in width, are to constitute a
part of the projected enterprise.

This leaves for actual canal construction 17 miles on the Pacific side
and 36 miles on the Atlantic. To the United States, whose rich territory
on the Pacific is for the ordinary purposes of commerce practically cut
off from communication by water with the Atlantic ports, the political
and commercial advantages of such a project can scarcely be
overestimated.

It is believed that when the treaty is laid before you the justice and
liberality of its provisions will command universal approval at home and
abroad.

The death of our representative at Russia while at his post at St.
Petersburg afforded to the Imperial Government a renewed opportunity to
testify its sympathy in a manner befitting the intimate friendliness
which has ever marked the intercourse of the two countries.

The course of this Government in raising its representation at Bangkok
to the diplomatic rank has evoked from Siam evidences of warm friendship
and augurs well for our enlarged intercourse. The Siamese Government has
presented to the United States a commodious mansion and grounds for the
occupancy of the legation, and I suggest that by joint resolution
Congress attest its appreciation of this generous gift.

This government has more than once been called upon of late to take
action in fulfillment of its international obligations toward Spain.
Agitation in the island of Cuba hostile to the Spanish Crown having been
fomented by persons abusing the sacred rights of hospitality which our
territory affords, the officers of this Government have been instructed
to exercise vigilance to prevent infractions of our neutrality laws at
Key West and at other points near the Cuban coast. I am happy to say
that in the only instance where these precautionary measures were
successfully eluded the offenders, when found in our territory, were
subsequently tried and convicted.

The growing need of close relationship of intercourse and traffic
between the Spanish Antilles and their natural market in the United
States led to the adoption in January last of a commercial agreement
looking to that end. This agreement has since been superseded by a more
carefully framed and comprehensive convention, which I shall submit to
the Senate for approval. It has been the aim of this negotiation to open
such a favored reciprocal exchange of productions carried under the flag
of either country as to make the intercourse between Cuba and Puerto
Rico and ourselves scarcely less intimate than the commercial movement
between our domestic ports, and to insure a removal of the burdens on
shipping in the Spanish Indies, of which in the past our shipowners and
shipmasters have so often had cause to complain.

The negotiation of this convention has for a time postponed the
prosecution of certain claims of our citizens which were declared to be
without the jurisdiction of the late Spanish-American Claims Commission,
and which are therefore remitted to diplomatic channels for adjustment.
The speedy settlement of these claims will now be urged by this
Government.

Negotiations for a treaty of commercial reciprocity with the Dominican
Republic have been successfully concluded, and the result will shortly
be laid before the Senate.

Certain questions between the United States and the Ottoman Empire still
remain unsolved. Complaints on behalf of our citizens are not
satisfactorily adjusted. The Porte has sought to withhold from our
commerce the right of favored treatment to which we are entitled by
existing conventional stipulations, and the revision of the tariffs is
unaccomplished.

The final disposition of pending questions with Venezuela has not as yet
been reached, but I have good reason to expect an early settlement which
will provide the means of reexamining the Caracas awards in conformity
with the expressed desire of Congress, and which will recognize the
justice of certain claims preferred against Venezuela.

The Central and South American Commission appointed by authority of the
act of July 7, 1884, will soon proceed to Mexico. It has been furnished
with instructions which will be laid before you. They contain a
statement of the general policy of the Government for enlarging its
commercial intercourse with American States. The commissioners have been
actively preparing for their responsible task by holding conferences in
the principal cities with merchants and others interested in Central and
South American trade.

The International Meridian Conference lately convened in Washington upon
the invitation of the Government of the United States was composed of
representatives from twenty-five nations. The conference concluded its
labors on the 1st of November, having with substantial unanimity agreed
upon the meridian of Greenwich as the starting point whence longitude is
to be computed through 180 degrees eastward and westward, and upon the
adoption, for all purposes for which it may be found convenient, of a
universal day which shall begin at midnight on the initial meridian and
whose hours shall be counted from zero up to twenty-four.

The formal report of the transactions of this conference will be
hereafter transmitted to the Congress.

This Government is in frequent receipt of invitations from foreign
states to participate in international exhibitions, often of great
interest and importance. Occupying, as we do, an advanced position in
the world's production, and aiming to secure a profitable share for our
industries in the general competitive markets, it is a matter of serious
concern that the want of means for participation in these exhibitions
should so often exclude our producers from advantages enjoyed by those
of other countries. During the past year the attention of Congress was
drawn to the formal invitations in this regard tendered by the
Governments of England, Holland, Belgium, Germany, and Austria. The
Executive has in some instances appointed honorary commissioners. This
is, however, a most unsatisfactory expedient, for without some provision
to meet the necessary working expenses of a commission it can effect
little or nothing in behalf of exhibitors. An International Inventions
Exhibition is to be held in London next May. This will cover a field of
special importance, in which our country holds a foremost rank; but the
Executive is at present powerless to organize a proper representation of
our vast national interests in this direction.

I have in several previous messages referred to this subject. It seems
to me that a statute giving to the Executive general discretionary
authority to accept such invitations and to appoint honorary
commissioners, without salary, and placing at the disposal of the
Secretary of State a small fund for defraying their reasonable expenses,
would be of great public utility.

This Government has received official notice that the revised
international regulations for preventing collisions at sea have been
adopted by all the leading maritime powers except the United States, and
came into force on the 1st of September last. For the due protection of
our shipping interests the provisions of our statutes should at once be
brought into conformity with these regulations.

The question of securing to authors, composers, and artists copyright
privileges in this country in return for reciprocal rights abroad is one
that may justly challenge your attention. It is true that conventions
will be necessary for fully accomplishing this result; but until
Congress shall by statute fix the extent to which foreign holders of
copyright shall be here privileged it has been deemed inadvisable to
negotiate such conventions. For this reason the United States were not
represented at the recent conference at Berne.

I recommend that the scope of the neutrality laws of the United States
be so enlarged as to cover all patent acts of hostility committed in our
territory and aimed against the peace of a friendly nation. Existing
statutes prohibit the fitting out of armed expeditions and restrict the
shipment of explosives, though the enactments in the latter respect were
not framed with regard to international obligations, but simply for the
protection of passenger travel. All these statutes were intended to meet
special emergencies that had already arisen. Other emergencies have
arisen since, and modern ingenuity supplies means for the organization
of hostilities without open resort to armed vessels or to filibustering
parties.

I see no reason why overt preparations in this country for the
commission of criminal acts such as are here under consideration should
not be alike punishable whether such acts are intended to be committed
in our own country or in a foreign country with which we are at peace.

The prompt and thorough treatment of this question is one which
intimately concerns the national honor.

Our existing naturalization laws also need revision. Those sections
relating to persons residing within the limits of the United States in
1795 and 1798 have now only a historical interest. Section 2172,
recognizing the citizenship of the children of naturalized parents, is
ambiguous in its terms and partly obsolete. There are special provisions
of law favoring the naturalization of those who serve in the Army or in
merchant vessels, while no similar privileges are granted those who
serve in the Navy or the Marine Corps.

"An uniform rule of naturalization" such as the Constitution
contemplates should, among other things, clearly define the status of
persons born within the United States subject to a foreign power
(section 1992) and of minor children of fathers who have declared their
intention to become citizens but have failed to perfect their
naturalization. It might be wise to provide for a central bureau of
registry, wherein should be filed authenticated transcripts of every
record of naturalization in the several Federal and State courts, and to
make provision also for the vacation or cancellation of such record in
cases where fraud had been practiced upon the court by the applicant
himself or where he had renounced or forfeited his acquired citizenship.
A just and uniform law in this respect would strengthen the hands of the
Government in protecting its citizens abroad and would pave the way for
the conclusion of treaties of naturalization with foreign countries.

The legislation of the last session effected in the diplomatic and
consular service certain changes and reductions which have been
productive of embarrassment. The population and commercial activity of
our country are steadily on the increase, and are giving rise to new,
varying, and often delicate relationships with other countries. Our
foreign establishment now embraces nearly double the area of operations
that it occupied twenty years ago. The confinement of such a service
within the limits of expenditure then established is not, it seems to
me, in accordance with true economy. A community of 60,000,000 people
should be adequately represented in its intercourse with foreign
nations.

A project for the reorganization of the consular service and for
recasting the scheme of extraterritorial jurisdiction is now before you.
If the limits of a short session will not allow of its full
consideration, I trust that you will not fail to make suitable provision
for the present needs of the service.

It has been customary to define in the appropriation acts the rank of
each diplomatic office to which a salary is attached. I suggest that
this course be abandoned and that it be left to the President, with the
advice and consent of the Senate, to fix from time to time the
diplomatic grade of the representatives of this Government abroad as may
seem advisable, provision being definitely made, however, as now, for
the amount of salary attached to the respective stations.

The condition of our finances and the operations of the various branches
of the public service which are connected with the Treasury Department
are very fully discussed in the report of the Secretary.

It appears that the ordinary revenues for the fiscal year ended June 30,
1884, were:

From customs - $195,067,489.76

From internal revenue - 121,586,072.51

From all other sources - 31,866,307.65

Total ordinary revenues - 348,519,869.92

The public expenditures during the same period were:

For civil expenses - $22,312,907.71

For foreign intercourse - 1,260,766.37

For Indians - 6,475,999.29

For pensions - 55,429,228.06

For the military establishment, including river and harbor improvements
and arsenals - 39,429,603.36

For the naval establishment, including vessels, machinery, and
improvements at navy-yards - 17,292,601.44

For miscellaneous expenditures, including public buildings,
light-houses, and collecting the revenue - 43,939,710.00

For expenditures on account of the District of Columbia - 3,407,049.62

For interest on the public debt - 54,578,378.48

For the sinking fund - 46,790,229.50

Total ordinary expenditures - 290,926,473.83

Leaving a surplus of - 57,603,396.09

As compared with the preceding fiscal year, there was a net decrease of
over $21,000,000 in the amount of expenditures. The aggregate receipts
were less than those of the year previous by about $54,000,000. The
falling off in revenue from customs made up nearly $20,000,000 of this
deficiency, and about $23,000,000 of the remainder was due to the
diminished receipts from internal taxation.

The Secretary estimates the total receipts for the fiscal year which
will end June 30, 1885, at $330,000,000 and the total expenditures at
$290,620,201.16, in which sum are included the interest on the debt and
the amount payable to the sinking fund. This would leave a surplus for
the entire year of about $39,000,000.

The value of exports from the United States to foreign countries during
the year ending June 30, 1884, was as follows:

Domestic merchandise - $724,964,852

Foreign merchandise - 15,548,757

Total merchandise - 740,513,609

Specie - 67,133,383

Total exports of merchandise and specie - 807,646,992

The cotton and cotton manufactures included in this statement were
valued at $208,900,415; the breadstuffs at $162,544,715; the provisions
at $114,416,547, and the mineral oils at $47,103,248.

During the same period the imports were as follows:

Merchandise - $667,697,693

Gold and silver - 37,426,262

Total - 705,123,955

More than 63 per cent of the entire value of imported merchandise
consisted of the following articles:

Sugar and molasses - $103,884,274

Wool and woolen manufactures - 53,842,292

Silk and its manufactures - 49,949,128

Coffee - 49,686,705

Iron and steel and manufactures thereof - 41,464,599

Chemicals - 38,464,965

Flax, hemp, jute, and like substances, and manufactures thereof -
33,463,398

Cotton and manufactures of cotton - 30,454,476

Hides and skins other than fur skins - 22,350,906

I concur with the Secretary of the Treasury in recommending the
immediate suspension of the coinage of silver dollars and of the
issuance of silver certificates. This is a matter to which in former
communications I have more than once invoked the attention of the
National Legislature.

It appears that annually for the past six years there have been coined,
in Compliance with the requirements of the act of February 28, 1878,
more than 27,000,000 silver dollars.

The number now outstanding is reported by the Secretary to be nearly
185,000,000, whereof but little more than 40,000,000, or less than 22
per cent, are in actual circulation. The mere existence of this fact
seems to me to furnish of itself a cogent argument for the repeal of the
statute which has made such fact possible.

But there are other and graver considerations that tend in the same
direction.

The Secretary avows his conviction that unless this coinage and the
issuance of silver certificates be suspended silver is likely at no
distant day to become our sole metallic standard. The commercial
disturbance and the impairment of national credit that would be thus
occasioned can scarcely be overestimated.

I hope that the Secretary's suggestions respecting the withdrawal from
circulation of the $1 and $2 notes will receive your approval. It is
likely that a considerable portion of the silver now encumbering the
vaults of the Treasury might thus find its way into the currency.

While trade dollars have ceased, for the present at least, to be an
element of active disturbance in our currency system, some provision
should be made for their surrender to the Government. In view of the
circumstances under which they were coined and of the fact that they
have never had a legal-tender quality, there should be offered for them
only a slight advance over their bullion value.

The Secretary in the course of his report considers the propriety of
beautifying the designs of our subsidiary silver coins and of so
increasing their weight that they may bear their due ratio of value to
the standard dollar. His conclusions in this regard are cordially
approved.

In my annual message of 1882 I recommended the abolition of all excise
taxes except those relating to distilled spirits. This recommendation is
now renewed. In case these taxes shall be abolished the revenues that
will still remain to the Government will, in my opinion, not only
suffice to meet its reasonable expenditures, but will afford a surplus
large enough to permit such tariff reduction as may seem to be advisable
when the results of recent revenue laws and commercial treaties shall
have shown in what quarters those reductions can be most judiciously
effected.

One of the gravest of the problems which appeal to the wisdom of
Congress for solution is the ascertainment of the most effective means
for increasing our foreign trade and thus relieving the depression under
which our industries are now languishing. The Secretary of the Treasury
advises that the duty of investigating this subject be intrusted in the
first instance to a competent commission. While fully recognizing the
considerations that may be urged against this course, I am nevertheless
of the opinion that upon the whole no other would be likely to effect
speedier or better results.

That portion of the Secretary's report which concerns the condition of
our shipping interests can not fail to command your attention. He
emphatically recommends that as an incentive to the investment of
American capital in American steamships the Government shall, by liberal
payments for mail transportation or otherwise, lend its active
assistance to individual enterprise, and declares his belief that unless
that course be pursued our foreign carrying trade must remain, as it is
to-day, almost exclusively in the hands of foreigners.

One phase of this subject is now especially prominent in view of the
repeal by the act of June 26, 1884, of all statutory provisions
arbitrarily compelling American vessels to carry the mails to and from
the United States. As it is necessary to make provision to compensate
the owners of such vessels for performing that service after April,
1885, it is hoped that the whole subject will receive early
consideration that will lead to the enactment of such measures for the
revival of our merchant marine as the wisdom of Congress may devise.

The 3 per cent bonds of the Government to the amount of more than
$100,000,000 have since my last annual message been redeemed by the
Treasury. The bonds of that issue still outstanding amount to little
over $200,000,000, about one-fourth of which will be retired through the
operations of the sinking fund during the coming year. As these bonds
still constitute the chief basis for the circulation of the national
banks, the question how to avert the contraction of the currency caused
by their retirement is one of constantly increasing importance.

It seems to be generally conceded that the law governing this matter
exacts from the banks excessive security, and that upon their present
bond deposits a larger circulation than is now allowed may be granted
with safety. I hope that the bill which passed the Senate at the last
session, permitting the issue of notes equal to the face value of the
deposited bonds, will commend itself to the approval of the House of
Representatives.

In the expenses of the War Department the Secretary reports a decrease
of more than $9,000,000. Of this reduction $5,600,000 was effected in
the expenditures for rivers and harbors and $2,700,000 in expenditures
for the Quartermaster's Department.

Outside of that Department the annual expenses of all the Army bureaus
proper (except possibly the Ordnance Bureau) are substantially fixed
charges, which can not be materially diminished without a change in the
numerical strength of the Army. The expenditures in the Quartermaster's
Department can readily be subjected to administrative discretion, and it
is reported by the Secretary of War that as a result of exercising such
discretion in reducing the number of draft and pack animals in the Army
the annual cost of supplying and caring for such animals is now
$1,108,085.90 less than it was in 1881.

The reports of military commanders show that the last year has been
notable for its entire freedom from Indian outbreaks.

In defiance of the President's proclamation of July 1, 1884, certain
intruders sought to make settlements in the Indian Territory. They were
promptly removed by a detachment of troops.

During the past session of Congress a bill to provide a suitable
fire-proof building for the Army Medical Museum and the library of the
Surgeon-General's Office received the approval of the Senate. A similar
bill, reported favorably to the House of Representatives by one of its
committees, is still pending before that body. It is hoped that during
the coming session the measure may become a law, and that thereafter
immediate steps may be taken to secure a place of safe deposit for these
valuable collections, now in a state of insecurity.

The funds with which the works for the improvement of rivers and harbors
were prosecuted during the past year were derived from the
appropriations of the act of August 2, 1882, together with such few
balances as were on hand from previous appropriations. The balance in
the Treasury subject to requisition July 1, 1883, was $10,021,649.55.
The amount appropriated during the fiscal year 1884 was $1,319,634.62
and the amount drawn from the Treasury during the fiscal year was
$8,228,703.54, leaving a balance of $3,112,580.63 in the Treasury
subject to requisition July 1, 1884.

The Secretary of War submits the report of the Chief of Engineers as to
the practicability of protecting our important cities on the seaboard by
fortifications and other defenses able to repel modern methods of
attack. The time has now come when such defenses can be prepared with
confidence that they will not prove abortive, and when the possible
result of delay in making such preparation is seriously considered delay
seems inexcusable. For the most important cities--those whose
destruction or capture would be a national humiliation--adequate
defenses, inclusive of guns, may be made by the gradual expenditure of
$60,000,000--a sum much less than a victorious enemy could levy as a
contribution. An appropriation of about one-tenth of that amount is
asked to begin the work, and I concur with the Secretary of War in
urging that it be granted.

The War Department is proceeding with the conversion of 10-inch
smoothbore guns into 8-inch rifles by lining the former with tubes of
forged steel or of coil wrought iron. Fifty guns will be thus converted
within the year. This, however, does not obviate the necessity of
providing means for the construction of guns of the highest power both
for the purposes of coast defense and for the armament of war vessels.

The report of the Gun Foundry Board, appointed April 2, 1883, in
pursuance of the act of March 3, 1883, was transmitted to Congress in a
special message of February 18, 1884. In my message of March 26, 1884, I
called attention to the recommendation of the board that the Government
should encourage the production at private steel works of the required
material for heavy cannon, and that two Government factories, one for
the Army and one for the Navy, should be established for the fabrication
of guns from such material. No action having been taken, the board was
subsequently reconvened to determine more fully the plans and estimates
necessary for carrying out its recommendation. It has received
information which indicates that there are responsible steel
manufacturers in this country who, although not provided at present with
the necessary plant, are willing to construct the same and to make bids
for contracts with the Government for the supply of the requisite
material for the heaviest guns adapted to modern warfare if a guaranteed
order of sufficient magnitude, accompanied by a positive appropriation
extending over a series of years, shall be made by Congress. All doubts
as to the feasibility of the plan being thus removed, I renew my
recommendation that such action be taken by Congress as will enable the
Government to construct its own ordnance upon its own territory, and so
to provide the armaments demanded by considerations of national safety
and honor.

The report of the Secretary of the Navy exhibits the progress which has
been made on the new steel cruisers authorized by the acts of August 5,
1882, and March 3, 1883. Of the four vessels under contract, one, the
Chicago, of 4,500 tons, is more than half finished; the Atlanta, of
3,000 tons, has been successfully launched, and her machinery is now
fitting; the Boston, also of 3,000 tons, is ready for launching, and the
Dolphin, a dispatch steamer of 1,500 tons, is ready for delivery.

Certain adverse criticisms upon the designs of these cruisers are
discussed by the Secretary, who insists that the correctness of the
conclusions reached by the Advisory Board and by the Department has been
demonstrated by recent developments in shipbuilding abroad.

The machinery of the double-turreted monitors Puritan, Terror, and
Amphitrite, contracted for under the act of March 3, 1883, is in process
of construction. No work has been done during the past year on their
armor for lack of the necessary appropriations. A fourth monitor, the
Monadnock, still remains unfinished at the navy-yard in California. It
is recommended that early steps be taken to complete these vessels and
to provide also an armament for the monitor Miantonomoh.

The recommendations of the Naval Advisory Board, approved by the
Department, comprise the construction of one steel cruiser of 4,500
tons, one cruiser of 3,000 tons, two heavily armed gunboats, one light
cruising gunboat, one dispatch vessel armed with Hotchkiss cannon, one
armored ram, and three torpedo boats. The general designs, all of which
are calculated to meet the existing wants of the service, are now well
advanced, and the construction of the vessels can be undertaken as soon
as you shall grant the necessary authority.

The act of Congress approved August 7, 1882, authorized the removal to
the United States of the bodies of Lieutenant-Commander George W. De
Long and his companions of the Jeannette expedition. This removal has
been successfully accomplished by Lieutenants Harber and Schuetze. The
remains were taken from their grave in the Lena Delta in March, 1883,
and were retained at Yakutsk until the following winter, the season
being too far advanced to admit of their immediate transportation. They
arrived at New York February 20, 1884, where they were received with
suitable honors.

In pursuance of the joint resolution of Congress approved February 13,
1884, a naval expedition was fitted out for the relief of Lieutenant A.
W. Greely, United States Army, and of the party who had been engaged
under his command in scientific observations at Lady Franklin Bay. The
fleet consisted of the steam sealer Thetis, purchased in England; the
Bear, purchased at St. Johns, Newfoundland, and the Alert, which was
generously provided by the British Government. Preparations for the
expedition were promptly made by the Secretary of the Navy, with the
active cooperation of the Secretary of War. Commander George W. Coffin
was placed in command of the Alert and Lieutenant William H. Emory in
command of the Bear. The Thetis was intrusted to Commander Winfield S.
Schley, to whom also was assigned the superintendence of the entire
expedition.

Immediately upon its arrival at Upernavik the fleet began the dangerous
navigation of Melville Bay, and in spite of every obstacle reached
Littleton Island on June 22, a fortnight earlier than any vessel had
before attained that point. On the same day it crossed over to Cape
Sabine, where Lieutenant Greely and the other survivors of his party
were discovered. After taking on board the living and the bodies of the
dead, the relief ships sailed for St. Johns, where they arrived on July
17. They were appropriately received at Portsmouth, N. H., on August 1
and at New York on August 8. One of the bodies was landed at the former
place. The others were put on shore at Governors Island, and, with the
exception of one, which was interred in the national cemetery, were
forwarded thence to the destinations indicated by friends. The
organization and conduct of this relief expedition reflects great credit
upon all who contributed to its success.

In this the last of the stated messages that I shall have the honor to
transmit to the Congress of the United States I can not too strongly
urge upon its attention the duty of restoring our Navy as rapidly as
possible to the high state of efficiency which formerly characterized
it. As the long peace that has lulled us into a sense of fancied
security may at any time be disturbed, it is plain that the policy of
strengthening this arm of the service is dictated by considerations of
wise economy, of just regard for our future tranquillity, and of true
appreciation of the dignity and honor of the Republic.

The report of the Postmaster-General acquaints you with the present
condition and needs of the postal service.

It discloses the gratifying fact that the loss of revenue from the
reduction in the rate of letter postage recommended in my message of
December 4, 1882, and effected by the act of March 3, 1883, has been
much less than was generally anticipated. My recommendation of this
reduction was based upon the belief that the actual falling off in
receipts from letter postages for the year immediately succeeding the
change of rate would be $3,000,000. It has proved to be only $2,275,000.

This is a trustworthy indication that the revenue will soon be restored
to its former volume by the natural increase of sealed correspondence.

I confidently repeat, therefore, the recommendation of my last annual
message that the single-rate postage upon drop letters be reduced to 1
cent wherever the payment of 2 cents is now required by law. The double
rate is only exacted at offices where the carrier system is in
operation, and it appears that at those offices the increase in the tax
upon local letters defrays the cost not only of its own collection and
delivery, but of the collection and delivery of all other mail matter.
This is an inequality that ought no longer to exist.

I approve the recommendation of the Postmaster-General that the unit of
weight in the rating of first-class matter should be 1 ounce instead of
one-half ounce, as it now is. In view of the statistics furnished by the
Department, it may well be doubted whether the change would result in
any loss of revenue. That it would greatly promote the convenience of
the public is beyond dispute.

The free-delivery system has been lately applied to five cities, and the
total number of offices in which it is now in operation is 159.
Experience shows that its adoption, under proper conditions, is equally
an accommodation to the public and an advantage to the postal service.
It is more than self-sustaining, and for the reasons urged by the
Postmaster-General may properly be extended.

In the opinion of that officer it is important to provide means whereby
exceptional dispatch in dealing with letters in free-delivery offices
may be secured by payment of extraordinary postage. This scheme might be
made effective by employment of a special stamp whose cost should be
commensurate with the expense of the extra service.

In some of the large cities private express companies have undertaken to
outstrip the Government mail carriers by affording for the prompt
transmission of letters better facilities than have hitherto been at the
command of the Post-Office.

It has always been the policy of the Government to discourage such
enterprises, and in no better mode can that policy be maintained than in
supplying the public with the most efficient mail service that, with due
regard to its own best interests, can be furnished for its
accommodation.

The Attorney-General renews the recommendation contained in his report
of last year touching the fees of witnesses and jurors.

He favors radical changes in the fee bill, the adoption of a system by
which attorneys and marshals of the United States shall be compensated
solely by salaries, and the erection by the Government of a penitentiary
for the confinement of offenders against its laws.

Of the varied governmental concerns in charge of the Interior Department
the report of its Secretary presents an interesting summary. Among the
topics deserving particular attention I refer you to his observations
respecting our Indian affairs, the preemption and timber-culture acts,
the failure of railroad companies to take title to lands granted by the
Government, and the operations of the Pension Office, the Patent Office,
the Census Bureau, and the Bureau of Education.

Allusion has been made already to the circumstance that, both as between
the different Indian tribes and as between the Indians and the whites,
the past year has been one of unbroken peace.

In this circumstance the President is glad to find justification for the
policy of the Government in its dealing with the Indian question and
confirmation of the views which were fully expressed in his first
communication to the Forty-seventh Congress.

The Secretary urges anew the enactment of a statute for the punishment
of crimes committed on the Indian reservations, and recommends the
passage of the bill now pending in the House of Representatives for the
purchase of a tract of 18,000 square miles from the Sioux Reservation.
Both these measures are worthy of approval.

I concur with him also in advising the repeal of the preemption law, the
enactment of statutes resolving the present legal complications touching
lapsed grants to railroad companies, and the funding of the debt of the
several Pacific railroads under such guaranty as shall effectually
secure its ultimate payment.

The report of the Utah Commission will be read with interest.

It discloses the results of recent legislation looking to the prevention
and punishment of polygamy in that Territory. I still believe that if
that abominable practice can be suppressed by law it can only be by the
most radical legislation consistent with the restraints of the
Constitution.

I again recommend, therefore, that Congress assume absolute political
control of the Territory of Utah and provide for the appointment of
commissioners with such governmental powers as in its judgment may
justly and wisely be put into their hands.

In the course of this communication reference has more than once been
made to the policy of this Government as regards the extension of our
foreign trade. It seems proper to declare the general principles that
should, in my opinion, underlie our national efforts in this direction.

The main conditions of the problem may be thus stated:

We are a people apt in mechanical pursuits and fertile in invention. We
cover a vast extent of territory rich in agricultural products and in
nearly all the raw materials necessary for successful manufacture. We
have a system of productive establishments more than sufficient to
supply our own demands. The wages of labor are nowhere else so great.
The scale of living of our artisan classes is such as tends to secure
their personal comfort and the development of those higher moral and
intellectual qualities that go to the making of good citizens. Our
system of tax and tariff legislation is yielding a revenue which is in
excess of the present needs of the Government.

These are the elements from which it is sought to devise a scheme by
which, without unfavorably changing the condition of the workingman, our
merchant marine shall be raised from its enfeebled condition and new
markets provided for the sale beyond our borders of the manifold fruits
of our industrial enterprises.

The problem is complex and can be solved by no single measure of
innovation or reform.

The countries of the American continent and the adjacent islands are for
the United States the natural marts of supply and demand. It is from
them that we should obtain what we do not produce or do not produce in
sufficiency, and it is to them that the surplus productions of our
fields, our mills, and our workshops should flow, under conditions that
will equalize or favor them in comparison with foreign competition.

Four paths of policy seem to point to this end:

First. A series of reciprocal commercial treaties with the countries of
America which shall foster between us and them an unhampered movement of
trade. The conditions of these treaties should be the free admission of
such merchandise as this country does not produce, in return for the
admission free or under a favored scheme of duties of our own products,
the benefits of such exchange to apply only to goods carried under the
flag of the parties to the contract; the removal on both sides from the
vessels so privileged of all tonnage dues and national imposts, so that
those vessels may ply unhindered between our ports and those of the
other contracting parties, though without infringing on the reserved
home coasting trade; the removal or reduction of burdens on the exported
products of those countries coming within the benefits of the treaties,
and the avoidance of the technical restrictions and penalties by which
our intercourse with those countries is at present hampered.

Secondly. The establishment of the consular service of the United States
on a salaried footing, thus permitting the relinquishment of consular
fees not only as respects vessels under the national flag, but also as
respects vessels of the treaty nations carrying goods entitled to the
benefits of the treaties.

Thirdly. The enactment of measures to favor the construction and
maintenance of a steam carrying marine under the flag of the United
States.

Fourthly. The establishment of an uniform currency basis for the
countries of America, so that the coined products of our mines may
circulate on equal terms throughout the whole system of commonwealths.
This would require a monetary union of America, whereby the output of
the bullion-producing countries and the circulation of those which yield
neither gold nor silver could be adjusted in conformity with the
population, wealth, and commercial needs of each. As many of the
countries furnish no bullion to the common stock, the surplus production
of our mines and mints might thus be utilized and a step taken toward
the general remonetization of silver.

To the accomplishment of these ends, so far as they can be attained by
separate treaties, the negotiations already concluded and now in
progress have been directed; and the favor which this enlarged policy
has thus far received warrants the belief that its operations will ere
long embrace all, or nearly all, the countries of this hemisphere.

It is by no means desirable, however, that the policy under
consideration should be applied to these countries alone. The healthful
enlargement of our trade with Europe, Asia, and Africa should be sought
by reducing tariff burdens on such of their wares as neither we nor the
other American States are fitted to produce, and thus enabling ourselves
to obtain in return a better market for our supplies of food, of raw
materials, and of the manufactures in which we excel.

It seems to me that many of the embarrassing elements in the great
national conflict between protection and free trade may thus be turned
to good account; that the revenue may be reduced so as no longer to
overtax the people; that protective duties may be retained without
becoming burdensome; that our shipping interests may be judiciously
encouraged, the currency fixed on firm bases, and, above all, such an
unity of interests established among the States of the American system
as will be of great and ever-increasing advantage to them all.

All treaties in the line of this policy which have been negotiated or
are in process of negotiation contain a provision deemed to be requisite
under the clause of the Constitution limiting to the House of
Representatives the authority to originate bills for raising revenue.

On the 29th of February last I transmitted to the Congress the first
annual report of the Civil Service Commission, together with
communications from the heads of the several Executive Departments of
the Government respecting the practical workings of the law under which
the Commission had been acting. The good results therein foreshadowed
have been more than realized.

The system has fully answered the expectations of its friends in
securing competent and faithful public servants and in protecting the
appointing officers of the Government from the pressure of personal
importunity and from the labor of examining the claims and pretensions
of rival candidates for public employment.

The law has had the unqualified support of the President and of the
heads of the several Departments, and the members of the Commission have
performed their duties with zeal and fidelity. Their report will shortly
be submitted, and will be accompanied by such recommendations for
enlarging the scope of the existing statute as shall commend themselves
to the Executive and the Commissioners charged with its administration.

In view of the general and persistent demand throughout the commercial
community for a national bankrupt law, I hope that the differences of
sentiment which have hitherto prevented its enactment may not outlast
the present session.

The pestilence which for the past two years has been raging in the
countries of the East recently made its appearance in European ports
with which we are in constant communication.

The then Secretary of the Treasury, in pursuance of a proclamation of
the President, issued certain regulations restricting and for a time
prohibiting the importation of rags and the admission of baggage of
immigrants and of travelers arriving from infected quarters. Lest this
course may have been without strict warrant of law, I approve the
recommendation of the present Secretary that the Congress take action in
the premises, and I also recommend the immediate adoption of such
measures as will be likely to ward off the dreaded epidemic and to
mitigate its severity in case it shall unhappily extend to our shores.

The annual report of the Commissioners of the District of Columbia
reviews the operations of the several departments of its municipal
government. I ask your careful consideration of its suggestions in
respect to legislation, especially commending such as relate to a
revision of the civil and criminal code, the performance of labor by
persons sentenced to imprisonment in the jail, the construction and
occupation of wharves along the river front, and the erection of a
suitable building for District offices.

I recommend that in recognition of the eminent services of Ulysses S.
Grant, late General of the armies of the United States and twice
President of this nation, the Congress confer upon him a suitable
pension.

Certain of the measures that seem to me necessary and expedient I have
now, in obedience to the Constitution, recommended for your adoption.

As respects others of no less importance I shall content myself with
renewing the recommendations already made to the Congress, without
restating the grounds upon which such recommendations were based.

The preservation of forests on the public domain, the granting of
Government aid for popular education, the amendment of the Federal
Constitution so as to make effective the disapproval by the President of
particular items in appropriation bills, the enactment of statutes in
regard to the filling of vacancies in the Presidential office, and the
determining of vexed questions respecting Presidential inability are
measures which may justly receive your serious consideration.

As the time draws nigh when I am to retire from the public service, I
can not refrain from expressing to the members of the National
Legislature with whom I have been brought into personal and official
intercourse my sincere appreciation of their unfailing courtesy and of
their harmonious cooperation with the Executive in so many measures
calculated to promote the best interests of the nation.

And to my fellow-citizens generally I acknowledge a deep sense of
obligation for the support which they have accorded me in my
administration of the executive department of this Government.

***

State of the Union Address
Grover Cleveland
December 8, 1885

To the Congress of the United States:

Your assembling is clouded by a sense of public bereavement, caused by
the recent and sudden death of Thomas A. Hendricks, Vice-President of
the United States. His distinguished public services, his complete
integrity and devotion to every duty, and his personal virtues will find
honorable record in his country's history.

Ample and repeated proofs of the esteem and confidence in which he was
held by his fellow-countrymen were manifested by his election to offices
of the most important trust and highest dignity; and at length, full of
years and honors, he has been laid at rest amid universal sorrow and
benediction.

The Constitution, which requires those chosen to legislate for the
people to annually meet in the discharge of their solemn trust, also
requires the President to give to Congress information of the state of
the Union and recommend to their consideration such measures as he shall
deem necessary and expedient. At the threshold of a compliance with
these constitutional directions it is well for us to bear in mind that
our usefulness to the people's interests will be promoted by a constant
appreciation of the scope and character of our respective duties as they
relate to Federal legislation. While the Executive may recommend such
measures as he shall deem expedient, the responsibility for legislative
action must and should rest upon those selected by the people to make
their laws.

Contemplation of the grave and responsible functions assigned to the
respective branches of the Government under the Constitution will
disclose the partitions of power between our respective departments and
their necessary independence, and also the need for the exercise of all
the power intrusted to each in that spirit of comity and cooperation
which is essential to the proper fulfillment of the patriotic
obligations which rest upon us as faithful servants of the people.

The jealous watchfulness of our constituencies, great and small,
supplements their suffrages, and before the tribunal they establish
every public servant should be judged.

It is gratifying to announce that the relations of the United States
with all foreign powers continue to be friendly. Our position after
nearly a century of successful constitutional government, maintenance of
good faith in all our engagements, the avoidance of complications with
other nations, and our consistent and amicable attitude toward the
strong and weak alike furnish proof of a political disposition which
renders professions of good will unnecessary. There are no questions of
difficulty pending with any foreign government.

The Argentine Government has revived the long dormant question of the
Falkland Islands by claiming from the United States indemnity for their
loss, attributed to the action of the commander of the sloop of war
Lexington in breaking up a piratical colony on those islands in 1831,
and their subsequent occupation by Great Britain. In view of the ample
justification for the act of the Lexington and the derelict condition of
the islands before and after their alleged occupation by Argentine
colonists, this Government considers the claim as wholly groundless.

Question has arisen with the Government of Austria-Hungary touching the
representation of the United States at Vienna. Having under my
constitutional prerogative appointed an estimable citizen of unimpeached
probity and competence as minister at that court, the Government of
Austria-Hungary invited this Government to take cognizance of certain
exceptions, based upon allegations against the personal acceptability of
Mr. Keiley, the appointed envoy, asking that in view thereof the
appointment should be withdrawn. The reasons advanced were such as could
not be acquiesced in without violation of my oath of office and the
precepts of the Constitution, since they necessarily involved a
limitation in favor of a foreign government upon the right of selection
by the Executive and required such an application of a religious test as
a qualification for office under the United States as would have
resulted in the practical disfranchisement of a large class of our
citizens and the abandonment of a vital principle in our Government. The
Austro-Hungarian Government finally decided not to receive Mr. Keiley as
the envoy of the United States, and that gentleman has since resigned
his commission, leaving the post vacant. I have made no new nomination,
and the interests of this Government at Vienna are now in the care of
the secretary of legation, acting as charge d'affaires ad interim.

Early in March last war broke out in Central America, caused by the
attempt of Guatemala to consolidate the several States into a single
government. In these contests between our neighboring States the United
States forebore to interfere actively, but lent the aid of their
friendly offices in deprecation of war and to promote peace and concord
among the belligerents, and by such counsel contributed importantly to
the restoration of tranquillity in that locality.

Emergencies growing out of civil war in the United States of Colombia
demanded of the Government at the beginning of this Administration the
employment of armed forces to fulfill its guaranties under the
thirty-fifth article of the treaty of 1846, in order to keep the transit
open across the Isthmus of Panama. Desirous of exercising only the
powers expressly reserved to us by the treaty, and mindful of the rights
of Colombia, the forces sent to the Isthmus were instructed to confine
their action to "positively and efficaciously" preventing the transit
and its accessories from being "interrupted or embarrassed."

The execution of this delicate and responsible task necessarily involved
police control where the local authority was temporarily powerless, but
always in aid of the sovereignty of Colombia.

The prompt and successful fulfillment of its duty by this Government was
highly appreciated by the Government of Colombia, and has been followed
by expressions of its satisfaction.

High praise is due to the officers and men engaged in this service. The
restoration of peace on the Isthmus by the reestablishment of the
constituted Government there being thus accomplished, the forces of the
United States were withdrawn.

Pending these occurrences a question of much importance was presented by
decrees of the Colombian Government proclaiming the closure of certain
ports then in the hands of insurgents and declaring vessels held by the
revolutionists to be piratical and liable to capture by any power. To
neither of these propositions could the United States assent. An
effective closure of ports not in the possession of the Government, but
held by hostile partisans, could not be recognized; neither could the
vessels of insurgents against the legitimate sovereignty be deemed
hostes humani generis within the precepts of international law, whatever
might be the definition and penalty of their acts under the municipal
law of the State against whose authority they were in revolt. The denial
by this Government of the Colombian propositions did not, however, imply
the admission of a belligerent status on the part of the insurgents.

The Colombian Government has expressed its willingness to negotiate
conventions for the adjustment by arbitration of claims by foreign
citizens arising out of the destruction of the city of Aspinwall by the
insurrectionary forces.

The interest of the United States in a practicable transit for ships
across the strip of land separating the Atlantic from the Pacific has
been repeatedly manifested during the last half century.

My immediate predecessor caused to be negotiated with Nicaragua a treaty
for the construction, by and at the sole cost of the United States, of a
canal through Nicaraguan territory, and laid it before the Senate.
Pending the action of that body thereon, I withdrew the treaty for
reexamination. Attentive consideration of its provisions leads me to
withhold it from resubmission to the Senate.

Maintaining, as I do, the tenets of a line of precedents from
Washington's day, which proscribe entangling alliances with foreign
states, I do not favor a policy of acquisition of new and distant
territory or the incorporation of remote interests with our own.

The laws of progress are vital and organic, and we must be conscious of
that irresistible tide of commercial expansion which, as the concomitant
of our active civilization, day by day is being urged onward by those
increasing facilities of production, transportation, and communication
to which steam and electricity have given birth; but our duty in the
present instructs us to address ourselves mainly to the development of
the vast resources of the great area committed to our charge and to the
cultivation of the arts of peace within our own borders, though
jealously alert in preventing the American hemisphere from being
involved in the political problems and complications of distant
governments. Therefore I am unable to recommend propositions involving
paramount privileges of ownership or right outside of our own territory,
when coupled with absolute and unlimited engagements to defend the
territorial integrity of the state where such interests lie. While the
general project of connecting the two oceans by means of a canal is to
be encouraged, I am of opinion that any scheme to that end to be
considered with favor should be free from the features alluded to.

The Tehuantepec route is declared by engineers of the highest repute and
by competent scientists to afford an entirely practicable transit for
vessels and cargoes, by means of a ship railway, from the Atlantic to
the Pacific. The obvious advantages of such a route, if feasible, over
others more remote from the axial lines of traffic between Europe and
the pacific, and particularly between the Valley of the Mississippi and
the western coast of North and South America, are deserving of
consideration.

Whatever highway may be constructed across the barrier dividing the two
greatest maritime areas of the world must be for the world's benefit--a
trust for mankind, to be removed from the chance of domination by any
single power, nor become a point of invitation for hostilities or a
prize for warlike ambition. An engagement combining the construction,
ownership, and operation of such a work by this Government, with an
offensive and defensive alliance for its protection, with the foreign
state whose responsibilities and rights we would share is, in my
judgment, inconsistent with such dedication to universal and neutral
use, and would, moreover, entail measures for its realization beyond the
scope of our national polity or present means.

The lapse of years has abundantly confirmed the wisdom and foresight of
those earlier Administrations which, long before the conditions of
maritime intercourse were changed and enlarged by the progress of the
age, proclaimed the vital need of interoceanic transit across the
American Isthmus and consecrated it in advance to the common use of
mankind by their positive declarations and through the formal obligation
of treaties. Toward such realization the efforts of my Administration
will be applied, ever bearing in mind the principles on which it must
rest, and which were declared in no uncertain tones by Mr. Cass, who,
while Secretary of State, in 1858, announced that "what the United
States want in Central America, next to the happiness of its people, is
the security and neutrality of the interoceanic routes which lead
through it."

The construction of three transcontinental lines of railway, all in
successful operation, wholly within our territory, and uniting the
Atlantic and the Pacific oceans, has been accompanied by results of a
most interesting and impressive nature, and has created new conditions,
not in the routes of commerce only, but in political geography, which
powerfully affect our relations toward and necessarily increase our
interests in any transisthmian route which may be opened and employed
for the ends of peace and traffic, or, in other contingencies, for uses
inimical to both.

Transportation is a factor in the cost of commodities scarcely second to
that of their production, and weighs as heavily upon the consumer.

Our experience already has proven the great importance of having the
competition between land carriage and water carriage fully developed,
each acting as a protection to the public against the tendencies to
monopoly which are inherent in the consolidation of wealth and power in
the hands of vast corporations.

These suggestions may serve to emphasize what I have already said on the
score of the necessity of a neutralization of any interoceanic transit;
and this can only be accomplished by making the uses of the route open
to all nations and subject to the ambitions and warlike necessities of
none.

The drawings and report of a recent survey of the Nicaragua Canal route,
made by Chief Engineer Menocal, will be communicated for your
information.

The claims of citizens of the United States for losses by reason of the
late military operations of Chile in Peru and Bolivia are the subject of
negotiation for a claims convention with Chile, providing for their
submission to arbitration.

The harmony of our relations with China is fully sustained.

In the application of the acts lately passed to execute the treaty of
1880, restrictive of the immigration of Chinese laborers into the United
States, individual cases of hardship have occurred beyond the power of
the Executive to remedy, and calling for judicial determination.

The condition of the Chinese question in the Western States and
Territories is, despite this restrictive legislation, far from being
satisfactory. The recent outbreak in Wyoming Territory, where numbers of
unoffending Chinamen, indisputably within the protection of the treaties
and the law, were murdered by a mob, and the still more recent
threatened outbreak of the same character in Washington Territory, are
fresh in the minds of all, and there is apprehension lest the bitterness
of feeling against the Mongolian race on the Pacific Slope may find vent
in similar lawless demonstrations. All the power of this Government
should be exerted to maintain the amplest good faith toward China in the
treatment of these men, and the inflexible sternness of the law in
bringing the wrongdoers to justice should be insisted upon.

Every effort has been made by this Government to prevent these violent
outbreaks and to aid the representatives of China in their investigation
of these outrages; and it is but just to say that they are traceable to
the lawlessness of men not citizens of the United States engaged in
competition with Chinese laborers.

Race prejudice is the chief factor in originating these disturbances,
and it exists in a large part of our domain, jeopardizing our domestic
peace and the good relationship we strive to maintain with China.

The admitted right of a government to prevent the influx of elements
hostile to its internal peace and security may not be questioned, even
where there is no treaty stipulation on the subject. That the exclusion
of Chinese labor is demanded in other countries where like conditions
prevail is strongly evidenced in the Dominion of Canada, where Chinese
immigration is now regulated by laws more exclusive than our own. If
existing laws are inadequate to compass the end in view, I shall be
prepared to give earnest consideration to any further remedial measures,
within the treaty limits, which the wisdom of Congress may devise.

The independent State of the Kongo has been organized as a government
under the sovereignty of His Majesty the King of the Belgians, who
assumes its chief magistracy in his personal character only, without
making the new State a dependency of Belgium. It is fortunate that a
benighted region, owing all it has of quickening civilization to the
beneficence and philanthropic spirit of this monarch, should have the
advantage and security of his benevolent supervision.

The action taken by this Government last year in being the first to
recognize the flag of the International Association of the Kongo has
been followed by formal recognition of the new nationality which
succeeds to its sovereign powers.

A conference of delegates of the principal commercial nations was held
at Berlin last winter to discuss methods whereby the Kongo basin might
be kept open to the world's trade. Delegates attended on behalf of the
United States on the understanding that their part should be merely
deliberative, without imparting to the results any binding character so
far as the United States were concerned. This reserve was due to the
indisposition of this Government to share in any disposal by an
international congress of jurisdictional questions in remote foreign
territories. The results of the conference were embodied in a formal act
of the nature of an international convention, which laid down certain
obligations purporting to be binding on the signatories, subject to
ratification within one year. Notwithstanding the reservation under
which the delegates of the United States attended, their signatures were
attached to the general act in the same manner as those of the
plenipotentiaries of other governments, thus making the United States
appear, without reserve or qualification, as signatories to a joint
international engagement imposing on the signers the conservation of the
territorial integrity of distant regions where we have no established
interests or control.

This Government does not, however, regard its reservation of liberty of
action in the premises as at all impaired; and holding that an
engagement to share in the obligation of enforcing neutrality in the
remote valley of the Kongo would be an alliance whose responsibilities
we are not in a position to assume, I abstain from asking the sanction
of the Senate to that general act.

The correspondence will be laid before you, and the instructive and
interesting report of the agent sent by this Government to the Kongo
country and his recommendations for the establishment of commercial
agencies on the African coast are also submitted for your consideration.

The commission appointed by my predecessor last winter to visit the
Central and South American countries and report on the methods of
enlarging the commercial relations of the United States therewith has
submitted reports, which will be laid before you.

No opportunity has been omitted to testify the friendliness of this
Government toward Korea, whose entrance into the family of treaty powers
the United States were the first to recognize. I regard with favor the
application made by the Korean Government to be allowed to employ
American officers as military instructors, to which the assent of
Congress becomes necessary, and I am happy to say this request has the
concurrent sanction of China and Japan.

The arrest and imprisonment of Julio R. Santos, a citizen of the United
States, by the authorities of Ecuador gave rise to a contention with
that Government, in which his right to be released or to have a speedy
and impartial trial on announced charges and with all guaranties of
defense stipulated by treaty was insisted upon by us. After an elaborate
correspondence and repeated and earnest representations on our part Mr.
Santos was, after an alleged trial and conviction, eventually included
in a general decree of amnesty and pardoned by the Ecuadorian Executive
and released, leaving the question of his American citizenship denied by
the Ecuadorian Government, but insisted upon by our own.

The amount adjudged by the late French and American Claims Commission to
be due from the United States to French claimants on account of injuries
suffered by them during the War of Secession, having been appropriated
by the last Congress, has been duly paid to the French Government.

The act of February 25, 1885, provided for a preliminary search of the
records of French prize courts for evidence bearing on the claims of
American citizens against France for spoliations committed prior to
1801. The duty has been performed, and the report of the agent will be
laid before you.

I regret to say that the restrictions upon the importation of our pork
into France continue, notwithstanding the abundant demonstration of the
absence of sanitary danger in its use; but I entertain strong hopes that
with a better understanding of the matter this vexatious prohibition
will be removed. It would be pleasing to be able to say as much with
respect to Germany, Austria, and other countries, where such food
products are absolutely excluded, without present prospect of reasonable
change.

The interpretation of our existing treaties of naturalization by Germany
during the past year has attracted attention by reason of an apparent
tendency on the part of the Imperial Government to extend the scope of
the residential restrictions to which returning naturalized citizens of
German origin are asserted to be liable under the laws of the Empire.
The temperate and just attitude taken by this Government with regard to
this class of questions will doubtless lead to a satisfactory
understanding.

The dispute of Germany and Spain relative to the domination of the
Caroline Islands has attracted the attention of this Government by
reason of extensive interests of American citizens having grown up in
those parts during the past thirty years, and because the question of
ownership involves jurisdiction of matters affecting the status of our
citizens under civil and criminal law. While standing wholly aloof from
the proprietary issues raised between powers to both of which the United
States are friendly, this Government expects that nothing in the present
contention shall unfavorably affect our citizens carrying on a peaceful
commerce or there domiciled, and has so informed the Governments of
Spain and Germany.

The marked good will between the United States and Great Britain has
been maintained during the past year.

The termination of the fishing clauses of the treaty of Washington, in
pursuance of the joint resolution of March 3, 1883, must have resulted
in the abrupt cessation on the 1st of July of this year, in the midst of
their ventures, of the operations of citizens of the United States
engaged in fishing in British American waters but for a diplomatic
understanding reached with Her Majesty's Government in June last,
whereby assurance was obtained that no interruption of those operations
should take place during the current fishing season.

In the interest of good neighborhood and of the commercial intercourse
of adjacent communities, the question of the North American fisheries is
one of much importance. Following out the intimation given by me when
the extensory arrangement above described was negotiated, I recommend
that the Congress provide for the appointment of a commission in which
the Governments of the United States and Great Britain shall be
respectively represented, charged with the consideration and settlement,
upon a just, equitable, and honorable basis, of the entire question of
the fishing rights of the two Governments and their respective citizens
on the coasts of the United States and British North America. The
fishing interests being intimately related to other general questions
dependent upon contiguity and intercourse, consideration thereof in all
their equities might also properly come within the purview of such a
commission, and the fullest latitude of expression on both sides should
be permitted.

The correspondence in relation to the fishing rights will be submitted.
The arctic exploring steamer Alert, which was generously given by Her
Majesty's Government to aid in the relief of the Greely expedition, was,
after the successful attainment of that humane purpose, returned to
Great Britain, in pursuance of the authority conferred by the act of
March 3, 1885.

The inadequacy of the existing engagements for extradition between the
United States and Great Britain has been long apparent. The tenth
article of the treaty of 1842, one of the earliest compacts in this
regard entered into by us, stipulated for surrender in respect of a
limited number of offenses. Other crimes no less inimical to the social
welfare should be embraced and the procedure of extradition brought in
harmony with present international practice. Negotiations with Her
Majesty's Government for an enlarged treaty of extradition have been
pending since 1870, and I entertain strong hopes that a satisfactory
result may be soon attained.

The frontier line between Alaska and British Columbia, as defined by the
treaty of cession with Russia, follows the demarcation assigned in a
prior treaty between Great Britain and Russia. Modern exploration
discloses that this ancient boundary is impracticable as a geographical
fact. In the unsettled condition of that region the question has lacked
importance, but the discovery of mineral wealth in the territory the
line is supposed to traverse admonishes that the time has come when an
accurate knowledge of the boundary is needful to avert jurisdictional
complications. I recommend, therefore, that provision be made for a
preliminary reconnoissance by officers of the United States, to the end
of acquiring more precise information on the subject. I have invited Her
Majesty's Government to consider with us the adoption of a more
convenient line, to be established by meridian observations or by known
geographical features without the necessity of an expensive survey of
the whole.

The late insurrectionary movements in Hayti having been quelled, the
Government of that Republic has made prompt provision for adjudicating
the losses suffered by foreigners because of hostilities there, and the
claims of certain citizens of the United States will be in this manner
determined.

The long-pending claims of two citizens of the United States, Pelletier
and Lazare, have been disposed of by arbitration, and an award in favor
of each claimant has been made, which by the terms of the engagement is
final. It remains for Congress to provide for the payment of the
stipulated moiety of the expenses.

A question arose with Hayti during the past year by reason of the
exceptional treatment of an American citizen, Mr. Van Bokkelen, a
resident of Port-au-Prince, who, on suit by creditors residing in the
United States, was sentenced to imprisonment, and, under the operation
of a Haytian statute, was denied relief secured to a native Haytian.
This Government asserted his treaty right to equal treatment with
natives of Hayti in all suits at law. Our contention was denied by the
Haytian Government, which, however, while still professing to maintain
the ground taken against Mr. Van Bokkelen's right, terminated the
controversy by setting him at liberty without explanation.

An international conference to consider the means of arresting the
spread of cholera and other epidemic diseases was held at Rome in May
last, and adjourned to meet again on further notice. An expert delegate
on behalf of the United States has attended its sessions and will submit
a report.

Our relations with Mexico continue to be most cordial, as befits those
of neighbors between whom the strongest ties of friendship and
commercial intimacy exist, as the natural and growing consequence of our
similarity of institutions and geographical propinquity.

The relocation of the boundary line between the United States and Mexico
westward of the Rio Grande, under the convention of July 29, 1882, has
been unavoidably delayed, but I apprehend no difficulty in securing a
prolongation of the period for its accomplishment.

The lately concluded commercial treaty with Mexico still awaits the
stipulated legislation to carry its provisions into effect, for which
one year's additional time has been secured by a supplementary article
signed in February last and since ratified on both sides.

As this convention, so important to the commercial welfare of the two
adjoining countries, has been constitutionally confirmed by the treaty-
making branch, I express the hope that legislation needed to make it
effective may not be long delayed.

The large influx of capital and enterprise to Mexico from the United
States continues to aid in the development of the resources and in
augmenting the material well-being of our sister Republic. Lines of
railway, penetrating to the heart and capital of the country, bring the
two peoples into mutually beneficial intercourse, and enlarged
facilities of transit add to profitable commerce, create new markets,
and furnish avenues to otherwise isolated communities.

I have already adverted to the suggested construction of a ship railway
across the narrow formation of the territory of Mexico at Tehuantepec.

With the gradual recovery of Peru from the effects of her late
disastrous conflict with Chile, and with the restoration of civil
authority in that distracted country, it is hoped that pending war
claims of our citizens will be adjusted.

In conformity with notification given by the Government of Peru, the
existing treaties of commerce and extradition between the United States
and that country will terminate March 31, 1886.

Our good relationship with Russia continues.

An officer of the Navy, detailed for the purpose, is now on his way to
Siberia bearing the testimonials voted by Congress to those who
generously succored the survivors of the unfortunate Jeannette
expedition.

It is gratifying to advert to the cordiality of our intercourse with
Spain.

The long-pending claim of the owners of the ship Masonic for loss
suffered through the admitted dereliction of the Spanish authorities in
the Philippine Islands has been adjusted by arbitration and an indemnity
awarded. The principle of arbitration in such cases, to which the United
States have long and consistently adhered, thus receives a fresh and
gratifying confirmation.

Other questions with Spain have been disposed of or are under diplomatic
consideration with a view to just and honorable settlement.

The operation of the commercial agreement with Spain of January
2--February 13, 1884, has been found inadequate to the commercial needs
of the United States and the Spanish Antilies, and the terms of the
agreement are subjected to conflicting interpretations in those islands.

Negotiations have been instituted at Madrid for a full treaty not open
to these objections and in the line of the general policy touching the
neighborly intercourse of proximate communities, to which I elsewhere
advert, and aiming, moreover, at the removal of existing burdens and
annoying restrictions; and although a satisfactory termination is
promised, I am compelled to delay its announcement.

An international copyright conference was held at Berne in September, on
the invitation of the Swiss Government. The envoy of the United States
attended as a delegate, but refrained from committing this Government to
the results, even by signing the recommendatory protocol adopted. The
interesting and important subject of international copyright has been
before you for several years. Action is certainly desirable to effect
the object in view; and while there may be question as to the relative
advantage of treating it by legislation or by specific treaty, the
matured views of the Berne conference can not fail to aid your
consideration of the subject.

The termination of the commercial treaty of 1862 between the United
States and Turkey has been sought by that Government. While there is
question as to the sufficiency of the notice of termination given, yet
as the commercial rights of our citizens in Turkey come under the
favored-nation guaranties of the prior treaty of 1830, and as equal
treatment is admitted by the Porte, no inconvenience can result from the
assent of this Government to the revision of the Ottoman tariffs, in
which the treaty powers have been invited to join.

Questions concerning our citizens in Turkey may be affected by the
Porte's nonacquiescence in the right of expatriation and by the
imposition of religious tests as a condition of residence, in which this
Government can not concur. The United States must hold in their
intercourse with every power that the status of their citizens is to be
respected and equal civil privileges accorded to them without regard to
creed, and affected by no considerations save those growing out of
domiciliary return to the land of original allegiance or of unfulfilled
personal obligations which may survive, under municipal laws, after such
voluntary return.

The negotiation with Venezuela relative to the rehearing of the awards
of the mixed commission constituted under the treaty of 1866 was resumed
in view of the recent acquiescence of the Venezuelan envoy in the
principal point advanced by this Government, that the effects of the old
treaty could only be set aside by the operation of a new convention. A
result in substantial accord with the advisory suggestions contained in
the joint resolution of March 3, 1883, has been agreed upon and will
shortly be submitted to the Senate for ratification.

Under section 3659 of the Revised Statutes all funds held in trust by
the United States and the annual interest accruing thereon, when not
otherwise required by treaty, are to be invested in stocks of the United
States bearing a rate of interest not less than 5 per cent per annum.
There being now no procurable stocks paying so high a rate of interest,
the letter of the statute is at present inapplicable, but its spirit is
subserved by continuing to make investments of this nature in current
stocks bearing the highest interest now paid. The statute, however,
makes no provision for the disposal of such accretions. It being
contrary to the general rule of this Government to allow interest on
claims, I recommend the repeal of the provision in question and the
disposition, under a uniform rule, of the present accumulations from
investment of trust funds.

The inadequacy of existing legislation touching citizenship and
naturalization demands your consideration.

While recognizing the right of expatriation, no statutory provision
exists providing means for renouncing citizenship by an American
citizen, native born or naturalized, nor for terminating and vacating an
improper acquisition of citizenship. Even a fraudulent decree of
naturalization can not now be canceled. The privilege and franchise of
American citizenship should be granted with care, and extended to those
only who intend in good faith to assume its duties and responsibilities
when attaining its privileges and benefits. It should be withheld from
those who merely go through the forms of naturalization with the intent
of escaping the duties of their original allegiance without taking upon
themselves those of their new status, or who may acquire the rights of
American citizenship for no other than a hostile purpose toward their
original governments. These evils have had many flagrant illustrations.

I regard with favor the suggestion put forth by one of my predecessors
that provision be made for a central bureau of record of the decrees of
naturalization granted by the various courts throughout the United
States now invested with that power.

The rights which spring from domicile in the United States, especially
when coupled with a declaration of intention to become a citizen, are
worthy of definition by statute. The stranger coming hither with intent
to remain, establishing his residence in our midst, contributing to the
general welfare, and by his voluntary act declaring his purpose to
assume the responsibilities of citizenship, thereby gains an inchoate
status which legislation may properly define. The laws of certain States
and Territories admit a domiciled alien to the local franchise,
conferring on him the rights of citizenship to a degree which places him
in the anomalous position of being a citizen of a State and yet not of
the United States within the purview of Federal and international law.

It is important within the scope of national legislation to define this
right of alien domicile as distinguished from Federal naturalization.

The commercial relations of the United States with their immediate
neighbors and with important areas of traffic near our shores suggest
especially liberal intercourse between them and us.

Following the treaty of 1883 with Mexico, which rested on the basis of a
reciprocal exemption from customs duties, other similar treaties were
initiated by my predecessor.

Recognizing the need of less obstructed traffic with Cuba and Puerto
Rico, and met by the desire of Spain to succor languishing interests in
the Antilles, steps were taken to attain those ends by a treaty of
commerce. A similar treaty was afterwards signed by the Dominican
Republic. Subsequently overtures were made by Her Britannic Majesty's
Government for a like mutual extension of commercial intercourse with
the British West Indian and South American dependencies, but without
result.

On taking office I withdrew for reexamination the treaties signed with
Spain and Santo Domingo, then pending before the Senate. The result has
been to satisfy me of the inexpediency of entering into engagements of
this character not covering the entire traffic.

These treaties contemplated the surrender by the United States of large
revenues for inadequate considerations. Upon sugar alone duties were
surrendered to an amount far exceeding all the advantages offered in
exchange. Even were it intended to relieve our consumers, it was evident
that so long as the exemption but partially covered our importation such
relief would be illusory. To relinquish a revenue so essential seemed
highly improvident at a time when new and large drains upon the Treasury
were contemplated. Moreover, embarrassing questions would have arisen
under the favored-nation clauses of treaties with other nations.

As a further objection, it is evident that tariff regulation by treaty
diminishes that independent control over its own revenues which is
essential for the safety and welfare of any government. Emergency
calling for an increase of taxation may at any time arise, and no
engagement with a foreign power should exist to hamper the action of the
Government.

By the fourteenth section of the shipping act approved June 26, 1884,
certain reductions and contingent exemptions from tonnage dues were made
as to vessels entering ports of the United States from any foreign port
in North and Central America, the West India Islands, the Bahamas and
Bermudas, Mexico, and the Isthmus as far as Aspinwall and Panama. The
Governments of Belgium, Denmark, Germany, Portugal, and Sweden and
Norway have asserted, under the favored-nation clause in their treaties
with the United States, a claim to like treatment in respect of vessels
coming to the United States from their home ports. This Government,
however, holds that the privileges granted by the act are purely
geographical, inuring to any vessel of any foreign power that may choose
to engage in traffic between this country and any port within the
defined zone, and no warrant exists under the most-favored-nation clause
for the extension of the privileges in question to vessels sailing to
this country from ports outside the limitation of the act.

Undoubtedly the relations of commerce with our near neighbors, whose
territories form so long a frontier line difficult to be guarded, and
who find in our country, and equally offer to us, natural markets,
demand special and considerate treatment. It rests with Congress to
consider what legislative action may increase facilities of intercourse
which contiguity makes natural and desirable.

I earnestly urge that Congress recast the appropriations for the
maintenance of the diplomatic and consular service on a footing
commensurate with the importance of our national interests. At every
post where a representative is necessary the salary should be so graded
as to permit him to live with comfort. With the assignment of adequate
salaries the so-called notarial extra official fees, which our officers
abroad are now permitted to treat as personal perquisites, should be
done away with. Every act requiring the certification and seal of the
officer should be taxable at schedule rates and the fee therefor
returned to the Treasury. By restoring these revenues to the public use
the consular service would be self-supporting, even with a liberal
increase of the present low salaries.

In further prevention of abuses a system of consular inspection should
be instituted.

The appointment of a limited number of secretaries of legation at large,
to be assigned to duty wherever necessary, and in particular for
temporary service at missions which for any cause may be without a head,
should also be authorized.

I favor also authorization for the detail of officers of the regular
service as military or naval attaches at legations.

Some foreign governments do not recognize the union of consular with
diplomatic functions. Italy and Venezuela will only receive the
appointee in one of his two capacities, but this does not prevent the
requirement of a bond and submission to the responsibilities of an
office whose duties he can not discharge. The superadded title of
consul-general should be abandoned at all missions.

I deem it expedient that a well-devised measure for the reorganization
of the extraterritorial courts in Oriental countries should replace the
present system, which labors under the disadvantage of combining
judicial and executive functions in the same office.

In several Oriental countries generous offers have been made of premises
for housing the legations of the United States. A grant of land for that
purpose was made some years since by Japan, and has been referred to in
the annual messages of my predecessor. The Siamese Government has made a
gift to the United States of commodious quarters in Bangkok. In Korea
the late minister was permitted to purchase a building from the
Government for legation use. In China the premises rented for the
legation are favored as to local charges. At Tangier the house occupied
by our representative has been for many years the property; this
Government, having been given for that purpose in 1822 by the Sultan of
Morocco. I approve the suggestion heretofore made, that, view of the
conditions of life and administration in the Eastern countries, the
legation buildings in China, Japan, Korea, Siam, and perhaps Persia,
should be owned and furnished by the Government with a view to
permanency and security. To this end I recommend that authority be given
to accept the gifts adverted to in Japan and Siam, and to purchase in
the other countries named, with provision for furniture and repairs. A
considerable saving in rentals would result.

The World's Industrial Exposition, held at New Orleans last winter, with
the assistance of the Federal Government, attracted a large number of
foreign exhibits, and proved of great value in spreading among the
concourse of visitors from Mexico and Central and South America a wider
knowledge of the varied manufactures and productions of this country and
their availability in exchange for the productions of those regions.

Past Congresses have had under consideration the advisability of
abolishing the discrimination made by the tariff laws in favor of the
works of American artists. The odium of the policy which subjects to a
high rate of duty the paintings of foreign artists and exempts the
productions of American artists residing abroad, and who receive
gratuitously advantages and instruction, is visited upon our citizens
engaged in art culture in Europe, and has caused them with practical
unanimity to favor the abolition of such an ungracious distinction; and
in their interest, and for other obvious reasons, I strongly recommend
it.

The report of the Secretary of the Treasury fully exhibits the condition
of the public finances and of the several branches of the Government
connected with his Department. The suggestions of the Secretary relating
to the practical operations of this important Department, and his
recommendations in the direction of simplification and economy,
particularly in the work of collecting customs duties, are especially
urged upon the attention of Congress.

The ordinary receipts from all sources for the fiscal year ended June
30, 1885, were $322,690,706.38. Of this sum $181,471,939.34 was received
from customs and $112,498,725.54 from internal revenue. The total
receipts, as given above, were $24,829,163.54 less than those for the
year ended June 30, 1884. This diminution embraces a falling off of
$13,595,550.42 in the receipts from customs and $9,687,346.97 in the
receipts from internal revenue.

The total ordinary expenditures of the Government for the fiscal year
were $260,226,935.50, leaving a surplus in the Treasury at the close of
the year of $63,463,771.27. This is $40,929,854.32 less than the surplus
reported at the close of the previous year.

The expenditures are classified as follows:

The amount paid on the public debt during the fiscal year ended June 30,
1885, was $45,993,235.43, and there has been paid since that date and up
to November 1, 1885, the sum of $369,828, leaving the amount of the debt
at the last-named date $1,514,475,860.47. There was however, at that
time in the Treasury, applicable to the general purposes of the
Government, the sum of $66,818,292.38.

The total receipts for the current fiscal year ending June 30, 1886,
ascertained to October 1, 1885, and estimated for the remainder of the
year, are $315,000,000. The expenditures ascertained and estimated for
the same time are $245,000,000, leaving a surplus at the close of the
year estimated at $70,000,000.

The value of the exports from the United States to foreign countries
during the last fiscal year was as follows:

Some of the principal exports, with their values and the percentage they
respectively bear to the total exportation, are given as follows:

Our imports during the year were as follows:

The following are given as prominent articles of import during the year,
with their values and the percentage they bear to the total importation:

Of the entire amount of duties collected 70 per cent was collected from
the following articles of import:

The fact that our revenues are in excess of the actual needs of all
economical administration of the Government justifies a reduction in the
amount exacted from the people for its support. Our Government is but
the means established by the will of a free people by which certain
principles are applied which they have adopted for their benefit and
protection; and it is never better administered and its true spirit is
never better observed than when the people's taxation for its support is
scrupulously limited to the actual necessity of expenditure and
distributed according to a just and equitable plan.

The proposition with which we have to deal is the reduction of the
revenue received by the Government, and indirectly paid by the people,
from customs duties. The question of free trade is not involved, nor is
there now any occasion for the general discussion of the wisdom or
expediency of a protective system.

Justice and fairness dictate that in any modification of our present
laws relating to revenue the industries and interests which have been
encouraged by such laws, and in which our citizens have large
investments, should not be ruthlessly injured or destroyed. We should
also deal with the subject in such manner as to protect the interests of
American labor, which is the capital of our workingmen. Its stability
and proper remuneration furnish the most justifiable pretext for a
protective policy.

Within these limitations a certain reduction should be made in our
customs revenue. The amount of such reduction having been determined,
the inquiry follows, Where can it best be remitted and what articles can
best be released from duty in the interest of our citizens?

I think the reduction should be made in the revenue derived from a tax
upon the imported necessaries of life. We thus directly lessen the cost
of living in every family of the land and release to the people in every
humble home a larger measure of the rewards of frugal industry.

During the year ended November 1, 1885, 145 national banks were
organized, with an aggregate capital of $16,938,000, and circulating
notes have been issued to them amounting to $4,274,910. The whole number
of these banks in existence on the day above mentioned was 2,727.

The very limited amount of circulating notes issued by our national
banks, compared with the amount the law permits them to issue upon a
deposit of bonds for their redemption, indicates that the volume of our
circulating medium may be largely increased through this
instrumentality.

Nothing more important than the present condition of our currency and
coinage can claim your attention.

Since February, 1878, the Government has, under the compulsory
provisions of law, purchased silver bullion and coined the same at the
rate of more than $2,000,000 every month. By this process up to the
present date 215,759,431 silver dollars have been coined.

A reasonable appreciation of a delegation of power to the General
Government would limit its exercise, without express restrictive words,
to the people's needs and the requirements of the public welfare.

Upon this theory the authority to "coin money" given to Congress by the
Constitution, if it permits the purchase by the Government of bullion
for coinage in any event, does not justify such purchase and coinage to
an extent beyond the amount needed for a sufficient circulating medium.

The desire to utilize the silver product of the country should not lead
to a misuse or the perversion of this power.

The necessity for such an addition to the silver currency of the nation
as is compelled by the silver-coinage act is negatived by the fact that
up to the present time only about 50,000,000 of the silver dollars so
coined have actually found their way into circulation, leaving more than
165,000,000 in the possession of the Government, the custody of which
has entailed a considerable expense for the construction of vaults for
it deposit. Against this latter amount there are outstanding silver
certificates amounting to about $93,000,000.

Every month two millions of gold in the public Treasury are paid our for
two millions or more of silver dollars, to be added to the idle mass
already accumulated.

If continued long enough, this operation will result in the substitution
of silver for all the gold the Government owns applicable to its general
purposes. It will not do to rely upon the customs receipts of the
Government to make good this drain of gold, because the silver thus
coined having been made legal tender for all debts and dues, public and
private, at times during the last six months 58 per cent of the receipts
for duties has been in silver or silver certificates, while the average
within that period has been 20 per cent. The proportion of silver and
its certificates received by the Government will probably increase as
time goes on, for the reason that the nearer the period approaches when
it will be obliged to offer silver in payment of its obligations the
greater inducement there will be to hoard gold against depreciation in
the value of silver or for the purpose of speculating.

This hoarding of gold has already begun.

When the time comes that gold has been withdrawn from circulation, then
will be apparent the difference between the real value of the silver
dollar and a dollar in gold, and the two coins will part company. Gold,
still the standard of value and necessary in our dealings with other
countries, will be at a premium over silver; banks which have
substituted gold for the deposits of their customers may pay them with
silver bought with such gold, thus making a handsome profit; rich
speculators will sell their hoarded gold to their neighbors who need it
to liquidate their foreign debts, at a ruinous premium over silver, and
the laboring men and women of the land, most defenseless of all, will
find that the dollar received for the wage of their toil has sadly
shrunk in its purchasing power. It may be said that the latter result
will be but temporary, and that ultimately the price of labor will be
adjusted to the change; but even if this takes place the wage-worker can
not possibly gain, but must inevitably lose, since the price he is
compelled to pay for his living will not only be measured in a coin
heavily depreciated and fluctuating and uncertain in its value, but this
uncertainty in the value of the purchasing medium will be made the
pretext for an advance in prices beyond that justified by actual
depreciation.

The words uttered in 1834 by Daniel Webster in the Senate of the United
States are true to-day: The very man of all others who has the deepest
interest in a sound currency, and who suffers most by mischievous
legislation in money matters, is the man who earns his daily bread by
his daily toil. The most distinguished advocate of bimetallism,
discussing our silver coinage, has lately written: No American citizen's
hand has yet felt the sensation of cheapness, either in receiving or
expending the silver-act dollars. And those who live by labor or
legitimate trade never will feel that sensation of cheapness. However
plenty silver dollars may become, they will not be distributed as gifts
among the people; and if the laboring man should receive four
depreciated dollars where he now receives but two, he will pay in the
depreciated coin more than double the price he now pays for all the
necessaries and comforts of life.

Those who do not fear any disastrous consequences arising from the
continued compulsory coinage of silver as now directed by law, and who
suppose that the addition to the currency of the country intended as its
result will be a public benefit, are reminded that history demonstrates
that the point is easily reached in the attempt to float at the same
time two sorts of money of different excellence when the better will
cease to be in general circulation. The hoarding of gold which has
already taken place indicates that we shall not escape the usual
experience in such cases. So if this silver coinage be continued we may
reasonably expect that gold and its equivalent will abandon the field of
circulation to silver alone. This of course must produce a severe
contraction of our circulating medium, instead of adding to it.

It will not be disputed that any attempt on the part of the Government
to cause the circulation of silver dollars worth 80 cents side by side
with gold dollars worth 100 cents, even within the limit that
legislation does not run counter to the laws of trade, to be successful
must be seconded by the confidence of the people that both coins will
retain the same purchasing power and be interchangeable at will. A
special effort has been made by the Secretary of the Treasury to
increase the amount of our silver coin in circulation; but the fact that
a large share of the limited amount thus put out has soon returned to
the public Treasury in payment of duties leads to the belief that the
people do not now desire to keep it in hand, and this, with the evident
disposition to hoard gold, gives rise to the suspicion that there
already exists a lack of confidence among the people touching our
financial processes. There is certainly not enough silver now in
circulation to cause uneasiness, and the whole amount coined and now on
hand might after a time be absorbed by the people without apprehension;
but it is the ceaseless stream that threatens to overflow the land which
causes fear and uncertainty.

What has been thus far submitted upon this subject relates almost
entirely to considerations of a home nature, unconnected with the
bearing which the policies of other nations have upon the question. But
it is perfectly apparent that a line of action in regard to our currency
can not wisely be settled upon or persisted in without considering the
attitude on the subject of other countries with whom we maintain
intercourse through commerce, trade, and travel. An acknowledgment of
this fact is found in the act by virtue of which our silver is
compulsorily coined. It provides that--The President shall invite the
governments of the countries composing the Latin Union, so called, and
of such other European nations as he may deem advisable, to join the
United States in a conference to adopt a common ratio between gold and
silver for the purpose of establishing internationally the use of
bimetallic money and securing fixity of relative value between those
metals. This conference absolutely failed, and a similar fate has
awaited all subsequent efforts in the same direction. And still we
continue our coinage of silver at a ratio different from that of any
other nation. The most vital part of the silver-coinage act remains
inoperative and unexecuted, and without an ally or friend we battle upon
the silver field in an illogical and losing contest.

To give full effect to the design of Congress on this subject I have
made careful and earnest endeavor since the adjournment of the last
Congress.

To this end I delegated a gentleman well instructed in fiscal science to
proceed to the financial centers of Europe and, in conjunction with our
ministers to England, France, and Germany, to obtain a full knowledge of
the attitude and intent of those governments in respect of the
establishment of such an international ratio as would procure free
coinage of both metals at the mints of those countries and our own. By
my direction our consul-general at Paris has given close attention to
the proceedings of the congress of the Latin Union, in order to indicate
our interest in its objects and report its action.

It may be said in brief, as the result of these efforts, that the
attitude of the leading powers remains substantially unchanged since the
monetary conference of 1881, nor is it to be questioned that the views
of these governments are in each instance supported by the weight of
public opinion.

The steps thus taken have therefore only more fully demonstrated the
uselessness of further attempts at present to arrive at any agreement on
the subject with other nations.

In the meantime we are accumulating silver coin, based upon our own
peculiar ratio, to such an extent, and assuming so heavy a burden to be
provided for in any international negotiations, as will render us an
undesirable party to any future monetary conference of nations.

It is a significant fact that four of the five countries composing the
Latin Union mentioned in our coinage act, embarrassed with their silver
currency, have just completed an agreement among themselves that no more
silver shall be coined by their respective Governments and that such as
has been already coined and in circulation shall be redeemed in gold by
the country of its coinage. The resort to this expedient by these
countries may well arrest the attention of those who suppose that we can
succeed without shock or injury in the attempt to circulate upon its
merits all the silver we may coin under the provisions of our
silver-coinage act.

The condition in which our Treasury may be placed by a persistence in
our present course is a matter of concern to every patriotic citizen who
does not desire his Government to pay in silver such of its obligations
as should be paid in gold. Nor should our condition be such as to oblige
us, in a prudent management of our affairs, to discontinue the calling
in and payment of interest-bearing obligations which we have the right
now to discharge, and thus avoid the payment of further interest
thereon.

The so-called debtor class, for whose benefit the continued compulsory
coinage of silver is insisted upon, are not dishonest because they are
in debt, and they should not be suspected of a desire to jeopardize the
financial safety of the country in order that they may cancel their
present debts by paying the same in depreciated dollars. Nor should it
be forgotten that it is not the rich nor the money lender alone that
must submit to such a readjustment, enforced by the Government and their
debtors. The pittance of the widow and the orphan and the incomes of
helpless beneficiaries of all kinds would be disastrously reduced. The
depositors in savings banks and in other institutions which hold in
trust the savings of the poor, when their little accumulations are
scaled down to meet the new order of things, would in their distress
painfully realize the delusion of the promise made to them that
plentiful money would improve their condition.

We have now on hand all the silver dollars necessary to supply the
present needs of the people and to satisfy those who from sentiment wish
to see them in circulation, and if their coinage is suspended they can
be readily obtained by all who desire them. If the need of more is at
anytime apparent, their coinage may be renewed.

That disaster has not already overtaken us furnishes no proof that
danger does not wait upon a continuation of the present silver coinage.
We have been saved by the most careful management and unusual
expedients, by a combination of fortunate conditions, and by a confident
expectation that the course of the Government in regard to silver
coinage would be speedily changed by the action of Congress.

Prosperity hesitates upon our threshold because of the dangers and
uncertainties surrounding this question. Capital timidly shrinks from
trade, and investors are unwilling to take the chance of the
questionable shape in which their money will be returned to them, while
enterprise halts at a risk against which care and sagacious management
do not protect.

As a necessary consequence, labor lacks employment and suffering and
distress are visited upon a portion of our fellow-citizens especially
entitled to the careful consideration of those charged with the duties
of legislation. No interest appeals to us so strongly for a safe and
stable currency as the vast army of the unemployed.

I recommend the suspension of the compulsory coinage of silver dollars,
directed by the law passed in February, 1878.

The Steamboat-Inspection Service on the 30th day of June, 1885, was
composed of 140 persons, including officers, clerks, and messengers. The
expenses of the service over the receipts were $138,822.22 during the
fiscal year. The special inspection of foreign steam vessels, organized
under a law passed in 1882, was maintained during the year at an expense
of $36,641.63. Since the close of the fiscal year reductions have been
made in the force employed which will result in a saving during the
current year of $17,000 without affecting the efficiency of the service.

The Supervising Surgeon-General reports that during the fiscal year
41,714 patients have received relief through the Marine-Hospital
Service, of whom 12,803 were treated in hospitals and 28,911 at the
dispensaries.

Active and effective efforts have been made through the medium of this
service to protect the country against an invasion of cholera, which has
prevailed in Spain and France, and the smallpox, which recently broke
out in Canada.

The most gratifying results have attended the operations of the Life
Saving Service during the last fiscal year. The observance of the
provision of law requiring the appointment of the force employed in this
service to be made "solely with reference to their fitness, and without
reference to their political or party affiliation," has secured the
result which may confidently be expected in any branch of public
employment where such a rule is applied. As a consequence, this service
is composed of men well qualified for the performance of their dangerous
and exceptionally important duties.

The number of stations in commission at the close of the year was 203.
The number of disasters to vessels and craft of all kinds within their
field of action was 371. The number of persons endangered in such
disasters was 2,439, of whom 2,428 were saved and only 11 lost. Other
lives which were imperiled, though not by disasters to shipping, were
also rescued, and a large amount of property was saved through the aid
of this service. The cost of its maintenance during the year was
$828,474.43.

The work of the Coast and Geodetic Survey was during the last fiscal
year carried on within the boundaries and off the coasts of thirty-two
States, two Territories, and the District of Columbia. In July last
certain irregularities were found to exist in the management of this
Bureau, which led to a prompt investigation of its methods. The abuses
which were brought to light by this examination and the reckless
disregard of duty and the interests of the Government developed on the
part of some of those connected with the service made a change of
superintendency and a few of its other officers necessary. Since the
Bureau has been in new hands an introduction of economies and the
application of business methods have produced an important saving to the
Government and a promise of more useful results.

This service has never been regulated by anything but the most
indefinite legal enactments and the most unsatisfactory rules. It was
many years ago sanctioned apparently for a purpose regarded as temporary
and related to a survey of our coast. Having gained a place in the
appropriations made by Congress, it has gradually taken to itself powers
and objects not contemplated in its creation and extended its operations
until it sadly needs legislative attention.

So far as a further survey of our coast is concerned, there seems to be
a propriety in transferring that work to the Navy Department. The other
duties now in charge of this establishment, if they can not be
profitably attached to some existing Department or other bureau, should
be prosecuted under a law exactly defining their scope and purpose, and
with a careful discrimination between the scientific inquiries which may
properly be assumed by the Government and those which should be
undertaken by State authority or by individual enterprise.

It is hoped that the report of the Congressional committee heretofore
appointed to investigate this and other like matters will aid in the
accomplishment of proper legislation on this subject.

The report of the Secretary of War is herewith submitted. The attention
of Congress is invited to the detailed account which it contains of the
administration of his Department, and his recommendations and
suggestions for the improvement of the service.

The Army consisted, at the date of the last consolidated returns, of
2,154 officers and 24,705 enlisted men.

The expenses of the Departments for the fiscal year ended June, 30,
1885, including $13,164,394.60 for public works and river and harbor
improvements, were $45,850,999.54.

Besides the troops which were dispatched in pursuit of the small band of
Indians who left their reservation in Arizona and committed murders and
outrages, two regiments of cavalry and one of infantry were sent last
July to the Indian Territory to prevent an outbreak which seemed
imminent. They remained to aid, if necessary, in the expulsion of
intruders upon the reservation, who seemed to have caused the discontent
among the Indians, but the Executive proclamation warning them to remove
was complied with without their interference.

Troops were also sent to Rock Springs, in Wyoming Territory, after the
massacre of Chinese there, to prevent further disturbance, and
afterwards to Seattle, in Washington Territory, to avert a threatened
attack upon Chinese laborers and domestic violence there. In both cases
the mere presence of the troops had the desired effect.

It appears that the number of desertions has diminished, but that during
the last fiscal year they numbered 2,927; and one instance is given by
the Lieutenant-General of six desertions by the same recruit. I am
convinced that this number of desertions can be much diminished by
better discipline and treatment; but the punishment should be increased
for repeated offenses.

These desertions might also be reduced by lessening the term of first
enlistments, thus allowing a discontented recruit to contemplate a
nearer discharge and the Army a profitable riddance. After one term of
service a reenlistment would be quite apt to secure a contented recruit
and a good soldier.

The Acting Judge-Advocate-General reports that the number of trials by
general courts-martial during the year was 2,328, and that 11,851 trials
took place before garrison and regimental courts-martial. The suggestion
that probably more than half the Army have been tried for offenses,
great and small, in one year may well arrest attention. Of course many
of these trials before garrison and regimental courts-martial were for
offenses almost frivolous, and there should, I think, be a way devised
to dispose of these in a more summary and less inconvenient manner than
by court-martial.

If some of the proceedings of courts-martial which I have had occasion
to examine present the ideas of justice which generally prevail in these
tribunals, I am satisfied that they should be much reformed if the honor
and the honesty of the Army and Navy are by their instrumentality to be
vindicated and protected.

The Board on Fortifications or other defenses, appointed in pursuance of
the provisions of the act of Congress approved March 3, 1885, will in a
short time present their report, and it is hoped that this may greatly
aid the legislation so necessary to remedy the present defenseless
condition of our seacoasts.

The work of the Signal Service has been prosecuted during the last year
with results of increasing benefit to the country. The field of
instruction has been enlarged with a view of adding to its usefulness.
The number of stations in operation June 30, 1885, was 489. Telegraphic
reports are received daily from 160 stations. Reports are also received
from 25 Canadian stations, 375 volunteer observers, 52 army surgeons at
military posts, and 333 foreign stations. The expense of the service
during the fiscal year, after deducting receipts from military telegraph
lines, was $792,592.97. In view of the fact referred to by the Secretary
of War, that the work of this service ordinarily is of a scientific
nature, and the further fact that it is assuming larger proportions
constantly and becoming more and more unsuited to the fixed rules which
must govern the Army, I am inclined to agree with him in the opinion
that it should be separately established. If this is done, the scope and
extent of its operations should, as nearly as possible, be definitely
prescribed by law and always capable of exact ascertainment.

The Military Academy at West Point is reported as being in a high state
of efficiency and well equipped for the satisfactory accomplishment of
the purposes of its maintenance.

The fact that the class which graduates next year is an unusually large
one has constrained me to decline to make appointments to second
lieutenancies in the Army from civil life, so that such vacancies as
exist in these places may be reserved for such graduates; and yet it is
not probable that there will be enough vacancies to provide positions
for them all when they leave the military school. Under the prevailing
law and usage those not thus assigned to duty never actively enter the
military service. It is suggested that the law on this subject be
changed so that such of these young men as are not at once assigned to
duty after graduation may be retained as second lieutenants in the Army
if they desire it, subject to assignment when opportunity occurs, and
under proper rules as to priority of selection.

The expenditures on account of the Military Academy for the last fiscal
year, exclusive of the sum taken for its purposes from appropriations
for the support of the Army, were $290,712.07.

The act approved March 3, 1885, designed to compensate officers and
enlisted men for loss of private property while in the service of the
United States, is so indefinite in its terms and apparently admits so
many claims the adjustment of which could not have been contemplated
that if it is to remain upon the statute book it needs amendment.

There should be a general law of Congress prohibiting the construction
of bridges over navigable waters in such manner as to obstruct
navigation, with provisions for preventing the same. It seems that under
existing statutes the Government can not intervene to prevent such a
construction when entered upon without its consent, though when such
consent is asked and granted upon condition the authority to insist upon
such condition is clear. Thus it is represented that while the officers
of the Government are with great care guarding against the obstruction
of navigation by a bridge across the Mississippi River at St. Paul a
large pier for a bridge has been built just below this place directly in
the navigable channel of the river. If such things are to be permitted,
a strong argument is presented against the appropriation of large sums
of money to improve the navigation of this and other important highways
of commerce.

The report of the Secretary of the Navy gives a history of the
operations of his Department and the present condition of the work
committed to his charge.

He details in full the course pursued by him to protect the rights of
the Government in respect of certain vessels unfinished at the time of
his accession to office, and also concerning the dispatch boat Dolphin,
claimed to be completed and awaiting the acceptance of the Department.
No one can fail to see from recitals contained in this report that only
the application of business principles has been insisted upon in the
treatment of these subjects, and that whatever controversy has arisen
was caused by the exaction on the part of the Department of contract
obligations as they were legally construed. In the case of the Dolphin,
with entire justice to the contractor, an agreement has been entered
into providing for the ascertainment by a judicial inquiry of the
complete or partial compliance with the contract in her construction,
and further providing for the assessment of any damages to which the
Government may be entitled on account of a partial failure to perform
such contract, or the payment of the sum still remaining unpaid upon her
price in case a full performance is adjudged.

The contractor, by reason of his failure in business, being unable to
complete the other three vessels, they were taken possession of by the
Government in their unfinished state under a clause in the contract
permitting such a course, and are now in process of completion in the
yard of the contractor, but under the supervision of the Navy
Department.

Congress at its last session authorized the construction of two
additional new cruisers and two gunboats, at a cost not exceeding in the
aggregate $2,995,000. The appropriation for this purpose having become
available on the 1st day of July last, steps were at once taken for the
procurement of such plans for the construction of these vessels as would
be likely to insure their usefulness when completed. These are of the
utmost importance, considering the constant advance in the art of
building vessels of this character, and the time is not lost which is
spent in their careful consideration and selection.

All must admit the importance of an effective navy to a nation like
ours, having such an extended seacoast to protect; and yet we have not a
single vessel of war that could keep the seas against a first-class
vessel of any important power. Such a condition ought not longer to
continue. The nation that can not resist aggression is constantly
exposed to it. Its foreign policy is of necessity weak and its
negotiations are conducted with disadvantage because it is not in
condition to enforce the terms dictated by its sense of right and
justice.

Inspired, as I am, by the hope, shared by all patriotic citizens, that
the day is not very far distant when our Navy will be such as befits our
standing among the nations of the earth, and rejoiced at every step that
leads in the direction of such a consummation, I deem it my duty to
especially direct the attention of Congress to the close of the report
of the Secretary of the Navy, in which the humiliating weakness of the
present organization of his Department is exhibited and the startling
abuses and waste of its present methods are exposed. The conviction is
forced upon us with the certainty of mathematical demonstration that
before we proceed further in the restoration of a Navy we need a
thoroughly reorganized Navy Department. The fact that within seventeen
years more than $75,000,000 have been spent in the construction, repair,
equipment, and armament of vessels, and the further fact that instead of
an effective and creditable fleet we have only the discontent and
apprehension of a nation undefended by war vessels, added to the
disclosures now made, do not permit us to doubt that every attempt to
revive our Navy has thus far for the most part been misdirected, and all
our efforts in that direction have been little better than blind
gropings and expensive, aimless follies.

Unquestionably if we are content with the maintenance of a Navy
Department simply as a shabby ornament to the Government, a constant
watchfulness may prevent some of the scandal and abuse which have found
their way into our present organization, and its incurable waste may be
reduced to the minimum. But if we desire to build ships for present
usefulness instead of naval reminders of the days that are past, we must
have a Department organized for the work, supplied with all the talent
and ingenuity our country affords, prepared to take advantage of the
experience of other nations, systematized so that all effort shall unite
and lead in one direction, and fully imbued with the conviction that war
vessels, though new, are useless unless they combine all that the
ingenuity of man has up to this day brought forth relating to their
construction.

I earnestly commend the portion of the Secretary's report devoted to
this subject to the attention of Congress, in the hope that his
suggestions touching the reorganization of his Department may be adopted
as the first step toward the reconstruction of our Navy.

The affairs of the postal service are exhibited by the report of the
Postmaster-General, which will be laid before you.

The postal revenue, whose ratio of gain upon the rising prosperity of
1882 and 1883 outstripped the increasing expenses of our growing
service, was checked by the reduction in the rate of letter postage
which took effect with the beginning of October in the latter year, and
it diminished during the two past fiscal years $2,790,000, in about the
proportion of $2,270,000 in 1884 to $520,000 in 1885. Natural growth and
development have meantime increased expenditure, resulting in a
deficiency in the revenue to meet the expenses of the Department of five
and a quarter million dollars for the year 1884 and eight and a third
million in the last fiscal year. The anticipated and natural revival of
the revenue has been oppressed and retarded by the unfavorable business
condition of the country, of which the postal service is a faithful
indicator. The gratifying fact is shown, however, by the report that our
returning prosperity is marked by a gain of $380,000 in the revenue of
the latter half of the last year over the corresponding period of the
preceding year.

The change in the weight of first-class matter which may be carried for
a single rate of postage from a half ounce to an ounce, and the
reduction by one-half of the rate of newspaper postage, which, under
recent legislation, began with the current year, will operate to
restrain the augmentation of receipts which otherwise might have been
expected to such a degree that the scale of expense may gain upon the
revenue and cause an increased deficiency to be shown at its close. Yet,
after no long period of reawakened prosperity, by proper economy it is
confidently anticipated that even the present low rates, now as
favorable as any country affords, will be adequate to sustain the cost
of the service.

The operation of the Post-Office Department is for the convenience and
benefit of the people, and the method by which they pay the charges of
this useful arm of their public service, so that it be just and
impartial, is of less importance to them than the economical expenditure
of the means they provide for its maintenance and the due improvement of
its agencies, so that they may enjoy its highest usefulness.

A proper attention has been directed to the prevention of waste or
extravagance, and good results appear from the report to have already
been accomplished.

I approve the recommendation of the Postmaster-General to reduce the
charges on domestic money orders of $5 and less from 8 to 5 cents. This
change will materially aid those of our people who most of all avail
themselves of this instrumentality, but to whom the element of cheapness
is of the greatest importance. With this reduction the system would
still remain self-supporting.

The free-delivery system has been extended to 19 additional cities
during the year, and 178 now enjoy its conveniences. Experience has
commended it to those who enjoy its benefits, and further enlargement of
its facilities is due to other communities to which it is adapted. In
the cities where it has been established, taken together the local
postage exceeds its maintenance by nearly $1,300,000. The limit to which
this system is now confined by law has been nearly reached, and the
reasons given justify its extension, which is proposed.

It was decided, with my approbation, after a sufficient examination, to
be inexpedient for the Post-Office Department to contract for carrying
our foreign mails under the additional authority given by the last
Congress. The amount limited was inadequate to pay all within the
purview of the law the full rate of 50 cents per mile, and it would have
been unjust and unwise to have given it to some and denied it to others.
Nor could contracts have been let under the law to all at a rate to have
brought the aggregate within the appropriation without such practical
prearrangement of terms as would have violated it.

The rate of sea and inland postage which was proffered under another
statute clearly appears to be a fair compensation for the desired
service, being three times the price necessary to secure transportation
by other vessels upon any route, and much beyond the charges made to
private persons for services not less burdensome.

Some of the steamship companies, upon the refusal of the
Postmaster-General to attempt, by the means provided, the distribution
of the sum appropriated as an extra compensation, withdrew the services
of their vessels and thereby occasioned slight inconvenience, though no
considerable injury, the mails having been dispatched by other means.

Whatever may be thought of the policy of subsidizing any line of public
conveyance or travel, I am satisfied that it should not be done under
cover of an expenditure incident to the administration of a Department,
nor should there be any uncertainty as to the recipients of the subsidy
or any discretion left to an executive officer as to its distribution.
If such gifts of the public money are to be made for the purpose of
aiding any enterprise in the supposed interest of the public, I can not
but think that the amount to be paid and the beneficiary might better be
determined by Congress than in any other way.

The international congress of delegates from the Postal Union countries
convened at Lisbon, in Portugal, in February last, and after a session
of some weeks the delegates signed a convention amendatory of the
present postal-union convention in some particulars designed to advance
its purposes. This additional act has had my approval and will be laid
before you with the departmental report.

I approve the recommendation of the postmaster-General that another
assistant be provided for his Department. I invite your consideration to
the several other recommendations contained in his report.

The report of the Attorney-General contains a history of the conduct of
the Department of Justice during the last year and a number of valuable
suggestions as to needed legislation, and I invite your careful
attention to the same.

The condition of business in the courts of the United States is such
that there seems to be an imperative necessity for remedial legislation
on the subject. Some of these courts are so overburdened with pending
causes that the delays in determining litigation amount often to a
denial of justice. Among the plans suggested for relief is one submitted
by the Attorney-General. Its main features are: The transfer of all the
original jurisdiction of the circuit courts to the district courts and
an increase of judges for the latter where necessary; an addition of
judges to the circuit courts, and constituting them exclusively courts
of appeal, and reasonably limiting appeals thereto; further restrictions
of the right to remove causes from the State to Federal courts;
permitting appeals to the Supreme Court from the courts of the District
of Columbia and the Territories only in the same cases as they are
allowed from State courts, and guarding against an unnecessary number of
appeals from the circuit courts.

I approve the plan thus outlined, and recommend the legislation
necessary for its application to our judicial system.

The present mode of compensating United States marshals and district
attorneys should, in my opinion, be changed. They are allowed to charge
against the Government certain fees for services, their income being
measured by the amount of such fees within a fixed limit as to their
annual aggregate. This is a direct inducement for them to make their
fees in criminal cases as large as possible in an effort to reach the
maximum sum permitted. As an entirely natural consequence, unscrupulous
marshals are found encouraging frivolous prosecutions, arresting people
on petty charges of crime and transporting them to distant places for
examination and trial, for the purpose of earning mileage and other
fees; and district attorneys uselessly attend criminal examinations far
from their places of residence for the express purpose of swelling their
accounts against the Government. The actual expenses incurred in these
transactions are also charged against the Government.

Thus the rights and freedom of our citizens are outraged and public
expenditures increased for the purpose of furnishing public officers
pretexts for increasing the measure of their compensation.

I think marshals and district attorneys should be paid salaries,
adjusted by a rule which will make them commensurate with services
fairly rendered.

In connection with this subject I desire to suggest the advisability, if
it be found not obnoxious to constitutional objection, of investing
United States commissioners with the power to try and determine certain
violations of law within the grade of misdemeanors. Such trials might be
made to depend upon the option of the accused. The multiplication of
small and technical offenses, especially under the provisions of our
internal-revenue law, render some change in our present system very
desirable in the interests of humanity as well as economy. The district
courts are now crowded with petty prosecutions, involving a punishment
in case of conviction, of only a slight fine, while the parties accused
are harassed by an enforced attendance upon courts held hundreds of
miles from their homes. If poor and friendless, they are obliged to
remain in jail during months, perhaps, that elapse before a session of
the court is held, and are finally brought to trial surrounded by
strangers and with but little real opportunity for defense. In the
meantime frequently the marshal has charged against the Government his
fees for an arrest, the transportation of the accused and the expense of
the same, and for summoning witnesses before a commissioner, a grand
jury, and a court; the witnesses have been paid from the public funds
large fees and traveling expenses, and the commissioner and district
attorney have also made their charges against the Government.

This abuse in the administration of our criminal law should be remedied;
and if the plan above suggested is not practicable, some other should be
devised.

The report of the Secretary of the Interior, containing an account of
the operations of this important Department and much interesting
information, will be submitted for your consideration.

The most intricate and difficult subject in charge of this Department is
the treatment and management of the Indians. I am satisfied that some
progress may be noted in their condition as a result of a prudent
administration of the present laws and regulations for their control.

But it is submitted that there is lack of a fixed purpose or policy on
this subject, which should be supplied. It is useless to dilate upon the
wrongs of the Indians, and as useless to indulge in the heartless belief
that because their wrongs are revenged in their own atrocious manner,
therefore they should be exterminated.

They are within the care of our Government, and their rights are, or
should be, protected from invasion by the most solemn obligations. They
are properly enough called the wards of the Government; and it should be
borne in mind that this guardianship involves on our part efforts for
the improvement of their condition and the enforcement of their rights.
There seems to be general concurrence in the proposition that the
ultimate object of their treatment should be their civilization and
citizenship. Fitted by these to keep pace in the march of progress with
the advanced civilization about them, they will readily assimilate with
the mass of our population, assuming the responsibilities and receiving
the protection incident to this condition.

The difficulty appears to be in the selection of the means to be at
present employed toward the attainment of this result.

Our Indian population, exclusive of those in Alaska, is reported as
numbering 260,000, nearly all being located on lands set apart for their
use and occupation, aggregating over 134,000,000 acres. These lands are
included in the boundaries of 171 reservations of different dimensions,
scattered in 21 States and Territories, presenting great variations in
climate and in the kind and quality of their soils. Among the Indians
upon these several reservations there exist the most marked differences
in natural traits and disposition and in their progress toward
civilization. While some are lazy, vicious, and stupid, others are
industrious, peaceful, and intelligent; while a portion of them are
self-supporting and independent, and have so far advanced in
civilization that they make their own laws, administered through
officers of their own choice, and educate their children in schools of
their own establishment and maintenance, others still retain, in squalor
and dependence, almost the savagery of their natural state.

In dealing with this question the desires manifested by the Indians
should not be ignored. Here again we find a great diversity. With some
the tribal relation is cherished with the utmost tenacity, while its
hold upon others is considerably relaxed; the love of home is strong
with all, and yet there are those whose attachment to a particular
locality is by no means unyielding; the ownership of their lands in
severalty is much desired by some, while by others, and sometimes among
the most civilized, such a distribution would be bitterly opposed.

The variation of their wants, growing out of and connected with the
character of their several locations, should be regarded. Some are upon
reservations most fit for grazing, but without flocks or herds; and some
on arable land, have no agricultural implements. While some of the
reservations are double the size necessary to maintain the number of
Indians now upon them, in a few cases, perhaps, they should be enlarged.

Add to all this the difference in the administration of the agencies.
While the same duties are devolved upon all, the disposition of the
agents and the manner of their contact with the Indians have much to do
with their condition and welfare. The agent who perfunctorily performs
his duty and slothfully neglects all opportunity to advance their moral
and physical improvement and fails to inspire them with a desire for
better things will accomplish nothing in the direction of their
civilization, while he who feels the burden of an important trust and
has an interest in his work will, by consistent example, firm yet
considerate treatment, and well-directed aid and encouragement,
constantly lead those under his charge toward the light of their
enfranchisement.

The history of all the progress which has been made in the civilization
of the Indian I think will disclose the fact that the beginning has been
religious teaching, followed by or accompanying secular education. While
the self-sacrificing and pious men and women who have aided in this good
work by their independent endeavor have for their reward the beneficent
results of their labor and the consciousness of Christian duty well
performed, their valuable services should be fully acknowledged by all
who under the law are charged with the control and management of our
Indian wards.

What has been said indicates that in the present condition of the
Indians no attempt should be made to apply a fixed and unyielding plan
of action to their varied and varying needs and circumstances.

The Indian Bureau, burdened as it is with their general oversight and
with the details of the establishment, can hardly possess itself of the
minute phases of the particular cases needing treatment; and thus the
propriety of creating an instrumentality auxiliary to those already
established for the care of the Indians suggests itself.

I recommend the passage of a law authorizing the appointment of six
commissioners, three of whom shall be detailed from the Army, to be
charged with the duty of a careful inspection from time to time of all
the Indians upon our reservations or subject to the care and control of
the Government, with a view of discovering their exact condition and
needs and determining what steps shall be taken on behalf of the
Government to improve their situation in the direction of their
self-support and complete civilization; that they ascertain from such
inspection what, if any, of the reservations may be reduced in area, and
in such cases what part not needed for Indian occupation may be
purchased by the Government from the Indians and disposed of for their
benefit; what, if any, Indians may, with their consent, be removed to
other reservations, with a view of their concentration and the sale on
their behalf of their abandoned reservations; what Indian lands now held
in common should be allotted in severalty; in what manner and to what
extent the Indians upon the reservations can be placed under the
protection of our laws and subjected to their penalties, and which, if
any, Indians should be invested with the right of citizenship. The
powers and functions of the commissioners in regard to these subjects
should be clearly defined, though they should, in conjunction with the
Secretary of the Interior, be given all the authority to deal definitely
with the questions presented deemed safe and consistent.

They should be also charged with the duty of ascertaining the Indians
who might properly be furnished with implements of agriculture, and of
what kind; in what cases the support of the Government should be
withdrawn; where the present plan of distributing Indian supplies should
be changed; where schools may be established and where discontinued; the
conduct, methods, and fitness of agents in charge of reservations; the
extent to which such reservations are occupied or intruded upon by
unauthorized persons, and generally all matters related to the welfare
and improvement of the Indian.

They should advise with the Secretary of the Interior concerning these
matters of detail in management, and he should be given power to deal
with them fully, if he is not now invested with such power.

This plan contemplates the selection of persons for commissioners who
are interested in the Indian question and who have practical ideas upon
the subject of their treatment.

The expense of the Indian Bureau during the last fiscal year was more
than six and a halt million dollars. I believe much of this expenditure
might be saved under the plan proposed; that its economical effects
would be increased with its continuance; that the safety of our frontier
settlers would be subserved under its operation, and that the nation
would be saved through its results from the imputation of inhumanity,
injustice, and mismanagement.

In order to carry out the policy of allotment of Indian lands in
severalty, when deemed expedient, it will be necessary to have surveys
completed of the reservations, and, I hope that provision will be made
for the prosecution of this work.

In May of the present year a small portion of the Chiricahua Apaches on
the White Mountain Reservation, in Arizona, left the reservation and
committed a number of murders and depredations upon settlers in that
neighborhood. Though prompt and energetic action was taken by the
military, the renegades eluded capture and escaped into Mexico. The
formation of the country through which these Indians passed, their
thorough acquaintance with the same, the speed of their escape, and the
manner in which they scattered and concealed themselves among the
mountains near the scene of their outrages put our soldiers at a great
disadvantage in their efforts to capture them, though the expectation is
still entertained that they will be ultimately taken and punished for
their crimes.

The threatening and disorderly conduct of the Cheyennes in the Indian
Territory early last summer caused considerable alarm and uneasiness.
Investigation proved that their threatening attitude was due in a great
measure to the occupation of the land of their reservation by immense
herds of cattle, which their owners claimed were rightfully there under
certain leases made by the Indians. Such occupation appearing upon
examination to be unlawful notwithstanding these leases, the intruders
were ordered to remove with their cattle from the lands of the Indians
by Executive proclamation. The enforcement of this proclamation had the
effect of restoring peace and order among the Indians, and they are now
quiet and well behaved.

By an Executive order issued on February 27, 1885, by my predecessor, a
portion of the tract of country in the territory known as the Old
Winnebago and Crow Creek reservations was directed to be restored to the
public domain and opened to settlement under the land laws of the United
States, and a large number of persons entered upon those lands. This
action alarmed the Sioux Indians, who claimed the territory as belonging
to their reservation under the treaty of 1868. This claim was
determined, after careful investigation, to be well rounded, and
consequently the Executive order referred to was by proclamation of
April 17, 1885, declared to be inoperative and of no effect, and all
persons upon the land were warned to leave. This warning has been
substantially complied with.

The public domain had its origin in cessions of land by the States to
the General Government. The first cession was made by the State of New
York, and the largest, which in area exceeded all the others, by the
State of Virginia. The territory the proprietorship of which became thus
vested in the General Government extended from the western line of
Pennsylvania to the Mississippi River. These patriotic donations of the
States were encumbered with no condition except that they should the
held and used "for the common benefit of the United States." By purchase
with the common fund of all the people additions were made to this
domain until it extended to the northern line of Mexico, the Pacific
Ocean, and the Polar Sea. The original trust, "for the common benefit of
the United States," attached to all. In the execution of that trust the
policy of many homes, rather than large estates, was adopted by the
Government. That these might be easily obtained, and be the abode of
security and contentment, the laws for their acquisition were few,
easily understood, and general in their character. But the pressure of
local interests, combined with a speculative spirit, have in many
instances procured the passage of laws which marred the harmony of the
general plan and encumbered the system with a multitude of general and
special enactments which render the land laws complicated, subject the
titles to uncertainty, and the purchasers often to oppression and wrong.
Laws which were intended for the "common benefit" have been perverted so
that large quantities of land are vesting in single ownerships. From the
multitude and character of the laws, this consequence seems incapable of
correction by mere administration.

It is not for the "common benefit of the United States" that a large
area of the public lands should be acquired, directly or through fraud,
in the hands of a single individual. The nation's strength is in the
people. The nation's prosperity is in their prosperity. The nation's
glory is in the equality of her justice. The nation's perpetuity is in
the patriotism of all her people. Hence, as far as practicable, the plan
adopted in the disposal of the public lands should have in view the
original policy, which encouraged many purchases of these lands for
homes and discouraged the massing of large areas. Exclusive of Alaska,
about three-fifths of the national domain has been sold or subjected to
contract or grant. Of the remaining two-fifths a considerable portion is
either mountain or desert. A rapidly increasing population creates a
growing demand for homes, and the accumulation of wealth inspires an
eager competition to obtain the public land for speculative purposes. In
the future this collision of interests will be more marked than in the
past, and the execution of the nation's trust in behalf of our settlers
will be more difficult. I therefore commend to your attention the
recommendations contained in the report of the Secretary of the Interior
with reference to the repeal and modification of certain of our land
laws.

The nation has made princely grants and subsidies to a system of
railroads projected as great national highways to connect the Pacific
States with the East. It has been charged that these donations from the
people have been diverted to private gain and corrupt uses, and thus
public indignation has been aroused and suspicion engendered. Our great
nation does not begrudge its generosity, but it abhors speculation and
fraud; and the favorable regard of our people for the great corporations
to which these grants were made can only be revived by a restoration of
confidence, to be secured by their constant, unequivocal, and clearly
manifested integrity. A faithful application of the undiminished
proceeds of the grants to the construction and perfecting of their
roads, an honest discharge of their obligations, and entire justice to
all the people in the enjoyment of their rights on these highways of
travel are all the public asks, and it will be content with no less. To
secure these things should be the common purpose of the officers of the
Government, as well as of the corporations. With this accomplishment
prosperity would be permanently secured to the roads, and national pride
would take the place of national complaint.

It appears from the report of the Commissioner of Pensions that there
were on the 1st day of July, 1885, 345,125 persons borne upon the
pension rolls, who were classified as follows: Army invalids, 241,456;
widows, minor children, and dependent relatives of deceased soldiers,
78,841; navy invalids, 2,745; navy widows, minor children, and
dependents, 1,926; survivors of the War of 1812, 2,945; and widows of
those who served in that war, 17,212. About one man in ten of all those
who enlisted in the late war are reported as receiving pensions,
exclusive of the dependents of deceased soldiers. On the 1st of July,
1875, the number of pensioners was 234,821, and the increase within the
ten years next thereafter was 110,304.

While there is no expenditure of the public funds which the people more
cheerfully approve than that made in recognition of the services of our
soldiers living and dead, the sentiment underlying the subject should
not be vitiated by the introduction of any fraudulent practices.
Therefore it is fully as important that the rolls should be cleansed of
all those who by fraud have secured a place thereon as that meritorious
claims should be speedily examined and adjusted. The reforms in the
methods of doing the business of this Bureau which have lately been
inaugurated promise better results in both these directions.

The operations of the Patent Office demonstrate the activity of the
inventive genius of the country. For the year ended June 30, 1885, the
applications for patents, including reissues, and for the registration
of trade-marks and labels, numbered 35,688. During the same period there
were 22,928 patents granted and reissued and 1,429 trade-marks and
labels registered. The number of patents issued in the year 1875 was
14,387. The receipts during the last fiscal year were $ 1,074,974.35,
and the total expenditures, not including contingent expenses,
$934,123.11.

There were 9,788 applications for patents pending on the 1st day of
July, 1884, and 5,786 on the same date in the year 1885. There has been
considerable improvement made in the prompt determination of
applications and a consequent relief to expectant inventors.

A number of suggestions and recommendations are contained in the report
of the Commissioner of patents which are well entitled to the
consideration of Congress.

In the Territory of Utah the law of the United States passed for the
Suppression of polygamy has been energetically and faithfully executed
during the past year, with measurably good results. A number of
convictions have been secured for unlawful cohabitation, and in some
cases pleas of guilty have been entered and a slight punishment imposed,
upon a promise by the accused that they would not again offend against
the law, nor advise, counsel, aid, or abet in any way its violation by
others.

The Utah commissioners express the opinion, based upon such information
as they are able to obtain, that but few polygamous marriages have taken
place in the Territory during the last year. They further report that
while there can not be found upon the registration lists of voters the
name of a man actually guilty of polygamy, and while none of that class
are holding office, yet at the last election in the Territory all the
officers elected, except in one county, were men who, though not
actually living in the practice of polygamy, subscribe to the doctrine
of polygamous marriages as a divine revelation and a law unto all higher
and more binding upon the conscience than any human law, local or
national. Thus is the strange spectacle presented of a community
protected by a republican form of government, to which they owe
allegiance, sustaining by their suffrages a principle and a belief which
set at naught that obligation of absolute obedience to the law of the
land which lies at the foundation of republican institutions.

The strength, the perpetuity, and the destiny of the nation rest upon
our homes, established by the law of God, guarded by parental care,
regulated by parental authority, and sanctified by parental love.

These are not the homes of polygamy.

The mothers of our land, who rule the nation as they mold the characters
and guide the actions of their sons, live according to God's holy
ordinances, and each, secure and happy in the exclusive love of the
father of her children, sheds the warm light of true womanhood,
unperverted and unpolluted, upon all within her pure and wholesome
family circle.

These are not the cheerless, crushed, and unwomanly mothers of polygamy.

The fathers of our families are the best citizens of the Republic. Wife
and children are the sources of patriotism, and conjugal and parental
affection beget devotion to the country. The man who, undefiled with
plural marriage, is surrounded in his single home with his wife and
children has a stake in the country which inspires him with respect for
its laws and courage for its defense.

These are not the fathers of polygamous families.

There is no feature of this practice or the system which sanctions it
which is not opposed to all that is of value in our institutions.

There should be no relaxation in the firm but just execution of the law
now in operation, and I should be glad to approve such further discreet
legislation as will rid the country of this blot upon its fair fame.

Since the people upholding polygamy in our Territories are reenforced by
immigration from other lands, I recommend that a law be passed to
prevent the importation of Mormons into the country.

The agricultural interest of the country demands just recognition and
liberal encouragement. It sustains with certainty and unfailing strength
our nation's prosperity by the products of its steady toil, and bears
its full share of the burden of taxation without complaint. Our
agriculturists have but slight personal representation in the councils
of the nation, and are generally content with the humbler duties of
citizenship and willing to trust to the bounty of nature for a reward of
their labor. But the magnitude and value of this industry are
appreciated when the statement is made that of our total annual exports
more than three-fourths are the products of agriculture, and of our
total population nearly one-half are exclusively engaged in that
occupation.

The Department of Agriculture was created for the purpose of acquiring
and diffusing among the people useful information respecting the
subjects it has in charge, and aiding in the cause of intelligent and
progressive farming, by the collection of statistics, by testing the
value and usefulness of new seeds and plants, and distributing such as
are found desirable among agriculturists. This and other powers and
duties with which this Department is invested are of the utmost
importance, and if wisely exercised must be of great benefit to the
country. The aim of our beneficent Government is the improvement of the
people in every station and the amelioration of their condition. Surely
our agriculturists should not be neglected. The instrumentality
established in aid of the farmers of the land should not only be well
equipped for the accomplishment of its purpose, but those for whose
benefit it has been adopted should be encouraged to avail themselves
fully of its advantages.

The prohibition of the importation into several countries of certain of
our animals and their products, based upon the suspicion that health is
endangered in their use and consumption, suggests the importance of such
precautions for the protection of our stock of all kinds against disease
as will disarm suspicion of danger and cause the removal of such an
injurious prohibition.

If the laws now in operation are insufficient to accomplish this
protection, I recommend their amendment to meet the necessities of the
situation; and I commend to the consideration of Congress the
suggestions contained in the report of the Commissioner of Agriculture
calculated to increase the value and efficiency of this Department.

The report of the Civil Service Commission, which will be submitted,
contains an account of the manner in which the civil-service law has
been executed during the last year and much valuable information on this
important subject.

I am inclined to think that there is no sentiment more general in the
minds of the people of our country than a conviction of the correctness
of the principle upon which the law enforcing civil-service reform is
based. In its present condition the law regulates only a part of the
subordinate public positions throughout the country. It applies the test
of fitness to applicants for these places by means of a competitive
examination, and gives large discretion to the Commissioners as to the
character of the examination and many other matters connected with its
execution. Thus the rules and regulations adopted by the Commission have
much to do with the practical usefulness of the statute and with the
results of its application.

The people may well trust the Commission to execute the law with perfect
fairness and with as little irritation as is possible. But of course no
relaxation of the principle which underlies it and no weakening of the
safeguards which surround it can be expected. Experience in its
administration will probably suggest amendment of the methods of its
execution, but I venture to hope that we shall never again be remitted
to the system which distributes public positions purely as rewards for
partisan service. Doubts may well be entertained whether our Government
could survive the strain of a continuance of this system, which upon
every change of Administration inspires an immense army of claimants for
office to lay siege to the patronage of Government, engrossing the time
of public officers with their importunities, spreading abroad the
contagion of their disappointment, and filling the air with the tumult
of their discontent.

The allurements of an immense number of offices and places exhibited to
the voters of the land, and the promise of their bestowal in recognition
of partisan activity; debauch the suffrage and rob political action of
its thoughtful and deliberative character. The evil would increase with
the multiplication of offices consequent upon our extension, and the
mania for office holding, growing from its indulgence, would pervade our
population so generally that patriotic purpose, the support of
principle, the desire for the public good, and solicitude for the
nation's welfare would be nearly banished from the activity of our party
contests and cause them to degenerate into ignoble, selfish, and
disgraceful struggles for the possession of office and public place.

Civil-service reform enforced by law came none too soon to check the
progress of demoralization.

One of its effects, not enough regarded, is the freedom it brings to the
political action of those conservative and sober men who, in fear of the
confusion and risk attending an arbitrary and sudden change in all the
public offices with a change of party rule, cast their ballots against
such a chance.

Parties seem to be necessary, and will long continue to exist; nor can
it be now denied that there are legitimate advantages, not disconnected
with office holding, which follow party supremacy. While partisanship
continues bitter and pronounced and supplies so much of motive to
sentiment and action, it is not fair to hold public officials in charge
of important trusts responsible for the best results in the performance
of their duties, and yet insist that they shall rely in confidential and
important places upon the work of those not only opposed to them in
political affiliation, but so steeped in partisan prejudice and rancor
that they have no loyalty to their chiefs and no desire for their
success. Civil-service reform does not exact this, nor does it require
that those in subordinate positions who fail in yielding their best
service or who are incompetent should be retained simply because they
are in place. The whining of a clerk discharged for indolence or
incompetency, who, though he gained his place by the worst possible
operation of the spoils system, suddenly discovers that he is entitled
to protection under the sanction of civil-service reform, represents an
idea no less absurd than the clamor of the applicant who claims the
vacant position as his compensation for the most questionable party
work.

The civil-service law does not prevent the discharge of the indolent or
incompetent clerk, but it does prevent supplying his place with the
unfit party worker. Thus in both these phases is seen benefit to the
public service. And the people who desire good government, having
secured this statute, will not relinquish its benefits without protest.
Nor are they unmindful of the fact that its full advantages can only be
gained through the complete good faith of those having its execution in
charge. And this they will insist upon.

I recommend that the salaries of the Civil Service Commissioners be
increased to a sum more nearly commensurate to their important duties.

It is a source of considerable and not unnatural discontent that no
adequate provision has yet been made for accommodating the principal
library of the Government. Of the vast collection of books and pamphlets
gathered at the Capitol, numbering some 700,000, exclusive of
manuscripts, maps, and the products of the graphic arts, also of great
volume and value, only about 300,000 volumes, or less than half the
collection, are provided with shelf room. The others, which are
increasing at the rate of from twenty-five to thirty thousand volumes a
year, are not only inaccessible to the public, but are subject to
serious damage and deterioration from other causes in their present
situation.

A consideration of the facts that the library of the Capitol has twice
been destroyed or damaged by fire, its daily increasing value, and its
importance as a place of deposit of books under the law relating to
copyright makes manifest the necessity of prompt action to insure its
proper accommodation and protection.

My attention has been called to a controversy which has arisen from the
condition of the law relating to railroad facilities in the city of
Washington, which has involved the Commissioners of the District in much
annoyance and trouble. I hope this difficulty will be promptly settled
by appropriate legislation.

The Commissioners represent that enough of the revenues of the District
are now on deposit in the Treasury of the United States to repay the sum
advanced by the Government for sewer improvements under the act of June
30, 1884. They desire now an advance of the share which ultimately
should be borne by the District of the cost of extensive improvements to
the streets of the city. The total expense of these contemplated
improvements is estimated at $1,000,000, and they are of the opinion
that a considerable sum could be saved if they had all the money in
hand, so that contracts for the whole work could be made at the same
time. They express confidence that if the advance asked for should be
made the Government would be reimbursed the same within a reasonable
time. I have no doubt that these improvements could be made much cheaper
if undertaken together and prosecuted according to a general plan.

The license law now in force within the District is deficient and
uncertain in some of its provisions and ought to be amended. The
Commissioners urge, with good reason, the necessity of providing a
building for the use of the District government which shall better
secure the safety and preservation of its valuable books and records.

The present condition of the law relating to the succession to the
Presidency in the event of the death, disability, or removal of both the
President and Vice-President is such as to require immediate amendment.
This subject has repeatedly been considered by Congress, but no result
has been reached. The recent lamentable death of the Vice-President, and
vacancies at the same time in all other offices the incumbents of which
might immediately exercise the functions of the presidential office, has
caused public anxiety and a just demand that a recurrence of such a
condition of affairs should not be permitted.

In conclusion I commend to the wise care and thoughtful attention of
Congress the needs, the welfare, and the aspirations of an intelligent
and generous nation. To subordinate these to the narrow advantages of
partisanship or the accomplishment of selfish aims is to violate the
people's trust and betray the people's interests; but an individual
sense of responsibility on the part of each of us and a stern
determination to perform our duty well must give us place among those
who have added in their day and generation to the glory and prosperity
of our beloved land.

***

State of the Union Address
Grover Cleveland
December 6, 1886

To the Congress of the United States:

In discharge of a constitutional duty, and following a well-established
precedent in the Executive office, I herewith transmit to the Congress
at its reassembling certain information concerning the state of the
Union, together with such recommendations for legislative consideration
as appear necessary and expedient.

Our Government has consistently maintained its relations of friendship
toward all other powers and of neighborly interest toward those whose
possessions are contiguous to our own. Few questions have arisen during
the past year with other governments, and none of those are beyond the
reach of settlement in friendly counsel.

We are as yet without provision for the settlement of claims of citizens
of the United States against Chile for injustice during the late war
with Peru and Bolivia. The mixed commissions organized under claims
conventions concluded by the Chilean Government with certain European
States have developed an amount of friction which we trust can be
avoided in the convention which our representative at Santiago is
authorized to negotiate.

The cruel treatment of inoffensive Chinese has, I regret to say, been
repeated in some of the far Western States and Territories, and acts of
violence against those people, beyond the power of the local constituted
authorities to prevent and difficult to punish, are reported even in
distant Alaska. Much of this violence can be traced to race prejudice
and competition of labor, which can not, however, justify the oppression
of strangers whose safety is guaranteed by our treaty with China equally
with the most favored nations.

In opening our vast domain to alien elements the purpose of our
lawgivers was to invite assimilation, and not to provide an arena for
endless antagonism. The paramount duty of maintaining public order and
defending the interests of our own people may require the adoption of
measures of restriction, but they should not tolerate the oppression of
individuals of a special race. I am not without assurance that the
Government of China, whose friendly disposition toward us I am most
happy to recognize, will meet us halfway in devising a comprehensive
remedy by which an effective limitation of Chinese emigration, joined to
protection of those Chinese subjects who remain in this country, may be
secured.

Legislation is needed to execute the provisions of our Chinese
convention of 1880 touching the opium traffic.

While the good will of the Colombian Government toward our country is
manifest, the situation of American interests on the Isthmus of Panama
has at times excited concern and invited friendly action looking to the
performance of the engagements of the two nations concerning the
territory embraced in the interoceanic transit. With the subsidence of
the Isthmian disturbances and the erection of the State of Panama into a
federal district under the direct government of the constitutional
administration at Bogota, a new order of things has been inaugurated,
which, although as yet somewhat experimental and affording scope for
arbitrary exercise of power by the delegates of the national authority,
promises much improvement.

The sympathy between the people of the United States and France, born
during our colonial struggle for independence and continuing today, has
received a fresh impulse in the successful completion and dedication of
the colossal statue of "Liberty Enlightening the World" in New York
Harbor--the gift of Frenchmen to Americans.

A convention between the United States and certain other powers for the
protection of submarine cables was signed at Paris on March 14, 1884,
and has been duly ratified and proclaimed by this Government. By
agreement between the high contracting parties this convention is to go
into effect on the 1st of January next, but the legislation required for
its execution in the United States has not yet been adopted. I earnestly
recommend its enactment.

Cases have continued to occur in Germany giving rise to much
correspondence in relation to the privilege of sojourn of our
naturalized citizens of German origin revisiting the land of their
birth, yet I am happy to state that our relations with that country have
lost none of their accustomed cordiality.

The claims for interest upon the amount of tonnage dues illegally
exacted from certain German steamship lines were favorably reported in
both Houses of Congress at the last session, and I trust will receive
final and favorable action at an early day.

The recommendations contained in my last annual message in relation to a
mode of settlement of the fishery rights in the waters of British North
America, so long a subject of anxious difference between the United
States and Great Britain, was met by an adverse vote of the Senate on
April 13 last, and thereupon negotiations were instituted to obtain an
agreement with Her Britannic Majesty's Government for the promulgation
of such joint interpretation and definition of the article of the
convention of 1818 relating to the territorial waters and inshore
fisheries of the British Provinces as should secure the Canadian rights
from encroachment by the United States fishermen and at the same time
insure the enjoyment by the latter of the privileges guaranteed to them
by such convention.

The questions involved are of long standing, of grave consequence, and
from time to time for nearly three-quarters of a century have given rise
to earnest international discussions, not unaccompanied by irritation.

Temporary arrangements by treaties have served to allay friction, which,
however, has revived as each treaty was terminated. The last
arrangement, under the treaty of 1871, was abrogated after due notice by
the United States on June 30, 1885, but I was enabled to obtain for our
fishermen for the remainder of that season enjoyment of the full
privileges accorded by the terminated treaty.

The joint high commission by whom the treaty had been negotiated,
although invested with plenary power to make a permanent settlement,
were content with a temporary arrangement, after the termination of
which the question was relegated to the stipulations of the treaty of
1818, as to the first article of which no construction satisfactory to
both countries has ever been agreed upon.

The progress of civilization and growth of population in the British
Provinces to which the fisheries in question are contiguous and the
expansion of commercial intercourse between them and the United States
present to-day a condition of affairs scarcely realizable at the date of
the negotiations of 1818.

New and vast interests have been brought into existence; modes of
intercourse between the respective countries have been invented and
multiplied; the methods of conducting the fisheries have been wholly
changed; and all this is necessarily entitled to candid and careful
consideration in the adjustment of the terms and conditions of
intercourse and commerce between the United States and their neighbors
along a frontier of over 3,500 miles.

This propinquity, community of language and occupation, and similarity
of political and social institutions indicate the practicability and
obvious wisdom of maintaining mutually beneficial and friendly
relations.

Whilst I am unfeignedly desirous that such relations should exist
between us and the inhabitants of Canada, yet the action of their
officials during the past season toward our fishermen has been such as
to seriously threaten their continuance.

Although disappointed in my efforts to secure a satisfactory settlement
of the fishery question, negotiations are still pending, with reasonable
hope that before the close of the present session of Congress
announcement may be made that an acceptable conclusion has been reached.

As at an early day there may be laid before Congress the correspondence
of the Department of State in relation to this important subject, so
that the history of the past fishing season may be fully disclosed and
the action and the attitude of the Administration clearly comprehended,
a more extended reference is not deemed necessary in this communication.

The recommendation submitted last year that provision be made for a
preliminary reconnoissance of the conventional boundary line between
Alaska and British Columbia is renewed.

I express my unhesitating conviction that the intimacy of our relations
with Hawaii should be emphasized. As a result of the reciprocity treaty
of 1875, those islands, on the highway of Oriental and Australasian
traffic, are virtually an outpost of American commerce and a
stepping-stone to the growing trade of the Pacific. The Polynesian
Island groups have been so absorbed by other and more powerful
governments that the Hawaiian Islands are left almost alone in the
enjoyment of their autonomy, which it is important for us should be
preserved. Our treaty is now terminable on one year's notice, but
propositions to abrogate it would be, in my judgment, most ill advised.
The paramount influence we have there acquired, once relinquished, could
only with difficulty be regained, and a valuable ground of vantage for
ourselves might be converted into a stronghold for our commercial
competitors. I earnestly recommend that the existing treaty stipulations
be extended for a further term of seven years. A recently signed treaty
to this end is now before the Senate.

The importance of telegraphic communication between those islands and
the United States should not be overlooked.

The question of a general revision of the treaties of Japan is again
under discussion at Tokyo. As the first to open relations with that
Empire, and as the nation in most direct commercial relations with
Japan, the United States have lost no opportunity to testify their
consistent friendship by supporting the just claims of Japan to autonomy
and independence among nations.

A treaty of extradition between the United States and Japan, the first
concluded by that Empire, has been lately proclaimed.

The weakness of Liberia and the difficulty of maintaining effective
sovereignty over its outlying districts have exposed that Republic to
encroachment. It can not be forgotten that this distant community is an
offshoot of our own system, owing its origin to the associated
benevolence of American citizens, whose praiseworthy efforts to create a
nucleus of civilization in the Dark Continent have commanded respect and
sympathy everywhere, especially in this country. Although a formal
protectorate over Liberia is contrary to our traditional policy, the
moral right and duty of the United States to assist in all proper ways
in the maintenance of its integrity is obvious, and has been
consistently announced during nearly half a century. I recommend that in
the reorganization of our Navy a small vessel, no longer found adequate
to our needs, be presented to Liberia, to be employed by it in the
protection of its coastwise revenues.

The encouraging development of beneficial and intimate relations between
the United States and Mexico, which has been so marked within the past
few years, is at once the occasion of congratulation and of friendly
solicitude. I urgently renew my former representation of the need or
speedy legislation by Congress to carry into effect the reciprocity
commercial convention of January 20, 1883.

Our commercial treaty of 1831 with Mexico was terminated, according to
its provisions, in 1881, upon notification given by Mexico in pursuance
of her announced policy of recasting all her commercial treaties. Mexico
has since concluded with several foreign governments new treaties of
commerce and navigation, defining alien rights of trade, property, and
residence, treatment of shipping, consular privileges, and the like. Our
yet unexecuted reciprocity convention of 1883 covers none of these
points, the settlement of which is so necessary to good relationship. I
propose to initiate with Mexico negotiations for a new and enlarged
treaty of commerce and navigation.

In compliance with a resolution of the Senate, I communicated to that
body on August 2 last, and also to the House of Representatives, the
correspondence in the case of A. K. Cutting, an American citizen, then
imprisoned in Mexico, charged with the commission of a penal offense in
Texas, of which a Mexican citizen was the object.

After demand had been made for his release the charge against him was
amended so as to include a violation of Mexican law within Mexican
territory.

This joinder of alleged offenses, one within and the other exterior to
Mexico, induced me to order a special investigation of the case, pending
which Mr. Cutting was released.

The incident has, however, disclosed a claim of jurisdiction by Mexico
novel in our history, whereby any offense committed anywhere by a
foreigner, penal in the place of its commission, and of which a Mexican
is the object, may, if the offender be found in Mexico, be there tried
and punished in conformity with Mexican laws.

This jurisdiction was sustained by the courts of Mexico in the Cutting
case, and approved by the executive branch of that Government, upon the
authority of a Mexican statute. The appellate court in releasing Mr.
Cutting decided that the abandonment of the complaint by the Mexican
citizen aggrieved by the alleged crime (a libelous publication) removed
the basis of further prosecution, and also declared justice to have been
satisfied by the enforcement of a small part of the original sentence.

The admission of such a pretension would be attended with serious
results, invasive of the jurisdiction of this Government and highly
dangerous to our citizens in foreign lands. Therefore I have denied it
and protested against its attempted exercise as unwarranted by the
principles of law and international usages.

A sovereign has jurisdiction of offenses which take effect within his
territory, although concocted or commenced outside of it; but the right
is denied of any foreign sovereign to punish a citizen of the United
States for an offense consummated on our soil in violation of our laws,
even though the offense be against a subject or citizen of such
sovereign. The Mexican statute in question makes the claim broadly, and
the principle, if conceded, would create a dual responsibility in the
citizen and lead to inextricable confusion, destructive of that
certainty in the law which is an essential of liberty.

When citizens of the United States voluntarily go into a foreign
country, they must abide by the laws there in force, and will not be
protected by their own Government from the consequences of an offense
against those laws committed in such foreign country; but watchful care
and interest of this Government over its citizens are not relinquished
because they have gone abroad, and if charged with crime committed in
the foreign land a fair and open trial, conducted with decent regard for
justice and humanity, will be demanded for them. With less than that
this Government will not be content when the life or liberty of its
citizens is at stake.

Whatever the degree to which extraterritorial criminal jurisdiction may
have been formerly allowed by consent and reciprocal agreement among
certain of the European States, no such doctrine or practice was ever
known to the laws of this country or of that from which our institutions
have mainly been derived.

In the case of Mexico there are reasons especially strong for perfect
harmony in the mutual exercise of jurisdiction. Nature has made us
irrevocably neighbors, and wisdom and kind feeling should make us
friends.

The overflow of capital and enterprise from the United States is a
potent factor in assisting the development of the resources of Mexico
and in building up the prosperity of both countries.

To assist this good work all grounds of apprehension for the security of
person and property should be removed; and I trust that in the interests
of good neighborhood the statute referred to will be so modified as to
eliminate the present possibilities of danger to the peace of the two
countries.

The Government of the Netherlands has exhibited concern in relation to
certain features of our tariff laws, which are supposed by them to be
aimed at a class of tobacco produced in the Dutch East Indies. Comment
would seem unnecessary upon the unwisdom of legislation appearing to
have a special national discrimination for its object, which, although
unintentional, may give rise to injurious retaliation.

The establishment, less than four years ago, of a legation at Teheran is
bearing fruit in the interest exhibited by the Shah's Government in the
industrial activity of the United States and the opportunities of
beneficial interchanges.

Stable government is now happily restored in Peru by the election of a
constitutional president, and a period of rehabilitation is entered
upon; but the recovery is necessarily slow from the exhaustion caused by
the late war and civil disturbances. A convention to adjust by
arbitration claims of our citizens has been proposed and is under
consideration.

The naval officer who bore to Siberia the testimonials bestowed by
Congress in recognition of the aid given to the Jeannette survivors has
successfully accomplished his mission. His interesting report will be
submitted. It is pleasant to know that this mark of appreciation has
been welcomed by the Russian Government and people as befits the
traditional friendship of the two countries.

Civil perturbations in the Samoan Islands have during the past few years
been a source of considerable embarrassment to the three
Governments-Germany, Great Britain, and the United States--whose
relations and extraterritorial rights in that important group are
guaranteed by treaties. The weakness of the native administration and
the conflict of opposing interests in the islands have led King Malietoa
to seek alliance or protection in some one quarter, regardless of the
distinct engagements whereby no one of the three treaty powers may
acquire any paramount or exclusive interest. In May last Malietoa
offered to place Samoa under the protection of the United States, and
the late consul, without authority, assumed to grant it. The proceeding
was promptly disavowed and the overzealous official recalled. Special
agents of the three Governments have been deputed to examine the
situation in the islands. With a change in the representation of all
three powers and a harmonious understanding between them, the peace,
prosperity, autonomous administration, and neutrality of Samoa can
hardly fail to be secured.

It appearing that the Government of Spain did not extend to the flag of
the United States in the Antilles the full measure of reciprocity
requisite under our statute for the continuance of the suspension of
discriminations against the Spanish flag in our ports, I was constrained
in October last to rescind my predecessor's proclamation of February 14,
1884, permitting such suspension. An arrangement was, however, speedily
reached, and upon notification from the Government of Spain that all
differential treatment of our vessels and their cargoes, from the United
States or from any foreign country, had been completely and absolutely
relinquished, I availed myself of the discretion conferred by law and
issued on the 27th of October my proclamation declaring reciprocal
suspension in the United States. It is most gratifying to bear testimony
to the earnest spirit in which the Government of the Queen Regent has
met our efforts to avert the initiation of commercial discriminations
and reprisals, which are ever disastrous to the material interests and
the political good will of the countries they may affect.

The profitable development of the large commercial exchanges between the
United States and the Spanish Antilles is naturally an object of
solicitude. Lying close at our doors, and finding here their main
markets of supply and demand, the welfare of Cuba and Puerto Rico and
their production and trade are scarcely less important to us than to
Spain. Their commercial and financial movements are so naturally a part
of our system that no obstacle to fuller and freer intercourse should be
permitted to exist. The standing instructions of our representatives at
Madrid and Havana have for years been to leave no effort unessayed to
further these ends, and at no time has the equal good desire of Spain
been more hopefully manifested than now.

The Government of Spain, by removing the consular tonnage fees on
cargoes shipped to the Antilles and by reducing passport fees, has shown
its recognition of the needs of less trammeled intercourse.

An effort has been made during the past year to remove the hindrances to
the proclamation of the treaty of naturalization with the Sublime Porte,
signed in 1874, which has remained inoperative owing to a disagreement
of interpretation of the clauses relative to the effects of the return
to and sojourn of a naturalized citizen in the land of origin. I trust
soon to be able to announce a favorable settlement of the differences as
to this interpretation.

It has been highly satisfactory to note the improved treatment of
American missionaries in Turkey, as has been attested by their
acknowledgments to our late minister to that Government of his
successful exertions in their behalf.

The exchange of ratifications of the convention of December 5, 1885,
with Venezuela, for the reopening of the awards of the Caracas
Commission under the claims convention of 1866, has not yet been
effected, owing to the delay of the Executive of that Republic in
ratifying the measure. I trust that this postponement will be brief; but
should it much longer continue, the delay may well be regarded as a
rescission of the compact and a failure on the part of Venezuela to
complete an arrangement so persistently sought by her during many years
and assented to by this Government in a spirit of international
fairness, although to the detriment of holders of bona fide awards of
the impugned commission.

I renew the recommendation of my last annual message that existing
legislation concerning citizenship and naturalization be revised. We
have treaties with many states providing for the renunciation of
citizenship by naturalized aliens, but no statute is found to give
effect to such engagements, nor any which provides a needed central
bureau for the registration of naturalized citizens.

Experience suggests that our statutes regulating extradition might be
advantageously amended by a provision for the transit across our
territory, now a convenient thoroughfare of travel from one foreign
country to another, of fugitives surrendered by a foreign government to
a third state. Such provisions are not unusual in the legislation of
other countries, and tend to prevent the miscarriage of justice. It is
also desirable, in order to remove present uncertainties, that authority
should be conferred on the Secretary of State to issue a certificate, in
case of an arrest for the purpose of extradition, to the officer before
whom the proceeding is pending, showing that a requisition for the
surrender of the person charged has been duly made. Such a certificate,
if required to be received before the prisoner's examination, would
prevent a long and expensive judicial inquiry into a charge which the
foreign government might not desire to press. I also recommend that
express provision be made for the immediate discharge from custody of
persons committed for extradition where the President is of opinion that
surrender should not be made.

The drift of sentiment in civilized communities toward full recognition
of the rights of property in the creations of the human intellect has
brought about the adoption by many important nations of an international
copyright convention, which was signed at Berne on the 18th of
September, 1885.

Inasmuch as the Constitution gives to the Congress the power "to promote
the progress of science and useful arts by securing for limited times to
authors and inventors the exclusive right to their respective writings
and discoveries," this Government did not feel warranted in becoming a
signatory pending the action of Congress upon measures of international
copyright now before it; but the right of adhesion to the Berne
convention hereafter has been reserved. I trust the subject will receive
at your hands the attention it deserves, and that the just claims of
authors, so urgently pressed, will be duly heeded.

Representations continue to be made to me of the injurious effect upon
American artists studying abroad and having free access to the art
collections of foreign countries of maintaining a discriminating duty
against the introduction of the works of their brother artists of other
countries, and I am induced to repeat my recommendation for the
abolition of that tax.

Pursuant to a provision of the diplomatic and consular appropriation act
approved July 1, 1886, the estimates submitted by the Secretary of State
for the maintenance of the consular service have been recast on the
basis of salaries for all officers to whom such allowance is deemed
advisable. Advantage has been taken of this to redistribute the salaries
of the offices now appropriated for, in accordance with the work
performed, the importance of the representative duties of the incumbent,
and the cost of living at each post. The last consideration has been too
often lost sight of in the allowances heretofore made. The compensation
which may suffice for the decent maintenance of a worthy and capable
officer in a position of onerous and representative trust at a post
readily accessible, and where the necessaries of life are abundant and
cheap, may prove an inadequate pittance in distant lands, where the
better part of a year's pay is consumed in reaching the post of duty,
and where the comforts of ordinary civilized existence can only be
obtained with difficulty and at exorbitant cost. I trust that in
considering the submitted schedules no mistaken theory of economy will
perpetuate a system which in the past has virtually closed to deserving
talent many offices where capacity and attainments of a high order are
indispensable, and in not a few instances has brought discredit on our
national character and entailed embarrassment and even suffering on
those deputed to uphold our dignity and interests abroad.

In connection with this subject I earnestly reiterate the practical
necessity of supplying some mode of trustworthy inspection and report of
the manner in which the consulates are conducted. In the absence of such
reliable information efficiency can scarcely be rewarded or its opposite
corrected.

Increasing competition in trade has directed attention to the value of
the consular reports printed by the Department of State, and the efforts
of the Government to extend the practical usefulness of these reports
have created a wider demand for them at home and a spirit of emulation
abroad. Constituting a record at the changes occurring in trade and of
the progress of the arts and invention in foreign countries, they are
much sought for by all interested in the subjects which they embrace.

The report of the Secretary of the Treasury exhibits in detail the
condition of the public finances and of the several branches of the
Government related to his Department. I especially direct the attention
of the Congress to the recommendations contained in this and the last
preceding report of the Secretary touching the simplification and
amendment of the laws relating to the collection of our revenues, and in
the interest of economy and justice to the Government I hope they may be
adopted by appropriate legislation.

The ordinary receipts of the Government for the fiscal year ended June
30, 1886, were $336,439,727.06. Of this amount $192,905,023.41 was
received from customs and $116,805,936.48 from internal revenue. The
total receipts, as here stated, were $13,749,020.68 greater than for the
previous year, but the increase from customs was $11,434,084.10 and from
internal revenue $4,407,210.94, making a gain in these items for the
last year of $15,841,295.04, a falling off in other resources reducing
the total increase to the smaller amount mentioned.

The expense at the different custom-houses of collecting this increased
customs revenue was less than the expense attending the collection of
such revenue for the preceding year by $490,608, and the increased
receipts of internal revenue were collected at a cost to the
Internal-Revenue Bureau $155,944.99 less than the expense of such
collection for the previous year.

The total ordinary expenses of the Government for the fiscal year ended
June 30, 1886, were $242,483,138.50, being less by $17,788,797 than such
expenditures for the year preceding, and leaving a surplus in the
Treasury at the close of the last fiscal year of $93,956,588.56, as
against $63,463,771.27 at the close of the previous year, being an
increase in such surplus of $30,492,817.29.

The expenditures are compared with those of the preceding fiscal year
and classified as follows:

For the current year to end June 30, 1887, the ascertained receipts up
to October 1, 1886, with such receipts estimated for the remainder of
the year, amount to $356,000,000.

The expenditures ascertained and estimated for the same period are
$266,000,000, indicating an anticipated surplus at the close of the year
of $90,000,000.

The total value of the exports from the United States to foreign
countries during the fiscal year is stated and compared with the
preceding year as follows:

The value of some of our leading exports during the last fiscal year, as
compared with the value of the same for the year immediately preceding,
is here given, and furnishes information both interesting and
suggestive:

Our imports during the last fiscal year, as compared with the previous
year, were as follows:

In my last annual message to the Congress attention was directed to the
fact that the revenues of the Government exceeded its actual needs, and
it was suggested that legislative action should be taken to relieve the
people from the unnecessary burden of taxation thus made apparent.

In view of the pressing importance of the subject I deem it my duty to
again urge its consideration.

The income of the Government, by its increased volume and through
economies in its collection, is now more than ever in excess of public
necessities. The application of the surplus to the payment of such
portion of the public debt as is now at our option subject to
extinguishment, if continued at the rate which has lately prevailed,
would retire that class of indebtedness within less than one year from
this date. Thus a continuation of our present revenue system would soon
result in the receipt of an annual income much greater than necessary to
meet Government expenses, with no indebtedness upon which it could be
applied. We should then be confronted with a vast quantity of money, the
circulating medium of the people, hoarded in the Treasury when it should
be in their hands, or we should be drawn into wasteful public
extravagance, with all the corrupting national demoralization which
follows in its train.

But it is not the simple existence of this surplus and its threatened
attendant evils which furnish the strongest argument against our present
scale of Federal taxation. Its worst phase is the exaction of such a
surplus through a perversion of the relations between the people and
their Government and a dangerous departure from the rules which limit
the right of Federal taxation.

Good government, and especially the government of which every American
citizen boasts, has for its objects the protection of every person
within its care in the greatest liberty consistent with the good order
of society and his perfect security in the enjoyment of his earnings
with the least possible diminution for public needs. When more of the
people's substance is exacted through the form of taxation than is
necessary to meet the just obligations of the Government and the expense
of its economical administration, such exaction becomes ruthless
extortion and a violation of the fundamental principles of a free
government.

The indirect manner in which these exactions are made has a tendency to
conceal their true character and their extent. But we have arrived at a
stage of superfluous revenue which has aroused the people to a
realization of the fact that the amount raised professedly for the
support of the Government is paid by them as absolutely if added to the
price of the things which supply their daily wants as if it was paid at
fixed periods into the hand of the tax gatherer.

Those who toil for daily wages are beginning to understand that capital,
though sometimes vaunting its importance and clamoring for the
protection and favor of the Government, is dull and sluggish till,
touched by the magical hand of labor, it springs into activity,
furnishing an occasion for Federal taxation and gaining the value which
enables it to bear its burden. And the laboring man is thoughtfully
inquiring whether in these circumstances, and considering the tribute he
constantly pays into the public Treasury as he supplies his daily wants,
he receives his fair share of advantages.

There is also a suspicion abroad that the surplus of our revenues
indicates abnormal and exceptional business profits, which, under the
system which produces such surplus, increase without corresponding
benefit to the people at large the vast accumulations of a few among our
citizens, whose fortunes, rivaling the wealth of the most favored in
antidemocratic nations, are not the natural growth of a steady, plain,
and industrious republic.

Our farmers, too, and those engaged directly and indirectly in supplying
the products of agriculture, see that day by day, and as often as the
daily wants of their households recur, they are forced to pay excessive
and needless taxation, while their products struggle in foreign markets
with the competition of nations, which, by allowing a freer exchange of
productions than we permit, enable their people to sell for prices which
distress the American farmer.

As every patriotic citizen rejoices in the constantly increasing pride
of our people in American citizenship and in the glory of our national
achievements and progress, a sentiment prevails that the leading strings
useful to a nation in its infancy may well be to a great extent
discarded in the present stage of American ingenuity, courage, and
fearless self-reliance; and for the privilege of indulging this
sentiment with true American enthusiasm our citizens are quite willing
to forego an idle surplus in the public Treasury.

And all the people know that the average rate of Federal taxation upon
imports is to-day, in time of peace, but little less, while upon some
articles of necessary consumption it is actually more, than was imposed
by the grievous burden willingly borne at a time when the Government
needed millions to maintain by war the safety and integrity of the
Union.

It has been the policy of the Government to collect the principal part
of its revenues by a tax upon imports, and no change in this policy is
desirable. But the present condition of affairs constrains our people to
demand that by a revision of our revenue laws the receipts of the
Government shall be reduced to the necessary expense of its economical
administration; and this demand should be recognized and obeyed by the
people's representatives in the legislative branch of the Government.

In readjusting the burdens of Federal taxation a sound public policy
requires that such of our citizens as have built up large and important
industries under present conditions should not be suddenly and to their
injury deprived of advantages to which they have adapted their business;
but if the public good requires it they should be content with such
consideration as shall deal fairly and cautiously with their interests,
while the just demand of the people for relief from needless taxation is
honestly answered.

A reasonable and timely submission to such a demand should certainly be
possible without disastrous shock to any interest; and a cheerful
concession sometimes averts abrupt and heedless action, often the
outgrowth of impatience and delayed justice.

Due regard should be also accorded in any proposed readjustment to the
interests of American labor so far as they are involved. We congratulate
ourselves that there is among us no laboring class fixed within
unyielding bounds and doomed under all conditions to the inexorable fate
of daily toil. We recognize in labor a chief factor in the wealth of the
Republic, and we treat those who have it in their keeping as citizens
entitled to the most careful regard and thoughtful attention. This
regard and attention should be awarded them, not only because labor is
the capital of our workingmen, justly entitled to its share of
Government favor, but for the further and not less important reason that
the laboring man, surrounded by his family in his humble home, as a
consumer is vitally interested in all that cheapens the cost of living
and enables him to bring within his domestic circle additional comforts
and advantages.

This relation of the workingman to the revenue laws of the country and
the manner in which it palpably influences the question of wages should
not be forgotten in the justifiable prominence given to the proper
maintenance of the supply and protection of well-paid labor. And these
considerations suggest such an arrangement of Government revenues as
shall reduce the expense of living, while it does not curtail the
opportunity for work nor reduce the compensation of American labor and
injuriously affect its condition and the dignified place it holds in the
estimation of our people.

But our farmers and agriculturists--those who from the soil produce the
things consumed by all--are perhaps more directly and plainly concerned
than any other of our citizens in a just and careful system of Federal
taxation. Those actually engaged in and more remotely connected with
this kind of work number nearly one-half of our population. None labor
harder or more continuously than they. No enactments limit their hours
of toil and no interposition of the Government enhances to any great
extent the value of their products. And yet for many of the necessaries
and comforts of life, which the most scrupulous economy enables them to
bring into their homes, and for their implements of husbandry, they are
obliged to pay a price largely increased by an unnatural profit, which
by the action of the Government is given to the more favored
manufacturer.

I recommend that, keeping in view all these considerations, the
increasing and unnecessary surplus of national income annually
accumulating be released to the people by an amendment to our revenue
laws which shall cheapen the price of the necessaries of life and give
freer entrance to such imported materials as by American labor may be
manufactured into marketable commodities.

Nothing can be accomplished, however, in the direction of this
much-needed reform unless the subject is approached in a patriotic
spirit of devotion to the interests of the entire country and with a
willingness to yield something for the public good.

The sum paid upon the public debt during the fiscal year ended June 30,
1886, was $44,551,043.36.

During the twelve months ended October 31,1886, 3 per cent bonds were
called for redemption amounting to $127,283,100, of which $80,643,200
was so called to answer the requirements of the law relating to the
sinking fund and $46,639,900 for the purpose of reducing the public debt
by application of a part of the surplus in the Treasury to that object.
Of the bonds thus called $102,269,450 became subject under such calls to
redemption prior to November 1, 1886. The remainder, amounting to
$25,013,650, matured under the calls after that date.

In addition to the amount subject to payment and cancellation prior to
November 1, there were also paid before that day certain of these bonds,
with the interest thereon, amounting to $5,072,350, which were
anticipated as to their maturity, of which $2,664,850 had not been
called, Thus $107,341,800 had been actually applied prior to the 1st of
November, 1886, to the extinguishment of our bonded and interest-bearing
debt, leaving on that day still outstanding the sum of $1,153,443,112.
Of this amount $86,848,700 were still represented by 3 per cent bonds.
They however, have been since November 1, or will at once be, further
reduced by $22,606,150, being bonds which have been called, as already
stated, but not redeemed and canceled before the latter date.

During the fiscal year ended June 30, 1886, there were coined, under the
compulsory silver-coinage act of 1878,29,838,905 silver dollars, and the
cost of the silver used in such coinage was $23,448,960.01. There had
been coined up to the close of the previous fiscal year under the
provisions of the law 203,882,554 silver dollars, and on the 1st day of
December, 1886, the total amount of such coinage was $247,131,549.

The Director of the Mint reports that at the time of the passage of the
law of 1878 directing this coinage the intrinsic value of the dollars
thus coined was 94 1/4 cents each, and that on the 31st day of July,
1886, the price of silver reached the lowest stage ever known, so that
the intrinsic or bullion price of our standard silver dollar at that
date was less than 72 cents. The price of silver on the 30th day of
November last was such as to make these dollars intrinsically worth 78
cents each.

These differences in value of the coins represent the fluctuations in
the price of silver, and they certainly do not indicate that compulsory
coinage by the Government enhances the price of that commodity or
secures uniformity in its value.

Every fair and legal effort has been made by the Treasury Department to
distribute this currency among the people. The withdrawal of United
States Treasury notes of small denominations and the issuing of small
silver certificates have been resorted to in the endeavor to accomplish
this result, in obedience to the will and sentiments of the
representatives of the people in the Congress. On the 27th day of
November, 1886, the people held of these coins, or certificates
representing them, the nominal sum of $166,873,041, and we still had
$79,464,345 in the Treasury as against about $142,894,055 so in the
hands of the people and $72,865,376 remaining in the Treasury one year
ago. The Director of the Mint again urges the necessity of more vault
room for the purpose of storing these silver dollars which are not
needed for circulation by the people.

I have seen no reason to change the views expressed in my last annual
message on the subject of this compulsory coinage, and I again urge its
suspension on all the grounds contained in my former recommendation,
reenforced by the significant increase of our gold exportations during
the last year, as appears by the comparative statement herewith
presented, and for the further reasons that the more this currency is
distributed among the people the greater becomes our duty to protect it
from disaster, that we now have abundance for all our needs, and that
there seems but little propriety in building vaults to store such
currency when the only pretense for its coinage is the necessity of its
use by the people as a circulating medium.

The great number of suits now pending in the United States courts for
the southern district of New York growing out of the collection of
customs revenue at the port of New York and the number of such suits
that are almost daily instituted are certainly worthy the attention of
the Congress. These legal controversies, based upon conflicting views by
importers and the collector as to the interpretation of our present
complex and indefinite revenue laws, might be largely obviated by an
amendment of those laws.

But pending such amendment the present condition of this litigation
should be relieved. There are now pending about 2,500 of these suits.
More than 1,100 have been commenced within the past eighteen months, and
many of the others have been at issue for more than twenty-five years.
These delays subject the Government to loss of evidence and prevent the
preparation necessary to defeat unjust and fictitious claims, while
constantly accruing interest threatens to double the demands involved.

In the present condition of the dockets of the courts, well filled with
private suits, and of the force allowed the district attorney, no
greater than is necessary for the ordinary and current business of his
office, these revenue litigations can not be considered.

In default of the adoption by the Congress of a plan for the general
reorganization of the Federal courts, as has been heretofore
recommended, I urge the propriety of passing a law permitting the
appointment of an additional Federal judge in the district where these
Government suits have accumulated, so that by continuous sessions of the
courts devoted to the trial of these cases they may be determined.

It is entirely plain that a great saving to the Government would be
accomplished by such a remedy, and the suitors who have honest claims
would not be denied justice through delay.

The report of the Secretary of War gives a detailed account of the
administration of his Department and contains sundry recommendations for
the improvement of the service, which I fully approve.

The Army consisted at the date of the last consolidated return of 2,103
officers and 24,946 enlisted men.

The expenses of the Department for the last fiscal year were
$36,990,903.38, including $6,294,305.43 for public works and river and
harbor improvements.

I especially direct the attention of the Congress to the recommendation
that officers be required to submit to an examination as a preliminary
to their promotion. I see no objection, but many advantages, in adopting
this feature, which has operated so beneficially in our Navy Department,
as well as in some branches of the Army.

The subject of coast defenses and fortifications has been fully and
carefully treated by the Board on Fortifications, whose report was
submitted at the last session of Congress; but no construction work of
the kind recommended by the board has been possible during the last year
from the lack of appropriations for such purpose.

The defenseless condition of our seacoast and lake frontier is perfectly
palpable. The examinations made must convince us all that certain of our
cities named in the report of the board should be fortified and that
work on the most important of these fortifications should be commenced
at once. The work has been thoroughly considered and laid out, the
Secretary of War reports, but all is delayed in default of Congressional
action.

The absolute necessity, judged by all standards of prudence and
foresight, of our preparation for an effectual resistance against the
armored ships and steel guns and mortars of modern construction which
may threaten the cities on our coasts is so apparent that I hope
effective steps will be taken in that direction immediately.

The valuable and suggestive treatment of this question by the Secretary
of War is earnestly commended to the consideration of the Congress.

In September and October last the hostile Apaches who, under the
leadership of Geronimo, had for eighteen months been on the war path,
and during that time had committed many murders and been the cause of
constant terror to the settlers of Arizona, surrendered to General
Miles, the military commander who succeeded General Crook in the
management and direction of their pursuit.

Under the terms of their surrender as then reported, and in view of the
understanding which these murderous savages seemed to entertain of the
assurances given them, it was considered best to imprison them in such
manner as to prevent their ever engaging in such outrages again, instead
of trying them for murder. Fort Pickens having been selected as a safe
place of confinement, all the adult males were sent thither and will be
closely guarded as prisoners. In the meantime the residue of the band,
who, though still remaining upon the reservation, were regarded as
unsafe and suspected of furnishing aid to those on the war path, had
been removed to Fort Marion. The women and larger children of the
hostiles were also taken there, and arrangements have been made for
putting the children of proper age in Indian schools.

The report of the Secretary of the Navy contains a detailed exhibit of
the condition of his Department, with such a statement of the action
needed to improve the same as should challenge the earnest attention of
the Congress.

The present Navy of the United States, aside from the ships in course of
construction, consists of--

First. Fourteen single-turreted monitors, none of which are in
commission nor at the present time serviceable. The batteries of these
ships are obsolete, and they can only be relied upon as auxiliary ships
in harbor defense, and then after such an expenditure upon them as might
not be deemed justifiable.

Second. Five fourth-rate vessels of small tonnage, only one of which was
designed as a war vessel, and all of which are auxiliary merely.

Third. Twenty-seven cruising ships, three of which are built of iron, of
small tonnage, and twenty-four of wood. Of these wooden vessels it is
estimated by the Chief Constructor of the Navy that only three will be
serviceable beyond a period of six years, at which time it may be said
that of the present naval force nothing worthy the name will remain.

All the vessels heretofore authorized are under contract or in course of
construction except the armored ships, the torpedo and dynamite boats,
and one cruiser. As to the last of these, the bids were in excess of the
limit fixed by Congress. The production in the United States of armor
and gun steel is a question which it seems necessary to settle at an
early day if the armored war vessels are to be completed with those
materials of home manufacture. This has been the subject of
investigation by two boards and by two special committees of Congress
within the last three years. The report of the Gun Foundry Board in
1884, of the Board on Fortifications made in January last, and the
reports of the select committees of the two Houses made at the last
session of Congress have entirely exhausted the subject, so far as
preliminary investigation is involved, and in their recommendations they
are substantially agreed.

In the event that the present invitation of the Department for bids to
furnish such of this material as is now authorized shall fail to induce
domestic manufacturers to undertake the large expenditures required to
prepare for this new manufacture, and no other steps are taken by
Congress at its coming session, the Secretary contemplates with
dissatisfaction the necessity of obtaining abroad the armor and the gun
steel for the authorized ships. It would seem desirable that the wants
of the Army and the Navy in this regard should be reasonably met, and
that by uniting their contracts such inducement might be offered as
would result in securing the domestication of these important interests.

The affairs of the postal service show marked and gratifying improvement
during the past year. A particular account of its transactions and
condition is given in the report of the Postmaster-General, which will
be laid before you.

The reduction of the rate of letter postage in 1883, rendering the
postal revenues inadequate to sustain the expenditures, and business
depression also contributing, resulted in an excess of cost for the
fiscal year ended June 30, 1885, of eight and one-third millions of
dollars. An additional check upon receipts by doubling the measure of
weight in rating sealed correspondence and diminishing one-half the
charge for newspaper carriage was imposed by legislation which took
effect with the beginning of the past fiscal year, while the constant
demand of our territorial development and growing population for the
extension and increase of mail facilities and machinery necessitates
steady annual advance in outlay, and the careful estimate of a year ago
upon the rates of expenditure then existing contemplated the unavoidable
augmentation of the deficiency in the last fiscal year by nearly
$2,000,000. The anticipated revenue for the last year failed of
realization by about $64,000, but proper measures of economy have so
satisfactorily limited the growth of expenditure that the total
deficiency in fact fell below that of 1885, and at this time the
increase of revenue is in a gaining ratio over the increase of cost,
demonstrating the sufficiency of the present rates of postage ultimately
to sustain the service. This is the more pleasing because our people
enjoy now both cheaper postage proportionably to distances and a vaster
and more costly service than any other upon the globe.

Retrenchment has been effected in the cost of supplies, some
expenditures unwarranted by law have ceased, and the outlays for mail
carriage have been subjected to beneficial scrutiny. At the close of the
last fiscal year the expense of transportation on star routes stood at
an annual rate of cost less by over $560,000 than at the close of the
previous year and steamboat and mail-messenger service at nearly
$200,000 less.

The service has been in the meantime enlarged and extended by the
establishment of new offices, increase of routes of carriage, expansion
of carrier-delivery conveniences, and additions to the railway mail
facilities, in accordance with the growing exigencies of the country and
the long-established policy of the Government.

The Postmaster-General calls attention to the existing law for
compensating railroads and expresses the opinion that a method may be
devised which will prove more just to the carriers and beneficial to the
Government; and the subject appears worthy of your early consideration.

The differences which arose during the year with certain of the ocean
steamship companies have terminated by the acquiescence of all in the
policy of the Government approved by the Congress in the postal
appropriation at its last session, and the Department now enjoys the
utmost service afforded by all vessels which sail from our ports upon
either ocean--a service generally adequate to the needs of our
intercourse. Petitions have, however, been presented to the Department
by numerous merchants and manufacturers for the establishment of a
direct service to the Argentine Republic and for semimonthly dispatches
to the Empire of Brazil, and the subject is commended to your
consideration. It is an obvious duty to provide the means of postal
communication which our commerce requires, and with prudent forecast of
results the wise extension of it may lead to stimulating intercourse and
become the harbinger of a profitable traffic which will open new avenues
for the disposition of the products of our industry. The circumstances
of the countries at the far south of our continent are such as to invite
our enterprise and afford the promise of sufficient advantages to
justify an unusual effort to bring about the closer relations which
greater freedom of communication would tend to establish.

I suggest that, as distinguished from a grant or subsidy for the mere
benefit of any line of trade or travel, whatever outlay may be required
to secure additional postal service, necessary and proper and not
otherwise attainable, should be regarded as within the limit of
legitimate compensation for such service.

The extension of the free-delivery service as suggested by the
Postmaster-General has heretofore received my sanction, and it is to be
hoped a suitable enactment may soon be agreed upon.

The request for an appropriation sufficient to enable the general
inspection of fourth-class offices has my approbation.

I renew my approval of the recommendation of the Postmaster-General that
another assistant be provided for the Post-Office Department, and I
invite your attention to the several other recommendations in his
report.

The conduct of the Department of Justice for the last fiscal year is
fully detailed in the report of the Attorney-General, and I invite the
earnest attention of the Congress to the same and due consideration of
the recommendations therein contained.

In the report submitted by this officer to the last session of the
Congress he strongly recommended the erection of a penitentiary for the
confinement of prisoners convicted and sentenced in the United States
courts, and he repeats the recommendation in his report for the last
year.

This is a matter of very great importance and should at once receive
Congressional action. United States prisoners are now confined in more
than thirty different State prisons and penitentiaries scattered in
every part of the country. They are subjected to nearly as many
different modes of treatment and discipline and are far too much removed
from the control and regulation of the Government. So far as they are
entitled to humane treatment and an opportunity for improvement and
reformation, the Government is responsible to them and society that
these things are forthcoming. But this duty can scarcely be discharged
without more absolute control and direction than is possible under the
present system.

Many of our good citizens have interested themselves, with the most
beneficial results, in the question of prison reform. The General
Government should be in a situation, since there must be United States
prisoners, to furnish important aid in this movement, and should be able
to illustrate what may be practically done in the direction of this
reform and to present an example in the treatment and improvement of its
prisoners worthy of imitation.

With prisons under its own control the Government could deal with the
somewhat vexed question of convict labor, so far as its convicts were
concerned, according to a plan of its own adoption, and with due regard
to the rights and interests of our laboring citizens, instead of
sometimes aiding in the operation of a system which causes among them
irritation and discontent.

Upon consideration of this subject it might be thought wise to erect
more than one of these institutions, located in such places as would
best subserve the purposes of convenience and economy in transportation.
The considerable cost of maintaining these convicts as at present, in
State institutions, would be saved by the adoption of the plan proposed,
and by employing them in the manufacture of such articles as were needed
for use by the Government quite a large pecuniary benefit would be
realized in partial return for our outlay.

I again urge a change in the Federal judicial system to meet the wants
of the people and obviate the delays necessarily attending the present
condition of affairs in our courts. All are agreed that something should
be done, and much favor is shown by those well able to advise to the
plan suggested by the Attorney-General at the last session of the
Congress and recommended in my last annual message. This recommendation
is here renewed, together with another made at the same time, touching a
change in the manner of compensating district attorneys and marshals;
and the latter subject is commended to the Congress for its action in
the interest of economy to the Government, and humanity, fairness, and
justice to our people.

The report of the Secretary of the Interior presents a comprehensive
summary of the work of the various branches of the public service
connected with his Department, and the suggestions and recommendations
which it contains for the improvement of the service should receive your
careful consideration.

The exhibit made of the condition of our Indian population and the
progress of the work for their enlightenment, notwithstanding the many
embarrassments which hinder the better administration of this important
branch of the service, is a gratifying and hopeful one.

The funds appropriated for the Indian service for the fiscal year just
passed, with the available income from Indian land and trust moneys,
amounting in all to $7,850,775.12, were ample for the service under the
conditions and restrictions of laws regulating their expenditure. There
remained a balance on hand on June 30, 1886, of $1,660,023.30, of which
$ 1,337,768.21 are permanent funds for fulfillment of treaties and other
like purposes, and the remainder, $322,255.09, is subject to be carried
to the surplus fund as required by law.

The estimates presented for appropriations for the ensuing fiscal year
amount to $5,608,873.64, or $442,386.20 less than those laid before the
Congress last year.

The present system of agencies, while absolutely necessary and well
adapted for the management of our Indian affairs and for the ends in
view when it was adopted, is in the present stage of Indian management
inadequate, standing alone, for the accomplishment of an object which
has become pressing in its importance--the more rapid transition from
tribal organizations to citizenship of such portions of the Indians as
are capable of civilized life.

When the existing system was adopted, the Indian race was outside of the
limits of organized States and Territories and beyond the immediate
reach and operation of civilization, and all efforts were mainly
directed to the maintenance of friendly relations and the preservation
of peace and quiet on the frontier. All this is now changed. There is no
such thing as the Indian frontier. Civilization, with the busy hum of
industry and the influences of Christianity, surrounds these people at
every point. None of the tribes are outside of the bounds of organized
government and society, except that the Territorial system has not been
extended over that portion of the country known as the Indian Territory.
As a race the Indians are no longer hostile, but may be considered as
submissive to the control of the Government. Few of them only are
troublesome. Except the fragments of several bands, all are now gathered
upon reservations.

It is no longer possible for them to subsist by the chase and the
spontaneous productions of the earth.

With an abundance of land, if furnished with the means and implements
for profitable husbandry, their life of entire dependence upon
Government rations from day to day is no longer defensible. Their
inclination, long fostered by a defective system of control, is to cling
to the habits and customs of their ancestors and struggle with
persistence against the change of life which their altered circumstances
press upon them. But barbarism and civilization can not live together.
It is impossible that such incongruous conditions should coexist on the
same soil.

They are a portion of our people, are under the authority of our
Government, and have a peculiar claim upon and are entitled to the
fostering care and protection of the nation. The Government can not
relieve itself of this responsibility until they are so far trained and
civilized as to be able wholly to manage and care for themselves. The
paths in which they should walk must be clearly marked out for them, and
they must be led or guided until they are familiar with the way and
competent to assume the duties and responsibilities of our citizenship.

Progress in this great work will continue only at the present slow pace
and at great expense unless the system and methods of management are
improved to meet the changed conditions and urgent demands of the
service.

The agents, having general charge and supervision in many cases of more
than 5,000 Indians, scattered over large reservations, and burdened with
the details of accountability for funds and supplies, have time to look
after the industrial training and improvement of a few Indians only. The
many are neglected and remain idle and dependent, conditions not
favorable for progress and civilization.

The compensation allowed these agents and the conditions of the service
are not calculated to secure for the work men who are fitted by ability
and skill to properly plan and intelligently direct the methods best
adapted to produce the most speedy results and permanent benefits.

Hence the necessity for a supplemental agency or system directed to the
end of promoting the general and more rapid transition of the tribes
from habits and customs of barbarism to the ways of civilization.

With an anxious desire to devise some plan of operation by which to
secure the welfare of the Indians and to relieve the Treasury as far as
possible from the support of an idle and dependent population, I
recommended in my previous annual message the passage of a law
authorizing the appointment of a commission as an instrumentality
auxiliary to those already established for the care of the Indians. It
was designed that this commission should be composed of six intelligent
and capable persons--three to be detailed from the Army--having
practical ideas upon the subject of the treatment of Indians and
interested in their welfare, and that it should be charged, under the
direction of the Secretary of the Interior, with the management of such
matters of detail as can not with the present organization be properly
and successfully conducted, and which present different phases, as the
Indians themselves differ in their progress, needs, disposition, and
capacity for improvement or immediate self-support.

By the aid of such a commission much unwise and useless expenditure of
money, waste of materials, and unavailing efforts might be avoided; and
it is hoped that this or some measure which the wisdom of Congress may
better devise to supply the deficiency of the present system may receive
your consideration and the appropriate legislation be provided.

The time is ripe for the work of such an agency.

There is less opposition to the education and training of the Indian
youth, as shown by the increased attendance upon the schools, and there
is a yielding tendency for the individual holding of lands. Development
and advancement in these directions are essential, and should have every
encouragement. As the rising generation are taught the language of
civilization and trained in habits of industry they should assume the
duties, privileges, and responsibilities of citizenship.

No obstacle should hinder the location and settlement of any Indian
willing to take land in severalty; on the contrary, the inclination to
do so should be stimulated at all times when proper and expedient. But
there is no authority of law for making allotments on some of the
reservations, and on others the allotments provided for are so small
that the Indians, though ready and desiring to settle down, are not
willing to accept such small areas when their reservations contain ample
lands to afford them homesteads of sufficient size to meet their present
and future needs.

These inequalities of existing special laws and treaties should be
corrected and some general legislation on the subject should be
provided, so that the more progressive members of the different tribes
may be settled upon homesteads, and by their example lead others to
follow, breaking away from tribal customs and substituting therefor the
love of home, the interest of the family, and the rule of the state.

The Indian character and nature are such that they are not easily led
while brooding over unadjusted wrongs. This is especially so regarding
their lands. Matters arising from the construction and operation of
railroads across some of the reservations, and claims of title and right
of occupancy set up by white persons to some of the best land within
other reservations require legislation for their final adjustment.

The settlement of these matters will remove many embarrassments to
progress in the work of leading the Indians to the adoption of our
institutions and bringing them under the operation, the influence, and
the protection of the universal laws of our country.

The recommendations of the Secretary of the Interior and the
Commissioner of the General Land Office looking to the better protection
of public lands and of the public surveys, the preservation of national
forests, the adjudication of grants to States and corporations and of
private land claims, and the increased efficiency of the public-land
service are commended to the attention of Congress. To secure the widest
distribution of public lands in limited quantities among settlers for
residence and cultivation, and thus make the greatest number of
individual homes, was the primary object of the public-land legislation
in the early days of the Republic. This system was a simple one. It
commenced with an admirable scheme of public surveys, by which the
humblest citizen could identify the tract upon which he wished to
establish his home. The price of lands was placed within the reach of
all the enterprising, industrious, and honest pioneer citizens of the
country. It was soon, however, found that the object of the laws was
perverted, under the system of cash sales, from a distribution of land
among the people to an accumulation of land capital by wealthy and
speculative persons. To check this tendency a preference right of
purchase was given to settlers on the land, a plan which culminated in
the general preemption act of 1841. The foundation of this system was
actual residence and cultivation. Twenty years later the homestead law
was devised to more surely place actual homes in the possession of
actual cultivators of the soil. The land was given without price, the
sole conditions being residence, improvement, and cultivation. Other
laws have followed, each designed to encourage the acquirement and use
of land in limited individual quantities. But in later years these laws,
through vicious administrative methods and under changed conditions of
communication and transportation, have been so evaded and violated that
their beneficent purpose is threatened with entire defeat. The methods
of such evasions and violations are set forth in detail in the reports
of the Secretary of the Interior and Commissioner of the General Land
Office. The rapid appropriation of our public lands without bona fide
settlements or cultivation, and not only without intention of residence,
but for the purpose of their aggregation in large holdings, in many
cases in the hands of foreigners, invites the serious and immediate
attention of the Congress.

The energies of the Land Department have been devoted during the present
Administration to remedy defects and correct abuses in the public-land
service. The results of these efforts are so largely in the nature of
reforms in the processes and methods of our land system as to prevent
adequate estimate; but it appears by a compilation from the reports of
the Commissioner of the General Land Office that the immediate effect in
leading cases which have come to a final termination has been the
restoration to the mass of public lands of 2,750,000 acres; that
2,370,000 acres are embraced in investigations now pending before the
Department or the courts, and that the action of Congress has been asked
to effect the restoration of 2,790,000 acres additional; besides which
4,000,000 acres have been withheld from reservation and the rights of
entry thereon maintained.

I recommend the repeal of the preemption and timber-culture acts, and
that the homestead laws be so amended as to better secure compliance
with their requirements of residence, improvement, and cultivation for
the period of five years from date of entry, without commutation or
provision for speculative relinquishment. I also recommend the repeal of
the desert-land laws unless it shall be the pleasure of the Congress to
so amend these laws as to render them less liable to abuses. As the
chief motive for an evasion of the laws and the principal cause of their
result in land accumulation instead of land distribution is the facility
with which transfers are made of the right intended to be secured to
settlers, it may be deemed advisable to provide by legislation some
guards and checks upon the alienation of homestead rights and lands
covered thereby until patents issue.

Last year an Executive proclamation was issued directing the removal of
fences which inclosed the public domain. Many of these have been removed
in obedience to such order, but much of the public land still remains
within the lines of these unlawful fences. The ingenious methods
resorted to in order to continue these trespasses and the hardihood of
the pretenses by which in some cases such inclosures are justified are
fully detailed in the report of the Secretary of the Interior.

The removal of the fences still remaining which inclose public lands
will be enforced with all the authority and means with which the
executive branch of the Government is or shall be invested by the
Congress for that purpose.

The report of the Commissioner of Pensions contains a detailed and most
satisfactory exhibit of the operations of the Pension Bureau during the
last fiscal year. The amount of work done was the largest in any year
since the organization of the Bureau, and it has been done at less cost
than during the previous year in every division.

On the 30th day of June, 1886, there were 365,783 pensioners on the
rolls of the Bureau.

Since 1861 there have been 1,018,735 applications for pensions filed, of
which 78,834 were based upon service in the War of 1812. There were
621,754 of these applications allowed, including 60,178 to the soldiers
of 1812 and their widows.

The total amount paid for pensions since 1861 is $808,624,811.57.

The number of new pensions allowed during the year ended June 30, 1886,
is 40,857, a larger number than has been allowed in any year save one
since 1861. The names of 2,229 pensioners which had been previously
dropped from the rolls were restored during the year, and after
deducting those dropped within the same time for various causes a net
increase remains for the year of 20,658 names.

From January 1, 1861, to December 1, 1885, 1,967 private pension acts
had been passed. Since the last-mentioned date, and during the last
session of the Congress, 644 such acts became laws.

It seems to me that no one can examine our pension establishment and its
operations without being convinced that through its instrumentality
justice can be very nearly done to all who are entitled under present
laws to the pension bounty of the Government.

But it is undeniable that cases exist, well entitled to relief, in which
the Pension Bureau is powerless to aid. The really worthy cases of this
class are such as only lack by misfortune the kind or quantity of proof
which the law and regulations of the Bureau require, or which, though
their merit is apparent, for some other reason can not be justly dealt
with through general laws. These conditions fully justify application to
the Congress and special enactments. But resort to the Congress for a
special pension act to overrule the deliberate and careful determination
of the Pension Bureau on the merits or to secure favorable action when
it could not be expected under the most liberal execution of general
laws, it must be admitted opens the door to the allowance of
questionable claims and presents to the legislative and executive
branches of the Government applications concededly not within the law
and plainly devoid of merit, but so surrounded by sentiment and
patriotic feeling that they are hard to resist. I suppose it will not be
denied that many claims for pension are made without merit and that many
have been allowed upon fraudulent representations. This has been
declared from the Pension Bureau, not only in this but in prior
Administrations.

The usefulness and the justice of any system for the distribution of
pensions depend upon the equality and uniformity of its operation.

It will be seen from the report of the Commissioner that there are now
paid by the Government 131 different rates of pension.

He estimates from the best information he can obtain that 9,000 of those
who have served in the Army and Navy of the United States are now
supported, in whole or in part, from public funds or by organized
charities, exclusive of those in soldiers' homes under the direction and
control of the Government. Only 13 per cent of these are pensioners,
while of the entire number of men furnished for the late war something
like 20 per cent, including their widows and relatives, have been or now
are in receipt of pensions.

The American people, with a patriotic and grateful regard for our
ex-soldiers, too broad and too sacred to be monopolized by any special
advocates, are not only willing but anxious that equal and exact justice
should be done to all honest claimants for pensions. In their sight the
friendless and destitute soldier, dependent on public charity, if
otherwise entitled, has precisely the same right to share in the
provision made for those who fought their country's battles as those
better able, through friends and influence, to push their claims. Every
pension that is granted under our present plan upon any other grounds
than actual service and injury or disease incurred in such service, and
every instance of the many in which pensions are increased on other
grounds than the merits of the claim, work an injustice to the brave and
crippled, but poor and friendless, soldier, who is entirely neglected or
who must be content with the smallest sum allowed under general laws.

There are far too many neighborhoods in which are found glaring cases of
inequality of treatment in the matter of pensions, and they are largely
due to a yielding in the Pension Bureau to importunity on the part of
those, other than the pensioner, who are especially interested, or they
arise from special acts passed for the benefit of individuals.

The men who fought side by side should stand side by side when they
participate in a grateful nation's kind remembrance.

Every consideration of fairness and justice to our ex-soldiers and the
protection of the patriotic instinct of our citizens from perversion and
violation point to the adoption of a pension system broad and
comprehensive enough to cover every contingency, and which shall make
unnecessary an objectionable volume of special legislation.

As long as we adhere to the principle of granting pensions for service,
and disability as the result of the service, the allowance of pensions
should be restricted to cases presenting these features.

Every patriotic heart responds to a tender consideration for those who,
having served their country long and well, are reduced to destitution
and dependence, not as an incident of their service, but with advancing
age or through sickness or misfortune. We are all tempted by the
contemplation of such a condition to supply relief, and are often
impatient of the limitations of public duty. Yielding to no one in the
desire to indulge this feeling of consideration, I can not rid myself of
the conviction that if these ex-soldiers are to be relieved they and
their cause are entitled to the benefit of an enactment under which
relief may be claimed as a right, and that such relief should be granted
under the sanction of law, not in evasion of it; nor should such worthy
objects of care, all equally entitled, be remitted to the unequal
operation of sympathy or the tender mercies of social and political
influence, with their unjust discriminations.

The discharged soldiers and sailors of the country are our
fellow-citizens, and interested with us in the passage and faithful
execution of wholesome laws. They can not be swerved from their duty of
citizenship by artful appeals to their spirit of brotherhood born of
common peril and suffering, nor will they exact as a test of devotion to
their welfare a willingness to neglect public duty in their behalf.

On the 4th of March, 1885, the current business of the Patent Office
was, on an average, five and a half months in arrears, and in several
divisions more than twelve months behind. At the close of the last
fiscal year such current work was but three months in arrears, and it is
asserted and believed that in the next few months the delay in obtaining
an examination of an application for a patent will be but nominal.

The number of applications for patents during the last fiscal year,
including reissues, designs, trade-marks, and labels, equals 40,678,
which is considerably in excess of the number received during any
preceding year.

The receipts of the Patent Office during the year aggregate
$1,205,167.80, enabling the office to turn into the Treasury a surplus
revenue, over and above all expenditures, of about $163,710.30.

The number of patents granted during the last fiscal year, including
reissues, trade-marks, designs, and labels, was 25,619, a number also
quite largely in excess of that of any preceding year.

The report of the Commissioner shows the office to be in a prosperous
condition and constantly increasing in its business. No increase of
force is asked for.

The amount estimated for the fiscal year ending June 30, 1886, was
$890,760. The amount estimated for the year ending June 30, 1887, was
$853,960. The amount estimated for the fiscal year ending June 30, 1888,
is $778,770.

The Secretary of the Interior suggests a change in the plan for the
payment of the indebtedness of the Pacific subsidized roads to the
Government. His suggestion has the unanimous indorsement of the persons
selected by the Government to act as directors of these roads and
protect the interests of the United States in the board of direction. In
considering the plan proposed the sole matters which should be taken
into account, in my opinion, are the situation of the Government as a
creditor and the surest way to secure the payment of the principal and
interest of its debt.

By a recent decision of the Supreme Court of the United States it has
been adjudged that the laws of the several States are inoperative to
regulate rates of transportation upon railroads if such regulation
interferes with the rate of carriage from one State into another. This
important field of control and regulation having been thus left entirely
unoccupied, the expediency of Federal action upon the subject is worthy
of consideration.

The relations of labor to capital and of laboring men to their employers
are of the utmost concern to every patriotic citizen. When these are
strained and distorted, unjustifiable claims are apt to be insisted upon
by both interests, and in the controversy which results the welfare of
all and the prosperity of the country are jeopardized. Any intervention
of the General Government, within the limits of its constitutional
authority, to avert such a condition should be willingly accorded.

In a special message transmitted to the Congress at its last session I
suggested the enlargement of our present Labor Bureau and adding to its
present functions the power of arbitration in cases where differences
arise between employer and employed. When these differences reach such a
stage as to result in the interruption of commerce between the States,
the application of this remedy by the General Government might be
regarded as entirely within its constitutional powers. And I think we
might reasonably hope that such arbitrators, if carefully selected and
if entitled to the confidence of the parties to be affected, would be
voluntarily called to the settlement of controversies of less extent and
not necessarily within the domain of Federal regulation.

I am of the opinion that this suggestion is worthy the attention of the
Congress.

But after all has been done by the passage of laws, either Federal or
State, to relieve a situation full of solicitude, much more remains to
be accomplished by the reinstatement and cultivation of a true American
sentiment which recognizes the equality of American citizenship. This,
in the light of our traditions and in loyalty to the spirit of our
institutions, would teach that a hearty cooperation on the part of all
interests is the surest path to national greatness and the happiness of
all our people; that capital should, in recognition of the brotherhood
of our citizenship and in a spirit of American fairness, generously
accord to labor its just compensation and consideration, and that
contented labor is capital's best protection and faithful ally. It would
teach, too, that the diverse situations of our people are inseparable
from our civilization; that every citizen should in his sphere be a
contributor to the general good; that capital does not necessarily tend
to the oppression of labor, and that violent disturbances and disorders
alienate from their promoters true American sympathy and kindly feeling.

The Department of Agriculture, representing the oldest and largest of
our national industries, is subserving well the purposes of its
organization. By the introduction of new subjects of farming enterprise
and by opening new sources of agricultural wealth and the dissemination
of early information concerning production and prices it has contributed
largely to the country's prosperity. Through this agency advanced
thought and investigation touching the subjects it has in charge should,
among other things, be practically applied to the home production at a
low cost of articles of food which are now imported from abroad. Such an
innovation will necessarily, of course, in the beginning be within the
domain of intelligent experiment, and the subject in every stage should
receive all possible encouragement from the Government.

The interests of millions of our citizens engaged in agriculture are
involved in an enlargement and improvement of the results of their
labor, and a zealous regard for their welfare should be a willing
tribute to those whose productive returns are a main source of our
progress and power.

The existence of pleuro-pneumonia among the cattle of various States has
led to burdensome and in some cases disastrous restrictions in an
important branch of our commerce, threatening to affect the quantity and
quality of our food supply. This is a matter of such importance and of
such far-reaching consequences that I hope it will engage the serious
attention of the Congress, to the end that such a remedy may be applied
as the limits of a constitutional delegation of power to the General
Government will permit.

I commend to the consideration of the Congress the report of the
Commissioner and his suggestions concerning the interest intrusted to
his care.

The continued operation of the law relating to our civil service has
added the most convincing proofs of its necessity and usefulness. It is
a fact worthy of note that every public officer who has a just idea of
his duty to the people testifies to the value of this reform. Its
staunchest, friends are found among those who understand it best, and
its warmest supporters are those who are restrained and protected by its
requirements.

The meaning of such restraint and protection is not appreciated by those
who want places under the Government regardless of merit and efficiency,
nor by those who insist that the selection of such places should rest
upon a proper credential showing active partisan work. They mean to
public officers, if not their lives, the only opportunity afforded them
to attend to public business, and they mean to the good people of the
country the better performance of the work of their Government.

It is exceedingly strange that the scope and nature of this reform are
so little understood and that so many things not included within its
plan are called by its name. When cavil yields more fully to
examination, the system will have large additions to the number of its
friends.

Our civil-service reform may be imperfect in some of its details; it may
be misunderstood and opposed; it may not always be faithfully applied;
its designs may sometimes miscarry through mistake or willful intent; it
may sometimes tremble under the assaults of its enemies or languish
under the misguided zeal of impracticable friends; but if the people of
this country ever submit to the banishment of its underlying principle
from the operation of their Government they will abandon the surest
guaranty of the safety and success of American institutions.

I invoke for this reform the cheerful and ungrudging support of the
Congress. I renew my recommendation made last year that the salaries of
the Commissioners be made equal to other officers of the Government
having like duties and responsibilities, and I hope that such reasonable
appropriations may be made as will enable them to increase the
usefulness of the cause they have in charge.

I desire to call the attention of the Congress to a plain duty which the
Government owes to the depositors in the Freedman's Savings and Trust
Company.

This company was chartered by the Congress for the benefit of the most
illiterate and humble of our people, and with the intention of
encouraging in them industry and thrift. Most of its branches were
presided over by officers holding the commissions and clothed in the
uniform of the United States. These and other circumstances reasonably,
I think, led these simple people to suppose that the invitation to
deposit their hard-earned savings in this institution implied an
undertaking on the part of their Government that their money should be
safely kept for them.

When this company failed, it was liable in the sum of $2,939,925.22 to
61,131 depositors. Dividends amounting in the aggregate to 62 per cent
have been declared, and the sum called for and paid of such dividends
seems to be $1,648,181.72. This sum deducted from the entire amount of
deposits leaves $1,291,744.50 still unpaid. Past experience has shown
that quite a large part of this sum will not be called for. There are
assets still on hand amounting to the estimated sum of $16,000.

I think the remaining 38 per cent of such of these deposits as have
claimants should be paid by the Government, upon principles of equity
and fairness.

The report of the commissioner, soon to be laid before Congress, will
give more satisfactory details on this subject.

The control of the affairs of the District of Columbia having been
placed in the hands of purely executive officers, while the Congress
still retains all legislative authority relating to its government, it
becomes my duty to make known the most pressing needs of the District
and recommend their consideration.

The laws of the District appear to be in an uncertain and unsatisfactory
condition, and their codification or revision is much needed.

During the past year one of the bridges leading from the District to the
State of Virginia became unfit for use, and travel upon it was
forbidden. This leads me to suggest that the improvement of all the
bridges crossing the Potomac and its branches from the city of
Washington is worthy the attention of Congress.

The Commissioners of the District represent that the laws regulating the
sale of liquor and granting licenses therefor should be at once amended,
and that legislation is needed to consolidate, define, and enlarge the
scope and powers of charitable and penal institutions within the
District.

I suggest that the Commissioners be clothed with the power to make,
within fixed limitations, police regulations. I believe this power
granted and carefully guarded would tend to subserve the good order of
the municipality.

It seems that trouble still exists growing out of the occupation of the
streets and avenues by certain railroads having their termini in the
city. It is very important that such laws should be enacted upon this
subject as will secure to the railroads all the facilities they require
for the transaction of their business and at the same time protect
citizens from injury to their persons or property.

The Commissioners again complain that the accommodations afforded them
for the necessary offices for District business and for the safe-keeping
of valuable books and papers are entirely insufficient. I recommend that
this condition of affairs be remedied by the Congress, and that suitable
quarters be furnished for the needs of the District government.

In conclusion I earnestly invoke such wise action on the part of the
people's legislators as will subserve the public good and demonstrate
during the remaining days of the Congress as at present organized its
ability and inclination to so meet the people's needs that it shall be
gratefully remembered by an expectant constituency.

***

State of the Union Address
Grover Cleveland
December 6, 1887

To the Congress of the United States:

You are confronted at the threshold of your legislative duties with a
condition of the national finances which imperatively demands immediate
and careful consideration.

The amount of money annually exacted, through the operation of present
laws, from the industries and necessities of the people largely exceeds
the sum necessary to meet the expenses of the Government.

When we consider that the theory of our institutions guarantees to every
citizen the full enjoyment of all the fruits of his industry and
enterprise, with only such deduction as may be his share toward the
careful and economical maintenance of the Government which protects him,
it is plain that the exaction of more than this is indefensible
extortion and a culpable betrayal of American fairness and justice. This
wrong inflicted upon those who bear the burden of national taxation,
like other wrongs, multiplies a brood of evil consequences. The public
Treasury, which should only exist as a conduit conveying the people's
tribute to its legitimate objects of expenditure, becomes a hoarding
place for money needlessly withdrawn from trade and the people's use,
thus crippling our national energies, suspending our country's
development, preventing investment in productive enterprise, threatening
financial disturbance, and inviting schemes of public plunder.

This condition of our Treasury is not altogether new, and it has more
than once of late been submitted to the people's representatives in the
Congress, who alone can apply a remedy. And yet the situation still
continues, with aggravated incidents, more than ever presaging financial
convulsion and widespread disaster.

It will not do to neglect this situation because its dangers are not now
palpably imminent and apparent. They exist none the less certainly, and
await the unforeseen and unexpected occasion when suddenly they will be
precipitated upon us.

On the 30th day of June, 1885, the excess of revenues over public
expenditures, after complying with the annual requirement of the
sinking-fund act, was $17,859,735.84; during the year ended June 30,
1886, such excess amounted to $49,405,545.20, and during the year ended
June 30, 1887, it reached the sum of $55,567,849.54.

The annual contributions to the sinking fund during the three years
above specified, amounting in the aggregate to $138,058,320.94, and
deducted from the surplus as stated, were made by calling in for that
purpose outstanding 3 per cent bonds of the Government. During the six
months prior to June 30, 1887, the surplus revenue had grown so large by
repeated accumulations, and it was feared the withdrawal of this great
sum of money needed by the people would so affect the business of the
country, that the sum of $79,864,100 of such surplus was applied to the
payment of the principal and interest of the 3 per cent bonds still
outstanding, and which were then payable at the option of the
Government. The precarious condition of financial affairs among the
people still needing relief, immediately after the 30th day of June,
1887, the remainder of the 3 per cent bonds then outstanding, amounting
with principal and interest to the sum of $18,877,500, were called in
and applied to the sinking-fund contribution for the current fiscal
year. Notwithstanding these operations of the Treasury Department,
representations of distress in business circles not only continued, but
increased, and absolute peril seemed at hand. In these circumstances the
contribution to the sinking fund for the current fiscal year was at once
completed by the expenditure of $27,684,283.55 in the purchase of
Government bonds not yet due bearing 4 and 41/2 per cent interest, the
premium paid thereon averaging about 24 per cent for the former and 8
per cent for the latter. In addition to this, the interest accruing
during the current year upon the outstanding bonded indebtedness of the
Government was to some extent anticipated, and banks selected as
depositories of public money were permitted to somewhat increase their
deposits.

While the expedients thus employed to release to the people the money
lying idle in the Treasury served to avert immediate danger, our surplus
revenues have continued to accumulate, the excess for the present year
amounting on the 1st day of December to $55,258,701.19, and estimated to
reach the sum of $113,000,000 on the 30th of June next, at which date it
is expected that this sum, added to prior accumulations, will swell the
surplus in the Treasury to $140,000,000.

There seems to be no assurance that, with such a withdrawal from use of
the people's circulating medium, our business community may not in the
near future be subjected to the same distress which was quite lately
produced from the same cause. And while the functions of our National
Treasury should be few and simple, and while its best condition would be
reached, I believe, by its entire disconnection with private business
interests, yet when, by a perversion of its purposes, it idly holds
money uselessly subtracted from the channels of trade, there seems to be
reason for the claim that some legitimate means should be devised by the
Government to restore in an emergency, without waste or extravagance,
such money to its place among the people.

If such an emergency arises, there now exists no clear and undoubted
executive power of relief. Heretofore the redemption of 3 per cent
bonds, which were payable at the option of the Government, has afforded
a means for the disbursement of the excess of our revenues; but these
bonds have all been retired, and there are no bonds outstanding the
payment of which we have a right to insist upon. The contribution to the
sinking fund which furnishes the occasion for expenditure in the
purchase of bonds has been already made for the current year, so that
there is no outlet in that direction.

In the present state of legislation the only pretense of any existing
executive power to restore at this time any part of our surplus revenues
to the people by its expenditure consists in the supposition that the
Secretary of the Treasury may enter the market and purchase the bonds of
the Government not yet due, at a rate of premium to be agreed upon. The
only provision of law from which such a power could be derived is found
in an appropriation bill passed a number of years ago, and it is subject
to the suspicion that it was intended as temporary and limited in its
application, instead of conferring a continuing discretion and
authority. No condition ought to exist which would justify the grant of
power to a single official, upon his judgment of its necessity, to
withhold from or release to the business of the people, in an unusual
manner, money held in the Treasury, and thus affect at his will the
financial situation of the country; and if it is deemed wise to lodge in
the Secretary of the Treasury the authority in the present juncture to
purchase bonds, it should be plainly vested, and provided, as far as
possible, with such checks and limitations as will define this
official's right and discretion and at the same time relieve him from
undue responsibility.

In considering the question of purchasing bonds as a means of restoring
to circulation the surplus money accumulating in the Treasury, it should
be borne in mind that premiums must of course be paid upon such
purchase, that there may be a large part of these bonds held as
investments which can not be purchased at any price, and that
combinations among holders who are willing to sell may unreasonably
enhance the cost of such bonds to the Government.

It has been suggested that the present bonded debt might be refunded at
a less rate of interest and the difference between the old and new
security paid in cash, thus finding use for the surplus in the Treasury.
The success of this plan, it is apparent, must depend upon the volition
of the holders of the present bonds; and it is not entirely certain that
the inducement which must be offered them would result in more financial
benefit to the Government than the purchase of bonds, while the latter
proposition would reduce the principal of the debt by actual payment
instead of extending it.

The proposition to deposit the money held by the Government in banks
throughout the country for use by the people is, it seems to me,
exceedingly objectionable in principle, as establishing too close a
relationship between the operations of the Government Treasury and the
business of the country and too extensive a commingling of their money,
thus fostering an unnatural reliance in private business upon public
funds. If this scheme should be adopted, it should only be done as a
temporary expedient to meet an urgent necessity. Legislative and
executive effort should generally be in the opposite direction, and
should have a tendency to divorce, as much and as fast as can be safely
done, the Treasury Department from private enterprise.

Of course it is not expected that unnecessary and extravagant
appropriations will be made for the purpose of avoiding the accumulation
of an excess of revenue. Such expenditure, besides the demoralization of
all just conceptions of public duty which it entails, stimulates a habit
of reckless improvidence not in the least consistent with the mission of
our people or the high and beneficent purposes of our Government.

I have deemed it my duty to thus bring to the knowledge of my
countrymen, as well as to the attention of their representatives charged
with the responsibility of legislative relief, the gravity of our
financial situation. The failure of the Congress heretofore to provide
against the dangers which it was quite evident the very nature of the
difficulty must necessarily produce caused a condition of financial
distress and apprehension since your last adjournment which taxed to the
utmost all the authority and expedients within executive control; and
these appear now to be exhausted. If disaster results from the continued
inaction of Congress, the responsibility must rest where it belongs.

Though the situation thus far considered is fraught with danger which
should be fully realized, and though it presents features of wrong to
the people as well as peril to the country, it is but a result growing
out of a perfectly palpable and apparent cause, constantly reproducing
the same alarming circumstances--a congested National Treasury and a
depleted monetary condition in the business of the country. It need
hardly be stated that while the present situation demands a remedy, we
can only be saved from a like predicament in the future by the removal
of its cause.

Our scheme of taxation, by means of which this needless surplus is taken
from the people and put into the public Treasury, consists of a tariff
or duty levied upon importations from abroad and internal-revenue taxes
levied upon the consumption of tobacco and spirituous and malt liquors.
It must be conceded that none of the things subjected to
internal-revenue taxation are, strictly speaking, necessaries. There
appears to be no just complaint of this taxation by the consumers of
these articles, and there seems to be nothing so well able to bear the
burden without hardship to any portion of the people.

But our present tariff laws, the vicious, inequitable, and illogical
source of unnecessary taxation, ought to be at once revised and amended.
These laws, as their primary and plain effect, raise the price to
consumers of all articles imported and subject to duty by precisely the
sum paid for such duties. Thus the amount of the duty measures the tax
paid by those who purchase for use these imported articles. Many of
these things, however, are raised or manufactured in our own country,
and the duties now levied upon foreign goods and products are called
protection to these home manufactures, because they render it possible
for those of our people who are manufacturers to make these taxed
articles and sell them for a price equal to that demanded for the
imported goods that have paid customs duty. So it happens that while
comparatively a few use the imported articles, millions of our people,
who never used and never saw any of the foreign products, purchase and
use things of the same kind made in this country, and pay therefor
nearly or quite the same enhanced price which the duty adds to the
imported articles. Those who buy imports pay the duty charged thereon
into the public Treasury, but the great majority of our citizens, who
buy domestic articles of the same class, pay a sum at least
approximately equal to this duty to the home manufacturer. This
reference to the operation of our tariff laws is not made by way of
instruction, but in order that we may be constantly reminded of the
manner in which they impose a burden upon those who consume domestic
products as well as those who consume imported articles, and thus create
a tax upon all our people.

It is not proposed to entirely relieve the country of this taxation. It
must be extensively continued as the source of the Government's income;
and in a readjustment of our tariff the interests of American labor
engaged in manufacture should be carefully considered, as well as the
preservation of our manufacturers. It may be called protection or by any
other name, but relief from the hardships and dangers of our present
tariff laws should be devised with especial precaution against
imperiling the existence of our manufacturing interests. But this
existence should not mean a condition which, without regard to the
public welfare or a national exigency, must always insure the
realization of immense profits instead of moderately profitable returns.
As the volume and diversity of our national activities increase, new
recruits are added to those who desire a continuation of the advantages
which they conceive the present system of tariff taxation directly
affords them. So stubbornly have all efforts to reform the present
condition been resisted by those of our fellow-citizens thus engaged
that they can hardly complain of the suspicion, entertained to a certain
extent, that there exists an organized combination all along the line to
maintain their advantage.

We are in the midst of centennial celebrations, and with becoming pride
we rejoice in American skill and ingenuity, in American energy and
enterprise, and in the wonderful natural advantages and resources
developed by a century's national growth. Yet when an attempt is made to
justify a scheme which permits a tax to be laid upon every consumer in
the land for the benefit of our manufacturers, quite beyond a reasonable
demand for governmental regard, it suits the purposes of advocacy to
call our manufactures infant industries still needing the highest and
greatest degree of favor and fostering care that can be wrung from
Federal legislation.

It is also said that the increase in the price of domestic manufactures
resulting from the present tariff is necessary in order that higher
wages may be paid to our workingmen employed in manufactories than are
paid for what is called the pauper labor of Europe. All will acknowledge
the force of an argument which involves the welfare and liberal
compensation of our laboring people. Our labor is honorable in the eyes
of every American citizen; and as it lies at the foundation of our
development and progress, it is entitled, without affectation or
hypocrisy, to the utmost regard. The standard of our laborers' life
should not be measured by that of any other country less favored, and
they are entitled to their full share of all our advantages.

By the last census it is made to appear that of the 17,392,099 of our
population engaged in all kinds of industries 7,670,493 are employed in
agriculture, 4,074,238 in professional and personal service (2,934,876
of whom are domestic servants and laborers), while 1,810,256 are
employed in trade and transportation and 3,837,112 are classed as
employed in manufacturing and mining.

For present purposes, however, the last number given should be
considerably reduced. Without attempting to enumerate all, it will be
conceded that there should be deducted from those which it includes
375,143 carpenters and joiners, 285,401 milliners, dressmakers, and
seamstresses, 172,726 blacksmiths, 133,756 tailors and tailoresses,
102,473 masons, 76,241 butchers, 41,309 bakers, 22,083 plasterers, and
4,891 engaged in manufacturing agricultural implements, amounting in the
aggregate to 1,214,023, leaving 2,623,089 persons employed in such
manufacturing industries as are claimed to be benefited by a high
tariff.

To these the appeal is made to save their employment and maintain their
wages by resisting a change. There should be no disposition to answer
such suggestions by the allegation that they are in a minority among
those who labor, and therefore should forego an advantage in the
interest of low prices for the majority. Their compensation, as it may
be affected by the operation of tariff laws, should at all times be
scrupulously kept in view; and yet with slight reflection they will not
overlook the fact that they are consumers with the rest; that they too
have their own wants and those of their families to supply from their
earnings, and that the price of the necessaries of life, as well as the
amount of their wages, will regulate the measure of their welfare and
comfort.

But the reduction of taxation demanded should be so measured as not to
necessitate or justify either the loss of employment by the workingman
or the lessening of his wages; and the profits still remaining to the
manufacturer after a necessary readjustment should furnish no excuse for
the sacrifice of the interests of his employees, either in their
opportunity to work or in the diminution of their compensation. Nor can
the worker in manufactures fail to understand that while a high tariff
is claimed to be necessary to allow the payment of remunerative wages,
it certainly results in a very large increase in the price of nearly all
sorts of manufactures, which, in almost countless forms, he needs for
the use of himself and his family. He receives at the desk of his
employer his wages, and perhaps before he reaches his home is obliged,
in a purchase for family use of an article which embraces his own labor,
to return in the payment of the increase in price which the tariff
permits the hard-earned compensation of many days of toil.

The farmer and the agriculturist, who manufacture nothing, but who pay
the increased price which the tariff imposes upon every agricultural
implement, upon all he wears, and upon all he uses and owns, except the
increase of his flocks and herds and such things as his husbandry
produces from the soil, is invited to aid in maintaining the present
situation; and he is told that a high duty on imported wool is necessary
for the benefit of those who have sheep to shear, in order that the
price of their wool may be increased. They, of course, are not reminded
that the farmer who has no sheep is by this scheme obliged, in his
purchases of clothing and woolen goods, to pay a tribute to his
fellow-farmer as well as to the manufacturer and merchant, nor is any
mention made of the fact that the sheep owners themselves and their
households must wear clothing and use other articles manufactured from
the wool they sell at tariff prices, and thus as consumers must return
their share of this increased price to the tradesman.

I think it may be fairly assumed that a large proportion of the sheep
owned by the farmers throughout the country are found in small flocks,
numbering from twenty-five to fifty. The duty on the grade of imported
wool which these sheep yield is 10 cents each pound if of the value of
30 cents or less and 12 cents if of the value of more than 30 cents. If
the liberal estimate of 6 pounds be allowed for each fleece, the duty
thereon would be 60 or 72 cents; and this may be taken as the utmost
enhancement of its price to the farmer by reason of this duty. Eighteen
dollars would thus represent the increased price of the wool from
twenty-five sheep and $36 that from the wool of fifty sheep; and at
present values this addition would amount to about one-third of its
price. If upon its sale the farmer receives this or a less tariff
profit, the wool leaves his hands charged with precisely that sum, which
in all its changes will adhere to it until it reaches the consumer. When
manufactured into cloth and other goods and material for use, its cost
is not only increased to the extent of the farmer's tariff profit, but a
further sum has been added for the benefit of the manufacturer under the
operation of other tariff laws. In the meantime the day arrives when the
farmer finds it necessary to purchase woolen goods and material to
clothe himself and family for the winter. When he faces the tradesman
for that purpose, he discovers that he is obliged not only to return in
the way of increased prices his tariff profit on the wool he sold, and
which then perhaps lies before him in manufactured form, but that he
must add a considerable sum thereto to meet a further increase in cost
caused by a tariff duty on the manufacture. Thus in the end he is
aroused to the fact that he has paid upon a moderate purchase, as a
result of the tariff scheme, which when he sold his wool seemed so
profitable, an increase in price more than sufficient to sweep away all
the tariff profit he received upon the wool he produced and sold.

When the number of farmers engaged in wool raising is compared with all
the farmers in the country and the small proportion they bear to our
population is considered; when it is made apparent that in the case of a
large part of those who own sheep the benefit of the present tariff on
wool is illusory; and, above all, when it must be conceded that the
increase of the cost of living caused by such tariff becomes a burden
upon those with moderate means and the poor, the employed and
unemployed, the sick and well, and the young and old, and that it
constitutes a tax which with relentless grasp is fastened upon the
clothing of every man, woman, and child in the land, reasons are
suggested why the removal or reduction of this duty should be included
in a revision of our tariff laws.

In speaking of the increased cost to the consumer of our home
manufactures resulting from a duty laid upon imported articles of the
same description, the fact is not ever looked that competition among our
domestic producers sometimes has the effect of keeping the price of
their products below the highest limit allowed by such duty. But it is
notorious that this competition is too often strangled by combinations
quite prevalent at this time, and frequently called trusts, which have
for their object the regulation of the supply and price of commodities
made and sold by members of the combination. The people can hardly hope
for any consideration in the operation of these selfish schemes.

If, however, in the absence of such combination, a healthy and free
competition reduces the price of any particular dutiable article of home
production below the limit which it might otherwise reach under our
tariff laws, and if with such reduced price its manufacture continues to
thrive, it is entirely evident that one thing has been discovered which
should be carefully scrutinized in an effort to reduce taxation.

The necessity of combination to maintain the price of any commodity to
the tariff point furnishes proof that someone is willing to accept lower
prices for such commodity and that such prices are remunerative; and
lower prices produced by competition prove the same thing. Thus where
either of these conditions exists a case would seem to be presented for
an easy reduction of taxation.

The considerations which have been presented touching our tariff laws
are intended only to enforce an earnest recommendation that the surplus
revenues of the Government be prevented by the reduction of our customs
duties, and at the same time to emphasize a suggestion that in
accomplishing this purpose we may discharge a double duty to our people
by granting to them a measure of relief from tariff taxation in quarters
where it is most needed and from sources where it can be most fairly and
justly accorded.

Nor can the presentation made of such considerations be with any degree
of fairness regarded as evidence of unfriendliness toward our
manufacturing interests or of any lack of appreciation of their value
and importance.

These interests constitute a leading and most substantial element of our
national greatness and furnish the proud proof of our country's
progress. But if in the emergency that presses upon us our manufacturers
are asked to surrender something for the public good and to avert
disaster, their patriotism, as well as a grateful recognition of
advantages already afforded, should lead them to willing cooperation. No
demand is made that they shall forego all the benefits of governmental
regard; but they can not fail to be admonished of their duty, as well as
their enlightened self-interest and safety, when they are reminded of
the fact that financial panic and collapse, to which the present
condition tends, afford no greater shelter or protection to our
manufactures than to other important enterprises. Opportunity for safe,
careful, and deliberate reform is now offered; and none of us should be
unmindful of a time when an abused and irritated people, heedless of
those who have resisted timely and reasonable relief, may insist upon a
radical and sweeping rectification of their wrongs.

The difficulty attending a wise and fair revision of our tariff laws is
not underestimated. It will require on the part of the Congress great
labor and care, and especially a broad and national contemplation of the
subject and a patriotic disregard of such local and selfish claims as
are unreasonable and reckless of the welfare of the entire country.

Under our present laws more than 4,000 articles are subject to duty.
Many of these do not in any way compete with our own manufactures, and
many are hardly worth attention as subjects of revenue. A considerable
reduction can be made in the aggregate by adding them to the free list.
The taxation of luxuries presents no features of hardship; but the
necessaries of life used and consumed by all the people, the duty upon
which adds to the cost of living in every home, should be greatly
cheapened.

The radical reduction of the duties imposed upon raw material used in
manufactures, or its free importation, is of course an important factor
in any effort to reduce the price of these necessaries. It would not
only relieve them from the increased cost caused by the tariff on such
material, but the manufactured product being thus cheapened that part of
the tariff now laid upon such product, as a compensation to our
manufacturers for the present price of raw material, could be
accordingly modified. Such reduction or free importation would serve
besides to largely reduce the revenue. It is not apparent how such a
change can have any injurious effect upon our manufacturers. On the
contrary, it would appear to give them a better chance in foreign
markets with the manufacturers of other countries, who cheapen their
wares by free material. Thus our people might have the opportunity of
extending their sales beyond the limits of home consumption, saving them
from the depression, interruption in business, and loss caused by a
glutted domestic market and affording their employees more certain and
steady labor, with its resulting quiet and contentment.

The question thus imperatively presented for solution should be
approached in a spirit higher than partisanship and considered in the
light of that regard for patriotic duty which should characterize the
action of those intrusted with the weal of a confiding people. But the
obligation to declared party policy and principle is not wanting to urge
prompt and effective action. Both of the great political parties now
represented in the Government have by repeated and authoritative
declarations condemned the condition of our laws which permit the
collection from the people of unnecessary revenue, and have in the most
solemn manner promised its correction; and neither as citizens nor
partisans are our countrymen in a mood to condone the deliberate
violation of these pledges.

Our progress toward a wise conclusion will not be improved by dwelling
upon the theories of protection and free trade. This savors too much of
bandying epithets. It is a condition which confronts us, not a theory.
Relief from this condition may involve a slight reduction of the
advantages which we award our home productions, but the entire
withdrawal of such advantages should not be contemplated. The question
of free trade is absolutely irrelevant, and the persistent claim made in
certain quarters that all the efforts to relieve the people from unjust
and unnecessary taxation are schemes of so-called free traders is
mischievous and far removed from any consideration for the public good.

The simple and plain duty which we owe the people is to reduce taxation
to the necessary expenses of an economical operation of the Government
and to restore to the business of the country the money which we hold in
the Treasury through the perversion of governmental powers. These things
can and should be done with safety to all our industries, without danger
to the opportunity for remunerative labor which our workingmen need, and
with benefit to them and all our people by cheapening their means of
subsistence and increasing the measure of their comforts.

The Constitution provides that the President "shall from time to time
give to the Congress information of the state of the Union." It has been
the custom of the Executive, in compliance with this provision, to
annually exhibit to the Congress, at the opening of its session, the
general condition of the country, and to detail with some particularity
the operations of the different Executive Departments. It would be
especially agreeable to follow this course at the present time and to
call attention to the valuable accomplishments of these Departments
during the last fiscal year; but I am so much impressed with the
paramount importance of the subject to which this communication has thus
far been devoted that I shall forego the addition of any other topic,
and only urge upon your immediate consideration the "state of the Union"
as shown in the present condition of our Treasury and our general fiscal
situation, upon which every element of our safety and prosperity
depends.

The reports of the heads of Departments, which will be submitted,
contain full and explicit information touching the transaction of the
business intrusted to them and such recommendations relating to
legislation in the public interest as they deem advisable. I ask for
these reports and recommendations the deliberate examination and action
of the legislative branch of the Government.

There are other subjects not embraced in the departmental reports
demanding legislative consideration, and which I should be glad to
submit. Some of them, however, have been earnestly presented in previous
messages, and as to them I beg leave to repeat prior recommendations.

As the law makes no provision for any report from the Department of
State, a brief history of the transactions of that important Department,
together with other matters which it may hereafter be deemed essential
to commend to the attention of the Congress, may furnish the occasion
for a future communication.

***

State of the Union Address
Grover Cleveland
December 3, 1888

To the Congress of the United States:

As you assemble for the discharge of the duties you have assumed as the
representatives of a free and generous people, your meeting is marked by
an interesting and impressive incident. With the expiration of the
present session of the Congress the first century of our constitutional
existence as a nation will be completed.

Our survival for one hundred years is not sufficient to assure us that
we no longer have dangers to fear in the maintenance, with all its
promised blessings, of a government rounded upon the freedom of the
people. The time rather admonishes us to soberly inquire whether in the
past we have always closely kept in the course of safety, and whether we
have before us a way plain and clear which leads to happiness and
perpetuity.

When the experiment of our Government was undertaken, the chart adopted
for our guidance was the Constitution. Departure from the lines there
laid down is failure. It is only by a strict adherence to the direction
they indicate and by restraint within the limitations they fix that we
can furnish proof to the world of the fitness of the American people for
self-government.

The equal and exact justice of which we boast as the underlying
principle of our institutions should not be confined to the relations of
our citizens to each other. The Government itself is under bond to the
American people that in the exercise of its functions and powers it will
deal with the body of our citizens in a manner scrupulously honest and
fair and absolutely just. It has agreed that American citizenship shall
be the only credential necessary to justify the claim of equality before
the law, and that no condition in life shall give rise to discrimination
in the treatment of the people by their Government.

The citizen of our Republic in its early days rigidly insisted upon full
compliance with the letter of this bond, and saw stretching out before
him a clear field for individual endeavor. His tribute to the support of
his Government was measured by the cost of its economical maintenance,
and he was secure in the enjoyment of the remaining recompense of his
steady and contented toil. In those days the frugality of the people was
stamped upon their Government, and was enforced by the free, thoughtful,
and intelligent suffrage of the citizen. Combinations, monopolies, and
aggregations of capital were either avoided or sternly regulated and
restrained. The pomp and glitter of governments less free offered no
temptation and presented no delusion to the plain people who, side by
side, in friendly competition, wrought for the ennoblement and dignity
of man, for the solution of the problem of free government, and for the
achievement of the grand destiny awaiting the land which God had given
them.

A century has passed. Our cities are the abiding places of wealth and
luxury; our manufactories yield fortunes never dreamed of by the fathers
of the Republic; our business men are madly striving in the race for
riches, and immense aggregations of capital outrun the imagination in
the magnitude of their undertakings.

We view with pride and satisfaction this bright picture of our country's
growth and prosperity, while only a closer scrutiny develops a somber
shading. Upon more careful inspection we find the wealth and luxury of
our cities mingled with poverty and wretchedness and unremunerative
toil. A crowded and constantly increasing urban population suggests the
impoverishment of rural sections and discontent with agricultural
pursuits. The farmer's son, not satisfied with his father's simple and
laborious life, joins the eager chase for easily acquired wealth.

We discover that the fortunes realized by our manufacturers are no
longer solely the reward of sturdy industry and enlightened foresight,
but that they result from the discriminating favor of the Government and
are largely built upon undue exactions from the masses of our people.
The gulf between employers and the employed is constantly widening, and
classes are rapidly forming, one comprising the very rich and powerful,
while in another are found the toiling poor.

As we view the achievements of aggregated capital, we discover the
existence of trusts, combinations, and monopolies, while the citizen is
struggling far in the rear or is trampled to death beneath an iron heel.
Corporations, which should be the carefully restrained creatures of the
law and the servants of the people, are fast becoming the people's
masters.

Still congratulating ourselves upon the wealth and prosperity of our
country and complacently contemplating every incident of change
inseparable from these conditions, it is our duty as patriotic citizens
to inquire at the present stage of our progress how the bond of the
Government made with the people has been kept and performed.

Instead of limiting the tribute drawn from our citizens to the
necessities of its economical administration, the Government persists in
exacting from the substance of the people millions which, unapplied and
useless, lie dormant in its Treasury. This flagrant injustice and this
breach of faith and obligation add to extortion the danger attending the
diversion of the currency of the country from the legitimate channels of
business.

Under the same laws by which these results are produced the Government
permits many millions more to be added to the cost of the living of our
people and to be taken from our consumers, which unreasonably swell the
profits of a small but powerful minority.

The people must still be taxed for the support of the Government under
the operation of tariff laws. But to the extent that the mass of our
citizens are inordinately burdened beyond any useful public purpose and
for the benefit of a favored few, the Government, under pretext of an
exercise of its taxing power, enters gratuitously into partnership with
these favorites, to their advantage and to the injury of a vast majority
of our people.

This is not equality before the law.

The existing situation is injurious to the health of our entire body
politic. It stifles in those for whose benefit it is permitted all
patriotic love of country, and substitutes in its place selfish greed
and grasping avarice. Devotion to American citizenship for its own sake
and for what it should accomplish as a motive to our nation's
advancement and the happiness of all our people is displaced by the
assumption that the Government, instead of being the embodiment of
equality, is but an instrumentality through which especial and
individual advantages are to be gained.

The arrogance of this assumption is unconcealed. It appears in the
sordid disregard of all but personal interests, in the refusal to abate
for the benefit of others one iota of selfish advantage, and in
combinations to perpetuate such advantages through efforts to control
legislation and improperly influence the suffrages of the people.

The grievances of those not included within the circle of these
beneficiaries, when fully realized, will surely arouse irritation and
discontent. Our farmers, long suffering and patient, struggling in the
race of life with the hardest and most unremitting toil, will not fail
to see, in spite of misrepresentations and misleading fallacies, that
they are obliged to accept such prices for their products as are fixed
in foreign markets where they compete with the farmers of the world;
that their lands are declining in value while their debts increase, and
that without compensating favor they are forced by the action of the
Government to pay for the benefit of others such enhanced prices for the
things they need that the scanty returns of their labor fail to furnish
their support or leave no margin for accumulation.

Our workingmen, enfranchised from all delusions and no longer frightened
by the cry that their wages are endangered by a just revision of our
tariff laws, will reasonably demand through such revision steadier
employment, cheaper means of living in their homes, freedom for
themselves and their children from the doom of perpetual servitude, and
an open door to their advancement beyond the limits of a laboring class.
Others of our citizens, whose comforts and expenditures are measured by
moderate salaries and fixed incomes, will insist upon the fairness and
justice of cheapening the cost of necessaries for themselves and their
families.

When to the selfishness of the beneficiaries of unjust discrimination
under our laws there shall be added the discontent of those who suffer
from such discrimination, we will realize the fact that the beneficent
purposes of our Government, dependent upon the patriotism and
contentment of our people, are endangered.

Communism is a hateful thing and a menace to peace and organized
government; but the communism of combined wealth and capital, the
outgrowth of overweening cupidity and selfishness, which insidiously
undermines the justice and integrity of free institutions, is not less
dangerous than the communism of oppressed poverty and toil, which,
exasperated by injustice and discontent, attacks with wild disorder the
citadel of rule.

He mocks the people who proposes that the Government shall protect the
rich and that they in turn will care for the laboring poor. Any
intermediary between the people and their Government or the least
delegation of the care and protection the Government owes to the
humblest citizen in the land makes the boast of free institutions a
glittering delusion and the pretended boon of American citizenship a
shameless imposition.

A just and sensible revision of our tariff laws should be made for the
relief of those of our countrymen who suffer under present conditions.
Such a revision should receive the support of all who love that justice
and equality due to American citizenship; of all who realize that in
this justice and equality our Government finds its strength and its
power to protect the citizen and his property; of all who believe that
the contented competence and comfort of many accord better with the
spirit of our institutions than colossal fortunes unfairly gathered in
the hands of a few; of all who appreciate that the forbearance and
fraternity among our people, which recognize the value of every American
interest, are the surest guaranty of our national progress, and of all
who desire to see the products of American skill and ingenuity in every
market of the world, with a resulting restoration of American commerce.

The necessity of the reduction of our revenues is so apparent as to be
generally conceded, but the means by which this end shall be
accomplished and the sum of direct benefit which shall result to our
citizens present a controversy of the utmost importance. There should be
no scheme accepted as satisfactory by which the burdens of the people
are only apparently removed. Extravagant appropriations of public money,
with all their demoralizing consequences, should not be tolerated,
either as a means of relieving the Treasury of its present surplus or as
furnishing pretext for resisting a proper reduction in tariff rates.
Existing evils and injustice should be honestly recognized, boldly met,
and effectively remedied. There should be no cessation of the struggle
until a plan is perfected, fair and conservative toward existing
industries, but which will reduce the cost to consumers of the
necessaries of life, while it provides for our manufacturers the
advantage of freer raw materials and permits no injury to the interests
of American labor.

The cause for which the battle is waged is comprised within lines
clearly and distinctly defined. It should never be compromised. It is
the people's cause.

It can not be denied that the selfish and private interests which are so
persistently heard when efforts are made to deal in a just and
comprehensive manner with our tariff laws are related to, if they are
not responsible for, the sentiment largely prevailing among the people
that the General Government is the fountain of individual and private
aid; that it may be expected to relieve with paternal care the distress
of citizens and communities, and that from the fullness of its Treasury
it should, upon the slightest possible pretext of promoting the general
good, apply public funds to the benefit of localities and individuals.
Nor can it be denied that there is a growing assumption that, as against
the Government and in favor of private claims and interests, the usual
rules and limitations of business principles and just dealing should be
waived.

These ideas have been unhappily much encouraged by legislative
acquiescence. Relief from contracts made with the Government is too
easily accorded in favor of the citizen; the failure to support claims
against the Government by proof is often supplied by no better
consideration than the wealth of the Government and the poverty of the
claimant; gratuities in the form of pensions are granted upon no other
real ground than the needy condition of the applicant, or for reasons
less valid; and large sums are expended for public buildings and other
improvements upon representations scarcely claimed to be related to
public needs and necessities.

The extent to which the consideration of such matters subordinate and
postpone action upon subjects of great public importance, but involving
no special private or partisan interest, should arrest attention and
lead to reformation.

A few of the numerous illustrations of this condition may be stated.

The crowded condition of the calendar of the Supreme Court, and the
delay to suitors and denial of justice resulting therefrom, has been
strongly urged upon the attention of the Congress, with a plan for the
relief of the situation approved by those well able to judge of its
merits. While this subject remains without effective consideration, many
laws have been passed providing for the holding of terms of inferior
courts at places to suit the convenience of localities, or to lay the
foundation of an application for the erection of a new public building.

Repeated recommendations have been submitted for the amendment and
change of the laws relating to our public lands so that their spoliation
and diversion to other uses than as homes for honest settlers might be
prevented. While a measure to meet this conceded necessity of reform
remains awaiting the action of the Congress, many claims to the public
lands and applications for their donation, in favor of States and
individuals, have been allowed.

A plan in aid of Indian management, recommended by those well informed
as containing valuable features in furtherance of the solution of the
Indian problem, has thus far failed of legislative sanction, while
grants of doubtful expediency to railroad corporations, permitting them
to pass through Indian reservations, have greatly multiplied.

The propriety and necessity of the erection of one or more prisons for
the confinement of United States convicts, and a post-office building in
the national capital, are not disputed. But these needs yet remain
answered, while scores of public buildings have been erected where their
necessity for public purposes is not apparent.

A revision of our pension laws could easily be made which would rest
upon just principles and provide for every worthy applicant. But while
our general pension laws remain confused and imperfect, hundreds of
private pension laws are annually passed, which are the sources of
unjust discrimination and popular demoralization.

Appropriation bills for the support of the Government are defaced by
items and provisions to meet private ends, and it is freely asserted by
responsible and experienced parties that a bill appropriating money for
public internal improvement would fail to meet with favor unless it
contained items more for local and private advantage than for public
benefit.

These statements can be much emphasized by an ascertainment of the
proportion of Federal legislation which either bears upon its face its
private character or which upon examination develops such a motive
power.

And yet the people wait and expect from their chosen representatives
such patriotic action as will advance the welfare of the entire country;
and this expectation can only be answered by the performance of public
duty with unselfish purpose. Our mission among the nations of the earth
and our success in accomplishing the work God has given the American
people to do require of those intrusted with the making and execution of
our laws perfect devotion, above all other things, to the public good.

This devotion will lead us to strongly resist all impatience of
constitutional limitations of Federal power and to persistently check
the increasing tendency to extend the scope of Federal legislation into
the domain of State and local jurisdiction upon the plea of subserving
the public welfare. The preservation of the partitions between proper
subjects of Federal and local care and regulation is of such importance
under the Constitution, which is the law of our very existence, that no
consideration of expediency or sentiment should tempt us to enter upon
doubtful ground. We have undertaken to discover and proclaim the richest
blessings of a free government, with the Constitution as our guide. Let
us follow the way it points out; it will not mislead us. And surely no
one who has taken upon himself the solemn obligation to support and
preserve the Constitution can find justification or solace for
disloyalty in the excuse that he wandered and disobeyed in search of a
better way to reach the public welfare than the Constitution offers.

What has been said is deemed not inappropriate at a time when, from a
century's height, we view the way already trod by the American people
and attempt to discover their future path.

The seventh President of the United States--the soldier and statesman
and at all times the firm and brave friend of the people--in vindication
of his course as the protector of popular rights and the champion of
true American citizenship, declared: The ambition which leads me on is
an anxious desire and a fixed determination to restore to the people
unimpaired the sacred trust they have confided to my charge; to, heal
the wounds of the Constitution and to preserve it from further
violation; to persuade my countrymen, so far as I may, that it is not in
a splendid government supported by powerful monopolies and
aristocratical establishments that they will find happiness or their
liberties protection, but in a plain system, void of pomp, protecting
all and granting favors to none, dispensing its blessings like the dews
of heaven, unseen and unfelt save in the freshness and beauty they
contribute to produce. It is such a government that the genius of our
people requires--such an one only under which our States may remain for
ages to come united, prosperous, and free. In pursuance of a
constitutional provision requiring the President from time to time to
give to the Congress information of the state of the Union, I have the
satisfaction to announce that the close of the year finds the United
States in the enjoyment of domestic tranquillity and at peace with all
the nations.

Since my last annual message our foreign relations have been
strengthened and improved by performance of international good offices
and by new and renewed treaties of amity, commerce, and reciprocal
extradition of criminals.

Those international questions which still await settlement are all
reasonably within the domain of amicable negotiation, and there is no
existing subject of dispute between the United States and any foreign
power that is not susceptible of satisfactory adjustment by frank
diplomatic treatment.

The questions between Great Britain and the United States relating to
the rights of American fishermen, under treaty and international comity,
in the territorial waters of Canada and Newfoundland, I regret to say,
are not yet satisfactorily adjusted.

These matters were fully treated in my message to the Senate of February
20 1888, together with which a convention, concluded under my authority
with Her Majesty's Government on the 15th of February last, for the
removal of all causes of misunderstanding, was submitted by me for the
approval of the Senate.

This treaty having been rejected by the Senate, I transmitted a message
to the Congress on the 23d of August last reviewing the transactions and
submitting for consideration certain recommendations for legislation
concerning the important questions involved.

Afterwards, on the 12th of September, in response to a resolution of the
Senate, I again communicated fully all the information in my possession
as to the action of the government of Canada affecting the commercial
relations between the Dominion and the United States, including the
treatment of American fishing vessels in the ports and waters of British
North America.

These communications have all been published, and therefore opened to
the knowledge of both Houses of Congress, although two were addressed to
the Senate alone.

Comment upon or repetition of their contents would be superfluous, and I
am not aware that anything has since occurred which should be added to
the facts therein stated. Therefore I merely repeat, as applicable to
the present time, the statement which will be found in my message to the
Senate of September 12 last, that--Since March 3, 1887, no case has been
reported to the Department of State wherein complaint was made of
unfriendly or unlawful treatment of American fishing vessels on the part
of the Canadian authorities in which reparation was not promptly and
satisfactorily obtained by the United States consul-general at Halifax.
Having essayed in the discharge of my duty to procure by negotiation the
settlement of a long-standing cause of dispute and to remove a constant
menace to the good relations of the two countries, and continuing to be
of opinion that the treaty of February last, which failed to receive the
approval of the Senate, did supply "a satisfactory, practical, and final
adjustment, upon a basis honorable and just to both parties, of the
difficult and vexed question to which it related," and having
subsequently and unavailingly recommended other legislation to Congress
which I hoped would suffice to meet the exigency created by the
rejection of the treaty, I now again invoke the earnest and immediate
attention of the Congress to the condition of this important question as
it now stands before them and the country, and for the settlement of
which I am deeply solicitous.

Near the close of the month of October last occurrences of a deeply
regrettable nature were brought to my knowledge, which made it my
painful but imperative duty to obtain with as little delay as possible a
new personal channel of diplomatic intercourse in this country with the
Government of Great Britain.

The correspondence in relation to this incident will in due course be
laid before you, and will disclose the unpardonable conduct of the
official referred to in his interference by advice and counsel with the
suffrages of American citizens in the very crisis of the Presidential
election then near at hand, and also in his subsequent public
declarations to justify his action, superadding impugnment of the
Executive and Senate of the United States in connection with important
questions now pending in controversy between the two Governments.

The offense thus committed was most grave, involving disastrous
possibilities to the good relations of the United States and Great
Britain, constituting a gross breach of diplomatic privilege and an
invasion of the purely domestic affairs and essential sovereignty of the
Government to which the envoy was accredited.

Having first fulfilled the just demands of international comity by
affording full opportunity for Her Majesty's Government to act in relief
of the situation, I considered prolongation of discussion to be
unwarranted, and thereupon declined to further recognize the diplomatic
character of the person whose continuance in such function would destroy
that mutual confidence which is essential to the good understanding of
the two Governments and was inconsistent with the welfare and
self-respect of the Government of the United States.

The usual interchange of communication has since continued through Her
Majesty's legation in this city.

My endeavors to establish by international cooperation measures for the
prevention of the extermination of fur seals in Bering Sea have not been
relaxed, and I have hopes of being enabled shortly to submit an
effective and satisfactory conventional projet with the maritime powers
for the approval of the Senate.

The coastal boundary between our Alaskan possessions and British
Columbia, I regret to say, has not received the attention demanded by
its importance, and which on several occasions heretofore I have had the
honor to recommend to the Congress.

The admitted impracticability, if not impossibility, of making an
accurate and precise survey and demarcation of the boundary line as it
is recited in the treaty with Russia under which Alaska was ceded to the
United States renders it absolutely requisite for the prevention of
international jurisdictional complications that adequate appropriation
for a reconnoissance and survey to obtain proper knowledge of the
locality and the geographical features of the boundary should be
authorized by Congress with as little delay as possible.

Knowledge to be only thus obtained is an essential prerequisite for
negotiation for ascertaining a common boundary, or as preliminary to any
other mode of settlement.

It is much to be desired that some agreement should be reached with Her
Majesty's Government by which the damages to life and property on the
Great Lakes may be alleviated by removing or humanely regulating the
obstacles to reciprocal assistance to wrecked or stranded vessels.

The act of June 19, 1878, which offers to Canadian vessels free access
to our inland waters in aid of wrecked or disabled vessels, has not yet
become effective through concurrent action by Canada.

The due protection of our citizens of French origin or descent from
claim of military service in the event of their returning to or visiting
France has called forth correspondence which was laid before you at the
last session.

In the absence of conventional agreement as to naturalization, which is
greatly to be desired, this Government sees no occasion to recede from
the sound position it has maintained not only with regard to France, but
as to all countries with which the United States have not concluded
special treaties.

Twice within the last year has the imperial household of Germany been
visited by death; and I have hastened to express the sorrow of this
people, and their appreciation of the lofty character of the late aged
Emperor William, and their sympathy with the heroism under suffering of
his son the late Emperor Frederick.

I renew my recommendation of two years ago for the passage of a bill for
the refunding to certain German steamship lines of the interest upon
tonnage dues illegally exacted.

On the 12th [2d] of April last I laid before the House of
Representatives full information respecting our interests in Samoa; and
in the subsequent correspondence on the same subject, which will be laid
before you in due course, the history of events in those islands will be
found.

In a message accompanying my approval, on the 1st day of October last,
of a bill for the exclusion of Chinese laborers, I laid before Congress
full information and all correspondence touching the negotiation of the
treaty with China concluded at this capital on the 12th day of March,
1888, and which, having been confirmed by the Senate with certain
amendments, was rejected by the Chinese Government. This message
contained a recommendation that a sum of money be appropriated as
compensation to Chinese subjects who had suffered injuries at the hands
of lawless men within our jurisdiction. Such appropriation having been
duly made, the fund awaits reception by the Chinese Government.

It is sincerely hoped that by the cessation of the influx of this class
of Chinese subjects, in accordance with the expressed wish of both
Governments, a cause of unkind feeling has been permanently removed.

On the 9th of August, 1887, notification was given by the Japanese
minister at this capital of the adjournment of the conference for the
revision of the treaties of Japan with foreign powers, owing to the
objection of his Government to the provision in the draft jurisdictional
convention which required the submission of the criminal code of the
Empire to the powers in advance of its becoming operative. This
notification was, however, accompanied with an assurance of Japan's
intention to continue the work of revision.

Notwithstanding this temporary interruption of negotiations, it is hoped
that improvements may soon be secured in the jurisdictional system as
respects foreigners in Japan, and relief afforded to that country from
the present undue and oppressive foreign control in matters of commerce.

I earnestly recommend that relief be provided for the injuries
accidentally caused to Japanese subjects in the island Ikisima by the
target practice of one of our vessels.

A diplomatic mission from Korea has been received, and the formal
intercourse between the two countries contemplated by the treaty of 1882
is now established.

Legislative provision is hereby recommended to organize and equip
consular courts in Korea.

Persia has established diplomatic representation at this capital, and
has evinced very great interest in the enterprise and achievements of
our citizens. I am therefore hopeful that beneficial commercial
relations between the two countries may be brought about.

I announce with sincere regret that Hayti has again become the theater
of insurrection, disorder, and bloodshed. The titular government of
president Saloman has been forcibly overthrown and he driven out of the
country to France, where he has since died.

The tenure of power has been so unstable amid the war of factions that
has ensued since the expulsion of President Saloman that no government
constituted by the will of the Haytian people has been recognized as
administering responsibly the affairs of that country. Our
representative has been instructed to abstain from interference between
the warring factions, and a vessel of our Navy has been sent to Haytian
waters to sustain our minister and for the protection of the persons and
property of American citizens.

Due precautions have been taken to enforce our neutrality laws and
prevent our territory from becoming the base of military supplies for
either of the warring factions.

Under color of a blockade, of which no reasonable notice had been given,
and which does not appear to have been efficiently maintained, a seizure
of vessels under the American flag has been reported, and in consequence
measures to prevent and redress any molestation of our innocent
merchantmen have been adopted.

Proclamation was duly made on the 9th day of November, 1887, of the
conventional extensions of the treaty of June 3, 1875, with Hawaii,
under which relations of such special and beneficent intercourse have
been created.

In the vast field of Oriental commerce now unfolded from our Pacific
borders no feature presents stronger recommendations for Congressional
action than the establishment of communication by submarine telegraph
with Honolulu.

The geographical position of the Hawaiian group in relation to our
Pacific States creates a natural interdependency and mutuality of
interest which our present treaties were intended to foster, and which
make close communication a logical and commercial necessity.

The wisdom of concluding a treaty of commercial reciprocity with Mexico
has been heretofore stated in my messages to Congress, and the lapse of
time and growth of commerce with that close neighbor and sister Republic
confirm the judgment so expressed.

The precise relocation of our boundary line is needful, and adequate
appropriation is now recommended.

It is with sincere satisfaction that I am enabled to advert to the
spirit of good neighborhood and friendly cooperation and conciliation
that has marked the correspondence and action of the Mexican authorities
in their share of the task of maintaining law and order about the line
of our common boundary.

The long-pending boundary dispute between Costa Rica and Nicaragua was
referred to my arbitration, and by an award made on the 22d of March
last the question has been finally settled to the expressed satisfaction
of both of the parties in interest.

The Empire of Brazil, in abolishing the last vestige of slavery among
Christian nations, called forth the earnest congratulations of this
Government in expression of the cordial sympathies of our people.

The claims of nearly all other countries against Chile growing out of
her late war with Bolivia and Peru have been disposed of, either by
arbitration or by a lump settlement. Similar claims of our citizens will
continue to be urged upon the Chilean Government, and it is hoped will
not be subject to further delays.

A comprehensive treaty of amity and commerce with Peru was proclaimed on
November 7 last, and it is expected that under its operation mutual
prosperity and good understanding will be promoted.

In pursuance of the policy of arbitration, a treaty to settle the claim
of Santos, an American citizen, against Ecuador has been concluded under
my authority, and will be duly submitted for the approval of the Senate.

Like disposition of the claim of Carlos Butterfield against Denmark and
of Van Bokkelen against Hayti will probably be made, and I trust the
principle of such settlements may be extended in practice under the
approval of the Senate.

Through unforeseen causes, foreign to the will of both Governments, the
ratification of the convention of December 5, 1885, with Venezuela, for
the rehearing of claims of citizens of the United States under the
treaty of 1866, failed of exchange within the term provided, and a
supplementary convention, further extending the time for exchange of
ratifications and explanatory of an ambiguous provision of the prior
convention, now awaits the advice and consent of the Senate.

Although this matter, in the stage referred to, concerns only the
concurrent treaty-making power of one branch of Congress, I advert to it
in view of the interest repeatedly and conspicuously shown by you in
your legislative capacity in favor of a speedy and equitable adjustment
of the questions growing out of the discredited judgments of the
previous mixed commission of Caracas. With every desire to do justice to
the representations of Venezuela in this regard, the time seems to have
come to end this matter, and I trust the prompt confirmation by both
parties of the supplementary action referred to will avert the need of
legislative or other action to prevent the longer withholding of such
rights of actual claimants as may be shown to exist.

As authorized by the Congress, preliminary steps have been taken for the
assemblage at this capital during the coming year of the representatives
of South and Central American States, together with those of Mexico,
Hayti, and San Domingo, to discuss sundry important monetary and
commercial topics.

Excepting in those cases where, from reasons of contiguity of territory
and the existence of a common border line incapable of being guarded,
reciprocal commercial treaties may be found expedient, it is believed
that commercial policies inducing freer mutual exchange of products can
be most advantageously arranged by independent but cooperative
legislation.

In the mode last mentioned the control of our taxation for revenue will
be always retained in our own hands unrestricted by conventional
agreements with other governments.

In conformity also with Congressional authority, the maritime powers
have been invited to confer in Washington in April next upon the
practicability of devising uniform rules and measures for the greater
security of life and property at sea. A disposition to accept on the
part of a number of the powers has already been manifested, and if the
cooperation of the nations chiefly interested shall be secured important
results may be confidently anticipated.

The act of June 26, 1884, and the acts amendatory thereof, in relation
to tonnage duties, have given rise to extended correspondence with
foreign nations with whom we have existing treaties of navigation and
commerce, and have caused wide and regrettable divergence of opinion in
relation to the imposition of the duties referred to. These questions
are important, and I shall make them the subject of a special and more
detailed communication at the present session.

With the rapid increase of immigration to our shores and the facilities
of modern travel, abuses of the generous privileges afforded by our
naturalization laws call for their careful revision.

The easy and unguarded manner in which certificates of American
citizenship can now be obtained has induced a class, unfortunately
large, to avail themselves of the opportunity to become absolved from
allegiance to their native land, and yet by a foreign residence to
escape any just duty and contribution of service to the country of their
proposed adoption. Thus, while evading the duties of citizenship to the
United States, they may make prompt claim for its national protection
and demand its intervention in their behalf. International complications
of a serious nature arise, and the correspondence of the State
Department discloses the great number and complexity of the questions
which have been raised.

Our laws regulating the issue of passports should be carefully revised,
and the institution of a central bureau of registration at the capital
is again strongly recommended. By this means full particulars of each
case of naturalization in the United States would be secured and
properly indexed and recorded, and thus many cases of spurious
citizenship would be detected and unjust responsibilities would be
avoided.

The reorganization of the consular service is a matter of serious
importance to our national interests. The number of existing principal
consular offices is believed to be greater than is at all necessary for
the conduct of the public business. It need not be our policy to
maintain more than a moderate number of principal offices, each
supported by a salary sufficient to enable the incumbent to live in
comfort, and so distributed as to secure the convenient supervision,
through subordinate agencies, of affairs over a considerable district.

I repeat the recommendations heretofore made by me that the
appropriations for the maintenance of our diplomatic and consular
service should be recast; that the so-called notarial or unofficial
fees, which our representatives abroad are now permitted to treat as
personal perquisites, should be forbidden; that a system of consular
inspection should be instituted, and that a limited number of
secretaries of legation at large should be authorized.

Preparations for the centennial celebration, on April 30, 1889, of the
inauguration of George Washington as President of the United States, at
the city of New York, have been made by a voluntary organization of the
citizens of that locality, and believing that an opportunity should be
afforded for the expression of the interest felt throughout the country
in this event, I respectfully recommend fitting and cooperative action
by Congress on behalf of the people of the United States.

The report of the Secretary of the Treasury exhibits in detail the
condition of our national finances and the operations of the several
branches of the Government related to his Department.

The total ordinary revenues of the Government for the fiscal year ended
June 30, 1888, amounted to $379,266,074.76, of which $219,091,173.63 was
received from customs duties and $124,296,871.98 from internal revenue
taxes.

The total receipts from all sources exceeded those for the fiscal year
ended June 30, 1887, by $7,862,797.10.

The ordinary expenditures of the Government for the fiscal year ending
June 30, 1888, were $259,653,958.67, leaving a surplus of
$119,612,116.09.

The decrease in these expenditures as compared with the fiscal year
ended June 30, 1887, was $8,278,221.30, notwithstanding the payment of
more than $5,000,000 for pensions in excess of what was paid for that
purpose in the latter-mentioned year.

The revenues of the Government for the year ending June 30, 1889,
ascertained for the quarter ended September 30, 1888, and estimated for
the remainder of the time, amount to $377,000,000, and the actual and
estimated ordinary expenditures for the same year are $273,000,000,
leaving an estimated surplus of $104,000,000.

The estimated receipts for the year ending June 30, 1890, are
$377,000,000, and the estimated ordinary expenditures for the same time
are $275,767,488.34, showing a surplus of $101,232,511.66.

The foregoing statements of surplus do not take into account the sum
necessary to be expended to meet the requirements of the sinking-fund
act, amounting to more than $47,000,000 annually.

The cost of collecting the customs revenues for the last fiscal year was
2.44 per cent; for the year 1885 it was 3.77 per cent.

The excess of internal-revenue taxes collected during the last fiscal
year over those collected for the year ended June 30, 1887, was
$5,489,174.26, and the cost of collecting this revenue decreased from
3.4 per cent in 1887 to less than 3.2 per cent for the last year. The
tax collected on oleomargarine was $723,948.04 for the year ending June
30, 1887, and $864,139.88 for the following year.

The requirements of the sinking-fund act have been met for the year
ended June 30, 1888, and for the current year also, by the purchase of
bonds. After complying with this law as positively required, and bonds
sufficient for that purpose had been bought at a premium, it was not
deemed prudent to further expend the surplus in such purchases until the
authority to do so should be more explicit. A resolution, however,
having been passed by both Houses of Congress removing all doubt as to
Executive authority, daily purchases of bonds were commenced on the 23d
day of April, 1888, and have continued until the present time. By this
plan bonds of the Government not yet due have been purchased up to and
including the 30th day of November, 1888, amounting to $94,700,400, the
premium paid thereon amounting to $17,508,613.08.

The premium added to the principal of these bonds represents an
investment yielding about 2 per cent interest for the time they still
had to run, and the saving to the Government represented by the
difference between the amount of interest at 2 per cent upon the sum
paid for principal and premium and what it would have paid for interest
at the rate specified in the bonds if they had run to their maturity is
about $27,165,000.

At first sight this would seem to be a profitable and sensible
transaction on the part of the Government, but, as suggested by the
Secretary of the Treasury, the surplus thus expended for the purchase of
bonds was money drawn from the people in excess of any actual need of
the Government and was so expended rather than allow it to remain idle
in the Treasury. If this surplus, under the operation of just and
equitable laws, had been left in the hands of the people, it would have
been worth in their business at least 6 per cent per annum. Deducting
from the amount of interest upon the principal and premium of these
bonds for the time they had to run at the rate of 6 per cent the saving
of 2 per cent made for the people by the purchase of such bonds, the
loss will appear to be $55,760,000.

This calculation would seem to demonstrate that if excessive and
unnecessary taxation is continued and the Government is forced to pursue
this policy of purchasing its own bonds at the premiums which it will be
necessary to pay, the loss to the people will be hundreds of millions of
dollars.

Since the purchase of bonds was undertaken as mentioned nearly all that
have been offered were at last accepted. It has been made quite apparent
that the Government was in danger of being subjected to combinations to
raise their price, as appears by the instance cited by the Secretary of
the offering of bonds of the par value of only $326,000 so often that
the aggregate of the sums demanded for their purchase amounted to more
than $ 19,700,000.

Notwithstanding the large sums paid out in the purchase of bonds, the
surplus in the Treasury on the 30th day of November, 1888, was
$52,234,610.01, after deducting about $20,000,000 just drawn out for the
payment of pensions.

At the close of the fiscal year ended June 30, 1887, there had been
coined under the compulsory silver-coinage act $266,988,280 in silver
dollars, $55,504,310 of which were in the hands of the people.

On the 30th day of June, 1888, there had been coined $299,708,790; and
of this $55,829,303 was in circulation in coin, and $200,387,376 in
silver certificates, for the redemption of which silver dollars to that
amount were held by the Government.

On the 30th day of November, 1888, $312,570,990 had been coined,
$60,970,990 of the silver dollars were actually in circulation, and
$237,418,346 in certificates.

The Secretary recommends the suspension of the further coinage of
silver, and in such recommendation I earnestly concur.

For further valuable information and timely recommendations I ask the
careful attention of the Congress to the Secretary's report.

The Secretary of War reports that the Army at the date of the last
consolidated returns consisted of 2,189 officers and 24,549 enlisted
men.

The actual expenditures of the War Department for the fiscal year ended
June 30, 1888, amounted to $41,165,107.07, of which sum $9,158,516.63
was expended for public works, including river and harbor improvements.

"The Board of Ordnance and Fortifications" provided for under the act
approved September 22 last was convened October 30, 1888, and plans and
specifications for procuring forgings for 8, 10, and 12 inch guns, under
provisions of section 4, and also for procuring 12-inch breech-loading
mortars, cast iron, hooped with steel, under the provisions of section 5
of the said act, were submitted to the Secretary of War for reference to
the board, by the Ordnance Department, on the same date.

These plans and specifications having been promptly approved by the
board and the Secretary of War, the necessary authority to publish
advertisements inviting proposals in the newspapers throughout the
country was granted by the Secretary on November 12, and on November 13
the advertisements were sent out to the different newspapers designated.
The bids for the steel forgings are to be opened on December 20, 1888,
and for the mortars on December 15, 1888.

A board of ordnance officers was convened at the Watervliet Arsenal on
October 4, 1888, to prepare the necessary plans and specifications for
the establishment of an army gun factory at that point. The preliminary
report of this board, with estimates for shop buildings and officers'
quarters, was approved by the Board of Ordnance and Fortifications
November 6 and 8. The specifications and form of advertisement and
instructions to bidders have been prepared, and advertisements inviting
proposals for the excavations for the shop building and for erecting the
two sets of officers' quarters have been published. The detailed
drawings and specifications for the gun-factory building are well in
hand, and will be finished within three or four months, when bids will
be invited for the erection of the building. The list of machines, etc.,
is made out, and it is expected that the plans for the large lathes,
etc., will be completed within about four months, and after approval by
the Board of Ordnance and Fortifications bids for furnishing the same
will be invited. The machines and other fixtures will be completed as
soon as the shop is in readiness to receive them, probably about July,
1890.

Under the provisions of the Army bill for the procurement of pneumatic
dynamite guns, the necessary specifications are now being prepared, and
advertisements for proposals will issue early in December. The guns will
probably be of 15 inches caliber and fire a projectile that will carry a
charge each of about 500 pounds of explosive gelatine with full-caliber
projectiles. The guns will probably be delivered in from six to ten
months from the date of the contract, so that all the guns of this class
that can be procured under the provisions of the law will be purchased
during the year 1889.

I earnestly request that the recommendations contained in the
Secretary's report, all of which are, in my opinion, calculated to
increase the usefulness and discipline of the Army, may receive the
consideration of the Congress. Among these the proposal that there
should be provided a plan for the examination of officers to test their
fitness for promotion is of the utmost importance. This reform has been
before recommended in the reports of the Secretary, and its expediency
is so fully demonstrated by the argument he presents in its favor that
its adoption should no longer be neglected.

The death of General Sheridan in August last was a national affliction.
The Army then lost the grandest of its chiefs. The country lost a brave
and experienced soldier, a wise and discreet counselor, and a modest and
sensible man. Those who in any manner came within the range of his
personal association will never fail to pay deserved and willing homage
to his greatness and the glory of his career, but they will cherish with
more tender sensibility the loving memory of his simple, generous, and
considerate nature.

The Apache Indians, whose removal from their reservation in Arizona
followed the capture of those of their number who engaged in a bloody
and murderous raid during a part of the years 1885 and 1886, are now
held as prisoners of war at Mount Vernon Barracks, in the State of
Alabama. They numbered on the 31st day of October, the date of the last
report, 83 men, 170 women, 70 boys, and 59 girls; in all, 382 persons.
The commanding officer states that they are in good health and
contented, and that they are kept employed as fully as is possible in
the circumstances. The children, as they arrive at a suitable age, are
sent to the Indian schools at Carlisle and Hampton.

Last summer some charitable and kind people asked permission to send two
teachers to these Indians for the purpose of instructing the adults as
well as such children as should be found there. Such permission was
readily granted, accommodations were provided for the teachers, and some
portions of the buildings at the barracks were made available for school
purposes. The good work contemplated has been commenced, and the
teachers engaged are paid by the ladies with whom the plan originated.

I am not at all in sympathy with those benevolent but injudicious people
who are constantly insisting that these Indians should be returned to
their reservation. Their removal was an absolute necessity if the lives
and property of citizens upon the frontier are to be at all regarded by
the Government. Their continued restraint at a distance from the scene
of their repeated and cruel murders and outrages is still necessary. It
is a mistaken philanthropy, every way injurious, which prompts the
desire to see these savages returned to their old haunts. They are in
their present location as the result of the best judgment of those
having official responsibility in the matter, and who are by no means
lacking in kind consideration for the Indians. A number of these
prisoners have forfeited their lives to outraged law and humanity.
Experience has proved that they are dangerous and can not be trusted.
This is true not only of those who on the warpath have heretofore
actually been guilty of atrocious murder, but of their kindred and
friends, who, while they remained upon their reservation, furnished aid
and comfort to those absent with bloody intent.

These prisoners should be treated kindly and kept in restraint far from
the locality of their former reservation; they should be subjected to
efforts calculated to lead to their improvement and the softening of
their savage and cruel instincts, but their return to their old home
should be persistently resisted.

The Secretary in his report gives a graphic history of these Indians,
and recites with painful vividness their bloody deeds and the unhappy
failure of the Government to manage them by peaceful means. It will be
amazing if a perusal of this history will allow the survival of a desire
for the return of these prisoners to their reservation upon sentimental
or any other grounds.

The report of the Secretary of the Navy demonstrates very intelligent
management in that important Department, and discloses the most
satisfactory progress in the work of reconstructing the Navy made during
the past year. Of the ships in course of construction five, viz, the
Charleston, Baltimore, Yorktown, Vesuvius, and the Petrel, have in that
time been launched and are rapidly approaching completion; and in
addition to the above, the Philadelphia, the San Francisco, the Newark,
the Bennington, the Concord, and the Herreshoff torpedo boat are all
under contract for delivery to the Department during the next year. The
progress already made and being made gives good ground for the
expectation that these eleven vessels will be incorporated as part of
the American Navy within the next twelve months.

The report shows that notwithstanding the large expenditures for new
construction and the additional labor they involve the total ordinary or
current expenditures of the Department for the three years ending June
30, 1888, are less by more than 20 per cent than such expenditures for
the three years ending June 30, 1884.

The various steps which have been taken to improve the business methods
of the Department are reviewed by the Secretary. The purchasing of
supplies has been consolidated and placed under a responsible bureau
head. This has resulted in the curtailment of open purchases, which in
the years 1884 and 1885 amounted to over 50 per cent of all the
purchases of the Department, to less than 11 per cent; so that at the
present time about 90 per cent of the total departmental purchases are
made by contract and after competition. As the expenditures on this
account exceed an average of $2,000,000 annually, it is evident that an
important improvement in the system has been inaugurated and substantial
economies introduced.

The report of the Postmaster-General shows a marked increase of business
in every branch of the postal service.

The number of post-offices on July 1, 1888, was 57,376, an increase of
6,124 in three years and of 2,219 for the last fiscal year. The
latter-mentioned increase is classified as follows:

New England States -

Middle States - 181

Southern States and Indian Territory (41) - 1,406

The States and Territories of the Pacific Coast - 190

The ten States and Territories of the West and Northwest - 435

District of Columbia - 2 -

***

State of the Union Address
Benjamin Harrison
December 3, 1889

To the Senate and House of Representatives:

There are few transactions in the administration of the Government that
are even temporarily held in the confidence of those charged with the
conduct of the public business. Every step taken is under the
observation of an intelligent and watchful people. The state of the
Union is known from day to day, and suggestions as to needed legislation
find an earlier voice than that which speaks in these annual
communications of the President to Congress.

Good will and cordiality have characterized our relations and
correspondence with other governments, and the year just closed leaves
few international questions of importance remaining unadjusted. No
obstacle is believed to exist that can long postpone the consideration
and adjustment of the still pending questions upon satisfactory and
honorable terms. The dealings of this Government with other states have
been and should always be marked by frankness and sincerity, our
purposes avowed, and our methods free from intrigue. This course has
borne rich fruit in the past, and it is our duty as a nation to preserve
the heritage of good repute which a century of right dealing with
foreign governments has secured to us.

It is a matter of high significance and no less of congratulation that
the first year of the second century of our constitutional existence
finds as honored guests within our borders the representatives of all
the independent States of North and South America met together in
earnest conference touching the best methods of perpetuating and
expanding the relations of mutual interest and friendliness existing
among them. That the opportunity thus afforded for promoting closer
international relations and the increased prosperity of the States
represented will be used for the mutual good of all I can not permit
myself to doubt. Our people will await with interest and confidence the
results to flow from so auspicious a meeting of allied and in large part
identical interests.

The recommendations of this international conference of enlightened
statesmen will doubtless have the considerate attention of Congress and
its cooperation in the removal of unnecessary barriers to beneficial
intercourse between the nations of America. But while the commercial
results which it is hoped will follow this conference are worthy of
pursuit and of the great interests they have excited, it is believed
that the crowning benefit will be found in the better securities which
may be devised for the maintenance of peace among all American nations
and the settlement of all contentions by methods that a Christian
civilization can approve. While viewing with interest our national
resources and products, the delegates will, I am sure, find a higher
satisfaction in the evidences of unselfish friendship which everywhere
attend their intercourse with our people.

Another international conference having great possibilities for good has
lately assembled and is now in session in this capital. An invitation
was extended by the Government, under the act of Congress of July 9,
1888, to all maritime nations to send delegates to confer touching the
revision and amendment of the rules and regulations governing vessels at
sea and to adopt a uniform system of marine signals. The response to
this invitation has been very general and very cordial. Delegates from
twenty-six nations are present in the conference, and they have entered
upon their useful work with great zeal and with an evident appreciation
of its importance. So far as the agreement to be reached may require
legislation to give it effect, the cooperation of Congress is
confidently relied upon.

It is an interesting, if not, indeed, an unprecedented, fact that the
two international conferences have brought together here the accredited
representatives of thirty-three nations.

Bolivia, Ecuador, and Honduras are now represented by resident envoys of
the plenipotentiary grade. All the States of the American system now
maintain diplomatic representation at this capital.

In this connection it may be noted that all the nations of the Western
Hemisphere, with one exception, send to Washington envoys extraordinary
and ministers plenipotentiary, being the highest grade accredited to
this Government. The United States, on the contrary, sends envoys of
lower grades to some of our sister Republics. Our representative in
Paraguay and Uruguay is a minister resident, while to Bolivia we send a
minister resident and consul-general. In view of the importance of our
relations with the States of the American system, our diplomatic agents
in those countries should be of the uniform rank of envoy extraordinary
and minister plenipotentiary. Certain missions were so elevated by the
last Congress with happy effect, and I recommend the completion of the
reform thus begun, with the inclusion also of Hawaii and Hayti, in view
of their relations to the American system of states.

I also recommend that timely provision be made for extending to Hawaii
an invitation to be represented in the international conference now
sitting at this capital.

Our relations with China have the attentive consideration which their
magnitude and interest demand. The failure of the treaty negotiated
under the Administration of my predecessor for the further and more
complete restriction of Chinese labor immigration, and with it the
legislation of the last session of Congress dependent thereon, leaves
some questions open which Congress should now approach in that wise and
just spirit which should characterize the relations of two great and
friendly powers. While our supreme interests demand the exclusion of a
laboring element which experience has shown to be incompatible with our
social life, all steps to compass this imperative need should be
accompanied with a recognition of the claim of those strangers now
lawfully among us to humane and just treatment.

The accession of the young Emperor of China marks, we may hope, an era
of progress and prosperity for the great country over which he is called
to rule.

The present state of affairs in respect to the Samoan Islands is
encouraging. The conference which was held in this city in the summer of
1887 between the representatives of the United States, Germany, and
Great Britain having been adjourned because of the persistent divergence
of views which was developed in its deliberations, the subsequent course
of events in the islands gave rise to questions of a serious character.
On the 4th of February last the German minister at this capital, in
behalf of his Government, proposed a resumption of the conference at
Berlin. This proposition was accepted, as Congress in February last was
informed.

Pursuant to the understanding thus reached, commissioners were appointed
by me, by and with the advice and consent of the Senate, who proceeded
to Berlin, where the conference was renewed. The deliberations extended
through several weeks, and resulted in the conclusion of a treaty which
will be submitted to the Senate for its approval. I trust that the
efforts which have been made to effect an adjustment of this question
will be productive of the permanent establishment of law and order in
Samoa upon the basis of the maintenance of the rights and interests of
the natives as well as of the treaty powers.

The questions which have arisen during the past few years between Great
Britain and the United States are in abeyance or in course of amicable
adjustment.

On the part of the government of the Dominion of Canada an effort has
been apparent during the season just ended to administer the laws and
regulations applicable to the fisheries with as little occasion for
friction as was possible, and the temperate representations of this
Government in respect of cases of undue hardship or of harsh
interpretations have been in most cases met with measures of transitory
relief. It is trusted that the attainment of our just rights under
existing treaties and in virtue of the concurrent legislation of the two
contiguous countries will not be long deferred and that all existing
causes of difference may be equitably adjusted.

I recommend that provision be made by an international agreement for
visibly marking the water boundary between the United States and Canada
in the narrow channels that join the Great Lakes. The conventional line
therein traced by the northwestern boundary survey years ago is not in
all cases readily ascertainable for the settlement of jurisdictional
questions.

A just and acceptable enlargement of the list of offenses for which
extradition may be claimed and granted is most desirable between this
country and Great Britain. The territory of neither should become a
secure harbor for the evil doers of the other through any avoidable
shortcoming in this regard. A new treaty on this subject between the two
powers has been recently negotiated and will soon be laid before the
Senate.

The importance of the commerce of Cuba and Puerto Rico with the United
States, their nearest and principal market, justifies the expectation
that the existing relations may be beneficially expanded. The
impediments resulting from varying dues on navigation and from the
vexatious treatment of our vessels on merely technical grounds of
complaint in West India ports should be removed.

The progress toward an adjustment of pending claims between the United
States and Spain is not as rapid as could be desired.

Questions affecting American interests in connection with railways
constructed and operated by our citizens in Peru have claimed the
attention of this Government. It is urged that other governments in
pressing Peru to the payment of their claims have disregarded the
property rights of American citizens. The matter will be carefully
investigated with a view to securing a proper and equitable adjustment.

A similar issue is now pending with Portugal. The Delagoa Bay Railway,
in Africa, was constructed under a concession by Portugal to an American
citizen. When nearly completed the road was seized by the agents of the
Portuguese Government. Formal protest has been made through our minister
at Lisbon against this act, and no proper effort will be spared to
secure proper relief.

In pursuance of the charter granted by Congress and under the terms of
its contract with the Government of Nicaragua the Interoceanic Canal
Company has begun the construction of the important waterway between the
two oceans which its organization contemplates. Grave complications for
a time seemed imminent, in view of a supposed conflict of jurisdiction
between Nicaragua and Costa Rica in regard to the accessory privileges
to be conceded by the latter Republic toward the construction of works
on the San Juan River, of which the right bank is Costa Rican territory.
I am happy to learn that a friendly arrangement has been effected
between the two nations. This Government has held itself ready to
promote in every proper way the adjustment of all questions that might
present obstacles to the completion of a work of such transcendent
importance to the commerce of this country, and, indeed, to the
commercial interests of the world.

The traditional good feeling between this country and the French
Republic has received additional testimony in the participation of our
Government and people in the international exposition held at Paris
during the past summer. The success of our exhibitors has been
gratifying. The report of the commission will be laid before Congress in
due season.

This Government has accepted, under proper reserve as to its policy in
foreign territories, the invitation of the Government of Belgium to take
part in an international congress, which opened at Brussels on the 16th
of November, for the purpose of devising measures to promote the
abolition of the slave trade in Africa and to prevent the shipment of
slaves by sea. Our interest in the extinction of this crime against
humanity in the regions where it yet survives has been increased by the
results of emancipation within our own borders.

With Germany the most cordial relations continue. The questions arising
from the return to the Empire of Germans naturalized in this country are
considered and disposed of in a temperate spirit to the entire
satisfaction of both Governments.

It is a source of great satisfaction that the internal disturbances of
the Republic of Hayti are at last happily ended, and that an apparently
stable government has been constituted. It has been duly recognized by
the United States.

A mixed commission is now in session in this capital for the settlement
of long-standing claims against the Republic of Venezuela, and it is
hoped that a satisfactory conclusion will be speedily reached. This
Government has not hesitated to express its earnest desire that the
boundary dispute now pending between Great Britain and Venezuela may be
adjusted amicably and in strict accordance with the historic title of
the parties.

The advancement of the Empire of Japan has been evidenced by the recent
promulgation of a new constitution, containing valuable guaranties of
liberty and providing for a responsible ministry to conduct the
Government.

It is earnestly recommended that our judicial rights and processes in
Korea be established on a firm basis by providing the machinery
necessary to carry out treaty stipulations in that regard.

The friendliness of the Persian Government continues to be shown by its
generous treatment of Americans engaged in missionary labors and by the
cordial disposition of the Shah to encourage the enterprise of our
citizens in the development of Persian resources.

A discussion is in progress touching the jurisdictional treaty rights of
the United States in Turkey. An earnest effort will be made to define
those rights to the satisfaction of both Governments.

Questions continue to arise in our relations with several countries in
respect to the rights of naturalized citizens. Especially is this the
case with France, Italy, Russia, and Turkey, and to a less extent with
Switzerland. From time to time earnest efforts have been made to
regulate this subject by conventions with those countries. An improper
use of naturalization should not be permitted, but it is most important
that those who have been duly naturalized should everywhere be accorded
recognition of the rights pertaining to the citizenship of the country
of their adoption. The appropriateness of special conventions for that
purpose is recognized in treaties which this Government has concluded
with a number of European States, and it is advisable that the
difficulties which now arise in our relations with other countries on
the same subject should be similarly adjusted.

The recent revolution in Brazil in favor of the establishment of a
republican form of government is an event of great interest to the
United States. Our minister at Rio de Janeiro was at once instructed to
maintain friendly diplomatic relations with the Provisional Government,
and the Brazilian representatives at this capital were instructed by the
Provisional Government to continue their functions. Our friendly
intercourse with Brazil has therefore suffered no interruption.

Our minister has been further instructed to extend on the part of this
Government a formal and cordial recognition of the new Republic so soon
as the majority of the people of Brazil shall have signified their
assent to its establishment and maintenance.

Within our own borders a general condition of prosperity prevails. The
harvests of the last summer were exceptionally abundant, and the trade
conditions now prevailing seem to promise a successful season to the
merchant and the manufacturer and general employment to our working
people.

The report of the Secretary of the Treasury for the fiscal year ending
June 30, 1889, has been prepared and will be presented to Congress. It
presents with clearness the fiscal operations of the Government, and I
avail myself of it to obtain some facts for use here.

The aggregate receipts from all sources for the year were
$387,050,058.84, derived as follows:

From customs - $223, 832, 741.69

From internal revenue - 130,881,513.92

From miscellaneous sources - 32,335,803.23

The ordinary expenditures for the same period were $281,996,615.60, and
the total expenditures, including the sinking fund, were
$329,579,929.25. The excess of receipts over expenditures was, after
providing for the sinking fund, $57,470,129.59.

For the current fiscal year the total revenues, actual and estimated are
$385,000,000, and the ordinary expenditures, actual and estimated, are
$293,000,000, making with the sinking fund a total expenditure of
$341,321,116.99, leaving an estimated surplus of $43,678,883.01.

During the fiscal year there was applied to the purchase of bonds, in
addition to those for the sinking fund, $90,456,172.35, and during the
first quarter of the current year the sum of $37,838,937.77, all of
which were credited to the sinking fund. The revenues for the fiscal
year ending June 30, 1891, are estimated by the Treasury Department at
$385,000,000, and the expenditures for the same period, including the
sinking fund, at $341,430,477.70. This shows an estimated surplus for
that year of $43,569,522.30, which is more likely to be increased than
reduced when the actual transactions are written up.

The existence of so large an actual and anticipated surplus should have
the immediate attention of Congress, with a view to reducing the
receipts of the Treasury to the needs of the Government as closely as
may be. The collection of moneys not needed for public uses imposes an
unnecessary burden upon our people, and the presence of so large a
surplus in the public vaults is a disturbing element in the conduct of
private business. It has called into use expedients for putting it into
circulation of very questionable propriety. We should not collect
revenue for the purpose of anticipating our bonds beyond the
requirements of the sinking fund, but any unappropriated surplus in the
Treasury should be so used, as there is no other lawful way of returning
the money to circulation, and the profit realized by the Government
offers a substantial advantage.

The loaning of public funds to the banks without interest Upon the
security of Government bonds I regard as an unauthorized and dangerous
expedient. It results in a temporary and unnatural increase of the
banking capital of favored localities and compels a cautious and gradual
recall of the deposits to avoid injury to the commercial interests. It
is not to be expected that the banks having these deposits will sell
their bonds to the Treasury so long as the present highly beneficial
arrangement is continued. They now practically get interest both upon
the bonds and their proceeds. No further use should be made of this
method of getting the surplus into circulation, and the deposits now
outstanding should be gradually withdrawn and applied to the purchase of
bonds. It is fortunate that such a use can be made of the existing
surplus, and for some time to come of any casual surplus that may exist
after Congress has taken the necessary steps for a reduction of the
revenue. Such legislation should be promptly but very considerately
enacted.

I recommend a revision of our tariff law both in its administrative
features and in the schedules. The need of the former is generally
conceded, and an agreement upon the evils and inconveniences to be
remedied and the best methods for their correction will probably not be
difficult. Uniformity of valuation at all our ports is essential, and
effective measures should be taken to secure it. It is equally desirable
that questions affecting rates and classifications should be promptly
decided.

The preparation of a new schedule of customs duties is a matter of great
delicacy because of its direct effect upon the business of the country,
and of great difficulty by reason of the wide divergence of opinion as
to the objects that may properly be promoted by such legislation. Some
disturbance of business may perhaps result from the consideration of
this subject by Congress, but this temporary ill effect will be reduced
to the minimum by prompt action and by the assurance which the country
already enjoys that any necessary changes will be so made as not to
impair the just and reasonable protection of our home industries. The
inequalities of the law should be adjusted, but the protective principle
should be maintained and fairly applied to the products of our farms as
well as of our shops. These duties necessarily have relation to other
things besides the public revenues. We can not limit their effects by
fixing our eyes on the public Treasury alone. They have a direct
relation to home production, to work, to wages, and to the commercial
independence of our country, and the wise and patriotic legislator
should enlarge the field of his vision to include all of these. The
necessary reduction in our public revenues can, I am sure, be made
without making the smaller burden more onerous than the larger by reason
of the disabilities and limitations which the process of reduction puts
upon both capital and labor. The free list can very safely be extended
by placing thereon articles that do not offer injurious competition to
such domestic products as our home labor can supply. The removal of the
internal tax upon tobacco would relieve an important agricultural
product from a burden which was imposed only because our revenue from
customs duties was insufficient for the public needs. If safe provision
against fraud can be devised, the removal of the tax upon spirits used
in the arts and in manufactures would also offer an unobjectionable
method of reducing the surplus.

A table presented by the Secretary of the Treasury showing the amount of
money of all kinds in circulation each year from 1878 to the present
time is of interest. It appears that the amount of national-bank notes
in circulation has decreased during that period $114,109,729, of which
$37,799,229 is chargeable to the last year. The withdrawal of bank
circulation will necessarily continue under existing conditions. It is
probable that the adoption of the suggestions made by the Comptroller of
the Currency, namely, that the minimum deposit of bonds for the
establishment of banks be reduced and that an issue of notes to the par
value of the bonds be allowed, would help to maintain the bank
circulation. But while this withdrawal of bank notes has been going on
there has been a large increase in the amount of gold and silver coin in
circulation and in the issues of gold and silver certificates.

The total amount of money of all kinds in circulation on March 1, 1878,
was $805,793,807, while on October 1, 1889, the total was
$1,405,018,000. There was an increase of $293,417,552 in gold coin, of
$57,554,100 in standard silver dollars, of $72,311,249 in gold
certificates, of $276,619,715 in silver certificates, and of $14,073,787
in United States notes, making a total of $713,976,403. There was during
the same period a decrease of $114,109,729 in bank circulation and of
$642,481 in subsidiary silver. The net increase was $599,224,193. The
circulation per capita has increased about $5 during the time covered by
the table referred to.

The total coinage of silver dollars was on November 1, 1889,
$343,638,001, of which $283,539,521 were in the Treasury vaults and
$60,098,480 were in circulation. Of the amount in the vaults
$277,319,944 were represented by outstanding silver certificates,
leaving $6,219,577 not in circulation and not represented by
certificates.

The law requiring the purchase by the Treasury of $2,000,000 worth of
silver bullion each month, to be coined into silver dollars of 412 1/2
grains, has been observed by the Department, but neither the present
Secretary nor any of his predecessors has deemed it safe to exercise the
discretion given by law to increase the monthly purchases to $4,000,000.
When the law was enacted (February 28, 1878) the price of silver in the
market was $1.204 per ounce, making the bullion value of the dollar 93
cents. Since that time the price has fallen as low as 91.2 cents per
ounce, reducing the bullion value of the dollar to 70.6 cents. Within
the last few months the market price has somewhat advanced, and on the
1st day of November last the bullion value of the silver dollar was 72
cents.

The evil anticipations which have accompanied the coinage and use of the
silver dollar have not been realized. As a coin it has not had general
use, and the public Treasury has been compelled to store it. But this is
manifestly owing to the fact that its paper representative is more
convenient. The general acceptance and the use of the silver certificate
show that silver has not been otherwise discredited. Some favorable
conditions have contributed to maintain this practical equality in their
commercial use between the gold and silver dollars; but some of these
are trade conditions that statutory enactments do not control and of the
continuance of which we can not be certain.

I think it is clear that if we should make the coinage of silver at the
present ratio free we must expect that the difference in the bullion
values of the gold and silver dollars will be taken account of in
commercial transactions; and I fear the same result would follow any
considerable increase of the present rate of coinage. Such a result
would be discreditable to our financial management and disastrous to all
business interests. We should not tread the dangerous edge of such a
peril. And, indeed, nothing more harmful could happen to the silver
interests. Any safe legislation upon this subject must secure the
equality of the two coins in their commercial uses.

I have always been an advocate of the use of silver in our currency. We
are large producers of that metal, and should not discredit it. To the
plan which will be presented by the Secretary of the Treasury for the
issuance of notes or certificates upon the deposit of silver bullion at
its market value I have been able to give only a hasty examination,
owing to the press of other matters and to the fact that it has been so
recently formulated. The details of such a law require careful
consideration, but the general plan suggested by him seems to satisfy
the purpose--to continue the use of silver in connection with our
currency and at the same time to obviate the danger of which I have
spoken. At a later day I may communicate further with Congress upon this
subject.

The enforcement of the Chinese exclusion act has been found to be very
difficult on the northwestern frontier. Chinamen landing at Victoria
find it easy to pass our border, owing to the impossibility with the
force at the command of the customs officers of guarding so long an
inland line. The Secretary of the Treasury has authorized the employment
of additional officers, who will be assigned to this duty, and every
effort will be made to enforce the law. The Dominion exacts a head tax
of $50 for each Chinaman landed, and when these persons, in fraud of our
law, cross into our territory and are apprehended our officers do not
know what to do with them, as the Dominion authorities will not suffer
them to be sent back without a second payment of the tax. An effort will
be made to reach an understanding that will remove this difficulty.

The proclamation required by section 3 of the act of March 2, 1889,
relating to the killing of seals and other fur-bearing animals, was
issued by me on the 21st day of March, and a revenue vessel was
dispatched to enforce the laws and protect the interests of the United
States. The establishment of a refuge station at Point Barrow, as
directed by Congress, was successfully accomplished.

Judged by modern standards, we are practically without coast defenses.
Many of the structures we have would enhance rather than diminish the
perils of their garrisons if subjected to the fire of improved guns, and
very few are so located as to give full effect to the greater range of
such guns as we are now making for coast-defense uses. This general
subject has had consideration in Congress for some years, and the
appropriation for the construction of large rifled guns made one year
ago was, I am sure, the expression of a purpose to provide suitable
works in which these guns might be mounted. An appropriation now made
for that purpose would not advance the completion of the works beyond
our ability to supply them with fairly effective guns.

The security of our coast cities against foreign attacks should not rest
altogether in the friendly disposition of other nations. There should be
a second line wholly in our own keeping. I very urgently recommend an
appropriation at this session for the construction of such works in our
most exposed harbors.

I approve the suggestion of the Secretary of War that provision be made
for encamping companies of the National Guard in our coast works for a
specified time each year and for their training in the use of heavy
guns. His suggestion that an increase of the artillery force of the Army
is desirable is also, in this connection, commended to the consideration
of Congress.

The improvement of our important rivers and harbors should be promoted
by the necessary appropriations. Care should be taken that the
Government is not committed to the prosecution of works not of public
and general advantage and that the relative usefulness of works of that
class is not overlooked. So far as this work can ever be said to be
completed, I do not doubt that the end would be sooner and more
economically reached if fewer separate works were undertaken at the same
time, and those selected for their greater general interest were more
rapidly pushed to completion. A work once considerably begun should not
be subjected to the risks and deterioration which interrupted or
insufficient appropriations necessarily occasion.

The assault made by David S. Terry upon the person of Justice Field, of
the Supreme Court of the United States, at Lathtop, Cal., in August
last, and the killing of the assailant by a deputy United States marshal
who had been deputed to accompany Justice Field and to protect him from
anticipated violence at the hands of Terry, in connection with the legal
proceedings which have followed, suggest questions which, in my
judgment, are worthy of the attention of Congress.

I recommend that more definite provision be made by law not only for the
protection of Federal officers, but for a full trial of such cases in
the United States courts. In recommending such legislation I do not at
all impeach either the general adequacy of the provision made by the
State laws for the protection of all citizens or the general good
disposition of those charged with the execution of such laws to give
protection to the officers of the United States. The duty of protecting
its officers, as such, and of punishing those who assault them on
account of their official acts should not be devolved expressly or by
acquiescence upon the local authorities.

Events which have been brought to my attention happening in other parts
of the country have also suggested the propriety of extending by
legislation fuller protection to those who may be called as witnesses in
the courts of the United States. The law compels those who are supposed
to have knowledge of public offenses to attend upon our courts and grand
juries and to give evidence. There is a manifest resulting duty that
these witnesses shall be protected from injury on account of their
testimony. The investigations of criminal offenses are often rendered
futile and the punishment of crime impossible by the intimidation of
witnesses.

The necessity of providing some more speedy method for disposing of the
cases which now come for final adjudication to the Supreme Court becomes
every year more apparent and urgent. The plan of providing some
intermediate courts having final appellate jurisdiction of certain
classes of questions and cases has, I think, received a more general
approval from the bench and bar of the country than any other. Without
attempting to discuss details, I recommend that provision be made for
the establishment of such courts.

The salaries of the judges of the district courts in many of the
districts are, in my judgment, inadequate. I recommend that all such
salaries now below $5,000 per annum be increased to that amount. It is
quite true that the amount of labor performed by these judges is very
unequal, but as they can not properly engage in other pursuits to
supplement their incomes the salary should be such in all cases as to
provide an independent and comfortable support.

Earnest attention should be given by Congress to a consideration of the
question how far the restraint of those combinations of capital commonly
called "trusts" is matter of Federal jurisdiction. When organized, as
they often are, to crush out all healthy competition and to monopolize
the production or sale of an article of commerce and general necessity,
they are dangerous conspiracies against the public good, and should be
made the subject of prohibitory and even penal legislation.

The subject of an international copyright has been frequently commended
to the attention of Congress by my predecessors. The enactment of such a
law would be eminently wise and just.

Our naturalization laws should be so revised as to make the inquiry into
the moral character and good disposition toward our Government of the
persons applying for citizenship more thorough. This can only be done by
taking fuller control of the examination, by fixing the times for
hearing such applications, and by requiring the presence of some one who
shall represent the Government in the inquiry. Those who are the avowed
enemies of social order or who come to our shores to swell the injurious
influence and to extend the evil practices of any association that
defies our laws should not only be denied citizenship, but a domicile.

The enactment of a national bankrupt law of a character to be a
permanent part of our general legislation is desirable. It should be
simple in its methods and inexpensive in its administration.

The report of the Postmaster-General not only exhibits the operations of
the Department for the last fiscal year, but contains many valuable
suggestions for the improvement and extension of the service, which are
commended to your attention. No other branch of the Government has so
close a contact with the daily life of the people. Almost everyone uses
the service it offers, and every hour gained in the transmission of the
great commercial mails has an actual and possible value that only those
engaged in trade can understand.

The saving of one day in the transmission of the mails between New York
and San Francisco, which has recently been accomplished, is an incident
worthy of mention.

The plan suggested of a supervision of the post-offices in separate
districts that shall involve instruction and suggestion and a rating of
the efficiency of the postmasters would, I have no doubt, greatly
improve the service.

A pressing necessity exists for the erection of a building for the joint
use of the Department and of the city post-office. The Department was
partially relieved by renting .outside quarters for a part of its force,
but it is again overcrowded. The building used by the city office never
was fit for the purpose, and is now inadequate and unwholesome.

The unsatisfactory condition of the law relating to the transmission
through the mails of lottery advertisements and remittances is clearly
stated by the Postmaster-General, and his suggestion as to amendments
should have your favorable consideration.

The report of the Secretary of the Navy shows a reorganization of the
bureaus of the Department that will, I do not doubt, promote the
efficiency of each.

In general, satisfactory progress has been made in the construction of
the new ships of war authorized by Congress. The first vessel of the new
Navy, the Dolphin, was subjected to very severe trial tests and to very
much adverse criticism; but it is gratifying to be able to state that a
cruise around the world, from which she has recently returned, has
demonstrated that she is a first-class vessel of her rate.

The report of the Secretary shows that while the effective force of the
Navy is rapidly increasing by reason of the improved build and armament
of the new ships, the number of our ships fit for sea duty grows very
slowly. We had on the 4th of March last 37 serviceable ships, and though
4 have since been added to the list, the total has not been increased,
because in the meantime 4 have been lost or condemned. Twenty-six
additional vessels have been authorized and appropriated for; but it is
probable that when they are completed our list will only be increased to
42--a gain of 5. The old wooden ships are disappearing almost as fast as
the new vessels are added. These facts carry their own argument. One of
the new ships may in fighting strength be equal to two of the old, but
it can not do the cruising duty of two. It is important, therefore, that
we should have a more rapid increase in the number of serviceable ships.
I concur in the recommendation of the Secretary that the construction of
8 armored ships, 3 gunboats, and 5 torpedo boats be authorized.

An appalling calamity befell three of our naval vessels on duty at the
Samoan Islands, in the harbor of Apia, in March last, involving the loss
of 4 officers and 47 seamen, of two vessels, the Trenton and the
Vandalia, and the disabling of a third, the Nipsic. Three vessels of the
German navy, also in the harbor, shared with our ships the force of the
hurricane and suffered even more heavily. While mourning the brave
officers and men who died facing with high resolve perils greater than
those of battle, it is most gratifying to state that the credit of the
American Navy for seamanship, courage, and generosity was magnificently
sustained in the storm-beaten harbor of Apia.

The report of the Secretary of the Interior exhibits the transactions of
the Government with the Indian tribes. Substantial progress has been
made in the education of the children of school age and in the allotment
of lands to adult Indians. It is to be regretted that the policy of
breaking up the tribal relation and of dealing with the Indian as an
individual did not appear earlier in our legislation. Large reservations
held in common and the maintenance of the authority of the chiefs and
headmen have deprived the individual of every incentive to the exercise
of thrift, and the annuity has contributed an affirmative impulse toward
a state of confirmed pauperism.

Our treaty stipulations should be observed with fidelity and our
legislation should be highly considerate of the best interests of an
ignorant and helpless people. The reservations are now generally
surrounded by white settlements. We can no longer push the Indian back
into the wilderness, and it remains only by every suitable agency to
push him upward into the estate of a self-supporting and responsible
citizen. For the adult the first step is to locate him upon a farm, and
for the child to place him in a school.

School attendance should be promoted by every moral agency, and those
failing should be compelled. The national schools for Indians have been
very successful and should be multiplied, and as far as possible should
be so organized and conducted as to facilitate the transfer of the
schools to the States or Territories in which they are located when the
Indians in a neighborhood have accepted citizenship and have become
otherwise fitted for such a transfer. This condition of things will be
attained slowly, but it will be hastened by keeping it in mind; and in
the meantime that cooperation between the Government and the mission
schools which has wrought much good should be cordially and impartially
maintained.

The last Congress enacted two distinct laws relating to negotiations
with the Sioux Indians of Dakota for a relinquishment of a portion of
their lands to the United States and for dividing the remainder into
separate reservations. Both were approved on the same day--March 2. The
one submitted to the Indians a specific proposition; the other (section
3 of the Indian appropriation act) authorized the President to appoint
three commissioners to negotiate with these Indians for the
accomplishment of the same general purpose, and required that any
agreements made should be submitted to Congress for ratification.

On the 16th day of April last I appointed Hon. Charles Foster, of Ohio,
Hon. William Warner, of Missouri, and Major-General George Crook, of the
United States Army, commissioners under the last-named law. They were,
however, authorized and directed first to submit to the Indians the
definite proposition made to them by the act first mentioned, and only
in the event of a failure to secure the assent of the requisite number
to that proposition to open negotiations for modified terms under the
other act. The work of the commission was prolonged and arduous, but the
assent of the requisite number was, it is understood, finally obtained
to the proposition made by Congress, though the report of the commission
has not yet been submitted. In view of these facts, I shall not, as at
present advised, deem it necessary to submit the agreement to Congress
for ratification, but it will in due course be submitted for
information. This agreement releases to the United States about
9,000,000 acres of land.

The commission provided for by section 14 of the Indian appropriation
bill to negotiate with the Cherokee Indians and all other Indians owning
or claiming lands lying west of the ninety-sixth degree of longitude for
the cession to the United States of all such lands was constituted by
the appointment of Hon. Lucius Fairchild, of Wisconsin, Hon. John F.
Hartranft, of Pennsylvania, and Hon. Alfred M. Wilson, of Arkansas, and
organized on June 29 last. Their first conference with the
representatives of the Cherokees was held at Tahlequah July 29, with no
definite results. General John F. Hartranft, of Pennsylvania, was
prevented by ill health from taking part in the conference. His death,
which occurred recently, is justly and generally lamented by a people he
had served with conspicuous gallantry in war and with great fidelity in
peace. The vacancy thus created was filled by the appointment of Hon.
Warren G. Sayre, of Indiana.

A second conference between the commission and the Cherokees was begun
November 6, but no results have yet been obtained, nor is it believed
that a conclusion can be immediately expected. The cattle syndicate now
occupying the lands for grazing purposes is clearly one of the agencies
responsible for the obstruction of our negotiations with the Cherokees.
The large body of agricultural lands constituting what is known as the
"Cherokee Outlet" ought not to be, and, indeed, can not long be, held
for grazing and for the advantage of a few against the public interests
and the best advantage of the Indians themselves. The United States has
now under the treaties certain rights in these lands. These will not be
used oppressively, but it can not be allowed that those who by
sufferance occupy these lands shall interpose to defeat the wise and
beneficent purposes of the Government. I can not but believe that the
advantageous character of the offer made by the United States to the
Cherokee Nation for a full release of these lands as compared with other
suggestions now made to them will yet obtain for it a favorable
consideration.

Under the agreement made between the United States and the Muscogee (or
Creek) Nation of Indians on the 19th day of January, 1889, an absolute
title was secured by the United States to about 3,500,000 acres of land.
Section 12 of the general Indian appropriation act approved March 2,
1889, made provision for the purchase by the United States from the
Seminole tribe of a certain portion of their lands. The delegates of the
Seminole Nation, having first duly evidenced to me their power to act in
that behalf, delivered a proper release or conveyance to the United
States of all the lands mentioned in the act, which was accepted by me
and certified to be in compliance with the statute.

By the terms of both the acts referred to all the lands so purchased
were declared to be a part of the public domain and open to settlement
under the homestead law. But of the lands embraced in these purchases,
being in the aggregate about 5,500,000 acres, 3,500,000 acres had
already, under the terms of the treaty of 1866, been acquired by the
United States for the purpose of settling other Indian tribes thereon
and had been appropriated to that purpose. The land remaining and
available for settlement consisted of 1,887,796 acres, surrounded on all
sides by lands in the occupancy of Indian tribes. Congress had provided
no civil government for the people who were to be invited by my
proclamation to settle upon these lands, except as the new court which
had been established at Muscogee or the United States courts in some of
the adjoining States had power to enforce the general laws of the United
States.

In this condition of things I was quite reluctant to open the lands to
settlement; but in view of the fact that several thousand persons, many
of them with their families, had gathered upon the borders of the Indian
Territory with a view to securing homesteads on the ceded lands, and
that delay would involve them in much loss and suffering, I did on the
23d day of March last issue a proclamation declaring that the lands
therein described would be open to settlement under the provisions of
the law on the 22d day of April following at 12 o'clock noon. Two land
districts had been established and the offices were opened for the
transaction of business when the appointed time arrived.

It is much to the credit of the settlers that they very generally
observed the limitation as to the time when they might enter the
Territory. Care will be taken that those who entered in violation of the
law do not secure the advantage they unfairly sought. There was a good
deal of apprehension that the strife for locations would result in much
violence and bloodshed, but happily these anticipations were not
realized. It is estimated that there are now in the Territory about
60,000 people, and several considerable towns have sprung up, for which
temporary municipal governments have been organized. Guthrie is said to
have now a population of almost 8,000. Eleven schools and nine churches
have been established, and three daily and five weekly newspapers are
published in this city, whose charter and ordinances have only the
sanction of the voluntary acquiescence of the people from day to day.

Oklahoma City has a population of about 5,000, and is proportionately as
well provided as Guthrie with churches, schools, and newspapers. Other
towns and villages having populations of from 100 to 1,000 are scattered
over the Territory.

In order to secure the peace of this new community in the absence of
civil government, I directed General Merritt, commanding the Department
of the Missouri, to act in conjunction with the marshals of the United
States to preserve the peace, and upon their requisition to use the
troops to aid them in executing warrants and in quieting any riots or
breaches of the peace that might occur. He was further directed to use
his influence to promote good order and to avoid any conflicts between
or with the settlers. Believing that the introduction and sale of
liquors where no legal restraints or regulations existed would endanger
the public peace, and in view of the fact that such liquors must first
be introduced into the Indian reservations before reaching the white
settlements, I further directed the general commanding to enforce the
laws relating to the introduction of ardent spirits into the Indian
country.

The presence of the troops has given a sense of security to the
well-disposed citizens and has tended to restrain the lawless. In one
instance the officer in immediate command of the troops went further
than I deemed justifiable in supporting the de facto municipal
government of Guthrie, and he was so informed, and directed to limit the
interference of the military to the support of the marshals on the lines
indicated in the original order. I very urgently recommend that Congress
at once provide a Territorial government for these people. Serious
questions, which may at any time lead to violent outbreaks, are awaiting
the institution of courts for their peaceful adjustment. The American
genius for self-government has been well illustrated in Oklahoma; but it
is neither safe nor wise to leave these people longer to the expedients
which have temporarily served them.

Provision should be made for the acquisition of title to town lots in
the towns now established in Alaska, for locating town sites, and for
the establishment of municipal governments. Only the mining laws have
been extended to that Territory, and no other form of title to lands can
now be obtained. The general land laws were framed with reference to the
disposition of agricultural lands, and it is doubtful if their operation
in Alaska would be beneficial.

We have fortunately not extended to Alaska the mistaken policy of
establishing reservations for the Indian tribes, and can deal with them
from the beginning as individuals with, I am sure, better results; but
any disposition of the public lands and any regulations relating to
timber and to the fisheries should have a kindly regard to their
interests. Having no power to levy taxes, the people of Alaska are
wholly dependent upon the General Government, to whose revenues the seal
fisheries make a large annual contribution. An appropriation for
education should neither be overlooked nor stinted.

The smallness of the population and the great distances between the
settlements offer serious obstacles to the establishment of the usual
Territorial form of government. Perhaps the organization of several
sub-districts with a small municipal council of limited powers for each
would be safe and useful.

Attention is called in this connection to the suggestions of the
Secretary of the Treasury relating to the establishment of another port
of entry in Alaska and of other needed customs facilities and
regulations.

In the administration of the land laws the policy of facilitating in
every proper way the adjustment of the honest claims of individual
settlers upon the public lands has been pursued. The number of pending
cases had during the preceding Administration been greatly increased
under the operation of orders for a time suspending final action in a
large part of the cases originating in the West and Northwest, and by
the subsequent use of unusual methods of examination. Only those who are
familiar with the conditions under which our agricultural lands have
been settled can appreciate the serious and often fatal consequences to
the settler of a policy that puts his title under suspicion or delays
the issuance of his patent. While care is taken to prevent and to expose
fraud, it should not be imputed without reason.

The manifest purpose of the homestead and preemption laws was to promote
the settlement of the public domain by persons having a bona fide intent
to make a home upon the selected lands. Where this intent is well
established and the requirements of the law have been substantially
complied with, the claimant is entitled to a prompt and friendly
consideration of his case; but where there is reason to believe that the
claimant is the mere agent of another who is seeking to evade a law
intended to promote small holdings and to secure by fraudulent methods
large tracts of timber and other lands, both principal and agent should
not only be thwarted in their fraudulent purpose, but should be made to
feel the full penalties of our criminal statutes. The laws should be so
administered as not to confound these two classes and to visit penalties
only upon the latter.

The unsettled state of the titles to large bodies of lands in the
Territories of New Mexico and Arizona has greatly retarded the
development of those Territories. Provision should be made by law for
the prompt trial and final adjustment before a judicial tribunal or
commission of all claims based upon Mexican grants. It is not just to an
intelligent and enterprising people that their peace should be disturbed
and their prosperity retarded by these old contentions. I express the
hope that differences of opinion as to methods may yield to the urgency
of the case.

The law now provides a pension for every soldier and sailor who was
mustered into the service of the United States during the Civil War and
is now suffering from wounds or disease having an origin in the service
and in the line of duty. Two of the three necessary facts, viz, muster
and disability, are usually susceptible of easy proof; but the third,
origin in the service, is often difficult and in many deserving cases
impossible to establish. That very many of those who endured the
hardships of our most bloody and arduous campaigns are now disabled from
diseases that had a real but not traceable origin in the service I do
not doubt. Besides these there is another class composed of men many of
whom served an enlistment of three full years and of reenlisted veterans
who added a fourth year of service, who escaped the casualties of battle
and the assaults of disease, who were always ready for any detail, who
were in every battle line of their command, and were mustered out in
sound health, and have since the close of the war, while fighting with
the same indomitable and independent spirit the contests of civil life,
been overcome by disease or casualty.

I am not unaware that the pension roll already involves a very large
annual expenditure; neither am I deterred by that fact from recommending
that Congress grant a pension to such honorably discharged soldiers and
sailors of the Civil War as, having rendered substantial service during
the war, are now dependent upon their own labor for a maintenance and by
disease or casualty are incapacitated from earning it. Many of the men
who would be included in this form of relief are now dependent upon
public aid, and it does not, in my judgment, consist with the national
honor that they shall continue to subsist upon the local relief given
indiscriminately to paupers instead of upon the special and generous
provision of the nation they served so gallantly and unselfishly. Our
people will, I am sure, very generally approve such legislation. And I
am equally sure that the survivors of the Union Army and Navy will feel
a grateful sense of relief when this worthy and suffering class of their
comrades is fairly cared for.

There are some manifest inequalities in the existing law that should be
remedied. To some of these the Secretary of the Interior has called
attention.

It is gratifying to be able to state that by the adoption of new and
better methods in the War Department the calls of the Pension Office for
information as to the military and hospital records of pension claimants
are now promptly answered and the injurious and vexatious delays that
have heretofore occurred are entirely avoided. This will greatly
facilitate the adjustment of all pending claims.

The advent of four new States--South Dakota, North Dakota, Montana, and
Washington--into the Union under the Constitution in the same month, and
the admission of their duly chosen representatives to our National
Congress at the same session, is an event as unexampled as it is
interesting.

The certification of the votes cast and of the constitutions adopted in
each of the States was filed with me, as required by the eighth section
of the act of February 22, 1889, by the governors of said Territories,
respectively. Having after a careful examination found that the several
constitutions and governments were republican in form and not repugnant
to the Constitution of the United States, that all the provisions of the
act of Congress had been complied with, and that a majority of the votes
cast in each of said proposed States was in favor of the adoption of the
constitution submitted therein, I did so declare by a separate
proclamation as to each--as to North Dakota and South Dakota on
Saturday, November 2; as to Montana on Friday, November 8, and as to
Washington on Monday, November 11.

Each of these States has within it resources the development of which
will employ the energies of and yield a comfortable subsistence to a
great population. The smallest of these new States, Washington, stands
twelfth, and the largest, Montana, third, among the forty-two in area.
The people of these States are already well-trained, intelligent, and
patriotic American citizens, having common interests and sympathies with
those of the older States and a common purpose to defend the integrity
and uphold the honor of the nation.

The attention of the Interstate Commerce Commission has been called to
the urgent need of Congressional legislation for the better protection
of the lives and limbs of those engaged in operating the great
interstate freight lines of the country, and especially of the yardmen
and brakemen. A petition signed by nearly 10,000 railway brakemen was
presented to the Commission asking that steps might be taken to bring
about the use of automatic brakes and couplers on freight cars.

At a meeting of State railroad commissioners and their accredited
representatives held at Washington in March last upon the invitation of
the Interstate Commerce Commission a resolution was unanimously adopted
urging the Commission "to consider what can be done to prevent the loss
of life and limb in coupling and uncoupling freight cars and in handling
the brakes of such cars." During the year ending June 30, 1888, over
2,000 railroad employees were killed in service and more than 20,000
injured. It is competent, I think, for Congress to require uniformity in
the construction of cars used in interstate commerce and the use of
improved safety appliances upon such trains. Time will be necessary to
make the needed changes, but an earnest and intelligent beginning should
be made at once. It is a reproach to our civilization that any class of
American workmen should in the pursuit of a necessary and useful
vocation be subjected to a peril of life and limb as great as that of a
soldier in time of war.

The creation of an Executive Department to be known as the Department of
Agriculture by the act of February 9 last was a wise and timely response
to a request which had long been respectfully urged by the farmers of
the country; but much remains to be done to perfect the organization of
the Department so that it may fairly realize the expectations which its
creation excited. In this connection attention is called to the
suggestions contained in the report of the Secretary, which is herewith
submitted. The need of a law officer for the Department such as is
provided for the other Executive Departments is manifest. The failure of
the last Congress to make the usual provision for the publication of the
annual report should be promptly remedied. The public interest in the
report and its value to the farming community, I am sure, will not be
diminished under the new organization of the Department.

I recommend that the weather service be separated from the War
Department and established as a bureau in the Department of Agriculture.
This will involve an entire reorganization both of the Weather Bureau
and of the Signal Corps, making of the first a purely civil organization
and of the other a purely military staff corps. The report of the Chief
Signal Officer shows that the work of the corps on its military side has
been deteriorating.

The interests of the people of the District of Columbia should not be
lost sight of in the pressure for consideration of measures affecting
the whole country. Having no legislature of its own, either municipal or
general, its people must look to Congress for the regulation of all
those concerns that in the States are the subject of local control. Our
whole people have an interest that the national capital should be made
attractive and beautiful, and, above all, that its repute for social
order should be well maintained. The laws regulating the sale of
intoxicating drinks in the District should be revised with a view to
bringing the traffic under stringent limitations and control.

In execution of the power conferred upon me by the act making
appropriations for the expenses of the District of Columbia for the year
ending June 30, 1890, I did on the 17th day of August last appoint
Rudolph Hering, of New York, Samuel M. Gray, of Rhode Island, and
Frederick P. Stearns, of Massachusetts, three eminent sanitary
engineers, to examine and report upon the system of sewerage existing in
the District of Columbia. Their report, which is not yet completed, will
be in due course submitted to Congress.

The report of the Commissioners of the District is herewith transmitted,
and the attention of Congress is called to the suggestions contained
therein.

The proposition to observe the four hundredth anniversary of the
discovery of America by the opening of a world's fair or exposition in
some one of our great cities will be presented for the consideration of
Congress. The value and interest of such an exposition may well claim
the promotion of the General Government.

On the 4th of March last the Civil Service Commission had but a single
member. The vacancies were filled on the 7th day of May, and since then
the Commissioners have been industriously, though with an inadequate
force, engaged in executing the law. They were assured by me that a
cordial support would be given them in the faithful and impartial
enforcement of the statute and of the rules and regulations adopted in
aid of it.

Heretofore the book of eligibles has been closed to everyone, except as
certifications were made upon the requisition of the appointing
officers. This secrecy was the source of much suspicion and of many
charges of favoritism in the administration of the law. What is secret
is always suspected; what is open can be judged. The Commission, with
the full approval of all its members, has now opened the list of
eligibles to the public. The eligible lists for the classified
post-offices and custom-houses are now publicly posted in the respective
offices, as are also the certifications for appointments. The purpose of
the civil-service law was absolutely to exclude any other consideration
in connection with appointments under it than that of merit as tested by
the examinations. The business proceeds upon the theory that both the
examining boards and the appointing officers are absolutely ignorant as
to the political views and associations of all persons on the
civil-service lists. It is not too much to say, however, that some
recent Congressional investigations have somewhat shaken public
confidence in the impartiality of the selections for appointment.

The reform of the civil service will make no safe or satisfactory
advance until the present law and its equal administration are well
established in the confidence of the people. It will be my pleasure, as
it is my duty, to see that the law is executed with firmness and
impartiality. If some of its provisions have been fraudulently evaded by
appointing officers, our resentment should not suggest the repeal of the
law, but reform in its administration. We should have one view of the
matter, and hold it with a sincerity that is not affected by the
consideration that the party to which we belong is for the time in
power.

My predecessor, on the 4th day of January, 1889, by an Executive order
to take effect March 15, brought the Railway Mail Service under the
operation of the civil-service law. Provision was made that the order
should take effect sooner in any State where an eligible list was sooner
obtained. On the 11th day of March Mr. Lyman, then the only member of
the Commission, reported to me in writing that it would not be possible
to have the list of eligibles ready before May 1, and requested that the
taking effect of the order be postponed until that time, which was done,
subject to the same provision contained in the original order as to
States in which an eligible list was sooner obtained.

As a result of the revision of the rules, of the new classification, and
of the inclusion of the Railway Mail Service, the work of the Commission
has been greatly increased, and the present clerical force is found to
be inadequate. I recommend that the additional clerks asked by the
Commission be appropriated for.

The duty of appointment is devolved by the Constitution or by the law,
and the appointing officers are properly held to a high responsibility
in its exercise. The growth of the country and the consequent increase
of the civil list have magnified this function of the Executive
disproportionally. It can not be denied, however, that the labor
connected with this necessary work is increased, often to the point of
actual distress, by the sudden and excessive demands that are made upon
an incoming Administration for removals and appointments. But, on the
other hand, it is not true that incumbency is a conclusive argument for
continuance in office. Impartiality, moderation, fidelity to public
duty, and a good attainment in the discharge of it must be added before
the argument is complete. When those holding administrative offices so
conduct themselves as to convince just political opponents that no party
consideration or bias affects in any way the discharge of their public
duties, we can more easily stay the demand for removals.

I am satisfied that both in and out of the classified service great
benefit would accrue from the adoption of some system by which the
officer would receive the distinction and benefit that in all private
employments comes from exceptional faithfulness and efficiency in the
performance of duty.

I have suggested to the heads of the Executive Departments that they
consider whether a record might not be kept in each bureau of all those
elements that are covered by the terms "faithfulness" and "efficiency,"
and a rating made showing the relative merits of the clerks of each
class, this rating to be regarded as a test of merit in making
promotions.

I have also suggested to the Postmaster-General that he adopt some plan
by which he can, upon the basis of the reports to the Department and of
frequent inspections, indicate the relative merit of postmasters of each
class. They will be appropriately indicated in the Official Register and
in the report of the Department. That a great stimulus would thus be
given to the whole service I do not doubt, and such a record would be
the best defense against inconsiderate removals from office.

The interest of the General Government in the education of the people
found an early expression, not only in the thoughtful and sometimes
warning utterances of our ablest statesmen, but in liberal
appropriations from the common resources for the support of education in
the new States. No one will deny that it is of the gravest national
concern that those who hold the ultimate control of all public affairs
should have the necessary intelligence wisely to direct and determine
them. National aid to education has heretofore taken the form of land
grants, and in that form the constitutional power of Congress to promote
the education of the people is not seriously questioned. I do not think
it can be successfully questioned when the form is changed to that of a
direct grant of money from the public Treasury.

Such aid should be, as it always has been, suggested by some exceptional
conditions. The sudden emancipation of the slaves of the South, the
bestowal of the suffrage which soon followed, and the impairment of the
ability of the States where these new citizens were chiefly found to
adequately provide educational facilities presented not only exceptional
but unexampled conditions. That the situation has been much ameliorated
there is no doubt. The ability and interest of the States have happily
increased.

But a great work remains to be done, and I think the General Government
should lend its aid. As the suggestion of a national grant in aid of
education grows chiefly out of the condition and needs of the
emancipated slave and his descendants, the relief should as far as
possible, while necessarily proceeding upon some general lines, be
applied to the need that suggested it. It is essential, if much good is
to be accomplished, that the sympathy and active interest of the people
of the States should be enlisted, and that the methods adopted should be
such as to stimulate and not to supplant local taxation for school
purposes.

As one Congress can not bind a succeeding one in such a case and as the
effort must in some degree be experimental, I recommend that any
appropriation made for this purpose be so limited in annual amount and
as to the time over which it is to extend as will on the one hand give
the local school authorities opportunity to make the best use of the
first year's allowance, and on the other deliver them from the
temptation to unduly postpone the assumption of the whole burden
themselves.

The colored people did not intrude themselves upon us. They were brought
here in chains and held in the communities where they are now chiefly
found by a cruel slave code. Happily for both races, they are now free.
They have from a standpoint of ignorance and poverty--which was our
shame, not theirs--made remarkable advances in education and in the
acquisition of property. They have as a people shown themselves to be
friendly and faithful toward the white race under temptations of
tremendous strength. They have their representatives in the national
cemeteries, where a grateful Government has gathered the ashes of those
who died in its defense. They have furnished to our Regular Army
regiments that have won high praise from their commanding officers for
courage and soldierly qualities and for fidelity to the enlistment oath.
In civil life they are now the toilers of their communities, making
their full contribution to the widening streams of prosperity which
these communities are receiving. Their sudden withdrawal would stop
production and bring disorder into the household as well as the shop.
Generally they do not desire to quit their homes, and their employers
resent the interference of the emigration agents who seek to stimulate
such a desire.

But notwithstanding all this, in many parts of our country where the
colored population is large the people of that race are by various
devices deprived of any effective exercise of their political rights and
of many of their civil rights. The wrong does not expend itself upon
those whose votes are suppressed. Every constituency in the Union is
wronged.

It has been the hope of every patriot that a sense of justice and of
respect for the law would work a gradual cure of these flagrant evils.
Surely no one supposes that the present can be accepted as a permanent
condition. If it is said that these communities must work out this
problem for themselves, we have a right to ask whether they are at work
upon it. Do they suggest any solution? When and under what conditions is
the black man to have a free ballot? When is he in fact to have those
full civil rights which have so long been his in law? When is that
equality of influence which our form of government was intended to
secure to the electors to be restored? This generation should
courageously face these grave questions, and not leave them as a
heritage of woe to the next. The consultation should proceed with
candor, calmness, and great patience, upon the lines of justice and
humanity, not of prejudice and cruelty. No question in our country can
be at rest except upon the firm base of justice and of the law.

I earnestly invoke the attention of Congress to the consideration of
such measures within its well-defined constitutional powers as will
secure to all our people a free exercise of the right of suffrage and
every other civil right under the Constitution and laws of the United
States. No evil, however deplorable, can justify the assumption either
on the part of the Executive or of Congress of powers not granted, but
both will be highly blamable if all the powers granted are not wisely
but firmly used to correct these evils. The power to take the whole
direction and control of the election of members of the House of
Representatives is clearly given to the General Government. A partial
and qualified supervision of these elections is now provided for by law,
and in my opinion this law may be so strengthened and extended as to
secure on the whole better results than can be attained by a law taking
all the processes of such election into Federal control. The colored man
should be protected in all of his relations to the Federal Government,
whether as litigant, juror, or witness in our courts, as an elector for
members of Congress, or as a peaceful traveler upon our interstate
railways.

There is nothing more justly humiliating to the national pride and
nothing more hurtful to the national prosperity than the inferiority of
our merchant marine compared with that of other nations whose general
resources, wealth, and seacoast lines do not suggest any reason for
their supremacy on the sea. It was not always so, and our people are
agreed, I think, that it shall not continue to be so. It is not possible
in this communication to discuss the causes of the decay of our shipping
interests or the differing methods by which it is proposed to restore
them. The statement of a few well-authenticated facts and some general
suggestions as to legislation is all that is practicable. That the great
steamship lines sailing under the flags of England, France, Germany,
Spain, and Italy, and engaged in foreign commerce, were .promoted and
have since been and now are liberally aided by grants of public money in
one form or another is generally known. That the American lines of
steamships have been abandoned by us to an unequal contest with the
aided lines of other nations until they have been withdrawn, or in the
few cases where they are still maintained are subject to serious
disadvantages, is matter of common knowledge.

The present situation is such that travelers and merchandise find
Liverpool often a necessary intermediate port between New York and some
of the South American capitals. The fact that some of the delegates from
South American States to the conference of American nations now in
session at Washington reached our shores by reversing that line of
travel is very conclusive of the need of such a conference and very
suggestive as to the first and most necessary step in the direction of
fuller and more beneficial intercourse with nations that are now our
neighbors upon the lines of latitude, but not upon the lines of
established commercial intercourse.

I recommend that such appropriations be made for ocean mail service in
American steamships between our ports and those of Central and South
America, China, Japan, and the important islands in both of the great
oceans as will be liberally remunerative for the service rendered and as
will encourage the establishment and in some fair degree equalize the
chances of American steamship lines in the competitions which they must
meet. That the American States lying south of us will cordially
cooperate in establishing and maintaining such lines of steamships to
their principal ports I do not doubt.

We should also make provision for a naval reserve to consist of such
merchant ships of American construction and of a specified tonnage and
speed as the owners will consent to place at the use of the Government
in case of need as armed cruisers. England has adopted this policy, and
as a result can now upon necessity at once place upon her naval list
some of the fastest steamships in the world. A proper supervision of the
construction of such vessels would make their conversion into effective
ships of war very easy.

I am an advocate of economy in our national expenditures, but it is a
misuse of terms to make this word describe a policy that withholds an
expenditure for the purpose of extending our foreign commerce. The
enlargement and improvement of our merchant marine, the development of a
sufficient body of trained American seamen, the promotion of rapid and
regular mail communication between the ports of other countries and our
own, and the adaptation of large and swift American merchant steamships
to naval uses in time of war are public purposes of the highest concern.
The enlarged participation of our people in the carrying trade, the new
and increased markets that will be opened for the products of our farms
and factories, and the fuller and better employment of our mechanics
which will result from a liberal promotion of our foreign commerce
insure the widest possible diffusion of benefit to all the States and to
all our people. Everything is most propitious for the present
inauguration of a liberal and progressive policy upon this subject, and
we should enter upon it with promptness and decision.

The legislation which I have suggested, it is sincerely believed, will
promote the peace and honor of our country and the prosperity and
security of the people. I invoke the diligent and serious attention of
Congress to the consideration of these and such other measures as may be
presented having the same great end in view.

BENJ. HARRISON

***

State of the Union Address
Benjamin Harrison
December 1, 1890

To the Senate and House of Representatives:

The reports of the several Executive Departments, which will be laid
before Congress in the usual course, will exhibit in detail the
operations of the Government for the last fiscal year. Only the more
important incidents and results, and chiefly such as may be the
foundation of the recommendations I shall submit, will be referred to in
this annual message.

The vast and increasing business of the Government has been transacted
by the several Departments during the year with faithfulness, energy,
and success.

The revenues, amounting to above $450,000,000, have been collected and
disbursed without revealing, so far as I can ascertain, a single case of
defalcation or embezzlement. An earnest effort has been made to
stimulate a sense of responsibility and public duty in all officers and
employees of every grade, and the work done by them has almost wholly
escaped unfavorable criticism. I speak of these matters with freedom
because the credit of this good work is not mine, but is shared by the
heads of the several Departments with the great body of faithful
officers and employees who serve under them. The closest scrutiny of
Congress is invited to all the methods of administration and to every
item of expenditure.

The friendly relations of our country with the nations of Europe and of
the East have been undisturbed, while the ties of good will and common
interest that bind us to the States of the Western Hemisphere have been
notably strengthened by the conference held in this capital to consider
measures for the general welfare. Pursuant to the invitation authorized
by Congress, the representatives of every independent State of the
American continent and of Hayti met in conference in this capital in
October, 1889, and continued in session until the 19th of last April.
This important convocation marks a most interesting and influential
epoch in the history of the Western Hemisphere. It is noteworthy that
Brazil, invited while under an imperial form of government, shared as a
republic in the deliberations and results of the conference. The
recommendations of this conference were all transmitted to Congress at
the last session.

The International Marine Conference, which sat at Washington last
winter, reached a very gratifying result. The regulations suggested have
been brought to the attention of all the Governments represented, and
their general adoption is confidently expected. The legislation of
Congress at the last session is in conformity with the propositions of
the conference, and the proclamation therein provided for will be issued
when the other powers have given notice of their adhesion.

The Conference of Brussels, to devise means for suppressing the slave
trade in Africa, afforded an opportunity for a new expression of the
interest the American people feel in that great work. It soon became
evident that the measure proposed would tax the resources of the Kongo
Basin beyond the revenues available under the general act of Berlin of
1884. The United States, not being a party to that act, could not share
in its revision, but by a separate act the Independent State of the
Kongo was freed from the restrictions upon a customs revenue. The
demoralizing and destructive traffic in ardent spirits among the tribes
also claimed the earnest attention of the conference, and the delegates
of the United States were foremost in advocating measures for its
repression. An accord was reached the influence of which will be very
helpful and extend over a wide region. As soon as these measures shall
receive the sanction of the Netherlands, for a time withheld, the
general acts will be submitted for ratification by the Senate. Meanwhile
negotiations have been opened for a new and completed treaty of
friendship, commerce, and navigation between the United States and the
Independent State of the Kongo.

Toward the end of the past year the only independent monarchical
government on the Western Continent, that of Brazil, ceased to exist,
and was succeeded by a republic. Diplomatic relations were at once
established with the new Government, but it was not completely
recognized until an opportunity had been afforded to ascertain that it
had popular approval and support. When the course of events had yielded
assurance of this fact, no time was lost in extending to the new
Government a full and cordial welcome into the family of American
Commonwealths. It is confidently believed that the good relations of the
two countries will be preserved and that the future will witness an
increased intimacy of intercourse and an expansion of their mutual
commerce.

The peace of Central America has again been disturbed through a
revolutionary change in Salvador, which was not recognized by other
States, and hostilities broke out between Salvador and Guatemala,
threatening to involve all Central America in conflict and to undo the
progress which had been made toward a union of their interests. The
efforts of this Government were promptly and zealously exerted to
compose their differences, and through the active efforts of the
representative of the United States a provisional treaty of peace was
signed August 26, whereby the right of the Republic of Salvador to
choose its own rulers was recognized. General Ezeta, the chief of the
Provisional Government, has since been confirmed in the Presidency by
the Assembly, and diplomatic recognition duly followed.

The killing of General Barrundia on board the Pacific mail steamer
Acapulco, while anchored in transit in the port of San Jose de
Guatemala, demanded careful inquiry. Having failed in a revolutionary
attempt to invade Guatemala from Mexican territory, General Barrundia
took passage at Acapulco for Panama. The consent of the representatives
of the United States was sought to effect his seizure, first at
Champerico, where the steamer touched, and afterwards at San Jose. The
captain of the steamer refused to give up his passenger without a
written order from the United States minister. The latter furnished the
desired letter, stipulating as the condition of his action that General
Barrundia's life should be spared and that he should be tried only for
offenses growing out of his insurrectionary movements. This letter was
produced to the captain of the Acapulco by the military commander at San
Jose as his warrant to take the passenger from the steamer. General
Barrundia resisted capture and was killed. It being evident that the
minister, Mr. Mizner, had exceeded the bounds of his authority in
intervening, in compliance with the demands of the Guatemalan
authorities, to authorize and effect, in violation of precedent, the
seizure on a vessel of the United States of a passenger in transit
charged with political offenses, in order that he might be tried for
such offenses under what was described as martial law, I was constrained
to disavow Mr. Mizner's act and recall him from his post.

The Nicaragua Canal project, under the control of our citizens, is
making most encouraging progress, all the preliminary conditions and
initial operations having been accomplished within the prescribed time.

During the past year negotiations have been renewed for the settlement
of the claims of American citizens against the Government of Chile,
principally growing out of the late war with Peru. The reports from our
minister at Santiago warrant the expectation of an early and
satisfactory adjustment.

Our relations with China, which have for several years occupied so
important a place in our diplomatic history, have called for careful
consideration and have been the subject of much correspondence.

The communications of the Chinese minister have brought into view the
whole subject of our conventional relations with his country, and at the
same time this Government, through its legation at Peking, has sought to
arrange various matters and complaints touching the interests and
protection of our citizens in China.

In pursuance of the concurrent resolution of October 1, 1890, I have
proposed to the Governments of Mexico and Great Britain to consider a
conventional regulation of the passage of Chinese laborers across our
southern and northern frontiers.

On the 22d day of August last Sir Edmund Monson, the arbitrator selected
under the treaty of December 6, 1888, rendered an award to the effect
that no compensation was due from the Danish Government to the United
States on account of what is commonly known as the Carlos Butterfield
claim.

Our relations with the French Republic continue to be cordial. Our
representative at that court has very diligently urged the removal of
the restrictions imposed upon our meat products, and it is believed that
substantial progress has been made toward a just settlement.

The Samoan treaty, signed last year at Berlin by the representatives of
the United States, Germany, and Great Britain, after due ratification
and exchange, has begun to produce salutary effects. The formation of
the government agreed upon will soon replace the disorder of the past by
a stable administration alike just to the natives and equitable to the
three powers most concerned in trade and intercourse with the Samoan
Islands. The chief justice has been chosen by the King of Sweden and
Norway on the invitation of the three powers, and will soon be
installed. The land commission and the municipal council are in process
of organization. A rational and evenly distributed scheme of taxation,
both municipal and upon imports, is in operation. Malietoa is respected
as King.

The new treaty of extradition with Great Britain, after due
ratification, was proclaimed on the 25th of last March. Its beneficial
working is already apparent.

The difference between the two Governments touching the fur-seal
question in the Bering Sea is not yet adjusted, as will be seen by the
correspondence which will soon be laid before the Congress. The offer to
submit the question to arbitration, as proposed by Her Majesty's
Government, has not been accepted, for the reason that the form of
submission proposed is not thought to be calculated to assure a
conclusion satisfactory to either party. It is sincerely hoped that
before the opening of another sealing season some arrangement may be
effected which will assure to the United States a property right derived
from Russia, which was not disregarded by any nation for more than
eighty years preceding the outbreak of the existing trouble.

In the tariff act a wrong was done to the Kingdom of Hawaii which I am
bound to presume was wholly unintentional. Duties were levied on certain
commodities which are included in the reciprocity treaty now existing
between the United States and the Kingdom of Hawaii, without indicating
the necessary exception in favor of that Kingdom. I hope Congress will
repair what might otherwise seem to be a breach of faith on the part of
this Government.

An award in favor of the United States in the matter of the claim of Mr.
Van Bokkelen against Hayti was rendered on the 4th of December, 1888,
but owing to disorders then and afterwards prevailing in Hayti the terms
of payment were not observed. A new agreement as to the time of payment
has been approved and is now in force. Other just claims of citizens of
the United States for redress of wrongs suffered during the late
political conflict in Hayti will, it is hoped, speedily yield to
friendly treatment.

Propositions for the amendment of the treaty of extradition between the
United States and Italy are now under consideration.

You will be asked to provide the means of accepting the invitation of
the Italian Government to take part in an approaching conference to
consider the adoption of a universal prime meridian from which to reckon
longitude and time. As this proposal follows in the track of the reform
sought to be initiated by the Meridian Conference of Washington, held on
the invitation of this Government, the United States should manifest a
friendly interest in the Italian proposal.

In this connection I may refer with approval to the suggestion of my
predecessors that standing provision be made for accepting, whenever
deemed advisable, the frequent invitations of foreign governments to
share in conferences looking to the advancement of international reforms
in regard to science, sanitation, commercial laws and procedure, and
other matters affecting the intercourse and progress of modern
communities.

In the summer of 1889 an incident occurred which for some time
threatened to interrupt the cordiality of our relations with the
Government of Portugal. That Government seized the Delagoa Bay Railway,
which was constructed under a concession granted to an American citizen,
and at the same time annulled the charter. The concessionary, who had
embarked his fortune in the enterprise, having exhausted other means of
redress, was compelled to invoke the protection of his Government. Our
representations, made coincidently with those of the British Government,
whose subjects were also largely interested, happily resulted in the
recognition by Portugal of the propriety of submitting the claim for
indemnity growing out of its action to arbitration. This plan of
settlement having been agreed upon, the interested powers readily
concurred in the proposal to submit the case to the judgment of three
eminent jurists, to be designated by the President of the Swiss
Republic, who, upon the joint invitation of the Governments of the
United States, Great Britain, and Portugal, has selected persons well
qualified for the task before them.

The revision of our treaty relations with the Empire of Japan has
continued to be the subject of consideration and of correspondence. The
questions involved are both grave and delicate; and while it will be my
duty to see that the interests of the United States are not by any
changes exposed to undue discrimination, I sincerely hope that such
revision as will satisfy the legitimate expectations of the Japanese
Government and maintain the present and long-existing friendly relations
between Japan and the United States will be effected.

The friendship between our country and Mexico, born of close
neighborhood and strengthened by many considerations of intimate
intercourse and reciprocal interest, has never been more conspicuous
than now nor more hopeful of increased benefit to both nations. The
intercourse of the two countries by rail, already great, is making
constant growth. The established lines and those recently projected add
to the intimacy of traffic and open new channels of access to fresh
areas of demand and supply. The importance of the Mexican railway system
will be further enhanced to a degree almost impossible to forecast if it
should become a link in the projected intercontinental railway. I
recommend that our mission in the City of Mexico be raised to the first
class.

The cordial character of our relations with Spain warrants the hope that
by the continuance of methods of friendly negotiation much may be
accomplished in the direction of an adjustment of pending questions and
of the increase of our trade. The extent and development of our trade
with the island of Cuba invest the commercial relations of the United
States and Spain with a peculiar importance. It is not doubted that a
special arrangement in regard to commerce, based upon the reciprocity
provision of the recent tariff act, would operate most beneficially for
both Governments. This subject is now receiving attention.

The restoration of the remains of John Ericsson to Sweden afforded a
gratifying occasion to honor the memory of the great inventor, to whose
genius our country owes so much, and to bear witness to the unbroken
friendship which has existed between the land which bore him and our
own, which claimed him as a citizen.

On the 2d of September last the commission appointed to revise the
proceedings of the commission under the claims convention between the
United States and Venezuela of 1866 brought its labors to a close within
the period fixed for that purpose. The proceedings of the late
commission were characterized by a spirit of impartiality and a high
sense of justice, and an incident which was for many years the subject
of discussion between the two Governments has been disposed of in a
manner alike honorable and satisfactory to both parties. For the
settlement of the claim of the Venezuela Steam Transportation Company,
which was the subject of a joint resolution adopted at the last session
of Congress, negotiations are still in progress, and their early
conclusion is anticipated.

The legislation of the past few years has evinced on the part of
Congress a growing realization of the importance of the consular service
in fostering our commercial relations abroad and in protecting the
domestic revenues. As the scope of operations expands increased
provision must be made to keep up the essential standard of efficiency.
The necessity of some adequate measure of supervision and inspection has
been so often presented that I need only commend the subject to your
attention.

The revenues of the Government from all sources for the fiscal year
ending June 30, 1890, were $463,963,080.55 and the total expenditures
for the same period were $358,618,584.52. The postal receipts have not
heretofore been included in the statement of these aggregates, and for
the purpose of comparison the sum of $60,882,097.92 should be deducted
from both sides of the account. The surplus for the year, including the
amount applied to the sinking fund, was $105,344,496.03. The receipts
for 1890 were $16,030,923.79 and the expenditures $15,739,871 in excess
of those of 1889. The customs receipts increased $5,835,842.88 and the
receipts from internal revenue $11,725,191.89, while on the side of
expenditures that for pensions was $19,312,075.96 in excess of the
preceding year.

The Treasury statement for the current fiscal year, partly actual and
partly estimated, is as follows: Receipts from all sources,
$406,000,000; total expenditures, $354,000,000, leaving a surplus of
$52,000,000, not taking the postal receipts into the account on either
side. The loss of revenue from customs for the last quarter is estimated
at $25,000,000, but from this is deducted a gain of about $16,000,000
realized during the first four months of the year.

For the year 1892 the total estimated receipts are $373,000,000 and the
estimated expenditures $357,852,209.42, leaving an estimated surplus of
$15,247,790.58, which, with a cash balance of $52,000,000 at the
beginning of the year, will give $67,247,790.58 as the sum available for
the redemption of outstanding bonds or other uses. The estimates of
receipts and expenditures for the Post-Office Department, being equal,
are not included in this statement on either side.

The act "directing the purchase of silver bullion and the issue of
Treasury notes thereon," approved July 14, 1890, has been administered
by the Secretary of the Treasury with an earnest purpose to get into
circulation at the earliest possible dates the full monthly amounts of
Treasury notes contemplated by its provisions and at the same time to
give to the market for the silver bullion such support as the law
contemplates. The recent depreciation in the price of silver has been
observed with regret. The rapid rise in price which anticipated and
followed the passage of the act was influenced in some degree by
speculation, and the recent reaction is in part the result of the same
cause and in part of the recent monetary disturbances. Some months of
further trial will be necessary to determine the permanent effect of the
recent legislation upon silver values, but it is gratifying to know that
the increased circulation secured by the act has exerted, and will
continue to exert, a most beneficial influence upon business and upon
general values.

While it has not been thought best to renew formally the suggestion of
an international conference looking to an agreement touching the full
use of silver for coinage at a uniform ratio, care has been taken to
observe closely any change in the situation abroad, and no favorable
opportunity will be lost to promote a result which it is confidently
believed would confer very large benefits upon the commerce of the
world.

The recent monetary disturbances in England are not unlikely to suggest
a reexamination of opinions upon this subject. Our very large supply of
gold will, if not lost by impulsive legislation in the supposed interest
of silver, give us a position of advantage in promoting a permanent and
safe international agreement for the free use of silver as a coin metal.

The efforts of the Secretary to increase the volume of money in
circulation by keeping down the Treasury surplus to the lowest
practicable limit have been unremitting and in a very high degree
successful. The tables presented by him showing the increase of money in
circulation during the last two decades, and especially the table
showing the increase during the nineteen months he has administered the
affairs of the Department, are interesting and instructive. The increase
of money in circulation during the nineteen months has been in the
aggregate $93,866,813, or about $1.50 per capita, and of this increase
only $7,100,000 was due to the recent silver legislation. That this
substantial and needed aid given to commerce resulted in an enormous
reduction of the public debt and of the annual interest charge is matter
of increased satisfaction. There have been purchased and redeemed since
March 4, 1889, 4 and 4 1\2 per cent bonds to the amount of $211,832,450,
at a cost of $246,620,741, resulting in the reduction of the annual
interest charge of $8,967,609 and a total saving of interest of
$51,576,706.

I notice with great pleasure the statement of the Secretary that the
receipts from internal revenue have increased during the last fiscal
year nearly $12,000,000, and that the cost of collecting this larger
revenue was less by $90,617 than for the same purpose in the preceding
year. The percentage of cost of collecting the customs revenue was less
for the last fiscal year than ever before.

The Customs Administration Board, provided for by the act of June 10,
1890, was selected with great care, and is composed in part of men whose
previous experience in the administration of the old customs regulations
had made them familiar with the evils to be remedied, and in part of men
whose legal and judicial acquirements and experience seemed to fit them
for the work of interpreting and applying the new statute. The chief aim
of the law is to secure honest valuations of all dutiable merchandise
and to make these valuations uniform at all our ports of entry. It had
been made manifest by a Congressional investigation that a system of
undervaluation had been long in use by certain classes of importers,
resulting not only in a great loss of revenue, but in a most intolerable
discrimination against honesty. It is not seen how this legislation,
when it is understood, can be regarded by the citizens of any country
having commercial dealings with us as unfriendly. If any duty is
supposed to be excessive, let the complaint be lodged there. It will
surely not be claimed by any well-disposed people that a remedy may be
sought and allowed in a system of quasi smuggling.

The report of the Secretary of War exhibits several gratifying results
attained during the year by wise and unostentatious methods. The
percentage of desertions from the Army (an evil for which both Congress
and the Department have long been seeking a remedy) has been reduced
during the past year 24 per cent, and for the months of August and
September, during which time the favorable effects of the act of June 16
were felt, 33 per cent, as compared with the same months of 1889.

The results attained by a reorganization and consolidation of the
divisions having charge of the hospital and service records of the
volunteer soldiers are very remarkable. This change was effected in
July, 1889, and at that time there were 40,654 cases awaiting attention,
more than half of these being calls from the Pension Office for
information necessary to the adjudication of pension claims. On the 30th
day of June last, though over 300,000 new calls had come in, there was
not a single case that had not been examined and answered.

I concur in the recommendations of the Secretary that adequate and
regular appropriations be continued for coast-defense works and
ordnance. Plans have been practically agreed upon, and there can be no
good reason for delaying the execution of them, while the defenseless
state of our great seaports furnishes an urgent reason for wise
expedition.

The encouragement that has been extended to the militia of the States,
generally and most appropriately designated the "National Guard," should
be continued and enlarged. These military organizations constitute in a
large sense the Army of the United States, while about five-sixths of
the annual cost of their maintenance is defrayed by the States.

The report of the Attorney-General is under the law submitted directly
to Congress, but as the Department of Justice is one of the Executive
Departments some reference to the work done is appropriate here.

A vigorous and in the main an effective effort has been made to bring to
trial and punishment all violators of the law, but at the same time care
has been taken that frivolous and technical offenses should not be used
to swell the fees of officers or to harass well-disposed citizens.
Especial attention is called to the facts connected with the prosecution
of violations of the election laws and of offenses against United States
officers. The number of convictions secured, very many of them upon
pleas of guilty, will, it is hoped, have a salutary restraining
influence. There have been several cases where postmasters appointed by
me have been subjected to violent interference in the discharge of their
official duties and to persecutions and personal violence of the most
extreme character. Some of these cases have been dealt with through the
Department of Justice, and in some cases the post-offices have been
abolished or suspended. I have directed the Postmaster-General to pursue
this course in all cases where other efforts failed to secure for any
postmaster not himself in fault an opportunity peacefully to exercise
the duties of his office. But such action will not supplant the efforts
of the Department of Justice to bring the particular offenders to
punishment.

The vacation by judicial decrees of fraudulent certificates of
naturalization, upon bills in equity filed by the Attorney-General in
the circuit court of the United States, is a new application of a
familiar equity jurisdiction. Nearly one hundred such decrees have been
taken during the year, the evidence disclosing that a very large number
of fraudulent certificates of naturalization have been issued. And in
this connection I beg to renew my recommendation that the laws be so
amended as to require a more full and searching inquiry into all the
facts necessary to naturalization before any certificates are granted.
It certainly is not too much to require that an application for American
citizenship shall be heard with as much care and recorded with as much
formality as are given to cases involving the pettiest property right.

At the last session I returned without my approval a bill entitled "An
act to prohibit bookmaking and pool selling in the District of
Columbia," and stated my objection to be that it did not prohibit but in
fact licensed what it purported to prohibit. An effort will be made
under existing laws to suppress this evil, though it is not certain that
they will be found adequate.

The report of the Postmaster-General shows the most gratifying progress
in the important work committed to his direction. The business methods
have been greatly improved. A large economy in expenditures and an
increase of four and three-quarters millions in receipts have been
realized. The deficiency this year is $5,786,300, as against $6,350,183
last year, notwithstanding the great enlargement of the service. Mail
routes have been extended and quickened and greater accuracy and
dispatch in distribution and delivery have been attained. The report
will be found to be full of interest and suggestion, not only to
Congress, but to those thoughtful citizens who may be interested to know
what business methods can do for that department of public
administration which most nearly touches all our people.

The passage of the act to amend certain sections of the Revised Statutes
relating to lotteries, approved September 19, 1890, has been received
with great and deserved popular favor. The Post-Office Department and
the Department of Justice at once entered upon the enforcement of the
law with sympathetic vigor, and already the public mails have been
largely freed from the fraudulent and demoralizing appeals and
literature emanating from the lottery companies.

The construction and equipment of the new ships for the Navy have made
very satisfactory progress. Since March 4, 1889, nine new vessels have
been put in commission, and during this winter four more, including one
monitor, will be added. The construction of the other vessels authorized
is being pushed both in the Government and private yards with energy and
watched with the most scrupulous care.

The experiments conducted during the year to test the relative resisting
power of armor plates have been so valuable as to attract great
attention in Europe. The only part of the work upon the new ships that
is threatened by unusual delay is the armor plating, and every effort is
being made to reduce that to the minimum. It is a source of
congratulation that the anticipated influence of these modern vessels
upon the esprit de corps of the officers and seamen has been fully
realized. Confidence and pride in the ship among the crew are equivalent
to a secondary battery. Your favorable consideration is invited to the
recommendations of the Secretary.

The report of the Secretary of the Interior exhibits with great fullness
and clearness the vast work of that Department and the satisfactory
results attained. The suggestions made by him are earnestly commended to
the consideration of Congress, though they can not all be given
particular mention here.

The several acts of Congress looking to the reduction of the larger
Indian reservations, to the more rapid settlement of the Indians upon
individual allotments, and the restoration to the public domain of lands
in excess of their needs have been largely carried into effect so far as
the work was confided to the Executive. Agreements have been concluded
since March 4, 1889, involving the cession to the United States of about
14,726,000 acres of land. These contracts have, as required by law, been
submitted to Congress for ratification and for the appropriations
necessary to carry them into effect. Those with the Sisseton and
Wahpeton, Sac and Fox, Iowa, Pottawatomies and Absentee Shawnees, and
Coeur d'Alene tribes have not yet received the sanction of Congress.
Attention is also called to the fact that the appropriations made in the
case of the Sioux Indians have not covered all the stipulated payments.
This should be promptly corrected. If an agreement is confirmed, all of
its terms should be complied with without delay and full appropriations
should be made.

The policy outlined in my last annual message in relation to the
patenting of lands to settlers upon the public domain has been carried
out in the administration of the Land Office. No general suspicion or
imputation of fraud has been allowed to delay the hearing and
adjudication of individual cases upon their merits. The purpose has been
to perfect the title of honest settlers with such promptness that the
value of the entry might not be swallowed up by the expense and
extortions to which delay subjected the claimant. The average monthly
issue of agricultural patents has been increased about 6,000.

The disability-pension act, which was approved on the 27th of June last,
has been put into operation as rapidly as was practicable. The increased
clerical force provided was selected and assigned to work, and a
considerable part of the force engaged in examinations in the field was
recalled and added to the working force of the office. The examination
and adjudication of claims have by reason of improved methods been more
rapid than ever before. There is no economy to the Government in delay,
while there is much hardship and injustice to the soldier. The
anticipated expenditure, while very large, will not, it is believed, be
in excess of the estimates made before the enactment of the law. This
liberal enlargement of the general law should suggest a more careful
scrutiny of bills for special relief, both as to the cases where relief
is granted and as to the amount allowed.

The increasing numbers and influence of the non-Mormon population of
Utah are observed with satisfaction. The recent letter of Wilford
Woodruff, president of the Mormon Church, in which he advised his people
"to refrain from contracting any marriage forbidden by the laws of the
land," has attracted wide attention, and it is hoped that its influence
will be highly beneficial in restraining infractions of the laws of the
United States. But the fact should not be overlooked that the doctrine
or belief of the church that polygamous marriages are rightful and
supported by divine revelation remains unchanged. President Woodruff
does not renounce the doctrine, but refrains from teaching it, and
advises against the practice of it because the law is against it. Now,
it is quite true that the law should not attempt to deal with the faith
or belief of anyone; but it is quite another thing, and the only safe
thing, so to deal with the Territory of Utah as that those who believe
polygamy to be rightful shall not have the power to make it lawful.

The admission of the States of Wyoming and Idaho to the Union are events
full of interest and congratulation, not only to the people of those
States now happily endowed with a full participation in our privileges
and responsibilities, but to all our people. Another belt of States
stretches from the Atlantic to the Pacific.

The work of the Patent Office has won from all sources very high
commendation. The amount accomplished has been very largely increased,
and all the results have been such as to secure confidence and
consideration for the suggestions of the Commissioner.

The enumeration of the people of the United States under the provisions
of the act of March 1, 1889, has been completed, and the result will be
at once officially communicated to Congress. The completion of this
decennial enumeration devolves upon Congress the duty of making a new
apportionment of Representatives "among the several States according to
their respective numbers."

At the last session I had occasion to return with my objections several
bills making provisions for the erection of public buildings for the
reason that the expenditures contemplated were, in my opinion, greatly
in excess of any public need. No class of legislation is more liable to
abuse or to degenerate into an unseemly scramble about the public
Treasury than this. There should be exercised in this matter a wise
economy, based upon some responsible and impartial examination and
report as to each case, under a general law.

The report of the Secretary of Agriculture deserves especial attention
in view of the fact that the year has been marked in a very unusual
degree by agitation and organization among the farmers looking to an
increase in the profits of their business. It will be found that the
efforts of the Department have been intelligently and zealously devoted
to the promotion of the interests intrusted to its care.

A very substantial improvement in the market prices of the leading farm
products during the year is noticed. The price of wheat advanced from 81
cents in October, 1889, to $1.00 3/4 in October, 1890; corn from 31
cents to 50 1/4 cents; oats from 19 1/4 cents to 43 cents, and barley
from 63 cents to 78 cents. Meats showed a substantial but not so large
an increase. The export trade in live animals and fowls shows a very
large increase. The total value of such exports for the year ending June
30, 1890, was $33,000,000, and the increase over the preceding year was
over $15,000,000. Nearly 200,000 more cattle and over 45,000 more hogs
were exported than in the preceding year. The export trade in beef and
pork products and in dairy products was very largely increased, the
increase in the article of butter alone being from 15,504,978 pounds to
29,748,042 pounds, and the total increase in the value of meat and dairy
products exported being $34,000,000. This trade, so directly helpful to
the farmer, it is believed, will be yet further and very largely
increased when the system of inspection and sanitary supervision now
provided by law is brought fully into operation.

The efforts of the Secretary to establish the healthfulness of our meats
against the disparaging imputations that have been put upon them abroad
have resulted in substantial progress. Veterinary surgeons sent out by
the Department are now allowed to participate in the inspection of the
live cattle from this country landed at the English docks, and during
the several months they have been on duty no case of contagious
pleuro-pneumonia has been reported. This inspection abroad and the
domestic inspection of live animals and pork products provided for by
the act of August 30, 1890, will afford as perfect a guaranty for the
wholesomeness of our meats offered for foreign consumption as is
anywhere given to any food product, and its nonacceptance will quite
clearly reveal the real motive of any continued restriction of their
use, and that having been made clear the duty of the Executive will be
very plain.

The information given by the Secretary of the progress and prospects of
the beet-sugar industry is full of interest. It has already passed the
experimental stage and is a commercial success. The area over which the
sugar beet can be successfully cultivated is very large, and another
field crop of great value is offered to the choice of the farmer.

The Secretary of the Treasury concurs in the recommendation of the
Secretary of Agriculture that the official supervision provided by the
tariff law for sugar of domestic production shall be transferred to the
Department of Agriculture.

The law relating to the civil service has, so far as I can learn, been
executed by those having the power of appointment in the classified
service with fidelity and impartiality, and the service has been
increasingly satisfactory. The report of the Commission shows a large
amount of good work done during the year with very limited
appropriations.

I congratulate the Congress and the country upon the passage at the
first session of the Fifty-first Congress of an unusual number of laws
of very high importance. That the results of this legislation will be
the quickening and enlargement of our manufacturing industries, larger
and better markets for our breadstuffs and provisions both at home and
abroad, more constant employment and better wages for our working
people, and an increased supply of a safe currency for the transaction
of business, I do not doubt. Some of these measures were enacted at so
late a period that the beneficial effects upon commerce which were in
the contemplation of Congress have as yet but partially manifested
themselves.

The general trade and industrial conditions throughout the country
during the year have shown a marked improvement. For many years prior to
1888 the merchandise balances of foreign trade had been largely in our
favor, but during that year and the year following they turned against
us. It is very gratifying to know that the last fiscal year again shows
a balance in our favor of over $68,000,000. The bank clearings, which
furnish a good test of the volume of business transacted, for the first
ten months of the year 1890 show as compared with the same months of
1889 an increase for the whole country of about 8.4 per cent, while the
increase outside of the city of New York was over 13 per cent. During
the month of October the clearings of the whole country showed an
increase of 3.1 per cent over October, 1889, while outside of New York
the increase was 11.5 per cent. These figures show that the increase in
the volume of business was very general throughout the country. That
this larger business was being conducted upon a safe and profitable
basis is shown by the fact that there were 300 less failures reported in
October, 1890, than in the same month of the preceding year, with
liabilities diminished by about $5,000,000.

The value of our exports of domestic merchandise during the last year
was over $115,000,000 greater than the preceding year, and was only
exceeded once in our history. About $100,000,000 of this excess was in
agricultural products. The production of pig iron, always a good gauge
of general prosperity, is shown by a recent census bulletin to have been
153 per cent greater in 1890 than in 1880, and the production of steel
290 per cent greater. Mining in coal has had no limitation except that
resulting from deficient transportation. The general testimony is that
labor is everywhere fully employed, and the reports for the last year
show a smaller number of employees affected by strikes and lockouts than
in any year since 1884. The depression in the prices of agricultural
products had been greatly relieved and a buoyant and hopeful tone was
beginning to be felt by all our people.

These promising influences have been in some degree checked by the
surprising and very unfavorable monetary events which have recently
taken place in England. It is gratifying to know that these did not grow
in any degree out of the financial relations of London with our people
or out of any discredit attached to our securities held in that market.
The return of our bonds and stocks was caused by a money stringency in
England, not by any loss of value or credit in the securities
themselves. We could not, however, wholly escape the ill effects of a
foreign monetary agitation accompanied by such extraordinary incidents
as characterized this. It is not believed, however, that these evil
incidents, which have for the time unfavorably affected values in this
country, can long withstand the strong, safe, and wholesome influences
which are operating to give to our people profitable returns in all
branches of legitimate trade and industry. The apprehension that our
tariff may again and at once be subjected to important general changes
would undoubtedly add a depressing influence of the most serious
character.

The general tariff act has only partially gone into operation, some of
its important provisions being limited to take effect at dates yet in
the future. The general provisions of the law have been in force less
than sixty days. Its permanent effects upon trade and prices still
largely stand in conjecture. It is curious to note that the advance in
the prices of articles wholly unaffected by the tariff act was by many
hastily ascribed to that act. Notice was not taken of the fact that the
general tendency of the markets was upward, from influences wholly apart
from the recent tariff legislation. The enlargement of our currency by
the silver bill undoubtedly gave an upward tendency to trade and had a
marked effect on prices; but this natural and desired effect of the
silver legislation was by many erroneously attributed to the tariff act.

There is neither wisdom nor justice in the suggestion that the subject
of tariff revision shall be again opened before this law has had a fair
trial. It is quite true that every tariff schedule is subject to
objections. No bill was ever framed, I suppose, that in all of its rates
and classifications had the full approval even of a party caucus. Such
legislation is always and necessarily the product of compromise as to
details, and the present law is no exception. But in its general scope
and effect I think it will justify the support of those who believe that
American legislation should conserve and defend American trade and the
wages of American workmen.

The misinformation as to the terms of the act which has been so widely
disseminated at home and abroad will be corrected by experience, and the
evil auguries as to its results confounded by the market reports, the
savings banks, international trade balances, and the general prosperity
of our people. Already we begin to hear from abroad and from our
customhouses that the prohibitory effect upon importations imputed to
the act is not justified. The imports at the port of New York for the
first three weeks of November were nearly 8 per cent greater than for
the same period in 1889 and 29 per cent greater than in the same period
of 1888. And so far from being an act to limit exports, I confidently
believe that under it we shall secure a larger and more profitable
participation in foreign trade than we have ever enjoyed, and that we
shall recover a proportionate participation in the ocean carrying trade
of the world.

The criticisms of the bill that have come to us from foreign sources may
well be rejected for repugnancy. If these critics really believe that
the adoption by us of a free-trade policy, or of tariff rates having
reference solely to revenue, would diminish the participation of their
own countries in the commerce of the world, their advocacy and
promotion, by speech and other forms of organized effort, of this
movement among our people is a rare exhibition of unselfishness in
trade. And, on the other hand, if they sincerely believe that the
adoption of a protective-tariff policy by this country inures to their
profit and our hurt, it is noticeably strange that they should lead the
outcry against the authors of a policy so helpful to their countrymen
and crown with their favor those who would snatch from them a
substantial share of a trade with other lands already inadequate to
their necessities.

There is no disposition among any of our people to promote prohibitory
or retaliatory legislation. Our policies are adopted not to the hurt of
others, but to secure for ourselves those advantages that fairly grow
out of our favored position as a nation. Our form of government, with
its incident of universal suffrage, makes it imperative that we shall
save our working people from the agitations and distresses which scant
work and wages that have no margin for comfort always beget. But after
all this is done it will be found that our markets are open to friendly
commercial exchanges of enormous value to the other great powers.

From the time of my induction into office the duty of using every power
and influence given by law to the executive department for the
development of larger markets for our products, especially our farm
products, has been kept constantly in mind, and no effort has been or
will be spared to promote that end. We are under no disadvantage in any
foreign market, except that we pay our workmen and workwomen better
wages than are paid elsewhere--better abstractly, better relatively to
the cost of the necessaries of life. I do not doubt that a very largely
increased foreign trade is accessible to us without bartering for it
either our home market for such products of the farm and shop as our own
people can supply or the wages of our working people.

In many of the products of wood and iron and in meats and breadstuffs we
have advantages that only need better facilities of intercourse and
transportation to secure for them large foreign markets. The reciprocity
clause of the tariff act wisely and effectively opens the way to secure
a large reciprocal trade in exchange for the free admission to our ports
of certain products. The right of independent nations to make special
reciprocal trade concessions is well established, and does not impair
either the comity due to other powers or what is known as the
"favored-nation clause," so generally found in commercial treaties. What
is given to one for an adequate agreed consideration can not be claimed
by another freely. The state of the revenues was such that we could
dispense with any import duties upon coffee, tea, hides, and the lower
grades of sugar and molasses. That the large advantage resulting to the
countries producing and exporting these articles by placing them on the
free list entitled us to expect a fair return in the way of customs
concessions upon articles exported by us to them was so obvious that to
have gratuitously abandoned this opportunity to enlarge our trade would
have been an unpardonable error.

There were but two methods of maintaining control of this question open
to Congress--to place all of these articles upon the dutiable list,
subject to such treaty agreements as could be secured, or to place them
all presently upon the free list, but subject to the reimposition of
specified duties if the countries from which we received them should
refuse to give to us suitable reciprocal benefits. This latter method, I
think, possesses great advantages. It expresses in advance the consent
of Congress to reciprocity arrangements affecting these products, which
must otherwise have been delayed and unascertained until each treaty was
ratified by the Senate and the necessary legislation enacted by
Congress. Experience has shown that some treaties looking to reciprocal
trade have failed to secure a two-thirds vote in the Senate for
ratification, and others having passed that stage have for years awaited
the concurrence of the House and Senate in such modifications of our
revenue laws as were necessary to give effect to their provisions. We
now have the concurrence of both Houses in advance in a distinct and
definite offer of free entry to our ports of specific articles. The
Executive is not required to deal in conjecture as to what Congress will
accept. Indeed, this reciprocity provision is more than an offer. Our
part of the bargain is complete; delivery has been made; and when the
countries from which we receive sugar, coffee, tea, and hides have
placed on their free lists such of our products as shall be agreed upon
as an equivalent for our concession, a proclamation of that fact
completes the transaction; and in the meantime our own people have free
sugar, tea, coffee, and hides.

The indications thus far given are very hopeful of early and favorable
action by the countries from which we receive our large imports of
coffee and sugar, and it is confidently believed that if steam
communication with these countries can be promptly improved and enlarged
the next year will show a most gratifying increase in our exports of
breadstuffs and provisions, as well as of some important lines of
manufactured goods.

In addition to the important bills that became laws before the
adjournment of the last session, some other bills of the highest
importance were well advanced toward a final vote and now stand upon the
calendars of the two Houses in favored positions. The present session
has a fixed limit, and if these measures are not now brought to a final
vote all the work that has been done upon them by this Congress is lost.
The proper consideration of these, of an apportionment bill, and of the
annual appropriation bills will require not only that no working day of
the session shall be lost, but that measures of minor and local interest
shall not be allowed to interrupt or retard the progress of those that
are of universal interest. In view of these conditions, I refrain from
bringing before you at this time some suggestions that would otherwise
be made, and most earnestly invoke your attention to the duty of
perfecting the important legislation now well advanced. To some of these
measures, which seem to me most important, I now briefly call your
attention.

I desire to repeat with added urgency the recommendations contained in
my last annual message in relation to the development of American
steamship lines. The reciprocity clause of the tariff bill will be
largely limited and its benefits retarded and diminished if provision is
not contemporaneously made to encourage the establishment of first-class
steam communication between our ports and the ports of such nations as
may meet our overtures for enlarged commercial exchanges. The steamship,
carrying the mails statedly and frequently and offering to passengers a
comfortable, safe, and speedy transit, is the first condition of foreign
trade. It carries the order or the buyer, but not all that is ordered or
bought. It gives to the sailing vessels such cargoes as are not urgent
or perishable, and, indirectly at least, promotes that important adjunct
of commerce. There is now both in this country and in the nations of
Central and South America a state of expectation and confidence as to
increased trade that will give a double value to your prompt action upon
this question.

The present situation of our mail communication with Australia
illustrates the importance of early action by Congress. The Oceanic
Steamship Company maintains a line of steamers between San Francisco,
Sydney, and Auckland consisting of three vessels, two of which are of
United States registry and one of foreign registry. For the service done
by this line in carrying the mails we pay annually the sum of $46,000,
being, as estimated, the full sea and United States inland postage,
which is the limit fixed by law. The colonies of New South Wales and New
Zealand have been paying annually to these lines lbs. 37,000 for
carrying the mails from Sydney and Auckland to San Francisco. The
contract under which this payment has been made is now about to expire,
and those colonies have refused to renew the contract unless the United
States shall pay a more equitable proportion of the whole sum necessary
to maintain the service.

I am advised by the Postmaster-General that the United States receives
for carrying the Australian mails, brought to San Francisco in these
steamers, by rail to Vancouver, an estimated annual income of $75,000,
while, as I have stated, we are paying out for the support of the
steamship line that brings this mail to us only $46,000, leaving an
annual surplus resulting from this service of $29,000. The trade of the
United States with Australia, which is in a considerable part carried by
these steamers, and the whole of which is practically dependent upon the
mail communication which they maintain, is largely in our favor. Our
total exports of merchandise to Australasian ports during the fiscal
year ending June 30, 1890, were $11,266,484, while the total imports of
merchandise from these ports were only $4,277,676. If we are not willing
to see this important steamship line withdrawn, or continued with
Vancouver substituted for San Francisco as the American terminal,
Congress should put it in the power of the Postmaster-General to make a
liberal increase in the amount now paid for the transportation of this
important mail.

The South Atlantic and Gulf ports occupy a very favored position toward
the new and important commerce which the reciprocity clause of the
tariff act and the postal shipping bill are designed to promote.
Steamship lines from these ports to some northern port of South America
will almost certainly effect a connection between the railroad systems
of the continents long before any continuous line of railroads can be
put into operation. The very large appropriation made at the last
session for the harbor of Galveston was justified, as it seemed to me,
by these considerations. The great Northwest will feel the advantage of
trunk lines to the South as well as to the East and of the new markets
opened for their surplus food products and for many of their
manufactured products.

I had occasion in May last to transmit to Congress a report adopted by
the International American Conference upon the subject of the
incorporation of an international American bank, with a view to
facilitating money exchanges between the States represented in that
conference. Such an institution would greatly promote the trade we are
seeking to develop. I renew the recommendation that a careful and
well-guarded charter be granted. I do not think the powers granted
should include those ordinarily exercised by trust, guaranty, and
safe-deposit companies, or that more branches in the United States
should be authorized than are strictly necessary to accomplish the
object primarily in view, namely, convenient foreign exchanges. It is
quite important that prompt action should be taken in this matter, in
order that any appropriations for better communication with these
countries and any agreements that may be made for reciprocal trade may
not be hindered by the inconvenience of making exchanges through
European money centers or burdened by the tribute which is an incident
of that method of business.

The bill for the relief of the Supreme Court has after many years of
discussion reached a position where final action is easily attainable,
and it is hoped that any differences of opinion may be so harmonized as
to save the essential features of this very important measure. In this
connection I earnestly renew my recommendation that the salaries of the
judges of the United States district courts be so readjusted that none
of them shall receive less than $5,000 per annum.

The subject of the unadjusted Spanish and Mexican land grants and the
urgent necessity for providing some commission or tribunal for the trial
of questions of title growing out of them were twice brought by me to
the attention of Congress at the last session. Bills have been reported
from the proper committees in both Houses upon the subject, and I very
earnestly hope that this Congress will put an end to the delay which has
attended the settlement of the disputes as to the title between the
settlers and the claimants under these grants. These disputes retard the
prosperity and disturb the peace of large and important communities. The
governor of New Mexico in his last report to the Secretary of the
Interior suggests some modifications of the provisions of the pending
bills relating to the small holdings of farm lands. I commend to your
attention the suggestions of the Secretary of the Interior upon this
subject.

The enactment of a national bankrupt law I still regard as very
desirable. The Constitution having given to Congress jurisdiction of
this subject, it should be exercised and uniform rules provided for the
administration of the affairs of insolvent debtors. The inconveniences
resulting from the occasional and temporary exercise of this power by
Congress and from the conflicting State codes of insolvency which come
into force intermediately should be removed by the enactment of a
simple, inexpensive, and permanent national bankrupt law.

I also renew my recommendation in favor of legislation affording just
copyright protection to foreign authors on a footing of reciprocal
advantage for our authors abroad.

It may still be possible for this Congress to inaugurate by suitable
legislation a movement looking to uniformity and increased safety in the
use of couplers and brakes upon freight trains engaged in interstate
commerce. The chief difficulty in the way is to secure agreement as to
the best appliances, simplicity, effectiveness, and cost being
considered. This difficulty will only yield to legislation, which should
be based upon full inquiry and impartial tests. The purpose should be to
secure the cooperation of all well-disposed managers and owners; but the
fearful fact that every year's delay involves the sacrifice of 2,000
lives and the maiming of 20,000 young men should plead both with
Congress and the managers against any needless delay.

The subject of the conservation and equal distribution of the water
supply of the arid regions has had much attention from Congress, but has
not as yet been put upon a permanent and satisfactory basis. The urgency
of the subject does not grow out of any large present demand for the use
of these lands for agriculture, but out of the danger that the water
supply and the sites for the necessary catch basins may fall into the
hands of individuals or private corporations and be used to render
subservient the large areas dependent upon such supply. The owner of the
water is the owner of the lands, however the titles may run. All
unappropriated natural water sources and all necessary reservoir sites
should be held by the Government for the equal use at fair rates of the
homestead settlers who will eventually take up these lands. The United
States should not, in my opinion, undertake the construction of dams or
canals, but should limit its work to such surveys and observations as
will determine the water supply, both surface and subterranean, the
areas capable of irrigation, and the location and storage capacity of
reservoirs. This done, the use of the water and of the reservoir sites
might be granted to the respective States or Territories or to
individuals or associations upon the condition that the necessary works
should be constructed and the water furnished at fair rates without
discrimination, the rates to be subject to supervision by the
legislatures or by boards of water commissioners duly constituted. The
essential thing to be secured is the common and equal use at fair rates
of the accumulated water supply. It were almost better that these lands
should remain arid than that those who occupy them should become the
slaves of unrestrained monopolies controlling the one essential element
of land values and crop results.

The use of the telegraph by the Post-Office Department as a means for
the rapid transmission of written communications is, I believe, upon
proper terms, quite desirable. The Government does not own or operate
the railroads, and it should not, I think, own or operate the telegraph
lines. It does, however, seem to be quite practicable for the Government
to contract with the telegraph companies, as it does with railroad
companies, to carry at specified rates such communications as the
senders may designate for this method of transmission. I recommend that
such legislation be enacted as will enable the Post-Office Department
fairly to test by experiment the advantages of such a use of the
telegraph.

If any intelligent and loyal company of American citizens were required
to catalogue the essential human conditions of national life, I do not
doubt that with absolute unanimity they would begin with "free and
honest elections." And it is gratifying to know that generally there is
a growing and nonpartisan demand for better election laws; but against
this sign of hope and progress must be set the depressing and undeniable
fact that election laws and methods are sometimes cunningly contrived to
secure minority control, while violence completes the shortcomings of
fraud.

In my last annual message I suggested that the development of the
existing law providing a Federal supervision of Congressional elections
offered an effective method of reforming these abuses. The need of such
a law has manifested itself in many parts of the country, and its
wholesome restraints and penalties will be useful in all. The
constitutionality of such legislation has been affirmed by the Supreme
Court. Its probable effectiveness is evidenced by the character of the
opposition that is made to it. It has been denounced as if it were a new
exercise of Federal power and an invasion of the rights of States.
Nothing could be further from the truth. Congress has already fixed the
time for the election of members of Congress. It has declared that votes
for members of Congress must be by written or printed ballot; it has
provided for the appointment by the circuit courts in certain cases, and
upon the petition of a certain number of citizens, of election
supervisors, and made it their duty to supervise the registration of
voters conducted by the State officers; to challenge persons offering to
register; to personally inspect and scrutinize the registry lists, and
to affix their names to the lists for the purpose of identification and
the prevention of frauds; to attend at elections and remain with the
boxes till they are all cast and counted; to attach to the registry
lists and election returns any statement touching the accuracy and
fairness of the registry and election, and to take and transmit to the
Clerk of the House of Representatives any evidence of fraudulent
practices which may be presented to them. The same law provides for the
appointment of deputy United States marshals to attend at the polls,
support the supervisors in the discharge of their duties, and to arrest
persons violating the election laws. The provisions of this familiar
title of the Revised Statutes have been put into exercise by both the
great political parties, and in the North as well as in the South, by
the filing with the court of the petitions required by the law.

It is not, therefore, a question whether we shall have a Federal
election law, for we now have one and have had for nearly twenty years,
but whether we shall have an effective law. The present law stops just
short of effectiveness, for it surrenders to the local authorities all
control over the certification which establishes the prima facie right
to a seat in the House of Representatives. This defect should be cured.
Equality of representation and the parity of the electors must be
maintained or everything that is valuable in our system of government is
lost. The qualifications of an elector must be sought in the law, net in
the opinions, prejudices, or fears of any class, however powerful. The
path of the elector to the ballot box must be free from the ambush of
fear and the enticements of fraud; the count so true and open that none
shall gainsay it. Such a law should be absolutely nonpartisan and
impartial. It should give the advantage to honesty and the control to
majorities. Surely there is nothing sectional about this creed, and if
it shall happen that the penalties of laws intended to enforce these
rights fall here and not there it is not because the law is sectional,
but because, happily, crime is local and not universal. Nor should it be
forgotten that every law, whether relating to elections or to any other
subject, whether enacted by the State or by the nation, has force behind
it; the courts, the marshal or constable, the posse comitatus, the
prison, are all and always behind the law.

One can not be justly charged with unfriendliness to any section or
class who seeks only to restrain violations of law and of personal
right. No community will find lawlessness profitable. No community can
afford to have it known that the officers who are charged with the
preservation of the public peace and the restraint of the criminal
classes are themselves the product of fraud or violence. The magistrate
is then without respect and the law without sanction. The floods of
lawlessness can not be leveed and made to run in one channel. The
killing of a United States marshal carrying a writ of arrest for an
election offense is full of prompting and suggestion to men who are
pursued by a city marshal for a crime against life or property.

But it is said that this legislation will revive race animosities, and
some have even suggested that when the peaceful methods of fraud are
made impossible they may be supplanted by intimidation and violence. If
the proposed law gives to any qualified elector by a hair's weight more
than his equal influence or detracts by so much from any other qualified
elector, it is fatally impeached. But if the law is equal and the
animosities it is to evoke grow out of the fact that some electors have
been accustomed to exercise the franchise for others as well as for
themselves, then these animosities ought not to be confessed without
shame, and can not be given any weight in the discussion without
dishonor No choice is left to me but to enforce with vigor all laws
intended to secure to the citizen his constitutional rights and to
recommend that the inadequacies of such laws be promptly remedied. If to
promote with zeal and ready interest every project for the development
of its material interests, its rivers, harbors, mines, and factories,
and the intelligence, peace, and security under the law of its
communities and its homes is not accepted as sufficient evidence of
friendliness to any State or section, I can not add connivance at
election practices that not only disturb local results, but rob the
electors of other States and sections of their most priceless political
rights.

The preparation of the general appropriation bills should be conducted
with the greatest care and the closest scrutiny of expenditures.
Appropriations should be adequate to the needs of the public service,
but they should be absolutely free from prodigality.

I venture again to remind you that the brief time remaining for the
consideration of the important legislation now awaiting your attention
offers no margin for waste. If the present duty is discharged with
diligence, fidelity, and courage, the work of the Fifty-first Congress
may be confidently submitted to the considerate judgment of the people.
BENJ. HARRISON

***

State of the Union Address
Benjamin Harrison
December 9, 1891

To the Senate and House of Representatives:

The reports of the heads of the several Executive Departments required
by law to be submitted to me, which are herewith transmitted, and the
reports of the Secretary of the Treasury and the Attorney-General, made
directly to Congress, furnish a comprehensive view of the administrative
work of the last fiscal year relating to internal affair. It would be of
great advantage if these reports could have an alternative perusal by
every member of Congress and by all who take an interest in public
affairs. Such a perusal could not fail to excite a higher appreciation
of the vast labor and conscientious effort which are given to the
conduct of our civil administration.

The reports will, I believe, show that every question has been
approached, considered, and decided from the standpoint of public duty
upon considerations affecting the public interests alone. Again I invite
to every branch of the service the attention and scrutiny of Congress.

The work of the State Department during the last year has been
characterized by an unusual number of important negotiations and by
diplomatic results of a notable and highly beneficial character. Among
these are the reciprocal trade arrangements which have been concluded,
in the exercise of the powers conferred by section 3 of the tariff law,
with the Republic of Brazil, with Spain for its West India possessions,
and with Santo Domingo. Like negotiations with other countries have been
much advanced, and it is hoped that before the close of the year further
definitive trade arrangements of great value will be concluded.

In view of the reports which had been received as to the diminution of
the seal herds in the Bering Sea, I deemed it wise to propose to Her
Majesty's Government in February last that an agreement for a closed
season should be made pending the negotiations for arbitration, which
then seemed to be approaching a favorable conclusion. After much
correspondence and delays, for which this Government was not
responsible, an agreement was reached and signed on the 15th of June, by
which Great Britain undertook from that date and until May 1, 1892, to
prohibit the killing by her subjects of seals in the Bering Sea, and the
Government of the United States during the same period to enforce its
existing prohibition against pelagic sealing and to limit the catch by
the fur-seal company upon the islands to 7,500 skins. If this agreement
could have been reached earlier in response to the strenuous endeavors
of this Government, it would have been more effective; but coming even
as late as it did it unquestionably resulted in greatly diminishing the
destruction of the seals by the Canadian sealers.

In my last annual message I stated that the basis of arbitration
proposed by Her Majesty's Government for the adjustment of the
long-pending controversy as to the seal fisheries was not acceptable. I
am glad now to be able to announce that terms satisfactory to this
Government have been agreed upon and that an agreement as to the
arbitrators is all that is necessary to the completion of the
convention. In view of the advanced position which this Government has
taken upon the subject of international arbitration, this renewed
expression of our adherence to this method for the settlement of
disputes such as have arisen in the Bering Sea will, I doubt not, meet
with the concurrence of Congress.

Provision should be made for a joint demarcation of the frontier line
between Canada and the United States wherever required by the increasing
border settlements, and especially for the exact location of the water
boundary in the straits and rivers.

I should have been glad to announce some favorable disposition of the
boundary dispute between Great Britain and Venezuela touching the
western frontier of British Guiana, but the friendly efforts of the
United States in that direction have thus far been unavailing. This
Government will continue to express its concern at any appearance of
foreign encroachment on territories long under the administrative
control of American States. The determination of a disputed boundary is
easily attainable by amicable arbitration where the rights of the
respective parties rest, as here, on historic facts readily
ascertainable.

The law of the last Congress providing a system of inspection for our
meats intended for export, and clothing the President with power to
exclude foreign products from our market in case the country sending
them should perpetuate unjust discriminations against any product of the
United States, placed this Government in a position to effectively urge
the removal of such discriminations against our meats. It is gratifying
to be able to state that Germany, Denmark, Italy, Austria, and France,
in the order named, have opened their ports to inspected American pork
products. The removal of these restrictions in every instance was asked
for and given solely upon the ground that we have now provided a meat
inspection that should be accepted as adequate to the complete removal
of the dangers, real or fancied, which had been previously urged. The
State Department, our ministers abroad, and the Secretary of Agriculture
have cooperated with unflagging and intelligent zeal for the
accomplishment of this great result. The outlines of an agreement have
been reached with Germany looking to equitable trade concessions in
consideration of the continued free importation of her sugars, but the
time has not yet arrived when this correspondence can be submitted to
Congress.

The recent political disturbances in the Republic of Brazil have excited
regret and solicitude. The information we possessed was too meager to
enable us to form a satisfactory judgment of the causes leading to the
temporary assumption of supreme power by President Fonseca; but this
Government did not fail to express to him its anxious solicitude for the
peace of Brazil and for the maintenance of the free political
institutions which had recently been established there, nor to offer our
advice that great moderation should be observed in the clash of parties
and the contest for leadership. These counsels were received in the most
friendly spirit, and the latest information is that constitutional
government has been reestablished without bloodshed.

The lynching at New Orleans in March last of eleven men of Italian
nativity by a mob of citizens was a most deplorable and discreditable
incident. It did not, however, have its origin in any general animosity
to the Italian people, nor in any disrespect to the Government of Italy,
with which our relations were of the most friendly character. The fury
of the mob was directed against these men as the supposed participants
or accessories in the murder of a city officer. I do not allude to this
as mitigating in any degree this offense against law and humanity, but
only as affecting the international questions which grew out of it. It
was at once represented by the Italian minister that several of those
whose lives had been taken by the mob were Italian subjects, and a
demand was made for the punishment of the participants and for an
indemnity to the families of those who were killed. It is to be
regretted that the manner in which these claims were presented was not
such as to promote a calm discussion of the questions involved; but this
may well be attributed to the excitement and indignation which the crime
naturally evoked. The views of this Government as to its obligations to
foreigners domiciled here were fully stated in the correspondence, as
well as its purpose to make an investigation of the affair with a view
to determine whether there were present any circumstances that could
under such rules of duty as we had indicated create an obligation upon
the United States. The temporary absence of a minister plenipotentiary
of Italy at this capital has retarded the further correspondence, but it
is not doubted that a friendly conclusion is attainable.

Some suggestions growing out of this unhappy incident are worthy the
attention of Congress. It would, I believe, be entirely competent for
Congress to make offenses against the treaty rights of foreigners
domiciled in the United States cognizable in the Federal courts. This
has not, however, been done, and the Federal officers and courts have no
power in such cases to intervene, either for the protection of a foreign
citizen or for the punishment of his slayers. It seems to me to follow,
in this state of the law, that the officers of the State charged with
police and judicial powers in such cases must in the consideration of
international questions growing out of such incidents be regarded in
such sense as Federal agents as to make this Government answerable for
their acts in cases where it would be answerable if the United States
had used its constitutional power to define and punish crime against
treaty rights.

The civil war in Chile, which began in January last, was continued, but
fortunately with infrequent and not important armed collisions, until
August 28, when the Congressional forces landed near Valparaiso and
after a bloody engagement captured that city. President Balmaceda at
once recognized that his cause was lost, and a Provisional Government
was speedily established by the victorious party. Our minister was
promptly directed to recognize and put himself in communication with
this Government so soon as it should have established its de facto
character, which was done. During the pendency of this civil contest
frequent indirect appeals were made to this Government to extend
belligerent rights to the insurgents and to give audience to their
representatives. This was declined, and that policy was pursued
throughout which this Government when wrenched by civil war so
strenuously insisted upon on the part of European nations. The Itata, an
armed vessel commanded by a naval officer of the insurgent fleet, manned
by its sailors and with soldiers on board, was seized under process of
the United States court at San Diego, Cal., for a violation of our
neutrality laws. While in the custody of an officer of the court the
vessel was forcibly wrested from his control and put to sea. It would
have been inconsistent with the dignity and self-respect of this
Government not to have insisted that the Itala should be returned to San
Diego to abide the judgment of the court. This was so clear to the junta
of the Congressional party, established at Iquique, that before the
arrival of the Itata at that port the secretary of foreign relations of
the Provisional Government addressed to Rear-Admiral Brown, commanding
the United States naval forces, a communication, from which the
following is an extract: The Provisional Government has learned by the
cablegrams of the Associated Press that the transport Itata, detained in
San Diego by order of the United States for taking on board munitions of
war, and in possession of the marshal, left the port, carrying on board
this official, who was landed at a point near the coast, and then
continued her voyage. If this news be correct this Government would
deplore the conduct of the Itata, and as an evidence that it is not
disposed to support or agree to the infraction of the laws of the United
States the undersigned takes advantage of the personal relations you
have been good enough to maintain with him since your arrival in this
port to declare to you that as soon as she is within reach of our orders
his Government will put the Itata, with the arms and munitions she took
on board in Sail Diego, at the disposition of the United States. A trial
in the district court of the United States for the southern district of
California has recently resulted in a decision holding, among other
things, that inasmuch as the Congressional party had not been recognized
as a belligerent the acts done in its interest could not be a violation
of our neutrality laws. From this judgment the United States has
appealed, not that the condemnation of the vessel is a matter of
importance, but that we may know what the present state of our law is;
for if this construction of the statute is correct there is obvious
necessity for revision and amendment.

During the progress of the war in Chile this Government tendered its
good offices to bring about a peaceful adjustment, and it was at one
time hoped that a good result might be reached; but in this we were
disappointed.

The instructions to our naval officers and to our minister at Santiago
from the first to the last of this struggle enjoined upon them the most
impartial treatment and absolute noninterference. I am satisfied that
these instructions were observed and that our representatives were
always watchful to use their influence impartially in the interest of
humanity, and on more than one occasion did so effectively. We could not
forget, however, that this Government was in diplomatic relations with
the then established Government of Chile, as it is now in such relations
with the successor of that Government. I am quite sure that President
Montt, who has, under circumstances of promise for the peace of Chile,
been installed as President of that Republic, will not desire that in
the unfortunate event of any revolt against his authority the policy of
this Government should be other than that which we have recently
observed. No official complaint of the conduct of our minister or of our
naval officers during the struggle has been presented to this
Government, and it is a matter of regret that so many of our own people
should have given ear to unofficial charges and complaints that
manifestly had their origin in rival interests and in a wish to pervert
the relations of the United States with Chile.

The collapse of the Government of Balmaceda brought about a condition
which is unfortunately too familiar in the history of the Central and
South American States. With the overthrow of the Balmaceda Government he
and many of his councilors and officers became at once fugitives for
their lives and appealed to the commanding officers of the foreign naval
vessels in the harbor of Valparaiso and to the resident foreign
ministers at Santiago for asylum. This asylum was freely given,
according to my information, by the naval vessels of several foreign
powers and by several of the legations at Santiago. The American
minister as well as his colleagues, acting upon the impulse of humanity,
extended asylum to political refugees whose lives were in peril. I have
not been willing to direct the surrender of such of these persons as are
still in the American legation without suitable conditions.

It is believed that the Government of Chile is not in a position, in
view of the precedents with which it has been connected, to broadly deny
the right of asylum, and the correspondence has not thus far presented
any such denial. The treatment of our minister for a time was such as to
call for a decided protest, and it was very gratifying to observe that
unfriendly measures, which were undoubtedly the result of the prevailing
excitement, were at once rescinded or suitably relaxed.

On the 16th of October an event occurred in Valparaiso so serious and
tragic in its circumstances and results as to very justly excite the
indignation of our people and to call for prompt and decided action on
the part of this Government. A considerable number of the sailors of the
United States steamship Baltimore, then in the harbor at Valparaiso,
being upon shore leave and unarmed, were assaulted by armed men nearly
simultaneously in different localities in the city. One petty officer
was killed outright and seven or eight seamen were seriously wounded,
one of whom has since died. So savage and brutal was the assault that
several of our sailors received more than two and one as many as
eighteen stab wounds. An investigation of the affair was promptly made
by a board of officers of the Baltimore, and their report shows that
these assaults were unprovoked, that our men were conducting themselves
in a peaceable and orderly manner, and that some of the police of the
city took part in the assault and used their weapons with fatal effect,
while a few others, with some well-disposed citizens, endeavored to
protect our men. Thirty-six of our sailors were arrested, and some of
them while being taken to prison were cruelly beaten and maltreated. The
fact that they were all discharged, no criminal charge being lodged
against any one of them, shows very clearly that they were innocent of
any breach of the peace.

So far as I have yet been able to learn no other explanation of this
bloody work has been suggested than that it had its origin in hostility
to those men as sailors of the United States, wearing the uniform of
their Government, and not in any individual act or personal animosity.
The attention of the Chilean Government was at once called to this
affair, and a statement of the facts obtained by the investigation we
had conducted was submitted, accompanied by a request to be advised of
any other or qualifying facts in the possession of the Chilean
Government that might tend to relieve this affair of the appearance of
an insult to this Government. The Chilean Government was also advised
that if such qualifying facts did not exist this Government would
confidently expect full and prompt reparation.

It is to be regretted that the reply of the secretary for foreign
affairs of the Provisional Government was couched in an offensive tone.
To this no response has been made. This Government is now awaiting the
result of an investigation which has been conducted by the criminal
court at Valparaiso. It is reported unofficially that the investigation
is about completed, and it is expected that the result will soon be
communicated to this Government, together with some adequate and
satisfactory response to the note by which the attention of Chile was
called to this incident. If these just expectations should be
disappointed or further needless delay intervene, I will by a special
message bring this matter again to the attention of Congress for such
action as may be necessary. The entire correspondence with the
Government of Chile will at an early day be submitted to Congress.

I renew the recommendation of my special message dated January 16, 1890,
for the adoption of the necessary legislation to enable this Government
to apply in the case of Sweden and Norway the same rule in respect to
the levying of tonnage dues as was claimed and secured to the shipping
of the United States in 1828 under Article VIII of the treaty of 1827.

The adjournment of the Senate without action on the pending acts for the
suppression of the slave traffic in Africa and for the reform of the
revenue tariff of the Independent State of the Kongo left this
Government unable to exchange those acts on the date fixed, July 2,
1891. A modus vivendi has been concluded by which the power of the Kongo
State to levy duties on imports is left unimpaired, and by agreement of
all the signatories to the general slave-trade act the time for the
exchange of ratifications on the part of the United States has been
extended to February 2, 1892.

The late outbreak against foreigners in various parts of the Chinese
Empire has been a cause of deep concern in view of the numerous
establishments of our citizens in the interior of that country. This
Government can do no less than insist upon a continuance of the
protective and punitory measures which the Chinese Government has
heretofore applied. No effort will be omitted to protect our citizens
peaceably sojourning in China, but recent unofficial information
indicates that what was at first regarded as an outbreak of mob violence
against foreigners has assumed the larger form of an insurrection
against public order.

The Chinese Government has declined to receive Mr. Blair as the minister
of the United States on the ground that as a participant while a Senator
in the enactment of the existing legislation against the introduction of
Chinese laborers he has become unfriendly and objectionable to China. I
have felt constrained to point out to the Chinese Government the
untenableness of this position, which seems to rest as much on the
unacceptability of our legislation as on that of the person chosen, and
which if admitted would practically debar the selection of any
representative so long as the existing laws remain in force.

You will be called upon to consider the expediency of making special
provision by law for the temporary admission of some Chinese artisans
and laborers in connection with the exhibit of Chinese industries at the
approaching Columbian Exposition. I regard it as desirable that the
Chinese exhibit be facilitated in every proper way.

A question has arisen with the Government of Spain touching the rights
of American citizens in the Caroline Islands. Our citizens there long
prior to the confirmation of Spain's claim to the islands had secured by
settlement and purchase certain rights to the recognition and
maintenance of which the faith of Spain was pledged. I have had reason
within the past year very strongly to protest against the failure to
carry out this pledge on the part of His Majesty's ministers, which has
resulted in great injustice and injury to the American residents.

The Government and people of Spain propose to celebrate the four
hundredth anniversary of the discovery of America by holding an
exposition at Madrid, which will open on the 12th of September and
continue until the 31st of December, 1892. A cordial invitation has been
extended to the United States to take part in this commemoration, and as
Spain was one of the first nations to express the intention to
participate in the World's Columbian Exposition at Chicago, it would be
very appropriate for this Government to give this invitation its
friendly promotion.

Surveys for the connecting links of the projected intercontinental
railway are in progress, not only in Mexico, but at various points along
the course mapped out. Three surveying parties are now in the field
under the direction of the commission. Nearly 1,000 miles of the
proposed road have been surveyed, including the most difficult part,
that through Ecuador and the southern part of Colombia. The reports of
the engineers are very satisfactory, and show that no insurmountable
obstacles have been met with.

On November 12, 1884, a treaty was concluded with Mexico reaffirming the
boundary between the two countries as described in the treaties of
February 2, 1848, and December 30, 1853. March 1, 1889, a further treaty
was negotiated to facilitate the carrying out of the principles of the
treaty of 1884 and to avoid the difficulties occasioned by reason of the
changes and alterations that take place from natural causes in the Rio
Grande and Colorado rivers in the portions thereof constituting the
boundary line between the two Republics. The International Boundary
Commission provided for by the treaty of 1889 to have exclusive
jurisdiction of any question that may arise has been named by the
Mexican Government. An appropriation is necessary to enable the United
States to fulfill its treaty obligations in this respect.

The death of King Kalakaua in the United States afforded occasion to
testify our friendship for Hawaii by conveying the King's body to his
own land in a naval vessel with all due honors. The Government of his
successor, Queen Liliuokolani is seeking to promote closer commercial
relations with the United States. Surveys for the much-needed submarine
cable from our Pacific coast to Honolulu are in progress, and this
enterprise should have the suitable promotion of the two Governments. I
strongly recommend that provision be made for improving the harbor of
Pearl River and equipping it as a naval station.

The arbitration treaty formulated by the International American
Conference lapsed by reason of the failure to exchange ratifications
fully within the limit of time provided; but several of the Governments
concerned have expressed a desire to save this important result of the
conference by an extension of the period. It is, in my judgment,
incumbent upon the United States to conserve the influential initiative
it has taken in this measure by ratifying the instrument and by
advocating the proposed extension of the time for exchange. These views
have been made known to the other signatories.

This Government has found occasion to express in a friendly spirit, but
with much earnestness, to the Government of the Czar its serious concern
because of the harsh measures now being enforced against the Hebrews in
Russia. By the revival of antisemitic laws, long in abeyance, great
numbers of those unfortunate people have been constrained to abandon
their homes and leave the Empire by reason of the impossibility of
finding subsistence within the pale to which it is sought to confine
them. The immigration of these people to the United States--many other
countries being closed to them--is largely increasing and is likely to
assume proportions which may make it difficult to find homes and
employment for them here and to seriously affect the labor market. It is
estimated that over 1,000,000 will be forced from Russia within a few
years. The Hebrew is never a beggar; he has always kept the law--life by
toil--often under severe and oppressive civil restrictions. It is also
true that no race, sect, or class has more fully cared for its own than
the Hebrew race. But the sudden transfer of such a multitude under
conditions that tend to strip them of their small accumulations and to
depress their energies and courage is neither good for them nor for us.

The banishment, whether by direct decree or by not less certain indirect
methods, of so large a number of men and women is not a local question.
A decree to leave one country is in the nature of things an order to
enter another--some other. This consideration, as well as the suggestion
of humanity, furnishes ample ground for the remonstrances which we have
presented to Russia, while our historic friendship for that Government
can not fail to give the assurance that our representations are those of
a sincere wellwisher.

The annual report of the Maritime Canal Company of Nicaragua shows that
much costly and necessary preparatory work has been done during the year
in the construction of shops, railroad tracks, and harbor piers and
breakwaters, and that the work of canal construction has made some
progress.

I deem it to be a matter of the highest concern to the United States
that this canal, connecting the waters of the Atlantic and Pacific
oceans and giving to us a short water communication between our ports
upon those two great seas, should be speedily constructed and at the
smallest practicable limit of cost. The gain in freights to the people
and the direct saving to the Government of the United States in the use
of its naval vessels would pay the entire cost of this work within a
short series of years. The report of the Secretary of the Navy shows the
saving in our naval expenditures which would result.

The Senator from Alabama (Mr. Morgan) in his argument upon this subject
before the Senate at the last session did not overestimate the
importance of this work when he said that "the canal is the most
important subject now connected with the commercial growth and progress
of the United States."

If this work is to be promoted by the usual financial methods and
without the aid of this Government, the expenditures in its
interest-bearing securities and stock will probably be twice the actual
cost. This will necessitate higher tolls and constitute a heavy and
altogether needless burden upon our commerce and that of the world.
Every dollar of the bonds and stock of the company should represent a
dollar expended in the legitimate and economical prosecution of the
work. This is only possible by giving to the bonds the guaranty of the
United States Government. Such a guaranty would secure the ready sale at
par of a 3 per cent bond from time to time as the money was needed. I do
not doubt that built upon these business methods the canal would when
fully inaugurated earn its fixed charges and operating expenses. But if
its bonds are to be marketed at heavy discounts and every bond sold is
to be accompanied by a gift of stock, as has come to be expected by
investors in such enterprises, the traffic will be seriously burdened to
pay interest and dividends. I am quite willing to recommend Government
promotion in the prosecution of a work which, if no other means offered
for securing its completion, is of such transcendent interest that the
Government should, in my opinion, secure it by direct appropriations
from its Treasury.

A guaranty of the bonds of the canal company to an amount necessary to
the completion of the canal could, I think, be so given as not to
involve any serious risk of ultimate loss. The things to be carefully
guarded are the completion of the work within the limits of the
guaranty, the subrogation of the United States to the rights of the
first-mortgage bondholders for any amounts it may have to pay, and in
the meantime a control of the stock of the company as a security against
mismanagement and loss. I most sincerely hope that neither party nor
sectional lines will be drawn upon this great American project, so full
of interest to the people of all our States and so influential in its
effects upon the prestige and prosperity of our common country.

The island of Navassa, in the West Indian group, has, under the
provisions of Title VII of the Revised Statutes, been recognized by the
President as appertaining to the United States. It contains guano
deposits, is owned by the Navassa Phosphate Company, and is occupied
solely its employees. In September, 1889, a revolt took place among
these laborers, resulting in the killing of some of the agents of the
company, caused, as the laborers claimed, by cruel treatment. These men
were arrested and tried in the United States court at Baltimore, under
section 5576 of the statute referred to, as if the offenses had been
committed on board a merchant vessel of the United States on the high
seas. There appeared on the trial and otherwise came to me such
evidences of the bad treatment of the men that in consideration of this
and of the fact that the men had no access to any public officer or
tribunal for protection or the redress of their wrongs I commuted the
death sentences that had been passed by the court upon three of them. In
April last my attention was again called to this island and to the
unregulated condition of things there by a letter from a colored
laborer, who complained that he was wrongfully detained upon the island
by the phosphate company after the expiration of his contract of
service. A naval vessel was sent to examine into the case of this man
and generally into the condition of things on the island. It was found
that the laborer referred to had been detained beyond the contract limit
and that a condition of revolt again existed among the laborers. A board
of naval officers reported, among other things, as follows: We would
desire to state further that the discipline maintained on the island
seems to be that of a convict establishment without its comforts and
cleanliness, and that until more attention is paid to the shipping of
laborers by placing it under Government supervision to prevent
misunderstanding and misrepresentation, and until some amelioration is
shown in the treatment of the laborers, these disorders will be of
constant occurrence. I recommend legislation that shall place labor
contracts upon this and other islands having the relation that Navassa
has to the United States under the supervision of a court commissioner,
and that shall provide at the expense of the owners an officer to reside
upon the island, with power to judge and adjust disputes and to enforce
a just and humane treatment of the employees. It is inexcusable that
American laborers should be left within our own jurisdiction without
access to any Government officer or tribunal for their protection and
the redress of their wrongs.

International copyright has been secured, in accordance with the
conditions of the act of March 3, 1891, with Belgium, France, Great
Britain and the British possessions, and Switzerland, the laws of those
countries permitting to our citizens the benefit of copyright on
substantially the same basis as to their own citizens or subjects.

With Germany a special convention has been negotiated upon this subject
which will bring that country within the reciprocal benefits of our
legislation.

The general interest in the operations of the Treasury Department has
been much augmented during the last year by reason of the conflicting
predictions, which accompanied and followed the tariff and other
legislation of the last Congress affecting the revenues, as to the
results of this legislation upon the Treasury and upon the country. On
the one hand it was contended that imports would so fall off as to leave
the Treasury bankrupt and that the prices of articles entering into the
living of the people would be so enhanced as to disastrously affect
their comfort and happiness, while on the other it was argued that the
loss to the revenue, largely the result of placing sugar on the free
list, would be a direct gain to the people; that the prices of the
necessaries of life, including those most highly protected, would not be
enhanced; that labor would have a larger market and the products of the
farm advanced prices, while the Treasury surplus and receipts would be
adequate to meet the appropriations, including the large exceptional
expenditures for the refunding to the States of the direct tax and the
redemption of the 4 1/2 per cent bonds.

It is not my purpose to enter at any length into a discussion of the
effects of the legislation to which I have referred; but a brief
examination of the statistics of the Treasury and a general glance at
the state of business throughout the country will, I think, satisfy any
impartial inquirer that its results have disappointed the evil
prophecies of its opponents and in a large measure realized the hopeful
predictions of its friends. Rarely, if ever before, in the history of
the country has there been a time when the proceeds of one day's labor
or the product of one farmed acre would purchase so large an amount of
those things that enter into the living of the masses of the people. I
believe that a full test will develop the fact that the tariff act of
the Fifty-first Congress is very favorable in its average effect upon
the prices of articles entering into common use.

During the twelve months from October 1, 1890, to September 30, 1891,
the total value of our foreign commerce (imports and exports combined)
was $1,747,806,406, which was the largest of any year in the history of
the United States. The largest in any previous year was in 1890, when
our commerce amounted to $1,647,139,093, and the last year exceeds this
enormous aggregate by over one hundred millions. It is interesting, and
to some will be surprising, to know that during the year ending
September 30, 1891, our imports of merchandise amounted to $824,715,270,
which was an increase of more than $11,000,000 over the value of the
imports of the corresponding months of the preceding year, when the
imports of merchandise were unusually large in anticipation of the
tariff legislation then pending. The average annual value of the imports
of merchandise for the ten years from 1881 to 1890 was $692,186,522, and
during the year ending September 30, 1891, this annual average was
exceeded by $132,528,469.

The value of free imports during the twelve months ending September 30,
1891, was $118,092,387 more than the value of free imports during the
corresponding twelve months of the preceding year, and there was during
the same period a decrease of $106,846,508 in the value of imports of
dutiable merchandise. The percentage of merchandise admitted free of
duty during the year to which I have referred, the first under the new
tariff, was 48.18, while during the preceding twelve months, under the
old tariff, the percentage was 34.27, an increase of 13.91 per cent. If
we take the six months ending September 30 last, which covers the time
during which sugars have been admitted free of duty, the per cent of
value of merchandise imported free of duty is found to be 55.37, which
is a larger percentage of free imports than during any prior fiscal year
in the history of the Government.

If we turn to exports of merchandise, the statistics are full of
gratification. The value of such exports of merchandise for the twelve
months ending September 30, 1891, was $923,091,136, while for the
corresponding previous twelve months it was $860,177,115, an increase of
$62,914,021, which is nearly three times the average annual increase of
exports of merchandise for the preceding twenty years. This exceeds in
amount and value the exports of merchandise during any year in the
history of the Government. The increase in the value of exports of
agricultural products during the year referred to over the corresponding
twelve months of the prior year was $45,846,197, while the increase in
the value of exports of manufactured products was $16,838,240.

There is certainly nothing in the condition of trade, foreign or
domestic, there is certainly nothing in the condition of our people of
any class, to suggest that the existing tariff and revenue legislation
bears oppressively upon the people or retards the commercial development
of the nation. It may be argued that our condition would be better if
tariff legislation were upon a free-trade basis; but it can not be
denied that all the conditions of prosperity and of general contentment
are present in a larger degree than ever before in our history, and
that, too, just when it was prophesied they would be in the worst state.
Agitation for radical changes in tariff and financial legislation can
not help but may seriously impede business, to the prosperity of which
some degree of stability in legislation is essential.

I think there are conclusive evidences that the new tariff has created
several great industries, which will within a few years give employment
to several hundred thousand American working men and women. In view of
the somewhat overcrowded condition of the labor market of the United
States, every patriotic citizen should rejoice at such a result.

The report of the Secretary of the Treasury shows that the total
receipts of the Government from all sources for the fiscal year ending
June 30, 1891, were $458,544,233.03, while the expenditures for the same
period were $421,304,470.46, leaving a surplus of $37,239,762.57.

The receipts of the fiscal year ending June 30, 1892, actual and
estimated, are $433,000,000 and the expenditures $409,000,000. For the
fiscal year ending June 30, 1893, the estimated receipts are
$455,336,350 and the expenditures $441,300,093.

Under the law of July 14, 1890, the Secretary of the Treasury has
purchased (since August 13) during the fiscal year 48,393,113 ounces of
silver bullion at an average cost of $1.045 per ounce. The highest price
paid during the year was $1.2025 and the lowest $0.9636. In exchange for
this silver bullion there have been issued $50,577,498 of the Treasury
notes authorized by the act. The lowest price of silver reached during
the fiscal year was $0.9636 on April 22, 1891; but on November 1 the
market price was only $0.96, which would give to the silver dollar a
bullion value of 74 1/4 cents.

Before the influence of the prospective silver legislation was felt in
the market silver was worth in New York about $0.955 per ounce. The
ablest advocates of free coinage in the last Congress were most
confident in their predictions that the purchases by the Government
required by the law would at once bring the price of silver to $1.2929
per ounce, which would make the bullion value of a dollar 100 cents and
hold it there. The prophecies of the antisilver men of disasters to
result from the coinage of $2,000,000 per month were not wider of the
mark. The friends of free silver are not agreed, I think, as to the
causes that brought their hopeful predictions to naught. Some facts are
known. The exports of silver from London to India during the first nine
months of this calendar year fell off over 50 per cent, or $17,202,730,
compared with the same months of the preceding year. The exports of
domestic silver bullion from this country, which had averaged for the
last ten years over $17,000,000, fell in the last fiscal year to
$13,797,391, while for the first time in recent years the imports of
silver into this country exceeded the exports by the sum of $2,745,365.
In the previous year the net exports of silver from the United States
amounted to $8,545,455. The production of the United States increased
from 50,000,000 ounces in 1889 to 54,500,000 in 1890. The Government is
now buying and putting aside annually 54,000,000 ounces, which, allowing
for 7,140,000 ounces of new bullion used in the arts, is 6,640,000 more
than our domestic products available for coinage.

I hope the depression in the price of silver is temporary and that a
further trial of this legislation will more favorably affect it. That
the increased volume of currency thus supplied for the use of the people
was needed and that beneficial results upon trade and prices have
followed this legislation I think must be very clear to everyone. Nor
should it be forgotten that for every dollar of these notes issued a
full dollar's worth of silver bullion is at the time deposited in the
Treasury as a security for its redemption. Upon this subject, as upon
the tariff, my recommendation is that the existing laws be given a full
trial and that our business interests be spared the distressing
influence which threats of radical changes always impart. Under existing
legislation it is in the power of the Treasury Department to maintain
that essential condition of national finance as well as of commercial
prosperity--the parity in use of the coined dollars and their paper
representatives. The assurance that these powers would be freely and
unhesitatingly used has done much to produce and sustain the present
favorable business conditions.

I am still of the opinion that the free coinage of silver under existing
conditions would disastrously affect our business interests at home and
abroad. We could not hope to maintain an equality in the purchasing
power of the gold and silver dollar in our own markets, and in foreign
trade the stamp gives no added value to the bullion contained in coins.
The producers of the country, its farmers and laborers, have the highest
interest that every dollar, paper or coin, issued by the Government
shall be as good as any other. If there is one less valuable than
another, its sure and constant errand will be to pay them for their toil
and for their crops. The money lender will protect himself by
stipulating for payment in gold, but the laborer has never been able to
do that. To place business upon a silver basis would mean a sudden and
severe contraction of the currency by the withdrawal of gold and gold
notes and such an unsettling of all values as would produce a commercial
panic. I can not believe that a people so strong and prosperous as ours
will promote such a policy.

The producers of silver are entitled to just consideration, but they
should not forget that the Government is now buying and putting out of
the market what is the equivalent of the entire product of our silver
mines. This is more than they themselves thought of asking two years
ago. I believe it is the earnest desire of a great majority of the
people, as it is mine, that a full coin use shall be made of silver just
as soon as the cooperation of other nations can be secured and a ratio
fixed that will give circulation equally to gold and silver. The
business of the world requires the use of both metals; but I do not see
any prospect of gain, but much of loss, by giving up the present system,
in which a full use is made of gold and a large use of silver, for one
in which silver alone will circulate. Such an event would be at once
fatal to the further progress of the silver movement. Bimetallism is the
desired end, and the true friends of silver will be careful not to
overrun the goal and bring in silver monometallism with its necessary
attendants--the loss of our gold to Europe and the relief of the
pressure there for a larger currency. I have endeavored by the use of
official and unofficial agencies to keep a close observation of the
state of public sentiment in Europe upon this question and have not
found it to be such as to justify me in proposing an international
conference. There is, however, I am sure, a growing sentiment in Europe
in favor of a larger use of silver, and I know of no more effectual way
of promoting this sentiment than by accumulating gold here. A scarcity
of gold in the European reserves will be the most persuasive argument
for the use of silver.

The exports of gold to Europe, which began in February last and
continued until the close of July, aggregated over $70,000,000. The net
loss of gold during the fiscal year was nearly $68,000,000. That no
serious monetary disturbance resulted was most gratifying and gave to
Europe fresh evidence of the strength and stability of our financial
institutions. With the movement of crops the outflow of gold was
speedily stopped and a return set in. Up to December 1 we had recovered
of our gold lost at the port of New York $27,854,000, and it is
confidently believed that during the winter and spring this aggregate
will be steadily and largely increased.

The presence of a large cash surplus in the Treasury has for many years
been the subject of much unfavorable criticism, and has furnished an
argument to those who have desired to place the tariff upon a purely
revenue basis. It was agreed by all that the withdrawal from circulation
of so large an amount of money was an embarrassment to the business of
the country and made necessary the intervention of the Department at
frequent intervals to relieve threatened monetary panics. The surplus on
March 1, 1889, was $183,827,190.29. The policy of applying this surplus
to the redemption of the interest-bearing securities of the United
States was thought to be preferable to that of depositing it without
interest in selected national banks. There have been redeemed since the
date last mentioned of interest-bearing securities $259,079,350,
resulting in a reduction of the annual interest charge of $11,684,675.
The money which had been deposited in banks without interest has been
gradually withdrawn and used in the redemption of bonds.

The result of this policy, of the silver legislation, and of the
refunding of the 4 1/2 per cent bonds has been a large increase of the
money in circulation. At the date last named the circulation was
$1,404,205,896, or $23.03 per capita, while on the 1st day of December,
1891, it had increased to $1,577,262,070, or $24.38 per capita. The
offer of the Secretary of the Treasury to the holders of the 4 1/2 per
cent bonds to extend the time of redemption, at the option of the
Government, at an interest of 2 per cent, was accepted by the holders of
about one-half the amount, and the unextended bonds are being redeemed
on presentation.

The report of the Secretary of War exhibits the results of an
intelligent, progressive, and businesslike administration of a
Department which has been too much regarded as one of mere routine. The
separation of Secretary Proctor from the Department by reason of his
appointment as a Senator from the State of Vermont is a source of great
regret to me and to his colleagues in the Cabinet, as I am sure it will
be to all those who have had business with the Department while under
his charge.

In the administration of army affairs some especially good work has been
accomplished. The efforts of the Secretary to reduce the percentage of
desertions by removing the causes that promoted it have been so
successful as to enable him to report for the last year a lower
percentage of desertion than has been before reached in the history of
the Army. The resulting money saving is considerable, but the
improvement in the morale of the enlisted men is the most valuable
incident of the reforms which have brought about this result.

The work of securing sites for shore batteries for harbor defense and
the manufacture of mortars and guns of high power to equip them have
made good progress during the year. The preliminary work of tests and
plans which so long delayed a start is now out of the way. Some guns
have been completed, and with an enlarged shop and a more complete
equipment at Watervliet the Army will soon be abreast of the Navy in gun
construction. Whatever unavoidable causes of delay may arise, there
should be none from delayed or insufficient appropriations. We shall be
greatly embarrassed in the proper distribution and use of naval vessels
until adequate shore defenses are provided for our harbors.

I concur in the recommendation of the Secretary that the three-battalion
organization be adopted for the infantry. The adoption of a smokeless
powder and of a modern rifle equal in range, precision, and rapidity of
fire to the best now in use will, I hope, not be longer delayed.

The project of enlisting Indians and organizing them into separate
companies upon the same basis as other soldiers was made the subject of
very careful study by the Secretary and received my approval. Seven
companies have been completely organized and seven more are in process
of organization. The results of six months' training have more than
realized the highest anticipations. The men are readily brought under
discipline, acquire the drill with facility, and show great pride in the
right discharge of their duty and perfect loyalty to their officers, who
declare that they would take them into action with confidence. The
discipline, order, and cleanliness of the military posts will have a
wholesome and elevating influence upon the men enlisted, and through
them upon their tribes, while a friendly feeling for the whites and a
greater respect for the Government will certainly be promoted.

The great work done in the Record and Pension Division of the War
Department by Major Ainsworth, of the Medical Corps, and the clerks
under him is entitled to honorable mention. Taking up the work with
nearly 41,000 cases behind, he closed the last fiscal year without a
single case left over, though the new cases had increased 52 per cent in
number over the previous year by reason of the pension legislation of
the last Congress.

I concur in the recommendation of the Attorney-General that the right in
felony cases to a review by the Supreme court be limited. It would seem
that personal liberty would have a safe guaranty if the right of review
in cases involving only fine and imprisonment were limited to the
circuit court of appeals, unless a constitutional question should in
some way be involved.

The judges of the Court of Private Land Claims, provided for by the act
of March 3, 1891, have been appointed and the court organized. It is now
possible to give early relief to communities long repressed in their
development by unsettled land titles and to establish the possession and
right of settlers whose lands have been rendered valueless by adverse
and unfounded claims.

The act of July 9, 1888, provided for the incorporation and management
of a reform school for girls in the District of Columbia; but it has
remained inoperative for the reason that no appropriation has been made
for construction or maintenance. The need of such an institution is very
urgent. Many girls could be saved from depraved lives by the wholesome
influences and restraints of such a school. I recommend that the
necessary appropriation be made for a site and for construction.

The enforcement by the Treasury Department of the law prohibiting the
coming of Chinese to the United States has been effective as to such as
seek to land from vessels entering our ports. The result has been to
divert the travel to vessels entering the ports of British Columbia,
whence passage into the United States at obscure points along the
Dominion boundary is easy. A very considerable number of Chinese
laborers have during the past year entered the United States from Canada
and Mexico.

The officers of the Treasury Department and of the Department of Justice
have used every means at their command to intercept this immigration;
but the impossibility of perfectly guarding our extended frontier is
apparent. The Dominion government collects a head tax of $50 from every
Chinaman entering Canada, and thus derives a considerable revenue from
those who only use its ports to reach a position of advantage to evade
our exclusion laws. There seems to be satisfactory evidence that the
business of passing Chinamen through Canada to the United States is
organized and quite active. The Department of Justice has construed the
laws to require the return of any Chinaman found to be unlawfully in
this country to China as the country from which he came, notwithstanding
the fact that he came by way of Canada; but several of the district
courts have in cases brought before them overruled this view of the law
and decided that such persons must be returned to Canada. This
construction robs the law of all effectiveness, even if the decrees
could be executed, for the men returned can the next day recross our
border. But the only appropriation made is for sending them back to
China, and the Canadian officials refuse to allow them to reenter Canada
without the payment of the fifty-dollar head tax. I recommend such
legislation as will remedy these defects in the law.

In previous messages I have called the attention of Congress to the
necessity of so extending the jurisdiction of the United States courts
as to make triable therein any felony committed while in the act of
violating a law of the United States. These courts can not have that
independence and effectiveness which the Constitution contemplates so
long as the felonious killing of court officers, jurors, and witnesses
in the discharge of their duties or by reason of their acts as such is
only cognizable in the State courts. The work done by the
Attorney-General and the officers of his Department, even under the
present inadequate legislation, has produced some notable results in the
interest of law and order.

The Attorney-General and also the Commissioners of the District of
Columbia call attention to the defectiveness and inadequacy of the laws
relating to crimes against chastity in the District of Columbia. A
stringent code upon this subject has been provided by Congress for Utah,
and it is a matter of surprise that the needs of this District should
have been so long overlooked.

In the report of the Postmaster-General some very gratifying results are
exhibited and many betterments of the service suggested. A perusal of
the report gives abundant evidence that the supervision and direction of
the postal system have been characterized by an intelligent and
conscientious desire to improve the service. The revenues of the
Department show an increase of over $5,000,000, with a deficiency for
the year 1892 of less than $4,000,000, while the estimate for the year
1893 shows a surplus of receipts over expenditures.

Ocean mail post-offices have been established upon the steamers of the
North German Lloyd and Hamburg lines, saving by the distribution on
shipboard from two to fourteen hours' time in the delivery of mail at
the port of entry and often much more than this in the delivery at
interior places. So thoroughly has this system, initiated by Germany and
the United States, evidenced its usefulness that it can not be long
before it is installed upon all the great ocean mail-carrying
steamships.

Eight thousand miles of new postal service has been established upon
railroads, the car distribution to substations in the great cities has
been increased about 12 per cent, while the percentage of errors in
distribution has during the past year been reduced over one-half. An
appropriation was given by the last Congress for the purpose of making
some experiments in free delivery in the smaller cities and towns. The
results of these experiments have been so satisfactory that the
Postmaster-General recommends, and I concur in the recommendation, that
the free-delivery system be at once extended to towns of 5,000
population. His discussion of the inadequate facilities extended under
our present system to rural communities and his suggestions with a view
to give these communities a fuller participation in the benefits of the
postal service are worthy of your careful consideration. It is not just
that the farmer, who receives his mail at a neighboring town, should not
only be compelled to send to the post-office for it, but to pay a
considerable rent for a box in which to place it or to wait his turn at
a general-delivery window, while the city resident has his mail brought
to his door. It is stated that over 54,000 neighborhoods are under the
present system receiving mail at post-offices where money orders and
postal notes are not issued. The extension of this system to these
communities is especially desirable, as the patrons of such offices are
not possessed of the other facilities offered in more populous
communities for the transmission of small sums of money.

I have in a message to the preceding Congress expressed my views as to a
modified use of the telegraph in connection with the postal service. In
pursuance of the ocean mail law of March 3, 1891, and after a most
careful study of the whole subject and frequent conferences with
ship-owners, boards of trade, and others, advertisements were issued by
the postmaster-General for 53 lines of ocean mail service--10 to Great
Britain and the Continent, 27 to South America, 3 to China and Japan, 4
to Australia and the Pacific islands, 7 to the West Indies, and 2 to
Mexico. It was not, of course, expected that bids for all these lines
would be received or that service upon them all would be contracted for.
It was intended, in furtherance of the act, to secure as many new lines
as possible, while including in the list most or all of the foreign
lines now occupied by American ships. It was hoped that a line to
England and perhaps one to the Continent would be secured; but the
outlay required to equip such lines wholly with new ships of the first
class and the difficulty of establishing new lines in competition with
those already established deterred bidders whose interest had been
enlisted. It is hoped that a way may yet be found of overcoming these
difficulties.

The Brazil Steamship Company, by reason of a miscalculation as to the
speed of its vessels, was not able to bid under the terms of the
advertisement. The policy of the Department was to secure from the
established lines an improved service as a condition of giving to them
the benefits of the law. This in all instances has been attained. The
Postmaster-General estimates that an expenditure in American shipyards
of about $10,000,000 will be necessary to enable the bidders to
construct the ships called for by the service which they have accepted.
I do not think there is any reason for discouragement or for any turning
back from the policy of this legislation. Indeed, a good beginning has
been made, and as the subject is further considered and understood by
capitalists and shipping people new lines will be ready to meet future
proposals, and we may date from the passage of this law the revival of
American shipping interests and the recovery of a fair share of the
carrying trade of the world. We were receiving for foreign postage
nearly $2,000,000 under the old system, and the outlay for ocean mail
service did not exceed $600,000 per annum. It is estimated by the
Postmaster-General that if all the contracts proposed are completed it
will require $247,354 for this year in addition to the appropriation for
sea and inland postage already in the estimates, and that for the next
fiscal year, ending June 30, 1893, there would probably be needed about
$560,000.

The report of the Secretary of the Navy shows a gratifying increase of
new naval vessels in commission. The Newark, Concord, Bennington, and
Miantonomoh have been added during the year, with an aggregate of
something more than 11,000 tons. Twenty-four warships of all classes are
now under construction in the navy-yards and private shops; but while
the work upon them is going forward satisfactorily, the completion of
the more important vessels will yet require about a year's time. Some of
the vessels now under construction, it is believed, will be triumphs of
naval engineering. When it is recollected that the work of building a
modern navy was only initiated in the year 1883, that our naval
constructors and shipbuilders were practically without experience in the
construction of large iron or steel ships, that our engine shops were
unfamiliar with great marine engines, and that the manufacture of steel
forgings for guns and plates was almost wholly a foreign industry, the
progress that has been made is not only highly satisfactory, but
furnishes the assurance that the United States will before long attain
in the construction of such vessels, with their engines and armaments,
the same preeminence which it attained when the best instrument of ocean
commerce was the clipper ship and the most impressive exhibit of naval
power the old wooden three-decker man-of-war. The officers of the Navy
and the proprietors and engineers of our great private shops have
responded with wonderful intelligence and professional zeal to the
confidence expressed by Congress in its liberal legislation. We have now
at Washington a gun shop, organized and conducted by naval officers,
that in its system, economy, and product is unexcelled. Experiments with
armor plate have been conducted during the year with most important
results. It is now believed that a plate of higher resisting power than
any in use has been found and that the tests have demonstrated that
cheaper methods of manufacture than those heretofore thought necessary
can be used.

I commend to your favorable consideration the recommendations of the
Secretary, who has, I am sure, given to them the most conscientious
study. There should be no hesitation in promptly completing a navy of
the best modern type large enough to enable this country to display its
flag in all seas for the protection of its citizens and of its extending
commerce. The world needs no assurance of the peaceful purposes of the
United States, but we shall probably be in the future more largely a
competitor in the commerce of the world, and it is essential to the
dignity of this nation and to that peaceful influence which it should
exercise on this hemisphere that its Navy should be adequate both upon
the shores of the Atlantic and of the Pacific.

The report of the Secretary of the Interior shows that a very gratifying
progress has been made in all of the bureaus which make up that complex
and difficult Department.

The work in the Bureau of Indian Affairs was perhaps never so large as
now, by reason of the numerous negotiations which have been proceeding
with the tribes for a reduction of the reservations, with the incident
labor of making allotments, and was never more carefully conducted. The
provision of adequate school facilities for Indian children and the
locating of adult Indians upon farms involve the solution of the "Indian
question." Everything else--rations, annuities, and tribal negotiations,
with the agents, inspectors, and commissioners who distribute and
conduct them--must pass away when the Indian has become a citizen,
secure in the individual ownership of a farm from which he derives his
subsistence by his own labor, protected by and subordinate to the laws
which govern the white man, and provided by the General Government or by
the local communities in which he lives with the means of educating his
children. When an Indian becomes a citizen in an organized State or
Territory, his relation to the General Government ceases in great
measure to be that of a ward; but the General Government ought not at
once to put upon the State or Territory the burden of the education of
his children.

It has been my thought that the Government schools and school buildings
upon the reservations would be absorbed by the school systems of the
States and Territories; but as it has been found necessary to protect
the Indian against the compulsory alienation of his land by exempting
him from taxation for a period of twenty-five years, it would seem to be
right that the General Government, certainly where there are tribal
funds in its possession, should pay to the school fund of the State what
would be equivalent to the local school tax upon the property of the
Indian. It will be noticed from the report of the Commissioner of Indian
Affairs that already some contracts have been made with district schools
for the education of Indian children. There is great advantage, I think,
in bringing the Indian children into mixed schools. This process will be
gradual, and in the meantime the present educational provisions and
arrangements, the result of the best experience of those who have been
charged with this work, should be continued. This will enable those
religious bodies that have undertaken the work of Indian education with
so much zeal and with results so restraining and beneficent to place
their institutions in new and useful relations to the Indian and to his
white neighbors.

The outbreak among the Sioux which occurred in December last is as to
its causes and incidents fully reported upon by the War Department and
the Department of the Interior. That these Indians had some just
complaints, especially in the matter of the reduction of the
appropriation for rations and in the delays attending the enactment of
laws to enable the Department to perform the engagements entered into
with them, is probably true; but the Sioux tribes are naturally warlike
and turbulent, and their warriors were excited by their medicine men and
chiefs, who preached the coming of an Indian messiah who was to give
them power to destroy their enemies. In view of the alarm that prevailed
among the white settlers near the reservation and of the fatal
consequences that would have resulted from an Indian incursion, I placed
at the disposal of General Miles, commanding the Division of the
Missouri, all such forces as were thought by him to be required. He is
entitled to the credit of having given thorough protection to the
settlers and of bringing the hostiles into subjection with the least
possible loss of life.

The appropriation of $2,991,450 for the Choctaws and Chickasaws
contained in the general Indian appropriation bill of March 3, 1891, has
not been expended, for the reason that I have not yet approved a release
(to the Government) of the Indian claim to the lands mentioned. This
matter will be made the subject of a special message, placing before
Congress all the facts which have come to my knowledge.

The relation of the Five Civilized Tribes now occupying the Indian
Territory to the United States is not, I believe, that best calculated
to promote the highest advancement of these Indians. That there should
be within our borders five independent states having no relations,
except those growing out of treaties, with the Government of the United
States, no representation in the National Legislature, its people not
citizens, is a startling anomaly.

It seems to me to be inevitable that there shall be before long some
organic changes in the relation of these people to the United States.
What form these changes should take I do not think it desirable now to
suggest, even if they were well defined in my own mind. They should
certainly involve the acceptance of citizenship by the Indians and a
representation in Congress. These Indians should have opportunity to
present their claims and grievances upon the floor rather than, as now,
in the lobby. If a commission could be appointed to visit these tribes
to confer with them in a friendly spirit upon this whole subject, even
if no agreement were presently reached the feeling of the tribes upon
this question would be developed, and discussion would prepare the way
for changes which must come sooner or later.

The good work of reducing the larger Indian reservations by allotments
in severalty to the Indians and the cession of the remaining lands to
the United States for disposition under the homestead law has been
prosecuted during the year with energy and success. In September last I
was enabled to open to settlement in the Territory of Oklahoma 900,000
acres of land, all of which was taken up by settlers in a single day.
The rush for these lands was accompanied by a great deal of excitement,
but was happily free from incidents of violence.

It was a source of great regret that I was not able to open at the same
time the surplus lands of the Cheyenne and Arapahoe Reservation,
amounting to about 3,000,000 acres, by reason of the insufficiency of
the appropriation for making the allotments. Deserving and impatient
settlers are waiting to occupy these lands, and I urgently recommend
that a special deficiency appropriation be promptly made of the small
amount needed, so that the allotments may be completed and the surplus
lands opened in time to permit the settlers to get upon their homesteads
in the early spring.

During the past summer the Cherokee Commission have completed
arrangements with the Wichita, Kickapoo, and Tonkawa tribes whereby, if
the agreements are ratified by Congress, over 800,000 additional acres
will be opened to settlement in Oklahoma.

The negotiations for the release by the Cherokees of their claim to the
Cherokee Strip have made no substantial progress so far as the
Department is officially advised, but it is still hoped that the cession
of this large and valuable tract may be secured. The price which the
commission was authorized to offer--$1.25 per acre--is, in my judgment,
when all the circumstances as to title and the character of the lands
are considered, a fair and adequate one, and should have been accepted
by the Indians.

Since March 4, 1889, about 23,000,000 acres have been separated from
Indian reservations and added to the public domain for the use of those
who desired to secure free homes under our beneficent laws. It is
difficult to estimate the increase of wealth which will result from the
conversion of these waste lands into farms, but it is more difficult to
estimate the betterment which will result to the families that have
found renewed hope and courage in the ownership of a home and the
assurance of a comfortable subsistence under free and healthful
conditions. It is also gratifying to be able to feel, as we may, that
this work has proceeded upon lines of justice toward the Indian, and
that he may now, if he will, secure to himself the good influences of a
settled habitation, the fruits of industry, and the security of
citizenship.

Early in this Administration a special effort was begun to bring up the
work of the General Land Office. By faithful work the arrearages have
been rapidly reduced. At the end of the last fiscal year only 84,172
final agricultural entries remained undisposed of, and the Commissioner
reports that with the present force the work can be fully brought up by
the end of the next fiscal year.

Your attention is called to the difficulty presented by the Secretary of
the Interior as to the administration of the law of March 3, 1891,
establishing a Court of Private Land Claims. The small holdings intended
to be protected by the law are estimated to be more than 15,000 in
number. The claimants are a most deserving class and their titles are
supported by the strongest equities. The difficulty grows out of the
fact that the lands have largely been surveyed according to our methods,
while the holdings, many of which have been in the same family for
generations, are laid out in narrow strips a few rods wide upon a stream
and running back to the hills for pasturage and timber.. Provision
should be made for numbering these tracts as lots and for patenting them
by such numbers and without reference to section lines.

The administration of the Pension Bureau has been characterized during
the year by great diligence. The total number of pensioners upon the
roll on the 30th day of June, 1891, was 676,160. There were allowed
during the fiscal year ending at that time 250,565 cases. Of this number
102,387 were allowed under the law of June 27, 1890. The issuing of
certificates has been proceeding at the rate of about 30,000 per month,
about 75 per cent of these being cases under the new law. The
Commissioner expresses the opinion that he will be able to carefully
adjudicate and allow 350,000 claims during the present fiscal year. The
appropriation for the payment of pensions for the fiscal year 1890-91
was $127,685,793.89 and the amount expended $118,530,649.25, leaving an
unexpended surplus of $9,155,144.64.

The Commissioner is quite confident that there will be no call this year
for a deficiency appropriation, notwithstanding the rapidity with which
the work is being pushed. The mistake which has been made by many in
their exaggerated estimates of the cost of pensions is in not taking
account of the diminished value of first payments under the recent
legislation. These payments under the general law have been for many
years very large, as the pensions when allowed dated from the time of
filing the claim, and most of these claims had been pending for years.
The first payments under the law of June, 1890, are relatively small,
and as the per cent of these cases increases and that of the old cases
diminishes the annual aggregate of first payments is largely reduced.
The Commissioner, under date of November 13, furnishes me with the
statement that during the last four months 113,175 certificates were
issued, 27,893 under the general law and 85,282 under the act of June
27, 1890. The average first payment during these four months was
$131.85, while the average first payment upon cases allowed during the
year ending June 30, 1891, was $239.33, being a reduction in the average
first payments during these four months of $107.48.

The estimate for pension expenditures for the fiscal year ending June
30, 1893, is $144,956,000, which, after a careful examination of the
subject, the Commissioner is of the opinion will be sufficient. While
these disbursements to the disabled soldiers of the great Civil War are
large, they do not realize the exaggerated estimates of those who oppose
this beneficent legislation. The Secretary of the Interior shows with
great fullness the care that is taken to exclude fraudulent claims, and
also the gratifying fact that the persons to whom these pensions are
going are men who rendered not slight but substantial war service.

The report of the Commissioner of Railroads shows that the total debt of
the subsidized railroads to the United States was on December 31, 1890,
$112,512,613.06. A large part of this debt is now fast approaching
maturity, with no adequate provision for its payment. Some policy for
dealing with this debt with a view to its ultimate collection should be
at once adopted. It is very difficult, well-nigh impossible, for so
large a body as the Congress to conduct the necessary negotiations and
investigations. I therefore recommend that provision be made for the
appointment of a commission to agree upon and report a plan for dealing
with this debt.

The work of the Census Bureau is now far in advance and the great bulk
of the enormous labor involved completed. It will be more strictly a
statistical exhibit and less encumbered by essays than its immediate
predecessors. The methods pursued have been fair, careful, and
intelligent, and have secured the approval of the statisticians who have
followed them with a scientific and nonpartisan interest. The
appropriations necessary to the early completion and publication of the
authorized volumes should be given in time to secure against delays,
which increase the cost and at the same time diminish the value of the
work.

The report of the Secretary exhibits with interesting fullness the
condition of the Territories. They have shared with the States the great
increase in farm products, and are bringing yearly large areas into
cultivation by extending their irrigating canals. This work is being
done by individuals or local corporations and without that system which
a full preliminary survey of the water supply and of the irrigable lands
would enable them to adopt. The future of the Territories of New Mexico,
Arizona, and Utah in their material growth and in the increase,
independence, and happiness of their people is very largely dependent
upon wise and timely legislation, either by Congress or their own
legislatures, regulating the distribution of the water supply furnished
by their streams. If this matter is much longer neglected, private
corporations will have unrestricted control of one of the elements of
life and the patentees of the arid lands will be tenants at will of the
water companies.

The United States should part with its ownership of the water sources
and the sites for reservoirs, whether to the States and Territories or
to individuals or corporations, only upon conditions that will insure to
the settlers their proper water supply upon equal and reasonable terms.
In the Territories this whole subject is under the full control of
Congress, and in the States it is practically so as long as the
Government holds the title to the reservoir sites and water sources and
can grant them upon such conditions as it chooses to impose. The
improvident granting of franchises of enormous value without recompense
to the State or municipality from which they proceed and without proper
protection of the public interests is the most noticeable and flagrant
evil of modern legislation. This fault should not be committed in
dealing with a subject that will before many years affect so vitally
thousands of our people.

The legislation of Congress for the repression of polygamy has, after
years of resistance on the part of the Mormons, at last brought them to
the conclusion that resistance is unprofitable and unavailing. The power
of Congress over this subject should not be surrendered until we have
satisfactory evidence that the people of the State to be created would
exercise the exclusive power of the State over this subject in the same
way. The question is not whether these people now obey the laws of
Congress against polygamy, but rather would they make, enforce, and
maintain such laws themselves if absolutely free to regulate the
subject? We can not afford to experiment with this subject, for when a
State is once constituted the act is final and any mistake
irretrievable. No compact in the enabling act could, in my opinion, be
binding or effective.

I recommend that provision be made for the organization of a simple form
of town government in Alaska, with power to regulate such matters as are
usually in the States under municipal control. These local civil
organizations will give better protection in some matters than the
present skeleton Territorial organization. Proper restrictions as to the
power to levy taxes and to create debt should be imposed.

If the establishment of the Department of Agriculture was regarded by
anyone as a mere concession to the unenlightened demand of a worthy
class of people, that impression has been most effectually removed by
the great results already attained. Its home influence has been very
great in disseminating agricultural and horticultural information, in
stimulating and directing a further diversification of crops, in
detecting and eradicating diseases of domestic animals, and, more than
all, in the close and informal contact which it has established and
maintains with the farmers and stock raisers of the whole country. Every
request for information has had prompt attention and every suggestion
merited consideration. The scientific corps of the Department is of a
high order and is pushing its investigations with method and enthusiasm.

The inspection by this Department of cattle and pork products intended
for shipment abroad has been the basis of the success which has attended
our efforts to secure the removal of the restrictions maintained by the
European Governments.

For ten years protests and petitions upon this subject from the packers
and stock raisers of the United States have been directed against these
restrictions, which so seriously limited our markets and curtailed the
profits of the farm. It is a source of general congratulation that
success has at last been attained, for the effects of an enlarged
foreign market for these meats will be felt not only by the farmer, but
in our public finances and in every branch of trade. It is particularly
fortunate that the increased demand for food products resulting from the
removal of the restrictions upon our meats and from the reciprocal trade
arrangements to which I have referred should have come at a time when
the agricultural surplus is so large. Without the help thus derived
lower prices would have prevailed. The Secretary of Agriculture
estimates that the restrictions upon the importation of our pork
products into Europe lost us a market for $20,000,000 worth of these
products annually.

The grain crop of this year was the largest in our history--50 per cent
greater than that of last year--and yet the new markets that have been
opened and the larger demand resulting from short crops in Europe have
sustained prices to such an extent that the enormous surplus of meats
and breadstuffs will be marketed at good prices, bringing relief and
prosperity to an industry that was much depressed. The value of the
grain crop of the United States is estimated by the Secretary to be this
year $500,000,000 more than last; of meats $150,000,000 more, and of all
products of the farm $700,000,000 more. It is not inappropriate, I
think, here to suggest that our satisfaction in the contemplation of
this marvelous addition to the national wealth is unclouded by any
suspicion of the currency by which it is measured and in which the
farmer is paid for the products of his fields.

The report of the Civil Service Commission should receive the careful
attention of the opponents as well as the friends of this reform. The
Commission invites a personal inspection by Senators and Representatives
of its records and methods, and every fair critic will feel that such an
examination should precede a judgment of condemnation either of the
system or its administration. It is not claimed that either is perfect,
but I believe that the law is being executed with impartiality and that
the system is incomparably better and fairer than that of appointments
upon favor. I have during the year extended the classified service to
include superintendents, teachers, matrons, and physicians in the Indian
service. This branch of the service is largely related to educational
and philanthropic work and will obviously be the better for the change.

The heads of the several Executive Departments have been directed to
establish at once an efficiency record as the basis of a comparative
rating of the clerks within the classified service, with a view to
placing promotions therein upon the basis of merit. I am confident that
such a record, fairly kept and open to the inspection of those
interested, will powerfully stimulate the work of the Departments and
will be accepted by all as placing the troublesome matter of promotions
upon a just basis.

I recommend that the appropriation for the Civil Service Commission be
made adequate to the increased work of the next fiscal year.

I have twice before urgently called the attention of Congress to the
necessity of legislation for the protection of the lives of railroad
employees, but nothing has yet been done. During the year ending June
30, 1890, 369 brakemen were killed and 7,841 maimed while engaged in
coupling cars. The total number of railroad employees killed during the
year was 2,451 and the number injured 22,390. This is a cruel and
largely needless sacrifice. The Government is spending nearly $1,000,000
annually to save the lives of shipwrecked seamen; every steam vessel is
rigidly inspected and required to adopt the most approved safety
appliances. All this is good. But how shall we excuse the lack of
interest and effort in behalf of this army of brave young men who in our
land commerce are being sacrificed every year by the continued use of
antiquated and dangerous appliances? A law requiring of every railroad
engaged in interstate commerce the equipment each year of a given per
cent of its freight cars with automatic couplers and air brakes would
compel an agreement between the roads as to the kind of brakes and
couplers to be used, and would very soon and very greatly reduce the
present fearful death rate among railroad employees.

The method of appointment by the States of electors of President and
Vice-President has recently attracted renewed interest by reason of a
departure by the State of Michigan from the method which had become
uniform in all the States. Prior to 1832 various methods had been used
by the different States, and even by the same State. In some the choice
was made by the legislature; in others electors were chosen by
districts, but more generally by the voters of the whole State upon a
general ticket. The movement toward the adoption of the last-named
method had an early beginning and went steadily forward among the States
until in 1832 there remained but a single State (South Carolina) that
had not adopted it. That State until the Civil War continued to choose
its electors by a vote of the legislature, but after the war changed its
method and conformed to the practice of the other States. For nearly
sixty years all the States save one have appointed their electors by a
popular vote upon a general ticket, and for nearly thirty years this
method was universal.

After a full test of other methods, without important division or
dissent in any State and without any purpose of party advantage, as we
must believe, but solely upon the considerations that uniformity was
desirable and that a general election in territorial divisions not
subject to change was most consistent with the popular character of our
institutions, best preserved the equality of the voters, and perfectly
removed the choice of President from the baneful influence of the
"gerrymander," the practice of all the States was brought into harmony.
That this concurrence should now be broken is, I think, an unfortunate
and even a threatening episode, and one that may well suggest whether
the States that still give their approval to the old and prevailing
method ought not to secure by a constitutional amendment a practice
which has had the approval of all. The recent Michigan legislation
provides for choosing what are popularly known as the Congressional
electors for President by Congressional districts and the two Senatorial
electors by districts created for that purpose. This legislation was, of
course, accompanied by a new Congressional apportionment, and the two
statutes bring the electoral vote of the State under the influence of
the "gerrymander."

These gerrymanders for Congressional purposes are in most cases
buttressed by a gerrymander of the legislative districts, thus making it
impossible for a majority of the legal voters of the State to correct
the apportionment and equalize the Congressional districts. A minority
rule is established that only a political convulsion can overthrow. I
have recently been advised that in one county of a certain State three
districts for the election of members of the legislature are constituted
as follows: One has 65,000 population, one 15,000, and one 10,000, while
in another county detached, noncontiguous sections have been united to
make a legislative district. These methods have already found effective
application to the choice of Senators and Representatives in Congress,
and now an evil start has been made in the direction of applying them to
the choice by the States of electors of President and Vice-President. If
this is accomplished, we shall then have the three great departments of
the Government in the grasp of the "gerrymander," the legislative and
executive directly and the judiciary indirectly through the power of
appointment.

An election implies a body of electors having prescribed qualifications,
each one of whom has an equal value and influence in determining the
result. So when the Constitution provides that "each State shall
appoint" (elect), "in such manner as the legislature thereof may direct,
a number of electors," etc., an unrestricted power was not given to the
legislatures in the selection of the methods to be used. "A republican
form of government" is guaranteed by the Constitution to each State, and
the power given by the same instrument to the legislatures of the States
to prescribe methods for the choice by the State of electors must be
exercised under that limitation. The essential features of such a
government are the right of the people to choose their own officers and
the nearest practicable equality of value in the suffrages given in
determining that choice.

It will not be claimed that the power given to the legislature would
support a law providing that the persons receiving the smallest vote
should be the electors or a law that all the electors should be chosen
by the voters of a single Congressional district. The State is to
choose, and finder the pretense of regulating methods the legislature
can neither vest the right of choice elsewhere nor adopt methods not
conformable to republican institutions. It is not my purpose here to
discuss the question whether a choice by the legislature or by the
voters of equal single districts is a choice by the State, but only to
recommend such regulation of this matter by constitutional amendment as
will secure uniformity and prevent that disgraceful partisan jugglery to
which such a liberty of choice, if it exists, offers a temptation.

Nothing just now is more important than to provide every guaranty for
the absolutely fair and free choice by an equal suffrage within the
respective States of all the officers of the National Government,
whether that suffrage is applied directly, as in the choice of members
of the House of Representatives, or indirectly, as in the choice of
Senators and electors of President. Respect for public officers and
obedience to law will not cease to be the characteristics of our people
until our elections cease to declare the will of majorities fairly
ascertained without fraud, suppression, or gerrymander. If I were called
upon to declare wherein our chief national danger lies, I should say
without hesitation in the overthrow of majority control by the
suppression or perversion of the popular suffrage. That there is a real
danger here all must agree; but the energies of those who see it have
been chiefly expended in trying to fix responsibility upon the opposite
party rather than in efforts to make such practices impossible by either
party.

Is it not possible now to adjourn that interminable and inconclusive
debate while we take by consent one step in the direction of reform by
eliminating the gerrymander, which has been denounced by all parties as
an influence in the selection of electors of President and members of
Congress? All the States have, acting freely and separately, determined
that the choice of electors by a general ticket is the wisest and safest
method, and it would seem there could be no objection to a
constitutional amendment making that method permanent. If a legislature
chosen in one year upon purely local questions should, pending a
Presidential contest, meet, rescind the law for a choice upon a general
ticket, and provide for the choice of electors by the legislature, and
this trick should determine the result, it is not too much to say that
the public peace might be seriously and widely endangered.

I have alluded to the "gerrymander" as affecting the method of selecting
electors of President by Congressional districts, but the primary intent
and effect of this form of political robbery have relation to the
selection of members of the House of Representatives. The power of
Congress is ample to deal with this threatening and intolerable abuse.
The unfailing test of sincerity in election reform will be found in a
willingness to confer as to remedies and to put into force such measures
as will most effectually preserve the right of the people to free and
equal representation.

An attempt was made in the last Congress to bring to bear the
constitutional powers of the General Government for the correction of
fraud against the suffrage. It is important to know whether the
opposition to such measures is really rested in particular features
supposed to be objectionable or includes any proposition to give to the
election laws of the United States adequacy to the correction of grave
and acknowledged evils. I must yet entertain the hope that it is
possible to secure a calm, patriotic consideration of such
constitutional or statutory changes as may be necessary to secure the
choice of the officers of the Government to the people by fair
apportionments and free elections.

I believe it would be possible to constitute a commission, nonpartisan
in its membership and composed of patriotic, wise, and impartial men, to
whom a consideration of the question of the evils connected with our
election system and methods might be committed with a good prospect of
securing unanimity in some plan for removing or mitigating those evils.
The Constitution would permit the selection of the commission to be
vested in the Supreme Court if that method would give the best guaranty
of impartiality. This commission should be charged with the duty of
inquiring into the whole subject of the law of elections as related to
the choice of officers of the National Government, with a view to
securing to every elector a free and unmolested exercise of the suffrage
and as near an approach to an equality of value in each ballot cast as
is attainable.

While the policies of the General Government upon the tariff, upon the
restoration of our merchant marine, upon river and harbor improvements,
and other such matters of grave and general concern are liable to be
turned this way or that by the results of Congressional elections and
administrative policies, sometimes involving issues that tend to peace
or war, to be turned this way or that by the results of a Presidential
election, there is a rightful interest in all the States and in every
Congressional district that will not be deceived or silenced by the
audacious pretense that the question of the right of any body of legal
voters in any State or in any Congressional district to give their
suffrages freely upon these general questions is a matter only of local
concern or control. The demand that the limitations of suffrage shall be
found in the law, and only there, is a just demand, and no just man
should resent or resist it. My appeal is and must continue to be for a
consultation that shall "proceed with candor, calmness, and patience
upon the lines of justice and humanity, not of prejudice and cruelty."

To the consideration of these very grave questions I invite not only the
attention of Congress, but that of all patriotic citizens. We must not
entertain the delusion that our people have ceased to regard a free
ballot and equal representation as the price of their allegiance to laws
and to civil magistrates.

I have been greatly rejoiced to notice many evidences of the increased
unification of our people and of a revived national spirit. The vista
that now opens to us is wider and more glorious than ever before.
Gratification and amazement struggle for supremacy as we contemplate the
population, wealth, and moral strength of our country. A trust momentous
in its influence upon our people and upon the world is for a brief time
committed to us, and we must not be faithless to its first
condition--the defense of the free and equal influence of the people in
the choice of public officers and in the control of public affairs.

BENJ. HARRISON

***

State of the Union Address
Benjamin Harrison
December 6, 1892

To the Senate and House of Representatives:

In submitting my annual message to Congress I have great satisfaction in
being able to say that the general conditions affecting the commercial
and industrial interests of the United States are in the highest degree
favorable. A comparison of the existing conditions with those of the
most favored period in the history of the country will, I believe, show
that so high a degree of prosperity and so general a diffusion of the
comforts of life were never before enjoyed by our people.

The total wealth of the country in 1860 was $16,159,616,068. In 1890 it
amounted to $62,610,000,000, an increase of 287 per cent.

The total mileage of railways in the United States in 1860 was 30,626.
In 1890 it was 167,741, an increase of 448 per cent; and it is estimated
that there will be about 4,000 miles of track added by the close of the
year 1892.

The official returns of the Eleventh Census and those of the Tenth
Census for seventy-five leading cities furnish the basis for the
following comparisons:

In 1880 the capital invested in manufacturing was $1,232,839,670.

In 1890 the capital invested in manufacturing was $2,900,735,884.

In 1880 the number of employees was 1,301,388.

In 1890 the number of employees was 2,251,134.

In 1880 the wages earned were $501,965,778.

In 1890 the wages earned were $1,221,170,454.

In 1880 the value of the product was $2,711,579,899.

In 1890 the value of the product was $4,860,286,837.

I am informed by the Superintendent of the Census that the omission of
certain industries in 1880 which were included in 1890 accounts in part
for the remarkable increase thus shown, but after making full allowance
for differences of method and deducting the returns for all industries
not included in the census of 1880 there remain in the reports from
these seventy-five cities an increase in the capital employed of
$1,522,745,604, in the value of the product of $2,024,236,166, in wages
earned of $677,943,929, and in the number of wage earners employed of
856,029. The wage earnings not only show an increased aggregate, but an
increase per capita from $386 in 1880 to $547 in 1890, or 41.71 per
cent.

The new industrial plants established since October 6, 1890, and up to
October 22, 1892, as partially reported in the American Economist,
number 345, and the extension of existing plants 108; the new capital
invested amounts to $40,449,050, and the number of additional employees
to 37,285.

The Textile World for July, 1892, states that during the first six
months of the present calendar year 135 new factories were built, of
which 40 are cotton mills, 48 knitting mills, 26 woolen mills, 15 silk
mills, 4 plush mills, and 2 linen mills. Of the 40 cotton mills 21 have
been built in the Southern States. Mr. A. B. Shepperson, of the New York
Cotton Exchange, estimates the number of working spindles in the United
States on September 1, 1892, at 15,200,000, an increase of 660,000 over
the year 1891. The consumption of cotton by American mills in 1891 was
2,396,000 bales, and in 1892 2,584,000 bales, an increase of 188,000
bales. From the year 1869 to 1892, inclusive, there has been an increase
in the consumption of cotton in Europe of 92 per cent, while during the
same period the increased consumption in the United States has been
about 150 per cent.

The report of Ira Ayer, special agent of the Treasury Department, shows
that at the date of September 30, 1892, there were 32 companies
manufacturing tin and terne plate in the United States and 14 companies
building new works for such manufacture. The estimated investment in
buildings and plants at the close of the fiscal year June 30, 1893, if
existing conditions were to be continued, was $5,000,000 and the
estimated rate of production 200,000,000 pounds per annum. The actual
production for the quarter ending September 30, 1892, was 10,952,725
pounds.

The report of Labor Commissioner Peck, of New York, shows that during
the year 1891, in about 6,000 manufacturing establishments in that State
embraced within the special inquiry made by him, and representing 67
different industries, there was a net increase over the year 1890 of
$30,315,130.68 in the value of the product and of $6,377,925.09 in the
amount of wages paid. The report of the commissioner of labor for the
State of Massachusetts shows that 3,745 industries in that State paid
$129,416,248 in wages during the year 1891, against $126,030,303 in
1890, an increase of $3,335,945, and that there was an increase of
$9,932,490 in the amount of capital and of 7,346 in the number of
persons employed in the same period.

During the last six months of the year 1891 and the first six months of
1892 the total production of pig iron was 9,710,819 tons, as against
9,202,703 tons in the year 1890, which was the largest annual production
ever attained. For the same twelve months of 1891-92 the production of
Bessemer ingots was 3,878,581 tons, an increase of 189,710 gross tons
over the previously unprecedented yearly production of 3,688,871 gross
tons in 1890. The production of Bessemer steel rails for the first six
months of 1892 was 772,436 gross tons, as against 702,080 gross tons
during the last six months of the year 1891.

The total value of our foreign trade (exports and imports of
merchandise) during the last fiscal year was $1,857,680,610, an increase
of $128,283,604 over the previous fiscal year. The average annual value
of our imports and exports of merchandise for the ten fiscal years prior
to 1891 was $1,457,322,019. It will be observed that our foreign trade
for 1892 exceeded this annual average value by $400,358,591, an increase
of 27.47 per cent. The significance and value of this increase are shown
by the fact that the excess in the trade of 1892 over 1891 was wholly in
the value of exports, for there was a decrease in the value of imports
of $17,513,754.

The value of our exports during the fiscal year 1892 reached the highest
figure in the history of the Government, amounting to $1,030,278,148,
exceeding by $145,797,338 the exports of 1891 and exceeding the value of
the imports by $202,875,686. A comparison of the value of our exports
for 1892 with the annual average for the ten years prior to 1891 shows
an excess of $265,142,651, or of 34.65 per cent. The value of our
imports of merchandise for 1892, which was $829,402,462, also exceeded
the annual average value of the ten years prior to 1891 by $135,215,940.
During the fiscal year 1892 the value of imports free of duty amounted
to $457,999,658, the largest aggregate in the history of our commerce.
The value of the imports of merchandise entered free of duty in 1892 was
55.35 per cent of the total value of imports, as compared with 43.35 per
cent in 1891 and 33.66 per cent in 1890.

In our coastwise trade a most encouraging development is in progress,
there having been in the last four years an increase of 16 per cent. In
internal commerce the statistics show that no such period of prosperity
has ever before existed. The freight carried in the coastwise trade of
the Great Lakes in 1890 aggregated 28,295,959 tons. On the Mississippi,
Missouri, and Ohio rivers and tributaries in the same year the traffic
aggregated 29,405,046 tons, and the total vessel tonnage passing through
the Detroit River during that year was 21,684,000 tons. The vessel
tonnage entered and cleared in the foreign trade of London during 1890
amounted to 13,480,767 tons, and of Liverpool 10,941,800 tons, a total
for these two great shipping ports of 24,422,568 tons, only slightly in
excess of the vessel tonnage passing through the Detroit River. And it
should be said that the season for the Detroit River was but 228 days,
while of course in London and Liverpool the season was for the entire
year. The vessel tonnage passing through the St. Marys Canal for the
fiscal year 1892 amounted to 9,828,874 tons, and the freight tonnage of
the Detroit River is estimated for that year at 25,000,000 tons, against
23,209,619 tons in 1891. The aggregate traffic on our railroads for the
year 1891 amounted to 704,398,609 tons of freight, compared with
691,344,437 tons in 1890, an increase of 13,054,172 tons.

Another indication of the general prosperity of the country is found in
the fact that the number of depositors in savings banks increased from
693,870 in 1860 to 4,258,893 in 1890, an increase of 513 per cent, and
the amount of deposits from $149,277,504 in 1860 to $1,524,844,506 in
1890, an increase of 921 per cent. In 1891 the amount of deposits in
savings banks was $1,623,079,749. It is estimated that 90 per cent of
these deposits represent the savings of wage earners. The bank
clearances for nine months ending September 30, 1891, amounted to
$41,049,390,08. For the same months in 1892 they amounted to
$45,189,601,947, an excess for the nine months of $4,140,211,139.

There never has been a time in our history when work was so abundant or
when wages were as high, whether measured by the currency in which they
are paid or by their power to supply the necessaries and comforts of
life. It is true that the market prices of cotton and wheat have been
low. It is one of the unfavorable incidents of agriculture that the
farmer can not produce upon orders. He must sow and reap in ignorance of
the aggregate production of the year, and is peculiarly subject to the
depreciation which follows overproduction. But while the fact I have
stated is true as to the crops mentioned, the general average of prices
has been such as to give to agriculture a fair participation in the
general prosperity. The value of our total farm products has increased
from $1,363,646,866 in 1860 to $4,500,000,000 in 1891, as estimated by
statisticians, an increase of 230 per cent. The number of hogs January
1, 1891, was 50,625,106 and their value $210,193,925; on January 1,
1892, the number was 52,398,019 and the value $241,031,415. On January
1, 1891, the number of cattle was 36,875,648 and the value $544,127,908;
on January 1 ,1892, the number was 37,651,239 and the value
$570,749,155.

If any are discontented with their state here, if any believe that wages
or prices, the returns for honest toil, are inadequate, they should not
fail to remember that there is no other country in the world where the
conditions that seem to them hard would not be accepted as highly
prosperous. The English agriculturist would be glad to exchange the
returns of his labor for those of the American farmer and the Manchester
workmen their wages for those of their fellows at Fall River.

I believe that the protective system, which has now for something more
than thirty years continuously prevailed in our legislation, has been a
mighty instrument for the development of our national wealth and a most
powerful agency in protecting the homes of our workingmen from the
invasion of want. I have felt a most solicitous interest to preserve to
our working people rates of wages that would not only give daily bread
but supply a comfortable margin for those home attractions and family
comforts and enjoyments without which life is neither hopeful nor sweet.
They are American citizens--a part of the great people for whom our
Constitution and Government were framed and instituted--and it can not
be a perversion of that Constitution to so legislate as to preserve in
their homes the comfort, independence, loyalty, and sense of interest in
the Government which are essential to good citizenship in peace, and
which will bring this stalwart throng, as in 1861, to the defense of the
flag when it is assailed.

It is not my purpose to renew here the argument in favor of a protective
tariff. The result of the recent election must be accepted as having
introduced a new policy. We must assume that the present tariff,
constructed upon the lines of protection, is to be repealed and that
there is to be substituted for it a tariff law constructed solely with
reference to revenue; that no duty is to be higher because the increase
will keep open an American mill or keep up the wages of an American
workman, but that in every case such a rate of duty is to be imposed as
will bring to the Treasury of the United States the largest returns of
revenue. The contention has not been between schedules, but between
principles, and it would be offensive to suggest that the prevailing
party will not carry into legislation the principles advocated by it and
the pledges given to the people. The tariff bills passed by the House of
Representatives at the last session were, as I suppose, even in the
opinion of their promoters, inadequate, and justified only by the fact
that the Senate and House of Representatives were not in accord and that
a general revision could not therefore be undertaken.

I recommend that the whole subject of tariff revision be left to the
incoming Congress. It is matter of regret that this work must be delayed
for at least three months, for the threat of great tariff changes
introduces so much uncertainty that an amount, not easily estimated, of
business inaction and of diminished production will necessarily result.
It is possible also that this uncertainty may result in decreased
revenues from customs duties, for our merchants will make cautious
orders for foreign goods in view of the prospect of tariff reductions
and the uncertainty as to when they will take effect. Those who have
advocated a protective tariff can well afford to have their disastrous
forecasts of a change of policy disappointed. If a system of customs
duties can be framed that will set the idle wheels and looms of Europe
in motion and crowd our warehouses with foreign-made goods and at the
same time keep our own mills busy; that will give us an increased
participation in the "markets of the world" of greater value than the
home market we surrender; that will give increased work to foreign
workmen upon products to be consumed by our people without diminishing
the amount of work to be done here; that will enable the American
manufacturer to pay to his workmen from 50 to 100 per cent more in wages
than is paid in the foreign mill, and yet to compete in our market and
in foreign markets with the foreign producer; that will further reduce
the cost of articles of wear and food without reducing the wages of
those who produce them; that can be celebrated, after its effects have
been realized, as its expectation has been in European as well as in
American cities, the authors and promoters of it will be entitled to the
highest praise. We have had in our history several experiences of the
contrasted effects of a revenue and of a protective tariff, but this
generation has not felt them, and the experience of one generation is
not highly instructive to the next. The friends of the protective system
with undiminished confidence in the principles they have advocated will
await the results of the new experiment.

The strained and too often disturbed relations existing between the
employees and the employers in our great manufacturing establishments
have not been favorable to a calm consideration by the wage earner of
the effect upon wages of the protective system. The facts that his wages
were the highest paid in like callings in the world and that a
maintenance of this rate of wages in the absence of protective duties
upon the product of his labor was impossible were obscured by the
passion evoked by these contests. He may now be able to review the
question in the light of his personal experience under the operation of
a tariff for revenue only. If that experience shall demonstrate that
present rates of wages are thereby maintained or increased, either
absolutely or in their purchasing power, and that the aggregate volume
of work to be done in this country is increased or even maintained, so
that there are more or as many days' work in a year, at as good or
better wages, for the American workmen as has been the case under the
protective system, everyone will rejoice. A general process of wage
reduction can not be contemplated by any patriotic citizen without the
gravest apprehension. It may be, indeed I believe is, possible for the
American manufacturer to compete successfully with his foreign rival in
many branches of production without the defense of protective duties if
the pay rolls are equalized; but the conflict that stands between the
producer and that result and the distress of our working people when it
is attained are not pleasant to contemplate. The Society of the
Unemployed, now holding its frequent and threatening parades in the
streets of foreign cities, should not be allowed to acquire an American
domicile.

The reports of the heads of the several Executive Departments, which are
herewith submitted, have very naturally included a resume of the whole
work of the Administration with the transactions of the last fiscal
year. The attention not only of Congress but of the country is again
invited to the methods of administration which have been pursued and to
the results which have been attained. Public revenues amounting to
$1,414,079,292.28 have been collected and disbursed without loss from
misappropriation, without a single defalcation of such importance as to
attract the public attention, and at a diminished per cent of cost for
collection. The public business has been transacted not only with
fidelity, but progressively and with a view to giving to the people in
the fullest possible degree the benefits of a service established and
maintained for their protection and comfort.

Our relations with other nations are now undisturbed by any serious
controversy. The complicated and threatening differences with Germany
and England relating to Samoan affairs, with England in relation to the
seal fisheries in the Bering Sea, and with Chile growing out of the
Baltimore affair have been adjusted.

There have been negotiated and concluded, under section 3 of the tariff
law, commercial agreements relating to reciprocal trade with the
following countries: Brazil, Dominican Republic, Spain for Cuba and
Puerto Rico, Guatemala, Salvador, the German Empire, Great Britain for
certain West Indian colonies and British Guiana, Nicaragua, Honduras,
and Austria-Hungary.

Of these, those with Guatemala, Salvador, the German Empire, Great
Britain, Nicaragua, Honduras, and Austria-Hungary have been concluded
since my last annual message. Under these trade arrangements a free or
favored admission has been secured in every case for an important list
of American products. Especial care has been taken to secure markets for
farm products, in order to relieve that great underlying industry of the
depression which the lack of an adequate foreign market for our surplus
often brings. An opening has also been made for manufactured products
that will undoubtedly, if this policy is maintained, greatly augment our
export trade. The full benefits of these arrangements can not be
realized instantly. New lines of trade are to be opened. The commercial
traveler must survey the field. The manufacturer must adapt his goods to
the new markets and facilities for exchange must be established. This
work has been well begun, our merchants and manufacturers having entered
the new fields with courage and enterprise. In the case of food
products, and especially with Cuba, the trade did not need to wait, and
the immediate results have been most gratifying. If this policy and
these trade arrangements can be continued in force and aided by the
establishment of American steamship lines, I do not doubt that we shall
within a short period secure fully one-third of the total trade of the
countries of Central and South America, which now amounts to about
$600,000,000 annually. In 1885 we had only 8 per cent of this trade.

The following statistics show the increase in our trade with the
countries with which we have reciprocal trade agreements from the date
when such agreements went into effect up to September 30, 1892, the
increase being in some almost wholly and in others in an important
degree the result of these agreements:

The domestic exports to Germany and Austria-Hungary have increased in
value from $47,673,756 to $57,993,064, an increase of $10,319,308, or
21.63 per cent. With American countries the value of our exports has
increased from $44,160,285 to $54,613,598, an increase of $10,453,313,
or 23.67 per cent. The total increase in the value of exports to all the
countries with which we have reciprocity agreements has been
$20,772,621. This increase is chiefly in wheat, flour, meat, and dairy
products and in manufactures of iron and steel and lumber. There has
been a large increase in the value of imports from all these countries
since the commercial agreements went into effect, amounting to
$74,294,525, but it has been entirely in imports from the American
countries, consisting mostly of sugar, coffee, india rubber, and crude
drugs. The alarmed attention of our European competitors for the South
American market has been attracted to this new American policy and to
our acquisition and their loss of South American trade.

A treaty providing for the arbitration of the dispute between Great
Britain and the United States as to the killing of seals in the Bering
Sea was concluded on the 29th of February last. This treaty was
accompanied by an agreement prohibiting pelagic sealing pending the
arbitration, and a vigorous effort was made during this season to drive
out all poaching sealers from the Bering Sea. Six naval vessels, three
revenue cutters, and one vessel from the Fish Commission, all under the
command of Commander Evans, of the Navy, were sent into the sea, which
was systematically patrolled. Some seizures were made, and it is
believed that the catch in the Bering Sea by poachers amounted to less
than 500 seals. It is true, however, that in the North Pacific, while
the seal herds were on their way to the passes between the Aleutian
Islands, a very large number, probably 35,000, were taken. The existing
statutes of the United States do not restrain our citizens from taking
seals in the Pacific Ocean, and perhaps should not unless the
prohibition can be extended to the citizens of other nations. I
recommend that power be given to the President by proclamation to
prohibit the taking of seals in the North Pacific by American vessels in
case, either as the result of the findings of the Tribunal of
Arbitration or otherwise, the restraints can be applied to the vessels
of all countries. The case of the United States for the Tribunal of
Arbitration has been prepared with great care and industry by the Hon.
John W. Foster, and the counsel who represent this Government express
confidence that a result substantially establishing our claims and
preserving this great industry for the benefit of all nations will be
attained.

During the past year a suggestion was received through the British
minister that the Canadian government would like to confer as to the
possibility of enlarging upon terms of mutual advantage the commercial
exchanges of Canada and of the United States, and a conference was held
at Washington, with Mr. Blaine acting for this Government and the
British minister at this capital and three members of the Dominion
cabinet acting as commissioners on the part of Great Britain. The
conference developed the fact that the Canadian government was only
prepared to offer to the United States in exchange for the concessions
asked the admission of natural products. The statement was frankly made
that favored rates could not be given to the United States as against
the mother country. This admission, which was foreseen, necessarily
terminated the conference upon this question. The benefits of an
exchange of natural products would be almost wholly with the people of
Canada. Some other topics of interest were considered in the conference,
and have resulted in the making of a convention for examining the
Alaskan boundary and the waters of Passamaquoddy Bay adjacent to
Eastport, Me., and in the initiation of an arrangement for the
protection of fish life in the coterminous and neighboring waters of our
northern border.

The controversy as to tolls upon the Welland Canal, which was presented
to Congress at the last session by special message, having failed of
adjustment, I felt constrained to exercise the authority conferred by
the act of July 26, 1892, and to proclaim a suspension of the free use
of St. Marys Falls Canal to cargoes in transit to ports in Canada. The
Secretary of the Treasury established such tolls as were thought to be
equivalent to the exactions unjustly levied upon our commerce in the
Canadian canals.

If, as we must suppose, the political relations of Canada and the
disposition of the Canadian government are to remain unchanged, a
somewhat radical revision of our trade relations should, I think, be
made. Our relations must continue to be intimate, and they should be
friendly. I regret to say, however, that in many of the controversies,
notably those as to the fisheries on the Atlantic, the sealing interests
on the Pacific, and the canal tolls, our negotiations with Great Britain
have continuously been thwarted or retarded by unreasonable and
unfriendly objections and protests from Canada in the matter of the
canal tolls our treaty rights were flagrantly disregarded. It is hardly
too much to say that the Canadian Pacific and other railway lines which
parallel our northern boundary are sustained by commerce having either
its origin or terminus, or both, in the United States. Canadian
railroads compete with those of the United States for our traffic, and
without the restraints of our interstate-commerce act. Their cars pass
almost without detention into and out of our territory.

The Canadian Pacific Railway brought into the United States from China
and Japan via British Columbia during the year ended June 30, 1892,
23,239,689 pounds of freight, and it carried from the United States, to
be shipped to China and Japan via British Columbia, 24,068,346 pounds of
freight. There were also shipped from the United States over this road
from Eastern ports of the United States to our Pacific ports during the
same year 13,912,073 pounds of freight, and there were received over
this road at the United States Eastern ports from ports on the Pacific
Coast 13,293,315 pounds of freight. Mr. Joseph Nimmo, Jr., former chief
of the Bureau of Statistics, when before the Senate Select Committee on
Relations with Canada, April 26, 1890, said that "the value of goods
thus transported between different points in the United States across
Canadian territory probably amounts to $100,000,000 a year."

There is no disposition on the part of the people or Government of the
United States to interfere in the smallest degree with the political
relations of Canada. That question is wholly with her own people. It is
time for us, however, to consider whether, if the present state of
things and trend of things is to continue, our interchanges upon lines
of land transportation should not be put upon a different basis and our
entire independence of Canadian canals and of the St. Lawrence as an
outlet to the sea secured by the construction of an American canal
around the Falls of Niagara and the opening of ship communication
between the Great Lakes and one of our own seaports. We should not
hesitate to avail ourselves of our great natural trade advantages. We
should withdraw the support which is given to the railroads and
steamship lines of Canada by a traffic that properly belongs to us and
no longer furnish the earnings which lighten the otherwise crushing
weight of the enormous public subsidies that have been given to them.
The subject of the power of the Treasury to deal with this matter
without further legislation has been under consideration, but
circumstances have postponed a conclusion. It is probable that a
consideration of the propriety of a modification or abrogation of the
article of the treaty of Washington relating to the transit of goods in
bond is involved in any complete solution of the question.

Congress at the last session was kept advised of the progress of the
serious and for a time threatening difference between the United States
and Chile. It gives me now great gratification to report that the
Chilean Government in a most friendly and honorable spirit has tendered
and paid as an indemnity to the families of the sailors of the Baltimore
who were killed and to those who were injured in the outbreak in the
city of Valparaiso the sum of $75,000. This has been accepted not only
as an indemnity for a wrong done, but as a most gratifying evidence that
the Government of Chile rightly appreciates the disposition of this
Government to act in a spirit of the most absolute fairness and
friendliness in our intercourse with that brave people. A further and
conclusive evidence of the mutual respect and confidence now existing is
furnished by the fact that a convention submitting to arbitration the
mutual claims of the citizens of the respective Governments has been
agreed upon. Some of these claims have been pending for many years and
have been the occasion of much unsatisfactory diplomatic correspondence.

I have endeavored in every way to assure our sister Republics of Central
and South America that the United States Government and its people have
only the most friendly disposition toward them all. We do not covet
their territory. We have no disposition to be oppressive or exacting in
our dealings with any of them, even the weakest. Our interests and our
hopes for them all lie in the direction of stable governments by their
people and of the largest development of their great commercial
resources. The mutual benefits of enlarged commercial exchanges and of a
more familiar and friendly intercourse between our peoples we do desire,
and in this have sought their friendly cooperation.

I have believed, however, while holding these sentiments in the greatest
sincerity, that we must insist upon a just responsibility for any
injuries inflicted upon our official representatives or upon our
citizens. This insistence, kindly and justly but firmly made, will, I
believe, promote peace and mutual respect.

Our relations with Hawaii have been such as to attract an increased
interest, and must continue to do so. I deem it of great importance that
the projected submarine cable, a survey for which has been made, should
be promoted. Both for naval and commercial uses we should have quick
communication with Honolulu. We should before this have availed
ourselves of the concession made many years ago to this Government for a
harbor and naval station at Pearl River. Many evidences of the
friendliness of the Hawaiian Government have been given in the past, and
it is gratifying to believe that the advantage and necessity of a
continuance of very close relations is appreciated.

The friendly act of this Government in expressing to the Government of
Italy its reprobation and abhorrence of the lynching of Italian subjects
in New Orleans by the payment of 125,000 francs, or $24,330.90, was
accepted by the King of Italy with every manifestation of gracious
appreciation, and the incident has been highly promotive of mutual
respect and good will.

In consequence of the action of the French Government in proclaiming a
protectorate over certain tribal districts of the west coast of Africa
eastward of the San Pedro River, which has long been regarded as the
southeastern boundary of Liberia, I have felt constrained to make
protest against this encroachment upon the territory of a Republic which
was rounded by citizens of the United States and toward which this
country has for many years held the intimate relation of a friendly
counselor.

The recent disturbances of the public peace by lawless foreign marauders
on the Mexican frontier have afforded this Government an opportunity to
testify its good will for Mexico and its earnest purpose to fulfill the
obligations of international friendship by pursuing and dispersing the
evil doers. The work of relocating the boundary of the treaty of
Guadalupe Hidalgo westward from El Paso is progressing favorably.

Our intercourse with Spain continues on a friendly footing. I regret,
however, not to be able to report as yet the adjustment of the claims of
the American missionaries arising from the disorders at Ponape, in the
Caroline Islands, but I anticipate a satisfactory adjustment in view of
renewed and urgent representations to the Government at Madrid.

The treatment of the religious and educational establishments of
American citizens in Turkey has of late called for a more than usual
share of attention. A tendency to curtail the toleration which has so
beneficially prevailed is discernible and has called forth the earnest
remonstrance of this Government. Harassing regulations in regard to
schools and churches have been attempted in certain localities, but not
without due protest and the assertion of the inherent and conventional
rights of our countrymen. Violations of domicile and search of the
persons and effects of citizens of the United States by apparently
irresponsible officials in the Asiatic vilayets have from time to time
been reported. An aggravated instance of injury to the property of an
American missionary at Bourdour, in the province of Konia, called forth
an urgent claim for reparation, which I am pleased to say was promptly
heeded by the Government of the Porte. Interference with the trading
ventures of our citizens in Asia Minor is also reported, and the lack of
consular representation in that region is a serious drawback to instant
and effective protection. I can not believe that these incidents
represent a settled policy, and shall not cease to urge the adoption of
proper remedies.

International copyright has been extended to Italy by proclamation in
conformity with the act of March 3, 1891, upon assurance being given
that Italian law permits to citizens of the United States the benefit of
copyright on substantially the same basis as to subjects of Italy. By a
special convention proclaimed January 15, 1892, reciprocal provisions of
copyright have been applied between the United States and Germany.
Negotiations are in progress with other countries to the same end.

I repeat with great earnestness the recommendation which I have made in
several previous messages that prompt and adequate support be given to
the American company engaged in the construction of the Nicaragua ship
canal. It is impossible to overstate the value from every standpoint of
this great enterprise, and I hope that there may be time, even in this
Congress, to give to it an impetus that will insure the early completion
of the canal and secure to the United States its proper relation to it
when completed.

The Congress has been already advised that the invitations of this
Government for the assembling of an international monetary conference to
consider the question of an enlarged use of silver were accepted by the
nations to which they were addressed. The conference assembled at
Brussels on the 22d of November, and has entered upon the consideration
of this great question. I have not doubted, and have taken occasion to
express that belief as well in the invitations issued for this
conference as in my public messages, that the free coinage of silver
upon an agreed international ratio would greatly promote the interests
of our people and equally those of other nations. It is too early to
predict what results may be accomplished by the conference. If any
temporary check or delay intervenes, I believe that very soon commercial
conditions will compel the now reluctant governments to unite with us in
this movement to secure the enlargement of the volume of coined money
needed for the transaction of the business of the world.

The report of the Secretary of the Treasury will attract especial
interest in view of the many misleading statements that have been made
as to the state of the public revenues. Three preliminary facts should
not only be stated but emphasized before looking into details: First,
that the public debt has been reduced since March 4, 1889, $259,074,200,
and the annual interest charge $11,684,469; second, that there have been
paid out for pensions during this Administration up to November 1, 1892,
$432,564,178.70, an excess of $114,466,386.09 over the sum expended
during the period from March 1, 1885, to March 1, 1889; and, third, that
under the existing tariff up to December 1 about $93,000,000 of revenue
which would have been collected upon imported sugars if the duty had
been maintained has gone into the pockets of the people, and not into
the public Treasury, as before. If there are any who still think that
the surplus should have been kept out of circulation by hoarding it in
the Treasury, or deposited in favored banks without interest while the
Government continued to pay to these very banks interest upon the bonds
deposited as security for the deposits, or who think that the extended
pension legislation was a public robbery, or that the duties upon sugar
should have been maintained, I am content to leave the argument where it
now rests while we wait to see whether these criticisms will take the
form of legislation.

The revenues for the fiscal year ending June 30, 1892, from all sources
were $425,868,260.22, and the expenditures for all purposes were
$415,953,806.56, leaving a balance of $9,914,453.66. There were paid
during the year upon the public debt $40,570,467.98. The surplus in the
Treasury and the bank redemption fund passed by the act of July 14,
1890, to the general fund furnished in large part the cash available and
used for the payments made upon the public debt. Compared with the year
1891, our receipts from customs duties fell off $42,069,241.08, while
our receipts from internal revenue increased $8,284,823.13, leaving the
net loss of revenue from these principal sources $33,784,417.95. The net
loss of revenue from all sources was $32,675,972.81.

The revenues, estimated and actual, for the fiscal year ending June 30,
1893, are placed by the Secretary at $463,336,350.44, and the
expenditures at $461,336,350.44, showing a surplus of receipts over
expenditures of $2,000,000. The cash balance in the Treasury at the end
of the fiscal year it is estimated will be $20,992,377.03. So far as
these figures are based upon estimates of receipts and expenditures for
the remaining months of the current fiscal year, there are not only the
usual elements of uncertainty, but some added elements. New revenue
legislation, or even the expectation of it, may seriously reduce the
public revenues during the period of uncertainty and during the process
of business adjustment to the new conditions when they become known. But
the Secretary has very wisely refrained from guessing as to the effect
of possible changes in our revenue laws, since the scope of those
changes and the time of their taking effect can not in any degree be
forecast or foretold by him. His estimates must be based upon existing
laws and upon a continuance of existing business conditions, except so
far as these conditions may be affected by causes other than new
legislation.

The estimated receipts for the fiscal year ending June 30, 1894, are
$490,121,365.38, and the estimated appropriations $457,261,335.33,
leaving an estimated surplus of receipts over expenditures of
$32,860,030.05. This does not include any payment to the sinking fund.
In the recommendation of the Secretary that the sinking-fund law be
repealed I concur. The redemption of bonds since the passage of the law
to June 30, 1892, has already exceeded the requirements by the sum of
$990,510,681.49. The retirement of bonds in the future before maturity
should be a matter of convenience, not of compulsion. We should not
collect revenue for that purpose, but only use any casual surplus. To
the balance of $32,860,030.05 of receipts over expenditures for the year
1894 should be added the estimated surplus at the beginning of the year,
$20,992,377.03, and from this aggregate there must be deducted, as
stated by the Secretary, about $44,000,000 of estimated unexpended
appropriations.

The public confidence in the purpose and ability of the Government to
maintain the parity of all of our money issues, whether coin or paper,
must remain unshaken. The demand for gold in Europe and the consequent
calls upon us are in a considerable degree the result of the efforts of
some of the European Governments to increase their gold reserves, and
these efforts should be met by appropriate legislation on our part. The
conditions that have created this drain of the Treasury gold are in an
important degree political, and not commercial. In view of the fact that
a general revision of our revenue laws in the near future seems to be
probable, it would be better that any changes should be a part of that
revision rather than of a temporary nature.

During the last fiscal year the Secretary purchased under the act of
July 14, 1890, 54,355,748 ounces of silver and issued in payment
therefor $51,106,608 in notes. The total purchases since the passage of
the act have been 120,479,981 ounces and the aggregate of notes issued
$116,783,590. The average price paid for silver during the year was 94
cents per ounce, the highest price being $1.02 3/4 July 1, 1891, and the
lowest 83 cents March 21, 1892. In view of the fact that the monetary
conference is now sitting and that no conclusion has yet been reached, I
withhold any recommendation as to legislation upon this subject.

The report of the Secretary of War brings again to the attention of
Congress some important suggestions as to the reorganization of the
infantry and artillery arms of the service, which his predecessors have
before urgently presented. Our Army is small, but its organization
should all the more be put upon the most approved modern basis. The
conditions upon what we have called the "frontier" have heretofore
required the maintenance of many small posts, but now the policy of
concentration is obviously the right one. The new posts should have the
proper strategic relations to the only "frontiers" we now have--those of
the seacoast and of our northern and part of our southern boundary. I do
not think that any question of advantage to localities or to States
should determine the location of the new posts. The reorganization and
enlargement of the Bureau of Military Information which the Secretary
has effected is a work the usefulness of which will become every year
more apparent. The work of building heavy guns and the construction of
coast defenses has been well begun and should be carried on without
check.

The report of the Attorney-General is by law submitted directly to
Congress, but I can not refrain from saying that he has conducted the
increasing work of the Department of Justice with great professional
skill. He has in several directions secured from the courts decisions
giving increased protection to the officers of the United States and
bringing some classes of crime that escaped local cognizance and
punishment into the tribunals of the United States, where they could be
tried with impartiality.

The numerous applications for Executive clemency presented in behalf of
persons convicted in United States courts and given penitentiary
sentences have called my attention to a fact referred to by the
Attorney-General in his report, namely, that a time allowance for good
behavior for such prisoners is prescribed by the Federal statutes only
where the State in which the penitentiary is located has made no such
provision. Prisoners are given the benefit of the provisions of the
State law regulating the penitentiary to which they may be sent. These
are various, some perhaps too liberal and some perhaps too illiberal.
The result is that a sentence for five years means one thing if the
prisoner is sent to one State for confinement and quite a different
thing if he is sent to another. I recommend that a uniform credit for
good behavior be prescribed by Congress.

I have before expressed my concurrence in the recommendation of the
Attorney-General that degrees of murder should be recognized in the
Federal statutes, as they are, I believe, in all the States. These
grades are rounded on correct distinctions in crime. The recognition of
them would enable the courts to exercise some discretion in apportioning
punishment and would greatly relieve the Executive of what is coming to
be a very heavy burden--the examination of these cases on application
for commutation.

The aggregate of claims pending against the Government in the Court of
Claims is enormous. Claims to the amount of nearly $400,000,000 for the
taking of or injury to the property of persons claiming to be loyal
during the war are now before that court for examination. When to these
are added the Indian depredation claims and the French spoliation
claims, an aggregate is reached that is indeed startling. In the defense
of all these cases the Government is at great disadvantage. The
claimants have preserved their evidence, whereas the agents of the
Government are sent into the field to rummage for what they can find.
This difficulty is peculiarly great where the fact to be established is
the disloyalty of the claimant during the war. If this great threat
against our revenues is to have no other check, certainly Congress
should supply the Department of Justice with appropriations sufficiently
liberal to secure the best legal talent in the defense of these claims
and to pursue its vague search for evidence effectively.

The report of the Postmaster-General shows a most gratifying increase
and a most efficient and progressive management of the great business of
that Department. The remarkable increase in revenues, in the number of
post-offices, and in the miles of mail carriage furnishes further
evidence of the high state of prosperity which our people are enjoying.
New offices mean new hamlets and towns, new routes mean the extension of
our border settlements, and increased revenues mean an active commerce.
The Postmaster-General reviews the whole period of his administration of
the office and brings some of his statistics down to the month of
November last. The postal revenues have increased during the last year
nearly $5,000,000. The deficit for the year ending June 30, 1892, is
$848,341 less than the deficiency of the preceding year. The deficiency
of the present fiscal year it is estimated will be reduced to
$1,552,423, which will not only be extinguished during the next fiscal
year but a surplus of nearly $1,000,000 should then be shown. In these
calculations the payments to be made under the contracts for ocean mail
service have not been included. There have been added 1,590 new mail
routes during the year, with a mileage of 8,563 miles, and the total
number of new miles of mail trips added during the year is nearly
17,000,000. The number of miles of mail journeys added during the last
four years is about 76,000,000, this addition being 21,000,000 miles
more than were in operation in the whole country in 1861.

The number of post-offices has been increased by 2,790 during the year,
and during the past four years, and up to October 29 last, the total
increase in the number of offices has been nearly 9,000. The number of
free-delivery offices has been nearly doubled in the last four years,
and the number of money-order offices more than doubled within that
time.

For the three years ending June 30, 1892, the postal revenue amounted to
$197,744,359, which was an increase of $52,263,150 over the revenue for
the three years ending June 30, 1888, the increase during the last three
years being more than three and a half times as great as the increase
during the three years ending June 30, 1888. No such increase as that
shown for these three years has ever previously appeared in the revenues
of the Department. The Postmaster-General has extended to the
post-offices in the larger cities the merit system of promotion
introduced by my direction into the Departments here, and it has
resulted there, as in the Departments, in a larger volume of work and
that better done.

Ever since our merchant marine was driven from the sea by the rebel
cruisers during the War of the Rebellion the United States has been
paying an enormous annual tribute to foreign countries in the shape of
freight and passage moneys. Our grain and meats have been taken at our
own docks and our large imports there laid down by foreign shipmasters.
An increasing torrent of American travel to Europe has contributed a
vast sum annually to the dividends of foreign shipowners. The balance of
trade shown by the books of our custom-houses has been very largely
reduced and in many years altogether extinguished by this constant
drain. In the year 1892 only 12.3 per cent of our imports were brought
in American vessels. These great foreign steamships maintained by our
traffic are many of them under contracts with their respective
Governments by which in time of war they will become a part of their
armed naval establishments. Profiting by our commerce in peace, they
will become the most formidable destroyers of our commerce in time of
war. I have felt, and have before expressed the feeling, that this
condition of things was both intolerable and disgraceful. A wholesome
change of policy, and one having in it much promise, as it seems to me,
was begun by the law of March 3, 1891. Under this law contracts have
been made by the Postmaster-General for eleven mail routes. The
expenditure involved by these contracts for the next fiscal year
approximates $954,123.33. As one of the results already reached sixteen
American steamships, of an aggregate tonnage of 57,400 tons, costing
$7,400,000, have been built or contracted to be built in American
shipyards.

The estimated tonnage of all steamships required under existing
contracts is 165,802, and when the full service required by these
contracts is established there will be forty-one mail steamers under the
American flag, with the probability of further necessary additions in
the Brazilian and Argentine service. The contracts recently let for
transatlantic service will result in the construction of five ships of
10,000 tons each, costing $9,000,000 to $10,000,000, and will add, with
the City of New York and City of Paris, to which the Treasury Department
was authorized by legislation at the last session to give American
registry, seven of the swiftest vessels upon the sea to our naval
reserve. The contracts made with the lines sailing to Central and South
American ports have increased the frequency and shortened the time of
the trips, added new ports of call, and sustained some lines that
otherwise would almost certainly have been withdrawn. The service to
Buenos Ayres is the first to the Argentine Republic under the American
flag. The service to Southampton, Boulogne, and Antwerp is also new, and
is to be begun with the steamships City of New York and City of Paris in
February next.

I earnestly urge the continuance of the policy inaugurated by this
legislation, and that the appropriations required to meet the
obligations of the Government under the contracts may be made promptly,
so that the lines that have entered into these engagements may not be
embarrassed. We have had, by reason of connections with the
transcontinental railway lines constructed through our own territory,
some advantages in the ocean trade of the Pacific that we did not
possess on the Atlantic. The construction of the Canadian Pacific
Railway and the establishment under large subventions from Canada and
England of fast steamship service from Vancouver with Japan and China
seriously threaten our shipping interests in the Pacific. This line of
English steamers receives, as is stated by the Commissioner of
Navigation, a direct subsidy of $400,000 annually, or $30,767 per trip
for thirteen voyages, in addition to some further aid from the Admiralty
in connection with contracts under which the vessels may be used for
naval purposes. The competing American Pacific mail line under the act
of March 3, 1891, receives only $6,389 per round trip.

Efforts have been making within the last year, as I am informed, to
establish under similar conditions a line between Vancouver and some
Australian port, with a view of seizing there a trade in which we have
had a large interest. The Commissioner of Navigation states that a very
large per cent of our imports from Asia are now brought to us by English
steamships and their connecting railways in Canada. With a view of
promoting this trade, especially in tea, Canada has imposed a
discriminating duty of 10 per cent upon tea and coffee brought into the
Dominion from the United States. If this unequal contest between
American lines without subsidy, or with diminished subsidies, and the
English Canadian line to which I have referred is to continue, I think
we should at least see that the facilities for customs entry and
transportation across our territory are not such as to make the Canadian
route a favored one, and that the discrimination as to duties to which I
have referred is met by a like discrimination as to the importation of
these articles from Canada.

No subject, I think, more nearly touches the pride, the power, and the
prosperity of our country than this of the development of our merchant
marine upon the sea. If we could enter into conference with other
competitors and all would agree to withhold government aid, we could
perhaps take our chances with the rest; but our great competitors have
established and maintained their lines by government subsidies until
they now have practically excluded us from participation. In my opinion
no choice is left to us but to pursue, moderately at least, the same
lines.

The report of the Secretary of the Navy exhibits great progress in the
construction of our new Navy. When the present Secretary entered upon
his duties, only 3 modern steel vessels were in commission. The vessels
since put in commission and to be put in commission during the winter
will make a total of 19 during his administration of the Department.
During the current year 10 war vessels and 3 navy tugs have been
launched, and during the four years 25 vessels will have been launched.
Two other large ships and a torpedo boat are under contract and the work
upon them well advanced, and the 4 monitors are awaiting only the
arrival of their armor, which has been unexpectedly delayed, or they
would have been before this in commission.

Contracts have been let during this Administration, under the
appropriations for the increase of the Navy, including new vessels and
their appurtenances, to the amount of $35,000,000, and there has been
expended during the same period for labor at navy-yards upon similar
work $8,000,000 without the smallest scandal or charge of fraud or
partiality. The enthusiasm and interest of our naval officers, both of
the staff and line, have been greatly kindled. They have responded
magnificently to the confidence of Congress and have demonstrated to the
world an unexcelled capacity in construction, in ordnance, and in
everything involved in the building, equipping, and sailing of great war
ships.

At the beginning of Secretary Tracy's administration several difficult
problems remained to be grappled with and solved before the efficiency
in action of our ships could be secured. It is believed that as the
result of new processes in the construction of armor plate our later
ships will be clothed with defensive plates of higher resisting power
than are found on any war vessels afloat. We were without torpedoes.
Tests have been made to ascertain the relative efficiency of different
constructions, a torpedo has been adopted, and the work of construction
is now being carried on successfully. We were without armor-piercing
shells and without a shop instructed and equipped for the construction
of them. We are now making what is believed to be a projectile superior
to any before in use. A smokeless powder has been developed and a
slow-burning powder for guns of large caliber. A high explosive capable
of use in shells fired from service guns has been found, and the
manufacture of gun cotton has been developed so that the question of
supply is no longer in doubt.

The development of a naval militia, which has been organized in eight
States and brought into cordial and cooperative relations with the Navy,
is another important achievement. There are now enlisted in these
organizations 1,800 men, and they are likely to be greatly extended. I
recommend such legislation and appropriations as will encourage and
develop this movement. The recommendations of the Secretary will, I do
not doubt, receive the friendly consideration of Congress, for he has
enjoyed, as he has deserved, the confidence of all those interested in
the development of our Navy, without any division upon partisan lines. I
earnestly express the hope that a work which has made such noble
progress may not now be stayed. The wholesome influence for peace and
the increased sense of security which our citizens domiciled in other
lands feel when these magnificent ships under the American flag appear
is already most gratefully apparent. The ships from our Navy which will
appear in the great naval parade next April in the harbor of New York
will be a convincing demonstration to the world that the United States
is again a naval power.

The work of the Interior Department, always very burdensome, has been
larger than ever before during the administration of Secretary Noble.
The disability-pension law, the taking of the Eleventh Census, the
opening of vast areas of Indian lands to settlement, the organization of
Oklahoma, and the negotiations for the cession of Indian lands furnish
some of the particulars of the increased work, and the results achieved
testify to the ability, fidelity, and industry of the head of the
Department and his efficient assistants.

Several important agreements for the cession of Indian lands negotiated
by the commission appointed under the act of March 2, 1889, are awaiting
the action of Congress. Perhaps the most important of these is that for
the cession of the Cherokee Strip. This region has been the source of
great vexation to the executive department and of great friction and
unrest between the settlers who desire to occupy it and the Indians who
assert title. The agreement which has been made by the commission is
perhaps the most satisfactory that could have been reached. It will be
noticed that it is conditioned upon its ratification by Congress before
March 4, 1893. The Secretary of the Interior, who has given the subject
very careful thought, recommends the ratification of the agreement, and
I am inclined to follow his recommendation. Certain it is that some
action by which this controversy shall be brought to an end and these
lands opened to settlement is urgent.

The form of government provided by Congress on May 17, 1884, for Alaska
was in its frame and purpose temporary. The increase of population and
the development of some important mining and commercial interests make
it imperative that the law should be revised and better provision made
for the arrest and punishment of criminals.

The report of the Secretary shows a very gratifying state of facts as to
the condition of the General Land Office. The work of issuing
agricultural patents, which seemed to be hopelessly in arrear when the
present Secretary undertook the duties of his office, has been so
expedited that the bureau is now upon current business. The relief thus
afforded to honest and worthy settlers upon the public lands by giving
to them an assured title to their entries has been of incalculable
benefit in developing the new States and the Territories.

The Court of Private Land Claims, established by Congress for the
promotion of this policy of speedily settling contested land titles, is
making satisfactory progress in its work, and when the work is completed
a great impetus will be given to the development of those regions where
unsettled claims under Mexican grants have so long exercised their
repressive influence. When to these results are added the enormous
cessions of Indian lands which have been opened to settlement,
aggregating during this Administration nearly 26,000,000 acres, and the
agreements negotiated and now pending in Congress for ratification by
which about 10,000,000 additional acres will be opened to settlement, it
will be seen how much has been accomplished.

The work in the Indian Bureau in the execution of the policy of recent
legislation has been largely directed to two chief purposes: First, the
allotment of lands in severalty to the Indians and the cession to the
United States of the surplus lands, and, secondly, to the work of
educating the Indian for his own protection in his closer contact with
the white man and for the intelligent exercise of his new citizenship.
Allotments have been made and patents issued to 5,900 Indians under the
present Secretary and Commissioner, and 7,600 additional allotments have
been made for which patents are now in process of preparation. The
school attendance of Indian children has been increased during that time
over 13 per cent, the enrollment for 1892 being nearly 20,000. A uniform
system of school text-books and of study has been adopted and the work
in these national schools brought as near as may be to the basis of the
free common schools of the States. These schools can be transferred and
merged into the common-school systems of the States when the Indian has
fully assumed his new relation to the organized civil community in which
he resides and the new States are able to assume the burden. I have
several times been called upon to remove Indian agents appointed by me,
and have done so promptly upon every sustained complaint of unfitness or
misconduct. I believe, however, that the Indian service at the agencies
has been improved and is now administered on the whole with a good
degree of efficiency. If any legislation is possible by which the
selection of Indian agents can be wholly removed from all partisan
suggestions or considerations, I am sure it would be a great relief to
the Executive and a great benefit to the service. The appropriation for
the subsistence of the Cheyenne and Arapahoe Indians made at the last
session of Congress was inadequate. This smaller appropriation was
estimated for by the Commissioner upon the theory that the large fund
belonging to the tribe in the public Treasury could be and ought to be
used for their support. In view, however, of the pending depredation
claims against this fund and other considerations, the Secretary of the
Interior on the 12th of April last submitted a supplemental estimate for
$50,000. This appropriation was not made, as it should have been, and
the oversight ought to be remedied at the earliest possible date.

In a special message to this Congress at the last session, I stated the
reasons why I had not approved the deed for the release to the United
States by the Choctaws and Chickasaws of the lands formerly embraced in
the Cheyenne and Arapahoe Reservation and remaining after allotments to
that tribe. A resolution of the Senate expressing the opinion of that
body that notwithstanding the facts stated in my special message the
deed should be approved and the money, $2,991,450, paid over was
presented to me May 10, 1892. My special message was intended to call
the attention of Congress to the subject, and in view of the fact that
it is conceded that the appropriation proceeded upon a false basis as to
the amount of lands to be paid for and is by $50,000 in excess of the
amount they are entitled to (even if their claim to the land is given
full recognition at the rate agreed upon), I have not felt willing to
approve the deed, and shall not do so, at least until both Houses of
Congress have acted upon the subject. It has been informally proposed by
the claimants to release this sum of $50,000, but I have no power to
demand or accept such a release, and such an agreement would be without
consideration and void.

I desire further to call the attention of Congress to the fact that the
recent agreement concluded with the Kiowas and Comanches relates to
lands which were a part of the "leased district," and to which the claim
of the Choctaws and Chickasaws is precisely that recognized by Congress
in the legislation I have referred to. The surplus lands to which this
claim would attach in the Kiowa and Comanche Reservation is 2,500,000
acres, and at the same rate the Government will be called upon to pay to
the Choctaws and Chickasaws for these lands $3,125,000. This sum will be
further augmented, especially if the title of the Indians to the tract
now Greet County, Tex., is established. The duty devolved upon me in
this connection was simply to pass upon the form of the deed; but as in
my opinion the facts mentioned in my special message were not adequately
brought to the attention of Congress in connection with the legislation,
I have felt that I would not be justified in acting without some new
expression of the legislative will.

The report of the Commissioner of Pensions, to which extended notice is
given by the Secretary of the Interior in his report, will attract great
attention. Judged by the aggregate amount of work done, the last year
has been the greatest in the history of the office. I believe that the
organization of the office is efficient and that the work has been done
with fidelity. The passage of what is known as the disability bill has,
as was foreseen, very largely increased the annual disbursements to the
disabled veterans of the Civil War. The estimate for this fiscal year
was $144,956,000, and that amount was appropriated. A deficiency
amounting to $10,508,621 must be provided for at this session. The
estimate for pensions for the fiscal year ending June 30, 1894, is
$165,000,000. The Commissioner of Pensions believes that if the present
legislation and methods are maintained and further additions to the
pension laws are not made the maximum expenditure for pensions will be
reached June 30, 1894, and will be at the highest point $188,000,000 per
annum.

I adhere to the views expressed in previous messages that the care of
the disabled soldiers of the War of the Rebellion is a matter of
national concern and duty. Perhaps no emotion cools sooner than that of
gratitude, but I can not believe that this process has yet reached a
point with our people that would sustain the policy of remitting the
care of these disabled veterans to the inadequate agencies provided by
local laws. The parade on the 20th of September last upon the streets of
this capital of 60,000 of the surviving Union veterans of the War of the
Rebellion was a most touching and thrilling episode, and the rich and
gracious welcome extended to them by the District of Columbia and the
applause that greeted their progress from tens of thousands of people
from all the States did much to revive the glorious recollections of the
Grand Review when these men and many thousand others now in their graves
were welcomed with grateful joy as victors in a struggle in which the
national unity, honor, and wealth were all at issue.

In my last annual message I called attention to the fact that some
legislative action was necessary in order to protect the interests of
the Government in its relations with the Union Pacific Railway. The
Commissioner of Railroads has submitted a very full report, giving exact
information as to the debt, the liens upon the company's property, and
its resources. We must deal with the question as we find it and take
that course which will under existing conditions best secure the
interests of the United States. I recommended in my last annual message
that a commission be appointed to deal with this question, and I renew
that recommendation and suggest that the commission be given full power.

The report of the Secretary of Agriculture contains not only a most
interesting statement of the progressive and valuable work done under
the administration of Secretary Rusk, but many suggestions for the
enlarged usefulness of this important Department. In the successful
efforts to break down the restrictions to the free introduction of our
meat products in the countries of Europe the Secretary has been untiring
from the first, stimulating and aiding all other Government officers at
home and abroad whose official duties enabled them to participate in the
work. The total trade in hog products with Europe in May, 1892, amounted
to 82,000,000 pounds, against 46,900,000 in the same month of 1891; in
June, 1892, the export aggregated 85,700,000 pounds, against 46,500,000
pounds in the same month of the previous year; in July there was an
increase of 41 per cent and in August of 55 per cent over the
corresponding months of 1891. Over 40,000,000 pounds of inspected pork
have been exported since the law was put into operation, and a
comparison of the four months of May, June, July, and August, 1892, with
the same months of 1891 shows an increase in the number of pounds of our
export of pork products of 62 per cent and an increase in value of 66
1/2 per cent. The exports of dressed beef increased from 137,900,000
pounds in 1889 to 220,500,000 pounds in 1892 or about 60 per cent.
During the past year there have been exported 394,607 head of live
cattle, as against 205,786 exported in 1889. This increased exportation
has been largely promoted by the inspection authorized by law and the
faithful efforts of the Secretary and his efficient subordinates to make
that inspection thorough and to carefully exclude from all cargoes
diseased or suspected cattle. The requirement of the English regulations
that live cattle arriving from the United States must be slaughtered at
the docks had its origin in the claim that pleuro-pneumonia existed
among American cattle and that the existence of the disease could only
certainly be determined by a post mortem inspection.

The Department of Agriculture has labored with great energy and
faithfulness to extirpate this disease, and on the 26th day of September
last a public announcement was made by the Secretary that the disease no
longer existed anywhere within the United States. He is entirely
satisfied after the most searching inquiry that this statement was
justified, and that by a continuance of the inspection and quarantine
now required of cattle brought into this country the disease can be
prevented from again getting any foothold. The value to the cattle
industry of the United States of this achievement can hardly be
estimated. We can not, perhaps, at once insist that this evidence shall
be accepted as satisfactory by other countries; but if the present
exemption from the disease is maintained and the inspection of our
cattle arriving at foreign ports, in which our own veterinarians
participate, confirms it, we may justly expect that the requirement that
our cattle shall be slaughtered at the docks will be revoked, as the
sanitary restrictions upon our pork products have been. If our cattle
can be taken alive to the interior, the trade will be enormously
increased.

Agricultural products constituted 78.1 per cent of our unprecedented
exports for the fiscal year which closed June 30, 1892, the total
exports being $1,030,278,030 and the value of the agricultural products
$793,717,676, which exceeds by more than $150,000,000 the shipment of
agricultural products in any previous year.

An interesting and a promising work for the benefit of the American
farmer has been begun through agents of the Agricultural Department in
Europe, and consists in efforts to introduce the various products of
Indian corn as articles of human food. The high price of rye offered a
favorable opportunity for the experiment in Germany of combining corn
meal with rye to produce a cheaper bread. A fair degree of success has
been attained, and some mills for grinding corn for food have been
introduced. The Secretary is of the opinion that this new use of the
products of corn has already stimulated exportations, and that if
diligently prosecuted large and important markets can presently be
opened for this great American product.

The suggestions of the Secretary for an enlargement of the work of the
Department are commended to your favorable consideration. It may, I
think, be said without challenge that in no corresponding period has so
much been done as during the last four years for the benefit of American
agriculture.

The subject of quarantine regulations, inspection, and control was
brought suddenly to my attention by the arrival at our ports in August
last of vessels infected with cholera. Quarantine regulations should be
uniform at all our ports. Under the Constitution they are plainly within
the exclusive Federal jurisdiction when and so far as Congress shall
legislate. In my opinion the whole subject should be taken into national
control and adequate power given to the Executive to protect our people
against plague invasions. On the 1st of September last I approved
regulations establishing a twenty-day quarantine for all vessels
bringing immigrants from foreign ports. This order will be continued in
force. Some loss and suffering have resulted to passengers, but a due
care for the homes of our people justifies in such cases the utmost
precaution. There is danger that with the coming of spring cholera will
again appear, and a liberal appropriation should be made at this session
to enable our quarantine and port officers to exclude the deadly plague.

But the most careful and stringent quarantine regulations may not be
sufficient absolutely to exclude the disease. The progress of medical
and sanitary science has been such, however, that if approved
precautions are taken at once to put all of our cities and towns in the
best sanitary condition, and provision is made for isolating any
sporadic cases and for a thorough disinfection, an epidemic can, I am
sure, be avoided. This work appertains to the local authorities, and the
responsibility and the penalty will be appalling if it is neglected or
unduly delayed.

We are peculiarly subject in our great ports to the spread of infectious
diseases by reason of the fact that unrestricted immigration brings to
us out of European cities, in the overcrowded steerages of great
steamships, a large number of persons whose surroundings make them the
easy victims of the plague. This consideration, as well as those
affecting the political, moral, and industrial interests of our country,
leads me to renew the suggestion that admission to our country and to
the high privileges of its citizenship should be more restricted and
more careful. We have, I think, a right and owe a duty to our own
people, and especially to our working people, not only to keep out the
vicious, the ignorant, the civil disturber, the pauper, and the contract
laborer, but to check the too great flow of immigration now coming by
further limitations.

The report of the World's Columbian Exposition has not yet been
submitted. That of the board of management of the Government exhibit has
been received and is herewith transmitted. The work of construction and
of preparation for the opening of the exposition in May next has
progressed most satisfactorily and upon a scale of liberality and
magnificence that will worthily sustain the honor of the United States.

The District of Columbia is left by a decision of the supreme court of
the District without any law regulating the liquor traffic. An old
statute of the legislature of the District relating to the licensing of
various vocations has hitherto been treated by the Commissioners as
giving them power to grant or refuse licenses to sell intoxicating
liquors and as subjecting those who sold without licenses to penalties;
but in May last the supreme court of the District held against this view
of the powers of the Commissioners. It is of urgent importance,
therefore, that Congress should supply, either by direct enactment or by
conferring discretionary powers upon the Commissioners, proper
limitations and restraints upon the liquor traffic in the District. The
District has suffered in its reputation by many crimes of violence, a
large per cent of them resulting from drunkenness and the liquor
traffic. The capital of the nation should be freed from this reproach by
the enactment of stringent restrictions and limitations upon the
traffic.

In renewing the recommendation which I have made in three preceding
annual messages that Congress should legislate for the protection of
railroad employees against the dangers incident to the old and
inadequate methods of braking and coupling which are still in use upon
freight trains, I do so with the hope that this Congress may take action
upon the subject. Statistics furnished by the Interstate Commerce
Commission show that during the year ending June 30, 1891, there were
forty-seven different styles of car couplers reported to be in use, and
that during the same period there were 2,660 employees killed and 26,140
injured. Nearly 16 per cent of the deaths occurred in the coupling and
uncoupling of cars and over 36 per cent of the injuries had the same
origin.

The Civil Service Commission ask for an increased appropriation for
needed clerical assistance, which I think should be given. I extended
the classified service March 1, 1892, to include physicians,
superintendents, assistant superintendents, school-teachers, and matrons
in the Indian service, and have had under consideration the subject of
some further extensions, but have not as yet fully determined the lines
upon which extensions can most properly and usefully be made.

I have in each of the three annual messages which it has been my duty to
submit to Congress called attention to the evils and dangers connected
with our election methods and practices as they are related to the
choice of officers of the National Government. In my last annual message
I endeavored to invoke serious attention to the evils of unfair
apportionments for Congress. I can not close this message without again
calling attention to these grave and threatening evils. I had hoped that
it was possible to secure a nonpartisan inquiry by means of a commission
into evils the existence of which is known to all, and that out of this
might grow legislation from which all thought of partisan advantage
should be eliminated and only the higher thought appear of maintaining
the freedom and purity of the ballot and the equality of the elector,
without the guaranty of which the Government could never have been
formed and without the continuance of which it can not continue to exist
in peace and prosperity.

It is time that mutual charges of unfairness and fraud between the great
parties should cease and that the sincerity of those who profess a
desire for pure and honest elections should be brought to the test of
their willingness to free our legislation and our election methods from
everything that tends to impair the public confidence in the announced
result. The necessity for an inquiry and for legislation by Congress
upon this subject is emphasized by the fact that the tendency of the
legislation in some States in recent years has in some important
particulars been away from and not toward free and fair elections and
equal apportionments. Is it not time that we should come together upon
the high plane of patriotism while we devise methods that shall secure
the right of every man qualified by law to cast a free ballot and give
to every such ballot an equal value in choosing our public officers and
in directing the policy of the Government?

Lawlessness is not less such, but more, where it usurps the functions of
the peace officer and of the courts. The frequent lynching of colored
people accused of crime is without the excuse, which has sometimes been
urged by mobs for a failure to pursue the appointed methods for the
punishment of crime, that the accused have an undue influence over
courts and juries. Such acts are a reproach to the community where they
occur, and so far as they can be made the subject of Federal
jurisdiction the strongest repressive legislation is demanded. A public
sentiment that will sustain the officers of the law in resisting mobs
and in protecting accused persons in their custody should be promoted by
every possible means. The officer who gives his life in the brave
discharge of this duty is worthy of special honor. No lesson needs to be
so urgently impressed upon our people as this, that no worthy end or
cause can be promoted by lawlessness.

This exhibit of the work of the Executive Departments is submitted to
Congress and to the public in the hope that there will be found in it a
due sense of responsibility and an earnest purpose to maintain the
national honor and to promote the happiness and prosperity of all our
people, and this brief exhibit of the growth and prosperity of the
country will give us a level from which to note the increase or
decadence that new legislative policies may bring to us. There is no
reason why the national influence, power, and prosperity should not
observe the same rates of increase that have characterized the past
thirty years. We carry the great impulse and increase of these years
into the future. There is no reason why in many lines of production we
should not surpass all other nations, as we have already done in some.
There are no near frontiers to our possible development. Retrogression
would be a crime.

BENJ. HARRISON

***

State of the Union Address
by Grover Cleveland
December 4, 1893.


To the Congress of the United States:

The constitutional duty which requires the President from time to time
to give to the Congress information of the state of the Union and
recommend to their consideration such measures as he shall judge
necessary and expedient is fittingly entered upon by commending to the
Congress a careful examination of the detailed statements and
well-supported recommendations contained in the reports of the heads of
Departments, who are chiefly charged with the executive work of the
Government. In an effort to abridge this communication as much as is
consistent with its purpose I shall supplement a brief reference to the
contents of these departmental reports by the mention of such executive
business and incidents as are not embraced therein and by such
recommendations as appear to be at this particular time appropriate.

While our foreign relations have not at all times during the past year
been entirely free from perplexity, no embarrassing situation remains
that will not yield to the spirit of fairness and love of justice which,
joined with consistent firmness, characterize a truly American foreign
policy.

My predecessor having accepted the office of arbitrator of the
long-standing Missions boundary dispute, tendered to the President by the
Argentine Republic and Brazil, it has been my agreeable duty to receive
the special envoys commissioned by those States to lay before me
evidence and arguments in behalf of their respective Governments.

The outbreak of domestic hostilities in the Republic of Brazil found
the United States alert to watch the interests of our citizens in that
country, with which we carry on important commerce. Several vessels of
our new Navy are now and for some time have been stationed at Rio de
Janeiro. The struggle being between the established Government, which
controls the machinery of administration, and with which we maintain
friendly relations, and certain officers of the navy employing the
vessels of their command in an attack upon the national capital and
chief seaport, and lacking as it does the elements of divided
administration, I have failed to see that the insurgents can reasonably
claim recognition as belligerents.

Thus far the position of our Government has been that of an attentive
but impartial observer of the unfortunate conflict. Emphasizing our
fixed policy of impartial neutrality in such a condition of affairs as
now exists, I deemed it necessary to disavow in a manner not to be
misunderstood the unauthorized action of our late naval commander in
those waters in saluting the revolted Brazilian admiral, being
indisposed to countenance an act calculated to give gratuitous sanction
to the local insurrection.

The convention between our Government and Chile having for its object
the settlement and adjustment of the demand of the two countries
against each other has been made effective by he organization of the
claims commission provided for. The two Governments failing to agree
upon the third member of the commission, the good offices of the
President of the Swiss Republic were invoked, as provided in the treaty,
and the selection of the Swiss representative in this country to
complete the organization was gratifying alike to the United States and
Chile.

The vexatious question of so-called legation asylum for offenders
against the state and its laws was presented anew in Chile by the
unauthorized action of the late United States minister in receiving
into his official residence two persons who had just failed in an
attempt at revolution and against whom criminal charges were pending
growing out of a former abortive disturbance. The doctrine of asylum as
applied to this case is not sanctioned by the best precedents, and when
allowed tends to encourage sedition and strife. Under no circumstances
can the representatives of this Government be permitted, under the
ill-defined fiction of extraterritoriality, to interrupt the administration
of criminal justice in the countries to which they are accredited. A
temperate demand having been made by the Chilean Government for the
correction of this conduct in the instance mentioned, the minister was
instructed no longer to harbor the offenders.

The legislation of last year known as the Geary law, requiring the
registration of all Chinese laborers entitled to residence in the
United States and the deportation of all not complying with the
provisions of the act within the time prescribed, met with much
opposition from Chinamen in this country. Acting upon the advice of
eminent counsel that the law was unconstitutional, the great mass of
Chinese laborers, pending judicial inquiry as to its validity, in good
faith declined to apply for the certificates required by its provisions.
A test case upon proceeding by habeas corpus was brought before the
Supreme Court, and on May 15, 1893, a decision was made by that
tribunal sustaining the law.

It is believed that under the recent amendment of the act extending the
time for registration the Chinese laborers thereto entitled who desire
to reside in this country will now avail themselves of the renewed
privilege thus afforded of establishing by lawful procedure their right
to remain, and that thereby the necessity of enforced deportation may
to a great degree be avoided.

It has devolved upon the United States minister at Peking, as dean of
the diplomatic body, and in the absence of a representative of Sweden
and Norway, to press upon the Chinese Government reparation for the
recent murder of Swedish missionaries at Sung-pu. This question is of
vital interest to all countries whose citizens engage in missionary
work in the interior.

By Article XII of the general act of Brussels, signed July 2, 1890, for
the suppression of the slave trade and the restriction of certain
injurious commerce in the Independent State of the Kongo and in the
adjacent zone of central Africa, the United States and the other
signatory powers agreed to adopt appropriate means for the punishment
of persons selling arms and ammunition to the natives and for the
confiscation of the inhibited articles. It being the plain duty of this
Government to aid in suppressing the nefarious traffic, impairing as it
does the praiseworthy and civilizing efforts now in progress in that
region, I recommend that an act be passed prohibiting the sale of arms
and intoxicants to natives in the regulated zone by our citizens.

Costa Rica has lately testified its friendliness by surrendering to the
United States, in the absence of a convention of extradition, but upon
duly submitted evidence of criminality, a noted fugitive from justice.
It is trusted that the negotiation of a treaty with that country to
meet recurring cases of this kind will soon be accomplished. In my
opinion treaties for reciprocal extradition should be concluded with
all those countries with which the United States has not already
conventional arrangements of that character.

I have deemed it fitting to express to the Governments of Costa Rica
and Colombia the kindly desire of the United States to see their
pending boundary dispute finally closed by arbitration in conformity
with the spirit of the treaty concluded between them some years ago.

Our relations with the French Republic continue to be intimate and
cordial. I sincerely hope that the extradition treaty with that country,
as amended by the Senate, will soon be operative.

While occasional questions affecting our naturalized citizens returning
to the land of their birth have arisen in our intercourse with Germany,
our relations with that country continue satisfactory.

The questions affecting our relations with Great Britain have been
treated in a spirit of friendliness.

Negotiations are in progress between the two Governments with a view to
such concurrent action as will make the award and regulations agreed
upon by the Bering Sea Tribunal of Arbitration practically effective,
and it is not doubted that Great Britain will cooperate freely with
this country for the accomplishment of that purpose.

The dispute growing out of the discriminating tolls imposed in the
Welland Canal upon cargoes of cereals bound to and from the lake ports
of the United States was adjusted by the substitution of a more
equitable schedule of charges, and my predecessor thereupon suspended
his proclamation imposing discriminating tolls upon British transit
through our canals.

A request for additions to the list of extraditable offenses covered by
the existing treaty between the two countries is under consideration.

During the past year an American citizen employed in a subordinate
commercial position in Hayti, after suffering a protracted imprisonment
on an unfounded charge of smuggling, was finally liberated on judicial
examination. Upon urgent representation to the Haytian Government a
suitable indemnity was paid to the sufferer.

By a law of Hayti a sailing vessel, having discharged her cargo, is
refused clearance until the duties on such cargo have been paid. The
hardship of this measure upon American shipowners, who conduct the bulk
of the carrying trade of that country, has been insisted on with a view
of securing the removal of this cause of complaint.

Upon receiving authentic information of the firing upon an American
mail steamer touching at the port of Amapala because her captain
refused to deliver up a passenger in transit from Nicaragua to
Guatemala upon demand of the military authorities of Honduras, our
minister to that country, under instructions, protested against the
wanton act and demanded satisfaction. The Government of Honduras,
actuated by a sense of justice and in a spirit of the utmost friendship,
promptly disavowed the illegal conduct of its officers and expressed
sincere regret for the occurrence.

It is confidently anticipated that a satisfactory adjustment will soon
be reached of the questions arising out of the seizure and use of
American vessels by insurgents in Honduras and the subsequent denial by
the successful Government of commercial privileges to those vessels on
that account.

A notable part of the southeasterly coast of Liberia between the
Cavally and San Pedro rivers, which for nearly half a century has been
generally recognized as belonging to that Republic by cession and
purchase, has been claimed to be under the protectorate of France in
virtue of agreements entered into by the native tribes, over whom
Liberia's control has not been well maintained.

More recently negotiations between the Liberian representative and the
French Government resulted in the signature at Paris of a treaty
whereby as an adjustment certain Liberian territory is ceded to France.
This convention at last advices had not been ratified by the Liberian
Legislature and Executive.

Feeling a sympathetic interest in the fortunes of the little
Commonwealth, the establishment and development of which were largely
aided by the benevolence of our countrymen, and which constitutes the
only independently sovereign state on the west coast of Africa, this
Government has suggested to the French Government its earnest concern
lest territorial impairment in Liberia should take place without her
unconstrained consent.

Our relations with Mexico continue to be of that close and friendly
nature which should always characterize the intercourse of two
neighboring republics.

The work of relocating the monuments marking the boundary between the
two countries from Paso del Norte to the Pacific is now nearly
completed.

The commission recently organized under the conventions of 1884 and
1889 it is expected will speedily settle disputes growing out of the
shifting currents of the Rio Grande River east of El Paso.

Nicaragua has recently passed through two revolutions, the party at
first successful having in turn been displaced by another. Our newly
appointed minister by his timely good offices aided in a peaceful
adjustment of the controversy involved in the first conflict. The large
American interests established in that country in connection with the
Nicaragua Canal were not molested.

The canal company has unfortunately become financially seriously
embarrassed, but a generous treatment had been extended to it by the
Government of Nicaragua. The United States are especially interested in
the successful achievement of the vast undertaking this company has in
charge. That it should be accomplished under distinctively American
auspices, and its enjoyment assured not only to the vessels of this
country as a channel of communication between our Atlantic and Pacific
sea-boards, but to the ships of the world in the interests of
civilization, is a proposition which, in my judgment, does not admit of
question.

Guatemala has also been visited by the political vicissitudes which
have afflicted her Central American neighbors, but the dissolution of
its Legislature and the proclamation of a dictatorship have been
unattended with civil war.

An extradition treaty with Norway has recently been exchanged and
proclaimed.

The extradition treaty with Russia signed in March, 1887, and amended
and confirmed by the Senate in February last, was duly proclaimed last
June.

Led by a desire to compose differences and contribute to the
restoration of order in Samoa, which for some years previous had been
the scene of conflicting foreign pretensions and native strife, the
United States, departing from its policy consecrated by a century of
observance, entered four years ago into the treaty of Berlin, thereby
becoming jointly bound with England and Germany to establish and
maintain Malietoa Laupepa as King of Samoa. The treaty provided for a
foreign court of justice; a municipal council for the district of Apia,
with a foreign president thereof, authorized to advise the King; a
tribunal for the settlement of native and foreign land titles, and a
revenue system for the Kingdom. It entailed upon the three powers that
part of the cost of the new Government not met by the revenue of the
islands.

Early in the life of this triple protectorate the native dissensions it
was designed to quell revived. Rivals defied the authority of the new
King, refusing to pay taxes and demanding the election of a ruler by
native suffrage. Mataafa, an aspirant to the throne, and a large number
of his native adherents were in open rebellion on one of the islands.
Quite lately, at the request of the other powers and in fulfillment of
its treaty obligation, this Government agreed to unite in a joint
military movement of such dimensions as would probably secure the
surrender of the insurgents without bloodshed.

The war ship Philadelphia was accordingly put under orders for Samoa,
but before she arrived the threatened conflict was precipitated by King
Malietoa's attack upon the insurgent camp. Mataafa was defeated and a
number of his men killed. The British and German naval vessels present
subsequently secured the surrender of Mataafa and his adherents. The
defeated chief and ten of his principal supporters were deported to a
German island of the Marshall group, where they are held as prisoners
under the joint responsibility and cost of the three powers.

This incident and the events leading up to it signally illustrate the
impolicy of entangling alliances with foreign powers.

More than fifteen years ago this Government preferred a claim against
Spain in behalf of one of our citizens for property seized and
confiscated in Cuba. In 1886 the claim was adjusted, Spain agreeing to
pay unconditionally, as a fair indemnity, $1,500,000. A respectful but
earnest note was recently addressed to the Spanish Government insisting
upon prompt fulfillment of its long-neglected obligation.

Other claims preferred by the United States against Spain in behalf of
American citizens for property confiscated in Cuba have been pending
for many years.

At the time Spain's title to the Caroline Islands was confirmed by
arbitration that Government agreed that the rights which had been
acquired there by American missionaries should be recognized and
respected. It is sincerely hoped that this pledge will be observed by
allowing our missionaries, who were removed from Ponape to a place of
safety by a United States war ship during the late troubles between the
Spanish garrison and the natives, to return to their field of
usefulness.

The reproduced caravel Santa Maria, built by Spain and sent to the
Columbian Exposition, has been presented to the United States in token
of amity and in commemoration of the event it was designed to celebrate.
I recommend that in accepting this gift Congress make grateful
recognition of the sincere friendship which prompted it.

Important matters have demanded attention in our relations with the
Ottoman Porte.

The firing and partial destruction by an unrestrained mob of one of the
school buildings of Anatolia College, established by citizens of the
United States at Marsovan, and the apparent indifference of the Turkish
Government to the outrage, notwithstanding the complicity of some of
its officials, called for earnest remonstrance, which was followed by
promise of reparation and punishment of the offenders.

Indemnity for the injury to the buildings has already been paid,
permission to rebuild given, registration of the school property in the
name of the American owners secured, and efficient protection
guaranteed.

Information received of maltreatment suffered by an inoffensive
American woman engaged in missionary work in Turkish Koordistan was
followed by such representations to the Porte as resulted in the
issuance of orders for the punishment of her assailants, the removal of
a delinquent official, and the adoption of measures for the protection
of our citizens engaged in mission and other lawful work in that
quarter.

Turkey complains that her Armenian subjects obtain citizenship in this
country not to identify themselves in good faith with our people, but
with the intention of returning to the land of their birth and there
engaging in sedition. This complaint is not wholly without foundation.
A journal published in this country in the Armenian language openly
counsels its readers to arm, organize, and participate in movements for
the subversion of Turkish authority in the Asiatic provinces. The
Ottoman Government has announced its intention to expel from its
dominions Armenians who have obtained naturalization in the United
States since 1868.

The right to exclude any or all classes of aliens is an attribute of
sovereignty. It is a right asserted and, to a limited extent, enforced
by the United States, with the sanction of our highest court. There
being no naturalization treaty between the United States and Turkey,
our minister at Constantinople has been instructed that, while
recognizing the right of that Government to enforce its declared policy
against naturalized Armenians, he is expected to protect them from
unnecessary harshness of treatment.

In view of the impaired financial resources of Venezuela consequent
upon the recent revolution there, a modified arrangement for the
satisfaction of the awards of the late revisory claims commission, in
progressive installments, has been assented to, and payments are being
regularly made thereunder.

The boundary dispute between Venezuela and British Guiana is yet
unadjusted. A restoration of diplomatic intercourse between that
Republic and Great Britain and reference of the question to impartial
arbitration would be a most gratifying consummation.

The ratification by Venezuela of the convention for the arbitration of
the long-deferred claim of the Venezuelan Transportation Company is
awaited.

It is hardly necessary for me to state that the questions arising from
our relations with Hawaii have caused serious embarrassment. Just prior
to the installation of the present Administration the existing
Government of Hawaii had been suddenly overthrown and a treaty of
annexation had been negotiated between the Provisional Government of
the islands and the United States and submitted to the Senate for
ratification. This treaty I withdrew for examination and dispatched Hon.
James H. Blount, of Georgia, to Honolulu as a special commissioner to
make an impartial investigation of the circumstances attending the
change of government and of all the conditions bearing upon the subject
of the treaty. After a thorough and exhaustive examination Mr. Blount
submitted to me his report, showing beyond all question that the
constitutional Government of Hawaii had been subverted with the active
aid of our representative to that Government and through the
intimidation caused by the presence of an armed naval force of the
United States, which was landed for that purpose at the instance of our
minister. Upon the facts developed it seemed to me the only honorable
course for our Government to pursue was to undo the wrong that had been
done by those representing us and to restore as far as practicable the
status existing at the time of our forcible intervention. With a view
of accomplishing this result within the constitutional limits of
executive power, and recognizing all our obligations and
responsibilities growing out of any changed conditions brought about by
our unjustifiable interference, our present minister at Honolulu has
received appropriate instructions to that end. Thus far no information
of the accomplishment of any definite results has been received from
him.

Additional advices are soon expected. When received they will be
promptly sent to the Congress, together with all other information at
hand, accompanied by a special Executive message fully detailing all
the facts necessary to a complete understanding of the case and
presenting a history of all the material events leading up to the
present situation.

By a concurrent resolution passed by the Senate February 14, 1890, and
by the House of Representatives on the 3d of April following the
President was requested to "invite from time to time, as fit occasions
may arise, negotiations with any government with which the United
States has or may have diplomatic relations, to the end that any
differences or disputes arising between the two governments which can
not be adjusted by diplomatic agency may be referred to arbitration and
be peaceably adjusted by such means." April 18, 1890, the International
American Conference of Washington by resolution expressed the wish that
all controversies between the republics of America and the nations of
Europe might be settled by arbitration, and recommended that the
government of each nation represented in that conference should
communicate this wish to all friendly powers. A favorable response has
been received from Great Britain in the shape of a resolution adopted
by Parliament July 16 last, cordially sympathizing with the purpose in
view and expressing the hope that Her Majesty's Government will lend
ready cooperation to the Government of the United States upon the basis
of the concurrent resolution above quoted.

It affords me signal pleasure to lay this parliamentary resolution
before the Congress and to express my sincere gratification that the
sentiment of two great and kindred nations is thus authoritatively
manifested in favor of the rational and peaceable settlement of
international quarrels by honorable resort to arbitration.

Since the-passage of the act of March 3, 1893, authorizing the
President to raise the grade of our envoys to correspond with the rank
in which foreign countries accredit their agents here, Great Britain,
France, Italy, and Germany have conferred upon their representatives at
this capital the title of ambassador, and I have responded by
accrediting the agents of the United States in those countries with the
same title. A like elevation of mission is announced by Russia, and
when made will be similarly met. This step fittingly comports with the
position the United States hold in the family of nations.

During my former Administration I took occasion to recommend a recast
of the laws relating to the consular service, in order that it might
become a more efficient agency in the promotion of the interests it was
intended to subserve. The duties and powers of consuls have been
expanded with the growing requirements of our foreign trade.
Discharging important duties affecting our commerce and American
citizens abroad, and in certain countries exercising judicial functions,
these officers should be men of character, intelligence, and ability.

Upon proof that the legislation of Denmark secures copyright to
American citizens on equal footing with its own, the privileges of our
copyright laws have been extended by proclamation to subjects of that
country.

The Secretary of the Treasury reports that the receipts of the
Government from all sources during the fiscal year ended June 30, 1893,
amounted to $461,716,561.94 and its expenditures to $459,374,674.29.
There was collected from customs $205,355,016.73 and from internal
revenue $161,027,623.93. Our dutiable imports amounted to $421,856,711,
an increase of $52,453,907 over the preceding year, and importations
free of duty amounted to $444,544,211, a decrease from the preceding
year of $13,455,447. Internal-revenue receipts exceeded those of the
preceding year by $7,147,445.32. The total tax collected on distilled
spirits was $94,720,260.55, on manufactured tobacco $31,889,711.74, and
on fermented liquors $32,548,983.07. We exported merchandise during the
year amounting to $847,665,194, a decrease of $182,612,954 from the
preceding year. The amount of gold exported was larger than any
previous year in the history of the Government, amounting to
$108,680,844, and exceeding the amount exported during the preceding
year by$58,485,517.

The sum paid from the Treasury for sugar bounty was $9,375,130.88, an
increase over the preceding year of $2,033,053.09.

It is estimated upon the basis of present revenue laws that the
receipts of the Government for the year ending June 30, 1894, will be
$430,121,365.38 and its expenditures $458,121,365.28, resulting in a
deficiency of $28,000,000.

On the 1st day of November, 1893, the amount of money of all kinds in
circulation, or not included in Treasury holdings, was $1,718,544,682,
an increase for the year of $112,404,947. Estimating our population at
67,426,000 at the time mentioned, the per capita circulation was $25.49.
On the same date there was in the Treasury gold bullion amounting to
$96,657,273 and silver bullion which was purchased at a cost of
$126,261,553.

The purchases of silver under the law of July 14, 1890, during the last
fiscal year aggregated 54,008,162.59 fine ounces, which cost
$45,531,374.53. The total amount of silver purchased from the time that
law became operative until the repeal of its purchasing clause, on the
1st day of November, 1893, was 168,674,590.46 fine ounces, which cost
$155,930,940.84. Between the 1st day of March, 1873, and the 1st day of
November, 1893, the Government purchased under all laws 503,003,717
fine ounces of silver, at a cost of $516,622,948. The silver dollars
that have been coined under the act of July 14, 1890, number 36,087,285.
The seigniorage arising from such coinage was $6,977,098.39, leaving on
hand in the mints 140,699,760 fine ounces of silver, which cost
$126,758,218.

Our total coinage of all metals during the last fiscal year consisted
of 97,280,875 pieces, valued at $43,685,178.80, of which there was
$30,038,140 in gold coin, $5,343,715 in silver dollars, $7,217,220.90
in subsidiary silver coin, and $1,086,102.90 in minor coins.

During the calendar year 1892 the production of precious metals in the
United States was estimated to be 1,596,375 fine ounces of gold of the
commercial and coinage value of $33,000,000 and 58,000,000 fine ounces
of silver of the bullion or market value of $50,750,000 and of the
coinage value of $74,989,900.

It is estimated that on the 1st day of July, 1893, the metallic stock
of money in the United States, consisting of coin and bullion, amounted
to $1,213,559,169, of which $597,697,685 was gold and $615,861,484 was
silver.

One hundred and nineteen national banks were organized during the year
ending October 31, 1893, with a capital of $11,230,000. Forty-six went
into voluntary liquidation and 158 suspended. Sixty-five of the
suspended banks were insolvent, 86 resumed business, and 7 remain in
the hands of the bank examiners, with prospects of speedy resumption.
Of the new banks organized, 44 were located in the Eastern States, 41
west of the Mississippi River, and 34 in the Central and Southern
States. The total number of national banks in existence on October 31,
1893, was 3,796, having an aggregate capital of $695,558,120. The net
increase in the circulation of these banks during the year was
$36,886,972.

The recent repeal of the provision of law requiring the purchase of
silver bullion by the Government as a feature of our monetary scheme
has made an entire change in the complexion of our currency affairs. I
do not doubt that the ultimate result of this action will be most
salutary and far-reaching. In the nature of things, however, it is
impossible to know at this time precisely what conditions will be
brought about by the change, or what, if any, supplementary legislation
may in the light of such conditions appear to be essential or expedient.
Of course, after the recent financial perturbation, time is necessary
for the reestablishment of business confidence. When, however, through
this restored confidence, the money which has been frightened into
hoarding places is returned to trade and enterprise, a survey of the
situation will probably disclose a safe path leading to a permanently
sound currency, abundantly sufficient to meet every requirement of our
increasing population and business.

In the pursuit of this object we should resolutely turn away from
alluring and temporary expedients, determined to be content with
nothing less than a lasting and comprehensive financial plan. In these
circumstances I am convinced that a reasonable delay in dealing with
this subject, instead of being injurious, will increase the probability
of wise action.

The monetary conference which assembled at Brussels upon our invitation
was adjourned to the 30th day of November of the present year. The
considerations just stated and the fact that a definite proposition
from us seemed to be expected upon the reassembling of the conference
led me to express a willingness to have the meeting still further
postponed.

It seems to me that it would be wise to give general authority to the
President to invite other nations to such a conference at any time when
there should be a fair prospect of accomplishing an international
agreement on the subject of coinage.

I desire also to earnestly suggest the wisdom of amending the existing
statutes in regard to the issuance of Government bonds. The authority
now vested in the Secretary of the Treasury to issue bonds is not as
clear as it should be, and the bonds authorized are disadvantageous to
the Government both as to the time of their maturity and rate of
interest.

The Superintendent of Immigration, through the Secretary of the
Treasury, reports that during the last fiscal year there arrived at our
ports 440,793 immigrants. Of these, 1,063 were not permitted to land
under the limitations of the law and 577 were returned to the countries
from whence they came by reason of their having become public charges.
The total arrivals were 141,034 less than for the previous year.

The Secretary in his report gives an account of the operation of the
Marine-Hospital Service and of the good work done under its supervision
in preventing the entrance and spread of contagious diseases.

The admonitions of the last two years touching our public health and
the demonstrated danger of the introduction of contagious diseases from
foreign ports have invested the subject of national quarantine with
increased interest. A more general and harmonious system than now
exists, acting promptly and directly everywhere and constantly
operating by preventive means to shield our country from the invasion
of disease, and at the same time having due regard to the rights and
duties of local agencies, would, I believe, add greatly to the safety
of our people.

The Secretary of War reports that the strength of the Army on the 30th
day of September last was 25,778 enlisted men and 2,144 officers.

The total expenditures of the Department for the year ending June 30,
1893, amounted to $51,966,074.89. Of this sum $1,992,581.95 was for
salaries and contingent expenses, $23,377,828.35 for the support of the
military establishment, $6,077,033.18 for miscellaneous objects, and
518,631.41 for public works. This latter sum includes $15,296,876.46
for river and harbor improvements and $3,266,141.20 for fortifications
and other works of defense.

The total enrollment of the militia of the several States was on the
31st of October of the current year 112,597 officers and enlisted men.
The officers of the Army detailed for the inspection and instruction of
this reserve of our military force report that increased interest and
marked progress are apparent in the discipline and efficiency of the
organization.

Neither Indian outbreaks nor domestic violence have called the Army
into service during the year, and the only active military duty
required of it has been in the Department of Texas, where violations of
the neutrality laws of the United States and Mexico were promptly and
efficiently dealt with by the troops, eliciting the warm approval of
the civil and military authorities of both countries.

The operation of wise laws and the influences of civilization
constantly tending to relieve the country from the dangers of Indian
hostilities, together with the increasing ability of the States,
through the efficiency of the National Guard organizations, to protect
their citizens from domestic violence, lead to the suggestion that the
time is fast approaching when there should be a reorganization of our
Army on the lines of the present necessities of the country. This
change contemplates neither increase in number nor added expense, but a
redistribution of the force and an encouragement of measures tending to
greater efficiency among the men and improvement of the service.

The adoption of battalion formations for infantry regiments, the
strengthening of the artillery force, the abandonment of smaller and
unnecessary posts, and the massing of the troops at important and
accessible stations all promise to promote the usefulness of the Army.
In the judgment of army officers, with but few exceptions, the
operation of the law forbidding the reenlistment of men after ten
years' service has not proved its wisdom, and while the arguments that
led to its adoption were not without merit the experience of the year
constrains me to join in the recommendation for its repeal.

It is gratifying to note that we have begun to attain completed results
in the comprehensive scheme of seacoast defense and fortification
entered upon eight years ago. A large sum has been already expended,
but the cost of maintenance will be inconsiderable as compared with the
expense of construction and ordnance. At the end of the current
calendar year the War Department will have nine 12-inch guns, twenty
10-inch, and thirty-four 8-inch guns ready to be mounted on gun lifts
and carriages, and seventy-five 12-inch mortars. In addition to the
product of the Army Gun Factory, now completed at Watervliet, the
Government has contracted with private parties for the purchase of one
hundred guns of these calibers, the first of which should be delivered
to the Department for test before July 1, 1894.

The manufacture of heavy ordnance keeps pace with current needs, but to
render these guns available for the purposes they are designed to meet
emplacements must be prepared for them. Progress has been made in this
direction, and it is desirable that Congress by adequate appropriations
should provide for the uninterrupted prosecution of this necessary work.

After much preliminary work and exhaustive examination in accordance
with the requirements of the law, the board appointed to select a
magazine rifle of modern type with which to replace the obsolete
Springfield rifle of the infantry service completed its labors during
the last year, and the work of manufacture is now in progress at the
national armory at Springfield. It is confidently expected that by the
end of the current year our infantry will be supplied with a weapon
equal to that of the most progressive armies of the world.

The work on the projected Chickamauga and Chattanooga National Military
Park has been prosecuted with zeal and judgment, and its opening will
be celebrated during the coming year. Over 9 square miles of the
Chickamauga battlefield have been acquired, 25 miles of roadway have
been constructed, and permanent tablets have been placed at many
historical points, while the invitation to the States to mark the
positions of their troops participating in the battle has been very
generally accepted.

The work of locating and preserving the lines of battle at the
Gettysburg battlefield is making satisfactory progress on the plans
directed by the last Congress.

The reports of the Military Academy at West Point and the several
schools for special instruction of officers show marked advance in the
education of the Army and a commendable ambition among its officers to
excel in the military profession and to fit themselves for the highest
service to the country.

Under the supervision of Adjutant-General Robert Williams, lately
retired, the Bureau of Military Information has become well established
and is performing a service that will put in possession of the
Government in time of war most valuable information, and at all times
serve a purpose of great utility in keeping the Army advised of the
world's progress in all matters pertaining to the art of war.

The report of the Attorney-General contains the usual summary of the
affairs and proceedings of the Department of Justice for the past year,
together with certain recommendations as to needed legislation on
various subjects. I can not too heartily indorse the proposition that
the fee system as applicable to the compensation of United States
attorneys, marshals, clerks of Federal courts, and United States
commissioners should be abolished with as little delay as possible. It
is clearly in the interest of the community that the business of the
courts, both civil and criminal, shall be as small and as inexpensively
transacted as the ends of justice will allow.

The system is therefore thoroughly vicious which makes the compensation
of court officials depend upon the volume of such business, and thus
creates a conflict between a proper execution of the law and private
gain, which can not fail to be dangerous to the rights and freedom of
the citizen and an irresistible temptation to the unjustifiable
expenditure of public funds. If in addition to this reform another was
inaugurated which would give to United States commissioners the final
disposition of petty offenses within the grade of misdemeanors,
especially those coming under the internal-revenue laws, a great
advance would be made toward a more decent administration of the
criminal law.

In my first message to Congress, dated December 8, 1885, I strongly
recommended these changes and referred somewhat at length to the evils
of the present system. Since that time the criminal business of the
Federal courts and the expense attending it have enormously increased.
The number of criminal prosecutions pending in the circuit and district
courts of the United States on the 1st day of July, 1885, was 3,808, of
which 1,884 were for violations of the internal-revenue laws, while the
number of such prosecutions pending on the 1st day of July, 1893, was
9,500, of which 4,200 were for violations of the internal-revenue laws.
The expense of the United States courts, exclusive of judges' salaries,
for the year ending July 1, 1885, was $2,874,733.11 and for the year
ending July 1, 1893, $4,528,676.87.

It is therefore apparent that the reasons given in 1885 for a change in
the manner of enforcing the Federal criminal law have gained cogency
and strength by lapse of time.

I also heartily join the Attorney-General in recommending legislation
fixing degrees of the crime of murder within Federal jurisdiction, as
has been done in many of the States; authorizing writs of error on
behalf of the Government in cases where final judgment is rendered
against the sufficiency of an indictment or against the Government upon
any other question arising before actual trial; limiting the right of
review in cases of felony punishable only by fine and imprisonment to
the circuit court of appeals, and making speedy provision for the
construction of such prisons and reformatories as may be necessary for
the confinement of United States convicts.

The report of the Postmaster-General contains a detailed statement of
the operations of the Post-Office Department during the last fiscal
year and much interesting information touching this important branch of
the public service.

The business of the mails indicates with absolute certainty the
condition of the business of the country, and depression in financial
affairs inevitably and quickly reduces the postal revenues. Therefore a
larger discrepancy than usual between the post-office receipts and
expenditures is the expected and unavoidable result of the distressing
stringency which has prevailed throughout the country during much of
the time covered by the Postmaster-General's report. At a date when
better times were anticipated it was estimated by his predecessor that
the deficiency on the 30th day of June, 1893, would be but a little
over a million and a half dollars. It amounted, however, to more than
five millions. At the same time and under the influence of like
anticipations estimates were made for the current fiscal year, ending
June 30, 1894, which exhibited a surplus of revenue over expenditures
of $872,245.71; but now, in view of the actual receipts and
expenditures during that part of the current fiscal year already
expired, the present Postmaster-General estimates that at its close
instead of a surplus there will be a deficiency of nearly $8,000,000.

The post-office receipts for the last fiscal year amounted to
$75,896,933.16 and its expenditures to $81,074,104.90. This post-office
deficiency would disappear or be immensely decreased if less matter
were carried free through the mails, an item of which is upward of 300
tons of seeds and grain from the Agricultural Department.

The total number of post-offices in the United States on the 30th day
of June, 1893, was 68,403, an increase of 1,284 over the preceding year.
Of these, 3,360 were Presidential, an increase in that class of 204
over the preceding year.

Forty-two free-delivery offices were added during the year to those
already existing, making a total of 610 cities and towns provided with
free delivery on June 30, 1893. Ninety-three other cities and towns are
now entitled to this service under the law, but it has not been
accorded them on account of insufficient funds to meet the expenses of
its establishment.

I am decidedly of the opinion that the provisions of the present law
permit as general an introduction of this feature of mail service as is
necessary or justifiable, and that it ought not to be extended to
smaller communities than are now designated.

The expenses of free delivery for the fiscal year ending June 30, 1894,
will be more than $11,000,000, and under legislation now existing there
must be a constant increase in this item of expenditure.

There were 6,401 additions to the domestic money-order offices during
the last fiscal year, being the largest increase in any year since the
inauguration of the system. The total number of these offices at the
close of the year was 18,434. There were 13,309,735 money orders issued
from these offices, being an increase over the preceding year of
1,240,293, and the value of these orders amounted to $127,576,433.65,
an increase of $7,509,632.58. There were also issued during the year
postal notes amounting to $12,903,076.73.

During the year 195 international money-order offices were added to
those already provided, making a total of 2,407 in operation on June 30,
1893. The number of international money orders issued during the year
was 1,055,999, an increase over the preceding year of 72,525, and their
value was $16,341,837.86, an increase of $2,221,506.31. The number of
orders paid was 300,917, an increase over the preceding year of 13,503,
and their value was $5,283,375.70, an increase of $94,094.83.

From the foregoing statements it appears that the total issue of money
orders and postal notes for the year amounted to $156,822,348.24.

The number of letters and packages mailed during the year for special
delivery was 3,375,693, an increase over the preceding year of nearly
22 per cent. The special-delivery stamps used upon these letters and
packages amounted to $337,569.30, and the messengers' fees paid for
their delivery amounted to $256,592.71, leaving a profit to the
Government of $80,976.59.

The Railway Mail Service not only adds to the promptness of mail
delivery at all offices, but it is the especial instrumentality which
puts the smaller and way places in the service on an equality in that
regard with the larger and terminal offices. This branch of the postal
service has therefore received much attention from the Postmaster-General,
and though it is gratifying to know that it is in a condition
of high efficiency and great usefulness, I am led to agree with the
Postmaster-General that there is room for its further improvement.

There are now connected to the Post-Office establishment 28,324
employees who are in the classified service. The head of this great
Department gives conclusive evidence of the value of civil-service
reform when, after an experience that renders his judgment on the
subject absolutely reliable, he expresses the opinion that without the
benefit of this system it would be impossible to conduct the vast
business intrusted to him.

I desire to commend as especially worthy of prompt attention the
suggestions of the Postmaster-General relating to a more sensible and
business like organization and a better distribution of responsibility
in his Department.

The report of the Secretary of the Navy contains a history of the
operations of his Department during the past year and exhibits a most
gratifying condition of the personnel of our Navy. He presents a
satisfactory account of the progress which has been made in the
construction of vessels and makes a number of recommendations to which
attention is especially invited.

During the past six months the demands for cruising vessels have been
many and urgent. There have been revolutions calling for vessels to
protect American interests in Nicaragua, Guatemala, Costa Rica,
Honduras, Argentina, and Brazil, while the condition of affairs in
Honolulu has required the constant presence of one or more ships. With
all these calls upon our Navy it became necessary, in order to make up
a sufficient fleet to patrol the Bering Sea under the modus vivendi
agreed upon with Great Britain, to detail to that service one vessel
from the Fish Commission and three from the Revenue Marine.

Progress in the construction of new vessels has not been as rapid as
was anticipated. There have been delays in the completion of unarmored
vessels, but for the most part they have been such as are constantly
occurring even in countries having the largest experience in naval
shipbuilding. The most serious delays, however, have been in the work
upon armored ships. The trouble has been the failure of contractors to
deliver armor as agreed. The difficulties seem now, however, to have
been all overcome, and armor is being delivered with satisfactory
promptness. As a result of the experience acquired by shipbuilders and
designers and material men, it is believed that the dates when vessels
will be completed can now be estimated with reasonable accuracy. Great
guns, rapid-fire guns, torpedoes, and powder are being promptly
supplied.

The following vessels of the new Navy have been completed and are now
ready for service: The double-turreted coast-defense monitor
Miantonomoh, the double-turreted coast-defense monitor Monterey, the
armored cruiser New York, the protected cruisers Baltimore, Chicago,
Philadelphia, Newark, San Francisco, Charleston, Atlanta, and Boston,
the cruiser Detroit, the gunboats Yorktown, Concord, Bennington,
Machias, Castine, and Petrel, the dispatch vessel Dolphin, the practice
vessel Bancroft, and the dynamite gunboat Vesuvius. Of these the
Bancroft, Machias, Detroit, and Castine have been placed in commission
during the current calendar year.

The following vessels are in process of construction: The second-class
battle ships Maine and Texas, the cruisers Montgomery and Marblehead,
and the coast-defense monitors Terror, Puritan, Amphitrite, and
Monadnock, all of which will be completed within one year; the
harbor-defense ram Katahdin and the protected cruisers Columbia, Minneapolis,
Olympia, Cincinnati, and Raleigh, all of which will be completed prior
to July 1, 1895; the first-class battle ships Iowa, Indiana,
Massachusetts, and Oregon, which will be completed February 1, 1896,
and the armored cruiser Brooklyn, which will be completed by August 1
of that year. It is also expected that the three gunboats authorized by
the last Congress will be completed in less than two years.

Since 1886 Congress has at each session authorized the building of one
or more vessels, and the Secretary of the Navy presents an earnest plea
for the continuance of this plan. He recommends the authorization of at
least one battle ship and six torpedo boats.

While I am distinctly in favor of consistently pursuing the policy we
have inaugurated of building up a thorough and efficient Navy, I can
not refrain from the suggestion that the Congress should carefully take
into account the number of unfinished vessels on our hands and the
depleted condition of our Treasury in considering the propriety of an
appropriation at this time to begin new work.

The method of employing mechanical labor at navy-yards through boards
of labor and making efficiency the sole test by which laborers are
employed and continued is producing the best results, and the Secretary
is earnestly devoting himself to its development. Attention is invited
to the statements of his report in regard to the workings of the system.

The Secretary of the Interior has the supervision of so many important
subjects that his report is of especial value and interest.

On the 30th day of June, 1893, there were on the pension rolls 966,012
names, an increase of 89,944 over the number on the rolls June 30, 1892.
Of these there were 17 widows and daughters of Revolutionary soldiers,
86 survivors of the War of 1812, 5,425 widows of soldiers of that war,
21,518 survivors and widows of the Mexican War, 3,882 survivors and
widows of Indian wars, 284 army nurses, and 475,645 survivors and
widows and children of deceased soldiers and sailors of the War of the
Rebellion. The latter number represents those pensioned on account of
disabilities or death resulting from army and navy service. The number
of persons remaining on the rolls June 30, 1893, who were pensioned
under the act of June 27, 1890, which allows pensions on account of
death and disability not chargeable to army service, was 459,155.

The number added to the rolls during the year was 123,634 and the
number dropped was 33,690. The first payments on pensions allowed
during the year amounted to $33,756,549.98. This includes arrears, or
the accumulation between the time from which the allowance of pension
dates and the time of actually granting the certificate.

Although the law of 1890 permits pensions for disabilities not related
to military service, yet as a requisite to its benefits a disability
must exist incapacitating applicants "from the performance of manual
labor to such a degree as to render them unable to earn a support." The
execution of this law in its early stages does not seem to have been in
accord with its true intention, but toward the close of the last
Administration an authoritative construction was given to the statute,
and since that time this construction has been followed. This has had
the effect of limiting the operation of the law to its intended purpose.
The discovery having been made that many names had been put upon the
pension roll by means of wholesale and gigantic frauds, the
Commissioner suspended payments upon a number of pensions which seemed
to be fraudulent or unauthorized pending a complete examination, giving
notice to the pensioners, in order that they might have an opportunity
to establish, if possible, the justice of their claims notwithstanding
apparent invalidity.

This, I understand, is the practice which has for a long time prevailed
in the Pension Bureau; but after entering upon these recent
investigations the Commissioner modified this rule so as not to allow
until after a complete examination interference with the payment of a
pension apparently not altogether void, but which merely had been fixed
at a rate higher than that authorized by law.

I am unable to understand why frauds in the pension rolls should not be
exposed and corrected with thoroughness and vigor. Every name
fraudulently put upon these rolls is a wicked imposition upon the
kindly sentiment in which pensions have their origin; every fraudulent
pensioner has become a bad citizen; every false oath in support of a
pension has made perjury more common, and false and undeserving
pensioners rob the people not only of their money, but of the patriotic
sentiment which the survivors of a war fought for the preservation of
the Union ought to inspire. Thousands of neighborhoods have their
well-known fraudulent pensioners, and recent developments by the Bureau
establish appalling conspiracies to accomplish pension frauds. By no
means the least wrong done is to brave and deserving pensioners, who
certainly ought not to be condemned to such association.

Those who attempt in the line of duty to rectify these wrongs should
not be accused of enmity or indifference to the claims of honest
veterans. The sum expended on account of pensions for the year ending
June 30, 1893, was $156,740,467.14.

The Commissioner estimates that $165,000,000 will be required to pay
pensions during the year ending June 30, 1894.

The condition of the Indians and their ultimate fate are subjects which
are related to a sacred duty of the Government and which strongly
appeal to the sense of justice and the sympathy of our people.

Our Indians number about 248,000. Most of them are located on 161
reservations, containing 86,116,531 acres of land. About 110,000 of
these Indians have to a large degree adopted civilized customs. Lands
in severalty have been allotted to many of them. Such allotments have
been made to 10,000 individuals during the last fiscal year, embracing
about 1,000,000 acres. The number of Indian Government schools opened
during the year was 195, an increase of 12 over the preceding year. Of
this total 170 were on reservations, of which 73 were boarding schools
and 97 were day schools. Twenty boarding schools and 5 day schools
supported by the Government were not located on reservations. The total
number of Indian children enrolled during the year as attendants of all
schools was 21,138, an increase of 1,231 over the enrollment for the
previous year.

I am sure that secular education and moral and religious teaching must
be important factors in any effort to save the Indian and lead him to
civilization. I believe, too, that the relinquishment of tribal
relations and the holding of land in severalty may in favorable
conditions aid this consummation. It seems to me, however, that
allotments of land in severalty ought to be made with great care and
circumspection. If hastily done, before the Indian knows its meaning,
while yet he has little or no idea of tilling a farm and no conception
of thrift, there is great danger that a reservation life in tribal
relations may be exchanged for the pauperism of civilization instead of
its independence and elevation.

The solution of the Indian problem depends very largely upon good
administration. The personal fitness of agents and their adaptability
to the peculiar duty of caring for their wards are of the utmost
importance.

The law providing that, except in special cases, army officers shall be
detailed as Indian agents it is hoped will prove a successful
experiment.

There is danger of great abuses creeping into the prosecution of claims
for Indian depredations, and I recommend that every possible safeguard
be provided against the enforcement of unjust and fictitious claims of
this description.

The appropriations on account of the Indian Bureau for the year ending
June 30, 1894, amount to $7,954,962.99, a decrease as compared with the
year preceding it of $387,131.95.

The vast area of land which but a short time ago constituted the public
domain is rapidly falling into private hands. It is certain that in the
transfer the beneficent intention of the Government to supply from its
domain homes to the industrious and worthy home seekers is often
frustrated. Though the speculator, who stands with extortionate purpose
between the land office and those who, with their families, are invited
by the Government to settle on the public lands, is a despicable
character who ought not to be tolerated, yet it is difficult to thwart
his schemes. The recent opening to settlement of the lands in the
Cherokee Outlet, embracing an area of 6,500,000 acres, notwithstanding
the utmost care in framing the regulations governing the selection of
locations and notwithstanding the presence of United States troops,
furnished an exhibition, though perhaps in a modified degree, of the
mad scramble, the violence, and the fraudulent occupation which have
accompanied previous openings of public land.

I concur with the Secretary in the belief that these outrageous
incidents can not be entirely prevented without a change in the laws on
the subject, and I hope his recommendations in that direction will be
favorably considered.

I especially commend to the attention of the Congress the statements
contained in the Secretary's report concerning forestry. The time has
come when efficient measures should be taken for the preservation of
our forests from indiscriminate and remediless destruction.

The report of the Secretary of Agriculture will be found exceedingly
interesting, especially to that large part of our citizens intimately
concerned in agricultural occupations.

On the 7th day of March, 1893, there were upon its pay rolls 2,430
employees. This number has been reduced to 1,850 persons. In view of a
depleted public Treasury and the imperative demand of the people for
economy in the administration of their Government, the Secretary has
entered upon the task of rationally reducing expenditures by the
elimination from the pay rolls of all persons not needed for an
efficient conduct of the affairs of the Department.

During the first quarter of the present year the expenses of the
Department aggregated $345,876.76, as against $402,012.42 for the
corresponding period of the fiscal year ending June 30, 1893. The
Secretary makes apparent his intention to continue this rate of
reduction by submitting estimates for the next fiscal year less by
$994,280 than those for the present year.

Among the heads of divisions in this Department the changes have been
exceedingly few. Three vacancies occurring from death and resignations
have been filled by the promotion of assistants in the same divisions.

These promotions of experienced and faithful assistants have not only
been in the interest of efficient work, but have suggested to those in
the Department who look for retention and promotion that merit and
devotion to duty are their best reliance.

The amount appropriated for the Bureau of Animal Industry for the
current fiscal year is $850,000. The estimate for the ensuing year is
$700,000.

The regulations of 1892 concerning Texas fever have been enforced
during the last year and the large stock yards of the country have been
kept free from infection. Occasional local outbreaks have been largely
such as could have been effectually guarded against by the owners of
the affected cattle.

While contagious pleuro-pneumonia in cattle has been eradicated, animal
tuberculosis, a disease widespread and more dangerous to human life
than pleuro-pneumonia, is still prevalent. Investigations have been
made during the past year as to the means of its communication and the
method of its correct diagnosis. Much progress has been made in this
direction by the studies of the division of animal pathology, but work
ought to be extended, in cooperation with local authorities, until the
danger to human life arising from this cause is reduced to a minimum.

The number of animals arriving from Canada during the year and
inspected by Bureau officers was 462,092, and the number from
transatlantic countries was 1,297. No contagious diseases were found
among the imported animals.

The total number of inspections of cattle for export during the past
fiscal year was 611,542. The exports show a falling off of about 25 per
cent from the preceding year, the decrease occurring entirely in the
last half of the year. This suggests that the falling off may have been
largely due to an increase in the price of American export cattle.

During the year ending June 30, 1893, exports of inspected pork
aggregated 10,677,410 pounds, as against 38,152,874 pounds for the
preceding year. The falling off in this export was not confined,
however, to inspected pork, the total quantity exported for 1892 being
665,490,616 pounds, while in 1893 it was only 527,308,695 pounds.

I join the Secretary in recommending that hereafter each applicant for
the position of inspector or assistant inspector in the Bureau of
Animal Industry be required, as a condition precedent to his
appointment, to exhibit to the United States Civil Service Commission
his diploma from an established, regular, and reputable veterinary
college, and that this be supplemented by such an examination in
veterinary science as the Commission may prescribe.

The exports of agricultural products from the United States for the
fiscal year ending June 30, 1892, attained the enormous figure of
$800,000,000, in round numbers, being 78.7 per cent of our total
exports. In the last fiscal year this aggregate was greatly reduced,
but nevertheless reached 615,000,000, being 75.1 per cent of all
American commodities exported.

A review of our agricultural exports with special reference to their
destination will show that in almost every line the United Kingdom of
Great Britain and Ireland absorbs by far the largest proportion. Of
cattle the total exports aggregated in value for the fiscal year ending
June 30, 1893, $26,000,000, of which Great Britain took considerably
over $25,000,000. Of beef products of all kinds our total exports were
$28,000,000, of which Great Britain took $24,000,000. Of pork products
the total exports were $84,000,000, of which Great Britain took
$53,000,000. In breadstuffs, cotton, and minor products like
proportions sent to the same destination are shown.

The work of the statistical division of the Department of Agriculture
deals with all that relates to the economics of farming.

The main purpose of its monthly reports is to keep the farmers informed
as fully as possible of all matters having any influence upon the
world's markets, in which their products find sale. Its publications
relate especially to the commercial side of farming.

It is therefore of profound importance and vital concern to the farmers
of the United States, who represent nearly one-half of our population,
and also of direct interest to the whole country, that the work of this
division be efficiently performed and that the information it has
gathered be promptly diffused.

It is a matter for congratulation to know that the Secretary will not
spare any effort to make this part of his work thoroughly useful.

In the year 1839 the Congress appropriated $1,000, to be taken from the
Patent Office funds, for the purpose of collecting and distributing
rare and improved varieties of seeds and for prosecuting agricultural
investigations and procuring agricultural statistics. From this small
beginning the seed division of the Department of Agriculture has grown
to its present unwieldy and unjustifiably extravagant proportions.

During the last fiscal year the cost of seeds purchased was $66,548.61.
The remainder of an appropriation of $135,000 was expended in putting
them up and distributing them. It surely never could have entered the
minds of those who first sanctioned appropriations of public money for
the purchase of new and improved varieties of seeds for gratuitous
distribution that from this would grow large appropriations for the
purchase and distribution by members of Congress of ordinary seeds,
bulbs, and cuttings which are common in all the States and Territories
and everywhere easily obtainable at low prices.

In each State and Territory an agricultural experiment station has been
established. These stations, by their very character and name, are the
proper agencies to experiment with and test new varieties of seeds; and
yet this indiscriminate and wasteful distribution by legislation and
legislators continues, answering no purpose unless it be to remind
constituents that their representatives are willing to remember them
with gratuities at public cost.

Under the sanction of existing legislation there was sent out from the
Agricultural Department during the last fiscal year enough of cabbage
seed to plant 19,200 acres of land, a sufficient quantity of beans to
plant 4,000 acres, beet seed enough to plant 2,500 acres, sweet corn
enough to plant 7,800 acres, sufficient cucumber seed to cover 2,025
acres with vines, and enough muskmelon and watermelon seeds to plant
2,675 acres. The total quantity of flower and vegetable seeds thus
distributed was contained in more than 9,000,000 packages, and they
were sufficient if planted to cover 89,596 acres of land.

In view of these facts this enormous expenditure without legitimate
returns of benefit ought to be abolished. Anticipating a consummation
so manifestly in the interest of good administration, more than
$100,000 has been stricken from the estimate made to cover this object
for the year ending June 30, 1895; and the Secretary recommends that
the remaining $35,000 of the estimate be confined strictly to the
purchase of new and improved varieties of seeds, and that these be
distributed through experiment stations.

Thus the seed will be tested, and after the test has been completed by
the experiment station the propagation of the useful varieties and the
rejection of the valueless may safely be left to the common sense of
the people.

The continued intelligent execution of the civil-service law and the
increasing approval by the people of its operation are most gratifying.
The recent extension of its limitations and regulations to the
employees at free-delivery post-offices, which has been honestly and
promptly accomplished by the Commission, with the hearty cooperation of
the Postmaster-General, is an immensely important advance in the
usefulness of the system.

I am, if possible, more than ever convinced of the incalculable
benefits conferred by the civil-service law, not only in its effect
upon the public service, but also, what is even more important, in its
effect in elevating the tone of political life generally.

The course of civil-service reform in this country instructively and
interestingly illustrates how strong a hold a movement gains upon our
people which has underlying it a sentiment of justice and right and
which at the same time promises better administration of their
Government.

The law embodying this reform found its way to our statute book more
from fear of the popular sentiment existing in its favor than from any
love for the reform itself on the part of legislators, and it has lived
and grown and flourished in spite of the covert as well as open
hostility of spoilsmen and notwithstanding the querulous
impracticability of many self-constituted guardians. Beneath all the
vagaries and sublimated theories which are attracted to it there
underlies this reform a sturdy common-sense principle not only suited
to this mundane sphere, but whose application our people are more and
more recognizing to be absolutely essential to the most successful
operation of their Government, if not to its perpetuity.

It seems to me to be entirely inconsistent with the character of this
reform, as well as with its best enforcement, to oblige the Commission
to rely for clerical assistance upon clerks detailed from other
Departments. There ought not to be such a condition in any Department
that clerks hired to do work there can be spared to habitually work at
another place, and it does not accord with a sensible view of civil-service
reform that persons should be employed on the theory that their
labor is necessary in one Department when in point of fact their
services are devoted to entirely different work in another Department.

I earnestly urge that the clerks necessary to carry on the work of the
Commission be regularly put upon its roster and that the system of
obliging the Commissioners to rely upon the services of clerks
belonging to other Departments be discontinued. This ought not to
increase the expense to the Government, while it would certainly be
more consistent and add greatly to the efficiency of the Commission.

Economy in public expenditure is a duty that can not innocently be
neglected by those intrusted with the control of money drawn from the
people for public uses. It must be confessed that our apparently
endless resources, the familiarity of our people with immense
accumulations of wealth, the growing sentiment among them that the
expenditure of public money should in some manner be to their immediate
and personal advantage, the indirect and almost stealthy manner in
which a large part of our taxes is exacted, and a degenerated sense of
official accountability have led to growing extravagance in
governmental appropriations.

At this time, when a depleted public Treasury confronts us, when many
of our people are engaged in a hard struggle for the necessaries of
life, and when enforced economy is pressing upon the great mass of our
countrymen, I desire to urge with all the earnestness at my command
that Congressional legislation be so limited by strict economy as to
exhibit an appreciation of the condition of the Treasury and a sympathy
with the straitened circumstances of our fellow-citizens.

The duty of public economy is also of immense importance in its
intimate and necessary relation to the task now in hand of providing
revenue to meet Government expenditures and yet reducing the people's
burden of Federal taxation.

After a hard struggle tariff reform is directly before us. Nothing so
important claims our attention and nothing so clearly presents itself
as both an opportunity and a duty--an opportunity to deserve the
gratitude of our fellow-citizens and a duty imposed upon us by our
oft-repeated professions and by the emphatic mandate of the people. After
full discussion our countrymen have spoken in favor of this reform, and
they have confided the work of its accomplishment to the hands of those
who are solemnly pledged to it.

If there is anything in the theory of a representation in public places
of the people and their desires, if public officers are really the
servants of the people, and if political promises and professions have
any binding force, our failure to give the relief so long awaited will
be sheer recreancy. Nothing should intervene to distract our attention
or disturb our effort until this reform is accomplished by wise and
careful legislation.

While we should stanchly adhere to the principle that only the
necessity of revenue justifies the imposition of tariff duties and
other Federal taxation and that they should be limited by strict
economy, we can not close our eyes to the fact that conditions have
grown up among us which in justice and fairness call for discriminating
care in the distribution of such duties and taxation as the emergencies
of our Government actually demand.

Manifestly if we are to aid the people directly through tariff reform,
one of its most obvious features should be a reduction in present
tariff charges upon the necessaries of life. The benefits of such a
reduction would be palpable and substantial, seen and felt by thousands
who would be better fed and better clothed and better sheltered. These
gifts should be the willing benefactions of a Government whose highest
function is the promotion of the welfare of the people.

Not less closely related to our people's prosperity and well-being is
the removal of restrictions upon the importation of the raw materials
necessary to our manufactures. The world should be open to our national
ingenuity and enterprise. This can not be while Federal legislation
through the imposition of high tariff forbids to American manufacturers
as cheap materials as those used by their competitors. It is quite
obvious that the enhancement of the price of our manufactured products
resulting from this policy not only confines the market for these
products within our own borders, to the direct disadvantage of our
manufacturers, but also increases their cost to our citizens.

The interests of labor are certainly, though indirectly, involved in
this feature of our tariff system. The sharp competition and active
struggle among our manufacturers to supply the limited demand for their
goods soon fill the narrow market to which they are confined. Then
follows a suspension of work in mills and factories, a discharge of
employees, and distress in the homes of our workingmen.

Even if the often-disproved assertion could be made good that a lower
rate of wages would result from free raw materials and low tariff
duties, the intelligence of our workmen leads them quickly to discover
that their steady employment, permitted by free raw materials, is the
most important factor in their relation to tariff legislation.

A measure has been prepared by the appropriate Congressional committee
embodying tariff reform on the lines herein suggested, which will be
promptly submitted for legislative action. It is the result of much
patriotic and unselfish work, and I believe it deals with its subject
consistently and as thoroughly as existing conditions permit.

I am satisfied that the reduced tariff duties provided for in the
proposed legislation, added to existing internal-revenue taxation, will
in the near future, though perhaps not immediately, produce sufficient
revenue to meet the needs of the Government.

The committee, after full consideration and to provide against a
temporary deficiency which may exist before the business of the country
adjusts itself to the new tariff schedules, have wisely embraced in
their plan a few additional internal-revenue taxes, including a small
tax upon incomes derived from certain corporate investments.

These new adjustments are not only absolutely just and easily borne,
but they have the further merit of being such as can be remitted
without unfavorable business disturbance whenever the necessity of
their imposition no longer exists.

In my great desire for the success of this measure I can not restrain
the suggestion that its success can only be attained by means of
unselfish counsel on the part of the friends of tariff reform and as a
result of their willingness to subordinate personal desires and
ambitions to the general good. The local interests affected by the
proposed reform are so numerous and so varied that if all are insisted
upon the legislation embodying the reform must inevitably fail.

In conclusion my intense feeling of responsibility impels me to invoke
for the manifold interests of a generous and confiding people the most
scrupulous care and to pledge my willing support to every legislative
effort for the advancement of the greatness and prosperity of our
beloved country.

***

State of the Union Address
by Grover Cleveland
December 3, 1894


To the Congress of the United States:

The assemblage within the nation's legislative halls of those charged
with the duty of making laws for the benefit of a generous and free
people impressively suggests the exacting obligation and inexorable
responsibility involved in their task. At the threshold of such labor
now to be undertaken by the Congress of the United States, and in the
discharge of an executive duty enjoined by the Constitution, I submit
this communication, containing a brief statement of the condition of
our national affairs and recommending such legislation as seems to me
necessary and expedient.

The history of our recent dealings with other nations and our peaceful
relations with them at this time additionally demonstrate the advantage
of consistently adhering to a firm but just foreign policy, free from
envious or ambitious national schemes and characterized by entire
honesty and sincerity.

During the past year, pursuant to a law of Congress, commissioners were
appointed to the Antwerp Industrial Exposition. Though the
participation of American exhibitors fell far short of completely
illustrating our national ingenuity and industrial achievements, yet it
was quite creditable in view of the brief time allowed for preparation.

I have endeavored to impress upon the Belgian Government the
heedlessness and positive harmfulness of its restrictions upon the
importation of certain of our food products, and have strongly urged
that the rigid supervision and inspection under our laws are amply
sufficient to prevent the exportation from this country of diseased
cattle and unwholesome meat.

The termination of the civil war in Brazil has been followed by the
general prevalence of peace and order. It appearing at an early stage
of the insurrection that its course would call for unusual watchfulness
on the part of this Government, our naval force in the harbor of Rio de
Janeiro was strengthened. This precaution, I am satisfied, tended to
restrict the issue to a simple trial of strength between the Brazilian
Government and the insurgents and to avert complications which at times
seemed imminent. Our firm attitude of neutrality was maintained to the
end. The insurgents received no encouragement of eventual asylum from
our commanders, and such opposition as they encountered was for the
protection of our commerce and was clearly justified by public law.

A serious tension of relations having arisen at the close of the war
between Brazil and Portugal by reason of the escape of the insurgent
admiral Da Gama and his followers, the friendly offices of our
representatives to those countries were exerted for the protection of
the subjects of either within the territory of the other.

Although the Government of Brazil was duly notified that the commercial
arrangement existing between the United States and that country based
on the third section of the tariff act of 1890 was abrogated on August
28, 1894, by the taking effect of the tariff law now in force, that
Government subsequently notified us of its intention to terminate such
arrangement on the 1st day of January, 1895, in the exercise of the
right reserved in the agreement between the two countries. I invite
attention to the correspondence between the Secretary of State and the
Brazilian minister on this subject.

The commission organized under the convention which we had entered into
with Chile for the settlement of the outstanding claims of each
Government against the other adjourned at the end of the period
stipulated for its continuance leaving undetermined a number of
American cases which had been duly presented. These claims are not
barred, and negotiations are in progress for their submission to a new
tribunal.

On the 17th of March last a new treaty with China in further regulation
of emigration was signed at Washington, and on August 13 it received
the sanction of the Senate. Ratification on the part of China and
formal exchange are awaited to give effect to this mutually beneficial
convention.

A gratifying recognition of the uniform impartiality of this country
toward all foreign states was manifested by the coincident request of
the Chinese and Japanese Governments that the agents of the United
States should within proper limits afford protection to the subjects of
the other during the suspension of diplomatic relations due to a state
of war. This delicate office was accepted, and a misapprehension which
gave rise to the belief that in affording this kindly unofficial
protection our agents would exercise the same authority which the
withdrawn agents of the belligerents had exercised was promptly
corrected. Although the war between China and Japan endangers no policy
of the United States, it deserves our gravest consideration by reason
of its disturbance of our growing commercial interests in the two
countries and the increased dangers which may result to our citizens
domiciled or sojourning in the interior of China.

Acting under a stipulation in our treaty with Korea (the first
concluded with a western power), I felt constrained at the beginning of
the controversy to tender our good offices to induce an amicable
arrangement of the initial difficulty growing out of the Japanese
demands for administrative reforms in Korea, but the unhappy
precipitation of actual hostilities defeated this kindly purpose.

Deploring the destructive war between the two most powerful of the
eastern nations and anxious that our commercial interests in those
countries may be preserved and that the safety of our citizens there
shall not be jeopardized, I would not hesitate to heed any intimation
that our friendly aid for the honorable termination of hostilities
would be acceptable to both belligerents.

A convention has been finally concluded for the settlement by
arbitration of the prolonged dispute with Ecuador growing out of the
proceedings against Emilio Santos, a naturalized citizen of the United
States.

Our relations with the Republic of France continue to be such as should
exist between nations so long bound together by friendly sympathy and
similarity in their form of government.

The recent cruel assassination of the President of this sister Republic
called forth such universal expressions of sorrow and condolence from
our people and Government as to leave no doubt of the depth and
sincerity of our attachment. The resolutions passed by the Senate and
House of Representatives on the occasion have been communicated to the
widow of President Carnot.

Acting upon the reported discovery of Texas fever in cargoes of
American cattle, the German prohibition against importations of live
stock and fresh meats from this country has been revived. It is hoped
that Germany will soon become convinced that the inhibition is as
needless as it is harmful to mutual interests.

The German Government has protested against that provision of the
customs tariff act which imposes a discriminating duty of one-tenth of
1 cent a pound on sugars coming from countries paying an export bounty
thereon, claiming that the exaction of such duty is in contravention of
Articles V and IX of the treaty of 1828 with Prussia.

In the interests of the commerce of both countries and to avoid even
the accusation of treaty violation, I recommend the repeal of so much
of the statute as imposes that duty, and I invite attention to the
accompanying report of the Secretary of State, containing a discussion
of the questions raised by the German protests.

Early in the present year an agreement was reached with Great Britain
concerning instructions to be given to the naval commanders of the two
Governments in Bering Sea and the contiguous North Pacific Ocean for
their guidance in the execution of the award of the Paris Tribunal of
Arbitration and the enforcement of the regulations therein prescribed
for the protection of seal life in the waters mentioned. An
understanding has also been reached for the payment by the United
States of

$425,000 in full satisfaction of all claims which may be made by Great
Britain for damages growing out of the controversy as to fur seals in
Bering Sea or the seizure of British vessels engaged in taking seal in
those waters. The award and findings of the Paris Tribunal to a great
extent determined the facts and principles upon which these claims
should be adjusted, and they have been subjected by both Governments to
a thorough examination upon the principles as well as the facts which
they involve. I am convinced that a settlement upon the terms mentioned
would be an equitable and advantageous one, and I recommend that
provision be made for the prompt payment of the stated sum.

Thus far only France and Portugal have signified their willingness to
adhere to the regulations established under the award of the Paris
Tribunal of Arbitration.

Preliminary surveys of the Alaskan boundary and a preparatory
examination of the question of protection of food fish in the
contiguous waters of the United States and the Dominion of Canada are
in progress.

The boundary of British Guiana still remains in dispute between Great
Britain and Venezuela. Believing that its early settlement on some just
basis alike honorable to both parties is in the line of our established
policy to remove from this hemisphere all causes of difference with
powers beyond the sea, I shall renew the efforts heretofore made to
bring about a restoration of diplomatic relations between the
disputants and to induce a reference to arbitration--a resort which
Great Britain so conspicuously favors in principle and respects in
practice and which is earnestly sought by her weaker adversary.

Since communicating the voluminous correspondence in regard to Hawaii
and the action taken by the Senate and House of Representatives on
certain questions submitted to the judgment and wider discretion of
Congress the organization of a government in place of the provisional
arrangement which followed the deposition of the Queen has been
announced, with evidence of its effective operation. The recognition
usual in such cases has been accorded the new Government.

Under our present treaties of extradition with Italy miscarriages of
justice have occurred owing to the refusal of that Government to
surrender its own subjects. Thus far our efforts to negotiate an
amended convention obviating this difficulty have been unavailing.

Apart from the war in which the Island Empire is engaged, Japan
attracts increasing attention in this country by her evident desire to
cultivate more liberal intercourse with us and to seek our kindly aid
in furtherance of her laudable desire for complete autonomy in her
domestic affairs and full equality in the family of nations. The
Japanese Empire of to-day is no longer the Japan of the past, and our
relations with this progressive nation should not be less broad and
liberal than those with other powers.

Good will, fostered by many interests in common, has marked our
relations with our nearest southern neighbor. Peace being restored
along her northern frontier, Mexico has asked the punishment of the
late disturbers of her tranquillity. There ought to be a new treaty of
commerce and navigation with that country to take the place of the one
which terminated thirteen years ago. The friendliness of the
intercourse between the two countries is attested by the fact that
during this long period the commerce of each has steadily increased
under the rule of mutual consideration, being neither stimulated by
conventional arrangements nor retarded by jealous rivalries or selfish
distrust.

An indemnity tendered by Mexico as a gracious act for the murder in
1887 of Leon Baldwin, an American citizen, by a band of marauders in
Durango has been accepted and is being paid in installments.

The problem of the storage and use of the waters of the Rio Grande for
irrigation should be solved by appropriate concurrent action of the two
interested countries. Rising in the Colorado heights, the stream flows
intermittently, yielding little water during the dry months to the
irrigation channels already constructed along its course. This scarcity
is often severely felt in the regions where the river forms a common
boundary. Moreover, the frequent changes in its course through level
sands often raise embarrassing questions of territorial jurisdiction.

Prominent among the questions of the year was the Bluefields incident,
in what is known as the Mosquito Indian Strip, bordering on the
Atlantic Ocean and within the jurisdiction of Nicaragua. By the treaty
of 1860 between Great Britain and Nicaragua the former Government
expressly recognized the sovereignty of the latter over the strip, and
a limited form of self-government was guaranteed to the Mosquito
Indians, to be exercised according to their customs, for themselves and
other dwellers within its limits. The so-called native government,
which grew to be largely made up of aliens, for many years disputed the
sovereignty of Nicaragua over the strip and claimed the right to
maintain therein a practically independent municipal government. Early
in the past year efforts of Nicaragua to maintain sovereignty over the
Mosquito territory led to serious disturbances, culminating in the
suppression of the native government and the attempted substitution of
an impracticable composite administration in which Nicaragua and alien
residents were to participate. Failure was followed by an insurrection,
which for a time subverted Nicaraguan rule, expelling her officers and
restoring the old organization. This in turn gave place to the existing
local government established and upheld by Nicaragua.

Although the alien interests arrayed against Nicaragua in these
transactions have been largely American and the commerce of that region
for some time has been and still is chiefly controlled by our citizens,
we can not for that reason challenge the rightful sovereignty of
Nicaragua over this important part of her domain.

For some months one, and during part of the time two, of our naval
ships have been stationed at Bluefields for the protection of all
legitimate interests of our citizens. In September last the Government
at Managua expelled from its territory twelve or more foreigners,
including two Americans, for alleged participation in the seditious or
revolutionary movements against the Republic at Bluefields already
mentioned; but through the earnest remonstrance of this Government the
two Americans have been permitted to return to the peaceful management
of their business. Our naval commanders at the scene of these
disturbances by their constant exhibition of firmness and good judgment
contributed largely to the prevention of more serious consequences and
to the restoration of quiet and order. I regret that in the midst of
these occurrences there happened a most grave and irritating failure of
Nicaraguan justice. An American citizen named Wilson, residing at Rama,
in the Mosquito territory, was murdered by one Arguello, the acting
governor of the town. After some delay the murderer was arrested, but
so insecurely confined or guarded that he escaped, and notwithstanding
our repeated demands it is claimed that his recapture has been
impossible by reason of his flight beyond Nicaraguan jurisdiction.

The Nicaraguan authorities, having given notice of forfeiture of their
concession to the canal company on grounds purely technical and not
embraced in the contract, have receded from that position.

Peru, I regret to say, shows symptoms of domestic disturbance, due
probably to the slowness of her recuperation from the distresses of the
war of 1881. Weakened in resources, her difficulties in facing
international obligations invite our kindly sympathy and justify our
forbearance in pressing long-pending claims. I have felt constrained to
testify this sympathy in connection with certain demands urgently
preferred by other powers.

The recent death of the Czar of Russia called forth appropriate
expressions of sorrow and sympathy on the part of our Government with
his bereaved family and the Russian people. As a further demonstration
of respect and friendship our minister at St. Petersburg was directed
to represent our Government at the funeral ceremonies.

The sealing interests of Russia in Bering Sea are second only to our
own. A modus vivendi has therefore been concluded with the Imperial
Government restrictive of poaching on the Russian rookeries and of
sealing in waters which were not comprehended in the protected area
defined in the Paris award.

Occasion has been found to urge upon the Russian Government equality of
treatment for our great life-insurance companies whose operations have
been extended throughout Europe. Admitting as we do foreign
corporations to transact business in the United States, we naturally
expect no less tolerance for our own in the ample fields of competition
abroad.

But few cases of interference with naturalized citizens returning to
Russia have been reported during the current year. One Krzeminski was
arrested last summer in a Polish province on a reported charge of
unpermitted renunciation of Russian allegiance, but it transpired that
the proceedings originated in alleged malfeasance committed by
Krzeminski while an imperial official a number of years ago. Efforts
for his release, which promised to be successful, were in progress when
his death was reported.

The Government of Salvador having been overthrown by an abrupt popular
outbreak, certain of its military and civil officers, while hotly
pursued by infuriated insurgents, sought refuge on board the United
States war ship Bennington, then lying in a Salvadorean port. Although
the practice of asylum is not favored by this Government, yet in view
of the imminent peril which threatened the fugitives and solely from
considerations of humanity they were afforded shelter by our naval
commander, and when afterwards demanded under our treaty of extradition
with Salvador for trial on charges of murder, arson, and robbery I
directed that such of them as had not voluntarily left the ship be
conveyed to one of our nearest ports where a hearing could be had
before a judicial officer, in compliance with the terms of the treaty.
On their arrival at San Francisco such a proceeding was promptly
instituted before the United States district judge, who held that the
acts constituting the alleged offenses were political and discharged
all the accused except one Cienfuegos, who was held for an attempt to
murder. Thereupon I was constrained to direct his release for the
reason that an attempt to murder was not one of the crimes charged
against him and upon which his surrender to the Salvadorean authorities
had been demanded.

Unreasonable and unjust fines imposed by Spain on the vessels and
commerce of the United States have demanded from time to time during
the last twenty years earnest remonstrance on the part of our
Government. In the immediate past exorbitant penalties have been
imposed upon our vessels and goods by customs authorities of Cuba and
Puerto Rico for clerical errors of the most trivial character in the
manifests of bills of lading. In some cases fines amounting to
thousands of dollars have been levied upon cargoes or the carrying
vessels when the goods in question were entitled to free entry. Fines
have been exacted even when the error had been detected and the Spanish
authorities notified before the arrival of the goods in port.

This conduct is in strange contrast with the considerate and liberal
treatment extended to Spanish vessels and cargoes in our ports in like
cases. No satisfactory settlement of these vexatious questions has yet
been reached.

The Mora case, referred to in my last annual message, remains unsettled.
From the diplomatic correspondence on this subject which has been laid
before the Senate it will be seen that this Government has offered to
conclude a convention with Spain for disposal by arbitration of
outstanding claims between the two countries, except the Mora claim.
which, having been long ago adjusted, now only awaits payment as
stipulated, and of course it could not be included in the proposed
convention. It was hoped that this offer would remove parliamentary
obstacles encountered by the Spanish Government in providing payment of
the Mora indemnity. I regret to say that no definite reply to this
offer has yet been made and all efforts to secure payment of this
settled claim have been unavailing.

In my last annual message I adverted to the claim on the part of Turkey
of the right to expel as persons undesirable and dangerous Armenians
naturalized in the United States and returning to Turkish jurisdiction.
Numerous questions in this relation have arisen. While this Government
acquiesces in the asserted right of expulsion, it will not consent that
Armenians may be imprisoned or otherwise punished for no other reason
than having acquired without imperial consent American citizenship.

Three of the assailants of Miss Melton, an American teacher in Mosul,
have been convicted by the Ottoman courts, and I am advised that an
appeal against the acquittal of the remaining five has been taken by
the Turkish prosecuting officer.

A convention has been concluded with Venezuela for the arbitration of a
long-disputed claim growing out of the seizure of certain vessels the
property of citizens of the United States. Although signed, the treaty
of extradition with Venezuela is not yet in force, owing to the
insistence of that Government that when surrendered its citizens shall
in no case be liable to capital punishment.

The rules for the prevention of collisions at sea which were framed by
the maritime conference held in this city in 1889, having been
concurrently incorporated in the statutes of the United States and
Great Britain have been announced to take effect March 1, 1895, and
invitations have been extended to all maritime nations to adhere to
them. Favorable responses have thus far been received from Austria,
France, Portugal, Spain, and Sweden.

In my last annual message I referred briefly to the unsatisfactory
state of affairs in Samoa under the operation of the Berlin treaty as
signally illustrating the impolicy of entangling alliances with foreign
powers, and on May 9, 1894, in response to a resolution of the Senate,
I sent a Special message and documents to that body on the same subject,
which emphasized my previously expressed opinions. Later occurrences,
the correspondence in regard to which will be laid before the Congress,
further demonstrate that the Government which was devised by the three
powers and forced upon the Samoans against their inveterate hostility
can be maintained only by the continued presence of foreign military
force and at no small sacrifice of life and treasure.

The suppression of the Mataafa insurrection by the powers and the
subsequent banishment of the leader and eleven other chiefs, as recited
in my last message, did not bring lasting peace to the islands.
Formidable uprisings continued, and finally a rebellion broke out in
the capital island, Upolu, headed in Aana, the western district, by the
younger Tamasese, and in Atua, the eastern district, by other leaders.
The insurgents ravaged the country and fought the Government's troops
up to the very doors of Apia. The King again appealed to the powers for
help, and the combined British and German naval forces reduced the
Atuans to apparent subjection, not, however, without considerable loss
to the natives. A few days later Tamasese and his adherents, fearing
the ships and the marines, professed submission.

Reports received from our agents at Apia do not justify the belief that
the peace thus brought about will be of long duration. It is their
conviction that the natives are at heart hostile to the present
Government, that such of them as profess loyalty to it do so from fear
of the powers, and that it would speedily go to pieces if the war ships
were withdrawn. In reporting to his Government on the unsatisfactory
situation since the suppression of the late revolt by foreign armed
forces, the German consul at Apia stated:

    That peace will be lasting is hardly to be presumed. The lesson
given by firing on Atua was not sufficiently sharp and incisive to
leave a lasting impression on the forgetful Samoan temperament. In fact,
conditions are existing which show that peace will not last and is not
seriously intended. Malietoa, the King, and his chiefs are convinced
that the departure of the war ships will be a signal for a renewal of
war. The circumstance that the representatives of the villages of all
the districts which were opposed to the Government have already
withdrawn to Atua to hold meetings, and that both Atua and Aana have
forbidden inhabitants of those districts which fought on the side of
the Government to return to their villages, and have already partly
burned down the latter, indicates that a real conciliation of the
parties is still far off.

And in a note of the 10th ultimo, inclosing a copy of that report for
the information of this Government, the German ambassador said:

    The contents of the report awakened the imperial Government's
apprehension that under existing circumstances the peace concluded with
the rebels will afford no assurance of the lasting restoration of
tranquillity in the islands.

The present Government has utterly failed to correct, if indeed it has
not aggravated, the very evils it was intended to prevent. It has not
stimulated our commerce with the islands. Our participation in its
establishment against the wishes of the natives was in plain defiance
of the conservative teachings and warnings of the wise and patriotic
men who laid the foundations of our free institutions, and I invite an
expression of the judgment of Congress on the propriety of steps being
taken by this Government looking to the withdrawal from its engagements
with the other powers on some reasonable terms not prejudicial to any
of our existing rights.

The Secretary of the Treasury reports that the receipts of the
Government from all sources of revenue during the fiscal year ending
June 30, 1894, amounted to $372,802,498.29 and its expenditures to
$442,605,758.87, leaving a deficit of $69,803,260.58. There was a
decrease of $15,952,674.66 in the ordinary expense of the Government as
compared with the fiscal year 1893.

There was collected from customs $131,818,530.62 and from internal
revenue $147,168,449.70. The balance of the income for the year,
amounting to $93,815,517.97, was derived from the sales of lands and
other sources.

The value of our total dutiable imports amounted to $275,199,086, being
$146,657,625 less than during the preceding year, and the importations
free of duty amounted to $379,795,536, being $64,748,675 less than
during the preceding year. The receipts from customs were
$73,536,486.11 less and from internal revenue $13,836,539.97 less than
in 1893.

The total tax collected from distilled spirits was $85,259,250.25, on
manufactured tobacco $28,617,898.62, and on fermented liquors
$31,414,788.04.

Our exports of merchandise, domestic and foreign, amounted during the
year to $892,140,572, being an increase over the preceding year of
$44,495,378.

The total amount of gold exported during the fiscal year was
$76,898,061, as against $108,680,444 during the fiscal year 1893. The
amount imported was $72,449,119, as against $21,174,381 during the
previous year.

The imports of silver were $13,186,552 and the exports were $50,451,265.

The total bounty paid upon the production of sugar in the United States
for the fiscal year was $12,100,208.89, being an increase of
$2,725,078.01 over the payments made during the preceding year. The
amount of bounty paid from July 1, 1894, to August 28, 1894, the time
when further payments ceased by operation of law, was $966,185.84. The
total expenses incurred in the payment of the bounty upon sugar during
the fiscal year was $130,140.85.

It is estimated that upon the basis of the present revenue laws the
receipts of the Government during the current fiscal year, ending June
30, 1895, will be $424,427,748.44 and its expenditures $444,427,748.44,
resulting in a deficit of $20,000,000.

On the 1st day of November, 1894, the total stock of money of all kinds
in the country was $2,240,773,88.8, as against $2,204,651,000 on the
1st day of November, 1893, and the money of all kinds in circulation,
or not included in the Treasury holdings, was $1,672,093,422, or $24.27
per capita upon an estimated population of 68,887,000. At the same date
there was held in the Treasury gold bullion amounting to $44,615,177.55
and silver bullion which was purchased at a cost of $127,772,988. The
purchase of silver bullion under the act of July 14, 1890, ceased on
the 1st day of November, 1893, and up to that time there had been
purchased during the fiscal year 11,917,658.78 fine ounces, at a cost
of $8,715,521.32, an average cost of $0.7313 per fine ounce. The total
amount of silver purchased from the time that law took effect until the
repeal of its purchasing clause, on the date last mentioned, was
168,674,682.53 fine ounces, which cost $155,931,002.25, the average
price per fine ounce being $0.9244.

The total amount of standard silver dollars coined at the mints of the
United States since the passage of the act of February 28, 1878, is
$421,776,408, of which $378,166,793 were coined under the provisions of
that act, $38,531,143 under the provisions of the act of July 14, 1890,
and $5,078,472 under the act providing for the coinage of trade-dollar
bullion.

The total coinage of all metals at our mints during the last fiscal
year consisted of 63,485,220 pieces, valued at $106,216,730.06, of
which there were $99,474,912.50 in gold coined, $758 in standard silver
dollars, $6,024,140.30 in subsidiary silver coin, and $716,919.26 in
minor coin.

During the calendar year 1893 the production of precious metals in the
United States was estimated at 1,739,323 fine ounces of gold of the
commercial and coinage value of $35,955,000 and 70,000,000 fine ounces
of silver of the bullion or market value of $46,800,000 and of the
coinage value of $77,576,000. It is estimated that on the 1st day of
July, 1894, the stock of metallic money in the United States,
consisting of coin and bullion, amounted to $1,251,640,958, of which
$627,923,201 was gold and $624,347,757 was silver.

Fifty national banks were organized during the year ending October 31,
1894, with a capital of $5,285,000, and 79, with a capital of
$10,475,000, went into voluntary liquidation. Twenty-one banks, with a
capital of $2,770,000, were placed in the hands of receivers. The total
number of national banks in existence on the 31st day of October last
was 3,756, being 40 less than on the 31st day of October, 1893. The
capital stock paid in was $672,671,365, being $9,678,491 less than at
the same time in the previous year, and the surplus fund and individual
profits, less expenses and taxes paid, amounted to $334,121,082.10,
which was $16,089,780 less than on October 31, 1893. The circulation
was decreased $1,741,563. The obligations of the banks to each other
were increased $117,268,334 and the individual deposits were
$277,294,489 less than at the corresponding date in the previous year.
Loans and discounts were $161,206,923 more than at the same time the
previous year, and checks and other cash items were $90,349,963 more.
The total resources of the banks at the date mentioned amounted to
$3,473,922,055, as against $3,109,563,184.36 in 1893.

From the report of the Secretary of War it appears that the strength of
the Army on September 30, 1894, was 2,135 officers and 25,765 enlisted
men. Although this is apparently a very slight decrease compared with
the previous year, the actual effective force has been increased to the
equivalent of nearly two regiments through the reorganization of the
system of recruiting and the consequent release to regimental duty of
the large force of men hitherto serving at the recruiting depots. The
abolition of these depots, it is predicted, will furthermore effect an
annual reduction approximating $250,000 in the direct expenditures,
besides promoting generally the health, morale, and discipline of the
troops.

The execution of the policy of concentrating the Army at important
centers of population and transportation, foreshadowed in the last
annual report of the Secretary, has resulted in the abandonment of
fifteen of the smaller posts, which was effected under a plan which
assembles organizations of the same regiments hitherto widely separated.
This renders our small forces more readily effective for any service
which they may be called upon to perform, increases the extent of the
territory under protection without diminishing the security heretofore
afforded to any locality, improves the discipline, training, and esprit
de corps of the Army, besides considerably decreasing the cost of its
maintenance.

Though the forces of the Department of the East have been somewhat
increased, more than three-fourths of the Army is still stationed west
of the Mississippi. This carefully matured policy, which secures the
best and greatest service in the interests of the general welfare from
the small force comprising our Regular Army, should not be
thoughtlessly embarrassed by the creation of new and unnecessary posts
through acts of Congress to gratify the ambitions or interests of
localities.

While the maximum legal strength of the Army is 25,000 men, the
effective strength, through various causes, is but little over 20,000
men. The purpose of Congress does not, therefore, seem to be fully
attained by the existing condition. While no considerable increase in
the Army is, in my judgment, demanded by recent events, the policy of
seacoast fortification, in the prosecution of which we have been
steadily engaged for some years, has so far developed as to suggest
that the effective strength of the Army be now made at least equal to
the legal strength. Measures taken by the Department during the year,
as indicated, have already considerably augmented the effective force,
and the Secretary of War presents a plan, which I recommend to the
consideration of Congress, to attain the desired end. Economies
effected in the Department in other lines of its work will offset to a
great extent the expenditure involved in the proposition submitted.
Among other things this contemplates the adoption of the
three-battalion formation of regiments, which for several years has been
indorsed by the Secretaries of War and the Generals Commanding the Army.
Compact in itself, it provides a skeleton organization, ready to be
filled out in the event of war, which is peculiarly adapted to our
strength and requirements; and the fact that every other nation, with a
single exception, has adopted this formation to meet the conditions of
modern warfare should alone secure for the recommendation an early
consideration.

It is hardly necessary to recall the fact that in obedience to the
commands of the Constitution and the laws, and for the purpose of
protecting the property of the United States, aiding the process of
Federal courts, and removing lawless obstructions to the performance by
the Government of its legitimate functions, it became necessary in
various localities during the year to employ a considerable portion of
the regular troops. The duty was discharged promptly, courageously, and
with marked discretion by the officers and men, and the most gratifying
proof was thus afforded that the Army deserves that complete confidence
in its efficiency and discipline which the country has at all times
manifested.

The year has been free from disturbances by Indians, and the chances of
further depredations on their part are constantly becoming more remote
and improbable.

The total expenditures for the War Department for the year ended June
30, 1894, amounted to $56,039,009.34. Of this sum $2,000,614.99 was for
salaries and contingent expenses, $23,665,156.16 for the support of the
military establishment, $5,001,682.23 for miscellaneous objects, and
$25,371,555.96 for public works. This latter sum includes
$19,494,037.49 for river and harbor improvements and $3,947,863.56 for
fortifications and other works of defense. The appropriations for the
current year aggregate $52,429,112.78, and the estimates submitted by
the Secretary of War for the next fiscal year call for appropriations
amounting to $52,318,629.55.

The skill and industry of our ordnance officers and inventors have, it
is believed, overcome the mechanical obstacles which have heretofore
delayed the armament of our coasts, and this great national undertaking
upon which we have entered may now proceed as rapidly as Congress shall
determine. With a supply of finished guns of large caliber already on
hand, to which additions should now rapidly follow, the wisdom of
providing carriages and emplacements for their mount can not be too
strongly urged.

The total enrollment of the militia of the several States is 117,533
officers and enlisted men, an increase of 5,343 over the number
reported at the close of the previous year. The reports of militia
inspections by Regular Army officers show a marked increase in interest
and efficiency among the State organizations, and I strongly recommend
a continuance of the policy of affording every practical encouragement
possible to this important auxiliary of our military establishment.

The condition of the Apache Indians held as prisoners by the Government
for eight years at a cost of half a million dollars has been changed
during the year from captivity to one which gives them an opportunity
to demonstrate their capacity for self-support and at least partial
civilization. Legislation enacted at the late session of Congress gave
the War Department authority to transfer the survivors, numbering 346,
from Mount Vernon Barracks, in Alabama, to any suitable reservation.
The Department selected as their future home the military lands near
Fort Sill, Ind. T., where, under military surveillance, the former
prisoners have been established in agriculture under conditions
favorable to their advancement.

In recognition of the long and distinguished military services and
faithful discharge of delicate and responsible civil duties by
Major-General John M. Schofield, now the General Commanding the Army, it is
suggested to Congress that the temporary revival of the grade of
lieutenant-general in his behalf would be a just and gracious act and
would permit his retirement, now near at hand, with rank befitting his
merits.

The report of the Attorney-General notes the gratifying progress made
by the Supreme Court in overcoming the arrears of its business and in
reaching a condition in which it will be able to dispose of cases as
they arise without any unreasonable delay. This result is of course
very largely due to the successful working of the plan inaugurating
circuit courts of appeals. In respect to these tribunals the suggestion
is made, in quarters entitled to the highest consideration that an
additional circuit judge for each circuit would greatly strengthen
these courts and the confidence reposed in their adjudications, and
that such an addition would not create a greater force of judges than
the increasing business of such courts requires. I commend the
suggestion to the careful consideration of the Congress. Other
important topics are adverted to in the report, accompanied by
recommendations, many of which have been treated at large in previous
messages, and at this time, therefore, need only be named. I refer to
the abolition of the fee system as a measure of compensation to Federal
officers; the enlargement of the powers of United States commissioners,
at least in the Territories; the allowance of writs of error in
criminal cases on behalf of the United States, and the establishment of
degrees in the crime of murder. A topic dealt with by the Attorney-General
of much importance is the condition of the administration of
justice in the Indian Territory. The permanent solution of what is
called the Indian problem is probably not to be expected at once, but
meanwhile such ameliorations of present conditions as the existing
system will admit of ought not to be neglected. I am satisfied there
should be a Federal court established for the Territory, with
sufficient judges, and that this court should sit within the Territory
and have the same jurisdiction as to Territorial affairs as is now
vested in the Federal courts sitting in Arkansas and Texas.

Another subject of pressing moment referred to by the Attorney-General
is the reorganization of the Union Pacific Railway Company on a basis
equitable as regards all private interests and as favorable to the
Government as existing conditions will permit. The operation of a
railroad by a court through a receiver is an anomalous state of things
which should be terminated on all grounds, public and private, at the
earliest possible moment. Besides, not to enact the needed enabling
legislation at the present session postpones the whole matter until the
assembling of a new Congress and inevitably increases all the
complications of the situation, and could not but be regarded as a
signal failure to solve a problem which has practically been before the
present Congress ever since its organization.

Eight years ago in my annual message I urged upon the Congress as
strongly as I could the location and construction of two prisons for
the confinement of United States prisoners. A similar recommendation
has been made from time to time since, and a few years ago a law was
passed providing for the selection of sites for three such institutions.
No appropriation has, however, been made to carry the act into effect,
and the old and discreditable condition still exists.

It is not my purpose at this time to repeat the considerations which
make an impregnable case in favor of the ownership and management by
the Government of the penal institutions in which Federal prisoners are
confined. I simply desire to again urge former recommendations on the
subject and to particularly call the attention of the Congress to that
part of the report of the Secretary of War in which he states that the
military prison at Fort Leavenworth, Kans., can be turned over to the
Government as a prison for Federal convicts without the least
difficulty and with an actual saving of money from every point of view.

Pending a more complete reform, I hope that by the adoption of the
suggestion of the Secretary of War this easy step may be taken in the
direction of the proper care of its convicts by the Government of the
United States.

The report of the Postmaster-General presents a comprehensive statement
of the operations of the Post-Office Department for the last fiscal
year.

The receipts of the Department during the year amounted to
$75,080,479.04 and the expenditures to $84,324,414.15.

The transactions of the postal service indicate with barometric
certainty the fluctuations in the business of the country. Inasmuch,
therefore, as business complications continued to exist throughout the
last year to an unforeseen extent, it is not surprising that the
deficiency of revenue to meet the expenditures of the Post-Office
Department, which was estimated in advance at about $8,000,000, should
be exceeded by nearly $1,225,000. The ascertained revenues of the last
year, which were the basis of calculation for the current year, being
less than estimated, the deficiency for the current year will be
correspondingly greater, though the Postmaster-General states that the
latest indications are so favorable that he confidently predicts an
increase of at least 8 per cent in the revenues of the current year
over those of the last year.

The expenditures increase steadily and necessarily with the growth and
needs of the country, so that the deficiency is greater or less in any
year, depending upon the volume of receipts.

The Postmaster-General states that this deficiency is unnecessary and
might be obviated at once if the law regulating rates upon mail matter
of the second class was modified. The rate received for the
transmission of this second-class matter is 1 cent per pound, while the
cost of such transmission to the Government is eight times that amount.
In the general terms of the law this rate covers newspapers and
periodicals. The extensions of the meaning of these terms from time to
time have admitted to the privileges intended for legitimate newspapers
and periodicals a surprising range of publications and created abuses
the cost of which amounts in the aggregate to the total deficiency of
the Post-Office Department. Pretended newspapers are started by
business houses for the mere purpose of advertising goods, complying
with the law in form only and discontinuing the publications as soon as
the period of advertising is over. "Sample copies" of pretended
newspapers are issued in great numbers for a like purpose only. The
result is a great loss of revenue to the Government, besides its
humiliating use as an agency to aid in carrying out the scheme of a
business house to advertise its goods by means of a trick upon both its
rival houses and the regular and legitimate newspapers. Paper-covered
literature, consisting mainly of trashy novels, to the extent of many
thousands of tons is sent through the mails at 1 cent per pound, while
the publishers of standard works are required to pay eight times that
amount in sending their publications. Another abuse consists in the
free carriage through the mails of hundreds of tons of seed and grain
uselessly distributed through the Department of Agriculture. The
Postmaster-General predicts that if the law be so amended as to
eradicate these abuses not only will the Post-Office Department show no
deficiency, but he believes that in the near future all legitimate
newspapers and periodical magazines might be properly transmitted
through the mails to their subscribers free of cost. I invite your
prompt consideration of this subject and fully indorse the views of the
Postmaster-General.

The total number of post-offices in the United States on the 30th day
of June, 1894, was 69,805, an increase of 1,403 over the preceding year.
Of these, 3,428 were Presidential, an increase in that class of 68 over
the preceding year.

Six hundred and ten cities and towns are provided with free delivery.
Ninety-three other cities and towns entitled to this service under the
law have not been accorded it on account of insufficient funds. The
expense of free delivery for the current fiscal year will be more than
$12,300,000, and under existing legislation this item of expenditure is
subject to constant increase. The estimated cost of rural free delivery
generally is so very large that it ought not to be considered in the
present condition of affairs.

During the year 830 additional domestic money-order offices were
established. The total number of these offices at the close of the year
was 19,264. There were 14,304,041 money orders issued during the year,
being an increase over the preceding year of 994,306. The value of
these orders amounted to $138,793,579.49, an increase of $11,217,145.84.
There were also issued during the year postal notes amounting to
$12,649,094.55.

During the year 218 international money-order offices were added to
those already established, making a total of 2,625 such offices in
operation June 30, 1894. The number of international money orders
issued during the year was 917,823, a decrease in number of 138,176,
and their value was $13,792,455.31, a decrease in amount of
$2,549,382.55. The number of orders paid was 361,180, an increase over
the preceding year of 60,263, and their value was $6,568,493.78, an
increase of $1,285,118.08.

From the foregoing statements it appears that the total issue of money
orders and postal notes for the year amounted to $165,235,129.35.

The number of letters and packages mailed during the year for special
delivery was 3,436,970. The special-delivery stamps used upon these
letters and packages amounted to $343,697. The messengers fees paid for
their delivery amounted to $261,209.70, leaving a balance in favor of
the Government of $82,487.30.

The report shows most gratifying results in the way of economies worked
out without affecting the efficiency of the postal service. These
consist in the abrogation of steamship subsidy contracts, reletting of
mail transportation contracts, and in the cost and amount of supplies
used in the service, amounting in all to $16,619,047.42.

This report also contains a valuable contribution to the history of the
Universal Postal Union, an arrangement which amounts practically to the
establishment of one postal system for the entire civilized world.
Special attention is directed to this subject at this time in view of
the fact that the next congress of the union will meet in Washington in
1897, and it is hoped that timely action will be taken in the direction
of perfecting preparations for that event.

The Postmaster-General renews the suggestion made in a previous report
that the Department organization be increased to the extent of creating
a direct district supervision of all postal affairs, and in this
suggestion I fully concur.

There are now connected with the Post-Office establishment 32,661
employees who are in the classified service. This includes many who
have been classified upon the suggestion of the Postmaster-General. He
states that another year's experience at the head of the Department
serves only to strengthen the conviction as to the excellent working of
the civil-service law in this branch of the public service.

Attention is called to the report of the Secretary of the Navy, which
shows very gratifying progress in the construction of ships for our new
Navy. All the vessels now building, including the three torpedo boats
authorized at the last session of Congress and excepting the first-class
battle ship Iowa, will probably be completed during the coming
fiscal year.

The estimates for the increase of the Navy for the year ending June 30,
1896, are large, but they include practically the entire sum necessary
to complete and equip all the new ships not now in commission, so that
unless new ships are authorized the appropriations for the naval
service for the fiscal year ending June 30, 1897, should fall below the
estimates for the coming year by at least $12,000,000.

The Secretary presents with much earnestness a plea for the
authorization of three additional battle ships and ten or twelve
torpedo boats. While the unarmored vessels heretofore authorized,
including those now nearing completion, will constitute a fleet which
it is believed is sufficient for ordinary cruising purposes in time of
peace, we have now completed and in process of construction but four
first-class battle ships and but few torpedo boats. If we are to have a
navy for warlike operations, offensive and defensive, we certainly
ought to increase both the number of battle ships and torpedo boats.

The manufacture of armor requires expensive plants and the aggregation
of many skilled workmen. All the armor necessary to complete the
vessels now building will be delivered before the 1st of June next. If
no new contracts are given out, contractors must disband their workmen
and their plants must lie idle. Battle ships authorized at this time
would not be well under way until late in the coming fiscal year, and
at least three years and a half from the date of the contract would be
required for their completion. The Secretary states that not more than
15 per cent of the cost of such ships need be included in the
appropriations for the coming year.

I recommend that provision be made for the construction of additional
battle ships and torpedo boats. The Secretary recommends the
manufacture not only of a reserve supply of ordnance and ordnance
material for ships of the Navy, but also a supply for the auxiliary
fleet. Guns and their appurtenances should be provided and kept on hand
for both these purposes. We have not to-day a single gun that could be
put upon the ships Paris or New York of the International Navigation
Company or any other ship of our reserve Navy.

The manufacture of guns at the Washington Navy-Yard is proceeding
satisfactorily, and none of our new ships will be required to wait for
their guns or ordnance equipment.

An important order has been issued by the Secretary of the Navy
coordinating the duties of the several bureaus concerned in the
construction of ships. This order, it is believed, will secure to a
greater extent than has heretofore been possible the harmonious action
of these several bureaus and make the attainment of the best results
more certain.

During the past fiscal year there has been an unusual and pressing
demand in many quarters of the world for the presence of vessels to
guard American interests.

In January last, during the Brazilian insurrection, a large fleet was
concentrated in the harbor of Rio de Janeiro. The vigorous action of
Rear-Admiral Benham in protecting the personal and commercial rights of
our citizens during the disturbed conditions afforded results which
will, it is believed, have a far-reaching and wholesome influence
whenever in like circumstances it may become necessary for our naval
commanders to interfere on behalf of our people in foreign ports.

The war now in progress between China and Japan has rendered it
necessary or expedient to dispatch eight vessels to those waters.

Both the Secretary of the Navy and the Secretary of the Treasury
recommend the transfer of the work of the Coast Survey proper to the
Navy Department. I heartily concur in this recommendation. Excluding
Alaska and a very small area besides, all the work of mapping and
charting our coasts has been completed. The hydrographic work, which
must be done over and over again by reason of the shifting and varying
depths of water consequent upon the action of streams and tides, has
heretofore been done under the direction of naval officers in
subordination to the Superintendent of the Coast Survey. There seems to
be no good reason why the Navy should not have entire charge hereafter
of such work, especially as the Hydrographic Office of the Navy
Department is now and has been for many years engaged in making
efficient maps entirely similar to those prepared by the Coast Survey.

I feel it my imperative duty to call attention to the recommendation of
the Secretary in regard to the personnel of the line of the Navy. The
stagnation of promotion in this the vital branch of the service is so
great as to seriously impair its efficiency.

I consider it of the utmost importance that the young and middle-aged
officers should before the eve of retirement be permitted to reach a
grade entitling them to active and important duty.

The system adopted a few years ago regulating the employment of labor
at the navy-yards is rigidly upheld and has fully demonstrated its
usefulness and expediency. It is within the domain of civil-service
reform inasmuch as workmen are employed through a board of labor
selected at each navy-yard and are given work without reference to
politics and in the order of their application, preference, however,
being given to Army and Navy veterans and those having former navy-yard
experience.

Amendments suggested by experience have been made to the rules
regulating the system. Through its operation the work at our navy-yards
has been vastly improved in efficiency and the opportunity to work has
been honestly and fairly awarded to willing and competent applicants.

It is hoped that if this system continues to be strictly adhered to
there will soon be as a natural consequence such an equalization of
party benefit as will remove all temptation to relax or abandon it.

The report of the Secretary of the Interior exhibits the situation of
the numerous and interesting branches of the public service connected
with his Department. I commend this report and the valuable
recommendations of the Secretary to the careful attention of the
Congress.

The public land disposed of during the year amounted to 10,406,100.77
acres, including 28,876.05 of Indian lands.

It is estimated that the public domain still remaining amounts to a
little more than 600,000,000 acres, including, however, about
360,000,000 acres in Alaska, as well as military reservations and
railroad and other selections of lands yet unadjudicated.

The total cash receipts from sale of lands amounted to $2,674,285.79,
including $91,981.03 received for Indian lands.

Thirty-five thousand patents were issued for agricultural lands, and
3,100 patents were issued to Indians on allotments of their holdings in
severalty, the land so allotted being inalienable by the Indian
allottees for a period of twenty-five years after patent.

There were certified and patented on account of railroad and wagon-road
grants during the year 865,556.45 acres of land, and at the close of
the year 29,000,000 acres were embraced in the lists of selections made
by railroad and wagon-road companies and awaited settlement.

The selections of swamp lands and that taken as indemnity therefor
since the passage of the act providing for the same in 1849 amount to
nearly or quite 80,500,000 acres, of which 58,000,000 have been
patented to States. About 138,000 acres were patented during the last
year. Nearly 820,000 acres of school and education grants were approved
during the year, and at its close 1,250,363.81 acres remained
unadjusted.

It appears that the appropriation for the current year on account of
special service for the protection of the public lands and the timber
thereon is much less than those for previous years, and inadequate for
an efficient performance of the work. A larger sum of money than has
been appropriated during a number of years past on this account has
been returned to the Government as a result of the labors of those
employed in the particular service mentioned, and I hope it will not be
crippled by insufficient appropriation.

I fully indorse the recommendation of the Secretary that adequate
protection be provided for our forest reserves and that a comprehensive
forestry system be inaugurated. Such keepers and superintendents as are
necessary to protect the forests already reserved should be provided.

I am of the opinion that there should be an abandonment of the policy
sanctioned by present laws under which the Government, for a very small
consideration, is rapidly losing title to immense tracts of land
covered with timber, which should be properly reserved as permanent
sources of timber supply.

The suggestion that a change be made in the manner of securing surveys
of the public lands is especially worthy of consideration. I am
satisfied that these surveys should be made by a corps of competent
surveyors under the immediate control and direction of the Commissioner
of the General Land Office.

An exceedingly important recommendation of the Secretary relates to the
manner in which contests and litigated cases growing out of efforts to
obtain Government land are determined. The entire testimony upon which
these controversies depend in all their stages is taken before the
local registers and receivers, and yet these officers have no power to
subpoena witnesses or to enforce their attendance to testify. These
cases, numbering three or four thousand annually, are sent by the local
officers to the Commissioner of the General Land Office for his action.
The exigencies of his other duties oblige him to act upon the decisions
of the registers and receivers without an opportunity of thorough
personal examination. Nearly 2,000 of these cases are appealed annually
from the Commissioner to the Secretary of the Interior. Burdened with
other important administrative duties, his determination of these
appeals must be almost perfunctory and based upon the examination of
others, though this determination of the Secretary operates as a final
adjudication upon rights of very great importance.

I concur in the opinion that the Commissioner of the General Land
Office should be relieved from the duty of deciding litigated land
cases, that a nonpartisan court should be created to pass on such cases,
and that the decisions of this court should be final, at least so far
as the decisions of the Department are now final. The proposed court
might be given authority to certify questions of law in matters of
especial importance to the Supreme Court of the United States or the
court of appeals for the District of Columbia for decision. The
creation of such a tribunal would expedite the disposal of cases and
insure decisions of a more satisfactory character. The registers and
receivers who originally hear and decide these disputes should be
invested with authority to compel witnesses to attend and testify
before them.

Though the condition of the Indians shows a steady and healthy progress,
their situation is not satisfactory at all points. Some of them to whom
allotments of land have been made are found to be unable or disinclined
to follow agricultural pursuits or to otherwise beneficially manage
their land. This is especially true of the Cheyennes and Arapahoes, who,
as it appears by reports of their agent, have in many instances never
been located upon their allotments, and in some cases do not even know
where their allotments are. Their condition has deteriorated. They are
not self-supporting and they live in camps and spend their time in
idleness.

I have always believed that allotments of reservation lands to Indians
in severalty should be made sparingly, or at least slowly, and with the
utmost caution. In these days, when white agriculturists and stock
raisers of experience and intelligence find their lot a hard one, we
ought not to expect Indians, unless far advanced in civilization and
habits of industry, to support themselves on the small tracts of land
usually allotted to them.

If the self-supporting scheme by allotment fails, the wretched
pauperism of the allottees which results is worse than their original
condition of regulated dependence. It is evident that the evil
consequences of ill-advised allotment are intensified in cases where
the false step can not be retraced on account of the purchase by the
Government of reservation lands remaining after allotments are made and
the disposition of such remaining lands to settlers or purchasers from
the Government.

I am convinced that the proper solution of the Indian problem and the
success of every step taken in that direction depend to a very large
extent upon the intelligence and honesty of the reservation agents and
the interest they have in their work. An agent fitted for his place can
do much toward preparing the Indians under his charge for citizenship
and allotment of their lands, and his advice as to any matter
concerning their welfare will not mislead. An unfit agent will make no
effort to advance the Indians on his reservation toward civilization or
preparation for allotment of lands in severalty, and his opinion as to
their condition in this and other regards is heedless and valueless.

The indications are that the detail of army officers as Indian agents
will result in improved management on the reservations.

Whenever allotments are made and any Indian on the reservation has
previously settled upon a lot and cultivated it or shown a disposition
to improve it in any way, such lot should certainly be allotted to him,
and this should be made plainly obligatory by statute.

In the light of experience and considering the uncertainty of the
Indian situation and its exigencies in the future, I am not only
disposed to be very cautious in making allotments, but I incline to
agree with the Secretary of the Interior in the opinion that when
allotments are made the balance of reservation land remaining after
allotment, instead of being bought by the Government from the Indians
and opened for settlement with such scandals and unfair practices as
seem unavoidable, should remain for a time at least as common land or
be sold by the Government on behalf of the Indians in an orderly way
and at fixed prices, to be determined by its location and desirability,
and that the proceeds, less expenses, should be held in trust for the
benefit of the Indian proprietors.

The intelligent Indian-school management of the past year has been
followed by gratifying results. Efforts have been made to advance the
work in a sound and practical manner. Five institutes of Indian
teachers have been held during the year, and have proved very
beneficial through the views exchanged and methods discussed
particularly applicable to Indian education.

Efforts are being made in the direction of a gradual reduction of the
number of Indian contract schools, so that in a comparatively short
time they may give way altogether to Government schools, and it is
hoped that the change may be so gradual as to be perfected without too
great expense to the Government or undue disregard of investments made
by those who have established and are maintaining such contract schools.

The appropriation for the current year, ending June 30, 1895,
applicable to the ordinary expenses of the Indian service amounts to
$6,733,003.18, being less by $663,240.64 than the sum appropriated on
the same account for the previous year.

At the close of the last fiscal year, on the 30th day of June, 1894,
there were 969,544 persons on our pension rolls, being a net increase
of 3,532 over the number reported at the end of the previous year.

These pensioners may be classified as follows: Soldiers and sailors
survivors of all wars, 753,968; widows and relatives of deceased
soldiers, 215,162; army nurses in the War of the Rebellion, 414. Of
these pensioners 32,039 are surviving soldiers of Indian and other wars
prior to the late Civil War and the widows or relatives of such
soldiers.

The remainder, numbering 937,505, are receiving pensions on account of
the rebellion, and of these 469,344 are on the rolls under the
authority of the act of June 27, 1890, sometimes called the
dependent-pension law.

The total amount expended for pensions during the year was
$139,804,461.05, leaving an unexpended balance from the sum
appropriated of $25,205,712.65.

The sum necessary to meet pension expenditures for the year ending June
30, 1896, is estimated at $140,000,000.

The Commissioner of Pensions is of the opinion that the year 1895,
being the thirtieth after the close of the War of the Rebellion, must,
according to all sensible human calculation, see the highest limit of
the pension roll, and that after that year it must begin to decline.

The claims pending in the Bureau have decreased more than 90,000 during
the year. A large proportion of the new claims filed are for increase
of pension by those now on the rolls.

The number of certificates issued was 80,213.

The names dropped from the rolls for all causes during the year
numbered 37,951.

Among our pensioners are 9 widows and 3 daughters of soldiers of the
Revolution and 45 survivors of the War of 1812.

The barefaced and extensive pension frauds exposed under the direction
of the courageous and generous veteran soldier now at the head of the
Bureau leave no room for the claim that no purgation of our pension
rolls was needed or that continued vigilance and prompt action are not
necessary to the same end.

The accusation that an effort to detect pension frauds is evidence of
unfriendliness toward our worthy veterans and a denial of their claims
to the generosity of the Government suggests an unfortunate
indifference to the commission of any offense which has for its motive
the securing of a pension and indicates a willingness to be blind to
the existence of mean and treacherous crimes which play upon demagogic
fears and make sport of the patriotic impulse of a grateful people.

The completion of the Eleventh Census is now in charge of the
Commissioner of Labor. The total disbursements on account of the work
for the fiscal year ending June 30, 1894, amounted to $10,365,676.81.
At the close of the year the number of persons employed in the Census
Office was 679; at present there are about 400. The whole number of
volumes necessary to comprehend the Eleventh Census will be 25, and
they will contain 22,270 printed pages. The assurance is confidently
made that before the close of the present calendar year the material
still incomplete will be practically in hand, and the census can
certainly be closed by the 4th of March, 1895. After that the revision
and proof reading necessary to bring out the volumes will still be
required.

The text of the census volumes has been limited as far as possible to
the analysis of the statistics presented. This method, which is in
accordance with law, has caused more or less friction and in some
instances individual disappointment, for when the Commissioner of Labor
took charge of the work he found much matter on hand which according to
this rule he was compelled to discard. The census is being prepared
according to the theory that it is designed to collect facts and
certify them to the public, not to elaborate arguments or to present
personal views.

The Secretary of Agriculture in his report reviews the operations of
his Department for the last fiscal year and makes recommendations for
the further extension of its usefulness. He reports a saving in
expenditures during the year of $600,000, which is covered back into
the Treasury. This sum is 23 per cent of the entire appropriation.

A special study has been made of the demand for American farm products
in all foreign markets, especially Great Britain, That country received
from the United States during the nine months ending September 30, 1894,
305,910 live beef cattle, valued at $26,500,000, as against 182,611
cattle, valued at $16,634,000, during the same period for 1893.

During the first six months of 1894 the United Kingdom took also
112,000,000 pounds of dressed beef from the United States, valued at
nearly $10,000,000.

The report shows that during the nine months immediately preceding
September 30, 1894, the United States exported to Great Britain
222,676,000 pounds of pork; of apples, 1,900,000 bushels, valued at
$2,500,000, and of horses 2,811, at an average value of $139 per head.
There was a falling off in American wheat exports of 13,500,000 bushels,
and the Secretary is inclined to believe that wheat may not in the
future be the staple export cereal product of our country, but that
corn will continue to advance in importance as an export on account of
the new uses to which it is constantly being appropriated.

The exports of agricultural products from the United States for the
fiscal year ending June 30, 1894, amounted to $628,363,038, being 72.28
per cent of American exports of every description, and the United
Kingdom of Great Britain took more than 54 per cent of all farm
products finding foreign markets.

The Department of Agriculture has undertaken during the year two new
and important lines of research. The first relates to grasses and
forage plants, with the purpose of instructing and familiarizing the
people as to the distinctive grasses of the United States and teaching
them how to introduce valuable foreign forage plants which may be
adapted to this country. The second relates to agricultural soils and
crop production, involving the analyses of samples of soils from all
sections of the American Union, to demonstrate their adaptability to
particular plants and crops. Mechanical analyses of soils may be of
such inestimable utility that it is foremost in the new lines of
agricultural research, and the Secretary therefore recommends that a
division having it in charge be permanently established in the
Department.

The amount appropriated for the Weather Bureau was $951,100. Of that
sum $138,500, or 14 per cent, has been saved and is returned to the
Treasury.

As illustrating the usefulness of this service it may be here stated
that the warnings which were very generally given of two tropical
storms occurring in September and October of the present year resulted
in detaining safely in port 2,305 vessels, valued at $36,183,913, laden
with cargoes of probably still greater value. What is much more
important and gratifying, many human lives on these ships were also
undoubtedly saved.

The appropriation to the Bureau of Animal Industry was $850,000, and
the expenditures for the year were only $495,429.24, thus leaving
unexpended $354,570.76. The inspection of beef animals for export and
interstate trade has been continued, and 12,944,056 head were inspected
during the year, at a cost of 1 3/4 cents per head, against 4 3/4 cents
for 1893. The amount of pork microscopically examined was 35,437,937
pounds, against 20,677,410 pounds in the preceding year. The cost of
this inspection has been diminished from 8 3/4 cents per head in 1893
to 6 1/2 cents in 1894.

The expense of inspecting the pork sold in 1894 to Germany and France
by the United States was $88,922.10. The quantity inspected was greater
by 15,000,000 pounds than during the preceding year, when the cost of
such inspection was $172,367.08. The Secretary of Agriculture
recommends that the law providing for the microscopic inspection of
export and interstate meat be so amended as to compel owners of the
meat inspected to pay the cost of such inspection, and I call attention
to the arguments presented in his report in support of this
recommendation.

The live beef cattle exported and tagged during the year numbered
353,535. This is an increase of 69,533 head over the previous year.

The sanitary inspection of cattle shipped to Europe has cost an average
of 10 3/4 cents for each animal, and the cost of inspecting Southern
cattle and the disinfection of cars and stock yards averages 2.7 cents
per animal.

The scientific inquiries of the Bureau of Animal Industry have
progressed steadily during the year. Much tuberculin and mallein have
been furnished to State authorities for use in the agricultural
colleges and experiment stations for the treatment of tuberculosis and
glanders.

Quite recently this Department has published the results of its
investigations of bovine tuberculosis, and its researches will be
vigorously continued. Certain herds in the District of Columbia will be
thoroughly inspected and will probably supply adequate scope for the
Department to intelligently prosecute its scientific work and furnish
sufficient material for purposes of illustration, description, and
definition.

The sterilization of milk suspected of containing the bacilli of
tuberculosis has been during the year very thoroughly explained in a
leaflet by Dr. D. E. Salmon, the Chief of the Bureau, and given general
circulation throughout the country.

The Office of Experiment Stations, which is a part of the United States
Department of Agriculture, has during the past year engaged itself
almost wholly in preparing for publication works based upon the reports
of agricultural experiment stations and other institutions for
agricultural inquiry in the United States and foreign countries.

The Secretary in his report for 1893 called attention to the fact that
the appropriations made for the support of the experiment stations
throughout the Union were the only moneys taken out of the National
Treasury by act of Congress for which no accounting to Federal
authorities was required. Responding to this suggestion, the Fifty-third
Congress, in making the appropriation for the Department for the
present fiscal year, provided that?

    The Secretary of Agriculture shall prescribe the form of annual
financial statement required by section 3 of said act of March 2, 1887;
shall ascertain whether the expenditures under the appropriation hereby
made are in accordance with the provisions of said act, and shall make
report thereon to Congress.

In obedience to this law the Department of Agriculture immediately sent
out blank forms of expense accounts to each station, and proposes in
addition to make, through trusted experts, systematic examination of
the several stations during each year for the purpose of acquiring by
personal investigation the detailed information necessary to enable the
Secretary of Agriculture to make, as the statute provides, a
satisfactory report to Congress. The boards of management of the
several stations with great alacrity and cordiality have approved the
amendment to the law providing this supervision of their expenditures,
anticipating that it will increase the efficiency of the stations and
protect their directors and managers from loose charges concerning
their use of public funds, besides bringing the Department of
Agriculture into closer and more confidential relations with the
experimental stations, and through their joint service largely
increasing their usefulness to the agriculture of the country.

Acting upon a recommendation contained in the report of 1893, Congress
appropriated $10,000 "to enable the Secretary of Agriculture to
investigate and report upon the nutritive value of the various articles
and commodities used for human food, with special suggestions of full,
wholesome, and edible rations less wasteful and more economical than
those in common use."

Under this appropriation the Department has prepared and now has nearly
ready for distribution an elementary discussion of the nutritive value
and pecuniary economy of food. When we consider that fully one-half of
all the money earned by the wage earners of the civilized world is
expended by them for food, the importance and utility of such an
investigation is apparent.

The Department expended in the fiscal year 1893 $2,354,809.56, and out
of that sum the total amount expended in scientific research was 45.6
per cent. But in the year ending June 30, 1894, out of a total
expenditure of $1,948,988.38, the Department applied 51.8 per cent of
that sum to scientific work and investigation. It is therefore very
plainly observable that the economies which have been practiced in the
administration of the Department have not been at the expense of
scientific research.

The recommendation contained in the report of the Secretary for 1893
that the vicious system of promiscuous free distribution of its
departmental documents be abandoned is again urged. These publications
may well be furnished without cost to public libraries, educational
institutions, and the officers and libraries of States and of the
Federal Government; but from all individuals applying for them a price
covering the cost of the document asked for should be required. Thus
the publications and documents would be secured by those who really
desire them for proper purposes. Half a million of copies of the report
of the Secretary of Agriculture are printed for distribution, at an
annual cost of about $300,000. Large numbers of them are cumbering
storerooms at the Capitol and the shelves of secondhand-book stores
throughout the country. All this labor and waste might be avoided if
the recommendations of the Secretary were adopted.

The Secretary also again recommends that the gratuitous distribution of
seeds cease and that no money be appropriated for that purpose except
to experiment stations. He reiterates the reasons given in his report
for 1893 for discontinuing this unjustifiable gratuity, and I fully
concur in the conclusions which he has reached.

The best service of the statistician of the Department of Agriculture
is the ascertainment, by diligence and care, of the actual and real
conditions, favorable or unfavorable, of the farmers and farms of the
country, and to seek the causes which produce these conditions, to the
end that the facts ascertained may guide their intelligent treatment.

A further important utility in agricultural statistics is found in
their elucidation of the relation of the supply of farm products to the
demand for them in the markets of the United States and of the world.

It is deemed possible that an agricultural census may be taken each
year through the agents of the statistical division of the Department.
Such a course is commended for trial by the chief of that division. Its
scope would be:

(1) The area under each of the more important crops.
(2) The aggregate products of each of such crops.
(3) The quantity of wheat and corn in the hands of farmers at a date
after the spring sowings and plantings and before the beginning of
harvest, and also the quantity of cotton and tobacco remaining in the
hands of planters, either at the same date or at some other designated
time.

The cost of the work is estimated at $500,000.

Owing to the peculiar quality of the statistician's work and the
natural and acquired fitness necessary to its successful prosecution,
the Secretary of Agriculture expresses the opinion that every person
employed in gathering statistics under the chief of that division
should be admitted to that service only after a thorough, exhaustive,
and successful examination at the hands of the United States Civil
Service Commission. This has led him to call for such examination of
candidates for the position of assistant statisticians, and also of
candidates for chiefs of sections in that division.

The work done by the Department of Agriculture is very superficially
dealt with in this communication, and I commend the report of the
Secretary and the very important interests with which it deals to the
careful attention of the Congress.

The advantages to the public service of an adherence to the principles
of civil-service reform are constantly more apparent, and nothing is so
encouraging to those in official life who honestly desire good
government as the increasing appreciation by our people of these
advantages. A vast majority of the voters of the land are ready to
insist that the time and attention of those they select to perform for
them important public duties should not be distracted by doling out
minor offices, and they are growing to be unanimous in regarding party
organization as something that should be used in establishing party
principles instead of dictating the distribution of public places as
rewards of partisan activity.

Numerous additional offices and places have lately been brought within
civil-service rules and regulations, and some others will probably soon
be included.

The report of the Commissioners will be submitted to the Congress, and
I invite careful attention to the recommendations it contains.

I am entirely convinced that we ought not to be longer without a
national board of health or national health officer charged with no
other duties than such as pertain to the protection of our country from
the invasion of pestilence and disease. This would involve the
establishment by such board or officer of proper quarantine precautions,
or the necessary aid and counsel to local authorities on the subject;
prompt advice and assistance to local boards of health or health
officers in the suppression of contagious disease, and in cases where
there are no such local boards or officers the immediate direction by
the national board or officer of measures of suppression; constant and
authentic information concerning the health of foreign countries and
all parts of our own country as related to contagious diseases, and
consideration of regulations to be enforced in foreign ports to prevent
the introduction of contagion into our cities and the measures which
should be adopted to secure their enforcement.

There seems to be at this time a decided inclination to discuss
measures of protection against contagious diseases in international
conference, with a view of adopting means of mutual assistance. The
creation of such a national health establishment would greatly aid our
standing in such conferences and improve our opportunities to avail
ourselves of their benefits.

I earnestly recommend the inauguration of a national board of health or
similar national instrumentality, believing the same to be a needed
precaution against contagious disease and in the interest of the safety
and health of our people.

By virtue of a statute of the United States passed in 1888 I appointed
in July last Hon. John D. Kernan, of the State of New York, and Hon.
Nicholas E. Worthington, of the State of Illinois, to form, with Hon.
Carroll D. Wright, Commissioner of Labor, who was designated by said
statute, a commission for the purpose of making careful inquiry into
the causes of the controversies between certain railroads and their
employees which had resulted in an extensive and destructive strike,
accompanied by much violence and dangerous disturbance, with
considerable loss of life and great destruction of property.

The report of the commissioners has been submitted to me and will be
transmitted to the Congress with the evidence taken upon their
investigation.

Their work has been well done, and their standing and intelligence give
assurance that the report and suggestions they make are worthy of
careful consideration.

The tariff act passed at the last session of the Congress needs
important amendments if it is to be executed effectively and with
certainty. In addition to such necessary amendments as will not change
rates of duty, I am still very decidedly in favor of putting coal and
iron upon the free list.

So far as the sugar schedule is concerned, I would be glad, under
existing aggravations, to see every particle of differential duty in
favor of refined sugar stricken out of our tariff law. If with all the
favor now accorded the sugar-refining interest in our tariff laws it
still languishes to the extent of closed refineries and thousands of
discharged workmen, it would seem to present a hopeless case for
reasonable legislative aid. Whatever else is done or omitted, I
earnestly repeat here the recommendation I have made in another portion
of this communication, that the additional duty of one-tenth of a cent
per pound laid upon sugar imported from countries paying a bounty on
its export be abrogated. It seems to me that exceedingly important
considerations point to the propriety of this amendment.

With the advent of a new tariff policy not only calculated to relieve
the consumers of our land in the cost of their daily life, but to
invite a better development of American thrift and create for us closer
and more profitable commercial relations with the rest of the world, it
follows as a logical and imperative necessity that we should at once
remove the chief if not the only obstacle which has so long prevented
our participation in the foreign carrying trade of the sea. A tariff
built upon the theory that it is well to check imports and that a home
market should bound the industry and effort of American producers was
fitly supplemented by a refusal to allow American registry to vessels
built abroad, though owned and navigated by our people, thus exhibiting
a willingness to abandon all contest for the advantages of American
transoceanic carriage. Our new tariff policy, built upon the theory
that it is well to encourage such importations as our people need, and
that our products and manufactures should find markets in every part of
the habitable globe, is consistently supplemented by the greatest
possible liberty to our citizens in the ownership and navigation of
ships in which our products and manufactures may be transported. The
millions now paid to foreigners for carrying American passengers and
products across the sea should be turned into American hands.
Shipbuilding, which has been protected to strangulation, should be
revived by the prospect of profitable employment for ships when built,
and the American sailor should be resurrected and again take his place?
a sturdy and industrious citizen in time of peace and a patriotic and
safe defender of American interests in the day of conflict.

The ancient provision of our law denying American registry to ships
built abroad and owned by Americans appears in the light of present
conditions not only to be a failure for good at every point, but to be
nearer a relic of barbarism than anything that exists under the
permission of a statute of the United States. I earnestly recommend its
prompt repeal.

During the last month the gold reserved in the Treasury for the purpose
of redeeming the notes of the Government circulating as money in the
hands of the people became so reduced and its further depletion in the
near future seemed so certain that in the exercise of proper care for
the public welfare it became necessary to replenish this reserve and
thus maintain popular faith in the ability and determination of the
Government to meet as agreed its pecuniary obligations.

It would have been well if in this emergency authority had existed to
issue the bonds of the Government bearing a low rate of interest and
maturing within a short period; but the Congress having failed to
confer such authority, resort was necessarily had to the resumption act
of 1875, and pursuant to its provisions bonds were issued drawing
interest at the rate of 5 per cent per annum and maturing ten years
after their issue, that being the shortest time authorized by the act.
I am glad to say, however, that on the sale of these bonds the premium
received operated to reduce the rate of interest to be paid by the
Government to less than 3 per cent.

Nothing could be worse or further removed from sensible finance than
the relations existing between the currency the Government has issued,
the gold held for its redemption, and the means which must be resorted
to for the purpose of replenishing such redemption fund when impaired.
Even if the claims upon this fund were confined to the obligations
originally intended and if the redemption of these obligations meant
their cancellation, the fund would be very small. But these obligations
when received and redeemed in gold are not canceled, but are reissued
and may do duty many times by way of drawing gold from the Treasury.
Thus we have an endless chain in operation constantly depleting the
Treasury's gold and never near a final rest. As if this was not bad
enough, we have, by a statutory declaration that it is the policy of
the Government to maintain the parity between gold and silver, aided
the force and momentum of this exhausting process and added largely to
the currency obligations claiming this peculiar gold redemption. Our
small gold reserve is thus subject to drain from every side. The
demands that increase our danger also increase the necessity of
protecting this reserve against depletion, and it is most
unsatisfactory to know that the protection afforded is only a temporary
palliation.

It is perfectly and palpably plain that the only way under present
conditions by which this reserve when dangerously depleted can be
replenished is through the issue and sale of the bonds of the
Government for gold, and yet Congress has not only thus far declined to
authorize the issue of bonds best suited to such a purpose, but there
seems a disposition in some quarters to deny both the necessity and
power for the issue of bonds at all.

I can not for a moment believe that any of our citizens are
deliberately willing that their Government should default in its
pecuniary obligations or that its financial operations should be
reduced to a silver basis. At any rate, I should not feel that my duty
was done if I omitted any effort I could make to avert such a calamity.
As long, therefore, as no provision is made for the final redemption or
the putting aside of the currency obligation now used to repeatedly and
constantly draw from the Government its gold, and as long as no better
authority for bond issues is allowed than at present exists, such
authority will be utilized whenever and as often as it becomes
necessary to maintain a sufficient gold reserve, and in abundant time
to save the credit of our country and make good the financial
declarations of our Government.

Questions relating to our banks and currency are closely connected with
the subject just referred to, and they also present some unsatisfactory
features. Prominent among them are the lack of elasticity in our
currency circulation and its frequent concentration in financial
centers when it is most needed in other parts of the country.

The absolute divorcement of the Government from the business of banking
is the ideal relationship of the Government to the circulation of the
currency of the country.

This condition can not be immediately reached, but as a step in that
direction and as a means of securing a more elastic currency and
obviating other objections to the present arrangement of bank
circulation the Secretary of the Treasury presents in his report a
scheme modifying present banking laws and providing for the issue of
circulating notes by State banks free from taxation under certain
limitations.

The Secretary explains his plan so plainly and its advantages are
developed by him with such remarkable clearness that any effort on my
part to present argument in its support would be superfluous. I shall
therefore content myself with an unqualified indorsement of the
Secretary's proposed changes in the law and a brief and imperfect
statement of their prominent features. It is proposed to repeal all
laws providing for the deposit of United States bonds as security for
circulation; to permit national banks to issue circulating notes not
exceeding in amount 75 per cent of their paid-up and unimpaired capital,
provided they deposit with the Government as a guaranty fund, in United
States legal-tender notes, including Treasury notes of 1890, a sum
equal in amount to 30 per cent of the notes they desire to issue, this
deposit to be maintained at all times, but whenever any bank retires
any part of its circulation a proportional part of its guaranty fund
shall be returned to it; to permit the Secretary of the Treasury to
prepare and keep on hand ready for issue in case an increase in
circulation is desired blank national-bank notes for each bank having
circulation and to repeal the provisions of the present law imposing
limitations and restrictions upon banks desiring to reduce or increase
their circulation, thus permitting such increase or reduction within
the limit of 75 per cent of capital to be quickly made as emergencies
arise.

In addition to the guaranty fund required, it is proposed to provide a
safety fund for the immediate redemption of the circulating notes of
failed banks by imposing a small annual tax, say one-half of 1 per cent,
upon the average circulation of each bank until the fund amounts to 5
per cent of the total circulation outstanding. When a bank fails its
guaranty fund is to be paid into this safety fund and its notes are to
be redeemed in the first instance from such safety fund thus augmented,
any impairment of such fund caused thereby to be made good from the
immediately available cash assets of said bank, and if these should be
insufficient such impairment to be made good by pro rata assessment
among the other banks, their contributions constituting a first lien
upon the assets of the failed bank in favor of the contributing banks.
As a further security it is contemplated that the existing provision
fixing the individual liability of stockholders is to be retained and
the bank's indebtedness on account of its circulating notes is to be
made a first lien on all its assets.

For the purpose of meeting the expense of printing notes, official
supervision, cancellation, and other like charges there shall be
imposed a tax of say one-half of 1 per cent per annum upon the average
amount of notes in circulation.

It is further provided that there shall be no national-bank notes
issued of a less denomination than $10; that each national bank, except
in case of a failed bank, shall redeem or retire its notes in the first
instance at its own office or at agencies to be designated by it, and
that no fixed reserve need be maintained on account of deposits.

Another very important feature of this plan is the exemption of State
banks from taxation by the United States in cases where it is shown to
the satisfaction of the Secretary of the Treasury and Comptroller of
the Currency by banks claiming such exemption that they have not had
outstanding their circulating notes exceeding 75 per cent of their
paid-up and unimpaired capital; that their stockholders are
individually liable for the redemption of their circulating notes to
the full extent of their ownership of stock; that the liability of said
banks upon their circulating notes constitutes under their State law a
first lien upon their assets; that such banks have kept and maintained
a guaranty fund in United States legal-tender notes, including Treasury
notes of 1890, equal to 30 per cent of their outstanding circulating
notes, and that such banks have promptly redeemed their circulating
notes when presented at their principal or branch offices.

It is quite likely that this scheme may be usefully amended in some of
its details, but I am satisfied it furnishes a basis for a very great
improvement in our present banking and currency system.

I conclude this communication fully appreciating that the
responsibility for all legislation affecting the people of the United
States rests upon their representatives in the Congress, and assuring
them that, whether in accordance with recommendations I have made or
not, I shall be glad to cooperate in perfecting any legislation that
tends to the prosperity and welfare of our country.

***

State of the Union Address
by Grover Cleveland
December 2, 1895


To the Congress of the United States:

The present assemblage of the legislative branch of our Government
occurs at a time when the interests of our people and the needs of the
country give especial prominence to the condition of our foreign
relations and the exigencies of our national finances. The reports of
the heads of the several administrative Departments of the Government
fully and plainly exhibit what has been accomplished within the scope
of their respective duties and present such recommendations for the
betterment of our country's condition as patriotic and intelligent
labor and observation suggest.

I therefore deem my executive duty adequately performed at this time by
presenting to the Congress the important phases of our situation as
related to our intercourse with foreign nations and a statement of the
financial problems which confront us, omitting, except as they are
related to these topics, any reference to departmental operations.

I earnestly invite, however, not only the careful consideration but the
severely critical scrutiny of the Congress and my fellow-countrymen to
the reports concerning these departmental operations. If justly and
fairly examined, they will furnish proof of assiduous and painstaking
care for the public welfare. I press the recommendations they contain
upon the respectful attention of those charged with the duty of
legislation, because I believe their adoption would promote the
people's good.

By amendatory tariff legislation in January last the Argentine Republic,
recognizing the value of the large market opened to the free
importation of its wools under our last tariff act, has admitted
certain products of the United States to entry at reduced duties. It is
pleasing to note that the efforts we have made to enlarge the exchanges
of trade on a sound basis of mutual benefit are in this instance
appreciated by the country from which our woolen factories draw their
needful supply of raw material.

The Missions boundary dispute between the Argentine Republic and Brazil,
referred to the President of the United States as arbitrator during the
term of my predecessor, and which was submitted to me for determination,
resulted in an award in favor of Brazil upon the historical and
documentary evidence presented, thus ending a long-protracted
controversy and again demonstrating the wisdom and desirability of
settling international boundary disputes by recourse to friendly
arbitration.

Negotiations are progressing for a revival of the United States and
Chilean Claims Commission, whose work was abruptly terminated last year
by the expiration of the stipulated time within which awards could be
made.

The resumption of specie payments by Chile is a step of great interest
and importance both in its direct consequences upon her own welfare and
as evincing the ascendency of sound financial principles in one of the
most influential of the South American Republics.

The close of the momentous struggle between China and Japan, while
relieving the diplomatic agents of this Government from the delicate
duty they undertook at the request of both countries of rendering such
service to the subjects of either belligerent within the territorial
limits of the other as our neutral position permitted, developed a
domestic condition in the Chinese Empire which has caused much anxiety
and called for prompt and careful attention. Either as a result of a
weak control by the central Government over the provincial
administrations, following a diminution of traditional governmental
authority under the stress of an overwhelming national disaster, or as
a manifestation upon good opportunity of the aversion of the Chinese
population to all foreign ways and undertakings, there have occurred in
widely separated provinces of China serious outbreaks of the old
fanatical spirit against foreigners, which, unchecked by the local
authorities, if not actually connived at by them, have culminated in
mob attacks on foreign missionary stations, causing much destruction of
property and attended with personal injuries as well as loss of life.

Although but one American citizen was reported to have been actually
wounded, and although the destruction of property may have fallen more
heavily upon the missionaries of other nationalities than our own, it
plainly behooved this Government to take the most prompt and decided
action to guard against similar or perhaps more dreadful calamities
befalling the hundreds of American mission stations which have grown up
throughout the interior of China under the temperate rule of toleration,
custom, and imperial edict. The demands of the United States and other
powers for the degradation and punishment of the responsible officials
of the respective cities and provinces who by neglect or otherwise had
permitted uprisings, and for the adoption of stern measures by the
Emperor's Government for the protection of the life and property of
foreigners, were followed by the disgrace and dismissal of certain
provincial officials found derelict in duty and the punishment by death
of a number of those adjudged guilty of actual participation in the
outrages.

This Government also insisted that a special American commission should
visit the province where the first disturbances occurred for the
purpose of investigation. The latter commission, formed after much
opposition, has gone overland from Tientsin, accompanied by a suitable
Chinese escort, and by its demonstration of the readiness and ability
of our Government to protect its citizens will act, it is believed, as
a most influential deterrent of any similar outbreaks.

The energetic steps we have thus taken are all the more likely to
result in future safety to our citizens in China because the Imperial
Government is, I am persuaded, entirely convinced that we desire only
the liberty and protection of our own citizens and redress for any
wrongs they may have suffered, and that we have no ulterior designs or
objects, political or otherwise. China will not forget either our
kindly service to her citizens during her late war nor the further fact
that, while furnishing all the facilities at our command to further the
negotiation of a peace between her and Japan, we sought no advantages
and interposed no counsel.

The Governments of both China and Japan have, in special dispatches
transmitted through their respective diplomatic representatives,
expressed in a most pleasing manner their grateful appreciation of our
assistance to their citizens during the unhappy struggle and of the
value of our aid in paving the way to their resumption of peaceful
relations.

The customary cordial relations between this country and France have
been undisturbed, with the exception that a full explanation of the
treatment of John L. Waller by the expeditionary military authorities
of France still remains to be given. Mr. Waller, formerly United States
consul at Tamatav, remained in Madagascar after his term of office
expired, and was apparently successful in procuring business
concessions from the Hovas of greater or less value. After the
occupation of Tamatav and the declaration of martial law by the French
he was arrested upon various charges, among them that of communicating
military information to the enemies of France, was tried and convicted
by a military tribunal, and sentenced to twenty years' imprisonment.

Following the course justified by abundant precedents, this Government
requested from that of France the record of the proceedings of the
French tribunal which resulted in Mr. Waller's condemnation. This
request has been complied with to the extent of supplying a copy of the
official record, from which appear the constitution and organization of
the court, the charges as formulated, and the general course and result
of the trial, and by which it is shown that the accused was tried in
open court and was defended by counsel; but the evidence adduced in
support of the charges, which was not received by the French minister
for foreign affairs till the first week in October, has thus far been
withheld, the French Government taking the ground that its production
in response to our demand would establish a bad precedent. The efforts
of our ambassador to procure it, however, though impeded by recent
changes in the French ministry, have not been relaxed, and it is
confidently expected that some satisfactory solution of the matter will
shortly be reached. Meanwhile it appears that Mr. Waller's confinement
has every alleviation which the state of his health and all the other
circumstances of the case demand or permit.

In agreeable contrast to the difference above noted respecting a matter
of common concern, where nothing is sought except such a mutually
satisfactory outcome as the true merits of the case require, is the
recent resolution of the French Chambers favoring the conclusion of a
permanent treaty of arbitration between the two countries.

An invitation has been extended by France to the Government and people
of the United States to participate in a great international exposition
at Paris in 1900 as a suitable commemoration of the close of this the
world's marvelous century of progress. I heartily recommend its
acceptance, together with such legislation as will adequately provide
for a due representation of this Government and its people on the
occasion.

Our relations with the States of the German Empire are in some aspects
typical of a condition of things elsewhere found in countries whose
productions and trade are similar to our own. The close rivalries of
competing industries; the influence of the delusive doctrine that the
internal development of a nation is promoted and its wealth increased
by a policy which, in undertaking to reserve its home markets for the
exclusive use of its own producers, necessarily obstructs their sales
in foreign markets and prevents free access to the products of the
world; the desire to retain trade in time-worn ruts, regardless of the
inexorable laws of new needs and changed conditions of demand and
supply, and our own halting tardiness in inviting a freer exchange of
commodities, and by this means imperiling our footing in the external
markets naturally open to us, have created a situation somewhat
injurious to American export interests, not only in Germany, where they
are perhaps most noticeable, but in adjacent countries. The exports
affected are largely American cattle and other food products, the
reason assigned for unfavorable discrimination being that their
consumption is deleterious to the public health. This is all the more
irritating in view of the fact that no European state is as jealous of
the excellence and wholesomeness of its exported food supplies as the
United States, nor so easily able, on account of inherent soundness, to
guarantee those qualities.

Nor are these difficulties confined to our food products designed for
exportation. Our great insurance companies, for example, having built
up a vast business abroad and invested a large share of their gains in
foreign countries in compliance with the local laws and regulations
then existing, now find themselves within a narrowing circle of onerous
and unforeseen conditions, and are confronted by the necessity of
retirement from a field thus made unprofitable, if, indeed, they are
not summarily expelled, as some of them have lately been from Prussia.

It is not to be forgotten that international trade can not be one-sided.
Its currents are alternating, and its movements should be honestly
reciprocal. Without this it almost necessarily degenerates into a
device to gain advantage or a contrivance to secure benefits with only
the semblance of a return. In our dealings with other nations we ought
to be open-handed and scrupulously fair. This should be our policy as a
producing nation, and it plainly becomes us as a people who love
generosity and the moral aspects of national good faith and reciprocal
forbearance.

These considerations should not, however, constrain us to submit to
unfair discrimination nor to silently acquiesce in vexatious hindrances
to the enjoyment of our share of the legitimate advantages of proper
trade relations. If an examination of the situation suggests such
measures on our part as would involve restrictions similar to those
from which we suffer, the way to such a course is easy. It should,
however, by no means be lightly entered upon, since the necessity for
the inauguration of such a policy would be regretted by the best
sentiment of our people and because it naturally and logically might
lead to consequences of the gravest character.

I take pleasure in calling to your attention the encomiums bestowed on
those vessels of our new Navy which took part in the notable ceremony
of the opening of the Kiel Canal. It was fitting that this
extraordinary achievement of the newer German nationality should be
celebrated in the presence of America's exposition of the latest
developments of the world's naval energy.

Our relations with Great Britain, always intimate and important, have
demanded during the past year even a greater share of consideration
than is usual.

Several vexatious questions were left undetermined by the decision of
the Bering Sea Arbitration Tribunal. The application of the principles
laid down by that august body has not been followed by the results they
were intended to accomplish, either because the principles themselves
lacked in breadth and definiteness or because their execution has been
more or less imperfect. Much correspondence has been exchanged between
the two Governments on the subject of preventing the exterminating
slaughter of seals. The insufficiency of the British patrol of Bering
Sea under the regulations agreed on by the two Governments has been
pointed out, and yet only two British ships have been on police duty
during this season in those waters.

The need of a more effective enforcement of existing regulations as
well as the adoption of such additional regulations as experience has
shown to be absolutely necessary to carry out the intent of the award
have been earnestly urged upon the British Government, but thus far
without effective results. In the meantime the depletion of the seal
herds by means of pelagic hunting has so alarmingly progressed that
unless their slaughter is at once effectively checked their extinction
within a few years seems to be a matter of absolute certainty.

The understanding by which the United States was to pay and Great
Britain to receive a lump sum of $425,000 in full settlement of all
British claims for damages arising from our seizure of British sealing
vessels unauthorized under the award of the Paris Tribunal of
Arbitration was not confirmed by the last Congress, which declined to
make the necessary appropriation. I am still of the opinion that this
arrangement was a judicious and advantageous one for the Government,
and I earnestly recommend that it be again considered and sanctioned.
If, however, this does not meet with the favor of Congress, it
certainly will hardly dissent from the proposition that the Government
is bound by every consideration of honor and good faith to provide for
the speedy adjustment of these claims by arbitration as the only other
alternative. A treaty of arbitration has therefore been agreed upon,
and will be immediately laid before the Senate, so that in one of the
modes suggested a final settlement may be reached.

Notwithstanding that Great Britain originated the proposal to enforce
international rules for the prevention of collisions at sea, based on
the recommendations of the Maritime Conference of Washington, and
concurred in, suggesting March 11, 1895, as the date to be set by
proclamation for carrying these rules into general effect, Her
Majesty's Government, having encountered opposition on the part of
British shipping interests, announced its inability to accept that date,
which was consequently canceled. The entire matter is still in abeyance,
without prospect of a better condition in the near future.

The commissioners appointed to mark the international boundary in
Passamaquoddy Bay according to the description of the treaty of Ghent
have not yet fully agreed.

The completion of the preliminary survey of that Alaskan boundary which
follows the contour of the coast from the southernmost point of Prince
of Wales Island until it strikes the one hundred and forty-first
meridian at or near the summit of Mount St. Elias awaits further
necessary appropriation, which is urgently recommended. This survey was
undertaken under the provisions of the convention entered into by this
country and Great Britain July 22, 1892, and the supplementary
convention of February 3, 1894.

As to the remaining section of the Alaskan boundary, which follows the
one hundred and forty-first meridian northwardly from Mount St. Elias
to the Frozen Ocean, the settlement of which involves the physical
location of the meridian mentioned, no conventional agreement has yet
been made. The ascertainment of a given meridian at a particular point
is a work requiring much time and careful observations and surveys.
Such observations and surveys were undertaken by the United States
Coast and Geodetic Survey in 1890 and 1891, while similar work in the
same quarters, under British auspices, is believed to give nearly
coincident results; but these surveys have been independently conducted,
and no international agreement to mark those or any other parts of the
one hundred and forty-first meridian by permanent monuments has yet
been made. In the meantime the valley of the Yukon is becoming a
highway through the hitherto unexplored wilds of Alaska, and abundant
mineral wealth has been discovered in that region, especially at or
near the junction of the boundary meridian with the Yukon and its
tributaries. In these circumstances it is expedient, and, indeed,
imperative, that the jurisdictional limits of the respective
Governments in this new region be speedily determined. Her Britannic
Majesty's Government has proposed a joint delimitation of the one
hundred and forty-first meridian by an international commission of
experts, which, if Congress will authorize it and make due provision
therefor, can be accomplished with no unreasonable delay. It is
impossible to overlook the vital importance of continuing the work
already entered upon and supplementing it by further effective measures
looking to the exact location of this entire boundary line.

I call attention to the unsatisfactory delimitation of the respective
jurisdictions of the United States and the Dominion of Canada in the
Great Lakes at the approaches to the narrow waters that connect them.
The waters in question are frequented by fishermen of both
nationalities and their nets are there used. Owing to the uncertainty
and ignorance as to the true boundary, vexations disputes and injurious
seizures of boats and nets by Canadian cruisers often occur, while any
positive settlement thereof by an accepted standard is not easily to be
reached. A joint commission to determine the line in those quarters on
a practical basis, by measured courses following range marks on shore,
is a necessity for which immediate provision should be made.

It being apparent that the boundary dispute between Great Britain and
the Republic of Venezuela concerning the limits of British Guiana was
approaching an acute stage, a definite statement of the interest and
policy of the United States as regards the controversy seemed to be
required both on its own account and in view of its relations with the
friendly powers directly concerned. In July last, therefore, a dispatch
was addressed to our ambassador at London for communication to the
British Government in which the attitude of the United States was fully
and distinctly set forth. The general conclusions therein reached and
formulated are in substance that the traditional and established policy
of this Government is firmly opposed to a forcible increase by any
European power of its territorial possessions on this continent; that
this policy is as well rounded in principle as it is strongly supported
by numerous precedents; that as a consequence the United States is
bound to protest against the enlargement of the area of British Guiana
in derogation of the rights and against the will of Venezuela; that
considering the disparity in strength of Great Britain and Venezuela
the territorial dispute between them can be reasonably settled only by
friendly and impartial arbitration, and that the resort to such
arbitration should include the whole controversy, and is not satisfied
if one of the powers concerned is permitted to draw an arbitrary line
through the territory in debate and to declare that it will submit to
arbitration only the portion lying on one side of it. In view of these
conclusions, the dispatch in question called upon the British
Government for a definite answer to the question whether it would or
would not submit the territorial controversy between itself and
Venezuela in its entirety to impartial arbitration. The answer of the
British Government has not yet been received, but is expected shortly,
when further communication on the subject will probably be made to the
Congress.

Early in January last an uprising against the Government of Hawaii was
promptly suppressed. Martial law was forthwith proclaimed and numerous
arrests were made of persons suspected of being in sympathy with the
Royalist party. Among these were several citizens of the United States,
who were either convicted by a military court and sentenced to death,
imprisonment, or fine or were deported without trial. The United States,
while denying protection to such as had taken the Hawaiian oath of
allegiance, insisted that martial law, though altering the forms of
justice, could not supersede justice itself, and demanded stay of
execution until the proceedings had been submitted to this Government
and knowledge obtained therefrom that our citizens had received fair
trial. The death sentences were subsequently commuted or were remitted
on condition of leaving the islands. The cases of certain Americans
arrested and expelled by arbitrary order without formal charge or trial
have had attention, and in some instances have been found to justify
remonstrance and a claim for indemnity, which Hawaii has not thus far
conceded.

Mr. Thurston, the Hawaiian minister, having furnished this Government
abundant reason for asking that he be recalled, that course was pursued,
and his successor has lately been received.

The deplorable lynching of several Italian laborers in Colorado was
naturally followed by international representations, and I am happy to
say that the best efforts of the State in which the outrages occurred
have been put forth to discover and punish the authors of this
atrocious crime. The dependent families of some of the unfortunate
victims invite by their deplorable condition gracious provision for
their needs.

These manifestations against helpless aliens may be traced through
successive stages to the vicious padroni system, which, unchecked by
our immigration and contract-labor statutes, controls these workers
from the moment of landing on our shores and farms them out in distant
and often rude regions, where their cheapening competition in the
fields of bread-winning toil brings them into collision with other
labor interests. While welcoming, as we should, those who seek our
shores to merge themselves in our body politic and win personal
competence by honest effort, we can not regard such assemblages of
distinctively alien laborers, hired out in the mass to the profit of
alien speculators and shipped hither and thither as the prospect of
gain may dictate, as otherwise than repugnant to the spirit of our
civilization, deterrent to individual advancement, and hindrances to
the building up of stable communities resting upon the wholesome
ambitions of the citizen and constituting the prime factor in the
prosperity and progress of our nation. If legislation can reach this
growing evil, it certainly should be attempted.

Japan has furnished abundant evidence of her vast gain in every trait
and characteristic that constitutes a nation's greatness. We have
reason for congratulation in the fact that the Government of the United
States, by the exchange of liberal treaty stipulations with the new
Japan, was the first to recognize her wonderful advance and to extend
to her the consideration and confidence due to her national
enlightenment and progressive character.

The boundary dispute which lately threatened to embroil Guatemala and
Mexico has happily yielded to pacific counsels, and its determination
has, by the joint agreement of the parties, been submitted to the sole
arbitration of the United States minister to Mexico.

The commission appointed under the convention of February 18, 1889, to
set new monuments along the boundary between the United States and
Mexico has completed its task.

As a sequel to the failure of a scheme for the colonization in Mexico
of negroes, mostly immigrants from Alabama under contract, a great
number of these helpless and suffering people, starving and smitten
with contagious disease, made their way or were assisted to the
frontier, where, in wretched plight, they were quarantined by the Texas
authorities. Learning of their destitute condition, I directed rations
to be temporarily furnished them through the War Department. At the
expiration of their quarantine they were conveyed by the railway
companies at comparatively nominal rates to their homes in Alabama,
upon my assurance, in the absence of any fund available for the cost of
their transportation, that I would recommend to Congress an
appropriation for its payment. I now strongly urge upon Congress the
propriety of making such an appropriation. It should be remembered that
the measures taken were dictated not only by sympathy and humanity, but
by a conviction that it was not compatible with the dignity of this
Government that so large a body of our dependent citizens should be
thrown for relief upon the charity of a neighboring state.

In last year's message I narrated at some length the jurisdictional
questions then freshly arisen in the Mosquito Indian Strip of Nicaragua.
Since that time, by the voluntary act of the Mosquito Nation, the
territory reserved to them has been incorporated with Nicaragua, the
Indians formally subjecting themselves to be governed by the general
laws and regulations of the Republic instead of by their own customs
and regulations, and thus availing themselves of a privilege secured to
them by the treaty between Nicaragua and Great Britain of January 28,
1860.

After this extension of uniform Nicaraguan administration to the
Mosquito Strip, the case of the British vice-consul, Hatch, and of
several of his countrymen who had been summarily expelled from
Nicaragua and treated with considerable indignity provoked a claim by
Great Britain upon Nicaragua for pecuniary indemnity, which, upon
Nicaragua's refusal to admit liability, was enforced by Great Britain.
While the sovereignty and jurisdiction of Nicaragua was in no way
questioned by Great Britain, the former's arbitrary conduct in regard
to British subjects furnished the ground for this proceeding.

A British naval force occupied without resistance the Pacific seaport
of Corinto, but was soon after withdrawn upon the promise that the sum
demanded would be paid. Throughout this incident the kindly offices of
the United States were invoked and were employed in favor of as
peaceful a settlement and as much consideration and indulgence toward
Nicaragua as were consistent with the nature of the case. Our efforts
have since been made the subject of appreciative and grateful
recognition by Nicaragua.

The coronation of the Czar of Russia at Moscow in May next invites
the ceremonial participation of the United States, and in accordance
with usage and diplomatic propriety our minister to the imperial court
has been directed to represent our Government on the occasion.

Correspondence is on foot touching the practice of Russian consuls
within the jurisdiction of the United States to interrogate citizens as
to their race and religious faith, and upon ascertainment thereof to
deny to Jews authentication of passports or legal documents for use in
Russia. Inasmuch as such a proceeding imposes a disability which in the
case of succession to property in Russia may be found to infringe the
treaty rights of our citizens, and which is an obnoxious invasion of
our territorial jurisdiction, it has elicited fitting remonstrance, the
result of which, it is hoped, will remove the cause of complaint. The
pending claims of sealing vessels of the United States seized in
Russian waters remain unadjusted. Our recent convention with Russia
establishing a modus vivendi as to imperial jurisdiction in such cases
has prevented further difficulty of this nature.

The Russian Government has welcomed in principle our suggestion for a
modus vivendi, to embrace Great Britain and Japan, looking to the
better preservation of seal life in the North Pacific and Bering Sea
and the extension of the protected area defined by the Paris Tribunal
to all Pacific waters north of the thirty-fifth parallel. It is
especially noticeable that Russia favors prohibition of the use of
firearms in seal hunting throughout the proposed area and a longer
closed season for pelagic sealing.

In my last two annual messages I called the attention of the Congress
to the position we occupied as one of the parties to a treaty or
agreement by which we became jointly bound with England and Germany to
so interfere with the government and control of Samoa as in effect to
assume the management of its affairs. On the 9th day of May, 1894, I
transmitted to the Senate a special message, with accompanying
documents, giving information on the subject and emphasizing the
opinion I have at all times entertained, that our situation in this
matter was inconsistent with the mission and traditions of our
Government, in violation of the principles we profess, and in all its
phases mischievous and vexatious.

I again press this subject upon the attention of the Congress and ask
for such legislative action or expression as will lead the way to our
relief from obligations both irksome and unnatural.

Cuba is again gravely disturbed. An insurrection in some respects more
active than the last preceding revolt, which continued from 1868 to
1878, now exists in a large part of the eastern interior of the island,
menacing even some populations on the coast. Besides deranging the
commercial exchanges of the island, of which our country takes the
predominant share, this flagrant condition of hostilities, by arousing
sentimental sympathy and inciting adventurous support among our people,
has entailed earnest effort on the part of this Government to enforce
obedience to our neutrality laws and to prevent the territory of the
United States from being abused as a vantage ground from which to aid
those in arms against Spanish sovereignty.

Whatever may be the traditional sympathy of our countrymen as
individuals with a people who seem to be struggling for larger autonomy
and greater freedom, deepened, as such sympathy naturally must be, in
behalf of our neighbors, yet the plain duty of their Government is to
observe in good faith the recognized obligations of international
relationship. The performance of this duty should not be made more
difficult by a disregard on the part of our citizens of the obligations
growing out of their allegiance to their country, which should restrain
them from violating as individuals the neutrality which the nation of
which they are members is bound to observe in its relations to friendly
sovereign states. Though neither the warmth of our people's sympathy
with the Cuban insurgents, nor our loss and material damage consequent
upon the futile endeavors thus far made to restore peace and order, nor
any shock our humane sensibilities may have received from the cruelties
which appear to especially characterize this sanguinary and fiercely
conducted war, have in the least shaken the determination of the
Government to honestly fulfill every international obligation, yet it
is to be earnestly hoped on every ground that the devastation of armed
conflict may speedily be stayed and order and quiet restored to the
distracted island, bringing in their train the activity and thrift of
peaceful pursuits.

One notable instance of interference by Spain with passing American
ships has occurred. On March 8 last the Allianca, while bound from
Colon to New York, and following the customary track for vessels near
the Cuban shore, but outside the 3-mile limit, was fired upon by a
Spanish gunboat. Protest was promptly made by the United States against
this act as not being justified by a state of war, nor permissible in
respect of vessels on the usual paths of commerce, nor tolerable in
view of the wanton peril occasioned to innocent life and property. The
act was disavowed, with full expression of regret and assurance of
nonrecurrence of such just cause of complaint, while the offending
officer was relieved of his command. Military arrests of citizens of
the United States in Cuba have occasioned frequent reclamations. Where
held on criminal charges their delivery to the ordinary civil
jurisdiction for trial has been demanded and obtained in conformity
with treaty provisions, and where merely detained by way of military
precaution under a proclaimed state of siege, without formulated
accusation, their release or trial has been insisted upon. The right of
American consular officers in the island to prefer protests and demands
in such cases having been questioned by the insular authority, their
enjoyment of the privilege stipulated by treaty for the consuls of
Germany was claimed under the most-favored-nation provision of our own
convention and was promptly recognized.

The long-standing demand of Antonio Maximo Mora against Spain has at
last been settled by the payment, on the 14th of September last, of the
sum originally agreed upon in liquidation of the claim. Its
distribution among the parties entitled to receive it has proceeded as
rapidly as the rights of those claiming the fund could be safely
determined.

The enforcement of differential duties against products of this country
exported to Cuba and Puerto Rico prompted the immediate claim on our
part to the benefit of the minimum tariff of Spain in return for the
most favorable treatment permitted by our laws as regards the
production of Spanish territories. A commercial arrangement was
concluded in January last securing the treatment so claimed.

Vigorous protests against excessive fines imposed on our ships and
merchandise by the customs officers of these islands for trivial errors
have resulted in the remission of such fines in instances where the
equity of the complaint was apparent, though the vexatious practice has
not been wholly discontinued.

Occurrences in Turkey have continued to excite concern. The reported
massacres of Christians in Armenia and the development there and in
other districts of a spirit of fanatic hostility to Christian
influences naturally excited apprehension for the safety of the devoted
men and women who, as dependents of the foreign missionary societies in
the United States, reside in Turkey under the guaranty of law and usage
and in the legitimate performance of their educational and religious
mission. No efforts have been spared in their behalf, and their
protection in person and property has been earnestly and vigorously
enforced by every means within our power.

I regret, however, that an attempt on our part to obtain better
information concerning the true condition of affairs in the disturbed
quarter of the Ottoman Empire by sending thither the United States
consul at Sivas to make investigation and report was thwarted by the
objections of the Turkish Government. This movement on our part was in
no sense meant as a gratuitous entanglement of the United States in the
so-called Eastern question nor as an officious interference with the
right and duty which belong by treaty to certain great European powers
calling for their intervention in political matters affecting the good
government and religious freedom of the non-Mussulman subjects of the
Sultan, but it arose solely from our desire to have an accurate
knowledge of the conditions in our efforts to care for those entitled
to our protection.

The presence of our naval vessels which are now in the vicinity of the
disturbed localities affords opportunities to acquire a measure of
familiarity with the condition of affairs and will enable us to take
suitable steps for the protection of any interests of our countrymen
within reach of our ships that might be found imperiled.

The Ottoman Government has lately issued an imperial irade exempting
forever from taxation an American college for girls at Scutari.
Repeated assurances have also been obtained by our envoy at
Constantinople that similar institutions maintained and administered by
our countrymen shall be secured in the enjoyment of all rights and that
our citizens throughout the Empire shall be protected.

The Government, however, in view of existing facts, is far from relying
upon such assurances as the limit of its duty. Our minister has been
vigilant and alert in affording all possible protection in individual
cases where danger threatened or safety was imperiled. We have sent
ships as far toward the points of actual disturbance as it is possible
for them to go, where they offer refuge to those obliged to flee, and
we have the promise of other powers which have ships in the
neighborhood that our citizens as well as theirs will be received and
protected on board those ships. On the demand of our minister orders
have been issued by the Sultan that Turkish soldiers shall guard and
escort to the coast American refugees.

These orders have been carried out, and our latest intelligence gives
assurance of the present personal safety of our citizens and
missionaries. Though thus far no lives of American citizens have been
sacrificed, there can be no doubt that serious loss and destruction of
mission property have resulted from riotous conflicts and outrageous
attacks.

By treaty several of the most powerful European powers have secured a
right and have assumed a duty not only in behalf of their own citizens
and in furtherance of their own interests, but as agents of the
Christian world. Their right is to enforce such conduct of Turkish
government as will restrain fanatical brutality, and if this fails
their duty is to so interfere as to insure against such dreadful
occurrences in Turkey as have lately shocked civilization. The powers
declare this right and this duty to be theirs alone, and it is
earnestly hoped that prompt and effective action on their part will not
be delayed.

The new consulates at Erzerum and Harpoot, for which appropriation was
made last session, have been provisionally filled by trusted employees
of the Department of State. These appointees, though now in Turkey,
have not yet received their exequaturs.

The arbitration of the claim of the Venezuela Steam Transportation
Company under the treaty of January 19, 1892, between the United States
and Venezuela, resulted in an award in favor of the claimant.

The Government has used its good offices toward composing the
differences between Venezuela on the one hand and France and Belgium on
the other growing out of the dismissal of the representatives of those
powers on the ground of a publication deemed offensive to Venezuela.
Although that dismissal was coupled with a cordial request that other
more personally agreeable envoys be sent in their stead, a rupture of
intercourse ensued and still continues.

In view of the growth of our interests in foreign countries and the
encouraging prospects for a general expansion of our commerce, the
question of an improvement in the consular service has increased in
importance and urgency. Though there is no doubt that the great body of
consular officers are rendering valuable services to the trade and
industries of the country, the need of some plan of appointment and
control which would tend to secure a higher average of efficiency can
not be denied.

The importance of the subject has led the Executive to consider what
steps might properly be taken without additional legislation to answer
the need of a better system of consular appointments. The matter having
been committed to the consideration of the Secretary of State, in
pursuance of his recommendations an Executive order was issued on the
20th of September, 1895, by the terms of which it is provided that
after that date any vacancy in a consulate or commercial agency with an
annual salary or compensation from official fees of not more than
$2,500 or less than $1,000 should be filled either by transfer or
promotion from some other position under the Department of State of a
character tending to qualify the incumbent for the position to be
filled, or by the appointment of a person not under the Department of
State, but having previously served thereunder and shown his capacity
and fitness for consular duty, or by the appointment of a person who,
having been selected by the President and sent to a board for
examination, is found upon such examination to be qualified for the
position. Posts which pay less than $1,000 being usually, on account of
their small compensation, filled by selection from residents of the
locality, it was not deemed practicable to put them under the new
system.

The compensation of $2,500 was adopted as the maximum limit in the
classification for the reason that consular officers receiving more
than that sum are often charged with functions and duties scarcely
inferior in dignity and importance to those of diplomatic agents, and
it was therefore thought best to continue their selection in the
discretion of the Executive without subjecting them to examination
before a board. Excluding 71 places with compensation at present less
than $1,000 and 53 places above the maximum in compensation, the number
of positions remaining within the scope of the order is 196. This
number will undoubtedly be increased by the inclusion of consular
officers whose remuneration in fees, now less than $1,000, will be
augmented with the growth of our foreign commerce and a return to more
favorable business conditions.

In execution of the Executive order referred to the Secretary of State
has designated as a board to conduct the prescribed examinations the
Third Assistant Secretary of State, the Solicitor of the Department of
State, and the Chief of the Consular Bureau, and has specified the
subjects to which such examinations shall relate.

It is not assumed that this system will prove a full measure of
consular reform. It is quite probable that actual experience will show
particulars in which the order already issued may be amended and
demonstrate that for the best results appropriate legislation by
Congress is imperatively required.

In any event, these efforts to improve the consular service ought to be
immediately supplemented by legislation providing for consular
inspection. This has frequently been a subject of Executive
recommendation, and I again urge such action by Congress as will permit
the frequent and thorough inspection of consulates by officers
appointed for that purpose or by persons already in the diplomatic or
consular service. The expense attending such a plan would be
insignificant compared with its usefulness, and I hope the legislation
necessary to set it on foot will be speedily forthcoming.

I am thoroughly convinced that in addition to their salaries our
ambassadors and ministers at foreign courts should be provided by the
Government with official residences. The salaries of these officers are
comparatively small and in most cases insufficient to pay, with other
necessary expenses, the cost of maintaining household establishments in
keeping with their important and delicate functions. The usefulness of
a nation's diplomatic representative undeniably depends much upon the
appropriateness of his surroundings, and a country like ours, while
avoiding unnecessary glitter and show, should be certain that it does
not suffer in its relations with foreign nations through parsimony and
shabbiness in its diplomatic outfit. These considerations and the other
advantages of having fixed and somewhat permanent locations for our
embassies would abundantly justify the moderate expenditure necessary
to carry out this suggestion.

As we turn from a review of our foreign relations to the contemplation
of our national financial situation we are immediately aware that we
approach a subject of domestic concern more important than any other
that can engage our attention, and one at present in such a perplexing
and delicate predicament as to require prompt and wise treatment.

We may well be encouraged to earnest effort in this direction when we
recall the steps already taken toward improving our economic and
financial situation and when we appreciate how well the way has been
prepared for further progress by an aroused and intelligent popular
interest in these subjects.

By command of the people a customs-revenue system designed for the
protection and benefit of favored classes at the expense of the great
mass of our countrymen, and which, while inefficient for the purpose of
revenue, curtailed our trade relations and impeded our entrance to the
markets of the world, has been superseded by a tariff policy which in
principle is based upon a denial of the right of the Government to
obstruct the avenues to our people's cheap living or lessen their
comfort and contentment for the sake of according especial advantages
to favorites, and which, while encouraging our intercourse and trade
with other nations, recognizes the fact that American self-reliance,
thrift, and ingenuity can build up our country's industries and develop
its resources more surely than enervating paternalism.

The compulsory purchase and coinage of silver by the Government,
unchecked and unregulated by business conditions and heedless of our
currency needs, which for more than fifteen years diluted our
circulating medium, undermined confidence abroad in our financial
ability, and at last culminated in distress and panic at home, has been
recently stopped by the repeal of the laws which forced this reckless
scheme upon the country.

The things thus accomplished, notwithstanding their extreme importance
and beneficent effects, fall far short of curing the monetary evils
from which we suffer as a result of long indulgence in ill-advised
financial expedients.

The currency denominated United States notes and commonly known as
greenbacks was issued in large volume during the late Civil War and was
intended originally to meet the exigencies of that period. It will be
seen by a reference to the debates in Congress at the time the laws
were passed authorizing the issue of these notes that their advocates
declared they were intended for only temporary use and to meet the
emergency of war. In almost if not all the laws relating to them some
provision was made contemplating their voluntary or compulsory
retirement. A large quantity of them, however, were kept on foot and
mingled with the currency of the country, so that at the close of the
year 1874 they amounted to $381,999,073.

Immediately after that date, and in January, 1875, a law was passed
providing for the resumption of specie payments, by which the Secretary
of the Treasury was required whenever additional circulation was issued
to national banks to retire United States notes equal in amount to 80
per cent of such additional national-bank circulation until such notes
were reduced to $300,000,000. This law further provided that on and
after the 1st day of January, 1879, the United States notes then
outstanding should be redeemed in coin, and in order to provide and
prepare for such redemption the Secretary of the Treasury was
authorized not only to use any surplus revenues of the Government, but
to issue bonds of the United States and dispose of them for coin and to
use the proceeds for the purposes contemplated by the statute.

In May, 1878, and before the date thus appointed for the redemption and
retirement of these notes, another statute was passed forbidding their
further cancellation and retirement. Some of them had, however, been
previously redeemed and canceled upon the issue of additional national-bank
circulation, as permitted by the law of 1875, so that the amount
outstanding at the time of the passage of the act forbidding their
further retirement was $346,681,016.

The law of 1878 did not stop at distinct prohibition, but contained in
addition the following express provision:

LAnd when any of said notes may be redeemed or be received into the
Treasury under any law from any source whatever, and shall belong to
the United States, they shall not be retired, canceled, or destroyed,
but they shall be reissued and paid out again and kept in circulation.

This was the condition of affairs on the 1st day of January, 1879,
which had been fixed upon four years before as the date for entering
upon the redemption and retirement of all these notes, and for which
such abundant means had been provided. The Government was put in the
anomalous situation of owing to the holders of its notes debts payable
in gold on demand which could neither be retired by receiving such
notes in discharge of obligations due the Government nor canceled by
actual payment in gold. It was forced to redeem without redemption and
to pay without acquittance.

There had been issued and sold $95,500,000 of the bonds authorized by
the resumption act of 1875, the proceeds of which, together with other
gold in the Treasury, created a gold fund deemed sufficient to meet the
demands which might be made upon it for the redemption of the
outstanding United States notes. This fund, together with such other
gold as might be from time to time in the Treasury available for the
same purpose, has been since called our gold reserve, and $100,000,000
has been regarded as an adequate amount to accomplish its object. This
fund amounted on the 1st day of January, 1879, to $114,193,360, and
though thereafter constantly fluctuating it did not fall below that sum
until July, 1892. In April, 1893, for the first time since its
establishment, this reserve amounted to less than $100,000,000,
containing at that date only $97,011,330.

In the meantime, and in July, 1890, an act had been passed directing
larger governmental monthly purchases of silver than had been required
under previous laws, and providing that in payment for such silver
Treasury notes of the United States should be issued payable on demand
in gold or silver coin, at the discretion of the Secretary of the
Treasury. It was, however, declared in the act to be "the established
policy of the United States to maintain the two metals on a parity with
each other upon the present legal ratio or such ratio as may be
provided by law." In view of this declaration it was not deemed
permissible for the Secretary of the Treasury to exercise the
discretion in terms conferred on him by refusing to pay gold on these
notes when demanded, because by such discrimination in favor of the
gold dollar the so-called parity of the two metals would be destroyed
and grave and dangerous consequences would be precipitated by affirming
or accentuating the constantly widening disparity between their actual
values under the existing ratio.

It thus resulted that the Treasury notes issued in payment of silver
purchases under the law of 1890 were necessarily treated as gold
obligations at the option of the holder. These notes on the 1st day of
November, 1893, when the law compelling the monthly purchase of silver
was repealed, amounted to more than $155,000,000. The notes of this
description now outstanding added to the United States notes still
undiminished by redemption or cancellation constitute a volume of gold
obligations amounting to nearly $500,000,000.

These obligations are the instruments which ever since we had a gold
reserve have been used to deplete it.

This reserve, as has been stated, had fallen in April, 1893, to
$97,111,330. It has from that time to the present, with very few and
unimportant upward movements, steadily decreased, except as it has been
temporarily replenished by the sale of bonds.

Among the causes for this constant and uniform shrinkage in this fund
may be mentioned the great falling off of exports under the operation
of the tariff law until recently in force, which crippled our exchange
of commodities with foreign nations and necessitated to some extent the
payment of our balances in gold; the unnatural infusion of silver into
our currency and the increasing agitation for its free and unlimited
coinage, which have created apprehension as to our disposition or
ability to continue gold payments; the consequent hoarding of gold at
home and the stoppage of investments of foreign capital, as well as the
return of our securities already sold abroad; and the high rate of
foreign exchange, which induced the shipment of our gold to be drawn
against as a matter of speculation.

In consequence of these conditions the gold reserve on the 1st day of
February, 1894, was reduced to $65,438,377, having lost more than
$31,000,000 during the preceding nine months, or since April, 1893. Its
replenishment being necessary and no other manner of accomplishing it
being possible, resort was had to the issue and sale of bonds provided
for by the resumption act of 1875. Fifty millions of these bonds were
sold, yielding $58,633,295.71, which was added to the reserve fund of
gold then on hand. As a result of this operation this reserve, which
had suffered constant and large withdrawals in the meantime, stood on
the 6th day of March, 1894, at the sum of $107,446,802. Its depletion
was, however, immediately thereafter so accelerated that on the 30th
day of June, 1894, it had fallen to $64,873,025, thus losing by
withdrawals more than $42,000,000 in five months and dropping slightly
below its situation when the sale of $50,000,000 in bonds was effected
for its replenishment.

This depressed condition grew worse, and on the 24th day of November,
1894, our gold reserve being reduced to $57,669,701, it became
necessary to again strengthen it.

This was done by another sale of bonds amounting to $50,000,000, from
which there was realized $58,538,500, with which the fund was increased
to $111,142,021 on the 4th day of December, 1894.

Again disappointment awaited the anxious hope for relief. There was not
even a lull in the exasperating withdrawals of gold. On the contrary,
they grew larger and more persistent than ever. Between the 4th day of
December, 1894, and early in February, 1895, a period of scarcely more
than two months after the second reenforcement of our gold reserve by
the sale of bonds, it had lost by such withdrawals more than
$69,000,000 and had fallen to $41,340,181. Nearly $43,000,000 had been
withdrawn within the month immediately preceding this situation.

In anticipation of impending trouble I had on the 28th day of January,
1895, addressed a communication to the Congress fully setting forth our
difficulties and dangerous position and earnestly recommending that
authority be given the Secretary of the Treasury to issue bonds bearing
a low rate of interest, payable by their terms in gold, for the purpose
of maintaining a sufficient gold reserve and also for the redemption
and cancellation of outstanding United States notes and the Treasury
notes issued for the purchase of silver under the law of 1890. This
recommendation did not, however, meet with legislative approval.


In February, 1895, therefore, the situation was exceedingly critical.
With a reserve perilously low and a refusal of Congressional aid,
everything indicated that the end of gold payments by the Government
was imminent. The results of prior bond issues had been exceedingly
unsatisfactory, and the large withdrawals of gold immediately
succeeding their public sale in open market gave rise to a reasonable
suspicion that a large part of the gold paid into the Treasury upon
such sales was promptly drawn out again by the presentation of United
States notes or Treasury notes, and found its way to the hands of those
who had only temporarily parted with it in the purchase of bonds.

In this emergency, and in view of its surrounding perplexities, it
became entirely apparent to those upon whom the struggle for safety was
devolved not only that our gold reserve must, for the third time in
less than thirteen months, be restored by another issue and sale of
bonds bearing a high rate of interest and badly suited to the purpose,
but that a plan must be adopted for their disposition promising better
results than those realized on previous sales. An agreement was
therefore made with a number of financiers and bankers whereby it was
stipulated that bonds described in the resumption act of 1875, payable
in coin thirty years after their date, bearing interest at the rate of
4 pet cent per annum, and amounting to about $62,000,000, should be
exchanged for gold, receivable by weight, amounting to a little more
than $65,000,000.

This gold was to be delivered in such installments as would complete
its delivery within about six months from the date of the contract, and
at least one-half of the amount was to be furnished from abroad. It was
also agreed by those supplying this gold that during the continuance of
the contract they would by every means in their power protect the
Government against gold withdrawals. The contract also provided that if
Congress would authorize their issue bonds payable by their terms in
gold and bearing interest at the rate of 3 per cent per annum might
within ten days be substituted at par for the 4 per cent bonds
described in the agreement.

On the day this contract was made its terms were communicated to
Congress by a special Executive message, in which it was stated that
more than $16,000,000 would be saved to the Government if gold bonds
bearing 3 per cent interest were authorized to be substituted for those
mentioned in the contract.


The Congress having declined to grant the necessary authority to secure
this saving, the contract, unmodified, was carried out, resulting in a
gold reserve amounting to $107,571,230 on the 8th day of July, 1895.
The performance of this contract not only restored the reserve, but
checked for a time the withdrawals of gold and brought on a period of
restored confidence and such peace and quiet in business circles as
were of the greatest possible value to every interest that affects our
people. I have never had the slightest misgiving concerning the wisdom
or propriety of this arrangement, and am quite willing to answer for my
full share of responsibility for its promotion. I believe it averted a
disaster the imminence of which was, fortunately, not at the time
generally understood by our people.

Though the contract mentioned stayed for a time the tide of gold
withdrawal, its good results could not be permanent. Recent withdrawals
have reduced the reserve from $107,571,230 on the 8th day of July, 1895,
to $79,333,966. How long it will remain large enough to render its
increase unnecessary is only matter of conjecture, though quite large
withdrawals for shipment in the immediate future are predicted in
well-informed quarters. About $16,000,000 has been withdrawn during the
month of November.

The foregoing statement of events and conditions develops the fact that
after increasing our interest-bearing bonded indebtedness more than
$162,000,000 to save our gold reserve we are nearly where we started,
having now in such reserve $79,333,966, as against $65,438,377 in
February, 1894, when the first bonds were issued.

Though the amount of gold drawn from the Treasury appears to be very
large as gathered from the facts and figures herein presented, it
actually was much larger, considerable sums having been acquired by the
Treasury within the several periods stated without the issue of bonds.
On the 28th of January, 1895, it was reported by the Secretary of the
Treasury that more than $172,000,000 of gold had been withdrawn for
hoarding or shipment during the year preceding. He now reports that
from January 1, 1879, to July 14, 1890, a period of more than eleven
years, only a little over $28,000,000 was withdrawn, and that between
July 14, 1890, the date of the passage of the law for an increased
purchase of silver, and the 1st day of December, 1895, or within less
than five and a half years, there was withdrawn nearly $375,000,000,
making a total of more than $403,000,000 drawn from the Treasury in
gold since January 1, 1879, the date fixed in 1875 for the retirement
of the United States notes.

Nearly $327,000,000 of the gold thus withdrawn has been paid out on
these United States notes, and yet every one of the $346,000,000 is
still uncanceled and ready to do service in future gold depletions.

More than $76,000,000 in gold has since their creation in 1890 been
paid out from the Treasury upon the notes given on the purchase of
silver by the Government, and yet the whole, amounting to $155,000,000,
except a little more than $16,000,000 which has been retired by
exchanges for silver at the request of the holders, remains outstanding
and prepared to join their older and more experienced allies in future
raids upon the Treasury's gold reserve.

In other words, the Government has paid in gold more than nine-tenths
of its United States notes and still owes them all. It has paid in gold
about one-half of its notes given for silver purchases without
extinguishing by such payment one dollar of these notes.

When, added to all this, we are reminded that to carry on this astound,
lug financial scheme the Government has incurred a bonded indebtedness
of $95,500,000 in establishing a gold reserve and of $162,315,400 in
efforts to maintain it; that the annual interest charge on such bonded
indebtedness is more than $11,000,000; that a continuance of our
present course may result in further bond issues, and that we have
suffered or are threatened with all this for the sake of supplying gold
for foreign shipment or facilitating its hoarding at home, a situation
is exhibited which certainly ought to arrest attention and provoke
immediate legislative relief.

I am convinced the only thorough and practicable remedy for our
troubles is found in the retirement and cancellation of our United
States notes, commonly called greenbacks, and the outstanding Treasury
notes issued by the Government in payment of silver purchases under the
act of 1890.

I believe this could be quite readily accomplished by the exchange of
these notes for United States bonds, of small as well as large
denominations, bearing a low rate of interest. They should be long-term
bonds, thus increasing their desirability as investments, and because
their payment could be well postponed to a period far removed from
present financial burdens and perplexities, when with increased
prosperity and resources they would be more easily met.

To further insure the cancellation of these notes and also provide a
way by which gold may be added to our currency in lieu of them, a
feature in the plan should be an authority given to the Secretary of
the Treasury to dispose of the bonds abroad for gold if necessary to
complete the contemplated redemption and cancellation, permitting him
to use the proceeds of such bonds to take up and cancel any of the
notes that may be in the Treasury or that may be received by the
Government on any account.

The increase of our bonded debt involved in this plan would be amply
compensated by renewed activity and enterprise in all business circles,
the restored confidence at home, the reinstated faith in our monetary
strength abroad, and the stimulation of every interest and industry
that would follow the cancellation of the gold-demand obligations now
afflicting us. In any event, the bonds proposed would stand for the
extinguishment of a troublesome indebtedness, while in the path we now
follow there lurks the menace of unending bonds, with our indebtedness
still undischarged and aggravated in every feature. The obligations
necessary to fund this indebtedness would not equal in amount those
from which we have been relieved since 1884 by anticipation and payment
beyond the requirements of the sinking fund out of our surplus revenues.

The currency withdrawn by the retirement of the United States notes and
Treasury notes, amounting to probably less than $486,000,000, might be
supplied by such gold as would be used on their retirement or by an
increase in the circulation of our national banks. Though the aggregate
capital of those now in existence amounts to more than $664,000,000,
their outstanding circulation based on bond security amounts to only
about $190,000,000. They are authorized to issue notes amounting to 90
per cent of the bonds deposited to secure their circulation, but in no
event beyond the amount of their capital stock, and they are obliged to
pay 1 per cent tax on the circulation they issue.

I think they should be allowed to issue circulation equal to the par
value of the bonds they deposit to secure it, and that the tax on their
circulation should be reduced to one-fourth of 1 per cent, which would
undoubtedly meet all the expense the Government incurs on their account.
In addition they should be allowed to substitute or deposit in lieu of
the bonds now required as security for their circulation those which
would be issued for the purpose of retiring the United States notes and
Treasury notes.

The banks already existing, if they desired to avail themselves of the
provisions of law thus modified, could issue circulation, in addition
to that already outstanding, amounting to $478,000,000, which would
nearly or quite equal the currency proposed to be canceled. At any rate,
I should confidently expect to see the existing national banks or
others to be organized avail themselves of the proposed encouragements
to issue circulation and promptly fill any vacuum and supply every
currency need.

It has always seemed to me that the provisions of law regarding the
capital of national banks, which operate as a limitation to their
location, fail to make proper compensation for the suppression of State
banks, which came near to the people in all sections of the country and
readily furnished them with banking accommodations and facilities. Any
inconvenience or embarrassment arising from these restrictions on the
location of national banks might well be remedied by better adapting
the present system to the creation of banks in smaller communities or
by permitting banks of large capital to establish branches in such
localities as would serve the people, so regulated and restrained as to
secure their safe and conservative control and management.

But there might not be the necessity for such an addition to the
currency by new issues of bank circulation as at first glance is
indicated. If we should be relieved from maintaining a gold reserve
under conditions that constitute it the barometer of our solvency, and
if our Treasury should no longer be the foolish purveyor of gold for
nations abroad or for speculation and hoarding by our citizens at home,
I should expect to see gold resume its natural and normal functions in
the business affairs of the country and cease to be an object
attracting the timid watch of our people and exciting their sensitive
imaginations.

I do not overlook the fact that the cancellation of the Treasury notes
issued under the silver-purchasing act of 1890 would leave the Treasury
in the actual ownership of sufficient silver, including seigniorage, to
coin nearly $178,000,000 in standard dollars. It is worthy of
consideration whether this might not from time to time be converted
into dollars or fractional coin and slowly put into circulation, as in
the judgment of the Secretary of the Treasury the necessities of the
country should require.

Whatever is attempted should be entered upon fully appreciating the
fact that by careless, easy descent we have reached a dangerous depth,
and that our ascent will not be accomplished without laborious toil and
struggle. We shall be wise if we realize that we are financially ill
and that our restoration to health may require heroic treatment and
unpleasant remedies.

In the present stage of our difficulty it is not easy to understand how
the amount of our revenue receipts directly affects it. The important
question is not the quantity of money received in revenue payments, but
the kind of money we maintain and our ability to continue in sound
financial condition. We are considering the Government's holdings of
gold as related to the soundness of our money and as affecting our
national credit and monetary strength.

If our gold reserve had never been impaired; if no bonds had ever been
issued to replenish it; if there had been no fear and timidity
concerning our ability to continue gold payments; if any part of our
revenues were now paid in gold, and if we could look to our gold
receipts as a means of maintaining a safe reserve, the amount of our
revenues would be an influential factor in the problem. But,
unfortunately, all the circumstances that might lend weight to this
consideration are entirely lacking.

In our present predicament no gold is received by the Government in
payment of revenue charges, nor would there be if the revenues were
increased. The receipts of the Treasury, when not in silver
certificates, consist of United States notes and Treasury notes issued
for silver purchases. These forms of money are only useful to the
Government in paying its current ordinary expenses, and its quantity in
Government possession does not in the least contribute toward giving us
that kind of safe financial standing or condition which is built on
gold alone.

If it is said that these notes if held by the Government can be used to
obtain gold for our reserve, the answer is easy. The people draw gold
from the Treasury on demand upon United States notes and Treasury notes,
but the proposition that the Treasury can on demand draw gold from the
people upon them would be regarded in these days with wonder and
amusement; and even if this could be done there is nothing to prevent
those thus parting with their gold from regaining it the next day or
the next hour by the presentation of the notes they received in
exchange for it.

The Secretary of the Treasury might use such notes taken from a surplus
revenue to buy gold in the market. Of course he could not do this
without paying a premium. Private holders of gold, unlike the
Government, having no parity to maintain, would not be restrained from
making the best bargain possible when they furnished gold to the
Treasury; but the moment the Secretary of the Treasury bought gold on
any terms above par he would establish a general and universal premium
upon it, thus breaking down the parity between gold and silver, which
the Government is pledged to maintain, and opening the way to new and
serious complications. In the meantime the premium would not remain
stationary, and the absurd spectacle might be presented of a dealer
selling gold to the Government and with United States notes or Treasury
notes in his hand immediately clamoring for its return and a resale at
a higher premium.

It may be claimed that a large revenue and redundant receipts might
favorably affect the situation under discussion by affording an
opportunity of retaining these notes in the Treasury when received, and
thus preventing their presentation for gold. Such retention to be
useful ought to be at least measurably permanent; and this is precisely
what is prohibited, so far as United States notes are concerned, by the
law of 1878, forbidding their further retirement. That statute in so
many words provides that these notes when received into the Treasury
and belonging to the United States shall be "paid out again and kept in
circulation."

It will, moreover, be readily seen that the Government could not refuse
to pay out United States notes and Treasury notes in current
transactions when demanded, and insist on paying out silver alone, and
still maintain the parity between that metal and the currency
representing gold. Besides, the accumulation in the Treasury of
currency of any kind exacted from the people through taxation is justly
regarded as an evil, and it can not proceed far without vigorous
protest against an unjustifiable retention of money from the business
of the country and a denunciation of a scheme of taxation which proves
itself to be unjust when it takes from the earnings and income of the
citizen money so much in excess of the needs of Government support that
large sums can be gathered and kept in the Treasury. Such a condition
has heretofore in times of surplus revenue led the Government to
restore currency to the people by the purchase of its unmatured bonds
at a large premium and by a large increase of its deposits in national
banks, and we easily remember that the abuse of Treasury accumulation
has furnished a most persuasive argument in favor of legislation
radically reducing our tariff taxation.

Perhaps it is supposed that sufficient revenue receipts would in a
sentimental way improve the situation by inspiring confidence in our
solvency and allaying the fear of pecuniary exhaustion. And yet through
all our struggles to maintain our gold reserve there never has been any
apprehension as to our ready ability to pay our way with such money as
we had, and the question whether or not our current receipts met our
current expenses has not entered into the estimate of our solvency. Of
course the general state of our funds, exclusive of gold, was entirely
immaterial to the foreign creditor and investor. His debt could only be
paid in gold, and his only concern was our ability to keep on hand that
kind of money.

On July 1, 1892, more than a year and a half before the first bonds
were issued to replenish the gold reserve, there was a net balance in
the Treasury, exclusive of such reserve, of less than $13,000,000, but
the gold reserve amounted to more than $114,000,000, which was the
quieting feature of the situation. It was when the stock of gold began
rapidly to fall that fright supervened and our securities held abroad
were returned for sale and debts owed abroad were pressed for payment.
In the meantime extensive shipments of gold and other unfavorable
indications caused restlessness and fright among our people at home.
Thereupon the general state of our funds, exclusive of gold, became
also immaterial to them, and they too drew gold from the Treasury for
hoarding against all contingencies. This is plainly shown by the large
increase in the proportion of gold withdrawn which was retained by our
own people as time and threatening incidents progressed. During the
fiscal year ending June 30, 1894, nearly $85,000,000 in gold was
withdrawn from the Treasury and about $77,000,000 was sent abroad,
while during the fiscal year ending June 30, 1895, over $117,000,000
was drawn out, of which only about $66,000,000 was shipped, leaving the
large balance of such withdrawals to be accounted for by domestic
hoarding.

Inasmuch as the withdrawal of our gold has resulted largely from fright,
there is nothing apparent that will prevent its continuance or
recurrence, with its natural consequences, except such a change in our
financial methods as will reassure the frightened and make the desire
for gold less intense. It is not clear how an increase fix revenue,
unless it be in gold, can satisfy those whose only anxiety is to gain
gold from the Government's store.

It can not, therefore, be safe to rely upon increased revenues as a
cure for our present troubles.

It is possible that the suggestion of increased revenue as a remedy for
the difficulties we are considering may have originated in an
intimation or distinct allegation that the bonds which have been issued
ostensibly to replenish our gold reserve were really issued to supply
insufficient revenue. Nothing can be further from the truth. Bonds were
issued to obtain gold for the maintenance of our national credit. As
has been shown, the gold thus obtained has been drawn again from the
Treasury upon United States notes and Treasury notes. This operation
would have been promptly prevented if possible; but these notes having
thus been passed to the Treasury, they became the money of the
Government, like any other ordinary Government funds, and there was
nothing to do but to use them in paying Government expenses when needed.

At no time when bonds have been issued has there been any consideration
of the question of paying the expenses of Government with their
proceeds. There was no necessity to consider that question. At the time
of each bond issue we had a safe surplus in the Treasury for ordinary
operations, exclusive of the gold in our reserve. In February, 1894,
when the first issue of bonds was made, such surplus amounted to over
$18,000,000; in November, when the second issue was made, it amounted
to more than $42,000,000, and in February, 1895, when bonds for the
third time were issued, such surplus amounted to more than $100,000,000.
It now amounts to $98,072,420.30.

Besides all this, the Secretary of the Treasury had no authority
whatever to issue bonds to increase the ordinary revenues or pay
current expenses.

I can not but think there has been some confusion of ideas regarding
the effects of the issue of bonds and the results of the withdrawal of
gold. It was the latter process, and not the former, that, by
substituting in the Treasury United States notes and Treasury notes for
gold, increased by their amount the money which was in the first
instance subject to ordinary Government expenditure.

Although the law compelling an increased purchase of silver by the
Government was passed on the 14th day of July, 1890, withdrawals of
gold from the Treasury upon the notes given in payment on such
purchases did not begin until October, 1891. Immediately following that
date the withdrawals upon both these notes and United States notes
increased very largely, and have continued to such an extent that since
the passage of that law there has been more than thirteen times as much
gold taken out of the Treasury upon United States notes and Treasury
notes issued for silver purchases as was thus withdrawn during the
eleven and a half years immediately prior thereto and after the 1st day
of January, 1879, when specie payments were resumed.

It is neither unfair nor unjust to charge a large share of our present
financial perplexities and dangers to the operation of the laws of 1878
and 1890 compelling the purchase of silver by the Government, which not
only furnished a new Treasury obligation upon which its gold could be
withdrawn, but so increased the fear of an overwhelming flood of silver
and a forced descent to silver payments that even the repeal of these
laws did not entirely cure the evils of their existence.

While I have endeavored to make a plain statement of the disordered
condition of our currency and the present dangers menacing our
prosperity and to suggest a way which leads to a safer financial system,
I have constantly had in mind the fact that many of my countrymen,
whose sincerity I do not doubt, insist that the cure for the ills now
threatening us may be found in the single and simple remedy of the free
coinage of silver. They contend that our mints shall be at once thrown
open to the free, unlimited, and independent coinage of both gold and
silver dollars of full legal-tender quality, regardless of the action
of any other government and in full view of the fact that the ratio
between the metals which they suggest calls for 100 cents' worth of
gold in the gold dollar at the present standard and only 50 cents in
intrinsic worth of silver in the silver dollar.

Were there infinitely stronger reasons than can be adduced for hoping
that such action would secure for us a bimetallic currency moving on
lines of parity, an experiment so novel and hazardous as that proposed
might well stagger those who believe that stability is an imperative
condition of sound money.

No government, no human contrivance or act of legislation, has ever
been able to hold the two metals together in free coinage at a ratio
appreciably different from that which is established in the markets of
the world.

Those who believe that our independent free coinage of silver at an
artificial ratio with gold of 16 to 1 would restore the parity between
the metals, and consequently between the coins, oppose an unsupported
and improbable theory to the general belief and practice of other
nations; and to the teaching of the wisest statesmen and economists of
the world, both in the past and present, and, what is far more
conclusive, they run counter to our own actual experiences.

Twice in our earlier history our lawmakers, in attempting to establish
a bimetallic currency, undertook free coinage upon a ratio which
accidentally varied from the actual relative values of the two metals
not more than 3 per cent. In both cases, notwithstanding greater
difficulties and cost of transportation than now exist, the coins whose
intrinsic worth was undervalued in the ratio gradually and surely
disappeared from our circulation and went to other countries where
their real value was better recognized.

Acts of Congress were impotent to create equality where natural causes
decreed even a slight inequality.

Twice in our recent history we have signally failed to raise by
legislation the value of silver. Under an act of Congress passed in
1878 the Government was required for more than twelve years to expend
annually at least $24,000,000 in the purchase of silver bullion for
coinage. The act of July 14, 1890, in a still bolder effort, increased
the amount of silver the Government was compelled to purchase and
forced it to become the buyer annually of 54,000,000 ounces, or
practically the entire product of our mines. Under both laws silver
rapidly and steadily declined in value. The prophecy and the expressed
hope and expectation of those in the Congress who led in the passage of
the last-mentioned act that it would reestablish and maintain the
former parity between the two metals are still fresh in our memory.

In the light of these experiences, which accord with the experiences of
other nations, there is certainly no secure ground for the belief that
an act of Congress could now bridge an inequality of 50 per cent
between gold and silver at our present ratio, nor is there the least
possibility that our country, which has less than one-seventh of the
silver money in the world, could by its action alone raise not only our
own but all silver to its lost ratio with gold. Our attempt to
accomplish this by the free coinage of silver at a ratio differing
widely from actual relative values would be the signal for the complete
departure of gold from our circulation, the immediate and large
contraction of our circulating medium, and a shrinkage in the real
value and monetary efficiency of all other forms of currency as they
settled to the level of silver monometallism. Everyone who receives a
fixed salary and every worker for wages would find the dollar in his
hand ruthlessly scaled down to the point of bitter disappointment, if
not to pinching privation.

A change in our standard to silver monometallism would also bring on a
collapse of the entire system of credit, which, when based on a
standard which is recognized and adopted by the world of business, is
many times more potent and useful than the entire volume of currency
and is safely capable of almost indefinite expansion to meet the growth
of trade and enterprise. In a self-invited struggle through darkness
and uncertainty our humiliation would be increased by the consciousness
that we had parted company with all the enlightened and progressive
nations of the world and were desperately and hopelessly striving to
meet the stress of modern commerce and competition with a debased and
unsuitable currency and in association with the few weak and laggard
nations which have silver alone as their standard of value.

All history warns us against rash experiments which threaten violent
changes in our monetary standard and the degradation of our currency.
The past is full of lessons teaching not only the economic dangers but
the national immorality that follow in the train of such experiments. I
will not believe that the American people can be persuaded after sober
deliberation to jeopardize their nation's prestige and proud standing
by encouraging financial nostrums, nor that they will yield to the
false allurements of cheap money when they realize that it must result
in the weakening of that financial integrity and rectitude which thus
far in our history has been so devotedly cherished as one of the traits
of true Americanism.

Our country's indebtedness, whether owing by the Government or existing
between individuals, has been contracted with reference to our present
standard. To decree by act of Congress that these debts shall be
payable in less valuable dollars than those within the contemplation
and intention of the parties when contracted would operate to transfer
by the fiat of law and without compensation an amount of property and a
volume of rights and interests almost incalculable.

Those who advocate a blind and headlong plunge to free coinage in the
name of bimetallism, and professing the belief, contrary to all
experience, that we could thus establish a double standard and a
concurrent circulation of both metals in our coinage, are certainly
reckoning from a cloudy standpoint. Our present standard of value is
the standard of the civilized world and permits the only bimetallism
now possible, or at least that is within the independent reach of any
single nation, however powerful that nation may be. While the value of
gold as a standard is steadied by almost universal commercial and
business use, it does not despise silver nor seek its banishment.
Wherever this standard is maintained there is at its side in free and
unquestioned circulation a volume of silver currency sometimes equaling
and sometimes even exceeding it in amount both maintained at a parity
notwithstanding a depreciation or fluctuation in the intrinsic value of
silver.

There is a vast difference between a standard of value and a currency
for monetary use. The standard must necessarily be fixed and certain.
The currency may be in divers forms and of various kinds. No silver-standard
country has a gold currency in circulation, but an enlightened
and wise system of finance secures the benefits of both gold and silver
as currency and circulating medium by keeping the standard stable and
all other currency at par with it. Such a system and such a standard
also give free scope for the use and expansion of safe and conservative
credit, so indispensable to broad and growing commercial transactions
and so well substituted for the actual use of money. If a fixed and
stable standard is maintained, such as the magnitude and safety of our
commercial transactions and business require, the use of money itself
is conveniently minimized.

Every dollar of fixed and stable value has through the agency of
confident credit an astonishing capacity of multiplying itself in
financial work. Every unstable and fluctuating dollar fails as a basis
of credit, and in its use begets gambling speculation and undermines
the foundations of honest enterprise.

I have ventured to express myself on this subject with earnestness and
plainness of speech because I can not rid myself of the belief that
there lurk in the proposition for the free coinage of silver, so
strongly approved and so enthusiastically advocated by a multitude of
my countrymen, a serious menace to our prosperity and an insidious
temptation of our people to wander from the allegiance they owe to
public and private integrity. It is because I do not distrust the good
faith and sincerity of those who press this scheme that I have
imperfectly but with zeal submitted my thoughts upon this momentous
subject. I can not refrain from begging them to reexamine their views
and beliefs in the light of patriotic reason and familiar experience
and to weigh again and again the consequences of such legislation as
their efforts have invited. Even the continued agitation of the subject
adds greatly to the difficulties of a dangerous financial situation
already forced upon us.

In conclusion I especially entreat the people's representatives in the
Congress, who are charged with the responsibility of inaugurating
measures for the safety and prosperity of our common country, to
promptly and effectively consider the ills of our critical financial
plight. I have suggested a remedy which my judgment approves. I desire,
however, to assure the Congress that I am prepared to cooperate with
them in perfecting any other measure promising thorough and practical
relief, and that I will gladly labor with them in every patriotic
endeavor to further the interests and guard the welfare of our
countrymen, whom in our respective places of duty we have undertaken to
serve.

***

State of the Union Address
by Grover Cleveland
December 7, 1896


To the Congress of the United States:

As representatives of the people in the legislative branch of their
Government, you have assembled at a time when the strength and
excellence of our free institutions and the fitness of our citizens to
enjoy popular rule have been again made manifest. A political contest
involving momentous consequences, fraught with feverish apprehension,
and creating aggressiveness so intense as to approach bitterness and
passion has been waged throughout our land and determined by the decree
of free and independent suffrage without disturbance of our
tranquillity or the least sign of weakness in our national structure.

When we consider these incidents and contemplate the peaceful obedience
and manly submission which have succeeded a heated clash of political
opinions, we discover abundant evidence of a determination on the part
of our countrymen to abide by every verdict of the popular will and to
be controlled at all times by an abiding faith in the agencies
established for the direction of the affairs of their Government.

Thus our people exhibit a patriotic disposition which entitles them to
demand of those who undertake to make and execute their laws such
faithful and unselfish service in their behalf as can only be prompted
by a serious appreciation of the trust and confidence which the
acceptance of public duty invites.

In obedience to a constitutional requirement I herein submit to the
Congress certain information concerning national affairs, with the
suggestion of such legislation as in my judgment is necessary and
expedient. To secure brevity and avoid tiresome narration I shall omit
many details concerning matters within Federal control which, though by
no means unimportant, are more profitably discussed in departmental
reports. I shall also further curtail this communication by omitting a
minute recital of many minor incidents connected with our foreign
relations which have heretofore found a place in Executive messages,
but are now contained in a report of the Secretary of State, which is
herewith submitted.

At the outset of a reference to the more important matters affecting
our relations with foreign powers it would afford me satisfaction if I
could assure the Congress that the disturbed condition in Asiatic
Turkey had during the past year assumed a less hideous and bloody
aspect and that, either as a consequence of the awakening of the
Turkish Government to the demands of humane civilization or as the
result of decisive action on the part of the great nations having the
right by treaty to interfere for the protection of those exposed to the
rage of mad bigotry and cruel fanaticism, the shocking features of the
situation had been mitigated. Instead, however, of welcoming a softened
disposition or protective intervention, we have been afflicted by
continued and not unfrequent reports of the wanton destruction of homes
and the bloody butchery of men, women, and children, made martyrs to
their profession of Christian faith.

While none of our citizens in Turkey have thus far been killed or
wounded, though often in the midst of dreadful scenes of danger, their
safety in the future is by no means assured. Our Government at home and
our minister at Constantinople have left nothing undone to protect our
missionaries in Ottoman territory, who constitute nearly all the
individuals residing there who have a right to claim our protection on
the score of American citizenship. Our efforts in this direction will
not be relaxed; but the deep feeling and sympathy that have been
aroused among our people ought not to so far blind their reason and
judgment as to lead them to demand impossible things. The outbreaks of
the blind fury which lead to murder and pillage in Turkey occur
suddenly and without notice, and an attempt on our part to force such a
hostile presence there as might be effective for prevention or
protection would not only be resisted by the Ottoman Government, but
would be regarded as an interruption of their plans by the great
nations who assert their exclusive right to intervene in their own time
and method for the security of life and property in Turkey.

Several naval vessels are stationed in the Mediterranean as a measure
of caution and to furnish all possible relief and refuge in case of
emergency.

We have made claims against the Turkish Government for the pillage and
destruction of missionary property at Harpoot and Marash during
uprisings at those places. Thus far the validity of these demands has
not been admitted, though our minister, prior to such outrages and in
anticipation of danger, demanded protection for the persons and
property of our missionary citizens in the localities mentioned and
notwithstanding that strong evidence exists of actual complicity of
Turkish soldiers in the work of destruction and robbery.

The facts as they now appear do not permit us to doubt the justice of
these claims, and nothing will be omitted to bring about their prompt
settlement.

A number of Armenian refugees having arrived at our ports, an order has
lately been obtained from the Turkish Government permitting the wives
and children of such refugees to join them here. It is hoped that
hereafter no obstacle will be interposed to prevent the escape of all
those who seek to avoid the perils which threaten them in Turkish
dominions.

Our recently appointed consul to Erzerum is at his post and discharging
the duties of his office, though for some unaccountable reason his
formal exequatur from the Sultan has not been issued.

I do not believe that the present somber prospect in Turkey will be
long permitted to offend the sight of Christendom. It so mars the
humane and enlightened civilization that belongs to the close of the
nineteenth century that it seems hardly possible that the earnest
demand of good people throughout the Christian world for its corrective
treatment will remain unanswered.

The insurrection in Cuba still continues with all its perplexities. It
is difficult to perceive that any progress has thus far been made
toward the pacification of the island or that the situation of affairs
as depicted in my last annual message has in the least improved. If
Spain still holds Havana and the seaports and all the considerable
towns, the insurgents still roam at will over at least two-thirds of
the inland country. If the determination of Spain to put down the
insurrection seems but to strengthen with the lapse of time and is
evinced by her unhesitating devotion of largely increased military and
naval forces to the task, there is much reason to believe that the
insurgents have gained in point of numbers and character and resources
and are none the less inflexible in their resolve not to succumb
without practically securing the great objects for which they took up
arms. If Spain has not yet reestablished her authority, neither have
the insurgents yet made good their title to be regarded as an
independent state. Indeed, as the contest has gone on the pretense that
civil government exists on the island, except so far as Spain is able
to maintain it, has been practically abandoned. Spain does keep on foot
such a government, more or less imperfectly, in the large towns and
their immediate suburbs; but that exception being made, the entire
country is either given over to anarchy or is subject to the military
occupation of one or the other party. It is reported, indeed, on
reliable authority that at the demand of the commander in chief of the
insurgent army the putative Cuban government has now given up all
attempt to exercise its functions, leaving that government confessedly
(what there is the best reason for supposing it always to have been in
fact) a government merely on paper.

Were the Spanish armies able to meet their antagonists in the open or
in pitched battle, prompt and decisive results might be looked for, and
the immense superiority of the Spanish forces in numbers, discipline,
and equipment could hardly fail to tell greatly to their advantage. But
they are called upon to face a foe that shuns general engagements, that
can choose and does choose its own ground, that from the nature of the
country is visible or invisible at pleasure, and that fights only from
ambuscade and when all the advantages of position and numbers are on
its side. In a country where all that is indispensable to life in the
way of food, clothing, and shelter is so easily obtainable, especially
by those born and bred on the soil, it is obvious that there is hardly
a limit to the time during which hostilities of this sort may be
prolonged. Meanwhile, as in all cases of protracted civil strife, the
passions of the combatants grow more and more inflamed and excesses on
both sides become more frequent and more deplorable. They are also
participated in by bands of marauders, who, now in the name of one
party and now in the name of the other, as may best suit the occasion,
harry the country at will and plunder its wretched inhabitants for
their own advantage. Such a condition of things would inevitably entail
immense destruction of property, even if it were the policy of both
parties to prevent it as far as practicable; but while such seemed to
be the original policy of the Spanish Government, it has now apparently
abandoned it and is acting upon the same theory as the insurgents,
namely, that the exigencies of the contest require the wholesale
annihilation of property that it may not prove of use and advantage to
the enemy.

It is to the same end that, in pursuance of general orders, Spanish
garrisons are now being withdrawn from plantations and the rural
population required to concentrate itself in the towns. The sure result
would seem to be that the industrial value of the island is fast
diminishing and that unless there is a speedy and radical change in
existing conditions it will soon disappear altogether. That value
consists very largely, of course, in its capacity to produce sugar--a
capacity already much reduced by the interruptions to tillage which
have taken place during the last two years. It is reliably asserted
that should these interruptions continue during the current year, and
practically extend, as is now threatened, to the entire sugar-producing
territory of the island, so much time and so much money will be
required to restore the land to its normal productiveness that it is
extremely doubtful if capital can be induced to even make the attempt.

The spectacle of the utter ruin of an adjoining country, by nature one
of the most fertile and charming on the globe, would engage the serious
attention of the Government and people of the United States in any
circumstances. In point of fact, they have a concern with it which is
by no means of a wholly sentimental or philanthropic character. It lies
so near to us as to be hardly separated from our territory. Our actual
pecuniary interest in it is second only to that of the people and
Government of Spain. It is reasonably estimated that at least from
$30,000,000 to $50,000,000 of American capital are invested in
plantations and in railroad, mining, and other business enterprises on
the island. The volume of trade between the United States and Cuba,
which in 1889 amounted to about $64,000,000, rose in 1893 to about
$103,000,000, and in 1894, the year before the present insurrection
broke out, amounted to nearly $96,000,000. Besides this large pecuniary
stake in the fortunes of Cuba, the United States finds itself
inextricably involved in the present contest in other ways, both
vexatious and costly.

Many Cubans reside in this country, and indirectly promote the
insurrection through the press, by public meetings, by the purchase and
shipment of arms, by the raising of funds, and by other means which the
spirit of our institutions and the tenor of our laws do not permit to
be made the subject of criminal prosecutions. Some of them, though
Cubans at heart and in all their feelings and interests, have taken out
papers as naturalized citizens of the United States--a proceeding
resorted to with a view to possible protection by this Government, and
not unnaturally regarded with much indignation by the country of their
origin. The insurgents are undoubtedly encouraged and supported by the
widespread sympathy the people of this country always and instinctively
feel for every struggle for better and freer government, and which, in
the case of the more adventurous and restless elements of our
population, leads in only too many instances to active and personal
participation in the contest. The result is that this Government is
constantly called upon to protect American citizens, to claim damages
for injuries to persons and property, now estimated at many millions of
dollars, and to ask explanations and apologies for the acts of Spanish
officials whose zeal for the repression of rebellion sometimes blinds
them to the immunities belonging to the unoffending citizens of a
friendly power. It follows from the same causes that the United States
is compelled to actively police a long line of seacoast against
unlawful expeditions, the escape of which the utmost vigilance will not
always suffice to prevent.

These inevitable entanglements of the United States with the rebellion
in Cuba, the large American property interests affected, and
considerations of philanthropy and humanity in general have led to a
vehement demand in various quarters for some sort of positive
intervention on the part of the United States. It was at first proposed
that belligerent rights should be accorded to the insurgents--a
proposition no longer urged because untimely and in practical operation
dearly perilous and injurious to our own interests. It has since been
and is now sometimes contended that the independence of the insurgents
should be recognized; but imperfect and restricted as the Spanish
government of the island may be, no other exists there, unless the will
of the military officer in temporary command of a particular district
can be dignified as a species of government. It is now also suggested
that the United States should buy the island--a suggestion possibly
worthy of consideration if there were any evidence of a desire or
willingness on the part of Spain to entertain such a proposal. It is
urged finally that, all other methods failing, the existing internecine
strife in Cuba should be terminated by our intervention, even at the
cost of a war between the United States and Spain--a war which its
advocates confidently prophesy could neither be large in its
proportions nor doubtful in its issue.

The correctness of this forecast need be neither affirmed nor denied.
The United States has, nevertheless, a character to maintain as a
nation, which plainly dictates that right and not might should be the
rule of its conduct. Further, though the United States is not a nation
to which peace is a necessity, it is in truth the most pacific of
powers and desires nothing so much as to live in amity with all the
world. Its own ample and diversified domains satisfy all possible
longings for territory, preclude all dreams of conquest, and prevent
any casting of covetous eyes upon neighboring regions, however
attractive. That our conduct toward Spain and her dominions has
constituted no exception to this national disposition is made manifest
by the course of our Government, not only thus far during the present
insurrection, but during the ten years that followed the rising at Yara
in 1868. No other great power, it may safely be said, under
circumstances of similar perplexity, would have manifested the same
restraint and the same patient endurance. It may also be said that this
persistent attitude of the United States toward Spain in connection
with Cuba unquestionably evinces no slight respect and regard for Spain
on the part of the American people. They in truth do not forget her
connection with the discovery of the Western Hemisphere, nor do they
underestimate the great qualities of the Spanish people nor fail to
fully recognize their splendid patriotism and their chivalrous devotion
to the national honor.

They view with wonder and admiration the cheerful resolution with which
vast bodies of men are sent across thousands of miles of ocean and an
enormous debt accumulated that the costly possession of the gem of the
Antilles may still hold its place in the Spanish crown. And yet neither
the Government nor the people of the United States have shut their eyes
to the course of events in Cuba or have failed to realize the existence
of conceded grievances which have led to the present revolt from the
authority of Spain--grievances recognized by the Queen Regent and by the
Cortes, voiced by the most patriotic and enlightened of Spanish
statesmen, without regard to party, and demonstrated by reforms
proposed by the executive and approved by the legislative branch of the
Spanish Government. It is in the assumed temper and disposition of the
Spanish Government to remedy these grievances, fortified by indications
of influential public opinion in Spain, that this Government has hoped
to discover the most promising and effective means of composing the
present strife with honor and advantage to Spain and with the
achievement of all the reasonable objects of the insurrection.

It would seem that if Spain should offer to Cuba genuine autonomy--a
measure of home rule which, while preserving the sovereignty of Spain,
would satisfy all rational requirements of her Spanish subjects--there
should be no just reason why the pacification of the island might not
be effected on that basis. Such a result would appear to be in the true
interest of all concerned. It would at once stop the conflict which is
now consuming the resources of the island and making it worthless for
whichever party may ultimately prevail. It would keep intact the
possessions of Spain without touching her honor, which will be
consulted rather than impugned by the adequate redress of admitted
grievances. It would put the prosperity of the island and the fortunes
of its inhabitants within their own control without severing the
natural and ancient ties which bind them to the mother country, and
would yet enable them to test their capacity for self-government under
the most favorable conditions. It has been objected on the one side
that Spain should not promise autonomy until her insurgent subjects lay
down their arms; on the other side, that promised autonomy, however
liberal, is insufficient, because without assurance of the promise
being fulfilled.

But the reasonableness of a requirement by Spain of unconditional
surrender on the part of the insurgent Cubans before their autonomy is
conceded is not altogether apparent. It ignores important features of
the situation--the stability two years' duration has given to the
insurrection; the feasibility of its indefinite prolongation in the
nature of things, and, as shown by past experience, the utter and
imminent ruin of the island unless the present strife is speedily
composed; above all, the rank abuses which all parties in Spain, all
branches of her Government, and all her leading public men concede to
exist and profess a desire to remove. Facing such circumstances, to
withhold the proffer of needed reforms until the parties demanding them
put themselves at mercy by throwing down their arms has the appearance
of neglecting the gravest of perils and inviting suspicion as to the
sincerity of any professed willingness to grant reforms. The objection
on behalf of the insurgents that promised reforms can not be relied
upon must of course be considered, though we have no right to assume
and no reason for assuming that anything Spain undertakes to do for the
relief of Cuba will not be done according to both the spirit and the
letter of the undertaking.

Nevertheless, realizing that suspicions and precautions on the part of
the weaker of two combatants are always natural and not always
unjustifiable, being sincerely desirous in the interest of both as well
as on its own account that the Cuban problem should be solved with the
least possible delay, it was intimated by this Government to the
Government of Spain some months ago that if a satisfactory measure of
home rule were tendered the Cuban insurgents and would be accepted by
them upon a guaranty of its execution the United States would endeavor
to find a way not objectionable to Spain of furnishing such graranty.
While no definite response to this intimation has yet been received
from the Spanish Government, it is believed to be not altogether
unwelcome, while, as already suggested, no reason is perceived why it
should not be approved by the insurgents. Neither party can fail to see
the importance of early action, and both must realize that to prolong
the present state of things for even a short period will add enormously
to the time and labor and expenditure necessary to bring about the
industrial recuperation of the island. It is therefore fervently hoped
on all grounds that earnest efforts for healing the breach between
Spain and the insurgent Cubans upon the lines above indicated may be at
once inaugurated and pushed to an immediate and successful issue. The
friendly offices of the United States, either in the manner above
outlined or in any other way consistent with our Constitution and laws,
will always be at the disposal of either party.

Whatever circumstances may arise, our policy and our interests would
constrain us to object to the acquisition of the island or an
interference with its control by any other power.

It should be added that it can not be reasonably assumed that the
hitherto expectant attitude of the United States will be indefinitely
maintained. While we are anxious to accord all due respect to the
sovereignty of Spain, we can not view the pending conflict in all its
features and properly apprehend our inevitably close relations to it
and its possible results without considering that by the course of
events we may be drawn into such an unusual and unprecedented condition
as will fix a limit to our patient waiting for Spain to end the contest,
either alone and in her own way or with our friendly cooperation.

When the inability of Spain to deal successfully with the insurrection
has become manifest and it is demonstrated that her sovereignty is
extinct in Cuba for all purposes of its rightful existence, and when a
hopeless struggle for its reestablishment has degenerated into a strife
which means nothing more than the useless sacrifice of human life and
the utter destruction of the very subject-matter of the conflict, a
situation will be presented in which our obligations to the sovereignty
of Spain will be superseded by higher obligations, which we can hardly
hesitate to recognize and discharge. Deferring the choice of ways and
methods until the time for action arrives, we should make them depend
upon the precise conditions then existing; and they should not be
determined upon without giving careful heed to every consideration
involving our honor and interest or the international duty we owe to
Spain. Until we face the contingencies suggested or the situation is by
other incidents imperatively changed we should continue in the line of
conduct heretofore pursued, thus in all circumstances exhibiting our
obedience to the requirements of public law and our regard for the duty
enjoined upon us by the position we occupy in the family of nations.

A contemplation of emergencies that may arise should plainly lead us to
avoid their creation, either through a careless disregard of present
duty or even an undue stimulation and ill-timed expression of feeling.
But I have deemed it not amiss to remind the Congress that a time may
arrive when a correct policy and care for our interests, as well as a
regard for the interests of other nations and their citizens, joined by
considerations of humanity and a desire to see a rich and fertile
country intimately related to us saved from complete devastation, will
constrain our Government to such action as will subserve the interests
thus involved and at the same time promise to Cuba and its inhabitants
an opportunity to enjoy the blessings of peace.

The Venezuelan boundary question has ceased to be a matter of
difference between Great Britain and the United States, their
respective Governments having agreed upon the substantial provisions of
a treaty between Great Britain and Venezuela submitting the whole
controversy to arbitration. The provisions of the treaty are so
eminently just and fair that the assent of Venezuela thereto may
confidently be anticipated.

Negotiations for a treaty of general arbitration for all differences
between Great Britain and the United States are far advanced and
promise to reach a successful consummation at an early date.

The scheme of examining applicants for certain consular positions to
test their competency and fitness, adopted under an Executive order
issued on the 20th of September, 1895, has fully demonstrated the
usefulness of this innovation. In connection with this plan of
examination promotions and transfers of deserving incumbents have been
quite extensively made, with excellent results.

During the past year 35 appointments have been made in the consular
service, 27 of which were made to fill vacancies caused by death or
resignation or to supply newly created posts, 2 to succeed incumbents
removed for cause, 2 for the purpose of displacing alien consular
officials by American citizens, and 4 merely changing the official
title of incumbent from commercial agent to consul. Twelve of these
appointments were transfers or promotions from other positions under
the Department of State, 4 of those appointed had rendered previous
service under the Department, 8 were made of persons who passed a
satisfactory examination, 7 were appointed to places not included in
the order of September 20, 1895, and 4 appointments, as above stated,
involved no change of incumbency. The inspection of consular offices
provided for by an appropriation for that purpose at the last session
of the Congress has been productive of such wholesome effects that I
hope this important work will in the future be continued. I know of
nothing that can be done with the same slight expense so improving to
the service.

I desire to repeat the recommendation contained in my last annual
message in favor of providing at public expense official residences for
our ambassadors and ministers at foreign capitals. The reasons
supporting this recommendation are strongly stated in the report of the
Secretary of State, and the subject seems of such importance that I
hope it may receive the early attention of the Congress.

We have during the last year labored faithfully and against unfavorable
conditions to secure better preservation of seal life in the Bering Sea.
Both the United States and Great Britain have lately dispatched
commissioners to these waters to study the habits and condition of the
seal herd and the causes of their rapid decrease. Upon the reports of
these commissioners, soon to be submitted, and with the exercise of
patience and good sense on the part of all interested parties, it is
earnestly hoped that hearty cooperation may be secured for the
protection against threatened extinction of seal life in the Northern
Pacific and Bering Sea.

The Secretary of the Treasury reports that during the fiscal year ended
June 30, 1896, the receipts of the Government from all sources amounted
to $409,475,408.78. During the same period its expenditures were
$434,678,654.48, the excess of expenditures over receipts thus
amounting to $25,203,245.70. The ordinary expenditures during the year
were $4,015,852.21 less than during the preceding fiscal year. Of the
receipts mentioned there was derived from customs the sum of
$160,021,751.67 and from internal revenue $146,830,615.66. The receipts
from customs show an increase of $7,863,134.22 over those from the same
source for the fiscal year ended June 30, 1895, and the receipts from
internal revenue an increase of $3,584,537.91.

The value of our imported dutiable merchandise during the last fiscal
year was $369,757,470 and the value of free goods imported $409,967,470,
being an increase of $6,523,675 in the value of dutiable goods and
$41,231,034 in the value of free goods over the preceding year. Our
exports of merchandise, foreign and domestic, amounted in value to
$882,606,938, being an increase over the preceding year of $75,068,773.
The average ad valorem duty paid on dutiable goods imported during the
year was 39.94 per cent and on free and dutiable goods taken together
20.55 per cent.

The cost of collecting our internal revenue was 2.78 per cent, as
against 2.81 per cent for the fiscal year ending June 30, 1895. The
total production of distilled spirits, exclusive of fruit brandies, was
86,588,703 taxable gallons, being an increase of 6,639,108 gallons over
the preceding year. There was also an increase of 1,443,676 gallons of
spirits produced from fruit as compared with the preceding year. The
number of barrels of beer produced was 35,859,250, as against
33,589,784 produced in the preceding fiscal year, being all increase of
2,269,466 barrels.

The total amount of gold exported during the last fiscal year was
$112,409,947 and of silver $60,541,670, being an increase of
$45,941,466 of gold and $13,246,384 of silver over the exportations of
the preceding fiscal year. The imports of gold were $33,525,065 and of
silver $28,777,186, being $2,859,695 less of gold and $8,566,007 more
of silver than during the preceding year.

The total stock of metallic money in the United States at the close of
the last fiscal year, ended on the 30th day of June, 1896, was
$1,228,326,035, of which $599,597,964 was in gold and $628,728,071 in
silver.

On the 1st day of November, 1896, the total stock of money of all kinds
in the country was $2,285,410,590, and the amount in circulation, not
including that in the Treasury holdings, was $1,627,055,641, being
$22.63 per capita upon an estimated population of 71,902,000.

The production of the precious metals in the United States during the
calendar year 1895 is estimated to have been 2,254,760 fine ounces of
gold, of the value of $46,610,000, and 55,727,000 fine ounces of silver,
of the commercial value of $36,445,000 and the coinage value of
$72,051,000. The estimated production of these metals throughout the
world during the same period was 9,688,821 fine ounces of gold,
amounting to $200,285,700 in value, and 169,189,249 fine ounces of
silver, of the commercial value of $110,654,000 and of the coinage
value of $218,738,100 according to our ratio.

The coinage of these metals in the various countries of the world
during the same calendar year amounted to $232,701,438 in gold and
$121,996,219 in silver.

The total coinage at the mints of the United States during the fiscal
year ended June 30, 1896, amounted to $71,188,468.52, of which
$58,878,490 was in gold coins and $12,309,978.52 in standard silver
dollars, subsidiary coins, and minor coins

The number of national banks organized from the time the law
authorizing their creation was passed up to October 31, 1896, was 5,051,
and of this number 3,679 were at the date last mentioned in active
operation, having authorized capital stock of $650,014,895, held by
288,902 shareholders, and circulating notes amounting to $211,412,620.

The total outstanding circulating notes of all national banks on the
31st day of October, 1896, amounted to $234,553,807, including
unredeemed but fully secured notes of banks insolvent and in process of
liquidation. The increase in national-bank circulation during the year
ending on that day was $21,099,429. On October 6, 1896, when the
condition of national banks was last reported, the total resources of
the 3,679 active institutions were $3,263,685,313.83, which included
$1,893,268,839.31 in loans and discounts and $362,165,733.85 in money
of all kinds on hand. Of their liabilities $1,597,891,058.03 was due to
individual depositors and $209,944,019 consisted of outstanding
circulating notes.

There were organized during the year preceding the date last mentioned
28 national banks, located in 15 States, of which 12 were organized in
the Eastern States, with a capital of $1,180,000, 6 in the Western
States, with a capital of $875,000, and 10 in the Southern States, with
a capital of $1,190,000. During the year, however, 37 banks voluntarily
abandoned their franchises under the national law, and in the case of
27 others it was found necessary to appoint receivers. Therefore, as
compared with the year preceding, there was a decrease of 36 in the
number of active banks.

The number of existing banks organized under State laws is 5,708. The
number of immigrants arriving in the United States during the fiscal
year was 343,267, of whom 340,468 were permitted to land and 2,799 were
debarred on various grounds prescribed by law and returned to the
countries whence they came at the expense of the steamship companies by
which they were brought in. The increase in immigration over the
preceding year amounted to 84,731. It is reported that with some
exceptions the immigrants of the past year were of a hardy laboring
class, accustomed and able to earn a support for themselves, and it is
estimated that the money brought with them amounted to at least
$5,000,000, though it was probably much in excess of that sum, since
only those having less than $30 are required to disclose the exact
amount, and it is known that many brought considerable sums of money to
buy land and build homes. Including all the immigrants arriving who
were over 14 years of age, 28.63 per cent were illiterate, as against
20.37 per cent of those of that age arriving during the preceding
fiscal year. The number of immigrants over 14 years old, the countries
from which they came, and the percentage of illiterates among them were
as follows: Italy, 57,515, with 54.59 per cent; Ireland, 37,496, with 7
per cent; Russia, 35,188, with 41.14 per cent; Austria-Hungary and
provinces, 57,053, with 38.92 per cent; Germany, 25,334, with 2.96 per
cent; Sweden, 18,821, with 1.16 per cent; while from Portugal there
came 2,067, of whom 77.69 per cent were illiterate. There arrived from
Japan during the year only 1,110 immigrants, and it is the opinion of
the immigration authorities that the apprehension heretofore existing
to some extent of a large immigration from Japan to the United States
is without any substantial foundation.

From the Life-Saving Service it is reported that the number of
disasters to documented vessels within the limits of its operations
during the year was 437. These vessels had on board 4,608 persons, of
whom 4,595 were saved and 13 lost. The value of such vessels is
estimated at $8,880,140 and of their cargoes $3,846,380, making the
total value of property imperiled $12,726,520. Of this amount
$11,292,707 was saved and $1,432,750 was lost. Sixty-seven of the
vessels were totally wrecked. There were besides 243 casualties to
small undocumented craft, on board of which there were 594 persons, of
whom 587 were saved and 7 were lost. The value of the property involved
in these latter casualties is estimated at $119,265, of which $114,915
was saved and $4,350 was lost. The life-saving crews during the year
also rescued or assisted numerous other vessels and warned many from
danger by signals, both by day and night. The number of disasters
during the year exceeded that of any previous year in the history of
the service, but the saving of both life and property was greater than
ever before in proportion to the value of the property involved and to
the number of persons imperiled.

The operations of the Marine-Hospital Service, the Revenue-Cutter
Service, the Steamboat-Inspection Service, the Light-House Service, the
Bureau of Navigation, and other branches of public work attached to the
Treasury Department, together with various recommendations concerning
their support and improvement, are fully stated in the report of the
Secretary of the Treasury, to which the attention of the Congress is
especially invited.

The report of the Secretary of War exhibits satisfactory conditions in
the several branches of the public service intrusted to his charge.

The limit of our military force as fixed by law is constantly and
readily maintained. The present discipline and morale of our Army are
excellent, and marked progress and efficiency are apparent throughout
its entire organization.

With the exception of delicate duties in the suppression of slight
Indian disturbances along our southwestern boundary, in which the
Mexican troops cooperated, and the compulsory but peaceful return, with
the consent of Great Britain, of a band of Cree Indians from Montana to
the British possessions, no active operations have been required of the
Army during the year past.

Changes in methods of administration, the abandonment of unnecessary
posts and consequent concentration of troops, and the exercise of care
and vigilance by the various officers charged with the responsibility
in the expenditure of the appropriations have resulted in reducing to a
minimum the cost of maintenance of our military establishment.

During the past year the work of constructing permanent infantry and
cavalry posts has been continued at the places heretofore designated.
The Secretary of War repeats his recommendation that appropriations for
barracks and quarters should more strictly conform to the needs of the
service as judged by the Department rather than respond to the wishes
and importunities of localities. It is imperative that much of the
money provided for such construction should now be allotted to the
erection of necessary quarters for the garrisons assigned to the coast
defenses, where many men will be needed to properly care for and
operate modern guns. It is essential, too, that early provision be made
to supply the necessary force of artillery to meet the demands of this
service.

The entire Army has now been equipped with the new magazine arms, and
wise policy demands that all available public and private resources
should be so employed as to provide within a reasonable time a
sufficient number to supply the State militia with these modern weapons
and provide an ample reserve for any emergency.

The organized militia numbers 112,879 men. The appropriations for its
support by the several States approximate $2,800,000 annually, and
$400,000 is contributed by the General Government. Investigation shows
these troops to be usually well drilled and inspired with much military
interest, but in many instances they are so deficient in proper arms
and equipment that a sudden call to active duty would find them
inadequately prepared for field service. I therefore recommend that
prompt measures be taken to remedy this condition and that every
encouragement be given to this deserving body of unpaid and voluntary
citizen soldiers, upon whose assistance we must largely rely in time of
trouble.

During the past year rapid progress has been made toward the completion
of the scheme adopted for the erection and armament of fortifications
along our seacoast, while equal progress has been made in providing the
material for submarine defense in connection with these works.

It is peculiarly gratifying at this time to note the great advance that
has been made in this important undertaking since the date of my annual
message to the Fifty-third Congress at the opening of its second
session, in December, 1893. At that time I informed the Congress of the
approaching completion of nine 12-inch, twenty 10-inch, and thirty-four
8-inch high-power steel guns and seventy-five 12-inch rifled mortars.

This total then seemed insignificant when compared with the great work
remaining to be done. Yet it was none the less a source of satisfaction
to every citizen when he reflected that it represented the first
installment of the new ordnance of American design and American
manufacture and demonstrated our ability to supply from our own
resources guns of unexcelled power and accuracy.

At that date, however, there were practically no carriages upon which
to mount these guns and only thirty-one emplacements for guns and
sixty-four for mortars. Nor were all these emplacements in condition to
receive their armament. Only one high-power gun was at that time in
position for the defense of the entire coast.

Since that time the number of guns actually completed has been
increased to a total of twenty-one 12-inch, fifty-six 10-inch,
sixty-one 8-inch high-power breech-loading steel guns, ten rapid-fire guns,
and eighty 12-inch rifled mortars. In addition there are in process of
construction one 16-inch-type gun, fifty 12-inch, fifty-six 10-inch,
twenty-seven 8-inch high-power guns, and sixty-six 12-inch rifled
mortars; in all, four hundred and twenty-eight guns and mortars.

During the same year, immediately preceding the message referred to,
the first modern gun carriage had been completed and eleven more were
in process of construction. All but one were of the nondisappearing
type. These, however, were not such as to secure necessary cover for
the artillery gunners against the intense fire of modern machine
rapid-fire and high-power guns.

The inventive genius of ordnance and civilian experts has been taxed in
designing carriages that would obviate this fault, resulting, it is
believed, in the solution of this difficult problem. Since 1893 the
number of gun carriages constructed or building has been raised to a
total of 129, of which 90 are on the disappearing principle, and the
number of mortar carriages to 152, while the 95 emplacements which were
provided for prior to that time have been increased to 280 built and
building.

This improved situation is largely due to the recent generous response
of Congress to the recommendations of the War Department.

Thus we shall soon have complete about one-fifth of the comprehensive
system the first step in which was noted in my message to the Congress
of December 4, 1893.

When it is understood that a masonry emplacement not only furnishes a
platform for the heavy modern high-power gun, but also in every
particular serves the purpose and takes the place of the fort of former
days, the importance of the work accomplished is better comprehended.

In the hope that the work will be prosecuted with no less vigor in the
future, the Secretary of War has submitted an estimate by which, if
allowed, there will be provided and either built or building by the end
of the next fiscal year such additional guns, mortars, gun carriages,
and emplacements as will represent not far from one-third of the total
work to be done under the plan adopted for our coast defenses, thus
affording a prospect that the entire work will be substantially
completed within six years. In less time than that, however, we shall
have attained a marked degree of security.

The experience and results of the past year demonstrate that with a
continuation of present careful methods the cost of the remaining work
will be much less than the original estimate.

We should always keep in mind that of all forms of military preparation
coast defense alone is essentially pacific in its nature. While it
gives the sense of security due to a consciousness of strength, it is
neither the purpose nor the effect of such permanent fortifications to
involve us in foreign complications, but rather to guarantee us against
them. They are not temptation to war, but security against it. Thus
they are thoroughly in accord with all the traditions of our national
diplomacy.

The Attorney-General presents a detailed and interesting statement of
the important work done under his supervision during the last fiscal
year.

The ownership and management by the Government of penitentiaries for
the confinement of those convicted in United States courts of
violations of Federal laws, which for many years has been a subject of
Executive recommendation, have at last to a slight extent been realized
by the utilization of the abandoned military prison at Fort Leavenworth
as a United States penitentiary.

This is certainly a movement in the right direction, but it ought to be
at once supplemented by the rebuilding or extensive enlargement of this
improvised prison and the construction of at least one more, to be
located in the Southern States. The capacity of the Leavenworth
penitentiary is so limited that the expense of its maintenance,
calculated at a per capita rate upon the number of prisoners it can
accommodate, does not make as economical an exhibit as it would if it
were larger and better adapted to prison purposes; but I am thoroughly
convinced that economy, humanity, and a proper sense of responsibility
and duty toward those whom we punish for violations of Federal law
dictate that the Federal Government should have the entire control and
management of the penitentiaries where convicted violators are confined.

It appears that since the transfer of the Fort Leavenworth Military
Prison to its new uses the work previously done by prisoners confined
there, and for which expensive machinery has been provided, has been
discontinued. This work consisted of the manufacture of articles for
army use, now done elsewhere. On all grounds it is exceedingly
desirable that the convicts confined in this penitentiary be allowed to
resume work of this description.

It is most gratifying to note the satisfactory results that have
followed the inauguration of the new system provided for by the act of
May 28, 1896, under which certain Federal officials are compensated by
salaries instead of fees. The new plan was put in operation on the 1st
day of July, 1896, and already the great economy it enforces, its
prevention of abuses, and its tendency to a better enforcement of the
laws are strikingly apparent. Detailed evidence of the usefulness of
this long-delayed but now happily accomplished reform will be found
clearly set forth in the Attorney-General's report.

Our Post-Office Department is in good condition, and the exhibit made
of its operations during the fiscal year ended June 30, 1896, if
allowance is made for imperfections in the laws applicable to it, is
very satisfactory. The total receipts during the year were
$82,499,208.40. The total expenditures were $90,626,296.84, exclusive
of the $1,559,898.27 which was earned by the Pacific Railroad for
transportation and credited on their debt to the Government. There was
an increase of receipts over the previous year of $5,516,080.21, or 7.1
per cent, and an increase of expenditures of $3,836,124.02, or 4.42 per
cent. The deficit was $1,679,956.19 less than that of the preceding
year. The chief expenditures of the postal service are regulated by law
and are not in the control of the Postmaster-General. All that he can
accomplish by the most watchful administration and economy is to
enforce prompt and thorough collection and accounting for public moneys
and such minor savings in small expenditures and in letting those
contracts, for post-office supplies and star service, which are not
regulated by statute.

An effective cooperation between the Auditor's Office and the
Post-Office Department and the making and enforcement of orders by the
Department requiring immediate notification to their sureties of all
delinquencies on the part of postmasters, and compelling such
postmasters to make more frequent deposits of postal funds, have
resulted in a prompter auditing of their accounts and much less default
to the Government than heretofore.

The year's report shows large extensions of both star-route service and
railway mail service, with increased postal facilities. Much higher
accuracy in handling mails has also been reached, as appears by the
decrease of errors in the railway mail service and the reduction of
mail matter returned to the Dead-Letter Office.

The deficit for the last year, although much less than that of the last
and preceding years, emphasizes the necessity for legislation to
correct the growing abuse of second-class rates, to which the
deficiency is mainly attributable. The transmission at the rate of 1
cent a pound of serial libraries, advertising sheets, "house organs"
(periodicals advertising some particular "house" or institution),
sample copies, and the like ought certainly to be discontinued. A
glance at the revenues received for the work done last year will show
more plainly than any other statement the gross abuse of the postal
service and the growing waste of its earnings.

The free matter carried in the mails for the Departments, offices, etc.,
of the Government and for Congress, in pounds, amounted to 94,480,189.

If this is offset against buildings for post-offices and stations, the
rental of which would more than compensate for such free postal service,
we have this exhibit:

Weight of mail matter (other than above) transmitted through the mails
for the year ending June 30, 1896.
Class   Weight  Revenue
        Pounds
1. Domestic and foreign letters and postal cards, etc   65,337,343    $60,624,464
2. Newspapers and periodicals, 1 cent per pound        348,988,648      2,996,403
3. Books, seeds, etc., 8 cents a pound                  78,701,148     10,324,069
4. Parcels, etc., 16 cents a pound                      19,950,187      3,129,321
                                                       -----------    -----------
Total                                                  512,977,326     77,044,257

The remainder of our postal revenue, amounting to something more than
$5,000,000, was derived from box rents, registry fees, money-order
business, and other similar items.

The entire expenditures of the Department, including pay for
transportation credited to the Pacific railroads, were $92,186,195.11,
which may be considered as the cost of receiving, carrying, and
delivering the above mail matter. It thus appears that though the
second-class matter constituted more than two-thirds of the total that
was carried, the revenue derived from it was less than one-thirtieth of
the total expense.

The average revenue was--
From each pound of first-class matter ........... cents      93.0
From each pound of second class ................. mills       8.5
From each pound of third class .................. cents      13.1
From each pound of fourth class ................. do         15.6

Of the second class 52,348,297 was county-free matter.

The growth in weight of second-class matter has been from 299,000,000
pounds in 1894 to 312,000,000 in 1895 and to almost 349,000,000 in 1896,
and it is quite evident this increasing drawback is far outstripping
any possible growth of postal revenues.

Our mail service should of course be such as to meet the wants and even
the conveniences of our people at a direct charge upon them so light as
perhaps to exclude the idea of our Post-Office Department being a
money-making concern; but in the face of a constantly recurring
deficiency in its revenues and in view of the fact that we supply the
best mail service in the world it seems to me it is quite time to
correct the abuses that swell enormously our annual deficit. If we
concede the public policy of carrying weekly newspapers free in the
county of publication, and even the policy of carrying at less than
one-tenth of their cost other bona fide newspapers and periodicals,
there can be no excuse for subjecting the service to the further
immense and increasing loss involved in carrying at the nominal rate of
1 cent a pound the serial libraries, sometimes including trashy and
even harmful literature, and other matter which under the loose
interpretation of a loose statute have been gradually given second-class
rates, thus absorbing all profitable returns derived from first-class
matter, which pays three or four times more than its cost, and
producing a large annual loss to be paid by general taxation. If such
second-class matter paid merely the cost of its handling, our deficit
would disappear and a surplus result which might be used to give the
people still better mail facilities or cheaper rates of letter postage.
I recommend that legislation be at once enacted to correct these abuses
and introduce better business ideas in the regulation of our postal
rates.

Experience and observation have demonstrated that certain improvements
in the organization of the Post-Office Department must be secured
before we can gain the full benefit of the immense sums expended in its
administration. This involves the following reforms, which I earnestly
recommend:

There should be a small addition to the existing inspector service, to
be employed in the supervision of the carrier force, which now numbers
13,000 men and performs its service practically without the
surveillance exercised over all other branches of the postal or public
service. Of course such a lack of supervision and freedom from
wholesome disciplinary restraints must inevitably lead to imperfect
service. There should also be appointed a few inspectors who could
assist the central office in necessary investigation concerning matters
of post-office leases, post-office sites, allowances for rent, fuel,
and lights, and in organizing and securing the best results from the
work of the 14,000 clerks now employed in first and second class
offices.

I am convinced that the small expense attending the inauguration of
these reforms would actually be a profitable investment.

I especially recommend such a recasting of the appropriations by
Congress for the Post-Office Department as will permit the Postmaster-General
to proceed with the work of consolidating post-offices. This
work has already been entered upon sufficiently to fully demonstrate by
experiment and experience that such consolidation is productive of
better service, larger revenues, and less expenditures, to say nothing
of the further advantage of gradually withdrawing post-offices from the
spoils system.

The Universal Postal Union, which now embraces all the civilized world
and whose delegates will represent 1,000,000,000 people, will hold its
fifth congress in the city of Washington in May, 1897. The United
States may be said to have taken the initiative which led to the first
meeting of this congress, at Berne in 1874, and the formation of the
Universal Postal Union, which brings the postal service of all
countries to every man's neighborhood and has wrought marvels in
cheapening postal rates and securing absolutely safe mail communication
throughout the world. Previous congresses have met in Berne, Paris,
Lisbon, and Vienna, and the respective countries in which they have
assembled have made generous provision for their accommodation and for
the reception and entertainment of the delegates.

In view of the importance of this assemblage and of its deliberations
and of the honors and hospitalities accorded to our representatives by
other countries on similar occasions, I earnestly hope that such an
appropriation will be made for the expenses necessarily attendant upon
the coming meeting in our capital city as will be worthy of our
national hospitality and indicative of our appreciation of the event.

The work of the Navy Department and its present condition are fully
exhibited in the report of the Secretary.

The construction of vessels for our new Navy has been energetically
prosecuted by the present Administration upon the general lines
previously adopted, the Department having seen no necessity for radical
changes in prior methods, under which the work was found to be
progressing in a manner highly satisfactory. It has been decided,
however, to provide in every shipbuilding contract that the builder
should pay all trial expenses, and it has also been determined to pay
no speed premiums in future contracts. The premiums recently earned and
some yet to be decided are features of the contracts made before this
conclusion was reached.

On March 4, 1893, there were in commission but two armored vessels--the
double-turreted monitors Miantonomoh and Monterey. Since that date, of
vessels theretofore authorized, there have been placed in their first
commission 3 first-class and 2 second-class battle ships, 2 armored
cruisers, 1 harbor-defense ram, and 5 double-turreted monitors,
including the Maine and the Puritan, just completed. Eight new
unarmored cruisers and 2 new gunboats have also been commissioned. The
Iowa, another battle ship, will be completed about March 1, and at
least 4 more gunboats will be ready for sea in the early spring.

It is gratifying to state that our ships and their outfits are believed
to be equal to the best that can be manufactured elsewhere, and that
such notable reductions have been made in their cost as to justify the
statement that quite a number of vessels are now being constructed at
rates as low as those that prevail in European shipyards.

Our manufacturing facilities are at this time ample for all possible
naval contingencies. Three of our Government navy-yards--those at Mare
Island, Cal., Norfolk, Va., and Brooklyn, N. Y.--are equipped for
shipbuilding, our ordnance plant in Washington is equal to any in the
world, and at the torpedo station we are successfully making the
highest grades of smokeless powder. The first-class private shipyards
at Newport News, Philadelphia, and San Francisco are building battle
ships; eleven contractors, situated in the States of Maine, Rhode
Island, Pennsylvania, New Jersey, Maryland, Virginia, and the State of
Washington, are constructing gunboats or torpedo boats; two plants are
manufacturing large quantities of first-class armor, and American
factories are producing automobile torpedoes, powder, projectiles,
rapid-fire guns, and everything else necessary for the complete outfit
of naval vessels.

There have been authorized by Congress since March, 1893, 5 battle
ships, 6 light-draft gunboats, 16 torpedo boats, and 1 submarine
torpedo boat. Contracts for the building of all of them have been let.
The Secretary expresses the opinion that we have for the present a
sufficient supply of cruisers and gunboats, and that hereafter the
construction of battle ships and torpedo boats will supply our needs.

Much attention has been given to the methods of carrying on
departmental business. Important modifications in the regulations have
been made, tending to unify the control of shipbuilding as far as may
be under the Bureau of Construction and Repair, and also to improve the
mode of purchasing supplies for the Navy by the Bureau of Supplies and
Accounts. The establishment under recent acts of Congress of a supply
fund with which to purchase these supplies in large quantities and
other modifications of methods have tended materially to their
cheapening and better quality.

The War College has developed into an institution which it is believed
will be of great value to the Navy in teaching the science of war, as
well as in stimulating professional zeal in the Navy, and it will be
especially useful in the devising of plans for the utilization in case
of necessity of all the naval resources of the United States.

The Secretary has persistently adhered to the plan he found in
operation for securing labor at navy-yards through boards of labor
employment, and has done much to make it more complete and efficient.
The naval officers who are familiar with this system and its operation
express the decided opinion that its results have been to vastly
improve the character of the work done at our yards and greatly reduce
its cost.

Discipline among the officers and men of the Navy has been maintained
to a high standard and the percentage of American citizens enlisted has
been very much increased.

The Secretary is considering and will formulate during the coming
winter a plan for laying up ships in reserve, thereby largely reducing
the cost of maintaining our vessels afloat. This plan contemplates that
battle ships, torpedo boats, and such of the cruisers as are not needed
for active service at sea shall be kept in reserve with skeleton crews
on board to keep them in condition, cruising only enough to insure the
efficiency of the ships and their crews in time of activity.

The economy to result from this system is too obvious to need comment.

The Naval Militia, which was authorized a few years ago as an
experiment, has now developed into a body of enterprising young men,
active and energetic in the discharge of their duties and promising
great usefulness. This establishment has nearly the same relation to
our Navy as the National Guard in the different States bears to our
Army, and it constitutes a source of supply for our naval forces the
importance of which is immediately apparent.

The report of the Secretary of the Interior presents a comprehensive
and interesting exhibit of the numerous and important affairs committed
to his supervision. It is impossible in this communication to do more
than briefly refer to a few of the subjects concerning which the
Secretary gives full and instructive information.

The money appropriated on account of this Department and for its
disbursement for the fiscal year ended June 30, 1896, amounted to more
than $157,000,000, or a greater sum than was appropriated for the
entire maintenance of the Government for the two fiscal years ended
June 30, 1861.

Our public lands, originally amounting to 1,840,000,000 acres, have
been so reduced that only about 600,000,000 acres still remain in
Government control, excluding Alaska. The balance, being by far the
most valuable portion, has been given away to settlers, to new States,
and to railroads or sold at a comparatively nominal sum. The patenting
of land in execution of railroad grants has progressed rapidly during
the year, and since the 4th day of March, 1893, about 25,000,000 acres
have thus been conveyed to these corporations.

I agree with the Secretary that the remainder of our public lands
should be more carefully dealt with and their alienation guarded by
better economy and greater prudence.

The commission appointed from the membership of the National Academy of
Sciences, provided for by an act of Congress, to formulate plans for a
national forestry system will, it is hoped, soon be prepared to present
the result of thorough and intelligent examination of this important
subject.

The total Indian population of the United States is 177,235, according
to a census made in 1895, exclusive of those within the State of New
York and those comprising the Five Civilized Tribes. Of this number
there are approximately 38,000 children of school age. During the year
23,393 of these were enrolled in schools. The progress which has
attended recent efforts to extend Indian-school facilities and the
anticipation of continued liberal appropriations to that end can not
fail to afford the utmost satisfaction to those who believe that the
education of Indian children is a prime factor in the accomplishment of
Indian civilization.

It may be said in general terms that in every particular the
improvement of the Indians under Government care has been most marked
and encouraging.

The Secretary, the Commissioner of Indian Affairs, and the agents
having charge of Indians to whom allotments have been made strongly
urge the passage of a law prohibiting the sale of liquor to allottees
who have taken their lands in severalty. I earnestly join in this
recommendation and venture to express the hope that the Indian may be
speedily protected against this greatest of all obstacles to his
well-being and advancement.

The condition of affairs among the Five Civilized Tribes, who occupy
large tracts of land in the Indian Territory and who have governments
of their own, has assumed such an aspect as to render it almost
indispensable that there should be an entire change in the relations of
these Indians to the General Government. This seems to be necessary in
furtherance of their own interests, as well as for the protection of
non-Indian residents in their territory. A commission organized and
empowered under several recent laws is now negotiating with these
Indians for the relinquishment of their courts and the division of
their common lands in severalty and are aiding in the settlement of the
troublesome question of tribal membership. The reception of their first
proffers of negotiation was not encouraging, but through patience and
such conduct on their part as demonstrated that their intentions were
friendly and in the interest of the tribes the prospect of success has
become more promising. The effort should be to save these Indians from
the consequences of their own mistakes and improvidence and to secure
to the real Indian his rights as against intruders and professed
friends who profit by his retrogression. A change is also needed to
protect life and property through the operation of courts conducted
according to strict justice and strong enough to enforce their mandates.

As a sincere friend of the Indian, I am exceedingly anxious that these
reforms should be accomplished with the consent and aid of the tribes
and that no necessity may be presented for radical or drastic
legislation I hope, therefore, that the commission now conducting
negotiations will soon be able to report that progress has been made
toward a friendly adjustment of existing difficulties.

It appears that a very valuable deposit of gilsonite or asphaltum has
been found on the reservation in Utah occupied by the Uncompahgre Ute
Indians. Every consideration of care for the public interest and every
sensible business reason dictate such management or disposal of this
important source of public revenue as will except it from the general
rules and incidents attending the ordinary disposition of public lands
and secure to the Government a fair share at least of its advantages in
place of its transfer for a nominal sum to interested individuals.

I indorse the recommendation made by the present Secretary of the
Interior, as well as his predecessor, that a permanent commission,
consisting of three members, one of whom shall be an army officer, be
created to perform the duties now devolving upon the Commissioner and
Assistant Commissioner of Indian Affairs. The management of the Bureau
involves such numerous and diverse details and the advantages of an
uninterrupted policy are so apparent that I hope the change suggested
will meet the approval of the Congress.

The diminution of our enormous pension roll and the decrease of pension
expenditure, which have been so often confidently for told, still fail
in material realization. The number of pensioners on the polls at the
close of the fiscal year ended June 30, 1896, was 970,678. This is the
largest number ever reported. The amount paid exclusively for pensions
during the year was $138,214,761.94, a slight decrease from that of the
preceding year, while the total expenditures on account of pensions,
including the cost of maintaining the Department and expenses attending
pension distribution, amounted to $142,206,550.59, or within every
small fraction of one-third of the entire expense of supporting the
Government during the same year. The number of new pension certificates
issued was 90,640. Of these, 40,374 represent original allowances of
claims and 15,878 increases of existing pensions.

The number of persons receiving pensions from the United States, but
residing in foreign countries, at the close of the last fiscal year was
3,781, and the amount paid to them during the year was $582,735.38.

The sum appropriated for the payment of pensions for the current fiscal
year, ending June 30, 1897, is $140,000,000, and for the succeeding
year it is estimated that the same amount will be necessary.

The Commissioner of Pensions reports that during the last fiscal year
339 indictments were found against violators of the pension laws. Upon
these indictments 167 convictions resulted.

In my opinion, based upon such statements as these and much other
information and observation, the abuses which have been allowed to
creep into our pension system have done incalculable harm in
demoralizing our people and undermining good citizenship. I have
endeavored within my sphere of official duty to protect our pension
roll and make it what it should be, a roll of honor, containing the
names of those disabled in their country's service and worthy of their
country's affectionate remembrance. When I have seen those who pose as
the soldiers' friends active and alert in urging greater laxity and
more reckless pension expenditure, while nursing selfish schemes, I
have deprecated the approach of a situation when necessary retrenchment
and enforced economy may lead to an attack upon pension abuses so
determined as to overlook the discrimination due to those who, worthy
of a nation's care, ought to live and die under the protection of a
nation's gratitude.

The Secretary calls attention to the public interests involved in an
adjustment of the obligations of the Pacific railroads to the
Government. I deem it to be an important duty to especially present
this subject to the consideration of the Congress.

On January 1, 1897, with the amount already matured, more than
$13,000,000 of the principal of the subsidy bonds issued by the United
States in aid of the construction of the Union Pacific Railway,
including its Kansas line, and more than $6,000,000 of like bonds
issued in aid of the Central Pacific Railroad, including those issued
to the Western Pacific Railroad Company, will have fallen due and been
paid or must on that day be paid by the Government. Without any
reference to the application of the sinking fund now in the Treasury,
this will create such a default on the part of these companies to the
Government as will give it the right to at once institute proceedings
to foreclose its mortgage lien. In addition to this indebtedness, which
will be due January 1, 1897, there will mature between that date and
January 1, 1899, the remaining principal of such subsidy bonds, which
must also be met by the Government. These amount to more than
$20,000,000 on account of the Union Pacific lines and exceed
$21,000,000 on account of the Central Pacific lines.

The situation of these roads and the condition of their indebtedness to
the Government have been fully set forth in the reports of various
committees to the present and prior Congresses, and as early as 1887
they were thoroughly examined by a special commission appointed
pursuant to an act of Congress. The considerations requiring an
adjustment of the Government's relations to the companies have been
clearly presented and the conclusion reached with practical uniformity
that if these relations are not terminated they should be revised upon
a basis securing their safe continuance.

Under section 4 of the act of Congress passed March 3, 1887, the
President is charged with the duty, in the event that any mortgage or
other incumbrance paramount to the interest of the United States in the
property of the Pacific railroads should exist and be lawfully liable
to be enforced, to direct the action of the Departments of Treasury and
of justice in the protection of the interest of the United States by
redemption or through judicial proceedings, including foreclosures of
the Government liens.

In view of the fact that the Congress has for a number of years almost
constantly had under consideration various plans for dealing with the
conditions existing between these roads and the Government, I have thus
far felt justified in withholding action under the statute above
mentioned.

In the case of the Union Pacific Company, however, the situation has
become especially and immediately urgent. Proceedings have been
instituted to foreclose a first mortgage upon those aided parts of the
main lines upon which the Government holds a second and subordinate
mortgage lien. In consequence of those proceedings and increasing
complications, added to the default occurring on the 1st day of January,
1897, a condition will be presented at that date, so far as this
company is concerned, that must emphasize the mandate of the act of
1887 and give to Executive duty under its provisions a more imperative
aspect. Therefore, unless Congress shall otherwise direct or shall have
previously determined upon a different solution of the problem, there
will hardly appear to exist any reason for delaying beyond the date of
the default above mentioned such Executive action as will promise to
subserve the public interests and save the Government from the loss
threatened by further inaction.

The Department of Agriculture is so intimately related to the welfare
of our people and the prosperity of our nation that it should
constantly receive the care and encouragement of the Government. From
small beginnings it has grown to be the center of agricultural
intelligence and the source of aid and encouragement to agricultural
efforts. Large sums of money are annually appropriated for the
maintenance of this Department, and it must be confessed that the
legislation relating to it has not always been directly in the interest
of practical farming or properly guarded against waste and extravagance.
So far, however, as public money has been appropriated fairly and
sensibly to help those who actually till the soil, no expenditure has
been more profitably made or more generally approved by the people.

Under the present management of the Department its usefulness has been
enhanced in every direction, and at the same time strict economy has
been enforced to the utmost extent permitted by Congressional action.
From the report of the Secretary it appears that through careful and
prudent financial management he has annually saved a large sum from his
appropriations, aggregating during his incumbency and up to the close
of the present fiscal year nearly one-fifth of the entire amount
appropriated. These results have been accomplished by a conscientious
study of the real needs of the farmer and such a regard for economy as
the genuine farmer ought to appreciate, supplemented by a rigid
adherence to civil-service methods in a Department which should be
conducted in the interest of agriculture instead of partisan politics.

The Secretary reports that the value of our exports of farm products
during the last fiscal year amounted to $570,000,000, an increase of
$17,000,000 over those of the year immediately preceding. This
statement is not the less welcome because of the fact that,
notwithstanding such increase, the proportion of exported agricultural
products to our total exports of all descriptions fell off during the
year. The benefits of an increase in agricultural exports being assured,
the decrease in its proportion to our total exports is the more
gratifying when we consider that it is owing to the fact that such
total exports for the year increased more than $75,000,000.

The large and increasing exportation of our agricultural products
suggests the great usefulness of the organization lately established in
the Department for the purpose of giving to those engaged in farming
pursuits reliable information concerning the condition, needs, and
advantages of different foreign markets. Inasmuch as the success of the
farmer depends upon the advantageous sale of his products, and inasmuch
as foreign markets must largely be the destination of such products, it
is quite apparent that a knowledge of the conditions and wants that
affect those markets ought to result in sowing more intelligently and
reaping with a better promise of profit. Such information points out
the way to a prudent foresight in the selection and cultivation of
crops and to a release from the bondage of unreasoning monotony of
production, a glutted and depressed market, and constantly recurring
unprofitable toil.

In my opinion the gratuitous distribution of seeds by the Department as
at present conducted ought to be discontinued. No one can read the
statement of the Secretary on this subject and doubt the extravagance
and questionable results of this practice. The professed friends of the
farmer, and certainly the farmers themselves, are naturally expected to
be willing to rid a Department devoted to the promotion of farming
interests of a feature which tends so much to its discredit.

The Weather Bureau, now attached to the Department of Agriculture, has
continued to extend its sphere of usefulness, and by an uninterrupted
improvement in the accuracy of its forecasts has greatly increased its
efficiency as an aid and protection to all whose occupations are
related to weather conditions.

Omitting further reference to the operations of the Department, I
commend the Secretary's report and the suggestions it contains to the
careful consideration of the Congress.

The progress made in civil-service reform furnishes a cause for the
utmost congratulation. It has survived the doubts of its friends as
well as the rancor of its enemies and has gained a permanent place
among the agencies destined to cleanse our politics and to improve,
economize, and elevate the public service.

There are now in the competitive classified service upward of 84,000
places, more than half of these having been included from time to time
since March 4, 1893. A most radical and sweeping extension was made by
Executive order dated the 6th day of May, 1896, and if fourth-class
postmasterships are not included in the statement it may be said that
practically all positions contemplated by the civil-service law are now
classified. Abundant reasons exist for including these postmaster-ships,
based upon economy, improved service, and the peace and quiet of
neighborhoods. If, however, obstacles prevent such action at present, I
earnestly hope that Congress will, without increasing post-office
appropriations, so adjust them as to permit in proper eases a
consolidation of these post-offices, to the end that through this
process the result desired may to a limited extent be accomplished.

The civil-service rules as amended during the last year provide for a
sensible and uniform method of promotion, basing eligibility to better
positions upon demonstrated efficiency and faithfulness. The absence of
fixed rules on this subject has been an infirmity in the system more
and more apparent as its other benefits have been better appreciated.

The advantages of civil-service methods in their business aspects are
too well understood to require argument. Their application has become a
necessity to the executive work of the Government. But those who gain
positions through the operation of these methods should be made to
understand that the nonpartisan scheme through which they receive their
appointments demands from them by way of reciprocity nonpartisan and
faithful performance of duty under every Administration and cheerful
fidelity to every chief. While they should be encouraged to decently
exercise their rights of citizenship and to support through their
suffrages the political beliefs they honestly profess, the noisy,
pestilent, and partisan employee, who loves political turmoil and
contention or who renders lax and grudging service to an Administration
not representing his political views, should be promptly and fearlessly
dealt with in such a way as to furnish a warning to others who may be
likewise disposed.

The annual report of the Commissioners will be duly transmitted, and I
commend the important matter they have in charge to the careful
consideration of the Congress.

The Interstate Commerce Commission has during the last year supplied
abundant evidence of its usefulness and the importance of the work
committed to its charge.

Public transportation is a universal necessity, and the question of
just and reasonable charges therefor has become of vital importance not
only to shippers and carriers, but also to the vast multitude of
producers and consumers. The justice and equity of the principles
embodied in the existing law passed for the purpose of regulating these
charges are everywhere conceded, and there appears to be no question
that the policy thus entered upon has a permanent place in our
legislation.

As the present statute when enacted was in the nature of the case more
or less tentative and experimental, it was hardly expected to supply a
complete and adequate system. While its wholesome effects are manifest
and have amply justified its enactment, it is evident that all desired
reforms in transportation methods have not been fully accomplished. In
view of the judicial interpretation which some provisions of this
statute have received and the defects disclosed by the efforts made for
its enforcement, its revision and amendment appear to be essential, to
the end that it may more effectually reach the evils designed to be
corrected. I hope the recommendations of the Commission upon this
subject will be promptly and favorably considered by the Congress.

I desire to recur to the statements elsewhere made concerning the
Government's receipts and expenditures for the purpose of venturing
upon some suggestions touching our present tariff law and its operation.

This statute took effect on the 28th day of August, 1894. Whatever may
be its shortcomings as a complete measure of tariff reform, it must be
conceded that it has opened the way to a freer and greater exchange of
commodities between us and other countries, and thus furnished a wider
market for our products and manufactures.

The only entire fiscal year during which this law has been in force
ended on the 30th day of June, 1896. In that year our imports increased
over those of the previous year more than $6,500,000, while the value
of the domestic products we exported and which found markets abroad was
nearly $70,000,000 more than during the preceding year.

Those who insist that the cost to our people of articles coming to them
from abroad for their needful use should only be increased through
tariff charges to an extent necessary to meet the expenses of the
Government, as well as those who claim that tariff charges may be laid
upon such articles beyond the necessities of Government revenue and
with the additional purpose of so increasing their price in our markets
as to give American manufacturers and producers better and more
profitable opportunities, must agree that our tariff laws are only
primarily justified as sources of revenue to enable the Government to
meet the necessary expenses of its maintenance. Considered as to its
efficiency in this aspect, the present law can by no means fall under
just condemnation. During the only complete fiscal year of its
operation it has yielded nearly $8,000,000 more revenue than was
received from tariff duties in the preceding year. There was,
nevertheless, a deficit between our receipts and expenditures of a
little more than $25,000,000 This, however, was not unexpected.

The situation was such in December last, seven months before the close
of the fiscal year, that the Secretary of the Treasury foretold a
deficiency of $17,000,000. The great and increasing apprehension and
timidity in business circles and the depression in all activities
intervening since that time, resulting from causes perfectly well
understood and entirely disconnected with our tariff law or its
operation, seriously checked the imports we would have otherwise
received and readily account for the difference between this estimate
of the Secretary and the actual deficiency, as well as for a continued
deficit. Indeed, it must be confessed that we could hardly have had a
more unfavorable period than the last two years for the collection of
tariff revenue. We can not reasonably hope that our recuperation from
this business depression will be sudden, but it has already set in with
a promise of acceleration and continuance.

I believe our present tariff law, if allowed a fair opportunity, will
in the near future yield a revenue which, with reasonably economical
expenditures, will overcome all deficiencies. In the meantime no
deficit that has occurred or may occur need excite or disturb us. To
meet any such deficit we have in the Treasury in addition to a gold
reserve of one hundred millions a surplus of more than $128,000,000
applicable to the payment of the expenses of the Government, and which
must, unless expended for that purpose, remain a useless hoard, or, if
not extravagantly wasted, must in any event be perverted from the
purpose of its exaction from our people. The payment, therefore, of any
deficiency in the revenue from this fund is nothing more than its
proper and legitimate use. The Government thus applying a surplus
fortunately in its Treasury to the payment of expenses not met by its
current revenues is not at all to be likened to a man living beyond his
income and thus incurring debt or encroaching on his principal.

It is not one of the functions of our Government to accumulate and make
additions to a fund not needed for immediate expenditure. With
individuals it is the chief object of struggle and effort. The
application of an accumulated fund by the Government to the payment of
its running expenses is a duty. An individual living beyond his income
and embarrassing himself with debt or drawing upon his accumulated fund
of principal is either unfortunate or improvident. The distinction is
between a government charged with the duty of expending for the benefit
of the people and for proper purposes all the money it receives from
any source, and the individual, who is expected to manifest a natural
desire to avoid debt or to accumulate as much as possible and to live
within the income derived from such accumulations, to the end that they
may be increased or at least remain unimpaired for the future use and
enjoyment of himself or the objects of his love and affection who may
survive him.

It is immeasurably better to appropriate our surplus to the payment of
justifiable expenses than to allow it to become an invitation to
reckless appropriations and extravagant expenditures.

I suppose it will not be denied that under the present law our people
obtain the necessaries of a comfortable existence at a cheaper rate
than formerly. This is a matter of supreme importance, since it is the
palpable duty of every just government to make the burdens of taxation
as light as possible. The people should not be required to relinquish
this privilege of cheaper living except under the stress of their
Government's necessity made plainly manifest.

This reference to the condition and prospects of our revenues naturally
suggests an allusion to the weakness and vices of our financial methods.
They have been frequently pressed upon the attention of Congress in
previous Executive communications and the inevitable danger of their
continued toleration pointed out. Without now repeating these details,
I can not refrain from again earnestly presenting the necessity of the
prompt reform of a system opposed to every rule of sound finance and
shown by experience to be fraught with the gravest peril and perplexity.
The terrible Civil War, which shook the foundations of our Government
more than thirty years ago, brought in its train the destruction of
property, the wasting of our country's substance, and the estrangement
of brethren. These are now past and forgotten. Even the distressing
loss of life the conflict entailed is but a sacred memory which fosters
patriotic sentiment and keeps alive a tender regard for those who nobly
died. And yet there remains with us to-day in full strength and
activity, as an incident of that tremendous struggle, a feature of its
financial necessities not only unsuited to our present circumstances,
but manifestly a disturbing menace to business security and an
ever-present agent of monetary distress.

Because we may be enjoying a temporary relief from its depressing
influence, this should not lull us into a false security nor lead us to
forget the suddenness of past visitations.

I am more convinced than ever that we can have no assured financial
peace and safety until the Government currency obligations upon which
gold may be demanded from the Treasury are withdrawn from circulation
and canceled. This might be done, as has been heretofore recommended,
by their exchange for long-term bonds bearing a low rate of interest or
by their redemption with the proceeds of such bonds. Even if only the
United States notes known as greenbacks were thus retired it is
probable that the Treasury notes issued in payment of silver purchases
under the act of July 14, 1890, now paid in gold when demanded, would
not create much disturbance, as they might from time to time, when
received in the Treasury by redemption in gold or otherwise, be
gradually and prudently replaced by silver coin.

This plan of issuing bonds for the purpose of redemption certainly
appears to be the most effective and direct path to the needed reform.
In default of this, however, it would be a step in the right direction
if currency obligations redeemable in gold whenever so redeemed should
be canceled instead of being reissued. This operation would be a slow
remedy, but it would improve present conditions.

National banks should redeem their own notes. They should be allowed to
issue circulation to the par value of bonds deposited as security for
its redemption and the tax on their circulation should be reduced to
one-fourth of 1 per cent.

In considering projects for the retirement of United States notes and
Treasury notes issued under the law of 1890, I am of the opinion that
we have placed too much stress upon the danger of contracting the
currency and have calculated too little upon the gold that would be
added to our circulation if invited to us by better and safer financial
methods. It is not so much a contraction of our currency that should be
avoided as its unequal distribution.

This might be obviated and any fear of harmful contraction at the same
time removed by allowing the organization of smaller banks and in less
populous communities than are now permitted, and also authorizing
existing banks to establish branches in small communities under proper
restrictions.

The entire case may be presented by the statement that the day of
sensible and sound financial methods will not dawn upon us until our
Government abandons the banking business and the accumulation of funds
and confines its monetary operations to the receipt of the money
contributed by the people for its support and to the expenditure of
such money for the people's benefit.

Our business interests and all good citizens long for rest from
feverish agitation and the inauguration by the Government of a reformed
financial policy which will encourage enterprise and make certain the
rewards of labor and industry.

Another topic in which our people rightfully take a deep interest may
be here briefly considered. I refer to the existence of trusts and
other huge aggregations of capital the object of which is to secure the
monopoly of some particular branch of trade, industry, or commerce and
to stifle wholesome competition. When these are defended, it is usually
on the ground that though they increase profits they also reduce prices,
and thus may benefit the public. It must be remembered, however, that a
reduction of prices to the people is not one of the real objects of
these organizations, nor is their tendency necessarily in that
direction. If it occurs in a particular case it is only because it
accords with the purposes or interests of those managing the scheme.

Such occasional results fall far short of compensating the palpable
evils charged to the account of trusts and monopolies. Their tendency
is to crush out individual independence and to hinder or prevent the
free use of human faculties and the full development of human character.
Through them the farmer, the artisan, and the small trader is in danger
of dislodgment from the proud position of being his own master,
watchful of all that touches his country's prosperity, in which he has
an individual lot, and interested in all that affects the advantages of
business of which he is a factor, to be relegated to the level of a
mere appurtenance to a great machine, with little free will, with no
duty but that of passive obedience, and with little hope or opportunity
of rising in the scale of responsible and helpful citizenship.

To the instinctive belief that such is the inevitable trend of trusts
and monopolies is due the widespread and deep-seated popular aversion
in which they are held and the not unreasonable insistence that,
whatever may be their incidental economic advantages, their general
effect upon personal character, prospects, and usefulness can not be
otherwise than injurious.

Though Congress has attempted to deal with this matter by legislation,
the laws passed for that purpose thus far have proved ineffective, not
because of any lack of disposition or attempt to enforce them, but
simply because the laws themselves as interpreted by the courts do not
reach the difficulty. If the insufficiencies of existing laws can be
remedied by further legislation, it should be done. The fact must be
recognized, however, that all Federal legislation on this subject may
fall short of its purpose because of inherent obstacles and also
because of the complex character of our governmental system, which,
while making the Federal authority supreme within its sphere, has
carefully limited that sphere by metes and bounds that can not be
transgressed. The decision of our highest court on this precise
question renders it quite doubtful whether the evils of trusts and
monopolies can be adequately treated through Federal action unless they
seek directly and purposely to include in their objects transportation
or intercourse between States or between the United States and foreign
countries.

It does not follow, however, that this is the limit of the remedy that
may be applied. Even though it may be found that Federal authority is
not broad enough to fully reach the case, there can be no doubt of the
power of the several States to act effectively in the premises, and
there should be no reason to doubt their willingness to judiciously
exercise such power.

In concluding this communication its last words shall be an appeal to
the Congress for the most rigid economy in the expenditure of the money
it holds in trust for the people. The way to perplexing extravagance is
easy, but a return to frugality is difficult. When, however, it is
considered that those who bear the burdens of taxation have no guaranty
of honest care save in the fidelity of their public servants, the duty
of all possible retrenchment is plainly manifest.

When our differences are forgotten and our contests of political
opinion are no longer remembered, nothing in the retrospect of our
public service will be as fortunate and comforting as the recollection
of official duty well performed and the memory of a constant devotion
to the interests of our confiding fellow-countrymen.

***

State of the Union Address
William McKinley
December 6, 1897

To the Senate and House of Representatives:

It gives me pleasure to extend greeting to the Fifty-fifth Congress,
assembled in regular session at the seat of Government, with many of
whose Senators and Representatives I have been associated in the
legislative service. Their meeting occurs under felicitous conditions,
justifying sincere congratulation and calling for our grateful
acknowledgment to a beneficent Providence which has so signally blessed
and prospered us as a nation. Peace and good will with all the nations
of the earth continue unbroken.

A matter of genuine satisfaction is the growing feeling of fraternal
regard and unification of all sections of our country, the
incompleteness of which has too long delayed realization of the highest
blessings of the Union. The spirit of patriotism is universal and is
ever increasing in fervor. The public questions which now most engross
us are lifted far above either partisanship, prejudice, or former
sectional differences. They affect every part of our common country
alike and permit of no division on ancient lines. Questions of foreign
policy, of revenue, the soundness of the currency, the inviolability of
national obligations, the improvement of the public service, appeal to
the individual conscience of every earnest citizen to whatever party he
belongs or in whatever section of the country he may reside.

The extra session of this Congress which closed during July last enacted
important legislation, and while its full effect has not yet been
realized, what it has already accomplished assures us of its timeliness
and wisdom. To test its permanent value further time will be required,
and the people, satisfied with its operation and results thus far, are
in no mind to withhold from it a fair trial.

Tariff legislation having been settled by the extra session of Congress,
the question next pressing for consideration is that of the currency.

The work of putting our finances upon a sound basis, difficult as it may
seem, will appear easier when we recall the financial operations of the
Government since 1866. On the 30th day of June of that year we had
outstanding demand liabilities in the sum of $728,868,447.41. On the 1st
of January, 1879, these liabilities had been reduced to $443,889,495.88.
Of our interest-bearing obligations, the figures are even more striking.
On July 1, 1866, the principal of the interest-bearing debt of the
Government was $2,332,331,208. On the 1st day of July, 1893, this sum
had been reduced to $585,137,100, or an aggregate reduction of
$1,747,294,108. The interest-bearing debt of the United States on the
1st day of December, 1897, was $847,365,620. The Government money now
outstanding (December 1) consists of $346,681,016 of United States
notes, $107,793,280 of Treasury notes issued by authority of the law of
1890, $384,963,504 of silver certificates, and $61,280,761 of standard
silver dollars.

With the great resources of the Government, and with the honorable
example of the past before us, we ought not to hesitate to enter upon a
currency revision which will make our demand obligations less onerous to
the Government and relieve our financial laws from ambiguity and doubt.

The brief review of what was accomplished from the close of the war to
1893, makes unreasonable and groundless any distrust either of our
financial ability or soundness; while the situation from 1893 to 1897
must admonish Congress of the immediate necessity of so legislating as
to make the return of the conditions then prevailing impossible.

There are many plans proposed as a remedy for the evil. Before we can
find the true remedy we must appreciate the real evil. It is not that
our currency of every kind is not good, for every dollar of it is good;
good because the Government's pledge is out to keep it so, and that
pledge will not be broken. However, the guaranty of our purpose to keep
the pledge will be best shown by advancing toward its fulfillment.

The evil of the present system is found in the great cost to the
Government of maintaining the parity of our different forms of money,
that is, keeping all of them at par with gold. We surely cannot be
longer heedless of the burden this imposes upon the people, even under
fairly prosperous conditions, while the past four years have
demonstrated that it is not only an expensive charge upon the
Government, but a dangerous menace to the National credit.

It is manifest that we must devise some plan to protect the Government
against bond issues for repeated redemptions. We must either curtail the
opportunity for speculation, made easy by the multiplied redemptions of
our demand obligations, or increase the gold reserve for their
redemption. We have $900,000,000 of currency which the Government by
solemn enactment has undertaken to keep at par with gold. Nobody is
obliged to redeem in gold but the Government. The banks are not required
to redeem in gold. The Government is obliged to keep equal with gold all
its outstanding currency and coin obligations, while its receipts are
not required to be paid in gold. They are paid in every kind of money
but gold, and the only means by which the Government can with certainty
get gold is by borrowing. It can get it in no other way when it most
needs it. The Government without any fixed gold revenue is pledged to
maintain gold redemption, which it has steadily and faithfully done, and
which, under the authority now given, it will continue to do.

The law which requires the Government, after having redeemed its United
States notes, to pay them out again as current funds, demands a constant
replenishment of the gold reserve. This is especially so in times of
business panic and when the revenues are insufficient to meet the
expenses of the Government. At such times the Government has no other
way to supply its deficit and maintain redemption but through the
increase of its bonded debt, as during the Administration of my
predecessor, when $262,315,400 of four-and-a-half per cent bonds were
issued and sold and the proceeds used to pay the expenses of the
Government in excess of the revenues and sustain the gold reserve. While
it is true that the greater part of the proceeds of these bonds were
used to supply deficient revenues, a considerable portion was required
to maintain the gold reserve.

With our revenues equal to our expenses, there would be no deficit
requiring the issuance of bonds. But if the gold reserve falls below
$100,000,000, how will it be replenished except by selling more bonds?
Is there any other way practicable under existing law? The serious
question then is, Shall we continue the policy that has been pursued in
the past; that is, when the gold reserve reaches the point of danger,
issue more bonds and supply the needed gold, or shall we provide other
means to prevent these recurring drains upon the gold reserve? If no
further legislation is had and the policy of selling bonds is to be
continued, then Congress should give the Secretary of the Treasury
authority to sell bonds at long or short periods, bearing a less rate of
interest than is now authorized by law.

I earnestly recommend, as soon as the receipts of the Government are
quite sufficient to pay all the expenses of the Government, that when
any of the United States notes are presented for redemption in gold and
are redeemed in gold, such notes shall be kept and set apart, and only
paid out in exchange for gold. This is an obvious duty. If the holder of
the United States note prefers the gold and gets it from the Government,
he should not receive back from the Government a United States note
without paying gold in exchange for it. The reason for this is made all
the more apparent when the Government issues an interest-bearing debt to
provide gold for the redemption of United States notes--a
non-interest-bearing debt. Surely it should not pay them out again
except on demand and for gold. If they are put out in any other way,
they may return again to be followed by another bond issue to redeem
them--another interest-bearing debt to redeem a non-interest-bearing
debt.

In my view, it is of the utmost importance that the Government should be
relieved from the burden of providing all the gold required for
exchanges and export. This responsibility is alone borne by the
Government, without any of the usual and necessary banking powers to
help itself. The banks do not feel the strain of gold redemption. The
whole strain rests upon the Government, and the size of the gold reserve
in the Treasury has come to be, with or without reason, the signal of
danger or of security. This ought to be stopped.

If we are to have an era of prosperity in the country, with sufficient
receipts for the expenses of the Government, we may feel no immediate
embarrassment from our present currency; but the danger still exists,
and will be ever present, menacing us so long as the existing system
continues. And, besides, it is in times of adequate revenues and
business tranquillity that the Government should prepare for the worst.
We cannot avoid, without serious consequences, the wise consideration
and prompt solution of this question.

The Secretary of the Treasury has outlined a plan, in great detail, for
the purpose of removing the threatened recurrence of a depleted gold
reserve and save us from future embarrassment on that account. To this
plan I invite your careful consideration.

I concur with the Secretary of the Treasury in his recommendation that
National banks be allowed to issue notes to the face value of the bonds
which they have deposited for circulation, and that the tax on
circulating notes secured by deposit of such bonds be reduced to
one-half of one per cent per annum. I also join him in recommending that
authority be given for the establishment of National banks with a
minimum capital of $25,000. This will enable the smaller villages and
agricultural regions of the country to be supplied with currency to meet
their needs.

I recommend that the issue of National bank notes be restricted to the
denomination of ten dollars and upwards. If the suggestions I have
herein made shall have the approval of Congress, then I would recommend
that National banks be required to redeem their notes in gold.

The most important problem with which this Government is now called upon
to deal pertaining to its foreign relations concerns its duty toward
Spain and the Cuban insurrection. Problems and conditions more or less
in common with those now existing have confronted this Government at
various times in the past. The story of Cuba for many years has been one
of unrest, growing discontent, an effort toward a larger enjoyment of
liberty and self-control, of organized resistance to the mother country,
of depression after distress and warfare, and of ineffectual settlement
to be followed by renewed revolt. For no enduring period since the
enfranchisement of the continental possessions of Spain in the Western
Continent has the condition of Cuba or the policy of Spain toward Cuba
not caused concern to the United States.

The prospect from time to time that the weakness of Spain's hold upon
the island and the political vicissitudes and embarrassments of the home
Government might lead to the transfer of Cuba to a continental power
called forth between 1823 and 1860 various emphatic declarations of the
policy of the United States to permit no disturbance of Cuba's
connection with Spain unless in the direction of independence or
acquisition by us through purchase, nor has there been any change of
this declared policy since upon the part of the Government.

The revolution which began in 1868 lasted for ten years despite the
strenuous efforts of the successive peninsular governments to suppress
it. Then as now the Government of the United States testified its grave
concern and offered its aid to put an end to bloodshed in Cuba. The
overtures made by General Grant were refused and the war dragged on,
entailing great loss of life and treasure and increased injury to
American interests, besides throwing enhanced burdens of neutrality upon
this Government. In 1878 peace was brought about by the truce of Zanjon,
obtained by negotiations between the Spanish commander, Martinez de
Campos, and the insurgent leaders.

The present insurrection broke out in February, 1895. It is not my
purpose at this time to recall its remarkable increase or to
characterize its tenacious resistance against the enormous forces massed
against it by Spain. The revolt and the efforts to subdue it carried
destruction to every quarter of the island, developing wide proportions
and defying the efforts of Spain for its suppression. The civilized code
of war has been disregarded, no less so by the Spaniards than by the
Cubans.

The existing conditions can not but fill this Government and the
American people with the gravest apprehension. There is no desire on the
part of our people to profit by the misfortunes of Spain. We have only
the desire to see the Cubans prosperous and contented, enjoying that
measure of self-control which is the inalienable right of man, protected
in their right to reap the benefit of the exhaustless treasures of their
country.

The offer made by my predecessor in April, 1896, tendering the friendly
offices of this Government, failed. Any mediation on our part was not
accepted. In brief, the answer read: "There is no effectual way to
pacify Cuba unless it begins with the actual submission of the rebels to
the mother country." Then only could Spain act in the promised
direction, of her own motion and after her own plans.

The cruel policy of concentration was initiated February 16, 1896. The
productive districts controlled by the Spanish armies were depopulated.
The agricultural inhabitants were herded in and about the garrison
towns, their lands laid waste and their dwellings destroyed. This policy
the late cabinet of Spain justified as a necessary measure of war and as
a means of cutting off supplies from the insurgents. It has utterly
failed as a war measure. It was not civilized warfare. It was
extermination.

Against this abuse of the rights of war I have felt constrained on
repeated occasions to enter the firm and earnest protest of this
Government. There was much of public condemnation of the treatment of
American citizens by alleged illegal arrests and long imprisonment
awaiting trial or pending protracted judicial proceedings. I felt it my
first duty to make instant demand for the release or speedy trial of all
American citizens under arrest. Before the change of the Spanish cabinet
in October last twenty-two prisoners, citizens of the United States, had
been given their freedom.

For the relief of our own citizens suffering because of the conflict the
aid of Congress was sought in a special message, and under the
appropriation of May 24, 1897, effective aid has been given to American
citizens in Cuba, many of them at their own request having been returned
to the United States.

The instructions given to our new minister to Spain before his departure
for his post directed him to impress upon that Government the sincere
wish of the United States to lend its aid toward the ending of the war
in Cuba by reaching a peaceful and lasting result, just and honorable
alike to Spain and to the Cuban people. These instructions recited the
character and duration of the contest, the widespread losses it entails,
the burdens and restraints it imposes upon us, with constant disturbance
of national interests, and the injury resulting from an indefinite
continuance of this state of things. It was stated that at this juncture
our Government was constrained to seriously inquire if the time was not
ripe when Spain of her own volition, moved by her own interests and
every sentiment of humanity, should put a stop to this destructive war
and make proposals of settlement honorable to herself and just to her
Cuban colony. It was urged that as a neighboring nation, with large
interests in Cuba, we could be required to wait only a reasonable time
for the mother country to establish its authority and restore peace and
order within the borders of the island; that we could not contemplate an
indefinite period for the accomplishment of this result.

No solution was proposed to which the slightest idea of humiliation to
Spain could attach, and, indeed, precise proposals were withheld to
avoid embarrassment to that Government. All that was asked or expected
was that some safe way might be speedily provided and permanent peace
restored. It so chanced that the consideration of this offer, addressed
to the same Spanish administration which had declined the tenders of my
predecessor, and which for more than two years had poured men and
treasure into Cuba in the fruitless effort to suppress the revolt, fell
to others. Between the departure of General Woodford, the new envoy, and
his arrival in Spain the statesman who had shaped the policy of his
country fell by the hand of an assassin, and although the cabinet of the
late premier still held office and received from our envoy the proposals
he bore, that cabinet gave place within a few days thereafter to a new
administration, under the leadership of Sagasta.

The reply to our note was received on the 23d day of October. It is in
the direction of a better understanding. It appreciates the friendly
purposes of this Government. It admits that our country is deeply
affected by the war in Cuba and that its desires for peace are just. It
declares that the present Spanish government is bound by every
consideration to a change of policy that should satisfy the United
States and pacify Cuba within a reasonable time. To this end Spain has
decided to put into effect the political reforms heretofore advocated by
the present premier, without halting for any consideration in the path
which in its judgment leads to peace. The military operations, it is
said, will continue, but will be humane and conducted with all regard
for private rights, being accompanied by political action leading to the
autonomy of Cuba while guarding Spanish sovereignty. This, it is
claimed, will result in investing Cuba with a distinct personality, the
island to be governed by an executive and by a local council or chamber,
reserving to Spain the control of the foreign relations, the army and
navy, and the judicial administration. To accomplish this the present
government proposes to modify existing legislation by decree, leaving
the Spanish Cortes, with the aid of Cuban senators and deputies, to
solve the economic problem and properly distribute the existing debt.

In the absence of a declaration of the measures that this Government
proposes to take in carrying out its proffer of good offices, it
suggests that Spain be left free to conduct military operations and
grant political reforms, while the United States for its part shall
enforce its neutral obligations and cut off the assistance which it is
asserted the insurgents receive from this country. The supposition of an
indefinite prolongation of the war is denied. It is asserted that the
western provinces are already well-nigh reclaimed, that the planting of
cane and tobacco therein has been resumed, and that by force of arms and
new and ample reforms very early and complete pacification is hoped for.

The immediate amelioration of existing conditions under the new
administration of Cuban affairs is predicted, and therewithal the
disturbance and all occasion for any change of attitude on the part of
the United States. Discussion of the question of the international
duties and responsibilities of the United States as Spain understands
them is presented, with an apparent disposition to charge us with
failure in this regard. This charge is without any basis in fact. It
could not have been made if Spain had been cognizant of the constant
efforts this Government has made, at the cost of millions and by the
employment of the administrative machinery of the nation at command, to
perform its full duty according to the law of nations. That it has
successfully prevented the departure of a single military expedition or
armed vessel from our shores in violation of our laws would seem to be a
sufficient answer. But of this aspect of the Spanish note it is not
necessary to speak further now. Firm in the conviction of a wholly
performed obligation, due response to this charge has been made in
diplomatic course.

Throughout all these horrors and dangers to our own peace this
Government has never in any way abrogated its sovereign prerogative of
reserving to itself the determination of its policy and course according
to its own high sense of right and in consonance with the dearest
interests and convictions of our own people should the prolongation of
the strife so demand.

Of the untried measures there remain only: Recognition of the insurgents
as belligerents; recognition of the independence of Cuba; neutral
intervention to end the war by imposing a rational compromise between
the contestants, and intervention in favor of one or the other party. I
speak not of forcible annexation, for that can not be thought of. That,
by our code of morality, would be criminal aggression.

Recognition of the belligerency of the Cuban insurgents has often been
canvassed as a possible, if not inevitable, step both in regard to the
previous ten years' struggle and during the present war. I am not
unmindful that the two Houses of Congress in the spring of 1896
expressed the opinion by concurrent resolution that a condition of
public war existed requiring or justifying the recognition of a state of
belligerency in Cuba, and during the extra session the Senate voted a
joint resolution of like import, which, however, was not brought to a
vote in the House of Representatives. In the presence of these
significant expressions of the sentiment of the legislative branch it
behooves the Executive to soberly consider the conditions under which so
important a measure must needs rest for justification. It is to be
seriously considered whether the Cuban insurrection possesses beyond
dispute the attributes of statehood, which alone can demand the
recognition of belligerency in its favor. Possession, in short, of the
essential qualifications of sovereignty by the insurgents and the
conduct of the war by them according to the received code of war are no
less important factors toward the determination of the problem of
belligerency than are the influences and consequences of the struggle
upon the internal polity of the recognizing state.

The wise utterances of President Grant in his memorable message of
December 7, 1875, are signally relevant to the present situation in
Cuba, and it may be wholesome now to recall them. At that time a ruinous
conflict had for seven years wasted the neighboring island. During all
those years an utter disregard of the laws of civilized warfare and of
the just demands of humanity, which called forth expressions of
condemnation from the nations of Christendom, continued unabated.
Desolation and ruin pervaded that productive region, enormously
affecting the commerce of all commercial nations, but that of the United
States more than any other by reason of proximity and larger trade and
intercourse. At that juncture General Grant uttered these words, which
now, as then, sum up the elements of the problem: A recognition of the
independence of Cuba being, in my opinion, impracticable and
indefensible, the question which next presents itself is that of the
recognition of belligerent rights in the parties to the contest.

In a former message to Congress I had occasion to consider this
question, and reached the conclusion that the conflict in Cuba, dreadful
and devastating as were its incidents, did not rise to the fearful
dignity of war. It is possible that the acts of foreign powers, and even
acts of Spain herself, of this very nature, might be pointed to in
defense of such recognition. But now, as in its past history, the United
States should carefully avoid the false lights which might lead it into
the mazes of doubtful law and of questionable propriety, and adhere
rigidly and sternly to the rule, which has been its guide, of doing only
that which is right and honest and of good report. The question of
according or of withholding rights of belligerency must be judged in
every case in view of the particular attending facts. Unless justified
by necessity, it is always, and justly, regarded as an unfriendly act
and a gratuitous demonstration of moral support to the rebellion. It is
necessary, and it is required, when the interests and rights of another
government or of its people are so far affected by a pending civil
conflict as to require a definition of its relations to the parties
thereto. But this conflict must be one which will be recognized in the
sense of international law as war. Belligerence, too, is a fact. The
mere existence of contending armed bodies and their occasional conflicts
do not constitute war in the sense referred to. Applying to the existing
condition of affairs in Cuba the tests recognized by publicists and
writers on international law, and which have been observed by nations of
dignity, honesty, and power when free from sensitive or selfish and
unworthy motives, I fail to find in the insurrection the existence of
such a substantial political organization, real, palpable, and manifest
to the world, having the forms and capable of the ordinary functions of
government toward its own people and to other states, with courts for
the administration of justice, with a local habitation, possessing such
organization of force, such material, such occupation of territory, as
to take the contest out of the category of a mere rebellious
insurrection or occasional skirmishes and place it on the terrible
footing of war, to which a recognition of belligerency would aim to
elevate it. The contest, moreover, is solely on land; the insurrection
has not possessed itself of a single seaport whence it may send forth
its flag, nor has it any means of communication with foreign powers
except through the military lines of its adversaries. No apprehension of
any of those sudden and difficult complications which a war upon the
ocean is apt to precipitate upon the vessels, both commercial and
national, and upon the consular officers of other powers calls for the
definition of their relations to the parties to the contest. Considered
as a question of expediency, I regard the accordance of belligerent
rights still to be as unwise and premature as I regard it to be, at
present, indefensible as a measure of right. Such recognition entails
upon the country according the rights which flow from it difficult and
complicated duties, and requires the exaction from the contending
parties of the strict observance of their rights and obligations. It
confers the right of search upon the high seas by vessels of both
parties; it would subject the carrying of arms and munitions of war,
which now may be transported freely and without interruption in the
vessels of the United States, to detention and to possible seizure; it
would give rise to countless vexatious questions, would release the
parent Government from responsibility for acts done by the insurgents,
and would invest Spain with the right to exercise the supervision
recognized by our treaty of 1795 over our commerce on the high seas, a
very large part of which, in its traffic between the Atlantic and the
Gulf States and between all of them and the States on the Pacific,
passes through the waters which wash the shores of Cuba. The exercise of
this supervision could scarce fail to lead, if not to abuses, certainly
to collisions perilous to the peaceful relations of the two States.
There can be little doubt to what result such supervision would before
long draw this nation. It would be unworthy of the United States to
inaugurate the possibilities of such result by measures of questionable
right or expediency or by any indirection. Turning to the practical
aspects of a recognition of belligerency and reviewing its
inconveniences and positive dangers, still further pertinent
considerations appear. In the code of nations there is no such thing as
a naked recognition of belligerency, unaccompanied by the assumption of
international neutrality. Such recognition, without more, will not
confer upon either party to a domestic conflict a status not theretofore
actually possessed or affect the relation of either party to other
states. The act of recognition usually takes the form of a solemn
proclamation of neutrality, which recites the de facto condition of
belligerency as its motive. It announces a domestic law of neutrality in
the declaring state. It assumes the international obligations of a
neutral in the presence of a public state of war. It warns all citizens
and others within the jurisdiction of the proclaimant that they violate
those rigorous obligations at their own peril and can not expect to be
shielded from the consequences. The right of visit and search on the
seas and seizure of vessels and cargoes and contraband of war and good
prize under admiralty law must under international law be admitted as a
legitimate consequence of a proclamation of belligerency. While
according the equal belligerent rights defined by public law to each
party in our ports disfavors would be imposed on both, which, while
nominally equal, would weigh heavily in behalf of Spain herself.
Possessing a navy and controlling the ports of Cuba, her maritime rights
could be asserted not only for the military investment of the island,
but up to the margin of our own territorial waters, and a condition of
things would exist for which the Cubans within their own domain could
not hope to create a parallel, while its creation through aid or
sympathy from within our domain would be even more impossible than now,
with the additional obligations of international neutrality we would
perforce assume.

The enforcement of this enlarged and onerous code of neutrality would
only be influential within our own jurisdiction by land and sea and
applicable by our own instrumentalities. It could impart to the United
States no jurisdiction between Spain and the insurgents. It would give
the United States no right of intervention to enforce the conduct of the
strife within the paramount authority of Spain according to the
international code of war.

For these reasons I regard the recognition of the belligerency of the
Cuban insurgents as now unwise, and therefore inadmissible. Should that
step hereafter be deemed wise as a measure of right and duty, the
Executive will take it.

Intervention upon humanitarian grounds has been frequently suggested and
has not failed to receive my most anxious and earnest consideration. But
should such a step be now taken, when it is apparent that a hopeful
change has supervened in the policy of Spain toward Cuba? A new
government has taken office in the mother country. It is pledged in
advance to the declaration that all the effort in the world can not
suffice to maintain peace in Cuba by the bayonet; that vague promises of
reform after subjugation afford no solution of the insular problem; that
with a substitution of commanders must come a change of the past system
of warfare for one in harmony with a new policy, which shall no longer
aim to drive the Cubans to the "horrible alternative of taking to the
thicket or succumbing in misery;" that reforms must be instituted in
accordance with the needs and circumstances of the time, and that these
reforms, while designed to give full autonomy to the colony and to
create a virtual entity and self-controlled administration, shall yet
conserve and affirm the sovereignty of Spain by a just distribution of
powers and burdens upon a basis of mutual interest untainted by methods
of selfish expediency.

The first acts of the new government lie in these honorable paths. The
policy of cruel rapine and extermination that so long shocked the
universal sentiment of humanity has been reversed. Under the new
military commander a broad clemency is proffered. Measures have already
been set on foot to relieve the horrors of starvation. The power of the
Spanish armies, it is asserted, is to be used not to spread ruin and
desolation, but to protect the resumption of peaceful agricultural
pursuits and productive industries. That past methods are futile to
force a peace by subjugation is freely admitted, and that ruin without
conciliation must inevitably fail to win for Spain the fidelity of a
contented dependency.

Decrees in application of the foreshadowed reforms have already been
promulgated. The full text of these decrees has not been received, but
as furnished in a telegraphic summary from our minister are: All civil
and electoral rights of peninsular Spaniards are, in virtue of existing
constitutional authority, forthwith extended to colonial Spaniards. A
scheme of autonomy has been proclaimed by decree, to become effective
upon ratification by the Cortes. It creates a Cuban parliament, which,
with the insular executive, can consider and vote upon all subjects
affecting local order and interests, possessing unlimited powers save as
to matters of state, war, and the navy, as to which the Governor-General
acts by his own authority as the delegate of the central Government.
This parliament receives the oath of the Governor-General to preserve
faithfully the liberties and privileges of the colony, and to it the
colonial secretaries are responsible. It has the right to propose to the
central Government, through the Governor-General, modifications of the
national charter and to invite new projects of law or executive measures
in the interest of the colony.

Besides its local powers, it is competent, first, to regulate electoral
registration and procedure and prescribe the qualifications of electors
and the manner of exercising suffrage; second, to organize courts of
justice with native judges from members of the local bar; third, to
frame the insular budget, both as to expenditures and revenues, without
limitation of any kind, and to set apart the revenues to meet the Cuban
share of the national budget, which latter will be voted by the national
Cortes with the assistance of Cuban senators and deputies; fourth, to
initiate or take part in the negotiations of the national Government for
commercial treaties which may affect Cuban interests; fifth, to accept
or reject commercial treaties which the national Government may have
concluded without the participation of the Cuban government; sixth, to
frame the colonial tariff, acting in accord with the peninsular
Government in scheduling articles of mutual commerce between the mother
country and the colonies. Before introducing or voting upon a bill the
Cuban government or the chambers will lay the project before the central
Government and hear its opinion thereon, all the correspondence in such
regard being made public. Finally, all conflicts of jurisdiction arising
between the different municipal, provincial, and insular assemblies, or
between the latter and the insular executive power, and which from their
nature may not be referable to the central Government for decision,
shall be submitted to the courts.

That the government of Sagasta has entered upon a course from which
recession with honor is impossible can hardly be questioned; that in the
few weeks it has existed it has made earnest of the sincerity of its
professions is undeniable. I shall not impugn its sincerity, nor should
impatience be suffered to embarrass it in the task it has undertaken. It
is honestly due to Spain and to our friendly relations with Spain that
she should be given a reasonable chance to realize her expectations and
to prove the asserted efficacy of the new order of things to which she
stands irrevocably committed. She has recalled the commander whose
brutal orders inflamed the American mind and shocked the civilized
world. She has modified the horrible order of concentration and has
undertaken to care for the helpless and permit those who desire to
resume the cultivation of their fields to do so, and assures them of the
protection of the Spanish Government in their lawful occupations. She
has just released the Competitor prisoners, heretofore sentenced to
death, and who have been the subject of repeated diplomatic
correspondence during both this and the preceding Administration.

Not a single American citizen is now in arrest or confinement in Cuba of
whom this Government has any knowledge. The near future will demonstrate
whether the indispensable condition of a righteous peace, just alike to
the Cubans and to Spain as well as equitable to all our interests so
intimately involved in the welfare of Cuba, is likely to be attained. If
not, the exigency of further and other action by the United States will
remain to be taken. When that time comes that action will be determined
in the line of indisputable right and duty. It will be faced, without
misgiving or hesitancy in the light of the obligation this Government
owes to itself, to the people who have confided to it the protection of
their interests and honor, and to humanity.

Sure of the right, keeping free from all offense ourselves, actuated
only by upright and patriotic considerations, moved neither by passion
nor selfishness, the Government will continue its watchful care over the
rights and property of American citizens and will abate none of its
efforts to bring about by peaceful agencies a peace which shall be
honorable and enduring. If it shall hereafter appear to be a duty
imposed by our obligations to ourselves, to civilization and humanity to
intervene with force, it shall be without fault on our part and only
because the necessity for such action will be so clear as to command the
support and approval of the civilized world.

By a special message dated the 16th day of June last, I laid before the
Senate a treaty signed that day by the plenipotentiaries of the United
States and of the Republic of Hawaii, having for its purpose the
incorporation of the Hawaiian Islands as an integral part of the United
States and under its sovereignty. The Senate having removed the
injunction of secrecy, although the treaty is still pending before that
body, the subject may be properly referred to in this Message because
the necessary action of the Congress is required to determine by
legislation many details of the eventual union should the fact of
annexation be accomplished, as I believe it should be.

While consistently disavowing from a very early period any aggressive
policy of absorption in regard to the Hawaiian group, a long series of
declarations through three-quarters of a century has proclaimed the
vital interest of the United States in the independent life of the
Islands and their intimate commercial dependence upon this country. At
the same time it has been repeatedly asserted that in no event could the
entity of Hawaiian statehood cease by the passage of the Islands under
the domination or influence of another power than the United States.
Under these circumstances, the logic of events required that annexation,
heretofore offered but declined, should in the ripeness of time come
about as the natural result of the strengthening ties that bind us to
those Islands, and be realized by the free will of the Hawaiian State.

That treaty was unanimously ratified without amendment by the Senate and
President of the Republic of Hawaii on the 10th of September last, and
only awaits the favorable action of the American Senate to effect the
complete absorption of the Islands into the domain of the United States.
What the conditions of such a union shall be, the political relation
thereof to the United States, the character of the local administration,
the quality and degree of the elective franchise of the inhabitants, the
extension of the federal laws to the territory or the enactment of
special laws to fit the peculiar condition thereof, the regulation if
need be of the labor system therein, are all matters which the treaty
has wisely relegated to the Congress.

If the treaty is confirmed as every consideration of dignity and honor
requires, the wisdom of Congress will see to it that, avoiding abrupt
assimilation of elements perhaps hardly yet fitted to share in the
highest franchises of citizenship, and having due regard to the
geographical conditions, the most just provisions for self-rule in local
matters with the largest political liberties as an integral part of our
Nation will be accorded to the Hawaiians. No less is due to a people
who, after nearly five years of demonstrated capacity to fulfill the
obligations of self-governing statehood, come of their free will to
merge their destinies in our body-politic.

The questions which have arisen between Japan and Hawaii by reason of
the treatment of Japanese laborers emigrating to the Islands under the
Hawaiian-Japanese convention of 1888, are in a satisfactory stage of
settlement by negotiation. This Government has not been invited to
mediate, and on the other hand has sought no intervention in that
matter, further than to evince its kindliest disposition toward such a
speedy and direct adjustment by the two sovereign States in interest as
shall comport with equity and honor. It is gratifying to learn that the
apprehensions at first displayed on the part of Japan lest the cessation
of Hawaii's national life through annexation might impair privileges to
which Japan honorably laid claim, have given place to confidence in the
uprightness of this Government, and in the sincerity of its purpose to
deal with all possible ulterior questions in the broadest spirit of
friendliness.

As to the representation of this Government to Nicaragua, Salvador, and
Costa Rica, I have concluded that Mr. William L. Merry, confirmed as
minister of the United States to the States of Nicaragua, Salvador and
Costa Rica, shall proceed to San Jose, Costa Rica, and there temporarily
establish the headquarters of the United States to those three States. I
took this action for what I regarded as the paramount interests of this
country. It was developed upon an investigation by the Secretary of
State that the Government of Nicaragua, while not unwilling to receive
Mr. Merry in his diplomatic quality, was unable to do so because of the
compact concluded June 20, 1895, whereby that Republic and those of
Salvador and Honduras, forming what is known as the Greater Republic of
Central America, had surrendered to the representative Diet thereof
their right to receive and send diplomatic agents. The Diet was not
willing to accept him because he was not accredited to that body. I
could not accredit him to that body because the appropriation law of
Congress did not permit it. Mr. Baker, the present minister at Managua,
has been directed to present his letters of recall.

Mr. W. Godfrey Hunter has likewise been accredited to the Governments of
Guatemala and Honduras, the same as his predecessor. Guatemala is not a
member of the Greater Republic of Central America, but Honduras is.
Should this latter Government decline to receive him, he has been
instructed to report this fact to his Government and await its further
instructions.

A subject of large importance to our country, and increasing
appreciation on the part of the people, is the completion of the great
highway of trade between the Atlantic and Pacific, known as the
Nicaragua Canal. Its utility and value to American commerce is
universally admitted. The Commission appointed under date of July 24
last "to continue the surveys and examinations authorized by the act
approved March 2, 1895," in regard to "the proper route, feasibility,
and cost of construction of the Nicaragua Canal, with a view of making
complete plans for the entire work of construction of such canal," is
now employed in the undertaking. In the future I shall take occasion to
transmit to Congress the report of this Commission, making at the same
time such further suggestions as may then seem advisable.

Under the provisions of the act of Congress approved March 3, 1897, for
the promotion of an international agreement respecting bimetallism, I
appointed on the 14th day of April, 1897, Hon. Edward O. Wolcott of
Colorado, Hon. Adlai E. Stevenson of Illinois, and Hon. Charles J. Paine
of Massachusetts, as special envoys to represent the United States. They
have been diligent in their efforts to secure the concurrence and
cooperation of European countries in the international settlement of the
question, but up to this time have not been able to secure an agreement
contemplated by their mission.

The gratifying action of our great sister Republic of France in joining
this country in the attempt to bring about an agreement among the
principal commercial nations of Europe, whereby a fixed and relative
value between gold and silver shall be secured, furnishes assurance that
we are not alone among the larger nations of the world in realizing the
international character of the problem and in the desire of reaching
some wise and practical solution of it. The British Government has
published a resume of the steps taken jointly by the French ambassador
in London and the special envoys of the United States, with whom our
ambassador at London actively co-operated in the presentation of this
subject to Her Majesty's Government. This will be laid before Congress.

Our special envoys have not made their final report, as further
negotiations between the representatives of this Government and the
Governments of other countries are pending and in contemplation. They
believe that doubts which have been raised in certain quarters
respecting the position of maintaining the stability of the parity
between the metals and kindred questions may yet be solved by further
negotiations.

Meanwhile it gives me satisfaction to state that the special envoys have
already demonstrated their ability and fitness to deal with the subject,
and it is to be earnestly hoped that their labors may result in an
international agreement which will bring about recognition of both gold
and silver as money upon such terms, and with such safeguards as will
secure the use of both metals upon a basis which shall work no injustice
to any class of our citizens.

In order to execute as early as possible the provisions of the third and
fourth sections of the Revenue Act, approved July 24, 1897, I appointed
the Hon. John A. Kasson of Iowa, a special commissioner plenipotentiary
to undertake the requisite negotiations with foreign countries desiring
to avail themselves of these provisions. The negotiations are now
proceeding with several Governments, both European and American. It is
believed that by a careful exercise of the powers conferred by that Act
some grievances of our own and of other countries in our mutual trade
relations may be either removed, or largely alleviated, and that the
volume of our commercial exchanges may be enlarged, with advantage to
both contracting parties.

Most desirable from every standpoint of national interest and patriotism
is the effort to extend our foreign commerce. To this end our merchant
marine should be improved and enlarged. We should do our full share of
the carrying trade of the world. We do not do it now. We should be the
laggard no longer. The inferiority of our merchant marine is justly
humiliating to the national pride. The Government by every proper
constitutional means, should aid in making our ships familiar visitors
at every commercial port of the world, thus opening up new and valuable
markets to the surplus products of the farm and the factory.

The efforts which had been made during the two previous years by my
predecessor to secure better protection to the fur seals in the North
Pacific Ocean and Bering Sea, were renewed at an early date by this
Administration, and have been pursued with earnestness. Upon my
invitation, the Governments of Japan and Russia sent delegates to
Washington, and an international conference was held during the months
of October and November last, wherein it was unanimously agreed that
under the existing regulations this species of useful animals was
threatened with extinction, and that an international agreement of all
the interested powers was necessary for their adequate protection.

The Government of Great Britain did not see proper to be represented at
this conference, but subsequently sent to Washington, as delegates, the
expert commissioners of Great Britain and Canada who had, during the
past two years, visited the Pribilof Islands, and who met in conference
similar commissioners on the part of the United States. The result of
this conference was an agreement on important facts connected with the
condition of the seal herd, heretofore in dispute, which should place
beyond controversy the duty of the Governments concerned to adopt
measures without delay for the preservation and restoration of the herd.
Negotiations to this end are now in progress, the result of which I hope
to be able to report to Congress at an early day.

International arbitration cannot be omitted from the list of subjects
claiming our consideration. Events have only served to strengthen the
general views on this question expressed in my inaugural address. The
best sentiment of the civilized world is moving toward the settlement of
differences between nations without resorting to the horrors of war.
Treaties embodying these humane principles on broad lines, without in
any way imperiling our interests or our honor, shall have my constant
encouragement.

The acceptance by this Government of the invitation of the Republic of
France to participate in the Universal Exposition of 1900, at Paris, was
immediately followed by the appointment of a special commissioner to
represent the United States in the proposed exposition, with special
reference to the securing of space for an adequate exhibit on behalf of
the United States.

The special commissioner delayed his departure for Paris long enough to
ascertain the probable demand for space by American exhibitors. His
inquiries developed an almost unprecedented interest in the proposed
exposition, and the information thus acquired enabled him to justify an
application for a much larger allotment of space for the American
section than had been reserved by the exposition authorities. The result
was particularly gratifying, in view of the fact that the United States
was one of the last countries to accept the invitation of France.

The reception accorded our special commissioner was most cordial, and he
was given every reasonable assurance that the United States would
receive a consideration commensurate with the proportions of our
exhibit. The report of the special commissioner as to the magnitude and
importance of the coming exposition, and the great demand for space by
American exhibitors, supplies new arguments for a liberal and judicious
appropriation by Congress, to the end that an exhibit fairly
representative of the industries and resources of our country may be
made in an exposition which will illustrate the world's progress during
the nineteenth century. That exposition is intended to be the most
important and comprehensive of the long series of international
exhibitions, of which our own at Chicago was a brilliant example, and it
is desirable that the United States should make a worthy exhibit of
American genius and skill and their unrivaled achievements in every
branch of industry.

The present immediately effective force of the Navy consists of four
battle ships of the first class, two of the second, and forty-eight
other vessels, ranging from armored cruisers to torpedo boats. There are
under construction five battle ships of the first class, sixteen torpedo
boats, and one submarine boat. No provision has yet been made for the
armor of three of the five battle ships, as it has been impossible to
obtain it at the price fixed by Congress. It is of great importance that
Congress provide this armor, as until then the ships are of no fighting
value.

The present naval force, especially in view of its increase by the ships
now under construction, while not as large as that of a few other
powers, is a formidable force; its vessels are the very best of each
type; and with the increase that should be made to it from time to time
in the future, and careful attention to keeping it in a high state of
efficiency and repair, it is well adapted to the necessities of the
country.

The great increase of the Navy which has taken place in recent years was
justified by the requirements for national defense, and has received
public approbation. The time has now arrived, however, when this
increase, to which the country is committed, should, for a time, take
the form of increased facilities commensurate with the increase of our
naval vessels. It is an unfortunate fact that there is only one dock on
the Pacific Coast capable of docking our largest ships, and only one on
the Atlantic Coast, and that the latter has for the last six or seven
months been under repair and therefore incapable of use. Immediate steps
should be taken to provide three or four docks of this capacity on the
Atlantic Coast, at least one on the Pacific Coast, and a floating dock
in the Gulf. This is the recommendation of a very competent Board,
appointed to investigate the subject. There should also be ample
provision made for powder and projectiles, and other munitions of war,
and for an increased number of officers and enlisted men. Some additions
are also necessary to our navy-yards, for the repair and care of our
large number of vessels. As there are now on the stocks five battle
ships of the largest class, which cannot be completed for a year or two,
I concur with the recommendation of the Secretary of the Navy for an
appropriation authorizing the construction of one battle ship for the
Pacific Coast, where, at present, there is only one in commission and
one under construction, while on the Atlantic Coast there are three in
commission and four under construction; and also that several torpedo
boats be authorized in connection with our general system of coast
defense.

The Territory of Alaska requires the prompt and early attention of
Congress. The conditions now existing demand material changes in the
laws relating to the Territory. The great influx of population during
the past summer and fall and the prospect of a still larger immigration
in the spring will not permit us to longer neglect the extension of
civil authority within the Territory or postpone the establishment of a
more thorough government.

A general system of public surveys has not yet been extended to Alaska
and all entries thus far made in that district are upon special surveys.
The act of Congress extending to Alaska the mining laws of the United
States contained the reservation that it should not be construed to put
in force the general land laws of the country. By act approved March 3,
1891, authority was given for entry of lands for town-site purposes and
also for the purchase of not exceeding one hundred and sixty acres then
or thereafter occupied for purposes of trade and manufacture. The
purpose of Congress as thus far expressed has been that only such rights
should apply to that Territory as should be specifically named.

It will be seen how much remains to be done for that vast and remote and
yet promising portion of our country. Special authority was given to the
President by the Act of Congress approved July 24, 1897, to divide that
Territory into two land districts and to designate the boundaries
thereof and to appoint registers and receivers of said land offices, and
the President was also authorized to appoint a surveyor-general for the
entire district. Pursuant to this authority, a surveyor-general and
receiver have been appointed, with offices at Sitka. If in the ensuing
year the conditions justify it, the additional land district authorized
by law will be established, with an office at some point in the Yukon
Valley. No appropriation, however, was made for this purpose, and that
is now necessary to be done for the two land districts into which the
Territory is to be divided.

I concur with the Secretary of War in his suggestions as to the
necessity for a military force in the Territory of Alaska for the
protection of persons and property. Already a small force, consisting of
twenty-five men, with two officers, under command of Lieutenant-Colonel
Randall, of the Eighth Infantry, has been sent to St. Michael to
establish a military post.

As it is to the interest of the Government to encourage the development
and settlement of the country and its duty to follow up its citizens
there with the benefits of legal machinery, I earnestly urge upon
Congress the establishment of a system of government with such
flexibility as will enable it to adjust itself to the future areas of
greatest population.

The startling though possibly exaggerated reports from the Yukon River
country, of the probable shortage of food for the large number of people
who are wintering there without the means of leaving the country are
confirmed in such measure as to justify bringing the matter to the
attention of Congress. Access to that country in winter can be had only
by the passes from Dyea and vicinity, which is a most difficult and
perhaps an impossible task. However, should these reports of the
suffering of our fellow-citizens be further verified, every effort at
any cost should be made to carry them relief.

For a number of years past it has been apparent that the conditions
under which the Five Civilized Tribes were established in the Indian
Territory under treaty provisions with the United States, with the right
of self-government and the exclusion of all white persons from within
their borders, have undergone so complete a change as to render the
continuance of the system thus inaugurated practically impossible. The
total number of the Five Civilized Tribes, as shown by the last census,
is 45,494, and this number has not materially increased; while the white
population is estimated at from 200,000 to 250,000 which, by permission
of the Indian Government has settled in the Territory. The present area
of the Indian Territory contains 25,694,564 acres, much of which is very
fertile land. The United States citizens residing in the Territory, most
of whom have gone there by invitation or with the consent of the tribal
authorities, have made permanent homes for themselves. Numerous towns
have been built in which from 500 to 5,000 white people now reside.
Valuable residences and business houses have been erected in many of
them. Large business enterprises are carried on in which vast sums of
money are employed, and yet these people, who have invested their
capital in the development of the productive resources of the country,
are without title to the land they occupy, and have no voice whatever in
the government either of the Nations or Tribes. Thousands of their
children who were born in the Territory are of school age, but the doors
of the schools of the Nations are shut against them, and what education
they get is by private contribution. No provision for the protection of
the life or property of these white citizens is made by the Tribal
Governments and Courts.

The Secretary of the Interior reports that leading Indians have absorbed
great tracts of land to the exclusion of the common people, and
government by an Indian aristocracy has been practically established, to
the detriment of the people. It has been found impossible for the United
States to keep its citizens out of the Territory, and the executory
conditions contained in the treaties with these Nations have for the
most part become impossible of execution. Nor has it been possible for
the Tribal Governments to secure to each individual Indian his full
enjoyment in common with Other Indians of the common property of the
Nations. Friends of the Indians have long believed that the best
interests of the Indians of the Five Civilized Tribes would be found in
American citizenship, with all the rights and privileges which belong to
that condition.

By section 16, of the act of March 3, 1893, the President was authorized
to appoint three commissioners to enter into negotiations with the
Cherokee, Choctaw, Chickasaw, Muscogee (or Creek), and Seminole Nations,
commonly known as the Five Civilized Tribes in the Indian Territory.
Briefly, the purposes of the negotiations were to be: The extinguishment
of Tribal titles to any lands within that Territory now held by any and
all such Nations or Tribes, either by cession of the same or some part
thereof to the United States, or by allotment and division of the same
in severalty among the Indians of such Nations or Tribes respectively as
may be entitled to the same, or by such other method as may be agreed
upon between the several Nations and Tribes aforesaid, or each of them,
with the United States, with a view to such an adjustment upon the basis
of justice and equity as may, with the consent of the said Nations of
Indians so far as may be necessary, be requisite and suitable to enable
the ultimate creation of a State or States of the Union which shall
embrace the lands within said Indian Territory.

The Commission met much opposition from the beginning. The Indians were
very slow to act, and those in control manifested a decided
disinclination to meet with favor the propositions submitted to them. A
little more than three years after this organization the Commission
effected an agreement with the Choctaw Nation alone. The Chickasaws,
however, refused to agree to its terms, and as they have a common
interest with the Choctaws in the lands of said Nations, the agreement
with the latter Nation could have no effect without the consent of the
former. On April 23, 1897, the Commission effected an agreement with
both tribes--the Choctaws and Chickasaws. This agreement, it is
understood, has been ratified by the constituted authorities of the
respective Tribes or Nations parties thereto, and only requires
ratification by Congress to make it binding.

On the 27th of September, 1897, an agreement was effected with the Creek
Nation, but it is understood that the National Council of said Nation
has refused to ratify the same. Negotiations are yet to be had with the
Cherokees, the most populous of the Five Civilized Tribes, and with the
Seminoles, the smallest in point of numbers and territory.

The provision in the Indian Appropriation Act, approved June 10, 1896,
makes it the duty of the Commission to investigate and determine the
rights of applicants for citizenship in the Five Civilized Tribes, and
to make complete census rolls of the citizens of said Tribes. The
Commission is at present engaged in this work among the Creeks, and has
made appointments for taking the census of these people up to and
including the 30th of the present month.

Should the agreement between the Choctaws and Chickasaws be ratified by
Congress and should the other Tribes fail to make an agreement with the
Commission, then it will be necessary that some legislation shall be had
by Congress, which, while just and honorable to the Indians, shall be
equitable to the white people who have settled upon these lands by
invitation of the Tribal Nations.

Hon. Henry L. Dawes, Chairman of the Commission, in a letter to the
Secretary of the Interior, under date of October 11, 1897, says:
"Individual ownership is, in their (the Commission's) opinion,
absolutely essential to any permanent improvement in present conditions,
and the lack of it is the root of nearly all the evils which so
grievously afflict these people. Allotment by agreement is the only
possible method, unless the United States Courts are clothed with the
authority to apportion the lands among the citizen Indians for whose use
it was originally granted."

I concur with the Secretary of the Interior that there can be no cure
for the evils engendered by the perversion of these great trusts,
excepting by their resumption by the Government which created them.

The recent prevalence of yellow fever in a number of cities and towns
throughout the South has resulted in much disturbance of commerce, and
demonstrated the necessity of such amendments to our quarantine laws as
will make the regulations of the national quarantine authorities
paramount. The Secretary of the Treasury, in the portion of his report
relating to the operation of the Marine Hospital Service, calls
attention to the defects in the present quarantine laws, and recommends
amendments thereto which will give the Treasury Department the requisite
authority to prevent the invasion of epidemic diseases from foreign
countries, and in times of emergency, like that of the past summer, will
add to the efficiency of the sanitary measures for the protection of the
people, and at the same time prevent unnecessary restriction of
commerce. I concur in his recommendation.

In further effort to prevent the invasion of the United States by yellow
fever, the importance of the discovery of the exact cause of the
disease, which up to the present time has been undetermined, is obvious,
and to this end a systematic bacteriological investigation should be
made. I therefore recommend that Congress authorize the appointment of a
commission by the President, to consist of four expert bacteriologists,
one to be selected from the medical officers of the Marine Hospital
Service, one to be appointed from civil life, one to be detailed from
the medical officers of the Army, and one from the medical officers of
the Navy.

The Union Pacific Railway, Main Line, was sold under the decree of the
United States Court for the District of Nebraska, on the 1st and 2d of
November of this year. The amount due the Government consisted of the
principal of the subsidy bonds, $27,236,512, and the accrued interest
thereon, $31,211,711.75, making the total indebtedness, $58,448,223.75.
The bid at the sale covered the first mortgage lien and the entire
mortgage claim of the Government, principal and interest.

The sale of the subsidized portion of the Kansas Pacific Line, upon
which the Government holds a second mortgage lien, has been postponed at
the instance of the Government to December 16, 1897. The debt of this
division of the Union Pacific Railway to the Government on November 1,
1897, was the principal of the subsidy bonds, $6,303,000, and the unpaid
and accrued interest thereon, $6,626,690.33, making a total of
$12,929,690.33.

The sale of this road was originally advertised for November 4, but for
the purpose of securing the utmost public notice of the event it was
postponed until December 16, and a second advertisement of the sale was
made. By the decree of the Court, the upset price on the sale of the
Kansas Pacific will yield to the Government the sum of $2,500,000 over
all prior liens, costs, and charges. If no other or better bid is made,
this sum is all that the Government will receive on its claim of nearly
$13,000,000. The Government has no information as to whether there will
be other bidders or a better bid than the minimum amount herein stated.
The question presented therefore is: Whether the Government shall, under
the authority given it by the act of March 3, 1887, purchase or redeem
the road in the event that a bid is not made by private parties covering
the entire Government claim. To qualify the Government to bid at the
sales will require a deposit of $900,000, as follows: In the Government
cause $500,000 and in each of the first mortgage causes $200,000, and in
the latter the deposit must be in cash. Payments at the sale are as
follows: Upon the acceptance of the bid a sum which with the amount
already deposited shall equal fifteen per cent of the bid; the balance
in installments of twenty-five per cent thirty, forty, and fifty days
after the confirmation of the sale. The lien on the Kansas Pacific prior
to that of the Government on the 30th July, 1897, principal and
interest, amounted to $7,281,048.11. The Government, therefore, should
it become the highest bidder, will have to pay the amount of the first
mortgage lien.

I believe that under the act of 1887 it has the authority to do this and
in absence of any action by Congress I shall direct the Secretary of the
Treasury to make the necessary deposit as required by the Court's decree
to qualify as a bidder and to bid at the sale a sum which will at least
equal the principal of the debt due to the Government; but suggest in
order to remove all controversy that an amendment of the law be
immediately passed explicitly giving such powers and appropriating in
general terms whatever sum is sufficient therefor.

In so important a matter as the Government becoming the possible owner
of railroad property which it perforce must conduct and operate, I feel
constrained to lay before Congress these facts for its consideration and
action before the consummation of the sale. It is clear to my mind that
the Government should not permit the property to be sold at a price
which will yield less than one-half of the principal of its debt and
less than one-fifth of its entire debt, principal and interest. But
whether the Government, rather than accept less than its claim, should
become a bidder and thereby the owner of the property, I submit to the
Congress for action.

The Library building provided for by the act of Congress approved April
15, 1886, has been completed and opened to the public. It should be a
matter of congratulation that through the foresight and munificence of
Congress the nation possesses this noble treasure-house of knowledge. It
is earnestly to be hoped that having done so much toward the cause of
education, Congress will continue to develop the Library in every phase
of research to the end that it may be not only one of the most
magnificent but among the richest and most useful libraries in the
world.

The important branch of our Government known as the Civil Service, the
practical improvement of which has long been a subject of earnest
discussion, has of late years received increased legislative and
Executive approval. During the past few months the service has been
placed upon a still firmer basis of business methods and personal merit.
While the right of our veteran soldiers to reinstatement in deserving
cases has been asserted, dismissals for merely political reasons have
been carefully guarded against, the examinations for admittance to the
service enlarged and at the same time rendered less technical and more
practical; and a distinct advance has been made by giving a hearing
before dismissal upon all cases where incompetency is charged or demand
made for the removal of officials in any of the Departments. This order
has been made to give to the accused his right to be heard but without
in anyway impairing the power of removal, which should always be
exercised in cases of inefficiency and incompetency, and which is one of
the vital safeguards of the civil service reform system, preventing
stagnation and deadwood and keeping every employee keenly alive to the
fact that the security of his tenure depends not on favor but on his own
tested and carefully watched record of service.

Much of course still remains to be accomplished before the system can be
made reasonably perfect for our needs. There are places now in the
classified service which ought to be exempted and others not classified
may properly be included. I shall not hesitate to exempt cases which I
think have been improperly included in the classified service or include
those which in my judgment will best promote the public service. The
system has the approval of the people and it will be my endeavor to
uphold and extend it.

I am forced by the length of this Message to omit many important
references to affairs of the Government with which Congress will have to
deal at the present session. They are fully discussed in the
departmental reports, to all of which I invite your earnest attention.

The estimates of the expenses of the Government by the several
Departments will, I am sure, have your careful scrutiny. While the
Congress may not find it an easy task to reduce the expenses of the
Government, it should not encourage their increase. These expenses will
in my judgment admit of a decrease in many branches of the Government
without injury to the public service. It is a commanding duty to keep
the appropriations within the receipts of the Government, and thus avoid
a deficit.

***

State of the Union Address
William McKinley
December 5, 1898

To the Senate and House of Representatives:

Notwithstanding the added burdens rendered necessary by the war, our
people rejoice in a very satisfactory and steadily increasing degree of
prosperity, evidenced by the largest volume of business ever recorded.
Manufacture has been productive, agricultural pursuits have yielded
abundant returns, labor in all fields of industry is better rewarded,
revenue legislation passed by the present Congress has increased the
Treasury's receipts to the amount estimated by its authors, the finances
of the Government have been successfully administered and its credit
advanced to the first rank, while its currency has been maintained at
the world's highest standard. Military service under a common flag and
for a righteous cause has strengthened the national spirit and served to
cement more closely than ever the fraternal bonds between every section
of the country.

A review of the relation of the United States to other powers, always
appropriate, is this year of primary importance in view of the momentous
issues which have arisen, demanding in one instance the ultimate
determination by arms and involving far-reaching consequences which will
require the earnest attention of the Congress.

In my last annual message very full consideration was given to the
question of the duty of the Government of the United States toward Spain
and the Cuban insurrection as being by far the most important problem
with which we were then called upon to deal. The considerations then
advanced and the exposition of the views therein expressed disclosed my
sense of the extreme gravity of the situation. Setting aside as
logically unfounded or practically inadmissible the recognition of the
Cuban insurgents as belligerents, the recognition of the independence of
Cuba, neutral intervention to end the war by imposing a rational
compromise between the contestants, intervention in favor of one or the
other party, and forcible annexation of the island, I concluded it was
honestly due to our friendly relations with Spain that she should be
given a reasonable chance to realize her expectations of reform to which
she had become irrevocably committed. Within a few weeks previously she
had announced comprehensive plans which it was confidently asserted
would be efficacious to remedy the evils so deeply affecting our own
country, so injurious to the true interests of the mother country as
well as to those of Cuba, and so repugnant to the universal sentiment of
humanity.

The ensuing month brought little sign of real progress toward the
pacification of Cuba. The autonomous administrations set up in the
capital and some of the principal cities appeared not to gain the favor
of the inhabitants nor to be able to extend their influence to the large
extent of territory held by the insurgents, while the military arm,
obviously unable to cope with the still active rebellion, continued many
of the most objectionable and offensive policies of the government that
had preceded it. No tangible relief was afforded the vast numbers of
unhappy reconcentrados, despite the reiterated professions made in that
regard and the amount appropriated by Spain to that end. The proffered
expedient of zones of cultivation proved illusory. Indeed no less
practical nor more delusive promises of succor could well have been
tendered to the exhausted and destitute people, stripped of all that
made life and home dear and herded in a strange region among
unsympathetic strangers hardly less necessitous than themselves.

By the end of December the mortality among them had frightfully
increased. Conservative estimates from Spanish sources placed the deaths
among these distressed people at over 40 per cent from the time General
Weyler's decree of reconcentration was enforced. With the acquiescence
of the Spanish authorities, a scheme was adopted for relief by
charitable contributions raised in this country and distributed, under
the direction of the consul-general and the several consuls, by noble
and earnest individual effort through the organized agencies of the
American Red Cross. Thousands of lives were thus saved, but many
thousands more were inaccessible to such forms of aid.

The war continued on the old footing, without comprehensive plan,
developing only the same spasmodic encounters, barren of strategic
result, that had marked the course of the earlier ten years' rebellion
as well as the present insurrection from its start. No alternative save
physical exhaustion of either combatant, and therewithal the practical
ruin of the island, lay in sight, but how far distant no one could
venture to conjecture.

At this juncture, on the 15th of February last, occurred the destruction
of the battle ship Maine while rightfully lying in the harbor of Havana
on a mission of international courtesy and good will--a catastrophe the
suspicious nature and horror of which stirred the nation's heart
profoundly. It is a striking evidence of the poise and sturdy good sense
distinguishing our national character that this shocking blow, falling
upon a generous people already deeply touched by preceding events in
Cuba, did not move them to an instant desperate resolve to tolerate no
longer the existence of a condition of danger and disorder at our doors
that made possible such a deed, by whomsoever wrought. Yet the instinct
of justice prevailed, and the nation anxiously awaited the result of the
searching investigation at once set on foot. The finding of the naval
board of inquiry established that the origin of the explosion was
external, by a submarine mine, and only halted through lack of positive
testimony to fix the responsibility of its authorship.

All these things carried conviction to the most thoughtful, even before
the finding of the naval court, that a crisis in our relations with
Spain and toward Cuba was at hand. So strong was this belief that it
needed but a brief Executive suggestion to the Congress to receive
immediate answer to the duty of making instant provision for the
possible and perhaps speedily probable emergency of war, and the
remarkable, almost unique, spectacle was presented of a unanimous vote
of both Houses, on the 9th of March, appropriating $50,000,000 "for the
national defense and for each and every purpose connected therewith, to
be expended at the discretion of the President." That this act of
prevision came none too soon was disclosed when the application of the
fund was undertaken. Our coasts were practically undefended. Our Navy
needed large provision for increased ammunition and supplies, and even
numbers to cope with any sudden attack from the navy of Spain, which
comprised modern vessels of the highest type of continental perfection.
Our Army also required enlargement of men and munitions. The details of
the hurried preparation for the dreaded contingency are told in the
reports of the Secretaries of War and of the Navy, and need not be
repeated here. It is sufficient to say that the outbreak of war when it
did come found our nation not unprepared to meet the conflict.

Nor was the apprehension of coming strife confined to our own country.
It was felt by the continental powers, which on April 6, through their
ambassadors and envoys, addressed to the Executive an expression of hope
that humanity and moderation might mark the course of this Government
and people, and that further negotiations would lead to an agreement
which, while securing the maintenance of peace, would afford all
necessary guaranties for the reestablishment of order in Cuba. In
responding to that representation I said I shared the hope the envoys
had expressed that peace might be preserved in a manner to terminate the
chronic condition of disturbance in Cuba, so injurious and menacing to
our interests and tranquillity, as well as shocking to our sentiments of
humanity; and while appreciating the humanitarian and disinterested
character of the communication they had made on behalf of the powers, I
stated the confidence of this Government, for its part, that equal
appreciation would be shown for its own earnest and unselfish endeavors
to fulfill a duty to humanity by ending a situation the indefinite
prolongation of which had become insufferable.

Still animated by the hope of a peaceful solution and obeying the
dictates of duty, no effort was relaxed to bring about a speedy ending
of the Cuban struggle. Negotiations to this object continued actively
with the Government of Spain, looking to the immediate conclusion of a
six months' armistice in Cuba, with a view to effect the recognition of
her people's right to independence. Besides this, the instant revocation
of the order of reconcentration was asked, so that the sufferers,
returning to their homes and aided by united American and Spanish
effort, might be put in a way to support themselves and, by orderly
resumption of the well-nigh destroyed productive energies of the island,
contribute to the restoration of its tranquillity and well-being.
Negotiations continued for some little time at Madrid, resulting in
offers by the Spanish Government which could not but be regarded as
inadequate. It was proposed to confide the preparation of peace to the
insular parliament, yet to be convened under the autonomous decrees of
November, 1897, but without impairment in any wise of the constitutional
powers of the Madrid Government, which to that end would grant an
armistice, if solicited by the insurgents, for such time as the general
in chief might see fit to fix. How and with what scope of discretionary
powers the insular parliament was expected to set about the
"preparation" of peace did not appear. If it were to be by negotiation
with the insurgents, the issue seemed to rest on the one side with a
body chosen by a fraction of the electors in the districts under Spanish
control, and on the other with the insurgent population holding the
interior country, unrepresented in the so-called parliament and defiant
at the suggestion of suing for peace.

Grieved and disappointed at this barren outcome of my sincere endeavors
to reach a practicable solution, I felt it my duty to remit the whole
question to the Congress. In the message of April 11, 1898, I announced
that with this last overture in the direction of immediate peace in Cuba
and its disappointing reception by Spain the effort of the Executive was
brought to an end. I again reviewed the alternative courses of action
which had been proposed, concluding that the only one consonant with
international policy and compatible with our firm-set historical
traditions was intervention as a neutral to stop the war and check the
hopeless sacrifice of life, even though that resort involved "hostile
constraint upon both the parties to the contest, as well to enforce a
truce as to guide the eventual settlement." The grounds justifying that
step were the interests of humanity, the duty to protect the life and
property of our citizens in Cuba, the right to check injury to our
commerce and people through the devastation of the island, and, most
important, the need of removing at once and forever the constant menace
and the burdens entailed upon our Government by the uncertainties and
perils of the situation caused by the unendurable disturbance in Cuba. I
said: The long trial has proved that the object for which Spain has
waged the war can not be attained. The fire of insurrection may flame or
may smolder with varying seasons, but it has not been and it is plain
that it can not be extinguished by present methods. The only hope of
relief and repose from a condition which can no longer be endured is the
enforced pacification of Cuba. In the name of humanity, in the name of
civilization, in behalf of endangered American interests which give us
the right and the duty to speak and to act, the war in Cuba must stop.
In view of all this the Congress was asked to authorize and empower the
President to take measures to secure a full and final termination of
hostilities between Spain and the people of Cuba and to secure in the
island the establishment of a stable government, capable of maintaining
order and observing its international obligations, insuring peace and
tranquillity and the security of its citizens as well as our own, and
for the accomplishment of those ends to use the military and naval
forces of the United States as might be necessary, with added authority
to continue generous relief to the starving people of Cuba.

The response of the Congress, after nine days of earnest deliberation,
during which the almost unanimous sentiment of your body was developed
on every point save as to the expediency of coupling the proposed action
with a formal recognition of the Republic of Cuba as the true and lawful
government of that island--a proposition which failed of adoption--the
Congress, after conference, on the 19th of April, by a vote of 42 to 35
in the Senate and 311 to 6 in the House of Representatives, passed the
memorable joint resolution declaring--

First. That the people of the island of Cuba are, and of right ought to
be, free and independent.

Second. That it is the duty of the United States to demand, and the
Government of the United States does hereby demand, that the Government
of Spain at once relinquish its authority and government in the island
of Cuba and withdraw its land and naval forces from Cuba and Cuban
waters.

Third. That the President of the United States be, and he hereby is,
directed and empowered to use the entire land and naval forces of the
United States and to call into the actual service of the United States
the militia of the several States to such extent as may be necessary to
carry these resolutions into effect.

Fourth. That the United States hereby disclaims any disposition or
intention to exercise sovereignty, jurisdiction, or control over said
island except for the pacification thereof, and asserts its
determination when that is accomplished to leave the government and
control of the island to its people. This resolution was approved by the
Executive on the next day, April 20. A copy was at once communicated to
the Spanish minister at this capital, who forthwith announced that his
continuance in Washington had thereby become impossible, and asked for
his passports, which were given him. He thereupon withdrew from
Washington, leaving the protection of Spanish interests in the United
States to the French ambassador and the Austro-Hungarian minister.
Simultaneously with its communication to the Spanish minister here,
General Woodford, the American minister at Madrid, was telegraphed
confirmation of the text of the joint resolution and directed to
communicate it to the Government of Spain with the formal demand that it
at once relinquish its authority and government in the island of Cuba
and withdraw its forces therefrom, coupling this demand with
announcement of the intentions of this Government as to the future of
the island, in conformity with the fourth clause of the resolution, and
giving Spain until noon of April 23 to reply.

That demand, although, as above shown, officially made known to the
Spanish envoy here, was not delivered at Madrid. After the instruction
reached General Woodford on the morning of April 21, but before he could
present it, the Spanish minister of state notified him that upon the
President's approval of the joint resolution the Madrid Government,
regarding the act as "equivalent to an evident declaration of war," had
ordered its minister in Washington to withdraw, thereby breaking off
diplomatic relations between the two countries and ceasing all official
communication between their respective representatives. General Woodford
thereupon demanded his passports and quitted Madrid the same day.

Spain having thus denied the demand of the United States and initiated
that complete form of rupture of relations which attends a state of war,
the executive powers authorized by the resolution were at once used by
me to meet the enlarged contingency of actual war between sovereign
states. On April 22 I proclaimed a blockade of the north coast of Cuba,
including ports on said coast between Cardenas and Bahia Honda, and the
port of Cienfuegos, on the south coast of Cuba, and on the 23d I called
for volunteers to execute the purpose of the resolution. By my message
of April 25 the Congress was informed of the situation, and I
recommended formal declaration of the existence of a state of war
between the United States and Spain. The Congress accordingly voted on
the same day the act approved April 25, 1898, declaring the existence of
such war from and including the 21st day of April, and reenacted the
provision of the resolution of April 20 directing the President to use
all the armed forces of the nation to carry that act into effect. Due
notification of the existence of war as aforesaid was given April 25 by
telegraph to all the governments with which the United States maintain
relations, in order that their neutrality might be assured during the
war. The various governments responded with proclamations of neutrality,
each after its own methods. It is not among the least gratifying
incidents of the struggle that the obligations of neutrality were
impartially discharged by all, often under delicate and difficult
circumstances.

In further fulfillment of international duty I issued, April 26, 1893, a
proclamation announcing the treatment proposed to be accorded to vessels
and their cargoes as to blockade, contraband, the exercise of the right
of search, and the immunity of neutral flags and neutral goods under
enemy's flag. A similar proclamation was made by the Spanish Government.
In the conduct of hostilities the rules of the Declaration of Paris,
including abstention from resort to privateering, have accordingly been
observed by both belligerents, although neither was a party to that
declaration.

Our country thus, after an interval of half a century of peace with all
nations, found itself engaged in deadly conflict with a foreign enemy.
Every nerve was strained to meet the emergency. The response to the
initial call for 125,000 volunteers was instant and complete, as was
also the result of the second call, of May 25, for 75,000 additional
volunteers. The ranks of the Regular Army were increased to the limits
provided by the act of April 26, 1898.

The enlisted force of the Navy on the 15th day of August, when it
reached its maximum, numbered 24,123 men and apprentices. One hundred
and three vessels were added to the Navy by purchase, 1 was presented to
the Government, 1 leased, and the 4 vessels of the International
Navigation Company--the St. Paul, St. Louis, New York, and Paris--were
chartered. In addition to these the revenue cutters and lighthouse
tenders were turned over to the Navy Department and became temporarily a
part of the auxiliary Navy.

The maximum effective fighting force of the Navy during the war,
separated into classes, was as follows:

Four battle ships of the first class, 1 battle ship of the second class,
2 armored cruisers, 6 coast-defense monitors, 1 armored ram, 12
protected cruisers, 3 unprotected cruisers, 18 gunboats, 1 dynamite
cruiser, 11 torpedo boats; vessels of the old Navy, including monitors,
14. Auxiliary Navy: 11 auxiliary cruisers, 28 converted yachts, 27
converted tugs, 19 converted colliers, 15 revenue cutters, 4 light-house
tenders, and 19 miscellaneous vessels.

Much alarm was felt along our entire Atlantic seaboard lest some attack
might be made by the enemy. Every precaution was taken to prevent
possible injury to our great cities lying along the coast. Temporary
garrisons were provided, drawn from the State militia; infantry and
light batteries were drawn from the volunteer force. About 12,000 troops
were thus employed. The coast signal service was established for
observing the approach of an enemy's ships to the coast of the United
States, and the Life-Saving and Light-House services cooperated, which
enabled the Navy Department to have all portions of the Atlantic coast,
from Maine to Texas, under observation.

The auxiliary Navy was created under the authority of Congress and was
officered and manned by the Naval Militia of the several States. This
organization patrolled the coast and performed the duty of a second line
of defense. Under the direction of the Chief of Engineers submarine
mines were placed at the most exposed points. Before the outbreak of the
war permanent mining casemates and cable galleries had been constructed
at nearly all important harbors. Most of the torpedo material was not to
be found in the market, and had to be specially manufactured. Under date
of April 19 district officers were directed to take all preliminary
measures short of the actual attaching of the loaded mines to the
cables, and on April 22 telegraphic orders were issued to place the
loaded mines in position.

The aggregate number of mines placed was 1,535, at the principal harbors
from Maine to California. Preparations were also made for the planting
of mines at certain other harbors, but owing to the early destruction of
the Spanish fleet these mines were not placed.

The Signal Corps was promptly organized, and performed service of the
most difficult and important character. Its operations during the war
covered the electrical connection of all coast fortifications, the
establishment of telephonic and telegraphic facilities for the camps at
Manila, Santiago, and in Puerto Rico. There were constructed 300 miles
of line at ten great camps, thus facilitating military movements from
those points in a manner heretofore unknown in military administration.
Field telegraph lines were established and maintained under the enemy's
fire at Manila, and later the Manila-Hongkong cable was reopened.

In Puerto Rico cable communications were opened over a discontinued
route, and on land the headquarters of the commanding officer was kept
in telegraphic or telephonic communication with the division commanders
on four different lines of operations.

There was placed in Cuban waters a completely outfitted cable ship, with
war cables and cable gear, suitable both for the destruction of
communications belonging to the enemy and the establishment of our own.
Two ocean cables were destroyed under the enemy's batteries at Santiago.
The day previous to the landing of General Shafter's corps, at
Caimanera, within 20 miles of the landing place, cable communications
were established and a cable station opened giving direct communication
with the Government at Washington. This service was invaluable to the
Executive in directing the operations of the Army and Navy. With a total
force of over 1,300, the loss was by disease in camp and field, officers
and men included, only 5.

The national-defense fund of $50,000,000 was expended in large part by
the Army and Navy, and the objects for which it was used are fully shown
in the reports of the several Secretaries. It was a most timely
appropriation, enabling the Government to strengthen its defenses and
make preparations greatly needed in case of war.

This fund being inadequate to the requirements of equipment and for the
conduct of the war, the patriotism of the Congress provided the means in
the war-revenue act of June 13 by authorizing a 3 per cent popular loan
not to exceed $400,000,000 and by levying additional imposts and taxes.
Of the authorized loan $200,000,000 were offered and promptly taken the
subscriptions so far exceeding the call as to cover it many times over,
while, preference being given to the smaller bids, no single allotment
exceeded $5,000. This was a most encouraging and significant result,
showing the vast resources of the nation and the determination of the
people to uphold their country's honor.

It is not within the province of this message to narrate the history of
the extraordinary war that followed the Spanish declaration of April 21,
but a brief recital of its more salient features is appropriate.

The first encounter of the war in point of date took place April 27,
when a detachment of the blockading squadron made a reconnoissance in
force at Matanzas, shelled the harbor forts, and demolished several new
works in construction.

The next engagement was destined to mark a memorable epoch in maritime
warfare. The Pacific fleet, under Commodore George Dewey, had lain for
some weeks at Hongkong. Upon the colonial proclamation of neutrality
being issued and the customary twenty-four hours' notice being given, it
repaired to Mirs Bay, near Hongkong, whence it proceeded to the
Philippine Islands under telegraphed orders to capture or destroy the
formidable Spanish fleet then assembled at Manila. At daybreak on the
1st of May the American force entered Manila Bay, and after a few hours'
engagement effected the total destruction of the Spanish fleet,
consisting of ten war ships and a transport, besides capturing the naval
station and forts at Cavite, thus annihilating the Spanish naval power
in the Pacific Ocean and completely controlling the bay of Manila, with
the ability to take the city at will. Not a life was lost on our ships,
the wounded only numbering seven, while not a vessel was materially
injured. For this gallant achievement the Congress, upon my
recommendation, fitly bestowed upon the actors preferment and
substantial reward.

The effect of this remarkable victory upon the spirit of our people and
upon the fortunes of the war was instant. A prestige of invincibility
thereby attached to our arms which continued throughout the struggle.
Reenforcements were hurried to Manila under the command of Major-General
Merritt and firmly established within sight of the capital, which lay
helpless before our guns.

On the 7th day of May the Government was advised officially of the
victory at Manila, and at once inquired of the commander of our fleet
what troops would be required. The information was received on the 15th
day of May, and the first army expedition sailed May 25 and arrived off
Manila June 30. Other expeditions soon followed, the total force
consisting of 641 officers and 15,058 enlisted men.

Only reluctance to cause needless loss of life and property prevented
the early storming and capture of the city, and therewith the absolute
military occupancy of the whole group. The insurgents meanwhile had
resumed the active hostilities suspended by the uncompleted truce of
December, 1897. Their forces invested Manila from the northern and
eastern sides, but were constrained by Admiral Dewey and General Merrill
from attempting an assault. It was fitting that whatever was to be done
in the way of decisive operations in that quarter should be accomplished
by the strong arm of the United States alone. Obeying the stern precept
of war which enjoins the overcoming of the adversary and the extinction
of his power wherever assailable as the speedy and sure means to win a
peace, divided victory was not permissible, for no partition of the
rights and responsibilities attending the enforcement of a just and
advantageous peace could be thought of.

Following the comprehensive scheme of general attack, powerful forces
were assembled at various points on our coast to invade Cuba and Puerto
Rico. Meanwhile naval demonstrations were made at several exposed
points. On May 11 the cruiser Wilmington and torpedo boat Winslow were
unsuccessful in an attempt to silence the batteries at Cardenas, a
gallant ensign, Worth Bagley, and four seamen falling. These grievous
fatalities were, strangely enough, among the very few which occurred
during our naval operations in this extraordinary conflict.

Meanwhile the Spanish naval preparations had been pushed with great
vigor. A powerful squadron under Admiral Cervera, which had assembled at
the Cape Verde Islands before the outbreak of hostilities, had crossed
the ocean, and by its erratic movements in the Caribbean Sea delayed our
military plans while baffling the pursuit of our fleets. For a time
fears were felt lest the Oregon and Marietta, then nearing home after
their long voyage from San Francisco of over 15,000 miles, might be
surprised by Admiral Cervera's fleet, but their fortunate arrival
dispelled these apprehensions and lent much-needed reenforcement. Not
until Admiral Cervera took refuge in the harbor of Santiago de Cuba,
about May 19, was it practicable to plan a systematic naval and military
attack upon the Antillean possessions of Spain.

Several demonstrations occurred on the coasts of Cuba and Puerto Rico in
preparation for the larger event. On May 13 the North Atlantic Squadron
shelled San Juan de Puerto Rico. On May 30 Commodore Schley's squadron
bombarded the forts guarding the mouth of Santiago Harbor. Neither
attack had any material result. It was evident that well-ordered land
operations were indispensable to achieve a decisive advantage.

The next act in the war thrilled not alone the hearts of our countrymen
but the world by its exceptional heroism. On the night of June 3
Lieutenant Hobson, aided by seven devoted volunteers, blocked the narrow
outlet from Santiago Harbor by sinking the collier Merrimac in the
channel, under a fierce fire from the shore batteries, escaping with
their lives as by a miracle, but falling into the hands of the
Spaniards. It is a most gratifying incident of the war that the bravery
of this little band of heroes was cordially appreciated by the Spanish
admiral, who sent a flag of truce to notify Admiral Sampson of their
safety and to compliment them on their daring act. They were
subsequently exchanged July 7.

By June 7 the cutting of the last Cuban cable isolated the island.
Thereafter the invasion was vigorously prosecuted. On June 10, under a
heavy protecting fire, a landing of 600 marines from the Oregon,
Marblehead, and Yankee was effected in Guantanamo Bay, where it had been
determined to establish a naval station.

This important and essential port was taken from the enemy, after severe
fighting, by the marines, who were the first organized force of the
United States to land in Cuba.

The position so won was held despite desperate attempts to dislodge our
forces. By June 16 additional forces were landed and strongly
in-trenched. On June 22 the advance of the invading army under
Major-General Shafter landed at Daiquiri, about 15 miles east of
Santiago. This was accomplished under great difficulties, but with
marvelous dispatch. On June 23 the movement against Santiago was begun.
On the 24th the first serious engagement took place, in which the First
and Tenth Cavalry and the First United States Volunteer Cavalry, General
Young's brigade of General Wheeler's division, participated, losing
heavily. By nightfall, however, ground within 5 miles of Santiago was
won. The advantage was steadily increased. On July 1 a severe battle
took place, our forces gaining the outworks of Santiago; on the 2d El
Caney and San Juan were taken after a desperate charge, and the
investment of the city was completed. The Navy cooperated by shelling
the town and the coast forts.

On the day following this brilliant achievement of our land forces, the
3d of July, occurred the decisive naval combat of the war. The Spanish
fleet, attempting to leave the harbor, was met by the American squadron
under command of Commodore Sampson. In less than three hours all the
Spanish ships were destroyed, the two torpedo boats being sunk and the
Maria Teresa, Almirante Oquendo, Vizcaya, and Cristobal Colon driven
ashore. The Spanish admiral and over 1,300 men were taken prisoners.
While the enemy's loss of life was deplorably large, some 600 perishing,
on our side but one man was killed, on the Brooklyn, and one man
seriously wounded. Although our ships were repeatedly struck, not one
was seriously injured. Where all so conspicuously distinguished
themselves, from the commanders to the gunners and the unnamed heroes in
the boiler rooms, each and all contributing toward the achievement of
this astounding victory, for which neither ancient nor modern history
affords a parallel in the completeness of the event and the marvelous
disproportion of casualties, it would be invidious to single out any for
especial honor. Deserved promotion has rewarded the more conspicuous
actors. The nation's profoundest gratitude is due to all of these brave
men who by their skill and devotion in a few short hours crushed the sea
power of Spain and wrought a triumph whose decisiveness and far-reaching
consequences can scarcely be measured. Nor can we be unmindful of the
achievements of our builders, mechanics, and artisans for their skill in
the construction of our war ships.

With the catastrophe of Santiago Spain's effort upon the ocean virtually
ceased. A spasmodic effort toward the end of June to send her
Mediterranean fleet, under Admiral Camara, to relieve Manila was
abandoned, the expedition being recalled after it had passed through the
Suez Canal.

The capitulation of Santiago followed. The city was closely besieged by
land, while the entrance of our ships into the harbor cut off all relief
on that side. After a truce to allow of the removal of noncombatants
protracted negotiations continued from July 3 until July 15, when, under
menace of immediate assault, the preliminaries of surrender were agreed
upon. On the 17th General Shafter occupied the city. The capitulation
embraced the entire eastern end of Cuba. The number of Spanish soldiers
surrendering was 22,000, all of whom were subsequently conveyed to Spain
at the charge of the United States. The story of this successful
campaign is told in the report of the Secretary of War, which will be
laid before you. The individual valor of officers and soldiers was never
more strikingly shown than in the several engagements leading to the
surrender of Santiago, while the prompt movements and successive
victories won instant and universal applause. To those who gained this
complete triumph, which established the ascendency of the United States
upon land as the fight off Santiago had fixed our supremacy on the seas,
the earnest and lasting gratitude of the nation is unsparingly due. Nor
should we alone remember the gallantry of the living; the dead claim our
tears, and our losses by battle and disease must cloud any exultation at
the result and teach us to weigh the awful cost of war, however rightful
the cause or signal the victory.

With the fall of Santiago the occupation of Puerto Rico became the next
strategic necessity. General Miles had previously been assigned to
organize an expedition for that purpose. Fortunately he was already at
Santiago, where he had arrived on the 11th of July with reenforcements
for General Shafter's army.

With these troops, consisting of 3,415 infantry and artillery, two
companies of engineers, and one company of the Signal Corps, General
Miles left Guantanamo on July 21, having nine transports convoyed by the
fleet under Captain Higginson with the Massachusetts (flagship), Dixie,
Gloucester, Columbia, and Yale, the two latter carrying troops. The
expedition landed at Guanica July 25, which port was entered with little
opposition. Here the fleet was joined by the Annapolis and the Wasp,
while the Puritan and Amphitrite went to San Juan and joined the New
Orleans, which was engaged in blockading that port. The Major-General
Commanding was subsequently reenforced by General Schwan's brigade of
the Third Army Corps, by General Wilson with a part of his division, and
also by General Brooke with a part of his corps, numbering in all 16,973
officers and men.

On July 27 he entered Ponce, one of the most important ports in the
island, from which he thereafter directed operations for the capture of
the island.

With the exception of encounters with the enemy at Guayama, Hormigueros,
Coamo, and Yauco and an attack on a force landed at Cape San Juan, there
was no serious resistance. The campaign was prosecuted with great vigor,
and by the 12th of August much of the island was in our possession and
the acquisition of the remainder was only a matter of a short time. At
most of the points in the island our troops were enthusiastically
welcomed. Protestations of loyalty to the flag and gratitude for
delivery from Spanish rule met our commanders at every stage. As a
potent influence toward peace the outcome of the Puerto Rican expedition
was of great consequence, and generous commendation is due to those who
participated in it.

The last scene of the war was enacted at Manila, its starting place. On
August 15, after a brief assault upon the works by the land forces, in
which the squadron assisted, the capital surrendered unconditionally.
The casualties were comparatively few. By this the conquest of the
Philippine Islands, virtually accomplished when the Spanish capacity for
resistance was destroyed by Admiral Dewey's victory of the 1st of May,
was formally sealed. To General Merrill, his officers and men, for their
uncomplaining and devoted service and for their gallantry in action, the
nation is sincerely grateful. Their long voyage was made with singular
success, and the soldierly conduct of the men, most of whom were without
previous experience in the military service, deserves unmeasured praise.

The total casualties in killed and wounded in the Army during the war
with Spain were: Officers killed, 23; enlisted men killed, 257; total,
280; officers wounded, 113; enlisted men wounded, 1,464; total, 1,577.
Of the Navy: Killed, 17; wounded, 67; died as result of wounds, 1;
invalided from service, 6; total, 91.

It will be observed that while our Navy was engaged in two great battles
and in numerous perilous undertakings in blockade and bombardment, and
more than 50,000 of our troops were transported to distant lands and
were engaged in assault and siege and battle and many skirmishes in
unfamiliar territory, we lost in both arms of the service a total of
1,668 killed and wounded; and in the entire campaign by land and sea we
did not lose a gun or a flag or a transport or a ship, and, with the
exception of the crew of the Merrimac, not a soldier or sailor was taken
prisoner.

On August 7, forty-six days from the date of the landing of General
Shafter's army in Cuba and twenty-one days from the surrender of
Santiago, the United States troops commenced embarkation for home, and
our entire force was returned to the United States as early as August
24. They were absent from the United States only two months.

It is fitting that I should bear testimony to the patriotism and
devotion of that large portion of our Army which, although eager to be
ordered to the post of greatest exposure, fortunately was not required
outside of the United States. They did their whole duty, and, like their
comrades at the front, have earned the gratitude of the nation. In like
manner, the officers and men of the Army and of the Navy who remained in
their departments and stations faithfully performing most important
duties connected with the war, and whose requests for assignment in the
field and at sea I was compelled to refuse because their services were
indispensable here, are entitled to the highest commendation. It is my
regret that there seems to be no provision for their suitable
recognition.

In this connection it is a pleasure for me to mention in terms of
cordial appreciation the timely and useful work of the American National
Red Cross, both in relief measures preparatory to the campaigns, in
sanitary assistance at several of the camps of assemblage, and later,
under the able and experienced leadership of the president of the
society, Miss Clara Barton, on the fields of battle and in the hospitals
at the front in Cuba. Working in conjunction with the governmental
authorities and under their sanction and approval, and with the
enthusiastic cooperation of many patriotic women and societies in the
various States, the Red Cross has fully maintained its already high
reputation for intense earnestness and ability to exercise the noble
purposes of its international organization, thus justifying the
confidence and support which it has received at the hands of the
American people. To the members and officers of this society and all who
aided them in their philanthropic work the sincere and lasting gratitude
of the soldiers and the public is due and is freely accorded.

In tracing these events we are constantly reminded of our obligations to
the Divine Master for His watchful care over us and His safe guidance,
for which the nation makes reverent acknowledgment and offers humble
prayer for the continuance of His favor.

The annihilation of Admiral Cervera's fleet, followed by the
capitulation of Santiago, having brought to the Spanish Government a
realizing sense of the hopelessness of continuing a struggle now become
wholly unequal, it made overtures of peace through the French
ambassador, who, with the assent of his Government, had acted as the
friendly representative of Spanish interests during the war. On the 26th
of July M. Cambon presented a communication signed by the Duke of
Almodovar, the Spanish minister of state, inviting the United States to
state the terms upon which it would be willing to make peace. On the
30th of July, by a communication addressed to the Duke of Almodovar and
handed to M. Cambon, the terms of this Government were announced
substantially as in the protocol afterwards signed. On the 10th of
August the Spanish reply, dated August 7, was handed by M. Cambon to the
Secretary of State. It accepted unconditionally the terms imposed as to
Cuba, Puerto Rico, and an island of the Ladrones group, but appeared to
seek to introduce inadmissible reservations in regard to our demand as
to the Philippine Islands. Conceiving that discussion on this point
could neither be practical nor profitable, I directed that in order to
avoid misunderstanding the matter should be forthwith closed by
proposing the embodiment in a formal protocol of the terms upon which
the negotiations for peace were to be undertaken. The vague and
inexplicit suggestions of the Spanish note could not be accepted, the
only reply being to present as a virtual ultimatum a draft of protocol
embodying the precise terms tendered to Spain in our note of July 30,
with added stipulations of detail as to the appointment of commissioners
to arrange for the evacuation of the Spanish Antilles. On August 12 M.
Cambon announced his receipt of full powers to sign the protocol so
submitted. Accordingly, on the afternoon of August 12, M. Cambon, as the
plenipotentiary of Spain, and the Secretary of State, as the
plenipotentiary of the United States, signed a protocol providing--

ARTICLE I. Spain will relinquish all claim of sovereignty over and title
to Cuba.

ART. II. Spain will cede to the United States the island of Puerto Rico
and other islands now under Spanish sovereignty in the West Indies, and
also an island in the Ladrones to be selected by the United States.

ART. III. The United States will occupy and hold the city, bay, and
harbor of Manila pending the conclusion of a treaty of peace which shall
determine the control, disposition, and government of the Philippines.
The fourth article provided for the appointment of joint commissions on
the part of the United States and Spain, to meet in Havana and San Juan,
respectively, for the purpose of arranging and carrying out the details
of the stipulated evacuation of Cuba, Puerto Rico, and other Spanish
islands in the West Indies.

The fifth article provided for the appointment of not more than five
commissioners on each side, to meet at Paris not later than October 1
and to proceed to the negotiation and conclusion of a treaty of peace,
subject to ratification according to the respective constitutional forms
of the two countries.

The sixth and last article provided that upon the signature of the
protocol hostilities between the two countries should be suspended and
that notice to that effect should be given as soon as possible by each
Government to the commanders of its military and naval forces.

Immediately upon the conclusion of the protocol I issued a proclamation,
of August 12, suspending hostilities on the part of the United States.
The necessary orders to that end were at once given by telegraph. The
blockade of the ports of Cuba and San Juan de Puerto Rico was in like
manner raised. On the 18th of August the muster out of 100,000
volunteers, or as near that number as was found to be practicable, was
ordered.

On the 1st of December 101,165 officers and men had been mustered out
and discharged from the service, and 9,002 more will be mustered out by
the 10th of this month; also a corresponding number of general and
general staff officers have been honorably discharged the service.

The military commissions to superintend the evacuation of Cuba, Puerto
Rico, and the adjacent islands were forthwith appointed--for Cuba,
Major-General James F. Wade, Rear-Admiral William T. Sampson,
Major-General Matthew C. Butler; for Puerto Rico, Major--General John R.
Brooke, Rear-Admiral Winfield S. Schley, Brigadier-General William W.
Gordon--who soon afterwards met the Spanish commissioners at Havana and
San Juan, respectively. The Puerto Rican Joint Commission speedily
accomplished its task, and by the 18th of October the evacuation of the
island was completed. The United States flag was raised over the island
at noon on that day. The administration of its affairs has been
provisionally intrusted to a military governor until the Congress shall
otherwise provide. The Cuban Joint Commission has not yet terminated its
labors. Owing to the difficulties in the way of removing the large
numbers of Spanish troops still in Cuba, the evacuation can not be
completed before the 1st of January next.

Pursuant to the fifth article of the protocol, I appointed William R.
Day, lately Secretary of State; Cushman K. Davis, William P. Frye, and
George Gray, Senators of the United States, and Whitelaw Reid to be the
peace commissioners on the part of the United States. Proceeding in due
season to Paris, they there met on the 1st of October five commissioners
similarly appointed on the part of Spain. Their negotiations have made
hopeful progress, so that I trust soon to be able to lay a definitive
treaty of peace before the Senate, with a review of the steps leading to
its signature.

I do not discuss at this time the government or the future of the new
possessions which will come to us as the result of the war with Spain.
Such discussion will be appropriate after the treaty of peace shall be
ratified. In the meantime and until the Congress has legislated
otherwise it will be my duty to continue the military governments which
have existed since our occupation and give to the people security in
life and property and encouragement under a just and beneficent rule.

As soon as we are in possession of Cuba and have pacified the island it
will be necessary to give aid and direction to its people to form a
government for themselves. This should be undertaken at the earliest
moment consistent with safety and assured success. It is important that
our relations with this people shall be of the most friendly character
and our commercial relations close and reciprocal. It should be our duty
to assist in every proper way to build up the waste places of the
island, encourage the industry of the people, and assist them to form a
government which shall be free and independent, thus realizing the best
aspirations of the Cuban people.

Spanish rule must be replaced by a just, benevolent, and humane
government, created by the people of Cuba, capable of performing all
international obligations, and which shall encourage thrift, industry,
and prosperity and promote peace and good will among all of the
inhabitants, whatever may have been their relations in the past. Neither
revenge nor passion should have a place in the new government. Until
there is complete tranquillity in the island and a stable government
inaugurated military occupation will be continued.

With the one exception of the rupture with Spain, the intercourse of the
United States with the great family of nations has been marked with
cordiality, and the close of the eventful year finds most of the issues
that necessarily arise in the complex relations of sovereign states
adjusted or presenting no serious obstacle to a just and honorable
solution by amicable agreement.

A long unsettled dispute as to the extended boundary between the
Argentine Republic and Chile, stretching along the Andean crests from
the southern border of the Atacama Desert to Magellan Straits, nearly a
third of the length of the South American continent, assumed an acute
stage in the early part of the year, and afforded to this Government
occasion to express the hope that the resort to arbitration, already
contemplated by existing conventions between the parties, might prevail
despite the grave difficulties arising in its application. I am happy to
say that arrangements to this end have been perfected, the questions of
fact upon which the respective commissioners were unable to agree being
in course of reference to Her Britannic Majesty for determination. A
residual difference touching the northern boundary line across the
Atacama Desert, for which existing treaties provided no adequate
adjustment, bids fair to be settled in like manner by a joint
commission, upon which the United States minister at Buenos Ayres has
been invited to serve as umpire in the last resort.

I have found occasion to approach the Argentine Government with a view
to removing differences of rate charges imposed upon the cables of an
American corporation in the transmission between Buenos Ayres and the
cities of Uruguay and Brazil of through messages passing from and to the
United States. Although the matter is complicated by exclusive
concessions by Uruguay and Brazil to foreign companies, there is strong
hope that a good understanding will be reached and that the important
channels of commercial communication between the United States and the
Atlantic cities of South America may be freed from an almost prohibitory
discrimination.

In this relation I may be permitted to express my sense of the fitness
of an international agreement whereby the interchange of messages over
connecting cables may be regulated on a fair basis of uniformity. The
world has seen the postal system developed from a congeries of
independent and exclusive services into a well-ordered union, of which
all countries enjoy the manifold benefits. It would be strange were the
nations not in time brought to realize that modern civilization, which
owes so much of its progress to the annihilation of space by the
electric force, demands that this all-important means of communication
be a heritage of all peoples, to be administered and regulated in their
common behoof. A step in this direction was taken when the international
convention of 1884 for the protection of submarine cables was signed,
and the day is, I trust, not far distant when this medium for the
transmission of thought from land to land may be brought within the
domain of international concert as completely as is the material
carriage of commerce and correspondence upon the face of the waters that
divide them.

The claim of Thomas Jefferson Page against Argentina, which has been
pending many years, has been adjusted. The sum awarded by the Congress
of Argentina was $4,242.35.

The sympathy of the American people has justly been offered to the ruler
and the people of Austria-Hungary by reason of the affliction that has
lately befallen them in the assassination of the Empress-Queen of that
historic realm.

On the 10th of September, 1897, a conflict took place at Lattimer, Pa.,
between a body of striking miners and the sheriff of Luzerne County and
his deputies, in which 22 miners were killed and 44 wounded, of whom 10
of the killed and 12 of the wounded were Austrian and Hungarian
subjects. This deplorable event naturally aroused the solicitude of the
Austro-Hungarian Government, which, on the assumption that the killing
and wounding involved the unjustifiable misuse of authority, claimed
reparation for the sufferers. Apart from the searching investigation and
peremptory action of the authorities of Pennsylvania, the Federal
Executive took appropriate steps to learn the merits of the case, in
order to be in a position to meet the urgent complaint of a friendly
power. The sheriff and his deputies, having been indicted for murder,
were tried, and acquitted, after protracted proceedings and the hearing
of hundreds of witnesses, on the ground that the killing was in the line
of their official duty to uphold law and preserve public order in the
State. A representative of the Department of Justice attended the trial
and reported its course fully. With all the facts in its possession,
this Government expects to reach a harmonious understanding on the
subject with that of Austria-Hungary, notwithstanding the renewed claim
of the latter, after learning the result of the trial, for indemnity for
its injured subjects.

Despite the brief time allotted for preparation, the exhibits of this
country at the Universal Exposition at Brussels in 1897 enjoyed the
singular distinction of a larger proportion of awards, having regard to
the number and classes of articles entered than those of other
countries. The worth of such a result in making known our national
capacity to supply the world's markets is obvious.

Exhibitions of this international character are becoming more frequent
as the exchanges of commercial countries grow more intimate and varied.
Hardly a year passes that this Government is not invited to national
participation at some important foreign center, but often on too short
notice to permit of recourse to Congress for the power and means to do
so. My predecessors have suggested the advisability of providing by a
general enactment and a standing appropriation for accepting such
invitations and for representation of this country by a commission. This
plan has my cordial approval.

I trust that the Belgian restrictions on the importation of cattle from
the United States, originally adopted as a sanitary precaution, will at
an early day be relaxed as to their present features of hardship and
discrimination, so as to admit live cattle under due regulation of their
slaughter after landing. I am hopeful, too, of favorable change in the
Belgian treatment of our preserved and salted meats. The growth of
direct trade between the two countries, not alone for Belgian
consumption and Belgian products, but by way of transit from and to
other continental states, has been both encouraging and beneficial. No
effort will be spared to enlarge its advantages by seeking the removal
of needless impediments and by arrangements for increased commercial
exchanges.

The year's events in Central America deserve more than passing mention.

A menacing rupture between Costa Rica and Nicaragua was happily composed
by the signature of a convention between the parties, with the
concurrence of the Guatemalan representative as a mediator, the act
being negotiated and signed on board the United States steamer Alert,
then lying in Central American waters. It is believed that the good
offices of our envoy and of the commander of that vessel contributed
toward this gratifying outcome.

In my last annual message the situation was presented with respect to
the diplomatic representation of this Government in Central America
created by the association of Nicaragua, Honduras, and Salvador under
the title of the Greater Republic of Central America, and the delegation
of their international functions to the Diet thereof. While the
representative character of the Diet was recognized by my predecessor
and has been confirmed during my Administration by receiving its
accredited envoy and granting exequaturs to consuls commissioned under
its authority, that recognition was qualified by the distinct
understanding that the responsibility of each of the component sovereign
Republics toward the United States remained wholly unaffected.

This proviso was needful inasmuch as the compact of the three Republics
was at the outset an association whereby certain representative
functions were delegated to a tripartite commission rather than a
federation possessing centralized powers of government and
administration. In this view of their relation and of the relation of
the United States to the several Republics, a change in the
representation of this country in Central America was neither
recommended by the Executive nor initiated by Congress, thus leaving one
of our envoys accredited, as heretofore, separately to two States of the
Greater Republic, Nicaragua and Salvador, and to a third State, Costa
Rica, which was not a party to the compact, while our other envoy was
similarly accredited to a union State, Honduras, and a nonunion State,
Guatemala. The result has been that the one has presented credentials
only to the President of Costa Rica, the other having been received only
by the Government of Guatemala.

Subsequently the three associated Republics entered into negotiations
for taking the steps forecast in the original compact. A convention of
their delegates framed for them a federal constitution under the name of
the United States of Central America, and provided for a central federal
government and legislature. Upon ratification by the constituent States,
the 1st of November last was fixed for the new system to go into
operation. Within a few weeks thereafter the plan was severely tested by
revolutionary movements arising, with a consequent demand for unity of
action on the part of the military power of the federal States to
suppress them. Under this strain the new union seems to have been
weakened through the withdrawal of its more important members. This
Government was not officially advised of the installation of the
federation and has maintained an attitude of friendly expectancy, while
in no wise relinquishing the position held from the outset that the
responsibilities of the several States toward us remained unaltered by
their tentative relations among themselves.

The Nicaragua Canal Commission, under the chairmanship of Rear-Admiral
John G. Walker, appointed July 24, 1897, under the authority of a
provision in the sundry civil act of June 4 of that year, has nearly
completed its labors, and the results of its exhaustive inquiry into the
proper route, the feasibility, and the cost of construction of an
interoceanic canal by a Nicaraguan route will be laid before you. In the
performance of its task the commission received all possible courtesy
and assistance from the Governments of Nicaragua and Costa Rica, which
thus testified their appreciation of the importance of giving a speedy
and practical outcome to the great project that has for so many years
engrossed the attention of the respective countries.

As the scope of the recent inquiry embraced the whole subject, with the
aim of making plans and surveys for a canal by the most convenient
route, it necessarily included a review of the results of previous
surveys and plans, and in particular those adopted by the Maritime Canal
Company under its existing concessions from Nicaragua and Costa Rica, so
that to this extent those grants necessarily hold as essential a part in
the deliberations and conclusions of the Canal Commission as they have
held and must needs hold in the discussion of the matter by the
Congress. Under these circumstances and in view of overtures made to the
Governments of Nicaragua and Costa Rica by other parties for a new canal
concession predicated on the assumed approaching lapse of the contracts
of the Maritime Canal Company with those States, I have not hesitated to
express my conviction that considerations of expediency and
international policy as between the several governments interested in
the construction and control of an interoceanic canal by this route
require the maintenance of the status quo until the Canal Commission
shall have reported and the United States Congress shall have had the
opportunity to pass finally upon the whole matter during the present
session, without prejudice by reason of any change in the existing
conditions.

Nevertheless, it appears that the Government of Nicaragua, as one of its
last sovereign acts before merging its powers in those of the newly
formed United States of Central America, has granted an optional
concession to another association, to become effective on the expiration
of the present grant. It does not appear what surveys have been made or
what route is proposed under this contingent grant, so that an
examination of the feasibility of its plans is necessarily not embraced
in the report of the Canal Commission. All these circumstances suggest
the urgency of some definite action by the Congress at this session if
the labors of the past are to be utilized and the linking of the
Atlantic and Pacific oceans by a practical waterway is to be realized.
That the construction of such a maritime highway is now more than ever
indispensable to that intimate and ready intercommunication between our
eastern and western seaboards demanded by the annexation of the Hawaiian
Islands and the prospective expansion of our influence and commerce in
the Pacific, and that our national policy now more imperatively than
ever calls for its control by this Government, are propositions which I
doubt not the Congress will duly appreciate and wisely act upon.

A convention providing for the revival of the late United States and
Chilean Claims Commission and the consideration of claims which were
duly presented to the late commission, but not considered because of the
expiration of the time limited for the duration of the commission, was
signed May 24, 1897, and has remained unacted upon by the Senate. The
term therein fixed for effecting the exchange of ratifications having
elapsed, the convention falls unless the time be extended by amendment,
which I am endeavoring to bring about, with the friendly concurrence of
the Chilean Government.

The United States has not been an indifferent spectator of the
extraordinary events transpiring in the Chinese Empire, whereby portions
of its maritime provinces are passing under the control of various
European powers; but the prospect that the vast commerce which the
energy of our citizens and the necessity of our staple productions for
Chinese uses has built up in those regions may not be prejudiced through
any exclusive treatment by the new occupants has obviated the need of
our country becoming an actor in the scene. Our position among nations,
having a large Pacific coast and a constantly expanding direct trade
with the farther Orient, gives us the equitable claim to consideration
and friendly treatment in this regard, and it will be my aim to subserve
our large interests in that quarter by all means appropriate to the
constant policy of our Government. The territories of Kiao-chow, of
Wei-hai-wei, and of Port Arthur and Talienwan, leased to Germany, Great
Britain, and Russia, respectively, for terms of years, will, it is
announced, be open to international commerce during such alien
occupation; and if no discriminating treatment of American citizens and
their trade be found to exist or be hereafter developed, the desire of
this Government would appear to be realized.

In this relation, as showing the volume and value of our exchanges with
China and the peculiarly favorable conditions which exist for their
expansion in the normal course of trade, I refer to the communication
addressed to the Speaker of the House of Representatives by the
Secretary of the Treasury on the 14th of last June, with its
accompanying letter of the Secretary of State, recommending an
appropriation for a commission to study the commercial and industrial
conditions in the Chinese Empire and report as to the opportunities for
and obstacles to the enlargement of markets in China for the raw
products and manufactures of the United States. Action was not taken
thereon during the late session. I cordially urge that the
recommendation receive at your hands the consideration which its
importance and timeliness merit.

Meanwhile there may be just ground for disquietude in view of the unrest
and revival of the old sentiment of opposition and prejudice to alien
people which pervades certain of the Chinese provinces. As in the case
of the attacks upon our citizens in Szechuen and at Kutien in 1895, the
United States minister has been instructed to secure the fullest measure
of protection, both local and imperial, for any menaced American
interests, and to demand, in case of lawless injury to person or
property, instant reparation appropriate to the case. War ships have
been stationed at Tientsin for more ready observation of the disorders
which have invaded even the Chinese capital, so as to be in a position
to act should need arise, while a guard of marines has been sent to
Peking to afford the minister the same measure of authoritative
protection as the representatives of other nations have been constrained
to employ.

Following close upon the rendition of the award of my predecessor as
arbitrator of the claim of the Italian subject Cerruti against the
Republic of Colombia, differences arose between the parties to the
arbitration in regard to the scope and extension of the award, of which
certain articles were contested by Colombia, while Italy claimed their
literal fulfillment. The award having been made by the President of the
United States, as an act of friendly consideration and with the sole
view to an impartial composition of the matter in dispute, I could not
but feel deep concern at such a miscarriage, and while unable to accept
the Colombian theory that I, in my official capacity, possessed
continuing functions as arbitrator, with power to interpret or revise
the terms of the award, my best efforts were lent to bring the parties
to a harmonious agreement as to the execution of its provisions.

A naval demonstration by Italy resulted in an engagement to pay the
liabilities claimed upon their ascertainment; but this apparent
disposition of the controversy was followed by a rupture of diplomatic
intercourse between Colombia and Italy, which still continues, although,
fortunately, without acute symptoms having supervened. Notwithstanding
this, efforts are reported to be continuing for the ascertainment of
Colombia's contingent liability on account of Cerruti's debts under the
fifth article of the award.

A claim of an American citizen against the Dominican Republic for a
public bridge over the Ozama River, which has been in diplomatic
controversy for several years, has been settled by expert arbitration
and an award in favor of the claimant amounting to about $90,000. It,
however, remains unpaid, despite urgent demands for its settlement
according to the terms of the compact.

There is now every prospect that the participation of the United States
in the Universal Exposition to be held in Paris in 1900 will be on a
scale commensurate with the advanced position held by our products and
industries in the world's chief marts.

The preliminary report of Mr. Moses P. Handy, who, under the act
approved July 19, 1897, was appointed special commissioner with a view
to securing all attainable information necessary to a full and complete
understanding by Congress in regard to the participation of this
Government in the Paris Exposition, was laid before you by my message of
December 6, 1897, and showed the large opportunities opened to make
known our national progress in arts, science, and manufactures, as well
as the urgent need of immediate and adequate provision to enable due
advantage thereof to be taken. Mr. Handy's death soon afterwards
rendered it necessary for another to take up and complete his unfinished
work, and on January 11 last Mr. Thomas W. Cridler, Third Assistant
Secretary of State, was designated to fulfill that task. His report was
laid before you by my message of June 14, 1898, with the gratifying
result of awakening renewed interest in the projected display. By a
provision in the sundry civil appropriation act of July 1, 1898, a sum
not to exceed $650,000 was allotted for the organization of a commission
to care for the proper preparation and installation of American exhibits
and for the display of suitable exhibits by the several Executive
Departments, particularly by the Department of Agriculture, the Fish
Commission, and the Smithsonian Institution, in representation of the
Government of the United States.

Pursuant to that enactment I appointed Mr. Ferdinand W. Peck, of
Chicago, commissioner-general, with an assistant commissioner-general
and a secretary. Mr. Peck at once proceeded to Paris, where his success
in enlarging the scope and variety of the United States exhibit has been
most gratifying. Notwithstanding the comparatively limited area of the
exposition site--less than one-half that of the World's Fair at
Chicago--the space assigned to the United States has been increased from
the absolute allotment of 157,403 square feet reported by Mr. Handy to
some 202,000 square feet, with corresponding augmentation of the field
for a truly characteristic representation of the various important
branches of our country's development. Mr. Peck's report will be laid
before you. In my judgment its recommendations will call for your early
consideration, especially as regards an increase of the appropriation to
at least one million dollars in all, so that not only may the assigned
space be fully taken up by the best possible exhibits in every class,
but the preparation and installation be on so perfect a scale as to rank
among the first in that unparalleled competition of artistic and
inventive production, and thus counterbalance the disadvantage with
which we start as compared with other countries whose appropriations are
on a more generous scale and whose preparations are in a state of much
greater forwardness than our own.

Where our artisans have the admitted capacity to excel, where our
inventive genius has initiated many of the grandest discoveries of these
later days of the century, and where the native resources of our land
are as limitless as they are valuable to supply the world's needs, it is
our province, as it should be our earnest care, to lead in the march of
human progress, and not rest content with any secondary place. Moreover,
if this be due to ourselves, it is no less due to the great French
nation whose guests we become, and which has in so many ways testified
its wish and hope that our participation shall befit the place the two
peoples have won in the field of universal development.

The commercial arrangement made with France on the 28th of May, 1898,
under the provisions of section 3 of the tariff act of 1897, went into
effect on the 1st day of June following. It has relieved a portion of
our export trade from serious embarrassment. Further negotiations are
now pending under section 4 of the same act with a view to the increase
of trade between the two countries to their mutual advantage.
Negotiations with other governments, in part interrupted by the war with
Spain, are in progress under both sections of the tariff act. I hope to
be able to announce some of the results of these negotiations during the
present session of Congress.

Negotiations to the same end with Germany have been set on foot.
Meanwhile no effort has been relaxed to convince the Imperial Government
of the thoroughness of our inspection of pork products for exportation,
and it is trusted that the efficient administration of this measure by
the Department of Agriculture will be recognized as a guaranty of the
healthfulness of the food staples we send abroad to countries where
their use is large and necessary.

I transmitted to the Senate on the 10th of February last information
touching the prohibition against the importation of fresh fruits from
this country, which had then recently been decreed by Germany on the
ground of danger of disseminating the San Jose scale insect. This
precautionary measure was justified by Germany on the score of the
drastic steps taken in several States of the Union against the spread of
the pest, the elaborate reports of the Department of Agriculture being
put in evidence to show the danger to German fruit-growing interests
should the scale obtain a lodgment in that country. Temporary relief was
afforded in the case of large consignments of fruit then on the way by
inspection and admission when found noninfected. Later the prohibition
was extended to dried fruits of every kind, but was relaxed so as to
apply only to unpeeled fruit and fruit waste. As was to be expected, the
alarm reached to other countries, and Switzerland has adopted a similar
inhibition. Efforts are in progress to induce the German and Swiss
Governments to relax the prohibition in favor of dried fruits shown to
have been cured under circumstances rendering the existence of animal
life impossible.

Our relations with Great Britain have continued on the most friendly
footing. Assenting to our request, the protection of Americans and their
interests in Spanish jurisdiction was assumed by the diplomatic and
consular representatives of Great Britain, who fulfilled their delicate
and arduous trust with tact and zeal, eliciting high commendation. I may
be allowed to make fitting allusion to the instance of Mr. Ramsden, Her
Majesty's consul at Santiago de Cuba, whose untimely death after
distinguished service and untiring effort during the siege of that city
was sincerely lamented.

In the early part of April last, pursuant to a request made at the
instance of the Secretary of State by the British ambassador at this
capital, the Canadian government granted facilities for the passage of
four United States revenue cutters from the Great Lakes to the Atlantic
coast by way of the Canadian canals and the St. Lawrence River. The
vessels had reached Lake Ontario and were there awaiting the opening of
navigation when war was declared between the United States and Spain.
Her Majesty's Government thereupon, by a communication of the latter
part of April, stated that the permission granted before the outbreak of
hostilities would not be withdrawn provided the United States Government
gave assurance that the vessels in question would proceed direct to a
United States port without engaging in any hostile operation. This
Government promptly agreed to the stipulated condition, it being
understood that the vessels would not be prohibited from resisting any
hostile attack.

It will give me especial satisfaction if I shall be authorized to
communicate to you a favorable conclusion of the pending negotiations
with Great Britain in respect to the Dominion of Canada. It is the
earnest wish of this Government to remove all sources of discord and
irritation in our relations with the neighboring Dominion. The trade
between the two countries is constantly increasing, and it is important
to both countries that all reasonable facilities should be granted for
its development.

The Government of Greece strongly urges the onerousness of the duty here
imposed upon the currants of that country, amounting to 100 per cent or
more of their market value. This fruit is stated to be exclusively a
Greek product, not coming into competition with any domestic product.
The question of reciprocal commercial relations with Greece, including
the restoration of currants to the free list, is under consideration.

The long-standing claim of Bernard Campbell for damages for injuries
sustained from a violent assault committed against him by military
authorities in the island of Haiti has been settled by the agreement of
that Republic to pay him $10,000 in American gold. Of this sum $5,000
has already been paid. It is hoped that other pending claims of American
citizens against that Republic may be amicably adjusted.

Pending the consideration by the Senate of the treaty signed June 1897,
by the plenipotentiaries of the United States and of the Republic of
Hawaii, providing for the annexation of the islands, a joint resolution
to accomplish the same purpose by accepting the offered cession and
incorporating the ceded territory into the Union was adopted by the
Congress and approved July 7, 1898. I thereupon directed the United
States steamship Philadelphia to convey Rear-Admiral Miller to Honolulu,
and intrusted to his hands this important legislative act, to be
delivered to the President of the Republic of Hawaii, with whom the
Admiral and the United States minister were authorized to make
appropriate arrangements for transferring the sovereignty of the islands
to the United States. This was simply but impressively accomplished on
the 12th of August last by the delivery of a certified copy of the
resolution to President Dole, who thereupon yielded up to the
representative of the Government of the United States the sovereignty
and public property of the Hawaiian Islands.

Pursuant to the terms of the joint resolution and in exercise of the
authority thereby conferred upon me, I directed that the civil,
judicial, and military powers theretofore exercised by the officers of
the Government of the Republic of Hawaii should continue to be exercised
by those officers until Congress shall provide a government for the
incorporated territory, subject to my power to remove such officers and
to fill vacancies. The President, officers, and troops of the Republic
thereupon took the oath of allegiance to the United States, thus
providing for the uninterrupted continuance of all the administrative
and municipal functions of the annexed territory until Congress shall
otherwise enact.

Following the further provision of the joint resolution, I appointed the
Hons. Shelby M. Cullom, of Illinois, John T. Morgan, of Alabama, Robert
R. Hitt, of Illinois, Sanford B. Dole, of Hawaii, and Walter F. Frear,
of Hawaii, as commissioners to confer and recommend to Congress such
legislation concerning the Hawaiian Islands as they should deem
necessary or proper. The commissioners having fulfilled the mission
confided to them, their report will be laid before you at an early day.
It is believed that their recommendations will have the earnest
consideration due to the magnitude of the responsibility resting upon
you to give such shape to the relationship of those mid-Pacific lands to
our home Union as will benefit both in the highest degree, realizing the
aspirations of the community that has cast its lot with us and elected
to share our political heritage, while at the same time justifying the
foresight of those who for three-quarters of a century have looked to
the assimilation of Hawaii as a natural and inevitable consummation, in
harmony with our needs and in fulfillment of our cherished traditions.

The questions heretofore pending between Hawaii and Japan growing out of
the alleged mistreatment of Japanese treaty immigrants were, I am
pleased to say, adjusted before the act of transfer by the payment of a
reasonable indemnity to the Government of Japan.

Under the provisions of the joint resolution, the existing customs
relations of the Hawaiian Islands with the United States and with other
countries remain unchanged until legislation shall otherwise provide.
The consuls of Hawaii here and in foreign countries continue to fulfill
their commercial agencies, while the United States consulate at Honolulu
is maintained for all appropriate services pertaining to trade and the
revenue. It would be desirable that all foreign consuls in the Hawaiian
Islands should receive new exequaturs from this Government.

The attention of Congress is called to the fact that, our consular
offices having ceased to exist in Hawaii and being about to cease in
other countries coming under the sovereignty of the United States, the
provisions for the relief and transportation of destitute American
seamen in these countries under our consular regulations will in
consequence terminate. It is proper, therefore, that new legislation
should be enacted upon this subject in order to meet the changed
conditions.

The interpretation of certain provisions of the extradition convention
of December 11, 1861, has been at various times the occasion of
controversy with the Government of Mexico. An acute difference arose in
the case of the Mexican demand for the delivery of Jesus Guerra, who,
having led a marauding expedition near the border with the proclaimed
purpose of initiating an insurrection against President Diaz, escaped
into Texas. Extradition was refused on the ground that the alleged
offense was political in its character, and therefore came within the
treaty proviso of nonsurrender. The Mexican contention was that the
exception only related to purely political offenses, and that as
Guerra's acts were admixed with the common crime of murder, arson,
kidnaping, and robbery, the option of nondelivery became void, a
position which this Government was unable to admit in view of the
received international doctrine and practice in the matter. The Mexican
Government, in view of this, gave notice January 24, 1898, of the
termination of the convention, to take effect twelve months from that
date, at the same time inviting the conclusion of a new convention,
toward which negotiations are on foot.

In this relation I may refer to the necessity of some amendment of our
existing extradition statute. It is a common stipulation of such
treaties that neither party shall be bound to give up its own citizens,
with the added proviso in one of our treaties, that with Japan, that it
may surrender if it see fit. It is held in this country by an almost
uniform course of decisions that where a treaty negatives the obligation
to surrender the President is not invested with legal authority to act.
The conferment of such authority would be in the line of that sound
morality which shrinks from affording secure asylum to the author of a
heinous crime. Again, statutory provision might well be made for what is
styled extradition by way of transit, whereby a fugitive surrendered by
one foreign government to another may be conveyed across the territory
of the United States to the jurisdiction of the demanding state. A
recommendation in this behalf made in the President's message of 1886
was not acted upon. The matter is presented for your consideration.

The problem of the Mexican free zone has been often discussed with
regard to its inconvenience as a provocative of smuggling into the
United States along an extensive and thinly guarded land border. The
effort made by the joint resolution of March 1, 1895, to remedy the
abuse charged by suspending the privilege of free transportation in bond
across the territory of the United States to Mexico failed of good
result, as is stated in Report No. 702 of the House of Representatives,
submitted in the last session, March 11, 1898. As the question is one to
be conveniently met by wise concurrent legislation of the two countries
looking to the protection of the revenues by harmonious measures
operating equally on either side of the boundary, rather than by
conventional arrangements, I suggest that Congress consider the
advisability of authorizing and inviting a conference of representatives
of the Treasury Departments of the United States and Mexico to consider
the subject in all its complex bearings, and make report with pertinent
recommendations to the respective Governments for the information and
consideration of their Congresses.

The Mexican Water Boundary Commission has adjusted all matters submitted
to it to the satisfaction of both Governments save in three important
cases--that of the "Chamizal" at El Paso, Tex., where the two
commissioners failed to agree, and wherein, for this case only, this
Government has proposed to Mexico the addition of a third member; the
proposed elimination of what are known as "Bancos," small isolated
islands formed by the cutting off of bends in the Rio Grande, from the
operation of the treaties of 1884 and 1889, recommended by the
commissioners and approved by this Government, but still under
consideration by Mexico; and the subject of the "Equitable distribution
of the waters of the Rio Grande," for which the commissioners
recommended an international dam and reservoir, approved by Mexico, but
still under consideration by this Government. Pending these questions it
is necessary to extend the life of the commission, which expires
December 23 next.

The coronation of the young Queen of the Netherlands was made the
occasion of fitting congratulations.

The claim of Victor H. McCord against Peru, which for a number of years
has been pressed by this Government and has on several occasions
attracted the attention of the Congress, has been satisfactorily
adjusted. A protocol was signed May 17, 1898, whereby, the fact of
liability being admitted, the question of the amount to be awarded was
submitted to the chief justice of Canada as sole arbitrator. His award
sets the indemnity due the claimant at $40,000.

The Government of Peru has given the prescribed notification of its
intention to abrogate the treaty of friendship, commerce, and navigation
concluded with this country August 31, 1887. As that treaty contains
many important provisions necessary to the maintenance of commerce and
good relations, which could with difficulty be replaced by the
negotiation of renewed provisions within the brief twelve months
intervening before the treaty terminates, I have invited suggestions by
Peru as to the particular provisions it is desired to annul, in the hope
of reaching an arrangement whereby the remaining articles may be
provisionally saved.

His Majesty the Czar having announced his purpose to raise the Imperial
Russian mission at this capital to the rank of an embassy, I responded,
under the authority conferred by the act of March 3, 1893, by
commissioning and accrediting the actual representative at St.
Petersburg in the capacity of ambassador extraordinary and
plenipotentiary. The Russian ambassador to this country has since
presented his credentials.

The proposal of the Czar for a general reduction of the vast military
establishments that weigh so heavily upon many peoples in time of peace
was communicated to this Government with an earnest invitation to be
represented in the conference which it is contemplated to assemble with
a view to discussing the means of accomplishing so desirable a result.
His Majesty was at once informed of the cordial sympathy of this
Government with the principle involved in his exalted proposal and of
the readiness of the United States to take part in the conference. The
active military force of the United States, as measured by our
population, territorial area, and taxable wealth, is, and under any
conceivable prospective conditions must continue to be, in time of peace
so conspicuously less than that of the armed powers to whom the Czar's
appeal is especially addressed that the question can have for us no
practical importance save as marking an auspicious step toward the
betterment of the condition of the modern peoples and the cultivation of
peace and good will among them; but in this view it behooves us as a
nation to lend countenance and aid to the beneficent project.

The claims of owners of American sealing vessels for seizure by Russian
cruisers in Bering Sea are being pressed to a settlement. The equities
of the cases justify the expectation that a measure of reparation will
eventually be accorded in harmony with precedent and in the light of the
proven facts.

The recommendation made in my special message of April 27 last is
renewed, that appropriation be made to reimburse the master and owners
of the Russian bark Hans for wrongful arrest of the master and detention
of the vessel in February, 1896, by officers of the United States
district court for the southern district of Mississippi. The papers
accompanying my said message make out a most meritorious claim and
justify the urgency with which it has been presented by the Government
of Russia.

Malietoa Laupepa, King of Samoa, died on August 22 last. According to
Article I of the general act of Berlin, "his successor shall be duly
elected according to the laws and customs of Samoa."

Arrangements having been agreed upon between the signatories of the
general act for the return of Mataafa and the other exiled Samoan
chiefs, they were brought from Jaluit by a German war vessel and landed
at Apia on September 18 last.

Whether the death of Malietoa and the return of his old-time rival
Mataafa will add to the undesirable complications which the execution of
the tripartite general act has heretofore developed remains to be seen.
The efforts of this Government will, as heretofore, be addressed toward
a harmonious and exact fulfillment of the terms of the international
engagement to which the United States became a party in 1889.

The Cheek claim against Siam, after some five years of controversy, has
been adjusted by arbitration under an agreement signed July 6, 1897, an
award of 706,721 ticals (about $187,987.78 ), with release of the Cheek
estate from mortgage claims, having been rendered March 21, 1898, in
favor of the claimant by the arbitrator, Sir Nicholas John Hannen,
British chief justice for China and Japan.

An envoy from Siam has been accredited to this Government and has
presented his credentials.

Immediately upon the outbreak of the war with Spain the Swiss
Government, fulfilling the high mission it has deservedly assumed as the
patron of the International Red Cross, proposed to the United States and
Spain that they should severally recognize and carry into execution, as
a modus vivendi, during the continuance of hostilities, the additional
articles proposed by the international conference of Geneva, October 20,
1868, extending the effects of the existing Red Cross convention of 1864
to the conduct of naval war. Following the example set by France and
Germany in 1870 in adopting such a modus vivendi, and in view of the
accession of the United States to those additional articles in 1882,
although the exchange of ratifications thereof still remained
uneffected, the Swiss proposal was promptly and cordially accepted by
us, and simultaneously by Spain.

This Government feels a keen satisfaction in having thus been enabled to
testify its adherence to the broadest principles of humanity even amidst
the clash of war, and it is to be hoped that the extension of the Red
Cross compact to hostilities by sea as well as on land may soon become
an accomplished fact through the general promulgation of the additional
naval Red Cross articles by the maritime powers now parties to the
convention of 1864.

The important question of the claim of Switzerland to the perpetual
cantonal allegiance of American citizens of Swiss origin has not made
hopeful progress toward a solution, and controversies in this regard
still continue.

The newly accredited envoy of the United States to the Ottoman Porte
carries instructions looking to the disposal of matters in controversy
with Turkey for a number of years. He is especially charged to press for
a just settlement of our claims for indemnity by reason of the
destruction of the property of American missionaries resident in that
country during the Armenian troubles of 1895, as well as for the
recognition of older claims of equal justness.

He is also instructed to seek an adjustment of the dispute growing out
of the refusal of Turkey to recognize the acquired citizenship of
Ottoman-born persons naturalized in the United States since 1869 without
prior imperial consent, and in the same general relation he is directed
to endeavor to bring about a solution of the question which has more or
less acutely existed since 1869 concerning the jurisdictional rights of
the United States in matters of criminal procedure and punishment under
Article IV of the treaty of 1830. This latter difficulty grows out of a
verbal difference, claimed by Turkey to be essential, between the
original Turkish text and the promulgated translation.

After more than two years from the appointment of a consul of this
country to Erzerum, he has received his exequatur.

The arbitral tribunal appointed under the treaty of February 2, 1897,
between Great Britain and Venezuela, to determine the boundary line
between the latter and the colony of British Guiana, is to convene at
Paris during the present month. It is a source of much gratification to
this Government to see the friendly resort of arbitration applied to the
settlement of this controversy, not alone because of the earnest part we
have had in bringing about the result, but also because the two members
named on behalf of Venezuela, Mr. Chief Justice Fuller and Mr. Justice
Brewer, chosen from our highest court, appropriately testify the
continuing interest we feel in the definitive adjustment of the question
according to the strictest rules of justice. The British members, Lord
Herschell and Sir Richard Collins, are jurists of no less exalted
repute, while the fifth member and president of the tribunal, M. F. De
Martens, has earned a world-wide reputation as an authority upon
international law.

The claim of Felipe Scandella against Venezuela for arbitrary expulsion
and injury to his business has been adjusted by the revocation of the
order of expulsion and by the payment of the sum of $16,000.

I have the satisfaction of being able to state that the Bureau of the
American Republics, created in 1890 as the organ for promoting
commercial intercourse and fraternal relations among the countries of
the Western Hemisphere, has become a more efficient instrument of the
wise purposes of its founders, and is receiving the cordial support of
the contributing members of the international union which are actually
represented in its board of management. A commercial directory, in two
volumes, containing a mass of statistical matter descriptive of the
industrial and commercial interests of the various countries, has been
printed in English, Spanish, Portuguese, and French, and a monthly
bulletin published in these four languages and distributed in the
Latin-American countries as well as in the United States has proved to
be a valuable medium for disseminating information and furthering the
varied interests of the international union.

During the past year the important work of collecting information of
practical benefit to American industries and trade through the agency of
the diplomatic and consular officers has been steadily advanced, and in
order to lay such data before the public with the least delay the
practice was begun in January, 1898, of issuing the commercial reports
from day to day as they are received by the Department of State. It is
believed that for promptitude as well as fullness of information the
service thus supplied to our merchants and manufacturers will be found
to show sensible improvement and to merit the liberal support of
Congress.

The experiences of the last year bring forcibly home to us a sense of
the burdens and the waste of war. We desire, in common with most
civilized nations, to reduce to the lowest possible point the damage
sustained in time of war by peaceable trade and commerce. It is true we
may suffer in such cases less than other communities, but all nations
are damaged more or less by the state of uneasiness and apprehension
into which an outbreak of hostilities throws the entire commercial
world. It should be our object, therefore, to minimize, so far as
practicable, this inevitable loss and disturbance. This purpose can
probably best be accomplished by an international agreement to regard
all private property at sea as exempt from capture or destruction by the
forces of belligerent powers. The United States Government has for many
years advocated this humane and beneficent principle, and is now in
position to recommend it to other powers without the imputation of
selfish motives. I therefore suggest for your consideration that the
Executive be authorized to correspond with the governments of the
principal maritime powers with a view of incorporating into the
permanent law of civilized nations the principle of the exemption of all
private property at sea, not contraband of war, from capture or
destruction by belligerent powers.

The Secretary of the Treasury reports that the receipts of the
Government from all sources during the fiscal year ended June 30, 1898,
including $64,751,223 received from sale of Pacific railroads, amounted
to $405,321,335, and its expenditures to $443,168,582. There was
collected from customs $149,575,062 and from internal revenue
$170,900,641. Our dutiable imports amounted to $324,635,479, a decrease
of $58,156,690 over the preceding year, and importations free of duty
amounted to $291,414,175, a decrease from the preceding year of
$90,524,068. Internal-revenue receipts exceeded those of the preceding
year by $24,212,067.

The total tax collected on distilled spirits was $92,546,999; on
manufactured tobacco, $36,230,522, and on fermented liquors,
$39,515,421. We exported merchandise during the year amounting to
$1,231,482,330, an increase of $180,488,774 from the preceding year.

It is estimated upon the basis of present revenue laws that the receipts
of the Government for the year ending June 30, 1899, will be
$577,874,647, and its expenditures $689,874,647, resulting in a
deficiency of $112,000,000.

On the 1st of December, 1898, there was held in the Treasury gold coin
amounting to $138,441,547, gold bullion amounting to $138,502,545,
silver bullion amounting to $93,359,250, and other forms of money
amounting to $451,963,981.

On the same date the amount of money of all kinds in circulation, or not
included in Treasury holdings, was $1,886,879,504, an increase for the
year of $165,794,966. Estimating our population at 75,194,000 at the
time mentioned, the per capita circulation was $25.09. On the same date
there was in the Treasury gold bullion amounting to $138,502,545.

The provisions made for strengthening the resources of the Treasury in
connection with the war have given increased confidence in the purpose
and power of the Government to maintain the present standard, and have
established more firmly than ever the national credit at home and
abroad. A marked evidence of this is found in the inflow of gold to the
Treasury. Its net gold holdings on November 1, 1898, were $239,885,162
as compared with $153,573,147 on November 1, 1897, and an increase of
net cash of $207,756,100, November 1, 1897, to $300,238,275, November 1,
1898. The present ratio of net Treasury gold to outstanding Government
liabilities, including United States notes, Treasury notes of 1890,
silver certificates, currency certificates, standard silver dollars, and
fractional silver coin, November 1, 1898, was 25.35 per cent, as
compared with 16.96 per cent, November 1, 1897.

I renew so much of my recommendation of December, 1897, as follows: That
when any of the United States notes are presented for redemption in gold
and are redeemed in gold, such notes shall be kept and set apart and
only paid out in exchange for gold. This is an obvious duty. If the
holder of the United States note prefers the gold and gets it from the
Government, he should not receive back from the Government a United
States note without paying gold in exchange for it. The reason for this
is made all the more apparent when the Government issues an
interest-bearing debt to provide gold for the redemption of United
States notes--a non-interest-bearing debt. Surely it should not pay them
out again except on demand and for gold. If they are put out in any
other way, they may return again, to he followed by another bond issue
to redeem them--another interest-bearing debt to redeem a
non-interest-bearing debt. This recommendation was made in the belief
that such provisions of law would insure to a greater degree the safety
of the present standard, and better protect our currency from the
dangers to which it is subjected from a disturbance in the general
business conditions of the country.

In my judgment the present condition of the Treasury amply justifies the
immediate enactment of the legislation recommended one year ago, under
which a portion of the gold holdings should be placed in a trust fund
from which greenbacks should be redeemed upon presentation, but when
once redeemed should not thereafter be paid out except for gold.

It is not to be inferred that other legislation relating to our currency
is not required; on the contrary, there is an obvious demand for it.

The importance of adequate provision which will insure to our future a
money standard related as our money standard now is to that of our
commercial rivals is generally recognized.

The companion proposition that our domestic paper currency shall be kept
safe and yet be so related to the needs of our industries and internal
commerce as to be adequate and responsive to such needs is a proposition
scarcely less important. The subject, in all its parts, is commended to
the wise consideration of the Congress.

The annexation of Hawaii and the changed relations of the United States
to Cuba, Puerto Rico, and the Philippines resulting from the war, compel
the prompt adoption of a maritime policy by the United States. There
should be established regular and frequent steamship communication,
encouraged by the United States, under the American flag, with the newly
acquired islands. Spain furnished to its colonies, at an annual cost of
about $2,000,000, steamship lines communicating with a portion of the
world's markets, as well as with trade centers of the home Government.
The United States will not undertake to do less. It is our duty to
furnish the people of Hawaii with facilities, under national control,
for their export and import trade. It will be conceded that the present
situation calls for legislation which shall be prompt, durable, and
liberal.

The part which American merchant vessels and their seamen performed in
the war with Spain demonstrates that this service, furnishing both
pickets and the second line of defense, is a national necessity, and
should be encouraged in every constitutional way. Details and methods
for the accomplishment of this purpose are discussed in the report of
the Secretary of the Treasury, to which the attention of Congress is
respectfully invited.

In my last annual message I recommended that Congress authorize the
appointment of a commission for the purpose of making systematic
investigations with reference to the cause and prevention of yellow
fever. This matter has acquired an increased importance as a result of
the military occupation of the island of Cuba and the commercial
intercourse between this island and the United States which we have
every reason to expect. The sanitary problems connected with our new
relations with the island of Cuba and the acquisition of Puerto Rico are
no less important than those relating to finance, commerce, and
administration. It is my earnest desire that these problems may be
considered by competent experts and that everything may be done which
the most recent advances in sanitary science can offer for the
protection of the health of our soldiers in those islands and of our
citizens who are exposed to the dangers of infection from the
importation of yellow fever. I therefore renew my recommendation that
the authority of Congress may be given and a suitable appropriation made
to provide for a commission of experts to be appointed for the purpose
indicated.

Under the act of Congress approved April 26, 1898, authorizing the
President in his discretion, "upon a declaration of war by Congress, or
a declaration by Congress that war exists," I directed the increase of
the Regular Army to the maximum of 62,000, authorized in said act.

There are now in the Regular Army 57,862 officers and men. In said act
it was provided--

That at the end of any war in which the United States may become
involved the Army shall be reduced to a peace basis by the transfer in
the same arm of the service or absorption by promotion or honorable
discharge, under such regulations as the Secretary of War may establish,
of supernumerary commissioned officers and the honorable discharge or
transfer of supernumerary enlisted men; and nothing contained in this
act shall be construed as authorizing the permanent increase of the
commissioned or enlisted force of the Regular Army beyond that now
provided by the law in force prior to the passage of this act, except as
to the increase of twenty-five majors provided for in section 1 hereof.
The importance of legislation for the permanent increase of the Army is
therefore manifest, and the recommendation of the Secretary of War for
that purpose has my unqualified approval. There can be no question that
at this time, and probably for some time in the future, 100,000 men will
be none too many to meet the necessities of the situation. At all
events, whether that number shall be required permanently or not, the
power should be given to the President to enlist that force if in his
discretion it should be necessary; and the further discretion should be
given him to recruit for the Army within the above limit from the
inhabitants of the islands with the government of which we are charged.
It is my purpose to muster out the entire Volunteer Army as soon as the
Congress shall provide for the increase of the regular establishment.
This will be only an act of justice and will be much appreciated by the
brave men who left their homes and employments to help the country in
its emergency.

In my last annual message I stated: The Union Pacific Railway, main
line, was sold under the decree of the United States court for the
district of Nebraska on the 1st and 2d of November of this year. The
amount due the Government consisted of the principal of the subsidy
bonds, $27,236,512, and the accrued interest thereon, $31,211,711.75,
making the total indebtedness $58,448,223.75. The bid at the sale
covered the first-mortgage lien and the entire mortgage claim of the
Government, principal and interest. This left the Kansas Pacific case
unconcluded. By a decree of the court in that case an upset price for
the property was fixed at a sum which would yield to the Government only
$2,500,000 upon its lien. The sale, at the instance of the Government,
was postponed first to December 15, 1897, and later, upon the
application of the United States, was postponed to the 16th day of
February, 1898.

Having satisfied myself that the interests of the Government required
that an effort should be made to obtain a larger sum, I directed the
Secretary of the Treasury, under the act passed March 3, 1887, to pay
out of the Treasury to the persons entitled to receive the same the
amounts due upon all prior mortgages upon the Eastern and Middle
divisions of said railroad out of any money in the Treasury not
otherwise appropriated, whereupon the Attorney-General prepared a
petition to be presented to the court, offering to redeem said prior
liens in such manner as the court might direct, and praying that
thereupon the United States might be held to be subrogated to all the
rights of said prior lien holders and that a receiver might be appointed
to take possession of the mortgaged premises and maintain and operate
the same until the court or Congress otherwise directed. Thereupon the
reorganization committee agreed that if said petition was withdrawn and
the sale allowed to proceed on the 16th of February, 1898, they would
bid a sum at the sale which would realize to the Government the entire
principal of its debt, $6,303,000.

Believing that no better price could be obtained and appreciating the
difficulties under which the Government would labor if it should become
the purchaser of the road at the sale, in the absence of any authority
by Congress to take charge of and operate the road I directed that upon
the guaranty of a minimum bid which should give the Government the
principal of its debt the sale should proceed. By this transaction the
Government secured an advance of $3,803,000 over and above the sum which
the court had fixed as the upset price, and which the reorganization
committee had declared was the maximum which they would pay for the
property.

It is a gratifying fact that the result of these proceedings against the
Union Pacific system and the Kansas Pacific line is that the Government
has received on account of its subsidy claim the sum of $64,751,223.75,
an increase of $18,997,163.76 over the sum which the reorganization
committee originally agreed to bid for the joint property, the
Government receiving its whole claim, principal and interest, on the
Union Pacific, and the principal of its debt on the Kansas Pacific
Railroad.

Steps had been taken to foreclose the Government's lien upon the Central
Pacific Railroad Company, but before action was commenced Congress
passed an act, approved July 7, 1898, creating a commission consisting
of the Secretary of the Treasury, the Attorney-General, and the
Secretary of the Interior, and their successors in office, with full
power to settle the indebtedness to the Government growing out of the
issue of bonds in aid of the construction of the Central Pacific and
Western Pacific bond-aided railroads, subject to the approval of the
President.

No report has yet been made to me by the commission thus created.
Whatever action is had looking to a settlement of the indebtedness in
accordance with the act referred to will be duly submitted to the
Congress.

I deem it my duty to call to the attention of Congress the condition of
the present building occupied by the Department of Justice. The business
of that Department has increased very greatly since it was established
in its present quarters. The building now occupied by it is neither
large enough nor of suitable arrangement for the proper accommodation of
the business of the Department. The Supervising Architect has pronounced
it unsafe and unsuited for the use to which it is put. The
Attorney-General in his report states that the library of the Department
is upon the fourth floor, and that all the space allotted to it is so
crowded with books as to dangerously overload the structure. The first
floor is occupied by the Court of Claims. The building is of an old and
dilapidated appearance, unsuited to the dignity which should attach to
this important Department.

A proper regard for the safety, comfort, and convenience of the officers
and employees would justify the expenditure of a liberal sum of money in
the erection of a new building of commodious proportions and handsome
appearance upon the very advantageous site already secured for that
purpose, including the ground occupied by the present structure and
adjoining vacant lot, comprising in all a frontage of 201 feet on
Pennsylvania avenue and a depth of 136 feet.

In this connection I may likewise refer to the inadequate accommodations
provided for the Supreme Court in the Capitol, and suggest the wisdom of
making provision for the erection of a separate building for the court
and its officers and library upon available ground near the Capitol.

The postal service of the country advances with extraordinary growth.
Within twenty years both the revenues and the expenditures of the
Post-Office Department have multiplied threefold. In the last ten years
they have nearly doubled. Our postal business grows much more rapidly
than our population. It now involves an expenditure of $100,000,000 a
year, numbers 73,000 post-offices, and enrolls 200,000 employees. This
remarkable extension of a service which is an accurate index of the
public conditions presents gratifying evidence of the advancement of
education, of the increase of communication and business activity, and
of the improvement of mail facilities leading to their constantly
augmenting use.

The war with Spain laid new and exceptional labors on the Post-Office
Department. The mustering of the military and naval forces of the United
States required special mail arrangements for every camp and every
campaign. The communication between home and camp was naturally eager
and expectant. In some of the larger places of rendezvous as many as
50,000 letters a day required handling. This necessity was met by the
prompt detail and dispatch of experienced men from the established force
and by directing all the instrumentalities of the railway mail and
post-office service, so far as necessary, to this new need. Congress
passed an act empowering the postmaster-General to establish offices or
branches at every military camp or station, and under this authority the
postal machinery was speedily put into effective operation.

Under the same authority, when our forces moved upon Cuba, Puerto Rico,
and the Philippines they were attended and followed by the postal
service. Though the act of Congress authorized the appointment of
postmasters where necessary, it was early determined that the public
interests would best be subserved, not by new designations, but by the
detail of experienced men familiar with every branch of the service, and
this policy was steadily followed. When the territory which was the
theater of conflict came into our possession, it became necessary to
reestablish mail facilities for the resident population as well as to
provide them for our forces of occupation, and the former requirement
was met through the extension and application of the latter obligation.
I gave the requisite authority, and the same general principle was
applied to this as to other branches of civil administration under
military occupation. The details are more particularly given in the
report of the postmaster-General, and, while the work is only just
begun, it is pleasing to be able to say that the service in the
territory which has come under our control is already materially
improved.

The following recommendations of the Secretary of the Navy relative to
the increase of the Navy have my earnest approval:

1. Three seagoing sheathed and coppered battle ships of about 13,500
tons trial displacement, carrying the heaviest armor and most powerful
ordnance for vessels of their class, and to have the highest practicable
speed and great radius of action. Estimated cost, exclusive of armor and
armament, $3,600,000 each.

2. Three sheathed and coppered armored cruisers of about 12,000 tons
trial displacement, carrying the heaviest armor and most powerful
ordnance for vessels of their class, and to have the highest practicable
speed and great radius of action. Estimated cost, exclusive of armor and
armament, $4,000,000 each.

3. Three sheathed and coppered protected cruisers of about 6,000 tons
trial displacement, to have the highest practicable speed and great
radius of action, and to carry the most powerful ordnance suitable for
vessels of their class. Estimated cost, exclusive of armor and armament,
$2,150,000 each.

4. Six sheathed and coppered cruisers of about 2,500 tons trial
displacement, to have the highest speed compatible with good cruising
qualities, great radius of action, and to carry the most powerful
ordnance suited to vessels of their class. Estimated cost, exclusive of
armament, $1,141,800 each.

I join with the Secretary of the Navy in recommending that grades of
admiral and vice-admiral be temporarily revived, to be filled by
officers who have specially distinguished themselves in the war with
Spain.

I earnestly urge upon Congress the importance of early legislation
providing for the taking of the Twelfth Census. This is necessary in
view of the large amount of work which must be performed in the
preparation of the schedules preparatory to the enumeration of the
population.

There were on the pension rolls on June 30, 1898, 993,714 names, an
increase of nearly 18,000 over the number on the rolls on the same day
of the preceding year. The amount appropriated by the act of December
22, 1896, for the payment of pensions for the fiscal year of 1898 was
$140,000,000. Eight million seventy thousand eight hundred and
seventy-two dollars and forty-six cents was appropriated by the act of
March 31, 1898, to cover deficiencies in army pensions, and repayments
in the sum of $12,020.33, making a total of $148,082,892.79 available
for the payment of pensions during the fiscal year 1898. The amount
disbursed from that sum was $144,651,879.80, leaving a balance of
$3,431,012.99 unexpended on the 30th of June, 1898, which was covered
into the Treasury. There were 389 names added to the rolls during the
year by special acts passed at the second session of the Fifty-fifth
Congress, making a total of 6,486 pensioners by Congressional enactments
since 1861.

The total receipts of the Patent Office during the past year were
$1,253,948.44. The expenditures were $1,081,633.79, leaving a surplus of
$172,314.65.

The public lands disposed of by the Government during the year reached
8,453,896.92 acres, an increase of 614,780.26 acres over the previous
year. The total receipts from public lands during the fiscal year
amounted to $2,277,995.18, an increase of $190,063.90 over the preceding
year. The lands embraced in the eleven forest reservations which were
suspended by the act of June 4, 1897, again became subject to the
operations of the proclamations of February 22, 1897, creating them,
which added an estimated amount of 19,951,360 acres to the area embraced
in the reserves previously created. In addition thereto two new reserves
were created during the year--the Pine Mountain and Zaca Lake Reserve,
in California, embracing 1,644,594 acres, and the Prescott Reserve, in
Arizona, embracing 10,240 acres--while the Pecos River Reserve, in New
Mexico, has been changed and enlarged to include 120,000 additional
acres.

At the close of the year thirty forest reservations, not including those
of the Afognak Forest and the Fish-Culture Reserve, in Alaska, had been
created by Executive proclamations under section 24 of the act of March
3, 1891, embracing an estimated area of 40,719,474 acres.

The Department of the Interior has inaugurated a forest system, made
possible by the act of July, 1898, for a graded force of officers in
control of the reserves. This system has only been in full operation
since August, but good results have already been secured in many
sections. The reports received indicate that the system of patrol has
not only prevented destructive fires from gaining headway, but has
diminished the number of fires.

The special attention of the Congress is called to that part of the
report of the Secretary of the Interior in relation to the Five
Civilized Tribes. It is noteworthy that the general condition of the
Indians shows marked progress. But one outbreak of a serious character
occurred during the year, and that among the Chippewa Indians of
Minnesota, which happily has been suppressed.

While it has not yet been practicable to enforce all the provisions of
the act of June 28, 1898, "for the protection of the people of the
Indian Territory, and for other purposes," it is having a salutary
effect upon the nations composing the five tribes. The Dawes Commission
reports that the most gratifying results and greater advance toward the
attainment of the objects of the Government have been secured in the
past year than in any previous year. I can not too strongly indorse the
recommendation of the commission and of the Secretary of the Interior
for the necessity of providing for the education of the 30,000 white
children resident in the Indian Territory.

The Department of Agriculture has been active in the past year.
Explorers have been sent to many of the countries of the Eastern and
Western hemispheres for seeds and plants that may be useful to the
United States, and with the further view of opening up markets for our
surplus products. The Forestry Division of the Department is giving
special attention to the treeless regions of our country and is
introducing species specially adapted to semiarid regions. Forest fires,
which seriously interfere with production, especially in irrigated
regions, are being studied, that losses from this cause may be avoided.
The Department is inquiring into the use and abuse of water in many
States of the West, and collating information regarding the laws of the
States, the decisions of the courts, and the customs of the people in
this regard, so that uniformity may be secured. Experiment stations are
becoming more effective every year. The annual appropriation of $720,000
by Congress is supplemented by $400,000 from the States. Nation-wide
experiments have been conducted to ascertain the suitableness as to soil
and climate and States for growing sugar beets. The number of sugar
factories has been doubled in the past two years, and the ability of the
United States to produce its own sugar from this source has been clearly
demonstrated.

The Weather Bureau forecast and observation stations have been extended
around the Caribbean Sea, to give early warning of the approach of
hurricanes from the south seas to our fleets and merchant marine.

In the year 1900 will occur the centennial anniversary of the founding
of the city of Washington for the permanent capital of the Government of
the United States by authority of an act of Congress approved July 16,
1790. In May, 1800, the archives and general offices of the Federal
Government were removed to this place. On the 17th of November, 1800,
the National Congress met here for the first time and assumed exclusive
control of the Federal district and city. This interesting event assumes
all the more significance when we recall the circumstances attending the
choosing of the site, the naming of the capital in honor of the Father
of his Country, and the interest taken by him in the adoption of plans
for its future development on a magnificent scale.

These original plans have been wrought out with a constant progress and
a signal success even beyond anything their framers could have foreseen.
The people of the country are justly proud of the distinctive beauty and
government of the capital and of the rare instruments of science and
education which here find their natural home.

A movement lately inaugurated by the citizens to have the anniversary
celebrated with fitting ceremonies, including, perhaps, the
establishment of a handsome permanent memorial to mark so historical an
occasion and to give it more than local recognition, has met with
general favor on the part of the public.

I recommend to the Congress the granting of an appropriation for this
purpose and the appointment of a committee from its respective bodies.
It might also be advisable to authorize the President to appoint a
committee from the country at large, which, acting with the
Congressional and District of Columbia committees, can complete the
plans for an appropriate national celebration.

The alien contract law is shown by experience to need some amendment; a
measure providing better protection for seamen is proposed; the rightful
application of the eight-hour law for the benefit of labor and of the
principle of arbitration are suggested for consideration; and I commend
these subjects to the careful attention of the Congress.

The several departmental reports will be laid before you. They give in
great detail the conduct of the affairs of the Government during the
past year and discuss many questions upon which the Congress may feel
called upon to act.

***

State of the Union Address
William McKinley
December 5, 1899

To the Senate and House of Representatives:

At the threshold of your deliberations you are called to mourn with your
countrymen the death of Vice-President Hobart, who passed from this life
on the morning of November 21 last. His great soul now rests in eternal
peace. His private life was pure and elevated, while his public career
was ever distinguished by large capacity, stainless integrity, and
exalted motives. He has been removed from the high office which he
honored and dignified, but his lofty character, his devotion to duty,
his honesty of purpose, and noble virtues remain with us as a priceless
legacy and example.

The Fifty-sixth Congress convenes in its first regular session with the
country in a condition of unusual prosperity, of universal good will
among the people at home, and in relations of peace and friendship with
every government of the world. Our foreign commerce has shown great
increase in volume and value. The combined imports and exports for the
year are the largest ever shown by a single year in all our history. Our
exports for 1899 alone exceeded by more than a billion dollars our
imports and exports combined in 1870. The imports per capita are 20 per
cent less than in 1870, while the exports per capita are 58 per cent
more than in 1870, showing the enlarged capacity of the United States to
satisfy the wants of its own increasing population, as well as to
contribute to those of the peoples of other nations.

Exports of agricultural products were $784,776,142. Of manufactured
products we exported in value $339,592,146, being larger than any
previous year. It is a noteworthy fact that the only years in all our
history when the products of our manufactories sold abroad exceeded
those bought abroad were 1898 and 1899.

Government receipts from all sources for the fiscal year ended June 30,
1899, including $11,798,314,14, part payment of the Central Pacific
Railroad indebtedness, aggregated $610,982,004.35. Customs receipts were
$206,128,481.75, and those from internal revenue $273,437,161.51.

For the fiscal year the expenditures were $700,093,564.02, leaving a
deficit of $89,111,559.67.

The Secretary of the Treasury estimates that the receipts for the
current fiscal year will aggregate $640,958,112, and upon the basis of
present appropriations the expenditures will aggregate $600,958,112,
leaving a surplus of $40,000,000.

For the fiscal year ended June 30, 1899, the internal-revenue receipts
were increased about $100,000,000.

The present gratifying strength of the Treasury is shown by the fact
that on December 1, 1899, the available cash balance was
$278,004,837.72, Of which $239,744,905.36 was in gold coin and bullion.
The conditions of confidence which prevail throughout the country have
brought gold into more general use and customs receipts are now almost
entirely paid in that coin.

The strong position of the Treasury with respect to cash on hand and the
favorable showing made by the revenues have made it possible for the
Secretary of the Treasury to take action under the provisions of section
3694, Revised Statutes, relating to the sinking fund. Receipts exceeded
expenditures for the first five months of the current fiscal year by
$13,413,389.91, and, as mentioned above, the Secretary of the Treasury
estimates that there will be a surplus of approximately $40,000,000 at
the end of the year. Under such conditions it was deemed advisable and
proper to resume compliance with the provisions of the sinking-fund law,
which for eight years has not been done because of deficiencies in the
revenues. The Treasury Department therefore offered to purchase during
November $25,000,000 of the 5 per cent loan of 1904, or the 4 per cent
funded loan of 1907, at the current market price. The amount offered and
purchased during November was $18,408,600. The premium paid by the
Government on such purchases was $2,263,521 and the net saving in
interest was about $2,885,000. The success of this operation was
sufficient to induce the Government to continue the offer to purchase
bonds to and including the 23d day of December, instant, unless the
remainder of the $25,000,000 called for should be presented in the
meantime for redemption.

Increased activity in industry, with its welcome attendant--a larger
employment for labor at higher wages--gives to the body of the people a
larger power to absorb the circulating medium. It is further true that
year by year, with larger areas of land under cultivation, the
increasing volume of agricultural products, cotton, corn, and wheat,
calls for a larger volume of money supply. This is especially noticeable
at the crop-harvesting and crop-moving period.

In its earlier history the National Banking Act seemed to prove a
reasonable avenue through which needful additions to the circulation
could from time to time be made. Changing conditions have apparently
rendered it now inoperative to that end. The high margin in bond
securities required, resulting from large premiums which Government
bonds command in the market, or the tax on note issues, or both
operating together, appear to be the influences which impair its public
utility.

The attention of Congress is respectfully invited to this important
matter, with the view of ascertaining whether or not such reasonable
modifications can be made in the National Banking Act as will render its
service in the particulars here referred to more responsive to the
people's needs. I again urge that national banks be authorized to
organize with a capital of $25,000.

I urgently recommend that to support the existing gold standard, and to
maintain "the parity in value of the coins of the two metals (gold and
silver) and the equal power of every dollar at all times in the market
and in the payment of debts," the Secretary of the Treasury be given
additional power and charged with the duty to sell United States bonds
and to employ such other effective means as may be necessary to these
ends. The authority should include the power to sell bonds on long and
short time, as conditions may require, and should provide for a rate of
interest lower than that fixed by the act of January 14, 1875. While
there is now no commercial fright which withdraws gold from the
Government, but, on the contrary, such widespread confidence that gold
seeks the Treasury demanding paper money in exchange, yet the very
situation points to the present as the most fitting time to make
adequate provision to insure the continuance of the gold standard and of
public confidence in the ability and purpose of the Government to meet
all its obligations in the money which the civilized world recognizes as
the best. The financial transactions of the Government are conducted
upon a gold basis. We receive gold when we sell United States bonds and
use gold for their payment. We are maintaining the parity of all the
money issued or coined by authority of the Government. We are doing
these things with the means at hand. Happily at the present time we are
not compelled to resort to loans to supply gold. It has been done in the
past, however, and may have to be done in the future. It behooves us,
therefore, to provide at once the best means to meet the emergency when
it arises, and the best means are those which are the most certain and
economical. Those now authorized have the virtue neither of directness
nor economy. We have already eliminated one of the causes of our
financial plight and embarrassment during the years 1893, 1894, 1895,
and 1896. Our receipts now equal our expenditures; deficient revenues no
longer create alarm Let us remove the only remaining cause by conferring
the full and necessary power on the Secretary of the Treasury and impose
upon him the duty to uphold the present gold standard and preserve the
coins of the two metals on a parity with each other, which is the
repeatedly declared policy of the United States.

In this connection I repeat my former recommendations that a portion of
the gold holdings shall be placed in a trust fund from which greenbacks
shall be redeemed upon presentation, but when once redeemed shall not
thereafter be paid out except for gold.

The value of an American merchant marine to the extension of our
commercial trade and the strengthening of our power upon the sea invites
the immediate action of the Congress. Our national development will be
one-sided and unsatisfactory so long as the remarkable growth of our
inland industries remains unaccompanied by progress on the seas. There
is no lack of constitutional authority for legislation which shall give
to the country maritime strength commensurate with its industrial
achievements and with its rank among the nations of the earth,

The past year has recorded exceptional activity in our shipyards, and
the promises of continual prosperity in shipbuilding are abundant.
Advanced legislation for the protection of our seamen has been enacted.
Our coast trade, under regulations wisely framed at the beginning of the
Government and since, shows results for the past fiscal year unequaled
in our records or those of any other power. We shall fail to realize our
opportunities, however, if we complacently regard only matters at home
and blind ourselves to the necessity of securing our share in the
valuable carrying trade of the world.

Last year American vessels transported a smaller share of our exports
and imports than during any former year in all our history, and the
measure of our dependence upon foreign shipping was painfully manifested
to our people. Without any choice of our own, but from necessity, the
Departments of the Government charged with military and naval operations
in the East and West Indies had to obtain from foreign flags merchant
vessels essential for those operations.

The other great nations have not hesitated to adopt the required means
to develop their shipping as a factor in national defense and as one of
the surest and speediest means of obtaining for their producers a share
in foreign markets. Like vigilance and effort on our part cannot fail to
improve our situation, which is regarded with humiliation at home and
with surprise abroad. Even the seeming sacrifices, which at the
beginning may be involved, will be offset later by more than equivalent
gains.

The expense is as nothing compared to the advantage to be achieved. The
reestablishment of our merchant marine involves in a large measure our
continued industrial progress and the extension of our commercial
triumphs. I am satisfied the judgment of the country favors the policy
of aid to our merchant marine, which will broaden our commerce and
markets and upbuild our sea-carrying capacity for the products of
agriculture and manufacture; which, with the increase of our Navy, mean
more work and wages to our countrymen, as well as a safeguard to
American interests in every part of the world.

Combinations of capital organized into trusts to control the conditions
of trade among our citizens, to stifle competition, limit production,
and determine the prices of products used and consumed by the people,
are justly provoking public discussion, and should early claim the
attention of the Congress.

The Industrial Commission, created by the act of the Congress of June
18, 1898, has been engaged in extended hearings upon the disputed
questions involved in the subject of combinations in restraint of trade
and competition. They have not yet completed their investigation of this
subject, and the conclusions and recommendations at which they may
arrive are undetermined.

The subject is one giving rise to many divergent views as to the nature
and variety or cause and extent of the injuries to the public which may
result from large combinations concentrating more or less numerous
enterprises and establishments, which previously to the formation of the
combination were carried on separately.

It is universally conceded that combinations which engross or control
the market of any particular kind of merchandise or commodity necessary
to the general community, by suppressing natural and ordinary
competition, whereby prices are unduly enhanced to the general consumer,
are obnoxious not only to the common law but also to the public welfare.
There must be a remedy for the evils involved in such organizations. If
the present law can be extended more certainly to control or check these
monopolies or trusts, it should be done without delay. Whatever power
the Congress possesses over this most important subject should be
promptly ascertained and asserted.

President Harrison in his annual message of December 3, 1889, says:
Earnest attention should be given by Congress to a consideration of the
question how far the restraint of those combinations of capital commonly
called "trusts" is matter of Federal jurisdiction. When organized, as
they often are, to crush out all healthy competition and to monopolize
the production or sale of an article of commerce and general necessity
they are dangerous conspiracies against the public good, and should be
made the subject of prohibitory and even penal legislation. An act to
protect trade and commerce against unlawful restraints and monopolies
was passed by Congress on the 2d of July, 1890. The provisions of this
statute are comprehensive and stringent. It declares every contract or
combination, in the form of a trust or otherwise, or conspiracy in the
restraint of trade or commerce among the several States or with foreign
nations, to be unlawful. It denominates as a criminal every person who
makes any such contract or engages in any such combination or
conspiracy, and provides a punishment by fine or imprisonment. It
invests the several circuit courts of the United States with
jurisdiction to prevent and restrain violations of the act, and makes it
the duty of the several United States district attorneys, under the
direction of the Attorney General, to institute proceedings in equity to
prevent and restrain such violations. It further confers upon any person
who shall be injured in his business or property by any other person or
corporation by reason of anything forbidden or declared to be unlawful
by the act, the power to sue therefore in any circuit court of the
United States without respect to the amount in controversy, and to
recover threefold the damages by him sustained and the costs of the
suit, including reasonable attorney fees. It will be perceived that the
act is aimed at every kind of combination in the nature of a trust or
monopoly in restraint of interstate or international commerce.

The prosecution by the United States of offenses under the act of 1890
has been frequently resorted to in the Federal courts, and notable
efforts in the restraint of interstate commerce, such as the
Trans-Missouri Freight Association and the joint Traffic Association,
have been successfully opposed and suppressed.

President Cleveland in his annual message of December 7, 1896--more than
six years subsequent to the enactment of this law--after stating the
evils of these trust combinations, says: Though Congress has attempted
to deal with this matter by legislation, the laws passed for that
purpose thus far have proved ineffective, not because of any lack of
disposition or attempt to enforce them, but simply because the laws
themselves as interpreted by the courts do not reach the difficulty. If
the insufficiencies of existing laws can be remedied by further
legislation, it should be done. The fact must be recognized, however,
that all Federal legislation on this subject may fall short of its
purpose because of inherent obstacles, and also because of the complex
character of our governmental system, which, while making the Federal
authority supreme within its sphere, has carefully limited that sphere
by metes and bounds which cannot be transgressed. The decision of our
highest court on this precise question renders it quite doubtful whether
the evils of trusts and monopolies may be adequately treated through
Federal action, unless they seek directly and purposely to include in
their objects transportation or intercourse between States or between
the United States and foreign countries. It does not follow, however,
that this is the limit of the remedy that may be applied. Even though it
may be found that Federal authority is not broad enough to fully reach
the case, there can be no doubt of the power of the several States to
act effectively in the premises, and there should be no reason to doubt
their willingness to judiciously exercise such power. The State
legislation to which President Cleveland looked for relief from the
evils of trusts has failed to accomplish fully that object. This is
probably due to a great extent to the fact that different States take
different views as to the proper way to discriminate between evil and
injurious combinations and those associations which are beneficial and
necessary to the business prosperity of the country. The great diversity
of treatment in different States arising from this cause and the
intimate relations of all parts of the country to each other without
regarding State lines in the conduct of business have made the
enforcement of State laws difficult.

It is apparent that uniformity of legislation upon this subject in the
several States is much to be desired. It is to be hoped that such
uniformity founded in a wise and just discrimination between what is
injurious and what is useful and necessary in business operations may be
obtained and that means may be found for the Congress within the
limitations of its constitutional power so to supplement an effective
code of State legislation as to make a complete system of laws
throughout the United States adequate to compel a general observance of
the salutary rules to which I have referred.

The whole question is so important and far-reaching that I am sure no
part of it will be lightly considered, but every phase of it will have
the studied deliberation of the Congress, resulting in wise and
judicious action.

A review of our relations with foreign States is presented with such
recommendations as are deemed appropriate.

The long-pending boundary dispute between the Argentine Republic and
Chile was settled in March last by the award of an arbitral commission,
on which the United States minister at Buenos Ayres served as umpire.

Progress has been made toward the conclusion of a convention of
extradition with the Argentine Republic. Having been advised and
consented to by the United States Senate and ratified by Argentina, it
only awaits the adjustment of some slight changes in the text before
exchange.

In my last annual message I adverted to the claim of the
Austro-Hungarian Government for indemnity for the killing of certain
Austrian and Hungarian subjects by the authorities of the State of
Pennsylvania, at Lattimer, while suppressing an unlawful tumult of
miners, September 10, 1897. In view of the verdict of acquittal rendered
by the court before which the sheriff and his deputies were tried for
murder, and following the established doctrine that the Government may
not be held accountable for injuries suffered by individuals at the
hands of the public authorities while acting in the line of duty in
suppressing disturbance of the public peace, this Government, after due
consideration of the claim advanced by the Austro-Hungarian Government,
was constrained to decline liability to indemnify the sufferers.

It is gratifying to be able to announce that the Belgian Government has
mitigated the restrictions on the importation of cattle from the United
States, to which I referred in my last annual message.

Having been invited by Belgium to participate in a congress, held at
Brussels, to revise the provisions of the general act Of July 2, 1890,
for the repression of the African slave trade, to which the United
States was a signatory party, this Government preferred not to be
represented by a plenipotentiary, but reserved the right of accession to
the result. Notable changes were made, those especially concerning this
country being in the line of the increased restriction of the
deleterious trade in spirituous liquors with the native tribes, which
this Government has from the outset urgently advocated. The amended
general act will be laid before the Senate, with a view to its advice
and consent.

Early in the year the peace of Bolivia was disturbed by a successful
insurrection. The United States minister remained at his post, attending
to the American interests in that quarter, and using besides his good
offices for the protection of the interests of British subjects in the
absence of their national representative. On the establishment of the
new Government, our minister was directed to enter into relations
therewith.

General Pando was elected President of Bolivia on October 23.

Our representative has been instructed to use all permissible friendly
endeavors to induce the Government of Bolivia to amend its marriage laws
so as to give legal status to the non-Catholic and civil marriages of
aliens within its jurisdiction, and strong hopes are entertained that
the Bolivian law in this regard will be brought, as was that of Peru
some years ago, into harmony with the general practice of modern States.

A convention of extradition with Brazil, signed May 14, 1897, has been
ratified by the Brazilian Legislature.

During the past summer two national ships of the United States have
visited Brazilian ports on a friendly mission and been cordially
received. The voyage of the Wilmington up the Amazon River gave rise to
a passing misunderstanding, owing to confusion in obtaining permission
to visit the interior and make surveys in the general interest of
navigation, but the incident found a ready adjustment in harmony with
the close relations of amity which this Government has always sedulously
sought to cultivate with the commonwealths of the Western Continent.

The claim growing out of the seizure of the American-owned newspaper
"The Panama Star and Herald" by the authorities of Colombia has been
settled, after a controversy of several years, by an agreement assessing
at $30,000 the indemnity to be paid by the Colombian Government, in
three installments of $10,000 each.

The good will of Colombia toward our country has been testified anew by
the cordial extension of facilities to the Nicaraguan Canal Commission
in their approaching investigation of the Panama Canal and other
projected routes across the Isthmus of Darien.

Toward the end of October an insurrectionary disturbance developed in
the Colombian Republic. This movement has thus far not attained any
decisive result and is still in progress.

Discussion of the questions raised by the action of Denmark in imposing
restrictions on the importation of American meats has continued without
substantial result in our favor.

The neighboring island Republic of Santo Domingo has lately been the
scene of revolution, following a long period of tranquility. It began
with the killing of President Heureaux in July last, and culminated in
the relinquishment by the succeeding Vice-President of the reins of
government to the insurgents. The first act of the provisional
government was the calling of a presidential and constituent election.
Juan Isidro Jimenez, having been elected President, was inaugurated on
the 14th of November. Relations have been entered into with the newly
established Government.

The experimental association of Nicaragua, Honduras, and Salvador,
tinder the title of the Greater Republic of Central America, when
apparently on the threshold of a complete federal organization by the
adoption of a constitution and the formation of a national legislature,
was disrupted in the last days of November, 1898, by the withdrawal of
Salvador. Thereupon Nicaragua and Honduras abandoned the joint compact,
each resuming its former independent sovereignty. This was followed by
the reception of Minister Merry by the Republics of Nicaragua and
Salvador, while Minister Hunter in turn presented his credentials to the
Government of Honduras, thus reverting to the old distribution of the
diplomatic agencies of the United States in Central America for which
our existing statutes provide. A Nicaraguan envoy has been accredited to
the United States.

An insurrectionary movement, under General Reyes, broke out at
Bluefields in February last, and for a time exercised actual control in
the Mosquito Territory. The Detroit was promptly sent thither for the
protection of American interests. After a few weeks the Reyes government
renounced the conflict, giving place to the restored supremacy of
Nicaragua. During the interregnum certain public dues accruing under
Nicaraguan law were collected from American merchants by the authorities
for the time being in effective administrative control. Upon the titular
government regaining power, a second payment of these dues was demanded.
Controversy arose touching the validity of the original payment of the
debt to the de facto regent of the territory. An arrangement was
effected in April last by the United States minister and the foreign
secretary of Nicaragua whereby the amounts of the duplicate payments
were deposited with the British consul pending an adjustment of the
matter by direct agreement between the Governments of the United States
and Nicaragua. The controversy is still unsettled.

The contract of the Maritime Canal Company of Nicaragua was declared
forfeited by the Nicaraguan Government on the Tenth of October, on the
ground of nonfulfillment within the ten years' term stipulated in the
contract. The Maritime Canal Company has lodged a protest against this
action, alleging rights in the premises which appear worthy of
consideration. This Government expects that Nicaragua will afford the
protestants a full and fair hearing upon the merits of the case.

The Nicaragua Canal Commission, which had been engaged upon the work of
examination and survey for a ship-canal route across Nicaragua, having
completed its labors and made its report, was dissolved on May P, and on
June To a new commission, known as the Isthmian Canal Commission, was
organized under the terms of the act approved March 3, 1899, for the
purpose of examining the American Isthmus with a view to determining the
most practicable and feasible route for a ship canal across that
Isthmus, with its probable cost, and other essential details.

This Commission, under the presidency of Rear-Admiral John G. Walker, U.
S. N. (retired), entered promptly upon the work intrusted to it, and is
now carrying on examinations in Nicaragua along the route of the Panama
Canal, and in Darien from the Atlantic, in the neighborhood of the
Atrato River, to the Bay of Panama, on the Pacific side. Good progress
has been made, but under the law a comprehensive and complete
investigation is called for, which will require much labor and
considerable time for its accomplishment. The work will be prosecuted as
expeditiously as possible and a report made at the earliest practicable
date.

The great importance of this work cannot be too often or too strongly
pressed upon the attention of the Congress. In my message of a year ago
I expressed my views of the necessity of a canal which would link the
two great oceans, to which I again invite your consideration. The
reasons then presented for early action are even stronger now.

A pleasing incident in the relations of this Government with that of
Chile occurred in the generous assistance given to the war ship Newark
when in distress in Chilean waters. Not alone in this way has the
friendly disposition of Chile found expression. That country has acceded
to the convention for the establishment of the Bureau of the American
Republics, in which organization every independent State of the
continent now shares.

The exchange of ratifications of a convention for the revival of the
United States and Chilean Claims Commission and for the adjudication of
claims heretofore presented but not determined during the life of the
previous Commission has been delayed by reason of the necessity for
fresh action by the Chilean Senate upon the amendments attached to the
ratification of the treaty by the United States Senate. This formality
is soon to be accomplished.

In view of disturbances in the populous provinces of northern China,
where are many of our citizens, and of the imminence of disorder near
the capital and toward the seaboard, a guard of marines was landed from
the Boston and stationed during last winter in the legation compound at
Peking. With the restoration of order this protection was withdrawn.

The interests of our citizens in that vast Empire have not been
neglected during the past year. Adequate protection has been secured for
our missionaries and some injuries to their property have been
redressed.

American capital has sought and found various opportunities of competing
to carry out the internal improvements which the Imperial Government is
wisely encouraging, and to develop the natural resources of the Empire.
Our trade with China has continued to grow, and our commercial rights
under existing treaties have been everywhere maintained during the past
year, as they will be in the future.

The extension of the area open to international foreign settlement at
Shanghai and the opening of the ports of Nanking, Tsing-tao (Kiao chao),
and Ta-lien-wan to foreign trade and settlement will doubtless afford
American enterprise additional facilities and new fields, of which it
will not be slow to take advantage.

In my message to Congress of December 5, 1898, I urged that the
recommendation which had been made to the Speaker of the House of
Representatives by the Secretary of the Treasury on the 14th of June,
1898, for an appropriation for a commission to study the commercial and
industrial conditions in the Chinese Empire and report as to the
opportunities for, and obstacles to, the enlargement of markets in China
for the raw products and manufactures of the United States, should
receive at your hands the consideration which its importance and
timeliness merited, but the Congress failed to take action.

I now renew this recommendation, as the importance of the subject has
steadily grown since it was first submitted to you, and no time should
be lost in studying for ourselves the resources of this great field for
American trade and enterprise.

The death of President Faure in February last called forth those sincere
expressions of sympathy which befit the relations of two Republics as
closely allied by unbroken historic ties as are the United States and
France.

Preparations for the representation of the industries, arts, and
products of the United States at the World's Exposition to be held in
Paris next year continue on an elaborate and comprehensive scale, thanks
to the generous appropriation provided by Congress and to the friendly
interest the French Government has shown in furthering a typical exhibit
of American progress.

There has been allotted to the United States a considerable addition of
space, which, while placing our country in the first rant among
exhibitors, does not suffice to meet the increasingly urgent demands of
our manufacturers. The efforts of the Commissioner General are ably
directed toward a strictly representative display of all that most
characteristically marks American achievement in the inventive arts, and
most adequately shows the excellence of our natural productions.

In this age of keen rivalry among nations for mastery in commerce, the
doctrine of evolution and the rule of the survival of the fittest must
be as inexorable in their operation as they are positive in the results
they bring about. The place won in the struggle by an industrial people
can only be held by unrelaxed endeavor and constant advance in
achievement. The present extraordinary impetus in every line of American
exportation and the astounding increase in the volume and value of our
share in the world's markets may not be attributed to accidental
conditions.

The reasons are not far to seek. They lie deep in our national character
and find expression year by year in every branch of handicraft, in every
new device whereby the materials we so abundantly produce are subdued to
the artisan's will and made to yield the largest, most practical, and
most beneficial return. The American exhibit at Paris should, and I am
confident will, be an open volume, whose lessons of skillfully directed
endeavor, unfaltering energy, and consummate performance may be read by
all on every page, thus spreading abroad a clearer knowledge of the
worth of our productions and the justice of our claim to an important
place in the marts of the world. To accomplish this by judicious
selection, by recognition of paramount merit in whatever walk of trade
or manufacture it may appear, and by orderly classification and
attractive installation is the task of our Commission.

The United States Government building is approaching completion, and no
effort will be spared to make it worthy, in beauty of architectural plan
and in completeness of display, to represent our nation. It has been
suggested that a permanent building of similar or appropriate design be
erected on a convenient site, already given by the municipality, near
the exposition grounds, to serve in commemoration of the part taken by
this country in this great enterprise, as an American National
Institute, for our countrymen resorting to Paris for study.

I am informed by our Commissioner-General that we shall have in the
American sections at Paris over 7,000 exhibitors, from every State ill
our country, a number ten times as great as those which were represented
at Vienna in 1873, six times as many as those in Paris in 1878, and four
times as many as those who exhibited in Paris in 1889. This statement
does not include the exhibits from either Cuba, Puerto Rico, or Hawaii,
for which arrangements have been made.

A number of important international congresses on special topics
affecting public interests are proposed to be held in Paris next summer
in connection with the exposition. Effort will be made to have the
several technical branches of our administration efficiently represented
at those conferences, each in its special line, and to procure the
largest possible concourse of State representatives, particularly at the
Congresses of Public Charity and Medicine.

Our relations with Germany continue to be most cordial. The increasing
intimacy of direct association has been marked during the year by the
granting permission in April for the landing on our shores of a cable
from Borkum Emden, on the North Sea, by way of the Azores, and also by
the conclusion on September 2 of a Parcels Post Convention with the
German Empire. In all that promises closer relations of intercourse and
commerce and a better understanding between two races having so many
traits in common, Germany can be assured of the most cordial cooperation
of this Government and people. We may be rivals in many material paths,
but our rivalry should be generous and open, ever aiming toward the
attainment of larger results and the mutually beneficial advancement of
each in the line of its especial adaptabilities.

The several governments of the Empire seem reluctant to admit the
natural excellence of our food productions and to accept the evidence we
constantly tender of the care with which their purity is guarded by
rigid inspection from the farm, through the slaughterhouse and the
packing establishments, to the port of shipment. Our system of control
over exported food staples invites examination from any quarter and
challenges respect by its efficient thoroughness.

It is to be hoped that in time the two Governments will act in common
accord toward the realization of their common purpose to safeguard the
public health and to insure the purity and wholesomeness of all food
products imported by either country from the other. Were the Congress to
authorize an invitation to Germany, in connection with the pending
reciprocity negotiations, for the constitution of a joint commission of
scientific experts and practical men of affairs to conduct a searching
investigation of food production and exportation in both countries and
report to their respective legislatures for the adoption of such
remedial measures as they might recommend for either, the way might be
opened for the desirable result indicated.

Efforts to obtain for American life insurance companies a full hearing
as to their business operations in Prussia have, after several years of
patient representation, happily succeeded, and one of the most important
American companies has been granted a concession to continue business in
that Kingdom.

I am also glad to announce that the German insurance companies have been
readmitted by the superintendent of insurance to do business in the
State of New York.

Subsequent to the exchange of our peace treaty with Spain, Germany
acquired the Caroline Islands by purchase, paying therefore $5,000,000.
Assurances have been received from the German Government that the rights
of American missionaries and traders there will be considerately
observed.

In my last annual message I referred to the pending negotiations with
Great Britain in respect to the Dominion of Canada. By means of an
executive agreement, a joint High Commission had been created for the
purpose of adjusting all unsettled questions between the United States
and Canada, embracing twelve subjects, among which were the questions of
the fur seals, the fisheries of the coast and contiguous inland waters,
the Alaskan boundary, the transit of merchandise in bond, the alien
labor laws, mining rights, reciprocity in trade, revision of the
agreement respecting naval vessels in the Great Lakes, a more complete
marking of parts of the boundary, provision for the conveyance of
criminals, and for wrecking and salvage.

Much progress had been made by the Commission toward the adjustment of
many of these questions, when it became apparent that an irreconcilable
difference of views was entertained respecting the delimitation of the
Alaskan, boundary. In the failure of an agreement as to the meaning of
Articles III and IV of the treaty of 1825 between Russia and Great
Britain, which defined the boundary between Alaska and Canada, the
American Commissioners proposed that the subject of the boundary be laid
aside, and that the remaining questions of difference be proceeded with,
some of which were so far advanced as to assure the probability of a
settlement. This being declined by the British Commissioners, an
adjournment was taken until the boundary should be adjusted by the two
Governments. The subject has been receiving the careful attention which
its importance demands, with the result that a modus vivendi for
provisional demarcations in the region about the head of Lynn Canal has,
been agreed upon; and it is hoped that the negotiations now in progress
between the two Governments will end in an agreement for the
establishment and delimitation of a permanent boundary.

Apart from these questions growing out of our relationship with our
northern neighbor, the most friendly disposition and ready agreement
have marked the discussion of numerous matters arising in the vast and
intimate intercourse of the United States with Great Britain.

This Government has maintained an attitude of neutrality in the
unfortunate contest between Great Britain and the Boer States of Africa.
We have remained faithful to the precept of avoiding entangling
alliances as to affairs not of our direct concern. Had circumstances
suggested that the parties to the quarrel would have welcomed any kindly
expression of the hope of the American people that war might be averted,
good offices would have been gladly tendered. The United States
representative at Pretoria was early instructed to see that all neutral
American interests be respected by the combatants. This has been an easy
task in view of the positive declarations of both British and Boer
authorities that the personal and property rights of our citizens should
be observed.

Upon the withdrawal of the British agent from Pretoria the United States
consul was authorized, upon the request of the British Government and
with the assent of the South African and Orange Free State Governments,
to exercise the customary good offices of a neutral for the care of
British interests. In the discharge of this function, I am happy to say
that abundant opportunity has been afforded to show the impartiality of
this Government toward both the combatants.

For the fourth time in the present decade, question has arisen with the
Government of Italy in regard to the lynching of Italian subjects. The
latest of these deplorable events occurred at Tallulah, Louisiana,
whereby five unfortunates of Italian origin were taken from jail and
hanged.

The authorities of the State and a representative of the Italian Embassy
having separately investigated the occurrence, with discrepant results,
particularly as to the alleged citizenship of the victims, and it not
appearing that the State had been able to discover and punish the
violators of the law, an independent investigation has been set on foot,
through the agency of the Department of State, and is still in progress.
The result will enable the Executive to treat the question with the
Government of Italy in a spirit of fairness and justice. A satisfactory
solution will doubtless be reached.

The recurrence of these distressing manifestations of blind mob fury
directed at dependents or natives of a foreign country suggests that the
contingency has arisen for action by Congress in the direction of
conferring upon the Federal courts jurisdiction in this class of
international cases where the ultimate responsibility of the Federal
Government may be involved. The suggestion is not new. In his annual
message of December 9, 1891, my predecessor, President Harrison, said:
It would, I believe, be entirely competent for Congress to make offenses
against the treaty rights of foreigners domiciled in the United States
cognizable in the Federal courts. This has not, however, been done, and
the Federal officers and courts have no power in such cases to intervene
either for the protection of a foreign citizen or for the punishment of
his slayers. It seems to me to follow, in this state of the law, that
the officers of the State charged with police and judicial powers in
such cases must, in the consideration of international questions growing
out of such incidents, be regarded in such sense as Federal agents as to
make this Government answerable for their acts in cases where it would
be answerable if the United States had used its constitutional power to
define and punish crimes against treaty rights. A bill to provide for
the punishment of violations of treaty rights of aliens was introduced
in the Senate March 1, 1892, and reported favorably March 30. Having
doubtless in view the language of that part of Article III of the treaty
of February 26, 1871, between the United States and Italy, which
stipulates that "The citizens of each of the high contracting parties
shall receive, in the States and Territories of the other, most constant
protection and security for their persons and property, and shall enjoy
in this respect the same rights and privileges as are or shall be
granted to the natives, on their submitting themselves to the conditions
imposed upon the natives," the bill so introduced and reported provided
that any act committed in any State or Territory of the United States in
violation of the rights of a citizen or subject of a foreign country
secured to such citizen or subject by treaty between the United States
and such foreign country and constituting a crime under the laws of the
State or Territory shall constitute a like crime against the United
States and be cognizable in the Federal courts. No action was taken by
Congress in the matter.

I earnestly recommend that the subject be taken up anew and acted upon
during the present session. The necessity for some such provision
abundantly appears. Precedent for constituting a Federal jurisdiction in
criminal cases where aliens are sufferers is rationally deducible from
the existing statute, which gives to the district and circuit courts of
the United States jurisdiction of civil suits brought by aliens where
the amount involved exceeds a certain sum. If such jealous solicitude be
shown for alien rights in cases of merely civil and pecuniary import,
how much greater should be the public duty to take cognizance of matters
affecting the lives and the rights of aliens tinder the settled
principles of international law no less than under treaty stipulation,
in cases of such transcendent wrong-doing as mob murder, especially when
experience has shown that local justice is too often helpless to punish
the offenders.

After many years of endeavor on the part of this Government to that end
the Italian Government has consented to enter into negotiations for a
naturalization convention, having for one of its objects the regulation
of the status of Italians (except those of an age for active military
service) who, having been naturalized in the United States, may revisit
Italy. It is hoped that with the mutually conciliatory spirit displayed
a successful conclusion will be reached.

The treaty of commerce and navigation between the United States and
Japan on November 22, 1894, took effect in accordance with the terms of
its XIXth Article on the 17th of July last, simultaneously with the
enforcement of like treaties with the other powers, except France, whose
convention did not go into operation until August 4, the United States
being, however, granted up to that date all the privileges and rights
accorded to French citizens under the old French treaty. By this notable
conventional reform Japan's position as a fully independent sovereign
power is assured, control being gained of taxation, customs revenues,
judicial administration, coasting trade, and all other domestic
functions of government, and foreign extra-territorial rights being
renounced.

Comprehensive codes of civil and criminal procedure according to western
methods, public instruction, patents and copyrights, municipal
administration, including jurisdiction over the former foreign
settlements, customs tariffs and procedure, public health, and other
administrative measures have been proclaimed. The working of the new
system has given rise to no material complaints on the part of the
American citizens or interests, a circumstance which attests the ripe
consideration with which the change has been prepared.

Valuable assistance was rendered by the Japanese authorities to the
United States transport ship Morgan City while stranded at Kobe.
Permission has been granted to land and pasture army horses at Japanese
ports of call on the way to the Philippine Islands. These kindly
evidences of good will are highly appreciated.

The Japanese Government has shown a lively interest in the proposition
of the Pacific Cable Company to add to its projected cable lines to
Hawaii, Guam, and the Philippines a branch connection with the coast of
Japan. It would be a gratifying consummation were the utility of the
contemplated scheme enhanced by bringing Japan and the United States
into direct telegraphic relation.

Without repeating the observations of my special message of February 10,
1899, concerning the necessity of a cable to Manila. I respectfully
invite attention to it.

I recommend that, in case the Congress should not take measures to bring
about this result by direct action of the Government, the Postmaster
General be authorized to invite competitive bids for the establishment
of a cable; the company making the best responsible bid to be awarded
the contract; the successful company to give ample bonds to insure the
completion of the work within a reasonable time.

The year has been marked by constant increase in the intimacy of our
relations with Mexico and in the magnitude of mutually advantageous
interchanges. This Government has omitted no opportunity to show its
strong desire to develop and perpetuate the ties of cordiality now so
long happily unbroken.

Following the termination on January 20, 1899, by Mexico of the
convention of extradition of December 11, 1861, a new treaty more in
accordance with the ascertained needs of both countries was signed
February 22, 1899, and exchanged in the City of Mexico on the 22d of
April last. Its operation thus far has been effective and satisfactory.
A recent case has served to test the application of its IVth Article,
which provides that neither party shall be bound to deliver up its own
citizens, but that the executive authority of each shall have the power
to deliver them up if in its discretion it be deemed proper to do so.

The extradition of Mrs. Mattie Rich, a citizen of the United States,
charged with homicide committed in Mexico, was after mature
consideration directed by me in the conviction that the ends of justice
would be thereby subserved. Similar action, on appropriate occasion, by
the Mexican Executive will not only tend to accomplish the desire of
both Governments that grave crimes go not unpunished, but also to
repress lawlessness along the border of the two countries. The new
treaty stipulates that neither Government shall assume jurisdiction in
the punishment of crimes committed exclusively within the territory of
the other. This will obviate in future the embarrassing controversies
which have heretofore arisen through Mexico's assertion of a claim to
try and punish an American citizen for an offense committed within the
jurisdiction of the United States.

The International Water Boundary Commission, organized by the convention
of March 1, 1889, for the adjustment of questions affecting the Rio
Grande frontier, has not yet completed its labors. A further extension
of its term for one year, until December 24, 1899, was effected by a
convention signed December z, 1898, and exchanged and proclaimed in
February last.

An invitation extended to the President of Mexico to visit Chicago in
October, on the occasion of laying the corner stone of the United States
Government building in that city, was cordially accepted by him, with
the necessary consent of the Mexican Congress, but the illness of a
member of his family prevented his attendance. The Minister of Foreign
Relations, however, came as the personal representative of President
Diaz, and in that high character was duly honored.

Claims growing out of the seizure of American sealing vessels in Bering
Sea have been under discussion with the Government of Russia for several
years, with the recent happy result of an agreement to submit them to
the decision of a single arbitrator. By this act Russia affords proof of
her adherence to the beneficent principle of arbitration which her
plenipotentiaries conspicuously favored at The Hague Disarmament
Conference when it was advocated by the representatives of the United
States.

A suggestion for a permanent exposition of our products and manufactures
in Russia, although not yet fully shaped, has been so cordially welcomed
by the Imperial Government that it may not inaptly take a fitting place
in whatever legislation the Congress may adopt looking to enlargement of
our commercial opportunities abroad.

Important events have occurred in the Samoan Islands. The election,
according to the laws and customs of Samoa, of a successor to the late
King, Malietoa Laupepa, developed a contest as to the validity of the
result, which issue, by the terms of the General Act, was to be decided
by the Chief justice. Upon his rendering a judgment in favor of Malietoa
Tanu, the rival chief, Mataafa, took up arms. The active intervention of
American and British war ships became imperative to restore order, at
the cost of sanguinary encounters. In this emergency a joint commission
of representatives of the United States, Germany, and Great Britain was
sent to Samoa to investigate the situation and provide a temporary
remedy. By its active efforts a peaceful solution was reached for the
time being, the kingship being abolished and a provisional government
established. Recommendations unanimously made by the commission for a
permanent adjustment of the Samoan question were taken under
consideration by the three powers parties to the General Act. But the
more they were examined the more evident it became that a radical change
was necessary in the relations of the powers to Samoa.

The inconveniences and possible perils of the tripartite scheme of
supervision and control in the Samoan group by powers having little
interest in common in that quarter beyond commercial rivalry had been
once more emphasized by the recent events. The suggested remedy of the
joint Commission, like the scheme it aimed to replace amounted to what
has been styled a tridominium, being the exercise of the functions of
sovereignty by an unanimous agreement of three powers. The situation had
become far more intricate and embarrassing from every point of view than
it was when my predecessor, in 1894, summed up its perplexities and
condemned the participation in it of the United States.

The arrangement under which Samoa was administered had proved
impracticable and unacceptable to all the powers concerned. To withdraw
from the agreement and abandon the islands to Germany and Great Britain
would not be compatible with our interests in the archipelago. To
relinquish our rights in the harbor of Pago Pago, the best anchorage in
the Pacific, the occupancy of which had been leased to the United States
in 1878 by the first foreign treaty ever concluded by Samoa, was not to
be thought of either as regards the needs of our Navy or the interests
of our growing commerce with the East. We could not have considered any
proposition for the abrogation of the tripartite control which did not
confirm us in all our rights and safeguard all our national interests in
the islands.

Our views commended themselves to the other powers. A satisfactory
arrangement was concluded between the Governments of Germany and of
England, by virtue of which England retired from Samoa in view of
compensations in other directions, and both powers renounced in favor of
the United States all their rights and claims over and in respect to
that portion of the group lying to the east of the one hundred and
seventy-first degree of west longitude, embracing the islands of
Tutuila, Ofoo, Olosenga, and Manua. I transmit to the Senate, for its
constitutional action thereon, a convention, which besides the
provisions above mentioned also guarantees us the same privileges and
conditions in respect to commerce and commercial vessels in all of the
islands of Samoa as those possessed by Germany.

Claims have been preferred by white residents of Samoa on account of
injuries alleged to have been suffered through the acts of the treaty
Governments in putting down the late disturbances. A convention has been
made between the three powers for the investigation and settlement of
these claims by a neutral arbitrator, to which the attention of the
Senate will be invited.

My annual message of last year was necessarily devoted, in great part to
a consideration of the Spanish War and of the results it wrought and the
conditions it imposed for the future. I am gratified to announce that
the treaty of peace has restored friendly relations between the two
powers. Effect has been given to its most important provisions. The
evacuation of Puerto Rico having already been accomplished on the XIVth
of October, 1898, nothing remained necessary there but to continue the
provisional military control of the island until the Congress should
enact a suitable government for the ceded territory. Of the character
and scope of the measures to that end I shall treat in another part of
this message.

The withdrawal of the authority of Spain from the island of Cuba was
effected by the 1st of January, so that the full re-establishment of
peace found the relinquished territory held by us in trust for the
inhabitants, maintaining, under the direction of the Executive, such
government and control therein as should conserve public order, restore
the productive conditions of peace so long disturbed by the instability
and disorder which prevailed for the greater part of the preceding three
decades, and build up that tranquil development of the domestic state
whereby alone can be realized the high purpose, as proclaimed in the
joint resolution adopted by the Congress on the 19th of April, 1898, by
which the United States disclaimed any disposition or intention to
exercise sovereignty, jurisdiction, or control over Cuba, except for the
pacification thereof, and asserted its determination when that was
accomplished to leave the government and control of the island to its
people. The pledge contained in this resolution is of the highest
honorable obligation and must be sacredly kept.

I believe that substantial progress has been made in this direction. All
the administrative measures adopted in Cuba have aimed to fit it for a
regenerated existence by enforcing the supremacy of law and justice; by
placing wherever practicable the machinery of administration in the
hands of the inhabitants; by instituting needed sanitary reforms; by
spreading education; by fostering industry and trade; by inculcating
public morality, and, in short, by taking every rational step to aid the
Cuban people to attain to that plane of self-conscious respect and
self-reliant unity which fits an enlightened community for
self-government within its own sphere, while enabling it to fulfill all
outward obligation.

This nation has assumed before the world a grave responsibility for the
future good government of Cuba. We have accepted a trust the fulfillment
of which calls for the sternest integrity of purpose and the exercise of
the highest wisdom. The new Cuba yet to arise from the ashes of the past
must needs be bound to us by ties of singular intimacy and strength if
its enduring welfare is to be assured. Whether those ties shall be
organic or conventional, the destinies of Cuba are in some rightful form
and manner irrevocably linked with our own, but how and how far is for
the future to determine in the ripeness of events. Whatever be the
outcome, we must see to it that free Cuba be a reality, not a name, a
perfect entity, not a hasty experiment bearing within itself the
elements of failure. Our mission, to accomplish which we took up the
wager of battle, is not to be fulfilled by turning adrift any loosely
framed commonwealth to face the vicissitudes which too often attend
weaker States whose natural wealth and abundant resources are offset by
the incongruities of their political organization and the recurring
occasions for internal rivalries to sap their strength and dissipate
their energies. The greatest blessing which can come to Cuba is the
restoration of her agricultural and industrial prosperity, which will
give employment to idle men and re-establish the pursuits of peace. This
is her chief and immediate need.

On the 19th of August last an order was made for the taking of the
census in the island, to be completed on the 30th of November. By the
treaty of peace the Spanish people on the island have until April 11,
1900, to elect whether they will remain citizens of Spain or become
citizens of Cuba. Until then it cannot be definitely ascertained who
shall be entitled to participate in the formation of the government of
Cuba. By that time the results of the census will have been tabulated
and we shall proceed to provide for elections which will commit the
municipal governments of the island to the officers elected by the
people. The experience thus acquired will prove of great value in the
formation of a representative convention of the people to draft a
constitution and establish a general system of independent government
for the island. In the meantime and so long as we exercise control over
the island the products of Cuba should have a market in the United
States on as good terms and with as favorable rates of duty as are given
to the West India Islands under treaties of reciprocity which shall be
made.

For the relief of the distressed in the island of Cuba the War
Department has issued supplies to destitute persons through the officers
of the Army, which have amounted to 5,493,000 rations, at a cost Of
$1,417,554.07.

To promote the disarmament of the Cuban volunteer army, and in the
interest of public peace and the welfare of the people, the sum Of $75
was paid to each Cuban soldier borne upon the authenticated rolls, on
condition that he should deposit his arms with the authorities
designated by the United States. The sum thus disbursed aggregated
$2,547,750, which was paid from the emergency fund provided by the act
of January 5, 1899, for that purpose.

Out of the Cuban island revenues during the six months ending June 30,
1899, $1,712,014.20 was expended for sanitation, $293,881.70 for
charities and hospitals, and $88,944.03 for aid to the destitute.

Following the exchange of ratifications of the treaty of peace the two
Governments accredited ministers to each other, Spain sending to
Washington the Duke of Arcos, an eminent diplomatist, previously
stationed in Mexico, while the United States transferred to Madrid Hon.
Bellamy Storer, its minister at Brussels. This was followed by the
respective appointment of consuls, thereby fully resuming the relations
interrupted by the war. In addition to its consular representation in
the United States, the Spanish Government has appointed consuls for
Cuba, who have been provisionally recognized during the military
administration of the affairs of that island.

Judicial intercourse between the courts of Cuba and Puerto Rico and of
Spain has been established, as provided by the treaty of peace. The
Cuban political prisoners in Spanish penal stations have been and are
being released and returned to their homes, in accordance with Article
VI of the treaty. Negotiations are about to be had for defining the
conventional relations between the two countries, which fell into
abeyance by reason of the war. I trust that these will include a
favorable arrangement for commercial reciprocity under the terms of
sections 3 and 4 of the current tariff act. In these, as in all matters
of international concern, no effort will be spared to respond to the
good disposition of Spain, and to cultivate in all practicable ways the
intimacy which should prevail between two nations whose past history has
so often and in so many ways been marked by sincere friendship and by
community of interests.

I would recommend appropriate legislation in order to carry into
execution Article VII of the Treaty of Peace with Spain, by which the
United States assured the payment of certain claims for indemnity of its
citizens against Spain.

The United States minister to Turkey continues, under instructions, to
press for a money payment in satisfaction of the just claims for
injuries suffered by American citizens in the disorders of several years
past and for wrongs done to them by the Ottoman authorities. Some of
these claims are of many years' standing. This Government is hopeful of
a general agreement in this regard.

In the Turkish Empire the situation of our citizens remains
unsatisfactory. Our efforts during nearly forty years to bring about a
convention of naturalization seem to be on the brink of final failure
through the announced policy of the Ottoman Porte to refuse recognition
of the alien status of native Turkish subjects naturalized abroad since
1867. Our statutes do not allow this Government to admit any distinction
between the treatment of native and naturalized Americans abroad, so
that ceaseless controversy arises in cases where persons owing in the
eye of international law a dual allegiance are prevented from entering
Turkey or are expelled after entrance. Our law in this regard contrasts
with that of the European States. The British act, for instance, does
not claim effect for the naturalization of an alien in the event of his
return to his native country, unless the change be recognized by the law
of that country or stipulated by treaty between it and the naturalizing
State.

The arbitrary treatment, in some instances, of American productions in
Turkey has attracted attention of late, notably in regard to our flour.
Large shipments by the recently opened direct steamship line to Turkish
ports have been denied entrance on the score that, although of standard
composition and unquestioned purity, the flour was pernicious to health
because of deficient "elasticity" as indicated by antiquated and
untrustworthy tests. Upon due protest by the American minister, and it
appearing that the act was a virtual discrimination against our product,
the shipments in question were admitted. In these, as in all instances,
wherever occurring, when American products may be subjected in a foreign
country, upon specious pretexts, to discrimination compared with the
like products of another country, this Government will use its earnest
efforts to secure fair and equal treatment for its citizens and their
goods. Failing this, it will not hesitate to apply whatever corrective
may be provided by the statutes.

The International Commission of Arbitration, appointed under the
Anglo-Venezuelan treaty of 1897, rendered an award on October 3 last,
whereby the boundary line between Venezuela and British Guiana is
determined, thus ending a controversy which has existed for the greater
part of the century. The award, as to which the arbitrators were
unanimous, while not meeting the extreme contention of either party,
gives to Great Britain a large share of the interior territory in
dispute and to Venezuela the entire mouth of the Orinoco, including
Barima Point and the Caribbean littoral for some distance to the
eastward. The decision appears to be equally satisfactory to both
parties.

Venezuela has once more undergone a revolution. The insurgents, under
General Castro, after a sanguinary engagement in which they suffered
much loss, rallied in the mountainous interior and advanced toward the
capital. The bulk of the army having sided with the movement, President
Andrade quitted Caracas, where General Castro set up a provisional
government with which our minister and the representatives of other
powers entered into diplomatic relations on the 20th of November, 1899.

The fourth section of the Tariff Act approved July 24, 1897, appears to
provide only for commercial treaties which should be entered into by the
President and also ratified by the Senate within two years from its
passage. Owing to delays inevitable in negotiations of this nature, none
of the treaties initiated under that section could be concluded in time
for ratification by the Senate prior to its adjournment on the 4th of
March last. Some of the pending negotiations, however, were near
conclusion at that time, and the resulting conventions have since been
signed by the plenipotentiaries. Others, within both the third and
fourth sections of the act, are still under consideration. Acting under
the constitutional power of the Executive in respect to treaties, I have
deemed it my duty, while observing the limitations of concession
provided by the fourth section, to bring to a conclusion all pending
negotiations, and submit them to the Senate for its advice and consent.

Conventions of reciprocity have been signed during the Congressional
recess with Great Britain for the respective colonies of British Guiana,
Barbados, Bermuda, Jamaica, and Turks and Caicos Islands, and with the
Republic of Nicaragua.

Important reciprocal conventions have also been concluded with France
and with the Argentine Republic.

In my last annual message the progress noted in the work of the
diplomatic and consular officers in collecting information as to the
industries and commerce of other countries, and in the care and
promptitude with which their reports are printed and distributed, has
continued during the past year, with increasingly valuable results in
suggesting new sources of demand for American products and in pointing
out the obstacles still to be overcome in facilitating the remarkable
expansion of our foreign trade. It will doubtless be gratifying to
Congress to learn that the various agencies of the Department of State
are co-operating in these endeavors with a zeal and effectiveness which
are not only receiving the cordial recognition of our business
interests, but are exciting the emulation of other Governments. In any
rearrangement of the great and complicated work of obtaining official
data of an economic character which Congress may undertake it is most
important, in my judgment, that the results already secured by the
efforts of the Department of State should be carefully considered with a
view to a judicious development and increased utility to our export
trade.

The interest taken by the various States forming the International Union
of American Republics in the work of its organic bureau is evidenced by
the fact that for the first time since its creation in 1890 all the
Republics of South and Central America are now represented in it.

The unanimous recommendation of the International American Conference,
providing for the International Union of American Republics, stated that
it should continue in force during a term of ten years from the date of
its organization, and no country becoming a member of the union should
cease to be a member until the end of said period of ten years, and
unless twelve months before the expiration of said period a majority of
the members of the union had given to the Secretary of State of the
United States official notice of their wish to terminate the union at
the end of its first period, that the union should continue to be
maintained for another period of ten years, and thereafter, under the
same conditions, for successive periods of ten years each.

The period for notification expired on July 14, 1899, without any of the
members having given the necessary notice of withdrawal. Its maintenance
is therefore assured for the next ten years. In view of this fact and of
the numerous questions of general interest and common benefit to all of
the Republics of America, some of which were considered by the first
International American Conference, but not finally settled, and others
which have since then grown to importance, it would seem expedient that
the various Republics constituting the Union should be invited to hold
at an early date another conference in the capital of one of the
countries other than the United States, which has already enjoyed this
honor.

The purely international character of the work being done by the bureau
and the appreciation of its value are further emphasized by the active
co-operation which the various Governments of the Latin. American
Republics and their diplomatic representatives in this capital are now
exhibiting and the zealous endeavors they are making to extend its field
of usefulness, to promote through it commercial intercourse, and
strengthen the bonds of amity and confidence between its various members
and the nations of this continent.

The act to encourage the holding of the Pan-American Exposition on the
Niagara frontier, within the county of Erie or Niagara, in the State of
New York, in the year 1901, was approved on March 3, 1899.

This exposition, which will be held in the city of Buffalo, in the near
vicinity of the great Niagara cataract, and within a day's journey of
which reside 40, 000, 000 Of our people, will be confined entirely to
the Western Hemisphere. Satisfactory assurances have already been given
by the diplomatic representatives of Great Britain, Mexico, the Central
and South American Republics, and most of the States of the United
States that these countries and States will make an unique, interesting,
and instructive exhibit, peculiarly illustrative of their material
progress during the century which is about to close.

The law provides an appropriation Of $500,000 for the purpose of making
an exhibit at the exposition by the Government of the United States from
its Executive Departments and from the Smithsonian Institution and
National Museum, the United States Commission of Fish and Fisheries, the
Department of Labor, and the Bureau of the American Republics. To secure
a complete and harmonious arrangement of this Government exhibit a board
of management has already been created, and charged with the selection,
purchase, preparation, transportation, arrangement, and safe-keeping of
the articles and materials to be exhibited. This board has been
organized and has already entered upon the performance of its duties, as
provided for by the law.

I have every reason to hope and believe that this exposition will tend
more firmly to cement the cordial relations between the nations on this
continent.

In accordance with an act of Congress approved December 21, 1898, and
under the auspices of the Philadelphia Commercial Museum, a most
interesting and valuable exposition of products and manufactures
especially adapted to export trade was held in Philadelphia from the
14th of September to the 1st of December, 1899. The representative
character of the exhibits and the widespread interest manifested in the
special objects of the undertaking afford renewed encouragement to those
who look confidently to the steady growth of our enlarged exportation of
manufactured goods, which has been the most remarkable fact in the
economic development of the United States in recent years. A feature of
this exposition which is likely to become of permanent and increasing
utility to our industries is the collection of samples of merchandise
produced in various countries with special reference to particular
markets, providing practical object lessons to United States
manufacturers as to qualities, styles, and prices of goods such as meet
the special demands of consumers and may be exported with advantage.

In connection with the exposition an International Commercial Congress
was held, upon the invitation of the Philadelphia Commercial Museum,
transmitted by the Department of State to the various foreign
Governments, for an exchange of information and opinions with the view
to the promotion of international trade. This invitation met with
general and cordial acceptance, and the Congress, which began its
sessions at the exposition on the 13th of October proved to be of great
practical importance, from the fact that it developed a general
recognition of the interdependence of nations in trade and a most
gratifying spirit of accommodation with reference to the gradual removal
of existing impediments to reciprocal relations, without injury to the
industrial interests of either party.

In response to the invitation of His Majesty, the Emperor of Russia,
delegates from twenty-six countries were assembled at The Hague on the
18th of May, as members of a conference in the interest of peace. The
commission from the United States consisted of the Hon. Andrew D. White,
the Hon. Seth Low, the Hon. Stanford Newel, Captain Alfred T. Mahan, of
the United States Navy, Captain William Crozier, of the United States
Army, and the Hon. Frederick W. Holls, secretary. The occasion seemed to
be opportune for the serious consideration of a plan for the pacific
adjustment of international differences, a subject in which the American
people have been deeply interested for many years, and a definite
project for a permanent international tribunal was included in the
instructions to the delegates of the United States.

The final act of the conference includes conventions upon the
amelioration of the laws and customs of war on land, the adaptation to
maritime warfare of the principles of the Geneva Convention of 1864, and
the extension of judicial methods to international cases. The Convention
for the Pacific Settlement of International Conflicts embodies the
leading features of the American plan, with such modifications as were
rendered necessary by the great diversity of views and interests
represented by the delegates. The four titles of the convention provide
for the maintenance of general peace, the exercise of good offices and
mediation, the formation of commissions of inquiry, and international
arbitration.

The mediation provided for by the convention is purely voluntary and
advisory, and is intended to avoid any invasion or limitation of the
sovereign rights of the adhering States. The commissions of inquiry
proposed consists of delegations to be specifically constituted for
particular purposes by means of conventions between the contesting
parties, having for their object the clear understanding of
international differences before resorting to the use of force. The
provision for arbitration contemplates the formation of a permanent
tribunal before which disputed cases may be brought for settlement by
the mutual consent of the litigants in each separate case. The
advantages of such a permanent tribunal over impromptu commissions of
arbitration are conceived to be the actual existence of a competent
court, prepared to administer justice, the greater economy resulting
from a well-devised system, and the accumulated judicial skill and
experience which such a tribunal would soon possess.

While earnestly promoting the idea of establishing a permanent
international tribunal, the delegation of the United States was not
unmindful of the inconveniences which might arise from an obtrusive
exercise of mediation, and in signing the convention carefully guarded
the historic position of the United States by the following declaration:
Nothing contained in this convention shall be so construed as to require
the United States of America to depart from its traditional policy of
not intruding upon, interfering with, or entangling itself in the
political questions or policy or internal administration of any foreign
state; nor shall anything contained in the said convention be construed
to imply a relinquishment by the United. States of America of its
traditional attitude toward purely American questions. Thus interpreted,
the Convention for the Pacific Settlement of International Conflicts may
be regarded as realizing the earnest desire of great numbers of American
citizens, whose deep sense of justice, expressed in numerous resolutions
and memorials, has urged them to labor for this noble achievement. The
general character of this convention, already signed by the delegates of
more than twenty sovereign States, further commends it to the favorable
action of the Senate of the United States, whose ratification it still
awaits.

Since my last annual message, and in obedience to the acts of the
Congress of April 22 and 26, 1898, the remaining volunteer force
enlisted for the Spanish War, consisting Of 34,834 regulars and 110,202
volunteers, with over 5,000 volunteer officers, has been discharged from
the military service. Of the volunteers, 667 officers and 14,831 men
were serving in the Philippines, and 1,650 of the regulars, who were
entitled to be mustered out after the ratification of the treaty of
peace. They voluntarily remained at the front until their places could
be filled by new troops. They were returned home in the order in which
they went to Manila, and are now all of them out of the service and in
the ranks of citizenship. I recommend that the Congress provide a
special medal of honor for the volunteers, regulars, sailors, and
marines on duty in the Philippines who voluntarily remained in the
service after their terms of enlistment had expired.

By the act of March 2, 1899, Congress gave authority to increase the
Regular Army to a maximum not exceeding 65,000 enlisted men, and to
enlist a force of 5,000 volunteers, to be recruited from the country at
large. By virtue of this authority the Regular Army has been increased
to the number of 61,999 enlisted men and 2,248 officers, and new
volunteer regiments have been organized aggregating 33,050 enlisted men
and 1,524 officers. Two of these volunteer regiments are made up of
colored men, with colored line officers. The new troops to take the
places of those returning from the Philippines have been transported to
Manila to the number of 581 officers and 26,322 enlisted men of the
Regular Army and 594 officers and 15,388 enlisted men of the new
volunteer force, while 504 officers and 14, 119 men of the volunteer
force are on the ocean en route to Manila.

The force now in Manila consists Of 905 officers and 30,578 regulars,
and 594 officers and 15,388 of the volunteers, making an aggregate of
1,499 officers and 45,966 men. When the troops now under orders shall
reach Manila the force in the archipelago will comprise 2,051 officers
and 63,483 men. The muster out of the great volunteer army organized for
the Spanish War and the creation of a new army, the transportation from
Manila to San Francisco of those entitled to discharge and the
transportation of the new troops to take their places have been a work
of great magnitude well and ably done, for which too much credit cannot
be given the War Department.

During the past year we have reduced our force in Cuba and Puerto Rico,
In Cuba we now have 334 officers and 10,796 enlisted men; In Puerto
Rico, 87 officers and 2,855 enlisted men and a battalion of 400 men
composed of native Puerto Ricans; while stationed throughout the United
States are 910 officers and 17,317 men, and in Hawaii 12 officers and
453 enlisted men.

The operations of the Army are fully presented in the report of the
Secretary of War. I cannot withhold from officers and men the highest
commendation for their soldierly conduct in trying situations, their
willing sacrifices for their country, and the integrity and ability with
which they have performed unusual and difficult duties in our island
possessions.

In the organization of the volunteer regiments authorized by the act of
March 2, 1899, it was found that no provision had been made for
chaplains. This omission was doubtless from inadvertence. I recommend
the early authorization for the appointment of one chaplain for each of
said regiments. These regiments are now in the Philippines, and it is
important that immediate action be had.

In restoring peaceful conditions, orderly rule, and civic progress in
Cuba, Puerto Rico, and, so far as practicable, in the Philippines, the
rehabilitation of the postal service has been an essential and important
part of the work. It became necessary to provide mail facilities both
for our forces of occupation and for the native population. To meet this
requirement has involved a substantial reconstruction. The existing
systems were so fragmentary, defective, and inadequate that a new and
comprehensive organization had to be created. American trained officials
have been assigned to the directing and executive positions, while
natives have been chiefly employed in making up the body of the force.
In working out this plan the merit rule has been rigorously and
faithfully applied.

The appointment of Director-General of Posts of Cuba was given to an
expert who had been Chief Post-Office Inspector and Assistant
Postmaster-General, and who united large experience with administrative
capacity. For the postmastership at Havana the range of skilled and
available men was scanned, and the choice fell upon one who had been
twenty years in the service as deputy postmaster and postmaster of a
large city. This principle governed and determined the selection of the
American officials sent not only to Cuba, but to Puerto Rico and the
Philippines, and they were instructed to apply it so far as practicable
in the employment of the natives as minor postmasters and clerks. The
postal system in Cuba, though remaining under the general guidance of
the Postmaster-General, was made essentially independent. It was felt
that it should not be a burden upon the postal service of the United
States, and provision was made that any deficit in the postal revenue
should be a charge upon the general revenues of the island.

Though Puerto Rico and the Philippines hold a different relation to the
United States, yet, for convenience of administration, the same
principle of an autonomous system has been extended to them. The
development of the service in all of the islands has been rapid and
successful. It has moved forward on American lines, with free delivery,
money order, and registry systems, and has given the people mail
facilities far greater and more reliable than any they have ever before
enjoyed. It is thus not only a vital agency of industrial, social, and
business progress, but an important influence in diffusing a just
understanding of the true spirit and character of American
administration.

The domestic postal service continues to grow with extraordinary
rapidity. The expenditures and the revenues will each exceed
$100,000,000 during the current year. Fortunately, since the revival of
prosperous times the revenues have grown much faster than the
expenditures, and there is every indication that a short period will
witness the obliteration of the annual deficit. In this connection the
report of the Postmaster-General embodies a statement of some evils
which have grown up outside of the contemplation of law in the treatment
of some classes of mail matter which wrongly exercise the privilege of
the pound rate, and shows that if this matter had been properly
classified and had paid the rate which it should have paid, instead of a
postal deficit for the last fiscal year of $6,610,000, there would have
been on one basis a surplus of $17,637,570, and on another Of
$5,733,836. The reform thus suggested, in the opinion of the
Postmaster-General, would not only put the postal service at once on a
self-sustaining basis, but would permit great and valuable improvements,
and I commend the subject to the consideration of the Congress.

The Navy has maintained the spirit and high efficiency which have always
characterized that service, and has lost none of the gallantry in heroic
action which has signalized its brilliant and glorious past. The Nation
has equal pride in its early and later achievements. Its habitual
readiness for every emergency has won the confidence and admiration of
the country. The people are interested in the continued preparation and
prestige of the Navy and will justify liberal appropriations for its
maintenance and improvement. The officers have shown peculiar adaptation
for the performance of new and delicate duties which our recent war has
imposed.

It cannot be doubted that Congress will at once make necessary provision
for the armor plate for the vessels now under contract and building. Its
attention is respectfully called to the report of the Secretary of the
Navy, in which the subject is fully presented. I unite in his
recommendation that the Congress enact such special legislation as may
be necessary to enable the Department to make contracts early in the
coming year for armor of the best quality that can be obtained in this
country for the Maine, Ohio, and Missouri, and that the provision of the
act of March 3, 1899, limiting the price of armor to $300 per ton be
removed.

In the matter of naval construction Italy and Japan, of the great
powers, laid down less tonnage in the year 1899 than this country, and
Italy alone has less tonnage under construction. I heartily concur in
the recommendations for the increase of the Navy, as suggested by the
Secretary.

Our future progress and prosperity depend upon our ability to equal, if
not surpass, other nations in the enlargement and advance of science,
industry, and commerce. To invention we must turn as one of the most
powerful aids to the accomplishment of such a result. The attention of
the Congress is directed to the report of the Commissioner of Patents,
in which will be found valuable suggestions and recommendations.

On the 30th of June, 1899, the pension roll of the United States
numbered 991,519. These include the pensioners of the Army and Navy in
all our wars. The number added to the rolls during the year was 40,991.
The number dropped by reason of death, remarriage, minors by legal
limitation, failure to claim within three years, and other causes, was
43, 186, and the number of claims disallowed was 107,919. During the
year 89,054 pension certificates were issued, of which 37,077 were for
new or original pensions. The amount disbursed for army and navy
pensions during the year was $138,355,052.95, which was $1,651,461.61
less than the sum of the appropriations.

The Grand Army of the Republic at its recent national encampment held in
Philadelphia has brought to my attention and to that of the Congress the
wisdom and justice of a modification of the third section of the act of
June 27, 1890, which provides pensions for the widows of officers and
enlisted men who served ninety days or more during the War of the
Rebellion and were honorably discharged, provided that such widows are
without other means of sup, port than their daily labor and were married
to the soldier, sailor, or marine on account of whose service they claim
pension prior to the date of the act.

The present holding of the Department is that if the widow's income
aside from her daily labor does not exceed in amount what her pension
would be, to wit, $96 per annum, she would be deemed to be without other
means of support than her daily labor, and would be entitled to a
pension under this act; while if the widow's income independent of the
amount received by her as the result of her daily labor exceeds $96, she
would not be pensionable under the act. I am advised by the Commissioner
of Pensions that the amount of the income allowed before title to
pension would be barred has varied widely under different
administrations of the Pension Office, as well as during different
periods of the same administration, and has been the cause of just
complaint and criticism.

With the approval of the Secretary of the Interior the Commissioner of
Pensions recommends that, in order to make the practice at all times
uniform and to do justice to the dependent widow, the amount of income
allowed independent of the proceeds of her daily labor should be not
less than $250 per annum, and he urges that the Congress shall so amend
the act as to permit the Pension Office to grant pensionable status to
widows under the terms of the third section of the act of June 27, 1890,
whose income aside from the proceeds of daily labor is not in excess of
$250 per annum. I believe this to be a simple act of justice and
heartily recommend it.

The Dawes Commission reports that gratifying progress has been made in
its work during the preceding year. The field-work of enrollment of four
of the nations has been completed. I recommend that Congress at an early
day make liberal appropriation for educational purposes in the Indian
Territory.

In accordance with the act of Congress approved March 3, 1899. the
preliminary work in connection with the Twelfth Census is now fully
under way. The officers required for the proper administration of the
duties imposed have been selected. The provision for securing a proper
enumeration of the population, as well as to secure evidence of the
industrial growth of the Nation, is broader and more comprehensive than
any similar legislation in the past. The Director advises that every
needful effort is being made to push this great work to completion in
the time limited by the statute. It is believed that the Twelfth Census
will emphasize our remarkable advance in all that pertains to national
progress.

Under the authority of the act of Congress approved July 7, 1898, the
commission consisting of the Secretary of the Treasury, the
Attorney-General, and the Secretary of the Interior has made an
agreement of settlement, which has had my approval, of the indebtedness
to the Government growing out of the issue of bonds to aid in the
construction of the Central Pacific and Western Pacific railroads. The
agreement secures to the Government the principal and interest of said
bonds, amounting to $58,812,715.48. There has been paid thereon
$11,762,543.12, which has been covered into the Treasury, and the
remainder, payable within ten years, with interest at the rate Of 3 per
cent per annum, payable semiannually, is secured by the deposit of an
equal amount of first-mortgage bonds of the Pacific Railway companies.
The amounts paid and secured to be paid to the Government on account of
the Pacific Railroad subsidy claims are: Union Pacific, cash -
$58,448,223.75

Kansas Pacific, cash - 6,303,000.00

Central and Western Pacific, cash - 11,798,314.14

Notes, secured - 47,050,172.36

Kansas Pacific--dividends for deficiency due United States, cash -
821,897.70 -

***

State of the Union Address
William McKinley
December 3, 1900

To the Senate and House of Representatives:

At the outgoing of the old and the incoming of the new century you begin
the last session of the Fifty-sixth Congress with evidences on every
hand of individual and national prosperity and with proof of the growing
strength and increasing power for good of Republican institutions. Your
countrymen will join with you in felicitation that American liberty is
more firmly established than ever before, and that love for it and the
determination to preserve it are more universal than at any former
period of our history.

The Republic was never so strong, because never so strongly entrenched
in the hearts of the people as now. The Constitution, with few
amendments, exists as it left the hands of its authors. The additions
which have been made to it proclaim larger freedom and more extended
citizenship. Popular government has demonstrated in its one hundred and
twenty-four years of trial here its stability and security, and its
efficiency as the best instrument of national development and the best
safeguard to human rights.

When the Sixth Congress assembled in November, 1800, the population of
the United States was 5,308,483. It is now 76,304,799. Then we had
sixteen States. Now we have forty-five. Then our territory consisted Of
909,050 square miles. It is now 3,846,595 square miles. Education,
religion, and morality have kept pace with our advancement in other
directions, and while extending its power the Government has adhered to
its foundation principles and abated none of them in dealing with our
new peoples and possessions. A nation so preserved and blessed gives
reverent thanks to God and invokes His guidance and the continuance of
His care and favor.

In our foreign intercourse the dominant question has been the treatment
of the Chinese problem. Apart from this our relations with the powers
have been happy.

The recent troubles in China spring from the antiforeign agitation which
for the past three years has gained strength in the northern provinces.
Their origin lies deep in the character of the Chinese races and in the
traditions of their Government. The Taiping rebellion and the opening of
Chinese ports to foreign trade and settlement disturbed alike the
homogeneity and the seclusion of China.

Meanwhile foreign activity made itself felt in all quarters, not alone
on the coast, but along the great river arteries and in the remoter
districts, carrying new ideas and introducing new associations among a
primitive people which had pursued for centuries a national policy of
isolation.

The telegraph and the railway spreading over their land, the steamers
plying on their waterways, the merchant and the missionary penetrating
year by year farther to the interior, became to the Chinese mind types
of an alien invasion, changing the course of their national life and
fraught with vague forebodings of disaster to their beliefs and their
self-control.

For several years before the present troubles all the resources of
foreign diplomacy, backed by moral demonstrations of the physical force
of fleets and arms, have been needed to secure due respect for the
treaty rights of foreigners and to obtain satisfaction from the
responsible authorities for the sporadic outrages upon the persons and
property of unoffending sojourners, which from time to time occurred at
widely separated points in the northern provinces, as in the case of the
outbreaks in Sze-chuen and Shan-tung.

Posting of antiforeign placards became a daily occurrence, which the
repeated reprobation of the Imperial power failed to check or punish.
These inflammatory appeals to the ignorance and superstition of the
masses, mendacious and absurd in their accusations and deeply hostile in
their spirit, could not but work cumulative harm. They aimed at no
particular class of foreigners; they were impartial in attacking
everything foreign.

An outbreak in Shan-tung, in which German missionaries were slain, was
the too natural result of these malevolent teachings.

The posting of seditious placards, exhorting to the utter destruction of
foreigners and of every foreign thing, continued unrebuked. Hostile
demonstrations toward the stranger gained strength by organization.

The sect, commonly styled the Boxers, developed greatly in the provinces
north of the Yang-Tse, and with the collusion of many notable officials,
including some in the immediate councils of the Throne itself, became
alarmingly aggressive. No foreigner's life, outside of the protected
treaty ports, was safe. No foreign interest was secure from spoliation.

The diplomatic representatives of the powers in Peking strove in vain to
check this movement. Protest was followed by demand and demand by
renewed protest, to be met with perfunctory edicts from the Palace and
evasive and futile assurances from the Tsung-li Yamen. The circle of the
Boxer influence narrowed about Peking, and while nominally stigmatized
as seditious, it was felt that its spirit pervaded the capital itself,
that the Imperial forces were imbued with its doctrines, and that the
immediate counselors of the Empress Dowager were in full sympathy with
the antiforeign movement.

The increasing gravity of the conditions in China and the imminence of
peril to our own diversified interests in the Empire, as well as to
those of all the other treaty governments, were soon appreciated by this
Government, causing it profound solicitude. The United States from the
earliest days of foreign intercourse with China had followed a policy of
peace, omitting no occasions to testify good will, to further the
extension of lawful trade, to respect the sovereignty of its Government,
and to insure by all legitimate and kindly but earnest means the fullest
measure of protection for the lives and property of our law-abiding
citizens and for the exercise of their beneficent callings among the
Chinese people.

Mindful of this, it was felt to be appropriate that our purposes should
be pronounced in favor of such course as would hasten united action of
the powers at Peking to promote the administrative reforms so greatly
needed for strengthening the Imperial Government and maintaining the
integrity of China, in which we believed the whole western world to be
alike concerned. To these ends I caused to be addressed to the several
powers occupying territory and maintaining spheres of influence in China
the circular proposals of 1899, inviting from them declarations of their
intentions and views as to the desirability of the adoption of measures
insuring the benefits of equality of treatment of all foreign trade
throughout China.

With gratifying unanimity the responses coincided in this common policy,
enabling me to see in the successful termination of these negotiations
proof of the friendly spirit which animates the various powers
interested in the untrammeled development of commerce and industry in
the Chinese Empire as a source of vast benefit to the whole commercial
world.

In this conclusion, which I had the gratification to announce as a
completed engagement to the interested powers on March 20, 1900, I
hopefully discerned a potential factor for the abatement of the distrust
of foreign purposes which for a year past had appeared to inspire the
policy of the Imperial Government, and for the effective exertion by it
of power and authority to quell the critical antiforeign movement in the
northern provinces most immediately influenced by the Manchu sentiment.

Seeking to testify confidence in the willingness and ability of the
Imperial administration to redress the wrongs and prevent the evils we
suffered and feared, the marine guard, which had been sent to Peking in
the autumn of 1899 for the protection of the legation, was withdrawn at
the earliest practicable moment, and all pending questions were
remitted, as far as we were concerned, to the ordinary resorts of
diplomatic intercourse.

The Chinese Government proved, however, unable to check the rising
strength of the Boxers and appeared to be a prey to internal
dissensions. In the unequal contest the antiforeign influences soon
gained the ascendancy under the leadership of Prince Tuan. Organized
armies of Boxers, with which the Imperial forces affiliated, held the
country between Peking and the coast, penetrated into Manchuria up to
the Russian borders, and through their emissaries threatened a like
rising throughout northern China.

Attacks upon foreigners, destruction of their property, and slaughter of
native converts were reported from all sides. The Tsung-li Yamen,
already permeated with hostile sympathies, could make no effective
response to the appeals of the legations. At this critical juncture, in
the early spring of this year, a proposal was made by the other powers
that a combined fleet should be assembled in Chinese waters as a moral
demonstration, under cover of which to exact of the Chinese Government
respect for foreign treaty rights and the suppression of the Boxers.

The United States, while not participating in the joint demonstration,
promptly sent from the Philippines all ships that could be spared for
service on the Chinese coast. A small force of marines was landed at
Taku and sent to Peking for the protection of the American legation.
Other powers took similar action, until some four hundred men were
assembled in the capital as legation guards.

Still the peril increased. The legations reported the development of the
seditious movement in Peking and the need of increased provision for
defense against it. While preparations were in progress for a larger
expedition, to strengthen the legation guards and keep the railway open,
an attempt of the foreign ships to make a landing at Taku was met by a
fire from the Chinese forts. The forts were thereupon shelled by the
foreign vessels, the American admiral taking no part in the attack, on
the ground that we were not at war with China and that a hostile
demonstration might consolidate the antiforeign elements and strengthen
the Boxers to oppose the relieving column.

Two days later the Taku forts were captured after a sanguinary conflict.
Severance of communication with Peking followed, and a combined force of
additional guards, which was advancing to Peking by the Pei-Ho, was
checked at Langfang. The isolation of the legations was complete.

The siege and the relief of the legations has passed into undying
history. In all the stirring chapter which records the heroism of the
devoted band, clinging to hope in the face of despair, and the undaunted
spirit that led their relievers through battle and suffering to the
goal, it is a memory of which my countrymen may be justly proud that the
honor of our flag was maintained alike in the siege and the rescue, and
that stout American hearts have again set high, in fervent emulation
with true men of other race and language, the indomitable courage that
ever strives for the cause of right and justice.

By June 19 the legations were cut off. An identical note from the, Yamen
ordered each minister to leave Peking, under a promised escort, within
twenty-four hours. To gain time they replied, asking prolongation of the
time, which was afterwards granted, and requesting an interview with the
Tsung-li Yamen on the following day. No reply being received, on the
morning of the 20th the German minister, Baron von Ketteler, set out for
the Yamen to obtain a response, and oil the way was murdered.

An attempt by the legation guard to recover his body was foiled by the
Chinese. Armed forces turned out against the legations. Their quarters
were surrounded and attacked. The mission compounds were abandoned,
their inmates taking refuge in the British legation, where all the other
legations and guards gathered for more effective defense. Four hundred
persons were crowded in its narrow compass. Two thousand native converts
were assembled in a nearby palace under protection of the foreigners.
Lines of defense were strengthened, trenches dug, barricades raised, and
preparations made to stand a siege, which at once began.

From June 20 until July 17, writes Minister Conger, "there was scarcely
an hour during which there was not firing upon some part of our lines
and into some of the legations, varying from a single shot to a general
and continuous attack along the whole line." Artillery was placed around
the legations and on the over-looking palace walls, and thousands Of
3-inch shot and shell were fired, destroying some buildings and damaging
all. So thickly did the balls rain, that, when the ammunition of the
besieged ran low, five quarts of Chinese bullets were gathered in an
hour in one compound and recast.

Attempts were made to burn the legations by setting neighboring houses
on fire, but the flames were successfully fought off, although the
Austrian, Belgian, Italian. and Dutch legations were then and
subsequently burned. With the aid of the native converts, directed by
the missionaries, to whose helpful co-operation Mr. Conger awards
unstinted praise, the British legation was made a veritable fortress.
The British minister, Sir Claude MacDonald, was chosen general commander
of the defense, with the secretary of the American legation, Mr. E. G.
Squiers, as chief of staff.

To save life and ammunition the besieged sparingly returned the
incessant fire of the Chinese soldiery, fighting only to repel attack or
make an occasional successful sortie for strategic advantage, such as
that of fifty-five American, British, and Russian marines led by Captain
Myers, of the United States Marine Corps, which resulted in the capture
of a formidable barricade on the wall that gravely menaced the American
position. It was held to the last, and proved an invaluable acquisition,
because commanding the water gate through which the relief column
entered.

During the siege the defenders lost 65 killed, 135 wounded, and 7 by
disease, the last all children.

On July 14 the besieged had their first communication with the Tsung-li
Yamen, from whom a message came inviting to a conference, which was
declined. Correspondence, however, ensued and a sort of armistice was
agreed upon, which stopped the bombardment and lessened the rifle fire
for a time. Even then no protection whatever was afforded, nor any aid
given, save to send to the legations a small supply of fruit and three
sacks of flour.

Indeed, the only communication had with the Chinese Government related
to the occasional delivery or dispatch of a telegram or to the demands
of the Tsung-li Yamen for the withdrawal of the legations to the coast
under escort. Not only are the protestations of the Chinese Government
that it protected and succored the legations positively contradicted,
but irresistible proof accumulates that the attacks upon them were made
by Imperial troops, regularly uniformed, armed, and officered, belonging
to the command of Jung Lu, the Imperial commander in chief. Decrees
encouraging the Boxers, organizing them tinder prominent Imperial
officers, provisioning them, and even granting them large sums in the
name of the Empress Dowager, are known to exist. Members of the Tsung-li
Yamen who counseled protection of the foreigners were beheaded. Even in
the distant provinces men suspected of foreign sympathy were put to
death, prominent among these being Chang Yen-hoon, formerly Chinese
minister in Washington.

With the negotiation of the partial armistice of July 14, a proceeding
which was doubtless promoted by the representations of the Chinese envoy
in Washington, the way was opened for the conveyance to Mr. Conger of a
test message sent by the Secretary of State through the kind offices of
Minister Wu Ting-fang. Mr. Conger's reply, dispatched from Peking on
July 18 through the same channel, afforded to the outside world the
first tidings that the inmates of the legations were still alive and
hoping for succor.

This news stimulated the preparations for a joint relief expedition in
numbers sufficient to overcome the resistance which for a month had been
organizing between Taku and the capital. Reinforcements sent by all the
co-operating Governments were constantly arriving. The United States
contingent, hastily assembled from the Philippines or dispatched from
this country, amounted to some 5,000 men, under the able command first
of the lamented Colonel Liscurn and afterwards of General Chaffee.

Toward the end of July the movement began. A severe conflict followed at
Tientsin, in which Colonel Liscurn was killed. The city was stormed and
partly destroyed. Its capture afforded the base of operations from which
to make the final advance, which began in the first days of August, the
expedition being made up of Japanese, Russian, British, and American
troops at the outset.

Another battle was fought and won at Yangtsun. Thereafter the
disheartened Chinese troops offered little show of resistance. A few
days later the important position of Ho-si-woo was taken. A rapid march
brought the united forces to the populous city of Tung Chow, which
capitulated without a contest.

On August 14 the capital was reached. After a brief conflict beneath the
walls the relief column entered and the legations were saved. The United
States soldiers, sailors, and marines, officers and men alike, in those
distant climes and unusual surroundings, showed the same valor,
discipline, and good conduct and gave proof of the same high degree of
intelligence and efficiency which have distinguished them in every
emergency.

The Imperial family and the Government had fled a few days before. The
city was without visible control. The remaining Imperial soldiery had
made on the night of the 13th a last attempt to exterminate the
besieged, which was gallantly repelled. It fell to the occupying forces
to restore order and organize a provisional administration.

Happily the acute disturbances were confined to the northern provinces.
It is a relief to recall and a pleasure to record the loyal conduct of
the viceroys and local authorities of the southern and eastern
provinces. Their efforts were continuously directed to the pacific
control of the vast populations under their rule and to the scrupulous
observance of foreign treaty rights. At critical moments they did not
hesitate to memorialize the Throne, urging the protection of the
legations, the restoration of communication, and the assertion of the
Imperial authority against the subversive elements. They maintained
excellent relations with the official representatives of foreign powers.
To their kindly disposition is largely due the success of the consuls in
removing many of the missionaries from the interior to places of safety.
In this relation the action of the consuls should be highly commended.
In Shan-tung and eastern Chi-li the task was difficult, but, thanks to
their energy and the cooperation of American and foreign naval
commanders, hundreds of foreigners, including those of other
nationalities than ours, were rescued from imminent peril.

The policy of the United States through all this trying period was
clearly announced and scrupulously carried out. A circular note to the
powers dated July 3 proclaimed our attitude. Treating the condition in
the north as one of virtual anarchy, in which the great provinces of the
south and southeast had no share, we regarded the local authorities in
the latter quarters as representing the Chinese people with whom we
sought to remain in peace and friendship. Our declared aims involved no
war against the Chinese nation. We adhered to the legitimate office of
rescuing the imperiled legation, obtaining redress for wrongs already
suffered, securing wherever possible the safety of American life and
property in China, and preventing a spread of the disorders or their
recurrence.

As was then said, "The policy of the Government of the United States is
to seek a solution which may bring about permanent safety and peace to
China, preserve Chinese territorial and administrative entity, protect
all rights guaranteed to friendly powers by treaty and international
law, and safeguard for the world the principle of equal and impartial
trade with all parts of the Chinese Empire."

Faithful to those professions which, as it proved, reflected the views
and purposes of the other co-operating Governments, all our efforts have
been directed toward ending the anomalous situation in China by
negotiations for a settlement at the earliest possible moment. As soon
as the sacred duty of relieving our legation and its dependents was
accomplished we withdrew from active hostilities, leaving our legation
under an adequate guard in Peking as a channel of negotiation and
settlement--a course adopted by others of the interested powers.
Overtures of the empowered representatives of the Chinese Emperor have
been considerately entertained.

The Russian proposition looking to the restoration of the Imperial power
in Peking has been accepted as in full consonance with our own desires,
for we have held and hold that effective reparation for wrongs suffered
and an enduring settlement that will make their recurrence impossible
can best be brought about under an authority which the Chinese nation
reverences and obeys. While so doing we forego no jot of our undoubted
right to exact exemplary and deterrent punishment of the responsible
authors and abettors of the criminal acts whereby we and other nations
have suffered grievous injury.

For the real culprits, the evil counselors who have misled the Imperial
judgment and diverted the sovereign authority to their own guilty ends,
full expiation becomes imperative within the rational limits of
retributive Justice. Regarding this as the initial condition of an
acceptable settlement between China and the powers, I said in my message
of October 18 to the Chinese Emperor: I trust that negotiations may
begin so soon as we and the other offended Governments shall be
effectively satisfied of Your Majesty's ability and power to treat with
just sternness the principal offenders, who are doubly culpable, not
alone toward the foreigners, but toward Your Majesty, under whose rule
the purpose of China to dwell in concord with the world had hitherto
found expression in the welcome and protection assured to strangers.
Taking, as a point of departure, the Imperial edict appointing Earl Li
Hung Chang and Prince Ching plenipotentiaries to arrange a settlement,
and the edict of September 25, whereby certain high officials were
designated for punishment, this Government has moved, in concert with
the other powers, toward the opening of negotiations, which Mr. Conger,
assisted by Mr. Rockhill, has been authorized to conduct on behalf of
the United States.

General bases of negotiation formulated by the Government of the French
Republic have been accepted with certain reservations as to details,
made necessary by our own circumstances, but, like similar reservations
by other powers, open to discussion in the progress of the negotiations.
The disposition of the Emperor's Government to admit liability for
wrongs done to foreign Governments and their nationals, and to act upon
such additional designation of the guilty persons as the foreign
ministers at Peking may be in a position to make, gives hope of a
complete settlement of all questions involved, assuring foreign rights
of residence and intercourse on terms of equality for all the world.

I regard as one of the essential factors of a durable adjustment the
securement of adequate guarantees for liberty of faith, since insecurity
of those natives who may embrace alien creeds is a scarcely less
effectual assault upon the rights of foreign worship and teaching than
would be the direct invasion thereof.

The matter of indemnity for our wronged citizens is a question of grave
concern. Measured in money alone, a sufficient reparation may prove to
be beyond the ability of China to meet. All the powers concur in
emphatic disclaimers of any purpose of aggrandizement through the
dismemberment of the Empire. I am disposed to think that due
compensation may be made in part by increased guarantees of security for
foreign rights and immunities, and, most important of all, by the
opening of China to the equal commerce of all the world. These views
have been and will be earnestly advocated by our representatives.

The Government of Russia has put forward a suggestion, that in the event
of protracted divergence of views in regard to indemnities the matter
may be relegated to the Court of Arbitration at The Hague. I favorably
incline to this, believing that high tribunal could not fail to reach a
solution no less conducive to the stability and enlarged prosperity of
China itself than immediately beneficial to the powers.

Ratifications of a treaty of extradition with the Argentine Republic
were exchanged on June 2 last.

While the Austro-Hungarian Government has in the many cases that have
been reported of the arrest of our naturalized citizens for alleged
evasion of military service faithfully observed the provisions of the
treaty and released such persons from military obligations, it has in
some instances expelled those whose presence in the community of their
origin was asserted to have a pernicious influence. Representations have
been made against this course whenever its adoption has appeared unduly
onerous.

We have been urgently solicited by Belgium to ratify the International
Convention of June, 1899, amendatory of the previous Convention of 1890
in respect to the regulation of the liquor trade in Africa. Compliance
was necessarily withheld, in the absence of the advice and consent of
the Senate thereto. The principle involved has the cordial sympathy of
this Government, which in the reversionary negotiations advocated more
drastic measures, and I would gladly see its extension, by international
agreement, to the restriction of the liquor traffic with all uncivilized
peoples, especially in the Western Pacific.

A conference will be held at Brussels December 11, 1900, under the
Convention for the protection of industrial property, concluded at Paris
March 20, 1883, to which delegates from this country have been
appointed. Any lessening of the difficulties that our inventors
encounter in obtaining patents abroad for their inventions and that our
farmers, manufacturers, and merchants may have in the protection of
their trade-marks is worthy of careful consideration, and your attention
will be called to the results of the conference at the proper time.

In the interest of expanding trade between this country and South
America, efforts have been made during the past year to conclude
conventions with the southern republics for the enlargement of postal
facilities. Two such agreements, signed with Bolivia on April 24, of
which that establishing the money-order system is undergoing certain
changes suggested by the Post-Office Department, have not yet been
ratified by this Government. A treaty of extradition with that country,
signed on the same day, is before the Senate.

A boundary dispute between Brazil and Bolivia over the territory of Acre
is in a fair way of friendly adjustment, a protocol signed in December,
1899, having agreed on a definite frontier and provided for its
demarcation by a joint commission.

Conditions in Brazil have weighed heavily on our export trade to that
country in marked contrast to the favorable conditions upon which
Brazilian products are admitted into our markets. Urgent representations
have been made to that Government on the subject and some amelioration
has been effected. We rely upon the reciprocal justice and good will of
that Government to assure to us a further improvement in our commercial
relations.

The Convention signed May 24, 1897, for the final settlement of claims
left in abeyance upon the dissolution of the Commission of 1893, was at
length ratified by the Chilean Congress and the supplemental Commission
has been organized.

It remains for the Congress to appropriate for the necessary expenses of
the Commission.

The insurrectionary movement which disturbed Colombia in the latter part
of 1899 has been practically suppressed, although guerrillas still
operate in some departments. The executive power of that Republic
changed hands in August last by the act of Vice-President Marroquin in
assuming the reins of government during the absence of President San
Clemente from the capital. The change met with no serious opposition,
and, following the precedents in such cases, the United States minister
entered into relations with the new defacto Government on September 17.

It is gratifying to announce that the residual questions between Costa
Rica and Nicaragua growing out of the Award of President Cleveland in
1888 have been adjusted through the choice of an American engineer,
General E. P. Alexander, as umpire to run the disputed line. His task
has been accomplished to the satisfaction of both contestants.

A revolution in the Dominican Republic toward the close of last year
resulted in the installation of President Jimenez, whose Government was
formally recognized in January. Since then final payment has been made
of the American claim in regard to the Ozama bridge.

The year of the exposition has been fruitful in occasions for displaying
the good will that exists between this country and France. This great
competition brought together from every nation the best in natural
productions, industry, science, and the arts, submitted in generous
rivalry to a judgment made all the more searching because of that
rivalry. The extraordinary increase of exportations from this country
during the past three years and the activity with which our inventions
and wares had invaded new markets caused much interest to center upon
the American exhibit, and every encouragement was offered in the way of
space and facilities to permit of its being comprehensive as a whole and
complete in every part.

It was, however, not an easy task to assemble exhibits that could fitly
illustrate our diversified resources and manufactures. Singularly
enough, our national prosperity lessened the incentive to exhibit. The
dealer in raw materials knew that the user must come to him; the great
factories were contented with the phenomenal demand for their output,
not alone at home, but also abroad, where merit had already won a
profitable trade.

Appeals had to be made to the patriotism of exhibitors to induce them to
incur outlays promising no immediate return. This was especially the
case where it became needful to complete an industrial sequence or
illustrate a class of processes. One manufacturer after another had to
be visited and importuned, and at times, after a promise to exhibit in a
particular section had been obtained, it would be withdrawn, owing to
pressure of trade orders, and a new quest would have to be made.

The installation of exhibits, too, encountered many obstacles and
involved unexpected cost. The exposition was far from ready at the date
fixed for its opening. The French transportation lines were congested
with offered freight. Belated goods had to be hastily installed in
unfinished quarters with whatever labor could be obtained in the
prevailing confusion. Nor was the task of the Commission lightened by
the fact that, owing to the scheme of classification adopted, it was
impossible to have the entire exhibit of any one country in the same
building or more than one group of exhibits in the same part of any
building. Our installations were scattered on both sides of the Seine
and in widely remote suburbs of Paris, so that additional assistants
were needed for the work of supervision and arrangement.

Despite all these drawbacks the contribution of the United States was
not only the largest foreign display, but was among the earliest in
place and the most orderly in arrangement. Our exhibits were shown in
one hundred and one out of one hundred and twenty-one classes, and more
completely covered the entire classification than those of any other
nation. In total number they ranked next after those of France, and the
attractive form in which they were presented secured general attention.

A criterion of the extent and success of our participation and of the
thoroughness with which our exhibits were organized is seen in the
awards granted to American exhibitors by the international jury, namely,
grand prizes, 240; gold medals, 597; silver medals, 776; bronze medals,
541, and honorable mentions, 322--2,476 in all, being the greatest total
number given to the exhibit of any exhibiting nation, as well as the
largest number in each grade. This significant recognition of merit in
competition with the chosen exhibits of all other nations and at the
hands of juries almost wholly made up of representatives of France and
other competing countries is not only most gratifying, but is especially
valuable, since it sets us to the front in international questions of
supply and demand, while the large proportion of awards in the classes
of art and artistic manufactures afforded unexpected proof of the
stimulation of national culture by the prosperity that flows from
natural productiveness joined to industrial excellence.

Apart from the exposition several occasions for showing international
good will occurred. The inauguration in Paris of the Lafayette Monument,
presented by the school children of the United States, and the designing
of a commemorative coin by our Mint and the presentation of the first
piece struck to the President of the Republic, were marked by
appropriate ceremonies, and the Fourth of July was especially observed
in the French capital.

Good will prevails in our relations with the German Empire. An amicable
adjustment of the long-pending question of the admission of our
life-insurance companies to do business in Prussia has been reached. One
of the principal companies has already been readmitted and the way is
opened for the others to share the privilege.

The settlement of the Samoan problem, to which I adverted in my last
message, has accomplished good results. Peace and contentment prevail in
the islands, especially in Tutuila, where a convenient administration
that has won the confidence and esteem of the kindly disposed natives
has been organized under the direction of the commander of the United
States naval station at Pago-Pago.

An Imperial meat inspection law has been enacted for Germany. While it
may simplify the inspections, it prohibits certain products heretofore
admitted. There is still great uncertainty as to whether our well-nigh
extinguished German trade in meat products can revive tinder its new
burdens. Much will depend upon regulations not yet promulgated, which we
confidently hope will be free from the discriminations which attended
the enforcement of the old statutes.

The remaining link in the new lines of direct telegraphic communication
between the United States and the German Empire has recently been
completed, affording a gratifying occasion for exchange of friendly
congratulations with the German Emperor.

Our friendly relations with Great Britain continue. The war in Southern
Africa introduced important questions. A condition unusual in
international wars was presented in that while one belligerent had
control of the seas, the other had no ports, shipping, or direct trade,
but was only accessible through the territory of a neutral. Vexatious
questions arose through Great Britain's action in respect to neutral
cargoes, not contraband in their own nature, shipped to Portuguese South
Africa, on the score of probable or suspected ultimate destination to
the Boer States.

Such consignments in British ships, by which alone direct trade is kept
up between our ports and Southern Africa, were seized in application of
a municipal law prohibiting British vessels from trading with the enemy
without regard to any contraband character of the goods, while cargoes
shipped to Delagoa Bay in neutral bottoms were arrested on the ground of
alleged destination to enemy's country. Appropriate representations on
our part resulted in the British Government agreeing to purchase
outright all such goods shown to be the actual property of American
citizens, thus closing the incident to the satisfaction of the
immediately interested parties, although, unfortunately, without a broad
settlement of the question of a neutral's right to send goods not
contraband per se to a neutral port adjacent to a belligerent area.

The work of marking certain provisional boundary points, for convenience
of administration, around the head of Lynn Canal, in accordance with the
temporary arrangement of October, 1899, Was completed by a joint survey
in July last. The modus vivendi has so far worked without friction, and
the Dominion Government has provided rules and regulations for securing
to our citizens the benefit of the reciprocal stipulation that the
citizens or subjects of either power found by that arrangement within
the temporary jurisdiction of the other shall suffer no diminution of
the rights and privileges they have hitherto enjoyed. But however
necessary such an expedient may have been to tide over the grave
emergencies of the situation, it is at best but an unsatisfactory
makeshift, which should not be suffered to delay the speedy and complete
establishment of the frontier line to which we are entitled under the
Russo-American treaty for the cession of Alaska.

In this relation I may refer again to the need of definitely marking the
Alaskan boundary where it follows the one hundred and forty-first
meridian. A convention to that end has been before the Senate for some
two years, but as no action has been taken I contemplate negotiating a
new convention for a joint determination of the meridian by telegraphic
observations. These, it is believed, will give more accurate and
unquestionable results than the sidereal methods heretofore
independently followed, which, as is known, proved discrepant at several
points on the line, although not varying at any place more than 700
feet.

The pending claim of R. H. May against the Guatemalan Government has
been settled by arbitration, Mr. George F. B. Jenner, British minister
at Guatemala, who was chosen as sole arbitrator, having awarded
$143,750.73 in gold to the claimant.

Various American claims against Haiti have been or are being advanced to
the resort of arbitration.

As the result of negotiations with the Government of Honduras in regard
to the indemnity demanded for the murder of Frank H. Pears in Honduras,
that Government has paid $10,000 in settlement of the claim of the
heirs.

The assassination of King Humbert called forth sincere expressions of
sorrow from this Government and people, and occasion was fitly taken to
testify to the Italian nation the high regard here felt for the memory
of the lamented ruler.

In my last message I referred at considerable length to the lynching of
five Italians at Tallulah. Notwithstanding the efforts of the Federal
Government, the production of evidence tending to inculpate the authors
of this grievous offense against our civilization, and the repeated
inquests set on foot by the authorities of the State of Louisiana, no
punishments have followed. Successive grand juries have failed to
indict. The representations of the Italian Government in the face of
this miscarriage have been most temperate and just.

Setting the principle at issue high above all consideration of merely
pecuniary indemnification, such as this Government made in the three
previous cases, Italy has solemnly invoked the pledges of existing
treaty and asked that the justice to which she is entitled shall be
meted in regard to her unfortunate countrymen in our territory with the
same full measure she herself would give to any American were his
reciprocal treaty rights contemned.

I renew the urgent recommendations I made last year that the Congress
appropriately confer upon the Federal courts jurisdiction in this class
of international cases where the ultimate responsibility of the Federal
Government may be involved, and I invite action upon the bills to
accomplish this which were introduced in the Sen. ate and House. It is
incumbent upon us to remedy the statutory omission which has led, and
may again lead, to such untoward results. I have pointed out the
necessity and the precedent for legislation of this character. Its
enactment is a simple measure of previsory justice toward the nations
with which we as a sovereign equal make treaties requiring reciprocal
observance.

While the Italian Government naturally regards such action as the
primary and, indeed, the most essential element in the disposal of the
Tallulah incident, I advise that, in accordance with precedent, and in
view of the improbability of that particular case being reached by the
bill now pending, Congress make gracious provision for indemnity to the
Italian sufferers in the same form and proportion as heretofore.

In my inaugural address I referred to the general subject of lynching in
these words: Lynching must not be tolerated in a great and civilized
country like the United States; courts, not mobs, must execute the
penalties of the law. The preservation of public order, the right of
discussion, the integrity of courts, and the orderly administration of
justice must continue forever the rock of safety upon which our
Government securely rests. This I most urgently reiterate and again
invite the attention of my countrymen to this reproach upon our
civilization.

The closing year has witnessed a decided strengthening of Japan's
relations to other states. The development of her independent judicial
and administrative functions under the treaties which took effect July
17, 1899, has proceeded without international friction, showing the
competence of the Japanese to hold a foremost place among modern
peoples.

In the treatment of the difficult Chinese problems Japan has acted in
harmonious concert with the other powers, and her generous cooperation
materially aided in the joint relief of the beleaguered legations in
Peking and in bringing about an understanding preliminary to a
settlement of the issues between the powers and China. Japan's
declarations in favor of the integrity of the Chinese Empire and the
conservation of open world trade therewith have been frank and positive.
As a factor for promoting the general interests of peace, order, and
fair commerce in the Far East the influence of Japan can hardly be
overestimated.

The valuable aid and kindly courtesies extended by the Japanese
Government and naval officers to the battle ship Oregon are gratefully
appreciated.

Complaint was made last summer of the discriminatory enforcement of a
bubonic quarantine against Japanese on the Pacific coast and of
interference with their travel in California and Colorado under the
health laws of those States. The latter restrictions have been adjudged
by a Federal court to be unconstitutional. No recurrence of either cause
of complaint is apprehended.

No noteworthy incident has occurred in our relations with our important
southern neighbor. Commercial intercourse with Mexico continues to
thrive, and the two Governments neglect no opportunity to foster their
mutual interests in all practicable ways.

Pursuant to the declaration of the Supreme Court that the awards of the
late joint Commission in the La Abra and Weil claims were obtained
through fraud, the sum awarded in the first case, $403,030.08, has been
returned to Mexico, and the amount of the Weil award will be returned in
like manner.

A Convention indefinitely extending the time for the labors of the
United States and Mexican International (Water) Boundary Commission has
been signed.

It is with satisfaction that I am able to announce the formal
notification at The Hague, on September 4, of the deposit of
ratifications of the Convention for the Pacific Settlement of
International Disputes by sixteen powers, namely, the United States,
Austria, Belgium, Denmark, England, France, Germany, Italy, Persia,
Portugal, Roumania, Russia, Siam, Spain, Sweden and Norway, and the
Netherlands. Japan also has since ratified the Convention.

The Administrative Council of the Permanent Court of Arbitration has
been organized and has adopted rules of order and a constitution for the
International Arbitration Bureau. In accordance with Article XXIII of
the Convention providing for the appointment by each signatory power of
persons of known competency in questions of international law as
arbitrators, I have appointed as members of this Court, Hon. Benjamin
Harrison, of Indiana, ex-President of the United States; Hon. Melville
W. Fuller, of Illinois, Chief justice of the United States; Hon. John W.
Griggs, of New Jersey, Attorney General of the United States; and Hon.
George Gray, of Delaware, a judge of the circuit court of the United
States.

As an incident of the brief revolution in the Mosquito district of
Nicaragua early in 1899 the insurgents forcibly collected from American
merchants duties upon imports. On the restoration of order the
Nicaraguan authorities demanded a second payment of such duties on the
ground that they were due to the titular Government and that their
diversion had aided the revolt.

This position was not accepted by us. After prolonged discussion a
compromise was effected under which the amount of the second payments
was deposited with the British consul at San Juan del Norte in trust
until the two Governments should determine whether the first payments
had been made under compulsion to a de facto authority. Agreement as to
this was not reached, and the point was waived by the act of the
Nicaraguan Government in requesting the British consul to return the
deposits to the merchants.

Menacing differences between several of the Central American States have
been accommodated, our ministers rendering good offices toward an
understanding.

The all-important matter of an interoceanic canal has assumed a new
phase. Adhering to its refusal to reopen the question of the forfeiture
of the contract of the Maritime Canal Company, which was terminated for
alleged nonexecution in October, 1899, the Government of Nicaragua has
since supplemented that action by declaring the so styled Eyre-Cragin
option void for nonpayment of the stipulated advance. Protests in
relation to these acts have been filed in the State Department and are
under consideration. Deeming itself relieved from existing engagements,
the Nicaraguan Government shows a disposition to deal freely with the
canal question either in the way of negotiations with the United States
or by taking measures to promote the waterway.

Overtures for a convention to effect the building of a canal under the
auspices of the United States are under consideration. In the meantime,
the views of the Congress upon the general subject, in the light of the
report of the Commission appointed to examine the comparative merits of
the various trans-Isthmian ship-canal projects, may be awaited.

I commend to the early attention of the Senate the Convention with Great
Britain to facilitate the construction of such a canal and to remove any
objection which might arise out of the Convention commonly called the
Clayton-Bulwer Treaty.

The long-standing contention with Portugal, growing out of the seizure
of the Delagoa Bay Railway, has been at last determined by a favorable
award of the tribunal of arbitration at Berne, to which it was
submitted. The amount of the award, which was deposited in London
awaiting arrangements by the Governments of the United States and Great
Britain for its disposal, has recently been paid over to the two
Governments.

A lately signed Convention of Extradition with Peru as amended by the
Senate has been ratified by the Peruvian Congress.

Another illustration of the policy of this Government to refer
international disputes to impartial arbitration is seen in the agreement
reached with Russia to submit the claims on behalf of American sealing
vessels seized in Bering Sea to determination by Mr. T. M. C. Asser, a
distinguished statesman and jurist of the Netherlands.

Thanks are due to the Imperial Russian Government for the kindly aid
rendered by its authorities in eastern Siberia to American missionaries
fleeing from Manchuria.

Satisfactory progress has been made toward the conclusion of a general
treaty of friendship and intercourse with Spain, in replacement of the
old treaty, which passed into abeyance by reason of the late war. A new
convention of extradition is approaching completion, and I should be
much pleased were a commercial arrangement to follow. I feel that we
should not suffer to pass any opportunity to reaffirm the cordial ties
that existed between us and Spain from the time of our earliest
independence, and to enhance the mutual benefits of that commercial
intercourse which is natural between the two countries.

By the terms of the Treaty of Peace the line bounding the ceded
Philippine group in the southwest failed to include several small
islands lying westward of the Sulus, which have always been recognized
as under Spanish control. The occupation of Sibutd and Cagayan Sulu by
our naval forces elicited a claim on the part of Spain, the essential
equity of which could not be gainsaid. In order to cure the defect of
the treaty by removing all possible ground of future misunderstanding
respecting the interpretation of its third article, I directed the
negotiation of a supplementary treaty, which will be forthwith laid
before the Senate, whereby Spain quits all title and claim of title to
the islands named as well as to any and all islands belonging to the
Philippine Archipelago lying outside the lines described in said third
article, and agrees that all such islands shall be comprehended in the
cession of the archipelago as fully as if they had been expressly
included within those lines. In consideration of this cession the United
States is to pay to Spain the sum of $100,000.

A bill is now pending to effect the recommendation made in my last
annual message that appropriate legislation be had to carry into
execution Article VII of the Treaty of Peace with Spain, by which the
United States assumed the payment of certain claims for indemnity of its
citizens against Spain. I ask that action be taken to fulfill this
obligation.

The King of Sweden and Norway has accepted the joint invitation of the
United States, Germany, and Great Britain to arbitrate claims growing
out of losses sustained in the Samoan Islands in the course of military
operations made necessary by the disturbances in 1899.

Our claims upon the Government of the Sultan for reparation for injuries
suffered by American citizens in Armenia and elsewhere give promise of
early and satisfactory settlement. His Majesty's good disposition in
this regard has been evinced by the issuance of an irade for rebuilding
the American college at Harpoot.

The failure of action by the Senate at its last session upon the
commercial conventions then submitted for its consideration and
approval, although caused by the great pressure of other legislative
business, has caused much disappointment to the agricultural and
industrial interests of the country, which hoped to profit by their
provisions. The conventional periods for their ratification having
expired, it became necessary to sign additional articles extending the
time for that purpose. This was requested on our part, and the other
Governments interested have concurred with the exception of one
convention, in respect to which no formal reply has been received.

Since my last communication to the Congress on this subject special
commercial agreements under the third section of the tariff act have
been proclaimed with Portugal, with Italy, and with Germany. Commercial
conventions tinder the general limitations of the fourth section of the
same act have been concluded with Nicaragua, with Ecuador, with the
Dominican Republic, with Great Britain on behalf of the island of
Trinidad, and with Denmark on behalf of the island of St. Croix. These
will be early communicated to the Senate. Negotiations with other
Governments are in progress for the improvement and security of our
commercial relations.

The policy of reciprocity so manifestly rests upon the principles of
international equity and has been so repeatedly approved by the people
of the United States that there ought to be no hesitation in either
branch of the Congress in giving to it full effect.

This Government desires to preserve the most just and amicable
commercial relations with all foreign countries, unmoved by the
industrial rivalries necessarily developed in the expansion of
international trade. It is believed that the foreign Governments
generally entertain the same purpose, although in some instances there
are clamorous demands upon them for legislation specifically hostile to
American interests. Should these demands prevail I shall communicate
with the Congress with the view of advising such legislation as may be
necessary to meet the emergency.

The exposition of the resources and products of the Western Hemisphere
to be held at Buffalo next year promises important results not only for
the United States but for the other participating countries. It is
gratifying that the Latin-American States have evinced the liveliest
interest, and the fact that an International American Congress will be
held in the City of Mexico while the exposition is in progress
encourages the hope of a larger display at Buffalo than might otherwise
be practicable. The work of preparing an exhibit of our national
resources is making satisfactory progress under the direction of
different officials of the Federal Government, and the various States of
the Union have shown a disposition toward the most liberal participation
in the enterprise.

The Bureau of the American Republics continues to discharge, with the
happiest results, the important work of promoting cordial relations
between the United States and the Latin-American countries, all of which
are now active members of the International Union. The Bureau has been
instrumental in bringing about the agreement for another International
American Congress, which is to meet in the City of Mexico in October,
1901. The Bureau's future for another term of ten years is assured by
the international compact, but the congress will doubtless have much to
do with shaping new lines of work and a general policy. Its usefulness
to the interests of Latin-American trade is widely appreciated and shows
a gratifying development.

The practical utility of the consular service in obtaining a wide range
of information as to the industries and commerce of other countries and
the opportunities thereby afforded for introducing the sale of our goods
have kept steadily in advance of the notable expansion of our foreign
trade, and abundant evidence has been furnished, both at home and
abroad, of the fact that the Consular Reports, including many from our
diplomatic representatives, have to a considerable extent pointed out
ways and means of disposing of a great variety of manufactured goods
which otherwise might not have found sale abroad.

Testimony of foreign observers to the commercial efficiency of the
consular corps seems to be conclusive, and our own manufacturers and
exporters highly appreciate the value of the services rendered not only
in the printed reports but also in the individual efforts of consular
officers to promote American trade. An increasing part of the work of
the Bureau of Foreign Commerce, whose primary duty it is to compile and
print the reports, is to answer inquiries from trade organizations,
business houses, etc., as to conditions in various parts of the world,
and, notwithstanding the smallness of the force employed, the work has
been so systematized that responses are made with such promptitude and
accuracy as to elicit flattering encomiums. The experiment of printing
the Consular Reports daily for immediate use by trade bodies, exporters,
and the press, which was begun in January, 1898, continues to give
general satisfaction.

It is gratifying to be able to state that the surplus revenues for the
fiscal year ended June 30, 1900, were $79,527,060.18. For the six
preceding years we had only deficits, the aggregate of which from 1894
to 1899, inclusive, amounted to $283,022,991.14. The receipts for the
year from all sources, exclusive of postal revenues, aggregated
$567,240,851.89, and expenditures for all purposes, except for the
administration of the postal department, aggregated $487,713,791.71. The
receipts from customs were $233,164,871.16, an increase over the
preceding year Of $27,036,389.41. The receipts from internal revenue
were $295,327,926.76, an increase Of $21,890,765.25 over 1899. The
receipts from miscellaneous sources were $38,748,053.97, as against
$36,394,976.92 for the previous year.

It is gratifying also to note that during the year a considerable
reduction is shown in the expenditures of the Government. The War
Department expenditures for the fiscal year 1900 were $134,774,767.78, a
reduction of $95,066,486.69 over those of 1899. In the Navy Department
the expenditures were $55,953,077.72 for the year 1900, as against
$63,942,104.25 for the preceding year, a decrease of $7,989,026.53. In
the expenditures on account of Indians there was a decrease in 1900 over
1899 Of $2,630,604.38; and in the civil and miscellaneous expenses for
1900 there was a reduction Of $13,418,065.74.

Because of the excess of revenues over expenditures the Secretary of the
Treasury was enabled to apply bonds and other securities to the sinking
fund to the amount Of $56,544,556.06. The details of the sinking fund
are set forth in the report of the Secretary of the Treasury, to which I
invite attention. The Secretary of the Treasury estimates that the
receipts for the current fiscal year will aggregate $580,000,000 and the
expenditures $500,000,000, leaving an excess of revenues over
expenditures of $80,000,000. The present condition of the Treasury is
one of undoubted strength. The available cash balance November 30 was
$139,303,794.50. Under the form of statement prior to the financial law
of March 14 last there would have been included in the statement of
available cash gold coin and bullion held for the redemption of United
States notes.

If this form were pursued, the cash balance including the present gold
reserve of $150,000,000, would be $289,303,794.50. Such balance November
30, 1899, was $296,495,301.55. In the general fund, which is wholly
separate from the reserve and trust funds, there was on November 30,
$70,090,073.15 in gold coin and bullion, to which should be added
$22,957,300 in gold certificates subject to issue, against which there
is held in the Division of Redemption gold coin and bullion, making a
total holding of free gold amounting to $93,047,373.15.

It will be the duty as I am sure it will be the disposition of the
Congress to provide whatever further legislation is needed to insure the
continued parity under all conditions between our two forms of metallic
money, silver and gold.

Our surplus revenues have permitted the Secretary of the Treasury since
the close of the fiscal year to call in the funded loan of 1891
continued at 2 per cent, in the sum of $25,364,500. To and including
November 30, $23,458,100 Of these bonds have been paid. This sum,
together with the amount which may accrue from further redemptions under
the call, will be applied to the sinking fund.

The law of March 14, 1900, provided for refunding into 2 per cent
thirty-year bonds, payable, principal and interest, in gold coin of the
present standard value, that portion of the public debt represented by
the 3 per cent bonds of 1908, the 4 percents Of 1907, and the 5 percents
of 1904, Of which there was outstanding at the date of said law
$839,149,930, The holders of the old bonds presented them for exchange
between March 14 and November 30 to the amount of $364,943,750. The net
saving to the Government on these transactions aggregates $9,106,166.

Another effect of the operation, as stated by the Secretary, is to
reduce the charge upon the Treasury for the payment of interest from the
dates of refunding to February 1, 1904, by the sum of more than seven
million dollars annually. From February 1, 1904, to July 1, 11907, the
annual interest charge will be reduced by the sum of more than five
millions, and for the thirteen months ending August 1, 1908, by about
one million. The full details of the refunding are given in the annual
report of the Secretary of the Treasury.

The beneficial effect of the financial act of 1900, so far as it relates
to a modification of the national banking act, is already apparent. The
provision for the incorporation of national banks with a capital of not
less than $25,000 in places not exceeding three thousand inhabitants has
resulted in the extension of banking facilities to many small
communities hitherto unable to provide themselves with banking
institutions under the national system. There were organized from the
enactment of the law up to and including November 30, 369 national
banks, of which 266 were with capital less than $50,000, and 103 with
capital of $50,000 or more.

It is worthy of mention that the greater number of banks being organized
under the new law are in sections where the need of banking facilities
has been most pronounced. Iowa stands first, with 30 banks of the
smaller class, while Texas, Oklahoma, Indian Territory, and the middle
and western sections of the country have also availed themselves largely
of the privileges under the new law.

A large increase in national bank-note circulation has resulted from the
provision of the act which permits national banks to issue circulating
notes to the par value of the United States bonds deposited as security
instead of only go per cent thereof, as heretofore. The increase in
circulating notes from March 14 to November 30 is $77,889,570.

The party in power is committed to such legislation as will better make
the currency responsive to the varying needs of business at all seasons
and in all sections.

Our foreign trade shows a remarkable record of commercial and industrial
progress. The total of imports and exports for the first time in the
history of the country exceeded two billions of dollars. The exports are
greater than they have ever been before, the total for the fiscal year
1900 being $1,394,483,082, an increase over 1899 of $167,459,780, an
increase over 1898 of $163,000,752, over 1897 Of $343,489,526, and
greater than 1896 by $511,876,144.

The growth of manufactures in the United States is evidenced by the fact
that exports of manufactured products largely exceed those of any
previous year, their value for 1900 being $433,851,756, against
$339,592,146 in 1899, an increase of 28 per cent.

Agricultural products were also exported during 1900 in greater volume
than in 1899, the total for the year being $835,858,123, against
$784,776,142 in 1899.

The imports for the year amounted to $849,941,184, an increase over 1899
of $152,792,695. This increase is largely in materials for manufacture,
and is in response to the rapid development of manufacturing in the
United States. While there was imported for use in manufactures in 1900
material to the value of $79,768,972 in excess of 1899, it is reassuring
to observe that there is a tendency toward decrease in the importation
of articles manufactured ready for consumption, which in 1900 formed
15.17 per cent of the total imports, against 15.54 per cent in 1899 and
21.09 per cent in 1896.

I recommend that the Congress at its present session reduce the
internal-revenue taxes imposed to meet the expenses of the war with
Spain. in the sum of thirty millions of dollars. This reduction should
be secured by the remission of those taxes which experience has shown to
be the most burdensome to the industries of the people.

I specially urge that there be included in whatever reduction is made
the legacy tax on bequests for public uses of a literary, educational,
or charitable character.

American vessels during the past three years have carried about 9 per
cent of our exports and imports. Foreign ships should carry the least,
not the greatest, part of American trade. The remarkable growth of our
steel industries, the progress of shipbuilding for the domestic trade,
and our steadily maintained expenditures for the Navy have created an
opportunity to place the United States in the first rank of commercial
maritime powers.

Besides realizing a proper national aspiration this will mean the
establishment and healthy growth along all our coasts of a distinctive
national industry, expanding the field for the profitable employment of
labor and capital. It will increase the transportation facilities and
reduce freight charges on the vast volume of products brought from the
interior to the seaboard for export, and will strengthen an arm of the
national defense upon which the founders of the Government and their
successors have relied. In again urging immediate action by the Congress
on measures to promote American shipping and foreign trade, I direct
attention to the recommendations on the subject in previous messages,
and particularly to the opinion expressed in the message of 1899: I am
satisfied the judgment of the country favors the policy of aid to our
merchant marine, which will broaden our commerce and markets and upbuild
our sea-carrying capacity for the products of agriculture and
manufacture, which, with the increase of our Navy, mean more work and
wages to our countrymen, as well as a safeguard to American interests in
every part of the world. The attention of the Congress is invited to the
recommendation of the Secretary of the Treasury in his annual report for
legislation in behalf of the Revenue-Cutter Service, and favorable
action is urged.

In my last annual message to the Congress I called attention to the
necessity for early action to remedy such evils as might be found to
exist in connection with combinations of capital organized into trusts,
and again invite attention to my discussion of the subject at that time,
which concluded with these words: It is apparent that uniformity of
legislation upon this subject in the several States is much to be
desired. It is to be hoped that such uniformity, founded in a wise and
just discrimination between what is injurious and what is useful and
necessary in business operations, may be obtained, and that means may be
found for the Congress, within the limitations of its constitutional
power, so to supplement an effective code of State legislation as to
make a complete system of laws throughout the United States adequate to
compel a general observance of the salutary rules to which I have
referred.

The whole question is so important and far-reaching that I am sure no
part of it will be lightly considered, but every phase of it will have
the studied deliberation of the Congress, resulting in wise and
judicious action. Restraint upon such combinations as are injurious, and
which are within Federal jurisdiction, should be promptly applied by the
Congress.

In my last annual message I dwelt at some length upon the condition of
affairs in the Philippines. While seeking to impress upon you that the
grave responsibility of the future government of those islands rests
with the Congress of the United States, I abstained from recommending at
that time a specific and final form of government for the territory
actually held by the United States forces and in which as long as
insurrection continues the military arm must necessarily be supreme. I
stated my purpose, until the Congress shall have made the formal
expression of its will, to use the authority vested in me by the
Constitution and the statutes to uphold the sovereignty of the United
States in those distant islands as in all other places where our flag
rightfully floats, placing, to that end, at the disposal of the army and
navy all the means which the liberality of the Congress and the people
have provided. No contrary expression of the will of the Congress having
been made, I have steadfastly pursued the purpose so declared, employing
the civil arm as well toward the accomplishment of pacification and the
institution of local governments within the lines of authority and law.

Progress in the hoped-for direction has been favorable. Our forces have
successfully controlled the greater part of the islands, overcoming the
organized forces of the insurgents and carrying order and administrative
regularity to all quarters. What opposition remains is for the most part
scattered, obeying no concerted plan of strategic action, operating only
by the methods common to the traditions of guerrilla warfare, which,
while ineffective to alter the general control now established, are
still sufficient to beget insecurity among the populations that have
felt the good results of our control and thus delay the conferment upon
them of the fuller measures of local self-government, of education, and
of industrial and agricultural development which we stand ready to give
to them.

By the spring of this year the effective opposition of the dissatisfied
Tagals to the authority of the United States was virtually ended, thus
opening the door for the extension of a stable administration over much
of the territory of the Archipelago. Desiring to bring this about, I
appointed in March last a civil Commission composed of the Hon. William
H. Taft, of Ohio; Prof. Dean C. Worcester, of Michigan; the Hon. Luke I.
Wright, of Tennessee; the Hon. Henry C. Ide, of Vermont, and Prof.
Bernard Moses, of California. The aims of their mission and the scope of
their authority are clearly set forth in my instructions of April 7,
1900, addressed to the Secretary of War to be transmitted to them:

In the message transmitted to the Congress on the 5th of December, 1899,
I said, speaking of the Philippine Islands: "As long as the insurrection
continues the military arm must necessarily be supreme. But there is no
reason why steps should not be taken from time to time to inaugurate
governments essentially popular in their form as fast as territory is
held and controlled by our troops. To this end I am considering the
advisability of the return of the Commission, or such of the members
thereof as can be secured, to aid the existing authorities and
facilitate this work throughout the islands."

To give effect to the intention thus expressed, I have appointed Hon.
William H. Taft, of Ohio; Prof. Dean C. Worcester, of Michigan; Non.
Luke I. Wright, of Tennessee; Hon. Henry C. Ide, of Vermont, and Prof.
Bernard Moses, of California, Commissioners to the Philippine Islands to
continue and perfect the work of organizing and establishing civil
government already commenced by the military authorities, subject in all
respects to any laws which Congress may hereafter enact.

The Commissioners named will meet and act as a board, and the Hon.
William H. Taft t is designated as president of the board. It is
probable that the transfer of authority from military commanders to
civil officers will be gradual and will occupy a considerable period.
Its successful accomplishment and the maintenance of peace and order in
the meantime will require the most perfect co-operation between the
civil and military authorities in the islands, and both should be
directed during the transition period by the same Executive Department.
The Commission will therefore report to the Secretary of War, and all
their action will be subject to your approval and control.

You will instruct the Commission to proceed to the city of Manila, where
they will make their principal office, and to communicate with the
Military Governor of the Philippine Islands, whom you will at the same
time direct to render to them every assistance within his power in the
performance of their duties. Without hampering them by too specific
instructions, they should in general be enjoined, after making
themselves familiar with the conditions and needs of the country, to
devote their attention in the first instance to the establishment of
municipal governments, in which the natives of the islands, both in the
cities and in the rural communities, shall be afforded the opportunity
to manage their own local affairs to the fullest extent of which they
are capable and subject to the least degree of supervision and control
which a careful study of their capacities and observation of the
workings of native control show to be consistent with the maintenance of
law, order, and loyalty.

The next subject in order of importance should be the organization of
government in the larger administrative divisions corresponding to
counties, departments, or provinces, in which the common interests of
many or several municipalities falling within the same tribal lines, or
the same natural geographical limits, may best be subserved by a common
administration. Whenever the Commission is of the opinion that the
condition of affairs in the islands is such that the central
administration may safely be transferred from military to civil control
they will report that conclusion to you, with their recommendations as
to the form of central government to be established for the purpose of
taking over the control.

Beginning with the 1st day of September, 1900, the authority to
exercise, subject to my approval, through the Secretary of War, that
part of the power of government in the Philippine Islands which is of a
legislative nature is to be transferred from the Military Governor of
the islands to this Commission, to be thereafter exercised by them in
the place and stead of the Military Governor, under such rules and
regulations as you shall prescribe, until the establishment of the civil
central government for the islands contemplated in the last foregoing
paragraph, or until Congress shall otherwise provide. Exercise of this
legislative authority will include the making of rules and orders,
having the effect of law, for the raising of revenue by taxes, customs
duties, and imposts; the appropriation and expenditure of public funds
of the islands; the establishment of an educational system throughout
the islands; the establishment of a system to secure an efficient civil
service; the organization and establishment of courts; the organization
and establishment of municipal and departmental governments, and all
other matters of a civil nature for which the Military Governor is now
competent to provide by rules or orders of a legislative character.

The Commission will also have power during the same period to appoint to
office such officers under the judicial, educational, and civil-service
systems and in the municipal and departmental governments as shall be
provided for. Until the complete transfer of control the Military
Governor will remain the chief executive head of the government of the
islands, and will exercise the executive authority now possessed by him
and not herein expressly assigned to the Commission, subject, however,
to the rules and orders enacted by the Commission in the exercise of the
legislative powers conferred upon them. In the meantime the municipal
and departmental governments will continue to report to the Military
Governor and be subject to his administrative supervision and control,
under your direction, but that supervision and control will be confined
within the narrowest limits consistent with the requirement that the
powers of government in the municipalities and departments shall be
honestly and effectively exercised and that law and order and individual
freedom shall be maintained.

All legislative rules and orders, establishments of government, and
appointments to office by the Commission will take effect immediately,
or at such times as they shall designate, subject to your approval and
action upon the coming in of the Commission's reports, which are to be
made from time to time as their action is taken. Wherever civil
governments are constituted under the direction of the Commission such
military posts, garrisons, and forces will be continued for the
suppression of insurrection and brigandage and the maintenance of law
and order as the Military Commander shall deem requisite, and the
military forces shall be at all times subject, under his orders, to the
call of the civil authorities for the maintenance of law and order and
the enforcement of their authority.

In the establishment of municipal governments the Commission will take
as the basis of their work the governments established by the Military
Governor under his order of August 8, 1899. and under the report of the
board constituted by the Military Governor by his order of January 29,
1900, to formulate and report a plan of municipal government, of which
His Honor Cayetano Arellano, President of the Audiencia, was chairman,
and they will give to the conclusions of that board the weight and
consideration which the high character and distinguished abilities of
its members justify.

In the constitution of departmental or provincial governments they will
give especial attention to the existing government of the island of
Negros, constituted, with the approval of the people of that island,
under the order of the Military Governor of July 22, 1899, and after
verifying, so far as may be practicable, the reports of the successful
working of that government they will be guided by the experience thus
acquired so far as it may be applicable to the condition existing in
other portions of the Philippines. They will avail themselves, to the
fullest degree practicable, of the conclusions reached by the previous
Commission to the Philippines.

In the distribution of powers among the governments organized by the
Commission, the presumption is always to be in favor of the smaller
subdivision, so that all the powers which can properly be exercised by
the municipal government shall be vested in that government, and all the
powers of a more general character which can be exercised by the
departmental government shall be vested in that government, and so that
in the governmental system, which is the result of the process, the
central government of the islands, following the example of the
distribution of the powers between the States and the National
Government of the United States, shall have no direct administration
except of matters of purely general concern, and shall have only such
supervision and control over local governments as may be necessary to
secure and enforce faithful and efficient administration by local
officers.

The many Different degrees of civilization and varieties of custom and
capacity among the people of the different islands preclude very
definite instruction as to the part which the people shall take in the
selection of their own officers; but these general rules are to be
observed: That in all cases the municipal officers, who administer the
local affairs of the people, are to be selected by the people, and that
wherever officers of more extended jurisdiction are to be selected in
any way, natives of the islands are to be preferred, and if they can be
found competent and willing to perform the duties, they are to receive
the offices in preference to any others.

It will be necessary to fill some offices for the present with Americans
which after a time may well be filled by natives of the islands. As soon
as practicable a system for ascertaining the merit and fitness of
candidates for civil office should be put in force. An indispensable
qualification for all offices and positions of trust and authority in
the islands must be absolute and unconditional loyalty to the United
States, and absolute and unhampered authority and power to remove and
punish any officer deviating from that standard must at all times be
retained in the hands of the central authority of the islands.

In all the forms of government and administrative provisions which they
are authorized to prescribe the Commission should bear in mind that the
government which they are establishing is designed not for our
satisfaction, or for the expression of our theoretical views, but for
the happiness, peace, and prosperity of the people of the Philippine
Islands, and the measures adopted should be made to conform to their
customs, their habits, and even heir prejudices, to the fullest extent
consistent with the accomplishment of the Indispensable requisites of
just and effective government.

At the same time the Commission should bear in mind, and the people of
the islands should be made plainly to understand, that there are certain
great principles of government which have been made the basis of our
governmental system which we deem essential to the rule of law and the
maintenance of individual freedom, and of which they have,
unfortunately, been denied the experience possessed by us; that there
are also certain practical rules of government which we have found to be
essential to the preservation of these great principles of liberty and
law, and that these principles and these rules of government must be
established and maintained in their islands for the sake of their
liberty and happiness, however much they may conflict with the customs
or laws of procedure with which they are familiar.

It is evident that the most enlightened thought of the Philippine
Islands fully appreciates the importance of these principles and rules,
and they will inevitably within a short time command universal assent.
Upon every division and branch of the government of the Philippines,
therefore, must be imposed these inviolable rules:

That no person shall be deprived of life, liberty, or property without
due process of law; that private property shall not be taken for public
use without just compensation; that in all criminal prosecutions the
accused shall enjoy the right to a speedy and public trial, to be
informed of the nature and cause of the accusation, to be confronted
with the witnesses against him, to have compulsory process for obtaining
witnesses in his favor, and to have the assistance of counsel for his
defense; that excessive bail shall not be required, nor excessive fines
imposed, nor cruel and unusual punishment inflicted; that no person
shall be put twice in jeopardy for the same offense, or be compelled in
any criminal case to be a witness against himself; that the right to be
secure against unreasonable searches and seizures shall not be violated;
that neither slavery nor involuntary servitude shall exist except as a
punishment for crime; that no bill of attainder or ex-post facto law
shall be passed; that no law shall be passed abridging the freedom of
speech or of the press, or the rights of the people to peaceably
assemble and petition the Government for a redress of grievances; that
no law shall be made respecting an establishment of religion, or
prohibiting the free exercise thereof, and that the free exercise and
enjoyment of religious profession and worship without discrimination or
preference shall forever be allowed.

It will be the duty of the Commission to make a thorough investigation
into the titles to the large tracts of land held or claimed by
individuals or by religious orders; into the justice of the claims and
complaints made against such landholders by the people of the island or
any part of the people, and to seek by wise and peaceable measures a
just settlement of the controversies and redress of wrongs which have
caused strife and bloodshed in the past. In the performance of this duty
the Commission is enjoined to see that no injustice is done; to have
regard for substantial rights and equity, disregarding technicalities so
far as substantial right permits, and to observe the following rules:

That the provision of the Treaty of Paris pledging the United States to
the protection of all rights of property in the islands, and as well the
principle of our own Government which prohibits the taking of private
property without due process of law, shall not be violated; that the
welfare of the people of the islands, which should be a paramount
consideration, shall be attained consistently with this rule of property
right; that if it becomes necessary for the public interest of the
people of the islands to dispose of claims to property which the
Commission finds to be not lawfully acquired and held disposition shall
be made thereof by due legal procedure, in which there shall be full
opportunity for fair and impartial hearing and judgment; that if the
same public interests require the extinguishment of property rights
lawfully acquired and held due compensation shall be made out of the
public treasury therefore; that no form of religion and no minister of
religion shall be forced upon any community or upon any citizen of the
islands; that, upon the other hand, no minister of religion shall be
interfered with or molested in following his calling, and that the
separation between State and Church shall be real, entire, and absolute.

It will be the duty of the Commission to promote and extend, and, as
they find occasion, to improve the system of education already
inaugurated by the military authorities. In doing this they should
regard as of first importance the extension of a system of primary
education which shall be free to all, and which shall tend to fit the
people for the duties of citizenship and for the ordinary avocations of
a civilized community. This instruction should be given in the first
instance in every part of the islands in the language of the people. In
view of the great number of languages spoken by the different tribes, it
is especially important to the prosperity of the islands that a common
medium of communication may be established, and it is obviously
desirable that this medium should be the English language. Especial
attention should be at once given to affording full opportunity to all
the people of the islands to acquire the use of the English language.

It may be well that the main changes which should be made in the system
of taxation and in the body of the laws under which the people are
governed, except such changes as have already been made by the military
government, should be relegated to the civil government which is to be
established under the auspices of the Commission. It will, however, be
the duty of the Commission to inquire diligently as to whether there are
any further changes which ought not to be delayed, and if so, they are
authorized to make such changes subject to your approval. In doing so
they are to bear in mind that taxes which tend 6 penalize or repress
industry and enterprise are to be avoided; that provisions for taxation
should be simple, so that they may be understood by the people; that
they should affect the fewest practicable subjects of taxation which
will serve for the general distribution of the burden.

The main body of the laws which regulate the rights and obligations of
the people should be maintained with as little interference as possible.
Changes made should be mainly in procedure, and in the criminal laws to
secure speedy and impartial trials, and at the same time effective
administration and respect for individual rights.

In dealing with the uncivilized tribes of the islands the Commission
should adopt the same course followed by Congress in permitting the
tribes of our North American Indians to maintain their tribal
organization and government, and under which many of those tribes are
now living in peace and contentment, surrounded by a civilization to
which they are unable or unwilling to conform. Such tribal governments
should, however, be subjected to wise and firm regulation, and, without
undue or petty interference, constant and active effort should be
exercised to prevent barbarous practices and introduce civilized
customs.

Upon all officers and employees of the United States, both civil and
military, should be impressed a sense of the duty to observe not merely
the material but the personal and social rights of the people of the
islands, and to treat them with the same courtesy and respect for their
personal dignity which the people of the United States are accustomed W
require from each other.

The articles of capitulation of the city of Manila on the 13th of
August, 1898, concluded with these words:

"This city, its inhabitants, its churches and religious worship, its
educational establishments, and its private property of all
descriptions, are placed under the special safeguard of the faith and
honor of the American Army."

I believe that this pledge has been faithfully kept. As high and sacred
an obligation rests upon the Government of the United States to give
protection for property and life, civil and religious freedom, and wise,
firm, and unselfish guidance in the paths of peace and prosperity to all
the people of the Philippine Islands. I charge this Commission to labor
for the full performance of this obligation, which concerns the honor
and conscience of their country, in the firm hope that through their
labors all the inhabitants of the Philippine Islands may come to look
back with gratitude to the day when God gave victory to American arms at
Manila and set their land under the sovereignty and the protection of
the people of the United States.

Coincidently with the entrance of the Commission upon its labors I
caused to be issued by General MacArthur, the Military Governor of the
Philippines, on June 21, 1900, a proclamation of amnesty in generous
terms, of which many of the insurgents took advantage, among them a
number of important leaders.

This Commission, composed of eminent citizens representing the diverse
geographical and political interests of the country, and bringing to
their task the ripe fruits of long and intelligent service in
educational, administrative, and judicial careers, made great progress
from the outset. As early as August 21, 1900, it submitted a preliminary
report, which will be laid before the Congress, and from which it
appears that already the good effects of returning order are felt; that
business, interrupted by hostilities, is improving as peace extends;
that a larger area is under sugar cultivation than ever before; that the
customs revenues are greater than at any time during the Spanish rule;
that economy and efficiency in the military administration have created
a surplus fund of $6,000,000, available for needed public improvements;
that a stringent civil-service law is in preparation; that railroad
communications are expanding, opening up rich districts, and that a
comprehensive scheme of education is being organized.

Later reports from the Commission show yet more encouraging advance
toward insuring the benefits of liberty and good government to the
Filipinos, in the interest of humanity and with the aim of building up
an enduring, self-supporting, and self-administering community in those
far eastern seas. I would impress upon the Congress that whatever
legislation may be enacted in respect to the Philippine Islands should
be along these generous lines. The fortune of war has thrown upon this
nation an unsought trust which should be unselfishly discharged, and
devolved upon this Government a moral as well as material responsibility
toward these millions whom we have freed from an oppressive yoke.

I have on another occasion called the Filipinos the wards of the nation.
Our obligation as guardian was not lightly assumed; it must not be
otherwise than honestly fulfilled, aiming first of all to benefit those
who have come under our fostering care. It is our duty so to treat them
that our flag may be no less beloved in the mountains of Luzon and the
fertile zones of Mindanao and Negros than it is at home, that there as
here it shall be the revered symbol of liberty, enlightenment, and
progress in every avenue of development.

The Filipinos are a race quick to learn and to profit by knowledge He
would be rash who, with the teachings of contemporaneous history in
view, would fix a limit to the degree of culture and advancement yet
within the reach of these people if our duty toward them be faithfully
performed.

The civil government of Puerto Rico provided for by the act of the
Congress approved April 12, 1900 is in successful operation The courts
have been established. The Governor and his associates, working
intelligently and harmoniously, are meeting with Commendable success.

On the 6th of November a general election was held in the island for
members of the Legislature, and the body elected has been called to
convene on the first Monday of December.

I recommend that legislation be enacted by the Congress conferring upon
the Secretary of the Interior supervision over the public lands in
Puerto Rico, and that he be directed to ascertain the location and
quantity of lands the title to which remained in the Crown of Spain at
the date of cession of Puerto Rico to the United States, and that
appropriations necessary for surveys be made, and that the methods of
the disposition of such lands be prescribed by law.

On the 25th of July, 1900, I directed that a call be issued for an
election in Cuba for members of a constitutional convention to frame a
constitution as a basis for a stable and independent government in the
island. In pursuance thereof the Military Governor issued the following
instructions: Whereas the Congress of the United States, by its joint
resolution of April 20, 1898, declared:

"That the people of the island of Cuba are, and of right ought to be,
free and independent.

"That the United States hereby disclaims any disposition or intention to
exercise sovereignty, jurisdiction, or control over said island except
for the pacification thereof, and asserts its determination, when that
is accomplished, to leave the government and control of the island to
its people;"

And whereas, the people of Cuba have established municipal governments,
deriving their authority from the suffrages of the people given under
just and equal laws, and are now ready, in like manner, to proceed to
the establishment of a general government which shall assume and
exercise sovereignty, jurisdiction, and control over the island:

Therefore, it is ordered that a general election be held in the island
of Cuba on the third Saturday of September, in the year nineteen
hundred, to elect delegates to a convention to meet in the city of
Havana at twelve o'clock noon on the first Monday of November, in the
year nineteen hundred, to frame and adopt a constitution for the people
of Cuba, and as a part thereof to provide for and agree with the
Government of the United States upon the relations to exist between that
Government and the Government of Cuba, and to provide for the election
by the people of officers under such constitution and the transfer of
government to the officers so elected.

The election will be held in the several voting precincts of the island
under, and pursuant to, the provisions of the electoral law of April 18,
1900, and the amendments thereof. The election was held on the 15th of
September, and the convention assembled on the 5th of November, 1900,
and is now in session.

In calling the convention to order, the Military Governor of Cuba made
the following statement: As Military Governor of the island,
representing the President of the United States, I call this convention
to order.

It will be your duty, first, to frame and adopt a constitution for Cuba,
and when that has been done to formulate what in your opinion ought to
be the relations between Cuba and the United States.

The constitution must be adequate to secure a stable, orderly, and free
government.

When you have formulated the relations which in your opinion ought to
exist between Cuba and the United States the Government of the United
States will doubtless take such action on its part as shall lead to a
final and authoritative agreement between the people of the two
countries to the promotion of their common interests.

All friends of Cuba will follow your deliberations with the deepest
interest, earnestly desiring that you shall reach just conclusions, and
that by the dignity, individual self-restraint, and wise conservatism
which shall characterize your proceedings the capacity of the Cuban
people for representative government may be signally illustrated.

The fundamental distinction between true representative government and
dictatorship is that in the former every representative of the people,
in whatever office, confines himself strictly within the limits of his
defined powers. Without such restraint there can be no free
constitutional government.

Under the order pursuant to which you have been elected and convened you
have no duty and no authority to take part in the present government of
the island. Your powers are strictly limited by the terms of that order.
When the convention concludes its labors I will transmit to the Congress
the constitution as framed by the convention for its consideration and
for such action as it may deem advisable.

I renew the recommendation made in my special message of February 10,
1899, as to the necessity for cable communication between the United
States and Hawaii, with extension to Manila. Since then circumstances
have strikingly emphasized this need. Surveys have shown the entire
feasibility of a chain of cables which at each stopping place shall
touch on American territory, so that the system shall be under our own
complete control. Manila once within telegraphic reach, connection with
the systems of the Asiatic coast would open increased and profitable
opportunities for a more direct cable route from our shores to the
Orient than is now afforded by the trans-Atlantic, continental, and
trans-Asian lines. I urge attention to this important matter.

The present strength of the Army is 100,000 men--65,000 regulars and
35,000 volunteers. Under the act of March 2, 1899, on the 30th of June
next the present volunteer force will be discharged and the Regular Army
will be reduced to 2,447 officers and 29,025 enlisted men.

In 1888 a Board of Officers convened by President Cleveland adopted a
comprehensive scheme of coast-defense fortifications which involved the
outlay of something over one hundred million dollars. This plan received
the approval of the Congress, and since then regular appropriations have
been made and the work of fortification has steadily progressed.

More than sixty millions of dollars have been invested in a great number
of forts and guns, with all the complicated and scientific machinery and
electrical appliances necessary for their use. The proper care of this
defensive machinery requires men trained in its use. The number of men
necessary to perform this duty alone is ascertained by the War
Department, at a minimum allowance, to be 18,420.

There are fifty-eight or more military posts in the United States other
than the coast-defense fortifications.

The number of these posts is being constantly increased by the Congress.
More than $22,000,000 have been expended in building and equipment, and
they can only be cared for by the Regular Army. The posts now in
existence and others to be built provide for accommodations for, and if
fully garrisoned require, 26,000 troops. Many of these posts are along
our frontier or at important strategic points, the occupation of which
is necessary.

We have in Cuba between 5,000 and 6,000 troops. For the present our
troops in that island cannot be withdrawn or materially diminished, and
certainly not until the conclusion of the labors of the constitutional
convention now in session and a government provided by the new
constitution shall have been established and its stability assured.

In Puerto Rico we have reduced the garrisons to 1,636, which includes
879 native troops. There is no room for further reduction here.

We will be required to keep a considerable force in the Philippine
Islands for some time to come. From the best information obtainable we
will need there for the immediate future from 45,000 to 60,000 men. I am
sure the number may be reduced as the insurgents shall come to
acknowledge the authority of the United States, of which there are
assuring indications.

It must be apparent that we will require an army of about 60,000, and
that during present conditions in Cuba and the Philippines the President
should have authority to increase the force to the present number of
100,000. Included in this number authority should be given to raise
native troops in the Philippines up to 15,000, which the Taft Commission
believe will be more effective in detecting and suppressing guerrillas,
assassins, and ladrones than our own soldiers.

The full discussion of this subject by the Secretary of War in his
annual report is called to your earnest attention.

I renew the recommendation made in my last annual message that the
Congress provide a special medal of honor for the volunteers, regulars,
sailors, and marines on duty in the Philippines who voluntarily remained
in the service after their terms of enlistment had expired.

I favor the recommendation of the Secretary of War for the detail oil
officers from the line of the Army when vacancies occur in the
Adjutant-General's Department, Inspector-General's Department,
Quartermaster's Department, Subsistence Department, Pay Department,
Ordnance Department, and Signal Corps.

The Army cannot be too highly commended for its faithful and effective
service in active military operations in the field and the difficult
work of civil administration.

The continued and rapid growth of the postal service is a sure index of
the great and increasing business activity of the country. Its most
striking new development is the extension of rural free delivery. This
has come almost wholly within the last year. At the beginning of the
fiscal year 1899, 1900 the number of routes in operation was only 391,
and most of these had been running less than twelve months. On the 15th
of November, 1900, the number had increased to 2,614, reaching into
forty-four States and Territories, and serving a population of
1,801,524. The number of applications now pending and awaiting action
nearly equals all those granted up to the present time, and by the close
of the current fiscal year about 4,000 routes will have been
established, providing for the daily delivery of mails at the scattered
homes of about three and a half millions of rural population.

This service ameliorates the isolation of farm life, conduces to good
roads, and quickens and extends the dissemination of general
information. Experience thus far has tended to allay the apprehension
that it would be so expensive as to forbid its general adoption or make
it a serious burden. Its actual application has shown that it increases
postal receipts, and can be accompanied by reductions in other branches
of the service, so that the augmented revenues and the accomplished
savings together materially reduce the net cost. The evidences which
point to these conclusions are presented in detail in the annual report
of the Postmaster-General, which with its recommendations is commended
to the consideration of the Congress. The full development of this
special service, however, requires such a large outlay of money that it
should be undertaken only after a careful study and thorough
understanding of all that it involves.

Very efficient service has been rendered by the Navy in connection with
the insurrection in the Philippines and the recent disturbance in China.

A very satisfactory settlement has been made of the long-pending
question of the manufacture of armor plate. A reasonable price has been
secured and the necessity for a Government armor plant avoided.

I approve of the recommendations of the Secretary for new vessels and
for additional officers and men which the required increase of the Navy
makes necessary. I commend to the favorable action of the Congress the
measure now pending for the erection of a statue to the memory of the
late Admiral David D. Porter. I commend also the establishment of a
national naval reserve and of the grade of vice-admiral. Provision
should be made, as recommended by the Secretary, for suitable rewards
for special merit. Many officers who rendered the most distinguished
service during the recent war with Spain have received in return no
recognition from the Congress.

The total area of public lands as given by the Secretary of the Interior
is approximately 1,071,881,662 acres, of which 917,135,880 acres are
undisposed of and 154,745,782 acres have been reserved for various
purposes. The public lands disposed of during the year amount to
13,453,887.96 acres, including 62,423.09 acres of Indian lands, an
increase Of 4,271,474.80 over the preceding year. The total receipts
from the sale of public lands during the fiscal year were $4,379,758.10,
an increase of $1,309,620.76 over the preceding year.

The results obtained from our forest policy have demonstrated its wisdom
and the necessity in the interest of the public for its continuance and
increased appropriations by the Congress for the carrying on of the
work. On June 30, 1900, there were thirty-seven forest reserves, created
by Presidential proclamations under section 24 Of the act of March 3,
1891, embracing an area Of 46,425,529 acres.

During the past year the Olympic Reserve, in the State of Washington,
was reduced 265,040 acres, leaving its present area at 1,923,840 acres.
The Prescott Reserve, in Arizona, was increased from 10,240 acres to
423,680 acres, and the Big Horn Reserve, in Wyoming, was increased from
1,127,680 acres to 1,180,800 acres. A new reserve; the Santa Ynez, in
California, embracing an area of 145,000 acres, was created during this
year. On October 10, 1900, the Crow Creek Forest Reserve, in Wyoming,
was created, with an area of 56,320 acres.

At the end of the fiscal year there were on the pension roll 993,529
names, a net increase Of 2,010 over the fiscal year 1899. The number
added to the rolls during the year was 45,344. The amount disbursed for
Army pensions during the year was $134,700,597.24 and for Navy pensions
$3,761,533.41, a total of $138,462,130.65, leaving an unexpended balance
of $5,542,768.25 to be covered into the Treasury, which shows an
increase over the previous year's expenditure Of $107,077.70. There were
684 names added to the rolls during the year by special acts passed at
the first session of the Fifty-sixth Congress.

The act of May 9, 1900, among other things provides for an extension of
income to widows pensioned under said act to $250 per annum. The
Secretary of the Interior believes that by the operations of this act
the number of persons pensioned under it will increase and the increased
annual payment for pensions will be between $3,000,000 and $4,000,000.

The Government justly appreciates the services of its soldiers and
sailors by making pension payments liberal beyond precedent to them,
their widows and orphans.

There were 26,540 letters patent granted, including reissues and
designs, during the fiscal year ended June 30, 1900; 1,660 trademarks,
682 labels, and 93 prints registered. The number of patents which
expired was 19,988. The total receipts for patents were $1,358,228.35.
The expenditures were $1,247,827.58, showing a surplus Of $110,400.77

The attention of the Congress is called to the report of the Secretary
of the Interior touching the necessity for the further establishment of
schools in the Territory of Alaska, and favorable action is invited
thereon.

Much interesting information is given in the report of the Governor of
Hawaii as to the progress and development of the islands during the
period from July 7, 1898, the date of the approval of the joint
resolution of the Congress providing for their annexation, up to April
30, 1900, the date of the approval of the act providing a government for
the Territory, and thereafter.

The last Hawaiian census, taken in the year 1896, gives a total
population of 109,020, Of Which 31,019 were native Hawaiians. The number
of Americans reported was 8,485. The results of the Federal census,
taken this year, show the islands to have a total population Of 154,001,
showing an increase over that reported in 1896 of 44,981, or 41.2 per
cent.

There has been marked progress in the educational, agricultural, and
railroad development of the islands.

In the Territorial act of April 30, 1900, section 7 of said act repeals
Chapter 34 Of the Civil Laws of Hawaii whereby the Government was to
assist in encouraging and developing the agricultural resources of the
Republic, especially irrigation. The Governor of Hawaii recommends
legislation looking to the development of such water supply as may exist
on the public lands, with a view of promoting land settlement. The
earnest consideration of the Congress is invited to this important
recommendation and others, as embodied in the report of the Secretary of
the Interior.

The Director of the Census states that the work in connection with the
Twelfth Census is progressing favorably. This national undertaking,
ordered by the Congress each decade, has finally resulted in the
collection of an aggregation of statistical facts to determine the
industrial growth of the country, its manufacturing and mechanical
resources, its richness in mines and forests, the number of its
agriculturists, their farms and products, its educational and religious
opportunities, as well as questions pertaining to sociological
conditions.

The labors of the officials in charge of the Bureau indicate that the
four important and most desired subjects, namely, population,
agricultural, manufacturing, and vital statistics, will be completed
within the limit prescribed by the law of March 3, 1899.

The field work incident to the above inquiries is now practically
finished, and as a result the population of the States and Territories,
including the Hawaiian Islands and Alaska, has been announced. The
growth of population during the last decade amounts to over 13,000,000,
a greater numerical increase than in any previous census in the history
of the country.

Bulletins will be issued as rapidly as possible giving the population by
States and Territories, by minor civil divisions. Several announcements
of this kind have already been made, and it is hoped that the list will
be completed by January 1. Other bulletins giving the results of the
manufacturing and agricultural inquiries will be given to the public as
rapidly as circumstances will admit.

The Director, while confident of his ability to complete the different
branches of the undertaking in the allotted time, finds himself
embarrassed by the lack of a trained force properly equipped for
statistical work, thus raising the question whether in the interest of
economy and a thorough execution of the census work there should not be
retained in the Government employ a certain number of experts not only
to aid in the preliminary organization prior to the taking of the
decennial census, but in addition to have the advantage in the field and
office work of the Bureau of trained assistants to facilitate the early
completion of this enormous undertaking.

I recommend that the Congress at its present session apportion
representation among the several States as provided by the Constitution.

The Department of Agriculture has been extending its work during the
past year, reaching farther for new varieties of seeds and plants;
co-operating more fully with the States and Territories in research
along useful lines; making progress in meteorological work relating to
lines of wireless telegraphy and forecasts for ocean-going vessels;
continuing inquiry as to animal disease; looking into the extent and
character of food adulteration; outlining plans for the care,
preservation, and intelligent harvesting of our woodlands; studying
soils that producers may cultivate with better knowledge of conditions,
and helping to clothe desert places with grasses suitable to our and
regions. Our island possessions are being considered that their peoples
may be helped to produce the tropical products now so extensively
brought into the United States. Inquiry into methods of improving our
roads has been active during the year; help has been given to many
localities, and scientific investigation of material in the States and
Territories has been inaugurated. Irrigation problems in our semiarid
regions are receiving careful and increased consideration.

An extensive exhibit at Paris of the products of agriculture has made
the peoples of many countries more familiar with the varied products of
our fields and their comparative excellence.

The collection of statistics regarding our crops is being improved and
sources of information are being enlarged, to the end that producers may
have the earliest advices regarding crop conditions. There has never
been a time when those for whom it was established have shown more
appreciation of the services of the Department.

In my annual message of December 5, 1898, I called attention to the
necessity for some amendment of the alien contract law. There still
remain important features of the rightful application of the eight-hour
law for the benefit of labor and of the principle of arbitration, and I
again commend these subjects to the careful attention of the Congress.

That there may be secured the best service possible in the Philippine
Islands, I have issued, under date of November 30, 1900, the following
order: The United States Civil Service Commission is directed to render
such assistance as may be practicable to the Civil Service Board,
created under the act of the United States Philippine Commission, for
the establishment and maintenance of an honest and efficient civil
service in the Philippine Islands, and for that purpose to conduct
examinations for the civil service of the Philippine islands, upon the
request of the Civil Service Board of said islands, under such
regulations as may be agreed upon by the said Board and the said United
States Civil Service Commission. The Civil Service Commission is greatly
embarrassed in its work for want of an adequate permanent force for
clerical and other assistance. Its needs are fully set forth in its
report. I invite attention to the report, and especially urge upon the
Congress that this important bureau of the public service, which passes
upon the qualifications and character of so large a number of the
officers and employees of the Government, should be supported by all
needed appropriations to secure promptness and efficiency.

I am very much impressed with the statement made by the heads of all the
Departments of the urgent necessity of a hall of public records. In
every departmental building in Washington, so far as I am informed, the
space for official records is not only exhausted, but the walls of rooms
are lined with shelves, the middle floor space of many rooms is filled
with the cases, and garrets and basements, which were never intended and
are unfitted for their accommodation, are crowded with them. Aside from
the inconvenience there is great danger, not only from fire, but from
the weight of these records upon timbers not intended for their support.
There should be a separate building especially designed for the purpose
of receiving and preserving the annually accumulating archives of the
several Executive Departments. Such a hall need not be a costly
structure, but should be so arranged as to admit of enlargement from
time to time. I urgently recommend that the Congress take early action
in this matter.

I transmit to the Congress a resolution adopted at a recent meeting of
the American Bar Association concerning the proposed celebration of John
Marshall Day, February 4, 1901. Fitting exercises have been arranged,
and it is earnestly desired by the committee that the Congress may
participate in this movement to honor the memory of the great jurist.

The transfer of the Government to this city is a fact of great
historical interest. Among the people there is a feeling of genuine
pride in the Capital of the Republic.

It is a matter of interest in this connection that in 1800 the
population of the District of Columbia was 14,093; to-day it is 278,718.
The population of the city of Washington was then 3,210; to-day it is
218,196.

The Congress having provided for "an appropriate national celebration of
the Centennial Anniversary of the Establishment of the Seat of the
Government in the District of Columbia," the committees authorized by it
have prepared a programme for the 12th of December, 1900, which date has
been selected as the anniversary day. Deep interest has been shown in
the arrangements for the celebration by the members of the committees of
the Senate and House of Representatives, the committee of Governors
appointed by the President, and the committees appointed by the citizens
and inhabitants of the District of Columbia generally. The programme, in
addition to a reception and other exercises at the Executive Mansion,
provides commemorative exercises to be held jointly by the Senate and
House of Representatives in the Hall of the House of Representatives,
and a reception in the evening at the Corcoran Gallery of Art in honor
of the Governors of the States and Territories.

In our great prosperity we must guard against the danger it invites of
extravagance in Government expenditures and appropriations; and the
chosen representatives of the people will, I doubt not, furnish an
example in their legislation of that wise economy which in a season of
plenty husbands for the future. In this era of great business activity
and opportunity caution is not untimely. It will not abate, but
strengthen, confidence. It will not retard, but promote, legitimate
industrial and commercial expansion. Our growing power brings with it
temptations and perils requiring constant vigilance to avoid. It must
not be used to invite conflicts, nor for oppression, but for the more
effective maintenance of those principles of equality and justice upon
which our institutions and happiness depend. Let us keep always in mind
that the foundation of our Government is liberty; its superstructure
peace.

***

State of the Union Address
Theodore Roosevelt
December 3, 1901

To the Senate and House of Representatives:

The Congress assembles this year under the shadow of a great calamity.
On the sixth of September, President McKinley was shot by an anarchist
while attending the Pan-American Exposition at Buffalo, and died in that
city on the fourteenth of that month.

Of the last seven elected Presidents, he is the third who has been
murdered, and the bare recital of this fact is sufficient to justify
grave alarm among all loyal American citizens. Moreover, the
circumstances of this, the third assassination of an American President,
have a peculiarly sinister significance. Both President Lincoln and
President Garfield were killed by assassins of types unfortunately not
uncommon in history; President Lincoln falling a victim to the terrible
passions aroused by four years of civil war, and President Garfield to
the revengeful vanity of a disappointed office-seeker. President
McKinley was killed by an utterly depraved criminal belonging to that
body of criminals who object to all governments, good and bad alike, who
are against any form of popular liberty if it is guaranteed by even the
most just and liberal laws, and who are as hostile to the upright
exponent of a free people's sober will as to the tyrannical and
irresponsible despot.

It is not too much to say that at the time of President McKinley's death
he was the most widely loved man in all the United States; while we have
never had any public man of his position who has been so wholly free
from the bitter animosities incident to public life. His political
opponents were the first to bear the heartiest and most generous tribute
to the broad kindliness of nature, the sweetness and gentleness of
character which so endeared him to his close associates. To a standard
of lofty integrity in public life he united the tender affections and
home virtues which are all-important in the make-up of national
character. A gallant soldier in the great war for the Union, he also
shone as an example to all our people because of his conduct in the most
sacred and intimate of home relations. There could be no personal hatred
of him, for he never acted with aught but consideration for the welfare
of others. No one could fail to respect him who knew him in public or
private life. The defenders of those murderous criminals who seek to
excuse their criminality by asserting that it is exercised for political
ends, inveigh against wealth and irresponsible power. But for this
assassination even this base apology cannot be urged.

President McKinley was a man of moderate means, a man whose stock sprang
from the sturdy tillers of the soil, who had himself belonged among the
wage-workers, who had entered the Army as a private soldier. Wealth was
not struck at when the President was assassinated, but the honest toil
which is content with moderate gains after a lifetime of unremitting
labor, largely in the service of the public. Still less was power struck
at in the sense that power is irresponsible or centered in the hands of
any one individual. The blow was not aimed at tyranny or wealth. It was
aimed at one of the strongest champions the wage-worker has ever had; at
one of the most faithful representatives of the system of public rights
and representative government who has ever risen to public office.
President McKinley filled that political office for which the entire
people vote, and no President not even Lincoln himself--was ever more
earnestly anxious to represent the well thought-out wishes of the
people; his one anxiety in every crisis was to keep in closest touch
with the people--to find out what they thought and to endeavor to give
expression to their thought, after having endeavored to guide that
thought aright. He had just been reelected to the Presidency because the
majority of our citizens, the majority of our farmers and wage-workers,
believed that he had faithfully upheld their interests for four years.
They felt themselves in close and intimate touch with him. They felt
that he represented so well and so honorably all their ideals and
aspirations that they wished him to continue for another four years to
represent them.

And this was the man at whom the assassin struck That there might be
nothing lacking to complete the Judas-like infamy of his act, he took
advantage of an occasion when the President was meeting the people
generally; and advancing as if to take the hand out-stretched to him in
kindly and brotherly fellowship, he turned the noble and generous
confidence of the victim into an opportunity to strike the fatal blow.
There is no baser deed in all the annals of crime.

The shock, the grief of the country, are bitter in the minds of all who
saw the dark days, while the President yet hovered between life and
death. At last the light was stilled in the kindly eyes and the breath
went from the lips that even in mortal agony uttered no words save of
forgiveness to his murderer, of love for his friends, and of faltering
trust in the will of the Most High. Such a death, crowning the glory of
such a life, leaves us with infinite sorrow, but with such pride in what
he had accomplished and in his own personal character, that we feel the
blow not as struck at him, but as struck at the Nation We mourn a good
and great President who is dead; but while we mourn we are lifted up by
the splendid achievements of his life and the grand heroism with which
he met his death.

When we turn from the man to the Nation, the harm done is so great as to
excite our gravest apprehensions and to demand our wisest and most
resolute action. This criminal was a professed anarchist, inflamed by
the teachings of professed anarchists, and probably also by the reckless
utterances of those who, on the stump and in the public press, appeal to
the dark and evil spirits of malice and greed, envy and sullen hatred.
The wind is sowed by the men who preach such doctrines, and they cannot
escape their share of responsibility for the whirlwind that is reaped.
This applies alike to the deliberate demagogue, to the exploiter of
sensationalism, and to the crude and foolish visionary who, for whatever
reason, apologizes for crime or excites aimless discontent.

The blow was aimed not at this President, but at all Presidents; at
every symbol of government. President McKinley was as emphatically the
embodiment of the popular will of the Nation expressed through the forms
of law as a New England town meeting is in similar fashion the
embodiment of the law-abiding purpose and practice of the people of the
town. On no conceivable theory could the murder of the President be
accepted as due to protest against "inequalities in the social order,"
save as the murder of all the freemen engaged in a town meeting could be
accepted as a protest against that social inequality which puts a
malefactor in jail. Anarchy is no more an expression of "social
discontent" than picking pockets or wife-beating.

The anarchist, and especially the anarchist in the United States, is
merely one type of criminal, more dangerous than any other because he
represents the same depravity in a greater degree. The man who advocates
anarchy directly or indirectly, in any shape or fashion, or the man who
apologizes for anarchists and their deeds, makes himself morally
accessory to murder before the fact. The anarchist is a criminal whose
perverted instincts lead him to prefer confusion and chaos to the most
beneficent form of social order. His protest of concern for workingmen
is outrageous in its impudent falsity; for if the political institutions
of this country do not afford opportunity to every honest and
intelligent son of toil, then the door of hope is forever closed against
him. The anarchist is everywhere not merely the enemy of system and of
progress, but the deadly foe of liberty. If ever anarchy is triumphant,
its triumph will last for but one red moment, to be succeeded, for ages
by the gloomy night of despotism.

For the anarchist himself, whether he preaches or practices his
doctrines, we need not have one particle more concern than for any
ordinary murderer. He is not the victim of social or political
injustice. There are no wrongs to remedy in his case. The cause of his
criminality is to be found in his own evil passions and in the evil
conduct of those who urge him on, not in any failure by others or by the
State to do justice to him or his. He is a malefactor and nothing else.
He is in no sense, in no shape or way, a "product of social conditions,"
save as a highwayman is "produced" by the fact than an unarmed man
happens to have a purse. It is a travesty upon the great and holy names
of liberty and freedom to permit them to be invoked in such a cause. No
man or body of men preaching anarchistic doctrines should be allowed at
large any more than if preaching the murder of some specified private
individual. Anarchistic speeches, writings, and meetings are essentially
seditious and treasonable.

I earnestly recommend to the Congress that in the exercise of its wise
discretion it should take into consideration the coming to this country
of anarchists or persons professing principles hostile to all government
and justifying the murder of those placed in authority. Such individuals
as those who not long ago gathered in open meeting to glorify the murder
of King Humbert of Italy perpetrate a crime, and the law should ensure
their rigorous punishment. They and those like them should be kept out
of this country; and if found here they should be promptly deported to
the country whence they came; and far-reaching provision should be made
for the punishment of those who stay. No matter calls more urgently for
the wisest thought of the Congress.

The Federal courts should be given jurisdiction over any man who kills
or attempts to kill the President or any man who by the Constitution or
by law is in line of succession for the Presidency, while the punishment
for an unsuccessful attempt should be proportioned to the enormity of
the offense against our institutions.

Anarchy is a crime against the whole human race; and all mankind should
band against the anarchist. His crime should be made an offense against
the law of nations, like piracy and that form of man-stealing known as
the slave trade; for it is of far blacker infamy than either. It should
be so declared by treaties among all civilized powers. Such treaties
would give to the Federal Government the power of dealing with the
crime.

A grim commentary upon the folly of the anarchist position was afforded
by the attitude of the law toward this very criminal who had just taken
the life of the President. The people would have torn him limb from limb
if it had not been that the law he defied was at once invoked in his
behalf. So far from his deed being committed on behalf of the people
against the Government, the Government was obliged at once to exert its
full police power to save him from instant death at the hands of the
people. Moreover, his deed worked not the slightest dislocation in our
governmental system, and the danger of a recurrence of such deeds, no
matter how great it might grow, would work only in the direction of
strengthening and giving harshness to the forces of order. No man will
ever be restrained from becoming President by any fear as to his
personal safety. If the risk to the President's life became great, it
would mean that the office would more and more come to be filled by men
of a spirit which would make them resolute and merciless in dealing with
every friend of disorder. This great country will not fall into anarchy,
and if anarchists should ever become a serious menace to its
institutions, they would not merely be stamped out, but would involve in
their own ruin every active or passive sympathizer with their doctrines.
The American people are slow to wrath, but when their wrath is once
kindled it burns like a consuming flame.

During the last five years business confidence has been restored, and
the nation is to be congratulated because of its present abounding
prosperity. Such prosperity can never be created by law alone, although
it is easy enough to destroy it by mischievous laws. If the hand of the
Lord is heavy upon any country, if flood or drought comes, human wisdom
is powerless to avert the calamity. Moreover, no law can guard us
against the consequences of our own folly. The men who are idle or
credulous, the men who seek gains not by genuine work with head or hand
but by gambling in any form, are always a source of menace not only to
themselves but to others. If the business world loses its head, it loses
what legislation cannot supply. Fundamentally the welfare of each
citizen, and therefore the welfare of the aggregate of citizens which
makes the nation, must rest upon individual thrift and energy,
resolution, and intelligence. Nothing can take the place of this
individual capacity; but wise legislation and honest and intelligent
administration can give it the fullest scope, the largest opportunity to
work to good effect.

The tremendous and highly complex industrial development which went on
with ever accelerated rapidity during the latter half of the nineteenth
century brings us face to face, at the beginning of the twentieth, with
very serious social problems. The old laws, and the old customs which
had almost the binding force of law, were once quite sufficient to
regulate the accumulation and distribution of wealth. Since the
industrial changes which have so enormously increased the productive
power of mankind, they are no longer sufficient.

The growth of cities has gone on beyond comparison faster than the
growth of the country, and the upbuilding of the great industrial
centers has meant a startling increase, not merely in the aggregate of
wealth, but in the number of very large individual, and especially of
very large corporate, fortunes. The creation of these great corporate
fortunes has not been due to the tariff nor to any other governmental
action, but to natural causes in the business world, operating in other
countries as they operate in our own.

The process has aroused much antagonism, a great part of which is wholly
without warrant. It is not true that as the rich have grown richer the
poor have grown poorer. On the contrary, never before has the average
man, the wage-worker, the farmer, the small trader, been so well off as
in this country and at the present time. There have been abuses
connected with the accumulation of wealth; yet it remains true that a
fortune accumulated in legitimate business can be accumulated by the
person specially benefited only on condition of conferring immense
incidental benefits upon others. Successful enterprise, of the type
which benefits all mankind, can only exist if the conditions are such as
to offer great prizes as the rewards of success.

The captains of industry who have driven the railway systems across this
continent, who have built up our commerce, who have developed our
manufactures, have on the whole done great good to our people. Without
them the material development of which we are so justly proud could
never have taken place. Moreover, we should recognize the immense
importance of this material development of leaving as unhampered as is
compatible with the public good the strong and forceful men upon whom
the success of business operations inevitably rests. The slightest study
of business conditions will satisfy anyone capable of forming a judgment
that the personal equation is the most important factor in a business
operation; that the business ability of the man at the head of any
business concern, big or little, is usually the factor which fixes the
gulf between striking success and hopeless failure.

An additional reason for caution in dealing with corporations is to be
found in the international commercial conditions of to-day. The same
business conditions which have produced the great aggregations of
corporate and individual wealth have made them very potent factors in
international Commercial competition. Business concerns which have the
largest means at their disposal and are managed by the ablest men are
naturally those which take the lead in the strife for commercial
supremacy among the nations of the world. America has only just begun to
assume that commanding position in the international business world
which we believe will more and more be hers. It is of the utmost
importance that this position be not jeoparded, especially at a time
when the overflowing abundance of our own natural resources and the
skill, business energy, and mechanical aptitude of our people make
foreign markets essential. Under such conditions it would be most unwise
to cramp or to fetter the youthful strength of our Nation.

Moreover, it cannot too often be pointed out that to strike with
ignorant violence at the interests of one set of men almost inevitably
endangers the interests of all. The fundamental rule in our national
life--the rule which underlies all others--is that, on the whole, and in
the long run, we shall go up or down together. There are exceptions; and
in times of prosperity some will prosper far more, and in times of
adversity, some will suffer far more, than others; but speaking
generally, a period of good times means that all share more or less in
them, and in a period of hard times all feel the stress to a greater or
less degree. It surely ought not to be necessary to enter into any proof
of this statement; the memory of the lean years which began in 1893 is
still vivid, and we can contrast them with the conditions in this very
year which is now closing. Disaster to great business enterprises can
never have its effects limited to the men at the top. It spreads
throughout, and while it is bad for everybody, it is worst for those
farthest down. The capitalist may be shorn of his luxuries; but the
wage-worker may be deprived of even bare necessities.

The mechanism of modern business is so delicate that extreme care must
be taken not to interfere with it in a spirit of rashness or ignorance.
Many of those who have made it their vocation to denounce the great
industrial combinations which are popularly, although with technical
inaccuracy, known as "trusts," appeal especially to hatred and fear.
These are precisely the two emotions, particularly when combined with
ignorance, which unfit men for the exercise of cool and steady judgment.
In facing new industrial conditions, the whole history of the world
shows that legislation will generally be both unwise and ineffective
unless undertaken after calm inquiry and with sober self-restraint. Much
of the legislation directed at the trusts would have been exceedingly
mischievous had it not also been entirely ineffective. In accordance
with a well-known sociological law, the ignorant or reckless agitator
has been the really effective friend of the evils which he has been
nominally opposing. In dealing with business interests, for the
Government to undertake by crude and ill-considered legislation to do
what may turn out to be bad, would be to incur the risk of such
far-reaching national disaster that it would be preferable to undertake
nothing at all. The men who demand the impossible or the undesirable
serve as the allies of the forces with which they are nominally at war,
for they hamper those who would endeavor to find out in rational fashion
what the wrongs really are and to what extent and in what manner it is
practicable to apply remedies.

All this is true; and yet it is also true that there are real and grave
evils, one of the chief being over-capitalization because of its many
baleful consequences; and a resolute and practical effort must be made
to correct these evils.

There is a widespread conviction in the minds of the American people
that the great corporations known as trusts are in certain of their
features and tendencies hurtful to the general welfare. This springs
from no spirit of envy or uncharitableness, nor lack of pride in the
great industrial achievements that have placed this country at the head
of the nations struggling for commercial supremacy. It does not rest
upon a lack of intelligent appreciation of the necessity of meeting
changing and changed conditions of trade with new methods, nor upon
ignorance of the fact that combination of capital in the effort to
accomplish great things is necessary when the world's progress demands
that great things be done. It is based upon sincere conviction that
combination and concentration should be, not prohibited, but supervised
and within reasonable limits controlled; and in my judgment this
conviction is right.

It is no limitation upon property rights or freedom of contract to
require that when men receive from Government the privilege of doing
business under corporate form, which frees them from individual
responsibility, and enables them to call into their enterprises the
capital of the public, they shall do so upon absolutely truthful
representations as to the value of the property in which the capital is
to be invested. Corporations engaged in interstate commerce should be
regulated if they are found to exercise a license working to the public
injury. It should be as much the aim of those who seek for social
betterment to rid the business world of crimes of cunning as to rid the
entire body politic of crimes of violence. Great corporations exist only
because they are created and safeguarded by our institutions; and it is
therefore our right and our duty to see that they work in harmony with
these institutions.

The first essential in determining how to deal with the great industrial
combinations is knowledge of the facts--publicity. In the interest of
the public, the Government should have the right to inspect and examine
the workings of the great corporations engaged in interstate business.
Publicity is the only sure remedy which we can now invoke. What further
remedies are needed in the way of governmental regulation, or taxation,
can only be determined after publicity has been obtained, by process of
law, and in the course of administration. The first requisite is
knowledge, full and complete--knowledge which may be made public to the
world.

Artificial bodies, such as corporations and joint stock or other
associations, depending upon any statutory law for their existence or
privileges, should be subject to proper governmental supervision, and
full and accurate information as to their operations should be made
public regularly at reasonable intervals.

The large corporations, commonly called trusts, though organized in one
State, always do business in many States, often doing very little
business in the State where they are incorporated. There is utter lack
of uniformity in the State laws about them; and as no State has any
exclusive interest in or power over their acts, it has in practice
proved impossible to get adequate regulation through State action.
Therefore, in the interest of the whole people, the Nation should,
without interfering with the power of the States in the matter itself,
also assume power of supervision and regulation over all corporations
doing an interstate business. This is especially true where the
corporation derives a portion of its wealth from the existence of some
monopolistic element or tendency in its business. There would be no
hardship in such supervision; banks are subject to it, and in their case
it is now accepted as a simple matter of course. Indeed, it is probable
that supervision of corporations by the National Government need not go
so far as is now the case with the supervision exercised over them by so
conservative a State as Massachusetts, in order to produce excellent
results.

When the Constitution was adopted, at the end of the eighteenth century,
no human wisdom could foretell the sweeping changes, alike in industrial
and political conditions, which were to take place by the beginning of
the twentieth century. At that time it was accepted as a matter of
course that the several States were the proper authorities to regulate,
so far as was then necessary, the comparatively insignificant and
strictly localized corporate bodies of the day. The conditions are now
wholly different and wholly different action is called for. I believe
that a law can be framed which will enable the National Government to
exercise control along the lines above indicated; profiting by the
experience gained through the passage and administration of the
Interstate-Commerce Act. If, however, the judgment of the Congress is
that it lacks the constitutional power to pass such an act, then a
constitutional amendment should be submitted to confer the power.

There should be created a Cabinet officer, to be known as Secretary of
Commerce and Industries, as provided in the bill introduced at the last
session of the Congress. It should be his province to deal with commerce
in its broadest sense; including among many other things whatever
concerns labor and all matters affecting the great business corporations
and our merchant marine.

The course proposed is one phase of what should be a comprehensive and
far-reaching scheme of constructive statesmanship for the purpose of
broadening our markets, securing our business interests on a safe basis,
and making firm our new position in the international industrial world;
while scrupulously safeguarding the rights of wage-worker and
capitalist, of investor and private citizen, so as to secure equity as
between man and man in this Republic.

With the sole exception of the farming interest, no one matter is of
such vital moment to our whole people as the welfare of the
wage-workers. If the farmer and the wage-worker are well off, it is
absolutely certain that all others will be well off too. It is therefore
a matter for hearty congratulation that on the whole wages are higher
to-day in the United States than ever before in our history, and far
higher than in any other country. The standard of living is also higher
than ever before. Every effort of legislator and administrator should be
bent to secure the permanency of this condition of things and its
improvement wherever possible. Not only must our labor be protected by
the tariff, but it should also be protected so far as it is possible
from the presence in this country of any laborers brought over by
contract, or of those who, coming freely, yet represent a standard of
living so depressed that they can undersell our men in the labor market
and drag them to a lower level. I regard it as necessary, with this end
in view, to re-enact immediately the law excluding Chinese laborers and
to strengthen it wherever necessary in order to make its enforcement
entirely effective.

The National Government should demand the highest quality of service
from its employees; and in return it should be a good employer. If
possible legislation should be passed, in connection with the Interstate
Commerce Law, which will render effective the efforts of different
States to do away with the competition of convict contract labor in the
open labor market. So far as practicable under the conditions of
Government work, provision should be made to render the enforcement of
the eight-hour law easy and certain. In all industries carried on
directly or indirectly for the United States Government women and
children should be protected from excessive hours of labor, from night
work, and from work under unsanitary conditions. The Government should
provide in its contracts that all work should be done under "fair"
conditions, and in addition to setting a high standard should uphold it
by proper inspection, extending if necessary to the subcontractors. The
Government should forbid all night work for women and children, as well
as excessive overtime. For the District of Columbia a good factory law
should be passed; and, as a powerful indirect aid to such laws,
provision should be made to turn the inhabited alleys, the existence of
which is a reproach to our Capital city, into minor streets, where the
inhabitants can live under conditions favorable to health and morals.

American wage-workers work with their heads as well as their hands.
Moreover, they take a keen pride in what they are doing; so that,
independent of the reward, they wish to turn out a perfect job. This is
the great secret of our success in competition with the labor of foreign
countries.

The most vital problem with which this country, and for that matter the
whole civilized world, has to deal, is the problem which has for one
side the betterment of social conditions, moral and physical, in large
cities, and for another side the effort to deal with that tangle of
far-reaching questions which we group together when we speak of "labor."
The chief factor in the success of each man--wage-worker, farmer, and
capitalist alike--must ever be the sum total of his own individual
qualities and abilities. Second only to this comes the power of acting
in combination or association with others. Very great good has been and
will be accomplished by associations or unions of wage-workers, when
managed with forethought, and when they combine insistence upon their
own rights with law-abiding respect for the rights of others. The
display of these qualities in such bodies is a duty to the nation no
less than to the associations themselves. Finally, there must also in
many cases be action by the Government in order to safeguard the rights
and interests of all. Under our Constitution there is much more scope
for such action by the State and the municipality than by the nation.
But on points such as those touched on above the National Government can
act.

When all is said and done, the rule of brotherhood remains as the
indispensable prerequisite to success in the kind of national life for
which we strive. Each man must work for himself, and unless he so works
no outside help can avail him; but each man must remember also that he
is indeed his brother's keeper, and that while no man who refuses to
walk can be carried with advantage to himself or anyone else, yet that
each at times stumbles or halts, that each at times needs to have the
helping hand outstretched to him. To be permanently effective, aid must
always take the form of helping a man to help himself; and we can all
best help ourselves by joining together in the work that is of common
interest to all.

Our present immigration laws are unsatisfactory. We need every honest
and efficient immigrant fitted to become an American citizen, every
immigrant who comes here to stay, who brings here a strong body, a stout
heart, a good head, and a resolute purpose to do his duty well in every
way and to bring up his children as law-abiding and God-fearing members
of the community. But there should be a comprehensive law enacted with
the object of working a threefold improvement over our present system.
First, we should aim to exclude absolutely not only all persons who are
known to be believers in anarchistic principles or members of
anarchistic societies, but also all persons who are of a low moral
tendency or of unsavory reputation. This means that we should require a
more thorough system of inspection abroad and a more rigid system of
examination at our immigration ports, the former being especially
necessary.

The second object of a proper immigration law ought to be to secure by a
careful and not merely perfunctory educational test some intelligent
capacity to appreciate American institutions and act sanely as American
citizens. This would not keep out all anarchists, for many of them
belong to the intelligent criminal class. But it would do what is also
in point, that is, tend to decrease the sum of ignorance, so potent in
producing the envy, suspicion, malignant passion, and hatred of order,
out of which anarchistic sentiment inevitably springs. Finally, all
persons should be excluded who are below a certain standard of economic
fitness to enter our industrial field as competitors with American
labor. There should be proper proof of personal capacity to earn an
American living and enough money to insure a decent start under American
conditions. This would stop the influx of cheap labor, and the resulting
competition which gives rise to so much of bitterness in American
industrial life; and it would dry up the springs of the pestilential
social conditions in our great cities, where anarchistic organizations
have their greatest possibility of growth.

Both the educational and economic tests in a wise immigration law should
be designed to protect and elevate the general body politic and social.
A very close supervision should be exercised over the steamship
companies which mainly bring over the immigrants, and they should be
held to a strict accountability for any infraction of the law.

There is general acquiescence in our present tariff system as a national
policy. The first requisite to our prosperity is the continuity and
stability of this economic policy. Nothing could be more unwise than to
disturb the business interests of the country by any general tariff
change at this time. Doubt, apprehension, uncertainty are exactly what
we most wish to avoid in the interest of our commercial and material
well-being. Our experience in the past has shown that sweeping revisions
of the tariff are apt to produce conditions closely approaching panic in
the business world. Yet it is not only possible, but eminently
desirable, to combine with the stability of our economic system a
supplementary system of reciprocal benefit and obligation with other
nations. Such reciprocity is an incident and result of the firm
establishment and preservation of our present economic policy. It was
specially provided for in the present tariff law.

Reciprocity must be treated as the handmaiden of protection. Our first
duty is to see that the protection granted by the tariff in every case
where it is needed is maintained, and that reciprocity be sought for so
far as it can safely be done without injury to our home industries. Just
how far this is must be determined according to the individual case,
remembering always that every application of our tariff policy to meet
our shifting national needs must be conditioned upon the cardinal fact
that the duties must never be reduced below the point that will cover
the difference between the labor cost here and abroad. The well-being of
the wage-worker is a prime consideration of our entire policy of
economic legislation.

Subject to this proviso of the proper protection necessary to our
industrial well-being at home, the principle of reciprocity must command
our hearty support. The phenomenal growth of our export trade emphasizes
the urgency of the need for wider markets and for a liberal policy in
dealing with foreign nations. Whatever is merely petty and vexatious in
the way of trade restrictions should be avoided. The customers to whom
we dispose of our surplus products in the long run, directly or
indirectly, purchase those surplus products by giving us something in
return. Their ability to purchase our products should as far as possible
be secured by so arranging our tariff as to enable us to take from them
those products which we can use without harm to our own industries and
labor, or the use of which will be of marked benefit to us.

It is most important that we should maintain the high level of our
present prosperity. We have now reached the point in the development of
our interests where we are not only able to supply our own markets but
to produce a constantly growing surplus for which we must find markets
abroad. To secure these markets we can utilize existing duties in any
case where they are no longer needed for the purpose of protection, or
in any case where the article is not produced here and the duty is no
longer necessary for revenue, as giving us something to offer in
exchange for what we ask. The cordial relations with other nations which
are so desirable will naturally be promoted by the course thus required
by our own interests.

The natural line of development for a policy of reciprocity will be in
connection with those of our productions which no longer require all of
the support once needed to establish them upon a sound basis, and with
those others where either because of natural or of economic causes we
are beyond the reach of successful competition.

I ask the attention of the Senate to the reciprocity treaties laid
before it by my predecessor.

The condition of the American merchant marine is such as to call for
immediate remedial action by the Congress. It is discreditable to us as
a Nation that our merchant marine should be utterly insignificant in
comparison to that of other nations which we overtop in other forms of
business. We should not longer submit to conditions under which only a
trifling portion of our great commerce is carried in our own ships. To
remedy this state of things would not .merely serve to build up our
shipping interests, but it would also result in benefit to all who are
interested in the permanent establishment of a wider market for American
products, and would provide an auxiliary force for the Navy. Ships work
for their own countries just as railroads work for their terminal
points. Shipping lines, if established to the principal countries with
which we have dealings, would be of political as well as commercial
benefit. From every standpoint it is unwise for the United States to
continue to rely upon the ships of competing nations for the
distribution of our goods. It should be made advantageous to carry
American goods in American-built ships.

At present American shipping is under certain great disadvantages when
put in competition with the shipping of foreign countries. Many of the
fast foreign steamships, at a speed of fourteen knots or above, are
subsidized; and all our ships, sailing vessels and steamers alike, cargo
carriers of slow speed and mail carriers of high speed, have to meet the
fact that the original cost of building American ships is greater than
is the case abroad; that the wages paid American officers and seamen are
very much higher than those paid the officers and seamen of foreign
competing countries; and that the standard of living on our ships is far
superior to the standard of living on the ships of our commercial
rivals.

Our Government should take such action as will remedy these
inequalities. The American merchant marine should be restored to the
ocean.

The Act of March 14, 1900, intended unequivocally to establish gold as
the standard money and to maintain at a parity therewith all forms of
money medium in use with us, has been shown to be timely and judicious.
The price of our Government bonds in the world's market, when compared
with the price of similar obligations issued by other nations, is a
flattering tribute to our public credit. This condition it is evidently
desirable to maintain.

In many respects the National Banking Law furnishes sufficient liberty
for the proper exercise of the banking function; but there seems to be
need of better safeguards against the deranging influence of commercial
crises and financial panics. Moreover, the currency of the country
should be made responsive to the demands of our domestic trade and
commerce.

The collections from duties on imports and internal taxes continue to
exceed the ordinary expenditures of the Government, thanks mainly to the
reduced army expenditures. The utmost care should be taken not to reduce
the revenues so that there will be any possibility of a deficit; but,
after providing against any such contingency, means should be adopted
which will bring the revenues more nearly within the limit of our actual
needs. In his report to the Congress the Secretary of the Treasury
considers all these questions at length, and I ask your attention to the
report and recommendations.

I call special attention to the need of strict economy in expenditures.
The fact that our national needs forbid us to be niggardly in providing
whatever is actually necessary to our well-being, should make us doubly
careful to husband our national resources, as each of us husbands his
private resources, by scrupulous avoidance of anything like wasteful or
reckless expenditure. Only by avoidance of spending money on what is
needless or unjustifiable can we legitimately keep our income to the
point required to meet our needs that are genuine.

In 1887 a measure was enacted for the regulation of interstate railways,
commonly known as the Interstate Commerce Act. The cardinal provisions
of that act were that railway rates should be just and reasonable and
that all shippers, localities, and commodities should be accorded equal
treatment. A commission was created and endowed with what were supposed
to be the necessary powers to execute the provisions of this act. That
law was largely an experiment. Experience has shown the wisdom of its
purposes, but has also shown, possibly that some of its requirements are
wrong, certainly that the means devised for the enforcement of its
provisions are defective. Those who complain of the management of the
railways allege that established rates are not maintained; that rebates
and similar devices are habitually resorted to; that these preferences
are usually in favor of the large shipper; that they drive out of
business the smaller competitor; that while many rates are too low, many
others are excessive; and that gross preferences are made, affecting
both localities and commodities. Upon the other hand, the railways
assert that the law by its very terms tends to produce many of these
illegal practices by depriving carriers of that right of concerted
action which they claim is necessary to establish and maintain
non-discriminating rates.

The act should be amended. The railway is a public servant. Its rates
should be just to and open to all shippers alike. The Government should
see to it that within its jurisdiction this is so and should provide a
speedy, inexpensive, and effective remedy to that end. At the same time
it must not be forgotten that our railways are the arteries through
which the commercial lifeblood of this Nation flows. Nothing could be
more foolish than the enactment of legislation which would unnecessarily
interfere with the development and operation of these commercial
agencies. The subject is one of great importance and calls for the
earnest attention of the Congress.

The Department of Agriculture during the past fifteen years has steadily
broadened its work on economic lines, and has accomplished results of
real value in upbuilding domestic and foreign trade. It has gone into
new fields until it is now in touch with all sections of our country and
with two of the island groups that have lately come under our
jurisdiction, whose people must look to agriculture as a livelihood. It
is searching the world for grains, grasses, fruits, and vegetables
specially fitted for introduction into localities in the several States
and Territories where they may add materially to our resources. By
scientific attention to soil survey and possible new crops, to breeding
of new varieties of plants, to experimental shipments, to animal
industry and applied chemistry, very practical aid has been given our
farming and stock-growing interests. The products of the farm have taken
an unprecedented place in our export trade during the year that has just
closed.

Public opinion throughout the United States has moved steadily toward a
just appreciation of the value of forests, whether planted or of natural
growth. The great part played by them in the creation and maintenance of
the national wealth is now more fully realized than ever before.

Wise forest protection does not mean the withdrawal of forest resources,
whether of wood, water, or grass, from contributing their full share to
the welfare of the people, but, on the contrary, gives the assurance of
larger and more certain supplies. The fundamental idea of forestry is
the perpetuation of forests by use. Forest protection is not an end of
itself; it is a means to increase and sustain the resources of our
country and the industries which depend upon them. The preservation of
our forests is an imperative business necessity. We have come to see
clearly that whatever destroys the forest, except to make way for
agriculture, threatens our well being.

The practical usefulness of the national forest reserves to the mining,
grazing, irrigation, and other interests of the regions in which the
reserves lie has led to a widespread demand by the people of the West
for their protection and extension. The forest reserves will inevitably
be of still greater use in the future than in the past. Additions should
be made to them whenever practicable, and their usefulness should be
increased by a thoroughly business-like management.

At present the protection of the forest reserves rests with the General
Land Office, the mapping and description of their timber with the United
States Geological Survey, and the preparation of plans for their
conservative use with the Bureau of Forestry, which is also charged with
the general advancement of practical forestry in the United States.
These various functions should be united in the Bureau of Forestry, to
which they properly belong. The present diffusion of responsibility is
bad from every standpoint. It prevents that effective co-operation
between the Government and the men who utilize the resources of the
reserves, without which the interests of both must suffer. The
scientific bureaus generally should be put under the Department of
Agriculture. The President should have by law the power of transferring
lands for use as forest reserves to the Department of Agriculture. He
already has such power in the case of lands needed by the Departments of
War and the Navy.

The wise administration of the forest reserves will be not less helpful
to the interests which depend on water than to those which depend on
wood and grass. The water supply itself depends upon the forest. In the
arid region it is water, not land, which measures production. The
western half of the United States would sustain a population greater
than that of our whole country to-day if the waters that now run to
waste were saved and used for irrigation. The forest and water problems
are perhaps the most vital internal questions of the United States.

Certain of the forest reserves should also be made preserves for the
wild forest creatures. All of the reserves should be better protected
from fires. Many of them need special protection because of the great
injury done by live stock, above all by sheep. The increase in deer,
elk, and other animals in the Yellowstone Park shows what may be
expected when other mountain forests are properly protected by law and
properly guarded. Some of these areas have been so denuded of surface
vegetation by overgrazing that the ground breeding birds, including
grouse and quail, and many mammals, including deer, have been
exterminated or driven away. At the same time the water-storing capacity
of the surface has been decreased or destroyed, thus promoting floods in
times of rain and diminishing the flow of streams between rains.

In cases where natural conditions have been restored for a few years,
vegetation has again carpeted the ground, birds and deer are coming
back, and hundreds of persons, especially from the immediate
neighborhood, come each summer to enjoy the privilege of camping. Some
at least of the forest reserves should afford perpetual protection to
the native fauna and flora, safe havens of refuge to our rapidly
diminishing wild animals of the larger kinds, and free camping grounds
for the ever-increasing numbers of men and women who have learned to
find rest, health, and recreation in the splendid forests and
flower-clad meadows of our mountains. The forest reserves should be set
apart forever for the use and benefit of our people as a whole and not
sacrificed to the shortsighted greed of a few.

The forests are natural reservoirs. By restraining the streams in flood
and replenishing them in drought they make possible the use of waters
otherwise wasted. They prevent the soil from washing, and so protect the
storage reservoirs from filling up with silt. Forest conservation is
therefore an essential condition of water conservation.

The forests alone cannot, however, fully regulate and conserve the
waters of the arid region. Great storage works are necessary to equalize
the flow of streams and to save the flood waters. Their construction has
been conclusively shown to be an undertaking too vast for private
effort. Nor can it be best accomplished by the individual States acting
alone. Far-reaching interstate problems are involved; and the resources
of single States would often be inadequate. It is properly a national
function, at least in some of its features. It is as right for the
National Government to make the streams and rivers of the arid region
useful by engineering works for water storage as to make useful the
rivers and harbors of the humid region by engineering works of another
kind. The storing of the floods in reservoirs at the headwaters of our
rivers is but an enlargement of our present policy of river control,
under which levees are built on the lower reaches of the same streams.

The Government should construct and maintain these reservoirs as it does
other public works. Where their purpose is to regulate the flow of
streams, the water should be turned freely into the channels in the dry
season to take the same course under the same laws as the natural flow.

The reclamation of the unsettled arid public lands presents a different
problem. Here it is not enough to regulate the flow of streams. The
object of the Government is to dispose of the land to settlers who will
build homes upon it. To accomplish this object water must be brought
within their reach.

The pioneer settlers on the arid public domain chose their homes along
streams from which they could themselves divert the water to reclaim
their holdings. Such opportunities are practically gone. There remain,
however, vast areas of public land which can be made available for
homestead settlement, but only by reservoirs and main-line canals
impracticable for private enterprise. These irrigation works should be
built by the National Government. The lands reclaimed by them should be
reserved by the Government for actual settlers, and the cost of
construction should so far as possible be repaid by the land reclaimed.
The distribution of the water, the division of the streams among
irrigators, should be left to the settlers themselves in conformity with
State laws and without interference with those laws or with vested
fights. The policy of the National Government should be to aid
irrigation in the several States and Territories in such manner as will
enable the people in the local communities to help themselves, and as
will stimulate needed reforms in the State laws and regulations
governing irrigation.

The reclamation and settlement of the arid lands will enrich every
portion of our country, just as the settlement of the Ohio and
Mississippi valleys brought prosperity to the Atlantic States. The
increased demand for manufactured articles will stimulate industrial
production, while wider home markets and the trade of Asia will consume
the larger food supplies and effectually prevent Western competition
with Eastern agriculture. Indeed, the products of irrigation will be
consumed chiefly in upbuilding local centers of mining and other
industries, which would otherwise not come into existence at all. Our
people as a whole will profit, for successful home-making is but another
name for the upbuilding of the nation.

The necessary foundation has already been laid for the inauguration of
the policy just described. It would be unwise to begin by doing too
much, for a great deal will doubtless be learned, both as to what can
and what cannot be safely attempted, by the early efforts, which must of
necessity be partly experimental in character. At the very beginning the
Government should make clear, beyond shadow of doubt, its intention to
pursue this policy on lines of the broadest public interest. No
reservoir or canal should ever be built to satisfy selfish personal or
local interests; but only in accordance with the advice of trained
experts, after long investigation has shown the locality where all the
conditions combine to make the work most needed and fraught with the
greatest usefulness to the community as a whole. There should be no
extravagance, and the believers in the need of irrigation will most
benefit their cause by seeing to it that it is free from the least taint
of excessive or reckless expenditure of the public moneys.

Whatever the nation does for the extension of irrigation should
harmonize with, and tend to improve, the condition of those now living
on irrigated land. We are not at the starting point of this development.
Over two hundred millions of private capital has already been expended
in the construction of irrigation works, and many million acres of arid
land reclaimed. A high degree of enterprise and ability has been shown
in the work itself; but as much cannot be said in reference to the laws
relating thereto. The security and value of the homes created depend
largely on the stability of titles to water; but the majority of these
rest on the uncertain foundation of court decisions rendered in ordinary
suits at law. With a few creditable exceptions, the arid States have
failed to provide for the certain and just division of streams in times
of scarcity. Lax and uncertain laws have made it possible to establish
rights to water in excess of actual uses or necessities, and many
streams have already passed into private ownership, or a control
equivalent to ownership.

Whoever controls a stream practically controls the land it renders
productive, and the doctrine of private ownership of water apart from
land cannot prevail without causing enduring wrong. The recognition of
such ownership, which has been permitted to grow up in the arid regions,
should give way to a more enlightened and larger recognition of the
rights of the public in the control and disposal of the public water
supplies. Laws founded upon conditions obtaining in humid regions, where
water is too abundant to justify hoarding it, have no proper application
in a dry country.

In the arid States the only right to water which should be recognized is
that of use. In irrigation this right should attach to the land
reclaimed and be inseparable therefrom. Granting perpetual water rights
to others than users, without compensation to the public, is open to all
the objections which apply to giving away perpetual franchises to the
public utilities of cities. A few of the Western States have already
recognized this, and have incorporated in their constitutions the
doctrine of perpetual State ownership of water.

The benefits which have followed the unaided development of the past
justify the nation's aid and co-operation in the more difficult and
important work yet to be accomplished. Laws so vitally affecting homes
as those which control the water supply will only be effective when they
have the sanction of the irrigators; reforms can only be final and
satisfactory when they come through the enlightenment of the people most
concerned. The larger development which national aid insures should,
however, awaken in every arid State the determination to make its
irrigation system equal in justice and effectiveness that of any country
in the civilized world. Nothing could be more unwise than for isolated
communities to continue to learn everything experimentally, instead of
profiting by what is already known elsewhere. We are dealing with a new
and momentous question, in the pregnant years while institutions are
forming, and what we do will affect not only the present but future
generations.

Our aim should be not simply to reclaim the largest area of land and
provide homes for the largest number of people, but to create for this
new industry the best possible social and industrial conditions; and
this requires that we not only understand the existing situation, but
avail ourselves of the best experience of the time in the solution of
its problems. A careful study should be made, both by the Nation and the
States, of the irrigation laws and conditions here and abroad.
Ultimately it will probably be necessary for the Nation to co-operate
with the several arid States in proportion as these States by their
legislation and administration show themselves fit to receive it.

In Hawaii our aim must be to develop the Territory on the traditional
American lines. We do not wish a region of large estates tilled by cheap
labor; we wish a healthy American community of men who themselves till
the farms they own. All our legislation for the islands should be shaped
with this end in view; the well-being of the average home-maker must
afford the true test of the healthy development of the islands. The land
policy should as nearly as possible be modeled on our homestead system.

It is a pleasure to say that it is hardly more necessary to report as to
Puerto Rico than as to any State or Territory within our continental
limits. The island is thriving as never before, and it is being
administered efficiently and honestly. Its people are now enjoying
liberty and order under the protection of the United States, and upon
this fact we congratulate them and ourselves. Their material welfare
must be as carefully and jealously considered as the welfare of any
other portion of our country. We have given them the great gift of free
access for their products to the markets of the United States. I ask the
attention of the Congress to the need of legislation concerning the
public lands of Puerto Rico.

In Cuba such progress has been made toward putting the independent
government of the island upon a firm footing that before the present
session of the Congress closes this will be an accomplished fact. Cuba
will then start as her own mistress; and to the beautiful Queen of the
Antilles, as she unfolds this new page of her destiny, we extend our
heartiest greetings and good wishes. Elsewhere I have discussed the
question of reciprocity. In the case of Cuba, however, there are weighty
reasons of morality and of national interest why the policy should be
held to have a peculiar application, and I most earnestly ask your
attention to the wisdom, indeed to the vital need, of providing for a
substantial reduction in the tariff duties on Cuban imports into the
United States. Cuba has in her constitution affirmed what we desired:
that she should stand, in international matters, in closer and more
friendly relations with us than with any other power; and we are bound
by every consideration of honor and expediency to pass commercial
measures in the interest of her material well-being.

In the Philippines our problem is larger. They are very rich tropical
islands, inhabited by many varying tribes, representing widely different
stages of progress toward civilization. Our earnest effort is to help
these people upward along the stony and difficult path that leads to
self-government. We hope to make our administration of the islands
honorable to our Nation by making it of the highest benefit to the
Filipinos themselves; and as an earnest of what we intend to do, we
point to what we have done. Already a greater measure of material
prosperity and of governmental honesty and efficiency has been attained
in the Philippines than ever before in their history.

It is no light task for a nation to achieve the temperamental qualities
without which the institutions of free government are but an empty
mockery. Our people are now successfully governing themselves, because
for more than a thousand years they have been slowly fitting themselves,
sometimes consciously, sometimes unconsciously, toward this end. What
has taken us thirty generations to achieve, we cannot expect to have
another race accomplish out of hand, especially when large portions of
that race start very far behind the point which our ancestors had
reached even thirty generations ago. In dealing with the Philippine
people we must show both patience and strength, forbearance and
steadfast resolution. Our aim is high. We do not desire to do for the
islanders merely what has elsewhere been done for tropic peoples by even
the best foreign governments. We hope to do for them what has never
before been done for any people of the tropics--to make them fit for
self-government after the fashion of the really free nations.

History may safely be challenged to show a single instance in which a
masterful race such as ours, having been forced by the exigencies of war
to take possession of an alien land, has behaved to its inhabitants with
the disinterested zeal for their progress that our people have shown in
the Philippines. To leave the islands at this time would mean that they
would fall into a welter of murderous anarchy. Such desertion of duty on
our part would be a crime against humanity. The character of Governor
Taft and of his associates and subordinates is a proof, if such be
needed, of the sincerity of our effort to give the islanders a
constantly increasing measure of self-government, exactly as fast as
they show themselves fit to exercise it. Since the civil government was
established not an appointment has been made in the islands with any
reference to considerations of political influence, or to aught else
Save the fitness of the man and the needs of the service.

In our anxiety for the welfare and progress of the Philippines, may be
that here and there we have gone too rapidly in giving them local
self-government. It is on this side that our error, if any, has been
committed. No competent observer, sincerely desirous of finding out the
facts and influenced only by a desire for the welfare of the natives,
can assert that we have not gone far enough. We have gone to the very
verge of safety in hastening the process. To have taken a single step
farther or faster in advance would have been folly and weakness, and
might well have been crime. We are extremely anxious that the natives
shall show the power of governing themselves. We are anxious, first for
their sakes, and next, because it relieves us of a great burden. There
need not be the slightest fear of our not continuing to give them all
the liberty for which they are fit.

The only fear is test in our overanxiety we give them a degree of
independence for which they are unfit, thereby inviting reaction and
disaster. As fast as there is any reasonable hope that in a given
district the people can govern themselves, self-government has been
given in that district. There is not a locality fitted for
self-government which has not received it. But it may well be that in
certain cases it will have to be withdrawn because the inhabitants show
themselves unfit to exercise it; such instances have already occurred.
In other words, there is not the slightest chance of our failing to show
a sufficiently humanitarian spirit. The danger comes in the opposite
direction.

There are still troubles ahead in the islands. The insurrection has
become an affair of local banditti and marauders, who deserve no higher
regard than the brigands of portions of the Old World. Encouragement,
direct or indirect, to these insurrectors stands on the same footing as
encouragement to hostile Indians in the days when we still had Indian
wars. Exactly as our aim is to give to the Indian who remains peaceful
the fullest and amplest consideration, but to have it understood that we
will show no weakness if he goes on the warpath, so we must make it
evident, unless we are false to our own traditions and to the demands of
civilization and humanity, that while we will do everything in our power
for the Filipino who is peaceful, we will take the sternest measures
with the Filipino who follows the path of the insurrecto and the
ladrone.

The heartiest praise is due to large numbers of the natives of the
islands for their steadfast loyalty. The Macabebes have been conspicuous
for their courage and devotion to the flag. I recommend that the
Secretary of War be empowered to take some systematic action in the way
of aiding those of these men who are crippled in the service and the
families of those who are killed.

The time has come when there should be additional legislation for the
Philippines. Nothing better can be done for the islands than to
introduce industrial enterprises. Nothing would benefit them so much as
throwing them open to industrial development. The connection between
idleness and mischief is proverbial, and the opportunity to do
remunerative work is one of the surest preventatives of war. Of course
no business man will go into the Philippines unless it is to his
interest to do so; and it is immensely to the interest of the islands
that he should go in. It is therefore necessary that the Congress should
pass laws by which the resources of the islands can be developed; so
that franchises (for limited terms of years) can be granted to companies
doing business in them, and every encouragement be given to the incoming
of business men of every kind.

Not to permit this is to do a wrong to the Philippines. The franchises
must be granted and the business permitted only under regulations which
will guarantee the islands against any kind of improper exploitation.
But the vast natural wealth of the islands must be developed, and the
capital willing to develop it must be given the opportunity. The field
must be thrown open to individual enterprise, which has been the real
factor in the development of every region over which our flag has flown.
It is urgently necessary to enact suitable laws dealing with general
transportation, mining, banking, currency, homesteads, and the use and
ownership of the lands and timber. These laws will give free play to
industrial enterprise; and the commercial development which will surely
follow will accord to the people of the islands the best proofs of the
sincerity of our desire to aid them.

I call your attention most earnestly to the crying need of a cable to
Hawaii and the Philippines, to be continued from the Philippines to
points in Asia. We should not defer a day longer than necessary the
construction of such a cable. It is demanded not merely for commercial
but for political and military considerations.

Either the Congress should immediately provide for the construction of a
Government cable, or else an arrangement should be made by which like
advantages to those accruing from a Government cable may be secured to
the Government by contract with a private cable company.

No single great material work which remains to be undertaken on this
continent is of such consequence to the American people as the building
of a canal across the Isthmus connecting North and South America. Its
importance to the Nation is by no means limited merely to its material
effects upon our business prosperity; and yet with view to these effects
alone it would be to the last degree important for us immediately to
begin it. While its beneficial effects would perhaps be most marked upon
the Pacific Coast and the Gulf and South Atlantic States, it would also
greatly benefit other sections. It is emphatically a work which it is
for the interest of the entire country to begin and complete as soon as
possible; it is one of those great works which only a great nation can
undertake with prospects of success, and which when done are not only
permanent assets in the nation's material interests, but standing
monuments to its constructive ability.

I am glad to be able to announce to you that our negotiations on this
subject with Great Britain, conducted on both sides in a spirit of
friendliness and mutual good will and respect, have resulted in my being
able to lay before the Senate a treaty which if ratified will enable us
to begin preparations for an Isthmian canal at any time, and which
guarantees to this Nation every right that it has ever asked in
connection with the canal. In this treaty, the old Clayton-Bulwer
treaty, so long recognized as inadequate to supply the base for the
construction and maintenance of a necessarily American ship canal, is
abrogated. It specifically provides that the United States alone shall
do the work of building and assume the responsibility of safeguarding
the canal and shall regulate its neutral use by all nations on terms of
equality without the guaranty or interference of any outside nation from
any quarter. The signed treaty will at once be laid before the Senate,
and if approved the Congress can then proceed to give effect to the
advantages it secures us by providing for the building of the canal.

The true end of every great and free people should be self-respecting
peace; and this Nation most earnestly desires sincere and cordial
friendship with all others. Over the entire world, of recent years, wars
between the great civilized powers have become less and less frequent.
Wars with barbarous or semi-barbarous peoples come in an entirely
different category, being merely a most regrettable but necessary
international police duty which must be performed for the sake of the
welfare of mankind. Peace can only be kept with certainty where both
sides wish to keep it; but more and more the civilized peoples are
realizing the wicked folly of war and are attaining that condition of
just and intelligent regard for the rights of others which will in the
end, as we hope and believe, make world-wide peace possible. The peace
conference at The Hague gave definite expression to this hope and belief
and marked a stride toward their attainment.

This same peace conference acquiesced in our statement of the Monroe
Doctrine as compatible with the purposes and aims of the conference.

The Monroe Doctrine should be the cardinal feature of the foreign policy
of all the nations of the two Americas, as it is of the United States.
Just seventy-eight years have passed since President Monroe in his
Annual Message announced that "The American continents are henceforth
not to be considered as subjects for future colonization by any European
power." In other words, the Monroe Doctrine is a declaration that there
must be no territorial aggrandizement by any non-American power at the
expense of any American power on American soil. It is in no wise
intended as hostile to any nation in the Old World. Still less is it
intended to give cover to any aggression by one New World power at the
expense of any other. It is simply a step, and a long step, toward
assuring the universal peace of the world by securing the possibility of
permanent peace on this hemisphere.

During the past century other influences have established the permanence
and independence of the smaller states of Europe. Through the Monroe
Doctrine we hope to be able to safeguard like independence and secure
like permanence for the lesser among the New World nations.

This doctrine has nothing to do with the commercial relations of any
American power, save that it in truth allows each of them to form such
as it desires. In other words, it is really a guaranty of the commercial
independence of the Americas. We do not ask under this doctrine for any
exclusive commercial dealings with any other American state. We do not
guarantee any state against punishment if it misconducts itself,
provided that punishment does not take the form of the acquisition of
territory by any non-American power.

Our attitude in Cuba is a sufficient guaranty of our own good faith. We
have not the slightest desire to secure any territory at the expense of
any of our neighbors. We wish to work with them hand in hand, so that
all of us may be uplifted together, and we rejoice over the good fortune
of any of them, we gladly hail their material prosperity and political
stability, and are concerned and alarmed if any of them fall into
industrial or political chaos. We do not wish to see any Old World
military power grow up on this continent, or to be compelled to become a
military power ourselves. The peoples of the Americas can prosper best
if left to work out their own salvation in their own way.

The work of upbuilding the Navy must be steadily continued. No one point
of our policy, foreign or domestic, is more important than this to the
honor and material welfare, and above all to the peace, of our nation in
the future. Whether we desire it or not, we must henceforth recognize
that we have international duties no less than international rights.
Even if our flag were hauled down in the Philippines and Puerto Rico,
even if we decided not to build the Isthmian Canal, we should need a
thoroughly trained Navy of adequate size, or else be prepared definitely
and for all time to abandon the idea that our nation is among those
whose sons go down to the sea in ships. Unless our commerce is always to
be carried in foreign bottoms, we must have war craft to protect it.

Inasmuch, however, as the American people have no thought of abandoning
the path upon which they have entered, and especially in view of the
fact that the building of the Isthmian Canal is fast becoming one of the
matters which the whole people are united in demanding, it is imperative
that our Navy should be put and kept in the highest state of efficiency,
and should be made to answer to our growing needs. So far from being in
any way a provocation to war, an adequate and highly trained navy is the
best guaranty against war, the cheapest and most effective peace
insurance. The cost of building and maintaining such a navy represents
the very lightest premium for insuring peace which this nation can
possibly pay.

Probably no other great nation in the world is so anxious for peace as
we are. There is not a single civilized power which has anything
whatever to fear from aggressiveness on our part. All we want is peace;
and toward this end we wish to be able to secure the same respect for
our rights from others which we are eager and anxious to extend to their
rights in return, to insure fair treatment to us commercially, and to
guarantee the safety of the American people.

Our people intend to abide by the Monroe Doctrine and to insist upon it
as the one sure means of securing the peace of the Western Hemisphere.
The Navy offers us the only means of making our insistence upon the
Monroe Doctrine anything but a subject of derision to whatever nation
chooses to disregard it. We desire the peace which comes as of right to
the just man armed; not the peace granted on terms of ignominy to the
craven and the weakling.

It is not possible to improvise a navy after war breaks out. The ships
must be built and the men trained long in advance. Some auxiliary
vessels can be turned into makeshifts which will do in default of any
better for the minor work, and a proportion of raw men can be mixed with
the highly trained, their shortcomings being made good by the skill of
their fellows; but the efficient fighting force of the Navy when pitted
against an equal opponent will be found almost exclusively in the war
ships that have been regularly built and in the officers and men who
through years of faithful performance of sea duty have been trained to
handle their formidable but complex and delicate weapons with the
highest efficiency. In the late war with Spain the ships that dealt the
decisive blows at Manila and Santiago had been launched from two to
fourteen years, and they were able to do as they did because the men in
the conning towers, the gun turrets, and the engine-rooms had through
long years of practice at sea learned how to do their duty.

Our present Navy was begun in 1882. At that period our Navy consisted of
a collection of antiquated wooden ships, already almost as out of place
against modern war vessels as the galleys of Alcibiades and
Hamilcar--certainly as the ships of Tromp and Blake. Nor at that time
did we have men fit to handle a modern man-of-war. Under the wise
legislation of the Congress and the successful administration of a
succession of patriotic Secretaries of the Navy, belonging to both
political parties, the work of upbuilding the Navy went on, and ships
equal to any in the world of their kind were continually added; and what
was even more important, these ships were exercised at sea singly and in
squadrons until the men aboard them were able to get the best possible
service out of them. The result was seen in the short war with Spain,
which was decided with such rapidity because of the infinitely greater
preparedness of our Navy than of the Spanish Navy.

While awarding the fullest honor to the men who actually commanded and
manned the ships which destroyed the Spanish sea forces in the
Philippines and in Cuba, we must not forget that an equal meed of praise
belongs to those without whom neither blow could have been struck. The
Congressmen who voted years in advance the money to lay down the ships,
to build the guns, to buy the armor-plate; the Department officials and
the business men and wage-workers who furnished what the Congress had
authorized; the Secretaries of the Navy who asked for and expended the
appropriations; and finally the officers who, in fair weather and foul,
on actual sea service, trained and disciplined the crews of the ships
when there was no war in sight--all are entitled to a full share in the
glory of Manila and Santiago, and the respect accorded by every true
American to those who wrought such signal triumph for our country. It
was forethought and preparation which secured us the overwhelming
triumph of 1898. If we fail to show forethought and preparation now,
there may come a time when disaster will befall us instead of triumph;
and should this time come, the fault will rest primarily, not upon those
whom the accident of events puts in supreme command at the moment, but
upon those who have failed to prepare in advance.

There should be no cessation in the work of completing our Navy. So far
ingenuity has been wholly unable to devise a substitute for the great
war craft whose hammering guns beat out the mastery of the high seas. It
is unsafe and unwise not to provide this year for several additional
Battle ships and heavy armored cruisers, with auxiliary and lighter
craft in proportion; for the exact numbers and character I refer you to
the report of the Secretary of the Navy. But there is something we need
even more than additional ships, and this is additional officers and
men. To provide battle ships and cruisers and then lay them up, with the
expectation of leaving them unmanned until they are needed in actual
war, would be worse than folly; it would be a crime against the Nation.

To send any war ship against a competent enemy unless those aboard it
have been trained by years of actual sea service, including incessant
gunnery practice, would be to invite not merely disaster, but the
bitterest shame and humiliation. Four thousand additional seamen and one
thousand additional marines should be provided; and an increase in the
officers should be provided by making a large addition to the classes at
Annapolis. There is one small matter which should be mentioned in
connection with Annapolis. The pretentious and unmeaning title of "naval
cadet" should be abolished; the title of "midshipman," full of historic
association, should be restored.

Even in time of peace a war ship should be used until it wears out, for
only so can it be kept fit to respond to any emergency. The officers and
men alike should be kept as much as possible on blue water, for it is
there only they can learn their duties as they should be learned. The
big vessels should be manoeuvred in squadrons containing not merely
battle ships, but the necessary proportion of cruisers and scouts. The
torpedo boats should be handled by the younger officers in such manner
as will best fit the latter to take responsibility and meet the
emergencies of actual warfare.

Every detail ashore which can be performed by a civilian should be so
performed, the officer being kept for his special duty in the sea
service. Above all, gunnery practice should be unceasing. It is
important to have our Navy of adequate size, but it is even more
important that ship for ship it should equal in efficiency any navy in
the world. This is possible only with highly drilled crews and officers,
and this in turn imperatively demands continuous and progressive
instruction in target practice, ship handling, squadron tactics, and
general discipline. Our ships must be assembled in squadrons actively
cruising away from harbors and never long at anchor. The resulting wear
upon engines and hulls must be endured; a battle ship worn out in long
training of officers and men is well paid for by the results, while, on
the other hand, no matter in how excellent condition, it is useless if
the crew be not expert.

We now have seventeen battle ships appropriated for, of which nine are
completed and have been commissioned for actual service. The remaining
eight will be ready in from two to four years, but it will take at least
that time to recruit and train the men to fight them. It is of vast
concern that we have trained crews ready for the vessels by the time
they are commissioned. Good ships and good guns are simply good weapons,
and the best weapons are useless save in the hands of men who know how
to fight with them. The men must be trained and drilled under a thorough
and well-planned system of progressive instruction, while the recruiting
must be carried on with still greater vigor. Every effort must be made
to exalt the main function of the officer--the command of men. The
leading graduates of the Naval Academy should be assigned to the
combatant branches, the line and marines.

Many of the essentials of success are already recognized by the General
Board, which, as the central office of a growing staff, is moving
steadily toward a proper war efficiency and a proper efficiency of the
whole Navy, under the Secretary. This General Board, by fostering the
creation of a general staff, is providing for the official and then the
general recognition of our altered conditions as a Nation and of the
true meaning of a great war fleet, which meaning is, first, the best
men, and, second, the best ships.

Messages and Papers of the Presidents, Theodore Roosevelt, vol. 9,
p.6667

The Naval Militia forces are State organizations, and are trained for
coast service, and in event of war they will constitute the inner line
of defense. They should receive hearty encouragement from the General
Government.

But in addition we should at once provide for a National Naval Reserve,
organized and trained under the direction of the Navy Department, and
subject to the call of the Chief Executive whenever war becomes
imminent. It should be a real auxiliary to the naval seagoing peace
establishment, and offer material to be drawn on at once for manning our
ships in time of war. It should be composed of graduates of the Naval
Academy, graduates of the Naval Militia, officers and crews of
coast-line steamers, longshore schooners, fishing vessels, and steam
yachts, together with the coast population about such centers as
lifesaving stations and light-houses.

The American people must either build and maintain an adequate navy or
else make up their minds definitely to accept a secondary position in
international affairs, not merely in political, but in commercial,
matters. It has been well said that there is no surer way of courting
national disaster than to be "opulent, aggressive, and unarmed."

It is not necessary to increase our Army beyond its present size at this
time. But it is necessary to keep it at the highest point of efficiency.
The individual units who as officers and enlisted men compose this Army,
are, we have good reason to believe, at least as efficient as those of
any other army in the entire world. It is our duty to see that their
training is of a kind to insure the highest possible expression of power
to these units when acting in combination.

The conditions of modern war are such as to make an infinitely heavier
demand than ever before upon the individual character and capacity of
the officer and the enlisted man, and to make it far more difficult for
men to act together with effect. At present the fighting must be done in
extended order, which means that each man must act for himself and at
the same time act in combination with others with whom he is no longer
in the old-fashioned elbow-to-elbow touch. Under such conditions a few
men of the highest excellence are worth more than many men without the
special skill which is only found as the result of special training
applied to men of exceptional physique and morale. But nowadays the most
valuable fighting man and the most difficult to perfect is the rifleman
who is also a skillful and daring rider.

The proportion of our cavalry regiments has wisely been increased. The
American cavalryman, trained to manoeuvre and fight with equal facility
on foot and on horseback, is the best type of soldier for general
purposes now to be found in the world. The ideal cavalryman of the
present day is a man who can fight on foot as effectively as the best
infantryman, and who is in addition unsurpassed in the care and
management of his horse and in his ability to fight on horseback.

A general staff should be created. As for the present staff and supply
departments, they should be filled by details from the line, the men so
detailed returning after a while to their line duties. It is very
undesirable to have the senior grades of the Army composed of men who
have come to fill the positions by the mere fact of seniority. A system
should be adopted by which there shall be an elimination grade by grade
of those who seem unfit to render the best service in the next grade.
Justice to the veterans of the Civil War who are still in the Army would
seem to require that in the matter of retirements they be given by law
the same privileges accorded to their comrades in the Navy.

The process of elimination of the least fit should be conducted in a
manner that would render it practically impossible to apply political or
social pressure on behalf of any candidate, so that each man may be
judged purely on his own merits. Pressure for the promotion of civil
officials for political reasons is bad enough, but it is tenfold worse
where applied on behalf of officers of the Army or Navy. Every promotion
and every detail under the War Department must be made solely with
regard to the good of the service and to the capacity and merit of the
man himself. No pressure, political, social, or personal, of any kind,
will be permitted to exercise the least effect in any question of
promotion or detail; and if there is reason to believe that such
pressure is exercised at the instigation of the officer concerned, it
will be held to militate against him. In our Army we cannot afford to
have rewards or duties distributed save on the simple ground that those
who by their own merits are entitled to the rewards get them, and that
those who are peculiarly fit to do the duties are chosen to perform
them.

Every effort should be made to bring the Army to a constantly increasing
state of efficiency. When on actual service no work save that directly
in the line of such service should be required. The paper work in the
Army, as in the Navy, should be greatly reduced. What is needed is
proved power of command and capacity to work well in the field. Constant
care is necessary to prevent dry rot in the transportation and
commissary departments.

Our Army is so small and so much scattered that it is very difficult to
give the higher officers (as well as the lower officers and the enlisted
men) a chance to practice manoeuvres in mass and on a comparatively
large scale. In time of need no amount of individual excellence would
avail against the paralysis which would follow inability to work as a
coherent whole, under skillful and daring leadership. The Congress
should provide means whereby it will be possible to have field exercises
by at least a division of regulars, and if possible also a division of
national guardsmen, once a year. These exercises might take the form of
field manoeuvres; or, if on the Gulf Coast or the Pacific or Atlantic
Seaboard, or in the region of the Great Lakes, the army corps when
assembled could be marched from some inland point to some point on the
water, there embarked, disembarked after a couple of days' journey at
some other point, and again marched inland. Only by actual handling and
providing for men in masses while they are marching, camping, embarking,
and disembarking, will it be possible to train the higher officers to
perform their duties well and smoothly.

A great debt is owing from the public to the men of the Army and Navy.
They should be so treated as to enable them to reach the highest point
of efficiency, so that they may be able to respond instantly to any
demand made upon them to sustain the interests of the Nation and the
honor of the flag. The individual American enlisted man is probably on
the whole a more formidable fighting man than the regular of any other
army. Every consideration should be shown him, and in return the highest
standard of usefulness should be exacted from him. It is well worth
while for the Congress to consider whether the pay of enlisted men upon
second and subsequent enlistments should not be increased to correspond
with the increased value of the veteran soldier.

Much good has already come from the act reorganizing the Army, passed
early in the present year. The three prime reforms, all of them of
literally inestimable value, are, first, the substitution of four-year
details from the line for permanent appointments in the so-called staff
divisions; second, the establishment of a corps of artillery with a
chief at the head; third, the establishment of a maximum and minimum
limit for the Army. It would be difficult to overestimate the
improvement in the efficiency of our Army which these three reforms are
making, and have in part already effected.

The reorganization provided for by the act has been substantially
accomplished. The improved conditions in the Philippines have enabled
the War Department materially to reduce the military charge upon our
revenue and to arrange the number of soldiers so as to bring this number
much nearer to the minimum than to the maximum limit established by law.
There is, however, need of supplementary legislation. Thorough military
education must be provided, and in addition to the regulars the
advantages of this education should be given to the officers of the
National Guard and others in civil life who desire intelligently to fit
themselves for possible military duty. The officers should be given the
chance to perfect themselves by study in the higher branches of this
art. At West Point the education should be of the kind most apt to turn
out men who are good in actual field service; too much stress should not
be laid on mathematics, nor should proficiency therein be held to
establish the right of entry to a corps d'elite. The typical American
officer of the best kind need not be a good mathematician; but he must
be able to master himself, to control others, and to show boldness and
fertility of resource in every emergency.

Action should be taken in reference to the militia and to the raising of
volunteer forces. Our militia law is obsolete and worthless. The
organization and armament of the National Guard of the several States,
which are treated as militia in the appropriations by the Congress,
should be made identical with those provided for the regular forces. The
obligations and duties of the Guard in time of war should be carefully
defined, and a system established by law under which the method of
procedure of raising volunteer forces should be prescribed in advance.
It is utterly impossible in the excitement and haste of impending war to
do this satisfactorily if the arrangements have not been made long
beforehand. Provision should be made for utilizing in the first
volunteer organizations called out the training of those citizens who
have already had experience under arms, and especially for the selection
in advance of the officers of any force which may be raised; for careful
selection of the kind necessary is impossible after the outbreak of war.

That the Army is not at all a mere instrument of destruction has been
shown during the last three years. In the Philippines, Cuba, and Puerto
Rico it has proved itself a great constructive force, a most potent
implement for the upbuilding of a peaceful civilization.

No other citizens deserve so well of the Republic as the veterans, the
survivors of those who saved the Union. They did the one deed which if
left undone would have meant that all else in our history went for
nothing. But for their steadfast prowess in the greatest crisis of our
history, all our annals would be meaningless, and our great experiment
in popular freedom and self-government a gloomy failure. Moreover, they
not only left us a united Nation, but they left us also as a heritage
the memory of the mighty deeds by which the Nation was kept united. We
are now indeed one Nation, one in fact as well as in name; we are united
in our devotion to the flag which is the symbol of national greatness
and unity; and the very completeness of our union enables us all, in
every part of the country, to glory in the valor shown alike by the sons
of the North and the sons of the South in the times that tried men's
souls.

The men who in the last three years have done so well in the East and
the West Indies and on the mainland of Asia have shown that this
remembrance is not lost. In any serious crisis the United States must
rely for the great mass of its fighting men upon the volunteer soldiery
who do not make a permanent profession of the military career; and
whenever such a crisis arises the deathless memories of the Civil War
will give to Americans the lift of lofty purpose which comes to those
whose fathers have stood valiantly in the forefront of the battle.

The merit system of making appointments is in its essence as democratic
and American as the common school system itself. It simply means that in
clerical and other positions where the duties are entirely
non-political, all applicants should have a fair field and no favor,
each standing on his merits as he is able to show them by practical
test. Written competitive examinations offer the only available means in
many cases for applying this system. In other cases, as where laborers
are employed, a system of registration undoubtedly can be widely
extended. There are, of course, places where the written competitive
examination cannot be applied, and others where it offers by no means an
ideal solution, but where under existing political conditions it is,
though an imperfect means, yet the best present means of getting
satisfactory results.

Wherever the conditions have permitted the application of the merit
system in its fullest and widest sense, the gain to the Government has
been immense. The navy-yards and postal service illustrate, probably
better than any other branches of the Government, the great gain in
economy, efficiency, and honesty due to the enforcement of this
principle.

I recommend the passage of a law which will extend the classified
service to the District of Columbia, or will at least enable the
President thus to extend it. In my judgment all laws providing for the
temporary employment of clerks should hereafter contain a provision that
they be selected under the Civil Service Law.

It is important to have this system obtain at home, but it is even more
important to have it applied rigidly in our insular possessions. Not an
office should be filled in the Philippines or Puerto Rico with any
regard to the man's partisan affiliations or services, with any regard
to the political, social, or personal influence which he may have at his
command; in short, heed should be paid to absolutely nothing save the
man's own character and capacity and the needs of the service.

The administration of these islands should be as wholly free from the
suspicion of partisan politics as the administration of the Army and
Navy. All that we ask from the public servant in the Philippines or
Puerto Rico is that he reflect honor on his country by the way in which
he makes that country's rule a benefit to the peoples who have come
under it. This is all that we should ask, and we cannot afford to be
content with less.

The merit system is simply one method of securing honest and efficient
administration of the Government; and in the long run the sole
justification of any type of government lies in its proving itself both
honest and efficient.

The consular service is now organized under the provisions of a law
passed in 1856, which is entirely inadequate to existing conditions. The
interest shown by so many commercial bodies throughout the country in
the reorganization of the service is heartily commended to your
attention. Several bills providing for a new consular service have in
recent years been submitted to the Congress. They are based upon the
just principle that appointments to the service should be made only
after a practical test of the applicant's fitness, that promotions
should be governed by trustworthiness, adaptability, and zeal in the
performance of duty, and that the tenure of office should be unaffected
by partisan considerations.

The guardianship and fostering of our rapidly expanding foreign
commerce, the protection of American citizens resorting to foreign
countries in lawful pursuit of their affairs, and the maintenance of the
dignity of the nation abroad, combine to make it essential that our
consuls should be men of character, knowledge and enterprise. It is true
that the service is now, in the main, efficient, but a standard of
excellence cannot be permanently maintained until the principles set
forth in the bills heretofore submitted to the Congress on this subject
are enacted into law.

In my judgment the time has arrived when we should definitely make up
our minds to recognize the Indian as an individual and not as a member
of a tribe. The General Allotment Act is a mighty pulverizing engine to
break up the tribal mass. It acts directly upon the family and the
individual. Under its provisions some sixty thousand Indians have
already become citizens of the United States. We should now break up the
tribal funds, doing for them what allotment does for the tribal lands;
that is, they should be divided into individual holdings. There will be
a transition period during which the funds will in many cases have to be
held in trust. This is the case also with the lands. A stop should be
put upon the indiscriminate permission to Indians to lease their
allotments. The effort should be steadily to make the Indian work like
any other man on his own ground. The marriage laws of the Indians should
be made the same as those of the whites.

In the schools the education should be elementary and largely
industrial. The need of higher education among the Indians is very, very
limited. On the reservations care should be taken to try to suit the
teaching to the needs of the particular Indian. There is no use in
attempting to induce agriculture in a country suited only for cattle
raising, where the Indian should be made a stock grower. The ration
system, which is merely the corral and the reservation system, is highly
detrimental to the Indians. It promotes beggary, perpetuates pauperism,
and stifles industry. It is an effectual barrier to progress. It must
continue to a greater or less degree as long as tribes are herded on
reservations and have everything in common. The Indian should be treated
as an individual--like the white man. During the change of treatment
inevitable hardships will occur; every effort should be made to minimize
these hardships; but we should not because of them hesitate to make the
change. There should be a continuous reduction in the number of
agencies.

In dealing with the aboriginal races few things are more important than
to preserve them from the terrible physical and moral degradation
resulting from the liquor traffic. We are doing all we can to save our
own Indian tribes from this evil. Wherever by international agreement
this same end can be attained as regards races where we do not possess
exclusive control, every effort should be made to bring it about.

I bespeak the most cordial support from the Congress and the people for
the St. Louis Exposition to commemorate the One Hundredth Anniversary of
the Louisiana Purchase. This purchase was the greatest instance of
expansion in our history. It definitely decided that we were to become a
great continental republic, by far the foremost power in the Western
Hemisphere. It is one of three or four great landmarks in our
history--the great turning points in our development. It is eminently
fitting that all our people should join with heartiest good will in
commemorating it, and the citizens of St. Louis, of Missouri, of all the
adjacent region, are entitled to every aid in making the celebration a
noteworthy event in our annals. We earnestly hope that foreign nations
will appreciate the deep interest our country takes in this Exposition,
and our view of its importance from every standpoint, and that they will
participate in securing its success. The National Government should be
represented by a full and complete set of exhibits.

The people of Charleston, with great energy and civic spirit, are
carrying on an Exposition which will continue throughout most of the
present session of the Congress. I heartily commend this Exposition to
the good will of the people. It deserves all the encouragement that can
be given it. The managers of the Charleston Exposition have requested
the Cabinet officers to place thereat the Government exhibits which have
been at Buffalo, promising to pay the necessary expenses. I have taken
the responsibility of directing that this be done, for I feel that it is
due to Charleston to help her in her praiseworthy effort. In my opinion
the management should not be required to pay all these expenses. I
earnestly recommend that the Congress appropriate at once the small sum
necessary for this purpose.

The Pan-American Exposition at Buffalo has just closed. Both from the
industrial and the artistic standpoint this Exposition has been in a
high degree creditable and useful, not merely to Buffalo but to the
United States. The terrible tragedy of the President's assassination
interfered materially with its being a financial success. The Exposition
was peculiarly in harmony with the trend of our public policy, because
it represented an effort to bring into closer touch all the peoples of
the Western Hemisphere, and give them an increasing sense of unity. Such
an effort was a genuine service to the entire American public.

The advancement of the highest interests of national science and
learning and the custody of objects of art and of the valuable results
of scientific expeditions conducted by the United States have been
committed to the Smithsonian Institution. In furtherance of its declared
purpose--for the "increase and diffusion of knowledge among men"--the
Congress has from time to time given it other important functions. Such
trusts have been executed by the Institution with notable fidelity.
There should be no halt in the work of the Institution, in accordance
with the plans which its Secretary has presented, for the preservation
of the vanishing races of great North American animals in the National
Zoological Park. The urgent needs of the National Museum are recommended
to the favorable consideration of the Congress.

Perhaps the most characteristic educational movement of the past fifty
years is that which has created the modern public library and developed
it into broad and active service. There are now over five thousand
public libraries in the United States, the product of this period. In
addition to accumulating material, they are also striving by
organization, by improvement in method, and by co-operation, to give
greater efficiency to the material they hold, to make it more widely
useful, and by avoidance of unnecessary duplication in process to reduce
the cost of its administration.

In these efforts they naturally look for assistance to the Federal
library, which, though still the Library of Congress, and so entitled,
is the one national library of the United States. Already the largest
single collection of books on the Western Hemisphere, and certain to
increase more rapidly than any other through purchase, exchange, and the
operation of the copyright law, this library has a unique opportunity to
render to the libraries of this country--to American
scholarship--service of the highest importance. It is housed in a
building which is the largest and most magnificent yet erected for
library uses. Resources are now being provided which will develop the
collection properly, equip it with the apparatus and service necessary
to its effective use, render its bibliographic work widely available,
and enable it to become, not merely a center of research, but the chief
factor in great co-operative efforts for the diffusion of knowledge and
the advancement of learning.

For the sake of good administration, sound economy, and the advancement
of science, the Census Office as now constituted should be made a
permanent Government bureau. This would insure better, cheaper, and more
satisfactory work, in the interest not only of our business but of
statistic, economic, and social science.

The remarkable growth of the postal service is shown in the fact that
its revenues have doubled and its expenditures have nearly doubled
within twelve years. Its progressive development compels constantly
increasing outlay, but in this period of business energy and prosperity
its receipts grow so much faster than its expenses that the annual
deficit has been steadily reduced from $11,411,779 in 1897 to $3,923,727
in 1901. Among recent postal advances the success of rural free delivery
wherever established has been so marked, and actual experience has made
its benefits so plain, that the demand for its extension is general and
urgent.

It is just that the great agricultural population should share in the
improvement of the service. The number of rural routes now in operation
is 6,009, practically all established within three years, and there are
6,000 applications awaiting action. It is expected that the number in
operation at the close of the current fiscal year will reach 8,600. The
mail will then be daily carried to the doors of 5,700,000 of our people
who have heretofore been dependent upon distant offices, and one-third
of all that portion of the country which is adapted to it will be
covered by this kind of service.

The full measure of postal progress which might be realized has long
been hampered and obstructed by the heavy burden imposed on the
Government through the intrenched and well-understood abuses which have
grown up in connection with second-class mail matter. The extent of this
burden appears when it is stated that while the second-class matter
makes nearly three-fifths of the weight of all the mail, it paid for the
last fiscal year only $4,294,445 of the aggregate postal revenue of
$111,631,193. If the pound rate of postage, which produces the large
loss thus entailed, and which was fixed by the Congress with the purpose
of encouraging the dissemination of public information, were limited to
the legitimate newspapers and periodicals actually contemplated by the
law, no just exception could be taken. That expense would be the
recognized and accepted cost of a liberal public policy deliberately
adopted for a justifiable end. But much of the matter which enjoys the
privileged rate is wholly outside of the intent of the law, and has
secured admission only through an evasion of its requirements or through
lax construction. The proportion of such wrongly included matter is
estimated by postal experts to be one-half of the whole volume of
second-class mail. If it be only one-third or one-quarter, the magnitude
of the burden is apparent. The Post-Office Department has now undertaken
to remove the abuses so far as is possible by a stricter application of
the law; and it should be sustained in its effort.

Owing to the rapid growth of our power and our interests on the Pacific,
whatever happens in China must be of the keenest national concern to us.

The general terms of the settlement of the questions growing out of the
antiforeign uprisings in China of 1900, having been formulated in a
joint note addressed to China by the representatives of the injured
powers in December last, were promptly accepted by the Chinese
Government. After protracted conferences the plenipotentiaries of the
several powers were able to sign a final protocol with the Chinese
plenipotentiaries on the 7th of last September, setting forth the
measures taken by China in compliance with the demands of the joint
note, and expressing their satisfaction therewith. It will be laid
before the Congress, with a report of the plenipotentiary on behalf of
the United States, Mr. William Woodville Rockhill, to whom high praise
is due for the tact, good judgment, and energy he has displayed in
performing an exceptionally difficult and delicate task.

The agreement reached disposes in a manner satisfactory to the powers of
the various grounds of complaint, and will contribute materially to
better future relations between China and the powers. Reparation has
been made by China for the murder of foreigners during the uprising and
punishment has been inflicted on the officials, however high in rank,
recognized as responsible for or having participated in the outbreak.
Official examinations have been forbidden for a period of five years in
all cities in which foreigners have been murdered or cruelly treated,
and edicts have been issued making all officials directly responsible
for the future safety of foreigners and for the suppression of violence
against them.

Provisions have been made for insuring the future safety of the foreign
representatives in Peking by setting aside for their exclusive use a
quarter of the city which the powers can make defensible and in which
they can if necessary maintain permanent military guards; by dismantling
the military works between the capital and the sea; and by allowing the
temporary maintenance of foreign military posts along this line. An
edict has been issued by the Emperor of China prohibiting for two years
the importation of arms and ammunition into China. China has agreed to
pay adequate indemnities to the states, societies, and individuals for
the losses sustained by them and for the expenses of the military
expeditions sent by the various powers to protect life and restore
order.

Under the provisions of the joint note of December, 1900, China has
agreed to revise the treaties of commerce and navigation and to take
such other steps for the purpose of facilitating foreign trade as the
foreign powers may decide to be needed.

The Chinese Government has agreed to participate financially in the work
of bettering the water approaches to Shanghai and to Tientsin, the
centers of foreign trade in central and northern China, and an
international conservancy board, in which the Chinese Government is
largely represented, has been provided for the improvement of the
Shanghai River and the control of its navigation. In the same line of
commercial advantages a revision of the present tariff on imports has
been assented to for the purpose of substituting specific for ad valorem
duties, and an expert has been sent abroad on the part of the United
States to assist in this work. A list of articles to remain free of
duty, including flour, cereals, and rice, gold and silver coin and
bullion, has also been agreed upon in the settlement.

During these troubles our Government has unswervingly advocated
moderation, and has materially aided in bringing about an adjustment
which tends to enhance the welfare of China and to lead to a more
beneficial intercourse between the Empire and the modern world; while in
the critical period of revolt and massacre we did our full share in
safe-guarding life and property, restoring order, and vindicating the
national interest and honor. It behooves us to continue in these paths,
doing what lies in our power to foster feelings of good will, and
leaving no effort untried to work out the great policy of full and fair
intercourse between China and the nations, on a footing of equal rights
and advantages to all. We advocate the "open door" with all that it
implies; not merely the procurement of enlarged commercial opportunities
on the coasts, but access to the interior by the waterways with which
China has been so extraordinarily favored. Only by bringing the people
of China into peaceful and friendly community of trade with all the
peoples of the earth can the work now auspiciously begun be carried to
fruition. In the attainment of this purpose we necessarily claim parity
of treatment, under the conventions, throughout the Empire for our trade
and our citizens with those of all other powers.

We view with lively interest and keen hopes of beneficial results the
proceedings of the Pan-American Congress, convoked at the invitation of
Mexico, and now sitting at the Mexican capital. The delegates of the
United States are under the most liberal instructions to cooperate with
their colleagues in all matters promising advantage to the great family
of American commonwealths, as well in their relations among themselves
as in their domestic advancement and in their intercourse with the world
at large.

My predecessor communicated to the Congress the fact that the Weil and
La Abra awards against Mexico have been adjudged by the highest courts
of our country to have been obtained through fraud and perjury on the
part of the claimants, and that in accordance with the acts of the
Congress the money remaining in the hands of the Secretary of State on
these awards has been returned to Mexico. A considerable portion of the
money received from Mexico on these awards had been paid by this
Government to the claimants before the decision of the courts was
rendered. My judgment is that the Congress should return to Mexico an
amount equal to the sums thus already paid to the claimants.

The death of Queen Victoria caused the people of the United States deep
and heartfelt sorrow, to which the Government gave full expression. When
President McKinley died, our Nation in turn received from every quarter
of the British Empire expressions of grief and sympathy no less sincere.
The death of the Empress Dowager Frederick of Germany also aroused the
genuine sympathy of the American people; and this sympathy was cordially
reciprocated by Germany when the President was assassinated. Indeed,
from every quarter of the civilized world we received, at the time of
the President's death, assurances of such grief and regard as to touch
the hearts of our people. In the midst of our affliction we reverently
thank the Almighty that we are at peace with the nations of mankind; and
we firmly intend that our policy shall be such as to continue unbroken
these international relations of mutual respect and good will.

***

State of the Union Address
Theodore Roosevelt
December 2, 1902

To the Senate and House of Representatives:

We still continue in a period of unbounded prosperity. This prosperity
is not the creature of law, but undoubtedly the laws under which we work
have been instrumental in creating the conditions which made it
possible, and by unwise legislation it would be easy enough to destroy
it. There will undoubtedly be periods of depression. The wave will
recede; but the tide will advance. This Nation is seated on a continent
flanked by two great oceans. It is composed of men the descendants of
pioneers, or, in a sense, pioneers themselves; of men winnowed out from
among the nations of the Old World by the energy, boldness, and love of
adventure found in their own eager hearts. Such a Nation, so placed,
will surely wrest success from fortune.

As a people we have played a large part in the world, and we are bent
upon making our future even larger than the past. In particular, the
events of the last four years have definitely decided that, for woe or
for weal, our place must be great among the nations. We may either fall
greatly or succeed greatly; but we can not avoid the endeavor from which
either great failure or great success must come. Even if we would, we
can not play a small part. If we should try, all that would follow would
be that we should play a large part ignobly and shamefully.

But our people, the sons of the men of the Civil War, the sons of the
men who had iron in their blood, rejoice in the present and face the
future high of heart and resolute of will. Ours is not the creed of the
weakling and the coward; ours is the gospel of hope and of triumphant
endeavor. We do not shrink from the struggle before us. There are many
problems for us to face at the outset of the twentieth century--grave
problems abroad and still graver at home; but we know that we can solve
them and solve them well, provided only that we bring to the solution
the qualities of head and heart which were shown by the men who, in the
days of Washington, rounded this Government, and, in the days of
Lincoln, preserved it.

No country has ever occupied a higher plane of material well-being than
ours at the present moment. This well-being is due to no sudden or
accidental causes, but to the play of the economic forces in this
country for over a century; to our laws, our sustained and continuous
policies; above all, to the high individual average of our citizenship.
Great fortunes have been won by those who have taken the lead in this
phenomenal industrial development, and most of these fortunes have been
won not by doing evil, but as an incident to action which has benefited
the community as a whole. Never before has material well-being been so
widely diffused among our people. Great fortunes have been accumulated,
and yet in the aggregate these fortunes are small Indeed when compared
to the wealth of the people as a whole. The plain people are better off
than they have ever been before. The insurance companies, which are
practically mutual benefit societies--especially helpful to men of
moderate means--represent accumulations of capital which are among the
largest in this country. There are more deposits in the savings banks,
more owners of farms, more well-paid wage-workers in this country now
than ever before in our history. Of course, when the conditions have
favored the growth of so much that was good, they have also favored
somewhat the growth of what was evil. It is eminently necessary that we
should endeavor to cut out this evil, but let us keep a due sense of
proportion; let us not in fixing our gaze upon the lesser evil forget
the greater good. The evils are real and some of them are menacing, but
they are the outgrowth, not of misery or decadence, but of
prosperity--of the progress of our gigantic industrial development. This
industrial development must not be checked, but side by side with it
should go such progressive regulation as will diminish the evils. We
should fail in our duty if we did not try to remedy the evils, but we
shall succeed only if we proceed patiently, with practical common sense
as well as resolution, separating the good from the bad and holding on
to the former while endeavoring to get rid of the latter.

In my Message to the present Congress at its first session I discussed
at length the question of the regulation of those big corporations
commonly doing an interstate business, often with some tendency to
monopoly, which are popularly known as trusts. The experience of the
past year has emphasized, in my opinion, the desirability of the steps I
then proposed. A fundamental requisite of social efficiency is a high
standard of individual energy and excellence; but this is in no wise
inconsistent with power to act in combination for aims which can not so
well be achieved by the individual acting alone. A fundamental base of
civilization is the inviolability of property; but this is in no wise
inconsistent with the right of society to regulate the exercise of the
artificial powers which it confers upon the owners of property, under
the name of corporate franchises, in such a way as to prevent the misuse
of these powers. Corporations, and especially combinations of
corporations, should be managed under public regulation. Experience has
shown that under our system of government the necessary supervision can
not be obtained by State action. It must therefore be achieved by
national action. Our aim is not to do away with corporations; on the
contrary, these big aggregations are an inevitable development of modern
industrialism, and the effort to destroy them would be futile unless
accomplished in ways that would work the utmost mischief to the entire
body politic. We can do nothing of good in the way of regulating and
supervising these corporations until we fix clearly in our minds that we
are not attacking the corporations, but endeavoring to do away with any
evil in them. We are not hostile to them; we are merely determined that
they shall be so handled as to subserve the public good. We draw the
line against misconduct, not against wealth. The capitalist who, alone
or in conjunction with his fellows, performs some great industrial feat
by which he wins money is a welldoer, not a wrongdoer, provided only he
works in proper and legitimate lines. We wish to favor such a man when
he does well. We wish to supervise and control his actions only to
prevent him from doing ill. Publicity can do no harm to the honest
corporation; and we need not be over tender about sparing the dishonest
corporation.  In curbing and regulating the combinations of capital
which are, or may become, injurious to the public we must be careful not
to stop the great enterprises which have legitimately reduced the cost
of production, not to abandon the place which our country has won in the
leadership of the international industrial world, not to strike down
wealth with the result of closing factories and mines, of turning the
wage-worker idle in the streets and leaving the farmer without a market
for what he grows. Insistence upon the impossible means delay in
achieving the possible, exactly as, on the other hand, the stubborn
defense alike of what is good and what is bad in the existing system,
the resolute effort to obstruct any attempt at betterment, betrays
blindness to the historic truth that wise evolution is the sure
safeguard against revolution.

No more important subject can come before the Congress than this of the
regulation of interstate business. This country can not afford to sit
supine on the plea that under our peculiar system of government we are
helpless in the presence of the new conditions, and unable to grapple
with them or to cut out whatever of evil has arisen in connection with
them. The power of the Congress to regulate interstate commerce is an
absolute and unqualified grant, and without limitations other than those
prescribed by the Constitution. The Congress has constitutional
authority to make all laws necessary and proper for executing this
power, and I am satisfied that this power has not been exhausted by any
legislation now on the statute books. It is evident, therefore, that
evils restrictive of commercial freedom and entailing restraint upon
national commerce fall within the regulative power of the Congress, and
that a wise and reasonable law would be a necessary and proper exercise
of Congressional authority to the end that such evils should be
eradicated.

I believe that monopolies, unjust discriminations, which prevent or
cripple competition, fraudulent overcapitalization, and other evils in
trust organizations and practices which injuriously affect interstate
trade can be prevented under the power of the Congress to "regulate
commerce with foreign nations and among the several States" through
regulations and requirements operating directly upon such commerce, the
instrumentalities thereof, and those engaged therein.

I earnestly recommend this subject to the consideration of the Congress
with a view to the passage of a law reasonable in its provisions and
effective in its operations, upon which the questions can be finally
adjudicated that now raise doubts as to the necessity of constitutional
amendment. If it prove impossible to accomplish the purposes above set
forth by such a law, then, assuredly, we should not shrink from amending
the Constitution so as to secure beyond peradventure the power sought.

The Congress has not heretofore made any appropriation for the better
enforcement of the antitrust law as it now stands. Very much has been
done by the Department of Justice in securing the enforcement of this
law, but much more could be done if the Congress would make a special
appropriation for this purpose, to be expended under the direction of
the Attorney-General.

One proposition advocated has been the reduction of the tariff as a
means of reaching the evils of the trusts which fall within the category
I have described. Not merely would this be wholly ineffective, but the
diversion of our efforts in such a direction would mean the abandonment
of all intelligent attempt to do away with these evils. Many of the
largest corporations, many of those which should certainly be included
in any proper scheme of regulation, would not be affected in the
slightest degree by a change in the tariff, save as such change
interfered with the general prosperity of the country. The only relation
of the tariff to big corporations as a whole is that the tariff makes
manufactures profitable, and the tariff remedy proposed would be in
effect simply to make manufactures unprofitable. To remove the tariff as
a punitive measure directed against trusts would inevitably result in
ruin to the weaker competitors who are struggling against them. Our aim
should be not by unwise tariff changes to give foreign products the
advantage over domestic products, but by proper regulation to give
domestic competition a fair chance; and this end can not be reached by
any tariff changes which would affect unfavorably all domestic
competitors, good and bad alike. The question of regulation of the
trusts stands apart from the question of tariff revision.

Stability of economic policy must always be the prime economic need of
this country. This stability should not be fossilization. The country
has acquiesced in the wisdom of the protective-tariff principle. It is
exceedingly undesirable that this system should be destroyed or that
there should be violent and radical changes therein. Our past experience
shows that great prosperity in this country has always come under a
protective tariff; and that the country can not prosper under fitful
tariff changes at short intervals. Moreover, if the tariff laws as a
whole work well, and if business has prospered under them and is
prospering, it is better to endure for a time slight inconveniences and
inequalities in some schedules than to upset business by too quick and
too radical changes. It is most earnestly to be wished that we could
treat the tariff from the standpoint solely of our business needs. It
is, perhaps, too much to hope that partisanship may be entirely excluded
from consideration of the subject, but at least it can be made secondary
to the business interests of the country--that is, to the interests of
our people as a whole. Unquestionably these business interests will best
be served if together with fixity of principle as regards the tariff we
combine a system which will permit us from time to time to make the
necessary reapplication of the principle to the shifting national needs.
We must take scrupulous care that the reapplication shall be made in
such a way that it will not amount to a dislocation of our system, the
mere threat of which (not to speak of the performance) would produce
paralysis in the business energies of the community. The first
consideration in making these changes would, of course, be to preserve
the principle which underlies our whole tariff system--that is, the
principle of putting American business interests at least on a full
equality with interests abroad, and of always allowing a sufficient rate
of duty to more than cover the difference between the labor cost here
and abroad. The well-being of the wage-worker, like the well-being of
the tiller of the soil, should be treated as an essential in shaping our
whole economic policy. There must never be any change which will
jeopardize the standard of comfort, the standard of wages of the
American wage-worker.

One way in which the readjustment sought can be reached is by
reciprocity treaties. It is greatly to be desired that such treaties may
be adopted. They can be used to widen our markets and to give a greater
field for the activities of our producers on the one hand, and on the
other hand to secure in practical shape the lowering of duties when they
are no longer needed for protection among our own people, or when the
minimum of damage done may be disregarded for the sake of the maximum of
good accomplished. If it prove impossible to ratify the pending
treaties, and if there seem to be no warrant for the endeavor to execute
others, or to amend the pending treaties so that they can be ratified,
then the same end--to secure reciprocity--should be met by direct
legislation.

Wherever the tariff conditions are such that a needed change can not
with advantage be made by the application of the reciprocity idea, then
it can be made outright by a lowering of duties on a given product. If
possible, such change should be made only after the fullest
consideration by practical experts, who should approach the subject from
a business standpoint, having in view both the particular interests
affected and the commercial well-being of the people as a whole. The
machinery for providing such careful investigation can readily be
supplied. The executive department has already at its disposal methods
of collecting facts and figures; and if the Congress desires additional
consideration to that which will be given the subject by its own
committees, then a commission of business experts can be appointed whose
duty it should be to recommend action by the Congress after a deliberate
and scientific examination of the various schedules as they are affected
by the changed and changing conditions. The unhurried and unbiased
report of this commission would show what changes should be made in the
various schedules, and how far these changes could go without also
changing the great prosperity which this country is now enjoying, or
upsetting its fixed economic policy.

The cases in which the tariff can produce a monopoly are so few as to
constitute an inconsiderable factor in the question; but of course if in
any case it be found that a given rate of duty does promote a monopoly
which works ill, no protectionist would object to such reduction of the
duty as would equalize competition.

In my judgment, the tariff on anthracite coal should be removed, and
anthracite put actually, where it now is nominally, on the free list.
This would have no effect at all save in crises; but in crises it might
be of service to the people.

Interest rates are a potent factor in business activity, and in order
that these rates may be equalized to meet the varying needs of the
seasons and of widely separated communities, and to prevent the
recurrence of financial stringencies which injuriously affect legitimate
business, it is necessary that there should be an element of elasticity
in our monetary system. Banks are the natural servants of commerce, and
upon them should be placed, as far as practicable, the burden of
furnishing and maintaining a circulation adequate to supply the needs of
our diversified industries and of our domestic and foreign commerce; and
the issue of this should be so regulated that a sufficient supply should
be always available for the business interests of the country.

It would be both unwise and unnecessary at this time to attempt to
reconstruct our financial system, which has been the growth of a
century; but some additional legislation is, I think, desirable. The
mere outline of any plan sufficiently comprehensive to meet these
requirements would transgress the appropriate limits of this
communication. It is suggested, however, that all future legislation on
the subject should be with the view of encouraging the use of such
instrumentalities as will automatically supply every legitimate demand
of productive industries and of commerce, not only in the amount, but in
the character of circulation; and of making all kinds of money
interchangeable, and, at the will of the holder, convertible into the
established gold standard.

I again call your attention to the need of passing a proper immigration
law, covering the points outlined in my Message to you at the first
session of the present Congress; substantially such a bill has already
passed the House.

How to secure fair treatment alike for labor and for capital, how to
hold in check the unscrupulous man, whether employer or employee,
without weakening individual initiative, without hampering and cramping
the industrial development of the country, is a problem fraught with
great difficulties and one which it is of the highest importance to
solve on lines of sanity and far-sighted common sense as well as of
devotion to the right. This is an era of federation and combination.
Exactly as business men find they must often work through corporations,
and as it is a constant tendency of these corporations to grow larger,
so it is often necessary for laboring men to work in federations, and
these have become important factors of modern industrial life. Both
kinds of federation, capitalistic and labor, can do much good, and as a
necessary corollary they can both do evil. Opposition to each kind of
organization should take the form of opposition to whatever is bad in
the conduct of any given corporation or union--not of attacks upon
corporations as such nor upon unions as such; for some of the most
far-reaching beneficent work for our people has been accomplished
through both corporations and unions. Each must refrain from arbitrary
or tyrannous interference with the rights of others. Organized capital
and organized labor alike should remember that in the long run the
interest of each must be brought into harmony with the interest of the
general public; and the conduct of each must conform to the fundamental
rules of obedience to the law, of individual freedom, and of justice and
fair dealing toward all. Each should remember that in addition to power
it must strive after the realization of healthy, lofty, and generous
ideals. Every employer, every wage-worker, must be guaranteed his
liberty and his right to do as he likes with his property or his labor
so long as he does not infringe upon the rights of others. It is of the
highest importance that employer and employee alike should endeavor to
appreciate each the viewpoint of the other and the sure disaster that
will come upon both in the long run if either grows to take as habitual
an attitude of sour hostility and distrust toward the other. Few people
deserve better of the country than those representatives both of capital
and labor--and there are many such--who work continually to bring about
a good understanding of this kind, based upon wisdom and upon broad and
kindly sympathy between employers and employed. Above all, we need to
remember that any kind of class animosity in the political world is, if
possible, even more wicked, even more destructive to national welfare,
than sectional, race, or religious animosity. We can get good government
only upon condition that we keep true to the principles upon which this
Nation was founded, and judge each man not as a part of a class, but
upon his individual merits. All that we have a right to ask of any man,
rich or poor, whatever his creed, his occupation, his birthplace, or his
residence, is that he shall act well and honorably by his neighbor and
by, his country. We are neither for the rich man as such nor for the
poor man as such; we are for the upright man, rich or poor. So far as
the constitutional powers of the National Government touch these matters
of general and vital moment to the Nation, they should be exercised in
conformity with the principles above set forth.

It is earnestly hoped that a secretary of commerce may be created, with
a seat in the Cabinet. The rapid multiplication of questions affecting
labor and capital, the growth and complexity of the organizations
through which both labor and capital now find expression, the steady
tendency toward the employment of capital in huge corporations, and the
wonderful strides of this country toward leadership in the international
business world justify an urgent demand for the creation of such a
position. Substantially all the leading commercial bodies in this
country have united in requesting its creation. It is desirable that
some such measure as that which has already passed the Senate be enacted
into law. The creation of such a department would in itself be an
advance toward dealing with and exercising supervision over the whole
subject of the great corporations doing an interstate business; and with
this end in view, the Congress should endow the department with large
powers, which could be increased as experience might show the need.

I hope soon to submit to the Senate a reciprocity treaty with Cuba. On
May 20 last the United States kept its promise to the island by formally
vacating Cuban soil and turning Cuba over to those whom her own people
had chosen as the first officials of the new Republic.

Cuba lies at our doors, and whatever affects her for good or for ill
affects us also. So much have our people felt this that in the Platt
amendment we definitely took the ground that Cuba must hereafter have
closer political relations with us than with any other power. Thus in a
sense Cuba has become a part of our international political system. This
makes it necessary that in return she should be given some of the
benefits of becoming part of our economic system. It is, from our own
standpoint, a short-sighted and mischievous policy to fail to recognize
this need. Moreover, it is unworthy of a mighty and generous nation,
itself the greatest and most successful republic in history, to refuse
to stretch out a helping hand to a young and weak sister republic just
entering upon its career of independence. We should always fearlessly
insist upon our rights in the face of the strong, and we should with
ungrudging hand do our generous duty by the weak. I urge the adoption of
reciprocity with Cuba not only because it is eminently for our own
interests to control the Cuban market and by every means to foster our
supremacy in the tropical lands and waters south of us, but also because
we, of the giant republic of the north, should make all our sister
nations of the American Continent feel that whenever they will permit it
we desire to show ourselves disinterestedly and effectively their
friend.

A convention with Great Britain has been concluded, which will be at
once laid before the Senate for ratification, providing for reciprocal
trade arrangements between the United States and Newfoundland on
substantially the lines of the convention formerly negotiated by the
Secretary of State, Mr. Blaine. I believe reciprocal trade relations
will be greatly to the advantage of both countries.

As civilization grows warfare becomes less and less the normal condition
of foreign relations. The last century has seen a marked diminution of
wars between civilized powers; wars with uncivilized powers are largely
mere matters of international police duty, essential for the welfare of
the world. Wherever possible, arbitration or some similar method should
be employed in lieu of war to settle difficulties between civilized
nations, although as yet the world has not progressed sufficiently to
render it possible, or necessarily desirable, to invoke arbitration in
every case. The formation of the international tribunal which sits at
The Hague is an event of good omen from which great consequences for the
welfare of all mankind may flow. It is far better, where possible, to
invoke such a permanent tribunal than to create special arbitrators for
a given purpose.

It is a matter of sincere congratulation to our country that the United
States and Mexico should have been the first to use the good offices of
The Hague Court. This was done last summer with most satisfactory
results in the case of a claim at issue between us and our sister
Republic. It is earnestly to be hoped that this first case will serve as
a precedent for others, in which not only the United States but foreign
nations may take advantage of the machinery already in existence at The
Hague.

I commend to the favorable consideration of the Congress the Hawaiian
fire claims, which were the subject of careful investigation during the
last session.

The Congress has wisely provided that we shall build at once an isthmian
canal, if possible at Panama. The Attorney-General reports that we can
undoubtedly acquire good title from the French Panama Canal Company.
Negotiations are now pending with Colombia to secure her assent to our
building the canal. This canal will be one of the greatest engineering
feats of the twentieth century; a greater engineering feat than has yet
been accomplished during the history of mankind. The work should be
carried out as a continuing policy without regard to change of
Administration; and it should be begun under circumstances which will
make it a matter of pride for all Administrations to continue the
policy.

The canal will be of great benefit to America, and of importance to all
the world. It will be of advantage to us industrially and also as
improving our military position. It will be of advantage to the
countries of tropical America. It is earnestly to be hoped that all of
these countries will do as some of them have already done with signal
success, and will invite to their shores commerce and improve their
material conditions by recognizing that stability and order are the
prerequisites of successful development. No independent nation in
America need have the slightest fear of aggression from the United
States. It behoves each one to maintain order within its own borders and
to discharge its just obligations to foreigners. When this is done, they
can rest assured that, be they strong or weak, they have nothing to
dread from outside interference. More and more the increasing
interdependence and complexity of international political and economic
relations render it incumbent on all civilized and orderly powers to
insist on the proper policing of the world.

During the fall of 1901 a communication was addressed to the Secretary
of State, asking whether permission would be granted by the President to
a corporation to lay a cable from a point on the California coast to the
Philippine Islands by way of Hawaii. A statement of conditions or terms
upon which such corporation would undertake to lay and operate a cable
was volunteered.

Inasmuch as the Congress was shortly to convene, and Pacific-cable
legislation had been the subject of consideration by the Congress for
several years, it seemed to me wise to defer action upon the application
until the Congress had first an opportunity to act. The Congress
adjourned without taking any action, leaving the matter in exactly the
same condition in which it stood when the Congress convened.

Meanwhile it appears that the Commercial Pacific Cable Company had
promptly proceeded with preparations for laying its cable. It also made
application to the President for access to and use of soundings taken by
the U. S. S. Nero, for the purpose of discovering a practicable route
for a trans-Pacific cable, the company urging that with access to these
soundings it could complete its cable much sooner than if it were
required to take soundings upon its own account. Pending consideration
of this subject, it appeared important and desirable to attach certain
conditions to the permission to examine and use the soundings, if it
should be granted.

In consequence of this solicitation of the cable company, certain
conditions were formulated, upon which the President was willing to
allow access to these soundings and to consent to the landing and laying
of the cable, subject to any alterations or additions thereto imposed by
the Congress. This was deemed proper, especially as it was clear that a
cable connection of some kind with China, a foreign country, was a part
of the company's plan. This course was, moreover, in accordance with a
line of precedents, including President Grant's action in the case of
the first French cable, explained to the Congress in his Annual Message
of December, 1875, and the instance occurring in 1879 of the second
French cable from Brest to St. Pierre, with a branch to Cape Cod.

These conditions prescribed, among other things, a maximum rate for
commercial messages and that the company should construct a line from
the Philippine Islands to China, there being at present, as is well
known, a British line from Manila to Hongkong.

The representatives of the cable company kept these conditions long
under consideration, continuing, in the meantime, to prepare for laying
the cable. They have, however, at length acceded to them, and an
all-American line between our Pacific coast and the Chinese Empire, by
way of Honolulu and the Philippine Islands, is thus provided for, and is
expected within a few months to be ready for business.

Among the conditions is one reserving the power of the Congress to
modify or repeal any or all of them. A copy of the conditions is
herewith transmitted.

Of Porto Rico it is only necessary to say that the prosperity of the
island and the wisdom with which it has been governed have been such as
to make it serve as an example of all that is best in insular
administration.

On July 4 last, on the one hundred and twenty-sixth anniversary of the
declaration of our independence, peace and amnesty were promulgated in
the Philippine Islands. Some trouble has since from time to time
threatened with the Mohammedan Moros, but with the late insurrectionary
Filipinos the war has entirely ceased. Civil government has now been
introduced. Not only does each Filipino enjoy such rights to life,
liberty, and the pursuit of happiness as he has never before known
during the recorded history of the islands, but the people taken as a
whole now enjoy a measure of self-government greater than that granted
to any other Orientals by any foreign power and greater than that
enjoyed by any other Orientals under their own governments, save the
Japanese alone. We have not gone too far in granting these rights of
liberty and self-government; but we have certainly gone to the limit
that in the interests of the Philippine people themselves it was wise or
just to go. To hurry matters, to go faster than we are now going, would
entail calamity on the people of the islands. No policy ever entered
into by the American people has vindicated itself in more signal manner
than the policy of holding the Philippines. The triumph of our arms,
above all the triumph of our laws and principles, has come sooner than
we had any right to expect. Too much praise can not be given to the Army
for what it has done in the Philippines both in warfare and from an
administrative standpoint in preparing the way for civil government; and
similar credit belongs to the civil authorities for the way in which
they have planted the seeds of self-government in the ground thus made
ready for them. The courage, the unflinching endurance, the high
soldierly efficiency; and the general kind-heartedness and humanity of
our troops have been strikingly manifested. There now remain only some
fifteen thousand troops in the islands. All told, over one hundred
thousand have been sent there. Of course, there have been individual
instances of wrongdoing among them. They warred under fearful
difficulties of climate and surroundings; and under the strain of the
terrible provocations which they continually received from their foes,
occasional instances of cruel retaliation occurred. Every effort has
been made to prevent such cruelties, and finally these efforts have been
completely successful. Every effort has also been made to detect and
punish the wrongdoers. After making all allowance for these misdeeds, it
remains true that few indeed have been the instances in which war has
been waged by a civilized power against semicivilized or barbarous
forces where there has been so little wrongdoing by the victors as in
the Philippine Islands. On the other hand, the amount of difficult,
important, and beneficent work which has been done is well-nigh
incalculable.

Taking the work of the Army and the civil authorities together, it may
be questioned whether anywhere else in modern times the world has seen a
better example of real constructive statesmanship than our people have
given in the Philippine Islands. High praise should also be given those
Filipinos, in the aggregate very numerous, who have accepted the new
conditions and joined with our representatives to work with hearty good
will for the welfare of the islands.

The Army has been reduced to the minimum allowed by law. It is very
small for the size of the Nation, and most certainly should be kept at
the highest point of efficiency. The senior officers are given scant
chance under ordinary conditions to exercise commands commensurate with
their rank, under circumstances which would fit them to do their duty in
time of actual war. A system of maneuvering our Army in bodies of some
little size has been begun and should be steadily continued. Without
such maneuvers it is folly to expect that in the event of hostilities
with any serious foe even a small army corps could be handled to
advantage. Both our officers and enlisted men are such that we can take
hearty pride in them. No better material can be found. But they must be
thoroughly trained, both as individuals and in the mass. The
marksmanship of the men must receive special attention. In the
circumstances of modern warfare the man must act far more on his own
individual responsibility than ever before, and the high individual
efficiency of the unit is of the utmost importance. Formerly this unit
was the regiment; it is now not the regiment, not even the troop or
company; it is the individual soldier. Every effort must be made to
develop every workmanlike and soldierly quality in both the officer and
the enlisted man.

I urgently call your attention to the need of passing a bill providing
for a general staff and for the reorganization of the supply departments
on the lines of the bill proposed by the Secretary of War last year.
When the young officers enter the Army from West Point they probably
stand above their compeers in any other military service. Every effort
should be made, by training, by reward of merit, by scrutiny into their
careers and capacity, to keep them of the same high relative excellence
throughout their careers.

The measure providing for the reorganization of the militia system and
for securing the highest efficiency in the National Guard, which has
already passed the House, should receive prompt attention and action. It
is of great importance that the relation of the National Guard to the
militia and volunteer forces of the United States should be defined, and
that in place of our present obsolete laws a practical and efficient
system should be adopted.

Provision should be made to enable the Secretary of War to keep cavalry
and artillery horses, worn-out in long performance of duty. Such horses
fetch but a trifle when sold; and rather than turn them out to the
misery awaiting them when thus disposed of, it would be better to employ
them at light work around the posts, and when necessary to put them
painlessly to death.

For the first time in our history naval maneuvers on a large scale are
being held under the immediate command of the Admiral of the Navy.
Constantly increasing attention is being paid to the gunnery of the
Navy, but it is yet far from what it should be. I earnestly urge that
the increase asked for by the Secretary of the Navy in the appropriation
for improving the markmanship be granted. In battle the only shots that
count are the shots that hit. It is necessary to provide ample funds for
practice with the great guns in time of peace. These funds must provide
not only for the purchase of projectiles, but for allowances for prizes
to encourage the gun crews, and especially the gun pointers, and for
perfecting an intelligent system under which alone it is possible to get
good practice.

There should be no halt in the work of building up the Navy, providing
every year additional fighting craft. We are a very rich country, vast
in extent of territory and great in population; a country, moreover,
which has an Army diminutive indeed when compared with that of any other
first-class power. We have deliberately made our own certain foreign
policies which demand the possession of a first-class navy. The isthmian
canal will greatly increase the efficiency of our Navy if the Navy is of
sufficient size; but if we have an inadequate navy, then the building of
the canal would be merely giving a hostage to any power of superior
strength. The Monroe Doctrine should be treated as the cardinal feature
of American foreign policy; but it would be worse than idle to assert it
unless we intended to back it up, and it can be backed up only by a
thoroughly good navy. A good navy is not a provocative of war. It is the
surest guaranty of peace.

Each individual unit of our Navy should be the most efficient of its
kind as regards both material and personnel that is to be found in the
world. I call your special attention to the need of providing for the
manning of the ships. Serious trouble threatens us if we can not do
better than we are now doing as regards securing the services of a
sufficient number of the highest type of sailormen, of sea mechanics.
The veteran seamen of our war ships are of as high a type as can be
found in any navy which rides the waters of the world; they are
unsurpassed in daring, in resolution, in readiness, in thorough
knowledge of their profession. They deserve every consideration that can
be shown them. But there are not enough of them. It is no more possible
to improvise a crew than it is possible to improvise a war ship. To
build the finest ship, with the deadliest battery, and to send it afloat
with a raw crew, no matter how brave they were individually, would be to
insure disaster if a foe of average capacity were encountered. Neither
ships nor men can be improvised when war has begun.

We need a thousand additional officers in order to properly man the
ships now provided for and under construction. The classes at the Naval
School at Annapolis should be greatly enlarged. At the same time that we
thus add the officers where we need them, we should facilitate the
retirement of those at the head of the list whose usefulness has become
impaired. Promotion must be fostered if the service is to be kept
efficient.

The lamentable scarcity of officers, and the large number of recruits
and of unskilled men necessarily put aboard the new vessels as they have
been commissioned, has thrown upon our officers, and especially on the
lieutenants and junior grades, unusual labor and fatigue and has gravely
strained their powers of endurance. Nor is there sign of any immediate
let-up in this strain. It must continue for some time longer, until more
officers are graduated from Annapolis, and until the recruits become
trained and skillful in their duties. In these difficulties incident
upon the development of our war fleet the conduct of all our officers
has been creditable to the service, and the lieutenants and junior
grades in particular have displayed an ability and a steadfast
cheerfulness which entitles them to the ungrudging thanks of all who
realize the disheartening trials and fatigues to which they are of
necessity subjected.

There is not a cloud on the horizon at present. There seems not the
slightest chance of trouble with a foreign power. We most earnestly hope
that this state of things may continue; and the way to insure its
continuance is to provide for a thoroughly efficient navy. The refusal
to maintain such a navy would invite trouble, and if trouble came would
insure disaster. Fatuous self-complacency or vanity, or
short-sightedness in refusing to prepare for danger, is both foolish and
wicked in such a nation as ours; and past experience has shown that such
fatuity in refusing to recognize or prepare for any crisis in advance is
usually succeeded by a mad panic of hysterical fear once the crisis has
actually arrived.

The striking increase in the revenues of the Post-Office Department
shows clearly the prosperity of our people and the increasing activity
of the business of the country.

The receipts of the Post-Office Department for the fiscal year ending
June 30 last amounted to $121,848,047.26, an increase of $10,216,853.87
over the preceding year, the largest increase known in the history of
the postal service. The magnitude of this increase will best appear from
the fact that the entire postal receipts for the year 1860 amounted to
but $8,518,067.

Rural free-delivery service is no longer in the experimental stage; it
has become a fixed policy. The results following its introduction have
fully justified the Congress in the large appropriations made for its
establishment and extension. The average yearly increase in post-office
receipts in the rural districts of the country is about two per cent. We
are now able, by actual results, to show that where rural free-delivery
service has been established to such an extent as to enable us to make
comparisons the yearly increase has been upward of ten per cent.

On November 1, 1902, 11,650 rural free-delivery routes had been
established and were in operation, covering about one-third of the
territory of the United States available for rural free-delivery
service. There are now awaiting the action of the Department petitions
and applications for the establishment of 10,748 additional routes. This
shows conclusively the want which the establishment of the service has
met and the need of further extending it as rapidly as possible. It is
justified both by the financial results and by the practical benefits to
our rural population; it brings the men who live on the soil into close
relations with the active business world; it keeps the farmer in daily
touch with the markets; it is a potential educational force; it enhances
the value of farm property, makes farm life far pleasanter and less
isolated, and will do much to check the undesirable current from country
to city.

It is to be hoped that the Congress will make liberal appropriations for
the continuance of the service already established and for its further
extension.

Few subjects of more importance have been taken up by the Congress in
recent years than the inauguration of the system of nationally-aided
irrigation for the arid regions of the far West. A good beginning
therein has been made. Now that this policy of national irrigation has
been adopted, the need of thorough and scientific forest protection will
grow more rapidly than ever throughout the public-land States.

Legislation should be provided for the protection of the game, and the
wild creatures generally, on the forest reserves. The senseless
slaughter of game, which can by judicious protection be permanently
preserved on our national reserves for the people as a whole, should be
stopped at once. It is, for instance, a serious count against our
national good sense to permit the present practice of butchering off
such a stately and beautiful creature as the elk for its antlers or
tusks.

So far as they are available for agriculture, and to whatever extent
they may be reclaimed under the national irrigation law, the remaining
public lands should be held rigidly for the home builder, the settler
who lives on his land, and for no one else. In their actual use the
desert-land law, the timber and stone law, and the commutation clause of
the homestead law have been so perverted from the intention with which
they were enacted as to permit the acquisition of large areas of the
public domain for other than actual settlers and the consequent
prevention of settlement. Moreover, the approaching exhaustion of the
public ranges has of late led to much discussion as to the best manner
of using these public lands in the West which are suitable chiefly or
only for grazing. The sound and steady development of the West depends
upon the building up of homes therein. Much of our prosperity as a
nation has been due to the operation of the homestead law. On the other
hand, we should recognize the fact that in the grazing region the man
who corresponds to the homesteader may be unable to settle permanently
if only allowed to use the same amount of pasture land that his brother,
the homesteader, is allowed to use of arable land. One hundred and sixty
acres of fairly rich and well-watered soil, or a much smaller amount of
irrigated land, may keep a family in plenty, whereas no one could get a
living from one hundred and sixty acres of dry pasture land capable of
supporting at the outside only one head of cattle to every ten acres. In
the past great tracts of the public domain have been fenced in by
persons having no title thereto, in direct defiance of the law
forbidding the maintenance or construction of any such unlawful
inclosure of public land. For various reasons there has been little
interference with such inclosures in the past, but ample notice has now
been given the trespassers, and all the resources at the command of the
Government will hereafter be used to put a stop to such trespassing.

In view of the capital importance of these matters, I commend them to
the earnest consideration of the Congress, and if the Congress finds
difficulty in dealing with them from lack of thorough knowledge of the
subject, I recommend that provision be made for a commission of experts
specially to investigate and report upon the complicated questions
involved.

I especially urge upon the Congress the need of wise legislation for
Alaska. It is not to our credit as a nation that Alaska, which has been
ours for thirty-five years, should still have as poor a system Of laws
as is the case. No country has a more valuable possession--in mineral
wealth, in fisheries, furs, forests, and also in land available for
certain kinds of farming and stockgrowing. It is a territory of great
size and varied resources, well fitted to support a large permanent
population. Alaska needs a good land law and such provisions for
homesteads and pre-emptions as will encourage permanent settlement. We
should shape legislation with a view not to the exploiting and
abandoning of the territory, but to the building up of homes therein.
The land laws should be liberal in type, so as to hold out inducements
to the actual settler whom we most desire to see take possession of the
country. The forests of Alaska should be protected, and, as a secondary
but still important matter, the game also, and at the same time it is
imperative that the settlers should be allowed to cut timber, under
proper regulations, for their own use. Laws should be enacted to protect
the Alaskan salmon fisheries against the greed which would destroy them.
They should be preserved as a permanent industry and food supply. Their
management and control should be turned over to the Commission of Fish
and Fisheries. Alaska should have a Delegate in the Congress. It would
be well if a Congressional committee could visit Alaska and investigate
its needs on the ground.

In dealing with the Indians our aim should be their ultimate absorption
into the body of our people. But in many cases this absorption must and
should be very slow. In portions of the Indian Territory the mixture of
blood has gone on at the same time with progress in wealth and
education, so that there are plenty of men with varying degrees of
purity of Indian blood who are absolutely indistinguishable in point of
social, political, and economic ability from their white associates.
There are other tribes which have as yet made no perceptible advance
toward such equality. To try to force such tribes too fast is to prevent
their going forward at all. Moreover, the tribes live under widely
different conditions. Where a tribe has made considerable advance and
lives on fertile farming soil it is possible to allot the members lands
in severalty much as is the case with white settlers. There are other
tribes where such a course is not desirable. On the arid prairie lands
the effort should be to induce the Indians to lead pastoral rather than
agricultural lives, and to permit them to settle in villages rather than
to force them into isolation.

The large Indian schools situated remote from any Indian reservation do
a special and peculiar work of great importance. But, excellent though
these are, an immense amount of additional work must be done on the
reservations themselves among the old, and above all among the young,
Indians.

The first and most important step toward the absorption of the Indian is
to teach him to earn his living; yet it is not necessarily to be assumed
that in each community all Indians must become either tillers of the
soil or stock raisers. Their industries may properly be diversified, and
those who show special desire or adaptability for industrial or even
commercial pursuits should be encouraged so far as practicable to follow
out each his own bent.

Every effort should be made to develop the Indian along the lines of
natural aptitude, and to encourage the existing native industries
peculiar to certain tribes, such as the various kinds of basket weaving,
canoe building, smith work, and blanket work. Above all, the Indian boys
and girls should be given confident command of colloquial English, and
should ordinarily be prepared for a vigorous struggle with the
conditions under which their people live, rather than for immediate
absorption into some more highly developed community.

The officials who represent the Government in dealing with the Indians
work under hard conditions, and also under conditions which render it
easy to do wrong and very difficult to detect wrong. Consequently they
should be amply paid on the one hand, and on the other hand a
particularly high standard of conduct should be demanded from them, and
where misconduct can be proved the punishment should be exemplary.

In no department of governmental work in recent years has there been
greater success than in that of giving scientific aid to the farming
population, thereby showing them how most efficiently to help
themselves. There is no need of insisting upon its importance, for the
welfare of the farmer is fundamentally necessary to the welfare of the
Republic as a whole. In addition to such work as quarantine against
animal and vegetable plagues, and warring against them when here
introduced, much efficient help has been rendered to the farmer by the
introduction of new plants specially fitted for cultivation under the
peculiar conditions existing in different portions of the country. New
cereals have been established in the semi-arid West. For instance, the
practicability of producing the best types of macaroni wheats in regions
of an annual rainfall of only ten inches or thereabouts has been
conclusively demonstrated. Through the introduction of new rices in
Louisiana and Texas the production of rice in this country has been made
to about equal the home demand. In the South-west the possibility of
regrassing overstocked range lands has been demonstrated; in the North
many new forage crops have been introduced, while in the East it has
been shown that some of our choicest fruits can be stored and shipped in
such a way as to find a profitable market abroad.

I again recommend to the favorable consideration of the Congress the
plans of the Smithsonian Institution for making the Museum under its
charge worthy of the Nation, and for preserving at the National Capital
not only records of the vanishing races of men but of the animals of
this continent which, like the buffalo, will soon become extinct unless
specimens from which their representatives may be renewed are sought in
their native regions and maintained there in safety.

The District of Columbia is the only part of our territory in which the
National Government exercises local or municipal functions, and where in
consequence the Government has a free hand in reference to certain types
of social and economic legislation which must be essentially local or
municipal in their character. The Government should see to it, for
instance, that the hygienic and sanitary legislation affecting
Washington is of a high character. The evils of slum dwellings, whether
in the shape of crowded and congested tenement-house districts or of the
back-alley type, should never be permitted to grow up in Washington. The
city should be a model in every respect for all the cities of the
country. The charitable and correctional systems of the District should
receive consideration at the hands of the Congress to the end that they
may embody the results of the most advanced thought in these fields.
Moreover, while Washington is not a great industrial city, there is some
industrialism here, and our labor legislation, while it would not be
important in itself, might be made a model for the rest of the Nation.
We should pass, for instance, a wise employer's-liability act for the
District of Columbia, and we need such an act in our navy-yards.
Railroad companies in the District ought to be required by law to block
their frogs.

The safety-appliance law, for the better protection of the lives and
limbs of railway employees, which was passed in 1893, went into full
effect on August 1, 1901. It has resulted in averting thousands of
casualties. Experience shows, however, the necessity of additional
legislation to perfect this law. A bill to provide for this passed the
Senate at the last session. It is to be hoped that some such measure may
now be enacted into law.

There is a growing tendency to provide for the publication of masses of
documents for which there is no public demand and for the printing of
which there is no real necessity. Large numbers of volumes are turned
out by the Government printing presses for which there is no
justification. Nothing should be printed by any of the Departments
unless it contains something of permanent value, and the Congress could
with advantage cut down very materially on all the printing which it has
now become customary to provide. The excessive cost of Government
printing is a strong argument against the position of those who are
inclined on abstract grounds to advocate the Government's doing any work
which can with propriety be left in private hands.

Gratifying progress has been made during the year in the extension of
the merit system of making appointments in the Government service. It
should be extended by law to the District of Columbia. It is much to be
desired that our consular system be established by law on a basis
providing for appointment and promotion only in consequence of proved
fitness.

Through a wise provision of the Congress at its last session the White
House, which had become disfigured by incongruous additions and changes,
has now been restored to what it was planned to be by Washington. In
making the restorations the utmost care has been exercised to come as
near as possible to the early plans and to supplement these plans by a
careful study of such buildings as that of the University of Virginia,
which was built by Jefferson. The White House is the property of the
Nation, and so far as is compatible with living therein it should be
kept as it originally was, for the same reasons that we keep Mount
Vernon as it originally was. The stately simplicity of its architecture
is an expression of the character of the period in which it was built,
and is in accord with the purposes it was designed to serve. It is a
good thing to preserve such buildings as historic monuments which keep
alive our sense of continuity with the Nation's past.

The reports of the several Executive Departments are submitted to the
Congress with this communication.

***

State of the Union Address
Theodore Roosevelt
December 7, 1903

To the Senate and House of Representatives:

The country is to be congratulated on the amount of substantial
achievement which has marked the past year both as regards our foreign
and as regards our domestic policy.

With a nation as with a man the most important things are those of the
household, and therefore the country is especially to be congratulated
on what has been accomplished in the direction of providing for the
exercise of supervision over the great corporations and combinations of
corporations engaged in interstate commerce. The Congress has created
the Department of Commerce and Labor, including the Bureau of
Corporations, with for the first time authority to secure proper
publicity of such proceedings of these great corporations as the public
has the right to know. It has provided for the expediting of suits for
the enforcement of the Federal anti-trust law; and by another law it has
secured equal treatment to all producers in the transportation of their
goods, thus taking a long stride forward in making effective the work of
the Interstate Commerce Commission.

The establishment of the Department of Commerce and Labor, with the
Bureau of Corporations thereunder, marks a real advance in the direction
of doing all that is possible for the solution of the questions vitally
affecting capitalists and wage-workers. The act creating Department was
approved on February 14, 1903, and two days later the head of the
Department was nominated and confirmed by the Senate. Since then the
work of organization has been pushed as rapidly as the initial
appropriations permitted, and with due regard to thoroughness and the
broad purposes which the Department is designed to serve. After the
transfer of the various bureaus and branches to the Department at the
beginning of the current fiscal year, as provided for in the act, the
personnel comprised 1,289 employees in Washington and 8,836 in the
country at large. The scope of the Department's duty and authority
embraces the commercial and industrial interests of the Nation. It is
not designed to restrict or control the fullest liberty of legitimate
business action, but to secure exact and authentic information which
will aid the Executive in enforcing existing laws, and which will enable
the Congress to enact additional legislation, if any should be found
necessary, in order to prevent the few from obtaining privileges at the
expense of diminished opportunities for the many.

The preliminary work of the Bureau of Corporations in the Department has
shown the wisdom of its creation. Publicity in corporate affairs will
tend to do away with ignorance, and will afford facts upon which
intelligent action may be taken. Systematic, intelligent investigation
is already developing facts the knowledge of which is essential to a
right understanding of the needs and duties of the business world. The
corporation which is honestly and fairly organized, whose managers in
the conduct of its business recognize their obligation to deal squarely
with their stockholders, their competitors, and the public, has nothing
to fear from such supervision. The purpose of this Bureau is not to
embarrass or assail legitimate business, but to aid in bringing about a
better industrial condition--a condition under which there shall be
obedience to law and recognition of public obligation by all
corporations, great or small. The Department of Commerce and Labor will
be not only the clearing house for information regarding the business
transactions of the Nation, but the executive arm of the Government to
aid in strengthening our domestic and foreign markets, in perfecting our
transportation facilities, in building up our merchant marine, in
preventing the entrance of undesirable immigrants, in improving
commercial and industrial conditions, and in bringing together on common
ground those necessary partners in industrial progress--capital and
labor. Commerce between the nations is steadily growing in volume, and
the tendency of the times is toward closer trade relations. Constant
watchfulness is needed to secure to Americans the chance to participate
to the best advantage in foreign trade; and we may confidently expect
that the new Department will justify the expectation of its creators by
the exercise of this watchfulness, as well as by the businesslike
administration of such laws relating to our internal affairs as are
intrusted to its care.

In enacting the laws above enumerated the Congress proceeded on sane and
conservative lines. Nothing revolutionary was attempted; but a
common-sense and successful effort was made in the direction of seeing
that corporations are so handled as to subserve the public good. The
legislation was moderate. It was characterized throughout by the idea
that we were not attacking corporations, but endeavoring to provide for
doing away with any evil in them; that we drew the line against
misconduct, not against wealth; gladly recognizing the great good done
by the capitalist who alone, or in conjunction with his fellows, does
his work along proper and legitimate lines. The purpose of the
legislation, which purpose will undoubtedly be fulfilled, was to favor
such a man when he does well, and to supervise his action only to
prevent him from doing ill. Publicity can do no harm to the honest
corporation. The only corporation that has cause to dread it is the
corporation which shrinks from the light, and about the welfare of such
corporations we need not be oversensitive. The work of the Department of
Commerce and Labor has been conditioned upon this theory, of securing
fair treatment alike for labor and for capital.

The consistent policy of the National Government, so far as it has the
power, is to hold in check the unscrupulous man, whether employer or
employee; but to refuse to weaken individual initiative or to hamper or
cramp the industrial development of the country. We recognize that this
is an era of federation and combination, in which great capitalistic
corporations and labor unions have become factors of tremendous
importance in all industrial centers. Hearty recognition is given the
far-reaching, beneficent work which has been accomplished through both
corporations and unions, and the line as between different corporations,
as between different unions, is drawn as it is between different
individuals; that is, it is drawn on conduct, the effort being to treat
both organized capital and organized labor alike; asking nothing save
that the interest of each shall be brought into harmony with the
interest of the general public, and that the conduct of each shall
conform to the fundamental rules of obedience to law, of individual
freedom, and of justice and fair dealing towards all. Whenever either
corporation, labor union, or individual disregards the law or acts in a
spirit of arbitrary and tyrannous interference with the rights of
others, whether corporations or individuals, then where the Federal
Government has jurisdiction, it will see to it that the misconduct is
stopped, paying not the slightest heed to the position or power of the
corporation, the union or the individual, but only to one vital
fact--that is, the question whether or not the conduct of the individual
or aggregate of individuals is in accordance with the law of the land.
Every man must be guaranteed his liberty and his right to do as he likes
with his property or his labor, so long as he does not infringe the
rights of others. No man is above the law and no man is below it; nor do
we ask any man's permission when we require him to obey it. Obedience to
the law is demanded as a right; not asked as a favor.

We have cause as a nation to be thankful for the steps that have been so
successfully taken to put these principles into effect. The progress has
been by evolution, not by revolution. Nothing radical has been done; the
action has been both moderate and resolute. Therefore the work will
stand. There shall be no backward step. If in the working of the laws it
proves desirable that they shall at any point be expanded or amplified,
the amendment can be made as its desirability is shown. Meanwhile they
are being administered with judgment, but with insistence upon obedience
to them, and their need has been emphasized in signal fashion by the
events of the past year.

From all sources, exclusive of the postal service, the receipts of the
Government for the last fiscal year aggregated $560,396,674. The
expenditures for the same period were $506,099,007, the surplus for the
fiscal year being $54,297,667. The indications are that the surplus for
the present fiscal year will be very small, if indeed there be any
surplus. From July to November the receipts from customs were,
approximately, nine million dollars less than the receipts from the same
source for a corresponding portion of last year. Should this decrease
continue at the same ratio throughout the fiscal year, the surplus would
be reduced by, approximately, thirty million dollars. Should the revenue
from customs suffer much further decrease during the fiscal year, the
surplus would vanish. A large surplus is certainly undesirable. Two
years ago the war taxes were taken off with the express intention of
equalizing the governmental receipts and expenditures, and though the
first year thereafter still showed a surplus, it now seems likely that a
substantial equality of revenue and expenditure will be attained. Such
being the case it is of great moment both to exercise care and economy
in appropriations, and to scan sharply any change in our fiscal revenue
system which may reduce our income. The need of strict economy in our
expenditures is emphasized by the fact that we can not afford to be
parsimonious in providing for what is essential to our national
well-being. Careful economy wherever possible will alone prevent our
income from falling below the point required in order to meet our
genuine needs.

The integrity of our currency is beyond question, and under present
conditions it would be unwise and unnecessary to attempt a
reconstruction of our entire monetary system. The same liberty should be
granted the Secretary of the Treasury to deposit customs receipts as is
granted him in the deposit of receipts from other sources. In my Message
of December 2, 1902, I called attention to certain needs of the
financial situation, and I again ask the consideration of the Congress
for these questions.

During the last session of the Congress at the suggestion of a joint
note from the Republic of Mexico and the Imperial Government of China,
and in harmony with an act of the Congress appropriating $25,000 to pay
the expenses thereof, a commission was appointed to confer with the
principal European countries in the hope that some plan might be devised
whereby a fixed rate of exchange could be assured between the
gold-standard countries and the silver-standard countries. This
commission has filed its preliminary report, which has been made public.
I deem it important that the commission be continued, and that a sum of
money be appropriated sufficient to pay the expenses of its further
labors.

A majority of our people desire that steps be taken in the interests of
American shipping, so that we may once more resume our former position
in the ocean carrying trade. But hitherto the differences of opinion as
to the proper method of reaching this end have been so wide that it has
proved impossible to secure the adoption of any particular scheme.
Having in view these facts, I recommend that the Congress direct the
Secretary of the Navy, the Postmaster-General, and the Secretary of
Commerce and Labor, associated with such a representation from the
Senate and House of Representatives as the Congress in its wisdom may
designate, to serve as a commission for the purpose of investigating and
reporting to the Congress at its next session what legislation is
desirable or necessary for the development of the American merchant
marine and American commerce, and incidentally of a national ocean mail
service of adequate auxiliary naval crusiers and naval reserves. While
such a measure is desirable in any event, it is especially desirable at
this time, in view of the fact that our present governmental contract
for ocean mail with the American Line will expire in 1905. Our ocean
mail act was passed in 1891. In 1895 our 20-knot transatlantic mail line
was equal to any foreign line. Since then the Germans have put on
23-knot, steamers, and the British have contracted for 24-knot steamers.
Our service should equal the best. If it does not, the commercial public
will abandon it. If we are to stay in the business it ought to be with a
full understanding of the advantages to the country on one hand, and on
the other with exact knowledge of the cost and proper methods of
carrying it on. Moreover, lines of cargo ships are of even more
importance than fast mail lines; save so far as the latter can be
depended upon to furnish swift auxiliary cruisers in time of war. The
establishment of new lines of cargo ships to South America, to Asia, and
elsewhere would be much in the interest of our commercial expansion.

We can not have too much immigration of the right kind, and we should
have none at all of the wrong kind. The need is to devise some system by
which undesirable immigrants shall be kept out entirely, while desirable
immigrants are properly distributed throughout the country. At present
some districts which need immigrants have none; and in others, where the
population is already congested, immigrants come in such numbers as to
depress the conditions of life for those already there. During the last
two years the immigration service at New York has been greatly improved,
and the corruption and inefficiency which formerly obtained there have
been eradicated. This service has just been investigated by a committee
of New York citizens of high standing, Messrs. Arthur V. Briesen, Lee K.
Frankel, Eugene A. Philbin, Thomas W. Hynes, and Ralph Trautman. Their
report deals with the whole situation at length, and concludes with
certain recommendations for administrative and legislative action. It is
now receiving the attention of the Secretary of Commerce and Labor.

The special investigation of the subject of naturalization under the
direction of the Attorney-General, and the consequent prosecutions
reveal a condition of affairs calling for the immediate attention of the
Congress. Forgeries and perjuries of shameless and flagrant character
have been perpetrated, not only in the dense centers of population, but
throughout the country; and it is established beyond doubt that very
many so-called citizens of the United States have no title whatever to
that right, and are asserting and enjoying the benefits of the same
through the grossest frauds. It is never to be forgotten that
citizenship is, to quote the words recently used by the Supreme Court of
the United States, an "inestimable heritage," whether it proceeds from
birth within the country or is obtained by naturalization; and we poison
the sources of our national character and strength at the fountain, if
the privilege is claimed and exercised without right, and by means of
fraud and corruption. The body politic can not be sound and healthy if
many of its constituent members claim their standing through the
prostitution of the high right and calling of citizenship. It should
mean something to become a citizen of the United States; and in the
process no loophole whatever should be left open to fraud.

The methods by which these frauds--now under full investigation with a
view to meting out punishment and providing adequate remedies--are
perpetrated, include many variations of procedure by which false
certificates of citizenship are forged in their entirety; or genuine
certificates fraudulently or collusively obtained in blank are filled in
by the criminal conspirators; or certificates are obtained on fraudulent
statements as to the time of arrival and residence in this country; or
imposition and substitution of another party for the real petitioner
occur in court; or certificates are made the subject of barter and sale
and transferred from the rightful holder to those not entitled to them;
or certificates are forged by erasure of the original names and the
insertion of the names of other persons not entitled to the same.

It is not necessary for me to refer here at large to the causes leading
to this state of affairs. The desire for naturalization is heartily to
be commended where it springs from a sincere and permanent intention to
become citizens, and a real appreciation of the privilege. But it is a
source of untold evil and trouble where it is traceable to selfish and
dishonest motives, such as the effort by artificial and improper means,
in wholesale fashion to create voters who are ready-made tools of
corrupt politicians, or the desire to evade certain labor laws creating
discriminations against alien labor. All good citizens, whether
naturalized or native born, are equally interested in protecting our
citizenship against fraud in any form, and, on the other hand, in
affording every facility for naturalization to those who in good faith
desire to share alike our privileges and our responsibilities.

The Federal grand jury lately in session in New York City dealt with
this subject and made a presentment which states the situation briefly
and forcibly and contains important suggestions for the consideration of
the Congress. This presentment is included as an appendix to the report
of the Attorney-General.

In my last annual Message, in connection with the subject of the due
regulation of combinations of capital which are or may become injurious
to the public, I recommend a special appropriation for the better
enforcement of the antitrust law as it now stands, to be extended under
the direction of the Attorney-General. Accordingly (by the legislative,
executive, and judicial appropriation act of February 25, 1903, 32
Stat., 854, 904), the Congress appropriated, for the purpose of
enforcing the various Federal trust and interstate-commerce laws, the
sum of five hundred thousand dollars, to be expended under the direction
of the Attorney-General in the employment of special counsel and agents
in the Department of Justice to conduct proceedings and prosecutions
under said laws in the courts of the United States. I now recommend, as
a matter of the utmost importance and urgency, the extension of the
purposes of this appropriation, so that it may be available, under the
direction of the Attorney-General, and until used, for the due
enforcement of the laws of the United States in general and especially
of the civil and criminal laws relating to public lands and the laws
relating to postal crimes and offenses and the subject of
naturalization. Recent investigations have shown a deplorable state of
affairs in these three matters of vital concern. By various frauds and
by forgeries and perjuries, thousands of acres of the public domain,
embracing lands of different character and extending through various
sections of the country, have been dishonestly acquired. It is hardly
necessary to urge the importance of recovering these dishonest
acquisitions, stolen from the people, and of promptly and duly punishing
the offenders. I speak in another part of this Message of the widespread
crimes by which the sacred right of citizenship is falsely asserted and
that "inestimable heritage" perverted to base ends. By similar
means--that is, through frauds, forgeries, and perjuries, and by
shameless briberies--the laws relating to the proper conduct of the
public service in general and to the due administration of the
Post-Office Department have been notoriously violated, and many
indictments have been found, and the consequent prosecutions are in
course of hearing or on the eve thereof. For the reasons thus indicated,
and so that the Government may be prepared to enforce promptly and with
the greatest effect the due penalties for such violations of law, and to
this end may be furnished with sufficient instrumentalities and
competent legal assistance for the investigations and trials which will
be necessary at many different points of the country, I urge upon the
Congress the necessity of making the said appropriation available for
immediate use for all such purposes, to be expended under the direction
of the Attorney-General.

Steps have been taken by the State Department looking to the making of
bribery an extraditable offense with foreign powers. The need of more
effective treaties covering this crime is manifest. The exposures and
prosecutions of official corruption in St. Louis, Mo., and other cities
and States have resulted in a number of givers and takers of bribes
becoming fugitives in foreign lands. Bribery has not been included in
extradition treaties heretofore, as the necessity for it has not arisen.
While there may have been as much official corruption in former years,
there has been more developed and brought to light in the immediate past
than in the preceding century of our country's history. It should be the
policy of the United States to leave no place on earth where a corrupt
man fleeing from this country can rest in peace. There is no reason why
bribery should not be included in all treaties as extraditable. The
recent amended treaty with Mexico, whereby this crime was put in the
list of extraditable offenses, has established a salutary precedent in
this regard. Under this treaty the State Department has asked, and
Mexico has granted, the extradition of one of the St. Louis bribe
givers.

There can be no crime more serious than bribery. Other offenses violate
one law while corruption strikes at the foundation of all law. Under our
form of Government all authority is vested in the people and by them
delegated to those who represent them in official capacity. There can be
no offense heavier than that of him in whom such a sacred trust has been
reposed, who sells it for his own gain and enrichment; and no less heavy
is the offense of the bribe giver. He is worse than the thief, for the
thief robs the individual, while the corrupt official plunders an entire
city or State. He is as wicked as the murderer, for the murderer may
only take one life against the law, while the corrupt official and the
man who corrupts the official alike aim at the assassination of the
commonwealth itself. Government of the people, by the people, for the
people will perish from the face of the earth if bribery is tolerated.
The givers and takers of bribes stand on an evil pre-eminence of infamy.
The exposure and punishment of public corruption is an honor to a
nation, not a disgrace. The shame lies in toleration, not in correction.
No city or State, still less the Nation, can be injured by the
enforcement of law. As long as public plunderers when detected can find
a haven of refuge in any foreign land and avoid punishment, just so long
encouragement is given them to continue their practices. If we fail to
do all that in us lies to stamp out corruption we can not escape our
share of responsibility for the guilt. The first requisite of successful
self-government is unflinching enforcement of the law and the cutting
out of corruption.

For several years past the rapid development of Alaska and the
establishment of growing American interests in regions theretofore
unsurveyed and imperfectly known brought into prominence the urgent
necessity of a practical demarcation of the boundaries between the
jurisdictions of the United States and Great Britain. Although the
treaty of 1825 between Great Britain and Russia, the provisions of which
were copied in the treaty of 1867, whereby Russia conveyed Alaska to the
United States, was positive as to the control, first by Russia and later
by the United States, of a strip of territory along the continental
mainland from the western shore of Portland Canal to Mount St. Elias,
following and surrounding the indentations of the coast and including
the islands to the westward, its description of the landward margin of
the strip was indefinite, resting on the supposed existence of a
continuous ridge or range of mountains skirting the coast, as figured in
the charts of the early navigators. It had at no time been possible for
either party in interest to lay down, under the authority of the treaty,
a line so obviously exact according to its provisions as to command the
assent of the other. For nearly three-fourths of a century the absence
of tangible local interests demanding the exercise of positive
jurisdiction on either side of the border left the question dormant. In
1878 questions of revenue administration on the Stikine River led to the
establishment of a provisional demarcation, crossing the channel between
two high peaks on either side about twenty-four miles above the river
mouth. In 1899 similar questions growing out of the extraordinary
development of mining interests in the region about the head of Lynn
Canal brought about a temporary modus vivendi, by which a convenient
separation was made at the watershed divides of the White and Chilkoot
passes and to the north of Klukwan, on the Klehini River. These partial
and tentative adjustments could not, in the very nature of things, be
satisfactory or lasting. A permanent disposition of the matter became
imperative.

After unavailing attempts to reach an understanding through a Joint High
Commission, followed by prolonged negotiations, conducted in an amicable
spirit, a convention between the United States and Great Britain was
signed, January 24, 1903, providing for an examination of the subject by
a mixed tribunal of six members, three on a side, with a view to its
final disposition. Ratifications were exchanged on March 3 last,
whereupon the two Governments appointed their respective members. Those
on behalf of the United States were Elihu Root, Secretary of War, Henry
Cabot Lodge, a Senator of the United States, and George Turner, an
ex-Senator of the United States, while Great Britain named the Right
Honourable Lord Alverstone, Lord Chief Justice of England, Sir Louis
Amable Jette, K. C. M. G., retired judge of the Supreme Court of Quebec,
and A. B. Aylesworth, K. C., of Toronto. This Tribunal met in London on
September 3, under the Presidency of Lord Alverstone. The proceedings
were expeditious, and marked by a friendly and conscientious spirit. The
respective cases, counter cases, and arguments presented the issues
clearly and fully. On the 20th of October a majority of the Tribunal
reached and signed an agreement on all the questions submitted by the
terms of the Convention. By this award the right of the United States to
the control of a continuous strip or border of the mainland shore,
skirting all the tide-water inlets and sinuosities of the coast, is
confirmed; the entrance to Portland Canal (concerning which legitimate
doubt appeared) is defined as passing by Tongass Inlet and to the
northwestward of Wales and Pearse islands; a line is drawn from the head
of Portland Canal to the fifty-sixth degree of north latitude; and the
interior border line of the strip is fixed by lines connecting certain
mountain summits lying between Portland Canal and Mount St. Elias, and
running along the crest of the divide separating the coast slope from
the inland watershed at the only part of the frontier where the drainage
ridge approaches the coast within the distance of ten marine leagues
stipulated by the treaty as the extreme width of the strip around the
heads of Lynn Canal and its branches.

While the line so traced follows the provisional demarcation of 1878 at
the crossing of the Stikine River, and that of 1899 at the summits of
the White and Chilkoot passes, it runs much farther inland from the
Klehini than the temporary line of the later modus vivendi, and leaves
the entire mining district of the Porcupine River and Glacier Creek
within the jurisdiction of the United States.

The result is satisfactory in every way. It is of great material
advantage to our people in the Far Northwest. It has removed from the
field of discussion and possible danger a question liable to become more
acutely accentuated with each passing year. Finally, it has furnished a
signal proof of the fairness and good will with which two friendly
nations can approach and determine issues involving national sovereignty
and by their nature incapable of submission to a third power for
adjudication.

The award is self-executing on the vital points. To make it effective as
regards the others it only remains for the two Governments to appoint,
each on its own behalf, one or more scientific experts, who shall, with
all convenient speed, proceed together to lay down the boundary line in
accordance with the decision of the majority of the Tribunal. I
recommend that the Congress make adequate provision for the appointment,
compensation, and expenses of the members to serve on this joint
boundary commission on the part of the United States.

It will be remembered that during the second session of the last
Congress Great Britain, Germany, and Italy formed an alliance for the
purpose of blockading the ports of Venezuela and using such other means
of pressure as would secure a settlement of claims due, as they alleged,
to certain of their subjects. Their employment of force for the
collection of these claims was terminated by an agreement brought about
through the offices of the diplomatic representatives of the United
States at Caracas and the Government at Washington, thereby ending a
situation which was bound to cause increasing friction, and which
jeoparded the peace of the continent. Under this agreement Venezuela
agreed to set apart a certain percentage of the customs receipts of two
of her ports to be applied to the payment of whatever obligations might
be ascertained by mixed commissions appointed for that purpose to be due
from her, not only to the three powers already mentioned, whose
proceedings against her had resulted in a state of war, but also to the
United States, France, Spain, Belgium, the Netherland Sweden and Norway,
and Mexico, who had not employed force for the collection of the claims
alleged to be due to certain of their citizens.

A demand was then made by the so-called blockading powers that the sums
ascertained to be due to their citizens by such mixed commissions should
be accorded payment in full before anything was paid upon the claims of
any of the so-called peace powers. Venezuela, on the other hand,
insisted that all her creditors should be paid upon a basis of exact
equality. During the efforts to adjust this dispute it was suggested by
the powers in interest that it should be referred to me for decision,
but I was clearly of the opinion that a far wiser course would be to
submit the question to the Permanent Court of Arbitration at The Hague.
It seemed to me to offer an admirable opportunity to advance the
practice of the peaceful settlement of disputes between nations and to
secure for the Hague Tribunal a memorable increase of its practical
importance. The nations interested in the controversy were so numerous
and in many instances so powerful as to make it evident that beneficent
results would follow from their appearance at the same time before the
bar of that august tribunal of peace.

Our hopes in that regard have been realized. Russia and Austria are
represented in the persons of the learned and distinguished jurists who
compose the Tribunal, while Great Britain, Germany, France, Spain,
Italy, Belgium, the Netherlands, Sweden and Norway, Mexico, the United
States, and Venezuela are represented by their respective agents and
counsel. Such an imposing concourse of nations presenting their
arguments to and invoking the decision of that high court of
international justice and international peace can hardly fail to secure
a like submission of many future controversies. The nations now
appearing there will find it far easier to appear there a second time,
while no nation can imagine its just pride will be lessened by following
the example now presented. This triumph of the principle of
international arbitration is a subject of warm congratulation and offers
a happy augury for the peace of the world.

There seems good ground for the belief that there has been a real growth
among the civilized nations of a sentiment which will permit a gradual
substitution of other methods than the method of war in the settlement
of disputes. It is not pretended that as yet we are near a position in
which it will be possible wholly to prevent war, or that a just regard
for national interest and honor will in all cases permit of the
settlement of international disputes by arbitration; but by a mixture of
prudence and firmness with wisdom we think it is possible to do away
with much of the provocation and excuse for war, and at least in many
cases to substitute some other and more rational method for the
settlement of disputes. The Hague Court offers so good an example of
what can be done in the direction of such settlement that it should be
encouraged in every way.

Further steps should be taken. In President McKinley's annual Message of
December 5, 1898, he made the following recommendation:

"The experiences of the last year bring forcibly home to us a sense of
the burdens and the waste of war. We desire in common with most
civilized nations, to reduce to the lowest possible point the damage
sustained in time of war by peaceable trade and commerce. It is true we
may suffer in such cases less than other communities, but all nations
are damaged more or less by the state of uneasiness and apprehension
into which an outbreak of hostilities throws the entire commercial
world. It should be our object, therefore, to minimize, so far as
practicable, this inevitable loss and disturbance. This purpose can
probably best be accomplished by an international agreement to regard
all private property at sea as exempt from capture or destruction by the
forces of belligerent powers. The United States Government has for many
years advocated this humane and beneficent principle, and is now in a
position to recommend it to other powers without the imputation of
selfish motives. I therefore suggest for your consideration that the
Executive be authorized to correspond with the governments of the
principal maritime powers with a view of incorporating into the
permanent law of civilized nations the principle of the exemption of all
private property at sea, not contraband of war, from capture or
destruction by belligerent powers."

I cordially renew this recommendation.

The Supreme Court, speaking on December 11. 1899, through Peckham, J.,
said:

"It is, we think, historically accurate to say that this Government has
always been, in its views, among the most advanced of the governments of
the world in favor of mitigating, as to all non-combatants, the
hardships and horrors of war. To accomplish that object it has always
advocated those rules which would in most cases do away with the right
to capture the private property of an enemy on the high seas."

I advocate this as a matter of humanity and morals. It is anachronistic
when private property is respected on land that it should not be
respected at sea. Moreover, it should be borne in mind that shipping
represents, internationally speaking, a much more generalized species of
private property than is the case with ordinary property on land--that
is, property found at sea is much less apt than is the case with
property found on land really to belong to any one nation. Under the
modern system of corporate ownership the flag of a vessel often differs
from the flag which would mark the nationality of the real ownership and
money control of the vessel; and the cargo may belong to individuals of
yet a different nationality. Much American capital is now invested in
foreign ships; and among foreign nations it often happens that the
capital of one is largely invested in the shipping of another.
Furthermore, as a practical matter, it may be mentioned that while
commerce destroying may cause serious loss and great annoyance, it can
never be more than a subsidiary factor in bringing to terms a resolute
foe. This is now well recognized by all of our naval experts. The
fighting ship, not the commerce destroyer, is the vessel whose feats add
renown to a nation's history, and establish her place among the great
powers of the world.

Last year the Interparliamentary Union for International Arbitration met
at Vienna, six hundred members of the different legislatures of
civilized countries attending. It was provided that the next meeting
should be in 1904 at St. Louis, subject to our Congress extending an
invitation. Like the Hague Tribunal, this Interparliamentary Union is
one of the forces tending towards peace among the nations of the earth,
and it is entitled to our support. I trust the invitation can be
extended.

Early in July, having received intelligence, which happily turned out to
be erroneous, of the assassination of our vice-consul at Beirut, I
dispatched a small squadron to that port for such service as might be
found necessary on arrival. Although the attempt on the life of our
vice-consul had not been successful, yet the outrage was symptomatic of
a state of excitement and disorder which demanded immediate attention.
The arrival of the vessels had the happiest result. A feeling of
security at once took the place of the former alarm and disquiet; our
officers were cordially welcomed by the consular body and the leading
merchants, and ordinary business resumed its activity. The Government of
the Sultan gave a considerate hearing to the representations of our
minister; the official who was regarded as responsible for the disturbed
condition of affairs was removed. Our relations with the Turkish
Government remain friendly; our claims rounded on inequitable treatment
of some of our schools and missions appear to be in process of amicable
adjustment.

The signing of a new commercial treaty with China, which took place at
Shanghai on the 8th of October, is a cause for satisfaction. This act,
the result of long discussion and negotiation, places our commercial
relations with the great Oriental Empire on a more satisfactory footing
than they have ever heretofore enjoyed. It provides not only for the
ordinary rights and privileges of diplomatic and consular officers, but
also for an important extension of our commerce by increased facility of
access to Chinese ports, and for the relief of trade by the removal of
some of the obstacles which have embarrassed it in the past. The Chinese
Government engages, on fair and equitable conditions, which will
probably be accepted by the principal commercial nations, to abandon the
levy of "liken" and other transit dues throughout the Empire, and to
introduce other desirable administrative reforms. Larger facilities are
to be given to our citizens who desire to carry on mining enterprises in
China. We have secured for our missionaries a valuable privilege, the
recognition of their right to rent and lease in perpetuity such property
as their religious societies may need in all parts of the Empire. And,
what was an indispensable condition for the advance and development of
our commerce in Manchuria, China, by treaty with us, has opened to
foreign commerce the cities of Mukden, the capital of the province of
Manchuria, and An-tung, an important port on the Yalu River, on the road
to Korea. The full measure of development which our commerce may
rightfully expect can hardly be looked for until the settlement of the
present abnormal state of things in the Empire; but the foundation for
such development has at last been laid.

I call your attention to the reduced cost in maintaining the consular
service for the fiscal year ending June 30, 1903, as shown in the annual
report of the Auditor for the State and other Departments, as compared
with the year previous. For the year under consideration the excess of
expenditures over receipts on account of the consular service amounted
to $26,125.12, as against $96,972.50 for the year ending June 30, 1902,
and $147,040.16 for the year ending June 30, 1901. This is the best
showing in this respect for the consular service for the past fourteen
years, and the reduction in the cost of the service to the Government
has been made in spite of the fact that the expenditures for the year in
question were more than $20,000 greater than for the previous year.

The rural free-delivery service has been steadily extended. The
attention of the Congress is asked to the question of the compensation
of the letter carriers and clerks engaged in the postal service,
especially on the new rural free-delivery routes. More routes have been
installed since the first of July last than in any like period in the
Department's history. While a due regard to economy must be kept in mind
in the establishment of new routes, yet the extension of the rural
free-delivery system must be continued, for reasons of sound public
policy. No governmental movement of recent years has resulted in greater
immediate benefit to the people of the country districts. Rural free
delivery, taken in connection with the telephone, the bicycle, and the
trolley, accomplishes much toward lessening the isolation of farm life
and making it brighter and more attractive. In the immediate past the
lack of just such facilities as these has driven many of the more active
and restless young men and women from the farms to the cities; for they
rebelled at loneliness and lack of mental companionship. It is unhealthy
and undesirable for the cities to grow at the expense of the country;
and rural free delivery is not only a good thing in itself, but is good
because it is one of the causes which check this unwholesome tendency
towards the urban concentration of our population at the expense of the
country districts. It is for the same reason that we sympathize with and
approve of the policy of building good roads. The movement for good
roads is one fraught with the greatest benefit to the country districts.

I trust that the Congress will continue to favor in all proper ways the
Louisiana Purchase Exposition. This Exposition commemorates the
Louisiana purchase, which was the first great step in the expansion
which made us a continental nation. The expedition of Lewis and Clark
across the continent followed thereon, and marked the beginning of the
process of exploration and colonization which thrust our national
boundaries to the Pacific. The acquisition of the Oregon country,
including the present States of Oregon and Washington, was a fact of
immense importance in our history; first giving us our place on the
Pacific seaboard, and making ready the way for our ascendency in the
commerce of the greatest of the oceans. The centennial of our
establishment upon the western coast by the expedition of Lewis and
Clark is to be celebrated at Portland, Oregon, by an exposition in the
summer of 1905, and this event should receive recognition and support
from the National Government.

I call your special attention to the Territory of Alaska. The country is
developing rapidly, and it has an assured future. The mineral wealth is
great and has as yet hardly been tapped. The fisheries, if wisely
handled and kept under national control, will be a business as permanent
as any other, and of the utmost importance to the people. The forests if
properly guarded will form another great source of wealth. Portions of
Alaska are fitted for farming and stock raising, although the methods
must be adapted to the peculiar conditions of the country. Alaska is
situated in the far north; but so are Norway and Sweden and Finland; and
Alaska can prosper and play its part in the New World just as those
nations have prospered and played their parts in the Old World. Proper
land laws should be enacted; and the survey of the public lands
immediately begun. Coal-land laws should be provided whereby the
coal-land entryman may make his location and secure patent under methods
kindred to those now prescribed for homestead and mineral entrymen.
Salmon hatcheries, exclusively under Government control, should be
established. The cable should be extended from Sitka westward. Wagon
roads and trails should be built, and the building of railroads promoted
in all legitimate ways. Light-houses should be built along the coast.
Attention should be paid to the needs of the Alaska Indians; provision
should be made for an officer, with deputies, to study their needs,
relieve their immediate wants, and help them adapt themselves to the new
conditions.

The commission appointed to investigate, during the season of 1903, the
condition and needs of the Alaskan salmon fisheries, has finished its
work in the field, and is preparing a detailed report thereon. A
preliminary report reciting the measures immediately required for the
protection and preservation of the salmon industry has already been
submitted to the Secretary of Commerce and Labor for his attention and
for the needed action.

I recommend that an appropriation be made for building light-houses in
Hawaii, and taking possession of those already built. The Territory
should be reimbursed for whatever amounts it has already expended for
light-houses. The governor should be empowered to suspend or remove any
official appointed by him, without submitting the matter to the
legislature.

Of our insular possessions the Philippines and Porto Rico it is
gratifying to say that their steady progress has been such as to make it
unnecessary to spend much time in discussing them. Yet the Congress
should ever keep in mind that a peculiar obligation rests upon us to
further in every way the welfare of these communities. The Philippines
should be knit closer to us by tariff arrangements. It would, of course,
be impossible suddenly to raise the people of the islands to the high
pitch of industrial prosperity and of governmental efficiency to which
they will in the end by degrees attain; and the caution and moderation
shown in developing them have been among the main reasons why this
development has hitherto gone on so smoothly. Scrupulous care has been
taken in the choice of governmental agents, and the entire elimination
of partisan politics from the public service. The condition of the
islanders is in material things far better than ever before, while their
governmental, intellectual, and moral advance has kept pace with their
material advance. No one people ever benefited another people more than
we have benefited the Filipinos by taking possession of the islands.

The cash receipts of the General Land Office for the last fiscal year
were $11,024,743.65, an increase of $4,762,816.47 over the preceding
year. Of this sum, approximately, $8,461,493 will go to the credit of
the fund for the reclamation of arid land, making the total of this
fund, up to the 30th of June, 1903, approximately, $16,191,836.

A gratifying disposition has been evinced by those having unlawful
inclosures of public land to remove their fences. Nearly two million
acres so inclosed have been thrown open on demand. In but comparatively
few cases has it been necessary to go into court to accomplish this
purpose. This work will be vigorously prosecuted until all unlawful
inclosures have been removed.

Experience has shown that in the western States themselves, as well as
in the rest of the country, there is widespread conviction that certain
of the public-land laws and the resulting administrative practice no
longer meet the present needs. The character and uses of the remaining
public lands differ widely from those of the public lands which Congress
had especially in view when these laws were passed. The rapidly
increasing rate of disposal of the public lands is not followed by a
corresponding increase in home building. There is a tendency to mass in
large holdings public lands, especially timber and grazing lands, and
thereby to retard settlement. I renew and emphasize my recommendation of
last year that so far as they are available for agriculture in its
broadest sense, and to whatever extent they may be reclaimed under the
national irrigation law, the remaining public lands should be held
rigidly for the home builder. The attention of the Congress is
especially directed to the timber and stone law, the desert-land law,
and the commutation clause of the homestead law, which in their
operation have in many respects conflicted with wise public-land policy.
The discussions in the Congress and elsewhere have made it evident that
there is a wide divergence of opinions between those holding opposite
views on these subjects; and that the opposing sides have strong and
convinced representatives of weight both within and without the
Congress; the differences being not only as to matters of opinion but as
to matters of fact. In order that definite information may be available
for the use of the Congress, I have appointed a commission composed of
W. A. Richards, Commissioner of the General Land Office; Gifford
Pinchot, Chief of the Bureau of Forestry of the Department of
Agriculture, and F. H. Newell, Chief Hydrographer of the Geological
Survey, to report at the earliest practicable moment upon the condition,
operation, and effect of the present land laws and on the use,
condition, disposal, and settlement of the public lands. The commission
will report especially what changes in organization, laws, regulations,
and practice affecting the public lands are needed to effect the largest
practicable disposition of the public lands to actual settlers who will
build permanent homes upon them, and to secure in permanence the fullest
and most effective use of the resources of the public lands; and it will
make such other reports and recommendations as its study of these
questions may suggest. The commission is to report immediately upon
those points concerning which its judgment is clear; on any point upon
which it has doubt it will take the time necessary to make investigation
and reach a final judgment.

The work of reclamation of the arid lands of the West is progressing
steadily and satisfactorily under the terms of the law setting aside the
proceeds from the disposal of public lands. The corps of engineers known
as the Reclamation Service, which is conducting the surveys and
examinations, has been thoroughly organized, especial pains being taken
to secure under the civil-service rules a body of skilled, experienced,
and efficient men. Surveys and examinations are progressing throughout
the arid States and Territories, plans for reclaiming works being
prepared and passed upon by boards of engineers before approval by the
Secretary of the Interior. In Arizona and Nevada, in localities where
such work is pre-eminently needed, construction has already been begun.
In other parts of the arid West various projects are well advanced
towards the drawing up of contracts, these being delayed in part by
necessities of reaching agreements or understanding as regards rights of
way or acquisition of real estate. Most of the works contemplated for
construction are of national importance, involving interstate questions
or the securing of stable, self-supporting communities in the midst of
vast tracts of vacant land. The Nation as a whole is of course the
gainer by the creation of these homes, adding as they do to the wealth
and stability of the country, and furnishing a home market for the
products of the East and South. The reclamation law, while perhaps not
ideal, appears at present to answer the larger needs for which it is
designed. Further legislation is not recommended until the necessities
of change are more apparent.

The study of the opportunities of reclamation of the vast extent of arid
land shows that whether this reclamation is done by individuals,
corporations, or the State, the sources of water supply must be
effectively protected and the reservoirs guarded by the preservation of
the forests at the headwaters of the streams. The engineers making the
preliminary examinations continually emphasize this need and urge that
the remaining public lands at the headwaters of the important streams of
the West be reserved to insure permanency of water supply for
irrigation. Much progress in forestry has been made during the past
year. The necessity for perpetuating our forest resources, whether in
public or private hands, is recognized now as never before. The demand
for forest reserves has become insistent in the West, because the West
must use the water, wood, and summer range which only such reserves can
supply. Progressive lumbermen are striving, through forestry, to give
their business permanence. Other great business interests are awakening
to the need of forest preservation as a business matter. The
Government's forest work should receive from the Congress hearty
support, and especially support adequate for the protection of the
forest reserves against fire. The forest-reserve policy of the
Government has passed beyond the experimental stage and has reached a
condition where scientific methods are essential to its successful
prosecution. The administrative features of forest reserves are at
present unsatisfactory, being divided between three Bureaus of two
Departments. It is therefore recommended that all matters pertaining to
forest reserves, except those involving or pertaining to land titles, be
consolidated in the Bureau of Forestry of the Department of Agriculture.

The cotton-growing States have recently been invaded by a weevil that
has done much damage and threatens the entire cotton industry. I suggest
to the Congress the prompt enactment of such remedial legislation as its
judgment may approve.

In granting patents to foreigners the proper course for this country to
follow is to give the same advantages to foreigners here that the
countries in which these foreigners dwell extend in return to our
citizens; that is, to extend the benefits of our patent laws on
inventions and the like where in return the articles would be patentable
in the foreign countries concerned--where an American could get a
corresponding patent in such countries.

The Indian agents should not be dependent for their appointment or
tenure of office upon considerations of partisan politics; the practice
of appointing, when possible, ex-army officers or bonded superintendents
to the vacancies that occur is working well. Attention is invited to the
widespread illiteracy due to lack of public schools in the Indian
Territory. Prompt heed should be paid to the need of education for the
children in this Territory.

In my last annual Message the attention of the Congress was called to
the necessity of enlarging the safety-appliance law, and it is
gratifying to note that this law was amended in important respects. With
the increasing railway mileage of the country, the greater number of men
employed, and the use of larger and heavier equipment, the urgency for
renewed effort to prevent the loss of life and limb upon the railroads
of the country, particularly to employees, is apparent. For the
inspection of water craft and the Life-Saving Service upon the water the
Congress has built up an elaborate body of protective legislation and a
thorough method of inspection and is annually spending large sums of
money. It is encouraging to observe that the Congress is alive to the
interests of those who are employed upon our wonderful arteries of
commerce--the railroads--who so safely transport millions of passengers
and billions of tons of freight. The Federal inspection, of safety
appliances, for which the Congress is now making appropriations, is a
service analogous to that which the Government has upheld for
generations in regard to vessels, and it is believed will prove of great
practical benefit, both to railroad employees and the traveling public.
As the greater part of commerce is interstate and exclusively under the
control of the Congress the needed safety and uniformity must be secured
by national legislation.

No other class of our citizens deserves so well of the Nation as those
to whom the Nation owes its very being, the veterans of the civil war.
Special attention is asked to the excellent work of the Pension Bureau
in expediting and disposing of pension claims. During the fiscal year
ending July 1, 1903, the Bureau settled 251,982 claims, an average of
825 claims for each working day of the year. The number of settlements
since July 1, 1903, has been in excess of last year's average,
approaching 1,000 claims for each working day, and it is believed that
the work of the Bureau will be current at the close of the present
fiscal year.

During the year ended June 30 last 25,566 persons were appointed through
competitive examinations under the civil-service rules. This was 12,672
more than during the preceding year, and 40 per cent of those who passed
the examinations. This abnormal growth was largely occasioned by the
extension of classification to the rural free-delivery service and the
appointment last year of over 9,000 rural carriers. A revision of the
civil-service rules took effect on April 15 last, which has greatly
improved their operation. The completion of the reform of the civil
service is recognized by good citizens everywhere as a matter of the
highest public importance, and the success of the merit system largely
depends upon the effectiveness of the rules and the machinery provided
for their enforcement. A very gratifying spirit of friendly co-operation
exists in all the Departments of the Government in the enforcement and
uniform observance of both the letter and spirit of the civil-service
act. Executive orders of July 3, 1902; March 26, 1903, and July 8, 1903,
require that appointments of all unclassified laborers, both in the
Departments at Washington and in the field service, shall be made with
the assistance of the United States Civil Service Commission, under a
system of registration to test the relative fitness of applicants for
appointment or employment. This system is competitive, and is open to
all citizens of the United States qualified in respect to age, physical
ability, moral character, industry, and adaptability for manual labor;
except that in case of veterans of the Civil War the element of age is
omitted. This system of appointment is distinct from the classified
service and does not classify positions of mere laborer under the
civil-service act and rules. Regulations in aid thereof have been put in
operation in several of the Departments and are being gradually extended
in other parts of the service. The results have been very satisfactory,
as extravagance has been checked by decreasing the number of unnecessary
positions and by increasing the efficiency of the employees remaining.

The Congress, as the result of a thorough investigation of the charities
and reformatory institutions in the District of Columbia, by a joint
select committee of the two Houses which made its report in March, 1898,
created in the act approved June 6, 1900, a board of charities for the
District of Columbia, to consist of five residents of the District,
appointed by the President of the United States, by and with the advice
and consent of the Senate, each for a term of three years, to serve
without compensation. President McKinley appointed five men who had been
active and prominent in the public charities in Washington, all of whom
upon taking office July 1, 1900, resigned from the different charities
with which they had been connected. The members of the board have been
reappointed in successive years. The board serves under the
Commissioners of the District of Columbia. The board gave its first year
to a careful and impartial study of the special problems before it, and
has continued that study every year in the light of the best practice in
public charities elsewhere. Its recommendations in its annual reports to
the Congress through the Commissioners of the District of Columbia "for
the economical and efficient administration of the charities and
reformatories of the District of Columbia," as required by the act
creating it, have been based upon the principles commended by the joint
select committee of the Congress in its report of March, 1898, and
approved by the best administrators of public charities, and make for
the desired systematization and improvement of the affairs under its
supervision. They are worthy of favorable consideration by the Congress.

The effect of the laws providing a General Staff for the Army and for
the more effective use of the National Guard has been excellent. Great
improvement has been made in the efficiency of our Army in recent years.
Such schools as those erected at Fort Leavenworth and Fort Riley and the
institution of fall maneuver work accomplish satisfactory results. The
good effect of these maneuvers upon the National Guard is marked, and
ample appropriation should be made to enable the guardsmen of the
several States to share in the benefit. The Government should as soon as
possible secure suitable permanent camp sites for military maneuvers in
the various sections of the country. The service thereby rendered not
only to the Regular Army, but to the National Guard of the several
States, will be so great as to repay many times over the relatively
small expense. We should not rest satisfied with what has been done,
however. The only people who are contented with a system of promotion by
mere seniority are those who are contented with the triumph of
mediocrity over excellence. On the other hand, a system which encouraged
the exercise of social or political favoritism in promotions would be
even worse. But it would surely be easy to devise a method of promotion
from grade to grade in which the opinion of the higher officers of the
service upon the candidates should be decisive upon the standing and
promotion of the latter. Just such a system now obtains at West Point.
The quality of each year's work determines the standing of that year's
class, the man being dropped or graduated into the next class in the
relative position which his military superiors decide to be warranted by
his merit. In other words, ability, energy, fidelity, and all other
similar qualities determine the rank of a man year after year in West
Point, and his standing in the Army when he graduates from West Point;
but from that time on, all effort to find which man is best or worst,
and reward or punish him accordingly, is abandoned; no brilliancy, no
amount of hard work, no eagerness in the performance of duty, can
advance him, and no slackness or indifference that falls short of a
court-martial offense can retard him. Until this system is changed we
can not hope that our officers will be of as high grade as we have a
right to expect, considering the material upon which we draw. Moreover,
when a man renders such service as Captain Pershing rendered last spring
in the Moro campaign, it ought to be possible to reward him without at
once jumping him to the grade of brigadier-general.

Shortly after the enunciation of that famous principle of American
foreign policy now known as the "Monroe Doctrine," President Monroe, in
a special Message to Congress on January 30, 1824, spoke as follows:
"The Navy is the arm from which our Government will always derive most
aid in support of our rights. Every power engaged in war will know the
strength of our naval power, the number of our ships of each class,
their condition, and the promptitude with which we may bring them into
service, and will pay due consideration to that argument."

I heartily congratulate the Congress upon the steady progress in
building up the American Navy. We can not afford a let-up in this great
work. To stand still means to go back. There should be no cessation in
adding to the effective units of the fighting strength of the fleet.
Meanwhile the Navy Department and the officers of the Navy are doing
well their part by providing constant service at sea under conditions
akin to those of actual warfare. Our officers and enlisted men are
learning to handle the battleships, cruisers, and torpedo boats with
high efficiency in fleet and squadron formations, and the standard of
marksmanship is being steadily raised. The best work ashore is
indispensable, but the highest duty of a naval officer is to exercise
command at sea.

The establishment of a naval base in the Philippines ought not to be
longer postponed. Such a base is desirable in time of peace; in time of
war it would be indispensable, and its lack would be ruinous. Without it
our fleet would be helpless. Our naval experts are agreed that Subig Bay
is the proper place for the purpose. The national interests require that
the work of fortification and development of a naval station at Subig
Bay be begun at an early date; for under the best conditions it is a
work which will consume much time.

It is eminently desirable, however, that there should be provided a
naval general staff on lines similar to those of the General Staff
lately created for the Army. Within the Navy Department itself the needs
of the service have brought about a system under which the duties of a
general staff are partially performed; for the Bureau of Navigation has
under its direction the War College, the Office of Naval Intelligence,
and the Board of Inspection, and has been in close touch with the
General Board of the Navy. But though under the excellent officers at
their head, these boards and bureaus do good work, they have not the
authority of a general staff, and have not sufficient scope to insure a
proper readiness for emergencies. We need the establishment by law of a
body of trained officers, who shall exercise a systematic control of the
military affairs of the Navy, and be authorized advisers of the
Secretary concerning it.

By the act of June 28, 1902, the Congress authorized the President to
enter into treaty with Colombia for the building of the canal across the
Isthmus of Panama; it being provided that in the event of failure to
secure such treaty after the lapse of a reasonable time, recourse should
be had to building a canal through Nicaragua. It has not been necessary
to consider this alternative, as I am enabled to lay before the Senate a
treaty providing for the building of the canal across the Isthmus of
Panama. This was the route which commended itself to the deliberate
judgment of the Congress, and we can now acquire by treaty the right to
construct the canal over this route. The question now, therefore, is not
by which route the isthmian canal shall be built, for that question has
been definitely and irrevocably decided. The question is simply whether
or not we shall have an isthmian canal.

When the Congress directed that we should take the Panama route under
treaty with Colombia, the essence of the condition, of course, referred
not to the Government which controlled that route, but to the route
itself; to the territory across which the route lay, not to the name
which for the moment the territory bore on the map. The purpose of the
law was to authorize the President to make a treaty with the power in
actual control of the Isthmus of Panama. This purpose has been
fulfilled.

In the year 1846 this Government entered into a treaty with New Granada,
the predecessor upon the Isthmus of the Republic of Colombia and of the
present Republic of Panama, by which treaty it was provided that the
Government and citizens of the United States should always have free and
open right of way or transit across the Isthmus of Panama by any modes
of communication that might be constructed, while in turn our Government
guaranteed the perfect neutrality of the above-mentioned Isthmus with
the view that the free transit from the one to the other sea might not
be interrupted or embarrassed. The treaty vested in the United States a
substantial property right carved out of the rights of sovereignty and
property which New Granada then had and possessed over the said
territory. The name of New Granada has passed away and its territory has
been divided. Its successor, the Government of Colombia, has ceased to
own any property in the Isthmus. A new Republic, that of Panama, which
was at one time a sovereign state, and at another time a mere department
of the successive confederations known as New Granada and Columbia, has
now succeeded to the rights which first one and then the other formerly
exercised over the Isthmus. But as long as the Isthmus endures, the mere
geographical fact of its existence, and the peculiar interest therein
which is required by our position, perpetuate the solemn contract which
binds the holders of the territory to respect our right to freedom of
transit across it, and binds us in return to safeguard for the Isthmus
and the world the exercise of that inestimable privilege. The true
interpretation of the obligations upon which the United States entered
in this treaty of 1846 has been given repeatedly in the utterances of
Presidents and Secretaries of State. Secretary Cuss in 1858 officially
stated the position of this Government as follows:

"The progress of events has rendered the interoceanic route across the
narrow portion of Central America vastly important to the commercial
world, and especially to the United States, whose possessions extend
along the Atlantic and Pacific coasts, and demand the speediest and
easiest modes of communication. While the rights of sovereignty of the
states occupying this region should always be respected, we shall expect
that these rights be exercised in a spirit befitting the occasion and
the wants and circumstances that have arisen. Sovereignty has its duties
as well as its rights, and none of these local governments, even if
administered with more regard to the just demands of other nations than
they have been, would be permitted, in a spirit of Eastern isolation, to
close the gates of intercourse on the great highways of the world, and
justify the act by the pretension that these avenues of trade and travel
belong to them and that they choose to shut them, or, what is almost
equivalent, to encumber them with such unjust relations as would prevent
their general use."

Seven years later, in 1865, Mr. Seward in different communications took
the following position:

"The United States have taken and will take no interest in any question
of internal revolution in the State of Panama, or any State of the
United States of Colombia, but will maintain a perfect neutrality in
connection with such domestic altercations. The United States will,
nevertheless, hold themselves ready to protect the transit trade across
the Isthmus against invasion of either domestic or foreign disturbers of
the peace of the State of Panama. Neither the text nor the spirit of the
stipulation in that article by which the United States engages to
preserve the neutrality of the Isthmus of Panama, imposes an obligation
on this Government to comply with the requisition of the President of
the United States of Colombia for a force to protect the Isthmus of
Panama from a body of insurgents of that country. The purpose of the
stipulation was to guarantee the Isthmus against seizure or invasion by
a foreign power only."

Attorney-General Speed, under date of November 7, 1865, advised
Secretary Seward as follows:

"From this treaty it can not be supposed that New Granada invited the
United States to become a party to the intestine troubles of that
Government, nor did the United States become bound to take sides in the
domestic broils of New Granada. The United States did guarantee New
Granada in the sovereignty and property over the territory. This was as
against other and foreign governments."

For four hundred years, ever since shortly after the discovery of this
hemisphere, the canal across the Isthmus has been planned. For two score
years it has been worked at. When made it is to last for the ages. It is
to alter the geography of a continent and the trade routes of the world.
We have shown by every treaty we have negotiated or attempted to
negotiate with the peoples in control of the Isthmus and with foreign
nations in reference thereto our consistent good faith in observing our
obligations; on the one hand to the peoples of the Isthmus, and on the
other hand to the civilized world whose commercial rights we are
safeguarding and guaranteeing by our action. We have done our duty to
others in letter and in spirit, and we have shown the utmost forbearance
in exacting our own rights.

Last spring, under the act above referred to, a treaty concluded between
the representatives of the Republic of Colombia and of our Government
was ratified by the Senate. This treaty was entered into at the urgent
solicitation of the people of Colombia and after a body of experts
appointed by our Government especially to go into the matter of the
routes across the Isthmus had pronounced unanimously in favor of the
Panama route. In drawing up this treaty every concession was made to the
people and to the Government of Colombia. We were more than just in
dealing with them. Our generosity was such as to make it a serious
question whether we had not gone too far in their interest at the
expense of our own; for in our scrupulous desire to pay all possible
heed, not merely to the real but even to the fancied rights of our
weaker neighbor, who already owed so much to our protection and
forbearance, we yielded in all possible ways to her desires in drawing
up the treaty. Nevertheless the Government of Colombia not merely
repudiated the treaty, but repudiated it in such manner as to make it
evident by the time the Colombian Congress adjourned that not the
scantiest hope remained of ever getting a satisfactory treaty from them.
The Government of Colombia made the treaty, and yet when the Colombian
Congress was called to ratify it the vote against ratification was
unanimous. It does not appear that the Government made any real effort
to secure ratification.

Immediately after the adjournment of the Congress a revolution broke out
in Panama. The people of Panama had long been discontented with the
Republic of Colombia, and they had been kept quiet only by the prospect
of the conclusion of the treaty, which was to them a matter of vital
concern. When it became evident that the treaty was hopelessly lost, the
people of Panama rose literally as one man. Not a shot was fired by a
single man on the Isthmus in the interest of the Colombian Government.
Not a life was lost in the accomplishment of the revolution. The
Colombian troops stationed on the Isthmus, who had long been unpaid,
made common cause with the people of Panama, and with astonishing
unanimity the new Republic was started. The duty of the United States in
the premises was clear. In strict accordance with the principles laid
down by Secretaries Cass and Seward in the official documents above
quoted, the United States gave notice that it would permit the landing
of no expeditionary force, the arrival of which would mean chaos and
destruction along the line of the railroad and of the proposed Canal,
and an interruption of transit as an inevitable consequence. The de
facto Government of Panama was recognized in the following telegram to
Mr. Ehrman:

"The people of Panama have, by apparently unanimous movement, dissolved
their political connection with the Republic of Colombia and resumed
their independence. When you are satisfied that a de facto government,
republican in form and without substantial opposition from its own
people, has been established in the State of Panama, you will enter into
relations with it as the responsible government of the territory and
look to it for all due action to protect the persons and property of
citizens of the United States and to keep open the isthmian transit, in
accordance with the obligations of existing treaties governing the
relations of the United States to that Territory."

The Government of Colombia was notified of our action by the following
telegram to Mr. Beaupre:

"The people of Panama having, by an apparently unanimous movement,
dissolved their political connection with the Republic of Colombia and
resumed their independence, and having adopted a Government of their
own, republican in form, with which the Government of the United States
of America has entered into relations, the President of the United
States, in accordance with the ties of friendship which have so long and
so happily existed between the respective nations, most earnestly
commends to the Governments of Colombia and of Panama the peaceful and
equitable settlement of all questions at issue between them. He holds
that he is bound not merely by treaty obligations, but by the interests
of civilization, to see that the peaceful traffic of the world across
the Isthmus of Panama shall not longer be disturbed by a constant
succession of unnecessary and wasteful civil wars."

When these events happened, fifty-seven years had elapsed since the
United States had entered into its treaty with New Granada. During that
time the Governments of New Granada and of its successor, Colombia, have
been in a constant state of flux. The following is a partial list of the
disturbances on the Isthmus of Panama during the period in question as
reported to us by our consuls. It is not possible to give a complete
list, and some of the reports that speak of "revolutions" must mean
unsuccessful revolutions. May 22, 1850.--Outbreak; two Americans killed.
War vessel demanded to quell outbreak. October, 1850.--Revolutionary
plot to bring about independence of the Isthmus. July 22,
1851.--Revolution in four southern provinces. November 14,
1851.--Outbreak at Chagres. Man-of-war requested for Chagres. June 27,
1853.--Insurrection at Bogota, and consequent disturbance on Isthmus.
War vessel demanded. May 23, 1854--Political disturbances; war vessel
requested. June 28, 1854.--Attempted revolution. October 24,
1854.--Independence of Isthmus demanded by provincial legislature.
April, 1856.--Riot, and massacre of Americans. May 4, 1856.--Riot. May
18, 1856.--Riot. June 3, 1856.--Riot. October 2, 1856.--Conflict between
two native parties. United States forces landed. December 18,
1858.--Attempted secession of Panama. April, 1859.--Riots. September,
1860.--Outbreak. October 4, 1860.--Landing of United States forces in
consequence. May 23, 1861.--Intervention of the United States forces
required by intendente. October 2, 1861.--Insurrection and civil war.
April 4, 1862.--Measures to prevent rebels crossing Isthmus. June 13,
1862.--Mosquera's troops refused admittance to Panama. March,
1865.--Revolution, and United States troops landed. August,
1865.--Riots; unsuccessful attempt to invade Panama. March,
1866.--Unsuccessful revolution. April, 1867.--Attempt to overthrow
Government. August, 1867.--Attempt at revolution. July 5,
1868.--Revolution; provisional government inaugurated. August 29,
1868.--Revolution; provisional government overthrown. April,
1871.--Revolution; followed apparently by counter revolution. April,
1873.--Revolution and civil war which lasted to October, 1875. August,
1876.--Civil war which lasted until April, 1877. July, 1878.--Rebellion.
December, 1878.--Revolt. April, 1879.--Revolution. June,
1879.--Revolution. March, 1883.--Riot. May, 1883.--Riot. June,
1884.--Revolutionary attempt. December, 1884.--Revolutionary attempt.
January, 1885.--Revolutionary disturbances. March, 1885.--Revolution.
April, 1887.--Disturbance on Panama Railroad. November,
1887.--Disturbance on line of canal. January, 1889.--Riot. January,
1895.--Revolution which lasted until April. March, 1895.--Incendiary
attempt. October, 1899.--Revolution. February, 1900, to July,
1900.--Revolution. January, 1901--Revolution. July, 1901.--Revolutionary
disturbances. September, 1901.--City of Colon taken by rebels. March,
1902.--Revolutionary disturbances. July, 1902.--Revolution. The above is
only a partial list of the revolutions, rebellions, insurrections,
riots, and other outbreaks that have occurred during the period in
question; yet they number 53 for the 57 years. It will be noted that one
of them lasted for nearly three years before it was quelled; another for
nearly a year. In short, the experience of over half a century has shown
Colombia to be utterly incapable of keeping order on the Isthmus. Only
the active interference of the United States has enabled her to preserve
so much as a semblance of sovereignty. Had it not been for the exercise
by the United States of the police power in her interest, her connection
with the Isthmus would have been sundered long ago. In 1856, in 1860, in
1873, in 1885, in 1901, and again in 1902, sailors and marines from
United States war ships were forced to land in order to patrol the
Isthmus, to protect life and property, and to see that the transit
across the Isthmus was kept open. In 1861, in 1862, in 1885, and in
1900, the Colombian Government asked that the United States Government
would land troops to protect its interests and maintain order on the
Isthmus. Perhaps the most extraordinary request is that which has just
been received and which runs as follows:

"Knowing that revolution has already commenced in Panama [an eminent
Colombian] says that if the Government of the United States will land
troops to preserve Colombian sovereignty, and the transit, if requested
by Colombian charge d'affaires, this Government will declare martial
law; and, by virtue of vested constitutional authority, when public
order is disturbed, will approve by decree ratification of the canal
treaty as signed; or, if the Government of the United States prefers,
will call extra session of the Congress--with new and friendly
members--next May to approve the treaty. [An eminent Colombian] has the
perfect confidence of vice-president, he says, and if it became
necessary will go to the Isthmus or send representatives there to adjust
matters along above lines to the satisfaction of the people there."

This dispatch is noteworthy from two standpoints. Its offer of
immediately guaranteeing the treaty to us is in sharp contrast with the
positive and contemptuous refusal of the Congress which has just closed
its sessions to consider favorably such a treaty; it shows that the
Government which made the treaty really had absolute control over the
situation, but did not choose to exercise this control. The dispatch
further calls on us to restore order and secure Colombian supremacy in
the Isthmus from which the Colombian Government has just by its action
decided to bar us by preventing the construction of the canal.

The control, in the interest of the commerce and traffic of the whole
civilized world, of the means of undisturbed transit across the Isthmus
of Panama has become of transcendent importance to the United States. We
have repeatedly exercised this control by intervening in the course of
domestic dissension, and by protecting the territory from foreign
invasion. In 1853 Mr. Everett assured the Peruvian minister that we
should not hesitate to maintain the neutrality of the Isthmus in the
case of war between Peru and Colombia. In 1864 Colombia, which has
always been vigilant to avail itself of its privileges conferred by the
treaty, expressed its expectation that in the event of war between Peru
and Spain the United States would carry into effect the guaranty of
neutrality. There have been few administrations of the State Department
in which this treaty has not, either by the one side or the other, been
used as a basis of more or less important demands. It was said by Mr.
Fish in 1871 that the Department of State had reason to believe that an
attack upon Colombian sovereignty on the Isthmus had, on several
occasions, been averted by warning from this Government. In 1886, when
Colombia was under the menace of hostilities from Italy in the Cerruti
case, Mr. Bayard expressed the serious concern that the United States
could not but feel, that a European power should resort to force against
a sister republic of this hemisphere, as to the sovereign and
uninterrupted use of a part of whose territory we are guarantors under
the solemn faith of a treaty.

The above recital of facts establishes beyond question: First, that the
United States has for over half a century patiently and in good faith
carried out its obligations under the treaty of 1846; second, that when
for the first time it became possible for Colombia to do anything in
requital of the services thus repeatedly rendered to it for fifty-seven
years by the United States, the Colombian Government peremptorily and
offensively refused thus to do its part, even though to do so would have
been to its advantage and immeasurably to the advantage of the State of
Panama, at that time under its jurisdiction; third, that throughout this
period revolutions, riots, and factional disturbances of every kind have
occurred one after the other in almost uninterrupted succession, some of
them lasting for months and even for years, while the central government
was unable to put them down or to make peace with the rebels; fourth,
that these disturbances instead of showing any sign of abating have
tended to grow more numerous and more serious in the immediate past;
fifth, that the control of Colombia over the Isthmus of Panama could not
be maintained without the armed intervention and assistance of the
United States. In other words, the Government of Colombia, though wholly
unable to maintain order on the Isthmus, has nevertheless declined to
ratify a treaty the conclusion of which opened the only chance to secure
its own stability and to guarantee permanent peace on, and the
construction of a canal across, the Isthmus.

Under such circumstances the Government of the United States would have
been guilty of folly and weakness, amounting in their sum to a crime
against the Nation, had it acted otherwise than it did when the
revolution of November 3 last took place in Panama. This great
enterprise of building the interoceanic canal can not be held up to
gratify the whims, or out of respect to the governmental impotence, or
to the even more sinister and evil political peculiarities, of people
who, though they dwell afar off, yet, against the wish of the actual
dwellers on the Isthmus, assert an unreal supremacy over the territory.
The possession of a territory fraught with such peculiar capacities as
the Isthmus in question carries with it obligations to mankind. The
course of events has shown that this canal can not be built by private
enterprise, or by any other nation than our own; therefore it must be
built by the United States.

Every effort has been made by the Government of the United States to
persuade Colombia to follow a course which was essentially not only to
our interests and to the interests of the world, but to the interests of
Colombia itself. These efforts have failed; and Colombia, by her
persistence in repulsing the advances that have been made, has forced
us, for the sake of our own honor, and of the interest and well-being,
not merely of our own people, but of the people of the Isthmus of Panama
and the people of the civilized countries of the world, to take decisive
steps to bring to an end a condition of affairs which had become
intolerable. The new Republic of Panama immediately offered to negotiate
a treaty with us. This treaty I herewith submit. By it our interests are
better safeguarded than in the treaty with Colombia which was ratified
by the Senate at its last session. It is better in its terms than the
treaties offered to us by the Republics of Nicaragua and Costa Rica. At
last the right to begin this great undertaking is made available. Panama
has done her part. All that remains is for the American Congress to do
its part, and forthwith this Republic will enter upon the execution of a
project colossal in its size and of well-nigh incalculable possibilities
for the good of this country and the nations of mankind.

By the provisions of the treaty the United States guarantees and will
maintain the independence of the Republic of Panama. There is granted to
the United States in perpetuity the use, occupation, and control of a
strip ten miles wide and extending three nautical miles into the sea at
either terminal, with all lands lying outside of the zone necessary for
the construction of the canal or for its auxiliary works, and with the
islands in the Bay of Panama. The cities of Panama and Colon are not
embraced in the canal zone, but the United States assumes their
sanitation and, in case of need, the maintenance of order therein; the
United States enjoys within the granted limits all the rights, power,
and authority which it would possess were it the sovereign of the
territory to the exclusion of the exercise of sovereign rights by the
Republic. All railway and canal property rights belonging to Panama and
needed for the canal pass to the United States, including any property
of the respective companies in the cities of Panama and Colon; the
works, property, and personnel of the canal and railways are exempted
from taxation as well in the cities of Panama and Colon as in the canal
zone and its dependencies. Free immigration of the personnel and
importation of supplies for the construction and operation of the canal
are granted. Provision is made for the use of military force and the
building of fortifications by the United States for the protection of
the transit. In other details, particularly as to the acquisition of the
interests of the New Panama Canal Company and the Panama Railway by the
United States and the condemnation of private property for the uses of
the canal, the stipulations of the Hay-Herran treaty are closely
followed, while the compensation to be given for these enlarged grants
remains the same, being ten millions of dollars payable on exchange of
ratifications; and, beginning nine years from that date, an annual
payment of $250,000 during the life of the convention.

***

State of the Union Address
Theodore Roosevelt
December 6, 1904

To the Senate and House of Representatives:

The Nation continues to enjoy noteworthy prosperity. Such prosperity is
of course primarily due to the high individual average of our
citizenship, taken together with our great natural resources; but an
important factor therein is the working of our long-continued
governmental policies. The people have emphatically expressed their
approval of the principles underlying these policies, and their desire
that these principles be kept substantially unchanged, although of
course applied in a progressive spirit to meet changing conditions.

The enlargement of scope of the functions of the National Government
required by our development as a nation involves, of course, increase of
expense; and the period of prosperity through which the country is
passing justifies expenditures for permanent improvements far greater
than would be wise in hard times. Battle ships and forts, public
buildings, and improved waterways are investments which should be made
when we have the money; but abundant revenues and a large surplus always
invite extravagance, and constant care should be taken to guard against
unnecessary increase of the ordinary expenses of government. The cost of
doing Government business should be regulated with the same rigid
scrutiny as the cost of doing a private business.

In the vast and complicated mechanism of our modern civilized life the
dominant note is the note of industrialism; and the relations of capital
and labor, and especially of organized capital and organized labor, to
each other and to the public at large come second in importance only to
the intimate questions of family life. Our peculiar form of government,
with its sharp division of authority between the Nation and the several
States, has been on the whole far more advantageous to our development
than a more strongly centralized government. But it is undoubtedly
responsible for much of the difficulty of meeting with adequate
legislation the new problems presented by the total change in industrial
conditions on this continent during the last half century. In actual
practice it has proved exceedingly difficult, and in many cases
impossible, to get unanimity of wise action among the various States on
these subjects. From the very nature of the case this is especially true
of the laws affecting the employment of capital in huge masses.

With regard to labor the problem is no less important, but it is
simpler. As long as the States retain the primary control of the police
power the circumstances must be altogether extreme which require
interference by the Federal authorities, whether in the way of
safeguarding the rights of labor or in the way of seeing that wrong is
not done by unruly persons who shield themselves behind the name of
labor. If there is resistance to the Federal courts, interference with
the mails, or interstate commerce, or molestation of Federal property,
or if the State authorities in some crisis which they are unable to face
call for help, then the Federal Government may interfere; but though
such interference may be caused by a condition of things arising out of
trouble connected with some question of labor, the interference itself
simply takes the form of restoring order without regard to the questions
which have caused the breach of order--for to keep order is a primary
duty and in a time of disorder and violence all other questions sink
into abeyance until order has been restored. In the District of Columbia
and in the Territories the Federal law covers the entire field of
government; but the labor question is only acute in populous centers of
commerce, manufactures, or mining. Nevertheless, both in the enactment
and in the enforcement of law the Federal Government within its
restricted sphere should set an example to the State governments,
especially in a matter so vital as this affecting labor. I believe that
under modern industrial conditions it is often necessary, and even where
not necessary it is yet often wise, that there should be organization of
labor in order better to secure the rights of the individual
wage-worker. All encouragement should be given to any such organization
so long as it is conducted with a due and decent regard for the rights
of others. There are in this country some labor unions which have
habitually, and other labor unions which have often, been among the most
effective agents in working for good citizenship and for uplifting the
condition of those whose welfare should be closest to our hearts. But
when any labor union seeks improper ends, or seeks to achieve proper
ends by improper means, all good citizens and more especially all
honorable public servants must oppose the wrongdoing as resolutely as
they would oppose the wrongdoing of any great corporation. Of course any
violence, brutality, or corruption, should not for one moment be
tolerated. Wage-workers have an entire right to organize and by all
peaceful and honorable means to endeavor to persuade their fellows to
join with them in organizations. They have a legal right, which,
according to circumstances, may or may not be a moral right, to refuse
to work in company with men who decline to join their organizations.
They have under no circumstances the right to commit violence upon
these, whether capitalists or wage-workers, who refuse to support their
organizations, or who side with those with whom they are at odds; for
mob rule is intolerable in any form.

The wage-workers are peculiarly entitled to the protection and the
encouragement of the law. From the very nature of their occupation
railroad men, for instance, are liable to be maimed in doing the
legitimate work of their profession, unless the railroad companies are
required by law to make ample provision for their safety. The
Administration has been zealous in enforcing the existing law for this
purpose. That law should be amended and strengthened. Wherever the
National Government has power there should be a stringent employer's
liability law, which should apply to the Government itself where the
Government is an employer of labor.

In my Message to the Fifty-seventh Congress, at its second session, I
urged the passage of an employer's liability law for the District of
Columbia. I now renew that recommendation, and further recommend that
the Congress appoint a commission to make a comprehensive study of
employer's liability with the view of extending the provisions of a
great and constitutional law to all employments within the scope of
Federal power.

The Government has recognized heroism upon the water, and bestows medals
of honor upon those persons who by extreme and heroic daring have
endangered their lives in saving, or endeavoring to save, lives from the
perils of the sea in the waters over which the United States has
jurisdiction, or upon an American vessel. This recognition should be
extended to cover cases of conspicuous bravery and self-sacrifice in the
saving of life in private employments under the jurisdiction of the
United States, and particularly in the land commerce of the Nation.

The ever-increasing casualty list upon our railroads is a matter of
grave public concern, and urgently calls for action by the Congress. In
the matter of speed and comfort of railway travel our railroads give at
least as good service as those of any other nation, and there is no
reason why this service should not also be as safe as human ingenuity
can make it. Many of our leading roads have been foremost in the
adoption of the most approved safeguards for the protection of travelers
and employees, yet the list of clearly avoidable accidents continues
unduly large. The passage of a law requiring the adoption of a
block-signal system has been proposed to the Congress. I earnestly
concur in that recommendation, and would also point out to the Congress
the urgent need of legislation in the interest of the public safety
limiting the hours of labor for railroad employees in train service upon
railroads engaged in interstate commerce, and providing that only
trained and experienced persons be employed in positions of
responsibility connected with the operation of trains. Of course nothing
can ever prevent accidents caused by human weakness or misconduct; and
there should be drastic punishment for any railroad employee, whether
officer or man, who by issuance of wrong orders or by disobedience of
orders causes disaster. The law of 1901, requiring interstate railroads
to make monthly reports of all accidents to passengers and employees on
duty, should also be amended so as to empower the Government to make a
personal investigation, through proper officers, of all accidents
involving loss of life which seem to require investigation, with a
requirement that the results of such investigation be made public.

The safety-appliance law, as amended by the act of March 2, 1903, has
proved beneficial to railway employees, and in order that its provisions
may be properly carried out, the force of inspectors provided for by
appropriation should be largely increased. This service is analogous to
the Steamboat-Inspection Service, and deals with even more important
interests. It has passed the experimental stage and demonstrated its
utility, and should receive generous recognition by the Congress.

There is no objection to employees of the Government forming or
belonging to unions; but the Government can neither discriminate for nor
discriminate against nonunion men who are in its employment, or who seek
to be employed under it. Moreover, it is a very grave impropriety for
Government employees to band themselves together for the purpose of
extorting improperly high salaries from the Government. Especially is
this true of those within the classified service. The letter carriers,
both municipal and rural, are as a whole an excellent body of public
servants. They should be amply paid. But their payment must be obtained
by arguing their claims fairly and honorably before the Congress, and
not by banding together for the defeat of those Congressmen who refuse
to give promises which they can not in conscience give. The
Administration has already taken steps to prevent and punish abuses of
this nature; but it will be wise for the Congress to supplement this
action by legislation.

Much can be done by the Government in labor matters merely by giving
publicity to certain conditions. The Bureau of Labor has done excellent
work of this kind in many different directions. I shall shortly lay
before you in a special message the full report of the investigation of
the Bureau of Labor into the Colorado mining strike, as this was a
strike in which certain very evil forces, which are more or less at work
everywhere under the conditions of modern industrialism, became
startlingly prominent. It is greatly to be wished that the Department of
Commerce and Labor, through the Labor Bureau, should compile and arrange
for the Congress a list of the labor laws of the various States, and
should be given the means to investigate and report to the Congress upon
the labor conditions in the manufacturing and mining regions throughout
the country, both as to wages, as to hours of labor, as to the labor of
women and children, and as to the effect in the various labor centers of
immigration from abroad. In this investigation especial attention should
be paid to the conditions of child labor and child-labor legislation in
the several States. Such an investigation must necessarily take into
account many of the problems with which this question of child labor is
connected. These problems can be actually met, in most cases, only by
the States themselves; but the lack of proper legislation in one State
in such a matter as child labor often renders it excessively difficult
to establish protective restriction upon the work in another State
having the same industries, so that the worst tends to drag down the
better. For this reason, it would be well for the Nation at least to
endeavor to secure comprehensive information as to the conditions of
labor of children in the different States. Such investigation and
publication by the National Government would tend toward the securing of
approximately uniform legislation of the proper character among the
several States.

When we come to deal with great corporations the need for the Government
to act directly is far greater than in the case of labor, because great
corporations can become such only by engaging in interstate commerce,
and interstate commerce is peculiarly the field of the General
Government. It is an absurdity to expect to eliminate the abuses in
great corporations by State action. It is difficult to be patient with
an argument that such matters should be left to the States because more
than one State pursues the policy of creating on easy terms corporations
which are never operated within that State at all, but in other States
whose laws they ignore. The National Government alone can deal
adequately with these great corporations. To try to deal with them in an
intemperate, destructive, or demagogic spirit would, in all probability,
mean that nothing whatever would be accomplished, and, with absolute
certainty, that if anything were accomplished it would be of a harmful
nature. The American people need to continue to show the very qualities
that they have shown--that is, moderation, good sense, the earnest
desire to avoid doing any damage, and yet the quiet determination to
proceed, step by step, without halt and without hurry, in eliminating or
at least in minimizing whatever of mischief or evil there is to
interstate commerce in the conduct of great corporations. They are
acting in no spirit of hostility to wealth, either individual or
corporate. They are not against the rich man any more than against the
poor man. On the contrary, they are friendly alike toward rich man and
toward poor man, provided only that each acts in a spirit of justice and
decency toward his fellows. Great corporations are necessary, and only
men of great and singular mental power can manage such corporations
successfully, and such men must have great rewards. But these
corporations should be managed with due regard to the interest of the
public as a whole. Where this can be done under the present laws it must
be done. Where these laws come short others should be enacted to
supplement them.

Yet we must never forget the determining factor in every kind of work,
of head or hand, must be the man's own good sense, courage, and
kindliness. More important than any legislation is the gradual growth of
a feeling of responsibility and forbearance among capitalists, and
wage-workers alike; a feeling of respect on the part of each man for the
rights of others; a feeling of broad community of interest, not merely
of capitalists among themselves, and of wage-workers among themselves,
but of capitalists and wage-workers in their relations to each other,
and of both in their relations to their fellows who with them make up
the body politic. There are many captains of industry, many labor
leaders, who realize this. A recent speech by the president of one of
our great railroad systems to the employees of that system contains
sound common sense. It rims in part as follows:

"It is my belief we can better serve each other, better understand the
man as well as his business, when meeting face to face, exchanging
views, and realizing from personal contact we serve but one interest,
that of our mutual prosperity.

"Serious misunderstandings can not occur where personal good will exists
and opportunity for personal explanation is present.

"In my early business life I had experience with men of affairs of a
character to make me desire to avoid creating a like feeling of
resentment to myself and the interests in my charge, should fortune ever
place me in authority, and I am solicitous of a measure of confidence on
the part of the public and our employees that I shall hope may be
warranted by the fairness and good fellowship I intend shall prevail in
our relationship.

"But do not feel I am disposed to grant unreasonable requests, spend the
money of our company unnecessarily or without value received, nor expect
the days of mistakes are disappearing, or that cause for complaint will
not continually occur; simply to correct such abuses as may be
discovered, to better conditions as fast as reasonably may be expected,
constantly striving, with varying success, for that improvement we all
desire, to convince you there is a force at work in the right direction,
all the time making progress--is the disposition with which I have come
among you, asking your good will and encouragement.

"The day has gone by when a corporation can be handled successfully in
defiance of the public will, even though that will be unreasonable and
wrong. A public may be led, but not driven, and I prefer to go with it
and shape or modify, in a measure, its opinion, rather than be swept
from my bearings, with loss to myself and the interests in my charge.

"Violent prejudice exists towards corporate activity and capital today,
much of it founded in reason, more in apprehension, and a large measure
is due to the personal traits of arbitrary, unreasonable, incompetent,
and offensive men in positions of authority. The accomplishment of
results by indirection, the endeavor to thwart the intention, if not the
expressed letter of the law (the will of the people), a disregard of the
rights of others, a disposition to withhold what is due, to force by
main strength or inactivity a result not justified, depending upon the
weakness of the claimant and his indisposition to become involved in
litigation, has created a sentiment harmful in the extreme and a
disposition to consider anything fair that gives gain to the individual
at the expense of the company.

"If corporations are to continue to do the world's work, as they are
best fitted to, these qualities in their representatives that have
resulted in the present prejudice against them must be relegated to the
background. The corporations must come out into the open and see and be
seen. They must take the public into their confidence and ask for what
they want, and no more, and be prepared to explain satisfactorily what
advantage will accrue to the public if they are given their desires; for
they are permitted to exist not that they may make money solely, but
that they may effectively serve those from whom they derive their power.

"Publicity, and not secrecy, will win hereafter, and laws be construed
by their intent and not by their letter, otherwise public utilities will
be owned and operated by the public which created them, even though the
service be less efficient and the result less satisfactory from a
financial standpoint."

The Bureau of Corporations has made careful preliminary investigation of
many important corporations. It will make a special report on the beef
industry.

The policy of the Bureau is to accomplish the purposes of its creation
by co-operation, not antagonism; by making constructive legislation, not
destructive prosecution, the immediate object of its inquiries; by
conservative investigation of law and fact, and by refusal to issue
incomplete and hence necessarily inaccurate reports. Its policy being
thus one of open inquiry into, and not attack upon, business, the Bureau
has been able to gain not only the confidence, but, better still, the
cooperation of men engaged in legitimate business.

The Bureau offers to the Congress the means of getting at the cost of
production of our various great staples of commerce.

Of necessity the careful investigation of special corporations will
afford the Commissioner knowledge of certain business facts, the
publication of which might be an improper infringement of private
rights. The method of making public the results of these investigations
affords, under the law, a means for the protection of private rights.
The Congress will have all facts except such as would give to another
corporation information which would injure the legitimate business of a
competitor and destroy the incentive for individual superiority and
thrift.

The Bureau has also made exhaustive examinations into the legal
condition under which corporate business is carried on in the various
States; into all judicial decisions on the subject; and into the various
systems of corporate taxation in use. I call special attention to the
report of the chief of the Bureau; and I earnestly ask that the Congress
carefully consider the report and recommendations of the Commissioner on
this subject.

The business of insurance vitally affects the great mass of the people
of the United States and is national and not local in its application.
It involves a multitude of transactions among the people of the
different States and between American companies and foreign governments.
I urge that the Congress carefully consider whether the power of the
Bureau of Corporations can not constitutionally be extended to cover
interstate transactions in insurance.

Above all else, we must strive to keep the highways of commerce open to
all on equal terms; and to do this it is necessary to put a complete
stop to all rebates. Whether the shipper or the railroad is to blame
makes no difference; the rebate must be stopped, the abuses of the
private car and private terminal-track and side-track systems must be
stopped, and the legislation of the Fifty-eighth Congress which declares
it to be unlawful for any person or corporation to offer, grant, give,
solicit, accept, or receive any rebate, concession, or discrimination in
respect of the transportation of any property in interstate or foreign
commerce whereby such property shall by any device whatever be
transported at a less rate than that named in the tariffs published by
the carrier must be enforced. For some time after the enactment of the
Act to Regulate Commerce it remained a mooted question whether that act
conferred upon the Interstate Commerce Commission the power, after it
had found a challenged rate to be unreasonable, to declare what
thereafter should, prima facie, be the reasonable maximum rate for the
transportation in dispute. The Supreme Court finally resolved that
question in the negative, so that as the law now stands the Commission
simply possess the bare power to denounce a particular rate as
unreasonable. While I am of the opinion that at present it would be
undesirable, if it were not impracticable, finally to clothe the
Commission with general authority to fix railroad rates, I do believe
that, as a fair security to shippers, the Commission should be vested
with the power, where a given rate has been challenged and after full
hearing found to be unreasonable, to decide, subject to judicial review,
what shall be a reasonable rate to take its place; the ruling of the
Commission to take effect immediately, and to obtain unless and until it
is reversed by the court of review. The Government must in increasing
degree supervise and regulate the workings of the railways engaged in
interstate commerce; and such increased supervision is the only
alternative to an increase of the present evils on the one hand or a
still more radical policy on the other. In my judgment the most
important legislative act now needed as regards the regulation of
corporations is this act to confer on the Interstate Commerce Commission
the power to revise rates and regulations, the revised rate to at once
go into effect, and stay in effect unless and until the court of review
reverses it.

Steamship companies engaged in interstate commerce and protected in our
coastwise trade should be held to a strict observance of the interstate
commerce act.

In pursuing the set plan to make the city of Washington an example to
other American municipalities several points should be kept in mind by
the legislators. In the first place, the people of this country should
clearly understand that no amount of industrial prosperity, and above
all no leadership in international industrial competition, can in any
way atone for the sapping of the vitality of those who are usually
spoken of as the working classes. The farmers, the mechanics, the
skilled and unskilled laborers, the small shop keepers, make up the bulk
of the population of any country; and upon their well-being, generation
after generation, the well-being of the country and the race depends.
Rapid development in wealth and industrial leadership is a good thing,
but only if it goes hand in hand with improvement, and not
deterioration, physical and moral. The over-crowding of cities and the
draining of country districts are unhealthy and even dangerous symptoms
in our modern life. We should not permit overcrowding in cities. In
certain European cities it is provided by law that the population of
towns shall not be allowed to exceed a very limited density for a given
area, so that the increase in density must be continually pushed back
into a broad zone around the center of the town, this zone having great
avenues or parks within it. The death-rate statistics show a terrible
increase in mortality, and especially in infant mortality, in
overcrowded tenements. The poorest families in tenement houses live in
one room, and it appears that in these one-room tenements the average
death rate for a number of given cities at home and abroad is about
twice what it is in a two-room tenement, four times what it is in a
three-room tenement, and eight times what it is in a tenement consisting
of four rooms or over. These figures vary somewhat for different cities,
but they approximate in each city those given above; and in all cases
the increase of mortality, and especially of infant mortality, with the
decrease in the number of rooms used by the family and with the
consequent overcrowding is startling. The slum exacts a heavy total of
death from those who dwell therein; and this is the case not merely in
the great crowded slums of high buildings in New York and Chicago, but
in the alley slums of Washington. In Washington people can not afford to
ignore the harm that this causes. No Christian and civilized community
can afford to show a happy-go-lucky lack of concern for the youth of
to-day; for, if so, the community will have to pay a terrible penalty of
financial burden and social degradation in the to-morrow. There should
be severe child-labor and factory-inspection laws. It is very desirable
that married women should not work in factories. The prime duty of the
man is to work, to be the breadwinner; the prime duty of the woman is to
be the mother, the housewife. All questions of tariff and finance sink
into utter insignificance when compared with the tremendous, the vital
importance of trying to shape conditions so that these two duties of the
man and of the woman can be fulfilled under reasonably favorable
circumstances. If a race does not have plenty of children, or if the
children do not grow up, or if when they grow up they are unhealthy in
body and stunted or vicious in mind, then that race is decadent, and no
heaping up of wealth, no splendor of momentary material prosperity, can
avail in any degree as offsets.  The Congress has the same power of
legislation for the District of Columbia which the State legislatures
have for the various States. The problems incident to our highly complex
modern industrial civilization, with its manifold and perplexing
tendencies both for good and for evil, are far less sharply accentuated
in the city of Washington than in most other cities. For this very
reason it is easier to deal with the various phases of these problems in
Washington, and the District of Columbia government should be a model
for the other municipal governments of the Nation, in all such matters
as supervision of the housing of the poor, the creation of small parks
in the districts inhabited by the poor, in laws affecting labor, in laws
providing for the taking care of the children, in truant laws, and in
providing schools.

In the vital matter of taking care of children, much advantage could be
gained by a careful study of what has been accomplished in such States
as Illinois and Colorado by the juvenile courts. The work of the
juvenile court is really a work of character building. It is now
generally recognized that young boys and young girls who go wrong should
not be treated as criminals, not even necessarily as needing
reformation, but rather as needing to have their characters formed, and
for this end to have them tested and developed by a system of probation.
Much admirable work has been done in many of our Commonwealths by
earnest men and women who have made a special study of the needs of
those classes of children which furnish the greatest number of juvenile
offenders, and therefore the greatest number of adult offenders; and by
their aid, and by profiting by the experiences of the different States
and cities in these matters, it would be easy to provide a good code for
the District of Columbia.

Several considerations suggest the need for a systematic investigation
into and improvement of housing conditions in Washington. The hidden
residential alleys are breeding grounds of vice and disease, and should
be opened into minor streets. For a number of years influential citizens
have joined with the District Commissioners in the vain endeavor to
secure laws permitting the condemnation of insanitary dwellings. The
local death rates, especially from preventable diseases, are so unduly
high as to suggest that the exceptional wholesomeness of Washington's
better sections is offset by bad conditions in her poorer neighborhoods.
A special "Commission on Housing and Health Conditions in the National
Capital" would not only bring about the reformation of existing evils,
but would also formulate an appropriate building code to protect the
city from mammoth brick tenements and other evils which threaten to
develop here as they have in other cities. That the Nation's Capital
should be made a model for other municipalities is an ideal which
appeals to all patriotic citizens everywhere, and such a special
Commission might map out and organize the city's future development in
lines of civic social service, just as Major L'Enfant and the recent
Park Commission planned the arrangement of her streets and parks.

It is mortifying to remember that Washington has no compulsory school
attendance law and that careful inquiries indicate the habitual absence
from school of some twenty per cent of all children between the ages of
eight and fourteen. It must be evident to all who consider the problems
of neglected child life or the benefits of compulsory education in other
cities that one of the most urgent needs of the National Capital is a
law requiring the school attendance of all children, this law to be
enforced by attendance agents directed by the board of education.

Public play grounds are necessary means for the development of wholesome
citizenship in modern cities. It is important that the work inaugurated
here through voluntary efforts should be taken up and extended through
Congressional appropriation of funds sufficient to equip and maintain
numerous convenient small play grounds upon land which can be secured
without purchase or rental. It is also desirable that small vacant
places be purchased and reserved as small-park play grounds in densely
settled sections of the city which now have no public open spaces and
are destined soon to be built up solidly. All these needs should be met
immediately. To meet them would entail expenses; but a corresponding
saving could be made by stopping the building of streets and levelling
of ground for purposes largely speculative in outlying parts of the
city.

There are certain offenders, whose criminality takes the shape of
brutality and cruelty towards the weak, who need a special type of
punishment. The wife-beater, for example, is inadequately punished by
imprisonment; for imprisonment may often mean nothing to him, while it
may cause hunger and want to the wife and children who have been the
victims of his brutality. Probably some form of corporal punishment
would be the most adequate way of meeting this kind of crime.

The Department of Agriculture has grown into an educational institution
with a faculty of two thousand specialists making research into all the
sciences of production. The Congress appropriates, directly and
indirectly, six millions of dollars annually to carry on this work. It
reaches every State and Territory in the Union and the islands of the
sea lately come under our flag. Co-operation is had with the State
experiment stations, and with many other institutions and individuals.
The world is carefully searched for new varieties of grains, fruits,
grasses, vegetables, trees, and shrubs, suitable to various localities
in our country; and marked benefit to our producers has resulted.

The activities of our age in lines of research have reached the tillers
of the soil and inspired them with ambition to know more of the
principles that govern the forces of nature with which they have to
deal. Nearly half of the people of this country devote their energies to
growing things from the soil. Until a recent date little has been done
to prepare these millions for their life work. In most lines of human
activity college-trained men are the leaders. The farmer had no
opportunity for special training until the Congress made provision for
it forty years ago. During these years progress has been made and
teachers have been prepared. Over five thousand students are in
attendance at our State agricultural colleges. The Federal Government
expends ten millions of dollars annually toward this education and for
research in Washington and in the several States and Territories. The
Department of Agriculture has given facilities for post-graduate work to
five hundred young men during the last seven years, preparing them for
advance lines of work in the Department and in the State institutions.

The facts concerning meteorology and its relations to plant and animal
life are being systematically inquired into. Temperature and moisture
are controlling factors in all agricultural operations. The seasons of
the cyclones of the Caribbean Sea and their paths are being forecasted
with increasing accuracy. The cold winds that come from the north are
anticipated and their times and intensity told to farmers, gardeners,
and fruiterers in all southern localities.

We sell two hundred and fifty million dollars' worth of animals and
animal products to foreign countries every year, in addition to
supplying our own people more cheaply and abundantly than any other
nation is able to provide for its people. Successful manufacturing
depends primarily on cheap food, which accounts to a considerable extent
for our growth in this direction. The Department of Agriculture, by
careful inspection of meats, guards the health of our people and gives
clean bills of health to deserving exports; it is prepared to deal
promptly with imported diseases of animals, and maintain the excellence
of our flocks and herds in this respect. There should be an annual
census of the live stock of the Nation.

We sell abroad about six hundred million dollars' worth of plants and
their products every year. Strenuous efforts are being made to import
from foreign countries such grains as are suitable to our varying
localities. Seven years ago we bought three-fourths of our rice; by
helping the rice growers on the Gulf coast to secure seeds from the
Orient suited to their conditions, and by giving them adequate
protection, they now supply home demand and export to the islands of the
Caribbean Sea and to other rice-growing countries. Wheat and other
grains have been imported from light-rainfall countries to our lands in
the West and Southwest that have not grown crops because of light
precipitation, resulting in an extensive addition to our cropping area
and our home-making territory that can not be irrigated. Ten million
bushels of first-class macaroni wheat were grown from these experimental
importations last year. Fruits suitable to our soils and climates are
being imported from all the countries of the Old World--the fig from
Turkey, the almond from Spain, the date from Algeria, the mango from
India. We are helping our fruit growers to get their crops into European
markets by studying methods of preservation through refrigeration,
packing, and handling, which have been quite successful. We are helping
our hop growers by importing varieties that ripen earlier and later than
the kinds they have been raising, thereby lengthening the harvesting
season. The cotton crop of the country is threatened with root rot, the
bollworm, and the boll weevil. Our pathologists will find immune
varieties that will resist the root disease, and the bollworm can be
dealt with, but the boll weevil is a serious menace to the cotton crop.
It is a Central American insect that has become acclimated in Texas and
has done great damage. A scientist of the Department of Agriculture has
found the weevil at home in Guatemala being kept in check by an ant,
which has been brought to our cotton fields for observation. It is hoped
that it may serve a good purpose.

The soils of the country are getting attention from the farmer's
standpoint, and interesting results are following. We have duplicates of
the soils that grow the wrapper tobacco in Sumatra and the filler
tobacco in Cuba. It will be only a question of time when the large
amounts paid to these countries will be paid to our own people. The
reclamation of alkali lands is progressing, to give object lessons to
our people in methods by which worthless lands may be made productive.

The insect friends and enemies of the farmer are getting attention. The
enemy of the San Jose scale was found near the Great Wall of China, and
is now cleaning up all our orchards. The fig-fertilizing insect imported
from Turkey has helped to establish an industry in California that
amounts to from fifty to one hundred tons of dried figs annually, and is
extending over the Pacific coast. A parasitic fly from South Africa is
keeping in subjection the black scale, the worst pest of the orange and
lemon industry in California.

Careful preliminary work is being done towards producing our own silk.
The mulberry is being distributed in large numbers, eggs are being
imported and distributed, improved reels were imported from Europe last
year, and two expert reelers were brought to Washington to reel the crop
of cocoons and teach the art to our own people.

The crop-reporting system of the Department of Agriculture is being
brought closer to accuracy every year. It has two hundred and fifty
thousand reporters selected from people in eight vocations in life. It
has arrangements with most European countries for interchange of
estimates, so that our people may know as nearly as possible with what
they must compete.

During the two and a half years that have elapsed since the passage of
the reclamation act rapid progress has been made in the surveys and
examinations of the opportunities for reclamation in the thirteen States
and three Territories of the arid West. Construction has already been
begun on the largest and most important of the irrigation works, and
plans are being completed for works which will utilize the funds now
available. The operations are being carried on by the Reclamation
Service, a corps of engineers selected through competitive civil-service
examinations. This corps includes experienced consulting and
constructing engineers as well as various experts in mechanical and
legal matters, and is composed largely of men who have spent most of
their lives in practical affairs connected with irrigation. The larger
problems have been solved and it now remains to execute with care,
economy, and thoroughness the work which has been laid out. All
important details are being carefully considered by boards of consulting
engineers, selected for their thorough knowledge and practical
experience. Each project is taken up on the ground by competent men and
viewed from the standpoint of the creation of prosperous homes, and of
promptly refunding to the Treasury the cost of construction. The
reclamation act has been found to be remarkably complete and effective,
and so broad in its provisions that a wide range of undertakings has
been possible under it. At the same time, economy is guaranteed by the
fact that the funds must ultimately be returned to be used over again.

It is the cardinal principle of the forest-reserve policy of this
Administration that the reserves are for use. Whatever interferes with
the use of their resources is to be avoided by every possible means. But
these resources must be used in such a way as to make them permanent.

The forest policy of the Government is just now a subject of vivid
public interest throughout the West and to the people of the United
States in general. The forest reserves themselves are of extreme value
to the present as well as to the future welfare of all the western
public-land States. They powerfully affect the use and disposal of the
public lands. They are of special importance because they preserve the
water supply and the supply of timber for domestic purposes, and so
promote settlement under the reclamation act. Indeed, they are essential
to the welfare of every one of the great interests of the West.

Forest reserves are created for two principal purposes. The first is to
preserve the water supply. This is their most important use. The
principal users of the water thus preserved are irrigation ranchers and
settlers, cities and towns to whom their municipal water supplies are of
the very first importance, users and furnishers of water power, and the
users of water for domestic, manufacturing, mining, and other purposes.
All these are directly dependent upon the forest reserves.

The second reason for which forest reserves are created is to preserve
the timber supply for various classes of wood users. Among the more
important of these are settlers under the reclamation act and other
acts, for whom a cheap and accessible supply of timber for domestic uses
is absolutely necessary; miners and prospectors, who are in serious
danger of losing their timber supply by fire or through export by lumber
companies when timber lands adjacent to their mines pass into private
ownership; lumbermen, transportation companies, builders, and commercial
interests in general.

Although the wisdom of creating forest reserves is nearly everywhere
heartily recognized, yet in a few localities there has been
misunderstanding and complaint. The following statement is therefore
desirable:

The forest reserve policy can be successful only when it has the full
support of the people of the West. It can not safely, and should not in
any case, be imposed upon them against their will. But neither can we
accept the views of those whose only interest in the forest is
temporary; who are anxious to reap what they have not sown and then move
away, leaving desolation behind them. On the contrary, it is everywhere
and always the interest of the permanent settler and the permanent
business man, the man with a stake in the country, which must be
considered and which must decide.

The making of forest reserves within railroad and wagon-road land-grant
limits will hereafter, as for the past three years, be so managed as to
prevent the issue, under the act of June 4, 1897, of base for exchange
or lieu selection (usually called scrip). In all cases where forest
reserves within areas covered by land grants appear to be essential to
the prosperity of settlers, miners, or others, the Government lands
within such proposed forest reserves will, as in the recent past, be
withdrawn from sale or entry pending the completion of such negotiations
with the owners of the land grants as will prevent the creation of
so-called scrip.

It was formerly the custom to make forest reserves without first getting
definite and detailed information as to the character of land and timber
within their boundaries. This method of action often resulted in badly
chosen boundaries and consequent injustice to settlers and others.
Therefore this Administration adopted the present method of first
withdrawing the land from disposal, followed by careful examination on
the ground and the preparation of detailed maps and descriptions, before
any forest reserve is created.

I have repeatedly called attention to the confusion which exists in
Government forest matters because the work is scattered among three
independent organizations. The United States is the only one of the
great nations in which the forest work of the Government is not
concentrated under one department, in consonance with the plainest
dictates of good administration and common sense. The present
arrangement is bad from every point of view. Merely to mention it is to
prove that it should be terminated at once. As I have repeatedly
recommended, all the forest work of the Government should be
concentrated in the Department of Agriculture, where the larger part of
that work is already done, where practically all of the trained
foresters of the Government are employed, where chiefly in Washington
there is comprehensive first-class knowledge of the problems of the
reserves acquired on the ground, where all problems relating to growth
from the soil are already gathered, and where all the sciences auxiliary
to forestry are at hand for prompt and effective co-operation. These
reasons are decisive in themselves, but it should be added that the
great organizations of citizens whose interests are affected by the
forest-reserves, such as the National Live Stock Association, the
National Wool Growers' Association, the American Mining Congress, the
national Irrigation Congress, and the National Board of Trade, have
uniformly, emphatically, and most of them repeatedly, expressed
themselves in favor of placing all Government forest work in the
Department of Agriculture because of the peculiar adaptation of that
Department for it. It is true, also, that the forest services of nearly
all the great nations of the world are under the respective departments
of agriculture, while in but two of the smaller nations and in one
colony are they under the department of the interior. This is the result
of long and varied experience and it agrees fully with the requirements
of good administration in our own case.

The creation of a forest service in the Department of Agriculture will
have for its important results:

First. A better handling of all forest work; because it will be under a
single head, and because the vast and indispensable experience of the
Department in all matters pertaining to the forest reserves, to forestry
in general, and to other forms of production from the soil, will be
easily and rapidly accessible.

Second. The reserves themselves, being handled from the point of view of
the man in the field, instead of the man in the office, will be more
easily and more widely useful to the people of the West than has been
the case hitherto.

Third. Within a comparatively short time the reserves will become
self-supporting. This is important, because continually and rapidly
increasing appropriations will be necessary for the proper care of this
exceedingly important interest of the Nation, and they can and should he
offset by returns from the National forests. Under similar circumstances
the forest possessions of other great nations form an important source
of revenue to their governments.

Every administrative officer concerned is convinced of the necessity for
the proposed consolidation of forest work in the Department of
Agriculture, and I myself have urged it more than once in former
messages. Again I commend it to the early and favorable consideration of
the Congress. The interests of the Nation at large and of the West in
particular have suffered greatly because of the delay.

I call the attention of the Congress again to the report and
recommendation of the Commission on the Public Lands forwarded by me to
the second session of the present Congress. The Commission has
prosecuted its investigations actively during the past season, and a
second report is now in an advanced stage of preparation.

In connection with the work of the forest reserves I desire again to
urge upon the Congress the importance of authorizing the President to
set aside certain portions of these reserves or other public lands as
game refuges for the preservation of the bison, the wapiti, and other
large beasts once so abundant in our woods and mountains and on our
great plains, and now tending toward extinction. Every support should be
given to the authorities of the Yellowstone Park in their successful
efforts at preserving the large creatures therein; and at very little
expense portions of the public domain in other regions which are wholly
unsuited to agricultural settlement could be similarly utilized. We owe
it to future generations to keep alive the noble and beautiful creatures
which by their presence add such distinctive character to the American
wilderness. The limits of the Yellowstone Park should be extended
southwards. The Canyon of the Colorado should be made a national park;
and the national-park system should include the Yosemite and as many as
possible of the groves of giant trees in California.

The veterans of the Civil War have a claim upon the Nation such as no
other body of our citizens possess. The Pension Bureau has never in its
history been managed in a more satisfactory manner than is now the case.

The progress of the Indians toward civilization, though not rapid, is
perhaps all that could be hoped for in view of the circumstances. Within
the past year many tribes have shown, in a degree greater than ever
before, an appreciation of the necessity of work. This changed attitude
is in part due to the policy recently pursued of reducing the amount of
subsistence to the Indians, and thus forcing them, through sheer
necessity, to work for a livelihood. The policy, though severe, is a
useful one, but it is to be exercised only with judgment and with a full
understanding of the conditions which exist in each community for which
it is intended. On or near the Indian reservations there is usually very
little demand for labor, and if the Indians are to earn their living and
when work can not be furnished from outside (which is always
preferable), then it must be furnished by the Government. Practical
instruction of this kind would in a few years result in the forming of
habits of regular industry, which would render the Indian a producer and
would effect a great reduction in the cost of his maintenance.

It is commonly declared that the slow advance of the Indians is due to
the unsatisfactory character of the men appointed to take immediate
charge of them, and to some extent this is true. While the standard of
the employees in the Indian Service shows great improvement over that of
bygone years, and while actual corruption or flagrant dishonesty is now
the rare exception, it is nevertheless the fact that the salaries paid
Indian agents are not large enough to attract the best men to that field
of work. To achieve satisfactory results the official in charge of an
Indian tribe should possess the high qualifications which are required
in the manager of a large business, but only in exceptional cases is it
possible to secure men of such a type for these positions. Much better
service, however, might be obtained from those now holding the places
were it practicable to get out of them the best that is in them, and
this should be done by bringing them constantly into closer touch with
their superior officers. An agent who has been content to draw his
salary, giving in return the least possible equivalent in effort and
service, may, by proper treatment, by suggestion and encouragement, or
persistent urging, be stimulated to greater effort and induced to take a
more active personal interest in his work.

Under existing conditions an Indian agent in the distant West may be
wholly out of touch with the office of the Indian Bureau. He may very
well feel that no one takes a personal interest in him or his efforts.
Certain routine duties in the way of reports and accounts are required
of him, but there is no one with whom he may intelligently consult on
matters vital to his work, except after long delay. Such a man would be
greatly encouraged and aided by personal contact with some one whose
interest in Indian affairs and whose authority in the Indian Bureau were
greater than his own, and such contact would be certain to arouse and
constantly increase the interest he takes in his work.

The distance which separates the agents--the workers in the field--from
the Indian Office in Washington is a chief obstacle to Indian progress.
Whatever shall more closely unite these two branches of the Indian
Service, and shall enable them to co-operate more heartily and more
effectively, will be for the increased efficiency of the work and the
betterment of the race for whose improvement the Indian Bureau was
established. The appointment of a field assistant to the Commissioner of
Indian Affairs would be certain to insure this good end. Such an
official, if possessed of the requisite energy and deep interest in the
work, would be a most efficient factor in bringing into closer
relationship and a more direct union of effort the Bureau in Washington
and its agents in the field; and with the co-operation of its branches
thus secured the Indian Bureau would, in measure fuller than ever
before, lift up the savage toward that self-help and self-reliance which
constitute the man.

In 1907 there will be held at Hampton Roads the tricentennial
celebration of the settlement at Jamestown, Virginia, with which the
history of what has now become the United States really begins. I
commend this to your favorable consideration. It is an event of prime
historic significance, in which all the people of the United States
should feel, and should show, great and general interest.

In the Post-Office Department the service has increased in efficiency,
and conditions as to revenue and expenditure continue satisfactory. The
increase of revenue during the year was $9,358,181.10, or 6.9 per cent,
the total receipts amounting to $143,382,624.34. The expenditures were
$152,362,116.70, an increase of about 9 per cent over the previous year,
being thus $8,979,492.36 in excess of the current revenue. Included in
these expenditures was a total appropriation of $152,956,637.35 for the
continuation and extension of the rural free-delivery service, which was
an increase of $4,902,237.35 over the amount expended for this purpose
in the preceding fiscal year. Large as this expenditure has been the
beneficent results attained in extending the free distribution of mails
to the residents of rural districts have justified the wisdom of the
outlay. Statistics brought down to the 1st of October, 1904, show that
on that date there were 27,138 rural routes established, serving
approximately 12,000,000 of people in rural districts remote from
post-offices, and that there were pending at that time 3,859 petitions
for the establishment of new rural routes. Unquestionably some part of
the general increase in receipts is due to the increased postal
facilities which the rural service has afforded. The revenues have also
been aided greatly by amendments in the classification of mail matter,
and the curtailment of abuses of the second-class mailing privilege. The
average increase in the volume of mail matter for the period beginning
with 1902 and ending June, 1905 (that portion for 1905 being estimated),
is 40.47 per cent, as compared with 25.46 per cent for the period
immediately preceding, and 15.92 for the four-year period immediately
preceding that.

Our consular system needs improvement. Salaries should be substituted
for fees, and the proper classification, grading, and transfer of
consular officers should be provided. I am not prepared to say that a
competitive system of examinations for appointment would work well; but
by law it should be provided that consuls should be familiar, according
to places for which they apply, with the French, German, or Spanish
languages, and should possess acquaintance with the resources of the
United States.

The collection of objects of art contemplated in section 5586 of the
Revised Statutes should be designated and established as a National
Gallery of Art; and the Smithsonian Institution should be authorized to
accept any additions to said collection that may be received by gift,
bequest, or devise.

It is desirable to enact a proper National quarantine law. It is most
undesirable that a State should on its own initiative enforce quarantine
regulations which are in effect a restriction upon interstate and
international commerce. The question should properly be assumed by the
Government alone. The Surgeon-General of the National Public Health and
Marine-Hospital Service has repeatedly and convincingly set forth the
need for such legislation.

I call your attention to the great extravagance in printing and binding
Government publications, and especially to the fact that altogether too
many of these publications are printed. There is a constant tendency to
increase their number and their volume. It is an understatement to say
that no appreciable harm would be caused by, and substantial benefit
would accrue from, decreasing the amount of printing now done by at
least one-half. Probably the great majority of the Government reports
and the like now printed are never read at all, and furthermore the
printing of much of the material contained in many of the remaining ones
serves no useful purpose whatever.

The attention of the Congress should be especially given to the currency
question, and that the standing committees on the matter in the two
Houses charged with the duty, take up the matter of our currency and see
whether it is not possible to secure an agreement in the business world
for bettering the system; the committees should consider the question of
the retirement of the greenbacks and the problem of securing in our
currency such elasticity as is consistent with safety. Every silver
dollar should be made by law redeemable in gold at the option of the
holder.

I especially commend to your immediate attention the encouragement of
our merchant marine by appropriate legislation.

The growing importance of the Orient as a field for American exports
drew from my predecessor, President McKinley, an urgent request for its
special consideration by the Congress. In his message of 1898 he stated:

"In this relation, as showing the peculiar volume and value of our trade
with China and the peculiarly favorable conditions which exist for their
expansion in the normal course of trade, I refer to the communication
addressed to the Speaker of the House of Representatives by the
Secretary of the Treasury on the 14th of last June, with its
accompanying letter of the Secretary of State, recommending an
appropriation for a commission to study the industrial and commercial
conditions in the Chinese Empire and to report as to the opportunities
for and the obstacles to the enlargement of markets in China for the raw
products and manufactures of the United States. Action was not taken
thereon during the last session. I cordially urge that the
recommendation receive at your hands the consideration which its
importance and timeliness merit."

In his annual message of 1889 he again called attention to this
recommendation, quoting it, and stated further:

"I now renew this recommendation, as the importance of the subject has
steadily grown since it was first submitted to you, and no time should
be lost in studying for ourselves the resources of this great field for
American trade and enterprise."

The importance of securing proper information and data with a view to
the enlargement of our trade with Asia is undiminished. Our consular
representatives in China have strongly urged a place for permanent
display of American products in some prominent trade center of that
Empire, under Government control and management, as an effective means
of advancing our export trade therein. I call the attention of the
Congress to the desirability of carrying out these suggestions.

In dealing with the questions of immigration and naturalization it is
indispensable to keep certain facts ever before the minds of those who
share in enacting the laws. First and foremost, let us remember that the
question of being a good American has nothing whatever to do with a
man's birthplace any more than it has to do with his creed. In every
generation from the time this Government was founded men of foreign
birth have stood in the very foremost rank of good citizenship, and that
not merely in one but in every field of American activity; while to try
to draw a distinction between the man whose parents came to this country
and the man whose ancestors came to it several generations back is a
mere absurdity. Good Americanism is a matter of heart, of conscience, of
lofty aspiration, of sound common sense, but not of birthplace or of
creed. The medal of honor, the highest prize to be won by those who
serve in the Army and the Navy of the United States decorates men born
here, and it also decorates men born in Great Britain and Ireland, in
Germany, in Scandinavia, in France, and doubtless in other countries
also. In the field of statesmanship, in the field of business, in the
field of philanthropic endeavor, it is equally true that among the men
of whom we are most proud as Americans no distinction whatever can be
drawn between those who themselves or whose parents came over in sailing
ship or steamer from across the water and those whose ancestors stepped
ashore into the wooded wilderness at Plymouth or at the mouth of the
Hudson, the Delaware, or the James nearly three centuries ago. No
fellow-citizen of ours is entitled to any peculiar regard because of the
way in which he worships his Maker, or because of the birthplace of
himself or his parents, nor should he be in any way discriminated
against therefor. Each must stand on his worth as a man and each is
entitled to be judged solely thereby.

There is no danger of having too many immigrants of the right kind. It
makes no difference from what country they come. If they are sound in
body and in mind, and, above all, if they are of good character, so that
we can rest assured that their children and grandchildren will be worthy
fellow-citizens of our children and grandchildren, then we should
welcome them with cordial hospitality.

But the citizenship of this country should not be debased. It is vital
that we should keep high the standard of well-being among our
wage-workers, and therefore we should not admit masses of men whose
standards of living and whose personal customs and habits are such that
they tend to lower the level of the American wage-worker; and above all
we should not admit any man of an unworthy type, any man concerning whom
we can say that he will himself be a bad citizen, or that his children
and grandchildren will detract from instead of adding to the sum of the
good citizenship of the country. Similarly we should take the greatest
care about naturalization. Fraudulent naturalization, the naturalization
of improper persons, is a curse to our Government; and it is the affair
of every honest voter, wherever born, to see that no fraudulent voting
is allowed, that no fraud in connection with naturalization is
permitted.

In the past year the cases of false, fraudulent, and improper
naturalization of aliens coming to the attention of the executive
branches of the Government have increased to an alarming degree.
Extensive sales of forged certificates of naturalization have been
discovered, as well as many cases of naturalization secured by perjury
and fraud; and in addition, instances have accumulated showing that many
courts issue certificates of naturalization carelessly and upon
insufficient evidence.

Under the Constitution it is in the power of the Congress "to establish
a uniform rule of naturalization," and numerous laws have from time to
time been enacted for that purpose, which have been supplemented in a
few States by State laws having special application. The Federal
statutes permit naturalization by any court of record in the United
States having common-law jurisdiction and a seal and clerk, except the
police court of the District of Columbia, and nearly all these courts
exercise this important function. It results that where so many courts
of such varying grades have jurisdiction, there is lack of uniformity in
the rules applied in conferring naturalization. Some courts are strict
and others lax. An alien who may secure naturalization in one place
might be denied it in another, and the intent of the constitutional
provision is in fact defeated. Furthermore, the certificates of
naturalization issued by the courts differ widely in wording and
appearance, and when they are brought into use in foreign countries, are
frequently subject to suspicion.

There should be a comprehensive revision of the naturalization laws. The
courts having power to naturalize should be definitely named by national
authority; the testimony upon which naturalization may be conferred
should be definitely prescribed; publication of impending naturalization
applications should be required in advance of their hearing in court;
the form and wording of all certificates issued should be uniform
throughout the country, and the courts should be required to make
returns to the Secretary of State at stated periods of all
naturalizations conferred.

Not only are the laws relating to naturalization now defective, but
those relating to citizenship of the United States ought also to be made
the subject of scientific inquiry with a view to probable further
legislation. By what acts expatriation may be assumed to have been
accomplished, how long an American citizen may reside abroad and receive
the protection of our passport, whether any degree of protection should
be extended to one who has made the declaration of intention to become a
citizen of the United States but has not secured naturalization, are
questions of serious import, involving personal rights and often
producing friction between this Government and foreign governments. Yet
upon these question our laws are silent. I recommend that an examination
be made into the subjects of citizenship, expatriation, and protection
of Americans abroad, with a view to appropriate legislation.

The power of the Government to protect the integrity of the elections of
its own officials is inherent and has been recognized and affirmed by
repeated declarations of the Supreme Court. There is no enemy of free
government more dangerous and none so insidious as the corruption of the
electorate. No one defends or excuses corruption, and it would seem to
follow that none would oppose vigorous measures to eradicate it. I
recommend the enactment of a law directed against bribery and corruption
in Federal elections. The details of such a law may be safely left to
the wise discretion of the Congress, but it should go as far as under
the Constitution it is possible to go, and should include severe
penalties against him who gives or receives a bribe intended to
influence his act or opinion as an elector; and provisions for the
publication not only of the expenditures for nominations and elections
of all candidates but also of all contributions received and
expenditures made by political committees.

No subject is better worthy the attention of the Congress than that
portion of the report of the Attorney-General dealing with the long
delays and the great obstruction to justice experienced in the cases of
Beavers, Green and Gaynor, and Benson. Were these isolated and special
cases, I should not call your attention to them; but the difficulties
encountered as regards these men who have been indicted for criminal
practices are not exceptional; they are precisely similar in kind to
what occurs again and again in the case of criminals who have sufficient
means to enable them to take advantage of a system of procedure which
has grown up in the Federal courts and which amounts in effect to making
the law easy of enforcement against the man who has no money, and
difficult of enforcement, even to the point of sometimes securing
immunity, as regards the man who has money. In criminal cases the writ
of the United States should run throughout its borders. The wheels of
justice should not be clogged, as they have been clogged in the cases
above mentioned, where it has proved absolutely impossible to bring the
accused to the place appointed by the Constitution for his trial. Of
recent years there has been grave and increasing complaint of the
difficulty of bringing to justice those criminals whose criminality,
instead of being against one person in the Republic, is against all
persons in the Republic, because it is against the Republic itself.
Under any circumstance and from the very nature of the case it is often
exceedingly difficult to secure proper punishment of those who have been
guilty of wrongdoing against the Government. By the time the offender
can be brought into court the popular wrath against him has generally
subsided; and there is in most instances very slight danger indeed of
any prejudice existing in the minds of the jury against him. At present
the interests of the innocent man are amply safeguarded; but the
interests of the Government, that is, the interests of honest
administration, that is the interests of the people, are not recognized
as they should be. No subject better warrants the attention of the
Congress. Indeed, no subject better warrants the attention of the bench
and the bar throughout the United States.

Alaska, like all our Territorial acquisitions, has proved resourceful
beyond the expectations of those who made the purchase. It has become
the home of many hardy, industrious, and thrifty American citizens.
Towns of a permanent character have been built. The extent of its wealth
in minerals, timber, fisheries, and agriculture, while great, is
probably not comprehended yet in any just measure by our people. We do
know, however, that from a very small beginning its products have grown
until they are a steady and material contribution to the wealth of the
nation. Owing to the immensity of Alaska and its location in the far
north, it is a difficult matter to provide many things essential to its
growth and to the happiness and comfort of its people by private
enterprise alone. It should, therefore, receive reasonable aid from the
Government. The Government has already done excellent work for Alaska in
laying cables and building telegraph lines. This work has been done in
the most economical and efficient way by the Signal Corps of the Army.

In some respects it has outgrown its present laws, while in others those
laws have been found to be inadequate. In order to obtain information
upon which I could rely I caused an official of the Department of
Justice, in whose judgment I have confidence, to visit Alaska during the
past summer for the purpose of ascertaining how government is
administered there and what legislation is actually needed at present. A
statement of the conditions found to exist, together with some
recommendations and the reasons therefor, in which I strongly concur,
will be found in the annual report of the Attorney-General. In some
instances I feel that the legislation suggested is so imperatively
needed that I am moved briefly to emphasize the Attorney-General's
proposals.

Under the Code of Alaska as it now stands many purely administrative
powers and duties, including by far the most important, devolve upon the
district judges or upon the clerks of the district court acting under
the direction of the judges, while the governor, upon whom these powers
and duties should logically fall, has nothing specific to do except to
make annual reports, issue Thanksgiving Day proclamations, and appoint
Indian policemen and notaries public. I believe it essential to good
government in Alaska, and therefore recommend, that the Congress divest
the district judges and the clerks of their courts of the administrative
or executive functions that they now exercise and cast them upon the
governor. This would not be an innovation; it would simply conform the
government of Alaska to fundamental principles, making the governorship
a real instead of a merely nominal office, and leaving the judges free
to give their entire attention to their judicial duties and at the same
time removing them from a great deal of the strife that now embarrasses
the judicial office in Alaska.

I also recommend that the salaries of the district judges and district
attorneys in Alaska be increased so as to make them equal to those
received by corresponding officers in the United States after deducting
the difference in the cost of living; that the district attorneys should
be prohibited from engaging in private practice; that United States
commissioners be appointed by the governor of the Territory instead of
by the district judges, and that a fixed salary be provided for them to
take the place of the discredited "fee system," which should be
abolished in all offices; that a mounted constabulary be created to
police the territory outside the limits of incorporated towns--a vast
section now wholly without police protection; and that some provision be
made to at least lessen the oppressive delays and costs that now attend
the prosecution of appeals from the district court of Alaska. There
should be a division of the existing judicial districts, and an increase
in the number of judges.

Alaska should have a Delegate in the Congress. Where possible, the
Congress should aid in the construction of needed wagon roads.
Additional light-houses should be provided. In my judgment, it is
especially important to aid in such manner as seems just and feasible in
the construction of a trunk line of railway to connect the Gulf of
Alaska with the Yukon River through American territory. This would be
most beneficial to the development of the resources of the Territory,
and to the comfort and welfare of its people.

Salmon hatcheries should be established in many different streams, so as
to secure the preservation of this valuable food fish. Salmon fisheries
and canneries should be prohibited on certain of the rivers where the
mass of those Indians dwell who live almost exclusively on fish.

The Alaskan natives are kindly, intelligent, anxious to learn, and
willing to work. Those who have come under the influence of
civilization, even for a limited period, have proved their capability of
becoming self-supporting, self-respecting citizens, and ask only for the
just enforcement of law and intelligent instruction and supervision.
Others, living in more remote regions, primitive, simple hunters and
fisher folk, who know only the life of the woods and the waters, are
daily being confronted with twentieth-century civilization with all of
its complexities. Their country is being overrun by strangers, the game
slaughtered and driven away, the streams depleted of fish, and hitherto
unknown and fatal diseases brought to them, all of which combine to
produce a state of abject poverty and want which must result in their
extinction. Action in their interest is demanded by every consideration
of justice and humanity.

The needs of these people are:

The abolition of the present fee system, whereby the native is degraded,
imposed upon, and taught the injustice of law.

The establishment of hospitals at central points, so that contagious
diseases that are brought to them continually by incoming whites may be
localized and not allowed to become epidemic, to spread death and
destitution over great areas.

The development of the educational system in the form of practical
training in such industries as will assure the Indians self-support
under the changed conditions in which they will have to live.

The duties of the office of the governor should be extended to include
the supervision of Indian affairs, with necessary assistants in
different districts. He should be provided with the means and the power
to protect and advise the native people, to furnish medical treatment in
time of epidemics, and to extend material relief in periods of famine
and extreme destitution.

The Alaskan natives should be given the right to acquire, hold, and
dispose of property upon the same conditions as given other inhabitants;
and the privilege of citizenship should be given to such as may be able
to meet certain definite requirements. In Hawaii Congress should give
the governor power to remove all the officials appointed under him. The
harbor of Honolulu should be dredged. The Marine-Hospital Service should
be empowered to study leprosy in the islands. I ask special
consideration for the report and recommendation of the governor of Porto
Rico.

In treating of our foreign policy and of the attitude that this great
Nation should assume in the world at large, it is absolutely necessary
to consider the Army and the Navy, and the Congress, through which the
thought of the Nation finds its expression, should keep ever vividly in
mind the fundamental fact that it is impossible to treat our foreign
policy, whether this policy takes shape in the effort to secure justice
for others or justice for ourselves, save as conditioned upon the
attitude we are willing to take toward our Army, and especially toward
our Navy. It is not merely unwise, it is contemptible, for a nation, as
for an individual, to use high-sounding language to proclaim its
purposes, or to take positions which are ridiculous if unsupported by
potential force, and then to refuse to provide this force. If there is
no intention of providing and of keeping the force necessary to back up
a strong attitude, then it is far better not to assume such an attitude.

The steady aim of this Nation, as of all enlightened nations, should be
to strive to bring ever nearer the day when there shall prevail
throughout the world the peace of justice. There are kinds of peace
which are highly undesirable, which are in the long run as destructive
as any war. Tyrants and oppressors have many times made a wilderness and
called it peace. Many times peoples who were slothful or timid or
shortsighted, who had been enervated by ease or by luxury, or misled by
false teachings, have shrunk in unmanly fashion from doing duty that was
stern and that needed self-sacrifice, and have sought to hide from their
own minds their shortcomings, their ignoble motives, by calling them
love of peace. The peace of tyrannous terror, the peace of craven
weakness, the peace of injustice, all these should be shunned as we shun
unrighteous war. The goal to set before us as a nation, the goal which
should be set before all mankind, is the attainment of the peace of
justice, of the peace which comes when each nation is not merely
safe-guarded in its own rights, but scrupulously recognizes and performs
its duty toward others. Generally peace tells for righteousness; but if
there is conflict between the two, then our fealty is due-first to the
cause of righteousness. Unrighteous wars are common, and unrighteous
peace is rare; but both should be shunned. The right of freedom and the
responsibility for the exercise of that right can not be divorced. One
of our great poets has well and finely said that freedom is not a gift
that tarries long in the hands of cowards. Neither does it tarry long in
the hands of those too slothful, too dishonest, or too unintelligent to
exercise it. The eternal vigilance which is the price of liberty must be
exercised, sometimes to guard against outside foes; although of course
far more often to guard against our own selfish or thoughtless
shortcomings.

If these self-evident truths are kept before us, and only if they are so
kept before us, we shall have a clear idea of what our foreign policy in
its larger aspects should be. It is our duty to remember that a nation
has no more right to do injustice to another nation, strong or weak,
than an individual has to do injustice to another individual; that the
same moral law applies in one case as in the other. But we must also
remember that it is as much the duty of the Nation to guard its own
rights and its own interests as it is the duty of the individual so to
do. Within the Nation the individual has now delegated this right to the
State, that is, to the representative of all the individuals, and it is
a maxim of the law that for every wrong there is a remedy. But in
international law we have not advanced by any means as far as we have
advanced in municipal law. There is as yet no judicial way of enforcing
a right in international law. When one nation wrongs another or wrongs
many others, there is no tribunal before which the wrongdoer can be
brought. Either it is necessary supinely to acquiesce in the wrong, and
thus put a premium upon brutality and aggression, or else it is
necessary for the aggrieved nation valiantly to stand up for its rights.
Until some method is devised by which there shall be a degree of
international control over offending nations, it would be a wicked thing
for the most civilized powers, for those with most sense of
international obligations and with keenest and most generous
appreciation of the difference between right and wrong, to disarm. If
the great civilized nations of the present day should completely disarm,
the result would mean an immediate recrudescence of barbarism in one
form or another. Under any circumstances a sufficient armament would
have to be kept up to serve the purposes of international police; and
until international cohesion and the sense of international duties and
rights are far more advanced than at present, a nation desirous both of
securing respect for itself and of doing good to others must have a
force adequate for the work which it feels is allotted to it as its part
of the general world duty. Therefore it follows that a self-respecting,
just, and far-seeing nation should on the one hand endeavor by every
means to aid in the development of the various movements which tend to
provide substitutes for war, which tend to render nations in their
actions toward one another, and indeed toward their own peoples, more
responsive to the general sentiment of humane and civilized mankind; and
on the other hand that it should keep prepared, while scrupulously
avoiding wrongdoing itself, to repel any wrong, and in exceptional cases
to take action which in a more advanced stage of international relations
would come under the head of the exercise of the international police. A
great free people owes it to itself and to all mankind not to sink into
helplessness before the powers of evil.

We are in every way endeavoring to help on, with cordial good will,
every movement which will tend to bring us into more friendly relations
with the rest of mankind. In pursuance of this policy I shall shortly
lay before the Senate treaties of arbitration with all powers which are
willing to enter into these treaties with us. It is not possible at this
period of the world's development to agree to arbitrate all matters, but
there are many matters of possible difference between us and other
nations which can be thus arbitrated. Furthermore, at the request of the
Interparliamentary Union, an eminent body composed of practical
statesmen from all countries, I have asked the Powers to join with this
Government in a second Hague conference, at which it is hoped that the
work already so happily begun at The Hague may be carried some steps
further toward completion. This carries out the desire expressed by the
first Hague conference itself.

It is not true that the United States feels any land hunger or
entertains any projects as regards the other nations of the Western
Hemisphere save such as are for their welfare. All that this country
desires is to see the neighboring countries stable, orderly, and
prosperous. Any country whose people conduct themselves well can count
upon our hearty friendship. If a nation shows that it knows how to act
with reasonable efficiency and decency in social and political matters,
if it keeps order and pays its obligations, it need fear no interference
from the United States. Chronic wrongdoing, or an impotence which
results in a general loosening of the ties of civilized society, may in
America, as elsewhere, ultimately require intervention by some civilized
nation, and in the Western Hemisphere the adherence of the United States
to the Monroe Doctrine may force the United States, however reluctantly,
in flagrant cases of such wrongdoing or impotence, to the exercise of an
international police power. If every country washed by the Caribbean Sea
would show the progress in stable and just civilization which with the
aid of the Platt amendment Cuba has shown since our troops left the
island, and which so many of the republics in both Americas are
constantly and brilliantly showing, all question of interference by this
Nation with their affairs would be at an end. Our interests and those of
our southern neighbors are in reality identical. They have great natural
riches, and if within their borders the reign of law and justice
obtains, prosperity is sure to come to them. While they thus obey the
primary laws of civilized society they may rest assured that they will
be treated by us in a spirit of cordial and helpful sympathy. We would
interfere with them only in the last resort, and then only if it became
evident that their inability or unwillingness to do justice at home and
abroad had violated the rights of the United States or had invited
foreign aggression to the detriment of the entire body of American
nations. It is a mere truism to say that every nation, whether in
America or anywhere else, which desires to maintain its freedom, its
independence, must ultimately realize that the right of such
independence can not be separated from the responsibility of making good
use of it.

In asserting the Monroe Doctrine, in taking such steps as we have taken
in regard to Cuba, Venezuela, and Panama, and in endeavoring to
circumscribe the theater of war in the Far East, and to secure the open
door in China, we have acted in our own interest as well as in the
interest of humanity at large. There are, however, cases in which, while
our own interests are not greatly involved, strong appeal is made to our
sympathies. Ordinarily it is very much wiser and more useful for us to
concern ourselves with striving for our own moral and material
betterment here at home than to concern ourselves with trying to better
the condition of things in other nations. We have plenty of sins of our
own to war against, and under ordinary circumstances we can do more for
the general uplifting of humanity by striving with heart and soul to put
a stop to civic corruption, to brutal lawlessness and violent race
prejudices here at home than by passing resolutions about wrongdoing
elsewhere. Nevertheless there are occasional crimes committed on so vast
a scale and of such peculiar horror as to make us doubt whether it is
not our manifest duty to endeavor at least to show our disapproval of
the deed and our sympathy with those who have suffered by it. The cases
must be extreme in which such a course is justifiable. There must be no
effort made to remove the mote from our brother's eye if we refuse to
remove the beam from our own. But in extreme cases action may be
justifiable and proper. What form the action shall take must depend upon
the circumstances of the case; that is, upon the degree of the atrocity
and upon our power to remedy it. The cases in which we could interfere
by force of arms as we interfered to put a stop to intolerable
conditions in Cuba are necessarily very few. Yet it is not to be
expected that a people like ours, which in spite of certain very obvious
shortcomings, nevertheless as a whole shows by its consistent practice
its belief in the principles of civil and religious liberty and of
orderly freedom, a people among whom even the worst crime, like the
crime of lynching, is never more than sporadic, so that individuals and
not classes are molested in their fundamental rights--it is inevitable
that such a nation should desire eagerly to give expression to its
horror on an occasion like that of the massacre of the Jews in Kishenef,
or when it witnesses such systematic and long-extended cruelty and
oppression as the cruelty and oppression of which the Armenians have
been the victims, and which have won for them the indignant pity of the
civilized world.

Even where it is not possible to secure in other nations the observance
of the principles which we accept as axiomatic, it is necessary for us
firmly to insist upon the rights of our own citizens without regard to
their creed or race; without regard to whether they were born here or
born abroad. It has proved very difficult to secure from Russia the
right for our Jewish fellow-citizens to receive passports and travel
through Russian territory. Such conduct is not only unjust and
irritating toward us, but it is difficult to see its wisdom from
Russia's standpoint. No conceivable good is accomplished by it. If an
American Jew or an American Christian misbehaves himself in Russia he
can at once be driven out; but the ordinary American Jew, like the
ordinary American Christian, would behave just about as he behaves here,
that is, behave as any good citizen ought to behave; and where this is
the case it is a wrong against which we are entitled to protest to
refuse him his passport without regard to his conduct and character,
merely on racial and religious grounds. In Turkey our difficulties arise
less from the way in which our citizens are sometimes treated than from
the indignation inevitably excited in seeing such fearful misrule as has
been witnessed both in Armenia and Macedonia.

The strong arm of the Government in enforcing respect for its just
rights in international matters is the Navy of the United States. I most
earnestly recommend that there be no halt in the work of upbuilding the
American Navy. There is no more patriotic duty before us a people than
to keep the Navy adequate to the needs of this country's position. We
have undertaken to build the Isthmian Canal. We have undertaken to
secure for ourselves our just share in the trade of the Orient. We have
undertaken to protect our citizens from proper treatment in foreign
lands. We continue steadily to insist on the application of the Monroe
Doctrine to the Western Hemisphere. Unless our attitude in these and all
similar matters is to be a mere boastful sham we can not afford to
abandon our naval programme. Our voice is now potent for peace, and is
so potent because we are not afraid of war. But our protestations upon
behalf of peace would neither receive nor deserve the slightest
attention if we were impotent to make them good.

The war which now unfortunately rages in the far East has emphasized in
striking fashion the new possibilities of naval warfare. The lessons
taught are both strategic and tactical, and are political as well as
military. The experiences of the war have shown in conclusive fashion
that while sea-going and sea-keeping torpedo destroyers are
indispensable, and fast lightly armed and armored cruisers very useful,
yet that the main reliance, the main standby, in any navy worthy the
name must be the great battle ships, heavily armored and heavily gunned.
Not a Russian or Japanese battle ship has been sunk by a torpedo boat,
or by gunfire, while among the less protected ships, cruiser after
cruiser has been destroyed whenever the hostile squadrons have gotten
within range of one another's weapons. There will always be a large
field of usefulness for cruisers, especially of the more formidable
type. We need to increase the number of torpedo-boat destroyers, paying
less heed to their having a knot or two extra speed than to their
capacity to keep the seas for weeks, and, if necessary, for months at a
time. It is wise to build submarine torpedo boats, as under certain
circumstances they might be very useful. But most of all we need to
continue building our fleet of battle ships, or ships so powerfully
armed that they can inflict the maximum of damage upon our opponents,
and so well protected that they can suffer a severe hammering in return
without fatal impairment of their ability to fight and maneuver. Of
course ample means must be provided for enabling the personnel of the
Navy to be brought to the highest point of efficiency. Our great
fighting ships and torpedo boats must be ceaselessly trained and
maneuvered in squadrons. The officers and men can only learn their trade
thoroughly by ceaseless practice on the high seas. In the event of war
it would be far better to have no ships at all than to have ships of a
poor and ineffective type, or ships which, however good, were yet manned
by untrained and unskillful crews. The best officers and men in a poor
ship could do nothing against fairly good opponents; and on the other
hand a modern war ship is useless unless the officers and men aboard her
have become adepts in their duties. The marksmanship in our Navy has
improved in an extraordinary degree during the last three years, and on
the whole the types of our battleships are improving; but much remains
to be done. Sooner or later we shall have to provide for some method by
which there will be promotions for merit as well as for seniority, or
else retirement all those who after a certain age have not advanced
beyond a certain grade; while no effort must be spared to make the
service attractive to the enlisted men in order that they may be kept as
long as possible in it. Reservation public schools should be provided
wherever there are navy-yards.

Within the last three years the United States has set an example in
disarmament where disarmament was proper. By law our Army is fixed at a
maximum of one hundred thousand and a minimum of sixty thousand men.
When there was insurrection in the Philippines we kept the Army at the
maximum. Peace came in the Philippines, and now our Army has been
reduced to the minimum at which it is possible to keep it with due
regard to its efficiency. The guns now mounted require twenty-eight
thousand men, if the coast fortifications are to be adequately manned.
Relatively to the Nation, it is not now so large as the police force of
New York or Chicago relatively to the population of either city. We need
more officers; there are not enough to perform the regular army work. It
is very important that the officers of the Army should be accustomed to
handle their men in masses, as it is also important that the National
Guard of the several States should be accustomed to actual field
maneuvering, especially in connection with the regulars. For this reason
we are to be congratulated upon the success of the field maneuvers at
Manassas last fall, maneuvers in which a larger number of Regulars and
National Guard took part than was ever before assembled together in time
of peace. No other civilized nation has, relatively to its population,
such a diminutive Army as ours; and while the Army is so small we are
not to be excused if we fail to keep it at a very high grade of
proficiency. It must be incessantly practiced; the standard for the
enlisted men should be kept very high, while at the same time the
service should be made as attractive as possible; and the standard for
the officers should be kept even higher--which, as regards the upper
ranks, can best be done by introducing some system of selection and
rejection into the promotions. We should be able, in the event of some
sudden emergency, to put into the field one first-class army corps,
which should be, as a whole, at least the equal of any body of troops of
like number belonging to any other nation.

Great progress has been made in protecting our coasts by adequate
fortifications with sufficient guns. We should, however, pay much more
heed than at present to the development of an extensive system of
floating mines for use in all our more important harbors. These mines
have been proved to be a most formidable safeguard against hostile
fleets.

I earnestly call the attention of the Congress to the need of amending
the existing law relating to the award of Congressional medals of honor
in the Navy so as to provide that they may be awarded to commissioned
officers and warrant officers as well as to enlisted men. These justly
prized medals are given in the Army alike to the officers and the
enlisted men, and it is most unjust that the commissioned officers and
warrant officers of the Navy should not in this respect have the same
rights as their brethren in the Army and as the enlisted men of the
Navy.

In the Philippine Islands there has been during the past year a
continuation of the steady progress which has obtained ever since our
troops definitely got the upper hand of the insurgents. The Philippine
people, or, to speak more accurately, the many tribes, and even races,
sundered from one another more or less sharply, who go to make up the
people of the Philippine Islands, contain many elements of good, and
some elements which we have a right to hope stand for progress. At
present they are utterly incapable of existing in independence at all or
of building up a civilization of their own. I firmly believe that we can
help them to rise higher and higher in the scale of civilization and of
capacity for self-government, and I most earnestly hope that in the end
they will be able to stand, if not entirely alone, yet in some such
relation to the United States as Cuba now stands. This end is not yet in
sight, and it may be indefinitely postponed if our people are foolish
enough to turn the attention of the Filipinos away from the problems of
achieving moral and material prosperity, of working for a stable,
orderly, and just government, and toward foolish and dangerous intrigues
for a complete independence for which they are as yet totally unfit.

On the other hand our people must keep steadily before their minds the
fact that the justification for our stay in the Philippines must
ultimately rest chiefly upon the good we are able to do in the islands.
I do not overlook the fact that in the development of our interests in
the Pacific Ocean and along its coasts, the Philippines have played and
will play an important part; and that our interests have been served in
more than one way by the possession of the islands. But our chief reason
for continuing to hold them must be that we ought in good faith to try
to do our share of the world's work, and this particular piece of work
has been imposed upon us by the results of the war with Spain. The
problem presented to us in the Philippine Islands is akin to, but not
exactly like, the problems presented to the other great civilized powers
which have possessions in the Orient. There are points of resemblance in
our work to the work which is being done by the British in India and
Egypt, by the French in Algiers, by the Dutch in Java, by the Russians
in Turkestan, by the Japanese in Formosa; but more distinctly than any
of these powers we are endeavoring to develop the natives themselves so
that they shall take an ever-increasing share in their own government,
and as far as is prudent we are already admitting their representatives
to a governmental equality with our own. There are commissioners,
judges, and governors in the islands who are Filipinos and who have
exactly the same share in the government of the islands as have their
colleagues who are Americans, while in the lower ranks, of course, the
great majority of the public servants are Filipinos. Within two years we
shall be trying the experiment of an elective lower house in the
Philippine legislature. It may be that the Filipinos will misuse this
legislature, and they certainly will misuse it if they are misled by
foolish persons here at home into starting an agitation for their own
independence or into any factious or improper action. In such case they
will do themselves no good and will stop for the time being all further
effort to advance them and give them a greater share in their own
government. But if they act with wisdom and self-restraint, if they show
that they are capable of electing a legislature which in its turn is
capable of taking a sane and efficient part in the actual work of
government, they can rest assured that a full and increasing measure of
recognition will be given them. Above all they should remember that
their prime needs are moral and industrial, not political. It is a good
thing to try the experiment of giving them a legislature; but it is a
far better thing to give them schools, good roads, railroads which will
enable them to get their products to market, honest courts, an honest
and efficient constabulary, and all that tends to produce order, peace,
fair dealing as between man and man, and habits of intelligent industry
and thrift. If they are safeguarded against oppression, and if their
real wants, material and spiritual, are studied intelligently and in a
spirit of friendly sympathy, much more good will be done them than by
any effort to give them political power, though this effort may in its
own proper time and place be proper enough.

Meanwhile our own people should remember that there is need for the
highest standard of conduct among the Americans sent to the Philippine
Islands, not only among the public servants but among the private
individuals who go to them. It is because I feel this so deeply that in
the administration of these islands I have positively refused to permit
any discrimination whatsoever for political reasons and have insisted
that in choosing the public servants consideration should be paid solely
to the worth of the men chosen and to the needs of the islands. There is
no higher body of men in our public service than we have in the
Philippine Islands under Governor Wright and his associates. So far as
possible these men should be given a free hand, and their suggestions
should receive the hearty backing both of the Executive and of the
Congress. There is need of a vigilant and disinterested support of our
public servants in the Philippines by good citizens here in the United
States. Unfortunately hitherto those of our people here at home who have
specially claimed to be the champions of the Filipinos have in reality
been their worst enemies. This will continue to be the case as long as
they strive to make the Filipinos independent, and stop all industrial
development of the islands by crying out against the laws which would
bring it on the ground that capitalists must not "exploit" the islands.
Such proceedings are not only unwise, but are most harmful to the
Filipinos, who do not need independence at all, but who do need good
laws, good public servants, and the industrial development that can only
come if the investment, of American and foreign capital in the islands
is favored in all legitimate ways.

Every measure taken concerning the islands should be taken primarily
with a view to their advantage. We should certainly give them lower
tariff rates on their exports to the United States; if this is not done
it will be a wrong to extend our shipping laws to them. I earnestly hope
for the immediate enactment into law of the legislation now pending to
encourage American capital to seek investment in the islands in
railroads, in factories, in plantations, and in lumbering and mining.

***

State of the Union Address
Theodore Roosevelt
December 5, 1905

To the Senate and House of Representatives:

The people of this country continue to enjoy great prosperity.
Undoubtedly there will be ebb and flow in such prosperity, and this ebb
and flow will be felt more or less by all members of the community, both
by the deserving and the undeserving. Against the wrath of the Lord the
wisdom of man cannot avail; in time of flood or drought human ingenuity
can but partially repair the disaster. A general failure of crops would
hurt all of us. Again, if the folly of man mars the general well-being,
then those who are innocent of the folly will have to pay part of the
penalty incurred by those who are guilty of the folly. A panic brought
on by the speculative folly of part of the business community would hurt
the whole business community. But such stoppage of welfare, though it
might be severe, would not be lasting. In the long run the one vital
factor in the permanent prosperity of the country is the high individual
character of the average American worker, the average American citizen,
no matter whether his work be mental or manual, whether he be farmer or
wage-worker, business man or professional man.

In our industrial and social system the interests of all men are so
closely intertwined that in the immense majority of cases a
straight-dealing man who by his efficiency, by his ingenuity and
industry, benefits himself must also benefit others. Normally the man of
great productive capacity who becomes rich by guiding the labor of many
other men does so by enabling them to produce more than they could
produce without his guidance; and both he and they share in the benefit,
which comes also to the public at large. The superficial fact that the
sharing may be unequal must never blind us to the underlying fact that
there is this sharing, and that the benefit comes in some degree to each
man concerned. Normally the wage-worker, the man of small means, and the
average consumer, as well as the average producer, are all alike helped
by making conditions such that the man of exceptional business ability
receives an exceptional reward for his ability. Something can be done by
legislation to help the general prosperity; but no such help of a
permanently beneficial character can be given to the less able and less
fortunate, save as the results of a policy which shall inure to the
advantage of all industrious and efficient people who act decently; and
this is only another way of saying that any benefit which comes to the
less able and less fortunate must of necessity come even more to the
more able and more fortunate. If, therefore, the less fortunate man is
moved by envy of his more fortunate brother to strike at the conditions
under which they have both, though unequally, prospered, the result will
assuredly be that while danger may come to the one struck at, it will
visit with an even heavier load the one who strikes the blow. Taken as a
whole we must all go up or down together.

Yet, while not merely admitting, but insisting upon this, it is also
true that where there is no governmental restraint or supervision some
of the exceptional men use their energies not in ways that are for the
common good, but in ways which tell against this common good. The
fortunes amassed through corporate organization are now so large, and
vest such power in those that wield them, as to make it a matter of
necessity to give to the sovereign--that is, to the Government, which
represents the people as a whole--some effective power of supervision
over their corporate use. In order to insure a healthy social and
industrial life, every big corporation should be held responsible by,
and be accountable to, some sovereign strong enough to control its
conduct. I am in no sense hostile to corporations. This is an age of
combination, and any effort to prevent all combination will be not only
useless, but in the end vicious, because of the contempt for law which
the failure to enforce law inevitably produces. We should, moreover,
recognize in cordial and ample fashion the immense good effected by
corporate agencies in a country such as ours, and the wealth of
intellect, energy, and fidelity devoted to their service, and therefore
normally to the service of the public, by their officers and directors.
The corporation has come to stay, just as the trade union has come to
stay. Each can do and has done great good. Each should be favored so
long as it does good. But each should be sharply checked where it acts
against law and justice.

So long as the finances of the Nation are kept upon an honest basis no
other question of internal economy with which the Congress has the power
to deal begins to approach in importance the matter of endeavoring to
secure proper industrial conditions under which the individuals--and
especially the great corporations--doing an interstate business are to
act. The makers of our National Constitution provided especially that
the regulation of interstate commerce should come within the sphere of
the General Government. The arguments in favor of their taking this
stand were even then overwhelming. But they are far stronger today, in
view of the enormous development of great business agencies, usually
corporate in form. Experience has shown conclusively that it is useless
to try to get any adequate regulation and supervision of these great
corporations by State action. Such regulation and supervision can only
be effectively exercised by a sovereign whose jurisdiction is
coextensive with the field of work of the corporations--that is, by the
National Government. I believe that this regulation and supervision can
be obtained by the enactment of law by the Congress. If this proves
impossible, it will certainly be necessary ultimately to confer in
fullest form such power upon the National Government by a proper
amendment of the Constitution. It would obviously be unwise to endeavor
to secure such an amendment until it is certain that the result cannot
be obtained under the Constitution as it now is. The laws of the
Congress and of the several States hitherto, as passed upon by the
courts, have resulted more often in showing that the States have no
power in the matter than that the National Government has power; so that
there at present exists a very unfortunate condition of things, under
which these great corporations doing an interstate business occupy the
position of subjects without a sovereign, neither any State Government
nor the National Government having effective control over them. Our
steady aim should be by legislation, cautiously and carefully
undertaken, but resolutely persevered in, to assert the sovereignty of
the National Government by affirmative action.

This is only in form an innovation. In substance it is merely a
restoration; for from the earliest time such regulation of industrial
activities has been recognized in the action of the lawmaking bodies;
and all that I propose is to meet the changed conditions in such manner
as will prevent the Commonwealth abdicating the power it has always
possessed not only in this country, but also in England before and since
this country became a separate Nation.

It has been a misfortune that the National laws on this subject have
hitherto been of a negative or prohibitive rather than an affirmative
kind, and still more that they have in part sought to prohibit what
could not be effectively prohibited, and have in part in their
prohibitions confounded what should be allowed and what should not be
allowed. It is generally useless to try to prohibit all restraint on
competition, whether this restraint be reasonable or unreasonable; and
where it is not useless it is generally hurtful. Events have shown that
it is not possible adequately to secure the enforcement of any law of
this kind by incessant appeal to the courts. The Department of Justice
has for the last four years devoted more attention to the enforcement of
the anti-trust legislation than to anything else. Much has been
accomplished, particularly marked has been the moral effect of the
prosecutions; but it is increasingly evident that there will be a very
insufficient beneficial result in the way of economic change. The
successful prosecution of one device to evade the law immediately
develops another device to accomplish the same purpose. What is needed
is not sweeping prohibition of every arrangement, good or bad, which may
tend to restrict competition, but such adequate supervision and
regulation as will prevent any restriction of competition from being to
the detriment of the public--as well as such supervision and regulation
as will prevent other abuses in no way connected with restriction of
competition. Of these abuses, perhaps the chief, although by no means
the only one, is overcapitalization--generally itself the result of
dishonest promotion--because of the myriad evils it brings in its train;
for such overcapitalization often means an inflation that invites
business panic; it always conceals the true relation of the profit
earned to the capital actually invested, and it creates a burden of
interest payments which is a fertile cause of improper reduction in or
limitation of wages; it damages the small investor, discourages thrift,
and encourages gambling and speculation; while perhaps worst of all is
the trickiness and dishonesty which it implies--for harm to morals is
worse than any possible harm to material interests, and the debauchery
of politics and business by great dishonest corporations is far worse
than any actual material evil they do the public. Until the National
Government obtains, in some manner which the wisdom of the Congress may
suggest, proper control over the big corporations engaged in interstate
commerce--that is, over the great majority of the big corporations--it
will be impossible to deal adequately with these evils.

I am well aware of the difficulties of the legislation that I am
suggesting, and of the need of temperate and cautious action in securing
it. I should emphatically protest against improperly radical or hasty
action. The first thing to do is to deal with the great corporations
engaged in the business of interstate transportation. As I said in my
message of December 6 last, the immediate and most pressing need, so far
as legislation is concerned, is the enactment into law of some scheme to
secure to the agents of the Government such supervision and regulation
of the rates charged by the railroads of the country engaged in
interstate traffic as shall summarily and effectively prevent the
imposition of unjust or unreasonable rates. It must include putting a
complete stop to rebates in every shape and form. This power to regulate
rates, like all similar powers over the business world, should be
exercised with moderation, caution, and self-restraint; but it should
exist, so that it can be effectively exercised when the need arises.

The first consideration to be kept in mind is that the power should be
affirmative and should be given to some administrative body created by
the Congress. If given to the present Interstate Commerce Commission, or
to a reorganized Interstate Commerce Commission, such commission should
be made unequivocally administrative. I do not believe in the Government
interfering with private business more than is necessary. I do not
believe in the Government undertaking any work which can with propriety
be left in private hands. But neither do I believe in the Government
flinching from overseeing any work when it becomes evident that abuses
are sure to obtain therein unless there is governmental supervision. It
is not my province to indicate the exact terms of the law which should
be enacted; but I call the attention of the Congress to certain existing
conditions with which it is desirable to deal, In my judgment the most
important provision which such law should contain is that conferring
upon some competent administrative body the power to decide, upon the
case being brought before it, whether a given rate prescribed by a
railroad is reasonable and just, and if it is found to be unreasonable
and unjust, then, after full investigation of the complaint, to
prescribe the limit of rate beyond which it shall not be lawful to
go--the maximum reasonable rate, as it is commonly called--this decision
to go into effect within a reasonable time and to obtain from thence
onward, subject to review by the courts. It sometimes happens at present
not that a rate is too high but that a favored shipper is given too low
a rate. In such case the commission would have the right to fix this
already established minimum rate as the maximum; and it would need only
one or two such decisions by the commission to cure railroad companies
of the practice of giving improper minimum rates. I call your attention
to the fact that my proposal is not to give the commission power to
initiate or originate rates generally, but to regulate a rate already
fixed or originated by the roads, upon complaint and after
investigation. A heavy penalty should be exacted from any corporation
which fails to respect an order of the commission. I regard this power
to establish a maximum rate as being essential to any scheme of real
reform in the matter of railway regulation. The first necessity is to
secure it; and unless it is granted to the commission there is little
use in touching the subject at all.

Illegal transactions often occur under the forms of law. It has often
occurred that a shipper has been told by a traffic officer to buy a
large quantity of some commodity and then after it has been bought an
open reduction is made in the rate to take effect immediately, the
arrangement resulting to the profit of one shipper and the one railroad
and to the damage of all their competitors; for it must not be forgotten
that the big shippers are at least as much to blame as any railroad in
the matter of rebates. The law should make it clear so that nobody can
fail to understand that any kind of commission paid on freight
shipments, whether in this form or in the form of fictitious damages, or
of a concession, a free pass, reduced passenger rate, or payment of
brokerage, is illegal. It is worth while considering whether it would
not be wise to confer on the Government the right of civil action
against the beneficiary of a rebate for at least twice the value of the
rebate; this would help stop what is really blackmail. Elevator
allowances should be stopped, for they have now grown to such an extent
that they are demoralizing and are used as rebates.

The best possible regulation of rates would, of course, be that
regulation secured by an honest agreement among the railroads themselves
to carry out the law. Such a general agreement would, for instance, at
once put a stop to the efforts of any one big shipper or big railroad to
discriminate against or secure advantages over some rival; and such
agreement would make the railroads themselves agents for enforcing the
law. The power vested in the Government to put a stop to agreements to
the detriment of the public should, in my judgment, be accompanied by
power to permit, under specified conditions and careful supervision,
agreements clearly in the interest of the public. But, in my judgment,
the necessity for giving this further power is by no means as great as
the necessity for giving the commission or administrative body the other
powers I have enumerated above; and it may well be inadvisable to
attempt to vest this particular power in the commission or other
administrative body until it already possesses and is exercising what I
regard as by far the most important of all the powers I recommend--as
indeed the vitally important power--that to fix a given maximum rate,
which rate, after the lapse of a reasonable time, goes into full effect,
subject to review by the courts.

All private-car lines, industrial roads, refrigerator charges, and the
like should be expressly put under the supervision of the Interstate
Commerce Commission or some similar body so far as rates, and agreements
practically affecting rates, are concerned. The private car owners and
the owners of industrial railroads are entitled to a fair and reasonable
compensation on their investment, but neither private cars nor
industrial railroads nor spur tracks should be utilized as devices for
securing preferential rates. A rebate in icing charges, or in mileage,
or in a division of the rate for refrigerating charges is just as
pernicious as a rebate in any other way. No lower rate should apply on
goods imported than actually obtains on domestic goods from the American
seaboard to destination except in cases where water competition is the
controlling influence. There should be publicity of the accounts of
common carriers; no common carrier engaged in interstate business should
keep any books or memoranda other than those reported pursuant to law or
regulation, and these books or memoranda should be open to the
inspection of the Government. Only in this way can violations or
evasions of the law be surely detected. A system of examination of
railroad accounts should be provided similar to that now conducted into
the National banks by the bank examiners; a few first-class railroad
accountants, if they had proper direction and proper authority to
inspect books and papers, could accomplish much in preventing willful
violations of the law. It would not be necessary for them to examine
into the accounts of any railroad unless for good reasons they were
directed to do so by the Interstate Commerce Commission. It is greatly
to be desired that some way might be found by which an agreement as to
transportation within a State intended to operate as a fraud upon the
Federal interstate commerce laws could be brought under the jurisdiction
of the Federal authorities. At present it occurs that large shipments of
interstate traffic are controlled by concessions on purely State
business, which of course amounts to an evasion of the law. The
commission should have power to enforce fair treatment by the great
trunk lines of lateral and branch lines.

I urge upon the Congress the need of providing for expeditious action by
the Interstate Commerce Commission in all these matters, whether in
regulating rates for transportation or for storing or for handling
property or commodities in transit. The history of the cases litigated
under the present commerce act shows that its efficacy has been to a
great degree destroyed by the weapon of delay, almost the most
formidable weapon in the hands of those whose purpose it is to violate
the law.

Let me most earnestly say that these recommendations are not made in any
spirit of hostility to the railroads. On ethical grounds, on grounds of
right, such hostility would be intolerable; and on grounds of mere
National self-interest we must remember that such hostility would tell
against the welfare not merely of some few rich men, but of a multitude
of small investors, a multitude of railway employes, wage workers, and
most severely against the interest of the public as a whole. I believe
that on the whole our railroads have done well and not ill; but the
railroad men who wish to do well should not be exposed to competition
with those who have no such desire, and the only way to secure this end
is to give to some Government tribunal the power to see that justice is
done by the unwilling exactly as it is gladly done by the willing.
Moreover, if some Government body is given increased power the effect
will be to furnish authoritative answer on behalf of the railroad
whenever irrational clamor against it is raised, or whenever charges
made against it are disproved. I ask this legislation not only in the
interest of the public but in the interest of the honest railroad man
and the honest shipper alike, for it is they who are chiefly jeoparded
by the practices of their dishonest competitors. This legislation should
be enacted in a spirit as remote as possible from hysteria and rancor.
If we of the American body politic are true to the traditions we have
inherited we shall always scorn any effort to make us hate any man
because he is rich, just as much as we should scorn any effort to make
us look down upon or treat contemptuously any man because he is poor. We
judge a man by his conduct--that is, by his character--and not by his
wealth or intellect. If he makes his fortune honestly, there is no just
cause of quarrel with him. Indeed, we have nothing but the kindliest
feelings of admiration for the successful business man who behaves
decently, whether he has made his success by building or managing a
railroad or by shipping goods over that railroad. The big railroad men
and big shippers are simply Americans of the ordinary type who have
developed to an extraordinary degree certain great business qualities.
They are neither better nor worse than their fellow-citizens of smaller
means. They are merely more able in certain lines and therefore exposed
to certain peculiarly strong temptations. These temptations have not
sprung newly into being; the exceptionally successful among mankind have
always been exposed to them; but they have grown amazingly in power as a
result of the extraordinary development of industrialism along new
lines, and under these new conditions, which the law-makers of old could
not foresee and therefore could not provide against, they have become so
serious and menacing as to demand entirely new remedies. It is in the
interest of the best type of railroad man and the best type of shipper
no less than of the public that there should be Governmental supervision
and regulation of these great business operations, for the same reason
that it is in the interest of the corporation which wishes to treat its
employes aright that there should be an effective Employers' Liability
act, or an effective system of factory laws to prevent the abuse of
women and children. All such legislation frees the corporation that
wishes to do well from being driven into doing ill, in order to compete
with its rival, which prefers to do ill. We desire to set up a moral
standard. There can be no delusion more fatal to the Nation than the
delusion that the standard of profits, of business prosperity, is
sufficient in judging any business or political question--from rate
legislation to municipal government. Business success, whether for the
individual or for the Nation, is a good thing only so far as it is
accompanied by and develops a high standard of conduct--honor,
integrity, civic courage. The kind of business prosperity that blunts
the standard of honor, that puts an inordinate value on mere wealth,
that makes a man ruthless and conscienceless in trade, and weak and
cowardly in citizenship, is not a good thing at all, but a very bad
thing for the Nation. This Government stands for manhood first and for
business only as an adjunct of manhood.

The question of transportation lies at the root of all industrial
success, and the revolution in transportation which has taken place
during the last half century has been the most important factor in the
growth of the new industrial conditions. Most emphatically we do not
wish to see the man of great talents refused the reward for his talents.
Still less do we wish to see him penalized but we do desire to see the
system of railroad transportation so handled that the strong man shall
be given no advantage over the weak man. We wish to insure as fair
treatment for the small town as for the big city; for the small shipper
as for the big shipper. In the old days the highway of commerce, whether
by water or by a road on land, was open to all; it belonged to the
public and the traffic along it was free. At present the railway is this
highway, and we must do our best to see that it is kept open to all on
equal terms. Unlike the old highway it is a very difficult and complex
thing to manage, and it is far better that it should be managed by
private individuals than by the Government. But it can only be so
managed on condition that justice is done the public. It is because, in
my judgment, public ownership of railroads is highly undesirable and
would probably in this country entail far-reaching disaster, but I wish
to see such supervision and regulation of them in the interest of the
public as will make it evident that there is no need for public
ownership. The opponents of Government regulation dwell upon the
difficulties to be encountered and the intricate and involved nature of
the problem. Their contention is true. It is a complicated and delicate
problem, and all kinds of difficulties are sure to arise in connection
with any plan of solution, while no plan will bring all the benefits
hoped for by its more optimistic adherents. Moreover, under any healthy
plan, the benefits will develop gradually and not rapidly. Finally, we
must clearly understand that the public servants who are to do this
peculiarly responsible and delicate work must themselves be of the
highest type both as regards integrity and efficiency. They must be well
paid, for otherwise able men cannot in the long run be secured; and they
must possess a lofty probity which will revolt as quickly at the thought
of pandering to any gust of popular prejudice against rich men as at the
thought of anything even remotely resembling subserviency to rich men.
But while I fully admit the difficulties in the way, I do not for a
moment admit that these difficulties warrant us in stopping in our
effort to secure a wise and just system. They should have no other
effect than to spur us on to the exercise of the resolution, the
even-handed justice, and the fertility of resource, which we like to
think of as typically American, and which will in the end achieve good
results in this as in other fields of activity. The task is a great one
and underlies the task of dealing with the whole industrial problem. But
the fact that it is a great problem does not warrant us in shrinking
from the attempt to solve it. At present we face such utter lack of
supervision, such freedom from the restraints of law, that excellent men
have often been literally forced into doing what they deplored because
otherwise they were left at the mercy of unscrupulous competitors. To
rail at and assail the men who have done as they best could under such
conditions accomplishes little. What we need to do is to develop an
orderly system, and such a system can only come through the gradually
increased exercise of the right of efficient Government control.

In my annual message to the Fifty-eighth Congress, at its third session,
I called attention to the necessity for legislation requiring the use of
block signals upon railroads engaged in interstate commerce. The number
of serious collisions upon unblocked roads that have occurred within the
past year adds force to the recommendation then made. The Congress
should provide, by appropriate legislation, for the introduction of
block signals upon all railroads engaged in interstate commerce at the
earliest practicable date, as a measure of increased safety to the
traveling public.

Through decisions of the Supreme Court of the United States and the
lower Federal courts in cases brought before them for adjudication the
safety appliance law has been materially strengthened, and the
Government has been enabled to secure its effective enforcement in
almost all cases, with the result that the condition of railroad
equipment throughout the country is much improved and railroad employes
perform their duties under safer conditions than heretofore. The
Government's most effective aid in arriving at this result has been its
inspection service, and that these improved conditions are not more
general is due to the insufficient number of inspectors employed. The
inspection service has fully demonstrated its usefulness, and in
appropriating for its maintenance the Congress should make provision for
an increase in the number of inspectors.

The excessive hours of labor to which railroad employes in train service
are in many cases subjected is also a matter which may well engage the
serious attention of the Congress. The strain, both mental and physical,
upon those who are engaged in the movement and operation of railroad
trains under modern conditions is perhaps greater than that which exists
in any other industry, and if there are any reasons for limiting by law
the hours of labor in any employment, they certainly apply with peculiar
force to the employment of those upon whose vigilance and alertness in
the performance of their duties the safety of all who travel by rail
depends.

In my annual message to the Fifty-seventh Congress, at its second
session, I recommended the passage of an employers' liability law for
the District of Columbia and in our navy yards. I renewed that
recommendation in my message to the Fifty-eighth Congress, at its second
session, and further suggested the appointment of a commission to make a
comprehensive study of employers' liability, with a view to the
enactment of a wise and Constitutional law covering the subject,
applicable to all industries within the scope of the Federal power. I
hope that such a law will be prepared and enacted as speedily as
possible.

The National Government has, as a rule, but little occasion to deal with
the formidable group of problems connected more or less directly with
what is known as the labor question, for in the great majority of cases
these problems must be dealt with by the State and municipal
authorities, and not by the National Government. The National Government
has control of the District of Columbia, however, and it should see to
it that the City of Washington is made a model city in all respects,
both as regards parks, public playgrounds, proper regulation of the
system of housing, so as to do away with the evils of alley tenements, a
proper system of education, a proper system of dealing with truancy and
juvenile offenders, a proper handling of the charitable work of the
District. Moreover, there should be proper factory laws to prevent all
abuses in the employment of women and children in the District. These
will be useful chiefly as object lessons, but even this limited amount
of usefulness would be of real National value.

There has been demand for depriving courts of the power to issue
injunctions in labor disputes. Such special limitation of the equity
powers of our courts would be most unwise. It is true that some judges
have misused this power; but this does not justify a denial of the power
any more than an improper exercise of the power to call a strike by a
labor leader would justify the denial of the right to strike. The remedy
is to regulate the procedure by requiring the judge to give due notice
to the adverse parties before granting the writ, the hearing to be ex
parte if the adverse party does not appear at the time and place
ordered. What is due notice must depend upon the facts of the case; it
should not be used as a pretext to permit violation of law or the
jeopardizing of life or property. Of course, this would not authorize
the issuing of a restraining order or injunction in any case in which it
is not already authorized by existing law.

I renew the recommendation I made in my last annual message for an
investigation by the Department of Commerce and Labor of general labor
conditions, especial attention to be paid to the conditions of child
labor and child-labor legislation in the several States. Such an
investigation should take into account the various problems with which
the question of child labor is connected. It is true that these problems
can be actually met in most cases only by the States themselves, but it
would be well for the Nation to endeavor to secure and publish
comprehensive information as to the conditions of the labor of children
in the different States, so as to spur up those that are behindhand and
to secure approximately uniform legislation of a high character among
the several States. In such a Republic as ours the one thing that we
cannot afford to neglect is the problem of turning out decent citizens.
The future of the Nation depends upon the citizenship of the generations
to come; the children of today are those who tomorrow will shape the
destiny of our land, and we cannot afford to neglect them. The
Legislature of Colorado has recommended that the National Government
provide some general measure for the protection from abuse of children
and dumb animals throughout the United States. I lay the matter before
you for what I trust will be your favorable consideration.

The Department of Commerce and Labor should also make a thorough
investigation of the conditions of women in industry. Over five million
American women are now engaged in gainful occupations; yet there is an
almost complete dearth of data upon which to base any trustworthy
conclusions as regards a subject as important as it is vast and
complicated. There is need of full knowledge on which to base action
looking toward State and municipal legislation for the protection of
working women. The introduction of women into industry is working change
and disturbance in the domestic and social life of the Nation. The
decrease in marriage, and especially in the birth rate, has been
coincident with it. We must face accomplished facts, and the adjustment
of factory conditions must be made, but surely it can be made with less
friction and less harmful effects on family life than is now the case.
This whole matter in reality forms one of the greatest sociological
phenomena of our time; it is a social question of the first importance,
of far greater importance than any merely political or economic question
can be, and to solve it we need ample data, gathered in a sane and
scientific spirit in the course of an exhaustive investigation.

In any great labor disturbance not only are employer and employe
interested, but a third party--the general public. Every considerable
labor difficulty in which interstate commerce is involved should be
investigated by the Government and the facts officially reported to the
public.

The question of securing a healthy, self-respecting, and mutually
sympathetic attitude as between employer and employe, capitalist and
wage-worker, is a difficult one. All phases of the labor problem prove
difficult when approached. But the underlying principles, the root
principles, in accordance with which the problem must be solved are
entirely simple. We can get justice and right dealing only if we put as
of paramount importance the principle of treating a man on his worth as
a man rather than with reference to his social position, his occupation
or the class to which he belongs. There are selfish and brutal men in
all ranks of life. If they are capitalists their selfishness and
brutality may take the form of hard indifference to suffering, greedy
disregard of every moral restraint which interferes with the
accumulation of wealth, and cold-blooded exploitation of the weak; or,
if they are laborers, the form of laziness, of sullen envy of the more
fortunate, and of willingness to perform deeds of murderous violence.
Such conduct is just as reprehensible in one case as in the other, and
all honest and farseeing men should join in warring against it wherever
it becomes manifest. Individual capitalist and individual wage-worker,
corporation and union, are alike entitled to the protection of the law,
and must alike obey the law. Moreover, in addition to mere obedience to
the law, each man, if he be really a good citizen, must show broad
sympathy for his neighbor and genuine desire to look at any question
arising between them from the standpoint of that neighbor no less than
from his own, and to this end it is essential that capitalist and
wage-worker should consult freely one with the other, should each strive
to bring closer the day when both shall realize that they are properly
partners and not enemies. To approach the questions which inevitably
arise between them solely from the standpoint which treats each side in
the mass as the enemy of the other side in the mass is both wicked and
foolish. In the past the most direful among the influences which have
brought about the downfall of republics has ever been the growth of the
class spirit, the growth of the spirit which tends to make a man
subordinate the welfare of the public as a whole to the welfare of the
particular class to which he belongs, the substitution of loyalty to a
class for loyalty to the Nation. This inevitably brings about a tendency
to treat each man not on his merits as an individual, but on his
position as belonging to a certain class in the community. If such a
spirit grows up in this Republic it will ultimately prove fatal to us,
as in the past it has proved fatal to every community in which it has
become dominant. Unless we continue to keep a quick and lively sense of
the great fundamental truth that our concern is with the individual
worth of the individual man, this Government cannot permanently hold the
place which it has achieved among the nations. The vital lines of
cleavage among our people do not correspond, and indeed run at right
angles to, the lines of cleavage which divide occupation from
occupation, which divide wage-workers from capitalists, farmers from
bankers, men of small means from men of large means, men who live in the
towns from men who live in the country; for the vital line of cleavage
is the line which divides the honest man who tries to do well by his
neighbor from the dishonest man who does ill by his neighbor. In other
words, the standard we should establish is the standard of conduct, not
the standard of occupation, of means, or of social position. It is the
man's moral quality, his attitude toward the great questions which
concern all humanity, his cleanliness of life, his power to do his duty
toward himself and toward others, which really count; and if we
substitute for the standard of personal judgment which treats each man
according to his merits, another standard in accordance with which all
men of one class are favored and all men of another class discriminated
against, we shall do irreparable damage to the body politic. I believe
that our people are too sane, too self-respecting, too fit for
self-government, ever to adopt such an attitude. This Government is not
and never shall be government by a plutocracy. This Government is not
and never shall be government by a mob. It shall continue to be in the
future what it has been in the past, a Government based on the theory
that each man, rich or poor, is to be treated simply and solely on his
worth as a man, that all his personal and property rights are to be
safeguarded, and that he is neither to wrong others nor to suffer wrong
from others.

The noblest of all forms of government is self-government; but it is
also the most difficult. We who possess this priceless boon, and who
desire to hand it on to our children and our children's children, should
ever bear in mind the thought so finely expressed by Burke: "Men are
qualified for civil liberty in exact proportion to their disposition to
put moral chains upon their own appetites; in proportion as they are
disposed to listen to the counsels of the wise and good in preference to
the flattery of knaves. Society cannot exist unless a controlling power
upon will and appetite be placed somewhere, and the less of it there be
within the more there must be without. It is ordained in the eternal
constitution of things that men of intemperate minds cannot be free.
Their passions forge their fetters."

The great insurance companies afford striking examples of corporations
whose business has extended so far beyond the jurisdiction of the States
which created them as to preclude strict enforcement of supervision and
regulation by the parent States. In my last annual message I recommended
"that the Congress carefully consider whether the power of the Bureau of
Corporations cannot constitutionally be extended to cover interstate
transactions in insurance."

Recent events have emphasized the importance of an early and exhaustive
consideration of this question, to see whether it is not possible to
furnish better safeguards than the several States have been able to
furnish against corruption of the flagrant kind which has been exposed.
It has been only too clearly shown that certain of the men at the head
of these large corporations take but small note of the ethical
distinction between honesty and dishonesty; they draw the line only this
side of what may be called law-honesty, the kind of honesty necessary in
order to avoid falling into the clutches of the law. Of course the only
complete remedy for this condition must be found in an aroused public
conscience, a higher sense of ethical conduct in the community at large,
and especially among business men and in the great profession of the
law, and in the growth of a spirit which condemns all dishonesty,
whether in rich man or in poor man, whether it takes the shape of
bribery or of blackmail. But much can be done by legislation which is
not only drastic but practical. There is need of a far stricter and more
uniform regulation of the vast insurance interests of this country. The
United States should in this respect follow the policy of other nations
by providing adequate national supervision of commercial interests which
are clearly national in character. My predecessors have repeatedly
recognized that the foreign business of these companies is an important
part of our foreign commercial relations. During the administrations of
Presidents Cleveland, Harrison, and McKinley the State Department
exercised its influence, through diplomatic channels, to prevent unjust
discrimination by foreign countries against American insurance
companies. These negotiations illustrated the propriety of the Congress
recognizing the National character of insurance, for in the absence of
Federal legislation the State Department could only give expression to
the wishes of the authorities of the several States, whose policy was
ineffective through want of uniformity.

I repeat my previous recommendation that the Congress should also
consider whether the Federal Government has any power or owes any duty
with respect to domestic transactions in insurance of an interstate
character. That State supervision has proved inadequate is generally
conceded. The burden upon insurance companies, and therefore their
policy holders, of conflicting regulations of many States, is
unquestioned, while but little effective check is imposed upon any able
and unscrupulous man who desires to exploit the company in his own
interest at the expense of the policy holders and of the public. The
inability of a State to regulate effectively insurance corporations
created under the laws of other States and transacting the larger part
of their business elsewhere is also clear. As a remedy for this evil of
conflicting, ineffective, and yet burdensome regulations there has been
for many years a widespread demand for Federal supervision. The Congress
has already recognized that interstate insurance may be a proper subject
for Federal legislation, for in creating the Bureau of Corporations it
authorized it to publish and supply useful information concerning
interstate corporations, "including corporations engaged in insurance."
It is obvious that if the compilation of statistics be the limit of the
Federal power it is wholly ineffective to regulate this form of
commercial intercourse between the States, and as the insurance business
has outgrown in magnitude the possibility of adequate State supervision,
the Congress should carefully consider whether further legislation can
be bad. What is said above applies with equal force to fraternal and
benevolent organizations which contract for life insurance.

There is more need of stability than of the attempt to attain an ideal
perfection in the methods of raising revenue; and the shock and strain
to the business world certain to attend any serious change in these
methods render such change inadvisable unless for grave reason. It is
not possible to lay down any general rule by which to determine the
moment when the reasons for will outweigh the reasons against such a
change. Much must depend, not merely on the needs, but on the desires,
of the people as a whole; for needs and desires are not necessarily
identical. Of course, no change can be made on lines beneficial to, or
desired by, one section or one State only. There must be something like
a general agreement among the citizens of the several States, as
represented in the Congress, that the change is needed and desired in
the interest of the people, as a whole; and there should then be a
sincere, intelligent, and disinterested effort to make it in such shape
as will combine, so far as possible, the maximum of good to the people
at large with the minimum of necessary disregard for the special
interests of localities or classes. But in time of peace the revenue
must on the average, taking a series of years together, equal the
expenditures or else the revenues must be increased. Last year there was
a deficit. Unless our expenditures can be kept within the revenues then
our revenue laws must be readjusted. It is as yet too early to attempt
to outline what shape such a readjustment should take, for it is as yet
too early to say whether there will be need for it. It should be
considered whether it is not desirable that the tariff laws should
provide for applying as against or in favor of any other nation maximum
and minimum tariff rates established by the Congress, so as to secure a
certain reciprocity of treatment between other nations and ourselves.
Having in view even larger considerations of policy than those of a
purely economic nature, it would, in my judgment, be well to endeavor to
bring about closer commercial connections with the other peoples of this
continent. I am happy to be able to announce to you that Russia now
treats us on the most-favored-nation basis.

I earnestly recommend to Congress the need of economy and to this end of
a rigid scrutiny of appropriations. As examples merely, I call your
attention to one or two specific matters. All unnecessary offices should
be abolished. The Commissioner of the General Land Office recommends the
abolishment of the office of Receiver of Public Moneys for the United
States Land Office. This will effect a saving of about a quarter of a
million dollars a year. As the business of the Nation grows, it is
inevitable that there should be from time to time a legitimate increase
in the number of officials, and this fact renders it all the more
important that when offices become unnecessary they should be abolished.
In the public printing also a large saving of public money can be made.
There is a constantly growing tendency to publish masses of unimportant
information. It is probably not unfair to say that many tens of
thousands of volumes are published at which no human being ever looks
and for which there is no real demand whatever.

Yet, in speaking of economy, I must in no wise be understood as
advocating the false economy which is in the end the worst extravagance.
To cut down on the navy, for instance, would be a crime against the
Nation. To fail to push forward all work on the Panama Canal would be as
great a folly.

In my message of December 2, 1902, to the Congress I said:

"Interest rates are a potent factor in business activity, and in order
that these rates may be equalized to meet the varying needs of the
seasons and of widely separated communities, and to prevent the
recurrence of financial stringencies, which injuriously affect
legitimate business, it is necessary that there should be an element of
elasticity in our monetary system. Banks are the natural servants of
commerce, and, upon them should be placed, as far as practicable, the
burden of furnishing and maintaining a circulation adequate to supply
the needs of our diversified industries and of our domestic and foreign
commerce; and the issue of this should be so regulated that a sufficient
supply should be always available for the business interests of the
country."

Every consideration of prudence demands the addition of the element of
elasticity to our currency system. The evil does not consist in an
inadequate volume of money, but in the rigidity of this volume, which
does not respond as it should to the varying needs of communities and of
seasons. Inflation must be avoided; but some provision should be made
that will insure a larger volume of money during the Fall and Winter
months than in the less active seasons of the year; so that the currency
will contract against speculation, and will expand for the needs of
legitimate business. At present the Treasury Department is at
irregularly recurring intervals obliged, in the interest of the business
world--that is, in the interests of the American public--to try to avert
financial crises by providing a remedy which should be provided by
Congressional action.

At various times I have instituted investigations into the organization
and conduct of the business of the executive departments. While none of
these inquiries have yet progressed far enough to warrant final
conclusions, they have already confirmed and emphasized the general
impression that the organization of the departments is often faulty in
principle and wasteful in results, while many of their business methods
are antiquated and inefficient. There is every reason why our executive
governmental machinery should be at least as well planned, economical,
and efficient as the best machinery of the great business organizations,
which at present is not the case. To make it so is a task of complex
detail and essentially executive in its nature; probably no legislative
body, no matter how wise and able, could undertake it with reasonable
prospect of success. I recommend that the Congress consider this subject
with a view to provide by legislation for the transfer, distribution,
consolidation, and assignment of duties and executive organizations or
parts of organizations, and for the changes in business methods, within
or between the several departments, that will best promote the economy,
efficiency, and high character of the Government work.

In my last annual message I said:

"The power of the Government to protect the integrity of the elections
of its own officials is inherent and has been recognized and affirmed by
repeated declarations of the Supreme Court. There is no enemy of free
government more dangerous and none so insidious as the corruption of the
electorate. No one defends or excuses corruption, and it would seem to
follow that none would oppose vigorous measures to eradicate it. I
recommend the enactment of a law directed against bribery and corruption
in Federal elections. The details of such a law may be safely left to
the wise discretion of the Congress, but it should go as far as under
the Constitution it is possible to go, and should include severe
penalties against him who gives or receives a bribe intended to
influence his act or opinion as an elector; and provisions for the
publication not only of the expenditures for nominations and elections
of all candidates, but also of all contributions received and
expenditures made by political committees."

I desire to repeat this recommendation. In political campaigns in a
country as large and populous as ours it is inevitable that there should
be much expense of an entirely legitimate kind. This, of course, means
that many contributions, and some of them of large size, must be made,
and, as a matter of fact, in any big political contest such
contributions are always made to both sides. It is entirely proper both
to give and receive them, unless there is an improper motive connected
with either gift or reception. If they are extorted by any kind of
pressure or promise, express or implied, direct or indirect, in the way
of favor or immunity, then the giving or receiving becomes not only
improper but criminal. It will undoubtedly be difficult, as a matter of
practical detail, to shape an act which shall guard with reasonable
certainty against such misconduct; but if it is possible to secure by
law the full and verified publication in detail of all the sums
contributed to and expended by the candidates or committees of any
political parties, the result cannot but be wholesome. All contributions
by corporations to any political committee or for any political purpose
should be forbidden by law; directors should not be permitted to use
stockholders' money for such purposes; and, moreover, a prohibition of
this kind would be, as far as it went, an effective method of stopping
the evils aimed at in corrupt practices acts. Not only should both the
National and the several State Legislatures forbid any officer of a
corporation from using the money of the corporation in or about any
election, but they should also forbid such use of money in connection
with any legislation save by the employment of counsel in public manner
for distinctly legal services.

The first conference of nations held at The Hague in 1899, being unable
to dispose of all the business before it, recommended the consideration
and settlement of a number of important questions by another conference
to be called subsequently and at an early date. These questions were the
following: (1) The rights and duties of neutrals; (2) the limitation of
the armed forces on land and sea, and of military budgets; (3) the use
of new types and calibres of military and naval guns; (4) the
inviolability of private property at sea in times of war; (5) the
bombardment of ports, cities, and villages by naval forces. In October,
1904, at the instance of the Interparliamentary Union, which, at a
conference held in the United States, and attended by the lawmakers of
fifteen different nations, had reiterated the demand for a second
conference of nations, I issued invitations to all the powers signatory
to The Hague Convention to send delegates to such a conference, and
suggested that it be again held at The Hague. In its note of December
16, 1904, the United States Government communicated to the
representatives of foreign governments its belief that the conference
could be best arranged under the provisions of the present Hague treaty.

From all the powers acceptance was received, coupled in some cases with
the condition that we should wait until the end of the war then waging
between Russia and Japan. The Emperor of Russia, immediately after the
treaty of peace which so happily terminated this war, in a note
presented to the President on September 13, through Ambassador Rosen,
took the initiative in recommending that the conference be now called.
The United States Government in response expressed its cordial
acquiescence, and stated that it would, as a matter of course, take part
in the new conference and endeavor to further its aims. We assume that
all civilized governments will support the movement, and that the
conference is now an assured fact. This Government will do everything in
its power to secure the success of the conference, to the end that
substantial progress may be made in the cause of international peace,
justice, and good will.

This renders it proper at this time to say something as to the general
attitude of this Government toward peace. More and more war is coming to
be looked upon as in itself a lamentable and evil thing. A wanton or
useless war, or a war of mere aggression--in short, any war begun or
carried on in a conscienceless spirit, is to be condemned as a
peculiarly atrocious crime against all humanity. We can, however, do
nothing of permanent value for peace unless we keep ever clearly in mind
the ethical element which lies at the root of the problem. Our aim is
righteousness. Peace is normally the hand-maiden of rightousness; but
when peace and righteousness conflict then a great and upright people
can never for a moment hesitate to follow the path which leads toward
righteousness, even though that path also leads to war. There are
persons who advocate peace at any price; there are others who, following
a false analogy, think that because it is no longer necessary in
civilized countries for individuals to protect their rights with a
strong hand, it is therefore unnecessary for nations to be ready to
defend their rights. These persons would do irreparable harm to any
nation that adopted their principles, and even as it is they seriously
hamper the cause which they advocate by tending to render it absurd in
the eyes of sensible and patriotic men. There can be no worse foe of
mankind in general, and of his own country in particular, than the
demagogue of war, the man who in mere folly or to serve his own selfish
ends continually rails at and abuses other nations, who seeks to excite
his countrymen against foreigners on insufficient pretexts, who excites
and inflames a perverse and aggressive national vanity, and who may on
occasions wantonly bring on conflict between his nation and some other
nation. But there are demagogues of peace just as there are demagogues
of war, and in any such movement as this for The Hague conference it is
essential not to be misled by one set of extremists any more than by the
other. Whenever it is possible for a nation or an individual to work for
real peace, assuredly it is failure of duty not so to strive, but if war
is necessary and righteous then either the man or the nation shrinking
from it forfeits all title to self-respect. We have scant sympathy with
the sentimentalist who dreads oppression less than physical suffering,
who would prefer a shameful peace to the pain and toil sometimes
lamentably necessary in order to secure a righteous peace. As yet there
is only a partial and imperfect analogy between international law and
internal or municipal law, because there is no sanction of force for
executing the former while there is in the case of the latter. The
private citizen is protected in his rights by the law, because the law
rests in the last resort upon force exercised through the forms of law.
A man does not have to defend his rights with his own hand, because he
can call upon the police, upon the sheriff's posse, upon the militia, or
in certain extreme cases upon the army, to defend him. But there is no
such sanction of force for international law. At present there could be
no greater calamity than for the free peoples, the enlightened,
independent, and peace-loving peoples, to disarm while yet leaving it
open to any barbarism or despotism to remain armed. So long as the world
is as unorganized as now the armies and navies of those peoples who on
the whole stand for justice, offer not only the best, but the only
possible, security for a just peace. For instance, if the United States
alone, or in company only with the other nations that on the whole tend
to act justly, disarmed, we might sometimes avoid bloodshed, but we
would cease to be of weight in securing the peace of justice--the real
peace for which the most law-abiding and high-minded men must at times
be willing to fight. As the world is now, only that nation is equipped
for peace that knows how to fight, and that will not shrink from
fighting if ever the conditions become such that war is demanded in the
name of the highest morality.

So much it is emphatically necessary to say in order both that the
position of the United States may not be misunderstood, and that a
genuine effort to bring nearer the day of the peace of justice among the
nations may not be hampered by a folly which, in striving to achieve the
impossible, would render it hopeless to attempt the achievement of the
practical. But, while recognizing most clearly all above set forth, it
remains our clear duty to strive in every practicable way to bring
nearer the time when the sword shall not be the arbiter among nations.
At present the practical thing to do is to try to minimize the number of
cases in which it must be the arbiter, and to offer, at least to all
civilized powers, some substitute for war which will be available in at
least a considerable number of instances. Very much can be done through
another Hague conference in this direction, and I most earnestly urge
that this Nation do all in its power to try to further the movement and
to make the result of the decisions of The Hague conference effective. I
earnestly hope that the conference may be able to devise some way to
make arbitration between nations the customary way of settling
international disputes in all save a few classes of cases, which should
themselves be as sharply defined and rigidly limited as the present
governmental and social development of the world will permit. If
possible, there should be a general arbitration treaty negotiated among
all the nations represented at the conference. Neutral rights and
property should be protected at sea as they are protected on land. There
should be an international agreement to this purpose and a similar
agreement defining contraband of war.

During the last century there has been a distinct diminution in the
number of wars between the most civilized nations. International
relations have become closer and the development of The Hague tribunal
is not only a symptom of this growing closeness of relationship, but is
a means by which the growth can be furthered. Our aim should be from
time to time to take such steps as may be possible toward creating
something like an organization of the civilized nations, because as the
world becomes more highly organized the need for navies and armies will
diminish. It is not possible to secure anything like an immediate
disarmament, because it would first be necessary to settle what peoples
are on the whole a menace to the rest of mankind, and to provide against
the disarmament of the rest being turned into a movement which would
really chiefly benefit these obnoxious peoples; but it may be possible
to exercise some check upon the tendency to swell indefinitely the
budgets for military expenditure. Of course such an effort could succeed
only if it did not attempt to do too much; and if it were undertaken in
a spirit of sanity as far removed as possible from a merely hysterical
pseudo-philanthropy. It is worth while pointing out that since the end
of the insurrection in the Philippines this Nation has shown its
practical faith in the policy of disarmament by reducing its little army
one-third. But disarmament can never be of prime importance; there is
more need to get rid of the causes of war than of the implements of war.

I have dwelt much on the dangers to be avoided by steering clear of any
mere foolish sentimentality because my wish for peace is so genuine and
earnest; because I have a real and great desire that this second Hague
conference may mark a long stride forward in the direction of securing
the peace of justice throughout the world. No object is better worthy
the attention of enlightened statesmanship than the establishment of a
surer method than now exists of securing justice as between nations,
both for the protection of the little nations and for the prevention of
war between the big nations. To this aim we should endeavor not only to
avert bloodshed, but, above all, effectively to strengthen the forces of
right. The Golden Rule should be, and as the world grows in morality it
will be, the guiding rule of conduct among nations as among individuals;
though the Golden Rule must not be construed, in fantastic manner, as
forbidding the exercise of the police power. This mighty and free
Republic should ever deal with all other States, great or small, on a
basis of high honor, respecting their rights as jealously as it
safeguards its own.

One of the most effective instruments for peace is the Monroe Doctrine
as it has been and is being gradually developed by this Nation and
accepted by other nations. No other policy could have been as efficient
in promoting peace in the Western Hemisphere and in giving to each
nation thereon the chance to develop along its own lines. If we had
refused to apply the doctrine to changing conditions it would now be
completely outworn, would not meet any of the needs of the present day,
and, indeed, would probably by this time have sunk into complete
oblivion. It is useful at home, and is meeting with recognition abroad
because we have adapted our application of it to meet the growing and
changing needs of the hemisphere. When we announce a policy such as the
Monroe Doctrine we thereby commit ourselves to the consequences of the
policy, and those consequences from time to time alter. It is out of the
question to claim a right and yet shirk the responsibility for its
exercise. Not only we, but all American republics who are benefited by
the existence of the doctrine, must recognize the obligations each
nation is under as regards foreign peoples no less than its duty to
insist upon its own rights.

That our rights and interests are deeply concerned in the maintenance of
the doctrine is so clear as hardly to need argument. This is especially
true in view of the construction of the Panama Canal. As a mere matter
of self-defense we must exercise a close watch over the approaches to
this canal; and this means that we must be thoroughly alive to our
interests in the Caribbean Sea.

There are certain essential points which must never be forgotten as
regards the Monroe Doctrine. In the first place we must as a Nation make
it evident that we do not intend to treat it in any shape or way as an
excuse for aggrandizement on our part at the expense of the republics to
the south. We must recognize the fact that in some South American
countries there has been much suspicion lest we should interpret the
Monroe Doctrine as in some way inimical to their interests, and we must
try to convince all the other nations of this continent once and for all
that no just and orderly Government has anything to fear from us. There
are certain republics to the south of us which have already reached such
a point of stability, order, and prosperity that they themselves, though
as yet hardly consciously, are among the guarantors of this doctrine.
These republics we now meet not only on a basis of entire equality, but
in a spirit of frank and respectful friendship, which we hope is mutual.
If all of the republics to the south of us will only grow as those to
which I allude have already grown, all need for us to be the especial
champions of the doctrine will disappear, for no stable and growing
American Republic wishes to see some great non-American military power
acquire territory in its neighborhood. All that this country desires is
that the other republics on this continent shall be happy and
prosperous; and they cannot be happy and prosperous unless they maintain
order within their boundaries and behave with a just regard for their
obligations toward outsiders. It must be understood that under no
circumstances will the United States use the Monroe Doctrine as a cloak
for territorial aggression. We desire peace with all the world, but
perhaps most of all with the other peoples of the American Continent.
There are, of course, limits to the wrongs which any self-respecting
nation can endure. It is always possible that wrong actions toward this
Nation, or toward citizens of this Nation, in some State unable to keep
order among its own people, unable to secure justice from outsiders, and
unwilling to do justice to those outsiders who treat it well, may result
in our having to take action to protect our rights; but such action will
not be taken with a view to territorial aggression, and it will be taken
at all only with extreme reluctance and when it has become evident that
every other resource has been exhausted.

Moreover, we must make it evident that we do not intend to permit the
Monroe Doctrine to be used by any nation on this Continent as a shield
to protect it from the consequences of its own misdeeds against foreign
nations. If a republic to the south of us commits a tort against a
foreign nation, such as an outrage against a citizen of that nation,
then the Monroe Doctrine does not force us to interfere to prevent
punishment of the tort, save to see that the punishment does not assume
the form of territorial occupation in any shape. The case is more
difficult when it refers to a contractual obligation. Our own Government
has always refused to enforce such contractual obligations on behalf, of
its citizens by an appeal to arms. It is much to be wished that all
foreign governments would take the same view. But they do not; and in
consequence we are liable at any time to be brought face to face with
disagreeable alternatives. On the one hand, this country would certainly
decline to go to war to prevent a foreign government from collecting a
just debt; on the other hand, it is very inadvisable to permit any
foreign power to take possession, even temporarily, of the custom houses
of an American Republic in order to enforce the payment of its
obligations; for such temporary occupation might turn into a permanent
occupation. The only escape from these alternatives may at any time be
that we must ourselves undertake to bring about some arrangement by
which so much as possible of a just obligation shall be paid. It is far
better that this country should put through such an arrangement, rather
than allow any foreign country to undertake it. To do so insures the
defaulting republic from having to pay debt of an improper character
under duress, while it also insures honest creditors of the republic
from being passed by in the interest of dishonest or grasping creditors.
Moreover, for the United States to take such a position offers the only
possible way of insuring us against a clash with some foreign power. The
position is, therefore, in the interest of peace as well as in the
interest of justice. It is of benefit to our people; it is of benefit to
foreign peoples; and most of all it is really of benefit to the people
of the country concerned.

This brings me to what should be one of the fundamental objects of the
Monroe Doctrine. We must ourselves in good faith try to help upward
toward peace and order those of our sister republics which need such
help. Just as there has been a gradual growth of the ethical element in
the relations of one individual to another, so we are, even though
slowly, more and more coming to recognize the duty of bearing one
another's burdens, not only as among individuals, but also as among
nations.

Santo Domingo, in her turn, has now made an appeal to us to help her,
and not only every principle of wisdom but every generous instinct
within us bids us respond to the appeal. It is not of the slightest
consequence whether we grant the aid needed by Santo Domingo as an
incident to the wise development of the Monroe Doctrine or because we
regard the case of Santo Domingo as standing wholly by itself, and to be
treated as such, and not on general principles or with any reference to
the Monroe Doctrine. The important point is to give the needed aid, and
the case is certainly sufficiently peculiar to deserve to be judged
purely on its own merits. The conditions in Santo Domingo have for a
number of years grown from bad to worse until a year ago all society was
on the verge of dissolution. Fortunately, just at this time a ruler
sprang up in Santo Domingo, who, with his colleagues, saw the dangers
threatening their country and appealed to the friendship of the only
great and powerful neighbor who possessed the power, and as they hoped
also the will to help them. There was imminent danger of foreign
intervention. The previous rulers of Santo Domingo had recklessly
incurred debts, and owing to her internal disorders she had ceased to be
able to provide means of paying the debts. The patience of her foreign
creditors had become exhausted, and at least two foreign nations were on
the point of intervention, and were only prevented from intervening by
the unofficial assurance of this Government that it would itself strive
to help Santo Domingo in her hour of need. In the case of one of these
nations, only the actual opening of negotiations to this end by our
Government prevented the seizure of territory in Santo Domingo by a
European power. Of the debts incurred some were just, while some were
not of a character which really renders it obligatory on or proper for
Santo Domingo to pay them in full. But she could not pay any of them
unless some stability was assured her Government and people.

Accordingly, the Executive Department of our Government negotiated a
treaty under which we are to try to help the Dominican people to
straighten out their finances. This treaty is pending before the Senate.
In the meantime a temporary arrangement has been made which will last
until the Senate has had time to take action upon the treaty. Under this
arrangement the Dominican Government has appointed Americans to all the
important positions in the customs service and they are seeing to the
honest collection of the revenues, turning over 45 per cent. to the
Government for running expenses and putting the other 55 per cent. into
a safe depository for equitable division in case the treaty shall be
ratified, among the various creditors, whether European or American.

The Custom Houses offer well-nigh the only sources of revenue in Santo
Domingo, and the different revolutions usually have as their real aim
the obtaining of these Custom Houses. The mere fact that the Collectors
of Customs are Americans, that they are performing their duties with
efficiency and honesty, and that the treaty is pending in the Senate
gives a certain moral power to the Government of Santo Domingo which it
has not had before. This has completely discouraged all revolutionary
movement, while it has already produced such an increase in the revenues
that the Government is actually getting more from the 45 per cent. that
the American Collectors turn over to it than it got formerly when it
took the entire revenue. It is enabling the poor, harassed people of
Santo Domingo once more to turn their attention to industry and to be
free from the cure of interminable revolutionary disturbance. It offers
to all bona-fide creditors, American and European, the only really good
chance to obtain that to which they are justly entitled, while it in
return gives to Santo Domingo the only opportunity of defense against
claims which it ought not to pay, for now if it meets the views of the
Senate we shall ourselves thoroughly examine all these claims, whether
American or foreign, and see that none that are improper are paid. There
is, of course, opposition to the treaty from dishonest creditors,
foreign and American, and from the professional revolutionists of the
island itself. We have already reason to believe that some of the
creditors who do not dare expose their claims to honest scrutiny are
endeavoring to stir up sedition in the island and opposition to the
treaty. In the meantime, I have exercised the authority vested in me by
the joint resolution of the Congress to prevent the introduction of arms
into the island for revolutionary purposes.

Under the course taken, stability and order and all the benefits of
peace are at last coming to Santo Domingo, danger of foreign
intervention has been suspended, and there is at last a prospect that
all creditors will get justice, no more and no less. If the arrangement
is terminated by the failure of the treaty chaos will follow; and if
chaos follows, sooner or later this Government may be involved in
serious difficulties with foreign Governments over the island, or else
may be forced itself to intervene in the island in some unpleasant
fashion. Under the proposed treaty the independence of the island is
scrupulously respected, the danger of violation of the Monroe Doctrine
by the intervention of foreign powers vanishes, and the interference of
our Government is minimized, so that we shall only act in conjunction
with the Santo Domingo authorities to secure the proper administration
of the customs, and therefore to secure the payment of just debts and to
secure the Dominican Government against demands for unjust debts. The
proposed method will give the people of Santo Domingo the same chance to
move onward and upward which we have already given to the people of
Cuba. It will be doubly to our discredit as a Nation if we fail to take
advantage of this chance; for it will be of damage to ourselves, and it
will be of incalculable damage to Santo Domingo. Every consideration of
wise policy, and, above all, every consideration of large generosity,
bids us meet the request of Santo Domingo as we are now trying to meet
it.

We cannot consider the question of our foreign policy without at the
same time treating of the Army and the Navy. We now have a very small
army indeed, one well-nigh infinitesimal when compared With the army of
any other large nation. Of course the army we do have should be as
nearly perfect of its kind and for its size as is possible. I do not
believe that any army in the world has a better average of enlisted men
or a better type of junior officer; but the army should be trained to
act effectively in a mass. Provision should be made by sufficient
appropriations for manoeuvers of a practical kind, so that the troops
may learn how to take care of themselves under actual service
conditions; every march, for instance, being made with the soldier
loaded exactly as he would be in active campaign. The Generals and
Colonels would thereby have opportunity of handling regiments, brigades,
and divisions, and the commissary and medical departments would be
tested in the field. Provision should be made for the exercise at least
of a brigade and by preference of a division in marching and embarking
at some point on our coast and disembarking at some other point and
continuing its march. The number of posts in which the army is kept in
time of peace should be materially diminished and the posts that are
left made correspondingly larger. No local interests should be allowed
to stand in the way of assembling the greater part of the troops which
would at need form our field armies in stations of such size as will
permit the best training to be given to the personnel of all grades,
including the high officers and staff officers. To accomplish this end
we must have not company or regimental garrisons, but brigade and
division garrisons. Promotion by mere seniority can never result in a
thoroughly efficient corps of officers in the higher ranks unless there
accompanies it a vigorous weeding-out process. Such a weeding-out
process--that is, such a process of selection--is a chief feature of the
four years' course of the young officer at West Point. There is no good
reason why it should stop immediately upon his graduation. While at West
Point he is dropped unless he comes up to a certain standard of
excellence, and when he graduates he takes rank in the army according to
his rank of graduation. The results are good at West Point; and there
should be in the army itself something that will achieve the same end.
After a certain age has been reached the average officer is unfit to do
good work below a certain grade. Provision should be made for the
promotion of exceptionally meritorious men over the heads of their
comrades and for the retirement of all men who have reached a given age
without getting beyond a given rank; this age of retirement of course
changing from rank to rank. In both the army and the navy there should
be some principle of selection, that is, of promotion for merit, and
there should be a resolute effort to eliminate the aged officers of
reputable character who possess no special efficiency.

There should be an increase in the coast artillery force, so that our
coast fortifications can be in some degree adequately manned. There is
special need for an increase and reorganization of the Medical
Department of the army. In both the army and navy there must be the same
thorough training for duty in the staff corps as in the fighting line.
Only by such training in advance can we be sure that in actual war field
operations and those at sea will be carried on successfully. The
importance of this was shown conclusively in the Spanish-American and
the Russo-Japanese wars. The work of the medical departments in the
Japanese army and navy is especially worthy of study. I renew my
recommendation of January 9, 1905, as to the Medical Department of the
army and call attention to the equal importance of the needs of the
staff corps of the navy. In the Medical Department of the navy the first
in importance is the reorganization of the Hospital Corps, on the lines
of the Gallinger bill, (S. 3,984, February 1, 1904), and the
reapportionment of the different grades of the medical officers to meet
service requirements. It seems advisable also that medical officers of
the army and navy should have similar rank and pay in their respective
grades, so that their duties can be carried on without friction when
they are brought together. The base hospitals of the navy should be put
in condition to meet modern requirements and hospital ships be provided.
Unless we now provide with ample forethought for the medical needs of
the army and navy appalling suffering of a preventable kind is sure to
occur if ever the country goes to war. It is not reasonable to expect
successful administration in time of war of a department which lacks a
third of the number of officers necessary to perform the medical service
in time of peace. We need men who are not merely doctors; they must be
trained in the administration of military medical service.

Our navy must, relatively to the navies of other nations, always be of
greater size than our army. We have most wisely continued for a number
of years to build up our navy, and it has now reached a fairly high
standard of efficiency. This standard of efficiency must not only be
maintained, but increased. It does not seem to be necessary, however,
that the navy should--at least in the immediate future--be increased
beyond the present number of units. What is now clearly necessary is to
substitute efficient for inefficient units as the latter become worn out
or as it becomes apparent that they are useless. Probably the result
would be attained by adding a single battleship to our navy each year,
the superseded or outworn vessels being laid up or broken up as they are
thus replaced. The four single-turret monitors built immediately after
the close of the Spanish war, for instance, are vessels which would be
of but little use in the event of war. The money spent upon them could
have been more usefully spent in other ways. Thus it would have been far
better never to have built a single one of these monitors and to have
put the money into an ample supply of reserve guns. Most of the smaller
cruisers and gunboats, though they serve a useful purpose so far as they
are needed for international police work, would not add to the strength
of our navy in a conflict with a serious foe. There is urgent need of
providing a large increase in the number of officers, and especially in
the number of enlisted men.

Recent naval history has emphasized certain lessons which ought not to,
but which do, need emphasis. Seagoing torpedo boats or destroyers are
indispensable, not only for making night attacks by surprise upon an
enemy, but even in battle for finishing already crippled ships. Under
exceptional circumstances submarine boats would doubtless be of use.
Fast scouts are needed. The main strength of the navy, however, lies,
and can only lie, in the great battleships, the heavily armored, heavily
gunned vessels which decide the mastery of the seas. Heavy-armed
cruisers also play a most useful part, and unarmed cruisers, if swift
enough, are very useful as scouts. Between antagonists of approximately
equal prowess the comparative perfection of the instruments of war will
ordinarily determine the fight. But it is, of course, true that the man
behind the gun, the man in the engine room, and the man in the conning
tower, considered not only individually, but especially with regard to
the way in which they work together, are even more important than the
weapons with which they work. The most formidable battleship is, of
course, helpless against even a light cruiser if the men aboard it are
unable to hit anything with their guns, and thoroughly well-handled
cruisers may count seriously in an engagement with much superior
vessels, if the men aboard the latter are ineffective, whether from lack
of training or from any other cause. Modern warships are most formidable
mechanisms when well handled, but they are utterly useless when not well
handled, and they cannot be handled at all without long and careful
training. This training can under no circumstance be given when once war
has broken out. No fighting ship of the first class should ever be laid
up save for necessary repairs, and her crew should be kept constantly
exercised on the high seas, so that she may stand at the highest point
of perfection. To put a new and untrained crew upon the most powerful
battleship and send it out to meet a formidable enemy is not only to
invite, but to insure, disaster and disgrace. To improvise crews at the
outbreak of a war, so far as the serious fighting craft are concerned,
is absolutely hopeless. If the officers and men are not thoroughly
skilled in, and have not been thoroughly trained to, their duties, it
would be far better to keep the ships in port during hostilities than to
send them against a formidable opponent, for the result could only be
that they would be either sunk or captured. The marksmanship of our navy
is now on the whole in a gratifying condition, and there has been a
great improvement in fleet practice. We need additional seamen; we need
a large store of reserve guns; we need sufficient money for ample target
practice, ample practice of every kind at sea. We should substitute for
comparatively inefficient types--the old third-class battleship Texas,
the single-turreted monitors above mentioned, and, indeed, all the
monitors and some of the old cruisers--efficient, modern seagoing
vessels. Seagoing torpedo-boat destroyers should be substituted for some
of the smaller torpedo boats. During the present Congress there need be
no additions to the aggregate number of units of the navy. Our navy,
though very small relatively to the navies of other nations, is for the
present sufficient in point of numbers for our needs, and while we must
constantly strive to make its efficiency higher, there need be no
additions to the total of ships now built and building, save in the way
of substitution as above outlined. I recommend the report of the
Secretary of the Navy to the careful consideration of the Congress,
especially with a view to the legislation therein advocated.

During the past year evidence has accumulated to confirm the expressions
contained in my last two annual messages as to the importance of
revising by appropriate legislation our system of naturalizing aliens. I
appointed last March a commission to make a careful examination of our
naturalization laws, and to suggest appropriate measures to avoid the
notorious abuses resulting from the improvident of unlawful granting of
citizenship. This commission, composed of an officer of the Department
of State, of the Department of Justice, and of the Department of
Commerce and Labor, has discharged the duty imposed upon it, and has
submitted a report, which will be transmitted to the Congress for its
consideration, and, I hope, for its favor, able action.

The distinguishing recommendations of the commission are:

First--A Federal Bureau of Naturalization, to be established in the
Department of Commerce and Labor, to supervise the administration of the
naturalization laws and to receive returns of naturalizations pending
and accomplished.

Second--Uniformity of naturalization certificates, fees to be charged,
and procedure.

Third--More exacting qualifications for citizenship.

Fourth--The preliminary declaration of intention to be abolished and no
alien to be naturalized until at least ninety days after the filing of
his petition.

Fifth--Jurisdiction to naturalize aliens to be confined to United States
district courts and to such State courts as have jurisdiction in civil
actions in which the amount in controversy is unlimited; in cities of
over 100,000 inhabitants the United States district courts to have
exclusive jurisdiction in the naturalization of the alien residents of
such cities.

In my last message I asked the attention of the Congress to the urgent
need of action to make our criminal law more effective; and I most
earnestly request that you pay heed to the report of the Attorney
General on this subject. Centuries ago it was especially needful to
throw every safeguard round the accused. The danger then was lest he
should be wronged by the State. The danger is now exactly the reverse.
Our laws and customs tell immensely in favor of the criminal and against
the interests of the public he has wronged. Some antiquated and outworn
rules which once safeguarded the threatened rights of private citizens,
now merely work harm to the general body politic. The criminal law of
the United States stands in urgent need of revision. The criminal
process of any court of the United States should run throughout the
entire territorial extent of our country. The delays of the criminal
law, no less than of the civil, now amount to a very great evil.

There seems to be no statute of the United States which provides for the
punishment of a United States Attorney or other officer of the
Government who corruptly agrees to wrongfully do or wrongfully refrain
from doing any act when the consideration for such corrupt agreement is
other than one possessing money value. This ought to be remedied by
appropriate legislation. Legislation should also be enacted to cover
explicitly, unequivocally, and beyond question breach of trust in the
shape of prematurely divulging official secrets by an officer or employe
of the United States, and to provide a suitable penalty therefor. Such
officer or employe owes the duty to the United States to guard carefully
and not to divulge or in any manner use, prematurely, information which
is accessible to the officer or employe by reason of his official
position. Most breaches of public trust are already covered by the law,
and this one should be. It is impossible, no matter how much care is
used, to prevent the occasional appointment to the public service of a
man who when tempted proves unfaithful; but every means should be
provided to detect and every effort made to punish the wrongdoer. So far
as in my power see each and every such wrongdoer shall be relentlessly
hunted down; in no instance in the past has he been spared; in no
instance in the future shall he be spared. His crime is a crime against
every honest man in the Nation, for it is a crime against the whole body
politic. Yet in dwelling on such misdeeds it is unjust not to add that
they are altogether exceptional, and that on the whole the employes of
the Government render upright and faithful service to the people. There
are exceptions, notably in one or two branches of the service, but at no
time in the Nation's history has the public service of the Nation taken
as a whole stood on a higher plane than now, alike as regards honesty
and as regards efficiency.

Once again I call your attention to the condition of the public land
laws. Recent developments have given new urgency to the need for such
changes as will fit these laws to actual present conditions. The honest
disposal and right use of the remaining public lands is of fundamental
importance. The iniquitous methods by which the monopolizing of the
public lands is being brought about under the present laws are becoming
more generally known, but the existing laws do not furnish effective
remedies. The recommendations of the Public Lands Commission upon this
subject are wise and should be given effect.

The creation of small irrigated farms under the Reclamation act is a
powerful offset to the tendency of certain other laws to foster or
permit monopoly of the land. Under that act the construction of great
irrigation works has been proceeding rapidly and successfully, the lands
reclaimed are eagerly taken up, and the prospect that the policy of
National irrigation will accomplish all that was expected of it is
bright. The act should be extended to include the State of Texas.

The Reclamation act derives much of its value from the fact that it
tends to secure the greatest possible number of homes on the land, and
to create communities of freeholders, in part by settlement on public
lands, in part by forcing the subdivision of large private holdings
before they can get water from Government irrigation works. The law
requires that no right to the use of water for land in private ownership
shall be sold for a tract exceeding 160 acres to any one land owner.
This provision has excited active and powerful hostility, but the
success of the law itself depends on the wise and firm enforcement of
it. We cannot afford to substitute tenants for freeholders on the public
domain.

The greater part of the remaining public lands can not be irrigated.
They are at present and will probably always be of greater value for
grazing than for any other purpose. This fact has led to the grazing
homestead of 640 acres in Nebraska and to the proposed extension of it
to other States. It is argued that a family can not be supported on 160
acres of arid grazing land. This is obviously true, but neither can a
family be supported on 640 acres of much of the land to which it is
proposed to apply the grazing homestead. To establish universally any
such arbitrary limit would be unwise at the present time. It would
probably result on the one hand in enlarging the holdings of some of the
great land owners, and on the other in needless suffering and failure on
the part of a very considerable proportion of the bona fide settlers who
give faith to the implied assurance of the Government that such an area
is sufficient. The best use of the public grazing lands requires the
careful examination and classification of these lands in order to give
each settler land enough to support his family and no more. While this
work is being done, and until the lands are settled, the Government
should take control of the open range, under reasonable regulations
suited to local needs, following the general policy already in
successful operation on the forest reserves. It is probable that the
present grazing value of the open public range is scarcely more than
half what it once was or what it might easily be again under careful
regulation.

The forest policy of the Administration appears to enjoy the unbroken
support of the people. The great users of timber are themselves
forwarding the movement for forest preservation. All organized
opposition to the forest preserves in the West has disappeared. Since
the consolidation of all Government forest work in the National Forest
Service there has been a rapid and notable gain in the usefulness of the
forest reserves to the people and in public appreciation of their value.
The National parks within or adjacent to forest reserves should be
transferred to the charge of the Forest Service also.

The National Government already does something in connection with the
construction and maintenance of the great system of levees along the
lower course of the Mississippi; in my judgment it should do much more.

To the spread of our trade in peace and the defense of our flag in war a
great and prosperous merchant marine is indispensable. We should have
ships of our own and seamen of our own to convey our goods to neutral
markets, and in case of need to reinforce our battle line. It cannot but
be a source of regret and uneasiness to us that the lines of
communication with our sister republics of South America should be
chiefly under foreign control. It is not a good thing that American
merchants and manufacturers should have to send their goods and letters
to South America via Europe if they wish security and dispatch. Even on
the Pacific, where our ships have held their own better than on the
Atlantic, our merchant flag is now threatened through the liberal aid
bestowed by other Governments on their own steam lines. I ask your
earnest consideration of the report with which the Merchant Marine
Commission has followed its long and careful inquiry.

I again heartily commend to your favorable consideration the
tercentennial celebration at Jamestown, Va. Appreciating the
desirability of this commemoration, the Congress passed an act, March 3,
1905, authorizing in the year 1907, on and near the waters of Hampton
Roads, in the State of Virginia, an international naval, marine, and
military celebration in honor of this event. By the authority vested in
me by this act, I have made proclamation of said celebration, and have
issued, in conformity with its instructions, invitations to all the
nations of the earth to participate, by sending their naval vessels and
such military organizations as may be practicable. This celebration
would fail of its full purpose unless it were enduring in its results
and commensurate with the importance of the event to be celebrated, the
event from which our Nation dates its birth. I earnestly hope that this
celebration, already indorsed by the Congress of the United States, and
by the Legislatures of sixteen States since the action of the Congress,
will receive such additional aid at your hands as will make it worthy of
the great event it is intended to celebrate, and thereby enable the
Government of the United States to make provision for the exhibition of
its own resources, and likewise enable our people who have undertaken
the work of such a celebration to provide suitable and proper
entertainment and instruction in the historic events of our country for
all who may visit the exposition and to whom we have tendered our
hospitality.

It is a matter of unmixed satisfaction once more to call attention to
the excellent work of the Pension Bureau; for the veterans of the civil
war have a greater claim upon us than any other class of our citizens.
To them, first of all among our people, honor is due.

Seven years ago my lamented predecessor, President McKinley, stated that
the time had come for the Nation to care for the graves of the
Confederate dead. I recommend that the Congress take action toward this
end. The first need is to take charge of the graves of the Confederate
dead who died in Northern prisons.

The question of immigration is of vital interest to this country. In the
year ending June 30, 1905, there came to the United States 1,026,000
alien immigrants. In other words, in the single year that has just
elapsed there came to this country a greater number of people than came
here during the one hundred and sixty-nine years of our Colonial life
which intervened between the first landing at Jamestown and the
Declaration of Independence. It is clearly shown in the report of the
Commissioner General of Immigration that while much of this enormous
immigration is undoubtedly healthy and natural, a considerable
proportion is undesirable from one reason or another; moreover, a
considerable proportion of it, probably a very large proportion,
including most of the undesirable class, does not come here of its own
initiative, but because of the activity of the agents of the great
transportation companies. These agents are distributed throughout
Europe, and by the offer of all kinds of inducements they wheedle and
cajole many immigrants, often against their best interest, to come here.
The most serious obstacle we have to encounter in the effort to secure a
proper regulation of the immigration to these shores arises from the
determined opposition of the foreign steamship lines who have no
interest whatever in the matter save to increase the returns on their
capital by carrying masses of immigrants hither in the steerage quarters
of their ships.

As I said in my last message to the Congress, we cannot have too much
immigration of the right sort and we should have none whatever of the
wrong sort. Of course, it is desirable that even the right kind of
immigration should be properly distributed in this country. We need more
of such immigration for the South; and special effort should be made to
secure it. Perhaps it would be possible to limit the number of
immigrants allowed to come in any one year to New York and other
Northern cities, while leaving unlimited the number allowed to come to
the South; always provided, however, that a stricter effort is made to
see that only immigrants of the right kind come to our country anywhere.
In actual practice it has proved so difficult to enforce the migration
laws where long stretches of frontier marked by an imaginary line alone
intervene between us and our neighbors that I recommend that no
immigrants be allowed to come in from Canada and Mexico save natives of
the two countries themselves. As much as possible should be done to
distribute the immigrants upon the land and keep them away from the
contested tenement-house districts of the great cities. But distribution
is a palliative, not a cure. The prime need is to keep out all
immigrants who will not make good American citizens. The laws now
existing for the exclusion of undesirable immigrants should be
strengthened. Adequate means should be adopted, enforced by sufficient
penalties, to compel steamship companies engaged in the passenger
business to observe in good faith the law which forbids them to
encourage or solicit immigration to the United States. Moreover, there
should be a sharp limitation imposed upon all vessels coming to our
ports as to the number of immigrants in ratio to the tonnage which each
vessel can carry. This ratio should be high enough to insure the coming
hither of as good a class of aliens as possible. Provision should be
made for the surer punishment of those who induce aliens to come to this
country under promise or assurance of employment. It should be made
possible to inflict a sufficiently heavy penalty on any employer
violating this law to deter him from taking the risk. It seems to me
wise that there should be an international conference held to deal with
this question of immigration, which has more than a merely National
significance; such a conference could, among other things, enter at
length into the method for securing a thorough inspection of would-be
immigrants at the ports from which they desire to embark before
permitting them to embark.

In dealing with this question it is unwise to depart from the old
American tradition and to discriminate for or against any man who
desires to come here and become a citizen, save on the ground of that
man's fitness for citizenship. It is our right and duty to consider his
moral and social quality. His standard of living should be such that he
will not, by pressure of competition, lower the standard of living of
our own wage-workers; for it must ever be a prime object of our
legislation to keep high their standard of living. If the man who seeks
to come here is from the moral and social standpoint of such a character
as to bid fair to add value to the community he should be heartily
welcomed. We cannot afford to pay heed to whether he is of one creed or
another, of one nation, or another. We cannot afford to consider whether
he is Catholic or Protestant, Jew or Gentile; whether he is Englishman
or Irishman, Frenchman or German, Japanese, Italian, Scandinavian, Slav,
or Magyar. What we should desire to find out is the individual quality
of the individual man. In my judgment, with this end in view, we shall
have to prepare through our own agents a far more rigid inspection in
the countries from which the immigrants come. It will be a great deal
better to have fewer immigrants, but all of the right kind, than a great
number of immigrants, many of whom are necessarily of the wrong kind. As
far as possible we wish to limit the immigration to this country to
persons who propose to become citizens of this country, and we can well
afford to insist upon adequate scrutiny of the character of those who
are thus proposed for future citizenship. There should be an increase in
the stringency of the laws to keep out insane, idiotic, epileptic, and
pauper immigrants. But this is by no means enough. Not merely the
Anarchist, but every man of Anarchistic tendencies, all violent and
disorderly people, all people of bad character, the incompetent, the
lazy, the vicious, the physically unfit, defective, or degenerate should
be kept out. The stocks out of which American citizenship is to be built
should be strong and healthy, sound in body, mind, and character. If it
be objected that the Government agents would not always select well, the
answer is that they would certainly select better than do the agents and
brokers of foreign steamship companies, the people who now do whatever
selection is done.

The questions arising in connection with Chinese immigration stand by
themselves. The conditions in China are such that the entire Chinese
coolie class, that is, the class of Chinese laborers, skilled and
unskilled, legitimately come under the head of undesirable immigrants to
this country, because of their numbers, the low wages for which they
work, and their low standard of living. Not only is it to the interest
of this country to keep them out, but the Chinese authorities do not
desire that they should be admitted. At present their entrance is
prohibited by laws amply adequate to accomplish this purpose. These laws
have been, are being, and will be, thoroughly enforced. The violations
of them are so few in number as to be infinitesimal and can be entirely
disregarded. This is no serious proposal to alter the immigration law as
regards the Chinese laborer, skilled or unskilled, and there is no
excuse for any man feeling or affecting to feel the slightest alarm on
the subject.

But in the effort to carry out the policy of excluding Chinese laborers,
Chinese coolies, grave injustice and wrong have been done by this Nation
to the people of China, and therefore ultimately to this Nation itself.
Chinese students, business and professional men of all kinds--not only
merchants, but bankers, doctors, manufacturers, professors, travelers,
and the like--should be encouraged to come here, and treated on
precisely the same footing that we treat students, business men,
travelers, and the like of other nations. Our laws and treaties should
be framed, not so as to put these people in the excepted classes, but to
state that we will admit all Chinese, except Chinese of the coolie
class, Chinese skilled or unskilled laborers. There would not be the
least danger that any such provision would result in any relaxation of
the law about laborers. These will, under all conditions, be kept out
absolutely. But it will be more easy to see that both justice and
courtesy are shown, as they ought to be shown, to other Chinese, if the
law or treaty is framed as above suggested. Examinations should be
completed at the port of departure from China. For this purpose there
should be provided a more adequate Consular Service in China than we now
have. The appropriations both for the offices of the Consuls and for the
office forces in the consulates should be increased.

As a people we have talked much of the open door in China, and we
expect, and quite rightly intend to insist upon, justice being shown us
by the Chinese. But we cannot expect to receive equity unless we do
equity. We cannot ask the Chinese to do to us what we are unwilling to
do to them. They would have a perfect right to exclude our laboring men
if our laboring men threatened to come into their country in such
numbers as to jeopardize the well-being of the Chinese population; and
as, mutatis mutandis, these were the conditions with which Chinese
immigration actually brought this people face to face, we had and have a
perfect right, which the Chinese Government in no way contests, to act
as we have acted in the matter of restricting coolie immigration. That
this right exists for each country was explicitly acknowledged in the
last treaty between the two countries. But we must treat the Chinese
student, traveler, and business man in a spirit of the broadest justice
and courtesy if we expect similar treatment to be accorded to our own
people of similar rank who go to China. Much trouble has come during the
past Summer from the organized boycott against American goods which has
been started in China. The main factor in producing this boycott has
been the resentment felt by the students and business people of China,
by all the Chinese leaders, against the harshness of our law toward
educated Chinamen of the professional and business classes.  This
Government has the friendliest feeling for China and desires China's
well-being. We cordially sympathize with the announced purpose of Japan
to stand for the integrity of China. Such an attitude tends to the peace
of the world.

The civil service law has been on the statute books for twenty-two
years. Every President and a vast majority of heads of departments who
have been in office during that period have favored a gradual extension
of the merit system. The more thoroughly its principles have been
understood, the greater has been the favor with which the law has been
regarded by administration officers. Any attempt to carry on the great
executive departments of the Government without this law would
inevitably result in chaos. The Civil Service Commissioners are doing
excellent work, and their compensation is inadequate considering the
service they perform.

The statement that the examinations are not practical in character is
based on a misapprehension of the practice of the Commission. The
departments are invariably consulted as to the requirements desired and
as to the character of questions that shall be asked. General
invitations are frequently sent out to all heads of departments asking
whether any changes in the scope or character of examinations are
required. In other words, the departments prescribe the requirements and
qualifications desired, and the Civil Service Commission co-operates
with them in securing persons with these qualifications and insuring
open and impartial competition. In a large number of examinations (as,
for example, those for trades positions), there are no educational
requirements whatever, and a person who can neither read nor write may
pass with a high average. Vacancies in the service are filled with
reasonable expedition, and the machinery of the Commission, which
reaches every part of the country, is the best agency that has yet been
devised for finding people with the most suitable qualifications for the
various offices to be filled. Written competitive examinations do not
make an ideal method for filling positions, but they do represent an
immeasurable advance upon the "spoils" method, under which outside
politicians really make the appointments nominally made by the executive
officers, the appointees being chosen by the politicians in question, in
the great majority of cases, for reasons totally unconnected with the
needs of the service or of the public.

Statistics gathered by the Census Bureau show that the tenure of office
in the Government service does not differ materially from that enjoyed
by employes of large business corporations. Heads of executive
departments and members of the Commission have called my attention to
the fact that the rule requiring a filing of charges and three days'
notice before an employe could be separated from the service for
inefficiency has served no good purpose whatever, because that is not a
matter upon which a hearing of the employe found to be inefficient can
be of any value, and in practice the rule providing for such notice and
hearing has merely resulted in keeping in a certain number of
incompetents, because of the reluctance of the heads of departments and
bureau chiefs to go through the required procedure. Experience has shown
that this rule is wholly ineffective to save any man, if a superior for
improper reasons wishes to remove him, and is mischievous because it
sometimes serves to keep in the service incompetent men not guilty of
specific wrongdoing. Having these facts in view the rule has been
amended by providing that where the inefficiency or incapacity comes
within the personal knowledge of the head of a department the removal
may be made without notice, the reasons therefor being filed and made a
record of the department. The absolute right of the removal rests where
it always has rested, with the head of a department; any limitation of
this absolute right results in grave injury to the public service. The
change is merely one of procedure; it was much needed, and it is
producing good results.

The civil service law is being energetically and impartially enforced,
and in the large majority of cases complaints of violations of either
the law or rules are discovered to be unfounded. In this respect this
law compares very favorably with any other Federal statute. The question
of politics in the appointment and retention of the men engaged in
merely ministerial work has been practically eliminated in almost the
entire field of Government employment covered by the civil service law.
The action of the Congress in providing the commission with its own
force instead of requiring it to rely on detailed clerks has been
justified by the increased work done at a smaller cost to the
Government. I urge upon the Congress a careful consideration of the
recommendations contained in the annual report of the commission.

Our copyright laws urgently need revision. They are imperfect in
definition, confused and inconsistent in expression; they omit provision
for many articles which, under modern reproductive processes are
entitled to protection; they impose hardships upon the copyright
proprietor which are not essential to the fair protection of the public;
they are difficult for the courts to interpret and impossible for the
Copyright Office to administer with satisfaction to the public. Attempts
to improve them by amendment have been frequent, no less than twelve
acts for the purpose having been passed since the Revised Statutes. To
perfect them by further amendment seems impracticable. A complete
revision of them is essential. Such a revision, to meet modern
conditions, has been found necessary in Germany, Austria, Sweden, and
other foreign countries, and bills embodying it are pending in England
and the Australian colonies. It has been urged here, and proposals for a
commission to undertake it have, from time to time, been pressed upon
the Congress. The inconveniences of the present conditions being so
great, an attempt to frame appropriate legislation has been made by the
Copyright Office, which has called conferences of the various interests
especially and practically concerned with the operation of the copyright
laws. It has secured from them suggestions as to the changes necessary;
it has added from its own experience and investigations, and it has
drafted a bill which embodies such of these changes and additions as,
after full discussion and expert criticism, appeared to be sound and
safe. In form this bill would replace the existing insufficient and
inconsistent laws by one general copyright statute. It will be presented
to the Congress at the coming session. It deserves prompt consideration.

I recommend that a law be enacted to regulate inter-State commerce in
misbranded and adulterated foods, drinks, and drugs. Such law would
protect legitimate manufacture and commerce, and would tend to secure
the health and welfare of the consuming public. Traffic in food-stuffs
which have been debased or adulterated so as to injure health or to
deceive purchasers should be forbidden.

The law forbidding the emission of dense black or gray smoke in the city
of Washington has been sustained by the courts. Something has been
accomplished under it, but much remains to be done if we would preserve
the capital city from defacement by the smoke nuisance. Repeated
prosecutions under the law have not had the desired effect. I recommend
that it be made more stringent by increasing both the minimum and
maximum fine; by providing for imprisonment in cases of repeated
violation, and by affording the remedy of injunction against the
continuation of the operation of plants which are persistent offenders.
I recommend, also, an increase in the number of inspectors, whose duty
it shall be to detect violations of the act.

I call your attention to the generous act of the State of California in
conferring upon the United States Government the ownership of the
Yosemite Valley and the Mariposa Big Tree Grove. There should be no
delay in accepting the gift, and appropriations should be made for the
including thereof in the Yosemite National Park, and for the care and
policing of the park. California has acted most wisely, as well as with
great magnanimity, in the matter. There are certain mighty natural
features of our land which should be preserved in perpetuity for our
children and our children's children. In my judgment, the Grand Canyon
of the Colorado should be made into a National park. It is greatly to be
wished that the State of New York should copy as regards Niagara what
the State of California has done as regards the Yosemite. Nothing should
be allowed to interfere with the preservation of Niagara Falls in all
their beauty and majesty. If the State cannot see to this, then it is
earnestly to be wished that she should be willing to turn it over to the
National Government, which should in such case (if possible, in
conjunction with the Canadian Government) assume the burden and
responsibility of preserving unharmed Niagara Falls; just as it should
gladly assume a similar burden and responsibility for the Yosemite
National Park, and as it has already assumed them for the Yellowstone
National Park. Adequate provision should be made by the Congress for the
proper care and supervision of all these National parks. The boundaries
of the Yellowstone National Park should be extended to the south and
east, to take in such portions of the abutting forest reservations as
will enable the Government to protect the elk on their Winter range.

The most characteristic animal of the Western plains was the great,
shaggy-maned wild ox, the bison, commonly known as buffalo. Small
fragments of herds exist in a domesticated state here and there, a few
of them in the Yellowstone Park. Such a herd as that on the Flat-head
Reservation should not be allowed to go out of existence. Either on some
reservation or on some forest reserve like the Wichita reserve and game
refuge provision should be made for the preservation of such a herd. I
believe that the scheme would be of economic advantage, for the robe of
the buffalo is of high market value, and the same is true of the robe of
the crossbred animals.

I call your especial attention to the desirability of giving to the
members of the Life Saving Service pensions such as are given to firemen
and policemen in all our great cities. The men in the Life Saving
Service continually and in the most matter of fact way do deeds such as
make Americans proud of their country. They have no political influence,
and they live in such remote places that the really heroic services they
continually render receive the scantiest recognition from the public. It
is unjust for a great nation like this to permit these men to become
totally disabled or to meet death in the performance of their hazardous
duty and yet to give them no sort of reward. If one of them serves
thirty years of his life in such a position he should surely be entitled
to retire on half pay, as a fireman or policeman does, and if he becomes
totally incapacitated through accident or sickness, or loses his health
in the discharge of his duty, he or his family should receive a pension
just as any soldier should. I call your attention with especial
earnestness to this matter because it appeals not only to our judgment
but to our sympathy; for the people on whose behalf I ask it are
comparatively few in number, render incalculable service of a
particularly dangerous kind, and have no one to speak for them.

During the year just past, the phase of the Indian question which has
been most sharply brought to public attention is the larger legal
significance of the Indian's induction into citizenship. This has made
itself manifest not only in a great access of litigation in which the
citizen Indian figures as a party defendant and in a more widespread
disposition to levy local taxation upon his personalty, but in a
decision of the United States Supreme Court which struck away the main
prop on which has hitherto rested the Government's benevolent effort to
protect him against the evils of intemperance. The court holds, in
effect, that when an Indian becomes, by virtue of an allotment of land
to him, a citizen of the State in which his land is situated, he passes
from under Federal control in such matters as this, and the acts of the
Congress prohibiting the sale or gift to him of intoxicants become
substantially inoperative. It is gratifying to note that the States and
municipalities of the West which have most at stake in the welfare of
the Indians are taking up this subject and are trying to supply, in a
measure at least, the abdication of its trusteeship forced upon the
Federal Government. Nevertheless, I would urgently press upon the
attention of the Congress the question whether some amendment of the
internal revenue laws might not be of aid in prosecuting those
malefactors, known in the Indian country as "bootleggers," who are
engaged at once in defrauding the United States Treasury of taxes and,
what is far more important, in debauching the Indians by carrying
liquors illicitly into territory still completely under Federal
jurisdiction.

Among the crying present needs of the Indians are more day schools
situated in the midst of their settlements, more effective instruction
in the industries pursued on their own farms, and a more liberal tension
of the field-matron service, which means the education of the Indian
women in the arts of home making. Until the mothers are well started in
the right direction we cannot reasonably expect much from the children
who are soon to form an integral part of our American citizenship.
Moreover the excuse continually advanced by male adult Indians for
refusing offers of remunerative employment at a distance from their
homes is that they dare not leave their families too long out of their
sight. One effectual remedy for this state of things is to employ the
minds and strengthen the moral fibre of the Indian women--the end to
which the work of the field matron is especially directed. I trust that
the Congress will make its appropriations for Indian day schools and
field matrons as generous as may consist with the other pressing demands
upon its providence.

During the last year the Philippine Islands have been slowly recovering
from the series of disasters which, since American occupation, have
greatly reduced the amount of agricultural products below what was
produced in Spanish times. The war, the rinderpest, the locusts, the
drought, and the cholera have been united as causes to prevent a return
of the prosperity much needed in the islands. The most serious is the
destruction by the rinderpest of more than 75 per cent of the draught
cattle, because it will take several years of breeding to restore the
necessary number of these indispensable aids to agriculture. The
commission attempted to supply by purchase from adjoining countries the
needed cattle, but the experiments made were unsuccessful. Most of the
cattle imported were unable to withstand the change of climate and the
rigors of the voyage and died from other diseases than rinderpest.

The income of the Philippine Government has necessarily been reduced by
reason of the business and agricultural depression in the islands, and
the Government has been obliged to exercise great economy to cut down
its expenses, to reduce salaries, and in every way to avoid a deficit.
It has adopted an internal revenue law, imposing taxes on cigars,
cigarettes, and distilled liquors, and abolishing the old Spanish
industrial taxes. The law has not operated as smoothly as was hoped, and
although its principle is undoubtedly correct, it may need amendments
for the purpose of reconciling the people to its provisions. The income
derived from it has partly made up for the reduction in customs revenue.

There has been a marked increase in the number of Filipinos employed in
the civil service, and a corresponding decrease in the number of
Americans. The Government in every one of its departments has been
rendered more efficient by elimination of undesirable material and the
promotion of deserving public servants.

Improvements of harbors, roads, and bridges continue, although the
cutting down of the revenue forbids the expenditure of any great amount
from current income for these purposes. Steps are being taken, by
advertisement for competitive bids, to secure the construction and
maintenance of 1,000 miles of railway by private corporations under the
recent enabling legislation of the Congress. The transfer of the friar
lands, in accordance with the contract made some two years ago, has been
completely effected, and the purchase money paid. Provision has just
been made by statute for the speedy settlement in a special proceeding
in the Supreme Court of controversies over the possession and title of
church buildings and rectories arising between the Roman Catholic Church
and schismatics claiming under ancient municipalities. Negotiations and
hearings for the settlement of the amount due to the Roman Catholic
Church for rent and occupation of churches and rectories by the army of
the United States are in progress, and it is hoped a satisfactory
conclusion may be submitted to the Congress before the end of the
session.

Tranquillity has existed during the past year throughout the
Archipelago, except in the Province of Cavite, the Province of Batangas
and the Province of Samar, and in the Island of Jolo among the Moros.
The Jolo disturbance was put an end to by several sharp and short
engagements, and now peace prevails in the Moro Province, Cavite, the
mother of ladrones in the Spanish times, is so permeated with the
traditional sympathy of the people for ladronism as to make it difficult
to stamp out the disease. Batangas was only disturbed by reason of the
fugitive ladrones from Cavite, Samar was thrown into disturbance by the
uneducated and partly savage peoples living in the mountains, who,
having been given by the municipal code more power than they were able
to exercise discreetly, elected municipal officers who abused their
trusts, compelled the people raising hemp to sell it at a much less
price than it was worth, and by their abuses drove their people into
resistance to constituted authority. Cavite and Samar are instances of
reposing too much confidence in the self-governing power of a people.
The disturbances have all now been suppressed, and it is hoped that with
these lessons local governments can be formed which will secure quiet
and peace to the deserving inhabitants. The incident is another proof of
the fact that if there has been any error as regards giving
self-government in the Philippines it has been in the direction of
giving it too quickly, not too slowly. A year from next April the first
legislative assembly for the islands will be held. On the sanity and
self-restraint of this body much will depend so far as the future
self-government of the islands is concerned.

The most encouraging feature of the whole situation has been the very
great interest taken by the common people in education and the great
increase in the number of enrolled students in the public schools. The
increase was from 300,000 to half a million pupils. The average
attendance is about 70 per cent. The only limit upon the number of
pupils seems to be the capacity of the government to furnish teachers
and school houses.

The agricultural conditions of the islands enforce more strongly than
ever the argument in favor of reducing the tariff on the products of the
Philippine Islands entering the United States. I earnestly recommend
that the tariff now imposed by the Dingley bill upon the products of the
Philippine Islands be entirely removed, except the tariff on sugar and
tobacco, and that that tariff be reduced to 25 per cent of the present
rates under the Dingley act; that after July 1, 1909, the tariff upon
tobacco and sugar produced in the Philippine Islands be entirely
removed, and that free trade between the islands and the United States
in the products of each country then be provided for by law.

A statute in force, enacted April 15, 1904, suspends the operation of
the coastwise laws of the United States upon the trade between the
Philippine Islands and the United States until July 1, 1906. I earnestly
recommend that this suspension be postponed until July 1, 1909. I think
it of doubtful utility to apply the coastwise laws to the trade between
the United States and the Philippines under any circumstances, because I
am convinced that it will do no good whatever to American bottoms, and
will only interfere and be an obstacle to the trade between the
Philippines and the United States, but if the coastwise law must be thus
applied, certainly it ought not to have effect until free trade is
enjoyed between the people of the United States and the people of the
Philippine Islands in their respective products.

I do not anticipate that free trade between the islands and the United
States will produce a revolution in the sugar and tobacco production of
the Philippine Islands. So primitive are the methods of agriculture in
the Philippine Islands, so slow is capital in going to the islands, so
many difficulties surround a large agricultural enterprise in the
islands, that it will be many, many years before the products of those
islands will have any effect whatever upon the markets of the United
States. The problem of labor is also a formidable one with the sugar and
tobacco producers in the islands. The best friends of the Filipino
people and the people themselves are utterly opposed to the admission of
Chinese coolie labor. Hence the only solution is the training of
Filipino labor, and this will take a long time. The enactment of a law
by the Congress of the United States making provision for free trade
between the islands and the United States, however, will be of great
importance from a political and sentimental standpoint; and, while its
actual benefit has doubtless been exaggerated by the people of the
islands, they will accept this measure of justice as an indication that
the people of the United States are anxious to aid the people of the
Philippine Islands in every way, and especially in the agricultural
development of their archipelago. It will aid the Filipinos without
injuring interests in America.

In my judgment immediate steps should be taken for the fortification of
Hawaii. This is the most important point in the Pacific to fortify in
order to conserve the interests of this country. It would be hard to
overstate the importance of this need. Hawaii is too heavily taxed. Laws
should be enacted setting aside for a period of, say, twenty years 75
per cent of the internal revenue and customs receipts from Hawaii as a
special fund to be expended in the islands for educational and public
buildings, and for harbor improvements and military and naval defenses.
It cannot be too often repeated that our aim must be to develop the
territory of Hawaii on traditional American lines. That territory has
serious commercial and industrial problems to reckon with; but no
measure of relief can be considered which looks to legislation admitting
Chinese and restricting them by statute to field labor and domestic
service. The status of servility can never again be tolerated on
American soil. We cannot concede that the proper solution of its
problems is special legislation admitting to Hawaii a class of laborers
denied admission to the other States and Territories. There are
obstacles, and great obstacles, in the way of building up a
representative American community in the Hawaiian Islands; but it is not
in the American character to give up in the face of difficulty. Many an
American Commonwealth has been built up against odds equal to those that
now confront Hawaii.

No merely half-hearted effort to meet its problems as other American
communities have met theirs can be accepted as final. Hawaii shall never
become a territory in which a governing class of rich planters exists by
means of coolie labor. Even if the rate of growth of the Territory is
thereby rendered slower, the growth must only take place by the
admission of immigrants fit in the end to assume the duties and burdens
of full American citizenship. Our aim must be to develop the Territory
on the same basis of stable citizenship as exists on this continent.

I earnestly advocate the adoption of legislation which will explicitly
confer American citizenship on all citizens of Porto Rico. There is, in
my judgment, no excuse for failure to do this. The harbor of San Juan
should be dredged and improved. The expenses of the Federal Court of
Porto Rico should be met from the Federal Treasury and not from the
Porto Rican treasury. The elections in Porto Rico should take place
every four years, and the Legislature should meet in session every two
years. The present form of government in Porto Rico, which provides for
the appointment by the President of the members of the Executive Council
or upper house of the Legislature, has proved satisfactory and has
inspired confidence in property owners and investors. I do not deem it
advisable at the present time to change this form in any material
feature. The problems and needs of the island are industrial and
commercial rather than political.

I wish to call the attention of the Congress to one question which
affects our insular possessions generally; namely, the need of an
increased liberality in the treatment of the whole franchise question in
these islands. In the proper desire to prevent the islands being
exploited by speculators and to have them develop in the interests of
their own people an error has been made in refusing to grant
sufficiently liberal terms to induce the investment of American capital
in the Philippines and in Porto Rico. Elsewhere in this message I have
spoken strongly against the jealousy of mere wealth, and especially of
corporate wealth as such. But it is particularly regrettable to allow
any such jealousy to be developed when we are dealing either with our
insular or with foreign affairs. The big corporation has achieved its
present position in the business world simply because it is the most
effective instrument in business competition. In foreign affairs we
cannot afford to put our people at a disadvantage with their competitors
by in any way discriminating against the efficiency of our business
organizations. In the same way we cannot afford to allow our insular
possessions to lag behind in industrial development from any twisted
jealousy of business success. It is, of course, a mere truism to say
that the business interests of the islands will only be developed if it
becomes the financial interest of somebody to develop them. Yet this
development is one of the things most earnestly to be wished for in the
interest of the islands themselves. We have been paying all possible
heed to the political and educational interests of the islands, but,
important though these objects are, it is not less important that we
should favor their industrial development. The Government can in certain
ways help this directly, as by building good roads; but the fundamental
and vital help must be given through the development of the industries
of the islands, and a most efficient means to this end is to encourage
big American corporations to start industries in them, and this means to
make it advantageous for them to do so. To limit the ownership of mining
claims, as has been done in the Philippines, is absurd. In both the
Philippines and Porto Rico the limit of holdings of land should be
largely raised.

I earnestly ask that Alaska be given an elective delegate. Some person
should be chosen who can speak with authority of the needs of the
Territory. The Government should aid in the construction of a railroad
from the Gulf of Alaska to the Yukon River, in American territory. In my
last two messages I advocated certain additional action on behalf of
Alaska. I shall not now repeat those recommendations, but I shall lay
all my stress upon the one recommendation of giving to Alaska some one
authorized to speak for it. I should prefer that the delegate was made
elective, but if this is not deemed wise, then make him appointive. At
any rate, give Alaska some person whose business it shall be to speak
with authority on her behalf to the Congress. The natural resources of
Alaska are great. Some of the chief needs of the peculiarly energetic,
self-reliant, and typically American white population of Alaska were set
forth in my last message. I also earnestly ask your attention to the
needs of the Alaskan Indians. All Indians who are competent should
receive the full rights of American citizenship. It is, for instance, a
gross and indefensible wrong to deny to such hard-working, decent-living
Indians as the Metlakahtlas the right to obtain licenses as captains,
pilots, and engineers; the right to enter mining claims, and to profit
by the homestead law. These particular Indians are civilized and are
competent and entitled to be put on the same basis with the white men
round about them.

I recommend that Indian Territory and Oklahoma be admitted as one State
and that New Mexico and Arizona be admitted as one State. There is no
obligation upon us to treat territorial subdivisions, which are matters
of convenience only, as binding us on the question of admission to
Statehood. Nothing has taken up more time in the Congress during the
past few years than the question as to the Statehood to be granted to
the four Territories above mentioned, and after careful consideration of
all that has been developed in the discussions of the question, I
recommend that they be immediately admitted as two States. There is no
justification for further delay; and the advisability of making the four
Territories into two States has been clearly established.

In some of the Territories the legislative assemblies issue licenses for
gambling. The Congress should by law forbid this practice, the harmful
results of which are obvious at a glance.

The treaty between the United States and the Republic of Panama, under
which the construction of the Panama Canal was made possible, went into
effect with its ratification by the United States Senate on February 23,
1904. The canal properties of the French Canal Company were transferred
to the United States on April 23, 1904, on payment of $40,000,000 to
that company. On April 1, 1905, the Commission was reorganized, and it
now consists of Theodore P. Shonts, Chairman; Charles E. Magoon,
Benjamin M. Harrod, Rear Admiral Mordecai T. Endicott, Brig. Gen. Peter
C. Hains, and Col. Oswald H. Ernst. John F. Stevens was appointed Chief
Engineer on July 1 last. Active work in canal construction, mainly
preparatory, has been in progress for less than a year and a half.
During that period two points about the canal have ceased to be open to
debate: First, the question of route; the canal will be built on the
Isthmus of Panama. Second, the question of feasibility; there are no
physical obstacles on this route that American engineering skill will
not be able to overcome without serious difficulty, or that will prevent
the completion of the canal within a reasonable time and at a reasonable
cost. This is virtually the unanimous testimony of the engineers who
have investigated the matter for the Government.

The point which remains unsettled is the question of type, whether the
canal shall be one of several locks above sea level, or at sea level
with a single tide lock. On this point I hope to lay before the Congress
at an early day the findings of the Advisory Board of American and
European Engineers, that at my invitation have been considering the
subject, together with the report of the Commission thereon, and such
comments thereon or recommendations in reference thereto as may seem
necessary.

The American people is pledged to the speediest possible construction of
a canal adequate to meet the demands which the commerce of the world
will make upon it, and I appeal most earnestly to the Congress to aid in
the fulfillment of the pledge. Gratifying progress has been made during
the past year, and especially during the past four months. The greater
part of the necessary preliminary work has been done. Actual work of
excavation could be begun only on a limited scale till the Canal Zone
was made a healthful place to live in and to work in. The Isthmus had to
be sanitated first. This task has been so thoroughly accomplished that
yellow fever has been virtually extirpated from the Isthmus and general
health conditions vastly improved. The same methods which converted the
island of Cuba from a pest hole, which menaced the health of the world,
into a healthful place of abode, have been applied on the Isthmus with
satisfactory results. There is no reason to doubt that when the plans
for water supply, paving, and sewerage of Panama and Colon and the large
labor camps have been fully carried out, the Isthmus will be, for the
tropics, an unusually healthy place of abode. The work is so far
advanced now that the health of all those employed in canal work is as
well guarded as it is on similar work in this country and elsewhere.

In addition to sanitating the Isthmus, satisfactory quarters are being
provided for employes and an adequate system of supplying them with
wholesome food at reasonable prices has been created. Hospitals have
been established and equipped that are without their superiors of their
kind anywhere. The country has thus been made fit to work in, and
provision has been made for the welfare and comfort of those who are to
do the work. During the past year a large portion of the plant with
which the work is to be done has been ordered. It is confidently
believed that by the middle of the approaching year a sufficient
proportion of this plant will have been installed to enable us to resume
the work of excavation on a large scale.

What is needed now and without delay is an appropriation by the Congress
to meet the current and accruing expenses of the commission. The first
appropriation of $10,000,000, out of the $135,000,000 authorized by the
Spooner act, was made three years ago. It is nearly exhausted. There is
barely enough of it remaining to carry the commission to the end of the
year. Unless the Congress shall appropriate before that time all work
must cease. To arrest progress for any length of time now, when matters
are advancing so satisfactorily, would be deplorable. There will be no
money with which to meet pay roll obligations and none with which to
meet bills coming due for materials and supplies; and there will be
demoralization of the forces, here and on the Isthmus, now working so
harmoniously and effectively, if there is delay in granting an emergency
appropriation. Estimates of the amount necessary will be found in the
accompanying reports of the Secretary of War and the commission.

I recommend more adequate provision than has been made heretofore for
the work of the Department of State. Within a few years there has been a
very great increase in the amount and importance of the work to be done
by that department, both in Washington and abroad. This has been caused
by the great increase of our foreign trade, the increase of wealth among
our people, which enables them to travel more generally than heretofore,
the increase of American capital which is seeking investment in foreign
countries, and the growth of our power and weight in the councils of the
civilized world. There has been no corresponding increase of facilities
for doing the work afforded to the department having charge of our
foreign relations.

Neither at home nor abroad is there a sufficient working force to do the
business properly. In many respects the system which was adequate to the
work of twenty-five years or even ten years ago, is inadequate now, and
should be changed. Our Consular force should be classified, and
appointments should be made to the several classes, with authority to
the Executive to assign the members of each class to duty at such posts
as the interests of the service require, instead of the appointments
being made as at present to specified posts. There should be an adequate
inspection service, so that the department may be able to inform itself
how the business of each Consulate is being done, instead of depending
upon casual private information or rumor. The fee system should be
entirely abolished, and a due equivalent made in salary to the officers
who now eke out their subsistence by means of fees. Sufficient provision
should be made for a clerical force in every Consulate composed entirely
of Americans, instead of the insufficient provision now made, which
compels the employment of great numbers of citizens of foreign countries
whose services can be obtained for less money. At a large part of our
Consulates the office quarters and the clerical force are inadequate to
the performance of the onerous duties imposed by the recent provisions
of our immigration laws as well as by our increasing trade. In many
parts of the world the lack of suitable quarters for our embassies,
legations, and Consulates detracts from the respect in which our
officers ought to be held, and seriously impairs their weight and
influence.

Suitable provision should be made for the expense of keeping our
diplomatic officers more fully informed of what is being done from day
to day in the progress of our diplomatic affairs with other countries.
The lack of such information, caused by insufficient appropriations
available for cable tolls and for clerical and messenger service,
frequently puts our officers at a great disadvantage and detracts from
their usefulness. The salary list should be readjusted. It does not now
correspond either to the importance of the service to be rendered and
the degrees of ability and experience required in the different
positions, or to the differences in the cost of living. In many cases
the salaries are quite inadequate.

***

State of the Union Address
Theodore Roosevelt
December 3, 1906

To the Senate and House of Representatives:

As a nation we still continue to enjoy a literally unprecedented
prosperity; and it is probable that only reckless speculation and
disregard of legitimate business methods on the part of the business
world can materially mar this prosperity.

No Congress in our time has done more good work of importance than the
present Congress. There were several matters left unfinished at your
last session, however, which I most earnestly hope you will complete
before your adjournment.

I again recommend a law prohibiting all corporations from contributing
to the campaign expenses of any party. Such a bill has already past one
House of Congress. Let individuals contribute as they desire; but let us
prohibit in effective fashion all corporations from making contributions
for any political purpose, directly or indirectly.

Another bill which has just past one House of the Congress and which it
is urgently necessary should be enacted into law is that conferring upon
the Government the right of appeal in criminal cases on questions of
law. This right exists in many of the States; it exists in the District
of Columbia by act of the Congress. It is of course not proposed that in
any case a verdict for the defendant on the merits should be set aside.
Recently in one district where the Government had indicted certain
persons for conspiracy in connection with rebates, the court sustained
the defendant's demurrer; while in another jurisdiction an indictment
for conspiracy to obtain rebates has been sustained by the court,
convictions obtained under it, and two defendants sentenced to
imprisonment. The two cases referred to may not be in real conflict with
each other, but it is unfortunate that there should even be an apparent
conflict. At present there is no way by which the Government can cause
such a conflict, when it occurs, to be solved by an appeal to a higher
court; and the wheels of justice are blocked without any real decision
of the question. I can not too strongly urge the passage of the bill in
question. A failure to pass it will result in seriously hampering the
Government in its effort to obtain justice, especially against wealthy
individuals or corporations who do wrong; and may also prevent the
Government from obtaining justice for wage-workers who are not
themselves able effectively to contest a case where the judgment of an
inferior court has been against them. I have specifically in view a
recent decision by a district judge leaving railway employees without
remedy for violation of a certain so-called labor statute. It seems an
absurdity to permit a single district judge, against what may be the
judgment of the immense majority of his colleagues on the bench, to
declare a law solemnly enacted by the Congress to be "unconstitutional,"
and then to deny to the Government the right to have the Supreme Court
definitely decide the question.

It is well to recollect that the real efficiency of the law often
depends not upon the passage of acts as to which there is great public
excitement, but upon the passage of acts of this nature as to which
there is not much public excitement, because there is little public
understanding of their importance, while the interested parties are
keenly alive to the desirability of defeating them. The importance of
enacting into law the particular bill in question is further increased
by the fact that the Government has now definitely begun a policy of
resorting to the criminal law in those trust and interstate commerce
cases where such a course offers a reasonable chance of success. At
first, as was proper, every effort was made to enforce these laws by
civil proceedings; but it has become increasingly evident that the
action of the Government in finally deciding, in certain cases, to
undertake criminal proceedings was justifiable; and though there have
been some conspicuous failures in these cases, we have had many
successes, which have undoubtedly had a deterrent effect upon
evil-doers, whether the penalty inflicted was in the shape of fine or
imprisonment--and penalties of both kinds have already been inflicted by
the courts. Of course, where the judge can see his way to inflict the
penalty of imprisonment the deterrent effect of the punishment on other
offenders is increased; but sufficiently heavy fines accomplish much.
Judge Holt, of the New York district court, in a recent decision
admirably stated the need for treating with just severity offenders of
this kind. His opinion runs in part as follows:

'The Government's evidence to establish the defendant's guilt was clear,
conclusive, and undisputed. The case was a flagrant one. The
transactions which took place under this illegal contract were very
large; the amounts of rebates returned were considerable; and the amount
of the rebate itself was large, amounting to more than one-fifth of the
entire tariff charge for the transportation of merchandise from this
city to Detroit. It is not too much to say, in my opinion, that if this
business was carried on for a considerable time on that basis--that is,
if this discrimination in favor of this particular shipper was made with
an 18 instead of a 23 cent rate and the tariff rate was maintained as
against their competitors--the result might be and not improbably would
be that their competitors would be driven out of business. This crime is
one which in its nature is deliberate and premeditated. I think over a
fortnight elapsed between the date of Palmer's letter requesting the
reduced rate and the answer of the railroad company deciding to grant
it, and then for months afterwards this business was carried on and
these claims for rebates submitted month after month and checks in
payment of them drawn month after month. Such a violation of the law, in
my opinion, in its essential nature, is a very much more heinous act
than the ordinary common, vulgar crimes which come before criminal
courts constantly for punishment and which arise from sudden passion or
temptation. This crime in this case was committed by men of education
and of large business experience, whose standing in the community was
such that they might have been expected to set an example of obedience
to law upon the maintenance of which alone in this country the security
of their property depends. It was committed on behalf of a great
railroad corporation, which, like other railroad corporations, has
received gratuitously from the State large and valuable privileges for
the public's convenience and its own, which performs quasi public
functions and which is charged with the highest obligation in the
transaction of its business to treat the citizens of this country alike,
and not to carry on its business with unjust discriminations between
different citizens or different classes of citizens. This crime in its
nature is one usually done with secrecy, and proof of which it is very
difficult to obtain. The interstate commerce act was past in 1887,
nearly twenty years ago. Ever since that time complaints of the granting
of rebates by railroads have been common, urgent, and insistent, and
although the Congress has repeatedly past legislation endeavoring to put
a stop to this evil, the difficulty of obtaining proof upon which to
bring prosecution in these cases is so great that this is the first case
that has ever been brought in this court, and, as I am formed, this case
and one recently brought in Philadelphia are the only cases that have
ever been brought in the eastern part of this country. In fact, but few
cases of this kind have ever been brought in this country, East or West.
Now, under these circumstances, I am forced to the conclusion, in a case
in which the proof is so clear and the facts are so flagrant, it is the
duty of the court to fix a penalty which shall in some degree be
commensurate with the gravity of the offense. As between the two
defendants, in my opinion, the principal penalty should be imposed on
the corporation. The traffic manager in this case, presumably, acted
without any advantage to himself and without any interest in the
transaction, either by the direct authority or in accordance with what
he understood to be the policy or the wishes of his employer.

"The sentence of this court in this case is, that the defendant Pomeroy,
for each of the six offenses upon which he has been convicted, be fined
the sum of $1,000, making six fines, amounting in all to the sum of
$6,000; and the defendant, The New York Central and Hudson River
Railroad Company, for each of the six crimes of which it has been
convicted, be fined the sum of $18,000, making six fines amounting in
the aggregate to the sum of $108,000, and judgment to that effect will
be entered in this case."

In connection with this matter, I would like to call attention to the
very unsatisfactory state of our criminal law, resulting in large part
from the habit of setting aside the judgments of inferior courts on
technicalities absolutely unconnected with the merits of the case, and
where there is no attempt to show that there has been any failure of
substantial justice. It would be well to enact a law providing something
to the effect that:

No judgment shall be set aside or new trial granted in any cause, civil
or criminal, on the ground of misdirection of the jury or the improper
admission or rejection of evidence, or for error as to any matter of
pleading or procedure unless, in the opinion of the court to which the
application is made, after an examination of the entire cause, it shall
affirmatively appear that the error complained of has resulted in a
miscarriage of justice.

In my last message I suggested the enactment of a law in connection with
the issuance of injunctions, attention having been sharply drawn to the
matter by the demand that the right of applying injunctions in labor
cases should be wholly abolished. It is at least doubtful whether a law
abolishing altogether the use of injunctions in such cases would stand
the test of the courts; in which case of course the legislation would be
ineffective. Moreover, I believe it would be wrong altogether to
prohibit the use of injunctions. It is criminal to permit sympathy for
criminals to weaken our hands in upholding the law; and if men seek to
destroy life or property by mob violence there should be no impairment
of the power of the courts to deal with them in the most summary and
effective way possible. But so far as possible the abuse of the power
should be provided against by some such law as I advocated last year.

In this matter of injunctions there is lodged in the hands of the
judiciary a necessary power which is nevertheless subject to the
possibility of grave abuse. It is a power that should be exercised with
extreme care and should be subject to the jealous scrutiny of all men,
and condemnation should be meted out as much to the judge who fails to
use it boldly when necessary as to the judge who uses it wantonly or
oppressively. Of course a judge strong enough to be fit for his office
will enjoin any resort to violence or intimidation, especially by
conspiracy, no matter what his opinion may be of the rights of the
original quarrel. There must be no hesitation in dealing with disorder.
But there must likewise be no such abuse of the injunctive power as is
implied in forbidding laboring men to strive for their own betterment in
peaceful and lawful ways; nor must the injunction be used merely to aid
some big corporation in carrying out schemes for its own aggrandizement.
It must be remembered that a preliminary injunction in a labor case, if
granted without adequate proof (even when authority can be found to
support the conclusions of law on which it is founded), may often settle
the dispute between the parties; and therefore if improperly granted may
do irreparable wrong. Yet there are many judges who assume a
matter-of-course granting of a preliminary injunction to be the ordinary
and proper judicial disposition of such cases; and there have
undoubtedly been flagrant wrongs committed by judges in connection with
labor disputes even within the last few years, although I think much
less often than in former years. Such judges by their unwise action
immensely strengthen the hands of those who are striving entirely to do
away with the power of injunction; and therefore such careless use of
the injunctive process tends to threaten its very existence, for if the
American people ever become convinced that this process is habitually
abused, whether in matters affecting labor or in matters affecting
corporations, it will be well-nigh impossible to prevent its abolition.

It may be the highest duty of a judge at any given moment to disregard,
not merely the wishes of individuals of great political or financial
power, but the overwhelming tide of public sentiment; and the judge who
does thus disregard public sentiment when it is wrong, who brushes aside
the plea of any special interest when the pleading is not rounded on
righteousness, performs the highest service to the country. Such a judge
is deserving of all honor; and all honor can not be paid to this wise
and fearless judge if we permit the growth of an absurd convention which
would forbid any criticism of the judge of another type, who shows
himself timid in the presence of arrogant disorder, or who on
insufficient grounds grants an injunction that does grave injustice, or
who in his capacity as a construer, and therefore in part a maker, of
the law, in flagrant fashion thwarts the cause of decent government. The
judge has a power over which no review can be exercised; he himself sits
in review upon the acts of both the executive and legislative branches
of the Government; save in the most extraordinary cases he is amenable
only at the bar of public opinion; and it is unwise to maintain that
public opinion in reference to a man with such power shall neither be
exprest nor led.

The best judges have ever been foremost to disclaim any immunity from
criticism. This has been true since the days of the great English Lord
Chancellor Parker, who said: "Let all people be at liberty to know what
I found my judgment upon; that, so when I have given it in any cause,
others may be at liberty to judge of me." The proprieties of the case
were set forth with singular clearness and good temper by Judge W. H.
Taft, when a United States circuit judge, eleven years ago, in 1895:

"The opportunity freely and publicly to criticize judicial action is of
vastly more importance to the body politic than the immunity of courts
and judges from unjust aspersions and attack. Nothing tends more to
render judges careful in their decisions and anxiously solicitous to do
exact justice than the consciousness that every act of theirs is to be
subjected to the intelligent scrutiny and candid criticism of their
fellow-men. Such criticism is beneficial in proportion as it is fair,
dispassionate, discriminating, and based on a knowledge of sound legal
principles. The comments made by learned text writers and by the acute
editors of the various law reviews upon judicial decisions are therefore
highly useful. Such critics constitute more or less impartial tribunals
of professional opinion before which each judgment is made to stand or
fall on its merits, and thus exert a strong influence to secure
uniformity of decision. But non-professional criticism also is by no
means without its uses, even if accompanied, as it often is, by a direct
attack upon the judicial fairness and motives of the occupants of the
bench; for if the law is but the essence of common sense, the protest of
many average men may evidence a defect in a judicial conclusion, though
based on the nicest legal reasoning and profoundest learning. The two
important elements of moral character in a judge are an earnest desire
to reach a just conclusion and courage to enforce it. In so far as fear
of public comment does not affect the courage of a judge, but only spurs
him on to search his conscience and to reach the result which approves
itself to his inmost heart such comment serves a useful purpose. There
are few men, whether they are judges for life or for a shorter term, who
do not prefer to earn and hold the respect of all, and who can not be
reached and made to pause and deliberate by hostile public criticism. In
the case of judges having a life tenure, indeed their very independence
makes the right freely to comment on their decisions of greater
importance, because it is the only practical and available instrument in
the hands of a free people to keep such judges alive to the reasonable
demands of those they serve.

"On the other hand, the danger of destroying the proper influence of
judicial decisions by creating unfounded prejudices against the courts
justifies and requires that unjust attacks shall be met and answered.
Courts must ultimately rest their defense upon the inherent strength of
the opinions they deliver as the ground for their conclusions and must
trust to the calm and deliberate judgment of all the people as their
best vindication."

There is one consideration which should be taken into account by the
good people who carry a sound proposition to an excess in objecting to
any criticism of a judge's decision. The instinct of the American people
as a whole is sound in this matter. They will not subscribe to the
doctrine that any public servant is to be above all criticism. If the
best citizens, those most competent to express their judgment in such
matters, and above all those belonging to the great and honorable
profession of the bar, so profoundly influential in American life, take
the position that there shall be no criticism of a judge under any
circumstances, their view will not be accepted by the American people as
a whole. In such event the people will turn to, and tend to accept as
justifiable, the intemperate and improper criticism uttered by unworthy
agitators. Surely it is a misfortune to leave to such critics a
function, right, in itself, which they are certain to abuse. Just and
temperate criticism, when necessary, is a safeguard against the
acceptance by the people as a whole of that intemperate antagonism
towards the judiciary which must be combated by every right-thinking
man, and which, if it became widespread among the people at large, would
constitute a dire menace to the Republic.

In connection with the delays of the law, I call your attention and the
attention of the Nation to the prevalence of crime among us, and above
all to the epidemic of lynching and mob violence that springs up, now in
one part of our country, now in another. Each section, North, South,
East, or West, has its own faults; no section can with wisdom spend its
time jeering at the faults of another section; it should be busy trying
to amend its own shortcomings. To deal with the crime of corruption It
is necessary to have an awakened public conscience, and to supplement
this by whatever legislation will add speed and certainty in the
execution of the law. When we deal with lynching even mote is necessary.
A great many white men are lynched, but the crime is peculiarly frequent
in respect to black men. The greatest existing cause of lynching is the
perpetration, especially by black men, of the hideous crime of rape--the
most abominable in all the category of crimes, even worse than murder.
Mobs frequently avenge the commission of this crime by themselves
torturing to death the man committing it; thus avenging in bestial
fashion a bestial deed, and reducing themselves to a level with the
criminal.

Lawlessness grows by what it feeds upon; and when mobs begin to lynch
for rape they speedily extend the sphere of their operations and lynch
for many other kinds of crimes, so that two-thirds of the lynchings are
not for rape at all; while a considerable proportion of the individuals
lynched are innocent of all crime. Governor Candler, of Georgia, stated
on one occasion some years ago: "I can say of a verity that I have,
within the last month, saved the lives of half a dozen innocent Negroes
who were pursued by the mob, and brought them to trial in a court of law
in which they were acquitted." As Bishop Galloway, of Mississippi, has
finely said: "When the rule of a mob obtains, that which distinguishes a
high civilization is surrendered. The mob which lynches a negro charged
with rape will in a little while lynch a white man suspected of crime.
Every Christian patriot in America needs to lift up his voice in loud
and eternal protest against the mob spirit that is threatening the
integrity of this Republic." Governor Jelks, of Alabama, has recently
spoken as follows: "The lynching of any person for whatever crime is
inexcusable anywhere--it is a defiance of orderly government; but the
killing of innocent people under any provocation is infinitely more
horrible; and yet innocent people are likely to die when a mob's
terrible lust is once aroused. The lesson is this: No good citizen can
afford to countenance a defiance of the statutes, no matter what the
provocation. The innocent frequently suffer, and, it is my observation,
more usually suffer than the guilty. The white people of the South
indict the whole colored race on the ground that even the better
elements lend no assistance whatever in ferreting out criminals of their
own color. The respectable colored people must learn not to harbor their
criminals, but to assist the officers in bringing them to justice. This
is the larger crime, and it provokes such atrocious offenses as the one
at Atlanta. The two races can never get on until there is an
understanding on the part of both to make common cause with the
law-abiding against criminals of any color."

Moreover, where any crime committed by a member of one race against a
member of another race is avenged in such fashion that it seems as if
not the individual criminal, but the whole race, is attacked, the result
is to exasperate to the highest degree race feeling. There is but one
safe rule in dealing with black men as with white men; it is the same
rule that must be applied in dealing with rich men and poor men; that
is, to treat each man, whatever his color, his creed, or his social
position, with even-handed justice on his real worth as a man. White
people owe it quite as much to themselves as to the colored race to
treat well the colored man who shows by his life that he deserves such
treatment; for it is surely the highest wisdom to encourage in the
colored race all those individuals who are honest, industrious,
law-abiding, and who therefore make good and safe neighbors and
citizens. Reward or punish the individual on his merits as an
individual. Evil will surely come in the end to both races if we
substitute for this just rule the habit of treating all the members of
the race, good and bad, alike. There is no question of "social equality"
or "negro domination" involved; only the question of relentlessly
punishing bad men, and of securing to the good man the right to his
life, his liberty, and the pursuit of his happiness as his own qualities
of heart, head, and hand enable him to achieve it.

Every colored man should realize that the worst enemy of his race is the
negro criminal, and above all the negro criminal who commits the
dreadful crime of rape; and it should be felt as in the highest degree
an offense against the whole country, and against the colored race in
particular, for a colored man to fail to help the officers of the law in
hunting down with all possible earnestness and zeal every such infamous
offender. Moreover, in my judgment, the crime of rape should always be
punished with death, as is the case with murder; assault with intent to
commit rape should be made a capital crime, at least in the discretion
of the court; and provision should be made by which the punishment may
follow immediately upon the heels of the offense; while the trial should
be so conducted that the victim need not be wantonly shamed while giving
testimony, and that the least possible publicity shall be given to the
details.

The members of the white race on the other hand should understand that
every lynching represents by just so much a loosening of the bands of
civilization; that the spirit of lynching inevitably throws into
prominence in the community all the foul and evil creatures who dwell
therein. No man can take part in the torture of a human being without
having his own moral nature permanently lowered. Every lynching means
just so much moral deterioration in all the children who have any
knowledge of it, and therefore just so much additional trouble for the
next generation of Americans.

Let justice be both sure and swift; but let it be justice under the law,
and not the wild and crooked savagery of a mob.

There is another matter which has a direct bearing upon this matter of
lynching and of the brutal crime which sometimes calls it forth and at
other times merely furnishes the excuse for its existence. It is out of
the question for our people as a whole permanently to rise by treading
down any of their own number. Even those who themselves for the moment
profit by such maltreatment of their fellows will in the long run also
suffer. No more shortsighted policy can be imagined than, in the fancied
interest of one class, to prevent the education of another class. The
free public school, the chance for each boy or girl to get a good
elementary education, lies at the foundation of our whole political
situation. In every community the poorest citizens, those who need the
schools most, would be deprived of them if they only received school
facilities proportioned to the taxes they paid. This is as true of one
portion of our country as of another. It is as true for the negro as for
the white man. The white man, if he is wise, will decline to allow the
Negroes in a mass to grow to manhood and womanhood without education.
Unquestionably education such as is obtained in our public schools does
not do everything towards making a man a good citizen; but it does much.
The lowest and most brutal criminals, those for instance who commit the
crime of rape, are in the great majority men who have had either no
education or very little; just as they are almost invariably men who own
no property; for the man who puts money by out of his earnings, like the
man who acquires education, is usually lifted above mere brutal
criminality. Of course the best type of education for the colored man,
taken as a whole, is such education as is conferred in schools like
Hampton and Tuskegee; where the boys and girls, the young men and young
women, are trained industrially as well as in the ordinary public school
branches. The graduates of these schools turn out well in the great
majority of cases, and hardly any of them become criminals, while what
little criminality there is never takes the form of that brutal violence
which invites lynch law. Every graduate of these schools--and for the
matter of that every other colored man or woman--who leads a life so
useful and honorable as to win the good will and respect of those whites
whose neighbor he or she is, thereby helps the whole colored race as it
can be helped in no other way; for next to the negro himself, the man
who can do most to help the negro is his white neighbor who lives near
him; and our steady effort should be to better the relations between the
two. Great though the benefit of these schools has been to their colored
pupils and to the colored people, it may well be questioned whether the
benefit, has not been at least as great to the white people among whom
these colored pupils live after they graduate.

Be it remembered, furthermore, that the individuals who, whether from
folly, from evil temper, from greed for office, or in a spirit of mere
base demagogy, indulge in the inflammatory and incendiary speeches and
writings which tend to arouse mobs and to bring about lynching, not only
thus excite the mob, but also tend by what criminologists call
"suggestion," greatly to increase the likelihood of a repetition of the
very crime against which they are inveighing. When the mob is composed
of the people of one race and the man lynched is of another race, the
men who in their speeches and writings either excite or justify the
action tend, of course, to excite a bitter race feeling and to cause the
people of the opposite race to lose sight of the abominable act of the
criminal himself; and in addition, by the prominence they give to the
hideous deed they undoubtedly tend to excite in other brutal and
depraved natures thoughts of committing it. Swift, relentless, and
orderly punishment under the law is the only way by which criminality of
this type can permanently be supprest.

In dealing with both labor and capital, with the questions affecting
both corporations and trades unions, there is one matter more important
to remember than aught else, and that is the infinite harm done by
preachers of mere discontent. These are the men who seek to excite a
violent class hatred against all men of wealth. They seek to turn wise
and proper movements for the better control of corporations and for
doing away with the abuses connected with wealth, into a campaign of
hysterical excitement and falsehood in which the aim is to inflame to
madness the brutal passions of mankind. The sinister demagogs and
foolish visionaries who are always eager to undertake such a campaign of
destruction sometimes seek to associate themselves with those working
for a genuine reform in governmental and social methods, and sometimes
masquerade as such reformers. In reality they are the worst enemies of
the cause they profess to advocate, just as the purveyors of sensational
slander in newspaper or magazine are the worst enemies of all men who
are engaged in an honest effort to better what is bad in our social and
governmental conditions. To preach hatred of the rich man as such, to
carry on a campaign of slander and invective against him, to seek to
mislead and inflame to madness honest men whose lives are hard and who
have not the kind of mental training which will permit them to
appreciate the danger in the doctrines preached--all this is to commit a
crime against the body politic and to be false to every worthy principle
and tradition of American national life. Moreover, while such preaching
and such agitation may give a livelihood and a certain notoriety to some
of those who take part in it, and may result in the temporary political
success of others, in the long run every such movement will either fail
or else will provoke a violent reaction, which will itself result not
merely in undoing the mischief wrought by the demagog and the agitator,
but also in undoing the good that the honest reformer, the true upholder
of popular rights, has painfully and laboriously achieved. Corruption is
never so rife as in communities where the demagog and the agitator bear
full sway, because in such communities all moral bands become loosened,
and hysteria and sensationalism replace the spirit of sound judgment and
fair dealing as between man and man. In sheer revolt against the squalid
anarchy thus produced men are sure in the end to turn toward any leader
who can restore order, and then their relief at being free from the
intolerable burdens of class hatred, violence, and demagogy is such that
they can not for some time be aroused to indignation against misdeeds by
men of wealth; so that they permit a new growth of the very abuses which
were in part responsible for the original outbreak. The one hope for
success for our people lies in a resolute and fearless, but sane and
cool-headed, advance along the path marked out last year by this very
Congress. There must be a stern refusal to be misled into following
either that base creature who appeals and panders to the lowest
instincts and passions in order to arouse one set of Americans against
their fellows, or that other creature, equally base but no baser, who in
a spirit of greed, or to accumulate or add to an already huge fortune,
seeks to exploit his fellow Americans with callous disregard to their
welfare of soul and body. The man who debauches others in order to
obtain a high office stands on an evil equality of corruption with the
man who debauches others for financial profit; and when hatred is sown
the crop which springs up can only be evil.

The plain people who think--the mechanics, farmers, merchants, workers
with head or hand, the men to whom American traditions are dear, who
love their country and try to act decently by their neighbors, owe it to
themselves to remember that the most damaging blow that can be given
popular government is to elect an unworthy and sinister agitator on a
platform of violence and hypocrisy. Whenever such an issue is raised in
this country nothing can be gained by flinching from it, for in such
case democracy is itself on trial, popular self-government under
republican forms is itself on trial. The triumph of the mob is just as
evil a thing as the triumph of the plutocracy, and to have escaped one
danger avails nothing whatever if we succumb to the other. In the end
the honest man, whether rich or poor, who earns his own living and tries
to deal justly by his fellows, has as much to fear from the insincere
and unworthy demagog, promising much and performing nothing, or else
performing nothing but evil, who would set on the mob to plunder the
rich, as from the crafty corruptionist, who, for his own ends, would
permit the common people to be exploited by the very wealthy. If we ever
let this Government fall into the hands of men of either of these two
classes, we shall show ourselves false to America's past. Moreover, the
demagog and the corruptionist often work hand in hand. There are at this
moment wealthy reactionaries of such obtuse morality that they regard
the public servant who prosecutes them when they violate the law, or who
seeks to make them bear their proper share of the public burdens, as
being even more objectionable than the violent agitator who hounds on
the mob to plunder the rich. There is nothing to choose between such a
reactionary and such an agitator; fundamentally they are alike in their
selfish disregard of the rights of others; and it is natural that they
should join in opposition to any movement of which the aim is fearlessly
to do exact and even justice to all.

I call your attention to the need of passing the bill limiting the
number of hours of employment of railroad employees. The measure is a
very moderate one and I can conceive of no serious objection to it.
Indeed, so far as it is in our power, it should be our aim steadily to
reduce the number of hours of labor, with as a goal the general
introduction of an eight-hour day. There are industries in which it is
not possible that the hours of labor should be reduced; just as there
are communities not far enough advanced for such a movement to be for
their good, or, if in the Tropics, so situated that there is no analogy
between their needs and ours in this matter. On the Isthmus of Panama,
for instance, the conditions are in every way so different from what
they are here that an eight-hour day would be absurd; just as it is
absurd, so far as the Isthmus is concerned, where white labor can not be
employed, to bother as to whether the necessary work is done by alien
black men or by alien yellow men. But the wageworkers of the United
States are of so high a grade that alike from the merely industrial
standpoint and from the civic standpoint it should be our object to do
what we can in the direction of securing the general observance of an
eight-hour day. Until recently the eight-hour law on our Federal statute
books has been very scantily observed. Now, however, largely through the
instrumentality of the Bureau of Labor, it is being rigidly enforced,
and I shall speedily be able to say whether or not there is need of
further legislation in reference thereto; .for our purpose is to see it
obeyed in spirit no less than in letter. Half holidays during summer
should be established for Government employees; it is as desirable for
wageworkers who toil with their hands as for salaried officials whose
labor is mental that there should be a reasonable amount of holiday.

The Congress at its last session wisely provided for a truant court for
the District of Columbia; a marked step in advance on the path of
properly caring for the children. Let me again urge that the Congress
provide for a thorough investigation of the conditions of child labor
and of the labor of women in the United States. More and more our people
are growing to recognize the fact that the questions which are not
merely of industrial but of social importance outweigh all others; and
these two questions most emphatically come in the category of those
which affect in the most far-reaching way the home life of the Nation.
The horrors incident to the employment of young children in factories or
at work anywhere are a blot on our civilization. It is true that each.
State must ultimately settle the question in its own way; but a thorough
official investigation of the matter, with the results published
broadcast, would greatly help toward arousing the public conscience and
securing unity of State action in the matter. There is, however, one law
on the subject which should be enacted immediately, because there is no
need for an investigation in reference thereto, and the failure to enact
it is discreditable to the National Government. A drastic and
thoroughgoing child-labor law should be enacted for the District of
Columbia and the Territories.

Among the excellent laws which the Congress past at the last session was
an employers' liability law. It was a marked step in advance to get the
recognition of employers' liability on the statute books; but the law
did not go far enough. In spite of all precautions exercised by
employers there are unavoidable accidents and even deaths involved in
nearly every line of business connected with the mechanic arts. This
inevitable sacrifice of life may be reduced to a minimum, but it can not
be completely eliminated. It is a great social injustice to compel the
employee, or rather the family of the killed or disabled victim, to bear
the entire burden of such an inevitable sacrifice. In other words,
society shirks its duty by laying the whole cost on the victim, whereas
the injury comes from what may be called the legitimate risks of the
trade. Compensation for accidents or deaths due in any line of industry
to the actual conditions under which that industry is carried on, should
be paid by that portion of the community for the benefit of which the
industry is carried on--that is, by those who profit by the industry. If
the entire trade risk is placed upon the employer he will promptly and
properly add it to the legitimate cost of production and assess it
proportionately upon the consumers of his commodity. It is therefore
clear to my mind that the law should place this entire "risk of a trade"
upon the employer. Neither the Federal law, nor, as far as I am
informed, the State laws dealing with the question of employers'
liability are sufficiently thoroughgoing. The Federal law should of
course include employees in navy-yards, arsenals, and the like.

The commission appointed by the President October 16, 1902, at the
request of both the anthracite coal operators and miners, to inquire
into, consider, and pass upon the questions in controversy in connection
with the strike in the anthracite regions of Pennsylvania and the causes
out of which the controversy arose, in their report, findings, and award
exprest the belief "that the State and Federal governments should
provide the machinery for what may be called the compulsory
investigation of controversies between employers and employees when they
arise." This expression of belief is deserving of the favorable
consideration of the Congress and the enactment of its provisions into
law. A bill has already been introduced to this end.

Records show that during the twenty years from January 1, 1881, to,
December 31, 1900, there were strikes affecting 117,509 establishments,
and 6,105,694 employees were thrown out of employment. During the same
period there were 1,005 lockouts, involving nearly 10,000
establishments, throwing over one million people out of employment.
These strikes and lockouts involved an estimated loss to employees of
$307,000,000 and to employers of $143,000,000, a total of $450,000,000.
The public suffered directly and indirectly probably as great additional
loss. But the money loss, great as it was, did not measure the anguish
and suffering endured by the wives and children of employees whose pay
stopt when their work stopt, or the disastrous effect of the strike or
lockout upon the business of employers, or the increase in the cost of
products and the inconvenience and loss to the public.

Many of these strikes and lockouts would not have occurred had the
parties to the dispute been required to appear before an unprejudiced
body representing the nation and, face to face, state the reasons for
their contention. In most instances the dispute would doubtless be found
to be due to a misunderstanding by each of the other's rights,
aggravated by an unwillingness of either party to accept as true the
statements of the other as to the justice or injustice of the matters in
dispute. The exercise of a judicial spirit by a disinterested body
representing the Federal Government, such as would be provided by a
commission on conciliation and arbitration, would tend to create an
atmosphere of friendliness and conciliation between contending parties;
and the giving each side an equal opportunity to present fully its case
in the presence of the other would prevent many disputes from developing
into serious strikes or lockouts, and, in other cases, would enable the
commission to persuade the opposing parties to come to terms.

In this age of great corporate and labor combinations, neither employers
nor employees should be left completely at the mercy of the stronger
party to a dispute, regardless of the righteousness of their respective
claims. The proposed measure would be in the line of securing
recognition of the fact that in many strikes the public has itself an
interest which can not wisely be disregarded; an interest not merely of
general convenience, for the question of a just and proper public policy
must also be considered. In all legislation of this kind it is well to
advance cautiously, testing each step by the actual results; the step
proposed can surely be safely taken, for the decisions of the commission
would not bind the parties in legal fashion, and yet would give a chance
for public opinion to crystallize and thus to exert its full force for
the right.

It is not wise that the Nation should alienate its remaining coal lands.
I have temporarily withdrawn from settlement all the lands which the
Geological Survey has indicated as containing, or in all probability
containing, coal. The question, however, can be properly settled only by
legislation, which in my judgment should provide for the withdrawal of
these lands from sale or from entry, save in certain especial
circumstances. The ownership would then remain in the United States,
which should not, however, attempt to work them, but permit them to be
worked by private individuals under a royalty system, the Government
keeping such control as to permit it to see that no excessive price was
charged consumers. It would, of course, be as necessary to supervise the
rates charged by the common carriers to transport the product as the
rates charged by those who mine it; and the supervision must extend to
the conduct of the common carriers, so that they shall in no way favor
one competitor at the expense of another. The withdrawal of these coal
lands would constitute a policy analogous to that which has been
followed in withdrawing the forest lands from ordinary settlement. The
coal, like the forests, should be treated as the property of the public
and its disposal should be under conditions which would inure to the
benefit of the public as a whole.

The present Congress has taken long strides in the direction of securing
proper supervision and control by the National Government over
corporations engaged in interstate business and the enormous majority of
corporations of any size are engaged in interstate business. The passage
of the railway rate bill, and only to a less degree the passage of the
pure food bill, and the provision for increasing and rendering more
effective national control over the beef-packing industry, mark an
important advance in the proper direction. In the short session it will
perhaps be difficult to do much further along this line; and it may be
best to wait until the laws have been in operation for a number of
months before endeavoring to increase their scope, because only
operation will show with exactness their merits and their shortcomings
and thus give opportunity to define what further remedial legislation is
needed. Yet in my judgment it will in the end be advisable in connection
with the packing house inspection law to provide for putting a date on
the label and for charging the cost of inspection to the packers. All
these laws have already justified their enactment. The interstate
commerce law, for instance, has rather amusingly falsified the
predictions, both of those who asserted that it would ruin the railroads
and of those who asserted that it did not go far enough and would
accomplish nothing. During the last five months the railroads have shown
increased earnings and some of them unusual dividends; while during the
same period the mere taking effect of the law has produced an
unprecedented, a hitherto unheard of, number of voluntary reductions in
freights and fares by the railroads. Since the founding of the
Commission there has never been a time of equal length in which anything
like so many reduced tariffs have been put into effect. On August 27,
for instance, two days before the new law went into effect, the
Commission received notices of over five thousand separate tariffs which
represented reductions from previous rates.

It must not be supposed, however, that with the passage of these laws it
will be possible to stop progress along the line of increasing the power
of the National Government over the use of capital interstate commerce.
For example, there will ultimately be need of enlarging the powers of
the Interstate Commerce Commission along several different lines, so as
to give it a larger and more efficient control over the railroads.

It can not too often be repeated that experience has conclusively shown
the impossibility of securing by the actions of nearly half a hundred
different State legislatures anything but ineffective chaos in the way
of dealing with the great corporations which do not operate exclusively
within the limits of any one State. In some method, whether by a
national license law or in other fashion, we must exercise, and that at
an early date, a far more complete control than at present over these
great corporations--a control that will among other things prevent the
evils of excessive overcapitalization, and that will compel the
disclosure by each big corporation of its stockholders and of its
properties and business, whether owned directly or through subsidiary or
affiliated corporations. This will tend to put a stop to the securing of
inordinate profits by favored individuals at the expense whether of the
general public, the stockholders, or the wageworkers. Our effort should
be not so much to prevent consolidation as such, but so to supervise and
control it as to see that it results in no harm to the people. The
reactionary or ultraconservative apologists for the misuse of wealth
assail the effort to secure such control as a step toward socialism. As
a matter of fact it is these reactionaries and ultraconservatives who
are themselves most potent in increasing socialistic feeling. One of the
most efficient methods of averting the consequences of a dangerous
agitation, which is 80 per cent wrong, is to remedy the 20 per cent of
evil as to which the agitation is well rounded. The best way to avert
the very undesirable move for the government ownership of railways is to
secure by the Government on behalf of the people as a whole such
adequate control and regulation of the great interstate common carriers
as will do away with the evils which give rise to the agitation against
them. So the proper antidote to the dangerous and wicked agitation
against the men of wealth as such is to secure by proper legislation and
executive action the abolition of the grave abuses which actually do
obtain in connection with the business use of wealth under our present
system--or rather no system--of failure to exercise any adequate control
at all. Some persons speak as if the exercise of such governmental
control would do away with the freedom of individual initiative and
dwarf individual effort. This is not a fact. It would be a veritable
calamity to fail to put a premium upon individual initiative, individual
capacity and effort; upon the energy, character, and foresight which it
is so important to encourage in the individual. But as a matter of fact
the deadening and degrading effect of pure socialism, and especially of
its extreme form communism, and the destruction of individual character
which they would bring about, are in part achieved by the wholly
unregulated competition which results in a single individual or
corporation rising at the expense of all others until his or its rise
effectually checks all competition and reduces former competitors to a
position of utter inferiority and subordination.

In enacting and enforcing such legislation as this Congress already has
to its credit, we are working on a coherent plan, with the steady
endeavor to secure the needed reform by the joint action of the moderate
men, the plain men who do not wish anything hysterical or dangerous, but
who do intend to deal in resolute common-sense fashion with the real and
great evils of the present system. The reactionaries and the violent
extremists show symptoms of joining hands against us. Both assert, for
instance, that, if logical, we should go to government ownership of
railroads and the like; the reactionaries, because on such an issue they
think the people would stand with them, while the extremists care rather
to preach discontent and agitation than to achieve solid results. As a
matter of fact, our position is as remote from that of the Bourbon
reactionary as from that of the impracticable or sinister visionary. We
hold that the Government should not conduct the business of the nation,
but that it should exercise such supervision as will insure its being
conducted in the interest of the nation. Our aim is, so far as may be,
to secure, for all decent, hard working men, equality of opportunity and
equality of burden.

The actual working of our laws has shown that the effort to prohibit all
combination, good or bad, is noxious where it is not ineffective.
Combination of capital like combination of labor is a necessary element
of our present industrial system. It is not possible completely to
prevent it; and if it were possible, such complete prevention would do
damage to the body politic. What we need is not vainly to try to prevent
all combination, but to secure such rigorous and adequate control and
supervision of the combinations as to prevent their injuring the public,
or existing in such form as inevitably to threaten injury--for the mere
fact that a combination has secured practically complete control of a
necessary of life would under any circumstances show that such
combination was to be presumed to be adverse to the public interest. It
is unfortunate that our present laws should forbid all combinations,
instead of sharply discriminating between those combinations which do
good and those combinations which do evil. Rebates, for instance, are as
often due to the pressure of big shippers (as was shown in the
investigation of the Standard Oil Company and as has been shown since by
the investigation of the tobacco and sugar trusts) as to the initiative
of big railroads. Often railroads would like to combine for the purpose
of preventing a big shipper from maintaining improper advantages at the
expense of small shippers and of the general public. Such a combination,
instead of being forbidden by law, should be favored. In other words, it
should be permitted to railroads to make agreements, provided these
agreements were sanctioned by the Interstate Commerce Commission and
were published. With these two conditions complied with it is impossible
to see what harm such a combination could do to the public at large. It
is a public evil to have on the statute books a law incapable of full
enforcement because both judges and juries realize that its full
enforcement would destroy the business of the country; for the result is
to make decent railroad men violators of the law against their will, and
to put a premium on the behavior of the wilful wrongdoers. Such a result
in turn tends to throw the decent man and the wilful wrongdoer into
close association, and in the end to drag down the former to the
latter's level; for the man who becomes a lawbreaker in one way
unhappily tends to lose all respect for law and to be willing to break
it in many ways. No more scathing condemnation could be visited upon a
law than is contained in the words of the Interstate Commerce Commission
when, in commenting upon the fact that the numerous joint traffic
associations do technically violate the law, they say: "The decision of
the United States Supreme Court in the Trans-Missouri case and the Joint
Traffic Association case has produced no practical effect upon the
railway operations of the country. Such associations, in fact, exist now
as they did before these decisions, and with the same general effect. In
justice to all parties, we ought probably to add that it is difficult to
see how our interstate railways could be operated with due regard to the
interest of the shipper and the railway without concerted action of the
kind afforded through these associations."

This means that the law as construed by the Supreme Court is such that
the business of the country can not be conducted without breaking it. I
recommend that you give careful and early consideration to this subject,
and if you find the opinion of the Interstate Commerce Commission
justified, that you amend the law so as to obviate the evil disclosed.

The question of taxation is difficult in any country, but it is
especially difficult in ours with its Federal system of government. Some
taxes should on every ground be levied in a small district for use in
that district. Thus the taxation of real estate is peculiarly one for
the immediate locality in which the real estate is found. Again, there
is no more legitimate tax for any State than a tax on the franchises
conferred by that State upon street railroads and similar corporations
which operate wholly within the State boundaries, sometimes in one and
sometimes in several municipalities or other minor divisions of the
State. But there are many kinds of taxes which can only be levied by the
General Government so as to produce the best results, because, among
other reasons, the attempt to impose them in one particular State too
often results merely in driving the corporation or individual affected
to some other locality or other State. The National Government has long
derived its chief revenue from a tariff on imports and from an internal
or excise tax. In addition to these there is every reason why, when next
our system of taxation is revised, the National Government should impose
a graduated inheritance tax, and, if possible, a graduated income tax.
The man of great wealth owes a peculiar obligation to the State, because
he derives special advantages from the mere existence of government. Not
only should he recognize this obligation in the way he leads his daily
life and in the way he earns and spends his money, but it should also be
recognized by the way in which he pays for the protection the State
gives him. On the one hand, it is desirable that he should assume his
full and proper share of the burden of taxation; on the other hand, it
is quite as necessary that in this kind of taxation, where the men who
vote the tax pay but little of it, there should be clear recognition of
the danger of inaugurating any such system save in a spirit of entire
justice and moderation. Whenever we, as a people, undertake to remodel
our taxation system along the lines suggested, we must make it clear
beyond peradventure that our aim is to distribute the burden of
supporting the Government more equitably than at present; that we intend
to treat rich man and poor man on a basis of absolute equality, and that
we regard it as equally fatal to true democracy to do or permit
injustice to the one as to do or permit injustice to the other.

I am well aware that such a subject as this needs long and careful study
in order that the people may become familiar with what is proposed to be
done, may clearly see the necessity of proceeding with wisdom and
self-restraint, and may make up their minds just how far they are
willing to go in the matter; while only trained legislators can work out
the project in necessary detail. But I feel that in the near future our
national legislators should enact a law providing for a graduated
inheritance tax by which a steadily increasing rate of duty should be
put upon all moneys or other valuables coming by gift, bequest, or
devise to any individual or corporation. It may be well to make the tax
heavy in proportion as the individual benefited is remote of kin. In any
event, in my judgment the pro rata of the tax should increase very
heavily with the increase of the amount left to any one individual after
a certain point has been reached. It is most desirable to encourage
thrift and ambition, and a potent source of thrift and ambition is the
desire on the part of the breadwinner to leave his children well off.
This object can be attained by making the tax very small on moderate
amounts of property left; because the prime object should be to put a
constantly increasing burden on the inheritance of those swollen
fortunes which it is certainly of no benefit to this country to
perpetuate.

There can be no question of the ethical propriety of the Government thus
determining the conditions upon which any gift or inheritance should be
received. Exactly how far the inheritance tax would, as an incident,
have the effect of limiting the transmission by devise or gift of the
enormous fortunes in question it is not necessary at present to discuss.
It is wise that progress in this direction should be gradual. At first a
permanent national inheritance tax, while it might be more substantial
than any such tax has hitherto been, need not approximate, either in
amount or in the extent of the increase by graduation, to what such a
tax should ultimately be.

This species of tax has again and again been imposed, although only
temporarily, by the National Government. It was first imposed by the act
of July 6, 1797, when the makers of the Constitution were alive and at
the head of affairs. It was a graduated tax; though small in amount, the
rate was increased with the amount left to any individual, exceptions
being made in the case of certain close kin. A similar tax was again
imposed by the act of July 1, 1862; a minimum sum of one thousand
dollars in personal property being excepted from taxation, the tax then
becoming progressive according to the remoteness of kin. The war-revenue
act of June 13, 1898, provided for an inheritance tax on any sum
exceeding the value of ten thousand dollars, the rate of the tax
increasing both in accordance with the amounts left and in accordance
with the legatee's remoteness of kin. The Supreme Court has held that
the succession tax imposed at the time of the Civil War was not a direct
tax but an impost or excise which was both constitutional and valid.
More recently the Court, in an opinion delivered by Mr. Justice White,
which contained an exceedingly able and elaborate discussion of the
powers of the Congress to impose death duties, sustained the
constitutionality of the inheritance-tax feature of the war-revenue act
of 1898.

In its incidents, and apart from the main purpose of raising revenue, an
income tax stands on an entirely different footing from an inheritance
tax; because it involves no question of the perpetuation of fortunes
swollen to an unhealthy size. The question is in its essence a question
of the proper adjustment of burdens to benefits. As the law now stands
it is undoubtedly difficult to devise a national income tax which shall
be constitutional. But whether it is absolutely impossible is another
question; and if possible it is most certainly desirable. The first
purely income-tax law was past by the Congress in 1861, but the most
important law dealing with the subject was that of 1894. This the court
held to be unconstitutional.

The question is undoubtedly very intricate, delicate, and troublesome.
The decision of the court was only reached by one majority. It is the
law of the land, and of course is accepted as such and loyally obeyed by
all good citizens. Nevertheless, the hesitation evidently felt by the
court as a whole in coming to a conclusion, when considered together
with the previous decisions on the subject, may perhaps indicate the
possibility of devising a constitutional income-tax law which shall
substantially accomplish the results aimed at. The difficulty of
amending the Constitution is so great that only real necessity can
justify a resort thereto. Every effort should be made in dealing with
this subject, as with the subject of the proper control by the National
Government over the use of corporate wealth in interstate business, to
devise legislation which without such action shall attain the desired
end; but if this fails, there will ultimately be no alternative to a
constitutional amendment.

It would be impossible to overstate (though it is of course difficult
quantitatively to measure) the effect upon a nation's growth to
greatness of what may be called organized patriotism, which necessarily
includes the substitution of a national feeling for mere local pride;
with as a resultant a high ambition for the whole country. No country
can develop its full strength so long as the parts which make up the
whole each put a feeling of loyalty to the part above the feeling of
loyalty to the whole. This is true of sections and it is just as true of
classes. The industrial and agricultural classes must work together,
capitalists and wageworkers must work together, if the best work of
which the country is capable is to be done. It is probable that a
thoroughly efficient system of education comes next to the influence of
patriotism in bringing about national success of this kind. Our federal
form of government, so fruitful of advantage to our people in certain
ways, in other ways undoubtedly limits our national effectiveness. It is
not possible, for instance, for the National Government to take the lead
in technical industrial education, to see that the public school system
of this country develops on all its technical, industrial, scientific,
and commercial sides. This must be left primarily to the several States.
Nevertheless, the National Government has control of the schools of the
District of Columbia, and it should see that these schools promote and
encourage the fullest development of the scholars in both commercial and
industrial training. The commercial training should in one of its
branches deal with foreign trade. The industrial training is even more
important. It should be one of our prime objects as a Nation, so far as
feasible, constantly to work toward putting the mechanic, the wageworker
who works with his hands, on a higher plane of efficiency and reward, so
as to increase his effectiveness in the economic world, and the dignity,
the remuneration, and the power of his position in the social world.
Unfortunately, at present the effect of some of the work in the public
schools is in the exactly opposite direction. If boys and girls are
trained merely in literary accomplishments, to the total exclusion of
industrial, manual, and technical training, the tendency is to unfit
them for industrial work and to make them reluctant to go into it, or
unfitted to do well if they do go into it. This is a tendency which
should be strenuously combated. Our industrial development depends
largely upon technical education, including in this term all industrial
education, from that which fits a man to be a good mechanic, a good
carpenter, or blacksmith, to that which fits a man to do the greatest
engineering feat. The skilled mechanic, the skilled workman, can best
become such by technical industrial education. The far-reaching
usefulness of institutes of technology and schools of mines or of
engineering is now universally acknowledged, and no less far--reaching
is the effect of a good building or mechanical trades school, a textile,
or watch-making, or engraving school. All such training must develop not
only manual dexterity but industrial intelligence. In international
rivalry this country does not have to fear the competition of pauper
labor as much as it has to fear the educated labor of specially trained
competitors; and we should have the education of the hand, eye, and
brain which will fit us to meet such competition.

In every possible way we should help the wageworker who toils with his
hands and who must (we hope in a constantly increasing measure) also
toil with his brain. Under the Constitution the National Legislature can
do but little of direct importance for his welfare save where he is
engaged in work which permits it to act under the interstate commerce
clause of the Constitution; and this is one reason why I so earnestly
hope that both the legislative and judicial branches of the Government
will construe this clause of the Constitution in the broadest possible
manner. We can, however, in such a matter as industrial training, in
such a matter as child labor and factory laws, set an example to the
States by enacting the most advanced legislation that can wisely be
enacted for the District of Columbia.

The only other persons whose welfare is as vital to the welfare of the
whole country as is the welfare of the wageworkers are the tillers of
the soil, the farmers. It is a mere truism to say that no growth of
cities, no growth of wealth, no industrial development can atone for any
falling off in the character and standing of the farming population.
During the last few decades this fact has been recognized with
ever-increasing clearness. There is no longer any failure to realize
that farming, at least in certain branches, must become a technical and
scientific profession. This means that there must be open to farmers the
chance for technical and scientific training, not theoretical merely but
of the most severely practical type. The farmer represents a peculiarly
high type of American citizenship, and he must have the same chance to
rise and develop as other American citizens have. Moreover, it is
exactly as true of the farmer, as it is of the business man and the
wageworker, that the ultimate success of the Nation of which he forms a
part must be founded not alone on material prosperity but upon high
moral, mental, and physical development. This education of the
farmer--self-education by preference but also education from the
outside, as with all other men--is peculiarly necessary here in the
United States, where the frontier conditions even in the newest States
have now nearly vanished, where there must be a substitution of a more
intensive system of cultivation for the old wasteful farm management,
and where there must be a better business organization among the farmers
themselves.

Several factors must cooperate in the improvement of the farmer's
condition. He must have the chance to be educated in the widest possible
sense--in the sense which keeps ever in view the intimate relationship
between the theory of education and the facts of life. In all education
we should widen our aims. It is a good thing to produce a certain number
of trained scholars and students; but the education superintended by the
State must seek rather to produce a hundred good citizens than merely
one scholar, and it must be turned now and then from the class book to
the study of the great book of nature itself. This is especially true of
the farmer, as has been pointed out again and again by all observers
most competent to pass practical judgment on the problems of our country
life. All students now realize that education must seek to train the
executive powers of young people and to confer more real significance
upon the phrase "dignity of labor," and to prepare the pupils so that,
in addition to each developing in the highest degree his individual
capacity for work, they may together help create a right public opinion,
and show in many ways social and cooperative spirit. Organization has
become necessary in the business world; and it has accomplished much for
good in the world of labor. It is no less necessary for farmers. Such a
movement as the grange movement is good in itself and is capable of a
well-nigh infinite further extension for good so long as it is kept to
its own legitimate business. The benefits to be derived by the
association of farmers for mutual advantage are partly economic and
partly sociological.

Moreover, while in the long run voluntary efforts will prove more
efficacious than government assistance, while the farmers must primarily
do most for themselves, yet the Government can also do much. The
Department of Agriculture has broken new ground in many directions, and
year by year it finds how it can improve its methods and develop fresh
usefulness. Its constant effort is to give the governmental assistance
in the most effective way; that is, through associations of farmers
rather than to or through individual farmers. It is also striving to
coordinate its work with the agricultural departments of the several
States, and so far as its own work is educational to coordinate it with
the work of other educational authorities. Agricultural education is
necessarily based upon general education, but our agricultural
educational institutions are wisely specializing themselves, making
their courses relate to the actual teaching of the agricultural and
kindred sciences to young country people or young city people who wish
to live in the country.

Great progress has already been made among farmers by the creation of
farmers' institutes, of dairy associations, of breeders' associations,
horticultural associations, and the like. A striking example of how the
Government and the farmers can cooperate is shown in connection with the
menace offered to the cotton growers of the Southern States by the
advance of the boll weevil. The Department is doing all it can to
organize the farmers in the threatened districts, just as it has been
doing all it can to organize them in aid of its work to eradicate the
cattle fever tick in the South. The Department can and will cooperate
with all such associations, and it must have their help if its own work
is to be done in the most efficient style.

Much is now being done for the States of the Rocky Mountains and Great
Plains through the development of the national policy of irrigation and
forest preservation; no Government policy for the betterment of our
internal conditions has been more fruitful of good than this. The
forests of the White Mountains and Southern Appalachian regions should
also be preserved; and they can not be unless the people of the States
in which they lie, through their representatives in the Congress, secure
vigorous action by the National Government.

I invite the attention of the Congress to the estimate of the Secretary
of War for an appropriation to enable him to begin the preliminary work
for the construction of a memorial amphitheater at Arlington. The Grand
Army of the Republic in its national encampment has urged the erection
of such an amphitheater as necessary for the proper observance Of
Memorial Day and as a fitting monument to the soldier and sailor dead
buried there. In this I heartily concur and commend the matter to the
favorable consideration of the Congress.

I am well aware of how difficult it is to pass a constitutional
amendment. Nevertheless in my judgment the whole question of marriage
and divorce should be relegated to the authority of the National
Congress. At present the wide differences in the laws of the different
States on this subject result in scandals and abuses; and surely there
is nothing so vitally essential to the welfare of the nation, nothing
around which the nation should so bend itself to throw every safeguard,
as the home life of the average citizen. The change would be good from
every standpoint. In particular it would be good because it would confer
on the Congress the power at once to deal radically and efficiently with
polygamy; and this should be done whether or not marriage and divorce
are dealt with. It is neither safe nor proper to leave the question of
polygamy to be dealt with by the several States. Power to deal with it
should be conferred on the National Government.

When home ties are loosened; when men and women cease to regard a worthy
family life, with all its duties fully performed, and all its
responsibilities lived up to, as the life best worth living; then evil
days for the commonwealth are at hand. There are regions in our land,
and classes of our population, where the birth rate has sunk below the
death rate. Surely it should need no demonstration to show that wilful
sterility is, from the standpoint of the nation, from the standpoint of
the human race, the one sin for which the penalty is national death,
race death; a sin for which there is no atonement; a sin which is the
more dreadful exactly in proportion as the men and women guilty thereof
are in other respects, in character, and bodily and mental powers, those
whom for the sake of the state it would be well to see the fathers and
mothers of many healthy children, well brought up in homes made happy by
their presence. No man, no woman, can shirk the primary duties of life,
whether for love of ease and pleasure, or for any other cause, and
retain his or her self-respect.

Let me once again call the attention of the Congress to two subjects
concerning which I have frequently before communicated with them. One is
the question of developing American shipping. I trust that a law
embodying in substance the views, or a major part of the views, exprest
in the report on this subject laid before the House at its last session
will be past. I am well aware that in former years objectionable
measures have been proposed in reference to the encouragement of
American shipping; but it seems to me that the proposed measure is as
nearly unobjectionable as any can be. It will of course benefit
primarily our seaboard States, such as Maine, Louisiana, and Washington;
but what benefits part of our people in the end benefits all; just as
Government aid to irrigation and forestry in the West is really of
benefit, not only to the Rocky Mountain States, but to all our country.
If it prove impracticable to enact a law for the encouragement of
shipping generally, then at least provision should be made for better
communication with South America, notably for fast mail lines to the
chief South American ports. It is discreditable to us that our business
people, for lack of direct communication in the shape of lines of
steamers with South America, should in that great sister continent be at
a disadvantage compared to the business people of Europe.

I especially call your attention to the second subject, the condition of
our currency laws. The national bank act has ably served a great purpose
in aiding the enormous business development of the country; and within
ten years there has been an increase in circulation per capita from
$21.41 to $33.08. For several years evidence has been accumulating that
additional legislation is needed. The recurrence of each crop season
emphasizes the defects of the present laws. There must soon be a
revision of them, because to leave them as they are means to incur
liability of business disaster. Since your body adjourned there has been
a fluctuation in the interest on call money from 2 per cent to 30 per
cent; and the fluctuation was even greater during the preceding six
months. The Secretary of the Treasury had to step in and by wise action
put a stop to the most violent period of oscillation. Even worse than
such fluctuation is the advance in commercial rates and the uncertainty
felt in the sufficiency of credit even at high rates. All commercial
interests suffer during each crop period. Excessive rates for call money
in New York attract money from the interior banks into the speculative
field; this depletes the fund that would otherwise be available for
commercial uses, and commercial borrowers are forced to pay abnormal
rates; so that each fall a tax, in the shape of increased interest
charges, is placed on the whole commerce of the country.

The mere statement of these has shows that our present system is
seriously defective. There is need of a change. Unfortunately, however,
many of the proposed changes must be ruled from consideration because
they are complicated, are not easy of comprehension, and tend to,
disturb existing rights and interests. We must also rule out any plan
which would materially impair the value of the United States 2 per cent
bonds now pledged to secure circulations, the issue of which was made
under conditions peculiarly creditable to the Treasury. I do not press
any especial plan. Various plans have recently been proposed by expert
committees of bankers. Among the plans which are possibly feasible and
which certainly should receive your consideration is that repeatedly
brought to your attention by the present Secretary of the Treasury, the
essential features of which have been approved by many prominent bankers
and business men. According to this plan national banks should be
permitted to issue a specified proportion of their capital in notes of a
given kind, the issue to be taxed at so high a rate as to drive the
notes back when not wanted in legitimate trade. This plan would not
permit the issue of currency to give banks additional profits, but to
meet the emergency presented by times of stringency.

I do not say that this is the right system. I only advance it to
emphasize my belief that there is need for the adoption of some system
which shall be automatic and open to all sound banks, so as to avoid all
possibility of discrimination and favoritism. Such a plan would tend to
prevent the spasms of high money and speculation which now obtain in the
New York market; for at present there is too much currency at certain
seasons of the year, and its accumulation at New York tempts bankers to
lend it at low rates for speculative purposes; whereas at other times
when the crops are being moved there is urgent need for a large but
temporary increase in the currency supply. It must never be forgotten
that this question concerns business men generally quite as much as
bankers; especially is this true of stockmen, farmers, and business men
in the West; for at present at certain seasons of the year the
difference in interest rates between the East and the West is from 6 to
10 per cent, whereas in Canada the corresponding difference is but 2 per
cent. Any plan must, of course, guard the interests of western and
southern bankers as carefully as it guards the interests of New York or
Chicago bankers; and must be drawn from the standpoints of the farmer
and the merchant no less than from the standpoints of the city banker
and the country banker.

The law should be amended so as specifically to provide that the funds
derived from customs duties may be treated by the Secretary of the
Treasury as he treats funds obtained under the internal-revenue laws.
There should be a considerable increase in bills of small denominations.
Permission should be given banks, if necessary under settled
restrictions, to retire their circulation to a larger amount than three
millions a month.

I most earnestly hope that the bill to provide a lower tariff for or
else absolute free trade in Philippine products will become a law. No
harm will come to any American industry; and while there will be some
small but real material benefit to the Filipinos, the main benefit will
come by the showing made as to our purpose to do all in our power for
their welfare. So far our action in the Philippines has been abundantly
justified, not mainly and indeed not primarily because of the added
dignity it has given us as a nation by proving that we are capable
honorably and efficiently to bear the international burdens which a
mighty people should bear, but even more because of the immense benefit
that has come to the people of the Philippine Islands. In these islands
we are steadily introducing both liberty and order, to a greater degree
than their people have ever before known. We have secured justice. We
have provided an efficient police force, and have put down ladronism.
Only in the islands of Leyte and Samar is the authority of our
Government resisted and this by wild mountain tribes under the
superstitious inspiration of fakirs and pseudo-religions leaders. We are
constantly increasing the measure of liberty accorded the islanders, and
next spring, if conditions warrant, we shall take a great stride forward
in testing their capacity for self-government by summoning the first
Filipino legislative assembly; and the way in which they stand this test
will largely determine whether the self-government thus granted will be
increased or decreased; for if we have erred at all in the Philippines
it has been in proceeding too rapidly in the direction of granting a
large measure of self-government. We are building roads. We have, for
the immeasurable good of the people, arranged for the building of
railroads. Let us also see to it that they are given free access to our
markets. This nation owes no more imperative duty to itself and mankind
than the duty of managing the affairs of all the islands under the
American flag--the Philippines, Porto Rico, and Hawaii--so as to make it
evident that it is in every way to their advantage that the flag should
fly over them.

American citizenship should be conferred on the citizens of Porto Rico.
The harbor of San Juan in Porto Rico should be dredged and improved. The
expenses of the federal court of Porto Rico should be met from the
Federal Treasury. The administration of the affairs of Porto Rico,
together with those of the Philippines, Hawaii, and our other insular
possessions, should all be directed under one executive department; by
preference the Department of State or the Department of War.

The needs of Hawaii are peculiar; every aid should be given the islands;
and our efforts should be unceasing to develop them along the lines of a
community of small freeholders, not of great planters with coolie-tilled
estates. Situated as this Territory is, in the middle of the Pacific,
there are duties imposed upon this small community which do not fall in
like degree or manner upon any other American community. This warrants
our treating it differently from the way in which we treat Territories
contiguous to or surrounded by sister Territories or other States, and
justifies the setting aside of a portion of our revenues to be expended
for educational and internal improvements therein. Hawaii is now making
an effort to secure immigration fit in the end to assume the duties and
burdens of full American citizenship, and whenever the leaders in the
various industries of those islands finally adopt our ideals and
heartily join our administration in endeavoring to develop a middle
class of substantial citizens, a way will then be found to deal with the
commercial and industrial problems which now appear to them so serious.
The best Americanism is that which aims for stability and permanency of
prosperous citizenship, rather than immediate returns on large masses of
capital.

Alaska's needs have been partially met, but there must be a complete
reorganization of the governmental system, as I have before indicated to
you. I ask your especial attention to this. Our fellow-citizens who
dwell on the shores of Puget Sound with characteristic energy are
arranging to hold in Seattle the Alaska Yukon Pacific Exposition. Its
special aims include the upbuilding of Alaska and the development of
American commerce on the Pacific Ocean. This exposition, in its purposes
and scope, should appeal not only to the people of the Pacific slope,
but to the people of the United States at large. Alaska since it was
bought has yielded to the Government eleven millions of dollars of
revenue, and has produced nearly three hundred millions of dollars in
gold, furs, and fish. When properly developed it will become in large
degree a land of homes. The countries bordering the Pacific Ocean have a
population more numerous than that of all the countries of Europe; their
annual foreign commerce amounts to over three billions of dollars, of
which the share of the United States is some seven hundred millions of
dollars. If this trade were thoroughly understood and pushed by our
manufacturers and producers, the industries not only of the Pacific
slope, but of all our country, and particularly of our cotton-growing
States, would be greatly benefited. Of course, in order to get these
benefits, we must treat fairly the countries with which we trade.

It is a mistake, and it betrays a spirit of foolish cynicism, to
maintain that all international governmental action is, and must ever
be, based upon mere selfishness, and that to advance ethical reasons for
such action is always a sign of hypocrisy. This is no more necessarily
true of the action of governments than of the action of individuals. It
is a sure sign of a base nature always to ascribe base motives for the
actions of others. Unquestionably no nation can afford to disregard
proper considerations of self-interest, any more than a private
individual can so do. But it is equally true that the average private
individual in any really decent community does many actions with
reference to other men in which he is guided, not by self-interest, but
by public spirit, by regard for the rights of others, by a disinterested
purpose to do good to others, and to raise the tone of the community as
a whole. Similarly, a really great nation must often act, and as a
matter of fact often does act, toward other nations in a spirit not in
the least of mere self-interest, but paying heed chiefly to ethical
reasons; and as the centuries go by this disinterestedness in
international action, this tendency of the individuals comprising a
nation to require that nation to act with justice toward its neighbors,
steadily grows and strengthens. It is neither wise nor right for a
nation to disregard its own needs, and it is foolish--and may be
wicked--to think that other nations will disregard theirs. But it is
wicked for a nation only to regard its own interest, and foolish to
believe that such is the sole motive that actuates any other nation. It
should be our steady aim to raise the ethical standard of national
action just as we strive to raise the ethical standard of individual
action.

Not only must we treat all nations fairly, but we must treat with
justice and good will all immigrants who come here under the law.
Whether they are Catholic or Protestant, Jew or Gentile; whether they
come from England or Germany, Russia, Japan, or Italy, matters nothing.
All we have a right to question is the man's conduct. If he is honest
and upright in his dealings with his neighbor and with the State, then
he is entitled to respect and good treatment. Especially do we need to
remember our duty to the stranger within our gates. It is the sure mark
of a low civilization, a low morality, to abuse or discriminate against
or in any way humiliate such stranger who has come here lawfully and who
is conducting himself properly. To remember this is incumbent on every
American citizen, and it is of course peculiarly incumbent on every
Government official, whether of the nation or of the several States.

I am prompted to say this by the attitude of hostility here and there
assumed toward the Japanese in this country. This hostility is sporadic
and is limited to a very few places. Nevertheless, it is most
discreditable to us as a people, and it may be fraught with the gravest
consequences to the nation. The friendship between the United States and
Japan has been continuous since the time, over half a century ago, when
Commodore Perry, by his expedition to Japan, first opened the islands to
western civilization. Since then the growth of Japan has been literally
astounding. There is not only nothing to parallel it, but nothing to
approach it in the history of civilized mankind. Japan has a glorious
and ancient past. Her civilization is older than that of the nations of
northern Europe--the nations from whom the people of the United States
have chiefly sprung. But fifty years ago Japan's development was still
that of the Middle Ages. During that fifty years the progress of the
country in every walk in life has been a marvel to mankind, and she now
stands as one of the greatest of civilized nations; great in the arts of
war and in the arts of peace; great in military, in industrial, in
artistic development and achievement. Japanese soldiers and sailors have
shown themselves equal in combat to any of whom history makes note. She
has produced great generals and mighty admirals; her fighting men,
afloat and ashore, show all the heroic courage, the unquestioning,
unfaltering loyalty, the splendid indifference to hardship and death,
which marked the Loyal Ronins; and they show also that they possess the
highest ideal of patriotism. Japanese artists of every kind see their
products eagerly sought for in all lands. The industrial and commercial
development of Japan has been phenomenal; greater than that of any other
country during the same period. At the same time the advance in science
and philosophy is no less marked. The admirable management of the
Japanese Red Cross during the late war, the efficiency and humanity of
the Japanese officials, nurses, and doctors, won the respectful
admiration of all acquainted with the facts. Through the Red Cross the
Japanese people sent over $100,000 to the sufferers of San Francisco,
and the gift was accepted with gratitude by our people. The courtesy of
the Japanese, nationally and individually, has become proverbial. To no
other country has there been such an increasing number of visitors from
this land as to Japan. In return, Japanese have come here in great
numbers. They are welcome, socially and intellectually, in all our
colleges and institutions of higher learning, in all our professional
and social bodies. The Japanese have won in a single generation the
right to stand abreast of the foremost and most enlightened peoples of
Europe and America; they have won on their own merits and by their own
exertions the right to treatment on a basis of full and frank equality.
The overwhelming mass of our people cherish a lively regard and respect
for the people of Japan, and in almost every quarter of the Union the
stranger from Japan is treated as he deserves; that is, he is treated as
the stranger from any part of civilized Europe is and deserves to be
treated. But here and there a most unworthy feeling has manifested
itself toward the Japanese--the feeling that has been shown in shutting
them out from the common schools in San Francisco, and in mutterings
against them in one or two other places, because of their efficiency as
workers. To shut them out from the public schools is a wicked absurdity,
when there are no first-class colleges in the land, including the
universities and colleges of California, which do not gladly welcome
Japanese students and on which Japanese students do not reflect credit.
We have as much to learn from Japan as Japan has to learn from us; and
no nation is fit to teach unless it is also willing to learn. Throughout
Japan Americans are well treated, and any failure on the part of
Americans at home to treat the Japanese with a like courtesy and
consideration is by just so much a confession of inferiority in our
civilization.

Our nation fronts on the Pacific, just as it fronts on the Atlantic. We
hope to play a constantly growing part in the great ocean of the Orient.
We wish, as we ought to wish, for a great commercial development in our
dealings with Asia; and it is out of the question that we should
permanently have such development unless we freely and gladly extend to
other nations the same measure of justice and good treatment which we
expect to receive in return. It is only a very small body of our
citizens that act badly. Where the Federal Government has power it will
deal summarily with any such. Where the several States have power I
earnestly ask that they also deal wisely and promptly with such conduct,
or else this small body of wrongdoers may bring shame upon the great
mass of their innocent and right-thinking fellows--that is, upon our
nation as a whole. Good manners should be an international no less than
an individual attribute. I ask fair treatment for the Japanese as I
would ask fair treatment for Germans or Englishmen, Frenchmen, Russians,
or Italians. I ask it as due to humanity and civilization. I ask it as
due to ourselves because we must act uprightly toward all men.

I recommend to the Congress that an act be past specifically providing
for the naturalization of Japanese who come here intending to become
American citizens. One of the great embarrassments attending the
performance of our international obligations is the fact that the
Statutes of the United States are entirely inadequate. They fail to give
to the National Government sufficiently ample power, through United
States courts and by the use of the Army and Navy, to protect aliens in
the rights secured to them under solemn treaties which are the law of
the land. I therefore earnestly recommend that the criminal and civil
statutes of the United States be so amended and added to as to enable
the President, acting for the United States Government, which is
responsible in our international relations, to enforce the rights of
aliens under treaties. Even as the law now is something can be done by
the Federal Government toward this end, and in the matter now before me
affecting the Japanese everything that it is in my power to do will be
done, and all of the forces, military and civil, of the United States
which I may lawfully employ will be so employed. There should, however,
be no particle of doubt as to the power of the National Government
completely to perform and enforce its own obligations to other nations.
The mob of a single city may at any time perform acts of lawless
violence against some class of foreigners which would plunge us into
war. That city by itself would be powerless to make defense against the
foreign power thus assaulted, and if independent of this Government it
would never venture to perform or permit the performance of the acts
complained of. The entire power and the whole duty to protect the
offending city or the offending community lies in the hands of the
United States Government. It is unthinkable that we should continue a
policy under which a given locality may be allowed to commit a crime
against a friendly nation, and the United States Government limited, not
to preventing the commission of the crime, but, in the last resort, to
defending the people who have committed it against the consequences of
their own wrongdoing.

Last August an insurrection broke out in Cuba which it speedily grew
evident that the existing Cuban Government was powerless to quell. This
Government was repeatedly asked by the then Cuban Government to
intervene, and finally was notified by the President of Cuba that he
intended to resign; that his decision was irrevocable; that none of the
other constitutional officers would consent to carry on the Government,
and that he was powerless to maintain order. It was evident that chaos
was impending, and there was every probability that if steps were not
immediately taken by this Government to try to restore order the
representatives of various European nations in the island would apply to
their respective governments for armed intervention in order to protect
the lives and property of their citizens. Thanks to the preparedness of
our Navy, I was able immediately to send enough ships to Cuba to prevent
the situation from becoming hopeless; and I furthermore dispatched to
Cuba the Secretary of War and the Assistant Secretary of State, in order
that they might grapple with the situation on the ground. All efforts to
secure an agreement between the contending factions, by which they
should themselves come to an amicable understanding and settle upon some
modus vivendi--some provisional government of their own--failed. Finally
the President of the Republic resigned. The quorum of Congress assembled
failed by deliberate purpose of its members, so that there was no power
to act on his resignation, and the Government came to a halt. In
accordance with the so-called Platt amendment, which was embodied in the
constitution of Cuba, I thereupon proclaimed a provisional government
for the island, the Secretary of War acting as provisional governor
until he could be replaced by Mr. Magoon, the late minister to Panama
and governor of the Canal Zone on the Isthmus; troops were sent to
support them and to relieve the Navy, the expedition being handled with
most satisfactory speed and efficiency. The insurgent chiefs immediately
agreed that their troops should lay down their arms and disband; and the
agreement was carried out. The provisional government has left the
personnel of the old government and the old laws, so far as might be,
unchanged, and will thus administer the island for a few months until
tranquillity can be restored, a new election properly held, and a new
government inaugurated. Peace has come in the island; and the harvesting
of the sugar-cane crop, the great crop of the island, is about to
proceed.

When the election has been held and the new government inaugurated in
peaceful and orderly fashion the provisional government will come to an
end. I take this opportunity of expressing upon behalf of the American
people, with all possible solemnity, our most earnest hope that the
people of Cuba will realize the imperative need of preserving justice
and keeping order in the Island. The United States wishes nothing of
Cuba except that it shall prosper morally and materially, and wishes
nothing of the Cubans save that they shall be able to preserve order
among themselves and therefore to preserve their independence. If the
elections become a farce, and if the insurrectionary habit becomes
confirmed in the Island, it is absolutely out of the question that the
Island should continue independent; and the United States, which has
assumed the sponsorship before the civilized world for Cuba's career as
a nation, would again have to intervene and to see that the government
was managed in such orderly fashion as to secure the safety of life and
property. The path to be trodden by those who exercise self-government
is always hard, and we should have every charity and patience with the
Cubans as they tread this difficult path. I have the utmost sympathy
with, and regard for, them; but I most earnestly adjure them solemnly to
weigh their responsibilities and to see that when their new government
is started it shall run smoothly, and with freedom from flagrant denial
of right on the one hand, and from insurrectionary disturbances on the
other.

The Second International Conference of American Republics, held in
Mexico in the years 1901-2, provided for the holding of the third
conference within five years, and committed the fixing of the time and
place and the arrangements for the conference to the governing board of
the Bureau of American Republics, composed of the representatives of all
the American nations in Washington. That board discharged the duty
imposed upon it with marked fidelity and painstaking care, and upon the
courteous invitation of the United States of Brazil the conference was
held at Rio de Janeiro, continuing from the 23d of July to the 29th of
August last. Many subjects of common interest to all the American
nations were discust by the conference, and the conclusions reached,
embodied in a series of resolutions and proposed conventions, will be
laid before you upon the coming in of the final report of the American
delegates. They contain many matters of importance relating to the
extension of trade, the increase of communication, the smoothing away of
barriers to free intercourse, and the promotion of a better knowledge
and good understanding between the different countries represented. The
meetings of the conference were harmonious and the conclusions were
reached with substantial unanimity. It is interesting to observe that in
the successive conferences which have been held the representatives of
the different American nations have been learning to work together
effectively, for, while the First Conference in Washington in 1889, and
the Second Conference in Mexico in 1901-2, occupied many months, with
much time wasted in an unregulated and fruitless discussion, the Third
Conference at Rio exhibited much of the facility in the practical
dispatch of business which characterizes permanent deliberative bodies,
and completed its labors within the period of six weeks originally
allotted for its sessions.

Quite apart from the specific value of the conclusions reached by the
conference, the example of the representatives of all the American
nations engaging in harmonious and kindly consideration and discussion
of subjects of common interest is itself of great and substantial value
for the promotion of reasonable and considerate treatment of all
international questions. The thanks of this country are due to the
Government of Brazil and to the people of Rio de Janeiro for the
generous hospitality with which our delegates, in common with the
others, were received, entertained, and facilitated in their work.

Incidentally to the meeting of the conference, the Secretary of State
visited the city of Rio de Janeiro and was cordially received by the
conference, of which he was made an honorary president. The announcement
of his intention to make this visit was followed by most courteous and
urgent invitations from nearly all the countries of South America to
visit them as the guest of their Governments. It was deemed that by the
acceptance of these invitations we might appropriately express the real
respect and friendship in which we hold our sister Republics of the
southern continent, and the Secretary, accordingly, visited Brazil,
Uruguay, Argentina, Chile, Peru, Panama, and Colombia. He refrained from
visiting Paraguay, Bolivia, and Ecuador only because the distance of
their capitals from the seaboard made it impracticable with the time at
his disposal. He carried with him a message of peace and friendship, and
of strong desire for good understanding and mutual helpfulness; and he
was everywhere received in the spirit of his message. The members of
government, the press, the learned professions, the men of business, and
the great masses of the people united everywhere in emphatic response to
his friendly expressions and in doing honor to the country and cause
which he represented.

In many parts of South America there has been much misunderstanding of
the attitude and purposes of the United States towards the other
American Republics. An idea had become prevalent that our assertion of
the Monroe Doctrine implied, or carried with it, an assumption of
superiority, and of a right to exercise some kind of protectorate over
the countries to whose territory that doctrine applies. Nothing could be
farther from the truth. Yet that impression continued to be a serious
barrier to good understanding, to friendly intercourse, to the
introduction of American capital and the extension of American trade.
The impression was so widespread that apparently it could not be reached
by any ordinary means.

It was part of Secretary Root's mission to dispel this unfounded
impression, and there is just cause to believe that he has succeeded. In
an address to the Third Conference at Rio on the 31st of July--an
address of such note that I send it in, together with this message--he
said:

"We wish for no victories but those of peace; for no territory except
our own; for no sovereignty except the sovereignty over ourselves. We
deem the independence and equal rights of the smallest and weakest
member of the family of nations entitled to as much respect as those of
the greatest empire, and we deem the observance of that respect the
chief guaranty of the weak against the oppression of the strong. We
neither claim nor desire any rights or privileges or powers that we do
not freely concede to every American Republic. We wish to increase our
prosperity, to extend our trade, to grow in wealth, in wisdom, and in
spirit, but our conception of the true way to accomplish this is not to
pull down others and profit by their ruin, but to help all friends to a
common prosperity and a common growth, that we may all become greater
and stronger together. Within a few months for the first time the
recognized possessors of every foot of soil upon the American continents
can be and I hope will be represented with the acknowledged rights of
equal sovereign states in the great World Congress at The Hague. This
will be the world's formal and final acceptance of the declaration that
no part of the American continents is to be deemed subject to
colonization. Let us pledge ourselves to aid each other in the full
performance of the duty to humanity which that accepted declaration
implies, so that in time the weakest and most unfortunate of our
Republics may come to march with equal step by the side of the stronger
and more fortunate. Let us help each other to show that for all the
races of men the liberty for which we have fought and labored is the
twin sister of justice and peace. Let us unite in creating and
maintaining and making effective an all-American public opinion, whose
power shall influence international conduct and prevent international
wrong, and narrow the causes of war, and forever preserve our free lands
from the burden of such armaments as are massed behind the frontiers of
Europe, and bring us ever nearer to the perfection of ordered liberty.
So shall come security and prosperity, production and trade, wealth,
learning, the arts, and happiness for us all."

These words appear to have been received with acclaim in every part of
South America. They have my hearty approval, as I am sure they will have
yours, and I can not be wrong in the conviction that they correctly
represent the sentiments of the whole American people. I can not better
characterize the true attitude of the United States in its assertion of
the Monroe Doctrine than in the words of the distinguished former
minister of foreign affairs of Argentina, Doctor Drago, in his speech
welcoming Mr. Root at Buenos Ayres. He spoke of--

"The traditional policy of the United States (which) without
accentuating superiority or seeking preponderance, condemned the
oppression of the nations of this part of the world and the control of
their destinies by the great Powers of Europe."

It is gratifying to know that in the great city of Buenos Ayres, upon
the arches which spanned the streets, entwined with Argentine and
American flags for the reception of our representative, there were
emblazoned not' only the names of Washington and Jefferson and Marshall,
but also, in appreciative recognition of their services to the cause of
South American independence, the names of James Monroe, John Quincy
Adams, Henry Clay, and Richard Rush. We take especial pleasure in the
graceful courtesy of the Government of Brazil, which has given to the
beautiful and stately building first used for the meeting of the
conference the name of "Palacio Monroe." Our grateful acknowledgments
are due to the Governments and the people of all the countries visited
by the Secretary of State for the courtesy, the friendship, and the
honor shown to our country in their generous hospitality to him.

In my message to you on the 5th of December, 1905, I called your
attention to the embarrassment that might be caused to this Government
by the assertion by foreign nations of the right to collect by force of
arms contract debts due by American republics to citizens of the
collecting nation, and to the danger that the process of compulsory
collection might result in the occupation of territory tending to become
permanent. I then said:

"Our own Government has always refused to enforce such contractual
obligations on behalf of its citizens by an appeal to arms. It is much
to be wisht that all foreign governments would take the same view."

This subject was one of the topics of consideration at the conference at
Rio and a resolution was adopted by that conference recommending to the
respective governments represented "to consider the advisability of
asking the Second Peace Conference at The Hague to examine the question
of the compulsory collection of public debts, and, in general, means
tending to diminish among nations conflicts of purely pecuniary origin."

This resolution was supported by the representatives of the United
States in accordance with the following instructions:

"It has long been the established policy of the United States not to use
its armed forces for the collection of ordinary contract debts due to
its citizens by other governments. We have not considered the use of
force for such a purpose consistent with that respect for the
independent sovereignty of other members of the family of nations which
is the most important principle of international law and the chief
protection of weak nations against the oppression of the strong. It
seems to us that the practise is injurious in its general effect upon
the relations of nations and upon the welfare of weak and disordered
states, whose development ought to be encouraged in the interests of
civilization; that it offers frequent temptation to bullying and
oppression and to unnecessary and unjustifiable warfare. We regret that
other powers, whose opinions and sense of justice we esteem highly, have
at times taken a different view and have permitted themselves, though we
believe with reluctance, to collect such debts by force. It is doubtless
true that the non-payment of public debts may be accompanied by such
circumstances of fraud and wrongdoing or violation of treaties as to
justify the use of force. This Government would be glad to see an
international consideration of the subject which shall discriminate
between such cases and the simple nonperformance of a contract with a
private person, and a resolution in favor of reliance upon peaceful
means in cases of the latter class.

"It is not felt, however, that the conference at Rio should undertake to
make such a discrimination or to resolve upon such a rule. Most of the
American countries are still debtor nations, while the countries of
Europe are the creditors. If the Rio conference, therefore, were to take
such action it would have the appearance of a meeting of debtors
resolving how their creditors should act, and this would not inspire
respect. The true course is indicated by the terms of the program, which
proposes to request the Second Hague Conference, where both creditors
and debtors will be assembled, to consider the subject."

Last June trouble which had existed for some time between the Republics
of Salvador, Guatemala, and Honduras culminated in war--a war which
threatened to be ruinous to the countries involved and very destructive
to the commercial interests of Americans, Mexicans, and other foreigners
who are taking an important part in the development of these countries.
The thoroughly good understanding which exists between the United States
and Mexico enabled this Government and that of Mexico to unite in
effective mediation between the warring Republics; which mediation
resulted, not without long-continued and patient effort, in bringing
about a meeting of the representatives of the hostile powers on board a
United States warship as neutral territory, and peace was there
concluded; a peace which resulted in the saving of thousands of lives
and in the prevention of an incalculable amount of misery and the
destruction of property and of the means of livelihood. The Rio
Conference past the following resolution in reference to this action:

"That the Third International American Conference shall address to the
Presidents of the United States of America and of the United States of
Mexico a note in which the conference which is being held at Rio
expresses its satisfaction at the happy results of their mediation for
the celebration of peace between the Republics of Guatemala, Honduras,
and Salvador."

This affords an excellent example of one way in which the influence of
the United States can properly be exercised for the benefit of the
peoples of the Western Hemisphere; that is, by action taken in concert
with other American republics and therefore free from those suspicions
and prejudices which might attach if the action were taken by one alone.
In this way it is possible to exercise a powerful influence toward the
substitution of considerate action in the spirit of justice for the
insurrectionary or international violence which has hitherto been so
great a hindrance to the development of many of our neighbors. Repeated
examples of united action by several or many American republics in favor
of peace, by urging cool and reasonable, instead of excited and
belligerent, treatment of international controversies, can not fail to
promote the growth of a general public opinion among the American
nations which will elevate the standards of international action,
strengthen the sense of international duty among governments, and tell
in favor of the peace of mankind.

I have just returned from a trip to Panama and shall report to you at
length later on the whole subject of the Panama Canal.

The Algeciras Convention, which was signed by the United States as well
as by most of the powers of Europe, supersedes the previous convention
of 1880, which was also signed both by the United States and a majority
of the European powers. This treaty confers upon us equal commercial
rights with all European countries and does not entail a single
obligation of any kind upon us, and I earnestly hope it may be speedily
ratified. To refuse to ratify it would merely mean that we forfeited our
commercial rights in Morocco and would not achieve another object of any
kind. In the event of such refusal we would be left for the first time
in a hundred and twenty years without any commercial treaty with
Morocco; and this at a time when we are everywhere seeking new markets
and outlets for trade.

The destruction of the Pribilof Islands fur seals by pelagic sealing
still continues. The herd which, according to the surveys made in 1874
by direction of the Congress, numbered 4,700,000, and which, according
to the survey of both American and Canadian commissioners in 1891,
amounted to 1,000,000, has now been reduced to about 180,000. This
result has been brought about by Canadian and some other sealing vessels
killing the female seals while in the water during their annual
pilgrimage to and from the south, or in search of food. As a rule the
female seal when killed is pregnant, and also has an unweaned pup on
land, so that, for each skin taken by pelagic sealing, as a rule, three
lives are destroyed--the mother, the unborn offspring, and the nursing
pup, which is left to starve to death. No damage whatever is done to the
herd by the carefully regulated killing on land; the custom of pelagic
sealing is solely responsible for all of the present evil, and is alike
indefensible from the economic standpoint and from the standpoint of
humanity.

In 1896 over 16,000 young seals were found dead from starvation on the
Pribilof Islands. In 1897 it was estimated that since pelagic sealing
began upward of 400,000 adult female seals had been killed at sea, and
over 300,000 young seals had died of starvation as the result. The
revolting barbarity of such a practise, as well as the wasteful
destruction which it involves, needs no demonstration and is its own
condemnation. The Bering Sea Tribunal, which sat in Paris in 1893, and
which decided against the claims of the United States to exclusive
jurisdiction in the waters of Bering Sea and to a property right in the
fur seals when outside of the three-mile limit, determined also upon
certain regulations which the Tribunal considered sufficient for the
proper protection and preservation of the fur seal in, or habitually
resorting to, the Bering Sea. The Tribunal by its regulations
established a close season, from the 1st of May to the 31st of July, and
excluded all killing in the waters within 60 miles around the Pribilof
Islands. They also provided that the regulations which they had
determined upon, with a view to the protection and preservation of the
seals, should be submitted every five years to new examination, so as to
enable both interested Governments to consider whether, in the light of
past experience, there was occasion for any modification thereof.

The regulations have proved plainly inadequate to accomplish the object
of protection and preservation of the fur seals, and for a long time
this Government has been trying in vain to secure from Great Britain
such revision and modification of the regulations as were contemplated
and provided for by the award of the Tribunal of Paris.

The process of destruction has been accelerated during recent years by
the appearance of a number of Japanese vessels engaged in pelagic
sealing. As these vessels have not been bound even by the inadequate
limitations prescribed by the Tribunal of Paris, they have paid no
attention either to the close season or to the sixty-mile limit imposed
upon the Canadians, and have prosecuted their work up to the very
islands themselves. On July 16 and 17 the crews from several Japanese
vessels made raids upon the island of St. Paul, and before they were
beaten off by the very meager and insufficiently armed guard, they
succeeded in killing several hundred seals and carrying off the skins of
most of them. Nearly all the seals killed were females and the work was
done with frightful barbarity. Many of the seals appear to have been
skinned alive and many were found half skinned and still alive. The
raids were repelled only by the use of firearms, and five of the raiders
were killed, two were wounded, and twelve captured, including the two
wounded. Those captured have since been tried and sentenced to
imprisonment. An attack of this kind had been wholly unlookt for, but
such provision of vessels, arms, and ammunition will now be made that
its repetition will not be found profitable.

Suitable representations regarding the incident have been made to the
Government of Japan, and we are assured that all practicable measures
will be taken by that country to prevent any recurrence of the outrage.
On our part, the guard on the island will be increased and better
equipped and organized, and a better revenue-cutter patrol service about
the islands will be established; next season a United States war vessel
will also be sent there.

We have not relaxed our efforts to secure an agreement with Great
Britain for adequate protection of the seal herd, and negotiations with
Japan for the same purpose are in progress.

The laws for the protection of the seals within the jurisdiction of the
United States need revision and amendment. Only the islands of St. Paul
and St. George are now, in terms, included in the Government
reservation, and the other islands are also to be included. The landing
of aliens as well as citizens upon the islands, without a permit from
the Department of Commerce and Labor, for any purpose except in case of
stress of weather or for water, should be prohibited under adequate
penalties. The approach of vessels for the excepted purposes should be
regulated. The authority of the Government agents on the islands should
be enlarged, and the chief agent should have the powers of a committing
magistrate. The entrance of a vessel into the territorial waters
surrounding the islands with intent to take seals should be made a
criminal offense and cause of forfeiture. Authority for seizures in such
cases should be given and the presence on any such vessel of seals or
sealskins, or the paraphernalia for taking them, should be made prima
facie evidence of such intent. I recommend what legislation is needed to
accomplish these ends; and I commend to your attention the report of Mr.
Sims, of the Department of Commerce and Labor, on this subject.

In case we are compelled to abandon the hope of making arrangements with
other governments to put an end to the hideous cruelty now incident to
pelagic sealing, it will be a question for your serious consideration
how far we should continue to protect and maintain the seal herd on land
with the result of continuing such a practise, and whether it is not
better to end the practice by exterminating the herd ourselves in the
most humane way possible.

In my last message I advised you that the Emperor of Russia had taken
the initiative in bringing about a second peace conference at The Hague.
Under the guidance of Russia the arrangement of the preliminaries for
such a conference has been progressing during the past year. Progress
has necessarily been slow, owing to the great number of countries to be
consulted upon every question that has arisen. It is a matter of
satisfaction that all of the American Republics have now, for the first
time, been invited to join in the proposed conference.

The close connection between the subjects to be taken up by the Red
Cross Conference held at Geneva last summer and the subjects which
naturally would come before The Hague Conference made it apparent that
it was desirable to have the work of the Red Cross Conference completed
and considered by the different powers before the meeting at The Hague.
The Red Cross Conference ended its labors on the 6th day of July, and
the revised and amended convention, which was signed by the American
delegates, will be promptly laid before the Senate.

By the special and highly appreciated courtesy of the Governments of
Russia and the Netherlands, a proposal to call The Hague Conference
together at a time which would conflict with the Conference of the
American Republics at Rio de Janeiro in August was laid aside. No other
date has yet been suggested. A tentative program for the conference has
been proposed by the Government of Russia, and the subjects which it
enumerates are undergoing careful examination and consideration in
preparation for the conference.

It must ever be kept in mind that war is not merely justifiable, but
imperative, upon honorable men, upon an honorable nation, where peace
can only be obtained by the sacrifice of conscientious conviction or of
national welfare. Peace is normally a great good, and normally it
coincides with righteousness; but it is righteousness and not peace
which should bind the conscience of a nation as it should bind the
conscience of an individual; and neither a nation nor an individual can
surrender conscience to another's keeping. Neither can a nation, which
is an entity, and which does not die as individuals die, refrain from
taking thought for the interest of the generations that are to come, no
less than for the interest of the generation of to-day; and no public
men have a right, whether from shortsightedness, from selfish
indifference, or from sentimentality, to sacrifice national interests
which are vital in character. A just war is in the long run far better
for a nation's soul than the most prosperous peace obtained by
acquiescence in wrong or injustice. Moreover, though it is criminal for
a nation not to prepare for war, so that it may escape the dreadful
consequences of being defeated in war, yet it must always be remembered
that even to be defeated in war may be far better than not to have
fought at all. As has been well and finely said, a beaten nation is not
necessarily a disgraced nation; but the nation or man is disgraced if
the obligation to defend right is shirked.

We should as a nation do everything in our power for the cause of
honorable peace. It is morally as indefensible for a nation to commit a
wrong upon another nation, strong or weak, as for an individual thus to
wrong his fellows. We should do all in our power to hasten the day when
there shall be peace among the nations--a peace based upon justice and
not upon cowardly submission to wrong. We can accomplish a good deal in
this direction, but we can not accomplish everything, and the penalty of
attempting to do too much would almost inevitably be to do worse than
nothing; for it must be remembered that fantastic extremists are not in
reality leaders of the causes which they espouse, but are ordinarily
those who do most to hamper the real leaders of the cause and to damage
the cause itself. As yet there is no likelihood of establishing any kind
of international power, of whatever sort, which can effectively check
wrongdoing, and in these circumstances it would be both a foolish and an
evil thing for a great and free nation to deprive itself of the power to
protect its own rights and even in exceptional cases to stand up for the
rights of others. Nothing would more promote iniquity, nothing would
further defer the reign upon earth of peace and righteousness, than for
the free and enlightened peoples which, though with much stumbling and
many shortcomings, nevertheless strive toward justice, deliberately to
render themselves powerless while leaving every despotism and barbarism
armed and able to work their wicked will. The chance for the settlement
of disputes peacefully, by arbitration, now depends mainly upon the
possession by the nations that mean to do right of sufficient armed
strength to make their purpose effective.

The United States Navy is the surest guarantor of peace which this
country possesses. It is earnestly to be wisht that we would profit by
the teachings of history in this matter. A strong and wise people will
study its own failures no less than its triumphs, for there is wisdom to
be learned from the study of both, of the mistake as well as of the
success. For this purpose nothing could be more instructive than a
rational study of the war of 1812, as it is told, for instance, by
Captain Mahan. There was only one way in which that war could have been
avoided. If during the preceding twelve years a navy relatively as
strong as that which this country now has had been built up, and an army
provided relatively as good as that which the country now has, there
never would have been the slightest necessity of fighting the war; and
if the necessity had arisen the war would under such circumstances have
ended with our speedy and overwhelming triumph. But our people during
those twelve years refused to make any preparations whatever, regarding
either the Army or the Navy. They saved a million or two of dollars by
so doing; and in mere money paid a hundredfold for each million they
thus saved during the three years of war which followed--a war which
brought untold suffering upon our people, which at one time threatened
the gravest national disaster, and which, in spite of the necessity of
waging it, resulted merely in what was in effect a drawn battle, while
the balance of defeat and triumph was almost even.

I do not ask that we continue to increase our Navy. I ask merely that it
be maintained at its present strength; and this can be done only if we
replace the obsolete and outworn ships by new and good ones, the equals
of any afloat in any navy. To stop building ships for one year means
that for that year the Navy goes back instead of forward. The old battle
ship Texas, for instance, would now be of little service in a stand-up
fight with a powerful adversary. The old double-turret monitors have
outworn their usefulness, while it was a waste of money to build the
modern single-turret monitors. All these ships should be replaced by
others; and this can be done by a well-settled program of providing for
the building each year of at least one first-class battle ship equal in
size and speed to any that any nation is at the same time building; the
armament presumably to consist of as large a number as possible of very
heavy guns of one caliber, together with smaller guns to repel torpedo
attack; while there should be heavy armor, turbine engines, and in
short, every modern device. Of course, from time to time, cruisers,
colliers, torpedo-boat destroyers or torpedo boats, Will have to be
built also. All this, be it remembered, would not increase our Navy, but
would merely keep it at its present strength. Equally of course, the
ships will be absolutely useless if the men aboard them are not so
trained that they can get the best possible service out of the
formidable but delicate and complicated mechanisms intrusted to their
care. The marksmanship of our men has so improved during the last five
years that I deem it within bounds to say that the Navy is more than
twice as efficient, ship for ship, as half a decade ago. The Navy can
only attain proper efficiency if enough officers and men are provided,
and if these officers and men are given the chance (and required to take
advantage of it) to stay continually at sea and to exercise the fleets
singly and above all in squadron, the exercise to be of every kind and
to include unceasing practise at the guns, conducted under conditions
that will test marksmanship in time of war.

In both the Army and the Navy there is urgent need that everything
possible should be done to maintain the highest standard for the
personnel, alike as regards the officers and the enlisted men. I do not
believe that in any service there is a finer body of enlisted men and of
junior officer than we have in both the Army and the Navy, including the
Marine Corps. All possible encouragement to the enlisted men should be
given, in pay and otherwise, and everything practicable done to render
the service attractive to men of the right type. They should be held to
the strictest discharge of their duty, and in them a spirit should be
encouraged which demands not the mere performance of duty, but the
performance of far more than duty, if it conduces to the honor and the
interest of the American nation; and in return the amplest consideration
should be theirs.

West Point and Annapolis already turn out excellent officers. We do not
need to have these schools made more scholastic. On the contrary we
should never lose sight of the fact that the aim of each school is to
turn out a man who shall be above everything else a fighting man. In the
Army in particular it is not necessary that either the cavalry or
infantry officer should have special mathematical ability. Probably in
both schools the best part of the education is the high standard of
character and of professional morale which it confers.

But in both services there is urgent need for the establishment of a
principle of selection which will eliminate men after a certain age if
they can not be promoted from the subordinate ranks, and which will
bring into the higher ranks fewer men, and these at an earlier age. This
principle of selection will be objected to by good men of mediocre
capacity, who are fitted to do well while young in the lower positions,
but who are not fitted to do well when at an advanced age they come into
positions of command and of great responsibility. But the desire of
these men to be promoted to positions which they are not competent to
fill should not weigh against the interest of the Navy and the country.
At present our men, especially in the Navy, are kept far too long in the
junior grades, and then, at much too advanced an age, are put quickly
through the senior grades, often not attaining to these senior grades
until they are too old to be of real use in them; and if they are of
real use, being put through them so quickly that little benefit to the
Navy comes from their having been in them at all.

The Navy has one great advantage over the Army in the fact that the
officers of high rank are actually trained in the continual performance
of their duties; that is, in the management of the battle ships and
armored cruisers gathered into fleets. This is not true of the army
officers, who rarely have corresponding chances to exercise command over
troops under service conditions. The conduct of the Spanish war showed
the lamentable loss of life, the useless extravagance, and the
inefficiency certain to result, if during peace the high officials of
the War and Navy Departments are praised and rewarded only if they save
money at no matter what cost to the efficiency of the service, and if
the higher officers are given no chance whatever to exercise and
practise command. For years prior to the Spanish war the Secretaries of
War were praised chiefly if they practised economy; which economy,
especially in connection with the quartermaster, commissary, and medical
departments, was directly responsible for most of the mismanagement that
occurred in the war itself--and parenthetically be it observed that the
very people who clamored for the misdirected economy in the first place
were foremost to denounce the mismanagement, loss, and suffering which
were primarily due to this same misdirected economy and to the lack of
preparation it involved. There should soon be an increase in the number
of men for our coast defenses; these men should be of the right type and
properly trained; and there should therefore be an increase of pay for
certain skilled grades, especially in the coast artillery. Money should
be appropriated to permit troops to be massed in body and exercised in
maneuvers, particularly in marching. Such exercise during the summer
just past has been of incalculable benefit to the Army and should under
no circumstances be discontinued. If on these practise marches and in
these maneuvers elderly officers prove unable to bear the strain, they
should be retired at once, for the fact is conclusive as to their
unfitness for war; that is, for the only purpose because of which they
should be allowed to stay in the service. It is a real misfortune to
have scores of small company or regimental posts scattered throughout
the country; the Army should be gathered in a few brigade or division
posts; and the generals should be practised in handling the men in
masses. Neglect to provide for all of this means to incur the risk of
future disaster and disgrace.

The readiness and efficiency of both the Army and Navy in dealing with
the recent sudden crisis in Cuba illustrate afresh their value to the
Nation. This readiness and efficiency would have been very much less had
it not been for the existence of the General Staff in the Army and the
General Board in the Navy; both are essential to the proper development
and use of our military forces afloat and ashore. The troops that were
sent to Cuba were handled flawlessly. It was the swiftest mobilization
and dispatch of troops over sea ever accomplished by our Government. The
expedition landed completely equipped and ready for immediate service,
several of its organizations hardly remaining in Havana over night
before splitting up into detachments and going to their several posts,
It was a fine demonstration of the value and efficiency of the General
Staff. Similarly, it was owing in large part to the General Board that
the Navy was able at the outset to meet the Cuban crisis with such
instant efficiency; ship after ship appearing on the shortest notice at
any threatened point, while the Marine Corps in particular performed
indispensable service. The Army and Navy War Colleges are of
incalculable value to the two services, and they cooperate with
constantly increasing efficiency and importance.

The Congress has most wisely provided for a National Board for the
promotion of rifle practise. Excellent results have already come from
this law, but it does not go far enough. Our Regular Army is so small
that in any great war we should have to trust mainly to volunteers; and
in such event these volunteers should already know how to shoot; for if
a soldier has the fighting edge, and ability to take care of himself in
the open, his efficiency on the line of battle is almost directly
Proportionate to excellence in marksmanship. We should establish
shooting galleries in all the large public and military schools, should
maintain national target ranges in different parts of the country, and
should in every way encourage the formation of rifle clubs throughout
all parts of the land. The little Republic of Switzerland offers us an
excellent example in all matters connected with building up an efficient
citizen soldiery.

***

State of the Union Address
Theodore Roosevelt
December 3, 1907

To the Senate and House of Representatives:

No nation has greater resources than ours, and I think it can be
truthfully said that the citizens of no nation possess greater energy
and industrial ability. In no nation are the fundamental business
conditions sounder than in ours at this very moment; and it is foolish,
when such is the case, for people to hoard money instead of keeping it
in sound banks; for it is such hoarding that is the immediate occasion
of money stringency. Moreover, as a rule, the business of our people is
conducted with honesty and probity, and this applies alike to farms and
factories, to railroads and banks, to all our legitimate commercial
enterprises.

In any large body of men, however, there are certain to be some who are
dishonest, and if the conditions are such that these men prosper or
commit their misdeeds with impunity, their example is a very evil thing
for the community. Where these men are business men of great sagacity
and of temperament both unscrupulous and reckless, and where the
conditions are such that they act without supervision or control and at
first without effective check from public opinion, they delude many
innocent people into making investments or embarking in kinds of
business that are really unsound. When the misdeeds of these
successfully dishonest men are discovered, suffering comes not only upon
them, but upon the innocent men whom they have misled. It is a painful
awakening, whenever it occurs; and, naturally, when it does occur those
who suffer are apt to forget that the longer it was deferred the more
painful it would be. In the effort to punish the guilty it is both wise
and proper to endeavor so far as possible to minimize the distress of
those who have been misled by the guilty. Yet it is not possible to
refrain because of such distress from striving to put an end to the
misdeeds that are the ultimate causes of the suffering, and, as a means
to this end, where possible to punish those responsible for them. There
may be honest differences of opinion as to many governmental policies;
but surely there can be no such differences as to the need of
unflinching perseverance in the war against successful dishonesty.

In my Message to the Congress on December 5, 1905, I said:

"If the folly of man mars the general well-being, then those who are
innocent of the folly will have to pay part of the penalty incurred by
those who are guilty of the folly. A panic brought on by the speculative
folly of part of the business community would hurt the whole business
community; but such stoppage of welfare, though it might be severe,
would not be lasting. In the long run, the one vital factor in the
permanent prosperity of the country is the high individual character of
the average American worker, the average American citizen, no matter
whether his work be mental or manual, whether he be farmer or
wage-worker, business man or professional man.

"In our industrial and social system the interests of all men are so
closely intertwined that in the immense majority of cases a
straight-dealing man, who by his efficiency, by his ingenuity and
industry, benefits himself, must also benefit others. Normally, the man
of great productive capacity who becomes rich by guiding the labor of
many other men does so by enabling them to produce more than they could
produce without his guidance; and both he and they share in the benefit,
which comes also to the public at large. The superficial fact that the
sharing may be unequal must never blind us to the underlying fact that
there is this sharing, and that the benefit comes in some degree to each
man concerned.. Normally, the wageworker, the man of small means, and
the average consumer, as well as the average producer, are all alike
helped by making conditions such that the man of exceptional business
ability receives an exceptional reward for his ability Something can be
done by legislation to help the general prosperity; but no such help of
a permanently beneficial character can be given to the less able and
less fortunate save as the results of a policy which shall inure to the
advantage of all industrious and efficient people who act decently; and
this is only another way of saying that any benefit which comes to the
less able and less fortunate must of necessity come even more to the
more able and more fortunate. If, therefore, the less fortunate man is
moved by envy of his more fortunate brother to strike at the conditions
under which they have both, though unequally, prospered, the result will
assuredly be that while damage may come to the one struck at, it will
visit with an even heavier load the one who strikes the blow. Taken as a
whole, we must all go up or go down together.

"Yet, while not merely admitting, but insisting upon this, it is also
true that where there is no governmental restraint or supervision some
of the exceptional men use their energies, not in ways that are for the
common good, but in ways which tell against this common good. The
fortunes amassed through corporate organization are now so large, and
vest such power in those that wield them, as to make it a matter of
necessity to give to the sovereign--that is, to the Government, which
represents the people as a whole--some effective power of supervision
over their corporate use. In order to insure a healthy social and
industrial life, every big corporation should be held responsible by,
and be accountable to, some sovereign strong enough to control its
conduct. I am in no sense hostile to corporations. This is an age of
combination, and any effort to prevent all combination will be not only
useless, but in the end vicious, because of the contempt for law which
the failure to enforce law inevitably produces. We should, moreover,
recognize in cordial and ample fashion the immense good effected by
corporate agencies in a country such as ours, and the wealth of
intellect, energy, and fidelity devoted to their service, and therefore
normally to the service of the public, by their officers and directors.
The corporation has come to stay, just as the trade union has come to
stay. Each can do and has done great good. Each should be favored so
long as it does good. But each should be sharply checked where it acts
against law and justice.

"The makers of our National Constitution provided especially that the
regulation of interstate commerce should come within the sphere of the
General Government. The arguments in favor of their taking this stand
were even then overwhelming. But they are far stronger to-day, in view
of the enormous development of great business agencies, usually
corporate in form. Experience has shown conclusively that it is useless
to try to get any adequate regulation and supervision of these great
corporations by State action. Such regulation and supervision can only
be effectively exercised by a sovereign whose jurisdiction is
coextensive with the field of work of the corporations--that is, by the
National Government. I believe that this regulation and supervision can
be obtained by the enactment of law by the Congress. Our steady aim
should be by legislation, cautiously and carefully undertaken, but
resolutely persevered in, to assert the sovereignty of the National
Government by affirmative action.

"This is only in form an innovation. In substance it is merely a
restoration; for from the earliest time such regulation of industrial
activities has been recognized in the action of the lawmaking bodies;
and all that I propose is to meet the changed conditions in such manner
as will prevent the Commonwealth abdicating the power it has always
possessed, not only in this country, but also in England before and
since this country became a separate nation.

"It has been a misfortune that the National laws on this subject have
hitherto been of a negative or prohibitive rather than an affirmative
kind, and still more that they have in part sought to prohibit what
could not be effectively prohibited, and have in part in their
prohibitions confounded what should be allowed and what should not be
allowed. It is generally useless to try to prohibit all restraint on
competition, whether this restraint be reasonable or unreasonable; and
where it is not useless it is generally hurtful. The successful
prosecution of one device to evade the law immediately develops another
device to accomplish the same purpose. What is needed is not sweeping
prohibition of every arrangement, good or bad, which may tend to
restrict competition, but such adequate supervision and regulation as
will prevent any restriction of competition from being to the detriment
of the public, as well as such supervision and regulation as will
prevent other abuses in no way connected with restriction of
competition."

I have called your attention in these quotations to what I have already
said because I am satisfied that it is the duty of the National
Government to embody in action the principles thus expressed.

No small part of the trouble that we have comes from carrying to an
extreme the national virtue of self-reliance, of independence in
initiative and action. It is wise to conserve this virtue and to provide
for its fullest exercise, compatible with seeing that liberty does not
become a liberty to wrong others. Unfortunately, this is the kind of
liberty that the lack of all effective regulation inevitably breeds. The
founders of the Constitution provided that the National Government
should have complete and sole control of interstate commerce. There was
then practically no interstate business save such as was conducted by
water, and this the National Government at once proceeded to regulate in
thoroughgoing and effective fashion. Conditions have now so wholly
changed that the interstate commerce by water is insignificant compared
with the amount that goes by land, and almost all big business concerns
are now engaged in interstate commerce. As a result, it can be but
partially and imperfectly controlled or regulated by the action of any
one of the several States; such action inevitably tending to be either
too drastic or else too lax, and in either case ineffective for purposes
of justice. Only the National Government can in thoroughgoing fashion
exercise the needed control. This does not mean that there should be any
extension of Federal authority, for such authority already exists under
the Constitution in amplest and most far-reaching form; but it does mean
that there should be an extension of Federal activity. This is not
advocating centralization. It is merely looking facts in the face, and
realizing that centralization in business has already come and can not
be avoided or undone, and that the public at large can only protect
itself from certain evil effects of this business centralization by
providing better methods for the exercise of control through the
authority already centralized in the National Government by the
Constitution itself. There must be no ball in the healthy constructive
course of action which this Nation has elected to pursue, and has
steadily pursued, during the last six years, as shown both in the
legislation of the Congress and the administration of the law by the
Department of Justice. The most vital need is in connection with the
railroads. As to these, in my judgment there should now be either a
national incorporation act or a law licensing railway companies to
engage in interstate commerce upon certain conditions. The law should be
so framed as to give to the Interstate Commerce Commission power to pass
upon the future issue of securities, while ample means should be
provided to enable the Commission, whenever in its judgment it is
necessary, to make a physical valuation of any railroad. As I stated in
my Message to the Congress a year ago, railroads should be given power
to enter into agreements, subject to these agreements being made public
in minute detail and to the consent of the Interstate Commerce
Commission being first obtained. Until the National Government assumes
proper control of interstate commerce, in the exercise of the authority
it already possesses, it will be impossible either to give to or to get
from the railroads full justice. The railroads and all other great
corporations will do well to recognize that this control must come; the
only question is as to what governmental body can most wisely exercise
it. The courts will determine the limits within which the Federal
authority can exercise it, and there will still remain ample work within
each State for the railway commission of that State; and the National
Interstate Commerce Commission will work in harmony with the several
State commissions, each within its own province, to achieve the desired
end.

Moreover, in my judgment there should be additional legislation looking
to the proper control of the great business concerns engaged in
interstate business, this control to be exercised for their own benefit
and prosperity no less than for the protection of investors and of the
general public. As I have repeatedly said in Messages to the Congress
and elsewhere, experience has definitely shown not merely the unwisdom
but the futility of endeavoring to put a stop to all business
combinations. Modern industrial conditions are such that combination is
not only necessary but inevitable. It is so in the world of business
just as it is so in the world of labor, and it is as idle to desire to
put an end to all corporations, to all big combinations of capital, as
to desire to put an end to combinations of labor. Corporation and labor
union alike have come to stay. Each if properly managed is a source of
good and not evil. Whenever in either there is evil, it should be
promptly held to account; but it should receive hearty encouragement so
long as it is properly managed. It is profoundly immoral to put or keep
on the statute books a law, nominally in the interest of public morality
that really puts a premium upon public immorality, by undertaking to
forbid honest men from doing what must be done under modern business
conditions, so that the law itself provides that its own infraction must
be the condition precedent upon business success. To aim at the
accomplishment of too much usually means the accomplishment of too
little, and often the doing of positive damage. In my Message to the
Congress a year ago, in speaking of the antitrust laws, I said:

"The actual working of our laws has shown that the effort to prohibit
all combination, good or bad, is noxious where it is not ineffective.
Combination of capital, like combination of labor, is a necessary
element in our present industrial system. It is not possible completely
to prevent it; and if it were possible, such complete prevention would
do damage to the body politic. What we need is not vainly to try to
prevent all combination, but to secure such rigorous and adequate
control and supervision of the combinations as to prevent their injuring
the public, or existing in such forms as inevitably to threaten injury.
It is unfortunate that our present laws should forbid all combinations
instead of sharply discriminating between those combinations which do
evil. Often railroads would like to combine for the purpose of
preventing a big shipper from maintaining improper advantages at the
expense of small shippers and of the general public. Such a combination,
instead of being forbidden by law, should be favored. It is a public
evil to have on the statute books a law incapable of full enforcement,
because both judges and juries realize that its full enforcement would
destroy the business of the country; for the result is to make decent
men violators of the law against their will, and to put a premium on the
behavior of the willful wrongdoers. Such a result in turn tends to throw
the decent man and the willful wrongdoer into close association, and in
the end to drag down the former to the latter's level; for the man who
becomes a lawbreaker in one way unhappily tends to lose all respect for
law and to be willing to break it in many ways. No more scathing
condemnation could be visited upon a law than is contained in the words
of the Interstate Commerce Commission when, in commenting upon the fact
that the numerous joint traffic associations do technically violate the
law, they say: The decision of the United States Supreme Court in the
Trans-Missouri case and the Joint Traffic Association case has produced
no practical effect upon the railway operations of the country. Such
associations, in fact, exist now as they did before these decisions, and
with the same general effect. In justice to all parties, we ought
probably to add that it is difficult to see how our interstate railways
could be operated with due regard to the interest of the shipper and the
railway without concerted action of the kind afforded through these
associations.

"This means that the law as construed by the Supreme Court is such that
the business of the country can not be conducted without breaking it."

As I have elsewhere said:

"All this is substantially what I have said over and over again. Surely
it ought not to be necessary to say that it in no shape or way
represents any hostility to corporations as such. On the contrary, it
means a frank recognition of the fact that combinations of capital, like
combinations of labor, are a natural result of modern conditions and of
our National development. As far as in my ability lies my endeavor is
and will be to prevent abuse of power by either and to favor both so
long as they do well. The aim of the National Government is quite as
much to favor and protect honest corporations, honest business men of
wealth, as to bring to justice those individuals and corporations
representing dishonest methods. Most certainly there will be no
relaxation by the Government authorities in the effort to get at any
great railroad wrecker--any man who by clever swindling devices robs
investors, oppresses wage-workers, and does injustice to the general
public. But any such move as this is in the interest of honest railway
operators, of honest corporations, and of those who, when they invest
their small savings in stocks and bonds, wish to be assured that these
will represent money honestly expended for legitimate business purposes.
To confer upon the National Government the power for which I ask would
be a check upon overcapitalization and upon the clever gamblers who
benefit by overcapitalization. But it alone would mean an increase in
the value, an increase in the safety of the stocks and bonds of
law-abiding, honestly managed railroads, and would render it far easier
to market their securities. I believe in proper publicity. There has
been complaint of some of the investigations recently carried on, but
those who complain should put the blame where it belongs--upon the
misdeeds which are done in darkness and not upon the investigations
which brought them to light. The Administration is responsible for
turning on the light, but it is not responsible for what the light
showed. I ask for full power to be given the Federal Government, because
no single State can by legislation effectually cope with these powerful
corporations engaged in interstate commerce, and, while doing them full
justice, exact from them in return full justice to others. The
conditions of railroad activity, the conditions of our immense
interstate commerce, are such as to make the Central Government alone
competent to exercise full supervision and control.

"The grave abuses in individual cases of railroad management in the past
represent wrongs not merely to the general public, but, above all,
wrongs to fair-dealing and honest corporations and men of wealth,
because they excite a popular anger and distrust which from the very
nature of the case tends to include in the sweep of its resentment good
and bad alike. From the standpoint of the public I can not too earnestly
say that as soon as the natural and proper resentment aroused by these
abuses becomes indiscriminate and unthinking, it also becomes not merely
unwise and unfair, but calculated to defeat the very ends which those
feeling it have in view. There has been plenty of dishonest work by
corporations in the past. There will not be the slightest let-up in the
effort to hunt down and punish every dishonest man. But the bulk of our
business is honestly done. In the natural indignation the people feel
over the dishonesty, it is essential that they should not lose their
heads and get drawn into an indiscriminate raid upon all corporations,
all people of wealth, whether they do well or ill. Out of any such wild
movement good will not come, can not come, and never has come. On the
contrary, the surest way to invite reaction is to follow the lead of
either demagogue or visionary in a sweeping assault upon property values
and upon public confidence, which would work incalculable damage in the
business world and would produce such distrust of the agitators that in
the revulsion the distrust would extend to honest men who, in sincere
and same fashion, are trying to remedy the evils."

The antitrust law should not be repealed; but it should be made both
more efficient and more in harmony with actual conditions. It should be
so amended as to forbid only the kind of combination which does harm to
the general public, such amendment to be accompanied by, or to be an
incident of, a grant of supervisory power to the Government over these
big concerns engaged in interstate business. This should be accompanied
by provision for the compulsory publication of accounts and the
subjection of books and papers to the inspection of the Government
officials. A beginning has already been made for such supervision by the
establishment of the Bureau of Corporations.

The antitrust law should not prohibit combinations that do no injustice
to the public, still less those the existence of which is on the whole
of benefit to the public. But even if this feature of the law were
abolished, there would remain as an equally objectionable feature the
difficulty and delay now incident to its enforcement. The Government
must now submit to irksome and repeated delay before obtaining a final
decision of the courts upon proceedings instituted, and even a favorable
decree may mean an empty victory. Moreover, to attempt to control these
corporations by lawsuits means to impose upon both the Department of
Justice and the courts an impossible burden; it is not feasible to carry
on more than a limited number of such suits. Such a law to be really
effective must of course be administered by an executive body, and not
merely by means of lawsuits. The design should be to prevent the abuses
incident to the creation of unhealthy and improper combinations, instead
of waiting until they are in existence and then attempting to destroy
them by civil or criminal proceedings.

A combination should not be tolerated if it abuse the power acquired by
combination to the public detriment. No corporation or association of
any kind should be permitted to engage in foreign or interstate commerce
that is formed for the purpose of, or whose operations create, a
monopoly or general control of the production, sale, or distribution of
any one or more of the prime necessities of life or articles of general
use and necessity. Such combinations are against public policy; they
violate the common law; the doors of the courts are closed to those who
are parties to them, and I believe the Congress can close the channels
of interstate commerce against them for its protection. The law should
make its prohibitions and permissions as clear and definite as possible,
leaving the least possible room for arbitrary action, or allegation of
such action, on the part of the Executive, or of divergent
interpretations by the courts. Among the points to be aimed at should be
the prohibition of unhealthy competition, such as by rendering service
at an actual loss for the purpose of crushing out competition, the
prevention of inflation of capital, and the prohibition of a
corporation's making exclusive trade with itself a condition of having
any trade with itself. Reasonable agreements between, or combinations
of, corporations should be permitted, provided they are submitted to and
approved by some appropriate Government body.

The Congress has the power to charter corporations to engage in
interstate and foreign commerce, and a general law can be enacted under
the provisions of which existing corporations could take out Federal
charters and new Federal corporations could be created. An essential
provision of such a law should be a method of predetermining by some
Federal board or commission whether the applicant for a Federal charter
was an association or combination within the restrictions of the Federal
law. Provision should also be made for complete publicity in all matters
affecting the public and complete protection to the investing public and
the shareholders in the matter of issuing corporate securities. If an
incorporation law is not deemed advisable, a license act for big
interstate corporations might be enacted; or a combination of the two
might be tried. The supervision established might be analogous to that
now exercised over national banks. At least, the antitrust act should be
supplemented by specific prohibitions of the methods which experience
has shown have been of most service in enabling monopolistic
combinations to crush out competition. The real owners of a corporation
should be compelled to do business in their own name. The right to hold
stock in other corporations should hereafter be denied to interstate
corporations, unless on approval by the Government officials, and a
prerequisite to such approval should be the listing with the Government
of all owners and stockholders, both by the corporation owning such
stock and by the corporation in which such stock is owned.

To confer upon the National Government, in connection with the amendment
I advocate in the antitrust law, power of supervision over big business
concerns engaged in interstate commerce, would benefit them as it has
benefited the national banks. In the recent business crisis it is
noteworthy that the institutions which failed were institutions which
were not under the supervision and control of the National Government.
Those which were under National control stood the test.

National control of the kind above advocated would be to the benefit of
every well-managed railway. From the standpoint of the public there is
need for additional tracks, additional terminals, and improvements in
the actual handling of the railroads, and all this as rapidly as
possible. Ample, safe, and speedy transportation facilities are even
more necessary than cheap transportation. Therefore, there is need for
the investment of money which will provide for all these things while at
the same time securing as far as is possible better wages and shorter
hours for their employees. Therefore, while there must be just and
reasonable regulation of rates, we should be the first to protest
against any arbitrary and unthinking movement to cut them down without
the fullest and most careful consideration of all interests concerned
and of the actual needs of the situation. Only a special body of men
acting for the National Government under authority conferred upon it by
the Congress is competent to pass judgment on such a matter.

Those who fear, from any reason, the extension of Federal activity will
do well to study the history not only of the national banking act but of
the pure-food law, and notably the meat inspection law recently enacted.
The pure-food law was opposed so violently that its passage was delayed
for a decade; yet it has worked unmixed and immediate good. The meat
inspection law was even more violently assailed; and the same men who
now denounce the attitude of the National Government in seeking to
oversee and control the workings of interstate common carriers and
business concerns, then asserted that we were "discrediting and ruining
a great American industry." Two years have not elapsed, and already it
has become evident that the great benefit the law confers upon the
public is accompanied by an equal benefit to the reputable packing
establishments. The latter are better off under the law than they were
without it. The benefit to interstate common carriers and business
concerns from the legislation I advocate would be equally marked.

Incidentally, in the passage of the pure-food law the action of the
various State food and dairy commissioners showed in striking fashion
how much good for the whole people results from the hearty cooperation
of the Federal and State officials in securing a given reform. It is
primarily to the action of these State commissioners that we owe the
enactment of this law; for they aroused the people, first to demand the
enactment and enforcement of State laws on the subject, and then the
enactment of the Federal law, without which the State laws were largely
ineffective. There must be the closest cooperation between the National
and State governments in administering these laws.

In my Message to the Congress a year ago I spoke as follows of the
currency:

"I especially call your attention to the condition of our currency laws.
The national-bank act has ably served a great purpose in aiding the
enormous business development of the country, and within ten years there
has been an increase in circulation per capita from $21.41 to $33.08.
For several years evidence has been accumulating that additional
legislation is needed. The recurrence of each crop season emphasizes the
defects of the present laws. There must soon be a revision of them,
because to leave them as they are means to incur liability of business
disaster. Since your body adjourned there has been a fluctuation in the
interest on call money from 2 per cent to 30 percent, and the
fluctuation was even greater during the preceding six months. The
Secretary of the Treasury had to step in and by wise action put a stop
to the most violent period of oscillation. Even worse than such
fluctuation is the advance in commercial rates and the uncertainty felt
in the sufficiency of credit even at high rates. All commercial
interests suffer during each crop period. Excessive rates for call money
in New York attract money from the interior banks into the speculative
field. This depletes the fund that would otherwise be available for
commercial uses, and commercial borrowers are forced to pay abnormal
rates, so that each fall a tax, in the shape of increased interest
charges, is placed on the whole commerce of the country.

"The mere statement of these facts shows that our present system is
seriously defective. There is need of a change. Unfortunately, however,
many of the proposed changes must be ruled from consideration because
they are complicated, are not easy of comprehension, and tend to disturb
existing rights and interests. We must also rule out any plan which
would materially impair the value of the United States 2 per cent bonds
now pledged to secure circulation, the issue of which was made under
conditions peculiarly creditable to the Treasury. I do not press any
especial plan. Various plans have recently been proposed by expert
committees of bankers. Among the plans which are possibly feasible and
which certainly should receive your consideration is that repeatedly
brought to your attention by the present Secretary of the Treasury, the
essential features of which have been approved by many prominent bankers
and business men. According to this plan national banks should be
permitted to issue a specified proportion of their capital in notes of a
given kind, the issue to be taxed at so high a rate as to drive the
notes back when not wanted in legitimate trade. This plan would not
permit the issue of currency to give banks additional profits, but to
meet the emergency presented by times of stringency.

"I do not say that this is the right system. I only advance it to
emphasize my belief that there is need for the adoption of some system
which shall be automatic and open to all sound banks, so as to avoid all
possibility of discrimination and favoritism. Such a plan would tend to
prevent the spasms of high money and speculation which now obtain in the
New York market; for at present there is too much currency at certain
seasons of the year, and its accumulation at New York tempts bankers to
lend it at low rates for speculative purposes; whereas at other times
when the crops are being moved there is urgent need for a large but
temporary increase in the currency supply. It must never be forgotten
that this question concerns business men generally quite as much as
bankers; especially is this true of stockmen, farmers, and business men
in the West; for at present at certain seasons of the year the
difference in interest rates between the East and the West is from 6 to
10 per cent, whereas in Canada the corresponding difference is but 2 per
cent. Any plan must, of course, guard the interests of western and
southern bankers as carefully as it guards the interests of New York or
Chicago bankers, and must be drawn from the standpoints of the farmer
and the merchant no less than from the standpoints of the city banker
and the country banker."

I again urge on the Congress the need of immediate attention to this
matter. We need a greater elasticity in our currency; provided, of
course, that we recognize the even greater need of a safe and secure
currency. There must always be the most rigid examination by the
National authorities. Provision should be made for an emergency
currency. The emergency issue should, of course, be made with an
effective guaranty, and upon conditions carefully prescribed by the
Government. Such emergency issue must be based on adequate securities
approved by the Government, and must be issued under a heavy tax. This
would permit currency being issued when the demand for it was urgent,
while securing its requirement as the demand fell off. It is worth
investigating to determine whether officers and directors of national
banks should ever be allowed to loan to themselves. Trust companies
should be subject to the same supervision as banks; legislation to this
effect should be enacted for the District of Columbia and the
Territories.

Yet we must also remember that even the wisest legislation on the
subject can only accomplish a certain amount. No legislation can by any
possibility guarantee the business community against the results of
speculative folly any more than it can guarantee an individual against
the results of his extravagance. When an individual mortgages his house
to buy an automobile he invites disaster; and when wealthy men, or men
who pose as such, or are unscrupulously or foolishly eager to become
such, indulge in reckless speculation--especially if it is accompanied
by dishonesty--they jeopardize not only their own future but the future
of all their innocent fellow-citizens, for the expose the whole business
community to panic and distress.

The income account of the Nation is in a most satisfactory condition.
For the six fiscal years ending with the 1st of July last, the total
expenditures and revenues of the National Government, exclusive of the
postal revenues and expenditures, were, in round numbers, revenues,
$3,465,000,0000, and expenditures, $3,275,000,000. The net excess of
income over expenditures, including in the latter the fifty millions
expended for the Panama Canal, was one hundred and ninety million
dollars for the six years, an average of about thirty-one millions a
year. This represents an approximation between income and outgo which it
would be hard to improve. The satisfactory working of the present tariff
law has been chiefly responsible for this excellent showing.
Nevertheless, there is an evident and constantly growing feeling among
our people that the time is rapidly approaching when our system of
revenue legislation must be revised.

This country is definitely committed to the protective system and any
effort to uproot it could not but cause widespread industrial disaster.
In other words, the principle of the present tariff law could not with
wisdom be changed. But in a country of such phenomenal growth as ours it
is probably well that every dozen years or so the tariff laws should be
carefully scrutinized so as to see that no excessive or improper
benefits are conferred thereby, that proper revenue is provided, and
that our foreign trade is encouraged. There must always be as a minimum
a tariff which will not only allow for the collection of an ample
revenue but which will at least make good the difference in cost of
production here and abroad; that is, the difference in the labor cost
here and abroad, for the well-being of the wage-worker must ever be a
cardinal point of American policy. The question should be approached
purely from a business standpoint; both the time and the manner of the
change being such as to arouse the minimum of agitation and disturbance
in the business world, and to give the least play for selfish and
factional motives. The sole consideration should be to see that the sum
total of changes represents the public good. This means that the subject
can not with wisdom be dealt with in the year preceding a Presidential
election, because as a matter of fact experience has conclusively shown
that at such a time it is impossible to get men to treat it from the
standpoint of the public good. In my judgment the wise time to deal with
the matter is immediately after such election.

When our tax laws are revised the question of an income tax and an
inheritance tax should receive the careful attention of our legislators.
In my judgment both of these taxes should be part of our system of
Federal taxation. I speak diffidently about the income tax because one
scheme for an income tax was declared unconstitutional by the Supreme
Court; while in addition it is a difficult tax to administer in its
practical working, and great care would have to be exercised to see that
it was not evaded by the very men whom it was most desirable to have
taxed, for if so evaded it would, of course, be worse than no tax at
all; as the least desirable of all taxes is the tax which bears heavily
upon the honest as compared with the dishonest man. Nevertheless, a
graduated income tax of the proper type would be a desirable feature of
Federal taxation, and it is to be hoped that one may be devised which
the Supreme Court will declare constitutional. The inheritance tax,
however, is both a far better method of taxation, and far more important
for the purpose of having the fortunes of the country bear in proportion
to their increase in size a corresponding increase and burden of
taxation. The Government has the absolute right to decide as to the
terms upon which a man shall receive a bequest or devise from another,
and this point in the devolution of property is especially appropriate
for the imposition of a tax. Laws imposing such taxes have repeatedly
been placed upon the National statute books and as repeatedly declared
constitutional by the courts; and these laws contained the progressive
principle, that is, after a certain amount is reached the bequest or
gift, in life or death, is increasingly burdened and the rate of
taxation is increased in proportion to the remoteness of blood of the
man receiving the bequest. These principles are recognized already in
the leading civilized nations of the world. In Great Britain all the
estates worth $5,000 or less are practically exempt from death duties,
while the increase is such that when an estate exceeds five millions of
dollars in value and passes to a distant kinsman or stranger in blood
the Government receives all told an amount equivalent to nearly a fifth
of the whole estate. In France so much of an inheritance as exceeds
$10,000,000 pays over a fifth to the State if it passes to a distant
relative. The German law is especially interesting to us because it
makes the inheritance tax an imperial measure while allotting to the
individual States of the Empire a portion of the proceeds and permitting
them to impose taxes in addition to those imposed by the Imperial
Government. Small inheritances are exempt, but the tax is so sharply
progressive that when the inheritance is still not very large, provided
it is not an agricultural or a forest land, it is taxed at the rate of
25 per cent if it goes to distant relatives. There is no reason why in
the United States the National Government should not impose inheritance
taxes in addition to those imposed by the States, and when we last had
an inheritance tax about one-half of the States levied such taxes
concurrently with the National Government, making a combined maximum
rate, in some cases as high as 25 per cent. The French law has one
feature which is to be heartily commended. The progressive principle is
so applied that each higher rate is imposed only on the excess above the
amount subject to the next lower rate; so that each increase of rate
will apply only to a certain amount above a certain maximum. The tax
should if possible be made to bear more heavily upon those residing
without the country than within it. A heavy progressive tax upon a very
large fortune is in no way such a tax upon thrift or industry as a like
would be on a small fortune. No advantage comes either to the country as
a whole or to the individuals inheriting the money by permitting the
transmission in their entirety of the enormous fortunes which would be
affected by such a tax; and as an incident to its function of revenue
raising, such a tax would help to preserve a measurable equality of
opportunity for the people of the generations growing to manhood. We
have not the slightest sympathy with that socialistic idea which would
try to put laziness, thriftlessness and inefficiency on a par with
industry, thrift and efficiency; which would strive to break up not
merely private property, but what is far more important, the home, the
chief prop upon which our whole civilization stands. Such a theory, if
ever adopted, would mean the ruin of the entire country--a ruin which
would bear heaviest upon the weakest, upon those least able to shift for
themselves. But proposals for legislation such as this herein advocated
are directly opposed to this class of socialistic theories. Our aim is
to recognize what Lincoln pointed out: The fact that there are some
respects in which men are obviously not equal; but also to insist that
there should be an equality of self-respect and of mutual respect, an
equality of rights before the law, and at least an approximate equality
in the conditions under which each man obtains the chance to show the
stuff that is in him when compared to his fellows.

A few years ago there was loud complaint that the law could not be
invoked against wealthy offenders. There is no such complaint now. The
course of the Department of Justice during the last few years has been
such as to make it evident that no man stands above the law, that no
corporation is so wealthy that it can not be held to account. The
Department of Justice has been as prompt to proceed against the
wealthiest malefactor whose crime was one of greed and cunning as to
proceed against the agitator who incites to brutal violence. Everything
that can be done under the existing law, and with the existing state of
public opinion, which so profoundly influences both the courts and
juries, has been done. But the laws themselves need strengthening in
more than one important point; they should be made more definite, so
that no honest man can be led unwittingly to break them, and so that the
real wrongdoer can be readily punished.

Moreover, there must be the public opinion back of the laws or the laws
themselves will be of no avail. At present, while the average juryman
undoubtedly wishes to see trusts broken up, and is quite ready to fine
the corporation itself, he is very reluctant to find the facts proven
beyond a reasonable doubt when it comes to sending to jail a member of
the business community for indulging in practices which are profoundly
unhealthy, but which, unfortunately, the business community has grown to
recognize as well-nigh normal. Both the present condition of the law and
the present temper of juries render it a task of extreme difficulty to
get at the real wrongdoer in any such case, especially by imprisonment.
Yet it is from every standpoint far preferable to punish the prime
offender by imprisonment rather than to fine the corporation, with the
attendant damage to stockholders.

The two great evils in the execution of our criminal laws to-day are
sentimentality and technicality. For the latter the remedy must come
from the hands of the legislatures, the courts, and the lawyers. The
other must depend for its cure upon the gradual growth of a sound public
opinion which shall insist that regard for the law and the demands of
reason shall control all other influences and emotions in the jury box.
Both of these evils must be removed or public discontent with the
criminal law will continue.

Instances of abuse in the granting of injunctions in labor disputes
continue to occur, and the resentment in the minds of those who feel
that their rights are being invaded and their liberty of action and of
speech unwarrantably restrained continues likewise to grow. Much of the
attack on the use of the process of injunction is wholly without
warrant; but I am constrained to express the belief that for some of it
there is warrant. This question is becoming more and more one of prime
importance, and unless the courts will themselves deal with it in
effective manner, it is certain ultimately to demand some form of
legislative action. It would be most unfortunate for our social welfare
if we should permit many honest and law-abiding citizens to feel that
they had just cause for regarding our courts with hostility. I earnestly
commend to the attention of the Congress this matter, so that some way
may be devised which will limit the abuse of injunctions and protect
those rights which from time to time it unwarrantably invades. Moreover,
discontent is often expressed with the use of the process of injunction
by the courts, not only in labor disputes, but where State laws are
concerned. I refrain from discussion of this question as I am informed
that it will soon receive the consideration of the Supreme Court.

The Federal courts must of course decide ultimately what are the
respective spheres of State and Nation in connection with any law, State
or National, and they must decide definitely and finally in matters
affecting individual citizens, not only as to the rights and wrongs of
labor but as to the rights and wrongs of capital; and the National
Government must always see that the decision of the court is put into
effect. The process of injunction is an essential adjunct of the court's
doing its work well; and as preventive measures are always better than
remedial, the wise use of this process is from every standpoint
commendable. But where it is recklessly or unnecessarily used, the abuse
should he censured, above all by the very men who are properly anxious
to prevent any effort to shear the courts of this necessary power. The
court's decision must be final; the protest is only against the conduct
of individual judges in needlessly anticipating such final decision, or
in the tyrannical use of what is nominally a temporary injunction to
accomplish what is in fact a permanent decision.

The loss of life and limb from railroad accidents in this country has
become appalling. It is a subject of which the National Government
should take supervision. It might be well to begin by providing for a
Federal inspection of interstate railroads somewhat along the lines of
Federal inspection of steamboats, although not going so far; perhaps at
first all that it would be necessary to have would be some officer whose
duty would be to investigate all accidents on interstate railroads and
report in detail the causes thereof. Such an officer should make it his
business to get into close touch with railroad operating men so as to
become thoroughly familiar with every side of the question, the idea
being to work along the lines of the present steamboat inspection law.

The National Government should be a model employer. It should demand the
highest quality of service from each of its employees and it should care
for all of them properly in return. Congress should adopt legislation
providing limited but definite compensation for accidents to all workmen
within the scope of the Federal power, including employees of navy yards
and arsenals. In other words, a model employers' liability act,
far-reaching and thoroughgoing, should be enacted which should apply to
all positions, public and private, over which the National Government
has jurisdiction. The number of accidents to wage-workers, including
those that are preventable and those that are not, has become appalling
in the mechanical, manufacturing, and transportation operations of the
day. It works grim hardship to the ordinary wage-worker and his family
to have the effect of such an accident fall solely upon him; and, on the
other hand, there are whole classes of attorneys who exist only by
inciting men who may or may not have been wronged to undertake suits for
negligence. As a matter of fact a suit for negligence is generally an
inadequate remedy for the person injured, while it often causes
altogether disproportionate annoyance to the employer. The law should be
made such that the payment for accidents by the employer would be
automatic instead of being a matter for lawsuits. Workmen should receive
certain and definite compensation for all accidents in industry
irrespective of negligence. The employer is the agent of the public and
on his own responsibility and for his own profit he serves the public.
When he starts in motion agencies which create risks for others, he
should take all the ordinary and extraordinary risks involved; and the
risk he thus at the moment assumes will ultimately be assumed, as it
ought to be, by the general public. Only in this way can the shock of
the accident be diffused, instead of falling upon the man or woman least
able to bear it, as is now the case. The community at large should share
the burdens as well as the benefits of industry. By the proposed law,
employers would gain a desirable certainty of obligation and get rid of
litigation to determine it, while the workman and his family would be
relieved from a crushing load. With such a policy would come increased
care, and accidents would be reduced in number. The National laws
providing for employers' liability on railroads engaged in interstate
commerce and for safety appliances, as well as for diminishing the hours
any employee of a railroad should be permitted to work, should all be
strengthened wherever in actual practice they have shown weakness; they
should be kept on the statute books in thoroughgoing form.

The constitutionality of the employers' liability act passed by the
preceding Congress has been carried before the courts. In two
jurisdictions the law has been declared unconstitutional, and in three
jurisdictions its constitutionality has been affirmed. The question has
been carried to the Supreme Court, the case has been heard by that
tribunal, and a decision is expected at an early date. In the event that
the court should affirm the constitutionality of the act, I urge further
legislation along the lines advocated in my Message to the preceding
Congress. The practice of putting the entire burden of loss to life or
limb upon the victim or the victim's family is a form of social
injustice in which the United States stands in unenviable prominence. In
both our Federal and State legislation we have, with few exceptions,
scarcely gone farther than the repeal of the fellow-servant principle of
the old law of liability, and in some of our States even this slight
modification of a completely outgrown principle has not yet been
secured. The legislation of the rest of the industrial world stands out
in striking contrast to our backwardness in this respect. Since 1895
practically every country of Europe, together with Great Britain, New
Zealand, Australia, British Columbia, and the Cape of Good Hope has
enacted legislation embodying in one form or another the complete
recognition of the principle which places upon the employer the entire
trade risk in the various lines of industry. I urge upon the Congress
the enactment of a law which will at the same time bring Federal
legislation up to the standard already established by all the European
countries, and which will serve as a stimulus to the various States to
perfect their legislation in this regard.

The Congress should consider the extension of the eight-hour law. The
constitutionality of the present law has recently been called into
question, and the Supreme Court has decided that the existing
legislation is unquestionably within the powers of the Congress. The
principle of the eight-hour day should as rapidly and as far as
practicable be extended to the entire work carried on by the Government;
and the present law should be amended to embrace contracts on those
public works which the present wording of the act has been construed to
exclude. The general introduction of the eight-hour day should be the
goal toward which we should steadily tend, and the Government should set
the example in this respect.

Strikes and lockouts, with their attendant loss and suffering, continue
to increase. For the five years ending December 31, 1905, the number of
strikes was greater than those in any previous ten years and was double
the number in the preceding five years. These figures indicate the
increasing need of providing some machinery to deal with this class of
disturbance in the interest alike of the employer, the employee, and the
general public. I renew my previous recommendation that the Congress
favorably consider the matter of creating the machinery for compulsory
investigation of such industrial controversies as are of sufficient
magnitude and of sufficient concern to the people of the country as a
whole to warrant the Federal Government in taking action.

The need for some provision for such investigation was forcibly
illustrated during the past summer. A strike of telegraph operators
seriously interfered with telegraphic communication, causing great
damage to business interests and serious inconvenience to the general
public. Appeals were made to me from many parts of the country, from
city councils, from boards of trade, from chambers of commerce, and from
labor organizations, urging that steps be taken to terminate the strike.
Everything that could with any propriety be done by a representative of
the Government was done, without avail, and for weeks the public stood
by and suffered without recourse of any kind. Had the machinery existed
and had there been authority for compulsory investigation of the
dispute, the public would have been placed in possession of the merits
of the controversy, and public opinion would probably have brought about
a prompt adjustment.

Each successive step creating machinery for the adjustment of labor
difficulties must be taken with caution, but we should endeavor to make
progress in this direction.

The provisions of the act of 1898 creating the chairman of the
Interstate Commerce Commission and the Commissioner of Labor a board of
mediation in controversies between interstate railroads and their
employees has, for the first time, been subjected to serious tests
within the past year, and the wisdom of the experiment has been fully
demonstrated. The creation of a board for compulsory investigation in
cases where mediation fails and arbitration is rejected is the next
logical step in a progressive program.

It is certain that for some time to come there will be a constant
increase absolutely, and perhaps relatively, of those among our citizens
who dwell in cities or towns of some size and who work for wages. This
means that there will be an ever-increasing need to consider the
problems inseparable from a great industrial civilization. Where an
immense and complex business, especially in those branches relating to
manufacture and transportation, is transacted by a large number of
capitalists who employ a very much larger number of wage-earners, the
former tend more and more to combine into corporations and the latter
into unions. The relations of the capitalist and wage-worker to one
another, and of each to the general public, are not always easy to
adjust; and to put them and keep them on a satisfactory basis is one of
the most important and one of the most delicate tasks before our whole
civilization. Much of the work for the accomplishment of this end must
be done by the individuals concerned themselves, whether singly or in
combination; and the one fundamental fact that must never be lost track
of is that the character of the average man, whether he be a man of
means or a man who works with his hands, is the most important factor in
solving the problem aright. But it is almost equally important to
remember that without good laws it is also impossible to reach the
proper solution. It is idle to hold that without good laws evils such as
child labor, as the over-working of women, as the failure to protect
employees from loss of life or limb, can be effectively reached, any
more than the evils of rebates and stock-watering can be reached without
good laws. To fail to stop these practices by legislation means to force
honest men into them, because otherwise the dishonest who surely will
take advantage of them will have everything their own way. If the States
will correct these evils, well and good; but the Nation must stand ready
to aid them.

No question growing out of our rapid and complex industrial development
is more important than that of the employment of women and children. The
presence of women in industry reacts with extreme directness upon the
character of the home and upon family life, and the conditions
surrounding the employment of children bear a vital relation to our
future citizenship. Our legislation in those areas under the control of
the Congress is very much behind the legislation of our more progressive
States. A thorough and comprehensive measure should be adopted at this
session of the Congress relating to the employment of women and children
in the District of Columbia and the Territories. The investigation into
the condition of women and children wage-earners recently authorized and
directed by the Congress is now being carried on in the various States,
and I recommend that the appropriation made last year for beginning this
work be renewed, in order that we may have the thorough and
comprehensive investigation which the subject demands. The National
Government has as an ultimate resort for control of child labor the use
of the interstate commerce clause to prevent the products of child labor
from entering into interstate commerce. But before using this it ought
certainly to enact model laws on the subject for the Territories under
its own immediate control.

There is one fundamental proposition which can be laid down as regards
all these matters, namely: While honesty by itself will not solve the
problem, yet the insistence upon honesty--not merely technical honesty,
but honesty in purpose and spirit--is an essential element in arriving
at a right conclusion. Vice in its cruder and more archaic forms shocks
everybody; but there is very urgent need that public opinion should be
just as severe in condemnation of the vice which hides itself behind
class or professional loyalty, or which denies that it is vice if it can
escape conviction in the courts. The public and the representatives of
the public, the high officials, whether on the bench or in executive or
legislative positions, need to remember that often the most dangerous
criminals, so far as the life of the Nation is concerned, are not those
who commit the crimes known to and condemned by the popular conscience
for centuries, but those who commit crimes only rendered possible by the
complex conditions of our modern industrial life. It makes not a
particle of difference whether these crimes are committed by a
capitalist or by a laborer, by a leading banker or manufacturer or
railroad man, or by a leading representative of a labor union. Swindling
in stocks, corrupting legislatures, making fortunes by the inflation of
securities, by wrecking railroads, by destroying competitors through
rebates--these forms of wrongdoing in the capitalist, are far more
infamous than any ordinary form of embezzlement or forgery; yet it is a
matter of extreme difficulty to secure the punishment of the man most
guilty of them, most responsible for them. The business man who condones
such conduct stands on a level with the labor man who deliberately
supports a corrupt demagogue and agitator, whether head of a union or
head of some municipality, because he is said to have "stood by the
union." The members of the business community, the educators, or
clergymen, who condone and encourage the first kind of wrongdoing, are
no more dangerous to the community, but are morally even worse, than the
labor men who are guilty of the second type of wrongdoing, because less
is to be pardoned those who have no such excuse as is furnished either
by ignorance or by dire need.  When the Department of Agriculture was
founded there was much sneering as to its usefulness. No Department of
the Government, however, has more emphatically vindicated its
usefulness, and none save the Post-Office Department comes so
continually and intimately into touch with the people. The two citizens
whose welfare is in the aggregate most vital to the welfare of the
Nation, and therefore to the welfare of all other citizens, are the
wage-worker who does manual labor and the tiller of the soil, the
farmer. There are, of course, kinds of labor where the work must be
purely mental, and there are other kinds of labor where, under existing
conditions, very little demand indeed is made upon the mind, though I am
glad to say that the proportion of men engaged in this kind of work is
diminishing. But in any community with the solid, healthy qualities
which make up a really great nation the bulk of the people should do
work which calls for the exercise of both body and mind. Progress can
not permanently exist in the abandonment of physical labor, but in the
development of physical labor, so that it shall represent more and more
the work of the trained mind in the trained body. Our school system is
gravely defective in so far as it puts a premium upon mere literary
training and tends therefore to train the boy away from the farm and the
workshop. Nothing is more needed than the best type of industrial
school, the school for mechanical industries in the city, the school for
practically teaching agriculture in the country. The calling of the
skilled tiller of the soil, the calling of the skilled mechanic, should
alike be recognized as professions, just as emphatically as the callings
of lawyer, doctor, merchant, or clerk. The schools recognize this fact
and it should equally be recognized in popular opinion. The young man
who has the farsightedness and courage to recognize it and to get over
the idea that it makes a difference whether what he earns is called
salary or wages, and who refuses to enter the crowded field of the
so-called professions, and takes to constructive industry instead, is
reasonably sure of an ample reward in earnings, in health, in
opportunity to marry early, and to establish a home with a fair amount
of freedom from worry. It should be one of our prime objects to put both
the farmer and the mechanic on a higher plane of efficiency and reward,
so as to increase their effectiveness in the economic world, and
therefore the dignity, the remuneration, and the power of their
positions in the social world.

No growth of cities, no growth of wealth, can make up for any loss in
either the number or the character of the farming population. We of the
United States should realize this above almost all other peoples. We
began our existence as a nation of farmers, and in every great crisis of
the past a peculiar dependence has had to be placed upon the farming
population; and this dependence has hitherto been justified. But it can
not be justified in the future if agriculture is permitted to sink in
the scale as compared with other employments. We can not afford to lose
that preeminently typical American, the farmer who owns his own
medium-sized farm. To have his place taken by either a class of small
peasant proprietors, or by a class of great landlords with tenant-farmed
estates would be a veritable calamity. The growth of our cities is a
good thing but only in so far as it does not mean a growth at the
expense of the country farmer. We must welcome the rise of physical
sciences in their application to agricultural practices, and we must do
all we can to render country conditions more easy and pleasant. There
are forces which now tend to bring about both these results, but they
are, as yet, in their infancy. The National Government through the
Department of Agriculture should do all it can by joining with the State
governments and with independent associations of farmers to encourage
the growth in the open farming country of such institutional and social
movements as will meet the demand of the best type of farmers, both for
the improvement of their farms and for the betterment of the life
itself. The Department of Agriculture has in many places, perhaps
especially in certain districts of the South, accomplished an
extraordinary amount by cooperating with and teaching the farmers
through their associations, on their own soil, how to increase their
income by managing their farms better than they were hitherto managed.
The farmer must not lose his independence, his initiative, his rugged
self-reliance, yet he must learn to work in the heartiest cooperation
with his fellows, exactly as the business man has learned to work; and
he must prepare to use to constantly better advantage the knowledge that
can be obtained from agricultural colleges, while he must insist upon a
practical curriculum in the schools in which his children are taught.
The Department of Agriculture and the Department of Commerce and Labor
both deal with the fundamental needs of our people in the production of
raw material and its manufacture and distribution, and, therefore, with
the welfare of those who produce it in the raw state, and of those who
manufacture and distribute it. The Department of Commerce and Labor has
but recently been founded but has already justified its existence; while
the Department of Agriculture yields to no other in the Government in
the practical benefits which it produces in proportion to the public
money expended. It must continue in the future to deal with growing
crops as it has dealt in the past, but it must still further extend its
field of usefulness hereafter by dealing with live men, through a
far-reaching study and treatment of the problems of farm life alike from
the industrial and economic and social standpoint. Farmers must
cooperate with one another and with the Government, and the Government
can best give its aid through associations of farmers, so as to deliver
to the farmer the large body of agricultural knowledge which has been
accumulated by the National and State governments and by the
agricultural colleges and schools.

The grain producing industry of the country, one of the most important
in the United States, deserves special consideration at the hands of the
Congress. Our grain is sold almost exclusively by grades. To secure
satisfactory results in our home markets and to facilitate our trade
abroad, these grades should approximate the highest degree of uniformity
and certainty. The present diverse methods of inspection and grading
throughout the country under different laws and boards, result in
confusion and lack of uniformity, destroying that confidence which is
necessary for healthful trade. Complaints against the present methods
have continued for years and they are growing in volume and intensity,
not only in this country but abroad. I therefore suggest to the Congress
the advisability of a National system of inspection and grading of grain
entering into interstate and foreign commerce as a remedy for the
present evils.

The conservation of our natural resources and their proper use
constitute the fundamental problem which underlies almost every other
problem of our National life. We must maintain for our civilization the
adequate material basis without which that civilization can not exist.
We must show foresight, we must look ahead. As a nation we not only
enjoy a wonderful measure of present prosperity but if this prosperity
is used aright it is an earnest of future success such as no other
nation will have. The reward of foresight for this Nation is great and
easily foretold. But there must be the look ahead, there must be a
realization of the fact that to waste, to destroy, our natural
resources, to skin and exhaust the land instead of using it so as to
increase its usefulness, will result in undermining in the days of our
children the very prosperity which we ought by right to hand down to
them amplified and developed. For the last few years, through several
agencies, the Government has been endeavoring to get our people to look
ahead and to substitute a planned and orderly development of our
resources in place of a haphazard striving for immediate profit. Our
great river systems should be developed as National water highways, the
Mississippi, with its tributaries, standing first in importance, and the
Columbia second, although there are many others of importance on the
Pacific, the Atlantic and the Gulf slopes. The National Government
should undertake this work, and I hope a beginning will be made in the
present Congress; and the greatest of all our rivers, the Mississippi,
should receive especial attention. From the Great Lakes to the mouth of
the Mississippi there should be a deep waterway, with deep waterways
leading from it to the East and the West. Such a waterway would
practically mean the extension of our coast line into the very heart of
our country. It would be of incalculable benefit to our people. If begun
at once it can be carried through in time appreciably to relieve the
congestion of our great freight-carrying lines of railroads. The work
should be systematically and continuously carried forward in accordance
with some well-conceived plan. The main streams should be improved to
the highest point of efficiency before the improvement of the branches
is attempted; and the work should be kept free from every faint of
recklessness or jobbery. The inland waterways which lie just back of the
whole eastern and southern coasts should likewise be developed.
Moreover, the development of our waterways involves many other important
water problems, all of which should be considered as part of the same
general scheme. The Government dams should be used to produce hundreds
of thousands of horsepower as an incident to improving navigation; for
the annual value of the unused water-power of the United States perhaps
exceeds the annual value of the products of all our mines. As an
incident to creating the deep waterways down the Mississippi, the
Government should build along its whole lower length levees which taken
together with the control of the headwaters, will at once and forever
put a complete stop to all threat of floods in the immensely fertile
Delta region. The territory lying adjacent to the Mississippi along its
lower course will thereby become one of the most prosperous and
populous, as it already is one of the most fertile, farming regions in
all the world. I have appointed an Inland Waterways Commission to study
and outline a comprehensive scheme of development along all the lines
indicated. Later I shall lay its report before the Congress.

Irrigation should be far more extensively developed than at present, not
only in the States of the Great Plains and the Rocky Mountains, but in
many others, as, for instance, in large portions of the South Atlantic
and Gulf States, where it should go hand in hand with the reclamation of
swamp land. The Federal Government should seriously devote itself to
this task, realizing that utilization of waterways and water-power,
forestry, irrigation, and the reclamation of lands threatened with
overflow, are all interdependent parts of the same problem. The work of
the Reclamation Service in developing the larger opportunities of the
western half of our country for irrigation is more important than almost
any other movement. The constant purpose of the Government in connection
with the Reclamation Service has been to use the water resources of the
public lands for the ultimate greatest good of the greatest number; in
other words, to put upon the land permanent home-makers, to use and
develop it for themselves and for their children and children's
children. There has been, of course, opposition to this work; opposition
from some interested men who desire to exhaust the land for their own
immediate profit without regard to the welfare of the next generation,
and opposition from honest and well-meaning men who did not fully
understand the subject or who did not look far enough ahead. This
opposition is, I think, dying away, and our people are understanding
that it would be utterly wrong to allow a few individuals to exhaust for
their own temporary personal profit the resources which ought to be
developed through use so as to be conserved for the permanent common
advantage of the people as a whole.

The effort of the Government to deal with the public land has been based
upon the same principle as that of the Reclamation Service. The land law
system which was designed to meet the needs of the fertile and
well-watered regions of the Middle West has largely broken down when
applied to the dryer regions of the Great Plains, the mountains, and
much of the Pacific slope, where a farm of 160 acres is inadequate for
self-support. In these regions the system lent itself to fraud, and much
land passed out of the hands of the Government without passing into the
hands of the home-maker. The Department of the Interior and the
Department of Justice joined in prosecuting the offenders against the
law; and they have accomplished much, while where the administration of
the law has been defective it has been changed. But the laws themselves
are defective. Three years ago a public lands commission was appointed
to scrutinize the law, and defects, and recommend a remedy. Their
examination specifically showed the existence of great fraud upon the
public domain, and their recommendations for changes in the law were
made with the design of conserving the natural resources of every part
of the public lands by putting it to its best use. Especial attention
was called to the prevention of settlement by the passage of great areas
of public land into the hands of a few men, and to the enormous waste
caused by unrestricted grazing upon the open range. The recommendations
of the Public Lands Commission are sound, for they are especially in the
interest of the actual homemaker; and where the small home-maker can not
at present utilize the land they provide that the Government shall keep
control of it so that it may not be monopolized by a few men. The
Congress has not yet acted upon these recommendations; but they are so
just and proper, so essential to our National welfare, that I feel
confident, if the Congress will take time to consider them, that they
will ultimately be adopted.

Some such legislation as that proposed is essential in order to preserve
the great stretches of public grazing land which are unfit for
cultivation under present methods and are valuable only for the forage
which they supply. These stretches amount in all to some 300,000,000
acres, and are open to the free grazing of cattle, sheep, horses and
goats, without restriction. Such a system, or lack of system, means that
the range is not so much used as wasted by abuse. As the West settles
the range becomes more and more over-grazed. Much of it can not be used
to advantage unless it is fenced, for fencing is the only way by which
to keep in check the owners of nomad flocks which roam hither and
thither, utterly destroying the pastures and leaving a waste behind so
that their presence is incompatible with the presence of home-makers.
The existing fences are all illegal. Some of them represent the improper
exclusion of actual settlers, actual home-makers, from territory which
is usurped by great cattle companies. Some of them represent what is in
itself a proper effort to use the range for those upon the land, and to
prevent its use by nomadic outsiders. All these fences, those that are
hurtful and those that are beneficial, are alike illegal and must come
down. But it is an outrage that the law should necessitate such action
on the part of the Administration. The unlawful fencing of public lands
for private grazing must be stopped, but the necessity which occasioned
it must be provided for. The Federal Government should have control of
the range, whether by permit or lease, as local necessities may
determine. Such control could secure the great benefit of legitimate
fencing, while at the same time securing and promoting the settlement of
the country. In some places it may be that the tracts of range adjacent
to the homesteads of actual settlers should be allotted to them
severally or in common for the summer grazing of their stock. Elsewhere
it may be that a lease system would serve the purpose; the leases to be
temporary and subject to the rights of settlement, and the amount
charged being large enough merely to permit of the efficient and
beneficial control of the range by the Government, and of the payment to
the county of the equivalent of what it would otherwise receive in
taxes. The destruction of the public range will continue until some such
laws as these are enacted. Fully to prevent the fraud in the public
lands which, through the joint action of the Interior Department and the
Department of Justice, we have been endeavoring to prevent, there must
be further legislation, and especially a sufficient appropriation to
permit the Department of the Interior to examine certain classes of
entries on the ground before they pass into private ownership. The
Government should part with its title only to the actual home-maker, not
to the profit-maker who does not care to make a home. Our prime object
is to secure the rights and guard the interests of the small ranchman,
the man who plows and pitches hay for himself. It is this small
ranchman, this actual settler and homemaker, who in the long run is most
hurt by permitting thefts of the public land in whatever form.

Optimism is a good characteristic, but if carried to an excess it
becomes foolishness. We are prone to speak of the resources of this
country as inexhaustible; this is not so. The mineral wealth of the
country, the coal, iron, oil, gas, and the like, does not reproduce
itself, and therefore is certain to be exhausted ultimately; and
wastefulness in dealing with it to-day means that our descendants will
feel the exhaustion a generation or two before they otherwise would. But
there are certain other forms of waste which could be entirely
stopped--the waste of soil by washing, for instance, which is among the
most dangerous of all wastes now in progress in the United States, is
easily preventable, so that this present enormous loss of fertility is
entirely unnecessary. The preservation or replacement of the forests is
one of the most important means of preventing this loss. We have made a
beginning in forest preservation, but it is only a beginning. At present
lumbering is the fourth greatest industry in the United States; and yet,
so rapid has been the rate of exhaustion of timber in the United States
in the past, and so rapidly is the remainder being exhausted, that the
country is unquestionably on the verge of a timber famine which will be
felt in every household in the land. There has already been a rise in
the price of lumber, but there is certain to be a more rapid and heavier
rise in the future. The present annual consumption of lumber is
certainly three times as great as the annual growth; and if the
consumption and growth continue unchanged, practically all our lumber
will be exhausted in another generation, while long before the limit to
complete exhaustion is reached the growing scarcity will make itself
felt in many blighting ways upon our National welfare. About 20 per cent
of our forested territory is now reserved in National forests; but these
do not include the most valuable timber lauds, and in any event the
proportion is too small to expect that the reserves can accomplish more
than a mitigation of the trouble which is ahead for the nation. Far more
drastic action is needed. Forests can be lumbered so as to give to the
public the full use of their mercantile timber without the slightest
detriment to the forest, any more than it is a detriment to a farm to
furnish a harvest; so that there is no parallel between forests and
mines, which can only be completely used by exhaustion. But forests, if
used as all our forests have been used in the past and as most of them
are still used, will be either wholly destroyed, or so damaged that many
decades have to pass before effective use can be made of them again. All
these facts are so obvious that it is extraordinary that it should be
necessary to repeat them. Every business man in the land, every writer
in the newspapers, every man or woman of an ordinary school education,
ought to be able to see that immense quantities of timber are used in
the country, that the forests which supply this timber are rapidly being
exhausted, and that, if no change takes place, exhaustion will come
comparatively soon, and that the effects of it will be felt severely in
the every-day life of our people. Surely, when these facts are so
obvious, there should be no delay in taking preventive measures. Yet we
seem as a nation to be willing to proceed in this matter with
happy-go-lucky indifference even to the immediate future. It is this
attitude which permits the self-interest of a very few persons to weigh
for more than the ultimate interest of all our people. There are persons
who find it to their immense pecuniary benefit to destroy the forests by
lumbering. They are to be blamed for thus sacrificing the future of the
Nation as a whole to their own self-interest of the moment; but heavier
blame attaches to the people at large for permitting such action,
whether in the White Mountains, in the southern Alleghenies, or in the
Rockies and Sierras. A big lumbering company, impatient for immediate
returns and not caring to look far enough ahead, will often deliberately
destroy all the good timber in a region, hoping afterwards to move on to
some new country. The shiftless man of small means, who does not care to
become an actual home-maker but would like immediate profit, will find
it to his advantage to take up timber land simply to turn it over to
such a big company, and leave it valueless for future settlers. A big
mine owner, anxious only to develop his mine at the moment, will care
only to cut all the timber that he wishes without regard to the
future--probably net looking ahead to the condition of the country when
the forests are exhausted, any more than he does to the condition when
the mine is worked out. I do not blame these men nearly as much as I
blame the supine public opinion, the indifferent public opinion, which
permits their action to go unchecked. Of course to check the waste of
timber means that there must be on the part of the public the acceptance
of a temporary restriction in the lavish use of the timber, in order to
prevent the total loss of this use in the future. There are plenty of
men in public and private life who actually advocate the continuance of
the present system of unchecked and wasteful extravagance, using as an
argument the fact that to check it will of course mean interference with
the ease and comfort of certain people who now get lumber at less cost
than they ought to pay, at the expense of the future generations. Some
of these persons actually demand that the present forest reserves be
thrown open to destruction, because, forsooth, they think that thereby
the price of lumber could be put down again for two or three or more
years. Their attitude is precisely like that of an agitator protesting
against the outlay of money by farmers on manure and in taking care of
their farms generally. Undoubtedly, if the average farmer were content
absolutely to ruin his farm, he could for two or three years avoid
spending any money on it, and yet make a good deal of money out of it.
But only a savage would, in his private affairs, show such reckless
disregard of the future; yet it is precisely this reckless disregard of
the future which the opponents of the forestry system are now
endeavoring to get the people of the United States to show. The only
trouble with the movement for the preservation of our forests is that it
has not gone nearly far enough, and was not begun soon enough. It is a
most fortunate thing, however, that we began it when we did. We should
acquire in the Appalachian and White Mountain regions all the forest
lands that it is possible to acquire for the use of the Nation. These
lands, because they form a National asset, are as emphatically national
as the rivers which they feed, and which flow through so many States
before they reach the ocean.

There should be no tariff on any forest product grown in this country;
and, in especial, there should be no tariff on wood pulp; due notice of
the change being of course given to those engaged in the business so as
to enable them to adjust themselves to the new conditions. The repeal of
the duty on wood pulp should if possible be accompanied by an agreement
with Canada that there shall be no export duty on Canadian pulp wood.

In the eastern United States the mineral fuels have already passed into
the hands of large private owners, and those of the West are rapidly
following. It is obvious that these fuels should be conserved and not
wasted, and it would be well to protect the people against unjust and
extortionate prices, so far as that can still be done. What has been
accomplished in the great oil fields of the Indian Territory by the
action of the Administration, offers a striking example of the good
results of such a policy. In my judgment the Government should have the
right to keep the fee of the coal, oil, and gas fields in its own
possession and to lease the rights to develop them under proper
regulations; or else, if the Congress will not adopt this method, the
coal deposits should be sold under limitations, to conserve them as
public utilities, the right to mine coal being separated from the title
to the soil. The regulations should permit coal lands to be worked in
sufficient quantity by the several corporations. The present limitations
have been absurd, excessive, and serve no useful purpose, and often
render it necessary that there should be either fraud or close
abandonment of the work of getting out the coal.

Work on the Panama Canal is proceeding in a highly satisfactory manner.
In March last, John F. Stevens, chairman of the Commission and chief
engineer, resigned, and the Commission was reorganized and constituted
as follows: Lieut. Col. George W. Goethals, Corps. of Engineers, U. S.
Army, chairman and chief engineer; Maj. D. D. Gall-lard, Corps of
Engineers, U. S. Army; Maj. William L. Sibert, Corps of Engineers, U. S.
Army; Civil Engineer H. H. Rousseau, U. S. Navy; Mr. J. C. S. Blackburn;
Col. W. C. Gorgas, U. S. Army, and Mr. Jackson Smith, Commissioners.
This change of authority and direction went into effect on April 1,
without causing a perceptible check to the progress of the work. In
March the total excavation in the Culebra Cut, where effort was chiefly
concentrated, was 815,270 cubic yards. In April this was increased to
879,527 cubic yards. There was a considerable decrease in the output for
May and June owing partly to the advent of the rainy season and partly
to temporary trouble with the steam shovel men over the question of
wages. This trouble was settled satisfactorily to all parties and in
July the total excavation advanced materially and in August the grand
total from all points in the canal prism by steam shovels and dredges
exceeded all previous United States records, reaching 1,274,404 cubic
yards. In September this record was eclipsed and a total of 1,517,412
cubic yards was removed. Of this amount 1,481,307 cubic yards were from
the canal prism and 36,105 cubic yards were from accessory works. These
results were achieved in the rainy season with a rainfall in August of
11.89 inches and in September of 11.65 inches. Finally, in October, the
record was again eclipsed, the total excavation being 1,868,729 cubic
yards; a truly extraordinary record, especially in view of the heavy
rainfall, which was 17.1 inches. In fact, experience during the last two
rainy seasons demonstrates that the rains are a less serious obstacle to
progress than has hitherto been supposed.

Work on the locks and dams at Gatun, which began actively in March last,
has advanced so far that it is thought that masonry work on the locks
can be begun within fifteen months. In order to remove all doubt as to
the satisfactory character of the foundations for the locks of the
Canal, the Secretary of War requested three eminent civil engineers, of
special experience in such construction, Alfred Noble, Frederic P.
Stearns and John R. Freeman, to visit the Isthmus and make thorough
personal investigations of the sites. These gentlemen went to the
Isthmus in April and by means of test pits which had been dug for the
purpose, they inspected the proposed foundations, and also examined the
borings that had been made. In their report to the Secretary of War,
under date of May 2, 1907, they said: "We found that all of the locks,
of the dimensions now proposed, will rest upon rock of such character
that it will furnish a safe and stable foundation." Subsequent new
borings, conducted by the present Commission, have fully confirmed this
verdict. They show that the locks will rest on rock for their entire
length. The cross section of the dam and method of construction will be
such as to insure against any slip or sloughing off. Similar examination
of the foundations of the locks and dams on the Pacific side are in
progress. I believe that the locks should be made of a width of 120
feet.

Last winter bids were requested and received for doing the work of canal
construction by contract. None of them was found to be satisfactory and
all were rejected. It is the unanimous opinion of the present Commission
that the work can be done better, more cheaply, and more quickly by the
Government than by private contractors. Fully 80 per cent of the entire
plant needed for construction has been purchased or contracted for;
machine shops have been erected and equipped for making all needed
repairs to the plant; many thousands of employees have been secured; an
effective organization has been perfected; a recruiting system is in
operation which is capable of furnishing more labor than can be used
advantageously; employees are well sheltered and well fed; salaries paid
are satisfactory, and the work is not only going forward smoothly, but
it is producing results far in advance of the most sanguine
anticipations. Under these favorable conditions, a change in the method
of prosecuting the work would be unwise and unjustifiable, for it would
inevitably disorganize existing conditions, check progress, and increase
the cost and lengthen the time of completing the Canal.

The chief engineer and all his professional associates are firmly
convinced that the 85 feet level lock canal which they are constructing
is the best that could be desired. Some of them had doubts on this point
when they went to the Isthmus. As the plans have developed under their
direction their doubts have been dispelled. While they may decide upon
changes in detail as construction advances they are in hearty accord in
approving the general plan. They believe that it provides a canal not
only adequate to all demands that will be made upon it but superior in
every way to a sea level canal. I concur in this belief.

I commend to the favorable consideration of the Congress a postal
savings bank system, as recommended by the Postmaster-General. The
primary object is to encourage among our people economy and thrift and
by the use of postal savings banks to give them an opportunity to
husband their resources, particularly those who have not the facilities
at hand for depositing their money in savings banks. Viewed, however,
from the experience of the past few weeks, it is evident that the
advantages of such an institution are till more far-reaching. Timid
depositors have withdrawn their savings for the time being from national
banks, trust companies, and savings banks; individuals have hoarded
their cash and the workingmen their earnings; all of which money has
been withheld and kept in hiding or in safe deposit box to the detriment
of prosperity. Through the agency of the postal savings banks such money
would be restored to the channels of trade, to the mutual benefit of
capital and labor.

I further commend to the Congress the consideration of the
Postmaster-General's recommendation for an extension of the parcel post,
especially on the rural routes. There are now 38,215 rural routes,
serving nearly 15,000,000 people who do not have the advantages of the
inhabitants of cities in obtaining their supplies. These recommendations
have been drawn up to benefit the farmer and the country storekeeper;
otherwise, I should not favor them, for I believe that it is good policy
for our Government to do everything possible to aid the small town and
the country district. It is desirable that the country merchant should
not be crushed out.

The fourth-class postmasters' convention has passed a very strong
resolution in favor of placing the fourth-class postmasters under the
civil-service law. The Administration has already put into effect the
policy of refusing to remove any fourth-class postmasters save for
reasons connected with the good of the service; and it is endeavoring so
far as possible to remove them from the domain of partisan politics. It
would be a most desirable thing to put the fourth-class postmasters in
the classified service. It is possible that this might be done without
Congressional action, but, as the matter is debatable, I earnestly
recommend that the Congress enact a law providing that they be included
under the civil-service law and put in the classified service.

Oklahoma has become a State, standing on a full equality with her elder
sisters, and her future is assured by her great natural resources. The
duty of the National Government to guard the personal and property
rights of the Indians within her borders remains of course unchanged.

I reiterate my recommendations of last year as regards Alaska. Some form
of local self-government should be provided, as simple and inexpensive
as possible; it is impossible for the Congress to devote the necessary
time to all the little details of necessary Alaskan legislation. Road
building and railway building should be encouraged. The Governor of
Alaska should be given an ample appropriation wherewith to organize a
force to preserve the public peace. Whisky selling to the natives should
be made a felony. The coal land laws should be changed so as to meet the
peculiar needs of the Territory. This should be attended to at once; for
the present laws permit individuals to locate large areas of the public
domain for speculative purposes; and cause an immense amount of trouble,
fraud, and litigation. There should be another judicial division
established. As early as possible lighthouses and buoys should be
established as aids to navigation, especially in and about Prince
William Sound, and the survey of the coast completed. There is need of
liberal appropriations for lighting and buoying the southern coast and
improving the aids to navigation in southeastern Alaska. One of the
great industries of Alaska, as of Puget Sound and the Columbia, is
salmon fishing. Gradually, by reason of lack of proper laws, this
industry is being ruined; it should now be taken in charge, and
effectively protected, by the United States Government.

The courage and enterprise of the citizens of the far north-west in
their projected Alaskan-Yukon-Pacific Exposition, to be held in 1909,
should receive liberal encouragement. This exposition is not sentimental
in its conception, but seeks to exploit the natural resources of Alaska
and to promote the commerce, trade, and industry of the Pacific States
with their neighboring States and with our insular possessions and the
neighboring countries of the Pacific. The exposition asks no loan from
the Congress but seeks appropriations for National exhibits and exhibits
of the western dependencies of the General Government. The State of
Washington and the city of Seattle have shown the characteristic western
enterprise in large donations for the conduct of this exposition in
which other States are lending generous assistance.

The unfortunate failure of the shipping bill at the last session of the
last Congress was followed by the taking off of certain Pacific
steamships, which has greatly hampered the movement of passengers
between Hawaii and the mainland. Unless the Congress is prepared by
positive encouragement to secure proper facilities in the way of
shipping between Hawaii and the mainland, then the coastwise shipping
laws should be so far relaxed as to prevent Hawaii suffering as it is
now suffering. I again call your attention to the capital importance
from every standpoint of making Pearl Harbor available for the largest
deep water vessels, and of suitably fortifying the island.

The Secretary of War has gone to the Philippines. On his return I shall
submit to you his report on the islands.

I again recommend that the rights of citizenship be conferred upon the
people of Porto Rico.

A bureau of mines should be created under the control and direction of
the Secretary of the Interior; the bureau to have power to collect
statistics and make investigations in all matters pertaining to mining
and particularly to the accidents and dangers of the industry. If this
can not now be done, at least additional appropriations should be given
the Interior Department to be used for the study of mining conditions,
for the prevention of fraudulent mining schemes, for carrying on the
work of mapping the mining districts, for studying methods for
minimizing the accidents and dangers in the industry; in short, to aid
in all proper ways the development of the mining industry.

I strongly recommend to the Congress to provide funds for keeping up the
Hermitage, the home of Andrew Jackson; these funds to be used through
the existing Hermitage Association for the preservation of a historic
building which should ever be dear to Americans.

I further recommend that a naval monument be established in the
Vicksburg National Park. This national park gives a unique opportunity
for commemorating the deeds of those gallant men who fought on water, no
less than of those who fought on land, in the great civil War.

Legislation should be enacted at the present session of the Congress for
the Thirteenth Census. The establishment of the permanent Census Bureau
affords the opportunity for a better census than we have ever had, but
in order to realize the full advantage of the permanent organization,
ample time must be given for preparation.

There is a constantly growing interest in this country in the question
of the public health. At last the public mind is awake to the fact that
many diseases, notably tuberculosis, are National scourges. The work of
the State and city boards of health should be supplemented by a
constantly increasing interest on the part of the National Government.
The Congress has already provided a bureau of public health and has
provided for a hygienic laboratory. There are other valuable laws
relating to the public health connected with the various departments.
This whole branch of the Government should be strengthened and aided in
every way.

I call attention to two Government commissions which I have appointed
and which have already done excellent work. The first of these has to do
with the organization of the scientific work of the Government, which
has grown up wholly without plan and is in consequence so unwisely
distributed among the Executive Departments that much of its effect is
lost for the lack of proper coordination. This commission's chief object
is to introduce a planned and orderly development and operation in the
place of the ill-assorted and often ineffective grouping and methods of
work which have prevailed. This can not be done without legislation, nor
would it be feasible to deal in detail with so complex an administrative
problem by specific provisions of law. I recommend that the President be
given authority to concentrate related lines of work and reduce
duplication by Executive order through transfer and consolidation of
lines of work.

The second committee, that on Department methods, was instructed to
investigate and report upon the changes needed to place the conduct of
the executive force of the Government on the most economical and
effective basis in the light of the best modern business practice. The
committee has made very satisfactory progress. Antiquated practices and
bureaucratic ways have been abolished, and a general renovation of
departmental methods has been inaugurated. All that can be done by
Executive order has already been accomplished or will be put into effect
in the near future. The work of the main committee and its several
assistant committees has produced a wholesome awakening on the part of
the great body of officers and employees engaged in Government work. In
nearly every Department and office there has been a careful
self-inspection for the purpose of remedying any defects before they
could be made the subject of adverse criticism. This has led individuals
to a wider study of the work on which they were engaged, and this study
has resulted in increasing their efficiency in their respective lines of
work. There are recommendations of special importance from the committee
on the subject of personnel and the classification of salaries which
will require legislative action before they can be put into effect. It
is my intention to submit to the Congress in the near future a special
message on those subjects.

Under our form of government voting is not merely a right but a duty,
and, moreover, a fundamental and necessary duty if a man is to be a good
citizen. It is well to provide that corporations shall not contribute to
Presidential or National campaigns, and furthermore to provide for the
publication of both contributions and expenditures. There is, however,
always danger in laws of this kind, which from their very nature are
difficult of enforcement; the danger being lest they be obeyed only by
the honest, and disobeyed by the unscrupulous, so as to act only as a
penalty upon honest men. Moreover, no such law would hamper an
unscrupulous man of unlimited means from buying his own way into office.
There is a very radical measure which would, I believe, work a
substantial improvement in our system of conducting a campaign, although
I am well aware that it will take some time for people so to familiarize
themselves with such a proposal as to be willing to consider its
adoption. The need for collecting large campaign funds would vanish if
Congress provided an appropriation for the proper and legitimate
expenses of each of the great national parties, an appropriation ample
enough to meet the necessity for thorough organization and machinery,
which requires a large expenditure of money. Then the stipulation should
be made that no party receiving campaign funds from the Treasury should
accept more than a fixed amount from any individual subscriber or donor;
and the necessary publicity for receipts and expenditures could without
difficulty be provided.

There should be a National gallery of art established in the capital
city of this country. This is important not merely to the artistic but
to the material welfare of the country; and the people are to be
congratulated on the fact that the movement to establish such a gallery
is taking definite form under the guidance of the Smithsonian
Institution. So far from there being a tariff on works of art brought
into the country, their importation should be encouraged in every way.
There have been no sufficient collections of objects of art by the
Government, and what collections have been acquired are scattered and
are generally placed in unsuitable and imperfectly lighted galleries.

The Biological Survey is quietly working for the good of our
agricultural interests, and is an excellent example of a Government
bureau which conducts original scientific research the findings of which
are of much practical utility. For more than twenty years it has studied
the food habits of birds and mammals that are injurious or beneficial to
agriculture, horticulture, and forestry; has distributed illustrated
bulletins on the subject, and has labored to secure legislative
protection for the beneficial species. The cotton boll-weevil, which has
recently overspread the cotton belt of Texas and is steadily extending
its range, is said to cause an annual loss of about $3,000,000. The
Biological Survey has ascertained and gives wide publicity to the fact
that at least 43 kinds of birds prey upon this destructive insect. It
has discovered that 57 species of birds feed upon scale-insects--dreaded
enemies of the fruit grower. It has shown that woodpeckers as a class,
by destroying the larvae of wood-boring insects, are so essential to
tree life that it is doubtful if our forests could exist without them.
It has shown that cuckoos and orioles are the natural enemies of the
leaf-eating caterpillars that destroy our shade and fruit trees; that
our quails and sparrows consume annually hundreds of tons of seeds of
noxious weeds; that hawks and owls as a class (excepting the few that
kill poultry and game birds) are markedly beneficial, spending their
lives in catching grasshoppers, mice, and other pests that prey upon the
products of husbandry. It has conducted field experiments for the
purpose of devising and perfecting simple methods for holding in check
the hordes of destructive rodents--rats, mice, rabbits, gophers, prairie
dogs, and ground squirrels--which annually destroy crops worth many
millions of dollars; and it has published practical directions for the
destruction of wolves and coyotes on the stock ranges of the West,
resulting during the past year in an estimated saving of cattle and
sheep valued at upwards of a million dollars.

It has inaugurated a system of inspection at the principal ports of
entry on both Atlantic and Pacific coasts by means of which the
introduction of noxious mammals and birds is prevented, thus keeping out
the mongoose and certain birds which are as much to be dreaded as the
previously introduced English sparrow and the house rats and mice.

In the interest of game protection it has cooperated with local
officials in every State in the Union, has striven to promote uniform
legislation in the several States, has rendered important service in
enforcing the Federal law regulating interstate traffic in game, and has
shown how game protection may be made to yield a large revenue to the
State--a revenue amounting in the case of Illinois to $128,000 in a
single year.

The Biological Survey has explored the faunas and floras of America with
reference to the distribution of animals and plants; it has defined and
mapped the natural life areas--areas in which, by reason of prevailing
climatic conditions, certain kinds of animals and plants occur--and has
pointed out the adaptability of these areas to the cultivation of
particular crops. The results of these investigations are not only of
high educational value but are worth each year to the progressive
farmers of the country many times the cost of maintaining the Survey,
which, it may be added, is exceedingly small. I recommend to Congress
that this bureau, whose usefulness is seriously handicapped by lack of
funds, be granted an appropriation in some degree commensurate with the
importance of the work it is doing.

I call your especial attention to the unsatisfactory condition of our
foreign mail service, which, because of the lack of American steamship
lines is now largely done through foreign lines, and which, particularly
so far as South and Central America are concerned, is done in a manner
which constitutes a serious barrier to the extension of our commerce.

The time has come, in my judgment, to set to work seriously to make our
ocean mail service correspond more closely with our recent commercial
and political development. A beginning was made by the ocean mail act of
March 3, 1891, but even at that time the act was known to be inadequate
in various particulars. Since that time events have moved rapidly in our
history. We have acquired Hawaii, the Philippines, and lesser islands in
the Pacific. We are steadily prosecuting the great work of uniting at
the Isthmus the waters of the Atlantic and the Pacific. To a greater
extent than seemed probable even a dozen years ago, we may look to an
American future on the sea worthy of the traditions of our past. As the
first step in that direction, and the step most feasible at the present
time, I recommend the extension of the ocean mail act of 1891. This act
has stood for some years free from successful criticism of its principle
and purpose. It was based on theories of the obligations of a great
maritime nation, undisputed in our own land and followed by other
nations since the beginning of steam navigation. Briefly those theories
are, that it is the duty of a first-class Power so far as practicable to
carry its ocean mails under its own flag; that the fast ocean steamships
and their crews, required for such mail service, are valuable
auxiliaries to the sea power of a nation. Furthermore, the construction
of such steamships insures the maintenance in an efficient condition of
the shipyards in which our battleships must be built.

The expenditure of public money for the Performance of such necessary
functions of government is certainly warranted, nor is it necessary to
dwell upon the incidental benefits to our foreign commerce, to the
shipbuilding industry, and to ship owning and navigation which will
accompany the discharge of these urgent public duties, though they, too,
should have weight.

The only serious question is whether at this time we can afford to
improve our ocean mail service as it should be improved. All doubt on
this subject is removed by the reports of the Post-Office Department.
For the fiscal year ended June 30, 1907, that Department estimates that
the postage collected on the articles exchanged with foreign countries
other than Canada and Mexico amounted to $6,579,043.48, or $3,637,226.81
more than the net cost of the service exclusive of the cost of
transporting the articles between the United States exchange
post-offices and the United States post-offices at which they were
mailed or delivered. In other words, the Government of the United
States, having assumed a monopoly of carrying the mails for the people,
making a profit of over $3,600,000 by rendering a cheap and inefficient
service. That profit I believe should be devoted to strengthening
maritime power in those directions where it will best promote our
prestige. The country is familiar with the facts of our maritime
impotence in the harbors of the great and friendly Republics of South
America. Following the failure of the shipbuilding bill we lost our only
American line of steamers to Australasia, and that loss on the Pacific
has become a serious embarrassment to the people of Hawaii, and has
wholly cut off the Samoan islands from regular communication with the
Pacific coast. Puget Sound, in the year, has lost over half (four out of
seven) of its American steamers trading with the Orient.

We now pay under the act of 1891 $4 a statute mile outward to 20-knot
American mail steamships, built according to naval plans, available as
cruisers, and manned by Americans. Steamships of that speed are confined
exclusively to trans-Atlantic trade with New York. To steamships of 16
knots or over only $2 a mile can be paid, and it is steamships of this
speed and type which are needed to meet the requirements of mail service
to South America, Asia (including the Philippines), and Australia. I
strongly recommend, therefore, a simple amendment to the ocean mail act
of 1891 which shall authorize the Postmaster-General in his discretion
to enter into contracts for the transportation of mails to the Republics
of South America, to Asia, the Philippines, and Australia at a rate not
to exceed $4 a mile for steamships of 16 knots speed or upwards, subject
to the restrictions and obligations of the act of 1891. The profit of
$3,600,000 which has been mentioned will fully cover the maximum annual
expenditure involved in this recommendation, and it is believed will in
time establish the lines so urgently needed. The proposition involves no
new principle, but permits the efficient discharge of public functions
now inadequately performed or not performed at all.

Not only there is not now, but there never has been, any other nation in
the world so wholly free from the evils of militarism as is ours. There
never has been any other large nation, not even China, which for so long
a period has had relatively to its numbers so small a regular army as
has ours. Never at any time in our history has this Nation suffered from
militarism or been in the remotest danger of suffering from militarism.
Never at any time of our history has the Regular Army been of a size
which caused the slightest appreciable tax upon the tax-paying citizens
of the Nation. Almost always it has been too small in size and
underpaid. Never in our entire history has the Nation suffered in the
least particular because too much care has been given to the Army, too
much prominence given it, too much money spent upon it, or because it
has been too large. But again and again we have suffered because enough
care has not been given to it, because it has been too small, because
there has not been sufficient preparation in advance for possible war.
Every foreign war in which we have engaged has cost us many times the
amount which, if wisely expended during the preceding years of peace on
the Regular Army, would have insured the war ending in but a fraction of
the time and but for a fraction of the cost that was actually the case.
As a Nation we have always been shortsighted in providing for the
efficiency of the Army in time of peace. It is nobody's especial
interest to make such provision and no one looks ahead to war at any
period, no matter how remote, as being a serious possibility; while an
improper economy, or rather niggardliness, can be practiced at the
expense of the Army with the certainty that those practicing it will not
be called to account therefor, but that the price will be paid by the
unfortunate persons who happen to be in office when a war does actually
come.

I think it is only lack of foresight that troubles us, not any hostility
to the Army. There are, of course, foolish people who denounce any care
of the Army or Navy as "militarism," but I do not think that these
people are numerous. This country has to contend now, and has had to
contend in the past, with many evils, and there is ample scope for all
who would work for reform. But there is not one evil that now exists, or
that ever has existed in this country, which is, or ever has been, owing
in the smallest part to militarism. Declamation against militarism has
no more serious place in an earnest and intelligent movement for
righteousness in this country than declamation against the worship of
Baal or Astaroth. It is declamation against a non-existent evil, one
which never has existed in this country, and which has not the slightest
chance of appearing here. We are glad to help in any movement for
international peace, but this is because we sincerely believe that it is
our duty to help all such movements provided they are sane and rational,
and not because there is any tendency toward militarism on our part
which needs to be cured. The evils we have to fight are those in
connection with industrialism, not militarism. Industry is always
necessary, just as war is sometimes necessary. Each has its price, and
industry in the United States now exacts, and has always exacted, a far
heavier toll of death than all our wars put together. The statistics of
the railroads of this country for the year ended June 30, 1906, the last
contained in the annual statistical report of the Interstate Commerce
Commission, show in that one year a total of 108,324 casualties to
persons, of which 10,618 represent the number of persons killed. In that
wonderful hive of human activity, Pittsburg, the deaths due to
industrial accidents in 1906 were 919, all the result of accidents in
mills, mines or on railroads. For the entire country, therefore, it is
safe to say that the deaths due to industrial accidents aggregate in the
neighborhood of twenty thousand a year. Such a record makes the death
rate in all our foreign wars utterly trivial by comparison. The number
of deaths in battle in all the foreign wars put together, for the last
century and a quarter, aggregate considerably less than one year's death
record for our industries. A mere glance at these figures is sufficient
to show the absurdity of the outcry against militarism.

But again and again in the past our little Regular Army has rendered
service literally vital to the country, and it may at any time have to
do so in the future. Its standard of efficiency and instruction is
higher now than ever in the past. But it is too small. There are not
enough officers; and it is impossible to secure enough enlisted men. We
should maintain in peace a fairly complete skeleton of a large army. A
great and long-continued war would have to be fought by volunteers. But
months would pass before any large body of efficient volunteers could be
put in the field, and our Regular Army should be large enough to meet
any immediate need. In particular it is essential that we should possess
a number of extra officers trained in peace to perform efficiently the
duties urgently required upon the breaking out of war.

The Medical Corps should be much larger than the needs of our Regular
Army in war. Yet at present it is smaller than the needs of the service
demand even in peace. The Spanish war occurred less than ten years ago.
The chief loss we suffered in it was by disease among the regiments
which never left the country. At the moment the Nation seemed deeply
impressed by this fact; yet seemingly it has already been forgotten, for
not the slightest effort has been made to prepare a medical corps of
sufficient size to prevent the repetition of the same disaster on a much
larger scale if we should ever be engaged in a serious conflict. The
trouble in the Spanish war was not with the then existing officials of
the War Department; it was with the representatives of the people as a
whole who, for the preceding thirty years, had declined to make the
necessary provision for the Army. Unless ample provision is now made by
Congress to put the Medical Corps where it should be put disaster in the
next war is inevitable, and the responsibility will not lie with those
then in charge of the War Department, but with those who now decline to
make the necessary provision. A well organized medical corps, thoroughly
trained before the advent of war in all the important administrative
duties of a military sanitary corps, is essential to the efficiency of
any large army, and especially of a large volunteer army. Such knowledge
of medicine and surgery as is possessed by the medical profession
generally will not alone suffice to make an efficient military surgeon.
He must have, in addition, knowledge of the administration and
sanitation of large field hospitals and camps, in order to safeguard the
health and lives of men intrusted in great numbers to his care. A bill
has long been pending before the Congress for the reorganization of the
Medical Corps; its passage is urgently needed.

But the Medical Department is not the only department for which
increased provision should be made. The rate of pay for the officers
should be greatly increased; there is no higher type of citizen than the
American regular officer, and he should have a fair reward for his
admirable work. There should be a relatively even greater increase in
the pay for the enlisted men. In especial provision should be made for
establishing grades equivalent to those of warrant officers in the Navy
which should be open to the enlisted men who serve sufficiently long and
who do their work well. Inducements should be offered sufficient to
encourage really good men to make the Army a life occupation. The prime
needs of our present Army is to secure and retain competent
noncommissioned officers. This difficulty rests fundamentally on the
question of pay. The noncommissioned officer does not correspond with an
unskilled laborer; he corresponds to the best type of skilled workman or
to the subordinate official in civil institutions. Wages have greatly
increased in outside occupations in the last forty years and the pay of
the soldier, like the pay of the officers, should be proportionately
increased. The first sergeant of a company, if a good man, must be one
of such executive and administrative ability, and such knowledge of his
trade, as to be worth far more than we at present pay him. The same is
true of the regimental sergeant major. These men should be men who had
fully resolved to make the Army a life occupation and they should be
able to look forward to ample reward; while only men properly qualified
should be given a chance to secure these final rewards. The increase
over the present pay need not be great in the lower grades for the first
one or two enlistments, but the increase should be marked for the
noncommissioned officers of the upper grades who serve long enough to
make it evident that they intend to stay permanently in the Army, while
additional pay should be given for high qualifications in target
practice. The position of warrant officer should be established and
there should be not only an increase of pay, but an increase of
privileges and allowances and dignity, so as to make the grade open to
noncommissioned officers capable of filling them desirably from every
standpoint. The rate of desertion in our Army now in time of peace is
alarming. The deserter should be treated by public opinion as a man
guilty of the greatest crime; while on the other hand the man who serves
steadily in the Army should be treated as what he is, that is, as
preeminently one of the best citizens of this Republic. After twelve
years' service in the Army, my own belief is that the man should be
given a preference according to his ability for certain types of office
over all civilian applicants without examination. This should also
apply, of course, to the men who have served twelve years in the Navy. A
special corps should be provided to do the manual labor now necessarily
demanded of the privates themselves.

Among the officers there should be severe examinations to weed out the
unfit up to the grade of major. From that position on appointments
should be solely by selection and it should be understood that a man of
merely average capacity could never get beyond the position of major,
while every man who serves in any grade a certain length of time prior
to promotion to the next grade without getting the promotion to the next
grade should be forthwith retired. The practice marches and field
maneuvers of the last two or three years have been invaluable to the
Army. They should be continued and extended. A rigid and not a
perfunctory examination of physical capacity has been provided for the
higher grade officers. This will work well. Unless an officer has a good
physique, unless he can stand hardship, ride well, and walk fairly, he
is not fit for any position, even after he has become a colonel. Before
he has become a colonel the need for physical fitness in the officers is
almost as great as in the enlisted man. I hope speedily to see
introduced into the Army a far more rigid and thoroughgoing test of
horsemanship for all field officers than at present. There should be a
Chief of Cavalry just as there is a Chief of Artillery.

Perhaps the most important of all legislation needed for the benefit of
the Army is a law to equalize and increase the pay of officers and
enlisted men of the Army, Navy, Marine Corps, and Revenue-Cutter
Service. Such a bill has been prepared, which it is hoped will meet with
your favorable consideration. The next most essential measure is to
authorize a number of extra officers as mentioned above. To make the
Army more attractive to enlisted men, it is absolutely essential to
create a service corps, such as exists in nearly every modern army in
the world, to do the skilled and unskilled labor, inseparably connected
with military administration, which is now exacted, without just
compensation, of enlisted men who voluntarily entered the Army to do
service of an altogether different kind. There are a number of other
laws necessary to so organize the Army as to promote its efficiency and
facilitate its rapid expansion in time of war; but the above are the
most important.

It was hoped The Hague Conference might deal with the question of the
limitation of armaments. But even before it had assembled informal
inquiries had developed that as regards naval armaments, the only ones
in which this country had any interest, it was hopeless to try to devise
any plan for which there was the slightest possibility of securing the
assent of the nations gathered at The Hague. No plan was even proposed
which would have had the assent of more than one first class Power
outside of the United States. The only plan that seemed at all feasible,
that of limiting the size of battleships, met with no favor at all. It
is evident, therefore, that it is folly for this Nation to base any hope
of securing peace on any international agreement as to the limitations
of armaments. Such being the fact it would be most unwise for us to stop
the upbuilding of our Navy. To build one battleship of the best and most
advanced type a year would barely keep our fleet up to its present
force. This is not enough. In my judgment, we should this year provide
for four battleships. But it is idle to build battleships unless in
addition to providing the men, and the means for thorough training, we
provide the auxiliaries for them, unless we provide docks, the coaling
stations, the colliers and supply ships that they need. We are extremely
deficient in coaling stations and docks on the Pacific, and this
deficiency should not longer be permitted to exist. Plenty of torpedo
boats and destroyers should be built. Both on the Atlantic and Pacific
coasts, fortifications of the best type should be provided for all our
greatest harbors.

We need always to remember that in time of war the Navy is not to be
used to defend harbors and sea-coast cities; we should perfect our
system of coast fortifications. The only efficient use for the Navy is
for offense. The only way in which it can efficiently protect our own
coast against the possible action of a foreign navy is by destroying
that foreign navy. For defense against a hostile fleet which actually
attacks them, the coast cities must depend upon their forts, mines,
torpedoes, submarines, and torpedo boats and destroyers. All of these
together are efficient for defensive purposes, but they in no way supply
the place of a thoroughly efficient navy capable of acting on the
offensive; for parrying never yet won a fight. It can only be won by
hard hitting, and an aggressive sea-going navy alone can do this hard
hitting of the offensive type. But the forts and the like are necessary
so that the Navy may be footloose. In time of war there is sure to be
demand, under pressure, of fright, for the ships to be scattered so as
to defend all kind of ports. Under penalty of terrible disaster, this
demand must be refused. The ships must be kept together, and their
objective made the enemies' fleet. If fortifications are sufficiently
strong, no modern navy will venture to attack them, so long as the foe
has in existence a hostile navy of anything like the same size or
efficiency. But unless there exists such a navy then the fortifications
are powerless by themselves to secure the victory. For of course the
mere deficiency means that any resolute enemy can at his leisure combine
all his forces upon one point with the certainty that he can take it.

Until our battle fleet is much larger than at present it should never be
split into detachments so far apart that they could not in event of
emergency be speedily united. Our coast line is on the Pacific just as
much as on the Atlantic. The interests of California, Oregon, and
Washington are as emphatically the interests of the whole Union as those
of Maine and New York, of Louisiana and Texas. The battle fleet should
now and then be moved to the Pacific, just as at other times it should
be kept in the Atlantic. When the Isthmian Canal is built the transit of
the battle fleet from one ocean to the other will be comparatively easy.
Until it is built I earnestly hope that the battle fleet will be thus
shifted between the two oceans every year or two. The marksmanship on
all our ships has improved phenomenally during the last five years.
Until within the last two or three years it was not possible to train a
battle fleet in squadron maneuvers under service conditions, and it is
only during these last two or three years that the training under these
conditions has become really effective. Another and most necessary
stride in advance is now being taken. The battle fleet is about starting
by the Straits of Magellan to visit the Pacific coast.. Sixteen
battleships are going under the command of Rear-Admiral Evans, while
eight armored cruisers and two other battleships will meet him at San
Francisco, whither certain torpedo destroyers are also going. No fleet
of such size has ever made such a voyage, and it will be of very great
educational use to all engaged in it. The only way by which to teach
officers and men how to handle the fleet so as to meet every possible
strain and emergency in time of war is to have them practice under
similar conditions in time of peace. Moreover, the only way to find out
our actual needs is to perform in time of peace whatever maneuvers might
be necessary in time of war. After war is declared it is too late to
find out the needs; that means to invite disaster. This trip to the
Pacific will show what some of our needs are and will enable us to
provide for them. The proper place for an officer to learn his duty is
at sea, and the only way in which a navy can ever be made efficient is
by practice at sea, under all the conditions which would have to be met
if war existed.

I bespeak the most liberal treatment for the officers and enlisted men
of the Navy. It is true of them, as likewise of the officers and
enlisted men of the Army, that they form a body whose interests should
be close to the heart of every good American. In return the most rigid
performance of duty should be exacted from them. The reward should be
ample when they do their best; and nothing less than their best should
be tolerated. It is idle to hope for the best results when the men in
the senior grades come to those grades late in life and serve too short
a time in them. Up to the rank of lieutenant-commander promotion in the
Navy should be as now, by seniority, subject, however, to such rigid
tests as would eliminate the unfit. After the grade of
lieutenant-commander, that is, when we come to the grade of command
rank, the unfit should be eliminated in such manner that only the
conspicuously fit would remain, and sea service should be a principal
test of fitness. Those who are passed by should, after a certain length
of service in their respective grades, be retired. Of a given number of
men it may well be that almost all would make good lieutenants and most
of them good lieutenant-commanders, while only a minority be fit to be
captains, and but three or four to be admirals. Those who object to
promotion otherwise than by mere seniority should reflect upon the
elementary fact that no business in private life could be successfully
managed if those who enter at the lowest rungs of the ladder should each
in turn, if he lived, become the head of the firm, its active director,
and retire after he had held the position a few months. On its face such
a scheme is an absurdity. Chances for improper favoritism can be
minimized by a properly formed board; such as the board of last June,
which did such conscientious and excellent work in elimination.

If all that ought to be done can not now be done, at least let a
beginning be made. In my last three annual Messages, and in a special
Message to the last Congress, the necessity for legislation that will
cause officers of the line of the Navy to reach the grades of captain
and rear-admiral at less advanced ages and which will cause them to have
more sea training and experience in the highly responsible duties of
those grades, so that they may become thoroughly skillful in handling
battleships, divisions, squadrons, and fleets in action, has been fully
explained and urgently recommended. Upon this subject the Secretary of
the Navy has submitted detailed and definite recommendations which have
received my approval, and which, if enacted into law, will accomplish
what is immediately necessary, and will, as compared with existing law,
make a saving of more than five millions of dollars during the next
seven years. The navy personnel act of 1899 has accomplished all that
was expected of it in providing satisfactory periods of service in the
several subordinate grades, from the grade of ensign to the grade of
lieutenant-commander, but the law is inadequate in the upper grades and
will continue to be inadequate on account of the expansion of the
personnel since its enactment. Your attention is invited to the
following quotations from the report of the personnel board of 1906, of
which the Assistant Secretary of the Navy was president:

"Congress has authorized a considerable increase in the number of
midshipmen at the Naval Academy, and these midshipmen upon graduation
are promoted to ensign and lieutenant (junior-grade). But no provision
has been made for a corresponding increase in the upper grades, the
result being that the lower grades will become so congested that a
midshipman now in one of the lowest classes at Annapolis may possibly
not be promoted to lieutenant until he is between 45 and 50 years of
age. So it will continue under the present law, congesting at the top
and congesting at the bottom. The country fails to get from the officers
of the service the best that is in them by not providing opportunity for
their normal development and training. The board believes that this
works a serious detriment to the efficiency of the Navy and is a real
menace to the public safety."

As stated in my special Message to the last Congress: "I am firmly of
the opinion that unless the present conditions of the higher
commissioned personnel is rectified by judicious legislation the future
of our Navy will be gravely compromised." It is also urgently necessary
to increase the efficiency of the Medical Corps of the Navy. Special
legislation to this end has already been proposed; and I trust it may be
enacted without delay.

It must be remembered that everything done in the Navy to fit it to do
well in time of war must be done in time of peace. Modern wars are
short; they do not last the length of time requisite to build a
battleship; and it takes longer to train the officers and men to do well
on a battleship than it takes to build it. Nothing effective can be done
for the Navy once war has begun, and the result of the war, if the
combatants are otherwise equally matched, will depend upon which power
has prepared best in time of peace. The United States Navy is the best
guaranty the Nation has that its honor and interest will not be
neglected; and in addition it offers by far the best insurance for peace
that can by human ingenuity be devised.

I call attention to the report of the official Board of Visitors to the
Naval Academy at Annapolis which has been forwarded to the Congress. The
report contains this paragraph:

"Such revision should be made of the courses of study and methods of
conducting and marking examinations as will develop and bring out the
average all-round ability of the midshipman rather than to give him
prominence in any one particular study. The fact should be kept in mind
that the Naval Academy is not a university but a school, the primary
object of which is to educate boys to be efficient naval officers.
Changes in curriculum, therefore, should be in the direction of making
the course of instruction less theoretical and more practical. No
portion of any future class should be graduated in advance of the full
four years' course, and under no circumstances should the standard of
instruction be lowered. The Academy in almost all of its departments is
now magnificently equipped, and it would be very unwise to make the
course of instruction less exacting than it is to-day."

Acting upon this suggestion I designated three seagoing officers, Capt.
Richard Wainwright, Commander Robert S. Griffin, and Lieut. Commander
Albert L. Key, all graduates of the Academy, to investigate conditions
and to recommend to me the best method of carrying into effect this
general recommendation. These officers performed the duty promptly and
intelligently, and, under the personal direction of Capt. Charles J.
Badger, Superintendent of the Academy, such of the proposed changes as
were deemed to be at present advisable were put into effect at the
beginning of the academic year, October 1, last. The results, I am
confident, will be most beneficial to the Academy, to the midshipmen,
and to the Navy.

In foreign affairs this country's steady policy is to behave toward
other nations as a strong and self-respecting man should behave toward
the other men with whom he is brought into contact. In other words, our
aim is disinterestedly to help other nations where such help can be
wisely given without the appearance of meddling with what does not
concern us; to be careful to act as a good neighbor; and at the same
time, in good-natured fashion, to make it evident that we do not intend
to be imposed upon.

The Second International Peace Conference was convened at The Hague on
the 15th of June last and remained in session until the 18th of October.
For the first time the representatives of practically all the civilized
countries of the world united in a temperate and kindly discussion of
the methods by which the causes of war might be narrowed and its
injurious effects reduced.

Although the agreements reached in the Conference did not in any
direction go to the length hoped for by the more sanguine, yet in many
directions important steps were taken, and upon every subject on the
programme there was such full and considerate discussion as to justify
the belief that substantial progress has been made toward further
agreements in the future. Thirteen conventions were agreed upon
embodying the definite conclusions which had been reached, and
resolutions were adopted marking the progress made in matters upon which
agreement was not yet sufficiently complete to make conventions
practicable.

The delegates of the United States were instructed to favor an agreement
for obligatory arbitration, the establishment of a permanent court of
arbitration to proceed judicially in the hearing and decision of
international causes, the prohibition of force for the collection of
contract debts alleged to be due from governments to citizens of other
countries until after arbitration as to the justice and amount of the
debt and the time and manner of payment, the immunity of private
property at sea, the better definition of the rights of neutrals, and,
in case any measure to that end should be introduced, the limitation of
armaments.

In the field of peaceful disposal of international differences several
important advances were made. First, as to obligatory arbitration.
Although the Conference failed to secure a unanimous agreement upon the
details of a convention for obligatory arbitration, it did resolve as
follows;

"It is unanimous: (1) In accepting the principle for obligatory
arbitration; (2) In declaring that certain differences, and notably
those relating to the interpretation and application of international
conventional stipulations are susceptible of being submitted to
obligatory arbitration without any restriction."

In view of the fact that as a result of the discussion the vote upon the
definite treaty of obligatory arbitration, which was proposed, stood 32
in favor to 9 against the adoption of the treaty, there can be little
doubt that the great majority of the countries of the world have reached
a point where they are now ready to apply practically the principles
thus unanimously agreed upon by the Conference.

The second advance, and a very great one, is the agreement which relates
to the use of force for the collection of contract debts. Your attention
is invited to the paragraphs upon this subject in my Message of
December, 1906, and to the resolution of the Third American Conference
at Rio in the summer of 1906. The convention upon this subject adopted
by the Conference substantially as proposed by the American delegates is
as follows:

"In order to avoid between nations armed conflicts of a purely pecuniary
origin arising from contractual debts claimed of the government of one
country by the government of another country to be due to its nationals,
the signatory Powers agree not to have recourse to armed force for the
collection of such contractual debts.

"However, this stipulation shall not be applicable when the debtor State
refuses or leaves unanswered an offer to arbitrate, or, in case of
acceptance, makes it impossible to formulate the terms of submission,
or, after arbitration, fails to comply with the award rendered.

"It is further agreed that arbitration here contemplated shall be in
conformity, as to procedure, with Chapter III of the Convention for the
Pacific Settlement of International Disputes adopted at The Hague, and
that it shall determine, in so far as there shall be no agreement
between the parties, the justice and the amount of the debt, the time
and mode of payment thereof."

Such a provision would have prevented much injustice and extortion in
the past, and I cannot doubt that its effect in the future will be most
salutary.

A third advance has been made in amending and perfecting the convention
of 1899 for the voluntary settlement of international disputes, and
particularly the extension of those parts of that convention which
relate to commissions of inquiry. The existence of those provisions
enabled the Governments of Great Britain and Russia to avoid war,
notwithstanding great public excitement, at the time of the Dogger Bank
incident, and the new convention agreed upon by the Conference gives
practical effect to the experience gained in that inquiry.

Substantial progress was also made towards the creation of a permanent
judicial tribunal for the determination of international causes. There
was very full discussion of the proposal for such a court and a general
agreement was finally reached in favor of its creation. The Conference
recommended to the signatory Powers the adoption of a draft upon which
it agreed for the organization of the court, leaving to be determined
only the method by which the judges should be selected. This remaining
unsettled question is plainly one which time and good temper will solve.

A further agreement of the first importance was that for the creation of
an international prize court. The constitution, organization and
procedure of such a tribunal were provided for in detail. Anyone who
recalls the injustices under which this country suffered as a neutral
power during the early part of the last century can not fail to see in
this provision for an international prize court the great advance which
the world is making towards the substitution of the rule of reason and
justice in place of simple force. Not only will the international prize
court be the means of protecting the interests of neutrals, but it is in
itself a step towards the creation of the more general court for the
hearing of international controversies to which reference has just been
made. The organization and action of such a prize court can not fail to
accustom the different countries to the submission of international
questions to the decision of an international tribunal, and we may
confidently expect the results of such submission to bring about a
general agreement upon the enlargement of the practice.

Numerous provisions were adopted for reducing the evil effects of war
and for defining the rights and duties of neutrals.

The Conference also provided for the holding of a third Conference
within a period similar to that which elapsed between the First and
Second Conferences.

The delegates of the United States worthily represented the spirit of
the American people and maintained with fidelity and ability the policy
of our Government upon all the great questions discussed in the
Conference.

The report of the delegation, together with authenticated copies of the
conventions signed, when received, will be laid before the Senate for
its consideration.

When we remember how difficult it is for one of our own legislative
bodies, composed of citizens of the same country, speaking the same
language, living under the same laws, and having the same customs, to
reach an agreement, or even to secure a majority upon any difficult and
important subject which is proposed for legislation, it becomes plain
that the representatives of forty-five different countries, speaking
many different languages, accustomed to different methods of procedure,
with widely diverse interests, who discussed so many different subjects
and reached agreements upon so many, are entitled to grateful
appreciation for the wisdom, patience, and moderation with which they
have discharged their duty. The example of this temperate discussion,
and the agreements and the efforts to agree, among representatives of
all the nations of the earth, acting with universal recognition of the
supreme obligation to promote peace, can not fail to be a powerful
influence for good in future international relations.

A year ago in consequence of a revolutionary movement in Cuba which
threatened the immediate return to chaos of the island, the United
States intervened, sending down an army and establishing a provisional
government under Governor Magoon. Absolute quiet and prosperity have
returned to the island because of this action. We are now taking steps
to provide for elections in the island and our expectation is within the
coming year to be able to turn the island over again to government
chosen by the people thereof. Cuba is at our doors. It is not possible
that this Nation should permit Cuba again to sink into the condition
from which we rescued it. All that we ask of the Cuban people is that
they be prosperous, that they govern themselves so as to bring content,
order and progress to their island, the Queen of the Antilles; and our
only interference has been and will be to help them achieve these
results.

An invitation has been extended by Japan to the Government and people of
the United States to participate in a great national exposition to be
held at Tokyo from April 1 to October 31, 1912, and in which the
principal countries of the world are to be invited to take part. This is
an occasion of special interest to all the nations of the world, and
peculiarly so to us; for it is the first instance in which such a great
national exposition has been held by a great power dwelling on the
Pacific; and all the nations of Europe and America will, I trust, join
in helping to success this first great exposition ever held by a great
nation of Asia. The geographical relations of Japan and the United
States as the possessors of such large portions of the coasts of the
Pacific, the intimate trade relations already existing between the two
countries, the warm friendship which has been maintained between them
without break since the opening of Japan to intercourse with the western
nations, and her increasing wealth and production, which we regard with
hearty goodwill and wish to make the occasion of mutually beneficial
commerce, all unite in making it eminently desirable that this
invitation should be accepted. I heartily recommend such legislation as
will provide in generous fashion for the representation of this
Government and its people in the proposed exposition. Action should be
taken now. We are apt to underestimate the time necessary for
preparation in such cases. The invitation to the French Exposition of
1900 was brought to the attention of the Congress by President Cleveland
in December, 1895; and so many are the delays necessary to such
proceedings that the period of font years and a half which then
intervened before the exposition proved none too long for the proper
preparation of the exhibits.

The adoption of a new tariff by Germany, accompanied by conventions for
reciprocal tariff concessions between that country and most of the other
countries of continental Europe, led the German Government to give the
notice necessary to terminate the reciprocal commercial agreement with
this country proclaimed July 13, 1900. The notice was to take effect on
the 1st of March, 1906, and in default of some other arrangements this
would have left the exports from the United States to Germany subject to
the general German tariff duties, from 25 to 50 per cent higher than the
conventional duties imposed upon the goods of most of our competitors
for German trade.

Under a special agreement made between the two Governments in February,
1906, the German Government postponed the operation of their notice
until the 30th of June, 1907. In the meantime, deeming it to be my duty
to make every possible effort to prevent a tariff war between the United
States and Germany arising from misunderstanding by either country of
the conditions existing in the other, and acting upon the invitation of
the German Government, I sent to Berlin a commission composed of
competent experts in the operation and administration of the customs
tariff, from the Departments of the Treasury and Commerce and Labor.
This commission was engaged for several mouths in conference with a
similar commission appointed by the German Government, under
instructions, so far as practicable, to reach a common understanding as
to all the facts regarding the tariffs of the United States and Germany
material and relevant to the trade relations between the two countries.
The commission reported, and upon the basis of the report, a further
temporary commercial agreement was entered into by the two countries,
pursuant to which, in the exercise of the authority conferred upon the
President by the third section of the tariff act of July 24, 1897, I
extended the reduced tariff rates provided for in that section to
champagne and all other sparkling wines, and pursuant to which the
German conventional or minimum tariff rates were extended to about 96
1/2 per cent of all the exports from the United States to Germany. This
agreement is to remain in force until the 30th of June, 1908, and until
six months after notice by either party to terminate it.

The agreement and the report of the commission on which it is based will
be laid before the Congress for its information.

This careful examination into the tariff relations between the United
States and Germany involved an inquiry into certain of our methods of
administration which had been the cause of much complaint on the part of
German exporters. In this inquiry I became satisfied that certain
vicious and unjustifiable practices had grown up in our customs
administration, notably the practice of determining values of imports
upon detective reports never disclosed to the persons whose interests
were affected. The use of detectives, though often necessary, tends
towards abuse, and should be carefully guarded. Under our practice as I
found it to exist in this case, the abuse had become gross and
discreditable. Under it, instead of seeking information as to the market
value of merchandise from the well-known and respected members of the
commercial community in the country of its production, secret statements
were obtained from informers and discharged employees and business
rivals, and upon this kind of secret evidence the values of imported
goods were frequently raised and heavy penalties were frequently imposed
upon importers who were never permitted to know what the evidence was
and who never had an opportunity to meet it. It is quite probable that
this system tended towards an increase of the duties collected upon
imported goods, but I conceive it to be a violation of law to exact more
duties than the law provides, just as it is a violation to admit goods
upon the payment of less than the legal rate of duty. This practice was
repugnant to the spirit of American law and to American sense of
justice. In the judgment of the most competent experts of the Treasury
Department and the Department of Commerce and Labor it was wholly
unnecessary for the due collection of the customs revenues, and the
attempt to defend it merely illustrates the demoralization which
naturally follows from a long continued course of reliance upon such
methods. I accordingly caused the regulations governing this branch of
the customs service to be modified so that values are determined upon a
hearing in which all the parties interested have an opportunity to be
heard and to know the evidence against them. Moreover our Treasury
agents are accredited to the government of the country in which they
seek information, and in Germany receive the assistance of the
quasi-official chambers of commerce in determining the actual market
value of goods, in accordance with what I am advised to be the true
construction of the law.

These changes of regulations were adapted to the removal of such
manifest abuses that I have not felt that they ought to be confined to
our relations with Germany; and I have extended their operation to all
other countries which have expressed a desire to enter into similar
administrative relations.

I ask for authority to reform the agreement with China under which the
indemnity of 1900 was fixed, by remitting and cancelling the obligation
of China for the payment of all that part of the stipulated indemnity
which is in excess of the sum of eleven million, six hundred and
fifty-five thousand, four hundred and ninety-two dollars and sixty-nine
cents, and interest at four per cent. After the rescue of the foreign
legations in Peking during the Boxer troubles in 1900 the Powers
required from China the payment of equitable indemnities to the several
nations, and the final protocol under which the troops were withdrawn,
signed at Peking, September 7, 1901, fixed the amount of this indemnity
allotted to the United States at over $20,000,000, and China paid, up to
and including the 1st day of June last, a little over $6,000,000. It was
the first intention of this Government at the proper time, when all
claims had been presented and all expenses ascertained as fully as
possible, to revise the estimates and account, and as a proof of sincere
friendship for China voluntarily to release that country from its legal
liability for all payments in excess of the sum which should prove to be
necessary for actual indemnity to the United States and its citizens.

This Nation should help in every practicable way in the education of the
Chinese people, so that the vast and populous Empire of China may
gradually adapt itself to modern conditions. One way of doing this is by
promoting the coming of Chinese students to this country and making it
attractive to them to take courses at our universities and higher
educational institutions. Our educators should, so far as possible, take
concerted action toward this end.

On the courteous invitation of the President of Mexico, the Secretary of
State visited that country in September and October and was received
everywhere with the greatest kindness and hospitality.

He carried from the Government of the United States to our southern
neighbor a message of respect and good will and of desire for better
acquaintance and increasing friendship. The response from the Government
and the people of Mexico was hearty and sincere. No pains were spared to
manifest the most friendly attitude and feeling toward the United
States.

In view of the close neighborhood of the two countries the relations
which exist between Mexico and the United States are just cause for
gratification. We have a common boundary of over 1,500 miles from the
Gulf of Mexico to the Pacific. Much of it is marked only by the shifting
waters of the Rio Grande. Many thousands of Mexicans are residing upon
our side of the line and it is estimated that over 40,000 Americans are
resident in Mexican territory and that American investments in Mexico
amount to over seven hundred million dollars. The extraordinary
industrial and commercial prosperity of Mexico has been greatly promoted
by American enterprise, and Americans are sharing largely in its
results. The foreign trade of the Republic already exceeds $240,000,000
per annum, and of this two-thirds both of exports and imports are
exchanged with the United States. Under these circumstances numerous
questions necessarily arise between the two countries. These questions
are always approached and disposed of in a spirit of mutual courtesy and
fair dealing. Americans carrying on business in Mexico testify uniformly
to the kindness and consideration with which they are treated and their
sense of the security of their property and enterprises under the wise
administration of the great statesman who has so long held the office of
Chief Magistrate of that Republic.

The two Governments have been uniting their efforts for a considerable
time past to aid Central America in attaining the degree of peace and
order which have made possible the prosperity of the northern ports of
the Continent. After the peace between Guatemala, Honduras, and
Salvador, celebrated under the circumstances described in my last
Message, a new war broke out between the Republics of Nicaragua,
Honduras, and Salvador. The effort to compose this new difficulty has
resulted in the acceptance of the joint suggestion of the Presidents of
Mexico and of the United States for a general peace conference between
all the countries of Central America. On the 17th day of September last
a protocol was signed between the representatives of the five Central
American countries accredited to this Government agreeing upon a
conference to be held in the City of Washington "in order to devise the
means of preserving the good relations among said Republics and bringing
about permanent peace in those countries." The protocol includes the
expression of a wish that the Presidents of the United States and Mexico
should appoint "representatives to lend their good and impartial offices
in a purely friendly way toward the realization of the objects of the
conference." The conference is now in session and will have our best
wishes and, where it is practicable, our friendly assistance.

One of the results of the Pan American Conference at Rio Janeiro in the
summer of 1906 has been a great increase in the activity and usefulness
of the International Bureau of American Republics. That institution,
which includes all the American Republics in its membership and brings
all their representatives together, is doing a really valuable work in
informing the people of the United States about the other Republics and
in making the United States known to them. Its action is now limited by
appropriations determined when it was doing a work on a much smaller
scale and rendering much less valuable service. I recommend that the
contribution of this Government to the expenses of the Bureau be made
commensurate with its increased work.

***

State of the Union Address
Theodore Roosevelt
December 8, 1908

To the Senate and House of Representatives:

FINANCES.

The financial standing of the Nation at the present time is excellent,
and the financial management of the Nation's interests by the Government
during the last seven years has shown the most satisfactory results. But
our currency system is imperfect, and it is earnestly to be hoped that
the Currency Commission will be able to propose a thoroughly good system
which will do away with the existing defects.

During the period from July 1, 1901, to September 30, 1908, there was an
increase in the amount of money in circulation of $902,991,399. The
increase in the per capita during this period was $7.06. Within this
time there were several occasions when it was necessary for the Treasury
Department to come to the relief of the money market by purchases or
redemptions of United States bonds; by increasing deposits in national
banks; by stimulating additional issues of national bank notes, and by
facilitating importations from abroad of gold. Our imperfect currency
system has made these proceedings necessary, and they were effective
until the monetary disturbance in the fall of 1907 immensely increased
the difficulty of ordinary methods of relief. By the middle of November
the available working balance in the Treasury had been reduced to
approximately $5,000,000. Clearing house associations throughout the
country had been obliged to resort to the expedient of issuing clearing
house certificates, to be used as money. In this emergency it was
determined to invite subscriptions for $50,000,000 Panama Canal bonds,
and $100,000,000 three per cent certificates of indebtedness authorized
by the act of June 13, 1898. It was proposed to re-deposit in the
national banks the proceeds of these issues, and to permit their use as
a basis for additional circulating notes of national banks. The moral
effect of this procedure was so great that it was necessary to issue
only $24,631,980 of the Panama Canal bonds and $15,436,500 of the
certificates of indebtedness.

During the period from July 1, 1901, to September 30, 1908, the balance
between the net ordinary receipts and the net ordinary expenses of the
Government showed a surplus in the four years 1902, 1903, 1906 and 1907,
and a deficit in the years 1904, 1905, 1908 and a fractional part of the
fiscal year 1909. The net result was a surplus of $99,283,413.54. The
financial operations of the Government during this period, based upon
these differences between receipts and expenditures, resulted in a net
reduction of the interest-bearing debt of the United States from
$987,141,040 to $897,253,990, notwithstanding that there had been two
sales of Panama Canal bonds amounting in the aggregate to $54,631,980,
and an issue of three per cent certificates of indebtedness under the
act of June 13, 1998, amounting to $15,436,500. Refunding operations of
the Treasury Department under the act of March 14, 1900, resulted in the
conversion into two per cent consols of 1930 of $200,309,400 bonds
bearing higher rates of interest. A decrease of $8,687,956 in the annual
interest charge resulted from these operations.

In short, during the seven years and three months there has been a net
surplus of nearly one hundred millions of receipts over expenditures, a
reduction of the interest-bearing debt by ninety millions, in spite of
the extraordinary expense of the Panama Canal, and a saving of nearly
nine millions on the annual interest charge. This is an exceedingly
satisfactory showing, especially in view of the fact that during this
period the Nation has never hesitated to undertake any expenditure that
it regarded as necessary. There have been no new taxes and no increase
of taxes; on the contrary, some taxes have been taken off; there has
been a reduction of taxation.

CORPORATIONS.

As regards the great corporations engaged in interstate business, and
especially the railroad, I can only repeat what I have already again and
again said in my messages to the Congress, I believe that under the
interstate clause of the Constitution the United States has complete and
paramount right to control all agencies of interstate commerce, and I
believe that the National Government alone can exercise this right with
wisdom and effectiveness so as both to secure justice from, and to do
justice to, the great corporations which are the most important factors
in modern business. I believe that it is worse than folly to attempt to
prohibit all combinations as is done by the Sherman anti-trust law,
because such a law can be enforced only imperfectly and unequally, and
its enforcement works almost as much hardship as good. I strongly
advocate that instead of an unwise effort to prohibit all combinations
there shall be substituted a law which shall expressly permit
combinations which are in the interest of the public, but shall at the
same time give to some agency of the National Government full power of
control and supervision over them. One of the chief features of this
control should be securing entire publicity in all matters which the
public has a right to know, and furthermore, the power, not by judicial
but by executive action, to prevent or put a stop to every form of
improper favoritism or other wrongdoing.

The railways of the country should be put completely under the
Interstate Commerce Commission and removed from the domain of the
anti-trust law. The power of the Commission should be made
thoroughgoing, so that it could exercise complete supervision and
control over the issue of securities as well as over the raising and
lowering of rates. As regards rates, at least, this power should be
summary. The power to investigate the financial operations and accounts
of the railways has been one of the most valuable features in recent
legislation. Power to make combinations and traffic agreements should be
explicitly conferred upon the railroads, the permission of the
Commission being first gained and the combination or agreement being
published in all its details. In the interest of the public the
representatives of the public should have complete power to see that the
railroads do their duty by the public, and as a matter of course this
power should also be exercised so as to see that no injustice is done to
the railroads. The shareholders, the employees and the shippers all have
interests that must be guarded. It is to the interest of all of them
that no swindling stock speculation should be allowed, and that there
should be no improper issuance of securities. The guiding intelligences
necessary for the successful building and successful management of
railroads should receive ample remuneration; but no man should be
allowed to make money in connection with railroads out of fraudulent
over-capitalization and kindred stock-gambling performances; there must
be no defrauding of investors, oppression of the farmers and business
men who ship freight, or callous disregard of the rights and needs of
the employees. In addition to this the interests of the shareholders, of
the employees, and of the shippers should all be guarded as against one
another. To give any one of them undue and improper consideration is to
do injustice to the others. Rates must be made as low as is compatible
with giving proper returns to all the employees of the railroad, from
the highest to the lowest, and proper returns to the shareholders; but
they must not, for instance, be reduced in such fashion as to
necessitate a cut in the wages of the employees or the abolition of the
proper and legitimate profits of honest shareholders.

Telegraph and telephone companies engaged in interstate business should
be put under the jurisdiction of the Interstate Commerce Commission.

It is very earnestly to be wished that our people, through their
representatives, should act in this matter. It is hard to say whether
most damage to the country at large would come from entire failure on
the part of the public to supervise and control the actions of the great
corporations, or from the exercise of the necessary governmental power
in a way which would do injustice and wrong to the corporations. Both
the preachers of an unrestricted individualism, and the preachers of an
oppression which would deny to able men of business the just reward of
their initiative and business sagacity, are advocating policies that
would be fraught with the gravest harm to the whole country. To permit
every lawless capitalist, every law-defying corporation, to take any
action, no matter how iniquitous, in the effort to secure an improper
profit and to build up privilege, would be ruinous to the Republic and
would mark the abandonment of the effort to secure in the industrial
world the spirit of democratic fair dealing. On the other hand, to
attack these wrongs in that spirit of demagogy which can see wrong only
when committed by the man of wealth, and is dumb and blind in the
presence of wrong committed against men of property or by men of no
property, is exactly as evil as corruptly to defend the wrongdoing of
men of wealth. The war we wage must be waged against misconduct, against
wrongdoing wherever it is found; and we must stand heartily for the
rights of every decent man, whether he be a man of great wealth or a man
who earns his livelihood as a wage-worker or a tiller of the soil.

It is to the interest of all of us that there should be a premium put
upon individual initiative and individual capacity, and an ample reward
for the great directing intelligences alone competent to manage the
great business operations of to-day. It is well to keep in mind that
exactly as the anarchist is the worst enemy of liberty and the
reactionary the worst enemy of order, so the men who defend the rights
of property have most to fear from the wrongdoers of great wealth, and
the men who are championing popular rights have most to fear from the
demagogues who in the name of popular rights would do wrong to and
oppress honest business men, honest men of wealth; for the success of
either type of wrongdoer necessarily invites a violent reaction against
the cause the wrongdoer nominally upholds. In point of danger to the
Nation there is nothing to choose between on the one hand the
corruptionist, the bribe-giver, the bribe-taker, the man who employs his
great talent to swindle his fellow-citizens on a large scale, and, on
the other hand, the preacher of class hatred, the man who, whether from
ignorance or from willingness to sacrifice his country to his ambition,
persuades well-meaning but wrong-headed men to try to destroy the
instruments upon which our prosperity mainly rests. Let each group of
men beware of and guard against the shortcomings to which that group is
itself most liable. Too often we see the business community in a spirit
of unhealthy class consciousness deplore the effort to hold to account
under the law the wealthy men who in their management of great
corporations, whether railroads, street railways, or other industrial
enterprises, have behaved in a way that revolts the conscience of the
plain, decent people. Such an attitude can not be condemned too
severely, for men of property should recognize that they jeopardize the
rights of property when they fail heartily to join in the effort to do
away with the abuses of wealth. On the other hand, those who advocate
proper control on behalf of the public, through the State, of these
great corporations, and of the wealth engaged on a giant scale in
business operations, must ever keep in mind that unless they do
scrupulous justice to the corporation, unless they permit ample profit,
and cordially encourage capable men of business so long as they act with
honesty, they are striking at the root of our national well-being; for
in the long run, under the mere pressure of material distress, the
people as a whole would probably go back to the reign of an unrestricted
individualism rather than submit to a control by the State so drastic
and so foolish, conceived in a spirit of such unreasonable and narrow
hostility to wealth, as to prevent business operations from being
profitable, and therefore to bring ruin upon the entire business
community, and ultimately upon the entire body of citizens.

The opposition to Government control of these great corporations makes
its most effective effort in the shape of an appeal to the old doctrine
of State's rights. Of course there are many sincere men who now believe
in unrestricted individualism in business, just as there were formerly
many sincere men who believed in slavery--that is, in the unrestricted
right of an individual to own another individual. These men do not by
themselves have great weight, however. The effective fight against
adequate Government control and supervision of individual, and
especially of corporate, wealth engaged in interstate business is
chiefly done under cover; and especially under cover of an appeal to
State's rights. It is not at all infrequent to read in the same speech a
denunciation of predatory wealth fostered by special privilege and
defiant of both the public welfare and law of the land, and a
denunciation of centralization in the Central Government of the power to
deal with this centralized and organized wealth. Of course the policy
set forth in such twin denunciations amounts to absolutely nothing, for
the first half is nullified by the second half. The chief reason, among
the many sound and compelling reasons, that led to the formation of the
National Government was the absolute need that the Union, and not the
several States, should deal with interstate and foreign commerce; and
the power to deal with interstate commerce was granted absolutely and
plenarily to the Central Government and was exercised completely as
regards the only instruments of interstate commerce known in those
days--the waterways, the highroads, as well as the partnerships of
individuals who then conducted all of what business there was.
Interstate commerce is now chiefly conducted by railroads; and the great
corporation has supplanted the mass of small partnerships or
individuals. The proposal to make the National Government supreme over,
and therefore to give it complete control over, the railroads and other
instruments of interstate commerce is merely a proposal to carry out to
the letter one of the prime purposes, if not the prime purpose, for
which the Constitution was rounded. It does not represent
centralization. It represents merely the acknowledgment of the patent
fact that centralization has already come in business. If this
irresponsible outside business power is to be controlled in the interest
of the general public it can only be controlled in one way--by giving
adequate power of control to the one sovereignty capable of exercising
such power--the National Government. Forty or fifty separate state
governments can not exercise that power over corporations doing business
in most or all of them; first, because they absolutely lack the
authority to deal with interstate business in any form; and second,
because of the inevitable conflict of authority sure to arise in the
effort to enforce different kinds of state regulation, often
inconsistent with one another and sometimes oppressive in themselves.
Such divided authority can not regulate commerce with wisdom and effect.
The Central Government is the only power which, without oppression, can
nevertheless thoroughly and adequately control and supervise the large
corporations. To abandon the effort for National control means to
abandon the effort for all adequate control and yet to render likely
continual bursts of action by State legislatures, which can not achieve
the purpose sought for, but which can do a great deal of damage to the
corporation without conferring any real benefit on the public.

I believe that the more farsighted corporations are themselves coming to
recognize the unwisdom of the violent hostility they have displayed
during the last few years to regulation and control by the National
Government of combinations engaged in interstate business. The truth is
that we who believe in this movement of asserting and exercising a
genuine control, in the public interest, over these great corporations
have to contend against two sets of enemies, who, though nominally
opposed to one another, are really allies in preventing a proper
solution of the problem. There are, first, the big corporation men, and
the extreme individualists among business men, who genuinely believe in
utterly unregulated business that is, in the reign of plutocracy; and,
second, the men who, being blind to the economic movements of the day,
believe in a movement of repression rather than of regulation of
corporations, and who denounce both the power of the railroads and the
exercise of the Federal power which alone can really control the
railroads. Those who believe in efficient national control, on the other
hand, do not in the least object to combinations; do not in the least
object to concentration in business administration. On the contrary,
they favor both, with the all important proviso that there shall be such
publicity about their workings, and such thoroughgoing control over
them, as to insure their being in the interest, and not against the
interest, of the general public. We do not object to the concentration
of wealth and administration; but we do believe in the distribution of
the wealth in profits to the real owners, and in securing to the public
the full benefit of the concentrated administration. We believe that
with concentration in administration there can come both be advantage of
a larger ownership and of a more equitable distribution of profits, and
at the same time a better service to the commonwealth. We believe that
the administration should be for the benefit of the many; and that greed
and rascality, practiced on a large scale, should be punished as
relentlessly as if practiced on a small scale.

We do not for a moment believe that the problem will be solved by any
short and easy method. The solution will come only by pressing various
concurrent remedies. Some of these remedies must lie outside the domain
of all government. Some must lie outside the domain of the Federal
Government. But there is legislation which the Federal Government alone
can enact and which is absolutely vital in order to secure the
attainment of our purpose. Many laws are needed. There should be
regulation by the National Government of the great interstate
corporations, including a simple method of account keeping, publicity,
supervision of the issue securities, abolition of rebates, and of
special privileges. There should be short time franchises for all
corporations engaged in public business; including the corporations
which get power from water rights. There should be National as well as
State guardianship of mines and forests. The labor legislation
hereinafter referred to should concurrently be enacted into law.

To accomplish this, means of course a certain increase in the use
of--not the creation of--power, by the Central Government. The power
already exists; it does not have to be created; the only question is
whether it shall be used or left idle--and meanwhile the corporations
over which the power ought to be exercised will not remain idle. Let
those who object to this increase in the use of the only power
available, the national power, be frank, and admit openly that they
propose to abandon any effort to control the great business corporations
and to exercise supervision over the accumulation and distribution of
wealth; for such supervision and control can only come through this
particular kind of increase of power. We no more believe in that
empiricism which demand, absolutely unrestrained individualism than we
do in that empiricism which clamors for a deadening socialism which
would destroy all individual initiative and would ruin the country with
a completeness that not even an unrestrained individualism itself could
achieve. The danger to American democracy lies not in the least in the
concentration of administrative power in responsible and accountable
hands. It lies in having the power insufficiently concentrated, so that
no one can be held responsible to the people for its use. Concentrated
power is palpable, visible, responsible, easily reached, quickly held to
account. Power scattered through many administrators, many legislators,
many men who work behind and through legislators and administrators, is
impalpable, is unseen, is irresponsible, can not be reached, can not be
held to account. Democracy is in peril wherever the administration of
political power is scattered among a variety of men who work in secret,
whose very names are unknown to the common people. It is not in peril
from any man who derives authority from the people, who exercises it in
sight of the people, and who is from time to time compelled to give an
account of its exercise to the people.

LABOR.

There are many matters affecting labor and the status of the wage-worker
to which I should like to draw your attention, but an exhaustive
discussion of the problem in all its aspects is not now necessary. This
administration is nearing its end; and, moreover, under our form of
government the solution of the problem depends upon the action of the
States as much as upon the action of the Nation. Nevertheless, there are
certain considerations which I wish to set before you, because I hope
that our people will more and more keep them in mind. A blind and
ignorant resistance to every effort for the reform of abuses and for the
readjustment of society to modern industrial conditions represents not
true conservatism, but an incitement to the wildest radicalism; for wise
radicalism and wise conservatism go hand in hand, one bent on progress,
the other bent on seeing that no change is made unless in the right
direction. I believe in a steady effort, or perhaps it would be more
accurate to say in steady efforts in many different directions, to bring
about a condition of affairs under which the men who work with hand or
with brain, the laborers, the superintendents, the men who produce for
the market and the men who find a market for the articles produced,
shall own a far greater share than at present of the wealth they
produce, and be enabled to invest it in the tools and instruments by
which all work is carried on. As far as possible I hope to see a frank
recognition of the advantages conferred by machinery, organization, and
division of labor, accompanied by an effort to bring about a larger
share in the ownership by wage-worker of railway, mill and factory. In
farming, this simply means that we wish to see the farmer own his own
land; we do not wish to see the farms so large that they become the
property of absentee landlords who farm them by tenants, nor yet so
small that the farmer becomes like a European peasant. Again, the
depositors in our savings banks now number over one-tenth of our entire
population. These are all capitalists, who through the savings banks
loan their money to the workers--that is, in many cases to
themselves--to carry on their various industries. The more we increase
their number, the more we introduce the principles of cooperation into
our industry. Every increase in the number of small stockholders in
corporations is a good thing, for the same reasons; and where the
employees are the stockholders the result is particularly good. Very
much of this movement must be outside of anything that can be
accomplished by legislation; but legislation can do a good deal. Postal
savings banks will make it easy for the poorest to keep their savings in
absolute safety. The regulation of the national highways must be such
that they shall serve all people with equal justice. Corporate finances
must be supervised so as to make it far safer than at present for the
man of small means to invest his money in stocks. There must be
prohibition of child labor, diminution of woman labor, shortening of
hours of all mechanical labor; stock watering should be prohibited, and
stock gambling so far as is possible discouraged. There should be a
progressive inheritance tax on large fortunes. Industrial education
should be encouraged. As far as possible we should lighten the burden of
taxation on the small man. We should put a premium upon thrift, hard
work, and business energy; but these qualities cease to be the main
factors in accumulating a fortune long before that fortune reaches a
point where it would be seriously affected by any inheritance tax such
as I propose. It is eminently right that the Nation should fix the terms
upon which the great fortunes are inherited. They rarely do good and
they often do harm to those who inherit them in their entirety.

PROTECTION FOR WAGEWORKERS.

The above is the merest sketch, hardly even a sketch in outline, of the
reforms for which we should work. But there is one matter with which the
Congress should deal at this session. There should no longer be any
paltering with the question of taking care of the wage-workers who,
under our present industrial system, become killed, crippled, or worn
out as part of the regular incidents of a given business. The majority
of wageworkers must have their rights secured for them by State action;
but the National Government should legislate in thoroughgoing and
far-reaching fashion not only for all employees of the National
Government, but for all persons engaged in interstate commerce. The
object sought for could be achieved to a measurable degree, as far as
those killed or crippled are concerned, by proper employers' liability
laws. As far as concerns those who have been worn out, I call your
attention to the fact that definite steps toward providing old-age
pensions have been taken in many of our private industries. These may be
indefinitely extended through voluntary association and contributory
schemes, or through the agency of savings banks, as under the recent
Massachusetts plan. To strengthen these practical measures should be our
immediate duty; it is not at present necessary to consider the larger
and more general governmental schemes that most European governments
have found themselves obliged to adopt.

Our present system, or rather no system, works dreadful wrong, and is of
benefit to only one class of people--the lawyers. When a workman is
injured what he needs is not an expensive and doubtful lawsuit, but the
certainty of relief through immediate administrative action. The number
of accidents which result in the death or crippling of wageworkers, in
the Union at large, is simply appalling; in a very few years it runs up
a total far in excess of the aggregate of the dead and wounded in any
modern war. No academic theory about "freedom of contract" or
"constitutional liberty to contract" should be permitted to interfere
with this and similar movements. Progress in civilization has everywhere
meant a limitation and regulation of contract. I call your especial
attention to the bulletin of the Bureau of Labor which gives a statement
of the methods of treating the unemployed in European countries, as this
is a subject which in Germany, for instance, is treated in connection
with making provision for worn-out and crippled workmen.

Pending a thoroughgoing investigation and action there is certain
legislation which should be enacted at once. The law, passed at the last
session of the Congress, granting compensation to certain classes of
employees of the Government, should be extended to include all employees
of the Government and should be made more liberal in its terms. There is
no good ground for the distinction made in the law between those engaged
in hazardous occupations and those not so engaged. If a man is injured
or killed in any line of work, it was hazardous in his case. Whether 1
per cent or 10 per cent of those following a given occupation actually
suffer injury or death ought not to have any bearing on the question of
their receiving compensation. It is a grim logic which says to an
injured employee or to the dependents of one killed that he or they are
entitled to no compensation because very few people other than he have
been injured or killed in that occupation. Perhaps one of the most
striking omissions in the law is that it does not embrace peace officers
and others whose lives may be sacrificed in enforcing the laws of the
United States. The terms of the act providing compensation should be
made more liberal than in the present act. A year's compensation is not
adequate for a wage-earner's family in the event of his death by
accident in the course of his employment. And in the event of death
occurring, say, ten or eleven months after the accident, the family
would only receive as compensation the equivalent of one or two months'
earnings. In this respect the generosity of the United States towards
its employees compares most unfavorably with that of every country in
Europe--even the poorest.

The terms of the act are also a hardship in prohibiting payment in cases
where the accident is in any way due to the negligence of the employee.
It is inevitable that daily familiarity with danger will lead men to
take chances that can be construed into negligence. So well is this
recognized that in practically all countries in the civilized world,
except the United States, only a great degree of negligence acts as a
bar to securing compensation. Probably in no other respect is our
legislation, both State and National, so far behind practically the
entire civilized world as in the matter of liability and compensation
for accidents in industry. It is humiliating that at European
international congresses on accidents the United States should be
singled out as the most belated among the nations in respect to
employers' liability legislation. This Government is itself a large
employer of labor, and in its dealings with its employees it should set
a standard in this country which would place it on a par with the most
progressive countries in Europe. The laws of the United States in this
respect and the laws of European countries have been summarized in a
recent Bulletin of the Bureau of Labor, and no American who reads this
summary can fail to be struck by the great contrast between our
practices and theirs--a contrast not in any sense to our credit.

The Congress should without further delay pass a model employers'
liability law for the District of Columbia. The employers' liability act
recently declared unconstitutional, on account of apparently including
in its provisions employees engaged in intrastate commerce as well as
those engaged in interstate commerce, has been held by the local courts
to be still in effect so far as its provisions apply to District of
Columbia. There should be no ambiguity on this point. If there is any
doubt on the subject, the law should be reenacted with special reference
to the District of Columbia. This act, however, applies only to
employees of common carriers. In all other occupations the liability law
of the District is the old common law. The severity and injustice of the
common law in this matter has been in some degree or another modified in
the majority of our States, and the only jurisdiction under the
exclusive control of the Congress should be ahead and not behind the
States of the Union in this respect. A comprehensive employers'
liability law should be passed for the District of Columbia.

I renew my recommendation made in a previous message that half-holidays
be granted during summer to all wageworkers in Government employ.

I also renew my recommendation that the principle of the eight-hour day
should as rapidly and as far as practicable be extended to the entire
work being carried on by the Government; the present law should be
amended to embrace contracts on those public works which the present
wording of the act seems to exclude.

THE COURTS.

I most earnestly urge upon the Congress the duty of increasing the
totally inadequate salaries now given to our Judges. On the whole there
is no body of public servants who do as valuable work, nor whose moneyed
reward is so inadequate compared to their work. Beginning with the
Supreme Court, the Judges should have their salaries doubled. It is not
befitting the dignity of the Nation that its most honored public
servants should be paid sums so small compared to what they would earn
in private life that the performance of public service by them implies
an exceedingly heavy pecuniary sacrifice.

It is earnestly to be desired that some method should be devised for
doing away with the long delays which now obtain in the administration
of justice, and which operate with peculiar severity against persons of
small means, and favor only the very criminals whom it is most desirable
to punish. These long delays in the final decisions of cases make in the
aggregate a crying evil; and a remedy should be devised. Much of this
intolerable delay is due to improper regard paid to technicalities which
are a mere hindrance to justice. In some noted recent cases this
over-regard for technicalities has resulted in a striking denial of
justice, and flagrant wrong to the body politic.

At the last election certain leaders of organized labor made a violent
and sweeping attack upon the entire judiciary of the country, an attack
couched in such terms as to include the most upright, honest and
broad-minded judges, no less than those of narrower mind and more
restricted outlook. It was the kind of attack admirably fitted to
prevent any successful attempt to reform abuses of the judiciary,
because it gave the champions of the unjust judge their eagerly desired
opportunity to shift their ground into a championship of just judges who
were unjustly assailed. Last year, before the House Committee on the
Judiciary, these same labor leaders formulated their demands, specifying
the bill that contained them, refusing all compromise, stating they
wished the principle of that bill or nothing. They insisted on a
provision that in a labor dispute no injunction should issue except to
protect a property right, and specifically provided that the right to
carry on business should not be construed as a property right; and in a
second provision their bill made legal in a labor dispute any act or
agreement by or between two or more persons that would not have been
unlawful if done by a single person. In other words, this bill legalized
blacklisting and boycotting in every form, legalizing, for instance,
those forms of the secondary boycott which the anthracite coal strike
commission so unreservedly condemned; while the right to carry on a
business was explicitly taken out from under that protection which the
law throws over property. The demand was made that there should be trial
by jury in contempt cases, thereby most seriously impairing the
authority of the courts. All this represented a course of policy which,
if carried out, would mean the enthronement of class privilege in its
crudest and most brutal form, and the destruction of one of the most
essential functions of the judiciary in all civilized lands.

The violence of the crusade for this legislation, and its complete
failure, illustrate two truths which it is essential our people should
learn. In the first place, they ought to teach the workingman, the
laborer, the wageworker, that by demanding what is improper and
impossible he plays into the hands of his foes. Such a crude and vicious
attack upon the courts, even if it were temporarily successful, would
inevitably in the end cause a violent reaction and would band the great
mass of citizens together, forcing them to stand by all the judges,
competent and incompetent alike, rather than to see the wheels of
justice stopped. A movement of this kind can ultimately result in
nothing but damage to those in whose behalf it is nominally undertaken.
This is a most healthy truth, which it is wise for all our people to
learn. Any movement based on that class hatred which at times assumes
the name of "class consciousness" is certain ultimately to fail, and if
it temporarily succeeds, to do far-reaching damage. "Class
consciousness," where it is merely another name for the odious vice of
class selfishness, is equally noxious whether in an employer's
association or in a workingman's association. The movement in question
was one in which the appeal was made to all workingmen to vote
primarily, not as American citizens, but as individuals of a certain
class in society. Such an appeal in the first place revolts the more
high-minded and far-sighted among the persons to whom it is addressed,
and in the second place tends to arouse a strong antagonism among all
other classes of citizens, whom it therefore tends to unite against the
very organization on whose behalf it is issued. The result is therefore
unfortunate from every standpoint. This healthy truth, by the way, will
be learned by the socialists if they ever succeed in establishing in
this country an important national party based on such class
consciousness and selfish class interest.

The wageworkers, the workingmen, the laboring men of the country, by the
way in which they repudiated the effort to get them to cast their votes
in response to an appeal to class hatred, have emphasized their sound
patriotism and Americanism. The whole country has cause to fell pride in
this attitude of sturdy independence, in this uncompromising insistence
upon acting simply as good citizens, as good Americans, without regard
to fancied--and improper--class interests. Such an attitude is an
object-lesson in good citizenship to the entire nation.

But the extreme reactionaries, the persons who blind themselves to the
wrongs now and then committed by the courts on laboring men, should also
think seriously as to what such a movement as this portends. The judges
who have shown themselves able and willing effectively to check the
dishonest activity of the very rich man who works iniquity by the
mismanagement of corporations, who have shown themselves alert to do
justice to the wageworker, and sympathetic with the needs of the mass of
our people, so that the dweller in the tenement houses, the man who
practices a dangerous trade, the man who is crushed by excessive hours
of labor, feel that their needs are understood by the courts--these
judges are the real bulwark of the courts; these judges, the judges of
the stamp of the president-elect, who have been fearless in opposing
labor when it has gone wrong, but fearless also in holding to strict
account corporations that work iniquity, and far-sighted in seeing that
the workingman gets his rights, are the men of all others to whom we owe
it that the appeal for such violent and mistaken legislation has fallen
on deaf ears, that the agitation for its passage proved to be without
substantial basis. The courts are jeopardized primarily by the action of
those Federal and State judges who show inability or unwillingness to
put a stop to the wrongdoing of very rich men under modern industrial
conditions, and inability or unwillingness to give relief to men of
small means or wageworkers who are crushed down by these modern
industrial conditions; who, in other words, fail to understand and apply
the needed remedies for the new wrongs produced by the new and highly
complex social and industrial civilization which has grown up in the
last half century.

The rapid changes in our social and industrial life which have attended
this rapid growth have made it necessary that, in applying to concrete
cases the great rule of right laid down in our Constitution, there
should be a full understanding and appreciation of the new conditions to
which the rules are to be applied. What would have been an infringement
upon liberty half a century ago may be the necessary safeguard of
liberty to-day. What would have been an injury to property then may be
necessary to the enjoyment of property now. Every judicial decision
involves two terms--one, as interpretation of the law; the other, the
understanding of the facts to which it is to be applied. The great mass
of our judicial officers are, I believe, alive to those changes of
conditions which so materially affect the performance of their judicial
duties. Our judicial system is sound and effective at core, and it
remains, and must ever be maintained, as the safeguard of those
principles of liberty and justice which stand at the foundation of
American institutions; for, as Burke finely said, when liberty and
justice are separated, neither is safe. There are, however, some members
of the judicial body who have lagged behind in their understanding of
these great and vital changes in the body politic, whose minds have
never been opened to the new applications of the old principles made
necessary by the new conditions. Judges of this stamp do lasting harm by
their decisions, because they convince poor men in need of protection
that the courts of the land are profoundly ignorant of and out of
sympathy with their needs, and profoundly indifferent or hostile to any
proposed remedy. To such men it seems a cruel mockery to have any court
decide against them on the ground that it desires to preserve "liberty"
in a purely technical form, by withholding liberty in any real and
constructive sense. It is desirable that the legislative body should
possess, and wherever necessary exercise, the power to determine whether
in a given case employers and employees are not on an equal footing, so
that the necessities of the latter compel them to submit to such
exactions as to hours and conditions of labor as unduly to tax their
strength; and only mischief can result when such determination is upset
on the ground that there must be no "interference with the liberty to
contract"--often a merely academic "liberty," the exercise of which is
the negation of real liberty.

There are certain decisions by various courts which have been
exceedingly detrimental to the rights of wageworkers. This is true of
all the decisions that decide that men and women are, by the
Constitution, "guaranteed their liberty" to contract to enter a
dangerous occupation, or to work an undesirable or improper number of
hours, or to work in unhealthy surroundings; and therefore can not
recover damages when maimed in that occupation and can not be forbidden
to work what the legislature decides is an excessive number of hours, or
to carry on the work under conditions which the legislature decides to
be unhealthy. The most dangerous occupations are often the poorest paid
and those where the hours of work are longest; and in many cases those
who go into them are driven by necessity so great that they have
practically no alternative. Decisions such as those alluded to above
nullify the legislative effort to protect the wage-workers who most need
protection from those employers who take advantage of their grinding
need. They halt or hamper the movement for securing better and more
equitable conditions of labor. The talk about preserving to the
misery-hunted beings who make contracts for such service their "liberty"
to make them, is either to speak in a spirit of heartless irony or else
to show an utter lack of knowledge of the conditions of life among the
great masses of our fellow-countrymen, a lack which unfits a judge to do
good service just as it would unfit any executive or legislative
officer.

There is also, I think, ground for the belief that substantial injustice
is often suffered by employees in consequence of the custom of courts
issuing temporary injunctions without notice to them, and punishing them
for contempt of court in instances where, as a matter of fact, they have
no knowledge of any proceedings. Outside of organized labor there is a
widespread feeling that this system often works great injustice to
wageworkers when their efforts to better their working condition result
in industrial disputes. A temporary injunction procured ex parte may as
a matter of fact have all the effect of a permanent injunction in
causing disaster to the wageworkers' side in such a dispute. Organized
labor is chafing under the unjust restraint which comes from repeated
resort to this plan of procedure. Its discontent has been unwisely
expressed, and often improperly expressed, but there is a sound basis
for it, and the orderly and law-abiding people of a community would be
in a far stronger position for upholding the courts if the undoubtedly
existing abuses could be provided against.

Such proposals as those mentioned above as advocated by the extreme
labor leaders contain the vital error of being class legislation of the
most offensive kind, and even if enacted into law I believe that the law
would rightly be held unconstitutional. Moreover, the labor people are
themselves now beginning to invoke the use of the power of injunction.
During the last ten years, and within my own knowledge, at least fifty
injunctions have been obtained by labor unions in New York City alone,
most of them being to protect the union label (a "property right"), but
some being obtained for other reasons against employers. The power of
injunction is a great equitable remedy, which should on no account be
destroyed. But safeguards should be erected against its abuse. I believe
that some such provisions as those I advocated a year ago for checking
the abuse of the issuance of temporary injunctions should be adopted. In
substance, provision should be made that no injunction or temporary
restraining order issue otherwise than on notice, except where
irreparable injury would otherwise result; and in such case a hearing on
the merits of the order should be had within a short fixed period, and,
if not then continued after hearing, it should forthwith lapse.
Decisions should be rendered immediately, and the chance of delay
minimized in every way. Moreover, I believe that the procedure should be
sharply defined, and the judge required minutely to state the
particulars both of his action and of his reasons therefor, so that the
Congress can, if it desires, examine and investigate the same.

The chief lawmakers in our country may be, and often are, the judges,
because they are the final seat of authority. Every time they interpret
contract, property, vested rights, due process of law, liberty, they
necessarily enact into law parts of a system of social philosophy, and
as such interpretation is fundamental, they give direction to all
law-making. The decisions of the courts on economic and social questions
depend upon their economic and social philosophy; and for the peaceful
progress of our people during the twentieth century we shall owe most to
those judges who hold to a twentieth century economic and social
philosophy and not to a long outgrown philosophy, which was itself the
product of primitive economic conditions. Of course a judge's views on
progressive social philosophy are entirely second in importance to his
possession of a high and fine character; which means the possession of
such elementary virtues as honesty, courage, and fair-mindedness. The
judge who owes his election to pandering to demagogic sentiments or
class hatreds and prejudices, and the judge who owes either his election
or his appointment to the money or the favor of a great corporation, are
alike unworthy to sit on the bench, are alike traitors to the people;
and no profundity of legal learning, or correctness of abstract
conviction on questions of public policy, can serve as an offset to such
shortcomings. But it is also true that judges, like executives and
legislators, should hold sound views on the questions of public policy
which are of vital interest to the people.

The legislators and executives are chosen to represent the people in
enacting and administering the laws. The judges are not chosen to
represent the people in this sense. Their function is to interpret the
laws. The legislators are responsible for the laws; the judges for the
spirit in which they interpret and enforce the laws. We stand aloof from
the reckless agitators who would make the judges mere pliant tools of
popular prejudice and passion; and we stand aloof from those equally
unwise partisans of reaction and privilege who deny the proposition
that, inasmuch as judges are chosen to serve the interests of the whole
people, they should strive to find out what those interests are, and, so
far as they conscientiously can, should strive to give effect to popular
conviction when deliberately and duly expressed by the lawmaking body.
The courts are to be highly commended and staunchly upheld when they set
their faces against wrongdoing or tyranny by a majority; but they are to
be blamed when they fail to recognize under a government like ours the
deliberate judgment of the majority as to a matter of legitimate policy,
when duly expressed by the legislature. Such lawfully expressed and
deliberate judgment should be given effect by the courts, save in the
extreme and exceptional cases where there has been a clear violation of
a constitutional provision. Anything like frivolity or wantonness in
upsetting such clearly taken governmental action is a grave offense
against the Republic. To protest against tyranny, to protect minorities
from oppression, to nullify an act committed in a spasm of popular fury,
is to render a service to the Republic. But for the courts to arrogate
to themselves functions which properly belong to the legislative bodies
is all wrong, and in the end works mischief. The people should not be
permitted to pardon evil and slipshod legislation on the theory that the
court will set it right; they should be taught that the right way to get
rid of a bad law is to have the legislature repeal it, and not to have
the courts by ingenious hair-splitting nullify it. A law may be unwise
and improper; but it should not for these reasons be declared
unconstitutional by a strained interpretation, for the result of such
action is to take away from the people at large their sense of
responsibility and ultimately to destroy their capacity for orderly self
restraint and self government. Under such a popular government as ours,
rounded on the theory that in the long run the will of the people is
supreme, the ultimate safety of the Nation can only rest in training and
guiding the people so that what they will shall be right, and not in
devising means to defeat their will by the technicalities of strained
construction.

For many of the shortcomings of justice in our country our people as a
whole are themselves to blame, and the judges and juries merely bear
their share together with the public as a whole. It is discreditable to
us as a people that there should be difficulty in convicting murderers,
or in bringing to justice men who as public servants have been guilty of
corruption, or who have profited by the corruption of public servants.
The result is equally unfortunate, whether due to hairsplitting
technicalities in the interpretation of law by judges, to sentimentality
and class consciousness on the part of juries, or to hysteria and
sensationalism in the daily press. For much of this failure of justice
no responsibility whatever lies on rich men as such. We who make up the
mass of the people can not shift the responsibility from our own
shoulders. But there is an important part of the failure which has
specially to do with inability to hold to proper account men of wealth
who behave badly.

The chief breakdown is in dealing with the new relations that arise from
the mutualism, the interdependence of our time. Every new social
relation begets a new type of wrongdoing--of sin, to use an
old-fashioned word--and many years always elapse before society is able
to turn this sin into crime which can be effectively punished at law.
During the lifetime of the older men now alive the social relations have
changed far more rapidly than in the preceding two centuries. The
immense growth of corporations, of business done by associations, and
the extreme strain and pressure of modern life, have produced conditions
which render the public confused as to who its really dangerous foes
are; and among the public servants who have not only shared this
confusion, but by some of their acts have increased it, are certain
judges. Marked inefficiency has been shown in dealing with corporations
and in re-settling the proper attitude to be taken by the public not
only towards corporations, but towards labor and towards the social
questions arising out of the factory system and the enormous growth of
our great cities.

The huge wealth that has been accumulated by a few individuals of recent
years, in what has amounted to a social and industrial revolution, has
been as regards some of these individuals made possible only by the
improper use of the modern corporation. A certain type of modern
corporation, with its officers and agents, its many issues of
securities, and its constant consolidation with allied undertakings,
finally becomes an instrument so complex as to contain a greater number
of elements that, under various judicial decisions, lend themselves to
fraud and oppression than any device yet evolved in the human brain.
Corporations are necessary instruments of modern business. They have
been permitted to become a menace largely because the governmental
representatives of the people have worked slowly in providing for
adequate control over them.

The chief offender in any given case may be an executive, a legislature,
or a judge. Every executive head who advises violent, instead of
gradual, action, or who advocates ill-considered and sweeping measures
of reform (especially if they are tainted with vindictiveness and
disregard for the rights of the minority) is particularly blameworthy.
The several legislatures are responsible for the fact that our laws are
often prepared with slovenly haste and lack of consideration. Moreover,
they are often prepared, and still more frequently amended during
passage, at the suggestion of the very parties against whom they are
afterwards enforced. Our great clusters of corporations, huge trusts and
fabulously wealthy multi-millionaires, employ the very best lawyers they
can obtain to pick flaws in these statutes after their passage; but they
also employ a class of secret agents who seek, under the advice of
experts, to render hostile legislation innocuous by making it
unconstitutional, often through the insertion of what appear on their
face to be drastic and sweeping provisions against the interests of the
parties inspiring them; while the demagogues, the corrupt creatures who
introduce blackmailing schemes to "strike" corporations, and all who
demand extreme, and undesirably radical, measures, show themselves to be
the worst enemies of the very public whose loud-mouthed champions they
profess to be. A very striking illustration of the consequences of
carelessness in the preparation of a statute was the employers'
liability law of 1906. In the cases arising under that law, four out of
six courts of first instance held it unconstitutional; six out of nine
justices of the Supreme Court held that its subject-matter was within
the province of congressional action; and four of the nine justices held
it valid. It was, however, adjudged unconstitutional by a bare majority
of the court--five to four. It was surely a very slovenly piece of work
to frame the legislation in such shape as to leave the question open at
all.

Real damage has been done by the manifold and conflicting
interpretations of the interstate commerce law. Control over the great
corporations doing interstate business can be effective only if it is
vested with full power in an administrative department, a branch of the
Federal executive, carrying out a Federal law; it can never be effective
if a divided responsibility is left in both the States and the Nation;
it can never be effective if left in the hands of the courts to be
decided by lawsuits.

The courts hold a place of peculiar and deserved sanctity under our form
of government. Respect for the law is essential to the permanence of our
institutions; and respect for the law is largely conditioned upon
respect for the courts. It is an offense against the Republic to say
anything which can weaken this respect, save for the gravest reason and
in the most carefully guarded manner. Our judges should be held in
peculiar honor; and the duty of respectful and truthful comment and
criticism, which should be binding when we speak of anybody, should be
especially binding when we speak of them. On an average they stand above
any other servants of the community, and the greatest judges have
reached the high level held by those few greatest patriots whom the
whole country delights to honor. But we must face the fact that there
are wise and unwise judges, just as there are wise and unwise executives
and legislators. When a president or a governor behaves improperly or
unwisely, the remedy is easy, for his term is short; the same is true
with the legislator, although not to the same degree, for he is one of
many who belong to some given legislative body, and it is therefore less
easy to fix his personal responsibility and hold him accountable
therefor. With a judge, who, being human, is also likely to err, but
whose tenure is for life, there is no similar way of holding him to
responsibility. Under ordinary conditions the only forms of pressure to
which he is in any way amenable are public opinion and the action of his
fellow judges. It is the last which is most immediately effective, and
to which we should look for the reform of abuses. Any remedy applied
from without is fraught with risk. It is far better, from every
standpoint, that the remedy should come from within. In no other nation
in the world do the courts wield such vast and far-reaching power as in
the United States. All that is necessary is that the courts as a whole
should exercise this power with the farsighted wisdom already shown by
those judges who scan the future while they act in the present. Let them
exercise this great power not only honestly and bravely, but with wise
insight into the needs and fixed purposes of the people, so that they
may do justice and work equity, so that they may protect all persons in
their rights, and yet break down the barriers of privilege, which is the
foe of right.

FORESTS.

If there is any one duty which more than another we owe it to our
children and our children's children to perform at once, it is to save
the forests of this country, for they constitute the first and most
important element in the conservation of the natural resources of the
country. There are of course two kinds of natural resources, One is the
kind which can only be used as part of a process of exhaustion; this is
true of mines, natural oil and gas wells, and the like. The other, and
of course ultimately by far the most important, includes the resources
which can be improved in the process of wise use; the soil, the rivers,
and the forests come under this head. Any really civilized nation will
so use all of these three great national assets that the nation will
have their benefit in the future. Just as a farmer, after all his life
making his living from his farm, will, if he is an expert farmer, leave
it as an asset of increased value to his son, so we should leave our
national domain to our children, increased in value and not worn out.
There are small sections of our own country, in the East and the West,
in the Adriondacks, the White Mountains, and the Appalachians, and in
the Rocky Mountains, where we can already see for ourselves the damage
in the shape of permanent injury to the soil and the river systems which
comes from reckless deforestation. It matters not whether this
deforestation is due to the actual reckless cutting of timber, to the
fires that inevitably follow such reckless cutting of timber, or to
reckless and uncontrolled grazing, especially by the great migratory
bands of sheep, the unchecked wandering of which over the country means
destruction to forests and disaster to the small home makers, the
settlers of limited means.

Shortsighted persons, or persons blinded to the future by desire to make
money in every way out of the present, sometimes speak as if no great
damage would be done by the reckless destruction of our forests. It is
difficult to have patience with the arguments of these persons. Thanks
to our own recklessness in the use of our splendid forests, we have
already crossed the verge of a timber famine in this country, and no
measures that we now take can, at least for many years, undo the
mischief that has already been done. But we can prevent further mischief
being done; and it would be in the highest degree reprehensible to let
any consideration of temporary convenience or temporary cost interfere
with such action, especially as regards the National Forests which the
nation can now, at this very moment, control.

All serious students of the question are aware of the great damage that
has been done in the Mediterranean countries of Europe, Asia, and Africa
by deforestation. The similar damage that has been done in Eastern Asia
is less well known. A recent investigation into conditions in North
China by Mr. Frank N. Meyer, of the Bureau of Plant Industry of the
United States Department of Agriculture, has incidentally furnished in
very striking fashion proof of the ruin that comes from reckless
deforestation of mountains, and of the further fact that the damage once
done may prove practically irreparable. So important are these
investigations that I herewith attach as an appendix to my message
certain photographs showing present conditions in China. They show in
vivid fashion the appalling desolation, taking the shape of barren
mountains and gravel and sand-covered plains, which immediately follows
and depends upon the deforestation of the mountains. Not many centuries
ago the country of northern China was one of the most fertile and
beautiful spots in the entire world, and was heavily forested. We know
this not only from the old Chinese records, but from the accounts given
by the traveler, Marco Polo. He, for instance, mentions that in visiting
the provinces of Shansi and Shensi he observed many plantations of
mulberry trees. Now there is hardly a single mulberry tree in either of
these provinces, and the culture of the silkworm has moved farther
south, to regions of atmospheric moisture. As an illustration of the
complete change in the rivers, we may take Polo's statement that a
certain river, the Hun Ho, was so large and deep that merchants ascended
it from the sea with heavily laden boats; today this river is simply a
broad sandy bed, with shallow, rapid currents wandering hither and
thither across it, absolutely unnavigable. But we do not have to depend
upon written records. The dry wells, and the wells with water far below
the former watermark, bear testimony to the good days of the past and
the evil days of the present. Wherever the native vegetation has been
allowed to remain, as, for instance, here and there around a sacred
temple or imperial burying ground, there are still huge trees and
tangled jungle, fragments of the glorious ancient forests. The thick,
matted forest growth formerly covered the mountains to their summits.
All natural factors favored this dense forest growth, and as long as it
was permitted to exist the plains at the foot of the mountains were
among the most fertile on the globe, and the whole country was a garden.
Not the slightest effort was made, however, to prevent the unchecked
cutting of the trees, or to secure reforestation. Doubtless for many
centuries the tree-cutting by the inhabitants of the mountains worked
but slowly in bringing about the changes that have now come to pass;
doubtless for generations the inroads were scarcely noticeable. But
there came a time when the forest had shrunk sufficiently to make each
year's cutting a serious matter, and from that time on the destruction
proceeded with appalling rapidity; for of course each year of
destruction rendered the forest less able to recuperate, less able to
resist next year's inroad. Mr. Meyer describes the ceaseless progress of
the destruction even now, when there is so little left to destroy. Every
morning men and boys go out armed with mattox or axe, scale the steepest
mountain sides, and cut down and grub out, root and branch, the small
trees and shrubs still to be found. The big trees disappeared centuries
ago, so that now one of these is never seen save in the neighborhood of
temples, where they are artificially protected; and even here it takes
all the watch and care of the tree-loving priests to prevent their
destruction. Each family, each community, where there is no common care
exercised in the interest of all of them to prevent deforestation, finds
its profit in the immediate use of the fuel which would otherwise be
used by some other family or some other community. In the total absence
of regulation of the matter in the interest of the whole people, each
small group is inevitably pushed into a policy of destruction which can
not afford to take thought for the morrow. This is just one of those
matters which it is fatal to leave to unsupervised individual control.
The forest can only be protected by the State, by the Nation; and the
liberty of action of individuals must be conditioned upon what the State
or Nation determines to be necessary for the common safety.

The lesson of deforestation in China is a lesson which mankind should
have learned many times already from what has occurred in other places.
Denudation leaves naked soil; then gullying cuts down to the bare rock;
and meanwhile the rock-waste buries the bottomlands. When the soil is
gone, men must go; and the process does not take long.

This ruthless destruction of the forests in northern China has brought
about, or has aided in bringing about, desolation, just as the
destruction of the forests in central Asia aid in bringing ruin to the
once rich central Asian cities; just as the destruction of the forest in
northern Africa helped towards the ruin of a region that was a fertile
granary in Roman days. Shortsighted man, whether barbaric,
semi-civilized, or what he mistakenly regards as fully civilized, when
he has destroyed the forests, has rendered certain the ultimate
destruction of the land itself. In northern China the mountains are now
such as are shown by the accompanying photographs, absolutely barren
peaks. Not only have the forests been destroyed, but because of their
destruction the soil has been washed off the naked rock. The terrible
consequence is that it is impossible now to undo the damage that has
been done. Many centuries would have to pass before soil would again
collect, or could be made to collect, in sufficient quantity once more
to support the old-time forest growth. In consequence the Mongol Desert
is practically extending eastward over northern China. The climate has
changed and is still changing. It has changed even within the last half
century, as the work of tree destruction has been consummated. The great
masses of arboreal vegetation on the mountains formerly absorbed the
heat of the sun and sent up currents of cool air which brought the
moisture-laden clouds lower and forced them to precipitate in rain a
part of their burden of water. Now that there is no vegetation, the
barren mountains, scorched by the sun, send up currents of heated air
which drive away instead of attracting the rain clouds, and cause their
moisture to be disseminated. In consequence, instead of the regular and
plentiful rains which existed in these regions of China when the forests
were still in evidence, the unfortunate inhabitants of the deforested
lands now see their crops wither for lack of rainfall, while the seasons
grow more and more irregular; and as the air becomes dryer certain crops
refuse longer to grow at all. That everything dries out faster than
formerly is shown by the fact that the level of the wells all over the
land has sunk perceptibly, many of them having become totally dry. In
addition to the resulting agricultural distress, the watercourses have
changed. Formerly they were narrow and deep, with an abundance of clear
water the year around; for the roots and humus of the forests caught the
rainwater and let it escape by slow, regular seepage. They have now
become broad, shallow stream beds, in which muddy water trickles in
slender currents during the dry seasons, while when it rains there are
freshets, and roaring muddy torrents come tearing down, bringing
disaster and destruction everywhere. Moreover, these floods and
freshets, which diversify the general dryness, wash away from the
mountain sides, and either wash away or cover in the valleys, the rich
fertile soil which it took tens of thousands of years for Nature to
form; and it is lost forever, and until the forests grow again it can
not be replaced. The sand and stones from the mountain sides are washed
loose and come rolling down to cover the arable lands, and in
consequence, throughout this part of China, many formerly rich districts
are now sandy wastes, useless for human cultivation and even for
pasture. The cities have been of course seriously affected, for the
streams have gradually ceased to be navigable. There is testimony that
even within the memory of men now living there has been a serious
diminution of the rainfall of northeastern China. The level of the
Sungari River in northern Manchuria has been sensibly lowered during the
last fifty years, at least partly as the result of the indiscriminate
rutting of the forests forming its watershed. Almost all the rivers of
northern China have become uncontrollable, and very dangerous to the
dwellers along their banks, as a direct result of the destruction of the
forests. The journey from Pekin to Jehol shows in melancholy fashion how
the soil has been washed away from whole valleys, so that they have been
converted into deserts.

In northern China this disastrous process has gone on so long and has
proceeded so far that no complete remedy could be applied. There are
certain mountains in China from which the soil is gone so utterly that
only the slow action of the ages could again restore it; although of
course much could be done to prevent the still further eastward
extension of the Mongolian Desert if the Chinese Government would act at
once. The accompanying cuts from photographs show the inconceivable
desolation of the barren mountains in which certain of these rivers
rise--mountains, be it remembered, which formerly supported dense
forests of larches and firs, now unable to produce any wood, and because
of their condition a source of danger to the whole country. The
photographs also show the same rivers after they have passed through the
mountains, the beds having become broad and sandy because of the
deforestation of the mountains. One of the photographs shows a caravan
passing through a valley. Formerly, when the mountains were forested, it
was thickly peopled by prosperous peasants. Now the floods have carried
destruction all over the land and the valley is a stony desert. Another
photograph shows a mountain road covered with the stones and rocks that
are brought down in the rainy season from the mountains which have
already been deforested by human hands. Another shows a pebbly river-bed
in southern Manchuria where what was once a great stream has dried up
owing to the deforestation in the mountains. Only some scrub wood is
left, which will disappear within a half century. Yet another shows the
effect of one of the washouts, destroying an arable mountain side, these
washouts being due to the removal of all vegetation; yet in this
photograph the foreground shows that reforestation is still a
possibility in places.

What has thus happened in northern China, what has happened in Central
Asia, in Palestine, in North Africa, in parts of the Mediterranean
countries of Europe, will surely happen in our country if we do not
exercise that wise forethought which should be one of the chief marks of
any people calling itself civilized. Nothing should be permitted to
stand in the way of the preservation of the forests, and it is criminal
to permit individuals to purchase a little gain for themselves through
the destruction of forests when this destruction is fatal to the
well-being of the whole country in the future.

INLAND WATERWAYS.

Action should be begun forthwith, during the present session of the
Congress, for the improvement of our inland waterways--action which will
result in giving us not only navigable but navigated rivers. We have
spent hundreds of millions of dollars upon these waterways, yet the
traffic on nearly all of them is steadily declining. This condition is
the direct result of the absence of any comprehensive and far-seeing
plan of waterway improvement, Obviously we can not continue thus to
expend the revenues of the Government without return. It is poor
business to spend money for inland navigation unless we get it.

Inquiry into the condition of the Mississippi and its principal
tributaries reveals very many instances of the utter waste caused by the
methods which have hitherto obtained for the so-called "improvement" of
navigation. A striking instance is supplied by the "improvement" of the
Ohio, which, begun in 1824, was continued under a single plan for half a
century. In 1875 a new plan was adopted and followed for a quarter of a
century. In 1902 still a different plan was adopted and has since been
pursued at a rate which only promises a navigable river in from twenty
to one hundred years longer.

Such shortsighted, vacillating, and futile methods are accompanied by
decreasing water-borne commerce and increasing traffic congestion on
land, by increasing floods, and by the waste of public money. The remedy
lies in abandoning the methods which have so signally failed and
adopting new ones in keeping with the needs and demands of our people.

In a report on a measure introduced at the first session of the present
Congress, the Secretary of War said: "The chief defect in the methods
hitherto pursued lies in the absence of executive authority for
originating comprehensive plans covering the country or natural
divisions thereof." In this opinion I heartily concur. The present
methods not only fail to give us inland navigation, but they are
injurious to the army as well. What is virtually a permanent detail of
the corps of engineers to civilian duty necessarily impairs the
efficiency of our military establishment. The military engineers have
undoubtedly done efficient work in actual construction, but they are
necessarily unsuited by their training and traditions to take the broad
view, and to gather and transmit to the Congress the commercial and
industrial information and forecasts, upon which waterway improvement
must always so largely rest. Furthermore, they have failed to grasp the
great underlying fact that every stream is a unit from its source to its
mouth, and that all its uses are interdependent. Prominent officers of
the Engineer Corps have recently even gone so far as to assert in print
that waterways are not dependent upon the conservation of the forests
about their headwaters. This position is opposed to all the recent work
of the scientific bureaus of the Government and to the general
experience of mankind. A physician who disbelieved in vaccination would
not be the right man to handle an epidemic of smallpox, nor should we
leave a doctor skeptical about the transmission of yellow fever by the
Stegomyia mosquito in charge of sanitation at Havana or Panama. So with
the improvement of our rivers; it is no longer wise or safe to leave
this great work in the hands of men who fail to grasp the essential
relations between navigation and general development and to assimilate
and use the central facts about our streams.

Until the work of river improvement is undertaken in a modern way it can
not have results that will meet the needs of this modern nation. These
needs should be met without further dilly-dallying or delay. The plan
which promises the best and quickest results is that of a permanent
commission authorized to coordinate the work of all the Government
departments relating to waterways, and to frame and supervise the
execution of a comprehensive plan. Under such a commission the actual
work of construction might be entrusted to the reclamation service; or
to the military engineers acting with a sufficient number of civilians
to continue the work in time of war; or it might be divided between the
reclamation service and the corps of engineers. Funds should be provided
from current revenues if it is deemed wise--otherwise from the sale of
bonds. The essential thing is that the work should go forward under the
best possible plan, and with the least possible delay. We should have a
new type of work and a new organization for planning and directing it.
The time for playing with our waterways is past. The country demands
results.

NATIONAL PARKS.

I urge that all our National parks adjacent to National forests be
placed completely under the control of the forest service of the
Agricultural Department, instead of leaving them as they now are, under
the Interior Department and policed by the army. The Congress should
provide for superintendents with adequate corps of first-class civilian
scouts, or rangers, and, further, place the road construction under the
superintendent instead of leaving it with the War Department. Such a
change in park management would result in economy and avoid the
difficulties of administration which now arise from having the
responsibility of care and protection divided between different
departments. The need for this course is peculiarly great in the
Yellowstone Park. This, like the Yosemite, is a great wonderland, and
should be kept as a national playground. In both, all wild things should
be protected and the scenery kept wholly unmarred.

I am happy to say that I have been able to set aside in various parts of
the country small, well-chosen tracts of ground to serve as sanctuaries
and nurseries for wild creatures.

DENATURED ALCOHOL.

I had occasion in my message of May 4, 1906, to urge the passage of some
law putting alcohol, used in the arts, industries, and manufactures,
upon the free list--that is, to provide for the withdrawal free of tax
of alcohol which is to be denatured for those purposes. The law of June
7, 1906, and its amendment of March 2, 1907, accomplished what was
desired in that respect, and the use of denatured alcohol, as intended,
is making a fair degree of progress and is entitled to further
encouragement and support from the Congress.

PURE FOOD.

The pure food legislation has already worked a benefit difficult to
overestimate.

INDIAN SERVICE.

It has been my purpose from the beginning of my administration to take
the Indian Service completely out of the atmosphere of political
activity, and there has been steady progress toward that end. The last
remaining stronghold of politics in that service was the agency system,
which had seen its best days and was gradually falling to pieces from
natural or purely evolutionary causes, but, like all such survivals, was
decaying slowly in its later stages. It seems clear that its extinction
had better be made final now, so that the ground can be cleared for
larger constructive work on behalf of the Indians, preparatory to their
induction into the full measure of responsible citizenship. On November
1 only eighteen agencies were left on the roster; with two exceptions,
where some legal questions seemed to stand temporarily in the way, these
have been changed to superintendencies, and their heads brought into the
classified civil service.

SECRET SERVICE.

Last year an amendment was incorporated in the measure providing for the
Secret Service, which provided that there should be no detail from the
Secret Service and no transfer therefrom. It is not too much to say that
this amendment has been of benefit only, and could be of benefit only,
to the criminal classes. If deliberately introduced for the purpose of
diminishing the effectiveness of war against crime it could not have
been better devised to this end. It forbade the practices that had been
followed to a greater or less extent by the executive heads of various
departments for twenty years. To these practices we owe the securing of
the evidence which enabled us to drive great lotteries out of business
and secure a quarter of a million of dollars in fines from their
promoters. These practices have enabled us to get some of the evidence
indispensable in order in connection with the theft of government land
and government timber by great corporations and by individuals. These
practices have enabled us to get some of the evidence indispensable in
order to secure the conviction of the wealthiest and most formidable
criminals with whom the Government has to deal, both those operating in
violation of the anti-trust law and others. The amendment in question
was of benefit to no one excepting to these criminals, and it seriously
hampers the Government in the detection of crime and the securing of
justice. Moreover, it not only affects departments outside of the
Treasury, but it tends to hamper the Secretary of the Treasury himself
in the effort to utilize the employees of his department so as to best
meet the requirements of the public service. It forbids him from
preventing frauds upon the customs service, from investigating
irregularities in branch mints and assay offices, and has seriously
crippled him. It prevents the promotion of employees in the Secret
Service, and this further discourages good effort. In its present form
the restriction operates only to the advantage of the criminal, of the
wrongdoer. The chief argument in favor of the provision was that the
Congressmen did not themselves wish to be investigated by Secret Service
men. Very little of such investigation has been done in the past; but it
is true that the work of the Secret Service agents was partly
responsible for the indictment and conviction of a Senator and a
Congressman for land frauds in Oregon. I do not believe that it is in
the public interest to protect criminally in any branch of the public
service, and exactly as we have again and again during the past seven
years prosecuted and convicted such criminals who were in the executive
branch of the Government, so in my belief we should be given ample means
to prosecute them if found in the legislative branch. But if this is not
considered desirable a special exception could be made in the law
prohibiting the use of the Secret Service force in investigating members
of the Congress. It would be far better to do this than to do what
actually was done, and strive to prevent or at least to hamper effective
action against criminals by the executive branch of the Government.

POSTAL SAVINGS BANKS.

I again renew my recommendation for postal savings hanks, for depositing
savings with the security of the Government behind them. The object is
to encourage thrift and economy in the wage-earner and person of
moderate means. In 14 States the deposits in savings banks as reported
to the Comptroller of the Currency amount to $3,590,245,402, or 98.4 per
cent of the entire deposits, while in the remaining 32 States there are
only $70,308,543, or 1.6 per cent, showing conclusively that there are
many localities in the United States where sufficient opportunity is not
given to the people to deposit their savings. The result is that money
is kept in hiding and unemployed. It is believed that in the aggregate
vast sums of money would be brought into circulation through the
instrumentality of the postal savings banks. While there are only 1,453
savings banks reporting to the Comptroller there are more than 61,000
post-offices, 40,000 of which are money order offices. Postal savings
banks are now in operation in practically all of the great civilized
countries with the exception of the United States.

PARCEL POST.

In my last annual message I commended the Postmaster-General's
recommendation for an extension of the parcel post on the rural routes.
The establishment of a local parcel post on rural routes would be to the
mutual benefit of the farmer and the country storekeeper, and it is
desirable that the routes, serving more than 15,000,000 people, should
be utilized to the fullest practicable extent. An amendment was proposed
in the Senate at the last session, at the suggestion of the
Postmaster-General, providing that, for the purpose of ascertaining the
practicability of establishing a special local parcel post system on the
rural routes throughout the United States, the Postmaster-General be
authorized and directed to experiment and report to the Congress the
result of such experiment by establishing a special local parcel post
system on rural delivery routes in not to exceed four counties in the
United States for packages of fourth-class matter originating on a rural
route or at the distributing post office for delivery by rural carriers.
It would seem only proper that such an experiment should be tried in
order to demonstrate the practicability of the proposition, especially
as the Postmaster-General estimates that the revenue derived from the
operation of such a system on all the rural routes would amount to many
million dollars.

EDUCATION.

The share that the National Government should take in the broad work of
education has not received the attention and the care it rightly
deserves. The immediate responsibility for the support and improvement
of our educational systems and institutions rests and should always rest
with the people of the several States acting through their state and
local governments, but the Nation has an opportunity in educational work
which must not be lost and a duty which should no longer be neglected.

The National Bureau of Education was established more than forty years
ago. Its purpose is to collect and diffuse such information "as shall
aid the people of the United States in the establishment and maintenance
of efficient school systems and otherwise promote the cause of education
throughout the country." This purpose in no way conflicts with the
educational work of the States, but may be made of great advantage to
the States by giving them the fullest, most accurate, and hence the most
helpful information and suggestion regarding the best educational
systems. The Nation, through its broader field of activities, its wider
opportunity for obtaining information from all the States and from
foreign countries, is able to do that which not even the richest States
can do, and with the distinct additional advantage that the information
thus obtained is used for the immediate benefit of all our people.

With the limited means hitherto provided, the Bureau of Education has
rendered efficient service, but the Congress has neglected to adequately
supply the bureau with means to meet the educational growth of the
country. The appropriations for the general work of the bureau, outside
education in Alaska, for the year 1909 are but $87,500--an amount less
than they were ten years ago, and some of the important items in these
appropriations are less than they were thirty years ago. It is an
inexcusable waste of public money to appropriate an amount which is so
inadequate as to make it impossible properly to do the work authorized,
and it is unfair to the great educational interests of the country to
deprive them of the value of the results which can be obtained by proper
appropriations.

I earnestly recommend that this unfortunate state of affairs as regards
the national educational office be remedied by adequate appropriations.
This recommendation is urged by the representatives of our common
schools and great state universities and the leading educators, who all
unite in requesting favorable consideration and action by the Congress
upon this subject.

CENSUS.

I strongly urge that the request of the Director of the Census in
connection with the decennial work so soon to be begun be complied with
and that the appointments to the census force be placed under the civil
service law, waiving the geographical requirements as requested by the
Director of the Census. The supervisors and enumerators should not be
appointed under the civil service law, for the reasons given by the
Director. I commend to the Congress the careful consideration of the
admirable report of the Director of the Census, and I trust that his
recommendations will be adopted and immediate action thereon taken.

PUBLIC HEALTH.

It is highly advisable that there should be intelligent action on the
part of the Nation on the question of preserving the health of the
country. Through the practical extermination in San Francisco of
disease-bearing rodents our country has thus far escaped the bubonic
plague. This is but one of the many achievements of American health
officers; and it shows what can be accomplished with a better
organization than at present exists. The dangers to public health from
food adulteration and from many other sources, such as the menace to the
physical, mental and moral development of children from child labor,
should be met and overcome. There are numerous diseases, which are now
known to be preventable, which are, nevertheless, not prevented. The
recent International Congress on Tuberculosis has made us painfully
aware of the inadequacy of American public health legislation. This
Nation can not afford to lag behind in the world-wide battle now being
waged by all civilized people with the microscopic foes of mankind, nor
ought we longer to ignore the reproach that this Government takes more
pains to protect the lives of hogs and of cattle than of human beings.

REDISTRIBUTION OF BUREAUS.

The first legislative step to be taken is that for the concentration of
the proper bureaus into one of the existing departments. I therefore
urgently recommend the passage of a bill which shall authorize a
redistribution of the bureaus which shall best accomplish this end.

GOVERNMENT PRINTING OFFICE.

I recommend that legislation be enacted placing under the jurisdiction
of the Department of Commerce and Labor the Government Printing Office.
At present this office is under the combined control, supervision, and
administrative direction of the President and of the Joint Committee on
Printing of the two Houses of the Congress. The advantage of having the
4,069 employees in this office and the expenditure of the $5,761,377.57
appropriated therefor supervised by an executive department is obvious,
instead of the present combined supervision.

SOLDIERS' HOMES.

All Soldiers' Homes should be placed under the complete jurisdiction and
control of the War Department.

INDEPENDENT BUREAUS AND COMMISSIONS.

Economy and sound business policy require that all existing independent
bureaus and commissions should be placed under the jurisdiction of
appropriate executive departments. It is unwise from every standpoint,
and results only in mischief, to have any executive work done save by
the purely executive bodies, under the control of the President; and
each such executive body should be under the immediate supervision of a
Cabinet Minister.

STATEHOOD.

I advocate the immediate admission of New Mexico and Arizona as States.
This should be done at the present session of the Congress. The people
of the two Territories have made it evident by their votes that they
will not come in as one State. The only alternative is to admit them as
two, and I trust that this will be done without delay.

INTERSTATE FISHERIES.

I call the attention of the Congress to the importance of the problem of
the fisheries in the interstate waters. On the Great Lakes we are now,
under the very wise treaty of April 11th of this year, endeavoring to
come to an international agreement for the preservation and satisfactory
use of the fisheries of these waters which can not otherwise be
achieved. Lake Erie, for example, has the richest fresh water fisheries
in the world; but it is now controlled by the statutes of two Nations,
four States, and one Province, and in this Province by different
ordinances in different counties. All these political divisions work at
cross purposes, and in no case can they achieve protection to the
fisheries, on the one hand, and justice to the localities and
individuals on the other. The case is similar in Puget Sound.

But the problem is quite as pressing in the interstate waters of the
United States. The salmon fisheries of the Columbia River are now but a
fraction of what they were twenty-five years ago, and what they would be
now if the United States Government had taken complete charge of them by
intervening between Oregon and Washington. During these twenty-five
years the fishermen of each State have naturally tried to take all they
could get, and the two legislatures have never been able to agree on
joint action of any kind adequate in degree for the protection of the
fisheries. At the moment the fishing on the Oregon side is practically
closed, while there is no limit on the Washington side of any kind, and
no one can tell what the courts will decide as to the very statutes
under which this action and non-action result. Meanwhile very few salmon
reach the spawning grounds, and probably four years hence the fisheries
will amount to nothing; and this comes from a struggle between the
associated, or gill-net, fishermen on the one hand, and the owners of
the fishing wheels up the river. The fisheries of the Mississippi, the
Ohio, and the Potomac are also in a bad way. For this there is no remedy
except for the United States to control and legislate for the interstate
fisheries as part of the business of interstate commerce. In this case
the machinery for scientific investigation and for control already
exists in the United States Bureau of Fisheries. In this as in similar
problems the obvious and simple rule should be followed of having those
matters which no particular State can manage taken in hand by the United
States; problems which in the seesaw of conflicting State legislatures
are absolutely unsolvable are easy enough for Congress to control.

FISHERIES AND FUR SEALS.

The federal statute regulating interstate traffic in game should be
extended to include fish. New federal fish hatcheries should be
established. The administration of the Alaskan fur-seal service should
be vested in the Bureau of Fisheries.

FOREIGN AFFAIRS.

This Nation's foreign policy is based on the theory that right must be
done between nations precisely as between individuals, and in our
actions for the last ten years we have in this matter proven our faith
by our deeds. We have behaved, and are behaving, towards other nations
as in private life an honorable man would behave towards his fellows.

LATIN-AMERICAN REPUBLICS.

The commercial and material progress of the twenty Latin-American
Republics is worthy of the careful attention of the Congress. No other
section of the world has shown a greater proportionate development of
its foreign trade during the last ten years and none other has more
special claims on the interest of the United States. It offers to-day
probably larger opportunities for the legitimate expansion of our
commerce than any other group of countries. These countries will want
our products in greatly increased quantities, and we shall
correspondingly need theirs. The International Bureau of the American
Republics is doing a useful work in making these nations and their
resources better known to us, and in acquainting them not only with us
as a people and with our purposes towards them, but with what we have to
exchange for their goods. It is an international institution supported
by all the governments of the two Americas.

PANAMA CANAL.

The work on the Panama Canal is being done with a speed, efficiency and
entire devotion to duty which make it a model for all work of the kind.
No task of such magnitude has ever before been undertaken by any nation;
and no task of the kind has ever been better performed. The men on the
isthmus, from Colonel Goethals and his fellow commissioners through the
entire list of employees who are faithfully doing their duty, have won
their right to the ungrudging respect and gratitude of the American
people.

OCEAN MAIL LINERS.

I again recommend the extension of the ocean mail act of 1891 so that
satisfactory American ocean mail lines to South America, Asia, the
Philippines, and Australasia may be established. The creation of such
steamship lines should be the natural corollary of the voyage of the
battle fleet. It should precede the opening of the Panama Canal. Even
under favorable conditions several years must elapse before such lines
can be put into operation. Accordingly I urge that the Congress act
promptly where foresight already shows that action sooner or later will
be inevitable.

HAWAII.

I call particular attention to the Territory of Hawaii. The importance
of those islands is apparent, and the need of improving their condition
and developing their resources is urgent. In recent years industrial
conditions upon the islands have radically changed, The importation of
coolie labor has practically ceased, and there is now developing such a
diversity in agricultural products as to make possible a change in the
land conditions of the Territory, so that an opportunity may be given to
the small land owner similar to that on the mainland. To aid these
changes, the National Government must provide the necessary harbor
improvements on each island, so that the agricultural products can be
carried to the markets of the world. The coastwise shipping laws should
be amended to meet the special needs of the islands, and the alien
contract labor law should be so modified in its application to Hawaii as
to enable American and European labor to be brought thither.

We have begun to improve Pearl Harbor for a naval base and to provide
the necessary military fortifications for the protection of the islands,
but I can not too strongly emphasize the need of appropriations for
these purposes of such an amount as will within the shortest possible
time make those islands practically impregnable. It is useless to
develop the industrial conditions of the islands and establish there
bases of supply for our naval and merchant fleets unless we insure, as
far as human ingenuity can, their safety from foreign seizure.

One thing to be remembered with all our fortifications is that it is
almost useless to make them impregnable from the sea if they are left
open to land attack. This is true even of our own coast, but it is
doubly true of our insular possessions. In Hawaii, for instance, it is
worse than useless to establish a naval station unless we establish it
behind fortifications so strong that no landing force can take them save
by regular and long-continued siege operations.

THE PHILIPPINES.

Real progress toward self-government is being made in the Philippine
Islands. The gathering of a Philippine legislative body and Philippine
assembly marks a process absolutely new in Asia, not only as regards
Asiatic colonies of European powers but as regards Asiatic possessions
of other Asiatic powers; and, indeed, always excepting the striking and
wonderful example afforded by the great Empire of Japan, it opens an
entirely new departure when compared with anything which has happened
among Asiatic powers which are their own masters. Hitherto this
Philippine legislature has acted with moderation and self-restraint, and
has seemed in practical fashion to realize the eternal truth that there
must always be government, and that the only way in which any body of
individuals can escape the necessity of being governed by outsiders is
to show that they are able to restrain themselves, to keep down
wrongdoing and disorder. The Filipino people, through their officials,
are therefore making real steps in the direction of self-government. I
hope and believe that these steps mark the beginning of a course which
will continue till the Filipinos become fit to decide for themselves
whether they desire to be an independent nation. But it is well for them
(and well also for those Americans who during the past decade have done
so much damage to the Filipinos by agitation for an immediate
independence for which they were totally unfit) to remember that
self-government depends, and must depend, upon the Filipinos themselves.
All we can do is to give them the opportunity to develop the capacity
for self-government. If we had followed the advice of the foolish
doctrinaires who wished us at any time during the last ten years to turn
the Filipino people adrift, we should have shirked the plainest possible
duty and have inflicted a lasting wrong upon the Filipino people. We
have acted in exactly the opposite spirit. We have given the Filipinos
constitutional government--a government based upon justice--and we have
shown that we have governed them for their good and not for our
aggrandizement. At the present time, as during the past ten years, the
inexorable logic of facts shows that this government must be supplied by
us and not by them. We must be wise and generous; we must help the
Filipinos to master the difficult art of self-control, which is simply
another name for self-government. But we can not give them
self-government save in the sense of governing them so that gradually
they may, if they are able, learn to govern themselves. Under the
present system of just laws and sympathetic administration, we have
every reason to believe that they are gradually acquiring the character
which lies at the basis of self-government, and for which, if it be
lacking, no system of laws, no paper constitution, will in any wise
serve as a substitute. Our people in the Philippines have achieved what
may legitimately be called a marvelous success in giving to them a
government which marks on the part of those in authority both the
necessary understanding of the people and the necessary purpose to serve
them disinterestedly and in good faith. I trust that within a generation
the time will arrive when the Philippines can decide for themselves
whether it is well for them to become independent, or to continue under
the protection of a strong and disinterested power, able to guarantee to
the islands order at home and protection from foreign invasion. But no
one can prophesy the exact date when it will be wise to consider
independence as a fixed and definite policy. It would be worse than
folly to try to set down such a date in advance, for it must depend upon
the way in which the Philippine people themselves develop the power of
self-mastery.

PORTO RICO.

I again recommend that American citizenship be conferred upon the people
of Porto Rico.

CUBA.

In Cuba our occupancy will cease in about two months' time, the Cubans
have in orderly manner elected their own governmental authorities, and
the island will be turned over to them. Our occupation on this occasion
has lasted a little over two years, and Cuba has thriven and prospered
under it. Our earnest hope and one desire is that the people of the
island shall now govern themselves with justice, so that peace and order
may be secure. We will gladly help them to this end; but I would
solemnly warn them to remember the great truth that the only way a
people can permanently avoid being governed from without is to show that
they both can and will govern themselves from within.

JAPANESE EXPOSITION.

The Japanese Government has postponed until 1917 the date of the great
international exposition, the action being taken so as to insure ample
time in which to prepare to make the exposition all that it should be
made. The American commissioners have visited Japan and the postponement
will merely give ampler opportunity for America to be represented at the
exposition. Not since the first international exposition has there been
one of greater importance than this will be, marking as it does the
fiftieth anniversary of the ascension to the throne of the Emperor of
Japan. The extraordinary leap to a foremost place among the nations of
the world made by Japan during this half century is something
unparalleled in all previous history. This exposition will fitly
commemorate and signalize the giant progress that has been achieved. It
is the first exposition of its kind that has ever been held in Asia. The
United States, because of the ancient friendship between the two
peoples, because each of us fronts on the Pacific, and because of the
growing commercial relations between this country and Asia, takes a
peculiar interest in seeing the exposition made a success in every way.

I take this opportunity publicly to state my appreciation of the way in
which in Japan, in Australia, in New Zealand, and in all the States of
South America, the battle fleet has been received on its practice voyage
around the world. The American Government can not too strongly express
its appreciation of the abounding and generous hospitality shown our
ships in every port they visited.

THE ARMY.

As regards the Army I call attention to the fact that while our junior
officers and enlisted men stand very high, the present system of
promotion by seniority results in bringing into the higher grades many
men of mediocre capacity who have but a short time to serve. No man
should regard it as his vested right to rise to the highest rank in the
Army any more than in any other profession. It is a curious and by no
means creditable fact that there should be so often a failure on the
part of the public and its representatives to understand the great need,
from the standpoint of the service and the Nation, of refusing to
promote respectable, elderly incompetents. The higher places should be
given to the most deserving men without regard to seniority; at least
seniority should be treated as only one consideration. In the stress of
modern industrial competition no business firm could succeed if those
responsible for its management were chosen simply on the ground that
they were the oldest people in its employment; yet this is the course
advocated as regards the Army, and required by law for all grades except
those of general officer. As a matter of fact, all of the best officers
in the highest ranks of the Army are those who have attained their
present position wholly or in part by a process of selection.

The scope of retiring boards should be extended so that they could
consider general unfitness to command for any cause, in order to secure
a far more rigid enforcement than at present in the elimination of
officers for mental, physical or temperamental disabilities. But this
plan is recommended only if the Congress does not see fit to provide
what in my judgment is far better; that is, for selection in promotion,
and for elimination for age. Officers who fail to attain a certain rank
by a certain age should be retired--for instance, if a man should not
attain field rank by the time he is 45 he should of course be placed on
the retired list. General officers should be selected as at present, and
one-third of the other promotions should be made by selection, the
selection to be made by the President or the Secretary of War from a
list of at least two candidates proposed for each vacancy by a board of
officers from the arm of the service from which the promotion is to be
made. A bill is now before the Congress having for its object to secure
the promotion of officers to various grades at reasonable ages through a
process of selection, by boards of officers, of the least efficient for
retirement with a percentage of their pay depending upon length of
service. The bill, although not accomplishing all that should be done,
is a long step in the right direction; and I earnestly recommend its
passage, or that of a more completely effective measure.

The cavalry arm should be reorganized upon modern lines. This is an arm
in which it is peculiarly necessary that the field officers should not
be old. The cavalry is much more difficult to form than infantry, and it
should be kept up to the maximum both in efficiency and in strength, for
it can not be made in a hurry. At present both infantry and artillery
are too few in number for our needs. Especial attention should be paid
to development of the machine gun. A general service corps should be
established. As things are now the average soldier has far too much
labor of a nonmilitary character to perform.

NATIONAL GUARD.

Now that the organized militia, the National Guard, has been
incorporated with the Army as a part of the national forces, it behooves
the Government to do every reasonable thing in its power to perfect its
efficiency. It should be assisted in its instruction and otherwise aided
more liberally than heretofore. The continuous services of many
well-trained regular officers will be essential in this connection. Such
officers must be specially trained at service schools best to qualify
them as instructors of the National Guard. But the detailing of officers
for training at the service schools and for duty with the National Guard
entails detaching them from their regiments which are already greatly
depleted by detachment of officers for assignment to duties prescribed
by acts of the Congress.

A bill is now pending before the Congress creating a number of extra
officers in the Army, which if passed, as it ought to be, will enable
more officers to be trained as instructors of the National Guard and
assigned to that duty. In case of war it will be of the utmost
importance to have a large number of trained officers to use for turning
raw levies into good troops.

There should be legislation to provide a complete plan for organizing
the great body of volunteers behind the Regular Army and National Guard
when war has come. Congressional assistance should be given those who
are endeavoring to promote rifle practice so that our men, in the
services or out of them, may know how to use the rifle. While teams
representing the United States won the rifle and revolver championships
of the world against all comers in England this year, it is
unfortunately true that the great body of our citizens shoot less and
less as time goes on. To meet this we should encourage rifle practice
among schoolboys, and indeed among all classes, as well as in the
military services, by every means in our power. Thus, and not otherwise,
may we be able to assist in preserving the peace of the world. Fit to
hold our own against the strong nations of the earth, our voice for
peace will carry to the ends of the earth. Unprepared, and therefore
unfit, we must sit dumb and helpless to defend ourselves, protect
others, or preserve peace. The first step--in the direction of
preparation to avert war if possible, and to be fit for war if it should
come--is to teach our men to shoot.

THE NAVY.

I approve the recommendations of the General Board for the increase of
the Navy, calling especial attention to the need of additional
destroyers and colliers, and above all, of the four battleships. It is
desirable to complete as soon as possible a squadron of eight
battleships of the best existing type. The North Dakota, Delaware,
Florida, and Utah will form the first division of this squadron. The
four vessels proposed will form the second division. It will be an
improvement on the first, the ships being of the heavy, single caliber,
all big gun type. All the vessels should have the same tactical
qualities--that is, speed and turning circle--and as near as possible
these tactical qualities should be the same as in the four vessels
before named now being built.

I most earnestly recommend that the General Board be by law turned into
a General Staff. There is literally no excuse whatever for continuing
the present bureau organization of the Navy. The Navy should be treated
as a purely military organization, and everything should be subordinated
to the one object of securing military efficiency. Such military
efficiency can only be guaranteed in time of war if there is the most
thorough previous preparation in time of peace--a preparation, I may
add, which will in all probability prevent any need of war. The
Secretary must be supreme, and he should have as his official advisers a
body of line officers who should themselves have the power to pass upon
and coordinate all the work and all the proposals of the several
bureaus. A system of promotion by merit, either by selection or by
exclusion, or by both processes, should be introduced. It is out of the
question, if the present principle of promotion by mere seniority is
kept, to expect to get the best results from the higher officers. Our
men come too old, and stay for too short a time, in the high command
positions.

Two hospital ships should be provided. The actual experience of the
hospital ship with the fleet in the Pacific has shown the invaluable
work which such a ship does, and has also proved that it is well to have
it kept under the command of a medical officer. As was to be expected,
all of the anticipations of trouble from such a command have proved
completely baseless. It is as absurd to put a hospital ship under a line
officer as it would be to put a hospital on shore under such a command.
This ought to have been realized before, and there is no excuse for
failure to realize it now.

Nothing better for the Navy from every standpoint has ever occurred than
the cruise of the battle fleet around the world. The improvement of the
ships in every way has been extraordinary, and they have gained far more
experience in battle tactics than they would have gained if they had
stayed in the Atlantic waters. The American people have cause for
profound gratification, both in view of the excellent condition of the
fleet as shown by this cruise, and in view of the improvement the cruise
has worked in this already high condition. I do not believe that there
is any other service in the world in which the average of character and
efficiency in the enlisted men is as high as is now the case in our own.
I believe that the same statement can be made as to our officers, taken
as a whole; but there must be a reservation made in regard to those in
the highest ranks--as to which I have already spoken--and in regard to
those who have just entered the service; because we do not now get full
benefit from our excellent naval school at Annapolis. It is absurd not
to graduate the midshipmen as ensigns; to keep them for two years in
such an anomalous position as at present the law requires is detrimental
to them and to the service. In the academy itself, every first classman
should be required in turn to serve as petty officer and officer; his
ability to discharge his duties as such should be a prerequisite to his
going into the line, and his success in commanding should largely
determine his standing at graduation. The Board of Visitors should be
appointed in January, and each member should be required to give at
least six days' service, only from one to three days' to be performed
during June week, which is the least desirable time for the board to be
at Annapolis so far as benefiting the Navy by their observations is
concerned.

THE WHITE HOUSE,

Tuesday, December 8, 1908.

***

State of the Union Address
William H. Taft
December 7, 1909

The relations of the United States with all foreign governments have
continued upon the normal basis of amity and good understanding, and are
very generally satisfactory. EUROPE.

Pursuant to the provisions of the general treaty of arbitration
concluded between the United States and Great Britain, April 4, 1908, a
special agreement was entered into between the two countries on January
27, 1909, for the submission of questions relating to the fisheries on
the North Atlantic Coast to a tribunal to be formed from members of the
Permanent Court of Arbitration at The Hague.

In accordance with the provisions of the special agreement the printed
case of each Government was, on October 4 last, submitted to the other
and to the Arbitral Tribunal at The Hague, and the counter case of the
United States is now in course of preparation.

The American rights under the fisheries article of the Treaty of 1818
have been a cause of difference between the United States and Great
Britain for nearly seventy years. The interests involved are of great
importance to the American fishing industry, and the final settlement of
the controversy will remove a source of constant irritation and
complaint. This is the first case involving such great international
questions which has been submitted to the Permanent Court of Arbitration
at The Hague.

The treaty between the United States and Great Britain concerning the
Canadian International boundary, concluded April 11, 1908, authorizes
the appointment of two commissioners to define and mark accurately the
international boundary line between the United States and the Dominion
of Canada in the waters of the Passamaquoddy Bay, and provides for the
exchange of briefs within the period of six months. The briefs were duly
presented within the prescribed period, but as the commissioners failed
to agree within six months after the exchange of the printed statements,
as required by the treaty, it has now become necessary to resort to the
arbitration provided for in the article.

The International Fisheries Commission appointed pursuant to and under
the authority of the Convention of April 11, 1908, between the United
States and Great Britain, has completed a system of uniform and common
international regulations for the protection and preservation of the
food fishes in international boundary waters of the United States and
Canada.

The regulations will be duly submitted to Congress with a view to the
enactment of such legislation as will be necessary under the convention
to put them into operation.

The Convention providing for the settlement of international differences
between the United States and Canada, including the apportionment
between the two countries of certain of the boundary waters and the
appointment of commissioners to adjust certain other questions, signed
on the 11th day of January, 1909, and to the ratification of which the
Senate gave its advice and consent on March 3, 1909, has not yet been
ratified on the part of Great Britain.

Commissioners have been appointed on the part of the United States to
act jointly with Commissioners on the part of Canada in examining into
the question of obstructions in the St. John River between Maine and New
Brunswick, and to make recommendations for the regulation of the uses
thereof, and are now engaged in this work.

Negotiations for an international conference to consider and reach an
arrangement providing for the preservation and protection of the fur
seals in the North Pacific are in progress with the Governments of Great
Britain, Japan, and Russia. The attitude of the Governments interested
leads me to hope for a satisfactory settlement of this question as the
ultimate outcome of the negotiations.

The Second Peace Conference recently held at The Hague adopted a
convention for the establishment of an International Prize Court upon
the joint proposal of delegations of the United States, France, Germany
and Great Britain. The law to be observed by the Tribunal in the
decision of prize cases was, however, left in an uncertain and therefore
unsatisfactory state. Article 7 of the Convention provided that the
Court was to be governed by the provisions of treaties existing between
the belligerents, but that "in the absence of such provisions, the court
shall apply the rules of international law. If no generally recognized
rule exists, the court shall give judgment in accordance with the
general principles of justice and equity." As, however, many questions
in international maritime law are understood differently and therefore
interpreted differently in various countries, it was deemed advisable
not to intrust legislative powers to the proposed court, but to
determine the rules of law properly applicable in a Conference of the
representative maritime nations. Pursuant to an invitation of Great
Britain a conference was held at London from December 2, 1908, to
February 26, 1909, in which the following Powers participated: the
United States, Austria-Hungary, France, Germany, Great Britain, Italy,
Japan, the Netherlands, Russia and Spain. The conference resulted in the
Declaration of London, unanimously agreed to and signed by the
participating Powers, concerning among other matters, the highly
important subjects of blockade, contraband, the destruction of neutral
prizes, and continuous voyages. The declaration of London is an
eminently satisfactory codification of the international maritime law,
and it is hoped that its reasonableness and fairness will secure its
general adoption, as well as remove one of the difficulties standing in
the way of the establishment of an International Prize Court.

Under the authority given in the sundry civil appropriation act,
approved March 4, 1909, the United States was represented at the
International Conference on Maritime Law at Brussels. The Conference met
on the 28th of September last and resulted in the signature ad
referendum of a convention for the unification of certain regulations
with regard to maritime assistance and salvage and a convention for the
unification of certain rules with regard to collisions at sea. Two new
projects of conventions which have not heretofore been considered in a
diplomatic conference, namely, one concerning the limitation of the
responsibility of shipowners, and the other concerning marine mortgages
and privileges, have been submitted by the Conference to the different
governments.

The Conference adjourned to meet again on April 11, 1910.

The International Conference for the purpose of promoting uniform
legislation concerning letters of exchange, which was called by the
Government of the Netherlands to meet at The Hague in September, 1909,
has been postponed to meet at that capital in June, 1910. The United
States will be appropriately represented in this Conference under the
provision therefor already made by Congress.

The cordial invitation of Belgium to be represented by a fitting display
of American progress in the useful arts and inventions at the World's
Fair to be held at Brussels in 1910 remains to be acted upon by the
Congress. Mindful of the advantages to accrue to our artisans and
producers in competition with their Continental rivals, I renew the
recommendation heretofore made that provision be made for acceptance of
the invitation and adequate representation in the Exposition. The
question arising out of the Belgian annexation of the Independent State
of the Congo, which has so long and earnestly preoccupied the attention
of this Government and enlisted the sympathy of our best citizens, is
still open, but in a more hopeful stage. This Government was among the
foremost in the great work of uplifting the uncivilized regions of
Africa and urging the extension of the benefits of civilization,
education, and fruitful open commerce to that vast domain, and is a
party to treaty engagements of all the interested powers designed to
carry out that great duty to humanity. The way to better the original
and adventitious conditions, so burdensome to the natives and so
destructive to their development, has been pointed out, by observation
and experience, not alone of American representatives, but by cumulative
evidence from all quarters and by the investigations of Belgian Agents.
The announced programmes of reforms, striking at many of the evils known
to exist, are an augury of better things. The attitude of the United
States is one of benevolent encouragement, coupled with a hopeful trust
that the good work, responsibly undertaken and zealously perfected to
the accomplishment of the results so ardently desired, will soon justify
the wisdom that inspires them and satisfy the demands of humane
sentiment throughout the world.

A convention between the United States and Germany, under which the
nonworking provisions of the German patent law are made inapplicable to
the patents of American citizens, was concluded on February 23, 1909,
and is now in force. Negotiations for similar conventions looking to the
placing of American inventors on the same footing as nationals have
recently been initiated with other European governments whose laws
require the local working of foreign patents.

Under an appropriation made at the last session of the Congress, a
commission was sent on American cruisers to Monrovia to investigate the
interests of the United States and its citizens in Liberia. Upon its
arrival at Monrovia the commission was enthusiastically received, and
during its stay in Liberia was everywhere met with the heartiest
expressions of good will for the American Government and people and the
hope was repeatedly expressed on all sides that this Government might
see its way clear to do something to relieve the critical position of
the Republic arising in a measure from external as well as internal and
financial embarrassments. The Liberian Government afforded every
facility to the Commission for ascertaining the true state of affairs.
The Commission also had conferences with representative citizens,
interested foreigners and the representatives of foreign governments in
Monrovia. Visits were made to various parts of the Republic and to the
neighboring British colony of Sierra Leone, where the Commission was
received by and conferred with the Governor.

It will be remembered that the interest of the United States in the
Republic of Liberia springs from the historical fact of the foundation
of the Republic by the colonization of American citizens of the African
race. In an early treaty with Liberia there is a provision under which
the United States may be called upon for advice or assistance. Pursuant
to this provision and in the spirit of the moral relationship of the
United States to Liberia, that Republic last year asked this Government
to lend assistance in the solution of certain of their national
problems, and hence the Commission was sent.

The report of our commissioners has just been completed and is now under
examination by the Department of State. It is hoped that there may
result some helpful measures, in which case it may be my duty again to
invite your attention to this subject.

The Norwegian Government, by a note addressed on January 26, 1909, to
the Department of State, conveyed an invitation to the Government of the
United States to take part in a conference which it is understood will
be held in February or March, 1910, for the purpose of devising means to
remedy existing conditions in the Spitzbergen Islands.

This invitation was conveyed under the reservation that the question of
altering the status of the islands as countries belonging to no
particular State, and as equally open to the citizens and subjects of
all States, should not be raised.

The European Powers invited to this Conference by the Government of
Norway were Belgium, Denmark, France, Germany, Great Britain, Russia,
Sweden and the Netherlands.

The Department of State, in view of proofs filed with it in 1906,
showing the American possession, occupation, and working of certain
coal-bearing lands in Spitzbergen, accepted the invitation under the
reservation above stated, and under the further reservation that all
interests in those islands already vested should be protected and that
there should be equality of opportunity for the future. It was further
pointed out that membership in the Conference on the part of the United
States was qualified by the consideration that this Government would not
become a signatory to any conventional arrangement concluded by the
European members of the Conference which would imply contributory
participation by the United States in any obligation or responsibility
for the enforcement of any scheme of administration which might be
devised by the Conference for the islands.

THE NEAR EAST.

His Majesty Mehmed V, Sultan of Turkey, recently sent to this country a
special embassy to announce his accession. The quick transition of the
Government of the Ottoman Empire from one of retrograde tendencies to a
constitutional government with a Parliament and with progressive modern
policies of reform and public improvement is one of the important
phenomena of our times. Constitutional government seems also to have
made further advance in Persia. These events have turned the eyes of the
world upon the Near East. In that quarter the prestige of the United
States has spread widely through the peaceful influence of American
schools, universities and missionaries. There is every reason why we
should obtain a greater share of the commerce of the Near East since the
conditions are more favorable now than ever before.

LATIN AMERICA.

One of the happiest events in recent Pan-American diplomacy was the
pacific, independent settlement by the Governments of Bolivia and Peru
of a boundary difference between them, which for some weeks threatened
to cause war and even to entrain embitterments affecting other republics
less directly concerned. From various quarters, directly or indirectly
concerned, the intermediation of the United States was sought to assist
in a solution of the controversy. Desiring at all times to abstain from
any undue mingling in the affairs of sister republics and having faith
in the ability of the Governments of Peru and Bolivia themselves to
settle their differences in a manner satisfactory to themselves which,
viewed with magnanimity, would assuage all embitterment, this Government
steadily abstained from being drawn into the controversy and was much
gratified to find its confidence justified by events.

On the 9th of July next there will open at Buenos Aires the Fourth
Pan-American Conference. This conference will have a special meaning to
the hearts of all Americans, because around its date are clustered the
anniversaries of the independence of so many of the American republics.
It is not necessary for me to remind the Congress of the political,
social and commercial importance of these gatherings. You are asked to
make liberal appropriation for our participation. If this be granted, it
is my purpose to appoint a distinguished and representative delegation,
qualified fittingly to represent this country and to deal with the
problems of intercontinental interest which will there be discussed.

The Argentine Republic will also hold from May to November, 1910, at
Buenos Aires, a great International Agricultural Exhibition in which the
United States has been invited to participate. Considering the rapid
growth of the trade of the United States with the Argentine Republic and
the cordial relations existing between the two nations, together with
the fact that it provides an opportunity to show deference to a sister
republic on the occasion of the celebration of its national
independence, the proper Departments of this Government are taking steps
to apprise the interests concerned of the opportunity afforded by this
Exhibition, in which appropriate participation by this country is so
desirable. The designation of an official representative is also
receiving consideration.

To-day, more than ever before, American capital is seeking investment in
foreign countries, and American products are more and more generally
seeking foreign markets. As a consequence, in all countries there are
American citizens and American interests to be protected, on occasion,
by their Government. These movements of men, of capital, and of
commodities bring peoples and governments closer together and so form
bonds of peace and mutual dependency, as they must also naturally
sometimes make passing points of friction. The resultant situation
inevitably imposes upon this Government vastly increased
responsibilities. This Administration, through the Department of State
and the foreign service, is lending all proper support to legitimate and
beneficial American enterprises in foreign countries, the degree of such
support being measured by the national advantages to be expected. A
citizen himself can not by contract or otherwise divest himself of the
right, nor can this Government escape the obligation, of his protection
in his personal and property rights when these are unjustly infringed in
a foreign country. To avoid ceaseless vexations it is proper that in
considering whether American enterprise should be encouraged or
supported in a particular country, the Government should give full
weight not only to the national, as opposed to the individual benefits
to accrue, but also to the fact whether or not the Government of the
country in question is in its administration and in its diplomacy
faithful to the principles of moderation, equity and justice upon which
alone depend international credit, in diplomacy as well as in finance.

The Pan-American policy of this Government has long been fixed in its
principles and remains unchanged. With the changed circumstances of the
United States and of the Republics to the south of us, most of which
have great natural resources, stable government and progressive ideals,
the apprehension which gave rise to the Monroe Doctrine may be said to
have nearly disappeared, and neither the doctrine as it exists nor any
other doctrine of American policy should be permitted to operate for the
perpetuation of irresponsible government, the escape of just
obligations, or the insidious allegation of dominating ambitions on the
part of the United States.

Beside the fundamental doctrines of our Pan-American policy there have
grown up a realization of political interests, community of institutions
and ideals, and a flourishing commerce. All these bonds will be greatly
strengthened as time goes on and increased facilities, such as the great
bank soon to be established in Latin America, supply the means for
building up the colossal intercontinental commerce of the future.

My meeting with President Diaz and the greeting exchanged on both
American and Mexican soil served, I hope, to signalize the close and
cordial relations which so well bind together this Republic and the
great Republic immediately to the south, between which there is so vast
a network of material interests.

I am happy to say that all but one of the cases which for so long vexed
our relations with Venezuela have been settled within the past few
months and that, under the enlightened regime now directing the
Government of Venezuela, provision has been made for arbitration of the
remaining case before The Hague Tribunal. On July 30, 1909, the
Government of Panama agreed, after considerable negotiation, to
indemnify the relatives of the American officers and sailors who were
brutally treated, one of them having, indeed, been killed by the Panaman
police this year.

The sincere desire of the Government of Panama to do away with a
situation where such an accident could occur is manifest in the recent
request in compliance with which this Government has lent the services
of an officer of the Army to be employed by the Government of Panama as
Instructor of Police.

The sanitary improvements and public works undertaken in Cuba prior to
the present administration of that Government, in the success of which
the United States is interested under the treaty, are reported to be
making good progress and since the Congress provided for the continuance
of the reciprocal commercial arrangement between Cuba and the United
States assurance has been received that no negotiations injuriously
affecting the situation will be undertaken without consultation. The
collection of the customs of the Dominican Republic through the general
receiver of customs appointed by the President of the United States in
accordance with the convention of February 8, 1907, has proceeded in an
uneventful and satisfactory manner. The customs receipts have decreased
owing to disturbed political and economic conditions and to a very
natural curtailment of imports in view of the anticipated revision of
the Dominican tariff schedule. The payments to the fiscal agency fund
for the service of the bonded debt of the Republic, as provided by the
convention, have been regularly and promptly made, and satisfactory
progress has been made in carrying out the provisions of the convention
looking towards the completion of the adjustment of the debt and the
acquirement by the Dominican Government of certain concessions and
monopolies which have been a burden to the commerce of the country. In
short, the receivership has demonstrated its ability, even under
unfavorable economic and political conditions, to do the work for which
it was intended.

This Government was obliged to intervene diplomatically to bring about
arbitration or settlement of the claim of the Emery Company against
Nicaragua, which it had long before been agreed should be arbitrated. A
settlement of this troublesome case was reached by the signature of a
protocol on September 18, 1909.

Many years ago diplomatic intervention became necessary to the
protection of the interests in the American claim of Alsop and Company
against the Government of Chile. The Government of Chile had frequently
admitted obligation in the case and had promised this Government to
settle. There had been two abortive attempts to do so through arbitral
commissions, which failed through lack of jurisdiction. Now, happily, as
the result of the recent diplomatic negotiations, the Governments of the
United States and of Chile, actuated by the sincere desire to free from
any strain those cordial and friendly relations upon which both set such
store, have agreed by a protocol to submit the controversy to definitive
settlement by His Britannic Majesty, Edward VII.

Since the Washington Conventions of 1907 were communicated to the
Government of the United States as a consulting and advising party, this
Government has been almost continuously called upon by one or another,
and in turn by all the five Central American Republics, to exert itself
for the maintenance of the Conventions. Nearly every complaint has been
against the Zelaya Government of Nicaragua, which has kept Central
America in constant tension or turmoil. The responses made to the
representations of Central American Republics, as due from the United
States on account of its relation to the Washington Conventions, have
been at all times conservative and have avoided, so far as possible, any
semblance of interference, although it is very apparent that the
considerations of geographic proximity to the Canal Zone and of the very
substantial American interests in Central America give to the United
States a special position in the zone of these Republics and the
Caribbean Sea.

I need not rehearse here the patient efforts of this Government to
promote peace and welfare among these Republics, efforts which are fully
appreciated by the majority of them who are loyal to their true
interests. It would be no less unnecessary to rehearse here the sad tale
of unspeakable barbarities and oppression alleged to have been committed
by the Zelaya Government. Recently two Americans were put to death by
order of President Zelaya himself. They were reported to have been
regularly commissioned officers in the organized forces of a revolution
which had continued many weeks and was in control of about half of the
Republic, and as such, according to the modern enlightened practice of
civilized nations, they were entitled to be dealt with as prisoners of
war.

At the date when this message is printed this Government has terminated
diplomatic relations with the Zelaya Government, for reasons made public
in a communication to the former Nicaraguan charge d'affaires, and is
intending to take such future steps as may be found most consistent with
its dignity, its duty to American interests, and its moral obligations
to Central America and to civilization. It may later be necessary for me
to bring this subject to the attention of the Congress in a special
message.

The International Bureau of American Republics has carried on an
important and increasing work during the last year. In the exercise of
its peculiar functions as an international agency, maintained by all the
American Republics for the development of Pan-American commerce and
friendship, it has accomplished a great practical good which could be
done in the same way by no individual department or bureau of one
government, and is therefore deserving of your liberal support. The fact
that it is about to enter a new building, erected through the
munificence of an American philanthropist and the contributions of all
the American nations, where both its efficiency of administration and
expense of maintenance will naturally be much augmented, further
entitles it to special consideration.

THE FAR EAST.

In the Far East this Government preserves unchanged its policy of
supporting the principle of equality of opportunity and scrupulous
respect for the integrity of the Chinese Empire, to which policy are
pledged the interested Powers of both East and West.

By the Treaty of 1903 China has undertaken the abolition of likin with a
moderate and proportionate raising of the customs tariff along with
currency reform. These reforms being of manifest advantage to foreign
commerce as well as to the interests of China, this Government is
endeavoring to facilitate these measures and the needful acquiescence of
the treaty Powers. When it appeared that Chinese likin revenues were to
be hypothecated to foreign bankers in connection with a great railway
project, it was obvious that the Governments whose nationals held this
loan would have a certain direct interest in the question of the
carrying out by China of the reforms in question. Because this railroad
loan represented a practical and real application of the open door
policy through cooperation with China by interested Powers as well as
because of its relations to the reforms referred to above, the
Administration deemed American participation to be of great national
interest. Happily, when it was as a matter of broad policy urgent that
this opportunity should not be lost, the indispensable instrumentality
presented itself when a group of American bankers, of international
reputation and great resources, agreed at once to share in the loan upon
precisely such terms as this Government should approve. The chief of
those terms was that American railway material should be upon an exact
equality with that of the other nationals joining in the loan in the
placing of orders for this whole railroad system. After months of
negotiation the equal participation of Americans seems at last assured.
It is gratifying that Americans will thus take their share in this
extension of these great highways of trade, and to believe that such
activities will give a real impetus to our commerce and will prove a
practical corollary to our historic policy in the Far East.

The Imperial Chinese Government in pursuance of its decision to devote
funds from the portion of the indemnity remitted by the United States to
the sending of students to this country has already completed
arrangements for carrying out this purpose, and a considerable body of
students have arrived to take up their work in our schools and
universities. No one can doubt the happy effect that the associations
formed by these representative young men will have when they return to
take up their work in the progressive development of their country.

The results of the Opium Conference held at Shanghai last spring at the
invitation of the United States have been laid before the Government.
The report shows that China is making remarkable progress and admirable
efforts toward the eradication of the opium evil and that the
Governments concerned have not allowed their commercial interests to
interfere with a helpful cooperation in this reform. Collateral
investigations of the opium question in this country lead me to
recommend that the manufacture, sale and use of opium and its
derivatives in the United States should be so far as possible more
rigorously controlled by legislation.

In one of the Chinese-Japanese Conventions of September 4 of this year
there was a provision which caused considerable public apprehension in
that upon its face it was believed in some quarters to seek to establish
a monopoly of mining privileges along the South Manchurian and
Antung-Mukden Railroads, and thus to exclude Americans from a wide field
of enterprise, to take part in which they were by treaty with China
entitled. After a thorough examination of the Conventions and of the
several contextual documents, the Secretary of State reached the
conclusion that no such monopoly was intended or accomplished. However,
in view of the widespread discussion of this question, to confirm the
view it had reached, this Government made inquiry of the Imperial
Chinese and Japanese Governments and received from each official
assurance that the provision had no purpose inconsistent with the policy
of equality of opportunity to which the signatories, in common with the
United States, are pledged.

Our traditional relations with the Japanese Empire continue cordial as
usual. As the representative of Japan, His Imperial Highness Prince Kuni
visited the Hudson-Fulton Celebration. The recent visit of a delegation
of prominent business men as guests of the chambers of commerce of the
Pacific slope, whose representatives had been so agreeably received in
Japan, will doubtless contribute to the growing trade across the
Pacific, as well as to that mutual understanding which leads to mutual
appreciation. The arrangement of 1908 for a cooperative control of the
coming of laborers to the United States has proved to work
satisfactorily. The matter of a revision of the existing treaty between
the United States and Japan which is terminable in 1912 is already
receiving the study of both countries.

The Department of State is considering the revision in whole or in part,
of the existing treaty with Siam, which was concluded in 1856, and is
now, in respect to many of its provisions, out of date.

THE DEPARTMENT OF STATE.

I earnestly recommend to the favorable action of the Congress the
estimates submitted by the Department of State and most especially the
legislation suggested in the Secretary of State's letter of this date
whereby it will be possible to develop and make permanent the
reorganization of the Department upon modern lines in a manner to make
it a thoroughly efficient instrument in the furtherance of our foreign
trade and of American interests abroad. The plan to have Divisions of
Latin-American and Far Eastern Affairs and to institute a certain
specialization in business with Europe and the Near East will at once
commend itself. These politico-geographical divisions and the detail
from the diplomatic or consular service to the Department of a number of
men, who bring to the study of complicated problems in different parts
of the world practical knowledge recently gained on the spot, clearly is
of the greatest advantage to the Secretary of State in foreseeing
conditions likely to arise and in conducting the great variety of
correspondence and negotiation. It should be remembered that such
facilities exist in the foreign offices of all the leading commercial
nations and that to deny them to the Secretary of State would be to
place this Government at a great disadvantage in the rivalry of
commercial competition.

The consular service has been greatly improved under the law of April 5,
1906, and the Executive Order of June 27, 1906, and I commend to your
consideration the question of embodying in a statute the principles of
the present Executive Order upon which the efficiency of our consular
service is wholly dependent.

In modern times political and commercial interests are interrelated, and
in the negotiation of commercial treaties, conventions and tariff
agreements, the keeping open of opportunities and the proper support of
American enterprises, our diplomatic service is quite as important as
the consular service to the business interests of the country. Impressed
with this idea and convinced that selection after rigorous examination,
promotion for merit solely and the experience only to be gained through
the continuity of an organized service are indispensable to a high
degree of efficiency in the diplomatic service, I have signed an
Executive Order as the first step toward this very desirable result. Its
effect should be to place all secretaries in the diplomatic service in
much the same position as consular officers are now placed and to tend
to the promotion of the most efficient to the grade of minister,
generally leaving for outside appointments such posts of the grade of
ambassador or minister as it may be expedient to fill from without the
service. It is proposed also to continue the practice instituted last
summer of giving to all newly appointed secretaries at least one month's
thorough training in the Department of State before they proceed to
their posts. This has been done for some time in regard to the consular
service with excellent results.

Under a provision of the Act of August 5, 1909, I have appointed three
officials to assist the officers of the Government in collecting
information necessary to a wise administration of the tariff act of
August 5, 1909. As to questions of customs administration they are
cooperating with the officials of the Treasury Department and as to
matters of the needs and the exigencies of our manufacturers and
exporters, with the Department of Commerce and Labor, in its relation to
the domestic aspect of the subject of foreign commerce. In the study of
foreign tariff treatment they will assist the Bureau of Trade Relations
of the Department of State. It is hoped thus to coordinate and bring to
bear upon this most important subject all the agencies of the Government
which can contribute anything to its efficient handling.

As a consequence of Section 2 of the tariff act of August 5, 1909, it
becomes the duty of the Secretary of State to conduct as diplomatic
business all the negotiations necessary to place him in a position to
advise me as to whether or not a particular country unduly discriminates
against the United States in the sense of the statute referred to. The
great scope and complexity of this work, as well as the obligation to
lend all proper aid to our expanding commerce, is met by the expansion
of the Bureau of Trade Relations as set forth in the estimates for the
Department of State.

OTHER DEPARTMENTS.

I have thus in some detail described the important transactions of the
State Department since the beginning of this Administration for the
reason that there is no provision either by statute or custom for a
formal report by the Secretary of State to the President or to Congress,
and a Presidential message is the only means by which the condition of
our foreign relations is brought to the attention of Congress and the
public.

In dealing with the affairs of the other Departments, the heads of which
all submit annual reports, I shall touch only those matters that seem to
me to call for special mention on my part without minimizing in any way
the recommendations made by them for legislation affecting their
respective Departments, in all of which I wish to express my general
concurrence.

GOVERNMENT EXPENDITURES AND REVENUES.

Perhaps the most important question presented to this Administration is
that of economy in expenditures and sufficiency of revenue. The deficit
of the last fiscal year, and the certain deficit of the current year,
prompted Congress to throw a greater responsibility on the Executive and
the Secretary of the Treasury than had heretofore been declared by
statute. This declaration imposes upon the Secretary of the Treasury the
duty of assembling all the estimates of the Executive Departments,
bureaus, and offices, of the expenditures necessary in the ensuing
fiscal year, and of making an estimate of the revenues of the Government
for the same period; and if a probable deficit is thus shown, it is made
the duty of the President to recommend the method by which such deficit
can be met.

The report of the Secretary shows that the ordinary expenditures for the
current fiscal year ending June 30, 1910, will exceed the estimated
receipts by $34,075,620. If to this deficit is added the sum to be
disbursed for the Panama Canal, amounting to $38,000,000, and $1,000,000
to be paid on the public debt, the deficit of ordinary receipts and
expenditures will be increased to a total deficit of $73,075,620. This
deficit the Secretary proposes to meet by the proceeds of bonds issued
to pay the cost of constructing the Panama Canal. I approve this
proposal.

The policy of paying for the construction of the Panama Canal, not out
of current revenue, but by bond issues, was adopted in the Spooner Act
of 1902, and there seems to be no good reason for departing from the
principle by which a part at least of the burden of the cost of the
canal shall fall upon our posterity who are to enjoy it; and there is
all the more reason for this view because the actual cost to date of the
canal, which is now half done and which will be completed January 1,
1915, shows that the cost of engineering and construction will be
$297,766,000, instead of $139,705,200, as originally estimated. In
addition to engineering and construction, the other expenses, including
sanitation and government, and the amount paid for the properties, the
franchise, and the privilege of building the canal, increase the cost by
$75,435,000, to a total of $375,201,000. The increase in the cost of
engineering and construction is due to a substantial enlargement of the
plan of construction by widening the canal 100 feet in the Culebra cut
and by increasing the dimensions of the locks, to the underestimate of
the quantity of the work to be done under the original plan, and to an
underestimate of the cost of labor and materials both of which have
greatly enhanced in price since the original estimate was made.

In order to avoid a deficit for the ensuing fiscal year, I directed the
heads of Departments in the preparation of their estimates to make them
as low as possible consistent with imperative governmental necessity.
The result has been, as I am advised by the Secretary of the Treasury,
that the estimates for the expenses of the Government for the next
fiscal year ending June 30, 1911, are less than the appropriations for
this current fiscal year by $42,818,000. So far as the Secretary of the
Treasury is able to form a judgment as to future income, and compare it
with the expenditures for the next fiscal year ending June 30, 1911, and
excluding payments on account of the Panama Canal, which will doubtless
be taken up by bonds, there will be a surplus of $35,931,000.

In the present estimates the needs of the Departments and of the
Government have been cut to the quick, so to speak, and any assumption
on the part of Congress, so often made in times past, that the estimates
have been prepared with the expectation that they may be reduced, will
result in seriously hampering proper administration.

The Secretary of the Treasury points out what should be carefully noted
in respect to this reduction in governmental expenses for the next
fiscal year, that the economies are of two kinds--first, there is a
saving in the permanent administration of the Departments, bureaus, and
offices of the Government; and, second, there is a present reduction in
expenses by a postponement of projects and improvements that ultimately
will have to be carried out but which are now delayed with the hope that
additional revenue in the future will permit their execution without
producing a deficit.

It has been impossible in the preparation of estimates greatly to reduce
the cost of permanent administration. This can not be done without a
thorough reorganization of bureaus, offices, and departments. For the
purpose of securing information which may enable the executive and the
legislative branches to unite in a plan for the permanent reduction of
the cost of governmental administration, the Treasury Department has
instituted an investigation by one of the most skilled expert
accountants in the United States. The result of his work in two or three
bureaus, which, if extended to the entire Government, must occupy two or
more years, has been to show much room for improvement and opportunity
for substantial reductions in the cost and increased efficiency of
administration. The object of the investigation is to devise means to
increase the average efficiency of each employee. There is great room
for improvement toward this end, not only by the reorganization of
bureaus and departments and in the avoidance of duplication, but also in
the treatment of the individual employee.

Under the present system it constantly happens that two employees
receive the same salary when the work of one is far more difficult and
important and exacting than that of the other. Superior ability is not
rewarded or encouraged. As the classification is now entirely by salary,
an employee often rises to the highest class while doing the easiest
work, for which alone he may be fitted. An investigation ordered by my
predecessor resulted in the recommendation that the civil service he
reclassified according to the kind of work, so that the work requiring
most application and knowledge and ability shall receive most
compensation. I believe such a change would be fairer to the whole force
and would permanently improve the personnel of the service.

More than this, every reform directed toward the improvement in the
average efficiency of government employees must depend on the ability of
the Executive to eliminate from the government service those who are
inefficient from any cause, and as the degree of efficiency in all the
Departments is much lessened by the retention of old employees who have
outlived their energy and usefulness, it is indispensable to any proper
system of economy that provision be made so that their separation from
the service shall be easy and inevitable. It is impossible to make such
provision unless there is adopted a plan of civil pensions. Most of the
great industrial organizations, and many of the well-conducted railways
of this country, are coming to the conclusion that a system of pensions
for old employees, and the substitution therefor of younger and more
energetic servants, promotes both economy and efficiency of
administration.

I am aware that there is a strong feeling in both Houses of Congress,
and possibly in the country, against the establishment of civil
pensions, and that this has naturally grown out of the heavy burden of
military pensions, which it has always been the policy of our Government
to assume; but I am strongly convinced that no other practical solution
of the difficulties presented by the superannuation of civil servants
can be found than that of a system of civil pensions.

The business and expenditures of the Government have expanded enormously
since the Spanish war, but as the revenues have increased in nearly the
same proportion as the expenditures until recently, the attention of the
public, and of those responsible for the Government, has not been
fastened upon the question of reducing the cost of administration. We
can not, in view of the advancing prices of living, hope to save money
by a reduction in the standard of salaries paid. Indeed, if any change
is made in that regard, an increase rather than a decrease will be
necessary; and the only means of economy will be in reducing the number
of employees and in obtaining a greater average of efficiency from those
retained in the service.

Close investigation and study needed to make definite recommendations in
this regard will consume at least two years. I note with much
satisfaction the organization in the Senate of a Committee on Public
Expenditures, charged with the duty of conducting such an investigation,
and I tender to that committee all the assistance which the executive
branch of the Government can possibly render.

FRAUDS IN THE COLLECTION OF CUSTOMS.

I regret to refer to the fact of the discovery of extensive frauds in
the collections of the customs revenue at New York City, in which a
number of the subordinate employees in the weighing and other
departments were directly concerned, and in which the beneficiaries were
the American Sugar Refining Company and others. The frauds consisted in
the payment of duty on underweights of sugar. The Government has
recovered from the American Sugar Refining Company all that it is shown
to have been defrauded of. The sum was received in full of the amount
due, which might have been recovered by civil suit against the
beneficiary of the fraud, but there was an express reservation in the
contract of settlement by which the settlement should not interfere
with, or prevent the criminal prosecution of everyone who was found to
be subject to the same.

Criminal prosecutions are now proceeding against a number of the
Government officers. The Treasury Department and the Department of
Justice are exerting every effort to discover all the wrongdoers,
including the officers and employees of the companies who may have been
privy to the fraud. It would seem to me that an investigation of the
frauds by Congress at present, pending the probing by the Treasury
Department and the Department of Justice, as proposed, might by giving
immunity and otherwise prove an embarrassment in securing conviction of
the guilty parties.

MAXIMUM AND MINIMUM CLAUSE IN TARIFF ACT.

Two features of the new tariff act call for special reference. By virtue
of the clause known as the "Maximum and Minimum" clause, it is the duty
of the Executive to consider the laws and practices of other countries
with reference to the importation into those countries of the products
and merchandise of the United States, and if the Executive finds such
laws and practices not to be unduly discriminatory against the United
States, the minimum duties provided in the bill are to go into force.

Unless the President makes such a finding, then the maximum duties
provided in the bill, that is, an increase of twenty-five per cent. ad
valorem over the minimum duties, are to be in force. Fear has been
expressed that this power conferred and duty imposed on the Executive is
likely to lead to a tariff war. I beg to express the hope and belief
that no such result need be anticipated.

The discretion granted to the Executive by the terms "unduly
discriminatory" is wide. In order that the maximum duty shall be charged
against the imports from a country, it is necessary that he shall find
on the part of that country not only discriminations in its laws or the
practice under them against the trade of the United States, but that the
discriminations found shall be undue; that is, without good and fair
reason. I conceive that this power was reposed in the President with the
hope that the maximum duties might never be applied in any case, but
that the power to apply them would enable the President and the State
Department through friendly negotiation to secure the elimination from
the laws and the practice under them of any foreign country of that
which is unduly discriminatory. No one is seeking a tariff war or a
condition in which the spirit of retaliation shall be aroused.

USES OF THE NEW TARIFF BOARD.

The new tariff law enables me to appoint a tariff board to assist me in
connection with the Department of State in the administration of the
minimum and maximum clause of the act and also to assist officers of the
Government in the administration of the entire law. An examination of
the law and an understanding of the nature of the facts which should be
considered in discharging the functions imposed upon the Executive show
that I have the power to direct the tariff board to make a comprehensive
glossary and encyclopedia of the terms used and articles embraced in the
tariff law, and to secure information as to the cost of production of
such goods in this country and the cost of their production in foreign
countries. I have therefore appointed a tariff board consisting of three
members and have directed them to perform all the duties above
described. This work will perhaps take two or three years, and I ask
from Congress a continuing annual appropriation equal to that already
made for its prosecution. I believe that the work of this board will be
of prime utility and importance whenever Congress shall deem it wise
again to readjust the customs duties. If the facts secured by the tariff
board are of such a character as to show generally that the rates of
duties imposed by the present tariff law are excessive under the
principles of protection as described in the platform of the successful
party at the late election, I shall not hesitate to invite the attention
of Congress to this fact and to the necessity for action predicated
thereon. Nothing, however, halts business and interferes with the course
of prosperity so much as the threatened revision of the tariff, and
until the facts are at hand, after careful and deliberate investigation,
upon which such revision can properly be undertaken, it seems to me
unwise to attempt it. The amount of misinformation that creeps into
arguments pro and con in respect to tariff rates is such as to require
the kind of investigation that I have directed the tariff board to make,
an investigation undertaken by it wholly without respect to the effect
which the facts may have in calling for a readjustment of the rates of
duty.

WAR DEPARTMENT.

In the interest of immediate economy and because of the prospect of a
deficit, I have required a reduction in the estimates of the War
Department for the coming fiscal year, which brings the total estimates
down to an amount forty-five millions less than the corresponding
estimates for last year. This could only be accomplished by cutting off
new projects and suspending for the period of one year all progress in
military matters. For the same reason I have directed that the Army
shall not be recruited up to its present authorized strength. These
measures can hardly be more than temporary--to last until our revenues
are in better condition and until the whole question of the expediency
of adopting a definite military policy can be submitted to Congress, for
I am sure that the interests of the military establishment are seriously
in need of careful consideration by Congress. The laws regulating the
organization of our armed forces in the event of war need to be revised
in order that the organization can be modified so as to produce a force
which would be more consistently apportioned throughout its numerous
branches. To explain the circumstances upon which this opinion is based
would necessitate a lengthy discussion, and I postpone it until the
first convenient opportunity shall arise to send to Congress a special
message upon this subject.

The Secretary of War calls attention to a number of needed changes in
the Army in all of which I concur, but the point upon which I place most
emphasis is the need for an elimination bill providing a method by which
the merits of officers shall have some effect upon their advancement and
by which the advancement of all may be accelerated by the effective
elimination of a definite proportion of the least efficient. There are
in every army, and certainly in ours, a number of officers who do not
violate their duty in any such way as to give reason for a court-martial
or dismissal, but who do not show such aptitude and skill and character
for high command as to justify their remaining in the active service to
be Promoted. Provision should be made by which they may be retired on a
certain proportion of their pay, increasing with their length of service
at the time of retirement. There is now a personnel law for the Navy
which itself needs amendment and to which I shall make further
reference. Such a law is needed quite as much for the Army.

The coast defenses of the United States proper are generally all that
could be desired, and in some respects they are rather more elaborate
than under present conditions are needed to stop an enemy's fleet from
entering the harbors defended. There is, however, one place where
additional defense is badly needed, and that is at the mouth of
Chesapeake Bay, where it is proposed to make an artificial island for a
fort which shall prevent an enemy's fleet from entering this most
important strategical base of operations on the whole Atlantic and Gulf
coasts. I hope that appropriate legislation will be adopted to secure
the construction of this defense.

The military and naval joint board have unanimously agreed that it would
be unwise to make the large expenditures which at one time were
contemplated in the establishment of a naval base and station in the
Philippine Islands, and have expressed their judgment, in which I fully
concur, in favor of making an extensive naval base at Pearl Harbor, near
Honolulu, and not in the Philippines. This does not dispense with the
necessity for the comparatively small appropriations required to finish
the proper coast defenses in the Philippines now under construction on
the island of Corregidor and elsewhere or to complete a suitable repair
station and coaling supply station at Olongapo, where is the floating
dock "Dewey." I hope that this recommendation of the joint board will
end the discussion as to the comparative merits of Manila Bay and
Olongapo as naval stations, and will lead to prompt measures for the
proper equipment and defense of Pearl Harbor.

THE NAVY.

The return of the battle-ship fleet from its voyage around the world, in
more efficient condition than when it started, was a noteworthy event of
interest alike to our citizens and the naval authorities of the world.
Besides the beneficial and far-reaching effect on our personal and
diplomatic relations in the countries which the fleet visited, the
marked success of the ships in steaming around the world in all weathers
on schedule time has increased respect for our Navy and has added to our
national prestige.

Our enlisted personnel recruited from all sections of the country is
young and energetic and representative of the national spirit. It is,
moreover, owing to its intelligence, capable of quick training into the
modern man-of-warsman. Our officers are earnest and zealous in their
profession, but it is a regrettable fact that the higher officers are
old for the responsibilities of the modern navy, and the admirals do not
arrive at flag rank young enough to obtain adequate training in their
duties as flag officers. This need for reform in the Navy has been ably
and earnestly presented to Congress by my predecessor, and I also
urgently recommend the subject for consideration.

Early in the coming session a comprehensive plan for the reorganization
of the officers of all corps of the Navy will be presented to Congress,
and I hope it will meet with action suited to its urgency.

Owing to the necessity for economy in expenditures, I have directed the
curtailment of recommendations for naval appropriations so that they are
thirty-eight millions less than the corresponding estimates of last
year, and the request for new naval construction is limited to two
first-class battle ships and one repair vessel.

The use of a navy is for military purposes, and there has been found
need in the Department of a military branch dealing directly with the
military use of the fleet. The Secretary of the Navy has also felt the
lack of responsible advisers to aid him in reaching conclusions and
deciding important matters between coordinate branches of the
Department. To secure these results he has inaugurated a tentative plan
involving certain changes in the organization of the Navy Department,
including the navy-yards, all of which have been found by the
Attorney-General to be in accordance with law. I have approved the
execution of the plan proposed because of the greater efficiency and
economy it promises.

The generosity of Congress has provided in the present Naval Observatory
the most magnificent and expensive astronomical establishment in the
world. It is being used for certain naval purposes which might easily
and adequately be subserved by a small division connected with the Naval
Department at only a fraction of the cost of the present Naval
Observatory. The official Board of Visitors established by Congress and
appointed in 1901 expressed its conclusion that the official head of the
observatory should be an eminent astronomer appointed by the President
by and with the advice and consent of the Senate, holding his place by a
tenure at least as permanent as that of the Superintendent of the Coast
Survey or the head of the Geological Survey, and not merely by a detail
of two or three years' duration. I fully concur in this judgment, and
urge a provision by law for the appointment of such a director.

It may not be necessary to take the observatory out of the Navy
Department and put it into another department in which opportunity for
scientific research afforded by the observatory would seem to be more
appropriate, though I believe such a transfer in the long run is the
best policy. I am sure, however, I express the desire of the astronomers
and those learned in the kindred sciences when I urge upon Congress that
the Naval Observatory be now dedicated to science under control of a man
of science who can, if need be, render all the service to the Navy
Department which this observatory now renders, and still furnish to the
world the discoveries in astronomy that a great astronomer using such a
plant would be likely to make.

DEPARTMENT OF JUSTICE EXPEDITION IN LEGAL PROCEDURE

The deplorable delays in the administration of civil and criminal law
have received the attention of committees of the American Bar
Association and of many State Bar Associations, as well as the
considered thought of judges and jurists. In my judgment, a change in
judicial procedure, with a view to reducing its expense to private
litigants in civil cases and facilitating the dispatch of business and
final decision in both civil and criminal cases, constitutes the
greatest need in our American institutions. I do not doubt for one
moment that much of the lawless violence and cruelty exhibited in
lynchings is directly due to the uncertainties and injustice growing out
of the delays in trials, judgments, and the executions thereof by our
courts. Of course these remarks apply quite as well to the
administration of justice in State courts as to that in Federal courts,
and without making invidious distinction it is perhaps not too much to
say that, speaking generally, the defects are less in the Federal courts
than in the State courts. But they are very great in the Federal courts.
The expedition with which business is disposed of both on the civil and
the criminal side of English courts under modern rules of procedure
makes the delays in our courts seem archaic and barbarous. The procedure
in the Federal courts should furnish an example for the State courts. I
presume it is impossible, without an amendment to the Constitution, to
unite under one form of action the proceedings at common law and
proceedings in equity in the Federal courts, but it is certainly not
impossible by a statute to simplify and make short and direct the
procedure both at law and in equity in those courts. It is not
impossible to cut down still more than it is cut down, the jurisdiction
of the Supreme Court so as to confine it almost wholly to statutory and
constitutional questions. Under the present statutes the equity and
admiralty procedure in the Federal courts is under the control of the
Supreme Court, but in the pressure of business to which that court is
subjected, it is impossible to hope that a radical and proper reform of
the Federal equity procedure can be brought about. I therefore recommend
legislation providing for the appointment by the President of a
commission with authority to examine the law and equity procedure of the
Federal courts of first instance, the law of appeals from those courts
to the courts of appeals and to the Supreme Court, and the costs imposed
in such procedure upon the private litigants and upon the public
treasury and make recommendation with a view to simplifying and
expediting the procedure as far as possible and making it as inexpensive
as may be to the litigant of little means.

INJUNCTIONS WITHOUT NOTICE.

The platform of the successful party in the last election contained the
following: "The Republican party will uphold at all times the authority
and integrity of the courts, State and Federal, and will ever insist
that their powers to enforce their process and to protect life, liberty,
and property shall be preserved inviolate. We believe, however, that the
rules of procedure in the Federal courts with respect to the issuance of
the writ of injunction should be more accurately defined by statute, and
that no injunction or temporary restraining order should be issued
without notice, except where irreparable injury would result from delay,
in which case a speedy hearing thereafter should be granted." I
recommend that in compliance with the promise thus made, appropriate
legislation be adopted. The ends of justice will best be met and the
chief cause of complaint against ill-considered injunctions without
notice will be removed by the enactment of a statute forbidding
hereafter the issuing of any injunction or restraining order, whether
temporary or permanent, by any Federal court, without previous notice
and a reasonable opportunity to be heard on behalf of the parties to be
enjoined; unless it shall appear to the satisfaction of the court that
the delay necessary to give such notice and hearing would result in
irreparable injury to the complainant and unless also the court shall
from the evidence make a written finding, which shall be spread upon the
court minutes, that immediate and irreparable injury is likely to ensue
to the complainant, and shall define the injury, state why it is
irreparable, and shall also endorse on the order issued the date and the
hour of the issuance of the order. Moreover, every such injunction or
restraining order issued without previous notice and opportunity by the
defendant to be heard should by force of the statute expire and be of no
effect after seven days from the issuance thereof or within any time
less than that period which the court may fix, unless within such seven
days or such less period, the injunction or order is extended or renewed
after previous notice and opportunity to be heard.

My judgment is that the passage of such an act which really embodies the
best practice in equity and is very like the rule now in force in some
courts will prevent the issuing of ill-advised orders of injunction
without notice and will render such orders when issued much less
objectionable by the short time in which they may remain effective.

ANTI-TRUST AND INTERSTATE COMMERCE LAWS.

The jurisdiction of the General Government over interstate commerce has
led to the passage of the so-called "Sherman Anti-trust Law" and the
"Interstate Commerce Law" and its amendments. The developments in the
operation of those laws, as shown by indictments, trials, judicial
decisions, and other sources of information, call for a discussion and
some suggestions as to amendments. These I prefer to embody in a special
message instead of including them in the present communication, and I
shall avail myself of the first convenient opportunity to bring these
subjects to the attention of Congress.

JAIL OF THE DISTRICT OF COLUMBIA.

My predecessor transmitted to the Congress a special message on January
11, 1909, accompanying the report of Commissioners theretofore appointed
to investigate the jail, workhouse, etc., in the District of Columbia,
in which he directed attention to the report as setting forth vividly,
"the really outrageous conditions in the workhouse and jail."

The Congress has taken action in pursuance of the recommendations of
that report and of the President, to the extent of appropriating funds
and enacting the necessary legislation for the establishment of a
workhouse and reformatory. No action, however, has been taken by the
Congress with respect to the jail, the conditions of which are still
antiquated and insanitary. I earnestly recommend the passage of a
sufficient appropriation to enable a thorough remodeling of that
institution to be made without delay. It is a reproach to the National
Government that almost under the shadow of the Capitol Dome prisoners
should be confined in a building destitute of the ordinary decent
appliances requisite to cleanliness and sanitary conditions.

POST-OFFICE DEPARTMENT. SECOND-CLASS MAIL MATTER.

The deficit every year in the Post-Office Department is largely caused
by the low rate of postage of 1 cent a pound charged on second-class
mail matter, which includes not only newspapers, but magazines and
miscellaneous periodicals. The actual loss growing out of the
transmission of this second-class mail matter at 1 cent a pound amounts
to about $63,000,000 a year. The average cost of the transportation of
this matter is more than 9 cents a pound.

It appears that the average distance over which newspapers are delivered
to their customers is 291 miles, while the average haul of magazines is
1,049, and of miscellaneous periodicals 1,128 miles. Thus, the average
haul of the magazine is three and one-half times and that of the
miscellaneous periodical nearly four times the haul of the daily
newspaper, yet all of them pay the same postage rate of 1 cent a pound.
The statistics of 1907 show that second-class mail matter constituted
63.91 per cent. of the weight of all the mail, and yielded only 5.19 per
cent. of the revenue.

The figures given are startling, and show the payment by the Government
of an enormous subsidy to the newspapers, magazines, and periodicals,
and Congress may well consider whether radical steps should not be taken
to reduce the deficit in the Post-Office Department caused by this
discrepancy between the actual cost of transportation and the
compensation exacted therefor.

A great saving might be made, amounting to much more than half of the
loss, by imposing upon magazines and periodicals a higher rate of
postage. They are much heavier than newspapers, and contain a much
higher proportion of advertising to reading matter, and the average
distance of their transportation is three and a half times as great.

The total deficit for the last fiscal year in the Post-Office Department
amounted to $17,500,000. The branches of its business which it did at a
loss were the second-class mail service, in which the loss, as already
said, was $63,000,000, and the free rural delivery, in which the loss
was $28,000,000. These losses were in part offset by the profits of the
letter postage and other sources of income. It would seem wise to reduce
the loss upon second-class mail matter, at least to the extent of
preventing a deficit in the total operations of the Post-Office.

I commend the whole subject to Congress, not unmindful of the spread of
intelligence which a low charge for carrying newspapers and periodicals
assists. I very much doubt, however, the wisdom of a policy which
constitutes so large a subsidy and requires additional taxation to meet
it.

POSTAL SAVINGS BANKS.

The second subject worthy of mention in the Post-Office Department is
the real necessity and entire practicability of establishing postal
savings banks. The successful party at the last election declared in
favor of postal savings banks, and although the proposition finds
opponents in many parts of the country, I am convinced that the people
desire such banks, and am sure that when the banks are furnished they
will be productive of the utmost good. The postal savings banks are not
constituted for the purpose of creating competition with other banks.
The rate of interest upon deposits to which they would be limited would
be so small as to prevent their drawing deposits away from other banks.

I believe them to be necessary in order to offer a proper inducement to
thrift and saving to a great many people of small means who do not now
have banking facilities, and to whom such a system would offer an
opportunity for the accumulation of capital. They will furnish a
satisfactory substitute, based on sound principle and actual successful
trial in nearly all the countries of the world, for the system of
government guaranty of deposits now being adopted in several western
States, which with deference to those who advocate it seems to me to
have in it the seeds of demoralization to conservative banking and
certain financial disaster. The question of how the money deposited in
postal savings banks shall be invested is not free from difficulty, but
I believe that a satisfactory provision for this purpose was inserted as
an amendment to the bill considered by the Senate at its last session.
It has been proposed to delay the consideration of legislation
establishing a postal savings bank until after the report of the
Monetary Commission. This report is likely to be delayed, and properly
so, cause of the necessity for careful deliberation and close
investigation. I do not see why the one should be tied up with the
other. It is understood that the Monetary Commission have looked into
the systems of banking which now prevail abroad, and have found that by
a control there exercised in respect to reserves and the rates of
exchange by some central authority panics are avoided. It is not
apparent that a system of postal savings banks would in any way
interfere with a change to such a system here. Certainly in most of the
countries of Europe where control is thus exercised by a central
authority, postal savings banks exist and are not thought to be
inconsistent with a proper financial and banking system.

SHIP SUBSIDY.

Following the course of my distinguished predecessor, I earnestly
recommend to Congress the consideration and passage of a ship subsidy
bill, looking to the establishment of lines between our Atlantic
seaboard and the eastern coast of South America, as well as lines from
the west coast of the United States to South America. China, Japan, and
the Philippines. The profits on foreign mails are perhaps a sufficient
measure of the expenditures which might first be tentatively applied to
this method of inducing American capital to undertake the establishment
of American lines of steamships in those directions in which we now feel
it most important that we should have means of transportation controlled
in the interest of the expansion of our trade. A bill of this character
has once passed the House and more than once passed the Senate, and I
hope that at this session a bill framed on the same lines and with the
same purposes may become a law.

INTERIOR DEPARTMENT. NEW MEXICO AND ARIZONA.

The successful party in the last election in its national platform
declared in favor of the admission as separate States of New Mexico and
Arizona, and I recommend that legislation appropriate to this end be
adopted. I urge, however, that care be exercised in the preparation of
the legislation affecting each Territory to secure deliberation in the
selection of persons as members of the convention to draft a
constitution for the incoming State, and I earnestly advise that such
constitution after adoption by the convention shall be submitted to the
people of the Territory for their approval at an election in which the
sole issue shall be the merits of the proposed constitution, and if the
constitution is defeated by popular vote means shall be provided in the
enabling act for a new convention and the drafting of a new
constitution. I think it vital that the issue as to the merits of the
constitution should not be mixed up with the selection of State
officers, and that no election of State officers should be had until
after the constitution has been fully approved and finally settled upon.
ALASKA.

With respect to the Territory of Alaska, I recommend legislation which
shall provide for the appointment by the President of a governor and
also of an executive council, the members of which shall during their
term of office reside in the Territory, and which shall have legislative
powers sufficient to enable it to give to the Territory local laws
adapted to its present growth. I strongly deprecate legislation looking
to the election of a Territorial legislature in that vast district. The
lack of permanence of residence of a large part of the present
population and the small number of the people who either permanently or
temporarily reside in the district as compared with its vast expanse and
the variety of the interests that have to be subserved, make it
altogether unfitting in my judgment to provide for a popular election of
a legislative body. The present system is not adequate and does not
furnish the character of local control that ought to be there. The only
compromise it seems to me which may give needed local legislation and
secure a conservative government is the one I propose.

CONSERVATION OF NATIONAL RESOURCES.

In several Departments there is presented the necessity for legislation
looking to the further conservation of our national resources, and the
subject is one of such importance as to require a more detailed and
extended discussion than can be entered upon in this communication. For
that reason I shall take an early opportunity to send a special message
to Congress on the subject of the improvement of our waterways, upon the
reclamation and irrigation of arid, semiarid, and swamp lands; upon the
preservation of our forests and the reforesting of suitable areas; upon
the reclassification of the public domain with a view of separating from
agricultural settlement mineral, coal, and phosphate lands and sites
belonging to the Government bordering on streams suitable for the
utilization of water power.

DEPARTMENT OF AGRICULTURE.

I commend to your careful consideration the report of the Secretary of
Agriculture as showing the immense sphere of usefulness which that
Department now fills and the wonderful addition to the wealth of the
nation made by the farmers of this country in the crops of the current
year.

DEPARTMENT OF COMMERCE AND LABOR. THE LIGHT-HOUSE BOARD.

The Light-House Board now discharges its duties under the Department of
Commerce and Labor. For upwards of forty years this Board has been
constituted of military and naval officers and two or three men of
science, with such an absence of a duly constituted executive head that
it is marvelous what work has been accomplished. In the period of
construction the energy and enthusiasm of all the members prevented the
inherent defects of the system from interfering greatly with the
beneficial work of the Board, but now that the work is chiefly confined
to maintenance and repair, for which purpose the country is divided into
sixteen districts, to which are assigned an engineer officer of the Army
and an inspector of the Navy, each with a light-house tender and the
needed plant for his work, it has become apparent by the frequent
friction that arises, due to the absence of any central independent
authority, that there must be a complete reorganization of the Board. I
concede the advantage of keeping in the system the rigidity of
discipline that the presence of naval and military officers in charge
insures, but unless the presence of such officers in the Board can be
made consistent with a responsible executive head that shall have proper
authority, I recommend the transfer of control over the light-houses to
a suitable civilian bureau. This is in accordance with the judgment of
competent persons who are familiar with the workings of the present
system. I am confident that a reorganization can be effected which shall
avoid the recurrence of friction between members, instances of which
have been officially brought to my attention, and that by such
reorganization greater efficiency and a substantial reduction in the
expense of operation can be brought about.

CONSOLIDATION OF BUREAUS.

I request Congressional authority to enable the Secretary of Commerce
and Labor to unite the Bureaus of Manufactures and Statistics. This was
recommended by a competent committee appointed in the previous
administration for the purpose of suggesting changes in the interest of
economy and efficiency, and is requested by the Secretary.

THE WHITE SLAVE TRADE.

I greatly regret to have to say that the investigations made in the
Bureau of Immigration and other sources of information lead to the view
that there is urgent necessity for additional legislation and greater
executive activity to suppress the recruiting of the ranks of
prostitutes from the streams of immigration into this country--an evil
which, for want of a better name, has been called "The White Slave
Trade." I believe it to be constitutional to forbid, under penalty, the
transportation of persons for purposes of prostitution across national
and state lines; and by appropriating a fund of $50,000 to be used by
the Secretary of Commerce and Labor for the employment of special
inspectors it will be possible to bring those responsible for this trade
to indictment and conviction under a federal law.

BUREAU OF HEALTH

For a very considerable period a movement has been gathering strength,
especially among the members of the medical profession, in favor of a
concentration of the instruments of the National Government which have
to do with the promotion of public health. In the nature of things, the
Medical Department of the Army and the Medical Department of the Navy
must be kept separate. But there seems to be no reason why all the other
bureaus and offices in the General Government which have to do with the
public health or subjects akin thereto should not be united in a bureau
to be called the "Bureau of Public Health." This would necessitate the
transfer of the Marine-Hospital Service to such a bureau. I am aware
that there is wide field in respect to the public health committed to
the States in which the Federal Government can not exercise
jurisdiction, but we have seen in the Agricultural Department the
expansion into widest usefulness of a department giving attention to
agriculture when that subject is plainly one over which the States
properly exercise direct jurisdiction. The opportunities offered for
useful research and the spread of useful information in regard to the
cultivation of the soil and the breeding of stock and the solution of
many of the intricate problems in progressive agriculture have
demonstrated the wisdom of establishing that department. Similar
reasons, of equal force, can be given for the establishment of a bureau
of health that shall not only exercise the police jurisdiction of the
Federal Government respecting quarantine, but which shall also afford an
opportunity for investigation and research by competent experts into
questions of health affecting the whole country, or important sections
thereof, questions which, in the absence of Federal governmental work,
are not likely to be promptly solved.

CIVIL SERVICE COMMISSION.

The work of the United States Civil Service Commission has been
performed to the general satisfaction of the executive officers with
whom the Commission has been brought into official communication. The
volume of that work and its variety and extent have under new laws, such
as the Census Act, and new Executive orders, greatly increased. The
activities of the Commission required by the statutes have reached to
every portion of the public domain.

The accommodations of the Commission are most inadequate for its needs.
I call your attention to its request for increase in those
accommodations as will appear from the annual report for this year.

POLITICAL CONTRIBUTIONS.

I urgently recommend to Congress that a law be passed requiring that
candidates in elections of Members of the House of Representatives, and
committees in charge of their candidacy and campaign, file in a proper
office of the United States Government a statement of the contributions
received and of the expenditures incurred in the campaign for such
elections and that similar legislation be enacted in respect to all
other elections which are constitutionally within the control of
Congress.

FREEDMAN'S SAVINGS AND TRUST COMPANY.

Recommendations have been made by my predecessors that Congress
appropriate a sufficient sum to pay the balance--about 38 per cent.--of
the amounts due depositors in the Freedman's Savings and Trust Company.
I renew this recommendation, and advise also that a proper limitation be
prescribed fixing a period within which the claims may be presented,
that assigned claims be not recognized, and that a limit be imposed on
the amount of fees collectible for services in presenting such claims.

SEMI-CENTENNIAL OF NEGRO FREEDOM.

The year 1913 will mark the fiftieth anniversary of the issuance of the
Emancipation Proclamation granting freedom to the negroes. It seems
fitting that this event should be properly celebrated. Already a
movement has been started by prominent Negroes, encouraged by prominent
white people and the press. The South especially is manifesting its
interest in this movement.

It is suggested that a proper form of celebration would be an exposition
to show the progress the Negroes have made, not only during their period
of freedom, but also from the time of their coming to this country.

I heartily indorse this proposal, and request that the Executive be
authorized to appoint a preliminary commission of not more than seven
persons to consider carefully whether or not it is wise to hold such an
exposition, and if so, to outline a plan for the enterprise. I further
recommend that such preliminary commission serve without salary, except
as to their actual expenses, and that an appropriation be made to meet
such expenses. CONCLUSION.

I have thus, in a message compressed as much as the subjects will
permit, referred to many of the legislative needs of the country, with
the exceptions already noted. Speaking generally, the country is in a
high state of prosperity. There is every reason to believe that we are
on the eve of a substantial business expansion, and we have just
garnered a harvest unexampled in the market value of our agricultural
products. The high prices which such products bring mean great
prosperity for the farming community, but on the other hand they mean a
very considerably increased burden upon those classes in the community
whose yearly compensation does not expand with the improvement in
business and the general prosperity. Various reasons are given for the
high prices. The proportionate increase in the output of gold, which
to-day is the chief medium of exchange and is in some respects a measure
of value, furnishes a substantial explanation of at least a part of the
increase in prices. The increase in population and the more expensive
mode of living of the people, which have not been accompanied by a
proportionate increase in acreage production, may furnish a further
reason. It is well to note that the increase in the cost of living is
not confined to this country, but prevails the world over, and that
those who would charge increases in prices to the existing protective
tariff must meet the fact that the rise in prices has taken place almost
wholly in those products of the factory and farm in respect to which
there has been either no increase in the tariff or in many instances a
very considerable reduction.

***

State of the Union Address
William H. Taft
December 6, 1910

To the Senate and House of Representatives:

During the past year the foreign relations of the United States have
continued upon a basis of friendship and good understanding.

ARBITRATION.

The year has been notable as witnessing the pacific settlement of two
important international controversies before the Permanent Court of The
Hague.

The arbitration of the Fisheries dispute between the United States and
Great Britain, which has been the source of nearly continuous diplomatic
correspondence since the Fisheries Convention of 1818, has given an
award which is satisfactory to both parties. This arbitration is
particularly noteworthy not only because of the eminently just results
secured, but also because it is the first arbitration held under the
general arbitration treaty of April 4, 1908, between the United States
and Great Britain, and disposes of a controversy the settlement of which
has resisted every other resource of diplomacy, and which for nearly
ninety years has been the cause of friction between two countries whose
common interest lies in maintaining the most friendly and cordial
relations with each other.

The United States was ably represented before the tribunal. The
complicated history of the questions arising made the issue depend, more
than ordinarily in such cases, upon the care and skill with which our
case was presented, and I should be wanting in proper recognition of a
great patriotic service if I did not refer to the lucid historical
analysis of the facts and the signal ability and force of the
argument--six days in length--presented to the Court in support of our
case by Mr. Elihu Root. As Secretary of State, Mr. Root had given close
study to the intricate facts bearing on the controversy, and by
diplomatic correspondence had helped to frame the issues. At the
solicitation of the Secretary of State and myself, Mr. Root, though
burdened by his duties as Senator from New York, undertook the
preparation of the case as leading counsel, with the condition imposed
by himself that, in view of his position as Senator, he should not
receive any compensation.

The Tribunal constituted at The Hague by the Governments of the United
States and Venezuela has completed its deliberations and has rendered an
award in the case of the Orinoco Steamship Company against Venezuela.
The award may be regarded as satisfactory since it has, pursuant to the
contentions of the United States, recognized a number of important
principles making for a judicial attitude in the determining of
international disputes.

In view of grave doubts which had been raised as to the
constitutionality of The Hague Convention for the establishment of an
International Prize Court, now before the Senate for ratification,
because of that provision of the Convention which provides that there
may be an appeal to the proposed Court from the decisions of national
courts, this government proposed in an Identic Circular Note addressed
to those Powers who had taken part in the London Maritime Conference,
that the powers signatory to the Convention, if confronted with such
difficulty, might insert a reservation to the effect that appeals to the
International Prize Court in respect to decisions of its national
tribunals, should take the form of a direct claim for compensation; that
the proceedings thereupon to be taken should be in the form of a trial
de novo, and that judgment of the Court should consist of compensation
for the illegal capture, irrespective of the decision of the national
court whose judgment had thus been internationally involved. As the
result of an informal discussion it was decided to provide such
procedure by means of a separate protocol which should be ratified at
the same time as the Prize Court Convention itself.

Accordingly, the Government of the Netherlands, at the request of this
Government, proposed under date of May 24, 1910, to the powers signatory
to The Hague Convention, the negotiation of a supplemental protocol
embodying stipulations providing for this alternative procedure. It is
gratifying to observe that this additional protocol is being signed
without objection, by the powers signatory to the original convention,
and there is every reason to believe that the International Prize Court
will be soon established.

The Identic Circular Note also proposed that the International Prize
Court when established should be endowed with the functions of an
Arbitral Court of Justice under and pursuant to the recommendation
adopted by the last Hague Conference. The replies received from the
various powers to this proposal inspire the hope that this also may be
accomplished within the reasonably near future.

It is believed that the establishment of these two tribunals will go a
long way toward securing the arbitration of many questions which have
heretofore threatened and, at times, destroyed the peace of nations.

PEACE COMMISSION.

Appreciating these enlightened tendencies of modern times, the Congress
at its last session passed a law providing for the appointment of a
commission of five members "to be appointed by the President of the
United States to consider the expediency of utilizing existing
international agencies for the purpose of limiting the armaments of the
nations of the world by international agreement, and of constituting the
combined navies of the world an international force for the preservation
of universal peace, and to consider and report upon any other means to
diminish the expenditures of government for military purposes and to
lessen the probabilities of war."

I have not as yet made appointments to this Commission because I have
invited and am awaiting the expressions of foreign governments as to
their willingness to cooperate with us in the appointment of similar
commissions or representatives who would meet with our commissioners and
by joint action seek to make their work effective.

GREAT BRITAIN AND CANADA.

Several important treaties have been negotiated with Great Britain in
the past twelve months. A preliminary diplomatic agreement has been
reached regarding the arbitration of pecuniary claims which each
Government has against the other. This agreement, with the schedules of
claims annexed, will, as soon as the schedules are arranged, be
submitted to the Senate for approval.

An agreement between the United States and Great Britain with regard to
the location of the international boundary line between the United
States and Canada in Passamaquoddy Bay and to the middle of Grand Manan
Channel was reached in a Treaty concluded May 21, 1910, which has been
ratified by both Governments and proclaimed, thus making unnecessary the
arbitration provided for in the previous treaty of April 11, 1908.

The Convention concluded January 11, 1909, between the United States and
Great Britain providing for the settlement of international differences
between the United States and Canada including the apportionment between
the two countries of certain of the boundary waters and the appointment
of Commissioners to adjust certain other questions has been ratified by
both Governments and proclaimed.

The work of the International Fisheries Commission appointed in 1908,
under the treaty of April 11, 1908, between Great Britain and the United
States, has resulted in the formulation and recommendation of uniform
regulations governing the fisheries of the boundary waters of Canada and
the United States for the purpose of protecting and increasing the
supply of food fish in such waters. In completion of this work, the
regulations agreed upon require congressional legislation to make them
effective and for their enforcement in fulfillment of the treaty
stipulations. PORTUGAL.

In October last the monarchy in Portugal was overthrown, a provisional
Republic was proclaimed, and there was set up a de facto Government
which was promptly recognized by the Government of the United States for
purposes of ordinary intercourse pending formal recognition by this and
other Powers of the Governmental entity to be duly established by the
national sovereignty. LIBERIA.

A disturbance among the native tribes of Liberia in a portion of the
Republic during the early part of this year resulted in the sending,
under the Treaty of 1862, of an American vessel of war to the
disaffected district, and the Liberian authorities, assisted by the good
offices of the American Naval Officers, were able to restore order. The
negotiations which have been undertaken for the amelioration of the
conditions found in Liberia by the American Commission, whose report I
transmitted to Congress on March 25 last, are being brought to
conclusion, and it is thought that within a short time practical
measures of relief may be put into effect through the good offices of
this Government and the cordial cooperation of other governments
interested in Liberia's welfare.

THE NEAR EAST. TURKEY.

To return the visit of the Special Embassy announcing the accession of
His Majesty Mehemet V, Emperor of the Ottomans, I sent to Constantinople
a Special Ambassador who, in addition to this mission of ceremony, was
charged with the duty of expressing to the Ottoman Government the value
attached by the Government of the United States to increased and more
important relations between the countries and the desire of the United
States to contribute to the larger economic and commercial development
due to the new regime in Turkey.

The rapid development now beginning in that ancient empire and the
marked progress and increased commercial importance of Bulgaria,
Roumania, and Servia make it particularly opportune that the
possibilities of American commerce in the Near East should receive due
attention. MONTENEGRO.

The National Skoupchtina having expressed its will that the Principality
of Montenegro be raised to the rank of Kingdom, the Prince of Montenegro
on August 15 last assumed the title of King of Montenegro. It gave me
pleasure to accord to the new kingdom the recognition of the United
States.

THE FAR EAST.

The center of interest in Far Eastern affairs during the past year has
again been China.

It is gratifying to note that the negotiations for a loan to the Chinese
Government for the construction of the trunk railway lines from Hankow
southward to Canton and westward through the Yangtse Valley, known as
the Hukuang Loan, were concluded by the representatives of the various
financial groups in May last and the results approved by their
respective governments. The agreement, already initialed by the Chinese
Government, is now awaiting formal ratification. The basis of the
settlement of the terms of this loan was one of exact equality between
America, Great Britain, France, and Germany in respect to financing the
loan and supplying materials for the proposed railways and their future
branches.

The application of the principle underlying the policy of the United
States in regard to the Hukuang Loan, viz., that of the
internationalization of the foreign interest in such of the railways of
China as may be financed by foreign countries, was suggested on a
broader scale by the Secretary of State in a proposal for
internationalization and commercial neutralization of all the railways
of Manchuria. While the principle which led to the proposal of this
Government was generally admitted by the powers to whom it was
addressed, the Governments of Russia and Japan apprehended practical
difficulties in the execution of the larger plan which prevented their
ready adherence. The question of constructing the Chinchow-Aigun railway
by means of an international loan to China is, however, still the
subject of friendly discussion by the interested parties.

The policy of this Government in these matters has been directed by a
desire to make the use of American capital in the development of China
an instrument in the promotion of China's welfare and material
prosperity without prejudice to her legitimate rights as an independent
political power.

This policy has recently found further exemplification in the assistance
given by this Government to the negotiations between China and a group
of American bankers for a loan of $50,000,000 to be employed chiefly in
currency reform. The confusion which has from ancient times existed in
the monetary usages of the Chinese has been one of the principal
obstacles to commercial intercourse with that people. The United States
in its Treaty of 1903 with China obtained a pledge from the latter to
introduce a uniform national coinage, and the following year, at the
request of China, this Government sent to Peking a member of the
International Exchange Commission, to discuss with the Chinese
Government the best methods of introducing the reform. In 1908 China
sent a Commissioner to the United States to consult with American
financiers as to the possibility of securing a large loan with which to
inaugurate the new currency system, but the death of Their Majesties,
the Empress Dowager and the Emperor of China, interrupted the
negotiations, which were not resumed until a few months ago, when this
Government was asked to communicate to the bankers concerned the request
of China for a loan of $50,000,000 for the purpose under review. A
preliminary agreement between the American group and China has been made
covering the loan.

For the success of this loan and the contemplated reforms which are of
the greatest importance to the commercial interests of the United States
and the civilized world at large, it is realized that an expert will be
necessary, and this Government has received assurances from China that
such an adviser, who shall be an American, will be engaged.

It is a matter of interest to Americans to note the success which is
attending the efforts of China to establish gradually a system of
representative government. The provincial assemblies were opened in
October, 1909, and in October of the present year a consultative body,
the nucleus of the future national parliament, held its first session at
Peking.

The year has further been marked by two important international
agreements relating to Far Eastern affairs. In the Russo-Japanese
Agreement relating to Manchuria, signed July 4, 1910, this Government
was gratified to note an assurance of continued peaceful conditions in
that region and the reaffirmation of the policies with respect to China
to which the United States together with all other interested powers are
alike solemnly committed.

The treaty annexing Korea to the Empire of Japan, promulgated August 29,
1910, marks the final step in a process of control of the ancient empire
by her powerful neighbor that has been in progress for several years
past. In communicating the fact of annexation the Japanese Government
gave to the Government of the United States assurances of the full
protection of the rights of American citizens in Korea under the changed
conditions.

Friendly visits of many distinguished persons from the Far East have
been made during the year. Chief among these were Their Imperial
Highnesses Princes Tsai-tao and Tsai-Hsun of China; and His Imperial
Highness Prince Higashi Fushimi, and Prince Tokugawa, President of the
House of Peers of Japan. The Secretary of War has recently visited Japan
and China in connection with his tour to the Philippines, and a large
delegation of American business men are at present traveling in China.
This exchange of friendly visits has had the happy effect of even
further strengthening our friendly international relations.

LATIN AMERICA.

During the past year several of our southern sister Republics celebrated
the one hundredth anniversary of their independence. In honor of these
events, special embassies were sent from this country to Argentina,
Chile, and Mexico, where the gracious reception and splendid hospitality
extended them manifested the cordial relations and friendship existing
between those countries and the United States, relations which I am
happy to believe have never before been upon so high a plane and so
solid a basis as at present.

The Congressional commission appointed under a concurrent resolution to
attend the festivities celebrating the centennial anniversary of Mexican
independence, together with a special ambassador, were received with the
highest honors and with the greatest cordiality, and returned with the
report of the bounteous hospitality and warm reception of President Diaz
and the Mexican people, which left no doubt of the desire of the
immediately neighboring Republic to continue the mutually beneficial and
intimate relations which I feel sure the two governments will ever
cherish.

At the Fourth Pan-American Conference which met in Buenos Aires during
July and August last, after seven weeks of harmonious deliberation,
three conventions were signed providing for the regulation of
trade-marks, patents, and copyrights, which when ratified by the
different Governments, will go far toward furnishing to American
authors, patentees, and owners of trade-marks the protection needed in
localities where heretofore it has been either lacking or inadequate.
Further, a convention for the arbitration of pecuniary claims was signed
and a number of important resolutions passed. The Conventions will in
due course be transmitted to the Senate, and the report of the
Delegation of the United States will be communicated to the Congress for
its information. The special cordiality between representative men from
all parts of America which was shown at this Conference cannot fail to
react upon and draw still closer the relations between the countries
which took part in it.

The International Bureau of American Republics is doing a broad and
useful work for Pan American commerce and comity. Its duties were much
enlarged by the International Conference of American States at Buenos
Aires and its name was shortened to the more practical and expressive
term of Pan American Union. Located now in its new building, which was
specially dedicated April 26 of this year to the development of
friendship, trade and peace among the American nations, it has improved
instrumentalities to serve the twenty-two republics of this hemisphere.

I am glad to say that the action of the United States in its desire to
remove imminent danger of war between Peru and Ecuador growing out of a
boundary dispute, with the cooperation of Brazil and the Argentine
Republic as joint mediators with this Government, has already resulted
successfully in preventing war. The Government of Chile, while not one
of the mediators, lent effective aid in furtherance of a preliminary
agreement likely to lead on to an amicable settlement, and it is not
doubted that the good offices of the mediating Powers and the
conciliatory cooperation of the Governments directly interested will
finally lead to a removal of this perennial cause of friction between
Ecuador and Peru. The inestimable value of cordial cooperation between
the sister republics of America for the maintenance of peace in this
hemisphere has never been more clearly shown than in this mediation, by
which three American Governments have given to this hemisphere the honor
of first invoking the most far-reaching provisions of The Hague
Convention for the pacific settlement of international disputes.

There has been signed by the representatives of the United States and
Mexico a protocol submitting to the United States-Mexican Boundary
Commission (whose membership for the purpose of this case is to be
increased by the addition of a citizen of Canada) the question of
sovereignty over the Chamizal Tract which lies within the present
physical boundaries of the city of E1 Paso, Tex. The determination of
this question will remove a source of no little annoyance to the two
Governments.

The Republic of Honduras has for many years been burdened with a heavy
bonded debt held in Europe, the interest on which long ago fell in
arrears. Finally conditions were such that it became imperative to
refund the debt and place the finances of the Republic upon a sound
basis. Last year a group of American bankers undertook to do this and to
advance funds for railway and other improvements contributing directly
to the country's prosperity and commerce--an arrangement which has long
been desired by this Government. Negotiations to this end have been
under way for more than a year and it is now confidently believed that a
short time will suffice to conclude an arrangement which will be
satisfactory to the foreign creditors, eminently advantageous to
Honduras, and highly creditable to the judgment and foresight of the
Honduranean Government. This is much to be desired since, as recognized
by the Washington Conventions, a strong Honduras would tend immensely to
the progress and prosperity of Central America.

During the past year the Republic of Nicaragua has been the scene of
internecine struggle. General Zelaya, for seventeen years the absolute
ruler of Nicaragua, was throughout his career the disturber of Central
America and opposed every plan for the promotion of peace and friendly
relations between the five republics. When the people of Nicaragua were
finally driven into rebellion by his lawless exactions, he violated the
laws of war by the unwarranted execution of two American citizens who
had regularly enlisted in the ranks of the revolutionists. This and
other offenses made it the duty of the American Government to take
measures with a view to ultimate reparation and for the safeguarding of
its interests. This involved the breaking off of all diplomatic
relations with the Zelaya Government for the reasons laid down in a
communication from the Secretary of State, which also notified the
contending factions in Nicaragua that this Government would hold each to
strict accountability for outrages on the rights of American citizens.
American forces were sent to both coasts of Nicaragua to be in readiness
should occasion arise to protect Americans and their interests, and
remained there until the war was over and peace had returned to that
unfortunate country. These events, together with Zelaya's continued
exactions, brought him so clearly to the bar of public opinion that he
was forced to resign and to take refuge abroad.

In the above-mentioned communication of the Secretary of State to the
Charge d'Affaires of the Zelaya Government, the opinion was expressed
that the revolution represented the wishes of the majority of the
Nicaraguan people. This has now been proved beyond doubt by the fact
that since the complete overthrow of the Madriz Government and the
occupation of the capital by the forces of the revolution, all factions
have united to maintain public order and as a result of discussion with
an Agent of this Government, sent to Managua at the request of the
Provisional Government, comprehensive plans are being made for the
future welfare of Nicaragua, including the rehabilitation of public
credit. The moderation and conciliatory spirit shown by the various
factions give ground for the confident hope that Nicaragua will soon
take its rightful place among the law-abiding and progressive countries
of the world.

It gratifies me exceedingly to announce that the Argentine Republic some
months ago placed with American manufacturers a contract for the
construction of two battle-ships and certain additional naval equipment.
The extent of this work and its importance to the Argentine Republic
make the placing of the bid an earnest of friendly feeling toward the
United States.

TARIFF NEGOTIATIONS.

The new tariff law, in section 2, respecting the maximum and minimum
tariffs of the United States, which provisions came into effect on April
1, 1910, imposed upon the President the responsibility of determining
prior to that date whether or not any undue discrimination existed
against the United States and its products in any country of the world
with which we sustained commercial relations.

In the case of several countries instances of apparent undue
discrimination against American commerce were found to exist. These
discriminations were removed by negotiation. Prior to April 1, 1910,
when the maximum tariff was to come into operation with respect to
importations from all those countries in whose favor no proclamation
applying the minimum tariff should be issued by the President, one
hundred and thirty-four such proclamations were issued. This series of
proclamations embraced the entire commercial world, and hence the
minimum tariff of the United States has been given universal
application, thus testifying to the satisfactory character of our trade
relations with foreign countries.

Marked advantages to the commerce of the United States were obtained
through these tariff settlements. Foreign nations are fully cognizant of
the fact that under section 2 of the tariff act the President is
required, whenever he is satisfied that the treatment accorded by them
to the products of the United States is not such as to entitle them to
the benefits of the minimum tariff of the United States, to withdraw
those benefits by proclamation giving ninety days' notice, after which
the maximum tariff will apply to their dutiable products entering the
United States. In its general operation this section of the tariff law
has thus far proved a guaranty of continued commercial peace, although
there are unfortunately instances where foreign governments deal
arbitrarily with American interests within their jurisdiction in a
manner injurious and inequitable.

The policy of broader and closer trade relations with the Dominion of
Canada which was initiated in the adjustment of the maximum and minimum
provisions of the Tariff Act of August, 1909, has proved mutually
beneficial. It justifies further efforts for the readjustment of the
commercial relations of the two countries so that their commerce may
follow the channels natural to contiguous countries and be commensurate
with the steady expansion of trade and industry on both sides of the
boundary line. The reciprocation on the part of the Dominion Government
of the sentiment which was expressed by this Government was followed in
October by the suggestion that it would be glad to have the
negotiations, which had been temporarily suspended during the summer,
resumed. In accordance with this suggestion the Secretary of State, by
my direction, dispatched two representatives of the Department of State
as special commissioners to Ottawa to confer with representatives of the
Dominion Government. They were authorized to take such steps for
formulating a reciprocal trade agreement as might be necessary and to
receive and consider any propositions which the Dominion Government
might care to submit.

Pursuant to the instructions issued conferences were held by these
commissioners with officials of the Dominion Government at Ottawa in the
early part of November.

The negotiations were conducted on both sides in a spirit of mutual
accommodation. The discussion of the common commercial interests of the
two countries had for its object a satisfactory basis for a trade
arrangement which offers the prospect of a freer interchange for the
products of the United States and of Canada. The conferences were
adjourned to be resumed in Washington in January, when it is hoped that
the aspiration of both Governments for a mutually advantageous measure
of reciprocity will be realized.

FOSTERING FOREIGN TRADE.

All these tariff negotiations, so vital to our commerce and industry,
and the duty of jealously guarding the equitable and just treatment of
our products, capital, and industry abroad devolve upon the Department
of State.

The Argentine battle-ship contracts, like the subsequent important one
for Argentine railway equipment, and those for Cuban Government vessels,
were secured for our manufacturers largely through the good offices of
the Department of State.

The efforts of that Department to secure for citizens of the United
States equal opportunities in the markets of the world and to expand
American commerce have been most successful. The volume of business
obtained in new fields of competition and upon new lines is already very
great and Congress is urged to continue to support the Department of
State in its endeavors for further trade expansion.

Our foreign trade merits the best support of the Government and the most
earnest endeavor of our manufacturers and merchants, who, if they do not
already in all cases need a foreign market, are certain soon to become
dependent on it. Therefore, now is the time to secure a strong position
in this field.

AMERICAN BRANCH BANKS ABROAD.

I cannot leave this subject without emphasizing the necessity of such
legislation as will make possible and convenient the establishment of
American banks and branches of American banks in foreign countries. Only
by such means can our foreign trade be favorably financed, necessary
credits be arranged, and proper avail be made of commercial
opportunities in foreign countries, and most especially in Latin
America.

AID TO OUR FOREIGN MERCHANT MARINE.

Another instrumentality indispensable to the unhampered and natural
development of American commerce is merchant marine. All maritime and
commercial nations recognize the importance of this factor. The greatest
commercial nations, our competitors, jealously foster their merchant
marine. Perhaps nowhere is the need for rapid and direct mail, passenger
and freight communication quite so urgent as between the United States
and Latin America. We can secure in no other quarter of the world such
immediate benefits in friendship and commerce as would flow from the
establishment of direct lines Of communication with the countries of
Latin America adequate to meet the requirements of a rapidly increasing
appreciation of the reciprocal dependence of the countries of the
Western Hemisphere upon each other's products, sympathies and
assistance.

I alluded to this most important subject in my last annual message; it
has often been before you and I need not recapitulate the reasons for
its recommendation. Unless prompt action be taken the completion of the
Panama Canal will find this the only great commercial nation unable to
avail in international maritime business of this great improvement in
the means of the world's commercial intercourse.

Quite aside from the commercial aspect, unless we create a merchant
marine, where can we find the seafaring population necessary as a
natural naval reserve and where could we find, in case of war, the
transports and subsidiary vessels without which a naval fleet is arms
without a body? For many reasons I cannot too strongly urge upon the
Congress the passage of a measure by mail subsidy or other subvention
adequate to guarantee the establishment and rapid development of an
American merchant marine, and the restoration of the American flag to
its ancient place upon the seas.

Of course such aid ought only to be given under conditions of publicity
of each beneficiary's business and accounts which would show that the
aid received was needed to maintain the trade and was properly used for
that purpose.

FEDERAL PROTECTION TO ALIENS.

With our increasing international intercourse, it becomes incumbent upon
me to repeat more emphatically than ever the recommendation which I made
in my Inaugural Address that Congress shall at once give to the Courts
of the United States jurisdiction to punish as a crime the violation of
the rights of aliens secured by treaty with the United States, in order
that the general government of the United States shall be able, when
called upon by a friendly nation, to redeem its solemn promise by treaty
to secure to the citizens or subjects of that nation resident in the
United States, freedom from violence and due process of law in respect
to their life, liberty and property.

MERIT SYSTEM FOR DIPLOMATIC AND CONSULAR SERVICE.

I also strongly commend to the favorable action of the Congress the
enactment of a law applying to the diplomatic and consular service the
principles embodied in Section 1753 of the Revised Statutes of the
United States, in the Civil Service Act of January 16, 1883, and the
Executive Orders of June 27, 1906, and of November 26, 1909. The
excellent results which have attended the partial application of Civil
Service principles to the diplomatic and consular services are an
earnest of the benefit to be wrought by a wider and more permanent
extension of those principles to both branches of the foreign service.
The marked improvement in the consular service during the four years
since the principles of the Civil Service Act were applied to that
service in a limited way, and the good results already noticeable from a
similar application of civil service principles to the diplomatic
service a year ago, convince me that the enactment into law of the
general principles of the existing executive regulations could not fail
to effect further improvement of both branches of the foreign service,
offering as it would by its assurance of permanency of tenure and
promotion on merit, an inducement for the entry of capable young men
into the service and an incentive to those already in to put forth their
best efforts to attain and maintain that degree of efficiency which the
interests of our international relations and commerce demand.

GOVERNMENT OWNERSHIP OF OUR EMBASSY AND LEGATION PREMISES.

During many years past appeals have been made from time to time to
Congress in favor of Government ownership of embassy and legation
premises abroad. The arguments in favor of such ownership have been many
and oft repeated and are well known to the Congress. The acquisition by
the Government of suitable residences and offices for its diplomatic
officers, especially in the capitals of the Latin-American States and of
Europe, is so important and necessary to an improved diplomatic service
that I have no hesitation in urging upon the Congress the passage of
some measure similar to that favorably reported by the House Committee
on Foreign Affairs on February 14, 1910 (Report No. 438), that would
authorize the gradual and annual acquisition of premises for diplomatic
use.

The work of the Diplomatic Service is devoid of partisanship; its
importance should appeal to every American citizen and should receive
the generous consideration of the Congress.

TREASURY DEPARTMENT.

ESTIMATES FOR NEXT YEAR'S EXPENSES.

Every effort has been made by each department chief to reduce the
estimated cost of his department for the ensuing fiscal year ending June
30, 1912. I say this in order that Congress may understand that these
estimates thus made present the smallest sum which will maintain the
departments, bureaus, and offices of the Government and meet its other
obligations under existing law, and that a cut of these estimates would
result in embarrassing the executive branch of the Government in the
performance of its duties. This remark does not apply to the river and
harbor estimates, except to those for expenses of maintenance and the
meeting of obligations under authorized contracts, nor does it apply to
the public building bill nor to the navy building program. Of course, as
to these Congress could withhold any part or all of the estimates for
them without interfering with the discharge of the ordinary obligations
of the Government or the performance of the functions of its
departments, bureaus, and offices.

A FIFTY-TWO MILLION CUT.

The final estimates for the year ending June 30, 1912, as they have been
sent to the Treasury, on November 29 of this year, for the ordinary
expenses of the Government, including those for public buildings, rivers
and harbors, and the navy building program, amount to $630,494,013.12.
This is $52,964,887.36 less than the appropriations for the fiscal year
ending June 30, 1911. It is $16,883,153.44 less than the total
estimates, including supplemental estimates submitted to Congress by the
Treasury for the year 1911, and is $5,574,659.39 less than the original
estimates submitted by the Treasury for 1911.

These figures do not include the appropriations for the Panama Canal,
the policy in respect to which ought to be, and is, to spend as much
each year as can be economically and effectively expended in order to
complete the Canal as promptly as possible, and, therefore, the ordinary
motive for cutting down the expense of the Government does not apply to
appropriations for this purpose. It will be noted that the estimates for
the Panama Canal for the ensuing year are more than fifty-six millions
of dollars, an increase of twenty millions over the amount appropriated
for this year--a difference due to the fact that the estimates for 1912
include something over nineteen millions for the fortification of the
Canal. Against the estimated expenditures of $630,494,013.12, the
Treasury has estimated receipts for next year $680,000,000, making a
probable surplus of ordinary receipts over ordinary expenditures of
about $50,000,000.

A table showing in detail the estimates and the comparisons referred to
follows.

TYPICAL ECONOMIES.

The Treasury Department is one of the original departments of the
Government. With the changes in the monetary system made from time to
time and with the creation of national banks, it was thought necessary
to organize new bureaus and divisions which were added in a somewhat
haphazard way and resulted in a duplication of duties which might well
now be ended. This lack of system and economic coordination has
attracted the attention of the head of that Department who has been
giving his time for the last two years, with the aid of experts and by
consulting his bureau chiefs, to its reformation. He has abolished four
hundred places in the civil service without at all injuring its
efficiency. Merely to illustrate the character of the reforms that are
possible, I shall comment on some of the specific changes that are being
made, or ought to be made by legislative aid.

AUDITING SYSTEM.

The auditing system in vogue is as old as the Government and the methods
used are antiquated. There are six Auditors and seven Assistant Auditors
for the nine departments, and under the present system the only function
which the Auditor of a department exercises is to determine, on accounts
presented by disbursing officers, that the object of the expenditure was
within the law and the appropriation made by Congress for the purpose on
its face, and that the calculations in the accounts are correct. He does
not examine the merits of the transaction or determine the
reasonableness of the price paid for the articles purchased, nor does he
furnish any substantial check upon disbursing officers and the heads of
departments or bureaus with sufficient promptness to enable the
Government to recoup itself in full measure for unlawful expenditure. A
careful plan is being devised and will be presented to Congress with the
recommendation that the force of auditors and employees under them be
greatly reduced, thereby effecting substantial economy. But this economy
will be small compared with the larger economy that can be effected by
consolidation and change of methods. The possibilities in this regard
have been shown in the reduction of expenses and the importance of
methods and efficiency in the office of the Auditor for the Post Office
Department, who, without in the slightest degree impairing the
comprehensiveness and efficiency of his work, has cut down the expenses
of his office $120,000 a year.

Statement of estimates of appropriations for the fiscal years 1912 and
1911, and of appropriations for 1911, showing increases and decreases. -
Final Estimates for 1912 as of November 29 - Original Estimates
submitted by the Treasury for 1911 - Total Estimates for 1911 including
supplementals - Appropriations for 1911 - Increase (+) and decrease (-),
1912 estimates against 1911 total estimates - Increase (+) and decrease
(-), 1912 estimates against 1911 total appropriations - Increase (+) and
decrease (-), 1911 estimates against 1911 total appropriations

Legislature - $13,426,805.73 - $13,169,679.70 - $13,169,679.70 -
$12,938,048.00 - + $257,126.03 - + $488,757.73 - + $231,631.70

Executive - 998,170.00 - 472,270.00 - 722,270.00 - 870,750.00 - +
275,900.00 - + 127,420.00 - - 148,480.00

State Department: - 4,875,576.41 - 4,875,301.41 - 4,749,801.41 -
5,046,701.41 - + 125,775.00 - - 171,125.00 - - 296,900.00

TREASURY DEPARTMENT: Treasury Department proper - 68,735,451.00 -
69,865,240.00 - 70,393,543.75 - 69,973,434.61 - - 1,658,092.75 - -
1,237,983.61 - + 420,109.14

Public buildings and works - 11,864,545.60 - 6,198,365.60 - 7,101,465.60
- 5,565,164.00 - + 4,763,080.00 - + 6,299,381.60 - + 1,536,301.60

Territorial governments - 202,150.00 - 287,350.00 - 292,350.00 -
282,600.00 - - 90,200.00 - - 80,450.00 - + 9,750.00

Independent offices - 2,638,695.12 - 2,400,695.12 - 2,492,695.12 -
2,128,695.12 - + 146,000.00 - + 510,000.00 - + 364,000.00

District of Columbia - 13,602,785.90 - 11,884,928.49 - 12,108,878.49 -
11,440,346.99 - + 1,492,907.41 - + 2,162,439.91 - + 668,532.50

WAR DEPARTMENT: War Department proper - 120,104,260.12 - 124,165,656.28
- 125,717,204.77 - 122,322,178.12 - - 5,612,944.65 - - 2,217,918.00 - +
3,395,026.65

Rivers and harbors - 28,232,438.00 - 28,232,465.00 - 28,232,465.00 -
49,390,541.50 - - 27.00 - -21,158,103.50 - -21,158,076.50

NAVY DEPARTMENT: Navy Department proper - 116,101,730.24 -
117,029,914.38 - 119,768,860.83 - 119,596,870.46 - - 3,667,130.59 - -
3,495,140.22 - + 171,990.37

New navy building program - 12,840,428.00 - 12,844,122.00 -
12,844,122.00 - 14,790,122.00 - - 3,694.00 - - 1,949,694.00 - -
1,946,000.00

Interior Department - 189,151,875.00 - 191,224,182.90 - 193,948,582.02 -
214,754,278.00 - - 4,796,707.02 - -25,602,403.00 - -20,805,698.98

Post-Office Department proper - 1,697,490.00 - 1,695,690.00 -
1,695,690.00 - 2,085,005.33 - + 1,800.00 - - 387,515.33 - - 389,315.33

Deficiency in postal revenues - --------------- - 10,634,122.63 -
10,634,122.63 - 10,634,122.63 - -10,634,122.65 - -10,634,122.63 -
-----------------

Department of Agriculture - 19,681,066.00 - 17,681,136.00 -
17,753,931.24 - 17,821,836.00 - + 1,927,134.76 - + 1,859,230.00 - -
67,904.76

Department of Commerce and

Labor - 16,276,970.00 - 14,187,913.00 - 15,789,271.00 - 14,169,969.32 -
+ 487,699.00 - + 2,107,000.68 - + 1,619,301.68

Department of Justice - 10,063,576.00 - 9,518,640.00 - 9,962,233.00 -
9,648,237.99 - + 101,343.00 - + 415,338.01 - + 313,995.01 -

***

State of the Union Address
William H. Taft
December 5, 1911

PART I

This message is the first of several which I shall send to Congress
during the interval between the opening of its regular session and its
adjournment for the Christmas holidays. The amount of information to be
communicated as to the operations of the Government, the number of
important subjects calling for comment by the Executive, and the
transmission to Congress of exhaustive reports of special commissions,
make it impossible to include in one message of a reasonable length a
discussion of the topics that ought to be brought to the attention of
the National Legislature at its first regular session.

THE ANTI-TRUST LAW-THE SUPREME COURT DECISIONS.

In May last the Supreme Court handed down decisions in the suits in
equity brought by the United States to enjoin the further maintenance of
the Standard Oil Trust and of the American Tobacco Trust, and to secure
their dissolution. The decisions are epoch-making and serve to advise
the business world authoritatively of the scope and operation of the
anti-trust act of 1890. The decisions do not depart in any substantial
way from the previous decisions of the court in construing and applying
this important statute, but they clarify those decisions by further
defining the already admitted exceptions to the literal construction of
the act. By the decrees, they furnish a useful precedent as to the
proper method of dealing with the capital and property of illegal
trusts. These decisions suggest the need and wisdom of additional or
supplemental legislation to make it easier for the entire business
community to square with the rule of action and legality thus finally
established and to preserve the benefit, freedom, and spur of reasonable
competition without loss of real efficiency or progress.

NO CHANGE IN THE RULE OF DECISION-MERELY IN ITS FORM OF EXPRESSION.

The statute in its first section declares to be illegal "every contract,
combination in the form of trust or otherwise, or conspiracy, in
restraint of trade or commerce among the several States or with foreign
nations," and in the second, declares guilty of a misdemeanor "every
person who shall monopolize or attempt to monopolize or combine or
conspire with any other person to monopolize any part of the trade or
commerce of the several States or with foreign nations."

In two early cases, where the statute was invoked to enjoin a
transportation rate agreement between interstate railroad companies, it
was held that it was no defense to show that the agreement as to rates
complained of was reasonable at common law, because it was said that the
statute was directed against all contracts and combinations in restraint
of trade whether reasonable at common law or not. It was plain from the
record, however, that the contracts complained of in those cases would
not have been deemed reasonable at common law. In subsequent cases the
court said that the statute should be given a reasonable construction
and refused to include within its inhibition, certain contractual
restraints of trade which it denominated as incidental or as indirect.

These cases of restraint of trade that the court excepted from the
operation of the statute were instances which, at common law, would have
been called reasonable. In the Standard Oil and Tobacco cases,
therefore, the court merely adopted the tests of the common law, and in
defining exceptions to the literal application of the statute, only
substituted for the test of being incidental or indirect, that of being
reasonable, and this, without varying in the slightest the actual scope
and effect of the statute. In other words, all the cases under the
statute which have now been decided would have been decided the same way
if the court had originally accepted in its construction the rule at
common law.

It has been said that the court, by introducing into the construction of
the statute common-law distinctions, has emasculated it. This is
obviously untrue. By its judgment every contract and combination in
restraint of interstate trade made with the purpose or necessary effect
of controlling prices by stifling competition, or of establishing in
whole or in part a monopoly of such trade, is condemned by the statute.
The most extreme critics can not instance a case that ought to be
condemned under the statute which is not brought within its terms as
thus construed.

The suggestion is also made that the Supreme Court by its decision in
the last two cases has committed to the court the undefined and
unlimited discretion to determine whether a case of restraint of trade
is within the terms of the statute. This is wholly untrue. A reasonable
restraint of trade at common law is well understood and is clearly
defined. It does not rest in the discretion of the court. It must be
limited to accomplish the purpose of a lawful main contract to which, in
order that it shall be enforceable at all, it must be incidental. If it
exceed the needs of that contract, it is void.

The test of reasonableness was never applied by the court at common law
to contracts or combinations or conspiracies in restraint of trade whose
purpose was or whose necessary effect would be to stifle competition, to
control prices, or establish monopolies. The courts never assumed power
to say that such contracts or combinations or conspiracies might be
lawful if the parties to them were only moderate in the use of the power
thus secured and did not exact from the public too great and exorbitant
prices. It is true that many theorists, and others engaged in business
violating the statute, have hoped that some such line could be drawn by
courts; but no court of authority has ever attempted it. Certainly there
is nothing in the decisions of the latest two cases from which such a
dangerous theory of judicial discretion in enforcing this statute can
derive the slightest sanction.

FORCE AND EFFECTIVENESS OF STATUTE A MATTER OF GROWTH.

We have been twenty-one years making this statute effective for the
purposes for which it was enacted. The Knight case was discouraging and
seemed to remit to the States the whole available power to attack and
suppress the evils of the trusts. Slowly, however, the error of that
judgment was corrected, and only in the last three or four years has the
heavy hand of the law been laid upon the great illegal combinations that
have exercised such an absolute dominion over many of our industries.
Criminal prosecutions have been brought and a number are pending, but
juries have felt averse to convicting for jail sentences, and judges
have been most reluctant to impose such sentences on men of respectable
standing in society whose offense has been regarded as merely statutory.
Still, as the offense becomes better understood and the committing of it
partakes more of studied and deliberate defiance of the law, we can be
confident that juries will convict individuals and that jail sentences
will be imposed.

THE REMEDY IN EQUITY BY DISSOLUTION.

In the Standard Oil case the Supreme and Circuit Courts found the
combination to be a monopoly of the interstate business of refining,
transporting, and marketing petroleum and its products, effected and
maintained through thirty-seven different corporations, the stock of
which was held by a New Jersey company. It in effect commanded the
dissolution of this combination, directed the transfer and pro rata
distribution by the New Jersey company of the stock held by it in the
thirty-seven corporations to and among its stockholders; and the
corporations and individual defendants were enjoined from conspiring or
combining to restore such monopoly; and all agreements between the
subsidiary corporations tending to produce or bring about further
violations of the act were enjoined.

In the Tobacco case, the court found that the individual defendants,
twenty-nine in number, had been engaged in a successful effort to
acquire complete dominion over the manufacture, sale, and distribution
of tobacco in this country and abroad, and that this had been done by
combinations made with a purpose and effect to stifle competition,
control prices, and establish a monopoly, not only in the manufacture of
tobacco, but also of tin-foil and licorice used in its manufacture and
of its products of cigars, cigarettes, and snuffs. The tobacco suit
presented a far more complicated and difficult case than the Standard
Oil suit for a decree which would effectuate the will of the court and
end the violation of the statute. There was here no single holding
company as in the case of the Standard Oil Trust. The main company was
the American Tobacco Company, a manufacturing, selling, and holding
company. The plan adopted to destroy the combination and restore
competition involved the redivision of the capital and plants of the
whole trust between some of the companies constituting the trust and new
companies organized for the purposes of the decree and made parties to
it, and numbering, new and old, fourteen.

SITUATION AFTER READJUSTMENT.

The American Tobacco Company (old), readjusted capital, $92, 000,000;
the Liggett & Meyers Tobacco Company (new), capital, $67,000,000; the P.
Lorillard Company (new), capital, $47,000,000; and the R. J. Reynolds
Tobacco Company (old), capital, $7,525,000, are chiefly engaged in the
manufacture and sale of chewing and smoking tobacco and cigars. The
former one tinfoil company is divided into two, one of $825,000 capital
and the other of $400,000. The one snuff company is divided into three
companies, one with a capital Of $15,000,000, another with a capital of
$8,000,000, and a third with a capital of $8,000,000. The licorice
companies are two one with a capital Of $5,758,300 and another with a
capital of $200,000. There is, also, the British-American Tobacco
Company, a British corporation, doing business abroad with a capital Of
$26,000,000, the Porto Rican Tobacco Company, with a capital of
$1,800,000, and the corporation of United Cigar Stores, with a capital
of $9,000,000.

Under this arrangement, each of the different kinds of business will be
distributed between two or more companies with a division of the
prominent brands in the same tobacco products, so as to make competition
not only possible but necessary. Thus the smoking-tobacco business of
the country is divided so that the present independent companies have
21-39 per cent, while the American Tobacco Company will have 33-08 per
cent, the Liggett & Meyers 20.05 per cent, the Lorillard Company 22.82
per cent, and the Reynolds Company 2.66 per cent. The stock of the other
thirteen companies, both preferred and common, has been taken from the
defendant American Tobacco Company and has been distributed among its
stockholders. All covenants restricting competition have been declared
null and further performance of them has been enjoined. The preferred
stock of the different companies has now been given voting power which
was denied it under the old organization. The ratio of the preferred
stock to the common was as 78 to 40. This constitutes a very decided
change in the character of the ownership and control of each company.

In the original suit there were twenty-nine defendants who were charged
with being the conspirators through whom the illegal combination
acquired and exercised its unlawful dominion. Under the decree these
defendants. will hold amounts of stock in the various distributee
companies ranging from 41 per cent as a maximum to 28.5 per cent as a
minimum, except in the case of one small company, the Porto Rican
Tobacco Company, in which they will hold 45 per cent. The twenty-nine
individual defendants are enjoined for three years from buying any stock
except from each other, and the group is thus prevented from extending
its control during that period. All parties to the suit, and the new
companies who are made parties are enjoined perpetually from in any way
effecting any combination between any of the companies in violation of
the statute by way of resumption of the old trust. Each of the fourteen
companies is enjoined from acquiring stock in any of the others. All
these companies are enjoined from having common directors or officers,
or common buying or selling agents, or common offices, or lending money
to each other.

SIZE OF NEW COMPANIES.

Objection was made by certain independent tobacco companies that this
settlement was unjust because it left companies with very large capital
in active business, and that the settlement that would be effective to
put all on an equality would be a division of the capital and plant of
the trust into small fractions in amount more nearly equal to that of
each of the independent companies. This contention results from a
misunderstanding of the anti-trust law and its purpose. It is not
intended thereby to prevent the accumulation of large capital in
business enterprises in which such a combination can secure reduced cost
of production, sale, and distribution. It is directed against such an
aggregation of capital only when its purpose is that of stifling
competition, enhancing or controlling prices, and establishing a
monopoly. If we shall have by the decree defeated these purposes and
restored competition between the large units into which the capital and
plant have been divided, we shall have accomplished the useful purpose
of the statute.

CONFISCATION NOT THE PURPOSE OF THE STATUTE.

It is not the purpose of the statute to confiscate the property and
capital of the offending trusts. Methods of punishment by fine or
imprisonment of the individual offenders, by fine of the corporation or
by forfeiture of its goods in transportation, are provided, but the
proceeding in equity is a specific remedy to stop the operation of the
trust by injunction and prevent the future use of the plant and capital
in violation of the statute.

EFFECTIVENESS OF DECREE.

I venture to say that not in the history of American law has a decree
more effective for such a purpose been entered by a court than that
against the Tobacco Trust. As Circuit judge Noyes said in his judgment
approving the decree:

"The extent to which it has been necessary to tear apart this
combination and force it into new forms with the attendant burdens ought
to demonstrate that the Federal anti-trust statute is a drastic statute
which accomplishes effective results; which so long as it stands on the
statute books must be obeyed, and which can not be disobeyed without
incurring far-reaching penalties. And, on the other hand, the successful
reconstruction of this organization should teach that the effect of
enforcing this statute is not to destroy, but to reconstruct; not to
demolish, but to re-create in accordance with the conditions which the
Congress has declared shall exist among the people of the United
States."

COMMON STOCK OWNERSHIP.

It has been assumed that the present pro rata and common ownership in
all these companies by former stockholders of the trust would insure a
continuance of the same old single control of all the companies into
which the trust has by decree been disintegrated. This is erroneous and
is based upon the assumed inefficacy and innocuousness of judicial
injunctions. The companies are enjoined from cooperation or combination;
they have different managers, directors, purchasing and sales agents. If
all or many of the numerous stockholders, reaching into the thousands,
attempt to secure concerted action of the companies with a view to the
control of the market, their number is so large that such an attempt
could not well be concealed, and its prime movers and all its
participants would be at once subject to contempt proceedings and
imprisonment of a summary character. The immediate result of the present
situation will necessarily be activity by all the companies under
different managers, and then competition must follow, or there will be
activity by one company and stagnation by another. Only a short time
will inevitably lead to a change in ownership of the stock, as all
opportunity for continued cooperation must disappear. Those critics who
speak of this disintegration in the trust as a mere change of garments
have not given consideration to the inevitable working of the decree and
understand little the personal danger of attempting to evade or set at
naught the solemn injunction of a court whose object is made plain by
the decree and whose inhibitions are set forth with a detail and
comprehensiveness.

VOLUNTARY REORGANIZATIONS OF OTHER TRUSTS AT HAND.

The effect of these two decisions has led to decrees dissolving the
combination of manufacturers of electric lamps, a southern wholesale
grocers' association, an interlocutory decree against the Powder Trust
with directions by the circuit court compelling dissolution, and other
combinations of a similar history are now negotiating with the
Department of justice looking to a disintegration by decree and
reorganization in accordance with law. It seems possible to bring about
these reorganizations without general business disturbance.

MOVEMENT FOR REPEAL OF THE ANTI-TRUST LAW.

But now that the anti-trust act is seen to be effective for the
accomplishment of the purpose of its enactment, we are met by a cry from
many different quarters for its repeal. It is said to be obstructive of
business progress to be an attempt to restore old-fashioned methods of
destructive competition between small units, and to make impossible
those useful combinations of capital and the reduction of the cost of
production that are essential to continued prosperity and normal growth.

In the recent decisions the Supreme Court makes clear that there is
nothing in the statute which condemns combinations of capital or mere
bigness of plant organized to secure economy in production and a
reduction of its cost. It is only when the purpose or necessary effect
of the organization and maintenance of the combination or the
aggregation of immense size are the stifling of competition, actual and
potential, and the enhancing of prices and establishing a monopoly, that
the statute is violated. Mere size is no sin against the law. The
merging of two or more business plants necessarily eliminates
competition between the units thus combined, but this elimination is in
contravention of the statute only when the combination is made for
purpose of ending this particular competition in order to secure control
of, and enhance, prices and create a monopoly.

LACK OF DEFINITENESS IN THE STATUTE.

The complaint is made of the statute that it is not sufficiently
definite in its description of that which is forbidden, to enable
business men to avoid its violation. The suggestion is, that we may have
a combination of two corporations, which may run on for years, and that
subsequently the Attorney General may conclude that it was a violation
of the statute, and that which was supposed by the combiners to be
innocent then turns out to be a combination in violation of the statute.
The answer to this hypothetical case is that when men attempt to amass
such stupendous capital as will enable them to suppress competition,
control prices and establish a monopoly, they know the purpose of their
acts. Men do not do such a thing without having it clearly in mind. If
what they do is merely for the purpose of reducing the cost of
production, without the thought of suppressing competition by use of the
bigness of the plant they are creating, then they can not be convicted
at the time the union is made, nor can they be convicted later, unless
it happen that later on they conclude to suppress competition and take
the usual methods for doing so, and thus establish for themselves a
monopoly. They can, in such a case, hardly complain if the motive which
subsequently is disclosed is attributed by the court to the original
combination.

NEW REMEDIES SUGGESTED.

Much is said of the repeal of this statute and of constructive
legislation intended to accomplish the purpose and blaze a clear path
for honest merchants and business men to follow. It may be that such a
plan will be evolved, but I submit that the discussions which have been
brought out in recent days by the fear of the continued execution of the
anti-trust law have produced nothing but glittering generalities and
have offered no line of distinction or rule of action as definite and as
clear as that which the Supreme Court itself lays down in enforcing the
statute.

SUPPLEMENTAL LEGISLATION NEEDED--NOT REPEAL OR AMENDMENT.

I see no objection-and indeed I can see decided advantages-in the
enactment of a law which shall describe and denounce methods of
competition which are unfair and are badges of the unlawful purpose
denounced in the anti-trust law. The attempt and purpose to suppress a
competitor by underselling him at a price so unprofitable as to drive
him out of business, or the making of exclusive contracts with customers
under which they are required to give up association with other
manufacturers, and numerous kindred methods for stifling competition and
effecting monopoly, should be described with sufficient accuracy in a
criminal statute on the one hand to enable the Government to shorten its
task by prosecuting single misdemeanors instead of an entire conspiracy,
and, on the other hand, to serve the purpose of pointing out more in
detail to the business community what must be avoided.

FEDERAL INCORPORATION RECOMMENDED.

In a special message to Congress on January 7, 1910, I ventured to point
out the disturbance to business that would probably attend the
dissolution of these offending trusts. I said:

"But such an investigation and possible prosecution of corporations
whose prosperity or destruction affects the comfort not only of
stockholders but of millions of wage earners, employees, and associated
tradesmen must necessarily tend to disturb the confidence of the
business community, to dry up the now flowing sources of capital from
its places of hoarding, and produce a halt in our present prosperity
that will cause suffering and strained circumstances among the innocent
many for the faults of the guilty few. The question which I wish in this
message to bring clearly to the consideration and discussion of Congress
is whether, in order to avoid such a possible business danger, something
can not be done by which these business combinations may be offered a
means, without great financial disturbance, of changing the character,
organization, and extent of their business into one within the lines of
the law under Federal control and supervision, securing compliance with
the anti-trust statute.

"Generally, in the industrial combinations called 'trusts,' the
principal business is the sale of goods in many States and in foreign
markets; in other words, the interstate and foreign business far exceeds
the business done in any one State. This fact will justify the Federal
Government in granting a Federal charter to such a combination to make
and sell in interstate and foreign commerce the products of useful
manufacture under such limitations as will secure a compliance with the
anti-trust law. It is possible so to frame a statute that while it
offers protection to a Federal company against harmful, vexatious, and
unnecessary invasion by the States, it shall subject it to reasonable
taxation and control by the States with respect to its purely local
business. * * *

"Corporations organized under this act should be prohibited from
acquiring and holding stock in other corporations (except for special
reasons, upon approval by the proper Federal authority), thus avoiding
the creation under national auspices of the holding company with
subordinate corporations in different States, which has been such an
effective agency in the creation of the great trusts and monopolies.

"If the prohibition of the anti-trust act against combinations in
restraint of trade is to be effectively enforced, it is essential that
the National Government shall provide for the creation of national
corporations to carry on a legitimate business throughout the United
States. The conflicting laws of the different States of the Union with
respect to foreign corporations make it difficult, if not impossible,
for one corporation to comply with their requirements so as to carry on
business in a number of different States."

I renew the recommendation of the enactment of a general law providing
for the voluntary formation of corporations to engage in trade and
commerce among the States and with foreign nations. Every argument which
was then advanced for such a law, and every explanation which was at
that time offered to possible objections, have been confirmed by our
experience since the enforcement of the antitrust, statute has resulted
in the actual dissolution of active commercial organizations.

It is even more manifest now than it was then that the denunciation of
conspiracies in restraint of trade should not and does not mean the
denial of organizations large enough to be intrusted with our interstate
and foreign trade. It has been made more clear now than it was then that
a purely negative statute like the anti-trust law may well be
supplemented by specific provisions for the building up and regulation
of legitimate national and foreign commerce.

GOVERNMENT ADMINISTRATIVE EXPERTS NEEDED TO AID COURTS IN TRUST
DISSOLUTIONS.

The drafting of the decrees in the dissolution of the present trusts,
with a view to their reorganization into legitimate corporations, has
made it especially apparent that the courts are not provided with the
administrative machinery to make the necessary inquiries preparatory to
reorganization, or to pursue such inquiries, and they should be
empowered to invoke the aid of the Bureau of Corporations in determining
the suitable reorganization of the disintegrated parts. The circuit
court and the Attorney General were greatly aided in framing the decree
in the Tobacco Trust dissolution by an expert from the Bureau of
Corporations.

FEDERAL CORPORATION COMMISSION PROPOSED.

I do not set forth in detail the terms and sections of a statute which
might supply the constructive legislation permitting and aiding the
formation of combinations of capital into Federal corporations. They
should be subject to rigid rules as to their organization and procedure,
including effective publicity, and to the closest supervision as to the
issue of stock and bonds by an executive bureau or commission in the
Department of Commerce and Labor, to which in times of doubt they might
well submit their proposed plans for future business. It must be
distinctly understood that incorporation under Federal law could not
exempt the company thus formed and its incorporators and managers from
prosecution under the anti-trust law for subsequent illegal conduct, but
the publicity of its procedure and the opportunity for frequent
consultation with the bureau or commission in charge of the
incorporation as to the legitimate purpose of its transactions would
offer it as great security against successful prosecutions for
violations of the law as would be practical or wise.

Such a bureau or commission might well be invested also with the duty
already referred to, of aiding courts in the dissolution and recreation
of trusts within the law. It should be an executive tribunal of the
dignity and power of the Comptroller of the Currency or the Interstate
Commerce Commission, which now exercise supervisory power over important
classes of corporations under Federal regulation.

The drafting of such a Federal incorporation law would offer ample
opportunity to prevent many manifest evils in corporate management
to-day, including irresponsibility of control in the hands of the few
who are not the real owners.

INCORPORATION VOLUNTARY.

I recommend that the Federal charters thus to be granted shall be
voluntary, at least until experience justifies mandatory provisions. The
benefit to be derived from the operation of great businesses under the
protection of such a charter would attract all who are anxious to keep
within the lines of the law. Other large combinations that fail to take
advantage of the Federal incorporation will not have a right to complain
if their failure is ascribed to unwillingness to submit their
transactions to the careful official scrutiny, competent supervision,
and publicity attendant upon the enjoyment of such a charter.

ONLY SUPPLEMENTAL LEGISLATION NEEDED.

The opportunity thus suggested for Federal incorporation, it seems tome,
is suitable constructive legislation needed to facilitate the squaring
Of great industrial enterprises to the rule of action laid down by the
anti-trust law. This statute as construed by the Supreme Court must
continue to be the line of distinction for legitimate business. It must
be enforced, unless we are to banish individualism from all business and
reduce it to one common system of regulation or control of prices like
that which now prevails with respect to public utilities, and which when
applied to all business would be a long step toward State socialism.

IMPORTANCE OF THE ANTI-TRUST ACT.

The anti-trust act is the expression of the effort of a freedom-loving
people to preserve equality of opportunity. It is the result of the
confident determination of such a people to maintain their future growth
by preserving uncontrolled and unrestricted the enterprise of the
individual, his industry, his ingenuity, his intelligence, and his
independent courage.

For twenty years or more this statute has been upon the statute book.
All knew its general purpose and approved. Many of its violators were
cynical over its assumed impotence. It seemed impossible of enforcement.
Slowly the mills of the courts ground, and only gradually did the
majesty of the law assert itself. Many of its statesmen-authors died
before it became a living force, and they and others saw the evil grow
which they had hoped to destroy. Now its efficacy is seen; now its power
is heavy; now its object is near achievement. Now we hear the call for
its repeal on the plea that it interferes with business prosperity, and
we are advised in most general terms, how by some other statute and in
some other way the evil we are just stamping out can be cured, if we
only abandon this work of twenty years and try another experiment for
another term of years.

It is said that the act has not done good. Can this be said in the face
of the effect of the Northern Securities decree? That decree was in no
way so drastic or inhibitive in detail as either the Standard Oil decree
or the Tobacco decree; but did it not stop for all time the then
powerful movement toward the control of all the railroads of the country
in a single hand? Such a one-man power could not have been a healthful
influence in the Republic, even though exercised under the general
supervision of an interstate commission.

Do we desire to make such ruthless combinations and monopolies lawful?
When all energies are directed, not toward the reduction of the cost of
production for the public benefit by a healthful competition, but toward
new ways and means for making permanent in a few hands the absolute
control of the conditions and prices prevailing in the whole field of
industry, then individual enterprise and effort will be paralyzed and
the spirit of commercial freedom will be dead.

PART II.

The relations of the United States with other countries have continued
during the past twelve months upon a basis of the usual good will and
friendly intercourse. ARBITRATION.

The year just passed marks an important general movement on the part of
the Powers for broader arbitration. In the recognition of the manifold
benefits to mankind in the extension of the policy of the settlement of
international disputes by arbitration rather than by war, and in
response to a widespread demand for an advance in that direction on the
part of the people of the United States and of Great Britain and of
France, new arbitration treaties were negotiated last spring with Great
Britain and France, the terms of which were de signed, as expressed in
the preamble of these treaties, to extend the scope and obligations of
the policy of arbitration adopted in our present treaties with those
Governments To pave the way for this treat with the United States, Great
Britain negotiated an important modification in its alliance with Japan,
and the French Government also expedited the negotiations with signal
good will. The new treaties have been submitted to the Senate and are
awaiting its advice and consent to their ratification. All the
essentials of these important treaties have long been known, and it is
my earnest hope that they will receive prompt and favorable action.

CLAIM OF ALSOP & CO. SETTLED.

I am glad to report that on July 5 last the American claim of Alsop &
Co. against the Government of Chile was finally disposed of by the
decision of His Britannic Majesty George V, to whom, as amiable
compositeur, the matter had been referred for determination. His Majesty
made an award of nearly $1,000,000 to the claimants, which was promptly
paid by Chile. The settlement of this controversy has happily eliminated
from the relations between the Republic of Chile and the United States
the only question which for two decades had given the two foreign
offices any serious concern and makes possible the unobstructed
development of the relations of friendship which it has been the aim of
this Government in every possible way to further and cultivate.

ARBITRATIONS--PANAMA AND COSTA RICA--COLOMBIA AND HAITI.

In further illustration of the practical and beneficent application of
the principle of arbitration and the underlying broad spirit of
conciliation, I am happy to advert to the part of the United States in
facilitating amicable settlement of disputes which menaced the peace
between Panama and Costa Rica and between Haiti and the Dominican
Republic.

Since the date of their independence, Colombia and Costa Rica had been
seeking a solution of a boundary dispute, which came as an heritage from
Colombia to the new Republic of Panama, upon its beginning life as an
independent nation. Although the disputants had submitted this question
for decision to the President of France under the terms of an
arbitration treaty, the exact interpretation of the provisions of the
award rendered had been a matter of serious disagreement between the two
countries, both contending for widely different lines even under the
terms of the decision. Subsequently and since 1903 this boundary
question had been the subject of fruitless diplomatic negotiations
between the parties. In January, 1910, at the request of both
Governments the agents representing them met in conference at the
Department of State and subsequently concluded a protocol submitting
this long-pending controversy to the arbitral judgment of the Chief
justice of the United States, who consented to act in this capacity. A
boundary commission, according to the international agreement, has now
been appointed, and it is expected that the arguments will shortly
proceed and that this long-standing dispute will be honorably and
satisfactorily terminated.

Again, a few months ago it appeared that the Dominican Republic and
Haiti were about to enter upon hostilities because of complications
growing out of an acrimonious boundary dispute which the efforts of many
years had failed to solve. The Government of the United States, by a
friendly interposition of good offices, succeeded in prevailing upon the
parties to place their reliance upon some form of pacific settlement.
Accordingly, on the friendly suggestion of this Government, the two
Governments empowered commissioners to meet at Washington in conference
at the State Department in order to arrange the terms of submission to
arbitration of the boundary controversy.

CHAMIZAL ARBITRATION NOT SATISFACTORY.

Our arbitration of the Chamizal boundary question with Mexico was
unfortunately abortive, but with the earnest efforts on the part of both
Governments which its importance commands, it is felt that an early
practical adjustment should prove possible.

LATIN AMERICA. VENEZUELA.

During the past year the Republic of Venezuela celebrated the one
hundredth anniversary of its independence. The United States sent, in
honor of this event, a special embassy to Caracas, where the cordial
reception and generous hospitality shown it were most gratifying as a
further proof of the good relations and friendship existing between that
country and the United States. MEXICO.

The recent political events in Mexico received attention from this
Government because of the exceedingly delicate and difficult situation
created along our southern border and the necessity for taking measures
properly to safeguard American interests. The Government of the United
States, in its desire to secure a proper observance and enforcement of
the so-called neutrality statutes of the Federal Government, issued
directions to the appropriate officers to exercise a diligent and
vigilant regard for the requirements of such rules and laws. Although a
condition of actual armed conflict existed, there was no official
recognition of belligerency involving the technical neutrality
obligations of international law.

On the 6th of March last, in the absence of the Secretary of State, I
had a personal interview with Mr. Wilson, the ambassador of the United
States to Mexico, in which he reported to me that the conditions in
Mexico were much more critical than the press dispatches disclosed; that
President Diaz was on a volcano of popular uprising; that the small
outbreaks which had occurred were only symptomatic of the whole
condition; that a very large per cent of the people were in sympathy
with the insurrection; that a general explosion was probable at any
time, in which case he feared that the 40,000 or more American residents
in Mexico might be assailed, and that the very large American
investments might be injured or destroyed.

After a conference with the Secretary of War and the Secretary of the
Navy, I thought it wise to assemble an Army division of full strength at
San Antonio, Tex., a brigade of three regiments at Galveston, a brigade
of Infantry in the Los Angeles district of southern California, together
with a squadron of battleships and cruisers and transports at Galveston,
and a small squadron of ships at San Diego. At the same time, through
our representative at the City of Mexico, I expressed to President Diaz
the hope that no apprehensions might result from unfounded conjectures
as to these military maneuvers, and assured him that they had no
significance which should cause concern to his Government.

The mobilization was effected with great promptness, and on the 15th of
March, through the Secretary of War and the Secretary of the Navy, in a
letter addressed to the Chief of Staff, I issued the following
instructions: It seems my duty as Commander in Chief to place troops in
sufficient number where, if Congress shall direct that they enter Mexico
to save American lives and property, an effective movement may be
promptly made. Meantime, the movement of the troops to Texas and
elsewhere near the boundary, accompanied with sincere assurances of the
utmost goodwill toward the present Mexican Government and with larger
and more frequent patrols along the border to prevent insurrectionary
expeditions from American soil, will hold up the hands of the existing
Government and will have a healthy moral effect to prevent attacks upon
Americans and their property in any subsequent general internecine
strife. Again, the sudden mobilization of a division of troops has been
a great test of our Army and full of useful instruction, while the
maneuvers that are thus made possible can occupy the troops and their
officers to great advantage.

The assumption by the press that I contemplate intervention on Mexican
soil to protect American lives or property is of course gratuitous,
because I seriously doubt whether I have such authority under any
circumstances, and if I had I would not exercise it without express
congressional approval. Indeed, as you know, I have already declined,
without Mexican consent, to order a troop of Cavalry to protect the
breakwater we are constructing just across the border in Mexico at the
mouth of the Colorado River to save the Imperial Valley, although the
insurrectos had scattered the Mexican troops and were taking our horses
and supplies and frightening our workmen away. My determined purpose,
however, is to be in a position so that when danger to American lives
and property in Mexico threatens and the existing Government is rendered
helpless by the insurrection, I can promptly execute congressional
orders to protect them, with effect.

Meantime, I send you this letter, through the Secretary, to call your
attention to some things in connection with the presence of the division
in the Southwest which have doubtless occurred to you, but which I wish
to emphasize.

In the first place, I want to make the mobilization a first-class
training for the Army, and I wish you would give your time and that of
the War College to advising and carrying out maneuvers of a useful
character, and plan to continue to do this during the next three months.
By that time we may expect that either Ambassador Wilson's fears will
have been realized and chaos and its consequences have ensued, or that
the present Government of Mexico will have so readjusted matters as to
secure tranquillity-a result devoutly to be wished. The troops can then
be returned to their posts. I understood from you in Washington that
Gen. Aleshire said that you could probably meet all the additional
expense of this whole movement out of the present appropriations if the
troops continue in Texas for three months. I sincerely hope this is so.
I observe from the newspapers that you have no blank cartridges, but I
presume that this is an error, or that it will be easy to procure those
for use as soon as your maneuvers begin.

Second. Texas is a State ordinarily peaceful, but you can not put 20,000
troops into it without running some risk of a collision between the
people of that State, and especially the Mexicans who live in Texas near
the border and who sympathize with the insurrectos, and the Federal
soldiers. For that reason I beg you to be as careful as you can to
prevent friction of any kind. We were able in Cuba, with the army of
pacification there of something more than 5,000 troops, to maintain them
for a year without any trouble, and I hope you can do the same thing in
Texas. Please give your attention to this, and advise all the officers
in command of the necessity for very great circumspection in this
regard.

Third. One of the great troubles in the concentration of troops is the
danger of disease, and I suppose that you have adopted the most modern
methods for preventing and, if necessary, for stamping out epidemics.
That is so much a part of a campaign that it hardly seems necessary for
me to call attention to it.

Finally, I wish you to examine the question of the patrol of the border
and put as many troops on that work as is practicable, and more than are
now engaged in it, in order to prevent the use of our borderland for the
carrying out of the insurrection. I have given assurances to the Mexican
ambassador on this point.

I sincerely hope that this experience will always be remembered by the
Army and Navy as a useful means of education, and I should be greatly
disappointed if it resulted in any injury or disaster to our forces from
any cause. I have taken a good deal of responsibility in ordering this
mobilization, but I am ready to answer for it if only you and those
under you use the utmost care to avoid the difficulties which I have
pointed out.

You may have a copy of this letter made and left with Gen. Carter and
such other generals in command as you may think wise and necessary to
guide them in their course, but to be regarded as confidential. I am
more than happy to here record the fact that all apprehensions as to the
effect of the presence of so large a military force in Texas proved
groundless; no disturbances occurred; the conduct of the troops was
exemplary and the public reception and treatment of them was all that
could have been desired, and this notwithstanding the presence of a
large number of Mexican refugees in the border territory.

From time to time communications were received from Ambassador Wilson,
who had returned to Mexico, confirming the view that the massing of
American troops in the neighborhood had had good effect. By dispatch of
April 3, 1911, the ambassador said: The continuing gravity of the
situation here and the chaos that would ensue should the constitutional
authorities be eventually overthrown, thus greatly increasing the danger
to which American lives and property are already subject, confirm the
wisdom of the President in taking those military precautions which,
making every allowance for the dignity and the sovereignty of a friendly
state, are due to our nationals abroad.

Charged as I am with the responsibility of safeguarding these lives and
property, I am bound to say to the department that our military
dispositions on the frontier have produced an effective impression on
the Mexican mind and may, at any moment, prove to be the only guaranties
for the safety of our nationals and their property. If it should
eventuate that conditions here require more active measures by the
President and Congress, sporadic attacks might be made upon the lives
and property of our nationals, but the ultimate result would be order
and adequate protection. The insurrection continued and resulted In
engagements between the regular Mexican troops and the insurgents, and
this along the border, so that in several instances bullets from the
contending forces struck American citizens engaged in their lawful
occupations on American soil.

Proper protests were made against these invasions of American rights to
the Mexican authorities. On April 17, 1911, I received the following
telegram from the governor of Arizona: As a result of to-day's fighting
across the international line, but within gunshot range of the heart of
Douglas, five Americans wounded on this side of the line. Everything
points to repetition of these casualties on to-morrow, and while the
Federals seem disposed to keep their agreement not to fire into Douglas,
the position of the insurrectionists is such that when fighting occurs
on the east and southeast of the intrenchments people living in Douglas
are put in danger of their lives. In my judgment radical measures are
needed to protect our innocent people, and if anything can be done to
stop the fighting at Agua Prieta the situation calls for such action. It
is impossible to safeguard the people of Douglas unless the town be
vacated. Can anything be done to relieve situation, now acute? After a
conference with the Secretary of State, the following telegram was sent
to Governor Sloan, on April IS, 1911 9 11, and made public: Your
dispatch received. Have made urgent demand upon Mexican Government to
issue instructions to prevent firing across border by Mexican federal
troops, and am waiting reply. Meantime I have sent direct warning to the
Mexican and insurgent forces near Douglas. I infer from your dispatch
that both parties attempt to heed the warning, but that in the strain
and exigency of the contest wild bullets still find their way into
Douglas. The situation might justify me in ordering our troops to cross
the border and attempt to stop the fighting, or to fire upon both
combatants from the American side. But if I take this step, I must face
the possibility of resistance and greater bloodshed, and also the danger
of having our motives misconstrued and misrepresented, and of thus
inflaming Mexican popular indignation against many thousand Americans
now in Mexico and jeopardizing their lives and property. The pressure
for general intervention under such conditions it might not be
practicable to resist. It is impossible to foresee or reckon the
consequences of such a course, and we must use the greatest
self-restraint to avoid it. Pending my urgent representation to the
Mexican Government, I can not therefore order the troops at Douglas to
cross the border, but I must ask you and the local authorities, in case
the same danger recurs, to direct the people of Douglas to place
themselves where bullets can not reach them and thus avoid casualty. I
am loath to endanger Americans in Mexico, where they are necessarily
exposed, by taking a radical step to prevent injury to Americans on our
side of the border who can avoid it by a temporary inconvenience. I am
glad to say that no further invasion of American rights of any
substantial character occurred.

The presence of a large military and naval force available for prompt
action, near the Mexican border, proved to be most fortunate under the
somewhat trying conditions presented by this invasion of American rights
Had no movement theretofore taken place, and because of these events it
had been necessary then to bring about the mobilization, it must have
had sinister significance. On the other hand, the presence of the troops
before and at the time of the unfortunate killing and wounding of
American citizens at Douglas, made clear that the restraint exercised by
our Government in regard to this Occurrence was not due to lack of force
or power to deal with it promptly and aggressively, but was due to a
real desire to use every means possible to avoid direct intervention in
the affairs of our neighbor whose friendship we valued and were most
anxious to retain.

The policy and action of this Government were based upon an earnest
friendliness for the Mexican people as a whole, and it is a matter of
gratification to note that this attitude of strict impartiality as to
all factions in Mexico and of sincere friendship for the neighboring
nation, without regard for party allegiance, has been generally
recognized and has resulted in an even closer and more sympathetic
understanding between the two Republics and a warmer regard one for the
other. Action to suppress violence and restore tranquillity throughout
the Mexican Republic was of peculiar interest to this Government, in
that it concerned the safeguarding of American life and property in that
country. The Government of the United States had occasion to accord
permission for the passage of a body of Mexican rurales through Douglas,
Arizona, to Tia Juana, Mexico, for the suppression of general
lawlessness which had for some time existed in the region of northern
Lower California. On May 25, 1911, President Diaz resigned, Senor de la
Barra was chosen provisional President. Elections for President and Vice
President were thereafter held throughout the Republic, and Senor
Francisco I. Madero was formally declared elected on October 15 to the
chief magistracy. On November 6 President Madero entered upon the duties
of his office.

Since the inauguration of President Madero a plot has been unearthed
against the present Government, to begin a new insurrection. Pursuing
the same consistent policy which this administration has adopted from
the beginning, it directed an investigation into the conspiracy charged,
and this investigation has resulted in the indictment of Gen. Bernardo
Reyes and others and the seizure of a number of officers and men and
horses and accoutrements assembled upon the soil of Texas for the
purpose of invading Mexico. Similar proceedings had been taken during
the insurrection against the Diaz Government resulting in the
indictments and prosecution of persons found to be engaged in violating
the neutrality laws of the United States in aid of that uprising.

The record of this Government in respect of the recognition of
constituted authority in Mexico therefore is clear.

CENTRAL AMERICA-HONDURAS AND NICARAGUA TREATIES PROPOSED.

As to the situation in Central America, I have taken occasion in the
past to emphasize most strongly the importance that should be attributed
to the consummation of the conventions between the Republics of
Nicaragua and of Honduras and this country, and I again earnestly
recommend that the necessary advice and consent of the Senate be
accorded to these treaties, which will make it possible for these
Central American Republics to enter upon an era of genuine economic
national development. The Government of Nicaragua which has already
taken favorable action on the convention, has found it necessary,
pending the exchange of final ratifications, to enter into negotiations
with American bankers for the purpose of securing a temporary loan to
relieve the present financial tension. III connection with this
temporary loan and in the hope of consummating, through the ultimate
operation of the convention, a complete and lasting economic
regeneration, the Government of Nicaragua has also decided to engage an
American citizen as collector general of customs. The claims commission
on which the services of two American citizens have been sought, and the
work of the American financial adviser should accomplish a lasting good
of inestimable benefit to the prosperity, commerce, and peace of the
Republic. In considering the ratification of the conventions with
Nicaragua and Honduras, there rests with the United States the heavy
responsibility of the fact that their rejection here might destroy the
progress made and consign the Republics concerned to still deeper
submergence in bankruptcy, revolution, and national jeopardy. PANAMA.

Our relations with the Republic of Panama, peculiarly important, due to
mutual obligations and the vast interests created by the canal, have
continued in the usual friendly manner, and we have been glad to make
appropriate expression of our attitude of sympathetic interest in the
endeavors of our neighbor in undertaking the development of the rich
resources of the country. With reference to the internal political
affairs of the Republic, our obvious concern is in the maintenance of
public peace and constitutional order, and the fostering of the general
interests created by the actual relations of the two countries, without
the manifestation of any preference for the success of either of the
political parties.

THE PAN AMERICAN UNION.

The Pan American Union, formerly known as the Bureau of American
Republics, maintained by the joint contributions of all the American
nations, has during the past year enlarged its practical work as an
international organization, and continues to prove its usefulness as an
agency for the mutual development of commerce, better acquaintance, and
closer intercourse between the United States and her sister American
republics.

THE FAR EAST.

THE CHINESE LOANS.

The past year has been marked in our relations with China by the
conclusion of two important international loans, one for the
construction of the Hukuang railways, the other for carrying out of the
currency reform to which China was pledged by treaties with the United
States, Great Britain, and Japan, of which mention was made in my last
annual message.

It will be remembered that early in 1909 an agreement was consummated
among British, French, and German financial groups whereby they proposed
to lend the Chinese Government funds for the construction of railways in
the Provinces of Hunan and Hupeh, reserving for their nationals the
privilege of engineering the construction of the lines and of furnishing
the materials required for the work. After negotiations with the
Governments and groups concerned an agreement was reached whereby
American, British, French, and German nationals should participate upon
equal terms in this important and useful undertaking. Thereupon the
financial groups, supported by their respective Governments, began
negotiations with the Chinese Government which terminated in a loan to
China Of $30,000,000, with the privilege of increasing the amount to
$50,000,000. The cooperative construction of these trunk lines should be
of immense advantage, materially and otherwise, to China and should
greatly facilitate the development of the bountiful resources of the
Empire. On the other hand, a large portion of these funds is to be
expended for materials, American products having equal preference with
those of the other three lending nations, and as the contract provides
for branches and extensions subsequently to be built on the same terms
the opportunities for American materials will reach considerable
proportions.

Knowing the interest of the United States in the reform of Chinese
currency, the Chinese Government, in the autumn of 1910 sought the
assistance of the American Government to procure funds with which to
accomplish that all-important reform. In the course of the subsequent
negotiations there was combined with the proposed currency loan one for
certain industrial developments in Manchuria, the two loans aggregating
the sum Of $50,000,000. While this was originally to be solely an
American enterprise, the American Government, consistently with its
desire to secure a sympathetic and practical cooperation of the great
powers toward maintaining the principle of equality of opportunity and
the administrative integrity of China, urged the Chinese Government to
admit to participation in the currency loan the associates of the
American group in the Hukuang loan. While of immense importance in
itself, the reform contemplated in making this loan is but preliminary
to other and more comprehensive fiscal reforms which will be of
incalculable benefit to China and foreign interests alike, since they
will strengthen the Chinese Empire and promote the rapid development of
international trade.

NEUTRAL FINANCIAL ADVISER.

When these negotiations were begun, it was understood that a financial
adviser was to be employed by China in connection with the reform, and
in order that absolute equality in all respects among the lending
nations might be scrupulously observed, the American Government proposed
the nomination of a neutral adviser, which was agreed to by China and
the other Governments concerned. On September 28, 1911, Dr. Vissering,
president of the Dutch Java Bank and a financier of wide experience in
the Orient, was recommended to the Chinese Government for the post of
monetary adviser.

Especially important at the present, when the ancient Chinese Empire is
shaken by civil war incidental to its awakening to the many influences
and activities of modernization, are the cooperative policy of good
understanding which has been fostered by the international projects
referred to above and the general sympathy of view among all the Powers
interested in the Far East. While safeguarding the interests of our
nationals, this Government is using its best efforts in continuance of
its traditional policy of sympathy and friendship toward the Chinese
Empire and its people, with the confident hope for their economic and
administrative development, and with the constant disposition to
contribute to their welfare in all proper ways consistent with an
attitude of strict impartiality as between contending factions.

For the first time in the history of the two countries, a Chinese
cruiser, the Haichi, under the command of Admiral Ching, recently
visited New York, where the officers and men were given a cordial
welcome.

NEW JAPANESE TREATY.

The treaty of commerce and navigation between the United States and
Japan, signed in 1894, would by a strict interpretation of its
provisions have terminated on July 17, 1912. Japan's general treaties
with the other powers, however, terminated in 1911, and the Japanese
Government expressed an earnest desire to conduct the negotiations for a
new treaty with the United States simultaneously with its negotiations
with the other powers. There were a number of important questions
involved in the treaty, including the immigration of laborers, revision
of the customs tariff, and the right of Americans to hold real estate in
Japan. The United States consented to waive all technicalities and to
enter at once upon negotiations for a new treaty on the understanding
that there should be a continuance throughout the, life of the treaty of
the same effective measures for the restriction of immigration of
laborers to American territory which had been in operation with entire
satisfaction to both Governments since 1908. The Japanese Government
accepted this basis of negotiation, and a new treaty was quickly
concluded, resulting in a highly satisfactory settlement of the other
questions referred to.

A satisfactory adjustment has also been effected of the questions
growing out of the annexation of Korea by Japan.

The recent visit of Admiral Count Togo to the United States as the
Nation's guest afforded a welcome opportunity to demonstrate the
friendly feeling so happily existing between the two countries. SIAM.

There has been a change of sovereigns in Siam and the American minister
at Bangkok was accredited in a special capacity to represent the United
States at the coronation ceremony of the new King.

EUROPE AND THE NEAR EAST.

In Europe and the Near East, during the past twelve-month, there has
been at times considerable political unrest. The Moroccan question,
which for some months was the cause of great anxiety, happily appears to
have reached a stage at which it need no longer be regarded with
concern. The Ottoman Empire was occupied for a period by strife in
Albania and is now at war with Italy. In Greece and the Balkan countries
the disquieting potentialities of this situation have been more or less
felt. Persia has been the scene of a long internal struggle. These
conditions have been the cause of uneasiness in European diplomacy, but
thus far without direct political concern to the United States.

In the war which unhappily exists between Italy and Turkey this
Government has no direct political interest, and I took occasion at the
suitable time to issue a proclamation of neutrality in that conflict. At
the same time all necessary steps have been taken to safeguard the
personal interests of American citizens and organizations in so far as
affected by the war.

COMMERCE WITH THE NEAR EAST.

In spite of the attendant economic uncertainties and detriments to
commerce, the United States has gained markedly in its commercial
standing with certain of the nations of the Near East. Turkey,
especially, is beginning to come into closer relations with the United
States through the new interest of American manufacturers and exporters
in the possibilities of those regions, and it is hoped that foundations
are being laid for a large and mutually beneficial exchange of
commodities between the two countries. This new interest of Turkey in
American goods is indicated by the fact that a party of prominent
merchants from a large city in Turkey recently visited the United States
to study conditions of manufacture and export here, and to get into
personal touch with American merchants, with a view to cooperating more
intelligently in opening up the markets of Turkey and the adjacent
countries to our manufactures. Another indication of this new interest
of America in the commerce of the Near East is the recent visit of a
large party of American merchants and manufacturers to central and
eastern Europe, where they were entertained by prominent officials and
organizations of the large cities, and new bonds of friendship and
understanding were established which can not but lead to closer and
greater commercial interchange.

CORONATION OF KING GEORGE V.

The 22d of June of the present year marked the coronation of His
Britannic Majesty King George V. In honor of this auspicious occasion I
sent a special embassy to London. The courteous and cordial welcome
extended to this Government's representatives by His Majesty and the
people of Great Britain has further emphasized the strong bonds of
friendship happily existing between the two nations.

SETTLEMENT OF LONG-STANDING DIFFERENCES WITH GREAT BRITAIN.

As the result of a determined effort on the part of both Great Britain
and the United States to settle all of their outstanding differences a
number of treaties have been entered into between the two countries in
recent years, by which nearly all of the unsettled questions between
them of any importance have either been adjusted by agreement or
arrangements made for their settlement by arbitration. A number of the
unsettled questions referred to consist of pecuniary claims presented by
each country against the other, and in order that as many of these
claims as possible should be settled by arbitration a special agreement
for that purpose was entered into between the two Governments on the
18th day of August, 1910, in accordance with Article 11 of the general
arbitration treaty with Great Britain of April 4, 19o8. Pursuant to the
provisions of this special agreement a schedule of claims has already
been agreed upon, and the special agreement, together with this
schedule, received the approval of the Senate when submitted to it for
that purpose at the last session of Congress. Negotiations between the
two Governments for the preparation of an additional schedule of claims
are already well advanced, and it is my intention to submit such
schedule as soon as it is agreed upon to the Senate for its approval, in
order that the arbitration proceedings may be undertaken at an early
date. In this connection the attention of Congress is particularly
called to the necessity for an appropriation to cover the expense
incurred in submitting these claims to arbitration.

PRESENTATION TO GERMANY OF REPLICA OF VON STEUBEN STATUE.

In pursuance of the act of Congress, approved June 23, 1910, the
Secretary of State and the joint Committee on the Library entered into a
contract with the sculptor, Albert Jaegers, for the execution of a
bronze replica of the statue of Gen. von Steuben erected in Washington,
for presentation to His Majesty the German Emperor and the German nation
in recognition of the gift of the statue of Frederick the Great made by
the Emperor to the people of the United States.

The presentation was made on September 2 last by representatives whom I
commissioned as the special mission of this Government for the purpose.

The German Emperor has conveyed to me by telegraph, on his own behalf
and that of the German people, an expression of appreciative thanks for
this action of Congress. RUSSIA.

By direction of the State Department, our ambassador to Russia has
recently been having a series of conferences with the minister of
foreign affairs of Russia, with a view to securing a clearer
understanding and construction of the treaty of 1832 between Russia and
the United States and the modification of any existing Russian
regulations which may be found to interfere in any way with the full
recognition of the rights of American citizens under this treaty. I
believe that the Government of Russia is addressing itself seriously to
the need of changing the present practice under the treaty and that
sufficient progress has been made to warrant the continuance of these
conferences in the hope that there may soon be removed any justification
of the complaints of treaty violation now prevalent in this country.

I expect that immediately after the Christmas recess I shall be able to
make a further communication to Congress on this subject. LIBERIA.

Negotiations for the amelioration of conditions found to exist in
Liberia by the American commission, undertaken through the Department of
State, have been concluded and it is only necessary for certain
formalities to be arranged in securing the loan which it is hoped will
place that republic on a practical financial and economic footing.

RECOGNITION OF PORTUGUESE REPUBLIC.

The National Constituent Assembly, regularly elected by the vote of the
Portuguese people, having on June 19 last unanimously proclaimed a
republican form of government, the official recognition of the
Government of the United States was given to the new Republic in the
afternoon of the same day.

SPITZBERGEN ISLANDS.

Negotiations for the betterment of conditions existing in the
Spitzbergen Islands and the adjustment of conflicting claims of American
citizens and Norwegian subjects to lands in that archipelago are still
in progress.

INTERNATIONAL CONVENTIONS AND CONFERENCES.

INTERNATIONAL PRIZE COURT.

The supplementary protocol to The he Hague convention for the
establishment of an international prize court, mentioned in my last
annual message, embodying stipulations providing for an alternative
procedure which would remove the constitutional objection to that part
of The Hague convention which provides that there may be an appeal to
the proposed court from the decisions of national courts, has received
the signature of the governments parties to the original convention and
has been ratified by the Government of the United States, together with
the prize court convention.

The deposit of the ratifications with the Government of the Netherlands
awaits action by the powers on the declaration, signed at London on
February 26, 1909 of the rules of international law to be recognized
within the meaning of article 7 of The Hague convention for the
establishment of an International Prize Court.

FUR-SEAL TREATY.

The fur-seal controversy, which for nearly twenty-five years has been
the source of serious friction between the United States and the powers
bordering upon the north Pacific Ocean, whose subjects have been
permitted to engage in pelagic sealing against the fur-seal herds having
their breeding grounds within the jurisdiction of the United States, has
at last been satisfactorily adjusted by the conclusion of the north
Pacific sealing convention entered into between the United States, Great
Britain, Japan, and Russia on the 7th of July last. This convention is a
conservation measure of very great importance, and if it is carried out
in the spirit of reciprocal concession and advantage upon which it is
based, there is every reason to believe that not only will it result in
preserving the fur-seal herds of the north Pacific Ocean and restoring
them to their former value for the purposes of commerce, but also that
it will afford a permanently satisfactory settlement of a question the
only other solution of which seemed to be the total destruction of the
fur seals. In another aspect, also, this convention is of importance in
that it furnishes an illustration of the feasibility of securing a
general international game law for the protection of other mammals of
the sea, the preservation of which is of importance to all the nations
of the world.

LEGISLATION NECESSARY.

The attention of Congress is especially called to the necessity for
legislation on the part of the United States for the purpose of
fulfilling the obligations assumed under this convention, to which the
Senate gave its advice and consent on the 24th day of July last.

PROTECTION OF INDUSTRIAL PROPERTY UNION.

The conference of the International Union for the Protection of
Industrial Property, which, under the authority of Congress, convened at
Washington on May 16, 1911, closed its labors on June 2, 1911, by the
signature of three acts, as follows:

(I) A convention revising the Paris convention of March 20, 1883, for
the protection of industrial property, as modified by the additional act
signed at Brussels on December 14, 1900;

(2) An arrangement to replace the arrangement signed at Madrid on April
14, 1891 for the international registration of trade-marks, and the
additional act with regard thereto signed at Brussels on December 14,
1900; and

(3) An arrangement to replace the arrangement signed at Madrid on April
14, 1891, relating to the repression of false indication of production
of merchandise.

The United States is a signatory of the first convention only, and this
will be promptly submitted to the Senate.

INTERNATIONAL OPIUM COMMISSION.

In a special message transmitted to the Congress on the 11th of January,
1911, in which I concurred in the recommendations made by the Secretary
of State in regard to certain needful legislation for the control of our
interstate and foreign traffic in opium and other menacing drugs, I
quoted from my annual message of December 7, 1909, in which I announced
that the results of the International Opium Commission held at Shanghai
in February, 1909, at the invitation of the United States, had been laid
before this Government; that the report of that commission showed that
China was making remarkable progress and admirable efforts toward the
eradication of the opium evil; that the interested governments had not
permitted their commercial interests to prevent their cooperation in
this reform; and, as a result of collateral investigations of the opium
question in this country, I recommended that the manufacture, sale, and
use of opium in the United States should be more rigorously controlled
by legislation.

Prior to that time and in continuation of the policy of this Government
to secure the cooperation of the interested nations, the United States
proposed an international opium conference with full powers for the
purpose of clothing with the force of international law the resolutions
adopted by the above-mentioned commission, together with their essential
corollaries. The other powers concerned cordially responded to the
proposal of this Government, and, I am glad to be able to announce,
representatives of all the powers assembled in conference at The Hague
on the first of this month.

Since the passage of the opium-exclusion act, more than twenty States
have been animated to modify their pharmacy laws and bring them in
accord with the spirit of that act, thus stamping out, to a measure, the
intrastate traffic in opium and other habit-forming drugs. But, although
I have urged on the Congress the passage of certain measures for Federal
control of the interstate and foreign traffic in these drugs, no action
has yet been taken. In view of the fact that there is now sitting at The
Hague so important a conference, which has under review the municipal
laws of the different nations for the mitigation of their opium and
other allied evils, a conference which will certainly deal with the
international aspects of these evils, it seems to me most essential that
the Congress should take immediate action on the anti-narcotic
legislation to which I have already called attention by a special
message.

BUENOS AIRES CONVENTIONS.

The four important conventions signed at the Fourth Pan American
Conference at Buenos Aires, providing for the regulation of trademarks,
patents, and copyrights, and for the arbitration of pecuniary claims,
have, with the advice and consent of the Senate, been ratified on the
part of the United States and the ratifications have been deposited with
the Government of the Argentine Republic in accordance with the
requirements of the conventions. I am not advised that similar action
has been taken by any other of the signatory governments.

INTERNATIONAL ARRANGEMENT TO SUPPRESS OBSCENE PUBLICATIONS.

One of the notable advances in international morality accomplished in
recent years was an arrangement entered into on April 13th of the
present year between the United States and other powers for the
repression of the circulation of obscene publications.

FOREIGN TRADE RELATIONS OF THE UNITED STATES.

In my last annual message I referred to the tariff negotiations of the
Department of State with foreign countries in connection with the
application, by a series of proclamations, of the minimum tariff of the
United States to importations from the several countries, and I stated
that, in its general operation, section 2 of the new tariff law had
proved a guaranty of continued commercial peace, although there were,
unfortunately, instances where foreign governments dealt arbitrarily
with American interests within their jurisdiction in a manner injurious
and inequitable. During the past year some instances of discriminatory
treatment have been removed, but I regret to say that there remain a few
cases of differential treatment adverse to the commerce of the United
States. While none of these instances now appears to amount to undue
discrimination in the sense of section 2 Of the tariff law of August 5,
1909, they are all exceptions to that complete degree of equality of
tariff treatment that the Department of State has consistently sought to
obtain for American commerce abroad.

While the double tariff feature of the tariff law of 1909 has been amply
justified by the results achieved in removing former and preventing new,
undue discriminations against American commerce it is believed that the
time has come for the amendment of this feature of the law in such way
as to provide a graduated means of meeting varying degrees of
discriminatory treatment of American commerce in foreign countries as
well as to protect the financial interests abroad of American citizens
against arbitrary and injurious treatment on the part of foreign
governments through either legislative or administrative measures.

It would seem desirable that the maximum tariff of the United States
should embrace within its purview the free list, which is not the case
at the present time, in order that it might have reasonable significance
to the governments of those countries from which the importations into
the United States are confined virtually to articles on the free list.

RECORD OF HIGHEST AMOUNT OF FOREIGN TRADE.

The fiscal year ended June 30, 1911, shows great progress in the
development of American trade. It was noteworthy as marking the highest
record of exports of American products to foreign countries, the
valuation being in excess of $2,000,000,000. These exports showed a gain
over the preceding year of more than $300,000,000.

FACILITIES FOR FOREIGN TRADE FURNISHED BY JOINT ACTION OF DEPARTMENT OF
STATE AND OF COMMERCE AND LABOR.

There is widespread appreciation expressed by the business interests of
the country as regards the practical value of the facilities now offered
by the Department of State and the Department of Commerce and Labor for
the furtherance of American commerce. Conferences with their officers at
Washington who have an expert knowledge of trade conditions in foreign
countries and with consular officers and commercial agents of the
Department of Commerce and Labor who, while on leave of absence, visit
the principal industrial centers of the United States, have been found
of great value. These trade conferences are regarded as a particularly
promising method of governmental aid in foreign trade promotion. The
Department of Commerce and Labor has arranged to give publicity to the
expected arrival and the itinerary of consular officers and commercial
agents while on leave in the United States, in order that trade
organizations may arrange for conferences with them.

As I have indicated, it is increasingly clear that to obtain and
maintain that equity and substantial equality of treatment essential to
the flourishing foreign trade, which becomes year by year more important
to the industrial and commercial welfare of the United States, we should
have a flexibility of tariff sufficient for the give and take of
negotiation by the Department of State on behalf of our commerce and
industry.

CRYING NEED FOR AMERICAN MERCHANT MARINE.

I need hardly reiterate the conviction that there should speedily be
built up an American merchant marine. This is necessary to assure
favorable transportation facilities to our great ocean-borne commerce as
well as to supplement the Navy with an adequate reserve of ships and men
It would have the economic advantage of keeping at home part of the vast
sums now paid foreign shipping for carrying American goods. All the
great commercial nations pay heavy subsidies to their merchant marine so
that it is obvious that without some wise aid from the Congress the
United States must lag behind in the matter of merchant marine in its
present anomalous position.

EXTENSION OF AMERICAN BANKING TO FOREIGN COUNTRIES.

Legislation to facilitate the extension of American banks to foreign
countries is another matter in which our foreign trade needs assistance.

CHAMBERS OF FOREIGN COMMERCE SUGGESTED.

The interests of our foreign commerce are nonpartisan, and as a factor
in prosperity are as broad as the land. In the dissemination of useful
information and in the coordination of effort certain unofficial
associations have done good work toward the promotion of foreign
commerce. It is cause for regret, however, that the great number of such
associations and the comparative lack of cooperation between them fails
to secure an efficiency commensurate with the public interest. Through
the agency of the Department of Commerce and Labor, and in some cases
directly, the Department of State transmits to reputable business
interests information of commercial opportunities, supplementing the
regular published consular reports. Some central organization in touch
with associations and chambers of commerce throughout the country and
able to keep purely American interests in closer touch with different
phases of commercial affairs would, I believe, be of great value. Such
organization might be managed by a committee composed of a small number
of those now actively carrying on the work of some of the larger
associations, and there might be added to the committee, as members ex
officio, one or two officials of the Department of State and one or two
officials from the Department of Commerce and Labor and representatives
of the appropriate committees of Congress. The authority and success of
such an organization would evidently be enhanced if the Congress should
see fit to prescribe its scope and organization through legislation
which would give to it some such official standing as that, for example,
of the National Red Cross.

With these factors and the continuance of the foreign-service
establishment (departmental, diplomatic, and consular) upon the high
plane where it has been placed by the recent reorganization this
Government would be abreast of the times in fostering the interests of
its foreign trade, and the rest must be left to the energy and
enterprise of our business men.

IMPROVEMENT OF THE FOREIGN SERVICE.

The entire foreign-service organization is being improved and developed
with especial regard to the requirements of the commercial interests of
the country. The rapid growth of our foreign trade makes it of the
utmost importance that governmental agencies through which that trade is
to be aided and protected should possess a high degree of efficiency.
Not only should the foreign representatives be maintained upon a
generous scale in so far as salaries and establishments are concerned,
but the selection and advancement of officers should be definitely and
permanently regulated by law so that the service shall not fail to
attract men of high character and ability. The experience of the past
few years with a partial application of civil-service rules to the
Diplomatic and Consular Service leaves no doubt in my mind of the wisdom
of a wider and more permanent extension of those principles to both
branches of the foreign service. The men selected for appointment by
means of the existing executive regulations have been of a far higher
average of intelligence and ability than the men appointed before the
regulations were promulgated. Moreover, the feeling that under the
existing rules there is reasonable hope for permanence of tenure during
good behavior and for promotion for meritorious service has served to
bring about a zealous activity in the interests of the country, which
never before existed or could exist. It is my earnest conviction that
the enactment into law of the general principles of the existing
regulations can not fail to effect further improvement in both branches
of the foreign service by providing greater inducement for young men of
character and ability to seek a career abroad in the service of the
Government, and an incentive to those already in the service to put
forth greater efforts to attain the high standards which the successful
conduct of our international relations and commerce requires.

I therefore again commend to the favorable action of the Congress the
enactment of a law applying to the diplomatic and consular service the
principles embodied in section 1753 of the Revised Statutes of the
United States, in the civil-service act of January 16, 1883, and the
Executive orders of June 27, 1906, and of November 26, 1909. In its
consideration of this important subject I desire to recall to the
attention of the Congress the very favorable report made on the Lowden
bill for the improvement of the foreign service by the Foreign Affairs
Committee of the House of Representatives. Available statistics show the
strictness with which the merit system has been applied to the foreign
service during recent years and the absolute nonpartisan selection of
consuls and diplomatic-service secretaries who, indeed, far from being
selected with any view to political consideration, have actually been
chosen to a disproportionate extent from States which would have been
unrepresented in the foreign service under the system which it is to be
hoped is now permanently obsolete. Some legislation for the perpetuation
of the present system of examinations and promotions upon merit and
efficiency would be of greatest value to our commercial and
international interests.

PART III.

THE WHITE HOUSE, December 20, 1911. To the Senate and House of
Representatives:

In my annual message to Congress, December, 1909, I stated that under
section 2 of the act of August 5, 1909, I had appointed a Tariff Board
of three members to cooperate with the State Department in the
administration of the maximum and minimum clause of that act, to make a
glossary or encyclopedia of the existing tariff so as to render its
terms intelligible to the ordinary reader, and then to investigate
industrial conditions and costs of production at home and abroad with a
view to determining to what extent existing tariff rates actually
exemplify the protective principle, viz., that duties should be made
adequate, and only adequate, to equalize the difference in cost of
production at home and abroad.

I further stated that I believed these investigations would be of great
value as a basis for accurate legislation, and that I should from time
to time recommend to Congress the revision of certain schedules in
accordance with the findings of the Board.

In the last session of the Sixty-first Congress a bill creating a
permanent Tariff Board of five members, of whom not more than three
should be of the same political party, passed each House, but failed of
enactment because of slight differences on which agreement was not
reached before adjournment. An appropriation act provided that the
permanent Tariff Board, if created by statute, should report to Congress
on Schedule K in December, 1911.

Therefore, to carry out so far as lay within my power the purposes of
this bill for a permanent Tariff Board, I appointed in March, 1911, a
board of five, adding two members of such party affiliation as would
have fulfilled the statutory requirement, and directed them to make a
report to me on Schedule K of the tariff act in December of this year.

In my message of August 17, 1911, accompanying the veto of the wool
bill, I said that, in my judgment, Schedule K should be revised and the
rates reduced. My veto was based on the ground that, since the Tariff
Board would make, in December, a detailed report on wool and wool
manufactures, with special reference to the relation of the existing
rates of duties to relative costs here and abroad, public policy and a
fair regard to the interests of the producers and the manufacturers on
the one hand and of the consumers on the other demanded that legislation
should not be hastily enacted in the absence of such information; that I
was not myself possessed at that time of adequate knowledge of the facts
to determine whether or not the proposed act was in accord with my
pledge to support a fair and reasonable protective policy; that such
legislation might prove only temporary and inflict upon a great industry
the evils of continued uncertainty.

I now herewith submit a report of the Tariff Board on Schedule K. The
board is unanimous in its findings. On the basis of these findings I now
recommend that the Congress proceed to a consideration of this schedule
with a view to its revision and a general reduction of its rates.

The report shows that the present method of assessing the duty on raw
Wool--this is, by a specific rate on the grease pound (i. e., unscoured)
--operates to exclude wools of high shrinkage in scouring but fine
quality from the American market and thereby lessens the range of wools
available to the domestic manufacturer; that the duty on scoured wool Of
33 cents per pound is prohibitory and operates to exclude the
importation of clean, low-priced foreign wools of inferior grades, which
are nevertheless valuable material for manufacturing, and which can not
be imported in the grease because of their heavy shrinkage. Such wools,
if imported, might be used to displace the cheap substitutes now in use.

To make the preceding paragraph a little plainer, take the instance of a
hundred pounds of first-class wool imported under the present duty,
which is 11 cents a pound. That would make the duty on the hundred
pounds $11. The merchantable part of the wool thus imported is the
weight of the wool of this hundred pounds after scouring. If the wool
shrinks 80 per cent, as some wools do, then the duty in such a case
would amount to $11 $11 on 20 pounds of scoured wool. This, of course,
would be prohibitory. If the wool shrinks only 50 per cent, it would be
$11 on 50 pounds of wool, and this is near to the average of the great
bulk of wools that are imported from Australia, which is the principal
source of our imported wool.

These discriminations could be overcome by assessing a duty in ad
valorem terms, but this method is open to the objection, first, that it
increases administrative difficulties and tends to decrease revenue
through undervaluation; and, second, that as prices advance, the ad
valorem rate increases the duty per pound at the time when the consumer
most needs relief and the producer can best stand competition; while if
prices decline the duty is decreased at the time when the consumer is
least burdened by the price and the producer most needs protection.

Another method of meeting the difficulty of taxing the grease pound is
to assess a specific duty on grease wool in terms of its scoured
content. This obviates the chief evil of the present system, namely, the
discrimination due to different shrinkages, and thereby tends greatly to
equalize the duty. The board reports that this method is feasible in
practice and could be administered without great expense. The scoured
content of the wool is the basis on which users of wool make their
calculations, and a duty of this kind would fit the usages of the trade.
One effect of this method of assessment would be that, regardless of the
rate of duty, there would be an increase in the supply and variety of
wool by making available to the American market wools of both low and
fine quality now excluded.

The report shows in detail the difficulties involved in attempting to
state in categorical terms the cost of wool production and the great
differences in cost as between different regions and different types of
wool. It is found, however, that, taking all varieties in account, the
average cost of production for the whole American clip is higher than
the cost in the chief competing country by an amount somewhat less than
the present duty.

The report shows that the duties on wools, wool wastes, and shoddy,
which are adjusted to the rate Of 33 cents on scoured wool are
prohibitory in the same measure that the duty on scoured wool is
prohibitory. In general, they are assessed at rates as high as, or
higher than, the duties paid on the clean content of wools actually
imported. They should be reduced and so adjusted to the rate on wool as
to bear their proper proportion to the real rate levied on the actual
wool imports.

The duties on many classes of wool manufacture are prohibitory and
greatly in excess of the difference in cost of production here and
abroad.

This is true of tops, of yarns (with the exception of worsted yarns of a
very high grade), and of low and medium grade cloth of heavy weight.

On tops up to 52 cents a pound in value, and on yarns of 65 cents in
value, the rate is 100 per cent with correspondingly higher rates for
lower values. On cheap and medium grade cloths, the existing rates
frequently run to 150 per cent and on some cheap goods to over 200 per
cent. This is largely due to that part of the duty which is levied
ostensibly to compensate the manufacturer for the enhanced cost of his
raw material due to the duty on wool. As a matter of fact, this
compensatory duty, for numerous classes of goods, is much in excess of
the amount needed for strict compensation.

On the other hand, the findings show that the duties which run to such
high ad valorem equivalents are prohibitory, since the goods are not
imported, but that the prices of domestic fabrics are not raised by the
full amount of duty. On a set of 1-yard samples of 16 English fabrics,
which are completely excluded by the present tariff rates, it was found
that the total foreign value was $41.84; the duties which would have
been assessed had these fabrics been imported, $76.90; the foreign value
plus the amount of the duty, $118.74; or a nominal duty of 183 per cent.
In fact, however, practically identical fabrics of domestic make sold at
the same time at $69.75, showing an enhanced price over the foreign
market value of but 67 per cent.

Although these duties do not increase prices of domestic goods by
anything like their full amount, it is none the less true that such
prohibitive duties eliminate the possibility of foreign competition,
even in time of scarcity; that they form a temptation to monopoly and
conspiracies to control domestic prices; that they are much in excess of
the difference in cost of production here and abroad, and that they
should be reduced to a point which accords with this principle.

The findings of the board show that in this industry the actual
manufacturing cost, aside from the question of the price of materials,
is much higher in this country than it is abroad; that in the making of
yarn and cloth the domestic woolen or worsted manufacturer has in
general no advantage in the form of superior machinery or more efficient
labor to offset the higher wages paid in this country The findings show
that the cost of turning wool into yarn in this country is about double
that in the leading competing country, and that the cost of turning yarn
into cloth is somewhat more than double. Under the protective policy a
great industry, involving the welfare of hundreds of thousands of
people, has been established despite these handicaps.

In recommending revision and reduction, I therefore urge that action be
taken with these facts in mind, to the end that an important and
established industry may not be jeopardized.

The Tariff Board reports that no equitable method has been found to,
levy purely specific duties on woolen and worsted fabrics and that,
excepting for a compensatory duty, the rate must be ad valorem on such
manufactures. It is important to realize, however, that no flat ad
valorem rate on such fabrics can be made to work fairly and effectively.
Any single rate which is high enough to equalize the difference in
manufacturing cost at home and abroad on highly finished goods involving
such labor would be prohibitory on cheaper goods, in which the labor
cost is a smaller proportion of the total value. Conversely, a rate only
adequate to equalize this difference on cheaper goods would remove
protection from the fine-goods manufacture, the increase in which has
been one of the striking features of the trade's development in recent
years. I therefore recommend that in any revision the importance of a
graduated scale of ad valorem duties on cloths be carefully considered
and applied.

I venture to say that no legislative body has ever had presented to it a
more complete and exhaustive report than this on so difficult and
complicated a subject as the relative costs of wool and woolens the
world over. It is a monument to the thoroughness, industry,
impartiality, and accuracy of the men engaged in its making. They were
chosen from both political parties but have allowed no partisan spirit
to prompt or control their inquiries. They are unanimous in their
findings. I feel sure that after the report has been printed and studied
the value of such a compendium of exact knowledge in respect to this
schedule of the tariff will convince all of the wisdom of making such a
board permanent in order that it may treat each schedule of the tariff
as it has treated this, and then keep its bureau of information up to
date with current changes in the economic world.

It is no part of the function of the Tariff Board to propose rates of
duty. Their function is merely to present findings of fact on which
rates of duty may be fairly determined in the light of adequate
knowledge in accord with the economic policy to be followed. This is
what the present report does.

The findings of fact by the board show ample reason for the revision
downward of Schedule K, in accord with the protective principle, and
present the data as to relative costs and prices from which may be
determined what rates will fairly equalize the difference in production
costs. I recommend that such revision be proceeded with at once.

PART IV.

THE WHITE HOUSE, December 21, 1911. To the Senate and House of
Representatives:

The financial condition of the Government, as shown at the close of the
last fiscal year, June 30, 1911, was very satisfactory. The ordinary
receipts into the general fund, excluding postal revenues, amounted to
$701,372,374.99, and the disbursements from the general fund for current
expenses and capital outlays, excluding postal and Panama Canal
disbursements, including the interest on the public debt, amounted to
$654,137,907-89, leaving a surplus Of $47,234,377.10.

The postal revenue receipts amounted to $237,879,823,60, while the
payments made for the postal service from the postal revenues amounted
to $237,660,705.48, which left a surplus of postal receipts over
disbursements Of $219,118.12, the first time in 27 years in which a
surplus occurred.

The interest-bearing debt of the United States June 30, 1911, amounted
to $915,353,190. The debt on which interest had ceased amounted to
$1,879,830.26, and the debt bearing no interest, including greenbacks,
national bank notes to be redeemed, and fractional currency, amounted to
$386,751,917-43, or a total of interest and noninterest bearing debt
amounting to $1,303,984,937.69.

The actual disbursements, exclusive of those for the Panama Canal and
for the postal service for the year ending June 30, 1911, were
$654,137,997.89. The actual disbursements for the year ending June 30,
1910, exclusive of the Panama Canal and the postal service
disbursements, were $659,705,391.08, making a decrease Of $5,567,393.19
in yearly expenditures in the year 1911 under that of 1910. For the year
ending June 30, 1912, the estimated receipts, exclusive of the postal
revenues, are $666,000,000, while the total estimates, exclusive of
those for the Panama Canal and the postal expenditures payable from the
postal revenues, amount to $645,842,799.34. This is a decrease in the
1912 estimates from that of the 1911 estimates of $1,534,367-22.

For the year ending June 30, 1913, the estimated receipts, exclusive of
the postal revenues, are $667,000,000, while the total estimated
appropriations, exclusive of the Panama Canal and postal disbursements
payable from postal revenues, will amount to $637,920,803.35. This is a
decrease in the 1913 estimates from that of the 1912 estimates of
$7,921,995.99.

As to the postal revenues, the expansion of the business in that
department, the normal increase in the Post Office and the extension of
the service, will increase the outlay to the sum Of $260,938,463; but as
the department was self-sustaining this year the Postmaster General is
assured that next year the receipts will at least equal the
expenditures, and probably exceed them by more than the surplus of this
year. It is fair and equitable, therefore, in determining the economy
with which the Government has been run, to exclude the transactions of a
department like the Post Office Department, which relies for its support
upon its receipts. In calculations heretofore made for comparison of
economy in each year, it has been the proper custom only to include in
the statement the deficit in the Post Office Department which was paid
out of the Treasury.

A calculation of the actual increase in the expenses of Government
arising from the increase in the population and the general expansion of
governmental functions, except those of the Post Office, for a number of
years shows a normal increase of about 4 per cent a year. By directing
the exercise of great care to keep down the expenses and the estimates
we have succeeded in reducing the total disbursements each year.

THE CREDIT OF THE UNITED STATES.

The credit of this Government was shown to be better than that of any
other Government by the sale of the Panama Canal 3 per cent bonds. These
bonds did not give their owners the privilege of using them as a basis
for bank-note circulation, nor was there any other privilege extended to
them which would affect their general market value. Their sale,
therefore, measured the credit of the Government. The premium which was
realized upon the bonds made the actual interest rate of the transaction
2.909 per cent.

EFFICIENCY AND ECONOMY IN THE TREASURY DEPARTMENT.

I In the Treasury Department the efficiency and economy work has been
kept steadily up. Provision is made for the elimination of 134 positions
during the coming year. Two hundred and sixty-seven statutory positions
were eliminated during the last year in the office of the Treasury in
Washington, and 141 positions in the year 1910, making an elimination Of
542 statutory positions since March 4, 1909; and this has been done
without the discharge of anybody, because the normal resignations and
deaths have been equal to the elimination of the places, a system of
transfers having taken care of the persons whose positions were dropped
out. In the field service if the department, too, 1,259 positions have
been eliminated down to the present time, making a total net reduction
of all Treasury positions to the number of 1,801. Meantime the
efficiency of the work of the department has increased.

MONETARY REFORM.

A matter of first importance that will come before Congress for action
at this session is monetary reform. The Congress has itself arranged an
early introduction of this great question through the report of its
Monetary Commission. This commission was appointed to recommend a
solution of the banking and currency problems so long confronting the
Nation and to furnish the facts and data necessary to enable the
Congress to take action. The commission was appointed when an impressive
and urgent popular demand for legislative relief suddenly arose out of
the distressing situation of the people caused by the deplorable panic
of 1907. The Congress decided that while it could not give immediately
the relief required, it would provide a commission to furnish the means
for prompt action at a later date.

In order to do its work with thoroughness and precision this commission
has taken some time to make its report. The country is undoubtedly
hoping for as prompt action on the report as the convenience of the
Congress can permit. The recognition of the gross imperfections and
marked inadequacy of our banking and currency system even in our most
quiet financial periods is of long standing; and later there has matured
a recognition of the fact that our system is responsible for the
extraordinary devastation, waste, and business paralysis of our
recurring periods of panic. Though the members of the Monetary
Commission have for a considerable time been working in the open, and
while large numbers of the people have been openly working with them,
and while the press has largely noted and discussed this work as it has
proceeded, so that the report of the commission promises to represent a
national movement, the details of the report are still being considered.
I can not, therefore, do much more at this time than commend the immense
importance of monetary reform, urge prompt consideration and action when
the commission's report is received, and express my satisfaction that
the plan to be proposed promises to embrace main features that, having
met the approval of a great preponderance of the practical and
professional opinion of the country, are likely to meet equal approval
in Congress.

It is exceedingly fortunate that the wise and undisputed policy of
maintaining unchanged the main features of our banking system rendered
it at once impossible to introduce a central bank; for a central bank
would certainly have been resisted, and a plan into which it could have
been introduced would probably have been defeated. But as a central bank
could not be a part of the only plan discussed or considered, that
troublesome question is eliminated. And ingenious and novel as the
proposed National Reserve Association appears, it simply is a logical
outgrowth of what is best in our present system, and is, in fact, the
fulfillment of that system.

Exactly how the management of that association should be organized is a
question still open. It seems to be desirable that the banks which would
own the association should in the main manage it, It will be an agency
of the banks to act for them, and they can be trusted better than
anybody else chiefly to conduct it. It is mainly bankers' work. But
there must be some form of Government supervision and ultimate control,
and I favor a reasonable representation of the Government in the
management. I entertain no fear of the introduction of politics or of
any undesirable influences from a properly measured Government
representation.

I trust that all banks of the country possessing the requisite standards
will be placed upon a footing of perfect equality of opportunity. Both
the National system and the State system should be fairly recognized,
leaving them eventually to coalesce if that shall prove to be their
tendency. But such evolution can not develop impartially if the banks of
one system are given or permitted any advantages of opportunity over
those of the other system. And I trust also that the new legislation
will carefully and completely protect and assure the individuality and
the independence of each bank, to the end that any tendency there may
ever be toward a consolidation of the money or banking power of the
Nation shall be defeated.

It will always be possible, of course, to correct any features of the
new law which may in practice prove to be unwise; so that while this law
is sure to be enacted under conditions of unusual knowledge and
authority, it also will include, it is well to remember, the possibility
of future amendment.

With the present prospects of this long-awaited reform encouraging us,
it would be singularly unfortunate if this monetary question should by
any chance become a party issue. And I sincerely hope it will not. The
exceeding amount of consideration it has received from the people of the
Nation has been wholly nonpartisan; and the Congress set its nonpartisan
seal upon it when the Monetary Commission was appointed. In commending
the question to the favorable consideration of Congress, I speak for,
and in the spirit of, the great number of my fellow citizens who without
any thought of party or partisanship feel with remarkable earnestness
that this reform is necessary to the interests of all the people.

THE WAR DEPARTMENT.

There is now before Congress a Dill, the purpose of which is to increase
the efficiency and decrease the expense of the Army. It contains four
principal features: First, a consolidation of the General Staff with the
Adjutant General's and the Inspector General's Departments; second, a
consolidation of the Quartermaster's Department with the Subsistence and
the Pay Departments; third, the creation of an Army Service Corps; and
fourth, an extension of the enlistment period from three to five years.

With the establishment of an Army Service Corps, as proposed in the
bill, I am thoroughly in accord and am convinced that the establishment
of such a corps will result in a material economy and a very great
increase of efficiency in the Army. It has repeatedly been recommended
by me and my predecessors. I also believe that a consolidation of the
Staff Corps can be made with a resulting increase in efficiency and
economy, but not along the lines provided in the bill under
consideration.

I am opposed to any plan the result of which would be to break up or
interfere with the essential principles of the detail system in the
Staff Corps established by the act of February 2, 1901, and I am opposed
to any plan the result of which would be to give to the officer selected
as Chief of Staff or to any other member of the General Staff Corps
greater permanency of office than he now has. Under the existing law
neither the Chief. of Staff nor any other member of the General Staff
Corps can remain in office for a period of more than four years, and
there must be an interval of two years between successive tours of duty.

The bill referred to provides that certain persons shall become
permanent members of the General Staff Corps, and that certain others
are subject to re-detail without an interval of two years. Such
provision is fraught with danger to the welfare of the Army, and would
practically nullify the main purpose of the law creating the [missing
text].

In making the consolidations no reduction should be made in the total
number of officers of the Army, of whom there are now too few to perform
the duties imposed by law. I have in the past recommended an increase in
the number of officers by 600 in order to provide sufficient officers to
perform all classes of staff duty and to reduce the number of line
officers detached from their commands. Congress at the last session
increased the total number of officers by 200, but this is not enough.
Promotion in the line of the Army is too slow. Officers do not attain
command rank at an age early enough properly to exercise it. It would be
a mistake further to retard this already slow promotion by throwing back
into the line of the Arm a number of high-ranking officers to be
absorbed as is provided in the [missing text].

Another feature of the bill which I believe to be a mistake is the
proposed increase in the term of enlistment from three to five ears I
believe it would be better to enlist men for six years, release them at
the end of three years from active service, and put them in reserve for
the remaining three years. Reenlistments should be largely confined to
the noncommissioned officers and other enlisted men in the skilled
grades. This plan by the payment of a comparatively small compensation
during the three years of reserve, would keep a large body of men at the
call of the Government, trained and ready for [missing text].

The Army of the United States is in good condition. It showed itself
able to meet an emergency in the successful mobilization of an army
division of from 15,000 to 20,000 men, which took place along the border
of Mexico during the recent disturbances in that country. The marvelous
freedom from the ordinary camp diseases of typhoid fever and measles is
referred to in the report of the Secretary of War and shows such an
effectiveness in the sanitary regulations and treatment of the Medical
Corps, and in the discipline of the Army itself, as to invoke the
highest commendation.

MEMORIAL AMPHITHEATER AT ARLINGTON.

I beg to renew my recommendation of last year that the Congress
appropriate for a memorial amphitheater at Arlington, Va., the funds
required to construct it upon the plans already approved.

THE PANAMA CANAL.

The very satisfactory progress made on the Panama Canal last year has
continued, and there is every reason to believe that the canal will be
completed as early as the 1st of July, 1913, unless something unforeseen
occurs. This is about 18 months before the time promised by the
engineers.

We are now near enough the completion of the canal to make it
imperatively necessary that legislation should be enacted to fix the
method by which the canal shall be maintained and controlled and the
zone governed. The fact is that to-day there is no statutory law by
authority of which the President is maintaining the government of the
zone. Such authority was given in an amendment to the Spooner Act, which
expired by the terms of its own limitation some years ago. Since that
time the government has continued, under the advice of the Attorney
General that in the absence of action by Congress, there is necessarily
an implied authority on the part of the Executive to maintain a
government in a territory in which he has to see that the laws are
executed. The fact that we have been able thus to get along during the
important days of construction without legislation expressly formulating
the government of the zone, or delegating the creation of it to the
President, is not a reason for supposing that we may continue the same
kind of a government after the construction is finished. The implied
authority of the President to maintain a civil government in the zone
may be derived from the mandatory direction given him in the original
Spooner Act, by which he was commanded to build the canal; but
certainly, now that the canal is about to be completed and to be put
under a permanent management, there ought to be specific statutory
authority for its regulation and control and for the government of the
zone, which we hold for the chief and main purpose of operating the
canal.

I fully concur with the Secretary of War that the problem is simply the
management of a great public work, and not the government of a local
republic; that every provision must be directed toward the successful
maintenance of the canal as an avenue of commerce, and that all
provisions for the government of those who live within the zone should
be subordinate to the main purpose.

The zone is 40 miles long and 10 miles wide. Now, it has a population Of
50,000 or 60,000, but as soon as the work of construction is completed,
the towns which make up this population will be deserted, and only
comparatively few natives will continue their residence there. The
control of them ought to approximate a military government. One judge
and two justices of the peace will be sufficient to attend to all the
judicial and litigated business there is. With a few fundamental laws of
Congress, the zone should be governed by the orders of the President,
issued through the War Department, as it is today. Provisions can be
made for the guaranties of life, liberty, and property, but beyond
those, the government should be that of a military reservation, managed
in connection with this great highway of trade.

FURNISHING SUPPLIES AND REPAIRS.

In my last annual message I discussed at length the reasons for the
Government's assuming the task of furnishing to all ships that use the
canal, whether our own naval vessels or others, the supplies of coal and
oil and other necessities with which they must be replenished either
before or after passing through the canal, together with the dock
facilities and repairs of every character. This it is thought wise to do
through the Government, because the Government must establish for
itself, for its own naval vessels, large depots and dry docks and
warehouses, and these may easily be enlarged so as to secure to the
world public using the canal reasonable prices and a certainty that
there will be no discrimination between those who wish to avail
themselves of such facilities. TOLLS.

I renew my recommendation with respect to the tolls of the canal that
within limits, which shall seem wise to Congress, the power of fixing
tolls be given to the President. In order to arrive at a proper
conclusion, there must be some experimenting, and this can not be done
if Congress does not delegate the power to one who can act
expeditiously.

POWER EXISTS TO RELIEVE AMERICAN SHIPPING.

I am very confident that the United States has the power to relieve from
the payment of tolls any part of our shipping that Congress deems wise.
We own the canal. It was our money that built it. We have the right to
charge tolls for its use. Those tolls must be the same to everyone; but
when we are dealing with our own ships, the practice of many Governments
of subsidizing their own merchant vessels is so well established in
general that a subsidy equal to the tolls, an equivalent remission of
tolls, can not be held to be a discrimination in the use of the canal.
The practice in the Suez Canal makes this clear. The experiment in tolls
to be made by the President would doubtless disclose how great a burden
of tolls the coastwise trade between the Atlantic and the Pacific coast
could bear without preventing its usefulness in competition with the
transcontinental railroads. One of the chief reasons for building the
canal was to set up this competition and to bring the two shores closer
together as a practical trade problem. It may be that the tolls will
have to be wholly remitted. I do not think this is the best principle,
because I believe that the cost of such a Government work as the Panama
Canal ought to be imposed gradually but certainly upon the trade which
it creates and makes possible. So far as we can, consistent with the
development of the world's trade through the canal, and the benefit
which it was intended to secure to the east and west coastwise trade, we
ought to labor to secure from the canal tolls a sufficient amount
ultimately to meet the debt which we have assumed and to pay the
interest.

THE PHILIPPINE ISLANDS.

In respect to the Philippines, I urgently join in the recommendation of
the Secretary of War that the act of February 6, 1905, limiting the
indebtedness that may be incurred by the Philippine Government for the
construction of public works, be increased from $5,000,000 to
$15,000,000. The finances of that Government are in excellent condition.
The maximum sum mentioned is quite low as compared with the amount of
indebtedness of other governments with similar resources, and the
success which has attended the expenditure of the $5,000,000 in the
useful improvements of the harbors and other places in the Islands
justifies and requires additional expenditures for like purposes.
NATURALIZATION.

I also join in the recommendation that the legislature of the Philippine
Islands be authorized to provide for the naturalization of Filipinos and
others who by the present law are treated as aliens, so as to enable
them to become citizens of the Philippine Islands.

FRIARS' LANDS.

Pending an investigation by Congress at its last session, through one of
its committees, into the disposition of the friars' lands, Secretary
Dickinson directed that the friars' lands should not be sold in excess
of the limits fixed for the public lands until Congress should pass upon
the subject or should have concluded its investigation. This order has
been an obstruction to the disposition of the lands, and I expect to
direct the Secretary of War to return to the practice under the opinion
of the Attorney General which will enable us to dispose of the lands
much more promptly, and to prepare a sinking fund with which to meet the
$7,000,000 of bonds issued for the purchase of the lands. I have no
doubt whatever that the Attorney General's construction was a proper
one, and that it is in the interest of everyone that the land shall be
promptly disposed of. The danger of creating a monopoly of ownership in
lands under the statutes as construed is nothing. There are only two
tracts of 60,000 acres each unimproved and in remote Provinces that are
likely to be disposed of in bulk, and the rest of the lands are subject
to the limitation that they shall be first offered to the present
tenants and lessors who hold them in small tracts.

RIVERS AND HARBORS.

The estimates for the river and harbor improvements reach $32,000,000
for the coming year. I wish to urge that whenever a project has been
adopted by Congress as one to be completed, the more money which can be
economically expended in its construction in each year, the greater the
ultimate economy. This has especial application to the improvement of
the Mississippi River and its large branches. It seems to me that an
increase in the amount of money now being annually expended in the
improvement of the Ohio River which has been formally adopted by
Congress would be in the interest of the public. A similar change ought
to be made during the present Congress, in the amount to be appropriated
for the Missouri River. The engineers say that the cost of the
improvement of the Missouri River from Kansas City to St. Louis, in
order to secure 6 feet as a permanent channel, will reach $20,000,000.
There have been at least three recommendations from the Chief of
Engineers that if the improvement be adopted, $2,000,000 should be
expended upon it annually. This particular improvement is especially
entitled to the attention of Congress, because a company has been
organized in Kansas City, with a capital of $1,000,000, which has built
steamers and barges, and is actually using the river for transportation
in order to show what can be done in the way of affecting rates between
Kansas City and St. Louis, and in order to manifest their good faith and
confidence in respect of the improvement. I urgently recommend that the
appropriation for this improvement be increased from $600,000, as
recommended now in the completion of a contract, to $2,000,000 annually,
so that the work may be done in 10 years.

WATERWAY FROM THE LAKES TO THE GULF.

The project for a navigable waterway from Lake Michigan to the mouth of
the Illinois River, and thence via the Mississippi to the Gulf of
Mexico, is one of national importance. In view of the work already
accomplished by the Sanitary District of Chicago, an agency of the State
of Illinois, which has constructed the most difficult and costly stretch
of this waterway and made it an asset of the Nation, and in view of the
fact that the people of Illinois have authorized the expenditure Of
$20,000,000 to carry this waterway 62 miles farther to Utica, I feel
that it is fitting that this work should be supplemented by the
Government, and that the expenditures recommended by the special board
of engineers on the waterway from Utica to the mouth of the Illinois
River be made upon lines which while providing a waterway for the Nation
should otherwise benefit that State to the fullest extent. I recommend
that the term of service of said special board of engineers be
continued, and that it be empowered to reopen the question of the
treatment of the lower Illinois River, and to negotiate with a properly
constituted commission representing the State of Illinois, and to agree
upon a plan for the improvement of the lower Illinois River and upon the
extent to which the United States may properly cooperate with the State
of Illinois in securing the construction of a navigable waterway from
Lockport to the mouth of the Illinois River in conjunction with the
development of water power by that State between Lockport and Utica.

THE DEPARTMENT OF JUSTICE.

Removal of clerks of Federal courts.

The report of the Attorney General shows that he has subjected to close
examination the accounts of the clerks of the Federal courts; that he
has found a good many which disclose irregularities or dishonesty; but
that he has had considerable difficulty in securing an effective
prosecution or removal of the clerks thus derelict. I am certainly not
unduly prejudiced against the Federal courts, but the fact is that the
long and confidential relations which grow out of the tenure for life on
the part of the judge and the practical tenure for life on the part of
the clerk are not calculated to secure the strictness of dealing by the
judge with the clerk in respect to his fees and accounts which assures
in the clerk's conduct a freedom from overcharges and carelessness. The
relationship between the judge and the clerk makes it ungracious for
members of the bar to complain of the clerk or for department examiners
to make charges against him to be heard by the court, and an order of
removal of a clerk and a judgment for the recovery of fees are in some
cases reluctantly entered by the judge. For this reason I recommend an
amendment to the law whereby the President shall be given power to
remove the clerks for cause. This provision need not interfere with the
right of the judge to appoint his clerk or to remove him.

French spoliation awards.

In my last message, I recommended to Congress that it authorize the
payment of the findings or judgments of the Court of Claims in the
matter of the French spoliation cases. There has been no appropriation
to pay these judgments since 1905. The findings and awards were obtained
after a very bitter fight, the Government succeeding in about 75 per
cent of the cases. The amount of the awards ought, as a matter of good
faith on the part of the Government, to be paid.

EMPLOYERS' LIABILITY AND WORKMEN'S COMPENSATION COMMISSION.

The limitation of the liability of the master to his servant for
personal injuries to such as are occasioned by his fault has been
abandoned in most civilized countries and provision made whereby the
employee injured in the course of his employment is compensated for his
loss of working ability irrespective of negligence. The principle upon
which such provision proceeds is that accidental injuries to workmen in
modern industry, with its vast complexity and inherent dangers arising
from complicated machinery and the use of the great forces of steam and
electricity, should be regarded as risks of the industry and the loss
borne in some equitable proportion by those who for their own profit
engage therein. In recognition of this the last Congress authorized the
appointment of a commission to investigate the subject of employers'
liability and workmen's compensation and to report the result of their
investigations, through the President, to Congress. This commission was
appointed and has been at work, holding hearings, gathering data, and
considering the subject, and it is expected will be able to report by
the first of the year, in accordance with the provisions of the law. It
is hoped and expected that the commission will suggest legislation which
will enable us to put in the place of the present wasteful and sometimes
unjust system of employers' liability a plan of compensation which will
afford some certain and definite relief to all employees who are injured
in the course of their employment in those industries which are subject
to the regulating power of Congress.

MEASURES TO PREVENT DELAY AND UNNECESSARY COST OF LITIGATION.

In promotion of the movement for the prevention of delay and unnecessary
cost, in litigation, I am glad to say that the Supreme Court has taken
steps to reform the present equity rules of the Federal courts, and that
we may in the near future expect a revision of them which will be a long
step in the right direction.

The American Bar Association has recommended to Congress several bills
expediting procedure, one of which has already passed the House
unanimously, February 6, 1911. This directs that no judgment should be
set aside or reversed, or new trial granted, unless it appears to the
court, after an examination of the entire cause, that the error
complained of has injuriously affected the substantial rights of the
parties, and also provides for the submission of issues of fact to a
jury, reserving questions of law for subsequent argument and decision. I
hope this bill will pass the Senate and become law, for it will simplify
the procedure at law.

Another bill 11 to amend chapter II of the judicial Code, in order to
avoid errors in pleading, was presented by the same association, and
one. enlarging the jurisdiction of the Supreme Court so as to permit
that court to examine, upon a writ of error, all cases in which any
right or title is claimed under the Constitution, or any statute or
treaty of the United States, whether the decision in the court below has
been against the right or title or in its favor. Both these measures are
in the interest of justice and should be passed.

POST OFFICE.

At the beginning of the present administration in 1909 the postal
service was in arrears to the extent Of $17,479,770.47. It was very much
the largest deficit on record. In the brief space of two years this has
been turned into a surplus Of $220,000, which has been accomplished
without curtailment of the postal facilities, as may be seen by the fact
that there have been established 3,744 new post offices; delivery by
carrier has been added to the service in 186 cities; 2,516 new rural
routes have been established, covering 60,000 miles; the force of postal
employees has been increased in these two years by more than 8,000, and
their average annual salary has had a substantial increase.

POSTAL-SAVINGS SYSTEM.

On January 3, 1911, postal-savings depositories were established
experimentally in 48 States and Territories. After three months'
successful operation the system was extended as rapidly as feasible to
the 7,500 Post offices of the first, second, and third classes
constituting the presidential grade. By the end of the year practically
all of these will have been designated and then the system will be
extended to all fourth-class post offices doing a money-order business.

In selecting post offices for depositories consideration was given to
the efficiency of the postmasters and only those offices where the
ratings were satisfactory to the department have been designated.
Withholding designation from postmasters with unsatisfactory ratings has
had a salutary effect on the service.

The deposits have kept pace with the extension of the system. Amounting
to only $60,652 at the end of the first month's operation in the
experimental offices, they increased to $679,310 by July, and now after
11 months of operation have reached a total of $11,000,000. This sum is
distributed among 2,710 banks and protected tinder the law by bonds
deposited with the Treasurer of the United States.

Under the method adopted for the conduct of the system certificates are
issued as evidence of deposits, and accounts with depositors are kept by
the post offices instead of by the department. Compared with the
practice in other countries of entering deposits in pass books and
keeping at the central office a ledger account with each depositor, the
use of the certificate has resulted in great economy of administration.

The depositors thus far number approximately 150,000. They include 40
nationalities, native Americans largely predominating and English and
Italians coming next.

The first conversion of deposits into United States bonds bearing
interest at the rate of 2.5 per cent occurred on July 1, 1911, the
amount of deposits exchanged being $41,900, or a little more than 6 per
cent of the total outstanding certificates of deposit on June 30. Of
this issue, bonds to the value of $6,120 were in coupon form and $35,780
in registered form.

PARCEL POST.

Steps should be taken immediately for the establishment of a rural
parcel post. In the estimates of appropriations needed for the
maintenance of the postal service for the ensuing fiscal year an item of
$150,000 has been inserted to cover the preliminary expense of
establishing a parcel post on rural mail routes, as well as to cover an
investigation having for its object the final establishment of a general
parcel post on all railway and steamboat transportation routes. The
department believes that after the initial expenses of establishing the
system are defrayed and the parcel post is in full operation on the
rural routes it will not only bring in sufficient revenue to meet its
cost, but also a surplus that can be utilized in paying the expenses of
a parcel post in the City Delivery Service.

It is hoped that Congress will authorize the immediate establishment of
a limited parcel post on such rural routes as may be selected, providing
for the delivery along the routes of parcels not exceeding eleven
pounds, which is the weight limit for the international parcel post, or
at the post office from which such route emanates, or on another route
emanating from the same office. Such preliminary service will prepare
the way for the more thorough and comprehensive inquiry contemplated in
asking for the appropriation mentioned, enable the department to gain
definite information concerning the practical operation of a general
system, and at the same time extend the benefit of the service to a
class of people who, above all others, are specially in need of it.

The suggestion that we have a general parcel post has awakened great
opposition on the part of some who think that it will have the effect to
destroy the business of the country storekeeper. Instead of doing this,
I think the change will greatly increase business for the benefit of
all. The reduction in the cost of living it will bring about ought to
make its coming certain.

THE NAVY DEPARTMENT.

On the 2d of November last, I reviewed the fighting fleet of battleships
and other vessels assembled in New York Harbor, consisting of 24
battleships, 2 armored cruisers, 2 cruisers, 22 destroyers, 12 torpedo
boats, 8 submarines, and other attendant vessels, making 98 vessels of
all classes, of a tonnage Of 576,634 tons. Those who saw the fleet were
struck with its preparedness and with its high military efficiency. All
Americans should be proud of its personnel.

The fleet was deficient in the number of torpedo destroyers, in
cruisers, and in colliers, as well as in large battleship cruisers,
which are now becoming a very important feature of foreign navies,
notably the British, German, and Japanese.

The building plan for this year contemplates two battleships and two
colliers. This is because the other and smaller vessels can be built
much more rapidly in case of emergency than the battleships, and we
certainly ought to continue the policy of two battleships a year until
after the Panama Canal is finished and until in our first line and in
our reserve line we can number 40 available vessels of proper armament
and size.

The reorganization of the Navy and the appointment of four aids to the
Secretary have continued to demonstrate their usefulness. It would be
difficult now to administer the affairs of the Navy without the expert
counsel and advice of these aids, and I renew the recommendation which I
made last year, that the aids be recognized by statute.

It is certain that the Navy, with its present size, should have admirals
in active command higher than rear admirals. The recognized grades in
order are: Admiral of the fleet, admiral, vice admiral, and rear
admiral. Our great battleship fleet is commanded by a rear admiral, with
four other rear admirals under his orders. This is not as it should be,
and when questions of precedence arise between our naval officers and
those of European navies, the American rear admiral, though in command
of ten times the force of a foreign vice admiral, must yield precedence
to the latter. Such an absurdity ought not to prevail, and it can be
avoided by the creation of two or three positions of flag rank above
that of rear admiral.

I attended the opening of the new training school at North Chicago,
Ill., and am glad to note the opportunity which this gives for drawing
upon young men of the country from the interior, from farms, stores,
shops, and offices, which insures a high average of intelligence and
character among them, and which they showed in the very wonderful
improvement in discipline and drill which only a few short weeks'
presence at the naval station had made.

I invite your attention to the consideration of the new system of
detention and of punishment for Army and Navy enlisted men which has
obtained in Great Britain, and which has made greatly for the better
control of the. men. We should adopt a similar system here.

Like the Treasury Department and the War Department, the Navy Department
has given much attention to economy in administration, and has cut down
a number of unnecessary expenses and reduced its estimates except for
construction and the increase that that involves.

I urge upon Congress the necessity for an immediate increase of 2,000
men in the enlisted strength of the Navy, provided for in the estimates.
Four thousand more are now needed to man all the available vessels.

There are in the service to-day about 47,750 enlisted men of all
ratings.

Careful computation shows that in April, 1912, 49,166 men will be
required for vessels in commission, and 3,000 apprentice seamen should
be kept under training at all times.

ABOLITION OF NAVY YARDS.

The Secretary of the Navy has recommended the abolition of certain of
the smaller and unnecessary navy yards, and in order to furnish a
complete and comprehensive report has referred the question of all navy
yards to the joint board of the Army and Navy. This board will shortly
make its report and the Secretary of the Navy advises me that his
recommendations on the subject will be presented early in the coming
year. The measure of economy contained in a proper handling of this
subject is so great and so important to the interests of the Nation that
I shall present it to Congress as a separate subject apart from my
annual message. Concentration of the necessary work for naval vessels in
a few navy yards on each coast is a vital necessity if proper economy in
Government expenditures is to be attained.

AMALGAMATION OF STAFF CORPS IN THE NAVY.

The Secretary of the Navy is striving to unify the various corps of the
Navy to the extent possible and thereby stimulate a Navy spirit as
distinguished from a corps spirit. In this he has my warm support.

All officers are to be naval officers first and specialists afterwards.
This means that officers will take up at least one specialty, such as
ordnance, construction, or engineering. This is practically what is done
now, only some of the specialists, like the pay officers and naval
constructors, are not of the line. It is proposed to make them all of
the line.

All combatant corps should obviously be of the line. This necessitates
amalgamating the pay officers and also those engaged in the technical
work of producing the finished ship. This is at present the case with
the single exception of the naval constructors, whom it is now proposed
to amalgamate with the line.

COUNCIL OF NATIONAL DEFENSE.

I urge again upon Congress the desirability of establishing the council
of national defense. The bill to establish this council was before
Congress last winter, and it is hoped that this legislation will pass
during the present session. The purpose of the council is to determine
the general policy of national defense and to recommend to Congress and
to the President such measures relating to it as it shall deem necessary
and expedient.

No such machinery is now provided by which the readiness of the Army and
Navy may be improved and the programs of military and naval requirements
shall be coordinated and properly scrutinized with a view of the
necessities of the whole Nation rather than of separate departments.

DEPARTMENTS OF AGRICULTURE AND COMMERCE AND LABOR.

For the consideration of matters which are pending or have been disposed
of in the Agricultural Department and in the Department of Commerce and
Labor, I refer to the very excellent reports of the Secretaries of those
departments. I shall not be able to submit to Congress until after the
Christmas holidays the question of conservation of our resources arising
in Alaska and the West and the question of the rate for second-class
mail matter in the Post Office Department.

COMMISSION ON EFFICIENCY AND ECONOMY.

The law does not require the submission of the reports of the Commission
on Economy and Efficiency until the 31st of December. I shall therefore
not be able to submit a report of the work of that commission until the
assembling of Congress after the holidays.

CIVIL RETIREMENT AND CONTRIBUTORY PENSION SYSTEM.

I have already advocated, in my last annual message, the adoption of a
civil-service retirement system, with a contributory feature to it so as
to reduce to a minimum the cost to the Government of the pensions to be
paid. After considerable reflection, I am very much opposed to a pension
system that involves no contribution from the employees. I think the
experience of other governments justifies this view; but the crying
necessity for some such contributory system, with possibly a preliminary
governmental outlay, in order to cover the initial cost and to set the
system going at once while the contributions are accumulating, is
manifest on every side. Nothing will so much promote the economy and
efficiency of the Government as such a system.

ELIMINATION OF ALL LOCAL OFFICES FROM POLITICS.

I wish to renew again my recommendation that all the local offices
throughout the country, including collectors of internal revenue,
collectors of customs, postmasters of all four classes, immigration
commissioners and marshals, should be by law covered into the classified
service, the necessity for confirmation by the Senate be removed, and
the President and the others, whose time is now taken up in distributing
this patronage under the custom that has prevailed since the beginning
of the Government in accordance with the recommendation of the Senators
and Congressmen of the majority party, should be relieved from this
burden. I am confident that such a change would greatly reduce the cost
of administering the Government, and that it would add greatly to its
efficiency. It would take away the power to use the patronage of the
Government for political purposes. When officers are recommended by
Senators and Congressmen from political motives and for political
services rendered, it is impossible to expect that while in office the
appointees will not regard their tenure as more or less dependent upon
continued political service for their patrons, and no regulations,
however stiff or rigid, will prevent this, because such regulations, in
view of the method and motive for selection, are plainly inconsistent
and deemed hardly worthy of respect.

***

State of the Union Address
William H. Taft
December 3, 1912

PART I

To the Senate and House of Representatives:

The foreign relations of the United States actually and potentially
affect the state of the Union to a degree not widely realized and hardly
surpassed by any other factor in the welfare of the whole Nation. The
position of the United States in the moral, intellectual, and material
relations of the family of nations should be a matter of vital interest
to every patriotic citizen. The national prosperity and power impose
upon us duties which we can not shirk if we are to be true to our
ideals. The tremendous growth of the export trade of the United States
has already made that trade a very real factor in the industrial and
commercial prosperity of the country. With the development of our
industries the foreign commerce of the United States must rapidly become
a still more essential factor in its economic welfare. Whether we have a
farseeing and wise diplomacy and are not recklessly plunged into
unnecessary wars, and whether our foreign policies are based upon an
intelligent grasp of present-day world conditions and a clear view of
the potentialities of the future, or are governed by a temporary and
timid expediency or by narrow views befitting an infant nation, are
questions in the alternative consideration of which must convince any
thoughtful citizen that no department of national polity offers greater
opportunity for promoting the interests of the whole people on the one
hand, or greater chance on the other of permanent national injury, than
that which deals with the foreign relations of the United States.

The fundamental foreign policies of the United States should be raised
high above the conflict of partisanship and wholly dissociated from
differences as to domestic policy. In its foreign affairs the United
States should present to the world a united front. The intellectual,
financial, and industrial interests of the country and the publicist,
the wage earner, the farmer, and citizen of whatever occupation must
cooperate in a spirit of high patriotism to promote that national
solidarity which is indispensable to national efficiency and to the
attainment of national ideals.

The relations of the United States with all foreign powers remain upon a
sound basis of peace, harmony, and friendship. A greater insistence upon
justice to American citizens or interests wherever it may have been
denied and a stronger emphasis of the need of mutuality in commercial
and other relations have only served to strengthen our friendships with
foreign countries by placing those friendships upon a firm foundation of
realities as well as aspirations.

Before briefly reviewing the more important events of the last year in
our foreign relations, which it is my duty to do as charged with their
conduct and because diplomatic affairs are not of a nature to make it
appropriate that the Secretary of State make a formal annual report, I
desire to touch upon some of the essentials to the safe management of
the foreign relations of the United States and to endeavor, also, to
define clearly certain concrete policies which are the logical modern
corollaries of the undisputed and traditional fundamentals of the
foreign policy of the United States.

REORGANIZATION OF THE STATE DEPARTMENT

At the beginning of the present administration the United States, having
fully entered upon its position as a world power, with the
responsibilities thrust upon it by the results of the Spanish-American
War, and already engaged in laying the groundwork of a vast foreign
trade upon which it should one day become more and more dependent, found
itself without the machinery for giving thorough attention to, and
taking effective action upon, a mass of intricate business vital to
American interests in every country in the world.

The Department of State was an archaic and inadequate machine lacking
most of the attributes of the foreign office of any great modern power.
With an appropriation made upon my recommendation by the Congress on
August 5, 1909, the Department of State was completely reorganized.
There were created Divisions of Latin American Affairs and of Far
Eastern, Near Eastern, and Western European Affairs. To these divisions
were called from the foreign service diplomatic and consular officers
possessing experience and knowledge gained by actual service in
different parts of the world and thus familiar with political and
commercial conditions in the regions concerned. The work was highly
specialized. The result is that where previously this Government from
time to time would emphasize in its foreign relations one or another
policy, now American interests in every quarter of the globe are being
cultivated with equal assiduity. This principle of politico-geographical
division possesses also the good feature of making possible rotation
between the officers of the departmental, the diplomatic, and the
consular branches of the foreign service, and thus keeps the whole
diplomatic and consular establishments tinder the Department of State in
close touch and equally inspired with the aims and policy of the
Government. Through the newly created Division of Information the
foreign service is kept fully informed of what transpires from day to
day in the international relations of the country, and contemporary
foreign comment affecting American interests is promptly brought to the
attention of the department. The law offices of the department were
greatly strengthened. There were added foreign trade advisers to
cooperate with the diplomatic and consular bureaus and the
politico-geographical divisions in the innumerable matters where
commercial diplomacy or consular work calls for such special knowledge.
The same officers, together with the rest of the new organization, are
able at all times to give to American citizens accurate information as
to conditions in foreign countries with which they have business and
likewise to cooperate more effectively with the Congress and also with
the other executive departments.

MERIT SYSTEM IN CONSULAR AND DIPLOMATIC CORPS

Expert knowledge and professional training must evidently be the essence
of this reorganization. Without a trained foreign service there would
not be men available for the work in the reorganized Department of
State. President Cleveland had taken the first step toward introducing
the merit system in the foreign service. That had been followed by the
application of the merit principle, with excellent results, to the
entire consular branch. Almost nothing, however, had been done in this
direction with regard to the Diplomatic Service. In this age of
commercial diplomacy it was evidently of the first importance to train
an adequate personnel in that branch of the service. Therefore, on
November 26, 1909, by an Executive order I placed the Diplomatic Service
up to the grade of secretary of embassy, inclusive, upon exactly the
same strict nonpartisan basis of the merit system, rigid examination for
appointment and promotion only for efficiency, as had been maintained
without exception in the Consular Service.

STATISTICS AS TO MERIT AND NONPARTISAN CHARACTER OF APPOINTMENTS

How faithful to the merit system and how nonpartisan has been the
conduct of the Diplomatic and Consular Services in the last four years
may be judged from the following: Three ambassadors now serving held
their present rank at the beginning of my administration. Of the ten
ambassadors whom I have appointed, five were by promotion from the rank
of minister. Nine ministers now serving held their present rank at the
beginning of my administration. Of the thirty ministers whom I have
appointed, eleven were promoted from the lower grades of the foreign
service or from the Department of State. Of the nineteen missions in
Latin America, where our relations are close and our interest is great,
fifteen chiefs of mission are service men, three having entered the
service during this administration. Thirty-seven secretaries of embassy
or legation who have received their initial appointments after passing
successfully the required examination were chosen for ascertained
fitness, without regard to political affiliations. A dearth of
candidates from Southern and Western States has alone made it impossible
thus far completely to equalize all the States' representations in the
foreign service. In the effort to equalize the representation of the
various States in the Consular Service I have made sixteen of the
twenty-nine new appointments as consul which have occurred during my
administration from the Southern States. This is 55 per cent. Every
other consular appointment made, including the promotion of eleven young
men from the consular assistant and student interpreter corps, has been
by promotion or transfer, based solely upon efficiency shown in the
service.

In order to assure to the business and other interests of the United
States a continuance of the resulting benefits of this reform, I
earnestly renew my previous recommendations of legislation making it
permanent along some such lines as those of the measure now Pending in
Congress.

LARGER PROVISION FOR EMBASSIES AND LEGATIONS AND FOR OTHER EXPENSES OF
OUR FOREIGN REPRESENTATIVES RECOMMENDED

In connection with legislation for the amelioration of the foreign
service, I wish to invite attention to the advisability of placing the
salary appropriations upon a better basis. I believe that the best
results would be obtained by a moderate scale of salaries, with adequate
funds for the expense of proper representation, based in each case upon
the scale and cost of living at each post, controlled by a system of
accounting, and under the general direction of the Department of State.

In line with the object which I have sought of placing our foreign
service on a basis of permanency, I have at various times advocated
provision by Congress for the acquisition of Government-owned buildings
for the residence and offices of our diplomatic officers, so as to place
them more nearly on an equality with similar officers of other nations
and to do away with the discrimination which otherwise must necessarily
be made, in some cases, in favor of men having large private fortunes.
The act of Congress which I approved on February 17, 1911, was a right
step in this direction. The Secretary of State has already made the
limited recommendations permitted by the act for any one year, and it is
my hope that the bill introduced in the House of Representatives to
carry out these recommendations will be favorably acted on by the
Congress during its present session.

In some Latin-American countries the expense of government-owned
legations will be less than elsewhere, and it is certainly very urgent
that in such countries as some of the Republics of Central America and
the Caribbean, where it is peculiarly difficult to rent suitable
quarters, the representatives of the United States should be justly and
adequately provided with dignified and suitable official residences.
Indeed, it is high time that the dignity and power of this great Nation
should be fittingly signalized by proper buildings for the occupancy of
the Nation's representatives everywhere abroad.

DIPLOMACY A HAND MAID OF COMMERCIAL INTERCOURSE AND PEACE

The diplomacy of the present administration has sought to respond to
modern ideas of commercial intercourse. This policy has been
characterized as substituting dollars for bullets. It is one that
appeals alike to idealistic humanitarian sentiments, to the dictates of
sound policy and strategy, and to legitimate commercial aims. It I is an
effort frankly directed to the increase of American trade upon the
axiomatic principle that the Government of the United States shall
extend all proper support to every legitimate and beneficial American
enterprise abroad. How great have been the results of this diplomacy,
coupled with the maximum and minimum provision of the tariff law, will
be seen by some consideration of the wonderful increase in the export
trade of the United States. Because modern diplomacy is commercial,
there has been a disposition in some quarters to attribute to it none
but materialistic aims. How strikingly erroneous is such an impression
may be seen from a study of the results by which the diplomacy of the
United States can be judged.

SUCCESSFUL EFFORTS IN PROMOTION OF PEACE

In the field of work toward the ideals of peace this Government
negotiated, but to my regret was unable to consummate, two arbitration
treaties which set the highest mark of the aspiration of nations toward
the substitution of arbitration and reason for war in the settlement of
international disputes. Through the efforts of American diplomacy
several wars have been prevented or ended. I refer to the successful
tripartite mediation of the Argentine Republic, Brazil, and the United
States between Peru and Ecuador; the bringing of the boundary dispute
between Panama and Costa Rica to peaceful arbitration; the staying of
warlike preparations when Haiti and the Dominican Republic were on the
verge of hostilities; the stopping of a war in Nicaragua; the halting of
internecine strife in Honduras. The Government of the United States was
thanked for its influence toward the restoration of amicable relations
between the Argentine Republic and Bolivia. The diplomacy of the United
States is active in seeking to assuage the remaining ill-feeling between
this country and the Republic of Colombia. In the recent civil war in
China the United States successfully joined with the other interested
powers in urging an early cessation of hostilities. An agreement has
been reached between the Governments of Chile and Peru whereby the
celebrated Tacna-Arica dispute, which has so long embittered
international relations on the west coast of South America, has at last
been adjusted. Simultaneously came the news that the boundary dispute
between Peru and Ecuador had entered upon a stage of amicable
settlement. The position of the United States in reference to the
Tacna-Arica dispute between Chile and Peru has been one of
nonintervention, but one of friendly influence and pacific counsel
throughout the period during which the dispute in question has been the
subject of interchange of views between this Government and the two
Governments immediately concerned. In the general easing of
international tension on the west coast of South America the tripartite
mediation, to which I have referred, has been a most potent and
beneficent factor.

CHINA

In China the policy of encouraging financial investment to enable that
country to help itself has had the result of giving new life and
practical application to the open-door policy. The consistent purpose of
the present administration has been to encourage the use of American
capital in the development of China by the promotion of those essential
reforms to which China is pledged by treaties with the United States and
other powers. The hypothecation to foreign bankers in connection with
certain industrial enterprises, such as the Hukuang railways, of the
national revenues upon which these reforms depended, led the Department
of State early in the administration to demand for American citizens
participation in such enterprises, in order that the United States might
have equal rights and an equal voice in all questions pertaining to the
disposition of the public revenues concerned. The same policy of
promoting international accord among the powers having similar treaty
rights as ourselves in the matters of reform, which could not be put
into practical effect without the common consent of all, was likewise
adopted in the case of the loan desired by China for the reform of its
currency. The principle of international cooperation in matters of
common interest upon which our policy had already been based in all of
the above instances has admittedly been a great factor in that concert
of the powers which has been so happily conspicuous during the perilous
period of transition through which the great Chinese nation has been
passing.

CENTRAL AMERICA NEEDS OUR HELP IN DEBT ADJUSTMENT

In Central America the aim has been to help such countries as Nicaragua
and Honduras to help themselves. They are the immediate beneficiaries.
The national benefit to the United States is twofold. First, it is
obvious that the Monroe doctrine is more vital in the neighborhood of
the Panama Canal and the zone of the Caribbean than anywhere else.
There, too, the maintenance of that doctrine falls most heavily upon the
United States. It is therefore essential that the countries within that
sphere shall be removed from the jeopardy involved by heavy foreign debt
and chaotic national finances and from the ever-present danger of
international complications due to disorder at home. Hence the United
States has been glad to encourage and support American bankers who were
willing to lend a helping hand to the financial rehabilitation of such
countries because this financial rehabilitation and the protection of
their customhouses from being the prey of would be dictators would
remove at one stroke the menace of foreign creditors and the menace of
revolutionary disorder.

The second advantage of the United States is one affecting chiefly all
the southern and Gulf ports and the business and industry of the South.
The Republics of Central America and the Caribbean possess great natural
wealth. They need only a measure of stability and the means of financial
regeneration to enter upon an era of peace and prosperity, bringing
profit and happiness to themselves and at the same time creating
conditions sure to lead to a flourishing interchange of trade with this
country.

I wish to call your especial attention to the recent occurrences in
Nicaragua, for I believe the terrible events recorded there during the
revolution of the past summer-the useless loss of life, the devastation
of property, the bombardment of defenseless cities, the killing and
wounding of women and children, the torturing of noncombatants to exact
contributions, and the suffering of thousands of human beings-might have
been averted had the Department of State, through approval of the loan
convention by the Senate, been permitted to carry out its now
well-developed policy of encouraging the extending of financial aid to
weak Central American States with the primary objects of avoiding just
such revolutions by assisting those Republics to rehabilitate their
finances, to establish their currency on a stable basis, to remove the
customhouses from the danger of revolutions by arranging for their
secure administration, and to establish reliable banks.

During this last revolution in Nicaragua, the Government of that
Republic having admitted its inability to protect American life and
property against acts of sheer lawlessness on the part of the
malcontents, and having requested this Government to assume that office,
it became necessary to land over 2,000 marines and bluejackets in
Nicaragua. Owing to their presence the constituted Government of
Nicaragua was free to devote its attention wholly to its internal
troubles, and was thus enabled to stamp out the rebellion in a short
space of time. When the Red Cross supplies sent to Granada had been
exhausted, 8,000 persons having been given food in one day upon the
arrival of the American forces, our men supplied other unfortunate,
needy Nicaraguans from their own haversacks. I wish to congratulate the
officers and men of the United States navy and Marine Corps who took
part in reestablishing order in Nicaragua upon their splendid conduct,
and to record with sorrow the death of seven American marines and
bluejackets. Since the reestablishment of peace and order, elections
have been held amid conditions of quiet and tranquility. Nearly all the
American marines have now been withdrawn. The country should soon be on
the road to recovery. The only apparent danger now threatening Nicaragua
arises from the shortage of funds. Although American bankers have
already rendered assistance, they may naturally be loath to advance a
loan adequate to set the country upon its feet without the support of
some such convention as that of June, 1911, upon which the Senate has
not yet acted.

ENFORCEMENT OF NEUTRALITY LAWS

In the general effort to contribute to the enjoyment of peace by those
Republics which are near neighbors of the United States, the
administration has enforced the so-called neutrality statutes with a new
vigor, and those statutes were greatly strengthened in restricting the
exportation of arms and munitions by the joint resolution of last March.
It is still a regrettable fact that certain American ports are made the
rendezvous of professional revolutionists and others engaged in intrigue
against the peace of those Republics. It must be admitted that
occasionally a revolution in this region is justified as a real popular
movement to throw off the shackles of a vicious and tyrannical
government. Such was the Nicaraguan revolution against the Zelaya
regime. A nation enjoying our liberal institutions can not escape
sympathy with a true popular movement, and one so well justified. In
very many cases, however, revolutions in the Republics in question have
no basis in principle, but are due merely to the machinations of
conscienceless and ambitious men, and have no effect but to bring new
suffering and fresh burdens to an already oppressed people. The question
whether the use of American ports as foci of revolutionary intrigue can
be best dealt with by a further amendment to the neutrality statutes or
whether it would be safer to deal with special cases by special laws is
one worthy of the careful consideration of the Congress.

VISIT OF SECRETARY KNOX TO CENTRAL AMERICA AND THE CARIBBEAN

Impressed with the particular importance of the relations between the
United States and the Republics of Central America and the Caribbean
region, which of necessity must become still more intimate by reason of
the mutual advantages which will be presented by the opening of the
Panama Canal, I directed the Secretary of State last February to visit
these Republics for the purpose of giving evidence of the sincere
friendship and good will which the Government and people of the United
States bear toward them. Ten Republics were visited. Everywhere he was
received with a cordiality of welcome and a generosity of hospitality
such as to impress me deeply and to merit our warmest thanks. The
appreciation of the Governments and people of the countries visited,
which has been appropriately shown in various ways, leaves me no doubt
that his visit will conduce to that closer union and better
understanding between the United States and those Republics which I have
had it much at heart to promote.

OUR MEXICAN POLICY

For two years revolution and counter-revolution has distraught the
neighboring Republic of Mexico. Brigandage has involved a great deal of
depredation upon foreign interests. There have constantly recurred
questions of extreme delicacy. On several occasions very difficult
situations have arisen on our frontier. Throughout this trying period,
the policy of the United States has been one of patient nonintervention,
steadfast recognition of constituted authority in the neighboring
nation, and the exertion of every effort to care for American interests.
I profoundly hope that the Mexican nation may soon resume the path of
order, prosperity, and progress. To that nation in its sore troubles,
the sympathetic friendship of the United States has been demonstrated to
a high degree. There were in Mexico at the beginning of the revolution
some thirty or forty thousand American citizens engaged in enterprises
contributing greatly to the prosperity of that Republic and also
benefiting the important trade between the two countries. The investment
of American capital in Mexico has been estimated at $1,000,000,000. The
responsibility of endeavoring to safeguard those interests and the
dangers inseparable from propinquity to so turbulent a situation have
been great, but I am happy to have been able to adhere to the policy
above outlined-a policy which I hope may be soon justified by the
complete success of the Mexican people in regaining the blessings of
peace and good order.

AGRICULTURAL CREDITS

A most important work, accomplished in the past year by the American
diplomatic officers in Europe, is the investigation of the agricultural
credit system in the European countries. Both as a means to afford
relief to the consumers of this country through a more thorough
development of agricultural resources and as a means of more
sufficiently maintaining the agricultural population, the project to
establish credit facilities for the farmers is a concern of vital
importance to this Nation. No evidence of prosperity among
well-established farmers should blind us to the fact that lack of
capital is preventing a development of the Nation's agricultural
resources and an adequate increase of the land under cultivation; that
agricultural production is fast falling behind the increase in
population; and that, in fact, although these well-established farmers
are maintained in increasing prosperity because of the natural increase
in population, we are not developing the industry of agriculture. We are
not breeding in proportionate numbers a race of independent and
independence-loving landowners, for a lack of which no growth of cities
can compensate. Our farmers have been our mainstay in times of crisis,
and in future it must still largely be upon their stability and common
sense that this democracy must rely to conserve its principles of
self-government.

The need of capital which American farmers feel to-day had been
experienced by the farmers of Europe, with their centuries-old farms,
many years ago. The problem had been successfully solved in the Old
World and it was evident that the farmers of this country might profit
by a study of their systems. I therefore ordered, through the Department
of State, an investigation to be made by the diplomatic officers in
Europe, and I have laid the results of this investigation before the
governors of the various States with the hope that they will be used to
advantage in their forthcoming meeting.

INCREASE OF FOREIGN TRADE

In my last annual message I said that the fiscal year ended June 30,
1911, was noteworthy as marking the highest record of exports of
American products to foreign countries. The fiscal year 1912 shows that
this rate of advance has been maintained, the total domestic exports
having a valuation approximately Of $2,200,000,000, as compared with a
fraction over $2,000,000,000 the previous year. It is also significant
that manufactured and partly manufactured articles continue to be the
chief commodities forming the volume of our augmented exports, the
demands of our own people for consumption requiring that an increasing
proportion of our abundant agricultural products be kept at home. In the
fiscal year 1911 the exports of articles in the various stages of
manufacture, not including foodstuffs partly or wholly manufactured,
amounted approximately to $907,500,000. In the fiscal year 1912 the
total was nearly $1,022,000,000, a gain Of $114,000,000.

ADVANTAGE OF MAXIMUM AND MINIMUM TARIFF PROVISION

The importance which our manufactures have assumed in the commerce of
the world in competition with the manufactures of other countries again
draws attention to the duty of this Government to use its utmost
endeavors to secure impartial treatment for American products in all
markets. Healthy commercial rivalry in international intercourse is best
assured by the possession of proper means for protecting and promoting
our foreign trade. It is natural that competitive countries should view
with some concern this steady expansion of our commerce. If in some
instance the measures taken by them to meet it are not entirely
equitable, a remedy should be found. In former messages I have described
the negotiations of the Department of State with foreign Governments for
the adjustment of the maximum and minimum tariff as provided in section
2 of the tariff law of 1909. The advantages secured by the adjustment of
our trade relations under this law have continued during the last year,
and some additional cases of discriminatory treatment of which we had
reason to complain have been removed. The Department of State has for
the first time in the history of this country obtained substantial
most-favored-nation treatment from all the countries of the world. There
are, however, other instances which, while apparently not constituting
undue discrimination in the sense of section 2, are nevertheless
exceptions to the complete equity of tariff treatment for American
products that the Department of State consistently has sought to obtain
for American commerce abroad.

NECESSITY FOR SUPPLEMENTARY LEGISLATION

These developments confirm the opinion conveyed to you in my annual
message of 1911, that while the maximum and minimum provision of the
tariff law of 1909 has been fully justified by the success achieved in
removing previously existing undue discriminations against American
products, yet experience has shown that this feature of the law should
be amended in such way as to provide a fully effective means of meeting
the varying degrees of discriminatory treatment of American commerce in
foreign countries still encountered, as well as to protect against
injurious treatment on the part of foreign Governments, through either
legislative or administrative measures, the financial interests abroad
of American citizens whose enterprises enlarge the market for American
commodities.

I can not too strongly recommend to the Congress the passage of some
such enabling measure as the bill which was recommended by the Secretary
of State in his letter of December 13, 1911. The object of the proposed
legislation is, in brief, to enable the Executive to apply, as the case
may require, to any or all commodities, whether or not on the free list
from a country which discriminates against the United States, a
graduated scale of duties up to the maximum Of 25 per cent ad valorem
provided in the present law. Flat tariffs are out of date. Nations no
longer accord equal tariff treatment to all other nations irrespective
of the treatment from them received. Such a flexible power at the
command of the Executive would serve to moderate any unfavorable
tendencies on the part of those countries from which the importations
into the United States are substantially confined to articles on the
free list as well as of the countries which find a lucrative market in
the United States for their products under existing customs rates. It is
very necessary that the American Government should be equipped with
weapons of negotiation adapted to modern economic conditions, in order
that we may at all times be in a position to gain not only technically
just but actually equitable treatment for our trade, and also for
American enterprise and vested interests abroad.

BUSINESS SECURED TO OUR COUNTRY BY DIRECT OFFICIAL EFFORT

As illustrating the commercial benefits of the Nation derived from the
new diplomacy and its effectiveness upon the material as well as the
more ideal side, it may be remarked that through direct official efforts
alone there have been obtained in the course of this administration,
contracts from foreign Governments involving an expenditure of
$50,000,000 in the factories of the United States. Consideration of this
fact and some reflection upon the necessary effects of a scientific
tariff system and a foreign service alert and equipped to cooperate with
the business men of America carry the conviction that the gratifying
increase in the export trade of this country is, in substantial amount,
due to our improved governmental methods of protecting and stimulating
it. It is germane to these observations to remark that in the two years
that have elapsed since the successful negotiation of our new treaty
with Japan, which at the time seemed to present so many practical
difficulties, our export trade to that country has increased at the rate
of over $1,000,000 a month. Our exports to Japan for the year ended June
30, 1910, were $21,959,310, while for the year ended June 30, 1912, the
exports were $53,478,046, a net increase in the sale of American
products of nearly 150 per cent.

SPECIAL CLAIMS ARBITRATION WITH GREAT BRITAIN

Under the special agreement entered into between the United States and
Great Britain on August 18, 1910, for the arbitration of outstanding
pecuniary claims, a schedule of claims and the terms of submission have
been agreed upon by the two Governments, and together with the special
agreement were approved by the Senate on July 19, 1911, but in
accordance with the terms of the agreement they did not go into effect
until confirmed by the two Governments by an exchange of notes, which
was done on April 26 last. Negotiations, are still in progress for a
supplemental schedule of claims to be submitted to arbitration under
this agreement, and meanwhile the necessary preparations for the
arbitration of the claims included in the first schedule have been
undertaken and are being carried on under the authority of an
appropriation made for that purpose at the last session of Congress. It
is anticipated that the two Governments will be prepared to call upon
the arbitration tribunal, established under this agreement, to meet at
Washington early next year to proceed with this arbitration.

FUR SEAL TREATY AND NEED FOR AMENDMENT OF OUR STATUTE

The act adopted at the last session of Congress to give effect to the
fur-seal convention Of July 7, 1911, between Great Britain, Japan,
Russia, and the United States provided for the suspension of all land
killing of seals on the Pribilof Islands for a period of five years, and
an objection has now been presented to this provision by the other
parties in interest, which raises the issue as to whether or not this
prohibition of land killing is inconsistent with the spirit, if not the
letter, of the treaty stipulations. The justification of establishing
this close season depends, under the terms of the convention, upon how
far, if at all, it is necessary for protecting and preserving the
American fur-seal herd and for increasing its number. This is a question
requiring examination of the present condition of the herd and the
treatment which it needs in the light of actual experience and
scientific investigation. A careful examination of the subject is now
being made, and this Government will soon be in possession of a
considerable amount of new information about the American seal herd,
which has been secured during the past season and will be of great value
in determining this question; and if it should appear that there is any
uncertainty as to the real necessity for imposing a close season at this
time I shall take an early opportunity to address a special message to
Congress on this subject, in the belief that this Government should
yield on this point rather than give the slightest ground for the charge
that we have been in any way remiss in observing our treaty obligations.

FINAL SETTLEMENT OF NORTH ATLANTIC FISHERIES DISPUTE

On the 20th of July last an agreement was concluded between the United
States and Great Britain adopting, with certain modifications, the rules
and method of procedure recommended in the award rendered by the North
Atlantic Coast Fisheries Arbitration Tribunal on September 7, 1910, for
the settlement hereafter, in accordance with the principles laid down in
the award, of questions arising with reference to the exercise of the
American fishing liberties under Article I of the treaty of October 20,
1818, between the United States and Great Britain. This agreement
received the approval of the Senate on August I and was formally
ratified by the two Governments on November 15 last. The rules and a
method of procedure embodied in the award provided for determining by an
impartial tribunal the reasonableness of any new fishery regulations on
the treaty coasts of Newfoundland and Canada before such regulations
could be enforced against American fishermen exercising their treaty
liberties on those coasts, and also for determining the delimitation of
bays on such coasts more than 10 miles wide, in accordance with the
definition adopted by the tribunal of the meaning of the word "bays" as
used in the treaty. In the subsequent negotiations between the two
Governments, undertaken for the purpose of giving practical effect to
these rules and methods of procedure, it was found that certain
modifications therein were desirable from the point of view of both
Governments, and these negotiations have finally resulted in the
agreement above mentioned by which the award recommendations as modified
by mutual consent of the two Governments are finally adopted and made
effective, thus bringing this century-old controversy to a final
conclusion, which is equally beneficial and satisfactory to both
Governments.

IMPERIAL VALLEY AND MEXICO

In order to make possible the more effective performance of the work
necessary for the confinement in their present channel of the waters of
the lower Colorado River, and thus to protect the people of the Imperial
Valley, as well as in order to reach with the Government of Mexico an
understanding regarding the distribution of the waters of the Colorado
River, in which both Governments are much interested, negotiations are
going forward with a view to the establishment of a preliminary Colorado
River commission, which shall have the powers necessary to enable it to
do the needful work and with authority to study the question of the
equitable distribution of the waters. There is every reason to believe
that an understanding upon this point will be reached and that an
agreement will be signed in the near future.

CHAMIZAL DISPUTE

In the interest of the people and city of El Paso this Government has
been assiduous in its efforts to bring to an early settlement the
long-standing Chamizal dispute with Mexico. Much has been accomplished,
and while the final solution of the dispute is not immediate, the
favorable attitude lately assumed by the Mexican Government encourages
the hope that this troublesome question will be satisfactorily and
definitively settled at an early day.

INTERNATIONAL COMMISSION OF JURISTS

In pursuance of the convention of August 23, 1906, signed at the Third
Pan American Conference, held at Rio de Janeiro, the International
Commission of jurists met at that capital during the month of last June.
At this meeting 16 American Republics were represented, including the
United States, and comprehensive plans for the future work of the
commission were adopted. At the next meeting fixed for June, 1914,
committees already appointed are instructed to I report regarding topics
assigned to them.

OPIUM CONFERENCE-UNFORTUNATE FAILURE OF OUR GOVERNMENT TO ENACT
RECOMMENDED LEGISLATION

In my message on foreign relations communicated to the two Houses of
Congress December 7, 1911, I called especial attention to the assembling
of the Opium Conference at The Hague, to the fact that that conference
was to review all pertinent municipal laws relating to the opium and
allied evils, and certainly all international rules regarding these
evils, and to the -fact that it seemed to me most essential that the
Congress should take immediate action on the anti-narcotic legislation
before the Congress, to which I had previously called attention by a
special message.

The international convention adopted by the conference conforms almost
entirely to the principles contained in the proposed anti-narcotic
legislation which has been before the last two Congresses. It was most
unfortunate that this Government, having taken the initiative in the
international action which eventuated in the important international
opium convention, failed to do its share in the great work by neglecting
to pass the necessary legislation to correct the deplorable narcotic
evils in the United States as well as to redeem international pledges
upon which it entered by virtue of the above-mentioned convention. The
Congress at its present session should enact into law those bills now
before it which have been so carefully drawn up in collaboration between
the Department of State and the other executive departments, and which
have behind them not only the moral sentiment of the country, but the
practical support of all the legitimate trade interests likely to be
affected. Since the international convention was signed, adherence to it
has been made by several European States not represented at the
conference at The Hague and also by seventeen Latin-American Republics.

EUROPE AND THE NEAR EAST

The war between Italy and Turkey came to a close in October last by the
signature of a treaty of peace, subsequently to which the Ottoman Empire
renounced sovereignty over Cyrenaica and Tripolitania in favor of Italy.
During the past year the Near East has unfortunately been the theater of
constant hostilities. Almost simultaneously with the conclusion of peace
between Italy and Turkey and their arrival at an adjustment of the
complex questions at issue between them, war broke out between Turkey on
the one hand and Bulgaria, Greece, Montenegro, and Servia on the other.
The United States has happily been involved neither directly nor
indirectly with the causes or questions incident to any of these
hostilities and has maintained in regard to them an attitude of absolute
neutrality and of complete political disinterestedness. In the second
war in which the Ottoman Empire has been engaged the loss of life and
the consequent distress on both sides have been appalling, and the
United States has found occasion, in the interest of humanity, to carry
out the charitable desires of the American people, to extend a measure
of relief to the sufferers on either side through the impartial medium
of the Red Cross. Beyond this the chief care of the Government of the
United States has been to make due provision for the protection of its
national resident in belligerent territory. In the exercise of my duty
in this matter I have dispatched to Turkish waters a special-service
squadron, consisting of two armored cruisers, in order that this
Government may if need be bear its part in such measures as it may be
necessary for the interested nations to adopt for the safeguarding of
foreign lives and property in the Ottoman Empire in the event that a
dangerous situation should develop. In the meanwhile the several
interested European powers have promised to extend to American citizens
the benefit of such precautionary or protective measures as they might
adopt, in the same manner in which it has been the practice of this
Government to extend its protection to all foreign residents in those
countries of the Western Hemisphere in which it has from time to time
been the task of the United States to act in the interest of peace and
good order. The early appearance of a large fleet of European warships
in the Bosphorus apparently assured the protection of foreigners in that
quarter, where the presence of the American stationnaire the U. S. S.
Scorpion sufficed, tinder the circumstances, to represent the United
States. Our cruisers were thus left free to act if need be along the
Mediterranean coasts should any unexpected contingency arise affecting
the numerous American interests in the neighborhood of Smyrna and
Beirut.

SPITZBERGEN

The great preponderance of American material interests in the sub-arctic
island of Spitzbergen, which has always been regarded politically as "no
man's land," impels this Government to a continued and lively interest
in the international dispositions to be made for the political
governance and administration of that region. The conflict of certain
claims of American citizens and others is in a fair way to adjustment,
while the settlement of matters of administration, whether by
international conference of the interested powers or otherwise,
continues to be the subject of exchange of views between the Governments
concerned.

LIBERIA

As a result of the efforts of this Government to place the Government of
Liberia in position to pay its outstanding indebtedness and to maintain
a stable and efficient government, negotiations for a loan of $1,700,000
have been successfully concluded, and it is anticipated that the payment
of the old loan and the issuance of the bonds of the 1912 loan for the
rehabilitation of the finances of Liberia will follow at an early date,
when the new receivership will go into active operation. The new
receivership will consist of a general receiver of customs designated by
the Government of the United States and three receivers of customs
designated by the Governments of Germany, France, and Great Britain,
which countries have commercial interests in the Republic of Liberia.

In carrying out the understanding between the Government of Liberia and
that of the United States, and in fulfilling the terms of the agreement
between the former Government and the American bankers, three competent
ex-army officers are now effectively employed by the Liberian Government
in reorganizing the police force of the Republic, not only to keep in
order the native tribes in the hinterland but to serve as a necessary
police force along the frontier. It is hoped that these measures will
assure not only the continued existence but the prosperity and welfare
of the Republic of Liberia. Liberia possesses fertility of soil and
natural resources, which should insure to its people a reasonable
prosperity. It was the duty of the United States to assist the Republic
of Liberia in accordance with our historical interest and moral
guardianship of a community founded by American citizens, as it was also
the duty of the American Government to attempt to assure permanence to a
country of much sentimental and perhaps future real interest to a large
body of our citizens.

MOROCCO

The legation at Tangier is now in charge of our consul general, who is
acting as charge d'affaires, as well as caring for our commercial
interests in that country. In view of the fact that many of the foreign
powers are now represented by charges d'affaires it has not been deemed
necessary to appoint at the present time a minister to fill a vacancy
occurring in that post.

THE FAR EAST

The political disturbances in China in the autumn and winter of 1911-12
resulted in the abdication of the Manchu rulers on February 12, followed
by the formation of a provisional republican government empowered to
conduct the affairs of the nation until a permanent government might be
regularly established. The natural sympathy of the American people with
the assumption of republican principles by the Chinese people was
appropriately expressed in a concurrent resolution of Congress on April
17, 1912. A constituent assembly, composed of representatives duly
chosen by the people of China in the elections that are now being held,
has been called to meet in January next to adopt a permanent
constitution and organize the Government of the nascent Republic. During
the formative constitutional stage and pending definite action by the
assembly, as expressive of the popular will, and the hoped-for
establishment of a stable republican form of government, capable of
fulfilling its international obligations, the United States is,
according to precedent, maintaining full and friendly de facto relations
with the provisional Government.

The new condition of affairs thus created has presented many serious and
complicated problems, both of internal rehabilitation and of
international relations, whose solution it was realized would
necessarily require much time and patience. From the beginning of the
upheaval last autumn it was felt by the United States, in common with
the other powers having large interests in China, that independent
action by the foreign Governments in their own individual interests
would add further confusion to a situation already complicated. A policy
of international cooperation was accordingly adopted in an
understanding, reached early in the disturbances, to act together for
the protection of the lives and property of foreigners if menaced, to
maintain an attitude of strict impartiality as between the contending
factions, and to abstain from any endeavor to influence the Chinese in
their organization of a new form of government. In view of the
seriousness of the disturbances and their general character, the
American minister at Peking was instructed at his discretion to advise
our nationals in the affected districts to concentrate at such centers
as were easily accessible to foreign troops or men of war. Nineteen of
our naval vessels were stationed at various Chinese ports, and other
measures were promptly taken for the adequate protection of American
interests.

It was further mutually agreed, in the hope of hastening an end to
hostilities, that none of the interested powers would approve the making
of loans by its nationals to either side. As soon, however, as a united
provisional Government of China was assured, the United States joined in
a favorable consideration of that Government's request for advances
needed for immediate administrative necessities and later for a loan to
effect a permanent national reorganization. The interested Governments
had already, by common consent, adopted, in respect to the purposes,
expenditure, and security of any loans to China made by their nationals,
certain conditions which were held to be essential, not only to secure
reasonable protection for the foreign investors, but also to safeguard
and strengthen China's credit by discouraging indiscriminate borrowing
and by insuring the application of the funds toward the establishment of
the stable and effective government necessary to China's welfare. In
June last representative banking groups of the United States, France,
Germany, Great Britain, Japan, and Russia formulated, with the general
sanction of their respective Governments, the guaranties that would be
expected in relation to the expenditure and security of the large
reorganization loan desired by China, which, however, have thus far
proved unacceptable to the provisional Government.

SPECIAL MISSION OF CONDOLENCE TO JAPAN

In August last I accredited the Secretary of State as special ambassador
to Japan, charged with the mission of bearing to the imperial family,
the Government, and the people of that Empire the sympathetic message of
the American Commonwealth oil the sad occasion of the death of His
Majesty the Emperor Mutsuhito, whose long and benevolent reign was the
greater part of Japan's modern history. The kindly reception everywhere
accorded to Secretary Knox showed that his mission was deeply
appreciated by the Japanese nation and emphasized strongly the friendly
relations that have for so many years existed between the two peoples.

SOUTH AMERICA

Our relations with the Argentine Republic are most friendly and cordial.
So, also, are our relations with Brazil, whose Government has accepted
the invitation of the United States to send two army officers to study
at the Coast Artillery School at Fort Monroe. The long-standing Alsop
claim, which had been the only hindrance to the healthy growth of the
most friendly relations between the United States and Chile, having been
eliminated through the submission of the question to His Britannic
Majesty King George V as "amiable compositeur," it is a cause of much
gratification to me that our relations with Chile are now established
upon a firm basis of growing friendship. The Chilean Government has
placed an officer of the United States Coast Artillery in charge of the
Chilean Coast Artillery School, and has shown appreciation of American
methods by confiding to an American firm important work for the Chilean
coast defenses.

Last year a revolution against the established Government of Ecuador
broke out at the principal port of that Republic. Previous to this
occurrence the chief American interest in Ecuador, represented by the
Guayaquil & Quito Railway Co., incorporated in the United States, had
rendered extensive transportation and other services on account to the
Ecuadorian Government, the amount of which ran into a sum which was
steadily increasing and which the Ecuadorian Government had made no
provision to pay, thereby threatening to crush out the very existence of
this American enterprise. When tranquillity had been restored to Ecuador
as a result of the triumphant progress of the Government forces from
Quito, this Government interposed its good offices to the end that the
American interests in Ecuador might be saved from complete extinction.
As a part of the arrangement which was reached between the parties, and
at the request of the Government of Ecuador, I have consented to name an
arbitrator, who, acting under the terms of the railroad contract, with
an arbitrator named by the Ecuadorian Government, will pass upon the
claims that have arisen since the arrangement reached through the action
of a similar arbitral tribunal in 1908.

In pursuance of a request made some time ago by the Ecuadorian
Government, the Department of State has given much attention to the
problem of the proper sanitation of Guayaquil. As a result a detail of
officers of the Canal Zone will be sent to Guayaquil to recommend
measures that will lead to the complete permanent sanitation of this
plague and fever infected region of that Republic, which has for so long
constituted a menace to health conditions on the Canal Zone. It is hoped
that the report which this mission will furnish will point out a way
whereby the modicum of assistance which the United States may properly
lend the Ecuadorian Government may be made effective in ridding the west
coast of South America of a focus of contagion to the future commercial
current passing through the Panama Canal.

In the matter of the claim of John Celestine Landreau against the
Government of Peru, which claim arises out of certain contracts and
transactions in connection with the discovery and exploitation of guano,
and which has been under discussion between the two Governments since
1874, I am glad to report that as the result of prolonged negotiations,
which have been characterized by the utmost friendliness and good will
on both sides, the Department of State has succeeded in securing the
consent of Peru to the arbitration of the claim, and that the
negotiations attending the drafting and signature of a protocol
submitting the claim to an arbitral tribunal are proceeding with due
celerity.

An officer of the American Public Health Service and an American
sanitary engineer are now on the way to Iquitos, in the employ of the
Peruvian Government, to take charge of the sanitation of that river
port. Peru is building a number of submarines in this country, and
continues to show every desire to have American capital invested in the
Republic.

In July the United States sent undergraduate delegates to the Third
International Students Congress held at Lima, American students having
been for the first time invited to one of these meetings.

The Republic of Uruguay has shown its appreciation of American
agricultural and other methods by sending a large commission to this
country and by employing many American experts to assist in building up
agricultural and allied industries in Uruguay.

Venezuela is paying off the last of the claims the settlement of which
was provided for by the Washington protocols, including those of
American citizens. Our relations with Venezuela are most cordial, and
the trade of that Republic with the United States is now greater than
with any other country.

CENTRAL AMERICA AND THE CARIBBEAN

During the past summer the revolution against the administration which
followed the assassination of President Caceres a year ago last November
brought the Dominican Republic to the verge of administrative chaos,
without offering any guaranties of eventual stability in the ultimate
success of either party. In pursuance of the treaty relations of the
United States with the Dominican Republic, which were threatened by the
necessity of suspending the operation under American administration of
the customhouses on the Haitian frontier, it was found necessary to
dispatch special commissioners to the island to reestablish the
customhouses and with a guard sufficient to insure needed protection to
the customs administration. The efforts which have been made appear to
have resulted in the restoration of normal conditions throughout the
Republic. The good offices which the commissioners were able to exercise
were instrumental in bringing the contending parties together and in
furnishing a basis of adjustment which it is hoped will result in
permanent benefit to the Dominican people.

Mindful of its treaty relations, and owing to the position of the
Government of the United States as mediator between the Dominican
Republic and Haiti in their boundary dispute, and because of the further
fact that the revolutionary activities on the Haitian-Dominican frontier
had become so active as practically to obliterate the line of
demarcation that had been heretofore recognized pending the definitive
settlement of the boundary in controversy, it was found necessary to
indicate to the two island Governments a provisional de facto boundary
line. This was done without prejudice to the rights or obligations of
either country in a final settlement to be reached by arbitration. The
tentative line chosen was one which, under the circumstances brought to
the knowledge of this Government, seemed to conform to the best
interests of the disputants. The border patrol which it had been found
necessary to reestablish for customs purposes between the two countries
was instructed provisionally to observe this line.

The Republic of Cuba last May was in the throes of a lawless uprising
that for a time threatened the destruction of a great deal of valuable
property-much of it owned by Americans and other foreigners-as well as
the existence of the Government itself. The armed forces of Cuba being
inadequate to guard property from attack and at the same time properly
to operate against the rebels, a force of American marines was
dispatched from our naval station at Guantanamo into the Province of
Oriente for the protection of American and other foreign life and
property. The Cuban Government was thus able to use all its forces in
putting down the outbreak, which it succeeded in doing in a period of
six weeks. The presence of two American warships in the harbor of Habana
during the most critical period of this disturbance contributed in great
measure to allay the fears of the inhabitants, including a large foreign
colony.

There has been under discussion with the Government of Cuba for some
time the question of the release by this Government of its leasehold
rights at Bahia Honda, on the northern coast of Cuba, and the
enlargement, in exchange therefor, of the naval station which has been
established at Guantanamo Bay, on the south. As the result of the
negotiations thus carried on an agreement has been reached between the
two Governments providing for the suitable enlargement of the Guantanamo
Bay station upon terms which are entirely fair and equitable to all
parties concerned.

At the request alike of the Government and both political parties in
Panama, an American commission undertook supervision of the recent
presidential election in that Republic, where our treaty relations, and,
indeed, every geographical consideration, make the maintenance of order
and satisfactory conditions of peculiar interest to the Government of
the United States. The elections passed without disorder, and the new
administration has entered upon its functions.

The Government of Great Britain has asked the support of the United
States for the protection of the interests of British holders of the
foreign bonded debt of Guatemala. While this Government is hopeful of an
arrangement equitable to the British bondholders, it is naturally unable
to view the question apart from its relation to the broad subject of
financial stability in Central America, in which the policy of the
United States does not permit it to escape a vital interest. Through a
renewal of negotiations between the Government of Guatemala and American
bankers, the aim of which is a loan for the rehabilitation of Guatemalan
finances, a way appears to be open by which the Government of Guatemala
could promptly satisfy any equitable and just British claims, and at the
same time so improve its whole financial position as to contribute
greatly to the increased prosperity of the Republic and to redound to
the benefit of foreign investments and foreign trade with that country.
Failing such an arrangement, it may become impossible for the Government
of the United States to escape its obligations in connection with such
measures as may become necessary to exact justice to legitimate foreign
claims.

In the recent revolution in Nicaragua, which, it was generally admitted,
might well have resulted in a general Central American conflict but for
the intervention of the United States, the Government of Honduras was
especially menaced; but fortunately peaceful conditions were maintained
within the borders of that Republic. The financial condition of that
country remains unchanged, no means having been found for the final
adjustment of pressing outstanding foreign claims. This makes it the
more regrettable that the financial convention between the United States
and Honduras has thus far failed of ratification. The Government of the
United States continues to hold itself ready to cooperate with the
Government of Honduras, which it is believed, can not much longer delay
the meeting of its foreign obligations, and it is hoped at the proper
time American bankers will be willing to cooperate for this purpose.

NECESSITY FOR GREATER GOVERNMENTAL EFFORT IN RETENTION AND EXPANSION OF
OUR FOREIGN TRADE

It is not possible to make to the Congress a communication upon the
present foreign relations of the United States so detailed as to convey
an adequate impression of the enormous increase in the importance and
activities of those relations. If this Government is really to preserve
to the American people that free opportunity in foreign markets which
will soon be indispensable to our prosperity, even greater efforts must
be made. Otherwise the American merchant, manufacturer, and exporter
will find many a field in which American trade should logically
predominate preempted through the more energetic efforts of other
governments and other commercial nations.

There are many ways in which through hearty cooperation the legislative
and executive branches of this Government can do much. The absolute
essential is the spirit of united effort and singleness of purpose. I
will allude only to a very few specific examples of action which ought
then to result. America can not take its proper place in the most
important fields for its commercial activity and enterprise unless we
have a merchant marine. American commerce and enterprise can not be
effectively fostered in those fields unless we have good American banks
in the countries referred to. We need American newspapers in those
countries and proper means for public information about them. We need to
assure the permanency of a trained foreign service. We need legislation
enabling the members of the foreign service to be systematically brought
in direct contact with the industrial, manufacturing, and exporting
interests of this country in order that American business men may enter
the foreign field with a clear perception of the exact conditions to be
dealt with and the officers themselves may prosecute their work with a
clear idea of what American industrial and manufacturing interests
require.

CONCLUSION

Congress should fully realize the conditions which obtain in the world
as we find ourselves at the threshold of our middle age as a Nation. We
have emerged full grown as a peer in the great concourse of nations. We
have passed through various formative periods. We have been
self-centered in the struggle to develop our domestic resources and deal
with our domestic questions. The Nation is now too matured to continue
in its foreign relations those temporary expedients natural to a people
to whom domestic affairs are the sole concern. In the past our diplomacy
has often consisted, in normal times, in a mere assertion of the right
to international existence. We are now in a larger relation with broader
rights of our own and obligations to others than ourselves. A number of
great guiding principles were laid down early in the history of this
Government. The recent task of our diplomacy has been to adjust those
principles to the conditions of to-day, to develop their corollaries, to
find practical applications of the old principles expanded to meet new
situations. Thus are being evolved bases upon which can rest the
superstructure of policies which must grow with the destined progress of
this Nation. The successful conduct of our foreign relations demands a
broad and a modern view. We can not meet new questions nor build for the
future if we confine ourselves to outworn dogmas of the past and to the
perspective appropriate at our emergence from colonial times and
conditions. The opening of the Panama Canal will mark a new era in our
international life and create new and worldwide conditions which, with
their vast correlations and consequences, will obtain for hundreds of
years to come. We must not wait for events to overtake us unawares. With
continuity of purpose we must deal with the problems of our external
relations by a diplomacy modern, resourceful, magnanimous, and fittingly
expressive of the high ideals of a great nation.

PART II. [On Fiscal, judicial, Military and Insular Affairs.] THE WHITE
HOUSE, December 6, 1912. To the Senate and House of Representatives:

On the 3d of December I sent a message to the Congress, which was
confined to our foreign relations. The Secretary of State makes no
report to the President or to Congress, and a review of the history of
the transactions of the State Department in one year must therefore be
included by the President in his annual message or Congress will not be
fully informed of them. A full discussion of all the transactions of the
Government, with a view to informing the Congress of the important
events of the year and recommending new legislation, requires more space
than one message of reasonable length affords. I have therefore adopted
the course of sending three or four messages during the first ten days
of the session, so as to include reference to the more important matters
that should be brought to the attention of the Congress.

BUSINESS CONDITIONS

The condition of the country with reference to business could hardly be
better. While the four years of the administration now drawing to a
close have not developed great speculative expansion or a wide field of
new investment, the recovery and progress made from the depressing
conditions following the panic of 1907 have been steady and the
improvement has been clear and easily traced in the statistics. The
business of the country is now on a solid basis. Credits are not unduly
extended, and every phase of the situation seems in a state of
preparedness for a period of unexampled prosperity. Manufacturing
concerns are running at their full capacity and the demand for labor was
never so constant and growing. The foreign trade of the country for this
year will exceed $4,000,000,000, while the balance in our favor-that of
the excess of exports over imports-will exceed $500,000,000. More than
half our exports are manufactures or partly manufactured material, while
our exports of farm products do not show the same increase because of
domestic consumption. It is a year of bumper crops; the total money
value of farm products will exceed $9,500,000,000. It is a year when the
bushel or unit price of agricultural products has gradually fallen, and
yet the total value of the entire crop is greater by over $1,000,000,000
than we have known in our history.

CONDITION OF THE TREASURY

The condition of the Treasury is very satisfactory. The total
interest-bearing debt is $963,777,770, of which $134,631,980 constitute
the Panama Canal loan. The noninterest-bearing debt is $378,301,284.90,
including $346,681,016 of greenbacks. We have in the Treasury
$150,000,000 in gold coin as a reserve against the outstanding
greenbacks; and in addition we have a cash balance in the Treasury as a
general fund of $167,152,478.99, or an increase of $26,975,552 over the
general fund last year.

RECEIPTS AND EXPENDITURES

For three years the expenditures of the Government have decreased under
the influence of an effort to economize. This year presents an apparent
exception. The estimate by the Secretary of the Treasury of the ordinary
receipts, exclusive of postal revenues, for the year ending June 30,
1914, indicates that they will amount to $710,000,000. The sum of the
estimates of the expenditures for that same year, exclusive of Panama
Canal disbursements and postal disbursements payable from postal
revenues, is $732,000,000, indicating a deficit Of $22,000,000. For the
year ending June 30, 1913, similarly estimated receipts were
$667,000,000, while the total corresponding estimate of expenditures for
that year, submitted through the Secretary of the Treasury to Congress,
amounted to $656,000,000. This shows an increase of $76,000,000 in the
estimates for 1914 over the total estimates of 1913. This is due to an
increase Of $25,000,000 in the estimate for rivers and harbors for the
next year on projects and surveys authorized by Congress; to an increase
under the new pension bill Of $32,500,000; and to an increase in the
estimates for expenses of the Navy Department Of $24,000,000. The
estimate for the Navy Department for the year 1913 included two
battleships. Congress made provision for only one battleship, and
therefore the Navy Department has deemed it necessary and proper to make
an estimate which includes the first year's expenditure for three
battleships in addition to the amount required for work on the
uncompleted ships now under construction. In addition to the natural
increase in the expenditures for the uncompleted ships, and the
additional battleship estimated for, the other increases are due to the
pay required for 4,000 or more additional enlisted men in the Navy; and
to this must be added the additional cost of construction imposed by the
change in the eight-hour law which makes it applicable to ships built in
private shipyards.

With the exceptions of these three items, the estimates show a reduction
this year below the total estimates for 1913 of more than $5,000,000.

The estimates for Panama Canal construction for 1914 are $17,000,000
less than for 1913.

OUR BANKING AND CURRENCY SYSTEM

A time when panics seem far removed is the best time for us to prepare
our financial system to withstand a storm. The most crying need this
country has is a proper banking and currency system. The existing one is
inadequate, and everyone who has studied the question admits it.

It is the business of the National Government to provide a medium,
automatically contracting and expanding in volume, to meet the needs of
trade. Our present system lacks the indispensable quality of elasticity.

The only part of our monetary medium that has elasticity is the
bank-note currency. The peculiar provisions of the law requiring
national banks to maintain reserves to meet the call of the depositors
operates to increase the money stringency when it arises rather than to
expand the supply of currency and relieve it. It operates upon each bank
and furnishes a motive for the withdrawal of currency from the channels
of trade by each bank to save itself, and offers no inducement whatever
for the use of the reserve to expand the supply of currency to meet the
exceptional demand.

After the panic of 1907 Congress realized that the present system was
not adapted to the country's needs and that under it panics were
possible that might properly be avoided by legislative provision.
Accordingly a monetary commission was appointed which made a report in
February, 1912. The system which they recommended involved a National
Reserve Association, which was, in certain of its faculties and
functions, a bank, and which was given through its governing authorities
the power, by issuing circulating notes for approved commercial paper,
by fixing discounts, and by other methods of transfer of currency, to
expand the supply of the monetary medium where it was most needed to
prevent the export or hoarding of gold and generally to exercise such
supervision over the supply of money in every part of the country as to
prevent a stringency and a panic. The stock in this association was to
be distributed to the banks of the whole United States, State and
National, in a mixed proportion to bank units and to capital stock paid
in. The control of the association was vested in a board of directors to
be elected by representatives of the banks, except certain ex-officio
directors, three Cabinet officers, and the Comptroller of the Currency.
The President was to appoint the governor of the association from three
persons to be selected by the directors, while the two deputy governors
were to be elected by the board of directors. The details of the plan
were worked out with great care and ability, and the plan in general
seems to me to furnish the basis for a proper solution of our present
difficulties. I feel that the Government might very properly be given a
greater voice in the executive committee of the board of directors
without danger of injecting politics into its management, but I think
the federation system of banks is a good one, provided proper
precautions are taken to prevent banks of large capital from absorbing
power through ownership of stock in other banks. The objections to a
central bank it seems to me are obviated if the ownership of the reserve
association is distributed among all the banks of a country in which
banking is free. The earnings of the reserve association are limited in
percentage tit a reasonable and fixed amount, and the profits over and
above this are to be turned into the Government Treasury. It is quite
probable that still greater security against control by money centers
may be worked into the plan.

Certain it is, however, that the objections which were made in the past
history of this country to a central bank as furnishing a monopoly of
financial power to private individuals, would not apply to an
association whose ownership and control is so widely distributed and is
divided between all the banks of the country, State and National, on the
one hand, and the Chief Executive through three department heads and his
Comptroller of the Currency, on the other. The ancient hostility to a
national bank, with its branches, in which is concentrated the privilege
of doing a banking business and carrying on the financial transactions
of the Government, has prevented the establishment of such a bank since
it was abolished in the Jackson Administration. Our present national
banking law has obviated objections growing out of the same cause by
providing a free banking system in which any set of stockholders can
establish a national bank if they comply with the conditions of law. It
seems to me that the National Reserve Association meets the same
objection in a similar way; that is, by giving to each bank, State and
National, in accordance with its size, a certain share in the stock of
the reserve association, nontransferable and only to be held by the bank
while it performs its functions as a partner in the reserve association.

The report of the commission recommends provisions for the imposition of
a graduated tax on the expanded currency of such a character as to
furnish a motive for reducing the issue of notes whenever their presence
in the money market is not required by the exigencies of trade. In other
words, the whole system has been worked out with the greatest care.
Theoretically it presents a plan that ought to command support.
Practically it may require modification in various of its provisions in
order to make the security against, abuses by combinations among the
banks impossible. But in the face of the crying necessity that there is
for improvement in our present system, I urgently invite the attention
of Congress to the proposed plan and the report of the commission, with
the hope that an earnest consideration may suggest amendments and
changes within the general plan which will lead to its adoption for the
benefit of the country. There is no class in the community more
interested in a safe and sane banking and currency system, one which
will prevent panics and automatically furnish in each trade center the
currency needed in the carrying on of the business at that center, than
the wage earner. There is no class in the community whose experience
better qualifies them to make suggestions as to the sufficiency of a
currency and banking system than the bankers and business men. Ought we,
therefore, to ignore their recommendations and reject their financial
judgment as to the proper method of reforming our financial system
merely because of the suspicion which exists against them in the minds
of many of our fellow citizens? Is it not the duty of Congress to take
up the plan suggested, examine it from all standpoints, give impartial
consideration to the testimony of those whose experience ought to fit
them to give the best advice on the subject, and then to adopt some plan
which will secure the benefits desired?

A banking and currency system seems far away from the wage earner and
the farmer, but the fact is that they are vitally interested in a safe
system of currency which shall graduate its volume to the amount needed
and which shall prevent times of artificial stringency that frighten
capital, stop employment, prevent the meeting of the pay roll, destroy
local markets, and produce penury and want.

THE TARIFF

I have regarded it as my duty in former messages to the Congress to urge
the revision of the tariff upon principles of protection. It was my
judgment that the customs duties ought to be revised downward, but that
the reduction ought not to be below a rate which would represent the
difference in the cost of production between the article in question at
home and abroad, and for this and other reasons I vetoed several bills
which were presented to me in the last session of this Congress. Now
that a new Congress has been elected on a platform of a tariff for
revenue only rather than a protective tariff, and is to revise the
tariff on that basis, it is needless for me to occupy the time of this
Congress with arguments or recommendations in favor of a protective
tariff.

Before passing from the tariff law, however, known as the Payne tariff
law of August 5, 1909, I desire to call attention to section 38 of that
act, assessing a special excise tax on corporations. It contains a
provision requiring the levy of an additional 50 per cent to the annual
tax in cases of neglect to verify the prescribed return or to file it
before the time required by law. This additional charge of 50 per cent
operates in some cases as a harsh penalty for what may have been a mere
inadvertence or unintentional oversight, and the law should be so
amended as to mitigate the severity of the charge in such instances.
Provision should also be made for the refund of additional taxes
heretofore collected because of such infractions in those cases where
the penalty imposed has been so disproportionate to the offense as
equitably to demand relief.

BUDGET

The estimates for the next fiscal year have been assembled by the
Secretary of the Treasury and by him transmitted to Congress. I purpose
at a later day to submit to Congress a form of budget prepared for me
and recommended by the President's Commission on Economy and Efficiency,
with a view of suggesting the useful and informing character of a
properly framed budget.

WAR DEPARTMENT

The War Department combines within its jurisdiction functions which in
other countries usually occupy three departments. It not only has the
management of the Army and the coast defenses, but its jurisdiction
extends to the government of the Philippines and of Porto Rico and the
control of the receivership of the customs revenues of the Dominican
Republic; it also includes the recommendation of all plans for the
improvement of harbors and waterways and their execution when adopted;
and, by virtue of an Executive order, the supervision of the
construction of the Panama Canal.

ARMY REORGANIZATION

Our small Army now consists of 83,809 men, excluding the 5,000
Philippine scouts. Leaving out of consideration the Coast Artillery
force, whose position is fixed in our various seacoast defenses, and the
present garrisons of our various insular possessions, we have to-day
within the continental United States a mobile Army of only about 35,000
men. This little force must be still further drawn upon to supply the
new garrisons for the great naval base which is being established at
Pearl Harbor, in the Hawaiian Islands, and to protect the locks now
rapidly approaching completion at Panama. The forces remaining in the
United States are now scattered in nearly 50 Posts, situated for a
variety of historical reasons in 24 States. These posts contain only
fractions of regiments, averaging less than 700 men each. In time of
peace it has been our historical policy to administer these units
separately by a geographical organization. In other words, our Army in
time of peace has never been a united organization but merely scattered
groups of companies, battalions, and regiments, and the first task in
time of war has been to create out of these scattered units an Army fit
for effective teamwork and cooperation.

To the task of meeting these patent defects, the War Department has been
addressing itself during the past year. For many years we had no officer
or division whose business it was to study these problems and plan
remedies for these defects. With the establishment of the General Staff
nine years ago a body was created for this purpose. It has, necessarily,
required time to overcome, even in its own personnel, the habits of mind
engendered by a century of lack of method, but of late years its work
has become systematic and effective, and it has recently been addressing
itself vigorously to these problems.

A comprehensive plan of Army reorganization was prepared by the War
College Division of the General Staff. This plan was thoroughly
discussed last summer at a series of open conferences held by the
Secretary of War and attended by representatives from all branches of
the Army and from Congress. In printed form it has been distributed to
Members of Congress and throughout the Army and the National Guard, and
widely through institutions of learning and elsewhere in the United
States. In it, for the first time, we have a tentative chart for future
progress.

Under the influence of this study definite and effective steps have been
taken toward Army reorganization so far as such reorganization lies
within the Executive power. Hitherto there has been no difference of
policy in the treatment of the organization of our foreign garrisons
from those of troops within the United States. The difference of
situation is vital, and the foreign garrison should be prepared to
defend itself at an instant's notice against a foe who may command the
sea. Unlike the troops in the United States, it can not count upon
reinforcements or recruitment. It is an outpost upon which will fall the
brunt of the first attack in case of war. The historical policy of the
United States of carrying its regiments during time of peace at half
strength has no application to our foreign garrisons. During the past
year this defect has been remedied as to the Philippines garrison. The
former garrison of 12 reduced regiments has been replaced by a garrison
of 6 regiments at full strength, giving fully the same number of
riflemen at an estimated economy in cost of maintenance of over
$1,000,000 per year. This garrison is to be permanent. Its regimental
units, instead of being transferred periodically back and forth from the
United States, will remain in the islands. The officers and men
composing these units will, however, serve a regular tropical detail as
usual, thus involving no greater hardship upon the personnel and greatly
increasing the effectiveness of the garrison. A similar policy is
proposed for the Hawaiian and Panama garrisons as fast as the barracks
for them are completed. I strongly urge upon Congress that the necessary
appropriations for this purpose should be promptly made. It is, in my
opinion, of first importance that these national outposts, upon which a
successful home defense will, primarily, depend, should be finished and
placed in effective condition at the earliest possible day.

THE HOME ARMY

Simultaneously with the foregoing steps the War Department has been
proceeding with the reorganization of the Army at home. The formerly
disassociated units are being united into a tactical organization of
three divisions, each consisting of two or three brigades of Infantry
and, so far as practicable, a proper proportion of divisional Cavalry
and Artillery. Of course, the extent to which this reform can be carried
by the Executive is practically limited to a paper organization. The
scattered units can be brought under a proper organization, but they
will remain physically scattered until Congress supplies the necessary
funds for grouping them in more concentrated posts. Until that is done
the present difficulty of drilling our scattered groups together, and
thus training them for the proper team play, can not be removed. But we
shall, at least, have an Army which will know its own organization and
will be inspected by its proper commanders, and to which, as a unit,
emergency orders can be issued in time of war or other emergency.
Moreover, the organization, which in many respects is necessarily a
skeleton, will furnish a guide for future development. The separate
regiments and companies will know the brigades and divisions to which
they belong. They will be maneuvered together whenever maneuvers are
established by Congress, and the gaps in their organization will show
the pattern into which can be filled new troops as the Nation grows and
a larger Army is provided.

REGULAR ARMY RESERVE

One of the most important reforms accomplished during the past year has
been the legislation enacted in the Army appropriation bill of last
summer, providing for a Regular Army reserve. Hitherto our national
policy has assumed that at the outbreak of war our regiments would be
immediately raised to full strength. But our laws have provided no means
by which this could be accomplished, or by which the losses of the
regiments when once sent to the front could be repaired. In this respect
we have neglected the lessons learned by other nations. The new law
provides that the soldier, after serving four years with colors, shall
pass into a reserve for three years. At his option he may go into the
reserve at the end of three years, remaining there for four years. While
in the reserve he can be called to active duty only in case of war or
other national emergency, and when so called and only in such case will
receive a stated amount of pay for all of the period in which he has
been a member of the reserve. The legislation is imperfect, in my
opinion, in certain particulars, but it is a most important step in the
right direction, and I earnestly hope that it will be carefully studied
and perfected by Congress.

THE NATIONAL GUARD

Under existing law the National Guard constitutes, after the Regular
Army, the first line of national defense. Its organization, discipline,
training, and equipment, under recent legislation, have been
assimilated, as far as possible, to those of the Regular Army, and its
practical efficiency, under the effect of this training, has very
greatly increased. Our citizen soldiers under present conditions have
reached a stage of development beyond which they can not reasonably be
asked to go without further direct assistance in the form of pay from
the Federal Government. On the other hand, such pay from the National
Treasury would not be justified unless it produced a proper equivalent
in additional efficiency on the part of the National Guard. The
Organized Militia to-day can not be ordered outside of the limits of the
United States, and thus can not lawfully be used for general military
purposes. The officers and men are ambitious and eager to make
themselves thus available and to become an efficient national reserve of
citizen soldiery. They are the only force of trained men, other than the
Regular Army, upon which we can rely. The so-called militia pay bill, in
the form agreed on between the authorities of the War Department and the
representatives of the National Guard, in my opinion adequately meets
these conditions and offers a proper return for the pay which it is
proposed to give to the National Guard. I believe that its enactment
into law would be a very long step toward providing this Nation with a
first line of citizen soldiery, upon which its main reliance must depend
in case of any national emergency. Plans for the organization of the
National Guard into tactical divisions, on the same lines as those
adopted for the Regular Army, are being formulated by the War College
Division of the General Staff.

NATIONAL VOLUNTEERS

The National Guard consists of only about 110,000 men. In any serious
war in the past it has always been necessary, and in such a war in the
future it doubtless will be necessary, for the Nation to depend, in
addition to the Regular Army and the National Guard, upon a large force
of volunteers. There is at present no adequate provision of law for the
raising of such a force. There is now pending in Congress, however, a
bill which makes such provision, and which I believe is admirably
adapted to meet the exigencies which would be presented in case of war.
The passage of the bill would not entail a dollar's expense upon the
Government at this time or in the future until war comes. But if war
comes the methods therein directed are in accordance with the best
military judgment as to what they ought to be, and the act would prevent
the necessity for a discussion of any legislation and the delays
incident to its consideration and adoption. I earnestly urge its
passage.

CONSOLIDATION OF THE SUPPLY CORPS

The Army appropriation act of 191:2 also carried legislation for the
consolidation of the Quartermaster's Department, the Subsistence
Department, and the Pay Corps into a single supply department, to be
known as the Quartermaster's Corps. It also provided for the
organization of a special force of enlisted men, to be known as the
Service Corps, gradually to replace many of the civilian employees
engaged in the manual labor necessary in every army. I believe that both
of these enactments will improve the administration of our military
establishment. The consolidation of the supply corps has already been
effected, and the organization of the service corps is being put into
effect.

All of the foregoing reforms are in the direction of economy and
efficiency. Except for the slight increase necessary to garrison our
outposts in Hawaii and Panama, they do not call for a larger Army, but
they do tend to produce a much more efficient one. The only substantial
new appropriations required are those which, as I have pointed out, are
necessary to complete the fortifications and barracks at our naval bases
and outposts beyond the sea.

PORTO RICO

Porto Rico continues to show notable progress, both commercially and in
the spread of education. Its external commerce has increased 17 per cent
over the preceding year, bringing the total value up to $92,631,886, or
more than five times the value of the commerce of the island in 1901.
During the year 160,657 Pupils were enrolled in the public schools, as
against 145,525 for the preceding year, and as compared with 26,000 for
the first year of American administration. Special efforts are under way
for the promotion of vocational and industrial training, the need of
which is particularly pressing in the island. When the bubonic plague
broke out last June, the quick and efficient response of the people of
Porto Rico to the demands of modern sanitation was strikingly shown by
the thorough campaign which was instituted against the plague and the
hearty public opinion which supported the Government's efforts to check
its progress and to prevent its recurrence.

The failure thus far to grant American citizenship continues to be the
only ground of dissatisfaction. The bill conferring such citizenship has
passed the House of Representatives and is now awaiting the action of
the Senate. I am heartily in favor of the passage of this bill. I
believe that the demand for citizenship is just, and that it is amply
earned by sustained loyalty on the part of the inhabitants of the
island. But it should be remembered that the demand must be, and in the
minds of most Porto Ricans is, entirely disassociated from any thought
of statehood. I believe that no substantial approved public opinion in
the United States or in Porto Rico contemplates statehood for the island
as the ultimate form of relations between us. I believe that the aim to
be striven for is the fullest possible allowance of legal and fiscal
self-government, with American citizenship as to the bond between us; in
other words, a relation analogous to the present relation between Great
Britain and such self-governing colonies as Canada and Australia. This
would conduce to the fullest and most self-sustaining development of
Porto Rico, while at the same time it would grant her the economic and
political benefits of being under the American flag.

PHILIPPINES

A bill is pending in Congress which revolutionizes the carefully worked
out scheme of government under which the Philippine Islands are now
governed and which proposes to render them virtually autonomous at once
and absolutely independent in eight years. Such a proposal can only be
founded on the assumption that we have now discharged our trusteeship to
the Filipino people and our responsibility for them to the world, and
that they are now prepared for self-government as well as national
sovereignty. A thorough and unbiased knowledge of the facts clearly
shows that these assumptions are absolutely without justification. As to
this, I believe that there is no substantial difference of opinion among
any of those who have had the responsibility of facing Philippine
problems in the administration of the islands, and I believe that no one
to whom the future of this people is a responsible concern can
countenance a policy fraught with the direst consequences to those on
whose behalf it is ostensibly urged.

In the Philippine Islands we have embarked upon an experiment
unprecedented in dealing with dependent people. We are developing there
conditions exclusively for their own welfare. We found an archipelago
containing 24 tribes and races, speaking a great variety of languages,
and with a population over 80 per cent of which could neither read nor
write. Through the unifying forces of a common education, of commercial
and economic development, and of gradual participation in local
self-government we are endeavoring to evolve a homogeneous people fit to
determine, when the time arrives, their own destiny. We are seeking to
arouse a national spirit and not, as under the older colonial theory, to
suppress such a spirit. The character of the work we have been doing is
keenly recognized in the Orient, and our success thus far followed with
not a little envy by those who, initiating the same policy, find
themselves hampered by conditions grown up in earlier days and under
different theories of administration. But our work is far from done. Our
duty to the Filipinos is far from discharged. Over half a million
Filipino students are now in the Philippine schools helping to mold the
men of the future into a homogeneous people, but there still remain more
than a million Filipino children of school age yet to be reached. Freed
from American control the integrating forces of a common education and a
common language will cease and the educational system now well started
will slip back into inefficiency and disorder.

An enormous increase in the commercial development of the islands has
been made since they were virtually granted full access to our markets
three years ago, with every prospect of increasing development and
diversified industries. Freed from American control such development is
bound to decline. Every observer speaks of the great progress in public
works for the benefit of the Filipinos, of harbor improvements, of roads
and railways, of irrigation and artesian wells, public buildings, and
better means of communication. But large parts of the islands are still
unreached, still even unexplored, roads and railways are needed in many
parts, irrigation systems are still to be installed, and wells to be
driven. Whole villages and towns are still without means of
communication other than almost impassable roads and trails. Even the
great progress in sanitation, which has successfully suppressed
smallpox, the bubonic plague, and Asiatic cholera, has found the cause
of and a cure for beriberi, has segregated the lepers, has helped to
make Manila the most healthful city in the Orient, and to free life
throughout the whole archipelago from its former dread diseases, is
nevertheless incomplete in many essentials of permanence in sanitary
policy. Even more remains to be accomplished. If freed from American
control sanitary progress is bound to be arrested and all that has been
achieved likely to be lost.

Concurrent with the economic, social, and industrial development of the
islands has been the development of the political capacity of the
people. By their progressive participation in government the Filipinos
are being steadily and hopefully trained for self-government. Under
Spanish control they shared in no way in the government. Under American
control they have shared largely and increasingly. Within the last dozen
years they have gradually been given complete autonomy in the
municipalities, the right to elect two-thirds of the provincial
governing boards and the lower house of the insular legislature. They
have four native members out of nine members of the commission, or upper
house. The chief justice and two justices of the supreme court, about
one-half of the higher judicial positions, and all of the justices of
the peach are natives. In the classified civil service the proportion of
Filipinos increased from 51 per cent in 1904 to 67 per cent in 1911.
Thus to-day all the municipal employees, over go per cent of the
provincial employees, and 60 per cent of the officials and employees of
the central government are Filipinos. The ideal which has been kept in
mind in our political guidance of the islands has been real popular
self-government and not mere paper independence. I am happy to say that
the Filipinos have done well enough in the places they have filled and
in the discharge of the political power with which they have been
intrusted to warrant the belief that they can be educated and trained to
complete self-government. But the present satisfactory results are due
to constant support and supervision at every step by Americans.

If the task we have undertaken is higher than that assumed by other
nations, its accomplishment must demand even more patience. We must not
forget that we found the Filipinos wholly untrained in government. Up to
our advent all other experience sought to repress rather than encourage
political power. It takes long time and much experience to ingrain
political habits of steadiness and efficiency. Popular self-government
ultimately must rest upon common habits of thought and upon a reasonably
developed public opinion. No such foundations for self-government, let
alone independence are now present in the Philippine Islands.
Disregarding even their racial heterogeneity and the lack of ability to
think as a nation, it is sufficient to point out that under liberal
franchise privileges only about 3 per cent of the Filipinos vote and
only 5 per cent of the people are said to read the public press. To
confer independence upon the Filipinos now is, therefore, to subject the
great mass of their people to the dominance of an oligarchical and,
probably, exploiting minority. Such a course will be as cruel to those
people as it would be shameful to us.

Our true course is to pursue steadily and courageously the path we have
thus far followed; to guide the Filipinos into self-sustaining pursuits;
to continue the cultivation of sound political habits through education
and political practice; to encourage the diversification of industries,
and to realize the advantages of their industrial education by
conservatively approved cooperative methods, at once checking the
dangers of concentrated wealth and building up a sturdy, independent
citizenship. We should do all this with a disinterested endeavor to
secure for the Filipinos economic independence and to fit them for
complete self-government, with the power to decide eventually, according
to their own largest good, whether such self-government shall be
accompanied by independence. A present declaration even of future
independence would retard progress by the dissension and disorder it
would arouse. On our part it would be a disingenuous attempt, under the
guise of conferring a benefit on them, to relieve ourselves from the
heavy and difficult burden which thus far we have been bravely and
consistently sustaining. It would be a disguised policy of scuttle. It
would make the helpless Filipino the football of oriental politics,
tinder the protection of a guaranty of their independence, which we
would be powerless to enforce.

REGULATION OF WATER POWER

There are pending before Congress a large number of bills proposing to
grant privileges of erecting dams for the purpose of creating water
power in our navigable rivers. The pendency of these bills has brought
out an important defect in the existing general dam act. That act does
not, in my opinion, grant sufficient power to the Federal Government in
dealing with the construction of such dams to exact protective
conditions in the interest of navigation. It does not permit the Federal
Government, as a condition of its permit, to require that a part of the
value thus created shall be applied to the further general improvement
and protection of the stream. I believe this to be one of the most
important matters of internal improvement now confronting the
Government. Most of the navigable rivers of this country are
comparatively long and shallow. In order that they may be made fully
useful for navigation there has come into vogue a method of improvement
known as canalization, or the slack-water method, which consists in
building a series of dams and locks, each of which will create a long
pool of deep navigable water. At each of these dams there is usually
created also water power of commercial value. If the water power thus
created can be made available for the further improvement of navigation
in the stream, it is manifest that the improvement will be much more
quickly effected on the one hand, and, on the other, that the burden on
the general taxpayers of the country will be very much reduced. Private
interests seeking permits to build water-power dams in navigable streams
usually urge that they thus improve navigation, and that if they do not
impair navigation they should be allowed to take for themselves the
entire profits of the water-power development. Whatever they may do by
way of relieving the Government of the expense of improving navigation
should be given due consideration, but it must be apparent that there
may be a profit beyond a reasonably liberal return upon the private
investment which is a potential asset of the Government in carrying out
a comprehensive policy of waterway development. It is no objection to
the retention and use of such an asset by the Government that a
comprehensive waterway policy will include the protection and
development of the other public uses of water, which can not and should
not be ignored in making and executing plans for the protection and
development of navigation. It is also equally clear that inasmuch as the
water power thus created is or may be an incident of a general scheme of
waterway improvement within the constitutional jurisdiction of the
Federal Government, the regulation of such water power lies also within
that jurisdiction. In my opinion constructive statesmanship requires
that legislation should be enacted which will permit the development of
navigation in these great rivers to go hand in hand with the utilization
of this by-product of water power, created in the course of the same
improvement, and that the general dam act should be so amended as to
make this possible. I deem it highly important that the Nation should
adopt a consistent and harmonious treatment of these water-power
projects, which will preserve for this purpose their value to the
Government, whose right it is to grant the permit. Any other policy is
equivalent to throwing away a most valuable national asset.

THE PANAMA CANAL

During the past year the work of construction upon the canal has
progressed most satisfactorily. About 87 per cent of the excavation work
has been completed, and more than 93 per cent of the concrete for all
the locks is in place. In view of the great interest which has been
manifested as to some slides in the Culebra Cut, I am glad to say that
the report of Col. Goethals should allay any apprehension on this point.
It is gratifying to note that none of the slides which occurred during
this year would have interfered with the passage of the ships had the
canal, in fact, been in operation, and when the slope pressures will
have been finally adjusted and the growth of vegetation will minimize
erosion in the banks of the cut, the slide problem will be practically
solved and an ample stability assured for the Culebra Cut.

Although the official date of the opening has been set for January 1,
1915, the canal will, in fact, from present indications, be opened for
shipping during the latter half of 1913. No fixed date can as yet be
set, but shipping interests will be advised as soon as assurances can be
given that vessels can pass through without unnecessary delay.

Recognizing the administrative problem in the management of the canal,
Congress in the act of August 24, 1912, has made admirable provisions
for executive responsibility in the control of the canal and the
government of the Canal Zone. The problem of most efficient organization
is receiving careful consideration, so that a scheme of organization and
control best adapted to the conditions of the canal may be formulated
and put in operation as expeditiously as possible. Acting tinder the
authority conferred on me by Congress, I have, by Executive
proclamation, promulgated the following schedule of tolls for ships
passing through the canal, based upon the thorough report of Emory R.
Johnson, special commissioner on traffic and tolls:

I. On merchant vessels carrying passengers or cargo, $1.20 per net
vessel ton-each 100 cubic feet-of actual earning capacity. 2. On vessels
in ballast without passengers or cargo, 40 per cent less than the rate
of tolls for vessels with passengers or cargo. 3. Upon naval vessels,
other than transports, colliers, hospital ships, and supply ships, 50
cents per displacement ton. 4. Upon Army and Navy transports, colliers,
hospital ships, and supply ships, $1.20 per net ton, the vessels to be
measured by the same rules as are employed in determining the net
tonnage of merchant vessels. Rules for the determination of the tonnage
upon which toll charges are based are now in course of preparation and
will be promulgated in due season.

PANAMA CANAL TREATY

The proclamation which I have issued in respect to the Panama Canal
tolls is in accord with the Panama Canal act passed by this Congress
August 24, 1912. We have been advised that the British Government has
prepared a protest against the act and its enforcement in so far as it
relieves from the payment of tolls American ships engaged in the
American coastwise trade on the ground that it violates British rights
tinder the Hay-Pauncefote treaty concerning the Panama Canal. When the
protest is presented, it will be promptly considered and an effort made
to reach a satisfactory adjustment of any differences there may be
between the two Governments.

WORKMEN'S COMPENSATION ACT

The promulgation of an efficient workmen's compensation act, adapted to
the particular conditions of the zone, is awaiting adequate
appropriation by Congress for the payment of claims arising thereunder.
I urge that speedy provision be made in order that we may install upon
the zone a system of settling claims for injuries in best accord with
modern humane, social, and industrial theories.

PROMOTION FOR COL. GOETHALS

As the completion of the canal grows nearer, and as the wonderful
executive work of Col. Goethals becomes more conspicuous in the eyes of
the country and of the world, it seems to me wise and proper to make
provision by law for such reward to him as may be commensurate with the
service that he has rendered to his country. I suggest that this reward
take the form of an appointment of Col. Goethals as a major general in
the Army of the United States, and that the law authorizing such
appointment be accompanied with a provision permitting his designation
as Chief of Engineers upon the retirement of the present incumbent of
that office.

NAVY DEPARTMENT

The Navy of the United States is in a greater state of efficiency and is
more powerful than it has ever been before, but in the emulation which
exists between different countries in respect to the increase of naval
and military armaments this condition is not a permanent one. In view of
the many improvements and increases by foreign Governments the slightest
halt on our part in respect to new construction throws us back and
reduces us from a naval power of the first rank and places us among the
nations of the second rank. In the past 15 years the Navy has expanded
rapidly and yet far less rapidly than our country. From now on reduced
expenditures in the Navy means reduced military strength. The world's
history has shown the importance of sea power both for adequate defense
and for the support of important and definite policies.

I had the pleasure of attending this autumn a mobilization of the
Atlantic Fleet, and was glad to observe and note the preparedness of the
fleet for instant action. The review brought before the President and
the Secretary of the Navy a greater and more powerful collection of
vessels than had ever been gathered in American waters. The condition of
the fleet and of the officers and enlisted men and of the equipment of
the vessels entitled those in authority to the greatest credit.

I again commend to Congress the giving of legislative sanction to the
appointment of the naval aids to the Secretary of the Navy. These aids
and the council of aids appointed by the Secretary of the Navy to assist
him in the conduct of his department have proven to be of the highest
utility. They have furnished an executive committee of the most skilled
naval experts, who have coordinated the action of the various bureaus in
the Navy, and by their advice have enabled the Secretary to give an
administration at the same time economical and most efficient. Never
before has the United States had a Navy that compared in efficiency with
its present one, but never before have the requirements with respect to
naval warfare been higher and more exacting than now. A year ago
Congress refused to appropriate for more than one battleship. In this I
think a great mistake of policy was made, and I urgently recommend that
this Congress make up for the mistake of the last session by
appropriations authorizing the construction of three battleships, in
addition to destroyers, fuel ships, and the other auxiliary vessels as
shown in the building program of the general board. We are confronted by
a condition in respect to the navies of the world which requires us, if
we would maintain our Navy as an insurance of peace, to augment our
naval force by at least two battleships a year and by battle cruisers,
gunboats, torpedo destroyers, and submarine boats in a proper
proportion. We have no desire for war. We would go as far as any nation
in the world to avoid war, but we are a world power. Our population, our
wealth, our definite policies, our responsibilities in the Pacific and
the Atlantic, our defense of the Panama Canal, together with our
enormous world trade and our missionary outposts on the frontiers of
civilization, require us to recognize our position as one of the
foremost in the family of nations, and to clothe ourselves with
sufficient naval power to give force to our reasonable demands, and to
give weight to our influence in those directions of progress that a
powerful Christian nation should advocate.

I observe that the Secretary of the Navy devotes some space to a change
in the disciplinary system in vogue in that branch of the service. I
think there is nothing quite so unsatisfactory to either the Army or the
Navy as the severe punishments necessarily inflicted by court-martial
for desertions and purely military offenses, and I am glad to hear that
the British have solved this important and difficult matter in a
satisfactory way. I commend to the consideration of Congress the details
of the new disciplinary system, and recommend that laws be passed
putting the same into force both in the Army and the Navy.

I invite the attention of Congress to that part of the report of the
Secretary of the Navy in which he recommends the formation of a naval
reserve by the organization of the ex-sailors of the Navy.

I repeat my recommendation made last year that proper provision should
be made for the rank of the commander in chief of the squadrons and
fleets of the Navy. The inconvenience attending the necessary precedence
that most foreign admirals have over our own whenever they meet in
official functions ought to be avoided. It impairs the prestige of our
Navy and is a defect that can be very easily removed.

DEPARTMENT OF JUSTICE

This department has been very active in the enforcement of the law. It
has been better organized and with a larger force than ever before in
the history of the Government. The prosecutions which have been
successfully concluded and which are now pending testify to the
effectiveness of the departmental work.

The prosecution of trusts under the Sherman antitrust law has gone on
without restraint or diminution, and decrees similar to those entered in
the Standard Oil and the Tobacco cases have been entered in other suits,
like the suits against the Powder Trust and the Bathtub Trust. I am very
strongly convinced that a steady, consistent course in this regard, with
a continuing of Supreme Court decisions upon new phases of the trust
question not already finally decided is going to offer a solution of
this much-discussed and troublesome issue in a quiet, calm, and judicial
way, without any radical legislation changing the governmental policy in
regard to combinations now denounced by the Sherman antitrust law. I
have already recommended as an aid in this matter legislation which
would declare unlawful certain well-known phases of unfair competition
in interstate trade, and I have also advocated voluntary national
incorporation for the larger industrial enterprises, with provision for
a closer supervision by the Bureau of Corporations, or a board appointed
for the purpose, so as to make more certain compliance with the
antitrust law on the one hand and to give greater security to the
stockholders against possible prosecutions on the other. I believe,
however, that the orderly course of litigation in the courts and the
regular prosecution of trusts charged with the violation of the
antitrust law is producing among business men a clearer and clearer
perception of the line of distinction between business that is to be
encouraged and business that is to be condemned, and that in this quiet
way the question of trusts can be settled and competition retained as an
economic force to secure reasonableness in prices and freedom and
independence in trade.

REFORM OF COURT PROCEDURE

I am glad to bring to the attention of Congress the fact that the
Supreme Court has radically altered the equity rules governing the
procedure on the equity side of all Federal courts, and though, as these
changes have not been yet put in practice so as to enable us to state
from actual results what the reform will accomplish, they are of such a
character that we can reasonably prophesy that they will greatly reduce
the time and cost of litigation in such courts. The court has adopted
many of the shorter methods of the present English procedure, and while
it may take a little while for the profession to accustom itself to
these methods, it is certain greatly to facilitate litigation. The
action of the Supreme Court has been so drastic and so full of
appreciation of the necessity for a great reform in court procedure that
I have no hesitation in following up this action with a recommendation
which I foreshadowed in my message of three years ago, that the sections
of the statute governing the procedure in the Federal courts on the
common-law side should be so amended as to give to the Supreme Court the
same right to make rules of procedure in common law as they have, since
the beginning of the court, exercised in equity. I do not doubt that a
full consideration of the subject will enable the court while giving
effect to the substantial differences in right and remedy between the
system of common law and the system of equity so to unite the two
procedures into the form of one civil action and to shorten the
procedure in such civil action as to furnish a model to all the State
courts exercising concurrent jurisdiction with the Federal courts of
first instance.

Under the statute now in force the common-law procedure in each Federal
court is made to conform to the procedure in the State in which the
court is held. In these days, when we should be making progress in court
procedure, such a conformity statute makes the Federal method too
dependent upon the action of State legislatures. I can but think it a
great opportunity for Congress to intrust to the highest tribunal in
this country, evidently imbued with a strong spirit in favor of a reform
of procedure, the power to frame a model code of procedure, which, while
preserving all that is valuable and necessary of the rights and remedies
at common law and in equity, shall lessen the burden of the poor
litigant to a minimum in the expedition and cheapness with which his
cause can be fought or defended through Federal courts to final
judgment.

WORKMAN'S COMPENSATION ACT

The workman's compensation act reported by the special commission
appointed by Congress and the Executive, which passed the Senate and is
now pending in the House, the passage of which I have in previous
messages urged upon Congress, I venture again to call to its attention.
The opposition to it which developed in the Senate, but which was
overcome by a majority in that body, seemed to me to grow out rather of
a misapprehension of its effect than of opposition to its principle. I
say again that I think no act can have a better effect directly upon the
relations between the employer and employee than this act applying to
railroads and common carriers of an interstate character, and I am sure
that the passage of the act would greatly relieve the courts of the
heaviest burden of litigation that they have, and would enable them to
dispatch other business with a speed never before attained in courts of
justice in this country.

PART III. [Concerning the Work of the Departments of the Post Office,
Interior, Agriculture, and Commerce and Labor and District of Columbia.]

THE WHITE HOUSE, December 19, 1912.

To the Senate and House of Representatives:

This is the third of a series of messages in which I have brought to the
attention of the Congress the important transactions of the Government
in each of its departments during the last year and have discussed
needed reforms.

HEADS OF DEPARTMENTS SHOULD HAVE SEATS ON THE FLOOR OF CONGRESS

I recommend the adoption of legislation which shall make it the duty of
heads of departments--the members of the President's Cabinet--at
convenient times to attend the session of the House and the Senate,
which shall provide seats for them in each House, and give them the
opportunity to take part in all discussions and to answer questions of
which they have had due notice. The rigid holding apart of the executive
and the legislative branches of this Government has not worked for the
great advantage of either. There has been much lost motion in the
machinery, due to the lack of cooperation and interchange of views face
to face between the representatives of the Executive and the Members of
the two legislative branches of the Government. It was never intended
that they should be separated in the sense of not being in constant
effective touch and relationship to each other. The legislative and the
executive each performs its own appropriate function, but these
functions must be coordinated. Time and time again debates have arisen
in each House upon issues which the information of a particular
department head would have enabled him, if present, to end at once by a
simple explanation or statement. Time and time again a forceful and
earnest presentation of facts and arguments by the representative of the
Executive whose duty it is to enforce the law would have brought about a
useful reform by amendment, which in the absence of such a statement has
failed of passage. I do not think I am mistaken in saying that the
presence of the members of the Cabinet on the floor of each House would
greatly contribute to the enactment of beneficial legislation. Nor would
this in any degree deprive either the legislative or the executive of
the independence which separation of the two branches has been intended
to promote. It would only facilitate their cooperation in the public
interest.

On the other hand, I am sure that the necessity and duty imposed upon
department heads of appearing in each house and in answer to searching
questions, of rendering upon their feet an account of what they have
done, or what has been done by the administration, will spur each member
of the Cabinet to closer attention to the details of his department, to
greater familiarity with its needs, and to greater care to avoid the
just criticism which the answers brought out in questions put and
discussions arising between the Members of either House and the members
of the Cabinet may properly evoke.

Objection is made that the members of the administration having no vote
could exercise no power on the floor of the House, and could not assume
that attitude of authority and control which the English parliamentary
Government have and which enables them to meet the responsibilities the
English system thrusts upon them. I agree that in certain respects it
would be more satisfactory if members of the Cabinet could at the same
time be Members of both Houses, with voting power, but this is
impossible under our system; and while a lack of this feature may
detract from the influence of the department chiefs, it will not prevent
the good results which I have described above both in the matter of
legislation and in the matter of administration. The enactment of such a
law would be quite within the power of Congress without constitutional
amendment, and it has such possibilities of usefulness that we might
well make the experiment, and if we are disappointed the misstep can be
easily retraced by a repeal of the enabling legislation.

This is not a new proposition. In the House of Representatives, in the
Thirty-eighth Congress, the proposition was referred to a select
committee of seven Members. The committee made an extensive report, and
urged the adoption of the reform. The report showed that our history had
not been without illustration of the necessity and the examples of the
practice by pointing out that in early days Secretaries were repeatedly
called to the presence of either Rouse for consultation, advice, and
information. It also referred to remarks of Mr. justice Story in his
Commentaries on the Constitution, in which he urgently presented the
wisdom of such a change. This report is to be found in Volume I of the
Reports of Committees of the First Session of the Thirty-eighth
Congress, April 6, 1864.

Again, on February 4, 1881, a select committee of the Senate recommended
the passage of a similar bill, and made a report, In which, while
approving the separation of the three branches, the executive,
legislative, and judicial, they point out as a reason for the proposed
change that, although having a separate existence, the branches are "to
cooperate, each with the other, as the different members of the human
body must cooperate, with each other in order to form the figure and
perform the duties of a perfect man."

The report concluded as follows: This system will require the selection
of the strongest men to be heads of departments and will require them to
be well equipped with the knowledge of their offices. It will also
require the strongest men to be the leaders of Congress and participate
in debate. It will bring these strong men in contact, perhaps into
conflict, to advance the public weal, and thus stimulate their abilities
and their efforts, and will thus assuredly result to the good of the
country.

If it should appear by actual experience that the heads of departments
in fact have not time to perform the additional duty imposed on them by
this bill, the force in their offices should be increased or the duties
devolving on them personally should be diminished. An undersecretary
should be appointed to whom could be confided that routine of
administration which requires only order and accuracy. The principal
officers could then confine their attention to those duties which
require wise discretion and intellectual activity. Thus they would have
abundance of time for their duties under this bill. Indeed, your
committee believes that the public interest would be subserved if the
Secretaries were relieved of the harassing cares of distributing
clerkships and closely supervising the mere machinery of the
departments. Your committee believes that the adoption of this bill and
the effective execution of its provisions will be the first step toward
a sound civil-service reform which will secure a larger wisdom in the
adoption of policies and a better system in their execution.(Signed)
GEO. H. PENDLETON. W. B. ALLISON. D. W. VOORHEES. J. G. BLAINE. M. C.
BUTLER. JOHN J. INGALLS. O. H. PLATT. J. T. FARLEY. It would be
difficult to mention the names of higher authority in the practical
knowledge of our Government than those which are appended to this
report.

POSTAL SAVINGS BANK SYSTEM

The Postal Savings Bank System has been extended so that it now includes
4,004 fourth-class post offices', as well as 645 branch offices and
stations in the larger cities. There are now 12,812 depositories at
which patrons of the system may open accounts. The number of depositors
is 300,000 and the amount of their deposits is approximately
$28,000,000, not including $1,314,140 which has been with drawn by
depositors for the purpose of buying postal savings bonds. Experience
demonstrates the value of dispensing with the pass-book and introducing
in its place a certificate of deposit. The gross income of the postal
savings system for the fiscal year ending June 30, 1913, will amount to
$700,000 and the interest payable to depositors to $300,000. The cost of
supplies, equipment, and salaries is $700,000. It thus appears that the
system lacks $300,000 a year of paying interest and expenses. It is
estimated, however, that when the deposits have reached the sum Of
$50,000,000, which at the present rate they soon will do, the system
will be self-sustaining. By law the postal savings funds deposited at
each post office are required to be redeposited in local banks. State
and national banks to the number of 7,357 have qualified as depositories
for these funds. Such deposits are secured by bonds aggregating
$54,000,000. Of this amount, $37,000,000 represent municipal bonds.

PARCEL POST

In several messages I have favored and recommended the adoption of a
system of parcel post. In the postal appropriation act of last year a
general system was provided and its installation was directed by the 1st
of January. This has entailed upon the Post Office Department a great
deal of very heavy labor, but the Postmaster General informs me that on
the date selected, to wit, the 1st of January, near at hand, the
department will be in readiness to meet successfully the requirements of
the public.

CLASSIFICATION OF POSTMASTERS

A trial, during the past three years, of the system of classifying
fourth-class postmasters in that part of the country lying between the
Mississippi River on the west, Canada on the north, the Atlantic Ocean
on the east, and Mason and Dixon's line on the south has been
sufficiently satisfactory to justify the postal authorities in
recommending the extension of the order to include all the fourth-class
postmasters in the country. In September, 1912, upon the suggestion of
the Postmaster General, I directed him to prepare an order which should
put the system in effect, except in Alaska, Guam, Hawaii, Porto Rico,
and Samoa. Under date of October 15 I issued such an order which
affected 36,000 postmasters. By the order the post offices were divided
into groups A and B. Group A includes all postmasters whose compensation
is $500 or more, and group B those whose compensation is less than that
sum. Different methods are pursued in the selection of the postmasters
for group A and group, B. Criticism has been made of this order on the
ground that the motive for it was political. Nothing could be further
from the truth. The order was made before the election and in the
interest of efficient public service. I have several times requested
Congress to give me authority to put first-, second-, and third-class
postmasters, and all other local officers, including internal-revenue
officers, customs officers, United States marshals, and the local agents
of the other departments under the classification of the civil-service
law by taking away the necessity for confirming such appointments by the
Senate. I deeply regret the failure of Congress to follow these
recommendations. The change would have taken out of politics practically
every local officer and would have entirely cured the evils growing out
of what under the present law must always remain a remnant of the spoils
system.

COMPENSATION TO RAILWAYS FOR CARRYING MAILS

It is expected that the establishment of a parcel post on January 1st
will largely increase the amount of mail matter to be transported by the
railways, and Congress should be prompt to provide a way by which they
may receive the additional compensation to which they will be entitled.
The Postmaster General urges that the department's plan for a complete
readjustment of the system of paying the railways for carrying the mails
be adopted, substituting space for weight as the principal factor in
fixing compensation. Under this plan it will be possible to determine
without delay what additional payment should be made on account of the
parcel post. The Postmaster General's recommendation is based on the
results of a far-reaching investigation begun early in the
administration with the object of determining what it costs the railways
to carry the mails. The statistics obtained during the course of the
inquiry show that while many of the railways, and particularly the large
systems, were making profits from mail transportations, certain of the
lines were actually carrying the mails at a loss. As a result of the
investigation the department, after giving the subject careful
consideration, decided to urge the abandonment of the present plan of
fixing compensation on the basis of the weight of the mails carried, a
plan that has proved to be exceedingly expensive and in other respects
unsatisfactory. Under the method proposed the railway companies will
annually submit to the department reports showing what it costs them to
carry the mails, and this cost will be apportioned on the basis of the
car space engaged, payment to be allowed at the rate thus determined in
amounts that will cover the cost and a reasonable profit. If a railway
is not satisfied with the manner in which the department apportions the
cost in fixing compensation, it is to have the right, tinder the new
plan, of appealing to the Interstate Commerce Commission. This feature
of the proposed law would seem to insure a fair treatment of the
railways. It is hoped that Congress will give the matter immediate
attention and that the method of compensation recommended by the
department or some other suitable plan will be promptly authorized.

DEPARTMENT OF THE INTERIOR

The Interior Department, in the problems of administration included
within its jurisdiction, presents more difficult questions than any
other. This has been due perhaps to temporary causes of a political
character, but more especially to the inherent difficulty in the
performance of some of the functions which are assigned to it. Its chief
duty is the guardianship of the public domain and the disposition of
that domain to private ownership under homestead, mining, and other
laws, by which patents from the Government to the individual are
authorized on certain conditions. During the last decade the public
seemed to become suddenly aware that a very large part of its domain had
passed from its control into private ownership, under laws not well
adapted to modern conditions, and also that in the doing of this the
provisions of existing law and regulations adopted in accordance with
law had not been strictly observed, and that in the transfer of title
much fraud had intervened, to the pecuniary benefit of dishonest
persons. There arose thereupon a demand for conservation of the public
domain, its protection against fraudulent diminution, and the
preservation of that part of it from private acquisition which it seemed
necessary to keep for future public use. The movement, excellent in the
intention which prompted it, and useful in its results, has nevertheless
had some bad effects, which the western country has recently been
feeling and in respect of which there is danger of a reaction toward
older abuses unless we can attain the golden mean, which consists in the
prevention of the mere exploitation of the public domain for private
purposes while at the same, time facilitating its development for the
benefit of the local public.

The land laws need complete revision to secure proper conservation on
the one hand of land that ought to be kept in public use and, on the
other hand, prompt disposition of those lands which ought to be disposed
in private ownership or turned over to private use by properly guarded
leases. In addition to this there are not enough officials in our Land
Department with legal knowledge sufficient promptly to make the
decisions which are called for. The whole land-laws system should be
reorganized, and not until it is reorganized, will decisions be made as
promptly as they ought, or will men who have earned title to public land
under the statute receive their patents within a reasonably short
period. The present administration has done what it could in this
regard, but the necessity for reform and change by a revision of the
laws and an increase and reorganization of the force remains, and I
submit to Congress the wisdom of a full examination of this subject, in
order that a very large and important part of our people in the West may
be relieved from a just cause of irritation.

I invite your attention to the discussion by the Secretary of the
Interior of the need for legislation with respect to mining claims,
leases of coal lands in this country and in Alaska, and for similar
disposition of oil, phosphate, and potash lands, and also to his
discussion of the proper use to be made of water-power sites held by the
Government. Many of these lands are now being withheld from use by the
public under the general withdrawal act which was passed by the last
Congress. That act was not for the purpose of disposing of the question,
but it was for the purpose of preserving the lands until the question
could be solved. I earnestly urge that the matter is of the highest
importance to our western fellow citizens and ought to command the
immediate attention of the legislative branch of the Government.

Another function which the Interior Department has to perform is that of
the guardianship of Indians. In spite of everything which has been said
in criticism of the policy of our Government toward the Indians, the
amount of wealth which is now held by it for these wards per capita
shows that the Government has been generous; but the management of so
large an estate, with the great variety of circumstances that surround
each tribe and each case, calls for the exercise of the highest business
discretion, and the machinery provided in the Indian Bureau for the
discharge of this function is entirely inadequate. The position of
Indian commissioner demands the exercise of business ability of the
first order, and it is difficult to secure such talent for the salary
provided.

The condition of health of the Indian and the prevalence in the tribes
of curable diseases has been exploited recently in the press. In a
message to Congress at its last session I brought this subject to its
attention and invited a special appropriation, in order that our
facilities for overcoming diseases among the Indians might be properly
increased, but no action was then taken by Congress on the subject, nor
has such appropriation been made since.

The commission appointed by authority of the Congress to report on
proper method of securing railroad development in Alaska is formulating
its report, and I expect to have an opportunity before the end of this
session to submit its recommendations.

DEPARTMENT OF AGRICULTURE

The far-reaching utility of the educational system carried on by the
Department of Agriculture for the benefit of the farmers of our country
calls for no elaboration. Each year there is a growth in the variety of
facts which it brings out for the benefit of the farmer, and each year
confirms the wisdom of the expenditure of the appropriations made for
that department.

PURE-FOOD LAW

The Department of Agriculture is charged with the execution of the
pure-food law. The passage of this encountered much opposition from
manufacturers and others who feared the effect upon their business of
the enforcement of its provisions. The opposition aroused the just
indignation of the public, and led to an intense sympathy with the
severe and rigid enforcement of the provisions of the new law. It had to
deal in many instances with the question whether or not products of
large business enterprises, in the form of food preparations, were
deleterious to the public health; and while in a great majority of
instances this issue was easily determinable, there were not a few cases
in which it was hard to draw the line between a useful and a harmful
food preparation. In cases like this when a decision involved the
destruction of great business enterprises representing the investment of
large capital and the expenditure of great energy and ability, the
danger of serious injustice was very considerable in the enforcement of
a new law under the spur of great public indignation. The public
officials charged with executing the law might do injustice in heated
controversy through unconscious pride of opinion and obstinacy of
conclusion. For this reason President Roosevelt felt justified in
creating a board of experts, known as the Remsen Board, to whom in cases
of much importance an appeal might be taken and a review had of a
decision of the Bureau of Chemistry in the Agricultural Department. I
heartily agree that it was wise to create this board in order that
injustice might not be done. The questions which arise are not generally
those involving palpable injury to health, but they are upon the narrow
and doubtful line in respect of which it is better to be in some error
not dangerous than to be radically destructive. I think that the time
has come for Congress to recognize the necessity for some such tribunal
of appeal and to make specific statutory provision for it. While we are
struggling to suppress an evil of great proportions like that of impure
food, we must provide machinery in the law itself to prevent its
becoming an instrument of oppression, and we ought to enable those whose
business is threatened with annihilation to have some tribunal and some
form of appeal in which they have a complete day in court.

AGRICULTURAL CREDITS

I referred in my first message to the question of improving the system
of agricultural credits. The Secretary of Agriculture has made an
investigation into the matter of credits in this country, and I commend
a consideration of the information which through his agents he has been
able to collect. It does not in any way minimize the importance of the
proposal, but it gives more accurate information upon some of the phases
of the question than we have heretofore had.

DEPARTMENT OF COMMERCE AND LABOR

I commend to Congress an examination of the report of the Secretary of
Commerce and Labor, and especially that part in which he discusses the
office of the Bureau of Corporations, the value to commerce of a
proposed trade commission, and the steps which he has taken to secure
the organization of a national chamber of commerce. I heartily commend
his view that the plan of a trade commission which looks to the fixing
of prices is altogether impractical and ought not for a moment to be
considered as a possible solution of the trust question.

The trust question in the enforcement of the Sherman antitrust law is
gradually solving itself, is maintaining the principle and restoring the
practice of competition, and if the law is quietly but firmly enforced,
business will adjust itself to the statutory requirements, and the
unrest in commercial circles provoked by the trust discussion will
disappear.

PANAMA-PACIFIC INTERNATIONAL EXPOSITION

In conformity with a joint resolution of Congress, an Executive
proclamation was issued last February, inviting the nations of the world
to participate in the Panama-Pacific International Exposition to be held
at San Francisco to celebrate the construction of the Panama, Canal. A
sympathetic response was immediately forthcoming, and several nations
have already selected the sites for their buildings. In furtherance of
my invitation, a special commission visited European countries during
the past summer, and received assurance of hearty cooperation in the
task of bringing together a universal industrial, military, and naval
display on an unprecedented scale. It is evident that the exposition
will be an accurate mirror of the world's activities as they appear 400
years after the date of the discovery of the Pacific Ocean.

It is the duty of the United States to make the nations welcome at San
Francisco and to facilitate such acquaintance between them and ourselves
as will promote the expansion of commerce and familiarize the world with
the new trade route through the Panama Canal. The action of the State
governments and individuals assures a comprehensive exhibit of the
resources of this country and of the progress of the people. This
participation by State and individuals should be supplemented by an
adequate showing of the varied and unique activities of the National
Government. The United States can not with good grace invite foreign
governments to erect buildings and make expensive exhibits while itself
refusing to participate. Nor would it be wise to forego the opportunity
to join with other nations in the inspiring interchange of ideas tending
to promote intercourse, friendship, and commerce. It is the duty of the
Government to foster and build up commerce through the canal, just as it
was the duty of the Government to construct it.

I earnestly recommend the appropriation at this session of such a sum as
will enable the United States to construct a suitable building, install
a governmental exhibit, and otherwise participate in the Panama-Pacific
International Exposition in a manner commensurate with the dignity of a
nation whose guests are to be the people of the world. I recommend also
such legislation as will facilitate the entry of material intended for
exhibition and protect foreign exhibitors against infringement of
patents and the unauthorized copying of patterns and designs. All aliens
sent to San Francisco to construct and care for foreign buildings and
exhibits should be admitted without restraint or embarrassment.

THE DISTRICT OF COLUMBIA AND THE CITY OF WASHINGTON

The city of Washington is a beautiful city, with a population of
352,936, of whom 98,667 are colored. The annual municipal budget is
about $14,000,000. The presence of the National Capital and other
governmental structures constitutes the chief beauty and interest of the
city. The public grounds are extensive, and the opportunities for
improving the city and making it still more attractive are very great.
Under a plan adopted some years ago, one half the cost of running the
city is paid by taxation upon the property, real and personal, of the
citizens and residents, and the other half is borne by the General
Government. The city is expanding at a remarkable rate, and this can
only be accounted for by the coming here from other parts of the country
of well-to-do people who, having finished their business careers
elsewhere, build and make this their permanent place of residence.

On the whole, the city as a municipality is very well governed. It is
well lighted, the water supply is good, the streets are well paved, the
police force is well disciplined, crime is not flagrant, and while it
has purlieus and centers of vice, like other large cities, they are not
exploited, they do not exercise any influence or control in the
government of the city, and they are suppressed in as far as it has been
found practicable. Municipal graft is inconsiderable. There are interior
courts in the city that are noisome and centers of disease and the
refuge of criminals, but Congress has begun to clean these out, and
progress has been made in the case of the most notorious of these, which
is known as "Willow Tree Alley." This movement should continue.

The mortality for the past year was at the rate Of 17.80 per 1,000 of
both races; among the whites it was 14.61 per thousand, and among the
blacks 26.12 per thousand. These are the lowest mortality rates ever
recorded in the District.

One of the most crying needs in the government of the District is a
tribunal or public authority for the purpose of supervising the
corporations engaged in the operation of public utilities. Such a bill
is pending in Congress and ought to pass. Washington should show itself
under the direction of Congress to be a city with a model form of
government, but as long as such authority over public utilities is
withheld from the municipal government, it must always be defective.

Without undue criticism of the present street railway accommodations, it
can be truly said that under the spur of a public utilities commission
they might be substantially improved.

While the school system of Washington perhaps might be bettered in the
economy of its management and the distribution of its buildings, its
usefulness has nevertheless greatly increased in recent years, and it
now offers excellent facilities for primary and secondary education.

From time to time there is considerable agitation in Washington in favor
of granting the citizens of the city the franchise and constituting an
elective government. I am strongly opposed to this change. The history
of Washington discloses a number of experiments of this kind, which have
always been abandoned as unsatisfactory. The truth is this is a city
governed by a popular body, to wit, the Congress of the United States,
selected from the people of the United States, who own Washington. The
people who come here to live do so with the knowledge of the origin of
the city and the restrictions, and therefore voluntarily give up the
privilege of living in a municipality governed by popular vote.
Washington is so unique in its origin and in its use for housing and
localizing the sovereignty of the Nation that the people who live here
must regard its peculiar character and must be content to subject
themselves to the control of a body selected by all the people of the
Nation. I agree that there are certain inconveniences growing out of the
government of a city by a national legislature like Congress, and it
would perhaps be possible to lessen these by the delegation by Congress
to the District Commissioners of greater legislative power for the
enactment of local laws than they now possess, especially those of a
police character.

Every loyal American has a personal pride in the beauty of Washington
and in its development and growth. There is no one with a proper
appreciation of our Capital City who would favor a niggardly policy in
respect to expenditures from the National Treasury to add to the
attractiveness of this city, which belongs to every citizen of the
entire country, and which no citizen visits without a sense of pride of
ownership. We have had restored by a Commission of Fine Arts, at the
instance of a committee of the Senate, the original plan of the French
engineer L'Enfant for the city of Washington, and we know with great
certainty the course which the improvement of Washington should take.
Why should there be delay in making this improvement in so far as it
involves the extension of the parking system and the construction of
greatly needed public buildings? Appropriate buildings for the State
Department, the Department of justice, and the Department of Commerce
and Labor have been projected, plans have been approved, and nothing is
wanting but the appropriations for the beginning and completion of the
structures. A hall of archives is also badly needed, but nothing has
been done toward its construction, although the land for it has long
been bought and paid for. Plans have been made for the union of Potomac
Park with the valley of Rock Creek and Rock Creek Park, and the
necessity for the connection between the Soldiers' Home and Rock Creek
Park calls for no comment. I ask again why there should be delay in
carrying out these plans We have the money in the Treasury, the plans
are national in their scope, and the improvement should be treated as a
national project. The plan will find a hearty approval throughout the
country. I am quite sure, from the information which I have, that, at
comparatively small expense, from that part of the District of Columbia
which was retroceded to Virginia, the portion including the Arlington
estate, Fort Myer, and the palisades of the Potomac can be acquired by
purchase and the jurisdiction of the State of Virginia over this land
ceded to the Nation. This ought to be done.

The construction of the Lincoln Memorial and of a memorial bridge from
the base of the Lincoln Monument to Arlington would be an appropriate
and symbolic expression of the union of the North and the South at the
Capital of the Nation. I urge upon Congress the appointment of a
commission to undertake these national improvements, and to submit a
plan for their execution; and when the plan has been submitted and
approved, and the work carried out, Washington will really become what
it ought to be--the most beautiful city in the world.

***

State of the Union Address
Woodrow Wilson
December 2, 1913

Gentlemen of the Congress:

In pursuance of my constitutional duty to "give to the Congress
information of the state of the Union," I take the liberty of addressing
you on several matters which ought, as it seems to me, particularly to
engage the attention of your honorable bodies, as of all who study the
welfare and progress of the Nation.

I shall ask your indulgence if I venture to depart in some degree from
the usual custom of setting before you in formal review the many matters
which have engaged the attention and called for the action of the
several departments of the Government or which look to them for early
treatment in the future, because the list is long, very long, and would
suffer in the abbreviation to which I should have to subject it. I shall
submit to you the reports of the heads of the several departments, in
which these subjects are set forth in careful detail, and beg that they
may receive the thoughtful attention of your committees and of all
Members of the Congress who may have the leisure to study them. Their
obvious importance, as constituting the very substance of the business
of the Government, makes comment and emphasis on my part unnecessary.

The country, I am thankful to say, is at peace with all the world, and
many happy manifestations multiply about us of a growing cordiality and
sense of community of interest among the nations, foreshadowing an age
of settled peace and good will. More and more readily each decade do the
nations manifest their willingness to bind themselves by solemn treaty
to the processes of peace, the processes of frankness and fair
concession. So far the United States has stood at the front of such
negotiations. She will, I earnestly hope and confidently believe, give
fresh proof of her sincere adherence to the cause of international
friendship by ratifying the several treaties of arbitration awaiting
renewal by the Senate. In addition to these, it has been the privilege
of the Department of State to gain the assent, in principle, of no less
than 31 nations, representing four-fifths of the population of the
world, to the negotiation of treaties by which it shall be agreed that
whenever differences of interest or of policy arise which can not be
resolved by the ordinary processes of diplomacy they shall be publicly
analyzed, discussed, and reported upon by a tribunal chosen by the
parties before either nation determines its course of action.

There is only one possible standard by which to determine controversies
between the United States and other nations, and that is compounded of
these two elements: Our own honor and our obligations to the peace of
the world. A test so compounded ought easily to be made to govern both
the establishment of new treaty obligations and the interpretation of
those already assumed.

There is but one cloud upon our horizon. That has shown itself to the
south of us, and hangs over Mexico. There can be no certain prospect of
peace in America until Gen. Huerta has surrendered his usurped authority
in Mexico; until it is understood on all hands, indeed, that such
pretended governments will not be countenanced or dealt with by-the
Government of the United States. We are the friends of constitutional
government in America; we are more than its friends, we are its
champions; because in no other way can our neighbors, to whom we would
wish in every way to make proof of our friendship, work out their own
development in peace and liberty. Mexico has no Government. The attempt
to maintain one at the City of Mexico has broken down, and a mere
military despotism has been set up which has hardly more than the
semblance of national authority. It originated in the usurpation of
Victoriano Huerta, who, after a brief attempt to play the part of
constitutional President, has at last cast aside even the pretense of
legal right and declared himself dictator. As a consequence, a condition
of affairs now exists in Mexico which has made it doubtful whether even
the most elementary and fundamental rights either of her own people or
of the citizens of other countries resident within her territory can
long be successfully safeguarded, and which threatens, if long
continued, to imperil the interests of peace, order, and tolerable life
in the lands immediately to the south of us. Even if the usurper had
succeeded in his purposes, in despite of the constitution of the
Republic and the rights of its people, he would have set up nothing but
a precarious and hateful power, which could have lasted but a little
while, and whose eventual downfall would have left the country in a more
deplorable condition than ever. But he has not succeeded. He has
forfeited the respect and the moral support even of those who were at
one time willing to see him succeed. Little by little he has been
completely isolated. By a little every day his power and prestige are
crumbling and the collapse is not far away. We shall not, I believe, be
obliged to alter our policy of watchful waiting. And then, when the end
comes, we shall hope to see constitutional order restored in distressed
Mexico by the concert and energy of such of her leaders as prefer the
liberty of their people to their own ambitions.

I turn to matters of domestic concern. You already have under
consideration a bill for the reform of our system of banking and
currency, for which the country waits with impatience, as for something
fundamental to its whole business life and necessary to set credit free
from arbitrary and artificial restraints. I need not say how earnestly I
hope for its early enactment into law. I take leave to beg that the
whole energy and attention of the Senate be concentrated upon it till
the matter is successfully disposed of. And yet I feel that the request
is not needed-that the Members of that great House need no urging in
this service to the country.

I present to you, in addition, the urgent necessity that special
provision be made also for facilitating the credits needed by the
farmers of the country. The pending currency bill does the farmers a
great service. It puts them upon an equal footing with other business
men and masters of enterprise, as it should; and upon its passage they
will find themselves quit of many of the difficulties which now hamper
them in the field of credit. The farmers, of course, ask and should be
given no special privilege, such as extending to them the credit of the
Government itself. What they need and should obtain is legislation which
will make their own abundant and substantial credit resources available
as a foundation for joint, concerted local action in their own behalf in
getting the capital they must use. It is to this we should now address
ourselves.

It has, singularly enough, come to pass that we have allowed the
industry of our farms to lag behind the other activities of the country
in its development. I need not stop to tell you how fundamental to the
life of the Nation is the production of its food. Our thoughts may
ordinarily be concentrated upon the cities and the hives of industry,
upon the cries of the crowded market place and the clangor of the
factory, but it is from the quiet interspaces of the open valleys and
the free hillsides that we draw the sources of life and of prosperity,
from the farm and the ranch, from the forest and the mine. Without these
every street would be silent, every office deserted, every factory
fallen into disrepair. And yet the farmer does not stand upon the same
footing with the forester and the miner in the market of credit. He is
the servant of the seasons. Nature determines how long he must wait for
his crops, and will not be hurried in her processes. He may give his
note, but the season of its maturity depends upon the season when his
crop matures, lies at the gates of the market where his products are
sold. And the security he gives is of a character not known in the
broker's office or as familiarly as it might be on the counter of the
banker.

The Agricultural Department of the Government is seeking to assist as
never before to make farming an efficient business, of wide co-operative
effort, in quick touch with the markets for foodstuffs. The farmers and
the Government will henceforth work together as real partners in this
field, where we now begin to see our way very clearly and where many
intelligent plans are already being put into execution. The Treasury of
the United States has, by a timely and well-considered distribution of
its deposits, facilitated the moving of the crops in the present season
and prevented the scarcity of available funds too often experienced at
such times. But we must not allow ourselves to depend upon extraordinary
expedients. We must add the means by which the, farmer may make his
credit constantly and easily available and command when he will the
capital by which to support and expand his business. We lag behind many
other great countries of the modern world in attempting to do this.
Systems of rural credit have been studied and developed on the other
side of the water while we left our farmers to shift for themselves in
the ordinary money market. You have but to look about you in any rural
district to see the result, the handicap and embarrassment which have
been put upon those who produce our food.

Conscious of this backwardness and neglect on our part, the Congress
recently authorized the creation of a special commission to study the
various systems of rural credit which have been put into operation in
Europe, and this commission is already prepared to report. Its report
ought to make it easier for us to determine what methods will be best
suited to our own farmers. I hope and believe that the committees of the
Senate and House will address themselves to this matter with the most
fruitful results, and I believe that the studies and recently formed
plans of the Department of Agriculture may be made to serve them very
greatly in their work of framing appropriate and adequate legislation.
It would be indiscreet and presumptuous in anyone to dogmatize upon so
great and many-sided a question, but I feel confident that common
counsel will produce the results we must all desire.

Turn from the farm to the world of business which centers in the city
and in the factory, and I think that all thoughtful observers will agree
that the immediate service we owe the business communities of the
country is to prevent private monopoly more effectually than it has yet
been prevented. I think it will be easily agreed that we should let the
Sherman anti-trust law stand, unaltered, as it is, with its debatable
ground about it, but that we should as much as possible reduce the area
of that debatable ground by further and more explicit legislation; and
should also supplement that great act by legislation which will not only
clarify it but also facilitate its administration and make it fairer to
all concerned. No doubt we shall all wish, and the country will expect,
this to be the central subject of our deliberations during the present
session; but it is a subject so many-sided and so deserving of careful
and discriminating discussion that I shall take the liberty of
addressing you upon it in a special message at a later date than this.
It is of capital importance that the business men of this country should
be relieved of all uncertainties of law with regard to their enterprises
and investments and a clear path indicated which they can travel without
anxiety. It is as important that they should be relieved of
embarrassment and set free to prosper as that private monopoly should be
destroyed. The ways of action should be thrown wide open.

I turn to a subject which I hope can be handled promptly and without
serious controversy of any kind. I mean the method of selecting nominees
for the Presidency of the United States. I feel confident that I do not
misinterpret the wishes or the expectations of the country when I urge
the prompt enactment of legislation which will provide for primary
elections throughout the country at which the voters of the several
parties may choose their nominees for the Presidency without the
intervention of nominating conventions. I venture the suggestion that
this legislation should provide for the retention of party conventions,
but only for the purpose of declaring and accepting the verdict of the
primaries and formulating the platforms of the parties; and I suggest
that these conventions should consist not of delegates chosen for this
single purpose, but of the nominees for Congress, the nominees for
vacant seats in the Senate of the United States, the Senators whose
terms have not yet closed, the national committees, and the candidates
for the Presidency themselves, in order that platforms may be framed by
those responsible to the people for carrying them into effect.

These are all matters of vital domestic concern, and besides them,
outside the charmed circle of our own national life in which our
affections command us, as well as our consciences, there stand out our
obligations toward our territories over sea. Here we are trustees. Porto
Rico, Hawaii, the Philippines, are ours, indeed, but not ours to do what
we please with. Such territories, once regarded as mere possessions, are
no longer to be selfishly exploited; they are part of the domain of
public conscience and of serviceable and enlightened statesmanship. We
must administer them for the people who live in them and with the same
sense of responsibility to them as toward our own people in our domestic
affairs. No doubt we shall successfully enough bind Porto Rico and the
Hawaiian Islands to ourselves by ties of justice and interest and
affection, but the performance of our duty toward the Philippines is a
more difficult and debatable matter. We can satisfy the obligations of
generous justice toward the people of Porto Rico by giving them the
ample and familiar rights and privileges accorded our own citizens in
our own territories and our obligations toward the people of Hawaii by
perfecting the provisions for self-government already granted them, but
in the Philippines we must go further. We must hold steadily in view
their ultimate independence, and we must move toward the time of that
independence as steadily as the way can be cleared and the foundations
thoughtfully and permanently laid.

Acting under the authority conferred upon the President by Congress, I
have already accorded the people of the islands a majority in both
houses of their legislative body by appointing five instead of four
native citizens to the membership of the commission. I believe that in
this way we shall make proof of their capacity in counsel and their
sense of responsibility in the exercise of political power, and that the
success of this step will be sure to clear our view for the steps which
are to follow. Step by step we should extend and perfect the system of
self-government in the islands, making test of them and modifying them
as experience discloses their successes and their failures; that we
should more and more put under the control of the native citizens of the
archipelago the essential instruments of their life, their local
instrumentalities of government, their schools, all the common interests
of their communities, and so by counsel and experience set up a
government which all the world will see to be suitable to a people whose
affairs are under their own control. At last, I hope and believe, we are
beginning to gain the confidence of the Filipino peoples. By their
counsel and experience, rather than by our own, we shall learn how best
to serve them and how soon it will be possible and wise to withdraw our
supervision. Let us once find the path and set out with firm and
confident tread upon it and we shall not wander from it or linger upon
it.

A duty faces us with regard to Alaska which seems to me very pressing
and very imperative; perhaps I should say a double duty, for it concerns
both the political and the material development of the Territory. The
people of Alaska should be given the full Territorial form of
government, and Alaska, as a storehouse, should be unlocked. One key to
it is a system of railways. These the Government should itself build and
administer, and the ports and terminals it should itself control in the
interest of all who wish to use them for the service and development of
the country and its people.

But the construction of railways is only the first step; is only
thrusting in the key to the storehouse and throwing back the lock and
opening the door. How the tempting resources of the country are to be
exploited is another matter, to which I shall take the liberty of from
time to time calling your attention, for it is a policy which must be
worked out by well-considered stages, not upon theory, but upon lines of
practical expediency. It is part of our general problem of conservation.
We have a freer hand in working out the problem in Alaska than in the
States of the Union; and yet the principle and object are the same,
wherever we touch it. We must use the resources of the country, not lock
them up. There need be no conflict or jealousy as between State and
Federal authorities, for there can be no essential difference of purpose
between them. The resources in question must be used, but not destroyed
or wasted; used, but not monopolized upon any narrow idea of individual
rights as against the abiding interests of communities. That a policy
can be worked out by conference and concession which will release these
resources and yet not jeopard or dissipate them, I for one have no
doubt; and it can be done on lines of regulation which need be no less
acceptable to the people and governments of the States concerned than to
the people and Government of the Nation at large, whose heritage these
resources are. We must bend our counsels to this end. A common purpose
ought to make agreement easy.

Three or four matters of special importance and significance I beg, that
you will permit me to mention in closing.

Our Bureau of Mines ought to be equipped and empowered to render even
more effectual service than it renders now in improving the conditions
of mine labor and making the mines more economically productive as well
as more safe. This is an all-important part of the work of conservation;
and the conservation of human life and energy lies even nearer to our
interests than the preservation from waste of our material resources.

We owe it, in mere justice to the railway employees of the country, to
provide for them a fair and effective employers' liability act; and a
law that we can stand by in this matter will be no less to the advantage
of those who administer the railroads of the country than to the
advantage of those whom they employ. The experience of a large number of
the States abundantly proves that.

We ought to devote ourselves to meeting pressing demands of plain
justice like this as earnestly as to the accomplishment of political and
economic reforms. Social justice comes first. Law is the machinery for
its realization and is vital only as it expresses and embodies it.

An international congress for the discussion of all questions that
affect safety at sea is now sitting in London at the suggestion of our
own Government. So soon as the conclusions of that congress can be
learned and considered we ought to address ourselves, among other
things, to the prompt alleviation of the very unsafe, unjust, and
burdensome conditions which now surround the employment of sailors and
render it extremely difficult to obtain the services of spirited and
competent men such as every ship needs if it is to be safely handled and
brought to port.

May I not express the very real pleas-are I have experienced in
co-operating with this Congress and sharing with it the labors of common
service to which it has devoted itself so unreservedly during the past
seven months of uncomplaining concentration upon the business of
legislation? Surely it is a proper and pertinent part of my report on
"the state of the Union" to express my admiration for the diligence, the
good temper, and the full comprehension of public duty which has already
been manifested by both the Houses; and I hope that it may not be deemed
an impertinent intrusion of myself into the picture if I say with how
much and how constant satisfaction I have availed myself of the
privilege of putting my time and energy at their disposal alike in
counsel and in action.

***

State of the Union Address
Woodrow Wilson
December 8, 1914

GENTLEMEN OF THE CONGRESS:

The session upon which you are now entering will be the closing session
of the Sixty-third Congress, a Congress, I venture to say, which will
long be remembered for the great body of thoughtful and constructive
work which it has done, in loyal response to the thought and needs of
the country. I should like in this address to review the notable record
and try to make adequate assessment of it; but no doubt we stand too
near the work that has been done and are ourselves too much part of it
to play the part of historians toward it.

Our program of legislation with regard to the regulation of business is
now virtually complete. It has been put forth, as we intended, as a
whole, and leaves no conjecture as to what is to follow. The road at
last lies clear and firm before business. It is a road which it can
travel without fear or embarrassment. It is the road to ungrudged,
unclouded success. In it every honest man, every man who believes that
the public interest is part of his own interest, may walk with perfect
confidence.

Moreover, our thoughts are now more of the future than of the past.
While we have worked at our tasks of peace the circumstances of the
whole age have been altered by war. What we have done for our own land
and our own people we did with the best that was in us, whether of
character or of intelligence, with sober enthusiasm and a confidence in
the principles upon which we were acting which sustained us at every
step of the difficult undertaking; but it is done. It has passed from
our hands. It is now an established part of the legislation of the
country. Its usefulness, its effects will disclose themselves in
experience. What chiefly strikes us now, as we look about us during
these closing days of a year which will be forever memorable in the
history of the world, is that we face new tasks, have been facing them
these six months, must face them in the months to come,-face them
without partisan feeling, like men who have forgotten everything but a
common duty and the fact that we are representatives of a great people
whose thought is not of us but of what America owes to herself and to
all mankind in such circumstances as these upon which we look amazed and
anxious.

War has interrupted the means of trade not only but also the processes
of production. In Europe it is destroying men and resources wholesale
and upon a scale unprecedented and appalling, There is reason to fear
that the time is near, if it be not already at hand, when several of the
countries of Europe will find it difficult to do for their people what
they have hitherto been always easily able to do,--many essential and
fundamental things. At any rate, they will need our help and our
manifold services as they have never needed them before; and we should
be ready, more fit and ready than we have ever been.

It is of equal consequence that the nations whom Europe has usually
supplied with innumerable articles of manufacture and commerce of which
they are in constant need and without which their economic development
halts and stands still can now get only a small part of what they
formerly imported and eagerly look to us to supply their all but empty
markets. This is particularly true of our own neighbors, the States,
great and small, of Central and South America. Their lines of trade have
hitherto run chiefly athwart the seas, not to our ports but to the ports
of Great Britain and of the older continent of Europe. I do not stop to
inquire why, or to make any comment on probable causes. What interests
us just now is not the explanation but the fact, and our duty and
opportunity in the presence of it. Here are markets which we must
supply, and we must find the means of action. The United States, this
great people for whom we speak and act, should be ready, as never
before, to serve itself and to serve mankind; ready with its resources,
its energies, its forces of production, and its means of distribution.

It is a very practical matter, a matter of ways and means. We have the
resources, but are we fully ready to use them? And, if we can make ready
what we have, have we the means at hand to distribute it? We are not
fully ready; neither have we the means of distribution. We are willing,
but we are not fully able. We have the wish to serve and to serve
greatly, generously; but we are not prepared as we should be. We are not
ready to mobilize our resources at once. We are not prepared to use them
immediately and at their best, without delay and without waste.

To speak plainly, we have grossly erred in the way in which we have
stunted and hindered the development of our merchant marine. And now,
when we need ships, we have not got them. We have year after year
debated, without end or conclusion, the best policy to pursue with
regard to the use of the ores and forests and water powers of our
national domain in the rich States of the West, when we should have
acted; and they are still locked up. The key is still turned upon them,
the door shut fast at which thousands of vigorous men, full of
initiative, knock clamorously for admittance. The water power of our
navigable streams outside the national domain also, even in the eastern
States, where we have worked and planned for generations, is still not
used as it might be, because we will and we won't; because the laws we
have made do not intelligently balance encouragement against restraint.
We withhold by regulation.

I have come to ask you to remedy and correct these mistakes and
omissions, even at this short session of a Congress which would
certainly seem to have done all the work that could reasonably be
expected of it. The time and the circumstances are extraordinary, and so
must our efforts be also.

Fortunately, two great measures, finely conceived, the one to unlock,
with proper safeguards, the resources of the national domain, the other
to encourage the use of the navigable waters outside that domain for the
generation of power, have already passed the House of Representatives
and are ready for immediate consideration and action by the Senate. With
the deepest earnestness I urge their prompt passage. In them both we
turn our backs upon hesitation and makeshift and formulate a genuine
policy of use and conservation, in the best sense of those words. We owe
the one measure not only to the people of that great western country for
whose free and systematic development, as it seems to me, our
legislation has done so little, but also to the people of the Nation as
a whole; and we as clearly owe the other fulfillment of our repeated
promises that the water power of the country should in fact as well as
in name be put at the disposal of great industries which can make
economical and profitable use of it, the rights of the public being
adequately guarded the while, and monopoly in the use prevented. To have
begun such measures and not completed them would indeed mar the record
of this great Congress very seriously. I hope and confidently believe
that they will be completed.

And there is another great piece of legislation which awaits and should
receive the sanction of the Senate: I mean the bill which gives a larger
measure of self-government to the people of the Philippines. How better,
in this time of anxious questioning and perplexed policy, could we show
our confidence in the principles of liberty, as the source as well as
the expression of life, how better could we demonstrate our own
self-possession and steadfastness in the courses of justice and
disinterestedness than by thus going calmly forward to fulfill our
promises to a dependent people, who will now look more anxiously than
ever to see whether we have indeed the liberality, the unselfishness,
the courage, the faith we have boasted and professed. I can not believe
that the Senate will let this great measure of constructive justice
await the action of another Congress. Its passage would nobly crown the
record of these two years of memorable labor.

But I think that you will agree with me that this does not complete the
toll of our duty. How are we to carry our goods to the empty markets of
which I have spoken if we have not the ships? How are we to build up a
great trade if we have not the certain and constant means of
transportation upon which all profitable and useful commerce depends?
And how are we to get the ships if we wait for the trade to develop
without them? To correct the many mistakes by which we have discouraged
and all but destroyed the merchant marine of the country, to retrace the
steps by which we have.. it seems almost deliberately, withdrawn our
flag from the seas.. except where, here and there, a ship of war is
bidden carry it or some wandering yacht displays it, would take a long
time and involve many detailed items of legislation, and the trade which
we ought immediately to handle would disappear or find other channels
while we debated the items.

The case is not unlike that which confronted us when our own continent
was to be opened up to settlement and industry, and we needed long lines
of railway, extended means of transportation prepared beforehand, if
development was not to lag intolerably and wait interminably. We
lavishly subsidized the building of transcontinental railroads. We look
back upon that with regret now, because the subsidies led to many
scandals of which we are ashamed; but we know that the railroads had to
be built, and if we had it to do over again we should of course build
them, but in another way. Therefore I propose another way of providing
the means of transportation, which must precede, not tardily follow, the
development of our trade with our neighbor states of America. It may
seem a reversal of the natural order of things, but it is true, that the
routes of trade must be actually opened-by many ships and regular
sailings and moderate charges-before streams of merchandise will flow
freely and profitably through them.

Hence the pending shipping bill, discussed at the last session but as
yet passed by neither House. In my judgment such legislation is
imperatively needed and can not wisely be postponed. The Government must
open these gates of trade, and open them wide; open them before it is
altogether profitable to open them, or altogether reasonable to ask
private capital to open them at a venture. It is not a question of the
Government monopolizing the field. It should take action to make it
certain that transportation at reasonable rates will be promptly
provided, even where the carriage is not at first profitable; and then,
when the carriage has become sufficiently profitable to attract and
engage private capital, and engage it in abundance, the Government ought
to withdraw. I very earnestly hope that the Congress will be of this
opinion, and that both Houses will adopt this exceedingly important
bill.

The great subject of rural credits still remains to be dealt with, and
it is a matter of deep regret that the difficulties of the subject have
seemed to render it impossible to complete a bill for passage at this
session. But it can not be perfected yet, and therefore there are no
other constructive measures the necessity for which I will at this time
call your attention to; but I would be negligent of a very manifest duty
were I not to call the attention of the Senate to the fact that the
proposed convention for safety at sea awaits its confirmation and that
the limit fixed in the convention itself for its acceptance is the last
day of the present month. The conference in which this convention
originated was called by the United States; the representatives of the
United States played a very influential part indeed in framing the
provisions of the proposed convention; and those provisions are in
themselves for the most part admirable. It would hardly be consistent
with the part we have played in the whole matter to let it drop and go
by the board as if forgotten and neglected. It was ratified in May by
the German Government and in August by the Parliament of Great Britain.
It marks a most hopeful and decided advance in international
civilization. We should show our earnest good faith in a great matter by
adding our own acceptance of it.

There is another matter of which I must make special mention, if I am to
discharge my conscience, lest it should escape your attention. It may
seem a very small thing. It affects only a single item of appropriation.
But many human lives and many great enterprises hang upon it. It is the
matter of making adequate provision for the survey and charting of our
coasts. It is immediately pressing and exigent in connection with the
immense coast line of Alaska, a coast line greater than that of the
United States themselves, though it is also very important indeed with
regard to the older coasts of the continent. We can not use our great
Alaskan domain, ships will not ply thither, if those coasts and their
many hidden dangers are not thoroughly surveyed and charted. The work is
incomplete at almost every point. Ships and lives have been lost in
threading what were supposed to be well-known main channels. We have not
provided adequate vessels or adequate machinery for the survey and
charting. We have used old vessels that were not big enough or strong
enough and which were so nearly unseaworthy that our inspectors would
not have allowed private owners to send them to sea. This is a matter
which, as I have said, seems small, but is in reality very great. Its
importance has only to be looked into to be appreciated.

Before I close may I say a few words upon two topics, much discussed out
of doors, upon which it is highly important that our judgment should be
clear, definite, and steadfast?

One of these is economy in government expenditures. The duty of economy
is not debatable. It is manifest and imperative. In the appropriations
we pass we are spending the money of the great people whose servants we
are,-not our own. We are trustees and responsible stewards in the
spending. The only thing debatable and upon which we should be careful
to make our thought and purpose clear is the kind of economy demanded of
us. I assert with the greatest confidence that the people of the United
States are not jealous of the amount their Government costs if they are
sure that they get what they need and desire for the outlay, that the
money is being spent for objects of which they approve, and that it is
being applied with good business sense and management.

Governments grow, piecemeal, both in their tasks and in the means by
which those tasks are to be performed, and very few Governments are
organized, I venture to say, as wise and experienced business men would
organize them if they had a clean sheet of paper to write upon.
Certainly the Government of the United States is not. I think that it is
generally agreed that there should be a systematic reorganization and
reassembling of its parts so as to secure greater efficiency and effect
considerable savings in expense. But the amount of money saved in that
way would, I believe, though no doubt considerable in itself, running,
it may be, into the millions, be relatively small,-small, I mean, in
proportion to the total necessary outlays of the Government. It would be
thoroughly worth effecting, as every saving would, great or small. Our
duty is not altered by the scale of the saving. But my point is that the
people of the United States do not wish to curtail the activities of
this Government; they wish, rather, to enlarge them; and with every
enlargement, with the mere growth, indeed, of the country itself, there
must come, of course, the inevitable increase of expense. The sort of
economy we ought to practice may be effected, and ought to be effected,
by a careful study and assessment of the tasks to be performed; and the
money spent ought to be made to yield the best possible returns in
efficiency and achievement. And, like good stewards, we should so
account for every dollar of our appropriations as to make it perfectly
evident what it was spent for and in what way it was spent.

It is not expenditure but extravagance that we should fear being
criticized for; not paying for the legitimate enterprise and
undertakings of a great Government whose people command what it should
do, but adding what will benefit only a few or pouring money out for
what need not have been undertaken at all or might have been postponed
or better and more economically conceived and carried out. The Nation is
not niggardly; it is very generous. It will chide us only if we forget
for whom we pay money out and whose money it is we pay. These are large
and general standards, but they are not very difficult of application to
particular cases.

The other topic I shall take leave to mention goes deeper into the
principles of our national life and policy. It is the subject of
national defense.

It can not be discussed without first answering some very searching
questions. It is said in some quarters that we are not prepared for war.
What is meant by being prepared? Is it meant that we are not ready upon
brief notice to put a nation in the field, a nation of men trained to
arms? Of course we are not ready to do that; and we shall never be in
time of peace so long as we retain our present political principles and
institutions. And what is it that it is suggested we should be prepared
to do? To defend ourselves against attack? We have always found means to
do that, and shall find them whenever it is necessary without calling
our people away from their necessary tasks to render compulsory military
service in times of peace.

Allow me to speak with great plainness and directness upon this great
matter and to avow my convictions with deep earnestness. I have tried to
know what America is, what her people think, what they are, what they
most cherish and hold dear. I hope that some of their finer passions are
in my own heart,--some of the great conceptions and desires which gave
birth to this Government and which have made the voice of this people a
voice of peace and hope and liberty among the peoples of the world, and
that, speaking my own thoughts, I shall, at least in part, speak theirs
also, however faintly and inadequately, upon this vital matter.

We are at peace with all the world. No one who speaks counsel based on
fact or drawn from a just and candid interpretation of realities can say
that there is reason to fear that from any quarter our independence or
the integrity of our territory is threatened. Dread of the power of any
other nation we are incapable of. We are not jealous of rivalry in the
fields of commerce or of any other peaceful achievement. We mean to live
our own lives as we will; but we mean also to let live. We are, indeed,
a true friend to all the nations of the world, because we threaten none,
covet the possessions of none, desire the overthrow of none. Our
friendship can be accepted and is accepted without reservation, because
it is offered in a spirit and for a purpose which no one need ever
question or suspect. Therein lies our greatness. We are the champions of
peace and of concord. And we should be very jealous of this distinction
which we have sought to earn. Just now we should be particularly jealous
of it because it is our dearest present hope that this character and
reputation may presently, in God's providence, bring us an opportunity
such as has seldom been vouchsafed any nation, the opportunity to
counsel and obtain peace in the world and reconciliation and a healing
settlement of many a matter that has cooled and interrupted the
friendship of nations. This is the time above all others when we should
wish and resolve to keep our strength by self-possession, our influence
by preserving our ancient principles of action.

From the first we have had a clear and settled policy with regard to
military establishments. We never have had, and while we retain our
present principles and ideals we never shall have, a large standing
army. If asked, Are you ready to defend yourselves? we reply, Most
assuredly, to the utmost; and yet we shall not turn America into a
military camp. We will not ask our young men to spend the best years of
their lives making soldiers of themselves. There is another sort of
energy in us. It will know how to declare itself and make itself
effective should occasion arise. And especially when half the world is
on fire we shall be careful to make our moral insurance against the
spread of the conflagration very definite and certain and adequate
indeed.

Let us remind ourselves, therefore, of the only thing we can do or will
do. We must depend in every time of national peril, in the future as in
the past, not upon a standing army, nor yet upon a reserve army, but
upon a citizenry trained and accustomed to arms. It will be right
enough, right American policy, based upon our accustomed principles and
practices, to provide a system by which every citizen who will volunteer
for the training may be made familiar with the use of modern arms, the
rudiments of drill and maneuver, and the maintenance and sanitation of
camps. We should encourage such training and make it a means of
discipline which our young men will learn to value. It is right that we
should provide it not only, but that we should make it as attractive as
possible, and so induce our young men to undergo it at such times as
they can command a little freedom and can seek the physical development
they need, for mere health's sake, if for nothing more. Every means by
which such things can be stimulated is legitimate, and such a method
smacks of true American ideas. It is right, too, that the National Guard
of the States should be developed and strengthened by every means which
is not inconsistent with our obligations to our own people or with the
established policy of our Government. And this, also, not because the
time or occasion specially calls for such measures, but because it
should be our constant policy to make these provisions for our national
peace and safety.

More than this carries with it a reversal of the whole history and
character of our polity. More than this, proposed at this time, permit
me to say, would mean merely that we had lost our self-possession, that
we had been thrown off our balance by a war with which we have nothing
to do, whose causes can not touch us, whose very existence affords us
opportunities of friendship and disinterested service which should make
us ashamed of any thought of hostility or fearful preparation for
trouble. This is assuredly the opportunity for which a people and a
government like ours were raised up, the opportunity not only to speak
but actually to embody and exemplify the counsels of peace and amity and
the lasting concord which is based on justice and fair and generous
dealing.

A powerful navy we have always regarded as our proper and natural means
of defense, and it has always been of defense that we have thought,
never of aggression or of conquest. But who shall tell us now what sort
of navy to build? We shall take leave to be strong upon the seas, in the
future as in the past; and there will be no thought of offense or of
provocation in that. Our ships are our natural bulwarks. When will the
experts tell us just what kind we should construct-and when will they be
right for ten years together, if the relative efficiency of craft of
different kinds and uses continues to change as we have seen it change
under our very eyes in these last few months?

But I turn away from the subject. It is not new. There is no new need to
discuss it. We shall not alter our attitude toward it because some
amongst us are nervous and excited. We shall easily and sensibly agree
upon a policy of defense. The question has not changed its aspects
because the times are not normal. Our policy will not be for an
occasion. It will be conceived as a permanent and settled thing, which
we will pursue at all seasons, without haste and after a fashion
perfectly consistent with the peace of the world, the abiding friendship
of states, and the unhampered freedom of all with whom we deal. Let
there be no misconception. The country has been misinformed. We have not
been negligent of national defense. We are not unmindful of the great
responsibility resting upon us. We shall learn and profit by the lesson
of every experience and every new circumstance; and what is needed will
be adequately done.

I close, as I began, by reminding you of the great tasks and duties of
peace which challenge our best powers and invite us to build what will
last, the tasks to which we can address ourselves now and at all times
with free-hearted zest and with all the finest gifts of constructive
wisdom we possess. To develop our life and our resources; to supply our
own people, and the people of the world as their need arises, from the
abundant plenty of our fields and our marts of trade to enrich the
commerce of our own States and of the world with the products of our
mines, our farms, and our factories, with the creations of our thought
and the fruits of our character,-this is what will hold our attention
and our enthusiasm steadily, now and in the years to come, as we strive
to show in our life as a nation what liberty and the inspirations of an
emancipated spirit may do for men and for societies, for individuals,
for states, and for mankind.

***

State of the Union Address
Woodrow Wilson
December 7, 1915

GENTLEMEN OF THE CONGRESS:

Since I last had the privilege of addressing you on the state of the
Union the war of nations on the other side of the sea, which had then
only begun to disclose its portentous proportions, has extended its
threatening and sinister scope until it has swept within its flame some
portion of every quarter of the globe, not excepting our own hemisphere,
has altered the whole face of international affairs, and now presents a
prospect of reorganization and reconstruction such as statesmen and
peoples have never been called upon to attempt before.

We have stood apart, studiously neutral. It was our manifest duty to do
so. Not only did we have no part or interest in the policies which seem
to have brought the conflict on; it was necessary, if a universal
catastrophe was to be avoided, that a limit should be set to the sweep
of destructive war and that some part of the great family of nations
should keep the processes of peace alive, if only to prevent collective
economic ruin and the breakdown throughout the world of the industries
by which its populations are fed and sustained. It was manifestly the
duty of the self-governed nations of this hemisphere to redress, if
possible, the balance of economic loss and confusion in the other, if
they could do nothing more. In the day of readjustment and recuperation
we earnestly hope and believe that they can be of infinite service.

In this neutrality, to which they were bidden not only by their separate
life and their habitual detachment from the politics of Europe but also
by a clear perception of international duty, the states of America have
become conscious of a new and more vital community of interest and moral
partnership in affairs, more clearly conscious of the many common
sympathies and interests and duties which bid them stand together.

There was a time in the early days of our own great nation and of the
republics fighting their way to independence in Central and South
America when the government of the United States looked upon itself as
in some sort the guardian of the republics to the South of her as
against any encroachments or efforts at political control from the other
side of the water; felt it its duty to play the part even without
invitation from them; and I think that we can claim that the task was
undertaken with a true and disinterested enthusiasm for the freedom of
the Americas and the unmolested Self-government of her independent
peoples. But it was always difficult to maintain such a role without
offense to the pride of the peoples whose freedom of action we sought to
protect, and without provoking serious misconceptions of our motives,
and every thoughtful man of affairs must welcome the altered
circumstances of the new day in whose light we now stand, when there is
no claim of guardianship or thought of wards but, instead, a full and
honorable association as of partners between ourselves and our
neighbors, in the interest of all America, north and south. Our concern
for the independence and prosperity of the states of Central and South
America is not altered. We retain unabated the spirit that has inspired
us throughout the whole life of our government and which was so frankly
put into words by President Monroe. We still mean always to make a
common cause of national independence and of political liberty in
America. But that purpose is now better understood so far as it concerns
ourselves. It is known not to be a selfish purpose. It is known to have
in it no thought of taking advantage of any government in this
hemisphere or playing its political fortunes for our own benefit. All
the governments of America stand, so far as we are concerned, upon a
footing of genuine equality and unquestioned independence.

We have been put to the test in the case of Mexico, and we have stood
the test. Whether we have benefited Mexico by the course we have pursued
remains to be seen. Her fortunes are in her own hands. But we have at
least proved that we will not take advantage of her in her distress and
undertake to impose upon her an order and government of our own
choosing. Liberty is often a fierce and intractable thing, to which no
bounds can be set, and to which no bounds of a few men's choosing ought
ever to be set. Every American who has drunk at the true fountains of
principle and tradition must subscribe without reservation to the high
doctrine of the Virginia Bill of Rights, which in the great days in
which our government was set up was everywhere amongst us accepted as
the creed of free men. That doctrine is, "That government is, or ought
to be, instituted for the common benefit, protection, and security of
the people, nation, or community"; that "of all the various modes and
forms of government, that is the best which is capable of producing the
greatest degree of happiness and safety, and is most effectually secured
against the danger of maladministration; and that, when any government
shall be found inadequate or contrary to these purposes, a majority of
the community hath an indubitable, inalienable, and indefeasible right
to reform, alter, or abolish it, in such manner as shall be judged most
conducive to the public weal." We have unhesitatingly applied that
heroic principle to the case of Mexico, and now hopefully await the
rebirth of the troubled Republic, which had so much of which to purge
itself and so little sympathy from any outside quarter in the radical
but necessary process. We will aid and befriend Mexico, but we will not
coerce her; and our course with regard to her ought to be sufficient
proof to all America that we seek no political suzerainty or selfish
control.

The moral is, that the states of America are not hostile rivals but
cooperating friends, and that their growing sense of community or
interest, alike in matters political and in matters economic, is likely
to give them a new significance as factors in international affairs and
in the political history of the world. It presents them as in a very
deep and true sense a unit in world affairs, spiritual partners,
standing together because thinking together, quick with common
sympathies and common ideals. Separated they are subject to all the
cross currents of the confused politics of a world of hostile rivalries;
united in spirit and purpose they cannot be disappointed of their
peaceful destiny.

This is Pan-Americanism. It has none of the spirit of empire in it. It
is the embodiment, the effectual embodiment, of the spirit of law and
independence and liberty and mutual service.

A very notable body of men recently met in the City of Washington, at
the invitation and as the guests of this Government, whose deliberations
are likely to be looked back to as marking a memorable turning point in
the history of America. They were representative spokesmen of the
several independent states of this hemisphere and were assembled to
discuss the financial and commercial relations of the republics of the
two continents which nature and political fortune have so intimately
linked together. I earnestly recommend to your perusal the reports of
their proceedings and of the actions of their committees. You will get
from them, I think, a fresh conception of the ease and intelligence and
advantage with which Americans of both continents may draw together in
practical cooperation and of what the material foundations of this
hopeful partnership of interest must consist,-of how we should build
them and of how necessary it is that we should hasten their building.

There is, I venture to point out, an especial significance just now
attaching to this whole matter of drawing the Americans together in
bonds of honorable partnership and mutual advantage because of the
economic readjustments which the world must inevitably witness within
the next generation, when peace shall have at last resumed its healthful
tasks. In the performance of these tasks I believe the Americas to be
destined to play their parts together. I am interested to fix your
attention on this prospect now because unless you take it within your
view and permit the full significance of it to command your thought I
cannot find the right light in which to set forth the particular matter
that lies at the very font of my whole thought as I address you to-day.
I mean national defense.

No one who really comprehends the spirit of the great people for whom we
are appointed to speak can fail to perceive that their passion is for
peace, their genius best displayed in the practice of the arts of peace.
Great democracies are not belligerent. They do not seek or desire war.
Their thought is of individual liberty and of the free labor that
supports life and the uncensored thought that quickens it. Conquest and
dominion are not in our reckoning, or agreeable to our principles. But
just because we demand unmolested development and the undisturbed
government of our own lives upon our own principles of right and
liberty, we resent, from whatever quarter it may come, the aggression we
ourselves will not practice. We insist upon security in prosecuting our
self-chosen lines of national development. We do more than that. We
demand it also for others. We do not confine our enthusiasm for
individual liberty and free national development to the incidents and
movements of affairs which affect only ourselves. We feel it wherever
there is a people that tries to walk in these difficult paths of
independence and right. From the first we have made common cause with
all partisans of liberty on this side the sea, and have deemed it as
important that our neighbors should be free from all outside domination
as that we ourselves should be. We have set America aside as a whole for
the uses of independent nations and political freemen.

Out of such thoughts grow all our policies. We regard war merely as a
means of asserting the rights of a people against aggression. And we are
as fiercely jealous of coercive or dictatorial power within our own
nation as of aggression from without. We will not maintain a standing
army except for uses which are as necessary in times of peace as in
times of war; and we shall always see to it that our military peace
establishment is no larger than is actually and continuously needed for
the uses of days in which no enemies move against us. But we do believe
in a body of free citizens ready and sufficient to take care of
themselves and of the governments which they have set up to serve them.
In our constitutions themselves we have commanded that "the right of the
people to keep and bear arms shall not be infringed," and our confidence
has been that our safety in times of danger would lie in the rising of
the nation to take care of itself, as the farmers rose at Lexington.

But war has never been a mere matter of men and guns. It is a thing of
disciplined might. If our citizens are ever to fight effectively upon a
sudden summons, they must know how modern fighting is done, and what to
do when the summons comes to render themselves immediately available and
immediately effective. And the government must be their servant in this
matter, must supply them with the training they need to take care of
themselves and of it. The military arm of their government, which they
will not allow to direct them, they may properly use to serve them and
make their independence secure,-and not their own independence merely
but the rights also of those with whom they have made common cause,
should they also be put in jeopardy. They must be fitted to play the
great role in the world, and particularly in this hemisphere, for which
they are qualified by principle and by chastened ambition to play.

It is with these ideals in mind that the plans of the Department of War
for more adequate national defense were conceived which will be laid
before you, and which I urge you to sanction and put into effect as soon
as they can be properly scrutinized and discussed. They seem to me the
essential first steps, and they seem to me for the present sufficient.

They contemplate an increase of the standing force of the regular army
from its present strength of five thousand and twenty-three officers and
one hundred and two thousand nine hundred and eighty-five enlisted men
of all services to a strength of seven thousand one hundred and
thirty-six officers and one hundred and thirty-four thousand seven
hundred and seven enlisted men, or 141,843, all told, all services, rank
and file, by the addition of fifty-two companies of coast artillery,
fifteen companies of engineers, ten regiments of infantry, four
regiments of field artillery, and four aero squadrons, besides seven
hundred and fifty officers required for a great variety of extra
service, especially the all important duty of training the citizen force
of which I shall presently speak, seven hundred and ninety-two
noncommissioned officers for service in drill, recruiting and the like,
and the necessary quota of enlisted men for the Quartermaster Corps, the
Hospital Corps, the Ordnance Department, and other similar auxiliary
services. These are the additions necessary to render the army adequate
for its present duties, duties which it has to perform not only upon our
own continental coasts and borders and at our interior army posts, but
also in the Philippines, in the Hawaiian Islands, at the Isthmus, and in
Porto Rico.

By way of making the country ready to assert some part of its real power
promptly and upon a larger scale, should occasion arise, the plan also
contemplates supplementing the army by a force of four hundred thousand
disciplined citizens, raised in increments of one hundred and
thirty-three thousand a year throughout a period of three years. This it
is proposed to do by a process of enlistment under which the serviceable
men of the country would be asked to bind themselves to serve with the
colors for purposes of training for short periods throughout three
years, and to come to the colors at call at any time throughout an
additional "furlough" period of three years. This force of four hundred
thousand men would be provided with personal accoutrements as fast as
enlisted and their equipment for the field made ready to be supplied at
any time. They would be assembled for training at stated intervals at
convenient places in association with suitable units of the regular
army. Their period of annual training would not necessarily exceed two
months in the year.

It would depend upon the patriotic feeling of the younger men of the
country whether they responded to such a call to service or not. It
would depend upon the patriotic spirit of the employers of the country
whether they made it possible for the younger men in their employ to
respond under favorable conditions or not. I, for one, do not doubt the
patriotic devotion either of our young men or of those who give them
employment,--those for whose benefit and protection they would in fact
enlist. I would look forward to the success of such an experiment with
entire confidence.

At least so much by way of preparation for defense seems to me to be
absolutely imperative now. We cannot do less.

The programme which will be laid before you by the Secretary of the Navy
is similarly conceived. It involves only a shortening of the time within
which plans long matured shall be carried out; but it does make definite
and explicit a programme which has heretofore been only implicit, held
in the minds of the Committees on Naval Affairs and disclosed in the
debates of the two Houses but nowhere formulated or formally adopted. It
seems to me very clear that it will be to the advantage of the country
for the Congress to adopt a comprehensive plan for putting the navy upon
a final footing of strength and efficiency and to press that plan to
completion within the next five years. We have always looked to the navy
of the country as our first and chief line of defense; we have always
seen it to be our manifest course of prudence to be strong on the seas.
Year by year we have been creating a navy which now ranks very high
indeed among the navies of the maritime nations. We should now
definitely determine how we shall complete what we have begun, and how
soon.

The programme to be laid before you contemplates the construction within
five years of ten battleships, six battle cruisers, ten scout cruisers,
fifty destroyers, fifteen fleet submarines, eighty-five coast
submarines, four gunboats, one hospital ship, two ammunition ships, two
fuel oil ships, and one repair ship. It is proposed that of this number
we shall the first year provide for the construction of two battleships,
two battle cruisers, three scout cruisers, fifteen destroyers, five
fleet submarines, twenty-five coast submarines, two gunboats, and one
hospital ship; the second year, two battleships, one scout cruiser, ten
destroyers, four fleet submarines, fifteen coast submarines, one
gunboat, and one fuel oil ship; the third year, two battleships, one
battle cruiser, two scout cruisers, five destroyers, two fleet sub
marines, and fifteen coast submarines; the fourth year, two battleships,
two battle cruisers, two scout cruisers, ten destroyers, two fleet
submarines, fifteen coast submarines, one ammunition ship, and one fuel
oil ship; and the fifth year, two battleships, one battle cruiser, two
scout cruisers, ten destroyers, two fleet submarines, fifteen coast
submarines, one gunboat, one ammunition ship, and one repair ship.

The Secretary of the Navy is asking also for the immediate addition to
the personnel of the navy of seven thousand five hundred sailors,
twenty-five hundred apprentice seamen, and fifteen hundred marines. This
increase would be sufficient to care for the ships which are to be
completed within the fiscal year 1917 and also for the number of men
which must be put in training to man the ships which will be completed
early in 1918. It is also necessary that the number of midshipmen at the
Naval academy at Annapolis should be increased by at least three hundred
in order that the force of officers should be more rapidly added to; and
authority is asked to appoint, for engineering duties only, approved
graduates of engineering colleges, and for service in the aviation corps
a certain number of men taken from civil life.

If this full programme should be carried out we should have built or
building in 1921, according to the estimates of survival and standards
of classification followed by the General Board of the Department, an
effective navy consisting of twenty-seven battleships of the first line,
six battle cruisers, twenty-five battleships of the second line, ten
armored cruisers, thirteen scout cruisers, five first class cruisers,
three second class cruisers, ten third class cruisers, one hundred and
eight destroyers, eighteen fleet submarines, one hundred and fifty-seven
coast submarines, six monitors, twenty gunboats, four supply ships,
fifteen fuel ships, four transports, three tenders to torpedo vessels,
eight vessels of special types, and two ammunition ships. This would be
a navy fitted to our needs and worthy of our traditions.

But armies and instruments of war are only part of what has to be
considered if we are to provide for the supreme matter of national
self-sufficiency and security in all its aspects. There are other great
matters which will be thrust upon our attention whether we will or not.
There is, for example, a very pressing question of trade and shipping
involved in this great problem of national adequacy. It is necessary for
many weighty reasons of national efficiency and development that we
should have a great merchant marine. The great merchant fleet we once
used to make us rich, that great body of sturdy sailors who used to
carry our flag into every sea, and who were the pride and often the
bulwark of the nation, we have almost driven out of existence by
inexcusable neglect and indifference and by a hopelessly blind and
provincial policy of so-called economic protection. It is high time we
repaired our mistake and resumed our commercial independence on the
seas.

For it is a question of independence. If other nations go to war or seek
to hamper each other's commerce, our merchants, it seems, are at their
mercy, to do with as they please. We must use their ships, and use them
as they determine. We have not ships enough of our own. We cannot handle
our own commerce on the seas. Our independence is provincial, and is
only on land and within our own borders. We are not likely to be
permitted to use even the ships of other nations in rivalry of their own
trade, and are without means to extend our commerce even where the doors
are wide open and our goods desired. Such a situation is not to be
endured. It is of capital importance not only that the United States
should be its own carrier on the seas and enjoy the economic
independence which only an adequate merchant marine would give it, but
also that the American hemisphere as a whole should enjoy a like
independence and self-sufficiency, if it is not to be drawn into the
tangle of European affairs. Without such independence the whole question
of our political unity and self-determination is very seriously clouded
and complicated indeed.

Moreover, we can develop no true or effective American policy without
ships of our own,--not ships of war, but ships of peace, carrying goods
and carrying much more: creating friendships and rendering indispensable
services to all interests on this side the water. They must move
constantly back and forth between the Americas. They are the only
shuttles that can weave the delicate fabric of sympathy, comprehension,
confidence, and mutual dependence in which we wish to clothe our policy
of America for Americans.

The task of building up an adequate merchant marine for America private
capital must ultimately undertake and achieve, as it has undertaken and
achieved every other like task amongst us in the past, with admirable
enterprise, intelligence, and vigor; and it seems to me a manifest
dictate of wisdom that we should promptly remove every legal obstacle
that may stand in the way of this much to be desired revival of our old
independence and should facilitate in every possible way the building,
purchase, and American registration of ships. But capital cannot
accomplish this great task of a sudden. It must embark upon it by
degrees, as the opportunities of trade develop. Something must be done
at once; done to open routes and develop opportunities where they are as
yet undeveloped; done to open the arteries of trade where the currents
have not yet learned to run,-especially between the two American
continents, where they are, singularly enough, yet to be created and
quickened; and it is evident that only the government can undertake such
beginnings and assume the initial financial risks. When the risk has
passed and private capital begins to find its way in sufficient
abundance into these new channels, the government may withdraw. But it
cannot omit to begin. It should take the first steps, and should take
them at once. Our goods must not lie piled up at our ports and stored
upon side tracks in freight cars which are daily needed on the roads;
must not be left without means of transport to any foreign quarter. We
must not await the permission of foreign ship-owners and foreign
governments to send them where we will.

With a view to meeting these pressing necessities of our commerce and
availing ourselves at the earliest possible moment of the present
unparalleled opportunity of linking the two Americas together in bonds
of mutual interest and service, an opportunity which may never return
again if we miss it now, proposals will be made to the present Congress
for the purchase or construction of ships to be owned and directed by
the government similar to those made to the last Congress, but modified
in some essential particulars. I recommend these proposals to you for
your prompt acceptance with the more confidence because every month that
has elapsed since the former proposals were made has made the necessity
for such action more and more manifestly imperative. That need was then
foreseen; it is now acutely felt and everywhere realized by those for
whom trade is waiting but who can find no conveyance for their goods. I
am not so much interested in the particulars of the programme as I am in
taking immediate advantage of the great opportunity which awaits us if
we will but act in this emergency. In this matter, as in all others, a
spirit of common counsel should prevail, and out of it should come an
early solution of this pressing problem.

There is another matter which seems to me to be very intimately
associated with the question of national safety and preparation for
defense. That is our policy towards the Philippines and the people of
Porto Rico. Our treatment of them and their attitude towards us are
manifestly of the first consequence in the development of our duties in
the world and in getting a free hand to perform those duties. We must be
free from every unnecessary burden or embarrassment; and there is no
better way to be clear of embarrassment than to fulfil our promises and
promote the interests of those dependent on us to the utmost. Bills for
the alteration and reform of the government of the Philippines and for
rendering fuller political justice to the people of Porto Rico were
submitted to the sixty-third Congress. They will be submitted also to
you. I need not particularize their details. You are most of you already
familiar with them. But I do recommend them to your early adoption with
the sincere conviction that there are few measures you could adopt which
would more serviceably clear the way for the great policies by which we
wish to make good, now and always, our right to lead in enterprises of
peace and good will and economic and political freedom.

The plans for the armed forces of the nation which I have outlined, and
for the general policy of adequate preparation for mobilization and
defense, involve of course very large additional expenditures of
money,-expenditures which will considerably exceed the estimated
revenues of the government. It is made my duty by law, whenever the
estimates of expenditure exceed the estimates of revenue, to call the
attention of the Congress to the fact and suggest any means of meeting
the deficiency that it may be wise or possible for me to suggest. I am
ready to believe that it would be my duty to do so in any case; and I
feel particularly bound to speak of the matter when it appears that the
deficiency will arise directly out of the adoption by the Congress of
measures which I myself urge it to adopt. Allow me, therefore, to speak
briefly of the present state of the Treasury and of the fiscal problems
which the next year will probably disclose.

On the thirtieth of June last there was an available balance in the
general fund of the Treasury Of $104,170,105.78. The total estimated
receipts for the year 1916, on the assumption that the emergency revenue
measure passed by the last Congress will not be extended beyond its
present limit, the thirty-first of December, 1915, and that the present
duty of one cent per pound on sugar will be discontinued after the first
of May, 1916, will be $670,365,500. The balance of June last and these
estimated revenues come, therefore, to a grand total of $774,535,605-78.
The total estimated disbursements for the present fiscal year, including
twenty-five millions for the Panama Canal, twelve millions for probable
deficiency appropriations, and fifty thousand dollars for miscellaneous
debt redemptions, will be $753,891,000; and the balance in the general
fund of the Treasury will be reduced to $20,644,605.78. The emergency
revenue act, if continued beyond its present time limitation, would
produce, during the half year then remaining, about forty-one millions.
The duty of one cent per pound on sugar, if continued, would produce
during the two months of the fiscal year remaining after the first of
May, about fifteen millions. These two sums, amounting together to
fifty-six millions, if added to the revenues of the second half of the
fiscal year, would yield the Treasury at the end of the year an
available balance Of $76,644,605-78.

The additional revenues required to carry out the programme of military
and naval preparation of which I have spoken, would, as at present
estimated, be for the fiscal year, 1917, $93,800,000. Those figures,
taken with the figures for the present fiscal year which I have already
given, disclose our financial problem for the year 1917. Assuming that
the taxes imposed by the emergency revenue act and the present duty on
sugar are to be discontinued, and that the balance at the close of the
present fiscal year will be only $20,644,605.78, that the disbursements
for the Panama Canal will again be about twenty-five millions, and that
the additional expenditures for the army and navy are authorized by the
Congress, the deficit in the general fund of the Treasury on the
thirtieth of June, 1917, will be nearly two hundred and thirty-five
millions. To this sum at least fifty millions should be added to
represent a safe working balance for the Treasury, and twelve millions
to include the usual deficiency estimates in 1917; and these additions
would make a total deficit of some two hundred and ninety-seven
millions. If the present taxes should be continued throughout this year
and the next, however, there would be a balance in the Treasury of some
seventy-six and a half millions at the end of the present fiscal year,
and a deficit at the end of the next year of only some fifty millions,
or, reckoning in sixty-two millions for deficiency appropriations and a
safe Treasury balance at the end of the year, a total deficit of some
one hundred and twelve millions. The obvious moral of the figures is
that it is a plain counsel of prudence to continue all of the present
taxes or their equivalents, and confine ourselves to the problem of
providing one hundred and twelve millions of new revenue rather than two
hundred and ninety-seven millions.

How shall we obtain the new revenue? We are frequently reminded that
there are many millions of bonds which the Treasury is authorized under
existing law to sell to reimburse the sums paid out of current revenues
for the construction of the Panama Canal; and it is true that bonds to
the amount of approximately $222,000,000 are now available for that
purpose. Prior to 1913, $134,631,980 of these bonds had actually been
sold to recoup the expenditures at the Isthmus; and now constitute a
considerable item of the public debt. But I, for one, do not believe
that the people of this country approve of postponing the payment of
their bills. Borrowing money is short-sighted finance. It can be
justified only when permanent things are to be accomplished which many
generations will certainly benefit by and which it seems hardly fair
that a single generation should pay for. The objects we are now
proposing to spend money for cannot be so classified, except in the
sense that everything wisely done may be said to be done in the interest
of posterity as well as in our own. It seems to me a clear dictate of
prudent statesmanship and frank finance that in what we are now, I hope,
about to undertake we should pay as we go. The people of the country are
entitled to know just what burdens of taxation they are to carry, and to
know from the outset, now. The new bills should be paid by internal
taxation.

To what sources, then, shall we turn? This is so peculiarly a question
which the gentlemen of the House of Representatives are expected under
the Constitution to propose an answer to that you will hardly expect me
to do more than discuss it in very general terms. We should be following
an almost universal example of modern governments if we were to draw the
greater part or even the whole of the revenues we need from the income
taxes. By somewhat lowering the present limits of exemption and the
figure at which the surtax shall begin to be imposed, and by increasing,
step by step throughout the present graduation, the surtax itself, the
income taxes as at present apportioned would yield sums sufficient to
balance the books of the Treasury at the end of the fiscal year 1917
without anywhere making the burden unreasonably or oppressively heavy.
The precise reckonings are fully and accurately set out in the report of
the Secretary of the Treasury which will be immediately laid before you.

And there are many additional sources of revenue which can justly be
resorted to without hampering the industries of the country or putting
any too great charge upon individual expenditure. A tax of one cent per
gallon on gasoline and naphtha would yield, at the present estimated
production, $10,000,000; a tax of fifty cents per horse power on
automobiles and internal explosion engines, $15,000,000; a stamp tax on
bank cheques, probably $18,000,000; a tax of twenty-five cents per ton
on pig iron, $10,000,000; a tax of twenty-five cents per ton on
fabricated iron and steel, probably $10,000,000. In a country of great
industries like this it ought to be easy to distribute the burdens of
taxation without making them anywhere bear too heavily or too
exclusively upon any one set of persons or undertakings. What is clear
is, that the industry of this generation should pay the bills of this
generation.

I have spoken to you to-day, Gentlemen, upon a single theme, the
thorough preparation of the nation to care for its own security and to
make sure of entire freedom to play the impartial role in this
hemisphere and in the world which we all believe to have been
providentially assigned to it. I have had in my mind no thought of any
immediate or particular danger arising out of our relations with other
nations. We are at peace with all the nations of the world, and there is
reason to hope that no question in controversy between this and other
Governments will lead to any serious breach of amicable relations, grave
as some differences of attitude and policy have been land may yet turn
out to be. I am sorry to say that the gravest threats against our
national peace and safety have been uttered within our own borders.
There are citizens of the United States, I blush to admit, born under
other flags but welcomed under our generous naturalization laws to the
full freedom and opportunity of America, who have poured the poison of
disloyalty into the very arteries of our national life; who have sought
to bring the authority and good name of our Government into contempt, to
destroy our industries wherever they thought it effective for their
vindictive purposes to strike at them, and to debase our politics to the
uses of foreign intrigue. Their number is not great as compared with the
whole number of those sturdy hosts by which our nation has been enriched
in recent generations out of virile foreign stock; but it is great
enough to have brought deep disgrace upon us and to have made it
necessary that we should promptly make use of processes of law by which
we may be purged of their corrupt distempers. America never witnessed
anything like this before. It never dreamed it possible that men sworn
into its own citizenship, men drawn out of great free stocks such as
supplied some of the best and strongest elements of that little, but how
heroic, nation that in a high day of old staked its very life to free
itself from every entanglement that had darkened the fortunes of the
older nations and set up a new standard here, that men of such origins
and such free choices of allegiance would ever turn in malign reaction
against the Government and people who had welcomed and nurtured them and
seek to make this proud country once more a hotbed of European passion.
A little while ago such a thing would have seemed incredible. Because it
was incredible we made no preparation for it. We would have been almost
ashamed to prepare for it, as if we were suspicious of ourselves, our
own comrades and neighbors! But the ugly and incredible thing has
actually come about and we are without adequate federal laws to deal
with it. I urge you to enact such laws at the earliest possible moment
and feel that in doing so I am urging you to do nothing less than save
the honor and self-respect of the nation. Such creatures of passion,
disloyalty, and anarchy must be crushed out. They are not many, but they
are infinitely malignant, and the hand of our power should close over
them at once. They have formed plots to destroy property, they have
entered into conspiracies against the neutrality of the Government, they
have sought to pry into every confidential transaction of the Government
in order to serve interests alien to our own. It is possible to deal
with these things very effectually. I need not suggest the terms in
which they may be dealt with.

I wish that it could be said that only a few men, misled by mistaken
sentiments of allegiance to the governments under which they were born,
had been guilty of disturbing the self-possession and misrepresenting
the temper and principles of the country during these days of terrible
war, when it would seem that every man who was truly an American would
instinctively make it his duty and his pride to keep the scales of
judgment even and prove himself a partisan of no nation but his own. But
it cannot. There are some men among us, and many resident abroad who,
though born and bred in the United States and calling themselves
Americans, have so forgotten themselves and their honor as citizens as
to put their passionate sympathy with one or the other side in the great
European conflict above their regard for the peace and dignity of the
United States. They also preach and practice disloyalty. No laws, I
suppose, can reach corruptions of the mind and heart; but I should not
speak of others without also speaking of these and expressing the even
deeper humiliation and scorn which every self-possessed and thoughtfully
patriotic American must feel when he thinks of them and of the discredit
they are daily bringing upon us.

While we speak of the preparation of the nation to make sure of her
security and her effective power we must not fall into the patent error
of supposing that her real strength comes from armaments and mere
safeguards of written law. It comes, of course, from her people, their
energy, their success in their undertakings, their free opportunity to
use the natural resources of our great home land and of the lands
outside our continental borders which look to us for protection, for
encouragement, and for assistance in their development; from the
organization and freedom and vitality of our economic life. The domestic
questions which engaged the attention of the last Congress are more
vital to the nation in this its time of test than at any other time. We
cannot adequately make ready for any trial of our strength unless we
wisely and promptly direct the force of our laws into these
all-important fields of domestic action. A matter which it seems to me
we should have very much at heart is the creation of the right
instrumentalities by which to mobilize our economic resources in any
time of national necessity. I take it for granted that I do not need
your authority to call into systematic consultation with the directing
officers of the army and navy men of recognized leadership and ability
from among our citizens who are thoroughly familiar, for example, with
the transportation facilities of the country and therefore competent to
advise how they may be coordinated when the need arises, those who can
suggest the best way in which to bring about prompt cooperation among
the manufacturers of the country, should it be necessary, and those who
could assist to bring the technical skill of the country to the aid of
the Government in the solution of particular problems of defense. I only
hope that if I should find it feasible to constitute such an advisory
body the Congress would be willing to vote the small sum of money that
would be needed to defray the expenses that would probably be necessary
to give it the clerical and administrative Machinery with which to do
serviceable work.

What is more important is, that the industries and resources of the
country should be available and ready for mobilization. It is the more
imperatively necessary, therefore, that we should promptly devise means
for doing what we have not yet done: that we should give intelligent
federal aid and stimulation to industrial and vocational education, as
we have long done in the large field of our agricultural industry; that,
at the same time that we safeguard and conserve the natural resources of
the country we should put them at the disposal of those who will use
them promptly and intelligently, as was sought to be done in the
admirable bills submitted to the last Congress from its committees on
the public lands, bills which I earnestly recommend in principle to your
consideration; that we should put into early operation some provision
for rural credits which will add to the extensive borrowing facilities
already afforded the farmer by the Reserve Bank Act, adequate
instrumentalities by which long credits may be obtained on land
mortgages; and that we should study more carefully than they have
hitherto been studied the right adaptation of our economic arrangements
to changing conditions.

Many conditions about which we I-lave repeatedly legislated are being
altered from decade to decade, it is evident, under our very eyes, and
are likely to change even more rapidly and more radically in the days
immediately ahead of us, when peace has returned to the world and the
nations of Europe once more take up their tasks of commerce and industry
with the energy of those who must bestir themselves to build anew. Just
what these changes will be no one can certainly foresee or confidently
predict. There are no calculable, because no stable, elements in the
problem. The most we can do is to make certain that we have the
necessary instrumentalities of information constantly at our service so
that we may be sure that we know exactly what we are dealing with when
we come to act, if it should be necessary to act at all. We must first
certainly know what it is that we are seeking to adapt ourselves to. I
may ask the privilege of addressing you more at length on this important
matter a little later in your session.

In the meantime may I make this suggestion? The transportation problem
is an exceedingly serious and pressing one in this country. There has
from time to time of late been reason to fear that our railroads would
not much longer be able to cope with it successfully, as at present
equipped and coordinated I suggest that it would be wise to provide for
a commission of inquiry to ascertain by a thorough canvass of the whole
question whether our laws as at present framed and administered are as
serviceable as they might be in the solution of the problem. It is
obviously a problem that lies at the very foundation of our efficiency
as a people. Such an inquiry ought to draw out every circumstance and
opinion worth considering and we need to know all sides of the matter if
we mean to do anything in the field of federal legislation.

No one, I am sure, would wish to take any backward step. The regulation
of the railways of the country by federal commission has had admirable
results and has fully justified the hopes and expectations of those by
whom the policy of regulation was originally proposed. The question is
not what should we undo? It is, whether there is anything else we can do
that would supply us with effective means, in the very process of
regulation, for bettering the conditions under which the railroads are
operated and for making them more useful servants of the country as a
whole. It seems to me that it might be the part of wisdom, therefore,
before further legislation in this field is attempted, to look at the
whole problem of coordination and efficiency in the full light of a
fresh assessment of circumstance and opinion, as a guide to dealing with
the several parts of it.

For what we are seeking now, what in my mind is the single thought of
this message, is national efficiency and security. We serve a great
nation. We should serve it in the spirit of its peculiar genius. It is
the genius of common men for self-government, industry, justice, liberty
and peace. We should see to it that it lacks no instrument, no facility
or vigor of law, to make it sufficient to play its part with energy,
safety, and assured success. In this we are no partisans but heralds and
prophets of a new age.

***

State of the Union Address
Woodrow Wilson
December 5, 1916

GENTLEMEN OF THE CONGRESS:

In fulfilling at this time the duty laid upon me by the Constitution of
communicating to you from time to time information of the state of the
Union and recommending to your consideration such legislative measures
as may be judged necessary and expedient, I shall continue the practice,
which I hope has been acceptable to you, of leaving to the reports of
the several heads of the executive departments the elaboration of the
detailed needs of the public service and confine myself to those matters
of more general public policy with which it seems necessary and feasible
to deal at the present session of the Congress.

I realize the limitations of time under which you will necessarily act
at this session and shall make my suggestions as few as possible; but
there were some things left undone at the last session which there will
now be time to complete and which it seems necessary in the interest of
the public to do at once.

In the first place, it seems to me imperatively necessary that the
earliest possible consideration and action should be accorded the
remaining measures of the program of settlement and regulation which I
had occasion to recommend to you at the close of your last session in
view of the public dangers disclosed by the unaccommodated difficulties
which then existed, and which still unhappily continue to exist, between
the railroads of the country and their locomotive engineers, conductors
and trainmen.

I then recommended:

First, immediate provision for the enlargement and administrative
reorganization of the Interstate Commerce Commission along the lines
embodied in the bill recently passed by the House of Representatives and
now awaiting action by the Senate; in order that the Commission may be
enabled to deal with the many great and various duties now devolving
upon it with a promptness and thoroughness which are, with its present
constitution and means of action, practically impossible.

Second, the establishment of an eight-hour day as the legal basis alike
of work and wages in the employment of all railway employes who are
actually engaged in the work of operating trains in interstate
transportation.

Third, the authorization of the appointment by the President of a small
body of men to observe actual results in experience of the adoption of
the eight-hour day in railway transportation alike for the men and for
the railroads.

Fourth, explicit approval by the Congress of the consideration by the
Interstate Commerce Commission of an increase of freight rates to meet
such additional expenditures by the railroads as may have been rendered
necessary by the adoption of the eight-hour day and which have not been
offset by administrative readjustments and economies, should the facts
disclosed justify the increase.

Fifth, an amendment of the existing Federal statute which provides for
the mediation, conciliation and arbitration of such controversies as the
present by adding to it a provision that, in case the methods of
accommodation now provided for should fail, a full public investigation
of the merits of every such dispute shall be instituted and completed
before a strike or lockout may lawfully be attempted.

And, sixth, the lodgment in the hands of the Executive of the power, in
case of military necessity, to take control of such portions and such
rolling stock of the railways of the country as may be required for
military use and to operate them for military purposes, with authority
to draft into the military service of the United States such train crews
and administrative officials as the circumstances require for their safe
and efficient use.

The second and third of these recommendations the Congress immediately
acted on: it established the eight-hour day as the legal basis of work
and wages in train service and it authorized the appointment of a
commission to observe and report upon the practical results, deeming
these the measures most immediately needed; but it postponed action upon
the other suggestions until an opportunity should be offered for a more
deliberate consideration of them.

The fourth recommendation I do not deem it necessary to renew. The power
of the Interstate Commerce Commission to grant an increase of rates on
the ground referred to is indisputably clear and a recommendation by the
Congress with regard to such a matter might seem to draw in question the
scope of the commission's authority or its inclination to do justice
when there is no reason to doubt either.

The other suggestions-the increase in the Interstate Commerce
Commission's membership and in its facilities for performing its
manifold duties; the provision for full public investigation and
assessment of industrial disputes, and the grant to the Executive of the
power to control and operate the railways when necessary in time of war
or other like public necessity-I now very earnestly renew.

The necessity for such legislation is manifest and pressing. Those who
have entrusted us with the responsibility and duty of serving and
safeguarding them in such matters would find it hard, I believe, to
excuse a failure to act upon these grave matters or any unnecessary
postponement of action upon them.

Not only does the Interstate Commerce Commission now find it practically
impossible, with its present membership and organization, to perform its
great functions promptly and thoroughly, but it is not unlikely that it
may presently be found advisable to add to its duties still others
equally heavy and exacting. It must first be perfected as an
administrative instrument.

The country cannot and should not consent to remain any longer exposed
to profound industrial disturbances for lack of additional means of
arbitration and conciliation which the Congress can easily and promptly
supply.

And all will agree that there must be no doubt as to the power of the
Executive to make immediate and uninterrupted use of the railroads for
the concentration of the military forces of the nation wherever they are
needed and whenever they are needed.

This is a program of regulation, prevention and administrative
efficiency which argues its own case in the mere statement of it. With
regard to one of its items, the increase in the efficiency of the
Interstate Commerce Commission, the House of Representatives has already
acted; its action needs only the concurrence of the Senate.

I would hesitate to recommend, and I dare say the Congress would
hesitate to act upon the suggestion should I make it, that any man in
any I occupation should be obliged by law to continue in an employment
which he desired to leave.

To pass a law which forbade or prevented the individual workman to leave
his work before receiving the approval of society in doing so would be
to adopt a new principle into our jurisprudence, which I take it for
granted we are not prepared to introduce.

But the proposal that the operation of the railways of the country shall
not be stopped or interrupted by the concerted action of organized
bodies of men until a public investigation shall have been instituted,
which shall make the whole question at issue plain for the judgment of
the opinion of the nation, is not to propose any such principle.

It is based upon the very different principle that the concerted action
of powerful bodies of men shall not be permitted to stop the industrial
processes of the nation, at any rate before the nation shall have had an
opportunity to acquaint itself with the merits of the case as between
employe and employer, time to form its opinion upon an impartial
statement of the merits, and opportunity to consider all practicable
means of conciliation or arbitration.

I can see nothing in that proposition but the justifiable safeguarding
by society of the necessary processes of its very life. There is nothing
arbitrary or unjust in it unless it be arbitrarily and unjustly done. It
can and should be done with a full and scrupulous regard for the
interests and liberties of all concerned as well as for the permanent
interests of society itself.

Three matters of capital importance await the action of the Senate which
have already been acted upon by the House of Representatives; the bill
which seeks to extend greater freedom of combination to those engaged in
promoting the foreign commerce of the country than is now thought by
some to be legal under the terms of the laws against monopoly; the bill
amending the present organic law of Porto Rico; and the bill proposing a
more thorough and systematic regulation of the expenditure of money in
elections, commonly called the Corrupt Practices Act.

I need not labor my advice that these measures be enacted into law.
Their urgency lies in the manifest circumstances which render their
adoption at this time not only opportune but necessary. Even delay would
seriously jeopard the interests of the country and of the Government.

Immediate passage of the bill to regulate the expenditure of money in
elections may seem to be less necessary than the immediate enactment of
the other measures to which I refer, because at least two years will
elapse before another election in which Federal offices are to be
filled; but it would greatly relieve the public mind if this important
matter were dealt with while the circumstances and the dangers to the
public morals of the present method of obtaining and spending campaign
funds stand clear under recent observation, and the methods of
expenditure can be frankly studied in the light of present experience;
and a delay would have the further very serious disadvantage of
postponing action until another election was at hand and some special
object connected with it might be thought to be in the mind of those who
urged it. Action can be taken now with facts for guidance and without
suspicion of partisan purpose.

I shall not argue at length the desirability of giving a freer hand in
the matter of combined and concerted effort to those who shall undertake
the essential enterprise of building up our export trade. That
enterprise will presently, will immediately assume, has indeed already
assumed a magnitude unprecedented in our experience. We have not the
necessary instrumentalities for its prosecution; it is deemed to be
doubtful whether they could be created upon an adequate scale under our
present laws.

We should clear away all legal obstacles and create a basis of undoubted
law for it which will give freedom without permitting unregulated
license. The thing must be done now, because the opportunity is here and
may escape us if we hesitate or delay.

The argument for the proposed amendments of the organic law of Porto
Rico is brief and conclusive. The present laws governing the island and
regulating the rights and privileges of its people are not just. We have
created expectations of extended privilege which we have not satisfied.
There is uneasiness among the people of the island and even a suspicious
doubt with regard to our intentions concerning them which the adoption
of the pending measure would happily remove. We do not doubt what we
wish to do in any essential particular. We ought to do it at once.

At the last session of the Congress a bill was passed by the Senate
which provides for the promotion of vocational and industrial education,
which is of vital importance to the whole country because it concerns a
matter, too long neglected, upon which the thorough industrial
preparation of the country for the critical years of economic
development immediately ahead of us in very large measure depends.

May I not urge its early and favorable consideration by the House of
Representatives and its early enactment into law? It contains plans
which affect all interests and all parts of the country, and I am sure
that there is no legislation now pending before the Congress whose
passage the country awaits with more thoughtful approval or greater
impatience to see a great and admirable thing set in the way of being
done.

There are other matters already advanced to the stage of conference
between the two houses of which it is not necessary that I should speak.
Some practicable basis of agreement concerning them will no doubt be
found an action taken upon them.

Inasmuch as this is, gentlemen, probably the last occasion I shall have
to address the Sixty-fourth Congress, I hope that you will permit me to
say with what genuine pleasure and satisfaction I have co-operated with
you in the many measures of constructive policy with which you have
enriched the legislative annals of the country. It has been a privilege
to labor in such company. I take the liberty of congratulating you upon
the completion of a record of rare serviceableness and distinction.

***

State of the Union Address
Woodrow Wilson
December 4, 1917

GENTLEMEN OF THE CONGRESS:

Eight months have elapsed since I last had the honor of addressing you.
They have been months crowded with events of immense and grave
significance for us. I shall not undertake to detail or even to
summarize those events. The practical particulars of the part we have
played in them will be laid before you in the reports of the executive
departments. I shall discuss only our present outlook upon these vast
affairs, our present duties, and the immediate means of accomplishing
the objects we shall hold always in view.

I shall not go back to debate the causes of the war. The intolerable
wrongs done and planned against us by the sinister masters of Germany
have long since become too grossly obvious and odious to every true
American to need to be rehearsed. But I shall ask you to consider again
and with a very grave scrutiny our objectives and the measures by which
we mean to attain them; for the purpose of discussion here in this place
is action, and our action must move straight toward definite ends. Our
object is, of course, to win the war; and we shall not slacken or suffer
ourselves to be diverted until it is won. But it is worth while asking
and answering the question, When shall we consider the war won?

From one point of view it is not necessary to broach this fundamental
matter. I do not doubt that the American people know what the war is
about and what sort of an outcome they will regard as a realization of
their purpose in it.

As a nation we are united in spirit and intention. I pay little heed to
those who tell me otherwise. I hear the voices of dissent-who does not?
I bear the criticism and the clamor of the noisily thoughtless and
troublesome. I also see men here and there fling themselves in impotent
disloyalty against the calm, indomitable power of the Nation. I hear men
debate peace who understand neither its nature nor the way in which we
may attain it with uplifted eyes and unbroken spirits. But I know that
none of these speaks for the Nation. They do not touch the heart of
anything. They may safely be left to strut their uneasy hour and be
forgotten.

But from another point of view I believe that it is necessary to say
plainly what we here at the seat of action consider the war to be for
and what part we mean to play in the settlement of its searching issues.
We are the spokesmen of the American people, and they have a right to
know whether their purpose is ours. They desire peace by the overcoming
of evil, by the defeat once for all of the sinister forces that
interrupt peace and render it impossible, and they wish to know how
closely our thought runs with theirs and what action we propose. They
are impatient with those who desire peace by any sort of compromise
deeply and indignantly impatient--but they will be equally impatient
with us if we do not make it plain to them what our objectives are and
what we are planning for in seeking to make conquest of peace by arms.

I believe that I speak for them when I say two things: First, that this
intolerable thing of which the masters of Germany have shown us the ugly
face, this menace of combined intrigue and force which we now see so
clearly as the German power, a thing without conscience or honor of
capacity for covenanted peace, must be crushed and, if it be not utterly
brought to an end, at least shut out from the friendly intercourse of
the nations; and second, that when this thing and its power are indeed
defeated and the time comes that we can discuss peace when the German
people have spokesmen whose word we can believe and when those spokesmen
are ready in the name of their people to accept the common judgment of
the nations as to what shall henceforth be the bases of law and of
covenant for the life of the world-we shall be willing and glad to pay
the full price for peace, and pay it ungrudgingly.

We know what that price will be. It will be full, impartial
justice-justice done at every point and to every nation that the final
settlement must affect, our enemies as well as our friends.

You catch, with me, the voices of humanity that are in the air. They
grow daily more audible, more articulate, more persuasive, and they come
from the hearts of men everywhere. They insist that the war shall not
end in vindictive action of any kind; that no nation or people shall be
robbed or punished because the irresponsible rulers of a single country
have themselves done deep and abominable wrong. It is this thought that
has been expressed in the formula, "No annexations, no contributions, no
punitive indemnities."

Just because this crude formula expresses the instinctive judgment as to
right of plain men everywhere, it has been made diligent use of by the
masters of German intrigue to lead the people of Russia astray and the
people of every other country their agents could reach-in order that a
premature peace might be brought about before autocracy has been taught
its final and convincing lesson and the people of the world put in
control of their own destinies.

But the fact that a wrong use has been made of a just idea is no reason
why a right use should not be made of it. It ought to be brought under
the patronage of its real friends. Let it be said again that autocracy
must first be shown the utter futility of its claim to power or
leadership in the modern world. It is impossible to apply any standard
of justice so long as such forces are unchecked and undefeated as the
present masters of Germany command. Not until that has been done can
right be set up as arbiter and peacemaker among the nations. But when
that has been done-as, God willing, it assuredly will be-we shall at
last be free to do an unprecedented thing, and this is the time to avow
our purpose to do it. We shall be free to base peace on generosity and
justice, to the exclusions of all selfish claims to advantage even on
the part of the victors.

Let there be no misunderstanding. Our present and immediate task is to
win the war and nothing shall turn us aside from it until it is
accomplished. Every power and resource we possess, whether of men, of
money, or of materials, is being devoted and will continue to be devoted
to that purpose until it is achieved. Those who desire to bring peace
about before that purpose is achieved I counsel to carry their advice
elsewhere. We will not entertain it. We shall regard the war as won only
when the German people say to us, through properly accredited
representatives, that they are ready to agree to a settlement based upon
justice and reparation of the wrongs their rulers have done. They have
done a wrong to Belgium which must be repaired. They have established a
power over other lands and peoples than their own--over the great empire
of Austria-Hungary, over hitherto free Balkan states, over Turkey and
within Asia-which must be relinquished.

Germany's success by skill, by industry, by knowledge, by enterprise we
did not grudge or oppose, but admired, rather. She had built up for
herself a real empire of trade and influence, secured by the peace of
the world. We were content to abide by the rivalries of manufacture,
science and commerce that were involved for us in her success, and stand
or fall as we had or did not have the brains and the initiative to
surpass her. But at the moment when she had conspicuously won her
triumphs of peace she threw them away, to establish in their stead what
the world will no longer permit to be established, military and
political domination by arms, by which to oust where she could not excel
the rivals she most feared and hated. The peace we make must remedy that
wrong. It must deliver the once fair lands and happy peoples of Belgium
and Northern France from the Prussian conquest and the Prussian menace,
but it must deliver also the peoples of Austria-Hungary, the peoples of
the Balkans and the peoples of Turkey, alike in Europe and Asia, from
the impudent and alien dominion of the Prussian military and commercial
autocracy.

We owe it, however, to ourselves, to say that we do not wish in any way
to impair or to rearrange the Austro-Hungarian Empire. It is no affair
of ours what they do with their own life, either industrially or
politically. We do not purpose or desire to dictate to them in any way.
We only desire to see that their affairs are left in their own hands, in
all matters, great or small. We shall hope to secure for the peoples of
the Balkan peninsula and for the people of the Turkish Empire the right
and opportunity to make their own lives safe, their own fortunes secure
against oppression or injustice and from the dictation of foreign courts
or parties.

And our attitude and purpose with regard to Germany herself are of a
like kind. We intend no wrong against the German Empire, no interference
with her internal affairs. We should deem either the one or the other
absolutely unjustifiable, absolutely contrary to the principles we have
professed to live by and to hold most sacred throughout our life as a
nation.

The people of Germany are being told by the men whom they now permit to
deceive them and to act as their masters that they are fighting for the
very life and existence of their empire, a war of desperate self-defense
against deliberate aggression. Nothing could be more grossly or wantonly
false, and we must seek by the utmost openness and candor as to our real
aims to convince them of its falseness. We are in fact fighting for
their emancipation from the fear, along with our own-from the fear as
well as from the fact of unjust attack by neighbors or rivals or
schemers after world empire. No one is threatening the existence or the
independence of the peaceful enterprise of the German Empire.

The worst that can happen to the detriment the German people is this,
that if they should still, after the war is over, continue to be obliged
to live under ambitious and intriguing masters interested to disturb the
peace of the world, men or classes of men whom the other peoples of the
world could not trust, it might be impossible to admit them to the
partnership of nations which must henceforth guarantee the world's
peace. That partnership must be a partnership of peoples, not a mere
partnership of governments. It might be impossible, also, in such
untoward circumstances, to admit Germany to the free economic
intercourse which must inevitably spring out of the other partnerships
of a real peace. But there would be no aggression in that; and such a
situation, inevitable, because of distrust, would in the very nature of
things sooner or later cure itself, by processes which would assuredly
set in.

The wrongs, the very deep wrongs, committed in this war will have to be
righted. That, of course. But they cannot and must not be righted by the
commission of similar wrongs against Germany and her allies. The world
will not permit the commission of similar wrongs as a means of
reparation and settlement. Statesmen must by this time have learned that
the opinion of the world is everywhere wide awake and fully comprehends
the issues involved. No representative of any self-governed nation will
dare disregard it by attempting any such covenants of selfishness and
compromise as were entered into at the Congress of Vienna. The thought
of the plain people here and everywhere throughout the world, the people
who enjoy no privilege and have very simple and unsophisticated
standards of right and wrong, is the air all governments must henceforth
breathe if they would live.

It is in the full disclosing light of that thought that all policies
must be received and executed in this midday hour of the world's life.
Ger. man rulers have been able to upset the peace of the world only
because the German people were not suffered under their tutelage to
share the comradeship of the other peoples of the world either in
thought or in purpose. They were allowed to have no opinion of their own
which might be set up as a rule of conduct for those who exercised
authority over them. But the Congress that concludes this war will feel
the full strength of the tides that run now in the hearts and
consciences of free men everywhere. Its conclusions will run with those
tides.

All those things have been true from the very beginning of this
stupendous war; and I cannot help thinking that if they had been made
plain at the very outset the sympathy and enthusiasm of the Russian
people might have been once for all enlisted on the side of the Allies,
suspicion and distrust swept away, and a real and lasting union of
purpose effected. Had they believed these things at the very moment of
their revolution, and had they been confirmed in that belief since, the
sad reverses which have recently marked the progress of their affairs
towards an ordered and stable government of free men might have been
avoided. The Russian people have been poisoned by the very same
falsehoods that have kept the German people in the dark, and the poison
has been administered by the very same hand. The only possible antidote
is the truth. It cannot be uttered too plainly or too often.

From every point of view, therefore, it has seemed to be my duty to
speak these declarations of purpose, to add these specific
interpretations to what I took the liberty of saying to the Senate in
January. Our entrance into the war has not altered out attitude towards
the settlement that must come when it is over.

When I said in January that the nations of the world were entitled not
only to free pathways upon the sea, but also to assured and unmolested
access to those-pathways, I was thinking, and I am thinking now, not of
the smaller and weaker nations alone which need our countenance and
support, but also of the great and powerful nations and of our present
enemies as well as our present associates in the war. I was thinking,
and am thinking now, of Austria herself, among the rest, as well as of
Serbia and of Poland.

Justice and equality of rights can be had only at a great price. We are
seeking permanent, not temporary, foundations for the peace of the
world, and must seek them candidly and fearlessly. As always, the right
will prove to be the expedient.

What shall we do, then, to push this great war of freedom and justice to
its righteous conclusion? We must clear away with a thorough hand all
impediments to success, and we must make every adjustment of law that
will facilitate the full and free use of our whole capacity and force as
a fighting unit.

One very embarrassing obstacle that stands hi our way is that we are at
war with Germany but not with her allies. I, therefore, very earnestly
recommend that the Congress immediately declare the United States in a
state of war with Austria-Hungary. Does it seem strange to you that this
should be the conclusion of the argument I have just addressed to you?
It is not. It is in fact the inevitable logic of what I have said.
Austria-Hungary is for the time being not her own mistress but simply
the vassal of the German Government.

We must face the facts as they are and act upon them without sentiment
in this stern business. The Government of Austria and Hungary is not
acting upon its own initiative or in response to the wishes and feelings
of its own peoples, but as the instrument of another nation. We must
meet its force with our own and regard the Central Powers as but one.
The war can be successfully conducted in no other way.

The same logic would lead also to a declaration of war against Turkey
and Bulgaria. They also are the tools of Germany, but they are mere
tools and do not yet stand in the direct path of our necessary action.
We shall go wherever the necessities of this war carry us, but it seems
to me that we should go only where immediate and practical
considerations lead us, and not heed any others.

The financial and military measures which must be adopted will suggest
themselves as the war and its undertakings develop, but I will take the
liberty of proposing to you certain other acts of legislation which seem
to me to be needed for the support of the war and for the release of our
whole force and energy.

It will be necessary to extend in certain particulars the legislation of
the last session with regard to alien enemies, and also necessary, I
believe, to create a very definite and particular control over the
entrance and departure of all persons into and from the United States.

Legislation should be enacted defining as a criminal offense every
wilful violation of the presidential proclamation relating to alien
enemies promulgated under section 4o67 of the revised statutes and
providing appropriate punishments; and women, as well as men, should be
included under the terms of the acts placing restraints upon alien
enemies.

It is likely that as time goes on many alien enemies will be willing to
be fed and housed at the expense of the Government in the detention
camps, and it would be the purpose of the legislation I have suggested
to confine offenders among them in the penitentiaries and other similar
institutions where they could be made to work as other criminals do.

Recent experience has convinced me that the Congress must go further in
authorizing the Government to set limits to prices. The law of supply
and demand, I am sorry to say, has been replaced by the law of
unrestrained selfishness. While we have eliminated profiteering in
several branches of industry, it still runs impudently rampant in
others. The farmers for example, complain with a great deal of justice
that, while the regulation of food prices restricts their incomes, no
restraints are placed upon the prices of most of the things they must
themselves purchase; and similar inequities obtain on all sides.

It is imperatively necessary that the consideration of the full use of
the water power of the country, and also of the consideration of the
systematic and yet economical development of such of the natural
resources of the country as are still under the control of the Federal
Government should be immediately resumed and affirmatively and
constructively dealt with at the earliest possible moment. The pressing
need of such legislation is daily becoming more obvious.

The legislation proposed at the last session with regard to regulated
combinations among our exporters in order to provide for our foreign
trade a more effective organization and method of co-operation ought by
all means to be completed at this session.

And I beg that the members of the House of Representatives will permit
me to express the opinion that it will be impossible to deal in any but
a very wasteful and extravagant fashion with the enormous appropriations
of the public moneys which must continue to be made if the war is to be
properly sustained, unless the House will consent to return to its
former practice of initiating and preparing all appropriation bills
through a single committee, in order that responsibility may be
centered, expenditures standardized and made uniform, and waste and
duplication as much as possible avoided.

Additional legislation may also become necessary before the present
Congress again adjourns in order to effect the most efficient
co-ordination and operation of the railways and other transportation
systems of the country; but to that I shall, if circumstances should
demand, call the attention of Congress upon another occasion.

If I have overlooked anything that ought to be done for the more
effective conduct of the war, your own counsels will supply the
omission. What I am perfectly clear about is that in the present session
of the Congress our whole attention and energy should be concentrated on
the vigorous, rapid and successful prosecution of the great task of
winning the war.

We can do this with all the greater zeal and enthusiasm because we know
that for us this is a war of high principle, debased by no selfish
ambition of conquest or spoliation; because we know, and all the world
knows, that we have been forced into it to save the very institutions we
five under from corruption and destruction. The purpose of the Central
Powers strikes straight at the very heart of everything we believe in;
their methods of warfare outrage every principle of humanity and of
knightly honor; their intrigue has corrupted the very thought and spirit
of many of our people; their sinister and secret diplomacy has sought to
take our very territory away from us and disrupt the union of the
states. Our safety would be at an end, our honor forever sullied and
brought into contempt, were we to permit their triumph. They are
striking at the very existence of democracy and liberty.

It is because it is for us a war of high, disinterested purpose, in
which all the free peoples of the world are banded together for the
vindication of right, a war for the preservation of our nation, of all
that it has held dear, of principle and of purpose, that we feel
ourselves doubly constrained to propose for its outcome only that which
is righteous and of irreproachable intention, for our foes as well as
for our friends. The cause being just and holy, the settlement must be
of like motive and equality. For this we can fight, but for nothing less
noble or less worthy of our traditions. For this cause we entered the
war and for this cause will we battle until the last gun is fired.

I have spoken plainly because this seems to me the time when it is most
necessary to speak plainly, in order that all the world may know that,
even in the heat and ardor of the struggle and when our whole thought is
of carrying the war through to its end, we have not forgotten any ideal
or principle for which the name of America has been held in honor among
the nations and for which it has been our glory to contend in the great
generations that went before us. A supreme moment of history has come.
The eyes of the people have been opened and they see. The hand of God is
laid upon the nations. He will show them favor, I devoutly believe, only
if they rise to the clear heights of His own justice and mercy.

***

State of the Union Address
Woodrow Wilson
December 2, 1918

GENTLEMEN OF THE CONGRESS:

The year that has elapsed since I last stood before you to fulfil my
constitutional duty to give to the Congress from time to time
information on the state of the Union has been so crowded with great
events, great processes, and great results that I cannot hope to give
you an adequate picture of its transactions or of the far-reaching
changes which have been wrought of our nation and of the world. You have
yourselves witnessed these things, as I have. It is too soon to assess
them; and we who stand in the midst of them and are part of them are
less qualified than men of another generation will be to say what they
mean, or even what they have been. But some great outstanding facts are
unmistakable and constitute, in a sense, part of the public business
with which it is our duty to deal. To state them is to set the stage for
the legislative and executive action which must grow out of them and
which we have yet to shape and determine.

A year ago we had sent 145,918 men overseas. Since then we have sent
1,950,513, an average of 162,542 each month, the number in fact rising,
in May last, to 245,951, in June to 278,760, in July to 307,182, and
continuing to reach similar figures in August and September, in August
289,570 and in September 257,438. No such movement of troops ever took
place before, across three thousand miles of sea, followed by adequate
equipment and supplies, and carried safely through extraordinary dangers
of attack,-dangers which were alike strange and infinitely difficult to
guard against. In all this movement only seven hundred and fifty-eight
men were lost by enemy attack, six hundred and thirty of whom were upon
a single English transport which was sunk near the Orkney Islands.

I need not tell you what lay back of this great movement of men and
material. It is not invidious to say that back of it lay a supporting
organization of the industries of the country and of all its productive
activities more complete, more thorough in method and effective in
result, more spirited and unanimous in purpose and effort than any other
great belligerent had been able to effect. We profited greatly by the
experience of the nations which had already been engaged for nearly
three years in the exigent and exacting business, their every resource
and every executive proficiency taxed to the utmost. We were their
pupils. But we learned quickly and acted with a promptness and a
readiness of cooperation that justify our great pride that we were able
to serve the world with unparalleled energy and quick accomplishment.

But it is not the physical scale and executive efficiency of
preparation, supply, equipment and despatch that I would dwell upon, but
the mettle and quality of the officers and men we sent over and of the
sailors who kept the seas, and the spirit of the nation that stood
behind them. No soldiers or sailors ever proved themselves more quickly
ready for the test of battle or acquitted themselves with more splendid
courage and achievement when put to the test. Those of us who played
some part in directing the great processes by which the war was pushed
irresistibly forward to the final triumph may now forget all that and
delight our thoughts with the story of what our men did. Their officers
understood the grim and exacting task they had undertaken and performed
it with an audacity, efficiency, and unhesitating courage that touch the
story of convoy and battle with imperishable distinction at every turn,
whether the enterprise were great or small, from their great chiefs,
Pershing and Sims, down to the youngest lieutenant; and their men were
worthy of them,-such men as hardly need to be commanded, and go to their
terrible adventure blithely and with the quick intelligence of those who
know just what it is they would accomplish. I am proud to be the
fellow-countryman of men of such stuff and valor. Those of us who stayed
at home did our duty; the war could not have been won or the gallant men
who fought it given their opportunity to win it otherwise; but for many
a long day we shall think ourselves "accurs'd we were not there, and
hold our manhoods cheap while any speaks that fought" with these at St.
Mihiel or Thierry. The memory of those days of triumphant battle will go
with these fortunate men to their graves; and each will have his
favorite memory. "Old men forget; yet all shall be forgot, but hell
remember with advantages what feats he did that day!"

What we all thank God for with deepest gratitude is that our men went in
force into the line of battle just at the critical moment when the whole
fate of the world seemed to hang in the balance and threw their fresh
strength into the ranks of freedom in time to turn the whole tide and
sweep of the fateful struggle,-turn it once for all, so that thenceforth
it was back, back, back for their enemies, always back, never again
forward! After that it was only a scant four months before the
commanders of the Central Empires knew themselves beaten; and now their
very empires are in liquidation!

And throughout it all how fine the spirit of the nation was: what unity
of purpose, what untiring zeal! What elevation of purpose ran through
all its splendid display of strength, its untiring accomplishment! I
have said that those of us who stayed at home to do the work of
organization and supply will always wish that we had been with the men
whom we sustained by our labor; but we can never be ashamed. It has been
an inspiring thing to be here in the midst of fine men who had turned
aside from every private interest of their own and devoted the whole of
their trained capacity to the tasks that supplied the sinews of the
whole great undertaking! The patriotism, the unselfishness, the
thoroughgoing devotion and distinguished capacity that marked their
toilsome labors, day after day, month after month, have made them fit
mates and comrades of the men in the trenches and on the sea. And not
the men here in Washington only. They have but directed the vast
achievement. Throughout innumerable factories, upon innumerable farms,
in the depths of coal mines and iron mines and copper mines, wherever
the stuffs of industry were to be obtained and prepared, in the
shipyards, on the railways, at the docks, on the sea, in every labor
that was needed to sustain the battle lines, men have vied with each
other to do their part and do it well. They can look any man-at-arms in
the face, and say, We also strove to win and gave the best that was in
us to make our fleets and armies sure of their triumph!

And what shall we say of the women,-of their instant intelligence,
quickening every task that they touched; their capacity for organization
and cooperation, which gave their action discipline and enhanced the
effectiveness of everything they attempted; their aptitude at tasks to
which they had never before set their hands; their utter self-sacrifice
alike in what they did and in what they gave? Their contribution to the
great result is beyond appraisal. They have added a new lustre to the
annals of American womanhood.

The least tribute we can pay them is to make them the equals of men in
political rights as they have proved themselves their equals in every
field of practical work they have entered, whether for themselves or for
their country. These great days of completed achievement would be sadly
marred were we to omit that act of justice. Besides the immense
practical services they have rendered the women of the country have been
the moving spirits in the systematic economies by which our people have
voluntarily assisted to supply the suffering peoples of the world and
the armies upon every front with food and everything else that we had
that might serve the common cause. The details of such a story can never
be fully written, but we carry them at our hearts and thank God that we
can say that we are the kinsmen of such.

And now we are sure of the great triumph for which every sacrifice was
made. It has come, come in its completeness, and with the pride and
inspiration of these days of achievement quick within us, we turn to the
tasks of peace again,-a peace secure against the violence of
irresponsible monarchs and ambitious military coteries and made ready
for a new order, for new foundations of justice and fair dealing.

We are about to give order and organization to this peace not only for
ourselves but for the other peoples of the world as well, so far as they
will suffer us to serve them. It is international justice that we seek,
not domestic safety merely. Our thoughts have dwelt of late upon Europe,
upon Asia, upon the near and the far East, very little upon the acts of
peace and accommodation that wait to be performed at our own doors.
While we are adjusting our relations with the rest of the world is it
not of capital importance that we should clear away all grounds of
misunderstanding with our immediate neighbors and give proof of the
friendship we really feel? I hope that the members of the Senate will
permit me to speak once more of the unratified treaty of friendship and
adjustment with the Republic of Colombia. I very earnestly urge upon
them an early and favorable action upon that vital matter. I believe
that they will feel, with me, that the stage of affairs is now set for
such action as will be not only just but generous and in the spirit of
the new age upon which we have so happily entered.

So far as our domestic affairs are concerned the problem of our return
to peace is a problem of economic and industrial readjustment. That
problem is less serious for us than it may turn out too he for the
nations which have suffered the disarrangements and the losses of war
longer than we. Our people, moreover, do not wait to be coached and led.
They know their own business, are quick and resourceful at every
readjustment, definite in purpose, and self-reliant in action. Any
leading strings we might seek to put them in would speedily become
hopelessly tangled because they would pay no attention to them and go
their own way. All that we can do as their legislative and executive
servants is to mediate the process of change here, there, and elsewhere
as we may. I have heard much counsel as to the plans that should be
formed and personally conducted to a happy consummation, but from no
quarter have I seen any general scheme of "reconstruction" emerge which
I thought it likely we could force our spirited business men and
self-reliant laborers to accept with due pliancy and obedience.

While the war lasted we set up many agencies by which to direct the
industries of the country in the services it was necessary for them to
render, by which to make sure of an abundant supply of the materials
needed, by which to check undertakings that could for the time be
dispensed with and stimulate those that were most serviceable in war, by
which to gain for the purchasing departments of the Government a certain
control over the prices of essential articles and materials, by which to
restrain trade with alien enemies, make the most of the available
shipping, and systematize financial transactions, both public and
private, so that there would be no unnecessary conflict or confusion,-by
which, in short, to put every material energy of the country in harness
to draw the common load and make of us one team in the accomplishment of
a great task. But the moment we knew the armistice to have been signed
we took the harness off. Raw materials upon which the Government had
kept its hand for fear there should not be enough for the industries
that supplied the armies have been released and put into the general
market again. Great industrial plants whose whole output and machinery
had been taken over for the uses of the Government have been set free to
return to the uses to which they were put before the war. It has not
been possible to remove so readily or so quickly the control of
foodstuffs and of shipping, because the world has still to be fed from
our granaries and the ships are still needed to send supplies to our men
overseas and to bring the men back as fast as the disturbed conditions
on the other side of the water permit; but even there restraints are
being relaxed as much as possible and more and more as the weeks go by.

Never before have there been agencies in existence in this country which
knew so much of the field of supply, of labor, and of industry as the
War Industries Board, the War Trade Board, the Labor Department, the
Food Administration, and the Fuel Administration have known since their
labors became thoroughly systematized; and they have not been isolated
agencies; they have been directed by men who represented the permanent
Departments of the Government and so have been the centres of unified
and cooperative action. It has been the policy of the Executive,
therefore, since the armistice was assured (which is in effect a
complete submission of the enemy) to put the knowledge of these bodies
at the disposal of the business men of the country and to offer their
intelligent mediation at every point and in every matter where it was
desired. It is surprising how fast the process of return to a peace
footing has moved in the three weeks since the fighting stopped. It
promises to outrun any inquiry that may be instituted and any aid that
may be offered. It will not be easy to direct it any better than it will
direct itself. The American business man is of quick initiative.

The ordinary and normal processes of private initiative will not,
however, provide immediate employment for all of the men of our
returning armies. Those who are of trained capacity, those who are
skilled workmen, those who have acquired familiarity with established
businesses, those who are ready and willing to go to the farms, all
those whose aptitudes are known or will be sought out by employers will
find no difficulty, it is safe to say, in finding place and employment.
But there will be others who will be at a loss where to gain a
livelihood unless pains are taken to guide them and put them in the way
of work. There will be a large floating residuum of labor which should
not be left wholly to shift for itself. It seems to me important,
therefore, that the development of public works of every sort should be
promptly resumed, in order that opportunities should be created for
unskilled labor in particular, and that plans should be made for such
developments of our unused lands and our natural resources as we have
hitherto lacked stimulation to undertake.

I particularly direct your attention to the very practical plans which
the Secretary of the Interior has developed in his annual report and
before your Committees for the reclamation of arid, swamp, and cutover
lands which might, if the States were willing and able to cooperate,
redeem some three hundred million acres of land for cultivation. There
are said to be fifteen or twenty million acres of land in the West, at
present arid, for whose reclamation water is available, if properly
conserved. There are about two hundred and thirty million acres from
which the forests have been cut but which have never yet been cleared
for the plow and which lie waste and desolate. These lie scattered all
over the Union. And there are nearly eighty million acres of land that
lie under swamps or subject to periodical overflow or too wet for
anything but grazing, which it is perfectly feasible to drain and
protect and redeem. The Congress can at once direct thousands of the
returning soldiers to the reclamation of the arid lands which it has
already undertaken, if it will but enlarge the plans and appropriations
which it has entrusted to the Department of the Interior. It is possible
in dealing with our unused land to effect a great rural and agricultural
development which will afford the best sort of opportunity to men who
want to help themselves and the Secretary of the Interior has thought
the possible methods out in a way which is worthy of your most friendly
attention.

I have spoken of the control which must yet for a while, perhaps for a
long long while, be exercised over shipping because of the priority of
service to which our forces overseas are entitled and which should also
be accorded the shipments which are to save recently liberated peoples
from starvation and many devastated regions from permanent ruin. May I
not say a special word about the needs of Belgium and northern France?
No sums of money paid by way of indemnity will serve of themselves to
save them from hopeless disadvantage for years to come. Something more
must be done than merely find the money. If they had money and raw
materials in abundance to-morrow they could not resume their place in
the industry of the world to-morrow,-the very important place they held
before the flame of war swept across them. Many of their factories are
razed to the ground. Much of their machinery is destroyed or has been
taken away. Their people are scattered and many of their best workmen
are dead. Their markets will be taken by others, if they are not in some
special way assisted to rebuild their factories and replace their lost
instruments of manufacture. They should not be left to the vicissitudes
of the sharp competition for materials and for industrial facilities
which is now to set in. I hope, therefore, that the Congress will not be
unwilling, if it should become necessary, to grant to some such agency
as the War Trade Board the right to establish priorities of export and
supply for the benefit of these people whom we have been so happy to
assist in saving from the German terror and whom we must not now
thoughtlessly leave to shift for themselves in a pitiless competitive
market.

For the steadying, and facilitation of our own domestic business
readjustments nothing is more important than the immediate determination
of the taxes that are to be levied for 1918, 1919, and 1920. As much of
the burden of taxation must be lifted from business as sound methods of
financing the Government will permit, and those who conduct the great
essential industries of the country must be told as exactly as possible
what obligations to the Government they will be expected to meet in the
years immediately ahead of them. It will be of serious consequence to
the country to delay removing all uncertainties in this matter a single
day longer than the right processes of debate justify. It is idle to
talk of successful and confident business reconstruction before those
uncertainties are resolved.

If the war had continued it would have been necessary to raise at least
eight billion dollars by taxation payable in the year 1919; but the war
has ended and I agree with the Secretary of the Treasury that it will be
safe to reduce the amount to six billions. An immediate rapid decline in
the expenses of the Government is not to be looked for. Contracts made
for war supplies will, indeed, be rapidly cancelled and liquidated, but
their immediate liquidation will make heavy drains on the Treasury for
the months just ahead of us. The maintenance of our forces on the other
side of the sea is still necessary. A considerable proportion of those
forces must remain in Europe during the period of occupation, and those
which are brought home will be transported and demobilized at heavy
expense for months to come. The interest on our war debt must of course
be paid and provision made for the retirement of the obligations of the
Government which represent it. But these demands will of course fall
much below what a continuation of military operations would have
entailed and six billions should suffice to supply a sound foundation
for the financial operations of the year.

I entirely concur with the Secretary of the Treasury in recommending
that the two billions needed in addition to the four billions provided
by existing law be obtained from the profits which have accrued and
shall accrue from war contracts and distinctively war business, but that
these taxes be confined to the war profits accruing in 1918, or in 1919
from business originating in war contracts. I urge your acceptance of
his recommendation that provision be made now, not subsequently, that
the taxes to be paid in 1920 should be reduced from six to four
billions. Any arrangements less definite than these would add elements
of doubt and confusion to the critical period of industrial readjustment
through which the country must now immediately pass, and which no true
friend of the nation's essential business interests can afford to be
responsible for creating or prolonging. Clearly determined conditions,
clearly and simply charted, are indispensable to the economic revival
and rapid industrial development which may confidently be expected if we
act now and sweep all interrogation points away.

I take it for granted that the Congress will carry out the naval
programme which was undertaken before we entered the war. The Secretary
of the Navy has submitted to your Committees for authorization that part
of the programme which covers the building plans of the next three
years. These plans have been prepared along the lines and in accordance
with the policy which the Congress established, not under the
exceptional conditions of the war, but with the intention of adhering to
a definite method of development for the navy. I earnestly recommend the
uninterrupted pursuit of that policy. It would clearly be unwise for us
to attempt to adjust our programmes to a future world policy as yet
undetermined.

The question which causes me the greatest concern is the question of the
policy to be adopted towards the railroads. I frankly turn to you for
counsel upon it. I have no confident judgment of my own. I do not see
how any thoughtful man can have who knows anything of the complexity of
the problem. It is a problem which must be studied, studied immediately,
and studied without bias or prejudice. Nothing can be gained by becoming
partisans of any particular plan of settlement.

It was necessary that the administration of the railways should be taken
over by the Government so long as the war lasted. It would have been
impossible otherwise to establish and carry through under a single
direction the necessary priorities of shipment. It would have been
impossible otherwise to combine maximum production at the factories and
mines and farms with the maximum possible car supply to take the
products to the ports and markets; impossible to route troop shipments
and freight shipments without regard to the advantage or-disadvantage of
the roads employed; impossible to subordinate, when necessary, all
questions of convenience to the public necessity; impossible to give the
necessary financial support to the roads from the public treasury. But
all these necessities have now been served, and the question is, What is
best for the railroads and for the public in the future?

Exceptional circumstances and exceptional methods of administration were
not needed to convince us that the railroads were not equal to the
immense tasks of transportation imposed upon them by the rapid and
continuous development of the industries of the country. We knew that
already. And we knew that they were unequal to it partly because their
full cooperation was rendered impossible by law and their competition
made obligatory, so that it has been impossible to assign to them
severally the traffic which could best be carried by their respective
lines in the interest of expedition and national economy.

We may hope, I believe, for the formal conclusion of the war by treaty
by the time Spring has come. The twenty-one months to which the present
control of the railways is limited after formal proclamation of peace
shall have been made will run at the farthest, I take it for granted,
only to the January of 1921. The full equipment of the railways which
the federal administration had planned could not be completed within any
such period. The present law does not permit the use of the revenues of
the several roads for the execution of such plans except by formal
contract with their directors, some of whom will consent while some will
not, and therefore does not afford sufficient authority to undertake
improvements upon the scale upon which it would be necessary to
undertake them. Every approach to this difficult subject-matter of
decision brings us face to face, therefore, with this unanswered
question: What is it right that we should do with the railroads, in the
interest of the public and in fairness to their owners?

Let me say at once that I have no answer ready. The only thing that is
perfectly clear to me is that it is not fair either to the public or to
the owners of the railroads to leave the question unanswered and that it
will presently become my duty to relinquish control of the roads, even
before the expiration of the statutory period, unless there should
appear some clear prospect in the meantime of a legislative solution.
Their release would at least produce one element of a solution, namely
certainty and a quick stimulation of private initiative.

I believe that it will be serviceable for me to set forth as explicitly
as possible the alternative courses that lie open to our choice. We can
simply release the roads and go back to the old conditions of private
management, unrestricted competition, and multiform regulation by both
state and federal authorities; or we can go to the opposite extreme and
establish complete government control, accompanied, if necessary, by
actual government ownership; or we can adopt an intermediate course of
modified private control, under a more unified and affirmative public
regulation and under such alterations of the law as will permit wasteful
competition to be avoided and a considerable degree of unification of
administration to be effected, as, for example, by regional corporations
under which the railways of definable areas would be in effect combined
in single systems.

The one conclusion that I am ready to state with confidence is that it
would be a disservice alike to the country and to the owners of the
railroads to return to the old conditions unmodified. Those are
conditions of restraint without development. There is nothing
affirmative or helpful about them. What the country chiefly needs is
that all its means of transportation should be developed, its railways,
its waterways, its highways, and its countryside roads. Some new element
of policy, therefore, is absolutely necessary--necessary for the service
of the public, necessary for the release of credit to those who are
administering the railways, necessary for the protection of their
security holders. The old policy may be changed much or little, but
surely it cannot wisely be left as it was. I hope that the Con will have
a complete and impartial study of the whole problem instituted at once
and prosecuted as rapidly as possible. I stand ready and anxious to
release the roads from the present control and I must do so at a very
early date if by waiting until the statutory limit of time is reached I
shall be merely prolonging the period of doubt and uncertainty which is
hurtful to every interest concerned.

I welcome this occasion to announce to the Congress my purpose to join
in Paris the representatives of the governments with which we have been
associated in the war against the Central Empires for the purpose of
discussing with them the main features of the treaty of peace. I realize
the great inconveniences that will attend my leaving the country,
particularly at this time, but the conclusion that it was my paramount
duty to go has been forced upon me by considerations which I hope will
seem as conclusive to you as they have seemed to me.

The Allied governments have accepted the bases of peace which I outlined
to the Congress on the eighth of January last, as the Central Empires
also have, and very reasonably desire my personal counsel in their
interpretation and application, and it is highly desirable that I should
give it in order that the sincere desire of our Government to contribute
without selfish purpose of any kind to settlements that will be of
common benefit to all the nations concerned may be made fully manifest.
The peace settlements which are now to be agreed upon are of
transcendent importance both to us and to the rest of the world, and I
know of no business or interest which should take precedence of them.
The gallant men of our armed forces on land and sea have consciously
fought for the ideals which they knew to be the ideals of their country;
I have sought to express those ideals; they have accepted my statements
of them as the substance of their own thought and purpose, as the
associated governments have accepted them; I owe it to them to see to
it, so far as in me lies, that no false or mistaken interpretation is
put upon them, and no possible effort omitted to realize them. It is now
my duty to play my full part in making good what they offered their
life's blood to obtain. I can think of no call to service which could
transcend this.

I shall be in close touch with you and with affairs on this side the
water, and you will know all that I do. At my request, the French and
English governments have absolutely removed the censorship of cable news
which until within a fortnight they had maintained and there is now no
censorship whatever exercised at this end except upon attempted trade
communications with enemy countries. It has been necessary to keep an
open wire constantly available between Paris and the Department of State
and another between France and the Department of War. In order that this
might be done with the least possible interference with the other uses
of the cables, I have temporarily taken over the control of both cables
in order that they may be used as a single system. I did so at the
advice of the most experienced cable officials, and I hope that the
results will justify my hope that the news of the next few months may
pass with the utmost freedom and with the least possible delay from each
side of the sea to the other.

May I not hope, Gentlemen of the Congress, that in the delicate tasks I
shall have to perform on the other side of the sea, in my efforts truly
and faithfully to interpret the principles and purposes of the country
we love, I may have the encouragement and the added strength of your
united support? I realize the magnitude and difficulty of the duty I am
undertaking; I am poignantly aware of its grave responsibilities. I am
the servant of the nation. I can have no private thought or purpose of
my own in performing such an errand. I go to give the best that is in me
to the common settlements which I must now assist in arriving at in
conference with the other working heads of the associated governments. I
shall count upon your friendly countenance and encouragement. I shall
not be inaccessible. The cables and the wireless will render me
available for any counsel or service you may desire of me, and I shall
be happy in the thought that I am constantly in touch with the weighty
matters of domestic policy with which we shall have to deal. I shall
make my absence as brief as possible and shall hope to return with the
happy assurance that it has been possible to translate into action the
great ideals for which America has striven.

***

State of the Union Address
Woodrow Wilson
December 2, 1919

TO THE SENATE AND HOUSE OF REPRESENTATIVES:

I sincerely regret that I cannot be present at the opening of this
session of the Congress. I am thus prevented from presenting in as
direct a way as I could wish the many questions that are pressing for
solution at this time. Happily, I have had the advantage of the advice
of the heads of the several executive departments who have kept in close
touch with affairs in their detail and whose thoughtful recommendations
I earnestly second.

In the matter of the railroads and the readjustment of their affairs
growing out of Federal control, I shall take the liberty at a later date
of addressing you.

I hope that Congress will bring to a conclusion at this session
legislation looking to the establishment of a budget system. That there
should be one single authority responsible for the making of all
appropriations and that appropriations should be made not independently
of each other, but with reference to one single comprehensive plan of
expenditure properly related to the nation's income, there can be no
doubt I believe the burden of preparing the budget must, in the nature
of the case, if the work is to be properly done and responsibility
concentrated instead of divided, rest upon the executive. The budget so
prepared should be submitted to and approved or amended by a single
committee of each House of Congress and no single appropriation should
be made by the Congress, except such as may have been included in the
budget prepared by the executive or added by the particular committee of
Congress charged with the budget legislation.

Another and not less important aspect of the problem is the
ascertainment of the economy and efficiency with which the moneys
appropriated are expended. Under existing law the only audit is for the
purpose of ascertaining whether expenditures have been lawfully made
within the appropriations. No one is authorized or equipped to ascertain
whether the money has been spent wisely, economically and effectively.
The auditors should be highly trained officials with permanent tenure in
the Treasury Department, free of obligations to or motives of
consideration for this or any subsequent administration, and authorized
and empowered to examine into and make report upon the methods employed
and the results obtained by the executive departments of the Government.
Their reports should be made to the Congress and to the Secretary of the
Treasury.

I trust that the Congress will give its immediate consideration to the
problem of future taxation. Simplification of the income and profits
taxes has become an immediate necessity. These taxes performed
indispensable service during the war. They must, however, be simplified,
not only to save the taxpayer inconvenience and expense, but in order
that his liability may be made certain and definite.

With reference to the details of the Revenue Law, the Secretary of the
Treasury and the Commissioner of Internal Revenue will lay before you
for your consideration certain amendments necessary or desirable in
connection with the administration of the law-recommendations which have
my approval and support. It is of the utmost importance that in dealing
with this matter the present law should not be disturbed so far as
regards taxes for the calendar year 1920 payable in the calendar year
1921. The Congress might well consider whether the higher rates of
income and profits taxes can in peace times be effectively productive of
revenue, and whether they may not, on the contrary, be destructive of
business activity and productive of waste and inefficiency. There is a
point at which in peace times high rates of income and profits taxes
discourage energy, remove the incentive to new enterprises, encourage
extravagant expenditures and produce industrial stagnation with
consequent unemployment and other attendant evils.

The problem is not an easy one. A fundamental change has taken place
with reference to the position of America in the world's affairs. The
prejudice and passions engendered by decades of controversy between two
schools of political and economic thought,-the one believers in
protection of American industries, the other believers in tariff for
revenue only,-must be subordinated to the single consideration of the
public interest in the light of utterly changed conditions. Before the
war America was heavily the debtor of the rest of the world and the
interest payments she had to make to foreign countries on American
securities held abroad, the expenditures of American travelers abroad
and the ocean freight charges she had to pay to others, about balanced
the value of her pre-war favorable balance of trade. During the war
America's exports have been greatly stimulated, and increased prices
have increased their value. On the other hand, she has purchased a large
proportion of the American securities previously held abroad, has loaned
some $9,000,000,000 to foreign governments, and has built her own ships.
Our favorable balance of trade has thus been greatly increased and
Europe has been deprived of the means of meeting it heretofore existing.
Europe can have only three ways of meeting the favorable balance of
trade in peace times: by imports into this country of gold or of goods,
or by establishing new credits. Europe is in no position at the present
time to ship gold to us nor could we contemplate large further imports
of gold into this country without concern. The time has nearly passed
for international governmental loans and it will take time to develop in
this country a market for foreign securities. Anything, therefore, which
would tend to prevent foreign countries from settling for our exports by
shipments of goods into this country could only have the effect of
preventing them from paying for our exports and therefore of preventing
the exports from being made. The productivity of the country, greatly
stimulated by the war, must find an outlet by exports to foreign
countries, and any measures taken to prevent imports will inevitably
curtail exports, force curtailment of production, load the banking
machinery of the country with credits to carry unsold products and
produce industrial stagnation and unemployment. If we want to sell, we
must be prepared to buy. Whatever, therefore, may have been our views
during the period of growth of American business concerning tariff
legislation, we must now adjust our own economic life to a changed
condition growing out of the fact that American business is full grown
and that America is the greatest capitalist in the world.

No policy of isolation will satisfy the growing needs and opportunities
of America. The provincial standards and policies of the past, which
have held American business as if in a strait-jacket, must yield and
give way to the needs and exigencies of the new day in which we live, a
day full of hope and promise for American business, if we will but take
advantage of the opportunities that are ours for the asking. The recent
war has ended our isolation and thrown upon us a great duty and
responsibility. The United States must share the expanding world market.
The United States desires for itself only equal opportunity with the
other nations of the world, and that through the process of friendly
cooperation and fair competition the legitimate interests of the nations
concerned may be successfully and equitably adjusted.

There are other matters of importance upon which I urged action at the
last session of Congress which are still pressing for solution. I am
sure it is not necessary for me again to remind you that there is one
immediate and very practicable question resulting from the war which we
should meet in the most liberal spirit. It is a matter of recognition
and relief to our soldiers. I can do no better than to quote from my
last message urging this very action:

"We must see to it that our returning soldiers are assisted in every
practicable way to find the places for which they are fitted in the
daily work of the country. This can be done by developing and
maintaining upon an adequate scale the admirable organization created by
the Department of Labor for placing men seeking work; and it can also be
done, in at least one very great field, by creating new opportunities
for individual enterprise. The Secretary of the Interior has pointed out
the way by which returning soldiers may be helped to find and take up
land in the hitherto undeveloped regions of the country which the
Federal Government has already prepared, or can readily prepare, for
cultivation and also on many of the cutover or neglected areas which lie
within the limits of the older states; and I once more take the liberty
of recommending very urgently that his plans shall receive the immediate
and substantial support of the Congress."

In the matter of tariff legislation, I beg to call your attention to the
statements contained in my last message urging legislation with
reference to the establishment of the chemical and dyestuffs industry in
America:

"Among the industries to which special consideration should be given is
that of the manufacture of dyestuffs and related chemicals. Our complete
dependence upon German supplies before the war made the interruption of
trade a cause of exceptional economic disturbance. The close relation
between the manufacture of dyestuffs, on the one hand, and of explosive
and poisonous gases, on the other, moreover, has given the industry an
exceptional significance and value. Although the United States will
gladly and unhesitatingly join in the programme of international
disarmament, it will, nevertheless, be a policy of obvious prudence to
make certain of the successful maintenance of many strong and
well-equipped chemical plants. The German chemical industry, with which
we will be brought into competition, was and may well be again, a
thoroughly knit monopoly capable of exercising a competition of a
peculiarly insidious and dangerous kind."

During the war the farmer performed a vital and willing service to the
nation. By materially increasing the production of his land, he supplied
America and the Allies with the increased amounts of food necessary to
keep their immense armies in the field. He indispensably helped to win
the war. But there is now scarcely less need of increasing the
production in food -and the necessaries of life. I ask the Congress to
consider means of encouraging effort along these lines. The importance
of doing everything possible to promote production along economical
lines, to improve marketing, and to make rural life more attractive and
healthful, is obvious. I would urge approval of the plans already
proposed to the Congress by the Secretary of Agriculture, to secure the
essential facts required for the proper study of this question, through
the proposed enlarged programmes for farm management studies and crop
estimates. I would urge, also, the continuance of Federal participation
in the building of good roads, under the terms of existing law and under
the direction of present agencies; the need of further action on the
part of the States and the Federal Government to preserve and develop
our forest resources, especially through the practice of better forestry
methods on private holdings and the extension of the publicly owned
forests; better support for country schools and the more definite
direction of their courses of study along lines related to rural
problems; and fuller provision for sanitation in rural districts and the
building up of needed hospital and medical facilities in these
localities. Perhaps the way might be cleared for many of these desirable
reforms by a fresh, comprehensive survey made of rural conditions by a
conference composed of representatives of the farmers and of the
agricultural agencies responsible for leadership.

I would call your attention to the widespread condition of political
restlessness in our body politic. The causes of this unrest, while
various and complicated, are superficial rather than deep-seated.
Broadly, they arise from or are connected with the failure on the part
of our Government to arrive speedily at a just and permanent peace
permitting return to normal conditions, from the transfusion of radical
theories from seething European centers pending such delay, from
heartless profiteering resulting in the increase of the cost of living,
and lastly from the machinations of passionate and malevolent agitators.
With the return to normal conditions, this unrest will rapidly
disappear. In the meantime, it does much evil. It seems to me that in
dealing with this situation Congress should not be impatient or drastic
but should seek rather to remove the causes. It should endeavor to bring
our country back speedily to a peace basis, with ameliorated living
conditions under the minimum of restrictions upon personal liberty that
is consistent with our reconstruction problems. And it should arm the
Federal Government with power to deal in its criminal courts with those
persons who by violent methods would abrogate our time-tested
institutions. With the free expression of opinion and with the advocacy
of orderly political change, however fundamental, there must be no
interference, but towards passion and malevolence tending to incite
crime and insurrection under guise of political evolution there should
be no leniency. Legislation to this end has been recommended by the
Attorney General and should be enacted. In this direct connection, I
would call your attention to my recommendations on August 8th, pointing
out legislative measures which would be effective in controlling and
bringing down the present cost of living, which contributes so largely
to this unrest. On only one of these recommendations has the Congress
acted. If the Government's campaign is to be effective, it is necessary
that the other steps suggested should be acted on at once.

I renew and strongly urge the necessity of the extension of the present
Food Control Act as to the period of time in which it shall remain in
operation. The Attorney General has submitted a bill providing for an
extension of this Act for a period of six months. As it now stands, it
is limited in operation to the period of the war and becomes inoperative
upon the formal proclamation of peace. It is imperative that it should
be extended at once. The Department of justice has built up extensive
machinery for the purpose of enforcing its provisions; all of which must
be abandoned upon the conclusion of peace unless the provisions of this
Act are extended.

During this period the Congress will have an opportunity to make similar
permanent provisions and regulations with regard to all goods destined
for interstate commerce and to exclude them from interstate shipment, if
the requirements of the law are not compiled with. Some such regulation
is imperatively necessary. The abuses that have grown up in the
manipulation of prices by the withholding of foodstuffs and other
necessaries of life cannot otherwise be effectively prevented. There can
be no doubt of either the necessity of the legitimacy of such measures.

As I pointed out in my last message, publicity can accomplish a great
deal in this campaign. The aims of the Government must be clearly
brought to the attention of the consuming public, civic organizations
and state officials, who are in a position to lend their assistance to
our efforts. You have made available funds with which to carry on this
campaign, but there is no provision in the law authorizing their
expenditure for the purpose of making the public fully informed about
the efforts of the Government. Specific recommendation has been made by
the Attorney General in this regard. I would strongly urge upon you its
immediate adoption, as it constitutes one of the preliminary steps to
this campaign.

I also renew my recommendation that the Congress pass a law regulating
cold storage as it is regulated, for example, by the laws of the State
of New Jersey, which limit the time during which goods may be kept in
storage, prescribe the method of disposing of them if kept beyond the
permitted period, and require that goods released from storage shall in
all cases bear the date of their receipt. It would materially add to the
serviceability of the law, for the purpose we now have in view, if it
were also prescribed that all goods released from storage for interstate
shipment should have plainly marked upon each package the selling or
market price at which they went into storage. By this means the
purchaser would always be able to learn what profits stood between him
and the producer or the wholesale dealer.

I would also renew my recommendation that all goods destined for
interstate commerce should in every case, where their form or package
makes it possible, be plainly marked with the price at which they left
the hands of the producer.

We should formulate a law requiring a Federal license of all
corporations engaged in interstate commerce and embodying in the license
or in the conditions under which it is to be issued, specific
regulations designed to secure competitive selling and prevent
unconscionable profits in the method of marketing. Such a law would
afford a welcome opportunity to effect other much needed reforms in the
business of interstate shipment and in the methods of corporations which
are engaged in it; but for the moment I confine my recommendations to
the object immediately in hand, which is to lower the cost of living.

No one who has observed the march of events in the last year can fail to
note the absolute need of a definite programme to bring about an
improvement in the conditions of labor. There can be no settled
conditions leading to increased production and a reduction in the cost
of living if labor and capital are to be antagonists instead of
partners. Sound thinking and an honest desire to serve the interests of
the whole nation, as distinguished from the interests of a class, must
be applied to the solution of this great and pressing problem. The
failure of other nations to consider this matter in a vigorous way has
produced bitterness and jealousies and antagonisms, the food of
radicalism. The only way to keep men from agitating against grievances
is to remove the grievances. An unwillingness even to discuss these
matters produces only dissatisfaction and gives comfort to the extreme
elements in our country which endeavor to stir up disturbances in order
to provoke governments to embark upon a course of retaliation and
repression. The seed of revolution is repression. The remedy for these
things must not be negative in character. It must be constructive. It
must comprehend the general interest. The real antidote for the unrest
which manifests itself is not suppression, but a deep consideration of
the wrongs that beset our national life and the application of a remedy.

Congress has already shown its willingness to deal with these industrial
wrongs by establishing the eight-hour day as the standard in every field
of labor. It has sought to find a way to prevent child labor. It has
served the whole country by leading the way in developing the means of
preserving and safeguarding lives and health in dangerous industries. It
must now help in the difficult task of finding a method that will bring
about a genuine democratization of industry, based upon the full
recognition of the right of those who work, in whatever rank, to
participate in some organic way in every decision which directly affects
their welfare. It is with this purpose in mind that I called a
conference to meet in Washington on December 1st, to consider these
problems in all their broad aspects, with the idea of bringing about a
better understanding between these two interests.

The great unrest throughout the world, out of which has emerged a demand
for an immediate consideration of the difficulties between capital and
labor, bids us put our own house in order. Frankly, there can be no
permanent and lasting settlements between capital and labor which do not
recognize the fundamental concepts for which labor has been struggling
through the years. The whole world gave its recognition and endorsement
to these fundamental purposes in the League of Notions. The statesmen
gathered at Versailles recognized the fact that world stability could
not be had by reverting to industrial standards and conditions against
which the average workman of the world had revolted. It is, therefore,
the task of the states men of this new day of change and readjustment to
recognize world conditions and to seek to bring about, through
legislation, conditions that will mean the ending of age-long
antagonisms between capital and labor and that will hopefully lead to
the building up of a comradeship which will result not only in greater
contentment among the mass of workmen but also bring about a greater
production and a greater prosperity to business itself.

To analyze the particulars in the demands of labor is to admit the
justice of their complaint in many matters that lie at their basis. The
workman demands an adequate wage, sufficient to permit him to live in
comfort, unhampered by the fear of poverty and want in his old age. He
demands the right to live and the right to work amidst sanitary
surroundings, both in home and in workshop, surroundings that develop
and do not retard his own health and wellbeing; and the right to provide
for his children's wants in the matter of health and education. In other
words, it is his desire to make the conditions of his life and the lives
of those dear to him tolerable and easy to bear.

The establishment of the principles regarding labor laid down ill the
covenant of the League of Nations offers us the way to industrial peace
and conciliation. No other road lies open to us. Not to pursue this one
is longer to invite enmities, bitterness, and antagonisms which in the
end only lead to industrial and social disaster. The unwilling workman
is not a profitable servant. An employee whose industrial life is hedged
about by hard and unjust conditions, which he did not create and over
which he has no control, lacks that fine spirit of enthusiasm and
volunteer effort which are the necessary ingredients of a great
producing entity. Let us be frank about this solemn matter. The
evidences of world-wide unrest which manifest themselves in violence
throughout the world bid us pause and consider the means to be found to
stop the spread of this contagious thing before it saps the very
vitality of the nation itself. Do we gain strength by withholding the
remedy? Or is it not the business of statesmen to treat these
manifestations of unrest which meet us on every hand as evidences of an
economic disorder and to apply constructive remedies wherever necessary,
being sure that in the application of the remedy we touch not the vital
tissues of our industrial and economic life? There can be no recession
of the tide of unrest until constructive instrumentalities are set up to
stem that tide.

Governments must recognize the right of men collectively to bargain for
humane objects that have at their base the mutual protection and welfare
of those engaged in all industries. Labor must not be longer treated as
a commodity. It must be regarded as the activity of human beings,
possessed of deep yearnings and desires. The business man gives his best
thought to the repair and replenishment of his machinery, so that its
usefulness will not be impaired and its power to produce may always be
at its height and kept in full vigor and motion. No less regard ought to
be paid to the human machine, which after all propels the machinery of
the world and is the great dynamic force that lies back of all industry
and progress. Return to the old standards of wage and industry in
employment are unthinkable. The terrible tragedy of war which has just
ended and which has brought the world to the verge of chaos and disaster
would be in vain if there should ensue a return to the conditions of the
past. Europe itself, whence has come the unrest which now holds the
world at bay, is an example of standpatism in these vital human matters
which America might well accept as an example, not to be followed but
studiously to be avoided. Europe made labor the differential, and the
price of it all is enmity and antagonism and prostrated industry, The
right of labor to live in peace and comfort must be recognized by
governments and America should be the first to lay the foundation stones
upon which industrial peace shall be built.

Labor not only is entitled to an adequate wage, but capital should
receive a reasonable return upon its investment and is entitled to
protection at the hands of the Government in every emergency. No
Government worthy of the name can "play" these elements against each
other, for there is a mutuality of interest between them which the
Government must seek to express and to safeguard at all cost.

The right of individuals to strike is inviolate and ought not to be
interfered with by any process of Government, but there is a predominant
right and that is the right of the Government to protect all of its
people and to assert its power and majesty against the challenge of any
class. The Government, when it asserts that right, seeks not to
antagonize a class but simply to defend the right of the whole people as
against the irreparable harm and injury that might be done by the
attempt by any class to usurp a power that only Government itself has a
right to exercise as a protection to all.

In the matter of international disputes which have led to war, statesmen
have sought to set up as a remedy arbitration for war. Does this not
point the way for the settlement of industrial disputes, by the
establishment of a tribunal, fair and just alike to all, which will
settle industrial disputes which in the past have led to war and
disaster? America, witnessing the evil consequences which have followed
out of such disputes between these contending forces, must not admit
itself impotent to deal with these matters by means of peaceful
processes. Surely, there must be some method of bringing together in a
council of peace and amity these two great interests, out of which will
come a happier day of peace and cooperation, a day that will make men
more hopeful and enthusiastic in their various tasks, that will make for
more comfort and happiness in living and a more tolerable condition
among all classes of men. Certainly human intelligence can devise some
acceptable tribunal for adjusting the differences between capital and
labor.

This is the hour of test and trial for America. By her prowess and
strength, and the indomitable courage of her soldiers, she demonstrated
her power to vindicate on foreign battlefields her conceptions of
liberty and justice. Let not her influence as a mediator between capital
and labor be weakened and her own failure to settle matters of purely
domestic concern be proclaimed to the world. There are those in this
country who threaten direct action to force their will, upon a majority.
Russia today, with its blood and terror, is a painful object lesson of
the power of minorities. It makes little difference what minority it is;
whether capital or labor, or any other class; no sort of privilege will
ever be permitted to dominate this country. We are a partnership or
nothing that is worth while. We are a democracy, where the majority are
the masters, or all the hopes and purposes of the men who founded this
government have been defeated and forgotten. In America there is but one
way by which great reforms can be accomplished and the relief sought by
classes obtained, and that is through the orderly processes of
representative government. Those who would propose any other method of
reform are enemies of this country. America will not be daunted by
threats nor lose her composure or calmness in these distressing times.
We can afford, in the midst of this day of passion and unrest, to be
self-contained and sure. The instrument of all reform in America is the
ballot. The road to economic and social reform in America is the
straight road of justice to all classes and conditions of men. Men have
but to follow this road to realize the full fruition of their objects
and purposes. Let those beware who would take the shorter road of
disorder and revolution. The right road is the road of justice and
orderly process.

***

State of the Union Address
Woodrow Wilson
December 7, 1920

GENTLEMEN OF THE CONGRESS:

When I addressed myself to performing the duty laid upon the President
by the Constitution to present to you an annual report on the state of
the Union, I found my thought dominated by an immortal sentence of
Abraham Lincoln's--"Let us have faith that right makes might, and in
that faith let us dare to do our duty as we understand it"--a sentence
immortal because it embodies in a form of utter simplicity and purity
the essential faith of the nation, the faith in which it was conceived,
and the faith in which it has grown to glory and power. With that faith
and the birth of a nation founded upon it came the hope into the world
that a new order would prevail throughout the affairs of mankind, an
order in which reason and right would take precedence over covetousness
and force; and I believe that I express the wish and purpose of every
thoughtful American when I say that this sentence marks for us in the
plainest manner the part we should play alike in the arrangement of our
domestic affairs and in our exercise of influence upon the affairs of
the world.

By this faith, and by this faith alone, can the world be lifted out of
its present confusion and despair. It was this faith which prevailed
over the wicked force of Germany. You will remember that the beginning
of the end of the war came when the German people found themselves face
to face with the conscience of the world and realized that right was
everywhere arrayed against the wrong that their government was
attempting to perpetrate. I think, therefore, that it is true to say
that this was the faith which won the war. Certainly this is the faith
with which our gallant men went into the field and out upon the seas to
make sure of victory.

This is the mission upon which Democracy came into the world. Democracy
is an assertion of the right of the individual to live and to be treated
justly as against any attempt on the part of any combination of
individuals to make laws which will overburden him or which will destroy
his equality among his fellows in the matter of right or privilege; and
I think we all realize that the day has come when Democracy is being put
upon its final test. The Old World is just now suffering from a wanton
rejection of the principle of democracy and a substitution of the
principle of autocracy as asserted in the name, but without the
authority and sanction, of the multitude. This is the time of all others
when Democracy should prove its purity and its spiritual power to
prevail. It is surely the manifest destiny of the United States to lead
in the attempt to make this spirit prevail.

There are two ways in which the United States can assist to accomplish
this great object. First, by offering the example within her own borders
of the will and power of Democracy to make and enforce laws which are
unquestionably just and which are equal in their administration-laws
which secure its full right to Labor and yet at the same time safeguard
the integrity of property, and particularly of that property which is
devoted to the development of industry and the increase of the necessary
wealth of the world. Second, by standing for right and justice as toward
individual nations. The law of Democracy is for the protection of the
weak, and the influence of every democracy in the world should be for
the protection of the weak nation, the nation which is struggling toward
its right and toward its proper recognition and privilege in the family
of nations.

The United States cannot refuse this role of champion without putting
the stigma of rejection upon the great and devoted men who brought its
government into existence and established it in the face of almost
universal opposition and intrigue, even in the face of wanton force, as,
for example, against the Orders in Council of Great Britain and the
arbitrary Napoleonic decrees which involved us in what we know as the
War of 1812.

I urge you to consider that the display of an immediate disposition on
the part of the Congress to remedy any injustices or evils that may have
shown themselves in our own national life will afford the most effectual
offset to the forces of chaos and tyranny which are playing so
disastrous a part in the fortunes of the free peoples of more than one
part of the world. The United States is of necessity the sample
democracy of the world, and the triumph of Democracy depends upon its
success.

Recovery from the disturbing and sometimes disastrous effects of the
late war has been exceedingly slow on the other side of the water, and
has given promise, I venture-to say, of early completion only in our own
fortunate country; but even with us the recovery halts and is impeded at
times, and there are immediately serviceable acts of legislation which
it seems to me we ought to attempt, to assist that recovery and prove
the indestructible recuperative force of a great government of the
people. One of these is to prove that a great democracy can keep house
as successfully and in as business-like a fashion as any other
government. It seems to me that the first step toward providing this is
to supply ourselves with a systematic method of handling our estimates
and expenditures and bringing them to the point where they will not be
an unnecessary strain upon our income or necessitate unreasonable
taxation; in other words, a workable budget system. And I respectfully
suggest that two elements are essential to such a system-namely, not
only that the proposal of appropriations should be in the hands of a
single body, such as a single appropriations committee in each house of
the Congress, but also that this body should be brought into such
cooperation with the Departments of the Government and with the Treasury
of the United States as would enable it to act upon a complete
conspectus of the needs of the Government and the resources from which
it must draw its income.

I reluctantly vetoed the budget bill passed by the last session of the
Congress because of a constitutional objection. The House of
Representatives subsequently modified the bill in order to meet this
objection. In the revised form, I believe that the bill, coupled with
action already taken by the Congress to revise its rules and procedure,
furnishes the foundation for an effective national budget system. I
earnestly hope, therefore, that one of the first steps to be taken by
the present session of the Congress will be to pass the budget bill.

The nation's finances have shown marked improvement during the last
year. The total ordinary receipts of $6,694,000,000 for the fiscal year
1920 exceeded those for 1919 by $1,542,000,000, while the total net
ordinary expenditures decreased from $18,514,000,000 to $6,403,000,000.
The gross public debt, which reached its highest point on August 31,
1919, when it was $26,596,000,000, had dropped on November 30, 1920, to
$24,175,000,000.

There has also been a marked decrease in holdings of government war
securities by the banking institutions of the country, as well as in the
amount of bills held by the Federal Reserve Banks secured by government
war obligations. This fortunate result has relieved the banks and left
them freer to finance the needs of Agriculture, Industry, and Commerce.
It has been due in large part to the reduction of the public debt,
especially of the floating debt, but more particularly to the improved
distribution of government securities among permanent investors. The
cessation of the Government's borrowings, except through short-term
certificates of indebtedness, has been a matter of great consequence to
the people of the country at large, as well as to the holders of Liberty
Bonds and Victory Notes, and has had an important bearing on the matter
of effective credit control.

The year has been characterized by the progressive withdrawal of the
Treasury from the domestic credit market and from a position of dominant
influence in that market. The future course will necessarily depend upon
the extent to which economies are practiced and upon the burdens placed
upon the Treasury, as well as upon industrial developments and the
maintenance of tax receipts at a sufficiently high level. The
fundamental fact which at present dominates the Government's financial
situation is that seven and a half billions of its war indebtedness
mature within the next two and a half years. Of this amount, two and a
half billions are floating debt and five billions, Victory Notes and
War. Savings Certificates. The fiscal program of the Government must be
determined with reference to these maturities. Sound policy demands that
Government expenditures be reduced to the lowest amount which will
permit the various services to operate efficiently and that Government
receipts from taxes and salvage be maintained sufficiently high to
provide for current requirements, including interest and sinking fund
charges on the public debt, and at the same time retire the floating
debt and part of the Victory Loan before maturity.

With rigid economy, vigorous salvage operations, and adequate revenues
from taxation, a surplus of current receipts over current expenditures
can be realized and should be applied to the floating debt. All branches
of the Government should cooperate to see that this program is realized.
I cannot overemphasize the necessity of economy in Government
appropriations and expenditures and the avoidance by the Congress of
practices which take money from the Treasury by indefinite or revolving
fund appropriations. The estimates for the present year show that over a
billion dollars of expenditures were authorized by the last Congress in
addition to the amounts shown in the usual compiled statements of
appropriations. This strikingly illustrates the importance of making
direct and specific appropriations. The relation between the current
receipts and current expenditures of the Government during the present
fiscal year, as well as during the last half of the last fiscal year,
has been disturbed by the extraordinary burdens thrown upon the Treasury
by the Transportation Act, in connection with the return of the
railroads to private control. Over $600,000,000 has already been paid to
the railroads under this act-$350,000,000 during the present fiscal
year; and it is estimated that further payments aggregating possibly
$650,000,000 must still be made to the railroads during the current
year. It is obvious that these large payments have already seriously
limited the Government's progress in retiring the floating debt.

Closely connected with this, it seems to me, is the necessity for an
immediate consideration of the revision of our tax laws. Simplification
of the income and profits taxes has become an immediate necessity. These
taxes performed an indispensable service during the war. The need for
their simplification, however, is very great, in order to save the
taxpayer inconvenience and expense and in order to make his liability
more certain and definite. Other and more detailed recommendations with
regard to taxes will no doubt be laid before you by the Secretary of the
Treasury and the Commissioner of Internal Revenue.

It is my privilege to draw to the attention of Congress for very
sympathetic consideration the problem of providing adequate facilities
for the care and treatment of former members of the military and naval
forces who are sick and disabled as the result of their participation in
the war. These heroic men can never be paid in money for the service
they patriotically rendered the nation. Their reward will lie rather in
realization of the fact that they vindicated the rights of their country
and aided in safeguarding civilization. The nation's gratitude must be
effectively revealed to them by the most ample provision for their
medical care and treatment as well as for their vocational training and
placement. The time has come when a more complete program can be
formulated and more satisfactorily administered for their treatment and
training, and I earnestly urge that the Congress give the matter its
early consideration. The Secretary of the Treasury and the Board for
Vocational Education will outline in their annual reports proposals
covering medical care and rehabilitation which I am sure will engage
your earnest study and commend your most generous support.

Permit me to emphasize once more the need for action upon certain
matters upon which I dwelt at some length in my message to the second
session of the Sixty-sixth Congress. The necessity, for example, of
encouraging the manufacture of dyestuffs and related chemicals; the
importance of doing everything possible to promote agricultural
production along economic lines, to improve agricultural marketing, and
to make rural life more attractive and healthful; the need for a law
regulating cold storage in such a way as to limit the time during which
goods may be kept in storage, prescribing the method of disposing of
them if kept beyond the permitted period, and requiring goods released
from storage in all cases to bear the date of their receipt. It would
also be most serviceable if it were provided that all goods released
from cold storage for interstate shipment should have plainly marked
upon each package the selling or market price at which they went into
storage, in order that the purchaser might be able to learn what profits
stood between him and the producer or the wholesale dealer. Indeed, It
would be very serviceable to the public if all goods destined for
interstate commerce were made to carry upon every packing case whose
form made it possible a plain statement of the price at which they left
the hands of the producer. I respectfully call your attention also to
the recommendations of the message referred to with regard to a federal
license for all corporations engaged in interstate commerce.

In brief, the immediate legislative need of the time is the removal of
all obstacles to the realization of the best ambitions of our people in
their several classes of employment and the strengthening of all
instrumentalities by. which difficulties are to be met and removed and
justice dealt out, whether by law or by some form of mediation and
conciliation. I do not feel it to be my privilege at present to, suggest
the detailed and particular methods by which these objects may be
attained, but I have faith that the inquiries of your several committees
will discover the way and the method.

In response to what I believe to be the impulse of sympathy and opinion
throughout the United States, I earnestly suggest that the Congress
authorize the Treasury of the United States to make to the struggling
government of Armenia such a loan as was made to several of the Allied
governments during the war, and I would also suggest that it would be
desirable to provide in the legislation itself that the expenditure of
the money thus loaned should be under the supervision of a commission,
or at least a commissioner, from the United States in order that
revolutionary tendencies within Armenia itself might not be afforded by
the loan a further tempting opportunity.

Allow me to call your attention to the fact that the people of the
Philippine Islands have succeeded in maintaining a stable government
since the last action of the Congress in their behalf, and have thus
fulfilled the condition set by the Congress as precedent to a
consideration of granting independence to the Islands. I respectfully
submit that this condition precedent having been fulfilled, it is now
our liberty and our duty to keep our promise to the people of those
islands by granting them the independence which they so honorably covet.

I have not so much laid before you a series of recommendations,
gentlemen, as sought to utter a confession of faith, of the faith in
which I was bred and which it is my solemn purpose to stand by until my
last fighting day. I believe this to be the faith of America, the faith
of the future, and of all the victories which await national action in
the days to come, whether in America or elsewhere.

***

State of the Union Address
Warren Harding
December 6, 1921

MR. SPEAKER AND MEMBERS OF THE CONGRESS:

It is a very gratifying privilege to come to the Congress with the
Republic at peace with all the nations of the world. More, it is equally
gratifying to report that our country is not only free from every
impending, menace of war, but there are growing assurances of the
permanency of the peace which we so deeply cherish.

For approximately ten years we have dwelt amid menaces of war or as
participants in war's actualities, and the inevitable aftermath, with
its disordered conditions, bits added to the difficulties of government
which adequately can not be appraised except by, those who are in
immediate contact and know the responsibilities. Our tasks would be less
difficult if we had only ourselves to consider, but so much of the world
was involved, the disordered conditions are so well-nigh universal, even
among nations not engaged in actual warfare, that no permanent
readjustments can be effected without consideration of our inescapable
relationship to world affairs in finance and trade. Indeed, we should be
unworthy of our best traditions if we were unmindful of social, moral,
and political conditions which are not of direct concern to us, but
which do appeal to the human sympathies and the very becoming interest
of a people blest with our national good fortune.

It is not my purpose to bring to you a program of world restoration. In
the main such a program must be worked out by the nations more directly
concerned. They must themselves turn to the heroic remedies for the
menacing conditions under which they are struggling, then we can help,
and we mean to help. We shall do so unselfishly because there is
compensation in the consciousness of assisting, selfishly because the
commerce and international exchanges in trade, which marked our high
tide of fortunate advancement, are possible only when the nations of all
continents are restored to stable order and normal relationship.

In the main the contribution of this Republic to restored normalcy in
the world must come through the initiative of the executive branch of
the Government, but the best of intentions and most carefully considered
purposes would fail utterly if the sanction and the cooperation of
Congress were not cheerfully accorded.

I am very sure we shall have no conflict of opinion about constitutional
duties or authority. During the anxieties of war, when necessity seemed
compelling there were excessive grants of authority and all
extraordinary concentration of powers in the Chief Executive. The repeal
of war-time legislation and the automatic expirations which attended the
peace proclamations have put an end to these emergency excesses but I
have the wish to go further than that. I want to join you ill
restoring-, ill the most cordial way, the spirit of coordination and
cooperation, and that mutuality of confidence and respect which is
necessary ill representative popular government.

Encroachment upon the functions of Congress or attempted dictation of
its policy are not to be thought of, much less attempted, but there is
all insistent call for harmony of purpose and concord of action to speed
the solution of the difficult problems confronting both the legislative
and executive branches of the Government.

It is worth while to make allusion here to the character of our Clove
Government, mindful as one must be that an address to you is no less it
message to all our people, for whom you speak most intimately. Ours is
it popular Government through political parties. We divide along
political lines, and I would ever have it so. I do not mean that
partisan preferences should hinder any public servant in the performance
of a conscientious and patriotic official duty. We saw partisan lines
utterly obliterated when war imperiled, and our faith in the Republic
was riveted anew. We ought not to find these partisan lines obstructing
the expeditious solution of the urgent problems of peace.

Granting that we are fundamentally a representative popular Government,
with political parties the governing agencies, I believe the political
party in power should assume responsibility, determine upon policies ill
the conference which supplements conventions and election campaigns, and
then strive for achievement through adherence to the accepted policy.

There is vastly greater security, immensely more of the national
viewpoint, much larger and prompter accomplishment where our divisions
are along party lines, in the broader and loftier sense, than to divide
geographically, or according to pursuits, or personal following. For a
century and a third, parties have been charged with responsibility and
held to strict accounting. When they fail, they are relieved of
authority; and the system has brought its to a national eminence no less
than a world example.

Necessarily legislation is a matter of compromise. The full ideal is
seldom attained. In that meeting of minds necessary to insure results,
there must and will be accommodations and compromises, but in the
estimate of convictions and sincere put-poses the supreme responsibility
to national interest must not be ignored. The shield to the high-minded
public servant who adheres to party policy is manifest, but the higher
purpose is the good of the Republic as a whole.

It would be ungracious to withhold acknowledgment of the really large
volume and excellent quality of work accomplished by the extraordinary
session of Congress which so recently adjourned. I am not unmindful of
the very difficult tasks with which you were called to deal, and no one
can ignore the insistent conditions which, during recent years, have
called for the continued and almost exclusive attention of your
membership to public work. It would suggest insincerity if I expressed
complete accord with every expression recorded in your roll calls, but
we are all agreed about the difficulties and the inevitable divergence
of opinion in seeking the reduction, amelioration and readjustment of
the burdens of taxation. Later on, when other problems are solved, I
shall make some recommendations about renewed consideration of our tax
program, but for the immediate time before us we must be content with
the billion dollar reduction in the tax draft upon the people, and
diminished irritations, banished uncertainty and improved methods of
collection. By your sustainment of the rigid economies already
inaugurated, with hoped-for extension of these economies and added
efficiencies in administration, I believe further reductions may be
enacted and hindering burdens abolished.

In these urgent economies we shall be immensely assisted by the budget
system for which you made provision in the extraordinary session. The
first budget is before you. Its preparation is a signal achievement, and
the perfection of the system, a thing impossible in the few months
available for its initial trial, will mark its enactment as the
beginning of the greatest reformation in governmental practices since
the beginning of the Republic.

There is pending a grant of authority to the administrative branch of
the Government for the funding and settlement of our vast foreign loans
growing out of our grant of war credits. With the hands of the executive
branch held impotent to deal with these debts we are hindering urgent
readjustments among our debtors and accomplishing nothing for ourselves.
I think it is fair for the Congress to assume that the executive branch
of the Government would adopt no major policy in dealing with these
matters which would conflict with the purpose of Congress in authorizing
the loans, certainly not without asking congressional approval, but
there are minor problems incident to prudent loan transactions and the
safeguarding of our interests which can not even be attempted without
this authorization. It will be helpful to ourselves and it will improve
conditions among our debtors if funding and the settlement of defaulted
interest may be negotiated.

The previous Congress, deeply concerned in behalf of our merchant
marine, in 1920 enacted the existing shipping law, designed for the
upbuilding of the American merchant marine. Among other things provided
to encourage our shipping on the world's seas, the Executive was
directed to give notice of the termination of all existing commercial
treaties in order to admit of reduced duties on imports carried in
American bottoms. During the life of the act no Executive has complied
with this order of the Congress. When the present administration came
into responsibility it began an early inquiry into the failure to
execute the expressed purpose of the Jones Act. Only one conclusion has
been possible. Frankly, Members of House and Senate, eager its I am to
join you in the making of an American merchant marine commensurate with
our commerce, the denouncement of our commercial treaties would involve
us in a chaos of trade relationships and add indescribably to the
confusion of the already disordered commercial world. Our power to do so
is not disputed, but power and ships, without comity of relationship,
will not give us the expanded trade which is inseparably linked with a
great merchant marine. Moreover, the applied reduction of duty, for
which the treaty denouncements were necessary, encouraged only the
carrying of dutiable imports to our shores, while the tonnage which
unfurls the flag on the seas is both free and dutiable, and the cargoes
which make it nation eminent in trade are outgoing, rather than
incoming.

It is not my thought to lay the problem before you in detail today. It
is desired only to say to you that the executive branch of the
Government, uninfluenced by the protest of any nation, for none has been
made, is well convinced that your proposal, highly intended and heartily
supported here, is so fraught with difficulties and so marked by
tendencies to discourage trade expansion, that I invite your tolerance
of noncompliance for only a few weeks until a plan may be presented
which contemplates no greater draft upon the Public Treasury, and which,
though yet too crude to offer it to-day, gives such promise of expanding
our merchant marine, that it will argue its own approval. It is enough
to say to-day that we are so possessed of ships, and the American
intention to establish it merchant marine is so unalterable, that a
plain of reimbursement, at no other cost than is contemplated in the
existing act, will appeal to the pride and encourage the hope of all the
American people.

There is before you the completion of the enactment of what has been
termed a "permanent" tariff law, the word "permanent" being used to
distinguish it from the emergency act which the Congress expedited early
in the extraordinary session, and which is the law today. I can not too
strongly urge in early completion of this necessary legislation It is
needed to stabilize our industry at home; it is essential to make more
definite our trade relations abroad. More, it is vital to the
preservation of many of our own industries which contribute so notably
to the very lifeblood of our Nation.

There is now, and there always will be, a storm of conflicting opinion
about any tariff revision. We can not go far wrong when we base our
tariffs on the policy of preserving the productive activities which
enhance employment and add to our national prosperity.

Again comes the reminder that we must not be unmindful of world
conditions, that peoples are struggling for industrial rehabilitation
and that we can not dwell in industrial and commercial exclusion and at
the same time do the just thing in aiding world reconstruction and
readjustment. We do not seek a selfish aloofness, and we could not
profit by it, were it possible. We recognize the necessity of buying
wherever we sell, and the permanency of trade lies in its acceptable
exchanges. In our pursuit of markets we must give as well as receive. We
can not sell to others who do not produce, nor can we buy unless we
produce at home. Sensible of every obligation of humanity, commerce and
finance, linked as they are in the present world condition, it is not to
be argued that we need destroy ourselves to be helpful to others. With
all my heart I wish restoration to the peoples blighted by the awful
World War, but the process of restoration does not lie in our acceptance
of like conditions. It were better to, remain on firm ground, strive for
ample employment and high standards of wage at home, and point the way
to balanced budgets, rigid economies, and resolute, efficient work as
the necessary remedies to cure disaster.

Everything relating to trade, among ourselves and among nations, has
been expanded, excessive, inflated, abnormal, and there is a madness in
finance which no American policy alone will cure. We are a creditor
Nation, not by normal processes, but made so by war. It is not an
unworthy selfishness to seek to save ourselves, when the processes of
that salvation are not only not denied to others, but commended to them.
We seek to undermine for others no industry by which they subsist; we
are obligated to permit the undermining of none of our own which make
for employment and maintained activities.

Every contemplation, it little matters in which direction one turns,
magnifies the difficulty of tariff legislation, but the necessity of the
revision is magnified with it. Doubtless we are justified in seeking it.
More flexible policy than we have provided heretofore. I hope a way will
be found to make for flexibility and elasticity, so that rates may be
adjusted to meet unusual and changing conditions which can not be
accurately anticipated. There are problems incident to unfair practices,
and to exchanges which madness in money have made almost unsolvable. I
know of no manner in which to effect this flexibility other than the
extension of the powers of the Tariff Commission so that it can adapt
itself to it scientific and wholly just administration of the law.

I am not unmindful of the constitutional difficulties. These can be met
by giving authority to the Chief Executive, who could
proclaim-additional duties to meet conditions which the Congress may
designate.

At this point I must disavow any desire to enlarge the Executive's
powers or add to the responsibilities of the office. They are already
too large. If there were any other plan I would prefer it.

The grant of authority to proclaim would necessarily bring the Tariff
Commission into new and enlarged activities, because no Executive could
discharge such a duty except upon the information acquired and
recommendations made by this commission. But the plan is feasible, and
the proper functioning of the board would give its it better
administration of a defined policy than ever can be made possible by
tariff duties prescribed without flexibility.

There is a manifest difference of opinion about the merits of American
valuation. Many nations have adopted delivery valuation as the basis for
collecting duties; that is, they take the cost of the imports delivered
at the port of entry as the basis for levying duty. It is no radical
departure, in view of varying conditions and the disordered state of
money values, to provide for American valuation, but there can not be
ignored the danger of such a valuation, brought to the level of our own
production costs, making our tariffs prohibitive. It might do so in many
instances where imports ought to be encouraged. I believe Congress ought
well consider the desirability of the only promising alternative,
namely, a provision authorizing proclaimed American valuation, under
prescribed conditions, on any given list of articles imported.

In this proposed flexibility, authorizing increases to meet conditions
so likely to change, there should also be provision for decreases. A
rate may be just to-day, and entirely out of proportion six months from
to-day. If our tariffs are to be made equitable, and not necessarily
burden our imports and hinder our trade abroad, frequent adjustment will
be necessary for years to come. Knowing the impossibility of
modification by act of Congress for any one or a score of lines without
involving a long array of schedules, I think we shall go a long ways
toward stabilization, if there is recognition of the Tariff Commission's
fitness to recommend urgent changes by proclamation.

I am sure about public opinion favoring the early determination of our
tariff policy. There have been reassuring signs of a business revival
from the deep slump which all the world has been experiencing. Our
unemployment, which gave its deep concern only a few weeks ago, has
grown encouragingly less, and new assurances and renewed confidence will
attend the congressional declaration that American industry will be held
secure.

Much has been said about the protective policy for ourselves making it
impossible for our debtors to discharge their obligations to us. This is
a contention not now pressing for decision. If we must choose between a
people in idleness pressing for the payment of indebtedness, or a people
resuming the normal ways of employment and carrying the credit, let us
choose the latter. Sometimes we appraise largest the human ill most
vivid in our minds. We have been giving, and are giving now, of our
influence and appeals to minimize the likelihood of war and throw off
the crushing burdens of armament. It is all very earnest, with a
national soul impelling. But a people unemployed, and gaunt with hunger,
face a situation quite as disheartening as war, and our greater
obligation to-day is to do the Government's part toward resuming
productivity and promoting fortunate and remunerative employment.

Something more than tariff protection is required by American
agriculture. To the farmer has come the earlier and the heavier burdens
of readjustment. There is actual depression in our agricultural
industry, while agricultural prosperity is absolutely essential to the
general prosperity of the country.

Congress has sought very earnestly to provide relief. It has promptly
given such temporary relief as has been possible, but the call is
insistent for the permanent solution. It is inevitable that large crops
lower the prices and short crops advance them. No legislation can cure
that fundamental law. But there must be some economic solution for the
excessive variation in returns for agricultural production.

It is rather shocking to be told, and to have the statement strongly
supported, that 9,000,000 bales of cotton, raised on American
plantations in a given year, will actually be worth more to the
producers than 13,000,000 bales would have been. Equally shocking is the
statement that 700,000,000 bushels of wheat, raised by American farmers,
would bring them more money than a billion bushels. Yet these are not
exaggerated statements. In a world where there are tens of millions who
need food and clothing which they can not get, such a condition is sure
to indict the social system which makes it possible.

In the main the remedy lies in distribution and marketing. Every proper
encouragement should be given to the cooperative marketing programs.
These have proven very helpful to the cooperating communities in Europe.
In Russia the cooperative community has become the recognized bulwark of
law and order, and saved individualism from engulfment in social
paralysis. Ultimately they will be accredited with the salvation of the
Russian State.

There is the appeal for this experiment. Why not try it? No one
challenges the right of the farmer to a larger share of the consumer's
pay for his product, no one disputes that we can not live without the
farmer. He is justified in rebelling against the transportation cost.
Given a fair return for his labor, he will have less occasion to appeal
for financial aid; and given assurance that his labors shall not be in
vain, we reassure all the people of a production sufficient to meet our
National requirement and guard against disaster.

The base of the pyramid of civilization which rests upon the soil is
shrinking through the drift of population from farm to city. For a
generation we have been expressing more or less concern about this
tendency. Economists have warned and statesmen have deplored. We thought
for at time that modern conveniences and the more intimate contact would
halt the movement, but it has gone steadily on. Perhaps only grim
necessity will correct it, but we ought to find a less drastic remedy.

The existing scheme of adjusting freight rates hits been favoring the
basing points, until industries are attracted to some centers and
repelled from others. A great volume of uneconomic and wasteful
transportation has attended, and the cost increased accordingly. The
grain-milling and meat-packing industries afford ample illustration, and
the attending concentration is readily apparent. The menaces in
concentration are not limited to the retardingly influences on
agriculture. Manifestly the. conditions and terms of railway
transportation ought not be permitted to increase this undesirable
tendency. We have a just pride in our great cities, but we shall find a
greater pride in the Nation, which has it larger distribution of its
population into the country, where comparatively self-sufficient smaller
communities may blend agricultural and manufacturing interests in
harmonious helpfulness and enhanced good fortune. Such a movement
contemplates no destruction of things wrought, of investments made, or
wealth involved. It only looks to a general policy of transportation of
distributed industry, and of highway construction, to encourage the
spread of our population and restore the proper balance between city and
country. The problem may well have your earnest attention.

It has been perhaps the proudest claim of our American civilization that
in dealing with human relationships it has constantly moved toward such
justice in distributing the product of human energy that it has improved
continuously the economic status of the mass of people. Ours has been a
highly productive social organization. On the way up from the elemental
stages of society we have eliminated slavery and serfdom and are now far
on the way to the elimination of poverty.

Through the eradication of illiteracy and the diffusion of education
mankind has reached a stage where we may fairly say that in the United
States equality of opportunity has been attained, though all are not
prepared to embrace it. There is, indeed, a too great divergence between
the economic conditions of the most and the least favored classes in the
community. But even that divergence has now come to the point where we
bracket the very poor and the very rich together as the least fortunate
classes. Our efforts may well be directed to improving the status of
both.

While this set of problems is commonly comprehended under the general
phrase "Capital and labor," it is really vastly broader. It is a
question of social and economic organization. Labor has become a large
contributor, through its savings, to the stock of capital; while the
people who own the largest individual aggregates of capital are
themselves often hard and earnest laborers. Very often it is extremely
difficult to draw the line of demarcation between the two groups; to
determine whether a particular individual is entitled to be set down as
laborer or as capitalist. In a very large proportion of cases he is
both, and when he is both he is the most useful citizen.

The right of labor to organize is just as fundamental and necessary as
is the right of capital to organize. The right of labor to negotiate, to
deal with and solve its particular problems in an organized way, through
its chosen agents, is just as essential as is the right of capital to
organize, to maintain corporations, to limit the liabilities of
stockholders. Indeed, we have come to recognize that the limited
liability of the citizen as a member of a labor organization closely
parallels the limitation of liability of the citizen as a stockholder in
a corporation for profit. Along this line of reasoning we shall make the
greatest progress toward solution of our problem of capital and labor.

In the case of the corporation which enjoys the privilege of limited
liability of stockholders, particularly when engaged in in the public
service, it is recognized that the outside public has a large concern
which must be protected; and so we provide regulations, restrictions,
and in some cases detailed supervision. Likewise in the case of labor
organizations, we might well apply similar and equally well-defined
principles of regulation and supervision in order to conserve the
public's interests as affected by their operations.

Just as it is not desirable that a corporation shall be allowed to
impose undue exactions upon the public, so it is not desirable that a
labor organization shall be permitted to exact unfair terms of
employment or subject the public to actual distresses in order to
enforce its terms. Finally, just as we are earnestly seeking for
procedures whereby to adjust and settle political differences between
nations without resort to war, so we may well look about for means to
settle the differences between organized capital and organized labor
without resort to those forms of warfare which we recognize under the
name of strikes, lockouts, boycotts, and the like.

As we have great bodies of law carefully regulating the organization and
operations of industrial and financial corporations, as we have treaties
and compacts among nations which look to the settlement of differences
without the necessity of conflict in arms, so we might well have plans
of conference, of common counsel, of mediation, arbitration, and
judicial determination in controversies between labor and capital. To
accomplish this would involve the necessity to develop a thoroughgoing
code of practice in dealing with such affairs It might be well to
frankly set forth the superior interest of the community as a whole to
either the labor group or the capital group. With rights, privileges,
immunities, and modes of organization thus carefully defined, it should
be possible to set up judicial or quasi judicial tribunals for the
consideration and determination of all disputes which menace the public
welfare.

In an industrial society such as ours the strike, the lockout, and the
boycott are as much out of place and as disastrous in their results as
is war or armed revolution in the domain of politics. The same
disposition to reasonableness, to conciliation, to recognition of the
other side's point of view, the same provision of fair and recognized
tribunals and processes, ought to make it possible to solve the one set
of questions its easily as the other. I believe the solution is
possible.

The consideration of such a policy would necessitate the exercise of
care and deliberation in the construction of a code and a charter of
elemental rights, dealing with the relations of employer and employee.
This foundation in the law, dealing with the modern conditions of social
and economic life, would hasten the building of the temple of peace in
industry which a rejoicing nation would acclaim.

After each war, until the last, the Government has been enabled to give
homes to its returned soldiers, and a large part of our settlement and
development has attended this generous provision of land for the
Nation's defenders.

There is yet unreserved approximately 200,000,000 acres in the public
domain, 20,000,000 acres of which are known to be susceptible of
reclamation and made fit for homes by provision for irrigation.

The Government has been assisting in the development of its remaining
lands, until the estimated increase in land values in the irrigated
sections is full $500,000,000 and the crops of 1920 alone on these lands
are estimated to exceed $100,000,000. Under the law authorization these
expenditures for development the advances are to be returned and it
would be good business for the Government to provide for the reclamation
of the remaining 20,000,000 acres, in addition to expediting the
completion of projects long under way.

Under what is known as the coal and gas lease law, applicable also to
deposits of phosphates and other minerals on the public domain, leases
are now being made on the royalty basis, and are producing large
revenues to the Government. Under this legislation, 10 per centum of all
royalties is to be paid directly to the Federal Treasury, and of the
remainder 50 per centum is to be used for reclamation of arid lands by
irrigation, and 40 per centum is to be paid to the States, in which the
operations are located, to be used by them for school and road purposes.

These resources are so vast, and the development is affording so
reliable a basis of estimate, that the Interior Department expresses the
belief that ultimately the present law will add in royalties and
payments to the treasuries of the Federal Government and the States
containing these public lands a total of $12,000,000,000. This means, of
course, an added wealth of many times that sum. These prospects seem to
afford every justification of Government advances in reclamation and
irrigation.

Contemplating the inevitable and desirable increase of population, there
is another phase of reclamation full worthy of consideration. There are
79,000,000 acres of swamp and cut-over lands which may be reclaimed and
made as valuable as any farm lands we possess. These acres are largely
located in Southern States, and the greater proportion is owned by the
States or by private citizens. Congress has a report of the survey of
this field for reclamation, and the feasibility is established. I gladly
commend Federal aid, by way of advances, where State and private
participation is assured.

Home making is one of the greater benefits which government can bestow.
Measures are pending embodying this sound policy to which we may well
adhere. It is easily possible to make available permanent homes which
will provide, in turn, for prosperous American families, without
injurious competition with established activities, or imposition on
wealth already acquired.

While we are thinking of promoting the fortunes of our own people I am
sure there is room in the sympathetic thought of America for fellow
human beings who are suffering and dying of starvation in Russia. A
severe drought in the Valley of the Volga has plunged 15,000,000 people
into grievous famine. Our voluntary agencies are exerting themselves to
the utmost to save the lives of children in this area, but it is now
evident that unless relief is afforded the loss of life will extend into
many millions. America can not be deaf to such a call as that.

We do not recognize the government of Russia, nor tolerate the
propaganda which emanates therefrom, but we do not forget the traditions
of Russian friendship. We may put aside our consideration of all
international politics and fundamental differences in government. The
big thing is the call of the suffering and the dying. Unreservedly I
recommend the appropriation necessary to supply the American Relief
Administration with 10,000,000 bushels of corn and 1,000,000 bushels of
seed grains, not alone to halt the wave of death through starvation, but
to enable spring planting in areas where the seed grains have been
exhausted temporarily to stem starvation.

The American Relief Administration is directed in Russia by former
officers of our own armies, and has fully demonstrated its ability to
transport and distribute relief through American hands without hindrance
or loss. The time has come to add the Government's support to the
wonderful relief already wrought out of the generosity of the American
private purse.

I am not unaware that we have suffering and privation at home. When it
exceeds the capacity for the relief within the States concerned, it will
have Federal consideration. It seems to me we should be indifferent to
our own heart promptings, and out of accord with the spirit which
acclaims the Christmastide, if we do not give out of our national
abundance to lighten this burden of woe upon a people blameless and
helpless in famine's peril.

There are it full score of topics concerning which it would be becoming
to address you, and on which I hope to make report at a later time. I
have alluded to the things requiring your earlier attention. However, I
can not end this limited address without a suggested amendment to the
organic law.

Many of us belong to that school of thought which is hesitant about
altering the fundamental law. I think our tax problems, the tendency of
wealth to seek nontaxable investment, and the menacing increase of
public debt, Federal, State and municipal-all justify a proposal to
change the Constitution so as to end the issue of nontaxable bonds. No
action can change the status of the many billions outstanding, but we
can guard against future encouragement of capital's paralysis, while a
halt in the growth of public indebtedness would be beneficial throughout
our whole land.

Such a change in the Constitution must be very thoroughly considered
before submission. There ought to be known what influence it will have
on the inevitable refunding of our vast national debt, how it will
operate on the necessary refunding of State and municipal debt, how the
advantages of Nation over State and municipality, or the contrary, may
be avoided. Clearly the States would not ratify to their own apparent
disadvantage. I suggest the consideration because the drift of wealth
into nontaxable securities is hindering the flow of large capital to our
industries, manufacturing, agricultural, and carrying, until we are
discouraging the very activities which make our wealth.

Agreeable to your expressed desire and in complete accord with the
purposes of the executive branch of the Government, there is in
Washington, as you happily know, an International Conference now most
earnestly at work on plans for the limitation of armament, a naval
holiday, and the just settlement of problems which might develop into
causes of international disagreement.

It is easy to believe a world-hope is centered on this Capital City. A
most gratifying world-accomplishment is not improbable.

***

State of the Union Address
Warren Harding
December 8, 1922

MEMBERS OF THE CONGRESS:

So many problems are calling for solution that a recital of all of them,
in the face of the known limitations of a short session of Congress,
would seem to lack sincerity of purpose. It is four years since the
World War ended, but the inevitable readjustment of the social and
economic order is not more than barely begun. There is no acceptance of
pre-war conditions anywhere in the world. In a very general way humanity
harbors individual wishes to go on with war-time compensation for
production, with pre-war requirements in expenditure. In short,
everyone, speaking broadly, craves readjustment for everybody except
himself, while there can be no just and permanent readjustment except
when all participate.

The civilization which measured its strength of genius and the power of
science and the resources of industries, in addition to testing the
limits of man power and the endurance and heroism of men and women--that
same civilization is brought to its severest test in restoring a
tranquil order and committing humanity to the stable ways of peace.

If the sober and deliberate appraisal of pre-war civilization makes it
seem a worth-while inheritance, then with patience and good courage it
will be preserved. There never again will be precisely the old order;
indeed, I know of no one who thinks it to be desirable For out of the
old order came the war itself, and the new order, established and made
secure, never will permit its recurrence.

It is no figure of speech to say we have come to the test of Our
civilization. The world has been passing--is today passing through of a
great crisis. The conduct of war itself is not more difficult than the
solution of the problems which necessarily follow. I am not speaking at
this moment of the problem in its wider aspect of world rehabilitation
or of international relationships. The reference is to our own social,
financial, and economic problems at home. These things are not to be
considered solely as problems apart from all international relationship,
but every nation must be able to carry on for itself, else its
international relationship will have scant importance.

Doubtless our own people have emerged from the World War tumult less
impaired than most belligerent powers; probably we have made larger
progress toward reconstruction. Surely we have been fortunate in
diminishing unemployment, and our industrial and business activities,
which are the lifeblood of our material existence, have been restored as
in no other reconstruction period of like length in the history of the
world. Had we escaped the coal and railway strikes, which had no excuse
for their beginning and less justification for their delayed settlement,
we should have done infinitely better. But labor was insistent on
holding to the war heights, and heedless forces of reaction sought the
pre-war levels, and both were wrong. In the folly of conflict our
progress was hindered, and the heavy cost has not yet been fully
estimated. There can be neither adjustment nor the penalty of the
failure to readjust in which all do not somehow participate.

The railway strike accentuated the difficulty of the American farmer.
The first distress of readjustment came to the farmer, and it will not
be a readjustment fit to abide until he is relieved. The distress
brought to the farmer does not affect him alone. Agricultural ill
fortune is a national ill fortune. That one-fourth of our population
which produces the food of the Republic and adds so largely to our
export commerce must participate in the good fortunes of the Nation,
else there is none worth retaining.

Agriculture is a vital activity in our national life. In it we had our
beginning, and its westward march with the star of the empire has
reflected the growth of the Republic. It has its vicissitudes which no
legislation will prevent, its hardships for which no law can provide
escape. But the Congress can make available to the farmer the financial
facilities which have been built up under Government aid and supervision
for other commercial and industrial enterprises. It may be done on the
same solid fundamentals and make the vitally important agricultural
industry more secure, and it must be done.

This Congress already has taken cognizance of the misfortune which
precipitate deflation brought to American agriculture. Your measures of
relief and the reduction of the Federal reserve discount rate
undoubtedly saved the country from widespread disaster. The very proof
of helpfulness already given is the strongest argument for the permanent
establishment of widened credits, heretofore temporarily extended
through the War Finance Corporation.

The Farm Loan Bureau, which already has proven its usefulness through
the Federal land banks, may well have its powers enlarged to provide
ample farm production credits as well as enlarged land credits. It is
entirely practical to create a division in the Federal land banks to
deal with production credits, with the limitations of time so adjusted
to the farm turnover as the Federal reserve system provides for the
turnover in the manufacturing and mercantile world. Special provision
must be made for live-stock production credits, and the limit of land
loans may be safely enlarged. Various measures are pending before you,
and the best judgment of Congress ought to be expressed in a prompt
enactment at the present session.

But American agriculture needs more than added credit facilities. The
credits will help to solve the pressing problems growing out of
war-inflated land values and the drastic deflation of three years ago,
but permanent and deserved agricultural good fortune depends on better
and cheaper transportation.

Here is an outstanding problem, demanding the most rigorous
consideration of the Congress and the country. It has to do with more
than agriculture. It provides the channel for the flow of the country's
commerce. But the farmer is particularly hard hit. His market, so
affected by the world consumption, does not admit of the price
adjustment to meet carrying charges. In the last half of the year now
closing the railways, broken in carrying capacity because of motive
power and rolling stock out of order, though insistently declaring to
the contrary, embargoed his shipments or denied him cars when fortunate
markets were calling. Too frequently transportation failed while
perishable products were turning from possible profit to losses counted
in tens of millions.

I know of no problem exceeding in importance this one of transportation.
In our complex and interdependent modern life transportation is
essential to our very existence. Let us pass for the moment the menace
in the possible paralysis of such service as we have and note the
failure, for whatever reason, to expand our transportation to meet the
Nation's needs.

The census of 1880 recorded a population of 50,000,000. In two decades
more we may reasonably expect to count thrice that number. In the three
decades ending in 1920 the country's freight by rail increased from
631,000,000 tons to 2,234,000,000 tons; that is to say, while our
population was increasing, less than 70 per cent, the freight movement
increased over 250 per cent.

We have built 40 per cent of the world's railroad mileage, and yet find
it inadequate to our present requirements. When we contemplate the
inadequacy of to-day it is easy to believe that the next few decades
will witness the paralysis of our transportation-using social scheme or
a complete reorganization on some new basis. Mindful of the tremendous
costs of betterments, extensions, and expansions, and mindful of the
staggering debts of the world to-day, the difficulty is magnified. Here
is a problem demanding wide vision and the avoidance of mere makeshifts.
No matter what the errors of the past, no matter how we acclaimed
construction and then condemned operations in the past, we have the
transportation and the honest investment in the transportation which
sped us on to what we are, and we face conditions which reflect its
inadequacy to-day, its greater inadequacy to-morrow, and we contemplate
transportation costs which much of the traffic can not and will not
continue to pay.

Manifestly, we have need to begin on plans to coordinate all
transportation facilities. We should more effectively connect up our
rail lines with our carriers by sea. We ought to reap some benefit from
the hundreds of millions expended on inland waterways, proving our
capacity to utilize as well as expend. We ought to turn the motor truck
into a railway feeder and distributor instead of a destroying
competitor.

It would be folly to ignore that we live in a motor age. The motor car
reflects our standard of living and gauges the speed of our present-day
life. It long ago ran down Simple Living, and never halted to inquire
about the prostrate figure which fell as its victim. With full
recognition of motor-car transportation we must turn it to the most
practical use. It can not supersede the railway lines, no matter how
generously we afford it highways out of the Public Treasury. If freight
traffic by motor were charged with its proper and proportionate share of
highway construction, we should find much of it wasteful and more costly
than like service by rail. Yet we have paralleled the railways, a most
natural line of construction, and thereby taken away from the agency of
expected service much of its profitable traffic, which the taxpayers
have been providing the highways, whose cost of maintenance is not yet
realized.

The Federal Government has a right to inquire into the wisdom of this
policy, because the National Treasury is contributing largely to this
highway construction. Costly highways ought to be made to serve as
feeders rather than competitors of the railroads, and the motor truck
should become a coordinate factor in our great distributing system.

This transportation problem can not be waived aside. The demand for
lowered costs on farm products and basic materials can not be ignored.
Rates horizontally increased, to meet increased wage outlays during the
war inflation, are not easily reduced. When some very moderate wage
reductions were effected last summer there was a 5 per cent horizontal
reduction in rates. I sought at that time, in a very informal way, to
have the railway managers go before the Interstate Commerce Commission
and agree to a heavier reduction on farm products and coal and other
basic commodities, and leave unchanged the freight tariffs which a very
large portion of the traffic was able to bear. Neither the managers nor
the commission tile@@ suggestion, so we had the horizontal reduction saw
fit to adopt too slight to be felt by the higher class cargoes and too
little to benefit the heavy tonnage calling most loudly for relief.

Railways are not to be expected to render the most essential service in
our social organization without a air return on capital invested, but
the Government has gone so far in the regulation of rates and rules of
operation that it has the responsibility of pointing the way to the
reduced freight costs so essential to our national welfare.

Government operation does not afford the cure. It was Government
operation which brought us to the very order of things against which we
now rebel, and we are still liquidating the costs of that supreme folly.

Surely the genius of the railway builders has not become extinct among
the railway managers. New economies, new efficiencies in cooperation
must be found. The fact that labor takes 50 to 60 per cent of total
railway earnings makes limitations within which to effect economies very
difficult, but the demand is no less insistent on that account.

Clearly the managers are without that intercarrier, cooperative
relationship so highly essential to the best and most economical
operation. They could not function in harmony when the strike threatened
the paralysis of all railway transportation. The relationship of the
service to public welfare, so intimately affected by State and Federal
regulation, demands the effective correlation and a concerted drive to
meet an insistent and justified public demand.

The merger of lines into systems, a facilitated interchange of freight
cars, the economic use of terminals, and the consolidation of facilities
are suggested ways of economy and efficiency.

I remind you that Congress provided a Joint Commission of Agricultural
Inquiry which made an exhaustive investigation of car service and
transportation, and unanimously recommended in its report of October 15,
1921, the pooling of freight cars under a central agency. This report
well deserves your serious consideration. I think well of the central
agency, which shall be a creation of the railways themselves, to
provide, under the jurisdiction of the Interstate Commerce Commission,
the means for financing equipment for carriers which are otherwise
unable to provide their proportion of car equipment adequate to
transportation needs. This same agency ought to point the way to every
possible economy in maintained equipment and the necessary interchanges
in railway commerce.

In a previous address to the Congress I called to your attention the
insufficiency of power to enforce the decisions of the Railroad Labor
Board. Carriers have ignored its decisions, on the one hand, railway
workmen have challenged its decisions by a strike, on the other hand.

The intent of Congress to establish a tribunal to which railway labor
and managers may appeal respecting questions of wages and working
conditions can not be too strongly commended. It is vitally important
that some such agency should be a guaranty against suspended operation.
The public must be spared even the threat of discontinued service.

Sponsoring the railroads as we do, it is an obligation that labor shall
be assured the highest justice and every proper consideration of wage
and working conditions, but it is an equal obligation to see that no
concerted action in forcing demands shall deprive the public of the
transportation service essential to its very existence. It is now
impossible to safeguard public interest, because the decrees of the
board are unenforceable against either employer or employee.

The Labor Board itself is not so constituted as best to serve the public
interest. With six partisan members on a board of nine, three partisans
nominated by the employees and three by the railway managers, it is
inevitable that the partisan viewpoint is maintained throughout hearings
and in decisions handed down. Indeed, the few exceptions to a strictly
partisan expression in decisions thus far rendered have been followed by
accusations of betrayal of the partisan interests represented. Only the
public group of three is free to function in unbiased decisions.
Therefore the partisan membership may well be abolished, and decisions
should be made by an impartial tribunal.

I am well convinced that the functions of this tribunal could be much
better carried on here in Washington. Even were it to be continued as a
separate tribunal, there ought to be contact with the Interstate
Commerce Commission, which has supreme authority in the rate making to
which wage cost bears an indissoluble relationship Theoretically, a fair
and living wage must be determined quite apart from the employer's
earning capacity, but in practice, in the railway service, they are
inseparable. The record of advanced rates to meet increased wages, both
determined by the Government, is proof enough.

The substitution of a labor division in the Interstate Commerce
Commission made up from its membership, to hear and decide disputes
relating to wages and working conditions which have failed of adjustment
by proper committees created by the railways and their employees, offers
a more effective plan.

It need not be surprising that there is dissatisfaction over delayed
hearings and decisions by the present board when every trivial dispute
is carried to that tribunal. The law should require the railroads and
their employees to institute means and methods to negotiate between
themselves their constantly arising differences, limiting appeals to the
Government tribunal to disputes of such character as are likely to
affect the public welfare.

This suggested substitution will involve a necessary increase in the
membership of the commission, probably four, to constitute the labor
division. If the suggestion appeals to the Congress, it will be well to
specify that the labor division shall be constituted of representatives
of the four rate-making territories, thereby assuring a tribunal
conversant with the conditions which obtain in the different ratemaking
sections of the country.

I wish I could bring to you the precise recommendation for the
prevention of strikes which threaten the welfare of the people and
menace public safety. It is an impotent civilization and an inadequate
government which lacks the genius and the courage to guard against such
a menace to public welfare as we experienced last summer. You were aware
of the Government's great concern and its futile attempt to aid in an
adjustment. It will reveal the inexcusable obstinacy which was
responsible for so much distress to the country to recall now that,
though all disputes are not yet adjusted, the many settlements which
have been made were on the terms which the Government proposed in
mediation.

Public interest demands that ample power shall be conferred upon the.
labor tribunal, whether it is the present board or the suggested
substitute, to require its rulings to be accepted by both parties to a
disputed question.

Let there be no confusion about the purpose of the suggested conferment
of power to make decisions effective. There can be no denial of
constitutional rights of either railway workmen or railway managers. No
man can be denied his right to labor when and how he chooses, or cease
to labor when he so elects, but, since the Government assumes to
safeguard his interests while employed in an essential public service,
the security of society itself demands his retirement from the service
shall not be so timed and related as to effect the destruction of that
service. This vitally essential public transportation service, demanding
so much of brain and brawn, so much for efficiency and security, ought
to offer the most attractive working conditions and the highest of wages
paid to workmen in any employment.

In essentially every branch, from track repairer to the man at the
locomotive throttle, the railroad worker is responsible for the safety
of human lives and the care of vast property. His high responsibility
might well rate high his pay within the limits the traffic will bear;
but the same responsibility, plus governmental protection, may justly
deny him and his associates a withdrawal from service without a warning
or under circumstances which involve the paralysis of necessary
transportation. We have assumed so great a responsibility in necessary
regulation that we unconsciously have assumed the responsibility for
maintained service; therefore the lawful power for the enforcement of
decisions is necessary to sustain the majesty of government and to
administer to the public welfare.

During its longer session the present Congress enacted a new tariff law.
The protection of the American standards of living demanded the
insurance it provides against the distorted conditions of world commerce
The framers of the law made provision for a certain flexibility of
customs duties, whereby it is possible to readjust them as developing
conditions may require. The enactment has imposed a large responsibility
upon the Executive, but that responsibility will be discharged with a
broad mindfulness of the whole business situation. The provision itself
admits either the possible fallibility of rates or their unsuitableness
to changing conditions. I believe the grant of authority may be promptly
and discreetly exercised, ever mindful of the intent and purpose to
safeguard American industrial activity, and at the same time prevent the
exploitation of the American consumer and keep open the paths of such
liberal exchanges as do not endanger our own productivity.

No one contemplates commercial aloofness nor any other aloofness
contradictory to the best American traditions or loftiest human
purposes. Our fortunate capacity for comparative self-containment
affords the firm foundation on which to build for our own security, and
a like foundation on which to build for a future of influence and
importance in world commerce. Our trade expansion must come of capacity
and of policies of righteousness and reasonableness in till our
commercial relations.

Let no one assume that our provision for maintained good fortune at
home, and our unwillingness to assume the correction of all the ills of
the world, means a reluctance to cooperate with other peoples or to
assume every just obligation to promote human advancement anywhere in
the world.

War made its a creditor Nation. We did not seek an excess possession of
the world's gold, and we have neither desire to profit Unduly by its
possession nor permanently retain it. We do not seek to become an
international dictator because of its power.

The voice of the United States has a respectful hearing in international
councils, because we have convinced the world that we have no selfish
ends to serve, no old grievances to avenge, no territorial or other
greed to satisfy. But the voice being heard is that of good counsel, not
of dictation. It is the voice of sympathy and fraternity and
helpfulness, seeking to assist but not assume for the United States
burdens which nations must bear for themselves. We would rejoice to help
rehabilitate currency systems and facilitate all commerce which does not
drag us to the very levels of those we seek to lift up.

While I have everlasting faith in our Republic, it would be folly,
indeed, to blind ourselves to our problems at home. Abusing the
hospitality of our shores are the advocates of revolution, finding their
deluded followers among those who take on the habiliments of an American
without knowing an American soul. There is the recrudescence of
hyphenated Americanism which we thought to have been stamped out when we
committed the Nation, life and soul, to the World War.

There is a call to make the alien respect our institutions while he
accepts our hospitality. There is need to magnify the American viewpoint
to the alien who seeks a citizenship among us. There is need to magnify
the national viewpoint to Americans throughout the land. More there is a
demand for every living being in the United States to respect and abide
by the laws of the Republic. Let men who are rending the moral fiber of
the Republic through easy contempt for the prohibition law, because they
think it restricts their personal liberty, remember that they set the
example and breed a contempt for law which will ultimately destroy the
Republic.

Constitutional prohibition has been adopted by the Nation. It is the
supreme law of the land. In plain speaking, there are conditions
relating to its enforcement which savor of nation-wide scandal. It is
the most demoralizing factor in our public life.

Most of our people assumed that the adoption of the eighteenth amendment
meant the elimination of the question from our politics. On the
contrary, it has been so intensified as an issue that many voters are
disposed to make all political decisions with reference to this single
question. It is distracting the public mind and prejudicing the judgment
of the electorate.

The day is unlikely to come when the eighteenth amendment will be
repealed. The fact may as well be recognized and our course adapted
accordingly. If the statutory provisions for its enforcement are
contrary to deliberate public opinion, which I do not believe the
rigorous and literal enforcement will concentrate public attention on
any requisite modification. Such a course, conforms with the law and
saves the humiliation of the Government and the humiliation of our
people before the world, and challenges the destructive forces engaged
in widespread violation, official corruption and individual
demoralization.

The eighteenth amendment involves the concurrent authority of State and
Federal Governments, for the enforcement of the policy it defines. A
certain lack of definiteness, through division of responsibility is thus
introduced. In order to bring about a full understanding of duties and
responsibilities as thus distributed, I purpose to invite the governors
of the States and Territories, at an early opportunity, to a conference
with the Federal Executive authority. Out of the full and free
considerations which will thus be possible, it is confidently believed,
will emerge a more adequate, comprehension of the whole problem, and
definite policies of National and State cooperation in administering the
laws.

There are pending bills for the registration of the alien who has come
to our shores. I wish the passage of such an act might be expedited.
Life amid American opportunities is worth the cost of registration if it
is worth the seeking, and the Nation has the right to know who are
citizens in the making or who live among us anti share our advantages
while seeking to undermine our cherished institutions. This provision
will enable us to guard against the abuses in immigration, checking the
undesirable whose irregular Willing is his first violation of our laws.
More, it will facilitate the needed Americanizing of those who mean to
enroll as fellow citizens.

Before enlarging the immigration quotas we had better provide
registration for aliens, those now here or continually pressing for
admission, and establish our examination boards abroad, to make sure of
desirables only. By the examination abroad we could end the pathos at
our ports, when men and women find our doors closed, after long voyages
and wasted savings, because they are unfit for admission It would be
kindlier and safer to tell them before they embark.

Our program of admission and treatment of immigrants is very intimately
related to the educational policy of the Republic With illiteracy
estimated at front two-tenths of 1 per cent to less than 2 per cent in
10 of the foremost nations of Europe it rivets our attention to it
serious problem when we are reminded of a 6 per cent illiteracy in the
United States. The figures are based on the test which defines an
Illiterate as one having no schooling whatever. Remembering the wide
freedom of our public schools with compulsory attendance in many States
in the Union, one is convinced that much of our excessive illiteracy
comes to us from abroad, and the education of the immigrant becomes it
requisite to his Americanization. It must be done if he is fittingly to
exercise the duties as well as enjoy the privileges of American
citizenship. Here is revealed the special field for Federal cooperation
in furthering education.

From the very beginning public education has been left mainly in the
hands of the States. So far as schooling youth is concerned the policy
has been justified, because no responsibility can be so effective as
that of the local community alive to its task. I believe in the
cooperation of the national authority to stimulate, encourage, and
broaden the work of the local authorities. But it is the especial
obligation of the Federal Government to devise means and effectively
assist in the education of the newcomer from foreign lands, so that the
level of American education may be made the highest that is humanly
possible.

Closely related to this problem of education is the abolition of child
labor. Twice Congress has attempted the correction of the evils incident
to child employment. The decision of the Supreme Court has put this
problem outside the proper domain of Federal regulation until the
Constitution is so amended as to give the Congress indubitable
authority. I recommend the submission of such an amendment.

We have two schools of thought relating to amendment of the
Constitution. One need not be committed to the belief that amendment is
weakening the fundamental law, or that excessive amendment is essential
to meet every ephemeral whim. We ought to amend to meet the demands of
the people when sanctioned by deliberate public opinion.

One year ago I suggested the submission of an amendment so that we may
lawfully restrict the issues of tax-exempt securities, and I renew that
recommendation now. Tax-exempt securities are drying up the sources of
Federal taxation and they are encouraging unproductive and extravagant
expenditures by States and municipalities. There is more than the menace
in mounting public debt, there is the dissipation of capital which
should be made available to the needs of productive industry. The
proposed amendment will place the State and Federal Governments and all
political subdivisions on an exact equality, and will correct the
growing menace of public borrowing, which if left unchecked may soon
threaten the stability of our institutions.

We are so vast and so varied in our national interests that scores of
problems are pressing for attention. I must not risk the wearying of
your patience with detailed reference.

Reclamation and irrigation projects, where waste land may be made
available for settlement and productivity, are worthy of your favorable
consideration.

When it is realized that we are consuming our timber four times as
rapidly as we are growing it, we must encourage the greatest possible
cooperation between the Federal Government, the various States, and the
owners of forest lands, to the end that protection from fire shall be
made more effective and replanting encouraged.

The fuel problem is under study now by a very capable fact-finding
commission, and any attempt to deal with the coal problem, of such deep
concern to the entire Nation, must await the report of the commission.

There are necessary studies of great problems which Congress might well
initiate. The wide spread between production costs and prices which
consumers pay concerns every citizen of the Republic. It contributes
very largely to the unrest in agriculture and must stand sponsor for
much against which we inveigh in that familiar term--the high cost of
living.

No one doubts the excess is traceable to the levy of the middleman, but
it would be unfair to charge him with all responsibility before we
appraise what is exacted of him by our modernly complex life. We have
attacked the problem on one side by the promotion of cooperative
marketing, and we might well inquire into the benefits of cooperative
buying. Admittedly, the consumer is much to blame himself, because of
his prodigal expenditure and his exaction of service, but Government
might well serve to point the way of narrowing the spread of price,
especially between the production of food and its consumption.

A superpower survey of the eastern industrial region has recently been
completed, looking to unification of steam, water, and electric powers,
and to a unified scheme of power distribution. The survey proved that
vast economies in tonnage movement of freights, and in the efficiency of
the railroads, would be effected if the superpower program were adopted.
I am convinced that constructive measures calculated to promote such an
industrial development--I am tempted to say, such an industrial
revolution-would be well worthy the careful attention and fostering
interest of the National Government.

The proposed survey of a plan to draft all the resources of the
Republic, human and material, for national defense may well have your
approval. I commended such a program in case of future war, in the
inaugural address. of March 4, 1921, and every experience in the
adjustment and liquidation of war claims and the settlement of war
obligations persuades me we ought to be prepared for such universal call
to armed defense.

I bring you no apprehension of war. The world is abhorrent of it, and
our own relations are not only free from every threatening cloud, but we
have contributed our larger influence toward making armed conflict less
likely.

Those who assume that we played our part in the World War and later took
ourselves aloof and apart, unmindful of world obligations, give scant
credit to the helpful part we assume in international relationships.

Whether all nations signatory ratify all the treaties growing out of the
Washington Conference on Limitation of Armament or some withhold
approval, the underlying policy of limiting naval armament has the
sanction of the larger naval powers, and naval competition is suspended.
Of course, unanimous ratification is much to be desired.

The four-power pact, which abolishes every probability of war on the
Pacific, has brought new confidence in a maintained peace, and I can
well believe it might be made a model for like assurances wherever in
the world any common interests are concerned.

We have had expressed the hostility of the American people to a
supergovernment or to any commitment where either a council or an
assembly of leagued powers may chart our course. Treaties of armed
alliance can have no likelihood of American sanction, but we believe in
respecting the rights of nations, in the value of conference and
consultation, in the effectiveness of leaders of nations looking each
other in the face ace before resorting to the arbitrament of arms.

It has been our fortune both to preach and promote international
understanding. The influence of the United States in bringing near the
settlement of an ancient dispute between South American nations is added
proof of the glow of peace in ample understanding. In Washington to-day
are met the delegates of the Central American nations, gathered at the
table of international understanding, to stabilize their Republics and
remove every vestige of disagreement. They are met here by our
invitation, not in our aloofness, and they accept our hospitality
because they have faith in our unselfishness and believe in our
helpfulness. Perhaps we are selfish in craving their confidence and
friendship, but such a selfishness we proclaim to the world, regardless
of hemisphere, or seas dividing.

I would like the Congress and the people of the Nation to believe that
in a firm and considerate way we are insistent on American rights
wherever they may be questioned, and deny no rights of others in the
assertion of our own. Moreover we are cognizant of the world's struggles
for full readjustment and rehabilitation, and we have shirked no duty
which comes of sympathy, or fraternity, or highest fellowship among
nations. Every obligation consonant with American ideals and sanctioned
under our form of government is willingly met. When we can not support
we do not demand. Our constitutional limitations do not forbid the
exercise of a moral influence, the measure of which is not less than the
high purposes we have sought to serve.

After all there is less difference about the part this great Republic
shall play in furthering peace and advancing humanity than in the manner
of playing it. We ask no one to assume responsibility for us; we assume
no responsibility which others must bear for themselves, unless
nationality is hopelessly swallowed up in internationalism.

***

State of the Union Address
Calvin Coolidge
December 6, 1923

Since the close of the last Congress the Nation has lost President
Harding. The world knew his kindness and his humanity, his greatness and
his character. He has left his mark upon history. He has made justice
more certain and peace more secure. The surpassing tribute paid to his
memory as he was borne across the continent to rest at last at home
revealed the place he held in the hearts of the American people. But
this is not the occasion for extended reference to the man or his work.
In this presence, among these who knew and loved him, that is
unnecessary. But we who were associated with him could not resume
together the functions of our office without pausing for a moment, and
in his memory reconsecrating ourselves to the service of our country. He
is gone. We remain. It is our duty, under the inspiration of his
example, to take up the burdens which he was permitted to lay down, and
to develop and support the wise principles of government which he
represented.

FOREIGN AFFAIRS

For us peace reigns everywhere. We desire to perpetuate it always by
granting full justice to others and requiring of others full justice to
ourselves.

Our country has one cardinal principle to maintain in its foreign
policy. It is an American principle. It must be an American policy. We
attend to our own affairs, conserve our own strength, and protect the
interests of our own citizens; but we recognize thoroughly our
obligation to help others, reserving to the decision of our own Judgment
the time, the place, and the method. We realize the common bond of
humanity. We know the inescapable law of service.

Our country has definitely refused to adopt and ratify the covenant of
the League of Nations. We have not felt warranted in assuming the
responsibilities which its members have assumed. I am not proposing any
change in this policy; neither is the Senate. The incident, so far as we
are concerned, is closed. The League exists as a foreign agency. We hope
it will be helpful. But the United States sees no reason to limit its
own freedom and independence of action by joining it. We shall do well
to recognize this basic fact in all national affairs and govern
ourselves accordingly.

WORLD COURT

Our foreign policy has always been guided by two principles. The one is
the avoidance of permanent political alliances which would sacrifice our
proper independence. The other is the peaceful settlement of
controversies between nations. By example and by treaty we have
advocated arbitration. For nearly 25 years we have been a member of The
Hague Tribunal, and have long sought the creation of a permanent World
Court of Justice. I am in full accord with both of these policies. I
favor the establishment of such a court intended to include the whole
world. That is, and has long been, an American policy.

Pending before the Senate is a proposal that this Government give its
support to the Permanent Court of International Justice, which is a new
and somewhat different plan. This is not a partisan question. It should
not assume an artificial importance. The court is merely a convenient
instrument of adjustment to which we could go, but to which we could not
be brought. It should be discussed with entire candor, not by a
political but by a judicial method, without pressure and without
prejudice. Partisanship has no place in our foreign relations. As I wish
to see a court established, and as the proposal presents the only
practical plan on which many nations have ever agreed, though it may not
meet every desire, I therefore commend it to the favorable consideration
of the Senate, with the proposed reservations clearly indicating our
refusal to adhere to the League of Nations.

RUSSIA

Our diplomatic relations, lately so largely interrupted, are now being
resumed, but Russia presents notable difficulties. We have every desire
to see that great people, who are our traditional friends, restored to
their position among the nations of the earth. We have relieved their
pitiable destitution with an enormous charity. Our Government offers no
objection to the carrying on of commerce by our citizens with the people
of Russia. Our Government does not propose, however, to enter into
relations with another regime which refuses to recognize the sanctity of
international obligations. I do not propose to barter away for the
privilege of trade any of the cherished rights of humanity. I do not
propose to make merchandise of any American principles. These rights and
principles must go wherever the sanctions of our Government go.

But while the favor of America is not for sale, I am willing to make
very large concessions for the purpose of rescuing the people of Russia.
Already encouraging evidences of returning to the ancient ways of
society can be detected. But more are needed. Whenever there appears any
disposition to compensate our citizens who were despoiled, and to
recognize that debt contracted with our Government, not by the Czar, but
by the newly formed Republic of Russia; whenever the active spirit of
enmity to our institutions is abated; whenever there appear works mete
for repentance; our country ought to be the first to go to the economic
and moral rescue of Russia. We have every desire to help and no desire
to injure. We hope the time is near at hand when we can act.

DEBTS

The current debt and interest due from foreign Governments, exclusive of
the British debt of $4,600,000,000, is about $7,200,000,000. I do not
favor the cancellation of this debt, but I see no objection to adjusting
it in accordance with the principle adopted for the British debt. Our
country would not wish to assume the role of an oppressive creditor, but
would maintain the principle that financial obligations between nations
are likewise moral obligations which international faith and honor
require should be discharged.

Our Government has a liquidated claim against Germany for the expense of
the army of occupation of over $255,000,000. Besides this, the Mixed
Claims Commission have before them about 12,500 claims of American
citizens, aggregating about $1,225,000,000. These claims have already
been reduced by a recent decision, but there are valid claims reaching
well toward $500,000,000. Our thousands of citizens with credits due
them of hundreds of millions of dollars have no redress save in the
action of our Government. These are very substantial interests, which it
is the duty of our Government to protect as best it can. That course I
propose to pursue.

It is for these reasons that we have a direct interest in the economic
recovery of Europe. They are enlarged by our desire for the stability of
civilization and the welfare of humanity. That we are making sacrifices
to that end none can deny. Our deferred interest alone amounts to a
million dollars every day. But recently we offered to aid with our
advice and counsel. We have reiterated our desire to see France paid and
Germany revived. We have proposed disarmament. We have earnestly sought
to compose differences and restore peace. We shall persevere in
well-doing, not by force, but by reason.

FOREIGN PAPERS

Under the law the papers pertaining to foreign relations to be printed
are transmitted as a part of this message. Other volumes of these papers
will follow.

FOREIGN SERVICE

The foreign service of our Government needs to be reorganized and
improved.

FISCAL CONDITION

Our main problems are domestic problems. Financial stability is the
first requisite of sound government. We can not escape the effect of
world conditions. We can not avoid the inevitable results of the
economic disorders which have reached all nations. But we shall diminish
their harm to us in proportion as we continue to restore our Government
finances to a secure and endurable position. This we can and must do.
Upon that firm foundation rests the only hope of progress and
prosperity. From that source must come relief for the people.

This is being, accomplished by a drastic but orderly retrenchment, which
is bringing our expenses within our means. The origin of this has been
the determination of the American people, the main support has been the
courage of those in authority, and the effective method has been the
Budget System. The result has involved real sacrifice by department
heads, but it has been made without flinching. This system is a law of
the Congress. It represents your will. It must be maintained, and ought
to be strengthened by the example of your observance. Without a Budget
System there can be no fixed responsibility and no constructive
scientific economy.

This great concentration of effort by the administration and Congress
has brought the expenditures, exclusive of the self-supporting Post.
Office Department, down to three billion dollars. It is possible, in
consequence, to make a large reduction in the taxes of the people, which
is the sole object of all curtailment. This is treated at greater length
in the Budget message, and a proposed plan has been presented in detail
in a statement by the Secretary of the Treasury which has my unqualified
approval. I especially commend a decrease on earned incomes, and further
abolition of admission, message, and nuisance taxes. The amusement and
educational value of moving pictures ought not to be taxed. Diminishing
charges against moderate incomes from investment will afford immense
relief, while a revision of the surtaxes will not only provide
additional money for capital investment, thus stimulating industry and
employing more but will not greatly reduce the revenue from that source,
and may in the future actually increase it.

Being opposed to war taxes in time of peace, I am not in favor of
excess-profits taxes. A very great service could be rendered through
immediate enactment of legislation relieving the people of some of the
burden of taxation. To reduce war taxes is to give every home a better
chance.

For seven years the people have borne with uncomplaining courage the
tremendous burden of national and local taxation. These must both be
reduced. The taxes of the Nation must be reduced now as much as prudence
will permit, and expenditures must be reduced accordingly. High taxes
reach everywhere and burden everybody. They gear most heavily upon the
poor. They diminish industry and commerce. They make agriculture
unprofitable. They increase the rates on transportation. They are a
charge on every necessary of life. Of all services which the Congress
can render to the country, I have no hesitation in declaring t neglect
it, to postpone it, to obstruct it by unsound proposals, is to become
unworthy of public confidence and untrue to public trust. The country
wants this measure to have the right of way over an others.

Another reform which is urgent in our fiscal system is the abolition of
the right to issue tax-exempt securities. The existing system not only
permits a large amount of the wealth of the Notion to escape its just
burden but acts as a continual stimulant to municipal extravagance. This
should be prohibited by constitutional amendment. All the wealth of the
Nation ought to contribute its fair share to the expenses of the Nation.

TARIFF TAW

The present tariff law has accomplished its two main objects. It has
secured an abundant revenue and been productive of an abounding
prosperity. Under it the country has had a very large export and import
trade. A constant revision of the tariff by the Congress is disturbing
and harmful. The present law contains an elastic provision authorizing
the President to increase or decrease present schedules not in excess of
50 per centum to meet the difference in cost of production at home and
abroad. This does not, to my mind, warrant a rewriting g of the whole
law, but does mean, and will be so administered, that whenever the
required investigation shows that inequalities of sufficient importance
exist in any schedule, the power to change them should and will be
applied.

SHIPPING

The entire well being of our country is dependent upon transportation by
sea and land. Our Government during the war acquired a large merchant
fleet which should be transferred, as soon as possible, to private
ownership and operation under conditions which would secure two results:
First, and of prime importance, adequate means for national defense;
second, adequate service to American commerce. Until shipping conditions
are such that our fleet can be disposed of advantageously under these
conditions, it will be operated as economically as possible under such
plans as may be devised from time to time by the Shipping Board. We must
have a merchant marine which meets these requirements, and we shall have
to pay the cost of its service.

PUBLIC IMPROVEMENTS

The time has come to resume in a moderate way the opening of our
intracoastal waterways; the control of flood waters of the Mississippi
and of the Colorado Rivers; the improvement of the waterways from the
Great Lakes toward the Gulf of Mexico; and the development of the great
power and navigation project of the St. Lawrence River, for which
efforts are now being made to secure the necessary treaty with Canada.
These projects can not all be undertaken at once, but all should have
the immediate consideration of the Congress and be adopted as fast as
plans can be matured and the necessary funds become available. This is
not incompatible with economy, for their nature does not require so much
a public expenditure as a capital investment which will be reproductive,
as evidenced by the marked increase in revenue from the Panama Canal.
Upon these projects depend much future industrial and agricultural
progress. They represent the protection of large areas from flood and
the addition of a great amount of cheap power and cheap freight by use
of navigation, chief of which is the bringing of ocean-going ships to
the Great Lakes.

Another problem of allied character is the superpower development of the
Northeastern States, consideration of which is growing under the
direction of the Department of Commerce by joint conference with the
local authorities.

RAILROADS

Criticism of the railroad law has been directed, first, to the section
laying down the rule by which rates are fixed, and providing for payment
to the Government and use of excess earnings; second, to the method for
the adjustment of wage scales; and third, to the authority permitting
consolidations.

It has been erroneously assumed that the act undertakes to guarantee
railroad earnings. The law requires that rates should be just and
reasonable. That has always been the rule under which rates have been
fixed. To make a rate that does not yield a fair return results in
confiscation, and confiscatory rates are of course unconstitutional.
Unless the Government adheres to the rule of making a rate that will
yield a fair return, it must abandon rate making altogether. The new and
important feature of that part of the law is the recapture and
redistribution of excess rates. The constitutionality of this method is
now before the Supreme Court for adjudication. Their decision should be
awaited before attempting further legislation on this subject.
Furthermore, the importance of this feature will not be great if
consolidation goes into effect.

The settlement of railroad labor disputes is a matter of grave public
concern. The Labor Board was established to protect the public in the
enjoyment of continuous service by attempting to insure justice between
the companies and their employees. It has been a great help, but is not
altogether satisfactory to the public, the employees, or the companies.
If a substantial agreement can be reached among the groups interested,
there should be no hesitation in enacting such agreement into law. If it
is not reached, the Labor Board may very well be left for the present to
protect the public welfare.

The law for consolidations is not sufficiently effective to be
expeditious. Additional legislation is needed giving authority for
voluntary consolidations, both regional and route, and providing
Government machinery to aid and stimulate such action, always subject to
the approval of the Interstate Commerce Commission. This should
authorize the commission to appoint committees for each proposed group,
representing the public and the component roads, with power to negotiate
with individual security holders for an exchange of their securities for
those of the, consolidation on such terms and conditions as the
commission may prescribe for avoiding any confiscation and preserving
fair values. Should this permissive consolidation prove ineffective
after a limited period, the authority of the Government will have to be
directly invoked.

Consolidation appears to be the only feasible method for the maintenance
of an adequate system of transportation with an opportunity so to adjust
freight rates as to meet such temporary conditions as now prevail in
some agricultural sections. Competent authorities agree that an entire
reorganization of the rate structure for freight is necessary. This
should be ordered at once by the Congress.

DEPARTMENT OF JUSTICE

As no revision of the laws of the United States has been made since
1878, a commission or committee should be created to undertake this
work. The Judicial Council reports that two more district judges are
needed in the southern district of New York, one in the northern
district of Georgia, and two more circuit judges in the Circuit Court of
Appeals of the Eighth Circuit. Legislation should be considered for this
purpose.

It is desirable to expedite the hearing and disposal of cases. A
commission of Federal judges and lawyers should be created to recommend
legislation by which the procedure in the Federal trial courts may be
simplified and regulated by rules of court, rather than by statute; such
rules to be submitted to the Congress and to be in force until annulled
or modified by the Congress. The Supreme Court needs legislation
revising and simplifying the laws governing review by that court, and
enlarging the classes of cases of too little public importance to be
subject to review. Such reforms would expedite the transaction of the
business of the courts. The administration of justice is likely to fail
if it be long delayed.

The National Government has never given adequate attention to its prison
problems. It ought to provide employment in such forms of production as
can be used by the Government, though not sold to the public in
competition with private business, for all prisoners who can be placed
at work, and for which they should receive a reasonable compensation,
available for their dependents.

Two independent reformatories are needed; one for the segregation of
women, and another for the segregation of young men serving their first
sentence.

The administration of justice would be facilitated greatly by including
in the Bureau of Investigation of the Department of Justice a Division
of Criminal Identification, where there would be collected this
information which is now indispensable in the suppression of crime.

PROHIBITION

The prohibition amendment to the Constitution requires the Congress. and
the President to provide adequate laws to prevent its violation. It is
my duty to enforce such laws. For that purpose a treaty is being
negotiated with Great Britain with respect to the right of search of
hovering vessels. To prevent smuggling, the Coast Card should be greatly
strengthened, and a supply of swift power boats should be provided. The
major sources of production should be rigidly regulated, and every
effort should be made to suppress interstate traffic. With this action
on the part of the National Government, and the cooperation which is
usually rendered by municipal and State authorities, prohibition should
be made effective. Free government has no greater menace than disrespect
for authority and continual violation of law. It is the duty of a
citizen not only to observe the law but to let it be known that he is
opposed to its violation.

THE NEGRO

Numbered among our population are some 12,000,000 colored people. Under
our Constitution their rights are just as sacred as those of any other
citizen. It is both a public and a private duty to protect those rights.
The Congress ought to exercise all its powers of prevention and
punishment against the hideous crime of lynching, of which the negroes
are by no means the sole sufferers, but for which they furnish a
majority of the victims.

Already a considerable sum is appropriated to give the negroes
vocational training in agriculture. About half a million dollars is
recommended for medical courses at Howard University to help contribute
to the education of 500 colored doctors needed each year. On account of
the integration of large numbers into industrial centers, it has been
proposed that a commission be created, composed of members from both
races, to formulate a better policy for mutual understanding and
confidence. Such an effort is to be commended. Everyone would rejoice in
the accomplishment of the results which it seeks. But it is well to
recognize that these difficulties are to a large extent local problems
which must be worked out by the mutual forbearance and human kindness of
each community. Such a method gives much more promise of a real remedy
than outside interference.

CIVIL SERVICE

The maintenance and extension of the classified civil service is
exceedingly important. There are nearly 550,000 persons in the executive
civil service drawing about $700,000,000 of yearly compensation.
Four-fifths of these are in the classified service. This method of
selection of the employees of the United States is especially desirable
for the Post Office Department. The Civil Service Commission has
recommended that postmasters at first, second, and third class offices
be classified. Such action, accompanied by a repeal of the four-year
term of office, would undoubtedly be an improvement. I also recommend
that the field force for prohibition enforcement be brought within the
classified civil service without covering in the present membership. The
best method for selecting public servants is the merit system.

PUBLIC BUILDINGS

Many of the departments in Washington need better housing facilities.
Some are so crowded that their work is impeded, others are so scattered
that they lose their identity. While I do not favor at this time a
general public building law, I believe it is now necessary, in
accordance with plans already sanctioned for a unified and orderly
system for the development of this city, to begin the carrying out of
those plans by authorizing the erection of three or four buildings most
urgently needed by an annual appropriation of $5,000,000.

REGULATORY LEGISLATION

Cooperation with other maritime powers is necessary for complete
protection of our coast waters from pollution. Plans for this are under
way, but await certain experiments for refuse disposal. Meantime laws
prohibiting spreading oil and oil refuse from vessels in our own
territorial waters would be most helpful against this menace and should
be speedily enacted.

Laws should be passed regulating aviation.

Revision is needed of the laws regulating radio interference.

Legislation and regulations establishing load liner, to provide safe
loading of vessels leaving our ports are necessary and recodification of
our navigation laws is vital.

Revision of procedure of the Federal Trade Commission will give more
constructive purpose to this department.

If our Alaskan fisheries are to be saved from destruction, there must be
further legislation declaring a general policy and delegating the
authority to make rules and regulations to an administrative body.

ARMY AND NAVY

For several years we have been decreasing the personnel of the Army and
Navy, and reducing their power to the danger point. Further reductions
should not be made. The Army is a guarantee of the security of our
citizens at home; the Navy is a guarantee of the security of our
citizens abroad. Both of these services should be strengthened rather
than weakened. Additional planes are needed for the Army, and additional
submarines for the Navy. The defenses of Panama must be perfected. We
want no more competitive armaments. We want no more war. But we want no
weakness that invites imposition. A people who neglect their national
defense are putting in jeopardy their national honor.

INSULAR POSSESSIONS

Conditions in the insular possessions on the whole have been good. Their
business has been reviving. They are being administered according to
law. That effort has the full support of the administration. Such
recommendations as may conic from their people or their governments
should have the most considerate attention.

EDUCATION AND WELFARE

Our National Government is not doing as much as it legitimately can do
to promote the welfare of the people. Our enormous material wealth, our
institutions, our whole form of society, can not be considered fully
successful until their benefits reach the merit of every individual.
This is not a suggestion that the Government should, or could, assume
for the people the inevitable burdens of existence. There is no method
by which we can either be relieved of the results of our own folly or be
guaranteed a successful life. There is an inescapable personal
responsibility for the development of character, of industry, of thrift,
and of self-control. These do not come from the Government, but from the
people themselves. But the Government can and should always be
expressive of steadfast determination, always vigilant, to maintain
conditions under which these virtues are most likely to develop and
secure recognition and reward. This is the American policy.

It is in accordance with this principle that we have enacted laws for
the protection of the public health and have adopted prohibition in
narcotic drugs and intoxicating liquors. For purposes of national
uniformity we ought to provide, by constitutional amendment and
appropriate legislation, for a limitation of child labor, and in all
cases under the exclusive jurisdiction of the Federal Government a
minimum wage law for women, which would undoubtedly find sufficient
power of enforcement in the influence of public opinion.

Having in mind that education is peculiarly a local problem, and that it
should always be pursued with the largest freedom of choice by students
and parents, nevertheless, the Federal Government might well give the
benefit of its counsel and encouragement more freely in this direction.
If anyone doubts the need of concerted action by the States of the
Nation for this purpose, it is only necessary to consider the appalling
figures of illiteracy representing a condition which does not vary much
in all parts of the Union. I do not favor the making of appropriations
from the National Treasury to be expended directly on local education,
but I do consider it a fundamental requirement of national activity
which, accompanied by allied subjects of welfare, is worthy of a
separate department and a place in the Cabinet. The humanitarian side of
government should not be repressed, but should be cultivated.

Mere intelligence, however, is not enough. Enlightenment must be
accompanied by that moral power which is the product of the home and of
rebellion. Real education and true welfare for the people rest
inevitably on this foundation, which the Government can approve and
commend, but which the people themselves must create.

IMMIGRATION

American institutions rest solely on good citizenship. They were created
by people who had a background of self-government. New arrivals should
be limited to our capacity to absorb them into the ranks of good
citizenship. America must be kept American. For this purpose, it is
necessary to continue a policy of restricted immigration. It would be
well to make such immigration of a selective nature with some inspection
at the source, and based either on a prior census or upon the record of
naturalization. Either method would insure the admission of those with
the largest capacity and best intention of becoming citizens. I am
convinced that our present economic and social conditions warrant a
limitation of those to be admitted. We should find additional safety in
a law requiring the immediate registration of all aliens. Those who do
not want to be partakers of the American spirit ought not to settle in
America.

VETERANS

No more important duty falls on the Government of the United States than
the adequate care of its veterans. Those suffering disabilities incurred
in the service must have sufficient hospital relief and compensation.
Their dependents must be supported. Rehabilitation and vocational
training must be completed. All of this service must be clean, must be
prompt and effective, and it must be administered in a spirit of the
broadest and deepest human sympathy. If investigation reveals any
present defects of administration or need Of legislation, orders will be
given for the immediate correction of administration, and
recommendations for legislation should be given the highest preference.

At present there are 9,500 vacant beds in Government hospitals, I
recommend that all hospitals be authorized at once to receive and care
for, without hospital pay, the veterans of all wars needing such care,
whenever there are vacant beds, and that immediate steps be taken to
enlarge and build new hospitals to serve all such cases.

The American Legion will present to the Congress a legislative program
too extensive for detailed discussion here. It is a carefully matured
plan. While some of it I do not favor, with much of it I am in hearty
accord, and I recommend that a most painstaking effort be made to
provide remedies for any defects in the administration of the present
laws which their experience has revealed. The attitude of the Government
toward these proposals should be one of generosity. But I do not favor
the granting of a bonus.

COAL

The cost of coal has become unbearably high. It places a great burden on
our industrial and domestic life. The public welfare requires a
reduction in the price of fuel. With the enormous deposits in existence,
failure of supply ought not to be tolerated. Those responsible for the
conditions in this industry should undertake its reform and free it from
any charge of profiteering.

The report of the Coal Commission will be before the Congress. It
comprises all the facts. It represents the mature deliberations and
conclusions of the best talent and experience that ever made a national
survey of the production and distribution of fuel. I do not favor
Government ownership or operation of coal mines. The need is for action
under private ownership that will secure greater continuity of
production and greater public protection. The Federal Government
probably has no peacetime authority to regulate wages, prices, or
profits in coal at the mines or among dealers, but by ascertaining and
publishing facts it can exercise great influence.

The source of the difficulty in the bituminous coal fields is the
intermittence of operation which causes great waste of both capital and
labor. That part of the report dealing with this problem has much
significance, and is suggestive of necessary remedies. By amending, the
car rules, by encouraging greater unity of ownership, and possibly by
permitting common selling agents for limited districts on condition that
they accept adequate regulations and guarantee that competition between
districts be unlimited, distribution, storage, and continuity ought to
be improved.

The supply of coal must be constant. In case of its prospective
interruption, the President should have authority to appoint a
commission empowered to deal with whatever emergency situation might
arise, to aid conciliation and voluntary arbitration, to adjust any
existing or threatened controversy between the employer and the employee
when collective bargaining fails, and by controlling distribution to
prevent profiteering in this vital necessity. This legislation is
exceedingly urgent, and essential to the exercise of national authority
for the protection of the people. Those who undertake the responsibility
of management or employment in this industry do so with the full
knowledge that the public interest is paramount, and that to fail
through any motive of selfishness in its service is such a betrayal of
duty as warrants uncompromising action by the Government.

REORGANIZATION

A special joint committee has been appointed to work out a plan for a
reorganization of the different departments and bureaus of the
Government more scientific and economical than the present system. With
the exception of the consolidation of the War and Navy Departments and
some minor details, the plan has the general sanction of the President
and the Cabinet. It is important that reorganization be enacted into law
at the present session.

AGRICULTURE

Aided by the sound principles adopted by the Government, the business of
the country has had an extraordinary revival. Looked at as a whole, the
Nation is in the enjoyment of remarkable prosperity. Industry and
commerce are thriving. For the most tart agriculture is successful,
eleven staples having risen in value from about $5,300,000,000 two years
ago to about. $7,000,000,000 for the current year. But range cattle are
still low in price, and some sections of the wheat area, notably
Minnesota, North Dakota, and on west, have many cases of actual
distress. With his products not selling on a parity with the products of
industry, every sound remedy that can be devised should be applied for
the relief of the farmer. He represents a character, a type of
citizenship, and a public necessity that must be preserved and afforded
every facility for regaining prosperity.

The distress is most acute among those wholly dependent upon one crop..
Wheat acreage was greatly expanded and has not yet been sufficiently
reduced. A large amount is raised for export, which has to meet the
competition in the world market of large amounts raised on land much
cheaper and much more productive.

No complicated scheme of relief, no plan for Government fixing of
prices, no resort to the public Treasury will be of any permanent value
in establishing agriculture. Simple and direct methods put into
operation by the farmer himself are the only real sources for
restoration.

Indirectly the farmer must be relieved by a reduction of national and
local taxation. He must be assisted by the reorganization of the
freight-rate structure which could reduce charges on his production. To
make this fully effective there ought to be railroad consolidations.
Cheaper fertilizers must be provided.

He must have organization. His customer with whom he exchanges products
o he farm for those of industry is organized, labor is organized,
business is organized, and there is no way for agriculture to meet this
unless it, too, is organized. The acreage of wheat is too large. Unless
we can meet the world market at a profit, we must stop raising for
export. Organization would help to reduce acreage. Systems of
cooperative marketing created by the farmers themselves, supervised by
competent management, without doubt would be of assistance, but, the can
not wholly solve the problem. Our agricultural schools ought to have
thorough courses in the theory of organization and cooperative
marketing.

Diversification is necessary. Those farmers who raise their living on
their land are not greatly in distress. Such loans as are wisely needed
to assist buying stock and other materials to start in this direction
should be financed through a Government agency as a temporary and
emergency expedient.

The remaining difficulty is the disposition of exportable wheat. I do
not favor the permanent interference of the Government in this problem.
That probably would increase the trouble by increasing production. But
it seems feasible to provide Government assistance to exports, and
authority should be given the War Finance Corporation to grant, in its
discretion, the most liberal terms of payment for fats and grains
exported for the direct benefit of the farm.

MUSCLE SHOALS

The Government is undertaking to develop a great water-power project
known as Muscle Shoals, on which it has expended many million dollars.
The work is still going on. Subject to the right to retake in time of
war, I recommend that this property with a location for auxiliary steam
plant and rights of way be sold. This would end the present burden of
expense and should return to the Treasury the largest price possible to
secure.

While the price is an important element, there is another consideration
even more compelling. The agriculture of the Nation needs a greater
supply and lower cost of fertilizer. This is now imported in large
quantities. The best information I can secure indicates that present
methods of power production would not be able profitably to meet the
price at which these imports can be sold. To obtain a supply from this
water power would require long and costly experimentation to perfect a
process for cheap production. Otherwise our purpose would fail
completely. It seems desirable, therefore, in order to protect and
promote the public welfare, to have adequate covenants that such
experimentation be made and carried on to success. The great advantage
of low-priced nitrates must be secured for the direct benefit of the
farmers and the indirect benefit of the public in time of peace, and of
the Government in time of war. If this main object be accomplished, the
amount of money received for the property is not a primary or major
consideration.

Such a solution will involve complicated negotiations, and there is no
authority for that purpose. I therefore recommend that the Congress
appoint a small joint committee to consider offers, conduct
negotiations, and report definite recommendations.

RECLAMATION

By reason of many contributing causes, occupants of our reclamation
projects are in financial difficulties, which in some cases are acute.
Relief should be granted by definite authority of law empowering the
Secretary of the Interior in his discretion to suspend, readjust, and
reassess all charges against water users. This whole question is being
considered by experts. You will have the advantage of the facts and
conclusions which they may develop. This situation, involving a
Government investment of more than $135,000,000, and affecting more than
30,000 water users, is serious. While relief which is necessary should
be granted, yet contracts with the Government which can be met should be
met. The established general policy of these projects should not be
abandoned for any private control.

HIGHWAYS AND FORESTS

Highways and reforestation should continue to have the interest and
support of the Government. Everyone is anxious for good highways. I have
made a liberal proposal in the Budget for the continuing payment to the
States by the Federal Government of its share for this necessary public
improvement. No expenditure of public money contributes so much to the
national wealth as for building good roads.

Reforestation has an importance far above the attention it usually
secures. A special committee of the Senate is investigating this need,
and I shall welcome a constructive policy based on their report.

It is 100 years since our country announced the Monroe doctrine. This
principle has been ever since, and is now, one of the main foundations
of our foreign relations. It must be maintained. But in maintaining it
we must not be forgetful that a great change has taken place. We are no
longer a weak Nation, thinking mainly of defense, dreading foreign
imposition. We are great and powerful. New powers bring new
responsibilities. Our ditty then was to protect ourselves. Added to
that, our duty now is to help give stability to the world. We want
idealism. We want that vision which lifts men and nations above
themselves. These are virtues by reason of their own merit. But they
must not be cloistered; they must not be impractical; they must not be
ineffective.

The world has had enough of the curse of hatred and selfishness, of
destruction and war. It has had enough of the wrongful use of material
power. For the healing of the nations there must be good will and
charity, confidence and peace. The time has come for a more practical
use of moral power, and more reliance upon the principle that right
makes its own might. Our authority among the nations must be represented
by justice and mercy. It is necessary not only to have faith, but to
make sacrifices for our faith. The spiritual forces of the world make
all its final determinations. It is with these voices that America
should speak. Whenever they declare a righteous purpose there need be no
doubt that they will be heard. America has taken her place in the world
as a Republic--free, independent, powerful. The best service that can be
rendered to humanity is the assurance that this place will be
maintained.

***

State of the Union Address
Calvin Coolidge
December 3, 1924

To the Congress of the United States:

The present state of the Union, upon which it is customary for the
President to report to the Congress under the provisions of the
Constitution, is such that it may be regarded with encouragement and
satisfaction by every American. Our country is almost unique in its
ability to discharge fully and promptly all its obligations at home and
abroad, and provide for all its inhabitants an increase in material
resources, in intellectual vigor and in moral power. The Nation holds a
position unsurpassed in all former human experience. This does not mean
that we do not have any problems. It is elementary that the increasing
breadth of our experience necessarily increases the problems of our
national life. But it does mean that if all will but apply ourselves
industriously and honestly, we have ample powers with which to meet our
problems and provide for I heir speedy solution. I do not profess that
we can secure an era of perfection in human existence, but we can
provide an era of peace and prosperity, attended with freedom and
justice and made more and more satisfying by the ministrations of the
charities and humanities of life.

Our domestic problems are for the most part economic. We have our
enormous debt to pay, and we are paying it. We have the high cost of
government to diminish, and we are diminishing it. We have a heavy
burden of taxation to reduce, and we are reducing it. But while
remarkable progress has been made in these directions, the work is yet
far from accomplished. We still owe over $21,000,000,000, the cost of
the National Government is still about $3,500,000,000, and the national
taxes still amount to about $27 for each one of our inhabitants. There
yet exists this enormous field for the application of economy.

In my opinion the Government can do more to remedy the economic ills of
the people by a system of rigid economy in public expenditure than can
be accomplished through any other action. The costs of our national and
local governments combined now stand at a sum close to $100 for each
inhabitant of the land. A little less than one-third of this is
represented by national expenditure, and a little more than two-thirds
by local expenditure. It is an ominous fact that only the National
Government is reducing its debt. Others are increasing theirs at about
$1,000,000,000 each year. The depression that overtook business, the
disaster experienced in agriculture, the lack of employment and the
terrific shrinkage in all values which our country experienced in a most
acute form in 1920, resulted in no small measure from the prohibitive
taxes which were then levied on all productive effort. The establishment
of a system of drastic economy in public expenditure, which has enabled
us to pay off about one-fifth of the national debt since 1919, and
almost cut in two the national tax burden since 1921, has been one of
the main causes in reestablishing a prosperity which has come to include
within its benefits almost every one of our inhabitants. Economy reaches
everywhere. It carries a blessing to everybody.

The fallacy of the claim that the costs of government are borne by the
rich and those who make a direct contribution to the National Treasury
can not be too often exposed. No system has been devised, I do not think
any system could be devised, under which any person living in this
country could escape being affected by the cost of our government. It
has a direct effect both upon the rate and the purchasing power of
wages. It is felt in the price of those prime necessities of existence,
food, clothing, fuel and shelter. It would appear to be elementary that
the more the Government expends the more it must require every producer
to contribute out of his production to the Public Treasury, and the less
he will have for his own benefit. The continuing costs of public
administration can be met in only one way--by the work of the people.
The higher they become, the more the people must work for the
Government. The less they are, the more the people can work for
themselves.

The present estimated margin between public receipts and expenditures
for this fiscal year is very small. Perhaps the most important work that
this session of the Congress can do is to continue a policy of economy
and further reduce the cost of government, in order that we may have a
reduction of taxes for the next fiscal year. Nothing is more likely to
produce that public confidence which is the forerunner and the mainstay
of prosperity, encourage and enlarge business opportunity with ample
opportunity for employment at good wages, provide a larger market for
agricultural products, and put our country in a stronger position to be
able to meet the world competition in trade, than a continuing policy of
economy. Of course necessary costs must be met, proper functions of the
Government performed, and constant investments for capital account and
reproductive effort must be carried on by our various departments. But
the people must know that their Government is placing upon them no
unnecessary burden.

TAXES

Everyone desires a reduction of taxes, and there is a great
preponderance of sentiment in favor of taxation reform. When I approved
the present tax law, I stated publicly that I did so in spite of certain
provisions which I believed unwise and harmful. One of the most glaring
of these was the making public of the amounts assessed against different
income-tax payers. Although that damage has now been done, I believe its
continuation to be detrimental To the public welfare and bound to
decrease public revenues, so that it ought to be repealed.

Anybody can reduce taxes, but it is not so easy to stand in the gap and
resist the passage of increasing appropriation bills which would make
tax reduction impossible. It will be very easy to measure the strength
of the attachment to reduced taxation by the power with which increased
appropriations are resisted. If at the close of the present session the
Congress has kept within the budget which I propose to present, it will
then be possible to have a moderate amount of tax reduction and all the
tax reform that the Congress may wish for during the next fiscal year.
The country is now feeling the direct stimulus which came from the
passage of the last revenue bill, and under the assurance of a
reasonable system of taxation there is every prospect of an era of
prosperity of unprecedented proportions. But it would be idle to expect
any such results unless business can continue free from excess profits
taxation and be accorded a system of surtaxes at rates which have for
their object not the punishment of success or the discouragement of
business, but the production of the greatest amount of revenue from
large incomes. I am convinced that the larger incomes of the country
would actually yield more revenue to the Government if the basis of
taxation were scientifically revised downward. Moreover the effect of
the present method of this taxation is to increase the cost of interest
on productive enterprise and to increase the burden of rent. It is
altogether likely that such reduction would so encourage and stimulate
investment that it would firmly establish our country in the economic
leadership of the world.

WATERWAYS

Meantime our internal development should go on. Provision should be made
for flood control of such rivers as the Mississippi and the Colorado,
and for the opening up of our inland waterways to commerce.
Consideration is due to the project of better navigation from the Great
Lakes to the Gulf. Every effort is being made to promote an agreement
with Canada to build the, St. Lawrence waterway. There are pending
before the Congress bills for further development of the Mississippi
Basin, for the taking over of the Cape Cod Canal in accordance with a
moral obligation which seems to have been incurred during the war, and
for the improvement of harbors on both the Pacific and the Atlantic
coasts. While this last should be divested of some of its projects and
we must proceed slowly, these bills in general have my approval. Such
works are productive of wealth and in the long run tend to a reduction
of the tax burden.

RECLAMATION

Our country has a well defined policy of reclamation established under
statutory authority. This policy should be continued and made a
self-sustaining activity administered in a manner that will meet local
requirements and bring our and lands into a profitable state of
cultivation as fast as there is a market for their products. Legislation
is pending based on the report of the Fact Finding Commission for the
proper relief of those needing extension of time in which to meet their
payments on irrigated land, and for additional amendments and reforms of
our reclamation laws, which are all exceedingly important and should be
enacted at once.

No more important development has taken place in the last year than the
beginning of a restoration of agriculture to a prosperous condition. We
must permit no division of classes in this country, with one occupation
striving to secure advantage over another. Each must proceed under open
opportunities and with a fair prospect of economic equality. The
Government can not successfully insure prosperity or fix prices by
legislative fiat. Every business has its risk and its times of
depression. It is well known that in the long run there will be a more
even prosperity and a more satisfactory range of prices under the
natural working out of economic laws than when the Government undertakes
the artificial support of markets and industries. Still we can so order
our affairs, so protect our own people from foreign competition, so
arrange our national finances, so administer our monetary system, so
provide for the extension of credits, so improve methods of
distribution, as to provide a better working machinery for the
transaction of the business of the Nation with the least possible
friction and loss. The Government has been constantly increasing its
efforts in these directions for the relief and permanent establishment
of agriculture on a sound and equal basis with other business.

It is estimated that the value of the crops for this harvest year may
reach $13,000,000,000, which is an increase of over $3,000,000,000 in
three years. It compares with $7,100,000,000 in 1913, and if we make
deduction from the figures of 1924 for the comparatively decreased value
of the dollar, the yield this year still exceeds 1913 in purchasing
power by over $1,000,000,000, and in this interval there has been no
increase in the number of farmers. Mostly by his own effort the farmer
has decreased the cost of production. A marked increase in the price of
his products and some decrease in the price of his supplies has brought
him about to a parity with the rest of the Nation. The crop area of this
season is estimated at 370,000,000 acres, which is a decline of
3,000,000 acres from last year, and 6,000,000 acres from 1919. This has
been a normal and natural application of economic laws, which has placed
agriculture on a foundation which is undeniably sound and beginning to
be satisfactory.

A decrease in the world supply of wheat has resulted in a very large
increase in the price of that commodity. The position of all
agricultural products indicates a better balanced supply, but we can not
yet conclude that agriculture is recovered from the effects of the war
period or that it is permanently on a prosperous basis. The cattle
industry has not yet recovered and in some sections has been suffering
from dry weather. Every effort must be made both by Government activity
and by private agencies to restore and maintain agriculture to a
complete normal relationship with other industries.

It was on account of past depression, and in spite of present more
encouraging conditions, that I have assembled an Agricultural Conference
made up of those who are representative of this great industry in both
its operating and economic sides. Everyone knows that the great need of
the farmers is markets. The country is not suffering on the side of
production. Almost the entire difficulty is on the side of distribution.
This reaches back, of course, to unit costs and diversification, and
many allied subjects. It is exceedingly intricate, for our domestic and
foreign trade, transportation and banking, and in fact our entire
economic system, are closely related to it. In time for action at this
session, I hope to report to the Congress such legislative remedies as
the conference may recommend. An appropriation should be made to defray
their necessary expenses.

MUSCLE SHOALS

The production of nitrogen for plant food in peace and explosives in war
is more and more important. It is one of the chief sustaining elements
of life. It is estimated that soil exhaustion each year is represented
by about 9,000,000 tons and replenishment by 5,450,000 tons. The deficit
of 3,550,000 tons is reported to represent the impairment of 118,000,000
acres of farm lands each year.

To meet these necessities the Government has been developing a water
power project at Muscle Shoals to be equipped to produce nitrogen for
explosives and fertilizer. It is my opinion that the support of
agriculture is the chief problem to consider in connection with this
property. It could by no means supply the present needs for nitrogen,
but it would help and its development would encourage bringing other
water powers into like use.

Several offers have been made for the purchase of this property.
Probably none of them represent final terms. Much costly experimentation
is necessary to produce commercial nitrogen. For that reason it is a
field better suited to private enterprise than to Government operation.
I should favor a sale of this property, or long-time lease, tinder rigid
guaranties of commercial nitrogen production at reasonable prices for
agricultural use. There would be a surplus of power for many years over
any possibility of its application to a developing manufacture of
nitrogen. It may be found advantageous to dispose of the right to
surplus power separately with such reservations as will allow its
gradual withdrawal and application to nitrogen manufacture. A
subcommittee of the Committees on Agriculture should investigate this
field and negotiate with prospective purchasers. If no advantageous
offer be made, the development should continue and the plant should be
dedicated primarily to the production of materials for the fertilization
of the soil.

RAILWAYS

The railways during the past year have made still further progress in
recuperation from the war, with large rains in efficiency and ability
expeditiously to handle the traffic of the country. We have now passed
through several periods of peak traffic without the car shortages which
so frequently in the past have brought havoc to our agriculture and
industries. The condition of many of our great freight terminals is
still one of difficulty and results in imposing, large costs on the
public for inward-bound freight, and on the railways for outward-bound
freight. Owing to the growth of our large cities and the great increase
in the volume of traffic, particularly in perishables, the problem is
not only difficult of solution, but in some cases not wholly solvable by
railway action alone.

In my message last year I emphasized the necessity for further
legislation with a view to expediting the consolidation of our rail ways
into larger systems. The principle of Government control of rates and
profits, now thoroughly imbedded in our governmental attitude toward
natural monopolies such as the railways, at once eliminates the need of
competition by small units as a method of rate adjustment. Competition
must be preserved as a stimulus to service, but this will exist and can
be increased tinder enlarged systems. Consequently the consolidation of
the railways into larger units for the purpose of securing the
substantial values to the public which will come from larger operation
has been the logical conclusion of Congress in its previous enactments,
and is also supported by the best opinion in the country. Such
consolidation will assure not only a greater element of competition as
to service, but it will afford economy in operation, greater stability
in railway earnings, and more economical financing. It opens large
possibilities of better equalization of rates between different classes
of traffic so as to relieve undue burdens upon agricultural products and
raw materials generally, which are now not possible without ruin to
small units owing to the lack of diversity of traffic. It would also
tend to equalize earnings in such fashion as to reduce the importance of
section 15A, at which criticism, often misapplied, has been directed. A
smaller number of units would offer less difficulties in labor
adjustments and would contribute much to the, solution of terminal
difficulties.

The consolidations need to be carried out with due regard to public
interest and to the rights and established life of various communities
in our country. It does not seem to me necessary that we endeavor to
anticipate any final plan or adhere to an artificial and unchangeable
project which shall stipulate a fixed number of systems, but rather we
ought to approach the problem with such a latitude of action that it can
be worked out step by step in accordance with a comprehensive
consideration of public interest. Whether the number of ultimate systems
shall be more or less seems to me can only be determined by time and
actual experience in the development of such consolidations.

Those portions of the present law contemplating consolidations ore not,
sufficiently effective in producing expeditious action and need
amplification of the authority of the Interstate Commerce Commission,
particularly in affording a period for voluntary proposals to the
commission and in supplying Government pressure to secure action after
the expiration of such a period.

There are other proposals before Congress for amending the
transportation acts. One of these contemplates a revision of the method
of valuation for rate-making purposes to be followed by a renewed
valuation of the railways. The valuations instituted by the Interstate
Commerce Commission 10 years ago have not yet been completed. They have
cost the Government an enormous sum, and they have imposed great
expenditure upon the railways, most of which has in effect come out of
the public in increased rates. This work should not be abandoned or
supplanted until its results are known and can be considered.

Another matter before the Congress is legislation affecting the labor
sections of the transportation act. Much criticism has been directed at
the workings of this section and experience has shown that some useful
amendment could be made to these provisions.

It would be helpful if a plan could be adopted which, while retaining
the practice of systematic collective bargaining with conciliation
voluntary arbitration of labor differences, could also provide
simplicity in relations and more direct local responsibility of
employees and managers. But such legislation will not meet the
requirements of the situation unless it recognizes the principle that t
e public has a right to the uninterrupted service of transportation, and
therefore a right to be heard when there is danger that the Nation may
suffer great injury through the interruption of operations because of
labor disputes. If these elements are not comprehended in proposed
legislation, it would be better to gain further experience with the
present organization for dealing with these questions before undertaking
a change.

SHIPPING BOARD

The form of the organization of the Shipping Board was based originally
on its functions as a semi judicial body in regulation of rates. During
the war it was loaded with enormous administrative duties. It has been
demonstrated time and again that this form of organization results in
indecision, division of opinion and administrative functions, which make
a wholly inadequate foundation for the conduct of a great business
enterprise. The first principle in securing the objective set out by
Congress in building up the American merchant marine upon the great
trade routes and subsequently disposing of it into private operation can
not proceed with effectiveness until the entire functions of the board
are reorganized. The immediate requirement is to transfer into the
Emergency Fleet, Corporation the whole responsibility of operation of
the fleet and other property, leaving to the Shipping Board solely the
duty of determining certain major policies which require deliberative
action.

The procedure under section 28 of the merchant marine act has created
great difficulty and threatened friction during the past 12 months. Its
attempted application developed not only great opposition from
exporters, particularly as to burdens that may be imposed upon
agricultural products, but also great anxiety in the different seaports
as to the effect upon their relative rate structures. This trouble will
certainly recur if action is attempted under this section. It is
uncertain in some of its terms and of great difficulty in
interpretation.

It is my belief that action under this section should be suspended until
the Congress can reconsider the entire question in the light of the
experience that has been developed since its enactment.

NATIONAL ELECTIONS

Nothing is so fundamental to the integrity of a republican form of
government as honesty in all that relates to the conduct of elections. I
am of the opinion that the national laws governing the choice of members
of the Congress should be extended to include appropriate representation
of the respective parties at the ballot box ant equality of
representation on the various registration boards, wherever they exist.

THE JUDICIARY

The docket of the Supreme Court is becoming congested. At the opening
term last year it had 592 cases, while this year it had 687 cases.
Justice long delayed is justice refused. Unless the court be given power
by preliminary and summary consideration to determine the importance of
cases, and by disposing of those which are not of public moment reserve
its time for the more extended consideration of the remainder, the
congestion of the docket is likely to increase. It is also desirable
that Supreme Court should have power to improve and reform procedure in
suits at law in the Federal courts through the adoption of appropriate
rules. The Judiciary Committee of the Senate has reported favorably upon
two bills providing for these reforms which should have the immediate
favorable consideration of the Congress.

I further recommend that provision be made for the appointment of a
commission, to consist of two or three members of the Federal judiciary
and as many members of the bar, to examine the present criminal code of
procedure and recommend to the Congress measures which may reform and
expedite court procedure in the administration and enforcement of our
criminal laws.

PRISON REFORM

Pending before the Congress is a bill which has already passed one House
providing for a reformatory to which could be committed first offenders
and young men for the purpose of segregating them from contact with
banned criminals and providing them with special training in order to
reestablish in them the power to pursue a law-abiding existence in the
social and economic life of the Nation. This is a matter of so much
importance as to warrant the early attention of the present session.
Further provision should also be made, for a like reason, for a separate
reformatory for women.

NATIONAL POLICE BUREAU

Representatives of the International Police Conference will bring to t e
attention of the Congress a proposal for the establishment of a national
police bureau. Such action would provide a central point for gathering,
compiling, and later distributing to local police authorities much
information which would be helpful in the prevention and detection of
crime. I believe this bureau is needed, and I recommend favorable
consideration of this proposal.

DISTRICT OF COLUMBIA WELFARE

The welfare work of the District of Columbia is administered by several
different boards dealing with charities and various correctional
efforts. It would be an improvement if this work were consolidated and
placed under the direction of a single commission.

FRENCH SPOLIATION CLAIMS

During the last session of the Congress legislation was introduced
looking to the payment of the remaining claims generally referred to as
the French spoliation claims. The Congress has provided for the payment
of many similar claims. Those that remain unpaid have been long pending.
The beneficiaries thereunder have every reason to expect payment. These
claims have been examined by the Court of Claims and their validity and
amount determined. The United States ought to pay its debts. I recommend
action by the Congress which will permit of the payment of these
remaining claims.

THE WAGE EARNER

Two very important policies have been adopted by this country which,
while extending their benefits also in other directions, have been of
the utmost importance to the wage earners. One of these is the
protective tariff, which enables our people to live according to a
better standard and receive a better rate of compensation than any
people, any time, anywhere on earth, ever enjoyed. This saves the
American market for the products of the American workmen. The other is a
policy of more recent origin and seeks to shield our wage earners from
the disastrous competition of a great influx of foreign peoples. This
has been done by the restrictive immigration law. This saves the
American job for the American workmen. I should like to see the
administrative features of this law rendered a little more humane for
the purpose of permitting those already here a greater latitude in
securing admission of members of their own families. But I believe this
law in principle is necessary and sound, and destined to increase
greatly the public welfare. We must maintain our own economic position,
we must defend our own national integrity.

It is gratifying to report that the progress of industry, the enormous
increase in individual productivity through labor-saving devices, and
the high rate of wages have all combined to furnish our people in
general with such an abundance not only of the necessaries but of the
conveniences of life that we are by a natural evolution solving our
problems of economic and social justice.

THE NEGRO

These developments have brought about a very remarkable improvement in
the condition of the negro race. Gradually, but surely, with the almost
universal sympathy of those among whom they live, the colored people are
working out their own destiny. I firmly believe that it is better for
all concerned that they should be cheerfully accorded their full
constitutional rights, that they should be protected from all of those
impositions to which, from their position, they naturally fall a prey,
especially from the crime of lynching and that they should receive every
encouragement to become full partakers in all the blessings of our
common American citizenship.

CIVIL SERVICE

The merit system has long been recognized as the correct basis for
employment in our, civil service. I believe that first second, and third
class postmasters, and without covering in the present membership the
field force of prohibition enforcement, should be brought within the
classified service by statute law. Otherwise the Executive order of one
administration is changed by the Executive order of another
administration, and little real progress is made. Whatever its defects,
the merit system is certainly to be preferred to the spoils system.

DEPARTMENTAL REORGANIZATION

One way to save public money would be to pass the pending bill for the
reorganization of the various departments. This project has been pending
for some time, and has had the most careful consideration of experts and
the thorough study of a special congressional committee. This
legislation is vital as a companion piece to the Budget law. Legal
authority for a thorough reorganization of the Federal structure with
some latitude of action to the Executive in the rearrangement of
secondary functions would make for continuing economy in the shift of
government activities which must follow every change in a developing
country. Beyond this many of the independent agencies of the Government
must be placed under responsible Cabinet officials, if we are to have
safeguards of efficiency, economy, and probity.

ARMY AND NAVY

Little has developed in relation to our national defense which needs
special attention. Progress is constantly being made in air navigation
and requires encouragement and development. Army aviators have made a
successful trip around the world, for which I recommend suitable
recognition through provisions for promotion, compensation, and
retirement. Under the direction of the Navy a new Zeppelin has been
successfully brought from Europe across the Atlantic to our own country.

Due to the efficient supervision of the Secretary of War the Army of the
United States has been organized with a small body of Regulars and a
moderate National Guard and Reserve. The defense test of September 12
demonstrated the efficiency of the operating plans. These methods and
operations are well worthy of congressional support.

Under the limitation of armaments treaty a large saving in outlay and a
considerable decrease in maintenance of the Navy has been accomplished.
We should maintain the policy of constantly working toward the full
treaty strength of the Navy. Careful investigation is being made in this
department of the relative importance of aircraft, surface and submarine
vessels, in order that we may not fail to take advantage of all modern
improvements for our national defense. A special commission also is
investigating the problem of petroleum oil for the Navy, considering the
best policy to insure the future supply of fuel oil and prevent the
threatened drainage of naval oil reserves. Legislative action is
required to carry on experiments in oil shale reduction, as large
deposits of this type have been set aside for the use of the Navy.

We have been constantly besought to engage in competitive armaments.
Frequent reports will reach us of the magnitude of the military
equipment of other, nations. We shall do well to be little impressed by
such reports or such actions. Any nation undertaking to maintain a
military establishment with aggressive and imperialistic designs will
find itself severely handicapped in the economic development of the
world. I believe thoroughly in the Army and Navy, in adequate defense
and preparation. But I am opposed to any policy of competition in
building and maintaining land or sea armaments.

Our country has definitely relinquished the old standard of dealing with
other countries by terror and force, and is definitely committed to the
new standard of dealing with them through friendship and understanding.
This new policy should be constantly kept in mind by the guiding forces
of the Army and Navy, by the. Congress and by the country at large. I
believe it holds a promise of great benefit to humanity. I shall resist
any attempt to resort to the old methods and the old standards. I am
especially solicitous that foreign nations should comprehend the candor
and sincerity with which we have adopted this position. While we propose
to maintain defensive and supplementary police forces by land and sea,
and to train them through inspections and maneuvers upon appropriate
occasions in order to maintain their efficiency, I wish every other
nation to understand that this does not express any unfriendliness or
convey any hostile intent. I want the armed forces of America to be
considered by all peoples not as enemies but as friends as the
contribution which is made by this country for the maintenance of the
peace and security of the world.

VETERANS

With the authorization for general hospitalization of the veterans of
all wars provided during the present year, the care and treatment of
those who have served their country in time of peril and the attitude of
the Government toward them is not now so much one of needed legislation
as one of careful, generous and humane administration. It will ever be
recognized that their welfare is of the first concern and always
entitled to the most solicitous consideration oil the part of their
fellow citizens. They are organized in various associations, of which
the chief and most representative is the American Legion. Through its
officers the Legion will present to the Congress numerous suggestions
for legislation. They cover such a wide variety of subjects that it is
impossible to discuss them within the scope of this message. With many
of the proposals I join in hearty approval and commend them all to the
sympathetic investigation and consideration of the Congress.

FOREIGN RELATIONS

At no period in the past 12 years have our foreign relations been in
such a satisfactory condition as they are at the present time. Our
actions in the recent months have greatly strengthened the American
policy of permanent peace with independence. The attitude which our
Government took and maintained toward an adjustment of European
reparations, by pointing out that it wits not a political but a business
problem, has demonstrated its wisdom by its actual results. We desire to
see Europe restored that it may resume its productivity in the increase
of industry and its support in the advance of civilization. We look with
great gratification at the hopeful prospect of recuperation in Europe
through the Dawes plan. Such assistance as can be given through the
action of the public authorities and of our private citizens, through
friendly counsel and cooperation, and through economic and financial
support, not for any warlike effort but for reproductive enterprise, not
to provide means for unsound government financing but to establish sound
business administration should be unhesitatingly provided.

Ultimately nations, like individuals, can not depend upon each other but
must depend upon themselves. Each one must work out its own salvation.
We have every desire to help. But with all our resources we are
powerless to save unless our efforts meet with a constructive response.
The situation in our own country and all over the world is one Chat can
be improved only by bard work and self-denial. It is necessary to reduce
expenditures, increase savings and liquidate debts. It is in this
direction that there lies the greatest hope of domestic tranquility and
international peace. Our own country ought to finish the leading example
in this effort. Our past adherence to this policy, our constant refusal
to maintain a military establishment that could be thought to menace the
security of others, our honorable dealings with other nations whether
great or small, has left us in the almost constant enjoyment of peace.

It is not necessary to stress the general desire of all the people of
this country for the promotion of peace. It is the leading principle of
all our foreign relations. We have on every occasion tried to cooperate
to this end in all ways that were consistent with our proper
independence and our traditional policies. It will be my constant effort
to maintain these principles, and to reinforce them by all appropriate
agreements and treaties. While we desire always to cooperate and to
help, we are equally determined to be independent and free. Right and
truth and justice and humanitarian efforts will have the moral support
of this country all over the world. But we do not wish to become
involved in the political controversies of others. Nor is the country
disposed to become a member of the League of Nations or to assume the
obligations imposed by its covenant.

INTERNATIONAL COURT

America has been one of the foremost nations in advocating tribunals for
the settlement of international disputes of a justiciable character. Our
representatives took a leading in those conferences which resulted in
the establishment of e ague Tribunal, and later in providing for a
Permanent Court of International Justice. I believe it would be for the
advantage of this country and helpful to the stability of other nations
for us to adhere to the protocol establishing, that court upon the
conditions stated in the recommendation which is now before the Senate,
and further that our country shall not be bound by advisory opinions
which may be, rendered by the court upon questions which we have not
voluntarily submitted for its judgment. This court would provide a
practical and convenient tribunal before which we could go voluntarily,
but to which we could not be summoned, for a determination of
justiciable questions when they fail to be resolved by diplomatic
negotiations.

DISARMAMENT CONFERENCE

Many times I have expressed my desire to see the work of the Washington
Conference on Limitation of Armaments appropriately supplemented by
further agreements for a further reduction M for the purpose of
diminishing the menace and waste of the competition in preparing
instruments of international war. It has been and is my expectation that
we might hopefully approach other great powers for further conference on
this subject as soon as the carrying out of the present reparation plan
as the established and settled policy of Europe has created a favorable
opportunity. But on account of proposals which have already been made by
other governments for a European conference, it will be necessary to
wait to see what the outcome of their actions may be. I should not wish
to propose or have representatives attend a conference which would
contemplate commitments opposed to the freedom of action we desire to
maintain unimpaired with respect to our purely domestic policies.

INTERNATIONAL LAW

Our country should also support efforts which are being made toward the
codification of international law. We can look more hopefully, in the
first instance, for research and studies that are likely to be
productive of results, to a cooperation among representatives of the bar
and members of international law institutes and societies, than to a
conference of those who are technically representative of their
respective governments, although, when projects have been developed,
they must go to the governments for their approval. These expert
professional studies are going on in certain quarters and should have
our constant encouragement and approval.

OUTLAW OF WAR

Much interest has of late been manifested in this country in the
discussion of various proposals to outlaw aggressive war. I look with
great sympathy upon the examination of this subject. It is in harmony
with the traditional policy of our country, which is against aggressive
war and for the maintenance of permanent and honorable peace. While, as
I have said, we must safeguard our liberty to deal according to our own
judgment with our domestic policies, we can not fail to view with
sympathetic interest all progress to this desired end or carefully to
study the measures that may be proposed to attain it.

LATIN AMERICA

While we are desirous of promoting peace in every quarter of the globe,
we have a special interest in the peace of this hemisphere. It is our
constant desire that all causes of dispute in this area may be
tranquilly and satisfactorily adjusted. Along with our desire for peace
is the earnest hope for the increased prosperity of our sister republics
of Latin America, and our constant purpose to promote cooperation with
them which may be mutually beneficial and always inspired by the most
cordial friendships.

FOREIGN DEBTS

About $12,000,000,000 is due to our Government from abroad, mostly from
European Governments. Great Britain, Finland, Hungary, Lithuania and
Poland have negotiated settlements amounting close to $5,000,000,000.
This represents the funding of over 42 per cent of the debt since the
creation of the special Foreign Debt Commission. As the life of this
commission is about to expire, its term should be extended. I am opposed
to the cancellation of these debts and believe it for the best welfare
of the world that they should be liquidated and paid as fast as
possible. I do not favor oppressive measures, but unless money that is
borrowed is repaid credit can not be secured in time of necessity, and
there exists besides a moral obligation which our country can not ignore
and no other country can evade. Terms and conditions may have to conform
to differences in the financial abilities of the countries concerned,
but the principle that each country should meet its obligation admits of
no differences and is of universal application.

It is axiomatic that our country can not stand still. It would seem to
be perfectly plain from recent events that it is determined to go
forward. But it wants no pretenses, it wants no vagaries. It is
determined to advance in an orderly, sound and common-sense way. It does
not propose to abandon the theory of the Declaration that the people
have inalienable rights which no majority and no power of government can
destroy. It does not propose to abandon the practice of the Constitution
that provides for the protection of these rights. It believes that
within these limitations, which are imposed not by the fiat of man but
by the law of the Creator, self-government is just and wise. It is
convinced that it will be impossible for the people to provide their own
government unless they continue to own their own property.

These are the very foundations of America. On them has been erected a
Government of freedom and equality, of justice and mercy, of education
and charity. Living under it and supporting it the people have come into
great possessions on the material and spiritual sides of life. I want to
continue in this direction. I know that the Congress shares with me that
desire. I want our institutions to be more and more expressive of these
principles. I want the people of all the earth to see in the American
flag the symbol of a Government which intends no oppression at home and
no aggression abroad, which in the spirit of a common brotherhood
provides assistance in time of distress.

***

State of the Union Address
Calvin Coolidge
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 in 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.

GOVERNMENT ECONOMY

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 $3,100,060,000. 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, if 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.

TAXATION

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 are 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 the 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 all these means attempting to strengthen the spiritual
life of the Nation.

FOREIGN RELATIONS

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 previous time.

The example of this attitude has not been without its influence upon
other countries. Acting upon it, an adjustment was made of the difficult
problem of reparations. This was the second step toward peace in Europe.
It paved the way for the agreements which were drawn up at the Locarno
Conference. When ratified, these will represent the third step toward
peace. While they do not of themselves provide an economic
rehabilitation, which is necessary for the progress of Europe, by
strengthening the guarantees of peace they diminish the need for great
armaments. If the energy which now goes into military effort is
transferred to productive endeavor it will greatly assist economic
progress.

The Locarno agreements were made by the, European countries directly
interested without any formal intervention of America, although on July
3 I publicly advocated such agreements in an address made in
Massachusetts. We have consistently refrained from intervening except
when our help has been sought and we have felt it could be effectively
given, as in the settlement of reparations and the London Conference.
These recent Locarno agreements represent the success of this policy
which we have been insisting ought to be adopted, of having European
countries settle their own political problems without involving this
country. This beginning seems to demonstrate that this policy is sound.
It is exceedingly gratifying to observe this progress, both in its
method and in its result promises so much that is beneficial to the
world.

When these agreements are finally adopted, they will provide guarantees
of peace that make the present prime reliance upon force in some parts
of Europe very much less necessary. The natural corollary to these
treaties should be further international contracts for the limitation of
armaments. This work was successfully begun at the Washington
Conference. Nothing was done at that time concerning land forces because
of European objection. Our standing army has been reduced to around
118,000, about the necessary police force for 115,000,000 people. We are
not proposing to increase it, nor is it supposable that any foreign
country looks with the slightest misapprehension upon our land forces.
They do not menace anybody. They are rather a protection to everybody.

The question of disarming upon land is so peculiarly European in its
practical aspects that our country would look with particular gratitude
upon any action which those countries might take to reduce their own
military forces. This is in accordance with our policy of not
intervening unless the European powers are unable to agree and make
request for our assistance. Whenever they are able to agree of their own
accord it is especially gratifying to its, and such agreements may be
sure of our sympathetic support.

It seems clear that it is the reduction of armies rather than of navies
that is of the first importance to the world at the present time. We
shall look with great satisfaction upon that effort and give it our
approbation and encouragement. If that can be settled, we may more
easily consider further reduction and limitation of naval armaments. For
that purpose our country has constantly through its Executive, and
through repeated acts of Congress, indicated its willingness to call
such a conference. Under congressional sanction it would seem to be wise
to participate in any conference of the great powers for naval
limitation of armament proposed upon such conditions that it would hold
a fair promise of being effective. The general policy of our country is
for disarmament, and it ought not to hesitate to adopt any practical
plan that might reasonably be expected to succeed. But it would not care
to attend a conference which from its location or constituency would in
all probability prove futile.

In the further pursuit, of strengthening the bonds of peace and good
will we have joined with other nations in an international conference
held at Geneva and signed an agreement which will be laid before the
Senate for ratification providing suitable measures for control and for
publicity in international trade in arms, ammunition, and implements of
war, and also executed a protocol providing for a prohibition of the use
of poison gas in war, in accordance with the principles of Article 5 of
the treaty relating thereto signed at the Washington Conference. We are
supporting the Pan American efforts that are being made toward the
codification of international law, and looking with sympathy oil the
investigations conducted under philanthropic auspices of the proposal to
agreements outlawing war. In accordance with promises made at the
Washington Conference, we have urged the calling of and are now
represented at the Chinese Customs Conference and on the Commission on
Extraterritoriality, where it will be our policy so far as possible to
meet the, aspirations of China in all ways consistent with the interests
of the countries involved.

COURT OF INTERNATIONAL JUSTICE

Pending before the Senate for nearly three years is the proposal to
adhere to the protocol establishing the Permanent Court of International
Justice. A well-established line of precedents mark America's effort to
effect the establishment of it court of this nature.. We took a leading
part in laying the foundation on which it rests in the establishment of
The Hague Court of Arbitration. It is that tribunal which nominates the
judges who are elected by the Council and Assembly of the League of
Nations.

The proposal submitted to the Senate was made dependent upon four
conditions, the first of which is that by supporting the court we do not
assume any obligations under the league; second, that we may participate
upon an equality with other States in the election of judges; third,
that the Congress shall determine what part of the expenses we shall
bear; fourth, that the statute creating the court shall not be amended
without out consent; and to these I have proposed an additional
condition to the effect that we are not to be bound by advisory opinions
rendered without our consent.

The court appears to be independent of the league. It is true the judges
are elected by the Assembly and Council, but they are nominated by the
Court of Arbitration, which we assisted to create and of which we are a
part. The court was created by it statute, so-called, which is really a
treaty made among some forty-eight different countries, that might
properly be called a constitution of the court. This statute provides a
method by which the judges are chosen so that when the Court of
Arbitration nominates them and the Assembly and Council of the League
elect them, they are not acting as instruments of the Court of
Arbitration or instruments of the league, but as instruments of the
statute.

This will be even more apparent if our representatives sit with the
members of the council and assembly in electing the judges. It is true
they are paid through the league though not by the league, but by the
countries which are members of the league and by our country if we
accept the protocol. The judges are paid by the league only in the same
sense that it could be said United States judges are paid by the
Congress. The court derives all its authority from the statute and is so
completely independent of the league that it could go on functioning if
the league were disbanded, at least until the terms of the judges
expired.

The most careful provisions are made in the statute as to the
qualifications of judges. Those who make the nominations are recommended
to consult with their highest court of justice, their law schools and
academies. The judges must be persons of high moral character, qualified
to hold the highest judicial offices in that country, or be
jurisconsults of recognized competence in international law. It must be
assumed that these requirements will continue to be carefully met, and
with America joining the countries already concerned it is difficult to
comprehend how human ingenuity could better provide for the
establishment of a court which would maintain its independence. It has
to be recognized that independence is to a considerable extent a matter
of ability, character, and personality. Some effort was made in the
early beginnings to interfere with the independence of our Supreme
Court. It did not succeed because of the quality of the men who made up
that tribunal.

It does not seem that the authority to give advisory opinions interferes
with the independence of the court. Advisory opinions in and of
themselves are not harmful, but may be used in such a way as to be very
beneficial because they undertake to prevent injury rather than merely
afford a remedy after the injury has been done. As a principle that only
implies that the court shall function when proper application is made to
it. Deciding the question involved upon issues submitted for an advisory
opinion does not differ materially from deciding the question involved
upon issues submitted by contending parties. Up to the present time the
court has given an advisory opinion when it judged it had jurisdiction,
and refused to give one when it judged it did not have jurisdiction.
Nothing in the work of the court has yet been an indication that this is
an impairment of its independence or that its practice differs
materially from the giving of like opinions under the authority of the
constitutions of several of our States.

No provision of the statute seems to me to give this court any authority
to be a political rather than a judicial court. We have brought cases in
this country before our courts which, when they have been adjudged to be
political, have been thereby dismissed. It is not improbable that
political questions will be submitted to this court, but again up to the
present time the court has refused to pass on political questions and
our support would undoubtedly have a tendency to strengthen it in that
refusal.

We are not proposing to subject ourselves to any compulsory
jurisdiction. If we support the court, we can never be obliged to submit
any case which involves our interests for its decision. Our appearance
before it would always be voluntary, for the purpose of presenting a
case which we had agreed might be presented. There is no more danger
that others might bring cases before the court involving our interests
which we did not wish to have brought, after we have adhered, and
probably not so much, than there would be of bringing such cases if we
do not adhere. I think that we would have the same legal or moral right
to disregard such a finding in the one case that we would in the other.

If we are going to support any court, it will not be one that we have
set up alone or which reflects only our ideals. Other nations have their
customs and their institutions, their thoughts and their methods of
life. If a court is going to be international, its composition will have
to yield to what is good in all these various elements. Neither will it
be possible to support a court which is exactly perfect, or under which
we assume absolutely no obligations. If we are seeking that opportunity,
we might as well declare that we are opposed to supporting any court. If
any agreement is made, it will be because it undertakes to set up a
tribunal which can do some of the things that other nations wish to have
done. We shall not find ourselves bearing a disproportionate share of
the world's burdens by our adherence, and we may as well remember that
there is absolutely no escape for our country from bearing its share of
the world's burdens in any case. We shall do far better service to
ourselves and to others if we admit this and discharge our duties
voluntarily, than if we deny it and are forced to meet the same
obligations unwillingly.

It is difficult to imagine anything that would be more helpful to the
world than stability, tranquility and international justice. We may say
that we are contributing to these factors independently, but others less
fortunately located do not and can not make a like contribution except
through mutual cooperation. The old balance of power, mutual alliances,
and great military forces were not brought bout by any mutual dislike
for independence, but resulted from the domination of circumstances.
Ultimately they were forced on us. Like all others engaged in the war
whatever we said as a matter of fact we joined an alliance, we became a
military power, we impaired our independence. We have more at stake than
any one else in avoiding a repetition of that calamity. Wars do not,
spring into existence. They arise from small incidents and trifling
irritations which can be adjusted by an international court. We can
contribute greatly to the advancement of our ideals by joining with
other nations in maintaining such a tribunal.

FOREIGN DEBTS

Gradually, settlements have been made which provide for the liquidation
of debts due to our Government from foreign governments. Those made with
Great Britain, Finland, Hungary Lithuania, and Poland have already been
approved by the Congress. Since the adjournment, further agreements have
been entered into with Belgium, Czechoslovakia, Latvia, Estonia, Italy,
and Rumania. These 11 nations, which have already made settlements,
represent $6,419,528,641 of the original principal of the loans. The
principal sums without interest, still pending, are the debt of France,
of $3,340,000,000; Greece, $15,000,000; Yugoslavia, $.51,000,000;
Liberia, $26,000; Russia, $192,000,000, which those at present in
control have undertaken, openly to repudiate; Nicaragua, $84,000, which
is being paid currently; and Austria, $24,000,000, on which by act of
Congress a moratorium of 20 years has been granted. The only remaining
sum is $12,000,000, due from Armenia, which has now ceased to exist as
an independent nation.

In accordance with the settlements made, the amount of principal and
interest which is to be paid to the United States under these agreements
aggregate $15,200,688,253.93. It is obvious that the remaining
settlements, which will undoubtedly be made, will bring this sum up to
an amount which will more than equal the principal due on our present
national debt. While these settlements are very large in the aggregate,
it has been felt that the terms granted were in all cases very generous.
They impose no undue burden and are mutually beneficial in the
observance of international faith and the improvement of international
credit.

Every reasonable effort will be made to secure agreements for
liquidation with the remaining countries, whenever they are in such
condition that they can be made. Those which have already been
negotiated under the bipartisan commission established by the Congress
have been made only after the most thoroughgoing and painstaking
investigation, continued for a long time before meeting with the
representatives of the countries concerned. It is believed that they
represent in each instance the best that can be done and the wisest
settlement that can be secured. One very important result is the
stabilization of foreign currency, making exchange assist rather than
embarrass our trade. Wherever sacrifices have been made of money, it
will be more than amply returned in better understanding and friendship,
while in so far as these adjustments will contribute to the financial
stability of the debtor countries, to their good order, prosperity, and
progress, they represent hope of improved trade relations and mutual
contributions to the civilization of the world.

ALIEN PROBLEM

Negotiations are progressing among the interested parties in relation to
the final distribution of the assets in the hands of the Alien Property
Custodian. Our Government and people are interested as creditors; the
German Government and people are interested as debtors and owners of the
seized property. Pending the outcome of these negotiations, I do not
recommend any affirmative legislation. For the present we should
continue in possession of this property which we hold as security for
the settlement of claims due to our people and our Government.

IMMIGRATION

While not enough time has elapsed to afford a conclusive demonstration,
such results as have been secured indicate that our immigration law is
on the whole beneficial. It is undoubtedly a protection to the wage
earners of this country. The situation should however, be carefully
surveyed, in order to ascertain whether it is working a needless
hardship upon our own inhabitants. If it deprives them of the comfort
and society of those bound to them by close family ties, such
modifications should be adopted as will afford relief, always in
accordance with the principle that our Government owes its first duty to
our own people and that no alien, inhabitant of another country, has any
legal rights whatever under our Constitution and laws. It is only
through treaty, or through residence here that such rights accrue. But
we should not, however, be forgetful of the obligations of a common
humanity.

While our country numbers among its best citizens many of those of
foreign birth, yet those who now enter in violation of our laws by that
very act thereby place themselves in a class of undesirables.
Investigation reveals that any considerable number are coming here in
defiance of our immigration restrictions, it will undoubtedly create the
necessity for the registration of all aliens. We ought to have no
prejudice against an alien because he is an alien. The standard which we
apply to our inhabitants is that of manhood, not place of birth.
Restrictive immigration is to a large degree for economic purposes. It
is applied in order that we may not have a larger annual increment of
good people within our borders than we can weave into our economic
fabric in such a way as to supply their needs without undue injury to
ourselves.

NATIONAL DEFENSE

Never before in time of peace has our country maintained so large and
effective a military force as it now has. The Army, Navy, Marine Corps,
National Guard, and Organized Reserves represent a strength of about
558,400 men. These forces are well trained, well equipped, and high in
morale.

A sound selective service act giving broad authority for the
mobilization in time of peril of all the resources of the country, both
persons and materials, is needed to perfect our defense policy in
accordance with our ideals of equality. The provision for more suitable
housing to be paid for out of funds derived from the sale of excess
lands, pending before the last Congress, ought to be brought forward and
passed. Reasonable replacements ought to be made to maintain a
sufficient ammunition reserve.

The Navy has the full treaty tonnage of capital ships. Work is going
forward in modernizing the older ones, building aircraft carriers,
additional fleet submarines, and fast scout cruisers, but we are
carefully avoiding anything that might be construed as a competition in
armaments with other nations. The joint Army and Navy maneuvers at
Hawaii, followed by the cruise of a full Battle Fleet to Australia and
New Zealand, were successfully carried out. These demonstrations
revealed a most satisfactory condition of the ships and the men engaged.

Last year at my suggestion the General Board of the Navy made an
investigation and report on the relation of aircraft to warships. As a
result authorizations and appropriations were made for more scout
cruisers and fleet submarines and for completing aircraft carriers and
equipping them with necessary planes. Additional training in aviation
was begun at the Military and Naval Academies. A method of coordination
and cooperation of the Army and Navy and the principal aircraft builders
is being perfected. At the suggestion of the Secretaries of War and Navy
I appointed a special board to make a further study of the problem of
aircraft.

The report of the Air Board ought to be reassuring to the country,
gratifying to the service and satisfactory to the Congress. It is
thoroughly complete and represents the mature thought of the best talent
in the country. No radical change in organization of the service seems
necessary. The Departments of War, Navy, and Commerce should each be
provided with an additional assistant secretary, not necessarily with
statutory duties but who would be available under the direction of the
Secretary to give especial attention to air navigation. We must have an
air strength worthy of America. Provision should be made for two
additional brigadier generals for the Army Air Service. Temporary rank
corresponding to their duties should be awarded to active flying
officers in both Army and Navy.

Aviation is of great importance both for national defense and commercial
development. We ought to proceed in its improvement by the necessary
experiment and investigation. Our country is not behind in this art. It
has made records for speed and for the excellence of its planes. It
ought to go on maintaining its manufacturing plants capable of rapid
production, giving national assistance to the la in out of airways,
equipping itself with a moderate number of planes and keeping an air
force trained to the highest efficiency.

While I am a thorough believer in national defense and entirely
committed to the policy of adequate preparation, I am just as thoroughly
opposed to instigating or participating in a policy of competitive
armaments. Nor does preparation mean a policy of militarizing. Our
people and industries are solicitous for the cause of 0111, country, and
have great respect for the Army and Navy and foil the uniform worn by
the men who stand ready at all times for our protection to encounter the
dangers and perils necessary to military service, but all of these
activities are to be taken not in behalf of aggression but in behalf of
peace. They are the instruments by which we undertake to do our part to
promote good will and support stability among all peoples.

VETERANS

If any one desires to estimate the esteem in which the veterans of
America are held by their fellow citizens, it is but necessary to
remember that the current budget calls for an expenditure of about
$650,000.000 in their behalf. This is nearly the amount of the total
cost of the National Government, exclusive of the post office, before we
entered the last war.

At the two previous sessions of Congress legislation affecting veterans'
relief was enacted and the law liberalized. This legislation brought
into being a number of new provisions tending more nearly to meet the
needs of our veterans, as well as afford the necessary authority to
perfect the administration of these laws.

Experience with the new legislation so far has clearly demonstrated its
constructive nature. It has increased the benefits received by many and
has made eligible for benefits many others. Direct disbursements to the
veteran or his dependents exceeding $21,000,000 have resulted, which
otherwise would not have been made. The degree of utilization of our
hospitals has increased through making facilities available to the
incapacitated veteran regardless of service origin of the disability.
This new legislation also has brought about a marked improvement of
service to the veteran.

The organizations of ex-service men have proposed additional legislative
changes which you will consider, but until the new law and the
modifications made at the last session of Congress are given a more
thorough test further changes in the basic law should be few and made
only after careful though sympathetic consideration.

The principal work now before the Veterans' Bureau is the perfection of
its organization and further improvements in service. Some minor
legislative changes are deemed necessary to enable the bureau to retain
that high grade of professional talent essential in handling the
problems of the bureau. Such changes as tend toward the improvement of
service and the carrying forward to completion of the hospital
construction program are recommended for the consideration of the proper
committees of Congress.

With the enormous outlay that is now being made in behalf of the
veterans and their dependents, with a tremendous war debt still
requiring great annual expenditure, with the still high rate of
taxation, while every provision should be made for the relief of the
disabled and the necessary care of dependents, the Congress may well
consider whether the financial condition of the Government is not such
that further bounty through the enlargement of general pensions and
other emoluments ought not to be postponed.

AGRICULTURE

No doubt the position of agriculture as a whole has very much improved
since the depression of three and four years ago. But there are many
localities and many groups of individuals, apparently through no fault
of their own, sometimes due to climatic conditions and sometimes to the
prevailing price of a certain crop, still in a distressing condition.
This is probably temporary, but it is none the less acute. National
Government agencies, the Departments of Agriculture and Commerce, the
Farm Loan Board, the intermediate credit banks, and the Federal Reserve
Board are all cooperating to be of assistance and relief. On the other
hand, there are localities and individuals who have had one of their
most prosperous years. The general price level is fair, but here again
there are exceptions both ways, some items being poor while others are
excellent. In spite of a lessened production the farm income for this
year will be about the same as last year and much above the three
preceding years.

Agriculture is a very complex industry. It does not consist of one
problem, but of several. They can not be solved at one stroke. They have
to be met in different ways, and small gains are not to be despised.

It has appeared from all the investigations that I have been able to
make that the farmers as a whole are determined to maintain the
independence of their business. They do not wish to have meddling on the
part of the Government or to be placed under the inevitable restrictions
involved in any system of direct or indirect price-fixing, which would
result from permitting the Government to operate in the agricultural
markets. They are showing a very commendable skill in organizing
themselves to transact their own business through cooperative marketing,
which will this year turn over about $2,500,000,000, or nearly one-fifth
of the total agricultural business. In this they are receiving help from
the Government. The Department of Agriculture should be strengthened in
this facility, in order to be able to respond when these marketing
associations want help. While it ought not to undertake undue
regulation, it should be equipped to give prompt information on crop
prospects, supply, demand, current receipts, imports, exports, and
prices.

A bill embodying these principles, which has been drafted under the
advice and with the approval of substantially all the leaders and
managers in the cooperative movement, will be presented to the Congress
for its enactment. Legislation should also be considered to provide for
leasing the unappropriated public domain for grazing purposes and
adopting a uniform policy relative to grazing on the public lands and in
the national forests.

A more intimate relation should be established between agriculture and
the other business activities of the Nation. They are mutually dependent
and can each advance their own prosperity most by advancing the
prosperity of the other. Meantime the Government will continue those
activities which have resulted in an unprecedented amount of legislation
and the pouring out of great sums of money during the last five years.
The work for good roads, better land and water transportation, increased
support for agricultural education, extension of credit facilities
through the Farm Loan Boards and the intermediate credit banks, the
encouragement of orderly marketing and a repression of wasteful
speculation, will all be continued.

Following every other depression, after a short period the price of farm
produce has taken and maintained the lead in the advance. This advance
had reached a climax before the war. Everyone will recall the discussion
that went on for four or five years prior to 1914 concerning the high
cost of living. This history is apparently beginning to repeat itself.
While wholesale prices of other commodities have been declining, farm
prices have been increasing. There is every reason to suppose that a new
era in agricultural prosperity lies just before us, which will probably
be unprecedented.

MUSCLE SHOALS

The problem of Muscle Shoals seems to me to have assumed a place all out
of proportion with its real importance. It probably does not represent
in market value much more than a first-class battleship, yet it has been
discussed in the Congress over a period of years and for months at a
time. It ought to be developed for the production of nitrates primarily,
and incidentally for power purposes. This would serve defensive,
agricultural, and industrial purposes. I am in favor of disposing of
this property to meet these purposes. The findings of the special
commission will be transmitted to the Congress for their information. I
am convinced that the best possible disposition can be made by direct
authorization of the Congress. As a means of negotiation I recommend the
immediate appointment of a small joint special committee chosen from the
appropriate general standing committees of the House and Senate to
receive bids, which when made should be reported with recommendations as
to acceptance, upon which a law should be enacted, effecting a sale to
the highest bidder who will agree to carry out these purposes.

If anything were needed to demonstrate the almost utter incapacity of
the National Government to deal directly with an industrial and
commercial problem, it has been provided by our experience with this
property. We have expended vast fortunes, we have taxed everybody, but
we are unable to secure results, which benefit anybody. This property
ought, to be transferred to private management under conditions which
will dedicate it to the public purpose for which it was conceived.

RECLAMATION

The National Government is committed to a policy of reclamation and
irrigation which it desires to establish on a sound basis and continue
in the interest of the localities concerned. Exhaustive studies have
recently been made of Federal reclamation, which have resulted in
improving the projects and adjusting many difficulties. About one third
of the projects is in good financial condition, another third can
probably be made profitable, while the other third is under unfavorable
conditions. The Congress has already provided for a survey which will
soon be embodied in a report. That ought to suggest a method of relief
which will make unnecessary further appeals to the Congress. Unless this
can be done, Federal reclamation will be considerably retarded. With the
greatly increased cost of construction and operation, it has become
necessary to plan in advance, by community organization and selective
agriculture, methods sufficient to repay these increasing outlays.

The human and economic interests of the farmer citizens suggest that the
States should be required to exert some effort and assume some
responsibility, especially in the intimate, detailed, and difficult work
of securing settlers and developing farms which directly profit them,
but only indirectly and remotely can reimburse the Nation. It is
believed that the Federal Government should continue to be the agency
for planning and constructing the great undertakings needed to regulate
and bring into use the rivers the West, many of which are interstate in
character, but the detailed work of creating agricultural communities
and a rural civilization on the land made ready for reclamation ought to
be either transferred to the State in its entirety or made a cooperative
effort of the State and Federal Government.

SHIPPING

The maintenance of a merchant marine is of the utmost importance for
national defense and the service of our commerce. We have a large number
of ships engaged in that service. We also have a surplus supply, costly
to care for, which ought to be sold. All the investigations that have
been made under my direction, and those which have been prosecuted
independently, have reached the conclusion that the fleet should be
under the direct control of a single executive head, while the Shipping
Board should exercise its judicial and regulatory functions in
Accordance with its original conception. The report of Henry G. Dalton,
a business man of broad experience, with a knowledge of shipping, made
to me after careful investigation, will be transmitted for the
information of the Congress, the studies pursued under the direction of
the United States Chamber of Commerce will also be accessible, and added
to these will be the report of the special committee of the House.

I do not advocate the elimination of regional considerations, but it has
become apparent that without centralized executive action the management
of this great business, like the management of any other great business,
will flounder in incapacity and languish under a division of council. A
plain and unmistakable reassertion of this principle of unified control,
which I have always been advised was the intention of the Congress to
apply, is necessary to increase the efficiency of our merchant fleet.

COAL

The perennial conflict in the coal industry is still going on to the
great detriment of the wage earners, the owners, and especially to the
public. With deposits of coal in this country capable of supplying its
needs for hundreds of years, inability to manage and control this great
resource for the benefit of all concerned is very close to a national
economic failure. It has been the subject of repeated investigation and
reiterated recommendation. Yet the industry seems never to have accepted
modern methods of adjusting differences between employers and employees.
The industry could serve the public much better and become subject to a
much more effective method of control if regional consolidations and
more freedom in the formation of marketing associations, under the
supervision of the Department of Commerce, were permitted.

At the present time the National Government has little or no authority
to deal with this vital necessity of the life of the country. It has
permitted itself to remain so powerless that its only attitude must be
humble supplication. Authority should be lodged with the President and
the Departments of Commerce and Labor, giving them power to deal with an
emergency. They should be able to appoint temporary boards with
authority to call for witnesses and documents, conciliate differences,
encourage arbitration, and in case of threatened scarcity exercise
control over distribution. Making the facts public under these
circumstances through a statement from an authoritative source would be
of great public benefit. The report of the last coal commission should
be brought forward, reconsidered, and acted upon.

PROHIBITION

Under the orderly processes of our fundamental institutions the
Constitution was lately amended providing for national prohibition. The
Congress passed an act for its enforcement, and similar acts have been
provided by most of the States. It is the law of the land. It is the
duty of all who come under its, jurisdiction to observe the spirit of
that law, and it is the duty of the Department of Justice and the
Treasury Department to enforce it. Action to prevent smuggling, illegal
transportation in interstate commerce, abuse in the use of permits, and
existence of sources of supply for illegal traffic is almost entirely
imposed upon the Federal Government.

Through treaties with foreign governments and increased activities of
the Coast Guard, revenue agents, district attorneys and enforcement
agents effort is being made to prevent these violations. But the
Constitution also puts a concurrent duty on the States. We need their
active and energetic cooperation, the vigilant action of their police,
and the jurisdiction of their courts to assist in enforcement. I request
of the people observance, of the public officers continuing efforts for
enforcement, and of the Congress favorable action on the budget
recommendation for the prosecution of this work.

WATERWAY DEVELOPMENT

For many years our country has been employed in plans and M for the
development of our intracoastal and inland waterways. This work along
our coast is an important adjunct to our commerce. It will be carried
on, together with the further opening up of our harbors, as our
resources permit. The Government made an agreement during the war to
take over the Cape Cod Canal, under which the owners made valuable
concessions. This pledged faith of the Government ought to be redeemed.

Two other main fields are under consideration. One is the Great Lakes
and St. Lawrence, including the Erie Canal. This includes stabilizing
the lake level, and is both a waterway and power project. A joint
commission of the United States and Canada is working on plans and
surveys which will not be completed until next April. No final
determination can be made, apparently, except under treaty as to the
participation of both countries. The other is the Mississippi River
stem. This is almost entirely devoted to navigation. Work on the Ohio
River will be completed in about three years. A modern channel
connecting Chicago, New Orleans, Kansas City, and Pittsburgh should be
laid out and work on the tributaries prosecuted. Some work is being done
of a preparatory nature along the Missouri, and large expenditures are
being made yearly in the lower reaches of the Mississippi and its
tributaries which contribute both to flood control and navigation.
Preliminary measures are being taken on the Colorado River project,
which is exceedingly important for flood control, irrigation, power
development, and water supply to the area concerned. It would seem to be
very doubtful, however, whether it is practical to secure affirmative
action of the Congress, except under a Joint agreement of the several
States.

The Government has already expended large sums upon scientific research
and engineering investigation in promotion of this Colorado River
project. The actual progress has been retarded for many years by
differences among the seven States in the basin over their relative
water rights and among different groups as to methods. In an attempt to
settle the primary difficulty of the water rights, Congress authorized
the Colorado River Commission which agreed on November 24, 1922, upon an
interstate compact to settle these rights, subject to the ratification
of the State legislatures and Congress. All seven States except Arizona
at one time ratified, the Arizona Legislature making certain
reservations which failed to meet the approval of the governor.
Subsequently an attempt was made to establish the compact upon a
six-State basis, but in this case California imposed reservations. There
appears to be no division of opinion upon the major principles of the
compact, but difficulty in separating contentions to methods of
development from the discussion of it. It is imperative that flood
control be undertaken for California and Arizona. preparation made for
irrigation, for power, and for domestic water.

Some or all of these questions are combined in every proposed
development. The Federal Government is interested in some of these
phases, State governments and municipalities and irrigation districts in
others, and private corporations in still others. Because of all this
difference of view it is most desirable that Congress should consider
the creation of some agency that will be able to determine methods of
improvement solely upon economic and engineering facts, that would be
authorized to negotiate and settle, subject to the approval of Congress,
the participation, rights, and obligations of each group in any
particular works. Only by some such method can early construction be
secured.

WATER POWER

Along with the development of navigation should go every possible
encouragement for the development of our water power. While steam still
plays a dominant part, this is more and more becoming an era of
electricity. Once installed, the cost is moderate, has not tended
greatly to increase, and is entirely free from the unavoidable dirt and
disagreeable features attendant upon the burning of coal. Every facility
should be extended for the connection of the various units into a
superpower plant, capable at all times of a current increasing
uniformity over the entire system.

RAILROADS

The railroads throughout the country are in a fair state of prosperity.
Their service is good and their supply of cars is abundant. Their
condition would be improved and the public better served by a system of
consolidations. I recommend that the Congress authorize such
consolidations tinder the supervision of the Interstate Commerce
Commission, with power to approve or disapprove when proposed parts are
excluded or new parts added. I am informed that the railroad managers
and their employees have reached a substantial agreement as to what
legislation is necessary to regulate and improve their relationship.
Whenever they bring forward such proposals, which seem sufficient also
to protect the interests of the public, they should be enacted into law.

It is gratifying to report that both the railroad managers and railroad
employees are providing boards for the mutual adjustment of differences
in harmony with the principles of conference, conciliation, and
arbitration. The solution of their problems ought to be an example to
all other industries. Those who ask the protections of civilization
should be ready to use the methods of civilization.

A strike in modern industry has many of the aspects of war in the modern
world. It injures labor and it injures capital. If the industry involved
is a basic one, it reduces the necessary economic surplus and,
increasing the cost of living, it injures the economic welfare and
general comfort of the whole people. It also involves a deeper cost. It
tends to embitter and divide the community into warring classes and thus
weakens the unity and power of our national life.

Labor can make no permanent gains at the cost of the general welfare.
All the victories won by organized labor in the past generation have
been won through the support of public opinion. The manifest inclination
of the managers and employees of the railroads to adopt a policy of
action in harmony with these principles marks a new epoch in our
industrial life.

OUTLYING POSSESSIONS

The time has come for careful investigation of the expenditures and
success of the laws by which we have undertaken to administer our
outlying possessions. A very large amount of money is being expended for
administration in Alaska. It appears so far out of proportion to the
number of inhabitants and the amount of production as to indicate cause
for thorough investigation. Likewise consideration should be given to
the experience under the law which governs the Philippines. From such
reports as reach me there are indications that more authority should be
given to the Governor General, so that he will not be so dependent upon
the local legislative body to render effective our efforts to set an
example of the, sound administration and good government, which is so
necessary for the preparation of the Philippine people for
self-government under ultimate independence. If they are to be trained
in these arts, it is our duty to provide for them the best that there
is.

RETIREMENT OF JUDGES

The act of March 3, 1911, ought to be amended so that the term of years
of service of judges of any court of the United States requisite for
retirement with pay shall be computed to include not only continuous but
aggregate service.

MOTHERS' AID

The Government ought always to be alert on the side of the humanities.
It Ought to encourage provisions for economic justice for the
defenseless. It ought to extend its relief through its national and
local agencies, as may be appropriate in each case, to the suffering and
the needy. It ought to be charitable.

Although more than 40 of our States have enacted measures in aid of
motherhood, the District of Columbia is still without such a law. A
carefully considered bill will be presented, which ought to have most
thoughtful consideration in order that the Congress may adopt a measure
which will be hereafter a model for all parts of the Union.

CIVIL SERVICE

In 1883 the Congress passed the civil service act, which from a modest
beginning of 14,000 employees has grown until there are now 425,000 in
the classified service. This has removed the clerical force of the
Nation from the wasteful effects of the spoils system and made it more
stable and efficient. The time has come to consider classifying all
postmasters, collectors of customs, collectors of internal revenue, and
prohibition agents, by an act covering in those at present in office,
except when otherwise provided by Executive order.

The necessary statistics are now being gathered to form the basis of a
valuation of the civil service retirement fund based on current
conditions of the service. It is confidently expected that this
valuation will be completed in time to be made available to the Congress
during the present session. It will afford definite knowledge of
existing, and future liabilities under the present law and determination
OF liabilities under any proposed change in the present law. We should
have this information before creating further obligations for retirement
annuities which will become liabilities to be met in the future from the
money of the taxpayer.

The classification act of 1923, with the subsequent legislative action
providing for adjustment of the compensation of field service positions,
has operated materially to improve employment conditions in the Federal
service. The administration of the act is in the hands of an impartial
board, functioning without the necessity of a direct appropriation. It
would be inadvisable at this time to place in other hands the
administration of this act.

FEDERAL TRADE COMMISSION

The proper function of the Federal Trade Commission is to supervise and
correct those practices in commerce which are detrimental to fair
competition. In this it performs a useful function and should be
continued and supported. It was designed also to be a help to honest
business. In my message to the Sixty-eighth Congress I recommended that
changes in the procedure then existing be made. Since then the
commission by its own action has reformed its rules, giving greater
speed and economy in the disposal of its cases and full opportunity for
those accused to be heard. These changes are improvements and, if
necessary, provision should be made for their permanency.

REORGANIZATION

No final action has yet been taken on the measure providing for the
reorganization of the various departments. I therefore suggest that this
measure, which will be of great benefit to the efficient and economical
administration of the business of the Government, be brought forward and
passed.

THE NEGRO

Nearly one-tenth of our population consists of the Negro race. The
progress which they have made in all the arts of civilization in the
last 60 years is almost beyond belief. Our country has no more loyal
citizens. But they do still need sympathy, kindness, and helpfulness.
They need reassurance that the requirements of the Government and
society to deal out to them even-handed justice will be met. They should
be protected from all violence and supported in the peaceable enjoyment
of the fruits of their labor. Those who do violence to them should be
punished for their crimes. No other course of action is worthy of the
American people.

Our country has many elements in its population, many different modes of
thinking and living, all of which are striving in their own way to be
loyal to the high ideals worthy of the crown of American citizenship. It
is fundamental of our institutions that they seek to guarantee to all
our inhabitants the right to live their own lives under the protection
of the public law. This does not include any license to injure others
materially, physically, morally, to Incite revolution, or to violate the
established customs which have long had the sanction of enlightened
society.

But it does mean the full right to liberty and equality before the law
without distinction of race or creed. This condition can not be granted
to others, or enjoyed by ourselves, except by the application of the
principle of broadest tolerance. Bigotry is only another name for
slavery. It reduces to serfdom not only those against whom it is
directed, but also those who seek to apply it. An enlarged freedom can
only be secured by the application of the golden rule. No other
utterance ever presented such a practical rule of life.

CONCLUSION

It is apparent that we are reaching into an era of great general
prosperity. It will continue only so long as we shall use it properly.
After all, there is but a fixed quantity of wealth in this country at
any fixed time. The only way that we can all secure more of it is to
create more. The element of time enters into production, If the people
have sufficient moderation and contentment to be willing to improve
their condition by the process of enlarging production, eliminating
waste, and distributing equitably, a prosperity almost without limit
lies before its. If the people are to be dominated by selfishness,
seeking immediate riches by nonproductive speculation and by wasteful
quarreling over the returns from industry, they will be confronted by
the inevitable results of depression and privation. If they will
continue industrious and thrifty, contented with fair wages and moderate
profits, and the returns which accrue from the development of oar
natural resources, our prosperity will extend itself indefinitely.

In all your deliberations you should remember that the purpose of
legislation is to translate principles into action. It is an effort to
have our country be better by doing better. Because the thoughts and
ways of people are firmly fixed and not easily changed, the field within
which immediate improvement can be secured is very narrow. Legislation
can provide opportunity. Whether it is taken advantage of or not depends
upon the people themselves. The Government of the United States has been
created by the people. It is solely responsible to them. It will be most
successful if it is conducted solely for their benefit. All its efforts
would be of little avail unless they brought more justice, more
enlightenment, more happiness and prosperity into the home. This means
an opportunity to observe religion, secure education, and earn a living
under a reign of law and order. It is the growth and improvement of the
material and spiritual life of the Nation. We shall not be able to gain
these ends merely by our own action. If they come at all, it will be
because we have been willing to work in harmony with the abiding purpose
of a Divine Providence.

***

State of the Union Address
Calvin Coolidge
December 7, 1926

Members of the Congress:

In reporting to the Congress the state of the Union, I find it
impossible to characterize it other than one of general peace and
prosperity. In some quarters our diplomacy is vexed with difficult and
as yet unsolved problems, but nowhere are we met with armed conflict. If
some occupations and areas are not flourishing, in none does there
remain any acute chronic depression. What the country requires is not so
much new policies as a steady continuation of those which are already
being crowned with such abundant success. It can not be too often
repeated that in common with all the world we are engaged in liquidating
the war.

In the present short session no great amount of new legislation is
possible, but in order to comprehend what is most desirable some survey
of our general situation is necessary. A large amount of time is
consumed in the passage of appropriation bills. If each Congress in its
opening session would make appropriations to continue for two years,
very much time would be saved which could either be devoted to a
consideration of the general needs of the country or would result in
decreasing the work of legislation. ECONOMY

Our present state of prosperity has been greatly promoted by three
important causes, one of which is economy, resulting in reduction and
reform in national taxation. Another is the elimination of many kinds of
waste. The third is a general raising of the standards of efficiency.
This combination has brought the perfectly astonishing result of a
reduction in the index price of commodities and an increase in the index
rate of wages. We have secured a lowering of the cost to produce and a
raising of the ability to consume. Prosperity resulting from these
causes rests on the securest of all foundations. It gathers strength
from its own progress.

In promoting this progress the chief part which the National Government
plays lies in the field of economy. Whatever doubts may have been
entertained as to the necessity of this policy and the beneficial
results which would accrue from it to all the people of the Nation, its
wisdom must now be considered thoroughly demonstrated. It may not have
appeared to be a novel or perhaps brilliant conception, but it has
turned out to be preeminently sound. It has not failed to work. It has
surely brought results. It does not have to be excused as a temporary
expedient adopted as the lesser evil to remedy some abuse, it is not a
palliative seeking to treat symptoms, but a major operation for the,
eradication at the source of a large number of social diseases.

Nothing is easier than the expenditure of public money. It does not
appear to belong to anybody. The temptation is overwhelming to bestow it
on somebody. But the results of extravagance are ruinous. The property
of the country, like the freedom of the country, belongs to the people
of the country. They have not empowered their Government to take a
dollar of it except for a necessary public purpose. But if the
Constitution conferred such right, sound economics would forbid it.
Nothing is more, destructive of the progress of the Nation than
government extravagance. It means an increase in the burden of taxation,
dissipation of the returns from enterprise, a decrease in the real value
of wages, with ultimate stagnation and decay. The whole theory of our
institutions is based on the liberty and independence of the individual.
He is dependent on himself for support and therefore entitled to the
rewards of his own industry. He is not to be deprived of what he earns
that others may be benefited by what they do not earn. What he saves
through his private effort is not to be wasted by Government
extravagance.

Our national activities have become so vast that it is necessary to
scrutinize each item of public expenditure if we are to apply the
principle of economy. At the last session we made an immediate increase
in the annual budget of more than $100,000,000 in benefits conferred on
the veterans of three wars, public buildings, and river and harbor
improvement. Many projects are being broached requiring further large
outlays. I am convinced that it would be greatly for the welfare of the
country if we avoid at the present session all commitments except those
of the most pressing nature. From a reduction of the debt and taxes will
accrue a wider benefit to all the people of this country than from
embarking on any new enterprise. When our war debt is decreased we shall
have resources for expansion. Until that is accomplished we should
confine ourselves to expenditures of the most urgent necessity.

The Department of Commerce has performed a most important function in
making plans and securing support of all kinds of national enterprise
for the elimination of waste. Efficiency has been greatly promoted
through good management and the constantly increasing cooperation of the
wage earners throughout the whole realm of private business. It is my
opinion that this whole development has been predicated on the
foundation of a protective tariff.

TAX REDUCTION

As a result of economy of administration by the Executive and of
appropriation by the Congress, the end of this fiscal year will leave a
surplus in the Treasury estimated at $383,000,000. Unless otherwise
ordered, such surplus is used for the retirement of the war debt. A bond
which can be retired today for 100 cents will cost the people 104 1/4
cents to retire a year from now. While I favor a speedy reduction of the
debt as already required by law and in accordance with the promises made
to the holders of our Liberty bonds when they were issued, there is no
reason why a balanced portion of surplus revenue should not be applied
to a reduction of taxation. It can not be repeated too often that the
enormous revenues of this Nation could not be collected without becoming
a charge on all the people whether or not they directly pay taxes.
Everyone who is paying or the bare necessities of fool and shelter and
clothing, without considering the better things of life, is indirectly
paying a national tax. The nearly 20,000,000 owners of securities, the
additional scores of millions of holders of insurance policies and
depositors in savings banks, are all paying a national tax. Millions of
individuals and corporations are making a direct contribution to the
National Treasury which runs from 11/2 to 25 per cent of their income,
besides a number of special requirements, like automobile and admission
taxes. Whenever the state of the Treasury will permit, I believe in a
reduction of taxation. I think the taxpayers are entitled to it. But I
am not advocating tax reduction merely for the benefit of the taxpayer;
I am advocating it for the benefit of the country.

If it appeared feasible, I should welcome permanent tax reduction at
this time. The estimated surplus, however, for June 30, 1928, is not
much larger than is required in a going business of nearly
$4,000,000,000. We have had but a few months' experience under the
present revenue act and shall need to know what is developed by the
returns of income produced under it, which are not required t o be made
until about the time this session terminates, and what the economic
probabilities of the country are in the latter part of 1927, before we
can reach any justifiable conclusion as to permanent tax reduction.
Moreover the present surplus results from many nonrecurrent items.
Meantime, it is possible to grant some real relief by a simple measure
making reductions in the payments which accrue on the 15th of March and
June, 1927. I am very strongly of the conviction that this is so much a
purely business matter that it ought not to be dealt with in a partisan
spirit. The Congress has already set the notable example of treating tax
problems without much reference to party, which might well be continued.
What I desire to advocate most earnestly is relief for the country from
unnecessary tax burdens. We can not secure that if we stop to engage in
a partisan controversy. As I do not think any change in the special
taxes, or tiny permanent reduction is practical, I therefore urge both
parties of the House Ways and Means Committee to agree on a bill
granting the temporary relief which I have indicated. Such a reduction
would directly affect millions of taxpayers, release large sums for
investment in new enterprise, stimulating industrial production and
agricultural consumption, and indirectly benefiting every family in the
whole country. These are my convictions stated with full knowledge that
it is for the Congress to decide whether they judge it best to make such
a reduction or leave the surplus for the present year to be applied to
retirement of the war debt. That also is eventually tax reduction.

PROTECTIVE TARIFF

It is estimated that customs receipts for the present fiscal year will
exceed $615,000,000, the largest which were ever secured from that
source. The value of our imports for the last fiscal year was
$4,466,000,000, an increase of more than 71 per cent since the present
tariff law went into effect. Of these imports about 65 per cent, or,
roughly, $2,900,000,000, came in free of duty, which means that the
United States affords a duty-free market to other countries almost equal
in value to the total imports of Germany and greatly exceeding the total
imports of France. We have admitted a greater volume of free imports
than any other country except England.

We are, therefore, levying duties on about $1,550,000,000 of imports.
Nearly half of this, or $700,000,000, is subject to duties for the
protection of agriculture and have their origin in countries other than
Europe. They substantially increased the prices received by our farmers
for their produce. About $300,000.000 more is represented by luxuries
such as costly rugs, furs, precious stones, etc. This leaves only about
$550,000,000 of our imports under a schedule of duties which is in
general under consideration when there is discussion of lowering the
tariff. While the duties on this small portion, representing only about
12 per cent of our imports, undoubtedly represent the difference between
a fair degree of prosperity or marked depression to many of our
industries and the difference between good pay and steady work or wide
unemployment to many of our wage earners, it is impossible to conceive
how other countries or our own importers could be greatly benefited if
these duties are reduced. Those who are starting an agitation for a
reduction of tariff duties, partly at least for the benefit of those to
whom money has been lent abroad, ought to know that there does not seem
to be a very large field within the area of our imports in which
probable reductions would be advantageous to foreign goods. Those who
wish to benefit foreign producers are much more likely to secure that
result by continuing the present enormous purchasing power which comes
from our prosperity that increased our imports over 71 per cent in four
years than from any advantages that are likely to accrue from a general
tariff reduction.

AGRICULTURE

The important place which agriculture holds in the economic and social
life of the Nation can not be overestimated. The National Government is
justified in putting forth every effort to make the open country a
desirable place to live. No condition meets this requirement which fails
to supply a fair return on labor expended and capital invested. While
some localities and some particular crops furnish exceptions, in general
agriculture is continuing to make progress in recovering from the
depression of 1921 and 1922. Animal products and food products are in a
more encouraging position, while cotton, due to the high prices of past
years supplemented by ideal weather conditions, has been stimulated to a
point of temporary over production. Acting on the request of the cotton
growing interests, appointed a committee to assist in carrying out their
plans. As it result of this cooperation sufficient funds have been
pledged to finance the storage and carrying of 4,000,000 bales of
cotton. Whether those who own the cotton are willing to put a part of
their stock into this plan depends on themselves. The Federal Government
has cooperated in providing ample facilities. No method of meeting the
situation would be adequate which does not contemplate a reduction of
about one-third in the acreage for the coming year. The responsibility
for making the plan effective lies with those who own and finance cotton
and cotton lands.

The Department of Agriculture estimates the net income of agriculture
for the year 1920-21 at only $375,000,000; for 1924-25, $2,656,000,000;
for 1925-26, $2,757,000,000. This increase has been brought about in
part by the method already referred to, of Federal tax reduction, the
elimination of waste, and increased efficiency in industry. The wide gap
that existed a few years ago between the index price of agricultural
products and the index price of other products has been gradually
closing up, though the recent depression in cotton has somewhat enlarged
it. Agriculture had on the whole been going higher while industry had
been growing lower. Industrial and commercial activities, being carried
on for the most part by corporations, are taxed at a much higher rate
than farming, which is carried on by individuals. This will inevitably
make industrial commodity costs high while war taxation lasts. It is
because of this circumstance that national tax reduction has a very
large indirect benefit upon the farmer, though it can not relieve him
from the very great burden of the local taxes which he pays directly. We
have practically relieved the farmer of any Federal income tax.

There is agreement on all sides that some portions of our agricultural
industry have lagged behind other industries in recovery from the war
and that further improvement in methods of marketing of agricultural
products is most desirable. There is belief also that the Federal
Government can further contribute to these ends beyond the many helpful
measures taken during the last five years through the different acts of
Congress for advancing the interests of the farmers.

The packers and stockyards act,

Establishing of the intermediate credit banks for agricultural purposes,

The Purnell Act for agricultural research,

The Capper-Volstead Cooperative Marketing Act,

The cooperative marketing act of 1926,

Amendments to the warehousing act,

The enlargement of the activities of the Department of Agriculture,

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

The tariff on agricultural products,

The large Federal expenditure in improvement of waterways and highways,

The reduction of Federal taxes, in all comprise a great series of
governmental actions in the advancement of the special interest of
agriculture.

In determination of what further measures may be undertaken it seems to
me there are certain pitfalls which must be avoided and our test in
avoiding them should be to avoid disaster to the farmer himself.

Acting upon my recommendation, the Congress has ordered the interstate
Commerce Commission to investigate the freight-rate structure, directing
that such changes shall be made in freight rates as will promote freedom
of movement of agricultural products. Railroad consolidation which I am
advocating would also result in a situation where rates could be made
more advantageous for farm produce, as has recently been done in the
revision of rates on fertilizers in the South. Additional benefit will
accrue from the development of our inland waterways. The Mississippi
River system carries a commerce of over 50,000,000 tons at a saving of
nearly $18,000,000 annually. The Inland Waterways Corporation operates
boats on 2,500 miles of navigable streams and through its relation with
165 railroads carries freight into and out of 45 States of the Union.
During the past six months it has handled over 1,000,000 bushels of
grain monthly and by its lower freight rates has raised the price of
such grain to the farmer probably 21/2 cents to 3 cents a bushel. The
highway system on which the Federal Government expends about $85,000,000
a year is of vital importance to the rural regions.

The advantages to be derived from a more comprehensive and less
expensive system of transportation for agriculture ought to be
supplemented by provision for an adequate supply of fertilizer at a
lower cost than it is at present obtainable. This advantage we are
attempting to secure by the proposed development at Muscle Shoals, and
there are promising experiments being made in synthetic chemistry for
the production of nitrates.

A survey should be made of the relation of Government grazing lands to
the livestock industry. Additional legislation is desirable more
definitely to establish the place of grazing in the administration of
the national forests, properly subordinated to their functions of
producing timber and conserving the water supply. Over 180,000,000 acres
of grazing lands are still pastured as commons in the public domain with
little or no regulation. This has made their use so uncertain that it
has contributed greatly to the instability of the livestock industry.
Very little of this land is suited to settlement or private ownership.
Some plan ought to be adopted for its use in grazing, corresponding
broadly to that already successfully applied to the national forests.

The development of sound and strong cooperative associations is of
fundamental importance to our agriculture. It is encouraging to note,
therefore, that a vigorous and healthy growth in the cooperative
movement is continuing. Cooperative associations reporting to the
Department of Agriculture at the end of 1925 had on their membership
rolls a total of 2,700,000 producers. Their total business in 1925
amounted to approximately $2,400,000,000, compared with $635,800,000 in
1915. Legislative action to assist cooperative associations and
supplement their efforts was passed at the last session of Congress.
Important credit measures were also provided by Congress in 1923 which
have been of inestimable value to the cooperative associations. Although
the Federal credit agencies have served agriculture well, I think it may
be possible to broaden and strengthen the service of these institutions.

Attention is again directed to the surplus problem of agriculture by the
present cotton situation. Surpluses often affect prices of various farm
commodities in a disastrous manner, and the problem urgently demands a
solution. Discussions both in and out of Congress during the past few
years have given us a better understanding of the subject, and it is my
hope that out of the various proposals made the basis will be found for
a sound and effective solution upon which agreement can be reached. In
my opinion cooperative marketing associations will be important aids to
the ultimate solution of the problem. It may well be, however, that
additional measures will be needed to supplement their efforts. I
believe all will agree that such measures should not conflict with the
best interests of the cooperatives, but rather assist and strengthen
them. In working out this problem to any sound conclusion it is
necessary to avoid putting the Government into the business of
production or marketing or attempting to enact legislation for the
purpose of price fixing. The farmer does not favor any attempted
remedies that partake of these elements. He has a sincere and candid
desire for assistance. If matched by an equally sincere and candid
consideration of the different remedies proposed a sound measure of
relief ought to result. It is unfortunate that no general agreement has
been reached by the various agricultural interests upon any of the
proposed remedies. Out of the discussion of various proposals which can
be had before the Committees of Agriculture some measure ought to be
perfected which would be generally satisfactory.

Due to the emergency arising from a heavy tropical storm in southern
Florida, I authorized the Secretary of Agriculture to use certain funds
in anticipation of legislation to enable the farmers in that region to
plant their crops. The department will present a bill ratifying the
loans which were made for this purpose.

Federal legislation has been adopted authorizing the cooperation of the
Government with States and private owners in the protection of forest
lands from fire. This preventive measure is of such great importance
that I have recommended for it an increased appropriation.

Another preventive measure of great economic and sanitary importance is
the eradication of tuberculosis in cattle. Active work is now in
progress in one-fourth of the counties of the United States to secure
this result. Over 12,000,000 cattle have been under treatment, and the
average degree of infection has fallen from 4.9 per cent to 2.8 per
cent. he Federal Government is making substantial expenditures for this
purpose.

Serious damage is threatened to the corn crop by the European corn
borer. Since 1917 it has spread from eastern New England westward into
Indiana and now covers about 100,000 square miles. It is one of the most
formidable pests because it spreads rapidly and is exceedingly difficult
of control. It has assumed a menace that is of national magnitude and
warrants the Federal Government in extending its cooperation to the
State and local agencies which are attempting to prevent its further
spread and secure its eradication.

The whole question of agriculture needs most careful consideration. In
the past few years the Government has given this subject more attention
than any other and has held more consultations in relation to it than on
any other subject. While the Government is not to be blamed for failure
to perform the impossible, the agricultural regions are entitled to know
that they have its constant solicitude and sympathy. Many of the farmers
are burdened with debts and taxes which they are unable to carry. We are
expending in this country many millions of dollars each year to increase
farm production. We ought now to put more emphasis on the question of
farm marketing. If a sound solution of a permanent nature can be found
for this problem, the Congress ought not to hesitate to adopt it.

DEVELOPMENT OF WATER RESOURCES

In previous messages I have referred to the national importance of the
proper development of our water resources. The great projects of
extension of the Mississippi system, the protection an development of
the lower Colorado River, are before Congress, and I have previously
commented upon them. I favor the necessary legislation to expedite these
projects. Engineering studies are being made for connecting the Great
Lakes with the North Atlantic either through an all-American canal or by
way of the St. Lawrence River. These reports will undoubtedly be before
the Congress during its present session. It is unnecessary to dwell upon
the great importance of such a waterway not only to our mid-continental
basin but to the commerce and development of practically the whole
Nation. Our river and harbor improvement should be continued in
accordance with the present policy. Expenditure of this character is
compatible with economy; it is in the nature of capital investment. Work
should proceed on the basic trunk lines if this work is to be a success.
If the country will be content to be moderate and patient and permit
improvements to be made where they will do the greatest general good,
rather than insisting on expenditures at this time on secondary
projects, our internal Waterways can be made a success. If proposes
legislation results in a gross manifestation of local jealousies and
selfishness, this program can not be carried out. Ultimately we can take
care of extensions, but our first effort should be confined to the main
arteries.

Our inland commerce has been put to great inconvenience and expense by
reason of the lowering of the water level of the Great Lakes. This is an
international problem on which competent engineers are making reports.
Out of their study it is expected that a feasible method will be
developed for raising the level to provide relief for our commerce and
supply water for drainage. Whenever a practical plan is presented it
ought to be speedily adopted.

RECLAMATION

It is increasingly evident that the Federal Government must in the
future take a leading part in the impounding of water for conservation
with incidental power for the development of the irrigable lands of the
and region. The unused waters of the West are found mainly in large
rivers. Works to store and distribute these have such magnitude and cost
that they are not attractive to private enterprise. Water is the
irreplaceable natural resource. Its precipitation can not be increased.
Its storage on the higher reaches of streams, to meet growing needs, to
be used repeatedly as it flows toward the seas, is a practical and
prudent business policy.

The United States promises to follow the course of older irrigation
countries, where recent important irrigation developments have been
carried out as national undertakings. It is gratifying, therefore, that
conditions on Federal reclamation projects have become satisfactory. The
gross value of crop, grown with water from project works increased from
$110,000,000 in 1924 to $131,000,000 in 1925. The adjustments made last
year by Congress relieved irrigators from paying construction costs on
unprofitable land, and by so doing inspired new hope and confidence in
ability to meet the payments required. Construction payments by water
users last year were the largest in the history of the bureau.

The anticipated reclamation fund will be fully absorbed for a number of
years in the completion of old projects and the construction of projects
inaugurated in the past three years. We should, however, continue to
investigate and study the possibilities of a carefully planned
development of promising projects, logically of governmental concern
because of their physical magnitude, immense cost, and the interstate
and international problems involved. Only in this way may we be fully
prepared to meet intelligently the needs of our fast-growing population
in the years to come.

TRANSPORTATION

It would be difficult to conceive of any modern activity which
contributes more to the necessities and conveniences of life than
transportation. Without it our present agricultural production and
practically all of our commerce would be completely prostrated. One of
the large contributing causes to the present highly satisfactory state
of our economic condition is the prompt and dependable service,
surpassing all our previous records, rendered by the railroads. This
power has been fostered by the spirit of cooperation between Federal and
State regulatory commissions. To render this service more efficient and
effective and to promote a more scientific regulation, the process of
valuing railroad properties should be simplified and the primary
valuations should be completed as rapidly as possible. The problem of
rate reduction would be much simplified by a process of railroad
consolidations. This principle has already been adopted as Federal law.
Experience has shown that a more effective method must be provided.
Studies have already been made and legislation introduced seeking to
promote this end. It would be of great advantage if it could be taken up
at once and speedily enacted. The railroad systems of the country and
the convenience of all the people are waiting on this important
decision.

MERCHANT MARINE

It is axiomatic that no agricultural and industrial country can get the
full benefit of its own advantages without a merchant marine. We have
been proceeding under the act of Congress that contemplates the
establishment of trade routes to be ultimately transferred to private
ownership and operation. Due to temporary conditions abroad and at home
we have a large demand just now for certain types of freight vessels.
Some suggestion has been made for new construction. I do not feel that
we are yet warranted in entering, that field. Such ships as we might
build could not be sold after they are launched for anywhere near what
they would cost. We have expended over $250,000,000 out of the public
Treasury in recent years to make up the losses of operation, not
counting the depreciation or any cost whatever of our capital
investment. The great need of our merchant marine is not for more ships
but for more freight.

Our merchants are altogether too indifferent about using American ships
for the transportation of goods which they send abroad or bring home.
Some of our vessels necessarily need repairs, which should be made. I do
not believe that the operation of our fleet is as economical and
efficient as it could be made if placed under a single responsible head,
leaving the Shipping Board free to deal with general matters of policy
and regulation.

RADIO LEGISLATION

The Department of Commerce has for some years urgently presented the
necessity for further legislation in order to protect radio listeners
from interference between broadcasting stations and to carry out other
regulatory functions. Both branches of Congress at the last session
passed enactments intended to effect such regulation, but the two bills
yet remain to be brought into agreement and final passage.

Due to decisions of the courts, the authority of the department under
the law of 1912 has broken down; many more stations have been operating
than can be accommodated within the limited number of wave lengths
available; further stations are in course of construction; many stations
have departed from the scheme of allocation set down by the department,
and the whole service of this most important public function has drifted
into such chaos as seems likely, if not remedied, to destroy its great
value. I most urgently recommend that this legislation should be
speedily enacted.

I do not believe it is desirable to set up further independent agencies
in the Government. Rather I believe it advisable to entrust the
important functions of deciding who shall exercise the privilege of
radio transmission and under what conditions, the assigning of wave
lengths and determination of power, to a board to be assembled whenever
action on such questions becomes necessary. There should be right of
appeal to the courts from the decisions of such board. The
administration of the decisions of the board and the other features of
regulation and promotion of radio in the public interest, together with
scientific research, should remain in the Department of Commerce. Such
an arrangement makes for more expert, more efficient, and more
economical administration that an independent agency or board, whose
duties, after initial stages, require but little attention, in which
administrative functions are confused with semijudicial functions and
from which of necessity there must be greatly increased personnel and
expenditure.

THE WAGE EARNER

The great body of our people are made up of wage earners. Several
hundred thousands of them are on the pay rolls of the United States
Government. Their condition very largely is fixed by legislation. We
have recently provided increases in compensation under a method of
reclassification and given them the advantage of a liberal retirement
system as a support for their declining years. Most of them are under
the merit system, which is a guaranty of their intelligence, and the
efficiency of their service is a demonstration of their loyalty. The
Federal Government should continue to set a good example for all other
employers.

In the industries the condition of the wage earner has steadily
improved. The 12-hour day is almost entirely unknown. Skilled labor is
well compensated. But there are unfortunately a multitude of workers who
have not yet come to share in the general prosperity of the Nation. Both
the public authorities and private enterprise should be solicitous to
advance the welfare of this class. The Federal Government has been
seeking to secure this end through a protective tariff, through
restrictive immigration, through requiring safety devices for the
prevention of accidents, through the granting of workman's compensation,
through civilian vocational rehabilitation and education, through
employment information bureaus, and through such humanitarian relief as
was provided in the maternity and infancy legislation. It is a
satisfaction to report that a more general condition of contentment
exists among wage earners and the country is more free from labor
disputes than it has been for years. While restrictive immigration has
been adopted in part for the benefit of the wage earner, and in its
entirety for the benefit of the country, it ought not to cause a
needless separation of families and dependents from their natural source
of support contrary to the dictates of humanity.

BITUMINOUS COAL

No progress appears to have been made within large areas of the
bituminous coal industry toward creation of voluntary machinery by which
greater assurance can be given to the public of peaceful adjustment of
wage difficulties such as has been accomplished in the anthracite
industry. This bituminous industry is one of primary necessity and bears
a great responsibility to the Nation for continuity of supplies. As the
wage agreements in the unionized section of the industry expire on April
1 next, and as conflicts may result which may imperil public interest,
and have for many years often called for action of the Executive in
protection of the public, I again recommend the passage of such
legislation as will assist the Executive in dealing with such
emergencies through a special temporary board of conciliation and
mediation and through administrative agencies for the purpose of
distribution of coal and protection of the consumers of coal from
profiteering. At present the Executive is not only without authority to
act but is actually prohibited by law from making any expenditure to
meet the emergency of a coal famine.

JUDICIARY

The Federal courts hold a high position in the administration of justice
in the world. While individual judicial officers have sometimes been
subjected to just criticism, the courts as a whole have maintained an
exceedingly high standard. The Congress may well consider the question
of supplying fair salaries and conferring upon the Supreme Court the
same rule-making power on the law side of the district courts that they
have always possessed on the equity side. A bill is also pending
providing for retirement after a certain number of years of service,
although they have not been consecutive, which should have your
favorable consideration. These faithful servants of the Government are
about the last that remain to be provided for in the postwar
readjustments.

BANKING

There has been pending in Congress for nearly three years banking
legislation to clarify the national bank act and reasonably to increase
the powers of the national banks. I believe that within the limitation
of sound banking principles Congress should now and for the future place
the national banks upon a fair equality with their competitors, the
State banks, and I trust that means may be found so that the differences
on branch-banking legislation between the Senate and the House of
Representatives may be settled along sound lines and the legislation
promptly enacted.

It would be difficult to overestimate the service which the Federal
reserve system has already rendered to the country. It is necessary only
to recall the chaotic condition of our banking organization at the time
the Federal reserve system was put into operation. The old system
consisted of a vast number of independent banking units, with scattered
bank reserves which never could be mobilized in times of greatest need.
In spite of vast banking resources, there was no coordination of
reserves or any credit elasticity. As a consequence, a strain was felt
even during crop-moving periods and when it was necessary to meet other
seasonal and regularly recurring needs.

The Federal reserve system is not a panacea for all economic or
financial ills. It can not prevent depression in certain industries
which are experiencing overexpansion of production or contraction of
their markets. Its business is to furnish adequate credit and currency
facilities. This it has succeeded in doing, both during the war and in
the more difficult period of deflation and readjustment which followed.
It enables us to look to the future with confidence and to make plans
far ahead, based on the belief that the Federal reserve system will
exercise a steadying influence on credit conditions and thereby prevent
tiny sudden or severe reactions from the period of prosperity which we
are now enjoying. In order that these plans may go forward, action
should be taken at the present session on the question of renewing the
banks' charters and thereby insuring a continuation of the policies and
present usefulness of the Federal reserve system.

FEDERAL REGULATION

I am in favor of reducing, rather than expanding, Government bureaus
which seek to regulate and control the business activities of the
people. Everyone is aware that abuses exist and will exist so long as we
are limited by human imperfections. Unfortunately, human nature can not
be changed by an act of the legislature. When practically the sole
remedy for many evils lies in the necessity of the people looking out
for themselves and reforming their own abuses, they will find that they
are relying on a false security if the Government assumes to hold out
the promise that it is looking out for them and providing reforms for
them. This principle is preeminently applicable to the National
Government. It is too much assumed that because an abuse exists it is
the business of the National Government to provide a remedy. The
presumption should be that it is the business of local and State
governments. Such national action results in encroaching upon the
salutary independence of the States and by undertaking to supersede
their natural authority fills the land with bureaus and departments
which are undertaking to do what it is impossible for them to accomplish
and brings our whole system of government into disrespect and disfavor.
We ought to maintain high standards. We ought to punish wrongdoing.
Society has not only the privilege but the absolute duty of protecting
itself and its individuals. But we can not accomplish this end by
adopting a wrong method. Permanent success lies in local, rather than
national action. Unless the locality rises to its own requirements,
there is an almost irresistible impulse for the National Government to
intervene. The States and the Nation should both realize that such
action is to be adopted only as a last resort.

THE NEGRO

The social well-being of our country requires our constant effort for
the amelioration of race prejudice and the extension to all elements of
equal opportunity and equal protection under the laws which are
guaranteed by the. Constitution. The Federal Government especially is
charged with this obligation in behalf of the colored people of the
Nation. Not only their remarkable progress, their devotion and their
loyalty, but, our duty to ourselves under our claim that we are an
enlightened people requires us to use all our power to protect them from
the crime of lynching. Although violence of this kind has very much
decreased, while any of it remains we can not justify neglecting to make
every effort to eradicate it by law.

The education of the colored race under Government encouragement is
proceeding successfully and ought to have continuing support. An
increasing need exists for properly educated and trained medical skill
to be devoted to the service of this race.

INSULAR POSSESSIONS

This Government holds in sacred trusteeship islands which it has
acquired in the East and West Indies. In all of them the people are more
prosperous than at any previous time. A system of good roads, education,
and general development is in progress. The people are better governed
than ever before and generally content.

In the Philippine Islands Maj. Gen. Leonard Wood has been Governor
General for five years and has administered his office with tact and
ability greatly to the success of the Filipino people. These are a proud
and sensitive race, who are making such progress with our cooperation
that we can view the results of this experiment with great satisfaction.
As we are attempting to assist this race toward self-government, we
should look upon their wishes with great respect, granting their
requests immediately when they are right, yet maintaining a frank
firmness in refusing when they are wrong. We shall measure their
progress in no small part by their acceptance of the terms of the
organic law under which the islands are governed and their faithful
observance of its provisions. Need exists for clarifying the duties of
the auditor and declaring them to be what everyone had supposed they
were. We have placed our own expenditures under the supervision of the
Comptroller General. It is not likely that the expenditures in the
Philippine Islands need less supervision than our own. The Governor
General is hampered in his selection of subordinates by the necessity of
securing a confirmation, which has oftentimes driven him to the
expediency of using Army officers in work for which civilian experts
would be much better fitted. Means should be provided for this and such
other purposes as he may require out of the revenue which this
Government now turns back to the Philippine treasury.

In order that these possessions might stiffer no seeming neglect, I have
recently sent Col. Carmi A. Thompson to the islands to make a survey in
cooperation with the Governor General to suggest what might be done to
improve conditions. Later, I may make a more extended report including
recommendations. The economic development of the islands is very
important. They ought not to be turned back to the people until they are
both politically fitted for self-government and economically
independent. Large areas are adaptable to the production of rubber. No
one contemplates any time in the future either under the present or a
more independent form of government when we should not assume some
responsibility for their defense. For their economic advantage, for the
employment of their people, and as a contribution to our power of
defense which could not be carried on without rubber, I believe this
industry should be encouraged. It is especially adapted to the Filipino
people themselves, who might cultivate it individually on a small
acreage. It could be carried on extensively by American capital in a way
to furnish employment at good wages. I am opposed to the promotion of
any policy that does not provide for absolute freedom on the part of the
wage earners and do not think we should undertake to give power for
large holdings of land in the islands against the opposition of the
people of the locality. Any development of the islands must be solely
with the first object of benefiting the people of the islands. At an
early day, these possessions should be taken out from under all military
control and administered entirely on the civil side of government.

NATIONAL DEFENSE

Our policy of national defense is not one of making war, but of insuring
peace. The land and sea force of America, both in its domestic and
foreign implications, is distinctly a peace force. It is an arm of the
police power to guarantee order and the execution of the law at home and
security to our citizens abroad. No self-respecting nation would neglect
to provide an army and navy proportionate to its population, the extent
of its territory, and the dignity of the place which it occupies in the
world. When it is considered that no navy in the world, with one
exception, approaches ours and none surpasses it, that our Regular Army
of about 115,000 men is the equal of any other like number of troops,
that our entire permanent and reserve land and sea force trained and
training consists of a personnel of about 610,000, and that our annual
appropriations are about $680,000,000 a year, expended under the
direction of an exceedingly competent staff, it can not be said that our
country is neglecting its national defense. It is true that a cult of
disparagement exists, but that candid examination made by the Congress
through its various committees has always reassured the country and
demonstrated that it is maintaining the most adequate defensive forces
in these present years that it has ever supported in time of peace.

This general policy should be kept in effect. Here and there temporary
changes may be made in personnel to meet requirements in other
directions. Attention should be given to submarines, cruisers, and air
forces. Particular points may need strengthening, but as a whole our
military power is sufficient.

The one weak place in the whole line is our still stupendous war debt.
In any modern campaign the dollars are the shock troops. With a depleted
treasury in the rear, no army can maintain itself in the field. A
country loaded with debt is a country devoid of the first line of
defense. Economy is the handmaid of preparedness. If we wish to be able
to defend ourselves to the full extent of our power in the future, we
shall discharge as soon as possible the financial burden of the last
war. Otherwise we would face a crisis with a part of our capital
resources already expended.

The amount and kind of our military equipment is preeminently a question
for the decision of the Congress, after giving due consideration to the
advice of military experts and the available public revenue. Nothing is
more laudable than the cooperation of the agricultural and industrial
resources of the country for the purpose of supplying the needs of
national defense. In time of peril the people employed in these
interests volunteered in a most self-sacrificing way, often at the
nominal charge of a dollar a year. But the Army and Navy are not
supported for the benefit of supply concerns; supply concerns are
supported for the benefit of the Army and Navy. The distribution of
orders on what is needed from different concerns for the purpose of
keeping up equipment and organization is perfectly justified, but any
attempt to prevail upon the Government to purchase beyond its needs
ought not to be tolerated. It is eminently fair that those who deal with
the Government should do so at a reasonable profit. However, public
money is expended not that some one may profit by it, but in order to
serve a public purpose.

While our policy of national defense will proceed in order that we may
be independent and self-sufficient, I am opposed to engaging in any
attempt at competitive armaments. No matter how much or how little some
other country may feel constrained to provide, we can well afford to set
the example, not of being dictated to by others, but of adopting our own
standards. We are strong enough to pursue that method, which will be a
most wholesome model for the rest of the world. We are eminently
peaceful, but we are by no means weak. While we submit our differences
with others, not to the adjudication of force, but of reason, it is not
because we are unable to defend our rights. While we are doing our best
to eliminate all resort to war for the purpose of settling disputes, we
can not but remember that the peace we now enjoy had to be won by the
sword and that if the rights of our country are to be defended we can
not rely for that purpose upon anyone but ourselves. We can not shirk
the responsibility, which is the first requisite of all government, of
preserving its own integrity and maintaining the rights of its own
citizens. It is only in accordance with these principles that we can
establish any lasting foundations for an honorable and permanent peace.

It is for these reasons that our country, like any other country,
proposes to provide itself with an army and navy supported by a merchant
marine. Yet these are not for competition with any other power. For
years we have besought nations to disarm. We have recently expressed our
willingness at Geneva to enter into treaties for the limitation of all
types of warships according to the ratio adopted at the Washington
Conference. This offer is still pending. While we are and shall continue
to be armed it is not as a menace, but rather a common assurance of
tranquility to all the peaceloving people of the world. For us to do any
less would be to disregard our obligations, evade our responsibilities,
and jeopardize our national honor.

VETERANS

This country, not only because it is bound by honor but because of the
satisfaction derived from it, has always lavished its bounty upon its
veterans. For years a service pension has been bestowed upon the Grand
Army on reaching a certain age. Like provision has been made for the
survivors of the Spanish War. A liberal future compensation has been
granted to all the veterans of the World War. But it is in the case of
the, disabled and the dependents that the Government exhibits its
greatest solicitude. This work is being well administered by the
Veterans' Bureau. The main unfinished feature is that of
hospitalization. This requirement is being rapidly met. Various veteran
bodies will present to you recommendations which should have your
careful consideration. At the last session we increased our annual
expenditure for pensions and relief on account of the veterans of three
wars. While I approve of proper relief for all suffering, I do not favor
any further extension of our pension system at this time.

ALIEN PROPERTY

We still have in the possession of the Government the alien property. It
has always been the policy of America to hold that private enemy
property should not be confiscated in time of war. This principle we
have scrupulously observed. As this property is security for the claims
of our citizens and our Government, we can not relinquish it without
adequate provision for their reimbursement. Legislation for the return
of this property, accompanied by suitable provisions for the liquidation
of the claims of our citizens and our Treasury, should be adopted. If
our Government releases to foreigners the security which it holds for
Americans, it must at the same time provide satisfactory safeguards for
meeting American claims.

PROHIBITION

The duly authorized public authorities of this country have made
prohibition the law of the land. Acting under the Constitution the
Congress and the legislatures of practically all the, States have
adopted legislation for its enforcement. Some abuses have arisen which
require reform. Under the law the National Government has entrusted to
the Treasury Department the especial duty of regulation and enforcement.
Such supplementary legislation as it requires to meet existing
conditions should be carefully and speedily enacted. Failure to support
the Constitution and observe the law ought not to be tolerated by public
opinion. Especially those in public places, who have taken their oath to
support the Constitution, ought to be most scrupulous in its observance.
Officers of the Department of Justice throughout the country should be
vigilant in enforcing the law, but local authorities, which had always
been mainly responsible for the enforcement of law in relation to
intoxicating liquor, ought not to seek evasion by attempting to shift
the burden wholly upon the Federal agencies. Under the Constitution the
States are jointly charged with the Nation in providing for the
enforcement of the prohibition amendment. Some people do not like the
amendment, some do not like other parts of the Constitution, some do not
like any of it. Those who entertain such sentiments have a perfect right
to seek through legal methods for a change. But for any of our
inhabitants to observe such parts of the Constitution as they like,
while disregarding others, is a doctrine that would break down all
protection of life and property and destroy the American system of
ordered liberty.

FOREIGN RELATIONS

The foreign policy of this Government is well known. It is one of peace
based on that mutual respect that arises from mutual regard for
international rights and the discharge of international obligations. It
is our purpose to promote understanding and good will between ourselves
and all other people. The American people are altogether lacking in an
appreciation of the tremendous good fortune that surrounds their
international position. We have no traditional enemies. We are not
embarrassed over any disputed territory. We have no possessions that are
coveted by others; they have none that are coveted by us. Our borders
are unfortified. We fear no one; no one fears us. All the world knows
that the whole extent of our influence is against war and in favor of
peace, against the use of force and in favor of negotiation,
arbitration, and adjudication as a method of adjusting international
differences. We look with disfavor upon all aggressive warfare. We are
strong enough so that no one can charge us with weakness if we are slow
to anger. Our place is sufficiently established so that we need not be
sensitive over trifles. Our resources, are large enough so that we can
afford to be generous. At the same time we are a nation among nations
and recognize a responsibility not only to ourselves, but in the
interests of a stable and enlightened civilization, to protect and
defend the international rights of our Government and our citizens.

It is because of our historical detachment and the generations of
comparative indifference toward it by other nations that our public is
inclined to consider altogether too seriously the reports that we are
criticized abroad. We never had a larger foreign trade than at the
present time. Our good offices were never more sought and the necessity
for our assistance and cooperation was never more universally declared
in any time of peace. We know that the sentiments which we entertain
toward all other nations are those of the most sincere friendship and
good will and of all unbounded desire to help, which we are perfectly
willing to have judged by their fruits. In our efforts to adjust our
international obligations we have met with a response which, when
everything is considered, I believe history will record as a most
remarkable and gratifying demonstration of the sanctity with which
civilized nations undertake to discharge their mutual obligations. Debt
settlements have been negotiated with practically all of those who owed
us and all finally adjusted but two, which are, in process of
ratification. When we consider the real sacrifice that will be necessary
on the part of other nations, considering all their circumstances, to
meet their agreed payments, we ought to hold them in increased
admiration and respect. It is true that we have extended to them very
generous treatment, but it is also true that they have agreed to repay
its all that we loaned to them and some interest.

A special conference on the Chinese customs tariff provided for by the
treaty between the nine powers relating to the Chinese customs tariff
signed at Washington on February 6, 1922, was called by the Chinese
Government to meet at Peking, on October 26, 1925. We participated in
this conference through fully empowered delegates and, with good will,
endeavored to cooperate with the other participating powers with a view
to putting into effect promises made to China at the Washington
conference, and considering any reasonable proposal that might be made
by the Chinese Government for the revision of the treaties on the
subject of China's tariff. With these aims in view the American
delegation at the outset of the conference proposed to put into effect
the surtaxes provided for by the Washington treaty and to proceed
immediately to the negotiation of a treaty, which, among other things,
was to make provision for the abolition of taxes collected on goods in
transit, remove the tariff restrictions in existing treaties, and put
into effect the national tariff law of China.

Early in April of the present year the central Chinese Government was
ousted from power by opposing warring factions. It became impossible
under the circumstances to continue the negotiations. Finally, on July
3, the delegates of the foreign powers, including those of the United
States, issued a statement expressing their unanimous and earnest desire
to proceed with the work of the conference at the earliest possible
moment when the delegates of the Chinese Government are in a position to
resume discussions with the foreign delegates of the problems before the
conference. We are prepared to resume the negotiations thus interrupted
whenever a Government representing the Chinese people and acting on
their behalf presents itself. The fact that constant warfare between
contending Chinese factions has rendered it impossible to bring these
negotiations to a successful conclusion is a matter of deep regret.
Throughout these conflicts we have maintained a position of the most
careful neutrality. Our naval vessels in Asiatic waters, pursuant to
treaty rights, have been used only for the protection of American
citizens.

Silas H. Strawn, Esq., was sent to China as American commissioner to
cooperate with commissioners of the other powers in the establishment of
a commission to inquire into the present practice of extraterritorial
jurisdiction in China, with a view to reporting to the Governments of
the several powers their findings of fact in regard to these matters.
The commission commenced its work in January, 1926, and agreed upon a
joint report which was signed on September 16, 1926. The commission's
report has been received and is being studied with a view to determining
our future policy in regard to the question of extraterritorial
privileges under treaties between the United States and China.

The Preparatory Commission for the Disarmament Conference met at Geneva
on May 18 and its work has been proceeding almost continuously since
that date. It would be premature to attempt to form a judgment as to the
progress that has been made. The commission has had before it a
comprehensive list of questions touching upon all aspects of the
question of the limitation of armament. In the commission's discussions
many differences of opinion have developed. However, I am hopeful that
at least some measure of agreement will be reached as the discussions
continue. The American representation on the commission has consistently
tried to be helpful, and has kept before it the practical objective to
which the commission is working, namely, actual agreements for the
limitation of armaments. Our representatives will continue their work in
that direction.

One of the most encouraging features of the commission's work thus far
has been the agreement in principle among the naval experts of a
majority of the powers parties to the Washington treaty limiting naval
armament upon methods and standards for the comparison and further
limitation of naval armament. It is needless to say that at the proper
time I shall be prepared to proceed along practical lines to the
conclusion of agreements carrying further the work begun at the
Washington Conference in 1921.

DEPARTMENT REPORTS

Many important subjects which it is impossible even to mention in the
short space of an annual message you will find fully discussed in the
departmental reports. A failure to include them here is not to be taken
as indicating any lack of interest, but only a disinclination to state
inadequately what has been much better done in other documents.

THE CAPITAL CITY

We are embarking on an ambitious building program for the city of
Washington. The Memorial Bridge is under way with all that it holds for
use and beauty. New buildings are soon contemplated. This program should
represent the best that exists in the art and science of architecture.
Into these structures which must be considered as of a permanent nature
ought to go the aspirations of the Nation, its ideals expressed in forms
of beauty. If our country wishes to compete with others, let it not be
in the support of armaments but in the making of a beautiful capital
city. Let it express the soul of America. Whenever an American is at the
seat of his Government, however traveled and cultured he may be, he
ought to find a city of stately proportion, symmetrically laid out and
adorned with the best that there is in architecture, which would arouse
his imagination and stir his patriotic pride. In the coming years
Washington should be not only the art center of our own country but the
art center of the world. Around it should center all that is best in
science, in learning, in letters, and in art. These are the results that
justify the creation of those national resources with which we have been
favored.

AMERICAN IDEALS

America is not and must not be a country without ideals. They are
useless if they are only visionary; they are only valuable if they are
practical. A nation can not dwell constantly on the mountain tops. It
has to be replenished and sustained through the ceaseless toil of the
less inspiring valleys. But its face ought always to be turned upward,
its vision ought always to be fixed on high.

We need ideals that can be followed in daily life, that can be
translated into terms of the home. We can not expect to be relieved from
toil, but we do expect to divest it of degrading conditions. Work is
honorable; it is entitled to an honorable recompense. We must strive
mightily, but having striven there is a defect in our political and
social system if we are not in general rewarded with success. To relieve
the land of the burdens that came from the war, to release to the
individual more of the fruits of his own industry, to increase his
earning capacity and decrease his hours of labor, to enlarge the circle
of his vision through good roads and better transportation, to lace
before him the opportunity for education both in science and in art, to
leave him free to receive the inspiration of religion, all these are
ideals which deliver him from the servitude of the body and exalt him to
the service of the soul. Through this emancipation from the things that
are material, we broaden our dominion over the things that are
spiritual.

***

State of the Union Address
Calvin Coolidge
December 6, 1927

Members of the Congress:

It is gratifying to report that for the fourth consecutive year the
state of the Union in general is good. We are at peace. The country as a
whole has had a prosperity never exceeded. Wages are at their highest
range, employment is plentiful. Some parts of agriculture and industry
have lagged; some localities have suffered from storm and flood. But
such losses have been absorbed without serious detriment to our great
economic structure. Stocks of goods are moderate and a wholesome caution
is prevalent. Rates of interest for industry, agriculture, and
government have been reduced. Savers and investors are providing capital
for new construction in industry and public works. The purchasing power
of agriculture has increased. If the people maintain that confidence
which they are entitled to have in themselves, in each other, and in
America, a comfortable prosperity will continue.

CONSTRUCTIVE ECONOMY

Without constructive economy in Government expenditures we should not
now be enjoying these results or these prospects. Because we are not now
physically at war, some people are disposed to forget that our war debt
still remains. The Nation must make financial sacrifices, accompanied by
a stern self-denial in public expenditures, until we have conquered the
disabilities of our public finance. While our obligation to veterans and
dependents is large and continuing, the heavier burden of the national
debt is being steadily eliminated. At the end of this fiscal year it
will be reduced from about $26,600,000,000 to about $17,975,000,000.
Annual interest, including war savings, will have been reduced from
$1,055,000,000 to $670,0001,000. The sacrifices of the people, the
economy of the Government, are showing remarkable results. They should
be continued for the purpose of relieving the Nation of the burden of
interest and debt and releasing revenue for internal improvements and
national development.

Not only the amount, but the rate, of Government interest has been
reduced. Callable bonds have been refunded and paid, so that during this
year the average rate of interest on the present public debt for the
first time fell below 4 per cent. Keeping the credit of the Nation high
is a tremendously profitable operation.

TAX REDUCTION

The immediate fruit of economy and the retirement of the public debt is
tax reduction. The annual saving in interest between 1925 and 1929 is
$212,000,000. Without this no bill to relieve the taxpayers would be
worth proposing. The three measures already enacted leave our Government
revenues where they are not oppressive. Exemptions, have been increased
until 115,000,000 people make but 2,500,000 individual taxable returns,
so that further reduction should be mainly for the purpose of removing
inequalities. The Secretary of the Treasury has recommended a measure
which would give us a much better balanced system of taxation and
without oppression produce sufficient revenue. It has my complete
support.

Unforeseen contingencies requiring money are always arising. Our
probable surplus for June 30, 1929, is small. A slight depression in
business would greatly reduce our revenue because of our present method
of taxation. The people ought to take no selfish attitude of pressing
for removing moderate and fair taxes which might produce a deficit. We
must keep our budget balanced for each year. That is the corner stone of
our national credit, the trifling price we pay to command the lowest
rate of interest of any great power in the world. Any surplus can be
applied to debt reduction, and debt reduction is tax reduction. Under
the present circumstances it would be far better to leave the rates as
they are than to enact a bill carrying the peril of a deficit. This is
not a problem to be approached in a narrow or partisan spirit. All of
those who participate in finding a reasonable solution will be entitled
to participate in any credit that accrues from it without regard to
party. The Congress has already demonstrated that tax legislation can be
removed from purely political consideration into the realm of patriotic
business principles.

Any bill for tax reduction should be written by those who are
responsible for raising, managing, and expending the finances of the
Government. If special interests, too often selfish, always uninformed
of the national needs as a whole, with hired agents using their proposed
beneficiaries as engines of propaganda, are permitted to influence the
withdrawal of their property from taxation, we shall have a law that is
unbalanced and unjust, bad for business, bad for the country, probably
resulting in a deficit, with disastrous financial Consequences. The
Constitution has given the Members of the Congress sole authority to
decide what tax measures shall be presented for approval. While
welcoming information from any quarter, the Congress should continue to
exercise its own judgment in a matter so vital and important to all the
interests of the country as taxation.

NATIONAL DEFENSE

Being a nation relying not on force, but on fair dealing and good will,
to maintain peace with others, we have provided a moderate military
force in a form adapted solely to defense. It should be continued with a
very generous supply of officers and with the present base of personnel,
subject to fluctuations which may be temporarily desirable.

The five-year program for our air forces is in keeping with this same
policy and commensurate with the notable contributions of America to the
science of aeronautics. The provisions of the law lately enacted are
being executed as fast as the practical difficulties of an orderly and
stable development permit.

While our Army is small, prudence requires that it should be kept in a
high state of efficiency and provided with such supplies as would permit
of its immediate expansion. The garrison ration has lately been
increased. Recommendations for an appropriation of $6,166,000 for new
housing made to the previous Congress failed to pass. While most of the
Army is well housed, some of it which is quartered in wartime training
camps is becoming poorly housed. In the past three years $12,533,000
have been appropriated for reconstruction and repairs, and an
authorization has been approved of $22,301,000 for new housing, under
which $8,070,000 has already been appropriated. A law has also been
passed, complying with the request of the War Department, allocating
funds received from the sale of buildings and land for housing purposes.
The work, however, is not completed, so that other appropriations are
being recommended.

Our Navy is likewise a weapon of defense. We have a foreign commerce and
ocean lines of trade unsurpassed by any other country. We have outlying
territory in the two great oceans and long stretches of seacoast studded
with the richest cities in the world. We are responsible for the
protection of a large population and the greatest treasure ever bestowed
upon any people. We are charged with an international duty of defending
the Panama Canal. To meet these responsibilities we need a very
substantial sea armament. It needs aircraft development, which is being
provided under the five-year program. It needs submarines as soon as the
department decides upon the best type of construction. It needs airplane
carriers and a material addition to its force of cruisers. We can plan
for the future and begin a moderate building program.

This country has put away the Old World policy of competitive armaments.
It can never be relieved of the responsibility of adequate national
defense. We have one treaty secured by an unprecedented attitude of
generosity on our part for a limitation in naval armament. After most
careful preparation, extending over months, we recently made every
effort to secure a three-power treaty to the same end. We were granted
much cooperation by Japan, but we were unable to come to an agreement
with Great Britain. While the results of the conference were of
considerable value, they were mostly of a negative character. We know
now that no agreement can be reached which will be inconsistent with a
considerable building program on our part. We are ready and willing to
continue the preparatory investigations on the general subject of
limitation of armaments which have been started under the auspices of
the League of Nations.

We have a considerable cruiser tonnage, but a part of it is obsolete.
Everyone knew that had a three-power agreement been reached it would
have left us with the necessity of continuing our building program. The
failure to agree should not cause us to build either more or less than
we otherwise should. Any future treaty of limitation will call on us for
more ships. We should enter on no competition. We should refrain from no
needful program. It should be made clear to all the world that lacking a
definite agreement, the attitude of any other country is not to be
permitted to alter our own policy. It should especially be demonstrated
that propaganda will not cause us to change our course. Where there is
no treaty limitation, the size of the Navy which America is to have will
be solely for America to determine. No outside influence should enlarge
it or diminish it. But it should be known to all that our military power
holds no threat of aggrandizement. It is a guaranty of peace and
security at home, and when it goes abroad it is an instrument for the
protection of the legal rights of our citizens under international law,
a refuge in time of disorder, and always the servant of world peace.
Wherever our flag goes the rights of humanity increase.

MERCHANT MARINE

The United States Government fleet is transporting a large amount of
freight and reducing its drain on the Treasury. The Shipping Board is
constantly under pressure, to which it too often yields, to protect
private interests, rather than serve the public welfare. More attention
should be given to merchant ships as an auxiliary of the Navy. The
possibility of including their masters and crews in the Naval Reserve,
with some reasonable compensation, should be thoroughly explored as a
method of encouraging private operation of shipping. Public operation is
not a success. No investigation, of which I have caused several to be
made, has failed to report that it could not succeed or to recommend
speedy transfer to private ownership. Our exporters and importers are
both indifferent about using American ships. It should be our policy to
keep our present vessels in repair and dispose of them as rapidly as
possible, rather than undertake any new construction. Their operation is
a burden on the National Treasury, for which we are not receiving
sufficient benefits.

COMMERCIAL AVIATION

A rapid growth is taking place in aeronautics. The Department of
Commerce has charge of the inspection and licensing system and the
construction of national airways. Almost 8,000 miles are already
completed and about 4,000 miles more contemplated. Nearly 4,400 miles
are now equipped and over 3,000 miles more will have lighting and
emergency landing fields by next July. Air mail contracts are expected
to cover 24 of these lines. Daily airway flying is nearly 15,000 miles
and is expected to reach 25,000 miles early next year.

Flights for other purposes exceed 22,000 miles each day. Over 900
airports, completed and uncompleted, have been laid out. The demand for
aircraft has greatly increased. The policy already adopted by the
Congress is producing the sound development of this coming industry.

WESTERN HEMISPHERE AIR MAIL

Private enterprise is showing much interest in opening up aviation
service to Mexico and Central and South America. We are particularly
solicitous to have the United States take a leading part in this
development. It is understood that the governments of our sister
countries would be willing to cooperate. Their physical features, the
undeveloped state of their transportation, make an air service
especially adaptable to their usage. The Post Office Department should
be granted power to make liberal long-term contracts for carrying our
mail, and authority should be given to the Army and the Navy to detail
aviators and planes to cooperate with private enterprise in establishing
such mail service with the consent of the countries concerned. A
committee of the Cabinet will later present a report on this subject.

GOOD ROADS

The importance and benefit of good roads is more and more coming to be
appreciated. The National Government has been making liberal
contributions to encourage their construction. The results and benefits
have been very gratifying. National participation, however, should be
confined to trunk-line systems. The national tax on automobiles is now
nearly sufficient to meet this outlay. This tax is very small, and on
low-priced cars is not more than $2 or $3 each year.

While the advantage of having good roads is very large, the desire for
improved highways is not limited to our own country. It should and does
include all the Western Hemisphere. The principal points in Canada are
already accessible. We ought to lend our encouragement in any way we can
for more good roads to all the principal points in this hemisphere south
of the Rio Grande. It has been our practice to supply these countries
with military and naval advisers, when they have requested it, to assist
them in national defense. The arts of peace are even more important to
them and to us. Authority should be given by law to provide them at
their request with engineering advisers for the construction of roads
and bridges. In some of these countries already wonderful progress is
being made in road building, but the engineering features are often very
exacting and the financing difficult. Private interests should look with
favor on all reasonable loans sought by these countries to open such
main lines of travel.

This general subject has been promoted by the Pan American Congress of
Highways, which will convene again at Rio de Janeiro in July, 1928. It
is desirable that the Congress should provide for the appointment of
delegates to represent the Government of the United States.

CUBAN PARCEL POST

We have a temporary parcel-post convention with Cuba. The advantage of
it is all on our side. During 1926 we shipped twelve times as many
parcels, weighing twenty-four times as much, as we received. This
convention was made on the understanding that we would repeal an old law
prohibiting the importation of cigars and cigarettes in quantities less
than 3,000 enacted in 1866 to discourage smuggling, for which it has
long been unnecessary. This law unjustly discriminates against an
important industry of Cuba. Its repeal has been recommended by the
Treasury and Post Office Departments. Unless this is done our merchants
and railroads will find themselves deprived of this large parcel-post
business after the 1st of next March, the date of the expiration of the
convention, which has been extended upon the specific understanding that
it would expire at that time unless this legislation was enacted. We
purchase large quantities of tobacco made in Cuba. It is not probable
that our purchases would be any larger if this law was repealed, while
it would be an advantage to many other industries in the United States.

INSULAR POSSESSIONS

Conditions in the Philippine Islands have been steadily improved.
Contentment and good order prevail. Roads, irrigation works, harbor
improvements, and public buildings are being constructed. Public
education and sanitation have been advanced. The Government is in a
sound financial condition. These immediate results were especially due
to the administration of Gov. Gen. Leonard Wood. The six years of his
governorship marked a distinct improvement in the islands and rank as
one of the outstanding accomplishments of this distinguished man. His
death is a loss to the Nation and the islands.

Greater progress could be made, more efficiency could be put into
administration, if the Congress would undertake to expend, through its
appropriating power, all or a part of the customs revenues which are now
turned over to the Philippine treasury. The powers of the auditor of the
islands also need revision and clarification. The government of the
islands is about 98 per cent in the hands of the Filipinos. An extension
of the policy of self-government will be hastened by the demonstration
on their part of their desire and their ability to carry out cordially
and efficiently the provisions of the organic law enacted by the
Congress for the government of the islands. It would be well for a
committee of the Congress to visit the islands every two years.

A fair degree of progress is being made in Porto Rico. Its agricultural
products are increasing; its treasury position, which has given much
concern, shows improvement. I am advised by the governor that
educational facilities are still lacking. Roads are being constructed,
which he represents are the first requisite for building schoolhouses.
The loyalty of the island to the United States is exceedingly
gratifying. A memorial will be presented to you requesting authority to
have the governor elected by the people of Porto Rico. This was never
done in the case of our own Territories. It is admitted that education
outside of the towns is as yet very deficient. Until it has progressed
further the efficiency of the government and the happiness of the people
may need the guiding hand of an appointed governor. As it is not
contemplated that any change should be made immediately, the general
subject may well have the thoughtful study of the Congress.

PANAMA CANAL

The number of commercial ships passing through the Panama Canal has
increased from 3,967 in 1923 to 5,475 in 1927. The total amount of tolls
turned into the Treasury is over $166,000,000, while all the operations
of the canal have yielded a surplus of about $80,000,000. In order to
provide additional storage of water and give some control over the
floods of the Chagres River, it is proposed to erect a dam to cost about
$12,000,000 at Alhajuela. It will take some five years to complete this
work.

AGRICULTURE

The past year has seen a marked improvement in the general condition of
agriculture. Production is better balanced and without acute shortage or
heavy surplus. Costs have been reduced and the average output of the
worker increased. The level of farm prices has risen while others have
fallen, so that the purchasing power of the farmer is approaching a
normal figure. The individual farmer is entitled to great credit for the
progress made since 1921. He has adjusted his production and through
cooperative organizations and other methods improved his marketing. He
is using authenticated facts and employing sound methods which other
industries are obliged to use to secure stability and prosperity. The
old-fashioned haphazard system is being abandoned, economics are being
applied to ascertain the best adapted unit of land, diversification is
being promoted, and scientific methods are being used in production, and
business principles in marketing.

Agriculture has not fully recovered from postwar depression. The fact is
that economic progress never marches forward in a straight line. It goes
in waves. One part goes ahead, while another halts and another recedes.
Everybody wishes agriculture to prosper. Any sound and workable proposal
to help the farmer will have the earnest support of the Government.
Their interests are not all identical. Legislation should assist as many
producers in as many regions as possible. It should be the aim to assist
the farmer to work out his own salvation socially and economically. No
plan will be of any permanent value to him which does not leave him
standing on his own foundation.

In the past the Government has spent vast sums to bring land under
cultivation. It is apparent that this has reached temporarily the
saturation point. We have had a surplus of production and a poor market
for land, which has only lately shown signs of improvement. The main
problem which is presented for solution is one of dealing with a surplus
of production. It is useless to propose a temporary expedient. What is
needed is permanency and stability. Government price fixing is known to
be unsound and bound to result in disaster. A Government subsidy would
work out in the same way. It can not be sound for all of the people to
hire some of the people to produce a crop which neither the producers
nor the rest of the people want.

Price fixing and subsidy will both increase the surplus, instead of
diminishing it. Putting the Government directly into business is merely
a combination of subsidy and price fixing aggravated by political
pressure. These expedients would lead logically to telling the farmer by
law what and how much he should plant and where he should plant it, and
what and how much he should sell and where he should sell it. The most
effective means of dealing with surplus crops is to reduce the surplus
acreage. While this can not be done by the individual farmer, it can be
done through the organizations already in existence, through the
information published by the Department of Agriculture, and especially
through banks and others who supply credit refusing to finance an
acreage manifestly too large.

It is impossible to provide by law for an assured success and prosperity
for all those who engage in farming. If acreage becomes overextended,
the Government can not assume responsibility for it. The Government can,
however, assist cooperative associations and other organizations in
orderly marketing and handling a surplus clearly due to weather and
seasonal conditions, in order to save the producer from preventable
loss. While it is probably impossible to secure this result at a single
step, and much will have to be worked out by trial and rejection, a
beginning could be made by setting up a Federal board or commission of
able and experienced men in marketing, granting equal advantages under
this board to the various agricultural commodities and sections of the
country, giving encouragement to the cooperative movement in
agriculture, and providing a revolving loan fund at a moderate rate of
interest for the necessary financing. Such legislation would lay the
foundation for a permanent solution of the surplus problem.

This is not a proposal to lend more money to the farmer, who is already
fairly well financed, but to lend money temporarily to experimental
marketing associations which will no doubt ultimately be financed by the
regularly established banks, as were the temporary operations of the War
Finance Corporation. Cooperative marketing especially would be provided
with means of buying or building physical properties.

The National Government has almost entirely relieved the farmer from
income taxes by successive tax reductions, but State and local taxes
have increased, putting on him a grievous burden. A policy of rigid
economy should be applied to State and local expenditures. This is
clearly within the legislative domain of the States. The Federal
Government has also improved our banking structure and system of
agricultural credits. The farmer will be greatly benefited by similar
action in many States. The Department of Agriculture is undergoing
changes in organization in order more completely to separate the
research and regulatory divisions, that each may be better administered.
More emphasis is being placed on the research program, not only by
enlarging the appropriations for State experiment stations but by
providing funds for expanding the research work of the department. It is
in this direction that much future progress can be expected.

THE PROTECTIVE TARIFF

The present tariff rates supply the National Treasury with well over
$600,000,000 of annual revenue. Yet, about 65 per cent of our imports
come in duty free. Of the remaining 35 per cent of imports on which
duties are laid about 23 per cent consists of luxuries and agricultural
products, and the balance of about 12 per cent, amounting, to around
$560,000,000 is made up of manufactures and merchandise. As no one is
advocating any material reduction in the rates on agriculture or
luxuries, it is only the comparatively small amount of about
$560,000,000 of other imports that are really considered in any
discussion of reducing tariff rates. While this amount, duty free, would
be large enough seriously to depress many lines of business in our own
country, it is of small importance when spread over the rest of the
world.

It is often stated that a reduction of tariff rates on industry would
benefit agriculture. It would be interesting to know to what commodities
it is thought this could be applied. Everything the farmer uses in
farming is already on the free list. Nearly everything he sells is
protected. It would seem to be obvious that it is better for the country
to have the farmer raise food to supply the domestic manufacturer than
the foreign manufacturer. In one case our country would have only the
farmer; in the other it would have the farmer and the manufacturer.
Assuming that Europe would have more money if it sold us larger amounts
of merchandise, it is not certain it would consume more food, or, if it
did, that its purchases would be made in this country. Undoubtedly it
would resort to the cheapest market, which is by no means ours. The
largest and best and most profitable market for the farmer in the world
is our own domestic market. Any great increase in manufactured imports
means the closing of our own plants. Nothing would be worse for
agriculture.

Probably no one expects a material reduction in the rates on
manufactures while maintaining the rates on agriculture. A material
reduction in either would be disastrous to the farmer. It would mean a
general shrinkage of values, a deflation of prices, a reduction of
wages, a general depression carrying our people down to the low standard
of living in our competing countries. It is obvious that this would not
improve but destroy our market for imports, which is best served by
maintaining our present high purchasing power under which in the past
five years imports have increased 63 per cent.

FARM LOAN SYSTEM

It is exceedingly important that the Federal land and joint-stock land
banks should furnish the best possible service for agriculture. Certain
joint-stock banks have fallen into improper and unsound practices,
resulting in the indictment of the officials of three of them. More
money has been provided for examinations, and at the instance of the
Treasury rules and regulations of the Federal Farm Board have been
revised. Early last May three of its members resigned. Their places were
filled with men connected with the War Finance Corporation. Eugene Meyer
being designated as Farm Loan Commissioner. The new members have
demonstrated their ability in the field of agricultural finance in the
extensive operations of he War Finance Corporation. Three joint-stock
banks have gone into receivership. It is necessary to preserve the
public confidence in this system in order to find a market for their
bonds. A recent flotation was made at a record low rate of 4 per cent.
Careful supervision is absolutely necessary to protect the investor and
enable these banks to exercise their chief function in serving
agriculture.

MUSCLE SHOALS

The last year has seen considerable changes in the problem of Muscle
Shoals. Development of other methods show that nitrates can probably be
produced at less cost than by the use of hydroelectric power. Extensive
investigation made by the Department of War indicates that the nitrate
plants on this project are of little value for national defense and can
probably be disposed of within two years. The oxidation part of the
plants, however, should be retained indefinitely. This leaves this
project mostly concerned with power. It should, nevertheless, continue
to be dedicated to agriculture. It is probable that this desire can be
best served by disposing of the plant and applying the revenues received
from it to research for methods of more economical production of
concentrated fertilizer and to demonstrations and other methods of
stimulating its use on the farm. But in disposing of the property
preference should be given to proposals to use all or part of it for
nitrate production and fertilizer manufacturing.

FLOOD CONTROL

For many years the Federal Government has been building a system of
dikes along the Mississippi River for protection against high water.
During the past season the lower States were overcome by a most
disastrous flood. Many thousands of square miles were inundated a great
many lives were lost, much livestock was drowned, and a very heavy
destruction of property was inflicted upon the inhabitants. The American
Red Cross at once went to the relief of the stricken communities.
Appeals for contributions have brought in over $17,000,000. The Federal
Government has provided services, equipment, and supplies probably
amounting to about $7,000,000 more. Between $5,000,000 and $10,000,000
in addition have been provided by local railroads, the States, and their
political units. Credits have been arranged by the Farm Loan Board, and
three emergency finance corporations with a total capital of $3,000,000
have insured additional resources to the extent of $12,000,000. Through
these means the 700,000 people in the flooded areas have been adequately
supported. Provision has been made to care for those in need until after
the 1st of January.

The Engineering Corps of the Army has contracted to close all breaks in
the dike system before the next season of high water. A most thorough
and elaborate survey of the whole situation has been made and embodied
in a report with recommendations for future flood control, which will be
presented to the Congress. The carrying out of their plans will
necessarily extend over a series of years. They will call for a raising
and strengthening of the dike system with provision for emergency
spillway's and improvements for the benefit of navigation.

Under the present law the land adjacent to the dikes has paid one-third
of the cost of their construction. This has been a most extraordinary
concession from the plan adopted in relation to irrigation, where the
general rule has been that the land benefited should bear the entire
expense. It is true, of course, that the troublesome waters do not
originate on the land to be reclaimed, but it is also true that such
waters have a right of way through that section of the country and the
land there is charged with that easement. It is the land of this region
that is to be benefited. To say that it is unable to bear any expense of
reclamation is the same thing as saying that it is not worth reclaiming.
Because of expenses incurred and charges already held against this land,
it seems probable that some revision will have to be made concerning the
proportion of cost which it should bear. But it is extremely important
that it should pay enough so that those requesting improvements will be
charged with some responsibility for their cost, and the neighborhood
where works are constructed have a pecuniary interest in preventing
waste and extravagance and securing a wise and economical expenditure of
public funds.

It is necessary to look upon this emergency as a national disaster. It
has been so treated from its inception. Our whole people have provided
with great generosity for its relief. Most of the departments of the
Federal Government have been engaged in the same effort. The governments
of the afflicted areas, both State and municipal, can not be given too
high praise for the courageous and helpful way in which they have come
to the rescue of the people. If the sources directly chargeable can not
meet the demand, the National Government should not fail to provide
generous relief. This, however, does not mean restoration. The
Government is not an insurer of its citizens against the hazard of the
elements. We shall always have flood and drought, heat and cold,
earthquake and wind, lightning and tidal wave, which are all too
constant in their afflictions. The Government does not undertake to
reimburse its citizens for loss and damage incurred under such
circumstances. It is chargeable, however, with the rebuilding of public
works and the humanitarian duty of relieving its citizens from distress.

The people in the flooded area and their representatives have approached
this problem in the most generous and broad-minded way. They should be
met with a like spirit on the part of the National government. This is
all one country. The public needs of each part must be provided for by
the public at large. No required relief should be refused. An adequate
plan should be adopted to prevent a recurrence of this disaster in order
that the people may restore to productivity and comfort their fields and
their towns.

Legislation by this Congress should be confined to our principal and
most pressing problem, the lower Mississippi, considering tributaries
only so far as they materially affect the main flood problem. A definite
Federal program relating to our waterways was proposed when the last
Congress authorized a comprehensive survey of all the important streams
of the country in order to provide for their improvement, including
flood control, navigation, power, and irrigation. Other legislation
should wait pending a report on this survey. The recognized needs of the
Mississippi should not be made a vehicle for carrying other projects.
All proposals for development should stand on their own merits. Any
other method would result in ill-advised conclusions, great waste of
money, and instead of promoting would delay the orderly and certain
utilization of our water resources.

Very recently several of the New England States have suffered somewhat
similarly from heavy rainfall and high water. No reliable estimate of
damage has yet been computed, but it is very large to private and public
property. The Red Cross is generously undertaking what is needed for
immediate relief, repair and reconstruction of houses, restocking of
domestic animals, and food, clothing, and shelter. A considerable sum of
money will be available through the regular channels in the Department
of Agriculture for reconstruction of highways. It may be necessary to
grant special aid for this purpose. Complete reports of what is required
will undoubtedly be available early in the session.

INLAND NAVIGATION

The Congress in its last session authorized the general improvements
necessary to provide the Mississippi waterway system with better
transportation. Stabilization of the levels of the Great Lakes and their
opening to the sea by an effective shipway remain to be considered.
Since the last session the Board of Engineers of the War Department has
made a report on the proposal for a canal through the State of New York,
and the Joint Board of Engineers, representing Canada and the United
States, has finished a report on the St. Lawrence River. Both of these
boards conclude that the St. Lawrence project is cheaper, affords a more
expeditious method of placing western products in European markets, and
will cost less to operate. The State Department has requested the
Canadian Government to negotiate treaties necessary to provide for this
improvement. It will also be necessary to secure an agreement with
Canada to put in works necessary to prevent fluctuation in the levels of
the Great Lakes.

Legislation is desirable for the construction of a dam at Boulder Canyon
on the Colorado River, primarily as a method of flood control and
irrigation. A secondary result would be a considerable power development
and a source of domestic water supply for southern California. Flood
control is clearly a national problem, and water supply is a Government
problem, but every other possibility should be exhausted before the
Federal Government becomes engaged in the power business. The States
which are interested ought to reach mutual agreement. This project is in
reality their work. If they wish the Federal Government to undertake it,
they should not hesitate to make the necessary concessions to each
other. This subject is fully discussed in the annual report of the
Secretary of the Interior. The Columbia River Basin project is being
studied and will be one to be considered at some future time.

The Inland Waterways Corporation is proving successful and especially
beneficial to agriculture. A survey is being made to determine its
future needs. It has never been contemplated that if inland rivers were
opened to navigation it would then be necessary for the Federal
Government to provide the navigation. Such a request is very nearly the
equivalent of a declaration that their navigation is not profitable,
that the commodities which they are to carry can be taken at a cheaper
rate by some other method, in which case the hundreds of millions of
dollars proposed to be expended for opening rivers to navigation would
be not only wasted, but would entail further constant expenditures to
carry the commodities of private persons for less than cost.

The policy is well established that the Government should open public
highways on land and on water, but for use of the public in their
private capacity. It has put on some demonstration barge lines, but
always with the expectation that if they prove profitable they would
pass into private hands and if they do not prove profitable they will be
withdrawn. The problems of transportation over inland waterways should
be taken up by private enterprise, so that the public will have the
advantage of competition in service. It is expected that some of our
lines can be sold, some more demonstration work done, and that with the
completion of the Ohio project a policy of private operation can be
fully developed.

PROHIBITION

After more than two generations of constant debate, our country adopted
a system of national prohibition under all the solemnities involved in
an amendment to the Federal Constitution. In obedience to this mandate
the Congress and the States, with one or two notable exceptions, have
passed required laws for its administration and enforcement. This
imposes upon the citizenship of the country, and especially on all
public officers, not only the duty to enforce, but the obligation to
observe the sanctions of this constitutional provision and its resulting
laws. If this condition could be secured, all question concerning
prohibition would cease. The Federal Government is making every effort
to accomplish these results through careful organization, large
appropriations, and administrative effort. Smuggling has been greatly
cut down, the larger sources of supply for illegal sale have been
checked, and by means of injunction and criminal prosecution the process
of enforcement is being applied. The same vigilance on the part of local
governments would render these efforts much more successful. The Federal
authorities propose to discharge their obligation for enforcement to the
full extent of their ability.

THE NEGRO

History does not anywhere record so much progress made in the same
length of time as that which has been accomplished by the Negro race in
the United States since the Emancipation Proclamation. They have come up
from slavery to be prominent in education, the professions, art,
science, agriculture, banking, and commerce. It is estimated that 50,000
of them are on the Government pay rolls, drawing about $50,000,000 each
year. They have been the recipients of presidential appointments and
their professional ability has arisen to a sufficiently high plane so
that they have been intrusted with the entire management and control of
the great veterans hospital at Tuskegee, where their conduct has taken
high rank. They have shown that they have been worthy of all the
encouragement which they have received. Nevertheless, they are too often
subjected to thoughtless and inconsiderate treatment, unworthy alike of
the white or colored races. They have especially been made the target of
the foul crime of lynching. For several years these acts of unlawful
violence had been diminishing. In the last year they have shown an
increase. Every principle of order and law and liberty is opposed to
this crime. The Congress should enact any legislation it can under the
Constitution to provide for its elimination.

AMERICAN INDIAN

The condition of the American Indian has much improved in recent years.
Full citizenship was bestowed upon them on June 2, 1924, and
appropriations for their care and advancement have been increased. Still
there remains much to be done.

Notable increases in appropriations for the several major functions
performed by the Department of the Interior on behalf of the Indians
have marked the last five years. In that time, successive annual
increases in appropriations for their education total $1,804,325; for
medical care, $578,000; and for industrial advancement, $205,000; or
$2,582,325 more than would have been spent in the same period on the
basis of appropriations for 1923 and the preceding years.

The needs along health, educational, industrial and social lines
however, are great, and the Budget estimates for 1929 include still
further increases for Indian administration.

To advance the time when the Indians may become self-sustaining, it is
my belief that the Federal Government should continue to improve the
facilities for their care, and as rapidly as possible turn its
responsibility over to the States.

COAL

Legislation authorizing a system of fuel administration and the
appointment by the President of a Board of Mediation and Conciliation in
case of actual or threatened interruption of production is needed. The
miners themselves are now seeking information and action from the
Government, which could readily be secured through such a board. It is
believed that a thorough investigation and reconsideration of this
proposed policy by the Congress will demonstrate that this
recommendation is sound and should be adopted.

PETROLEUM CONSERVATION

The National Government is undertaking to join in the formation of a
cooperative committee of lawyers, engineers, and public officers, to
consider what legislation by the States or by the Congress can be
adopted for the preservation and conservation of our supply of
petroleum. This has come to be one of the main dependencies for
transportation and power so necessary to our agricultural and industrial
life. It is expected the report of this committee will be available for
later congressional action. Meantime, the requirement that the Secretary
of the Interior should make certain leases of land belonging to the
Osage Indians, in accordance with the act of March 3, 1921, should be
repealed. The authority to lease should be discretionary, in order that
the property of the Indians way not be wasted and the public suffer a
future lack of supply.

ALIEN PROPERTY

Under treaty the property held by the Alien Property Custodian was to be
retained until suitable provision had been made for the satisfaction of
American claims. While still protecting the American claimants, in order
to afford every possible accommodation to the nationals of the countries
whose property was held, the Congress has made liberal provision for the
return of a larger part of the property. All trusts under $10,000 were
returned in full, and partial returns were made on the others. The total
returned was approximately $350,000,000.

There is still retained, however, about $250,000,000. The Mixed Claims
Commission has made such progress in the adjudication of claims that
legislation can now be enacted providing for the return of the property,
which should be done under conditions which will protect our Government
and our claimants. Such a measure will be proposed, and I recommend its
enactment.

RAILROAD CONSOLIDATION

In order to increase the efficiency of transportation and decrease its
cost to the shipper, railroad consolidation must be secured. Legislation
is needed to simplify the necessary procedure to secure such agreements
and arrangements for consolidation, always under the control and with
the approval of the Interstate Commerce Commission. Pending this, no
adequate or permanent reorganization can be made of the freight-rate
structure. Meantime, both agriculture and industry are compelled to wait
for needed relief. This is purely a business question, which should be
stripped of all local and partisan bias and decided on broad principles
and its merits in order to promote the public welfare. A large amount of
new construction and equipment, which will furnish employment for labor
and markets for commodities of both factory and farm, wait on the
decision of this important question. Delay is holding back the progress
of our country.

Many of the same arguments are applicable to the consolidation of the
Washington traction companies.

VETERANS

The care which this country has lavished on its veterans is known of all
men. The yearly outlay for this purpose is about $750,000,000, or about
the cost of running the Federal Government, outside of the Post Office
Department, before the World War. The Congress will have before it
recommendations of the American Legion, the Veterans of Foreign Wars,
and other like organizations, which should receive candid consideration.
We should continue to foster our system of compensation and
rehabilitation, and provide hospitals and insurance. The magnitude of
the undertaking is already so large that all requests calling for
further expenditure should have the most searching scrutiny. Our present
system of pensions is already sufficiently liberal. It was increased by
the last Congress for Civil and Spanish War veterans and widows and for
some dependents.

It has been suggested that the various governmental agencies now dealing
with veterans' relief be consolidated. This would bring many advantages.
It is recommended that the proper committees of the Congress make a
thorough survey of this subject, in order to determine if legislation to
secure such consolidation is desirable.

EDUCATION

For many years it has been the policy of the Federal Government to
encourage and foster the cause of education. Large sums of money are
annually appropriated to carry on vocational training. Many millions go
into agricultural schools. The general subject is under the immediate
direction of a Commissioner of Education. While this subject is strictly
a State and local function, it should continue to have the encouragement
of the National Government. I am still of the opinion that much good
could be accomplished through the establishment of a Department of
Education and Relief, into which would be gathered all of these
functions under one directing member of the Cabinet.

DEPARTMENT OF LABOR

Industrial relations have never been more peaceful. In recent months
they have suffered from only one serious controversy. In all others
difficulties have been adjusted, both management and labor wishing to
settle controversies by friendly agreement rather than by compulsion.
The welfare of women and children is being especially guarded by our
Department of Labor. Its Children's Bureau is in cooperation with 26
State boards and 80 juvenile courts.

Through its Bureau of Immigration it has been found that medical
examination abroad has saved prospective immigrants from much hardship.
Some further legislation to provide for reuniting families when either
the husband or the wife is in this country, and granting more freedom
for the migration of the North American Indian tribes is desirable.

The United States Employment Service has enabled about 2,000,000 men and
women to gain paying positions in the last fiscal year. Particular
attention has been given to assisting men past middle life and in
providing field labor for harvesting agricultural crops. This has been
made possible in part through the service of the Federal Board for
Vocational Education, which is cooperating with the States in a program
to increase the technical knowledge and skill of the wage earner.

PUBLIC BUILDINGS

Construction is under way in the country and ground has been broken for
carrying out a public-building program for Washington. We have reached a
time when not only the conveniences but the architectural beauty of the
public buildings of the Capital City should be given much attention. It
will be necessary to purchase further land and provide the required
continuing appropriations.

HISTORICAL CELEBRATIONS

Provision is being made to commemorate the two hundredth anniversary of
the birth of George Washington. Suggestion has been made for the
construction of a memorial road leading from the Capital to Mount
Vernon, which may well have the consideration of the Congress, and the
commission intrusted with preparations for the celebration will
undoubtedly recommend publication of the complete writings of Washington
and a series of writings by different authors relating to him.

February 25, 1929. is the one hundred and fiftieth anniversary of the
capture of Fort Sackville, at Vincennes, in the State of Indiana. This
eventually brought into the Union what was known as the Northwest
Territory, embracing the region north of the Ohio River between the
Alleghenies and the Mississippi River. This expedition was led by George
Rogers Clark. His heroic character and the importance of his victory are
too little known and understood. They gave us not only this Northwest
Territory but by means of that the prospect of reaching the Pacific. The
State of Indiana is proposing to dedicate the site of Fort Sackville as
a national shrine. The Federal Government may well make some provision
for the erection under its own management of a fitting memorial at that
point.

FOREIGN RELATIONS

It is the policy of the United States to promote peace. We are a
peaceful people and committed to the settling of disputes by amicable
adjustment rather than by force. We have believed that peace can best be
secured by a faithful observance on our part of the principles of
international law, accompanied by patience and conciliation, and
requiring of others a like treatment for ourselves. We have lately had
some difference with Mexico relative to the injuries inflicted upon our
nationals and their property within that country. A firm adherence to
our rights and a scrupulous respect for the sovereignty of Mexico, both
in accordance with the law of nations, coupled with patience and
forbearance, it is hoped will resolve all our differences without
interfering with the friendly relationship between the two Governments.

We have been compelled to send naval and marine forces to China to
protect the lives and property of our citizens. Fortunately their simple
presence there has been sufficient to prevent any material loss of life.
But there has been considerable loss of property. That unhappy country
is torn by factions and revolutions which bid fair to last for an
indefinite period. Meanwhile we are protecting our citizens and stand
ready to cooperate with any government which may emerge in promoting the
welfare of the people of China. They have always had our friendship, and
they should especially merit our consideration in these days of their
distraction and distress.

We were confronted by similar condition on a small scale in Nicaragua.
Our marine and naval forces protected our citizens and their property
and prevented a heavy sacrifice of life and the destruction of that
country by a reversion to a state of revolution. Henry L. Stimson,
former Secretary of War, was sent there to cooperate with our diplomatic
and military officers in effecting a settlement between the contending
parties. This was done on the assurance that we would cooperate in
restoring a state of peace where our rights would be protected by giving
our assistance in the conduct of the next presidential election, which
occurs in a few months. With this assurance the population returned to
their peacetime pursuits, with the exception of some small roving bands
of outlaws.

In general, our relations with other countries can be said to have
improved within the year. While having a due regard for our own affairs,
the protection of our own rights, and the advancement of our own people,
we can afford to be liberal toward others. Our example has become of
great importance in the world. It is recognized that we are independent,
detached, and can and do take a disinterested position in relation to
international affairs. Our charity embraces the earth. Our trade is far
flung. Our financial favors are widespread. Those who are peaceful and
law-abiding realize that not only have they nothing to fear from us, but
that they can rely on our moral support. Proposals for promoting the
peace of the world will have careful consideration. But we are not a
people who are always seeking for a sign. We know that peace comes from
honesty and fair dealing, from moderation, and a generous regard for the
rights of others. The heart of the Nation is more important than
treaties. A spirit of generous consideration is a more certain defense
than great armaments. We should continue to promote peace by our
example, and fortify it by such international covenants against war as
we are permitted under our Constitution to make.

AMERICAN PROGRESS

Our country has made much progress. But it has taken, and will continue
to take, much effort. Competition will be keen, the temptation to
selfishness and arrogance will be severe, the provocations to deal
harshly with weaker peoples will be many. All of these are embraced in
the opportunity for true greatness. They will be overbalanced by
cooperation by generosity, and a spirit of neighborly kindness. The
forces of the universe are taking humanity in that direction. In doing
good, in walking humbly, in sustaining its own people in ministering to
other nations, America will work out its own mighty destiny.

***

State of the Union Address
Calvin Coolidge
December 4, 1928

To the Congress of the United States:

No Congress of the United States ever assembled, on surveying the state
of the Union, has met with a more pleasing prospect than that which
appears at the present time. In the domestic field there is tranquility
and contentment, harmonious relations between management and wage
earner, freedom from industrial strife, and the highest record of years
of prosperity. In the foreign field there is peace, the good will which
comes from mutual understanding, and the knowledge that the problems
which a short time ago appeared so ominous are yielding to the touch of
manifest friendship. The great wealth created by our enterprise and
industry, and saved by our economy, has had the widest distribution
among our own people, and has gone out in a steady stream to serve the
charity and the business of the world. The requirements of existence
have passed beyond the standard of necessity into the region of luxury.
Enlarging production is consumed by an increasing demand at home and an
expanding commerce abroad. The country can regard the present with
satisfaction and anticipate the future with optimism.

The main source of these unexampled blessings lies in the integrity and
character of the American people. They have had great faith, which they
have supplemented with mighty works. They have been able to put trust in
each other and trust in their Government. Their candor in dealing with
foreign governments has commanded respect and confidence. Yet these
remarkable powers would have been exerted almost in vain without the
constant cooperation and careful administration of the Federal
Government.

We have been coming into a period which may be fairly characterized as a
conservation of our national resources. Wastefulness in public business
and private enterprise has been displaced by constructive economy. This
has been accomplished by bringing our domestic and foreign relations
more and more under a reign of law. A rule of force has been giving way
to a rule of reason. We have substituted for the vicious circle of
increasing expenditures, increasing tax rates, and diminishing profits
the charmed circle of diminishing expenditures, diminishing tax rates,
and increasing profits.

Four times we have made a drastic revision of our internal revenue
system, abolishing many taxes and substantially reducing almost all
others. Each time the resulting stimulation to business has so increased
taxable incomes and profits that a surplus has been reduced. One-third
of the national debt has been paid, while much of the other two-thirds
has been refunded at lower rates, and these savings of interest and
constant economies have enabled us to repeat the satisfying process of
more tax reductions. Under this sound and healthful encouragement the
national income has increased nearly 50 per cent, until it is estimated
to stand well over $90,000,000,000. It gas been a method which has
performed the seeming miracle of leaving a much greater percentage of
earnings in the hands of the taxpayers with scarcely any diminution of
the Government revenue. That is constructive economy in the highest
degree. It is the corner stone of prosperity. It should not fail to be
continued.

This action began by the application of economy to public expenditure.
If it is to be permanent, it must be made so by the repeated application
of economy. There is no surplus on which to base further tax revision at
this time. Last June the estimates showed a threatened deficit for the
current fiscal year of $94,000,000. Under my direction the departments
began saving all they could out of their present appropriations. The
last tax reduction brought an encouraging improvement in business,
beginning early in October, which will also increase our revenue. The
combination of economy and good times now indicates a surplus of about
$37,000,000. This is a margin of less than I percent on out,
expenditures and makes it obvious that the Treasury is in no condition
to undertake increases in expenditures to be made before June 30. It is
necessary therefore during the present session to refrain from new
appropriations for immediate outlay, or if such are absolutely required
to provide for them by new revenue; otherwise, we shall reach the end of
the year with the unthinkable result of an unbalanced budget. For the
first time during my term of office we face that contingency. I am
certain that the Congress would not pass and I should not feel warranted
in approving legislation which would involve us in that financial
disgrace.

On the whole the finances of the Government are most satisfactory. Last
year the national debt was reduced about $906,000,000. The refunding and
retirement of the second and third Liberty loans have just been brought
to a successful conclusion, which will save about $75,000,000 a year in
interest. The unpaid balance has been arranged in maturities convenient
for carrying out our permanent debt-paying Program.

The enormous savings made have not been at the expense of any legitimate
public need. The Government plant has been kept up and many improvements
are tinder way, while its service is fully manned and the general
efficiency of operation has increased. We have been enabled to undertake
many new enterprises. Among these are the adjusted compensation of the
veterans of the World War, which is costing us $112,000,000 a year;
amortizing our liability to the civil service retirement funds,
$20,000,000; increase of expenditures for rivers and harbors including
flood control, $43,000,000; public buildings, $47,000,000. In 1928 we
spent $50,000,000 in the adjustment of war claims and alien property.
These are examples of a large list of items.

FOREIGN RELATIONS

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.

NICARAGUA

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.

TACNA-ARICA

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.

MEXICO

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.

CHINA

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 awaits 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 other countries.

PEACE TREATY

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 if 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 being 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.

NATIONAL DEFENSE

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 certainly 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.

VETERANS

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
Government. 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.

AGRICULTURE

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, and 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 improvement 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 help 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 should, 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 has 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.

COMMERCE

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 position 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.

COMMERCIAL AERONAUTICS

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 he most generously 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.

RAILROADS

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.

MERCHANT MARINE

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 control.

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.

INTER-AMERICAN HIGHWAY

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 of Agriculture.

We should provide our southern neighbors, if they request it, with such
engineer advisors for the construction of roads and bridges. Private
interests 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, them.

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.

WATERWAYS

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 barrier 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 action.

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.

COLORADO RIVER

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.

MUSCLE SHOALS

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 dam 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 the 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.

CONSERVATION

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 the 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 important work.

IMMIGRATION

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.

WAGE EARNER

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 bodily and mental
condition of our citizens.

CIVIL SERVICE

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
$1,307, 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.

EDUCATION

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 belongs peculiarly 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 by 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.

PUBLIC BUILDINGS

We, have laid out a public building program for the District of Columbia
and the country at large running 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 appropriations 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.

THE NEGRO

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.

PHILIPPINE ISLANDS

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.

PORTO RICO

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
legislation.

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.

PROHIBITION

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 to the active
cooperation of the States.

CONCLUSION

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 success.

***

State of the Union Address
Herbert Hoover
December 3, 1929

To the Senate and House of Representatives:

The Constitution requires that the President "shall, from time to time,
give to the Congress information of the state of the Union, and
recommend to their consideration such measures as he shall judge
necessary and expedient." In complying with that requirement I wish to
emphasize that during the past year the Nation has continued to grow in
strength; our people have advanced in comfort; we have gained in
knowledge; the education of youth has been more widely spread; moral and
spiritual forces have been maintained; peace has become more assured.
The problems with which we are confronted are the problems of growth and
of progress. In their solution we have to determine the facts, to
develop the relative importance to be assigned to such facts, to
formulate a common judgment upon them, and to realize solutions in
spirit of conciliation.

FOREIGN RELATIONS

We are not only at peace with all the world, but the foundations for
future peace are being substantially strengthened. To promote peace is
our long-established policy. Through the Kellogg-Briand pact a great
moral standard has been raised in the world. By it fifty-four nations
have covenanted to renounce war and to settle all disputes by pacific
means. Through it a new world outlook has been inaugurated which has
profoundly affected the foreign policies of nations. Since its
inauguration we have initiated new efforts not only in the organization
of the machinery of peace but also to eliminate dangerous forces which
produce controversies amongst nations.

In January, 1926, the Senate gave its consent to adherence to the Court
of International Justice with certain reservations. In September of this
year the statute establishing the court has, by the action of the
nations signatory, been amended to meet the Senate's reservations and to
go even beyond those reservations to make clear that the court is a true
international court of justice. I believe it will be clear to everyone
that no controversy or question in which this country has or claims an
interest can be passed on by the court without our consent at the time
the question arises. The doubt about advisory opinions has been
completely safeguarded. Our adherence to the International Court is, as
now constituted, not the slightest step toward entry into the League of
Nations. As I have before indicated, I shall direct that our signature
be affixed to the protocol of adherence and shall submit it for the
approval of the Senate with a special message at some time when it is
convenient to deal with it.

In the hope of reducing friction in the world, and with the desire that
we may reduce the great economic burdens of naval armament, we have
joined in conference with Great Britain, France, Italy, and Japan to be
held in London in January to consider the further limitation and
reduction of naval arms. We hold high hopes that success may attend this
effort.

At the beginning of the present administration the neighboring State of
Mexico was best with domestic insurrection. We maintained the embargo
upon the shipment of arms to Mexico but permitted the duly constituted
Government to procure supplies from our surplus war stocks. Fortunately,
the Mexican Government by its own strength successfully withstood the
insurrection with but slight damage. Opportunity of further peaceful
development is given to that country. At the request of the Mexican
Government, we have since lifted the embargo on shipment of arms
altogether. The two governments have taken further steps to promote
friendly relationships and so solve our differences. Conventions
prolonging for a period of two years the life of the general and special
claims commissions have been concluded.

In South America we are proud to have had part in the settlement of the
long-standing dispute between Chile and Peru in the disposal of the
question of Tacna-Arica.

The work of the commission of inquiry and conciliation between Bolivia
and Paraguay, in which a representative of this Government participated,
has successfully terminated an incident which seemed to threaten war.
The proposed plan for final settlement as suggested by the neutral
governments is still under consideration.

This Government has continued its efforts to act as a mediator in
boundary difficulties between Guatemala and Honduras.

A further instance of profound importance in establishing good will was
the inauguration of regular air mail service between the United States
and Caribbean, Central American, and South American countries.

We still have marines on foreign soil--in Nicaragua, Haiti, and China.
In the large sense we do not wish to be represented abroad in such
manner. About 1,600 marines remain in Nicaragua at the urgent request of
that government and the leaders of all parties pending the training of a
domestic constabulary capable of insuring tranquility. We have already
reduced these forces materially and we are anxious to withdraw them
further as the situation warrants. In Haiti we have about 700 marines,
but it is a much more difficult problem, the solution of which is still
obscure. If Congress approves, I shall dispatch a commission to Haiti to
review and study the matter in an endeavor to arrive at some more
definite policy than at present. Our forces in China constitute 2,605
men, which we hope also further to reduce to the normal legation guard.

It is my desire to establish more firmly our understanding and
relationships with the Latin American countries by strengthening the
diplomatic missions to those countries. It is my hope to secure men long
experienced in our Diplomatic Service, who speak the languages of the
peoples to whom they are accredited, as chiefs of our diplomatic
missions in these States. I shall send to the Senate at an early date
the nominations of several such men.

The Congress has by numerous wise and foresighted acts in the past few
years greatly strengthened the character of our representation abroad.
It has made liberal provision for the establishment of suitable quarters
for our foreign staffs in the different countries. In order, however,
that we may further develop the most effective force in this, one of the
most responsible functions of our Government, I shall recommend to the
Congress more liberal appropriations for the work of the State
Department. I know of no expenditure of public money from which a
greater economic and moral return can come to us than by assuring the
most effective conduct of our foreign relations.

NATIONAL DEFENSE

To preserve internal order and freedom from encroachment is the first
purpose of government. Our Army and Navy are being maintained in a most
efficient state under officers of high intelligence and zeal. The extent
and expansion of their numbers and equipment as at present authorized
are ample for this purpose.

We can well be deeply concerned, however, at the growing expense. From a
total expenditure for national defense purposes in 1914 of $267,000,000,
it naturally rose with the Great War, but receded again to $612,000,000
in 1924, when again it began to rise until during the current fiscal
year the expenditures will reach to over $730,000,000, excluding all
civilian services of those departments. Programs now authorized will
carry it to still larger figures in future years. While the remuneration
paid to our soldiers and sailors is justly at a higher rate than that of
any other country in the world, and while the cost of subsistence is
higher, yet the total of our expenditures is in excess of those of the
most highly militarized nations of the world.

Upon the conference shortly to be held in London will depend such
moderation as we can make in naval expenditure. If we shall be compelled
to undertake the naval construction implied in the Washington arms
treaty as well as other construction which would appear to be necessary
if no international agreement can be completed, we shall be committed
during the next six years to a construction expenditure of upward of
$1,200,000,000 besides the necessary further increase in costs for
annual upkeep.

After 1914 the various Army contingents necessarily expanded to the end
of the Great War and then receded to the low point in 1924, when
expansion again began. In 1914 the officers and men in our regular
forces, both Army and Navy, were about 164,000, in 1924 there were about
256,000, and in 1929 there were about 250,000. Our citizens' army,
however, including the National Guard and other forms of reserves,
increase these totals up to about 299,000 in 1914, about 672,000 in
1924, and about 728,000 in 1929.

Under the Kellogg pact we have undertaken never to use war as an
instrument of national policy. We have, therefore, undertaken by
covenant to use these equipments solely for defensive purposes. From a
defense point of view our forces should be proportioned to national need
and should, therefore, to some extent be modified by the prospects of
peace, which were never brighter than to-day.

It should be borne in mind that the improvement in the National Guard by
Federal support begun in 1920 has definitely strengthened our national
security by rendering them far more effective than ever heretofore. The
advance of aviation has also greatly increased our effectiveness in
defense. In addition to the very large program of air forces which we
are maintaining in the Army and Navy, there has been an enormous growth
of commercial aviation. This has provided unanticipated reserves in
manufacturing capacity and in industrial and air personnel, which again
adds to our security.

I recommend that Congress give earnest consideration to the
possibilities of prudent action which will give relief from our
continuously mounting expenditures.

FINANCES OF THE GOVERNMENT

The finances of the Government are in sound condition. I shall submit
the detailed evidences and the usual recommendations in the special
Budget message. I may, however, summarize our position. The public debt
on June 30 this year stood at $16,931,000,000, compared to the maximum
in August, 1919, of $26,596,000,000. Since June 30 it has been reduced
by a further $238,000,000. In the Budget to be submitted the total
appropriations recommended for the fiscal year 1931 are $3,830,445,231,
as compared to $3,976,141,651 for the present fiscal year. The present
fiscal year, however, includes $150,000,000 for the Federal Farm Board,
as to which no estimate can as yet be determined for 1931.

Owing to the many necessary burdens assumed by Congress in previous
years which now require large outlays, it is with extreme difficulty
that we shall be able to keep the expenditures for the next fiscal year
within the bounds of the present year. Economies in many directions have
permitted some accommodation of pressing needs, the net result being an
increase, as shown above, of about one-tenth of 1 per cent above the
present fiscal year. We can not fail to recognize the obligations of the
Government in support of the public welfare but we must coincidentally
bear in mind the burden of taxes and strive to find relief through some
tax reduction. Every dollar so returned fertilizes the soil of
prosperity.

TAX REDUCTION

The estimate submitted to me by the Secretary of the Treasury and the
Budget Director indicates that the Government will close the fiscal year
1930 with a surplus of about $225,000,000 and the fiscal year 1931 with
a surplus of about $123,000,000. Owing to unusual circumstances, it has
been extremely difficult to estimate future revenues with accuracy.

I believe, however, that the Congress will be fully justified in giving
the benefits of the prospective surpluses to the taxpayers, particularly
as ample provision for debt reduction has been made in both years
through the form of debt retirement from ordinary revenues. In view of
the uncertainty in respect of future revenues and the comparatively
small size of the indicated surplus in 1931, relief should take the form
of a provisional revision of tax rates.

I recommend that the normal income tax rates applicable to the incomes
of individuals for the calendar year 1929 be reduced from 5, 3, and 1
1/2; per cent, to 4, 2, and 1/2; per cent, and that the tax on the
income of corporations for the calendar year 1929 be reduced from 12 to
11 per cent. It is estimated that this will result in a reduction of
$160,000,000 in income taxes to be collected during the calendar year
1930. The loss in revenue will be divided approximately equally between
the fiscal years 1930 and 1931. Such a program will give a measure of
tax relief to the maximum number of taxpayers, with relatively larger
benefits to taxpayers with small or moderate incomes.

FOREIGN DEBTS

The past year has brought us near to completion of settlements of the
indebtedness of foreign governments to the United States.

The act of Congress approved February 4, 1929, authorized the settlement
with the Government of Austria along lines similar to the terms of
settlement offered by that Government to its other relief creditors. No
agreement has yet been concluded with that government, but the form of
agreement has been settled and its execution only awaits the Government
of Austria securing the assent by all the other relief creditors of the
terms offered. The act of Congress approved February 14, 1929,
authorized the settlement with the Government of Greece, and an
agreement was concluded on May 10, 1929.

The Government of France ratified the agreement with us on July 27,
1929. This agreement will shortly be before the Congress and I recommend
its approval.

The only indebtedness of foreign governments to the United States now
unsettled is that of Russia and Armenia.

During the past year a committee of distinguished experts under American
leadership submitted a plan looking to a revision of claims against
Germany by the various Governments. The United States denied itself any
participation in the war settlement of general reparations and our
claims are comparatively small in amount. They arise from costs of the
army of occupation and claims of our private citizens for losses under
awards from the Mixed Claims Commission established under agreement with
the German Government. In finding a basis for settlement it was
necessary for the committee of experts to request all the Governments
concerned to make some contribution to the adjustment and we have felt
that we should share a proportion of the concessions made.

The State and Treasury Departments will be in a position shortly to
submit for your consideration a draft of an agreement to be executed
between the United States and Germany providing for the payments of
these revised amounts. A more extensive statement will be submitted at
that time.

The total amount of indebtedness of the various countries to the United
States now funded is $11,579,465,885. This sum was in effect provided by
the issue of United States Government bonds to our own people. The
payments of the various Governments to us on account of principal and
interest for 1930 are estimated at a total of about $239,000,000, for
1931 at about $236,000,000, for 1932 at about $246,000,000. The measure
of American compromise in these settlements may be appreciated from the
fact that our taxpayers are called upon to find annually about
$475,000,000 in interest and in addition to redeem the principal of sums
borrowed by the United States Government for these purposes.

ALIEN ENEMY PROPERTY

The wise determination that this property seized in war should be
returned to its owners has proceeded with considerable rapidity. Of the
original seized cash and property (valued at a total of about
$625,000,000), all but $111,566,700 has been returned. Most of the
remainder should be disposed of during the next year.

GENERAL ECONOMIC SITUATION

The country has enjoyed a large degree of prosperity and sound progress
during the past year with a steady improvement in methods of production
and distribution and consequent advancement in standards of living.
Progress has, of course, been unequal among industries, and some, such
as coal, lumber, leather, and textiles, still lag behind. The long
upward trend of fundamental progress, however, gave rise to
over-optimism as to profits, which translated itself into a wave of
uncontrolled speculation in securities, resulting in the diversion of
capital from business to the stock market and the inevitable crash. The
natural consequences have been a reduction in the consumption of
luxuries and semi-necessities by those who have met with losses, and a
number of persons thrown temporarily out of employment. Prices of
agricultural products dealt in upon the great markets have been affected
in sympathy with the stock crash.

Fortunately, the Federal reserve system had taken measures to strengthen
the position against the day when speculation would break, which
together with the strong position of the banks has carried the whole
credit system through the crisis without impairment. The capital which
has been hitherto absorbed in stock-market loans for speculative
purposes is now returning to the normal channels of business. There has
been no inflation in the prices of commodities; there has been no undue
accumulation of goods, and foreign trade has expanded to a magnitude
which exerts a steadying influence upon activity in industry and
employment.

The sudden threat of unemployment and especially the recollection of the
economic consequences of previous crashes under a much less secured
financial system created unwarranted pessimism and fear. It was recalled
that past storms of similar character had resulted in retrenchment of
construction, reduction of wages, and laying off of workers. The natural
result was the tendency of business agencies throughout the country to
pause in their plans and proposals for continuation and extension of
their businesses, and this hesitation unchecked could in itself
intensify into a depression with widespread unemployment and suffering.

I have, therefore, instituted systematic, voluntary measures of
cooperation with the business institutions and with State and municipal
authorities to make certain that fundamental businesses of the country
shall continue as usual, that wages and therefore consuming power shall
not be reduced, and that a special effort shall be made to expand
construction work in order to assist in equalizing other deficits in
employment. Due to the enlarged sense of cooperation and responsibility
which has grown in the business world during the past few years the
response has been remarkable and satisfactory. We have canvassed the
Federal Government and instituted measures of prudent expansion in such
work that should be helpful, and upon which the different departments
will make some early recommendations to Congress.

I am convinced that through these measures we have reestablished
confidence. Wages should remain stable. A very large degree of
industrial unemployment and suffering which would otherwise have
occurred has been prevented. Agricultural prices have reflected the
returning confidence. The measures taken must be vigorously pursued
until normal conditions are restored.

AGRICULTURE

The agricultural situation is improving. The gross farm income as
estimated by the Department of Agriculture for the crop season 1926-27
was $12,100,000,000; for 1927-28 it was $12,300,000,000; for 1928-29 it
was $12,500,000,000; and estimated on the basis of prices since the last
harvest the value of the 1929-30 crop would be over $12,650,000,000. The
slight decline in general commodity prices during the past few years
naturally assists the farmers' buying power.

The number of farmer bankruptcies is very materially decreased below
previous years. The decline in land values now seems to be arrested and
rate of movement from the farm to the city has been reduced. Not all
sections of agriculture, of course, have fared equally, and some areas
have suffered from drought. Responsible farm leaders have assured me
that a large measure of confidence is returning to agriculture and that
a feeling of optimism pervades that industry.

The most extensive action for strengthening the agricultural industry
ever taken by any government was inaugurated through the farm marketing
act of June 15 last. Under its provisions the Federal Farm Board has
been established, comprised of men long and widely experienced in
agriculture and sponsored by the farm organizations of the country.
During its short period of existence the board has taken definite steps
toward a more efficient organization of agriculture, toward the
elimination of waste in marketing, and toward the upbuilding of farmers'
marketing organizations on sounder and more efficient lines. Substantial
headway has been made in the organization of four of the basic
commodities--grain, cotton, livestock, and wool. Support by the board to
cooperative marketing organizations and other board activities
undoubtedly have served to steady the farmers' market during the recent
crisis and have operated also as a great stimulus to the cooperative
organization of agriculture. The problems of the industry are most
complex, and the need for sound organization is imperative. Yet the
board is moving rapidly along the lines laid out for it in the act,
facilitating the creation by farmers of farmer-owned and
farmer-controlled organizations and federating them into central
institutions, with a view to increasing the bargaining power of
agriculture, preventing and controlling surpluses, and mobilizing the
economic power of agriculture.

THE TARIFF

The special session of Congress was called to expedite the fulfillment
of party pledges of agricultural relief and the tariff. The pledge of
farm relief has been carried out. At that time I stated the principles
upon which I believed action should be taken in respect to the tariff:
"An effective tariff upon agricultural products, that will compensate
the farmer's higher costs and higher standards of living, has a dual
purpose. Such a tariff not only protects the farmer in our domestic
market but it also stimulates him to diversify his crops and to grow
products that he could not otherwise produce, and thus lessens his
dependence upon exports to foreign markets. The great expansion of
production abroad under the conditions I have mentioned renders foreign
competition in our export markets increasingly serious. It seems but
natural, therefore, that the American farmer, having been greatly
handicapped in his foreign market by such competition from the younger
expanding countries, should ask that foreign access to our domestic
market should be regulated by taking into account the differences in our
costs of production.

"In considering the tariff for other industries than agriculture, we
find that there have been economic shifts necessitating a readjustment
of some of the tariff schedules. Seven years of experience under the
tariff bill enacted in 1922 have demonstrated the wisdom of Congress in
the enactment of that measure. On the whole it has worked well. In the
main our wages have been maintained at high levels; our exports and
imports have steadily increased; with some exceptions our manufacturing
industries have been prosperous. Nevertheless, economic changes have
taken place during that time which have placed certain domestic products
at a disadvantage and new industries have come into being, all of which
create the necessity for some limited changes in the schedules and in
the administrative clauses of the laws as written in 1922.

"It would seem to me that the test of necessity for revision is, in the
main, whether there has been a substantial slackening of activity in an
industry during the past few years, and a consequent decrease of
employment due to insurmountable competition in the products of that
industry. It is not as if we were setting up a new basis of protective
duties. We did that seven years ago. What we need to remedy now is
whatever substantial loss of employment may have resulted from shifts
since that time.

"In determining changes in our tariff we must not fail to take into
account the broad interests of the country as a whole, and such
interests include our trade relations with other countries." No
condition has arisen in my view to change these principles stated at the
opening of the special session. I am firmly of the opinion that their
application to the pending revision will give the country the kind of a
tariff law it both needs and wants. It would be most helpful if action
should be taken at an early moment, more especially at a time when
business and agriculture are both cooperating to minimize future
uncertainties. It is just that they should know what the rates are to
be.

Even a limited revision requires the consideration and readjustment of
many items. The exhaustive inquiries and valuable debate from men
representative of all parts of the country which is needed to determine
the detailed rates must necessarily be accomplished in the Congress.
However perfectly this rate structure may be framed at any given time,
the shifting of economic forces which inevitably occurs will render
changes in some items desirable between the necessarily long intervals
of congressional revision. Injustices are bound to develop, such as were
experienced by the dairymen, the flaxseed producers, the glass industry,
and others, under the 1922 rates. For this reason, I have been most
anxious that the broad principle of the flexible tariff as provided in
the existing law should be preserved and its delays in action avoided by
more expeditious methods of determining the costs of production at home
and abroad, with executive authority to promulgate such changes upon
recommendation of the Tariff Commission after exhaustive investigation.
Changes by the Congress in the isolated items such as those to which I
have referred would have been most unlikely both because of the
concentrations of oppositions in the country, who could see no advantage
to their own industry or State, and because of the difficulty of
limiting consideration by the Congress to such isolated cases.

There is no fundamental conflict between the interests of the farmer and
the worker. Lowering of the standards of living of either tends to
destroy the other. The prosperity of one rests upon the well-being of
the other. Nor is there any real conflict between the East and the West
or the North and the South in the United States. The complete
interlocking of economic dependence, the common striving for social and
spiritual progress, our common heritage as Americans, and the infinite
web of national sentiment, have created a solidarity in a great people
unparalleled in all human history. These invisible bonds should not and
can not be shattered by differences of opinion growing out of discussion
of a tariff.

PUBLIC BUILDINGS

Under the provisions of various acts of Congress $300,000,000 has been
authorized for public buildings and the land upon which to construct
them, being $75,000,000 for the District of Columbia and $225,000,000
for the country at large. Excluding $25,000,000 which is for the
acquisition of land in the so-called "triangle" in this city, this
public building legislation provides for a five-year program for the
District of Columbia and between an eight and nine year program for the
country at large. Of this sum approximately $27,400,000 was expended up
to June 30 last, of which $11,400,000 has been expended in the District
and $16,000,000 outside.

Even this generous provision for both the District of Columbia and the
country is insufficient For most pressing governmental needs. Expensive
rents and inadequate facilities are extravagance and not economy. In the
District even after the completion of these projects we shall have fully
20,000 clerks housed in rented and temporary war buildings which can
last but a little longer.

I therefore recommend that consideration should be given to the
extension of authorizations both for the country at large and for the
District of Columbia again distributed over a term of years. A survey of
the need in both categories has been made by the Secretary of the
Treasury and the Postmaster General. It would be helpful in the present
economic situation if such steps were taken as would enable early
construction work.

An expedition and enlargement of the program in the District would bring
about direct economies in construction by enabling the erection of
buildings in regular sequence. By maintaining a stable labor force in
the city, contracts can be made on more advantageous terms.

The earlier completion of this program which is an acknowledged need
would add dignity to the celebration in 1932 of the two hundredth
anniversary of the birth of President Washington.

In consideration of these projects which contribute so much to dignify
the National Capital I should like to renew the suggestion that the Fine
Arts Commission should be required to pass upon private buildings which
are proposed for sites facing upon public buildings and parks. Without
such control much of the effort of the Congress in beautification of the
Capital will be minimized.

THE WATERWAYS AND FLOOD CONTROL

The development of inland waterways has received new impulse from the
completion during this year of the canalization of the Ohio to a uniform
9-foot depth. The development of the other segments of the Mississippi
system should be expedited and with this in view I am recommending an
increase in appropriations for rivers and harbors from $50,000,000 to
$55,000,000 per annum which, together with about $4,000,000 per annum
released by completion of the Ohio, should make available after
providing for other river and harbor works a sum of from $25,000,000 to
$30,000,000 per annum for the Mississippi system and thus bring it to
early completion.

Conflict of opinion which has arisen over the proposed floodway from the
Arkansas River to the Gulf of Mexico via the Atchafalaya River has led
me to withhold construction upon this portion of the Mississippi flood
control plan until it could be again reviewed by the engineers for any
further recommendation to Congress. The other portions of the project
are being vigorously prosecuted and I have recommended an increase in
appropriations for this from $30,000,000 of the present year to
$35,000,000 during the next fiscal year.

Expansion of our intracoastal waterways to effective barge depths is
well warranted. We are awaiting the action of Canada upon the St.
Lawrence waterway project.

HIGHWAYS

There are over 3,000,000 miles of legally established highways in the
United States, of which about 10 per cent are included in the State
highway systems, the remainder being county and other local roads. About
626,000 miles have been improved with some type of surfacing, comprising
some 63 per cent of the State highway systems and 16 per cent of the
local roads. Of the improved roads about 102,000 miles are hard
surfaced, comprising about 22 per cent of the State highway systems and
about 8 per cent of the local roads.

While proper planning should materially reduce the listed mileage of
public roads, particularly in the agricultural districts, and turn these
roads back to useful purposes, it is evident that road construction must
be a long-continued program. Progress in improvement is about 50,000
miles of all types per annum, of which some 12,000 miles are of the more
durable types. The total expenditures of Federal, State, and local
governments last year for construction and maintenance assumed the huge
total of $1,660,000,000.

Federal aid in the construction of the highway systems in conjunction
with the States has proved to be beneficial and stimulating. We must
ultimately give consideration to the increase of our contribution to
these systems, particularly with a view to stimulating the improvement
of farm-to-market roads.

POST OFFICE

Our Post Office deficit has now increased to over $80,000,000 a year, of
which perhaps $14,000,000 is due to losses on ocean mail and air mail
contracts. The department is making an exhaustive study of the sources
of the deficit with view to later recommendation to Congress in respect
to it.

The Post Office quarters are provided in part by the Federal
construction, in part by various forms of rent and lease arrangements.
The practice has grown up in recent years of contracting long term
leases under which both rent and amortization principal cost of
buildings is included. I am advised that fully 40 per cent could be
saved from many such rent and lease agreements even after allowing
interest on the capital required at the normal Government rate. There
are also many objectionable features to some of these practices. The
provision of adequate quarters for the Post Office should be put on a
sound basis.

A revision of air mail rates upon a more systematic and permanent
footing is necessary. The subject is under study, and if legislation
should prove necessary the subject will be presented to the Congress. In
the meantime I recommend that the Congress should consider the
desirability of authorizing further expansion of the South American
services.

COMMERCIAL AVIATION

During the past year progress in civil aeronautics has been remarkable.
This is to a considerable degree due to the wise assistance of the
Federal Government through the establishment and maintenance of airways
by the Department of Commerce and the mail contracts from the Post
Office Department. The Government-improved airways now exceed 25,000
miles--more than 14,000 miles of which will be lighted and equipped for
night-flying operations by the close of the current year. Airport
construction through all the States is extremely active. There are now
1,000 commercial and municipal airports in operation with an additional
1,200 proposed for early development.

Through this assistance the Nation is building a sound aviation system,
operated by private enterprise. Over 6,400 planes are in commercial use,
and 9,400 pilots are licensed by the Government. Our manufacturing
capacity has risen to 7,500 planes per annum. The aviation companies
have increased regular air transportation until it now totals 90,000
miles per day--one-fourth of which is flown by night. Mail and express
services now connect our principal cities, and extensive services for
passenger transportation have been inaugurated, and others of importance
are imminent. American air lines now reach into Canada and Mexico, to
Cuba, Porto Rico, Central America, and most of the important countries
of South America.

RAILWAYS

As a whole, the railroads never were in such good physical and financial
condition, and the country has never been so well served by them. The
greatest volume of freight traffic ever tendered is being carried at a
speed never before attained and with satisfaction to the shippers.
Efficiencies and new methods have resulted in reduction in the cost of
providing freight transportation, and freight rates show a continuous
descending line from the level enforced by the World War.

We have, however, not yet assured for the future that adequate system of
transportation through consolidations which was the objective of the
Congress in the transportation act. The chief purpose of consolidation
is to secure well-balanced systems with more uniform and satisfactory
rate structure, a more stable financial structure, more equitable
distribution of traffic, greater efficiency, and single-line instead of
multiple-line hauls. In this way the country will have the assurance of
better service and ultimately at lower and more even rates than would
otherwise be attained. Legislation to simplify and expedite
consolidation methods and better to protect public interest should be
enacted.

Consideration should also be given to relief of the members of the
Commission from the necessity of detailed attention to comparatively
inconsequential matters which, under the existing law, must receive
their direct and personal consideration. It is in the public interest
that the members of the Commission should not be so pressed by minor
matters that they have inadequate time for investigation and
consideration of the larger questions committed to them for solution. As
to many of these minor matters, the function of the Commission might
well be made revisory, and the primary responsibility delegated to
subordinate officials after the practice long in vogue in the executive
departments.

MERCHANT MARINE

Under the impulse of the merchant marine act of 1928 the transfer to
private enterprise of the Government-owned steamship lines is going
forward with increasing success. The Shipping Board now operates about
18 lines, which is less than half the number originally established, and
the estimate of expenditures for the coming fiscal year is based upon
reduction in losses on Government lines by approximately one-half.
Construction loans have been made to the amount of approximately
$75,000,000 out of the revolving fund authorized by Congress and have
furnished an additional aid to American shipping and further stimulated
the building of vessels in American yards.

Desirous of securing the full values to the Nation of the great effort
to develop our merchant marine by the merchant marine act soon after the
inauguration of the present administration, I appointed an
interdepartmental committee, consisting of the Secretary of Commerce, as
chairman, the Secretary of the Navy, the Postmaster General, and the
chairman of the Shipping Board, to make a survey of the policies being
pursued under the act of 1928 in respect of mail contracts; to inquire
into its workings and to advise the Postmaster General in the
administration of the act.

In particular it seemed to me necessary to determine if the result of
the contracts already let would assure the purpose expressed in the act,
"to further develop an American merchant marine, to assure its
permanence in the transportation of the foreign trade of the United
States, and for other purposes," and to develop a coordinated policy by
which these purposes may be translated into actualities.

In review of the mail contracts already awarded it was found that they
aggregated 25 separate awards imposing a governmental obligation of a
little over $12,000,000 per annum. Provision had been imposed in five of
the contracts for construction of new vessels with which to replace and
expand services. These requirements come to a total of 12 vessels in the
10-year period, aggregating 122,000 tons. Some other conditions in the
contracts had not worked out satisfactorily.

That study has now been substantially completed and the committee has
advised the desirability and the necessity of securing much larger
undertakings as to service and new construction in future contracts. The
committee at this time is recommending the advertising of 14 additional
routes, making substantial requirements for the construction of new
vessels during the life of each contract recommended. A total of 40 new
vessels will be required under the contracts proposed, about half of
which will be required to be built during the next three years. The
capital cost of this new construction will be approximately
$250,000,000, involving approximately 460,000 gross tons. Should bidders
be found who will make these undertakings, it will be necessary to
recommend to Congress an increase in the authorized expenditure by the
Post Office of about $5,500,000 annually. It will be most advantageous
to grant such an authority.

A conflict as to the administration of the act has arisen in the
contention of persons who have purchased Shipping Board vessels that
they are entitled to mail contracts irrespective of whether they are the
lowest bidder, the Post Office, on the other hand, being required by law
to let contracts in that manner. It is urgent that Congress should
clarify this situation.

THE BANKING SYSTEM

It is desirable that Congress should consider the revision of some
portions of the banking law.

The development of "group" and "chain" banking presents many new
problems. The question naturally arises as to whether if allowed to
expand without restraint these methods would dangerously concentrate
control of credit, and whether they would not in any event seriously
threaten one of the fundamentals of the American credit system--which is
that credit which is based upon banking deposits should be controlled by
persons within those areas which furnish these deposits and thus be
subject to the restraints of local interest and public opinion in those
areas. To some degree, however, this movement of chain or group banking
is a groping for stronger support to the banks and a more secure basis
for these institutions.

The growth in size and stability of the metropolitan banks is in marked
contrast to the trend in the country districts, with its many failures
and the losses these failures have imposed upon the agricultural
community.

The relinquishment of charters of national banks in great commercial
centers in favor of State charters indicates that some conditions
surround the national banks which render them unable to compete with
State banks; and their withdrawal results in weakening our national
banking system.

It has been proposed that permission should be granted to national banks
to engage in branch banking of a nature that would preserve within
limited regions the local responsibility and the control of such credit
institutions.

All these subjects, however, require careful investigation, and it might
be found advantageous to create a joint commission embracing Members of
the Congress and other appropriate Federal officials for subsequent
report.

ELECTRICAL POWER REGULATION

The Federal Power Commission is now comprised of three Cabinet officers,
and the duties involved in the competent conduct of the growing
responsibilities of this commission far exceed the time and attention
which these officials can properly afford from other important duties. I
recommended that authority be given for the appointment of full-time
commissioners to replace them.

It is also desirable that the authority of the commission should be
extended to certain phases of power regulation. The nature of the
electric utilities industry is such that about 90 per cent of all power
generation and distribution is intrastate in character, and most of the
States have developed their own regulatory systems as to certificates of
convenience, rates, and profits of such utilities. To encroach upon
their authorities and responsibilities would be an encroachment upon the
rights of the States. There are cases, however, of interstate character
beyond the jurisdiction of the States. To meet these cases it would be
most desirable if a method could be worked out by which initial action
may be taken between the commissions of the States whose joint action
should be made effective by the Federal Power Commission with a reserve
to act on its own motion in case of disagreement or nonaction by the
States.

THE RADIO COMMISSION

I recommend the reorganization of the Radio Commission into a permanent
body from its present temporary status. The requirement of the present
law that the commissioners shall be appointed from specified zones
should be abolished and a general provision made for their equitable
selection from different parts of the country. Despite the effort of the
commissioners, the present method develops a public insistence that the
commissioners are specially charged with supervision of radio affairs in
the zone from which each is appointed. As a result there is danger that
the system will degenerate from a national system into five regional
agencies with varying practices, varying policies, competitive
tendencies, and consequent failure to attain its utmost capacity for
service to the people as a whole.

MUSCLE SHOALS

It is most desirable that this question should be disposed of. Under
present conditions the income from these plants is less than could
otherwise be secured for its use, and more especially the public is not
securing the full benefits which could be obtained from them.

It is my belief that such parts of these plants as would be useful and
the revenues from the remainder should be dedicated for all time to the
farmers of the United States for investigation and experimentation on a
commercial scale in agricultural chemistry. By such means advancing
discoveries of science can be systematically applied to agricultural
need, and development of the chemical industry of the Tennessee Valley
can be assured.

I do not favor the operation by the Government of either power or
manufacturing business except as an unavoidable by-product of some other
major public purpose.

Any form of settlement of this question will imply entering upon a
contract or contracts for the lease of the plants either as a whole or
in parts and the reservation of facilities, products, or income for
agricultural purposes. The extremely technical and involved nature of
such contracts dealing with chemical and electrical enterprises, added
to the unusual difficulties surrounding these special plants, and the
rapid commercial changes now in progress in power and synthetic nitrogen
manufacture, lead me to suggest that Congress create a special
commission, not to investigate and report as in the past, but with
authority to negotiate and complete some sort of contract or contracts
on behalf of the Government, subject, of course, to such general
requirements as Congress may stipulate.

BOULDER DAM

The Secretary of the Interior is making satisfactory progress in
negotiation of the very complex contracts required for the sale of the
power to be generated at this project. These contracts must assure the
return of all Government outlays upon the project. I recommend that the
necessary funds be appropriated for the initiation of this work as soon
as the contracts are in the hands of Congress.

CONSERVATION

Conservation of national resources is a fixed policy of the Government.
Three important questions bearing upon conservation of the public lands
have become urgent.

Conservation of our oil and gas resources against future need is a
national necessity. The working of the oil permit system in development
of oil and gas resources on the public domain has been subject to great
abuse. I considered it necessary to suspend the issuance of such permits
and to direct the review of all outstanding permits as to compliance of
the holders with the law. The purpose was not only to end such abuse but
to place the Government in position to review the entire subject.

We are also confronted with a major problem in conservation due to the
overgrazing on public lands. The effect of overgrazing (which has now
become general) is not only to destroy the ranges but by impairing the
ground coverage seriously to menace the water supply in many parts of
the West through quick run-off, spring floods, and autumn drought.

We have a third problem of major dimensions in the reconsideration of
our reclamation policy. The inclusion of most of the available lands of
the public domain in existing or planned reclamation projects largely
completes the original purpose of the Reclamation Service. There still
remains the necessity for extensive storage of water in the arid States
which renders it desirable that we should give a wider vision and
purpose to this service.

To provide for careful consideration of these questions and also of
better division of responsibilities in them as between the State and
Federal Governments, including the possible transfer to the States for
school purposes of the lands unreserved for forests, parks, power,
minerals, etc., I have appointed a Commission on Conservation of the
Public Domain, with a membership representing the major public land
States and at the same time the public at large. I recommend that
Congress should authorize a moderate sum to defray their expenses.

SOCIAL SERVICE

The Federal Government provides for an extensive and valuable program of
constructive social service, in education, home building, protection to
women and children, employment, public health, recreation, and many
other directions.

In a broad sense Federal activity in these directions has been confined
to research and dissemination of information and experience, and at most
to temporary subsidies to the States in order to secure uniform
advancement in practice and methods. Any other attitude by the Federal
Government will undermine one of the most precious possessions of the
American people; that is, local and individual responsibility. We should
adhere to this policy.

Federal officials can, however, make a further and most important
contribution by leadership in stimulation of the community and voluntary
agencies, and by extending Federal assistance in organization of these
forces and bringing about cooperation among them.

As an instance of this character, I have recently, in cooperation with
the Secretaries of Interior and Labor, laid the foundations of an
exhaustive inquiry into the facts precedent to a nation-wide White House
conference on child health and protection. This cooperative movement
among interested agencies will impose no expense upon the Government.
Similar nation-wide conferences will be called in connection with better
housing and recreation at a later date.

In view of the considerable difference of opinion as to the policies
which should be pursued by the Federal Government with respect to
education, I have appointed a committee representative of the important
educational associations and others to investigate and present
recommendations. In cooperation with the Secretary of the Interior, I
have also appointed a voluntary committee of distinguished membership to
assist in a nation-wide movement for abolition of illiteracy.

I have recommended additional appropriations for the Federal employment
service in order that it may more fully cover its cooperative work with
State and local services. I have also recommended additional
appropriations for the Women's and Children's Bureaus for much needed
research as to facts which I feel will prove most helpful.

PUBLIC HEALTH

The advance in scientific discovery as to disease and health imposes new
considerations upon us. The Nation as a whole is vitally interested in
the health of all the people; in protection from spread of contagious
disease; in the relation of physical and mental disabilities to
criminality; and in the economic and moral advancement which is
fundamentally associated with sound body and mind. The organization of
preventive measures and health education in its personal application is
the province of public health service. Such organization should be as
universal as public education. Its support is a proper burden upon the
taxpayer. It can not be organized with success, either in its sanitary
or educational phases, except under public authority. It should be based
upon local and State responsibility, but I consider that the Federal
Government has an obligation of contribution to the establishment of
such agencies.

In the practical working out of organization, exhaustive experiment and
trial have demonstrated that the base should be competent organization
of the municipality, county, or other local unit. Most of our
municipalities and some 400 rural counties out of 3,000 now have some
such unit organization. Where highly developed, a health unit comprises
at least a physician, sanitary engineer, and community nurse with the
addition, in some cases, of another nurse devoted to the problems of
maternity and children. Such organization gives at once a fundamental
control of preventive measures and assists in community instruction. The
Federal Government, through its interest in control of contagion, acting
through the United States Public Health Service and the State agencies,
has in the past and should in the future concern itself with this
development, particularly in the many rural sections which are
unfortunately far behind in progress. Some parts of the funds
contributed under the Sheppard-Towner Act through the Children's Bureau
of the Department of Labor have also found their way into these
channels.

I recommend to the Congress that the purpose of the Sheppard-Towner Act
should be continued through the Children's Bureau for a limited period
of years; and that the Congress should consider the desirability of
confining the use of Federal funds by the States to the building up of
such county or other local units, and that such outlay should be
positively coordinated with the funds expended through the United States
Public Health Service directed to other phases of the same county or
other local unit organization. All funds appropriated should of course
be applied through the States, so that the public health program of the
county or local unit will be efficiently coordinated with that of the
whole State.

FEDERAL PRISONS

Closely related to crime conditions is the administration of the Federal
prison system. Our Federal penal institutions are overcrowded, and this
condition is daily becoming worse. The parole and probation systems are
inadequate. These conditions make it impossible to perform the work of
personal reconstruction of prisoners so as to prepare them for return to
the duties of citizenship. In order to relieve the pressing evils I have
directed the temporary transfer of the Army Disciplinary Barracks at
Leavenworth to the Department of Justice for use as a Federal prison.
Not only is this temporary but it is inadequate for present needs.

We need some new Federal prisons and a reorganization of our probation
and parole systems; and there should be established in the Department of
Justice a Bureau of Prisons with a sufficient force to deal adequately
with the growing activities of our prison institutions. Authorization
for the improvements should be given speedily, with initial
appropriations to allow the construction of the new institutions to be
undertaken at once. IMMIGRATION

Restriction of immigration has from every aspect proved a sound national
policy. Our pressing problem is to formulate a method by which the
limited number of immigrants whom we do welcome shall be adapted to our
national setting and our national needs.

I have been opposed to the basis of the quotas now in force and I have
hoped that we could find some practical method to secure what I believe
should be our real national objective; that is, fitness of the immigrant
as to physique, character, training, and our need of service. Perhaps
some system of priorities within the quotas could produce these results
and at the same time enable some hardships in the present system to be
cleared up. I recommend that the Congress should give the subject
further study, in which the executive departments will gladly cooperate
with the hope of discovering such method as will more fully secure our
national necessities. VETERANS

It has been the policy of our Government almost from its inception to
make provision for the men who have been disabled in defense of our
country. This policy should be maintained. Originally it took the form
of land grants and pensions. This system continued until our entry into
the World War. The Congress at that time inaugurated a new plan of
compensation, rehabilitation, hospitalization, medical care and
treatment, and insurance, whereby benefits were awarded to those
veterans and their immediate dependents whose disabilities were
attributable to their war service. The basic principle in this
legislation is sound.

In a desire to eliminate all possibilities of injustice due to
difficulties in establishing service connection of disabilities, these
principles have been to some degree extended. Veterans whose diseases or
injuries have become apparent within a brief period after the war are
now receiving compensation; insurance benefits have been liberalized.
Emergency officers are now receiving additional benefits. The doors of
the Government's hospitals have been opened to all veterans, even though
their diseases or injuries were not the result of their war service. In
addition adjusted service certificates have been issued to 3,433,300
veterans. This in itself will mean an expenditure of nearly
$3,500,000,000 before 1945, in addition to the $600,000,000 which we are
now appropriating annually for our veterans' relief.

The administration of all laws concerning the veterans and their
dependents has been upon the basis of dealing generously, humanely, and
justly. While some inequalities have arisen, substantial and adequate
care has been given and justice administered. Further improvement in
administration may require some amendment from time to time to the law,
but care should be taken to see that such changes conform to the basic
principles of the legislation.

I am convinced that we will gain in efficiency, economy, and more
uniform administration and better definition of national policies if the
Pension Bureau, the National Home for Volunteer Soldiers, and the
Veterans' Bureau are brought together under a single agency. The total
appropriations to these agencies now exceed $800,000,000 per annum.

CIVIL SERVICE

Approximately four-fifths of all the employees in the executive civil
service now occupy positions subject to competitive examination under
the civil service law.

There are, however, still commanding opportunities for extending the
system. These opportunities lie within the province of Congress and not
the President. I recommend that a further step be taken by authorization
that appointments of third-class postmasters be made under the civil
service law.

DEPARTMENTAL REORGANIZATION

This subject has been under consideration for over 20 years. It was
promised by both political parties in the recent campaign. It has been
repeatedly examined by committees and commissions--congressional,
executive, and voluntary. The conclusions of these investigations have
been unanimous that reorganization is a necessity of sound
administration; of economy; of more effective governmental policies and
of relief to the citizen from unnecessary harassment in his relations
with a multitude of scattered governmental agencies. But the
presentation of any specific plan at once enlivens opposition from every
official whose authority may be curtailed or who fears his position is
imperiled by such a result; of bureaus and departments which wish to
maintain their authority and activities; of citizens and their
organizations who are selfishly interested, or who are inspired by fear
that their favorite bureau may, in a new setting, be less subject to
their influence or more subject to some other influence.

It seems to me that the essential principles of reorganization are two
in number. First, all administrative activities of the same major
purpose should be placed in groups under single-headed responsibility;
second, all executive and administrative functions should be separated
from boards and commissions and placed under individual responsibility,
while quasi-legislative and quasi-judicial and broadly advisory
functions should be removed from individual authority and assigned to
boards and commissions. Indeed, these are the fundamental principles
upon which our Government was founded, and they are the principles which
have been adhered to in the whole development of our business structure,
and they are the distillation of the common sense of generations.

For instance, the conservation of national resources is spread among
eight agencies in five departments. They suffer from conflict and
overlap. There is no proper development and adherence to broad national
policies and no central point where the searchlight of public opinion
may concentrate itself. These functions should be grouped under the
direction of some such official as an assistant secretary of
conservation. The particular department or cabinet officer under which
such a group should be placed is of secondary importance to the need of
concentration. The same may be said of educational services, of merchant
marine aids, of public works, of public health, of veterans' services,
and many others, the component parts of which are widely scattered in
the various departments and independent agencies. It is desirable that
we first have experience with these different groups in action before we
create new departments. These may be necessary later on.

With this background of all previous experience I can see no hope for
the development of a sound reorganization of the Government unless
Congress be willing to delegate its authority over the problem (subject
to defined principles) to the Executive, who should act upon approval of
a joint committee of Congress or with the reservation of power of
revision by Congress within some limited period adequate for its
consideration. PROHIBITION

The first duty of the President under his oath of office is to secure
the enforcement of the laws. The enforcement of the laws enacted to give
effect to the eighteenth amendment is far from satisfactory and this is
in part due to the inadequate organization of the administrative
agencies of the Federal Government. With the hope of expediting such
reorganization, I requested on June 6 last that Congress should appoint
a joint committee to collaborate with executive agencies in preparation
of legislation. It would be helpful if it could be so appointed. The
subject has been earnestly considered by the Law Enforcement Commission
and the administrative officials of the Government. Our joint
conclusions are that certain steps should be taken at once. First, there
should be an immediate concentration of responsibility and strengthening
of enforcement agencies of the Federal Government by transfer to the
Department of Justice of the Federal functions of detection and to a
considerable degree of prosecution, which are now lodged in the
Prohibition Bureau in the Treasury; and at the same time the control of
the distribution of industrial alcohol and legalized beverages should
remain in the Treasury. Second, provision should be made for relief of
congestion in the Federal courts by modifying and simplifying the
procedure for dealing with the large volume of petty prosecutions under
various Federal acts. Third, there should be a codification of the laws
relating to prohibition to avoid the necessity which now exists of
resorting to more than 25 statutes enacted at various times over 40
years. Technical defects in these statutes that have been disclosed
should be cured. I would add to these recommendations the desirability
of reorganizing the various services engaged in the prevention of
smuggling into one border patrol under the Coast Guard. Further
recommendations upon the subject as a whole will be developed after
further examination by the Law Enforcement Commission, but it is not to
be expected that any criminal law will ever be fully enforced so long as
criminals exist.

The District of Columbia should be the model of city law enforcement in
the Nation. While conditions here are much better than in many other
cities, they are far from perfect, and this is due in part to the
congestion of criminal cases in the Supreme Court of the District,
resulting in long delays. Furthermore, there is need for legislation in
the District supplementing the national prohibition act, more sharply
defining and enlarging the duties and powers of the District
Commissioners and the police of the District, and opening the way for
better cooperation in the enforcement of prohibition between the
District officials and the prohibition officers of the Federal
Government. It is urgent that these conditions be remedied.

LAW ENFORCEMENT AND OBSERVANCE

No one will look with satisfaction upon the volume of crime of all kinds
and the growth of organized crime in our country. We have pressing need
so to organize our system of administering criminal justice as to
establish full vigor and effectiveness. We need to reestablish faith
that the highest interests of our country are served by insistence upon
the swift and even-handed administration of justice to all offenders,
whether they be rich or poor. That we shall effect improvement is vital
to the preservation of our institutions. It is the most serious issue
before our people.

Under the authority of Congress I have appointed a National Commission
on Law Observance and Enforcement, for an exhaustive study of the entire
problem of the enforcement of our laws and the improvement of our
judicial system, including the special problems and abuses growing out
of the prohibition laws. The commission has been invited to make the
widest inquiry into the shortcomings of the administration of justice
and into the causes and remedies for them. It has organized its work
under subcommittees dealing with the many contributory causes of our
situation and has enlisted the aid of investigators in fields requiring
special consideration. I am confident that as a result of its studies
now being carried forward it will make a notable contribution to the
solution of our pressing problems.

Pending further legislation, the Department of Justice has been striving
to weed out inefficiency wherever it exists, to stimulate activity on
the part of its prosecuting officers, and to use increasing care in
examining into the qualifications of those appointed to serve as
prosecutors. The department is seeking systematically to strengthen the
law enforcement agencies week by week and month by month, not by
dramatic displays but by steady pressure; by removal of negligent
officials and by encouragement and assistance to the vigilant. During
the course of these efforts it has been revealed that in some districts
causes contributing to the congestion of criminal dockets, and to delays
and inefficiency in prosecutions, have been lack of sufficient forces in
the offices of United States attorneys, clerks of courts, and marshals.
These conditions tend to clog the machinery of justice. The last
conference of senior circuit judges has taken note of them and indorsed
the department's proposals for improvement. Increases in appropriations
are necessary and will be asked for in order to reenforce these offices.

The orderly administration of the law involves more than the mere
machinery of law enforcement. The efficient use of that machinery and a
spirit in our people in support of law are alike essential. We have need
for improvement in both. However much we may perfect the mechanism,
still if the citizen who is himself dependent upon some laws for the
protection of all that he has and all that he holds dear, shall insist
on selecting the particular laws which he will obey, he undermines his
own safety and that of his country. His attitude may obscure, but it can
not conceal, the ugly truth that the lawbreaker, whoever he may be, is
the enemy of society. We can no longer gloss over the unpleasant reality
which should be made vital in the consciousness of every citizen, that
he who condones or traffics with crime, who is indifferent to it and to
the punishment of the criminal, or to the lax performance of official
duty, is himself the most effective agency for the breakdown of society.

Law can not rise above its source in good citizenship--in what
right-minded men most earnestly believe and desire. If the law is upheld
only by Government officials, then all law is at an end. Our laws are
made by the people themselves; theirs is the right to work for their
repeal; but until repeal it is an equal duty to observe them and demand
their enforcement.

I have been gratified at the awakening sense of this responsibility in
our citizens during the past few months, and gratified that many
instances have occurred which refuted the cynicism which has asserted
that our system could not convict those who had defied the law and
possessed the means to resist its execution. These things reveal a moral
awakening both in the people and in officials which lies at the very
foundation of the rule of law.

CONCLUSION

The test of the rightfulness of our decisions must be whether we have
sustained and advanced the ideals of the American people;
self-government in its foundations of local government; justice whether
to the individual or to the group; ordered liberty; freedom from
domination; open opportunity and equality of opportunity; the initiative
and individuality of our people; prosperity and the lessening of
poverty; freedom of public opinion; education; advancement of knowledge;
the growth of religious spirit; the tolerance of all faiths; the
foundations of the home and the advancement of peace.

The White House,

December 3, 1929

***

State of the Union Address
Herbert Hoover
December 2, 1930

To the Senate and House of Representatives:

I have the honor to comply with the requirement of the Constitution that
I should lay before the Congress information as to the state of the
Union, and recommend consideration of such measures as are necessary and
expedient.

Substantial progress has been made during the year in national peace and
security; the fundamental strength of the Nation's economic life is
unimpaired; education and scientific discovery have made advances; our
country is more alive to its problems of moral and spiritual welfare.

ECONOMIC SITUATION

During the past 12 months we have suffered with other Nations from
economic depression.

The origins of this depression lie to some extent within our own borders
through a speculative period which diverted capital and energy into
speculation rather than constructive enterprise. Had overspeculation in
securities been the only force operating, we should have seen recovery
many months ago, as these particular dislocations have generally
readjusted themselves.

Other deep-seated causes have been in action, however, chiefly the
world-wide overproduction beyond even the demand of prosperous times for
such important basic commodities as wheat, rubber, coffee, sugar,
copper, silver, zinc, to some extent cotton, and other raw materials.
The cumulative effects of demoralizing price falls of these important
commodities in the process of adjustment of production to world
consumption have produced financial crises in many countries and have
diminished the buying power of these countries for imported goods to a
degree which extended the difficulties farther afield by creating
unemployment in all the industrial nations. The political agitation in
Asia; revolutions in South America and political unrest in some European
States; the methods of sale by Russia of her increasing agricultural
exports to European markets; and our own drought--have all contributed
to prolong and deepen the depression.

In the larger view the major forces of the depression now lie outside of
the United States, and our recuperation has been retarded by the
unwarranted degree of fear and apprehension created by these outside
forces.

The extent of the depression is indicated by the following approximate
percentages of activity during the past three months as compared with
the highly prosperous year of 1928:

Value of department-store sales - 93% of 1928

Volume of manufacturing production - 80% of 1928

Volume of mineral production - 90% of 1928

Volume of factory employment - 84% of 1928

Total of bank deposits - 105% of 1928

Wholesale prices--all commodities - 83% of 1928

Cost of living - 94% of 1928

Various other indexes indicate total decrease of activity from 1928 of
from 15 to 20 per cent.

There are many factors which give encouragement for the future. The fact
that we are holding from 80 to 85 per cent of our normal activities and
incomes; that our major financial and industrial institutions have come
through the storm unimpaired; that price levels of major commodities
have remained approximately stable for some time; that a number of
industries are showing signs of increasing demand; that the world at
large is readjusting itself to the situation; all reflect grounds for
confidence. We should remember that these occasions have been met many
times before, that they are but temporary, that our country is to-day
stronger and richer in resources, in equipment, in skill, than ever in
its history. We are in an extraordinary degree self-sustaining, we will
overcome world influences and will lead the march of prosperity as we
have always done hitherto.

Economic depression can not be cured by legislative action or executive
pronouncement. Economic wounds must be healed by the action of the cells
of the economic body--the producers and consumers themselves. Recovery
can be expedited and its effects mitigated by cooperative action. That
cooperation requires that every individual should sustain faith and
courage; that each should maintain his self-reliance; that each and
every one should search for methods of improving his business or
service; that the vast majority whose income is unimpaired should not
hoard out of fear but should pursue their normal living and recreations;
that each should seek to assist his neighbors who may be less fortunate;
that each industry should assist its own employees; that each community
and each State should assume its full responsibilities for organization
of employment and relief of distress with that sturdiness and
independence which built a great Nation.

Our people are responding to these impulses in remarkable degree. The
best contribution of government lies in encouragement of this voluntary
cooperation in the community. The Government, National, State, and
local, can join with the community in such programs and do its part. A
year ago I, together with other officers of the Government, initiated
extensive cooperative measures throughout the country.

The first of these measures was an agreement of leading employers to
maintain the standards of wages and of labor leaders to use their
influence against strife. In a large sense these undertakings have been
adhered to and we have not witnessed the usual reductions of wages which
have always heretofore marked depressions. The index of union wage
scales shows them to be today fully up to the level of any of the
previous three years. In consequence the buying power of the country has
been much larger than would otherwise have been the case. Of equal
importance the Nation has had unusual peace in industry and freedom from
the public disorder which has characterized previous depressions.

The second direction of cooperation has been that our governments,
National, State, and local, the industries and business so distribute
employment as to give work to the maximum number of employees.

The third direction of cooperation has been to maintain and even extend
construction work and betterments in anticipation of the future. It has
been the universal experience in previous depressions that public works
and private construction have fallen off rapidly with the general tide
of depression. On this occasion, however, the increased authorization
and generous appropriations by the Congress and the action of States and
municipalities have resulted in the expansion of public construction to
an amount even above that in the most prosperous years. In addition the
cooperation of public utilities, railways, and other large organizations
has been generously given in construction and betterment work in
anticipation of future need. The Department of Commerce advises me that
as a result, the volume of this type of construction work, which
amounted to roughly $6,300,000,000 in 1929, instead of decreasing will
show a total of about $7,000,000,000 for 1930. There has, of course,
been a substantial decrease in the types of construction which could not
be undertaken in advance of need.

The fourth direction of cooperation was the organization in such States
and municipalities, as was deemed necessary, of committees to organize
local employment, to provide for employment agencies, and to effect
relief of distress.

The result of magnificent cooperation throughout the country has been
that actual suffering has been kept to a minimum during the past 12
months, and our unemployment has been far less in proportion than in
other large industrial countries. Some time ago it became evident that
unemployment would continue over the winter and would necessarily be
added to from seasonal causes and that the savings of workpeople would
be more largely depleted. We have as a Nation a definite duty to see
that no deserving person in our country suffers from hunger or cold. I
therefore set up a more extensive organization to stimulate more
intensive cooperation throughout the country. There has been a most
gratifying degree of response, from governors, mayors, and other public
officials, from welfare organizations, and from employers in concerns
both large and small. The local communities through their voluntary
agencies have assumed the duty of relieving individual distress and are
being generously supported by the public.

The number of those wholly out of employment seeking for work was
accurately determined by the census last April as about 2,500,000. The
Department of Labor index of employment in the larger trades shows some
decrease in employment since that time. The problem from a relief point
of view is somewhat less than the published estimates of the number of
unemployed would indicate. The intensive community and individual
efforts in providing special employment outside the listed industries
are not reflected in the statistical indexes and tend to reduce such
published figures. Moreover, there is estimated to be a constant figure
at all times of nearly 1,000,000 unemployed who are not without annual
income but temporarily idle in the shift from one job to another. We
have an average of about three breadwinners to each two families, so
that every person unemployed does not represent a family without income.
The view that the relief problems are less than the gross numbers would
indicate is confirmed by the experience of several cities, which shows
that the number of families in distress represents from 10 to 20 per
cent of the number of the calculated unemployed. This is not said to
minimize the very real problem which exists but to weigh its actual
proportions.

As a contribution to the situation the Federal Government is engaged
upon the greatest program of waterway, harbor, flood control, public
building, highway, and airway improvement in all our history. This,
together with loans to merchant shipbuilders, improvement of the Navy
and in military aviation, and other construction work of the Government
will exceed $520,000,000 for this fiscal year. This compares with
$253,000,000 in the fiscal year 1928. The construction works already
authorized and the continuation of policies in Government aid will
require a continual expenditure upwards of half a billion dollars
annually.

I favor still further temporary expansion of these activities in aid to
unemployment during this winter. The Congress will, however, have
presented to it numbers of projects, some of them under the guise of,
rather than the reality of, their usefulness in the increase of
employment during the depression. There are certain commonsense
limitations upon any expansions of construction work. The Government
must not undertake works that are not of sound economic purpose and that
have not been subject to searching technical investigation, and which
have not been given adequate consideration by the Congress. The volume
of construction work in the Government is already at the maximum limit
warranted by financial prudence as a continuing policy. To increase
taxation for purposes of construction work defeats its own purpose, as
such taxes directly diminish employment in private industry. Again any
kind of construction requires, after its authorization, a considerable
time before labor can be employed in which to make engineering,
architectural, and legal preparations. Our immediate problem is the
increase of employment for the next six months, and new plans which do
not produce such immediate result or which extend commitments beyond
this period are not warranted.

The enlarged rivers and harbors, public building, and highway plans
authorized by the Congress last session, however, offer an opportunity
for assistance by the temporary acceleration of construction of these
programs even faster than originally planned, especially if the
technical requirements of the laws which entail great delays could be
amended in such fashion as to speed up acquirements of land and the
letting of contracts.

With view, however, to the possible need for acceleration, we,
immediately upon receiving those authorities from the Congress five
months ago, began the necessary technical work in preparation for such
possible eventuality. I have canvassed the departments of the Government
as to the maximum amount that can be properly added to our present
expenditure to accelerate all construction during the next six months,
and I feel warranted in asking the Congress for an appropriation of from
$100,000,000 to $150,000,000 to provide such further employment in this
emergency. In connection therewith we need some authority to make
enlarged temporary advances of Federal-highway aid to the States.

I recommend that this appropriation be made distributable to the
different departments upon recommendation of a committee of the Cabinet
and approval by the President. Its application to works already
authorized by the Congress assures its use in directions of economic
importance and to public welfare. Such action will imply an expenditure
upon construction of all kinds of over $650,000,000 during the next
twelve months.

AGRICULTURE

The world-wide depression has affected agriculture in common with all
other industries. The average price of farm produce has fallen to about
80 per cent of the levels of 1928. This average is, however, greatly
affected by wheat and cotton, which have participated in world-wide
overproduction and have fallen to about 60 per cent of the average price
of the year 1928. Excluding these commodities, the prices of all other
agricultural products are about 84 per cent of those of 1928. The
average wholesale prices of other primary goods, such as nonferrous
metals, have fallen to 76 per cent of 1928.

The price levels of our major agricultural commodities are, in fact,
higher than those in other principal producing countries, due to the
combined result of the tariff and the operations of the Farm Board. For
instance, wheat prices at Minneapolis are about 30 per cent higher than
at Winnipeg, and at Chicago they are about 20 per cent higher than at
Buenos Aires. Corn prices at Chicago are over twice as high as at Buenos
Aires. Wool prices average more than 80 per cent higher in this country
than abroad, and butter is 30 per cent higher in New York City than in
Copenhagen.

Aside from the misfortune to agriculture of the world-wide depression we
have had the most severe drought. It has affected particularly the
States bordering on the Potomac, Ohio, and Lower Mississippi Rivers,
with some areas in Montana, Kansas, Oklahoma, and Texas. It has found
its major expression in the shortage of pasturage and a shrinkage in the
corn crop from an average of about 2,800,000,000 bushels to about
2,090,000,000 bushels.

On August 14 I called a conference of the governors of the most acutely
affected States, and as a result of its conclusions I appointed a
national committee comprising the heads of the important Federal
agencies under the chairmanship of the Secretary of Agriculture. The
governors in turn have appointed State committees representative of the
farmers, bankers, business men, and the Red Cross, and subsidiary
committees have been established in most of the acutely affected
counties. Railway rates were reduced on feed and livestock in and out of
the drought areas, and over 50,000 cars of such products have been
transported under these reduced rates. The Red Cross established a
preliminary fund of $5,000,000 for distress relief purposes and
established agencies for its administration in each county. Of this fund
less than $500,000 has been called for up to this time as the need will
appear more largely during the winter. The Federal Farm Loan Board has
extended its credit facilities, and the Federal Farm Board has given
financial assistance to all affected cooperatives.

In order that the Government may meet its full obligation toward our
countrymen in distress through no fault of their own, I recommend that
an appropriation should be made to the Department of Agriculture to be
loaned for the purpose of seed and feed for animals. Its application
should as hitherto in such loans be limited to a gross amount to any one
individual, and secured upon the crop.

The Red Cross can relieve the cases of individual distress by the
sympathetic assistance of our people.

FINANCES OF THE GOVERNMENT

I shall submit the detailed financial position of the Government with
recommendations in the usual Budget message. I will at this time,
however, mention that the Budget estimates of receipts and expenditures
for the current year were formulated by the Treasury and the Budget
Bureau at a time when it was impossible to forecast the severity of the
business depression and have been most seriously affected by it. At that
time a surplus of about $123,000,000 was estimated for this fiscal year
and tax reduction which affected the fiscal year to the extent of
$75,000,000 was authorized by the Congress, thus reducing the estimated
surplus to about $48,000,000. Closely revised estimates now made by the
Treasury and the Bureau of the Budget of the tax, postal, and other
receipts for the current fiscal year indicate a decrease of about
$430,000,000 from the estimate of a year ago, of which about $75,000,000
is due to tax reduction, leaving about $355,000,000 due to the
depression. Moreover, legislation enacted by Congress subsequent to the
submission of the Budget enlarging Federal construction work to expand
employment and for increase in veterans' services and other items, have
increased expenditures during the current fiscal year by about
$225,000,000.

Thus the decrease of $430,000,000 in revenue and the increase of
$225,000,000 in expenditure adversely change the original Budget
situation by about $655,000,000. This large sum is offset by the
original estimated surplus a year ago of about $123,000,000, by the
application of $185,000,000 of interest payments upon the foreign debt
to current expenditures, by arrangements of the Farm Board through
repayments, etc., in consequence of which they reduced their net cash
demands upon the Treasury by $100,000,000 in this period, and by about
$67,000,000 economies and deferments brought about in the Government,
thus reducing the practical effect of the change in the situation to an
estimated deficit of about $180,000,000 for the present fiscal year. I
shall make suggestions for handling the present-year deficit in the
Budget message, but I do not favor encroachment upon the statutory
reduction of the public debt.

While it will be necessary in public interest to further increase
expenditures during the current fiscal year in aid to unemployment by
speeding up construction work and aid to the farmers affected by the
drought, I can not emphasize too strongly the absolute necessity to
defer any other plans for increase of Government expenditures. The
Budget for 1932 fiscal year indicates estimated expenditure of about
$4,054,000,000, including postal deficit. The receipts are estimated at
about $4,085,000,000 if the temporary tax reduction of last year be
discontinued, leaving a surplus of only about $30,000,000. Most rigid
economy is therefore necessary to avoid increase in taxes.

NATIONAL DEFENSE

Our Army and Navy are being maintained at a high state of efficiency,
under officers of high training and intelligence, supported by a devoted
personnel of the rank and file. The London naval treaty has brought
important economies in the conduct of the Navy. The Navy Department will
lay before the committees of the Congress recommendations for a program
of authorization of new construction which should be initiated in the
fiscal year of 1932.

LEGISLATION

This is the last session of the Seventy-first Congress. During its
previous sittings it has completed a very large amount of important
legislation, notably: The establishment of the Federal Farm Board;
fixing congressional reapportionment; revision of the tariff, including
the flexible provisions and a reorganization of the Tariff Commission;
reorganization of the Radio Commission; reorganization of the Federal
Power Commission; expansion of Federal prisons; reorganization of parole
and probation system in Federal prisons; expansion of veterans'
hospitals; establishment of disability allowances to veterans;
consolidation of veteran activities; consolidation and strengthening of
prohibition enforcement activities in the Department of Justice;
organization of a Narcotics Bureau; large expansion of rivers and
harbors improvements; substantial increase in Federal highways;
enlargement of public buildings construction program; and the
ratification of the London naval treaty.

The Congress has before it legislation partially completed in the last
sitting in respect to Muscle Shoals, bus regulation, relief of
congestion in the courts, reorganization of border patrol in prevention
of smuggling, law enforcement in the District of Columbia, and other
subjects.

It is desirable that these measures should be completed.

The short session does not permit of extensive legislative programs, but
there are a number of questions which, if time does not permit action, I
recommend should be placed in consideration by the Congress, perhaps
through committees cooperating in some instances with the Federal
departments, with view to preparation for subsequent action. Among them
are the following subjects:

ELECTRICAL POWER

I have in a previous message recommended effective regulation of
interstate electrical power. Such regulation should preserve the
independence and responsibility of the States.

RAILWAYS

We have determined upon a national policy of consolidation of the
railways as a necessity of more stable and more economically operated
transportation. Further legislation is necessary to facilitate such
consolidation. In the public interest we should strengthen the railways
that they may meet our future needs.

ANTITRUST LAWS

I recommend that the Congress institute an inquiry into some aspects of
the economic working of these laws. I do not favor repeal of the Sherman
Act. The prevention of monopolies is of most vital public importance.
Competition is not only the basis of protection to the consumer but is
the incentive to progress. However, the interpretation of these laws by
the courts, the changes in business, especially in the economic effects
upon those enterprises closely related to the use of the natural
resources of the country, make such an inquiry advisable. The producers
of these materials assert that certain unfortunate results of wasteful
and destructive use of these natural resources together with a
destructive competition which impoverishes both operator and worker can
not be remedied because of the prohibitive interpretation of the
antitrust laws. The well-known condition of the bituminous coal industry
is an illustration. The people have a vital interest in the conservation
of their natural resources; in the prevention of wasteful practices; in
conditions of destructive competition which may impoverish the producer
and the wage earner; and they have an equal interest in maintaining
adequate competition. I therefore suggest that an inquiry be directed
especially to the effect of the workings of the antitrust laws in these
particular fields to determine if these evils can be remedied without
sacrifice of the fundamental purpose of these laws.

CAPITAL-GAINS TAX

It is urged by many thoughtful citizens that the peculiar economic
effect of the income tax on so-called capital gains at the present rate
is to enhance speculative inflation and likewise impede business
recovery. I believe this to be the case and I recommend that a study be
made of the economic effects of this tax and of its relation to the
general structure of our income tax law.

IMMIGRATION

There is need for revision of our immigration laws upon a more limited
and more selective basis, flexible to the needs of the country.

Under conditions of current unemployment it is obvious that persons
coming to the United States seeking work would likely become either a
direct or indirect public charge. As a temporary measure the officers
issuing visas to immigrants have been, in pursuance of the law,
instructed to refuse visas to applicants likely to fall into this class.
As a result the visas issued have decreased from an average of about
24,000 per month prior to restrictions to a rate of about 7,000 during
the last month. These are largely preferred persons under the law. Visas
from Mexico are about 250 per month compared to about 4,000 previous to
restrictions. The whole subject requires exhaustive reconsideration.

DEPORTATION OF ALIEN CRIMINALS

I urge the strengthening of our deportation laws so as to more fully rid
ourselves of criminal aliens. Furthermore, thousands of persons have
entered the country in violation of the immigration laws. The very
method of their entry indicates their objectionable character, and our
law-abiding foreign-born residents suffer in consequence. I recommend
that the Congress provide methods of strengthening the Government to
correct this abuse.

POST OFFICE

Due to deferment of Government building over many years, previous
administrations had been compelled to enter upon types of leases for
secondary facilities in large cities, some of which were objectionable
as representing too high a return upon the value of the property. To
prevent the occasion for further uneconomic leasing I recommend that the
Congress authorize the building by the Government of its own facilities.

VETERANS

The Nation has generously expanded its care for veterans. The
consolidation of all veterans' activities into the Veterans'
Administration has produced substantial administrative economies. The
consolidation also brings emphasis to the inequalities in service and
allowances. The whole subject is under study by the administrator, and I
recommend it should also be examined by the committees of the Congress.

SOCIAL SERVICE

I urge further consideration by the Congress of the recommendations I
made a year ago looking to the development through temporary Federal aid
of adequate State and local services for the health of children and the
further stamping out of communicable disease, particularly in the rural
sections. The advance of scientific discovery, methods, and social
thought imposes a new vision in these matters. The drain upon the
Federal Treasury is comparatively small. The results both economic and
moral are of the utmost importance.

GENERAL

It is my belief that after the passing of this depression, when we can
examine it in retrospect, we shall need to consider a number of other
questions as to what action may be taken by the Government to remove
Possible governmental influences which make for instability and to
better organize mitigation of the effect of depression. It is as yet too
soon to constructively formulate such measures.

There are many administrative subjects, such as departmental
reorganization, extension of the civil service, readjustment of the
postal rates, etc., which at some appropriate time require the attention
of the Congress.

FOREIGN RELATIONS

Our relations with foreign countries have been maintained upon a high
basis of cordiality and good will.

During the past year the London naval pact was completed, approved by
the Senate, and ratified by the governments concerned. By this treaty we
have abolished competition in the building of warships, have established
the basis of parity of the United States with the strongest of foreign
powers, and have accomplished a substantial reduction in war vessels.

During the year there has been an extended political unrest in the
world. Asia continues in disturbed condition, and revolutions have taken
place in Brazil, Argentina, Peru, and Bolivia. Despite the jeopardy to
our citizens and their property which naturally arises in such
circumstances, we have, with the cooperation of the governments
concerned, been able to meet all such instances without friction.

We have resumed normal relations with the new Governments of Brazil,
Argentina, Peru, and Bolivia immediately upon evidence that they were
able to give protection to our citizens and their property, and that
they recognized their international obligations.

A commission which was supported by the Congress has completed its
investigation and reported upon our future policies in respect to Haiti
and proved of high value in securing the acceptance of these policies.
An election has been held and a new government established. We have
replaced our high commissioner by a minister and have begun the gradual
withdrawal of our activities with view to complete retirement at the
expiration of the present treaty in 1935.

A number of arbitration and conciliation treaties have been completed or
negotiated during the year, and will be presented for approval by the
Senate.

I shall, in a special message, lay before the Senate the protocols
covering the statutes of the World Court which have been revised to
accord with the sense of previous Senate reservations.

The White House,

December 2, 1930

***

State of the Union Address
Herbert Hoover
December 8, 1931

To the Senate and House of Representatives:

It is my duty under the Constitution to transmit to the Congress
information on the state of the Union and to recommend for its
consideration necessary and expedient measures.

The chief influence affecting the state of the Union during the past
year has been the continued world-wide economic disturbance. Our
national concern has been to meet the emergencies it has created for us
and to lay the foundations for recovery.

If we lift our vision beyond these immediate emergencies we find
fundamental national gains even amid depression. In meeting the problems
of this difficult period, we have witnessed a remarkable development of
the sense of cooperation in the community. For the first time in the
history of our major economic depressions there has been a notable
absence of public disorders and industrial conflict. Above all there is
an enlargement of social and spiritual responsibility among the people.
The strains and stresses upon business have resulted in closer
application, in saner policies, and in better methods. Public
improvements have been carried out on a larger scale than even in normal
times. The country is richer in physical property, in newly discovered
resources, and in productive capacity than ever before. There has been
constant gain in knowledge and education; there has been continuous
advance in science and invention; there has been distinct gain in public
health. Business depressions have been recurrent in the life of our
country and are but transitory. The Nation has emerged from each of them
with increased strength and virility because of the enlightenment they
have brought, the readjustments and the larger understanding of the
realities and obligations of life and work which come from them.

NATIONAL DEFENSE

Both our Army and Navy have been maintained in a high state of
efficiency. The ability and devotion of both officers and men sustain
the highest traditions of the service. Reductions and postponements in
expenditure of these departments to meet the present emergency are being
made without reducing existing personnel or impairing the morale of
either establishment.

The agreement between the leading naval powers for limitation of naval
armaments and establishment of their relative strength and thus
elimination of competitive building also implies for ourselves the
gradual expansion of the deficient categories in our Navy to the
parities provided in those treaties. However, none of the other nations,
parties to these agreements, is to-day maintaining the full rate of
construction which the treaty size of fleets would imply.

Although these agreements secured the maximum reduction of fleets which
it was at that time possible to attain, I am hopeful that the naval
powers, party to these agreements, will realize that establishment of
relative strength in itself offers opportunity for further reduction
without injury to any of them. This would be the more possible if
pending negotiations are successful between France and Italy. If the
world is to regain its standards of life, it must further decrease both
naval and other arms. The subject will come before the General
Disarmament Conference which meets in Geneva on February 2.

FOREIGN AFFAIRS

We are at peace with the world. We have cooperated with other nations to
preserve peace. The rights of our citizens abroad have been protected.

The economic depression has continued and deepened in every part of the
world during the past year. In many countries political instability,
excessive armaments, debts, governmental expenditures, and taxes have
resulted in revolutions, in unbalanced budgets and monetary collapse and
financial panics, in dumping of goods upon world markets, and in
diminished consumption of commodities.

Within two years there have been revolutions or acute social disorders
in 19 countries, embracing more than half the population of the world.
Ten countries have been unable to meet their external obligations. In 14
countries, embracing a quarter of the world's population, former
monetary standards have been temporarily abandoned. In a number of
countries there have been acute financial panics or compulsory
restraints upon banking. These disturbances have many roots in the
dislocations from the World War. Every one of them has reacted upon us.
They have sharply affected the markets and prices of our agricultural
and industrial products. They have increased unemployment and greatly
embarrassed our financial and credit system.

As our difficulties during the past year have plainly originated in
large degree from these sources, any effort to bring about our own
recuperation has dictated the necessity of cooperation by us with other
nations in reasonable effort to restore world confidence and economic
stability.

Cooperation of our Federal reserve system and our banks with the central
banks in foreign countries has contributed to localize and ameliorate a
number of serious financial crises or moderate the pressures upon us and
thus avert disasters which would have affected us.

The economic crisis in Germany and Central Europe last June rose to the
dimensions of a general panic from which it was apparent that without
assistance these nations must collapse. Apprehensions of such collapse
had demoralized our agricultural and security markets and so threatened
other nations as to impose further dangers upon us. But of highest
importance was the necessity of cooperation on our part to relieve the
people of Germany from imminent disasters and to maintain their
important relations to progress and stability in the world. Upon the
initiative of this Government a year's postponement of reparations and
other intergovernmental debts was brought about. Upon our further
initiative an agreement was made by Germany's private creditors
providing for an extension of such credits until the German people can
develop more permanent and definite forms of relief.

We have continued our policy of withdrawing our marines from Haiti and
Nicaragua.

The difficulties between China and Japan have given us great concern,
not alone for the maintenance of the spirit of the Kellogg-Briand Pact,
but for the maintenance of the treaties to which we are a party assuring
the territorial integrity of China. It is our purpose to assist in
finding solutions sustaining the full spirit of those treaties.

I shall deal at greater length with our foreign relations in a later
message.

THE DOMESTIC SITUATION

Many undertakings have been organized and forwarded during the past year
to meet the new and changing emergencies which have constantly
confronted us.

Broadly the community has cooperated to meet the needs of honest
distress, and to take such emergency measures as would sustain
confidence in our financial system and would cushion the violence of
liquidation in industry and commerce, thus giving time for orderly
readjustment of costs, inventories, and credits without panic and
widespread bankruptcy. These measures have served those purposes and
will promote recovery.

In these measures we have striven to mobilize and stimulate private
initiative and local and community responsibility. There has been the
least possible Government entry into the economic field, and that only
in temporary and emergency form. Our citizens and our local governments
have given a magnificent display of unity and action, initiative and
patriotism in solving a multitude of difficulties and in cooperating
with the Federal Government.

For a proper understanding of my recommendations to the Congress it is
desirable very briefly to review such activities during the past year.

The emergencies of unemployment have been met by action in many
directions. The appropriations for the continued speeding up of the
great Federal construction program have provided direct and indirect aid
to employment upon a large scale. By organized unity of action, the
States and municipalities have also maintained large programs of public
improvement. Many industries have been prevailed upon to anticipate and
intensify construction. Industrial concerns and other employers have
been organized to spread available work amongst all their employees,
instead of discharging a portion of them. A large majority have
maintained wages at as high levels as the safe conduct of their business
would permit. This course has saved us from industrial conflict and
disorder which have characterized all previous depressions. Immigration
has been curtailed by administrative action. Upon the basis of normal
immigration the decrease amounts to about 300,000 individuals who
otherwise would have been added to our unemployment. The expansion of
Federal employment agencies under appropriations by the Congress has
proved most effective. Through the President's organization for
unemployment relief, public and private agencies were successfully
mobilized last winter to provide employment and other measures against
distress. Similar organization gives assurance against suffering during
the coming winter. Committees of leading citizens are now active at
practically every point of unemployment. In the large majority they have
been assured the funds necessary which, together with local government
aids, will meet the situation. A few exceptional localities will be
further organized. The evidence of the Public Health Service shows an
actual decrease of sickness and infant and general mortality below
normal years. No greater proof could be adduced that our people have
been protected from hunger and cold and that the sense of social
responsibility in the Nation has responded to the need of the
unfortunate.

To meet the emergencies in agriculture the loans authorized by Congress
for rehabilitation in the drought areas have enabled farmers to produce
abundant crops in those districts. The Red Cross undertook and
magnificently administered relief for over 2,500,000 drought sufferers
last winter. It has undertaken this year to administer relief to 100,000
sufferers in the new drought area of certain Northwest States. The
action of the Federal Farm Board in granting credits to farm
cooperatives saved many of them from bankruptcy and increased their
purpose and strength. By enabling farm cooperatives to cushion the fall
in prices of farm products in 1930 and 1931 the Board secured higher
prices to the farmer than would have been obtained otherwise, although
the benefits of this action were partially defeated by continued world
overproduction. Incident to this action the failure of a large number of
farmers and of country banks was averted which could quite possibly have
spread into a major disaster. The banks in the South have cooperated
with the Farm Board in creation of a pool for the better marketing of
accumulated cotton. Growers have been materially assisted by this
action. Constant effort has been made to reduce overproduction in relief
of agriculture and to promote the foreign buying of agricultural
products by sustaining economic stability abroad.

To meet our domestic emergencies in credit and banking arising from the
reaction to acute crisis abroad the National Credit Association was set
up by the banks with resources of $500,000,000 to support sound banks
against the frightened withdrawals and hoarding. It is giving aid to
reopen solvent banks which have been closed. Federal officials have
brought about many beneficial unions of banks and have employed other
means which have prevented many bank closings. As a result of these
measures the hoarding withdrawals which had risen to over $250,000,000
per week after the British crisis have substantially ceased.

FURTHER MEASURES

The major economic forces and weaknesses at home and abroad have now
been exposed and can be appraised, and the time is ripe for forward
action to expedite our recovery.

Although some of the causes of our depression are due to speculation,
inflation of securities and real estate, unsound foreign investments,
and mismanagement of financial institutions, yet our self-contained
national economy, with its matchless strength and resources, would have
enabled us to recover long since but for the continued dislocations,
shocks, and setbacks from abroad.

Whatever the causes may be, the vast liquidation and readjustments which
have taken place have left us with a large degree of credit paralysis,
which together with the situation in our railways and the conditions
abroad, are now the outstanding obstacles to recuperation. If we can put
our financial resources to work and can ameliorate the financial
situation in the railways, I am confident we can make a large measure of
recovery independent of the rest of the world. A strong America is the
highest contribution to world stability.

One phase of the credit situation is indicated in the banks. During the
past year banks, representing 3 per cent of our total deposits have been
closed. A large part of these failures have been caused by withdrawals
for hoarding, as distinguished from the failures early in the depression
where weakness due to mismanagement was the larger cause of failure.
Despite their closing, many of them will pay in full. Although such
withdrawals have practically ceased, yet $1,100,000,000 of currency was
previously withdrawn which has still to return to circulation. This
represents a large reduction of the ability of our banks to extend
credit which would otherwise fertilize industry and agriculture.
Furthermore, many of our bankers, in order to prepare themselves to meet
possible withdrawals, have felt compelled to call in loans, to refuse
new credits, and to realize upon securities, which in turn has
demoralized the markets. The paralysis has been further augmented by the
steady increase in recent years of the proportion of bank assets
invested in long-term securities, such as mortgages and bonds. These
securities tend to lose their liquidity in depression or temporarily to
fall in value so that the ability of the banks to meet the shock of
sudden withdrawal is greatly lessened and the restriction of all kinds
of credit is thereby increased. The continuing credit paralysis has
operated to accentuate the deflation and liquidation of commodities,
real estate, and securities below any reasonable basis of values.

All of this tends to stifle business, especially the smaller units, and
finally expresses itself in further depression of prices and values, in
restriction on new enterprise, and in increased unemployment.

The situation largely arises from an unjustified lack of confidence. We
have enormous volumes of idle money in the banks and in hoarding. We do
not require more money or working capital--we need to put what we have
to work.

The fundamental difficulties which have brought about financial strains
in foreign countries do not exist in the United States. No external
drain on our resources can threaten our position, because the balance of
international payments is in our favor; we owe less to foreign countries
than they owe to us; our industries are efficiently organized; our
currency and bank deposits are protected by the greatest gold reserve in
history.

Our first step toward recovery is to reestablish confidence and thus
restore the flow of credit which is the very basis of our economic life.
We must put some steel beams in the foundations of our credit structure.
It is our duty to apply the full strength of our Government not only to
the immediate phases, but to provide security against shocks and the
repetition of the weaknesses which have been proven.

The recommendations which I here lay before the Congress are designed to
meet these needs by strengthening financial, industrial, and
agricultural life through the medium of our existing institutions, and
thus to avoid the entry of the Government into competition with private
business.

FEDERAL GOVERNMENT FINANCE

The first requirement of confidence and of economic recovery is
financial stability of the United States Government. I shall deal with
fiscal questions at greater length in the Budget message. But I must at
this time call attention to the magnitude of the deficits which have
developed and the resulting necessity for determined and courageous
policies. These deficits arise in the main from the heavy decrease in
tax receipts due to the depression and to the increase in expenditure on
construction in aid to unemployment, aids to agriculture, and upon
services to veterans.

During the fiscal year ending June 30 last we incurred a deficit of
about $903,000,000, which included the statutory reduction of the debt
and represented an increase of the national debt by $616,000,000. Of
this, however, $153,000,000 is offset by increased cash balances.

In comparison with the fiscal year 1928 there is indicated a fall in
Federal receipts for the present fiscal year amounting to
$1,683,000,000, of which $1,034,000,000 is in individual and corporate
income taxes alone. During this fiscal year there will be an increased
expenditure, as compared to 1928, on veterans of $255,000,000, and an
increased expenditure on construction work which may reach $520,000,000.
Despite large economies in other directions, we have an indicated
deficit, including the statutory retirement of the debt, of
$2,123,000,000, and an indicated net debt increase of about
$1,711,000,000.

The Budget for the fiscal year beginning July 1 next, after allowing for
some increase of taxes under the present laws and after allowing for
drastic reduction in expenditures, still indicates a deficit of
$1,417,000,000. After offsetting the statutory debt retirements this
would indicate an increase in the national debt for the fiscal year 1933
of about $921,000,000.

Several conclusions are inevitable. We must have insistent and
determined reduction in Government expenses. We must face a temporary
increase in taxes. Such increase should not cover the whole of these
deficits or it will retard recovery. We must partially finance the
deficit by borrowing. It is my view that the amount of taxation should
be fixed so as to balance the Budget for 1933 except for the statutory
debt retirement. Such Government receipts would assure the balance of
the following year's budget including debt retirement. It is my further
view that the additional taxation should be imposed solely as an
emergency measure terminating definitely two years from July 1 next.
Such a basis will give confidence in the determination of the Government
to stabilize its finance and will assure taxpayers of its temporary
character. Even with increased taxation, the Government will reach the
utmost safe limit of its borrowing capacity by the expenditures for
which we are already obligated and the recommendations here proposed. To
go further than these limits in either expenditures, taxes, or borrowing
will destroy confidence, denude commerce and industry of its resources,
jeopardize the financial system, and actually extend unemployment and
demoralize agriculture rather than relieve it.

FEDERAL LAND BANKS

I recommend that the Congress authorize the subscription by the Treasury
of further capital to the Federal land banks to be retired as provided
in the original act, or when funds are available, and that repayments of
such capital be treated as a fund available for further subscriptions in
the same manner. It is urgent that the banks be supported so as to
stabilize the market values of their bonds and thus secure capital for
the farmers at low rates, that they may continue their services to
agriculture and that they may meet the present situation with
consideration to the farmers.

DEPOSITS IN CLOSED BANKS

A method should be devised to make available quickly to depositors some
portion of their deposits in closed banks as the assets of such banks
may warrant. Such provision would go far to relieve distress in a
multitude of families, would stabilize values in many communities, and
would liberate working capital to thousands of concerns. I recommend
that measures be enacted promptly to accomplish these results and I
suggest that the Congress should consider the development of such a plan
through the Federal Reserve Banks.

HOME-LOAN DISCOUNT BANKS

I recommend the establishment of a system of home-loan discount banks as
the necessary companion in our financial structure of the Federal
Reserve Banks and our Federal Land Banks. Such action will relieve
present distressing pressures against home and farm property owners. It
will relieve pressures upon and give added strength to building and loan
associations, savings banks, and deposit banks, engaged in extending
such credits. Such action would further decentralize our credit
structure. It would revive residential construction and employment. It
would enable such loaning institutions more effectually to promote home
ownership. I discussed this plan at some length in a statement made
public November 14, last. This plan has been warmly indorsed by the
recent National Conference upon Home Ownership and Housing, whose
members were designated by the governors of the States and the groups
interested.

RECONSTRUCTION FINANCE CORPORATION

In order that the public may be absolutely assured and that the
Government may be in position to meet any public necessity, I recommend
that an emergency Reconstruction Corporation of the nature of the former
War Finance Corporation should be established. It may not be necessary
to use such an instrumentality very extensively. The very existence of
such a bulwark will strengthen confidence. The Treasury should be
authorized to subscribe a reasonable capital to it, and it should be
given authority to issue its own debentures. It should be placed in
liquidation at the end of two years. Its purpose is that by
strengthening the weak spots to thus liberate the full strength of the
Nation's resources. It should be in position to facilitate exports by
American agencies; make advances to agricultural credit agencies where
necessary to protect and aid the agricultural industry; to make
temporary advances upon proper securities to established industries,
railways, and financial institutions which can not otherwise secure
credit, and where such advances will protect the credit structure and
stimulate employment. Its functions would not overlap those of the
National Credit Corporation.

FEDERAL RESERVE ELIGIBILITY

On October 6th I issued a statement that I should recommend to the
Congress an extension during emergencies of the eligibility provisions
in the Federal reserve act. This statement was approved by a
representative gathering of the Members of both Houses of the Congress,
including members of the appropriate committees. It was approved by the
officials of the Treasury Department, and I understand such an extension
has been approved by a majority of the governors of the Federal reserve
banks. Nothing should be done which would lower the safeguards of the
system.

The establishment of the mortgage-discount banks herein referred to will
also contribute to further reserve strength in the banks without
inflation.

BANKING LAWS

Our people have a right to a banking system in which their deposits
shall be safeguarded and the flow of credit less subject to storms. The
need of a sounder system is plainly shown by the extent of bank
failures. I recommend the prompt improvement of the banking laws.
Changed financial conditions and commercial practices must be met. The
Congress should investigate the need for separation between different
kinds of banking; an enlargement of branch banking under proper
restrictions; and the methods by which enlarged membership in the
Federal reserve system may be brought about.

POSTAL SAVINGS BANKS

The Postal Savings deposits have increased from about $200,000,000 to
about $550,000,000 during the past year. This experience has raised
important practical questions in relation to deposits and investments
which should receive the attention of the Congress.

RAILWAYS

The railways present one of our immediate and pressing problems. They
are and must remain the backbone of our transportation system. Their
prosperity is interrelated with the prosperity of all industries. Their
fundamental service in transportation, the volume of their employment,
their buying power for supplies from other industries, the enormous
investment in their securities, particularly their bonds, by insurance
companies, savings banks, benevolent and other trusts, all reflect their
partnership in the whole economic fabric. Through these institutions the
railway bonds are in a large sense the investment of every family. The
well-maintained and successful operation and the stability of railway
finances are of primary importance to economic recovery. They should
have more effective opportunity to reduce operating costs by proper
consolidation. As their rates must be regulated in public interest, so
also approximate regulation should be applied to competing services by
some authority. The methods of their regulation should be revised. The
Interstate Commerce Commission has made important and far-reaching
recommendations upon the whole subject, which I commend to the early
consideration of the Congress.

ANTITRUST LAWS

In my message of a year ago I commented on the necessity of
congressional inquiry into the economic action of the antitrust laws.
There is wide conviction that some change should be made especially in
the procedure under these laws. I do not favor their repeal. Such action
would open wide the door to price fixing, monopoly, and destruction of
healthy competition. Particular attention should be given to the
industries rounded upon natural resources, especially where destructive
competition produces great wastes of these resources and brings great
hardships upon operators, employees, and the public. In recent years
there has been continued demoralization in the bituminous coal, oil, and
lumber industries. I again commend the matter to the consideration of
the Congress.

UNEMPLOYMENT

As an aid to unemployment the Federal Government is engaged in the
greatest program of public-building, harbor, flood-control, highway,
waterway, aviation, merchant and naval ship construction in all history.
Our expenditures on these works during this calendar year will reach
about $780,000,000 compared with $260,000,000 in 1928. Through this
increased construction, through the maintenance of a full complement of
Federal employees, and through services to veterans it is estimated that
the Federal taxpayer is now directly contributing to the livelihood of
10,000,000 of our citizens.

We must avoid burdens upon the Government which will create more
unemployment in private industry than can be gained by further expansion
of employment by the Federal Government. We can now stimulate employment
and agriculture more effectually and speedily through the voluntary
measures in progress, through the thawing out of credit, through the
building up of stability abroad, through the home loan discount banks,
through an emergency finance corporation and the rehabilitation of the
railways and other such directions.

I am opposed to any direct or indirect Government dole. The breakdown
and increased unemployment in Europe is due in part to such practices.
Our people are providing against distress from unemployment in true
American fashion by a magnificent response to public appeal and by
action of the local governments.

GENERAL LEGISLATION

There are many other subjects requiring legislative action at this
session of the Congress. I may list the following among them:

VETERANS' SERVICES

The law enacted last March authorizing loans of 50 per cent upon
adjusted-service certificates has, together with the loans made under
previous laws, resulted in payments of about $1,260,000,000.
Appropriations have been exhausted. The Administrator of Veterans'
Affairs advises that a further appropriation of $200,000,000 is required
at once to meet the obligations made necessary by existing legislation.

There will be demands for further veterans' legislation; there are
inequalities in our system of veterans' relief; it is our national duty
to meet our obligations to those who have served the Nation. But our
present expenditure upon these services now exceeds $1,000,000,000 per
annum. I am opposed to any extension of these expenditures until the
country has recovered from the present situation.

ELECTRICAL-POWER REGULATION

I have recommended in previous messages the effective regulation of
interstate electrical power as the essential function of the reorganized
Federal Power Commission. I renew the recommendation. It is urgently
needed in public protection.

MUSCLE SHOALS

At my suggestion, the Governors and Legislatures of Alabama and
Tennessee selected three members each for service on a committee to
which I appointed a representative of the farm organizations and two
representatives of the War Department for the purpose of recommending a
plan for the disposal of these properties which would be in the interest
of the people of those States and the agricultural industry throughout
the country. I shall transmit the recommendations to the Congress.

REORGANIZATION OF FEDERAL DEPARTMENTS

I have referred in previous messages to the profound need of further
reorganization and consolidation of Federal administrative functions to
eliminate overlap and waste, and to enable coordination and definition
of Government policies now wholly impossible in scattered and
conflicting agencies which deal with parts of the same major function. I
shall lay before the Congress further recommendations upon this subject,
particularly in relation to the Department of the Interior. There are
two directions of such reorganization, however, which have an important
bearing upon the emergency problems with which we are confronted.

SHIPPING BOARD

At present the Shipping Board exercises large administrative functions
independent of the Executive. These administrative functions should be
transferred to the Department of Commerce, in keeping with that single
responsibility which has been the basis of our governmental structure
since its foundation. There should be created in that department a
position of Assistant Secretary for Merchant Marine, under whom this
work and the several bureaus having to do with merchant marine may be
grouped.

The Shipping Board should be made a regulatory body acting also in
advisory capacity on loans and policies, in keeping with its original
conception. Its regulatory powers should be amended to include
regulation of coastwise shipping so as to assure stability and better
service. It is also worthy of consideration that the regulation of rates
and services upon the inland waterways should be assigned to such a
reorganized board.

REORGANIZATION OF PUBLIC WORKS ADMINISTRATION

I recommend that all building and construction activities of the
Government now carried on by many departments be consolidated into an
independent establishment under the President to be known as the "Public
Works Administration" directed by a Public Works Administrator. This
agency should undertake all construction work in service to the
different departments of the Government (except naval and military
work). The services of the Corps of Army Engineers should be delegated
in rotation for military duty to this administration in continuation of
their supervision of river and harbor work. Great economies, sounder
policies, more effective coordination to employment, and expedition in
all construction work would result from this consolidation.

LAW ENFORCEMENT

I shall present some recommendations in a special message looking to the
strengthening of criminal-law enforcement and improvement in judicial
procedure connected therewith.

INLAND WATERWAY AND HARBOR IMPROVEMENT

These improvements are now proceeding upon an unprecedented scale. Some
indication of the volume of work in progress is conveyed by the fact
that during the current year over 380,000,000 cubic yards of material
have been moved--an amount equal to the entire removal in the
construction of the Panama Canal. The Mississippi waterway system,
connecting Chicago, Kansas City, Pittsburgh, and New Orleans, will be in
full operation during 1933. Substantial progress is being made upon the
projects of the upper Missouri, upper Mississippi, etc.

Negotiations are now in progress with Canada for the construction of the
St. Lawrence Waterway.

THE TARIFF

Wages and standards of living abroad have been materially lowered during
the past year. The temporary abandonment of the gold standard by certain
countries has also reduced their production costs compared to ours.
Fortunately any increases in the tariff which may be necessary to
protect agriculture and industry from these lowered foreign costs, or
decreases in items which may prove to be excessive, may be undertaken at
any time by the Tariff Commission under authority which it possesses by
virtue of the tariff act of 1930. The commission during the past year
has reviewed the rates upon over 254 items subject to tariff. As a
result of vigorous and industrious action, it is up to date in the
consideration of pending references and is prepared to give prompt
attention to any further applications. This procedure presents an
orderly method for correcting inequalities. I am opposed to any general
congressional revision of the tariff. Such action would disturb
industry, business, and agriculture. It would prolong the depression.

IMMIGRATION AND DEPORTATION

I recommend that immigration restriction now in force under
administrative action be placed upon a more definite basis by law. The
deportation laws should be strengthened. Aliens lawfully in the country
should be protected by the issuance of a certificate of residence.

PUBLIC HEALTH

I again call attention to my previous recommendations upon this subject,
particularly in its relation to children. The moral results are of the
utmost importance.

CONCLUSION

It is inevitable that in these times much of the legislation proposed to
the Congress and many of the recommendations of the Executive must be
designed to meet emergencies. In reaching solutions we must not
jeopardize those principles which we have found to be the basis of the
growth of the Nation. The Federal Government must not encroach upon nor
permit local communities to abandon that precious possession of local
initiative and responsibility. Again, just as the largest measure of
responsibility in the government of the Nation rests upon local
self-government, so does the largest measure of social responsibility in
our country rest upon the individual. If the individual surrenders his
own initiative and responsibilities, he is surrendering his own freedom
and his own liberty. It is the duty of the National Government to insist
that both the local governments and the individual shall assume and bear
these responsibilities as a fundamental of preserving the very basis of
our freedom.

Many vital changes and movements of vast proportions are taking place in
the economic world. The effect of these changes upon the future can not
be seen clearly as yet. Of this, however, we are sure: Our system, based
upon the ideals of individual initiative and of equality of opportunity,
is not an artificial thing. Rather it is the outgrowth of the experience
of America, and expresses the faith and spirit of our people. It has
carried us in a century and a half to leadership of the economic world.
If our economic system does not match our highest expectations at all
times, it does not require revolutionary action to bring it into accord
with any necessity that experience may prove. It has successfully
adjusted itself to changing conditions in the past. It will do so again.
The mobility of our institutions, the richness of our resources, and the
abilities of our people enable us to meet them unafraid. It is a
distressful time for many of our people, but they have shown qualities
as high in fortitude, courage, and resourcefulness as ever in our
history. With that spirit, I have faith that out of it will come a
sounder life, a truer standard of values, a greater recognition of the
results of honest effort, and a healthier atmosphere in which to rear
our children. Ours must be a country of such stability and security as
can not fail to carry forward and enlarge among all the people that
abundant life of material and spiritual opportunity which it has
represented among all nations since its beginning.

The White House,

December 8, 1931

***

State of the Union Address
Herbert Hoover
December 6, 1932

To the Senate and House of Representatives:

In accord with my constitutional duty, I transmit herewith to the
Congress information upon the state of the Union together with
recommendation of measures for its consideration.

Our country is at peace. Our national defense has been maintained at a
high state of effectiveness. All of the executive departments of the
Government have been conducted during the year with a high devotion to
public interest. There has been a far larger degree of freedom from
industrial conflict than hitherto known. Education and science have made
further advances. The public health is to-day at its highest known
level. While we have recently engaged in the aggressive contest of a
national election, its very tranquillity and the acceptance of its
results furnish abundant proof of the strength of our institutions.

In the face of widespread hardship our people have demonstrated daily a
magnificent sense of humanity, of individual and community
responsibility for the welfare of the less fortunate. They have grown in
their conceptions and organization for cooperative action for the common
welfare.

In the provision against distress during this winter, the great private
agencies of the country have been mobilized again; the generosity of our
people has again come into evidence to a degree in which all America may
take great pride. Likewise the local authorities and the States are
engaged everywhere in supplemental measures of relief. The provisions
made for loans from the Reconstruction Finance Corporation, to States
that have exhausted their own resources, guarantee that there should be
no hunger or suffering from cold in the country. The large majority of
States are showing a sturdy cooperation in the spirit of the Federal
aid.

The Surgeon General, in charge of the Public Health Service, furnishes
me with the following information upon the state of public health:

MORTALITY RATE PER 1,000 OF POPULATION ON AN ANNUAL BASIS FROM
REPRESENTATIVE STATES - General - Infant

First 9 months of-- - -

1928 - 11.9 - 67.8

1929 - 12.0 - 65.8

1930 - 11.4 - 62.0

1931 - 11.2 - 60.0

1932 - 10.6 - 55.0

The sickness rates from data available show the same trends. These facts
indicate the fine endeavor of the agencies which have been mobilized for
care of those in distress.

ECONOMIC SITUATION

The unparalleled world-wide economic depression has continued through
the year. Due to the European collapse, the situation developed during
last fall and winter into a series of most acute crises. The
unprecedented emergency measures enacted and policies adopted
undoubtedly saved the country from economic disaster. After serving to
defend the national security, these measures began in July to show their
weight and influence toward improvement of conditions in many parts of
the country. The following tables of current business indicators show
the general economic movement during the past eleven months.

MONTHLY BUSINESS INDICES WITH SEASONAL VARIATIONS ELIMINATED

Year and Month - Industrial Production - Factory Employment -
Freight-car loadings - Department Store sales, value - Exports, value -
Imports, value - Building Contracts, all types - Industrial Electric
power consumption

1931 - - - - - - - -

December - 74 - 69.4 - 69 - 81 - 46 - 48 - 38 - 89.1

1932 - - - - - - - -

January - 72 - 68.1 - 64 - 78 - 39 - 42 - 31 - 93.9

February - 69 - 67.8 - 62 - 78 - 45 - 41 - 27 - 98.8

March - 67 - 66.4 - 61 - 72 - 41 - 37 - 26 - 88.0

April - 63 - 64.3 - 59 - 80 - 38 - 36 - 27 - 82.2

May - 60 - 62.1 - 54 - 73 - 37 - 34 - 26 - 82.0

June - 59 - 60.0 - 52 - 71 - 34 - 36 - 27 - 78.1

July - 58 - 58.3 - 51 - 67 - 32 - 27 - 27 - 79.2

August - 60 - 58.8 - 51 - 66 - 31 - 29 - 30 - 73.5

September - 66 - 60.3 - 54 - 70 - 33 - 32 - 30 - 84.0

October - 66 - 61.1 - 57 - 70 - 33 - 32 - 29 - 84.4

The measures and policies which have procured this turn toward recovery
should be continued until the depression is passed, and then the
emergency agencies should be promptly liquidated. The expansion of
credit facilities by the Federal Reserve System and the Reconstruction
Finance Corporation has been of incalculable value. The loans of the
latter for reproductive works, and to railways for the creation of
employment; its support of the credit structure through loans to banks,
insurance companies, railways, building and loan associations, and to
agriculture has protected the savings and insurance policies of millions
of our citizens and has relieved millions of borrowers from duress; they
have enabled industry and business to function and expand. The
assistance given to Farm Loan Banks, the establishment of the Home Loan
Banks and Agricultural Credit Associations--all in their various
ramifications have placed large sums of money at the disposal of the
people in protection and aid. Beyond this, the extensive organization of
the country in voluntary action has produced profound results.

The following table indicates direct expenditures of the Federal
Government in aid to unemployment, agriculture, and financial relief
over the past four years. The sums applied to financial relief multiply
themselves many fold, being in considerable measure the initial capital
supplied to the Reconstruction Finance Corporation, Farm Loan Banks,
etc., which will be recovered to the Treasury.

- Public works (1) - Agricultural relief and financial loans

Fiscal year ending June 30 - -

1930 - $410,420,000 - $156,100,000

1931 - 574,870,000 - 196,700,000

1932 - 655,880,000 - 772,700,000

1933 - 717,260,000 - 52,000,000 -

***

State of the Union Address
Franklin D. Roosevelt
January 3, 1934

Mr. President, Mr. Speaker, Senators and Representatives in Congress:

I come before you at the opening of the Regular Session of the 73d
Congress, not to make requests for special or detailed items of
legislation; I come, rather, to counsel with you, who, like myself, have
been selected to carry out a mandate of the whole people, in order that
without partisanship you and I may cooperate to continue the restoration
of our national wellbeing and, equally important, to build on the ruins
of the past a new structure designed better to meet the present problems
of modern civilization.

Such a structure includes not only the relations of industry and
agriculture and finance to each other but also the effect which all of
these three have on our individual citizens and on the whole people as a
Nation.

Now that we are definitely in the process of recovery, lines have been
rightly drawn between those to whom this recovery means a return to old
methods--and the number of these people is small--and those for whom
recovery means a reform of many old methods, a permanent readjustment of
many of our ways of thinking and therefore of many of our social and
economic arrangements. . . . .

Civilization cannot go back; civilization must not stand still. We have
undertaken new methods. It is our task to perfect, to improve, to alter
when necessary, but in all cases to go forward. To consolidate what we
are doing, to make our economic and social structure capable of dealing
with modern life is the joint task of the legislative, the judicial, and
the executive branches of the national Government.

Without regard to party, the overwhelming majority of our people seek a
greater opportunity for humanity to prosper and find happiness. They
recognize that human welfare has not increased and does not increase
through mere materialism and luxury, but that it does progress through
integrity, unselfishness, responsibility and justice.

In the past few months, as a result of our action, we have demanded of
many citizens that they surrender certain licenses to do as they please
in their business relationships; but we have asked this in exchange for
the protection which the State can give against exploitation by their
fellow men or by combinations of their fellow men.

I congratulate this Congress upon the courage, the earnestness and the
efficiency with which you met the crisis at the Special Session. It was
your fine understanding of the national problem that furnished the
example which the country has so splendidly followed. I venture to say
that the task confronting the First Congress of 1789 was no greater than
your own.

I shall not attempt to set forth either the many phases of the crisis
which we experienced last March, or the many measures which you and I
undertook during the Special Session that we might initiate recovery and
reform.

It is sufficient that I should speak in broad terms of the results of
our common counsel. The credit of the Government has been fortified by
drastic reduction in the cost of its permanent agencies through the
Economy Act.

With the twofold purpose of strengthening the whole financial structure
and of arriving eventually at a medium of exchange which over the years
will have less variable purchasing and debt paying power for our people
than that of the past, I have used the authority granted me to purchase
all American-produced gold and silver and to buy additional gold in the
world markets. Careful investigation and constant study prove that in
the matter of foreign exchange rates certain of our sister Nations find
themselves so handicapped by internal and other conditions that they
feel unable at this time to enter into stabilization discussion based on
permanent and world-wide objectives.

The overwhelming majority of the banks, both national and State, which
reopened last spring, are in sound condition and have been brought
within the protection of Federal insurance. In the case of those banks
which were not permitted to reopen, nearly six hundred million dollars
of frozen deposits are being restored to the depositors through the
assistance of the national Government.

We have made great strides toward the objectives of the National
Industrial Recovery Act, for not only have several millions of our
unemployed been restored to work, but industry is organizing itself with
a greater understanding that reasonable profits can be earned while at
the same time protection can be assured to guarantee to labor adequate
pay and proper conditions of work. Child labor is abolished. Uniform
standards of hours and wages apply today to 95 percent of industrial
employment within the field of the National Industrial Recovery Act. We
seek the definite end of preventing combinations in furtherance of
monopoly and in restraint of trade, while at the same time we seek to
prevent ruinous rivalries within industrial groups which in many cases
resemble the gang wars of the underworld and in which the real victim in
every case is the public itself.

Under the authority of this Congress, we have brought the component
parts of each industry together around a common table, just as we have
brought problems affecting labor to a common meeting ground. Though the
machinery, hurriedly devised, may need readjustment from time to time,
nevertheless I think you will agree with me that we have created a
permanent feature of our modernized industrial structure and that it
will continue under the supervision but not the arbitrary dictation of
Government itself.

You recognized last spring that the most serious part of the debt burden
affected those who stood in danger of losing their farms and their
homes. I am glad to tell you that refinancing in both of these cases is
proceeding with good success and in all probability within the financial
limits set by the Congress.

But agriculture had suffered from more than its debts. Actual experience
with the operation of the Agricultural Adjustment Act leads to my belief
that thus far the experiment of seeking a balance between production and
consumption is succeeding and has made progress entirely in line with
reasonable expectations toward the restoration of farm prices to parity.
I continue in my conviction that industrial progress and prosperity can
only be attained by bringing the purchasing power of that portion of our
population which in one form or another is dependent upon agriculture up
to a level which will restore a proper balance between every section of
the country and between every form of work.

In this field, through carefully planned flood control, power
development and land-use policies in the Tennessee Valley and in other,
great watersheds, we are seeking the elimination of waste, the removal
of poor lands from agriculture and the encouragement of small local
industries, thus furthering this principle of a better balanced national
life. We recognize the great ultimate cost of the application of this
rounded policy to every part off the Union. Today we are creating heavy
obligations to start the work because of the great unemployment needs of
the moment. I look forward, however, to the time in the not distant
future, when annual appropriations, wholly covered by current revenue,
will enable the work to proceed under a national plan. Such a national
plan will, in a generation or two, return many times the money spent on
it; more important, it will eliminate the use of inefficient tools,
conserve and increase natural resources, prevent waste, and enable
millions of our people to take better advantage of the opportunities
which God has given our country.

I cannot, unfortunately, present to you a picture of complete optimism
regarding world affairs.

The delegation representing the United States has worked in close
cooperation with the other American Republics assembled at Montevideo to
make that conference an outstanding success. We have, I hope, made it
clear to our neighbors that we seek with them future avoidance of
territorial expansion and of interference by one Nation in the internal
affairs of another. Furthermore, all of us are seeking the restoration
of commerce in ways which will preclude the building up of large
favorable trade balances by any one Nation at the expense of trade
debits on the part of other Nations.

In other parts of the world, however, fear of immediate or future
aggression and with it the spending of vast sums on armament and the
continued building up of defensive trade barriers prevent any great
progress in peace or trade agreements. I have made it clear that the
United States cannot take part in political arrangements in Europe but
that we stand ready to cooperate at any time in practicable measures on
a world basis looking to immediate reduction of armaments and the
lowering of the barriers against commerce.

I expect to report to you later in regard to debts owed the Government
and people of this country by the Governments and peoples of other
countries. Several Nations, acknowledging the debt, have paid in small
part; other Nations have failed to pay. One Nation--Finland--has paid
the installments due this country in full.

Returning to home problems, we have been shocked by many notorious
examples of injuries done our citizens by persons or groups who have
been living off their neighbors by the use of methods either unethical
or criminal.

In the first category--a field which does not involve violations of the
letter of our laws--practices have been brought to light which have
shocked those who believed that we were in the past generation raising
the ethical standards of business. They call for stringent preventive or
regulatory measures. I am speaking of those individuals who have evaded
the spirit and purpose of our tax laws, of those high officials of banks
or corporations who have grown rich at the expense of their stockholders
or the public, of those reckless speculators with their own or other
people's money whose operations have injured the values of the farmers'
crops and the savings of the poor.

In the other category, crimes of organized banditry, coldblooded
shooting, lynching and kidnapping have threatened our security.

These violations of ethics and these violations of law call on the
strong arm of Government for their immediate suppression; they call also
on the country for an aroused public opinion.

The adoption of the Twenty-first Amendment should give material aid to
the elimination of those new forms of crime which came from the illegal
traffic in liquor.

I shall continue to regard it as my duty to use whatever means may be
necessary to supplement State, local and private agencies for the relief
of suffering caused by unemployment. With respect to this question, I
have recognized the dangers inherent in the direct giving of relief and
have sought the means to provide not mere relief, but the opportunity
for useful and remunerative work. We shall, in the process of recovery,
seek to move as rapidly as possible from direct relief to publicly
supported work and from that to the rapid restoration of private
employment.

It is to the eternal credit of the American people that this tremendous
readjustment of our national life is being accomplished peacefully,
without serious dislocation, with only a minimum of injustice and with a
great, willing spirit of cooperation throughout the country.

Disorder is not an American habit. Self-help and self-control are the
essence of the American tradition--not of necessity the form of that
tradition, but its spirit. The program itself comes from the American
people.

It is an integrated program, national in scope. Viewed in the large, it
is designed to save from destruction and to keep for the future the
genuinely important values created by modern society. The vicious and
wasteful parts of that society we could not save if we wished; they have
chosen the way of self-destruction. We would save useful mechanical
invention, machine production, industrial efficiency, modern means of
communication, broad education. We would save and encourage the slowly
growing impulse among consumers to enter the industrial market place
equipped with sufficient organization to insist upon fair prices and
honest sales.

But the unnecessary expansion of industrial plants, the waste of natural
resources, the exploitation of the consumers of natural monopolies, the
accumulation of stagnant surpluses, child labor, and the ruthless
exploitation of all labor, the encouragement of speculation with other
people's money, these were consumed in the fires that they themselves
kindled; we must make sure that as we reconstruct our life there be no
soil in which such weeds can grow again.

We have plowed the furrow and planted the good seed; the hard beginning
is over. If we would reap the full harvest, we must cultivate the soil
where this good seed is sprouting and the plant is reaching up to mature
growth.

A final personal word. I know that each of you will appreciate that. I
am speaking no mere politeness when I assure you how much I value the
fine relationship that we have shared during these months of hard and
incessant work. Out of these friendly contacts we are, fortunately,
building a strong and permanent tie between the legislative and
executive branches of the Government. The letter of the Constitution
wisely declared a separation, but the impulse of common purpose declares
a union. In this spirit we join once more in serving the American
people.

***

State of the Union Address
Franklin D. Roosevelt
January 4, 1935

Mr. President, Mr. Speaker, Members of the Senate and of the House of
Representatives:

The Constitution wisely provides that the Chief Executive shall report
to the Congress on the state of the Union, for through you, the chosen
legislative representatives, our citizens everywhere may fairly judge
the progress of our governing. I am confident that today, in the light
of the events of the past two years, you do not consider it merely a
trite phrase when I tell you that I am truly glad to greet you and that
I look forward to common counsel, to useful cooperation, and to genuine
friendships between us.

We have undertaken a new order of things; yet we progress to it under
the framework and in the spirit and intent of the American Constitution.
We have proceeded throughout the Nation a measurable distance on the
road toward this new order. Materially, I can report to you substantial
benefits to our agricultural population, increased industrial activity,
and profits to our merchants. Of equal moment, there is evident a
restoration of that spirit of confidence and faith which marks the
American character. Let him, who, for speculative profit or partisan
purpose, without just warrant would seek to disturb or dispel this
assurance, take heed before he assumes responsibility for any act which
slows our onward steps.

Throughout the world, change is the order of the day. In every Nation
economic problems, long in the making, have brought crises of many kinds
for which the masters of old practice and theory were unprepared. In
most Nations social justice, no longer a distant ideal, has become a
definite goal, and ancient Governments are beginning to heed the call.

Thus, the American people do not stand alone in the world in their
desire for change. We seek it through tested liberal traditions, through
processes which retain all of the deep essentials of that republican
form of representative government first given to a troubled world by the
United States.

As the various parts in the program begun in the Extraordinary Session
of the 73rd Congress shape themselves in practical administration, the
unity of our program reveals itself to the Nation. The outlines of the
new economic order, rising from the disintegration of the old, are
apparent. We test what we have done as our measures take root in the
living texture of life. We see where we have built wisely and where we
can do still better.

The attempt to make a distinction between recovery and reform is a
narrowly conceived effort to substitute the appearance of reality for
reality itself. When a man is convalescing from illness, wisdom dictates
not only cure of the symptoms, but also removal of their cause.

It is important to recognize that while we seek to outlaw specific
abuses, the American objective of today has an infinitely deeper, finer
and more lasting purpose than mere repression. Thinking people in almost
every country of the world have come to realize certain fundamental
difficulties with which civilization must reckon. Rapid changes--the
machine age, the advent of universal and rapid communication and many
other new factors--have brought new problems. Succeeding generations
have attempted to keep pace by reforming in piecemeal fashion this or
that attendant abuse. As a result, evils overlap and reform becomes
confused and frustrated. We lose sight, from time to time, of our
ultimate human objectives.

Let us, for a moment, strip from our simple purpose the confusion that
results from a multiplicity of detail and from millions of written and
spoken words.

We find our population suffering from old inequalities, little changed
by vast sporadic remedies. In spite of our efforts and in spite of our
talk, we have not weeded out the over privileged and we have not
effectively lifted up the underprivileged. Both of these manifestations
of injustice have retarded happiness. No wise man has any intention of
destroying what is known as the profit motive; because by the profit
motive we mean the right by work to earn a decent livelihood for
ourselves and for our families.

We have, however, a clear mandate from the people, that Americans must
forswear that conception of the acquisition of wealth which, through
excessive profits, creates undue private power over private affairs and,
to our misfortune, over public affairs as well. In building toward this
end we do not destroy ambition, nor do we seek to divide our wealth into
equal shares on stated occasions. We continue to recognize the greater
ability of some to earn more than others. But we do assert that the
ambition of the individual to obtain for him and his a proper security,
a reasonable leisure, and a decent living throughout life, is an
ambition to be preferred to the appetite for great wealth and great
power.

I recall to your attention my message to the Congress last June in which
I said: "among our objectives I place the security of the men, women and
children of the Nation first." That remains our first and continuing
task; and in a very real sense every major legislative enactment of this
Congress should be a component part of it.

In defining immediate factors which enter into our quest, I have spoken
to the Congress and the people of three great divisions:

1. The security of a livelihood through the better use of the national
resources of the land in which we live.

2. The security against the major hazards and vicissitudes of life.

3. The security of decent homes.

I am now ready to submit to the Congress a broad program designed
ultimately to establish all three of these factors of security--a
program which because of many lost years will take many future years to
fulfill.

A study of our national resources, more comprehensive than any
previously made, shows the vast amount of necessary and practicable work
which needs to be done for the development and preservation of our
natural wealth for the enjoyment and advantage of our people in
generations to come. The sound use of land and water is far more
comprehensive than the mere planting of trees, building of dams,
distributing of electricity or retirement of sub-marginal land. It
recognizes that stranded populations, either in the country or the city,
cannot have security under the conditions that now surround them.

To this end we are ready to begin to meet this problem--the intelligent
care of population throughout our Nation, in accordance with an
intelligent distribution of the means of livelihood for that population.
A definite program for putting people to work, of which I shall speak in
a moment, is a component part of this greater program of security of
livelihood through the better use of our national resources.

Closely related to the broad problem of livelihood is that of security
against the major hazards of life. Here also, a comprehensive survey of
what has been attempted or accomplished in many Nations and in many
States proves to me that the time has come for action by the national
Government. I shall send to you, in a few days, definite recommendations
based on these studies. These recommendations will cover the broad
subjects of unemployment insurance and old age insurance, of benefits
for children, form others, for the handicapped, for maternity care and
for other aspects of dependency and illness where a beginning can now be
made.

The third factor--better homes for our people--has also been the subject
of experimentation and study. Here, too, the first practical steps can
be made through the proposals which I shall suggest in relation to
giving work to the unemployed.

Whatever we plan and whatever we do should be in the light of these
three clear objectives of security. We cannot afford to lose valuable
time in haphazard public policies which cannot find a place in the broad
outlines of these major purposes. In that spirit I come to an immediate
issue made for us by hard and inescapable circumstance--the task of
putting people to work. In the spring of 1933 the issue of destitution
seemed to stand apart; today, in the light of our experience and our new
national policy, we find we can put people to work in ways which conform
to, initiate and carry forward the broad principles of that policy.

The first objectives of emergency legislation of 1933 were to relieve
destitution, to make it possible for industry to operate in a more
rational and orderly fashion, and to put behind industrial recovery the
impulse of large expenditures in Government undertakings. The purpose of
the National Industrial Recovery Act to provide work for more people
succeeded in a substantial manner within the first few months of its
life, and the Act has continued to maintain employment gains and greatly
improved working conditions in industry.

The program of public works provided for in the Recovery Act launched
the Federal Government into a task for which there was little time to
make preparation and little American experience to follow. Great
employment has been given and is being given by these works.

More than two billions of dollars have also been expended in direct
relief to the destitute. Local agencies of necessity determined the
recipients of this form of relief. With inevitable exceptions the funds
were spent by them with reasonable efficiency and as a result actual
want of food and clothing in the great majority of cases has been
overcome.

But the stark fact before us is that great numbers still remain
unemployed.

A large proportion of these unemployed and their dependents have been
forced on the relief rolls. The burden on the Federal Government has
grown with great rapidity. We have here a human as well as an economic
problem. When humane considerations are concerned, Americans give them
precedence. The lessons of history, confirmed by the evidence
immediately before me, show conclusively that continued dependence upon
relief induces a spiritual and moral disintegration fundamentally
destructive to the national fibre. To dole out relief in this way is to
administer a narcotic, a subtle destroyer of the human spirit. It is
inimical to the dictates of sound policy. It is in violation of the
traditions of America. Work must be found for able-bodied but destitute
workers.

The Federal Government must and shall quit this business of relief.

I am not willing that the vitality of our people be further sapped by
the giving of cash, of market baskets, of a few hours of weekly work
cutting grass, raking leaves or picking up .papers in the public parks.
We must preserve not only the bodies of the unemployed from destitution
but also their self-respect, their self-reliance and courage and
determination. This decision brings me to the problem of what the
Government should do with approximately five million unemployed now on
the relief rolls.

About one million and a half of these belong to the group which in the
past was dependent upon local welfare efforts. Most of them are unable
for one reason or another to maintain themselves independently--for the
most part, through no fault of their own. Such people, in the days
before the great depression, were cared for by local efforts--by States,
by counties, by towns, by cities, by churches and by private welfare
agencies. It is my thought that in the future they must be cared for as
they were before. I stand ready through my own personal efforts, and
through the public influence of the office that I hold, to help these
local agencies to get the means necessary to assume this burden.

The security legislation which I shall propose to the Congress will, I
am confident, be of assistance to local effort in the care of this type
of cases. Local responsibility can and will be resumed, for, after all,
common sense tells us that the wealth necessary for this task existed
and still exists in the local community, and the dictates of sound
administration require that this responsibility be in the first instance
a local one. There are, however, an additional three and one half
million employable people who are on relief. With them the problem is
different and the responsibility is different. This group was the victim
of a nation-wide depression caused by conditions which were not local
but national. The Federal Government is the only governmental agency
with sufficient power and credit to meet this situation. We have assumed
this task and we shall not shrink from it in the future. It is a duty
dictated by every intelligent consideration of national policy to ask
you to make it possible for the United States to give employment to all
of these three and one half million employable people now on relief,
pending their absorption in a rising tide of private employment.

It is my thought that with the exception of certain of the normal public
building operations of the Government, all emergency public works shall
be united in a single new and greatly enlarged plan.

With the establishment of this new system we can supersede the Federal
Emergency Relief Administration with a coordinated authority which will
be charged with the orderly liquidation of our present relief activities
and the substitution of a national chart for the giving of work.

This new program of emergency public employment should be governed by a
number of practical principles.

(1) All work undertaken should be useful--not just for a day, or a year,
but useful in the sense that it affords permanent improvement in living
conditions or that it creates future new wealth for the Nation.

(2) Compensation on emergency public projects should be in the form of
security payments which should be larger than the amount now received as
a relief dole, but at the same time not so large as to encourage the
rejection of opportunities for private employment or the leaving of
private employment to engage in Government work.

(3) Projects should be undertaken on which a large percentage of direct
labor can be used.

(4) Preference should be given to those projects which will be
self-liquidating in the sense that there is a reasonable expectation
that the Government will get its money back at some future time.

(5) The projects undertaken should be selected and planned so as to
compete as little as possible with private enterprises. This suggests
that if it were not for the necessity of giving useful work to the
unemployed now on relief, these projects in most instances would not now
be undertaken.

(6) The planning of projects would seek to assure work during the coming
fiscal year to the individuals now on relief, or until such time as
private employment is available. In order to make adjustment to
increasing private employment, work should be planned with a view to
tapering it off in proportion to the speed with which the emergency
workers are offered positions with private employers.

(7) Effort should be made to locate projects where they will serve the
greatest unemployment needs as shown by present relief rolls, and the
broad program of the National Resources Board should be freely used for
guidance in selection. Our ultimate objective being the enrichment of
human lives, the Government has the primary duty to use its emergency
expenditures as much as possible to serve those who cannot secure the
advantages of private capital.

Ever since the adjournment of the 73d Congress, the Administration has
been studying from every angle the possibility and the practicability of
new forms of employment. As a result of these studies I have arrived at
certain very definite convictions as to the amount of money that will be
necessary for the sort of public projects that I have described. I shall
submit these figures in my budget message. I assure you now they will be
within the sound credit of the Government.

The work itself will cover a wide field including clearance of slums,
which for adequate reasons cannot be undertaken by private capital; in
rural housing of several kinds, where, again, private capital is unable
to function; in rural electrification; in the reforestation of the great
watersheds of the Nation; in an intensified program to prevent soil
erosion and to reclaim blighted areas; in improving existing road
systems and in constructing national highways designed to handle modern
traffic; in the elimination of grade crossings; in the extension and
enlargement of the successful work of the Civilian Conservation Corps;
in non-Federal works, mostly self-liquidating and highly useful to local
divisions of Government; and on many other projects which the Nation
needs and cannot afford to neglect.

This is the method which I propose to you in order that we may better
meet this present-day problem of unemployment. Its greatest advantage is
that it fits logically and usefully into the long-range permanent policy
of providing the three types of security which constitute as a whole an
American plan for the betterment of the future of the American people.

I shall consult with you from time to time concerning other measures of
national importance. Among the subjects that lie immediately before us
are the consolidation of Federal regulatory administration over all
forms of transportation, the renewal and clarification of the general
purposes of the National Industrial Recovery Act, the strengthening of
our facilities for the prevention, detection and treatment of crime and
criminals, the restoration of sound conditions in the public utilities
field through abolition of the evil features of holding companies, the
gradual tapering off of the emergency credit activities of Government,
and improvement in our taxation forms and methods.

We have already begun to feel the bracing effect upon our economic
system of a restored agriculture. The hundreds of millions of additional
income that farmers are receiving are finding their way into the
channels of trade. The farmers' share of the national income is slowly
rising. The economic facts justify the widespread opinion of those
engaged in agriculture that our provisions for maintaining a balanced
production give at this time the most adequate remedy for an old and
vexing problem. For the present, and especially in view of abnormal
world conditions, agricultural adjustment with certain necessary
improvements in methods should continue.

It seems appropriate to call attention at this time to the fine spirit
shown during the past year by our public servants. I cannot praise too
highly the cheerful work of the Civil Service employees, and of those
temporarily working for the Government. As for those thousands in our
various public agencies spread throughout the country who, without
compensation, agreed to take over heavy responsibilities in connection
with our various loan agencies and particularly in direct relief work, I
cannot say too much. I do not think any country could show a higher
average of cheerful and even enthusiastic team-work than has been shown
by these men and women.

I cannot with candor tell you that general international relationships
outside the borders of the United States are improved. On the surface of
things many old jealousies are resurrected, old passions aroused; new
strivings for armament and power, in more than one land, rear their ugly
heads. I hope that calm counsel and constructive leadership will provide
the steadying influence and the time necessary for the coming of new and
more practical forms of representative government throughout the world
wherein privilege and power will occupy a lesser place and world welfare
a greater.

I believe, however, that our own peaceful and neighborly attitude toward
other Nations is coming to be understood and appreciated. The
maintenance of international peace is a matter in which we are deeply
and unselfishly concerned. Evidence of our persistent and undeniable
desire to prevent armed conflict has recently been more than once
afforded.

There is no ground for apprehension that our relations with any Nation
will be otherwise than peaceful. Nor is there ground for doubt that the
people of most Nations seek relief from the threat and burden attaching
to the false theory that extravagant armament cannot be reduced and
limited by international accord.

The ledger of the past year shows many more gains than losses. Let us
not forget that, in addition to saving millions from utter destitution,
child labor has been for the moment outlawed, thousands of homes saved
to their owners and most important of all, the morale of the Nation has
been restored. Viewing the year 1934 as a whole, you and I can agree
that we have a generous measure of reasons for giving thanks.

It is not empty optimism that moves me to a strong hope in the coming
year. We can, if we will, make 1935 a genuine period of good feeling,
sustained by a sense of purposeful progress. Beyond the material
recovery, I sense a spiritual recovery as well. The people of America
are turning as never before to those permanent values that are not
limited to the physical objectives of life. There are growing signs of
this on every hand. In the face of these spiritual impulses we are
sensible of the Divine Providence to which Nations turn now, as always,
for guidance and fostering care.

***

State of the Union Address
Franklin D. Roosevelt
January 3, 1936

Mr. President, Mr. Speaker, Members of the Senate and of the House of
Representatives:

We are about to enter upon another year of the responsibility which the
electorate of the United States has placed in our hands. Having come so
far, it is fitting that we should pause to survey the ground which we
have covered and the path which lies ahead.

On the fourth day of March, 1933, on the occasion of taking the oath of
office as President of the United States, I addressed the people of our
country. Need I recall either the scene or the national circumstances
attending the occasion? The crisis of that moment was almost exclusively
a national one. In recognition of that fact, so obvious to the millions
in the streets and in the homes of America, I devoted by far the greater
part of that address to what I called, and the Nation called, critical
days within our own borders.

You will remember that on that fourth of March, 1933, the world picture
was an image of substantial peace. International consultation and
widespread hope for the bettering of relations between the Nations gave
to all of us a reasonable expectation that the barriers to mutual
confidence, to increased trade, and to the peaceful settlement of
disputes could be progressively removed. In fact, my only reference to
the field of world policy in that address was in these words: "I would
dedicate this Nation to the policy of the good neighbor--the neighbor
who resolutely respects himself and, because he does so, respects the
rights of others--a neighbor who respects his obligations and respects
the sanctity of his agreements in and with a world of neighbors."

In the years that have followed, that sentiment has remained the
dedication of this Nation. Among the Nations of the great Western
Hemisphere the policy of the good neighbor has happily prevailed. At no
time in the four and a half centuries of modern civilization in the
Americas has there existed--in any year, in any decade, in any
generation in all that time--a greater spirit of mutual understanding,
of common helpfulness, and of devotion to the ideals of serf-government
than exists today in the twenty-one American Republics and their
neighbor, the Dominion of Canada. This policy of the good neighbor among
the Americas is no longer a hope, no longer an objective remaining to be
accomplished. It is a fact, active, present, pertinent and effective. In
this achievement, every American Nation takes an understanding part.
There is neither war, nor rumor of war, nor desire for war. The
inhabitants of this vast area, two hundred and fifty million strong,
spreading more than eight thousand miles from the Arctic to the
Antarctic, believe in, and propose to follow, the policy of the good
neighbor. They wish with all their heart that the rest of the world
might do likewise.

The rest of the world--Ah! there is the rub.

Were I today to deliver an Inaugural Address to the people of the United
States, I could not limit my comments on world affairs to one paragraph.
With much regret I should be compelled to devote the greater part to
world affairs. Since the summer of that same year of 1933, the temper
and the purposes of the rulers of many of the great populations in
Europe and in Asia have not pointed the way either to peace or to
good-will among men. Not only have peace and good-will among men grown
more remote in those areas of the earth during this period, but a point
has been reached where the people of the Americas must take cognizance
of growing ill-will, of marked trends toward aggression, of increasing
armaments, of shortening tempers--a situation which has in it many of
the elements that lead to the tragedy of general war.

On those other continents many Nations, principally the smaller peoples,
if left to themselves, would be content with their boundaries and
willing to solve within themselves and in cooperation with their
neighbors their individual problems, both economic and social. The
rulers of those Nations, deep in their hearts, follow these peaceful and
reasonable aspirations of their peoples. These rulers must remain ever
vigilant against the possibility today or tomorrow of invasion or attack
by the rulers of other peoples who fail to subscribe to the principles
of bettering the human race by peaceful means.

Within those other Nations--those which today must bear the primary,
definite responsibility for jeopardizing world peace--what hope lies? To
say the least, there are grounds for pessimism. It is idle for us or for
others to preach that the masses of the people who constitute those
Nations which are dominated by the twin spirits of autocracy and
aggression, are out of sympathy with their rulers, that they are allowed
no opportunity to express themselves, that they would change things if
they could.

That, unfortunately, is not so clear. It might be true that the masses
of the people in those Nations would change the policies of their
Governments if they could be allowed full freedom and full access to the
processes of democratic government as we understand them. But they do
not have that access; lacking it they follow blindly and fervently the
lead of those who seek autocratic power.

Nations seeking expansion, seeking the rectification of injustices
springing from former wars, or seeking outlets for trade, for population
or even for their own peaceful contributions to the progress of
civilization, fail to demonstrate that patience necessary to attain
reasonable and legitimate objectives by peaceful negotiation or by an
appeal to the finer instincts of world justice.

They have therefore impatiently reverted to the old belief in the law of
the sword, or to the fantastic conception that they, and they alone, are
chosen to fulfill a mission and that all the others among the billion
and a half of human beings in the world must and shall learn from and be
subject to them.

I recognize and you will recognize that these words which I have chosen
with deliberation will not prove popular in any Nation that chooses to
fit this shoe to its foot. Such sentiments, however, will find sympathy
and understanding in those Nations where the people themselves are
honestly desirous of peace but must constantly align themselves on one
side or the other in the kaleidoscopic jockeying for position which is
characteristic of European and Asiatic relations today. For the
peace-loving Nations, and there are many of them, find that their very
identity depends on their moving and moving again on the chess board of
international politics.

I suggested in the spring of 1933 that 85 or 90 percent of all the
people in the world were content with the territorial limits of their
respective Nations and were willing further to reduce their armed forces
if every other Nation in the world would agree to do likewise.

That is equally true today, and it is even more true today that world
peace and world good-will are blocked by only 10 or 15 percent of the
world's population. That is why efforts to reduce armies have thus far
not only failed, but have been met by vastly increased armaments on land
and in the air. That is why even efforts to continue the existing limits
on naval armaments into the years to come show such little current
success.

But the policy of the United States has been clear and consistent. We
have sought with earnestness in every possible way to limit world
armaments and to attain the peaceful solution of disputes among all
Nations.

We have sought by every legitimate means to exert our moral influence
against repression, against intolerance, against autocracy and in favor
of freedom of expression, equality before the law, religious tolerance
and popular rule.

In the field of commerce we have undertaken to encourage a more
reasonable interchange of the world's goods. In the field of
international finance we have, so far as we are concerned, put an end to
dollar diplomacy, to money grabbing, to speculation for the benefit of
the powerful and the rich, at the expense of the small and the poor.

As a consistent part of a clear policy, the United States is following a
twofold neutrality toward any and all Nations which engage in wars that
are not of immediate concern to the Americas. First, we decline to
encourage the prosecution of war by permitting belligerents to obtain
arms, ammunition or implements of war from the United States. Second, we
seek to discourage the use by belligerent Nations of any and all
American products calculated to facilitate the prosecution of a war in
quantities over and above our normal exports of them in time of peace.

I trust that these objectives thus clearly and unequivocally stated will
be carried forward by cooperation between this Congress and the
President.

I realize that I have emphasized to you the gravity of the situation
which confronts the people of the world. This emphasis is justified
because of its importance to civilization and therefore to the United
States. Peace is jeopardized by the few and not by the many. Peace is
threatened by those who seek selfish power. The world has witnessed
similar eras--as in the days when petty kings and feudal barons were
changing the map of Europe every fortnight, or when great emperors and
great kings were engaged in a mad scramble for colonial empire. We hope
that we are not again at the threshold of such an era. But if face it we
must, then the United States and the rest of the Americas can play but
one role: through a well-ordered neutrality to do naught to encourage
the contest, through adequate defense to save ourselves from embroilment
and attack, and through example and all legitimate encouragement and
assistance to persuade other Nations to return to the ways of peace and
good-will.

The evidence before us clearly proves that autocracy in world affairs
endangers peace and that such threats do not spring from those Nations
devoted to the democratic ideal. If this be true in world affairs, it
should have the greatest weight in the determination of domestic
policies.

Within democratic Nations the chief concern of the people is to prevent
the continuance or the rise of autocratic institutions that beget
slavery at home and aggression abroad. Within our borders, as in the
world at large, popular opinion is at war with a power-seeking minority.

That is no new thing. It was fought out in the Constitutional Convention
of 1787. From time to time since then, the battle has been continued,
under Thomas Jefferson, Andrew Jackson, Theodore Roosevelt and Woodrow
Wilson.

In these latter years we have witnessed the domination of government by
financial and industrial groups, numerically small but politically
dominant in the twelve years that succeeded the World War. The present
group of which I speak is indeed numerically small and, while it
exercises a large influence and has much to say in the world of
business, it does not, I am confident, speak the true sentiments of the
less articulate but more important elements that constitute real
American business.

In March, 1933, I appealed to the Congress of the United States and to
the people of the United States in a new effort to restore power to
those to whom it rightfully belonged. The response to that appeal
resulted in the writing of a new chapter in the history of popular
government. You, the members of the Legislative branch, and I, the
Executive, contended for and established a new relationship between
Government and people.

What were the terms of that new relationship? They were an appeal from
the clamor of many private and selfish interests, yes, an appeal from
the clamor of partisan interest, to the ideal of the public interest.
Government became the representative and the trustee of the public
interest. Our aim was to build upon essentially democratic institutions,
seeking all the while the adjustment of burdens, the help of the needy,
the protection of the weak, the liberation of the exploited and the
genuine protection of the people's property.

It goes without saying that to create such an economic constitutional
order, more than a single legislative enactment was called for. We, you
in the Congress and I as the Executive, had to build upon a broad base.
Now, after thirty-four months of work, we contemplate a fairly rounded
whole. We have returned the control of the Federal Government to the
City of Washington.

To be sure, in so doing, we have invited battle. We have earned the
hatred of entrenched greed. The very nature of the problem that we faced
made it necessary to drive some people from power and strictly to
regulate others. I made that plain when I took the oath of office in
March, 1933. I spoke of the practices of the unscrupulous money-changers
who stood indicted in the court of public opinion. I spoke of the rulers
of the exchanges of mankind's goods, who failed through their own
stubbornness and their own incompetence. I said that they had admitted
their failure and had abdicated.

Abdicated? Yes, in 1933, but now with the passing of danger they forget
their damaging admissions and withdraw their abdication.

They seek the restoration of their selfish power. They offer to lead us
back round the same old corner into the same old dreary street.

Yes, there are still determined groups that are intent upon that very
thing. Rigorously held up to popular examination, their true character
presents itself. They steal the livery of great national constitutional
ideals to serve discredited special interests. As guardians and trustees
for great groups of individual stockholders they wrongfully seek to
carry the property and the interests entrusted to them into the arena of
partisan politics. They seek--this minority in business and industry--to
control and often do control and use for their own purposes legitimate
and highly honored business associations; they engage in vast propaganda
to spread fear and discord among the people--they would "gang up"
against the people's liberties.

The principle that they would instill into government if they succeed in
seizing power is well shown by the principles which many of them have
instilled into their own affairs: autocracy toward labor, toward
stockholders, toward consumers, toward public sentiment. Autocrats in
smaller things, they seek autocracy in bigger things. "By their fruits
ye shall know them."

If these gentlemen believe, as they say they believe, that the measures
adopted by this Congress and its predecessor, and carried out by this
Administration, have hindered rather than promoted recovery, let them be
consistent. Let them propose to this Congress the complete repeal of
these measures. The way is open to such a proposal.

Let action be positive and not negative. The way is open in the Congress
of the United States for an expression of opinion by yeas and nays.
Shall we say that values are restored and that the Congress will,
therefore, repeal the laws under which we have been bringing them back?
Shall we say that because national income has grown with rising
prosperity, we shall repeal existing taxes and thereby put off the day
of approaching a balanced budget and of starting to reduce the national
debt? Shall we abandon the reasonable support and regulation of banking?
Shall we restore the dollar to its former gold content?

Shall we say to the farmer, "The prices for your products are in part
restored. Now go and hoe your own row?"

Shall we say to the home owners, "We have reduced your rates of
interest. We have no further concern with how you keep your home or what
you pay for your money. That is your affair?"

Shall we say to the several millions of unemployed citizens who face the
very problem of existence, of getting enough to eat, "We will withdraw
from giving you work. We will turn you back to the charity of your
communities and those men of selfish power who tell you that perhaps
they will employ you if the Government leaves them strictly alone?"

Shall we say to the needy unemployed, "Your problem is a local one
except that perhaps the Federal Government, as an act of mere
generosity, will be willing to pay to your city or to your county a few
grudging dollars to help maintain your soup kitchens?"

Shall we say to the children who have worked all day in the factories,
"Child labor is a local issue and so are your starvation wages;
something to be solved or left unsolved by the jurisdiction of
forty-eight States?"

Shall we say to the laborer, "Your right to organize, your relations
with your employer have nothing to do with the public interest; if your
employer will not even meet with you to discuss your problems and his,
that is none of our affair?"

Shall we say to the unemployed and the aged, "Social security lies not
within the province of the Federal Government; you must seek relief
elsewhere?"

Shall we say to the men and women who live in conditions of squalor in
country and in city, "The health and the happiness of you and your
children are no concern of ours?"

Shall we expose our population once more by the repeal of laws which
protect them against the loss of their honest investments and against
the manipulations of dishonest speculators? Shall we abandon the
splendid efforts of the Federal Government to raise the health standards
of the Nation and to give youth a decent opportunity through such means
as the Civilian Conservation Corps?

Members of the Congress, let these challenges be met. If this is what
these gentlemen want, let them say so to the Congress of the United
States. Let them no longer hide their dissent in a cowardly cloak of
generality. Let them define the issue. We have been specific in our
affirmative action. Let them be specific in their negative attack.

But the challenge faced by this Congress is more menacing than merely a
return to the past--bad as that would be. Our resplendent economic
autocracy does not want to return to that individualism of which they
prate, even though the advantages under that system went to the ruthless
and the strong. They realize that in thirty-four months we have built up
new instruments of public power. In the hands of a people's Government
this power is wholesome and proper. But in the hands of political
puppets of an economic autocracy such power would provide shackles for
the liberties of the people. Give them their way and they will take the
course of every autocracy of the past--power for themselves, enslavement
for the public.

Their weapon is the weapon of fear. I have said, "The only thing we have
to fear is fear itself." That is as true today as it was in 1933. But
such fear as they instill today is not a natural fear, a normal fear; it
is a synthetic, manufactured, poisonous fear that is being spread
subtly, expensively and cleverly by the same people who cried in those
other days, "Save us, save us, lest we perish."

I am confident that the Congress of the United States well understands
the facts and is ready to wage unceasing warfare against those who seek
a continuation of that spirit of fear. The carrying out of the laws of
the land as enacted by the Congress requires protection until final
adjudication by the highest tribunal of the land. The Congress has the
right and can find the means to protect its own prerogatives.

We are justified in our present confidence. Restoration of national
income, which shows continuing gains for the third successive year,
supports the normal and logical policies under which agriculture and
industry are returning to full activity. Under these policies we
approach a balance of the national budget. National income increases;
tax receipts, based on that income, increase without the levying of new
taxes. That is why I am able to say to this, the Second Session of the
74th Congress, that it is my belief based on existing laws that no new
taxes, over and above the present taxes, are either advisable or
necessary.

National income increases; employment increases. Therefore, we can look
forward to a reduction in the number of those citizens who are in need.
Therefore, also, we can anticipate a reduction in our appropriations for
relief.

In the light of our substantial material progress, in the light of the
increasing effectiveness of the restoration of popular rule, I recommend
to the Congress that we advance; that we do not retreat. I have
confidence that you will not fail the people of the Nation whose mandate
you have already so faithfully fulfilled.

I repeat, with the same faith and the same determination, my words of
March 4, 1933: "We face the arduous days that lie before us in the warm
courage of national unity; with a clear consciousness of seeking old and
precious moral values; with a clean satisfaction that comes from the
stern performance of duty by old and young alike. We aim at the
assurance of a rounded and permanent national life. We do not distrust
the future of essential democracy."

I cannot better end this message on the state of the Union than by
repeating the words of a wise philosopher at whose feet I sat many, many
years ago.

"What great crises teach all men whom the example and counsel of the
brave inspire is the lesson: Fear not, view all the tasks of life as
sacred, have faith in the triumph of the ideal, give daily all that you
have to give, be loyal and rejoice whenever you find yourselves part of
a great ideal enterprise. You, at this moment, have the honor to belong
to a generation whose lips are touched by fire. You live in a land that
now enjoys the blessings of peace. But let nothing human be wholly alien
to you. The human race now passes through one of its great crises. New
ideas, new issues--a new call for men to carry on the work of
righteousness, of charity, of courage, of patience, and of loyalty. . .
. However memory bring back this moment to your minds, let it be able to
say to you: That was a great moment. It was the beginning of a new era.
. . . This world in its crisis called for volunteers, for men of faith
in life, of patience in service, of charity and of insight. I responded
to the call however I could. I volunteered to give myself to my
Master--the cause of humane and brave living. I studied, I loved, I
labored, unsparingly and hopefully, to be worthy of my generation."

***

State of the Union Address
Franklin D. Roosevelt
January 6, 1937

Mr. President, Mr. Speaker, Members of the Congress of the United
States:

For the first time in our national history a President delivers his
Annual Message to a new Congress within a fortnight of the expiration of
his term of office. While there is no change in the Presidency this
year, change will occur in future years. It is my belief that under this
new constitutional practice, the President should in every fourth year,
in so far as seems reasonable, review the existing state of our national
affairs and outline broad future problems, leaving specific
recommendations for future legislation to be made by the President about
to be inaugurated.

At this time, however, circumstances of the moment compel me to ask your
immediate consideration of: First, measures extending the life of
certain authorizations and powers which, under present statutes, expire
within a few weeks; second, an addition to the existing Neutrality Act
to cover specific points raised by the unfortunate civil strife in
Spain; and, third, a deficiency appropriation bill for which I shall
submit estimates this week.

In March, 1933, the problems which faced our Nation and which only our
national Government had the resources to meet were more serious even
than appeared on the surface.

It was not only that the visible mechanism of economic life had broken
down. More disturbing was the fact that long neglect of the needs of the
underprivileged had brought too many of our people to the verge of doubt
as to the successful adaptation of our historic traditions to the
complex modern world. In that lay a challenge to our democratic form of
Government itself.

Ours was the task to prove that democracy could be made to function in
the world of today as effectively as in the simpler world of a hundred
years ago. Ours was the task to do more than to argue a theory. The
times required the confident answer of performance to those whose
instinctive faith in humanity made them want to believe that in the long
run democracy would prove superior to more extreme forms of Government
as a process of getting action when action was wisdom, without the
spiritual sacrifices which those other forms of Government exact.

That challenge we met. To meet it required unprecedented activities
under Federal leadership to end abuses, to restore a large measure of
material prosperity, to give new faith to millions of our citizens who
had been traditionally taught to expect that democracy would provide
continuously wider opportunity and continuously greater security in a
world where science was continuously making material riches more
available to man.

In the many methods of attack with which we met these problems, you and
I, by mutual understanding and by determination to cooperate, helped to
make democracy succeed by refusing to permit unnecessary disagreement to
arise between two of our branches of Government. That spirit of
cooperation was able to solve difficulties of extraordinary magnitude
and ramification with few important errors, and at a cost cheap when
measured by the immediate necessities and the eventual results.

I look forward to a continuance of that cooperation in the next four
years. I look forward also to a continuance of the basis of that
cooperation-- mutual respect for each other's proper sphere of
functioning in a democracy which is working well, and a common-sense
realization of the need for play in the joints of the machine.

On that basis, it is within the right of the Congress to determine which
of the many new activities shall be continued or abandoned, increased or
curtailed.

On that same basis, the President alone has the responsibility for their
administration. I find that this task of Executive management has
reached the point where our administrative machinery needs comprehensive
overhauling. I shall, therefore, shortly address the Congress more fully
in regard to modernizing and improving the Executive branch of the
Government.

That cooperation of the past four years between the Congress and the
President has aimed at the fulfillment of a twofold policy: first,
economic recovery through many kinds of assistance to agriculture,
industry and banking; and, second, deliberate improvement in the
personal security and opportunity of the great mass of our people.

The recovery we sought was not to be merely temporary. It was to be a
recovery protected from the causes of previous disasters. With that aim
in view--to prevent a future similar crisis--you and I joined in a
series of enactments--safe banking and sound currency, the guarantee of
bank deposits, protection for the investor in securities, the removal of
the threat of agricultural surpluses, insistence on collective
bargaining, the outlawing of sweat shops, child labor and unfair trade
practices, and the beginnings of security for the aged and the worker.

Nor was the recovery we sought merely a purposeless whirring of
machinery. It is important, of course, that every man and woman in the
country be able to find work, that every factory run, that business and
farming as a whole earn profits. But Government in a democratic Nation
does not exist solely, or even primarily, for that purpose.

It is not enough that the wheels turn. They must carry us in the
direction of a greater satisfaction in life for the average man. The
deeper purpose of democratic government is to assist as many of its
citizens as possible, especially those who need it most, to improve
their conditions of life, to retain all personal liberty which does not
adversely affect their neighbors, and to pursue the happiness which
comes with security and an opportunity for recreation and culture.

Even with our present recovery we are far from the goal of that deeper
purpose. There are far-reaching problems still with us for which
democracy must find solutions if it is to consider itself successful.

For example, many millions of Americans still live in habitations which
not only fail to provide the physical benefits of modern civilization
but breed disease and impair the health of future generations. The
menace exists not only in the slum areas of the very large cities, but
in many smaller cities as well. It exists on tens of thousands of farms,
in varying degrees, in every part of the country.

Another example is the prevalence of an un-American type of tenant
farming. I do not suggest that every farm family has the capacity to
earn a satisfactory living on its own farm. But many thousands of tenant
farmers, indeed most of them, with some financial assistance and with
some advice and training, can be made self-supporting on land which can
eventually belong to them. The Nation would be wise to offer them that
chance instead of permitting them to go along as they do now, year after
year, with neither future security as tenants nor hope of ownership of
their homes nor expectation of bettering the lot of their children.

Another national problem is the intelligent development of our social
security system, the broadening of the services it renders, and
practical improvement in its operation. In many Nations where such laws
are in effect, success in meeting the expectations of the community has
come through frequent amendment of the original statute.

And, of course, the most far-reaching and the most inclusive problem of
all is that of unemployment and the lack of economic balance of which
unemployment is at once the result and the symptom. The immediate
question of adequate relief for the needy unemployed who are capable of
performing useful work, I shall discuss with the Congress during the
coming months. The broader task of preventing unemployment is a matter
of long-range evolutionary policy. To that we must continue to give our
best thought and effort. We cannot assume that immediate industrial and
commercial activity which mitigates present pressures justifies the
national Government at this time in placing the unemployment problem in
a filing cabinet of finished business.

Fluctuations in employment are tied to all other wasteful fluctuations
in our mechanism of production and distribution. One of these wastes is
speculation. In securities or commodities, the larger the volume of
speculation, the wider become the upward and downward swings and the
more certain the result that in the long run there will be more losses
than gains in the underlying wealth of the community.

And, as is now well known to all of us, the same net loss to society
comes from reckless overproduction and monopolistic underproduction of
natural and manufactured commodities.

Overproduction, underproduction and speculation are three evil sisters
who distill the troubles of unsound inflation and disastrous deflation.
It is to the interest of the Nation to have Government help private
enterprise to gain sound general price levels and to protect those
levels from wide perilous fluctuations. We know now that if early in
1931 Government had taken the steps which were taken two and three years
later, the depression would never have reached the depths of the
beginning of 1933.

Sober second thought confirms most of us in the belief that the broad
objectives of the National Recovery Act were sound. We know now that its
difficulties arose from the fact that it tried to do too much. For
example, it was unwise to expect the same agency to regulate the length
of working hours, minimum wages, child labor and collective bargaining
on the one hand and the complicated questions of unfair trade practices
and business controls on the other.

The statute of N.R.A. has been outlawed. The problems have not. They are
still with us.

That decent conditions and adequate pay for labor, and just return for
agriculture, can be secured through parallel and simultaneous action by
forty-eight States is a proven impossibility. It is equally impossible
to obtain curbs on monopoly, unfair trade practices and speculation by
State action alone. There are those who, sincerely or insincerely, still
cling to State action as a theoretical hope. But experience with
actualities makes it clear that Federal laws supplementing State laws
are needed to help solve the problems which result from modern invention
applied in an industrialized Nation which conducts its business with
scant regard to State lines.

During the past year there has been a growing belief that there is
little fault to be found with the Constitution of the United States as
it stands today. The vital need is not an alteration of our fundamental
law, but an increasingly enlightened view with reference to it.
Difficulties have grown out of its interpretation; but rightly
considered, it can be used as an instrument of progress, and not as a
device for prevention of action.

It is worth our while to read and reread the preamble of the
Constitution, and Article I thereof which confers the legislative powers
upon the Congress of the United States. It is also worth our while to
read again the debates in the Constitutional Convention of one hundred
and fifty years ago. From such reading, I obtain the very definite
thought that the members of that Convention were fully aware that
civilization would raise problems for the proposed new Federal
Government, which they themselves could not even surmise; and that it
was their definite intent and expectation that a liberal interpretation
in the years to come would give to the Congress the same relative powers
over new national problems as they themselves gave to the Congress over
the national problems of their day.

In presenting to the Convention the first basic draft of the
Constitution, Edmund Randolph explained that it was the purpose "to
insert essential principles only, lest the operation of government
should be clogged by rendering those provisions permanent and
unalterable which ought to be accommodated to times and events."

With a better understanding of our purposes, and a more intelligent
recognition of our needs as a Nation, it is not to be assumed that there
will be prolonged failure to bring legislative and judicial action into
closer harmony. Means must be found to adapt our legal forms and our
judicial interpretation to the actual present national needs of the
largest progressive democracy in the modern world.

That thought leads to a consideration of world problems. To go no
further back than the beginning of this century, men and women
everywhere were seeking conditions of life very different from those
which were customary before modern invention and modern industry and
modern communications had come into being. The World war, for all of its
tragedy, encouraged these demands, and stimulated action to fulfill
these new desires.

Many national Governments seemed unable adequately to respond; and,
often with the improvident assent of the masses of the people
themselves, new forms of government were set up with oligarchy taking
the place of democracy. In oligarchies, militarism has leapt forward,
while in those Nations which have retained democracy, militarism has
waned.

I have recently visited three of our sister Republics in South America.
The very cordial receptions with which I was greeted were in tribute to
democracy. To me the outstanding observation of that visit was that the
masses of the peoples of all the Americas are convinced that the
democratic form of government can be made to succeed and do not wish to
substitute for it any other form of government. They believe that
democracies are best able to cope with the changing problems of modern
civilization within themselves, and that democracies are best able to
maintain peace among themselves.

The Inter-American Conference, operating on these fundamental principles
of democracy, did much to assure peace in this Hemisphere. Existing
peace machinery was improved. New instruments to maintain peace and
eliminate causes of war were adopted. Wider protection of the interests
of the American Republics in the event of war outside the Western
Hemisphere was provided. Respect for, and observance of, international
treaties and international law were strengthened. Principles of liberal
trade policies, as effective aids to the maintenance of peace, were
reaffirmed. The intellectual and cultural relationships among American
Republics were broadened as a part of the general peace program.

In a world unhappily thinking in terms of war, the representatives of
twenty-one Nations sat around a table, in an atmosphere of complete
confidence and understanding, sincerely discussing measures for
maintaining peace. Here was a great and a permanent achievement directly
affecting the lives and security of the two hundred and fifty million
human beings who dwell in this Western Hemisphere. Here was an example
which must have a wholesome effect upon the rest of the world.

In a very real sense, the Conference in Buenos Aires sent forth a
message on behalf of all the democracies of the world to those Nations
which live otherwise. Because such other Governments are perhaps more
spectacular, it was high time for democracy to assert itself.

Because all of us believe that our democratic form of government can
cope adequately with modern problems as they arise, it is patriotic as
well as logical for us to prove that we can meet new national needs with
new laws consistent with an historic constitutional framework clearly
intended to receive liberal and not narrow interpretation.

The United States of America, within itself, must continue the task of
making democracy succeed.

In that task the Legislative branch of our Government will, I am
confident, continue to meet the demands of democracy whether they relate
to the curbing of abuses, the extension of help to those who need help,
or the better balancing of our interdependent economies.

So, too, the Executive branch of the Government must move forward in
this task, and, at the same time, provide better management for
administrative action of all kinds.

The Judicial branch also is asked by the people to do its part in making
democracy successful. We do not ask the Courts to call non-existent
powers into being, but we have a right to expect that conceded powers or
those legitimately implied shall be made effective instruments for the
common good.

The process of our democracy must not be imperiled by the denial of
essential powers of free government.

Your task and mine is not ending with the end of the depression. The
people of the United States have made it clear that they expect us to
continue our active efforts in behalf of their peaceful advancement.

In that spirit of endeavor and service I greet the 75th Congress at the
beginning of this auspicious New Year.

***

State of the Union Address
Franklin D. Roosevelt
January 3, 1938

Mr. President, Mr. Speaker, Members of the Senate and of the House of
Representatives:

In addressing the Congress on the state of the Union present facts and
future hazards demand that I speak clearly and earnestly of the causes
which underlie events of profound concern to all.

In spite of the determination of this Nation for peace, it has become
clear that acts and policies of nations in other parts of the world have
far-reaching effects not only upon their immediate neighbors but also on
us.

I am thankful that I can tell you that our Nation is at peace. It has
been kept at peace despite provocations which in other days, because of
their seriousness, could well have engendered war. The people of the
United States and the Government of the United States have shown
capacity for restraint and a civilized approach to the purposes of
peace, while at the same time we maintain the integrity inherent in the
sovereignty of 130,000,000 people, lest we weaken or destroy our
influence for peace and jeopardize the sovereignty itself.

It is our traditional policy to live at peace with other nations. More
than that, we have been among the leaders in advocating the use of
pacific methods of discussion and conciliation in international
differences. We have striven for the reduction of military forces.

But in a world of high tension and disorder, in a world where stable
civilization is actually threatened, it becomes the responsibility of
each nation which strives for peace at home and peace with and among
others to be strong enough to assure the observance of those
fundamentals of peaceful solution of conflicts which are the only
ultimate basis for orderly existence.

Resolute in our determination to respect the rights of others, and to
command respect for the rights of ourselves, we must keep ourselves
adequately strong in self-defense.

There is a trend in the world away from the observance both of the
letter and the spirit of treaties. We propose to observe, as we have in
the past, our own treaty obligations to the limit; but we cannot be
certain of reciprocity on the part of others.

Disregard for treaty obligations seems to have followed the surface
trend away from the democratic representative form of government. It
would seem, therefore, that world peace through international agreements
is most safe in the hands of democratic representative governments--or,
in other words, peace is most greatly jeopardized in and by those
nations where democracy has been discarded or has never developed.

I have used the words "surface trend," for I still believe that
civilized man increasingly insists and in the long run will insist on
genuine participation in his own government. Our people believe that
over the years democracies of the world will survive, and that democracy
will be restored or established in those nations which today know it
not. In that faith lies the future peace of mankind.

At home, conditions call for my equal candor. Events of recent months
are new proof that we cannot conduct a national government after the
practice of 1787, or 1837 or 1887, for the obvious reason that human
needs and human desires are infinitely greater, infinitely more
difficult to meet than in any previous period in the life of our
Republic. Hitherto it has been an acknowledged duty of government to
meet these desires and needs: nothing has occurred of late to absolve
the Congress, the Courts or the President from that task. It faces us as
squarely, as insistently, as in March, 1933.

Much of trouble in our own lifetime has sprung from a long period of
inaction--from ignoring what fundamentally was happening to us, and from
a time-serving unwillingness to face facts as they forced themselves
upon us.

Our national life rests on two nearly equal producing forces,
agriculture and industry, each employing about one-third of our
citizens. The other third transports and distributes the products of the
first two, or performs special services for the whole.

The first great force, agriculture--and with it the production of
timber, minerals and other natural resources--went forward feverishly
and thoughtlessly until nature rebelled and we saw deserts encroach,
floods destroy, trees disappear and soil exhausted.

At the same time we have been discovering that vast numbers of our
farming population live in a poverty more abject than that of many of
the farmers of Europe whom we are wont to call peasants; that the prices
of our products of agriculture are too often dependent on speculation by
non-farming groups; and that foreign nations, eager to become
self-sustaining or ready to put virgin land under the plough are no
longer buying our surpluses of cotton and wheat and lard and tobacco and
fruit as they had before.

Since 1933 we have knowingly faced a choice of three remedies. First, to
cut our cost of farm production below that of other nations--an obvious
impossibility in many crops today unless we revert to human slavery or
its equivalent.

Second, to make the government the guarantor of farm prices and the
underwriter of excess farm production without limit--a course which
would bankrupt the strongest government in the world in a decade.

Third, to place the primary responsibility directly on the farmers
themselves, under the principle of majority rule, so that they may
decide, with full knowledge of the facts of surpluses, scarcities, world
markets and domestic needs, what the planting of each crop should be in
order to maintain a reasonably adequate supply which will assure a
minimum adequate price under the normal processes of the law of supply
and demand.

That means adequacy of supply but not glut. It means adequate reserves
against the day of drought. It is shameless misrepresentation to call
this a policy of scarcity. It is in truth insurance before the fact,
instead of government subsidy after the fact.

Any such plan for the control of excessive surpluses and the speculation
they bring has two enemies. There are those well meaning theorists who
harp on the inherent right of every free born American to do with his
land what he wants--to cultivate it well--or badly; to conserve his
timber by cutting only the annual increment thereof--or to strip it
clean, let fire burn the slash, and erosion complete the ruin; to raise
only one crop--and if that crop fails, to look for food and support from
his neighbors or his government.

That, I assert is not an inherent right of citizenship. For if a man
farms his land to the waste of the soil or the trees, he destroys not
only his own assets but the Nation's assets as well. Or if by his
methods he makes himself, year after year, a financial hazard of the
community and the government, he becomes not only a social problem but
an economic menace. The day has gone by when it could be claimed that
government has no interest in such ill-considered practices and no right
through representative methods to stop them.

The other group of enemies is perhaps less well-meaning. It includes
those who for partisan purposes oppose each and every practical effort
to help the situation, and also those who make money from undue
fluctuations in crop prices.

I gladly note that measures which seek to initiate a government program
for a balanced agriculture are now in conference between the two Houses
of the Congress. In their final consideration, I hope for a sound
consistent measure which will keep the cost of its administration within
the figure of current government expenditures in aid of agriculture. The
farmers of this Nation know that a balanced output can be put into
effect without excessive cost and with the cooperation of the great
majority of them.

If this balance can be created by an all-weather farm program, our farm
population will soon be assured of relatively constant purchasing power.
From this will flow two other practical results: the consuming public
will be protected against excessive food and textile prices, and the
industries of the Nation and their workers will find a steadier demand
for wares sold to the agricultural third of our people.

To raise the purchasing power of the farmer is, however, not enough. It
will not stay raised if we do not also raise the purchasing power of
that third of the Nation which receives its income from industrial
employment. Millions of industrial workers receive pay so low that they
have little buying power. Aside from the undoubted fact that they
thereby suffer great human hardship, they are unable to buy adequate
food and shelter, to maintain health or to buy their share of
manufactured goods.

We have not only seen minimum wage and maximum hour provisions prove
their worth economically and socially under government auspices in 1933,
1934 and 1935, but the people of this country, by an overwhelming vote,
are in favor of having the Congress--this Congress--put a floor below
which industrial wages shall not fall, and a ceiling beyond which the
hours of industrial labor shall not rise.

Here again let us analyze the opposition. A part of it is sincere in
believing that an effort thus to raise the purchasing power of lowest
paid industrial workers is not the business of the Federal Government.
Others give "lip service" to a general objective, but do not like any
specific measure that is proposed. In both cases it is worth our while
to wonder whether some of these opponents are not at heart opposed to
any program for raising the wages of the underpaid or reducing the hours
of the overworked.

Another group opposes legislation of this type on the ground that cheap
labor will help their locality to acquire industries and outside
capital, or to retain industries which today are surviving only because
of existing low wages and long hours. It has been my thought that,
especially during these past five years, this Nation has grown away from
local or sectional selfishness and toward national patriotism and unity.
I am disappointed by some recent actions and by some recent utterances
which sound like the philosophy of half a century ago.

There are many communities in the United States where the average family
income is pitifully low. It is in those communities that we find the
poorest educational facilities and the worst conditions of health. Why?
It is not because they are satisfied to live as they do. It is because
those communities have the lowest per capita wealth and income;
therefore, the lowest ability to pay taxes; and, therefore, inadequate
functioning of local government.

Such communities exist in the East, in the Middle West, in the Far West,
and in the South. Those who represent such areas in every part of the
country do their constituents ill service by blocking efforts to raise
their incomes, their property values and, therefore, their whole scale
of living. In the long run, the profits from Child labor, low pay and
overwork enure not to the locality or region where they exist but to the
absentee owners who have sent their capital into these exploited
communities to gather larger profits for themselves. Indeed, new
enterprises and new industries which bring permanent wealth will come
more readily to those communities which insist on good pay and
reasonable hours, for the simple reason that there they will find a
greater industrial efficiency and happier workers.

No reasonable person seeks a complete uniformity in wages in every part
of the United States; nor does any reasonable person seek an immediate
and drastic change from the lowest pay to the highest pay. We are
seeking, of course, only legislation to end starvation wages and
intolerable hours; more desirable wages are and should continue to be
the product of collective bargaining.

Many of those who represent great cities have shown their understanding
of the necessity of helping the agricultural third of the Nation. I hope
that those who represent constituencies primarily agricultural will not
underestimate the importance of extending like aid to the industrial
third.

Wage and hour legislation, therefore, is a problem which is definitely
before this Congress for action. It is an essential part of economic
recovery. It has the support of an overwhelming majority of our people
in every walk of life. They have expressed themselves through the ballot
box.

Again I revert to the increase of national purchasing power as an
underlying necessity of the day. If you increase that purchasing power
for the farmers and for the industrial workers, especially for those in
both groups who have least of it today, you will increase the purchasing
power of the final third of our population--those who transport and
distribute the products of farm and factory, and those of the
professions who serve all groups. I have tried to make clear to you, and
through you to the people of the United States, that this is an urgency
which must be met by complete and not by partial action.

If it is met, if the purchasing power of the Nation as a whole--in other
words, the total of the Nation's income--can be still further increased,
other happy results will flow from such increase.

We have raised the Nation's income from thirty-eight billion dollars in
the year 1932 to about sixty-eight billion dollars in the year 1937. Our
goal, our objective is to raise it to ninety or one hundred billion
dollars.

We have heard much about a balanced budget, and it is interesting to
note that many of those who have pleaded for a balanced budget as the
sole need now come to me to plead for additional government expenditures
at the expense of unbalancing the budget. As the Congress is fully
aware, the annual deficit, large for several years, has been declining
the last fiscal year and this. The proposed budget for 1939, which I
shall shortly send to the Congress, will exhibit a further decrease in
the deficit, though not a balance between income and outgo.

To many who have pleaded with me for an immediate balancing of the
budget, by a sharp curtailment or even elimination of government
functions, I have asked the question: "What present expenditures would
you reduce or eliminate?" And the invariable answer has been "that is
not my business--I know nothing of the details, but I am sure that it
could be done." That is not what you or I would call helpful
citizenship.

On only one point do most of them have a suggestion. They think that
relief for the unemployed by the giving of work is wasteful, and when I
pin them down I discover that at heart they are actually in favor of
substituting a dole in place of useful work. To that neither I nor, I am
confident, the Senators and Representatives in the Congress will ever
consent.

I am as anxious as any banker or industrialist or business man or
investor or economist that the budget of the United States Government be
brought into balance as quickly as possible. But I lay down certain
conditions which seem reasonable and which I believe all should accept.

The first condition is that we continue the policy of not permitting any
needy American who can and is willing to work to starve because the
Federal Government does not provide the work.

The second is that the Congress and the Executive join hands in
eliminating or curtailing any Federal activity which can be eliminated
or curtailed or even postponed without harming necessary government
functions or the safety of the Nation from a national point of view.

The third is to raise the purchasing power of the Nation to the point
that the taxes on this purchasing power--or, in other words, on the
Nation's income--will be sufficient to meet the necessary expenditures
of the national government.

I have hitherto stated that, in my judgment, the expenditures of the
national government cannot be cut much below seven billion dollars a
year without destroying essential functions or letting people starve.
That sum can be raised and will be cheerfully provided by the American
people, if we can increase the Nation's income to a point well beyond
the present level.

This does not mean that as the Nation's income goes up the Federal
expenditures should rise in proportion. On the contrary, the Congress
and the Executive should use every effort to hold the normal Federal
expenditures to approximately the present level, thus making it
possible, with an increase in the Nation's income and the resulting
increase in tax receipts, not only to balance future budgets but to
reduce the debt.

In line with this policy fall my former recommendations for the
reorganization and improvement of the administrative structure of the
government, both for immediate Executive needs and for the planning of
future national needs. I renew those recommendations.

In relation to tax changes, three things should be kept in mind. First,
the total sum to be derived by the Federal Treasury must not be
decreased as a result of any changes in schedules. Second, abuses by
individuals or corporations designed to escape tax-paying by using
various methods of doing business, corporate and otherwise--abuses which
we have sought, with great success, to end--must not be restored. Third,
we should rightly change certain provisions where they are proven to
work definite hardship, especially on the small business men of the
Nation. But, speculative income should not be favored over earned
income.

It is human nature to argue that this or that tax is responsible for
every ill. It is human nature on the part of those who pay graduated
taxes to attack all taxes based on the principle of ability to pay.
These are the same complainants who for a generation blocked the
imposition of a graduated income tax. They are the same complainants who
would impose the type of flat sales tax which places the burden of
government more on those least able to pay and less on those most able
to pay.

Our conclusion must be that while proven hardships should be corrected,
they should not be corrected in such a way as to restore abuses already
terminated or to shift a greater burden to the less fortunate.

This subject leads naturally into the wider field of the public attitude
toward business. The objective of increasing the purchasing power of the
farming third, the industrial third and the service third of our
population presupposes the cooperation of what we call capital and
labor.

Capital is essential; reasonable earnings on capital are essential; but
misuse of the powers of capital or selfish suspension of the employment
of capital must be ended, or the capitalistic system will destroy itself
through its own abuses.

The overwhelming majority of business men and bankers intend to be good
citizens. Only a small minority have displayed poor citizenship by
engaging in practices which are dishonest or definitely harmful to
society. This statement is straightforward and true. No person in any
responsible place in the Government of the United States today has ever
taken any position contrary to it.

But, unfortunately for the country, when attention is called to, or
attack is made on specific misuses of capital, there has been a
deliberate purpose on the part of the condemned minority to distort the
criticism into an attack on all capital. That is wilful deception but it
does not long deceive.

If attention is called to, or attack made on, certain wrongful business
practices, there are those who are eager to call it "an attack on all
business." That, too, is wilful deception that will not long deceive.
Let us consider certain facts:

There are practices today which most people believe should be ended.
They include tax avoidance through corporate and other methods, which I
have previously mentioned; excessive capitalization, investment
write-ups and security manipulations; price rigging and collusive
bidding in defiance of the spirit of the antitrust laws by methods which
baffle prosecution under the present statutes. They include
high-pressure salesmanship which creates cycles of overproduction within
given industries and consequent recessions in production until such time
as the surplus is consumed; the use of patent laws to enable larger
corporations to maintain high prices and withhold from the public the
advantages of the progress of science; unfair competition which drives
the smaller producer out of business locally, regionally or even on a
national scale; intimidation of local or state government to prevent the
enactment of laws for the protection of labor by threatening to move
elsewhere; the shifting of actual production from one locality or region
to another in pursuit of the cheapest wage scale.

The enumeration of these abuses does not mean that business as a whole
is guilty of them. Again, it is deception that will not long deceive to
tell the country that an attack on these abuses is an attack on
business.

Another group of problems affecting business, which cannot be termed
specific abuses, gives us food for grave thought about the future.
Generically such problems arise out of the concentration of economic
control to the detriment of the body politic--control of other people's
money, other people's labor, other people's lives.

In many instances such concentrations cannot be justified on the ground
of operating efficiency, but have been created for the sake of
securities profits, financial control, the suppression of competition
and the ambition for power over others. In some lines of industry a very
small numerical group is in such a position of influence that its
actions are of necessity followed by the other units operating in the
same field.

That such influences operate to control banking and finance is equally
true, in spite of the many efforts, through Federal legislation, to take
such control out of the hands of a small group. We have but to talk with
hundreds of small bankers throughout the United States to realize that
irrespective of local conditions, they are compelled in practice to
accept the policies laid down by a small number of the larger banks in
the Nation. The work undertaken by Andrew Jackson and Woodrow Wilson is
not finished yet.

The ownership of vast properties or the organization of thousands of
workers creates a heavy obligation of public service. The power should
not be sought or sanctioned unless the responsibility is accepted as
well. The man who seeks freedom from such responsibility in the name of
individual liberty is either fooling himself or trying to cheat his
fellow men. He wants to eat the fruits of orderly society without paying
for them.

As a Nation we have rejected any radical revolutionary program. For a
permanent correction of grave weaknesses in our economic system we have
relied on new applications of old democratic processes. It is not
necessary to recount what has been accomplished in preserving the homes
and livelihood of millions of workers on farms and in cities, in
reconstructing a sound banking and credit system, in reviving trade and
industry, in reestablishing security of life and property. All we need
today is to look upon the fundamental, sound economic conditions to know
that this business recession causes more perplexity than fear on the
part of most people and to contrast our prevailing mental attitude with
the terror and despair of five years ago.

Furthermore, we have a new moral climate in America. That means that we
ask business and finance to recognize that fact, to cure such
inequalities as they can cure without legislation but to join their
government in the enactment of legislation where the ending of abuses
and the steady functioning of our economic system calls for government
assistance. The Nation has no obligation to make America safe either for
incompetent business men or for business men who fail to note the trend
of the times and continue the use of machinery of economics and
practices of finance as outworn as the cotton spindle of 1870.

Government can be expected to cooperate in every way with the business
of the Nation provided the component parts of business abandon practices
which do not belong to this day and age, and adopt price and production
policies appropriate to the times.

In regard to the relationship of government to certain processes of
business, to which I have referred, it seems clear to me that existing
laws undoubtedly require reconstruction. I expect, therefore, to address
the Congress in a special message on this subject, and I hope to have
the help of business in the efforts of government to help business.

I have spoken of labor as another essential in the three great groups of
the population in raising the Nation's income. Definite strides in
collective bargaining have been made and the right of labor to organize
has been nationally accepted. Nevertheless in the evolution of the
process difficult situations have arisen in localities and among groups.
Unfortunate divisions relating to jurisdiction among the workers
themselves have retarded production within given industries and have,
therefore, affected related industries. The construction of homes and
other buildings has been hindered in some localities not only by
unnecessarily high prices for materials but also by certain hourly wage
scales.

For economic and social reasons our principal interest for the near
future lies along two lines: first, the immediate desirability of
increasing the wages of the lowest paid groups in all industry; and,
second, in thinking in terms of regularizing the work of the individual
worker more greatly through the year--in other words, in thinking more
in terms of the worker's total pay for a period of a whole year rather
than in terms of his remuneration by the hour or by the day.

In the case of labor as in the case of capital, misrepresentation of the
policy of the government of the United States is deception which will
not long deceive. In both cases we seek cooperation. In every case power
and responsibility must go hand in hand.

I have spoken of economic causes which throw the Nation's income out of
balance; I have spoken of practices and abuses which demand correction
through the cooperation of capital and labor with the government. But no
government can help the destinies of people who insist in putting
sectional and class consciousness ahead of general weal. There must be
proof that sectional and class interests are prepared more greatly than
they are today to be national in outlook.

A government can punish specific acts of spoliation; but no government
can conscript cooperation. We have improved some matters by way of
remedial legislation. But where in some particulars that legislation has
failed we cannot be sure whether it fails because some of its details
are unwise or because it is being sabotaged. At any rate, we hold our
objectives and our principles to be sound. We will never go back on
them.

Government has a final responsibility for the well-being of its
citizenship. If private cooperative endeavor fails to provide work for
willing hands and relief for the unfortunate, those suffering hardship
from no fault of their own have a right to call upon the Government for
aid; and a government worthy of its name must make fitting response.

It is the opportunity and the duty of all those who have faith in
democratic methods as applied in industry, in agriculture and in
business, as well as in the field of politics, to do their utmost to
cooperate with government--without regard to political affiliation,
special interests or economic prejudices--in whatever program may be
sanctioned by the chosen representatives of the people.

That presupposes on the part of the representatives of the people, a
program, its enactment and its administration.

Not because of the pledges of party programs alone, not because of the
clear policies of the past five years, but chiefly because of the need
of national unity in ending mistakes of the past and meeting the
necessities of today, we must carry on. I do not propose to let the
people down.

I am sure the Congress of the United States will not let the people
down.

***

State of the Union Address
Franklin D. Roosevelt
January 4, 1939

Mr. Vice President, Mr. Speaker, Members of the Senate and the Congress:

In Reporting on the state of the nation, I have felt it necessary on
previous occasions to advise the Congress of disturbance abroad and of
the need of putting our own house in order in the face of storm signals
from across the seas. As this Seventy-sixth Congress opens there is need
for further warning.

A war which threatened to envelop the world in flames has been averted;
but it has become increasingly clear that world peace is not assured.

All about us rage undeclared wars--military and economic. All about us
grow more deadly armaments--military and economic. All about us are
threats of new aggression military and economic.

Storms from abroad directly challenge three institutions indispensable
to Americans, now as always. The first is religion. It is the source of
the other two--democracy and international good faith.

Religion, by teaching man his relationship to God, gives the individual
a sense of his own dignity and teaches him to respect himself by
respecting his neighbors.

Democracy, the practice of self-government, is a covenant among free men
to respect the rights and liberties of their fellows.

International good faith, a sister of democracy, springs from the will
of civilized nations of men to respect the rights and liberties of other
nations of men.

In a modern civilization, all three--religion, democracy and
international good faith--complement and support each other.

Where freedom of religion has been attacked, the attack has come from
sources opposed to democracy. Where democracy has been overthrown, the
spirit of free worship has disappeared. And where religion and democracy
have vanished, good faith and reason in international affairs have given
way to strident ambition and brute force.

An ordering of society which relegates religion, democracy and good
faith among nations to the background can find no place within it for
the ideals of the Prince of Peace. The United States rejects such an
ordering, and retains its ancient faith.

There comes a time in the affairs of men when they must prepare to
defend, not their homes alone, but the tenets of faith and humanity on
which their churches, their governments and their very civilization are
founded. The defense of religion, of democracy and of good faith among
nations is all the same fight. To save one we must now make up our minds
to save all.

We know what might happen to us of the United States if the new
philosophies of force were to encompass the other continents and invade
our own. We, no more than other nations, can afford to be surrounded by
the enemies of our faith and our humanity. Fortunate it is, therefore,
that in this Western Hemisphere we have, under a common ideal of
democratic government, a rich diversity of resources and of peoples
functioning together in mutual respect and peace.

That Hemisphere, that peace, and that ideal we propose to do our share
in protecting against storms from any quarter. Our people and our
resources are pledged to secure that protection. From that determination
no American flinches.

This by no means implies that the American Republics disassociate
themselves from the nations of other continents. It does not mean the
Americas against the rest of the world. We as one of the Republics
reiterate our willingness to help the cause of world peace. We stand on
our historic offer to take counsel with all other nations of the world
to the end that aggression among them be terminated, that the race of
armaments cease and that commerce be renewed.

But the world has grown so small and weapons of attack so swift that no
nation can be safe in its will to peace so long as any other powerful
nation refuses to settle its grievances at the council table.

For if any government bristling with implements of war insists on
policies of force, weapons of defense give the only safety.

In our foreign relations we have learned from the past what not to do.
From new wars we have learned what we must do.

We have learned that effective timing of defense, and the distant points
from which attacks may be launched are completely different from what
they were twenty years ago.

We have learned that survival cannot be guaranteed by arming after the
attack begins--for there is new range and speed to offense.

We have learned that long before any overt military act, aggression
begins with preliminaries of propaganda, subsidized penetration, the
loosening of ties of good will, the stirring of prejudice and the
incitement to disunion.

We have learned that God-fearing democracies of the world which observe
the sanctity of treaties and good faith in their dealings with other
nations cannot safely be indifferent to international lawlessness
anywhere. They cannot forever let pass, without effective protest, acts
of aggression against sister nations--acts which automatically undermine
all of us.

Obviously they must proceed along practical, peaceful lines. But the
mere fact that we rightly decline to intervene with arms to prevent acts
of aggression does not mean that we must act as if there were no
aggression at all. Words may be futile, but war is not the only means of
commanding a decent respect for the opinions of mankind. There are many
methods short of war, but stronger and more effective than mere words,
of bringing home to aggressor governments the aggregate sentiments of
our own people.

At the very least, we can and should avoid any action, or any lack of
action, which will encourage, assist or build up an aggressor. We have
learned that when we deliberately try to legislate neutrality, our
neutrality laws may operate unevenly and unfairly--may actually give aid
to an aggressor and deny it to the victim. The instinct of
self-preservation should warn us that we ought not to let that happen
any more.

And we have learned something else--the old, old lesson that probability
of attack is mightily decreased by the assurance of an ever ready
defense. Since 1931, nearly eight years ago, world events of thunderous
import have moved with lightning speed. During these eight years many of
our people clung to the hope that the innate decency of mankind would
protect the unprepared who showed their innate trust in mankind. Today
we are all wiser--and sadder.

Under modern conditions what we mean by "adequate defense"--a policy
subscribed to by all of us--must be divided into three elements. First,
we must have armed forces and defenses strong enough to ward off sudden
attack against strategic positions and key facilities essential to
ensure sustained resistance and ultimate victory. Secondly, we must have
the organization and location of those key facilities so that they may
be immediately utilized and rapidly expanded to meet all needs without
danger of serious interruption by enemy attack.

In the course of a few days I shall send you a special message making
recommendations for those two essentials of defense against danger which
we cannot safely assume will not come.

If these first two essentials are reasonably provided for, we must be
able confidently to invoke the third element, the underlying strength of
citizenship--the self-confidence, the ability, the imagination and the
devotion that give the staying power to see things through.

A strong and united nation may be destroyed if it is unprepared against
sudden attack. But even a nation well armed and well organized from a
strictly military standpoint may, after a period of time, meet defeat if
it is unnerved by self-distrust, endangered by class prejudice, by
dissension between capital and labor, by false economy and by other
unsolved social problems at home.

In meeting the troubles of the world we must meet them as one
people--with a unity born of the fact that for generations those who
have come to our shores, representing many kindreds and tongues, have
been welded by common opportunity into a united patriotism. If another
form of government can present a united front in its attack on a
democracy, the attack must and will be met by a united democracy. Such a
democracy can and must exist in the United States.

A dictatorship may command the full strength of a regimented nation. But
the united strength of a democratic nation can be mustered only when its
people, educated by modern standards to know what is going on and where
they are going, have conviction that they are receiving as large a share
of opportunity for development, as large a share of material success and
of human dignity, as they have a right to receive.

Our nation's program of social and economic reform is therefore a part
of defense, as basic as armaments themselves.

Against the background of events in Europe, in Africa and in Asia during
these recent years, the pattern of what we have accomplished since 1933
appears in even clearer focus.

For the first time we have moved upon deep-seated problems affecting our
national strength and have forged national instruments adequate to meet
them.

Consider what the seemingly piecemeal struggles of these six years add
up to in terms of realistic national preparedness.

We are conserving and developing natural resources--land, water power,
forests.

We are trying to provide necessary food, shelter and medical care for
the health of our population.

We are putting agriculture--our system of food and fibre supply--on a
sounder basis.

We are strengthening the weakest spot in our system of industrial
supply-- its long smouldering labor difficulties.

We have cleaned up our credit system so that depositor and investor
alike may more readily and willingly make their capital available for
peace or war.

We are giving to our youth new opportunities for work and education.

We have sustained the morale of all the population by the dignified
recognition of our obligations to the aged, the helpless and the needy.

Above all, we have made the American people conscious of their
interrelationship and their interdependence. They sense a common destiny
and a common need of each other. Differences of occupation, geography,
race and religion no longer obscure the nation's fundamental unity in
thought and in action.

We have our difficulties, true--but we are a wiser and a tougher nation
than we were in 1929, or in 1932.

Never have there been six years of such far-flung internal preparedness
in our history. And this has been done without any dictator's power to
command, without conscription of labor or confiscation of capital,
without concentration camps and without a scratch on freedom of speech,
freedom of the press or the rest of the Bill of Rights.

We see things now that we could not see along the way. The tools of
government which we had in 1933 are outmoded. We have had to forge new
tools for a new role of government operating in a democracy--a role of
new responsibility for new needs and increased responsibility for old
needs, long neglected.

Some of these tools had to be roughly shaped and still need some
machining down. Many of those who fought bitterly against the forging of
these new tools welcome their use today. The American people, as a
whole, have accepted them. The Nation looks to the Congress to improve
the new machinery which we have permanently installed, provided that in
the process the social usefulness of the machinery is not destroyed or
impaired.

All of us agree that we should simplify and improve laws if experience
and operation clearly demonstrate the need. For instance, all of us want
better provision for our older people under our social security
legislation. For the medically needy we must provide better care.

Most of us agree that for the sake of employer and employee alike we
must find ways to end factional labor strife and employer-employee
disputes.

Most of us recognize that none of these tools can be put to maximum
effectiveness unless the executive processes of government are
revamped--reorganized, if you will--into more effective combination. And
even after such reorganization it will take time to develop
administrative personnel and experience in order to use our new tools
with a minimum of mistakes. The Congress, of course, needs no further
information on this.

With this exception of legislation to provide greater government
efficiency, and with the exception of legislation to ameliorate our
railroad and other transportation problems, the past three Congresses
have met in part or in whole the pressing needs of the new order of
things.

We have now passed the period of internal conflict in the launching of
our program of social reform. Our full energies may now be released to
invigorate the processes of recovery in order to preserve our reforms,
and to give every man and woman who wants to work a real job at a living
wage.

But time is of paramount importance. The deadline of danger from within
and from without is not within our control. The hour-glass may be in the
hands of other nations. Our own hour-glass tells us that we are off on a
race to make democracy work, so that we may be efficient in peace and
therefore secure in national defense.

This time element forces us to still greater efforts to attain the full
employment of our labor and our capital.

The first duty of our statesmanship is to bring capital and man-power
together.

Dictatorships do this by main force. By using main force they apparently
succeed at it--for the moment. However we abhor their methods, we are
compelled to admit that they have obtained substantial utilization of
all their material and human resources. Like it or not, they have
solved, for a time at least, the problem of idle men and idle capital.
Can we compete with them by boldly seeking methods of putting idle men
and idle capital together and, at the same time, remain within our
American way of life, within the Bill of Rights, and within the bounds
of what is, from our point of view, civilization itself?

We suffer from a great unemployment of capital. Many people have the
idea that as a nation we are overburdened with debt and are spending
more than we can afford. That is not so. Despite our Federal Government
expenditures the entire debt of our national economic system, public and
private together, is no larger today than it was in 1929, and the
interest thereon is far less than it was in 1929.

The object is to put capital--private as well as public--to work.

We want to get enough capital and labor at work to give us a total
turnover of business, a total national income, of at least eighty
billion dollars a year. At that figure we shall have a substantial
reduction of unemployment; and the Federal Revenues will be sufficient
to balance the current level of cash expenditures on the basis of the
existing tax structure. That figure can be attained, working within the
framework of our traditional profit system.

The factors in attaining and maintaining that amount of national income
are many and complicated.

They include more widespread understanding among business men of many
changes which world conditions and technological improvements have
brought to our economy over the last twenty years--changes in the
interrelationship of price and volume and employment, for
example--changes of the kind in which business men are now educating
themselves through excellent opportunities like the so-called "monopoly
investigation."

They include a perfecting of our farm program to protect farmers' income
and consumers' purchasing power from alternate risks of crop gluts and
crop shortages.

They include wholehearted acceptance of new standards of honesty in our
financial markets.

They include reconcilement of enormous, antagonistic interests--some of
them long in litigation--in the railroad and general transportation
field.

They include the working out of new techniques--private, state and
federal--to protect the public interest in and to develop wider markets
for electric power.

They include a revamping of the tax relationships between federal, state
and local units of government, and consideration of relatively small tax
increases to adjust inequalities without interfering with the aggregate
income of the American people.

They include the perfecting of labor organization and a universal
ungrudging attitude by employers toward the labor movement, until there
is a minimum of interruption of production and employment because of
disputes, and acceptance by labor of the truth that the welfare of labor
itself depends on increased balanced out-put of goods.

To be immediately practical, while proceeding with a steady evolution in
the solving of these and like problems, we must wisely use
instrumentalities, like Federal investment, which are immediately
available to us.

Here, as elsewhere, time is the deciding factor in our choice of
remedies.

Therefore, it does not seem logical to me, at the moment we seek to
increase production and consumption, for the Federal Government to
consider a drastic curtailment of its own investments.

The whole subject of government investing and government income is one
which may be approached in two different ways.

The first calls for the elimination of enough activities of government
to bring the expenses of government immediately into balance with income
of government. This school of thought maintains that because our
national income this year is only sixty billion dollars, ours is only a
sixty billion dollar country; that government must treat it as such; and
that without the help of government, it may some day, somehow, happen to
become an eighty billion dollar country.

If the Congress decides to accept this point of view, it will logically
have to reduce the present functions or activities of government by
one-third. Not only will the Congress have to accept the responsibility
for such reduction; but the Congress will have to determine which
activities are to be reduced.

Certain expenditures we cannot possibly reduce at this session, such as
the interest on the public debt. A few million dollars saved here or
there in the normal or in curtailed work of the old departments and
commissions will make no great saving in the Federal budget. Therefore,
the Congress would have to reduce drastically some of certain large
items, very large items, such as aids to agriculture and soil
conservation, veterans' pensions, flood control, highways, waterways and
other public works, grants for social and health security, Civilian
Conservation Corps activities, relief for the unemployed, or national
defense itself.

The Congress alone has the power to do all this, as it is the
appropriating branch of the government.

The other approach to the question of government spending takes the
position that this Nation ought not to be and need not be only a sixty
billion dollar nation; that at this moment it has the men and the
resources sufficient to make it at least an eighty billion dollar
nation. This school of thought does not believe that it can become an
eighty billion dollar nation in the near future if government cuts its
operations by one-third. It is convinced that if we were to try it, we
would invite disaster--and that we would not long remain even a sixty
billion dollar nation. There are many complicated factors with which we
have to deal, but we have learned that it is unsafe to make abrupt
reductions at any time in our net expenditure program.

By our common sense action of resuming government activities last
spring, we have reversed a recession and started the new rising tide of
prosperity and national income which we are now just beginning to enjoy.

If government activities are fully maintained, there is a good prospect
of our becoming an eighty billion dollar country in a very short time.
With such a national income, present tax laws will yield enough each
year to balance each year's expenses.

It is my conviction that down in their hearts the American
public--industry, agriculture, finance--want this Congress to do
whatever needs to be done to raise our national income to eighty billion
dollars a year.

Investing soundly must preclude spending wastefully. To guard against
opportunist appropriations, I have on several occasions addressed the
Congress on the importance of permanent long-range planning. I hope,
therefore, that following my recommendation of last year, a permanent
agency will be set up and authorized to report on the urgency and
desirability of the various types of government investment.

Investment for prosperity can be made in a democracy.

I hear some people say, "This is all so complicated. There are certain
advantages in a dictatorship. It gets rid of labor trouble, of
unemployment, of wasted motion and of having to do your own thinking."

My answer is, "Yes, but it also gets rid of some other things which we
Americans intend very definitely to keep--and we still intend to do our
own thinking."

It will cost us taxes and the voluntary risk of capital to attain some
of the practical advantages which other forms of government have
acquired.

Dictatorship, however, involves costs which the American people will
never pay: The cost of our spiritual values. The cost of the blessed
right of being able to say what we please. The cost of freedom of
religion. The cost of seeing our capital confiscated. The cost of being
cast into a concentration camp. The cost of being afraid to walk down
the street with the wrong neighbor. The cost of having our children
brought up, not as free and dignified human beings, but as pawns molded
and enslaved by a machine.

If the avoidance of these costs means taxes on my income; if avoiding
these costs means taxes on my estate at death, I would bear those taxes
willingly as the price of my breathing and my children breathing the
free air of a free country, as the price of a living and not a dead
world.

Events abroad have made it increasingly clear to the American people
that dangers within are less to be feared than dangers from without. If,
therefore, a solution of this problem of idle men and idle capital is
the price of preserving our liberty, no formless selfish fears can stand
in the way.

Once I prophesied that this generation of Americans had a rendezvous
with destiny. That prophecy comes true. To us much is given; more is
expected.

This generation will "nobly save or meanly lose the last best hope of
earth. . . . The way is plain, peaceful, generous, just--a way which if
followed the world will forever applaud and God must forever bless."

***

State of the Union Address
Franklin D. Roosevelt
January 3, 1940

Mr. Vice President, Mr. Speaker, Members of the Senate and the House of
Representatives:

I wish each and every one of you a very happy New Year.

As the Congress reassembles, the impact of war abroad makes it natural
to approach "the state of the union" through a discussion of foreign
affairs.

But it is important that those who hear and read this message should in
no way confuse that approach with any thought that our Government is
abandoning, or even overlooking, the great significance of its domestic
policies.

The social and economic forces which have been mismanaged abroad until
they have resulted in revolution, dictatorship and war are the same as
those which we here are struggling to adjust peacefully at home.

You are well aware that dictatorships--and the philosophy of force that
justifies and accompanies dictatorships--have originated in almost every
case in the necessity for drastic action to improve internal conditions
in places where democratic action for one reason or another has failed
to respond to modern needs and modern demands.

It was with far-sighted wisdom that the framers of our Constitution
brought together in one magnificent phrase three great concepts--"common
defense," "general welfare" and "domestic tranquility."

More than a century and a half later we, who are here today, still
believe with them that our best defense is the promotion of our general
welfare and domestic tranquillity.

In previous messages to the Congress I have repeatedly warned that,
whether we like it or not, the daily lives of American citizens will, of
necessity, feel the shock of events on other continents. This is no
longer mere theory; because it has been definitely proved to us by the
facts of yesterday and today.

To say that the domestic well-being of one hundred and thirty million
Americans is deeply affected by the well-being or the ill-being of the
populations of other nations is only to recognize in world affairs the
truth that we all accept in home affairs.

If in any local unit--a city, county, State or region--low standards of
living are permitted to continue, the level of the civilization of the
entire nation will be pulled downward.

The identical principle extends to the rest of the civilized world. But
there are those who wishfully insist, in innocence or ignorance or both,
that the United States of America as a self-contained unit can live
happily and prosperously, its future secure, inside a high wall of
isolation while, outside, the rest of Civilization and the commerce and
culture of mankind are shattered.

I can understand the feelings of those who warn the nation that they
will never again consent to the sending of American youth to fight on
the soil of Europe. But, as I remember, nobody has asked them to
consent--for nobody expects such an undertaking.

The overwhelming majority of our fellow citizens do not abandon in the
slightest their hope and their expectation that the United States will
not become involved in military participation in these wars.

I can also understand the wishfulness of those who oversimplify the
whole situation by repeating that all we have to do is to mind our own
business and keep the nation out of war. But there is a vast difference
between keeping out of war and pretending that this war is none of our
business.

We do not have to go to war with other nations, but at least we can
strive with other nations to encourage the kind of peace that will
lighten the troubles of the world, and by so doing help our own nation
as well.

I ask that all of us everywhere think things through with the single aim
of how best to serve the future of our own nation. I do not mean merely
its future relationship with the outside world. I mean its domestic
future as well--the work, the security, the prosperity, the happiness,
the life of all the boys and girls in the United States, as they are
inevitably affected by such world relationships. For it becomes clearer
and clearer that the future world will be a shabby and dangerous place
to live in--yes, even for Americans to live in--if it is ruled by force
in the hands of a few.

Already the crash of swiftly moving events over the earth has made us
all think with a longer view. Fortunately, that thinking cannot be
controlled by partisanship. The time is long past when any political
party or any particular group can curry or capture public favor by
labeling itself the "peace party" or the "peace bloc." That label
belongs to the whole United States and to every right thinking man,
woman and child within it.

For out of all the military and diplomatic turmoil, out of all the
propaganda, and counter-propaganda of the present conflicts, there are
two facts which stand out, and which the whole world acknowledges.

The first is that never before has the Government of the United States
of America done so much as in our recent past to establish and maintain
the policy of the Good Neighbor with its sister nations.

The second is that in almost every nation in the world today there is a
true public belief that the United States has been, and will continue to
be, a potent and active factor in seeking the reestablishment of world
peace.

In these recent years we have had a clean record of peace and good-will.
It is an open book that cannot be twisted or defamed. It is a record
that must be continued and enlarged.

So I hope that Americans everywhere will work out for themselves the
several alternatives which lie before world civilization, which
necessarily includes our own.

We must look ahead and see the possibilities for our children if the
rest of the world comes to be dominated by concentrated force
alone--even though today we are a very great and a very powerful nation.

We must look ahead and see the effect on our own future if all the small
nations of the world have their independence snatched from them or
become mere appendages to relatively vast and powerful military systems.

We must look ahead and see the kind of lives our children would have to
lead if a large part of the rest of the world were compelled to worship
a god imposed by a military ruler, or were forbidden to worship God at
all; if the rest of the world were forbidden to read and hear the
facts--the daily news of their own and other nations--if they were
deprived of the truth that makes men free.

We must look ahead and see the effect on our future generations if world
trade is controlled by any nation or group of nations which sets up that
control through military force.

It is, of course, true that the record of past centuries includes
destruction of many small nations, the enslavement of peoples, and the
building of empires on the foundation of force. But wholly apart from
the greater international morality which we seek today, we recognize the
practical fact that with modern weapons and modern conditions, modern
man can no longer lead a civilized life if we are to go back to the
practice of wars and conquests of the seventeenth and eighteenth
centuries.

Summing up this need of looking ahead, and in words of common sense and
good American citizenship. I hope that we shall have fewer American
ostriches in our midst. It is not good for the ultimate health of
ostriches to bury their heads in the sand.

Only an ostrich would look upon these wars through the eyes of cynicism
or ridicule.

Of course, the peoples of other nations have the right to choose their
own form of Government. But we in this nation still believe that such
choice should be predicated on certain freedoms which we think are
essential everywhere. We know that we ourselves shall never be wholly
safe at home unless other governments recognize such freedoms.

Twenty-one American Republics, expressing the will of two hundred and
fifty million people to preserve peace and freedom in this Hemisphere,
are displaying a unanimity of ideals and practical relationships which
gives hope that what is being done here can be done on other continents.
We in all the Americas are coming to the realization that we can retain
our respective nationalities without, at the same time, threatening the
national existence of our neighbors.

Such truly friendly relationships, for example, permit us to follow our
own domestic policies with reference to our agricultural products, while
at the same time we have the privilege of trying to work out mutual
assistance arrangements for a world distribution of world agricultural
surpluses.

And we have been able to apply the same simple principle to many
manufactured products--surpluses of which must be sold in the world
export markets if we intend to continue a high level of production and
employment.

For many years after the World War blind economic selfishness in most
countries, including our own, resulted in a destructive mine-field of
trade restrictions which blocked the channels of commerce among nations.
Indeed, this policy was one of the contributing causes of existing wars.
It dammed up vast unsalable surpluses, helping to bring about
unemployment and suffering in the United States and everywhere else.

To point the way to break up that log-jam our Trade Agreements Act was
passed--based upon a policy of equality of treatment among nations and
of mutually profitable arrangements of trade.

It is not correct to infer that legislative powers have been transferred
from the Congress to the Executive Branch of the Government. Everyone
recognizes that general tariff legislation is a Congressional function;
but we know that, because of the stupendous task involved in the
fashioning and the passing of a general tariff law, it is advisable to
provide at times of emergency some flexibility to make the general law
adjustable to quickly changing conditions.

We are in such a time today. Our present trade agreement method provides
a temporary flexibility and is, therefore, practical in the best sense.
It should be kept alive to serve our trade interests--agricultural and
industrial--in many valuable ways during the existing wars.

But what is more important, the Trade Agreements Act should be extended
as an indispensable part of the foundation of any stable and enduring
peace.

The old conditions of world trade made for no enduring peace; and when
the time comes, the United States must use its influence to open up the
trade channels of the world, in all nations, in order that no one nation
need feel compelled in later days to seek by force of arms what it can
well gain by peaceful conference. For that purpose, too, we need the
Trade Agreements Act even more today than when it was passed.

I emphasize the leadership which this nation can take when the time
comes for a renewal of world peace. Such an influence will be greatly
weakened if this Government becomes a dog in the manger of trade
selfishness.

The first President of the United States warned us against entangling
foreign alliances. The present President of the United States subscribes
to and follows that precept.

I hope that most of you will agree that trade cooperation with the rest
of the world does not violate that precept in any way.

Even as through these trade agreements we prepare to cooperate in a
world that wants peace, we must likewise be prepared to take care of
ourselves if the world cannot attain peace.

For several years past we have been compelled to strengthen our own
national defense. That has created a very large portion of our Treasury
deficits. This year in the light of continuing world uncertainty, I am
asking the Congress for Army and Navy increases which are based not on
panic but on common sense. They are not as great as enthusiastic
alarmists seek. They are not as small as unrealistic persons claiming
superior private information would demand.

As will appear in the annual budget tomorrow, the only important
increase in any part of the budget is the estimate for national defense.
Practically all other important items show a reduction. But you know,
you can't eat your cake and have it too. Therefore, in the hope that we
can continue in these days of increasing economic prosperity to reduce
the Federal deficit, I am asking the Congress to levy sufficient
additional taxes to meet the emergency spending for national defense.

Behind the Army and Navy, of course, lies our ultimate line of
defense--"the general welfare" of our people. We cannot report, despite
all the progress that we have made in our domestic problems--despite the
fact that production is back to 1929 levels--that all our problems are
solved. The fact of unemployment of millions of men and women remains a
symptom of a number of difficulties in our economic system not yet
adjusted.

While the number of the unemployed has decreased very greatly, while
their immediate needs for food and clothing--as far as the Federal
Government is concerned--have been largely met, while their morale has
been kept alive by giving them useful public work, we have not yet found
a way to employ the surplus of our labor which the efficiency of our
industrial processes has created.

We refuse the European solution of using the unemployed to build up
excessive armaments which eventually result in dictatorships and war. We
encourage an American way--through an increase of national income which
is the only way we can be sure will take up the slack. Much progress has
been made; much remains to be done.

We recognize that we must find an answer in terms of work and
opportunity.

The unemployment problem today has become very definitely a problem of
youth as well as of age. As each year has gone by hundreds of thousands
of boys and girls have come of working age. They now form an army of
unused youth. They must be an especial concern of democratic Government.

We must continue, above all things, to look for a solution of their
special problem. For they, looking ahead to life, are entitled to action
on our part and not merely to admonitions of optimism or lectures on
economic laws.

Some in our midst have sought to instill a feeling of fear and defeatism
in the minds of the American people about this problem.

To face the task of finding jobs faster than invention can take them
away--is not defeatism. To warble easy platitudes that if we would only
go back to ways that have failed, everything would be all right--is not
courage.

In 1933 we met a problem of real fear and real defeatism. We faced the
facts--with action and not with words alone.

The American people will reject the doctrine of fear, confident that in
the 'thirties we have been building soundly a new order of things,
different from the order of the 'twenties. In this dawn of the decade of
the 'forties, with our program of social improvement started, we will
continue to carry on the processes of recovery, so as to preserve our
gains and provide jobs at living wages.

There are, of course, many other items of great public interest which
could be enumerated in this message--the continued conservation of our
natural resources, the improvement of health and of education, the
extension of social security to larger groups, the freeing of large
areas from restricted transportation discriminations, the extension of
the merit system and many others.

Our continued progress in the social and economic field is important not
only for the significance of each part of it but for the total effect
which our program of domestic betterment has upon that most valuable
asset of a nation in dangerous times--its national unity.

The permanent security of America in the present crisis does not lie in
armed force alone. What we face is a set of world-wide forces of
disintegration--vicious, ruthless, destructive of all the moral,
religious and political standards which mankind, after centuries of
struggle, has come to cherish most.

In these moral values, in these forces which have made our nation great,
we must actively and practically reassert our faith.

These words--"national unity"--must not be allowed to be come merely a
high-sounding phrase, a vague generality, a pious hope, to which
everyone can give lip-service. They must be made to have real meaning in
terms of the daily thoughts and acts of every man, woman and child in
our land during the coming year and during the years that lie ahead.

For national unity is, in a very real and a very deep sense, the
fundamental safeguard of all democracy.

Doctrines that set group against group, faith against faith, race
against race, class against class, fanning the fires of hatred in men
too despondent, too desperate to think for themselves, were used as
rabble-rousing slogans on which dictators could ride to power. And once
in power they could saddle their tyrannies on whole nations and on their
weaker neighbors.

This is the danger to which we in America must begin to be more alert.
For the apologists for foreign aggressors, and equally those selfish and
partisan groups at home who wrap themselves in a false mantle of
Americanism to promote their own economic, financial or political
advantage, are now trying European tricks upon us, seeking to muddy the
stream of our national thinking, weakening us in the face of danger, by
trying to set our own people to fighting among themselves. Such tactics
are what have helped to plunge Europe into war. We must combat them, as
we would the plague, if American integrity and American security are to
be preserved. We cannot afford to face the future as a disunited people.

We must as a united people keep ablaze on this continent the flames of
human liberty, of reason, of democracy and of fair play as living things
to be preserved for the better world that is to come.

Overstatement, bitterness, vituperation, and the beating of drums have
contributed mightily to ill-feeling and wars between nations. If these
unnecessary and unpleasant actions are harmful in the international
field, if they have hurt in other parts of the world, they are also
harmful in the domestic scene. Peace among ourselves would seem to have
some of the advantage of peace between us and other nations. In the long
run history amply demonstrates that angry controversy surely wins less
than calm discussion.

In the spirit, therefore, of a greater unselfishness, recognizing that
the world--including the United States of America--passes through
perilous times, I am very hopeful that the closing session of the
Seventy-sixth Congress will consider the needs of the nation and of
humanity with calmness, with tolerance and with cooperative wisdom.

May the year 1940 be pointed to by our children as another period when
democracy justified its existence as the best instrument of government
yet devised by mankind.

***

State of the Union Address
Franklin D. Roosevelt
January 6, 1941

Mr. President, Mr. Speaker, Members of the Seventy-seventh Congress:

I address you, the Members of the Seventy-seventh Congress, at a moment
unprecedented in the history of the Union. I use the word
"unprecedented," because at no previous time has American security been
as seriously threatened from without as it is today.

Since the permanent formation of our Government under the Constitution,
in 1789, most of the periods of crisis in our history have related to
our domestic affairs. Fortunately, only one of these--the four-year War
Between the States--ever threatened our national unity. Today, thank
God, one hundred and thirty million Americans, in forty-eight States,
have forgotten points of the compass in our national unity.

It is true that prior to 1914 the United States often had been disturbed
by events in other Continents. We had even engaged in two wars with
European nations and in a number of undeclared wars in the West Indies,
in the Mediterranean and in the Pacific for the maintenance of American
rights and for the principles of peaceful commerce. But in no case had a
serious threat been raised against our national safety or our continued
independence.

What I seek to convey is the historic truth that the United States as a
nation has at all times maintained clear, definite opposition, to any
attempt to lock us in behind an ancient Chinese wall while the
procession of civilization went past. Today, thinking of our children
and of their children, we oppose enforced isolation for ourselves or for
any other part of the Americas.

That determination of ours, extending over all these years, was proved,
for example, during the quarter century of wars following the French
Revolution.

While the Napoleonic struggles did threaten interests of the United
States because of the French foothold in the West Indies and in
Louisiana, and while we engaged in the War of 1812 to vindicate our
right to peaceful trade, it is nevertheless clear that neither France
nor Great Britain, nor any other nation, was aiming at domination of the
whole world.

In like fashion from 1815 to 1914--ninety-nine years--no single war in
Europe or in Asia constituted a real threat against our future or
against the future of any other American nation.

Except in the Maximilian interlude in Mexico, no foreign power sought to
establish itself in this Hemisphere; and the strength of the British
fleet in the Atlantic has been a friendly strength. It is still a
friendly strength.

Even when the World War broke out in 1914, it seemed to contain only
small threat of danger to our own American future. But, as time went on,
the American people began to visualize what the downfall of democratic
nations might mean to our own democracy.

We need not overemphasize imperfections in the Peace of Versailles. We
need not harp on failure of the democracies to deal with problems of
world reconstruction. We should remember that the Peace of 1919 was far
less unjust than the kind of "pacification" which began even before
Munich, and which is being carried on under the new order of tyranny
that seeks to spread over every continent today. The American people
have unalterably set their faces against that tyranny.

Every realist knows that the democratic way of life is at this moment
being directly assailed in every part of the world--assailed either by
arms, or by secret spreading of poisonous propaganda by those who seek
to destroy unity and promote discord in nations that are still at peace.

During sixteen long months this assault has blotted out the whole
pattern of democratic life in an appalling number of independent
nations, great and small. The assailants are still on the march,
threatening other nations, great and small.

Therefore, as your President, performing my constitutional duty to "give
to the Congress information of the state of the Union," I find it,
unhappily, necessary to report that the future and the safety of our
country and of our democracy are overwhelmingly involved in events far
beyond our borders.

Armed defense of democratic existence is now being gallantly waged in
four continents. If that defense fails, all the population and all the
resources of Europe, Asia, Africa and Australasia will be dominated by
the conquerors. Let us remember that the total of those populations and
their resources in those four continents greatly exceeds the sum total
of the population and the resources of the whole of the Western
Hemisphere--many times over.

In times like these it is immature--and incidentally, untrue--for
anybody to brag that an unprepared America, single-handed, and with one
hand tied behind its back, can hold off the whole world.

No realistic American can expect from a dictator's peace international
generosity, or return of true independence, or world disarmament, or
freedom of expression, or freedom of religion--or even good business.

Such a peace would bring no security for us or for our neighbors.
"Those, who would give up essential liberty to purchase a little
temporary safety, deserve neither liberty nor safety."

As a nation, we may take pride in the fact that we are softhearted; but
we cannot afford to be soft-headed.

We must always be wary of those who with sounding brass and a tinkling
cymbal preach the "ism" of appeasement.

We must especially beware of that small group of selfish men who would
clip the wings of the American eagle in order to feather their own
nests.

I have recently pointed out how quickly the tempo of modern warfare
could bring into our very midst the physical attack which we must
eventually expect if the dictator nations win this war.

There is much loose talk of our immunity from immediate and direct
invasion from across the seas. Obviously, as long as the British Navy
retains its power, no such danger exists. Even if there were no British
Navy, it is not probable that any enemy would be stupid enough to attack
us by landing troops in the United States from across thousands of miles
of ocean, until it had acquired strategic bases from which to operate.

But we learn much from the lessons of the past years in
Europe--particularly the lesson of Norway, whose essential seaports were
captured by treachery and surprise built up over a series of years.

The first phase of the invasion of this Hemisphere would not be the
landing of regular troops. The necessary strategic points would be
occupied by secret agents and their dupes--and great numbers of them are
already here, and in Latin America.

As long as the aggressor nations maintain the offensive, they--not
we--will choose the time and the place and the method of their attack.

That is why the future of all the American Republics is today in serious
danger.

That is why this Annual Message to the Congress is unique in our
history.

That is why every member of the Executive Branch of the Government and
every member of the Congress faces great responsibility and great
accountability.

The need of the moment is that our actions and our policy should be
devoted primarily--almost exclusively--to meeting this foreign peril.
For all our domestic problems are now a part of the great emergency.

Just as our national policy in internal affairs has been based upon a
decent respect for the rights and the dignity of all our fellow men
within our gates, so our national policy in foreign affairs has been
based on a decent respect for the rights and dignity of all nations,
large and small. And the justice of morality must and will win in the
end.

Our national policy is this:

First, by an impressive expression of the public will and without regard
to partisanship, we are committed to all-inclusive national defense.

Second, by an impressive expression of the public will and without
regard to partisanship, we are committed to full support of all those
resolute peoples, everywhere, who are resisting aggression and are
thereby keeping war away from our Hemisphere. By this support, we
express our determination that the democratic cause shall prevail; and
we strengthen the defense and the security of our own nation.

Third, by an impressive expression of the public will and without regard
to partisanship, we are committed to the proposition that principles of
morality and considerations for our own security will never permit us to
acquiesce in a peace dictated by aggressors and sponsored by appeasers.
We know that enduring peace cannot be bought at the cost of other
people's freedom.

In the recent national election there was no substantial difference
between the two great parties in respect to that national policy. No
issue was fought out on this line before the American electorate. Today
it is abundantly evident that American citizens everywhere are demanding
and supporting speedy and complete action in recognition of obvious
danger.

Therefore, the immediate need is a swift and driving increase in our
armament production.

Leaders of industry and labor have responded to our summons. Goals of
speed have been set. In some cases these goals are being reached ahead
of time; in some cases we are on schedule; in other cases there are
slight but not serious delays; and in some cases--and I am sorry to say
very important cases--we are all concerned by the slowness of the
accomplishment of our plans.

The Army and Navy, however, have made substantial progress during the
past year. Actual experience is improving and speeding up our methods of
production with every passing day. And today's best is not good enough
for tomorrow.

I am not satisfied with the progress thus far made. The men in charge of
the program represent the best in training, in ability, and in
patriotism. They are not satisfied with the progress thus far made. None
of us will be satisfied until the job is done.

No matter whether the original goal was set too high or too low, our
objective is quicker and better results. To give you two illustrations:

We are behind schedule in turning out finished airplanes; we are working
day and night to solve the innumerable problems and to catch up.

We are ahead of schedule in building warships but we are working to get
even further ahead of that schedule.

To change a whole nation from a basis of peacetime production of
implements of peace to a basis of wartime production of implements of
war is no small task. And the greatest difficulty comes at the beginning
of the program, when new tools, new plant facilities, new assembly
lines, and new ship ways must first be constructed before the actual
materiel begins to flow steadily and speedily from them.

The Congress, of course, must rightly keep itself informed at all times
of the progress of the program. However, there is certain information,
as the Congress itself will readily recognize, which, in the interests
of our own security and those of the nations that we are supporting,
must of needs be kept in confidence.

New circumstances are constantly begetting new needs for our safety. I
shall ask this Congress for greatly increased new appropriations and
authorizations to carry on what we have begun.

I also ask this Congress for authority and for funds sufficient to
manufacture additional munitions and war supplies of many kinds, to be
turned over to those nations which are now in actual war with aggressor
nations.

Our most useful and immediate role is to act as an arsenal for them as
well as for ourselves. They do not need man power, but they do need
billions of dollars worth of the weapons of defense.

The time is near when they will not be able to pay for them all in ready
cash. We cannot, and we will not, tell them that they must surrender,
merely because of present inability to pay for the weapons which we know
they must have.

I do not recommend that we make them a loan of dollars with which to pay
for these weapons--a loan to be repaid in dollars.

I recommend that we make it possible for those nations to continue to
obtain war materials in the United States, fitting their orders into our
own program. Nearly all their materiel would, if the time ever came, be
useful for our own defense.

Taking counsel of expert military and naval authorities, considering
what is best for our own security, we are free to decide how much should
be kept here and how much should be sent abroad to our friends who by
their determined and heroic resistance are giving us time in which to
make ready our own defense.

For what we send abroad, we shall be repaid within a reasonable time
following the close of hostilities, in similar materials, or, at our
option, in other goods of many kinds, which they can produce and which
we need.

Let us say to the democracies: "We Americans are vitally concerned in
your defense of freedom. We are putting forth our energies, our
resources and our organizing powers to give you the strength to regain
and maintain a free world. We shall send you, in ever-increasing
numbers, ships, planes, tanks, guns. This is our purpose and our
pledge."

In fulfillment of this purpose we will not be intimidated by the threats
of dictators that they will regard as a breach of international law or
as an act of war our aid to the democracies which dare to resist their
aggression. Such aid is not an act of war, even if a dictator should
unilaterally proclaim it so to be.

When the dictators, if the dictators, are ready to make war upon us,
they will not wait for an act of war on our part. They did not wait for
Norway or Belgium or the Netherlands to commit an act of war.

Their only interest is in a new one-way international law, which lacks
mutuality in its observance, and, therefore, becomes an instrument of
oppression.

The happiness of future generations of Americans may well depend upon
how effective and how immediate we can make our aid felt. No one can
tell the exact character of the emergency situations that we may be
called upon to meet. The Nation's hands must not be tied when the
Nation's life is in danger.

We must all prepare to make the sacrifices that the emergency--almost as
serious as war itself--demands. Whatever stands in the way of speed and
efficiency in defense preparations must give way to the national need.

A free nation has the right to expect full cooperation from all groups.
A free nation has the right to look to the leaders of business, of
labor, and of agriculture to take the lead in stimulating effort, not
among other groups but within their own groups.

The best way of dealing with the few slackers or trouble makers in our
midst is, first, to shame them by patriotic example, and, if that fails,
to use the sovereignty of Government to save Government.

As men do not live by bread alone, they do not fight by armaments alone.
Those who man our defenses, and those behind them who build our
defenses, must have the stamina and the courage which come from
unshakable belief in the manner of life which they are defending. The
mighty action that we are calling for cannot be based on a disregard of
all things worth fighting for.

The Nation takes great satisfaction and much strength from the things
which have been done to make its people conscious of their individual
stake in the preservation of democratic life in America. Those things
have toughened the fibre of our people, have renewed their faith and
strengthened their devotion to the institutions we make ready to
protect.

Certainly this is no time for any of us to stop thinking about the
social and economic problems which are the root cause of the social
revolution which is today a supreme factor in the world.

For there is nothing mysterious about the foundations of a healthy and
strong democracy. The basic things expected by our people of their
political and economic systems are simple. They are:

Equality of opportunity for youth and for others.

Jobs for those who can work.

Security for those who need it.

The ending of special privilege for the few.

The preservation of civil liberties for all.

The enjoyment of the fruits of scientific progress in a wider and
constantly rising standard of living.

These are the simple, basic things that must never be lost sight of in
the turmoil and unbelievable complexity of our modern world. The inner
and abiding strength of our economic and political systems is dependent
upon the degree to which they fulfill these expectations.

Many subjects connected with our social economy call for immediate
improvement.

As examples:

We should bring more citizens under the coverage of old-age pensions and
unemployment insurance.

We should widen the opportunities for adequate medical care.

We should plan a better system by which persons deserving or needing
gainful employment may obtain it.

I have called for personal sacrifice. I am assured of the willingness of
almost all Americans to respond to that call.

A part of the sacrifice means the payment of more money in taxes. In my
Budget Message I shall recommend that a greater portion of this great
defense program be paid for from taxation than we are paying today. No
person should try, or be allowed, to get rich out of this program; and
the principle of tax payments in accordance with ability to pay should
be constantly before our eyes to guide our legislation.

If the Congress maintains these principles, the voters, putting
patriotism ahead of pocketbooks, will give you their applause.

In the future days, which we seek to make secure, we look forward to a
world founded upon four essential human freedoms.

The first is freedom of speech and expression--everywhere in the world.

The second is freedom of every person to worship God in his own
way--everywhere in the world.

The third is freedom from want--which, translated into world terms,
means economic understandings which will secure to every nation a
healthy peacetime life for its inhabitants--everywhere in the world.

The fourth is freedom from fear--which, translated into world terms,
means a world-wide reduction of armaments to such a point and in such a
thorough fashion that no nation will be in a position to commit an act
of physical aggression against any neighbor--anywhere in the world.

That is no vision of a distant millennium. It is a definite basis for a
kind of world attainable in our own time and generation. That kind of
world is the very antithesis of the so-called new order of tyranny which
the dictators seek to create with the crash of a bomb.

To that new order we oppose the greater conception--the moral order. A
good society is able to face schemes of world domination and foreign
revolutions alike without fear.

Since the beginning of our American history, we have been engaged in
change--in a perpetual peaceful revolution--a revolution which goes on
steadily, quietly adjusting itself to changing conditions--without the
concentration camp or the quick-lime in the ditch. The world order which
we seek is the cooperation of free countries, working together in a
friendly, civilized society.

This nation has placed its destiny in the hands and heads and hearts of
its millions of free men and women; and its faith in freedom under the
guidance of God. Freedom means the supremacy of human rights everywhere.
Our support goes to those who struggle to gain those rights or keep
them. Our strength is our unity of purpose. To that high concept there
can be no end save victory.

***

State of the Union Address
Franklin D. Roosevelt
January 6, 1942

In fulfilling my duty to report upon the State of the Union, I am proud
to say to you that the spirit of the American people was never higher
than it is today--the Union was never more closely knit together--this
country was never more deeply determined to face the solemn tasks before
it.

The response of the American people has been instantaneous, and it will
be sustained until our security is assured.

Exactly one year ago today I said to this Congress: "When the dictators.
. . are ready to make war upon us, they will not wait for an act of war
on our part. . . . They--not we--will choose the time and the place and
the method of their attack."

We now know their choice of the time: a peaceful Sunday
morning--December 7, 1941.

We know their choice of the place: an American outpost in the Pacific.

We know their choice of the method: the method of Hitler himself.

Japan's scheme of conquest goes back half a century. It was not merely a
policy of seeking living room: it was a plan which included the
subjugation of all the peoples in the Far East and in the islands of the
Pacific, and the domination of that ocean by Japanese military and naval
control of the western coasts of North, Central, and South America.

The development of this ambitious conspiracy was marked by the war
against China in 1894; the subsequent occupation of Korea; the war
against Russia in 1904; the illegal fortification of the mandated
Pacific islands following 1920; the seizure of Manchuria in 1931; and
the invasion of China in 1937.

A similar policy of criminal conquest was adopted by Italy. The Fascists
first revealed their imperial designs in Libya and Tripoli. In 1935 they
seized Abyssinia. Their goal was the domination of all North Africa,
Egypt, parts of France, and the entire Mediterranean world.

But the dreams of empire of the Japanese and Fascist leaders were modest
in comparison with the gargantuan aspirations of Hitler and his Nazis.
Even before they came to power in 1933, their plans for that conquest
had been drawn. Those plans provided for ultimate domination, not of any
one section of the world, but of the whole earth and all the oceans on
it.

When Hitler organized his Berlin-Rome-Tokyo alliance, all these plans of
conquest became a single plan. Under this, in addition to her own
schemes of conquest, Japan's role was obviously to cut off our supply of
weapons of war to Britain, and Russia and China--weapons which
increasingly were speeding the day of Hitler's doom. The act of Japan at
Pearl Harbor was intended to stun us--to terrify us to such an extent
that we would divert our industrial and military strength to the Pacific
area, or even to our own continental defense.

The plan has failed in its purpose. We have not been stunned. We have
not been terrified or confused. This very reassembling of the
Seventy-seventh Congress today is proof of that; for the mood of quiet,
grim resolution which here prevails bodes ill for those who conspired
and collaborated to murder world peace.

That mood is stronger than any mere desire for revenge. It expresses the
will of the American people to make very certain that the world will
never so suffer again.

Admittedly, we have been faced with hard choices. It was bitter, for
example, not to be able to relieve the heroic and historic defenders of
Wake Island. It was bitter for us not to be able to land a million men
in a thousand ships in the Philippine Islands.

But this adds only to our determination to see to it that the Stars and
Stripes will fly again over Wake and Guam. Yes, see to it that the brave
people of the Philippines will be rid of Japanese imperialism; and will
live in freedom, security, and independence.

Powerful and offensive actions must and will be taken in proper time.
The consolidation of the United Nations' total war effort against our
common enemies is being achieved.

That was and is the purpose of conferences which have been held during
the past two weeks in Washington, and Moscow and Chungking. That is the
primary objective of the declaration of solidarity signed in Washington
on January 1, 1942, by 26 Nations united against the Axis powers.

Difficult choices may have to be made in the months to come. We do not
shrink from such decisions. We and those united with us will make those
decisions with courage and determination.

Plans have been laid here and in the other capitals for coordinated and
cooperative action by all the United Nations--military action and
economic action. Already we have established, as you know, unified
command of land, sea, and air forces in the southwestern Pacific theater
of war. There will be a continuation of conferences and consultations
among military staffs, so that the plans and operations of each will fit
into the general strategy designed to crush the enemy. We shall not
fight isolated wars--each Nation going its own way. These 26 Nations are
united--not in spirit and determination alone, but in the broad conduct
of the war in all its phases.

For the first time since the Japanese and the Fascists and the Nazis
started along their blood-stained course of conquest they now face the
fact that superior forces are assembling against them. Gone forever are
the days when the aggressors could attack and destroy their victims one
by one without unity of resistance. We of the United Nations will so
dispose our forces that we can strike at the common enemy wherever the
greatest damage can be done him.

The militarists of Berlin and Tokyo started this war. But the massed,
angered forces of common humanity will finish it.

Destruction of the material and spiritual centers of civilization--this
has been and still is the purpose of Hitler and his Italian and Japanese
chessmen. They would wreck the power of the British Commonwealth and
Russia and China and the Netherlands--and then combine all their forces
to achieve their ultimate goal, the conquest of the United States.

They know that victory for us means victory for freedom.

They know that victory for us means victory for the institution of
democracy--the ideal of the family, the simple principles of common
decency and humanity.

They know that victory for us means victory for religion. And they could
not tolerate that. The world is too small to provide adequate "living
room" for both Hitler and God. In proof of that, the Nazis have now
announced their plan for enforcing their new German, pagan religion all
over the world--a plan by which the Holy Bible and the Cross of Mercy
would be displaced by Mein Kampf and the swastika and the naked sword.

Our own objectives are clear; the objective of smashing the militarism
imposed by war lords upon their enslaved peoples the objective of
liberating the subjugated Nations--the objective of establishing and
securing freedom of speech, freedom of religion, freedom from want, and
freedom from fear everywhere in the world.

We shall not stop short of these objectives--nor shall we be satisfied
merely to gain them and then call it a day. I know that I speak for the
American people--and I have good reason to believe that I speak also for
all the other peoples who fight with us--when I say that this time we
are determined not only to win the war, but also to maintain the
security of the peace that will follow.

But we know that modern methods of warfare make it a task, not only of
shooting and fighting, but an even more urgent one of working and
producing.

Victory requires the actual weapons of war and the means of transporting
them to a dozen points of combat.

It will not be sufficient for us and the other United Nations to produce
a slightly superior supply of munitions to that of Germany, Japan,
Italy, and the stolen industries in the countries which they have
overrun.

The superiority of the United Nations in munitions and ships must be
overwhelming--so overwhelming that the Axis Nations can never hope to
catch up with it. And so, in order to attain this overwhelming
superiority the United States must build planes and tanks and guns and
ships to the utmost limit of our national capacity. We have the ability
and capacity to produce arms not only for our own forces, but also for
the armies, navies, and air forces fighting on our side.

And our overwhelming superiority of armament must be adequate to put
weapons of war at the proper time into the hands of those men in the
conquered Nations who stand ready to seize the first opportunity to
revolt against their German and Japanese oppressors, and against the
traitors in their own ranks, known by the already infamous name of
"Quislings." And I think that it is a fair prophecy to say that, as we
get guns to the patriots in those lands, they too will fire shots heard
'round the world.

This production of ours in the United States must be raised far above
present levels, even though it will mean the dislocation of the lives
and occupations of millions of our own people. We must raise our sights
all along the production line. Let no man say it cannot be done. It must
be done--and we have undertaken to do it.

I have just sent a letter of directive to the appropriate departments
and agencies of our Government, ordering that immediate steps be taken:

First, to increase our production rate of airplanes so rapidly that in
this year, 1942, we shall produce 60,000 planes, 10,000 more than the
goal that we set a year and a half ago. This includes 45,000 combat
planes--bombers, dive bombers, pursuit planes. The rate of increase will
be maintained and continued so that next year, 1943, we shall produce
125,000 airplanes, including 100,000 combat planes.

Second, to increase our production rate of tanks so rapidly that in this
year, 1942, we shall produce 45,000 tanks; and to continue that increase
so that next year, 1943, we shall produce 75,000 tanks.

Third, to increase our production rate of anti-aircraft guns so rapidly
that in this year, 1942, we shall produce 20,000 of them; and to
continue that increase so that next year, 1943, we shall produce 35,000
anti-aircraft guns.

And fourth, to increase our production rate of merchant ships so rapidly
that in this year, 1942, we shall build 6,000,000 deadweight tons as
compared with a 1941 completed production of 1,100,000. And finally, we
shall continue that increase so that next year, 1943, we shall build
10,000,000 tons of shipping.

These figures and similar figures for a multitude of other implements of
war will give the Japanese and the Nazis a little idea of just what they
accomplished in the attack at Pearl Harbor.

And I rather hope that all these figures which I have given will become
common knowledge in Germany and Japan.

Our task is hard--our task is unprecedented--and the time is short. We
must strain every existing armament-producing facility to the utmost. We
must convert every available plant and tool to war production. That goes
all the way from the greatest plants to the smallest--from the huge
automobile industry to the village machine shop.

Production for war is based on men and women--the human hands and brains
which collectively we call Labor. Our workers stand ready to work long
hours; to turn out more in a day's work; to keep the wheels turning and
the fires burning twenty-four hours a day, and seven days a week. They
realize well that on the speed and efficiency of their work depend the
lives of their sons and their brothers on the fighting fronts.

Production for war is based on metals and raw materials--steel, copper,
rubber, aluminum, zinc, tin. Greater and greater quantities of them will
have to be diverted to war purposes. Civilian use of them will have to
be cut further and still further--and, in many cases, completely
eliminated.

War costs money. So far, we have hardly even begun to pay for it. We
have devoted only 15 percent of our national income to national defense.
As will appear in my Budget Message tomorrow, our war program for the
coming fiscal year will cost 56 billion dollars or, in other words, more
than half of the estimated annual national income. That means taxes and
bonds and bonds and taxes. It means cutting luxuries and other
non-essentials. In a word, it means an "all-out" war by individual
effort and family effort in a united country.

Only this all-out scale of production will hasten the ultimate all-out
victory. Speed will count. Lost ground can always be regained--lost time
never. Speed will save lives; speed will save this Nation which is in
peril; speed will save our freedom and our civilization--and slowness
has never been an American characteristic.

As the United States goes into its full stride, we must always be on
guard against misconceptions which will arise, some of them naturally,
or which will be planted among us by our enemies.

We must guard against complacency. We must not underrate the enemy. He
is powerful and cunning--and cruel and ruthless. He will stop at nothing
that gives him a chance to kill and to destroy. He has trained his
people to believe that their highest perfection is achieved by waging
war. For many years he has prepared for this very conflict--planning,
and plotting, and training, arming, and fighting. We have already tasted
defeat. We may suffer further setbacks. We must face the fact of a hard
war, a long war, a bloody war, a costly war.

We must, on the other hand, guard against defeatism. That has been one
of the chief weapons of Hitler's propaganda machine--used time and again
with deadly results. It will not be used successfully on the American
people.

We must guard against divisions among ourselves and among all the other
United Nations. We must be particularly vigilant against racial
discrimination in any of its ugly forms. Hitler will try again to breed
mistrust and suspicion between one individual and another, one group and
another, one race and another, one Government and another. He will try
to use the same technique of falsehood and rumor-mongering with which he
divided France from Britain. He is trying to do this with us even now.
But he will find a unity of will and purpose against him, which will
persevere until the destruction of all his black designs upon the
freedom and safety of the people of the world.

We cannot wage this war in a defensive spirit. As our power and our
resources are fully mobilized, we shall carry the attack against the
enemy--we shall hit him and hit him again wherever and whenever we can
reach him.

We must keep him far from our shores, for we intend to bring this battle
to him on his own home grounds.

American armed forces must be used at any place in all the world where
it seems advisable to engage the forces of the enemy. In some cases
these operations will be defensive, in order to protect key positions.
In other cases, these operations will be offensive, in order to strike
at the common enemy, with a view to his complete encirclement and
eventual total defeat.

American armed forces will operate at many points in the Far East.

American armed forces will be on all the oceans--helping to guard the
essential communications which are vital to the United Nations.

American land and air and sea forces will take stations in the British
Isles--which constitute an essential fortress in this great world
struggle.

American armed forces will help to protect this hemisphere--and also
help to protect bases outside this hemisphere, which could be used for
an attack on the Americas.

If any of our enemies, from Europe or from Asia, attempt long-range
raids by "suicide" squadrons of bombing planes, they will do so only in
the hope of terrorizing our people and disrupting our morale. Our people
are not afraid of that. We know that we may have to pay a heavy price
for freedom. We will pay this price with a will. Whatever the price, it
is a thousand times worth it. No matter what our enemies, in their
desperation, may attempt to do to us--we will say, as the people of
London have said, "We can take it." And what's more we can give it back
and we will give it back--with compound interest.

When our enemies challenged our country to stand up and fight, they
challenged each and every one of us. And each and every one of us has
accepted the challenge--for himself and for his Nation.

There were only some 400 United States Marines who in the heroic and
historic defense of Wake Island inflicted such great losses on the
enemy. Some of those men were killed in action; and others are now
prisoners of war. When the survivors of that great fight are liberated
and restored to their homes, they will learn that a hundred and thirty
million of their fellow citizens have been inspired to render their own
full share of service and sacrifice.

We can well say that our men on the fighting fronts have already proved
that Americans today are just as rugged and just as tough as any of the
heroes whose exploits we celebrate on the Fourth of July.

Many people ask, "When will this war end?" There is only one answer to
that. It will end just as soon as we make it end, by our combined
efforts, our combined strength, our combined determination to fight
through and work through until the end--the end of militarism in Germany
and Italy and Japan. Most certainly we shall not settle for less.

That is the spirit in which discussions have been conducted during the
visit of the British Prime Minister to Washington. Mr. Churchill and I
understand each other, our motives and our purposes. Together, during
the past two weeks, we have faced squarely the major military and
economic problems of this greatest world war.

All in our Nation have been cheered by Mr. Churchill's visit. We have
been deeply stirred by his great message to us. He is welcome in our
midst, and we unite in wishing him a safe return to his home.

For we are fighting on the same side with the British people, who fought
alone for long, terrible months, and withstood the enemy with fortitude
and tenacity and skill.

We are fighting on the same side with the Russian people who have seen
the Nazi hordes swarm up to the very gates of Moscow, and who with
almost superhuman will and courage have forced the invaders back into
retreat.

We are fighting on the same side as the brave people of China--those
millions who for four and a half long years have withstood bombs and
starvation and have whipped the invaders time and again in spite of the
superior Japanese equipment and arms. Yes, we are fighting on the same
side as the indomitable Dutch. We are fighting on the same side as all
the other Governments in exile, whom Hitler and all his armies and all
his Gestapo have not been able to conquer.

But we of the United Nations are not making all this sacrifice of human
effort and human lives to return to the kind of world we had after the
last world war.

We are fighting today for security, for progress, and for peace, not
only for ourselves but for all men, not only for one generation but for
all generations. We are fighting to cleanse the world of ancient evils,
ancient ills.

Our enemies are guided by brutal cynicism, by unholy contempt for the
human race. We are inspired by a faith that goes back through all the
years to the first chapter of the Book of Genesis: "God created man in
His own image."

We on our side are striving to be true to that divine heritage. We are
fighting, as our fathers have fought, to uphold the doctrine that all
men are equal in the sight of God. Those on the other side are striving
to destroy this deep belief and to create a world in their own image--a
world of tyranny and cruelty and serfdom.

That is the conflict that day and night now pervades our lives.

No compromise can end that conflict. There never has been--there never
can be--successful compromise between good and evil. Only total victory
can reward the champions of tolerance, and decency, and freedom, and
faith.

***

State of the Union Address
Franklin D. Roosevelt
January 7, 1943

Mr. Vice President, Mr. Speaker, Members of the Seventy-eighth Congress:

This Seventy-eighth Congress assembles in one of the great moments in
the history of the Nation. The past year was perhaps the most crucial
for modern civilization; the coming year will be filled with violent
conflicts-- yet with high promise of better things.

We must appraise the events of 1942 according to their relative
importance; we must exercise a sense of proportion.

First in importance in the American scene has been the inspiring proof
of the great qualities of our fighting men. They have demonstrated these
qualities in adversity as well as in victory. As long as our flag flies
over this Capitol, Americans will honor the soldiers, sailors, and
marines who fought our first battles of this war against overwhelming
odds the heroes, living and dead, of Wake and Bataan and Guadalcanal, of
the Java Sea and Midway and the North Atlantic convoys. Their
unconquerable spirit will live forever.

By far the largest and most important developments in the whole
world-wide strategic picture of 1942 were the events of the long fronts
in Russia: first, the implacable defense of Stalingrad; and, second, the
offensives by the Russian armies at various points that started in the
latter part of November and which still roll on with great force and
effectiveness.

The other major events of the year were: the series of Japanese advances
in the Philippines, the East Indies, Malaya, and Burma; the stopping of
that Japanese advance in the mid-Pacific, the South Pacific, and the
Indian Oceans; the successful defense of the Near East by the British
counterattack through Egypt and Libya; the American-British occupation
of North Africa. Of continuing importance in the year 1942 were the
unending and bitterly contested battles of the convoy routes, and the
gradual passing of air superiority from the Axis to the United Nations.

The Axis powers knew that they must win the war in 1942--or eventually
lose everything. I do not need to tell you that our enemies did not win
the war in 1942.

In the Pacific area, our most important victory in 1942 was the air and
naval battle off Midway Island. That action is historically important
because it secured for our use communication lines stretching thousands
of miles in every direction. In placing this emphasis on the Battle of
Midway, I am not unmindful of other successful actions in the Pacific,
in the air and on land and afloat--especially those on the Coral Sea and
New Guinea and in the Solomon Islands. But these actions were
essentially defensive. They were part of the delaying strategy that
characterized this phase of the war.

During this period we inflicted steady losses upon the enemy--great
losses of Japanese planes and naval vessels, transports and cargo ships.
As early as one year ago, we set as a primary task in the war of the
Pacific a day-by-day and week-by-week and month-by-month destruction of
more Japanese war materials than Japanese industry could replace. Most
certainly, that task has been and is being performed by our fighting
ships and planes. And a large part of this task has been accomplished by
the gallant crews of our American submarines who strike on the other
side of the Pacific at Japanese ships--right up at the very mouth of the
harbor of Yokohama.

We know that as each day goes by, Japanese strength in ships and planes
is going down and down, and American strength in ships and planes is
going up and up. And so I sometimes feel that the eventual outcome can
now be put on a mathematical basis. That will become evident to the
Japanese people themselves when we strike at their own home islands, and
bomb them constantly from the air.

And in the attacks against Japan, we shall be joined with the heroic
people of China--that great people whose ideals of peace are so closely
akin to our own. Even today we are flying as much lend-lease material
into China as ever traversed the Burma Road, flying it over mountains
17,000 feet high, flying blind through sleet and snow. We shall overcome
all the formidable obstacles, and get the battle equipment into China to
shatter the power of our common enemy. From this war, China will realize
the security, the prosperity and the dignity, which Japan has sought so
ruthlessly to destroy.

The period of our defensive attrition in the Pacific is drawing to a
close. Now our aim is to force the Japanese to fight. Last year, we
stopped them. This year, we intend to advance.

Turning now to the European theater of war, during this past year it was
clear that our first task was to lessen the concentrated pressure on the
Russian front by compelling Germany to divert part of her manpower and
equipment to another theater of war. After months of secret planning and
preparation in the utmost detail, an enormous amphibious expedition was
embarked for French North Africa from the United States and the United
Kingdom in literally hundreds of ships. It reached its objectives with
very small losses, and has already produced an important effect upon the
whole situation of the war. It has opened to attack what Mr. Churchill
well described as "the under-belly of the Axis," and it has removed the
always dangerous threat of an Axis attack through West Africa against
the South Atlantic Ocean and the continent of South America itself.

The well-timed and splendidly executed offensive from Egypt by the
British Eighth Army was a part of the same major strategy of the United
Nations.

Great rains and appalling mud and very limited communications have
delayed the final battles of Tunisia. The Axis is reinforcing its strong
positions. But I am confident that though the fighting will be tough,
when the final Allied assault is made, the last vestige of Axis power
will be driven from the whole of the south shores of the Mediterranean.

Any review of the year 1942 must emphasize the magnitude and the
diversity of the military activities in which this Nation has become
engaged. As I speak to you, approximately one and a half million of our
soldiers, sailors, marines, and fliers are in service outside of our
continental limits, all through the world. Our merchant seamen, in
addition, are carrying supplies to them and to our allies over every sea
lane.

Few Americans realize the amazing growth of our air strength, though I
am sure our enemy does. Day in and day out our forces are bombing the
enemy and meeting him in combat on many different fronts in every part
of the world. And for those who question the quality of our aircraft and
the ability of our fliers, I point to the fact that, in Africa, we are
shooting down two enemy planes to every one we lose, and in the Pacific
and the Southwest Pacific we are shooting them down four to one.

We pay great tribute--the tribute of the United States of America--to
the fighting men of Russia and China and Britain and the various members
of the British Commonwealth--the millions of men who through the years
of this war have fought our common enemies, and have denied to them the
world conquest which they sought.

We pay tribute to the soldiers and fliers and seamen of others of the
United Nations whose countries have been overrun by Axis hordes.

As a result of the Allied occupation of North Africa, powerful units of
the French Army and Navy are going into action. They are in action with
the United Nations forces. We welcome them as allies and as friends.
They join with those Frenchmen who, since the dark days of June, 1940,
have been fighting valiantly for the liberation of their stricken
country.

We pay tribute to the fighting leaders of our allies, to Winston
Churchill, to Joseph Stalin, and to the Generalissimo Chiang Kai-shek.
Yes, there is a very great unanimity between the leaders of the United
Nations. This unity is effective in planning and carrying out the major
strategy of this war and in building up and in maintaining the lines of
supplies.

I cannot prophesy. I cannot tell you when or where the United Nations
are going to strike next in Europe. But we are going to strike--and
strike hard. I cannot tell you whether we are going to hit them in
Norway, or through the Low Countries, or in France, or through Sardinia
or Sicily, or through the Balkans, or through Poland--or at several
points simultaneously. But I can tell you that no matter where and when
we strike by land, we and the British and the Russians will hit them
from the air heavily and relentlessly. Day in and day out we shall heap
tons upon tons of high explosives on their war factories and utilities
and seaports.

Hitler and Mussolini will understand now the enormity of their
miscalculations--that the Nazis would always have the advantage of
superior air power as they did when they bombed Warsaw, and Rotterdam,
and London and Coventry. That superiority has gone--forever.

Yes, the Nazis and the Fascists have asked for it--and they are going to
get it.

Our forward progress in this war has depended upon our progress on the
production front.

There has been criticism of the management and conduct of our war
production. Much of this self-criticism has had a healthy effect. It has
spurred us on. It has reflected a normal American impatience to get on
with the job. We are the kind of people who are never quite satisfied
with anything short of miracles.

But there has been some criticism based on guesswork and even on
malicious falsification of fact. Such criticism creates doubts and
creates fears, and weakens our total effort.

I do not wish to suggest that we should be completely satisfied with our
production progress today, or next month, or ever. But I can report to
you with genuine pride on what has been accomplished in 1942.

A year ago we set certain production goals for 1942 and for 1943. Some
people, including some experts, thought that we had pulled some big
figures out of a hat just to frighten the Axis. But we had confidence in
the ability of our people to establish new records. And that confidence
has been justified.

Of course, we realized that some production objectives would have to be
changed--some of them adjusted upward, and others downward; some items
would be taken out of the program altogether, and others added. This was
inevitable as we gained battle experience, and as technological
improvements were made.

Our 1942 airplane production and tank production fell short,
numerically--stress the word numerically of the goals set a year ago.
Nevertheless, we have plenty of reason to be proud of our record for
1942. We produced 48,000 military planes--more than the airplane
production of Germany, Italy, and Japan put together. Last month, in
December, we produced 5,500 military planes and the rate is rapidly
rising. Furthermore, we must remember that as each month passes by, the
averages of our types weigh more, take more man-hours to make, and have
more striking power.

In tank production, we revised our schedule--and for good and sufficient
reasons. As a result of hard experience in battle, we have diverted a
portion of our tank-producing capacity to a stepped-up production of
new, deadly field weapons, especially self-propelled artillery.

Here are some other production figures:

In 1942, we produced 56,000 combat vehicles, such as tanks and
self-propelled artillery.

In 1942, we produced 670,000 machine guns, six times greater than our
production in 1941 and three times greater than our total production
during the year and a half of our participation in the first World War.

We produced 21,000 anti-tank guns, six times greater than our 1941
production.

We produced ten and a quarter billion rounds of small-arms ammunition,
five times greater than our 1941 production and three times greater than
our total production in the first World War.

We produced 181 million rounds of artillery ammunition, twelve times
greater than our 1941 production and ten times greater than our total
production in the first World War.

I think the arsenal of democracy is making good.

These facts and figures that I have given will give no great aid and
comfort to the enemy. On the contrary, I can imagine that they will give
him considerable discomfort. I suspect that Hitler and Tojo will find it
difficult to explain to the German and Japanese people just why it is
that "decadent, inefficient democracy" can produce such phenomenal
quantities of weapons and munitions--and fighting men.

We have given the lie to certain misconceptions--which is an extremely
polite word--especially the one which holds that the various blocs or
groups within a free country cannot forego their political and economic
differences in time of crisis and work together toward a common goal.

While we have been achieving this miracle of production, during the past
year our armed forces have grown from a little over 2,000,000 to
7,000,000. In other words, we have withdrawn from the labor force and
the farms some 5,000,000 of our younger workers. And in spite of this,
our farmers have contributed their share to the common effort by
producing the greatest quantity of food ever made available during a
single year in all our history.

I wonder is there any person among us so simple as to believe that all
this could have been done without creating some dislocations in our
normal national life, some inconveniences, and even some hardships?

Who can have hoped to have done this without burdensome Government
regulations which are a nuisance to everyone--including those who have
the thankless task of administering them?

We all know that there have been mistakes--mistakes due to the
inevitable process of trial and error inherent in doing big things for
the first time. We all know that there have been too many complicated
forms and questionnaires. I know about that. I have had to fill some of
them out myself.

But we are determined to see to it that our supplies of food and other
essential civilian goods are distributed on a fair and just basis--to
rich and poor, management and labor, farmer and city dweller alike. We
are determined to keep the cost of living at a stable level. All this
has required much information. These forms and questionnaires represent
an honest and sincere attempt by honest and sincere officials to obtain
this information.

We have learned by the mistakes that we have made.

Our experience will enable us during the coming year to improve the
necessary mechanisms of wartime economic controls, and to simplify
administrative procedures. But we do not intend to leave things so lax
that loopholes will be left for cheaters, for chiselers, or for the
manipulators of the black market.

Of course, there have been disturbances and inconveniences--and even
hardships. And there will be many, many more before we finally win. Yes,
1943 will not be an easy year for us on the home front. We shall feel in
many ways in our daily lives the sharp pinch of total war.

Fortunately, there are only a few Americans who place appetite above
patriotism. The overwhelming majority realize that the food we send
abroad is for essential military purposes, for our own and Allied
fighting forces, and for necessary help in areas that we occupy.

We Americans intend to do this great job together. In our common labors
we must build and fortify the very foundation of national
unity--confidence in one another.

It is often amusing, and it is sometimes politically profitable, to
picture the City of Washington as a madhouse, with the Congress and the
Administration disrupted with confusion and indecision and general
incompetence.

However--what matters most in war is results. And the one pertinent fact
is that after only a few years of preparation and only one year of
warfare, we are able to engage, spiritually as well as physically, in
the total waging of a total war.

Washington may be a madhouse--but only in the sense that it is the
Capital City of a Nation which is fighting mad. And I think that Berlin
and Rome and Tokyo, which had such contempt for the obsolete methods of
democracy, would now gladly use all they could get of that same brand of
madness.

And we must not forget that our achievements in production have been
relatively no greater than those of the Russians and the British and the
Chinese who have developed their own war industries under the incredible
difficulties of battle conditions. They have had to continue work
through bombings and blackouts. And they have never quit.

We Americans are in good, brave company in this war, and we are playing
our own, honorable part in the vast common effort.

As spokesmen for the United States Government, you and I take off our
hats to those responsible for our American production--to the owners,
managers, and supervisors, to the draftsmen and the engineers, and to
the workers-- men and women--in factories and arsenals and shipyards and
mines and mills and forests--and railroads and on highways.

We take off our hats to the farmers who have faced an unprecedented task
of feeding not only a great Nation but a great part of the world.

We take off our hats to all the loyal, anonymous, untiring men and women
who have worked in private employment and in Government and who have
endured rationing and other stringencies with good humor and good will.

Yes, we take off our hats to all Americans who have contributed so
magnificently to our common cause.

I have sought to emphasize a sense of proportion in this review of the
events of the war and the needs of the war.

We should never forget the things we are fighting for. But, at this
critical period of the war, we should confine ourselves to the larger
objectives and not get bogged down in argument over methods and details.

We, and all the United Nations, want a decent peace and a durable peace.
In the years between the end of the first World War and the beginning of
the second World War, we were not living under a decent or a durable
peace.

I have reason to know that our boys at the front are concerned with two
broad aims beyond the winning of the war; and their thinking and their
opinion coincide with what most Americans here back home are mulling
over. They know, and we know, that it would be inconceivable--it would,
indeed, be sacrilegious--if this Nation and the world did not attain
some real, lasting good out of all these efforts and sufferings and
bloodshed and death.

The men in our armed forces want a lasting peace, and, equally, they
want permanent employment for themselves, their families, and their
neighbors when they are mustered out at the end of the war.

Two years ago I spoke in my Annual Message of four freedoms. The
blessings of two of them--freedom of speech and freedom of religion--are
an essential part of the very life of this Nation; and we hope that
these blessings will be granted to all men everywhere.

'The people at home, and the people at the front, are wondering a little
about the third freedom--freedom from want. To them it means that when
they are mustered out, when war production is converted to the economy
of peace, they will have the right to expect full employment--full
employment for themselves and for all able-bodied men and women in
America who want to work.

They expect the opportunity to work, to run their farms, their stores,
to earn decent wages. They are eager to face the risks inherent in our
system of free enterprise.

They do not want a postwar America which suffers from undernourishment
or slums--or the dole. They want no get-rich-quick era of bogus
"prosperity" which will end for them in selling apples on a street
corner, as happened after the bursting of the boom in 1929.

When you talk with our young men and our young women, you will find they
want to work for themselves and for their families; they consider that
they have the right to work; and they know that after the last war their
fathers did not gain that right.

When you talk with our young men and women, you will find that with the
opportunity for employment they want assurance against the evils of all
major economic hazards--assurance that will extend from the cradle to
the grave. And this great Government can and must provide this
assurance.

I have been told that this is no time to speak of a better America after
the war. I am told it is a grave error on my part.

I dissent.

And if the security of the individual citizen, or the family, should
become a subject of national debate, the country knows where I stand.

I say this now to this Seventy-eighth Congress, because it is wholly
possible that freedom from want--the right of employment, the right of
assurance against life's hazards--will loom very large as a task of
America during the coming two years.

I trust it will not be regarded as an issue--but rather as a task for
all of us to study sympathetically, to work out with a constant regard
for the attainment of the objective, with fairness to all and with
injustice to none.

In this war of survival we must keep before our minds not only the evil
things we fight against but the good things we are fighting for. We
fight to retain a great past--and we fight to gain a greater future.

Let us remember, too, that economic safety for the America of the future
is threatened unless a greater economic stability comes to the rest of
the world. We cannot make America an island in either a military or an
economic sense. Hitlerism, like any other form of crime or disease, can
grow from the evil seeds of economic as well as military feudalism.

Victory in this war is the first and greatest goal before us. Victory in
the peace is the next. That means striving toward the enlargement of the
security of man here and throughout the world--and, finally, striving
for the fourth freedom--freedom from fear.

It is of little account for any of us to talk of essential human needs,
of attaining security, if we run the risk of another World War in ten or
twenty or fifty years. That is just plain common sense. Wars grow in
size, in death and destruction, and in the inevitability of engulfing
all Nations, in inverse ratio to the shrinking size of the world as a
result of the conquest of the air. I shudder to think of what will
happen to humanity, including ourselves, if this war ends in an
inconclusive peace, and another war breaks out when the babies of today
have grown to fighting age.

Every normal American prays that neither he nor his sons nor his
grandsons will be compelled to go through this horror again.

Undoubtedly a few Americans, even now, think that this Nation can end
this war comfortably and then climb back into an American hole and pull
the hole in after them.

But we have learned that we can never dig a hole so deep that it would
be safe against predatory animals. We have also learned that if we do
not pull the fangs of the predatory animals of this world, they will
multiply and grow in strength--and they will be at our throats again
once more in a short generation.

Most Americans realize more clearly than ever before that modern war
equipment in the hands of aggressor Nations can bring danger overnight
to our own national existence or to that of any other Nation--or
island--or continent.

It is clear to us that if Germany and Italy and Japan--or any one of
them-- remain armed at the end of this war, or are permitted to rearm,
they will again, and inevitably, embark upon an ambitious career of
world conquest. They must be disarmed and kept disarmed, and they must
abandon the philosophy, and the teaching of that philosophy, which has
brought so much suffering to the world.

After the first World War we tried to achieve a formula for permanent
peace, based on a magnificent idealism. We failed. But, by our failure,
we have learned that we cannot maintain peace at this stage of human
development by good intentions alone.

Today the United Nations are the mightiest military coalition in all
history. They represent an overwhelming majority of the population of
the world. Bound together in solemn agreement that they themselves will
not commit acts of aggression or conquest against any of their
neighbors, the United Nations can and must remain united for the
maintenance of peace by preventing any attempt to rearm in Germany, in
Japan, in Italy, or in any other Nation which seeks to violate the Tenth
Commandment--"Thou shalt not covet."

There are cynics, there are skeptics who say it cannot be done. The
American people and all the freedom-loving peoples of this earth are now
demanding that it must be done. And the will of these people shall
prevail.

The very philosophy of the Axis powers is based on a profound contempt
for the human race. If, in the formation of our future policy, we were
guided by the same cynical contempt, then we should be surrendering to
the philosophy of our enemies, and our victory would turn to defeat.

The issue of this war is the basic issue between those who believe in
mankind and those who do not--the ancient issue between those who put
their faith in the people and those who put their faith in dictators and
tyrants. There have always been those who did not believe in the people,
who attempted to block their forward movement across history, to force
them back to servility and suffering and silence.

The people have now gathered their strength. They are moving forward in
their might and power--and no force, no combination of forces, no
trickery, deceit, or violence, can stop them now. They see before them
the hope of the world--a decent, secure, peaceful life for men
everywhere.

I do not prophesy when this war will end.

But I do believe that this year of 1943 will give to the United Nations
a very substantial advance along the roads that lead to Berlin and Rome
and Tokyo.

I tell you it is within the realm of possibility that this
Seventy-eighth Congress may have the historic privilege of helping
greatly to save the world from future fear.

Therefore, let us all have confidence, let us redouble our efforts.

A tremendous, costly, long-enduring task in peace as well as in war is
still ahead of us.

But, as we face that continuing task, we may know that the state of this
Nation is good--the heart of this Nation is sound--the spirit of this
Nation is strong--the faith of this Nation is eternal.

***

State of the Union Address
Franklin D. Roosevelt
January 11, 1944

To the Congress:

This Nation in the past two years has become an active partner in the
world's greatest war against human slavery.

We have joined with like-minded people in order to defend ourselves in a
world that has been gravely threatened with gangster rule.

But I do not think that any of us Americans can be content with mere
survival. Sacrifices that we and our allies are making impose upon us
all a sacred obligation to see to it that out of this war we and our
children will gain something better than mere survival.

We are united in determination that this war shall not be followed by
another interim which leads to new disaster--that we shall not repeat
the tragic errors of ostrich isolationism--that we shall not repeat the
excesses of the wild twenties when this Nation went for a joy ride on a
roller coaster which ended in a tragic crash.

When Mr. Hull went to Moscow in October, and when I went to Cairo and
Teheran in November, we knew that we were in agreement with our allies
in our common determination to fight and win this war. But there were
many vital questions concerning the future peace, and they were
discussed in an atmosphere of complete candor and harmony.

In the last war such discussions, such meetings, did not even begin
until the shooting had stopped and the delegates began to assemble at
the peace table. There had been no previous opportunities for man-to-man
discussions which lead to meetings of minds. The result was a peace
which was not a peace.

That was a mistake which we are not repeating in this war.

And right here I want to address a word or two to some suspicious souls
who are fearful that Mr. Hull or I have made "commitments" for the
future which might pledge this Nation to secret treaties, or to enacting
the role of Santa Claus.

To such suspicious souls--using a polite terminology--I wish to say that
Mr. Churchill, and Marshal Stalin, and Generalissimo Chiang Kai-shek are
all thoroughly conversant with the provisions of our Constitution. And
so is Mr. Hull. And so am I.

Of course we made some commitments. We most certainly committed
ourselves to very large and very specific military plans which require
the use of all Allied forces to bring about the defeat of our enemies at
the earliest possible time.

But there were no secret treaties or political or financial commitments.

The one supreme objective for the future, which we discussed for each
Nation individually, and for all the United Nations, can be summed up in
one word: Security.

And that means not only physical security which provides safety from
attacks by aggressors. It means also economic security, social security,
moral security--in a family of Nations.

In the plain down-to-earth talks that I had with the Generalissimo and
Marshal Stalin and Prime Minister Churchill, it was abundantly clear
that they are all most deeply interested in the resumption of peaceful
progress by their own peoples--progress toward a better life. All our
allies want freedom to develop their lands and resources, to build up
industry, to increase education and individual opportunity, and to raise
standards of living.

All our allies have learned by bitter experience that real development
will not be possible if they are to be diverted from their purpose by
repeated wars--or even threats of war.

China and Russia are truly united with Britain and America in
recognition of this essential fact:

The best interests of each Nation, large and small, demand that all
freedom-loving Nations shall join together in a just and durable system
of peace. In the present world situation, evidenced by the actions of
Germany, Italy, and Japan, unquestioned military control over disturbers
of the peace is as necessary among Nations as it is among citizens in a
community. And an equally basic essential to peace is a decent standard
of living for all individual men and women and children in all Nations.
Freedom from fear is eternally linked with freedom from want.

There are people who burrow through our Nation like unseeing moles, and
attempt to spread the suspicion that if other Nations are encouraged to
raise their standards of living, our own American standard of living
must of necessity be depressed.

The fact is the very contrary. It has been shown time and again that if
the standard of living of any country goes up, so does its purchasing
power-- and that such a rise encourages a better standard of living in
neighboring countries with whom it trades. That is just plain common
sense--and it is the kind of plain common sense that provided the basis
for our discussions at Moscow, Cairo, and Teheran.

Returning from my journeyings, I must confess to a sense of "let-down"
when I found many evidences of faulty perspective here in Washington.
The faulty perspective consists in overemphasizing lesser problems and
thereby underemphasizing the first and greatest problem.

The overwhelming majority of our people have met the demands of this war
with magnificent courage and understanding. They have accepted
inconveniences; they have accepted hardships; they have accepted tragic
sacrifices. And they are ready and eager to make whatever further
contributions are needed to win the war as quickly as possible--if only
they are given the chance to know what is required of them.

However, while the majority goes on about its great work without
complaint, a noisy minority maintains an uproar of demands for special
favors for special groups. There are pests who swarm through the lobbies
of the Congress and the cocktail bars of Washington, representing these
special groups as opposed to the basic interests of the Nation as a
whole. They have come to look upon the war primarily as a chance to make
profits for themselves at the expense of their neighbors--profits in
money or in terms of political or social preferment.

Such selfish agitation can be highly dangerous in wartime. It creates
confusion. It damages morale. It hampers our national effort. It muddies
the waters and therefore prolongs the war.

If we analyze American history impartially, we cannot escape the fact
that in our past we have not always forgotten individual and selfish and
partisan interests in time of war--we have not always been united in
purpose and direction. We cannot overlook the serious dissensions and
the lack of unity in our war of the Revolution, in our War of 1812, or
in our War Between the States, when the survival of the Union itself was
at stake.

In the first World War we came closer to national unity than in any
previous war. But that war lasted only a year and a half, and increasing
signs of disunity began to appear during the final months of the
conflict.

In this war, we have been compelled to learn how interdependent upon
each other are all groups and sections of the population of America.

Increased food costs, for example, will bring new demands for wage
increases from all war workers, which will in turn raise all prices of
all things including those things which the farmers themselves have to
buy. Increased wages or prices will each in turn produce the same
results. They all have a particularly disastrous result on all fixed
income groups.

And I hope you will remember that all of us in this Government represent
the fixed income group just as much as we represent business owners,
workers, and farmers. This group of fixed income people includes:
teachers, clergy, policemen, firemen, widows and minors on fixed
incomes, wives and dependents of our soldiers and sailors, and old-age
pensioners. They and their families add up to one-quarter of our one
hundred and thirty million people. They have few or no high pressure
representatives at the Capitol. In a period of gross inflation they
would be the worst sufferers.

If ever there was a time to subordinate individual or group selfishness
to the national good, that time is now. Disunity at home--bickerings,
self-seeking partisanship, stoppages of work, inflation, business as
usual, politics as usual, luxury as usual these are the influences which
can undermine the morale of the brave men ready to die at the front for
us here.

Those who are doing most of the complaining are not deliberately
striving to sabotage the national war effort. They are laboring under
the delusion that the time is past when we must make prodigious
sacrifices--that the war is already won and we can begin to slacken off.
But the dangerous folly of that point of view can be measured by the
distance that separates our troops from their ultimate objectives in
Berlin and Tokyo--and by the sum of all the perils that lie along the
way.

Overconfidence and complacency are among our deadliest enemies. Last
spring--after notable victories at Stalingrad and in Tunisia and against
the U-boats on the high seas--overconfidence became so pronounced that
war production fell off. In two months, June and July, 1943, more than a
thousand airplanes that could have been made and should have been made
were not made. Those who failed to make them were not on strike. They
were merely saying, "The war's in the bag--so let's relax."

That attitude on the part of anyone--Government or management or
labor--can lengthen this war. It can kill American boys.

Let us remember the lessons of 1918. In the summer of that year the tide
turned in favor of the allies. But this Government did not relax. In
fact, our national effort was stepped up. In August, 1918, the draft age
limits were broadened from 21-31 to 18-45. The President called for
"force to the utmost," and his call was heeded. And in November, only
three months later, Germany surrendered.

That is the way to fight and win a war--all out--and not with
half-an-eye on the battlefronts abroad and the other eye-and-a-half on
personal, selfish, or political interests here at home.

Therefore, in order to concentrate all our energies and resources on
winning the war, and to maintain a fair and stable economy at home, I
recommend that the Congress adopt:

(1) A realistic tax law--which will tax all unreasonable profits, both
individual and corporate, and reduce the ultimate cost of the war to our
sons and daughters. The tax bill now under consideration by the Congress
does not begin to meet this test.

(2) A continuation of the law for the renegotiation of war
contracts--which will prevent exorbitant profits and assure fair prices
to the Government. For two long years I have pleaded with the Congress
to take undue profits out of war.

(3) A cost of food law--which will enable the Government (a) to place a
reasonable floor under the prices the farmer may expect for his
production; and (b) to place a ceiling on the prices a consumer will
have to pay for the food he buys. This should apply to necessities only;
and will require public funds to carry out. It will cost in
appropriations about one percent of the present annual cost of the war.

(4) Early reenactment of the stabilization statute of October, 1942.
This expires June 30, 1944, and if it is not extended well in advance,
the country might just as well expect price chaos by summer.

We cannot have stabilization by wishful thinking. We must take positive
action to maintain the integrity of the American dollar.

(5) A national service law--which, for the duration of the war, will
prevent strikes, and, with certain appropriate exceptions, will make
available for war production or for any other essential services every
able-bodied adult in this Nation.

These five measures together form a just and equitable whole. I would
not recommend a national service law unless the other laws were passed
to keep down the cost of living, to share equitably the burdens of
taxation, to hold the stabilization line, and to prevent undue profits.

The Federal Government already has the basic power to draft capital and
property of all kinds for war purposes on a basis of just compensation.

As you know, I have for three years hesitated to recommend a national
service act. Today, however, I am convinced of its necessity. Although I
believe that we and our allies can win the war without such a measure, I
am certain that nothing less than total mobilization of all our
resources of manpower and capital will guarantee an earlier victory, and
reduce the toll of suffering and sorrow and blood.

I have received a joint recommendation for this law from the heads of
the War Department, the Navy Department, and the Maritime Commission.
These are the men who bear responsibility for the procurement of the
necessary arms and equipment, and for the successful prosecution of the
war in the field. They say:

"When the very life of the Nation is in peril the responsibility for
service is common to all men and women. In such a time there can be no
discrimination between the men and women who are assigned by the
Government to its defense at the battlefront and the men and women
assigned to producing the vital materials essential to successful
military operations. A prompt enactment of a National Service Law would
be merely an expression of the universality of this responsibility."

I believe the country will agree that those statements are the solemn
truth.

National service is the most democratic way to wage a war. Like
selective service for the armed forces, it rests on the obligation of
each citizen to serve his Nation to his utmost where he is best
qualified.

It does not mean reduction in wages. It does not mean loss of retirement
and seniority rights and benefits. It does not mean that any substantial
numbers of war workers will be disturbed in their present jobs. Let
these facts be wholly clear.

Experience in other democratic Nations at war--Britain, Canada,
Australia, and New Zealand--has shown that the very existence of
national service makes unnecessary the widespread use of compulsory
power. National service has proven to be a unifying moral force based on
an equal and comprehensive legal obligation of all people in a Nation at
war.

There are millions of American men and women who are not in this war at
all. It is not because they do not want to be in it. But they want to
know where they can best do their share. National service provides that
direction. It will be a means by which every man and woman can find that
inner satisfaction which comes from making the fullest possible
contribution to victory.

I know that all civilian war workers will be glad to be able to say many
years hence to their grandchildren: "Yes, I, too, was in service in the
great war. I was on duty in an airplane factory, and I helped make
hundreds of fighting planes. The Government told me that in doing that I
was performing my most useful work in the service of my country."

It is argued that we have passed the stage in the war where national
service is necessary. But our soldiers and sailors know that this is not
true. We are going forward on a long, rough road--and, in all journeys,
the last miles are the hardest. And it is for that final effort--for the
total defeat of our enemies--that we must mobilize our total resources.
The national war program calls for the employment of more people in 1944
than in 1943.

It is my conviction that the American people will welcome this
win-the-war measure which is based on the eternally just principle of
"fair for one, fair for all."

It will give our people at home the assurance that they are standing
four-square behind our soldiers and sailors. And it will give our
enemies demoralizing assurance that we mean business--that we,
130,000,000 Americans, are on the march to Rome, Berlin, and Tokyo.

I hope that the Congress will recognize that, although this is a
political year, national service is an issue which transcends politics.
Great power must be used for great purposes.

As to the machinery for this measure, the Congress itself should
determine its nature--but it should be wholly nonpartisan in its
make-up.

Our armed forces are valiantly fulfilling their responsibilities to our
country and our people. Now the Congress faces the responsibility for
taking those measures which are essential to national security in this
the most decisive phase of the Nation's greatest war.

Several alleged reasons have prevented the enactment of legislation
which would preserve for our soldiers and sailors and marines the
fundamental prerogative of citizenship--the right to vote. No amount of
legalistic argument can becloud this issue in the eyes of these ten
million American citizens. Surely the signers of the Constitution did
not intend a document which, even in wartime, would be construed to take
away the franchise of any of those who are fighting to preserve the
Constitution itself.

Our soldiers and sailors and marines know that the overwhelming majority
of them will be deprived of the opportunity to vote, if the voting
machinery is left exclusively to the States under existing State
laws--and that there is no likelihood of these laws being changed in
time to enable them to vote at the next election. The Army and Navy have
reported that it will be impossible effectively to administer
forty-eight different soldier voting laws. It is the duty of the
Congress to remove this unjustifiable discrimination against the men and
women in our armed forces--and to do it as quickly as possible.

It is our duty now to begin to lay the plans and determine the strategy
for the winning of a lasting peace and the establishment of an American
standard of living higher than ever before known. We cannot be content,
no matter how high that general standard of living may be, if some
fraction of our people--whether it be one-third or one-fifth or
one-tenth--is ill-fed, ill-clothed, ill housed, and insecure.

This Republic had its beginning, and grew to its present strength, under
the protection of certain inalienable political rights--among them the
right of free speech, free press, free worship, trial by jury, freedom
from unreasonable searches and seizures. They were our rights to life
and liberty.

As our Nation has grown in size and stature, however--as our industrial
economy expanded--these political rights proved inadequate to assure us
equality in the pursuit of happiness.

We have come to a clear realization of the fact that true individual
freedom cannot exist without economic security and independence.
"Necessitous men are not free men." People who are hungry and out of a
job are the stuff of which dictatorships are made.

In our day these economic truths have become accepted as self-evident.
We have accepted, so to speak, a second Bill of Rights under which a new
basis of security and prosperity can be established for all regardless
of station, race, or creed.

Among these are:

The right to a useful and remunerative job in the industries or shops or
farms or mines of the Nation;

The right to earn enough to provide adequate food and clothing and
recreation;

The right of every farmer to raise and sell his products at a return
which will give him and his family a decent living;

The right of every businessman, large and small, to trade in an
atmosphere of freedom from unfair competition and domination by
monopolies at home or abroad;

The right of every family to a decent home;

The right to adequate medical care and the opportunity to achieve and
enjoy good health;

The right to adequate protection from the economic fears of old age,
sickness, accident, and unemployment;

The right to a good education.

All of these rights spell security. And after this war is won we must be
prepared to move forward, in the implementation of these rights, to new
goals of human happiness and well-being.

America's own rightful place in the world depends in large part upon how
fully these and similar rights have been carried into practice for our
citizens. For unless there is security here at home there cannot be
lasting peace in the world.

One of the great American industrialists of our day--a man who has
rendered yeoman service to his country in this crisis--recently
emphasized the grave dangers of "rightist reaction" in this Nation. All
clear-thinking businessmen share his concern. Indeed, if such reaction
should develop--if history were to repeat itself and we were to return
to the so-called "normalcy" of the 1920's--then it is certain that even
though we shall have conquered our enemies on the battlefields abroad,
we shall have yielded to the spirit of Fascism here at home.

I ask the Congress to explore the means for implementing this economic
bill of rights--for it is definitely the responsibility of the Congress
so to do. Many of these problems are already before committees of the
Congress in the form of proposed legislation. I shall from time to time
communicate with the Congress with respect to these and further
proposals. In the event that no adequate program of progress is evolved,
I am certain that the Nation will be conscious of the fact.

Our fighting men abroad--and their families at home--expect such a
program and have the right to insist upon it. It is to their demands
that this Government should pay heed rather than to the whining demands
of selfish pressure groups who seek to feather their nests while young
Americans are dying.

The foreign policy that we have been following--the policy that guided
us at Moscow, Cairo, and Teheran--is based on the common sense principle
which was best expressed by Benjamin Franklin on July 4, 1776: "We must
all hang together, or assuredly we shall all hang separately."

I have often said that there are no two fronts for America in this war.
There is only one front. There is one line of unity which extends from
the hearts of the people at home to the men of our attacking forces in
our farthest outposts. When we speak of our total effort, we speak of
the factory and the field, and the mine as well as of the
battleground--we speak of the soldier and the civilian, the citizen and
his Government.

Each and every one of us has a solemn obligation under God to serve this
Nation in its most critical hour--to keep this Nation great--to make
this Nation greater in a better world.

***

State of the Union Address
Franklin D. Roosevelt
January 6, 1945

To the Congress:

In considering the State of the Union, the war and the peace that is to
follow are naturally uppermost in the minds of all of us.

This war must be waged--it is being waged--with the greatest and most
persistent intensity. Everything we are and have is at stake. Everything
we are and have will be given. American men, fighting far from home,
have already won victories which the world will never forget.

We have no question of the ultimate victory. We have no question of the
cost. Our losses will be heavy.

We and our allies will go on fighting together to ultimate total
victory.

We have seen a year marked, on the whole, by substantial progress toward
victory, even though the year ended with a setback for our arms, when
the Germans launched a ferocious counter-attack into Luxembourg and
Belgium with the obvious objective of cutting our line in the center.

Our men have fought with indescribable and unforgettable gallantry under
most difficult conditions, and our German enemies have sustained
considerable losses while failing to obtain their objectives.

The high tide of this German effort was reached two days after
Christmas. Since then we have reassumed the offensive, rescued the
isolated garrison at Bastogne, and forced a German withdrawal along the
whole line of the salient. The speed with which we recovered from this
savage attack was largely possible because we have one supreme commander
in complete control of all the Allied armies in France. General
Eisenhower has faced this period of trial with admirable calm and
resolution and with steadily increasing success. He has my complete
confidence.

Further desperate attempts may well be made to break our lines, to slow
our progress. We must never make the mistake of assuming that the
Germans are beaten until the last Nazi has surrendered.

And I would express another most serious warning against the poisonous
effects of enemy propaganda.

The wedge that the Germans attempted to drive in western Europe was less
dangerous in actual terms of winning the war than the wedges which they
are continually attempting to drive between ourselves and our allies.

Every little rumor which is intended to weaken our faith in our allies
is like an actual enemy agent in our midst--seeking to sabotage our war
effort. There are, here and there, evil and baseless rumors against the
Russians--rumors against the British--rumors against our own American
commanders in the field.

When you examine these rumors closely, you will observe that every one
of them bears the same trade-mark--"Made in Germany."

We must resist this divisive propaganda--we must destroy it--with the
same strength and the same determination that our fighting men are
displaying as they resist and destroy the panzer divisions.

In Europe, we shall resume the attack and--despite temporary setbacks
here or there--we shall continue the attack relentlessly until Germany
is completely defeated.

It is appropriate at this time to review the basic strategy which has
guided us through three years of war, and which will lead, eventually,
to total victory.

The tremendous effort of the first years of this war was directed toward
the concentration of men and supplies in the various theaters of action
at the points where they could hurt our enemies most.

It was an effort--in the language of the military men--of deployment of
our forces. Many battles--essential battles--were fought; many
victories--vital victories--were won. But these battles and these
victories were fought and won to hold back the attacking enemy, and to
put us in positions from which we and our allies could deliver the
final, decisive blows.

In the beginning our most important military task was to prevent our
enemies--the strongest and most violently aggressive powers that ever
have threatened civilization--from winning decisive victories. But even
while we were conducting defensive, delaying actions, we were looking
forward to the time when we could wrest the initiative from our enemies
and place our superior resources of men and materials into direct
competition with them.

It was plain then that the defeat of either enemy would require the
massing of overwhelming forces--ground, sea, and air--in positions from
which we and our allies could strike directly against the enemy
homelands and destroy the Nazi and Japanese war machines.

In the case of Japan, we had to await the completion of extensive
preliminary operations--operations designed to establish secure supply
lines through the Japanese outer-zone defenses. This called for
overwhelming sea power and air power--supported by ground forces
strategically employed against isolated outpost garrisons.

Always--from the very day we were attacked--it was right militarily as
well as morally to reject the arguments of those shortsighted people who
would have had us throw Britain and Russia to the Nazi wolves and
concentrate against the Japanese. Such people urged that we fight a
purely defensive war against Japan while allowing the domination of all
the rest of the world by Nazism and Fascism.

In the European theater the necessary bases for the massing of ground
and air power against Germany were already available in Great Britain.
In the Mediterranean area we could begin ground operations against major
elements of the German Army as rapidly as we could put troops in the
field, first in North Africa and then in Italy.

Therefore, our decision was made to concentrate the bulk of our ground
and air forces against Germany until her utter defeat. That decision was
based on all these factors; and it was also based on the realization
that, of our two enemies, Germany would be more able to digest quickly
her conquests, the more able quickly to convert the manpower and
resources of her conquered territory into a war potential.

We had in Europe two active and indomitable allies--Britain and the
Soviet Union--and there were also the heroic resistance movements in the
occupied countries, constantly engaging and harassing the Germans. We
cannot forget how Britain held the line, alone, in 1940 and 1941; and at
the same time, despite ferocious bombardment from the air, built up a
tremendous armaments industry which enabled her to take the offensive at
El Alamein in 1942.

We cannot forget the heroic defense of Moscow and Leningrad and
Stalingrad, or the tremendous Russian offensives of 1943 and 1944 which
destroyed formidable German armies.

Nor can we forget how, for more than seven long years, the Chinese
people have been sustaining the barbarous attacks of the Japanese and
containing large enemy forces on the vast areas of the Asiatic mainland.

In the future we must never forget the lesson that we have learned--that
we must have friends who will work with us in peace as they have fought
at our side in war.

As a result of the combined effort of the Allied forces, great military
victories were achieved in 1944: The liberation of France, Belgium,
Greece, and parts of The Netherlands, Norway, Poland, Yugoslavia, and
Czechoslovakia; the surrender of Rumania and Bulgaria; the invasion of
Germany itself and Hungary; the steady march through the Pacific islands
to the Philippines, Guam, and Saipan; and the beginnings of a mighty air
offensive against the Japanese islands.

Now, as this Seventy-ninth Congress meets, we have reached the most
critical phase of the war.

The greatest victory of the last year was, of course, the successful
breach on June 6, 1944, of the German "impregnable" seawall of Europe
and the victorious sweep of the Allied forces through France and Belgium
and Luxembourg--almost to the Rhine itself.

The cross-channel invasion of the Allied armies was the greatest
amphibious operation in the history of the world. It overshadowed all
other operations in this or any other war in its immensity. Its success
is a tribute to the fighting courage of the soldiers who stormed the
beaches--to the sailors and merchant seamen who put the soldiers ashore
and kept them supplied--and to the military and naval leaders who
achieved a real miracle of planning and execution. And it is also a
tribute to the ability of two Nations, Britain and America, to plan
together, and work together, and fight together in perfect cooperation
and perfect harmony.

This cross-channel invasion was followed in August by a second great
amphibious operation, landing troops in southern France. In this, the
same cooperation and the same harmony existed between the American,
French, and other Allied forces based in North Africa and Italy.

The success of the two invasions is a tribute also to the ability of
many men and women to maintain silence, when a few careless words would
have imperiled the lives of hundreds of thousands, and would have
jeopardized the whole vast undertakings.

These two great operations were made possible by success in the Battle
of the Atlantic.

Without this success over German submarines, we could not have built up
our invasion forces or air forces in Great Britain, nor could we have
kept a steady stream of supplies flowing to them after they had landed
in France.

The Nazis, however, may succeed in improving their submarines and their
crews. They have recently increased their U-boat activity. The Battle of
the Atlantic--like all campaigns in this war--demands eternal vigilance.
But the British, Canadian, and other Allied navies, together with our
own, are constantly on the alert.

The tremendous operations in western Europe have overshadowed in the
public mind the less spectacular but vitally important Italian front.
Its place in the strategic conduct of the war in Europe has been
obscured, and--by some people unfortunately--underrated.

It is important that any misconception on that score be corrected--now.

What the Allied forces in Italy are doing is a well-considered part in
our strategy in Europe, now aimed at only one objective--the total
defeat of the Germans. These valiant forces in Italy are continuing to
keep a substantial portion of the German Army under constant
pressure--including some 20 first-line German divisions and the
necessary supply and transport and replacement troops--all of which our
enemies need so badly elsewhere.

Over very difficult terrain and through adverse weather conditions, our
Fifth Army and the British Eighth Army--reinforced by units from other
United Nations, including a brave and well equipped unit of the
Brazilian Army--have, in the past year, pushed north through bloody
Cassino and the Anzio beachhead, and through Rome until now they occupy
heights overlooking the valley of the Po.

The greatest tribute which can be paid to the courage and fighting
ability of these splendid soldiers in Italy is to point out that
although their strength is about equal to that of the Germans they
oppose, the Allies have been continuously on the offensive.

That pressure, that offensive, by our troops in Italy will continue.

The American people--and every soldier now fighting in the
Apennines--should remember that the Italian front has not lost any of
the importance which it had in the days when it was the only Allied
front in Europe.

In the Pacific during the past year, we have conducted the
fastest-moving offensive in the history of modern warfare. We have
driven the enemy back more than 3,000 miles across the Central Pacific.
A year ago, our conquest of Tarawa was a little more than a month old.

A year ago, we were preparing for our invasion of Kwajalein, the second
of our great strides across the Central Pacific to the Philippines.

A year ago, General MacArthur was still fighting in New Guinea almost
1,500 miles from his present position in the Philippine Islands.

We now have firmly established bases in the Mariana Islands, from which
our Super fortresses bomb Tokyo itself--and will continue to blast Japan
in ever-increasing numbers.

Japanese forces in the Philippines have been cut in two. There is still
hard fighting ahead--costly fighting. But the liberation of the
Philippines will mean that Japan has been largely cut off from her
conquests in the East Indies.

The landing of our troops on Leyte was the largest amphibious operation
thus far conducted in the Pacific.

Moreover, these landings drew the Japanese Fleet into the first great
sea battle which Japan has risked in almost two years. Not since the
night engagements around Guadalcanal in November-December, 1942, had our
Navy been able to come to grips with major units of the Japanese Fleet.
We had brushed against their fleet in the first battle of the Philippine
Sea in June, 1944, but not until last October were we able really to
engage a major portion of the Japanese Navy in actual combat. The naval
engagement which raged for three days was the heaviest blow ever struck
against Japanese sea power.

As a result of that battle, much of what is left of the Japanese Fleet
has been driven behind the screen of islands that separates the Yellow
Sea, the China Sea, and the Sea of Japan from the Pacific.

Our Navy looks forward to any opportunity which the lords of the
Japanese Navy will give us to fight them again.

The people of this Nation have a right to be proud of the courage and
fighting ability of the men in the armed forces--on all fronts. They
also have a right to be proud of American leadership which has guided
their sons into battle.

The history of the generalship of this war has been a history of
teamwork and cooperation, of skill and daring. Let me give you one
example out of last year's operations in the Pacific.

Last September Admiral Halsey led American naval task forces into
Philippine waters and north to the East China Sea, and struck heavy
blows at Japanese air and sea power.

At that time it was our plan to approach the Philippines by further
stages, taking islands which we may call A, C, and E. However, Admiral
Halsey reported that a direct attack on Leyte appeared feasible. When
General MacArthur received the reports from Admiral Halsey's task
forces, he also concluded that it might be possible to attack the
Japanese in the Philippines directly--bypassing islands A, C, and E.

Admiral Nimitz thereupon offered to make available to General MacArthur
several divisions which had been scheduled to take the intermediate
objectives. These discussions, conducted at great distances, all took
place in one day.

General MacArthur immediately informed the Joint Chiefs of Staff here in
Washington that he was prepared to initiate plans for an attack on Leyte
in October. Approval of the change in plan was given on the same day.

Thus, within the space of 24 hours, a major change of plans was
accomplished which involved Army and Navy forces from two different
theaters of operations--a change which hastened the liberation of the
Philippines and the final day of victory--a change which saved lives
which would have been expended in the capture of islands which are now
neutralized far behind our lines.

Our over-all strategy has not neglected the important task of rendering
all possible aid to China. Despite almost insuperable difficulties, we
increased this aid during 1944. At present our aid to China must be
accomplished by air transport--there is no other way. By the end of
1944, the Air Transport Command was carrying into China a tonnage of
supplies three times as great as that delivered a year ago, and much
more, each month, than the Burma Road ever delivered at its peak.

Despite the loss of important bases in China, the tonnage delivered by
air transport has enabled General Chennault's Fourteenth Air Force,
which includes many Chinese flyers, to wage an effective and aggressive
campaign against the Japanese. In 1944 aircraft of the Fourteenth Air
Force flew more than 35,000 sorties against the Japanese and sank
enormous tonnage of enemy shipping, greatly diminishing the usefulness
of the China Sea lanes.

British, Dominion, and Chinese forces together with our own have not
only held the line in Burma against determined Japanese attacks but have
gained bases of considerable importance to the supply line into China.

The Burma campaigns have involved incredible hardship, and have demanded
exceptional fortitude and determination. The officers and men who have
served with so much devotion in these far distant jungles and mountains
deserve high honor from their countrymen.

In all of the far-flung operations of our own armed forces--on land, and
sea and in the air--the final job, the toughest job, has been performed
by the average, easy-going, hard-fighting young American, who carries
the weight of battle on his own shoulders.

It is to him that we and all future generations of Americans must pay
grateful tribute.

But--it is of small satisfaction to him to know that monuments will be
raised to him in the future. He wants, he needs, and he is entitled to
insist upon, our full and active support--now.

Although unprecedented production figures have made possible our
victories, we shall have to increase our goals even more in certain
items.

Peak deliveries of supplies were made to the War Department in December,
1943. Due in part to cutbacks, we have not produced as much since then.
Deliveries of Army supplies were down by 15 percent by July, 1944,
before the upward trend was once more resumed.

Because of increased demands from overseas, the Army Service Forces in
the month of October, 1944, had to increase its estimate of required
production by 10 percent. But in November, one month later, the
requirements for 1945 had to be increased another 10 percent, sending
the production goal well above anything we have yet attained. Our armed
forces in combat have steadily increased their expenditure of medium and
heavy artillery ammunition. As we continue the decisive phases of this
war, the munitions that we expend will mount day by day.

In October, 1944, while some were saying the war in Europe was over, the
Army was shipping more men to Europe than in any previous month of the
war.

One of the most urgent immediate requirements of the armed forces is
more nurses. Last April the Army requirement for nurses was set at
50,000. Actual strength in nurses was then 40,000. Since that time the
Army has tried to raise the additional 10,000. Active recruiting has
been carried on, but the net gain in eight months has been only 2,000.
There are now 42,000 nurses in the Army.

Recent estimates have increased the total number needed to 60,000. That
means that 18,000 more nurses must be obtained for the Army alone and
the Navy now requires 2,000 additional nurses.

The present shortage of Army nurses is reflected in undue strain on the
existing force. More than a thousand nurses are now hospitalized, and
part of this is due to overwork. The shortage is also indicated by the
fact that 11 Army hospital units have been sent overseas without their
complement of nurses. At Army hospitals in the United States there is
only 1 nurse to 26 beds, instead of the recommended 1 to 15 beds.

It is tragic that the gallant women who have volunteered for service as
nurses should be so overworked. It is tragic that our wounded men should
ever want for the best possible nursing care.

The inability to get the needed nurses for the Army is not due to any
shortage of nurses; 280,000 registered nurses are now practicing in this
country. It has been estimated by the War Manpower Commission that
27,000 additional nurses could be made available to the armed forces
without interfering too seriously with the needs of the civilian
population for nurses.

Since volunteering has not produced the number of nurses required, I
urge that the Selective Service Act be amended to provide for the
induction of nurses into the armed forces. The need is too pressing to
await the outcome of further efforts at recruiting.

The care and treatment given to our wounded and sick soldiers have been
the best known to medical science. Those standards must be maintained at
all costs. We cannot tolerate a lowering of them by failure to provide
adequate nursing for the brave men who stand desperately in need of it.

In the continuing progress of this war we have constant need for new
types of weapons, for we cannot afford to fight the war of today or
tomorrow with the weapons of yesterday. For example, the American Army
now has developed a new tank with a gun more powerful than any yet
mounted on a fast-moving vehicle. The Army will need many thousands of
these new tanks in 1945.

Almost every month finds some new development in electronics which must
be put into production in order to maintain our technical
superiority--and in order to save lives. We have to work every day to
keep ahead of the enemy in radar. On D-Day, in France, with our superior
new equipment, we located and then put out of operation every warning
set which the Germans had along the French coast.

If we do not keep constantly ahead of our enemies in the development of
new weapons, we pay for our backwardness with the life's blood of our
sons.

The only way to meet these increased needs for new weapons and more of
them is for every American engaged in war work to stay on his war
job--for additional American civilians, men and women, not engaged in
essential work, to go out and get a war job. Workers who are released
because their production is cut back should get another job where
production is being increased. This is no time to quit or change to less
essential jobs.

There is an old and true saying that the Lord hates a quitter. And this
Nation must pay for all those who leave their essential jobs--or all
those who lay down on their essential jobs for nonessential reasons.
And--again--that payment must be made with the life's blood of our sons.

Many critical production programs with sharply rising needs are now
seriously hampered by manpower shortages. The most important Army needs
are artillery ammunition, cotton duck, bombs, tires, tanks, heavy
trucks, and even B-29's. In each of these vital programs, present
production is behind requirements.

Navy production of bombardment ammunition is hampered by manpower
shortages; so is production for its huge rocket program. Labor shortages
have also delayed its cruiser and carrier programs, and production of
certain types of aircraft.

There is critical need for more repair workers and repair parts; this
Jack delays the return of damaged fighting ships to their places in the
fleet, and prevents ships now in the fighting line from getting needed
overhauling.

The pool of young men under 26 classified as I-A is almost depleted.
Increased replacements for the armed forces will take men now deferred
who are at work in war industry. The armed forces must have an assurance
of a steady flow of young men for replacements. Meeting this paramount
need will be difficult, and will also make it progressively more
difficult to attain the 1945 production goals.

Last year, after much consideration, I recommended that the Congress
adopt a national service act as the most efficient and democratic way of
insuring full production for our war requirements. This recommendation
was not adopted.

I now again call upon the Congress to enact this measure for the total
mobilization of all our human resources for the prosecution of the war.
I urge that this be done at the earliest possible moment.

It is not too late in the war. In fact, bitter experience has shown that
in this kind of mechanized warfare where new weapons are constantly
being created by our enemies and by ourselves, the closer we come to the
end of the war, the more pressing becomes the need for sustained war
production with which to deliver the final blow to the enemy.

There are three basic arguments for a national service law:

First, it would assure that we have the right numbers of workers in the
right places at the right times.

Second, it would provide supreme proof to all our fighting men that we
are giving them what they are entitled to, which is nothing less than
our total effort.

And, third, it would be the final, unequivocal answer to the hopes of
the Nazis and the Japanese that we may become halfhearted about this war
and that they can get from us a negotiated peace.

National service legislation would make it possible to put ourselves in
a position to assure certain and speedy action in meeting our manpower
needs.

It would be used only to the extent absolutely required by military
necessities. In fact, experience in Great Britain and in other Nations
at war indicates that use of the compulsory powers of national service
is necessary only in rare instances.

This proposed legislation would provide against loss of retirement and
seniority rights and benefits. It would not mean reduction in wages.

In adopting such legislation, it is not necessary to discard the
voluntary and cooperative processes which have prevailed up to this
time. This cooperation has already produced great results. The
contribution of our workers to the war effort has been beyond measure.
We must build on the foundations that have already been laid and
supplement the measures now in operation, in order to guarantee the
production that may be necessary in the critical period that lies ahead.

At the present time we are using the inadequate tools at hand to do the
best we can by such expedients as manpower ceilings, and the use of
priority and other powers, to induce men and women to shift from
non-essential to essential war jobs.

I am in receipt of a joint letter from the Secretary of War and the
Secretary of the Navy, dated January 3, 1945, which says:

"With the experience of three years of war and after the most thorough
consideration, we are convinced that it is now necessary to carry out
the statement made by the Congress in the joint resolutions declaring
that a state of war existed with Japan and Germany: That 'to bring the
conflict to a successful conclusion, all of the resources of the country
are hereby pledged by the Congress of the United States.'

"In our considered judgment, which is supported by General Marshall and
Admiral King, this requires total mobilization of our manpower by the
passage of a national war service law. The armed forces need this
legislation to hasten the day of final victory, and to keep to a minimum
the cost in lives.

"National war service, the recognition by law of the duty of every
citizen to do his or her part in winning the war, will give complete
assurance that the need for war equipment will be filled. In the coming
year we must increase the output of many weapons and supplies on short
notice. Otherwise we shall not keep our production abreast of the
swiftly changing needs of war. At the same time it will be necessary to
draw progressively many men now engaged in war production to serve with
the armed forces, and their places in war production must be filled
promptly. These developments will require the addition of hundreds of
thousands to those already working in war industry. We do not believe
that these needs can be met effectively under present methods.

"The record made by management and labor in war industry has been a
notable testimony to the resourcefulness and power of America. The needs
are so great, nevertheless, that in many instances we have been forced
to recall soldiers and sailors from military duty to do work of a
civilian character in war production, because of the urgency of the need
for equipment and because of inability to recruit civilian labor."

Pending action by the Congress on the broader aspects of national
service, I recommend that the Congress immediately enact legislation
which will be effective in using the services of the 4,000,000 men now
classified as IV-F in whatever capacity is best for the war effort.

In the field of foreign policy, we propose to stand together with the
United Nations not for the war alone but for the victory for which the
war is fought.

It is not only a common danger which unites us but a common hope. Ours
is an association not of Governments but of peoples--and the peoples'
hope is peace. Here, as in England; in England, as in Russia; in Russia,
as in China; in France, and through the continent of Europe, and
throughout the world; wherever men love freedom, the hope and purpose of
the people are for peace--a peace that is durable and secure.

It will not be easy to create this peoples' peace. We delude ourselves
if we believe that the surrender of the armies of our enemies will make
the peace we long for. The unconditional surrender of the armies of our
enemies is the first and necessary step--but the first step only.

We have seen already, in areas liberated from the Nazi and the Fascist
tyranny, what problems peace will bring. And we delude ourselves if we
attempt to believe wishfully that all these problems can be solved
overnight.

The firm foundation can be built--and it will be built. But the
continuance and assurance of a living peace must, in the long run, be
the work of the people themselves.

We ourselves, like all peoples who have gone through the difficult
processes of liberation and adjustment, know of our own experience how
great the difficulties can be. We know that they are not difficulties
peculiar to any continent or any Nation. Our own Revolutionary War left
behind it, in the words of one American historian, "an eddy of
lawlessness and disregard of human life." There were separatist
movements of one kind or another in Vermont, Pennsylvania, Virginia,
Tennessee, Kentucky, and Maine. There were insurrections, open or
threatened, in Massachusetts and New Hampshire. These difficulties we
worked out for ourselves as the peoples of the liberated areas of
Europe, faced with complex problems of adjustment, will work out their
difficulties for themselves.

Peace can be made and kept only by the united determination of free and
peace-loving peoples who are willing to work together--willing to help
one another--willing to respect and tolerate and try to understand one
another's opinions and feelings.

The nearer we come to vanquishing our enemies the more we inevitably
become conscious of differences among the victors.

We must not let those differences divide us and blind us to our more
important common and continuing interests in winning the war and
building the peace.

International cooperation on which enduring peace must be based is not a
one-way street.

Nations like individuals do not always see alike or think alike, and
international cooperation and progress are not helped by any Nation
assuming that it has a monopoly of wisdom or of virtue.

In the future world the misuse of power, as implied in the term "power
politics," must not be a controlling factor in international relations.
That is the heart of the principles to which we have subscribed. We
cannot deny that power is a factor in world politics any more than we
can deny its existence as a factor in national politics. But in a
democratic world, as in a democratic Nation, power must be linked with
responsibility, and obliged to defend and justify itself within the
framework of the general good.

Perfectionism, no less than isolationism or imperialism or power
politics, may obstruct the paths to international peace. Let us not
forget that the retreat to isolationism a quarter of a century ago was
started not by a direct attack against international cooperation but
against the alleged imperfections of the peace.

In our disillusionment after the last war we preferred international
anarchy to international cooperation with Nations which did not see and
think exactly as we did. We gave up the hope of gradually achieving a
better peace because we had not the courage to fulfill our
responsibilities in an admittedly imperfect world.

We must not let that happen again, or we shall follow the same tragic
road again--the road to a third world war.

We can fulfill our responsibilities for maintaining the security of our
own country only by exercising our power and our influence to achieve
the principles in which we believe and for which we have fought.

In August, 1941, Prime Minister Churchill and I agreed to the principles
of the Atlantic Charter, these being later incorporated into the
Declaration by United Nations of January 1, 1942. At that time certain
isolationists protested vigorously against our right to proclaim the
principles--and against the very principles themselves. Today, many of
the same people are protesting against the possibility of violation of
the same principles.

It is true that the statement of principles in the Atlantic Charter does
not provide rules of easy application to each and every one of this
war-torn world's tangled situations. But it is a good and a useful
thing-- it is an essential thing--to have principles toward which we can
aim.

And we shall not hesitate to use our influence--and to use it now--to
secure so far as is humanly possible the fulfillment of the principles
of the Atlantic Charter. We have not shrunk from the military
responsibilities brought on by this war. We cannot and will not shrink
from the political responsibilities which follow in the wake of battle.

I do not wish to give the impression that all mistakes can be avoided
and that many disappointments are not inevitable in the making of peace.
But we must not this time lose the hope of establishing an international
order which will be capable of maintaining peace and realizing through
the years more perfect justice between Nations.

To do this we must be on our guard not to exploit and exaggerate the
differences between us and our allies, particularly with reference to
the peoples who have been liberated from Fascist tyranny. That is not
the way to secure a better settlement of those differences or to secure
international machinery which can rectify mistakes which may be made.

I should not be frank if I did not admit concern about many
situations--the Greek and Polish for example. But those situations are
not as easy or as simple to deal with as some spokesmen, whose sincerity
I do not question, would have us believe. We have obligations, not
necessarily legal, to the exiled Governments, to the underground
leaders, and to our major allies who came much nearer the shadows than
we did.

We and our allies have declared that it is our purpose to respect the
right of all peoples to choose the form of government under which they
will live and to see sovereign rights and self-government restored to
those who have been forcibly deprived of them. But with internal
dissension, with many citizens of liberated countries still prisoners of
war or forced to labor in Germany, it is difficult to guess the kind of
self-government the people really want.

During the interim period, until conditions permit a genuine expression
of the people's will, we and our allies have a duty, which we cannot
ignore, to use our influence to the end that no temporary or provisional
authorities in the liberated countries block the eventual exercise of
the peoples' right freely to choose the government and institutions
under which, as freemen, they are to live.

It is only too easy for all of us to rationalize what we want to
believe, and to consider those leaders we like responsible and those we
dislike irresponsible. And our task is not helped by stubborn
partisanship, however understandable on the part of opposed internal
factions.

It is our purpose to help the peace-loving peoples of Europe to live
together as good neighbors, to recognize their common interests and not
to nurse their traditional grievances against one another.

But we must not permit the many specific and immediate problems of
adjustment connected with the liberation of Europe to delay the
establishment of permanent machinery for the maintenance of peace. Under
the threat of a common danger, the United Nations joined together in war
to preserve their independence and their freedom. They must now join
together to make secure the independence and freedom of all peace-loving
states, so that never again shall tyranny be able to divide and conquer.

International peace and well-being, like national peace and well-being,
require constant alertness, continuing cooperation, and organized
effort.

International peace and well-being, like national peace and well-being,
can be secured only through institutions capable of life and growth.

Many of the problems of the peace are upon us even now while the
conclusion of the war is still before us. The atmosphere of friendship
and mutual understanding and determination to find a common ground of
common understanding, which surrounded the conversations at Dumbarton
Oaks, gives us reason to hope that future discussions will succeed in
developing the democratic and fully integrated world security system
toward which these preparatory conversations were directed.

We and the other United Nations are going forward, with vigor and
resolution, in our efforts to create such a system by providing for it
strong and flexible institutions of joint and cooperative action.

The aroused conscience of humanity will not permit failure in this
supreme endeavor.

We believe that the extraordinary advances in the means of
intercommunication between peoples over the past generation offer a
practical method of advancing the mutual understanding upon which peace
and the institutions of peace must rest, and it is our policy and
purpose to use these great technological achievements for the common
advantage of the world.

We support the greatest possible freedom of trade and commerce.

We Americans have always believed in freedom of opportunity, and
equality of opportunity remains one of the principal objectives of our
national life. What we believe in for individuals, we believe in also
for Nations. We are opposed to restrictions, whether by public act or
private arrangement, which distort and impair commerce, transit, and
trade.

We have house-cleaning of our own to do in this regard. But it is our
hope, not only in the interest of our own prosperity but in the interest
of the prosperity of the world, that trade and commerce and access to
materials and markets may be freer after this war than ever before in
the history of the world.

One of the most heartening events of the year in the international field
has been the renaissance of the French people and the return of the
French Nation to the ranks of the United Nations. Far from having been
crushed by the terror of Nazi domination, the French people have emerged
with stronger faith than ever in the destiny of their country and in the
soundness of the democratic ideals to which the French Nation has
traditionally contributed so greatly.

During her liberation, France has given proof of her unceasing
determination to fight the Germans, continuing the heroic efforts of the
resistance groups under the occupation and of all those Frenchmen
throughout the world who refused to surrender after the disaster of
1940.

Today, French armies are again on the German frontier, and are again
fighting shoulder to shoulder with our sons.

Since our landings in Africa, we have placed in French hands all the
arms and material of war which our resources and the military situation
permitted. And I am glad to say that we are now about to equip large new
French forces with the most modern weapons for combat duty.

In addition to the contribution which France can make to our common
victory, her liberation likewise means that her great influence will
again be available in meeting the problems of peace.

We fully recognize France's vital interest in a lasting solution of the
German problem and the contribution which she can make in achieving
international security. Her formal adherence to the declaration by
United Nations a few days ago and the proposal at the Dumbarton Oaks
discussions, whereby France would receive one of the five permanent
seats in the proposed Security Council, demonstrate the extent to which
France has resumed her proper position of strength and leadership.

I am clear in my own mind that, as an essential factor in the
maintenance of peace in the future, we must have universal military
training after this war, and I shall send a special message to the
Congress on this subject.

An enduring peace cannot be achieved without a strong America--strong in
the social and economic sense as well as in the military sense.

In the State of the Union message last year I set forth what I
considered to be an American economic bill of rights.

I said then, and I say now, that these economic truths represent a
second bill of rights under which a new basis of security and prosperity
can be established for all--regardless of station, race, or creed.

Of these rights the most fundamental, and one on which the fulfillment
of the others in large degree depends, is the "right to a useful and
remunerative job in the industries or shops or farms or mines of the
Nation." In turn, others of the economic rights of American citizenship,
such as the right to a decent home, to a good education, to good medical
care, to social security, to reasonable farm income, will, if fulfilled,
make major contributions to achieving adequate levels of employment.

The Federal Government must see to it that these rights become
realities--with the help of States, municipalities, business, labor, and
agriculture.

We have had full employment during the war. We have had it because the
Government has been ready to buy all the materials of war which the
country could produce--and this has amounted to approximately half our
present productive capacity.

After the war we must maintain full employment with Government
performing its peacetime functions. This means that we must achieve a
level of demand and purchasing power by private consumers--farmers,
businessmen, workers, professional men, housewives--which is
sufficiently high to replace wartime Government demands; and it means
also that we must greatly increase our export trade above the prewar
level.

Our policy is, of course, to rely as much as possible on private
enterprise to provide jobs. But the American people will not accept mass
unemployment or mere makeshift work. There will be need for the work of
everyone willing and able to work--and that means close to 60,000,000
jobs.

Full employment means not only jobs--but productive jobs. Americans do
not regard jobs that pay substandard wages as productive jobs.

We must make sure that private enterprise works as it is supposed to
work-- on the basis of initiative and vigorous competition, without the
stifling presence of monopolies and cartels.

During the war we have guaranteed investment in enterprise essential to
the war effort. We should also take appropriate measures in peacetime to
secure opportunities for new small enterprises and for productive
business expansion for which finance would otherwise be unavailable.

This necessary expansion of our peacetime productive capacity will
require new facilities, new plants, and new equipment.

It will require large outlays of money which should be raised through
normal investment channels. But while private capital should finance
this expansion program, the Government should recognize its
responsibility for sharing part of any special or abnormal risk of loss
attached to such financing.

Our full-employment program requires the extensive development of our
natural resources and other useful public works. The undeveloped
resources of this continent are still vast. Our river-watershed projects
will add new and fertile territories to the United States. The Tennessee
Valley Authority, which was constructed at a cost of $750,000,000--the
cost of waging this war for less than 4 days--was a bargain. We have
similar opportunities in our other great river basins. By harnessing the
resources of these river basins, as we have in the Tennessee Valley, we
shall provide the same kind of stimulus to enterprise as was provided by
the Louisiana Purchase and the new discoveries in the West during the
nineteenth century.

If we are to avail ourselves fully of the benefits of civil aviation,
and if we are to use the automobiles we can produce, it will be
necessary to construct thousands of airports and to overhaul our entire
national highway system.

The provision of a decent home for every family is a national necessity,
if this country is to be worthy of its greatness--and that task will
itself create great employment opportunities. Most of our cities need
extensive rebuilding. Much of our farm plant is in a state of disrepair.
To make a frontal attack on the problems of housing and urban
reconstruction will require thoroughgoing cooperation between industry
and labor, and the Federal, State, and local Governments.

An expanded social security program, and adequate health and education
programs, must play essential roles in a program designed to support
individual productivity and mass purchasing power. I shall communicate
further with the Congress on these subjects at a later date.

The millions of productive jobs that a program of this nature could
bring are jobs in private enterprise. They are jobs based on the
expanded demand for the output of our economy for consumption and
investment. Through a program of this character we can maintain a
national income high enough to provide for an orderly retirement of the
public debt along with reasonable tax reduction.

Our present tax system geared primarily to war requirements must be
revised for peacetime so as to encourage private demand.

While no general revision of the tax structure can be made until the war
ends on all fronts, the Congress should be prepared to provide tax
modifications at the end of the war in Europe, designed to encourage
capital to invest in new enterprises and to provide jobs. As an integral
part of this program to maintain high employment, we must, after the war
is over, reduce or eliminate taxes which bear too heavily on
consumption.

The war will leave deep disturbances in the world economy, in our
national economy, in many communities, in many families, and in many
individuals. It will require determined effort and responsible action of
all of us to find our way back to peacetime, and to help others to find
their way back to peacetime--a peacetime that holds the values of the
past and the promise of the future.

If we attack our problems with determination we shall succeed. And we
must succeed. For freedom and peace cannot exist without security.

During the past year the American people, in a national election,
reasserted their democratic faith.

In the course of that campaign various references were made to "strife"
between this Administration and the Congress, with the implication, if
not the direct assertion, that this Administration and the Congress
could never work together harmoniously in the service of the Nation.

It cannot be denied that there have been disagreements between the
legislative and executive branches--as there have been disagreements
during the past century and a half.

I think we all realize too that there are some people in this Capital
City whose task is in large part to stir up dissension, and to magnify
normal healthy disagreements so that they appear to be irreconcilable
conflicts.

But--I think that the over-all record in this respect is eloquent: The
Government of the United States of America--all branches of it--has a
good record of achievement in this war.

The Congress, the Executive, and the Judiciary have worked together for
the common good.

I myself want to tell you, the Members of the Senate and of the House of
Representatives, how happy I am in our relationships and friendships. I
have not yet had the pleasure of meeting some of the new Members in each
House, but I hope that opportunity will offer itself in the near future.

We have a great many problems ahead of us and we must approach them with
realism and courage.

This new year of 1945 can be the greatest year of achievement in human
history.

Nineteen forty-five can see the final ending of the Nazi-Fascist reign
of terror in Europe.

Nineteen forty-five can see the closing in of the forces of retribution
about the center of the malignant power of imperialistic Japan.

Most important of all--1945 can and must see the substantial beginning
of the organization of world peace. This organization must be the
fulfillment of the promise for which men have fought and died in this
war. It must be the justification of all the sacrifices that have been
made--of all the dreadful misery that this world has endured.

We Americans of today, together with our allies, are making history--and
I hope it will be better history than ever has been made before.

We pray that we may be worthy of the unlimited opportunities that God
has given us.

***

State of the Union Address
Harry S. Truman
January 21, 1946

To the Congress of the United States:

A quarter century ago the Congress decided that it could no longer
consider the financial programs of the various departments on a
piecemeal basis. Instead it has called on the President to present a
comprehensive Executive Budget. The Congress has shown its satisfaction
with that method by extending the budget system and tightening its
controls. The bigger and more complex the Federal Program, the more
necessary it is for the Chief Executive to submit a single budget for
action by the Congress.

At the same time, it is clear that the budgetary program and the general
program of the Government are actually inseparable. The president bears
the responsibility for recommending to the Congress a comprehensive set
of proposals on all Government activities and their financing. In
formulating policies, as in preparing budgetary estimates, the Nation
and the Congress have the right to expect the President to adjust and
coordinate the views of the various departments and agencies to form a
unified program. And that program requires consideration in connection
with the Budget, which is the annual work program of the Government.

Since our programs for this period which combines war liquidation with
reconversion to a peacetime economy are inevitably large and numerous it
is imperative that they be planned and executed with the utmost
efficiency and the utmost economy. We have cut the war program to the
maximum extent consistent with national security. We have held our
peacetime programs to the level necessary to our national well-being and
the attainment of our postwar objectives. Where increased programs have
been recommended, the increases have been held as low as is consistent
with these goals. I can assure the Congress of the necessity of these
programs. I can further assure the Congress that the program as a whole
is well within our capacity to finance it. All the programs I have
recommended for action are included in the Budget figures.

For these reasons I have chosen to combine the customary Message on the
State of the Union with the annual Budget Message, and to include in the
Budget not only estimates for functions authorized by the Congress, but
also for those which I recommend for its action.

I am also transmitting herewith the Fifth Quarterly Report of the
Director of War Mobilization and Reconversion.[1] It is a comprehensive
discussion of the present state of the reconversion program and of the
immediate and long-range needs and recommendations.

[Footnote 1: The report dated January 1, 1946, and entitled "Battle for
Production" is printed in House Document 398 (79th Cong., 2d sess.).]

This constitutes, then, as complete a report as I find it possible to
prepare now. It constitutes a program of government in relation to the
Nation's needs.

With the growing responsibility of modern government to foster economic
expansion and to promote conditions that assure full and steady
employment opportunities, it has become necessary to formulate and
determine the Government program in the light of national economic
conditions as a whole. In both the executive and the legislative
branches we must make arrangements which will permit us to formulate the
Government program in that light. Such an approach has become imperative
if the American political and economic system is to succeed under the
conditions of economic instability and uncertainty which we have to
face. The Government needs to assure business, labor, and agriculture
that Government policies will take due account of the requirements of a
full employment economy. The lack of that assurance would, I believe,
aggravate the economic instability.

With the passage of a full employment bill which I confidently
anticipate for the very near future, the executive and legislative
branches of government will be empowered to devote their best talents
and resources in subsequent years to preparing and acting on such a
program.

I. FROM WAR TO PEACE--THE YEAR

OF DECISION

In his last Message on the State of the Union, delivered one year ago,
President Roosevelt said:

"This new year of 1945 can be the greatest year of achievement in human
history.

"1945 can see the final ending of the Nazi-Fascist reign of terror in
Europe.

"1945 can see the closing in of the forces of retribution about the
center of the malignant power of imperialistic Japan.

"Most important of all--1945 can and must see the substantial beginning
of the organization of world peace."

All those hopes, and more, were fulfilled in the year 1945. It was the
greatest year of achievement in human history. It saw the end of the
Nazi-Fascist terror in Europe, and also the end of the malignant power
of Japan. And it saw the substantial beginning of world organization for
peace. These momentous events became realities because of the steadfast
purpose of the United Nations and of the forces that fought for freedom
under their flags. The plain fact is that civilization was saved in 1945
by the United Nations.

Our own part in this accomplishment was not the product of any single
service. Those who fought on land, those who fought on the sea, and
those who fought in the air deserve equal credit. They were supported by
other millions in the armed forces who through no fault of their own
could not go overseas and who rendered indispensable service in this
country. They were supported by millions in all levels of government,
including many volunteers, whose devoted public service furnished basic
organization and leadership. They were also supported by the millions of
Americans in private life--men and women in industry, in commerce, on
the farms, and in all manner of activity on the home front--who
contributed their brains and their brawn in arming, equipping, and
feeding them. The country was brought through four years of peril by an
effort that was truly national in character.

Everlasting tribute and gratitude will be paid by all Americans to those
brave men who did not come back, who will never come back--the 330,000
who died that the Nation might live and progress. All Americans will
also remain deeply conscious of the obligation owed to that larger
number of soldiers, sailors, and marines who suffered wounds and
sickness in their service. They may be certain that their sacrifice will
never be forgotten or their needs neglected.

The beginning of the year 1946 finds the United States strong and
deservedly confident. We have a record of enormous achievements as a
democratic society in solving problems and meeting opportunities as they
developed. We find ourselves possessed of immeasurable advantages--vast
and varied natural resources; great plants, institutions, and other
facilities; unsurpassed technological and managerial skills; an alert,
resourceful, and able citizenry. We have in the United States Government
rich resources in information, perspective, and facilities for doing
whatever may be found necessary to do in giving support and form to the
widespread and diversified efforts of all our people.

And for the immediate future the business prospects are generally so
favorable that there is danger of such feverish and opportunistic
activity that our grave postwar problems may be neglected. We need to
act now with full regard for pitfalls; we need to act with foresight and
balance. We should not be lulled by the immediate alluring prospects
into forgetting the fundamental complexity of modern affairs, the
catastrophe that can come in this complexity, or the values that can be
wrested from it.

But the long-range difficulties we face should no more lead to despair
than our immediate business prospects should lead to the optimism which
comes from the present short-range prospect. On the foundation of our
victory we can build a lasting peace, with greater freedom and security
for mankind in our country and throughout the world. We will more
certainly do this if we are constantly aware of the fact that we face
crucial issues and prepare now to meet them.

To achieve success will require both boldness in setting our sights and
caution in steering our way on an uncharted course. But we have no
luxury of choice. We must move ahead. No return to the past is possible.

Our Nation has always been a land of great opportunities for those
people of the world who sought to become part of us. Now we have become
a land of great responsibilities to all the people of all the world. We
must squarely recognize and face the fact of those responsibilities.
Advances in science, in communication, in transportation, have
compressed the world into a community. The economic and political health
of each member of the world community bears directly on the economic and
political health of each other member.

The evolution of centuries has brought us to a new era in world history
in which manifold relationships between nations must be formalized and
developed in new and intricate ways.

The United Nations Organization now being established represents a
minimum essential beginning. It must be developed rapidly and steadily.
Its work must be amplified to fill in the whole pattern that has been
outlined. Economic collaboration, for example, already charted, now must
be carried on as carefully and as comprehensively as the political and
security measures.

It is important that the nations come together as States in the Assembly
and in the Security Council and in the other specialized assemblies and
councils that have been and will be arranged. But this is not enough.
Our ultimate security requires more than a process of consultation and
compromise.

It requires that we begin now to develop the United Nations Organization
as the representative of the world as one society. The United Nations
Organization, if we have the will adequately to staff it and to make it
work as it should, will provide a great voice to speak constantly and
responsibly in terms of world collaboration and world well-being.

There are many new responsibilities for us as we enter into this new
international era. The whole power and will and wisdom of our Government
and of our people should be focused to contribute to and to influence
international action. It is intricate, continuing business. Many
concessions and adjustments will be required.

The spectacular progress of science in recent years makes these
necessities more vivid and urgent. That progress has speeded internal
development and has changed world relationships so fast that we must
realize the fact of a new era. It is an era in which affairs have become
complex and rich in promise. Delicate and intricate relationships,
involving us all in countless ways, must be carefully considered.

On the domestic scene, as well as on the international scene, we must
lay a new and better foundation for cooperation. We face a great
peacetime venture; the challenging venture of a free enterprise economy
making full and effective use of its rich resources and technical
advances. This is a venture in which business, agriculture, and labor
have vastly greater opportunities than heretofore. But they all also
have vastly greater responsibilities. We will not measure up to those
responsibilities by the simple return to "normalcy" that was tried after
the last war.

The general objective, on the contrary, is to move forward to find the
way in time of peace to the full utilization and development of our
physical and human resources that were demonstrated so effectively in
the war.

To accomplish this, it is not intended that the Federal Government
should do things that can be done as well for the Nation by private
enterprise, or by State and local governments. On the contrary, the war
has demonstrated how effectively we can organize our productive system
and develop the potential abilities of our people by aiding the efforts
of private enterprise.

As we move toward one common objective there will be many and urgent
problems to meet.

Industrial peace between management and labor will have to be
achieved--through the process of collective bargaining--with Government
assistance but not Government compulsion. This is a problem which is the
concern not only of management, labor, and the Government, but also the
concern of every one of us.

Private capital and private management are entitled to adequate reward
for efficiency, but business must recognize that its reward results from
the employment of the resources of the Nation. Business is a public
trust and must adhere to national standards in the conduct of its
affairs. These standards include as a minimum the establishment of fair
wages and fair employment practices.

Labor also has its own new peacetime responsibilities. Under our
collective bargaining system, which must become progressively more
secure, labor attains increasing political as well as economic power,
and this, as with all power, means increased responsibility.

The lives of millions of veterans and war workers will be greatly
affected by the success or failure of our program of war liquidation and
reconversion. Their transition to peacetime pursuits will be determined
by our efforts to break the bottlenecks in key items of production, to
make surplus property immediately available where it is needed, to
maintain an effective national employment service, and many other
reconversion policies. Our obligations to the people who won the war
will not be paid if we fail to prevent inflation and to maintain
employment opportunities.

While our peacetime prosperity will be based on the private enterprise
the government can and must assist in many ways. It is the Government's
responsibility to see that our economic system remains competitive, that
new businesses have adequate opportunities, and that our national
resources are restored and improved. Government must realize the effect
of its operations on the whole economy. It is the responsibility of
Government to gear its total program to the achievement of full
production and full employment.

Our basic objective--toward which all others lead--is to improve the
welfare of the American people. In addition to economic prosperity, this
means that we use social security in the fullest sense of the word. And
people must be protected from excessive want during old age, sickness,
and unemployment. Opportunities for a good economy and adequate medical
care must be readily available. Every family should build a decent home.
The new economic rights to which I have referred on previous occasions
is a charter of economic freedom which seeks to assure that all who will
may work toward their own security and the general advancement; that we
become a well-housed people, a well-nourished people, an educated
people, a people socially and economically secure, an alert and
responsible people.

These and other problems which may face us can be met by the cooperation
of all of us in furthering a positive and well-balanced Government
program--a program which will further national and international
well-being.

II. THE FEDERAL PROGRAM

INTERNATIONAL AFFAIRS

I. FOREIGN POLICY

The year 1945 brought with it the final defeat of our enemies. There
lies before us now the work of building a just and enduring peace.

Our most immediate task toward that end is to deprive our enemies
completely and forever of their power to start another war. Of even
greater importance to the preservation of international peace is the
need to preserve the wartime agreement of the United Nations and to
direct it into the ways of peace.

Long before our enemies surrendered, the foundations had been laid on
which to continue this unity in the peace to come. The Atlantic meeting
in 1941 and the conferences at Casablanca, Quebec, Moscow, Cairo,
Tehran, and Dumbarton Oaks each added a stone to the structure.

Early in 1945, at Yalta, the three major powers broadened and solidified
this base of understanding. There fundamental decisions were reached
concerning the occupation and control of Germany. There also a formula
was arrived at for the interim government of the areas in Europe which
were rapidly being wrested from Nazi control. This formula was based on
the policy of the United States that people be permitted to choose their
own form of government by their own freely expressed choice without
interference from any foreign source.

At Potsdam, in July 1945, Marshal Stalin, Prime Ministers Churchill and
Attlee, and I met to exchange views primarily with respect to Germany.
As a result, agreements were reached which outlined broadly the policy
to be executed by the Allied Control Council. At Potsdam there was also
established a Council of Foreign Ministers which convened for the first
time in London in September. The Council is about to resume its primary
assignment of drawing up treaties of peace with Italy, Rumania,
Bulgaria, Hungary, and Finland.

In addition to these meetings, and, in accordance with the agreement at
Yalta, the Foreign Ministers of Great Britain, the Soviet Union, and the
United States conferred together in San Francisco last spring, in
Potsdam in July, in London in September, and in Moscow in December.
These meetings have been useful in promoting understanding and agreement
among the three governments.

Simply to name all the international meetings and conferences is to
suggest the size and complexity of the undertaking to prevent
international war in which the United States has now enlisted for the
duration of history.

It is encouraging to know that the common effort of the United Nations
to learn to live together did not cease with the surrender of our
enemies.

When difficulties arise among us, the United States does not propose to
remove them by sacrificing its ideals or its vital interests. Neither do
we propose, however, to ignore the ideals and vital interests of our
friends.

Last February and March an Inter-American Conference on Problems of War
and Peace was held in Mexico City. Among the many significant
accomplishments of that Conference was an understanding that an attack
by any country against any one of the sovereign American republics would
be considered an act of aggression against all of them; and that if such
an attack were made or threatened, the American republics would decide
jointly, through consultations in which each republic has equal
representation, what measures they would take for their mutual
protection. This agreement stipulates that its execution shall be in
full accord with the Charter of the United Nations Organization.

The first meeting of the General Assembly of the United Nations now in
progress in London marks the real beginning of our bold adventure toward
the preservation of world peace, to which is bound the dearest hope of
men.

We have solemnly dedicated ourselves and all our will to the success of
the United Nations Organization. For this reason we have sought to
insure that in the peacemaking the smaller nations shall have a voice as
well as the larger states. The agreement reached at Moscow last month
preserves this opportunity in the making of peace with Italy, Rumania,
Bulgaria, Hungary, and Finland. The United States intends to preserve it
when the treaties with Germany and Japan are drawn.

It will be the continuing policy of the United States to use all its
influence to foster, support, and develop the United Nations
Organization in its purpose of preventing international war. If peace is
to endure it must rest upon justice no less than upon power. The
question is how justice among nations is best achieved. We know from
day-to-day experience that the chance for a just solution is
immeasurably increased when everyone directly interested is given a
voice. That does not mean that each must enjoy an equal voice, but it
does mean that each must be heard.

Last November, Prime Minister Attlee, Prime Minister MacKenzie King, and
I announced our proposal that a commission be established within the
framework of the United Nations to explore the problems of effective
international control of atomic energy.

The Soviet Union, France, and China have joined us in the purpose of
introducing in the General Assembly a resolution for the establishment
of such a commission. Our earnest wish is that the work of this
commission go forward carefully and thoroughly, but with the greatest
dispatch. I have great hope for the development of mutually effective
safeguards which will permit the fullest international control of this
new atomic force.

I believe it possible that effective means can be developed through the
United Nations Organization to prohibit, outlaw, and prevent the use of
atomic energy for destructive purposes.

The power which the United States demonstrated during the war is the
fact that underlies every phase of our relations with other countries.
We cannot escape the responsibility which it thrusts upon us. What we
think, plan, say, and do is of profound significance to the future of
every corner of the world.

The great and dominant objective of United States foreign policy is to
build and preserve a just peace. The peace we seek is not peace for
twenty years. It is permanent peace. At a time when massive changes are
occurring with lightning speed throughout the world, it is often
difficult to perceive how this central objective is best served in one
isolated complex situation or another. Despite this very real
difficulty, there are certain basic propositions to which the United
States adheres and to which we shall continue to adhere.

One proposition is that lasting peace requires genuine understanding and
active cooperation among the most powerful nations. Another is that even
the support of the strongest nations cannot guarantee a peace unless it
is infused with the quality of justice for all nations.

On October 27, 1945, I made, in New York City, the following public
statement of my understanding of the fundamental foreign policy of the
United States. I believe that policy to be in accord with the opinion of
the Congress and of the people of the United States. I believe that that
policy carries out our fundamental objectives.

1. We seek no territorial expansion or selfish advantage. We have no
plans for aggression against any other state, large or small. We have no
objective which need clash with the peaceful aims of any other nation.

2. We believe in the eventual return of sovereign rights and
self-government to all peoples who have been deprived of them by force.

3. We shall approve no territorial changes in any friendly part of the
world unless they accord with the freely expressed wishes of the people
concerned.

4. We believe that all peoples who are prepared for self-government
should be permitted to choose their own form of government by their own
freely expressed choice, without interference from any foreign source.
That is true in Europe, in Asia, in Africa, as well as in the Western
Hemisphere.

5. By the combined and cooperative action of our war allies, we shall
help the defeated enemy states establish peaceful democratic governments
of their own free choice. And we shall try to attain a world in which
nazism, fascism, and military aggression cannot exist.

6. We shall refuse to recognize any government imposed upon any nation
by the force of any foreign power. In some cases it may be impossible to
prevent forceful imposition of such a government. But the United States
will not recognize any such government.

7. We believe that all nations should have the freedom of the seas and
equal rights to the navigation of boundary rivers and waterways and of
rivers and waterways which pass through more than one country.

8. We believe that all states which are accepted in the society of
nations should have access on equal terms to the trade and the raw
materials of the world.

9. We believe that the sovereign states of the Western Hemisphere,
without interference from outside the Western Hemisphere, must work
together as good neighbors in the solution of their common problems.

10. We believe that full economic collaboration between all nations,
great and small, is essential to the improvement of living conditions
all over the world, and to the establishment of freedom from fear and
freedom from want.

11. We shall continue to strive to promote freedom of expression and
freedom of religion throughout the peace-loving areas of the world.

12. We are convinced that the preservation of peace between nations
requires a United Nations Organization composed of all the peace-loving
nations of the world who are willing jointly to use force, if necessary,
to insure peace.

That is our foreign policy.

We may not always fully succeed in our objectives. There may be
instances where the attainment of those objectives is delayed. But we
will not give our full sanction and approval to actions which fly in the
face of these ideals.

The world has a great stake in the political and economic future of
Germany. The Allied Control Council has now been in operation there for
a substantial period of time. It has not met with unqualified success.
The accommodation of varying views of four governments in the day-to-day
civil administration of occupied territory is a challenging task. In my
judgment, however, the Council has made encouraging progress in the face
of most serious difficulties. It is my purpose at the earliest
practicable date to transfer from military to civilian personnel the
execution of United States participation in the government of occupied
territory in Europe. We are determined that effective control shall be
maintained in Germany until we are satisfied that the German people have
regained the right to a place of honor and respect.

On the other side of the world, a method of international cooperation
has recently been agreed upon for the treatment of Japan. In this
pattern of control, the United States, with the full approval of its
partners, has retained primary authority and primary responsibility. It
will continue to do so until the Japanese people, by their own freely
expressed choice, choose their own form of government.

Our basic policy in the Far East is to encourage the development of a
strong, independent, united, and democratic China. That has been the
traditional policy of the United States.

At Moscow the United States, the Union of Soviet Socialist Republics,
and Great Britain agreed to further this development by supporting the
efforts of the national government and nongovernmental Chinese political
elements in bringing about cessation of civil strife and in broadening
the basis of representation in the Government. That is the policy which
General Marshall is so ably executing today.

It is the purpose of the Government of the United States to proceed as
rapidly as is practicable toward the restoration of the sovereignty of
Korea and the establishment of a democratic government by the free
choice of the people of Korea.

At the threshold of every problem which confronts us today in
international affairs is the appalling devastation, hunger, sickness,
and pervasive human misery that mark so many areas of the world.

By joining and participating in the work of the United Nations Relief
and Rehabilitation Administration the United States has directly
recognized and assumed an obligation to give such relief assistance as
is practicable to millions of innocent and helpless victims of the war.
The Congress has earned the gratitude of the world by generous financial
contributions to the United Nations Relief and Rehabilitation
Administration.

We have taken the lead, modest though it is, in facilitating under our
existing immigration quotas the admission to the United States of
refugees and displaced persons from Europe.

We have joined with Great Britain in the organization of a commission to
study the problem of Palestine. The Commission is already at work and
its recommendations will be made at an early date.

The members of the United Nations have paid us the high compliment of
choosing the United States as the site of the United Nations
headquarters. We shall be host in spirit as well as in fact, for nowhere
does there abide a fiercer determination that this peace shall live than
in the hearts of the American people.

It is the hope of all Americans that in time future historians will
speak not of World War I and World War II, but of the first and last
world wars.

2. FOREIGN ECONOMIC POLICY

The foreign economic policy of the United States is designed to promote
our own prosperity, and at the same time to aid in the restoration and
expansion of world markets and to contribute thereby to world peace and
world security. We shall continue our efforts to provide relief from the
devastation of war, to alleviate the sufferings of displaced persons, to
assist in reconstruction and development, and to promote the expansion
of world trade.

We have already joined the International Monetary Fund and the
International Bank for Reconstruction and Development. We have expanded
the Export-Import Bank and provided it with additional capital. The
Congress has renewed the Trade Agreements Act which provides the
necessary framework within which to negotiate a reduction of trade
barriers on a reciprocal basis. It has given our support to the United
Nations Relief and Rehabilitation Administration.

In accordance with the intentions of the Congress, lend-lease, except as
to continuing military lend-lease in China, was terminated upon the
surrender of Japan. The first of the lend-lease settlement agreements
has been completed with the United Kingdom. Negotiations with other
lend-lease countries are in progress. In negotiating these agreements,
we intend to seek settlements which will not encumber world trade
through war debts of a character that proved to be so detrimental to the
stability of the world economy after the last war.

We have taken steps to dispose of the goods which on VJ-day were in the
lend-lease pipe line to the various lend-lease countries and to allow
them long-term credit for the purpose where necessary. We are also
making arrangements under which those countries may use the lend-lease
inventories in their possession and acquire surplus property abroad to
assist in their economic rehabilitation and reconstruction. These goods
will be accounted for at fair values.

The proposed loan to the United Kingdom, which I shall recommend to the
Congress in a separate message, will contribute to easing the transition
problem of one of our major partners in the war. It will enable the
whole sterling area and other countries affiliated with it to resume
trade on a multilateral basis. Extension of this credit will enable the
United Kingdom to avoid discriminatory trade arrangements of the type
which destroyed freedom of trade during the 1930's. I consider the
progress toward multilateral trade which will be achieved by this
agreement to be in itself sufficient warrant for the credit.

The view of this Government is that, in the longer run, our economic
prosperity and the prosperity of the whole world are best served by the
elimination of artificial barriers to international trade, whether in
the form of unreasonable tariffs or tariff preferences or commercial
quotas or embargoes or the restrictive practices of cartels.

The United States Government has issued proposals for the expansion of
world trade and employment to which the Government of the United Kingdom
has given its support on every important issue. These proposals are
intended to form the basis for a trade and employment conference to be
held in the middle of this year. If that conference is a success, I feel
confident that the way will have been adequately prepared for an
expanded and prosperous world trade.

We shall also continue negotiations looking to the full and equitable
development of facilities for transportation and communications among
nations.

The vast majority of the nations of the world have chosen to work
together to achieve, on a cooperative basis, world security and world
prosperity. The effort cannot succeed without full cooperation of the
United States. To play our part, we must not only resolutely carry out
the foreign policies we have adopted but also follow a domestic policy
which will maintain full production and employment in the United States.
A serious depression here can disrupt the whole fabric of the world
economy.

3. OCCUPIED COUNTRIES

The major tasks of our Military Establishment in Europe following
VE-day, and in the Pacific since the surrender of Japan, have been those
of occupation and military government. In addition we have given much
needed aid to the peoples of the liberated countries.

The end of the war in Europe found Germany in a chaotic condition.
Organized government had ceased to exist, transportation systems had
been wrecked, cities and industrial facilities had been bombed into
ruins. In addition to the tasks of occupation we had to assume all of
the functions of government. Great progress has been made in the
repatriation of displaced persons and of prisoners of war. Of the total
of 3,500,000 displaced persons found in the United States zone only
460,000 now remain.

The extensive complications involved by the requirement of dealing with
three other governments engaged in occupation and with the governments
of liberated countries require intensive work and energetic cooperation.
The influx of some 2 million German refugees into our zone of occupation
is a pressing problem, making exacting demands upon an already
overstrained internal economy.

Improvements in the European economy during 1945 have made it possible
for our military authorities to relinquish to the governments of all
liberated areas, or to the United Nations Relief and Rehabilitation
Administration, the responsibility for the provision of food and other
civilian relief supplies. The Army's responsibilities in Europe extend
now only to our zones of occupation in Germany and Austria and to two
small areas in northern Italy.

By contrast with Germany, in Japan we have occupied a country still
possessing an organized and operating governmental system. Although
severely damaged, the Japanese industrial and transportation systems
have been able to insure at least a survival existence for the
population. The repatriation of Japanese military and civilian personnel
from overseas is proceeding as rapidly as shipping and other means
permit.

In order to insure that neither Germany nor Japan will again be in a
position to wage aggressive warfare, the armament making potential of
these countries is being dismantled and fundamental changes in their
social and political structures are being effected. Democratic systems
are being fostered to the end that the voice of the common man may be
heard in the councils of his government.

For the first time in history the legal culpability of war makers is
being determined. The trials now in progress in Nurnberg-and those soon
to begin in Tokyo--bring before the bar of international justice those
individuals who are charged with the responsibility for the sufferings
of the past six years. We have high hope that this public portrayal of
the guilt of these evildoers will bring wholesale and permanent
revulsion on the part of the masses of our former enemies against war,
militarism, aggression, and notions of race superiority.

4. DEMOBILIZATION OF OUR ARMED FORCES

The cessation of active campaigning does not mean that we can completely
disband our fighting forces. For their sake and for the sake of their
loved ones at home, I wish that we could. But we still have the task of
clinching the victories we have won--of making certain that Germany and
Japan can never again wage aggressive warfare, that they will not again
have the means to bring on another world war. The performance of that
task requires that, together with our allies, we occupy the hostile
areas, complete the disarmament of our enemies, and take the necessary
measures to see to it that they do not rearm.

As quickly as possible, we are bringing about the reduction of our armed
services to the size required for these tasks of occupation and
disarmament. The Army and the Navy are following both length-of-service
and point systems as far as possible in releasing men and women from the
service. The points are based chiefly on length and character of
service, and on the existence of dependents.

Over 5 million from the Army have already passed through the separation
centers.

The Navy, including the Marine Corps and the Coast Guard, has discharged
over one and a half million.

Of the 12 million men and women serving in the Army and Navy at the time
of the surrender of Germany, one-half have already been released. The
greater part of these had to be brought back to this country from
distant parts of the world.

Of course there are cases of individual hardship in retention of
personnel in the service. There will be in the future. No system of such
size can operate to perfection. But the systems are rounded on fairness
and justice, and they are working at full speed. We shall try to avoid
mistakes, injustices, and hardship--as far as humanly possible.

We have already reached the point where shipping is no longer the
bottleneck in the return of troops from the European theater. The
governing factor now has become the requirement for troops in sufficient
strength to carry out their missions.

In a few months the same situation will exist in the Pacific. By the end
of June, 9 out of 10 who were serving in the armed forces on VE-day will
have been released. Demobilization will continue thereafter, but at a
slower rate, determined by our military responsibilities.

Our national safety and the security of the world will require
substantial armed forces, particularly in overseas service. At the same
time it is imperative that we relieve those who have already done their
duty, and that we relieve them as fast as we can. To do that, the Army
and the Navy are conducting recruiting drives with considerable success.

The Army has obtained nearly 400,000 volunteers in the past four months,
and the Navy has obtained 80,000. Eighty percent of these volunteers for
the regular service have come from those already with the colors. The
Congress has made it possible to offer valuable inducements to those who
are eligible for enlistment. Every effort will be made to enlist the
required number of young men.

The War and Navy Departments now estimate that by a year from now we
still will need a strength of about 2 million including officers, for
the armed forces--Army, Navy, and Air. I have reviewed their estimates
and believe that the safety of the Nation will require the maintenance
of an armed strength of this size for the calendar year that is before
us.

In case the campaign for volunteers does not produce that number, it
will be necessary by additional legislation to extend the Selective
Service Act beyond May 16, the date of expiration under existing law.
That is the only way we can get the men and bring back our veterans.
There is no other way. Action along this line should not be postponed
beyond March, in order to avoid uncertainty and disruption.

DOMESTIC AFFAIRS

I. THE ECONOMIC OUTLOOK

Prophets of doom predicted that the United States could not escape a
runaway inflation during the war and an economic collapse after the war.
These predictions have not been borne out. On the contrary, the record
of economic stabilization during the war and during the period of
reconversion has been an outstanding accomplishment.

We know, however, that nothing is as dangerous as overconfidence, in war
or in peace. We have had to fight hard to hold the line. We have made
strenuous efforts to speed reconversion. But neither the danger of a
postwar inflation nor of a subsequent collapse in production and
employment is yet overcome. We must base our policies not on unreasoning
optimism or pessimism but upon a candid recognition of our objectives
and upon a careful analysis of foreseeable trends.

Any precise appraisal of the economic outlook at this time is
particularly difficult. The period of demobilization and reconversion is
fraught with uncertainties. There are also serious gaps in our
statistical information. Certain tendencies are, however, fairly clear
and recognition of them should serve as background for the consideration
of next year's Federal Program. In general, the outlook for business is
good, and it is likely to continue to be good--provided we control
inflation and achieve peace in management labor relations.

Civilian production and employment can be expected to increase
throughout the next year. This does not mean, however, that continuing
full employment is assured. It is probable that demobilization of the
armed forces will proceed faster than the increase in civilian
employment opportunities. Even if substantial further withdrawals from
the labor market occur, unemployment will increase temporarily. The
extent to which this unemployment will persist depends largely on the
speed of industrial expansion and the effectiveness of the policies of
the Federal Government.

Along with extraordinary demand there are still at this time many
critical shortages resulting from the war. These extraordinary demands
and shortages may lead to a speculative boom, especially in the price of
securities, real estate, and inventories.

Therefore, our chief worry still is inflation. While we control this
inflationary pressure we must look forward to the time when this
extraordinary demand will subside. It will be years before we catch up
with the demand for housing. The extraordinary demand for other durable
goods, for the replenishment of inventories, and for exports may be
satisfied earlier. No backlog of demand can exist very long in the face
of our tremendous productive capacity. We must expect again to face the
problem of shrinking demand and consequent slackening in sales,
production, and employment. This possibility of a deflationary spiral in
the future will exist unless we now plan and adopt an effective full
employment program.

2. GENERAL POLICIES--IMMEDIATE AND LONG-RANGE

During the war, production for civilian use was limited by war needs and
available manpower. Economic stabilization required measures, to spread
limited supplies equitably by rationing, price controls, increased
taxes, savings bond campaigns, and credit controls. Now, with the
surrender of our enemies, economic stabilization requires that policies
be directed toward promoting an increase in supplies at low unit prices.

We must encourage the development of resources and enterprises in all
parts of the country, particularly in underdeveloped areas. For example,
the establishment of new peacetime industries in the Western States and
in the South would, in my judgment, add to existing production and
markets rather than merely bring about a shifting of production. I am
asking the Secretaries of Agriculture, Commerce, and Labor to explore
jointly methods for stimulating new industries, particularly in areas
with surplus agricultural labor.

We must also aid small businessmen and particularly veterans who are
competent to start their own businesses. The establishment and
development of efficient small business ventures, I believe, will not
take away from, but rather will add to, the total business of all
enterprises.

Even with maximum encouragement of Production, we cannot hope to remove
scarcities within a short time. The most serious deficiencies will
persist in the fields of residential housing, building materials, and
consumers' durable goods. The critical situation makes continued rent
control, price control, and priorities, allocations, and inventory
controls absolutely essential. Continued control of consumer credit will
help to reduce the pressure on prices of durable goods and will also
prolong the period during which the backlog demand will be effective.

While we are meeting these immediate needs we must look forward to a
long-range program of security and increased standard of living.

The best protection of purchasing power is a policy of full production
and full employment opportunities. Obviously, an employed worker is a
better customer than an unemployed worker. There always will be,
however, some frictional unemployment. In the present period of
transition we must deal with such temporary unemployment as results from
the fact that demobilization will proceed faster than reconversion or
industrial expansion. Such temporary unemployment is probably
unavoidable in a period of rapid change. The unemployed worker is a
victim of conditions beyond his control. He should be enabled to
maintain a reasonable standard of living for himself and his family.

The most serious difficulty in the path of reconversion and expansion is
the establishment of a fair wage structure.

The ability of labor and management to work together, and the wage and
price policies which they develop, are social and economic issues of
first importance.

Both labor and management have a special interest. Labor's interest is
very direct and personal because working conditions, wages, and prices
affect the very life and happiness of the worker and his family.

Management has a no less direct interest because on management rests the
responsibility for conducting a growing and prosperous business.

But management and labor have identical interests in the long run. Good
wages mean good markets. Good business means more jobs and better wages.
In this age of cooperation and in our highly organized economy the
problems of one very soon become the problems of all.

Better human relationships are an urgent need to which organized labor
and management should address themselves. No government policy can make
men understand each other, agree, and get along unless they conduct
themselves in a way to foster mutual respect and good will.

The Government can, however, help to develop machinery which, with the
backing of public opinion, will assist labor and management to resolve
their disagreements in a peaceful manner and reduce the number and
duration of strikes.

All of us realize that productivity--increased output per man--is in the
long run the basis of our standard of living. Management especially must
realize that if labor is to work wholeheartedly for an increase in
production, workers must be given a just share of increased output in
higher wages.

Most industries and most companies have adequate leeway within which to
grant substantial wage increases. These increases will have a direct
effect in increasing consumer demand to the high levels needed.
Substantial wage increases are good business for business because they
assure a large market for their products; substantial wage increases are
good business for labor because they increase labor's standard of
living; substantial wage increases are good business for the country as
a whole because capacity production means an active, healthy, friendly
citizenry enjoying the benefits of democracy under our free enterprise
system.

Labor and management in many industries have been operating successfully
under the Government's wage-price policy. Upward revisions of wage
scales have been made in thousands of establishments throughout the
Nation since VJ-day. It is estimated that about 6 million workers, or
more than 20 percent of all employees in nonagricultural and
nongovernmental establishments, have received wage increases since
August 18, 1945. The amounts of increases given by individual employers
concentrate between 10 and 15 percent, but range from less than 5
percent to over 30 percent.

The United States Conciliation Service since VJ-day has settled over
3,000 disputes affecting over 1,300,000 workers without a strike threat
and has assisted in settling about 1,300 disputes where strikes were
threatened which involved about 500,000 workers. Only workers directly
involved, and not those in related industries who might have been
indirectly affected, are included in these estimates.

Many of these adjustments have occurred in key industries and would have
seemed to us major crises if they had not been settled peaceably.

Within the framework of the wage-price policy there has been definite
success, and it is to be expected that this success will continue in a
vast majority of the cases arising in the months ahead.

However, everyone who realizes the extreme need for a swift and orderly
reconversion must feel a deep concern about the number of major strikes
now in progress. If long continued, these strikes could put a heavy
brake on our program.

I have already made recommendations to the Congress as to the procedure
best adapted to meeting the threat of work stoppages in Nation-wide
industries without sacrificing the fundamental rights of labor to
bargain collectively and ultimately to strike in support of their
position.

If we manage our economy properly, the future will see us on a level of
production half again as high as anything we have ever accomplished in
peacetime. Business can in the future pay higher wages and sell for
lower prices than ever before. This is not true now for all companies,
nor will it ever be true for all, but for business generally it is true.

We are relying on all concerned to develop, through collective
bargaining, wage structures that are fair to labor, allow for necessary
business incentives, and conform with a policy designed to "hold the
line" on prices.

Production and more production was the byword during the war and still
is during the transition from war to peace. However, when deferred
demand slackens, we shall once again face the deflationary dangers which
beset this and other countries during the 1930's. Prosperity can be
assured only by a high level of demand supported by high current income;
it cannot be sustained by deferred needs and use of accumulated savings.

If we take the right steps in time we can certainly avoid the disastrous
excesses of runaway booms and headlong depressions. We must not let a
year or two of prosperity lull us into a false feeling of security and a
repetition of the mistakes of the 1920's that culminated in the crash of
1929.

During the year ahead the Government will be called upon to act in many
important fields of economic policy from taxation and foreign trade to
social security and housing. In every case there will be alternatives.
We must choose the alternatives which will best measure up to our need
for maintaining production and employment in the future. We must never
lose sight of our long-term objectives: the broadening of markets--the
maintenance of steadily rising demand. This demand can come from only
three sources: consumers, businesses, or government.

In this country the job of production and distribution is in the hands
of businessmen, farmers, workers, and professional people-in the hands
of our citizens. We want to keep it that way. However, it is the
Government's responsibility to help business, labor, and farmers do
their jobs.

There is no question in my mind that the Government, acting on behalf of
all the people, must assume the ultimate responsibility for the economic
health of the Nation. There is no other agency that can. No other
organization has the scope or the authority, nor is any other agency
accountable, to all the people. This does not mean that the Government
has the sole responsibility, nor that it can do the job alone, nor that
it can do the job directly.

All of the policies of the Federal Government must be geared to the
objective of sustained full production and full employment-to raise
consumer purchasing power and to encourage business investment. The
programs we adopt this year and from now on will determine our ability
to achieve our objectives. We must continue to pay particular attention
to our fiscal, monetary, and tax policy, programs to aid
business--especially small business--and transportation,
labor-management relations and wage-price policy, social security and
health, education, the farm program, public works, housing and resource
development, and economic foreign policy.

For example, the kinds of tax measures we have at different
times--whether we raise our revenue in a way to encourage consumer
spending and business investment or to discourage it--have a vital
bearing on this question. It is affected also by regulations on consumer
credit and by the money market, which is strongly influenced by the rate
of interest on Government securities. It is affected by almost every
step we take.

In short, the way we handle the proper functions of government, the way
we time the exercise of our traditional and legitimate governmental
functions, has a vital bearing on the economic health of the Nation.

These policies are discussed in greater detail in the accompanying Fifth
Quarterly Report of the Director of War Mobilization and Reconversion.

3. LEGISLATION HERETOFORE RECOMMENDED

AND STILL PENDING

To attain some of these objectives and to meet the other needs of the
United States in the reconversion and postwar period, I have from time
to time made various recommendations to the Congress.

In making these recommendations I have indicated the reasons why I
deemed them essential for progress at home and abroad. A few--a very
few--of these recommendations have been enacted into law by the
Congress. Most of them have not. I here reiterate some of them, and
discuss others later in this Message. I urge upon the Congress early
consideration of them. Some are more urgent than others, but all are
necessary.

(1) Legislation to authorize the President to create fact-finding boards
for the prevention of stoppages of work in Nationwide industries after
collective bargaining and conciliation and voluntary arbitration have
failed--as recommended by me on December 3, 1945.

(2) Enactment of a satisfactory full employment bill such as the Senate
bill now in conference between the Senate and the House--as recommended
by me on September 6, 1945.

(3) Legislation to supplement the unemployment insurance benefits for
unemployed workers now provided by the different States--as recommended
by me on May 1945.

(4) Adoption of a permanent Fair Employment Practice Act--as recommended
by me on September 6, 1945.

(5) Legislation substantially raising the amount of minimum wages now
provided by law--as recommended by me on September 6, 1945.

(6) Legislation providing for a comprehensive program for scientific
research--as recommended by me on September 6, 1945.

(7) Legislation enacting a health and medical care program--as
recommended by me on November 19, 1945.

(8) Legislation adopting the program of universal training--as
recommended by me on October 23, 1945.

(9) Legislation providing an adequate salary scale for all Government
employees in all branches of the Government--as recommended by me on
September 6, 1945.

(10) Legislation making provision for succession to the Presidency in
the event of the death or incapacity or disqualification of the
President and Vice President--as recommended by me on June 19, 1945.

(11) Legislation for the unification of the armed services--as
recommended by me on December 19, 1945.

(12) Legislation for the domestic use and control of atomic energy--as
recommended by me on October 3, 1945.

(13) Retention of the United States Employment Service in the Federal
Government for a period at least up to June 30, 1947--as recommended by
me on September 6, 1945.

(14) Legislation to increase unemployment allowances for veterans in
line with increases for civilians--as recommended by me on September 6,
1945.

(15) Social security coverage for veterans for their period of military
service--as recommended by me on September 6, 1945.

(16) Extension of crop insurance--as recommended by me on September 6,
1945.

(17) Legislation permitting the sale of ships by the Maritime Commission
at home and abroad--as recommended by me on September 6, 1945. I further
recommend that this legislation include adequate authority for
chartering vessels both here and abroad.

(18) Legislation to take care of the stock piling of materials in which
the United States is naturally deficient--as recommended by me on
September 6, 1945.

(19) Enactment of Federal airport legislation-as recommended by me on
September 6, 1945.

(20) Legislation repealing the Johnson Act on foreign loans--as
recommended by me on September 6, 1945.

(21) Legislation for the development of the Great Lakes-St. Lawrence
River Basin-as recommended by me on October 3, 1945.

4. POLICIES IN SPECIFIC FIELDS

(a) Extension of Price Control Act.

Today inflation is our greatest immediate domestic problem. So far the
fight against inflation has been waged successfully. Since May 1943,
following President Roosevelt's "hold the line" order and in the face of
the greatest pressures which this country has ever seen, the cost of
living index has risen only three percent. Wholesale prices in this same
period have been held to an increase of two and one-half percent.

This record has been made possible by the vigorous efforts of the
agencies responsible for this program. But their efforts would have been
fruitless if they had not had the solid support of the great masses of
our people. The Congress is to be congratulated for its role in
providing the legislation under which this work has been carried out.

On VJ-day it was clear to all thinking people that the danger of
inflation was by no means over. Many of us can remember vividly our
disastrous experience following World War I. Then the very restricted
wartime controls were lifted too quickly, and as a result prices and
rents moved more rapidly upward. In the year and a half following the
armistice, rents, food, and clothing shot to higher and still higher
levels.

When the inevitable crash occurred less than two years after the end of
the war, business bankruptcies were widespread. Profits were wiped out.
Inventory losses amounted to billions of dollars. Farm income dropped by
one-half. Factory pay rolls dropped 40 percent, and nearly one-fifth of
all our industrial workers were walking the streets in search of jobs.
This was a grim greeting, indeed, to offer our veterans who had just
returned from overseas.

When I addressed the Congress in September, I emphasized that we must
continue to hold the price line until the production of goods caught up
with the tremendous demands. Since then we have seen demonstrated the
strength of the inflationary pressures which we have to face.

Retail sales in the closing months of 1945 ran 12 percent above the
previous peak for that season, which came in 1944. Prices throughout the
entire economy have been pressing hard against the price ceilings. The
prices of real estate, which cannot now be controlled under the law, are
rising rapidly. Commercial rents are not included in the present price
control law and, where they are not controlled by State law, have been
increasing, causing difficulties to many businessmen.

It will be impossible to maintain a high purchasing power or an
expanding production unless we can keep prices at levels which can be
met by the vast majority of our people. Full production is the greatest
weapon against inflation, but until we can produce enough goods to meet
the threat of inflation the Government will have to exercise its wartime
control over prices.

I am sure that the people of the United States are disturbed by the
demands made by several business groups with regard to price and rent
control.

I am particularly disturbed at the effect such thinking may have on
production and employment. If manufacturers continue to hold back goods
and decline to submit bids when invited--as I am informed some are
doing--in anticipation of higher prices which would follow the end of
price controls, we shall inevitably slow down production and create
needless unemployment. On the other hand, there are the vast majority of
American businessmen who are not holding back goods, but who need
certainty about the Government pricing policy in order to fix their own
long-range pricing policies.

Businessmen are entitled therefore to a dear statement of the policy of
the Government on the subject. Tenants and housewives, farmers and
workers--consumers in general--have an equal right.

We are all anxious to eliminate unnecessary controls just as rapidly as
we can do so. The steps that we have already taken in many directions
toward that end are a clear indication of our policy.

The present Price Control Act expires on June 30, 1946. If we expect to
maintain a steady economy we shall have to maintain price and rent
control for many months to come. The inflationary pressures on prices
and rents, with relatively few exceptions, are now at an all-time peak.
Unless the Price Control Act is renewed there will be no limit to which
our price levels would soar. Our country would face a national disaster.

We cannot wait to renew the act until immediately before it expires.
Inflation results from psychological as well as economic conditions. The
country has a clear right to know where the Congress stands on this
all-important problem. Any uncertainty now as to whether the act will be
extended gives rise to price speculation, to withholding of goods from
the market in anticipation of rising prices, and to delays in achieving
maximum production.

I do not doubt that the Congress will be beset by many groups who will
urge that the legislation that I have proposed should either be
eliminated or modified to the point where it is nearly useless. The
Congress has a clear responsibility to meet this challenge with courage
and determination. I have every confidence that it will do so.

I strongly urge that the Congress now resolve all doubts and as soon as
possible adopt legislation continuing rent and price control in effect
for a full year from June 30, 1946.

(b) Food subsidies.

If the price line is to be held, if our people are to be protected
against the inflationary dangers which confront us, we must do more than
extend the Price Control Act. In September we were hopeful that the
inflationary pressures would by this time have begun to diminish. We
were particularly hopeful on food. Indeed, it was estimated that food
prices at retail would drop from 3 to 5 percent in the first six months
following the end of the war.

In anticipation of this decline in food prices, it was our belief that
food subsidies could be removed gradually during the winter and spring
months, and eliminated almost completely by June 30 of this year. It was
our feeling that the food subsidies could be dropped without an increase
to the consumer in the present level of food prices or in the over-all
cost of living.

As matters stand today, however, food prices are pressing hard against
the ceilings. The expected decline in food prices has not occurred, nor
is it likely to occur for many months to come. This brings me to the
reluctant conclusion that food subsidies must be continued beyond June
30, 1946.

If we fail to take this necessary step, meat prices on July 1 will be
from 3 to 5 cents higher than their average present levels; butter will
be at least 12 cents a pound higher, in addition to the 5 cents a pound
increase of last fall; milk will increase from 1 to 2 cents a quart;
bread will increase about 1 cent a loaf; sugar will increase over 1 cent
a pound; cheese, in addition to the increase of 4 cents now planned for
the latter part of this month, will go up an additional 8 cents. In
terms of percentages we may find the cost-of-living index for food
increased by more than 8 percent, which in turn would result in more
than a 3-percent increase in the cost of living.

If prices of food were allowed to increase by these amounts, I must make
it clear to the Congress that, in my opinion, it would become extremely
difficult for us to control the forces of inflation.

None of us likes subsidies. Our farmers, in particular, have always been
opposed to them.

But I believe our farmers are as deeply conscious as any group in the
land of the havoc which inflation can create. Certainly in the past
eighteen months there has been no group which has fought any harder in
support of the Government's price control program. I am confident that,
if the facts are placed before them and if they see clearly the evils
between which we are forced to choose, they will understand the reasons
why subsidies must be continued.

The legislation continuing the use of food subsidies into the new fiscal
year should be tied down specifically to certain standards. A very
proper requirement, in my opinion, would be that subsidies be removed as
soon as it is indicated that the cost of living will decline below the
present levels.

(c) Extension of War Powers Act.

The Second War Powers Act has recently been extended by the Congress for
six months instead of for a year. It will now expire, unless further
extended, on June 30, 1946. This act is the basis for priority and
inventory controls governing the use of scarce materials, as well as for
other powers essential to orderly reconversion.

I think that this Administration has given adequate proof of the fact
that it desires to eliminate wartime controls as quickly and as
expeditiously as possible. However, we know that there will continue to
be shortages of certain materials caused by the war even after June 30,
1946. It is important that businessmen know now that materials in short
supply are going to be controlled and distributed fairly as long as
these war-born shortages continue.

I, therefore, urge the Congress soon to extend the Second War Powers
Act. We cannot afford to wait until just before the act expires next
June. To wait would cause the controls to break down in a short time,
and would hamper our production and employment program.

(d) Small business and competition.

A rising birth rate for small business, and a favorable environment for
its growth, are not only economic necessities but also important
practical demonstrations of opportunity in a democratic free society. A
great many veterans and workers with new skills and experience will want
to start in for themselves. The opportunity must be afforded them to do
so. They are the small businessmen of the future.

Actually when we talk about small business we are talking about almost
all of the Nation's individual businesses. Nine out of every ten
concerns fall into this category, and 45 percent of all workers are
employed by them. Between 30 and 40 percent of the total value of all
business transactions are handled by small business.

It is obvious national policy to foster the sound development of small
business. It helps to maintain high levels of employment and national
income and consumption of the goods and services that the Nation can
produce. It encourages the competition that keeps our free enterprise
economy vigorous and expanding. Small business, because of its
flexibility, assists in the rapid exploitation of scientific and
technological discoveries. Investment in small business can absorb a
large volume of savings that might otherwise not be tapped.

The Government should encourage and is encouraging small-business
initiative and originality to stimulate progress through competition.

During the war, the Smaller War Plants Corporation assisted small
concerns to make a maximum contribution to victory. The work of the
Smaller War Plants Corporation is being carried on in peacetime by the
Federal Loan Agency and the Department of Commerce. The fundamental
approach to the job of encouraging small concerns must be based on:

1. Arrangements for making private and public financial resources
available on reasonable terms.

2. Provision of technical advice and assistance to business as a whole
on production, research, and management problems. This will help
equalize competitive relationships between large and small companies,
for many of the small companies cannot afford expensive technical
research, accounting, and tax advice.

3. Elimination of trade practices and agreements which reduce
competition and discriminate against new or small enterprises.

We speak a great deal about the free enterprise economy of our country.
It is competition that keeps it free. It is competition that keeps it
growing and developing. The truth is that we need far more competition
in the future than we have had in the immediate past.

By strangling competition, monopolistic activity prevents or deters
investment in new or expanded production facilities. This lessens the
opportunity for employment and chokes off new outlets for idle savings.
Monopoly maintains prices at artificially high levels and reduces
consumption which, with lower prices, would rise and support larger
production and higher employment. Monopoly, not being subject to
competitive pressure, is slow to take advantage of technical advances
which would lower prices or improve quality. All three of these
monopolistic activities very directly lower the standard of
living--through higher prices and lower quality of product--which free
competition would improve.

The Federal Government must protect legitimate business and consumers
from predatory and monopolistic practices by the vigilant enforcement of
regulatory legislation. The program will be designed to have a maximum
impact upon monopolistic bottlenecks and unfair competitive practices
hindering expansion in employment.

During the war, enforcement of antimonopoly laws was suspended in a
number of fields. The Government must now take major steps not only to
maintain enforcement of antitrust laws but to encourage new and
competing enterprises in every way. The deferred demand of the war years
and the large accumulations of liquid assets provide ample incentive for
expansion. Equalizing of business opportunity, under full and free
competition, must be a prime responsibility in the reconversion period
and in the years that follow. Many leading businessmen have recognized
the importance of such action both to themselves and to the economy as a
whole.

But we must do more than break up trusts and monopolies after they have
begun to strangle competition. We must take positive action to foster
new, expanding enterprises. By legislation and by administration we must
take specific steps to discourage the formation or the strengthening of
competition-restricting business. We must have an over-all antimonopoly
policy which can be applied by all agencies of the Government in
exercising the functions assigned to them--a policy designed to
encourage the formation and growth of new and freely competitive
enterprises.

Among the many departments and agencies which have parts in the program
affecting business and competition, the Department of Commerce has a
particularly important role. That is why I have recommended a
substantial increase in appropriations for the next fiscal year for this
Department.

In its assistance to industry, the Department of Commerce will
concentrate its efforts on these primary objectives: Promotion of a
large and well-balanced foreign trade; provision of improved technical
assistance and management aids, especially for small enterprises; and
strengthening of basic statistics on business operations, both by
industries and by regions. To make new inventions and discoveries
available more promptly to all businesses, small and large, the
Department proposes to expand its own research activities, promote
research by universities, improve Patent Office procedures, and develop
a greatly expanded system of field offices readily accessible to the
businesses they serve.

Many gaps exist in the private financial mechanism, especially in the
provision of long-term funds for small- and medium sized enterprises. In
the peacetime economy the Reconstruction Finance Corporation will take
the leadership in assuring adequate financing for small enterprises
which cannot secure funds from other sources. Most of the funds should
and will be provided by private lenders; but the Reconstruction Finance
Corporation will share any unusual risks through guarantees of private
loans, with direct loans only when private capital is unwilling to
participate on a reasonable basis.

(e) Minimum wage.

Full employment and full production may be achieved only by maintaining
a level of consumer income far higher than that of the prewar period. A
high level of consumer income will maintain the market for the output of
our mills, farms, and factories, which we have demonstrated during the
war years that we can produce. One of the basic steps which the Congress
can take to establish a high level of consumer income is to amend the
Fair Labor Standards Act to raise substandard wages to a decent minimum
and to extend similar protection to additional workers who are not
covered by the present act.

Substandard wages are bad for business and for the farmer. Substandard
wages provide only a substandard market for the goods and services
produced by American industry and agriculture.

At the present time the Fair Labor Standards Act prescribes a minimum
wage of 40 cents an hour for those workers who are covered by the act.
The present minimum wage represents an annual income of about $800 to
those continuously employed for 50 weeks--clearly a wholly inadequate
budget for an American family. I am in full accord with the proposal now
pending in the Congress that the statutory minimum be raised immediately
to 65 cents an hour, with further increases to 70 cents after one year
and to 75 cents after two years. I also favor the proposal that the
industry committee procedure be used to set rates higher than 65 cents
per hour during the two-year interval before the 75-cent basic wage
would otherwise become applicable.

The proposed minimum wage of 65 cents an hour would assure the worker an
annual income of about $1,300 a year in steady employment. This amount
is clearly a modest goal. After considering cost-of-living increases in
recent years, it is little more than a 10-cent increase over the present
legal minimum. In fact, if any large number of workers earn less than
this amount, we will find it impossible to maintain the levels of
purchasing power needed to sustain the stable prosperity which we
desire. Raising the minimum to 75 cents an hour will provide the wage
earner with an annual income of $1,500 if he is fully employed.

The proposed higher minimum wage levels are feasible without involving
serious price adjustments or serious geographic dislocations.

Today about 20 percent of our manufacturing wage earners--or about 2
million-earn less than 65 cents an hour. Because wages in most
industries have risen during the war, this is about the same as the
proportion-17 percent--who were earning less than 40 cents an hour in
1941.

I also recommend that minimum wage protection be extended to several
groups of workers not now covered. The need for a decent standard of
living is by no means limited to those workers who happen to be covered
by the act as it now stands. It is particularly vital at this period of
readjustment in the national economy and readjustment in employment of
labor to extend minimum wage protection as far as possible.

Lifting the basic minimum wage is necessary, it is justified as a matter
of simple equity to workers, and it will prove not only feasible but
also directly beneficial to the Nation's employers.

(f) Agricultural programs.

The farmers of America generally are entering the crop year of 1946 in
better financial condition than ever before. Farm mortgage debt is the
lowest in 30 years. Farmers' savings are the largest in history. Our
agricultural plant is in much better condition than after World War I.
Farm machinery and supplies are expected to be available in larger
volume, and farm labor problems will be less acute.

The demand for farm products will continue strong during the next year
or two because domestic purchases will be supplemented by a high level
of exports and foreign relief shipments. It is currently estimated that
from 7 to 10 percent of the total United States food supply may be
exported in the calendar year 1946.

Farm prices are expected to remain at least at their present levels in
the immediate future, and for at least the next 12 months they are
expected to yield a net farm income double the 1935-39 average and
higher than in any year prior to 1943.

We can look to the future of agriculture with greater confidence than in
many a year in the past. Agriculture itself is moving confidently ahead,
planning for another year of big production, taking definite and
positive steps to lead the way toward an economy of abundance.

Agricultural production goals for 1946 call for somewhat greater acreage
than actually was planted in 1945. Agriculture is prepared to
demonstrate that it can make a peacetime contribution as great as its
contribution toward the winning of the war.

In spite of supplying our armed forces and our allies during the war
with a fifth to a fourth of our total food output, farmers were still
able to provide our civilians with 8 percent more food per capita than
the average for the five years preceding the war. Since the surrender of
Japan, civilian food consumption has risen still further. By the end of
1945 the amount of the increase in food consumption was estimated to be
as high as 15 percent over the prewar average. The record shows that the
people of this country want and need more food and that they will buy
more food if only they have the jobs and the purchasing power. The first
essential therefore in providing fully for the welfare of agriculture is
to maintain full employment and a high level of purchasing power
throughout the Nation.

For the period immediately ahead we shall still have the problem of
supplying enough food. If we are to do our part in aiding the
war-stricken and starving countries some of the food desires of our own
people will not be completely satisfied, at least until these nations
have had an opportunity to harvest another crop. During the next few
months the need for food in the world will be more serious than at any
time during the war. And, despite the large shipments we have already
made, and despite what we shall send, there remain great needs abroad.

Beyond the relief feeding period, there will still be substantial
foreign outlets for our farm commodities. The chief dependence of the
farmer, however, as always, must be upon the buying power of our own
people.

The first obligation of the Government to agriculture for the
reconversion period is to make good on its price-support commitments.
This we intend to do, with realistic consideration for the sound
patterns of production that will contribute most to the long-time
welfare of agriculture and the whole Nation. The period during which
prices are supported will provide an opportunity for farmers
individually to strengthen their position in changing over from a
wartime to a peacetime basis of production. It will provide an
opportunity for the Congress to review the needs of agriculture and make
changes in national legislation where experience has shown changes to be
needed. In this connection, the Congress will wish to consider
legislation to take the place of the 1937 Sugar Act which expires at the
end of this year. During this period we must do a thorough job of basic
planning to the end that agriculture shall be able to contribute its
full share toward a healthy national economy.

Our long-range agricultural policies should have two main objectives:
First, to assure the people on the farms a fair share of the national
income; and, second, to encourage an agricultural production pattern
that is best fitted to the Nation's needs. To accomplish this second
objective we shall have to take into consideration changes that have
taken place and will continue to take place in the production of farm
commodities--changes that affect costs and efficiency and volume.

What we seek ultimately is a high level of food production and
consumption that will provide good nutrition for everyone. This cannot
be accomplished by agriculture alone. We can be certain of our capacity
to produce food, but we have often failed to distribute it as well as we
should and to see that our people can afford to buy it. The way to get
good nutrition for the whole Nation is to provide employment
opportunities and purchasing power for all groups that will enable them
to buy full diets at market prices.

Wherever purchasing power fails to reach this level we should see that
they have some means of getting adequate food at prices in line with
their ability to buy. Therefore, we should have available supplementary
programs that will enable all our people to have enough of the right
kind of food.

For example, one of the best possible contributions toward building a
stronger, healthier Nation would be a permanent school-lunch program on
a scale adequate to assure every school child a good lunch at noon. The
Congress, of course, has recognized this need for a continuing
school-lunch program and legislation to that effect has been introduced
and hearings held. The plan contemplates the attainment of this
objective with a minimum of Federal expenditures. I hope that the
legislation will be enacted in time for a permanent program to start
with the beginning of the school year next fall.

We have the technical knowledge and the productive capacity to provide
plenty of good food for every man, woman, and child in the United
States. It is time we made that possibility a reality.

(g) Resource development.

The strength of our Nation and the welfare of the people rest upon the
natural resources of the country. We have learned that proper
conservation of our lands, including our forests and minerals, and wise
management of our waters will add immensely to our national wealth.

The first step in the Government's conservation program must be to find
out just what are our basic resources, and how they should be used. We
need to take, as soon as possible, an inventory of the lands, the
minerals, and the forests of the Nation.

During the war it was necessary to curtail some of our long-range plans
for development of our natural resources, and to emphasize programs
vital to the prosecution of the war. Work was suspended on a number of
flood control and reclamation projects and on the development of our
national forests and parks. This work must now be resumed, and new
projects must be undertaken to provide essential services and to assist
in the process of economic development.

The rivers of America offer a great opportunity to our generation in the
management of the national wealth. By a wise use of Federal funds, most
of which will be repaid into the Treasury, the scourge of floods and
drought can be curbed, water can be brought to arid lands, navigation
can be extended, and cheap power can be brought alike to the farms and
to the industries of our land.

Through the use of the waters of the Columbia River, for example, we are
creating a rich agricultural area as large as the State of Delaware. At
the same time, we are producing power at Grand Coulee and at Bonneville
which played a mighty part in winning the war and which will found a
great peacetime industry in the Northwest. The Tennessee Valley
Authority will resume its peacetime program of promoting full use of the
resources of the Valley. We shall continue our plans for the development
of the Missouri Valley, the Arkansas Valley, and the Central Valley of
California.

The Congress has shown itself alive to the practical requirements for a
beneficial use of our water resources by providing that preference in
the sale of power be given to farmers' cooperatives and public agencies.
The public power program thus authorized must continue to be made
effective by building the necessary generating and transmission
facilities to furnish the maximum of firm power needed at the wholesale
markets, which are often distant from the dam sites.

These great developmental projects will open the frontiers of
agriculture, industry, and commerce. The employment opportunities thus
offered will also go far to ease the transition from war to peace.

(h) Public works.

During the war even urgently needed Federal, State, and local
construction projects were deferred in order to release sources for war
production. In resuming public works construction, it is desirable to
proceed only at a moderate rate, since demand for private construction
will be abnormally high for some time. Our public works program should
be timed to reach its peak after demand for private construction has
begun to taper off. Meanwhile, however, plans should be prepared if we
are to act promptly when the present extraordinary private demand begins
to run out.

The Congress made money available to Federal agencies for their public
works planning in the fiscal year 1946. I strongly recommend that this
policy be continued and extended in the fiscal year 1947.

State and local governments also have an essential role to play in a
national public works program. In my message of September 6, 1945, I
recommended that the Congress vote such grants to State and local
governments as will insure that each level of government makes its
proper contribution to a balanced public construction program.
Specifically, the Federal Government should aid State and local
governments in planning their own public works programs, in undertaking
projects related to Federal programs of regional development, and in
constructing such public works as are necessary to carry out the various
policies of the Federal Government.

Early in 1945 the Congress made available advances to State and local
governments for planning public works projects, and recently made
additional provision to continue these advances through the fiscal year
1946. I believe that further appropriations will be needed for the same
purpose for the fiscal year 1947.

The Congress has already made provision for highway programs. It is now
considering legislation which would expand Federal grants and loans in
several other fields, including construction of airports, hospital and
health centers, housing, water pollution control facilities, and
educational plant facilities. I hope that early action will be taken to
authorize these Federal programs.

With respect to public works of strictly local importance, State and
local governments should proceed without Federal assistance except in
planning. This rule should be subject to review when and if the prospect
of highly adverse general economic developments warrants it.

All loans and grants for public works should be planned and administered
in such a way that they are brought into accord with the other elements
of the Federal Program.

Our long-run objective is to achieve a program of direct Federal and
Federally assisted public works which is planned in advance and
synchronized with business conditions. In this way it can make its
greatest contribution to general economic stability.

(1) National housing program.

Last September I stated in my message to the Congress that housing was
high on the list of matters calling for decisive action.

Since then the housing shortage in countless communities, affecting
millions of families, has magnified this call to action.

Today we face both an immediate emergency and a major postwar problem.

Since VJ-day the wartime housing shortage has been growing steadily
worse and pressure on real estate values has increased. Returning
veterans often cannot find a satisfactory place for their families to
live, and many who buy have to pay exorbitant prices. Rapid
demobilization inevitably means further overcrowding.

A realistic and practical attack on the emergency will require
aggressive action by local governments, with Federal aid, to exploit all
opportunities and to give the veterans as far as possible first chance
at vacancies. It will require continuation of rent control in shortage
areas as well as legislation to permit control of sales prices. It will
require maximum conversion of temporary war units for veterans' housing
and their transportation to communities with the most pressing needs;
the Congress has already appropriated funds for this purpose.

The inflation in the price of housing is growing daily.

As a result of the housing shortage, it is inevitable that the present
dangers of inflation in home values will continue unless the Congress
takes action in the immediate future.

Legislation is now pending in the Congress which would provide for
ceiling prices for old and new houses. The authority to fix such
ceilings is essential. With such authority, our veterans and other
prospective home owners would be protected against a skyrocketing of
home prices. The country would be protected from the extension of the
present inflation in home values which, if allowed to continue, will
threaten not only the stabilization program but our opportunities for
attaining a sustained high level of home construction.

Such measures are necessary stopgaps-but only stopgaps. This emergency
action, taken alone, is good--but not enough. The housing shortage did
not start with the war or with demobilization; it began years before
that and has steadily accumulated. The speed with which the Congress
establishes the foundation for a permanent, long-range housing program
will determine how effectively we grasp the immense opportunity to
achieve our goal of decent housing and to make housing a major
instrument of continuing prosperity and full employment in the years
ahead. It will determine whether we move forward to a stable and healthy
housing enterprise and toward providing a decent home for every American
family.

Production is the only fully effective answer. To get the wheels
turning, I have appointed an emergency housing expediter. I have
approved establishment of priorities designed to assure an ample share
of scarce materials to builders of houses for which veterans will have
preference. Additional price and wage adjustments will be made where
necessary, and other steps will be taken to stimulate greater production
of bottleneck items. I recommend consideration of every sound method for
expansion in facilities for insurance of privately financed housing by
the Federal Housing Administration and resumption of previously
authorized low-rent public housing projects suspended during the war.

In order to meet as many demands of the emergency situation as possible,
a program of emergency measures is now being formulated for action.
These will include steps in addition to those already taken. As quickly
as this program can be formulated, announcement will be made.

Last September I also outlined to the Congress the basic principles for
the kind of decisive, permanent legislation necessary for a long-range
housing program.

These principles place paramount the fact that housing construction and
financing for the overwhelming majority of our citizens should be done
by private enterprise. They contemplate also that we afford governmental
encouragement to privately financed house construction for families of
moderate income, through extension of the successful system of insurance
of housing investment; that research be undertaken to develop better and
cheaper methods of building homes; that communities be assisted in
appraising their housing needs; that we commence a program of Federal
aid, with fair local participation, to stimulate and promote the
rebuilding and redevelopment of slums and blighted areas--with maximum
use of private capital. It is equally essential that we use public funds
to assist families of low income who could not otherwise enjoy adequate
housing, and that we quicken our rate of progress in rural housing.

Legislation now under consideration by the Congress provides for a
comprehensive attack jointly by private enterprise, State and local
authorities, and the Federal Government. This legislation would make
permanent the National Housing Agency and give it authority and funds
for much needed technical and economic research. It would provide
additional stimulus for privately financed housing construction. This
stimulus consists of establishing a new system of yield insurance to
encourage large-scale investment in rental housing and broadening the
insuring powers of the Federal Housing Administration and the lending
powers of the Federal savings and loan associations.

Where private industry cannot build, the Government must step in to do
the job. The bill would encourage expansion in housing available for the
lowest income groups by continuing to provide direct subsidies for
low-rent housing and rural housing. It would facilitate land assembly
for urban redevelopment by loans and contributions to local public
agencies where the localities do their share.

Prompt enactment of permanent housing legislation along these lines will
not interfere with the emergency action already under way. On the
contrary, it would lift us out of a potentially perpetual state of
housing emergency. It would offer the best hope and prospect to millions
of veterans and other American families that the American system can
offer more to them than temporary makeshifts.

I have said before that the people of the United States can be the best
housed people in the world. I repeat that assertion, and I welcome the
cooperation of the Congress in achieving that goal.

(j) Social security and health.

Our Social Security System has just celebrated its tenth anniversary.
During the past decade this program has supported the welfare and morale
of a large part of our people by removing some of the hazards and
hardships of the aged, the unemployed, and widows and dependent
children.

But, looking back over 10 years' experience and ahead to the future, we
cannot fail to see defects and serious inadequacies in our system as it
now exists. Benefits are in many cases inadequate; a great many persons
are excluded from coverage; and provision has not been made for social
insurance to cover the cost of medical care and the earnings lost by the
sick and the disabled.

In the field of old-age security, there seems to be no adequate reason
for excluding such groups as the self-employed, agricultural and
domestic workers, and employees of nonprofit organizations. Since many
of these groups earn wages too low to permit significant savings for old
age, they are in special need of the assured income that can be provided
by old-age insurance.

We must take urgent measures for the readjustment period ahead. The
Congress for some time has been considering legislation designed to
supplement at Federal expense, during the immediate reconversion period,
compensation payments to the unemployed. Again I urge the Congress to
enact legislation liberalizing unemployment compensation benefits and
extending the coverage. Providing for the sustained consumption by the
unemployed persons and their families is more than a welfare policy; it
is sound economic policy. A sustained high level of consumer purchases
is a basic ingredient of a prosperous economy.

During the war, nearly 5 million men were rejected for military service
because of physical or mental defects which in many cases might have
been prevented or corrected. This is shocking evidence that large
sections of the population are at substandard levels of health. The need
for a program that will give everyone opportunity for medical care is
obvious. Nor can there be any serious doubt of the Government's
responsibility for helping in this human and social problem.

The comprehensive health program which I recommended on November 19,
1945, will require substantial additions to the Social Security System
and, in conjunction with other changes that need to be made, will
require further consideration of the financial basis for social
security. The system of prepaid medical care which I have recommended is
expected eventually to require amounts equivalent to 4 percent of
earnings up to $3,600 a year, which is about the average of present
expenditures by individuals for medical care. The pooling of medical
costs, under a plan which permits each individual to make a free choice
of doctor and hospital, would assure that individuals receive adequate
treatment and hospitalization when they are faced with emergencies for
which they cannot budget individually. In addition, I recommended
insurance benefits to replace part of the earnings lost through
temporary sickness and permanent disability.

Even without these proposed major additions, it would now be time to
undertake a thorough reconsideration of our social security laws. The
structure should be expanded and liberalized. Provision should be made
for extending coverage credit to veterans for the period of their
service in the armed forces. In the financial provisions we must
reconcile the actuarial needs of social security, including health
insurance, with the requirements of a revenue system that is designed to
promote a high level of consumption and full employment.

(k) Education.

Although the major responsibility for financing education rests with the
States, some assistance has long been given by the Federal Government.
Further assistance is desirable and essential. There are many areas and
some whole States where good schools cannot be provided without imposing
an undue local tax burden on the citizens. It is essential to provide
adequate elementary and secondary schools everywhere, and additional
educational opportunities for large numbers of people beyond the
secondary level. Accordingly, I repeat the proposal of last year's
Budget Message that the Federal Government provide financial aid to
assist the States in assuring more nearly equal opportunities for a good
education. The proposed Federal grants for current educational
expenditures should be made for the purpose of improving the educational
system where improvement is most needed. They should not be used to
replace existing non-Federal expenditures, or even to restore merely the
situation which existed before the war.

In the future we expect incomes considerably higher than before the war.
Higher incomes should make it possible for State and local governments
and for individuals to support higher and more nearly adequate
expenditures for education. But inequality among the States will still
remain, and Federal help will still be needed.

As a part of our total public works program, consideration should be
given to the need for providing adequate buildings for schools and other
educational institutions. In view of current arrears in the construction
of educational facilities, I believe that legislation to authorize
grants for educational facilities, to be matched by similar expenditures
by State and local authorities, should receive the favorable
consideration of the Congress.

The Federal Government has not sought, and will not seek, to dominate
education in the States. It should continue its historic role of
leadership and advice and, for the purpose of equalizing educational
opportunity, it should extend further financial support to the cause of
education in areas where this is desirable.

(l) Federal Government personnel.

The rapid reconversion of the Federal Government from war to peace is
reflected in the demobilization of its civilian personnel. The number of
these employees in continental United States has been reduced by more
than 500,000 from the total of approximately 2,900,000 employed in the
final months of the war. I expect that by next June we shall have made a
further reduction of equal magnitude and that there will be continuing
reductions during the next fiscal year. Of the special wartime agencies
now remaining, only a few are expected to continue actively into the
next fiscal year.

At the same time that we have curtailed the number of employees, we have
shortened the workweek by one-sixth or more throughout the Government
and have restored holidays. The process of readjustment has been
complicated and costs have been increased by a heavy turn-over in the
remaining personnel--particularly by the loss of some of our best
administrators. Thousands of war veterans have been reinstated or newly
employed in the civil service. Many civilians have been transferred from
war agencies to their former peacetime agencies. Recruitment standards,
which had to be relaxed during the war, are now being tightened.

The elimination last autumn of overtime work for nearly all Federal
employees meant a sharp cut in their incomes. For salaried workers, the
blow was softened but by no means offset by the increased rates of pay
which had become effective July 1. Further adjustments to compensate for
increased living costs are required. Moreover, we have long needed a
general upward revision of Federal Government salary scales at all
levels in all branches--legislative, judicial, and executive. Too many
in Government have had to sacrifice too much in economic advantage to
serve the Nation.

Adequate salaries will result in economies and improved efficiency in
the conduct of Government business--gains that will far outweigh the
immediate costs. I hope the Congress will expedite action on salary
legislation for all Federal employees in all branches of the Government.
The only exception I would make is in the case of workers whose pay
rates are established by wage boards; a blanket adjustment would destroy
the system by which their wages are kept aligned with prevailing rates
in particular localities. The wage boards should be sensitive now, as
they were during the war, to changes in local prevailing wage rates and
should make adjustments accordingly.

I hope also that the Congress may see fit to enact legislation for the
adequate protection of the health and safety of Federal employees, for
their coverage under a system of unemployment compensation, and for
their return at Government expense to their homes after separation from
wartime service.

(m) Territories, insular possessions, and the District of Columbia.

The major governments of the world face few problems as important and as
perplexing as those relating to dependent peoples. This Government is
committed to the democratic principle that it is for the dependent
peoples themselves to decide what their status shall be. To this end I
asked the Congress last October to provide a means by which the people
of Puerto Rico might choose their form of government and ultimate status
with respect to the United States. I urge, too, that the Congress
promptly accede to the wishes of the people of Hawaii that the Territory
be admitted to statehood in our Union, and that similar action be taken
with respect to Alaska as soon as it is certain that this is the desire
of the people of that great Territory. The people of the Virgin Islands
should be given an increasing measure of self-government.

We have already determined that the Philippine Islands are to be
independent on July 4, 1946. The ravages of war and enemy occupation,
however, have placed a heavy responsibility upon the United States. I
urge that the Congress complete, as promptly and as generously as may be
possible, legislation which will aid economic rehabilitation for the
Philippines. This will be not only a just acknowledgment of the loyalty
of the people of the Philippines, but it will help to avoid the economic
chaos which otherwise will be their heritage from our common war.
Perhaps no event in the long centuries of colonialism gives more hope
for the pattern of the future than the independence of the Philippines.

The District of Columbia, because of its special relation to the Federal
Government, has been treated since 1800 as a dependent area. We should
move toward a greater measure of local self-government consistent with
the constitutional status of the District. We should take adequate steps
to assure that citizens of the United States are not denied their
franchise merely because they reside at the Nation's Capital.

III. THE BUDGET FOR THE FEDERAL PROGRAM

FOR THE FISCAL YEAR 1947

SUMMARY OF THE BUDGET

For the first time since the fiscal year 1930 the Budget for the next
fiscal year will require no increase in the national debt.

Expenditures of all kinds, authorized and recommended, in the next year
are estimated at just above 35.8 billion dollars. Net receipts are
estimated at 31.5 billion dollars. The estimated difference of 4.3
billion dollars will be met by a reduction in the very substantial
balance which will be in the Treasury during the next fiscal year.

A large part of the activities outside defense and war liquidation,
aftermath of war, and international finance, classified as "other
activities" in a following table, is still due to repercussions of the
war. These "other activities" include more than 2 billion dollars for
aids to agriculture and net outlays for the Commodity Credit
Corporation-almost double the expenditures for the same purposes in
prewar years. This increase is due mainly to expenditures for purposes
of price stabilization and price support resulting from the war food
production program. Other increases in this category are due to the fact
that certain wartime agencies now in the process of liquidation are
included in this group of activities. If all expenditures for those
activities which are directly or indirectly related to the war are
excluded, the residual expenditures are below those for corresponding
activities in prewar years. In making this comparison account should be
taken of the fact that, while prewar expenditures were affected by
direct relief and work relief for the unemployed, the postwar budgets
are affected by the considerable increase in pay rates and other
increases in costs and prices.

To elaborate, the Budget, as I have remarked above, reflects on both
sides of the ledger the Government's program as recommended by the
Executive. It includes estimates not only of expenditures and receipts
for which legislative authority already exists, but also of expenditures
and receipts for which authorization is recommended.

The Budget total for the next fiscal year, the year that ends on June
30, 1947, is estimated at just above 35.8 billion dollars-about a third
of the budgets for global war, although nearly four times the prewar
budgets. This estimate is based on the assumption that a rapid
liquidation of the war program will be associated with rapid
reconversion and expansion of peacetime production. The total includes
net outlays of Government corporations.

The estimated expenditures in the next and current fiscal year compare
as follows with those of a year of global war and a prewar year:

Total Budget expenditures

Fiscal year: (in millions)

1947 $35, 860

1946 67,229

1945 100, 031

1940 9,252

Although allowances for occupation, demobilization, and defense are
drastically reduced in the fiscal year 1947, they will still amount to
42 percent of the total Budget. The so-called "aftermath of war"
expenditures account for a further 30 percent of the total. The total of
all other programs, which was drastically cut during the war, is
increasing again as liquidation of the war program proceeds and renewed
emphasis is placed on the peacetime objectives of the Government.

On the other side of the ledger, net receipts are estimated at 31.5
billion dollars. This estimate assumes that all existing taxes will
continue all through the fiscal year 1947. Included are the
extraordinary receipts from the disposal of surplus property.

As a result, estimated expenditures will exceed estimated receipts by
4.3 billion dollars. This amount can be provided by a reduction in the
cash balance in the Treasury. Thus, after a long period of increasing
public debt resulting from depression budgets and war budgets, it is
anticipated that no increase in the Federal debt will be required next
year.

FEDERAL BUDGET EXPENDITURES AND BUDGET RECEIPTS

Including net outlays of Government corporations and credit agencies
(based on existing and proposed legislation)

Fiscal year

Expenditures: 1946 1947

Defense, war, and war liquidation $49,000 $15,000

Aftermath of war: Veterans, interest, refunds 10,813 10,793

International finance (including proposed legislation) 2,614 2,754

Other activities 4,552 5,813

Activities based on proposed legislation

(excluding international finance) 2501,500

Total expenditures 67, 229 35, 860

Receipts (net) 38, 60931,513

Excess of expenditures 28,620 4,347

The current fiscal year, 1946, is a year of transition. When the year
opened, in July 1945, we were still fighting a major war, and Federal
expenditures were running at an annual rate of about 100 billion
dollars. By June 1946 that rate will be more than cut in half. The
Budget total for the current fiscal year is now estimated at 67.2
billion dollars, of which more than two-thirds provides for war and war
liquidation. Since net receipts are estimated at 38.6 billion dollars,
there will be an excess of expenditures of 28.6 billion dollars for the
current fiscal year.

For all programs discussed in this Message I estimate the total of
Budget appropriations and authorizations (including reappropriations and
permanent appropriations) at 30,982 million dollars for the fiscal year
1947. Of this amount, present permanent appropriations are expected to
provide 5,755 million dollars, principally for interest. This leaves
24,224 million dollars to be made available through new appropriations,
exclusive of appropriations to liquidate contract authorizations; 900
million dollars in new contract authorizations; and 103 million dollars
through the reappropriation of unliquidated balances of previous
appropriations. The appropriations needed to liquidate contract
authorizations are estimated at 1,113 million dollars.

In the Budget for the year ahead only over-all estimates are included at
this time for the major war agencies and for net outlays of Government
corporations. Detailed recommendations will be transmitted in the spring
for the war agencies; and the business-type budgets of Government
corporations will likewise be transmitted in accordance with the
recently adopted Government Corporation Control Act.

Similarly, only over-all estimates are provided for new programs
recommended in this Message; detailed recommendations will be
transmitted after authorizing legislation has been enacted. It should be
recognized that many of the estimates for new programs recommended in
this Message are initial year figures. These figures will be affected by
the date the legislation is enacted and by the time needed for getting a
program under way. New programs, such as that for a national research
agency, will require larger amounts in later years. The estimates
exclude major elements of the proposed national health program since the
greater part of these will be covered by expenditures from trust funds.

The Budget total includes expenditures for capital outlay as well as for
current operations. An estimated 1,740 million dollars will be expended
in the fiscal year 1947 for direct Federal public works and for loans
and grants for public works.

THE ECONOMIC IMPACT Of THE LIQUIDATION

OF THE WAR PROGRAM

Government programs are of such importance in the development of
production and employment opportunities--domestic and
international--that it has become essential to formulate and consider
the Federal Budget in the light of the Nation's budget as a whole. The
relationship between the receipts, expenditures, and savings of
consumers, business, and government is shown in the accompanying table.

Considering the whole Nation, total expenditures must equal the total
receipts, because what any individual or group spends becomes receipts
of other individuals or groups. Such equality can be achieved on either
a high level of incomes or on a low or depression level of incomes.

Tremendous orders for munitions during the war shifted production and
employment into high gear. Total goods produced and services rendered
for private as well as for Government purposes--the Nation's
budget-reached about 200 billion dollars in the calendar year 1944.
Federal, State, and local government expenditures represented half of
this total.

Corresponding estimates for the past 3 months depict the national
economy in the process of demobilization and reconversion.

The wartime annual rate of Federal expenditures has been reduced by 32
billion dollars, while the Nation's budget total has dropped only half
as much. The drop in total value of production and services has been
less drastic because increasing private activities have absorbed in
large measure the manpower and materials released from war production
and war services.

The largest increase in private activities has occurred in business
investments, which include residential and other construction,
producers' durable equipment, accumulation of inventories, and net
exports. Under conditions of global war, expenditures for private
construction and equipment were held to a minimum and inventories were
depleted. With the beginning of reconversion these developments have
been reversed. Residential construction and outlays for plant and
equipment are on the increase; inventories, too, are being replenished.
International transactions (excluding lend-lease and international
relief which are included under war expenditures) showed an import
surplus under conditions of global war. In the past 3 months private
exports have been slightly in excess of imports, for the first time
since 1941.

Consumers' budgets show a significant change. On the income side, their
total has declined but little because the reduction in "take-home" pay
of war workers is, to a large extent, offset for the time being by the
mustering-out payments received by war veterans and by unemployment
compensation received by the unemployed. On the expenditure side,
however, consumers' budgets, restricted during the war, have in creased
substantially as a result of the fact that scarce goods are beginning to
appear on the market and wartime restraints are disappearing. Thus,
consumers' current savings are declining substantially from the
extraordinarily high wartime rate and some wartime savings are beginning
to be used for long-delayed purchases.

THE GOVERNMENT'S BUDGET AND THE NATION'S BUDGET

Calendar year 1944 and October-December 1945

Oct.-Dec. 1945 (start of

reconversion) (in seasonally

Calendar Year 1944 (global war) adjusted annual rates)

______________________ ____________________

Excess Excess

Expendi- (+), def- Expendi- (+),def-

Economic Group Receipts tures icit(-) Receipts tures icit(-) CONSUMERS

Income after taxes $134 ....... ...... $132 ...... .......

Expenditures ......$98............$107 .......

Excess of receipts, savings (+) ...... ...... +$35 ...... ...... +$25
BUSINESS

Undistributed profits and reserves $13 ...... ...... $9 ...... ......

Gross capital formation:

Domestic ...... $4 ...... ...... $15 ......

Net exports1 ......--2............1......

Total, gross capital formation ......2............16......

Excess of receipts (+) or capital

formation (--) ...... ...... +$11 ...... ...... --$7

STATE AND LOCAL GOVERNMENT

Receipts from the public, other

than borrowing $10 ...... ...... $11 ...... ......

Payments to the public ...... $8............$9......

Excess of receipts (+) ............+$2............+$2

FEDERAL GOVERNMENT

Receipts from the public, other

than borrowing $48 ...... ....... $44 ...... ......

Payments to the public ......$96 .............$64......

Excess of payments (--) ............--$48............. --$20

Less: Adjustments2 $7 $7 ....... $14 $14 .......

TOTAL: GROSS NATIONAL PRODUCT

Receipts $198 ....... ...... $182 ...... ......

Expenditures ......$198............ $182......

Balance ...... ...... 0 ...... ...... ......

1 Excludes exports for lend-lease and relief which are included in
Federal Government expenditures.

2 Mainly government expenditures for other than goods and services, such
as mustering-out pay and unemployment compensation.

Unemployment has increased less than was expected during this first
period of demobilization and reconversion. It is true that 6 million men
and women have been discharged from the armed forces since May 1945 and
more than 5 million have been laid off from war work. On the other hand,
more than a million civilians have been enlisted in the armed forces, a
considerable number of war veterans have not immediately sought jobs,
and many war workers, especially women, have withdrawn from the labor
force. In addition, many industries, and especially service trades which
were undermanned during the war, are beginning now, for the first time
in years, to recruit an adequate labor force. The reduced workweek has
also contributed to the absorption of those released from war service
and war work.

In general, the drastic cut in war programs has thrown the economy into
lower gear; it has not thrown it out of gear. Our economic machine
demonstrates remarkable resiliency, although there are many difficulties
that must still be overcome. The rapid termination of war contracts,
prompt clearance of unneeded Government-owned equipment from private
plants, and other reconversion policies have greatly speeded up the
beginning of peacetime work in reconverted plants.

Although the first great shock of demobilization and war-work
termination has thus been met better than many observers expected,
specific industries and specific regions show much unevenness in the
progress of reconversion.

The Quarterly Report of the Director of War Mobilization and
Reconversion analyzes the difficulties in recruiting personnel and
obtaining materials that hamper reconversion in certain industries and
proposes policies to deal with these situations. The lack of adequate
housing is one of the main factors checking the flow of workers into
areas where job opportunities exist.

FEDERAL REVENUE, BORROWING, AND THE

PUBLIC DEBT

I. FINANCIAL REQUIREMENTS AND TAX POLICY

Recommendations for tax legislation should be considered not only in the
light of the financial requirements of the ensuing year, but also in the
light of future years' financial requirements and a full consideration
of economic conditions.

Expenditures are estimated at nearly 36 billion dollars in the fiscal
year 1947; they can hardly be expected to be reduced to less than 25
billion dollars in subsequent years. Net receipts in the fiscal year
1947 are estimated at 31.5 billion dollars.

Included in this estimate are 2 billion dollars of receipts from
disposal and rental of surplus property and 190 million dollars of
receipts from renegotiation of wartime contracts. These sources of
receipts will disappear in future years. Tax collections for the fiscal
year 1947 also will not yet fully reflect the reduction in corporate tax
liabilities provided in the Revenue Act of 1945. If the extraordinary
receipts from the disposal of surplus property and renegotiation of
contracts be disregarded, and if the tax reductions adopted in the
Revenue Act of 1945 were fully effective, present tax rates would yield
about 27 billion dollars.

These estimates for the fiscal year 1947 are based on the assumption of
generally favorable business conditions but not on an income reflecting
full employment and the high productivity that we hope to achieve. In
future years the present tax system, in conjunction with a full
employment level of national income, could be expected to yield more
than 30 billion dollars, which is substantially above the anticipated
peacetime level of expenditures.

In view of the still extraordinarily large expenditures in the coming
year and continuing inflationary pressures, I am making no
recommendation for tax reduction at this time.

We have already had a substantial reduction in taxes from wartime peaks.
The Revenue Act of 1945 was a major tax-reduction measure. It decreased
the total tax load by more than one-sixth, an amount substantially in
excess of the reductions proposed by the Secretary of the Treasury to
congressional tax committees in October 1945. These proposed reductions
were designed to encourage reconversion and peacetime business
expansion.

The possibility of further tax reductions must depend on the budgetary
situation and the economic situation. The level of anticipated
expenditures for the fiscal year 1947 and the volume of outstanding
public debt require the maintenance of large revenues.

Moreover, inflationary pressures still appear dangerously powerful, and
ill-advised tax reduction would operate to strengthen them still
further.

My decision not to recommend additional tax reductions at this time is
made in the light of existing economic conditions and prospects.

2. BORROWING AND THE PUBLIC DEBT

The successful conclusion of the Victory loan marked the end of war
borrowing and the beginning of the transition to postwar debt
management.

Because of the success of the Victory loan, I am happy to report that
the Treasury will not need to borrow any new money from the public
during the remainder of the present fiscal year except through regular
sales of savings bonds and savings notes. Furthermore, a part of the
large cash balance now in the Treasury will be used for debt redemption
so that the public debt which now amounts to about 278 billion dollars
will decrease by several billion dollars during the next 18 months. The
present statutory debt limit of 300 billion dollars will provide an
ample margin for all of the public-debt transactions through the fiscal
year 1947. The net effect of the excess of expenditures and debt
redemption on the Treasury cash balance, as compared with selected
previous years, is shown in the following table:

EXCESS Of BUDGET EXPENDITURES, THE PUBLIC DEBT, AND THE TREASURY CASH
BALANCE IN SELECTED YEARS

Excess of At end of period

Budget ex- _____________________

penditures Public Cash bal-

Fiscal Year over receipts debt ance

1940 $3. 9 $43. 0 $1. 9

1945 53. 6 258. 7 24. 7 1946:

July-Dec. 1945 18. 1 278. 1 26. 0

Jan.-June 1946 10. 5 275. 0 11. 9

1947 4. 3 271. 0 3. 2

Although the public debt is expected to decline, a substantial volume of
refinancing will be required, because of the large volume of maturing
obligations. Redemptions of savings bonds also have been running high in
recent months and are expected to remain large for some time. The
issuance of savings bonds will be continued. These bonds represent a
convenient method of investment for small savers, and also an
anti-inflationary method of refinancing. Government agencies and trust
funds are expected to buy about 2.5 billion dollars of Government
securities during the next 6 months, and 2.8 billion dollars more during
the fiscal year 1947. Through these and other debt operations, the
distribution of the Federal debt among the various types of public and
private owners will change, even though the total is expected to
decline.

The interest policies followed in the refinancing operations will have a
major impact not only on the provision for interest payments in future
budgets, but also on the level of interest rates prevailing in private
financing. The average rate of interest on the debt is now a little
under 2 percent. Low interest rates will be an important force in
promoting the full production and full employment in the postwar period
for which we are all striving. Close wartime cooperation between the
Treasury Department and the Federal Reserve System has made it possible
to finance the most expensive war in history at low and stable rates of
interest. This cooperation will continue.

No less important than the level of interest rates paid on the debt is
the distribution of its ownership. Of the total debt, more than half
represents direct savings of individuals or investments of funds
received from individual savings by life insurance companies, mutual
savings banks, savings and loan associations, private or Government
trust funds, and other agencies.

Most of the remaining debt--more than 100 billion dollars--is held by
the commercial banks and the Federal Reserve banks. Heavy purchases by
the banks were necessary to provide adequate funds to finance war
expenditures. A considerable portion of these obligations are short-term
in character and hence will require refinancing in the coming months and
years. Since they have been purchased out of newly created bank funds,
continuance of the present low rates of interest is entirely
appropriate. To do otherwise would merely increase bank profits at the
expense of the taxpayer.

The 275-billion dollar debt poses a problem that requires careful
consideration in the determination of financial and economic policies.
We have learned that the problem, serious as it is, can be managed. Its
management will require determined action to keep our Federal Budget in
order and to relate our fiscal policies to the requirements of an
expanding economy. The more successful we are in achieving full
production and full employment the easier it will be to manage the debt
and pay for the debt service. Large though the debt is, it is within our
economic capacity. The interest charges on it amount to but a small
proportion of our national income. The Government is determined, by a
resolute policy of economic stabilization, to protect the interests of
the millions of American citizens who have invested in its securities.

During the past 6 months the net revenue receipts of the Federal
Government have been about 20 billion dollars, almost as much as during
the closing 6 months of 1944 when the country was still engaged in
all-out warfare. The high level of these receipts reflects the
smoothness of the reconversion and particularly the strength of consumer
demand. But the receipts so far collected, it must be remembered, do not
reflect any of the tax reductions made by the Revenue Act of 1945. These
reductions will not have their full effect on the revenue collected
until the fiscal year 1948.

It is good to move toward a balanced budget and a start on the
retirement of the debt at a time when demand for goods is strong and the
business outlook is good. These conditions prevail today. Business is
good and there are still powerful forces working in the direction of
inflation. This is not the time for tax reduction.

RECOMMENDATIONS FOR SPECIFIC FEDERAL ACTIVITIES

1. WAR LIQUIDATION AND NATIONAL DEFENSE

(a) War expenditures.

The fiscal year 1947 will see a continuance of war liquidation and
occupation. During this period we shall also lay the foundation for our
peacetime system of national defense.

In the fiscal year that ended on June 30, 1945, almost wholly a period
of global warfare, war expenditures amounted to 90.5 billion dollars.
For the fiscal year 1946 war expenditures were originally estimated at
70 billion dollars. That estimate was made a year ago while we were
still engaged in global warfare. After victory over Japan this estimate
was revised to 50.5 billion dollars. Further cut-backs and accelerated
demobilization have made possible an additional reduction in the rate of
war spending. During the first 6 months 32.9 billion dollars were spent.
It is now estimated that 16.1 billion dollars will be spent during the
second 6 months, or a total of 49 billion dollars during the whole
fiscal year.

For the fiscal year 1947 it is estimated, tentatively, that expenditures
for war liquidation, for occupation, and for national defense will be
reduced to 15 billion dollars. The War and Navy Departments are expected
to spend 13 billion dollars; expenditures of other agencies, such as the
United States Maritime Commission, the War Shipping Administration, and
the Office of Price Administration, and payments to the United Nations
Relief and Rehabilitation Administration are estimated at 3 billion
dollars. Allowing for estimated net receipts of 1 billion dollars
arising from war activities of the Reconstruction finance Corporation,
the estimated total of war expenditures is 15 billion dollars. At this
time only a tentative break-down of the total estimate for war and
defense activities can be indicated.

An expenditure of 15 billion dollars for war liquidation, occupation,
and national defense is a large sum for a year which begins 10 months
after fighting has ended. It is 10 times our expenditures for defense
before the war; it amounts to about 10 percent of our expected national
income. This estimate reflects the immense job that is involved in
winding up a global war effort and stresses the great responsibility
that victory has placed upon this country. The large expenditures needed
for our national defense emphasize the great scope for effective
organization in furthering economy and efficiency. To this end I have
recently recommended to the Congress adoption of legislation combining
the War and Navy Departments into a single Department of National
Defense.

A large part of these expenditures is still to be attributed to the
costs of the war. Assuming, somewhat arbitrarily, that about one-half of
the 15-billion-dollar outlay for the fiscal year 1947 is for war
liquidation, aggregate expenditures by this Government for the second
World War are now estimated at 347 billion dollars through June 30,
1947. Of this, about 9 billion dollars will have been recovered through
renegotiation and sale of surplus property by June 30, 1947; this has
been reflected in the estimates of receipts.

Demobilization and strength of armed forces.--Demobilization of our
armed forces is proceeding rapidly. At the time of victory in Europe,
about 12.3 million men and women were in the armed forces; 7.6 million
were overseas. By the end of December 1945 our armed forces had been
reduced to below 7 million. By June 30, 1946, they will number about 2.9
million, of whom 1.8 million will be individuals enlisted and inducted
after VE-day. Mustering-out pay is a large item of our war liquidation
expense; it will total 2.5 billion dollars in the fiscal year 1946, and
about 500 million dollars in the fiscal year 1947.

In the fiscal year 1947 the strength of our armed forces will still be
above the ultimate peacetime level. As I have said, War and Navy
Department requirements indicate a strength of about 2 million in the
armed forces a year from now. This is necessary to enable us to do our
share in the occupation of enemy territories and in the preservation of
peace in a troubled world. Expenditures for pay, subsistence, travel,
and miscellaneous expenses of the armed forces, excluding mustering-out
pay, are estimated at 5 billion dollars.

Contract settlement and surplus property disposal.--The winding up of
war procurement is the second most important liquidation job. By the end
of November a total of 301,000 prime contracts involving commitments of
64 billion dollars had been terminated. Of this total, 67,000 contracts
with commitments of 35 billion dollars remained to be settled.
Termination payments on these contracts are estimated at about 3.5
billion dollars. It is expected that more than half of these terminated
contracts will be settled during the current fiscal year, leaving
payments of about 1.5 billion dollars for the fiscal year 1947.

Another important aspect of war supply liquidation is the disposal of
surplus property. Munitions, ships, plants, installations, and supplies,
originally costing 50 billion dollars or more, will ultimately be
declared surplus. The sale value of this property will be far less than
original cost and disposal expenses are estimated at 10 to 15 cents on
each dollar realized. Disposal units within existing agencies have been
organized to liquidate surplus property under the direction of the
Surplus Property Administration. Overseas disposal activities have been
centralized in the State Department to permit this program to be carried
on in line with over-all foreign policy. Thus far only about 13 billion
dollars of the ultimate surplus, including 5 billion dollars of
unsalable aircraft, has been declared. Of this amount, 2.3 billion
dollars have been disposed of, in sales yielding 600 million dollars.
The tremendous job of handling surplus stocks will continue to affect
Federal expenditures and receipts for several years. The speed and
effectiveness of surplus disposal operations will be of great importance
for the domestic economy as well as for foreign economic policies.

War supplies, maintenance, and relief.-Adequate provision for the
national defense requires that we keep abreast of scientific and
technical advances. The tentative estimates for the fiscal year 1947
make allowance for military research, limited procurement of weapons in
the developmental state, and some regular procurement of munitions which
were developed but not mass-produced when the war ended. Expenditures
for procurement and construction will constitute one-third or less of
total defense outlays, compared to a ratio of two-thirds during the war
years.

The estimates also provide for the maintenance of our war-expanded naval
and merchant fleets, military installations, and stocks of military
equipment and supplies. Our naval combatant fleet is three times its
pre-Pearl Harbor tonnage. Our Merchant Marine is five times its prewar
size. The War Department has billions of dollars worth of equipment and
supplies. Considerable maintenance and repair expense is necessary for
the equipment which we desire to retain in active status or in war
reserve. Expenses will be incurred for winnowing the stocks of
surpluses, for preparing lay-up facilities for the reserve fleets, and
for storage of reserve equipment and supplies.

Military expenditures .in the current fiscal year include 650 million
dollars for civilian supplies for the prevention of starvation and
disease in occupied areas. Expenditures on this account will continue in
the fiscal year 1947. The war expenditures also cover the expenses of
civilian administration in occupied areas.

During the war, 15 cents of each dollar of our war expenditures was for
lend-lease aid. With lend-lease terminated, I expect the direct
operations under this program to be substantially completed in the
current fiscal year. The expenditures estimated for the fiscal year 1947
under this program are mainly interagency reimbursements for past
transactions.

Relief and rehabilitation expenditures are increasing. It is imperative
that we give all necessary aid within our means to the people who have
borne the ravages of war. I estimate that in the fiscal year 1946
expenditures for the United Nations Relief and Rehabilitation
Administration will total 1.3 billion dollars and in the following year
1.2 billion dollars. Insofar as possible, procurement for this purpose
will be from war surpluses.

(b) Authorizations for war and national defense.

During the war, authorizations and appropriations had to be enacted well
in advance of obligation and spending to afford ample time for planning
of production by the procurement services and by industry. Thus our
cumulative war program authorized in the period between July 1, 1940,
and July 1, 1945, was 431 billion dollars, including net war commitments
of Government corporations. Expenditures against those authorizations
totaled 290 billion dollars. This left 141 billion dollars in
unobligated authorizations and unliquidated obligations.

With the end of fighting, it became necessary to adjust war
authorizations to the requirements of war liquidation and continuing
national defense. Intensive review of the war authorizations by both the
executive and the legislative branches has been continued since VJ-day.
As a result, the authorized war program is being brought more nearly
into line with expenditures.

Recisions and authorizations through the fiscal year 1946.--Readjusting
the war program, as the Congress well knows, is not an easy task.
Authorizations must not be too tight, lest we hamper necessary
operations; they must not be too ample, lest we lose control of
spending. Last September, I transmitted to the Congress recommendations
on the basis of which the Congress voted H.R. 4407 to repeal 50.3
billion dollars of appropriations and authorizations. I found it
necessary to veto this bill because it was used as a vehicle for
legislation that would impair the reemployment program. However, in
order to preserve the fine work of the Congress on the recisions, I
asked the Director of the Bureau of the Budget to place the exact
amounts indicated for repeal in a nonexpendable reserve, and to advise
the departments and agencies accordingly. This has been done.

In accord with Public Law 132 of the Seventy-ninth Congress, I have
transmitted recommendations for additional rescissions for the current
fiscal year of appropriations amounting to 5.8 billion dollars and of
contract authorizations totaling 420 million dollars. The net reduction
in authority to obligate will be 5.0 billion dollars, because, of the
appropriations, 1.2 billion dollars will have to be restored in
subsequent years to liquidate contract authorizations still on the
books.

The appropriations recommended for repeal include 2,827 million dollars
for the Navy Department, 1,421 million dollars for the War Department,
850 million dollars for lend-lease, 384 million dollars for the War
Shipping Administration, and 260 million dollars for the United States
Maritime Commission. The contract authorizations proposed for repeal are
for the Maritime Commission.

In addition, there are unused tonnage authorizations for construction of
naval vessels now valued at 5.4 billion dollars. In September 1945, I
suggested that this authority be reviewed by the appropriate committees
of the Congress, and the Congress has moved to bar construction under
these authorizations during the remainder of the fiscal year 1946. I
propose to continue this prohibition in the Navy budget estimates for
the fiscal year 1947 and now renew my recommendation that legislation be
enacted at the earliest time to dear the statute books of these
authorizations.

The amounts indicated for repeal in H.R. 4407 and the further
rescissions which I have recommended, excluding duplications and
deferred cash payments on existing authorizations, represent a cut in
the authorized war program of 60.8 billion dollars. The war
authorizations will also be reduced 3'7 billion dollars by carrying
receipts of revolving accounts to surplus, by lapses, and by
cancellation and repayment of commitments of the Government war
corporations.

On the other hand, supplemental appropriations of 600 million dollars
will be required for the United Nations Relief and Rehabilitation
Administration.

In the net, it is estimated that the cumulative authorized war and
national defense program will amount to 368 billion dollars on June 30,
1946. Expenditures of 49 billion dollars during the fiscal year 1946
will have pushed cumulative expenditures to 339 billion dollars. The
unexpended balances will be down to 28 billion dollars on June 30, 1946.

New authorizations for national defense and war liquidation in the
fiscal year 1947.-The expenditures of 15 billion dollars for national
defense and war liquidation in the fiscal year 1947 will be partly for
payment of contractual obligations incurred in the past, and partly for
the payment of new obligations. The unexpended balances on June 30,
1946, will be scattered among hundreds of separate appropriations. Thus,
while some appropriation accounts will have unused balances, others will
require additional appropriations.

It is estimated that authorizations to incur new obligations of 11,772
million dollars will be needed during the fiscal year 1947, mainly for
the War and Navy Departments. Of the required authorizations, 11,365
million dollars will be in new appropriations, 400 million dollars in
new contract authority, and 7 million dollars in reappropriations of
unobligated balances. In addition, appropriations of 825 million dollars
will be needed to liquidate obligations under existing contract
authorizations.

Taking into account the tentative authorizations and expenditures
estimated for the fiscal year 1947, and offsets of 3 billion dollars in
war commitments of Government corporations, the cumulative authorized
war and national defense program on June 30, 1947, will be 376 billion
dollars; total expenditures, 354 billion dollars; and unexpended
balances, 22 billion dollars.

The 22 billion dollars of unexpended balances tentatively indicated as
of June 30, 1947, comprise both unobligated authorizations and
unliquidated obligations. Most of the unliquidated obligations result
from transactions booked during the war years. A large part of the 22
billion dollars would never be spent even if not repealed, for the
appropriations will lapse in due course. For example, several billion
dollars of these unliquidated obligations represent unsettled inter- and
intra-departmental agency accounts for war procurement. Legislation is
being requested to facilitate the adjustment of some of these
inter-agency accounts. Another 6 billion dollars is set aside for
contract termination payments. If contract settlement costs continue in
line with recent experience, it is likely that part of the 6 billion
dollars will remain unspent.

On the other hand, some of the 22 billion dollars would be available for
obligation and expenditure unless impounded. In certain appropriations,
such as those for long-cycle procurement, considerable carry-over of
unliquidated obligations into future years is to be expected and is
necessary. However, substantial further rescissions can and should be
made when the war liquidation program tapers off and budgetary
requirements for national defense are clarified. As I have said, I shall
continue to review the war authorizations and from time to time
recommend excess balances for repeal.

As in recent years, detailed recommendations concerning most
appropriations for the national defense program are postponed until the
spring. In connection with the war activities of the United States
Maritime Commission and certain other agencies, however, I now make
specific recommendations for the fiscal year 1947. No additional
authorizations or appropriations will be necessary for the Maritime
Commission since sufficient balances will be left after the
above-mentioned rescissions to carry out the program now contemplated
for the fiscal year 1947.

2. AFTERMATH OF WAR

Nearly one-third--11 billion dollars--of estimated Federal expenditures
in the fiscal year 1947 will be for purposes that are largely inherited
from the war--payments to veterans, interest on the Federal debt, and
refunds of taxes.

(a) For veterans.

"Veterans' pensions and benefits" has become one of the largest single
categories in the Federal Budget. I am recommending for this purpose
total appropriations of 4,787 million dollars for the fiscal year 1947.
Expenditures in the fiscal year are estimated, under present
legislation, at 4,208 million dollars. These expenditures will help our
veterans through their readjustment period and provide lasting care for
those who were disabled.

The Congress has provided unemployment allowances for veterans during
their readjustment period. Expenditure of 850 million dollars for this
purpose is anticipated for the fiscal year 1947. In addition,
readjustment allowances for self-employed veterans are expected to cost
340 million dollars in the fiscal year 1947.

On May 28, 1945, in asking the Congress to raise the ceiling on benefits
for civilian unemployed to not less than 25 dollars a week during the
immediate reconversion period, I suggested that the Congress also
consider liberalizing veterans' allowances. Elsewhere in this Message I
reiterate my recommendation with respect to emergency unemployment
compensation. I also recommend increasing veterans' unemployment
allowances from 20 dollars to 25 dollars a week. This would involve
additional expenditures estimated at approximately 220 million dollars
for the fiscal year.

Included in the 1947 Budget is an expenditure of 535 million dollars for
veterans' education under provisions of the Servicemen's Readjustment
Act. This amount includes both tuition expenses and maintenance
allowances. It is expected that half a million veterans will be enrolled
in our schools and colleges during the year.

The ultimate benefit which veterans receive from the loan guarantee
provisions of the Servicemen's Readjustment Act depends largely on the
success of our stabilization program in restraining building costs and
real estate values. Under the revised procedure contained in recent
amendments, the administrative workload will be minimized by the almost
complete transfer of authority for approving the guarantees to private
lending agencies and private appraisers designated by the Veterans
Administration. This authority carries with it the responsibility for
restricting the guarantees to loans on reasonably valued properties.
Costs of the program, other than for administration, are estimated at 21
million dollars in the fiscal year 1947.

Pensions for veterans will require expenditures estimated at 1,748
million dollars for the fiscal year 1947. Two-thirds of this amount will
be received by veterans of the war which we have just won. This figure
includes 55 million dollars of increased pensions for student-veterans
in our vocational rehabilitation program. In addition, 170 million
dollars will be expended in transfers to the National Service Life
Insurance fund from general and special accounts.

Expenditures under the appropriation for salaries and expenses of the
Veterans Administration are estimated at 528 million dollars in the
fiscal year 1947. This includes 260 million dollars for medical care and
the operation of some 103,000 hospital and domiciliary beds.

A separate appropriation for hospital and domiciliary facilities,
additional to the total for veterans' pensions and benefits, covers
construction that will provide some 13,000 hospital beds as part of the
500-million dollar hospital construction program already authorized by
the Congress. The estimated expenditures of 130 million dollars for this
purpose are classified in the Budget as part of the general public works
program for the next fiscal year.

(b) For interest.

Interest payments on the public debt are estimated at 5 billion dollars
in the fiscal year 1947, an increase of 250 million dollars from the
revised estimate for the current fiscal year. This increase reflects
chiefly payment of interest on additions to the debt this year. Assuming
continuance of present interest rates, the Government's interest bill is
now reaching the probable postwar level.

(c) For refunds.

An estimated total of 1,585 million dollars of refunds will be paid to
individuals and corporations during the fiscal year 1947. Slightly over
half of this amount, or 800 million dollars, will be accessory to the
simplified pay-as-you-go method of tax collection, and will be the
result of overwithholding and over declaration of expected income. Most
of the remainder will arise from loss and excess-profits credit
carrybacks, recomputed amortization on war plants, and special relief
from the excess profits tax.

This category of expenditures is thus losing gradually its
"aftermath-of-war" character, and by the succeeding year will reflect
almost entirely the normal operation of loss carry-backs and current tax
collection.

3. AGRICULTURAL PROGRAMS

The agricultural programs contemplated for the fiscal year 1947 are
those which are essential for the provision of an adequate supply of
food and other agricultural commodities with a fair return to American
farmers. To support these objectives, expenditures by the Department of
Agriculture estimated at 784 million dollars from general and special
accounts will be required in the fiscal year 1947. This compares with
estimated expenditures of 676 million dollars in 1946. These figures
exclude expenditures by the Department of Agriculture on account of
lend-lease, the United Nations Relief and Rehabilitation Administration,
and other war expenditures. The expenditure for the fiscal year 1947 is
composed of 553 million dollars for "aids to agriculture," 35 million
dollars for general public works, and 196 million dollars for other
services of the Department.

Net outlays for the price stabilization, price support, and other
programs of the Commodity Credit Corporation are expected to increase
from about 750 million dollars in the fiscal year 1946 to about 1,500
million dollars in 1947. Cash advances made on loans by the farm
Security Administration and the Rural Electrification Administration are
expected to amount to 266 million dollars in the fiscal year 1946 and
351 million dollars in 1947; and after receipts from principal and
interest are taken into account, net loan expenditures of these two
agencies will amount to 120 and 209 million dollars in the two fiscal
years.

To provide for the expenditures from general and special accounts, I
recommend for the fiscal year 1947 appropriations of million dollars
(including the existing permanent appropriation of an amount equal to 30
percent of estimated annual customs receipts) and a reappropriation of
88 million dollars of prior-year balances from customs receipts. In
addition there is a recommended authorization of 367.5 million dollars
for borrowing from the Reconstruction finance Corporation for the loan
programs of the farm Security Administration and the Rural
Electrification Administration. It is expected that the operations of
the Commodity Credit Corporation will be financed during the coming year
through the 500 million dollars of lend-lease funds which the Congress
has earmarked for price support purposes, a supplemental appropriation
to restore impaired capital of the Corporation, and the borrowing
authority of the Corporation.

Some detailed recommendations follow for major agricultural programs.

Conservation and use of land.--I am recommending that 270 million
dollars be appropriated for "conservation and use of agricultural land
resources"--the so-called AAA program--for the fiscal year 1947,
compared with 356 million dollars in the current year. This reduction of
86 million dollars is in large part accounted for by elimination of the
wartime flax production incentive project and other nonrecurring items;
the proposed reduction in normal activities is less than 33 million
dollars.

For the past several years, this program has consisted largely of
payments to farmers for application of fertilizer and other approved
soil management practices. I am convinced that farmers generally are now
fully alert to the benefits, both immediate and long-term, which they
derive from the practices encouraged by this program. I believe,
therefore, that this subsidization should continue to be reduced.

Rural electrification.--It is proposed that the loan authorization for
the Rural Electrification Administration for the fiscal year 1947 be
increased from 200 million dollars to 250 million dollars. During the
war period, REA was limited by the scarcity of materials and manpower.
But that situation is rapidly changing, and the REA program, which was
materially stepped up for the fiscal year 1946, can be increased still
more. It is my belief that a feasible and practical rural
electrification program should be carried forward as rapidly as
possible. This will involve total loans of approximately 1,800 million
dollars over the next 10 years, much of which will be repaid during that
period.

Other programs.--It is recommended that the continuing forest
land-acquisition program be resumed at the rate of 3 million dollars
annually, which is about the minimum rate at which this program can be
economically carried on. The lands involved in this program can
contribute fully to the national welfare only when brought into the
national forest system for protection and development.

Such programs as those of the farm Security Administration and the farm
Credit Administration are estimated to be continued during the fiscal
year 1947 at about the same level as in the fiscal year 1946. Recent
action by the Congress has Permitted some expansion of the school lunch
program. I hope it will be continued and expanded. The budgets of the
Federal Crop Insurance Corporation and the federal farm Mortgage
Corporation will be transmitted in the spring under the terms of the
Government Corporation Control Act.

4. TRANSPORTATION

Transportation is one of the major fields for both public and private
investment. Our facilities for transportation and communication must be
constantly improved to serve better the convenience of the public and to
facilitate the sound growth and development of the whole economy.

Federal capital outlays for transportation facilities are expected to
approximate 519 million dollars in the fiscal year 1947. State and local
governments may spend 400 million dollars. Private investment, over half
of it by railways, may approach 1,150 million dollars.

The Congress has already taken steps for the resumption of work on
improvement of rivers and harbors and on the construction of new
Federal-aid highways. Much needed work on airports can begin when the
Congress enacts legislation now in conference between the two Houses.

The Federal expenditure estimates for the fiscal year 1947 include 53
million dollars for new construction in rivers, harbors, and the Panama
Canal and 291 million dollars for highways and grade-crossing
elimination, assuming that the States expend some 275 million dollars on
the Federal-aid system. Additional expenditures for highways totaling 36
million dollars are anticipated by the forest Service, National Park
Service, and the Territory of Alaska. Civil airways and airports will
involve expenditures of 35 million dollars under existing authority.
Additional Federal expenditures exceeding 20 million dollars (to be
matched by States and municipalities) may be made during the fiscal year
1947 under the airport legislation now in conference between the two
Houses of the Congress.

The United States now controls almost two-thirds of the world's merchant
shipping, most of it Government-owned, compared with little more than
one-seventh of the world's tonnage in 1939. This places a heavy
responsibility upon the Nation to provide for speedy and efficient world
commerce as a contribution to general economic recovery.

The estimates for the United States Maritime Commission and War Shipping
Administration provide for the transition of shipping operation from a
war to a peace basis; the sale, chartering, or lay-up of much of the
war-built fleet; and for a program of ship construction of some 84
million dollars in the fiscal year 1947 to round out the merchant fleet
for peacetime use.

Federal aids, subsidies, and regulatory controls for transportation
should follow the general principle of benefiting the national economy
as a whole. They should seek to improve the transportation system and
increase its efficiency with resulting lower rates and superior service.
Differential treatment which benefits one type of transportation to the
detriment of another should be avoided save when it is demonstrated
clearly to be in the public interest.

5. RESOURCE DEVELOPMENT

Total capital outlays for resource development are estimated at 653
million dollars in the fiscal year 1947 as compared with 452 million
dollars in 1946. These include capital expenditures by the Rural
Electrification Administration and expenditures for resource development
by other organizational units in the Department of Agriculture which are
also mentioned above under "agricultural programs."

The reclamation and flood control projects which I am recommending for
the fiscal year 1947 will involve capital outlays of approximately 319
million dollars as compared with 245 million dollars in the fiscal year
1946. These expenditures cover programs of the Corps of Engineers, the
Bureau of Reclamation, the Bureau of Indian Affairs, the Department of
Agriculture, and the International Boundary and Water Commission, United
States and Mexico. A number of these projects are multiple-purpose
projects, providing not only for reclamation and irrigation of barren
land and flood control, but also for the production of power needed for
industrial development of the areas.

Expenditures for power transmission and distribution facilities by the
Bonneville Power Administration are expected to increase from 12 million
dollars in the fiscal year 1946 to 15 million dollars in the next fiscal
year. In addition, the Southwestern Power Administration will undertake
a new program involving expenditures of about 16 million dollars in the
fiscal year 1947. The Rural Electrification Administration will require
expenditures during the current fiscal year estimated at 156 million
dollars; in the fiscal year 1947, at 241 million dollars.

The TVA program includes completion of major multiple-purpose
projects--navigation, flood control, and power facilities--and additions
to chemical plants and related facilities. Expenditures for these
capital improvement programs are estimated at 30 million dollars in the
fiscal year 1946 and 39 million dollars in the fiscal year 1947.

Expenditures for construction of roads and other developmental works in
the national forests, parks, and other public lands, and for capital
outlays for fish and wildlife development will increase from below 9
million dollars in the fiscal year 1946 to 24 million dollars in the
fiscal year 1947.

6. SOCIAL SECURITY AND HEALTH

Benefit payments out of the Old-Age and Survivors Insurance Trust fund
during 1947 are estimated at 407 million dollars, while withdrawals by
the States from the Unemployment Trust fund for compensation payments
are expected to total 1 billion dollars. These disbursements are
financed out of social security contributions.

The appropriations from general and special accounts for the social
security program, which cover Federal administrative expenses and grants
to States for assistance programs, are estimated at 593 million dollars
for the fiscal year 1947, an increase of 57 million dollars over the
current year. The increase anticipates greater administrative workload
and higher grants to match increasing State payments. The social
security program does not include all the Federal health services under
existing legislation. For the other health services classified under
general government and national defense, appropriations are estimated at
102 million dollars for the fiscal year 1947.

Some expansion in peacetime medical research and other programs of the
Public Health Service is provided for in the appropriation estimates for
these purposes totaling approximately 87 million dollars for the fiscal
year 1947 which are submitted under provisions of existing law. Part of
this will be provided through the social security appropriations, the
remainder through other appropriations. About 28 million dollars is
recommended for maternity care and health services for children under
existing law, mainly under the emergency provision for the wives and
infants of servicemen. While we should avoid duplication of maternity
and child health services which will be provided through the proposed
general system of prepaid medical care, legislation is needed to
supplement such services. For medical education, I have recommended
legislation authorizing grants-in-aid to public and nonprofit
institutions. The existing sources of support for medical schools
require supplementation to sustain the expansion that is needed.

Hospitals, sanitation works, and additional facilities at medical
schools will be required for an adequate national health program.
Legislation is now pending in the Congress to authorize grants for the
construction of hospitals and health centers and grants and loans for
water-pollution control. I hope the Congress will act favorably on
generous authorizing legislation.

7. RESEARCH AND EDUCATION

The Budget provides for continuation and desirable expansion of the
research activities that are carried on throughout the Federal
establishment and through previously authorized grants to the States.
Additional appropriations will be required for the proposed central
Federal research agency which I recommended last September 6. That
agency will coordinate existing research activities and administer funds
for new research activities wherever they are needed; it will not itself
conduct research. The plan contemplates expenditures through the new
research agency of approximately 40 million dollars for the first year.

These amounts are small in relation to the important contribution they
can make to the national income, the welfare of our people, and the
common defense. Expenditures must be limited for the time being by the
capacity of research agencies to make wise use of funds. The maintenance
of our position as a nation, however, will require more emphasis on
research expenditures in the future than in the past.

Educational expenditures will require a significant share of the
national income in the fiscal year 1947. State, local, and private
expenditures for the current support of elementary, secondary, and
higher education are expected to be substantially above 3 billion
dollars in that year. These nonfederal expenditures will be supplemented
by Federal expenditures estimated at 625 million dollars in the present
Budget. Of this amount, the estimate for veterans' education, as
previously mentioned, is 535 million dollars. Other amounts include 21
million dollars for the support of vocational education in public
schools, 5 million dollars for the land-grant colleges, 50 million
dollars for the present school-lunch and milk program, 1 million dollars
for the Office of Education, and approximately 13 million dollars for
various other items. In view of the major policy issues which are still
under study by the Congress and the Administration, no specific amount
has been determined for the Federal grants, previously recommended in
this Message, which would assist the States generally in assuring more
nearly equal opportunities for a good education.

Notwithstanding the urgent need for additional school and college
buildings, careful planning will be required for the expenditures to be
made under the proposed legislation to aid the States in providing
educational facilities. A major share of the grants for the first year
would be for surveys and plans.

I have already outlined the broad objectives of our foreign economic
policy. In the present section I shall indicate the Federal outlays
which the execution of these programs may require in the fiscal years
1946 and 1947.

(a) On the termination of lend-lease, the lend-lease countries were
required to pay for goods in the lend-lease pipe line either in cash or
by borrowing from the United States or by supplying goods and services
to the United States. Credits for this purpose have already been
extended to Soviet Union, France, the Netherlands, and Belgium amounting
to 675 million dollars. The settlement credit of 650 million dollars to
the United Kingdom includes an amount preliminarily fixed at 118 million
dollars which represents the excess of purchases by the United Kingdom
from the pipe line over goods and services supplied by the United
Kingdom to the United States since VJ-day and the balance of various
claims by one government against the other.

Credits are also being negotiated with lend-lease countries to finance
the disposition of lend-lease inventories and installations and property
declared to be surplus. For instance, 532 million dollars of the
settlement credit to the United Kingdom is for this purpose. These
credits will involve no new expenditures by this Government, since they
merely provide for deferred repayment by other governments for good:
services which have been financed from war appropriations.

(b) Expenditures from the appropriations to United Nations Relief and
Rehabilitation Administration, which were discarded under war
expenditures above, are estimated to be 1.3 billion dollars in the
fiscal year 1946 and 1.2 billion dollars in the fiscal year 1947.

(c) To assist other countries in the restoration of their economies the
Export-Import Bank has already negotiated loans in the fiscal year 1946
amounting in total to about 1,010 million dollars and an additional 195
million dollars will probably be committed shortly. The Bank is also
granting loans to carry out its original purpose of directly expanding
the foreign trade of the United States. In this connection the Bank has
established a fund of 100 million dollars to finance the export of
cotton from the United States. The Export-Import Bank has thus loaned or
committed approximately 1,300 million dollars during the current fiscal
year and it is expected that demands on its resources will increase in
the last 6 months of the fiscal year 1946. Requests for loans are
constantly being received by the Bank from countries desiring to secure
goods and services in this country for the reconstruction or development
of their economies. On July 31, 1945, the lending authority of the
Expert-Import Bank was increased to a total of 3,500 million dollars. I
anticipate that during the period covered by this Budget the Bank will
reach this limit. The bulk of the expenditures from the loans already
granted will fall in the fiscal year 1946 while the bulk of the
expenditures from loans yet to be negotiated will fall in the fiscal
year 1947. In view of the urgent need for the Bank's credit, I may find
it necessary to request a further increase in its lending authority at a
later date.

(d) The proposed line of credit of 3,750 million dollars to the United
Kingdom will be available up to the end of 1951 and will be used to
assist the United Kingdom in financing the deficit in its balance of
payments during the transition period. The rate at which the United
Kingdom will draw on the credit will depend on the rapidity with which
it can reconvert its economy and adapt its trade to the postwar world.
The anticipated rate of expenditure is likely to be heaviest during the
next 2 years.

(e) Since the Bretton Woods Agreements have now been approved by the
required number of countries, both the International Monetary fund and
the International Bank for Reconstruction and Development will commence
operations during 1946. The organization of these institutions will
undoubtedly take some time, and it is unlikely that their operations
will reach any appreciable scale before the beginning of the fiscal year
1947.

Of the 2,750 million dollars required for the fund, 1,800 million
dollars will be provided in cash or notes from the exchange
stabilization fund established under the Gold Reserve Act of 1934. The
remaining 950 million dollars will be paid initially in the form of
non-interest-bearing notes issued by the Secretary of the Treasury. It
is not anticipated that the fund will require in cash any of the 950
million dollars during the fiscal years 1946 and 1947. Consequently, no
cash withdrawals from the Treasury will be required in connection with
the fund in these years.

The subscription to the Bank amounts to 3,175 million dollars. Of this
total, 2 percent must be paid immediately and the Bank is required to
call a further 8 percent of the subscription during its first year of
operations. The balance of the subscription is payable when required by
the Bank either for direct lending or to make good its guarantees. It is
likely that the United States will be required to pay little if any more
than the initial 10 percent before the end of the fiscal year 1947.

I anticipate that net expenditures of the Export-Import Bank and
expenditures arising from the British credit and the Bretton Woods
Agreements will amount to 2,614 million dollars, including the noncash
item of 950 million dollars for the fund, in the fiscal year 1946, and
2,754 million dollars in the fiscal year 1947.

GENERAL GOVERNMENT

The responsibilities of the Government, in both domestic and
international affairs, have increased greatly in the past decade.
Consequently, the Government is larger than it was before the war, and
its general operating costs are higher. We cannot shrink the Government
to prewar dimensions unless we slough off these new
responsibilities--and we cannot do that without paying an excessive
price in terms of our national welfare. We can, however, enhance its
operating efficiency through improved organization. I expect to make
such improvements under the authority of the Reorganization Act of 1945.

The appropriations which I am recommending for general government for
the fiscal year 1947 are 1,604 million dollars under existing
legislation. This is an increase of 458 million dollars over the total
of enacted appropriations for the current fiscal year, but a substantial
part of this increase is due to the fact that the appropriations for the
fiscal year 1946 were made prior to the general increase of employees'
salaries last July 1, for which allowance is made in the anticipated
supplemental appropriations for 1946. The recommended total for 1947 for
general government, like the estimates for national defense and other
specific programs, does not allow for the further salary increases for
Government employees which, I hope, will be authorized by pending
legislation, but-the tentative lump-sum estimates under proposed
legislation contemplate that such salary increases will be effective
almost at once.

Expenditures for general government in the fiscal year 1947 are expected
to continue the slowly rising trend which began in 1943. This category
includes a great variety of items--not merely the overhead costs of the
Government. It includes all the expenditures of the Cabinet departments,
other than for national defense, aids to agriculture, general public
works, and the social security program. It includes also expenditures of
the legislative branch, the Judiciary, and many of the independent
agencies of the executive branch. Consequently, the estimated increase
in 1947 in the total of general government expenditures reflects a
variety of influences.

Now included in general government are certain activities formerly
classified under national defense. Some of these, such as certain
functions of the former foreign Economic Administration and the War
Manpower Commission, are still needed during the period of reconversion;
others are in the process of liquidation. A few wartime activities, for
example, the international information and foreign intelligence services
and some of the wartime programs for controlling disease and crime, have
become part of our regular government establishment. Expenditures for
these former wartime functions explain about 40 percent of the increase
in expenditures for general government.

Other increases are for civil aeronautics promotion, the business and
manufacturing censuses, and other expanded business services of the
Department of Commerce which have been referred to above; the forest and
Soil Conservation Services and other committees of the Department of
certain conservation activities of the Department of the Interior; and
the collection of internal revenue in the Treasury Department.

The necessity for reestablishing postal services curtailed during the
war and advances in the rates of pay for postal employees have increased
substantially the estimated expenditures for postal service for both the
current and the next fiscal year. It is not expected that this increase
will cause expenditures to exceed postal revenues in either year,
although an excess of expenditures may occur in the fiscal year 1947 if
salaries are increased further.

Expenditures for our share of the administrative budgets of the United
Nations and other permanent international bodies will increase sharply
in the fiscal year 1947, yet will remain a small part of our total
Budget. The budget for the United Nations has not yet been determined;
an estimate for our contribution will be submitted later. Our
contributions to the food and Agriculture Organization, the
International Labor Office, the Pan American Union, and other similar
international agencies will aggregate about 3 million dollars for the
fiscal year 1947. The administrative expenses of the International
Monetary fund and the International Bank will be met from their general
funds.

We have won a great war--we, the nations of plain people who hate war.
In the test of that war we found a strength of unity that brought us
through--a strength that crushed the power of those who sought by force
to deny our faith in the dignity of man.

During this trial the voices of disunity among us were silent or were
subdued to an occasional whine that warned us that they were still among
us. Those voices are beginning to cry aloud again. We must learn
constantly to turn deaf ears to them. They are voices which foster fear
and suspicion and intolerance and hate. They seek to destroy our
harmony, our understanding of each other, our American tradition of
"live and let live." They have become busy again, trying to set race
against race, creed against creed, farmer against city dweller, worker
against employer, people against their own governments. They seek only
to do us mischief. They must not prevail.

It should be impossible for any man to contemplate without a sense of
personal humility the tremendous events of the 12 months since the last
annual Message, the great tasks that confront us, the new and huge
problems of the coming months and years. Yet these very things justify
the deepest confidence in the future of this Nation of free men and
women.

The plain people of this country found the courage and the strength, the
self-discipline, and the mutual respect to fight and to win, with the
help of our allies, under God. I doubt if the tasks of the future are
more difficult. But if they are, then I say that our strength and our
knowledge and our understanding will be equal to those tasks.

As printed above, references to tables appearing in the budget document
have been omitted.

***

State of the Union Address
Harry S. Truman
January 6, 1947

Mr. President, Mr. Speaker, Members of the Congress of the United
States:

It looks like a good many of you have moved over to the left since I was
here last!

I come before you today to report on the State of the Union and, in the
words of the Constitution, to recommend such measures as I judge
necessary and expedient.

I come also to welcome you as you take up your duties and to discuss
with you the manner in which you and I should fulfill our obligations to
the American people during the next 2 years.

The power to mold the future of this Nation lies in our hands--yours and
mine, and they are joined together by the Constitution.

If in this year, and in the next, we can find the right course to take
as each issue arises, and if, in spite of all difficulties, we have the
courage and the resolution to take that course, then we shall achieve a
state of well-being for our people without precedent in history. And if
we continue to work with the other nations of the world earnestly,
patiently, and wisely, we can--granting a will for peace on the part of
our neighbors-make a lasting peace for the world.

But, if we are to realize these ends, the Congress and the President,
during the next 2 years, must work together. It is not unusual in our
history that the majority of the Congress represents a party in
opposition to the President's party. I am the twentieth President of the
United States who, at some time during his term of office, has found his
own party to be in the minority in one or both Houses of Congress. The
first one was George Washington. Wilson was number eighteen, and Hoover
was number nineteen.

I realize that on some matters the Congress and the President may have
honest differences of opinion. Partisan differences, however, did not
cause material disagreements as to the conduct of the war. Nor, in the
conduct of our international relations, during and since the war, have
such partisan differences been material.

On some domestic issues we may, and probably shall, disagree. That in
itself is not to be feared. It is inherent in our form of Government.
But there are ways of disagreeing; men who differ can still work
together sincerely for the common good. We shall be risking the Nation's
safety and destroying our opportunities for progress if we do not settle
any disagreements in this spirit, without thought of partisan advantage.

THE GENERAL DOMESTIC ECONOMY

As the year 1947 begins, the state of our national economy presents
great opportunities for all. We have virtually full employment. Our
national production of goods and services is 50 percent higher than in
any year prior to the war emergency. The national income in 1946 was
higher than in any peacetime year. Our food production is greater than
it has ever been. During the last 5 years our productive facilities have
been expanded in almost every field. The American standard of living is
higher now than ever before, and when the housing shortage can be
overcome it will be even higher.

During the past few months we have removed at a rapid rate the emergency
controls that the Federal Government had to exercise during the war. The
remaining controls will be retained only as long as they are needed to
protect the public. Private enterprise must be given the greatest
possible freedom to continue the expansion of economy.

In my proclamation of December 31, 1946 I announced the termination of
hostilities. This automatically ended certain temporary legislation and
certain executive powers.

Two groups of temporary laws still remain: the first are those which by
Congressional mandate are to last during the "emergency"; the second are
those which are to continue until the "termination of the war,"

I shall submit to the Congress recommendations for the repeal of certain
of the statutes which by their terms continue for the duration of the
"emergency." I shall at the same time recommend that others within this
classification be extended until the state of war has been ended by
treaty or by legislative action. As to those statutes which continue
until the state of war has been terminated, I urge that the Congress
promptly consider each statute individually, and repeal such emergency
legislation where it is advisable.

Now that nearly all wartime controls have been removed, the operation of
our industrial system depends to a greater extent on the decisions of
businessmen, farmers, and workers. These decisions must be wisely made
with genuine concern for public welfare. The welfare of businessmen,
farmers, and workers depends upon the economic well-being of those who
buy their products.

An important present source of danger to our economy is the possibility
that prices might be raised to such an extent that the consuming public
could not purchase the tremendous volume of goods and services which
will be produced during 1947.

We all know that recent price increases have denied to many of our
workers much of the value of recent wage increases. Farmers have found
that a large part of their increased income has been absorbed by
increased prices. While some of our people have received raises in
income which exceed price increases, the great majority have not. Those
persons who live on modest fixed incomes--retired persons living on
pensions, for example--and workers whose incomes are relatively
inflexible, such as teachers and other civil servants--have suffered
hardship.

In the effort to bring about a sound and equitable price structure, each
group of our population has its own responsibilities.

It is up to industry not only to hold the line on existing prices, but
to make reductions whenever profits justify such action.

It is up to labor to refrain from pressing for unjustified wage
increases that will force increases in the price level.

And it is up to Government to do everything in its power to encourage
high-volume Production, for that is what makes possible good wages, low
prices, and reasonable profits.

In a few days there will be submitted to the Congress the Economic
Report of the President, and also the Budget Message. Those messages
will contain many recommendations. Today I shall outline five major
economic policies which I believe the Government should pursue during
1947. These policies are designed to meet our immediate needs and, at
the same time, to provide for the long-range welfare of our free
enterprise system:

First, the promotion of greater harmony between labor and management.

Second, restriction of monopoly and unfair business practices;
assistance to small business; and the promotion of the free competitive
system of private enterprise.

Third, continuation of an aggressive program of home construction.

Fourth, the balancing of the budget in the next fiscal year and the
achieving of a substantial surplus to be applied to the reduction of the
public debt.

Fifth, protection of a fair level of return to farmers in post-war
agriculture.

LABOR AND MANAGEMENT

The year just past--like the year after the first World War--was marred
by labor management strife.

Despite this outbreak of economic warfare in 1946, we are today
producing goods and services in record volume. Nevertheless, it is
essential to improve the methods for reaching agreement between labor
and management and to reduce the number of strikes and lockouts.

We must not, however, adopt punitive legislation. We must not in order
to punish a few labor leaders, pass vindictive laws which will restrict
the proper rights of the rank and file of labor. We must not, under the
stress of emotion, endanger our American freedoms by taking
ill-considered action which will lead to results not anticipated or
desired.

We must remember, in reviewing the record of disputes in 1946, that
management shares with labor the responsibility for failure to reach
agreements which would have averted strikes. For that reason, we must
realize that industrial peace cannot be achieved merely by laws directed
against labor unions.

During the last decade and a half, we have established a national labor
policy in this country based upon free collective bargaining as the
process for determining wages and working conditions.

That is still the national policy.

And it should continue to be the national policy!

But as yet, not all of us have learned what it means to bargain freely
and fairly. Nor have all of us learned to carry the mutual
responsibilities that accompany the right to bargain. There have been
abuses and harmful practices which limit the effectiveness of our system
of collective bargaining. Furthermore, we have lacked sufficient
governmental machinery to aid labor and management in resolving their
differences.

Certain labor-management problems need attention at once and certain
others, by reason of their complexity, need exhaustive investigation and
study.

We should enact legislation to correct certain abuses and to provide
additional governmental assistance in bargaining. But we should also
concern ourselves with the basic causes of labor-management
difficulties.

In the light of these considerations, I propose to you and urge your
cooperation in effecting the following four-point program to reduce
industrial strife:

Point number one is the early enactment of legislation to prevent
certain unjustifiable practices.

First, under this point, are jurisdictional strikes. In such strikes the
public and the employer are innocent bystanders who are injured by a
collision between rival unions. This type of dispute hurts production,
industry, and the public--and labor itself. I consider jurisdictional
strikes indefensible.

The National Labor Relations Act provides procedures for determining
which union represents employees of a particular employer. In some
jurisdictional disputes, however, minority unions strike to compel
employers to deal with them despite a legal duty to bargain with the
majority union. Strikes to compel an employer to violate the law are
inexcusable. Legislation to prevent such strikes is clearly desirable.

Another form of inter-union disagreement is the jurisdictional strike
involving the question of which labor union is entitled to perform a
particular task. When rival unions are unable to settle such disputes
themselves, provision must be made for peaceful and binding
determination of the issues.

A second unjustifiable practice is the secondary boycott, when used to
further jurisdictional disputes or to compel employers to violate the
National Labor Relations Act.

Not all secondary boycotts are unjustified. We must judge them on the
basis of their objectives. For example, boycotts intended to protect
wage rates and working conditions should be distinguished from those in
furtherance of jurisdictional disputes. The structure of industry
sometimes requires unions, as a matter of self-preservation, to extend
the conflict beyond a particular employer. There should be no blanket
prohibition against boycotts. The appropriate goal is legislation which
prohibits secondary boycotts in pursuance of unjustifiable objectives,
but does not impair the union's right to preserve its own existence and
the gains made in genuine collective bargaining.

A third practice that should be corrected is the use of economic force,
by either labor or management, to decide issues arising out of the
interpretation of existing contracts.

Collective bargaining agreements, like other contracts, should be
faithfully adhered to by both parties. In the most enlightened
union-management relationships, disputes over the interpretation of
contract terms are settled peaceably by negotiation or arbitration.
Legislation should be enacted to provide machinery whereby unsettled
disputes concerning the interpretation of an existing agreement may be
referred by either party to final and binding arbitration.

Point number two is the extension of facilities within the Department of
Labor for assisting collective bargaining.

One of our difficulties in avoiding labor strife arises from a lack of
order in the collective bargaining process. The parties often do not
have a dear understanding of their responsibility for settling disputes
through their own negotiations. We constantly see instances where labor
or management resorts to economic force without exhausting the
possibilities for agreement through the bargaining process. Neither the
parties nor the Government have a definite yardstick for determining
when and how Government assistance should be invoked. There is need for
integrated governmental machinery to provide the successive steps of
mediation, voluntary arbitration, and--ultimately in appropriate
cases--ascertainment of the facts of the dispute and the reporting of
the facts to the public. Such machinery would facilitate and expedite
the settlement of disputes.

Point number three is the broadening of our program of social
legislation to alleviate the causes of workers' insecurity.

On June 11, 1946, in my message vetoing the Case Bill, I made a
comprehensive statement of my views concerning labor-management
relations. I said then, and I repeat now, that the solution of
labor-management difficulties is to be found not only in legislation
dealing directly with labor relations, but also in a program designed to
remove the causes of insecurity felt by many workers in our industrial
society. In this connection, for example, the Congress should consider
the extension and broadening of our social security system, better
housing, a comprehensive national health program, and provision for a
fair minimum wage.

Point number four is the appointment of a Temporary Joint Commission to
inquire into the entire field of labor-management relations.

I recommend that the Congress provide for the appointment of a Temporary
Joint Commission to undertake this broad study.

The President, the Congress, and management and labor have a continuing
responsibility to cooperate in seeking and finding the solution of these
problems. I therefore recommend that the Commission be composed as
follows: twelve to be chosen by the Congress from members of both
parties in the House and the Senate, and eight representing the public,
management and labor, to be appointed by the President.

The Commission should be charged with investigating and making
recommendations upon certain major subjects, among others:

First, the special and unique problem of nationwide strikes in vital
industries affecting the public interest. In particular, the Commission
should examine into the question of how to settle or prevent such
strikes without endangering our general democratic freedoms.

Upon a proper solution of this problem may depend the whole industrial
future of the United States. The paralyzing effects of a nationwide
strike in such industries as transportation, coal, oil, steel, or
communications can result in national disaster. We have been able to
avoid such disaster, in recent years, only by the use of extraordinary
war powers. All those powers will soon be gone. In their place there
must be created an adequate system and effective machinery in these
vital fields. This problem will require careful study and a bold
approach, but an approach consistent with the preservation of the rights
of our people. The need is pressing. The Commission should give this its
earliest attention.

Second, the best methods and procedures for carrying out the collective
bargaining process. This should include the responsibilities of labor
and management to negotiate freely and fairly with each other, and to
refrain from strikes or lockouts until all possibilities of negotiation
have been exhausted.

Third, the underlying causes of labor management disputes.

Some of the subjects presented here for investigation involve long-range
study. Others can be considered immediately by the Commission and its
recommendations can be submitted to the Congress in the near future.

I recommend that this Commission make its first report, including
specific legislative recommendations, not later than March 15, 1947.

RESTRICTION Of MONOPOLY AND PROMOTION OF PRIVATE ENTERPRISE

The second major policy I desire to lay before you has to do with the
growing concentration of economic power and the threat to free
competitive private enterprise. In 1941 the Temporary National Economic
Committee completed a comprehensive investigation into the workings of
the national economy. The Committee's study showed that, despite a half
century of anti-trust law enforcement, one of the gravest threats to our
welfare lay in the increasing concentration of power in the hands of a
small number of giant organizations.

During the war, this long-standing tendency toward economic
concentration was accelerated. As a consequence, we now find that to a
greater extent than ever before, whole industries are dominated by one
or a few large organizations which can restrict production in the
interest of higher profits and thus reduce employment and purchasing
power.

In an effort to assure full opportunity and free competition to business
we will vigorously enforce the anti-trust laws. There is much the
Congress can do to cooperate and assist in this program.

To strengthen and enforce the laws that regulate business practices is
not enough. Enforcement must be supplemented by positive measures of aid
to new enterprises. Government assistance, research programs, and credit
powers should be designed and used to promote the growth of new firms
and new industries. Assistance to small business is particularly
important at this time when thousands of veterans who are potential
business and industrial leaders are beginning their careers.

We should also give special attention to the decentralization of
industry and the development of areas that are now under-industrialized.

HOUSING

The third major policy is also of great importance to the national
economy: an aggressive program to encourage housing construction. The
first federal program to relieve the veterans' housing shortage was
announced in February 1946. In 1946 one million family housing units
have been put under construction and more than 665,000 units have
already been completed. The rate of expansion in construction has broken
all records.

In the coming year the number of dwelling units built will approach, if
not surpass, the top construction year of 1926. The primary
responsibility to deliver housing at reasonable prices that veterans can
afford rests with private industry and with labor. The Government will
continue to expedite the flow of key building materials, to limit
nonresidential construction, and to give financial support where it will
do the most good. Measures to stimulate rental housing and new types of
housing construction will receive special emphasis.

To reach our long-range goal of adequate housing for all our people,
comprehensive housing legislation is urgently required, similar to the
non-partisan bill passed by the Senate last year. At a minimum, such
legislation should open the way for rebuilding the blighted areas of our
cities and should establish positive incentives for the investment of
billions of dollars of private capital in large-scale rental housing
projects. It should provide for improvement of housing in rural areas
and for the construction, over a 4-year period, of half a million units
of public low-rental housing. It should authorize a single peacetime
federal housing agency to assure efficient use of our resources on the
vast housing front.

FISCAL AFFAIRS

The fourth major policy has to do with the balancing of the budget. In a
prosperous period such as the present one, the budget of the Federal
Government should be balanced. Prudent management of public finance
requires that we begin the process of reducing the public debt. The
budget which I shall submit to you this week has a small margin of
surplus. In the Budget Message I am making recommendations which, if
accepted, will result in a substantially larger surplus which should be
applied to debt retirement. One of these recommendations is that the
Congress take early action to continue throughout the next fiscal year
the war excise tax rates which, under the present law, will expire on
June 30, 1947.

Expenditures relating to the war are still high. Considerable sums are
required to alleviate world famine and suffering. Aid to veterans will
continue at peak level. The world situation is such that large military
expenditures are required. Interest on the public debt and certain other
costs are irreducible. For these reasons I have had to practice
stringent economy in preparing the budget; and I hope that the Congress
will cooperate in this program of economy.

AGRICULTURE

The fifth major policy has to do with the welfare of our farm
population.

Production of food reached record heights in 1946. Much of our
tremendous grain crop can readily be sold abroad and thus will become no
threat to our domestic markets. But in the next few years American
agriculture can face the same dangers it did after World War I. In the
early twenties the Nation failed to maintain outlets for the new
productive capacity of our agricultural plant. It failed to provide
means to protect the farmer while he adjusted his acreage to peacetime
demands.

The result we all remember too well. Farm production stayed up while
demand and prices fell, in contrast with industry where prices stayed up
and output declined, farm surpluses piled up, and disaster followed.

We must make sure of meeting the problems which we failed to meet after
the first World War. Present laws give considerable stability to farm
prices for 1947 and 1948, and these 2 years must be utilized to maintain
and develop markets for our great productive power.

The purpose of these laws was to permit an orderly transition from war
to peace. The Government plan of support prices was not designed to
absorb, at great cost, the unlimited surpluses of a highly productive
agriculture.

We must not wait until the guarantees expire to set the stage for
permanent farm welfare.

The farmer is entitled to a fair income.

Ways can be found to utilize his new skills and better practices, to
expand his markets at home and abroad, and to carry out the objectives
of a balanced pattern of peacetime production without either undue
sacrifice by farm people or undue expense to the Government.

HEALTH AND GENERAL WELFARE

Of all our national resources, none is of more basic value than the
health of our people. Over a year ago I presented to the Congress my
views on a national health program. The Congress acted on several of the
recommendations in this program-mental health, the health of mothers and
children, and hospital construction. I urge this Congress to complete
the work begun last year and to enact the most important recommendation
of the program--to provide adequate medical care to all who need it, not
as charity but on the basis of payments made by the beneficiaries of the
program.

One administrative change would help greatly to further our national
program in the fields of health, education, and welfare. I again
recommend the establishment of a well-integrated Department of Welfare.

VETERANS

Fourteen million World War II servicemen have returned to civil life.
The great majority have found their places as citizens of their
communities and their Nation. It is a tribute to the fiber of our
servicemen and to the flexibility of our economy that these adjustments
have been made so rapidly and so successfully.

More than two million of these veterans are attending schools or
acquiring job skills through the financial assistance of the Federal
Government. Thousands of sick and wounded veterans are daily receiving
the best of medical and hospital care. Half a million have obtained
loans, with Government guarantees, to purchase homes or farms or to
embark upon new businesses. Compensation is being paid in almost two
million cases for disabilities or death. More than three million are
continuing to maintain their low-cost National Service Life Insurance
policies. Almost seven million veterans have been aided by unemployment
and self-employment allowances.

Exclusive of mustering-out payments and terminal leave pay, the program
for veterans of all wars is costing over seven billion dollars a
year--one-fifth of our total federal budget. This is the most
far-reaching and complete veterans program ever conceived by any nation.

Except for minor adjustments, I believe that our program of benefits for
veterans is now complete. In the long run, the success of the program
will not be measured by the number of veterans receiving financial aid
or by the number of dollars we spend. History will judge us not by the
money we spend, but by the further contribution we enable our veterans
to make to their country. In considering any additional legislation,
that must be our criterion.

CIVIL RIGHTS

We have recently witnessed in this country numerous attacks upon the
constitutional rights of individual citizens as a result of racial and
religious bigotry. Substantial segments of our people have been
prevented from exercising fully their right to participate in the
election of public officials, both locally and nationally. Freedom to
engage in lawful callings has been denied.

The will to fight these crimes should be in the hearts of every one of
us.

For the Federal Government that fight is now being carried on by the
Department of Justice to the full extent of the powers that have been
conferred upon it. While the Constitution withholds from the Federal
Government the major task of preserving peace in the several States, I
am not convinced that the present legislation reached the limit of
federal power to protect the civil rights of its citizens.

I have, therefore, by Executive Order,[1] established the President's
Committee on Civil Rights to study and report on the whole problem of
federally-secured civil rights, with a view to making recommendations to
the Congress.

[Footnote 1: Executive Order 9808 (3 CFR, 1943-1948 Comp., p. 590.)]

NATURAL RESOURCES

In our responsibility to promote the general welfare of the people, we
have always to consider the natural resources of our country. They are
the foundation of our life. In the development of the great river
systems of America there is the major opportunity of our generation to
contribute to the increase of the national wealth. This program is
already well along; it should be pushed with full vigor.

I must advise the Congress that we are rapidly becoming a "have not"
Nation as to many of our minerals. The economic progress and the
security of our country depend upon an expanding return of mineral
discovery and upon improved methods of recovery. The Federal Government
must do its part to meet this need.

FOREIGN AFFAIRS

Progress in reaching our domestic goals is closely related to our
conduct of foreign affairs. All that I have said about maintaining a
sound and prosperous economy and improving the welfare of our people has
greater meaning because of the world leadership of the United States.
What we do, or fail to do, at home affects not only ourselves but
millions throughout the world. If we are to fulfill our responsibilities
to ourselves and to other peoples, we must make sure that the United
States is sound economically, socially, and politically. Only then will
we be able to help bring about the elements of peace in other
countries--political stability, economic advancement, and social
progress.

Peace treaties for Italy, Bulgaria, Rumania, and Hungary have finally
been prepared. Following the signing of these treaties next month in
Paris, they will be submitted to the Senate for ratification. This
Government does not regard the treaties as completely satisfactory.
Whatever their defects, however, I am convinced that they are as good as
we can hope to obtain by agreement among the principal wartime Allies.
Further dispute and delay would gravely jeopardize political stability
in the countries concerned for many years.

During the long months of debate on these treaties, we have made it
clear to all nations that the United States will not consent to
settlements at the expense of principles we regard as vital to a just
and enduring peace. We have made it equally dear that we will not
retreat to isolationism. Our policies will be the same during the
forthcoming negotiations in Moscow on the German and Austrian treaties,
and during the future conferences on the Japanese treaty.

The delay in arriving at the first peace settlements is due partly to
the difficulty of reaching agreement with the Soviet Union on the terms
of settlement. Whatever differences there may have been between us and
the Soviet Union, however, should not be allowed to obscure the fact
that the basic interests of both nations lie in the early making of a
peace under which the peoples of all countries may return, as free men
and women, to the essential tasks of production and reconstruction. The
major concern of each of us should be the promotion of collective
security, not the advancement of individual security.

Our policy toward the Soviet Union is guided by the same principles
which determine our policies toward all nations. We seek only to uphold
the principles of international justice which have been embodied in the
Charter of the United Nations.

We must now get on with the peace settlements. The occupying powers
should recognize the independence of Austria and withdraw their troops.
The Germans and the Japanese cannot be left in doubt and fear as to
their future; they must know their national boundaries, their resources,
and what reparations they must pay. Without trying to manage their
internal affairs, we can insure that these countries do not re-arm.

INTERNATIONAL RELIEF AND DISPLACED PERSONS

The United States can be proud of its part in caring for the peoples
reduced to want by the ravages of war, and in aiding nations to restore
their national economies. We have shipped more supplies to the hungry
peoples of the world since the end of the war than all other countries
combined!

However, insofar as admitting displaced persons is concerned, I do not
feel that the United States has done its part. Only about 5,000 of them
have entered this country since May, 1946. The fact is that the
executive agencies are now doing all that is reasonably possible under
the limitation of the existing law and established quotas. Congressional
assistance in the form of new legislation is needed. I urge the Congress
to turn its attention to this world problem, in an effort to find ways
whereby we can fulfill our responsibilities to these thousands of
homeless and suffering refugees of all faiths.

INTERNATIONAL TRADE

World economic cooperation is essential to world political cooperation.
We have made a good start on economic cooperation through the
International Bank, the International Monetary fund, and the
Export-Import Bank. We must now take other steps for the reconstruction
of world trade and we should continue to strive for an international
trade system as free from obstructions as possible.

ATOMIC ENERGY

The United States has taken the lead in the endeavor to put atomic
energy under effective international control. We seek no monopoly for
ourselves or for any group of nations. We ask only that there be
safeguards sufficient to insure that no nation will be able to use this
power for military purposes. So long as all governments are not agreed
on means of international control of atomic energy, the shadow of fear
will obscure the bright prospects for the peaceful use of this enormous
power.

In accordance with the Atomic Energy Act of 1946, the Commission
established under that law is assuming full jurisdiction over domestic
atomic energy enterprise. The program of the Commission will, of course,
be worked out in close collaboration with the military services in
conformity with the wish of the Congress, but it is my fervent hope that
the military significance of atomic energy will steadily decline. We
look to the Commission to foster the development of atomic energy for
industrial use and scientific and medical research. In the vigorous and
effective development of peaceful uses of atomic energy rests our hope
that this new force may ultimately be turned into a blessing for all
nations.

MILITARY POLICY

In 1946 the Army and Navy completed the demobilization of their wartime
forces. They are now maintaining the forces which we need for national
defense and to fulfill our international obligations.

We live in a world in which strength on the part of peace-loving nations
is still the greatest deterrent to aggression. World stability can be
destroyed when nations with great responsibilities neglect to maintain
the means of discharging those responsibilities.

This is an age when unforeseen attack could come with unprecedented
speed. We must be strong enough to defeat, and thus forestall, any such
attack. In our steady Progress toward a more rational world order, the
need for large armed forces is progressively declining; but the
stabilizing force of American military strength must not be weakened
until our hopes are fully realized. When a system of collective security
under the United Nations has been established, we shall be willing to
lead in collective disarmament, but, until such a system becomes a
reality, we must not again allow ourselves to become weak and invite
attack.

For those reasons, we need well-equipped, well-trained armed forces and
we must be able to mobilize rapidly our resources in men and material
for our own defense, should the need arise.

The Army will be reduced to 1,070,000 officers and men by July 1, 1947.
Half of the Army will be used for occupation duties abroad and most of
the remainder will be employed at home in the support of these overseas
forces.

The Navy is supporting the occupation troops in Europe and in the Far
East. Its fundamental mission--to support our national interests
wherever required--is unchanged. The Navy, including the Marine Corps,
will average 571,000 officers and men during the fiscal year 1948.

We are encountering serious difficulties in maintaining our forces at
even these reduced levels. Occupation troops are barely sufficient to
carry out the duties which our foreign policy requires. Our forces at
home are at a point where further reduction is impracticable. We should
like an Army and a Navy composed entirely of long-term volunteers, but
in spite of liberal inducements the basic needs of the Army are not now
being met by voluntary enlistments.

The War Department has advised me that it is unable to make an accurate
forecast at the present time as to whether it will be possible to
maintain the strength of the Army by relying exclusively on volunteers.
The situation will be much clearer in a few weeks, when the results of
the campaign for volunteers are known. The War Department will make its
recommendations as to the need for the extension of Selective Service in
sufficient time to enable the Congress to take action prior to the
expiration of the present law on March 31st. The responsibility for
maintaining our armed forces at the strength necessary for our national
safety rests with the Congress.

The development of a trained citizen reserve is also vital to our
national security. This can best be accomplished through universal
training. I have appointed an Advisory Commission on Universal Training
to study the various plans for a training program, and I expect that the
recommendations of the Commission will be of benefit to the Congress and
to me in reaching decisions on this problem.

The cost of the military establishment is substantial. There is one
certain way by which we can cut costs and at the same time enhance our
national security. That is by the establishment of a single Department
of National Defense. I shall communicate with the Congress in the near
future with reference to the establishment of a single Department of
National Defense.

National security does not consist only of an army, a navy, and an air
force. It rests on a much broader basis. It depends on a sound economy
of prices and wages, on prosperous agriculture, on satisfied and
productive workers, on a competitive private enterprise free from
monopolistic repression, on continued industrial harmony and production,
on civil liberties and human freedoms-on all the forces which create in
our men and women a strong moral fiber and spiritual stamina.

But we have a higher duty and a greater responsibility than the
attainment of our own national security. Our goal is collective security
for all mankind.

If we can work in a spirit of understanding and mutual respect, we can
fulfill this solemn obligation which rests upon us.

The spirit of the American people can set the course of world history.
If we maintain and strengthen our cherished ideals, and if we share our
great bounty with war-stricken people over the world, then the faith of
our citizens in freedom and democracy will be spread over the whole
earth and free men everywhere will share our devotion to those ideals.

Let us have the will and the patience to this job together.

May the Lord strengthen us in our faith.

May He give us wisdom to lead the peoples of the world in His ways of
peace.

***

State of the Union Address
Harry S. Truman
January 7, 1948

Mr. President, Mr. Speaker, and Members of the 80th Congress:

We are here today to consider the state of the Union.

On this occasion, above all others, the Congress and the President
should concentrate their attention, not upon party but upon the country;
not upon things which divide us but upon those which bind us
together--the enduring principles of our American system, and our common
aspirations for the future welfare and security of the people of the
United States.

The United States has become great because [p.2] we, as a people, have
been able to work together for great objectives even while differing
about details.

The elements of our strength are many. They include our democratic
government, our economic system, our great natural resources. But these
are only partial explanations.

The basic source of our strength is spiritual. For we are a people with
a faith. We believe in the dignity of man. We believe that he was
created in the image of the Father of us all.

We do not believe that men exist merely to strengthen the state or to be
cogs in the economic machine. We do believe that governments are created
to serve the people and that economic systems exist to minister to their
wants. We have a profound devotion to the welfare and rights of the
individual as a human being.

The faith of our people has particular meaning at this time in history
because of the unsettled and changing state of the world.

The victims of war in many lands are striving to rebuild their lives,
and are seeking assurance that the tragedy of war will not occur again.
Throughout the world new ideas are challenging the old. Men of all
nations are reexamining the beliefs by which they live. Great scientific
and industrial changes have released new forces which will affect the
future course of civilization.

The state of our Union reflects the changing nature of the modern world.
On all sides there is heartening evidence of great energy--of capacity
for economic development-and even more important, capacity for spiritual
growth. But accompanying this great activity there are equally great
questions, great anxieties, and great aspirations. They represent the
concern of an enlightened people that conditions should be so arranged
as to make life more worthwhile.

We must devote ourselves to finding answers to these anxieties and
aspirations. We seek answers which will embody the moral and spiritual
elements of tolerance, unselfishness, and brotherhood upon which true
freedom and opportunity must rest.

As we examine the state of our Union today, we can benefit from viewing
it on a basis of the accomplishments of the last decade and of our goals
for the next. How far have we come during the last 10 years and how far
can we go in the next 10?

It was 10 years ago that the determination of dictators to wage war upon
mankind became apparent. The years that followed brought untold death
and destruction.

We shared in the human suffering of the war, but we were fortunate
enough to escape most of war's destruction. We were able through these
10 years to expand the productive strength of our farms and factories.

More important, however, is the fact that these years brought us new
courage, new confidence in the ideals of our free democracy. Our deep
belief in freedom and justice was reinforced in the crucible of war.

On the foundations of our greatly strengthened economy and our renewed
confidence in democratic values, we can continue to move forward.

There are some who look with fear and distrust upon planning for the
future. Yet our great national achievements have been attained by those
with vision. Our Union was formed, our frontiers were pushed back, and
our great industries were built by men who looked ahead.

I propose that we look ahead today toward those goals for the future
which have the greatest bearing upon the foundations of our democracy
and the happiness of our people.

I do so, confident in the thought that with clear objectives and with
firm determination, we can, in the next 10 years, build upon the [p.3]
accomplishments of the past decade to achieve a glorious future. Year by
year, beginning now, we must make a substantial part of this progress.

Our first goal is to secure fully the essential human rights of our
citizens.

The United States has always had a deep concern for human rights.
Religious freedom, free speech, and freedom of thought are cherished
realities in our land. Any denial of human rights is a denial of the
basic beliefs of democracy and of our regard for the worth of each
individual.

Today, however, some of our citizens are still denied equal opportunity
for education, for jobs and economic advancement, and for the expression
of their views at the polls. Most serious of all, some are denied equal
protection under laws. Whether discrimination is based on race, or
creed, or color, or land of origin, it is utterly contrary to American
ideals of democracy.

The recent report of the President's Committee on Civil Rights points
the way to corrective action by the Federal Government and by State and
local governments. Because of the need for effective Federal action, I
shall send a special message to the Congress on this important subject.

We should also consider our obligation to assure the fullest possible
measure of civil rights to the people of our territories and
possessions. I believe that the time has come for Alaska and Hawaii to
be admitted to the Union as States.

Our second goal is to protect and develop our human resources.

The safeguarding of the rights of our citizens must be accompanied by an
equal regard for their opportunities for development and their
protection from economic insecurity. In this Nation the ideals of
freedom and equality can be given specific meaning in terms of health,
education, social security, and housing.

Over the past 12 years we have erected a sound framework of social
security legislation. Many millions of our citizens are now protected
against the loss of income which can come with unemployment, old age, or
the death of wage earners. Yet our system has gaps and inconsistencies;
it is only half finished.

We should now extend unemployment compensation, old age benefits, and
survivors' benefits to millions who are not now protected. We should
also raise the level of benefits.

The greatest gap in our social security structure is the lack of
adequate provision for the Nation's health. We are rightly proud of the
high standards of medical care we know how to provide in the United
States. The fact is, however, that most of our people cannot afford to
pay for the care they need.

I have often and strongly urged that this condition demands a national
health program. The heart of the program must be a national system of
payment for medical care based on well-tried insurance principles. This
great Nation cannot afford to allow its citizens to suffer needlessly
from the lack of proper medical care.

Our ultimate aim must be a comprehensive insurance system to protect all
our people equally against insecurity and ill health.

Another fundamental aim of our democracy is to provide an adequate
education for every person.

Our educational systems face a financial crisis. It is deplorable that
in a Nation as rich as ours there are millions of children who do not
have adequate schoolhouses or enough teachers for a good elementary or
secondary education. If there are educational inadequacies in any State,
the whole Nation suffers. The Federal Government has a responsibility
for providing financial aid to meet this crisis.

In addition, we must make possible greater equality of opportunity to
all our citizens for education. Only by so doing can we insure that our
citizens will be capable of understanding and sharing the
responsibilities of democracy.

The Government's programs for health, education, and security are of
such great importance to our democracy that we should now establish an
executive department for their administration.

Health and education have their beginning in the home. No matter what
our hospitals or schools are like, the youth of our Nation are
handicapped when millions of them live in city slums and country shacks.
Within the next decade, we must see that every American family has a
decent home. As an immediate step we need the long-range housing program
which I have recommended on many occasions to this Congress. This should
include financial aids designed to yield more housing at lower prices.
It should provide public housing for low-income families, and vigorous
development of new techniques to lower the cost of building.

Until we can overcome the present drastic housing shortage, we must
extend and strengthen rent control.

We have had, and shall continue to have, a special interest in the
welfare of our veterans. Over 14 million men and women who served in the
armed forces in World War II have now returned to civilian life. Over 2
million veterans are being helped through school. Millions have been
aided while finding jobs, and have been helped in buying homes, in
obtaining medical care, and in adjusting themselves to physical
handicaps.

All but a very few veterans have successfully made the transition from
military life to their home communities. The success of our veterans'
program is proved by this fact. This Nation is proud of the eagerness
shown by our veterans to become self-reliant and self-supporting
citizens.

Our third goal is to conserve and use our natural resources so that they
can contribute most effectively to the welfare of our people.

The resources given by nature to this country are rich and extensive.
The material foundations of our growth and economic development are the
bounty of our fields, the wealth of our mines and forests, and the
energy of our waters. As a Nation, we are coming to appreciate more each
day the dose relationship between the conservation of these resources
and the preservation of our national strength.

We are doing far less than we know how to do to make use of our
resources without destroying them. Both the public and private use of
these resources must have the primary objective of maintaining and
increasing these basic supports for an expanding future.

We must continue to take specific steps toward this goal. We must
vigorously defend our natural wealth against those who would misuse it
for selfish gain.

We need accurate and comprehensive knowledge of our mineral resources
and must intensify our efforts to develop new supplies and to acquire
stockpiles of scarce materials.

We need to protect and restore our land-public and private--through
combating erosion and rebuilding the fertility of the soil.

We must expand our reclamation program to bring millions of acres of
arid land into production, and to improve water supplies for additional
millions of acres. This will provide new opportunities for veterans and
others, particularly in the West, and aid in providing a rising living
standard for a growing population.

We must protect and restore our forests by sustained-yield forestry and
by planting [p.5] new trees in areas now slashed and barren.

We must continue to erect multiple-purpose dams on our great rivers--not
only to reclaim land, but also to prevent floods, to extend our inland
waterways and to provide hydroelectric power. This public power must not
be monopolized for private gain. Only through well-established policies
of transmitting power directly to its market and thus encouraging
widespread use at low rates can the Federal Government assure the people
of their full share of its benefits. Additional power--public and
private--is needed to raise the ceilings now imposed by power shortages
on industrial and agricultural development.

We should achieve the wise use of resources through the integrated
development of our great river basins. We can learn much from our
Tennessee Valley experience. We should no longer delay in applying the
lessons of that vast undertaking to our other great river basins.

Our fourth goal is to lift the standard of living for all our people by
strengthening our economic system and sharing more broadly among our
people the goods we produce.

The amazing economic progress of the past 10 years points the way for
the next 10.

Today 14 million more people have jobs than in 1938.

Our yearly output of goods and services has increased by two-thirds.

The average income of our people, measured in dollars of equal
purchasing power, has increased--after taxes--by more than 50 percent.

In no other 10 years have farmers, businessmen, and wage earners made
such great gains.

We may not be able to expand as rapidly in the next decade as in the
last, because we are now starting from full employment and very high
production. But we can increase our annual output by at least one-third
above the present level. We can lift our standard of living to nearly
double what it was 10 years ago.

If we distribute these gains properly, we can go far toward stamping out
poverty in our generation.

To do this, agriculture, business, and labor must move forward together.

Permanent farm prosperity and agricultural abundance will be achieved
only as our whole economy grows and prospers. The farmer can sell more
food at good prices when the incomes of wage earners are high and when
there is full employment. Adequate diets for every American family, and
the needs of our industries at full production, will absorb a farm
output well above our present levels.

Although the average farmer is now better off than ever before, farm
families as a whole have only begun to catch up with the standards of
living enjoyed in the cities. In 1946, the average income of farm people
was $779, contrasted with an average income of $1,288 for nonfarm
people. Within the next decade, we should eliminate elements of
inequality in these living standards.

To this end our farm program should enable the farmer to market his
varied crops at fair price levels and to improve his standard of living.

We need to continue price supports for major farm commodities on a basis
which will afford reasonable protection against fluctuations in the
levels of production and demand. The present price support program must
be reexamined and modernized.

Crop insurance should be strengthened and its benefits extended in order
to protect the farmer against the special hazards to which he is
subject.

We also need to improve the means for getting farm products into markets
and into the hands of consumers. Cooperatives which [p.6] directly or
indirectly serve this purpose must be encouraged--not discouraged. The
school lunch program should be continued and adequately financed.

We need to go forward with the rural electrification program to bring
the benefits of electricity to all our farm population.

We can, and must, aid and encourage farmers to conserve their soil
resources and restore the fertility of the land that has suffered from
neglect or unwise use.

All these are practical measures upon which we should act immediately to
enable agriculture to make its full contribution to our prosperity.

We must also strengthen our economic system within the next decade by
enlarging our industrial capacity within the framework of our free
enterprise system.

We are today far short of the industrial capacity we need for a growing
future. At least $50 billion should be invested by industry to improve
and expand our productive facilities over the next few years. But this
is only the beginning. The industrial application of atomic energy and
other scientific advances will constantly open up further opportunities
for expansion. Farm prosperity and high employment will call for an
immensely increased output of goods and services.

Growth and vitality in our economy depend on vigorous private
enterprise. Free competition is the key to industrial development, full
production and employment, fair prices, and an ever improving standard
of living. Competition is seriously limited today in many industries by
the concentration of economic power and other elements of monopoly. The
appropriation of sufficient funds to permit proper enforcement of the
present antitrust laws is essential. Beyond that we should go on to
strengthen our legislation to protect competition.

Another basic element of a strong economic system is the well-being of
the wage earners.

We have learned that the well-being of workers depends on high
production and consequent high employment. We have learned equally well
that the welfare of industry and agriculture depends on high incomes for
our workers.

The Government has wisely chosen to set a floor under wages. But our
40-cent minimum wage is inadequate and obsolete. I recommend the lifting
of the minimum wage to 75 cents an hour.

In general, however, we must continue to rely on our sound system of
collective bargaining to set wage scales. Workers' incomes should
increase at a rate consistent with the maintenance of sound price,
profit, and wage relationships and with increase of productivity.

The Government's part in labor-management relations is now largely
controlled by the terms of the Labor-Management Relations Act of 1947. I
made my attitude clear on this act in my veto message to the Congress
last June. Nothing has occurred since to change my opinion of this law.
As long as it remains the law of the land, however, I shall carry out my
constitutional duty and administer it.

As we look ahead we can understand the crucial importance of restraint
and wisdom in arriving at new labor-management contracts. Work stoppages
would result in a loss of production--a loss which could bring higher
prices for our citizens and could also deny the necessities of life to
the hard-pressed peoples of other lands. It is my sincere hope that the
representatives of labor and of industry will bear in mind that the
Nation as a whole has a vital stake in the success of their bargaining
efforts.

If we surmount our current economic difficulties, we can move ahead to a
great increase [p.7] in our national income which will enable all our
people to enjoy richer and fuller lives.

All of us must advance together. One-fifth of our families now have
average annual incomes of less than $850. We must see that our gains in
national income are made more largely available to those with low
incomes, whose need is greatest. This will benefit us all through
providing a stable foundation of buying power to maintain prosperity.

Business, labor, agriculture, and Government, working together, must
develop the policies which will make possible the realization of the
full benefits of our economic system.

Our fifth goal is to achieve world peace based on principles of freedom
and justice and the equality of all nations.

Twice within our generation, world wars have taught us that we cannot
isolate ourselves from the rest of the world.

We have learned that the loss of freedom in any area of the world means
a loss of freedom to ourselves--that the loss of independence by any
nation adds directly to the insecurity of the United States and all free
nations.

We have learned that a healthy world economy is essential to world
peace--that economic distress is a disease whose evil effects spread far
beyond the boundaries of the afflicted nation.

For these reasons the United States is vigorously following policies
designed to achieve a peaceful and prosperous world.

We are giving, and will continue to give, our full support to the United
Nations. While that organization has encountered unforeseen and
unwelcome difficulties, I am confident of its ultimate success. We are
also devoting our efforts toward world economic recovery and the revival
of world trade. These actions are closely related and mutually
supporting.

We believe that the United States can be an effective force for world
peace only if it is strong. We look forward to the day when nations will
decrease their armaments. Yet so long as there remains serious
opposition to the ideals of a peaceful world, we must maintain strong
armed forces.

The passage of the National Security Act by the Congress at its last
session was a notable step in providing for the security of this
country. A further step which I consider of even greater importance is
the early provision for universal training. There are many elements in a
balanced national security program, all interrelated and necessary, but
universal training should be the foundation for them all. A favorable
decision by the Congress at an early date is of world importance. I am
convinced that such action is vital to the security of this Nation and
to the maintenance of its leadership.

The United States is engaged today in many international activities
directed toward the creation of lasting peaceful relationships among
nations.

We have been giving substantial aid to Greece and Turkey to assist those
nations in preserving their integrity against foreign pressures. Had it
not been for our aid, their situation today might well be radically
different. The continued integrity of those countries will have a
powerful effect upon other nations in the Middle East and in Europe
struggling to maintain their independence while they repair the damages
of war.

The United States has special responsibilities with respect to the
countries in which we have occupation forces: Germany, Austria, Japan,
and Korea. Our efforts to reach agreements on peace settlements for
these countries have so far been blocked. But we [p.8] shall continue to
exert our utmost efforts to obtain satisfactory settlements for each of
these nations.

Many thousands of displaced persons, still living in camps overseas,
should be allowed entry into the United States. I again urge the
Congress to pass suitable legislation at once so that this Nation may do
its share in caring for the homeless and suffering refugees of all
faiths. I believe that the admission of these persons will add to the
strength and energy of this Nation.

We are moving toward our goal of world peace in many ways. But the most
important efforts which we are now making are those which support world
economic reconstruction. We are seeking to restore the world trading
system which was shattered by the war and to remedy the economic
paralysis which grips many countries.

To restore world trade we have recently taken the lead in bringing about
the greatest reduction of world tariffs that the world has ever seen.
The extension of the provisions of the Reciprocal Trade Agreements Act,
which made this achievement possible, is of extreme importance. We must
also go on to support the International Trade Organization, through
which we hope to obtain worldwide agreement on a code of fair conduct in
international trade.

Our present major effort toward economic reconstruction is to support
the program for recovery developed by the countries of Europe. In my
recent message to the Congress, I outlined the reasons why it is wise
and necessary for the United States to extend this support.

I want to reaffirm my belief in the soundness and the promise of this
proposal. When the European economy is strengthened, the product of its
industry will be of benefit to many other areas of economic distress.
The ability of free men to overcome hunger and despair will be a moral
stimulus to the entire world.

We intend to work also with other nations in achieving world economic
recovery. We shall continue our cooperation with the nations of the
Western Hemisphere. A special program of assistance to China, to provide
urgent relief needs and to speed reconstruction, will be submitted to
the Congress.

Unfortunately, not all governments share the hope of the people of the
United States that economic reconstruction in many areas of the world
can be achieved through cooperative effort among nations. In spite of
these differences we will go forward with our efforts to overcome
economic paralysis.

No nation by itself can carry these programs to success; they depend
upon the cooperative and honest efforts of all participating countries.
Yet the leadership is inevitably ours.

I consider it of the highest importance that the Congress should
authorize support for the European recovery program for the period from
April 1, 1948, to June 30, 1952, with an initial amount for the first 15
months of $6.8 billion. I urge the Congress to act promptly on this
vital measure of our foreign policy--on this decisive contribution to
world peace.

We are following a sound, constructive, and practical course in carrying
out our determination to achieve peace.

We are fighting poverty, hunger, and suffering.

This leads to peace--not war.

We are building toward a world where all nations, large and small alike,
may live free from the fear of aggression. This leads to peace--not war.

Above all else, we are striving to achieve a concord among the peoples
of the world based upon the dignity of the individual and the
brotherhood of man.

This leads to peace--not war.

We can go forward with confidence that we are following sound policies,
both at home and with other nations, which will lead us toward our great
goals for economic, social and moral achievement.

As we enter the new year, we must surmount one major problem which
affects all our goals. That is the problem of inflation.

Already inflation in this country is undermining the living standards of
millions of families. Food costs too much. Housing has reached fantastic
price levels. Schools and hospitals are in financial distress. Inflation
threatens to bring on disagreement and strife between labor and
management.

Worst of all, inflation holds the threat of another depression, just as
we had a depression after the unstable boom following the First World
War.

When I announced last October that the Congress was being called into
session, I described the price increases which had taken place since
June 1946. Wholesale prices had increased 40 percent; retail prices had
increased 23 percent.

Since October prices have continued to rise. Wholesale prices have gone
up at an annual rate of 18 percent. Retail prices have gone up at an
annual rate of 10 percent.

The events which have occurred since I presented my 10-point
anti-inflation program to the Congress in November have made it even
clearer that all 10 points are essential.

High prices must not be our means of rationing.

We must deal effectively and at once with the high cost of living.

We must stop the spiral of inflation.

I trust that within the shortest possible time the Congress will make
available to the Government the weapons that are so desperately needed
in the fight against inflation.

One of the most powerful anti-inflationary factors in our economy today
is the excess of Government revenues over expenditures.

Government expenditures have been and must continue to be held at the
lowest safe levels. Since V-J day Federal expenditures have been sharply
reduced. They have been cut from more than $63 billion in the fiscal
year 1946 to less than $38 billion in the present fiscal year. The
number of civilian employees has been cut nearly in half--from 3 3/4
million down to 2 million.

On the other hand, Government revenues must not be reduced. Until
inflation has been stopped there should be no cut in taxes that is not
offset by additions at another point in our tax structure.

Certain adjustments should be made within our existing tax structure
that will not affect total receipts, yet will adjust the tax burden so
that those least able to pay will have their burden lessened by the
transfer of a portion of it to those best able to pay.

Many of our families today are suffering hardship because of the high
cost of living. At the same time profits of corporations have reached an
all-time record in 1947. Corporate profits total $17 billion after
taxes. This compared with $12.5 billion in 1946, the previous high year.

Because of this extraordinarily high level of profits, corporations can
well afford to carry a larger share of the taxload at this time.

During this period in which the high cost of living is bearing down on
so many of our families, tax adjustments should be made to ease their
burden. The low-income group particularly is being pressed very hard. To
this group a tax adjustment would result in a saving that could be used
to buy the necessities of life.

I recommend therefore that, effective January 1, 1948, a cost of living
tax credit be extended to our people consisting of a credit of $40 to
each individual taxpayer and an additional credit of $40 for each
dependent. [p.10] Thus the income tax of a man with a wife and two
children would be reduced $160. The credit would be extended to all
taxpayers, but it would be particularly helpful to those in the
low-income group.

It is estimated that such a tax credit would reduce Federal revenue by
$3.2 billion. This reduction should be made up by increasing the tax on
corporate profits in an amount that will produce this sum--with
appropriate adjustments for small corporations.

This is the proper method of tax relief at this time. It gives relief to
those who need it most without cutting the total tax revenue of the
Government.

When the present danger of inflation has passed we should consider tax
reduction based upon a revision of our entire tax structure.

When we have conquered inflation, we shall be in a position to move
forward toward our chosen goals.

As we do so, let us keep ever before us our high purposes. We are
determined that every citizen of this Nation shall have an equal right
and an equal opportunity to grow in wisdom and in stature and to take
his place in the control of his Nation's destiny.

We are determined that the productive resources of this Nation shall be
used wisely and fully for the benefit of all.

We are determined that the democratic faith of our people and the
strength of our resources shall contribute their full share to the
attainment of enduring peace in the world.

It is our faith in human dignity that underlies these purposes. It is
this faith that keeps us a strong and vital people.

This is a time to remind ourselves of these fundamentals. For today the
whole world looks to us for leadership.

This is the hour to rededicate ourselves to the faith in mankind that
makes us strong.

This is the hour to rededicate ourselves to the faith in God that gives
us confidence as we face the challenge of the years ahead.

***

State of the Union Address
Harry S. Truman
January 5, 1949

Mr. President, Mr. Speaker, Members of the Congress:

I am happy to report to this 81st Congress that the state of the Union
is good. Our Nation is better able than ever before to meet the needs of
the American people, and to give them their fair chance in the pursuit
of happiness. This great Republic is foremost among the nations of the
world in the search for peace.

During the last 16 years, our people have been creating a society which
offers new opportunities for every man to enjoy his share of the good
things of life.

In this society, we are conservative about the values and principles
which we cherish; but we are forward-looking in protecting those values
and principles and in extending their benefits. We have rejected the
discredited theory that the fortunes of the Nation should be in the
hands of a privileged few. We have abandoned the "trickledown" concept
of national prosperity. Instead, we believe that our economic system
should rest on a democratic foundation and that wealth should be created
for the benefit of all.

The recent election shows that the people of the United States are in
favor of this kind of society and want to go on improving it.

The American people have decided that poverty is just as wasteful and
just as unnecessary as preventable disease. We have pledged our common
resources to help one another in the hazards and struggles of individual
life. We believe that no unfair prejudice or artificial distinction
should bar any citizen of the United States of America from an
education, or from good health, or from a job that he is capable of
performing.

The attainment of this kind of society demands the best efforts of every
citizen in every walk of life, and it imposes increasing
responsibilities on the Government.

The Government must work with industry, labor, and the farmers in
keeping our economy running at full speed. The Government must see that
every American has a chance to obtain his fair share of our increasing
abundance. These responsibilities go hand in hand.

We cannot maintain prosperity unless we have a fair distribution of
opportunity and a widespread consumption of the products of our
factories and farms.

Our Government has undertaken to meet these responsibilities.

We have made tremendous public investments in highways, hydroelectric
power projects, soil conservation, and reclamation. We have established
a system of social security. We have enacted laws protecting the rights
and the welfare of our working people and the income of our farmers.
These Federal policies have paid for themselves many times over. They
have strengthened the material foundations of our democratic ideals.
Without them, our present prosperity would be impossible.

Reinforced by these policies, our private enterprise system has reached
new heights of production. Since the boom year of 1929, while our
population has increased by only 20 percent, our agricultural production
has increased by 45 percent, and our industrial production has increased
by 75 percent. We are turning out far more goods and more wealth per
worker than we have ever done before.

This progress has confounded the gloomy prophets--at home and abroad who
predicted the downfall of American capitalism. The people of the United
States, going their own way, confident in their own powers, have
achieved the greatest prosperity the world has even seen.

But, great as our progress has been, we still have a long way to go.

As we look around the country, many of our shortcomings stand out in
bold relief.

We are suffering from excessively high prices.

Our production is still not large enough to satisfy our demands.

Our minimum wages are far too low.

Small business is losing ground to growing monopoly.

Our farmers still face an uncertain future. And too many of them lack
the benefits of our modern civilization.

Some of our natural resources are still being wasted.

We are acutely short of electric power, although the means for
developing such power are abundant.

Five million families are still living in slums and firetraps. Three
million families share their homes with others.

Our health is far behind the progress of medical science. Proper medical
care is so expensive that it is out of the reach of the great majority
of our citizens.

Our schools, in many localities, are utterly inadequate.

Our democratic ideals are often thwarted by prejudice and intolerance.

Each of these shortcomings is also an opportunity-an opportunity for the
Congress and the President to work for the good of the people.

Our first great opportunity is to protect our economy against the evils
of "boom and bust."

This objective cannot be attained by government alone. Indeed, the
greater part of the task must be performed by individual efforts under
our system of free enterprise. We can keep our present prosperity, and
increase it, only if free enterprise and free government work together
to that end.

We cannot afford to float along ceaselessly on a postwar boom until it
collapses. It is not enough merely to prepare to weather a recession if
it comes. Instead, government and business must work together constantly
to achieve more and more jobs and more and more production--which mean
more and more prosperity for all the people.

The business cycle is man-made; and men of good will, working together,
can smooth it out.

So far as business is concerned, it should plan for steady, vigorous
expansion--seeking always to increase its output, lower its prices, and
avoid the vices of monopoly and restriction. So long as business does
this, it will be contributing to continued prosperity, and it will have
the help and encouragement of the Government.

The Employment Act of 1946 pledges the Government to use all its
resources to promote maximum employment, production, and purchasing
power. This means that the Government is firmly committed to protect
business and the people against the dangers of recession and against the
evils of inflation. This means that the Government must adapt its plans
and policies to meet changing circumstances.

At the present time, our prosperity is threatened by inflationary
pressures at a number of critical points in our economy. And the
Government must be in a position to take effective action at these
danger spots. To that end, I recommend that the Congress enact
legislation for the following purposes:

First, to continue the power to control consumer credit and enlarge the
power to control bank credit.

Second, to grant authority to regulate speculation on the commodity
exchanges.

Third, to continue export control authority and to provide adequate
machinery for its enforcement.

Fourth, to continue the priorities and allocation authority in the field
of transportation.

Fifth, to authorize priorities and allocations for key materials in
short supply.

Sixth, to extend and strengthen rent control.

Seventh, to provide standby authority to impose price ceilings for
scarce commodities which basically affect essential industrial
production or the cost of living, and to limit unjustified wage
adjustments which would force a break in an established price ceiling.

Eighth, to authorize an immediate study of the adequacy of production
facilities for materials in critically short supply, such as steel; and,
if found necessary, to authorize Government loans for the expansion of
production facilities to relieve such shortages, and to authorize the
construction of such facilities directly, if action by private industry
fails to meet our needs.

The Economic Report, which I shall submit to the Congress shortly, will
discuss in detail the economic background for these recommendations.

One of the most important factors in maintaining prosperity is the
Government's fiscal policy. At this time, it is essential not only that
the Federal budget be balanced, but also that there be a substantial
surplus to reduce inflationary pressures, and to permit a sizable
reduction in the national debt, which now stands at $252 billion. I
recommend, therefore, that the Congress enact new tax legislation to
bring in an additional $4 billion of Government revenue. This should
come principally from additional corporate taxes. A portion should come
from revised estate and gift taxes. Consideration should be given to
raising personal income rates in the middle and upper brackets.

If we want to keep our economy running in high gear, we must be sure
that every group has the incentive to make its full contribution to the
national welfare. At present, the working men and women of the Nation
are unfairly discriminated against by a statute that abridges their
rights, curtails their constructive efforts, and hampers our system of
free collective bargaining. That statute is the Labor-Management
Relations Act of 1947, sometimes called the Taft-Hartley Act.

That act should be repealed!

The Wagner Act should be reenacted. However, certain improvements, which
I recommended to the Congress 2 years ago, are needed. Jurisdictional
strikes and unjustified secondary boycotts should be prohibited. The use
of economic force to decide issues arising out of the interpretation of
existing contracts should be prevented. Without endangering our
democratic freedoms, means should be provided for setting up machinery
for preventing strikes in vital industries which affect the public
interest.

The Department of Labor should be rebuilt and strengthened and those
units properly belonging within that department should be placed in it.

The health of our economy and its maintenance at high levels further
require that the minimum wage fixed by law should be raised to at least
75 cents an hour.

If our free enterprise economy is to be strong and healthy, we must
reinvigorate the forces of competition. We must assure small business
the freedom and opportunity to grow and prosper. To this purpose, we
should strengthen our antitrust laws by closing those loopholes that
permit monopolistic mergers and consolidations.

Our national farm program should be improved-not only in the interest of
the farmers, but for the lasting prosperity of the whole Nation. Our
goals should be abundant farm production and parity income for
agriculture. Standards of living on the farm should be just as good as
anywhere else in the country.

Farm price supports are an essential part of our program to achieve
these ends. Price supports should be used to prevent farm price declines
which are out of line with general price levels, to facilitate
adjustments in production to consumer demands, and to promote good land
use. Our price support legislation must be adapted to these objectives.
The authority of the Commodity Credit Corporation to provide adequate
storage space for crops should be restored.

Our program for farm prosperity should also seek to expand the domestic
market for agricultural products, particularly among low-income groups,
and to increase and stabilize foreign markets.

We should give special attention to extending modern conveniences and
services to our farms. Rural electrification should be pushed forward.
And in considering legislation relating to housing, education, health,
and social security, special attention should be given to rural
problems.

Our growing population and the expansion of our economy depend upon the
wise management of our land, water, forest, and mineral wealth. In our
present dynamic economy, the task of conservation is not to lockup our
resources but to develop and improve them. Failure, today, to make the
investments which are necessary to support our progress in the future
would be false economy.

We must push forward the development of our rivers for power,
irrigation, navigation, and flood control. We should apply the lessons
of our Tennessee Valley experience to our other great river basins.

I again recommend action be taken by the Congress to approve the St.
Lawrence Seaway and Power project. This is about the fifth time I have
recommended it.

We must adopt a program for the planned use of the petroleum reserves
under the sea, which are--and must remain--vested in the Federal
Government. We must extend our programs of soil conservation. We must
place our forests on a sustained yield basis, and encourage the
development of new sources of vital minerals.

In all this we must make sure that the benefits of these public
undertakings are directly available to the people. Public power should
be carried to consuming areas by public transmission lines where
necessary to provide electricity at the lowest possible rates.
Irrigation waters should serve family farms and not land speculators.

The Government has still other opportunities--to help raise the standard
of living of our citizens. These opportunities lie in the fields of
social security, health, education, housing, and civil rights.

The present coverage of the social security laws is altogether
inadequate; the benefit payments are too low. One-third of our workers
are not covered. Those who receive old-age and survivors insurance
benefits receive an average payment of only $25 a month. Many others who
cannot work because they are physically disabled are left to the mercy
of charity. We should expand our social security program, both as to the
size of the benefits and the extent of coverage, against the economic
hazards due to unemployment, old age, sickness, and disability.

We must spare no effort to raise the general level of health in this
country. In a nation as rich as ours, it is a shocking fact that tens of
millions lack adequate medical care. We are short of doctors, hospitals,
nurses. We must remedy these shortages. Moreover, we need--and we must
have without further delay--a system of prepaid medical insurance which
will enable every American to afford good medical care.

It is equally shocking that millions of our children are not receiving a
good education. Millions of them are in overcrowded, obsolete buildings.
We are short of teachers, because teachers' salaries are too low to
attract new teachers, or to hold the ones we have. All these school
problems will become much more acute as a result of the tremendous
increase in the enrollment in our elementary schools in the next few
years. I cannot repeat too strongly my desire for prompt Federal
financial aid to the States to help them operate and maintain their
school systems.

The governmental agency which now administers the programs of health,
education, and social security should be given full departmental status.

The housing shortage continues to be acute. As an immediate step, the
Congress should enact the provisions for low-rent public housing, slum
clearance, farm housing, and housing research which I have repeatedly
recommended. The number of low-rent public housing units provided for in
the legislation should be increased to 1 million units in the next 7
years. Even this number of units will not begin to meet our need for new
housing.

Most of the houses we need will have to be built by private enterprise,
without public subsidy. By producing too few rental units and too large
a proportion of high-priced houses, the building industry is rapidly
pricing itself out of the market. Building costs must be lowered.

The Government is now engaged in a campaign to induce all segments of
the building industry to concentrate on the production of lower priced
housing. Additional legislation to encourage such housing will be
submitted.

The authority which I have requested, to allocate materials in short
supply and to impose price ceilings on such materials, could be used, if
found necessary, to channel more materials into homes large enough for
family life at prices which wage earners can afford.

The driving force behind our progress is our faith in our democratic
institutions. That faith is embodied in the promise of equal rights and
equal opportunities which the founders of our Republic proclaimed to
their countrymen and to the whole world.

The fulfillment of this promise is among the highest purposes of
government. The civil rights proposals I made to the 80th Congress, I
now repeat to the 81st Congress. They should be enacted in order that
the Federal Government may assume the leadership and discharge the
obligations dearly placed upon it by the Constitution.

I stand squarely behind those proposals.

Our domestic programs are the foundation of our foreign policy. The
world today looks to us for leadership because we have so largely
realized, within our borders, those benefits of democratic government
for which most of the peoples of the world are yearning.

We are following a foreign policy which is the outward expression of the
democratic faith we profess. We are doing what we can to encourage free
states and free peoples throughout the world, to aid the suffering and
afflicted in foreign lands, and to strengthen democratic nations against
aggression.

The heart of our foreign policy is peace. We are supporting a world
organization to keep peace and a world economic policy to create
prosperity for mankind. Our guiding star is the principle of
international cooperation. To this concept we have made a national
commitment as profound as anything in history.

To it we have pledged our resources and our honor.

Until a system of world security is established upon which we can safely
rely, we cannot escape the burden of creating and maintaining armed
forces sufficient to deter aggression. We have made great progress in
the last year in the effective organization of our Armed Forces, but
further improvements in our national security legislation are necessary.
Universal training is essential to the security of the United States.

During the course of this session I shall have occasion to ask the
Congress to consider several measures in the field of foreign policy. At
this time, I recommend that we restore the Reciprocal Trade Agreements
Act to full effectiveness, and extend it for 3 years. We should also
open our doors to displaced persons without unfair discrimination.

It should be clear by now to all citizens that we are not seeking to
freeze the status quo. We have no intention of preserving the injustices
of the past. We welcome the constructive efforts being made by many
nations to achieve a better life for their citizens. In the European
recovery program, in our good-neighbor policy and in the United Nations,
we have begun to batter down those national walls which block the
economic growth and the social advancement of the peoples of the world.

We believe that if we hold resolutely to this course, the principle of
international cooperation will eventually command the approval even of
those nations which are now seeking to weaken or subvert it.

We stand at the opening of an era which can mean either great
achievement or terrible catastrophe for ourselves and for all mankind.

The strength of our Nation must continue to be used in the interest of
all our people rather than a privileged few. It must continue to be used
unselfishly in the struggle for world peace and the betterment of
mankind the world over.

This is the task before us.

It is not an easy one. It has many complications, and there will be
strong opposition from selfish interests.

I hope for cooperation from farmers, from labor, and from business.
Every segment of our population and every individual has a right to
expect from our Government a fair deal.

In 1945, when I came down before the Congress for the first time on
April 16, I quoted to you King Solomon's prayer that he wanted wisdom
and the ability to govern his people as they should be governed. I
explained to you at that time that the task before me was one of the
greatest in the history of the world, and that it was necessary to have
the complete cooperation of the Congress and the people of the United
States.

Well now, we are taking a new start with the same situation. It is
absolutely essential that your President have the complete cooperation
of the Congress to carry out the great work that must be done to keep
the peace in this world, and to keep this country prosperous.

The people of this great country have a right to expect that the
Congress and the President will work in closest cooperation with one
objective--the welfare of the people of this Nation as a whole.

In the months ahead I know that I shall be able to cooperate with this
Congress.

Now, I am confident that the Divine Power which has guided us to this
time of fateful responsibility and glorious opportunity will not desert
us now.

With that help from Almighty God which we have humbly acknowledged at
every turning point in our national life, we shall be able to perform
the great tasks which He now sets before us.

***

State of the Union Address
Harry S. Truman
January 4, 1950

Mr. President, Mr. Speaker, Members of the Congress:

A year ago I reported to this Congress that the state of the Union was
good. I am happy to be able to report to you today that the state of the
Union continues to be good. Our Republic continues to increase in the
enjoyment of freedom within its borders, and to offer strength and
encouragement to all those who love freedom throughout the world.

During the past year we have made notable progress in strengthening the
foundations of peace and freedom, abroad and at home.

We have taken important steps in securing the North Atlantic community
against aggression. We have continued our successful support of European
recovery. We have returned to our established policy of expanding
international trade through reciprocal agreement. We have strengthened
our support of the United Nations.

While great problems still confront us, the greatest danger has
receded--the possibility which faced us 3 years ago that most of Europe
and the Mediterranean area might collapse under totalitarian pressure.
Today, the free peoples of the world have new vigor and new hope for the
cause of peace.

In our domestic affairs, we have made notable advances toward broader
opportunity and a better life for all our citizens.

We have met and reversed the first significant downturn in economic
activity since the war. In accomplishing this, Government programs for
maintaining employment and purchasing power have been of tremendous
benefit. As the result of these programs, and the wisdom and good
judgment of our businessmen and workers, major readjustments have been
made without widespread suffering.

During the past year, we have also made a good start in providing
housing for low-income groups; we have raised minimum wages; we have
gone forward with the development of our natural resources; we have
given a greater assurance of stability to the farmer; and we have
improved the organization and efficiency of our Government.

Today, by the grace of God, we stand a free and prosperous nation with
greater possibilities for the future than any people ever had before in
the history of the world.

We are now, in this year of 1950, nearing the midpoint of the 20th
century.

The first half of this century will be known as the most turbulent and
eventful period in recorded history. The swift pace of events promises
to make the next 50 years decisive in the history of man on this planet.

The scientific and industrial revolution which began two centuries ago
has, in the last 50 years, caught up the peoples of the globe in a
common destiny. Two world-shattering wars have proved that no corner of
the earth can be isolated from the affairs of mankind.

The human race has reached a turning point. Man has opened the secrets
of nature and mastered new powers. If he uses them wisely, he can reach
new heights of civilization. If he uses them foolishly, they may destroy
him.

Man must create the moral and legal framework for the world which will
insure that his new powers are used for good and not for evil. In
shaping the outcome, the people of the United States will play a leading
role.

Among all the great changes that have occurred in the last 50 years,
none is more important than the change in the position of the United
States in world affairs. Fifty years ago we were a country devoted
largely to our own internal affairs. Our industry was growing, and we
had new interests in the Far East and in the Caribbean, but we were
primarily concerned with the development of vast areas of our own
continental territory.

Today, our population has doubled. Our national production has risen
from about $50 billion, in terms of today's prices, to the staggering
figure of $255 billion a year. We have a more productive economic system
and a greater industrial potential than any other nation on the globe.
Our standard of living is an inspiration for all other peoples. Even the
slightest changes in our economic and social life have their effect on
other countries all around the world.

Our tremendous strength has brought with it tremendous responsibilities.
We have moved from the outer edge to the center of world affairs. Other
nations look to us for a wise exercise of our economic and military
strength, and for vigorous support of the ideals of representative
government and a free society. We will not fail them.

Our objective in the world is peace. Our country has joined with others
in the task of achieving peace. We know now that this is not an easy
task, or a short one. But we are determined to see it through. Both of
our great political parties are committed to working together--and I am
sure they will continue to work together--to achieve this end. We are
prepared to devote our energy and our resources to this task, because we
know that our own security and the future of mankind are at stake.

Right here, I want to say that no one appreciates more than I the
bipartisan cooperation in foreign affairs which has been enjoyed by this
administration.

Our success in working with other nations to achieve peace depends
largely on what we do at home. We must preserve our national strength.
Strength is not simply a matter of arms and force. It is a matter of
economic growth, and social health, and vigorous institutions, public
and private. We can achieve peace only if we maintain our productive
energy, our democratic institutions, and our firm belief in individual
freedom.

Our surest guide in the days that lie ahead will be the spirit in which
this great Republic was rounded. We must make our decisions in the
conviction that all men are created equal, that they are equally
entitled to life, liberty, and the pursuit of happiness, and that the
duty of government is to serve these ends.

This country of ours has experienced many blessings, but none greater
than its dedication to these principles. At every point in our history,
these ideals have served to correct our failures and shortcomings, to
spur us on to greater efforts, and to keep clearly before us the primary
purpose of our existence as a nation. They have enshrined for us, a
principle of government, the moral imperative to do justice, and the
divine command to men to love one another.

These principles give meaning to all that we do.

In foreign policy, they mean that we can never be tolerant of oppression
or tyranny. They mean that we must throw our weight on the side of
greater freedom and a better life for all peoples. These principles
confirm us in carrying out the specific programs for peace which we have
already begun.

We shall continue to give our wholehearted support to the United
Nations. We believe that this organization can ultimately provide the
framework of international law and morality without which mankind cannot
survive. It has already set up new standards for the conduct of nations
in the Declaration of Human Rights and the Convention on Genocide. It is
moving ahead to give meaning to the concept of world brotherhood through
a wide variety of cultural, economic, and technical activities.

The events of the past year again showed the value of the United Nations
in bringing about the peaceful adjustment of tense international
controversies. In Indonesia and in Palestine the efforts of the United
Nations have put a stop to bloodshed and paved the way to peaceful
settlements.

We are working toward the time when the United Nations will control
weapons of mass destruction and will have the forces to preserve
international law and order. While the world remains unsettled, however,
and as long as our own security and the security of the free world
require, we will maintain a strong and well-balanced defense
organization. The Selective Service System is an essential part of our
defense plans, and it must be continued.

Under the principles of the United Nations Charter we must continue to
share in the common defense of free nations against aggression. At the
last session this Congress laid the basis for this joint effort. We now
must put into effect the common defense plans that are being worked out.

We shall continue our efforts for world economic recovery, because world
prosperity is the only sure foundation of a permanent peace.

As an immediate means to this end we must continue our support of the
European recovery program. This program has achieved great success in
the first 2 years of its operation, but it has not yet been completed.
If we were to stop this program now, or cripple it, just because it is
succeeding, we should be doing exactly what the enemies of democracy
want us to do. We should be just as foolish as a man who, for reasons of
false economy, failed to put a roof on his house after building the
foundation and the walls.

World prosperity also requires that we do all we can to expand world
trade. As a major step in this direction we should promptly join the
International Trade Organization. The purpose of this organization,
which the United States has been foremost in creating, is to establish a
code of fair practice, and an international authority for adjusting
differences in international commercial relations. It is an effort to
prevent the kind of anarchy and irresponsibility in world trade which
did so much to bring about the world depression of the 1930's. An
expanding world economy requires the improvement of living standards and
the development of resources in areas where human poverty and misery now
prevail. Without such improvement the recovery of Europe and the future
of our own economy will not be secure. I urge that the Congress adopt
the legislation now before it to provide for increasing the flow of
technical assistance and capital investment in underdeveloped regions.

It is more essential now than ever, if the ideals of freedom and
representative government are to prevail in these areas, and
particularly in the Far East, that their peoples experience, in their
own lives, the benefits of scientific and economic advances. This
program will require the movement of large amounts of capital from the
industrial nations, and particularly from the United States, to
productive uses in the underdeveloped areas of the world. Recent world
events make prompt action imperative.

This program is in the interest of all peoples-and has nothing in common
with either the old imperialism of the last century or the new
imperialism of the Communists.

Our aim for a peaceful, democratic world of free peoples will be
achieved in the long run, not by force of arms, but by an appeal to the
minds and hearts of men. If the peace policy of the democratic nations
is to be successful, they must demonstrate that the benefits of their
way of life can be increased and extended to all nations and all races.

In the world today we are confronted with the danger that the rising
demand of people everywhere for freedom and a better life may be
corrupted and betrayed by the false promises of communism. In its
ruthless struggle for power, communism seizes upon our imperfections,
and takes advantage of the delays and setbacks which the democratic
nations experience in their effort to secure a better life for their
citizens. This challenge to us is more than a military challenge. It is
a challenge to the honesty of our profession of the democratic faith; it
is a challenge to the efficiency and stability of our economic system;
it is a challenge to the willingness to work with other peoples for
world peace and for world prosperity.

For my part I welcome that challenge. I believe that our country, at
this crucial point in world history, will meet that challenge
successfully. I believe that, in cooperation with the other free nations
of the world, we shall extend the full benefits of the democratic way of
life to millions who do not now enjoy them, and preserve mankind from
dictatorship and tyranny.

I believe that we shall succeed in our struggle for this peace, because
I have seen the success we have had in our own country in following the
principles of freedom. Over the last 50 years, the ideals of liberty and
equal opportunity to which this Nation is dedicated have been
increasingly realized in the lives of our people.

The ideal of equal opportunity no longer means simply the opportunity
which a man has to advance beyond his fellows. Some of our citizens do
achieve greater success than others as a reward for individual merit and
effort, and this is as it should be. At the same time our country must
be more than a land of opportunity for a select few. It must be a land
of opportunity for all of us. In such a land we can grow and prosper
together.

The simple truth that we can all go forward together is often questioned
by selfish or shortsighted persons. It is strange that this is so, for
this proposition is so clearly demonstrated by our national history.
During the last 50 years, for example, our Nation has grown enormously
in material well-being. This growth has come about, not by concentrating
the benefits of our progress in the hands of a few, but by increasing
the wealth of the great body of our Nation and our citizens.

In the last 50 years the income of the average family has increased so
greatly that its buying power has doubled. The average hours of work
have declined from 60 to 40 a week, the whole hourly production of the
average worker has tripled. Average wages, allowing for price changes,
have increased from about 45 cents an hour to $1.40 an hour.

We have accomplished what to earlier ages of mankind would have been a
miracle--we work shorter hours, we produce more, and we live better.

Increasing freedom from poverty and drudgery has given a fuller meaning
to American life. Our people are better educated; we have more
opportunities for travel and recreation and enjoyment of the arts. We
enjoy more personal liberty in the United States today than ever before.

If we can continue in the spirit of cooperative adventure which has
marked the recent years of our progress, we can expect further
scientific advances, further increases in our standard of living, and a
still wider enjoyment of democratic freedom.

No one, of course, can foretell the future exactly. However, if we
assume that we shall grow as fast in the future as we have grown in the
past, we can get a good idea of how much our country should grow in the
next 50 years.

At present our total national production is $255 billion a year. Our
working population and our output per worker are increasing. If our
productive power continues to increase at the same rate as it has
increased over the past 50 years, our total national production 50 years
from now will be nearly four times as much as it is today. Allowing for
the expected growth in population, this would mean that the real income
of the average family in the year 2000 A.D. would be about three times
what it is today.

These are estimates of what we can do in the future, but we can reach
these heights only if we follow the right policies. We have learned by
bitter experience that progress is not automatic--that wrong policies
lead to depression and disaster. We cannot achieve these gains unless we
have a stable economy and avoid the catastrophes of boom and bust that
have set us back in the past.

These gains cannot be achieved unless our businessmen maintain their
spirit of initiative and enterprise and operate in a competitive
economy. They cannot be achieved unless our workingmen and women and
their unions help to increase productivity and obtain for labor a fair
share of the benefits of our economic system. They cannot be achieved
unless we have a stable and prosperous agriculture. They cannot be
achieved unless we conserve and develop our natural resources in the
public interest. Our system will not work unless our people are healthy,
well-educated, and confident of the future. It will not work unless all
citizens can participate fully in our national life.

In achieving these gains the Government has a special responsibility to
help create and maintain the conditions which will permit the growth we
know is possible. Foremost among these conditions is the need for a fair
distribution of our increasing prosperity among all the great groups of
our population who help to bring it about-labor, business, agriculture.

Businessmen must continue to have the incentives necessary for
investment and for the development of new lines of enterprise. In the
future growth of this country, lie possibilities for hundreds of
thousands of new and independent businesses. As our national production
increases, as it doubles and redoubles in the next 50 years, the number
of independent and competing enterprises should also increase. If the
number does not increase, our constantly growing economy will fall under
the control of a few dominant economic groups whose powers will be so
great that they will be a challenge to democratic institutions.

To avoid this danger, we must curb monopoly and provide aids to
independent business so that it may have the credit and capital to
compete in a system of free enterprise. I recommend that the Congress
complete action at this session on the pending bill to close the
loopholes in the Clayton Act which now permit monopolistic mergers. I
also hope before this session is over to transmit to the Congress a
series of proposals to strengthen the antimonopoly laws, to assist small
business, and to encourage the growth of new enterprises.

In the case of labor, free collective bargaining must be protected and
encouraged. Collective bargaining is not only a fundamental economic
freedom for labor. It is also a strengthening and stabilizing influence
for our whole economy.

The Federal statute now governing labor relations is punitive in purpose
and one-sided in operation. This statute is, and always has been,
inconsistent with the practice of true and effective collective
bargaining. It should be repealed and replaced by a law that is fair to
all and in harmony with our democratic ideals.

A full understanding of the problems of modern labor relations is of
such importance that I recommend the establishment of a labor extension
service to encourage educational activities in this field.

Another essential for our continued growth is a stable and prosperous
agriculture. For many years we have been building a program to give the
farmer a reasonable measure of protection against the special hazards to
which he is exposed. That program was improved at the last session of
the Congress. However, our farm legislation is still not adequate.

Although the Congress has properly declared as a matter of national
policy that safeguards must be maintained against slumps in farm prices,
there are serious shortcomings in the methods now available for carrying
out this policy. Mandatory price supports should be provided for the
commodities not now covered which are major sources of farm income.

Moreover, we should provide a method of supporting farm income at fair
levels which will, at the same time, avoid piling up unmanageable
surpluses and allow consumers to obtain the full benefit of our abundant
agricultural production. A system of production payments gives the
greatest promise of accomplishing this purpose. I recommend that the use
of such a system be authorized.

One of the most important factors in our continued growth is the
construction of more good, up-to-date housing. In a country such as ours
there is no reason why decent homes should not be within the reach of
all. With the help of various Government programs we have made great
progress in the last few years in increasing the number of homes.

Despite this increase, there is still an acute shortage of housing for
the lower and middle-income groups, especially in large metropolitan
areas. We have laid the groundwork for relieving the plight of
lower-income families in the Housing Act of 1949. To aid the
middle-income families, I recommend that the Congress enact new
legislation authorizing a vigorous program to help cooperatives and
other nonprofit groups build housing which these families can afford.

Rent control has done a great deal to prevent the housing shortage from
having had worse effects during this postwar period of adjustment. Rent
control is still necessary to prevent widespread hardship and sharp
curtailment of the buying power of millions of consumers in metropolitan
areas. I recommend, therefore, that rent control be continued for
another year.

If we are to achieve a better life for all, the natural resources of the
country must be regarded as a public trust. We must use our precious
assets of soil, water, and forest, and grassland in such a way that they
become constantly more productive and more valuable. Government
investment in the conservation and development of our resources is
necessary to the future economic expansion of the country.

We need to enlarge the production and transmission of public power. That
is true not only in those regions which have already received great
benefits from Federal power projects, but also in regions such as New
England where the benefits of large-scale public power development have
not yet been experienced.

In our hydroelectric and irrigation undertakings, as well as in our
other resource programs, we must continue policies to assure that their
benefits will be spread among the many and not restricted to the favored
few.

Important resource legislation which should be passed at this session
includes the authorization of the St. Lawrence seaway and power project
and the establishment of the Columbia Valley Administration--the
establishment of the Columbia Valley Administration, I don't want you to
miss that.

Through wise Government policies and Government expenditures for the
conservation and development of our natural resources, we can be sure of
transmitting to our children and our children's children a country far
richer and more productive than the one we know today.

The value of our natural resources is constantly being increased by the
progress of science. Research is finding new ways of using such natural
assets as minerals, sea water, and plant life. In the peaceful
development of atomic energy, particularly, we stand on the threshold of
new wonders. The first experimental machines for producing useful power
from atomic energy are now under construction. We have made only the
first beginnings in this field, but in the perspective of history they
may loom larger than the first airplane, or even the first tools that
started man on the road to civilization.

To take full advantage of the increasing possibilities of nature we must
equip ourselves with increasing knowledge. Government has a
responsibility to see that our country maintains its position in the
advance of science. As a step toward this end, the Congress should
complete action on the measure to create a National Science Foundation.

Another duty of the Government is to promote the economic security, the
health, and the education of its citizens. By so doing, we strengthen
both our economy and the structure of our society. In a nation as rich
as ours, all citizens should be able to live in decency and health.

Our Social Security System should be developed into the main reliance of
our people for basic protection against the economic hazards of old-age,
unemployment, and illness. I earnestly hope that the Congress will
complete action at this session on legislation to increase the benefits
and extend the coverage of old-age and survivors' insurance. The
widespread movement to provide pensions in private industry dramatizes
the need for improvements in the public insurance system.

I also urge that the Congress strengthen our unemployment compensation
law to meet present-day needs more adequately. The economic downturn of
the past year was the first real test that our system of unemployment
insurance has had to meet. That test has proved the wisdom of the
system, but it has also made strikingly apparent the need for improving
its operation and increasing its coverage and its benefits.

In the field of health there are immense opportunities to extend to more
of our people the benefits of the amazing advances in medical science.
We have made a good beginning in expanding our hospitals, but we must
also go on to remedy the shortages of doctors, nurses, and public health
services, and to establish a system of medical insurance which will
enable all Americans to afford good medical care.

We must take immediate steps to strengthen our educational system. In
many parts of our country, young people are being handicapped for life
because of a poor education. The rapidly increasing number of children
of school age, coupled with the shortage of qualified teachers, makes
this problem more critical each year. I believe that the Congress should
no longer delay in providing Federal assistance to the States so that
they can maintain adequate schools.

As we go forward in achieving greater economic security and greater
opportunity for all our people, we should make every effort to extend
the benefits of our democratic institutions to every citizen. The
religious ideals which we profess, and the heritage of freedom which we
have received from the past, clearly place that duty upon us. I again
urge the Congress to enact the civil rights proposals I made in February
1948. These proposals are for the enactment of Federal statutes which
will protect all our people in the exercise of their democratic rights
and their search for economic opportunity, grant statehood to Alaska and
Hawaii, provide a greater measure of self-government for our island
possessions, and accord home rule to the District of Columbia. Some of
those proposals have been before the Congress for a long time. Those who
oppose them, as well as those who favor them, should recognize that it
is the duty of the elected representatives of the people to let these
proposals come to a vote.

Our democratic ideals, as well as our best interests, require that we do
our fair share in providing homes for the unfortunate victims of war and
tyranny. In so doing, we shall add strength to our democracy through the
abilities and skills which these men and women will bring here. I urge
the prompt enactment by the Congress of the legislation now before it to
extend and broaden the existing displaced persons law and remove its
discriminatory features.

The measures I am recommending to the Congress concerning both our
foreign and our domestic policies represent a carefully considered
program to meet our national needs. It is a program which necessarily
requires large expenditures of funds. More than 70 percent of the
Government's expenditures are required to meet the costs of past wars
and to work for world peace. This is the dominant factor in our fiscal
policy. At the same time, the Government must make substantial
expenditures which are necessary to the growth and expansion of the
domestic economy.

At present, largely because of the ill-considered tax reduction of the
Both Congress, the Government is not receiving enough revenue to meet
its necessary expenditures.

To meet this situation, I am proposing that Federal expenditures be held
to the lowest levels consistent with our international requirements and
the essential needs of economic growth, and the well-being of our
people. I think I had better read that over; you interrupted me in the
middle.

To meet this situation, I am proposing that Federal expenditures be held
to the lowest levels consistent with our international requirements and
the essential needs of economic growth, and the well-being of our
people. Don't forget that last phrase. At the same time, we must guard
against the folly of attempting budget slashes which would impair our
prospects for peace or cripple the programs essential to our national
strength.

The budget recommendations I shall shortly transmit to the Congress show
that we can expect a substantial improvement in our fiscal position over
the next few years, as the cost of some of our extraordinary postwar
programs declines, and as the Government revenue rises as a result of
growth in employment and national income. To further improve our fiscal
outlook, we should make some changes in our tax system which will reduce
present inequities, stimulate business activity, and yield a moderate
amount of additional revenue. I expect to transmit specific
recommendations to the Congress on this subject at a very early date.

The fiscal policy I am recommending is the quickest and safest way of
achieving a balanced budget.

As we move forward into the second half of the 20th century, we must
always bear in mind the central purpose of our national life. We do not
seek material prosperity for ourselves because we love luxury; we do not
aid other nations because we wish to increase our power. We have not
devised programs for the security and well-being of our people because
we are afraid or unwilling to take risks. This is not the meaning of our
past history or our present course.

We work for a better life for all, so that all men may put to good use
the great gifts with which they have been endowed by their Creator. We
seek to establish those material conditions of life in which, without
exception, men may live in dignity, perform useful work, serve their
communities, and worship God as they see fit.

These may seem simple goals, but they are not little ones. They are
worth a great deal more than all the empires and conquests of history.
They are not to be achieved by military aggression or political
fanaticism. They are to be achieved by humbler means-by hard work, by a
spirit of self-restraint in our dealings with one another, and by a deep
devotion to the principles of justice and equality.

It should make us truly thankful, as we look back to the beginnings of
this country, that we have come so far along the road to a better life
for all. It should make us humble to think, as we look ahead, how much
farther we have to go to accomplish, at home and abroad, the objectives
that were set out for us at the founding of this great Nation.

As we approach the halfway mark of the 20th century, we should ask for
continued strength and guidance from that Almighty Power who has placed
before us such great opportunities for the good of mankind in the years
to come.

***

State of the Union Address
Harry S. Truman
January 8, 1951

Mr. President, Mr. Speaker, Members of the Congress:

This 82d Congress faces as grave a task as any Congress in the history
of our Republic. The actions you take will be watched by the whole
world. These actions will measure the ability of a free people, acting
through their chosen representatives and their free institutions, to
meet a deadly challenge to their way of life.

We can meet this challenge foolishly or wisely. We can meet it timidly
or bravely, shamefully or honorably.

I know that the 82d Congress will meet this challenge in a way worthy of
our great heritage. I know that your debates will be earnest,
responsible, constructive, and to the point. I know that from these
debates there will come the great decisions needed to carry us forward.

At this critical time, I am glad to say that our country is in a healthy
condition. Our democratic institutions are sound and strong. We have
more men and women at work than ever before. We are able to produce more
than ever before--in fact, far more than any country ever produced in
the history of the world.

I am confident that we can succeed in the great task that lies before
us.

We will succeed, but we must all do our part. We must all act together
as citizens of this great Republic.

As we meet here today, American soldiers are fighting a bitter campaign
in Korea. We pay tribute to their courage, devotion, and gallantry.

Our men are fighting, alongside their United Nations allies, because
they know, as we do, that the aggression in Korea is part of the attempt
of the Russian Communist dictatorship to take over the world, step by
step.

Our men are fighting a long way from home, but they are fighting for our
lives and our liberties. They are fighting to protect our right to meet
here today--our right to govern ourselves as a free nation.

The threat of world conquest by Soviet Russia endangers our liberty and
endangers the kind of world in which the free spirit of man can survive.
This threat is aimed at all peoples who strive to win or defend their
own freedom and national independence.

Indeed, the state of our Nation is in great part the state of our
friends and allies throughout the world. The gun that points at them
points at us, also. The threat is a total threat and the danger is a
common danger.

All free nations are exposed and all are in peril. Their only security
lies in banding together. No one nation can find protection in a selfish
search for a safe haven from the storm.

The free nations do not have any aggressive purpose. We want only peace
in the world--peace for all countries. No threat to the security of any
nation is concealed in our plans and programs.

We had hoped that the Soviet Union, with its security assured by the
Charter of the United Nations, would be willing to live and let live.
But I am sorry to say that has not been the case.

The imperialism of the czars has been replaced by the even more
ambitious, more crafty, and more menacing imperialism of the rulers of
the Soviet Union.

This new imperialism has powerful military forces. It is keeping
millions of men under arms. It has a large air force and a strong
submarine force. It has complete control of the men and equipment of its
satellites. It has kept its subject peoples and its economy in a state
of perpetual mobilization.

The present rulers of the Soviet Union have shown that they are willing
to use this power to destroy the free nations and win domination over
the whole world.

The Soviet imperialists have two ways of going about their destructive
work. They use the method of subversion and internal revolution, and
they use the method of external aggression. In preparation for either of
these methods of attack, they stir up class strife and disorder. They
encourage sabotage. They put out poisonous propaganda. They deliberately
try to prevent economic improvement.

If their efforts are successful, they foment a revolution, as they did
in Czechoslovakia and China, and as they tried, unsuccessfully, to do in
Greece. If their methods of subversion are blocked, and if they think
they can get away with outright warfare, they resort to external
aggression. This is what they did when they loosed the armies of their
puppet states against the Republic of Korea, in an evil war by proxy.

We of the free world must be ready to meet both of these methods of
Soviet action. We must not neglect one or the other.

The free world has power and resources to meet these two forms of
aggression--resources that are far greater than those of the Soviet
dictatorship. We have skilled and vigorous peoples, great industrial
strength, and abundant sources of raw materials. And above all, we
cherish liberty. Our common ideals are a great part of our strength.
These ideals are the driving force of human progress.

The free nations believe in the dignity and the worth of man.

We believe in independence for all nations.

We believe that free and independent nations can band together into a
world order based on law. We have laid the cornerstone of such a
peaceful world in the United Nations.

We believe that such a world order can and should spread the benefits of
modern science and industry, better health and education, more food and
rising standards of living--throughout the world.

These ideals give our cause a power and vitality that Russian communism
can never command.

The free nations, however, are bound together by more than ideals. They
are a real community bound together also by the ties of self-interest
and self-preservation. If they should fall apart, the results would be
fatal to human freedom.

Our own national security is deeply involved with that of the other free
nations. While they need our support, we equally need theirs. Our
national safety would be gravely prejudiced if the Soviet Union were to
succeed in harnessing to its war machine the resources and the manpower
of the free nations on the borders of its empire.

If Western Europe were to fall to Soviet Russia, it would double the
Soviet supply of coal and triple the Soviet supply of steel. If the free
countries of Asia and Africa should fall to Soviet Russia, we would lose
the sources of many of our most vital raw materials, including uranium,
which is the basis of our atomic power. And Soviet command of the
manpower of the free nations of Europe and Asia would confront us with
military forces which we could never hope to equal.

In such a situation, the Soviet Union could impose its demands on the
world, without resort to conflict, simply through the preponderance of
its economic and military power. The Soviet Union does not have to
attack the United States to secure domination of the world. It can
achieve its ends by isolating us and swallowing up all our allies.
Therefore, even if we were craven enough I do not believe we could
be--but, I say, even if we were craven enough to abandon our ideals, it
would be disastrous for us to withdraw from the community of free
nations.

We are the most powerful single member of this community, and we have a
special responsibility. We must take the leadership in meeting the
challenge to freedom and in helping to protect the rights of independent
nations.

This country has a practical, realistic program of action for meeting
this challenge.

First, we shall have to extend economic assistance, where it can be
effective. The best way to stop subversion by the Kremlin is to strike
at the roots of social injustice and economic disorder. People who have
jobs, homes, and hopes for the future will defend themselves against the
underground agents of the Kremlin. Our programs of economic aid have
done much to turn back Communism,

In Europe the Marshall plan has had an electrifying result. As European
recovery progressed, the strikes led by the Kremlin's agents in Italy
and France failed. All over Western Europe the Communist Party took
worse and worse beatings at the polls.

The countries which have received Marshall plan aid have been able,
through hard work, to expand their productive strength-in many cases, to
levels higher than ever before in their history. Without this strength
they would be completely incapable of defending themselves today. They
are now ready to use this strength in helping to build a strong combined
defense against aggression.

We shall need to continue some economic aid to European countries. This
aid should now be specifically related to the building of their
defenses.

In other parts of the world our economic assistance will need to be more
broadly directed toward economic development. In the Near East, in
Africa, in Asia, we must do what we can to help people who are striving
to advance from misery, poverty, and hunger. We must also continue to
help the economic growth of our good neighbors in this hemisphere. These
actions will bring greater strength for the free world. They will give
many people a real stake in the future and reason to defend their
freedom. They will mean increased production of goods they need and
materials we need.

Second, we shall need to continue our military assistance to countries
which want to defend themselves.

The heart of our common defense effort is the North Atlantic community.
The defense of Europe is the basis for the defense of the whole free
world--ourselves included. Next to the United States, Europe is the
largest workshop in the world. It is also a homeland of the great
religious beliefs shared by many of our citizens beliefs which are now
threatened by the tide of atheistic communism.

Strategically, economically, and morally, the defense of Europe is a
part of our own defense. That is why we have joined with the countries
of Europe in the North Atlantic Treaty, pledging ourselves to work with
them.

There has been much discussion recently over whether the European
countries are willing to defend themselves. Their actions are answering
this question.

Our North Atlantic Treaty partners have strict systems of universal
military training. Several have recently increased the term of service.
All have taken measures to improve the quality of training. Forces are
being trained and expanded as rapidly as the necessary arms and
equipment can be supplied from their factories and ours. Our North
Atlantic Treaty partners, together, are building armies bigger than our
own.

None of the North Atlantic Treaty countries, including our own country,
has done enough yet. But real progress is being made. Together, we have
worked out defense plans. The military leaders of our own country took
part in working out these plans, and are agreed that they are sound and
within our capabilities.

To put these plans into action, we sent to Europe last week one of our
greatest military commanders, General Dwight D. Eisenhower.

General Eisenhower went to Europe to assume command of the united forces
of the North Atlantic Treaty countries, including our own forces in
Germany.

The people of Europe have confidence in General Eisenhower. They know
his ability to put together a fighting force of allies. His mission is
vital to our security. We should all stand behind him, and give him
every bit of help we can.

Part of our job will be to reinforce the military strength of our
European partners by sending them weapons and equipment as our military
production expands.

Our program of military assistance extends to the nations in the Near
East and the Far East which are trying to defend their freedom. Soviet
communism is trying to make these nations into colonies, and to use
their people as cannon fodder in new wars of conquest. We want their
people to be free men and to enjoy peace.

Our country has always stood for freedom for the peoples of Asia. Long,
long ago it stood for the freedom of the peoples of Asia. Our history
shows this. We have demonstrated it in the Philippines. We have
demonstrated it in our relations with Indonesia, India, and with China.
We hope to join in restoring the people of Japan to membership in the
community of free nations.

It is in the Far East that we have taken up arms, under the United
Nations, to preserve the principle of independence for free nations. We
are fighting to keep the forces of Communist aggression from making a
slave state out of Korea.

Korea has tremendous significance for the world. It means that free
nations, acting through the United Nations, are fighting together
against aggression.

We will understand the importance of this best if we look back into
history. If the democracies had stood up against the invasion of
Manchuria in 1931, or the attack on Ethiopia in 1935, or the seizure of
Austria in 1938, if they had stood together against aggression on those
occasions as the United Nations has done in Korea, the whole history of
our time would have been different.

The principles for which we are fighting in Korea are right and just.
They are the foundations of collective security and of the future of
free nations. Korea is not only a country undergoing the torment of
aggression; it is also a symbol. It stands for right and justice in the
world against oppression and slavery. The free world must always stand
for these principles--and we will stand with the free world.

As the third part of our program, we will continue to work for peaceful
settlements in international disputes. We will support the United
Nations and remain loyal to the great principles of international
cooperation laid down in its charter.

We are willing, as we have always been, to negotiate honorable
settlements with the Soviet Union. But we will not engage in
appeasement.

The Soviet rulers have made it clear that we must have strength as well
as right on our side. If we build our strength--and we are building
it--the Soviet rulers may face the facts and lay aside their plans to
take over the world.

That is what we hope will happen, and that is what we are trying to
bring about. That is the only realistic road to peace.

These are the main elements of the course our Nation must follow as a
member of the community of free nations. These are the things we must do
to preserve our security and help create a peaceful world. But they will
be successful only if we increase the strength of our own country.

Here at home we have some very big jobs to do. We are building much
stronger military forces--and we are building them fast. We are
preparing for full wartime mobilization, if that should be necessary.
And we are continuing to build a strong and growing economy, able to
maintain whatever effort may be required for as long as necessary.

We are building our own Army, Navy, and Air Force to an active strength
of nearly 3 1/2 million men and women. We are stepping up the training
of the reserve forces, and establishing more training facilities, so
that we can rapidly increase our active forces far more on short notice.

We are going to produce all the weapons and equipment that such an armed
force will need. Furthermore, we will make weapons for our allies, and
weapons for our own reserve supplies. On top of this, we will build the
capacity to turn out on short notice arms and supplies that may be
needed for a full-scale war.

Fortunately, we have a good start on this because of our enormous plant
capacity and because of the equipment on hand from the last war. For
example, many combat ships are being returned to active duty from the
"mothball fleet" and many others can be put into service on very short
notice. We have large reserves of arms and ammunition and thousands of
workers skilled in arms production.

In many cases, however, our stocks of weapons are low. In other cases,
those on hand are not the most modern. We have made remarkable technical
advances. We have developed new types of jet planes and powerful new
tanks. We are concentrating on producing the newest types of weapons and
producing them as fast as we can.

This production drive is more selective than the one we had during World
War II, but it is just as urgent and intense. It is a big program and it
is a costly one.

Let me give you two concrete examples. Our present program calls for
expanding the aircraft industry so that it will have the capacity to
produce 50,000 modern military planes a year. We are preparing the
capacity to produce 35,000 tanks a year. We are not now ordering that
many planes or that many tanks, and we hope that we never have to, but
we mean to be able to turn them out if we need them.

The planes we are producing now are much bigger, much better, and much
more expensive than the planes we had during the last war.

We used to think that the B-17 was a huge plane, and the blockbuster it
carried a huge load. But the B-36 can carry five of these blockbusters
in its belly, and it can carry them five times as far. Of course, the
B-36 is much more complicated to build than the B-17, and far more
expensive. One B-17 costs $275,000, while now one B-36 costs $3 1/2
million.

I ask you to remember that what we are doing is to provide the best and
most modern military equipment in the world for our fighting forces.

This kind of defense production program has two parts.

The first part is to get our defense production going as fast as
possible. We have to convert plants and channel materials to defense
production. This means heavy cuts in civilian uses of copper, aluminum,
rubber, and other essential materials. It means shortages in various
consumer goods.

The second part is to increase our capacity to produce and to keep our
economy strong for the long pull. We do not know how long Communist
aggression will threaten the world.

Only by increasing our output can we carry the burden of preparedness
for an indefinite period in the future. This means that we will have to
build more power plants and more steel mills, grow more cotton, mine
more copper, and expand our capacity in many other ways.

The Congress will need to consider legislation, at this session,
affecting all the aspects of our mobilization job. The main subjects on
which legislation will be needed are:

First, appropriations for our military buildup.

Second, extension and revision of the Selective Service Act.

Third, military and economic aid to help build up the strength of the
free world.

Fourth, revision and extension of the authority to expand production and
to stabilize prices, wages, and rents.

Fifth, improvement of our agricultural laws to help obtain the kinds of
farm products we need for the defense effort.

Sixth, improvement of our labor laws to help provide stable
labor-management relations and to make sure that we have steady
production in this emergency.

Seventh, housing and training of defense workers and the full use of all
our manpower resources.

Eighth, means for increasing the supply of doctors, nurses, and other
trained medical personnel critically needed for the defense effort.

Ninth, aid to the States to meet the most urgent needs of our elementary
and secondary schools. Some of our plans will have to be deferred for
the time being. But we should do all we can to make sure our children
are being trained as good and useful citizens in the critical times
ahead.

Tenth, a major increase in taxes to meet the cost of the defense effort.

The Economic Report and the Budget Message will discuss these subjects
further. In addition, I shall send to the Congress special messages
containing detailed recommendations on legislation needed at this
Session.

In the months ahead the Government must give priority to activities that
are urgent--like military procurement and atomic energy and power
development. It must practice rigid economy in its nondefense
activities. Many of the things we would normally do must be curtailed or
postponed.

But in a long-term defense effort like this one, we cannot neglect the
measures needed to maintain a strong economy and a healthy democratic
society.

The Congress, therefore, should give continued attention to the measures
which our country will need for the long pull. And it should act upon
such legislation as promptly as circumstances permit.

To take just one example--we need to continue and complete the work of
rounding out our system of social insurance. We still need to improve
our protection against unemployment and old age. We still need to
provide insurance against the loss of earnings through sickness, and
against the high costs of modern medical care.

And above all, we must remember that the fundamentals of our strength
rest upon the freedoms of our people. We must continue our efforts to
achieve the full realization of our democratic ideals. We must uphold
the freedom of speech and the freedom of conscience in our land. We must
assure equal rights and equal opportunities to all our citizens.

As we go forward this year in the defense of freedom, let us keep dearly
before us the nature of our present effort.

We are building up our strength, in concert with other free nations, to
meet the danger of aggression that has been turned loose on the world.
The strength of the free nations is the world's best hope of peace.

I ask the Congress for unity in these crucial days.

Make no mistake about my meaning. I do not ask, or expect, unanimity. I
do not ask for an end to debate. Only by debate can we arrive at
decisions which are wise, and which reflect the desires of the American
people. We do not have a dictatorship in this country, and we never will
have one in this country.

When I request unity, what I am really asking for is a sense of
responsibility on the part of every Member of this Congress. Let us
debate the issues, but let every man among us weigh his words and his
deeds. There is a sharp difference between harmful criticism and
constructive criticism. If we are truly responsible as individuals, I am
sure that we will be unified as a government.

Let us keep our eyes on the issues and work for the things we all
believe in.

Let each of us put our country ahead of our party, and ahead of our own
personal interests.

I had the honor to be a Member of the Senate during World War II, and I
know from experience that unity of purpose and of effort is possible in
the Congress without any lessening of the vitality of our two-party
system.

Let us all stand together as Americans. Let us stand together with all
men everywhere who believe in human liberty.

Peace is precious to us. It is the way of life we strive for with all
the strength and wisdom we possess. But more precious than peace are
freedom and justice. We will fight, if fight we must, to keep our
freedom and to prevent justice from being destroyed.

These are the things that give meaning to our lives, and which we
acknowledge to be greater than ourselves.

This is our cause--peace, freedom, justice. We will pursue this cause
with determination and humility, asking divine guidance that in all we
do we may follow the will of God.

***

State of the Union Address
Harry S. Truman
January 9, 1952

Mr. President, Mr. Speaker, Members of the Congress:

I have the honor to report to the Congress on the state of the Union.

At the outset, I should like to speak of the necessity for putting first
things first as we work together this year for the good of our country.

The United States and the whole free world are passing through a period
of grave danger. Every action you take here in Congress, and every
action that I take as President, must be measured against the test of
whether it helps to meet that danger.

This will be a presidential election year-the year in which politics
plays a large part in our lives--a larger part than usual. That is
perfectly proper. But we have a greater responsibility to conduct our
political fights in a manner that does not harm the national interest.

We can find plenty of things to differ about without destroying our free
institutions and without abandoning our bipartisan foreign policy for
peace.

When everything is said and done, all of us--Republicans and Democrats
alike--all of us are Americans; and we are all going to sink or swim
together.

We are moving through a perilous time. Faced with a terrible threat of
aggression, our Nation has embarked upon a great effort to help
establish the kind of world in which peace shall be secure. Peace is our
goal-not peace at any price, but a peace based on freedom and justice.
We are now in the midst of our effort to reach that goal. On the whole,
we have been doing very well.

Last year, 1951, was a year in which we threw back aggression, added
greatly to our military strength, and improved the chances for peace and
freedom in many parts of the world.

This year, 1952, is a critical year in the defense effort of the whole
free world. If we falter we can lose all the gains we have made. If we
drive ahead, with courage and vigor and determination, we can by the end
of 1952 be in a position of much greater security. The way will be
dangerous for the years ahead, but if we put forth our best efforts this
year--and next year--we can be "over the hump" in our effort to build
strong defenses.

When we look at the record of the past year, 1951, we find important
things on both the credit and the debit side of the ledger. We have made
great advances. At the same time we have run into new problems which
must be overcome.

Now let us look at the credit side first.

Peace depends upon the free nations sticking together, and making a
combined effort to check aggression and prevent war. In this respect,
1951 was a year of great achievement.

In Korea the forces of the United Nations turned hack the Chinese
Communist invasion-and did it without widening the area of conflict. The
action of the United Nations in Korea has been a powerful deterrent to a
third world war. However, the situation in Korea remains very hazardous.
The outcome of the armistice negotiation still remains uncertain.

In Indochina and Malaya, our aid has helped our allies to hold back the
Communist advance, although there are signs of further trouble in that
area.

In 1951 we strengthened the chances of peace in the Pacific region by
the treaties with Japan and the defense arrangements with Australia, New
Zealand, and the Philippines.

In Europe combined defense has become a reality. The free nations have
created a real fighting force. This force is not yet as strong as it
needs to be; but it is already a real obstacle to any attempt by hostile
forces to sweep across Europe to the Atlantic.

In 1951 we also moved to strengthen the security of Europe by the
agreement to bring Greece and Turkey into the North Atlantic Treaty.

The United Nations, the world's greatest hope for peace, has come
through a year of trial stronger and more useful than ever. The free
nations have stood together in blocking Communist attempts to tear up
the charter.

At the present session of the United Nations in Paris, we, together with
the British and the French, offered a plan to reduce and control all
armaments under a foolproof inspection system. This is a concrete,
practical proposal for disarmament.

But what happened? Vishinsky laughed at it. Listen to what he said: "I
could hardly sleep at all last night .... I could not sleep because I
kept laughing." The world will be a long time forgetting the spectacle
of that fellow laughing at disarmament.

Disarmament is not a joke. Vishinsky's laughter met with shock and anger
from the people all over the world. And, as a result, Mr. Stalin's
representative received orders to stop laughing and start talking.

If the Soviet leaders were to accept this proposal, it would lighten the
burden of armaments, and permit the resources of the earth to be devoted
to the good of mankind. But until the Soviet Union accepts a sound
disarmament proposal, and joins in peaceful settlements, we have no
choice except to build up our defenses.

During this past year we added more than a million men and women to our
Armed Forces. The total is now nearly 3 1/2 million. We have made rapid
progress in the field of atomic weapons. We have turned out billion
worth of military supplies and equipment, three times as much as the
year before.

Economic conditions in the country are good. There are 61 million people
on the job; wages, farm incomes, and business profits are at high
levels. Total production of goods and services in our country has
increased 8 percent over last year--about twice the normal rate of
growth.

Perhaps the most amazing thing about our economic progress is the way we
are increasing our basic capacity to produce. For example, we are now in
the second year of a 3-year program which will double our output of
aluminum, increase our electric power supply by 40 percent, and increase
our steelmaking capacity by 15 percent. We can then produce 120 million
tons of steel a year, as much as all the rest of the world put together.

This expansion will mean more jobs and higher standards of living for
all of us in the years ahead. At the present time it means greater
strength for us and for the rest of the free world in the fight for
peace.

Now, I must turn to the debit side of the ledger for the past year.

The outstanding fact to note on the debit side of the ledger is that the
Soviet Union, in 1951, continued to expand its military production and
increase its already excessive military power.

It is true that the Soviets have run into increasing difficulties. Their
hostile policies have awakened stern resistance among free men
throughout the world. And behind the Iron Curtain the Soviet rule of
force has created growing political and economic stresses in the
satellite nations.

Nevertheless, the grim fact remains that the Soviet Union is increasing
its armed might. It is still producing more war planes than the free
nations. It has set off two more atomic explosions. The world still
walks in the shadow of another world war.

And here at home, our defense preparations are far from complete.

During 1951 we did not make adequate progress in building up civil
defense against atomic attack. This is a major weakness in our plans for
peace, since inadequate civilian defense is an open invitation to a
surprise attack. Failure to provide adequate civilian defense has the
same effect as adding to the enemy's supply of atomic bombs.

In the field of defense production we have run into difficulties and
delays in designing and producing the latest types of airplanes and
tanks. Some machine tools and metals are still in extremely short
supply.

In other free countries the defense buildup has created severe economic
problems. It has increased inflation in Europe and has endangered the
continued recovery of our allies.

In the Middle East political tensions and the oil controversy in Iran
are keeping the region in a turmoil. In the Far East the dark threat of
Communist imperialism still hangs over many nations.

This, very briefly, is the good side and the bad side of the picture.

Taking the good and bad together, we have made real progress this last
year along the road to peace. We have increased the power and unity of
the free world. And while we were doing this, we have avoided world war
on the one hand, and appeasement on the other. This is a hard road to
follow, but the events of the last year show that it is the right road
to peace.

We cannot expect to complete the job overnight. The free nations may
have to maintain for years the larger military forces needed to deter
aggression. We must build steadily, over a period of years, toward
political solidarity and economic progress among the free nations in all
parts of the world.

Our task will not be easy; but if we go at it with a will, we can look
forward to steady progress. On our side are all the great resources of
freedom--the ideals of religion and democracy, the aspiration of people
for a better life, and the industrial and technical power of a free
civilization.

These advantages outweigh anything the slave world can produce. The only
thing that can defeat us is our own state of mind. We can lose if we
falter.

The middle period of a great national effort like this is a very
difficult time. The way seems long and hard. The goal seems far distant.
Some people get discouraged. That is only natural.

But if there are any among us who think we ought to ease up in the fight
for peace, I want to remind them of three things--just three things.

First: The threat of world war is still very real. We had one Pearl
Harbor--let's not get caught off guard again. If you don't think the
threat of Communist armies is real, talk to some of our men back from
Korea.

Second: If the United States had to try to stand alone against a
Soviet-dominated world, it would destroy the life we know and the ideals
we hold dear. Our allies are essential to us, just as we are essential
to them. The more shoulders there are to bear the burden the lighter
that burden will be.

Third: The things we believe in most deeply are under relentless attack.
We have the great responsibility of saving the basic moral and spiritual
values of our civilization. We have started out well--with a program for
peace that is unparalleled in history. If we believe in ourselves and
the faith we profess, we will stick to that job until it is victoriously
finished.

This is a time for courage, not for grumbling and mumbling.

Now, let us take a look at the things we have to do.

The thing that is uppermost in the minds of all of us is the situation
in Korea. We must, and we will, keep up the fight there until we get the
kind of armistice that will put an end to the aggression and protect the
safety of our forces and the security of the Republic of Korea. Beyond
that we shall continue to work for a settlement in Korea that upholds
the principles of the United Nations.

We went into Korea because we knew that Communist aggression had to be
met firmly if freedom was to be preserved in the world. We went into the
fight to save the Republic of Korea, a free country, established under
the United Nations. These are our aims. We will not give up until we
attain them.

Meanwhile, we must continue to strengthen the forces of freedom
throughout the world.

I hope the Senate will take early and favorable action on the Japanese
peace treaty, on our security pacts with the Pacific countries, and on
the agreement to bring Greece and Turkey into the North Atlantic Treaty.

We are also negotiating an agreement with the German Federal Republic
under which it can play an honorable and equal part among nations and
take its place in the defense of Western Europe.

But treaties and plans are only the skeleton of our defense structure.
The sinew and muscle of defense are the forces and equipment which must
be provided.

In Europe we must go on helping our friends and allies to build up their
military forces. This means we must send weapons in large volume to our
European allies. I have directed that weapons for Europe be given a very
high priority. Economic aid is necessary, too, to supply the margin of
difference between success and failure in making Europe a strong partner
in our joint defense.

In the long run we want to see Europe freed from any dependence on our
aid. Our European allies want that just as bad as we do. The steps that
are now being taken to build European unity should help bring that
about. Six European countries are pooling their coal and steel
production under the Schuman plan. Work is going forward on the merger
of European national forces on the Continent into a single army. These
great projects should become realities in 1952.

We should do all we can to help and encourage the move toward a strong
and united Europe.

In Asia the new Communist empire is a daily threat to millions of
people. The peoples of Asia want to be free to follow their own way of
life. They want to preserve their culture and their traditions against
communism, just as much as we want to preserve ours. They are laboring
under terrific handicaps--poverty, ill health, feudal systems of land
ownership, and the threat of internal subversion or external attack. We
can and we must increase our help to them.

This means military aid, especially to those places like Indochina which
might be hardest hit by some new Communist attack.

It also means economic aid, both technical know-how and capital
investment.

This last year we made available millions of bushels of wheat to relieve
famine in India. But far more important, in the long run, is the work
Americans are doing in India to help the Indian farmers themselves raise
more grain. With the help of our technicians, Indian farmers, using
simple, inexpensive means, have been able since 1948 to double the crops
in one area in India. One farmer there raised 63 bushels of wheat to the
acre, where 13 bushels had been the average before.

This is point 4--our point 4 program at work. It is working--not only in
India but in Iran, Paraguay, Liberia--in 33 countries around the globe.
Our technical missionaries are out there. We need more of them. We need
more funds to speed their efforts, because there is nothing of greater
importance in all our foreign policy. There is nothing that shows more
clearly what we stand for, and what we want to achieve.

My friends of the Congress, less than one-third of the expenditure for
the cost of World War II would have created the developments necessary
to feed the whole world so we wouldn't have to stomach communism. That
is what we have got to fight, and unless we fight that battle and win
it, we can't win the cold war or a hot one either.

We have recently lost a great public servant who was leading this effort
to bring opportunity and hope to the people of half the world. Dr. Henry
Bennett and his associates died in line of duty on a point 4 mission. It
is up to us to carry on the great work for which they gave their lives.

During the coming year we must not forget the suffering of the people
who live behind the Iron Curtain. In those areas minorities are being
oppressed, human rights violated, religions persecuted. We should
continue to expose those wrongs. We should continue and expand the
activities of the Voice of America, which brings our message of hope and
truth to those peoples and other peoples throughout the world.

I have just had an opportunity to discuss many of these world problems
with Prime Minister Churchill. We have had a most satisfactory series of
meetings. We thoroughly reviewed the situation in Europe, the Middle
East, and the Far East. We both look forward to steady progress toward
peace through the cooperative action and teamwork of the free nations.

Turning from our foreign policies, let us consider the jobs we have here
at home as a part of our program for peace.

The first of these jobs is to move ahead full steam on the defense
program.

Our objective is to have a well-equipped active defense force large
enough--in concert with the forces of our allies--to deter aggression
and to inflict punishing losses on the enemy immediately if we should be
attacked. This active force must be backed by adequate reserves, and by
the plants and tools to turn out the tremendous quantities of new
weapons that would be needed if war came. We are not building an active
force adequate to carry on full scale war, but we are putting ourselves
in a position to mobilize very rapidly if we have to.

This year I shall recommend some increases in the size of the active
force we are building, with particular emphasis on air power. This means
we shall have to continue large-scale production of planes and other
equipment for a longer period of time than we had originally planned.

Planes and tanks and other weapons-what the military call "hard
goods"--are now beginning to come off the production lines in volume.
Deliveries of hard goods now amount to about a billion and a half
dollars worth a month. A year from now, we expect that rate to be
doubled.

We shall have to hold to a high rate of military output for about a year
after that. In 1954 we hope to have enough equipment so that we can
reduce the production of most military items substantially. The next 2
years should therefore be the peak period of defense production.

Defense needs will take a lot of steel, aluminum, copper, nickel, and
other scarce materials. This means smaller production of some civilian
goods. The cutbacks will be nothing like those during World War II, when
most civilian production was completely stopped. But there will be
considerably less of some goods than we have been used to these past 2
or 3 years.

The very critical part of our defense job this year is to keep down
inflation.

We can control inflation if we make up our minds to do it.

On the executive side of the Government, we intend to hold the line on
prices just as tightly as the law allows. We will permit only those wage
increases which are clearly justified under sound stabilization
policies; and we will see to it that industries absorb cost increases
out of earnings wherever feasible, before they are authorized to raise
prices. We will do that, at any rate, except where the recent amendments
to the law specifically require us to give further price increases.

Congress has a tremendous responsibility in this matter. Our
stabilization law was shot full of holes at the last session. This year,
it will be one of the main tasks before the Congress to repair the
damage and enact a strong anti-inflation law.

As a part of our program to keep our country strong, we are determined
to preserve the financial strength of the Government. This means high
taxes over the next few years. We must see to it that these taxes are
shared among the people as fairly as possible. I expect to discuss these
matters in the Economic Report and the Budget Message which will soon be
presented to the Congress.

Our tax laws must be fair. And we must make absolutely certain they are
administered fairly, without fear or favor of any kind for anybody. To
this end, steps have already been taken to remedy weaknesses which have
been disclosed in the administration of the tax laws. In addition, I
hope the Congress will approve my reorganization plan for the Bureau of
Internal Revenue. We must do everything necessary in order to make just
as certain as is humanly possible that every taxpayer receives equal
treatment under the law.

To carry the burden of defense we must have a strong, productive, and
expanding economy here at home. We cannot neglect those things that have
made us the great and powerful nation we are today.

Our strength depends upon the health, the morale, the freedom of our
people. We can take on the burden of leadership in the fight for world
peace because, for nearly 20 years, the Government and the people have
been working together for the general welfare. We have given more and
more of out citizens a fair chance at decent, useful, productive lives.
That is the reason we are as strong as we are today.

This Government of ours--the Congress and the executive both--must keep
on working to bring about a fair deal for all the American people. Some
people will say that we haven't the time or the money this year for
measures for the welfare of the people. But if we want to win the fight
for peace, this is a part of the job we cannot ignore.

We will have to give up some things, we will have to go forward on
others at a slower pace. But, so far as I am concerned, I do not think
we can give up the things that are vital to our national strength.

I believe most people in this country will agree with me on that.

I think most farmers understand that soil conservation and rural
electrification and agricultural research are not frills or luxuries,
but real necessities in order to boost our farm production.

I think most workers understand that decent housing and good working
conditions are not luxuries, but necessities if the working men and
women of this country are to continue to out-produce the rest of the
world.

I think our businessmen know that scientific research and transportation
services and more steel mills and power projects are not luxuries, but
necessities to keep our business and our industry in the forefront of
industrial progress.

I think everybody knows that social insurance and better schools and
health services are not frills, but necessities in helping all Americans
to be useful and productive citizens, who can contribute their full
share in the national effort to protect and advance our way of life.

We cannot do all we want to in times like these--we have to choose the
things that will contribute most to defense--but we must continue to
make progress if we are to be a strong nation in the years ahead.

Let me give you some examples.

We are going right ahead with the urgently needed work to develop our
natural resources, to conserve our soil, and to prevent floods. We are
going to produce essential power and build the lines that are necessary
and that we have to have to transmit it to our farms and factories. We
are going to encourage exploration for new mineral deposits.

We are going to keep on building essential highways and taking any other
steps that will assure the Nation an adequate transportation system--on
land, on the sea, and in the air.

We must move right ahead this year to see that defense workers and
soldiers' families get decent housing at rents they can afford to pay.

We must begin our long deferred program of Federal aid to education--to
help the States meet the present crisis in the operation of our schools.
And we must help with the construction of schools in areas where they
are critically needed because of the defense effort.

We urgently need to train more doctors and other health personnel,
through aid to medical education. We also urgently need to expand the
basic public health services in our home communities--especially in
defense areas. The Congress should go ahead with these two measures
immediately.

I have set up an impartial commission to make a thorough study of the
Nation's health needs. One of the things this commission is looking into
is how to bring the cost of modern medical care within the reach of all
the people. I have repeatedly recommended national health insurance as
the best way to do this. So far as I know, it is still the best way. If
there are any better answers, I hope this commission will find them. But
of one thing I am sure: something must be done, and done soon.

This year we ought to make a number of urgently needed improvements in
our social security law. For one thing, benefits under old-age and
survivors insurance should be raised $5 a month above the present
average of $42. For another thing, the States should be given special
aid to help them increase public assistance payments. By doing these
things now, we can ease the pressure of living costs for people who
depend on those fixed payments.

We should also make some cost-of-living adjustments for those receiving
veterans' compensation for death or disability incurred in the service
of our country. In addition, now is the time to start a sensible program
of readjustment benefits for our veterans who have seen service since
the fighting broke out in Korea.

Another thing the Congress should do at this session is to strengthen
our system of farm price supports to meet the defense emergency. The
"sliding scale" in the price support law should not be allowed to
penalize farmers for increasing production to meet defense needs. We
should also find a new and less costly method for supporting perishable
commodities than the law now provides.

We need to act promptly to improve our labor law. The Taft-Hartley Act
has many serious and far-reaching defects. Experience has demonstrated
this so clearly that even the sponsors of the act now admit that it
needs to be changed. A fair law, fair to both management and labor, is
indispensable to sound labor relations and to full, uninterrupted
production. I intend to keep on working for a fair law until we get one.

As we build our strength to defend the freedom in the world, we
ourselves must extend the benefits of freedom more widely among all our
own people. We need to take action toward the wider enjoyment of civil
rights. Freedom is the birthright of every American.

The executive branch has been making real progress toward full equality
of treatment and opportunity--in the Armed Forces, in the civil service,
and in private firms working for the Government. Further advances
require action by Congress, and I hope that means will be provided to
give the Members of the Senate and the House a chance to vote on them.

I am glad to hear that home rule for the District of Columbia will be
the first item of business before the Senate. I hope that it, as well as
statehood for Hawaii and Alaska, will be adopted promptly.

All these measures I have been talking about--measures to advance the
well-being of our people--demonstrate to the world the forward movement
of our free society.

This demonstration of the way free men govern themselves has a more
powerful influence on the people of the world--on both sides of the Iron
Curtain--than all the trick slogans and pie-in-the-sky promises of the
Communists.

But our shortcomings, as well as our progress, are watched from abroad.
And there is one shortcoming I want to speak about plainly.

Our kind of government above all others cannot tolerate dishonesty among
public servants.

Some dishonest people worm themselves into almost every human
organization. It is all the more shocking, however, when they make their
way into a Government such as ours, which is based on the principle of
justice for all. Such unworthy public servants must be weeded out. I
intend to see to it that Federal employees who have been guilty of
misconduct are punished for it. I also intend to see to it that the
honest and hard-working great majority of our Federal employees are
protected against partisan slander and malicious attack.

I have already made some recommendations to the Congress to help
accomplish these purposes. I intend to submit further recommendations to
this end. I will welcome the wholehearted cooperation of the Congress in
this effort.

I also think that the Congress can do a great deal to strengthen
confidence in our institutions by applying rigorous standards of moral
integrity to its own operations, and by finding an effective way to
control campaign expenditures, and by protecting the rights of
individuals in congressional investigations.

To meet the crisis which now hangs over the world, we need many
different kinds of strength--military, economic, political, and moral.
And of all these, I am convinced that moral strength is the most vital.

When you come right down to it, it is the courage and the character of
our Nation--and of each one of us as individuals-that will really decide
how well we meet this challenge.

We are engaged in a great undertaking at home and abroad--the greatest,
in fact, that any nation has ever been privileged to embark upon. We are
working night and day to bring peace to the world and to spread the
democratic ideals of justice and self-government to all people. Our
accomplishments are already remarkable. We ought to be full of pride in
what we are doing, and full of confidence and hope in the outcome. No
nation ever had greater resources, or greater energy, or nobler
traditions to inspire it.

And yet, day in and day out, we see a long procession of timid and
fearful men who wring their hands and cry out that we have lost the way,
that we don't know what we are doing, that we are bound to fail. Some
say we should give up the struggle for peace, and others say we should
have a war and get it over with. That's a terrible statement. I had
heard it made, but they want us to forget the great objective of
preventing another world war--the objective for which our soldiers have
been fighting in the hills of Korea.

If we are to be worthy of all that has been done for us by our soldiers
in the field, we must be true to the ideals for which they are fighting.
We must reject the counsels of defeat and despair. We must have the
determination to complete the great work for which our men have laid
down their lives.

In all we do, we should remember who we are and what we stand for. We
are Americans. Our forefathers had far greater obstacles than we have,
and much poorer chances of success. They did not lose heart, or turn
aside from their goals. In the darkest of all winters in American
history, at Valley Forge, George Washington said: "We must not, in so
great a contest, expect to meet with nothing but sunshine." With that
spirit they won their fight for freedom.

We must have that same faith and vision. In the great contest in which
we are engaged today, we cannot expect to have fair weather all the way.
But it is a contest just as important for this country and for all men,
as the desperate struggle that George Washington fought through to
victory.

Let us prove, again, that we are not merely sunshine patriots and summer
soldiers. Let us go forward, trusting in the God of Peace, to win the
goals we seek.

***

State of the Union Address
Harry S. Truman
January 7, 1953

To the Congress of the United States:

I have the honor to report to the Congress on the state of the Union.

This is the eighth such report that, as President, I have been
privileged to present to you and to the country. On previous occasions,
it has been my custom to set forth proposals for legislative action in
the coming year. But that is not my purpose today. The presentation of a
legislative program falls properly to my successor, not to me, and I
would not infringe upon his responsibility to chart the forward course.
Instead, I wish to speak of the course we have been following the past
eight years and the position at which we have arrived.

In just two weeks, General Eisenhower will be inaugurated as President
of the United States and I will resume--most gladly--my place as a
private citizen of this Republic. The Presidency last changed hands
eight years ago this coming April. That was a tragic time: a time of
grieving for President Roosevelt--the great and gallant human being who
had been taken from us; a time of unrelieved anxiety to his successor,
thrust so suddenly into the complexities and burdens of the Presidential
office.

Not so this time. This time we see the normal transition under our
democratic system. One President, at the conclusion of his term, steps
back to private life; his successor, chosen by the people, begins his
tenure of the office. And the Presidency of the United States continues
to function without a moment's break.

Since the election, I have done my best to assure that the transfer from
one Administration to another shall be smooth and orderly. From General
Eisenhower and his associates, I have had friendly and understanding
collaboration in this endeavor. I have not sought to thrust upon
him--nor has he sought to take--the responsibility which must be mine
until twelve o'clock noon on January twentieth. But together, I hope and
believe we have found means whereby the incoming President can obtain
the full and detailed information he will need to assume the
responsibility the moment he takes the oath of office.

The President-elect is about to take up the greatest burdens, the most
compelling responsibilities, given to any man. And I, with you and all
Americans, wish for him all possible success in undertaking the tasks
that will so soon be his.

What are these tasks? The President is Chief of State, elected
representative of all the people, national spokesman for them and to
them. He is Commander-in-Chief of our armed forces. He is charged with
the conduct of our foreign relations. He is Chief Executive of the
Nation's largest civilian organization. He must select and nominate all
top officials of the Executive Branch and all Federal judges. And on the
legislative side, he has the obligation and the opportunity to
recommend, and to approve or veto legislation. Besides all this, it is
to him that a great political party turns naturally for leadership, and
that, too, he must provide as President.

This bundle of burdens is unique; there is nothing else like it on the
face of the earth. Each task could be a full-time job. Together, they
would be a tremendous undertaking in the easiest of times.

But our times are not easy; they are hard-as hard and complex, perhaps
as any in our history. Now, the President not only has to carry on these
tasks in such a way that our democracy may grow and flourish and our
people prosper, but he also has to lead the whole free world in
overcoming the communist menace--and all this under the shadow of the
atomic bomb.

This is a huge challenge to the human being who occupies the
Presidential office. But it is not a challenge to him alone, for in
reality he cannot meet it alone. The challenge runs not just to him but
to his whole Administration, to the Congress, to the country.

Ultimately, no President can master his responsibilities, save as his
fellow citizens-indeed, the whole people--comprehend the challenge of
our times and move, with him, to meet it.

It has been my privilege to hold the Presidential office for nearly
eight years now, and much has been done in which I take great pride. But
this is not personal pride. It is pride in the people, in the Nation. It
is pride in our political system and our form of government--balky
sometimes, mechanically deficient perhaps, in many ways--but enormously
alive and vigorous; able through these years to keep the Republic on the
right course, rising to the great occasions, accomplishing the
essentials, meeting the basic challenge of our times.

There have been misunderstandings and controversies these past eight
years, but through it all the President of the United States has had
that measure of support and understanding without which no man could
sustain the burdens of the Presidential office, or hope to discharge its
responsibilities.

For this I am profoundly grateful--grateful to my associates in the
Executive Branch--most of them non-partisan civil servants;
grateful--despite our disagreements-to the Members of the Congress on
both sides of the aisle; grateful especially to the American people, the
citizens of this Republic, governors of us all.

We are still so close to recent controversies that some of us may find
it hard to understand the accomplishments of these past eight years. But
the accomplishments are real and very great, not as the President's, not
as the Congress', but as the achievements of our country and all the
people in it.

Let me remind you of some of the things we have done since I first
assumed my duties as President of the United States.

I took the oath of office on April 12, 1945. In May of that same year,
the Nazis surrendered. Then, in July, that great white flash of light,
man-made at Alamogordo, heralded swift and final victory in World War
II--and opened the doorway to the atomic age.

Consider some of the great questions that were posed for us by sudden,
total victory in World War II. Consider also, how well we as a Nation
have responded.

Would the American economy collapse, after the war? That was one
question. Would there be another depression here--a repetition of 1921
or 1929? The free world feared and dreaded it. The communists hoped for
it and built their policies upon that hope.

We answered that question--answered it with a resounding "no."

Our economy has grown tremendously. Free enterprise has flourished as
never fore. Sixty-two million people are now gainfully employed,
compared with 51 million seven years ago. Private businessmen and
farmers have invested more than 200 billion dollars in new plant and
equipment since the end of World War II. Prices have risen further than
they should have done--but incomes, by and large, have risen even more,
so that real living standards are now considerably higher than seven
years ago. Aided by sound government policies, our expanding economy has
shown the strength and flexibility for swift and almost painless
reconversion from war to peace, in 1945 and 1946; for quick reaction and
recovery--well before Korea--from the beginnings of recession in 1949.
Above all, this live and vital economy of ours has now shown the
remarkable capacity to sustain a great mobilization program for defense,
a vast outpouring of aid to friends and allies all around the world--and
still to produce more goods and services for peaceful use at home than
we have ever known before.

This has been our answer, up to now, to those who feared or hoped for a
depression in this country.

How have we handled our national finances? That was another question
arising at war's end. In the administration of the Government, no
problem takes more of the President's time, year in and year out, than
fashioning the Budget, and the related problem of managing the public
debt.

Financing World War II left us with a tremendous public debt, which
reached 279 billion dollars at its peak in February, 1946.

Beginning in July, 1946, when war and reconversion financing had ended,
we have held quite closely to the sound standard that in times of high
employment and high national income, the Federal Budget should be
balanced and the debt reduced.

For the four fiscal years from July 1, 1946, to June 30, 1950, we had a
net surplus of 4.3 billion dollars. Using this surplus, and the
Treasury's excess cash reserves, the debt was reduced substantially,
reaching a low point of 251 billion dollars in June, 1949, and ending up
at 257 billion dollars on June 30, 1950.

In July of 1950, we began our rapid rearmament, and for two years held
very close to a pay-as-we-go policy. But in the current fiscal year and
the next, rising expenditures for defense will substantially outrun
receipts. This will pose an immediate and serious problem for the new
Congress.

Now let me turn to another question we faced at the war's end. Would we
take up again, and carry forward, the great projects of social
welfare--so badly needed, so long overdue--that the New Deal had
introduced into our national life? Would our Government continue to have
a heart for the people, or was the progress of the New Deal to be halted
in the aftermath of war as decisively as the progress of Woodrow
Wilson's New Freedom had been halted after the first world war?

This question, too, we have answered. We have answered it by doubling
old age insurance benefits and extending coverage to ten million more
people. We have answered it by increasing our minimum wage. We have
answered by the three million privately constructed homes that the
Federal Government has helped finance since the war--and the 155
thousand units of low rent public housing placed under construction
since 1949.

We have answered with the 42 thousand new hospital beds provided since
1946 through the joint efforts of the Federal Government and local
communities.

We have answered by helping eight million veterans of World War II to
obtain advanced education, 196 thousand to start in business, and 64
thousand to buy farms.

We have answered by continuing to help farmers obtain electric power,
until today nearly 90 per cent of our farms have power line electric
service.

In these and other ways, we have demonstrated, up to now, that our
democracy has not forgotten how to use the powers of the Government to
promote the people's welfare and security.

Another of the big post-war questions was this: What we would do with
the Nation's natural resources--its soils and water, forests and
grasslands. Would we continue the strong conservation movement of the
1930's, or would we, as we did after the First World War, slip back into
the practices of monopoly, exploitation, and waste?

The answer is plain. All across our country, the soil conservation
movement has spread, aided by Government programs, enriching private and
public lands, preserving them from destruction, improving them for
future use. In our river basins, we have invested nearly 5 billion
dollars of public funds in the last eight years--invested them in
projects to control floods, irrigate farmlands, produce low-cost power
and get it to the housewives and farmers and businessmen who need it. We
have been vigilant in protecting the people's property--lands and
forests and oil and minerals.

We have had to fight hard against those who would use our resources for
private greed; we have met setbacks; we have had to delay work because
of defense priorities, but on the whole we can be proud of our record in
protecting our natural heritage, and in using our resources for the
public good.

Here is another question we had to face at the war's close: Would we
continue, in peace as well as war, to promote equality of opportunity
for all our citizens, seeking ways and means to guarantee for all of
them the full enjoyment of their civil rights?

During the war we achieved great economic and social gains for millions
of our fellow citizens who had been held back by prejudice. Were we
prepared, in peacetime, to keep on moving toward full realization of the
democratic promise? Or would we let it be submerged, wiped out, in
post-war riots and reaction, as after World War I?

We answered these questions in a series of forward steps at every level
of government and in many spheres of private life. In our armed forces,
our civil service, our universities, our railway trains, the residential
districts of our cities--in stores and factories all across the
Nation--in the polling booths as well--the barriers are coming down.
This is happening, in part, at the mandate of the courts; in part, at
the insistence of Federal, State and local governments; in part, through
the enlightened action of private groups and persons in every region and
every walk of life.

There has been a great awakening of the American conscience on the
issues of civil rights. And all this progress--still far from complete
but still continuing--has been our answer, up to now, to those who
questioned our intention to live up to the promises of equal freedom for
us all.

There was another question posed for us at the war's end, which equally
concerned the future course of our democracy: Could the machinery of
government and politics in this Republic be changed, improved, adapted
rapidly enough to carry through, responsibly and well, the vast, new
complicated undertakings called for in our time?

We have answered this question, too, answered it by tackling the most
urgent, most specific, problems which the war experience itself had
brought into sharp focus. The reorganization of the Congress in 1946;
the unification of our armed services, beginning in 1947; the closer
integration of foreign and military policy through the National Security
Council created that same year; and the Executive reorganizations,
before and after the Hoover-Acheson Commission Report in 1949--these are
landmarks in our continuing endeavor to make government an effective
instrument of service to the people.

I come now to the most vital question of all, the greatest of our
concerns: Could there be built in the world a durable structure of
security, a lasting peace for all the nations, or would we drift, as
after World War I, toward another terrible disaster--a disaster which
this time might be the holocaust of atomic war?

That is still the overriding question of our time. We cannot know the
answer yet; perhaps we will not know it finally for a long time to come.
But day and night, these past eight years, we have been building for
peace, searching out the way that leads most surely to security and
freedom and justice in the world for us and all mankind.

This, above all else, has been the task of our Republic since the end of
World War II, and our accomplishment so far should give real pride to
all Americans. At the very least, a total war has been averted, each day
up to this hour. And at the most, we may already have succeeded in
establishing conditions which can keep that kind of war from happening,
for as far ahead as man can see.

The Second World War radically changed the power relationships of the
world. Nations once great were left shattered and weak, channels of
communication, routes of trade, political and economic ties of many
kinds were ripped apart.

And in this changed, disrupted, chaotic situation, the United States and
the Soviet Union emerged as the two strongest powers of the world. Each
had tremendous human and natural resources, actual or potential, on a
scale unmatched by any other nation.

Nothing could make plainer why the world is in its present state--and
how that came to pass--than an understanding of the diametrically
opposite principles and policies of these two great powers in a
war-ruined world.

For our part, we in this Republic were-and are--free men, heirs of the
American Revolution, dedicated to the truths of our Declaration of
Independence:

"... That all men are created equal, that they are endowed by their
Creator with certain unalienable rights... That to secure these rights,
governments are instituted among men, deriving their just powers from
the consent of the governed."

Our post-war objective has been in keeping with this great idea. The
United States has sought to use its pre-eminent position of power to
help other nations recover from the damage and dislocation of the war.
We held out a helping hand to enable them to restore their national
lives and to regain their positions as independent, self-supporting
members of the great family of nations. This help was given without any
attempt on our part to dominate or control any nation. We did not want
satellites but partners.

The Soviet Union, however, took exactly the opposite course.

Its rulers saw in the weakened condition of the world not an obligation
to assist in the great work of reconstruction, but an opportunity to
exploit misery and suffering for the extension of their power. Instead
of help, they brought subjugation. They extinguished, blotted out, the
national independence of the countries that the military operations of
World War II had left within their grasp.

The difference stares at us from the map of Europe today. To the west of
the line that tragically divides Europe we see nations continuing to act
and live in the light of their own traditions and principles. On the
other side, we see the dead uniformity of a tyrannical system imposed by
the rulers of the Soviet Union. Nothing could point up more clearly what
the global struggle between the free world and the communists is all
about.

It is a struggle as old as recorded history; it is freedom versus
tyranny.

For the dominant idea of the Soviet regime is the terrible conception
that men do not have rights but live at the mercy of the state.

Inevitably this idea of theirs--and all the consequences flowing from
it--collided with the efforts of free nations to build a just and
peaceful world. The "cold war" between the communists and the free world
is nothing more or less than the Soviet attempt to checkmate and defeat
our peaceful purposes, in furtherance of their own dread objective.

We did not seek this struggle, God forbid. We did our utmost to avoid
it. In World War II, we and the Russians had fought side by side, each
in our turn attacked and forced to combat by the aggressors. After the
war, we hoped that our wartime collaboration could be maintained, that
the frightful experience of Nazi invasion, of devastation in the heart
of Russia, had turned the Soviet rulers away from their old proclaimed
allegiance to world revolution and communist dominion. But instead, they
violated, one by one, the solemn agreements they had made with us in
wartime. They sought to use the rights and privileges they had obtained
in the United Nations, to frustrate its purposes and cut down its powers
as an effective agent of world progress and the keeper of the world's
peace.

Despite this outcome, the efforts we made toward peaceful collaboration
are a source of our present strength. They demonstrated that we believed
what we proclaimed, that we actually sought honest agreements as the way
to peace. Our whole moral position, our leadership in the free world
today, is fortified by that fact.

The world is divided, not through our fault or failure, but by Soviet
design. They, not we, began the cold war. And because the free world saw
this happen because men know we made the effort and the Soviet rulers
spurned it--the free nations have accepted leadership from our Republic,
in meeting and mastering the Soviet offensive.

It seems to me especially important that all of us be clear, in our own
thinking, about the nature of the threat we have faced-and will face for
a long time to come. The measures we have devised to meet it take shape
and pattern only as we understand what we were--and are--up against.

The Soviet Union occupies a territory of 8 million square miles. Beyond
its borders, East and West, are the nearly five million square miles of
the satellite states--virtually incorporated into the Soviet Union--and
of China, now its close partner. This vast land mass contains an
enormous store of natural resources sufficient to support an economic
development comparable to our own.

That is the Stalinist world. It is a world of great natural diversity in
geography and climate, in distribution of resources, in population,
language, and living standards, in economic and cultural development. It
is a world whose people are not all convinced communists by any means.
It is a world where history and national traditions, particularly in its
borderlands, tend more toward separation than unification, and run
counter to the enforced combination that has been made of these areas
today.

But it is also a world of great man-made uniformities, a world that
bleeds its population white to build huge military forces; a world in
which the police are everywhere and their authority unlimited; a world
where terror and slavery are deliberately administered both as
instruments of government and as means of production; a world where all
effective social power is the state's monopoly--yet the state itself is
the creature of the communist tyrants.

The Soviet Union, with its satellites, and China are held in the tight
grip of communist party chieftains. The party dominates all social and
political institutions. The party regulates and centrally directs the
whole economy. In Moscow's sphere, and in Peiping's, all history,
philosophy, morality and law are centrally established by rigid dogmas,
incessantly drummed into the whole population and subject to
interpretation--or to change by none except the party's own inner
circle.

And lest their people learn too much of other ways of life, the
communists have walled off their world, deliberately and uniformly, from
the rest of human society.

That is the communist base of operation in-their cold war. In addition,
they have at their command hundreds and thousands of dedicated foreign
communists, people in nearly every free country who will serve Moscow's
ends. Thus the masters of the Kremlin are provided with deluded
followers all through the free world whom they can manipulate, cynically
and quite ruthlessly, to serve the purposes of the Soviet state.

Given their vast internal base of operations, and their agents in
foreign lands, what are the communist rulers trying to do?

Inside their homeland, the communists are trying to maintain and
modernize huge military forces. And simultaneously, they are endeavoring
to weld their whole vast area and population into a completely
self-contained, advanced industrial society. They aim, some day, to
equal or better the production levels of Western Europe and North
America combined--thus shifting the balance of world economic power, and
war potential, to their side.

They have a long way to go and they know it. But they are prepared to
levy upon living generations any sacrifice that helps strengthen their
armed power, or speed industrial development.

Externally, the communist rulers are trying to expand the boundaries of
their world, whenever and wherever they can. This expansion they have
pursued steadfastly since the close of World War II, using any means
available to them.

Where the Soviet army was present, as in the countries of Eastern
Europe, they have gradually squeezed free institutions to death.

Where post-war chaos existed in industrialized nations, as in Western
Europe, the local Stalinists tried to gain power through political
processes, politically-inspired strikes, and every available means for
subverting free institutions to their evil ends.

Where conditions permitted, the Soviet rulers have stimulated and aided
armed insurrection by communist-led revolutionary forces, as in Greece,
Indo-China, the Philippines, and China, or outright aggression by one of
their satellites, as in Korea.

Where the forces of nationalism, independence, and economic change were
at work throughout the great sweep of Asia and Africa, the communists
tried to identify themselves with the cause of progress, tried to
picture themselves as the friends of freedom and advancement--surely one
of the most cynical efforts of which history offers record.

Thus, everywhere in the free world, the communists seek to fish in
troubled waters, to seize more countries, to enslave more millions of
human souls. They were, and are, ready to ally themselves with any
group, from the extreme left to the extreme right, that offers them an
opportunity to advance their ends.

Geography gives them a central position. They are both a European and an
Asian power, with borders touching many of the most sensitive and vital
areas in the free world around them. So situated, they can use their
armies and their economic power to set up simultaneously a whole series
of threats--or inducements--to such widely dispersed places as Western
Germany, Iran, and Japan. These pressures and attractions can be
sustained at will, or quickly shifted from place to place.

Thus the communist rulers are moving, with implacable will, to create
greater strength in their vast empire, and to create weakness and
division in the free world, preparing for the time their false creed
teaches them must come: the time when the whole world outside their sway
will be so torn by strife and contradictions that it will be ripe for
the communist plucking.

This is the heart of the distorted Marxist interpretation of history.
This is the glass through which Moscow and Peiping look out upon the
world, the glass through which they see the rest of us. They seem really
to believe that history is on their side. And they are trying to boost
"history" along, at every opportunity, in every way they can.

I have set forth here the nature of the communist menace confronting our
Republic and the whole free world. This is the measure of the challenge
we have faced since World War II--a challenge partly military and partly
economic, partly moral and partly intellectual, confronting us at every
level of human endeavor and all around the world.

It has been and must be the free world's purpose not only to organize
defenses against aggression and subversion, not only to build a
structure of resistance and salvation for the community of nations
outside the iron curtain, but in addition to give expression and
opportunity to the forces of growth and progress in the free world, to
so organize and unify the cooperative community of free men that we will
not crumble but grow stronger over the years, and the Soviet empire, not
the free world, will eventually have to change its ways or fall.

Our whole program of action to carry out this purpose has been directed
to meet two requirements.

The first of these had to do with security. Like the pioneers who
settled this great continent of ours, we have had to carry a musket
while we went about our peaceful business. We realized that if we and
our allies did not have military strength to meet the growing Soviet
military threat, we would never have the opportunity to carry forward
our efforts to build a peaceful world of law and order--the only
environment in which our free institutions could survive and flourish.

Did this mean we had to drop everything else and concentrate on armies
and weapons? Of course it did not: side-by-side with this urgent
military requirement, we had to continue to help create conditions of
economic and social progress in the world. This work had to be carried
forward alongside the first, not only in order to meet the non-military
aspects of the communist drive for power, but also because this creative
effort toward human progress is essential to bring about the kind of
world we as free men want to live in.

These two requirements--military security and human progress--are more
closely related in action than we sometimes recognize. Military security
depends upon a strong economic underpinning and a stable and hopeful
political order; conversely, the confidence that makes for economic and
political progress does not thrive in areas that are vulnerable to
military conquest.

These requirements are related in another way. Both of them depend upon
unity of action among the free nations of the world. This, indeed, has
been the foundation of our whole effort, for the drawing together of the
free people of the world has become a condition essential not only to
their progress, but to their survival as free people.

This is the conviction that underlies all the steps we have been taking
to strengthen and unify the free nations during the past seven years.

What have these steps been? First of all, how have we gone about meeting
the requirement of providing for our security against this world-wide
challenge?

Our starting point, as I have said on many occasions, has been and
remains the United Nations.

We were prepared, and so were the other nations of the free world, to
place our reliance on the machinery of the United Nations to safeguard
peace. But before the United Nations could give full expression to the
concept of international security embodied in the Charter, it was
essential that the five permanent members of the Security Council honor
their solemn pledge to cooperate to that end. This the Soviet Union has
not done.

I do not need to outline here the dreary record of Soviet obstruction
and veto and the unceasing efforts of the Soviet representatives to
sabotage the United Nations. It is important, however, to distinguish
clearly between the principle of collective security embodied in the
Charter and the mechanisms of the United Nations to give that principle
effect. We must frankly recognize that the Soviet Union has been able,
in certain instances, to stall the machinery of collective security. Yet
it has not been able to impair the principle of collective security. The
free nations of the world have retained their allegiance to that idea.
They have found the means to act despite the Soviet veto, both through
the United Nations itself and through the application of this principle
in regional and other security arrangements that are fully in harmony
with the Charter and give expression to its purposes.

The free world refused to resign itself to collective suicide merely
because of the technicality of a Soviet veto.

The principle of collective measures to forestall aggression has found
expression in the Treaty of Rio de Janeiro, the North Atlantic Treaty,
now extended to include Greece and Turkey, and the several treaties we
have concluded to reinforce security in the Pacific area.

But the free nations have not this time fallen prey to the dangerous
illusion that treaties alone will stop an aggressor. By a series of
vigorous actions, as varied as the nature of the threat, the free
nations have successfully thwarted aggression or the threat of
aggression in many different parts of the world.

Our country has led or supported these collective measures. The aid we
have given to people determined to act in defense of their freedom has
often spelled the difference between success and failure.

We all know what we have done, and I shall not review in detail the
steps we have taken. Each major step was a milepost in the developing
unity, strength and resolute will of the free nations.

The first was the determined and successful effort made through the
United Nations to safeguard the integrity and independence of Iran in
1945 and 1946.

Next was our aid and support to embattled Greece, which enabled her to
defeat the forces threatening her national independence.

In Turkey, cooperative action resulted in building up a bulwark of
military strength for an area vital to the defenses of the entire free
world.

In 1949, we began furnishing military aid to our partners in the North
Atlantic Community and to a number of other free countries.

The Soviet Union's threats against Germany and Japan, its neighbors to
the West and to the East, have been successfully withstood. Free Germany
is on its way to becoming a member of the peaceful community of nations,
and a partner in the common defense. The Soviet effort to capture Berlin
by blockade was thwarted by the courageous Allied airlift. An
independent and democratic Japan has been brought back into the
community of free nations.

In the Far East, the tactics of communist imperialism have reached
heights of violence unmatched elsewhere--and the problem of concerted
action by the free nations has been at once more acute and more
difficult.

Here, in spite of outside aid and support, the free government of China
succumbed to the communist assault. Our aid has enabled the free Chinese
to rebuild and strengthen their forces on the island of Formosa. In
other areas of the Far East-in Indo-China, Malaya, and the
Philippines--our assistance has helped sustain a staunch resistance
against communist insurrectionary attacks.

The supreme test, up to this point, of the will and determination of the
free nations came in Korea, when communist forces invaded the Republic
of Korea, a state that was in a special sense under the protection of
the United Nations. The response was immediate and resolute. Under our
military leadership, the free nations for the first time took up arms,
collectively, to repel aggression.

Aggression was repelled, driven back, punished. Since that time,
communist strategy has seen fit to prolong the conflict, in spite of
honest efforts by the United Nations to reach an honorable truce. The
months of deadlock have demonstrated that the communists cannot achieve
by persistence, or by diplomatic trickery, what they failed to achieve
by sneak attack. Korea has demonstrated that the free world has the will
and the endurance to match the communist effort to overthrow
international order through local aggression.

It has been a bitter struggle and it has cost us much in brave lives and
human suffering, but it has made it plain that the free nations will
fight side by side, that they will not succumb to aggression or
intimidation, one by one. This, in the final analysis, is the only way
to halt the communist drive to world power.

At the heart of the free world's defense is the military strength of the
United States.

From 1945 to 1949, the United States was sole possessor of the atomic
bomb. That was a great deterrent and protection in itself.

But when the Soviets produced an atomic explosion--as they were bound to
do in time--we had to broaden the whole basis of our strength. We had to
endeavor to keep our lead in atomic weapons. We had to strengthen our
armed forces generally and to enlarge our productive capacity-our
mobilization base. Historically, it was the Soviet atomic explosion in
the fall of 1949, nine months before the aggression in Korea, which
stimulated the planning for our program of defense mobilization.

What we needed was not just a central force that could strike back
against aggression. We also needed strength along the outer edges of the
free world, defenses for our allies as well as for ourselves, strength
to hold the line against attack as well as to retaliate.

We have made great progress on this task of building strong defenses. In
the last two and one half years, we have more than doubled our own
defenses, and we have helped to increase the protection of nearly all
the other free nations.

All the measures of collective security, resistance to aggression, and
the building of defenses, constitute the first requirement for the
survival and progress of the free world. But, as I have pointed out,
they are interwoven with the necessity of taking steps to create and
maintain economic and social progress in the free nations. There can be
no military strength except where there is economic capacity to back it.
There can be no freedom where there is economic chaos or social
collapse. For these reasons, our national policy has included a wide
range of economic measures.

In Europe, the grand design of the Marshall Plan permitted the people of
Britain and France and Italy and a half dozen other countries, with help
from the United States, to lift themselves from stagnation and find
again the path of rising production, rising incomes, rising standards of
living. The situation was changed almost overnight by the Marshall Plan;
the people of Europe have a renewed hope and vitality, and they are able
to carry a share of the military defense of the free world that would
have been impossible a few years ago.

Now the countries of Europe are moving rapidly towards political and
economic unity, changing the map of Europe in more hopeful ways than it
has been changed for 500 years. Customs unions, European economic
institutions like the Schuman Plan, the movement toward European
political integration, the European Defense Community-all are signs of
practical and effective growth toward greater common strength and unity.
The countries of Western Europe, including the free Republic of Germany
are working together, and the whole free world is the gainer.

It sometimes happens, in the course of history, that steps taken to meet
an immediate necessity serve an ultimate purpose greater than may be
apparent at the time. This, I believe, is the meaning of what has been
going on in Europe under the threat of aggression. The free nations
there, with our help, have been drawing together in defense of their
free institutions. In so doing, they have laid the foundations of a
unity that will endure as a major creative force beyond the exigencies
of this period of history. We may, at this close range, be but dimly
aware of the creative surge this movement represents, but I believe it
to be of historic importance. I believe its benefits will survive long
after communist tyranny is nothing but an unhappy memory.

In Asia and Africa, the economic and social problems are different but
no less urgent. There hundreds of millions of people are in ferment,
exploding into the twentieth century, thrusting toward equality and
independence and improvement in the hard conditions of their lives.

Politically, economically, socially, things cannot and will not stay in
their pre-war mold in Africa and Asia. Change must come--is
coming--fast. Just in the years I have been President, 12 free nations,
with more than 600 million people, have become independent: Burma,
Indonesia, the Philippines, Korea, Israel, Libya, India, Pakistan and
Ceylon, and the three Associated States of Indo-China, now members of
the French Union. These names alone are testimony to the sweep of the
great force which is changing the face of half the world.

Working out new relationships among the peoples of the free world would
not be easy in the best of times. Even if there were no Communist drive
for expansion, there would be hard and complex problems of transition
from old social forms, old political arrangements, old economic
institutions to the new ones our century demands--problems of guiding
change into constructive channels, of helping new nations grow strong
and stable. But now, with the Soviet rulers striving to exploit this
ferment for their own purposes, the task has become harder and more
urgent--terribly urgent.

In this situation, we see the meaning and the importance of the Point IV
program, through which we can share our store of know-how and of capital
to help these people develop their economies and reshape their
societies. As we help Iranians to raise more grain, Indians to reduce
the incidence of malaria, Liberians to educate their children better, we
are at once helping to answer the desires of the people for advancement,
and demonstrating the superiority of freedom over communism. There will
be no quick solution for any of the difficulties of the new nations of
Asia and Africa--but there may be no solution at all if we do not press
forward with full energy to help these countries grow and flourish in
freedom and in cooperation with the rest of the free world.

Our measures of economic policy have already had a tremendous effect on
the course of events. Eight years ago, the Kremlin thought post-war
collapse in Western Europe and Japan--with economic dislocation in
America--might give them the signal to advance. We demonstrated they
were wrong. Now they wait with hope that the economic recovery of the
free world has set the stage for violent and disastrous rivalry among
the economically developed nations, struggling for each other's markets
and a greater share of trade. Here is another test that we shall have to
meet and master in the years immediately ahead. And it will take great
ingenuity and effort--and much time--before we prove the Kremlin wrong
again. But we can do it. It is true that economic recovery presents its
problems, as does economic decline, but they are problems of another
order. They are the problems of distributing abundance fairly, and they
can be solved by the process of international cooperation that has
already brought us so far.

These are the measures we must continue. This is the path we must
follow. We must go on, working with our free associates, building an
international structure for military defense, and for economic, social,
and political progress. We must be prepared for war, because war may be
thrust upon us. But the stakes in our search for peace are immensely
higher than they have ever been before.

For now we have entered the atomic age, and war has undergone a
technological change which makes it a very different thing from what it
used to be. War today between the Soviet empire and the free nations
might dig the grave not only of our Stalinist opponents, but of our own
society, our world as well as theirs.

This transformation has been brought to pass in the seven years from
Alamogordo to Eniwetok. It is only seven years, but the new force of
atomic energy has turned the world into a very different kind of place.

Science and technology have worked so fast that war's new meaning may
not yet be grasped by all the .peoples who would be its victims; nor,
perhaps, by the rulers in the Kremlin. But I have been President of the
United States, these seven years, responsible for the decisions which
have brought our science and our engineering to their present place. I
know what this development means now. I know something of what it will
come to mean in the future.

We in this Government realized, even before the first successful atomic
explosion, that this new force spelled terrible danger for all mankind
unless it were brought under international control. We promptly advanced
proposals in the United Nations to take this new source of energy out of
the arena of national rivalries, to make it impossible to use it as a
weapon of war. These proposals, so pregnant with benefit for all
humanity, were rebuffed by the rulers of the Soviet Union.

The language of science is universal, the movement of science is always
forward into the unknown. We could not assume that the Soviet Union
would not develop the same weapon, regardless of all our precautions,
nor that there were not other and even more terrible means of
destruction lying in the unexplored field of atomic energy.

We had no alternative, then, but to press on, to probe the secrets of
atomic power to the uttermost of our capacity, to maintain, if we could,
our initial superiority in the atomic field. At the same time, we sought
persistently for some avenue, some formula, for reaching an agreement
with the Soviet rulers that would place this new form of power under
effective restraints--that would guarantee no nation would use it in
war. I do not have to recount here the proposals we made, the steps
taken in the United Nations, striving at least to open a way to ultimate
agreement. I hope and believe that we will continue to make these
efforts so long as there is the slightest possibility of progress. All
civilized nations are agreed on the urgency of the problem, and have
shown their willingness to agree on effective measures of control--all
save the Soviet Union and its satellites. But they have rejected every
reasonable proposal.

Meanwhile, the progress of scientific experiment has outrun our
expectations. Atomic science is in the full tide of development; the
unfolding of the innermost secrets of matter is uninterrupted and
irresistible. Since Alamogordo we have developed atomic weapons with
many times the explosive force of the early models, and we have produced
them in substantial quantities. And recently, in the thermonuclear tests
at Eniwetok, we have entered another stage in the world-shaking
development of atomic energy. From now on, man moves into a new era of
destructive power, capable of creating explosions of a new order of
magnitude, dwarfing the mushroom clouds of Hiroshima and Nagasaki.

We have no reason to think that the stage we have now reached in the
release of atomic energy will be the last. Indeed, the speed of our
scientific and technical progress over the last seven years shows no
signs of abating. We are being hurried forward, in our mastery of the
atom, from one discovery to another, toward yet unforeseeable peaks of
destructive power.

Inevitably, until we can reach international agreement, this is the path
we must follow. And we must realize that no advance we make is
unattainable by others, that no advantage in this race can be more than
temporary.

The war of the future would be one in which man could extinguish
millions of lives at one blow, demolish the great cities of the world,
wipe out the cultural achievements of the past--and destroy the very
structure of a civilization that has been slowly and painfully built up
through hundreds of generations.

Such a war is not a possible policy for rational men. We know this, but
we dare not assume that others would not yield to the temptation science
is now placing in their hands.

With that in mind, there is something I would say, to Stalin: You claim
belief in Lenin's prophecy that one stage in the development of
communist society would be war between your world and ours. But Lenin
was a pre-atomic man, who viewed society and history with pre-atomic
eyes. Something profound has happened since he wrote. War has changed
its shape and its dimension. It cannot now be a "stage" in the
development of anything save ruin for your regime and your homeland.

I do not know how much time may elapse before the communist rulers bring
themselves to recognize this truth. But when they do, they will find us
eager to reach understandings that will protect the world from the
danger it faces today.

It is no wonder that some people wish that we had never succeeded in
splitting the atom. But atomic power, like any other force of nature, is
not evil in itself. Properly used, it is an instrumentality for human
betterment. As a source of power, as a tool of scientific inquiry, it
has untold possibilities. We are already making good progress in the
constructive use of atomic power. We could do much more if we were free
to concentrate on its peaceful uses exclusively.

Atomic power will be with us all the days of our lives. We cannot
legislate it out of existence. We cannot ignore the dangers or the
benefits it offers.

I believe that man can harness the forces of the atom to work for the
improvement of the lot of human beings everywhere. That is our goal. As
a nation, as a people, we must understand this problem, we must handle
this new force wisely through our democratic processes. Above all, we
must strive, in all earnestness and good faith, to bring it under
effective international control. To do this will require much wisdom and
patience and firmness. The awe-inspiring responsibility in this field
now falls on a new Administration and a new Congress. I will give them
my support, as I am sure all our citizens will, in whatever constructive
steps they may take to make this newest of man's discoveries a source of
good and not of ultimate destruction.

We cannot tell when or whether the attitude of the Soviet rulers may
change. We do not know how long it may be before they show a willingness
to negotiate effective control of atomic energy and honorable
settlements of other world problems. We cannot measure how deep-rooted
are the Kremlin's illusions about us. We can be sure, however, that the
rulers of the communist world will not change their basic objectives
lightly or soon.

The communist rulers have a sense of time about these things wholly
unlike our own. We tend to divide our future into short spans, like the
two-year life of this Congress, or the four years of the next
Presidential term. They seem to think and plan in terms of generations.
And there is, therefore, no easy, short-run way to make them see that
their plans cannot prevail.

This means there is ahead of us a long hard test of strength and
stamina, between the free world and the communist domain-our politics
and our economy, our science and technology against the best they can
do--our liberty against their slavery--our voluntary concert Of free
nations against their forced amalgam of "people's republics"--our
strategy against their strategy-our nerve against their nerve.

Above all, this is a test of the will and the steadiness of the people
of the United States.

There has been no challenge like this in the history of our Republic. We
are called upon to rise to the occasion, as no people before us.

What is required of us is not easy. The way we must learn to live, the
world we have to live in, cannot be so pleasant, safe or simple as most
of us have known before, or confidently hoped to know.

Already we have had to sacrifice a number of accustomed ways of working
and of living, much nervous energy, material resources, even human life.
Yet if one thing is certain in our future, it is that more sacrifice
still lies ahead.

Were we to grow discouraged now, were we to weaken and slack off, the
whole structure we have built, these past eight years, would come apart
and fall away. Never then, no matter by what stringent means, could our
free world regain the ground, the time, the sheer momentum, lost by such
a move. There can and should be changes and improvements in our
programs, to meet new situations, serve new needs. But to desert the
spirit of our basic policies, to step back from them now, would surely
start the free world's slide toward the darkness that the communists
have prophesied-toward the moment for which they watch and wait.

If we value our freedom and our way of life and want to see them safe,
we must meet the challenge and accept its implications, stick to our
guns and carry out our policies.

I have set out the basic conditions, as I see them, under which we have
been working in the world, and the nature of our basic policies. What,
then, of the future? The answer, I believe, is this: As we continue to
confound Soviet expectations, as our world grows stronger, more united,
more attractive to men on both sides of the iron curtain, then
inevitably there will come a time of change within the communist world.
We do not know how that change will come about, whether by deliberate
decision in the Kremlin, by coup d'etat, by revolution, by defection of
satellites, or perhaps by some unforeseen combination of factors such as
these.

But if the communist rulers understand they cannot win by war, and if we
frustrate their attempts to win by subversion, it is not too much to
expect their world to change its character, moderate its aims, become
more realistic and less implacable, and recede from the cold war they
began.

Do not be deceived by the strong face, the look of monolithic power that
the communist dictators wear before the outside world. Remember their
power has no basis in consent. Remember they are so afraid of the free
world's ideas and ways of life, they do not dare to let their people
know about them. Think of the massive effort they put forth to try to
stop our Campaign of Truth from reaching their people with its message
of freedom.

The masters of the Kremlin live in fear their power and position would
collapse were their own people to acquire knowledge, information,
comprehension about our free society. Their world has many elements of
strength, but this one fatal flaw: the weakness represented by their
iron curtain and their police state. Surely, a social order at once so
insecure and so fearful, must ultimately lose its competition with our
free society.

Provided just one thing--and this I urge you to consider
carefully--provided that the free world retains the confidence and the
determination to outmatch the best our adversary can accomplish and to
demonstrate for uncertain millions on both sides of the iron curtain the
superiority of the free way of life.

That is the test upon all the free nations; upon none more than our own
Republic.

Our resources are equal to the task. We have the industry, the skills,
the basic economic strength. Above all, we have the vigor of free men in
a free society. We have our liberties. And while we keep them, while we
retain our democratic faith, the ultimate advantage in this hard
competition lies with us, not with the communists.

But there are some things that could shift the advantage to their side.
One of the things that could defeat us is fear--fear of the task we
face, fear of adjusting to it, fear that breeds more fear, sapping our
faith, corroding our liberties, turning citizen against citizen, ally
against ally. Fear could snatch away the very values we are striving to
defend.

Already the danger signals have gone up. Already the corrosive process
has begun. And every diminution of our tolerance, each new act of
enforced conformity, each idle accusation, each demonstration of
hysteria-each new restrictive law--is one more sign that we can lose the
battle against fear.

The communists cannot deprive us of our liberties--fear can. The
communists cannot stamp out our faith in human dignity-fear can. Fear is
an enemy within ourselves, and if we do not root it out, it may destroy
the very way of life we are so anxious to protect.

To beat back fear, we must hold fast to our heritage as free men. We
must renew our confidence in one another, our tolerance, our sense of
being neighbors, fellow citizens. We must take our stand on the Bill of
Rights. The inquisition, the star chamber, have no place in a free
society.

Our ultimate strength lies, not alone in arms, but in the sense of moral
values and moral truths that give meaning and vitality to the purposes
of free people. These values are our faith, our inspiration, the source
of our strength and our indomitable determination.

We face hard tasks, great dangers. But we are Americans and we have
faced hardships and uncertainty before, we have adjusted before to
changing circumstances. Our whole history has been a steady training for
the work it is now ours to do.

No one can lose heart for the task, none can lose faith in our free
ways, who stops to remember where we began, what we have sought, and
what accomplished, all together as Americans.

I have lived a long time and seen much happen in our country. And I know
out of my own experience, that we can do what must be done.

When I think back to the country I grew up in--and then look at what our
country has become--I am quite certain that having done so much, we can
do more.

After all, it has been scarcely fifteen years since most Americans
rejected out-of-hand the wise counsel that aggressors must be
"quarantined". The very concept of collective security, the
foundation-stone of all our actions now, was then strange doctrine,
shunned and set aside. Talk about adapting; talk about adjusting; talk
about responding as a people to the challenge of changed times and
circumstances--there has never been a more spectacular example than this
great change in America's outlook on the world.

Let all of us pause now, think back, consider carefully the meaning of
our national experience. Let us draw comfort from it and faith, and
confidence in our future as Americans.

The Nation's business is never finished. The basic questions we have
been dealing with, these eight years past, present themselves anew. That
is the way of our society. Circumstances change and current questions
take on different forms, new complications, year by year. But
underneath, the great issues remain the same--prosperity, welfare, human
rights, effective democracy, and above all, peace.

Now we turn to the inaugural of our new President. And in the great work
he is called upon to do he will have need for the support of a united
people, a confident people, with firm faith in one another and in our
common cause. I pledge him my support as a citizen of our Republic, and
I ask you to give him yours.

To him, to you, to all my fellow citizens, I say, Godspeed.

May God bless our country and our cause.

***

State of the Union Address
Dwight D. Eisenhower
February 2, 1953

Mr. President, Mr. Speaker, Members of the Eighty-third Congress:

I welcome the honor of appearing before you to deliver my first message
to the Congress.

It is manifestly the joint purpose of the congressional leadership and
of this administration to justify the summons to governmental
responsibility issued last November by the American people. The grand
labors of this leadership will involve:

Application of America's influence in world affairs with such fortitude
and such foresight that it will deter aggression and eventually secure
peace;

Establishment of a national administration of such integrity and such
efficiency that its honor at home will ensure respect abroad;

Encouragement of those incentives that inspire creative initiative in
our economy, so that its productivity may fortify freedom everywhere;
and

Dedication to the well-being of all our citizens and to the attainment
of equality of opportunity for all, so that our Nation will ever act
with the strength of unity in every task to which it is called.

The purpose of this message is to suggest certain lines along which our
joint efforts may immediately be directed toward realization of these
four ruling purposes.

The time that this administration has been in office has been too brief
to permit preparation of a detailed and comprehensive program of
recommended action to cover all phases of the responsibilities that
devolve upon our country's new leaders. Such a program will be filled
out in the weeks ahead as, after appropriate study, I shall submit
additional recommendations for your consideration. Today can provide
only a sure and substantial beginning.

II.

Our country has come through a painful period of trial and
disillusionment since the victory of 1945. We anticipated a world of
peace and cooperation. The calculated pressures of aggressive communism
have forced us, instead, to live in a world of turmoil.

From this costly experience we have learned one clear lesson. We have
learned that the free world cannot indefinitely remain in a posture of
paralyzed tension, leaving forever to the aggressor the choice of time
and place and means to cause greatest hurt to us at least cost to
himself.

This administration has, therefore, begun the definition of a new,
positive foreign policy. This policy will be governed by certain fixed
ideas. They are these:

(1) Our foreign policy must be clear, consistent, and confident. This
means that it must be the product of genuine, continuous cooperation
between the executive and the legislative branches of this Government.
It must be developed and directed in the spirit of true bipartisanship.

(2) The policy we embrace must be a coherent global policy. The freedom
we cherish and defend in Europe and in the Americas is no different from
the freedom that is imperiled in Asia.

(3) Our policy, dedicated to making the free world secure, will envision
all peaceful methods and devices--except breaking faith with our
friends. We shall never acquiesce in the enslavement of any people in
order to purchase fancied gain for ourselves. I shall ask the Congress
at a later date to join in an appropriate resolution making clear that
this Government recognizes no kind of commitment contained in secret
understandings of the past with foreign governments which permit this
kind of enslavement.

(4) The policy we pursue will recognize the truth that no single
country, even one so powerful as ours, can alone defend the liberty of
all nations threatened by Communist aggression from without or
subversion within. Mutual security means effective mutual cooperation.
For the United States, this means that, as a matter of common sense and
national interest, we shall give help to other nations in the measure
that they strive earnestly to do their full share of the common task. No
wealth of aid could compensate for poverty of spirit. The heart of every
free nation must be honestly dedicated to the preserving of its own
independence and security.

(5) Our policy will be designed to foster the advent of practical unity
in Western Europe. The nations of that region have contributed notably
to the effort of sustaining the security of the free world. From the
jungles of Indochina and Malaya to the northern shores of Europe, they
have vastly improved their defensive strength. Where called upon to do
so, they have made costly and bitter sacrifices to hold the line of
freedom.

But the problem of security demands closer cooperation among the nations
of Europe than has been known to date. Only a more closely integrated
economic and political system can provide the greatly increased economic
strength needed to maintain both necessary military readiness and
respectable living standards.

Europe's enlightened leaders have long been aware of these facts. All
the devoted work that has gone into the Schuman plan, the European Army,
and the Strasbourg Conference has testified to their vision and
determination. These achievements are the more remarkable when we
realize that each of them has marked a victory--for France and for
Germany alike over the divisions that in the past have brought such
tragedy to these two great nations and to the world.

The needed unity of Western Europe manifestly cannot be manufactured
from without; it can only be created from within. But it is right and
necessary that we encourage Europe's leaders by informing them of the
high value we place upon the earnestness of their efforts toward this
goal. Real progress will be conclusive evidence to the American people
that our material sacrifices in the cause of collective security are
matched by essential political, economic, and military accomplishments
in Western Europe.

(6) Our foreign policy will recognize the importance of profitable and
equitable world trade.

A substantial beginning can and should be made by our friends
themselves. Europe, for example, is now marked by checkered areas of
labor surplus and labor shortage, of agricultural areas needing machines
and industrial areas needing food. Here and elsewhere we can hope that
our friends will take the initiative in creating broader markets and
more dependable currencies, to allow greater exchange of goods and
services among themselves.

Action along these lines can create an economic environment that will
invite vital help from us.

This help includes:

First: Revising our customs regulations to remove procedural obstacles
to profitable trade. I further recommend that the Congress take the
Reciprocal Trade Agreements Act under immediate study and extend it by
appropriate legislation. This objective must not ignore legitimate
safeguarding of domestic industries, agriculture, and labor standards.
In all executive study and recommendations on this problem labor and
management and farmers alike will be earnestly consulted.

Second: Doing whatever Government properly can to encourage the flow of
private American investment abroad. This involves, as a serious and
explicit purpose of our foreign policy, the encouragement of a
hospitable climate for such investment in foreign nations.

Third: Availing ourselves of facilities overseas for the economical
production of manufactured articles which are needed for mutual defense
and which are not seriously competitive with our own normal peacetime
production.

Fourth: Receiving from the rest of the world, in equitable exchange for
what we supply, greater amounts of important raw materials which we do
not ourselves possess in adequate quantities.

III.

In this general discussion of our foreign policy, I must make special
mention of the war in Korea.

This war is, for Americans, the most painful phase of Communist
aggression throughout the world. It is clearly a part of the same
calculated assault that the aggressor is simultaneously pressing in
Indochina and in Malaya, and of the strategic situation that manifestly
embraces the island of Formosa and the Chinese Nationalist forces there.
The working out of any military solution to the Korean war will
inevitably affect all these areas.

The administration is giving immediate increased attention to the
development of additional Republic of Korea forces. The citizens of that
country have proved their capacity as fighting men and their eagerness
to take a greater share in the defense of their homeland. Organization,
equipment, and training will allow them to do so. Increased assistance
to Korea for this purpose conforms fully to our global policies.

In June 1950, following the aggressive attack on the Republic of Korea,
the United States Seventh Fleet was instructed both to prevent attack
upon Formosa and also to insure that Formosa should not be used as a
base of operations against the Chinese Communist mainland.

This has meant, in effect, that the United States Navy was required to
serve as a defensive arm of Communist China. Regardless of the situation
in 1950, since the date of that order the Chinese Communists have
invaded Korea to attack the United Nations forces there. They have
consistently rejected the proposals of the United Nations Command for an
armistice. They recently joined with Soviet Russia in rejecting the
armistice proposal sponsored in the United Nations by the Government of
India. This proposal had been accepted by the United States and 53 other
nations.

Consequently there is no longer any logic or sense in a condition that
required the United States Navy to assume defensive responsibilities on
behalf of the Chinese Communists, thus permitting those Communists, with
greater impunity, to kill our soldiers and those of our United Nations
allies in Korea.

I am, therefore, issuing instructions that the Seventh Fleet no longer
be employed to shield Communist China. This order implies no aggressive
intent on our part. But we certainly have no obligation to protect a
nation fighting us in Korea.

IV.

Our labor for peace in Korea and in the world imperatively demands the
maintenance by the United States of a strong fighting service ready for
any contingency.

Our problem is to achieve adequate military strength within the limits
of endurable strain upon our economy. To amass military power without
regard to our economic capacity would be to defend ourselves against one
kind of disaster by inviting another.

Both military and economic objectives demand a single national military
policy, proper coordination of our armed services, and effective
consolidation of certain logistics activities.

We must eliminate waste and duplication of effort in the armed services.

We must realize clearly that size alone is not sufficient. The biggest
force is not necessarily the best--and we want the best.

We must not let traditions or habits of the past stand in the way of
developing an efficient military force. All members of our forces must
be ever mindful that they serve under a single flag and for a single
cause.

We must effectively integrate our armament programs and plan them in
such careful relation to our industrial facilities that we assure the
best use of our manpower and our materials.

Because of the complex technical nature of our military organization and
because of the security reasons involved, the Secretary of Defense must
take the initiative and assume the responsibility for developing plans
to give our Nation maximum safety at minimum cost. Accordingly, the new
Secretary of Defense and his civilian and military associates will, in
the future, recommend such changes in present laws affecting our defense
activities as may be necessary to clarify responsibilities and improve
the total effectiveness of our defense effort.

This effort must always conform to policies laid down in the National
Security Council.

The statutory function of the National Security Council is to assist the
President in the formulation and coordination of significant domestic,
foreign, and military policies required for the security of the Nation.
In these days of tension it is essential that this central body have the
vitality to perform effectively its statutory role. I propose to see
that it does so.

Careful formulation of policies must be followed by clear understanding
of them by all peoples. A related need, therefore, is to make more
effective all activities of the Government related to international
information.

I have recently appointed a committee of representative and informed
citizens to survey this subject and to make recommendations in the near
future for legislative, administrative, or other action.

A unified and dynamic effort in this whole field is essential to the
security of the United States and of the other peoples in the community
of free nations. There is but one sure way to avoid total war--and that
is to win the cold war.

While retaliatory power is one strong deterrent to a would-be aggressor,
another powerful deterrent is defensive power. No enemy is likely to
attempt an attack foredoomed to failure.

Because the building of a completely impenetrable defense against attack
is still not possible, total defensive strength must include civil
defense preparedness. Because we have incontrovertible evidence that
Soviet Russia possesses atomic weapons, this kind of protection becomes
sheer necessity.

Civil defense responsibilities primarily belong to the State and local
governments--recruiting, training, and organizing volunteers to meet any
emergency. The immediate job of the Federal Government is to provide
leadership, to supply technical guidance, and to continue to strengthen
its civil defense stockpile of medical, engineering, and related
supplies and equipment. This work must go forward without lag.

V.

I have referred to the inescapable need for economic health and strength
if we are to maintain adequate military power and exert influential
leadership for peace in the world.

Our immediate task is to chart a fiscal and economic policy that can:

(1) Reduce the planned deficits and then balance the budget, which
means, among other things, reducing Federal expenditures to the safe
minimum;

(2) Meet the huge costs of our defense;

(3) Properly handle the burden of our inheritance of debt and
obligations;

(4) Check the menace of inflation;

(5) Work toward the earliest possible reduction of the tax burden;

(6) Make constructive plans to encourage the initiative of our citizens.

It is important that all of us understand that this administration does
not and cannot begin its task with a clean slate. Much already has been
written on the record, beyond our power quickly to erase or to amend.
This record includes our inherited burden of indebtedness and
obligations and deficits.

The current year's budget, as you know, carries a 5.9 billion dollar
deficit; and the budget, which was presented to you before this
administration took office, indicates a budgetary deficit of 9.9 billion
for the fiscal year ending June 30, 1954. The national debt is now more
than 265 billion dollars. In addition, the accumulated obligational
authority of the Federal Government for future payment totals over 80
billion dollars. Even this amount is exclusive of large contingent
liabilities, so numerous and extensive as to be almost beyond
description.

The bills for the payment of nearly all of the 80 billion dollars of
obligations will be presented during the next 4 years. These bills,
added to the current costs of government we must meet, make a formidable
burden.

The present authorized Government-debt limit is 275 billion dollars. The
forecast presented by the outgoing administration with the fiscal year
1954 budget indicates that--before the end of the fiscal year and at the
peak of demand for payments during the year--the total Government debt
may approach and even exceed that limit. Unless budgeted deficits are
checked, the momentum of past programs will force an increase of the
statutory debt limit.

Permit me this one understatement: to meet and to correct this situation
will not be easy.

Permit me this one assurance: every department head and I are determined
to do everything we can to resolve it.

The first order of business is the elimination of the annual deficit.
This cannot be achieved merely by exhortation. It demands the concerted
action of all those in responsible positions in the Government and the
earnest cooperation of the Congress.

Already, we have begun an examination of the appropriations and
expenditures of all departments in an effort to find significant items
that may be decreased or canceled without damage to our essential
requirements.

Getting control of the budget requires also that State and local
governments and interested groups of citizens restrain themselves in
their demands upon the Congress that the Federal Treasury spend more and
more money for all types of projects.

A balanced budget is an essential first measure in checking further
depreciation in the buying power of the dollar. This is one of the
critical steps to be taken to bring an end to planned inflation. Our
purpose is to manage the Government's finances so as to help and not
hinder each family in balancing its own budget.

Reduction of taxes will be justified only as we show we can succeed in
bringing the budget under control. As the budget is balanced and
inflation checked, the tax burden that today stifles initiative can and
must be eased.

Until we can determine the extent to which expenditures can be reduced,
it would not be wise to reduce our revenues.

Meanwhile, the tax structure as a whole demands review. The Secretary of
the Treasury is undertaking this study immediately. We must develop a
system of taxation which will impose the least possible obstacle to the
dynamic growth of the country. This includes particularly real
opportunity for the growth of small businesses. Many readjustments in
existing taxes will be necessary to serve these objectives and also to
remove existing inequities. Clarification and simplification in the tax
laws as well as the regulations will be undertaken.

In the entire area of fiscal policy--which must, in its various aspects,
be treated in recommendations to the Congress in coming weeks--there can
now be stated certain basic facts and principles.

First. It is axiomatic that our economy is a highly complex and
sensitive mechanism. Hasty and ill-considered action of any kind could
seriously upset the subtle equation that encompasses debts, obligations,
expenditures, defense demands, deficits, taxes, and the general economic
health of the Nation. Our goals can be clear, our start toward them can
be immediate--but action must be gradual.

Second. It is clear that too great a part of the national debt comes due
in too short a time. The Department of the Treasury will undertake at
suitable times a program of extending part of the debt over longer
periods and gradually placing greater amounts in the hands of
longer-term investors.

Third. Past differences in policy between the Treasury and the Federal
Reserve Board have helped to encourage inflation. Henceforth, I expect
that their single purpose shall be to serve the whole Nation by policies
designed to stabilize the economy and encourage the free play of our
people's genius for individual initiative.

In encouraging this initiative, no single item in our current problems
has received more thoughtful consideration by my associates, and by the
many individuals called into our counsels, than the matter of price and
wage control by law.

The great economic strength of our democracy has developed in an
atmosphere of freedom. The character of our people resists artificial
and arbitrary controls of any kind. Direct controls, except those on
credit, deal not with the real causes of inflation but only with its
symptoms. In times of national emergency, this kind of control has a
role to play. Our whole system, however, is based upon the assumption
that, normally, we should combat wide fluctuations in our price
structure by relying largely on the effective use of sound fiscal and
monetary policy, and upon the natural workings of economic law.

Moreover, American labor and American business can best resolve their
wage problems across the bargaining table. Government should refrain
from sitting in with them unless, in extreme cases, the public welfare
requires protection.

We are, of course, living in an international situation that is neither
an emergency demanding full mobilization, nor is it peace. No one can
know how long this condition will persist. Consequently, we are forced
to learn many new things as we go along-clinging to what works,
discarding what does not.

In all our current discussions on these and related facts, the weight of
evidence is clearly against the use of controls in their present forms.
They have proved largely unsatisfactory or unworkable. They have not
prevented inflation; they have not kept down the cost of living.
Dissatisfaction with them is wholly justified. I am convinced that
now--as well as in the long run--free and competitive prices will best
serve the interests of all the people, and best meet the changing,
growing needs of our economy.

Accordingly, I do not intend to ask for a renewal of the present wage
and price controls on April 30, 1953, when present legislation expires.
In the meantime, steps will be taken to eliminate controls in an orderly
manner, and to terminate special agencies no longer needed for this
purpose. It is obviously to be expected that the removal of these
controls will result in individual price changes--some up, some down.
But a maximum of freedom in market prices as well as in collective
bargaining is characteristic of a truly free people.

I believe also that material and product controls should be ended,
except with respect to defense priorities and scarce and critical items
essential for our defense. I shall recommend to the Congress that
legislation be enacted to continue authority for such remaining controls
of this type as will be necessary after the expiration of the existing
statute on June 30, 1953.

I recommend the continuance of the authority for Federal control over
rents in those communities in which serious housing shortages exist.
These are chiefly the so-called defense areas. In these and all areas
the Federal Government should withdraw from the control of rents as soon
as practicable. But before they are removed entirely, each legislature
should have full opportunity to take over, within its own State,
responsibility for this function.

It would be idle to pretend that all our problems in this whole field of
prices will solve themselves by mere Federal withdrawal from direct
controls.

We shall have to watch trends closely. If the freer functioning of our
economic system, as well as the indirect controls which can be
appropriately employed, prove insufficient during this period of strain
and tension, I shall promptly ask the Congress to enact such legislation
as may be required.

In facing all these problems--wages, prices, production, tax rates,
fiscal policy, deficits--everywhere we remain constantly mindful that
the time for sacrifice has not ended. But we are concerned with the
encouragement of competitive enterprise and individual initiative
precisely because we know them to be our Nation's abiding sources of
strength.

VI.

Our vast world responsibility accents with urgency our people's
elemental right to a government whose clear qualities are loyalty,
security, efficiency, economy, and integrity.

The safety of America and the trust of the people alike demand that the
personnel of the Federal Government be loyal in their motives and
reliable in the discharge of their duties. Only a combination of both
loyalty and reliability promises genuine security.

To state this principle is easy; to apply it can be difficult. But this
security we must and shall have. By way of example, all principal new
appointees to departments and agencies have been investigated at their
own request by the Federal Bureau of Investigation.

Confident of your understanding and cooperation, I know that the primary
responsibility for keeping out the disloyal and the dangerous rests
squarely upon the executive branch. When this branch so conducts itself
as to require policing by another branch of the Government, it invites
its own disorder and confusion.

I am determined to meet this responsibility of the Executive. The heads
of all executive departments and agencies have been instructed to
initiate at once effective programs of security with respect to their
personnel. The Attorney General will advise and guide the departments
and agencies in the shaping of these programs, designed at once to
govern the employment of new personnel and to review speedily any
derogatory information concerning incumbent personnel.

To carry out these programs, I believe that the powers of the executive
branch under existing law are sufficient. If they should prove
inadequate, the necessary legislation will be requested.

These programs will be both fair to the rights of the individual and
effective for the safety of the Nation. They will, with care and
justice, apply the basic principle that public employment is not a right
but a privilege.

All these measures have two clear purposes: Their first purpose is to
make certain that this Nation's security is not jeopardized by false
servants. Their second purpose is to clear the atmosphere of that
unreasoned suspicion that accepts rumor and gossip as substitutes for
evidence.

Our people, of course, deserve and demand of their Federal Government
more than security of personnel. They demand, also, efficient and
logical organization, true to constitutional principles.

I have already established a Committee on Government Organization. The
Committee is using as its point of departure the reports of the Hoover
Commission and subsequent studies by several independent agencies. To
achieve the greater efficiency and economy which the Committee analyses
show to be possible, I ask the Congress to extend the present Government
Reorganization Act for a period of 18 months or 2 years beyond its
expiration date of April 1, 1953.

There is more involved here than realigning the wheels and smoothing the
gears of administrative machinery. The Congress rightfully-expects the
Executive to take the initiative in discovering and removing outmoded
functions and eliminating duplication.

One agency, for example, whose head has promised early and vigorous
action to provide greater efficiency is the Post Office. One of the
oldest institutions of our Federal Government, its service should be of
the best. Its employees should merit and receive the high regard and
esteem of the citizens of the Nation. There are today in some areas of
the postal service, both waste and incompetence to be corrected. With
the cooperation of the Congress, and taking advantage of its accumulated
experience in postal affairs, the Postmaster General will institute a
program directed at improving service while at the same time reducing
costs and decreasing deficits.

In all departments, dedication to these basic precepts of security and
efficiency, integrity, and economy can and will produce an
administration deserving of the trust the people have placed in it.

Our people have demanded nothing less than good, efficient government.
They shall get nothing less.

VII.

Vitally important are the water and minerals, public lands and standing
timber, forage and wild-life of this country. A fast-growing population
will have vast future needs in these resources. We must more than match
the substantial achievements in the half-century since President
Theodore Roosevelt awakened the Nation to the problem of conservation.

This calls for a strong Federal program in the field of resource
development. Its major projects should be timed, where possible to
assist in leveling off peaks and valleys in our economic life. Soundly
planned projects already initiated should be carried out. New ones will
be planned for the future.

The best natural resources program for America will not result from
exclusive dependence on Federal bureaucracy. It will involve a
partnership of the States and local communities, private citizens, and
the Federal Government, all working together. This combined effort will
advance the development of the great river valleys of our Nation and the
power that they can generate. Likewise, such a partnership can be
effective in the expansion throughout the Nation of upstream storage;
the sound use of public lands; the wise conservation of minerals; and
the sustained yield of our forests.

There has been much criticism, some of it apparently justified, of the
confusion resulting from overlapping Federal activities in the entire
field of resource-conservation. This matter is being exhaustively
studied and appropriate reorganization plans will be developed.

Most of these particular resource problems pertain to the Department of
the Interior. Another of its major concerns is our country's island
possessions. Here, one matter deserves attention. The platforms of both
political parties promised immediate statehood to Hawaii. The people of
that Territory have earned that status. Statehood should be granted
promptly with the first election scheduled for 1954.

VIII.

One of the difficult problems which face the new administration is that
of the slow, irregular decline of farm prices. This decline, which has
been going on for almost 2 years, has occurred at a time when most
nonfarm prices and farm costs of production are extraordinarily high.

Present agricultural legislation provides for the mandatory support of
the prices of basic farm commodities at 90 percent of parity. The
Secretary of Agriculture and his associates will, of course, execute the
present act faithfully and thereby seek to mitigate the consequences of
the downturn in farm income.

This price-support legislation will expire at the end of 1954.

So we should begin now to consider what farm legislation we should
develop for 1955 and beyond. Our aim should be economic stability and
full parity of income for American farmers. But we must seek this goal
in ways that minimize governmental interference in the farmers' affairs,
that permit desirable shifts in production, and that encourage farmers
themselves to use initiative in meeting changing economic conditions.

A continuing study reveals nothing more emphatically than the
complicated nature of this subject. Among other things, it shows that
the prosperity of our agriculture depends directly upon the prosperity
of the whole country--upon the purchasing power of American consumers.
It depends also upon the opportunity to ship abroad large surpluses of
particular commodities, and therefore upon sound economic relationships
between the United States and many foreign countries. It involves
research and scientific investigation, conducted on an extensive scale.
It involves special credit mechanisms and marketing, rural
electrification, soil conservation, and other programs.

The whole complex of agricultural programs and policies will be studied
by a Special Agricultural Advisory Commission, as I know it will by
appropriate committees of the Congress. A nonpartisan group of respected
authorities in the field of agriculture has already been appointed as an
interim advisory group.

The immediate changes needed in agricultural programs are largely
budgetary and administrative in nature. New policies and new programs
must await the completion of the far-reaching studies which have already
been launched.

IX.

The determination of labor policy must be governed not by the vagaries
of political expediency but by the firmest principles and convictions.
Slanted partisan appeals to American workers, spoken as if they were a
group apart, necessitating a special language and treatment, are an
affront to the fullness of their dignity as American citizens.

The truth in matters of labor policy has become obscured in controversy.
The very meaning of economic freedom as it affects labor has become
confused. This misunderstanding has provided a climate of opinion
favoring the growth of governmental paternalism in labor relations. This
tendency, if left uncorrected, could end only by producing a
bureaucratic despotism. Economic freedom is, in fact, the requisite of
greater prosperity for every American who earns his own living.

In the field of labor legislation, only a law that merits the respect
and support of both labor and management can help reduce the loss of
wages and of production through strikes and stoppages, and thus add to
the total economic strength of our Nation.

We have now had 5 years' experience with the Labor Management Act of
1947, commonly known as the Taft-Hartley Act. That experience has shown
the need for some corrective action, and we should promptly proceed to
amend that act.

I know that the Congress is already proceeding with renewed studies of
this subject. Meanwhile, the Department of Labor is at once beginning
work to devise further specific recommendations for your consideration.

In the careful working out of legislation, I know you will give
thoughtful consideration--as will we in the executive branch--to the
views of labor, and of management, and of the general public. In this
process, it is only human that each of us should bring forward the
arguments of self-interest. But if all conduct their arguments in the
overpowering light of national interest--which is enlightened
self-interest--we shall get the right answers. I profoundly hope that
every citizen of our country will follow with understanding your
progress in this work. The welfare of all of us is involved.

Especially must we remember that the institutions of trade unionism and
collective bargaining are monuments to the freedom that must prevail in
our industrial life. They have a century of honorable achievement behind
them. Our faith in them is proven, firm, and final.

Government can do a great deal to aid the settlement of labor disputes
without allowing itself to be employed as an ally of either side. Its
proper role in industrial strife is to encourage the processes of
mediation and conciliation. These processes can successfully be directed
only by a government free from the taint of any suspicion that it is
partial or punitive.

The administration intends to strengthen and to improve the services
which the Department of Labor can render to the worker and to the whole
national community. This Department was created--just 40 years ago--to
serve the entire Nation. It must aid, for example, employers and
employees alike in improving training programs that will develop skilled
and competent workers. It must enjoy the confidence and respect of labor
and industry in order to play a significant role in the planning of
America's economic future. To that end, I am authorizing the Department
of Labor to establish promptly a tripartite advisory committee
consisting of representatives of employers, labor, and the public.

X.

Our civil and social rights form a central part of the heritage we are
striving to defend on all fronts and with all our strength. I believe
with all my heart that our vigilant guarding of these rights is a sacred
obligation binding upon every citizen. To be true to one's own freedom
is, in essence, to honor and respect the freedom of all others.

A cardinal ideal in this heritage we cherish is the equality of rights
of all citizens of every race and color and creed.

We know that discrimination against minorities persists despite our
allegiance to this ideal. Such discrimination--confined to no one
section of the Nation--is but the outward testimony to the persistence
of distrust and of fear in the hearts of men.

This fact makes all the more vital the fighting of these wrongs by each
individual, in every station of life, in his every deed.

Much of the answer lies in the power of fact, fully publicized; of
persuasion, honestly pressed; and of conscience, justly aroused. These
are methods familiar to our way of life, tested and proven wise.

I propose to use whatever authority exists in the office of the
President to end segregation in the District of Columbia, including the
Federal Government, and any segregation in the Armed Forces.

Here in the District of Columbia, serious attention should be given to
the proposal to develop and authorize, through legislation, a system to
provide an effective voice in local self-government. While consideration
of this proceeds, I recommend an immediate increase of two in the number
of District Commissioners to broaden representation of all elements of
our local population. This will be a first step toward insuring that
this Capital provide an honored example to all communities of our
Nation.

In this manner, and by the leadership of the office of the President
exercised through friendly conferences with those in authority in our
States and cities, we expect to make true and rapid progress in civil
rights and equality of employment opportunity.

There is one sphere in which civil rights are inevitably involved in
Federal legislation. This is the sphere of immigration.

It is a manifest right of our Government to limit the number of
immigrants our Nation can absorb. It is also a manifest right of our
Government to set reasonable requirements on the character and the
numbers of the people who come to share our land and our freedom.

It is well for us, however, to remind ourselves occasionally of an
equally manifest fact: we are--one and all--immigrants or sons and
daughters of immigrants.

Existing legislation contains injustices. It does, in fact,
discriminate. I am informed by Members of the Congress that it was
realized, at the time of its enactment, that future study of the basis
of determining quotas would be necessary.

I am therefore requesting the Congress to review this legislation and to
enact a statute that will at one and the same time guard our legitimate
national interests and be faithful to our basic ideas of freedom and
fairness to all.

In another but related area--that of social rights--we see most clearly
the new application of old ideas of freedom.

This administration is profoundly aware of two great needs born of our
living in a complex industrial economy. First, the individual citizen
must have safeguards against personal disaster inflicted by forces
beyond his control; second, the welfare of the people demands effective
and economical performance by the Government of certain indispensable
social services.

In the light of this responsibility, certain general purposes and
certain concrete measures are plainly indicated now.

There is urgent need for greater effectiveness in our programs, both
public and private, offering safeguards against the privations that too
often come with unemployment, old age, illness, and accident. The
provisions of the old-age and survivors insurance law should promptly be
extended to cover millions of citizens who have been left out of the
social-security system. No less important is the encouragement of
privately sponsored pension plans. Most important of all, of course, is
renewed effort to check the inflation which destroys so much of the
value of all social-security payments.

Our school system demands some prompt, effective help. During each of
the last 9 years, more than 1 1/2 million children have swelled the
elementary and secondary school population of the country. Generally,
the school population is proportionately higher in States with low per
capita income. This whole situation calls for careful congressional
study and action. I am sure that you share my conviction that the firm
conditions of Federal aid must be proved need and proved lack of local
income.

One phase of the school problem demands special action. The school
population of many districts has been greatly increased by the swift
growth of defense activities. These activities have added little or
nothing to the tax resources of the communities affected. Legislation
aiding construction of schools in the districts expires on June 30. This
law should be renewed; and likewise, the partial payments for current
operating expenses for these particular school districts should be made,
including the deficiency requirement of the current fiscal year.

Public interest similarly demands one prompt specific action in
protection of the general consumer. The Food and Drug Administration
should be authorized to continue its established and necessary program
of factory inspections. The invalidation of these inspections by the
Supreme Court of December 8, 1952, was based solely on the fact that the
present law contained inconsistent and unclear provisions. These must be
promptly corrected.

I am well aware that beyond these few immediate measures there remains
much to be done. The health and housing needs of our people call for
intelligently planned programs. Involved are the solvency of the whole
security system; and its guarding against exploitation by the
irresponsible.

To bring clear purpose and orderly procedure into this field, I
anticipate a thorough study of the proper relationship among Federal,
State, and local programs. I shall shortly send you specific
recommendations for establishing such an appropriate commission,
together with a reorganization plan defining new administrative status
for all Federal activities in health, education, and social security.

I repeat that there are many important subjects of which I make no
mention today. Among these is our great and growing body of veterans.
America has traditionally been generous in caring for the disabled--and
the widow and the orphan of the fallen. These millions remain close to
all our hearts. Proper care of our uniformed citizens and appreciation
of the past service of our veterans are part of our accepted
governmental responsibilities.

XI

We have surveyed briefly some problems of our people and a portion of
the tasks before us.

The hope of freedom itself depends, in real measure, upon our strength,
our heart, and our wisdom.

We must be strong in arms. We must be strong in the source of all our
armament, our productivity. We all--workers and farmers, foremen and
financiers, technicians and builders--all must produce, produce more,
and produce yet more.

We must be strong, above all, in the spiritual resources upon which all
else depends. We must be devoted with all our heart to the values we
defend. We must know that each of these values and virtues applies with
equal force at the ends of the earth and in our relations with our
neighbor next door. We must know that freedom expresses itself with
equal eloquence in the right of workers to strike in the nearby factory,
and in the yearnings and sufferings of the peoples of Eastern Europe.

As our heart summons our strength, our wisdom must direct it.

There is, in world affairs, a steady course to be followed between an
assertion of strength that is truculent and a confession of helplessness
that is cowardly.

There is, in our affairs at home, a middle way between untrammeled
freedom of the individual and the demands for the welfare of the whole
Nation. This way must avoid government by bureaucracy as carefully as it
avoids neglect of the helpless.

In every area of political action, free men must think before they can
expect to win.

In this spirit must we live and labor: confident of our strength,
compassionate in our heart, clear in our mind.

In this spirit, let us together turn to the great tasks before us.

***

State of the Union Address
Dwight D. Eisenhower
January 7, 1954

Mr. President, Mr. Speaker, Members of the Eighty-third Congress:

It is a high honor again to present to the Congress my views on the
state of the Union and to recommend measures to advance the security,
prosperity, and well-being of the American people.

All branches of this Government--and I venture to say both of our great
parties--can support the general objective of the recommendations I make
today, for that objective is the building of a stronger America. A
nation whose every citizen has good reason for bold hope; where effort
is rewarded and prosperity is shared; where freedom expands and peace is
secure--that is what I mean by a stronger America.

Toward this objective a real momentum has been developed during this
Administration's first year in office. We mean to continue that momentum
and to increase it. We mean to build a better future for this nation.

Much for which we may be thankful has happened during the past year.

First of all we are deeply grateful that our sons no longer die on the
distant mountains of Korea. Although they are still called from our
homes to military service, they are no longer called to the field of
battle.

The nation has just completed the most prosperous year in its history.
The damaging effect of inflation on the wages, pensions, salaries and
savings of us all has been brought under control. Taxes have begun to go
down. The cost of our government has been reduced and its work proceeds
with some 183,000 fewer employees; thus the discouraging trend of modern
governments toward their own limitless expansion has in our case been
reversed. The cost of armaments becomes less oppressive as we near our
defense goals; yet we are militarily stronger every day. During the
year, creation of the new Cabinet Department of Health, Education, and
Welfare symbolized the government's permanent concern with the human
problems of our citizens.

Segregation in the armed forces and other Federal activities is on the
way out. We have also made progress toward its elimination in the
District of Columbia. These are steps in the continuing effort to
eliminate inter-racial difficulty.

Some developments beyond our shores have been equally encouraging.
Communist aggression, halted in Korea, continues to meet in Indo-china
the vigorous resistance of France and the Associated States, assisted by
timely aid from our country. In West Germany, in Iran, and in other
areas of the world, heartening political victories have been won by the
forces of stability and freedom. Slowly but surely, the free world
gathers strength. Meanwhile, from behind the iron curtain, there are
signs that tyranny is in trouble and reminders that its structure is as
brittle as its surface is hard.

There has been in fact a great strategic change in the world during the
past year. That precious intangible, the initiative, is becoming ours.
Our policy, not limited to mere reaction against crises provoked by
others, is free to develop along lines of our choice not only abroad,
but also at home. As a major theme for American policy during the coming
year, let our joint determination be to hold this new initiative and to
use it.

We shall use this initiative to promote three broad purposes: First, to
protect the freedom of our people; second, to maintain a strong, growing
economy; third, to concern ourselves with the human problems of the
individual citizen.

Only by active concern for each of these purposes can we be sure that we
are on the forward road to a better and a stronger America. All my
recommendations today are in furtherance of these three purposes.

I. FOREIGN AFFAIRS

American freedom is threatened so long as the world Communist conspiracy
exists in its present scope, power and hostility. More closely than ever
before, American freedom is interlocked with the freedom of other
people. In the unity of the free world lies our best chance to reduce
the Communist threat without war. In the task of maintaining this unity
and strengthening all its parts, the greatest responsibility falls
naturally on those who, like ourselves, retain the most freedom and
strength.

We shall, therefore, continue to advance the cause of freedom on foreign
fronts.

In the Far East, we retain our vital interest in Korea. We have
negotiated with the Republic of Korea a mutual security pact, which
develops our security system for the Pacific and which I shall promptly
submit to the Senate for its consent to ratification. We are prepared to
meet any renewal of armed aggression in Korea. We shall maintain
indefinitely our bases in Okinawa. I shall ask the Congress to authorize
continued material assistance to hasten the successful conclusion of the
struggle in Indo-china. This assistance will also bring closer the day
when the Associated States may enjoy the independence already assured by
France. We shall also continue military and economic aid to the
Nationalist Government of China.

In South Asia, profound changes are taking place in free nations which
are demonstrating their ability to progress through democratic methods.
They provide an inspiring contrast to the dictatorial methods and
backward course of events in Communist China. In these continuing
efforts, the free peoples of South Asia can be assured of the support of
the United States.

In the Middle East, where tensions and serious problems exist, we will
show sympathetic and impartial friendship.

In Western Europe our policy rests firmly on the North Atlantic Treaty.
It will remain so based as far ahead as we can see. Within its
organization, the building of a united European community, including
France and Germany, is vital to a free and self-reliant Europe. This
will be promoted by the European Defense Community which offers
assurance of European security. With the coming of unity to Western
Europe, the assistance this Nation can render for the security of Europe
and the free world will be multiplied in effectiveness.

In the Western Hemisphere we shall continue to develop harmonious and
mutually beneficial cooperation with our neighbors. Indeed, solid
friendship with all our American neighbors is a cornerstone of our
entire policy.

In the world as a whole, the United Nations, admittedly still in a state
of evolution, means much to the United States. It has given uniquely
valuable services in many places where violence threatened. It is the
only real world forum where we have the opportunity for international
presentation and rebuttal. It is a place where the nations of the world
can, if they have the will, take collective action for peace and
justice. It is a place where the guilt can be squarely assigned to those
who fail to take all necessary steps to keep the peace. The United
Nations deserves our continued firm support.

FOREIGN ASSISTANCE AND TRADE

In the practical application of our foreign policy, we enter the field
of foreign assistance and trade.

Military assistance must be continued. Technical assistance must be
maintained. Economic assistance can be reduced. However, our economic
programs in Korea and in a few other critical places of the world are
especially important, and I shall ask Congress to continue them in the
next fiscal year.

The forthcoming Budget Message will propose maintenance of the
Presidential power of transferability of all assistance funds and will
ask authority to merge these funds with the regular defense funds. It
will also propose that the Secretary of Defense have primary
responsibility for the administration of foreign military assistance in
accordance with the policy guidance of the Secretary of State.

The fact that we can now reduce our foreign economic assistance in many
areas is gratifying evidence that its objectives are being achieved. By
continuing to surpass her prewar levels of economic activity, Western
Europe gains self-reliance. Thus our relationship enters a new phase
which can bring results beneficial to our taxpayers and our allies
alike, if still another step is taken.

This step is the creation of a healthier and freer system of trade and
payments within the free world--a system in which our allies can earn
their own way and our own economy can continue to flourish. The free
world can no longer afford the kinds of arbitrary restraints on trade
that have continued ever since the war. On this problem I shall submit
to the Congress detailed recommendations, after our Joint Commission on
Foreign Economic Policy has made its report.

ATOMIC ENERGY PROPOSAL

As we maintain our military strength during the coming year and draw
closer the bonds with our allies, we shall be in an improved position to
discuss outstanding issues with the Soviet Union. Indeed we shall be
glad to do so whenever there is a reasonable prospect of constructive
results. In this spirit the atomic energy proposals of the United States
were recently presented to the United Nations General Assembly. A truly
constructive Soviet reaction will make possible a new start toward an
era of peace, and away from the fatal road toward atomic war.

DEFENSE

Since our hope is peace, we owe ourselves and the world a candid
explanation of the military measures we are taking to make that peace
secure.

As we enter this new year, our military power continues to grow. This
power is for our own defense and to deter aggression. We shall not be
aggressors, but we and our allies have and will maintain a massive
capability to strike back.

Here are some of the considerations in our defense planning:

First, while determined to use atomic power to serve the usages of
peace, we take into full account our great and growing number of nuclear
weapons and the most effective means of using them against an aggressor
if they are needed to preserve our freedom. Our defense will be stronger
if, under appropriate security safeguards, we share with our allies
certain knowledge of the tactical use of our nuclear weapons. I urge the
Congress to provide the needed authority.

Second, the usefulness of these new weapons creates new relationships
between men and materials. These new relationships permit economies in
the use of men as we build forces suited to our situation in the world
today. As will be seen from the Budget Message on January 21, the
airpower of our Navy and Air Force is receiving heavy emphasis.

Third, our armed forces must regain maximum mobility of action. Our
strategic reserves must be centrally placed and readily deployable to
meet sudden aggression against ourselves and our allies.

Fourth, our defense must rest on trained manpower and its most
economical and mobile use. A professional corps is the heart of any
security organization. It is necessarily the teacher and leader of those
who serve temporarily in the discharge of the obligation to help defend
the Republic. Pay alone will not retain in the career service of our
armed forces the necessary numbers of long-term personnel. I strongly
urge, therefore, a more generous use of other benefits important to
service morale. Among these are more adequate living quarters and family
housing units and medical care for dependents.

Studies of military manpower have just been completed by the National
Security Training Commission and a Committee appointed by the Director
of the Office of Defense Mobilization. Evident weaknesses exist in the
state of readiness and organization of our reserve forces. Measures to
correct these weaknesses will be later submitted to the Congress.

Fifth, the ability to convert swiftly from partial to all-out
mobilization is imperative to our security. For the first time,
mobilization officials know what the requirements are for 1,000 major
items needed for military uses. These data, now being related to
civilian requirements and our supply potential, will show us the gaps in
our mobilization base. Thus we shall have more realistic plant-expansion
and stockpiling goals. We shall speed their attainment. This Nation is
at last to have an up-to-date mobilization base--the foundation of a
sound defense program.

Another part of this foundation is, of course, our continental transport
system. Some of our vital heavy materials come increasingly from Canada.
Indeed our relations with Canada, happily always close, involve more and
more the unbreakable ties of strategic interdependence. Both nations now
need the St. Lawrence Seaway for security as well as for economic
reasons. I urge the Congress promptly to approve our participation in
its construction.

Sixth, military and non-military measures for continental defense must
be and are being strengthened. In the current fiscal year we are
allocating to these purposes an increasing portion of our effort, and in
the next fiscal year we shall spend nearly a billion dollars more for
them than in 1953.

An indispensable part of our continental security is our civil defense
effort. This will succeed only as we have the complete cooperation of
State Governors, Mayors, and voluntary citizen groups. With their help
we can advance a cooperative program which, if an attack should come,
would save many lives and lessen destruction.

The defense program recommended in the 1955 Budget is consistent with
all of the considerations which I have just discussed. It is based on a
new military program unanimously recommended by the Joint Chiefs of
Staff and approved by me following consideration by the National
Security Council. This new program will make and keep America strong in
an age of peril. Nothing should bar its attainment.

The international and defense policies which I have outlined will enable
us to negotiate from a position of strength as we hold our resolute
course toward a peaceful world. We now turn to matters which are
normally characterized as domestic, well realizing that what we do
abroad affects every problem at home--from the amount of taxes to our
very state of mind.

INTERNAL SECURITY

Under the standards established for the new employee security program,
more than 2,200 employees have been separated from the Federal
government. Our national security demands that the investigation of new
employees and the evaluation of derogatory information respecting
present employees be expedited and concluded at the earliest possible
date. I shall recommend that the Congress provide additional funds where
necessary to speed these important procedures.

From the special employment standards of the Federal government I turn
now to a matter relating to American citizenship. The subversive
character of the Communist Party in the United States has been clearly
demonstrated in many ways, including court proceedings. We should
recognize by law a fact that is plain to all thoughtful citizens-that we
are dealing here with actions akin to treason--that when a citizen
knowingly participates in the Communist conspiracy he no longer holds
allegiance to the United States.

I recommend that Congress enact legislation to provide that a citizen of
the United States who is convicted in the courts of hereafter conspiring
to advocate the overthrow of this government by force or violence be
treated as having, by such act, renounced his allegiance to the United
States and forfeited his United States citizenship.

In addition, the Attorney General will soon appear before your
Committees to present his recommendations for needed additional legal
weapons with which to combat subversion in our country and to deal with
the question of claimed immunity.

II. STRONG ECONOMY

I turn now to the second great purpose of our government: Along with the
protection of freedom, the maintenance of a strong and growing economy.

The American economy is one of the wonders of the world. It undergirds
our international position, our military security, and the standard of
living of every citizen. This Administration is determined to keep our
economy strong and to keep it growing.

At this moment we are in transition from a wartime to a peacetime
economy. I am confident that we can complete this transition without
serious interruption in our economic growth. But we shall not leave this
vital matter to chance. Economic preparedness is fully as important to
the nation as military preparedness.

Subsequent special messages and the economic report on January 28 will
set forth plans of the Administration and its recommendations for
Congressional action. These will include flexible credit and debt
management policies; tax measures to stimulate consumer and business
spending; suitable lending, guaranteeing, insuring, and grant-in-aid
activities; strengthened old-age and unemployment insurance measures;
improved agricultural programs; public-works plans laid well in advance;
enlarged opportunities for international trade and investment. This mere
enumeration of these subjects implies the vast amount of study,
coordination, and planning, to say nothing of authorizing legislation,
that altogether make our economic preparedness complete.

If new conditions arise that require additional administrative or
legislative action, the Administration will still be ready. A government
always ready, as this is, to take well-timed and vigorous action, and a
business community willing, as ours is, to plan boldly and with
confidence, can between them develop a climate assuring steady economic
growth.

THE BUDGET

I shall submit to the Congress on January 21 the first budget prepared
by this Administration, for the period July 1, 1954, through June 1955.
This budget is adequate to the current needs of the government. It
recognizes that a Federal budget should be a stabilizing factor in the
economy. Its tax and expenditure programs will foster individual
initiative and economic growth.

Pending the transmittal of my Budget Message, I shall mention here only
a few points about our budgetary situation.

First, one of our initial acts was to revise, with the cooperation of
the Congress, the Budget prepared before this Administration took
office. Requests for new appropriations were greatly reduced. In
addition, the spending level provided in that Budget for the current
fiscal year has been reduced by about $7,000,000,000. In the next fiscal
year we estimate a further reduction in expenditures of more than
$5,000,000,000. This will reduce the spending level over the two fiscal
years by more than $12,000,000,000. We are also reducing further our
requests for new appropriations.

Second, despite the substantial loss of revenue in the coming fiscal
year, resulting from tax reductions now in effect and tax adjustments
which I shall propose, our reduced spending will move the new budget
closer to a balance.

Third, by keeping new appropriation requests below estimated revenues,
we continue to reduce the tremendous accumulation of unfinanced
obligations incurred by the Government under past appropriations.

Fourth, until those claims on our Government's revenues are further
reduced, the growth in the public debt cannot be entirely stopped.
Because of this--because the government's bills have to be paid every
month, while the tax money to pay them comes in with great unevenness
within the fiscal year--and because of the need for flexibility to
manage this enormous debt, I find it necessary to renew my request for
an increase in the statutory debt limit.

TAXES

The new budget provides for a lower level of taxation than has prevailed
in preceding years. Six days ago individual income taxes were reduced
and the excess profits tax expired. These tax reductions are justified
only because of the substantial reductions we already have made and are
making in governmental expenditures. As additional reductions in
expenditures are brought gradually but surely into sight, further
reductions in taxes can and will be made. When budget savings and sound
governmental financing are assured, tax burdens should be reduced so
that taxpayers may spend their own money in their own way.

While we are moving toward lower levels of taxation we must thoroughly
revise our whole tax system. The groundwork for this revision has
already been laid by the Committee on Ways and Means of the House of
Representatives, in close consultation with the Department of the
Treasury. We should now remove the more glaring tax inequities,
particularly on small taxpayers; reduce restraints on the growth of
small business; and make other changes that will encourage initiative,
enterprise and production. Twenty-five recommendations toward these ends
will be contained in my budget message.

Without attempting to summarize these manifold reforms, I can here
illustrate their tendency. For example, we propose more liberal tax
treatment for dependent children who work, for widows or widowers with
dependent children, and for medical expenses. For the business that
wants to expand or modernize its plant, we propose liberalized tax
treatment of depreciation, research and development expenses, and
retained earnings.

Because of the present need for revenue the corporation income tax
should be kept at the current rate of 52% for another year, and the
excise taxes scheduled to be reduced on April first, including those on
liquor, tobacco, gasoline and automobiles, should be continued at
present rates.

Immediate extension of the Renegotiation Act of 1951 is also needed to
eliminate excessive profits and to prevent waste of public funds in the
purchase of defense materials.

AGRICULTURE

The well being of our 160 million people demands a stable and prosperous
agriculture. Conversely, every farmer knows he cannot prosper unless all
America prospers. As we seek to promote increases in our standard of
living, we must be sure that the farmer fairly shares in that increase.
Therefore, a farm program promoting stability and prosperity in all
elements of our agriculture is urgently needed.

Agricultural laws now in effect successfully accomplished their wartime
purpose of encouraging maximum production of many crops. Today,
production of these crops at such levels far exceeds present demand. Yet
the laws encouraging such production are still in effect. The storage
facilities of the Commodity Credit Corporation bulge with surplus stocks
of dairy products, wheat, cotton, corn, and certain vegetable oils; and
the Corporation's presently authorized borrowing
authority--$6,750,000,000--is nearly exhausted. Some products, priced
out of domestic markets, and others, priced out of world markets, have
piled up in government hands. In a world in which millions of people are
hungry, destruction of food would, of course, be unconscionable. Yet
surplus stocks continue to threaten the market and in spite of the
acreage controls authorized by present law, surpluses will continue to
accumulate.

We confront two alternatives. The first is to impose still greater
acreage reductions for some crops and apply rigid Federal controls over
the use of the diverted acres. This will regiment the production of
every basic agricultural crop. It will place every producer of those
crops under the domination and control of the Federal government in
Washington. This alternative is contrary to the fundamental interests,
not only of the farmer, but of the Nation as a whole. Nor is it a real
solution to the problem facing us.

The second alternative is to permit the market price for these
agricultural products gradually to have a greater influence on the
planning of production by farmers, while continuing the assistance of
the government. This is the sound approach. To make it effective,
surpluses existing when the new program begins must be insulated from
the normal channels of trade for special uses. These uses would include
school lunch programs, disaster relief, emergency assistance to foreign
friends, and of particular importance the stockpiling of reserves for a
national emergency.

Building on the agricultural laws of 1948 and 1949, we should establish
a price support program with enough flexibility to attract the
production of needed supplies of essential commodities and to stimulate
the consumption of those commodities that are flooding American markets.
Transition to modernized parity must be accomplished gradually. In no
case should there be an abrupt downward change in the dollar level or in
the percentage level of price supports.

Next Monday I shall transmit to the Congress my detailed recommendations
embodying this approach. They have been developed through the
cooperation of innumerable individuals vitally interested in
agriculture. My special message on Monday will briefly describe the
consultative and advisory processes to which this whole program has been
subjected during the past ten months.

I have chosen this farm program because it will build markets, protect
the consumers' food supply, and move food into consumption instead of
into storage. It is a program that will remove the threat to the farmer
of these overhanging surpluses, a program, also, that will stimulate
production when a commodity is scarce and encourage consumption when
nature is bountiful. Moreover, it will promote the individual freedom,
responsibility, and initiative which distinguish American agriculture.
And, by helping our agriculture achieve full parity in the market, it
promises our farmers a higher and steadier financial return over the
years than any alternative plan.

CONSERVATION

Part of our Nation's precious heritage is its natural resources. It is
the common responsibility of Federal, state, and local governments to
improve and develop them, always working in the closest harmony and
partnership.

All Federal conservation and resource development projects are being
reappraised. Sound projects now under way will be continued. New
projects in which the Federal Government has a part must be economically
sound, with local sharing of cost wherever appropriate and feasible. In
the next fiscal year work will be started on twenty-three projects that
meet these standards. The Federal Government will continue to construct
and operate economically sound flood control, power, irrigation and
water supply projects wherever these projects are beyond the capacity of
local initiative, public or private, and consistent with the needs of
the whole Nation.

Our conservation program will also take into account the important role
played by farmers in protecting our soil resources. I recommend
enactment of legislation to strengthen agricultural conservation and
upstream flood prevention work, and to achieve a better balance with
major flood control structures in the down-stream areas.

Recommendations will be made from time to time for the adoption of:

A uniform and consistent water resources policy;

A revised public lands policy; and

A sound program for safeguarding the domestic production of critical and
strategic metals and minerals.

In addition we shall continue to protect and improve our national
forests, parks, monuments and other natural and historic sites, as well
as our fishery and wildlife resources. I hope that pending legislation
to improve the conservation and management of publicly-owned grazing
lands in national forests will soon be approved by the Congress.

NATIONAL HIGHWAYS

To protect the vital interest of every citizen in a safe and adequate
highway system, the Federal Government is continuing its central role in
the Federal Aid Highway Program. So that maximum progress can be made to
overcome present inadequacies in the Interstate Highway System, we must
continue the Federal gasoline tax at two cents per gallon. This will
require cancellation of the 1/2 cent decrease which otherwise will
become effective April 1st, and will maintain revenues so that an
expanded highway program can be undertaken.

When the Commission on Intergovernmental Relations completes its study
of the present system of financing highway construction, I shall
promptly submit it for consideration by the Congress and the governors
of the states.

POST OFFICE

It is apparent that the substantial savings already made, and to be
made, by the Post Office Department cannot eliminate the postal deficit.
I recommend, therefore, that the Congress approve the bill now pending
in the House of Representatives providing for the adjustment of certain
postal rates. To handle the long term aspects of this, I also recommend
that the Congress create a permanent commission to establish fair and
reasonable postal rates from time to time in the future.

III. HUMAN PROBLEMS

Along with the protection of freedom and maintenance of a strong and
growing economy, this Administration recognizes a third great purpose of
government: concern for the human problems of our citizens. In a modern
industrial society, banishment of destitution and cushioning the shock
of personal disaster on the individual are proper concerns of all levels
of government, including the federal government. This is especially true
where remedy and prevention alike are beyond the individual's capacity.

LABOR AND WELFARE

Of the many problems in this area, those I shall first discuss are of
particular concern to the members of our great labor force, who with
their heads, hearts and hands produce so much of the wealth of our
country.

Protection against the hazards of temporary unemployment should be
extended to some 6 1/2 millions of workers, including civilian Federal
workers, who now lack this safeguard. Moreover, the Secretary of Labor
is making available to the states studies and recommendations in the
fields of weekly benefits, periods of protection and extension of
coverage. The Economic Report will consider the related matter of
minimum wages and their coverage.

The Labor Management Relations Act of 3947 is basically a sound law.
However, six years of experience have revealed that in some respects it
can be improved. On January 11, I shall forward to the Congress
suggestions for changes designed to reinforce the basic objectives of
the Act.

Our basic social security program, the Old-Age and Survivors Insurance
system, to which individuals contribute during their productive years
and receive benefits based on previous earnings, is designed to shield
them from destitution. Last year I recommended extension of the social
insurance system to include more than 10,000,000 additional persons. I
ask that this extension soon be accomplished. This and other major
improvements in the insurance system will bring substantial benefit
increases and broaden the membership of the insurance system, thus
diminishing the need for Federal grants-in-aid for such purposes. A new
formula will therefore be proposed, permitting progressive reduction in
such grants as the need for them declines.

Federal grant-in-aid welfare programs, now based on widely varying
formulas, should be simplified. Concrete proposals on fourteen of them
will be suggested to the appropriate Committees.

The program for rehabilitation of the disabled especially needs
strengthening. Through special vocational training, this program
presently returns each year some 60,000 handicapped individuals to
productive work. Far more disabled people can be saved each year from
idleness and dependence if this program is gradually increased. My more
detailed recommendations on this and the other social insurance problems
I have mentioned will be sent to the Congress on January 14th.

HEALTH

I am flatly opposed to the socialization of medicine. The great need for
hospital and medical services can best be met by the initiative of
private plans. But it is unfortunately a fact that medical costs are
rising and already impose severe hardships on many families. The Federal
Government can do many helpful things and still carefully avoid the
socialization of medicine.

The Federal Government should encourage medical research in its battle
with such mortal diseases as cancer and heart ailments, and should
continue to help the states in their health and rehabilitation programs.
The present Hospital Survey and Construction Act should be broadened in
order to assist in the development of adequate facilities for the
chronically ill, and to encourage the construction of diagnostic
centers, rehabilitation facilities, and nursing homes. The war on
disease also needs a better working relationship between Government and
private initiative. Private and non-profit hospital and medical
insurance plans are already in the field, soundly based on the
experience and initiative of the people in their various communities.

A limited Government reinsurance service would permit the private and
non-profit insurance companies to offer broader protection to more of
the many families which want and should have it. On January 18 I shall
forward to the Congress a special message presenting this
Administration's health program in its detail.

EDUCATION

Youth--our greatest resource--is being seriously neglected in a vital
respect. The nation as a whole is not preparing teachers or building
schools fast enough to keep up with the increase in our population.

The preparation of teachers as, indeed, the control and direction of
public education policy, is a state and local responsibility. However,
the Federal Government should stand ready to assist states which
demonstrably cannot provide sufficient school buildings. In order to
appraise the needs, I hope that this year a conference on education will
be held in each state, culminating in a national conference. From these
conferences on education, every level of government--from the Federal
Government to each local school board--should gain the information with
which to attack this serious problem.

HOUSING

The details of a program to enlarge and improve the opportunities for
our people to acquire good homes will be presented to the Congress by
special message on January 25.

This program will include:

Modernization of the home mortgage insurance program of the Federal
Government;

Redirection of the present system of loans and grants-in-aid to cities
for slum clearance and redevelopment;

Extension of the advantages of insured lending to private credit engaged
in this task of rehabilitating obsolete neighborhoods;

Insurance of long-term, mortgage loans, with small down payment for
low-income families; and, until alternative programs prove more
effective,

Continuation of the public housing program adopted in the Housing Act of
1949.

If the individual, the community, the State and federal governments will
alike apply themselves, every American family can have a decent home.

VETERANS ADMINISTRATION

The internal reorganization of the Veterans Administration is proceeding
with my full approval. When completed, it will afford a single agency
whose services, including medical facilities, will be better adapted to
the needs of those 20,000,000 veterans to whom this Nation owes so much.

SUFFRAGE

My few remaining recommendations all relate to a basic right of our
citizens--that of being represented in the decisions of the government.

I hope that the States will cooperate with the Congress in adopting
uniform standards in their voting laws that will make it possible for
our citizens in the armed forces overseas to vote.

In the District of Columbia the time is long overdue for granting
national suffrage to its citizens and also applying the principle of
local self-government to the Nation's Capital. I urge the Congress to
move promptly in this direction and also to revise District revenue
measures to provide needed public works improvements.

The people of Hawaii are ready for statehood. I renew my request for
this legislation in order that Hawaii may elect its State officials and
its representatives in Washington along with the rest of the country
this fall.

For years our citizens between the ages of 18 and 21 have, in time of
peril, been summoned to fight for America. They should participate in
the political process that produces this fateful summons. I urge
Congress to propose to the States a constitutional amendment permitting
citizens to vote when they reach the age of 18.

CONCLUSION

I want to add one final word about the general purport of these many
recommendations.

Our government's powers are wisely limited by the Constitution; but
quite apart from those limitations, there are things which no government
can do or should try to do.

A government can strive, as ours is striving, to maintain an economic
system whose doors are open to enterprise and ambition--those personal
qualities on which economic growth largely depends. But enterprise and
ambition are qualities which no government can supply. Fortunately no
American government need concern itself on this score; our people have
these qualities in good measure.

A government can sincerely strive for peace, as ours is striving, and
ask its people to make sacrifices for the sake of peace. But no
government can place peace in the hearts of foreign rulers. It is our
duty then to ourselves and to freedom itself to remain strong in all
those ways--spiritual, economic, military--that will give us maximum
safety against the possibility of aggressive action by others.

No government can inoculate its people against the fatal materialism
that plagues our age. Happily, our people, though blessed with more
material goods than any people in history, have always reserved their
first allegiance to the kingdom of the spirit, which is the true source
of that freedom we value above all material things.

But a government can try, as ours tries, to sense the deepest
aspirations of the people, and to express them in political action at
home and abroad. So long as action and aspiration humbly and earnestly
seek favor in the sight of the Almighty, there is no end to America's
forward road; there is no obstacle on it she will not surmount in her
march toward a lasting peace in a free and prosperous world.

The Address as reported from the floor appears in the Congressional
Record (vol. 100, p. 62).

***

State of the Union Address
Dwight D. Eisenhower
January 6, 1955

Mr. President, Mr. Speaker, Members of the Congress:

First, I extend cordial greetings to the 84th Congress. We shall have
much to do together; I am sure that we shall get it done--and, that we
shall do it in harmony and good will.

At the outset, I believe it would be well to remind ourselves of this
great fundamental in our national life: our common belief that every
human being is divinely endowed with dignity and worth and inalienable
rights. This faith, with its corollary--that to grow and flourish people
must be free--shapes the interests and aspirations of every American.

From this deep faith have evolved three main purposes of our Federal
Government:

First, to maintain justice and freedom among ourselves and to champion
them for others so that we may work effectively for enduring peace;

Second, to help keep our economy vigorous and expanding, thus sustaining
our international strength and assuring better jobs, better living,
better opportunities for every citizen;

And third, to concern ourselves with the human problems of our people so
that every American may have the opportunity to lead a healthy,
productive and rewarding life.

Foremost among these broad purposes of government is our support of
freedom, justice and peace.

It is of the utmost importance, that each of us understand the true
nature of the struggle now taking place in the world.

It is not a struggle merely of economic theories, or of forms of
government, or of military power. At issue is the true nature of man.
Either man is the creature whom the Psalmist described as "a little
lower than the angels," crowned with glory and honor, holding "dominion
over the works" of his Creator; or man is a soulless, animated machine
to be enslaved, used and consumed by the state for its own
glorification.

It is, therefore, a struggle which goes to the roots of the human
spirit, and its shadow falls across the long sweep of man's destiny.
This prize, so precious, so fraught with ultimate meaning, is the true
object of the contending forces in the world.

In the past year, there has been progress justifying hope, both for
continuing peace and for the ultimate rule of freedom and justice in the
world. Free nations are collectively stronger than at any time in recent
years.

Just as nations of this Hemisphere, in the historic Caracas and Rio
conferences, have closed ranks against imperialistic Communism and
strengthened their economic ties, so free nations elsewhere have forged
new bonds of unity.

Recent agreements between Turkey and Pakistan have laid a foundation for
increased strength in the Middle East. With our understanding support,
Egypt and Britain, Yugoslavia and Italy, Britain and Iran have resolved
dangerous differences. The security of the Mediterranean has been
enhanced by an alliance among Greece, Turkey and Yugoslavia. Agreements
in Western Europe have paved the way for unity to replace past divisions
which have undermined Europe's economic and military vitality. The
defense of the West appears likely at last to include a free, democratic
Germany participating as an equal in the councils of NATO.

In Asia and the Pacific, the pending Manila Pact supplements our
treaties with Australia, New Zealand, the Philippines, Korea and Japan
and our prospective treaty with the Republic of China. These pacts stand
as solemn warning that future military aggression and subversion against
the free nations of Asia will meet united response. The Pacific Charter,
also adopted at Manila, is a milestone in the development of human
freedom and self-government in the Pacific area.

Under the auspices of the United Nations, there is promise of progress
in our country's plan for the peaceful use of atomic energy.

Finally, today the world is at peace. It is, to be sure, an secure
peace. Yet all humanity finds hope in the simple fact that for an
appreciable time there has been no active major battlefield on earth.
This same fact inspires us to work all the more effectively with other
nations for the well-being, the freedom, the dignity, of every human on
earth.

These developments are heartening indeed, and we are hopeful of
continuing progress. But sobering problems remain.

The massive military machines and ambitions of the Soviet-Communist bloc
still create uneasiness in the world. All of us are aware of the
continuing reliance of the Soviet Communists on military force, of the
power of their weapons, of their present resistance to realistic
armament limitation, and of their continuing effort to dominate or
intimidate free nations on their periphery. Their steadily growing power
includes an increasing strength in nuclear weapons. This power, combined
with the proclaimed intentions of the Communist leaders to communize the
world, is the threat confronting us today.

To protect our nations and our peoples from the catastrophe of a nuclear
holocaust, free nations must maintain countervailing military power to
persuade the Communists of the futility of seeking their ends through
aggression. If Communist rulers understand that America's response to
aggression will be swift and decisive--that never shall we buy peace at
the expense of honor or faith--they will be powerfully deterred from
launching a military venture engulfing their own peoples and many others
in disaster. This, of course, is merely world stalemate. But in this
stalemate each of us may and must exercise his high duty to strive in
every honorable way for enduring peace.

The military threat is but one menace to our freedom and security. We
must not only deter aggression; we must also frustrate the effort of
Communists to gain their goals by subversion. To this end, free nations
must maintain and reinforce their cohesion, their internal security,
their political and economic vitality, and their faith in freedom.

In such a world, America's course is dear:

We must tirelessly labor to make the peace more just and durable.

We must strengthen the collective defense under the United Nations
Charter and gird ourselves with sufficient military strength and
productive capacity to discourage resort to war and protect our nation's
vital interests.

We must continue to support and strengthen the United Nations. At this
very moment, by vote of the United Nations General Assembly, its
Secretary-General is in Communist China on a mission of deepest concern
to all Americans: seeking the release of our never-to-be-forgotten
American aviators and all other United Nations prisoners wrongfully
detained by the Communist regime.

We must also encourage the efforts being made in the United Nations to
limit armaments and to harness the atom to peaceful rise.

We must expand international trade and investment and assist friendly
nations whose own best efforts are still insufficient to provide the
strength essential to the security of the free world.

We must be willing to use the processes of negotiation whenever they
will advance the cause of just and secure peace to which the United
States and other free nations are dedicated.

In respect to all these matters, we must, through a vigorous information
program, keep the peoples of the world truthfully advised of our actions
and purposes. This problem has been attacked with new vigor during the
past months. I urge that the Congress give its earnest consideration to
the great advantages that can accrue to our country through the
successful operations of this program.

We must also carry forward our educational exchange program. This
sharing of knowledge and experience between our citizens and those of
free countries is a powerful factor in the development and maintenance
of true partnership among free peoples.

To advance these many efforts, the Congress must act in this session on
appropriations, legislation, and treaties. Today I shall mention
especially our foreign economic and military programs.

The recent economic progress in many free nations has been most
heartening. The productivity of labor and the production of goods and
services are increasing in ever-widening areas. There is a growing will
to improve the living standards of all men. This progress is important
to all our people. It promises us allies who are strong and
self-reliant; it promises a growing world market for the products of our
mines, our factories, and our farms.

But only through steady effort can we hope to continue this progress.
Barriers still impede trade and the flow of capital needed to develop
each nation's human and material resources. Wise reduction of these
barriers is a long-term objective of our foreign economic policy--a
policy of an evolutionary and selective nature, assuring broad benefits
to our own and other peoples.

We must gradually reduce certain tariff obstacles to trade. These
actions should, of course, be accompanied by a similar lowering of trade
barriers by other nations, so that we may move steadily toward greater
economic advantage for all. We must further simplify customs
administration and procedures. We must facilitate the flow of capital
and continue technical assistance, both directly and through the United
Nations, to less developed countries to strengthen their independence
and raise their living standards. Many another step must be taken in and
among the nations of the free world to release forces of private
initiative. In our own nation, these forces have brought strength and
prosperity; once released, they will generate rising incomes in these
other countries with which to buy the products of American industry,
labor and agriculture.

On January 10, by special message, I shall submit specific
recommendations for carrying forward the legislative phases of our
foreign economic policy.

Our many efforts to build a better world include the maintenance of our
military strength. This is a vast undertaking. Major national security
programs consume two-thirds of the entire Federal budget. Over four
million Americans--servicemen and civilians--are on the rolls of the
defense establishment. During the past two years, by eliminating
duplication and overstaffing, by improved procurement and inventory
controls, and by concentrating on the essentials, many billions of
dollars have been saved in our defense activities. I should like to
mention certain fundamentals underlying this vast program.

First, a realistic limitation of armaments and an enduring, just peace
remain our national goals; we maintain powerful military forces because
there is no present alternative--forces designed for deterrent and
defensive purposes alone but able instantly to strike back with
destructive power in response to an attack.

Second, we must stay alert to the fact that undue reliance on one weapon
or preparation for only one kind of warfare simply invites an enemy to
resort to another. We must, therefore, keep in our armed forces balance
and flexibility adequate for our purposes and objectives.

Third, to keep our armed forces abreast of the advances of science, our
military planning must be flexible enough to utilize the new weapons and
techniques which flow ever more speedily from our research and
development programs. The forthcoming military budget therefore
emphasizes modern airpower in the Air Force, Navy and Marine Corps and
increases the emphasis on new weapons, especially those of rapid and
destructive striking power. It assures the maintenance of effective,
retaliatory force as the principal deterrent to overt aggression. It
accelerates the continental defense program and the build-up of ready
military reserve forces. It continues a vigorous program of stockpiling
strategic and critical materials and strengthening our mobilization
base. The budget also contemplates the strategic concentration of our
strength through redeployment of certain forces. It provides for
reduction of forces in certain categories and their expansion in others,
to fit them to the military realities of our time. These emphases in our
defense planning have been made at my personal direction after long and
thoughtful study. In my judgment, they will give our nation a defense
accurately adjusted to the national need.

Fourth, pending a world agreement on armament limitation, we must
continue to improve and expand our supplies of nuclear weapons for our
land, naval and air forces, while, at the same time, continuing our
encouraging progress in the peaceful use of atomic power.

And fifth, in the administration of these costly programs, we must
demand the utmost in efficiency and ingenuity. We must assure our people
not only of adequate protection but also of a defense that can be
carried forward from year to year until the threat of aggression has
disappeared.

To help maintain this kind of armed strength and improve its efficiency,
I must urge the enactment of several important measures in this session.

The first concerns the selective service act which expires next June
30th. For the foreseeable future, our standing forces must remain much
larger than voluntary methods can sustain. We must, therefore, extend
the statutory authority to induct men for two years of military service.

The second kind of measure concerns the rapid turnover of our most
experienced servicemen. This process seriously weakens the combat
readiness of our armed forces and is exorbitantly expensive. To
encourage more trained servicemen to remain in uniform, I shall, on the
thirteenth of this month, propose a number of measures to increase the
attractions of a military career. These measures will include more
adequate medical care for dependents, survivors' benefits, more and
better housing, and selective adjustments in military pay and other
allowances.

And third--also on January 13--I shall present a program to rebuild and
strengthen the civilian components of our armed forces. This is a
comprehensive program, designed to make better use of our manpower of
military age. Because it will go far in assuring fair and equitable
participation in military training and service, it is of particular
importance to our combat veterans. In keeping with the historic military
policy of our Republic, this program is designed to build and maintain
powerful civilian reserves immediately capable of effective military
service in an emergency in lieu of maintaining active duty forces in
excess of the nation's immediate need.

Maintenance of an effective defense requires continuance of our
aggressive attack on subversion at home. In this effort we have, in the
past two years, made excellent progress. FBI investigations have been
powerfully reinforced by a new Internal Security Division in the
Department of Justice; the security activities of the Immigration and
Naturalization Service have been revitalized; an improved and
strengthened security system is in effect throughout the government; the
Department of Justice and the FBI have been armed with effective new
legal weapons forged by the 83rd Congress.

We shall continue to ferret out and to destroy Communist subversion.

We shall, in the process, carefully preserve our traditions and the
basic rights of our citizens.

Our civil defense program is also a key element in the protection of our
country. We are developing cooperative methods with State Governors,
Mayors, and voluntary citizen groups, as well as among Federal agencies,
in building the civil defense organization. Its significance in time of
war is obvious; its swift assistance in disaster areas last year proved
its importance in time of peace.

An industry capable of rapid expansion and essential materials and
facilities swiftly available in time of emergency are indispensable to
our defense. I urge, therefore, a two-year extension of the Defense
Production Act and Title II of the First War Powers Act of 1941. These
are cornerstones of our program for the development and maintenance of
an adequate mobilization base. At this point, I should like to make this
additional observation. Our quest for peace and freedom necessarily
presumes that we who hold positions of public trust must rise above self
and section--that we must subordinate to the general good our partisan,
our personal pride and prejudice. Tirelessly, with united purpose, we
must fortify the material and spiritual foundations of this land of
freedom and of free nations throughout the world. As never before, there
is need for unhesitating cooperation among the branches of our
government.

At this time the executive and legislative branches are under the
management of different political parties. This fact places both parties
on trial before the American people.

In less perilous days of the past, division of governmental
responsibility among our great parties has produced a paralyzing
indecision. We must not let this happen in our time. We must avoid a
paralysis of the will for peace and international security.

In the traditionally bipartisan areas--military security and foreign
relations--I can report to you that I have already, with the leaders of
this Congress, expressed assurances of unreserved cooperation. Yet, the
strength of our country requires more than mere maintenance of military
strength and success in foreign affairs; these vital matters are in turn
dependent upon concerted and vigorous action in a number of supporting
programs. I say, therefore, to the 84th Congress:

In all areas basic to the strength of America, there will be--to the
extent I can insure them--cooperative, constructive relations between
the Executive and Legislative Branches of this government. Let the
general good be our yardstick on every great issue of our time.

Our efforts to defend our freedom and to secure a just peace are, of
course, inseparable from the second great purpose of our government: to
help maintain a strong, growing economy--an economy vigorous and free,
in which there are ever-increasing opportunities, just rewards for
effort, and a stable prosperity that is widely shared.

In the past two years, many important governmental Actions helped our
economy adjust to conditions of peace; these and other actions created a
climate for renewed economic growth. Controls were removed from wages,
prices and materials. Tax revisions encouraged increased private
spending and employment. Federal expenditures were sharply reduced,
making possible a record tax cut. These actions, together with flexible
monetary and debt management policies, helped to halt inflation and
stabilize the value of the dollar. A program of cooperation and
partnership in resource development was begun. Social security and
unemployment insurance laws were broadened and strengthened. New laws
started the long process of balancing farm production with farm markets.
Expanded shipbuilding and stockpiling programs strengthened key sectors
of the economy, while improving our mobilization base. A comprehensive
new housing law brought impressive progress in an area fundamental to
our economic strength and closed loopholes in the old laws permitting
dishonest manipulation. Many of these programs are just beginning to
exert their main stimulating effect upon the economy generally and upon
specific communities and industries throughout the country.

The past year--1954--was one of the most prosperous years in our
history. Business activity now surges with new strength. Production is
rising. Employment is high. Toward the end of last year average weekly
wages in manufacturing were higher than ever before. Personal income
after taxes is at a record level. So is consumer spending. Construction
activity is reaching new peaks. Export demand for our goods is strong.
State and local government expenditures on public works are rising.
Savings are high, and credit is readily available.

So, today, the transition to a peacetime economy is largely behind us.

The economic outlook is good.

The many promising factors I have mentioned do not guarantee sustained
economic expansion; however, they do give us a strong position from
which to carry forward our economic growth. If we as a people act
wisely, within ten years our annual national output can rise from its
present level of about $360 billion to $500 billion, measured in dollars
of stable buying power.

My Budget Message on January 17, the Economic Report on the 20th of this
month, and several special messages will set forth in detail major
programs to foster the growth of our economy and to protect the
integrity of the people's money. Today I shall discuss these programs
only in general terms.

Government efficiency and economy remain essential to steady progress
toward a balanced budget. More than ten billion dollars were cut from
the spending program proposed in the budget of January 9, 1953.
Expenditures of that year were six and a half billion below those of the
previous year. In the current fiscal year, government spending will be
nearly four and a half billion dollars less than in the fiscal year
which ended last June 30. New spending authority has been held below
expenditures, reducing government obligations accumulated over the
years.

Last year we had a large tax cut and, for the first time in seventy-five
years a basic revision of Federal tax laws. It is now clear that defense
and other essential government costs must remain at a level precluding
further tax reductions this year. Although excise and corporation income
taxes must, therefore, be continued at their present rates, further tax
cuts will be possible when justified by lower expenditures and by
revenue increases arising from the nation's economic growth. I am
hopeful that such reductions can be made next year.

At the foundation of our economic growth are the raw materials and
energy produced from our minerals and fuels, lands and forests, and
water resources. With respect to them, I believe that the nation must
adhere to three fundamental policies: first, to develop, wisely use and
conserve basic resources from generation to generation; second, to
follow the historic pattern of developing these resources primarily by
private citizens under fair provisions of law, including restraints for
proper conservation; and third, to treat resource development as a
partnership undertaking--a partnership in which the participation of
private citizens and State and local governments is as necessary as
Federal participation.

This policy of partnership and cooperation is producing good results,
most immediately noticeable in respect to water resources. First, it has
encouraged local public bodies and private citizens to plan their own
power sources. Increasing numbers of applications to the Federal Power
Commission to conduct surveys and prepare plans for power development,
notably in the Columbia River Basin, are evidence of local response.

Second, the Federal Government and local and private organizations have
been encouraged to coordinate their developments. This is important
because Federal hydroelectric developments supply but a small fraction
of the nation's power needs. Such partnership projects as Priest Rapids
in Washington, the Coosa River development in Alabama, and Markham Ferry
in Oklahoma already have the approval of the Congress. This year
justifiable projects of a similar nature will again have Administration
support.

Third, the Federal Government must shoulder its own partnership
obligations by undertaking projects of such complexity and size that
their success requires Federal development. In keeping with this
principle, I again urge the Congress to approve the development of the
Upper Colorado River Basin to conserve and assure better use of precious
water essential to the future of the West.

In addition, the 1956 budget will recommend appropriations to start six
new reclamation and more than thirty new Corps of Engineers projects of
varying size. Going projects and investigations of potential new
resource developments will be continued.

Although this partnership approach is producing encouraging results, its
full success requires a nation-wide comprehensive water resources policy
firmly based in law. Such a policy is under preparation and when
completed will be submitted to the Congress.

In the interest of their proper conservation, development and use,
continued vigilance will be maintained over our fisheries, wildlife
resources, the national parks and forests, and the public lands; and we
shall continue to encourage an orderly development of the nation's
mineral resources.

A modern, efficient highway system is essential to meet the needs of our
growing population, our expanding economy, and our national security. We
are accelerating our highway improvement program as rapidly as possible
under existing State and Federal laws and authorizations. However, this
effort will not in itself assure our people of an adequate highway
system. On my recommendation, this problem has been carefully considered
by the Conference of State Governors and by a special Advisory Committee
on a National Highway Program, composed of leading private citizens. I
have received the recommendations of the Governors' Conference and will
shortly receive the views of the special Advisory Committee. Aided by
their findings, I shall submit on January 27th detailed recommendations
which will meet our most pressing national highway needs.

In further recognition of the importance of transportation to our
economic strength and security, the Administration, through a Cabinet
committee, is thoroughly examining existing Federal transportation
policies to determine their effect on the adequacy of transportation
services. This is the first such comprehensive review directly
undertaken by the Executive Branch of the government in modern times. We
are not only examining major problems facing the various modes of
transport; we are also studying closely the inter-relationships of
civilian and government requirements for transportation. Legislation
will be recommended to correct policy deficiencies which we may find.

The nation's public works activities are tremendous in scope. It is
expected that more than $ 12 billion will be expended in 1955 for the
development of land, water and other resources; control of floods, and
navigation and harbor improvements; construction of roads, schools, and
municipal water supplies, and disposal of domestic and industrial
wastes. Many of the Federal, State and local agencies responsible for
this work are, in their separate capacities, highly efficient. But
public works activities are closely inter-related and have a substantial
influence on the growth of the country. Moreover, in times of
threatening economic contraction, they may become a valuable sustaining
force. To these ends, efficient planning and execution of the nation's
public works require both the coordination of Federal activities and
effective cooperation with State and local governments.

The Council of Economic Advisers, through its public works planning
section, has made important advances during the past year in effecting
this coordination and cooperation. In view of the success of these
initial efforts, and to give more emphasis and continuity to this
essential coordination, I shall request the Congress to appropriate
funds for the support of an Office of Coordinator of Public Works in the
Executive Office of the President.

A most significant element in our growing economy is an agriculture that
is stable, prosperous and free. The problems of our agriculture have
evolved over many years and cannot be solved overnight; nevertheless,
governmental actions last year hold great promise of fostering a better
balance between production and markets and, consequently, a better and
more stable income for our farmers.

Through vigorous administration and through new authority provided by
the 83rd Congress, surplus farm products are now moving into
consumption. From February 1953 through November 1954, the rate of
increase of government-held surpluses has been reduced by our moving
into use more than 2.3 billion dollars' worth of government-owned farm
commodities; this amount is equal to more than seven percent of a year's
production of all our farms and ranches. Domestic consumption remains
high, and farm exports will be higher than last year. As a result of the
flexibility provided by the Agricultural Act of 1954, we can move toward
less restrictive acreage controls.

Thus, farm production is gradually adjusting to markets, markets are
being expanded, and stocks are moving into use. We can now look forward
to an easing of the influences depressing farm prices, to reduced
government expenditures for purchase of surplus products, and to less
Federal intrusion into the lives and plans of our farm people.
Agricultural programs have been redirected toward better balance,
greater stability and sustained prosperity. We are headed in the right
direction. I urgently recommend to the Congress that we continue
resolutely on this road.

Greater attention must be directed to the needs of low-income farm
families. Twenty-eight per cent of our farm-operator families have net
cash incomes of less than $1,000 per year. Last year, at my request,
careful studies were made of the problems of these farm people. I shall
later submit recommendations designed to assure the steady alleviation
of their most pressing concerns.

Because drought also remains a serious agricultural problem, I shall
recommend legislation to strengthen Federal disaster assistance
programs. This legislation will prescribe an improved appraisal of need,
better adjustment of the various programs to local conditions, and a
more equitable sharing of costs between the States and the Federal
Government.

The prosperity of our small business enterprises is an indispensable
element in the maintenance of our economic strength. Creation of the
Small Business Administration and recently enacted tax laws facilitating
small business expansion are but two of many important steps we have
taken to encourage our smaller enterprises. I recommend that the
Congress extend the Small Business Act of 1953 which is due to expire
next June.

We come now to the third great purpose of our government-its concern for
the health, productivity and well-being of all our people.

Every citizen wants to give full expression to his God-given talents and
abilities and to have the recognition and respect accorded under our
religious and political traditions. Americans also want a good material
standard of living--not simply to accumulate possessions, but to fulfill
a legitimate aspiration for an environment in which their families may
live meaningful and happy lives. Our people are committed, therefore, to
the creation and preservation of opportunity for every citizen to lead a
more rewarding life. They are equally committed to the alleviation of
misfortune and distress among their fellow citizens.

The aspirations of most of our people can best be fulfilled through
their own enterprise and initiative, without government interference.
This Administration, therefore, follows two simple rules: first, the
Federal Government should perform an essential task only when it cannot
otherwise be adequately performed; and second, in performing that task,
our government must not impair the self-respect, freedom and incentive
of the individual. So long as these two rules are observed, the
government can fully meet its obligation without creating a dependent
population or a domineering bureaucracy.

During the past two years, notable advances were made in these functions
of government. Protection of old-age and survivors' insurance was
extended to an additional ten million of our people, and the benefits
were substantially increased. Legislation was enacted to provide
unemployment insurance protection to some four million additional
Americans. Stabilization of living costs and the halting of inflation
protected the value of pensions and savings. A broad program now helps
to bring good homes within the reach of the great majority of our
people. With the States, we are providing rehabilitation facilities and
more clinics, hospitals, and nursing homes for patients with chronic
illnesses. Also with the States, we have begun a great and fruitful
expansion in the restoration of disabled persons to employment and
useful lives. In the areas of Federal responsibility, we have made
historic progress in eliminating from among our people demeaning
practices based on race or color.

All of us may be proud of these achievements during the past two years.
Yet essential Federal tasks remain to be done.

As part of our efforts to provide decent, safe and sanitary housing for
low-income families, we must carry forward the housing program
authorized during the 83rd Congress. We must also authorize contracts
for a firm program of 35,000 additional public housing units in each of
the next two fiscal years. This program will meet the most pressing
obligations of the Federal Government into the 1958 fiscal year for
planning and building public housing. By that time the private building
industry, aided by the Housing Act of 1954, will have had the
opportunity to assume its full role in providing adequate housing for
our low income families.

The health of our people is one of our most precious assets. Preventable
sickness should be prevented; knowledge available to combat disease and
disability should be fully used. Otherwise, we as a people are guilty
not only of neglect of human suffering but also of wasting our national
strength.

Constant advances in medical care are not available to enough of our
citizens. Clearly our nation must do more to reduce the impact of
accident and disease. Two fundamental problems confront us: first, high
and ever-rising costs of health services; second, serious gaps and
shortages in these services.

By special message on January 24, I shall propose a coordinated program
to strengthen and improve existing health services. This program will
continue to reject socialized medicine. It will emphasize individual and
local responsibility. Under it the Federal Government will neither
dominate nor direct, but serve as a helpful partner. Within this
framework, the program can be broad in scope.

My recommendations will include a Federal health reinsurance service to
encourage the development of more and better voluntary health insurance
coverage by private organizations. I shall also recommend measures to
improve the medical care of that group of our citizens who, because of
need, receive Federal-State public assistance. These two proposals will
help more of our people to meet the costs of health services.

To reduce the gaps in these services, I shall propose:

New measures to facilitate construction of needed health facilities and
help reduce shortages of trained health personnel;

Vigorous steps to combat the misery and national loss involved in mental
illness;

Improved services for crippled children and for maternal and child
health;

Better consumer protection under our existing pure food and drug laws;
and, finally,

Strengthened programs to combat the increasingly serious pollution of
our rivers and streams and the growing problem of air pollution.

These measures together constitute a comprehensive program holding rich
promise for better health for all of our people.

Last year's expansion of social security coverage and our new program of
improved medical care for public assistance recipients together suggest
modification of the formula for Federal sharing in old age assistance
payments. I recommend modification of the formula where such payments
will, in the future, supplement benefits received under the old age and
survivors insurance system.

It is the inalienable right of every person, from childhood on, to have
access to knowledge. In our form of society, this right of the
individual takes on a special meaning, for the education of all our
citizens is imperative to the maintenance and invigoration of America's
free institutions.

Today, we face grave educational problems. Effective and up-to-date
analyses of these problems and their solutions are being carried forward
through the individual State conferences and the White House Conference
to be completed this year.

However, such factors as population growth, additional responsibilities
of schools, and increased and longer school attendance have produced an
unprecedented classroom shortage. This shortage is of immediate concern
to all of our people. Positive, affirmative action must be taken now.

Without impairing in any way the responsibilities of our States,
localities, communities, or families, the Federal government can and
should serve as an effective-catalyst in dealing with this problem. I
shall forward a special message to the Congress on February 15,
presenting an affirmative program dealing with this shortage.

To help the States do a better and more timely job, we must strengthen
their resources for preventing and dealing with juvenile delinquency. I
shall propose Federal legislation to assist the States to promote
concerted action in dealing with this nationwide problem. I shall carry
forward the vigorous efforts of the Administration to improve the
international control of the traffic in narcotics and, in cooperation
with State and local agencies, to combat narcotic addiction in our
country.

I should like to speak now of additional matters of importance to all
our people and especially to our wage earners.

During the past year certain industrial changes and the readjustment of
the economy to conditions of peace brought unemployment and other
difficulties to various localities and industries. These problems are
engaging our most earnest attention. But for the overwhelming majority
of our working people, the past year has meant good jobs. Moreover, the
earnings and savings of our wage earners are no longer depreciating in
value. Because of cooperative relations between labor and management,
fewer working days were lost through strikes in 1954 than in any year in
the past decade.

The outlook for our wage earners can be made still more promising by
several legislative actions.

First, in the past five years we have had economic growth which will
support an increase in the Federal minimum wage. In the light of present
economic conditions, I recommend its increase to ninety cents an hour. I
also recommend that many others, at present excluded, be given the
protection of a minimum wage.

Second, I renew my recommendation of last year for amendment of the
Labor Management Relations Act of 1947 to further the basic objectives
of this statute. I especially call to the attention of the Congress
amendments dealing with the right of economic strikers to vote in
representation elections and the need for equalizing the obligation
under the Act to file disclaimers of Communist affiliation.

Third, the Administration will propose other important measures
including occupational safety, workmen's compensation for longshoremen
and harbor workers, and the "Eight Hour Laws" applicable to Federal
contractors. Legislation will also be proposed respecting
nonoccupational disability insurance and unemployment compensation in
the District of Columbia.

In considering human needs, the Federal Government must take special
responsibility for citizens in its direct employ. On January 11 I shall
propose a pay adjustment plan for civilian employees outside the Postal
Field Service to correct inequities and increase individual pay rates. I
shall also recommend voluntary health insurance on a contributory basis
for Federal employees and their dependents. In keeping with the Group
Life Insurance Act passed in the 83rd Congress, this protection should
be provided on the group insurance principle and purchased from private
facilities. Also on January 11 I shall recommend a modern pay plan,
including pay increases, for postal field employees. As part of this
program, and to carry forward our progress toward elimination of the
large annual postal deficit. I shall renew my request for an increase in
postal rates. Again I urge that in the future the fixing of rates be
delegated to an impartial, independent body.

More adequate training programs to equip career employees of the
government to render improved public service will be recommended, as
will improvements in the laws affecting employees serving on foreign
assignments.

Needed improvements in survivor, disability, and retirement benefits for
Federal civilian and military personnel have been extensively considered
by the Committee on Retirement Policy for Federal personnel. The
Committee's proposals would strengthen and improve benefits for our
career people in government, and I endorse their broad objectives. Full
contributory coverage under old-age and survivors' insurance should be
made available to all Federal personnel, just as in private industry.
For career military personnel, the protection of the old-age and
survivors' insurance system would be an important and long-needed
addition, especially to their present unequal and inadequate
survivorship protection. The military retirement pay system should
remain separate and unchanged. Certain adjustments in the present
civilian personnel retirement systems will be needed to reflect the
additional protection of old-age and survivors' insurance. However,
these systems also are a basic part of a total compensation and should
be separately and independently retained.

I also urge the Congress to approve a long overdue increase in the
salaries of Members of the Congress and of the Federal judiciary to a
level commensurate with their heavy responsibilities.

Our concern for the individual in our country requires that we consider
several additional problems.

We must continue our program to help our Indian citizens improve their
lot and make their full contribution to national life. Two years ago I
advised the Congress of injustices under existing immigration laws.
Through humane administration, the Department of Justice is doing what
it legally can to alleviate hardships. Clearance of aliens before
arrival has been initiated, and except for criminal offenders, the
imprisonment of aliens awaiting admission or deportation has been
stopped. Certain provisions of law, however, have the effect of
compelling action in respect to aliens which are inequitable in some
instances and discriminatory in others. These provisions should be
corrected in this session of the Congress.

As the complex problems of Alaska are resolved, that Territory should
expect to achieve statehood. In the meantime, there is no justification
for deferring the admission to statehood of Hawaii. I again urge
approval of this measure.

We have three splendid opportunities to demonstrate the strength of our
belief in the right of suffrage. First, I again urge that a
Constitutional amendment be submitted to the States to reduce the voting
age for Federal elections. Second, I renew my request that the principle
of self-government be extended and the right of suffrage granted to the
citizens of the District of Columbia. Third, I again recommend that we
work with the States to preserve the voting fights of citizens in the
nation's service overseas.

In our determination to keep faith with those who in the past have met
the highest call of citizenship, we now have under study the system of
benefits for veterans and for surviving dependents of deceased veterans
and servicemen. Studies will be undertaken to determine the need for
measures to ease the readjustment to civilian life of men required to
enter the armed forces for two years of service.

In the advancement of the various activities which will make our
civilization endure and flourish, the Federal Government should do more
to give official recognition to the importance of the arts and other
cultural activities. I shall recommend the establishment of a Federal
Advisory Commission on the Arts within the Department of Health,
Education and Welfare, to advise the Federal Government on ways to
encourage artistic endeavor and appreciation. I shall also propose that
awards of merit be established whereby we can honor our fellow citizens
who make great contribution to the advancement of our civilization.

Every citizen rightly expects efficient and economical administration of
these many government programs I have outlined today. I strongly
recommend extension of the Reorganization Act and the law establishing
the Commission on Intergovernmental Relations, both of which expire this
spring. Thus the Congress will assure continuation of the excellent
progress recently made in improving government organization and
administration. In this connection we are looking forward with great
interest to the reports which will soon be going to the Congress from
the Commission on Organization of the Executive Branch of the
Government. I am sure that these studies, made under the chairmanship of
former President Herbert Hoover with the assistance of more than two
hundred distinguished citizens, will be of great value in paving the way
toward more efficiency and economy in the government.

And now, I return to the point at which I began--the faith of our
people.

The many programs here summarized are, I believe, in full keeping with
their needs, interests and aspirations. The obligations upon us are
clear:

To labor earnestly, patiently, prayerfully, for peace, for freedom, for
justice, throughout the world;

To keep our economy vigorous and free, that our people may lead fuller,
happier lives;

To advance, not merely by our words but by our acts, the determination
of our government that every citizen shall have opportunity to develop
to his fullest capacity.

As we do these things, before us is a future filled with opportunity and
hope. That future will be ours if in our time we keep alive the
patience, the courage, the confidence in tomorrow, the deep faith, of
the millions who, in years past, made and preserved us this nation.

A decade ago, in the death and desolation of European battlefields, I
saw the courage and resolution, I felt the inspiration, of American
youth. In these young men I felt America's buoyant confidence and
irresistible will-to-do. In them I saw, too, a devout America, humble
before God.

And so, I know with all my heart--and I deeply believe that all
Americans know--that, despite the anxieties of this divided world, our
faith, and the cause in which we all believe, will surely prevail.

The address as reported from the floor appears in the Congressional
Record (vol. 101, p. 94).

***

State of the Union Address
Dwight D. Eisenhower
January 5, 1956

To the Congress of the United States:

The opening of this new year must arouse in us all grateful thanks to a
kind Providence whose protection has been ever present and whose bounty
has been manifold and abundant. The State of the Union today
demonstrates what can be accomplished under God by a free people; by
their vision, their understanding of national problems, their
initiative, their self-reliance, their capacity for work--and by their
willingness to sacrifice whenever sacrifice is needed.

In the past three years, responding to what our people want their
Government to do, the Congress and the Executive have done much in
building a stronger, better America. There has been broad progress in
fostering the energies of our people, in providing greater opportunity
for the satisfaction of their needs, and in fulfilling their demands for
the strength and security of the Republic.

Our country is at peace. Our security posture commands respect. A
spiritual vigor marks our national life. Our economy, approaching the
400 billion dollar mark, is at an unparalleled level of prosperity. The
national income is more widely and fairly distributed than ever before.
The number of Americans at work has reached an all-time high. As a
people, we are achieving ever higher standards of living--earning more,
producing more, consuming more, building more and investing more than
ever before.

Virtually all sectors of our society are sharing in these good times.
Our farm families, if we act wisely, imaginatively and promptly to
strengthen our present farm programs, can also look forward to sharing
equitably in the prosperity they have helped to create.

War in Korea ended two and a half years ago. The collective security
system has been powerfully strengthened. Our defenses have been
reinforced at sharply reduced costs. Programs to expand world trade and
to harness the atom for the betterment of mankind have been carried
forward. Our economy has been freed from governmental wage and price
controls. Inflation has been halted; the cost of living stabilized.

Government spending has been cut by more than ten billion dollars.
Nearly three hundred thousand positions have been eliminated from the
Federal payroll. Taxes have been substantially reduced. A balanced
budget is in prospect. Social security has been extended to ten million
more Americans and unemployment insurance to four million more.
Unprecedented advances in civil rights have been made. The long-standing
and deep-seated problems of agriculture have been forthrightly attacked.

This record of progress has been accomplished with a self imposed
caution against unnecessary and unwise interference in the private
affairs of our people, of their communities and of the several States.

If we of the Executive and Legislative Branches, keeping this caution
ever in mind, address ourselves to the business of the year before
us--and to the unfinished business of last year--with resolution, the
outlook is bright with promise.

Many measures of great national importance recommended last year to the
Congress still demand immediate attention legislation for school and
highway construction; health and immigration legislation; water
resources legislation; legislation to complete the implementation of our
foreign economic policy; such labor legislation as amendments of the
Labor-Management Relations Act, extension of the Fair Labor Standards
Act to additional groups not now covered, and occupational safety
legislation; and legislation for construction of an atomic-powered
exhibit vessel.

Many new items of business likewise require our attention-measures that
will further promote the release of the energies of our people; that
will broaden opportunity for all of them; that will advance the Republic
in its leadership toward a just peace; measures, in short, that are
essential to the building of an everstronger, ever-better America.

Every political and economic guide supports a valid confidence that wise
effort will be rewarded by an even more plentiful harvest of human
benefit than we now enjoy. Our resources are too many, our principles
too dynamic, our purposes too worthy and the issues at stake too immense
for us to entertain doubt or fear. But our responsibilities require that
we approach this year's business with a sober humility.

A heedless pride in our present strength and position would blind us to
the facts of the past, to the pitfalls of the future. We must walk ever
in the knowledge that we are enriched by a heritage earned in the labor
and sacrifice of our forebears; that, for our children's children, we
are trustees of a great Republic and a time-tested political system;
that we prosper as a cooperating member of the family of nations.

In this light the Administration has continued work on its program for
the Republic, begun three years ago. Because the vast spread of national
and human interests is involved within it, I shall not in this Message
attempt its detailed delineation. Instead, from time to time during this
Session, there will be submitted to the Congress specific
recommendations within specific fields. In the comprehensive survey
required for their preparation, the Administration is guided by enduring
objectives. The first is:

THE DISCHARGE OF OUR WORLD RESPONSIBILITY

Our world policy and our actions are dedicated to the achievement of
peace with justice for all nations.

With this purpose, we move in a wide variety of ways and through many
agencies to remove the pall of fear; to strengthen the ties with our
partners and to improve the cooperative cohesion of the free world; to
reduce the burden of armaments, and to stimulate and inspire action
among all nations for a world of justice and prosperity and peace. These
national objectives are fully supported by both our political parties.

In the past year, our search for a more stable and just peace has taken
varied forms. Among the most important were the two Conferences at
Geneva, in July and in the fall of last year. We explored the
possibilities of agreement on critical issues that jeopardize the peace.

The July meeting of Heads of Government held out promise to the world of
moderation in the bitterness, of word and action, which tends to
generate conflict and war. All were in agreement that a nuclear war
would be an intolerable disaster which must not be permitted to occur.
But in October, when the Foreign Ministers met again, the results
demonstrated conclusively that the Soviet leaders are not yet willing to
create the indispensable conditions for a secure and lasting peace.

Nevertheless, it is clear that the conflict between international
communism and freedom has taken on a new complexion.

We know the Communist leaders have often practiced the tactics of
retreat and zigzag. We know that Soviet and Chinese communism still
poses a serious threat to the free world. And in the Middle East recent
Soviet moves are hardly compatible with the reduction of international
tension.

Yet Communist tactics against the free nations have shifted in emphasis
from reliance on violence and the threat of violence to reliance on
division, enticement and duplicity. We must be well prepared to meet the
current tactics which pose a dangerous though less obvious threat. At
the same time, our policy must be dynamic as well as flexible, designed
primarily to forward the achievement of our own objectives rather than
to meet each shift and change on the Communist front. We must act in the
firm assurance that the fruits of freedom are more attractive and
desirable to mankind in the pursuit of happiness than the record of
Communism.

In the face of Communist military power, we must, of course, continue to
maintain an effective system of collective security. This involves two
things--a system which gives clear warning that armed aggression will be
met by joint action of the free nations, and deterrent military power to
make that warning effective. Moreover, the awesome power of the atom
must be made to serve as a guardian of the free community and of the
peace.

In the last year, the free world has seen major gains for the system of
collective security: the accession to the North Atlantic Treaty
Organization and Western European Union of the sovereign Federal German
Republic; the developing cooperation under the Southeast Asia Collective
Defense Treaty; and the formation in the Middle East of the Baghdad Pact
among Turkey, Iraq, Iran, Pakistan and the United Kingdom. In our own
hemisphere, the inter-American system has continued to show its vitality
in maintaining peace and a common approach to world problems. We now
have security pacts with more than 40 other nations.

In the pursuit of our national purposes, we have been steadfast in our
support of the United Nations, now entering its second decade with a
wider membership and ever-increasing influence and usefulness. In the
release of our fifteen fliers from Communist China, an essential prelude
was the world opinion mobilized by the General Assembly, which condemned
their imprisonment and demanded their liberation. The successful Atomic
Energy Conference held in Geneva under United Nations auspices and our
Atoms for Peace program have been practical steps toward the world-wide
use of this new energy source. Our sponsorship of such use has benefited
our relations with other countries. Active negotiations are now in
progress to create an International Agency to foster peaceful uses of
atomic energy.

During the past year the crucial problem of disarmament has moved to the
forefront of practical political endeavor. At Geneva, I declared the
readiness of the United States to exchange blueprints of the military
establishments of our nation and the USSR, to be confirmed by reciprocal
aerial reconnaissance. By this means, I felt mutual suspicions could be
allayed and an atmosphere developed in which negotiations looking toward
limitation of arms would have improved chances of success.

In the United Nations Subcommittee on Disarmament last fall, this
proposal was explored and the United States also declared itself willing
to include reciprocal ground inspection of key points. By the
overwhelming vote of 56 to 7, the United Nations on December 16 endorsed
these proposals and gave them a top priority. Thereby, the issue is
placed squarely before the bar of world opinion. We shall persevere in
seeking a general reduction of armaments under effective inspection and
control which are essential safeguards to ensure reciprocity and protect
the security of all.

In the coming year much remains to be done.

While maintaining our military deterrent, we must intensify our efforts
to achieve a just peace. In Asia we shall continue to give help to
nations struggling to maintain their freedom against the threat of
Communist coercion or subversion. In Europe we shall endeavor to
increase not only the military strength of the North Atlantic Alliance
but also its political cohesion and unity of purpose. We shall give such
assistance as is feasible to the recently renewed effort of Western
European nations to achieve a greater measure of integration, such as in
the field of peaceful uses of atomic energy.

In the Near East we shall spare no effort in seeking to promote a fair
solution of the tragic dispute between the Arab States and Israel, all
of whom we want as our friends. The United States is ready to do its
part to assure enduring peace in that area. We hope that both sides will
make the contributions necessary to achieve that purpose. In Latin
America, we shall continue to cooperate vigorously in trade and other
measures designed to assist economic progress in the area.

Strong economic ties are an essential element in our free world
partnership. Increasing trade and investment help all of us prosper
together. Gratifying progress has been made in this direction, most
recently by the three-year extension of our trade agreements
legislation.

I most earnestly request that the Congress approve our membership in the
Organization for Trade Cooperation, which would assist the carrying out
of the General Agreement on Tariffs and Trade to which we have been a
party since 1948. Our membership in the OTC will provide the most
effective and expeditious means for removing discriminations and
restrictions against American exports and in making our trade agreements
truly reciprocal. United States membership in the Organization will
evidence our continuing desire to cooperate in promoting an expanded
trade among the free nations. Thus the Organization, as proposed, is
admirably suited to our own interests and to those of like-minded
nations in working for steady expansion of trade and closer economic
cooperation. Being strictly an administrative entity, the Organization
for Trade Cooperation cannot, of course, alter the control by Congress
of the tariff, import, and customs policies of the United States.

We need to encourage investment overseas by avoiding unfair tax
duplications, and to foster foreign trade by further simplification and
improvement of our customs legislation.

We must sustain and fortify our Mutual Security Program. Because the
conditions of poverty and unrest in less developed areas make their
people a special target of international communism, there is a need to
help them achieve the economic growth and stability necessary to
preserve their independence against communist threats and enticements.

In order that our friends may better achieve the greater strength that
is our common goal, they need assurance of continuity in economic
assistance for development projects and programs which we approve and
which require a period of years for planning and completion.
Accordingly, I ask Congress to grant limited authority to make
longer-term commitments for assistance to such projects, to be fulfilled
from appropriations to be made in future fiscal years.

These various steps will powerfully strengthen the economic foundation
of our foreign policy. Together with constructive action abroad, they
will maintain the present momentum toward general economic progress and
vitality of the free world.

In all things, change is the inexorable law of life. In much of the
world the ferment of change is working strongly; but grave injustices
are still uncorrected. We must not, by any sanction of ours, help to
perpetuate these wrongs. I have particularly in mind the oppressive
division of the German people, the bondage of millions elsewhere, and
the exclusion of Japan from United Nations membership.

We shall keep these injustices in the forefront of human consciousness
and seek to maintain the pressure of world opinion to fight these vast
wrongs in the interest both of justice and secure peace.

Injustice thrives on ignorance. Because an understanding of the truth
about America is one of our most powerful forces, I am recommending a
substantial increase in budgetary support of the United States
Information Agency.

The sum of our international effort should be this: the waging of peace,
with as much resourcefulness, with as great a sense of dedication and
urgency, as we have ever mustered in defense of our country in time of
war. In this effort, our weapon is not force. Our weapons are the
principles and ideas embodied in our historic traditions, applied with
the same vigor that in the past made America a living promise of freedom
for all mankind.

To accomplish these vital tasks, all of us should be concerned with the
strength, effectiveness and morale .of our State Department and our
Foreign Service.

Another guide in the preparation of the Administration's program is:

THE CONSTANT IMPROVEMENT OF OUR NATIONAL SECURITY

Because peace is the keystone of our national policy, our defense
program emphasizes an effective flexible type of power calculated to
deter or repulse any aggression and to preserve the peace. Short of war,
we have never had military strength better adapted to our needs with
improved readiness for emergency use. The maintenance of this strong
military capability for the indefinite future will continue to call for
a large share of our national budget. Our military programs must meet
the needs of today. To build less would expose the nation to aggression.
To build excessively, under the influence of fear, could defeat our
purposes and impair or destroy the very freedom and economic system our
military defenses are designed to protect.

We have improved the effectiveness and combat readiness of our forces by
developing and making operational new weapons and by integrating the
latest scientific developments, including new atomic weapons, into our
military plans. We continue to push the production of the most modern
military aircraft. The development of long-range missiles has been on an
accelerated basis for some time. We are moving as rapidly as practicable
toward nuclear-powered aircraft and ships. Combat capability, especially
in terms of firepower, has been substantially increased. We have made
the adjustments in personnel permitted by the cessation of the Korean
War, the buildup of our allies and the introduction of new weapons. The
services are all planning realistically on a long-term basis.

To strengthen our continental defenses the United States and Canada, in
the closest cooperation, have substantially augmented early warning
networks. Great progress is being made in extending surveillance of the
Arctic, the Atlantic and the Pacific approaches to North America.

In the last analysis our real strength lies in the caliber of the men
and women in our Armed Forces, active and Reserve. Much has been done to
attract and hold capable military personnel, but more needs to be done.
This year, I renew my request of last year for legislation to provide
proper medical care for military dependents and a more equitable
survivors' benefit program. The Administration will prepare additional
recommendations designed to achieve the same objectives, including
career incentives for medical and dental officers and nurses, and
increases in the proportion of regular officers.

Closely related to the mission of the Defense Department is the task of
the Federal Civil Defense Administration. A particular point of
relationship arises from the fact that the key to civil defense is the
expanded continental defense program, including the distant early
warning system. Our Federal civil defense authorities have made progress
in their program, and now comprehensive studies are being conducted
jointly by the Federal Civil Defense Administration, the States, and
critical target cities to determine the best procedures that can be
adopted in case of an atomic attack. We must strengthen Federal
assistance to the States and cities in devising the most effective
common defense.

We have a broad and diversified mobilization base. We have the
facilities, materials, skills and knowledge rapidly to expand the
production of things we need for our defense whenever they are required.
But mobilization base requirements change with changing technology and
strategy. We must maintain flexibility to meet new requirements. I am
requesting, therefore, that the Congress once again extend the Defense
Production Act.

Of great importance to our nation's security is a continuing alertness
to internal subversive activity within or without our government. This
Administration will not relax its efforts to deal forthrightly and
vigorously in protection of this government and its citizens against
subversion, at the same time fully protecting the constitutional rights
of all citizens.

A third objective of the Administration is:

FISCAL INTEGRITY

A public office is, indeed, a public trust. None of its aspects is more
demanding than the proper management of the public finances. I refer now
not only to the indispensable virtues of plain honesty and
trustworthiness but also to the prudent, effective and conscientious use
of tax money. I refer also to the attitude of mind that makes efficient
and economical service to the people a watchword in our government.

Over the long term, a balanced budget is a sure index to thrifty
management--in a home, in a business or in the Federal Government. When
achievement of a balanced budget is for long put off in a business or
home, bankruptcy is the result. But in similar circumstances a
government resorts to inflation of the money supply. This inevitably
results in depreciation of the value of the money, and an increase in
the cost of living. Every investment in personal security is threatened
by this process of inflation, and the real values of the people's
savings, whether in the form of insurance, bonds, pension and retirement
funds or savings accounts are thereby shriveled.

We have made long strides these past three years in bringing our Federal
finances under control. The deficit for fiscal year 1953 was almost
9-1/2 billion dollars. Larger deficits seemed certain--deficits which
would have depreciated the value of the dollar and pushed the cost of
living still higher. But government waste and extravagance were searched
out. Nonessential activities were dropped. Government expenses were
carefully scrutinized. Total spending was cut by 14 billion dollars
below the amount planned by the previous Administration for the fiscal
year 1954.

This made possible--and it was appropriate in the existing circumstances
of transition to a peacetime economy--the largest tax cut in any year in
our history. Almost 7-1/2 billion dollars were released and every
taxpayer in the country benefited. Almost two-thirds of the savings went
directly to individuals. This tax cut also helped to build up the
economy, to make jobs in industry and to increase the production .of the
many things desired to improve the scale of living for the great
majority of Americans.

The strong expansion of the economy, coupled with a constant care for
efficiency in government operations and an alert guard against waste and
duplication, has brought us to a prospective balance between income and
expenditure. This is being done while we continue to strengthen our
military security.

I expect the budget to be in balance during the fiscal year ending June
30, 1956.

I shall propose a balanced budget for the next fiscal year ending June
30, 1957.

But the balance we are seeking cannot be accomplished without the
continuing every-day effort of the Executive and Legislative Branches to
keep expenditures under control. It will also be necessary to continue
all of the present excise taxes without any reduction and the
corporation income taxes at their present rates for another year beyond
next April 1st.

It is unquestionably true that our present tax level is very burdensome
and, in the interest of long term and continuous economic growth, should
be reduced when we prudently can. It is essential, in the sound
management of the Government's finances, that we be mindful of our
enormous national debt and of the obligation we have toward future
Americans to reduce that debt whenever we can appropriately do so. Under
conditions of high peacetime prosperity, such as now exist, we can never
justify going further into debt to give ourselves a tax cut at the
expense of our children. So, in the present state of our financial
affairs, I earnestly believe that a tax cut can be deemed justifiable
only when it will not unbalance the budget, a budget which makes
provision for some reduction, even though modest, in our national debt.
In this way we can best maintain fiscal integrity.

A fourth aim of our program is:

TO FOSTER A STRONG ECONOMY

Our competitive enterprise system depends on the energy of free human
beings, limited by prudent restraints in law, using free markets to
plan, organize and distribute production, and spurred by the prospect of
reward for successful effort. This system has developed our resources.
It has marvelously expanded our productive capacity. Against the record
of all other economic systems devised through the ages, this competitive
system has proved the most creative user of human skills in the
development of physical resources, and the richest rewarder of human
effort.

This is still true in this era when improved living standards and rising
national requirements are accompanied by swift advances in technology
and rapid obsolescence in machines and methods. Typical of these are the
strides made in construction of plants to produce electrical energy from
atomic power and of laboratories and installations for the application
of this new force in industry, agriculture and the healing arts. These
developments make it imperative--to assure effective functioning of our
enterprise system--that the Federal Government concern itself with
certain broad areas of our economic life. Most important of these is:

Agriculture

Our farm people are not sharing as they should in the general
prosperity. They alone of all major groups have seen their incomes
decline rather than rise. They are caught between two millstones--rising
production costs and declining prices. Such harm to a part of the
national economy so vitally important to everyone is of great concern to
us all. No other resource is so indispensable as the land that feeds and
clothes us. No group is more fundamental to our national life than our
farmers.

In successful prosecution of the war, the nation called for the utmost
effort of its farmers. Their response was superb, their contribution
unsurpassed. Farmers are not now to be blamed for the mountainous,
price-depressing surpluses produced in response to wartime policies and
laws that were too long continued. War markets are not the markets of
peacetime. Failure to recognize that basic fact by a timely adjustment
of wartime legislation brought its inevitable result in
peacetime--surpluses, lower prices and lower incomes for our farmers.

The dimensions of government responsibility are as broad and complex as
the farm problem itself. We are here concerned not only with our
essential continuing supplies of food and fiber, but also with a way of
life. Both are indispensable to the well-being and strength of the
nation. Consideration of these matters must be above and beyond
politics. Our national farm policy, so vital to the welfare of farm
people and all of us, must not become a field for political warfare. Too
much is at stake.

Our farm people expect of us, who have responsibility for their
government, understanding of their problems and the will to help solve
them. Our objective must be to help bring production into balance with
existing and new markets, at prices that yield farmers a return for
their work in line with what other Americans get.

To reach this goal, deep-seated problems must be subjected to a
stepped-up attack. There is no single easy solution. Rather, there must
be a many-sided assault on the stubborn problems of surpluses, prices,
costs, and markets; and a steady, persistent, imaginative advance in the
relationship between farmers and their government.

In a few days, by special message, I shall lay before the Congress my
detailed recommendations for new steps that should be taken promptly to
speed the transition in agriculture and thus assist our farmers to
achieve their fair share of the national income.

Basic to this program will be a new attack on the surplus problem-for
even the best-conceived farm program cannot work under a multi-billion
dollar weight of accumulated stocks.

I shall urge authorization of a soil bank program to alleviate the
problem of diverted acres and an overexpanded agricultural plant. This
will include an acreage reserve to reduce current and accumulated
surpluses of crops in most serious difficulty, and a conservation
reserve to achieve other needed adjustments in the use of agricultural
resources. I shall urge measures to strengthen our surplus disposal
activities.

I shall propose measures to strengthen individual commodity programs, to
remove controls where possible, to reduce carryovers, and to stop
further accumulations of surpluses. I shall ask the Congress to provide
substantial new funds for an expanded drive on the research front, to
develop new markets, new crops, and new uses. The Rural Development
Program to better the lot of low-income farm families deserves full
Congressional support. The Great Plains Program must go forward
vigorously. Advances on these and other fronts will pull down the
pricedepressing surpluses and raise farm income.

In this time of testing in agriculture, we should all together,
regardless of party, carry forward resolutely with a sound and forward
looking program on which farm people may confidently depend, now and for
years to come.

I shall briefly mention four other subjects directly related to the
well-being of the economy, preliminary to their fuller discussion in the
Economic Report and later communications.

Resources Conservation

I wish to re-emphasize the critical importance of the wise use and
conservation of our great natural resources of land, forests, minerals
and water and their long-range development consistent with our
agricultural policy. Water in particular now plays an increasing role in
industrial processes, in the irrigation of land, in electric power, as
well as in domestic uses. At the same time, it has the potential of
damage and disaster.

A comprehensive legislative program for water conservation will be
submitted to the Congress during the Session. The development of our
water resources cannot be accomplished overnight. The need is such that
we must make faster progress and without delay. Therefore, I strongly
recommend that action be taken at this Session on such wholly Federal
projects as the Colorado River Storage Project and the
Fryingpan-Arkansas Project; on the John Day partnership project, and
other projects which provide for cooperative action between the Federal
Government and non-Federal interests; and on legislation, which makes
provision for Federal participation in small projects under the primary
sponsorship of agencies of State and local government.

During the past year the areas of our National Parks have been expanded,
and new wildlife refuges have been created. The visits of our people to
the Parks have increased much more rapidly than have the facilities to
care for them. The Administration will submit recommendations to provide
more adequate facilities to keep abreast of the increasing interest of
our people in the great outdoors.

Disaster Assistance

A modern community is a complex combination of skills, specialized
buildings, machines, communications and homes. Most importantly, it
involves human lives. Disaster in many forms--by flood, frost, high
winds, for instance--can destroy on a massive scale in a few hours the
labor of many years.

Through the past three years the Administration has repeatedly moved
into action wherever disaster struck. The extent of State participation
in relief activities, however, has been far from uniform and, in many
cases, has been either inadequate or nonexistent. Disaster assistance
legislation requires overhauling and an experimental program of
flood-damage indemnities should be undertaken. The Administration will
make detailed recommendations on these subjects.

Area Redevelopment

We must help deal with the pockets of chronic unemployment that here and
there mar the nation's general industrial prosperity. Economic changes
in recent years have been often so rapid and far-reaching that areas
committed to a single local resource or industrial activity have found
themselves temporarily deprived of their markets and their livelihood.

Such conditions mean severe hardship for thousands of people as the slow
process of adaptation to new circumstances goes on. This process can be
speeded up. Last year I authorized a major study of the problem to find
additional steps to supplement existing programs for the redevelopment
of areas of chronic unemployment. Recommendations will be submitted,
designed to supplement, with Federal technical and loan assistance local
efforts to get on with this vital job. Improving such communities must,
of course, remain the primary responsibility of the people living there
and of their States. But a soundly conceived Federal partnership program
can be of real assistance to them in their efforts.

Highway Legislation.

Legislation to provide a modern, interstate highway system is even more
urgent this year than last, for 12 months have now passed in which we
have fallen further behind in road construction needed for the personal
safety, the general prosperity, the national security of the American
people. During the year, the number of motor vehicles has increased from
58 to 61 million. During the past year over 38,000 persons lost their
lives in highway accidents, while the fearful toll of injuries and
property damage has gone on unabated.

In my message of February 22, 1955, I urged that measures be taken to
complete the vital 40,000 mile interstate system over a period of 10
years at an estimated Federal cost of approximately 25 billion dollars.
No program was adopted.

If we are ever to solve our mounting traffic problem, the whole
interstate system must be authorized as one project, to be completed
approximately within the specified time. Only in this way can industry
efficiently gear itself to the job ahead. Only in this way can the
required planning and engineering be accomplished without the confusion
and waste unavoidable a piecemeal approach. Furthermore, as I pointed
out last year, the pressing nature of this problem must not lead us to
solutions outside the bounds of sound fiscal management. As in the case
of other pressing problems, there must be an adequate plan of financing.
To continue the drastically needed improvement in other national highway
systems, I recommend the continuation of the Federal Aid Highway
Program.

Aside from agriculture and the four subjects specifically mentioned, an
integral part of our efforts to foster a strong and expanding free
economy is keeping open the door of opportunity to new and small
enterprises, checking monopoly, and preserving a competitive
environment. In this past year the steady improvement in the economic
health of small business has reinforced the vitality of our competitive
economy. We shall continue to help small business concerns to obtain
access to adequate financing and to competent counsel on management,
production, and marketing problems.

Through measures already taken, opportunities for smallbusiness
participation in government procurement programs, including military
procurement, are greatly improved. The effectiveness of these measures
will become increasingly apparent. We shall continue to make certain
that small business has a fair opportunity to compete and has an
economic environment in which it may prosper.

In my message last year I referred to the appointment of an advisory
committee to appraise and report to me on the deficiencies as well as
the effectiveness of existing Federal transportation policies. I have
commended the fundamental purposes and objectives of the committee's
report. I earnestly recommend that the Congress give prompt attention to
the committee's proposals.

Essential to a prosperous economic environment for all business, small
and large--for agriculture and industry and commerce-is efficiency in
Government. To that end, exhaustive studies of the entire governmental
structure were made by the Commission on Intergovernmental Relations and
the Commission on the Organization of the Executive Branch of the
Government--the reports of these Commissions are now under intensive
review and already in the process of implementation in important areas.

One specific and most vital governmental function merits study and
action by the Congress. As part of our program of promoting efficiency
in Government and getting the fiscal situation in hand, the Post Office
Department in the past three years has been overhauled. Nearly one
thousand new post offices have been provided. Financial practices have
been modernized, and transportation and operating methods are being
constantly improved. A new wage and incentive plan for the half million
postal employees has been established. Never before has the postal
system handled so much mail so quickly and so economically.

The Post Office Department faces two serious problems. First, much of
its physical plant--post offices and other buildings-is obsolete and
inadequate. Many new buildings and the modernization of present ones are
essential if we are to have improved mail service. The second problem is
the Department's fiscal plight. It now faces an annual deficit of
one-half billion dollars.

Recommendations on postal facilities and on additional postal revenues
will be submitted to the Congress.

A final consideration in our program planning is:

THE RESPONSE TO HUMAN CONCERNS

A fundamental belief shines forth in this Republic. We believe in the
worth and dignity of the individual. We know that if we are to govern
ourselves wisely--in the tradition of America--we must have the
opportunity to develop our individual capacities to the utmost.

To fulfill the individual's aspirations in the American way of life,
good education is fundamental. Good education is the outgrowth of good
homes, good communities, good churches, and good schools. Today our
schools face pressing problems--problems which will not yield to swift
and easy solutions, or to any single action. They will yield only to a
continuing, active, formed effort by the people toward achieving better
schools.

This kind of effort has been spurred by the thousands of conferences
held in recent months by half a million citizens and educators in all
parts of the country, culminating in the White House Conference on
Education. In that Conference, some two thousand delegates, broadly
representative of the nation, studied together the problems of the
nation's schools.

They concluded that the people of the United States must make a greater
effort through their local, State, and Federal Governments to improve
the education of our youth. This expression from the people must now be
translated into action at all levels of government.

So far as the Federal share of responsibility is concerned, I urge that
the Congress move promptly to enact an effective program of Federal
assistance to help erase the existing deficit of school classrooms. Such
a program, which should be limited to a five-year period, must operate
to increase rather than decrease local and State support of schools and
to give the greatest help to the States and localities with the least
financial resources. Federal aid should in no way jeopardize the freedom
of local school systems. There will be presented to the Congress a
recommended program of Federal assistance for school construction.

Such a program should be accompanied by action to increase services to
the nation's schools by the Office of Education and by legislation to
provide continuation of payments to school districts where Federal
activities have impaired the ability of those districts to provide
adequate schools.

Under the 1954 Amendments to the old-age and survivors' insurance
program, protection was extended to some 10 million additional workers
and benefits were increased. The system now helps protect 9 out of 10
American workers and their families against loss of income in old age or
on the death of the breadwinner. The system is sound. It must be kept
so. In developing improvements in the system, we must give the most
careful consideration to population and social trends, and to fiscal
requirements. With these considerations in mind, the Administration will
present its recommendations for further expansion of coverage and other
steps which can be taken wisely at this time.

Other needs in the area of social welfare include increased child
welfare services, extension of the program of aid to dependent children,
intensified attack on juvenile delinquency, and special attention to the
problems of mentally retarded children. The training of more skilled
workers for these fields and the quest for new knowledge through
research in social welfare are essential. Similarly the problems of our
aged people need our attention.

The nation has made dramatic progress in conquering disease--progress of
profound human significance which can be greatly accelerated by an
intensified effort in medical research. A well-supported, well-balanced
program of research, including basic research, can open new frontiers of
knowledge, prevent and relieve suffering, and prolong life. Accordingly
I shall recommend a substantial increase in Federal funds for the
support of such a program. As an integral part of this effort, I shall
recommend a new plan to aid construction of non-Federal medical research
and teaching facilities and to help provide more adequate support for
the training of medical research manpower.

Finally, we must aid in cushioning the heavy and rising costs of illness
and hospitalization to individuals and families. Provision should be
made, by Federal reinsurance or otherwise, to foster extension of
voluntary health insurance coverage to many more persons, especially
older persons and those in rural areas. Plans should be evolved to
improve protection against the costs of prolonged or severe illness.
These measures will help reduce the dollar barrier between many
Americans and the benefits of modern medical care.

The Administration health program will be submitted to the Congress in
detail.

The response of government to human concerns embraces, of course, other
measures of broad public interest, and of special interest to our
working men and women. The need still exists for improvement of the
Labor Management Relations Act. The recommendations I submitted to the
Congress last year take into account not only the interests of labor and
management but also the public welfare. The needed amendments should be
enacted without further delay.

We must also carry forward the job of improving the wagehour law. Last
year I requested the Congress to broaden the coverage of the minimum
wage. I repeat that recommendation, and I pledge the full resources of
the Executive Branch to assist the Congress in finding ways to attain
this goal. Moreover, as requested last year, legislation should be
passed to clarify and strengthen the eight-hour laws for the benefit of
workers who are subject to Federal wage standards on Federal and
Federally assisted construction and other public works.

The Administration will shortly propose legislation to assure adequate
disclosure of the financial affairs of each employee pension and welfare
plan and to afford substantial protection to their beneficiaries in
accordance with the objectives outlined in my message of January 11,
1954. Occupational safety still demands attention, as I pointed out last
year, and legislation to improve the Longshoremen's and Harbor Workers'
Compensation Act is still needed. The improvement of the District of
Columbia Unemployment Insurance Law and legislation to provide employees
in the District with non-occupational disability insurance are no less
necessary now than 12 months ago. Legislation to apply the principle of
equal pay for equal work without discrimination because of sex is a
matter of simple justice. I earnestly urge the Congress to move swiftly
to implement these needed labor measures.

In the field of human needs, we must carry forward the housing program,
which is contributing so greatly to the well-being of our people and the
prosperity of our economy. Home ownership is now advanced to the point
where almost three of every five families in our cities, towns, and
suburbs own the houses they live in.

For the housing program, most of the legislative authority already
exists. However, a firm program of public housing is essential until the
private building industry has found ways to provide more adequate
housing for low-income families. The Administration will propose
authority to contract for 35 thousand additional public housing units in
each of the next 2 fiscal years for communities which will participate
in an integrated attack on slums and blight.

To meet the needs of the growing number of older people, several
amendments to the National Housing Act will be proposed to assist the
private homebuilding industry as well as charitable and non-profit
organizations.

With so large a number of the American people desiring to modernize and
improve existing dwellings, I recommend that the Title 1 program for
permanent improvements in the home be liberalized.

I recommend increases in the general FHA mortgage insurance authority;
the extension of the FHA military housing program; an increase in the
authorization for Urban Planning grants; in the special assistance
authority of the Federal National Mortgage Association; and continued
support of the college housing program in a way that will not discourage
private capital from helping to meet the needs of our colleges.

The legislation I have recommended for workers in private industry
should be accompanied by a parallel effort for the welfare of Government
employees. We have accomplished much in this field, including a
contributory life insurance program; equitable pay increases and a
fringe benefits program, covering many needed personnel policy changes,
from improved premium pay to a meaningful incentive award program.

Additional personnel management legislation is needed in this Session.
As I stated last year, an executive pay increase is essential to
efficient governmental management. Such an increase, together with
needed adjustments in the pay for the top career positions, is also
necessary to the equitable completion of the Federal pay program
initiated last year. Other legislation will be proposed, including
legislation for prepaid group health insurance for employees and their
dependents and to effect major improvements in the Civil Service
retirement system.

All of us share a continuing concern for those who have served this
nation in the Armed Forces. The Commission on Veterans Pensions is at
this time conducting a study of the entire field of veterans' benefits
and will soon submit proposed improvements.

We are proud of the progress our people have made in the field of civil
rights. In Executive Branch operations throughout the nation,
elimination of discrimination and segregation is all but completed.
Progress is also being made among contractors engaged in furnishing
Government services and requirements. Every citizen now has the
opportunity to fit himself for and to hold a position of responsibility
in the service of his country. In the District of Columbia, through the
voluntary cooperation of the people, discrimination and segregation are
disappearing from hotels, theaters, restaurants and other facilities.

It is disturbing that in some localities allegations persist that Negro
citizens are being deprived of their right to vote and are likewise
being subjected to unwarranted economic pressures. I recommend that the
substance of these charges be thoroughly examined by a Bipartisan
Commission created by the Congress. It is hoped that such a commission
will be established promptly so that it may arrive at findings which can
receive early consideration.

The stature of our leadership in the free world has increased through
the past three years because we have made more progress than ever before
in a similar period to assure our citizens equality in justice, in
opportunity and in civil rights. We must expand this effort on every
front. We must strive to have every person judged and measured by what
he is, rather than by his color, race or religion. There will soon be
recommended to the Congress a program further to advance the efforts of
the Government, within the area of Federal responsibility, to accomplish
these objectives.

One particular challenge confronts us. In the Hawaiian Islands, East
meets West. To the Islands, Asia and Europe and the Western Hemisphere,
all the continents, have contributed their peoples and their cultures to
display a unique example of a community that is a successful laboratory
in human brotherhood.

Statehood, supported by the repeatedly expressed desire of the Islands'
people and by our traditions, would be a shining example of the American
way to the entire earth. Consequently, I urgently request this Congress
to grant statehood for Hawaii. Also, in harmony with the provisions I
last year communicated to the Senate and House Committees on Interior
and Insular Affairs, I trust that progress toward statehood for Alaska
can be made in this Session.

Progress is constant toward full integration of our Indian citizens into
normal community life. During the past two years the Administration has
provided school facilities for thousands of Indian children previously
denied this opportunity. We must continue to meet the needs of increased
numbers of Indian children. Provision should also be made for the
education of adult Indians whose schooling in earlier years was
neglected.

In keeping with our responsibility of world leadership and in our own
self interest, I again point out to the Congress the urgent need for
revision of the immigration and nationality laws. Our nation has always
welcomed immigrants to our shores. The wisdom of such a policy is
clearly shown by the fact that America has been built by immigrants and
the descendants of immigrants. That policy must be continued
realistically with present day conditions in mind.

I recommend that the number of persons admitted to this country annually
be based not on the 1920 census but on the latest, the 1950 census.
Provision should be made to allow for greater flexibility in the use of
quotas so if one country does not use its share, the vacancies may be
made available for the use of qualified individuals from other
countries.

The law should be amended to permit the Secretary of State and the
Attorney General to waive the requirements of fingerprinting on a
reciprocal basis for persons coming to this country for temporary
visits. This and other changes in the law are long overdue and should be
taken care of promptly. Detailed recommendations for revision of the
immigration laws will be submitted to the Congress.

I am happy to report substantial progress in the flow of immigrants
under the Refugee Relief Act of 1953; however, I again request this
Congress to approve without further delay the urgently needed amendments
to that act which I submitted in the last Session. Because of the high
prosperity in Germany and Austria, the number of immigrants from those
countries will be reduced. This will make available thousands of
unfilled openings which I recommend be distributed to Greece and Italy
and to escapees from behind the Iron Curtain.

Once again I ask the Congress to join with me in demonstrating our
belief in the right of suffrage. I renew my request that the principle
of self-government be extended and the right of suffrage granted to the
citizens of the District of Columbia.

To conclude: the vista before us is bright. The march of science, the
expanding economy, the advance in collective security toward a just
peace--in this threefold movement our people are creating new standards
by which the future of the Republic may be judged.

Progress, however, will be realized only as it is more than matched by a
continuing growth in the spiritual strength of the nation. Our
dedication to moral values must be complete in our dealings abroad and
in our relationships among ourselves. We have single-minded devotion to
the common good of America. Never must we forget that this means the
well-being, the prosperity, the security of all Americans in every walk
of life.

To the attainment of these objectives, I pledge full energies of the
Administration, as in the Session ahead, it works on a program for
submission to you, the Congress of the United States.

***

State of the Union Address
Dwight D. Eisenhower
January 10, 1957

To the Congress of the United States:

I appear before the Congress today to report on the State of the Union
and the relationships of the Union to the other nations of the world. I
come here, firmly convinced that at no time in the history of the
Republic have circumstances more emphatically underscored the need, in
all echelons of government, for vision and wisdom and resolution.

You meet in a season of stress that is testing the fitness of political
systems and the validity of political philosophies. Each stress stems in
part from causes peculiar to itself. But every stress is a reflection of
a universal phenomenon.

In the world today, the surging and understandable tide of nationalism
is marked by widespread revulsion and revolt against tyranny, injustice,
inequality and poverty. As individuals, joined in a common hunger for
freedom, men and women and even children pit their spirit against guns
and tanks. On a larger scale, in an ever more persistent search for the
self-respect of authentic sovereignty and the economic base on which
national independence must rest, peoples sever old ties; seek new
alliances; experiment--sometimes dangerously--in their struggle to
satisfy these human aspirations.

Particularly, in the past year, this tide has changed the pattern of
attitudes and thinking among millions. The changes already accomplished
foreshadow a world transformed by the spirit of freedom. This is no
faint and pious hope. The forces now at work in the minds and hearts of
men will not be spent through many years. In the main, today's
expressions of nationalism are, in spirit, echoes of our forefathers'
struggle for independence.

This Republic cannot be aloof to these events heralding a new epoch in
the affairs of mankind.

Our pledged word, our enlightened self-interest, our character as a
Nation commit us to a high role in world affairs: a role of vigorous
leadership, ready strength, sympathetic understanding.

The State of the Union, at the opening of the 85th Congress continues to
vindicate the wisdom of the principles on which this Republic is
rounded. Proclaimed in the Constitution of the Nation and in many of our
historic documents, and rounded in devout religious convictions, these
principles enunciate:

A vigilant regard for human liberty.

A wise concern for human welfare.

A ceaseless effort for human progress.

Fidelity to these principles, in our relations with other peoples, has
won us new friendships and has increased our opportunity for service
within the family of nations. The appeal of these principles is
universal, lighting fires in the souls of men everywhere. We shall
continue to uphold them, against those who deny them and in counselling
with our friends.

At home, the application of these principles to the complex problems of
our national life has brought us to an unprecedented peak in our
economic prosperity and has exemplified in our way of life the enduring
human values of mind and spirit.

Through the past four years these principles have guided the legislative
programs submitted by the Administration to the Congress. As we attempt
to apply them to current events, domestic and foreign, we must take into
account the complex entity that is the United States of America; what
endangers it; what can improve it.

The visible structure is our American economy itself. After more than a
century and a half of constant expansion, it is still rich in a wide
variety of natural resources. It is first among nations in its people's
mastery of industrial skills. It is productive beyond our own needs of
many foodstuffs and industrial products. It is rewarding to all our
citizens in opportunity to earn and to advance in self-realization and
in self-expression. It is fortunate in its wealth of educational and
cultural and religious centers. It is vigorously dynamic in the
limitless initiative and willingness to venture that characterize free
enterprise. It is productive of a widely shared prosperity.

Our economy is strong, expanding, and fundamentally sound. But in any
realistic appraisal, even the optimistic analyst will realize that in a
prosperous period the principal threat to efficient functioning of a
free enterprise system is inflation. We look back on four years of
prosperous activities during which prices, the cost of living, have been
relatively stable--that is, inflation has been held in check. But it is
clear that the danger is always present, particularly if the government
might become profligate in its expenditures or private groups might
ignore all the possible results on our economy of unwise struggles for
immediate gain.

This danger requires a firm resolution that the Federal Government shall
utilize only a prudent share of the Nation's resources, that it shall
live within its means, carefully measuring against need alternative
proposals for expenditures.

Through the next four years, I shall continue to insist that the
executive departments and agencies of Government search out additional
ways to save money and manpower. I urge that the Congress be equally
watchful in this matter.

We pledge the Government's share in guarding the integrity of the
dollar. But the Government's efforts cannot be the entire campaign
against inflation, the thief that can rob the individual of the value of
the pension and social security he has earned during his productive
life. For success, Government's efforts must be paralleled by the
attitudes and actions of individual citizens.

I have often spoken of the purpose of this Administration to serve the
national interest of 170 million people. The national interest must take
precedence over temporary advantages which may be secured by particular
groups at the expense of all the people.

In this regard I call on leaders in business and in labor to think well
on their responsibility to the American people. With all elements of our
society, they owe the Nation a vigilant guard against the inflationary
tendencies that are always at work in a dynamic economy operating at
today's high levels. They can powerfully help counteract or accentuate
such tendencies by their wage and price policies.

Business in its pricing policies should avoid unnecessary price
increases especially at a time like the present when demand in so many
areas presses hard on short supplies. A reasonable profit is essential
to the new investments that provide more jobs in an expanding economy.
But business leaders must, in the national interest, studiously avoid
those price rises that are possible only because of vital or unusual
needs of the whole nation.

If our economy is to remain healthy, increases in wages and other labor
benefits, negotiated by labor and management, must be reasonably related
to improvements in productivity. Such increases are beneficial, for they
provide wage earners with greater purchasing power. Except where
necessary to correct obvious injustices, wage increases that outrun
productivity, however, are an inflationary factor. They make for higher
prices for the public generally and impose a particular hardship on
those whose welfare depends on the purchasing power of retirement income
and savings. Wage negotiations should also take cognizance of the right
of the public generally to share in the benefits of improvements in
technology.

Freedom has been defined as the opportunity for self-discipline. This
definition has a special application to the areas of wage and price
policy in a free economy. Should we persistently fail to discipline
ourselves, eventually there will be increasing pressure on government to
redress the failure. By that process freedom will step by step
disappear. No subject on the domestic scene should more attract the
concern of the friends of American working men and women and of free
business enterprise than the forces that threaten a steady depreciation
of the value of our money.

Concerning developments in another vital sector of our
economy--agriculture--I am gratified that the long slide in farm income
has been halted and that further improvement is in prospect. This is
heartening progress. Three tools that we have developed--improved
surplus disposal, improved price support laws, and the soil bank--are
working to reduce price-depressing government stocks of farm products.
Our concern for the well-being of farm families demands that we
constantly search for new ways by which they can share more fully in our
unprecedented prosperity. Legislative recommendations in the field of
agriculture are contained in the Budget Message.

Our soil, water, mineral, forest, fish, and wildlife resources are being
conserved and improved more effectively. Their conservation and
development are vital to the present and future strength of the Nation.
But they must not be the concern of the Federal Government alone. State
and local entities, and private enterprise should be encouraged to
participate in such projects.

I would like to make special mention of programs for making the best
uses of water, rapidly becoming our most precious natural resource, just
as it can be, when neglected, a destroyer of both life and wealth. There
has been prepared and published a comprehensive water report developed
by a Cabinet Committee and relating to all phases of this particular
problem.

In the light of this report, there are two things I believe we should
keep constantly in mind. The first is that each of our great river
valleys should be considered as a whole. Piecemeal operations within
each lesser drainage area can be self-defeating or, at the very least,
needlessly expensive. The second is that the domestic and industrial
demands for water grow far more rapidly than does our population.

The whole matter of making the best use of each drop of water from the
moment it touches our soil until it reaches the oceans, for such
purposes as irrigation, flood control, power production, and domestic
and industrial uses clearly demands the closest kind of cooperation and
partnership between municipalities, States and the Federal Government.
Through partnership of Federal, state and local authorities in these
vast projects we can obtain the economy and efficiency of development
and operation that springs from a lively sense of local responsibility.

Until such partnership is established on a proper and logical basis of
sharing authority, responsibility and costs, our country will never have
both the fully productive use of water that it so obviously needs and
protection against disastrous flood.

If we fail in this, all the many tasks that need to be done in America
could be accomplished only at an excessive cost, by the growth of a
stifling bureaucracy, and eventually with a dangerous degree of
centralized control over our national life.

In all domestic matters, I believe that the people of the United States
will expect of us effective action to remedy past failure in meeting
critical needs.

High priority should be given the school construction bill. This will
benefit children of all races throughout the country-and children of all
races need schools now. A program designed to meet emergency needs for
more classrooms should be enacted without delay. I am hopeful that this
program can be enacted on its own merits, uncomplicated by provisions
dealing with the complex problems of integration. I urge the people in
all sections of the country to approach these problems with calm and
reason, with mutual understanding and good will, and in the American
tradition of deep respect for the orderly processes of law and justice.

I should say here that we have much reason to be proud of the progress
our people are making in mutual understanding--the chief buttress of
human and civil rights. Steadily we are moving closer to the goal of
fair and equal treatment of citizens without regard to race or color.
But unhappily much remains to be done.

Last year the Administration recommended to the Congress a four-point
program to reinforce civil rights. That program included:

(1) creation of a bipartisan commission to investigate asserted
violations of civil rights and to make recommendations;

(2) creation of a civil rights division in the Department of Justice in
charge of an Assistant Attorney General;

(3) enactment by the Congress of new laws to aid in the enforcement of
voting rights; and

(4) amendment of the laws so as to permit the Federal Government to seek
from the civil courts preventive relief in civil rights cases.

I urge that the Congress enact this legislation.

Essential to the stable economic growth we seek is a system of
well-adapted and efficient financial institutions. I believe the time
has come to conduct a broad national inquiry into the nature,
performance and adequacy of our financial system, both in terms of its
direct service to the whole economy and in terms of its function as the
mechanism through which monetary and credit policy takes effect. I
believe the Congress should authorize the creation of a commission of
able and qualified citizens to undertake this vital inquiry. Out of
their findings and recommendations the Administration would develop and
present to the Congress any legislative proposals that might be
indicated for the purpose of improving our financial machinery.

In this message it seems unnecessary that I should repeat
recommendations involving our domestic affairs that have been urged upon
the Congress during the past four years, but which, in some instances,
did not reach the stage of completely satisfactory legislation.

The Administration will, through future messages either directly from me
or from heads of the departments and agencies, transmit to the Congress
specific recommendations. These will involve our financial and fiscal
affairs, our military and civil defenses; the administration of justice;
our agricultural economy; our domestic and foreign commerce; the
urgently needed increase in our postal rates; the development of our
natural resources; our labor laws, including our labor-management
relations legislation, and vital aspects of the health, education and
welfare of our people. There will be special recommendations dealing
with such subjects as atomic energy, the furthering of public works, the
continued efforts to eliminate government competition with the
businesses of tax-paying citizens.

A number of legislative recommendations will be mentioned specifically
in my forthcoming Budget Message, which will reach you within the week.
That message will also recommend such sums as are needed to implement
the proposed action.

Turning to the international scene:

The existence of a strongly armed imperialistic dictatorship poses a
continuing threat to the free world's and thus to our own Nation's
security and peace. There are certain truths to be remembered here.

First, America alone and isolated cannot assure even its own security.
We must be joined by the capability and resolution of nations that have
proved themselves dependable defenders of freedom. Isolation from them
invites war. Our security is also enhanced by the immeasurable interest
that joins us with all peoples who believe that peace with justice must
be preserved, that wars of aggression are crimes against humanity.

Another truth is that our survival in today's world requires modern,
adequate, dependable military strength. Our Nation has made great
strides in assuring a modern defense, so armed in new weapons, so
deployed, so equipped, that today our security force is the most
powerful in our peacetime history. It can punish heavily any enemy who
undertakes to attack us. It is a major deterrent to war.

By our research and development more efficient weapons-some of amazing
capabilities--are being constantly created. These vital efforts we shall
continue. Yet we must not delude ourselves that safety necessarily
increases as expenditures for military research or forces in being go
up. Indeed, beyond a wise and reasonable level, which is always changing
and is under constant study, money spent on arms may be money wasted on
sterile metal or inflated costs, thereby weakening the very security and
strength we seek.

National security requires far more than military power. Economic and
moral factors play indispensable roles. Any program that endangers our
economy could defeat us. Any weakening of our national will and
resolution, any diminution of the vigor and initiative of our individual
citizens, would strike a blow at the heart of our defenses.

The finest military establishment we can produce must work closely in
cooperation with the forces of our friends. Our system of regional
pacts, developed within the Charter of the United Nations, serves to
increase both our own security and the security of other nations.

This system is still a recent introduction on the world scene. Its
problems are many and difficult, because it insists on equality among
its members and brings into association some nations traditionally
divided. Repeatedly in recent months, the collapse of these regional
alliances has been predicted. The strains upon them have been at times
indeed severe. Despite these strains our regional alliances have proved
durable and strong, and dire predictions of their disintegration have
proved completely false.

With other free nations, we should vigorously prosecute measures that
will promote mutual strength, prosperity and welfare within the free
world. Strength is essentially a product of economic health and social
well-being. Consequently, even as we continue our programs of military
assistance, we must emphasize aid to our friends in building more
productive economies and in better satisfying the natural demands of
their people for progress. Thereby we shall move a long way toward a
peaceful world.

A sound and safeguarded agreement for open skies, unarmed aerial
sentinels, and reduced armament would provide a valuable contribution
toward a durable peace in the years ahead. And we have been persistent
in our effort to reach such an agreement. We are willing to enter any
reliable agreement which would reverse the trend toward ever more
devastating nuclear weapons; reciprocally provide against the
possibility of surprise attack; mutually control the outer space missile
and satellite development; and make feasible a lower level of armaments
and armed forces and an easier burden of military expenditures. Our
continuing negotiations in this field are a major part of our quest for
a confident peace in this atomic age.

This quest requires as well a constructive attitude among all the
nations of the free world toward expansion of trade and investment, that
can give all of us opportunity to work out economic betterment.

An essential step in this field is the provision of an administrative
agency to insure the orderly and proper operation of existing
arrangements trader which multilateral trade is now carried on. To that
end I urge Congressional authorization for United States membership in
the proposed Organization for Trade Cooperation, an action which will
speed removal of discrimination against our export trade.

We welcome the efforts of a number of our European friends to achieve an
integrated community to develop a common market. We likewise welcome
their cooperative effort in the field of atomic energy.

To demonstrate once again our unalterable purpose to make of the atom a
peaceful servant of humanity, I shortly shall ask the Congress to
authorize full United States participation in the International Atomic
Energy Agency.

World events have magnified both the responsibilities and the
opportunities of the United States Information Agency. Just as, in
recent months, the voice of communism has become more shaken and
confused, the voice of truth must be more clearly heard. To enable our
Information Agency to cope with these new responsibilities and
opportunities, I am asking the Congress to increase appreciably the
appropriations for this program and for legislation establishing a
career service for the Agency's overseas foreign service officers.

The recent historic events in Hungary demand that all free nations share
to the extent of their capabilities in the responsibility of granting
asylum to victims of Communist persecution. I request the Congress
promptly to enact legislation to regularize the status in the United
States of Hungarian refugees brought here as parolees. I shall shortly
recommend to the Congress by special message the changes in our
immigration laws that I deem necessary in the light of our world
responsibilities.

The cost of peace is something we must face boldly, fearlessly. Beyond
money, it involves changes in attitudes, the renunciation of old
prejudices, even the sacrifice of some seeming self-interest.

Only five days ago I expressed to you the grave concern of your
Government over the threat of Soviet aggression in the Middle East. I
asked for Congressional authorization to help counter this threat. I say
again that this matter is of vital and immediate importance to the
Nation's and the free world's security and peace. By our proposed
programs in the Middle East, we hope to assist in establishing a climate
in which constructive and long-term solutions to basic problems of the
area may be sought.

From time to time, there will be presented to the Congress requests for
other legislation in the broad field of international affairs. All
requests will reflect the steadfast purpose of this Administration to
pursue peace, based on justice. Although in some cases details will be
new, the underlying purpose and objectives will remain the same.

All proposals made by the Administration in this field are based on the
free world's unity. This unity may not be immediately obvious unless we
examine link by link the chain of relationships that binds us to every
area and to every nation. In spirit the free world is one because its
people uphold the right of independent existence for all nations. I have
already alluded to their economic interdependence. But their
interdependence extends also into the field of security.

First of all, no reasonable man will question the absolute need for our
American neighbors to be prosperous and secure. Their security and
prosperity are inextricably bound to our own. And we are, of course,
already joined with these neighbors by historic pledges.

Again, no reasonable man will deny that the freedom and prosperity and
security of Western Europe are vital to our own prosperity and security.
If the institutions, the skills, the manpower of its peoples were to
fall under the domination of an aggressive imperialism, the violent
change in the balance of world power and in the pattern of world
commerce could not be fully compensated for by any American measures,
military or economic.

But these people, whose economic strength is largely dependent on free
and uninterrupted movement of oil from the Middle East, cannot
prosper--indeed, their economies would be severely impaired--should that
area be controlled by an enemy and the movement of oil be subject to its
decisions.

Next, to the Eastward, are Asiatic and Far Eastern peoples, recently
returned to independent control of their own affairs or now emerging
into sovereign statehood. Their potential strength constitutes new
assurance for stability and peace in the world--if they can retain their
independence. Should they lose freedom and be dominated by an aggressor,
the world-wide effects would imperil the security of the free world.

In short, the world has so shrunk that all free nations are our
neighbors. Without cooperative neighbors, the United States cannot
maintain its own security and welfare, because:

First, America's vital interests are world-wide, embracing both
hemispheres and every continent.

Second, we have community of interest with every nation in the free
world.

Third, interdependence of interests requires a decent respect for the
rights and the peace of all peoples.

These principles motivate our actions within the United Nations. There,
before all the world, by our loyalty to them, by our practice of them,
let us strive to set a standard to which all who seek justice and who
hunger for peace can rally.

May we at home, here at the Seat of Government, in all the cities and
towns and farmlands of America, support these principles in a personal
effort of dedication. Thereby each of us can help establish a secure
world order in which opportunity for freedom and justice will be more
widespread, and in which the resources now dissipated on the armaments
of war can be released for the life and growth of all humanity.

When our forefathers prepared the immortal document that proclaimed our
independence, they asserted that every individual is endowed by his
Creator with certain inalienable rights. As we gaze back through history
to that date, it is clear that our nation has striven to live up to this
declaration, applying it to nations as well as to individuals.

Today we proudly assert that the government of the United States is
still committed to this concept, both in its activities at home and
abroad.

The purpose is Divine; the implementation is human.

Our country and its government have made mistakes--human mistakes. They
have been of the head--not of the heart. And it is still true that the
great concept of the dignity of all men, alike created in the image of
the Almighty, has been the compass by which we have tried and are trying
to steer our course.

So long as we continue by its guidance, there will be true progress in
human affairs, both among ourselves and among those with whom we deal.

To achieve a more perfect fidelity to it, I submit, is a worthy ambition
as we meet together in these first days of this, the first session of
the 85th Congress.

The Address as reported from the floor appears in the Congressional
Record (vol. 103, p. 387).

***

State of the Union Address
Dwight D. Eisenhower
January 9, 1958

Mr. President, Mr. Speaker, Members of the 85th Congress:

It is again my high privilege to extend personal greetings to the
members of the 85th Congress.

All of us realize that, as this new session begins, many Americans are
troubled about recent world developments which they believe may threaten
our nation's safety. Honest men differ in their appraisal of America's
material and intellectual strength, and the dangers that confront us.
But all know these dangers are real.

The purpose of this message is to outline the measures that can give the
American people a confidence--just as real--in their own security.

I am not here to justify the past, gloss over the problems of the
present, or propose easy solutions for the future.

I am here to state what I believe to be right and what I believe to be
wrong; and to propose action for correcting what I think wrong! I.

There are two tasks confronting us that so far outweigh all other that I
shall devote this year's message entirely to them. The first is to
ensure our safety through strength.

As to our strength, I have repeatedly voiced this conviction: We now
have a broadly based and efficient defensive strength, including a great
deterrent power, which is, for the present, our main guarantee against
war; but, unless we act wisely and promptly, we could lose that capacity
to deter attack or defend ourselves.

My profoundest conviction is that the American people will say, as one
man: No matter what the exertions or sacrifices, we shall maintain that
necessary strength!

But we could make no more tragic mistake than merely to concentrate on
military strength.

For if we did only this, the future would hold nothing for the world but
an Age of Terror.

And so our second task is to do the constructive work of building a
genuine peace. We must never become so preoccupied with our desire for
military strength that we neglect those areas of economic development,
trade, diplomacy, education, ideas and principles where the foundations
of real peace must be laid. II.

The threat to our safety, and to the hope of a peaceful world, can be
simply stated. It is communist imperialism.

This threat is not something imagined by critics of the Soviets. Soviet
spokesmen, from the beginning, have publicly and frequently declared
their aim to expand their power, one way or another, throughout the
world.

The threat has become increasingly serious as this expansionist aim has
been reinforced by an advancing industrial, military and scientific
establishment.

But what makes the Soviet threat unique in history is its
all--inclusiveness. Every human activity is pressed into service as a
weapon of expansion. Trade, economic development, military power, arts,
science, education, the whole world of ideas--all are harnessed to this
same chariot of expansion.

The Soviets are, in short, waging total cold war.

The only answer to a regime that wages total cold war is to wage total
peace.

This means bringing to bear every asset of our personal and national
lives upon the task of building the conditions in which security and
peace can grow. III.

Among our assets, let us first briefly glance at our military power.

Military power serves the cause of security by making prohibitive the
cost of any aggressive attack.

It serves the cause of peace by holding up a shield behind which the
patient constructive work of peace can go on.

But it can serve neither cause if we make either of two mistakes. The
one would be to overestimate our strength, and thus neglect crucially
important actions in the period just ahead. The other would be to
underestimate our strength. Thereby we might be tempted to become
irresolute in our foreign relations, to dishearten our friends, and to
lose our national poise and perspective in approaching the complex
problems ahead.

Any orderly balance-sheet of military strength must be in two parts. The
first is the position as of today. The second is the position in the
period ahead.

As of today: our defensive shield comprehends a vast complex of ground,
sea, and air units, superbly equipped and strategically deployed around
the world. The most powerful deterrent to war in the world today lies in
the retaliatory power of our Strategic Air Command and the aircraft of
our Navy. They present to any potential attacker who would unleash war
upon the world the prospect of virtual annihilation of his own country.

Even if we assume a surprise attack on our bases, with a marked
reduction in our striking power, our bombers would immediately be on
their way in sufficient strength to accomplish this mission of
retaliation. Every informed government knows this. It is no secret.

Since the Korean Armistice, the American people have spent $225 billion
in maintaining and strengthening this overall defensive shield. This is
the position as of today.

Now as to the period ahead: Every part of our military establishment
must and will be equipped to do its defensive job with the most modern
weapons and methods. But it is particularly important to our planning
that we make a candid estimate of the effect of long-range ballistic
missiles on the present deterrent power I have described.

At this moment, the consensus of opinion is that we are probably
somewhat behind the Soviets in some areas of long-range ballistic
missile development. But it is my conviction, based on close study of
all relevant intelligence, that if we make the necessary effort, we will
have the missiles, in the needed quantity and in time, to sustain and
strengthen the deterrent power of our increasingly efficient bombers.
One encouraging fact evidencing this ability is the rate of progress we
have achieved since we began to concentrate on these missiles.

The intermediate ballistic missiles, Thor and Jupiter, have already been
ordered into production. The parallel progress in the intercontinental
ballistic missile effort will be advanced by our plans for acceleration.
The development of the submarine-based Polaris missile system has
progressed so well that its future procurement schedules are being moved
forward markedly.

When it is remembered that our country has concentrated on the
development of ballistic missiles for only about a third as long as the
Soviets, these achievements show a rate of progress that speaks for
itself. Only a brief time back, we were spending at the rate of only
about one million dollars a year on long range ballistic missiles. In
1957 we spent more than one billion dollars on the Arias, Titan, Thor,
Jupiter, and Polaris programs alone.

But I repeat, gratifying though this rate of progress is, we must still
do more!

Our real problem, then, is not our strength today; it is rather the
vital necessity of action today to ensure our strength tomorrow.

What I have just said applies to our strength as a single country. But
we are not alone. I have returned from the recent NATO meeting with
renewed conviction that, because we are a part of a world-wide community
of free and peaceful nations, our own security is immeasurably
increased.

By contrast, the Soviet Union has surrounded itself with captive and
sullen nations. Like a crack in the crust of an uneasily sleeping
volcano, the Hungarian uprising revealed the depth and intensity of the
patriotic longing for liberty that still burns within these countries.

The world thinks of us as a country which is strong, but which will
never start a war. The world also thinks of us as a land which has never
enslaved anyone and which is animated by humane ideals. This friendship,
based on common ideals, is one of our greatest sources of strength.

It cements into a cohesive security arrangement the aggregate of the
spiritual, military and economic strength of all those nations which,
with us, are allied by treaties and agreements.

Up to this point, I have talked solely about our military strength to
deter a possible future war.

I now want to talk about the strength we need to win a different kind of
war--one that has already been launched against us.

It is the massive economic offensive that has been mounted by the
communist imperialists against free nations.

The communist imperialist regimes have for some time been largely
frustrated in their attempts at expansion based directly on force. As a
result, they have begun to concentrate heavily on economic penetration,
particularly of newly-developing countries, as a preliminary to
political domination.

This non-military drive, if underestimated, could defeat the free world
regardless of our military strength. This danger is all the greater
precisely because many of us fail or refuse to recognize it. Thus, some
people may be tempted to finance our extra military effort by cutting
economic assistance. But at the very time when the economic threat is
assuming menacing proportions, to fail to strengthen our own effort
would be nothing less than reckless folly!

Admittedly, most of us did not anticipate the psychological impact upon
the world of the launching of the first earth satellite. Let us not make
the same kind of mistake in another field, by failing to anticipate the
much more serious impact of the Soviet economic offensive.

As with our military potential, our economic assets are more than equal
to the task. Our independent farmers produce an abundance of food and
fibre. Our free workers are versatile, intelligent, and hardworking. Our
businessmen are imaginative and resourceful. The productivity, the
adaptability of the American economy is the solid foundation-stone of
our security structure.

We have just concluded another prosperous year. Our output was once more
the greatest in the nation's history. In the latter part of the year,
some decline in employment and output occurred, following the
exceptionally rapid expansion of recent years. In a free economy,
reflecting as it does the independent judgments of millions of people,
growth typically moves forward unevenly. But the basic forces of growth
remain unimpaired. There are solid grounds for confidence that economic
growth will be resumed without an extended interruption. Moreover, the
Federal government, constantly alert to signs of weakening in any part
of our economy, always stands ready, with its full power, to take any
appropriate further action to promote renewed business expansion.

If our history teaches us anything, it is this lesson: so far as the
economic potential of our nation is concerned, the believers in the
future of America have always been the realists. I count myself as one
of this company.

Our long-range problem, then, is not the stamina of our enormous engine
of production. Our problem is to make sure that we use these vast
economic forces confidently and creatively, not only in direct military
defense efforts, but likewise in our foreign policy, through such
activities as mutual economic aid and foreign trade.

In much the same way, we have tremendous potential resources on other
non-military fronts to help in countering the Soviet threat: education,
science, research, and, not least, the ideas and principles by which we
live. And in all these cases the task ahead is to bring these resources
more sharply to bear upon the new tasks of security and peace in a
swiftly-changing world. IV.

There are many items in the Administration's program, of a kind
frequently included in a State of the Union Message, with which I am not
dealing today. They are important to us and to our prosperity. But I am
reserving them for treatment in separate communications because of my
purpose today of speaking only about matters bearing directly upon our
security and peace.

I now place before you an outline of action designed to focus our
resources upon the two tasks of security and peace.

In this special category I list eight items requiring action. They are
not merely desirable. They are imperative.

1. DEFENSE REORGANIZATION

The first need is to assure ourselves that military organization
facilitates rather than hinders the functioning of the military
establishment in maintaining the security of the nation.

Since World War II, the purpose of achieving maximum organizational
efficiency in a modern defense establishment has several times
occasioned action by the Congress and by the Executive.

The advent of revolutionary new devices, bringing with them the problem
of overall continental defense, creates new difficulties, reminiscent of
those attending the advent of the airplane half a century ago.

Some of the important new weapons which technology has produced do not
fit into any existing service pattern. They cut across all services,
involve all services, and transcend all services, at every stage from
development to operation. In some instances they defy classification
according to branch of service.

Unfortunately, the uncertainties resulting from such a situation, and
the jurisdictional disputes attending upon it, tend to bewilder and
confuse the public and create the impression that service differences
are damaging the national interest.

Let us proudly remember that the members of the Armed Forces give their
basic allegiance solely to the United States. Of that fact all of us are
certain. But pride of service and mistaken zeal in promoting particular
doctrine has more than once occasioned the kind of difficulty of which I
have just spoken.

I am not attempting today to pass judgment on the charge of harmful
service rivalries. But one thing is sure. Whatever they are, America
wants them stopped.

Recently I have had under special study the never-ending problem of
efficient organization, complicated as it is by new weapons. Soon my
conclusions will be finalized. I shall promptly take such Executive
action as is necessary and, in a separate message, I shall present
appropriate recommendations to the Congress.

Meanwhile, without anticipating the detailed form that a reorganization
should take, I can state its main lines in terms of objectives:

A major purpose of military organization is to achieve real unity in the
Defense establishment in all the principal features of military
activities. Of all these, one of the most important to our nation's
security is strategic planning and control. This work must be done under
unified direction.

The defense structure must be one which, as a whole, can assume, with
top efficiency and without friction, the defense of America. The Defense
establishment must therefore plan for a better integration of its
defensive resources, particularly with respect to the newer weapons now
building and under development. These obviously require full
coordination in their development, production and use. Good organization
can help assure this coordination.

In recognition of the need for single control in some of our most
advanced development projects, the Secretary of Defense has already
decided to concentrate into one organization all the anti-missile and
satellite technology undertaken within the Department of Defense.

Another requirement of military organization is a clear subordination of
the military services to duly constituted civilian authority. This
control must be real; not merely on the surface.

Next there must be assurance that an excessive number of compartments in
organization will not create costly and confusing compartments in our
scientific and industrial effort.

Finally, to end inter-service disputes requires clear organization and
decisive central direction, supported by the unstinted cooperation of
every individual in the defense establishment, civilian and military.

2. ACCELERATED DEFENSE EFFORT

The second major action item is the acceleration of the defense effort
in particular areas affected by the fast pace of scientific and
technological advance.

Some of the points at which improved and increased effort are most
essential are these:

We must have sure warning in case of attack. The improvement of warning
equipment is becoming increasingly important as we approach the period
when long-range missiles will come into use.

We must protect and disperse our striking forces and increase their
readiness for instant reaction. This means more base facilities and
standby crews.

We must maintain deterrent retaliatory power. This means, among other
things, stepped-up long range missile programs; accelerated programs for
other effective missile systems; and, for some years, more advanced
aircraft.

We must maintain freedom of the seas. This means nuclear submarines and
cruisers; improved anti-submarine weapons; missile ships; and the like.

We must maintain all necessary types of mobile forces to deal with local
conflicts, should there be need. This means further improvements in
equipment, mobility, tactics and fire power.

Through increases in pay and incentive, we must maintain in the armed
forces the skilled manpower modern military forces require.

We must be forward-looking in our research and development to anticipate
and achieve the unimagined weapons of the future.

With these and other improvements, we intend to assure that our
vigilance, power, and technical excellence keep abreast of any realistic
threat we face.

3. MUTUAL AID

Third: We must continue to strengthen our mutual security efforts. Most
people now realize that our programs of military aid and defense support
are an integral part of our own defense effort. If the foundations of
the Free World structure were progressively allowed to crumble under the
pressure of communist imperialism, the entire house of freedom would be
in danger of collapse.

As for the mutual economic assistance program, the benefit to us is
threefold. First, the countries receiving this aid become bulwarks
against communist encroachment as their military defenses and economies
are strengthened. Nations that are conscious of a steady improvement in
their industry, education, health and standard of living are not apt to
fall prey to the blandishments of communist imperialists.

Second, these countries are helped to reach the point where mutually
profitable trade can expand between them and us.

Third, the mutual confidence that comes from working together on
constructive projects creates an atmosphere in which real understanding
and peace can flourish.

To help bring these multiple benefits, our economic aid effort should be
made more effective.

In proposals for future economic aid, I am stressing a greater use of
repayable loans, through the Development Loan Fund, through funds
generated by sale of surplus farm products, and through the
Export-Import Bank.

While some increase in Government funds will be required, it remains our
objective to encourage shifting to the use of private capital sources as
rapidly as possible.

One great obstacle to the economic aid program in the past has been, not
a rational argument against it on the merits, but a catchword:
"give-away program."

The real fact is that no investment we make in our own security and
peace can pay us greater dividends than necessary amounts of economic
aid to friendly nations.

This is no "give-away."

Let's stick to facts!

We cannot afford to have one of our most essential security programs
shot down with a slogan!

4. MUTUAL TRADE

Fourth: Both in our national interest, and in the interest of world
peace, we must have a five-year extension of the Trade Agreements Act
with broadened authority to negotiate.

World trade supports a significant segment of American industry and
agriculture. It provides employment for four and one-half million
American workers. It helps supply our ever increasing demand for raw
materials. It provides the opportunity for American free enterprise to
develop on a worldwide scale. It strengthens our friends and increases
their desire to be friends. World trade helps to lay the groundwork for
peace by making all free nations of the world stronger and more
self-reliant.

America is today the world's greatest trading nation. If we use this
great asset wisely to meet the expanding demands of the world, we shall
not only provide future opportunities for our own business, agriculture,
and labor, but in the process strengthen our security posture and other
prospects for a prosperous, harmonious world.

As President McKinley said, as long ago as 1901: "Isolation is no longer
possible or desirable .... The period of exclusiveness is past."

5. SCIENTIFIC COOPERATION WITH OUR ALLIES

Fifth: It is of the highest importance that the Congress enact the
necessary legislation to enable us to exchange appropriate scientific
and technical information with friendly countries as part of our effort
to achieve effective scientific cooperation.

It is wasteful in the extreme for friendly allies to consume talent and
money in solving problems that their friends have already solved--all
because of artificial barriers to sharing. We cannot afford to cut
ourselves off from the brilliant talents and minds of scientists in
friendly countries. The task ahead will be hard enough without handcuffs
of our own making.

The groundwork for this kind of cooperation has already been laid in
discussions among NATO countries. Promptness in following through with
legislation will be the best possible evidence of American unity of
purpose in cooperating with our friends.

6. EDUCATION AND RESEARCH

Sixth: In the area of education and research, I recommend a balanced
program to improve our resources, involving an investment of about a
billion dollars over a four year period. This involves new activities by
the Department of Health, Education and Welfare designed principally to
encourage improved teaching quality and student opportunities in the
interests of national security. It also provides a five-fold increase in
sums available to the National Science Foundation for its special
activities in stimulating and improving science education.

Scrupulous attention has been paid to maintaining local control of
educational policy, spurring the maximum amount of local effort, and to
avoiding undue stress on the physical sciences at the expense of other
branches of learning.

In the field of research, I am asking for substantial increases in basic
research funds, including a doubling of the funds available to the
National Science Foundation for this purpose.

But Federal action can do only a part of the job. In both education and
research, redoubled exertions will be necessary on the part of all
Americans if we are to rise to the demands of our times. This means hard
work on the part of state and local governments, private industry,
schools and colleges, private organizations and foundations, teachers,
parents, and--perhaps most important of all--the student himself, with
his bag of books and his homework.

With this kind of all-inclusive campaign, I have no doubt that we can
create the intellectual capital we need for the years ahead, invest it
in the right places--and do all this, not as regimented pawns, but as
free men and women!

7. SPENDING AND SAVING

Seventh: To provide for this extra effort for security, we must apply
stern tests of priority to other expenditures, both military and
civilian. This extra effort involves, most immediately, the need for a
supplemental defense appropriation of $1.3 billion for fiscal year 1958.

In the 1959 budget, increased expenditures for missiles, nuclear ships,
atomic energy, research and development, science and education, a
special contingency fund to deal with possible new technological
discoveries, and increases in pay and incentives to obtain and retain
competent manpower add up to a total increase over the comparable
figures in the 1957 budget of about $4 billion.

I believe that, in spite of these necessary increases, we should strive
to finance the 1959 security effort out of expected revenues. While we
now believe that expected revenues and expenditures will roughly
balance, our real purpose will be to achieve adequate security, but
always with the utmost regard for efficiency and careful management.

This purpose will require the cooperation of Congress in making careful
analysis of estimates presented, reducing expenditure on less essential
military programs and installations, postponing some new civilian
programs, transferring some to the states, and curtailing or eliminating
others.

Such related matters as the national debt ceiling and tax revenues will
be dealt with in later messages.

8. WORKS OF PEACE

My last call for action is not primarily addressed to the Congress and
people of the United States. Rather, it is a message from the people of
the United States to all other peoples, especially those of the Soviet
Union.

This is the spirit of what we would like to say:

"In the last analysis, there is only one solution to the grim problems
that lie ahead. The world must stop the present plunge toward more and
more destructive weapons of war, and turn the corner that will start our
steps firmly on the path toward lasting peace.

"Our greatest hope for success lies in a universal fact: the people of
the world, as people, have always wanted peace and want peace now.

"The problem, then, is to find a way of translating this universal
desire into action.

"This will require more than words of peace. It requires works of
peace."

Now, may I try to give you some concrete examples of the kind of works
of peace that might make a beginning in the new direction.

For a start our people should learn to know each other better. Recent
negotiations in Washington have provided a basis in principle for
greater freedom of communication and exchange of people. I urge the
Soviet government to cooperate in turning principle into practice by
prompt and tangible actions that will break down the unnatural barriers
that have blocked the flow of thought and understanding between our
people.

Another kind of work of peace is cooperation on projects of human
welfare. For example, we now have it within our power to eradicate from
the face of the earth that age-old scourge of mankind: malaria. We are
embarking with other nations in an all-out five-year campaign to blot
out this curse forever. We invite the Soviets to join with us in this
great work of humanity.

Indeed, we would be willing to pool our efforts with the Soviets in
other campaigns against the diseases that are the common enemy of all
mortals--such as cancer and heart disease.

If people can get together on such projects, is it not possible that we
could then go on to a full-scale cooperative program of Science for
Peace?

We have as a guide and inspiration the success of our Atoms-for-Peace
proposal, which in only a few years, under United Nations auspices,
became a reality in the International Atomic Energy Agency.

A program of Science for Peace might provide a means of funneling into
one place the results of research from scientists everywhere and from
there making it available to all parts of the world.

There is almost no limit to the human betterment that could result from
such cooperation. Hunger and disease could increasingly be driven from
the earth. The age-old dream of a good life for all could, at long last,
be translated into reality.

But of all the works of peace, none is more needed now than a real first
step toward disarmament.

Last August the United Nations General Assembly, by an overwhelming
vote, approved a disarmament plan that we and our allies sincerely
believed to be fair and practical. The Soviets have rejected both the
plan, and the negotiating procedure set up by the United Nations. As a
result, negotiation on this supremely important issue is now at a
stand-still.

But the world cannot afford to stand still on disarmament! We must never
give up the search for a basis of agreement.

Our allies from time to time develop differing ideas on how to proceed.
We must concert these convictions among ourselves. Thereafter, any
reasonable proposal that holds promise for disarmament and reduction of
tension must be heard, discussed, and, if possible, negotiated.

But a disarmament proposal, to hold real promise, must at the minimum
have one feature: reliable means to ensure compliance by all. It takes
actions and demonstrated integrity on both sides to create and sustain
confidence. And confidence in a genuine disarmament agreement is vital,
not only to the signers of the agreement, but also to the millions of
people all over the world who are weary of tensions and armaments.

I say once more, to all peoples, that we will always go the extra mile
with anyone on earth if it will bring us nearer a genuine peace.

CONCLUSION

These, then, are the ways in which we must funnel our energies more
efficiently into the task of advancing security and peace.

These actions demand and expect two things of the American people:
sacrifice, and a high degree of understanding. For sacrifice to be
effective it must be intelligent. Sacrifice must be made for the right
purpose and in the right place--even if that place happens to come close
to home!

After all, it is no good demanding sacrifice in general terms one day,
and the next day, for local reasons, opposing the elimination of some
unneeded Federal facility.

It is pointless to condemn Federal spending in general, and the next
moment condemn just as strongly an effort to reduce the particular
Federal grant that touches one's own interest.

And it makes no sense whatever to spend additional billions on military
strength to deter a potential danger, and then, by cutting aid and trade
programs, let the world succumb to a present danger in economic guise.

My friends of the Congress: The world is waiting to see how wisely and
decisively a free representative government will now act.

I believe that this Congress possesses and will display the wisdom
promptly to do its part in translating into law the actions demanded by
our nation's interests. But, to make law effective, our kind of
government needs the full voluntary support of millions of Americans for
these actions.

I am fully confident that the response of the Congress and of the
American people will make this time of test a time of honor. Mankind
then will see more clearly than ever that the future belongs, not to the
concept of the regimented atheistic state, but to the people--the
God-fearing, peace-loving people of all the world.

The Address as reported from the floor appears in the Congressional
Record (vol. 104, p. 171).

***

State of the Union Address
Dwight D. Eisenhower
January 9, 1959

Mr. President, Mr. Speaker, Members of the 86th Congress, my fellow
citizens:

This is the moment when Congress and the Executive annually begin their
cooperative work to build a better America.

One basic purpose unites us: To promote strength and security, side by
side with liberty and opportunity.

As we meet today, in the 170th year of the Republic, our Nation must
continue to provide--as all other free governments have had to do
throughout time--a satisfactory answer to a question as old as history.
It is: Can Government based upon liberty and the God-given rights of
man, permanently endure when ceaselessly challenged by a dictatorship,
hostile to our mode of life, and controlling an economic and military
power of great and growing strength?

For us the answer has always been found, and is still found in the
devotion, the vision, the courage and the fortitude of our people.

Moreover, this challenge we face, not as a single powerful nation, but
as one that has in recent decades reached a position of recognized
leadership in the Free World.

We have arrived at this position of leadership in an era of remarkable
productivity and growth. It is also a time when man's power of mass
destruction has reached fearful proportions.

Possession of such capabilities helps create world suspicion and
tension. We, on our part, know that we seek only a just peace for all,
with aggressive designs against no one. Yet we realize that there is
uneasiness in the world because of a belief on the part of peoples that
through arrogance, miscalculation or fear of attack, catastrophic war
could be launched. Keeping the peace in today's world more than ever
calls for the utmost in the nation's resolution, wisdom, steadiness and
unremitting effort.

We cannot build peace through desire alone. Moreover, we have learned
the bitter lesson that international agreements, historically considered
by us as sacred, are regarded in Communist doctrine and in practice to
be mere scraps of paper. The most recent proof of their disdain of
international obligations, solemnly undertaken, is their announced
intention to abandon their responsibilities respecting Berlin.

As a consequence, we can have no confidence in any treaty to which
Communists are a party except where such a treaty provides within itself
for self-enforcing mechanisms. Indeed, the demonstrated disregard of the
Communists of their own pledges is one of the greatest obstacles to
success in substituting the Rule of Law for rule by force.

Yet step by step we must strengthen the institutions of peace--a peace
that rests upon justice--a peace that depends upon a deep knowledge and
dear understanding by all peoples of the cause and consequences of
possible failure in this great purpose.

To achieve this peace we seek to prevent war at any place and in any
dimension. If, despite our best efforts, a local dispute should flare
into armed hostilities, the next problem would be to keep the conflict
from spreading, and so compromising freedom. In support of these
objectives we maintain forces of great power and flexibility.

Our formidable air striking forces are a powerful deterrent to general
war. Large and growing portions of these units can depart from their
bases in a matter of minutes.

Similar forces are included in our naval fleets.

Ground and other tactical formations can move with swiftness and
precision, when requested by friendly and responsible governments, to
help curb threatened aggression. The stabilizing influence of this
capacity has been dramatically demonstrated more than once over the past
year.

Our military and related scientific progress has been highly gratifying.

Great strides have been made in the development of ballistic missiles.
Intermediate range missiles are now being deployed in operational units.
The Arias intercontinental ballistic missile program has been marked by
rapid development as evidenced by recent successful tests. Missile
training units have been established and launching sites are far along
in construction.

New aircraft that fly at twice the speed of sound are entering our
squadrons.

We have successfully placed five satellites in orbit, which have
gathered information of scientific importance never before available.
Our latest satellite illustrates our steady advance in rocketry and
foreshadows new developments in world-wide communications.

Warning systems constantly improve.

Our atomic submarines have shattered endurance records and made historic
voyages under the North Polar Sea.

A major segment of our national scientific and engineering community is
working intensively to achieve new and greater developments. Advance in
military technology requires adequate financing but, of course, even
more, it requires talent and time.

All this is given only as a matter of history; as a record of our
progress in space and ballistic missile fields in no more than four
years of intensive effort. At the same time we clearly recognize that
some of the recent Soviet accomplishments in this particular technology
are indeed brilliant.

Under the law enacted last year the Department of Defense is being
reorganized to give the Secretary of Defense full authority over the
military establishment. Greater efficiency, more cohesive effort and
speedier reaction to emergencies are among the many advantages we are
already noting from these changes.

These few highlights point up our steady military gains. We are
rightfully gratified by the achievements they represent. But we must
remember that these imposing armaments are purchased at great cost.

National Security programs account for nearly sixty percent of the
entire Federal budget for this coming fiscal year.

Modern weapons are exceedingly expensive.

The overall cost of introducing ATLAS into our armed forces will average
$35 million per missile on the firing line.

This year we are investing an aggregate of close to $7 billion in
missile programs alone.

Other billions go for research, development, test and evaluation of new
weapons systems.

Our latest atomic submarines will cost $50 millions each, while some
special types will cost three times as much.

We are now ordering fighter aircraft which are priced at fifty times as
much as the fighters of World War II.

We are buying certain bombers that cost their weight in gold.

These sums are tremendous, even when compared with the marvelous
resiliency and capacity of our economy.

Such expenditures demand both balance and perspective in our planning
for defense. At every turn, we must weigh, judge and select. Needless
duplication of weapons and forces must be avoided.

We must guard against feverish building of vast armaments to meet glibly
predicted moments of so-called "maximum peril." The threat we face is
not sporadic or dated: It is continuous. Hence we must not be swayed in
our calculations either by groundless fear or by complacency. We must
avoid extremes, for vacillation between extremes is inefficient, costly,
and destructive of morale. In these days of unceasing technological
advance, we must plan our defense expenditures systematically and with
care, fully recognizing that obsolescence compels the never-ending
replacement of older weapons with new ones.

The defense budget for the coming year has been planned on the basis of
these principles and considerations. Over these many months I have
personally participated in its development.

The aim is a sensible posture of defense. The secondary aim is increased
efficiency and avoidance of waste. Both are achieved by this budgetary
plan.

Working by these guide lines I believe with all my heart that America
can be as sure of the strength and efficiency of her armed forces as she
is of their loyalty. I am equally sure that the nation will thus avoid
useless expenditures which, in the name of security, might tend to
undermine the economy and, therefore, the nation's safety.

Our own vast strength is only a part of that required for dependable
security. Because of this we have joined with nearly 50 other nations in
collective security arrangements. In these common undertakings each
nation is expected to contribute what it can in sharing the heavy load.
Each supplies part of a strategic deployment to protect the forward
boundaries of freedom.

Constantly we seek new ways to make more effective our contribution to
this system of collective security. Recently I have asked a Committee of
eminent Americans of both parties to re-appraise our military assistance
programs and the relative emphasis which should be placed on military
and economic aid.

I am hopeful that preliminary recommendations of this Committee will be
available in time to assist in shaping the Mutual Security program for
the coming fiscal year.

Any survey of the free world's defense structure cannot fail to impart a
feeling of regret that so much of our effort and resources must be
devoted to armaments. At Geneva and elsewhere we continue to seek
technical and other agreements that may help to open up, with some
promise, the issues of international disarmament. America will never
give up the hope that eventually all nations can, with mutual
confidence, drastically reduce these non-productive expenditures. II.

The material foundation of our national safety is a strong and expanding
economy. This we have--and this we must maintain. Only with such an
economy can we be secure and simultaneously provide for the well-being
of our people.

A year ago the nation was experiencing a decline in employment and
output. Today that recession is fading into history, and this without
gigantic, hastily-improvised public works projects or untimely tax
reductions. A healthy and vigorous recovery has been under way since
last May. New homes are being built at the highest rate in several
years. Retail sales are at peak levels. Personal income is at an
all-time high.

The marked forward thrust of our economy reaffirms our confidence in
competitive enterprise. But--clearly--wisdom and prudence in both the
public and private sectors of the economy are always necessary.

Our outlook is this: 1960 commitments for our armed forces, the Atomic
Energy Commission and Military Assistance exceed 47 billion dollars. In
the foreseeable future they are not likely to be significantly lower.
With an annual population increase of three million, other governmental
costs are bound to mount.

After we have provided wisely for our military strength, we must judge
how to allocate our remaining government resources most effectively to
promote our well-being and economic growth.

Federal programs that will benefit all citizens are moving forward.

Next year we will be spending increased amounts on health programs; on
Federal assistance to science and education; on the development of the
nation's water resources; on the renewal of urban areas; and on our vast
system of Federal-aid highways.

Each of these additional outlays is being made necessary by the surging
growth of America.

Let me illustrate. Responsive to this growth, Federal grants and long
term loans to assist 14 major types of capital improvements in our
cities will total over 2 billion dollars in 1960--double the expenditure
of two years ago. The major responsibility for development in these
fields rests in the localities, even though the Federal Government will
continue to do its proper part in meeting the genuine needs of a
burgeoning population.

But the progress of our economy can more than match the growth of our
needs. We need only to act wisely and confidently.

Here, I hope you will permit me to digress long enough to express
something that is much on my mind.

The basic question facing us today is more than mere survival--the
military defense of national life and territory. It is the preservation
of a way of life.

We must meet the world challenge and at the same time permit no
stagnation in America.

Unless we progress, we regress.

We can successfully sustain security and remain true to our heritage of
freedom if we clearly visualize the tasks ahead and set out to perform
them with resolution and fervor. We must first define these tasks and
then understand what we must do to perform them.

If progress is to be steady we must have long term guides extending far
ahead, certainly five, possibly even ten years. They must reflect the
knowledge that before the end of five years we will have a population of
over 190 million. They must be goals that stand high, and so inspire
every citizen to climb always toward mounting levels of moral,
intellectual and material strength. Every advance toward them must stir
pride in individual and national achievements.

To define these goals, I intend to mobilize help from every available
source.

We need more than politically ordained national objectives to challenge
the best efforts of free men and women. A group of selfless and devoted
individuals, outside of government, could effectively participate in
making the necessary appraisal of the potentials of our future. The
result would be establishment of national goals that would not only spur
us on to our finest efforts, but would meet the stern test of
practicality.

The Committee I plan will comprise educators and representatives of
labor, management, finance, the professions and every other kind of
useful activity.

Such a study would update and supplement, in the light of continuous
changes in our society and its economy, the monumental work of the
Committee on Recent Social Trends which was appointed in 1931 by
President Hoover. Its report has stood the test of time and has had a
beneficial influence on national development. The new Committee would be
concerned, among other things, with the acceleration of our economy's
growth and the living standards of our people, their health and
education, their better assurance of life and liberty and their greater
opportunities. It would also be concerned with methods to meet such
goals and what levels of government--Local, State, or Federal--might or
should be particularly concerned.

As one example, consider our schools, operated under the authority of
local communities and states. In their capacity and in their quality
they conform to no recognizable standards. In some places facilities are
ample, in others meager. Pay of teachers ranges between wide limits,
from the adequate to the shameful. As would be expected, quality of
teaching varies just as widely. But to our teachers we commit the most
valuable possession of the nation and of the family--our children.

We must have teachers of competence. To obtain and hold them we need
standards. We need a National Goal. Once established I am certain that
public opinion would compel steady progress toward its accomplishment.

Such studies would be helpful, I believe, to government at all levels
and to all individuals. The goals so established could help us see our
current needs in perspective. They will spur progress.

We do not forget, of course, that our nation's progress and fiscal
integrity are interdependent and inseparable. We can afford everything
we clearly need, but we cannot afford one cent of waste. We must examine
every item of governmental expense critically. To do otherwise would
betray our nation's future. Thrift is one of the characteristics that
has made this nation great. Why should we ignore it now?

We must avoid any contribution to inflationary processes, which could
disrupt sound growth in our economy.

Prices have displayed a welcome stability in recent months and, if we
are wise and resolute, we will not tolerate inflation in the years to
come. But history makes clear the risks inherent in any failure to deal
firmly with the .basic causes of inflation. Two of the most important of
these causes are the wage-price spiral and continued deficit financing.

Inflation would reduce job opportunities, price us out of world markets,
shrink the value of savings and penalize the thrift so essential to
finance a growing economy.

Inflation is not a Robin Hood, taking from the rich to give to the poor.
Rather, it deals most cruelly with those who can least protect
themselves. It strikes hardest those millions of our citizens whose
incomes do not quickly rise with the cost of living. When prices soar,
the pensioner and the widow see their security undermined, the man of
thrift sees his savings melt away; the white collar worker, the
minister, and the teacher see their standards of living dragged down.

Inflation can be prevented. But this demands statesmanship on the part
of business and labor leaders and of government at all levels.

We must encourage the self-discipline, the restraint necessary to curb
the wage-price spiral and we must meet current costs from current
revenue.

To minimize the danger of future soaring prices and to keep our economy
sound and expanding, I shall present to the Congress certain proposals.

First, I shall submit a balanced budget for the next year, a year
expected to be the most prosperous in our history. It is a realistic
budget with wholly attainable objectives.

If we cannot live within our means during such a time of rising
prosperity, the hope for fiscal integrity will fade. If we persist in
living beyond our means, we make it difficult for every family in our
land to balance its own household budget. But to live within our means
would be a tangible demonstration of the self-discipline needed to
assure a stable dollar.

The Constitution entrusts the Executive with many functions, but the
Congress--and the Congress alone--has the power of the purse. Ultimately
upon Congress rests responsibility for determining the scope and amount
of Federal spending.

By working together, the Congress and the Executive can keep a balance
between income and outgo. If this is done there is real hope that we can
look forward to a time in the foreseeable future when needed tax reforms
can be accomplished.

In this hope, I am requesting the Secretary of the Treasury to prepare
appropriate proposals for revising, at the proper time, our tax
structure, to remove inequities and to enhance incentives for all
Americans to work, to save, and to invest. Such recommendations will be
made as soon as our fiscal condition permits. These prospects will be
brightened if 1960 expenditures do not exceed the levels recommended.

Second, I shall recommend to the Congress that the Chief Executive be
given the responsibility either to approve or to veto specific items in
appropriations and authorization bills. This would save tax dollars.

Third, to reduce Federal operations in an area where private enterprise
can do the job, I shall recommend legislation for greater flexibility in
extending Federal credit, and in improving the procedures under which
private credits are insured or guaranteed. Present practices have
needlessly added large sums to Federal expenditures.

Fourth, action is required to make more effective use of the large
Federal expenditures for agriculture and to achieve greater fiscal
control in this area.

Outlays of the Department of Agriculture for the current fiscal year for
the support of farm prices on a very few farm products will exceed five
billion dollars. That is a sum equal to approximately two-fifths of the
net income of all farm operators in the entire United States.

By the end of this fiscal year it is estimated that there will be in
Government hands surplus farm products worth about nine billion dollars.
And by July 1, 1959, Government expenditures for storage, interest, and
handling of its agricultural inventory will reach a rate of one billion
dollars a year.

This level of expenditure for farm products could be made willingly for
a temporary period if it were leading to a sound solution of the
problem. But unfortunately this is not true. We need new legislation.

In the past I have sent messages to the Congress requesting greater
freedom for our farmers to manage their own farms and greater freedom
for markets to reflect the wishes of producers and consumers.
Legislative changes that followed were appropriate in direction but did
not go far enough.

The situation calls for prompt and forthright action. Recommendation for
action will be contained in a message to be transmitted to the Congress
shortly.

These fiscal and related actions will help create an environment of
price stability for economic growth. However, certain additional
measures are needed.

I shall ask Congress to amend the Employment Act of 1946 to make it
clear that Government intends to use all appropriate means to protect
the buying power of the dollar.

I am establishing a continuing Cabinet group on Price Stability for
Economic Growth to study governmental and private policies affecting
costs, prices, and economic growth. It will strive also to build a
better public understanding of the conditions necessary for maintaining
growth and price stability.

Studies are being undertaken to improve our information on prices,
wages, and productivity.

I believe all citizens in all walks of life will support this program of
action to accelerate economic growth and promote price stability. III.

I take up next certain aspects of our international situation and our
programs to strengthen it.

America's security can be assured only within a world community strong,
stable, independent nations, in which the concepts of freedom, justice
and human dignity can flourish.

There can be no such thing as Fortress America. If ever we were reduced
to the isolation implied by that term, we would occupy a prison, not a
fortress. The question whether we can afford to help other nations that
want to defend their freedom but cannot fully do so from their own
means, has only one answer: we can and we must, we have been doing so
since 1947.

Our foreign policy has long been dedicated to building a permanent and
just peace.

During the past six years our free world security arrangements have been
bolstered and the bonds of freedom have been more closely knit. Our
friends in Western Europe are experiencing new internal vitality, and
are increasingly more able to resist external threats.

Over the years the world has come to understand clearly that it is our
firm policy not to countenance aggression. In Lebanon, Taiwan, and
Berlin--our stand has been dear, right, and expressive of the determined
will of a united people.

Acting with other free nations we have undertaken the solemn obligation
to defend the people of free Berlin against any effort to destroy their
freedom. In the meantime we shall constantly seek meaningful agreements
to settle this and other problems, knowing full well that not only the
integrity of a single city, but the hope of all free peoples is at
stake.

We need, likewise, to continue helping to build the economic base so
essential to the Free World's stability and strength.

The International Monetary Fund and the World Bank have both fully
proven their worth as instruments of international financial
cooperation. Their Executive Directors have recommended an increase in
each member country's subscription. I am requesting the Congress for
immediate approval of our share of these increases.

We are now negotiating with representatives of the twenty Latin American
Republics for the creation of an inter-American financial institution.
Its purpose would be to join all the American Republics in a common
institution which would promote and finance development in Latin
America, and make more effective the use of capital from the World Bank,
the Export-Import Bank, and private sources.

Private enterprise continues to make major contributions to economic
development in all parts of the world. But we have not yet marshalled
the full potential of American business for this task, particularly in
countries which have recently attained their independence. I shall
present to this Congress a program designed to encourage greater
participation by private enterprise in economic development abroad.

Further, all of us know that to advance the cause of freedom we must do
much more than help build sound economies. The spiritual, intellectual,
and physical strength of people throughout the world will in the last
analysis determine their willingness and their ability to resist
Communism.

To give a single illustration of our many efforts in these fields: We
have been a participant in the effort that has been made over the past
few years against one of the great scourges of mankind--disease. Through
the Mutual Security program public health officials are being trained by
American universities to serve in less developed countries. We are
engaged in intensive malaria eradication projects in many parts of the
world. America's major successes in our own country prove the
feasibility of success everywhere.

By these and other means we shall continue and expand our campaign
against the afflictions that now bring needless suffering and death to
so many of the world's people. We wish to be part of a great shared
effort toward the triumph of health. IV.

America is best described by one word, freedom.

If we hope to strengthen freedom in the world we must be ever mindful of
how our own conduct reacts elsewhere. No nation has ever been so
floodlighted by world opinion as the United States is today. Everything
we do is carefully scrutinized by other peoples throughout the world.
The bad is seen along with the good.

Because we are human we err. But as free men we are also responsible for
correcting the errors and imperfections of our ways.

Last January I made comprehensive recommendations to the Congress for
legislation in the labor-management field. To my disappointment,
Congress failed to act. The McClellan Committee disclosures of
corruption, racketeering, and abuse of trust and power in
labor-management affairs have aroused America and amazed other peoples.
They emphasize the need for improved local law enforcement and the
enactment of effective Federal legislation to protect the public
interest and to insure the rights and economic freedoms of millions of
American workers. Halfhearted measures will not do. I shall recommend
prompt enactment of legislation designed:

To safeguard workers' funds in union treasuries against misuse of any
kind whatsoever.

To protect the rights and freedoms of individual union members,
including the basic right to free and secret elections of officers.

To advance true and responsible collective bargaining.

To protect the public and innocent third parties from unfair and
coercive practices such as boycotting and blackmail picketing.

The workers and the public must have these vital protections.

In other areas of human rights--freedom from discrimination in voting,
in public education, in access to jobs, and in other respects--the world
is likewise watching our conduct.

The image of America abroad is not improved when school children,
through closing of some of our schools and through no fault of their
own, are deprived of their opportunity for an education.

The government of a free people has no purpose more noble than to work
for the maximum realization of equality of opportunity under law. This
is not the sole responsibility of any one branch of our government. The
judicial arm, which has the ultimate authority for interpreting the
Constitution, has held that certain state laws and practices
discriminate upon racial grounds and are unconstitutional. Whenever the
supremacy of the Constitution of the United States is challenged I shall
continue to take every action necessary to uphold it.

One of the fundamental concepts of our constitutional system is that it
guarantees to every individual, regardless of race, religion, or
national origin, the equal protection of the laws. Those of us who are
privileged to hold public office have a solemn obligation to make
meaningful this inspiring objective. We can fulfill that obligation by
our leadership in teaching, persuading, demonstrating, and in enforcing
the law.

We are making noticeable progress in the field of civil rights--we are
moving forward toward achievement of equality of opportunity for all
people everywhere in the United States. In the interest of the nation
and of each of its citizens, that progress must continue.

Legislative proposals of the Administration in this field will be
submitted to the Congress early in the session. All of us should help to
make clear that the government is united in the common purpose of giving
support to the law and the decisions of the Courts.

By moving steadily toward the goal of greater freedom under law, for our
own people, we shall be the better prepared to work for the cause of
freedom under law throughout the world.

All peoples are solely tired of the fear, destruction, and the waste of
war. As never before, the world knows the human and material costs of
war and seeks to replace force with a genuine role of law among nations.

It is my purpose to intensify efforts during the coming two years in
seeking ways to supplement the procedures of the United Nations and
other bodies with similar objectives, to the end that the rule of law
may replace the rule of force in the affairs of nations. Measures toward
this end will be proposed later, including a re-examination of our own
relation to the International Court of Justice.

Finally--let us remind ourselves that Marxist scripture is not new; it
is not the gospel of the future. Its basic objective is dictatorship,
old as history. What is new is the shining prospect that man can build a
world where all can live in dignity.

We seek victory--not over any nation or people--but over the ancient
enemies of us all; victory over ignorance, poverty, disease, and human
degradation wherever they may be found.

We march in the noblest of causes--human freedom.

If we make ourselves worthy of America's ideals, if we do not forget
that our nation was founded on the premise that all men are creatures of
God's making, the world will come to know that it is free men who carry
forward the true promise of human progress and dignity.

The Address as reported from the floor appears in the Congressional
Record of January 9, 1959 (vol. 105, p. 163).

***

State of the Union Address
Dwight D. Eisenhower
January 7, 1960

Mr. President, Mr. Speaker, Members of the 86th Congress:

Seven years ago I entered my present office with one long-held resolve
overriding all others. I was then, and remain now, determined that the
United States shall become an ever more potent resource for the cause of
peace--realizing that peace cannot be for ourselves alone, but for
peoples everywhere. This determination is shared by the entire
Congress--indeed, by all Americans.

My purpose today is to discuss some features of America's position, both
at home and in her relations to others.

First, I point out that for us, annual self-examination is made a
definite necessity by the fact that we now live in a divided world of
uneasy equilibrium, with our side committed to its own protection and
against aggression by the other.

With both sides of this divided world in possession of unbelievably
destructive weapons, mankind approaches a state where mutual
annihilation becomes a possibility. No other fact of today's world
equals this in importance--it colors everything we say, plan, and do.

There is demanded of us, vigilance, determination, and the dedication of
whatever portion of our resources that will provide adequate security,
especially a real deterrent to aggression. These things we are doing.

All these facts emphasize the importance of striving incessantly for a
just peace.

Only through the strengthening of the spiritual, intellectual, economic
and defensive resources of the Free World can we, in confidence, make
progress toward this goal.

Second, we note that recent Soviet deportment and pronouncements suggest
the possible opening of a somewhat less strained period in the
relationships between the Soviet Union and the Free World. If these
Pronouncements be genuine, there is brighter hope of diminishing the
intensity of past rivalry and eventually of substituting persuasion for
coercion. Whether this is to become an era of lasting promise remains to
be tested by actions.

Third, we now stand in the vestibule of a vast new technological age-one
that, despite its capacity for human destruction, has an equal capacity
to make poverty and human misery obsolete. If our efforts are wisely
directed--and if our unremitting efforts for dependable peace begin to
attain some success--we can surely become participants in creating an
age characterized by justice and rising levels of human well-being.

Over the past year the Soviet Union has expressed an interest in
measures to reduce the common peril of war.

While neither we nor any other Free World nation can permit ourselves to
be misled by pleasant promises until they are tested by performance, yet
we approach this apparently new opportunity with the utmost seriousness.
We must strive to break the calamitous cycle of frustrations and crises
which, if unchecked, could spiral into nuclear disaster; the ultimate
insanity.

Though the need for dependable agreements to assure against resort to
force in settling disputes is apparent to both sides yet as in other
issues dividing men and nations, we cannot expect sudden and
revolutionary results. But we must find some place to begin.

One obvious road on which to make a useful start is in the widening of
communication between our two peoples. In this field there are, both
sides willing, countless opportunities--most of them well known to us
all--for developing mutual understanding, the true foundation of peace.

Another avenue may be through the reopening, on January twelfth, of
negotiations looking to a controlled ban on the testing of nuclear
weapons. Unfortunately, the closing statement from the Soviet scientists
who met with our scientists at Geneva in an unsuccessful effort to
develop an agreed basis for a test ban, gives the clear impression that
their conclusions have been politically guided. Those of the British and
American scientific representatives are their own freely-formed,
individual and collective opinion. I am hopeful that as new negotiations
begin, truth--not political opportunism--will be the guiding light of
the deliberations.

Still another avenue may be found in the field of disarmament, in which
the Soviets have professed a readiness to negotiate seriously. They have
not, however, made clear the plans they may have, if any, for mutual
inspection and verification--the essential condition for any extensive
measure of disarmament.

There is one instance where our initiative for peace has recently been
successful. A multi-lateral treaty signed last month provides for the
exclusively peaceful use of Antarctica, assured by a system of
inspection. It provides for free and cooperative scientific research in
that continent, and prohibits nuclear explosions there pending general
international agreement on the subject. The Treaty is a significant
contribution toward peace, international cooperation, and the
advancement of science. I shall transmit its text to the Senate for
consideration and approval in the near future.

The United States is always ready to participate with the Soviet Union
in serious discussion of these or any other subjects that may lead to
peace with justice.

Certainly it is not necessary to repeat that the United States has no
intention of interfering in the internal affairs of any nation; likewise
we reject any attempt to impose its system on us or on other peoples by
force or subversion.

This concern for the freedom of other peoples is the intellectual and
spiritual cement which has allied us with more than forty other nations
in a common defense effort. Not for a moment do we forget that our own
fate is firmly fastened to that of these countries; we will not act in
any way which would jeopardize our solemn commitments to them.

We and our friends are, of course, concerned with self-defense. Growing
out of this concern is the realization that all people of the Free World
have a great stake in the progress, in freedom, of the uncommitted and
newly emerging nations. These peoples, desperately hoping to lift
themselves to decent levels of living must not, by our neglect, be
forced to seek help from, and finally become virtual satellites of,
those who proclaim their hostility to freedom.

Their natural desire for a better life must not be frustrated by
withholding from them necessary technical and investment assistance.
This is a problem to be solved not by America alone, but also by every
nation cherishing the same ideals and in position to provide help.

In recent years America's partners and friends in Western Europe and
Japan have made great economic progress. Their newly found economic
strength is eloquent testimony to the striking success of the policies
of economic cooperation which we and they have pursued.

The international economy of 1960 is markedly different from that of the
early postwar years. No longer is the United States the only major
industrial country capable of providing substantial amounts of the
resources so urgently needed in the newly-developing countries.

To remain secure and prosperous themselves, wealthy nations must extend
the kind of cooperation to the less fortunate members that will inspire
hope, confidence and progress. A rich nation can for a time, without
noticeable damage to itself, pursue a course of self-indulgence, making
its single goal the material ease and comfort of its own citizens-thus
repudiating its own spiritual and material stake in a peaceful and
prosperous society of nations. But the enmities it will incur, the
isolation into which it will descend, and the internal moral and
physical softness that will be engendered, will, in the long term, bring
it to disaster.

America did not become great through softness and self-indulgence. Her
miraculous progress and achievements flow from other qualities far more
worthy and substantial--

--adherence to principles and methods consonant with our religious
philosophy

--a satisfaction in hard work

--the readiness to sacrifice for worthwhile causes

--the courage to meet every challenge to her progress

--the intellectual honesty and capacity to recognize the true path of
her own best interests.

To us and to every nation of the Free World, rich or poor, these
qualities are necessary today as never before if we are to march
together to greater security, prosperity and peace.

I believe the industrial countries are ready to participate actively in
supplementing the efforts of the developing countries to achieve
progress.

The immediate need for this kind of cooperation is underscored by the
strain in our international balance of payments. Our surplus from
foreign business transactions has in recent years fallen substantially
short of the expenditures we make abroad to maintain our military
establishments overseas, to finance private investment, and to provide
assistance to the less developed nations. In 1959 our deficit in balance
of payments approached $4 billion.

Continuing deficits of anything like this magnitude would, over time,
impair our own economic growth and check the forward progress of the
Free World.

We must meet this situation by promoting a rising volume of exports and
world trade. Further, we must induce all industrialized nations of the
Free World to work together in a new cooperative endeavor to help lift
the scourge of poverty from less fortunate nations. This will provide
for better sharing of this burden and for still further profitable
trade.

New nations, and others struggling with the problems of development,
will progress only if they demonstrate faith in their own destiny and
possess the will and use their own resources to fulfill it. Moreover,
progress in a national transformation can be only gradually earned;
there is no easy and quick way to follow from the oxcart to the jet
plane. But, just as we drew on Europe for assistance in our earlier
years, so now do those new and emerging nations that have this faith and
determination deserve help.

Over the last fifteen years, twenty nations have gained political
independence. Others are doing so each year. Most of them are woefully
lacking in technical capacity and in investment capital; without Free
World support in these matters they cannot effectively progress in
freedom.

Respecting their need, one of the major focal points of our concern is
the South Asian region. Here, in two nations alone, are almost five
hundred million people, all working, and working hard, to raise their
standards, and in doing so, to make of themselves a strong bulwark
against the spread of an ideology that would destroy liberty.

I cannot express to you the depth of my conviction that, in our own and
Free World interests, we must cooperate with others to help these people
achieve their legitimate ambitions, as expressed in their different
multi-year plans. Through the World Bank and other instrumentalities, as
well as through individual action by every nation in position to help,
we must squarely face this titanic challenge.

All of us must realize, of course, that development in freedom by the
newly emerging nations, is no mere matter of obtaining outside financial
assistance. An indispensable element in this process is a strong and
continuing determination on the part of these nations to exercise the
national discipline necessary for any sustained development period.
These qualities of determination are particularly essential because of
the fact that the process of improvement will necessarily be gradual and
laborious rather than revolutionary. Moreover, everyone should be aware
that the development process is no short term phenomenon. Many years are
required for even the most favorably situated countries.

I shall continue to urge the American people, in the interests of their
own security, prosperity and peace, to make sure that their own part of
this great project be amply and cheerfully supported. Free World
decisions in this matter may spell the difference between world disaster
and world progress in freedom.

Other countries, some of which I visited last month, have similar needs.

A common meeting ground is desirable for those nations which are
prepared to assist in the development effort. During the past year I
have discussed this matter with the leaders of several Western Nations.

Because of its wealth of experience, the Organization for European
Economic Cooperation could help with initial studies. The goal is to
enlist all available economic resources in the industrialized Free
World-especially private investment capital. But I repeat that .this
help, no matter how great, can be lastingly effective only if it is used
as a supplement to the strength of spirit and will of the people of the
newly-developing nations.

By extending this help we hope to make possible the enthusiastic
enrollment of these nations under freedom's banner. No more startling
contrast to a system of sullen satellites could be imagined.

If we grasp this opportunity to build an age of productive partnership
between the less fortunate nations and those that have already achieved
a high state of economic advancement, we will make brighter the outlook
for a world order based upon security, freedom and peace. Otherwise, the
outlook could be dark indeed. We face what may be a turning point in
history, and we must act decisively.

As a nation we can successfully pursue these objectives only from a
position of broadly based strength.

No matter how earnest is our quest for guaranteed peace, we must
maintain a high degree of military effectiveness at the same time we are
engaged in negotiating the issue of arms reduction. Until tangible and
mutually enforceable arms reduction measures are worked out, we will not
weaken the means of defending our institutions.

America possesses an enormous defense power. It is my studied conviction
that no nation will ever risk general war against us unless we should be
so foolish as to neglect the defense forces we now so powerfully
support. It is world-wide knowledge that any nation which might be
tempted today to attack the United States, even though our country might
sustain great losses, would itself promptly suffer a terrible
destruction. But I once again assure all peoples and all nations that
the United States, except in defense, will never turn loose this
destructive power.

During the past year, our long-range striking power, unmatched today in
manned bombers, has taken on new strength as the Atlas intercontinental
ballistic missile has entered the operational inventory. In fourteen
recent test launchings, at ranges of over 5,000 miles, Atlas has been
striking on an average within two miles of the target. This is less than
the length of a jet runway--well within the circle of total destruction.
Such performance is a great tribute to American scientists and
engineers, who in the past five years have had to telescope time and
technology to develop these long-range ballistic missiles, where America
had none before.

This year, moreover, growing numbers of nuclear-powered submarines will
enter our active forces, some to be armed with Polaris missiles. These
remarkable ships and weapons, ranging the oceans, will be capable of
accurate fire on targets virtually anywhere on earth. Impossible to
destroy by surprise attack, they will become one of our most effective
sentinels for peace.

To meet situations of less than general nuclear war, we continue to
maintain our carrier forces, our many service units abroad, our always
ready Army strategic forces and Marine Corps divisions, and the civilian
components. The continuing modernization of these forces is a costly but
necessary process, and is scheduled to go forward at a rate which will
steadily add to our strength.

The deployment of a portion of these forces beyond our shores, on land
and sea, is persuasive demonstration of our determination to stand
shoulder-to-shoulder with our allies for collective security. Moreover,
I have directed that steps be taken to program our military assistance
to these allies on a longer range basis. This is necessary for a sounder
collective defense system.

Next I refer to our effort in space exploration, which is often
mistakenly supposed to be an integral part of defense research and
development.

First, America has made great contributions in the past two years to the
world's fund of knowledge of astrophysics and space science. These
discoveries are of present interest chiefly to the scientific community;
but they are important foundation-stones for more extensive exploration
of outer space for the ultimate benefit of all mankind.

Second, our military missile program, going forward so successfully,
does not suffer from our present lack of very large rocket engines,
which are so necessary in distant space exploration. I am assured by
experts that the thrust of our present missiles is fully adequate for
defense requirements.

Third, the United States is pressing forward in the development of large
rocket engines to place much heavier vehicles into space for exploration
purposes.

Fourth, in the meantime, it is necessary to remember that we have only
begun to probe the environment immediately surrounding the earth. Using
launch systems presently available, we are developing satellites to
scout the world's weather; satellite relay stations to facilitate and
extend communications over the globe; for navigation aids to give
accurate bearings to ships and aircraft; and for perfecting instruments
to collect and transmit the data we seek. This is the area holding the
most promise for early and useful applications of space technology.

Fifth, we have just completed a year's experience with our new space
law. I believe it deficient in certain particulars and suggested
improvements will be submitted shortly.

The accomplishment of the many tasks I have alluded to requires the
continuous strengthening of the spiritual, intellectual, and economic
sinews of American life. The steady purpose of our society is to assure
justice, before God, for every individual. We must be ever alert that
freedom does not wither through the careless amassing of restrictive
controls or the lack of courage to deal boldly with the giant issues of
the day.

A year ago, when I met with you, the nation was emerging from an
economic downturn, even though the signs of resurgent prosperity were
not then sufficiently convincing to the doubtful. Today our surging
strength is apparent to everyone. 1960 promises to be the most
prosperous year in our history.

Yet we continue to be afflicted by nagging disorders.

Among current problems that require solution are:

--the need to protect the public interest in situations of prolonged
labor-management stalemate;

--the persistent refusal to come to grips with a critical problem in one
sector of American agriculture;

--the continuing threat of inflation, together with the persisting
tendency toward fiscal irresponsibility;

--in certain instances the denial to some of our citizens of equal
protection of the law.

Every American was disturbed by the prolonged dispute in the steel
industry and the protracted delay in reaching a settlement.

We are all relieved that a settlement has at last been achieved in that
industry. Percentagewise, by this settlement the increase to the steel
companies in employment costs is lower than in any prior wage settlement
since World War II. It is also gratifying to note that despite the
increase in wages and benefits several of the major steel producers have
announced that there will be no increase in steel prices at this time.
The national interest demands that in the period of industrial peace
which has been assured by the new contract both management and labor
make every possible effort to increase efficiency and productivity in
the manufacture of steel so that price increases can be avoided.

One of the lessons of this story is that the potential danger to the
entire Nation of longer and greater strikes must be met. To insure
against such possibilities we must of course depend primarily upon the
good commonsense of the responsible individuals. It is my intention to
encourage regular discussions between management and labor outside the
bargaining table, to consider the interest of the public as well as
their mutual interest in the maintenance of industrial peace, price
stability and economic growth.

To me, it seems almost absurd for the United States to recognize the
need, and so earnestly to seek, for cooperation among the nations unless
we can achieve voluntary, dependable, abiding cooperation among the
important segments of our own free society.

Failure to face up to basic issues in areas other than those of
labor-management can cause serious strains on the firm freedom supports
of our society.

I refer to agriculture as one of these areas.

Our basic farm laws were written 27 years ago, in an emergency effort to
redress hardship caused by a world-wide depression. They were
continued--and their economic distortions intensified--during World War
II in order to provide incentives for production of food needed to
sustain a war-torn free world.

Today our farm problem is totally different. It is that of effectively
adjusting to the changes caused by a scientific revolution. When the
original farm laws were written, an hour's farm labor produced only one
fourth as much wheat as at present. Farm legislation is woefully
out-of-date, ineffective, and expensive.

For years we have gone on with an outmoded system which not only has
failed to protect farm income, but also has produced soaring,
threatening surpluses. Our farms have been left producing for war while
America has long been at peace.

Once again I urge Congress to enact legislation that will gear
production more closely to markets, make costly surpluses more
manageable, provide greater freedom in farm operations, and steadily
achieve increased net farm incomes.

Another issue that we must meet squarely is that of living within our
means. This requires restraint in expenditure, constant reassessment of
priorities, and the maintenance of stable prices.

We must prevent inflation. Here is an opponent of so many guises that it
is sometimes difficult to recognize. But our clear need is to stop
continuous and general price rises--a need that all of us can see and
feel.

To prevent steadily rising costs and prices calls for stern
self-discipline by every citizen. No person, city, state, or organized
group can afford to evade the obligation to resist inflation, for every
American pays its crippling tax.

Inflation's ravages do not end at the water's edge. Increases in prices
of the goods we sell abroad threaten to drive us out of markets that
once were securely ours. Whether domestic prices, so high as to be
noncompetitive, result from demands for too-high profit margins or from
increased labor costs that outrun growth in productivity, the final
result is seriously damaging to the nation.

We must fight inflation as we would a fire that imperils our home. Only
by so doing can we prevent it from destroying our salaries, savings,
pensions and insurance, and from gnawing away the very roots of a free,
healthy economy and the nation's security.

One major method by which the Federal government can counter inflation
and rising prices is to insure that its expenditures are below its
revenues. The debt with which we are now confronted is about 290 billion
dollars. With interest charges alone now costing taxpayers about 9 1/2
billions, it is clear that this debt growth must stop. You will be glad
to know that despite the unsettling influences of the recent steel
strike, we estimate that our accounts will show, on June 30, this year,
a favorable balance of approximately $200 million.

I shall present to the Congress for 1961 a balanced budget. In the area
of defense, expenditures continue at the record peace-time levels of the
last several years. With a single exception, expenditures in every major
category of Health, Education and Welfare will be equal or greater than
last year. In Space expenditures the amounts are practically doubled.
But the over-all guiding goal of this budget is national need-not
response to specific group, local or political insistence.

Expenditure increases, other than those I have indicated, are largely
accounted for by the increased cost of legislation previously
enacted.[1]

[Footnote 1: At this point the President interpolated the two paragraphs
shown in brackets.]

[I repeat, this budget will be a balanced one. Expenditures will be 79
billion 8 hundred million. The amount of income over outgo, described in
the budget as a Surplus, to be applied against our national debt, is 4
billion 2 hundred million. Personally, I do not feel that any amount can
be properly called a "Surplus" as long as the nation is in debt. I
prefer to think of such an item as "reduction on our children's
inherited mortgage." Once we have established such payments as normal
practice, we can profitably make improvements in our tax structure and
thereby truly reduce the heavy burdens of taxation.

[In any event, this one reduction will save taxpayers, each year,
approximately 2 hundred million dollars in interest costs.]

This budget will help ease pressures in our credit and capital markets.
It will enhance the confidence of people all over the world in the
strength of our economy and our currency and in our individual and
collective ability to be fiscally responsible.

In the management of the huge public debt the Treasury is unfortunately
not free of artificial barriers. Its ability to deal with the difficult
problems in this field has been weakened greatly by the unwillingness of
the Congress to remove archaic restrictions. The need for a freer hand
in debt management is even more urgent today because the costs of the
undesirable financing practices which the Treasury has been forced into
are mounting. Removal of this roadblock has high priority in my
legislative recommendations.

Still another issue relates to civil rights.

In all our hopes and plans for a better world we all recognize that
provincial and racial prejudices must be combatted. In the long
perspective of history, the right to vote has been one of the strongest
pillars of a free society. Our first duty is to protect this right
against all encroachment. In spite of constitutional guarantees, and
notwithstanding much progress of recent years, bias still deprives some
persons in this country of equal protection of the laws.

Early in your last session I recommended legislation which would help
eliminate several practices discriminating against the basic rights of
Americans. The Civil Rights Commission has developed additional
constructive recommendations. I hope that these will be among the
matters to be seriously considered in the current session. I trust that
Congress will thus signal to the world that our Government is striving
for equality under law for all our people.

Each year and in many ways our nation continues to undergo profound
change and growth.

In the past 18 months we have hailed the entry of two more States of the
Union--Alaska and Hawaii. We salute these two western stars proudly.

Our vigorous expansion, which we all welcome as a sign of health and
vitality, is many-sided. We are, for example, witnessing explosive
growth in metropolitan areas.

By 1975 the metropolitan areas of the United States will occupy twice
the territory they do today. The roster of urban problems with which
they must cope is staggering. They involve water supply, cleaning the
air, adjusting local tax systems, providing for essential educational,
cultural, and social services, and destroying those conditions which
breed delinquency and crime.

In meeting these, we must, if we value our historic freedoms, keep
within the traditional framework of our Federal system with powers
divided between the national and state governments. The uniqueness of
this system may confound the casual observer, but it has worked
effectively for nearly 200 years.

I do not doubt that our urban and other perplexing problems can be
solved in the traditional American method. In doing so we must realize
that nothing is really solved and ruinous tendencies are set in motion
by yielding to the deceptive bait of the "easy" Federal tax dollar.

Our educational system provides a ready example. All recognize the vital
necessity of having modern school plants, well-qualified and adequately
compensated teachers, and of using the best possible teaching techniques
and curricula.

We cannot be complacent about educating our youth.

But the route to better trained minds is not through the swift
administration of a Federal hypodermic or sustained financial
transfusion. The educational process, essentially a local and personal
responsibility, cannot be made to leap ahead by crash, centralized
governmental action.

The Administration has proposed a carefully reasoned program for helping
eliminate current deficiencies. It is designed to stimulate classroom
construction, not by substitution of Federal dollars for state and local
funds, but by incentives to extend and encourage state and local
efforts. This approach rejects the notion of Federal domination or
control. It is workable, and should appeal to every American interested
in advancement of our educational system in the traditional American
way. I urge the Congress to take action upon it.

There is one other subject concerning which I renew a recommendation I
made in my State of the Union Message last January. I then advised the
Congress of my purpose to intensify our efforts to replace force with a
rule of law among nations. From many discussions abroad, I am convinced
that purpose is widely and deeply shared by other peoples and nations of
the world.

In the same Message I stated that our efforts would include a
reexamination of our own relation to the International Court of Justice.
The Court was established by the United Nations to decide international
legal disputes between nations. In 1946 we accepted the Court's
jurisdiction, but subject to a reservation of the right to determine
unilaterally whether a matter lies essentially within domestic
jurisdiction. There is pending before the Senate, a Resolution which
would repeal our present self-judging reservation. I support that
Resolution and urge its prompt passage. If this is done, I intend to
urge similar acceptance of the Court's jurisdiction by every member of
the United Nations.

Here perhaps it is not amiss for me to say to the Members of the
Congress, in this my final year of office, a word about the institutions
we respectively represent and the meaning which the relationships
between our two branches has for the days ahead.

I am not unique as a President in having worked with a Congress
controlled by the opposition party--except that no other President ever
did it for quite so long! Yet in both personal and official
relationships we have weathered the storms of the past five years. For
this I am grateful.

My deep concern in the next twelve months, before my successor takes
office, is with our joint Congressional-Executive duty to our own and to
other nations. Acting upon the beliefs I have expressed here today, I
shall devote my full energies to the tasks at hand, whether these
involve travel for promoting greater world understanding, negotiations
to reduce international discord, or constant discussions and
communications with the Congress and the American people on issues both
domestic and foreign.

In pursuit of these objectives, I look forward to, and shall dedicate
myself to, a close and constructive association with the Congress.

Every minute spent in irrelevant interbranch wrangling is precious time
taken from the intelligent initiation and adoption of coherent policies
for our national survival and progress.

We seek a common goal--brighter opportunity for our own citizens and a
world peace with justice for all.

Before us and our friends is the challenge of an ideology which, for
more than four decades, has trumpeted abroad its purpose of gaining
ultimate victory over all forms of government at variance with its own.

We realize that however much we repudiate the tenets of imperialistic
Communism, it represents a gigantic enterprise grimly pursued by leaders
who compel its subjects to subordinate their freedom of action and
spirit and personal desires for some hoped-for advantage in the future.

The Communists can present an array of material accomplishments over the
past fifteen years that lends a false persuasiveness to many of their
glittering promises to the uncommitted peoples.

The competition they provide is formidable.

But in our scale of values we place freedom first--our whole national
existence and development have been geared to that basic concept and are
responsible for the position of free world leadership to which we have
succeeded. It is the highest prize that any nation can possess; it is
one that Communism can never offer. And America's record of material
accomplishment in freedom is written not only in the unparalleled
prosperity of our own nation, but in the many billions we have devoted
to the reconstruction of Free World economics wrecked by World War II
and in the effective help of many more billions we have given in saving
the independence of many others threatened by outside domination.
Assuredly we have the capacity for handling the problems in the new era
of the world's history we are now entering.

But we must use that capacity intelligently and tirelessly, regardless
of personal sacrifice.

The fissure that divides our political planet is deep and wide.

We live, moreover, in a sea of semantic disorder in which old labels no
longer faithfully describe.

Police states are called "people's democracies."

Armed conquest of free people is called "liberation."

Such slippery slogans make more difficult the problem of communicating
true faith, facts and beliefs.

We must make clear our peaceful intentions, our aspirations for a better
world. So doing, we must use language to enlighten the mind, not as the
instrument of the studied innuendo and distorter of truth.

And we must live by what we say.

On my recent visit to distant lands I found one statesman after another
eager to tell me of the elements of their government that had been
borrowed from our American Constitution, and from the indestructible
ideals set forth in our Declaration of Independence.

As a nation we take pride that our own constitutional system, and the
ideals which sustain it, have been long viewed as a fountainhead of
freedom.

By our every action we must strive to make ourselves worthy of this
trust, ever mindful that an accumulation of seemingly minor
encroachments upon freedom gradually could break down the entire fabric
of a free society.

So persuaded, we shall get on with the task before us.

So dedicated, and with faith in the Almighty, humanity shall one day
achieve the unity in freedom to which all men have aspired from the dawn
of time.

The Address as reported from the floor appears in the Congressional
Record of January 7, 1960 (vol. 106, p. 135).

***

State of the Union Address
Dwight D. Eisenhower
January 12, 1961

To the Congress of the United States:

Once again it is my Constitutional duty to assess the state of the
Union.

On each such previous occasion during these past eight years I have
outlined a forward course designed to achieve our mutual objective--a
better America in a world of peace. This time my function is different.

The American people, in free election, have selected new leadership
which soon will be entrusted with the management of our government. A
new President shortly will lay before you his proposals to shape the
future of our great land. To him, every citizen, whatever his political
beliefs, prayerfully extends best wishes for good health and for wisdom
and success in coping with the problems that confront our Nation.

For my part, I should like, first, to express to you of the Congress, my
appreciation of your devotion to the common good and your friendship
over these difficult years. I will carry with me pleasant memories of
this association in endeavors profoundly significant to all our people.

We have been through a lengthy period in which the control over the
executive and legislative branches of government has been divided
between our two great political parties. Differences, of course, we have
had, particularly in domestic affairs. But in a united determination to
keep this Nation strong and free and to utilize our vast resources for
the advancement of all mankind, we have carried America to unprecedented
heights.

For this cooperative achievement I thank the American people and those
in the Congress of both parties who have supported programs in the
interest of our country.

I should also like to give special thanks for the devoted service of my
associates in the Executive Branch and the hundreds of thousands of
career employees who have implemented our diverse government programs.

My second purpose is to review briefly the record of these past eight
years in the hope that, out of the sum of these experiences, lessons
will emerge that are useful to our Nation. Supporting this review are
detailed reports from the several agencies and departments, all of which
are now or will shortly be available to the Congress.

Throughout the world the years since 1953 have been a period of profound
change. The human problems in the world grow more acute hour by hour;
yet new gains in science and technology continually extend the promise
of a better life. People yearn to be free, to govern themselves; yet a
third of the people of the world have no freedom, do not govern
themselves. The world recognizes the catastrophic nature of nuclear war;
yet it sees the wondrous potential of nuclear peace.

During the period, the United States has forged ahead under a
constructive foreign policy. The continuing goal is peace, liberty, and
well-being--for others as well as ourselves. The aspirations of all
peoples are one--peace with justice in freedom. Peace can only be
attained collectively as peoples everywhere unite in their determination
that liberty and well-being come to all mankind.

Yet while we have worked to advance national aspirations for freedom, a
divisive force has been at work to divert that aspiration into dangerous
channels. The Communist movement throughout the world exploits the
natural striving of all to be free and attempts to subjugate men rather
than free them. These activities have caused and are continuing to cause
grave troubles in the world.

Here at home these have been times for careful adjustment of our economy
from the artificial impetus of a hot war to constructive growth in a
precarious peace. While building a new economic vitality without
inflation, we have also increased public expenditures to keep abreast of
the needs of a growing population and its attendant new problems, as
well as our added international responsibilities. We have worked toward
these ends in a context of shared responsibility--conscious of the need
for maximum scope to private effort and for State and local, as well as
Federal, governmental action.

Success in designing and executing national purposes, domestically and
abroad, can only come from a steadfast resolution that integrity in the
operation of government and in our relations with each other be fully
maintained. Only in this way could our spiritual goals be fully
advanced.

FOREIGN POLICY

On January 20, 1953, when I took office, the United States was at war.
Since the signing of the Korean Armistice in 1953, Americans have lived
in peace in highly troubled times.

During the 1956 Suez crisis, the United States government strongly
supported United Nations' action--resulting in the ending of the
hostilities in Egypt.

Again in 1958, peace was preserved in the Middle East despite new
discord. Our government responded to the request of the friendly
Lebanese Government for military help, and promptly withdrew American
forces as soon as the situation was stabilized.

In 1958 our support of the Republic of China during the all-out
bombardment of Quemoy restrained the Communist Chinese from attempting
to invade the off-shore islands.

Although, unhappily, Communist penetration of Cuba is real and poses a
serious threat, Communist dominated regimes have been deposed in
Guatemala and Iran. The occupation of Austria has ended and the Trieste
question has been settled.

Despite constant threats to its integrity, West Berlin has remained
free.

Important advances have been made in building mutual security
arrangements--which lie at the heart of our hopes for future peace and
security in the world. The Southeast Asia Treaty Organization has been
established; the NATO alliance has been militarily strengthened; the
Organization of American States has been further developed as an
instrument of inter-American cooperation; the Anzus treaty has
strengthened ties with Australia and New Zealand, and a mutual security
treaty with Japan has been signed. In addition, the CENTO pact has been
concluded, and while we are not officially a member of this alliance we
have participated closely in its deliberations.

The "Atoms for Peace" proposal to the United Nations led to the creation
of the International Atomic Energy Agency. Our policy has been to push
for enforceable programs of inspection against surprise attack,
suspension of nuclear testing, arms reduction, and peaceful use of outer
space.

The United Nations has been vigorously supported in all of its actions,
including the condemnations of the wholesale murder of the people of
Tibet by the Chinese Communists and the brutal Soviet repression of the
people of Hungary, as well as the more recent UN actions in the Congo.

The United States took the initiative in negotiating the significant
treaty to guarantee the peaceful use of vast Antarctica.

The United States Information Agency has been transformed into a greatly
improved medium for explaining our policies and actions to audiences
overseas, answering the lies of communist propaganda, and projecting a
clearer image of American life and culture.

Cultural, technological and educational exchanges with the Soviet Union
have been encouraged, and a comprehensive agreement was made which
authorized, among other things, the distribution of our Russian language
magazine Amerika and the highly successful American Exhibition in
Moscow.

This country has continued to withhold recognition of Communist China
and to oppose vigorously the admission of this belligerent and
unrepentant nation into the United Nations. Red China has yet to
demonstrate that it deserves to be considered a "peace-loving" nation.

With communist imperialism held in check, constructive actions were
undertaken to strengthen the economies of free world nations. The United
States government has given sturdy support to the economic and technical
assistance activities of the UN. This country stimulated a doubling of
the capital of the World Bank and a 50 percent capital increase in the
International Monetary Fund. The Development Loan Fund and the
International Development Association were established. The United
States also took the lead in creating the Inter-American Development
Bank.

Vice President Nixon, Secretaries of State Dulles and Herter and I
travelled extensively through the world for the purpose of strengthening
the cause of peace, freedom, and international understanding. So
rewarding were these visits that their very success became a significant
factor in causing the Soviet Union to wreck the planned Summit
Conference of 1960.

These vital programs must go on. New tactics will have to be developed,
of course, to meet new situations, but the underlying principles should
be constant. Our great moral and material commitments to collective
security, deterrence of force, international law, negotiations that lead
to self-enforcing agreements, and the economic interdependence of free
nations should remain the cornerstone of a foreign policy that will
ultimately bring permanent peace with justice in freedom to all mankind.
The continuing need of all free nations today is for each to recognize
clearly the essentiality of an unbreakable bond among themselves based
upon a complete dedication to the principles of collective security,
effective cooperation and peace with justice.

NATIONAL DEFENSE

For the first time in our nation's history we have consistently
maintained in peacetime, military forces of a magnitude sufficient to
deter and if need be to destroy predatory forces in the world.

Tremendous advances in strategic weapons systems have been made in the
past eight years. Not until 1953 were expenditures on long-range
ballistic missile programs even as much as a million dollars a year;
today we spend ten times as much each day on these programs as was spent
in all of 1952.

No guided ballistic missiles were operational at the beginning of 1953.
Today many types give our armed forces unprecedented effectiveness. The
explosive power of our weapons systems for all purposes is almost
inconceivable.

Today the United States has operational ATLAS missiles which can strike
a target 5000 miles away in a half-hour. The POLARIS weapons system
became operational last fall and the TITAN is scheduled to become so
this year. Next year, more than a year ahead of schedule, a vastly
improved ICBM, the solid propellant MINUTEMAN, is expected to be ready.

Squadrons of accurate Intermediate Range Ballistic Missiles are now
operational. The THOR and JUPITER IRBMs based in forward areas can hit
targets 1500 miles away in 18 minutes.

Aircraft which fly at speeds faster than sound were still in a
developmental stage eight years ago. Today American fighting planes go
twice the speed of sound. And either our B-58 Medium Range Jet Bomber or
our B-52 Long Range Jet Bomber can carry more explosive power than was
used by all combatants in World War II--Allies and Axis combined.

Eight years ago we had no nuclear-powered ships. Today 49 nuclear
warships have been authorized. Of these, 14 have been commissioned,
including three of the revolutionary POLARIS submarines. Our nuclear
submarines have cruised under the North Pole and circumnavigated the
earth while submerged. Sea warfare has been revolutionized, and the
United States is far and away the leader.

Our tactical air units overseas and our aircraft carriers are alert;
Army units, guarding the frontiers of freedom in Europe and the Far
East, are in the highest state of readiness in peacetime history; our
Marines, a third of whom are deployed in the Far East, are constantly
prepared for action; our Reserve establishment has maintained high
standards of proficiency, and the Ready Reserve now numbers over 2 1/2
million citizen-soldiers.

The Department of Defense, a young and still evolving organization, has
twice been improved and the line of command has been shortened in order
to meet the demands of modern warfare. These major reorganizations have
provided a more effective structure for unified planning and direction
of the vast defense establishment. Gradual improvements in its structure
and procedures are to be expected.

United States civil defense and nonmilitary defense capacity has been
greatly strengthened and these activities have been consolidated in one
Federal agency.

The defense forces of our Allies now number five million men, several
thousand combatant ships, and over 25,000 aircraft. Programs to
strengthen these allies have been consistently supported by the
Administration. U.S. military assistance goes almost exclusively to
friendly nations on the rim of the communist world. This American
contribution to nations who have the will to defend their freedom, but
insufficient means, should be vigorously continued. Combined with our
Allies, the free world now has a far stronger shield than we could
provide alone.

Since 1953, our defense policy has been based on the assumption that the
international situation would require heavy defense expenditures for an
indefinite period to come, probably for years. In this protracted
struggle, good management dictates that we resist overspending as
resolutely as we oppose under-spending. Every dollar uselessly spent on
military mechanisms decreases our total strength and, therefore, our
security. We must not return to the "crash-program" psychology of the
past when each new feint by the Communists was responded to in panic.
The "bomber gap" of several years ago was always a fiction, and the
"missile gap" shows every sign of being the same.

The nation can ill afford to abandon a national policy which provides
for a fully adequate and steady level of effort, designed for the long
pull; a fast adjustment to new scientific and technological advances; a
balanced force of such strength as to deter general war, to effectively
meet local situations and to retaliate to attack and destroy the
attacker; and a strengthened system of free world collective security.

THE ECONOMY

The expanding American economy passed the half-trillion dollar mark in
gross national product early in 1960. The Nation's output of goods and
services is now nearly 25 percent higher than in 1952.

In 1959, the average American family had an income of $6,520, 15 percent
higher in dollars of constant buying power than in 1952, and the real
wages of American factory workers have risen 20 percent during the past
eight years. These facts reflect the rising standard of individual and
family well-being enjoyed by Americans.

Our Nation benefits also from a remarkable improvement in general
industrial peace through strengthened processes of free collective
bargaining. Time lost since 1952 because of strikes has been half that
lost in the eight years prior to that date. Legislation now requires
that union members have the opportunity for full participation in the
affairs of their unions. The Administration supported the
Landrum-Griffin Act, which I believe is greatly helpful to the vast bulk
of American Labor and its leaders, and also is a major step in getting
racketeers and gangsters out of labor-management affairs.

The economic security of working men and women has been strengthened by
an extension of unemployment insurance coverage to 2.5 million
ex-servicemen, 2.4 million Federal employees, and 1.2 million employees
of small businesses, and by a strengthening of the Railroad Unemployment
Insurance Act. States have been encouraged to improve their unemployment
compensation benefits, so that today average weekly benefits are 40
percent higher than in 1953.

Determined efforts have improved workers' safety standards. Enforceable
safety standards have been established for longshoremen and ship repair
workers; Federal Safety Councils have been increased from 14 to over
100; safety awards have been initiated, and a national construction
safety program has been developed.

A major factor in strengthening our competitive enterprise system, and
promoting economic growth, has been the vigorous enforcement of
antitrust laws over the last eight years and a continuing effort to
reduce artificial restraints on competition and trade and enhance our
economic liberties. This purpose was also significantly advanced in 1953
when, as one of the first acts of this Administration, restrictive wage
and price controls were ended.

An additional measure to strengthen the American system of competitive
enterprise was the creation of the Small Business Administration in 1953
to assist existing small businesses and encourage new ones. This agency
has approved over $1 billion in loans, initiated a new program to
provide long-term capital for small businesses, aided in setting aside
$31/2 billion in government contracts for award to small business
concerns, and brought to the attention of individual businessmen,
through programs of information and education, new developments in
management and production techniques. Since 1952, important tax
revisions have been made to encourage small businesses.

Many major improvements in the Nation's transportation system have been
made:

--After long years of debate, the dream of a great St. Lawrence Seaway,
opening the heartland of America to ocean commerce, has been fulfilled.

--The new Federal Aviation Agency is fostering greater safety in air
travel.

--The largest public construction program in history--the 41,000 mile
national system of Interstate and Defense highways--has been pushed
rapidly forward. Twenty-five percent of this system is now open to
traffic.

Efforts to help every American build a better life have included also a
vigorous program for expanding our trade with other nations. A 4-year
renewal of the Reciprocal Trade Agreements Act was passed in 1958, and a
continuing and rewarding effort has been made to persuade other
countries to remove restrictions against our exports. A new export
expansion program was launched in 1960, inaugurating improvement of
export credit insurance and broadening research and information programs
to awaken Americans to business opportunities overseas. These actions
and generally prosperous conditions abroad have helped push America's
export trade to a level of $20 billion in 1960.

Although intermittent declines in economic activity persist as a problem
in our enterprise system, recent downturns have been moderate and of
short duration. There is, however, little room for complacency.
Currently our economy is operating at high levels, but unemployment
rates are higher than any of us would like, and chronic pockets of high
unemployment persist. Clearly, continued sound and broadly shared
economic growth remains a major national objective toward which we must
strive through joint private and public efforts.

If government continues to work to assure every American the fullest
opportunity to develop and utilize his ability and talent, it will be
performing one of its most vital functions, that of advancing the
welfare and protecting the dignity, rights, and freedom of all
Americans.

GOVERNMENT FINANCE AND ADMINISTRATION

In January 1953, the consumer's dollar was worth only 52 cents in terms
of the food, clothing, shelter and other items it would buy compared to
1939. Today, the inflationary spiral which had raised the cost of living
by 36 percent between 1946 and 1952 has all but ceased and the value of
the dollar virtually stabilized.

In 1954 we had the largest tax cut in history, amounting to $7.4 billion
annually, of which over 62 percent went to individuals mostly in the
small income brackets.

This Administration has directed constant efforts toward fiscal
responsibility. Balanced budgets have been sought when the economy was
advancing, and a rigorous evaluation of spending programs has been
maintained at all times. Resort to deficit financing in prosperous times
could easily erode international confidence in the dollar and contribute
to inflation at home. In this belief, I shall submit a balanced budget
for fiscal 1962 to the Congress next week.

There has been a firm policy of reducing government competition with
private enterprise. This has resulted in the discontinuance of some
2,000 commercial industrial installations and in addition the
curtailment of approximately 550 industrial installations operated
directly by government agencies.

Also an aggressive surplus disposal program has been carried on to
Identify and dispose of unneeded government-owned real property. This
has resulted in the addition of a substantial number of valuable
properties to local tax rolls, and a significant monetary return to the
government.

Earnest and persistent attempts have been made to strengthen the
position of State and local governments and thereby to stop the
dangerous drift toward centralization of governmental power in
Washington.

Significant strides have been made in increasing the effectiveness of
government. Important new agencies have been established, such as the
Department of Health, Education, and Welfare, the Federal Aviation
Agency, and the National Aeronautics and Space Administration. The
Council of Economic Advisers was reconstituted.

The operation of our postal system has been modernized to get better and
more efficient service. Modernized handling of local mail now brings
next-day delivery to 168 million people in our population centers,
expanded carrier service now accommodates 9.3 million families in the
growing suburbs, and 1.4 million families have been added to the rural
delivery service. Common sense dictates that the Postal Service should
be on a self-financing basis.

The concept of a trained and dedicated government career service has
been strengthened by the provision of life and health insurance
benefits, a vastly improved retirement system, a new merit promotion
program, and the first effective incentive awards program. With no
sacrifice in efficiency, Federal civilian employment since 1953 has been
reduced by over a quarter of a million persons.

I am deeply gratified that it was under the urging of this
Administration that Alaska and Hawaii became our 49th and 50th States.

AGRICULTURE

Despite the difficulties of administering Congressional programs which
apply outmoded prescriptions and which aggravate rather than solve
problems, the past eight years brought notable advances in agriculture.

Total agricultural assets are approximately $200 billion--up $36 billion
in eight years.

Farm owner equities are at the near record high of $174 billion.

Farm ownership is at a record high with fewer farmers in a tenant and
sharecropper status than at any time in our nation's history.

The "Food-for-Peace" program has demonstrated how surplus of American
food and fiber can be effectively used to feed and clothe the needy
abroad. Aided by this humanitarian program, total agricultural exports
have grown from $2.8 billion in 1953 to an average of about $4 billion
annually for the past three years. For 1960, exports are estimated at
$4.5 billion, the highest volume on record. Under the Food-for-Peace
program, the largest wheat transaction in history was consummated with
India in 1960.

The problems of low-income farm families received systematic attention
for the first time in the Rural Development Program. This program has
gone forward in 39 States, yielding higher incomes and a better living
for rural people most in need.

The Rural Electrification Administration has helped meet the growing
demand for power and telephones in agricultural areas. Ninety-seven
percent of all farms now have central station electric power. Dependence
upon Federal financing should no longer be necessary.

The Farm Credit Administration has been made an independent agency more
responsive to the farmer's needs.

The search for new uses for our farm abundance and to develop new crops
for current needs has made major progress. Agricultural research
appropriations have increased by 171 percent since 1953.

Farmers are being saved approximately $80 million a year by the repeal
in 1956 of Federal taxes on gasoline used in tractors and other
machinery.

Since 1953, appropriations have been doubled for county agents, home
agents and the Extension Service.

Eligibility for Social Security benefits has been extended to farmers
and their families.

Yet in certain aspects our agricultural surplus situation is
increasingly grave. For example, our wheat stocks now total 1.3 billion
bushels. If we did not harvest one bushel of wheat in this coming year,
we would still have all we could eat, all we could sell abroad, all we
could give away, and still have a substantial carryover. Extraordinary
costs are involved just in management and disposal of this burdensome
surplus. Obviously important adjustments must still come. Congress must
enact additional legislation to permit wheat and other farm commodities
to move into regular marketing channels in an orderly manner and at the
same time afford the needed price protection to the farmer. Only then
will agriculture again be free, sound, and profitable.

NATURAL RESOURCES

New emphasis has been placed on the care of our national parks. A ten
year development program of our National Park System--Mission 66--was
initiated and 633,000 acres of park land have been added since 1953.

Appropriations for fish and wildlife operations have more than doubled.
Thirty-five new refuges, containing 11,342,000 acres, have been added to
the national wildlife management system.

Our Nation's forests have been improved at the most rapid rate in
history.

The largest sustained effort in water resources development in our
history has taken place. In the field of reclamation alone, over 50 new
projects, or project units, have been authorized since 1953--including
the billion dollar Colorado River Storage Project. When all these
projects have been completed they will have a storage capacity of nearly
43 million acre-feet--an increase of 50 percent over the Bureau of
Reclamation's storage capacity in mid-1953. In addition, since 1953 over
450 new navigation flood control and multiple purpose projects of the
Corps of Engineers have been started, costing nearly 6 billion dollars.

Soil and water conservation has been advanced as never before. One
hundred forty-one projects are now being constructed under the Watershed
Protection Program.

Hydroelectric power has been impressively developed through a policy
which recognizes that the job to be done requires comprehensive
development by Federal, State, and local governments and private
enterprise. Teamwork is essential to achieve this objective.

The Federal Columbia River power system has grown from two multipurpose
dams with a 2.6 million kilowatt capacity to 17 multipurpose projects
completed or under construction with an ultimate installed capacity of
8.1 million kilowatts. After years of negotiation, a Columbia River
Storage Development agreement with Canada now opens the way for early
realization of unparalleled power, flood control and resource
conservation benefits for the Pacific Northwest. A treaty implementing
this agreement will shortly be submitted to the Senate.

A farsighted and highly successful program for meeting urgent water
needs is being carded out by converting salt water to fresh water. A 75
percent reduction in the cost of this process has already been realized.

Continuous resource development is essential for our expanding economy.
We must continue vigorous, combined Federal, State and private programs,
at the same time preserving to the maximum extent possible our natural
and scenic heritage for future generations.

EDUCATION, SCIENCE, AND TECHNOLOGY

The National Defense Education Act of 1958 is already a milestone in the
history of American education. It provides broad opportunities for the
intellectual development of all children by strengthening courses of
study in science, mathematics, and foreign languages, by developing new
graduate programs to train additional teachers, and by providing loans
for young people who need financial help to go to college.

The Administration proposed on numerous occasions a broad new five-year
program of Federal aid to help overcome the classroom shortage in public
elementary and secondary schools. Recommendations were also made to give
assistance to colleges and universities for the construction of academic
and residential buildings to meet future enrollment increases.

This Administration greatly expanded Federal loans for building
dormitories for students, teachers, and nurses training, a program
assisting in the construction of approximately 200,000 living
accommodations during the past 8 years.

There has been a vigorous acceleration of health, resource and education
programs designed to advance the role of the American Indian in our
society. Last fall, for example, 91 percent of the Indian children
between the ages of 6 and 18 on reservations were enrolled in school.
This is a rise of 12 percent since 1953.

In the field of science and technology, startling strides have been made
by the new National Aeronautics and Space Administration. In little more
than two years, NASA has successfully launched meteorological
satellites, such as Tiros I and Tiros II, that promise to revolutionize
methods of weather forecasting; demonstrated the feasibility of
satellites for global communications by the successful launching of Echo
I; produced an enormous amount of valuable scientific data, such as the
discovery of the Van Allen Radiation Belt; successfully launched
deep-space probes that maintained communication over the greatest range
man has ever tracked; and made real progress toward the goal of manned
space flights.

These achievements unquestionably make us preeminent today in space
exploration for the betterment of mankind. I believe the present
organizational arrangements in this area, with the revisions proposed
last year, are completely adequate for the tasks ahead.

Americans can look forward to new achievements in space exploration. The
near future will hold such wonders as the orbital flight of an
astronaut, the landing of instruments on the moon, the launching of the
powerful giant Saturn rocket vehicles, and the reconnaissance of Mars
and Venus by unmanned vehicles.

The application of atomic energy to industry, agriculture, and medicine
has progressed from hope and experiment to reality. American industry
and agriculture are making increasing use of radioisotopes to improve
manufacturing, testing, and crop-raising. Atomic energy has improved the
ability of the healing professions to combat disease, and holds promise
for an eventual increase in man's life span.

Education, science, technology and balanced programs of every kind-these
are the roadways to progress. With appropriate Federal support, the
States and localities can assure opportunities for achieving excellence
at all levels of the educational system; and with the Federal government
continuing to give wholehearted support to basic scientific research and
technology, we can expect to maintain our position of leadership in the
world.

CIVIL RIGHTS

The first consequential Federal Civil Rights legislation in 85 years was
enacted by Congress on recommendation of the Administration in 1957 and
1960.

A new Civil Rights Division in the Department of Justice has already
moved to enforce constitutional rights in such areas as voting and the
elimination of Jim Crow laws.

Greater equality of job opportunity in Federal employment and employment
with Federal contractors has been effectively provided through the
President's Committees on Government Contracts and Government Employment
Practices.

The Civil Rights Commission has undertaken important surveys in the
fields of housing, voting, and education.

Segregation has been abolished in the Armed Forces, in Veterans'
Hospitals, in all Federal employment, and throughout the District of
Columbia--administratively accomplished progress in this field that is
unmatched in America's recent history.

This pioneering work in civil rights must go on. Not only because
discrimination is morally wrong, but also because its impact is more
than national--it is world-wide.

HEALTH AND WELFARE

Federal medical research expenditures have increased more than fourfold
since 1954.

A vast variety of the approaches known to medical science has been
explored to find better methods of treatment and prevention of major
diseases, particularly heart diseases, cancer, and mental illness.

The control of air and water pollution has been greatly strengthened.

Americans now have greater protection against harmful, unclean, or
misrepresented foods, drugs, or cosmetics through a strengthened Food
and Drug Administration and by new legislation which requires that food
additives be proved safe for human consumption before use.

A newly established Federal Radiation Council, along with the Department
of Health, Education, and Welfare, analyzes and coordinates information
regarding radiological activities which affect the public health.

Medical manpower has been increased by Federal grants for teaching and
research.

Construction of new medical facilities has been stepped up and extended
to include nursing homes, diagnostic and treatment centers, and
rehabilitation facilities.

The vocational rehabilitation program has been significantly expanded.
About 90,000 handicapped people are now being rehabilitated annually so
they are again able to earn their own living with self-respect and
dignity.

New legislation provides for better medical care for the needy aged,
including those older persons, who, while otherwise self-sufficient,
need help in meeting their health care costs. The Administration
recommended a major expansion of this effort.

The coverage of the Social Security Act has been broadened since 1953 to
make 11 million additional people eligible for retirement, disability or
survivor benefits for themselves or their dependents, and the Social
Security benefits have been substantially improved.

Grants to the States for maternal and child welfare services have been
increased.

The States, aided by Federal grants, now assist some 6 million needy
people through the programs of Old Age Assistance, Aid to Dependent
Children, Aid to the Blind, and Aid to the Totally and Permanently
Disabled.

HOUSING AND URBAN DEVELOPMENT

More houses have been built during the past eight years--over nine
million--than during any previous eight years in history.

An historic new approach--Urban Renewal--now replaces piecemeal thrusts
at slum pockets and urban blight. Communities engaged in urban renewal
have doubled and renewal projects have more than tripled since 1953. An
estimated 68 projects in 50 cities will be completed by the end of the
current fiscal year; another 577 projects will be underway, and planning
for 310 more will be in process. A total of $2 billion in Federal grants
will ultimately be required to finance these 955 projects.

New programs have been initiated to provide more and better housing for
elderly people. Approximately 25,000 units especially designed for the
elderly have been built, started, or approved in the past three years.

For the first time, because of Federal help and .encouragement, 90
metropolitan areas and urban regions and 1140 smaller towns throughout
the country are making comprehensive development plans for their future
growth and development.

American communities have been helped to plan water and sanitation
systems and schools through planning advances for 1600 public works
projects with a construction cost of nearly $2 billion.

Mortgage insurance on individual homes has been greatly expanded. During
the past eight years, the Federal Housing Administration alone insured
over 21/2 million home mortgages valued at $27 billion, and in addition,
insured more than ten million property improvement loans.

The Federal government must continue to provide leadership in order to
make our cities and communities better places in which to live, work,
and raise families, but without usurping rightful local authority,
replacing individual responsibility, or stifling private initiative.

IMMIGRATION

Over 32,000 victims of Communist tyranny in Hungary were brought to our
shores, and at this time our country is working to assist refugees from
tyranny in Cuba.

Since 1953, the waiting period for naturalization applicants has been
reduced from 18 months to 45 days.

The Administration also has made legislative recommendations to
liberalize existing restrictions upon immigration while still
safeguarding the national interest. It is imperative that our
immigration policy be in the finest American tradition of providing a
haven for oppressed peoples and fully in accord with our obligation as a
leader of the free world.

VETERANS

In discharging the nation's obligation to our veterans, during the past
eight years there have been:

The readjustment of World War II veterans was completed, and the five
million Korean conflict veterans were assisted in achieving successful
readjustment to civilian life;

Increases in compensation benefits for all eligible veterans with
service connected disabilities;

Higher non-service connected pension benefits for needy veterans;

Greatly improved benefits to survivors of veterans dying in or as a
result of service;

Authorization, by Presidential directive, of an increase in the number
of beds available for sick and disabled veterans;

Development of a 12-year, $900 million construction program to modernize
and improve our veterans hospitals;

New modern techniques brought into the administration of Veterans
Affairs to provide the highest quality service possible to those who
have defended us.

CONCLUSION

In concluding my final message to the Congress, it is fitting to look
back to my first--to the aims and ideals I set forth on February 2,
1953: To use America's influence in world affairs to advance the cause
of peace and justice, to conduct the affairs of the Executive Branch
with integrity and efficiency, to encourage creative initiative in our
economy, and to work toward the attainment of the well-being and
equality of opportunity of all citizens.

Equally, we have honored our commitment to pursue and attain specific
objectives. Among them, as stated eight years ago: strengthening of the
mutual security program; development of world trade and commerce; ending
of hostilities in Korea; creation of a powerful deterrent force;
practicing fiscal responsibility; checking the menace of inflation;
reducing the tax burden; providing an effective internal security
program; developing and conserving our natural resources; reducing
governmental interference in the affairs of the farmer; strengthening
and improving services by the Department of Labor, and the vigilant
guarding of civil and social fights.

I do not close this message implying that all is well--that all problems
are solved. For progress implies both new and continuing problems and,
unlike Presidential administrations, problems rarely have terminal
dates.

Abroad, there is the continuing Communist threat to the freedom of
Berlin, an explosive situation in Laos, the problems caused by Communist
penetration of Cuba, as well as the many problems connected with the
development of the new nations in Africa. These areas, in particular,
call for delicate handling and constant review.

At home, several conspicuous problems remain: promoting higher levels of
employment, with special emphasis on areas in which heavy unemployment
has persisted; continuing to provide for steady economic growth and
preserving a sound currency; bringing our balance of payments into more
reasonable equilibrium and continuing a high level of confidence in our
national and international systems; eliminating heavily excessive
surpluses of a few farm commodities; and overcoming deficiencies in our
health and educational programs.

Our goal always has been to add to the spiritual, moral, and material
strength of our nation. I believe we have done this. But it is a process
that must never end. Let us pray that leaders of both the near and
distant future will be able to keep the nation strong and at peace, that
they will advance the well-being of all our people, that they will lead
us on to still higher moral standards, and that, in achieving these
goals, they will maintain a reasonable balance between private and
governmental responsibility.

***

State of the Union Address
John F. Kennedy
January 30, 1961

Mr. Speaker, Mr. Vice President, Members of the Congress:

It is a pleasure to return from whence I came. You are among my oldest
friends in Washington--and this House is my oldest home. It was here,
more than 14 years ago, that I first took the oath of Federal office. It
was here, for 14 years, that I gained both knowledge and inspiration
from members of both parties in both Houses--from your wise and generous
leaders--and from the pronouncements which I can vividly recall, sitting
where you now sit--including the programs of two great Presidents, the
undimmed eloquence of Churchill, the soaring idealism of Nehru, the
steadfast words of General de Gaulle. To speak from this same historic
rostrum is a sobering experience. To be back among so many friends is a
happy one.

I am confident that that friendship will continue. Our Constitution
wisely assigns both joint and separate roles to each branch of the
government; and a President and a Congress who hold each other in mutual
respect will neither permit nor attempt any trespass. For my part, I
shall withhold from neither the Congress nor the people any fact or
report, past, present, or future, which is necessary for an informed
judgment of our conduct and hazards. I shall neither shift the burden of
executive decisions to the Congress, nor avoid responsibility for the
outcome of those decisions.

I speak today in an hour of national peril and national opportunity.
Before my term has ended, we shall have to test anew whether a nation
organized and governed such as ours can endure. The outcome is by no
means certain. The answers are by no means clear. All of us
together--this Administration, this Congress, this nation--must forge
those answers.

But today, were I to offer--after little more than a week in
office--detailed legislation to remedy every national ill, the Congress
would rightly wonder whether the desire for speed had replaced the duty
of responsibility.

My remarks, therefore, will be limited. But they will also be candid. To
state the facts frankly is not to despair the future nor indict the
past. The prudent heir takes careful inventory of his legacies, and
gives a faithful accounting to those whom he owes an obligation of
trust. And, while the occasion does not call for another recital of our
blessings and assets, we do have no greater asset than the willingness
of a free and determined people, through its elected officials, to face
all problems frankly and meet all dangers free from panic or fear.

I.

The present state of our economy is disturbing. We take office in the
wake of seven months of recession, three and one-half years of slack,
seven years of diminished economic growth, and nine years of falling
farm income.

Business bankruptcies have reached their highest level since the Great
Depression. Since 1951 farm income has been squeezed down by 25 percent.
Save for a brief period in 1958, insured unemployment is at the highest
peak in our history. Of some five and one-half million Americans who are
without jobs, more than one million have been searching for work for
more than four months. And during each month some 150,000 workers are
exhausting their already meager jobless benefit rights.

Nearly one-eighth of those who are without jobs live almost without hope
in nearly one hundred especially depressed and troubled areas. The rest
include new school graduates unable to use their talents, farmers forced
to give up their part-time jobs which helped balance their family
budgets, skilled and unskilled workers laid off in such important
industries as metals, machinery, automobiles and apparel.

Our recovery from the 1958 recession, moreover, was anemic and
incomplete. Our Gross National Product never regained its full
potential. Unemployment never returned to normal levels. Maximum use of
our national industrial capacity was never restored.

In short, the American economy is in trouble. The most resourceful
industrialized country on earth ranks among the last in the rate of
economic growth. Since last spring our economic growth rate has actually
receded. Business investment is in a decline. Profits have fallen below
predicted levels. Construction is off. A million unsold automobiles are
in inventory. Fewer people are working--and the average work week has
shrunk well below 40 hours. Yet prices have continued to rise--so that
now too many Americans have less to spend for items that cost more to
buy.

Economic prophecy is at best an uncertain art--as demonstrated by the
prediction one year ago from this same podium that 1960 would be, and I
quote, "the most prosperous year in our history." Nevertheless,
forecasts of continued slack and only slightly reduced unemployment
through 1961 and 1962 have been made with alarming unanimity--and this
Administration does not intend to stand helplessly by.

We cannot afford to waste idle hours and empty plants while awaiting the
end of the recession. We must show the world what a free economy can
do--to reduce unemployment, to put unused capacity to work, to spur new
productivity, and to foster higher economic growth within a range of
sound fiscal policies and relative price stability.

I will propose to the Congress within the next 14 days measures to
improve unemployment compensation through temporary increases in
duration on a self-supporting basis--to provide more food for the
families of the unemployed, and to aid their needy children--to
redevelop our areas of chronic labor surplus--to expand the services of
the U.S. Employment Offices--to stimulate housing and construction--to
secure more purchasing power for our lowest paid workers by raising and
expanding the minimum wage--to offer tax incentives for sound plant
investment--to increase the development of our natural resources--to
encourage price stability--and to take other steps aimed at insuring a
prompt recovery and paving the way for increased long-range growth. This
is not a partisan program concentrating on our weaknesses--it is, I
hope, a national program to realize our national strength.

II.

Efficient expansion at home, stimulating the new plant and technology
that can make our goods more competitive, is also the key to the
international balance of payments problem. Laying aside all alarmist
talk and panicky solutions, let us put that knotty problem in its proper
perspective.

It is true that, since 1958, the gap between the dollars we spend or
invest abroad and the dollars returned to us has substantially widened.
This overall deficit in our balance of payments increased by nearly $11
billion in the 3 years--and holders of dollars abroad converted them to
gold in such a quantity as to cause a total outflow of nearly $5 billion
of gold from our reserve. The 1959 deficit was caused in large part by
the failure of our exports to penetrate foreign markets--the result both
of restrictions on our goods and our own uncompetitive prices. The 1960
deficit, on the other hand, was more the result of an increase in
private capital outflow seeking new opportunity, higher return or
speculative advantage abroad.

Meanwhile this country has continued to bear more than its share of the
West's military and foreign aid obligations. Under existing policies,
another deficit of $2 billion is predicted for 1961--and individuals in
those countries whose dollar position once depended on these deficits
for improvement now wonder aloud whether our gold reserves will remain
sufficient to meet our own obligations.

All this is cause for concern--but it is not cause for panic. For our
monetary and financial position remains exceedingly strong. Including
our drawing rights in the International Monetary Fund and the gold
reserve held as backing for our currency and Federal Reserve deposits,
we have some $22 billion in total gold stocks and other international
monetary reserves available--and I now pledge that their full strength
stands behind the value of the dollar for use if needed.

Moreover, we hold large assets abroad--the total owed this nation far
exceeds the claims upon our reserves--and our exports once again
substantially exceed our imports.

In short, we need not--and we shall not--take any action to increase the
dollar price of gold from $35 an ounce--to impose exchange controls--to
reduce our anti-recession efforts--to fall back on restrictive trade
policies--or to weaken our commitments around the world.

This Administration will not distort the value of the dollar in any
fashion. And this is a commitment.

Prudence and good sense do require, however, that new steps be taken to
ease the payments deficit and prevent any gold crisis. Our success in
world affairs has long depended in part upon foreign confidence in our
ability to pay. A series of executive orders, legislative remedies and
cooperative efforts with our allies will get underway immediately--aimed
at attracting foreign investment and travel to this country--promoting
American exports, at stable prices and with more liberal government
guarantees and financing--curbing tax and customs loopholes that
encourage undue spending of private dollars abroad--and (through OECD,
NATO and otherwise) sharing with our allies all efforts to provide for
the common defense of the free world and the hopes for growth of the
less developed lands. While the current deficit lasts, ways will be
found to ease our dollar outlays abroad without placing the full burden
on the families of men whom we have asked to serve our Flag overseas.

In short, whatever is required will be done to back up all our efforts
abroad, and to make certain that, in the future as in the past, the
dollar is as "sound as a dollar."

III.

But more than our exchange of international payments is out of balance.
The current Federal budget for fiscal 1961 is almost certain to show a
net deficit. The budget already submitted for fiscal 1962 will remain in
balance only if the Congress enacts all the revenue measures
requested--and only if an earlier and sharper up-turn in the economy
than my economic advisers now think likely produces the tax revenues
estimated. Nevertheless, a new Administration must of necessity build on
the spending and revenue estimates already submitted. Within that
framework, barring the development of urgent national defense needs or a
worsening of the economy, it is my current intention to advocate a
program of expenditures which, including revenues from a stimulation of
the economy, will not of and by themselves unbalance the earlier Budget.

However, we will do what must be done. For our national household is
cluttered with unfinished and neglected tasks. Our cities are being
engulfed in squalor. Twelve long years after Congress declared our goal
to be "a decent home and a suitable environment for every American
family," we still have 25 million Americans living in substandard homes.
A new housing program under a new Housing and Urban Affairs Department
will be needed this year.

Our classrooms contain 2 million more children than they can properly
have room for, taught by 90,000 teachers not properly qualified to
teach. One third of our most promising high school graduates are
financially unable to continue the development of their talents. The war
babies of the 1940's, who overcrowded our schools in the 1950's, are now
descending in 1960 upon our colleges--with two college students for
every one, ten years from now--and our colleges are ill prepared. We
lack the scientists, the engineers and the teachers our world
obligations require. We have neglected oceanography, saline water
conversion, and the basic research that lies at the root of all
progress. Federal grants for both higher and public school education can
no longer be delayed.

Medical research has achieved new wonders--but these wonders are too
often beyond the reach of too many people, owing to a lack of income
(particularly among the aged), a lack of hospital beds, a lack of
nursing homes and a lack of doctors and dentists. Measures to provide
health care for the aged under Social Security, and to increase the
supply of both facilities and personnel, must be undertaken this year.

Our supply of clean water is dwindling. Organized and juvenile crimes
cost the taxpayers millions of dollars each year, making it essential
that we have improved enforcement and new legislative safeguards. The
denial of constitutional rights to some of our fellow Americans on
account of race--at the ballot box and elsewhere--disturbs the national
conscience, and subjects us to the charge of world opinion that our
democracy is not equal to the high promise of our heritage. Morality in
private business has not been sufficiently spurred by morality in public
business. A host of problems and projects in all 50 States, though not
possible to include in this Message, deserves--and will receive--the
attention of both the Congress and the Executive Branch. On most of
these matters, Messages will be sent to the Congress within the next two
weeks.

IV.

But all these problems pale when placed beside those which confront us
around the world. No man entering upon this office, regardless of his
party, regardless of his previous service in Washington, could fail to
be staggered upon learning--even in this brief 10 day period--the harsh
enormity of the trials through which we must pass in the next four
years. Each day the crises multiply. Each day their solution grows more
difficult. Each day we draw nearer the hour of maximum danger, as
weapons spread and hostile forces grow stronger. I feel I must inform
the Congress that our analyses over the last ten days make it clear
that--in each of the principal areas of crisis--the tide of events has
been running out and time has not been our friend.

In Asia, the relentless pressures of the Chinese Communists menace the
security of the entire area--from the borders of India and South Viet
Nam to the jungles of Laos, struggling to protect its newly-won
independence. We seek in Laos what we seek in all Asia, and, indeed, in
all of the world--freedom for the people and independence for the
government. And this Nation shall persevere in our pursuit of these
objectives.

In Africa, the Congo has been brutally torn by civil strife, political
unrest and public disorder. We shall continue to support the heroic
efforts of the United Nations to restore peace and order--efforts which
are now endangered by mounting tensions, unsolved problems, and
decreasing support from many member states.

In Latin America, Communist agents seeking to exploit that region's
peaceful revolution of hope have established a base on Cuba, only 90
miles from our shores. Our objection with Cuba is not over the people's
drive for a better life. Our objection is to their domination by foreign
and domestic tyrannies. Cuban social and economic reform should be
encouraged. Questions of economic and trade policy can always be
negotiated. But Communist domination in this Hemisphere can never be
negotiated.

We are pledged to work with our sister Republics to free the Americas of
all such foreign domination and all tyranny, working toward the goal of
a free hemisphere of free governments, extending from Cape Horn to the
Arctic Circle.

In Europe our alliances are unfulfilled and in some disarray. The unity
of NATO has been weakened by economic rivalry and partially eroded by
national interest. It has not yet fully mobilized its resources nor
fully achieved a common outlook. Yet no Atlantic power can meet on its
own the mutual problems now facing us in defense, foreign aid, monetary
reserves, and a host of other areas; and our close ties with those whose
hopes and interests we share are among this Nation's most powerful
assets.

Our greatest challenge is still the world that lies beyond the Cold
War--but the first great obstacle is still our relations with the Soviet
Union and Communist China. We must never be lulled into believing that
either power has yielded its ambitions for world domination--ambitions
which they forcefully restated only a short time ago. On the contrary,
our task is to convince them that aggression and subversion will not be
profitable routes to pursue these ends. Open and peaceful
competition--for prestige, for markets, for scientific achievement, even
for men's minds--is something else again. For if Freedom and Communism
were to compete for man's allegiance in a world at peace, I would look
to the future with ever increasing confidence.

To meet this array of challenges--to fulfill the role we cannot avoid on
the world scene--we must reexamine and revise our whole arsenal of
tools: military, economic and political.

One must not overshadow the other. On the Presidential Coat of Arms, the
American eagle holds in his right talon the olive branch, while in his
left he holds a bundle of arrows. We intend to give equal attention to
both.

First, we must strengthen our military tools. We are moving into a
period of uncertain risk and great commitment in which both the military
and diplomatic possibilities require a Free World force so powerful as
to make any aggression clearly futile. Yet in the past, lack of a
consistent, coherent military strategy, the absence of basic assumptions
about our national requirements and the faulty estimates and duplication
arising from inter-service rivalries have all made it difficult to
assess accurately how adequate--or inadequate--our defenses really are.

I have, therefore, instructed the Secretary of Defense to reappraise our
entire defense strategy--our ability to fulfill our commitments--the
effectiveness, vulnerability, and dispersal of our strategic bases,
forces and warning systems--the efficiency and economy of our operation
and organization--the elimination of obsolete bases and
installations--and the adequacy, modernization and mobility of our
present conventional and nuclear forces and weapons systems in the light
of present and future dangers. I have asked for preliminary conclusions
by the end of February--and I then shall recommend whatever legislative,
budgetary or executive action is needed in the light of these
conclusions.

In the meantime, I have asked the Defense Secretary to initiate
immediately three new steps most clearly needed now:

First, I have directed prompt attention to increase our air-lift
capacity. Obtaining additional air transport mobility--and obtaining it
now--will better assure the ability of our conventional forces to
respond, with discrimination and speed, to any problem at any spot on
the globe at any moment's notice. In particular it will enable us to
meet any deliberate effort to avoid or divert our forces by starting
limited wars in widely scattered parts of the globe.

(b) I have directed prompt action to step up our Polaris submarine
program. Using unobligated ship-building funds now (to let contracts
originally scheduled for the next fiscal year) will build and place on
station--at least nine months earlier than planned--substantially more
units of a crucial deterrent--a fleet that will never attack first, but
possess sufficient powers of retaliation, concealed beneath the seas, to
discourage any aggressor from launching an attack upon our security.

(c) I have directed prompt action to accelerate our entire missile
program. Until the Secretary of Defense's reappraisal is completed, the
emphasis here will be largely on improved organization and
decision-making--on cutting down the wasteful duplications and the
time-lag that have handicapped our whole family of missiles. If we are
to keep the peace, we need an invulnerable missile force powerful enough
to deter any aggressor from even threatening an attack that he would
know could not destroy enough of our force to prevent his own
destruction. For as I said upon taking the oath of office: "Only when
our arms are sufficient beyond doubt can we be certain beyond doubt that
they will never be employed."

Secondly, we must improve our economic tools. Our role is essential and
unavoidable in the construction of a sound and expanding economy for the
entire non-communist world, helping other nations build the strength to
meet their own problems, to satisfy their own aspirations--to surmount
their own dangers. The problems in achieving this goal are towering and
unprecedented--the response must be towering and unprecedented as well,
much as Lend-Lease and the Marshall Plan were in earlier years, which
brought such fruitful results.

(a) I intend to ask the Congress for authority to establish a new and
more effective program for assisting the economic, educational and
social development of other countries and continents. That program must
stimulate and take more effectively into account the contributions of
our allies, and provide central policy direction for all our own
programs that now so often overlap, conflict or diffuse our energies and
resources. Such a program, compared to past programs, will require

--more flexibility for short run emergencies

--more commitment to long term development--new attention to education
at all levels--greater emphasis on the recipient nation's role, their
effort, their purpose, with greater social justice for their people,
broader distribution and participation by their people and more
efficient public administration and more efficient tax systems of their
own

--and orderly planning for national and regional development instead of
a piecemeal approach.

I hope the Senate will take early action approving the Convention
establishing the Organization for Economic Cooperation and Development.
This will be an important instrument in sharing with our allies this
development effort--working toward the time when each nation will
contribute in proportion to its ability to pay. For, while we are
prepared to assume our full share of these huge burdens, we cannot and
must not be expected to bear them alone.

To our sister republics to the south, we have pledged a new alliance for
progress--alianza para progreso. Our goal is a free and prosperous Latin
America, realizing for all its states and all its citizens a degree of
economic and social progress that matches their historic contributions
of culture, intellect and liberty. To start this nation's role at this
time in that alliance of neighbors, I am recommending the following:

--That the Congress appropriate in full the $500 million fund pledged by
the Act of Bogota, to be used not as an instrument of the Cold War, but
as a first step in the sound development of the Americas.

--That a new Inter-Departmental Task Force be established under the
leadership of the Department of State, to coordinate at the highest
level all policies and programs of concern to the Americas.

--That our delegates to the OAS, working with those of other members,
strengthen that body as an instrument to preserve the peace and to
prevent foreign domination anywhere in the Hemisphere.

--That, in cooperation with other nations, we launch a new hemispheric
attack on illiteracy and inadequate educational opportunities to all
levels; and, finally,

--That a Food-for-Peace mission be sent immediately to Latin America to
explore ways in which our vast food abundance can be used to help end
hunger and malnutrition in certain areas of suffering in our own
hemisphere.

This Administration is expanding its Food-for-Peace Program in every
possible way. The product of our abundance must be used more effectively
to relieve hunger and help economic growth in all corners of the globe.
And I have asked the Director of this Program to recommend additional
ways in which these surpluses can advance the interests of world
peace--including the establishment of world food reserves.

An even more valuable national asset is our reservoir of dedicated men
and women--not only on our college campuses but in every age group--who
have indicated their desire to contribute their skills, their efforts,
and a part of their lives to the fight for world order. We can mobilize
this talent through the formation of a National Peace Corps, enlisting
the services of all those with the desire and capacity to help foreign
lands meet their urgent needs for trained personnel.

Finally, while our attention is centered on the development of the non-
communist world, we must never forget our hopes for the ultimate freedom
and welfare of the Eastern European peoples. In order to be prepared to
help re-establish historic ties of friendship, I am asking the Congress
for increased discretion to use economic tools in this area whenever
this is found to be clearly in the national interest. This will require
amendment of the Mutual Defense Assistance Control Act along the lines I
proposed as a member of the Senate, and upon which the Senate voted last
summer. Meanwhile, I hope to explore with the Polish government the
possibility of using our frozen Polish funds on projects of peace that
will demonstrate our abiding friendship for and interest in the people
of Poland.

Third, we must sharpen our political and diplomatic tools--the means of
cooperation and agreement on which an enforceable world order must
ultimately rest.

I have already taken steps to coordinate and expand our disarmament
effort--to increase our programs of research and study--and to make arms
control a central goal of our national policy under my direction. The
deadly arms race, and the huge resources it absorbs, have too long
overshadowed all else we must do. We must prevent that arms race from
spreading to new nations, to new nuclear powers and to the reaches of
outer space. We must make certain that our negotiators are better
informed and better prepared--to formulate workable proposals of our own
and to make sound judgments about the proposals of others.

I have asked the other governments concerned to agree to a reasonable
delay in the talks on a nuclear test ban--and it is our intention to
resume negotiations prepared to reach a final agreement with any nation
that is equally willing to agree to an effective and enforceable treaty.

We must increase our support of the United Nations as an instrument to
end the Cold War instead of an arena in which to fight it. In
recognition of its increasing importance and the doubling of its
membership

--we are enlarging and strengthening our own mission to the U.N.

--we shall help insure that it is properly financed.

--we shall work to see that the integrity of the office of the
Secretary-General is maintained.

--And I would address a special plea to the smaller nations of the
world--to join with us in strengthening this organization, which is far
more essential to their security than it is to ours--the only body in
the world where no nation need be powerful to be secure, where every
nation has an equal voice, and where any nation can exert influence not
according to the strength of its armies but according to the strength of
its ideas. It deserves the support of all.

Finally, this Administration intends to explore promptly all possible
areas of cooperation with the Soviet Union and other nations "to invoke
the wonders of science instead of its terrors." Specifically, I now
invite all nations--including the Soviet Union--to join with us in
developing a weather prediction program, in a new communications
satellite program and in preparation for probing the distant planets of
Mars and Venus, probes which may someday unlock the deepest secrets of
the universe.

Today this country is ahead in the science and technology of space,
while the Soviet Union is ahead in the capacity to lift large vehicles
into orbit. Both nations would help themselves as well as other nations
by removing these endeavors from the bitter and wasteful competition of
the Cold War. The United States would be willing to join with the Soviet
Union and the scientists of all nations in a greater effort to make the
fruits of this new knowledge available to all--and, beyond that, in an
effort to extend farm technology to hungry nations--to wipe out
disease--to increase the exchanges of scientists and their
knowledge--and to make our own laboratories available to technicians of
other lands who lack the facilities to pursue their own work. Where
nature makes natural allies of us all, we can demonstrate that
beneficial relations are possible even with those with whom we most
deeply disagree--and this must someday be the basis of world peace and
world law.

V.

I have commented on the state of the domestic economy, our balance of
payments, our Federal and social budget and the state of the world. I
would like to conclude with a few remarks about the state of the
Executive branch. We have found it full of honest and useful public
servants--but their capacity to act decisively at the exact time action
is needed has too often been muffled in the morass of committees,
timidities and fictitious theories which have created a growing gap
between decision and execution, between planning and reality. In a time
of rapidly deteriorating situations at home and abroad, this is bad for
the public service and particularly bad for the country; and we mean to
make a change.

I have pledged myself and my colleagues in the cabinet to a continuous
encouragement of initiative, responsibility and energy in serving the
public interest. Let every public servant know, whether his post is high
or low, that a man's rank and reputation in this Administration will be
determined by the size of the job he does, and not by the size of his
staff, his office or his budget. Let it be clear that this
Administration recognizes the value of dissent and daring--that we greet
healthy controversy as the hallmark of healthy change. Let the public
service be a proud and lively career. And let every man and woman who
works in any area of our national government, in any branch, at any
level, be able to say with pride and with honor in future years: "I
served the United States government in that hour of our nation's need."

For only with complete dedication by us all to the national interest can
we bring our country through the troubled years that lie ahead. Our
problems are critical. The tide is unfavorable. The news will be worse
before it is better. And while hoping and working for the best, we
should prepare ourselves now for the worst.

We cannot escape our dangers--neither must we let them drive us into
panic or narrow isolation. In many areas of the world where the balance
of power already rests with our adversaries, the forces of freedom are
sharply divided. It is one of the ironies of our time that the
techniques of a harsh and repressive system should be able to instill
discipline and ardor in its servants--while the blessings of liberty
have too often stood for privilege, materialism and a life of ease.

But I have a different view of liberty.

Life in 1961 will not be easy. Wishing it, predicting it, even asking
for it, will not make it so. There will be further setbacks before the
tide is turned. But turn it we must. The hopes of all mankind rest upon
us--not simply upon those of us in this chamber, but upon the peasant in
Laos, the fisherman in Nigeria, the exile from Cuba, the spirit that
moves every man and Nation who shares our hopes for freedom and the
future. And in the final analysis, they rest most of all upon the pride
and perseverance of our fellow citizens of the great Republic.

In the words of a great President, whose birthday we honor today,
closing his final State of the Union Message sixteen years ago, "We pray
that we may be worthy of the unlimited opportunities that God has given
us."

***

State of the Union Address
John F. Kennedy
January 11, 1962

Mr. Vice President, my old colleague from Massachusetts and your new
Speaker, John McCormack, Members of the 87th Congress, ladies and
gentlemen:

This week we begin anew our joint and separate efforts to build the
American future. But, sadly, we build without a man who linked a long
past with the present and looked strongly to the future. "Mister Sam"
Rayburn is gone. Neither this House nor the Nation is the same without
him.

Members of the Congress, the Constitution makes us not rivals for power
but partners for progress. We are all trustees for the American people,
custodians of the American heritage. It is my task to report the State
of the Union--to improve it is the task of us all.

In the past year, I have traveled not only across our own land but to
other lands--to the North and the South, and across the seas. And I have
found--as I am sure you have, in your travels--that people everywhere,
in spite of occasional disappointments, look to us--not to our wealth or
power, but to the splendor of our ideals. For our Nation is commissioned
by history to be either an observer of freedom's failure or the cause of
its success. Our overriding obligation in the months ahead is to fulfill
the world's hopes by fulfilling our own faith.

I. STRENGTHENING THE ECONOMY

That task must begin at home. For if we cannot fulfill our own ideals
here, we cannot expect others to accept them. And when the youngest
child alive today has grown to the cares of manhood, our position in the
world will be determined first of all by what provisions we make
today--for his education, his health, and his opportunities for a good
home and a good job and a good life.

At home, we began the year in the valley of recession--we completed it
on the high road of recovery and growth. With the help of new
Congressionally approved or Administratively increased stimulants to our
economy, the number of major surplus labor areas has declined from 101
to 60; non-agricultural employment has increased by more than a million
jobs; and the average factory work-week has risen to well over 40 hours.
At year's end the economy which Mr. Khrushchev once called a "stumbling
horse" was racing to new records in consumer spending, labor income, and
industrial production.

We are gratified--but we are not satisfied. Too many unemployed are
still looking for the blessings of prosperity. As those who leave our
schools and farms demand new jobs, automation takes old jobs away. To
expand our growth and job opportunities, I urge on the Congress three
measures:

(1) First, the Manpower Training and Development Act, to stop the waste
of able-bodied men and women who want to work, but whose only skill has
been replaced by a machine, or moved with a mill, or shut down with a
mine;

(2) Second, the Youth Employment Opportunities Act, to help train and
place not only the one million young Americans who are both out of
school and out of work, but the twenty-six million young Americans
entering the labor market in this decade; and

(3) Third, the 8 percent tax credit for investment in machinery and
equipment, which, combined with planned revisions of depreciation
allowances, will spur our modernization, our growth, and our ability to
compete abroad.

Moreover--pleasant as it may be to bask in the warmth of recovery--let
us not forget that we have suffered three recessions in the last 7
years. The time to repair the roof is when the sun is shining--by
filling three basic gaps in our anti-recession protection. We need:

(1) First, Presidential stand-by authority, subject to Congressional
veto, to adjust personal income tax rates downward within a specified
range and time, to slow down an economic decline before it has dragged
us all down;

(2) Second, Presidential stand-by authority, upon a given rise in the
rate of unemployment, to accelerate Federal and federally-aided capital
improvement programs; and

(3) Third, a permanent strengthening of our unemployment compensation
system--to maintain for our fellow citizens searching for a job who
cannot find it, their purchasing power and their living standards
without constant resort--as we have seen in recent years by the Congress
and the Administrations--to temporary supplements.

If we enact this six-part program, we can show the whole world that a
free economy need not be an unstable economy--that a free system need
not leave men unemployed--and that a free society is not only the most
productive but the most stable form of organization yet fashioned by
man.

II. FIGHTING INFLATION

But recession is only one enemy of a free economy--inflation is another.
Last year, 1961, despite rising production and demand, consumer prices
held almost steady--and wholesale prices declined. This is the best
record of overall price stability of any comparable period of recovery
since the end of World War II.

Inflation too often follows in the shadow of growth--while price
stability is made easy by stagnation or controls. But we mean to
maintain both stability and growth in a climate of freedom.

Our first line of defense against inflation is the good sense and public
spirit of business and labor--keeping their total increases in wages and
profits in step with productivity. There is no single statistical test
to guide each company and each union. But I strongly urge them--for
their country's interest, and for their own--to apply the test of the
public interest to these transactions.

Within this same framework of growth and wage-price stability:

--This administration has helped keep our economy competitive by
widening the access of small business to credit and Government
contracts, and by stepping up the drive against monopoly, price-fixing,
and racketeering;

--We will submit a Federal Pay Reform bill aimed at giving our
classified, postal, and other employees new pay scales more comparable
to those of private industry;

--We are holding the fiscal 1962 budget deficit far below the level
incurred after the last recession in 1958; and, finally,

--I am submitting for fiscal 1963 a balanced Federal Budget.

This is a joint responsibility, requiring Congressional cooperation on
appropriations, and on three sources of income in particular:

(1) First, an increase in postal rates, to end the postal deficit;

(2) Second, passage of the tax reforms previously urged, to remove
unwarranted tax preferences, and to apply to dividends and to interest
the same withholding requirements we have long applied to wages; and

(3) Third, extension of the present excise and corporation tax rates,
except for those changes--which will be recommended in a
message--affecting transportation.

III. GETTING AMERICA MOVING

But a stronger nation and economy require more than a balanced Budget.
They require progress in those programs that spur our growth and fortify
our strength.

CITIES

A strong America depends on its cities--America's glory, and sometimes
America's shame. To substitute sunlight for congestion and progress for
decay, we have stepped up existing urban renewal and housing programs,
and launched new ones--redoubled the attack on water pollution--speeded
aid to airports, hospitals, highways, and our declining mass transit
systems--and secured new weapons to combat organized crime,
racketeering, and youth delinquency, assisted by the coordinated and
hard-hitting efforts of our investigative services: the FBI, the
Internal Revenue, the Bureau of Narcotics, and many others. We shall
need further anti-crime, mass transit, and transportation
legislation--and new tools to fight air pollution. And with all this
effort under way, both equity and common sense require that our nation's
urban areas--containing three-fourths of our population--sit as equals
at the Cabinet table. I urge a new Department of Urban Affairs and
Housing.

AGRICULTURE AND RESOURCES

A strong America also depends on its farms and natural resources.
American farmers took heart in 1961--from a billion dollar rise in farm
income--and from a hopeful start on reducing the farm surpluses. But we
are still operating under a patchwork accumulation of old laws, which
cost us $1 billion a year in CCC carrying charges alone, yet fail to
halt rural poverty or boost farm earnings.

Our task is to master and turn to fully fruitful ends the magnificent
productivity of our farms and farmers. The revolution on our own
countryside stands in the sharpest contrast to the repeated farm
failures of the Communist nations and is a source of pride to us all.
Since 1950 our agricultural output per man-hour has actually doubled!
Without new, realistic measures, it will someday swamp our farmers and
our taxpayers in a national scandal or a farm depression.

I will, therefore, submit to the Congress a new comprehensive farm
program--tailored to fit the use of our land and the supplies of each
crop to the long-range needs of the sixties--and designed to prevent
chaos in the sixties with a program of common sense.

We also need for the sixties--if we are to bequeath our full national
estate to our heirs--a new long-range conservation and recreation
program--expansion of our superb national parks and
forests--preservation of our authentic wilderness areas--new starts on
water and power projects as our population steadily increases--and
expanded REA generation and transmission loans.

CIVIL RIGHTS

But America stands for progress in human rights as well as economic
affairs, and a strong America requires the assurance of full and equal
rights to all its citizens, of any race or of any color. This
Administration has shown as never before how much could be done through
the full use of Executive powers--through the enforcement of laws
already passed by the Congress--through persuasion, negotiation, and
litigation, to secure the constitutional rights of all: the right to
vote, the right to travel without hindrance across State lines, and the
right to free public education.

I issued last March a comprehensive order to guarantee the right to
equal employment opportunity in all Federal agencies and contractors.
The Vice President's Committee thus created has done much, including the
voluntary "Plans for Progress" which, in all sections of the country,
are achieving a quiet but striking success in opening up to all races
new professional, supervisory, and other job opportunities.

But there is much more to be done--by the Executive, by the courts, and
by the Congress. Among the bills now pending before you, on which the
executive departments will comment in detail, are appropriate methods of
strengthening these basic rights which have our full support. The right
to vote, for example, should no longer be denied through such arbitrary
devices on a local level, sometimes abused, such as literacy tests and
poll taxes. As we approach the 100th anniversary, next January, of the
Emancipation Proclamation, let the acts of every branch of the
Government--and every citizen--portray that "righteousness does exalt a
nation."

HEALTH AND WELFARE

Finally, a strong America cannot neglect the aspirations of its
citizens--the welfare of the needy, the health care of the elderly, the
education of the young. For we are not developing the Nation's wealth
for its own sake. Wealth is the means--and people are the ends. All our
material riches will avail us little if we do not use them to expand the
opportunities of our people.

Last year, we improved the diet of needy people--provided more hot
lunches and fresh milk to school children--built more college
dormitories--and, for the elderly, expanded private housing, nursing
homes, health services, and social security. But we have just begun.

To help those least fortunate of all, I am recommending a new public
welfare program, stressing services instead of support, rehabilitation
instead of relief, and training for useful work instead of prolonged
dependency.

To relieve the critical shortage of doctors and dentists--and this is a
matter which should concern us all--and expand research, I urge action
to aid medical and dental colleges and scholarships and to establish new
National Institutes of Health.

To take advantage of modern vaccination achievements, I am proposing a
mass immunization program, aimed at the virtual elimination of such
ancient enemies of our children as polio, diphtheria, whooping cough,
and tetanus.

To protect our consumers from the careless and the unscrupulous, I shall
recommend improvements in the Food and Drug laws--strengthening
inspection and standards, halting unsafe and worthless products,
preventing misleading labels, and cracking down on the illicit sale of
habit-forming drugs.

But in matters of health, no piece of unfinished business is more
important or more urgent than the enactment under the social security
system of health insurance for the aged.

For our older citizens have longer and more frequent illnesses, higher
hospital and medical bills and too little income to pay them. Private
health insurance helps very few--for its cost is high and its coverage
limited. Public welfare cannot help those too proud to seek relief but
hard-pressed to pay their own bills. Nor can their children or
grandchildren always sacrifice their own health budgets to meet this
constant drain.

Social security has long helped to meet the hardships of retirement,
death, and disability. I now urge that its coverage be extended without
further delay to provide health insurance for the elderly.

EDUCATION

Equally important to our strength is the quality of our education. Eight
million adult Americans are classified as functionally illiterate. This
is a disturbing figure--reflected in Selective Service rejection
rates--reflected in welfare rolls and crime rates. And I shall recommend
plans for a massive attack to end this adult illiteracy.

I shall also recommend bills to improve educational quality, to
stimulate the arts, and, at the college level, to provide Federal loans
for the construction of academic facilities and Federally financed
scholarships.

If this Nation is to grow in wisdom and strength, then every able high
school graduate should have the opportunity to develop his talents. Yet
nearly half lack either the funds or the facilities to attend college.
Enrollments are going to double in our colleges in the short space of 10
years. The annual cost per student is skyrocketing to astronomical
levels--now averaging $1,650 a year, although almost half of our
families earn less than $5,000. They cannot afford such costs--but this
Nation cannot afford to maintain its military power and neglect its
brainpower.

But excellence in education must begin at the elementary level. I sent
to the Congress last year a proposal for Federal aid to public school
construction and teachers' salaries. I believe that bill, which passed
the Senate and received House Committee approval, offered the minimum
amount required by our needs and--in terms of across-the-board aid--the
maximum scope permitted by our Constitution. I therefore see no reason
to weaken or withdraw that bill: and I urge its passage at this session.

"Civilization," said H. G. Wells, "is a race between education and
catastrophe." It is up to you in this Congress to determine the winner
of that race.

These are not unrelated measures addressed to specific gaps or
grievances in our national life. They are the pattern of our intentions
and the foundation of our hopes. "I believe in democracy," said Woodrow
Wilson, "because it releases the energy of every human being." The
dynamic of democracy is the power and the purpose of the individual, and
the policy of this administration is to give to the individual the
opportunity to realize his own highest possibilities.

Our program is to open to all the opportunity for steady and productive
employment, to remove from all the handicap of arbitrary or irrational
exclusion, to offer to all the facilities for education and health and
welfare, to make society the servant of the individual and the
individual the source of progress, and thus to realize for all the full
promise of American life.

IV. OUR GOALS ABROAD

All of these efforts at home give meaning to our efforts abroad. Since
the close of the Second World War, a global civil war has divided and
tormented mankind. But it is not our military might, or our higher
standard of living, that has most distinguished us from our adversaries.
It is our belief that the state is the servant of the citizen and not
his master.

This basic clash of ideas and wills is but one of the forces reshaping
our globe--swept as it is by the tides of hope and fear, by crises in
the headlines today that become mere footnotes tomorrow. Both the
successes and the setbacks of the past year remain on our agenda of
unfinished business. For every apparent blessing contains the seeds of
danger--every area of trouble gives out a ray of hope--and the one
unchangeable certainty is that nothing is certain or unchangeable.

Yet our basic goal remains the same: a peaceful world community of free
and independent states--free to choose their own future and their own
system, so long as it does not threaten the freedom of others.

Some may choose forms and ways that we would not choose for
ourselves--but it is not for us that they are choosing. We can welcome
diversity--the Communists cannot. For we offer a world of choice--they
offer the world of coercion. And the way of the past shows clearly that
freedom, not coercion, is the wave of the future. At times our goal has
been obscured by crisis or endangered by conflict--but it draws
sustenance from five basic sources of strength:

--the moral and physical strength of the United States;

--the united strength of the Atlantic Community;

--the regional strength of our Hemispheric relations;

--the creative strength of our efforts in the new and developing
nations; and

--the peace-keeping strength of the United Nations.

V. OUR MILITARY STRENGTH

Our moral and physical strength begins at home as already discussed. But
it includes our military strength as well. So long as fanaticism and
fear brood over the affairs of men, we must arm to deter others from
aggression.

In the past 12 months our military posture has steadily improved. We
increased the previous defense budget by 15 percent--not in the
expectation of war but for the preservation of peace. We more than
doubled our acquisition rate of Polaris submarines--we doubled the
production capacity for Minuteman missiles--and increased by 50 percent
the number of manned bombers standing ready on a 15 minute alert. This
year the combined force levels planned under our new Defense
budget--including nearly three hundred additional Polaris and Minuteman
missiles--have been precisely calculated to insure the continuing
strength of our nuclear deterrent.

But our strength may be tested at many levels. We intend to have at all
times the capacity to resist non-nuclear or limited attacks--as a
complement to our nuclear capacity, not as a substitute. We have
rejected any all-or-nothing posture which would leave no choice but
inglorious retreat or unlimited retaliation.

Thus we have doubled the number of ready combat divisions in the Army's
strategic reserve--increased our troops in Europe--built up the
Marines--added new sealift and airlift capacity--modernized our weapons
and ammunition--expanded our anti-guerrilla forces--and increased the
active fleet by more than 70 vessels and our tactical air forces by
nearly a dozen wings.

Because we needed to reach this higher long-term level of readiness more
quickly, 155,000 members of the Reserve and National Guard were
activated under the Act of this Congress. Some disruptions and distress
were inevitable. But the overwhelming majority bear their burdens--and
their Nation's burdens--with admirable and traditional devotion.

In the coming year, our reserve programs will be revised--two Army
Divisions will, I hope, replace those Guard Divisions on duty--and
substantial other increases will boost our Air Force fighter units, the
procurement of equipment, and our continental defense and warning
efforts. The Nation's first serious civil defense shelter program is
under way, identifying, marking, and stocking 50 million spaces; and I
urge your approval of Federal incentives for the construction of public
fall-out shelters in schools and hospitals and similar centers.

VI. THE UNITED NATIONS

But arms alone are not enough to keep the peace--it must be kept by men.
Our instrument and our hope is the United Nations--and I see little
merit in the impatience of those who would abandon this imperfect world
instrument because they dislike our imperfect world. For the troubles of
a world organization merely reflect the troubles of the world itself.
And if the organization is weakened, these troubles can only increase.
We may not always agree with every detailed action taken by every
officer of the United Nations, or with every voting majority. But as an
institution, it should have in the future, as it has had in the past
since its inception, no stronger or more faithful member than the United
States of America.

In 1961 the peace-keeping strength of the United Nations was reinforced.
And those who preferred or predicted its demise, envisioning a troika in
the seat of Hammarskjold--or Red China inside the Assembly--have seen
instead a new vigor, under a new Secretary General and a fully
independent Secretariat. In making plans for a new forum and principles
on disarmament --for peace-keeping in outer space--for a decade of
development effort--the UN fulfilled its Charter's lofty aim.

Eighteen months ago the tangled and turbulent Congo presented the UN
with its gravest challenge. The prospect was one of chaos--or certain
big-power confrontation, with all of its hazards and all of its risks,
to us and to others. Today the hopes have improved for peaceful
conciliation within a united Congo. This is the objective of our policy
in this important area.

No policeman is universally popular--particularly when he uses his stick
to restore law and order on his beat. Those members who are willing to
contribute their votes and their views--but very little else--have
created a serious deficit by refusing to pay their share of special UN
assessments. Yet they do pay their annual assessments to retain their
votes--and a new UN Bond issue, financing special operations for the
next 18 months, is to be repaid with interest from these regular
assessments. This is clearly in our interest. It will not only keep the
UN solvent, but require all voting members to pay their fair share of
its activities. Our share of special operations has long been much
higher than our share of the annual assessment--and the bond issue will
in effect reduce our disproportionate obligation, and for these reasons,
I am urging Congress to approve our participation.

With the approval of this Congress, we have undertaken in the past year
a great new effort in outer space. Our aim is not simply to be first on
the moon, any more than Charles Lindbergh's real aim was to be the first
to Paris. His aim was to develop the techniques of our own country and
other countries in the field of air and the atmosphere, and our
objective in making this effort, which we hope will place one of our
citizens on the moon, is to develop in a new frontier of science,
commerce and cooperation, the position of the United States and the Free
World.

This Nation belongs among the first to explore it, and among the
first--if not the first--we shall be. We are offering our know-how and
our cooperation to the United Nations. Our satellites will soon be
providing other nations with improved weather observations. And I shall
soon send to the Congress a measure to govern the financing and
operation of an International Communications Satellite system, in a
manner consistent with the public interest and our foreign policy.

But peace in space will help us naught once peace on earth is gone.
World order will be secured only when the whole world has laid down
these weapons which seem to offer us present security but threaten the
future survival of the human race. That armistice day seems very far
away. The vast resources of this planet are being devoted more and more
to the means of destroying, instead of enriching, human life.

But the world was not meant to be a prison in which man awaits his
execution. Nor has mankind survived the tests and trials of thousands of
years to surrender everything--including its existence--now. This Nation
has the will and the faith to make a supreme effort to break the log jam
on disarmament and nuclear tests--and we will persist until we prevail,
until the rule of law has replaced the ever dangerous use of force.

VII. LATIN AMERICA

I turn now to a prospect of great promise: our Hemispheric relations.
The Alliance for Progress is being rapidly transformed from proposal to
program. Last month in Latin America I saw for myself the quickening of
hope, the revival of confidence, the new trust in our country--among
workers and farmers as well as diplomats. We have pledged our help in
speeding their economic, educational, and social progress. The Latin
American Republics have in turn pledged a new and strenuous effort of
self-help and self-reform.

To support this historic undertaking, I am proposing--under the
authority contained in the bills of the last session of the Congress--a
special long-term Alliance for Progress fund of $3 billion. Combined
with our Food for Peace, Export-Import Bank, and other resources, this
will provide more than $1 billion a year in new support for the
Alliance. In addition, we have increased twelve-fold our Spanish and
Portuguese language broadcasting in Latin America, and improved
Hemispheric trade and defense. And while the blight of communism has
been increasingly exposed and isolated in the Americas, liberty has
scored a gain. The people of the Dominican Republic, with our firm
encouragement and help, and those of our sister Republics of this
Hemisphere, are safely passing through the treacherous course from
dictatorship through disorder towards democracy.

VIII. THE NEW AND DEVELOPING NATIONS

Our efforts to help other new or developing nations, and to strengthen
their stand for freedom, have also made progress. A newly unified Agency
for International Development is reorienting our foreign assistance to
emphasize long-term development loans instead of grants, more economic
aid instead of military, individual plans to meet the individual needs
of the nations, and new standards on what they must do to marshal their
own resources.

A newly conceived Peace Corps is winning friends and helping people in
fourteen countries--supplying trained and dedicated young men and women,
to give these new nations a hand in building a society, and a glimpse of
the best that is in our country. If there is a problem here, it is that
we cannot supply the spontaneous and mounting demand.

A newly-expanded Food for Peace Program is feeding the hungry of many
lands with the abundance of our productive farms--providing lunches for
children in school, wages for economic development, relief for the
victims of flood and famine, and a better diet for millions whose daily
bread is their chief concern.

These programs help people; and, by helping people, they help freedom.
The views of their governments may sometimes be very different from
ours--but events in Africa, the Middle East, and Eastern Europe teach us
never to write off any nation as lost to the Communists. That is the
lesson of our time. We support the independence of those newer or weaker
states whose history, geography, economy or lack of power impels them to
remain outside "entangling alliances"--as we did for more than a
century. For the independence of nations is a bar to the Communists'
"grand design"--it is the basis of our own.

In the past year, for example, we have urged a neutral and independent
Laos--regained there a common policy with our major allies--and insisted
that a cease-fire precede negotiations. While a workable formula for
supervising its independence is still to be achieved, both the spread of
war--which might have involved this country also--and a Communist
occupation have thus far been prevented.

A satisfactory settlement in Laos would also help to achieve and
safeguard the peace in Viet-Nam--where the foe is increasing his tactics
of terror--where our own efforts have been stepped up--and where the
local government has initiated new programs and reforms to broaden the
base of resistance. The systematic aggression now bleeding that country
is not a "war of liberation"--for Viet-Nam is already free. It is a war
of attempted subjugation--and it will be resisted.

IX. THE ATLANTIC COMMUNITY

Finally, the united strength of the Atlantic Community has flourished in
the last year under severe tests. NATO has increased both the number and
the readiness of its air, ground, and naval units--both its nuclear and
non-nuclear capabilities. Even greater efforts by all its members are
still required. Nevertheless our unity of purpose and will has been, I
believe, immeasurably strengthened.

The threat to the brave city of Berlin remains. In these last 6 months
the Allies have made it unmistakably clear that our presence in Berlin,
our free access thereto, and the freedom of two million West Berliners
would not be surrendered either to force or through appeasement--and to
maintain those rights and obligations, we are prepared to talk, when
appropriate, and to fight, if necessary. Every member of NATO stands
with us in a common commitment to preserve this symbol of free man's
will to remain free.

I cannot now predict the course of future negotiations over Berlin. I
can only say that we are sparing no honorable effort to find a peaceful
and mutually acceptable resolution of this problem. I believe such a
resolution can be found, and with it an improvement in our relations
with the Soviet Union, if only the leaders in the Kremlin will recognize
the basic rights and interests involved, and the interest of all mankind
in peace.

But the Atlantic Community is no longer concerned with purely military
aims. As its common undertakings grow at an ever-increasing pace, we
are, and increasingly will be, partners in aid, trade, defense,
diplomacy, and monetary affairs.

The emergence of the new Europe is being matched by the emergence of new
ties across the Atlantic. It is a matter of undramatic daily cooperation
in hundreds of workaday tasks: of currencies kept in effective relation,
of development loans meshed together, of standardized weapons, and
concerted diplomatic positions. The Atlantic Community grows, not like a
volcanic mountain, by one mighty explosion, but like a coral reef, from
the accumulating activity of all.

Thus, we in the free world are moving steadily toward unity and
cooperation, in the teeth of that old Bolshevik prophecy, and at the
very time when extraordinary rumbles of discord can be heard across the
Iron Curtain. It is not free societies which bear within them the seeds
of inevitable disunity.

X. OUR BALANCE OF PAYMENTS

On one special problem, of great concern to our friends, and to us, I am
proud to give the Congress an encouraging report. Our efforts to
safeguard the dollar are progressing. In the 11 months preceding last
February 1, we suffered a net loss of nearly $2 billion in gold. In the
11 months that followed, the loss was just over half a billion dollars.
And our deficit in our basic transactions with the rest of the
world--trade, defense, foreign aid, and capital, excluding volatile
short-term flows--has been reduced from $2 billion for 1960 to about
one-third that amount for 1961. Speculative fever against the dollar is
ending--and confidence in the dollar has been restored.

We did not--and could not--achieve these gains through import
restrictions, troop withdrawals, exchange controls, dollar devaluation
or choking off domestic recovery. We acted not in panic but in
perspective. But the problem is not yet solved. Persistently large
deficits would endanger our economic growth and our military and defense
commitments abroad. Our goal must be a reasonable equilibrium in our
balance of payments. With the cooperation of the Congress, business,
labor, and our major allies, that goal can be reached.

We shall continue to attract foreign tourists and investments to our
shores, to seek increased military purchases here by our allies, to
maximize foreign aid procurement from American firms, to urge increased
aid from other fortunate nations to the less fortunate, to seek tax laws
which do not favor investment in other industrialized nations or tax
havens, and to urge coordination of allied fiscal and monetary policies
so as to discourage large and disturbing capital movements.

TRADE

Above all, if we are to pay for our commitments abroad, we must expand
our exports. Our businessmen must be export conscious and export
competitive. Our tax policies must spur modernization of our plants--our
wage and price gains must be consistent with productivity to hold the
line on prices--our export credit and promotion campaigns for American
industries must continue to expand.

But the greatest challenge of all is posed by the growth of the European
Common Market. Assuming the accession of the United Kingdom, there will
arise across the Atlantic a trading partner behind a single external
tariff similar to ours with an economy which nearly equals our own. Will
we in this country adapt our thinking to these new prospects and
patterns--or will we wait until events have passed us by?

This is the year to decide. The Reciprocal Trade Act is expiring. We
need a new law--a wholly new approach--a bold new instrument of American
trade policy. Our decision could well affect the unity of the West, the
course of the Cold War, and the economic growth of our Nation for a
generation to come.

If we move decisively, our factories and farms can increase their sales
to their richest, fastest-growing market. Our exports will increase. Our
balance of payments position will improve. And we will have forged
across the Atlantic a trading partnership with vast resources for
freedom.

If, on the other hand, we hang back in deference to local economic
pressures, we will find ourselves cut off from our major allies.
Industries--and I believe this is most vital--industries will move their
plants and jobs and capital inside the walls of the Common Market, and
jobs, therefore, will be lost here in the United States if they cannot
otherwise compete for its consumers. Our farm surpluses--our balance of
trade, as you all know, to Europe, the Common Market, in farm products,
is nearly three or four to one in our favor, amounting to one of the
best earners of dollars in our balance of payments structure, and
without entrance to this Market, without the ability to enter it, our
farm surpluses will pile up in the Middle West, tobacco in the South,
and other commodities, which have gone through Western Europe for 15
years. Our balance of payments position will worsen. Our consumers will
lack a wider choice of goods at lower prices. And millions of American
workers--whose jobs depend on the sale or the transportation or the
distribution of exports or imports, or whose jobs will be endangered by
the movement of our capital to Europe, or whose jobs can be maintained
only in an expanding economy--these millions of workers in your home
States and mine will see their real interests sacrificed.

Members of the Congress: The United States did not rise to greatness by
waiting for others to lead. This Nation is the world's foremost
manufacturer, farmer, banker, consumer, and exporter. The Common Market
is moving ahead at an economic growth rate twice ours. The Communist
economic offensive is under way. The opportunity is ours--the initiative
is up to us--and I believe that 1962 is the time.

To seize that initiative, I shall shortly send to the Congress a new
five-year Trade Expansion Action, far-reaching in scope but designed
with great care to make certain that its benefits to our people far
outweigh any risks. The bill will permit the gradual elimination of
tariffs here in the United States and in the Common Market on those
items in which we together supply 80 percent of the world's
trade--mostly items in which our own ability to compete is demonstrated
by the fact that we sell abroad, in these items, substantially more than
we import. This step will make it possible for our major industries to
compete with their counterparts in Western Europe for access to European
consumers.

On other goods the bill will permit a gradual reduction of duties up to
50 percent--permitting bargaining by major categories--and provide for
appropriate and tested forms of assistance to firms and employees
adjusting to import competition. We are not neglecting the safeguards
provided by peril points, an escape clause, or the National Security
Amendment. Nor are we abandoning our non-European friends or our
traditional "most-favored nation" principle. On the contrary, the bill
will provide new encouragement for their sale of tropical agricultural
products, so important to our friends in Latin America, who have long
depended upon the European market, who now find themselves faced with
new challenges which we must join with them in overcoming.

Concessions, in this bargaining, must of course be reciprocal, not
unilateral. The Common Market will not fulfill its own high promise
unless its outside tariff walls are low. The dangers of restriction or
timidity in our own policy have counterparts for our friends in Europe.
For together we face a common challenge: to enlarge the prosperity of
free men everywhere--to build in partnership a new trading community in
which all free nations may gain from the productive energy of free
competitive effort.

These various elements in our foreign policy lead, as I have said, to a
single goal--the goal of a peaceful world of free and independent
states. This is our guide for the present and our vision for the
future--a free community of nations, independent but interdependent,
uniting north and south, east and west, in one great family of man,
outgrowing and transcending the hates and fears that rend our age.

We will not reach that goal today, or tomorrow. We may not reach it in
our own lifetime. But the quest is the greatest adventure of our
century. We sometimes chafe at the burden of our obligations, the
complexity of our decisions, the agony of our choices. But there is no
comfort or security for us in evasion, no solution in abdication, no
relief in irresponsibility.

A year ago, in assuming the tasks of the Presidency, I said that few
generations, in all history, had been granted the role of being the
great defender of freedom in its hour of maximum danger. This is our
good fortune; and I welcome it now as I did a year ago. For it is the
fate of this generation--of you in the Congress and of me as
President--to live with a struggle we did not start, in a world we did
not make. But the pressures of life are not always distributed by
choice. And while no nation has ever faced such a challenge, no nation
has ever been so ready to seize the burden and the glory of freedom.

And in this high endeavor, may God watch over the United States of
America.

***

State of the Union Address
John F. Kennedy
January 14, 1963

Mr. Vice President, Mr. Speaker, Members of the 88th Congress:

I congratulate you all--not merely on your electoral victory but on your
selected role in history. For you and I are privileged to serve the
great Republic in what could be the most decisive decade in its long
history. The choices we make, for good or ill, may well shape the state
of the Union for generations yet to come.

Little more than 100 weeks ago I assumed the office of President of the
United States. In seeking the help of the Congress and our countrymen, I
pledged no easy answers. I pledged--and asked--only toil and dedication.
These the Congress and the people have given in good measure. And today,
having witnessed in recent months a heightened respect for our national
purpose and power--having seen the courageous calm of a united people in
a perilous hour--and having observed a steady improvement in the
opportunities and well-being of our citizens--I can report to you that
the state of this old but youthful Union, in the 175th year of its life,
is good.

In the world beyond our borders, steady progress has been made in
building a world of order. The people of West Berlin remain both free
and secure. A settlement, though still precarious, has been reached in
Laos. The spearpoint of aggression has been blunted in Viet-Nam. The end
of agony may be in sight in the Congo. The doctrine of troika is dead.
And, while danger continues, a deadly threat has been removed in Cuba.

At home, the recession is behind us. Well over a million more men and
women are working today than were working 2 years ago. The average
factory work week is once again more than 40 hours; our industries are
turning out more goods than ever before; and more than half of the
manufacturing capacity that lay silent and wasted 100 weeks ago is
humming with activity.

In short, both at home and abroad, there may now be a temptation to
relax. For the road has been long, the burden heavy, and the pace
consistently urgent.

But we cannot be satisfied to rest here. This is the side of the hill,
not the top. The mere absence of war is not peace. The mere absence of
recession is not growth. We have made a beginning--but we have only
begun.

Now the time has come to make the most of our gains--to translate the
renewal of our national strength into the achievement of our national
purpose.

I.

America has enjoyed 22 months of uninterrupted economic recovery. But
recovery is not enough. If we are to prevail in the long run, we must
expand the long-run strength of our economy. We must move along the path
to a higher rate of growth and full employment.

For this would mean tens of billions of dollars more each year in
production, profits, wages, and public revenues. It would mean an end to
the persistent slack which has kept our unemployment at or above 5
percent for 61 out of the past 62 months--and an end to the growing
pressures for such restrictive measures as the 35-hour week, which alone
could increase hourly labor costs by as much as 14 percent, start a new
wage-price spiral of inflation, and undercut our efforts to compete with
other nations.

To achieve these greater gains, one step, above all, is essential--the
enactment this year of a substantial reduction and revision in Federal
income taxes.

For it is increasingly clear--to those in Government, business, and
labor who are responsible for our economy's success--that our obsolete
tax system exerts too heavy a drag on private purchasing power, profits,
and employment. Designed to check inflation in earlier years, it now
checks growth instead. It discourages extra effort and risk. It distorts
the use of resources. It invites recurrent recessions, depresses our
Federal revenues, and causes chronic budget deficits.

Now, when the inflationary pressures of the war and the post-war years
no longer threaten, and the dollar commands new respect--now, when no
military crisis strains our resources--now is the time to act. We cannot
afford to be timid or slow. For this is the most urgent task confronting
the Congress in 1963.

In an early message, I shall propose a permanent reduction in tax rates
which will lower liabilities by $13.5 billion. Of this, $11 billion
results from reducing individual tax rates, which now range between 20
and 91 percent, to a more sensible range of 14 to 65 percent, with a
split in the present first bracket. Two and one-half billion dollars
results from reducing corporate tax rates, from 52 percent--which gives
the Government today a majority interest in profits--to the permanent
pre-Korean level of 47 percent. This is in addition to the more than $2
billion cut in corporate tax liabilities resulting from last year's
investment credit and depreciation reform.

To achieve this reduction within the limits of a manageable budgetary
deficit, I urge: first, that these cuts be phased over 3 calendar years,
beginning in 1963 with a cut of some $6 billion at annual rates; second,
that these reductions be coupled with selected structural changes,
beginning in 1964, which will broaden the tax base, end unfair or
unnecessary preferences, remove or lighten certain hardships, and in the
net offset some $3.5 billion of the revenue loss; and third, that
budgetary receipts at the outset be increased by $1.5 billion a year,
without any change in tax liabilities, by gradually shifting the tax
payments of large corporations to a more current time schedule. This
combined program, by increasing the amount of our national income, will
in time result in still higher Federal revenues. It is a fiscally
responsible program--the surest and the soundest way of achieving in
time a balanced budget in a balanced full employment economy.

This net reduction in tax liabilities of $10 billion will increase the
purchasing power of American families and business enterprises in every
tax bracket, with greatest increase going to our low-income consumers.
It will, in addition, encourage the initiative and risk-taking on which
our free system depends--induce more investment, production, and
capacity use--help provide the 2 million new jobs we need every
year--and reinforce the American principle of additional reward for
additional effort.

I do not say that a measure for tax reduction and reform is the only way
to achieve these goals.

No doubt a massive increase in Federal spending could also create jobs
and growth, but in today's setting, private consumers, employers, and
investors should be given a full opportunity first.

No doubt a temporary tax cut could provide a spur to our economy--but a
long-run problem compels a long-run solution.

No doubt a reduction in either individual or corporation taxes alone
would be of great help--but corporations need customers and job seekers
need jobs.

No doubt tax reduction without reform would sound simpler and more
attractive to many--but our growth is also hampered by a host of tax
inequities and special preferences which have distorted the flow of
investment.

And finally, there are no doubt some who would prefer to put off a tax
cut in the hope that ultimately an end to the cold war would make
possible an equivalent cut in expenditures--but that end is not in view
and to wait for it would be costly and self-defeating.

In submitting a tax program which will, of course, temporarily increase
the deficit but can ultimately end it--and in recognition of the need to
control expenditures--I will shortly submit a fiscal 1964 administrative
budget which, while allowing for needed rises in defense, space, and
fixed interest charges, holds total expenditures for all other purposes
below this year's level.

This requires the reduction or postponement of many desirable programs,
the absorption of a large part of last year's Federal pay raise through
personnel and other economies, the termination of certain installations
and projects, and the substitution in several programs of private for
public credit. But I am convinced that the enactment this year of tax
reduction and tax reform overshadows all other domestic problems in this
Congress. For we cannot for long lead the cause of peace and freedom, if
we ever cease to set the pace here at home.

II.

Tax reduction alone, however, is not enough to strengthen our society,
to provide opportunities for the four million Americans who are born
every year, to improve the lives of 32 million Americans who live on the
outskirts of poverty.

The quality of American life must keep pace with the quantity of
American goods.

This country cannot afford to be materially rich and spiritually poor.

Therefore, by holding down the budgetary cost of existing programs to
keep within the limitations I have set, it is both possible and
imperative to adopt other new measures that we cannot afford to
postpone.

These measures are based on a series of fundamental premises, grouped
under four related headings:

First, we need to strengthen our Nation by investing in our youth.

The future of any country which is dependent upon the will and wisdom of
its citizens is damaged, and irreparably damaged, whenever any of its
children is not educated to the full extent of his talent, from grade
school through graduate school. Today, an estimated 4 out of every 10
students in the 5th grade will not even finish high school--and that is
a waste we cannot afford.

In addition, there is no reason why one million young Americans, out of
school and out of work, should all remain unwanted and often untrained
on our city streets when their energies can be put to good use.

Finally, the overseas success of our Peace Corps volunteers, most of
them young men and women carrying skills and ideas to needy people,
suggests the merit of a similar corps serving our own community needs:
in mental hospitals, on Indian reservations, in centers for the aged or
for young delinquents, in schools for the illiterate or the handicapped.
As the idealism of our youth has served world peace, so can it serve the
domestic tranquility.

Second, we need to strengthen our Nation by safeguarding its health.

Our working men and women, instead of being forced to beg for help from
public charity once they are old and ill, should start contributing now
to their own retirement health program through the Social Security
System.

Moreover, all our miracles of medical research will count for little if
we cannot reverse the growing nationwide shortage of doctors, dentists,
and nurses, and the widespread shortages of nursing homes and modern
urban hospital facilities. Merely to keep the present ratio of doctors
and dentists from declining any further, we must over the next 10 years
increase the capacity of our medical schools by 50 percent and our
dental schools by 100 percent.

Finally, and of deep concern, I believe that the abandonment of the
mentally ill and the mentally retarded to the grim mercy of custodial
institutions too often inflicts on them and on their families a needless
cruelty which this Nation should not endure. The incidence of mental
retardation in this country is three times as high as that of Sweden,
for example--and that figure can and must be reduced.

Third, we need to strengthen our Nation by protecting the basic rights
of its citizens.

The right to competent counsel must be assured to every man accused of
crime in Federal court, regardless of his means.

And the most precious and powerful right in the world, the right to vote
in a free American election, must not be denied to any citizen on
grounds of his race or color. I wish that all qualified Americans
permitted to vote were willing to vote, but surely in this centennial
year of Emancipation all those who are willing to vote should always be
permitted.

Fourth, we need to strengthen our Nation by making the best and the most
economical use of its resources and facilities.

Our economic health depends on healthy transportation arteries; and I
believe the way to a more modern, economical choice of national
transportation service is through increased competition and decreased
regulation. Local mass transit, faring even worse, is as essential a
community service as hospitals and highways. Nearly three-fourths of our
citizens live in urban areas, which occupy only 2 percent of our
land--and if local transit is to survive and relieve the congestion of
these cities, it needs Federal stimulation and assistance.

Next, this Government is in the storage and stockpile business to the
melancholy tune of more than $16 billion. We must continue to support
farm income, but we should not pile more farm surpluses on top of the
$7.5 billion we already own. We must maintain a stockpile of strategic
materials, but the $8.5 billion we have acquired--for reasons both good
and bad--is much more than we need; and we should be empowered to
dispose of the excess in ways which will not cause market disruption.

Finally, our already overcrowded national parks and recreation areas
will have twice as many visitors 10 years from now as they do today. If
we do not plan today for the future growth of these and other great
natural assets--not only parks and forests but wildlife and wilderness
preserves, and water projects of all kinds--our children and their
children will be poorer in every sense of the word.

These are not domestic concerns alone. For upon our achievement of
greater vitality and strength here at home hang our fate and future in
the world: our ability to sustain and supply the security of free men
and nations, our ability to command their respect for our leadership,
our ability to expand our trade without threat to our balance of
payments, and our ability to adjust to the changing demands of cold war
competition and challenge.

We shall be judged more by what we do at home than by what we preach
abroad. Nothing we could do to help the developing countries would help
them half as much as a booming U.S. economy. And nothing our opponents
could do to encourage their own ambitions would encourage them half as
much as a chronic, lagging U.S. economy. These domestic tasks do not
divert energy from our security--they provide the very foundation for
freedom's survival and success.

III.

Turning to the world outside, it was only a few years ago--in Southeast
Asia, Africa, Eastern Europe, Latin America, even outer space--that
communism sought to convey the image of a unified, confident, and
expanding empire, closing in on a sluggish America and a free world in
disarray. But few people would hold to that picture today.

In these past months we have reaffirmed the scientific and military
superiority of freedom. We have doubled our efforts in space, to assure
us of being first in the future. We have undertaken the most
far-reaching defense improvements in the peacetime history of this
country. And we have maintained the frontiers of freedom from Viet-Nam
to West Berlin.

But complacency or self-congratulation can imperil our security as much
as the weapons of tyranny. A moment of pause is not a promise of peace.
Dangerous problems remain from Cuba to the South China Sea. The world's
prognosis prescribes, in short, not a year's vacation for us, but a year
of obligation and opportunity.

Four special avenues of opportunity stand out: the Atlantic Alliance,
the developing nations, the new Sino-Soviet difficulties, and the search
for worldwide peace.

IV.

First, how fares the grand alliance? Free Europe is entering into a new
phase of its long and brilliant history. The era of colonial expansion
has passed; the era of national rivalries is fading; and a new era of
interdependence and unity is taking shape. Defying the old prophecies of
Marx, consenting to what no conqueror could ever compel, the free
nations of Europe are moving toward a unity of purpose and power and
policy in every sphere of activity.

For 17 years this movement has had our consistent support, both
political and economic. Far from resenting the new Europe, we regard her
as a welcome partner, not a rival. For the road to world peace and
freedom is still long, and there are burdens which only full partners
can share--in supporting the common defense, in expanding world trade,
in aligning our balance of payments, in aiding the emergent nations, in
concerting political and economic policies, and in welcoming to our
common effort other industrialized nations, notably Japan, whose
remarkable economic and political development of the 1950's permits it
now to play on the world scene a major constructive role.

No doubt differences of opinion will continue to get more attention than
agreements on action, as Europe moves from independence to more formal
interdependence. But these are honest differences among honorable
associates--more real and frequent, in fact, among our Western European
allies than between them and the United States. For the unity of freedom
has never relied on uniformity of opinion. But the basic agreement of
this alliance on fundamental issues continues.

The first task of the alliance remains the common defense. Last month
Prime Minister Macmillan and I laid plans for a new stage in our long
cooperative effort, one which aims to assist in the wider task of
framing a common nuclear defense for the whole alliance.

The Nassau agreement recognizes that the security of the West is
indivisible, and so must be our defense. But it also recognizes that
this is an alliance of proud and sovereign nations, and works best when
we do not forget it. It recognizes further that the nuclear defense of
the West is not a matter for the present nuclear powers alone--that
France will be such a power in the future--and that ways must be found
without increasing the hazards of nuclear diffusion, to increase the
role of our other partners in planning, manning, and directing a truly
multilateral nuclear force within an increasingly intimate NATO
alliance. Finally, the Nassau agreement recognizes that nuclear defense
is not enough, that the agreed NATO levels of conventional strength must
be met, and that the alliance cannot afford to be in a position of
having to answer every threat with nuclear weapons or nothing.

We remain too near the Nassau decisions, and too far from their full
realization, to know their place in history. But I believe that, for the
first time, the door is open for the nuclear defense of the alliance to
become a source of confidence, instead of a cause of contention.

The next most pressing concern of the alliance is our common economic
goals of trade and growth. This Nation continues to be concerned about
its balance-of-payments deficit, which, despite its decline, remains a
stubborn and troublesome problem. We believe, moreover, that closer
economic ties among all free nations are essential to prosperity and
peace. And neither we nor the members of the European Common Market are
so affluent that we can long afford to shelter high cost farms or
factories from the winds of foreign competition, or to restrict the
channels of trade with other nations of the free world. If the Common
Market should move toward protectionism and restrictionism, it would
undermine its own basic principles. This Government means to use the
authority conferred on it last year by the Congress to encourage trade
expansion on both sides of the Atlantic and around the world.

V.

Second, what of the developing and non-aligned nations? They were
shocked by the Soviets' sudden and secret attempt to transform Cuba into
a nuclear striking base--and by Communist China's arrogant invasion of
India. They have been reassured by our prompt assistance to India, by
our support through the United Nations of the Congo's unification, by
our patient search for disarmament, and by the improvement in our
treatment of citizens and visitors whose skins do not happen to be
white. And as the older colonialism recedes, and the neo-colonialism of
the Communist powers stands out more starkly than ever, they realize
more clearly that the issue in the world struggle is not communism
versus capitalism, but coercion versus free choice.

They are beginning to realize that the longing for independence is the
same the world over, whether it is the independence of West Berlin or
Viet-Nam. They are beginning to realize that such independence runs
athwart all Communist ambitions but is in keeping with our own--and that
our approach to their diverse needs is resilient and resourceful, while
the Communists are still relying on ancient doctrines and dogmas.

Nevertheless it is hard for any nation to focus on an external or
subversive threat to its independence when its energies are drained in
daily combat with the forces of poverty and despair. It makes little
sense for us to assail, in speeches and resolutions, the horrors of
communism, to spend $50 billion a year to prevent its military
advance--and then to begrudge spending, largely on American products,
less than one-tenth of that amount to help other nations strengthen
their independence and cure the social chaos in which communism has
always thrived.

I am proud--and I think most Americans are proud--of a mutual defense
and assistance program, evolved with bipartisan support in three
administrations, which has, with all its recognized problems,
contributed to the fact that not a single one of the nearly fifty U.N.
members to gain independence since the Second World War has succumbed to
Communist control.

I am proud of a program that has helped to arm and feed and clothe
millions of people who live on the front lines of freedom.

I am especially proud that this country has put forward for the 60's a
vast cooperative effort to achieve economic growth and social progress
throughout the Americas--the Alliance for Progress.

I do not underestimate the difficulties that we face in this mutual
effort among our close neighbors, but the free states of this
hemisphere, working in close collaboration, have begun to make this
alliance a living reality. Today it is feeding one out of every four
school age children in Latin America an extra food ration from our farm
surplus. It has distributed 1.5 million school books and is building
17,000 classrooms. It has helped resettle tens of thousands of farm
families on land they can call their own. It is stimulating our good
neighbors to more self-help and self-reform--fiscal, social,
institutional, and land reforms. It is bringing new housing and hope,
new health and dignity, to millions who were forgotten. The men and
women of this hemisphere know that the alliance cannot succeed if it is
only another name for United States handouts--that it can succeed only
as the Latin American nations themselves devote their best effort to
fulfilling its goals.

This story is the same in Africa, in the Middle East, and in Asia.
Wherever nations are willing to help themselves, we stand ready to help
them build new bulwarks of freedom. We are not purchasing votes for the
cold war; we have gone to the aid of imperiled nations, neutrals and
allies alike. What we do ask--and all that we ask--is that our help be
used to best advantage, and that their own efforts not be diverted by
needless quarrels with other independent nations.

Despite all its past achievements, the continued progress of the Mutual
Assistance Program requires a persistent discontent with present
performance. We have been reorganizing this program to make it a more
effective, efficient instrument--and that process will continue this
year.

But free world development will still be an uphill struggle. Government
aid can only supplement the role of private investment, trade expansion,
commodity stabilization, and, above all, internal self-improvement. The
processes of growth are gradual--bearing fruit in a decade, not a day.
Our successes will be neither quick nor dramatic. But if these programs
were ever to be ended, our failures in a dozen countries would be sudden
and certain.

Neither money nor technical assistance, however, can be our only weapon
against poverty. In the end, the crucial effort is one of purpose,
requiring the fuel of finance but also a torch of idealism. And nothing
carries the spirit of this American idealism more effectively to the far
corners of the earth than the American Peace Corps.

A year ago, less than 900 Peace Corps volunteers were on the job. A year
from now they will number more than 9,000--men and women, aged 18 to 79,
willing to give 2 years of their lives to helping people in other lands.

There are, in fact, nearly a million Americans serving their country and
the cause of freedom in overseas posts, a record no other people can
match. Surely those of us who stay at home should be glad to help
indirectly; by supporting our aid programs; .by opening our doors to
foreign visitors and diplomats and students; and by proving, day by day,
by deed as well as word, that we are a just and generous people.

VI.

Third, what comfort can we take from the increasing strains and tensions
within the Communist bloc? Here hope must be tempered with caution. For
the Soviet-Chinese disagreement is over means, not ends. A dispute over
how best to bury the free world is no grounds for Western rejoicing.

Nevertheless, while a strain is not a fracture, it is clear that the
forces of diversity are at work inside the Communist camp, despite all
the iron disciplines of regimentation and all the iron dogmatisms of
ideology. Marx is proven wrong once again: for it is the closed
Communist societies, not the free and open societies which carry within
themselves the seeds of internal disintegration.

The disarray of the Communist empire has been heightened by two other
formidable forces. One is the historical force of nationalism--and the
yearning of all men to be free. The other is the gross inefficiency of
their economies. For a closed society is not open to ideas of
progress--and a police state finds that it cannot command the grain to
grow.

New nations asked to choose between two competing systems need only
compare conditions in East and West Germany, Eastern and Western Europe,
North and South Viet-Nam. They need only compare the disillusionment of
Communist Cuba with the promise of the Alliance for Progress. And all
the world knows that no successful system builds a wall to keep its
people in and freedom out--and the wall of shame dividing Berlin is a
symbol of Communist failure.

VII.

Finally, what can we do to move from the present pause toward enduring
peace? Again I would counsel caution. I foresee no spectacular reversal
in Communist methods or goals. But if all these trends and developments
can persuade the Soviet Union to walk the path of peace, then let her
know that all free nations will journey with her. But until that choice
is made, and until the world can develop a reliable system of
international security, the free peoples have no choice but to keep
their arms nearby.

This country, therefore, continues to require the best defense in the
world--a defense which is suited to the sixties. This means,
unfortunately, a rising defense budget--for there is no substitute for
adequate defense, and no "bargain basement" way of achieving it. It
means the expenditure of more than $15 billion this year on nuclear
weapons systems alone, a sum which is about equal to the combined
defense budgets of our European Allies.

But it also means improved air and missile defenses, improved civil
defense, a strengthened anti-guerrilla capacity and, of prime
importance, more powerful and flexible non-nuclear forces. For threats
of massive retaliation may not deter piecemeal aggression--and a line of
destroyers in a quarantine, or a division of well-equipped men on a
border, may be more useful to our real security than the multiplication
of awesome weapons beyond all rational need.

But our commitment to national safety is not a commitment to expand our
military establishment indefinitely. We do not dismiss disarmament as
merely an idle dream. For we believe that, in the end, it is the only
way to assure the security of all without impairing the interests of
any. Nor do we mistake honorable negotiation for appeasement. While we
shall never weary in the defense of freedom, neither shall we ever
abandon the pursuit of peace.

In this quest, the United Nations requires our full and continued
support. Its value in serving the cause of peace has been shown anew in
its role in the West New Guinea settlement, in its use as a forum for
the Cuban crisis, and in its task of unification in the Congo. Today the
United Nations is primarily the protector of the small and the weak, and
a safety valve for the strong. Tomorrow it can form the framework for a
world of law--a world in which no nation dictates the destiny of
another, and in which the vast resources now devoted to destructive
means will serve constructive ends.

In short, let our adversaries choose. If they choose peaceful
competition, they shall have it. If they come to realize that their
ambitions cannot succeed--if they see their "wars of liberation" and
subversion will ultimately fail--if they recognize that there is more
security in accepting inspection than in permitting new nations to
master the black arts of nuclear war--and if they are willing to turn
their energies, as we are, to the great unfinished tasks of our own
peoples--then, surely, the areas of agreement can be very wide indeed: a
clear understanding about Berlin, stability in Southeast Asia, an end to
nuclear testing, new checks on surprise or accidental attack, and,
ultimately, general and complete disarmament.

VIII.

For we seek not the worldwide victory of one nation or system but a
worldwide victory of man. The modern globe is too small, its weapons are
too destructive, and its disorders are too contagious to permit any
other kind of victory.

To achieve this end, the United States will continue to spend a greater
portion of its national production than any other people in the free
world. For 15 years no other free nation has demanded so much of itself.
Through hot wars and cold, through recession and prosperity, through the
ages of the atom and outer space, the American people have never
faltered and their faith has never flagged. If at times our actions seem
to make life difficult for others, it is only because history has made
life difficult for us all.

But difficult days need not be dark. I think these are proud and
memorable days in the cause of peace and freedom. We are proud, for
example, of Major Rudolf Anderson who gave his life over the island of
Cuba. We salute Specialist James Allen Johnson who died on the border of
South Korea. We pay honor to Sergeant Gerald Pendell who was killed in
Viet-Nam. They are among the many who in this century, far from home,
have died for our country. Our task now, and the task of all Americans
is to live up to their commitment.

My friends: I close on a note of hope. We are not lulled by the
momentary calm of the sea or the somewhat clearer skies above. We know
the turbulence that lies below, and the storms that are beyond the
horizon this year. But now the winds of change appear to be blowing more
strongly than ever, in the world of communism as well as our own. For
175 years we have sailed with those winds at our back, and with the
tides of human freedom in our favor. We steer our ship with hope, as
Thomas Jefferson said, "leaving Fear astern."

Today we still welcome those winds of change--and we have every reason
to believe that our tide is running strong. With thanks to Almighty God
for seeing us through a perilous passage, we ask His help anew in
guiding the "Good Ship Union."

***

State of the Union Address
Lyndon B. Johnson
January 8, 1964

Mr. Speaker, Mr. President, Members of the House and Senate, my fellow
Americans:

I will be brief, for our time is necessarily short and our agenda is
already long.

Last year's congressional session was the longest in peacetime history.
With that foundation, let us work together to make this year's session
the best in the Nation's history.

Let this session of Congress be known as the session which did more for
civil rights than the last hundred sessions combined; as the session
which enacted the most far-reaching tax cut of our time; as the session
which declared all-out war on human poverty and unemployment in these
United States; as the session which finally recognized the health needs
of all our older citizens; as the session which reformed our tangled
transportation and transit policies; as the session which achieved the
most effective, efficient foreign aid program ever; and as the session
which helped to build more homes, more schools, more libraries, and more
hospitals than any single session of Congress in the history of our
Republic.

All this and more can and must be done. It can be done by this summer,
and it can be done without any increase in spending. In fact, under the
budget that I shall shortly submit, it can be done with an actual
reduction in Federal expenditures and Federal employment.

We have in 1964 a unique opportunity and obligation--to prove the
success of our system; to disprove those cynics and critics at home and
abroad who question our purpose and our competence.

If we fail, if we fritter and fumble away our opportunity in needless,
senseless quarrels between Democrats and Republicans, or between the
House and the Senate, or between the South and North, or between the
Congress and the administration, then history will rightfully judge us
harshly. But if we succeed, if we can achieve these goals by forging in
this country a greater sense of union, then, and only then, can we take
full satisfaction in the State of the Union. II.

Here in the Congress you can demonstrate effective legislative
leadership by discharging the public business with clarity and dispatch,
voting each important proposal up, or voting it down, but at least
bringing it to a fair and a final vote.

Let us carry forward the plans and programs of John Fitzgerald
Kennedy--not because of our sorrow or sympathy, but because they are
right.

In his memory today, I especially ask all members of my own political
faith, in this election year, to put your country ahead of your party,
and to always debate principles; never debate personalities.

For my part, I pledge a progressive administration which is efficient,
and honest and frugal. The budget to be submitted to the Congress
shortly is in full accord with this pledge.

It will cut our deficit in half--from $10 billion to $4,900 million. It
will be, in proportion to our national output, the smallest budget since
1951.

It will call for a substantial reduction in Federal employment, a feat
accomplished only once before in the last 10 years. While maintaining
the full strength of our combat defenses, it will call for the lowest
number of civilian personnel in the Department of Defense since 1950.

It will call for total expenditures of $97,900 million--compared to
$98,400 million for the current year, a reduction of more than $500
million. It will call for new obligational authority of $103,800
million--a reduction of more than $4 billion below last year's request
of $107,900 million.

But it is not a standstill budget, for America cannot afford to stand
still. Our population is growing. Our economy is more complex. Our
people's needs are expanding.

But by closing down obsolete installations, by curtailing less urgent
programs, by cutting back where cutting back seems to be wise, by
insisting on a dollar's worth for a dollar spent, I am able to recommend
in this reduced budget the most Federal support in history for
education, for health, for retraining the unemployed, and for helping
the economically and the physically handicapped.

This budget, and this year's legislative program, are designed to help
each and every American citizen fulfill his basic hopes--his hopes for a
fair chance to make good; his hopes for fair play from the law; his
hopes for a full-time job on full-time pay; his hopes for a decent home
for his family in a decent community; his hopes for a good school for
his children with good teachers; and his hopes for security when faced
with sickness or unemployment or old age. III.

Unfortunately, many Americans live on the outskirts of hope--some
because of their poverty, and some because of theft color, and all too
many because of both. Our task is to help replace their despair with
opportunity.

This administration today, here and now, declares unconditional war on
poverty in America. I urge this Congress and all Americans to join with
me in that effort.

It will not be a short or easy struggle, no single weapon or strategy
will suffice, but we shall not rest until that war is won. The richest
Nation on earth can afford to win it. We cannot afford to lose it. One
thousand dollars invested in salvaging an unemployable youth today can
return $40,000 or more in his lifetime.

Poverty is a national problem, requiring improved national organization
and support. But this attack, to be effective, must also be organized at
the State and the local level and must be supported and directed by
State and local efforts.

For the war against poverty will not be won here in Washington. It must
be won in the field, in every private home, in every public office, from
the courthouse to the White House.

The program I shall propose will emphasize this cooperative approach to
help that one-fifth of all American families with incomes too small to
even meet their basic needs.

Our chief weapons in a more pinpointed attack will be better schools,
and better health, and better homes, and better training, and better job
opportunities to help more Americans, especially young Americans, escape
from squalor and misery and unemployment rolls where other citizens help
to carry them.

Very often a lack of jobs and money is not the cause of poverty, but the
symptom. The cause may lie deeper in our failure to give our fellow
citizens a fair chance to develop their own capacities, in a lack of
education and training, in a lack of medical care and housing, in a lack
of decent communities in which to live and bring up their children.

But whatever the cause, our joint Federal-local effort must pursue
poverty, pursue it wherever it exists--in city slums and small towns, in
sharecropper shacks or in migrant worker camps, on Indian Reservations,
among whites as well as Negroes, among the young as well as the aged, in
the boom towns and in the depressed areas.

Our aim is not only to relieve the symptom of poverty, but to cure it
and, above all, to prevent it. No single piece of legislation, however,
is going to suffice.

We will launch a special effort in the chronically distressed areas of
Appalachia.

We must expand our small but our successful area redevelopment program.

We must enact youth employment legislation to put jobless, aimless,
hopeless youngsters to work on useful projects.

We must distribute more food to the needy through a broader food stamp
program.

We must create a National Service Corps to help the economically
handicapped of our own country as the Peace Corps now helps those
abroad.

We must modernize our unemployment insurance and establish a high-level
commission on automation. If we have the brain power to invent these
machines, we have the brain power to make certain that they are a boon
and not a bane to humanity.

We must extend the coverage of our minimum wage laws to more than 2
million workers now lacking this basic protection of purchasing power.

We must, by including special school aid funds as part of our education
program, improve the quality of teaching, training, and counseling in
our hardest hit areas.

We must build more libraries in every area and more hospitals and
nursing homes under the Hill-Burton Act, and train more nurses to staff
them.

We must provide hospital insurance for our older citizens financed by
every worker and his employer under Social Security, contributing no
more than $1 a month during the employee's working career to protect him
in his old age in a dignified manner without cost to the Treasury,
against the devastating hardship of prolonged or repeated illness.

We must, as a part of a revised housing and urban renewal program, give
more help to those displaced by slum clearance, provide more housing for
our poor and our elderly, and seek as our ultimate goal in our free
enterprise system a decent home for every American family.

We must help obtain more modern mass transit within our communities as
well as low-cost transportation between them.

Above all, we must release $11 billion of tax reduction into the private
spending stream to create new jobs and new markets in every area of this
land. IV.

These programs are obviously not for the poor or the underprivileged
alone. Every American will benefit by the extension of social security
to cover the hospital costs of their aged parents. Every American
community will benefit from the construction or modernization of
schools, libraries, hospitals, and nursing homes, from the training of
more nurses and from the improvement of urban renewal in public transit.
And every individual American taxpayer and every corporate taxpayer will
benefit from the earliest possible passage of the pending tax bill from
both the new investment it will bring and the new jobs that it will
create.

That tax bill has been thoroughly discussed for a year. Now we need
action. The new budget clearly allows it. Our taxpayers surely deserve
it. Our economy strongly demands it. And every month of delay dilutes
its benefits in 1964 for consumption, for investment, and for
employment.

For until the bill is signed, its investment incentives cannot be deemed
certain, and the withholding rate cannot be reduced--and the most
damaging and devastating thing you can do to any businessman in America
is to keep him in doubt and to keep him guessing on what our tax policy
is. And I say that we should now reduce to 14 percent instead of 15
percent our withholding rate.

I therefore urge the Congress to take final action on this bill by the
first of February, if at all possible. For however proud we may be of
the unprecedented progress of our free enterprise economy over the last
3 years, we should not and we cannot permit it to pause.

In 1963, for the first time in history, we crossed the 70 million job
mark, but we will soon need more than 75 million jobs. In 1963 our gross
national product reached the $600 billion level--$100 billion higher
than when we took office. But it easily could and it should be still $30
billion higher today than it is.

Wages and profits and family income are also at their highest levels in
history--but I would remind you that 4 million workers and 13 percent of
our industrial capacity are still idle today.

We need a tax cut now to keep this country moving. V.

For our goal is not merely to spread the work. Our goal is to create
more jobs. I believe the enactment of a 35-hour week would sharply
increase costs, would invite inflation, would impair our ability to
compete, and merely share instead of creating employment. But I am
equally opposed to the 45- or 50-hour week in those industries where
consistently excessive use of overtime causes increased unemployment.

So, therefore, I recommend legislation authorizing the creation of a
tripartite industry committee to determine on an industry-by-industry
basis as to where a higher penalty rate for overtime would increase job
openings without unduly increasing costs, and authorizing the
establishment of such higher rates. VI.

Let me make one principle of this administration abundantly clear: All
of these increased opportunities--in employment, in education, in
housing, and in every field--must be open to Americans of every color.
As far as the writ of Federal law will run, we must abolish not some,
but all racial discrimination. For this is not merely an economic issue,
or a social, political, or international issue. It is a moral issue, and
it must be met by the passage this session of the bill now pending in
the House.

All members of the public should have equal access to facilities open to
the public. All members of the public should be equally eligible for
Federal benefits that are financed by the public. All members of the
public should have an equal chance to vote for public officials and to
send their children to good public schools and to contribute their
talents to the public good.

Today, Americans of all races stand side by side in Berlin and in Viet
Nam. They died side by side in Korea. Surely they can work and eat and
travel side by side in their own country. VII.

We must also lift by legislation the bars of discrimination against
those who seek entry into our country, particularly those who have much
needed skills and those joining their families.

In establishing preferences, a nation that was built by the immigrants
of all lands can ask those who now seek admission: "What can you do for
our country?" But we should not be asking: "In what country were you
born?" VIII.

For our ultimate goal is a world without war, a world made safe for
diversity, in which all men, goods, and ideas can freely move across
every border and every boundary.

We must advance toward this goal in 1964 in at least 10 different ways,
not as partisans, but as patriots.

First, we must maintain--and our reduced defense budget will
maintain--that margin of military safety and superiority obtained
through 3 years of steadily increasing both the quality and the quantity
of our strategic, our conventional, and our antiguerilla forces. In 1964
we will be better prepared than ever before to defend the cause of
freedom, whether it is threatened by outright aggression or by the
infiltration practiced by those in Hanoi and Havana, who ship arms and
men across international borders to foment insurrection. And we must
continue to use that strength as John Kennedy used it in the Cuban
crisis and for the test ban treaty--to demonstrate both the futility of
nuclear war and the possibilities of lasting peace.

Second, we must take new steps--and we shall make new proposals at
Geneva--toward the control and the eventual abolition of arms. Even in
the absence of agreement, we must not stockpile arms beyond our needs or
seek an excess of military power that could be provocative as well as
wasteful.

It is in this spirit that in this fiscal year we are cutting back our
production of enriched uranium by 25 percent. We are shutting down four
plutonium piles. We are closing many nonessential military
installations. And it is in this spirit that we today call on our
adversaries to do the same.

Third, we must make increased use of our food as an instrument of
peace--making it available by sale or trade or loan or donation--to
hungry people in all nations which tell us of their needs and accept
proper conditions of distribution.

Fourth, we must assure our pre-eminence in the peaceful exploration of
outer space, focusing on an expedition to the moon in this decade--in
cooperation with other powers if possible, alone if necessary.

Fifth, we must expand world trade. Having recognized in the Act of 1962
that we must buy as well as sell, we now expect our trading partners to
recognize that we must sell as well as buy. We are willing to give them
competitive access to our market, asking only that they do the same for
us.

Sixth, we must continue, through such measures as the interest
equalization tax, as well as the cooperation of other nations, our
recent progress toward balancing our international accounts.

This administration must and will preserve the present gold value of the
dollar.

Seventh, we must become better neighbors with the free states of the
Americas, working with the councils of the OAS, with a stronger Alliance
for Progress, and with all the men and women of this hemisphere who
really believe in liberty and justice for all.

Eighth, we must strengthen the ability of free nations everywhere to
develop their independence and raise their standard of living, and
thereby frustrate those who prey on poverty and chaos. To do this, the
rich must help the poor--and we must do our part. We must achieve a more
rigorous administration of our development assistance, with larger roles
for private investors, for other industrialized nations, and for
international agencies and for the recipient nations themselves.

Ninth, we must strengthen our Atlantic and Pacific partnerships,
maintain our alliances and make the United Nations a more effective
instrument for national independence and international order.

Tenth, and finally, we must develop with our allies new means of
bridging the gap between the East and the West, facing danger boldly
wherever danger exists, but being equally bold in our search for new
agreements which can enlarge the hopes of all, while violating the
interests of none.

In short, I would say to the Congress that we must be constantly
prepared for the worst, and constantly acting for the best. We must be
strong enough to win any war, and we must be wise enough to prevent one.

We shall neither act as aggressors nor tolerate acts of aggression. We
intend to bury no one, and we do not intend to be buried.

We can fight, if we must, as we have fought before, but we pray that we
will never have to fight again. IX.

My good friends and my fellow Americans: In these last 7 sorrowful
weeks, we have learned anew that nothing is so enduring as faith, and
nothing is so degrading as hate.

John Kennedy was a victim of hate, but he was also a great builder of
faith--faith in our fellow Americans, whatever their creed or their
color or their station in life; faith in the future of man, whatever his
divisions and differences.

This faith was echoed in all parts of the world. On every continent and
in every land to which Mrs. Johnson and I traveled, we found faith and
hope and love toward this land of America and toward our people.

So I ask you now in the Congress and in the country to join with me in
expressing and fulfilling that faith in working for a nation, a nation
that is free from want and a world that is free from hate--a world of
peace and justice, and freedom and abundance, for our time and for all
time to come.

***

State of the Union Address
Lyndon B. Johnson
January 4, 1965

On this Hill which was my home, I am stirred by old friendships.

Though total agreement between the Executive and the Congress is
impossible, total respect is important.

I am proud to be among my colleagues of the Congress whose legacy to
their trust is their loyalty to their Nation.

I am not unaware of the inner emotions of the new Members of this body
tonight.

Twenty-eight years ago, I felt as you do now. You will soon learn that
you are among men whose first love is their country, men who try each
day to do as best they can what they believe is right.

We are entering the third century of the pursuit of American union.

Two hundred years ago, in 1765, nine assembled colonies first joined
together to demand freedom from arbitrary power.

For the first century we struggled to hold together the first
continental union of democracy in the history of man. One hundred years
ago, in 1865, following a terrible test of blood and fire, the compact
of union was finally sealed.

For a second century we labored to establish a unity of purpose and
interest among the many groups which make up the American community.

That struggle has often brought pain and violence. It is not yet over.
But we have achieved a unity of interest among our people that is
unmatched in the history of freedom.

And so tonight, now, in 1965, we begin a new quest for union. We seek
the unity of man with the world that he has built--with the knowledge
that can save or destroy him--with the cities which can stimulate or
stifle him--with the wealth and the machines which can enrich or menace
his spirit.

We seek to establish a harmony between man and society which will allow
each of us to enlarge the meaning of his life and all of us to elevate
the quality of our civilization. This is the search that we begin
tonight.

STATE OF THE WORLD

But the unity we seek cannot realize its full promise in isolation. For
today the state of the Union depends, in large measure, upon the state
of the world.

Our concern and interest, compassion and vigilance, extend to every
corner of a dwindling planet.

Yet, it is not merely our concern but the concern of all free men. We
will not, and we should not, assume that it is the task of Americans
alone to settle all the conflicts of a torn and troubled world.

Let the foes of freedom take no comfort from this. For in concert with
other nations, we shall help men defend their freedom.

Our first aim remains the safety and the well-being of our own country.

We are prepared to live as good neighbors with all, but we cannot be
indifferent to acts designed to injure our interests, or our citizens,
or our establishments abroad. The community of nations requires mutual
respect. We shall extend it--and we shall expect it.

In our relations with the world we shall follow the example of Andrew
Jackson who said: "I intend to ask for nothing that is not clearly right
and to submit to nothing that is wrong." And he promised, that "the
honor of my country shall never be stained by an apology from me for the
statement of truth or for the performance of duty." That was this
Nation's policy in the 1830's and that is this Nation's policy in the
1960's.

Our own freedom and growth have never been the final goal of the
American dream.

We were never meant to be an oasis of liberty and abundance in a
worldwide desert of disappointed dreams. Our Nation was created to help
strike away the chains of ignorance and misery and tyranny wherever they
keep man less than God means him to be.

We are moving toward that destiny, never more rapidly than we have moved
in the last 4 years.

In this period we have built a military power strong enough to meet any
threat and destroy any adversary. And that superiority will continue to
grow so long as this office is mine--and you sit on Capitol Hill.

In this period no new nation has become Communist, and the unity of the
Communist empire has begun to crumble.

In this period we have resolved in friendship our disputes with our
neighbors of the hemisphere, and joined in an Alliance for Progress
toward economic growth and political democracy.

In this period we have taken more steps toward peace--including the test
ban treaty--than at any time since the cold war began.

In this period we have relentlessly pursued our advances toward the
conquest of space.

Most important of all, in this period, the United States has reemerged
into the fullness of its self-confidence and purpose. No longer are we
called upon to get America moving. We are moving. No longer do we doubt
our strength or resolution. We are strong and we have proven our
resolve.

No longer can anyone wonder whether we are in the grip of historical
decay. We know that history is ours to make. And if there is great
danger, there is now also the excitement of great expectations.

AMERICA AND THE COMMUNIST NATIONS

Yet we still live in a troubled and perilous world. There is no longer a
single threat. There are many. They differ in intensity and in danger.
They require different attitudes and different answers.

With the Soviet Union we seek peaceful understandings that can lessen
the danger to freedom.

Last fall I asked the American people to choose that course. I will
carry forward their command.

If we are to live together in peace, we must come to know each other
better.

I am sure that the American people would welcome a chance to listen to
the Soviet leaders on our television--as I would like the Soviet people
to hear our leaders on theirs.

I hope the new Soviet leaders can visit America so they can learn about
our country at firsthand.

In Eastern Europe restless nations are slowly beginning to assert their
identity. Your Government, assisted by the leaders in American labor and
business, is now exploring ways to increase peaceful trade with these
countries and with the Soviet Union. I will report our conclusions to
the Congress.

In Asia, communism wears a more aggressive face. We see that in
Viet-Nam. Why are we there?

We are there, first, because a friendly nation has asked us for help
against the Communist aggression. Ten years ago our President pledged
our help. Three Presidents have supported that pledge. We will not break
it now.

Second, our own security is tied to the peace of Asia. Twice in one
generation we have had to fight against aggression in the Far East. To
ignore aggression now would only increase the danger of a much larger
war.

Our goal is peace in southeast Asia. That will come only when aggressors
leave their neighbors in peace.

What is at stake is the cause of freedom and in that cause America will
never be found wanting.

THE NON-COMMUNIST WORLD

But communism is not the only source of trouble and unrest. There are
older and deeper sources--in the misery of nations and in man's
irrepressible ambition for liberty and a better life.

With the free Republics of Latin America I have always felt--and my
country has always felt--very special ties of interest and affection. It
will be the purpose of my administration to strengthen these ties.
Together we share and shape the destiny of the new world. In the coming
year I hope to pay a visit to Latin America. And I will steadily enlarge
our commitment to the Alliance for Progress as the instrument of our war
against poverty and injustice in this hemisphere.

In the Atlantic community we continue to pursue our goal of 20 years--a
Europe that is growing in strength, unity, and cooperation with America.
A great unfinished task is the reunification of Germany through
self-determination.

This European policy is not based on any abstract design. It is based on
the realities of common interests and common values, common dangers and
common expectations. These realities will continue to have their
way--especially, I think, in our expanding trade and especially in our
common defense.

Free Americans have shaped the policies of the United States. And
because we know these realities, those policies have been, and will be,
in the interest of Europe.

Free Europeans must shape the course of Europe. And, for the same
reasons, that course has been, and will be, in our interest and in the
interest of freedom.

I found this truth confirmed in my talks with European leaders in the
last year. I hope to repay these visits to some of our friends in Europe
this year.

In Africa and Asia we are witnessing the turbulent unfolding of new
nations and continents.

We welcome them to the society of nations.

We are committed to help those seeking to strengthen their own
independence, and to work most closely with those governments dedicated
to the welfare of all of their people.

We seek not fidelity to an iron faith, but a diversity of belief as
varied as man himself. We seek not to extend the power of America but
the progress of humanity. We seek not to dominate others but to
strengthen the freedom of all people.

I will seek new ways to use our knowledge to help deal with the
explosion in world population and the growing scarcity in world
resources.

Finally, we renew our commitment to the continued growth and the
effectiveness of the United Nations. The frustrations of the United
Nations are a product of the world that we live in, and not of the
institution which gives them voice. It is far better to throw these
differences open to the assembly of nations than to permit them to
fester in silent danger.

These are some of the goals of the American Nation in the world in which
we live.

For ourselves we seek neither praise nor blame, neither gratitude nor
obedience.

We seek peace.

We seek freedom.

We seek to enrich the life of man.

For that is the world in which we will flourish and that is the world
that we mean for all men to ultimately have.

TOWARD THE GREAT SOCIETY

World affairs will continue to call upon our energy and our courage.

But today we can turn increased attention to the character of American
life.

We are in the midst of the greatest upward surge of economic well-being
in the history of any nation.

Our flourishing progress has been marked by price stability that is
unequalled in the world. Our balance of payments deficit has declined
and the soundness of our dollar is unquestioned. I pledge to keep it
that way and I urge business and labor to cooperate to that end.

We worked for two centuries to climb this peak of prosperity. But we are
only at the beginning of the road to the Great Society. Ahead now is a
summit where freedom from the wants of the body can help fulfill the
needs of the spirit.

We built this Nation to serve its people.

We want to grow and build and create, but we want progress to be the
servant and not the master of man.

We do not intend to live in the midst of abundance, isolated from
neighbors and nature, confined by blighted cities and bleak suburbs,
stunted by a poverty of learning and an emptiness of leisure.

The Great Society asks not how much, but how good; not only how to
create wealth but how to use it; not only how fast we are going, but
where we are headed.

It proposes as the first test for a nation: the quality of its people.

This kind of society will not flower spontaneously from swelling riches
and surging power.

It will not be the gift of government or the creation of presidents. It
will require of every American, for many generations, both faith in the
destination and the fortitude to make the journey.

And like freedom itself, it will always be challenge and not
fulfillment. And tonight we accept that challenge.

A NATIONAL AGENDA

I propose that we begin a program in education to ensure every American
child the fullest development of his mind and skills.

I propose that we begin a massive attack on crippling and killing
diseases.

I propose that we launch a national effort to make the American city a
better and a more stimulating place to live.

I propose that we increase the beauty of America and end the poisoning
of our rivers and the air that we breathe.

I propose that we carry out a new program to develop regions of our
country that are now suffering from distress and depression.

I propose that we make new efforts to control and prevent crime and
delinquency.

I propose that we eliminate every remaining obstacle to the right and
the opportunity to vote.

I propose that we honor and support the achievements of thought and the
creations of art.

I propose that we make an all-out campaign against waste and
inefficiency.

THE TASK

Our basic task is threefold:

First, to keep our economy growing;

--to open for all Americans the opportunity that is now enjoyed by most
Americans;

--and to improve the quality of life for all.

In the next 6 weeks I will submit special messages with detailed
proposals for national action in each of these areas.

Tonight I would like just briefly to explain some of my major
recommendations in the three main areas of national need.

1. A GROWING ECONOMY

BASIC POLICIES

First, we must keep our Nation prosperous. We seek full employment
opportunity for every American citizen. I will present a budget designed
to move the economy forward. More money will be left in the hands of the
consumer by a substantial cut in excise taxes. We will continue along
the path toward a balanced budget in a balanced economy.

I confidently predict--what every economic sign tells us tonight--the
continued flourishing of the American economy.

But we must remember that fear of a recession can contribute to the fact
of a recession. The knowledge that our Government will, and can, move
swiftly will strengthen the confidence of investors and business.

Congress can reinforce this confidence by insuring that its procedures
permit rapid action on temporary income tax cuts. And special funds for
job-creating public programs should be made available for immediate use
if recession threatens.

Our continued prosperity demands continued price stability. Business,
labor, and the consumer all have a high stake in keeping wages and
prices within the framework of the guideposts that have already served
the Nation so well.

Finding new markets abroad for our goods depends on the initiative of
American business. But we stand ready--with credit and other help--to
assist the flow of trade which will benefit the entire Nation.

ON THE FARMS

Our economy owes much to the efficiency of our farmers. We must continue
to assure them the opportunity to earn a fair reward. I have instructed
the Secretary of Agriculture to lead a major effort to find new
approaches to reduce the heavy cost of our farm programs and to direct
more of our effort to the small farmer who needs the help the most.

INCREASED PROSPERITY

We can help insure continued prosperity through:

--a regional recovery program to assist the development of stricken
areas left behind by our national progress;

--further efforts to provide our workers with the skills demanded by
modern technology, for the laboring-man is an indispensable force in the
American system;

--the extension of the minimum wage to more than 2 million unprotected
workers;

--the improvement and the modernization of the unemployment compensation
system.

And as pledged in our 1960 and 1964 Democratic platforms, I will propose
to Congress changes in the Taft-Hartley Act including section 14(b). I
will do so hoping to reduce the conflicts that for several years have
divided Americans in various States of our Union.

In a country that spans a continent modern transportation is vital to
continued growth.

TRANSPORTATION FOR GROWTH

I will recommend heavier reliance on competition in transportation and a
new policy for our merchant marine.

I will ask for funds to study high-speed rail transportation between
urban centers. We will begin with test projects between Washington and
Boston. On high-speed trains, passengers could travel this distance in
less than 4 hours.

II. OPPORTUNITY FOR ALL

Second, we must open opportunity to all our people.

Most Americans enjoy a good life. But far too many are still trapped in
poverty and idleness and fear.

Let a just nation throw open to them the city of promise:

--to the elderly, by providing hospital care under social security and
by raising benefit payments to those struggling to maintain the dignity
of their later years;

--to the poor and the unfortunate, through doubling the war against
poverty this year;

--to Negro Americans, through enforcement of the civil rights law and
elimination of barriers to the right to vote;

--to those in other lands that are seeking the promise of America,
through an immigration law based on the work a man can do and not where
he was born or how he spells his name.

III. TO ENRICH THE LIFE OF ALL

Our third goal is to improve the quality of American life.

THROUGH EDUCATION

We begin with learning.

Every child must have the best education that this Nation can provide.

Thomas Jefferson said that no nation can be both ignorant and free.
Today no nation can be both ignorant and great.

In addition to our existing programs, I will recommend a new program for
schools and students with a first year authorization of $1,500 million.

It will help at every stage along the road to learning.

For the preschool years we will help needy children become aware of the
excitement of learning.

For the primary and secondary school years we will aid public schools
serving low-income families and assist students in both public and
private schools.

For the college years we will provide scholarships to high school
students of the greatest promise and the greatest need and we will
guarantee low-interest loans to students continuing their college
studies.

New laboratories and centers will help our schools--help them lift their
standards of excellence and explore new methods of teaching. These
centers will provide special training for those who need and those who
deserve special treatment.

THROUGH BETTER HEALTH

Greatness requires not only an educated people but a healthy people.

Our goal is to match the achievements of our medicine to the afflictions
of our people.

We already carry on a large program in this country for research and
health.

In addition, regional medical centers can provide the most advanced
diagnosis and treatment for heart disease and cancer and stroke and
other major diseases.

New support for medical and dental education will provide the trained
people to apply our knowledge.

Community centers can help the mentally ill and improve health care for
school-age children from poor families, including services for the
mentally retarded.

THROUGH IMPROVING THE WORLD WE LIVE IN

The City

An educated and healthy people require surroundings in harmony with
their hopes. In our urban areas the central problem today is to protect
and restore man's satisfaction in belonging to a community where he can
find security and significance.

The first step is to break old patterns--to begin to think and work and
plan for the development of the entire metropolitan areas. We will take
this step with new programs of help for the basic community facilities
and for neighborhood centers of health and recreation.

New and existing programs will be open to those cities which work
together to develop unified long-range policies for metropolitan areas.

We must also make some very important changes in our housing programs if
we are to pursue these same basic goals.

So a Department of Housing and Urban Development will be needed to
spearhead this effort in our cities.

Every citizen has the right to feel secure in his home and on the
streets of his community.

To help control crime, we will recommend programs:

--to train local law enforcement officers;

--to put the best techniques of modern science at their disposal;

--to discover the causes of crime and better ways to prevent it.

I will soon assemble a panel of outstanding experts of this Nation to
search out answers to the national problem of crime and delinquency, and
I welcome the recommendations and the constructive efforts of the
Congress. The Beauty of America

For over three centuries the beauty of America has sustained our spirit
and has enlarged our vision. We must act now to protect this heritage.
In a fruitful new partnership with the States and the cities the next
decade should be a conservation milestone. We must make a massive effort
to save the countryside and to establish--as a green legacy for
tomorrow--more large and small parks, more seashores and open spaces
than have been created during any other period in our national history.

A new and substantial effort must be made to landscape highways to
provide places of relaxation and recreation wherever our roads run,

Within our cities imaginative programs are needed to landscape streets
and to transform open areas into places of beauty and recreation.

We will seek legal power to prevent pollution of our air and water
before it happens. We will step up our effort to control harmful wastes,
giving first priority to the cleanup of our most contaminated rivers. We
will increase research to learn much more about the control of
pollution.

We hope to make the Potomac a model of beauty here in the Capital, and
preserve unspoiled stretches of some of our waterways with a Wild Rivers
bill.

More ideas for a beautiful America will emerge from a White House
Conference on Natural Beauty which I will soon call.

Art and Science

We must also recognize and encourage those who can be pathfinders for
the Nation's imagination and understanding.

To help promote and honor creative achievements, I will propose a
National Foundation on the Arts.

To develop knowledge which will enrich our lives and ensure our
progress, I will recommend programs to encourage basic science,
particularly in the universities--and to bring closer the day when the
oceans will supply our growing need for fresh water.

For government to serve these goals it must be modern in structure,
efficient in action, and ready for any emergency.

I am busy, currently, reviewing the structure of the entire executive
branch of this Government. I hope to reshape it and to reorganize it to
meet more effectively the tasks of the 20th century.

Wherever waste is found, I will eliminate it.

Last year we saved almost $3,500 million by eliminating waste in the
National Government.

And I intend to do better this year.

And very soon I will report to you on our progress and on new economies
that your Government plans to make.

Even the best of government is subject to the worst of hazards.

I will propose laws to insure the necessary continuity of leadership
should the President become disabled or die.

In addition, I will propose reforms in the electoral college--leaving
undisturbed the vote by States--but making sure that no elector can
substitute his will for that of the people.

Last year, in a sad moment, I came here and I spoke to you after 33
years of public service, practically all of them here on this Hill.

This year I speak after 1 year as President of the United States.

Many of you in this Chamber are among my oldest friends. We have shared
many happy moments and many hours of work, and we have watched many
Presidents together. Yet, only in the White House can you finally know
the full weight of this Office.

The greatest burden is not running the huge operations of government--or
meeting daily troubles, large and small--or even working with the
Congress.

A President's hardest task is not to do what is right, but to know what
is right.

Yet the Presidency brings no special gift of prophecy or foresight. You
take an oath, you step into an office, and you must then help guide a
great democracy.

The answer was waiting for me in the land where I was born.

It was once barren land. The angular hills were covered with scrub cedar
and a few large live oaks. Little would grow in that harsh caliche soil
of my country. And each spring the Pedernales River would flood our
valley.

But men came and they worked and they endured and they built.

And tonight that country is abundant; abundant with fruit and cattle and
goats and sheep, and there are pleasant homes and lakes and the floods
are gone.

Why did men come to that once forbidding land?

Well, they were restless, of course, and they had to be moving on. But
there was more than that. There was a dream--a dream of a place where a
free man could build for himself, and raise his children to a better
life--a dream of a continent to be conquered, a world to be won, a
nation to be made.

Remembering this, I knew the answer.

A President does not shape a new and personal vision of America.

He collects it from the scattered hopes of the American past.

It existed when the first settlers saw the coast of a new world, and
when the first pioneers moved westward.

It has guided us every step of the way.

It sustains every President. But it is also your inheritance and it
belongs equally to all the people that we all serve.

It must be interpreted anew by each generation for its own needs; as I
have tried, in part, to do tonight.

It shall lead us as we enter the third century of the search for a more
perfect union?

This, then, is the state of the Union: Free and restless, growing and
full of hope.

So it was in the beginning.

So it shall always be, while God is willing, and we are strong enough to
keep the faith.

***

State of the Union Address
Lyndon B. Johnson
January 12, 1966

Mr. Speaker, Mr. President, Members of the House and the Senate, my
fellow Americans:

I come before you tonight to report on the State of the Union for the
third time.

I come here to thank you and to add my tribute, once more, to the
Nation's gratitude for this, the 89th Congress. This Congress has
already reserved for itself an honored chapter in the history of
America.

Our Nation tonight is engaged in a brutal and bitter conflict in
Vietnam. Later on I want to discuss that struggle in some detail with
you. It just must be the center of our concerns.

But we will not permit those who fire upon us in Vietnam to win a
victory over the desires and the intentions of all the American people.
This Nation is mighty enough, its society is healthy enough, its people
are strong enough, to pursue our goals in the rest of the world while
still building a Great Society here at home.

And that is what I have come here to ask of you tonight.

I recommend that you provide the resources to carry forward, with full
vigor, the great health and education programs that you enacted into law
last year.

I recommend that we prosecute with vigor and determination our war on
poverty.

I recommend that you give a new and daring direction to our foreign aid
program, designed to make a maximum attack on hunger and disease and
ignorance in those countries that are determined to help themselves, and
to help those nations that are trying to control population growth.

I recommend that you make it possible to expand trade between the United
States and Eastern Europe and the Soviet Union.

I recommend to you a program to rebuild completely, on a scale never
before attempted, entire central and slum areas of several of our cities
in America.

I recommend that you attack the wasteful and degrading poisoning of our
rivers, and, as the cornerstone of this effort, clean completely entire
large river basins.

I recommend that you meet the growing menace of crime in the streets by
building up law enforcement and by revitalizing the entire Federal
system from prevention to probation.

I recommend that you take additional steps to insure equal justice to
all of our people by effectively enforcing nondiscrimination in Federal
and State jury selection, by making it a serious Federal crime to
obstruct public and private efforts to secure civil rights, and by
outlawing discrimination in the sale and rental of housing.

I recommend that you help me modernize and streamline the Federal
Government by creating a new Cabinet level Department of Transportation
and reorganizing several existing agencies. In turn, I will restructure
our civil service in the top grades so that men and women can easily be
assigned to jobs where they are most needed, and ability will be both
required as well as rewarded.

I will ask you to make it possible for Members of the House of
Representatives to work more effectively in the service of the Nation
through a constitutional amendment extending the term of a Congressman
to 4 years, concurrent with that of the President. II.

Because of Vietnam we cannot do all that we should, or all that we would
like to do. We will ruthlessly attack waste and inefficiency. We will
make sure that every dollar is spent with the thrift and with the
commonsense which recognizes how hard the taxpayer worked in order to
earn it.

We will continue to meet the needs of our people by continuing to
develop the Great Society.

Last year alone the wealth that we produced increased $47 billion, and
it will soar again this year to a total over $720 billion.

Because our economic policies have produced rising revenues, if you
approve every program that I recommend tonight, our total budget deficit
will be one of the lowest in many years. It will be only $1.8 billion
next year. Total spending in the administrative budget will be $112.8
billion. Revenues next year will be $111 billion.

On a cash basis--which is the way that you and I keep our family
budget--the Federal budget next year will actually show a surplus. That
is to say, if we include all the money that your Government will take in
and all the money that your Government will spend, your Government next
year will collect one-half billion dollars more than it will spend in
the year 1967.

I have not come here tonight to ask for pleasant luxuries or for idle
pleasures. I have come here to recommend that you, the representatives
of the richest Nation on earth, you, the elected servants of a people
who live in abundance unmatched on this globe, you bring the most urgent
decencies of life to all of your fellow Americans.

There are men who cry out: We must sacrifice. Well, let us rather ask
them: Who will they sacrifice? Are they going to sacrifice the children
who seek the learning, or the sick who need medical care, or the
families who dwell in squalor now brightened by the hope of home? Will
they sacrifice opportunity for the distressed, the beauty of our land,
the hope of our poor?

Time may require further sacrifices. And if it does, then we will make
them.

But we will not heed those who wring it from the hopes of the
unfortunate here in a land of plenty.

I believe that we can continue the Great Society while we fight in
Vietnam. But if there are some who do not believe this, then, in the
name of justice, let them call for the contribution of those who live in
the fullness of our blessing, rather than try to strip it from the hands
of those that are most in need.

And let no one think that the unfortunate and the oppressed of this land
sit stifled and alone in their hope tonight. Hundreds of their servants
and their protectors sit before me tonight here in this great Chamber.
III.

The Great Society leads us along three roads--growth and justice and
liberation.

I can report to you tonight what you have seen for yourselves
already--in every city and countryside. This Nation is flourishing.

Workers are making more money than ever--with after-tax income in the
past 5 years up 33 percent; in the last year alone, up 8 percent.

More people are working than ever before in our history--an increase
last year of 2 1/2 million jobs.

Corporations have greater after-tax earnings than ever in history. For
the past 5 years those earnings have been up over 65 percent, and last
year alone they had a rise of 20 percent.

Average farm income is higher than ever. Over the past 5 years it is up
40 percent, and over the past year it is up 22 percent alone.

I was informed this afternoon by the distinguished Secretary of the
Treasury that his preliminary estimates indicate that our balance of
payments deficit has been reduced from $2.8 billion in 1964 to $1.3
billion, or less, in 1965. This achievement has been made possible by
the patriotic voluntary cooperation of businessmen and bankers working
with your Government.

We must now work together with increased urgency to wipe out this
balance of payments deficit altogether in the next year.

And as our economy surges toward new heights we must increase our
vigilance against the inflation which raises the cost of living and
which lowers the savings of every family in this land. It is essential,
to prevent inflation, that we ask both labor and business to exercise
price and wage restraint, and I do so again tonight.

I believe it desirable, because of increased military expenditures, that
you temporarily restore the automobile and certain telephone excise tax
reductions made effective only 12 days ago. Without raising taxes--or
even increasing the total tax bill paid--we should move to improve our
withholding system so that Americans can more realistically pay as they
go, speed up the collection of corporate taxes, and make other necessary
simplifications of the tax structure at an early date.

I hope these measures will be adequate. But if the necessities of
Vietnam require it, I will not hesitate to return to the Congress for
additional appropriations, or additional revenues if they are needed.

I propose legislation to establish unavoidable requirements for
nondiscriminatory jury selection in Federal and State courts--and to
give the Attorney General the power necessary to enforce those
requirements.

I propose legislation to strengthen authority of Federal courts to try
those who murder, attack, or intimidate either civil rights workers or
others exercising their constitutional rights--and to increase penalties
to a level equal to the nature of the crime.

Legislation, resting on the fullest constitutional authority of the
Federal Government, to prohibit racial discrimination in the sale or
rental of housing.

For that other nation within a Nation--the poor--whose distress has now
captured the conscience of America, I will ask the Congress not only to
continue, but to speed up the war on poverty. And in so doing, we will
provide the added energy of achievement with the increased efficiency of
experience.

To improve the life of our rural Americans and our farm population, we
will plan for the future through the establishment of several new
Community Development Districts, improved education through the use of
Teacher Corps teams, better health measures, physical examinations, and
adequate and available medical resources.

For those who labor, I propose to improve unemployment insurance, to
expand minimum wage benefits, and by the repeal of section 14(b) of the
Taft-Hartley Act to make the labor laws in all our States equal to the
laws of the 31 States which do not have tonight right-to-work measures.

And I also intend to ask the Congress to consider measures which,
without improperly invading State and local authority, will enable us
effectively to deal with strikes which threaten irreparable damage to
the national interest.

Yet, slowly, painfully, on the edge of victory, has come the knowledge
that shared prosperity is not enough. In the midst of abundance modern
man walks oppressed by forces which menace and confine the quality of
his life, and which individual abundance alone will not overcome.

We can subdue and we can master these forces--bring increased meaning to
our lives--if all of us, Government and citizens, are bold enough to
change old ways, daring enough to assault new dangers, and if the dream
is dear enough to call forth the limitless capacities of this great
people.

This year we must continue to improve the quality of American life.

Let us fulfill and improve the great health and education programs of
last year, extending special opportunities to those who risk their lives
in our Armed Forces.

I urge the House of Representatives to complete action on three programs
already passed by the Senate--the Teacher Corps, rent assistance, and
home rule for the District of Columbia.

In some of our urban areas we must help rebuild entire sections and
neighborhoods containing, in some cases, as many as 100,000 people.
Working together, private enterprise and government must press forward
with the task of providing homes and shops, parks and hospitals, and all
the other necessary parts of a flourishing community where our people
can come to live the good life.

I will offer other proposals to stimulate and to reward planning for the
growth of entire metropolitan areas.

Of all the reckless devastations of our national heritage, none is
really more shameful than the continued poisoning of our rivers and our
air.

We must undertake a cooperative effort to end pollution in several river
basins, making additional funds available to help draw the plans and
construct the plants that are necessary to make the waters of our entire
river systems clean, and make them a source of pleasure and beauty for
all of our people.

To attack and to overcome growing crime and lawlessness, I think we must
have a stepped-up program to help modernize and strengthen our local
police forces.

Our people have a right to feel secure in their homes and on their
streets--and that right just must be secured.

Nor can we fail to arrest the destruction of life and property on our
highways.

I will propose a Highway Safety Act of 1966 to seek an end to this
mounting tragedy.

We must also act to prevent the deception of the American
consumer--requiring all packages to state clearly and truthfully their
contents--all interest and credit charges to be fully revealed--and
keeping harmful drugs and cosmetics away from our stores.

It is the genius of our Constitution that under its shelter of enduring
institutions and rooted principles there is ample room for the rich
fertility of American political invention. We must change to master
change.

I propose to take steps to modernize and streamline the executive
branch, to modernize the relations between city and State and Nation.

A new Department of Transportation is needed to bring together our
transportation activities. The present structure--35 Government
agencies, spending $5 billion yearly--makes it almost impossible to
serve either the growing demands of this great Nation or the needs of
the industry, or the right of the taxpayer to full efficiency and real
frugality.

I will propose in addition a program to construct and to flight-test a
new supersonic transport airplane that will fly three times the speed of
sound--in excess of 2,000 miles per hour.

I propose to examine our Federal system--the relation between city,
State, Nation, and the citizens themselves. We need a commission of the
most distinguished scholars and men of public affairs to do this job. I
will ask them to move on to develop a creative federalism to best use
the wonderful diversity of our institutions and our people to solve the
problems and to fulfill the dreams of the American people.

As the process of election becomes more complex and more costly, we must
make it possible for those without personal wealth to enter public life
without being obligated to a few large contributors.

Therefore, I will submit legislation to revise the present unrealistic
restriction on contributions--to prohibit the endless proliferation of
committees, bringing local and State committees under the act--to attach
strong teeth and severe penalties to the requirement of full disclosure
of contributions--and to broaden the participation of the people,
through added tax incentives, to stimulate small contributions to the
party and to the candidate of their choice.

To strengthen the work of Congress I strongly urge an amendment to
provide a 4-year term for Members of the House of Representatives--which
should not begin before 1972.

The present 2-year term requires most Members of Congress to divert
enormous energies to an almost constant process of
campaigning--depriving this Nation of the fullest measure of both their
skill and their wisdom. Today, too, the work of government is far more
complex than in our early years, requiring more time to learn and more
time to master the technical tasks of legislating. And a longer term
will serve to attract more men of the highest quality to political life.
The Nation, the principle of democracy, and, I think, each congressional
district, will all be better served by a 4-year term for Members of the
House. And I urge your swift action. IV.

Tonight the cup of peril is full in Vietnam. That conflict is not an
isolated episode, but another great event in the policy that we have
followed with strong consistency since World War II.

The touchstone of that policy is the interest of the United States--the
welfare and the freedom of the people of the United States. But nations
sink when they see that interest only through a narrow glass.

In a world that has grown small and dangerous, pursuit of narrow aims
could bring decay and even disaster.

An America that is mighty beyond description--yet living in a hostile or
despairing world--would be neither safe nor free to build a civilization
to liberate the spirit of man.

In this pursuit we helped rebuild Western Europe. We gave our aid to
Greece and Turkey, and we defended the freedom of Berlin.

In this pursuit we have helped new nations toward independence. We have
extended the helping hand of the Peace Corps and carried forward the
largest program of economic assistance in the world.

And in this pursuit we work to build a hemisphere of democracy and of
social justice.

In this pursuit we have defended against Communist aggression--in Korea
under President Truman--in the Formosa Straits under President
Eisenhower--in Cuba under President Kennedy--and again in Vietnam.

Tonight Vietnam must hold the center of our attention, but across the
world problems and opportunities crowd in on the American Nation. I will
discuss them fully in the months to come, and I will follow the five
continuing lines of policy that America has followed under its last four
Presidents.

While special Vietnam expenditures for the next fiscal year are
estimated to increase by $5.8 billion, I can tell you that all the other
expenditures put together in the entire Federal budget will rise this
coming year by only $.6 billion. This is true because of the stringent
cost-conscious economy program inaugurated in the Defense Department,
and followed by the other departments of Government.

We will vigorously pursue existing proposals--and seek new ones--to
control arms and to stop the spread of nuclear weapons.

By strengthening the common defense, by stimulating world commerce, by
meeting new hopes, these associations serve the cause of a flourishing
world.

We will take new steps this year to help strengthen the Alliance for
Progress, the unity of Europe, the community of the Atlantic, the
regional organizations of developing continents, and that supreme
association--the United Nations.

We will work to strengthen economic cooperation, to reduce barriers to
trade, and to improve international finance.

From the Marshall plan to this very moment tonight, that policy has
rested on the claims of compassion, and the certain knowledge that only
a people advancing in expectation will build secure and peaceful lands.

This year I propose major new directions in our program of foreign
assistance to help those countries who will help themselves.

We will conduct a worldwide attack on the problems of hunger and disease
and ignorance.

We will place the matchless skill and the resources of our own great
America, in farming and in fertilizers, at the service of those
countries committed to develop a modern agriculture.

We will aid those who educate the young in other lands, and we will give
children in other continents the same head start that we are trying to
give our own children. To advance these ends I will propose the
International Education Act of 1966.

I will also propose the International Health Act of 1966 to strike at
disease by a new effort to bring modern skills and knowledge to the
uncared-for, those suffering in the world, and by trying to wipe out
smallpox and malaria and control yellow fever over most of the world
during this next decade; to help countries trying to control population
growth, by increasing our research--and we will earmark funds to help
their efforts.

In the next year, from our foreign aid sources, we propose to dedicate
$1 billion to these efforts, and we call on all who have the means to
join us in this work in the world.

For a peaceful world order will be possible only when each country walks
the way that it has chosen to walk for itself.

We follow this principle by encouraging the end of colonial rule.

We follow this principle, abroad as well as at home, by continued
hostility to the rule of the many by the few--or the oppression of one
race by another.

We follow this principle by building bridges to Eastern Europe. And I
will ask the Congress for authority to remove the special tariff
restrictions which are a barrier to increasing trade between the East
and the West.

The insistent urge toward national independence is the strongest force
of today's world in which we live.

In Africa and Asia and Latin America it is shattering the designs of
those who would subdue others to their ideas or their will.

It is eroding the unity of what was once a Stalinist empire.

In recent months a number of nations have east out those who would
subject them to the ambitions of mainland China.

History is on the side of freedom and is on the side of societies shaped
from the genius of each people. History does not favor a single system
or belief--unless force is used to make it so.

That is why it has been necessary for us to defend this basic principle
of our policy, to defend it in Berlin, in Korea, in Cuba--and tonight in
Vietnam.

For tonight, as so many nights before, young Americans struggle and
young Americans die in a distant land.

Tonight, as so many nights before, the American Nation is asked to
sacrifice the blood of its children and the fruits of its labor for the
love of its freedom.

How many times--in my lifetime and in yours--have the American people
gathered, as they do now, to hear their President tell them of conflict
and tell them of danger?

Each time they have answered. They have answered with all the effort
that the security and the freedom of this Nation required.

And they do again tonight in Vietnam. Not too many years ago Vietnam was
a peaceful, if troubled, land. In the North was an independent Communist
government. In the South a people struggled to build a nation, with the
friendly help of the United States.

There were some in South Vietnam who wished to force Communist rule on
their own people. But their progress was slight. Their hope of success
was dim. Then, little more than 6 years ago, North Vietnam decided on
conquest. And from that day to this, soldiers and supplies have moved
from North to South in a swelling stream that is swallowing the remnants
of revolution in aggression.

As the assault mounted, our choice gradually became clear. We could
leave, abandoning South Vietnam to its attackers and to certain
conquest, or we could stay and fight beside the people of South Vietnam.
We stayed.

And we will stay until aggression has stopped.

We will stay because a just nation cannot leave to the cruelties of its
enemies a people who have staked their lives and independence on
America's solemn pledge--a pledge which has grown through the
commitments of three American Presidents.

We will stay because in Asia and around the world are countries whose
independence rests, in large measure, on confidence in America's word
and in America's protection. To yield to force in Vietnam would weaken
that confidence, would undermine the independence of many lands, and
would whet the appetite of aggression. We would have to fight in one
land, and then we would have to fight in another--or abandon much of
Asia to the domination of Communists.

And we do not intend to abandon Asia to conquest.

Last year the nature of the war in Vietnam changed again. Swiftly
increasing numbers of armed men from the North crossed the borders to
join forces that were already in the South. Attack and terror increased,
spurred and encouraged by the belief that the United States lacked the
will to continue and that their victory was near.

Despite our desire to limit conflict, it was necessary to act: to hold
back the mounting aggression, to give courage to the people of the
South, and to make our firmness clear to the North. Thus. we began
limited air action against military targets in North Vietnam. We
increased our fighting force to its present strength tonight of 190,000
men.

These moves have not ended the aggression but they have prevented its
success. The aims of the enemy have been put out of reach by the skill
and the bravery of Americans and their allies--and by the enduring
courage of the South Vietnamese who, I can tell you, have lost eight men
last year for every one of ours.

The enemy is no longer close to victory. Time is no longer on his side.
There is no cause to doubt the American commitment.

Our decision to stand firm has been matched by our desire for peace.

In 1965 alone we had 300 private talks for peace in Vietnam, with
friends and adversaries throughout the world.

Since Christmas your Government has labored again, with imagination and
endurance, to remove any barrier to peaceful settlement. For 20 days now
we and our Vietnamese allies have dropped no bombs in North Vietnam.

Able and experienced spokesmen have visited, in behalf of America, more
than 40 countries. We have talked to more than a hundred governments,
all 113 that we have relations with, and some that we don't. We have
talked to the United Nations and we have called upon all of its members
to make any contribution that they can toward helping obtain peace.

In public statements and in private communications, to adversaries and
to friends, in Rome and Warsaw, in Paris and Tokyo, in Africa and
throughout this hemisphere, America has made her position abundantly
clear.

We seek neither territory nor bases, economic domination or military
alliance in Vietnam. We fight for the principle of
self-determination--that the people of South Vietnam should be able to
choose their own course, choose it in free elections without violence,
without terror, and without fear.

The people of all Vietnam should make a free decision on the great
question of reunification.

This is all we want for South Vietnam. It is all the people of South
Vietnam want. And if there is a single nation on this earth that desires
less than this for its own people, then let its voice be heard.

We have also made it clear--from Hanoi to New York--that there are no
arbitrary limits to our search for peace. We stand by the Geneva
Agreements of 1954 and 1962. We will meet at any conference table, we
will discuss any proposals--four points or fourteen or forty--and we
will consider the views of any group. We will work for a cease-fire now
or once discussions have begun. We will respond if others reduce their
use of force, and we will withdraw our soldiers once South Vietnam is
securely guaranteed the right to shape its own future.

We have said all this, and we have asked--and hoped--and we have waited
for a response.

So far we have received no response to prove either success or failure.

We have carried our quest for peace to many nations and peoples because
we share this planet with others whose future, in large measure, is tied
to our own action, and whose counsel is necessary to our own hopes.

We have found understanding and support. And we know they wait with us
tonight for some response that could lead to peace.

I wish tonight that I could give you a blueprint for the course of this
conflict over the coming months, but we just cannot know what the future
may require. We may have to face long, hard combat or a long, hard
conference, or even both at once.

Until peace comes, or if it does not come, our course is clear. We will
act as we must to help protect the independence of the valiant people of
South Vietnam. We will strive to limit the conflict, for we wish neither
increased destruction nor do we want to invite increased danger.

But we will give our fighting men what they must have: every gun, and
every dollar, and every decision--whatever the cost or whatever the
challenge.

And we will continue to help the people of South Vietnam care for those
that are ravaged by battle, create progress in the villages, and carry
forward the healing hopes of peace as best they can amidst the uncertain
terrors of war.

And let me be absolutely clear: The days may become months, and the
months may become years, but we will stay as long as aggression commands
us to battle.

There may be some who do not want peace, whose ambitions stretch so far
that war in Vietnam is but a welcome and convenient episode in an
immense design to subdue history to their will. But for others it must
now be clear--the choice is not between peace and victory, it lies
between peace and the ravages of a conflict from which they can only
lose.

The people of Vietnam, North and South, seek the same things: the shared
needs of man, the needs for food and shelter and education--the chance
to build and work and till the soil, free from the arbitrary horrors of
battle--the desire to walk in the dignity of those who master their own
destiny. For many painful years, in war and revolution and infrequent
peace, they have struggled to fulfill those needs.

It is a crime against mankind that so much courage, and so much will,
and so many dreams, must be flung on the fires of war and death.

To all of those caught up in this conflict we therefore say again
tonight: Let us choose peace, and with it the wondrous works of peace,
and beyond that, the time when hope reaches toward consummation, and
life is the servant of life.

In this work, we plan to discharge our duty to the people whom we serve.
V.

This is the State of the Union.

But over it all--wealth, and promise, and expectation--lies our
troubling awareness of American men at war tonight.

How many men who listen to me tonight have served their Nation in other
wars? How very many are not here to listen?

The war in Vietnam is not like these other wars. Yet, finally, war is
always the same. It is young men dying in the fullness of their promise.
It is trying to kill a man that you do not even know well enough to
hate.

Therefore, to know war is to know that there is still madness in this
world.

Many of you share the burden of this knowledge tonight with me. But
there is a difference. For finally I must be the one to order our guns
to fire, against all the most inward pulls of my desire. For we have
children to teach, and we have sick to be cured, and we have men to be
freed. There are poor to be lifted up, and there are cities to be built,
and there is a world to be helped.

Yet we do what we must.

I am hopeful, and I will try as best I can, with everything I have got,
to end this battle and to return our sons to their desires.

Yet as long as others will challenge America's security and test the
clearness of our beliefs with fire and steel, then we must stand or see
the promise of two centuries tremble. I believe tonight that you do not
want me to try that risk. And from that belief your President summons
his strength for the trials that lie ahead in the days to come.

The work must be our work now. Scarred by the weaknesses of man, with
whatever guidance God may offer us, we must nevertheless and alone with
our mortality, strive to ennoble the life of man on earth.

Thank you, and goodnight.

***

State of the Union Address
Lyndon B. Johnson
January 10, 1967

Mr. Speaker, Mr. Vice President, distinguished Members of the Congress:

I share with all of you the grief that you feel at the death today of
one of the most beloved, respected, and effective Members of this body,
the distinguished Representative from Rhode Island, Mr. Fogarty.

I have come here tonight to report to you that this is a time of testing
for our Nation.

At home, the question is whether we will continue working for better
opportunities for all Americans, when most Americans are already living
better than any people in history.

Abroad, the question is whether we have the staying power to fight a
very costly war, when the objective is limited and the danger to us is
seemingly remote.

So our test is not whether we shrink from our country's cause when the
dangers to us are obvious and dose at hand, but, rather, whether we
carry on when they seem obscure and distant--and some think that it is
safe to lay down our burdens.

I have come tonight to ask this Congress and this Nation to resolve that
issue: to meet our commitments at home and abroad--to continue to build
a better America--and to reaffirm this Nation's allegiance to freedom.

As President Abraham Lincoln said, "We must ask where we are, and
whither we are tending." I.

The last 3 years bear witness to our determination to make this a better
country.

We have struck down legal barriers to equality.

We have improved the education of 7 million deprived children and this
year alone we have enabled almost 1 million students to go to college.

We have brought medical care to older people who were unable to afford
it. Three and one-half million Americans have already received treatment
under Medicare since July.

We have built a strong economy that has put almost 3 million more
Americans on the payrolls in the last year alone.

We have included more than 9 million new workers under a higher minimum
wage.

We have launched new training programs to provide job skills for almost
1 million Americans.

We have helped more than a thousand local communities to attack poverty
in the neighborhoods of the poor. We have set out to rebuild our cities
on a scale that has never been attempted before. We have begun to rescue
our waters from the menace of pollution and to restore the beauty of our
land and our countryside, our cities and our towns.

We have given 1 million young Americans a chance to earn through the
Neighborhood Youth Corps--or through Head Start, a chance to learn.

So together we have tried to meet the needs of our people. And, we have
succeeded in creating a better life for the many as well as the few. Now
we must answer whether our gains shall be the foundations of further
progress, or whether they shall be only monuments to what might have
been--abandoned now by a people who lacked the will to see their great
work through.

I believe that our people do not want to quit--though the task is great,
the work hard, often frustrating, and success is a matter not of days or
months, but of years--and sometimes it may be even decades. II.

I have come here tonight to discuss with you five ways of carrying
forward the progress of these last 3 years. These five ways concern
programs, partnerships, priorities, prosperity, and peace.

First, programs. We must see to it, I think, that these new programs
that we have passed work effectively and are administered in the best
possible way.

Three years ago we set out to create these new instruments of social
progress. This required trial and error--and it has produced both. But
as we learn, through success and failure, we are changing our strategy
and we are trying to improve our tactics. In the long run, these
starts--some rewarding, others inadequate and disappointing--are crucial
to SUCCESS.

One example is the struggle to make life better for the less fortunate
among us.

On a similar occasion, at this rostrum in 1949, I heard a great American
President, Harry S. Truman, declare this: "The American people have
decided that poverty is just as wasteful and just as unnecessary as
preventable disease."

Many listened to President Truman that day here in this Chamber, but few
understood what was required and did anything about it. The executive
branch and the Congress waited 15 long years before ever taking any
action on that challenge, as it did on many other challenges that great
President presented. And when, 3 years ago, you here in the Congress
joined with me in a declaration of war on poverty, then I warned, "It
will not be a short or easy struggle--no single weapon... will
suffice--but we shall not rest until that war is won."

And I have come here to renew that pledge tonight.

I recommend that we intensify our efforts to give the poor a chance to
enjoy and to join in this Nation's progress.

I shall propose certain administrative changes suggested by the
Congress--as well as some that we have learned from our own trial and
error.

I shall urge special methods and special funds to reach the hundreds of
thousands of Americans that are now trapped in the ghettos of our big
cities and, through Head Start, to try to reach out to our very young,
little children. The chance to learn is their brightest hope and must
command our full determination. For learning brings skills; and skills
bring jobs; and jobs bring responsibility and dignity, as well as taxes.

This war--like the war in Vietnam--is not a simple one. There is no
single battle-line which you can plot each day on a chart. The enemy is
not easy to perceive, or to isolate, or to destroy. There are mistakes
and there are setbacks. But we are moving, and our direction is forward.

This is true with other programs that are making and breaking new
ground. Some do not yet have the capacity to absorb well or wisely all
the money that could be put into them. Administrative skills and trained
manpower are just as vital to their success as dollars. And I believe
those skills will come. But it will take time and patience and hard
work. Success cannot be forced at a single stroke. So we must continue
to strengthen the administration of every program if that success is to
come--as we know it must.

We have done much in the space of 2 short years, working together.

I have recommended, and you, the Congress, have approved, 10 different
reorganization plans, combining and consolidating many bureaus of this
Government, and creating two entirely new Cabinet departments.

I have come tonight to propose that we establish a new department--a
Department of Business and Labor.

By combining the Department of Commerce with the Department of Labor and
other related agencies, I think we can create a more economical,
efficient, and streamlined instrument that will better serve a growing
nation.

This is our goal throughout the entire Federal Government. Every program
will be thoroughly evaluated. Grant-in-aid programs will be improved and
simplified as desired by many of our local administrators and our
Governors.

Where there have been mistakes, we will try very hard to correct them.

Where there has been progress, we will try to build upon it.

Our second objective is partnership--to create an effective partnership
at all levels of government. And I should treasure nothing more than to
have that partnership begin between the executive and the Congress.

The 88th and the 89th Congresses passed more social and economic
legislation than any two single Congresses in American history. Most of
you who were Members of those Congresses voted to pass most of those
measures. But your efforts will come to nothing unless it reaches the
people.

Federal energy is essential. But it is not enough. Only a total working
partnership among Federal, State, and local governments can succeed. The
test of that partnership will be the concern of each public
organization, each private institution, and each responsible citizen.

Each State, county, and city needs to examine its capacity for
government in today's world, as we are examining ours in the executive
department, and as I see you are examining yours. Some will need to
reorganize and reshape their methods of administration--as we are doing.
Others will need to revise their constitutions and their laws to bring
them up to date--as we are doing. Above all, I think we must work
together and find ways in which the multitudes of small jurisdictions
can be brought together more efficiently.

During the past 3 years we have returned to State and local governments
about $40 billion in grants-in-aid. This year alone, 70 percent of our
Federal expenditures for domestic programs will be distributed through
the State and local governments. With Federal assistance, State and
local governments by 1970 will be spending close to $110 billion
annually. These enormous sums must be used wisely, honestly, and
effectively. We intend to work closely with the States and the
localities to do exactly that.

Our third objective is priorities, to move ahead on the priorities that
we have established within the resources that are available.

I wish, of course, that we could do all that should be done--and that we
could do it now. But the Nation has many commitments and
responsibilities which make heavy demands upon our total resources. No
administration would more eagerly utilize for these programs all the
resources they require than the administration that started them.

So let us resolve, now, to do all that we can, with what we
have--knowing that it is far, far more than we have ever done before,
and far, far less than our problems will ultimately require.

Let us create new opportunities for our children and our young Americans
who need special help.

We should strengthen the Head Start program, begin it for children 3
years old, and maintain its educational momentum by following through in
the early years.

We should try new methods of child development and care from the
earliest years, before it is too late to correct.

And I will propose these measures to the 90th Congress.

Let us insure that older Americans, and neglected Americans, share in
their Nation's progress.

We should raise social security payments by an overall average of 20
percent. That will add $4 billion 100 million to social security
payments in the first year. I will recommend that each of the 23 million
Americans now receiving payments get an increase of at least 15 percent.

I will ask that you raise the minimum payments by 59 percent--from $44
to $70 a month, and to guarantee a minimum benefit of $100 a month for
those with a total of 25 years of coverage. We must raise the limits
that retired workers can earn without losing social security income.

We must eliminate by law unjust discrimination in employment because of
age.

We should embark upon a major effort to provide self-help assistance to
the forgotten in our midst--the American Indians and the migratory farm
workers. And we should reach with the hand of understanding to help
those who live in rural poverty.

And I will propose these measures to the 90th Congress.

So let us keep on improving the quality of life and enlarging the
meaning of justice for all of our fellow Americans.

We should transform our decaying slums into places of decency through
the landmark Model Cities program. I intend to seek for this effort,
this year, the full amount that you in Congress authorized last year.

We should call upon the genius of private industry and the most advanced
technology to help rebuild our great cities.

We should vastly expand the fight for dean air with a total attack on
pollution at its sources, and--because air, like water, does not respect
manmade boundaries--we should set up "regional airsheds" throughout this
great land.

We should continue to carry to every corner of the Nation our campaign
for a beautiful America--to dean up our towns, to make them more
beautiful, our cities, our countryside, by creating more parks, and more
seashores, and more open spaces for our children to play in, and for the
generations that come after us to enjoy.

We should continue to seek equality and justice for each citizen--before
a jury, in seeking a job, in exercising his civil rights. We should find
a solution to fair housing, so that every American, regardless of color,
has a decent home of his choice.

We should modernize our Selective Service System. The National
Commission on Selective Service will shortly submit its report. I will
send you new recommendations to meet our military manpower needs. But
let us resolve that this is to be the Congress that made our draft laws
as fair and as effective as possible.

We should protect what Justice Brandeis called the "right most valued by
civilized men"--the right to privacy. We should outlaw all
wiretapping--public and private--wherever and whenever it occurs, except
when the security of this Nation itself is at stake--and only then with
the strictest governmental safeguards. And we should exercise the full
reach of our constitutional powers to outlaw electronic "bugging" and
"snooping."

I hope this Congress will try to help me do more for the consumer. We
should demand that the cost of credit be clearly and honestly expressed
where average citizens can understand it. We should immediately take
steps to prevent massive power failures, to safeguard the home against
hazardous household products, and to assure safety in the pipelines that
carry natural gas across our Nation.

We should extend Medicare benefits that are now denied to 1,300,000
permanently and totally disabled Americans under 65 years of age.

We should improve the process of democracy by passing our election
reform and financing proposals, by tightening our laws regulating
lobbying, and by restoring a reasonable franchise to Americans who move
their residences.

We should develop educational television into a vital public resource to
enrich our homes, educate our families, and to provide assistance in our
classrooms. We should insist that the public interest be fully served
through the public's airwaves.

And I will propose these measures to the 90th Congress.

Now we come to a question that weighs very heavily on all our minds--on
yours and mine. This Nation must make an all-out effort to combat crime.

The 89th Congress gave us a new start in the attack on crime by passing
the Law Enforcement Assistance Act that I recommended. We appointed the
National Crime Commission to study crime in America and to recommend the
best ways to carry that attack forward.

And while we do not have all the answers, on the basis of its
preliminary recommendations we are ready to move.

This is not a war that Washington alone can win. The idea of a national
police force is repugnant to the American people. Crime must be rooted
out in local communities by local authorities. Our policemen must be
better trained, must be better paid, and must be better supported by the
local citizens that they try to serve and to protect.

The National Government can and expects to help.

And so I will recommend to the 90th Congress the Safe Streets and Crime
Control Act of 1967. It will enable us to assist those States and cities
that try to make their streets and homes safer, their police forces
better, their corrections systems more effective, and their courts more
efficient.

When the Congress approves, the Federal Government will be able to
provide a substantial percentage of the cost:

--90 percent of the cost of developing the State and local plans, master
plans, to combat crime in their area;

--60 percent of the cost of training new tactical units, developing
instant communications and special alarm systems, and introducing the
latest equipment and techniques so that they can become weapons in the
war on crime;

--50 percent of the cost of building crime laboratories and police
academy-type centers so that our citizens can be protected by the best
trained and served by the best equipped police to be found anywhere. We
will also recommend new methods to prevent juvenile delinquents from
becoming adult delinquents. We will seek new partnerships with States
and cities in order to deal with this hideous narcotics problem. And we
will recommend strict controls on the sale of firearms.

At the heart of this attack on crime must be the conviction that a free
America--as Abraham Lincoln once said--must "let reverence for the laws
. . . become the political religion of the Nation."

Our country's laws must be respected. Order must be maintained. And I
will support--with all the constitutional powers the President
possesses--our Nation's law enforcement officials in their attempt to
control the crime and the violence that tear the fabric of our
communities.

Many of these priority proposals will be built on foundations that have
already been laid. Some will necessarily be small at first, but "every
beginning is a consequence." If we postpone this urgent work now, it
will simply have to be done later, and later we will pay a much higher
price.

Our fourth objective is prosperity, to keep our economy moving ahead,
moving ahead steadily and safely.

We have now enjoyed 6 years of unprecedented and rewarding prosperity.
Last year, in 1966:

--Wages were the highest in history--and the unemployment rate,
announced yesterday, reached the lowest point in 13 years;

--Total after-tax income of American families rose nearly 5 percent;

--Corporate profits after taxes rose a little more than 5 percent;

--Our gross national product advanced 5.5 percent, to about $740
billion;

--Income per farm went up 6 percent.

Now we have been greatly concerned because consumer prices rose 4.5
percent over the 18 months since we decided to send troops to Vietnam.
This was more than we had expected--and the Government tried to do
everything that we knew how to do to hold it down. Yet we were not as
successful as we wished to be. In the 18 months after we entered World
War II, prices rose not 4.5 percent, but 13.5 percent. In the first 18
months after Korea, after the conflict broke out there, prices rose not
4.5 percent, but 11 percent. During those two periods we had OPA price
control that the Congress gave us and War Labor Board wage controls.

Since Vietnam we have not asked for those controls and we have tried to
avoid imposing them. We believe that we have done better, but we make no
pretense of having been successful or doing as well as we wished.

Our greatest disappointment in the economy during 1966 was the excessive
rise in interest rates and the tightening of credit. They imposed very
severe and very unfair burdens on our home buyers and on our home
builders, and all those associated with the home industry.

Last January, and again last September, I recommended fiscal and
moderate tax measures to try to restrain the unbalanced pace of economic
expansion. Legislatively and administratively we took several billions
out of the economy. With these measures, in both instances, the Congress
approved most of the recommendations rather promptly.

As 1966 ended, price stability was seemingly being restored. Wholesale
prices are lower tonight than they were in August. So are retail food
prices. Monetary conditions are also easing. Most interest rates have
retreated from their earlier peaks. More money now seems to be
available.

Given the cooperation of the Federal Reserve System, which I so
earnestly seek, I am confident that this movement can continue. I pledge
the American people that I will do everything in a President's power to
lower interest rates and to ease money in this country. The Federal Home
Loan Bank Board tomorrow morning will announce that it will make
immediately available to savings and loan associations an additional $1
billion, and will lower from 6 percent to 5 3/4 percent the interest
rate charged on those loans.

We shall continue on a sensible course of fiscal and budgetary policy
that we believe will keep our economy growing without new inflationary
spirals; that will finance responsibly the needs of our men in Vietnam
and the progress of our people at home; that will support a significant
improvement in our export surplus, and will press forward toward easier
credit and toward lower interest rates.

I recommend to the Congress a surcharge of 6 percent on both corporate
and individual income taxes--to last for 2 years or for so long as the
unusual expenditures associated with our efforts in Vietnam continue. I
will promptly recommend an earlier termination date if a reduction in
these expenditures permits it. This surcharge will raise revenues by
some $4.5 billion in the first year. For example, a person whose tax
payment, the tax he owes, is $1,000, will pay, under this proposal, an
extra $60 over the 12-month period, or $5 a month. The overwhelming
majority of Americans who pay taxes today are below that figure and they
will pay substantially less than $5 a month. Married couples with two
children, with incomes up to $5,000 per year, will be exempt from this
tax--as will single people with an income of up to $1,900 a year.

Now if Americans today still paid the income and excise tax rates in
effect when I came into the Presidency, in the year 1964, their annual
taxes would have been over $20 billion more than at present tax rates.
So this proposal is that while we have this problem and this emergency
in Vietnam, while we are trying to meet the needs of our people at home,
your Government asks for slightly more than one-fourth of that tax cut
each year in order to try to hold our budget deficit in fiscal 1968
within prudent limits and to give our country and to give our fighting
men the help they need in this hour of trial.

For fiscal 1967, we estimate the budget expenditures to be $126.7
billion and revenues of $117 billion. That will leave us a deficit this
year of $9.7 billion.

For fiscal 1968, we estimate budget expenditures of $135 billion. And
with the tax measures recommended, and a continuing strong economy, we
estimate revenues will be $126.9 billion. The deficit then will be $8.1
billion.

I will very soon forward all of my recommendations to the Congress.
Yours is the responsibility to discuss and to debate them--to approve or
modify or reject them.

I welcome your views, as I have welcomed working with you for 30 years
as a colleague and as Vice President and President.

I should like to say to the Members of the opposition--whose numbers, if
I am not mistaken, seem to have increased somewhat--that the genius of
the American political system has always been best expressed through
creative debate that offers choices and reasonable alternatives.
Throughout our history, great Republicans and Democrats have seemed to
understand this. So let there be light and reason in our relations. That
is the way to a responsible session and a responsive government.

Let us be remembered as a President and a Congress who tried to improve
the quality of life for every American--not just the rich, not just the
poor, but every man, woman, and child in this great Nation of ours.

We all go to school--to good schools or bad schools. We all take air
into our lungs--clean air or polluted air. We all drink water--pure
water or polluted water. We all face sickness someday, and some more
often than we wish, and old age as well. We all have a stake in this
Great Society--in its economic growth, in reduction of civil strife--a
great stake in good government.

We just must not arrest the pace of progress we have established in this
country in these years. Our children's children will pay the price if we
are not wise enough, and courageous enough, and determined enough to
stand up and meet the Nation's needs as well as we can in the time
allotted us. III.

Abroad, as at home, there is also risk in change. But abroad, as at
home, there is a greater risk in standing still. No part of our foreign
policy is so sacred that it ever remains beyond review. We shall be
flexible where conditions in the world change--and where man's efforts
can change them for the better.

We are in the midst of a great transition--a transition from narrow
nationalism to international partnership; from the harsh spirit of the
cold war to the hopeful spirit of common humanity on a troubled and a
threatened planet.

In Latin America, the American chiefs of state will be meeting very
shortly to give our hemispheric policies new direction.

We have come a long way in this hemisphere since the inter-American
effort in economic and social development was launched by the conference
at Bogota in 1960 under the leadership of President Eisenhower. The
Alliance for Progress moved dramatically forward under President
Kennedy. There is new confidence that the voice of the people is being
heard; that the dignity of the individual is stronger than ever in this
hemisphere, and we are facing up to and meeting many of the hemispheric
problems together. In this hemisphere that reform under democracy can be
made to happen--because it has happened. So together, I think, we must
now move to strike down the barriers to full cooperation among the
American nations, and to free the energies and the resources of two
great continents on behalf of all of our citizens.

Africa stands at an earlier stage of development than Latin America. It
has yet to develop the transportation, communications, agriculture, and,
above all, the trained men and women without which growth is impossible.
There, too, the job will best be done if the nations and peoples of
Africa cooperate on a regional basis. More and more our programs for
Africa are going to be directed toward self-help.

The future of Africa is shadowed by unsolved racial conflicts. Our
policy will continue to reflect our basic commitments as a people to
support those who are prepared to work towards cooperation and harmony
between races, and to help those who demand change but reject the fool's
gold of violence.

In the Middle East the spirit of good will toward all, unfortunately,
has not yet taken hold. An already tortured peace seems to be constantly
threatened. We shall try to use our influence to increase the
possibilities of improved relations among the nations of that region. We
are working hard at that task.

In the great subcontinent of South Asia live more than a sixth of the
earth's population. Over the years we--and others--have invested very
heavily in capital and food for the economic development of India and
Pakistan.

We are not prepared to see our assistance wasted, however, in conflict.
It must strengthen their capacity to help themselves. It must help these
two nations--both our friends--to overcome poverty, to emerge as
self-reliant leaders, and find terms for reconciliation and cooperation.

In Western Europe we shall maintain in NATO an integrated common
defense. But we also look forward to the time when greater security can
be achieved through measures of arms control and disarmament, and
through other forms of practical agreement.

We are shaping a new future of enlarged partnership in nuclear affairs,
in economic and technical cooperation, in trade negotiations, in
political consultation, and in working together with the governments and
peoples of Eastern Europe and the Soviet Union.

The emerging spirit of confidence is precisely what we hoped to achieve
when we went to work a generation ago to put our shoulder to the wheel
and try to help rebuild Europe. We faced new challenges and
opportunities then and there--and we faced also some dangers. But I
believe that the peoples on both sides of the Atlantic, as well as both
sides of this Chamber, wanted to face them together.

Our relations with the Soviet Union and Eastern Europe are also in
transition. We have avoided both the acts and the rhetoric of the cold
war. When we have differed with the Soviet Union, or other nations, for
that matter, I have tried to differ quietly and with courtesy, and
without venom.

Our objective is not to continue the cold war, but to end it.

We have reached an agreement at the United Nations on the peaceful uses
of outer space.

We have agreed to open direct air flights with the Soviet Union.

We have removed more than 400 nonstrategic items from export control.

We are determined that the Export-Import Bank can allow commercial
credits to Poland, Hungary, Bulgaria, and Czechoslovakia, as well as to
Romania and Yugoslavia.

We have entered into a cultural agreement with the Soviet Union for
another 2 years.

We have agreed with Bulgaria and Hungary to upgrade our legations to
embassies.

We have started discussions with international agencies on ways of
increasing contacts with Eastern European countries.

This administration has taken these steps even as duty compelled us to
fulfill and execute alliances and treaty obligations throughout the
world that were entered into before I became President.

So tonight I now ask and urge this Congress to help our foreign and our
commercial trade policies by passing an East-West trade bill and by
approving our consular convention with the Soviet Union.

The Soviet Union has in the past year increased its long-range missile
capabilities. It has begun to place near Moscow a limited antimissile
defense. My first responsibility to our people is to assure that no
nation can ever find it rational to launch a nuclear attack or to use
its nuclear power as a credible threat against us or against our allies.

I would emphasize that that is why an important link between Russia and
the United States is in our common interest, in arms control and in
disarmament. We have the solemn duty to slow down the arms race between
us, if that is at all possible, in both conventional and nuclear weapons
and defenses. I thought we were making some progress in that direction
the first few months I was in office. I realize that any additional race
would impose on our peoples, and on all mankind, for that matter, an
additional waste of resources with no gain in security to either side.

I expect in the days ahead to closely consult and seek the advice of the
Congress about the possibilities of international agreements bearing
directly upon this problem.

Next to the pursuit of peace, the really greatest challenge to the human
family is the race between food supply and population increase. That
race tonight is being lost.

The time for rhetoric has clearly passed. The time for concerted action
is here and we must get on with the job.

We believe that three principles must prevail if our policy is to
succeed:

First, the developing nations must give highest priority to food
production, including the use of technology and the capital of private
enterprise.

Second, nations with food deficits must put more of their resources into
voluntary family planning programs.

And third, the developed nations must all assist other nations to avoid
starvation in the short run and to move rapidly towards the ability to
feed themselves.

Every member of the world community now bears a direct responsibility to
help bring our most basic human account into balance. IV.

I come now finally to Southeast Asia--and to Vietnam in particular. Soon
I will submit to the Congress a detailed report on that situation.
Tonight I want to just review the essential points as briefly as I can.

We are in Vietnam because the United States of America and our allies
are committed by the SEATO Treaty to "act to meet the common danger" of
aggression in Southeast Asia.

We are in Vietnam because an international agreement signed by the
United States, North Vietnam, and others in 1962 is being systematically
violated by the Communists. That violation threatens the independence of
all the small nations in Southeast Asia, and threatens the peace of the
entire region and perhaps the world.

We are there because the people of South Vietnam have as much right to
remain non-Communist--if that is what they choose--as North Vietnam has
to remain Communist.

We are there because the Congress has pledged by solemn vote to take all
necessary measures to prevent further aggression.

No better words could describe our present course than those once spoken
by the great Thomas Jefferson:

"It is the melancholy law of human societies to be compelled sometimes
to choose a great evil in order to ward off a greater."

We have chosen to fight a limited war in Vietnam in an attempt to
prevent a larger war--a war almost certain to follow, I believe, if the
Communists succeed in overrunning and taking over South Vietnam by
aggression and by force. I believe, and I am supported by some
authority, that if they are not checked now the world can expect to pay
a greater price to check them later.

That is what our statesmen said when they debated this treaty, and that
is why it was ratified 82 to 1 by the Senate many years ago.

You will remember that we stood in Western Europe 20 years ago. Is there
anyone in this Chamber tonight who doubts that the course of freedom was
not changed for the better because of the courage of that stand?

Sixteen years ago we and others stopped another kind of aggression--this
time it was in Korea. Imagine how different Asia might be today if we
had failed to act when the Communist army of North Korea marched south.
The Asia of tomorrow will be far different because we have said in
Vietnam, as we said 16 years ago in Korea: "This far and no further."

I think I reveal no secret when I tell you that we are dealing with a
stubborn adversary who is committed to the use of force and terror to
settle political questions.

I wish I could report to you that the conflict is almost over. This I
cannot do. We face more cost, more loss, and more agony. For the end is
not yet. I cannot promise you that it will come this year--or come next
year. Our adversary still believes, I think, tonight, that he can go on
fighting longer than we can, and longer than we and our allies will be
prepared to stand up and resist.

Our men in that area--there are nearly 500,000 now--have borne well "the
burden and the heat of the day." Their efforts have deprived the
Communist enemy of the victory that he sought and that he expected a
year ago. We have steadily frustrated his main forces. General
Westmoreland reports that the enemy can no longer succeed on the
battlefield.

So I must say to you that our pressure must be sustained--and will be
sustained--until he realizes that the war he started is costing him more
than he can ever gain.

I know of no strategy more likely to attain that end than the strategy
of "accumulating slowly, but inexorably, every kind of material
resource"--of "laboriously teaching troops the very elements of their
trade." That, and patience--and I mean a great deal of patience.

Our South Vietnamese allies are also being tested tonight. Because they
must provide real security to the people living in the countryside. And
this means reducing the terrorism and the armed attacks which kidnaped
and killed 26,900 civilians in the last 32 months, to levels where they
can be successfully controlled by the regular South Vietnamese security
forces. It means bringing to the villagers an effective civilian
government that they can respect, and that they can rely upon and that
they can participate in, and that they can have a personal stake in. We
hope that government is now beginning to emerge.

While I cannot report the desired progress in the pacification effort,
the very distinguished and able Ambassador, Henry Cabot Lodge, reports
that South Vietnam is turning to this task with a new sense of urgency.
We can help, but only they can win this part of the war. Their task is
to build and protect a new life in each rural province.

One result of our stand in Vietnam is already clear.

It is this: The peoples of Asia now know that the door to independence
is not going to be slammed shut. They know that it is possible for them
to choose their own national destinies--without coercion.

The performance of our men in Vietnam--backed by the American
people--has created a feeling of confidence and unity among the
independent nations of Asia and the Pacific. I saw it in their faces in
the 19 days that I spent in their homes and in their countries. Fear of
external Communist conquest in many Asian nations is already
subsiding--and with this, the spirit of hope is rising. For the first
time in history, a common outlook and common institutions are already
emerging.

This forward movement is rooted in the ambitions and the interests of
Asian nations themselves. It was precisely this movement that we hoped
to accelerate when I spoke at Johns Hopkins in Baltimore in April 1965,
and I pledged "a much more massive effort to improve the life of man" in
that part of the world, in the hope that we could take some of the funds
that we were spending on bullets and bombs and spend it on schools and
production.

Twenty months later our efforts have produced a new reality: The doors
of the billion dollar Asian Development Bank that I recommended to the
Congress, and you endorsed almost unanimously, I am proud to tell you
are already open. Asians are engaged tonight in regional efforts in a
dozen new directions. Their hopes are high. Their faith is strong. Their
confidence is deep.

And even as the war continues, we shall play our part in carrying
forward this constructive historic development. As recommended by the
Eugene Black mission, and if other nations will join us, I will seek a
special authorization from the Congress of $200 million for East Asian
regional programs.

We are eager to turn our resources to peace. Our efforts in behalf of
humanity I think need not be restricted by any parallel or by any
boundary line. The moment that peace comes, as I pledged in Baltimore, I
will ask the Congress for funds to join in an international program of
reconstruction and development for all the people of Vietnam--and their
deserving neighbors who wish our help.

We shall continue to hope for a reconciliation between the people of
Mainland China and the world community--including working together in
all the tasks of arms control, security, and progress on which the fate
of the Chinese people, like their fellow men elsewhere, depends.

We would be the first to welcome a China which decided to respect her
neighbors' rights. We would be the first to applaud her were she to
apply her great energies and intelligence to improving the welfare of
her people. And we have no intention of trying to deny her legitimate
needs for security and friendly relations with her neighboring
countries.

Our hope that all of this will someday happen rests on the conviction
that we, the American people and our allies, will and are going to see
Vietnam through to an honorable peace.

We will support all appropriate initiatives by the United Nations, and
others, which can bring the several parties together for unconditional
discussions of peace--anywhere, any time. And we will continue to take
every possible initiative ourselves to constantly probe for peace.

Until such efforts succeed, or until the infiltration ceases, or until
the conflict subsides, I think the course of wisdom for this country is
that we just must firmly pursue our present course. We will stand firm
in Vietnam.

I think you know that our fighting men there tonight bear the heaviest
burden of all. With their lives they serve their Nation. We must give
them nothing less than our full support--and we have given them
that--nothing less than the determination that Americans have always
given their fighting men. Whatever our sacrifice here, even if it is
more than $5 a month, it is small compared to their own.

How long it will take I cannot prophesy. I only know that the will of
the American people, I think, is tonight being tested.

Whether we can fight a war of limited objectives over a period of time,
and keep alive the hope of independence and stability for people other
than ourselves; whether we can continue to act with restraint when the
temptation to "get it over with" is inviting but dangerous; whether we
can accept the necessity of choosing "a great evil in order to ward off
a greater"; whether we can do these without arousing the hatreds and the
passions that are ordinarily loosed in time of war--on all these
questions so much turns.

The answers will determine not only where we are, but "whither we are
tending."

A time of testing--yes. And a time of transition. The transition is
sometimes slow; sometimes unpopular; almost always very painful; and
often quite dangerous.

But we have lived with danger for a long time before, and we shall live
with it for a long time yet to come. We know that "man is born unto
trouble." We also know that this Nation was not forged and did not
survive and grow and prosper without a great deal of sacrifice from a
great many men.

For all the disorders that we must deal with, and all the frustrations
that concern us, and all the anxieties that we are called upon to
resolve, for all the issues we must face with the agony that attends
them, let us remember that "those who expect to reap the blessings of
freedom must, like men, undergo the fatigues of supporting it."

But let us also count not only our burdens but our blessings--for they
are many.

And let us give thanks to the One who governs us all.

Let us draw encouragement from the signs of hope--for they, too, are
many.

Let us remember that we have been tested before and America has never
been found wanting.

So with your understanding, I would hope your confidence, and your
support, we are going to persist--and we are going to succeed.

***

State of the Union Address
Lyndon B. Johnson
January 17, 1968

Mr. Speaker, Mr. President, Members of the Congress, and my fellow
Americans:

I was thinking as I was walking down the aisle tonight of what Sam
Rayburn told me many years ago: The Congress always extends a very warm
welcome to the President--as he comes in.

Thank all of you very, very much.

I have come once again to this Chamber--the home of our democracy--to
give you, as the Constitution requires, "Information of the State of the
Union."

I report to you that our country is challenged, at home and abroad:

--that it is our will that is being tried, not our strength; our sense
of purpose, not our ability to achieve a better America;

--that we have the strength to meet our every challenge; the physical
strength to hold the course of decency and compassion at home; and the
moral strength to support the cause of peace in the world.

And I report to you that I believe, with abiding conviction, that this
people--nurtured by their deep faith, tutored by their hard lessons,
moved by their high aspirations--have the will to meet the trials that
these times impose.

Since I reported to you last January:

--Three elections have been held in Vietnam--in the midst of war and
under the constant threat of violence.

--A President, a Vice President, a House and Senate, and village
officials have been chosen by popular, contested ballot.

--The enemy has been defeated in battle after battle.

--The number of South Vietnamese living in areas under Government
protection tonight has grown by more than a million since January of
last year.

These are all marks of progress. Yet:

--The enemy continues to pour men and material across frontiers and into
battle, despite his continuous heavy losses.

--He continues to hope that America's will to persevere can be broken.
Well--he is wrong. America will persevere. Our patience and our
perseverance will match our power. Aggression will never prevail.

But our goal is peace--and peace at the earliest possible moment.

Right now we are exploring the meaning of Hanoi's recent statement.
There is no mystery about the questions which must be answered before
the bombing is stopped.

We believe that any talks should follow the San Antonio formula that I
stated last September, which said:

--The bombing would stop immediately if talks would take place promptly
and with reasonable hopes that they would be productive.

--And the other side must not take advantage of our restraint as they
have in the past. This Nation simply cannot accept anything less without
jeopardizing the lives of our men and of our allies.

If a basis for peace talks can be established on the San Antonio
foundations--and it is my hope and my prayer that they can--we would
consult with our allies and with the other side to see if a complete
cessation of hostilities--a really true cease-fire--could be made the
first order of business. I will report at the earliest possible moment
the results of these explorations to the American people.

I have just recently returned from a very fruitful visit and talks with
His Holiness the Pope and I share his hope--as he expressed it earlier
today--that both sides will extend themselves in an effort to bring an
end to the war in Vietnam. I have today assured him that we and our
allies will do our full part to bring this about.

Since I spoke to you last January, other events have occurred that have
major consequences for world peace.

--The Kennedy Round achieved the greatest reduction in tariff barriers
in all the history of trade negotiations.

--The nations of Latin America at Punta del Este resolved to move toward
economic integration.

--In Asia, the nations from Korea and Japan to Indonesia and Singapore
worked behind America's shield to strengthen their economies and to
broaden their political cooperation.

--In Africa, from which the distinguished Vice President has just
returned, he reports to me that there is a spirit of regional
cooperation that is beginning to take hold in very practical ways.

These events we all welcomed. Yet since I last reported to you, we and
the world have been confronted by a number of crises:

--During the Arab-Israeli war last June, the hot line between Washington
and Moscow was used for the first time in our history. A cease-fire was
achieved without a major power confrontation.

Now the nations of the Middle East have the opportunity to cooperate
with Ambassador Jarring's U.N. mission and they have the responsibility
to find the terms of living together in stable peace and dignity, and we
shall do all in our power to help them achieve that result.

--Not far from this scene of conflict, a crisis flared on Cyprus
involving two peoples who are America's friends: Greece and Turkey. Our
very able representative, Mr. Cyrus Vance, and others helped to ease
this tension.

--Turmoil continues on the mainland of China after a year of violent
disruption. The radical extremism of their Government has isolated the
Chinese people behind their own borders. The United States, however,
remains willing to permit the travel of journalists to both our
countries; to undertake cultural and educational exchanges; and to talk
about the exchange of basic food crop materials.

Since I spoke to you last, the United States and the Soviet Union have
taken several important steps toward the goal of international
cooperation.

As you will remember, I met with Chairman Kosygin at Glassboro and we
achieved if not accord, at least a clearer understanding of our
respective positions after 2 days of meeting.

Because we believe the nuclear danger must be narrowed, we have worked
with the Soviet Union and with other nations to reach an agreement that
will halt the spread of nuclear weapons. On the basis of communications
from Ambassador Fisher in Geneva this afternoon, I am encouraged to
believe that a draft treaty can be laid before the conference in Geneva
in the very near future. I hope to be able to present that treaty to the
Senate this year for the Senate's approval.

We achieved, in 1967, a consular treaty with the Soviets, the first
commercial air agreement between the two countries, and a treaty banning
weapons in outer space. We shall sign, and submit to the Senate shortly,
a new treaty with the Soviets and with others for the protection of
astronauts.

Serious differences still remain between us, yet in these relations, we
have made some progress since Vienna, the Berlin Wall, and the Cuban
missile crisis.

But despite this progress, we must maintain a military force that is
capable of deterring any threat to this Nation's security, whatever the
mode of aggression. Our choices must not be confined to total war--or to
total acquiescence.

We have such a military force today. We shall maintain it.

I wish--with all of my heart--that the expenditures that are necessary
to build and to protect our power could all be devoted to the programs
of peace. But until world conditions permit, and until peace is assured,
America's might--and America's bravest sons who wear our Nation's
uniform--must continue to stand guard for all of us--as they gallantly
do tonight in Vietnam and other places in the world.

Yet neither great weapons nor individual courage can provide the
conditions of peace.

For two decades America has committed itself against the tyranny of want
and ignorance in the world that threatens the peace. We shall sustain
that commitment. This year I shall propose:

--That we launch, with other nations, an exploration of the ocean depths
to tap its wealth, and its energy, and its abundance.

--That we contribute our fair share to a major expansion of the
International Development Association, and to increase the resources of
the Asian Development Bank.

--That we adopt a prudent aid program, rooted in the principle of
self-help.

--That we renew and extend the food for freedom program.

Our food programs have already helped millions avoid the horrors of
famine.

But unless the rapid growth of population in developing countries is
slowed, the gap between rich and poor will widen steadily.

Governments in the developing countries must take such facts into
consideration. We in the United States are prepared to help assist them
in those efforts.

But we must also improve the lives of children already born in the
villages and towns and cities on this earth. They can be taught by great
teachers through space communications and the miracle of satellite
television--and we are going to bring to bear every resource of mind and
technology to help make this dream come true.

Let me speak now about some matters here at home.

Tonight our Nation is accomplishing more for its people than has ever
been accomplished before. Americans are prosperous as men have never
been in recorded history. Yet there is in the land a certain
restlessness--a questioning.

The total of our Nation's annual production is now above $800 billion.
For 83 months this Nation has been on a steady upward trend of growth.

All about them, most American families can see the evidence of growing
abundance: higher paychecks, humming factories, new cars moving down new
highways. More and more families own their own homes, equipped with more
than 70 million television sets.

A new college is founded every week. Today more than half of the high
school graduates go on to college.

There are hundreds of thousands of fathers and mothers who never
completed grammar school--who will see their children graduate from
college.

Why, then, this restlessness?

Because when a great ship cuts through the sea, the waters are always
stirred and troubled.

And our ship is moving. It is moving through troubled and new waters; it
is moving toward new and better shores.

We ask now, not how can we achieve abundance?--but how shall we use our
abundance? Not, is there abundance enough for all?--but, how can all
share in our abundance?

While we have accomplished much, much remains for us to meet and much
remains for us to master.

--In some areas, the jobless rate is still three or four times the
national average.

--Violence has shown its face in some of our cities.

--Crime increases on our streets.

--Income for farm workers remains far behind that for urban workers; and
parity for our farmers who produce our food is still just a hope--not an
achievement.

--New housing construction is far less than we need--to assure decent
shelter for every family.

--Hospital and medical costs are high, and they are rising.

--Many rivers--and the air in many cities--remain badly polluted. And
our citizens suffer from breathing that air.

We have lived with conditions like these for many, many years. But much
that we once accepted as inevitable, we now find absolutely intolerable.

In our cities last summer, we saw how wide is the gulf for some
Americans between the promise and the reality of our society.

We know that we cannot change all of this in a day. It represents the
bitter consequences of more than three centuries.

But the issue is not whether we can change this; the issue is whether we
will change this.

Well, I know we can. And I believe we will.

This then is the work we should do in the months that are ahead of us in
this Congress.

The first essential is more jobs, useful jobs for tens of thousands who
can become productive and can pay their own way.

Our economy has created 7 1/2 million new jobs in the past 4 years. It
is adding more than a million and a half new jobs this year.

Through programs passed by the Congress, job training is being given
tonight to more than a million Americans in this country.

This year, the time has come when we must get to those who are last in
line--the hard-core unemployed--the hardest to reach.

Employment officials estimate that 500,000 of these persons are now
unemployed in the major cities of America. Our objective is to place
these 500,000 in private industry jobs within the next 3 years.

To do this, I propose a $2. 1 billion manpower program in the coming
fiscal year--a 25 percent increase over the current year. Most of this
increase will be used to start a new partnership between government and
private industry to train and to hire the hard-core unemployed persons.
I know of no task before us of more importance to us, to the country, or
to our future.

Another essential is to rebuild our cities.

Last year the Congress authorized $662 million for the Model Cities
program. I requested the full amount of that authorization to help meet
the crisis in the cities of America. But the Congress appropriated only
$312 million--less than half.

This year I urge the Congress to honor my request for model cities funds
to rebuild the centers of American cities by granting us the full amount
that you in the Congress authorized--$1 billion.

The next essential is more housing--and more housing now.

Surely a nation that can go to the moon can place a decent home within
the reach of its families.

Therefore we must call together the resources of industry and labor, to
start building 300,000 housing units for low- and middle-income families
next year--that is three times more than this year. We must make it
possible for thousands of families to become homeowners, not
rent-payers.

I propose, for the consideration of this Congress, a 10-year campaign to
build 6 million new housing units for low and middle-income families.
Six million units in the next 10 years. We have built 530,000 the last
10 years.

Better health for our children--all of our children--is essential if we
are to have a better America.

Last year, Medicare, Medicaid, and other new programs that you passed in
the Congress brought better health to more than 25 million Americans.

American medicine--with the very strong support and cooperation of
public resources--has produced a phenomenal decline in the death rate
from many of the dread diseases.

But it is a shocking fact that, in saving the lives of babies, America
ranks 15th among the nations of the world. And among children, crippling
defects are often discovered too late for any corrective action. This is
a tragedy that Americans can, and Americans should, prevent.

I shall, therefore, propose to the Congress a child health program to
provide, over the next 5 years, for families unable to afford it--access
to health services from prenatal care of the mother through the child's
first year.

When we do that you will find it is the best investment we ever made
because we will get these diseases in their infancy and we will find a
cure in a great many instances that we can never find by overcrowding
our hospitals when they are grown.

Now when we act to advance the consumer's cause I think we help every
American.

Last year, with very little fanfare the Congress and the executive
branch moved in that field.

We enacted the Wholesome Meat Act, the Flammable Fabrics Act, the
Product Safety Commission, and a law to improve clinical laboratories.

And now, I think, the time has come to complete our unfinished work. The
Senate has already passed the truth-in-lending bill, the fire safety
bill, and the pipeline safety laws.

Tonight I plead with the House to immediately act upon these measures
and I hope take favorable action upon all of them. I call upon the
Congress to enact, without delay, the remainder of the 12 vital consumer
protection laws that I submitted to the Congress last year.

I also urge final action on a measure that is already passed by the
House to guard against fraud and manipulation in the Nation's commodity
exchange market.

These measures are a pledge to our people--to keep them safe in their
homes and at work, and to give them a fair deal in the marketplace.

And I think we must do more. I propose:

--New powers for the Federal Trade Commission to stop those who defraud
and who swindle our public.

--New safeguards to insure the quality of fish and poultry, and the
safety of our community water supplies.

--A major study of automobile insurance.

--Protection against hazardous radiation from television sets and other
electronic equipment.

And to give the consumer a stronger voice, I plan to appoint a consumer
counsel in the Justice Department--a lawyer for the American
consumer--to work directly under the Attorney General, to serve the
President's Special Assistant for Consumer Affairs, and to serve the
consumers of this land.

This Congress--Democrats and Republicans--can earn the thanks of
history. We can make this truly a new day for the American consumer, and
by giving him this protection we can live in history as the
consumer-conscious Congress.

So let us get on with the work. Let us act soon.

We, at every level of the government, State, local, Federal, know that
the American people have had enough of rising crime and lawlessness in
this country.

They recognize that law enforcement is first the duty of local police
and local government.

They recognize that the frontline headquarters against crime is in the
home, the church, the city hall and the county courthouse and the
statehouse--not in the far-removed National Capital of Washington.

But the people also recognize that the National Government can and the
National Government should help the cities and the States in their war
on crime to the full extent of its resources and its constitutional
authority. And this we shall do.

This does not mean a national police force. It does mean help and
financial support:

--to develop State and local master plans to combat crime,

--to provide better training and better pay for police, and

--to bring the most advanced technology to the war on crime in every
city and every county in America.

There is no more urgent business before this Congress than to pass the
Safe Streets Act this year that I proposed last year. That law will
provide these required funds. They are so critically needed that I have
doubled my request under this act to $100 million in fiscal 1969.

And I urge the Congress to stop the trade in mail-order murder, to stop
it this year by adopting a proper gun control law.

This year, I will propose a Drug Control Act to provide stricter
penalties for those who traffic in LSD and other dangerous drugs with
our people.

I will ask for more vigorous enforcement of all of our drug laws by
increasing the number of Federal drug and narcotics control officials by
more than 30 percent. The time has come to stop the sale of slavery to
the young. I also request you to give us funds to add immediately 100
assistant United States attorneys throughout the land to help prosecute
our criminal laws. We have increased our judiciary by 40 percent and we
have increased our prosecutors by 16 percent. The dockets are full of
cases because we don't have assistant district attorneys to go before
the Federal judge and handle them. We start these young lawyers at
$8,200 a year. And the docket is clogged because we don't have authority
to hire more of them.

I ask the Congress for authority to hire 100 more. These young men will
give special attention to this drug abuse, too.

Finally, I ask you to add 100 FBI agents to strengthen law enforcement
in the Nation and to protect the individual rights of every citizen.

A moment ago I spoke of despair and frustrated hopes in the cities where
the fires of disorder burned last summer. We can--and in time we
will--change that despair into confidence, and change those frustrations
into achievements. But violence will never bring progress.

We can make progress only by attacking the causes of violence and only
where there is civil order founded on justice.

Today we are helping local officials improve their capacity to deal
promptly with disorders.

Those who preach disorder and those who preach violence must know that
local authorities are able to resist them swiftly, to resist them
sternly, and to resist them decisively.

I shall recommend other actions:

--To raise the farmers' income by establishing a security commodity
reserve that will protect the market from price-depressing stocks and
protect the consumer from food scarcity.

--I shall recommend programs to help farmers bargain more effectively
for fair prices.

--I shall recommend programs for new air safety measures.

--Measures to stem the rising costs of medical care.

--Legislation to encourage our returning veterans to devote themselves
to careers in community service such as teaching, and being firemen, and
joining our police force, and our law enforcement officials.

--I shall recommend programs to strengthen and finance our
anti-pollution efforts.

--Fully funding all of the $2.18 billion poverty program that you in the
Congress had just authorized in order to bring opportunity to those who
have been left far behind.

--I shall recommend an Educational Opportunity Act to speed up our drive
to break down the financial barriers that are separating our young
people from college.

I shall also urge the Congress to act on several other vital pending
bills--especially the civil rights measures--fair jury trials,
protection of Federal rights, enforcement of equal employment
opportunity, and fair housing.

The unfinished work of the first session must be completed--the Higher
Education Act, the Juvenile Delinquency Act, conservation measures to
save the redwoods of California, and to preserve the wonders of our
scenic rivers, the Highway Beautification Act--and all the other
measures for a cleaner, and for a better, and for a more beautiful
America.

Next month we'll begin our 8th year of uninterrupted prosperity. The
economic outlook for this year is one of steady growth--if we are
vigilant.

True, there are some clouds on the horizon. Prices are rising. Interest
rates have passed the peak of 1966; and if there is continued inaction
on the tax bill, they will climb even higher.

I warn the Congress and the Nation tonight that this failure to act on
the tax bill will sweep us into an accelerating spiral of price
increases, a slump in homebuilding, and a continuing erosion of the
American dollar.

This would be a tragedy for every American family. And I predict that if
this happens, they will all let us know about it.

We--those of us in the executive branch, in the Congress, and the
leaders of labor and business--must do everything we can to prevent that
kind of misfortune.

Under the new budget, the expenditures for 1969 will increase by $10.4
billion. Receipts will increase by $22.3 billion including the added tax
revenues. Virtually all of this expenditure increase represents the
mandatory cost of our defense efforts, $3 billion; increased interest,
almost $1 billion; or mandatory payments under laws passed by
Congress--such as those provided in the Social Security Act that you
passed in 1967, and to Medicare and Medicaid beneficiaries, veterans,
and farmers, of about $4 1/2 billion; and the additional $1 billion 600
million next year for the pay increases that you passed in military and
civilian pay. That makes up the $10 billion that is added to the budget.
With few exceptions, very few, we are holding the fiscal 1969 budget to
last year's level, outside of those mandatory and required increases.

A Presidential commission composed of distinguished congressional fiscal
leaders and other prominent Americans recommended this year that we
adopt a new budget approach. I am carrying out their recommendations in
this year's budget. This budget, therefore, for the first time
accurately covers all Federal expenditures and all Federal receipts,
including for the first time in one budget $47 billion from the social
security, Medicare, highway, and other trust funds.

The fiscal 1969 budget has expenditures of approximately $186 billion,
with total estimated revenues, including the tax bill, of about $178
billion.

If the Congress enacts the tax increase, we will reduce the budget
deficit by some $12 billion. The war in Vietnam is costing us about $25
billion and we are asking for about $12 billion in taxes--and if we get
that $12 billion tax bill we will reduce the deficit from about $20
billion in 1968 to about $8 billion in 1969.

Now, this is a tight budget. It follows the reduction that I made in
cooperation with the Congress--a reduction made after you had reviewed
every appropriations bill and reduced the appropriations by some $5 or
$6 billion and expenditures by $1.5 billion. We conferred together and I
recommended to the Congress and you subsequently approved taking 2
percent from payrolls and 10 percent from controllable expenditures. We
therefore reduced appropriations almost $10 billion last session and
expenditures over $4 billion. Now, that was in the budget last year.

I ask the Congress to recognize that there are certain selected programs
that meet the Nation's most urgent needs and they have increased. We
have insisted that decreases in very desirable but less urgent programs
be made before we would approve any increases. So I ask the Congress
tonight:

--to hold its appropriations to the budget requests, and

--to act responsibly early this year by enacting the tax surcharge which
for the average American individual amounts to about a penny out of each
dollar's income.

This tax increase would yield about half of the $23 billion per year
that we returned to the people in the tax reduction bills of 1964 and
1965.

This must be a temporary measure, which expires in less than 2 years.
Congress can repeal it sooner if the need has passed. But Congress can
never repeal inflation.

The leaders of American business and the leaders of American
labor--those who really have power over wages and prices--must act
responsibly, and in their Nation's interest by keeping increases in line
with productivity. If our recognized leaders do not do this, they and
those for whom they speak and all of us are going to suffer very serious
consequences.

On January 1st, I outlined a program to reduce our balance of payments
deficit sharply this year. We will ask the Congress to help carry out
those parts of the program which require legislation. We must restore
equilibrium to our balance of payments.

We must also strengthen the international monetary system. We have
assured the world that America's full gold stock stands behind our
commitment to maintain the price of gold at $35 an ounce. We must back
this commitment by legislating now to free our gold reserves.

Americans, traveling more than any other people in history, took $4
billion out of their country last year in travel costs. We must try to
reduce the travel deficit that we have of more than $2 billion. We are
hoping that we can reduce it by $500 million--without unduly penalizing
the travel of teachers, students, business people who have essential and
necessary travel, or people who have relatives abroad whom they want to
see. Even with this reduction of $500 million, the American people will
still be traveling more overseas than they did in 1967, 1966, or 1965 or
any other year in their history.

If we act together as I hope we can, I believe we can continue our
economic expansion which has already broken all past records. And I hope
that we can continue that expansion in the days ahead.

Each of these questions I have discussed with you tonight is a question
of policy for our people. Therefore, each of them should be--and
doubtless will be--debated by candidates for public office this year.

I hope those debates will be marked by new proposals and by a
seriousness that matches the gravity of the questions themselves.

These are not appropriate subjects for narrow partisan oratory. They go
to the heart of what we Americans are all about--all of us, Democrats
and Republicans.

Tonight I have spoken of some of the goals I should like to see America
reach. Many of them can be achieved this year--others by the time we
celebrate our Nation's 200th birthday--the bicentennial of our
independence.

Several of these goals are going to be very hard to reach. But the State
of our Union will be much stronger 8 years from now on our 200th
birthday if we resolve to reach these goals now. They are more
important--much more important--than the identity of the party or the
President who will then be in office.

These goals are what the fighting and our alliances are really meant to
protect.

Can we achieve these goals?

Of course we can--if we will.

If ever there was a people who sought more than mere abundance, it is
our people.

If ever there was a nation that was capable of solving its problems, it
is this Nation.

If ever there were a time to know the pride and the excitement and the
hope of being an American--it is this time.

So this, my friends, is the State of our Union: seeking, building,
tested many times in this past year--and always equal to the test.

Thank you and good night.

***

State of the Union Address
Lyndon B. Johnson
January 14, 1969

Mr. Speaker, Mr. President, Members of the Congress and my fellow
Americans:

For the sixth and the last time, I present to the Congress my assessment
of the State of the Union.

I shall speak to you tonight about challenge and opportunity--and about
the commitments that all of us have made together that will, if we carry
them out, give America our best chance to achieve the kind of great
society that we all want. Every President lives, not only with what is,
but with what has been and what could be.

Most of the great events in his Presidency are part of a larger sequence
extending back through several years and extending back through several
other administrations.

Urban unrest, poverty, pressures on welfare, education of our people,
law enforcement and law and order, the continuing crisis in the Middle
East, the conflict in Vietnam, the dangers of nuclear war, the great
difficulties of dealing with the Communist powers, all have this much in
common: They and their causes--the causes that gave rise to them--all of
these have existed with us for many years. Several Presidents have
already sought to try to deal with them. One or more Presidents will try
to resolve them or try to contain them in the years that are ahead of
us.

But if the Nation's problems are continuing, so are this great Nation's
assets:

--our economy,

--the democratic system,

--our sense of exploration, symbolized most recently by the wonderful
flight of the Apollo 8, in which all Americans took great pride,

--the good commonsense and sound judgment of the American people, and

--their essential love of justice.

We must not ignore our problems. But .neither should we ignore our
strengths. Those strengths are available to sustain a President of
either party--to support his progressive efforts both at home and
overseas.

Unfortunately, the departure of an administration does not mean the end
of the problems that this administration has faced. The effort to meet
the problems must go on, year after year, if the momentum that we have
all mounted together in these past years is not to be lost.

Although the struggle for progressive change is continuous, there are
times when a watershed is reached--when there is--if not really a break
with the past--at least the fulfillment of many of its oldest hopes, and
a stepping forth into a new environment, to seek new goals. I think the
past 5 years have been such a time.

We have finished a major part of the old agenda.

Some of the laws that we wrote have already, in front of our eyes, taken
on the flesh of achievement.

Medicare that we were unable to pass for so many years is now a part of
American life.

Voting rights and the voting booth that we debated so long back in the
riffles, and the doors to public service, are open at last to all
Americans regardless of their color.

Schools and school children all over America tonight are receiving
Federal assistance to go to good schools.

Preschool education--Head Start--is already here to stay and, I think,
so are the Federal programs that tonight are keeping more than a million
and a half of the cream of our young people in the colleges and the
universities of this country.

Part of the American earth--not only in description on a map, but in the
reality of our shores, our hills, our parks, our forests, and our
mountains--has been permanently set aside for the American public and
for their benefit. And there is more that will be set aside before this
administration ends.

Five million Americans have been trained for jobs in new Federal
programs.

I think it is most important that we all realize tonight that this
Nation is close to full employment--with less unemployment than we have
had at any time in almost 20 years. That is not in theory; that is in
fact. Tonight, the unemployment rate is down to 3.3 percent. The number
of jobs has grown more than 8 1/2 million in the last 5 years. That is
more than in all the preceding 12 years.

These achievements completed the full cycle, from idea to enactment and,
finally, to a place in the lives of citizens all across this country.

I wish it were possible to say that everything that this Congress and
the administration achieved during this period had already completed
that cycle. But a great deal of what we have committed needs additional
funding to become a tangible realization.

Yet the very existence of these commitments--these promises to the
American people, made by this Congress and by the executive branch of
the Government--are achievements in themselves, and failure to carry
through on our commitments would be a tragedy for this Nation.

This much is certain: No one man or group of men made these commitments
alone. Congress and the executive branch, with their checks and
balances, reasoned together and finally wrote them into the law of the
land. They now have all the moral force that the American political
system can summon when it acts as one.

They express America's common determination to achieve goals. They imply
action.

In most cases, you have already begun that action--but it is not fully
completed, of course.

Let me speak for a moment about these commitments. I am going to speak
in the language which the Congress itself spoke when it passed these
measures. I am going to quote from your words.

In 1966, Congress declared that "improving the quality of urban life is
the most critical domestic problem facing the United States." Two years
later it affirmed the historic goal of "a decent home . . . for every
American family." That is your language.

Now to meet these commitments, we must increase our support for the
model cities program, where blueprints of change are already being
prepared in more than 150 American cities.

To achieve the goals of the Housing Act of 1968 that you have already
passed, we should begin this year more than 500,000 homes for needy
families in the coming fiscal year. Funds are provided in the new budget
to do just this. This is almost 10 times--10 times--the average rate of
the past 10 years.

Our cities and our towns are being pressed for funds to meet the needs
of their growing populations. So I believe an urban development bank
should be created by the Congress. This bank could obtain resources
through the issuance of taxable bonds and it could then lend these
resources at reduced rates to the communities throughout the land for
schools, hospitals, parks, and other public facilities.

Since we enacted the Social Security Act back in 1935, Congress has
recognized the necessity to "make more adequate provision for aged
persons . . . through maternal and child welfare . . . and public
health." Those are the words of the Congress--"more adequate."

The time has come, I think, to make it more adequate. I believe we
should increase social security benefits, and I am so recommending
tonight.

I am suggesting that there should be an overall increase in benefits of
at least 13 percent. Those who receive only the minimum of $55 should
get $80 a month.

Our Nation, too, is rightfully proud of our medical advances. But we
should remember that our country ranks 15th among the nations of the
world in its infant mortality rate.

I think we should assure decent medical care for every expectant mother
and for their children during the first year of their life in the United
States of America.

I think we should protect our children and their families from the costs
of catastrophic illness.

As we pass on from medicine, I think nothing is clearer to the Congress
than the commitment that the Congress made to end poverty. Congress
expressed it well, I think, in 1964, when they said: "It is the policy
of the United States to eliminate the paradox of poverty in the midst of
plenty in this nation."

This is the richest nation in the world. The antipoverty program has had
many achievements. It also has some failures. But we must not cripple it
after only 3 years of trying to solve the human problems that have been
with us and have been building up among us for generations.

I believe the Congress this year will want to improve the administration
of the poverty program by reorganizing portions of it and transferring
them to other agencies. I believe, though, it will want to continue,
until we have broken the back of poverty, the efforts we are now making
throughout this land.

I believe, and I hope the next administration--I believe they
believe--that the key to success in this effort is jobs. It is work for
people who want to work.

In the budget for fiscal 1970, I shall recommend a total of $3.5 billion
for our job training program, and that is five times as much as we spent
in 1964 trying to prepare Americans where they can work to earn their
own living.

The Nation's commitment in the field of civil rights began with the
Declaration of Independence. They were extended by the 13th, 14th, and
15th amendments. They have been powerfully strengthened by the enactment
of three far-reaching civil rights laws within the past 5 years, that
this Congress, in its wisdom, passed.

On January 1 of this year, the Fair Housing Act of 1968 covered over 20
million American homes and apartments. The prohibition against racial
discrimination in that act should be remembered and it should be
vigorously enforced throughout this land.

I believe we should also extend the vital provisions of the Voting
Rights Act for another 5 years.

In the Safe Streets Act of 1968, Congress determined "To assist state
and local governments in reducing the incidence of crime."

This year I am proposing that the Congress provide the full $300 million
that the Congress last year authorized to do just that.

I hope the Congress will put the money where the authorization is.

I believe this is an essential contribution to justice and to public
order in the United States. I hope these grants can be made to the
States and they can be used effectively to reduce the crime rate in this
country.

But all of this is only a small part of the total effort that must be
made--I think chiefly by the local governments throughout the Nation--if
we expect to reduce the toll of crime that we all detest.

Frankly, as I leave the Office of the Presidency, one of my greatest
disappointments is our failure to secure passage of a licensing and
registration act for firearms. I think if we had passed that act, it
would have reduced the incidence of crime. I believe that the Congress
should adopt such a law, and I hope that it will at a not too distant
date.

In order to meet our long-standing commitment to make government as
efficient as possible, I believe that we should reorganize our postal
system along the lines of the Kappel[1] report.

[Footnote 1: Frederick R. Kappel, Chairman of the Commission on
Executive, Legislative and Judicial Salaries.]

I hope we can all agree that public service should never impose an
unreasonable financial sacrifice on able men and women who want to serve
their country.

I believe that the recommendations of the Commission on Executive,
Legislative and Judicial Salaries are generally sound. Later this week,
I shall submit a special message which I reviewed with the leadership
this evening containing a proposal that has been reduced and has
modified the Commission's recommendation to some extent on the
congressional salaries.

For Members of Congress, I will recommend the basic compensation not of
the $50,000 unanimously recommended by the Kappel Commission and the
other distinguished Members, but I shall reduce that $50,000 to $42,500.
I will suggest that Congress appropriate a very small additional
allowance for official expenses, so that Members will not be required to
use their salary increase for essential official business.

I would have submitted the Commission's recommendations, except the
advice that I received from the leadership--and you usually are
consulted about matters that affect the Congress--was that the Congress
would not accept the $50,000 recommendation, and if I expected my
recommendation to be seriously considered, I should make substantial
reductions. That is the only reason I didn't go along with the Kappel
report.

In 1967 I recommended to the Congress a fair and impartial random
selection system for the draft. I submit it again tonight for your most
respectful consideration.

I know that all of us recognize that most of the things we do to meet
all of these commitments I talk about will cost money. If we maintain
the strong rate of growth that we have had in this country for the past
8 years, I think we shall generate the resources that we need to meet
these commitments.

We have already been able to increase our support for major social
programs--although we have heard a lot about not being able to do
anything on the home front because of Vietnam; but we have been able in
the last 5 years to increase our commitments for such things as health
and education from $30 billion in 1964 to $68 billion in the coming
fiscal year. That is more than double. That is more than it has ever
been increased in the 188 years of this Republic, notwithstanding
Vietnam.

We must continue to budget our resources and budget them responsibly in
a way that will preserve our prosperity and will strengthen our dollar.

Greater revenues and the reduced Federal spending required by Congress
last year have changed the budgetary picture dramatically since last
January when we made our estimates. At that time, you will remember that
we estimated we would have a deficit of $8 billion. Well, I am glad to
report to you tonight that the fiscal year ending June 30, 1969, this
June, we are going to have not a deficit, but we are going to have a
$2.4 billion surplus.

You will receive the budget tomorrow. The budget for the next fiscal
year, that begins July 1--which you will want to examine very carefully
in the days ahead--will provide a $3.4 billion surplus.

This budget anticipates the extension of the surtax that Congress
enacted last year. I have communicated with the President-elect, Mr.
Nixon, in connection with this policy of continuing the surtax for the
time being.

I want to tell you that both of us want to see it removed just as soon
as circumstances will permit, but the President-elect has told me that
he has concluded that until his administration, and this Congress, can
examine the appropriation bills, and each item in the budget, and can
ascertain that the facts justify permitting the surtax to expire or to
be reduced, he, Mr. Nixon, will support my recommendation that the
surtax be continued.

Americans, I believe, are united in the hope that the Paris talks will
bring an early peace to Vietnam. And if our hopes for an early
settlement of the war are realized, then our military expenditures can
be reduced and very substantial savings can be made to be used for other
desirable purposes, as the Congress may determine.

In any event, I think it is imperative that we do all that we
responsibly can to resist inflation while maintaining our prosperity. I
think all Americans know that our prosperity is broad and it is deep,
and it has brought record profits, the highest in our history, and
record wages.

Our gross national product has grown more in the last 5 years than any
other period in our Nation's history. Our wages have been the highest.
Our profits have been the best. This prosperity has enabled millions to
escape the poverty that they would have otherwise had the last few
years.

I think also you will be very glad to hear that the Secretary of the
Treasury informs me tonight that in 1968 in our balance of payments we
have achieved a surplus. It appears that we have, in fact, done better
this year than we have done in any year in this regard since the year
1957.

The quest for a durable peace, I think, has absorbed every
administration since the end of World War II. It has required us to seek
a limitation of arms races not only among the superpowers, but among the
smaller nations as well. We have joined in the test ban treaty of 1963,
the outer space treaty of 1967, and the treaty against the spread of
nuclear weapons in 1968.

This latter agreement--the nonproliferation treaty--is now pending in
the Senate and it has been pending there since last July. In my opinion,
delay in ratifying it is not going to be helpful to the cause of peace.
America took the lead in negotiating this treaty and America should now
take steps to have it approved at the earliest possible date.

Until a way can be found to scale down the level of arms among the
superpowers, mankind cannot view the future without fear and great
apprehension. So, I believe that we should resume the talks with the
Soviet Union about limiting offensive and defensive missile systems. I
think they would already have been resumed except for Czechoslovakia and
our election this year.

It was more than 20 years ago that we embarked on a program of trying to
aid the developing nations. We knew then that we could not live in good
conscience as a rich enclave on an earth that was seething in misery.

During these years there have been great advances made under our
program, particularly against want and hunger, although we are
disappointed at the appropriations last year. We thought they were
woefully inadequate. This year I am asking for adequate funds for
economic assistance in the hope that we can further peace throughout the
world.

I think we must continue to support efforts in regional cooperation.
Among those efforts, that of Western Europe has a very special place in
America's concern.

The only course that is going to permit Europe to play the great world
role that its resources permit is to go forward to unity. I think
America remains ready to work with a united Europe, to work as a partner
on the basis of equality.

For the future, the quest for peace, I believe, requires:

--that we maintain the liberal trade policies that have helped us become
the leading nation in world trade,

--that we strengthen the international monetary system as an instrument
of world prosperity, and

--that we seek areas of agreement with the Soviet Union where the
interests of both nations and the interests of world peace are properly
served.

The strained relationship between us and the world's leading Communist
power has not ended--especially in the light of the brutal invasion of
Czechoslovakia. But totalitarianism is no less odious to us because we
are able to reach some accommodation that reduces the danger of world
catastrophe.

What we do, we do in the interest of peace in the world. We earnestly
hope that time will bring a Russia that is less afraid of diversity and
individual freedom.

The quest for peace tonight continues in Vietnam, and in the Paris
talks.

I regret more than any of you know that it has not been possible to
restore peace to South Vietnam.

The prospects, I think, for peace are better today than at any time
since North Vietnam began its invasion with its regular forces more than
4 years ago.

The free nations of Asia know what they were not sure of at that time:
that America cares about their freedom, and it also cares about
America's own vital interests in Asia and throughout the Pacific.

The North Vietnamese know that they cannot achieve their aggressive
purposes by force. There may be hard fighting before a settlement is
reached; but, I can assure you, it will yield no victory to the
Communist cause.

I cannot speak to you tonight about Vietnam without paying a very
personal tribute to the men who have carried the battle out there for
all of us. I have been honored to be their Commander in Chief. The
Nation owes them its unstinting support while the battle continues--and
its enduring gratitude when their service is done.

Finally, the quest for stable peace in the Middle East goes on in many
capitals tonight. America fully supports the unanimous resolution of the
U.N. Security Council which points the way. There must be a settlement
of the armed hostility that exists in that region of the world today. It
is a threat not only to Israel and to all the Arab States, but it is a
threat to every one of us and to the entire world as well.

Now, my friends in Congress, I want to conclude with a few very personal
words to you.

I rejected and rejected and then finally accepted the congressional
leadership's invitation to come here to speak this farewell to you in
person tonight.

I did that for two reasons. One was philosophical. I wanted to give you
my judgment, as I saw it, on some of the issues before our Nation, as I
view them, before I leave.

The other was just pure sentimental. Most all of my life as a public
official has been spent here in this building. For 38 years--since I
worked on that gallery as a doorkeeper in the House of
Representatives--I have known these halls, and I have known most of the
men pretty well who walked them.

I know the questions that you face. I know the conflicts that you
endure. I know the ideals that you seek to serve.

I left here first to become Vice President, and then to become, in a
moment of tragedy, the President of the United States.

My term of office has been marked by a series of challenges, both at
home and throughout the world.

In meeting some of these challenges, the Nation has found a new
confidence. In meeting others, it knew turbulence and doubt, and fear
and hate.

Throughout this time, I have been sustained by my faith in
representative democracy--a faith that I had learned here in this
Capitol Building as an employee and as a Congressman and as a Senator.

I believe deeply in the ultimate purposes of this Nation--described by
the Constitution, tempered by history, embodied in progressive laws, and
given life by men and women that have been elected to serve their fellow
citizens.

Now for 5 most demanding years in the White House, I have been
strengthened by the counsel and the cooperation of two great former
Presidents, Harry S. Truman and Dwight David Eisenhower. I have been
guided by the memory of my pleasant and close association with the
beloved John F. Kennedy, and with our greatest modern legislator,
Speaker Sam Rayburn.

I have been assisted by my friend every step of the way, Vice President
Hubert Humphrey. I am so grateful that I have been supported daily by
the loyalty of Speaker McCormack and Majority Leader Albert.

I have benefited from the wisdom of Senator Mike Mansfield, and I am
sure that I have avoided many dangerous pitfalls by the good commonsense
counsel of the President Pro Tem of the Senate, Senator Richard Brevard
Russell.

I have received the most generous cooperation from the leaders of the
Republican Party in the Congress of the United States, Senator Dirksen
and Congressman Gerald Ford, the Minority Leader.

No President should ask for more, although I did upon occasions. But few
Presidents have ever been blessed with so much.

President-elect Nixon, in the days ahead, is going to need your
understanding, just as I did. And he is entitled to have it. I hope
every Member will remember that the burdens he will bear as our
President, will be borne for all of us. Each of us should try not to
increase these burdens for the sake of narrow personal or partisan
advantage.

Now, it is time to leave. I hope it may be said, a hundred years from
now, that by working together we helped to make our country more just,
more just for all of its people, as well as to insure and guarantee the
blessings of liberty for all of our posterity.

That is what I hope. But I believe that at least it will be said that we
tried.

***

State of the Union Address
Richard Nixon
January 22, 1970

Mr. Speaker, Mr. President, my colleagues in the Congress, our
distinguished guests and my fellow Americans:

To address a joint session of the Congress in this great Chamber in
which I was once privileged to serve is an honor for which I am deeply
grateful.

The State of the Union Address is traditionally an occasion for a
lengthy and detailed account by the President of what he has
accomplished in the past, what he wants the Congress to do in the
future, and, in an election year, to lay the basis for the political
issues which might be decisive in the fall.

Occasionally there comes a time when profound and far-reaching events
command a break with tradition. This is such a time.

I say this not only because 1970 marks the beginning of a new decade in
which America will celebrate its 200th birthday. I say it because new
knowledge and hard experience argue persuasively that both our programs
and our institutions in America need to be reformed.

The moment has arrived to harness the vast energies and abundance of
this land to the creation of a new American experience, an experience
richer and deeper and more truly a reflection of the goodness and grace
of the human spirit.

The seventies will be a time of new beginnings, a time of exploring both
on the earth and in the heavens, a time of discovery. But the time has
also come for emphasis on developing better ways of managing what we
have and of completing what man's genius has begun but left unfinished.

Our land, this land that is ours together, is a great and a good land.
It is also an unfinished land, and the challenge of perfecting it is the
summons of the seventies.

It is in that spirit that I address myself to those great issues facing
our Nation which are above partisanship.

When we speak of America's priorities the first priority must always be
peace for America and the world.

The major immediate goal of our foreign policy is to bring an end to the
war in Vietnam in a way that our generation will be remembered not so
much as the generation that suffered in war, but more for the fact that
we had the courage and character to win the kind of a just peace that
the next generation was able to keep.

We are making progress toward that goal.

The prospects for peace are far greater today than they were a year ago.

A major part of the credit for this development goes to the Members of
this Congress who, despite their differences on the conduct of the war,
have overwhelmingly indicated their support of a just peace. By this
action, you have completely demolished the enemy's hopes that they can
gain in Washington the victory our fighting men have denied them in
Vietnam.

No goal could be greater than to make the next generation the first in
this century in which America was at peace with every nation in the
world.

I shall discuss in detail the new concepts and programs designed to
achieve this goal in a separate report on foreign policy, which I shall
submit to the Congress at a later date.

Today, let me describe the directions of our new policies.

We have based our policies on an evaluation of the world as it is, not
as it was 25 years ago at the conclusion of World War II. Many of the
policies which were necessary and right then are obsolete today.

Then, because of America's overwhelming military and economic strength,
because of the weakness of other major free world powers and the
inability of scores of newly independent nations to defend, or even
govern, themselves, America had to assume the major burden for the
defense of freedom in the world.

In two wars, first in Korea and now in Vietnam, we furnished most of the
money, most of the arms, most of the men to help other nations defend
their freedom.

Today the great industrial nations of Europe, as well as Japan, have
regained their economic strength; and the nations of Latin America--and
many of the nations who acquired their freedom from colonialism after
World War II in Asia and Africa--have a new sense of pride and dignity
and a determination to assume the responsibility for their own defense.

That is the basis of the doctrine I announced at Guam.

Neither the defense nor the development of other nations can be
exclusively or primarily an American undertaking.

The nations of each part of the world should assume the primary
responsibility for their own well-being; and they themselves should
determine the terms of that well-being.

We shall be faithful to our treaty commitments, but we shall reduce our
involvement and our presence in other nations' affairs.

To insist that other nations play a role is not a retreat from
responsibility; it is a sharing of responsibility.

The result of this new policy has been not to weaken our alliances, but
to give them new life, new strength, a new sense of common purpose.

Relations with our European allies are once again strong and healthy,
based on mutual consultation and mutual responsibility.

We have initiated a new approach to Latin America in which we deal with
those nations as partners rather than patrons.

The new partnership concept has been welcomed in Asia. We have developed
an historic new basis for Japanese-American friendship and cooperation,
which is the linchpin for peace in the Pacific.

If we are to have peace in the last third of the century, a major factor
will be the development of a new relationship between the United States
and the Soviet Union.

I would not underestimate our differences, but we are moving with
precision and purpose from an era of confrontation to an era of
negotiation.

Our negotiations on strategic arms limitations and in other areas will
have far greater chance for success if both sides enter them motivated
by mutual self-interest rather than naive sentimentality.

It is with this same spirit that we have resumed discussions with
Communist China in our talks at Warsaw.

Our concern in our relations with both these nations is to avoid a
catastrophic collision and to build a solid basis for peaceful
settlement of our differences.

I would be the last to suggest that the road to peace is not difficult
and dangerous, but I believe our new policies have contributed to the
prospect that America may have the best chance since World War II to
enjoy a generation of uninterrupted peace. And that chance will be
enormously increased if we continue to have a relationship between
Congress and the Executive in which, despite differences in detail,
where the security of America and the peace of mankind are concerned, we
act not as Republicans, not as Democrats, but as Americans.

As we move into the decade of the seventies, we have the greatest
opportunity for progress at home of any people in world history.

Our gross national product will increase by $500 billion in the next 10
years. This increase alone is greater than the entire growth of the
American economy from 1790 to 1950.

The critical question is not whether we will grow, but how we will use
that growth.

The decade of the sixties was also a period of great growth
economically. But in that same 10-year period we witnessed the greatest
growth of crime, the greatest increase in inflation, the greatest social
unrest in America in 100 years. Never has a nation seemed to have had
more and enjoyed it less.

At heart, the issue is the effectiveness of government.

Ours has become--as it continues to be, and should remain--a society of
large expectations. Government helped to generate these expectations. It
undertook to meet them. Yet, increasingly, it proved unable to do so.

As a people, we had too many visions--and too little vision.

Now, as we enter the seventies, we should enter also a great age of
reform of the institutions of American government.

Our purpose in this period should not be simply better management of the
programs of the past. The time has come for a new quest--a quest not for
a greater quantity of what we have, but for a new quality of life in
America.

A major part of the substance for an unprecedented advance in this
Nation's approach to its problems and opportunities is contained in more
than two score legislative proposals which I sent to the Congress last
year and which still await enactment.

I will offer at least a dozen more major programs in the course of this
session.

At this point I do not intend to go through a detailed listing of what I
have proposed or will propose, but I would like to mention three areas
in which urgent priorities demand that we move and move now:

First, we cannot delay longer in accomplishing a total reform of our
welfare system. When a system penalizes work, breaks up homes, robs
recipients of dignity, there is no alternative to abolishing that system
and adopting in its place the program of income support, job training,
and work incentives which I recommended to the Congress last year.

Second, the time has come to assess and reform all of our institutions
of government at the Federal, State, and local level. It is time for a
New Federalism, in which, after 190 years of power flowing from the
people and local and State governments to Washington, D.C., it will
begin to flow from Washington back to the States and to the people of
the United States.

Third, we must adopt reforms which will expand the range of
opportunities for all Americans. We can fulfill the American dream only
when each person has a fair chance to fulfill his own dreams. This means
equal voting rights, equal employment opportunity, and new opportunities
for expanded ownership. Because in order to be secure in their human
rights, people need access to property rights.

I could give similar examples of the need for reform in our programs for
health, education, housing, transportation, as well as other critical
areas which directly affect the well-being of millions of Americans.

The people of the United States should wait no longer for these reforms
that would so deeply enhance the quality of their life.

When I speak of actions which would be beneficial to the American
people, I can think of none more important than for the Congress to join
this administration in the battle to stop the rise in the cost of
living.

Now, I realize it is tempting to blame someone else for inflation. Some
blame business for raising prices. Some blame unions for asking for more
wages.

But a review of the stark fiscal facts of the 1960's clearly
demonstrates where the primary blame for rising prices must be placed.

In the decade of the sixties the Federal Government spent $57 billion
more than it took in in taxes.

In that same decade the American people paid the bill for that deficit
in price increases which raised the cost of living for the average
family of four by $200 per month in America.

Now millions of Americans are forced to go into debt today because the
Federal Government decided to go into debt yesterday. We must balance
our Federal budget so that American families will have a better chance
to balance their family budgets.

Only with the cooperation of the Congress can we meet this highest
priority objective of responsible government. We are on the right track.

We had a balanced budget in 1969. This administration cut more than $7
billion out of spending plans in order to produce a surplus in 1970, and
in spite of the fact that Congress reduced revenues by $3 billion, I
shall recommend a balanced budget for 1971.

But I can assure you that not only to present, but to stay within, a
balanced budget requires some very hard decisions. It means rejecting
spending programs which would benefit some of the people when their net
effect would result in price increases for all the people.

It is time to quit putting good money into bad programs. Otherwise, we
will end up with bad money and bad programs.

I recognize the political popularity of spending programs, and
particularly in an election year. But unless we stop the rise in prices,
the cost of living for millions of American families will become
unbearable and government's ability to plan programs for progress for
the future will become impossible.

In referring to budget cuts, there is one area where I have ordered an
increase rather than a cut--and that is the requests of those agencies
with the responsibilities for law enforcement.

We have heard a great deal of overblown rhetoric during the sixties in
which the word "war" has perhaps too often been used--the war on
poverty, the war on misery, the war on disease, the war on hunger. But
if there is one area where the word "war" is appropriate it is in the
fight against crime. We must declare and win the war against the
criminal elements which increasingly threaten our cities, our homes, and
our lives.

We have a tragic example of this problem in the Nation's Capital, for
whose safety the Congress and the Executive have the primary
responsibility. I doubt if many Members of this Congress who live more
than a few blocks from here would dare leave their cars in the Capitol
garage and walk home alone tonight.

Last year this administration sent to the Congress 13 separate pieces of
legislation dealing with organized crime, pornography, street crime,
narcotics, crime in the District of Columbia.

None of these bills has reached my desk for signature.

I am confident that the Congress will act now to adopt the legislation I
placed before you last year. We in the Executive have done everything we
can under existing law, but new and stronger weapons are needed in that
fight.

While it is true that State and local law enforcement agencies are the
cutting edge in the effort to eliminate street crime, burglaries,
murder, my proposals to you have embodied my belief that the Federal
Government should play a greater role in working in partnership with
these agencies.

That is why 1971 Federal spending for local law enforcement will double
that budgeted for 1970.

The primary responsibility for crimes that affect individuals is with
local and State rather than with Federal Government. But in the field of
organized crime, narcotics, pornography, the Federal Government has a
special responsibility it should fulfill. And we should make Washington,
D.C., where we have the primary responsibility, an example to the Nation
and the world of respect for law rather than lawlessness.

I now turn to a subject which, next to our desire for peace, may well
become the major concern of the American people in the decade of the
seventies.

In the next 10 years we shall increase our wealth by 50 percent. The
profound question is: Does this mean we will be 50 percent richer in a
real sense, 50 percent better off, 50 percent happier?

Or does it mean that in the year 1980 the President standing in this
place will look back on a decade in which 70 percent of our people lived
in metropolitan areas choked by traffic, suffocated by smog, poisoned by
water, deafened by noise, and terrorized by crime?

These are not the great questions that concern world leaders at summit
conferences. But people do not live at the summit. They live in the
foothills of everyday experience, and it is time for all of us to
concern ourselves with the way real people live in real life.

The great question of the seventies is, shall we surrender to our
surroundings, or shall we make our peace with nature and begin to make
reparations for the damage we have done to our air, to our land, and to
our water?

Restoring nature to its natural state is a cause beyond party and beyond
factions. It has become a common cause of all the people of this
country. It is a cause of particular concern to young Americans, because
they more than we will reap the grim consequences of our failure to act
on programs which are needed now if we are to prevent disaster later.

Clean air, clean water, open spaces--these should once again be the
birthright of every American. If we act now, they can be.

We still think of air as free. But clean air is not free, and neither is
clean water. The price tag on pollution control is high. Through our
years of past carelessness we incurred a debt to nature, and now that
debt is being called.

The program I shall propose to Congress will be the most comprehensive
and costly program in this field in America's history.

It is not a program for just one year. A year's plan in this field is no
plan at all. This is a time to look ahead not a year, but 5 years or 10
years--whatever time is required to do the job.

I shall propose to this Congress a $10 billion nationwide clean waters
program to put modern municipal waste treatment plants in every place in
America where they are needed to make our waters clean again, and do it
now. We have the industrial capacity, if we begin now, to build them all
within 5 years. This program will get them built within 5 years.

As our cities and suburbs relentlessly expand, those priceless open
spaces needed for recreation areas accessible to their people are
swallowed up--often forever. Unless we preserve these spaces while they
are still available, we will have none to preserve. Therefore, I shall
propose new financing methods for purchasing open space and parklands
now, before they are lost to us.

The automobile is our worst polluter of the air. Adequate control
requires further advances in engine design and fuel composition. We
shall intensify our research, set increasingly strict standards, and
strengthen enforcement procedures--and we shall do it now.

We can no longer afford to consider air and water common property, free
to be abused by anyone without regard to the consequences. Instead, we
should begin now to treat them as scarce resources, which we are no more
free to contaminate than we are free to throw garbage into our
neighbor's yard.

This requires comprehensive new regulations. It also requires that, to
the extent possible, the price of goods should be made to include the
costs of producing and disposing of them without damage to the
environment.

Now, I realize that the argument is often made that there is a
fundamental contradiction between economic growth and the quality of
life, so that to have one we must forsake the other.

The answer is not to abandon growth, but to redirect it. For example, we
should turn toward ending congestion and eliminating smog the same
reservoir of inventive genius that created them in the first place.

Continued vigorous economic growth provides us with the means to enrich
life itself and to enhance our planet as a place hospitable to man.

Each individual must enlist in this fight if it is to be won.

It has been said that no matter how many national parks and historical
monuments we buy and develop, the truly significant environment for each
of us is that in which we spend 80 percent of our time--in our homes, in
our places of work, the streets over which we travel.

Street litter, rundown parking strips and yards, dilapidated fences,
broken windows, smoking automobiles, dingy working places, all should be
the object of our fresh view.

We have been too tolerant of our surroundings and too willing to leave
it to others to clean up our environment. It is time for those who make
massive demands on society to make some minimal demands on themselves.
Each of us must resolve that each day he will leave his home, his
property, the public places of the city or town a little cleaner, a
little better, a little more pleasant for himself and those around him.

With the help of people we can do anything, and without their help, we
can do nothing. In this spirit, together, we can reclaim our land for
ours and generations to come.

Between now and the year 2000, over 100 million children will be born in
the United States. Where they grow up--and how--will, more than any one
thing, measure the quality of American life in these years ahead.

This should be a warning to us.

For the past 30 years our population has also been growing and shifting.
The result is exemplified in the vast areas of rural America emptying
out of people and of promise--a third of our counties lost population in
the sixties.

The violent and decayed central cities of our great metropolitan
complexes are the most conspicuous area of failure in American life
today.

I propose that before these problems become insoluble, the Nation
develop a national growth policy.

In the future, government decisions as to where to build highways,
locate airports, acquire land, or sell land should be made with a clear
objective of aiding a balanced growth for America.

In particular, the Federal Government must be in a position to assist in
the building of new cities and the rebuilding of old ones.

At the same time, we will carry our concern with the quality of life in
America to the farm as well as the suburb, to the village as well as to
the city. What rural America needs most is a new kind of assistance. It
needs to be dealt with, not as a separate nation, but as part of an
overall growth policy for America. We must create a new rural
environment which will not only stem the migration to urban centers, but
reverse it. If we seize our growth as a challenge, we can make the
1970's an historic period when by conscious choice we transformed our
land into what we want it to become.

America, which has pioneered in the new abundance, and in the new
technology, is called upon today to pioneer in meeting the concerns
which have followed in their wake--in turning the wonders of science to
the service of man.

In the majesty of this great Chamber we hear the echoes of America's
history, of debates that rocked the Union and those that repaired it, of
the summons to war and the search for peace, of the uniting of the
people, the building of a nation.

Those echoes of history remind us of our roots and our strengths.

They remind us also of that special genius of American democracy, which
at one critical turning point after another has led us to spot the new
road to the future and given us the wisdom and the courage to take it.

As I look down that new road which I have tried to map out today, I see
a new America as we celebrate our 200th anniversary 6 years from now.

I see an America in which we have abolished hunger, provided the means
for every family in the Nation to obtain a minimum income, made enormous
progress in providing better housing, faster transportation, improved
health, and superior education.

I see an America in which we have checked inflation, and waged a winning
war against crime.

I see an America in which we have made great strides in stopping the
pollution of our air, cleaning up our water, opening up our parks,
continuing to explore in space.

Most important, I see an America at peace with all the nations of the
world.

This is not an impossible dream. These goals are all within our reach.

In times past, our forefathers had the vision but not the means to
achieve such goals.

Let it not be recorded that we were the first American generation that
had the means but not the vision to make this dream come true.

But let us, above all, recognize a fundamental truth. We can be the best
clothed, best fed, best housed people in the world, enjoying clean air,
clean water, beautiful parks, but we could still be the unhappiest
people in the world without an indefinable spirit--the lift of a driving
dream which has made America, from its beginning, the hope of the world.

Two hundred years ago this was a new nation of 3 million people, weak
militarily, poor economically. But America meant something to the world
then which could not be measured in dollars, something far more
important than military might.

Listen to President Thomas Jefferson in 1802: We act not "for ourselves
alone, but for the whole human race."

We had a spiritual quality then which caught the imagination of millions
of people in the world.

Today, when we are the richest and strongest nation in the world, let it
not be recorded that we lack the moral and spiritual idealism which made
us the hope of the world at the time of our birth.

The demands of us in 1976 are even greater than in 1776.

It is no longer enough to live and let live. Now we must live and help
live.

We need a fresh climate in America, one in which a person can breathe
freely and breathe in freedom.

Our recognition of the truth that wealth and happiness are not the same
thing requires us to measure success or failure by new criteria.

Even more than the programs I have described today, what this Nation
needs is an example from its elected leaders in providing the spiritual
and moral leadership which no programs for material progress can
satisfy.

Above all, let us inspire young Americans with a sense of excitement, a
sense of destiny, a sense of involvement, in meeting the challenges we
face in this great period of our history. Only then are they going to
have any sense of satisfaction in their lives.

The greatest privilege an individual can have is to serve in a cause
bigger than himself. We have such a cause.

How we seize the opportunities I have described today will determine not
only our future, but the future of peace and freedom in this world in
the last third of the century.

May God give us the wisdom, the strength and, above all, the idealism to
be worthy of that challenge, so that America can fulfill its destiny of
being the world's best hope for liberty, for opportunity, for progress
and peace for all peoples.

***

State of the Union Address
Richard Nixon
January 22, 1971

Mr. Speaker, Mr. President, my colleagues in the Congress, our
distinguished guests, my fellow Americans:

As this 92d Congress begins its session, America has lost a great
Senator, and all of us who had the privilege to know him have lost a
loyal friend. I had the privilege of visiting Senator Russell in the
hospital just a few days before he died. He never spoke about himself.
He only spoke eloquently about the need for a strong national defense.
In tribute to one of the most magnificent Americans of all time, I
respectfully ask that all those here will rise in silent prayer for
Senator Russell.

Thank you.

Mr. Speaker, before I begin my formal address, I want to use this
opportunity to congratulate all of those who were winners in the rather
spirited contest for leadership positions in the House and the Senate
and, also, to express my condolences to the losers. I know how both of
you feel.

And I particularly want to join with all of the Members of the House and
the Senate as well in congratulating the new Speaker of the United
States Congress.

To those new Members of this House who may have some doubts about the
possibilities for advancement in the years ahead, I would remind you
that the Speaker and I met just 24 years ago in this Chamber as freshmen
Members of the 80th Congress. As you see, we both have come up in the
world a bit since then.

Mr. Speaker, this 92d Congress has a chance to be recorded as the
greatest Congress in America's history.

In these troubled years just past, America has been going through a long
nightmare of war and division, of crime and inflation. Even more deeply,
we have gone through a long, dark night of the American spirit. But now
that night is ending. Now we must let our spirits soar again. Now we are
ready for the lift of a driving dream.

The people of this Nation are eager to get on with the quest for new
greatness. They see challenges, and they are prepared to meet those
challenges. It is for us here to open the doors that will set free again
the real greatness of this Nation--the genius of the American people.

How shall we meet this challenge? How can we truly open the doors, and
set free the full genius of our people?

The way in which the 92d Congress answers these questions will determine
its place in history. More importantly, it can determine this Nation's
place in history as we enter the third century of our independence.

Tonight I shall present to the Congress six great goals. I shall ask not
simply for more new programs in the old framework. I shall ask to change
the framework of government itself---to reform the entire structure of
American government so we can make it again fully responsive to the
needs and the wishes of the American people.

If we act boldly--if we seize this moment and achieve these goals--we
can close the gap between promise and performance in American
government. We can bring together the resources of this Nation and the
spirit of the American people.

In discussing these great goals, I shall deal tonight only with matters
on the domestic side of the Nation's agenda. I shall make a separate
report to the Congress and the Nation next month on developments in
foreign policy.

The first of these great goals is already before the Congress.

I urge that the unfinished business of the 91st Congress be made the
first priority business of the 92d Congress.

Over the next 2 weeks, I will call upon Congress to take action on more
than 35 pieces of proposed legislation on which action was not completed
last year.

The most important is welfare reform.

The present welfare system has become a monstrous, consuming outrage--an
outrage against the community, against the taxpayer, and particularly
against the children it is supposed to help.

We may honestly disagree, as we do, on what to do about it. But we can
all agree that we must meet the challenge, not by pouring more money
into a bad program, but by abolishing the present welfare system and
adopting a new one.

So let us place a floor under the income of every family with children
in America--and without those demeaning, soul-stifling affronts to human
dignity that so blight the lives of welfare children today. But let us
also establish an effective work incentive and an effective work
requirement.

Let us provide the means by which more can help themselves. This shall
be our goal.

Let us generously help those who are not able to help themselves. But
let us stop helping those who are able to help themselves but refuse to
do so.

The second great goal is to achieve what Americans have not enjoyed
since 1957--full prosperity in peacetime.

The tide of inflation has turned. The rise in the cost of living, which
had been gathering dangerous momentum in the late sixties, was reduced
last year. Inflation will be further reduced this year.

But as we have moved from runaway inflation toward reasonable price
stability and at the same time as we have been moving from a wartime
economy to a peacetime economy, we have paid a price in increased
unemployment.

We should take no comfort from the fact that the level of unemployment
in this transition from a wartime to a peacetime economy is lower than
in any peacetime year of the sixties.

This is not good enough for the man who is unemployed in the seventies.
We must do better for workers in peacetime and we will do better.

To achieve this, I will submit an expansionary budget this year--one
that will help stimulate the economy and thereby open up new job
opportunities for millions of Americans.

It will be a full employment budget, a budget designed to be in balance
if the economy were operating at its peak potential. By spending as if
we were at full employment, we will help to bring about full employment.

I ask the Congress to accept these expansionary policies--to accept the
concept of a full employment budget. At the same time, I ask the
Congress to cooperate in resisting expenditures that go beyond the
limits of the full employment budget. For as we wage a campaign to bring
about a widely shared prosperity, we must not reignite the fires of
inflation and so undermine that prosperity.

With the stimulus and the discipline of a full employment budget, with
the commitment of the independent Federal Reserve System to provide
fully for the monetary needs of a growing economy, and with a much
greater effort on the part of labor and management to make their wage
and price decisions in the light of the national interest and their own
self-interest--then for the worker, the farmer, the consumer, for
Americans everywhere we shall gain the goal of a new prosperity: more
jobs, more income, more profits, without inflation and without war.

This is a great goal, and one that we can achieve together.

The third great goal is to continue the effort so dramatically begun
last year: to restore and enhance our natural environment.

Building on the foundation laid in the 37-point program that I submitted
to Congress last year, I will propose a strong new set of initiatives to
clean up our air and water, to combat noise, and to preserve and restore
our surroundings.

I will propose programs to make better use of our land, to encourage a
balanced national growth--growth that will revitalize our rural
heartland and enhance the quality of life in America.

And not only to meet today's needs but to anticipate those of tomorrow,
I will put forward the most extensive program ever proposed by a
President of the United States to expand the Nation's parks, recreation
areas, open spaces, in a way that truly brings parks to the people where
the people are. For only if we leave a legacy of parks will the next
generation have parks to enjoy.

As a fourth great goal, I will offer a far-reaching set of proposals for
improving America's health care and making it available more fairly to
more people.

I will propose:

--A program to insure that no American family will be prevented from
obtaining basic medical care by inability to pay.

--I will propose a major increase in and redirection of aid to medical
schools, to greatly increase the number of doctors and other health
personnel.

--Incentives to improve the delivery of health services, to get more
medical care resources into those areas that have not been adequately
served, to make greater use of medical assistants, and to slow the
alarming rise in the costs of medical care.

--New programs to encourage better preventive medicine, by attacking the
causes of disease and injury, and by providing incentives to doctors to
keep people well rather than just to treat them when they are sick.

I will also ask for an appropriation of an extra $100 million to launch
an intensive campaign to find a cure for cancer, and I will ask later
for whatever additional funds can effectively be used. The time has come
in America when the same kind of concentrated effort that split the atom
and took man to the moon should be turned toward conquering this dread
disease. Let us make a total national commitment to achieve this goal.

America has long been the wealthiest nation in the world. Now it is time
we became the healthiest nation in the world.

The fifth great goal is to strengthen and to renew our State and local
governments.

As we approach our 200th anniversary in 1976, we remember that this
Nation launched itself as a loose confederation of separate States,
without a workable central government. At that time, the mark of its
leaders' vision was that they quickly saw the need to balance the
separate powers of the States with a government of central powers.

And so they gave us a constitution of balanced powers, of unity with
diversity--and so clear was their vision that it survives today as the
oldest written constitution still in force in the world.

For almost two centuries since--and dramatically in the 1930's--at those
great turning points when the question has been between the States and
the Federal Government, that question has been resolved in favor of a
stronger central Federal Government.

During this time the Nation grew and the Nation prospered. But one thing
history tells us is that no great movement goes in the same direction
forever. Nations change, they adapt, or they slowly die.

The time has now come in America to reverse the flow of power and
resources from the States and communities to Washington, and start power
and resources flowing back from Washington to the States and communities
and, more important, to the people all across America.

The time has come for a new partnership between the Federal Government
and the States and localities--a partnership in which we entrust the
States and localities with a larger share of the Nation's
responsibilities, and in which we share our Federal revenues with them
so that they can meet those responsibilities.

To achieve this goal, I propose to the Congress tonight that we enact a
plan of revenue sharing historic in scope and bold in concept.

All across America today, States and cities are confronted with a
financial crisis. Some have already been cutting back on essential
services---for example, just recently San Diego and Cleveland cut back
on trash collections. Most are caught between the prospects of
bankruptcy on the one hand and adding to an already crushing tax burden
on the other.

As one indication of the rising costs of local government, I discovered
the other day that my home town of Whittier, California--which has a
population of 67,000--has a larger budget for 1971 than the entire
Federal budget was in 1791.

Now the time has come to take a new direction, and once again to
introduce a new and more creative balance to our approach to government.

So let us put the money where the needs are. And let us put the power to
spend it where the people are.

I propose that the Congress make a $16 billion investment in renewing
State and local government. Five billion dollars of this will be in new
and unrestricted funds to be used as the States and localities see fit.
The other $11 billion will be provided by allocating $1 billion of new
funds and converting one-third of the money going to the present
narrow-purpose aid programs into Federal revenue sharing funds for six
broad purposes--for urban development, rural development, education,
transportation, job training, and law enforcement--but with the States
and localities making their own decisions on how it should be spent
within each category.

For the next fiscal year, this would increase total Federal aid to the
States and localities more than 25 percent over the present level.

The revenue sharing proposals I send to the Congress will include the
safeguards against discrimination that accompany all other Federal funds
allocated to the States. Neither the President nor the Congress nor the
conscience of this Nation can permit money which comes from all the
people to be used in a way which discriminates against some of the
people.

The Federal Government will still have a large and vital role to play in
achieving our national progress. Established functions that are clearly
and essentially Federal in nature will still be performed by the Federal
Government. New functions that need to be sponsored or performed by the
Federal Government--such as those I have urged tonight in welfare and
health--will be added to the Federal agenda. Whenever it makes the best
sense for us to act as a whole nation, the Federal Government should and
will lead the way. But where States or local governments can better do
what needs to be done, let us see that they have the resources to do it
there.

Under this plan, the Federal Government will provide the States and
localities with more money and less interference--and by cutting down
the interference the same amount of money will go a lot further.

Let us share our resources.

Let us share them to rescue the States and localities from the brink of
financial crisis.

Let us share them to give homeowners and wage earners a chance to escape
from ever-higher property taxes and sales taxes.

Let us share our resources for two other reasons as well.

The first of these reasons has to do with government itself, and the
second has to do with each of us, with the individual.

Let's face it. Most Americans today are simply fed up with government at
all levels. They will not--and they should not--continue to tolerate the
gap between promise and performance in government.

The fact is that we have made the Federal Government so strong it grows
muscle-bound and the States and localities so weak they approach
impotence.

If we put more power in more places, we can make government more
creative in more places. That way we multiply the number of people with
the ability to make things happen--and we can open the way to a new
burst of creative energy throughout America.

The final reason I urge this historic shift is much more personal, for
each and for every one of us.

As everything seems to have grown bigger and more complex in America, as
the forces that shape our lives seem to have grown more distant and more
impersonal, a great feeling of frustration has crept across this land.

Whether it is the workingman who feels neglected, the black man who
feels oppressed, or the mother concerned about her children, there has
been a growing feeling that "Things are in the saddle, and ride
mankind."

Millions of frustrated young Americans today are crying out--asking not
what will government do for me, but what can I do, how can I contribute,
how can I matter?

And so let us answer them. Let us say to them and let us say to all
Americans, "We hear you. We will give you a chance. We are going to give
you a new chance to have more to say about the decisions that affect
your future--a chance to participate in government--because we are going
to provide more centers of power where what you do can make a difference
that you can see and feel in your own life and the life of your whole
community."

The further away government is from people, the stronger government
becomes and the weaker people become. And a nation with a strong
government and a weak people is an empty shell.

I reject the patronizing idea that government in Washington, D.C., is
inevitably more wise, more honest, and more efficient than government at
the local or State level. The honesty and efficiency of government
depends on people. Government at all levels has good people and bad
people. And the way to get more good people into government is to give
them more opportunity to do good things.

The idea that a bureaucratic elite in Washington knows best what is best
for people everywhere and that you cannot trust local governments is
really a contention that you cannot trust people to govern themselves.
This notion is completely foreign to the American experience. Local
government is the government closest to the people, it is most
responsive to the individual person. It is people's government in a far
more intimate way than the Government in Washington can ever be.

People came to America because they wanted to determine their own future
rather than to live in a country where others determined their future
for them.

What this change means is that once again in America we are placing our
trust in people.

I have faith in people. I trust the judgment of people. Let us give the
people of America a chance, a bigger voice in deciding for themselves
those questions that so greatly affect their lives.

The sixth great goal is a complete reform of the Federal Government
itself.

Based on a long and intensive study with the aid of the best advice
obtainable, I have concluded that a sweeping reorganization of the
executive branch is needed if the Government is to keep up with the
times and with the needs of the people.

I propose, therefore, that we reduce the present 12 Cabinet Departments
to eight.

I propose that the Departments of State, Treasury, Defense, and Justice
remain, but that all the other departments be consolidated into four:
Human Resources, Community Development, Natural Resources, and Economic
Development.

Let us look at what these would be:

--First, a department dealing with the concerns of people--as
individuals, as members of a family--a department focused on human
needs.

--Second, a department concerned with the community--rural communities
and urban communities--and with all that it takes to make a community
function as a community.

--Third, a department concerned with our physical environment, with the
preservation and balanced use of those great natural resources on which
our Nation depends.

--And fourth, a department concerned with our prosperity--with our jobs,
our businesses, and those many activities that keep our economy running
smoothly and well.

Under this plan, rather than dividing up our departments by narrow
subjects, we would organize them around the great purposes of
government. Rather than scattering responsibility by adding new levels
of bureaucracy, we would focus and concentrate the responsibility for
getting problems solved.

With these four departments, when we have a problem we will know where
to go--and the department will have the authority and the resources to
do something about it.

Over the years we have added departments and created agencies at the
Federal level, each to serve a new constituency, to handle a particular
task--and these have grown and multiplied in what has become a hopeless
confusion of form and function.

The time has come to match our structure to our purposes---to look with
a fresh eye, to organize the Government by conscious, comprehensive
design to meet the new needs of a new era.

One hundred years ago, Abraham Lincoln stood on a battlefield and spoke
of a "government of the people, by the people, for the people." Too
often since then, we have become a nation of the Government, by the
Government, for the Government.

By enacting these reforms, we can renew that principle that Lincoln
stated so simply and so well.

By giving everyone's voice a chance to be heard, we will have government
that truly is of the people.

By creating more centers of meaningful power, more places where
decisions that really count can be made, by giving more people a chance
to do something, we can have government that truly is by the people.

And by setting up a completely modern, functional system of government
at the national level, we in Washington will at last be able to provide
government that is truly for the people.

I realize that what I am asking is that not only the executive branch in
Washington but that even this Congress will have to change by giving up
some of its power.

Change is hard. But without change there can be no progress. And for
each of us the question then becomes, not "Will change cause me
inconvenience?" but "Will change bring progress for America?"

Giving up power is hard. But I would urge all of you, as leaders of this
country, to remember that the truly revered leaders in world history are
those who gave power to people, and not those who took it away.

As we consider these reforms we will be acting, not for the next 2 years
or for the next 10 years, but for the next 100 years.

So let us approach these six great goals with a sense not only of this
moment in history but also of history itself.

Let us act with the willingness to work together and the vision and the
boldness and the courage of those great Americans who met in
Philadelphia almost 190 years ago to write a constitution.

Let us leave a heritage as they did--not just for our children but for
millions yet unborn--of a nation where every American will have a chance
not only to live in peace and to enjoy prosperity and opportunity but to
participate in a system of government where he knows not only his votes
but his ideas count--a system of government which will provide the means
for America to reach heights of achievement undreamed of before.

Those men who met at Philadelphia left a great heritage because they had
a vision--not only of what the Nation was but of what it could become.

As I think of that vision, I recall that America was founded as the land
of the open door--as a haven for the oppressed, a land of opportunity, a
place of refuge, of hope.

When the first settlers opened the door of America three and a half
centuries ago, they came to escape persecution and to find
opportunity--and they left wide the door of welcome for others to
follow.

When the Thirteen Colonies declared their independence almost two
centuries ago, they opened the door to a new vision of liberty and of
human fulfillment--not just for an elite but for all.

To the generations that followed, America's was the open door that
beckoned millions from the old world to the new in search of a better
life, a freer life, a fuller life, and in which, by their own decisions,
they could shape their own destinies.

For the black American, the Indian, the Mexican-American, and for those
others in our land who have not had an equal chance, the Nation at last
has begun to confront the need to press open the door of full and equal
opportunity, and of human dignity.

For all Americans, with these changes I have proposed tonight we can
open the door to a new era of opportunity. We can open the door to full
and effective participation in the decisions that affect their lives. We
can open the door to a new partnership among governments at all levels,
between those governments and the people themselves. And by so doing, we
can open wide the doors of human fulfillment for millions of people here
in America now and in the years to come.

In the next few weeks I will spell out in greater detail the way I
propose that we achieve these six great goals. I ask this Congress to be
responsive. If it is, then the 92d Congress, your Congress, our
Congress, at the end of its term, will be able to look back on a record
more splendid than any in our history.

This can be the Congress that helped us end the longest war in the
Nation's history, and end it in a way that will give us at last a
genuine chance to enjoy what we have not had in this century: a full
generation of peace.

This can be the Congress that helped achieve an expanding economy, with
full employment and without inflation--and without the deadly stimulus
of war.

This can be the Congress that reformed a welfare system that has robbed
recipients of their dignity and robbed States and cities of their
resources.

This can be the Congress that pressed forward the rescue of our
environment, and established for the next generation an enduring legacy
of parks for the people.

This can be the Congress that launched a new era in American medicine,
in which the quality of medical care was enhanced while the costs were
made less burdensome.

But above all, what this Congress can be remembered for is opening the
way to a new American revolution--a peaceful revolution in which power
was turned back to the people--in which government at all levels was
refreshed and renewed and made truly responsive. This can be a
revolution as profound, as far-reaching, as exciting as that first
revolution almost 200 years ago--and it can mean that just 5 years from
now America will enter its third century as a young nation new in
spirit, with all the vigor and the freshness with which it began its
first century.

My colleagues in the Congress, these are great goals. They can make the
sessions of this Congress a great moment for America. So let us pledge
together to go forward together--by achieving these goals to give
America the foundation today for a new greatness tomorrow and in all the
years to come, and in so doing to make this the greatest Congress in the
history of this great and good country.

***

State of the Union Address
Richard Nixon
January 20, 1972

Mr. Speaker, Mr. President, my colleagues in the Congress, our
distinguished guests, my fellow Americans:

Twenty-five years ago I sat here as a freshman Congressman--along with
Speaker Albert--and listened for the first time to the President address
the State of the Union.

I shall never forget that moment. The Senate, the diplomatic corps, the
Supreme Court, the Cabinet entered the Chamber, and then the President
of the United States. As all of you are aware, I had some differences
with President Truman. He had some with me. But I remember that on that
day--the day he addressed that joint session of the newly elected
Republican 80th Congress, he spoke not as a partisan, but as President
of all the people--calling upon the Congress to put aside partisan
considerations in the national interest.

The Greek-Turkish aid program, the Marshall Plan, the great foreign
policy initiatives which have been responsible for avoiding a world war
for over 25 years were approved by the 80th Congress, by a bipartisan
majority of which I was proud to be a part.

Nineteen hundred seventy-two is now before us. It holds precious time in
which to accomplish good for the Nation. We must not waste it. I know
the political pressures in this session of the Congress will be great.
There are more candidates for the Presidency in this Chamber today than
there probably have been at any one time in the whole history of the
Republic. And there is an honest difference of opinion, not only between
the parties, but within each party, on some foreign policy issues and on
some domestic policy issues.

However, there are great national problems that are so vital that they
transcend partisanship. So let us have our debates. Let us have our
honest differences. But let us join in keeping the national interest
first. Let us join in making sure that legislation the Nation needs does
not become hostage to the political interests of any party or any
person.

There is ample precedent, in this election year, for me to present you
with a huge list of new proposals, knowing full well that there would
not be any possibility of your passing them if you worked night and day.

I shall not do that.

I have presented to the leaders of the Congress today a message of
15,000 words discussing in some detail where the Nation stands and
setting forth specific legislative items on which I have asked the
Congress to act. Much of this is legislation which I proposed in 1969,
in 1970, and also in the first session of this 92d Congress and on which
I feel it is essential that action be completed this year.

I am not presenting proposals which have attractive labels but no hope
of passage. I am presenting only vital programs which are within the
capacity of this Congress to enact, within the capacity of the budget to
finance, and which I believe should be above partisanship--programs
which deal with urgent priorities for the Nation, which should and must
be the subject of bipartisan action by this Congress in the interests of
the country in 1972.

When I took the oath of office on the steps of this building just 3
years ago today, the Nation was ending one of the most tortured decades
in its history.

The 1960's were a time of great progress in many areas. But as we all
know, they were also times of great agony--the agonies of war, of
inflation, of rapidly rising crime, of deteriorating titles, of hopes
raised and disappointed, and of anger and frustration that led finally
to violence and to the worst civil disorder in a century.

I recall these troubles not to point any fingers of blame. The Nation
was so torn in those final years of the sixties that many in both
parties questioned whether America could be governed at all.

The Nation has made significant progress in these first years of the
seventies:

Our cities are no longer engulfed by civil disorders.

Our colleges and universities have again become places of learning
instead of battlegrounds.

A beginning has been made in preserving and protecting our environment.

The rate of increase in crime has been slowed--and here in the District
of Columbia, the one city where the Federal Government has direct
jurisdiction, serious crime in 1971 was actually reduced by 13 percent
from the year before.

Most important, because of the beginnings that have been made, we can
say today that this year 1972 can be the year in which America may make
the greatest progress in 25 years toward achieving our goal of being at
peace with all the nations of the world.

As our involvement in the war in Vietnam comes to an end, we must now go
on to build a generation of peace.

To achieve that goal, we must first face realistically the need to
maintain our defense.

In the past 3 years, we have reduced the burden of arms. For the first
time in 20 years, spending on defense has been brought below spending on
human resources.

As we look to the future, we find encouraging progress in our
negotiations with the Soviet Union on limitation of strategic arms. And
looking further into the future, we hope there can eventually be
agreement on the mutual reduction of arms. But until there is such a
mutual agreement, we must maintain the strength necessary to deter war.

And that is why, because of rising research and development costs,
because of increases in military and civilian pay, because of the need
to proceed with new weapons systems, my budget for the coming fiscal
year will provide for an increase in defense spending.

Strong military defenses are not the enemy of peace; they are the
guardians of peace.

There could be no more misguided set of priorities than one which would
tempt others by weakening America, and thereby endanger the peace of the
world.

In our foreign policy, we have entered a new era. The world has changed
greatly in the 11 years since President John Kennedy said in his
Inaugural Address, "... we shall pay any price, bear any burden, meet
any hardship, support any friend, oppose any foe to assure the survival
and the success of liberty."

Our policy has been carefully and deliberately adjusted to meet the new
realities of the new world we live in. We make today only those
commitments we are able and prepared to meet.

Our commitment to freedom remains strong and unshakable. But others must
bear their share of the burden of defending freedom around the world.

And so this, then, is our policy:

--We will maintain a nuclear deterrent adequate to meet any threat to
the security of the United States or of our allies.

--We will help other nations develop the capability of defending
themselves.

--We will faithfully honor all of our treaty commitments.

--We will act to defend our interests, whenever and wherever they are
threatened anyplace in the world.

--But where our interests or our treaty commitments are not involved,
our role will be limited.

--We will not intervene militarily.

--But we will use our influence to prevent war.

--If war comes, we will use our influence to stop it.

--Once it is over, we will do our share in helping to bind up the wounds
of those who have participated in it.

As you know, I will soon be visiting the People's Republic of China and
the Soviet Union. I go there with no illusions. We have great
differences with both powers. We shall continue to have great
differences. But peace depends on the ability of great powers to live
together on the same planet despite their differences.

We would not be true to our obligation to generations yet unborn if we
failed to seize this moment to do everything in our power to insure that
we will be able to talk about those differences, rather than to fight
about them, in the future.

As we look back over this century, let us, in the highest spirit of
bipartisanship, recognize that we can be proud of our Nation's record in
foreign affairs.

America has given more generously of itself toward maintaining freedom,
preserving peace, alleviating human suffering around the globe, than any
nation has ever done in the history of man.

We have fought four wars in this century, but our power has never been
used to break the peace, only to keep it; never been used to destroy
freedom, only to defend it. We now have within our reach the goal of
insuring that the next generation can be the first generation in this
century to be spared the scourges of war.

Turning to our problems at home, we are making progress toward our goal
of a new prosperity without war.

Industrial production, consumer spending, retail sales, personal income
all have been rising. Total employment, real income are the highest in
history. New home building starts this past year reached the highest
level ever. Business and consumer confidence have both been rising.
Interest rates are down. The rate of inflation is down. We can look with
confidence to 1972 as the year when the back of inflation will be
broken.

Now, this a good record, but it is not good enough--not when we still
have an unemployment rate of 6 percent.

It is not enough to point out that this was the rate of the early
peacetime years of the sixties, or that if the more than 2 million men
released from the Armed Forces and defense-related industries were still
in their wartime jobs, unemployment would be far lower.

Our goal in this country is full employment in peacetime. We intend to
meet that goal, and we can.

The Congress has helped to meet that goal by passing our job-creating
tax program last month.

The historic monetary agreements, agreements that we have reached with
the major European nations, Canada, and Japan, will help meet it by
providing new markets for American products, new jobs for American
workers.

Our budget will help meet it by being expansionary without being
inflationary--a job-producing budget that will help take up the gap as
the economy expands to full employment.

Our program to raise farm income will help meet it by helping to
revitalize rural America, by giving to America's farmers their fair
share of America's increasing productivity.

We also will help meet our goal of full employment in peacetime with a
set of major initiatives to stimulate more imaginative use of America's
great capacity for technological advance, and to direct it toward
improving the quality of life for every American.

In reaching the moon, we demonstrated what miracles American technology
is capable of achieving. Now the time has come to move more deliberately
toward making full use of that technology here on earth, of harnessing
the wonders of science to the service of man.

I shall soon send to the Congress a special message proposing a new
program of Federal partnership in technological research and
development--with Federal incentives to increase private research,
federally supported research on projects designed to improve our
everyday lives in ways that will range from improving mass transit to
developing new systems of emergency health care that could save
thousands of lives annually.

Historically, our superior technology and high productivity have made it
possible for American workers to be the highest paid in the world by
far, and yet for our goods still to compete in world markets.

Now we face a new situation. As other nations move rapidly forward in
technology, the answer to the new competition is not to build a wall
around America, but rather to remain competitive by improving our own
technology still further and by increasing productivity in American
industry.

Our new monetary and trade agreements will make it possible for American
goods to compete fairly in the world's markets--but they still must
compete. The new technology program will put to use the skills of many
highly trained Americans, skills that might otherwise be wasted. It will
also meet the growing technological challenge from abroad, and it will
thus help to create new industries, as well as creating more jobs for
America's workers in producing for the world's markets.

This second session of the 92d Congress already has before it more than
90 major Administration proposals which still await action.

I have discussed these in the extensive written message that I have
presented to the Congress today.

They include, among others, our programs to improve life for the aging;
to combat crime and drug abuse; to improve health services and to ensure
that no one will be denied needed health care because of inability to
pay; to protect workers' pension rights; to promote equal opportunity
for members of minorities, and others who have been left behind; to
expand consumer protection; to improve the environment; to revitalize
rural America; to help the cities; to launch new initiatives in
education; to improve transportation, and to put an end to costly labor
tie-ups in transportation.

The west coast dock strike is a case in point. This Nation cannot and
will not tolerate that kind of irresponsible labor tie-up in the future.

The messages also include basic reforms which are essential if our
structure of government is to be adequate in the decades ahead.

They include reform of our wasteful and outmoded welfare
system--substitution of a new system that provides work requirements and
work incentives for those who can help themselves, income support for
those who cannot help themselves, and fairness to the working poor.

They include a $17 billion program of Federal revenue sharing with the
States and localities as an investment in their renewal, an investment
also of faith in the American people.

They also include a sweeping reorganization of the executive branch of
the Federal Government so that it will be more efficient, more
responsive, and able to meet the challenges of the decades ahead.

One year ago, standing in this place, I laid before the opening session
of this Congress six great goals. One of these was welfare reform. That
proposal has been before the Congress now for nearly 2 1/2 years.

My proposals on revenue sharing, government reorganization, health care,
and the environment have now been before the Congress for nearly a year.
Many of the other major proposals that I have referred to have been here
that long or longer.

Now, 1971, we can say, was a year of consideration of these measures.
Now let us join in making 1972 a year of action on them, action by the
Congress, for the Nation and for the people of America.

Now, in addition, there is one pressing need which I have not previously
covered, but which must be placed on the national agenda.

We long have looked in this Nation to the local property tax as the main
source of financing for public primary and secondary education.

As a result, soaring school costs, soaring property tax rates now
threaten both our communities and our schools. They threaten communities
because property taxes, which more than doubled in the 10 years from
1960 to '70, have become one of the most oppressive and discriminatory
of all taxes, hitting most cruelly at the elderly and the retired; and
they threaten schools, as hard-pressed voters understandably reject new
bond issues at the polls.

The problem has been given even greater urgency by four recent court
decisions, which have held that the conventional method of financing
schools through local property taxes is discriminatory and
unconstitutional.

Nearly 2 years ago, I named a special Presidential commission to study
the problems of school finance, and I also directed the Federal
departments to look into the same problems. We are developing
comprehensive proposals to meet these problems.

This issue involves two complex and interrelated sets of problems:
support of the schools and the basic relationships of Federal, State,
and local governments in any tax reforms.

Under the leadership of the Secretary of the Treasury, we are carefully
reviewing all of the tax aspects, and I have this week enlisted the
Advisory Commission on Intergovernmental Relations in addressing the
intergovernmental relations aspects.

I have asked this bipartisan Commission to review our proposals for
Federal action to cope with the gathering crisis of school finance and
property taxes. Later in the year, when both Commissions have completed
their studies, I shall make my final recommendations for relieving the
burden of property taxes and providing both fair and adequate financing
for our children's education.

These recommendations will be revolutionary. But all these
recommendations, however, will be rooted in one fundamental principle
with which there can be no compromise: Local school boards must have
control over local schools.

As we look ahead over the coming decades, vast new growth and change are
not only certainties, they will be the dominant reality of this world,
and particularly of our life in America.

Surveying the certainty of rapid change, we can be like a fallen rider
caught in the stirrups--or we can sit high in the saddle, the masters of
change, directing it on a course we choose.

The secret of mastering change in today's world is to reach back to old
and proven principles, and to adapt them with imagination and
intelligence to the new realities of a new age.

That is what we have done in the proposals that I have laid before the
Congress. They are rooted in basic principles that are as enduring as
human nature, as robust as the American experience; and they are
responsive to new conditions. Thus they represent a spirit of change
that is truly renewal.

As we look back at those old principles, we find them as timely as they
are timeless.

We believe in independence, and self-reliance, and the creative value of
the competitive spirit.

We believe in full and equal opportunity for all Americans and in the
protection of individual rights and liberties.

We believe in the family as the keystone of the community, and in the
community as the keystone of the Nation.

We believe in compassion toward those in need.

We believe in a system of law, justice, and order as the basis of a
genuinely free society.

We believe that a person should get what he works for--and that those
who can, should work for what they get.

We believe in the capacity of people to make their own decisions in
their own lives, in their own communities--and we believe in their right
to make those decisions.

In applying these principles, we have done so with the full
understanding that what we seek in the seventies, what our quest is, is
not merely for more, but for better for a better quality of life for all
Americans.

Thus, for example, we are giving a new measure of attention to cleaning
up our air and water, making our surroundings more attractive. We are
providing broader support for the arts, helping stimulate a deeper
appreciation of what they can contribute to the Nation's activities and
to our individual lives.

But nothing really matters more to the quality of our lives than the way
we treat one another, than our capacity to live respectfully together as
a unified society, with a full, generous regard for the rights of others
and also for the feelings of others.

As we recover from the turmoil and violence of recent years, as we learn
once again to speak with one another instead of shouting at one another,
we are regaining that capacity.

As is customary here, on this occasion, I have been talking about
programs. Programs are important. But even more important than programs
is what we are as a Nation--what we mean as a Nation, to ourselves and
to the world.

In New York Harbor stands one of the most famous statues in the
world--the Statue of Liberty, the gift in 1886 of the people of France
to the people of the United States. This statue is more than a landmark;
it is a symbol--a symbol of what America has meant to the world.

It reminds us that what America has meant is not its wealth, and not its
power, but its spirit and purpose--a land that enshrines liberty and
opportunity, and that has held out a hand of welcome to millions in
search of a better and a fuller and, above all, a freer life.

The world's hopes poured into America, along with its people. And those
hopes, those dreams, that have been brought here from every corner of
the world, have become a part of the hope that we now hold out to the
world.

Four years from now, America will celebrate the 200th anniversary of its
founding as a Nation. There are those who say that the old Spirit of '76
is dead--that we no longer have the strength of character, the idealism,
the faith in our founding purposes that that spirit represents.

Those who say this do not know America.

We have been undergoing self-doubts and self-criticism. But these are
only the other side of our growing sensitivity to the persistence of
want in the midst of plenty, of our impatience with the slowness with
which age-old ills are being overcome.

If we were indifferent to the shortcomings of our society, or complacent
about our institutions, or blind to the lingering inequities--then we
would have lost our way.

But the fact that we have those concerns is evidence that our ideals,
deep down, are still strong. Indeed, they remind us that what is really
best about America is its compassion. They remind us that in the final
analysis, America is great not because it is strong, not because it is
rich, but because this is a good country.

Let us reject the narrow visions of those who would tell us that we are
evil because we are not yet perfect, that we are corrupt because we are
not yet pure, that all the sweat and toil and sacrifice that have gone
into the building of America were for naught because the building is not
yet done.

Let us see that the path we are traveling is wide, with room in it for
all of us, and that its direction is toward a better Nation and a more
peaceful world.

Never has it mattered more that we go forward together.

Look at this Chamber. The leadership of America is here today--the
Supreme Court, the Cabinet, the Senate, the House of Representatives.

Together, we hold the future of the Nation, and the conscience of the
Nation in our hands.

Because this year is an election year, it will be a time of great
pressure.

If we yield to that pressure and fail to deal seriously with the
historic challenges that we face, we will have failed the trust of
millions of Americans and shaken the confidence they have a right to
place in us, in their Government.

Never has a Congress had a greater opportunity to leave a legacy of a
profound and constructive reform for the Nation than this Congress.

If we succeed in these tasks, there will be credit enough for all--not
only for doing what is right, but doing it in the right way, by rising
above partisan interest to serve the national interest.

And if we fail, more than any one of us, America will be the loser.

That is why my call upon the Congress today is for a high statesmanship,
so that in the years to come Americans will look back and say because it
withstood the intense pressures of a political year, and achieved such
great good for the American people and for the future of this Nation,
this was truly a great Congress.

***

State of the Union Address
Richard Nixon
February 2, 1973

To the Congress of the United States:

The traditional form of the President's annual report giving "to the
Congress Information of the State of the Union" is a single message or
address. As the affairs and concerns of our Union have multiplied over
the years, however, so too have the subjects that require discussion in
State of the Union Messages.

This year in particular, with so many changes in Government programs
under consideration--and with our very philosophy about the relationship
between the individual and the State at an historic crossroads--a
single, all-embracing State of the Union Message would not appear to be
adequate.

I have therefore decided to present my 1973 State of the Union report in
the form of a series of messages during these early weeks of the 93rd
Congress. The purpose of this first message in the series is to give a
concise overview of where we stand as a people today, and to outline
some of the general goals that I believe we should pursue over the next
year and beyond. In coming weeks, I will send to the Congress further
State of the Union reports on specific areas of policy including
economic affairs, natural resources, human resources, community
development and foreign and defense policy.

The new course these messages will outline represents a fresh approach
to Government: an approach that addresses the realities of the 1970s,
not those of the 1930s or of the 1960s. The role of the Federal
Government as we approach our third century of independence should not
be to dominate any facet of American life, but rather to aid and
encourage people, communities and institutions to deal with as many of
the difficulties and challenges facing them as possible, and to help see
to it that every American has a full and equal opportunity to realize
his or her potential.

If we were to continue to expand the Federal Government at the rate of
the past several decades, it soon would consume us entirely. The time
has come when we must make clear choices--choices between old programs
that set worthy goals but failed to reach them and new programs that
provide a better way to realize those goals; and choices, too, between
competing programs--all of which may be desirable in themselves but only
some of which we can afford with the finite resources at our command.

Because our resources are not infinite, we also face a critical choice
in 1973 between holding the line in Government spending and adopting
expensive programs which will surely force up taxes and refuel
inflation.

Finally, it is vital at this time that we restore a greater sense of
responsibility at the State and local level, and among individual
Americans.

WHERE WE STAND

The basic state of our Union today is sound, and full of promise.

We enter 1973 economically strong, militarily secure and, most important
of all, at peace after a long and trying war.

America continues to provide a better and more abundant life for more of
its people than any other nation in the world. We have passed through
one of the most difficult periods in our history without surrendering to
despair and without dishonoring our ideals as a people.

Looking back, there is a lesson in all this for all of us. The lesson is
one that we sometimes had to learn the hard way over the past few years.
But we did learn it. That lesson is that even potentially destructive
forces can be converted into positive forces when we know how to channel
them, and when we use common sense and common decency to create a
climate of mutual respect and goodwill.

By working together and harnessing the forces of nature, Americans have
unlocked some of the great mysteries of the universe.

Men have walked the surface of the moon and soared to new heights of
discovery.

This same spirit of discovery is helping us to conquer disease and
suffering that have plagued our own planet since the dawn of time.

By working together with the leaders of other nations, we have been able
to build a new hope for lasting peace--for a structure of world order in
which common interest outweighs old animosities, and in which a new
generation of the human family can grow up at peace in a changing world.

At home, we have learned that by working together we can create
prosperity without fanning inflation; we can restore order without
weakening freedom.

THE CHALLENGES WE FACE

These first years of the 1970s have been good years for America.

Our job--all of us together--is to make 1973 and the years to come even
better ones. I believe that we can. I believe that we can make the years
leading to our Bicentennial the best four years in American history.

But we must never forget that nothing worthwhile can be achieved without
the will to succeed and the strength to sacrifice.

Hard decisions must be made, and we must stick by them.

In the field of foreign policy, we must remember that a strong
America--an America whose word is believed and whose strength is
respected--is essential to continued peace and understanding in the
world. The peace with honor we have achieved in Vietnam has strengthened
this basic American credibility. We must act in such a way in coming
years that this credibility will remain intact, and with it, the world
stability of which it is so indispensable a part.

At home, we must reject the mistaken notion--a notion that has dominated
too much of the public dialogue for too long--that ever bigger
Government is the answer to every problem.

We have learned only too well that heavy taxation and excessive
Government spending are not a cure-all. In too many cases, instead of
solving the problems they were aimed at, they have merely placed an ever
heavier burden on the shoulders of the American taxpayer, in the form of
higher taxes and a higher cost of living. At the same time they have
deceived our people because many of the intended beneficiaries received
far less than was promised, thus undermining public faith in the
effectiveness of Government as a whole.

The time has come for us to draw the line. The time has come for the
responsible leaders of both political parties to take a stand against
overgrown Government and for the American taxpayer. We are not spending
the Federal Government's money, we are spending the taxpayer's money,
and it must be spent in a way which guarantees his money's worth and
yields the fullest possible benefit to the people being helped.

The answer to many of the domestic problems we face is not higher taxes
and more spending. It is less waste, more results and greater freedom
for the individual American to earn a rightful place in his own
community--and for States and localities to address their own needs in
their own ways, in the light of their own priorities.

By giving the people and their locally elected leaders a greater voice
through changes such as revenue sharing, and by saying "no" to excessive
Federal spending and higher taxes, we can help achieve this goal.

COMING MESSAGES

The policies which I will outline to the Congress in the weeks ahead
represent a reaffirmation, not an abdication, of Federal responsibility.
They represent a pragmatic rededication to social compassion and
national excellence, in place of the combination of good intentions and
fuzzy follow-through which too often in the past was thought sufficient.

In the field of economic affairs, our objectives will be to hold down
taxes, to continue controlling inflation, to promote economic growth, to
increase productivity, to encourage foreign trade, to keep farm income
high, to bolster small business, and to promote better labor-management
relations.

In the area of natural resources, my recommendations will include
programs to preserve and enhance the environment, to advance science and
technology, and to assure balanced use of our irreplaceable natural
resources.

In developing human resources, I will have recommendations to advance
the Nation's health and education, to improve conditions of people in
need, to carry forward our increasingly successful attacks on crime,
drug abuse and injustice, and to deal with such important areas of
special concern as consumer affairs. We will continue and improve our
Nation's efforts to assist those who have served in the Armed Services
in Vietnam through better job and training opportunities.

We must do a better job in community development--in creating more
livable communities, in which all of our children can grow up with
fuller access to opportunity and greater immunity to the social evils
and blights which now plague so many of our towns and cities. I shall
have proposals to help us achieve this.

I shall also deal with our defense and foreign policies, and with our
new approaches to the role and structure of Government itself.

Considered as a whole, this series of messages will be a blueprint for
modernizing the concept and the functions of American Government to meet
the needs of our people.

Converting it into reality will require a spirit of cooperation and
shared commitment on the part of all branches of the Government, for the
goals we seek are not those of any single party or faction, they are
goals for the betterment of all Americans. As President, I recognize
that I cannot do this job alone. The Congress must help, and I pledge to
do my part to achieve a constructive working relationship with the
Congress. My sincere hope is that the executive and legislative branches
can work together in this great undertaking in a positive spirit of
mutual respect and cooperation.

Working together--the Congress, the President and the people--I am
confident that we can translate these proposals into an action program
that can reform and revitalize American Government and, even more
important, build a better life for all Americans.

The White House,

February 2, 1973.

***

State of the Union Address
Richard Nixon
January 30, 1974

Mr. Speaker, Mr. President, my colleagues in the Congress, our
distinguished guests, my fellow Americans:

We meet here tonight at a time of great challenge and great
opportunities for America. We meet at a time when we face great problems
at home and abroad that will test the strength of our fiber as a nation.
But we also meet at a time when that fiber has been tested, and it has
proved strong.

America is a great and good land, and we are a great and good land
because we are a strong, free, creative people and because America is
the single greatest force for peace anywhere in the world. Today, as
always in our history, we can base our confidence in what the American
people will achieve in the future on the record of what the American
people have achieved in the past.

Tonight, for the first time in 12 years, a President of the United
States can report to the Congress on the state of a Union at peace with
every nation of the world. Because of this, in the 22,000-word message
on the state of the Union that I have just handed to the Speaker of the
House and the President of the Senate, I have been able to deal
primarily with the problems of peace with what we can do here at home in
America for the American people--rather than with the problems of war.

The measures I have outlined in this message set an agenda for truly
significant progress for this Nation and the world in 1974. Before we
chart where we are going, let us see how far we have come.

It was 5 years ago on the steps of this Capitol that I took the oath of
office as your President. In those 5 years, because of the initiatives
undertaken by this Administration, the world has changed. America has
changed. As a result of those changes, America is safer today, more
prosperous today, with greater opportunity for more of its people than
ever before in our history.

Five years ago, America was at war in Southeast Asia. We were locked in
confrontation with the Soviet Union. We were in hostile isolation from a
quarter of the world's people who lived in Mainland China.

Five years ago, our cities were burning and besieged.

Five years ago, our college campuses were a battleground.

Five years ago, crime was increasing at a rate that struck fear across
the Nation.

Five years ago, the spiraling rise in drug addiction was threatening
human and social tragedy of massive proportion, and there was no program
to deal with it.

Five years ago--as young Americans had done for a generation before
that--America's youth still lived under the shadow of the military
draft.

Five years ago, there was no national program to preserve our
environment. Day by day, our air was getting dirtier, our water was
getting more foul.

And 5 years ago, American agriculture was practically a depressed
industry with 100,000 farm families abandoning the farm every year.

As we look at America today, we find ourselves challenged by new
problems. But we also find a record of progress to confound the
professional criers of doom and prophets of despair. We met the
challenges we faced 5 years ago, and we will be equally confident of
meeting those that we face today.

Let us see for a moment how we have met them.

After more than 10 years of military involvement, all of our troops have
returned from Southeast Asia, and they have returned with honor. And we
can be proud of the fact that our courageous prisoners of war, for whom
a dinner was held in Washington tonight, that they came home with their
heads high, on their feet and not on their knees.

In our relations with the Soviet Union, we have turned away from a
policy of confrontation to one of negotiation. For the first time since
World War II, the world's two strongest powers are working together
toward peace in the world. With the People's Republic of China after a
generation of hostile isolation, we have begun a period of peaceful
exchange and expanding trade.

Peace has returned to our cities, to our campuses. The 17-year rise in
crime has been stopped. We can confidently say today that we are finally
beginning to win the war against crime. Right here in this Nation's
Capital--which a few years ago was threatening to become the crime
capital of the world--the rate in crime has been cut in half. A massive
campaign against drug abuse has been organized. And the rate of new
heroin addiction, the most vicious threat of all, is decreasing rather
than increasing.

For the first time in a generation, no young Americans are being drafted
into the armed services of the United States. And for the first time
ever, we have organized a massive national effort to protect the
environment. Our air is getting cleaner, our water is getting purer, and
our agriculture, which was depressed, is prospering. Farm income is up
70 percent, farm production is setting all-time records, and the
billions of dollars the taxpayers were paying in subsidies has been cut
to nearly zero.

Overall, Americans are living more abundantly than ever before, today.
More than 2 1/2 million new jobs were created in the past year alone.
That is the biggest percentage increase in nearly 20 years. People are
earning more. What they earn buys more, more than ever before in
history. In the past 5 years, the average American's real spendable
income--that is, what you really can buy with your income, even after
allowing for taxes and inflation--has increased by 16 percent.

Despite this record of achievement, as we turn to the year ahead we hear
once again the familiar voice of the perennial prophets of gloom telling
us now that because of the need to fight inflation, because of the
energy shortage, America may be headed for a recession.

Let me speak to that issue head on. There will be no recession in the
United States of America. Primarily due to our energy crisis, our
economy is passing through a difficult period. But I pledge to you
tonight that the full powers of this Government will be used to keep
America's economy producing and to protect the jobs of America's
workers.

We are engaged in a long and hard fight against inflation. There have
been, and there will be in the future, ups and downs in that fight. But
if this Congress cooperates in our efforts to hold down the cost of
Government, we shall win our fight to hold down the cost of living for
the American people.

As we look back over our history, the years that stand out as the ones
of signal achievement are those in which the Administration and the
Congress, whether one party or the other, working together, had the
wisdom and the foresight to select those particular initiatives for
which the Nation was ready and the moment was right--and in which they
seized the moment and acted.

Looking at the year 1974 which lies before us, there are 10 key areas in
which landmark accomplishments are possible this year in America. If we
make these our national agenda, this is what we will achieve in 1974:

We will break the back of the energy crisis; we will lay the foundation
for our future capacity to meet America's energy needs from America's
own resources.

And we will take another giant stride toward lasting peace in the
world--not only by continuing our policy of negotiation rather than
confrontation where the great powers are concerned but also by helping
toward the achievement of a just and lasting settlement in the Middle
East.

We will check the rise in prices without administering the harsh
medicine of recession, and we will move the economy into a steady period
of growth at a sustainable level.

We will establish a new system that makes high-quality health care
available to every American in a dignified manner and at a price he can
afford.

We will make our States and localities more responsive to the needs of
their own citizens.

We will make a crucial breakthrough toward better transportation in our
towns and in our cities across America.

We will reform our system of Federal aid to education, to provide it
when it is needed, where it is needed, so that it will do the most for
those who need it the most.

We will make an historic beginning on the task of defining and
protecting the right of personal privacy for every American.

And we will start on a new road toward reform of a welfare system that
bleeds the taxpayer, corrodes the community, and demeans those it is
intended to assist.

And together with the other nations of the world, we will establish the
economic framework within which Americans will share more fully in an
expanding worldwide trade and prosperity in the years ahead, with more
open access to both markets and supplies.

In all of the 186 State of the Union messages delivered from this place,
in our history this is the first in which the one priority, the first
priority, is energy. Let me begin by reporting a new development which I
know will be welcome news to every American. As you know, we have
committed ourselves to an active role in helping to achieve a just and
durable peace in the Middle East, on the basis of full implementation of
Security Council Resolutions 242 and 338. The first step in the process
is the disengagement of Egyptian and Israeli forces which is now taking
place.

Because of this hopeful development, I can announce tonight that I have
been assured, through my personal contacts with friendly leaders in the
Middle Eastern area, that an urgent meeting will be called in the
immediate future to discuss the lifting of the oil embargo.

This is an encouraging sign. However, it should be clearly understood by
our friends in the Middle East that the United States will not be
coerced on this issue.

Regardless of the outcome of this meeting, the cooperation of the
American people in our energy conservation program has already gone a
long way towards achieving a goal to which I am deeply dedicated. Let us
do everything we can to avoid gasoline rationing in the United States of
America.

Last week, I sent to the Congress a comprehensive special message
setting forth our energy situation, recommending the legislative
measures which are necessary to a program for meeting our needs. If the
embargo is lifted, this will ease the crisis, but it will not mean an
end to the energy shortage in America. Voluntary conservation will
continue to be necessary. And let me take this occasion to pay tribute
once again to the splendid spirit of cooperation the American people
have shown which has made possible our success in meeting this emergency
up to this time.

The new legislation I have requested will also remain necessary.
Therefore, I urge again that the energy measures that I have proposed be
made the first priority of this session of the Congress. These measures
will require the oil companies and other energy producers to provide the
public with the necessary information on their supplies. They will
prevent the injustice of windfall profits for a few as a result of the
sacrifices of the millions of Americans. And they will give us the
organization, the incentives, the authorities needed to deal with the
short-term emergency and to move toward meeting our long-term needs.

Just as 1970 was the year in which we began a full-scale effort to
protect the environment, 1974 must be the year in which we organize a
full-scale effort to provide for our energy needs, not only in this
decade but through the 21st century.

As we move toward the celebration 2 years from now of the 200th
anniversary of this Nation's independence, let us press vigorously on
toward the goal I announced last November for Project Independence. Let
this be our national goal: At the end of this decade, in the year 1980,
the United States will not be dependent on any other country for the
energy we need to provide our jobs, to heat our homes, and to keep our
transportation moving.

To indicate the size of the Government commitment, to spur energy
research and development, we plan to spend $10 billion in Federal funds
over the next 5 years. That is an enormous amount. But during the same 5
years, private enterprise will be investing as much as $200 billion--and
in 10 years, $500 billion--to develop the new resources, the new
technology, the new capacity America will require for its energy needs
in the 1980's. That is just a measure of the magnitude of the project we
are undertaking.

But America performs best when called to its biggest tasks. It can truly
be said that only in America could a task so tremendous be achieved so
quickly, and achieved not by regimentation, but through the effort and
ingenuity of a free people, working in a free system.

Turning now to the rest of the agenda for 1974, the time is at hand this
year to bring comprehensive, high quality health care within the reach
of every American. I shall propose a sweeping new program that will
assure comprehensive health insurance protection to millions of
Americans who cannot now obtain it or afford it, with vastly improved
protection against catastrophic illnesses. This will be a plan that
maintains the high standards of quality in America's health care. And it
will not require additional taxes.

Now, I recognize that other plans have been put forward that would cost
$80 billion or even $100 billion and that would put our whole health
care system under the heavy hand of the Federal Government. This is the
wrong approach. This has been tried abroad, and it has failed. It is not
the way we do things here in America. This kind of plan would threaten
the quality of care provided by our whole health care system. The right
way is one that builds on the strengths of the present system and one
that does not destroy those strengths, one based on partnership, not
paternalism. Most important of all, let us keep this as the guiding
principle of our health programs. Government has a great role to play,
but we must always make sure that our doctors will be working for their
patients and not for the Federal Government.

Many of you will recall that in my State of the Union Address 3 years
ago, I commented that "Most Americans today are simply fed up with
government at all levels," and I recommended a sweeping set of proposals
to revitalize State and local governments, to make them more responsive
to the people they serve. I can report to you today that as a result of
revenue sharing passed by the Congress, and other measures, we have made
progress toward that goal. After 40 years of moving power from the
States and the communities to Washington, D.C., we have begun moving
power back from Washington to the States and communities and, most
important, to the people of America.

In this session of the Congress, I believe we are near the breakthrough
point on efforts which I have suggested, proposals to let people
themselves make their own decisions for their own communities and, in
particular, on those to provide broad new flexibility in Federal aid for
community development, for economic development, for education. And I
look forward to working with the Congress, with members of both parties
in resolving whatever remaining differences we have in this legislation
so that we can make available nearly $5 1/2 billion to our States and
localities to use not for what a Federal bureaucrat may want, but for
what their own people in those communities want. The decision should be
theirs.

I think all of us recognize that the energy crisis has given new urgency
to the need to improve public transportation, not only in our cities but
in rural areas as well. The program I have proposed this year will give
communities not only more money but also more freedom to balance their
own transportation needs. It will mark the strongest Federal commitment
ever to the improvement of mass transit as an essential element of the
improvement of life in our towns and cities.

One goal on which all Americans agree is that our children should have
the very best education this great Nation can provide.

In a special message last week, I recommended a number of important new
measures that can make 1974 a year of truly significant advances for our
schools and for the children they serve. If the Congress will act on
these proposals, more flexible funding will enable each Federal dollar
to meet better the particular need of each particular school district.
Advance funding will give school authorities a chance to make each
year's plans, knowing ahead of time what Federal funds they are going to
receive. Special targeting will give special help to the truly
disadvantaged among our people. College students faced with rising costs
for their education will be able to draw on an expanded program of loans
and grants. These advances are a needed investment in America's most
precious resource, our next generation. And I urge the Congress to act
on this legislation in 1974.

One measure of a truly free society is the vigor with which it protects
the liberties of its individual citizens. As technology has advanced in
America, it has increasingly encroached on one of those liberties--what
I term the right of personal privacy. Modern information systems, data
banks, credit records, mailing list abuses, electronic snooping, the
collection of personal data for one purpose that may be used for
another--all these have left millions of Americans deeply concerned by
the privacy they cherish.

And the time has come, therefore, for a major initiative to define the
nature and extent of the basic rights of privacy and to erect new
safeguards to ensure that those rights are respected.

I shall launch such an effort this year at the highest levels of the
Administration, and I look forward again to working with this Congress
in establishing a new set of standards that respect the legitimate needs
of society, but that also recognize personal privacy as a cardinal
principle of American liberty.

Many of those in this Chamber tonight will recall that it was 3 years
ago that I termed the Nation's welfare system "a monstrous, consuming
outrage--an outrage against the community, against the taxpayer, and
particularly against the children that it is supposed to help."

That system is still an outrage. By improving its administration, we
have been able to reduce some of the abuses. As a result, last year, for
the first time in 18 years, there has been a halt in the growth of the
welfare caseload. But as a system, our welfare program still needs
reform as urgently today as it did when I first proposed in 1969 that we
completely replace it with a different system.

In these final 3 years of my Administration, I urge the Congress to join
me in mounting a major new effort to replace the discredited present
welfare system with one that works, one that is fair to those who need
help or cannot help themselves, fair to the community, and fair to the
taxpayer. And let us have as our goal that there will be no Government
program which makes it more profitable to go on welfare than to go to
work.

I recognize that from the debates that have taken place within the
Congress over the past 3 years on this program that we cannot expect
enactment overnight of a new reform. But I do propose that the Congress
and the Administration together make this the year in which we discuss,
debate, and shape such a reform so that it can be enacted as quickly as
possible.

America's own prosperity in the years ahead depends on our sharing fully
and equitably in an expanding world prosperity. Historic negotiations
will take place this year that will enable us to ensure fair treatment
in international markets for American workers, American farmers,
American investors, and American consumers.

It is vital that the authorities contained in the trade bill I submitted
to the Congress be enacted so that the United States can negotiate
flexibly and vigorously on behalf of American interests. These
negotiations can usher in a new era of international trade that not only
increases the prosperity of all nations but also strengthens the peace
among all nations.

In the past 5 years, we have made more progress toward a lasting
structure of peace in the world than in any comparable time in the
Nation's history. We could not have made that progress if we had not
maintained the military strength of America. Thomas Jefferson once
observed that the price of liberty is eternal vigilance. By the same
token, and for the same reason, in today's world the price of peace is a
strong defense as far as the United States is concerned.

In the past 5 years, we have steadily reduced the burden of national
defense as a share of the budget, bringing it down from 44 percent in
1969 to 29 percent in the current year. We have cut our military
manpower over the past 5 years by more than a third, from 3.5 million to
2.2 million.

In the coming year, however, increased expenditures will be needed. They
will be needed to assure the continued readiness of our military forces,
to preserve present force levels in the face of rising costs, and to
give us the military strength we must have if our security is to be
maintained and if our initiatives for peace are to succeed.

The question is not whether we can afford to maintain the necessary
strength of our defense, the question is whether we can afford not to
maintain it, and the answer to that question is no. We must never allow
America to become the second strongest nation in the world.

I do not say this with any sense of belligerence, because I recognize
the fact that is recognized around the world. America's military
strength has always been maintained to keep the peace, never to break
it. It has always been used to defend freedom, never to destroy it. The
world's peace, as well as our own, depends on our remaining as strong as
we need to be as long as we need to be.

In this year 1974, we will be negotiating with the Soviet Union to place
further limits on strategic nuclear arms. Together with our allies, we
will be negotiating with the nations of the Warsaw Pact on mutual and
balanced reduction of forces in Europe. And we will continue our efforts
to promote peaceful economic development in Latin America, in Africa, in
Asia. We will press for full compliance with the peace accords that
brought an end to American fighting in Indochina, including particularly
a provision that promised the fullest possible accounting for those
Americans who are missing in action.

And having in mind the energy crisis to which I have referred to
earlier, we will be working with the other nations of the world toward
agreement on means by which oil supplies can be assured at reasonable
prices on a stable basis in a fair way to the consuming and producing
nations alike.

All of these are steps toward a future in which the world's peace and
prosperity, and ours as well as a result, are made more secure.

Throughout the 5 years that I have served as your President, I have had
one overriding aim, and that was to establish a new structure of peace
in the world that can free future generations of the scourge of war. I
can understand that others may have different priorities. This has been
and this will remain my first priority and the chief legacy I hope to
leave from the 8 years of my Presidency.

This does not mean that we shall not have other priorities, because as
we strengthen the peace, we must also continue each year a steady
strengthening of our society here at home. Our conscience requires it,
our interests require it, and we must insist upon it.

As we create more jobs, as we build a better health care system, as we
improve our education, as we develop new sources of energy, as we
provide more abundantly for the elderly and the poor, as we strengthen
the system of private enterprise that produces our prosperity--as we do
all of this and even more, we solidify those essential bonds that hold
us together as a nation.

Even more importantly, we advance what in the final analysis government
in America is all about.

What it is all about is more freedom, more security, a better life for
each one of the 211 million people that live in this land.

We cannot afford to neglect progress at home while pursuing peace
abroad. But neither can we afford to neglect peace abroad while pursuing
progress at home. With a stable peace, all is possible, but without
peace, nothing is possible.

In the written message that I have just delivered to the Speaker and to
the President of the Senate, I commented that one of the continuing
challenges facing us in the legislative process is that of the timing
and pacing of our initiatives, selecting each year among many worthy
projects those that are ripe for action at that time.

What is true in terms of our domestic initiatives is true also in the
world. This period we now are in, in the world--and I say this as one
who has seen so much of the world, not only in these past 5 years but
going back over many years--we are in a period which presents a juncture
of historic forces unique in this century. They provide an opportunity
we may never have again to create a structure of peace solid enough to
last a lifetime and more, not just peace in our time but peace in our
children's time as well. It is on the way we respond to this
opportunity, more than anything else, that history will judge whether we
in America have met our responsibility. And I am confident we will meet
that great historic responsibility which is ours today.

It was 27 years ago that John F. Kennedy and I sat in this Chamber, as
freshmen Congressmen, hearing our first State of the Union address
delivered by Harry Truman. I know from my talks with him, as members of
the Labor Committee on which we both served, that neither of us then
even dreamed that either one or both might eventually be standing in
this place that I now stand in now and that he once stood in, before me.
It may well be that one of the freshmen Members of the 93d Congress, one
of you out there, will deliver his own State of the Union message 27
years from now, in the year 2001.

Well, whichever one it is, I want you to be able to look back with pride
and to say that your first years here were great years and recall that
you were here in this 93d Congress when America ended its longest war
and began its longest peace.

Mr. Speaker, and Mr. President, and my distinguished colleagues and our
guests: I would like to add a personal word with regard to an issue that
has been of great concern to all Americans over the past year. I refer,
of course, to the investigations of the so-called Watergate affair. As
you know, I have provided to the Special Prosecutor voluntarily a great
deal of material. I believe that I have provided all the material that
he needs to conclude his investigations and to proceed to prosecute the
guilty and to clear the innocent.

I believe the time has come to bring that investigation and the other
investigations of this matter to an end. One year of Watergate is
enough.

And the time has come, my colleagues, for not only the Executive, the
President, but the Members of Congress, for all of us to join together
in devoting our full energies to these great issues that I have
discussed tonight which involve the welfare of all of the American
people in so many different ways, as well as the peace of the world.

I recognize that the House Judiciary Committee has a special
responsibility in this area, and I want to indicate on this occasion
that I will cooperate with the Judiciary Committee in its investigation.
I will cooperate so that it can conclude its investigation, make its
decision, and I will cooperate in any way that I consider consistent
with my responsibilities to the Office of the Presidency of the United
States.

There is only one limitation. I will follow the precedent that has been
followed by and defended by every President from George Washington to
Lyndon B. Johnson of never doing anything that weakens the Office of the
President of the United States or impairs the ability of the Presidents
of the future to make the great decisions that are so essential to this
Nation and the world.

Another point I should like to make very briefly: Like every Member of
the House and Senate assembled here tonight, I was elected to the office
that I hold. And like every Member of the House and Senate, when I was
elected to that office, I knew that I was elected for the purpose of
doing a job and doing it as well as I possibly can. And I want you to
know that I have no intention whatever of ever walking away from the job
that the people elected me to do for the people of the United States.

Now, needless to say, it would be understatement if I were not to admit
that the year 1973 was not a very easy year for me personally or for my
family. And as I have already indicated, the year 1974 presents very
great and serious problems, as very great and serious opportunities are
also presented.

But my colleagues, this I believe: With the help of God, who has blessed
this land so richly, with the cooperation of the Congress, and with the
support of the American people, we can and we will make the year 1974 a
year of unprecedented progress toward our goal of building a structure
of lasting peace in the world and a new prosperity without war in the
United States of America.

***

State of the Union Address
Gerald R. Ford
January 15, 1975

Mr. Speaker, Mr. Vice President, Members of the 94th Congress, and
distinguished guests:

Twenty-six years ago, a freshman Congressman, a young fellow with lots
of idealism who was out to change the world, stood before Sam Rayburn in
the well of the House and solemnly swore to the same oath that all of
you took yesterday--an unforgettable experience, and I congratulate you
all.

Two days later, that same freshman stood at the back of this great
Chamber--over there someplace--as President Truman, all charged up by
his single-handed election victory, reported as the Constitution
requires on the state of the Union.

When the bipartisan applause stopped, President Truman said, "I am happy
to report to this 81st Congress that the state of the Union is good. Our
Nation is better able than ever before to meet the needs of the American
people, and to give them their fair chance in the pursuit of happiness.
[It] is foremost among the nations of the world in the search for
peace."

Today, that freshman Member from Michigan stands where Mr. Truman stood,
and I must say to you that the state of the Union is not good:

Millions of Americans are out of work.

Recession and inflation are eroding the money of millions more.

Prices are too high, and sales are too slow.

This year's Federal deficit will be about $30 billion; next year's
probably $45 billion.

The national debt will rise to over $500 billion.

Our plant capacity and productivity are not increasing fast enough.

We depend on others for essential energy.

Some people question their Government's ability to make hard decisions
and stick with them; they expect Washington politics as usual.

Yet, what President Truman said on January 5, 1949, is even more true in
1975. We are better able to meet our people's needs. All Americans do
have a fairer chance to pursue happiness. Not only are we still the
foremost nation in the pursuit of peace but today's prospects of
attaining it are infinitely brighter.

There were 59 million Americans employed at the start of 1949; now there
are more than 85 million Americans who have jobs. In comparable dollars,
the average income of the American family has doubled during the past 26
years.

Now, I want to speak very bluntly. I've got bad news, and I don't expect
much, if any, applause. The American people want action, and it will
take both the Congress and the President to give them what they want.
Progress and solutions can be achieved, and they will be achieved.

My message today is not intended to address all of the complex needs of
America. I will send separate messages making specific recommendations
for domestic legislation, such as the extension of general revenue
sharing and the Voting Rights Act.

The moment has come to move in a new direction. We can do this by
fashioning a new partnership between the Congress on the one hand, the
White House on the other, and the people we both represent.

Let us mobilize the most powerful and most creative industrial nation
that ever existed on this Earth to put all our people to work. The
emphasis on our economic efforts must now shift from inflation to jobs.

To bolster business and industry and to create new jobs, I propose a
1-year tax reduction of $16 billion. Three-quarters would go to
individuals and one-quarter to promote business investment.

This cash rebate to individuals amounts to 12 percent of 1974 tax
payments--a total cut of $12 billion, with a maximum of $1,000 per
return.

I call on the Congress to act by April 1. If you do--and I hope you
will--the Treasury can send the first check for half of the rebate in
May and the second by September.

The other one-fourth of the cut, about $4 billion, will go to business,
including farms, to promote expansion and to create more jobs. The
1-year reduction for businesses would be in the form of a liberalized
investment tax credit increasing the rate to 12 percent for all
businesses.

This tax cut does not include the more fundamental reforms needed in our
tax system. But it points us in the right direction--allowing taxpayers
rather than the Government to spend their pay.

Cutting taxes now is essential if we are to turn the economy around. A
tax cut offers the best hope of creating more jobs. Unfortunately, it
will increase the size of the budget deficit. Therefore, it is more
important than ever that we take steps to control the growth of Federal
expenditures.

Part of our trouble is that we have been self-indulgent. For decades, we
have been voting ever-increasing levels of Government benefits, and now
the bill has come due. We have been adding so many new programs that the
size and the growth of the Federal budget has taken on a life of its
own.

One characteristic of these programs is that their cost increases
automatically every year because the number of people eligible for most
of the benefits increases every year. When these programs are enacted,
there is no dollar amount set. No one knows what they will cost. All we
know is that whatever they cost last year, they will cost more next
year.

It is a question of simple arithmetic. Unless we check the excessive
growth of Federal expenditures or impose on ourselves matching increases
in taxes, we will continue to run huge inflationary deficits in the
Federal budget.

If we project the current built-in momentum of Federal spending through
the next 15 years, State, Federal, and local government expenditures
could easily comprise half of our gross national product. This compares
with less than a third in 1975.

I have just concluded the process of preparing the budget submissions
for fiscal year 1976. In that budget, I will propose legislation to
restrain the growth of a number of existing programs. I have also
concluded that no new spending programs can be initiated this year,
except for energy. Further, I will not hesitate to veto any new spending
programs adopted by the Congress.

As an additional step toward putting the Federal Government's house in
order, I recommend a 5-percent limit on Federal pay increases in 1975.
In all Government programs tied to the Consumer Price Index--including
social security, civil service and military retirement pay, and food
stamps--I also propose a 1-year maximum increase of 5 percent.

None of these recommended ceiling limitations, over which Congress has
final authority, are easy to propose, because in most cases they involve
anticipated payments to many, many deserving people. Nonetheless, it
must be done. I must emphasize that I am not asking to eliminate, to
reduce, to freeze these payments. I am merely recommending that we slow
down the rate at which these payments increase and these programs grow.

Only a reduction in the growth of spending can keep Federal borrowing
down and reduce the damage to the private sector from high interest
rates. Only a reduction in spending can make it possible for the Federal
Reserve System to avoid an inflationary growth in the money supply and
thus restore balance to our economy. A major reduction in the growth of
Federal spending can help dispel the uncertainty that so many feel about
our economy and put us on the way to curing our economic ills.

If we don't act to slow down the rate of increase in Federal spending,
the United States Treasury will be legally obligated to spend more than
$360 billion in fiscal year 1976, even if no new programs are enacted.
These are not matters of conjecture or prediction, but again, a matter
of simple arithmetic. The size of these numbers and their implications
for our everyday life and the health of our economic system are
shocking.

I submitted to the last Congress a list of budget deferrals and
rescissions. There will be more cuts recommended in the budget that I
will submit. Even so, the level of outlays for fiscal year 1976 is still
much, much too high. Not only is it too high for this year but the
decisions we make now will inevitably have a major and growing impact on
expenditure levels in future years. I think this is a very fundamental
issue that we, the Congress and I, must jointly solve.

Economic disruptions we and others are experiencing stem in part from
the fact that the world price of petroleum has quadrupled in the last
year. But in all honesty, we cannot put all of the blame on the
oil-exporting nations. We, the United States, are not blameless. Our
growing dependence upon foreign sources has been adding to our
vulnerability for years and years, and we did nothing to prepare
ourselves for such an event as the embargo of 1973.

During the 1960's, this country had a surplus capacity of crude oil
which we were able to make available to our trading partners whenever
there was a disruption of supply. This surplus capacity enabled us to
influence both supplies and prices of crude oil throughout the world.
Our excess capacity neutralized any effort at establishing an effective
cartel, and thus the rest of the world was assured of adequate supplies
of oil at reasonable prices.

By 1970, our surplus capacity had vanished, and as a consequence, the
latent power of the oil cartel could emerge in full force. Europe and
Japan, both heavily dependent on imported oil, now struggle to keep
their economies in balance. Even the United States, our country, which
is far more self-sufficient than most other industrial countries, has
been .put under serious pressure.

I am proposing a program which will begin to restore our country's
surplus capacity in total energy. In this way, we will be able to assure
ourselves reliable and adequate energy and help foster a new world
energy stability for other major consuming nations.

But this Nation and, in fact, the world must face the prospect of energy
difficulties between now and 1985. This program will impose burdens on
all of us with the aim of reducing our consumption of energy and
increasing our production. Great attention has been paid to the
considerations of fairness, and I can assure you that the burdens will
not fall more harshly on those less able to bear them.

I am recommending a plan to make us invulnerable to cutoffs of foreign
oil. It will require sacrifices, but it--and this is most important--it
will work.

I have set the following national energy goals to assure that our future
is as secure and as productive as our past:

First, we must reduce oil imports by 1 million barrels per day by the
end of this year and by 2 million barrels per day by the end of 1977.

Second, we must end vulnerability to economic disruption by foreign
suppliers by 1985.

Third, we must develop our energy technology and resources so that the
United States has the ability to supply a significant share of the
energy needs of the free world by the end of this century.

To attain these objectives, we need immediate action to cut imports.
Unfortunately, in the short term there are only a limited number of
actions which can increase domestic supply. I will press for all of
them.

I urge quick action on the necessary legislation to allow commercial
production at the Elk Hills, California, Naval Petroleum Reserve. In
order that we make greater use of domestic coal resources, I am
submitting amendments to the Energy Supply and Environmental
Coordination Act which will greatly increase the number of powerplants
that can be promptly converted to coal.

Obviously, voluntary conservation continues to be essential, but tougher
programs are needed--and needed now. Therefore, I am using Presidential
powers to raise the fee on all imported crude oil and petroleum
products. The crude oil fee level will be increased $1 per barrel on
February 1, by $2 per barrel on March 1, and by $3 per barrel on April
1. I will take actions to reduce undue hardships on any geographical
region. The foregoing are interim administrative actions. They will be
rescinded when the broader but necessary legislation is enacted.

To that end, I am requesting the Congress to act within 90 days on a
more comprehensive energy tax program. It includes: excise taxes and
import fees totaling $2 per barrel on product imports and on all crude
oil; deregulation of new natural gas and enactment of a natural gas
excise tax.

I plan to take Presidential initiative to decontrol the price of
domestic crude oil on April 1. I urge the Congress to enact a windfall
profits tax by that date to ensure that oil producers do not profit
unduly.

The sooner Congress acts, the more effective the oil conservation
program will be and the quicker the Federal revenues can be returned to
our people.

I am prepared to use Presidential authority to limit imports, as
necessary, to guarantee success.

I want you to know that before deciding on my energy conservation
program, I considered rationing and higher gasoline taxes as
alternatives. In my judgment, neither would achieve the desired results
and both would produce unacceptable inequities.

A massive program must be initiated to increase energy supply, to cut
demand, and provide new standby emergency programs to achieve the
independence we want by 1985. The largest part of increased oil
production must come from new frontier areas on the Outer Continental
Shelf and from the Naval Petroleum Reserve No. 4 in Alaska. It is the
intent of this Administration to move ahead with exploration, leasing,
and production on those frontier areas of the Outer Continental Shelf
where the environmental risks are acceptable.

Use of our most abundant domestic resource--coal--is severely limited.
We must strike a reasonable compromise on environmental concerns with
coal. I am submitting Clean Air amendments which will allow greater coal
use without sacrificing clean air goals.

I vetoed the strip mining legislation passed by the last Congress. With
appropriate changes, I will sign a revised version when it comes to the
White House.

I am proposing a number of actions to energize our nuclear power
program. I will submit legislation to expedite nuclear leasing and the
rapid selection of sites.

In recent months, utilities have cancelled or postponed over 60 percent
of planned nuclear expansion and 30 percent of planned additions to
non-nuclear capacity. Financing problems for that industry are
worsening. I am therefore recommending that the 1-year investment tax
credit of 12 percent be extended an additional 2 years to specifically
speed the construction of powerplants that do not use natural gas or
oil. I am also submitting proposals for selective reform of State
utility commission regulations.

To provide the critical stability for our domestic energy production in
the face of world price uncertainty, I will request legislation to
authorize and require tariffs, import quotas, or price floors to protect
our energy prices at levels which will achieve energy independence.

Increasing energy supplies is not enough. We must take additional steps
to cut long-term consumption. I therefore propose to the Congress:
legislation to make thermal efficiency standards mandatory for all new
buildings in the United States; a new tax credit of up to $150 for those
homeowners who install insulation equipment; the establishment of an
energy conservation program to help low-income families purchase
insulation supplies; legislation to modify and defer automotive
pollution standards for 5 years, which will enable us to improve
automobile gas mileage by 40 percent by 1980.

These proposals and actions, cumulatively, can reduce our dependence on
foreign energy supplies from 3 to 5 million barrels per day by 1985. To
make the United States invulnerable to foreign disruption, I propose
standby emergency legislation and a strategic storage program of 1
billion barrels of oil for domestic needs and 300 million barrels for
national defense purposes.

I will ask for the funds needed for energy research and development
activities. I have established a goal of 1 million barrels of synthetic
fuels and shale oil production per day by 1985 together with an
incentive program to achieve it.

I have a very deep belief in America's capabilities. Within the next 10
years, my program envisions: 200 major nuclear powerplants; 250 major
new coal mines; 150 major coal-fired powerplants; 30 major new
refineries; 20 major new synthetic fuel plants; the drilling of many
thousands of new oil wells; the insulation of 18 million homes; and the
manufacturing and the sale of millions of new automobiles, trucks, and
buses that use much less fuel.

I happen to believe that we can do it. In another crisis--the one in
1942 President Franklin D. Roosevelt said this country would build
60,000 military aircraft. By 1943, production in that program had
reached 125,000 aircraft annually. They did it then. We can do it now.

If the Congress and the American people will work with me to attain
these targets, they will be achieved and will be surpassed. From
adversity, let us seize opportunity. Revenues of some $30 billion from
higher energy taxes designed to encourage conservation must be refunded
to the American people in a manner which corrects distortions in our tax
system wrought by inflation.

People have been pushed into higher tax brackets by inflation, with
consequent reduction in their actual spending power. Business taxes are
similarly distorted because inflation exaggerates reported profits,
resulting in excessive taxes.

Accordingly, I propose that future individual income taxes be reduced by
$16.5 billion. This will be done by raising the low-income allowance and
reducing tax rates. This continuing tax cut will primarily benefit
lower- and middle-income taxpayers.

For example, a typical family of four with a gross income of $5,600 now
pays $185 in Federal income taxes. Under this tax cut plan, they would
pay nothing. A family of four with a gross income of $12,500 now pays
$1,260 in Federal taxes. My proposal reduces that total by $300.
Families grossing $20,000 would receive a reduction of $210.

Those with the very lowest incomes, who can least afford higher costs,
must also be compensated. I propose a payment of $80 to every person 18
years of age and older in that very limited category.

State and local governments will receive $2 billion in additional
revenue sharing to offset their increased energy costs.

To offset inflationary distortions and to generate more economic
activity, the corporate tax rate will be reduced from 48 percent to 42
percent.

Now let me turn, if I might, to the international dimension of the
present crisis. At no time in our peacetime history has the state of the
Nation depended more heavily on the state of the world. And seldom, if
ever, has the state of the world depended more heavily on the state of
our Nation.

The economic distress is global. We will not solve it at home unless we
help to remedy the profound economic dislocation abroad. World trade and
monetary structure provides markets, energy, food, and vital raw
materials--for all nations. This international system is now in
jeopardy.

This Nation can be proud of significant achievements in recent years in
solving problems and crises. The Berlin agreement, the SALT agreements,
our new relationship with China, the unprecedented efforts in the Middle
East are immensely encouraging. But the world is not free from crisis.
In a world of 150 nations, where nuclear technology is proliferating and
regional conflicts continue, international security cannot be taken for
granted.

So, let there be no mistake about it: International cooperation is a
vital factor of our lives today. This is not a moment for the American
people to turn inward. More than ever before, our own well-being depends
on America's determination and America's leadership in the whole wide
world.

We are a great Nation--spiritually, politically, militarily,
diplomatically, and economically. America's commitment to international
security has sustained the safety of allies and friends in many
areas--in the Middle East, in Europe, and in Asia. Our turning away
would unleash new instabilities, new dangers around the globe, which, in
turn, would threaten our own security.

At the end of World War II, we turned a similar challenge into an
historic opportunity and, I might add, an historic achievement. An old
order was in disarray; political and economic institutions were
shattered. In that period, this Nation and its partners built new
institutions, new mechanisms of mutual support and cooperation. Today,
as then, we face an historic opportunity. If we act imaginatively and
boldly, as we acted then, this period will in retrospect be seen as one
of the great creative moments of our Nation's history. The whole world
is watching to see how we respond.

A resurgent American economy would do more to restore the confidence of
the world in its own future than anything else we can do. The program
that this Congress passes can demonstrate to the world that we have
started to put our own house in order. If we can show that this Nation
is able and willing to help other nations meet the common challenge, it
can demonstrate that the United States will fulfill its responsibilities
as a leader among nations.

Quite frankly, at stake is the future of industrialized democracies,
which have perceived their destiny in common and sustained it in common
for 30 years.

The developing nations are also at a turning point. The poorest nations
see their hopes of feeding their hungry and developing their societies
shattered by the economic crisis. The long-term economic future for the
producers of raw materials also depends on cooperative solutions.

Our relations with the Communist countries are a basic factor of the
world environment. We must seek to build a long-term basis for
coexistence. We will stand by our principles. We will stand by our
interests. We will act firmly when challenged. The kind of a world we
want depends on a broad policy of creating mutual incentives for
restraint and for cooperation.

As we move forward to meet our global challenges and opportunities, we
must have the tools to do the job.

Our military forces are strong and ready. This military strength deters
aggression against our allies, stabilizes our relations with former
adversaries, and protects our homeland. Fully adequate conventional and
strategic forces cost many, many billions, but these dollars are sound
insurance for our safety and for a more peaceful world.

Military strength alone is not sufficient. Effective diplomacy is also
essential in preventing conflict, in building world understanding. The
Vladivostok negotiations with the Soviet Union represent a major step in
moderating strategic arms competition. My recent discussions with the
leaders of the Atlantic community, Japan, and South Korea have
contributed to meeting the common challenge.

But we have serious problems before us that require cooperation between
the President and the Congress. By the Constitution and tradition, the
execution of foreign policy is the responsibility of the President.

In recent years, under the stress of the Vietnam war, legislative
restrictions on the President's ability to execute foreign policy and
military decisions have proliferated. As a Member of the Congress, I
opposed some and I approved others. As President, I welcome the advice
and cooperation of the House and the Senate.

But if our foreign policy is to be successful, we cannot rigidly
restrict in legislation the ability of the President to act. The conduct
of negotiations is ill-suited to such limitations. Legislative
restrictions, intended for the best motives and purposes, can have the
opposite result, as we have seen most recently in our trade relations
with the Soviet Union.

For my part, I pledge this Administration will act in the closest
consultation with the Congress as we face delicate situations and
troubled times throughout the globe.

When I became President only 5 months ago, I promised the last Congress
a policy of communication, conciliation, compromise, and cooperation. I
renew that pledge to the new Members of this Congress.

Let me sum it up. America needs a new direction, which I have sought to
chart here today--a change of course which will: put the unemployed back
to work; increase real income and production; restrain the growth of
Federal Government spending; achieve energy independence; and advance
the cause of world understanding.

We have the ability. We have the know-how. In partnership with the
American people, we will achieve these objectives.

As our 200th anniversary approaches, we owe it to ourselves and to
posterity to rebuild our political and economic strength. Let us make
America once again and for centuries more to come what it has so long
been--a stronghold and a beacon-light of liberty for the whole world.

Thank you.

***

State of the Union Address
Gerald R. Ford
January 19, 1976

Mr. Speaker, Mr. Vice President, Members of the 94th Congress, and
distinguished guests:

As we begin our Bicentennial, America is still one of the youngest
nations in recorded history. Long before our forefathers came to these
shores, men and women had been struggling on this planet to forge a
better life for themselves and their families.

In man's long, upward march from savagery and slavery--throughout the
nearly 2,000 years of the Christian calendar, the nearly 6,000 years of
Jewish reckoning--there have been many deep, terrifying valleys, but
also many bright and towering peaks.

One peak stands highest in the ranges of human history. One example
shines forth of a people uniting to produce abundance and to share the
good life fairly and with freedom. One union holds out the promise of
justice and opportunity for every citizen: That union is the United
States of America.

We have not remade paradise on Earth. We know perfection will not be
found here. But think for a minute how far we have come in 200 years.

We came from many roots, and we have many branches. Yet all Americans
across the eight generations that separate us from the stirring deeds of
1776, those who know no other homeland and those who just found refuge
among our shores, say in unison:

I am proud of America, and I am proud to be an American. Life will be a
little better here for my children than for me. I believe this not
because I am told to believe it, but because life has been better for me
than it was for my father and my mother. I know it will be better for my
children because my hands, my brains, my voice, and my vote can help
make it happen.

It has happened here in America. It has happened to you and to me.
Government exists to create and preserve conditions in which people can
translate their ideas into practical reality. In the best of times, much
is lost in translation. But we try. Sometimes we have tried and failed.
Always we have had the best of intentions.

But in the recent past, we sometimes forgot the sound principles that
guided us through most of our history. We wanted to accomplish great
things and solve age-old problems. And we became overconfident of our
abilities. We tried to be a policeman abroad and the indulgent parent
here at home.

We thought we could transform the country through massive national
programs, but often the programs did not work. Too often they only made
things worse. In our rush to accomplish great deeds quickly, we trampled
on sound principles of restraint and endangered the rights of
individuals. We unbalanced our economic system by the huge and
unprecedented growth of Federal expenditures and borrowing. And we were
not totally honest with ourselves about how much these programs would
cost and how we would pay for them. Finally, we shifted our emphasis
from defense to domestic problems while our adversaries continued a
massive buildup of arms.

The time has now come for a fundamentally different approach for a new
realism that is true to the great principles upon which this Nation was
founded.

We must introduce a new balance to our economy--a balance that favors
not only sound, active government but also a much more vigorous, healthy
economy that can create new jobs and hold down prices.

We must introduce a new balance in the relationship between the
individual and the government--a balance that favors greater individual
freedom and self-reliance.

We must strike a new balance in our system of federalism--a balance that
favors greater responsibility and freedom for the leaders of our State
and local governments.

We must introduce a new balance between the spending on domestic
programs and spending on defense--a balance that ensures we will fully
meet our obligation to the needy while also protecting our security in a
world that is still hostile to freedom.

And in all that we do, we must be more honest with the American people,
promising them no more than we can deliver and delivering all that we
promise.

The genius of America has been its incredible ability to improve the
lives of its citizens through a unique combination of governmental and
free citizen activity.

History and experience tells us that moral progress cannot come in
comfortable and in complacent times, but out of trial and out of
confusion. Tom Paine aroused the troubled Americans of 1776 to stand up
to the times that try men's souls because the harder the conflict, the
more glorious the triumph.

Just a year ago I reported that the state of the Union was not good.
Tonight, I report that the state of our Union is better--in many ways a
lot better--but still not good enough.

To paraphrase Tom Paine, 1975 was not a year for summer soldiers and
sunshine patriots. It was a year of fears and alarms and of dire
forecasts--most of which never happened and won't happen.

As you recall, the year 1975 opened with rancor and with bitterness.
Political misdeeds of the past had neither been forgotten nor forgiven.
The longest, most divisive war in our history was winding toward an
unhappy conclusion. Many feared that the end of that foreign war of men
and machines meant the beginning of a domestic war of recrimination and
reprisal. Friends and adversaries abroad were asking whether America had
lost its nerve. Finally, our economy was ravaged by inflation--inflation
that was plunging us into the worst recession in four decades. At the
same time, Americans became increasingly alienated from big
institutions. They were steadily losing confidence, not just in big
government but in big business, big labor, and big education, among
others. Ours was a troubled land.

And so, 1975 was a year of hard decisions, difficult compromises, and a
new realism that taught us something important about America. It brought
back a needed measure of common sense, steadfastness, and
self-discipline.

Americans did not panic or demand instant but useless cures. In all
sectors, people met their difficult problems with the restraint and with
responsibility worthy of their great heritage.

Add up the separate pieces of progress in 1975, subtract the setbacks,
and the sum total shows that we are not only headed in a new direction,
a direction which I proposed 12 months ago, but it turned out to be the
right direction.

It is the right direction because it follows the truly revolutionary
American concept of 1776, which holds that in a free society the making
of public policy and successful problem-solving involves much more than
government. It involves a full partnership among all branches and all
levels of government, private institutions, and individual citizens.

Common sense tells me to stick to that steady course.

Take the state of our economy. Last January, most things were rapidly
getting worse. This January, most things are slowly but surely getting
better.

The worst recession since World War II turned around in April. The best
cost-of-living news of the past year is that double-digit inflation of
12 percent or higher was cut almost in half. The worst--unemployment
remains far too high.

Today, nearly 1,700,000 more Americans are working than at the bottom of
the recession. At year's end, people were again being hired much faster
than they were being laid off.

Yet, let's be honest. Many Americans have not yet felt these changes in
their daily lives. They still see prices going up far too fast, and they
still know the fear of unemployment.

We are also a growing nation. We need more and more jobs every year.
Today's economy has produced over 85 million jobs for Americans, but we
need a lot more jobs, especially for the young.

My first objective is to have sound economic growth without inflation.

We all know from recent experience what runaway inflation does to ruin
every other worthy purpose. We are slowing it. We must stop it cold.

For many Americans, the way to a healthy, noninflationary economy has
become increasingly apparent. The Government must stop spending so much
and stop borrowing so much of our money. More money must remain in
private hands where it will do the most good. To hold down the cost of
living, we must hold down the cost of government.

In the past decade, the Federal budget has been growing at an average
rate of over 10 percent a year. The budget I am submitting Wednesday
cuts this rate of growth in half. I have kept my promise to submit a
budget for the next fiscal year of $395 billion. In fact, it is $394.2
billion.

By holding down the growth of Federal spending, we can afford additional
tax cuts and return to the people who pay taxes more decisionmaking
power over their own lives.

Last month I signed legislation to extend the 1975 tax reductions for
the first 6 months of this year. I now propose that effective July 1,
1976, we give our taxpayers a tax cut of approximately $10 billion more
than Congress agreed to in December.

My broader tax reduction would mean that for a family of four making
$15,000 a year, there will be $227 more in take-home pay annually.
Hardworking Americans caught in the middle can really use that kind of
extra cash.

My recommendations for a firm restraint on the growth of Federal
spending and for greater tax reduction are simple and straightforward.
For every dollar saved in cutting the growth in the Federal budget, we
can have an added dollar of Federal tax reduction.

We can achieve a balanced budget by 1979 if we have the courage and the
wisdom to continue to reduce the growth of Federal spending.

One test of a healthy economy is a job for every American who wants to
work. Government--our kind of government--cannot create that many jobs.
But the Federal Government can create conditions and incentives for
private business and industry to make more and more jobs.

Five out of six jobs in this country are in private business and in
industry. Common sense tells us this is the place to look for more jobs
and to find them faster. I mean real, rewarding, permanent jobs.

To achieve this we must offer the American people greater incentives to
invest in the future. My tax proposals are a major step in that
direction. To supplement these proposals, I ask that Congress enact
changes in Federal tax laws that will speed up plant expansion and the
purchase of new equipment. My recommendations will concentrate this
job-creation tax incentive in areas where the unemployment rate now runs
over 7 percent. Legislation to get this started must be approved at the
earliest possible date.

Within the strict budget total that I will recommend for the coming
year, I will ask for additional housing assistance for 500,000 families.
These programs will expand housing opportunities, spur construction, and
help to house moderate- and low-income families.

We had a disappointing year in the housing industry in 1975. But with
lower interest rates and available mortgage money, we can have a healthy
recovery in 1976.

A necessary condition of a healthy economy is freedom from the petty
tyranny of massive government regulation. We are wasting literally
millions of working hours costing billions of taxpayers' and consumers'
dollars because of bureaucratic redtape. The American farmer, who now
feeds 215 million Americans, but also millions worldwide, has shown how
much more he can produce without the shackles of government control.

Now, we badly need reforms in other key areas in our economy: the
airlines, trucking, railroads, and financial institutions. I have
submitted concrete plans in each of these areas, not to help this or
that industry, but to foster competition and to bring prices down for
the consumer.

This administration, in addition, will strictly enforce the Federal
antitrust laws for the very same purposes.

Taking a longer look at America's future, there can be neither sustained
growth nor more jobs unless we continue to have an assured supply of
energy to run our economy. Domestic production of oil and gas is still
declining. Our dependence on foreign oil at high prices is still too
great, draining jobs and dollars away from our own economy at the rate
of $125 per year for every American.

Last month, I signed a compromise national energy bill which enacts a
part of my comprehensive energy independence program. This legislation
was late, not the complete answer to energy independence, but still a
start in the right direction.

I again urge the Congress to move ahead immediately on the remainder of
my energy proposals to make America invulnerable to the foreign oil
cartel.

My proposals, as all of you know, would reduce domestic natural gas
shortages; allow production from Federal petroleum reserves; stimulate
effective conservation, including revitalization of our railroads and
the expansion of our urban transportation systems; develop more and
cleaner energy from our vast coal resources; expedite clean and safe
nuclear power production; create a new national energy independence
authority to stimulate vital energy investment; and accelerate
development of technology to capture energy from the Sun and the Earth
for this and future generations.

Also, I ask, for the sake of future generations, that we preserve the
family farm and family-owned small business. Both strengthen America and
give stability to our economy. I will propose estate tax changes so that
family businesses and family farms can be handed down from generation to
generation without having to be sold to pay taxes.

I propose tax changes to encourage people to invest in America's future,
and their own, through a plan that gives moderate-income families income
tax benefits if they make long-term investments in common stock in
American companies.

The Federal Government must and will respond to clear-cut national
needs--for this and future generations.

Hospital and medical services in America are among the best in the
world, but the cost of a serious and extended illness can quickly wipe
out a family's lifetime savings. Increasing health costs are of deep
concern to all and a powerful force pushing up the cost of living. The
burden of catastrophic illness can be borne by very few in our society.
We must eliminate this fear from every family.

I propose catastrophic health insurance for everybody covered by
Medicare. To finance this added protection, fees for short-term care
will go up somewhat, but nobody after reaching age 65 will have to pay
more than $500 a year for covered hospital or nursing home care, nor
more than $250 for 1 year's doctor bills.

We cannot realistically afford federally dictated national health
insurance providing full coverage for all 215 million Americans. The
experience of other countries raises questions about the quality as well
as the cost of such plans. But I do envision the day when we may use the
private health insurance system to offer more middle-income families
high quality health services at prices they can afford and shield them
also from their catastrophic illnesses.

Using resources now available, I propose improving the Medicare and
other Federal health programs to help those who really need
protection--older people and the poor. To help States and local
governments give better health care to the poor, I propose that we
combine 16 existing Federal programs, including Medicaid, into a single
$10 billion Federal grant.

Funds would be divided among States under a new formula which provides a
larger share of Federal money to those States that have a larger share
of low-income families.

I will take further steps to improve the quality of medical and hospital
care for those who have served in our Armed Forces.

Now let me speak about social security. Our Federal social security
system for people who have worked and contributed to it for all their
lives is a vital part of our economic system. Its value is no longer
debatable. In my budget for fiscal year 1977, I am recommending that the
full cost-of-living increases in the social security benefits be paid
during the coming year.

But I am concerned about the integrity of our Social Security Trust Fund
that enables people--those retired and those still working who will
retire--to count on this source of retirement income. Younger workers
watch their deductions rise and wonder if they will be adequately
protected in the future. We must meet this challenge head on. Simple
arithmetic warns all of us that the Social Security Trust Fund is headed
for trouble. Unless we act soon to make sure the fund takes in as much
as it pays out, there will be no security for old or for young.

I must, therefore, recommend a three-tenths of 1 percent increase in
both employer and employee social security taxes effective January 1,
1977. This will cost each covered employee less than 1 extra dollar a
week and will ensure the integrity of the trust fund.

As we rebuild our economy, we have a continuing responsibility to
provide a temporary cushion to the unemployed. At my request, the
Congress enacted two extensions and two expansions in unemployment
insurance which helped those who were jobless during 1975. These
programs will continue in 1976.

In my fiscal year 1977 budget, I am also requesting funds to continue
proven job training and employment opportunity programs for millions of
other Americans.

Compassion and a sense of community--two of America's greatest strengths
throughout our history--tell us we must take care of our neighbors who
cannot take care of themselves. The host of Federal programs in this
field reflect our generosity as a people.

But everyone realizes that when it comes to welfare, government at all
levels is not doing the job well. Too many of our welfare programs are
inequitable and invite abuse. Too many of our welfare programs have
problems from beginning to end. Worse, we are wasting badly needed
resources without reaching many of the truly needy.

Complex welfare programs cannot be reformed overnight. Surely we cannot
simply dump welfare into the laps of the 50 States, their local
taxpayers, or their private charities, and just walk away from it. Nor
is it the right time for massive and sweeping changes while we are still
recovering from the recession.

Nevertheless, there are still plenty of improvements that we can make. I
will ask Congress for Presidential authority to tighten up the rules for
eligibility and benefits.

Last year I twice sought long overdue reform of the scandal-riddled food
stamp program. This year I say again: Let's give food stamps to those
most in need. Let's not give any to those who don't need them.

Protecting the life and property of the citizen at home is the
responsibility of all public officials, but is primarily the job of
local and State law enforcement authorities.

Americans have always found the very thought of a Federal police force
repugnant, and so do I. But there are proper ways in which we can help
to insure domestic tranquility as the Constitution charges us.

My recommendations on how to control violent crime were submitted to the
Congress last June with strong emphasis on protecting the innocent
victims of crime. To keep a convicted criminal from committing more
crimes, we must put him in prison so he cannot harm more law-abiding
citizens. To be effective, this punishment must be swift and it must be
certain.

Too often, criminals are not sent to prison after conviction but are
allowed to return to the streets. Some judges are reluctant to send
convicted criminals to prison because of inadequate facilities. To
alleviate this problem at the Federal level, my new budget proposes the
construction of four new Federal facilities.

To speed Federal justice, I propose an increase this year in the United
States attorneys prosecuting Federal crimes and the reinforcement of the
number of United States marshals. Additional Federal judges are needed,
as recommended by me and the Judicial Conference.

Another major threat to every American's person and property is the
criminal carrying a handgun. The way to cut down on the criminal use of
guns is not to take guns away from the law-abiding citizen, but to
impose mandatory sentences for crimes in which a gun is used, make it
harder to obtain cheap guns for criminal purposes, and concentrate gun
control enforcement in highcrime areas.

My budget recommends 500 additional Federal agents in the 11 largest
metropolitan high-crime areas to help local authorities stop criminals
from selling and using handguns.

The sale of hard drugs is tragically on the increase again. I have
directed all agencies of the Federal Government to step up law
enforcement efforts against those who deal in drugs. In 1975, I am glad
to report, Federal agents seized substantially more heroin coming into
our country than in 1974.

As President, I have talked personally with the leaders of Mexico,
Colombia, and Turkey to urge greater efforts by their Governments to
control effectively the production and shipment of hard drugs.

I recommended months ago that the Congress enact mandatory fixed
sentences for persons convicted of Federal crimes involving the sale of
hard drugs. Hard drugs, we all know, degrade the spirit as they destroy
the body of their users.

It is unrealistic and misleading to hold out the hope that the Federal
Government can move into every neighborhood and clean up crime. Under
the Constitution, the greatest responsibility for curbing crime lies
with State and local authorities. They are the frontline fighters in the
war against crime.

There are definite ways in which the Federal Government can help them. I
will propose in the new budget that Congress authorize almost $7 billion
over the next 5 years to assist State and local governments to protect
the safety and property of all their citizens.

As President, I pledge the strict enforcement of Federal laws and--by
example, support, and leadership--to help State and local authorities
enforce their laws. Together, we must protect the victims of crime and
ensure domestic tranquility.

Last year I strongly recommended a 5-year extension of the existing
revenue sharing legislation, which thus far has provided $23 1/2 billion
to help State and local units of government solve problems at home. This
program has been effective with decisionmaking transferred from the
Federal Government to locally elected officials. Congress must act this
year, or State and local units of government will have to drop programs
or raise local taxes.

Including my health care program reforms, I propose to consolidate some
59 separate Federal programs and provide flexible Federal dollar grants
to help States, cities, and local agencies in such important areas as
education, child nutrition, and social services. This flexible system
will do the job better and do it closer to home.

The protection of the lives and property of Americans from foreign
enemies is one of my primary responsibilities as President.

In a world of instant communications and intercontinental ballistic
missiles, in a world economy that is global and interdependent, our
relations with other nations become more, not less, important to the
lives of Americans.

America has had a unique role in the world since the day of our
independence 200 years ago. And ever since the end of World War II, we
have borne--successfully--a heavy responsibility for ensuring a stable
world order and hope for human progress.

Today, the state of our foreign policy is sound and strong. We are at
peace, and I will do all in my power to keep it that way.

Our military forces are capable and ready. Our military power is without
equal, and I intend to keep it that way.

Our principal alliances with the industrial democracies of the Atlantic
community and Japan have never been more solid.

A further agreement to limit the strategic arms race may be achieved.

We have an improving relationship with China, the world's most populous
nation.

The key elements for peace among the nations of the Middle East now
exist. Our traditional friendships in Latin America, Africa, and Asia
continue.

We have taken the role of leadership in launching a serious and hopeful
dialog between the industrial world and the developing world.

We have helped to achieve significant reform of the international
monetary system.

We should be proud of what America, what our country, has accomplished
in these areas, and I believe the American people are.

The American people have heard too much about how terrible our mistakes,
how evil our deeds, and how misguided our purposes. The American people
know better.

The truth is we are the world's greatest democracy. We remain the symbol
of man's aspiration for liberty and well-being. We are the embodiment of
hope for progress.

I say it is time we quit downgrading ourselves as a nation. Of course,
it is our responsibility to learn the right lesson from past mistakes.
It is our duty to see that they never happen again. But our greater duty
is to look to the future. The world's troubles will not go away.

The American people want strong and effective international and defense
policies. In our constitutional system, these policies should reflect
consultation and accommodation between the President and the Congress.
But in the final analysis, as the framers of our Constitution knew from
hard experience, the foreign relations of the United States can be
conducted effectively only if there is strong central direction that
allows flexibility of action. That responsibility clearly rests with the
President.

I pledge to the American people policies which seek a secure, just, and
peaceful world. I pledge to the Congress to work with you to that end.

We must not face a future in which we can no longer help our friends,
such as Angola, even in limited and carefully controlled ways. We must
not lose all capacity to respond short of military intervention.

Some hasty actions of the Congress during the past year--most recently
in respect to Angola--were, in my view, very shortsighted.
Unfortunately, they are still very much on the minds of our allies and
our adversaries.

A strong defense posture gives weight to our values and our views in
international negotiations. It assures the vigor of our alliances. And
it sustains our efforts to promote settlements of international
conflicts. Only from a position of strength can we negotiate a balanced
agreement to limit the growth of nuclear arms. Only a balanced agreement
will serve our interests and minimize the threat of nuclear
confrontation.

The defense budget I will submit to the Congress for fiscal year 1977
will show an essential increase over the current year. It provides for
real growth in purchasing power over this year's defense budget, which
includes the cost of the all-volunteer force.

We are continuing to make economies to enhance the efficiency of our
military forces. But the budget I will submit represents the necessity
of American strength for the real world in which we live.

As conflict and rivalry persist in the world, our United States
intelligence capabilities must be the best in the world.

The crippling of our foreign intelligence services increases the danger
of American involvement in direct armed conflict. Our adversaries are
encouraged to attempt new adventures while our own ability to monitor
events and to influence events short of military action is undermined.
Without effective intelligence capability, the United States stands
blindfolded and hobbled.

In the near future, I will take actions to reform and strengthen our
intelligence community. I ask for your positive cooperation. It is time
to go beyond sensationalism and ensure an effective, responsible, and
responsive intelligence capability.

Tonight I have spoken about our problems at home and abroad. I have
recommended policies that will meet the challenge of our third century.
I have no doubt that our Union will endure, better, stronger, and with
more individual freedom. We can see forward only dimly--1 year, 5 years,
a generation perhaps. Like our forefathers, we know that if we meet the
challenges of our own time with a common sense of purpose and
conviction, if we remain true to our Constitution and to our ideals,
then we can know that the future will be better than the past.

I see America today crossing a threshold, not just because it is our
Bicentennial but because we have been tested in adversity. We have taken
a new look at what we want to be and what we want our Nation to become.

I see America resurgent, certain once again that life will be better for
our children than it is for us, seeking strength that cannot be counted
in megatons and riches that cannot be eroded by inflation.

I see these United States of America moving forward as before toward a
more perfect Union where the government serves and the people rule.

We will not make this happen simply by making speeches, good or bad,
yours or mine, but by hard work and hard decisions made with courage and
with common sense.

I have heard many inspiring Presidential speeches, but the words I
remember best were spoken by Dwight D. Eisenhower. "America is not good
because it is great," the President said. "America is great because it
is good."

President Eisenhower was raised in a poor but religious home in the
heart of America. His simple words echoed President Lincoln's eloquent
testament that "right makes might." And Lincoln in turn evoked the
silent image of George Washington kneeling in prayer at Valley Forge.

So, all these magic memories which link eight generations of Americans
are summed up in the inscription just above me. How many times have we
seen it? "In God We Trust."

Let us engrave it now in each of our hearts as we begin our
Bicentennial.

***

State of the Union Address
Gerald R. Ford
January 12, 1977

Mr. Speaker, Mr. Vice President, Members of the 95th Congress, and
distinguished guests:

In accordance with the Constitution, I come before you once again to
report on the state of the Union.

This report will be my last--maybe--[laughter]--but for the Union it is
only the first of such reports in our third century of independence, the
close of which none of us will ever see. We can be confident, however,
that 100 years from now a freely elected President will come before a
freely elected Congress chosen to renew our great Republic's pledge to
the Government of the people, by the people, and for the people.

For my part I pray the third century we are beginning will bring to all
Americans, our children and their children's children, a greater measure
of individual equality, opportunity, and justice, a greater abundance of
spiritual and material blessings, and a higher quality of life, liberty,
and the pursuit of happiness.

The state of the Union is a measurement of the many elements of which it
is composed--a political union of diverse States, an economic union of
varying interests, an intellectual union of common convictions, and a
moral union of immutable ideals.

Taken in sum, I can report that the state of the Union is good. There is
room for improvement, as always, but today we have a more perfect Union
than when my stewardship began.

As a people we discovered that our Bicentennial was much more than a
celebration of the past; it became a joyous reaffirmation of all that it
means to be Americans, a confirmation before all the world of the
vitality and durability of our free institutions. I am proud to have
been privileged to preside over the affairs of our Federal Government
during these eventful years when we proved, as I said in my first words
upon assuming office, that "our Constitution works; our great Republic
is a Government of laws and not of men. Here the people rule."

The people have spoken; they have chosen a new President and a new
Congress to work their will. I congratulate you--particularly the new
Members--as sincerely as I did President-elect Carter. In a few days it
will be his duty to outline for you his priorities and legislative
recommendations. Tonight I will not infringe on that responsibility, but
rather wish him the very best in all that is good for our country.

During the period of my own service in this Capitol and in the White
House, I can recall many orderly transitions of governmental
responsibility--of problems as well as of position, of burdens as well
as of power. The genius of the American system is that we do this so
naturally and so normally. There are no soldiers marching in the street
except in the Inaugural Parade; no public demonstrations except for some
of the dancers at the Inaugural Ball; the opposition party doesn't go
underground, but goes on functioning vigorously in the Congress and in
the country; and our vigilant press goes right on probing and publishing
our faults and our follies, confirming the wisdom of the framers of the
first amendment.

Because of the transfer of authority in our form of government affects
the state of the Union and of the world, I am happy to report to you
that the current transition is proceeding very well. I was determined
that it should; I wanted the new President to get off on an easier start
than I had.

When I became President on August 9, 1974, our Nation was deeply divided
and tormented. In rapid succession the Vice President and the President
had resigned in disgrace. We were still struggling with the
after-effects of a long, unpopular, and bloody war in Southeast Asia.
The economy was unstable and racing toward the worst recession in 40
years. People were losing jobs. The cost of living was soaring. The
Congress and the Chief Executive were at loggerheads. The integrity of
our constitutional process and other institutions was being questioned.
For more than 15 years domestic spending had soared as Federal programs
multiplied, and the expense escalated annually. During the same period
our national security needs were steadily shortchanged. In the grave
situation which prevailed in August 1974, our will to maintain our
international leadership was in doubt.

I asked for your prayers and went to work.

In January 1975 I reported to the Congress that the state of the Union
was not good. I proposed urgent action to improve the economy and to
achieve energy independence in 10 years. I reassured America's allies
and sought to reduce the danger of confrontation with potential
adversaries. I pledged a new direction for America. 1975 was a year of
difficult decisions, but Americans responded with realism, common sense,
and self-discipline.

By January 1976 we were headed in a new direction, which I hold to be
the right direction for a free society. It was guided by the belief that
successful problem-solving requires more than Federal action alone, that
it involves a full partnership among all branches and all levels of
government and public policies which nurture and promote the creative
energies of private enterprises, institutions, and individual citizens.

A year ago I reported that the state of the Union was better--in many
ways a lot better--but still not good enough. Common sense told me to
stick to the steady course we were on, to continue to restrain the
inflationary growth of government, to reduce taxes as well as spending,
to return local decisions to local officials, to provide for long-range
sufficiency in energy and national security needs. I resisted the
immense pressures of an election year to open the floodgates of Federal
money and the temptation to promise more than I could deliver. I told it
as it was to the American people and demonstrated to the world that in
our spirited political competition, as in this chamber, Americans can
disagree without being disagreeable.

Now, after 30 months as your President, I can say that while we still
have a way to go, I am proud of the long way we have come together.

I am proud of the part I have had in rebuilding confidence in the
Presidency, confidence in our free system, and confidence in our future.
Once again, Americans believe in themselves, in their leaders, and in
the promise that tomorrow holds for their children.

I am proud that today America is at peace. None of our sons are fighting
and dying in battle anywhere in the world. And the chance for peace
among all nations is improved by our determination to honor our vital
commitments in defense of peace and freedom.

I am proud that the United States has strong defenses, strong alliances,
and a sound and courageous foreign policy.

Our alliances with major partners, the great industrial democracies of
Western Europe, Japan, and Canada, have never been more solid.
Consultations on mutual security, defense, and East-West relations have
grown closer. Collaboration has branched out into new fields such as
energy, economic policy, and relations with the Third World. We have
used many avenues for cooperation, including summit meetings held among
major allied countries. The friendship of the democracies is deeper,
warmer, and more effective than at any time in 30 years.

We are maintaining stability in the strategic nuclear balance and
pushing back the specter of nuclear war. A decisive step forward was
taken in the Vladivostok Accord which I negotiated with General
Secretary Brezhnev--joint recognition that an equal ceiling should be
placed on the number of strategic weapons on each side. With resolve and
wisdom on the part of both nations, a good agreement is well within
reach this year.

The framework for peace in the Middle East has been built. Hopes for
future progress in the Middle East were stirred by the historic
agreements we reached and the trust and confidence that we formed.
Thanks to American leadership, the prospects for peace in the Middle
East are brighter than they have been in three decades. The Arab states
and Israel continue to look to us to lead them from confrontation and
war to a new era of accommodation and peace. We have no alternative but
to persevere, and I am sure we will. The opportunities for a final
settlement are great, and the price of failure is a return to the
bloodshed and hatred that for too long have brought tragedy to all of
the peoples of this area and repeatedly edged the world to the brink of
war.

Our relationship with the People's Republic of China is proving its
importance and its durability. We are finding more and more common
ground between our two countries on basic questions of international
affairs.

In my two trips to Asia as President, we have reaffirmed America's
continuing vital interest in the peace and security of Asia and the
Pacific Basin, established a new partnership with Japan, confirmed our
dedication to the security of Korea, and reinforced our ties with the
free nations of Southeast Asia.

An historic dialog has begun between industrial nations and developing
nations. Most proposals on the table are the initiatives of the United
States, including those on food, energy, technology, trade, investment,
and commodities. We are well launched on this process of shaping
positive and reliable economic relations between rich nations and poor
nations over the long term.

We have made progress in trade negotiations and avoided protectionism
during recession. We strengthened the international monetary system.
During the past 2 years the free world's most important economic powers
have already brought about important changes that serve both developed
and developing economies. The momentum already achieved must be nurtured
and strengthened, for the prosperity of the rich and poor depends upon
it.

In Latin America, our relations have taken on a new maturity and a sense
of common enterprise.

In Africa the quest for peace, racial justice, and economic progress is
at a crucial point. The United States, in close cooperation with the
United Kingdom, is actively engaged in this historic process. Will
change come about by warfare and chaos and foreign intervention? Or will
it come about by negotiated and fair solutions, ensuring majority rule,
minority rights, and economic advance? America is committed to the side
of peace and justice and to the principle that Africa should shape its
own future, free of outside intervention.

American leadership has helped to stimulate new international efforts to
stem the proliferation of nuclear weapons and to shape a comprehensive
treaty governing the use of oceans.

I am gratified by these accomplishments. They constitute a record of
broad success for America and for the peace and prosperity of all
mankind. This administration leaves to its successor a world in better
condition than we found. We leave, as well, a solid foundation for
progress on a range of issues that are vital to the well-being of
America.

What has been achieved in the field of foreign affairs and what can be
accomplished by the new administration demonstrate the genius of
Americans working together for the common good. It is this, our
remarkable ability to work together, that has made us a unique nation.
It is Congress, the President, and the people striving for a better
world.

I know all patriotic Americans want this Nation's foreign policy to
succeed. I urge members of my party in this Congress to give the new
President loyal support in this area. I express the hope that this new
Congress will reexamine its constitutional role in international
affairs.

The exclusive right to declare war, the duty to advise and consent on
the part of the Senate, the power of the purse on the part of the House
are ample authority for the legislative branch and should be jealously
guarded. But because we may have been too careless of these powers in
the past does not justify congressional intrusion into, or obstruction
of, the proper exercise of Presidential responsibilities now or in the
future. There can be only one Commander in Chief. In these times crises
cannot be managed and wars cannot be waged by committee, nor can peace
be pursued solely by parliamentary debate. To the ears of the world, the
President speaks for the Nation. While he is, of course, ultimately
accountable to the Congress, the courts, and the people, he and his
emissaries must not be handicapped in advance in their relations with
foreign governments as has sometimes happened in the past.

At home I am encouraged by the Nation's recovery from the recession and
our steady return to sound economic growth. It is now continuing after
the recent period of uncertainty, which is part of the price we pay for
free elections.

Our most pressing need today and the future is more jobs--productive,
permanent jobs created by a thriving economy. We must revise our tax
system both to ease the burden of heavy taxation and to encourage the
investment necessary for the creation of productive jobs for all
Americans who want to work.

Earlier this month I proposed a permanent income tax reduction of $10
billion below current levels, including raising the personal exemption
from $750 to $1,000. I also recommended a series of measures to
stimulate investment, such as accelerated depreciation for new plants
and equipment in areas of high unemployment, a reduction in the
corporate tax rate from 48 to 46 percent, and eliminating the present
double taxation of dividends. I strongly urge the Congress to pass these
measures to help create the productive, permanent jobs in the private
economy that are so essential for our future.

All the basic trends are good; we are not on the brink of another
recession or economic disaster. If we follow prudent policies that
encourage productive investment and discourage destructive inflation, we
will come out on top, and I am sure we will.

We have successfully cut inflation by more than half. When I took
office, the Consumer Price Index was rising at 12.2 percent a year.
During 1976 the rate of inflation was 5 percent.

We have created more jobs--over 4 million more jobs today than in the
spring of 1975. Throughout this Nation today we have over 88 million
people in useful, productive jobs--more than at any other time in our
Nation's history. But there are still too many Americans unemployed.
This is the greatest regret that I have as I leave office.

We brought about with the Congress, after much delay, the renewal of the
general revenue sharing. We expanded community development and Federal
manpower programs. We began a significant urban mass transit program.
Federal programs today provide more funds for our States and local
governments than ever before--$70 billion for the current fiscal year.
Through these programs and others that provide aid directly to
individuals, we have kept faith with our tradition of compassionate help
for those who need it. As we begin our third century we can be proud of
the progress that we have made in meeting human needs for all of our
citizens.

We have cut the growth of crime by nearly 90 percent. Two years ago
crime was increasing at the rate of 18 percent annually. In the first
three quarters of 1976, that growth rate had been cut to 2 percent. But
crime, and the fear of crime, remains one of the most serious problems
facing our citizens.

We have had some successes, and there have been some disappointments.
Bluntly, I must remind you that we have not made satisfactory progress
toward achieving energy independence. Energy is absolutely vital to the
defense of our country, to the strength of our economy, and to the
quality of our lives.

Two years ago I proposed to the Congress the first comprehensive
national energy program--a specific and coordinated set of measures that
would end our vulnerability to embargo, blockade, or arbitrary price
increases and would mobilize U.S. technology and resources to supply a
significant share of the free world's energy after 1985. Of the major
energy proposals I submitted 2 years ago, only half, belatedly, became
law. In 1973 we were dependent upon foreign oil imports for 36 percent
of our needs. Today, we are 40-percent dependent, and we'll pay out $34
billion for foreign oil this year. Such vulnerability at present or in
the future is intolerable and must be ended.

The answer to where we stand on our national energy effort today reminds
me of the old argument about whether the tank is half full or half
empty. The pessimist will say we have half failed to achieve our 10-year
energy goals; the optimist will say that we have half succeeded. I am
always an optimist, but we must make up for lost time.

We have laid a solid foundation for completing the enormous task which
confronts us. I have signed into law five major energy bills which
contain significant measures for conservation, resource development,
stockpiling, and standby authorities. We have moved forward to develop
the naval petroleum reserves; to build a 500-million barrel strategic
petroleum stockpile; to phase out unnecessary Government allocation and
price controls; to develop a lasting relationship with other oil
consuming nations; to improve the efficiency of energy use through
conservation in automobiles, buildings, and industry; and to expand
research on new technology and renewable resources such as wind power,
geothermal and solar energy. All these actions, significant as they are
for the long term, are only the beginning.

I recently submitted to the Congress my proposals to reorganize the
Federal energy structure and the hard choices which remain if we are
serious about reducing our dependence upon foreign energy. These include
programs to reverse our declining production of natural gas and increase
incentives for domestic crude oil production. I proposed to minimize
environmental uncertainties affecting coal development, expand nuclear
power generation, and create an energy independence authority to provide
government financial assistance for vital energy programs where private
capital is not available.

We must explore every reasonable prospect for meeting our energy needs
when our current domestic reserves of oil and natural gas begin to
dwindle in the next decade. I urgently ask Congress and the new
administration to move quickly on these issues. This Nation has the
resources and the capability to achieve our energy goals if its
Government has the will to proceed, and I think we do.

I have been disappointed by inability to complete many of the meaningful
organizational reforms which I contemplated for the Federal Government,
although a start has been made. For example, the Federal judicial system
has long served as a model for other courts. But today it is threatened
by a shortage of qualified Federal judges and an explosion of litigation
claiming Federal jurisdiction. I commend to the new administration and
the Congress the recent report and recommendations of the Department of
Justice, undertaken at my request, on "the needs of the Federal Courts."
I especially endorse its proposals for a new commission on the judicial
appointment process.

While the judicial branch of our Government may require reinforcement,
the budgets and payrolls of the other branches remain staggering. I
cannot help but observe that while the White House staff and the
Executive Office of the President have been reduced and the total number
of civilians in the executive branch contained during the 1970's, the
legislative branch has increased substantially although the membership
of the Congress remains at 535. Congress now costs the taxpayers more
than a million dollars per Member; the whole legislative budget has
passed the billion dollar mark.

We have made some progress in cutting back the expansion of government
and its intrusion into individual lives, but believe me, there is much
more to be done--and you and I know it. It can only be done by tough and
temporarily painful surgery by a Congress as prepared as the President
to face up to this very real political problem. Again, I wish my
successor, working with a substantial majority of his own party, the
best of success in reforming the costly and cumbersome machinery of the
Federal Government.

The task of self-government is never finished. The problems are great;
the opportunities are greater.

America's first goal is and always will be peace with honor. America
must remain first in keeping peace in the world. We can remain first in
peace only if we are never second in defense.

In presenting the state of the Union to the Congress and to the American
people, I have a special obligation as Commander in Chief to report on
our national defense. Our survival as a free and independent people
requires, above all, strong military forces that are well equipped and
highly trained to perform their assigned mission.

I am particularly gratified to report that over the past 2 1/2 years, we
have been able to reverse the dangerous decline of the previous decade
in real resources this country was devoting to national defense. This
was an immediate problem I faced in 1974. The evidence was unmistakable
that the Soviet Union had been steadily increasing the resources it
applied to building its military strength. During this same period the
United States real defense spending declined. In my three budgets we not
only arrested that dangerous decline, but we have established the
positive trend which is essential to our ability to contribute to peace
and stability in the world.

The Vietnam war, both materially and psychologically, affected our
overall defense posture. The dangerous anti-military sentiment
discouraged defense spending and unfairly disparaged the men and women
who serve in our Armed Forces.

The challenge that now confronts this country is whether we have the
national will and determination to continue this essential defense
effort over the long term, as it must be continued. We can no longer
afford to oscillate from year to year in so vital a matter; indeed, we
have a duty to look beyond the immediate question of budgets and to
examine the nature of the problem we will face over the next generation.

I am the first recent President able to address long-term, basic issues
without the burden of Vietnam. The war in Indochina consumed enormous
resources at the very time that the overwhelming strategic superiority
we once enjoyed was disappearing. In past years, as a result of
decisions by the United States, our strategic forces leveled off, yet
the Soviet Union continued a steady, constant buildup of its own forces,
committing a high percentage of its national economic effort to defense.

The United States can never tolerate a shift in strategic balance
against us or even a situation where the American people or our allies
believe the balance is shifting against us. The United States would risk
the most serious political consequences if the world came to believe
that our adversaries have a decisive margin of superiority.

To maintain a strategic balance we must look ahead to the 1980's and
beyond. The sophistication of modern weapons requires that we make
decisions now if we are to ensure our security 10 years from now.
Therefore, I have consistently advocated and strongly urged that we
pursue three critical strategic programs: the Trident missile launching
submarine; the B-1 bomber, with its superior capability to penetrate
modern air defenses; and a more advanced intercontinental ballistic
missile that will be better able to survive nuclear attack and deliver a
devastating retaliatory strike.

In an era where the strategic nuclear forces are in rough equilibrium,
the risks of conflict below the nuclear threshold may grow more
perilous. A major, long-term objective, therefore, is to maintain
capabilities to deal with, and thereby deter, conventional challenges
and crises, particularly in Europe.

We cannot rely solely on strategic forces to guarantee our security or
to deter all types of aggression. We must have superior naval and marine
forces to maintain freedom of the seas, strong multipurpose tactical air
forces, and mobile, modern ground forces. Accordingly, I have directed a
long-term effort to improve our worldwide capabilities to deal with
regional crises.

I have submitted a 5-year naval building program indispensable to the
Nation's maritime strategy. Because the security of Europe and the
integrity of NATO remain the cornerstone of American defense policy, I
have initiated a special, long-term program to ensure the capacity of
the Alliance to deter or defeat aggression in Europe.

As I leave office I can report that our national defense is effectively
deterring conflict today. Our Armed Forces are capable of carrying out
the variety of missions assigned to them. Programs are underway which
will assure we can deter war in the years ahead. But I also must warn
that it will require a sustained effort over a period of years to
maintain these capabilities. We must have the wisdom, the stamina, and
the courage to prepare today for the perils of tomorrow, and I believe
we will.

As I look to the future--and I assure you I intend to go on doing that
for a good many years--I can say with confidence that the state of the
Union is good, but we must go on making it better and better.

This gathering symbolizes the constitutional foundation which makes
continued progress possible, synchronizing the skills of three
independent branches of Government, reserving fundamental sovereignty to
the people of this great land. It is only as the temporary
representatives and servants of the people that we meet here, we bring
no hereditary status or gift of infallibility, and none follows us from
this place.

Like President Washington, like the more fortunate of his successors, I
look forward to the status of private citizen with gladness and
gratitude. To me, being a citizen of the United States of America is the
greatest honor and privilege in this world.

From the opportunities which fate and my fellow citizens have given me,
as a Member of the House, as Vice President and President of the Senate,
and as President of all the people, I have come to understand and place
the highest value on the checks and balances which our founders imposed
on government through the separation of powers among co-equal
legislative, executive, and judicial branches. This often results in
difficulty and delay, as I well know, but it also places supreme
authority under God, beyond any one person, any one branch, any majority
great or small, or any one party. The Constitution is the bedrock of all
our freedoms. Guard and cherish it, keep honor and order in your own
house, and the Republic will endure.

It is not easy to end these remarks. In this Chamber, along with some of
you, I have experienced many, many of the highlights of my life. It was
here that I stood 28 years ago with my freshman colleagues, as Speaker
Sam Rayburn administered the oath. I see some of you now--Charlie
Bennett, Dick Bolling, Carl Perkins, Pete Rodino, Harley Staggers, Tom
Steed, Sid Yates, Clem Zablocki-and I remember those who have gone to
their rest. It was here we waged many, many a lively battle--won some,
lost some, but always remaining friends. It was here, surrounded by such
friends, that the distinguished Chief Justice swore me in as Vice
President on December 6, 1973. It was here I returned 8 months later as
your President to ask not for a honeymoon, but for a good marriage.

I will always treasure those memories and your many, many kindnesses. I
thank you for them all.

My fellow Americans, I once asked you for your prayers, and now I give
you mine: May God guide this wonderful country, its people, and those
they have chosen to lead them. May our third century be illuminated by
liberty and blessed with brotherhood, so that we and all who come after
us may be the humble servants of thy peace. Amen.

Good night. God bless you.

***

State of the Union Address
Jimmy Carter
January 19, 1978

Two years ago today we had the first caucus in Iowa, and one year ago
tomorrow, I walked from here to the White House to take up the duties of
President of the United States. I didn't know it then when I walked, but
I've been trying to save energy ever since.

I return tonight to fulfill one of those duties of the Constitution: to
give to the Congress, and to the Nation, information on the state of the
Union.

Militarily, politically, economically, and in spirit, the state of our
Union is sound.

We are a great country, a strong country, a vital and dynamic country,
and so we will remain.

We are a confident people and a hardworking people, a decent and a
compassionate people, and so we will remain.

I want to speak to you tonight about where we are and where we must go,
about what we have done and what we must do. And I want to pledge to you
my best efforts and ask you to pledge yours.

Each generation of Americans has to face circumstances not of its own
choosing, but by which its character is measured and its spirit is
tested.

There are times of emergency, when a nation and its leaders must bring
their energies to bear on a single urgent task. That was the duty
Abraham Lincoln faced when our land was torn apart by conflict in the
War Between the States. That was the duty faced by Franklin Roosevelt
when he led America out of an economic depression and again when he led
America to victory in war.

There are other times when there is no single overwhelming crisis, yet
profound national interests are at stake.

At such times the risk of inaction can be equally great. It becomes the
task of leaders to call forth the vast and restless energies of our
people to build for the future.

That is what Harry Truman did in the years after the Second World War,
when we helped Europe and Japan rebuild themselves and secured an
international order that has protected freedom from aggression.

We live in such times now, and we face such duties.

We've come through a long period of turmoil and doubt, but we've once
again found our moral course, and with a new spirit, we are striving to
express our best instincts to the rest of the world.

There is all across our land a growing sense of peace and a sense of
common purpose. This sense of unity cannot be expressed in programs or
in legislation or in dollars. It's an achievement that belongs to every
individual American. This unity ties together, and it towers over all
our efforts here in Washington, and it serves as an inspiring beacon for
all of us who are elected to serve.

This new atmosphere demands a new spirit, a partnership between those of
us who lead and those who elect. The foundations of this partnership are
truth, the courage to face hard decisions, concern for one another and
the common good over special interests, and a basic faith and trust in
the wisdom and strength and judgment of the American people.

For the first time in a generation, we are not haunted by a major
international crisis or by domestic turmoil, and we now have a rare and
a priceless opportunity to address persistent problems and burdens which
come to us as a nation, quietly and steadily getting worse over the
years.

As President, I've had to ask you, the Members of Congress, and you, the
American people, to come to grips with some of the most difficult and
hard questions facing our society.

We must make a maximum effort, because if we do not aim for the best, we
are very likely to achieve little. I see no benefit to the country if we
delay, because the problems will only get worse.

We need patience and good will, but we really need to realize that there
is a limit to the role and the function of government. Government cannot
solve our problems, it can't set our goals, it cannot define our vision.
Government cannot eliminate poverty or provide a bountiful economy or
reduce inflation or save our cities or cure illiteracy or provide
energy. And government cannot mandate goodness. Only a true partnership
between government and the people can ever hope to reach these goals.

Those of us who govern can sometimes inspire, and we can identify needs
and marshal resources, but we simply cannot be the managers of
everything and everybody.

We here in Washington must move away from crisis management, and we must
establish clear goals for the future, immediate and the distant future,
which will let us work together and not in conflict. Never again should
we neglect a growing crisis like the shortage of energy, where further
delay will only lead to more harsh and painful solutions.

Every day we spend more than $120 million for foreign oil. This slows
our economic growth, it lowers the value of the dollar overseas, and it
aggravates unemployment and inflation here at home.

Now we know what we must do, increase production. We must cut down on
waste. And we must use more of those fuels which are plentiful and more
permanent. We must be fair to people, and we must not disrupt our
Nation's economy and our budget.

Now, that sounds simple. But I recognize the difficulties involved. I
know that it is not easy for the Congress to act. But the fact remains
that on the energy legislation, we have failed the American people.
Almost 5 years after the oil embargo dramatized the problem for us all,
we still do not have a national energy program. Not much longer can we
tolerate this stalemate. It undermines our national interest both at
home and abroad. We must succeed, and I believe we will.

Our main task at home this year, with energy a central element, is the
Nation's economy. We must continue the recovery and further cut
unemployment and inflation.

Last year was a good one for the United States. We reached all of our
major economic goals for 1977. Four million new jobs were created, an
alltime record, and the number of unemployed dropped by more than a
million. Unemployment right now is the lowest it has been since 1974,
and not since World War II has such a high percentage of American people
been employed.

The rate of inflation went down. There was a good growth in business
profits and investments, the source of more jobs for our workers, and a
higher standard of living for all our people. After taxes and inflation,
there was a healthy increase in workers' wages.

And this year, our country will have the first $2 trillion economy in
the history of the world.

Now, we are proud of this progress the first year, but we must do even
better in the future.

We still have serious problems on which all of us must work together.
Our trade deficit is too large. Inflation is still too high, and too
many Americans still do not have a job.

Now, I didn't have any simple answers for all these problems. But we
have developed an economic policy that is working, because it's simple,
balanced, and fair. It's based on four principles: First, the economy
must keep on expanding to produce new jobs and better income, which our
people need. The fruits of growth must be widely shared. More jobs must
be made available to those who have been bypassed until now. And the tax
system must be made fairer and simpler.

Secondly, private business and not the Government must lead the
expansion in the future.

Third, we must lower the rate of inflation and keep it down. Inflation
slows down economic growth, and it's the most cruel to the poor and also
to the elderly and others who live on fixed incomes.

And fourth, we must contribute to the strength of the world economy.

I will announce detailed proposals for improving our tax system later
this week. We can make our tax laws fairer, we can make them simpler and
easier to understand, and at the same time, we can, and we will, reduce
the tax burden on American citizens by $25 billion.

The tax reforms and the tax reductions go together. Only with the long
overdue reforms will the full tax cut be advisable.

Almost $17 billion in income tax cuts will go to individuals. Ninety-six
percent of all American taxpayers will see their taxes go down. For a
typical family of four, this means an annual saving of more than $250 a
year, or a tax reduction of about 20 percent. A further $2 billion cut
in excise taxes will give more relief and also contribute directly to
lowering the rate of inflation.

And we will also provide strong additional incentives for business
investment and growth through substantial cuts in the corporate tax
rates and improvement in the investment tax credit.

Now, these tax proposals will increase opportunity everywhere in the
Nation. But additional jobs for the disadvantaged deserve special
attention.

We've already passed laws to assure equal access to the voting booth and
to restaurants and to schools, to housing, and laws to permit access to
jobs. But job opportunity, the chance to earn a decent living, is also a
basic human right, which we cannot and will not ignore.

A major priority for our Nation is the final elimination of the barriers
that restrict the opportunities available to women and also to black
people and Hispanics and other minorities. We've come a long way toward
that goal. But there is still much to do. What we inherited from the
past must not be permitted to shackle us in the future.

I'll be asking you for a substantial increase in funds for public jobs
for our young people, and I also am recommending that the Congress
continue the public service employment programs at more than twice the
level of a year ago. When welfare reform is completed, we will have more
than a million additional jobs so that those on welfare who are able to
work can work.

However, again, we know that in our free society, private business is
still the best source of new jobs. Therefore, I will propose a new
program to encourage businesses to hire young and disadvantaged
Americans. These young people only need skills and a chance in order to
take their place in our economic system. Let's give them the chance they
need. A major step in the right direction would be the early passage of
a greatly improved Humphrey-Hawkins bill.

My budget for 1979 addresses these national needs, but it is lean and
tight. I have cut waste wherever possible.

I am proposing an increase of less than 2 percent after adjusting for
inflation, the smallest increase in the Federal budget in 4 years.

Lately, Federal spending has taken a steadily increasing portion of what
Americans produce. Our new budget reverses that trend, and later I hope
to bring the Government's toll down even further. And with your help,
we'll do that.

In time of high employment and a strong economy, deficit spending should
not be a feature of our budget. As the economy continues to gain
strength and as our unemployment rates continue to fall, revenues will
grow. With careful planning, efficient management, and proper restraint
on spending, we can move rapidly toward a balanced budget, and we will.

Next year the budget deficit will be only slightly less than this year.
But one-third of the deficit is due to the necessary tax cuts that I've
proposed. This year the right choice is to reduce the burden on
taxpayers and provide more jobs for our people.

The third element in our program is a renewed attack on inflation. We've
learned the hard way that high unemployment will not prevent or cure
inflation. Government can help us by stimulating private investment and
by maintaining a responsible economic policy. Through a new top-level
review process, we will do a better job of reducing Government
regulation that drives up costs and drives up prices.

But again, Government alone cannot bring down the rate of inflation.
When a level of high inflation is expected to continue, then companies
raise prices to protect their profit margins against prospective
increases in wages and other costs, while workers demand higher wages as
protection against expected price increases. It's like an escalation in
the arms race, and understandably, no one wants to disarm alone.

Now, no one firm or a group of workers can halt this process. It's an
effort that we must all make together. I'm therefore asking government,
business, labor, and other groups to join in a voluntary program to
moderate inflation by holding wage and price increases in each sector of
the economy during 1978 below the average increases of the last 2 years.

I do not believe in wage and price controls. A sincere commitment to
voluntary constraint provides a way, perhaps the only way, to fight
inflation without Government interference.

As I came into the Capitol tonight, I saw the farmers, my fellow
farmers, standing out in the snow. I'm familiar with their problem, and
I know from Congress' action that you are too. When I was running
Carters Warehouse, we had spread on our own farms 5-10-15 fertilizer for
about $40 a ton. The last time I was home, the price was about $100 a
ton. The cost of nitrogen has gone up 150 percent, and the price of
products that farmers sell has either stayed the same or gone down a
little.

Now, this past year in 1977, you, the Congress, and I together passed a
new agricultural act. It went into effect October 1. It'll have its
first impact on the 1978 crops. It will help a great deal. It'll add $6
1/2 billion or more to help the farmers with their price supports and
target prices.

Last year we had the highest level of exports of farm products in the
history of our country, $24 billion. We expect to have more this year.
We'll be working together. But I think it's incumbent on us to monitor
very carefully the farm situation and continue to work harmoniously with
the farmers of our country. What's best for the farmers, the farm
families, in the long run is also best for the consumers of our country.

Economic success at home is also the key to success in our international
economic policy. An effective energy program, strong investment and
productivity, and controlled inflation will provide [improve] our trade
balance and balance it, and it will help to protect the integrity of the
dollar overseas.

By working closely with our friends abroad, we can promote the economic
health of the whole world, with fair and balanced agreements lowering
the barriers to trade.

Despite the inevitable pressures that build up when the world economy
suffers from high unemployment, we must firmly resist the demands for
self-defeating protectionism. But free trade must also be fair trade.
And I am determined to protect American industry and American workers
against foreign trade practices which are unfair or illegal.

In a separate written message to Congress, I've outlined other domestic
initiatives, such as welfare reform, consumer protection, basic
education skills, urban policy, reform of our labor laws, and national
health care later on this year. I will not repeat these tonight. But
there are several other points that I would like to make directly to
you.

During these past years, Americans have seen our Government grow far
from us.

For some citizens, the Government has almost become like a foreign
country, so strange and distant that we've often had to deal with it
through trained ambassadors who have sometimes become too powerful and
too influential, lawyers, accountants, and lobbyists. This cannot go on.

We must have what Abraham Lincoln wanted, a government for the people.

We've made progress toward that kind of government. You've given me the
authority I requested to reorganize the Federal bureaucracy. And I am
using that authority.

We've already begun a series of reorganization plans which will be
completed over a period of 3 years. We have also proposed abolishing
almost 500 Federal advisory and other commissions and boards. But I know
that the American people are still sick and tired of Federal paperwork
and redtape. Bit by bit we are chopping down the thicket of unnecessary
Federal regulations by which Government too often interferes in our
personal lives and our personal business. We've cut the public's Federal
paperwork load by more than 12 percent in less than a year. And we are
not through cutting.

We've made a good start on turning the gobbledygook of Federal
regulations into plain English that people can understand. But we know
that we still have a long way to go.

We've brought together parts of 11 Government agencies to create a new
Department of Energy. And now it's time to take another major step by
creating a separate Department of Education.

But even the best organized Government will only be as effective as the
people who carry out its policies. For this reason, I consider civil
service reform to be absolutely vital. Worked out with the civil
servants themselves, this reorganization plan will restore the merit
principle to a system which has grown into a bureaucratic maze. It will
provide greater management flexibility and better rewards for better
performance without compromising job security.

Then and only then can we have a government that is efficient, open, and
truly worthy of our people's understanding and respect. I have promised
that we will have such a government, and I intend to keep that promise.

In our foreign policy, the separation of people from government has been
in the past a source of weakness and error. In a democratic system like
ours, foreign policy decisions must be able to stand the test of public
examination and public debate. If we make a mistake in this
administration, it will be on the side of frankness and openness with
the American people.

In our modern world, when the deaths of literally millions of people can
result from a few terrifying seconds of destruction, the path of
national strength and security is identical to the path of peace.

Tonight, I am happy to report that because we are strong, our Nation is
at peace with the world.

We are a confident nation. We've restored a moral basis for our foreign
policy. The very heart of our identity as a nation is our firm
commitment to human rights.

We stand for human rights because we believe that government has as a
purpose to promote the well-being of its citizens. This is true in our
domestic policy; it's also true in our foreign policy. The world must
know that in support of human rights, the United States will stand firm.

We expect no quick or easy results, but there has been significant
movement toward greater freedom and humanity in several parts of the
world.

Thousands of political prisoners have been freed. The leaders of the
world, even our ideological adversaries, now see that their attitude
toward fundamental human rights affects their standing in the
international community, and it affects their relations with the United
States.

To serve the interests of every American, our foreign policy has three
major goals.

The first and prime concern is and will remain the security of our
country.

Security is based on our national will, and security is based on the
strength of our Armed Forces. We have the will, and militarily we are
very strong.

Security also comes through the strength of our alliances. We have
reconfirmed our commitment to the defense of Europe, and this year we
will demonstrate that commitment by further modernizing and
strengthening our military capabilities there.

Security can also be enhanced by agreements with potential adversaries
which reduce the threat of nuclear disaster while maintaining our own
relative strategic capability.

In areas of peaceful competition with the Soviet Union, we will continue
to more than hold our own.

At the same time, we are negotiating with quiet confidence, without
haste, with careful determination, to ease the tensions between us and
to ensure greater stability and security.

The strategic arms limitation talks have been long and difficult. We
want a mutual limit on both the quality and the quantity of the giant
nuclear arsenals of both nations, and then we want actual reductions in
strategic arms as a major step toward the ultimate elimination of
nuclear weapons from the face of the Earth.

If these talks result in an agreement this year, and I trust they will,
I pledge to you that the agreement will maintain and enhance the
stability of the world's strategic balance and the security of the
United States.

For 30 years, concerted but unsuccessful efforts have been made to ban
the testing of atomic explosives, both military weapons and peaceful
nuclear devices.

We are hard at work with Great Britain and the Soviet Union on an
agreement which will stop testing and will protect our national security
and provide for adequate verification of compliance. We are now making,
I believe, good progress toward this comprehensive ban on nuclear
explosions.

We are also working vigorously to halt the proliferation of nuclear
weapons among the nations of the world which do not now have them and to
reduce the deadly global traffic in conventional arms sales. Our stand
for peace is suspect if we are also the principal arms merchant of the
world. So, we've decided to cut down our arms transfers abroad on a
year-by-year basis and to work with other major arms exporters to
encourage their similar constraint.

Every American has a stake in our second major goal, a world at peace.
In a nuclear age, each of us is threatened when peace is not secured
everywhere. We are trying to promote harmony in those parts of the world
where major differences exist among other nations and threaten
international peace.

In the Middle East, we are contributing our good offices to maintain the
momentum of the current negotiations and to keep open the lines of
communication among the Middle Eastern leaders. The whole world has a
great stake in the success of these efforts. This is a precious
opportunity for a historic settlement of a longstanding conflict, an
opportunity which may never come again in our lifetime.

Our role has been difficult and sometimes thankless and controversial.
But it has been constructive and it has been necessary, and it will
continue.

Our third major foreign policy goal is one that touches the life of
every American citizen every day, world economic growth and stability.

This requires strong economic performance by the industrialized
democracies like ourselves and progress in resolving the global energy
crisis. Last fall, with the help of others, we succeeded in our vigorous
efforts to maintain the stability of the price of oil. But as many
foreign leaders have emphasized to me personally and, I am sure, to you,
the greatest future contribution that America can make to the world
economy would be an effective energy conservation program here at home.
We will not hesitate to take the actions needed to protect the integrity
of the American dollar.

We are trying to develop a more just international system. And in this
spirit, we are supporting the struggle for human development in Africa,
in Asia, and in Latin America.

Finally, the world is watching to see how we act on one of our most
important and controversial items of business, approval of the Panama
Canal treaties. The treaties now before the Senate are the result of the
work of four administrations, two Democratic, two Republican.

They guarantee that the canal will be open always for unrestricted use
by the ships of the world. Our ships have the right to go to the head of
the line for priority of passage in times of emergency or need. We
retain the permanent right to defend the canal with our own military
forces, if necessary, to guarantee its openness and its neutrality.

The treaties are to the clear advantage of ourselves, the Panamanians,
and the other users of the canal. Ratifying the Panama Canal treaties
will demonstrate our good faith to the world, discourage the spread of
hostile ideologies in this hemisphere, and directly contribute to the
economic well-being and the security of the United States.

I have to say that that's very welcome applause.

There were two moments on my recent journey which, for me, confirmed the
final aims of our foreign policy and what it always must be.

One was in a little village in India, where I met a people as
passionately attached to their rights and liberties as we are, but whose
children have a far smaller chance for good health or food or education
or human fulfillment than a child born in this country.

The other moment was in Warsaw, capital of a nation twice devastated by
war in this century. There, people have rebuilt the city which war's
destruction took from them. But what was new only emphasized clearly
what was lost.

What I saw in those two places crystalized for me the purposes of our
own Nation's policy: to ensure economic justice, to advance human
rights, to resolve conflicts without violence, and to proclaim in our
great democracy our constant faith in the liberty and dignity of human
beings everywhere.

We Americans have a great deal of work to do together. In the end, how
well we do that work will depend on the spirit in which we approach it.
We must seek fresh answers, unhindered by the stale prescriptions of the
past.

It has been said that our best years are behind us. But I say again that
America's best is still ahead. We have emerged from bitter experiences
chastened but proud, confident once again, ready to face challenges once
again, and united once again.

We come together tonight at a solemn time. Last week the Senate lost a
good and honest man, Lee Metcalf of Montana.

And today, the flag of the United States flew at half-mast from this
Capitol and from American installations and ships all over the world, in
mourning for Senator Hubert Humphrey.

Because he exemplified so well the joy and the zest of living, his death
reminds us not so much of our own mortality, but of the possibilities
offered to us by life. He always looked to the future with a special
American kind of confidence, of hope and enthusiasm. And the best way
that we can honor him is by following his example.

Our task, to use the words of Senator Humphrey, is "reconciliation,
rebuilding, and rebirth."

Reconciliation of private needs and interests into a higher purpose.

Rebuilding the old dreams of justice and liberty, and country and
community.

Rebirth of our faith in the common good.

Each of us here tonight, and all who are listening in your homes, must
rededicate ourselves to serving the common good. We are a community, a
beloved community, all of us. Our individual fates are linked, our
futures intertwined. And if we act in that knowledge and in that spirit,
together, as the Bible says, we can move mountains.

Thank you very much.

***

State of the Union Address
Jimmy Carter
January 25, 1979

Tonight I want to examine in a broad sense the state of our American
Union--how we are building a new foundation for a peaceful and a
prosperous world.

Our children who will be born this year will come of age in the 21st
century. What kind of society, what kind of world are we building for
them? Will we ourselves be at peace? Will our children enjoy a better
quality of life? Will a strong and united America still be a force for
freedom and prosperity around the world?

Tonight, there is every sign that the state of our Union is sound.

Our economy offers greater prosperity for more of our people than ever
before. Real per capita income and real business profits have risen
substantially in the last 2 years. Farm exports are setting an all-time
record each year, and farm income last year, net farm income, was up
more than 25 percent.

Our liberties are secure. Our military defenses are strong and growing
stronger. And more importantly, tonight, America--our beloved
country--is at peace.

Our earliest national commitments, modified and reshaped by succeeding
generations, have served us well. But the problems that we face today
are different from those that confronted earlier generations of
Americans. They are more subtle, more complex, and more interrelated. At
home, we are recognizing ever more clearly that government alone cannot
solve these problems. And abroad, few of them can be solved by the
United States alone. But Americans as a united people, working with our
allies and friends, have never been afraid to face problems and to solve
problems, either here or abroad.

The challenge to us is to build a new and firmer foundation for the
future--for a sound economy, for a more effective government, for more
political trust, and for a stable peace--so that the America our
children inherit will be even stronger and even better than it is today.

We cannot resort to simplistic or extreme solutions which substitute
myths for common sense.

In our economy, it is a myth that we must choose endlessly between
inflation and recession. Together, we build the foundation for a strong
economy, with lower inflation, without contriving either a recession
with its high unemployment or unworkable, mandatory government controls.

In our government, it is a myth that we must choose between compassion
and competence. Together, we build the foundation for a government that
works, and works for people.

In our relations with our potential adversaries, it is a myth that we
must choose between confrontation and capitulation. Together, we build
the foundation for a stable world of both diversity and peace.

Together, we've already begun to build the foundation for confidence in
our economic system. During the last 2 years, in bringing our economy
out of the deepest recession since the 1930's, we've created 7,100,000
new jobs. The unemployment rate has gone down 25 percent. And now we
must redouble our fight against the persistent inflation that has
wracked our country for more than a decade. That's our important
domestic issue, and we must do it together.

We know that inflation is a burden for all Americans, but it's a
disaster for the poor, the sick, and the old. No American family should
be forced to choose among food, warmth, health care, or decent housing
because the cost of any of these basic necessities has climbed out of
reach.

Three months ago, I outlined to the Nation a balanced anti-inflation
program that couples responsible government restraint with responsible
wage and price restraint. It's based upon my knowledge that there is a
more powerful force than government compulsion--the force created by the
cooperative efforts of millions of Americans working toward a common
goal.

Business and labor have been increasingly supportive. It's imperative
that we in government do our part. We must stop excessive government
growth, and we must control government spending habits.

I've sent to this Congress a stringent but a fair budget, one that,
since I ran for President in 1976, will have cut the Federal deficit in
half. And as a percentage of our gross national product, the deficit
will have dropped by almost 75 percent.

This Congress had a good record last year, and I now ask the 96th
Congress to continue this partnership in holding the line on excess
Federal spending. It will not be easy. But we must be strong, and we
must be persistent.

This budget is a clear message that, with the help of you and the
American people, I am determined, as President, to bring inflation under
control.

The 1980 budget provides enough spending restraint to begin unwinding
inflation, but enough support for our country to keep American workers
productive and to encourage the investments that provide new jobs. We
will continue to mobilize our Nation's resources to reduce our trade
deficit substantially this year and to maintain the strength of the
American dollar.

We've demonstrated in this restrained budget that we can build on the
gains of the past 2 years to provide additional support to educate
disadvantaged children, to care for the elderly, to provide nutrition
and legal services for the poor, and to strengthen the economic base of
our urban communities and, also, our rural areas.

This year, we will take our first steps to develop a national health
plan.

We must never accept a permanent group of unemployed Americans, with no
hope and no stake in building our society. For those left out of the
economy because of discrimination, a lack of skills, or poverty, we must
maintain high levels of training, and we must continue to provide jobs.

A responsible budget is not our only weapon to control inflation. We
must act now to protect all Americans from health care costs that are
rising $1 million per hour, 24 hours a day, doubling every 5 years. We
must take control of the largest contributor to that inflation:
skyrocketing hospital costs.

There will be no clearer test of the commitment of this Congress to the
anti-inflation fight than the legislation that I will submit again this
year to hold down inflation in hospital care.

Over the next 5 years, my proposals will save Americans a total of $60
billion, of which $25 billion will be savings to the American taxpayer
in the Federal budget itself. The American people have waited long
enough. This year we must act on hospital cost containment.

We must also fight inflation by improvements and better enforcement of
our antitrust laws and by reducing government obstacles to competition
in the private sector.

We must begin to scrutinize the overall effect of regulation in our
economy. Through deregulation of the airline industry we've increased
profits, cut prices for all Americans, and begun--for one of the few
times in the history of our Nation--to actually dismantle a major
Federal bureaucracy. This year, we must begin the effort to reform our
regulatory processes for the railroad, bus, and the trucking industries.

America has the greatest economic system in the world. Let's reduce
government interference and give it a chance to work.

I call on Congress to take other anti-inflation action--to expand our
exports to protect American jobs threatened by unfair trade, to conserve
energy, to increase production and to speed development of solar power,
and to reassess our Nation's technological superiority. American workers
who enlist in the fight against inflation deserve not just our
gratitude, but they deserve the protection of the real wage insurance
proposal that I have already made to the Congress.

To be successful, we must change our attitudes as well as our policies.
We cannot afford to live beyond our means. We cannot afford to create
programs that we can neither manage nor finance, or to waste our natural
resources, and we cannot tolerate mismanagement and fraud. Above all, we
must meet the challenges of inflation as a united people.

With the support of the American people, government in recent decades
has helped to dismantle racial barriers, has provided assistance for the
jobless and the retired, has fed the hungry, has protected the safety,
health, and bargaining rights of American workers, and has helped to
preserve our natural heritage.

But it's not enough to have created a lot of government programs. Now we
must make the good programs more effective and improve or weed out those
which are wasteful or unnecessary.

With the support of the Congress, we've begun to reorganize and to get
control of the bureaucracy. We are reforming the civil service system,
so that we can recognize and reward those who do a good job and correct
or remove those who do not.

This year, we must extend major reorganization efforts to education, to
economic development, and to the management of our natural resources. We
need to enact a sunshine [sunset] law that when government programs have
outlived their value, they will automatically be terminated.

There's no such thing as an effective and a noncontroversial
reorganization and reform. But we know that honest, effective government
is essential to restore public faith in our public action.

None of us can be satisfied when two-thirds of the American citizens
chose not to vote last year in a national election. Too many Americans
feel powerless against the influence of private lobbying groups and the
unbelievable flood of private campaign money which threatens our
electoral process.

This year, we must regain the public's faith by requiring limited
financial funds from public funds for congressional election campaigns.
House bill 1 provides for this public financing of campaigns. And I look
forward with a great deal of anticipation to signing it at an early
date.

A strong economy and an effective government will restore confidence in
America. But the path of the future must be charted in peace. We must
continue to build a new and a firm foundation for a stable world
community.

We are building that new foundation from a position of national
strength--the strength of our own defenses, the strength of our
friendships with other nations, and of our oldest American ideals.

America's military power is a major force for security and stability in
the world. We must maintain our strategic capability and continue the
progress of the last 2 years with our NATO Allies, with whom we have
increased our readiness, modernized our equipment, and strengthened our
defense forces in Europe. I urge you to support the strong defense
budget which I have proposed to the Congress.

But our national security in this complicated age requires more than
just military might. In less than a lifetime, world population has more
than doubled, colonial empires have disappeared, and a hundred new
nations have been born, and migration to the world's cities have all
awakened new yearnings for economic justice and human rights among
people everywhere.

This demand for justice and human rights is a wave of the future. In
such a world, the choice is not which super power will dominate the
world. None can and none will. The choice instead is between a world of
anarchy and destruction, or a world of cooperation and peace.

In such a world, we seek not to stifle inevitable change, but to
influence its course in helpful and constructive ways that enhance our
values, our national interests, and the cause of peace.

Towering over this volatile, changing world, like a thundercloud on a
summer day, looms the awesome power of nuclear weapons.

We will continue to help shape the forces of change, to anticipate
emerging problems of nuclear proliferation and conventional arms sales,
and to use our great strength parts of the world before they erupt and
spread.

We have no desire to be the world's policeman. But America does want to
be the world's peacemaker.

We are building the foundation for truly global cooperation, not only
with Western and industrialized nations but with the developing
countries as well. Our ties with Japan and our European allies are
stronger than ever, and so are our friendly relations with the people of
Latin America, Africa, and the Western Pacific and Asia.

We've won new respect in this hemisphere with the Panama Canal treaties.
We've gained new trust with the developing world through our opposition
to racism, our commitment to human rights, and our support for majority
rule in Africa.

The multilateral trade negotiations are now reaching a successful
conclusion, and congressional approval is essential to the economic
well-being of our own country and of the world. This will be one of our
top priorities in 1979.

We are entering a hopeful era in our relations with one-fourth of the
world's people who live in China. The presence of Vice Premier Deng
Xiaoping next week will help to inaugurate that new era. And with prompt
congressional action on authorizing legislation, we will continue our
commitment to a prosperous, peaceful, and secure life for the people of
Taiwan.

I'm grateful that in the past year, as in the year before, no American
has died in combat anywhere in the world. And in Iran, Nicaragua,
Cyprus, Namibia, and Rhodesia, our country is working for peaceful
solutions to dangerous conflicts.

In the Middle East, under the most difficult circumstances, we have
sought to help ancient enemies lay aside deep-seated differences that
have produced four bitter wars in our lifetime.

Our firm commitment to Israel's survival and security is rooted in our
deepest convictions and in our knowledge of the strategic importance to
our own Nation of a stable Middle East. To promote peace and
reconciliation in the region, we must retain the trust and the
confidence both of Israel and also of the Arab nations that are
sincerely searching for peace.

I am determined, as President, to use the full, beneficial influence of
our country so that the precious opportunity for lasting peace between
Israel and Egypt will not be lost.

The new foundation of international cooperation that we seek excludes no
nation. Cooperation with the Soviet Union serves the cause of peace, for
in this nuclear age, world peace must include peace between the super
powers--and it must mean the control of nuclear arms.

Ten years ago, the United States and the Soviet Union made the historic
decision to open the strategic arms limitations talks, or SALT. The
purpose of SALT, then as now, is not to gain a unilateral advantage for
either nation, but to protect the security of both nations, to reverse
the costly and dangerous momentum of the nuclear arms race, to preserve
a stable balance of nuclear forces, and to demonstrate to a concerned
world that we are determined to help preserve the peace.

The first SALT agreement was concluded in 1972. And since then, during 6
years of negotiation by both Republican and Democratic leaders, nearly
all issues of SALT II have been resolved. If the Soviet Union continues
to negotiate in good faith, a responsible SALT agreement will be
reached.

It's important that the American people understand the nature of the
SALT process.

SALT II is not based on sentiment; it's based on self-interest--of the
United States and of the Soviet Union. Both nations share a powerful
common interest in reducing the threat of a nuclear war. I will sign no
agreement which does not enhance our national security.

SALT II does not rely on trust; it will be verifiable. We have very
sophisticated, proven means, including our satellites, to determine for
ourselves whether or not the Soviet Union is meeting its treaty
obligations. I will sign no agreement which cannot be verified.

The American nuclear deterrent will remain strong after SALT II. For
example, just one of our relatively invulnerable Poseidon
submarines--comprising less than 2 percent of our total nuclear force of
submarines, aircraft, and land-based missiles--carries enough warheads
to destroy every large- and medium-sized city in the Soviet Union. Our
deterrent is overwhelming, and I will sign no agreement unless our
deterrent force will remain overwhelming.

A SALT agreement, of course, cannot substitute for wise diplomacy or a
strong defense, nor will it end the danger of nuclear war. But it will
certainly reduce that danger. It will strengthen our efforts to ban
nuclear tests and to stop the spread of atomic weapons to other nations.
And it can begin the process of negotiating new agreements which will
further limit nuclear arms.

The path of arms control, backed by a strong defense, the path our
Nation and every President has walked for 30 years, can lead to a world
of law and of international negotiation and consultation in which all
peoples might live in peace. In this year 1979, nothing is more
important than that the Congress and the people of the United States
resolve to continue with me on that path of nuclear arms control and
world peace. This is paramount.

I've outlined some of the changes that have transformed the world and
which are continuing as we meet here tonight. But we in America need not
fear change. The values on which our Nation was founded: individual
liberty, self-determination, the potential for human fulfillment in
freedom, all of these endure. We find these democratic principles
praised, even in books smuggled out of totalitarian nations and on
wallposters in lands which we thought were closed to our influence. Our
country has regained its special place of leadership in the worldwide
struggle for human rights. And that is a commitment that we must keep at
home, as well as abroad.

The civil rights revolution freed all Americans, black and white, but
its full promise still remains unrealized. I will continue to work with
all my strength for equal opportunity for all Americans--and for
affirmative action for those who carry the extra burden of past denial
of equal opportunity.

We remain committed to improving our labor laws to better protect the
rights of American workers. And our Nation must make it clear that the
legal rights of women as citizens are guaranteed under the laws of our
land by ratifying the equal rights amendment.

As long as I'm President, at home and around the world America's
examples and America's influence will be marshaled to advance the cause
of human rights.

To establish those values, two centuries ago a bold generation of
Americans risked their property, their position, and life itself. We are
their heirs, and they are sending us a message across the centuries. The
words they made so vivid are now growing faintly indistinct, because
they are not heard often enough. They are words like "justice,"
"equality," "unity," "truth," "sacrifice," "liberty," "faith," and
"love."

These words remind us that the duty of our generation of Americans is to
renew our Nation's faith, not focused just against foreign threats but
against the threats of selfishness, cynicism, and apathy.

The new foundation I've discussed tonight can help us build a nation and
a world where every child is nurtured and can look to the future with
hope, where the resources now wasted on war can be turned towards
meeting human needs, where all people have enough to eat, a decent home,
and protection against disease.

It can help us build a nation and a world where all people are free to
seek the truth and to add to human understanding, so that all of us may
live our lives in peace.

Tonight, I ask you, the Members of the Congress, to join me in building
that new foundation, a better foundation, for our beloved country and
our world.

Thank you very much.

***

State of the Union Address
Jimmy Carter
January 21, 1980

This last few months has not been an easy time for any of us. As we meet
tonight, it has never been more clear that the state of our Union
depends on the state of the world. And tonight, as throughout our own
generation, freedom and peace in the world depend on the state of our
Union.

The 1980's have been born in turmoil, strife, and change. This is a time
of challenge to our interests and our values and it's a time that tests
our wisdom and our skills.

At this time in Iran, 50 Americans are still held captive, innocent
victims of terrorism and anarchy. Also at this moment, massive Soviet
troops are attempting to subjugate the fiercely independent and deeply
religious people of Afghanistan. These two acts--one of international
terrorism and one of military aggression--present a serious challenge to
the United States of America and indeed to all the nations of the world.
Together, we will meet these threats to peace.

I'm determined that the United States will remain the strongest of all
nations, but our power will never be used to initiate a threat to the
security of any nation or to the rights of any human being. We seek to
be and to remain secure--a nation at peace in a stable world. But to be
secure we must face the world as it is.

Three basic developments have helped to shape our challenges: the steady
growth and increased projection of Soviet military power beyond its own
borders; the overwhelming dependence of the Western democracies on oil
supplies from the Middle East; and the press of social and religious and
economic and political change in the many nations of the developing
world, exemplified by the revolution in Iran.

Each of these factors is important in its own right. Each interacts with
the others. All must be faced together, squarely and courageously. We
will face these challenges, and we will meet them with the best that is
in us. And we will not fail.

In response to the abhorrent act in Iran, our Nation has never been
aroused and unified so greatly in peacetime. Our position is clear. The
United States will not yield to blackmail.

We continue to pursue these specific goals: first, to protect the
present and long-range interests of the United States; secondly, to
preserve the lives of the American hostages and to secure, as quickly as
possible, their safe release, if possible, to avoid bloodshed which
might further endanger the lives of our fellow citizens; to enlist the
help of other nations in condemning this act of violence, which is
shocking and violates the moral and the legal standards of a civilized
world; and also to convince and to persuade the Iranian leaders that the
real danger to their nation lies in the north, in the Soviet Union and
from the Soviet troops now in Afghanistan, and that the unwarranted
Iranian quarrel with the United States hampers their response to this
far greater danger to them.

If the American hostages are harmed, a severe price will be paid. We
will never rest until every one of the American hostages are released.

But now we face a broader and more fundamental challenge in this region
because of the recent military action of the Soviet Union.

Now, as during the last 3 1/2 decades, the relationship between our
country, the United States of America, and the Soviet Union is the most
critical factor in determining whether the world will live at peace or
be engulfed in global conflict.

Since the end of the Second World War, America has led other nations in
meeting the challenge of mounting Soviet power. This has not been a
simple or a static relationship. Between us there has been cooperation,
there has been competition, and at times there has been confrontation.

In the 1940's we took the lead in creating the Atlantic Alliance in
response to the Soviet Union's suppression and then consolidation of its
East European empire and the resulting threat of the Warsaw Pact to
Western Europe.

In the 1950's we helped to contain further Soviet challenges in Korea
and in the Middle East, and we rearmed to assure the continuation of
that containment.

In the 1960's we met the Soviet challenges in Berlin, and we faced the
Cuban missile crisis. And we sought to engage the Soviet Union in the
important task of moving beyond the cold war and away from
confrontation.

And in the 1970's three American Presidents negotiated with the Soviet
leaders in attempts to halt the growth of the nuclear arms race. We
sought to establish rules of behavior that would reduce the risks of
conflict, and we searched for areas of cooperation that could make our
relations reciprocal and productive, not only for the sake of our two
nations but for the security and peace of the entire world.

In all these actions, we have maintained two commitments: to be ready to
meet any challenge by Soviet military power, and to develop ways to
resolve disputes and to keep the peace.

Preventing nuclear war is the foremost responsibility of the two
superpowers. That's why we've negotiated the strategic arms limitation
treaties--SALT I and SALT II. Especially now, in a time of great
tension, observing the mutual constraints imposed by the terms of these
treaties will be in the best interest of both countries and will help to
preserve world peace. I will consult very closely with the Congress on
this matter as we strive to control nuclear weapons. That effort to
control nuclear weapons will not be abandoned.

We superpowers also have the responsibility to exercise restraint in the
use of our great military force. The integrity and the independence of
weaker nations must not be threatened. They must know that in our
presence they are secure.

But now the Soviet Union has taken a radical and an aggressive new step.
It's using its great military power against a relatively defenseless
nation. The implications of the Soviet invasion of Afghanistan could
pose the most serious threat to the peace since the Second World War.

The vast majority of nations on Earth have condemned this latest Soviet
attempt to extend its colonial domination of others and have demanded
the immediate withdrawal of Soviet troops. The Moslem world is
especially and justifiably outraged by this aggression against an
Islamic people. No action of a world power has ever been so quickly and
so overwhelmingly condemned. But verbal condemnation is not enough. The
Soviet Union must pay a concrete price for their aggression.

While this invasion continues, we and the other nations of the world
cannot conduct business as usual with the Soviet Union. That's why the
United States has imposed stiff economic penalties on the Soviet Union.
I will not issue any permits for Soviet ships to fish in the coastal
waters of the United States. I've cut Soviet access to high-technology
equipment and to agricultural products. I've limited other commerce with
the Soviet Union, and I've asked our allies and friends to join with us
in restraining their own trade with the Soviets and not to replace our
own embargoed items. And I have notified the Olympic Committee that with
Soviet invading forces in Afghanistan, neither the American people nor I
will support sending an Olympic team to Moscow.

The Soviet Union is going to have to answer some basic questions: Will
it help promote a more stable international environment in which its own
legitimate, peaceful concerns can be pursued? Or will it continue to
expand its military power far beyond its genuine security needs, and use
that power for colonial conquest? The Soviet Union must realize that its
decision to use military force in Afghanistan will be costly to every
political and economic relationship it values.

The region which is now threatened by Soviet troops in Afghanistan is of
great strategic importance: It contains more than two-thirds of the
world's exportable oil. The Soviet effort to dominate Afghanistan has
brought Soviet military forces to within 300 miles of the Indian Ocean
and close to the Straits of Hormuz, a waterway through which most of the
world's oil must flow. The Soviet Union is now attempting to consolidate
a strategic position, therefore, that poses a grave threat to the free
movement of Middle East oil.

This situation demands careful thought, steady nerves, and resolute
action, not only for this year but for many years to come. It demands
collective efforts to meet this new threat to security in the Persian
Gulf and in Southwest Asia. It demands the participation of all those
who rely on oil from the Middle East and who are concerned with global
peace and stability. And it demands consultation and close cooperation
with countries in the area which might be threatened.

Meeting this challenge will take national will, diplomatic and political
wisdom, economic sacrifice, and, of course, military capability. We must
call on the best that is in us to preserve the security of this crucial
region.

Let our position be absolutely clear: An attempt by any outside force to
gain control of the Persian Gulf region will be regarded as an assault
on the vital interests of the United States of America, and such an
assault will be repelled by any means necessary, including military
force.

During the past 3 years, you have joined with me to improve our own
security and the prospects for peace, not only in the vital
oil-producing area of the Persian Gulf region but around the world.
We've increased annually our real commitment for defense, and we will
sustain this increase of effort throughout the Five Year Defense
Program. It's imperative that Congress approve this strong defense
budget for 1981, encompassing a 5-percent real growth in authorizations,
without any reduction.

We are also improving our capability to deploy U.S. military forces
rapidly to distant areas. We've helped to strengthen NATO and our other
alliances, and recently we and other NATO members have decided to
develop and to deploy modernized, intermediate-range nuclear forces to
meet an unwarranted and increased threat from the nuclear weapons of the
Soviet Union.

We are working with our allies to prevent conflict in the Middle East.
The peace treaty between Egypt and Israel is a notable achievement which
represents a strategic asset for America and which also enhances
prospects for regional and world peace. We are now engaged in further
negotiations to provide full autonomy for the people of the West Bank
and Gaza, to resolve the Palestinian issue in all its aspects, and to
preserve the peace and security of Israel. Let no one doubt our
commitment to the security of Israel. In a few days we will observe an
historic event when Israel makes another major withdrawal from the Sinai
and when Ambassadors will be exchanged between Israel and Egypt.

We've also expanded our own sphere of friendship. Our deep commitment to
human rights and to meeting human needs has improved our relationship
with much of the Third World. Our decision to normalize relations with
the People's Republic of China will help to preserve peace and stability
in Asia and in the Western Pacific.

We've increased and strengthened our naval presence in the Indian Ocean,
and we are now making arrangements for key naval and air facilities to
be used by our forces in the region of northeast Africa and the Persian
Gulf.

We've reconfirmed our 1959 agreement to help Pakistan preserve its
independence and its integrity. The United States will take action
consistent with our own laws to assist Pakistan in resisting any outside
aggression. And I'm asking the Congress specifically to reaffirm this
agreement. I'm also working, along with the leaders of other nations, to
provide additional military and economic aid for Pakistan. That request
will come to you in just a few days.

Finally, we are prepared to work with other countries in the region to
share a cooperative security framework that respects differing values
and political beliefs, yet which enhances the independence, security,
and prosperity of all.

All these efforts combined emphasize our dedication to defend and
preserve the vital interests of the region and of the nation which we
represent and those of our allies--in Europe and the Pacific, and also
in the parts of the world which have such great strategic importance to
us, stretching especially through the Middle East and Southwest Asia.
With your help, I will pursue these efforts with vigor and with
determination. You and I will act as necessary to protect and to
preserve our Nation's security.

The men and women of America's Armed Forces are on duty tonight in many
parts of the world. I'm proud of the job they are doing, and I know you
share that pride. I believe that our volunteer forces are adequate for
current defense needs, and I hope that it will not become necessary to
impose a draft. However, we must be prepared for that possibility. For
this reason, I have determined that the Selective Service System must
now be revitalized. I will send legislation and budget proposals to the
Congress next month so that we can begin registration and then meet
future mobilization needs rapidly if they arise.

We also need clear and quick passage of a new charter to define the
legal authority and accountability of our intelligence agencies. We will
guarantee that abuses do not recur, but we must tighten our controls on
sensitive intelligence information, and we need to remove unwarranted
restraints on America's ability to collect intelligence.

The decade ahead will be a time of rapid change, as nations everywhere
seek to deal with new problems and age-old tensions. But America need
have no fear. We can thrive in a world of change if we remain true to
our values and actively engaged in promoting world peace. We will
continue to work as we have for peace in the Middle East and southern
Africa. We will continue to build our ties with developing nations,
respecting and helping to strengthen their national independence which
they have struggled so hard to achieve. And we will continue to support
the growth of democracy and the protection of human rights.

In repressive regimes, popular frustrations often have no outlet except
through violence. But when peoples and their governments can approach
their problems together through open, democratic methods, the basis for
stability and peace is far more solid and far more enduring. That is why
our support for human rights in other countries is in our own national
interest as well as part of our own national character.

Peace--a peace that preserves freedom--remains America's first goal. In
the coming years, as a mighty nation we will continue to pursue peace.
But to be strong abroad we must be strong at home. And in order to be
strong, we must continue to face up to the difficult issues that
confront us as a nation today.

The crises in Iran and Afghanistan have dramatized a very important
lesson: Our excessive dependence on foreign oil is a clear and present
danger to our Nation's security. The need has never been more urgent. At
long last, we must have a clear, comprehensive energy policy for the
United States.

As you well know, I have been working with the Congress in a
concentrated and persistent way over the past 3 years to meet this need.
We have made progress together. But Congress must act promptly now to
complete final action on this vital energy legislation. Our Nation will
then have a major conservation effort, important initiatives to develop
solar power, realistic pricing based on the true value of oil, strong
incentives for the production of coal and other fossil fuels in the
United States, and our Nation's most massive peacetime investment in the
development of synthetic fuels.

The American people are making progress in energy conservation. Last
year we reduced overall petroleum consumption by 8 percent and gasoline
consumption by 5 percent below what it was the year before. Now we must
do more.

After consultation with the Governors, we will set gasoline conservation
goals for each of the 50 States, and I will make them mandatory if these
goals are not met.

I've established an import ceiling for 1980 of 8.2 million barrels a
day--well below the level of foreign oil purchases in 1977. I expect our
imports to be much lower than this, but the ceiling will be enforced by
an oil import fee if necessary. I'm prepared to lower these imports
still further if the other oil-consuming countries will join us in a
fair and mutual reduction. If we have a serious shortage, I will not
hesitate to impose mandatory gasoline rationing immediately.

The single biggest factor in the inflation rate last year, the increase
in the inflation rate last year, was from one cause: the skyrocketing
prices of OPEC oil. We must take whatever actions are necessary to
reduce our dependence on foreign oil--and at the same time reduce
inflation.

As individuals and as families, few of us can produce energy by
ourselves. But all of us can conserve energy--every one of us, every day
of our lives. Tonight I call on you--in fact, all the people of
America--to help our Nation. Conserve energy. Eliminate waste. Make 1980
indeed a year of energy conservation.

Of course, we must take other actions to strengthen our Nation's
economy.

First, we will continue to reduce the deficit and then to balance the
Federal budget.

Second, as we continue to work with business to hold down prices, we'll
build also on the historic national accord with organized labor to
restrain pay increases in a fair fight against inflation.

Third, we will continue our successful efforts to cut paperwork and to
dismantle unnecessary Government regulation.

Fourth, we will continue our progress in providing jobs for America,
concentrating on a major new program to provide training and work for
our young people, especially minority youth. It has been said that "a
mind is a terrible thing to waste." We will give our young people new
hope for jobs and a better life in the 1980's.

And fifth, we must use the decade of the 1980's to attack the basic
structural weaknesses and problems in our economy through measures to
increase productivity, savings, and investment.

With these energy and economic policies, we will make America even
stronger at home in this decade--just as our foreign and defense
policies will make us stronger and safer throughout the world. We will
never abandon our struggle for a just and a decent society here at home.
That's the heart of America--and it's the source of our ability to
inspire other people to defend their own rights abroad.

Our material resources, great as they are, are limited. Our problems are
too complex for simple slogans or for quick solutions. We cannot solve
them without effort and sacrifice. Walter Lippmann once reminded us,
"You took the good things for granted. Now you must earn them again. For
every right that you cherish, you have a duty which you must fulfill.
For every good which you wish to preserve, you will have to sacrifice
your comfort and your ease. There is nothing for nothing any longer."

Our challenges are formidable. But there's a new spirit of unity and
resolve in our country. We move into the 1980's with confidence and hope
and a bright vision of the America we want: an America strong and free,
an America at peace, an America with equal rights for all citizens--and
for women, guaranteed in the United States Constitution--an America with
jobs and good health and good education for every citizen, an America
with a clean and bountiful life in our cities and on our farms, an
America that helps to feed the world, an America secure in filling its
own energy needs, an America of justice, tolerance, and compassion. For
this vision to come true, we must sacrifice, but this national
commitment will be an exciting enterprise that will unify our people.

Together as one people, let us work to build our strength at home, and
together as one indivisible union, let us seek peace and security
throughout the world.

Together let us make of this time of challenge and danger a decade of
national resolve and of brave achievement.

Thank you very much.

***

State of the Union Address
Jimmy Carter
January 16, 1981

To the Congress of the United States:

The State of the Union is sound. Our economy is recovering from a
recession. A national energy plan is in place and our dependence on
foreign oil is decreasing. We have been at peace for four uninterrupted
years.

But, our Nation has serious problems. Inflation and unemployment are
unacceptably high. The world oil market is increasingly tight. There are
trouble spots throughout the world, and 52 American hostages are being
held in Iran against international law and against every precept of
human affairs.

However, I firmly believe that, as a result of the progress made in so
many domestic and international areas over the past four years, our
Nation is stronger, wealthier, more compassionate and freer than it was
four years ago. I am proud of that fact. And I believe the Congress
should be proud as well, for so much of what has been accomplished over
the past four years has been due to the hard work, insights and
cooperation of Congress. I applaud the Congress for its efforts and its
achievements.

In this State of the Union Message I want to recount the achievements
and progress of the last four years and to offer recommendations to the
Congress for this year. While my term as President will end before the
97th Congress begins its work in earnest, I hope that my recommendations
will serve as a guide for the direction this country should take so we
build on the record of the past four years.

RECORD OF PROGRESS

When I took office, our Nation faced a number of serious domestic and
international problems:

--no national energy policy existed, and our dependence on foreign oil
was rapidly increasing;

--public trust in the integrity and openness of the government was low;

--the Federal government was operating inefficiently in administering
essential programs and policies;

--major social problems were being ignored or poorly addressed by the
Federal government;

--our defense posture was declining as a result of a defense budget
which was continuously shrinking in real terms;

--the strength of the NATO Alliance needed to be bolstered;

--tensions between Israel and Egypt threatened another Middle East war;
and

--America's resolve to oppose human rights violations was under serious
question.

Over the past 48 months, clear progress has been made in solving the
challenges we found in January of 1977:

--almost all of our comprehensive energy program have been enacted, and
the Department of Energy has been established to administer the program;
confidence in the government's integrity has been restored, and respect
for the government's openness and fairness has been renewed;

--the government has been made more effective and efficient: the Civil
Service system was completely reformed for the first time this century;

--14 reorganization initiatives have been proposed to the Congress,
approved, and implemented;

--two new Cabinet departments have been created to consolidate and
streamline the government's handling of energy and education problems;

--inspectors general have been placed in each Cabinet department to
combat fraud, waste and other abuses;

--the regulatory process has been reformed through creation of the
Regulatory Council, implementation of Executive Order 12044 and its
requirement for cost-impact analyses, elimination of unnecessary
regulation, and passage of the Regulatory Flexibility Act;

--procedures have been established to assure citizen participation in
government;

--and the airline, trucking, rail and communications industries are
being deregulated;

--critical social problems, many long ignored by the Federal government,
have been addressed directly;

--an urban policy was developed and implemented to reverse the decline
in our urban areas;

--the Social Security System was refinanced to put it on a sound
financial basis;

--the Humphrey-Hawkins Full Employment Act was enacted;

--Federal assistance for education was expanded by more than 75 percent;

--the minimum wage was increased to levels needed to ease the effects of
inflation;

--affirmative action has been pursued aggressively; more blacks,
Hispanics and women have been appointed to senior government positions
and to judgeships than at any other time in our history;

--the ERA ratification deadline was extended to aid the ratification
effort;

--and minority business procurement by the Federal government has more
than doubled;

--the Nation's first sectoral policies were put in place, for the auto
and steel industries, with my Administration demonstrating the value of
cooperation between the government, business and labor;

--reversing previous trends, real defense spending has increased every
year since 1977;

--the real increase in FY 1980 defense spending is well above 3 percent
and I expect FY 1981 defense spending to be even higher;

--looking ahead, the defense program I am proposing is premised on a
real increase in defense spending over the next five years of 20 percent
or more;

--the NATO Alliance has proven its unity in responding to the situations
in Eastern Europe and Southwest Asia and in agreeing on the issues to be
addressed in the review of the Helsinki Final Act currently underway in
Madrid;

--the peace process in the Middle East established at Camp David and by
the Peace Treaty between Egypt and Israel is being buttressed on two
fronts: steady progress in the normalization of Egyptian-Israeli
relations in many fields, and the commitment of both Egypt and Israel,
with United States' assistance, to see through to successful conclusion
the autonomy negotiations for the West Bank and Gaza;

--the Panama Canal Treaties have been put into effect, which has helped
to improve relations with Latin America;

--we have continued this Nation's strong commitment to the pursuit of
human rights throughout the world, evenhandedly and objectively;

--our commitment to a worldwide human rights policy has remained firm;

--and many other countries have given high priority to it;

--our resolve to oppose aggression, such as the illegal invasion of the
Soviet Union into Afghanistan, has been supported by tough action.

I. ENSURING ECONOMIC STRENGTH ECONOMY

During the last decade our Nation has withstood a series of economic
shocks unprecedented in peacetime. The most dramatic of these has been
the explosive increases of OPEC oil prices. But we have also faced world
commodity shortages, natural disasters, agricultural shortages and major
challenges to world peace and security. Our ability to deal with these
shocks has been impaired because of a decrease in the growth of
productivity and the persistence of underlying inflationary forces built
up over the past 15 years.

Nevertheless, the economy has proved to be remarkably resilient. Real
output has grown at an average rate of 3 percent per year since I took
office, and employment has grown by 10 percent. We have added about 8
million productive private sector jobs to the economy. However,
unacceptably high inflation--the most difficult economic problem I have
faced--persists.

This inflation--which threatens the growth, productivity, and stability
of our economy--requires that we restrain the growth of the budget to
the maximum extent consistent with national security and human
compassion. I have done so in my earlier budgets, and in my FY '82
budget. However, while restraint is essential to any appropriate
economic policy, high inflation cannot be attributed solely to
government spending. The growth in budget outlays has been more the
result of economic factors than the cause of them.

We are now in the early stages of economic recovery following a short
recession. Typically, a post-recessionary period has been marked by
vigorous economic growth aided by anti-recessionary policy measures such
as large tax cuts or big, stimulation spending programs. I have declined
to recommend such actions to stimulate economic activity, because the
persistent inflationary pressures that beset our economy today dictate a
restrained fiscal policy.

Accordingly, I am asking the Congress to postpone until January 1, 1982,
the personal tax reductions I had earlier proposed to take effect on
January 1 of this year.

However, my 1982 budget proposes significant tax changes to increase the
sources of financing for business investment. While emphasizing the need
for continued fiscal restraint, this budget takes the first major step
in a long-term tax reduction program designed to increase capital
formation. The failure of our Nation's capital stock to grow at a rate
that keeps pace with its labor force has clearly been one cause of our
productivity slowdown. Higher investment rates are also critically
needed to meet our Nation's energy needs, and to replace
energy-inefficient plants and equipment with new energy-saving physical
plants. The level of investment that is called for will not occur in the
absence of policies to encourage it.

Therefore, my budget proposes a major liberalization of tax allowances
for depreciation, as well as simplified depreciation accounting,
increasing the allowable rates by about 40 percent. I am also proposing
improvements in the investment tax credit, making it refundable, to meet
the investment needs of firms with no current earnings.

These two proposals, along with carefully-phased tax reductions for
individuals, will improve both economic efficiency and tax equity. I
urge the Congress to enact legislation along the lines and timetable I
have proposed.

THE 1982 BUDGET

The FY 1982 budget I have sent to the Congress continues our four-year
policy of prudence and restraint. While the budget deficits during my
term are higher than I would have liked, their size is determined for
the most part by economic conditions. And in spite of these conditions,
the relative size of the deficit continues to decline. In 1976, before I
took office, the budget deficit equalled 4 percent of gross national
product. It had been cut to 2.3 percent in the 1980 fiscal year just
ended. My 1982 budget contains a deficit estimated to be less than 1
percent of our gross national product.

The rate of growth in Federal spending has been held to a minimum.
Nevertheless, outlays are still rising more rapidly than many had
anticipated, the result of many powerful forces in our society:

We face a threat to our security, as events in Afghanistan, the Middle
East, and Eastern Europe make clear. We have a steadily aging population
and, as a result, the biggest single increase in the Federal budget is
the rising cost of retirement programs, particularly social security. We
face other important domestic needs: to continue responsibility for the
disadvantaged; to provide the capital needed by our cities and our
transportation systems; to protect our environment; to revitalize
American industry; and to increase the export of American goods and
services so essential to the creation of jobs and a trade surplus.

Yet the Federal Government itself may not always be the proper source of
such assistance. For example, it must not usurp functions if they can be
more appropriately decided upon, managed, and financed by the private
sector or by State and local governments. My Administration has always
sought to consider the proper focus of responsibility for the most
efficient resolution of problems.

We have also recognized the need to simplify the system of grants to
State and local governments. I have again proposed several grant
consolidations in the 1982 budget, including a new proposal that would
consolidate several highway programs.

The pressures for growth in Federal use of national resources are great.
My Administration has initiated many new approaches to cope with these
pressures. We started a multi-year budget system, and we began a system
for controlling Federal credit programs. Yet in spite of increasing
needs to limit spending growth, we have consistently adhered to these
strong budget principles:

Our Nation's armed forces must always stand sufficiently strong to deter
aggression and to assure our security. An effective national energy plan
is essential to increase domestic production of oil and gas, to
encourage conservation of our scarce energy resources, to stimulate
conversion to more abundant fuels, and to reduce our trade deficit. The
essential human needs for our citizens must be given the highest
priority. The Federal Government must lead the way in investment in the
Nation's technological future. The Federal Government has an obligation
to nurture and protect our environment--the common resource, birthright,
and sustenance of the American people.

My 1982 budget continues to support these principles. It also proposes
responsible tax reductions to encourage a more productive economy, and
adequate funding of our highest priority programs within an overall
policy of constraint.

Fiscal restraint must be continued in the years ahead. Budgets must be
tight enough to convince those who set wages and prices that the Federal
Government is serious about fighting inflation but not so tight as to
choke off all growth.

Careful budget policy should be supplemented by other measures designed
to reduce inflation at lower cost in lost output and employment. These
other steps include measures to increase investment--such as the tax
proposals included in my 1982 budget--and measures to increase
competition and productivity in our economy. Voluntary incomes policies
can also directly influence wages and prices in the direction of
moderation and thereby bring inflation down faster and at lower cost to
the economy. Through a tax-based incomes policy (TIP) we could provide
tax incentives for firms and workers to moderate their wage and price
increases. In the coming years, control of Federal expenditures can make
possible periodic tax reductions. The Congress should therefore begin
now to evaluate the potentialities of a TIP program so that when the
next round of tax reductions is appropriate a TIP program will be
seriously considered.

EMPLOYMENT

During the last four years we have given top priority to meeting the
needs of workers and providing additional job opportunities to those who
seek work. Since the end of 1976:

Almost 9 million new jobs have been added to the nation's economy total
employment has reached 97 million. More jobs than ever before are held
by women, minorities and young people. Employment over the past four
years has increased by: 17% for adult women 11% for blacks, and 30% for
Hispanics employment of black teenagers increased by more than 5%,
reversing the decline that occurred in the previous eight years.

Major initiatives launched by this Administration helped bring about
these accomplishments and have provided a solid foundation for
employment and training policy in the 1980's. In 1977, as part of the
comprehensive economic stimulus program:

425,000 public service jobs were created A $1 billion youth employment
initiative funded 200,000 jobs the doubling of the Job Corps to 44,000
slots began and 1 million summer youth jobs were approved--a 25 percent
increase.

In 1978:

The Humphrey-Hawkins Full Employment Act became law the $400 million
Private Sector Initiatives Program was begun a targeted jobs tax credit
for disadvantaged youth and others with special employment barriers was
enacted the Comprehensive Employment and Training Act was reauthorized
for four years.

In 1979:

A $6 billion welfare reform proposal was introduced with funding for
400,000 public service jobs welfare reform demonstration projects were
launched in communities around the country the Vice President initiated
a nationwide review of youth unemployment in this country.

In 1980:

The findings of the Vice President's Task Force revealed the major
education and employment deficits that exist for poor and minority
youngsters. As a result a $2 billion youth education and jobs initiative
was introduced to provide unemployed youth with the basic education and
work experience they need to compete in the labor market of the 1980's.
As part of the economic revitalization program several steps were
proposed to aid workers in high unemployment communities:

An additional 13 weeks of unemployment benefits for the long term
unemployed. $600 million to train the disadvantaged and unemployed for
new private sector jobs. Positive adjustment demonstrations to aid
workers in declining industries. The important Title VII Private Sector
Initiatives Program was reauthorized for an additional two years.

In addition to making significant progress in helping the disadvantaged
and unemployed, important gains were realized for all workers:

An historic national accord with organized labor made it possible for
the views of working men and women to be heard as the nation's economic
and domestic policies were formulated; the Mine Safety and Health Act
brought about improved working conditions for the nation's 500,000
miners. substantial reforms of Occupational Safety and Health
Administration were accomplished to help reduce unnecessary burdens on
business and to focus on major health and safety problems; the minimum
wage was increased over a four year period from $2.30 to $3.35 an hour;
the Black Lung Benefit Reform Act was signed into law; attempts to
weaken Davis-Bacon Act were defeated.

While substantial gains have been made in the last four years, continued
efforts are required to ensure that this progress is continued:

Government must continue to make labor a full partner in the policy
decisions that affect the interests of working men and women; a broad,
bipartisan effort to combat youth unemployment must be sustained
compassionate reform of the nation's welfare system should be continued
with employment opportunities provided for those able to work; workers
in declining industries should be provided new skills and help in
finding employment.

TRADE

Over the past year, the U.S. trade picture improved as a result of solid
export gains in both manufactured and agricultural products.
Agricultural exports reached a new record of over $40 billion, while
manufactured exports have grown by 24 percent to a record $144 billion.
In these areas the United States recorded significant surpluses of $24
billion and $19 billion respectively. While our oil imports remained a
major drain on our foreign exchange earnings, that drain was somewhat
moderated by a 19 percent decline in the volume of oil imports.

U.S. trade negotiators made significant progress over the past year in
assuring effective implementation of the agreements negotiated during
the Tokyo Round of Multilateral Trade Negotiations. Agreements reached
with the Japanese government, for example, will assure that the United
States will be able to expand its exports to the Japanese market in such
key areas as telecommunications equipment, tobacco, and lumber. Efforts
by U.S. trade negotiators also helped to persuade a number of key
developing countries to accept many of the non-tariff codes negotiated
during the Multilateral Trade Negotiations. This will assure that these
countries will increasingly assume obligations under the international
trading system.

A difficult world economic environment posed a challenge for the
management of trade relations. U.S. trade negotiators were called upon
to manage serious sectoral problems in such areas as steel, and helped
to assure that U.S. chemical exports will have continued access to the
European market.

Close consultations with the private sector in the United States have
enabled U.S. trade negotiators to pinpoint obstacles to U.S. trade in
services, and to build a basis for future negotiations. Services have
been an increasingly important source of export earnings for the United
States, and the United States must assure continued and increased access
to foreign markets.

The trade position of the United States has improved. But vigorous
efforts are needed in a number of areas to assure continued market
access for U.S. exports, particularly agricultural and high technology
products, in which the United States continues to have a strong
competitive edge. Continued efforts are also needed to remove many
domestic disincentives, which now hamper U.S. export growth. And we must
ensure that countries do not manipulate investment, or impose investment
performance requirements which distort trade and cost us jobs in this
country.

In short, we must continue to seek free--but fair--trade. That is the
policy my Administration has pursued from the beginning, even in areas
where foreign competition has clearly affected our domestic industry. In
the steel industry, for instance, we have put Trigger Price Mechanism
into place to help prevent the dumping of steel. That action has
strengthened the domestic steel industry. In the automobile industry, we
have worked-- without resort to import quotas--to strengthen the
industry's ability to modernize and compete effectively.

SMALL BUSINESS

I have often said that there is nothing small about small business in
America. These firms account for nearly one-half our gross national
product; over half of new technology; and much more than half of the
jobs created by industry.

Because this sector of the economy is the very lifeblood of our National
economy, we have done much together to improve the competitive climate
for smaller firms. These concerted efforts have been an integral part of
my program to revitalize the economy.

They include my campaign to shrink substantially the cash and time
consuming red tape burden imposed on business. They include my
personally-directed policy of ambitiously increasing the Federal
contracting dollars going to small firms, especially those owned by
women and minorities. And they include my proposals to reinvigorate
existing small businesses and assist the creation of new ones through
tax reform; financing assistance; market expansion; and support of
product innovation.

Many of my initiatives to facilitate the creation and growth of small
businesses were made in response to the White House Conference on Small
Business, which I convened. My Administration began the implementation
of most of the ideas produced last year by that citizen's advisory body;
others need to be addressed. I have proposed the reconvening of the
Conference next year to review progress; reassess priorities; and set
new goals. In the interim I hope that the incoming Administration and
the new Congress will work with the committee I have established to keep
these business development ideas alive and help implement Conference
recommendations.

MINORITY BUSINESS

One of the most successful developments of my Administration has been
the growth and strengthening of minority business. This is the first
Administration to put the issue on the policy agenda as a matter of
major importance. To implement the results of our early efforts in this
field I submitted legislation to Congress designed to further the
development of minority business.

We have reorganized the Office of Minority Business into the Minority
Business Development Administration in the Department of Commerce. MBDA
has already proven to be a major factor in assisting minority businesses
to achieve equitable competitive positions in the marketplace.

The Federal government's procurement from minority-owned firms has
nearly tripled since I took office. Federal deposits in minority-owned
banks have more than doubled and minority ownership of radio and
television stations has nearly doubled. The SBA administered 8(a) Pilot
Program for procurement with the Army proved to be successful and I
recently expanded the number of agencies involved to include NASA and
the Departments of Energy and Transportation.

I firmly believe the critical path to full freedom and equality for
America's minorities rests with the ability of minority communities to
participate competitively in the free enterprise system. I believe the
government has a fundamental responsibility to assist in the development
of minority business and I hope the progress made in the last four years
will continue.

II. CREATING ENERGY SECURITY

Since I took office, my highest legislative priorities have involved the
reorientation and redirection of U.S. energy activities and for the
first time, to establish a coordinated national energy policy. The
struggle to achieve that policy has been long and difficult, but the
accomplishments of the past four years make clear that our country is
finally serious about the problems caused by our overdependence on
foreign oil. Our progress should not be lost. We must rely on and
encourage multiple forms of energy production--coal, crude oil, natural
gas, solar, nuclear, synthetics--and energy conservation. The framework
put in place over the last four years will enable us to do this.

NATIONAL ENERGY POLICY

As a result of actions my Administration and the Congress have taken
over the past four years, our country finally has a national energy
policy:

Under my program of phased decontrol, domestic crude oil price controls
will end September 30, 1981. As a result exploratory drilling activities
have reached an all-time high; Prices for new natural gas are being
decontrolled under the Natural Gas Policy Act--and natural gas
production is now at an all time high; the supply shortages of several
years ago have been eliminated; The windfall profits tax on crude oil
has been enacted providing $227 billion over ten years for assistance to
low-income households, increased mass transit funding, and a massive
investment in the production and development of alternative energy
sources; The Synthetic Fuels Corporation has been established to help
private companies build the facilities to produce energy from synthetic
fuels; Solar energy funding has been quadrupled, solar energy tax
credits enacted, and a Solar Energy and Energy Conservation Bank has
been established; A route has been chosen to bring natural gas from the
North Slope of Alaska to the lower 48 states; Coal production and
consumption incentives have been increased, and coal production is now
at its highest level in history; A gasoline rationing plan has been
approved by Congress for possible use in the event of a severe energy
supply shortage or interruption; Gasohol production has been
dramatically increased, with a program being put in place to produce 500
million gallons of alcohol fuel by the end of this year--an amount that
could enable gasohol to meet the demand for 10 percent of all unleaded
gasoline; New energy conservation incentives have been provided for
individuals, businesses and communities and conservation has increased
dramatically. The U.S. has reduced oil imports by 25 percent--or 2
million barrels per day--over the past four years.

INCREASED DEVELOPMENT OF DOMESTIC ENERGY SOURCES

Although it is essential that the Nation reduce its dependence on
imported fossil fuels and complete the transition to reliance on
domestic renewable sources of energy, it is also important that this
transition be accomplished in an orderly, economic, and environmentally
sound manner. To this end, the Administration has launched several
initiatives.

Leasing of oil and natural gas on federal lands, particularly the outer
continental shelf, has been accelerated at the same time as the
Administration has reformed leasing procedures through the 1978
amendments to the Outer Continental Shelf Lands Act. In 1979 the
Interior Department held six OCS lease sales, the greatest number ever,
which resulted in federal receipts of $6.5 billion, another record. The
five-year OCS Leasing schedule was completed, requiring 36 sales over
the next five years.

Since 1971 no general federal coal lease sales were suspended. Over the
past four years the Administration has completely revised the federal
coal leasing program to bring it into compliance with the requirements
of 1976 Federal Land Planning and Management Act and other statutory
provisions. The program is designed to balance the competing interests
that affect resource development on public lands and to ensure that
adequate supplies of coal will be available to meet national needs. As a
result, the first general competitive federal coal lease sale in ten
years will be held this month.

In July 1980, I signed into law the Energy Security Act of 1980 which
established the Synthetic Fuels Corporation. The Corporation is designed
to spur the development of commercial technologies for production of
synthetic fuels, such as liquid and gaseous fuels from coal and the
production of oil from oil shale. The Act provides the Corporation with
an initial $22 billion to accomplish these objectives. The principal
purpose of the legislation is to ensure that the nation will have
available in the late 1980's the option to undertake commercial
development of synthetic fuels if that becomes necessary. The Energy
Security Act also provides significant incentives for the development of
gasohol and biomass fuels, thereby enhancing the nation's supply of
alternative energy sources.

COMMITMENT TO A SUSTAINABLE ENERGY FUTURE

The Administration's 1977 National Energy Plan marked an historic
departure from the policies of previous Administrations. The plan
stressed the importance of both energy production and conservation to
achieving our ultimate national goal of relying primarily on secure
sources of energy. The National Energy Plan made energy conservation a
cornerstone of our national energy policy.

In 1978, I initiated the Administration's Solar Domestic Policy Review.
This represented the first step towards widespread introduction of
renewable energy sources into the Nation's economy. As a result of the
Review, I issued the 1979 Solar Message to Congress, the first such
message in the Nation's history. The Message outlined the
Administration's solar program and established an ambitious national
goal for the year 2000 of obtaining 20 percent of this Nation's energy
from solar and renewable sources. The thrust of the federal solar
program is to help industry develop solar energy sources by emphasizing
basic research and development of solar technologies which are not
currently economic, such as photovoltaics, which generate energy
directly from the sun. At the same time, through tax incentives,
education, and the Solar Energy and Energy Conservation Bank, the solar
program seeks to encourage state and local governments, industry, and
our citizens to expand their use of solar and renewable resource
technologies currently available.

As a result of these policies and programs, the energy efficiency of the
American economy has improved markedly and investments in renewable
energy sources have grown significantly. It now takes 3 1/2 percent less
energy to produce a constant dollar of GNP than it did in January 1977.
This increase in efficiency represents a savings of over 1.3 million
barrels per day of oil equivalent, about the level of total oil
production now occurring in Alaska. Over the same period, Federal
support for conservation and solar energy has increased by more than
3000 percent, to $3.3 billion in FY 1981, including the tax credits for
solar energy and energy conservation investments--these credits are
expected to amount to $1.2 billion in FY 1981 and $1.5 billion in FY
1982.

COMMITMENT TO NUCLEAR SAFETY AND SECURITY

Since January 1977, significant progress has been achieved in resolving
three critical problems resulting from the use of nuclear energy:
radioactive waste management, nuclear safety and weapons proliferation.

In 1977, the Administration announced its nuclear nonproliferation
policy and initiated the International Fuel Cycle Evaluation. In 1978,
Congress passed the Nuclear Nonproliferation Act, an historic piece of
legislation.

In February 1980, the Administration transmitted its nuclear waste
management policy to the Congress. This policy was a major advance over
all previous efforts. The principal aspects of that policy are:
acknowledging the seriousness of the problem and the numerous technical
and institutional issues; adopting a technically and environmentally
conservative approach to the first permanent repository; and providing
the states with significant involvement in nuclear waste disposal
decisions by creating the State Planning Council. While much of the plan
can be and is being implemented administratively, some new authorities
are needed. The Congress should give early priority to enacting
provisions for away-from-reactor storage and the State Planning Council.

The accident at Three Mile Island made the nation acutely aware of the
safety risks posed by nuclear power plants. In response, the President
established the Kemeny Commission to review the accident and make
recommendations. Virtually all of the Commission's substantive
recommendations were adopted by the Administration and are now being
implemented by the Nuclear Regulatory Commission. The Congress adopted
the President's proposed plan for the Nuclear Regulatory Commission and
the Nuclear Safety Oversight Committee was established to ensure that
the Administration's decisions were implemented.

Nuclear safety will remain a vital concern in the years ahead. We must
continue to press ahead for the safe, secure disposal of radioactive
wastes, and prevention of nuclear proliferation.

While significant growth in foreign demand for U.S. steam coal is
foreseen, congestion must be removed at major U.S. coal exporting ports
such as Hampton Roads, Virginia, and Baltimore, Maryland. My
Administration has worked through the Interagency Coal Task Force Study
to promote cooperation and coordination of resources between shippers,
railroads, vessel broker/ operators and port operators, and to determine
the most appropriate Federal role in expanding and modernizing coal
export facilities, including dredging deeper channels at selected ports.
As a result of the Task Force's efforts, administrative steps have been
taken by the Corps of Engineers to reduce significantly the amount of
time required for planning and economic review of port dredging
proposals. The Administration has also recommended that the Congress
enact legislation to give the President generic authority to recommend
appropriations for channel dredging activities. Private industry will,
of course, play the major role in developing the United States' coal
export facilities, but the government must continue to work to
facilitate transportation to foreign markets.

III. ENHANCING BASIC HUMAN AND SOCIAL NEEDS

For too long prior to my Administration, many of our Nation's basic
human and social needs were being ignored or handled insensitively by
the Federal government. Over the last four years, we have significantly
increased funding for many of the vital programs in these areas;
developed new programs where needs were unaddressed; targeted Federal
support to those individuals and areas most in need of our assistance;
and removed barriers that have unnecessarily kept many disadvantaged
citizens from obtaining aid for their most basic needs.

Our record has produced clear progress in the effort to solve some of
the country's fundamental human and social problems. My Administration
and the Congress, working together, have demonstrated that government
must and can meet our citizens' basic human and social needs in a
responsible and compassionate way.

But there is an unfinished agenda still before the Congress. If we are
to meet our obligations to help all Americans realize the dreams of
sound health care, decent housing, effective social services, a good
education, and a meaningful job, important legislation still must be
enacted. National Health Insurance, Welfare Reform, Child Health
Assessment Program, are before the Congress and I urge their passage.

HEALTH NATIONAL HEALTH PLAN

During my Administration, I proposed to Congress a National Health Plan
which will enable the country to reach the goal of comprehensive,
universal health care coverage. The legislation I submitted lays the
foundation for this comprehensive plan and addresses the most serious
problems of health financing and delivery. It is realistic and
enactable. It does not overpromise or overspend, and, as a result, can
be the solution to the thirty years of Congressional battles on national
health insurance. My Plan includes the following key features:

Nearly 15 million additional poor would receive fully-subsidized
comprehensive coverage; pre-natal and delivery services are provided for
all pregnant women and coverage is provided for all acute care for
infants in their first year of life; the elderly and disabled would have
a limit of $1,250 placed on annual out-of-pocket medical expenses and
would no longer face limits on hospital coverage; all full-time
employees and their families would receive insurance against at least
major medical expenses under mandated employer coverage; Medicare and
Medicaid would be combined and expanded into an umbrella Federal
program, Healthcare, for increased program efficiency, accountability
and uniformity; and strong cost controls and health system reforms would
be implemented, including greater incentives for Health Maintenance
Organizations.

I urge the new Congress to compare my Plan with the
alternatives--programs which either do too little to improve the health
care needs of Americans most in need or programs which would impose
substantial financial burdens on the American taxpayers. I hope the
Congress will see the need for and the benefits of my Plan and work
toward prompt enactment. We cannot afford further delay in this vital
area.

HEALTH CARE COST CONTROL

Inflation in health care costs remains unacceptably high. Throughout my
Administration, legislation to reduce health care cost inflation was one
of my highest priorities, but was not passed by the Congress. Therefore,
my FY 1982 budget proposes sharing the responsibility for health care
cost control with the private sector, through voluntary hospital cost
guidelines and intensified monitoring. In the longer term, the health
care reimbursement system must be reformed. We must move away from
inflationary cost-based reimbursement and fee-for-service, and toward a
system of prospective reimbursement, under which health care providers
would operate within predetermined budgets. This reimbursement reform is
essential to ultimately control inflation in health care costs, and will
be a significant challenge to the new Congress.

HEALTH PROMOTION AND DISEASE PREVENTION

During my Administration, the Surgeon General released "Healthy People,"
a landmark report on health promotion and disease prevention. The report
signals the growing consensus that the Nation's health strategy must be
refocused in the 1980's to emphasize the prevention of disease.
Specifically, the report lays out measurable and achieveable goals in
the reduction of mortality which can be reached by 1990.

I urge the new Congress to endorse the principles of "Healthy People,"
and to adopt the recommendations to achieve its goals. This will
necessitate adoption of a broader concept of health care, to include
such areas as environmental health, workplace health and safety,
commercial product safety, traffic safety, and health education,
promotion and information.

MATERNAL AND CHILD HEALTH

Ensuring a healthy start in life for children remains not only a high
priority of my Administration, but also one of the most cost effective
forms of health care.

When I took office, immunization levels for preventable childhood
diseases had fallen to 70%. As a result of a concerted nationwide effort
during my Administration, I am pleased to report that now at least 90%
of children under 15, and virtually all school-age children are
immunized. In addition, reported cases of measles and mumps are at their
lowest levels ever.

Under the National Health Plan I have proposed, there would be no
cost-sharing for prenatal and delivery services for all pregnant women
and for acute care provided to infants in their first year of life.
These preventive services have extremely high returns in terms of
improved newborn and long-term child health.

Under the Child Health Assurance Program (CHAP) legislation which I
submitted to the Congress, and which passed the House, an additional two
million low-income children under 18 would become eligible for Medicaid
benefits, which would include special health assessments. CHAP would
also improve the continuity of care for the nearly 14 million children
now eligible for Medicaid. An additional 100,000 low-income pregnant
women would become eligible for prenatal care under the proposal. I
strongly urge the new Congress to enact CHAP and thereby provide
millions of needy children with essential health services. The
legislation has had strong bipartisan support, which should continue as
the details of the bill are completed.

I also urge the new Congress to provide strong support for two highly
successful ongoing programs: the special supplemental food program for
women, infants and children (WIC) and Family Planning. The food
supplements under WIC have been shown to effectively prevent ill health
and thereby reduce later medical costs. The Family Planning program has
been effective at reducing unwanted pregnancies among low-income women
and adolescents.

EXPANSION OF SERVICES TO THE POOR AND UNDERSERVED

During my Administration, health services to the poor and underserved
have been dramatically increased. The number of National Health Service
Corps (NHSC) assignees providing services in medically underserved
communities has grown from 500 in 1977 to nearly 3,000 in 1981. The
population served by the NHSC has more than tripled since 1977. The
number of Community Health Centers providing services in high priority
underserved areas has doubled during my Administration, and will serve
an estimated six million people in 1981. I strongly urge the new
Congress to support these highly successful programs.

MENTAL HEALTH

One of the most significant health achievements during my Administration
was the recent passage of the Mental Health Systems Act, which grew out
of recommendations of my Commission on Mental Health. I join many others
in my gratitude to the First Lady for her tireless and effective
contribution to the passage of this important legislation.

The Act is designed to inaugurate a new era of Federal and State
partnership in the planning and provision of mental health services. In
addition, the Act specifically provides for prevention and support
services to the chronically mentally ill to prevent unnecessary
institutionalization and for the development of community-based mental
health services. I urge the new Congress to provide adequate support for
the full and timely implementation of this Act.

HEALTH PROTECTION

With my active support, the Congress recently passed "Medigap"
legislation, which provides for voluntary certification of health
insurance policies supplemental to Medicare, to curb widespread abuses
in this area.

In the area of toxic agent control, legislation which I submitted to the
Congress recently passed. This will provide for a "super-fund" to cover
hazardous waste cleanup costs.

In the area of accidental injury control, we have established automobile
safety standards and increased enforcement activities with respect to
the 55 MPH speed limit. By the end of the decade these actions are
expected to save over 13,000 lives and 100,000 serious injuries each
year.

I urge the new Congress to continue strong support for all these
activities.

FOOD AND NUTRITION

Building on the comprehensive reform of the Food Stamp Program that I
proposed and Congress passed in 1977, my Administration and the Congress
worked together in 1979 and 1980 to enact several other important
changes in the Program. These changes will further simplify
administration and reduce fraud and error, will make the program more
responsive to the needs of the elderly and disabled, and will increase
the cap on allowable program expenditures. The Food Stamp Act will
expire at the end of fiscal 1981. It is essential that the new
Administration and the Congress continue this program to ensure complete
eradication of the debilitating malnutrition witnessed and documented
among thousands of children in the 1960's.

DRUG ABUSE PREVENTION

At the beginning of my Administration there were over a half million
heroin addicts in the United States. Our continued emphasis on reducing
the supply of heroin, as well as providing treatment and rehabilitation
to its victims, has reduced the heroin addict population, reduced the
number of heroin overdose deaths by 80%, and reduced the number of
heroin related injuries by 50%. We have also seen and encouraged a
national movement of parents and citizens committed to reversing the
very serious and disturbing trends of adolescent drug abuse.

Drug abuse in many forms will continue to detract, however, from the
quality of life of many Americans. To prevent that, I see four great
challenges in the years ahead. First, we must deal aggressively with the
supplies of illegal drugs at their source, through joint crop
destruction programs with foreign nations and increased law enforcement
and border interdiction. Second, we must look to citizens and parents
across the country to help educate the increasing numbers of American
youth who are experimenting with drugs to the dangers of drug abuse.
Education is a key factor in reducing drug abuse. Third, we must focus
our efforts on drug and alcohol abuse in the workplace for not only does
this abuse contribute to low productivity but it also destroys the
satisfaction and sense of purpose all Americans can gain from the work
experience. Fourth, we need a change in attitude, from an attitude which
condones the casual use of drugs to one that recognizes the appropriate
use of drugs for medical purposes and condemns the inappropriate and
harmful abuse of drugs. I hope the Congress and the new Administration
will take action to meet each of these challenges.

EDUCATION

The American people have always recognized that education is one of the
soundest investments they can make. The dividends are reflected in every
dimension of our national life--from the strength of our economy and
national security to the vitality of our music, art, and literature.
Among the accomplishments that have given me the most satisfaction over
the last four years are the contributions that my Administration has
been able to make to the well-being of students and educators throughout
the country.

This Administration has collaborated successfully with the Congress on
landmark education legislation. Working with the Congressional
leadership, my Administration spotlighted the importance of education by
creating a new Department of Education. The Department has given
education a stronger voice at the Federal level, while at the same time
reserving the actual control and operation of education to states,
localities, and private institutions. The Department has successfully
combined nearly 150 Federal education programs into a cohesive,
streamlined organization that is more responsive to the needs of
educators and students. The Department has made strides to cut red tape
and paperwork and thereby to make the flow of Federal dollars to school
districts and institutions of higher education more efficient. It is
crucial that the Department be kept intact and strengthened.

Our collaboration with the Congress has resulted in numerous other
important legislative accomplishments for education. A little over two
years ago, I signed into law on the same day two major bills--one
benefiting elementary and secondary education and the other,
postsecondary education. The Education Amendments of 1978 embodied
nearly all of my Administration's proposals for improvements in the
Elementary and Secondary Education Act, including important new programs
to improve students' achievement in the basic skills and to aid school
districts with exceptionally high concentrations of children from
low-income families. The Middle Income Student Assistance Act,
legislation jointly sponsored by this Administration and the
Congressional leadership, expanded eligibility for need-based Basic
Educational Opportunity Grants to approximately one-third of the
students enrolled in post-secondary education and made many more
students eligible for the first time for other types of grants,
work-study, and loans.

Just three and a half months ago, my Administration and the Congress
successfully concluded over two years of work on a major reauthorization
bill that further expands benefits to postsecondary education. Reflected
in the Education Amendments of 1980 are major Administration
recommendations for improvements in the Higher Education Act--including
proposals for better loan access for students; a new parent loan
program; simplified application procedures for student financial aid; a
strengthened Federal commitment to developing colleges, particularly the
historically Black institutions; a new authorization for equipment and
facilities modernization funding for the nation's major research
universities; and revitalized international education programs.

Supplementing these legislative accomplishments have been important
administrative actions aimed at reducing paperwork and simplifying
regulations associated with Federal education programs. We also launched
major initiatives to reduce the backlog of defaulted student loans and
otherwise to curb fraud, abuse, and waste in education programs.

To insure that the education enterprise is ready to meet the scientific
and technological changes of the future, we undertook a major study of
the status of science and engineering education throughout the nation. I
hope that the findings from this report will serve as a springboard for
needed reforms at all levels of education.

I am proud that this Administration has been able to provide the
financial means to realize many of our legislative and administrative
goals. Compared to the previous administration's last budget, I have
requested the largest overall increase in Federal funding for education
in our nation's history. My budget requests have been particularly
sensitive to the needs of special populations like minorities, women,
the educationally and economically disadvantaged, the handicapped, and
students with limited English-speaking ability. At the same time, I have
requested significant increases for many programs designed to enhance
the quality of American education, including programs relating to
important areas as diverse as international education, research
libraries, museums, and teacher centers.

Last year, I proposed to the Congress a major legislative initiative
that would direct $2 billion into education and job training programs
designed to alleviate youth unemployment through improved linkages
between the schools and the work place. This legislation generated
bipartisan support; but unfortunately, action on it was not completed in
the final, rushed days of the 96th Congress. I urge the new Congress--as
it undertakes broad efforts to strengthen the economy as well as more
specific tasks like reauthorizing the Vocational Education Act--to make
the needs of our nation's unemployed youth a top priority for action.
Only by combining a basic skills education program together with work
training and employment incentives can we make substantial progress in
eliminating one of the most severe social problems in our nation--youth
unemployment, particularly among minorities. I am proud of the progress
already made through passage of the Youth Employment and Demonstration
Project Act of 1977 and the substantial increase in our investment in
youth employment programs. The new legislation would cap these efforts.

INCOME SECURITY SOCIAL SECURITY

One of the highest priorities of my Administration has been to continue
the tradition of effectiveness and efficiency widely associated with the
social security program, and to assure present and future beneficiaries
that they will receive their benefits as expected. The earned benefits
that are paid monthly to retired and disabled American workers and their
families provide a significant measure of economic protection to
millions of people who might otherwise face retirement or possible
disability with fear. I have enacted changes to improve the benefits of
many social security beneficiaries during my years as President.

The last four years have presented a special set of concerns over the
financial stability of the social security system. Shortly after taking
office I proposed and Congress enacted legislation to protect the
stability of the old age and survivors trust fund and prevent the
imminent exhaustion of the disability insurance trust fund, and to
correct a flaw in the benefit formula that was threatening the long run
health of the entire social security system. The actions taken by the
Congress at my request helped stabilize the system. That legislation was
later complemented by the Disability Insurance Amendments of 1980 which
further bolstered the disability insurance program, and reduced certain
inequities among beneficiaries.

My commitment to the essential retirement and disability protection
provided to 35 million people each month has been demonstrated by the
fact that without interruption those beneficiaries have continued to
receive their social security benefits, including annual cost of living
increases. Changing and unpredictable economic circumstances require
that we continue to monitor the financial stability of the social
security system. To correct anticipated short-term strains on the
system, I proposed last year that the three funds be allowed to borrow
from one another, and I urge the Congress again this year to adopt such
interfund borrowing. To further strengthen the social security system
and provide a greater degree of assurance to beneficiaries, given
projected future economic uncertainties, additional action should be
taken. Among the additional financing options available are borrowing
from the general fund, financing half of the hospital insurance fund
with general revenues, and increasing the payroll tax rate. The latter
option is particularly unpalatable given the significant increase in the
tax rate already mandated in law.

This Administration continues to oppose cuts in basic social security
benefits and taxing social security benefits. The Administration
continues to support annual indexing of social security benefits.

WELFARE REFORM

In 1979 I proposed a welfare reform package which offers solutions to
some of the most urgent problems in our welfare system. This proposal is
embodied in two bills, The Work and Training Opportunities Act and The
Social Welfare Reform Amendments Act. The House passed the second of
these two proposals. Within the framework of our present welfare system,
my reform proposals offer achievable means to increase self-sufficiency
through work rather than welfare, more adequate assistance to people
unable to work, the removal of inequities in coverage under current
programs, and fiscal relief needed by States and localities.

Our current welfare system is long overdue for serious reform; the
system is wasteful and not fully effective. The legislation I have
proposed will help eliminate inequities by establishing a national
minimum benefit, and by directly relating benefit levels to the poverty
threshold. It will reduce program complexity, which leads to
inefficiency and waste, by simplifying and coordinating administration
among different programs.

I urge the Congress to take action in this area along the lines I have
recommended.

CHILD WELFARE

My Administration has worked closely with the Congress on legislation
which is designed to improve greatly the child welfare services and
foster care programs and to create a Federal system of adoption
assistance. These improvements will be achieved with the recent
enactment of H.R. 3434, the Adoption Assistance and Child Welfare Act of
1980. The well-being of children in need of homes and their permanent
placement have been a primary concern of my Administration. This
legislation will ensure that children are not lost in the foster care
system, but instead will be returned to their families where possible or
placed in permanent adoptive homes.

LOW-INCOME ENERGY ASSISTANCE

In 1979 I proposed a program to provide an annual total of $1.6 billion
to low-income households which are hardest hit by rising energy bills.
With the cooperation of Congress, we were able to move quickly to
provide assistance to eligible households in time to meet their winter
heating bills.

In response to the extreme heat conditions affecting many parts of the
country during 1980, I directed the Community Services Administration to
make available over $27 million to assist low-income individuals,
especially the elderly, facing life threatening circumstances due to
extreme heat.

Congress amended and reauthorized the low-income energy assistance
program for fiscal year 1981, and provided $1.85 billion to meet
anticipated increasing need. The need for a program to help low-income
households with rising energy expenses will not abate in the near
future. The low-income energy assistance program should be reauthorized
to meet those needs.

HOUSING

For the past 14 months, high interest rates have had a severe impact on
the nation's housing market. Yet the current pressures and uncertainties
should not obscure the achievements of the past four years.

Working with the Congress, the regulatory agencies, and the financial
community, my Administration has brought about an expanded and steadier
flow of funds into home mortgages. Deregulation of the interest rates
payable by depository institutions, the evolution of variable and
renegotiated rate mortgages, development of high yielding savings
certificates, and expansion of the secondary mortgage market have all
increased housing's ability to attract capital and have assured that
mortgage money would not be cut off when interest rates rose. These
actions will diminish the cyclicality of the housing industry. Further,
we have secured legislation updating the Federal Government's emergency
authority to provide support for the housing industry through the
Brooke-Cranston program, and creating a new Section 235 housing stimulus
program. These tools will enable the Federal Government to deal quickly
and effectively with serious distress in this critical industry.

We have also worked to expand homeownership opportunities for Americans.
By using innovative financing mechanisms, such as the graduated payment
mortgage, we have increased the access of middle income families to
housing credit. By revitalizing the Section 235 program, we have enabled
nearly 100,000 moderate income households to purchase new homes. By
reducing paperwork and regulation in Federal programs, and by working
with State and local governments to ease the regulatory burden, we have
helped to hold down housing costs and produce affordable housing.

As a result of these governmentwide efforts, 5 1/2 million more American
families bought homes in the past four years than in any equivalent
period in history. And more than 7 million homes have begun construction
during my Administration, 1 million more than in the previous four
years.

We have devoted particular effort to meeting the housing needs of low
and moderate income families. In the past four years, more than 1
million subsidized units have been made available for occupancy by lower
income Americans and more than 600,000 assisted units have gone into
construction. In addition, we have undertaken a series of measures to
revitalize and preserve the nation's 2 million units of public and
assisted housing.

For Fiscal Year 1982, I am proposing to continue our commitment to lower
income housing. I am requesting funds to support 260,000 units of
Section 8 and public housing, maintaining these programs at the level
provided by Congress in Fiscal 1981.

While we have made progress in the past four years, in the future there
are reasons for concern. Home price inflation and high interest rates
threaten to put homeownership out of reach for first-time homebuyers.
Lower income households, the elderly and those dependent upon rental
housing face rising rents, low levels of rental housing construction by
historic standards, and the threat of displacement due to conversion to
condominiums and other factors. Housing will face strong competition for
investment capital from the industrial sector generally and the energy
industries, in particular.

To address these issues, I appointed a Presidential Task Force and
Advisory Group last October. While this effort will not proceed due to
the election result, I hope the incoming Administration will proceed
with a similar venture.

The most important action government can take to meet America's housing
needs is to restore stability to the economy and bring down the rate of
inflation. Inflation has driven up home prices, operating costs and
interest rates. Market uncertainty about inflation has contributed to
the instability in interest rates, which has been an added burden to
homebuilders and homebuyers alike. By making a long-term commitment to
provide a framework for greater investment, sustained economic growth,
and price stability, my Administration has begun the work of creating a
healthy environment for housing.

TRANSPORTATION

With the passage of the Airline Deregulation Act of 1978, the Motor
Carrier Act of 1980, and the Harley O. Staggers Rail Act of 1980, my
Administration, working with the Congress, has initiated a new era of
reduced regulation of transportation industries. Deregulation will lead
to increased productivity and operating efficiencies in the industries
involved, and stimulate price and service competition, to the benefit of
consumers generally. I urge the new Administration to continue our
efforts on behalf of deregulation legislation for the intercity
passenger bus industry as well.

In the coming decade, the most significant challenge facing the nation
in transportation services will be to improve a deteriorating physical
infrastructure of roadways, railroads, waterways and mass transit
systems, in order to conserve costly energy supplies while promoting
effective transportation services.

HIGHWAYS

Our vast network of highways, which account for 90 percent of travel and
80 percent by value of freight traffic goods movement, is deteriorating.
If current trends continue, a major proportion of the Interstate
pavement will have deteriorated by the end of the 1980's.

Arresting the deterioration of the nation's system of highways is a high
priority objective for the 1980's. We must reorient the Federal mission
from major new construction projects to the stewardship of the existing
Interstate Highway System. Interstate gaps should be judged on the
connections they make and on their compatibility with community needs.

During this decade, highway investments will be needed to increase
productivity, particularly in the elimination of bottlenecks, provide
more efficient connections to ports and seek low-cost solutions to
traffic demand.

My Administration has therefore recommended redefining completion of the
Interstate system, consolidating over 27 categorical assistance programs
into nine, and initiating a major repair and rehabilitation program for
segments of the Interstate system. This effort should help maintain the
condition and performance of the Nation's highways, particularly the
Interstate and primary system; provide a realistic means to complete the
Interstate system by 1990; ensure better program delivery through
consolidation, and assist urban revitalization. In addition, the
Congress must address the urgent funding problems of the highway trust
fund, and the need to generate greater revenues.

MASS TRANSIT

In the past decade the nation's public transit systems' ridership
increased at an annual average of 1.1% each year in the 1970's (6.9% in
1979). Continued increases in the cost of fuel are expected to make
transit a growing part of the nation's transportation system.

As a result, my Administration projected a ten year, $43 billion program
to increase mass transit capacity by 50 percent, and promote more energy
efficient vehicle uses in the next decade. The first part of this
proposal was the five year, $24.7 billion Urban Mass Transportation
Administration reauthorization legislation I sent to the Congress in
March, 1980. I urge the 97th Congress to quickly enact this or similar
legislation in 1981.

My Administration was also the first to have proposed and signed into
law a non-urban formula grant program to assist rural areas and small
communities with public transportation programs to end their dependence
on the automobile, promote energy conservation and efficiency, and
provide transportation services to impoverished rural communities.

A principal need of the 1980's will be maintaining mobility for all
segments of the population in the face of severely increasing
transportation costs and uncertainty of fuel supplies. We must improve
the flexibility of our transportation system and offer greater choice
and diversity in transportation services. While the private automobile
will continue to be the principal means of transportation for many
Americans, public transportation can become an increasingly attractive
alternative. We, therefore, want to explore a variety of paratransit
modes, various types of buses, modern rapid transit, regional rail
systems and light rail systems.

Highway planning and transit planning must be integrated and related to
State, regional, district and neighborhood planning efforts now in place
or emerging. Low density development and land use threaten the fiscal
capacity of many communities to support needed services and
infrastructure.

ELDERLY AND HANDICAPPED TRANSPORTATION

Transportation policies in the 1980's must pay increasing attention to
the needs of the elderly and handicapped. By 1990, the number of people
over 65 will have grown from today's 19 million to 27 million. During
the same period, the number of handicapped--people who have difficulty
using transit as well as autos, including the elderly--is expected to
increase from 9 to 11 million, making up 4.5 percent of the population.

We must not retreat from a policy that affords a significant and growing
portion of our population accessible public transportation while
recognizing that the handicapped are a diverse group and will need
flexible, door-to-door service where regular public transportation will
not do the job.

RAILROADS

In addition, the Federal government must reassess the appropriate
Federal role of support for passenger and freight rail services such as
Amtrak and Conrail. Our goal through federal assistance should be to
maintain and enhance adequate rail service, where it is not otherwise
available to needy communities. But Federal subsidies must be closely
scrutinized to be sure they are a stimulus to, and not a replacement
for, private investment and initiative. Federal assistance cannot mean
permanent subsidies for unprofitable operations.

WATERWAYS AND RURAL TRANSPORTATION

There is a growing need in rural and small communities for improved
transportation services. Rail freight service to many communities has
declined as railroads abandon unproductive branch lines. At the same
time, rural roads are often inadequate to handle large, heavily-loaded
trucks. The increased demand for "harvest to harbor" service has also
placed an increased burden on rural transportation systems, while
bottlenecks along the Mississippi River delay grain shipments to the
Gulf of Mexico.

We have made some progress:

--To further develop the nation's waterways, my Administration began
construction of a new 1,200 foot lock at the site of Lock and Dam 26 on
the Mississippi River. When opened in 1987, the new lock will have a
capacity of 86 million tons per year, an 18 percent increase over the
present system. The U.S. Army Corps of Engineers has also undertaken
studies to assess the feasibility of expanding the Bonneville Locks.
Rehabilitation of John Day Lock was begun in 1980 and should be
completed in 1982. My Administration also supports the completion of the
Upper Mississippi River Master Plan to determine the feasibility of
constructing a second lock at Alton, Illinois. These efforts will help
alleviate delays in transporting corn, soybeans and other goods along
the Mississippi River to the Gulf of Mexico.

--The Department of Transportation's new Small Community and Rural
Transportation Policy will target federal assistance for passenger
transportation, roads and highways, truck service, and railroad freight
service to rural areas. This policy implements and expands upon the
earlier White House Initiative, "Improving Transportation in Rural
America," announced in June, 1979, and the President's "Small Community
and Rural Development Policy" announced in December, 1979. The Congress
should seek ways to balance rail branch line abandonment with the
service needs of rural and farm communities, provide financial
assistance to rail branch line rehabilitation where appropriate, assist
shippers to adjust to rail branch line abandonment where it takes place,
and help make it possible for trucking firms to serve light density
markets with dependable and efficient trucking services.

MARITIME POLICY

During my Administration I have sought to ensure that the U.S. maritime
industry will not have to function at an unfair competitive disadvantage
in the international market. As I indicated in my maritime policy
statement to the Congress in July, 1979, the American merchant marine is
vital to our Nation's welfare, and Federal actions should promote rather
than harm it. In pursuit of this objective, I signed into law the
Controlled Carrier Act of 1978, authorizing the Federal Maritime
Commission to regulate certain rate cutting practices of some
state-controlled carriers, and recently signed a bilateral maritime
agreement with the People's Republic of China that will expand the
access of American ships to 20 specified Chinese ports, and set aside
for American-flag ships a substantial share (at least one-third) of the
cargo between our countries. This agreement should officially foster
expanded U.S. and Chinese shipping services linking the two countries,
and will provide further momentum to the growth of Sino-American trade.

There is also a need to modernize and expand the dry bulk segment of our
fleet. Our heavy dependence on foreign carriage of U.S.-bulk cargoes
deprives the U.S. economy of seafaring and shipbuilding jobs, adds to
the balance-of-payments deficit, deprives the Government of substantial
tax revenues, and leaves the United States dependent on foreign-flag
shipping for a continued supply of raw materials to support the civil
economy and war production in time of war.

I therefore sent to the Congress proposed legislation to strengthen this
woefully weak segment of the U.S.-flag fleet by removing certain
disincentives to U.S. construction of dry bulkers and their operation
under U.S. registry. Enactment of this proposed legislation would
establish the basis for accelerating the rebuilding of the U.S.-flag dry
bulk fleet toward a level commensurate with the position of the United
States as the world's leading bulk trading country.

During the past year the Administration has stated its support for
legislation that would provide specific Federal assistance for the
installation of fuel-efficient engines in existing American ships, and
would strengthen this country's shipbuilding mobilization base.
Strengthening the fleet is important, but we must also maintain our
shipbuilding base for future ship construction.

Provisions in existing laws calling for substantial or exclusive use of
American-flag vessels to carry cargoes generated by the Government must
be vigorously pursued.

I have therefore supported requirements that 50 percent of oil purchased
for the strategic petroleum reserve be transported in U.S.-flag vessels,
that the Cargo Preference Act be applied to materials furnished for the
U.S. assisted construction of air bases in Israel, and to cargoes
transported pursuant to the Chrysler Corporation Loan Guarantee Act. In
addition, the deep Seabed Hard Mineral Resources Act requires that at
least one ore carrier per mine site be a U.S.-flag vessel.

Much has been done, and much remains to be done. The FY 1982 budget
includes a $107 million authorization for Construction Differential
Subsidy ("CDS") funds which, added to the unobligated CDS balance of
$100 million from 1980, and the recently enacted $135 million 1981
authorization, will provide an average of $171 million in CDS funds in
1981 and 1982.

COAL EXPORT POLICY

While significant growth in foreign demand for U.S. steam coal is
foreseen, congestion at major U.S. coal exporting ports such as Hampton
Roads, Virginia, and Baltimore, Maryland, could delay and impede
exports.

My Administration has worked through the Interagency Coal Task Force
Study, which I created, to promote cooperation and coordination of
resources between shippers, railroads, vessel broker/ operators and port
operators, and to determine the most appropriate Federal role in
expanding and modernizing coal export facilities, including dredging
deeper channels at selected ports.

Some progress has already been made. In addition to action taken by
transshippers to reduce the number of coal classifications used whenever
possible, by the Norfolk and Western Railroad to upgrade its computer
capability to quickly inventory its coal cars in its yards, and by the
Chessie Railroad which is reactivating Pier 15 in Newport News and has
established a berth near its Curtis Bay Pier in Baltimore to decrease
delays in vessel berthing, public activities will include:

--A $26.5 million plan developed by the State of Pennsylvania and
Conrail to increase Conrail's coal handling capacity at Philadelphia;

--A proposal by the State of Virginia to construct a steam coal port on
the Craney Island Disposal area in Portsmouth harbor;

--Plans by Mobile, Alabama, which operates the only publicly owned coal
terminal in the U.S. to enlarge its capacity at McDuffie Island to 10
million tons ground storage and 100 car unit train unloading capability;

--Development at New Orleans of steam coal facilities that are expected
to add over 20 million tons of annual capacity by 1983; and

--The Corps of Engineers, working with other interested Federal
agencies, will determine which ports should be dredged, to what depth
and on what schedule, in order to accommodate larger coal carrying
vessels.

Private industry will, of course, play a major role in developing the
United States' coal export facilities. The new Administration should
continue to work to eliminate transportation bottlenecks that impede our
access to foreign markets.

Special Needs

WOMEN

The past four years have been years of rapid advancement for women. Our
focus has been two-fold: to provide American women with a full range of
opportunities and to make them a part of the mainstream of every aspect
of our national life and leadership.

I have appointed a record number of women to judgeships and to top
government posts. Fully 22 percent of all my appointees are women, and I
nominated 41 of the 46 women who sit on the Federal bench today. For the
first time in our history, women occupy policymaking positions at the
highest level of every Federal agency and department and have
demonstrated their ability to serve our citizens well.

We have strengthened the rights of employed women by consolidating and
strengthening enforcement of sex discrimination laws under the EEOC, by
expanding employment rights of pregnant women through the Pregnancy
Disability Bill, and by increasing federal employment opportunities for
women through civil service reform, and flexi-time and part-time
employment.

By executive order, I created the first national program to provide
women businessowners with technical assistance, grants, loans, and
improved access to federal contracts.

We have been sensitive to the needs of women who are homemakers. I
established an Office of Families within HHS and sponsored the White
House Conference on Families. We initiated a program targeting CETA
funds to help displaced homemakers. The Social Security system was
amended to eliminate the widow's penalty and a comprehensive study of
discriminatory provisions and possible changes was presented to
Congress. Legislation was passed to give divorced spouses of foreign
service officers rights to share in pension benefits.

We created an office on domestic violence within HHS to coordinate the
12 agencies that now have domestic violence relief programs, and to
distribute information on the problem and the services available to
victims.

Despite a stringent budget for FY 1981, the Administration consistently
supported the Women's Educational Equity Act and family planning
activities, as well as other programs that affect women, such as food
stamps, WIC, and social security.

We have been concerned not only about the American woman's
opportunities, but ensuring equality for women around the world. In
November, 1980, I sent to the Senate the Convention on the Elimination
of All Forms of Discrimination Against Women. This United Nations
document is the most comprehensive and detailed international agreement
which seeks the advancement of women.

On women's issues, I have sought the counsel of men and women in and out
of government and from all regions of our country. I established two
panels-- the President's Advisory Committee for Women and the
Interdepartmental Task Force on Women--to advise me on these issues. The
mandate for both groups expired on December 31, but they have left
behind a comprehensive review of the status of women in our society
today. That review provides excellent guidance for the work remaining in
our battle against sex discrimination.

Even though we have made progress, much remains on the agenda for women.
I remain committed to the Equal Rights Amendment and will continue to
work for its passage. It is essential to the goal of bringing America's
women fully into the mainstream of American life that the ERA be
ratified.

The efforts begun for women in employment, business and education should
be continued and strengthened. Money should be available to states to
establish programs to help the victims of domestic violence. Congress
should pass a national health care plan and a welfare reform program,
and these measures should reflect the needs of women.

The talents of women should continue to be used to the fullest inside
and outside of government, and efforts should continue to see that they
have the widest range of opportunities and options.

HANDICAPPED

I hope that my Administration will be remembered in this area for
leading the way toward full civil rights for handicapped Americans. When
I took office, no federal agency had yet issued 504 regulations. As I
leave office, this first step by every major agency and department in
the federal government is almost complete. But it is only a first step.
The years ahead will require steadfast dedication by the President to
protect and promote these precious rights in the classroom, in the
workplace, and in all public facilities so that handicapped individuals
may join the American mainstream and contribute to the fullest their
resources and talents to our economic and social life.

Just as we supported, in an unprecedented way, the civil rights of
disabled persons in schools and in the workplace, other initiatives in
health prevention, such as our immunization and nutrition programs for
young children and new intense efforts to reverse spinal cord injury,
must continue so that the incidence of disability continues to decline.

This year is the U.N.-declared International Year of Disabled Persons.
We are organizing activities to celebrate and promote this important
commemorative year within the government as well as in cooperation with
private sector efforts in this country and around the world. The
International Year will give our country the opportunity to recognize
the talents and capabilities of our fellow citizens with disabilities.
We can also share our rehabilitation and treatment skills with other
countries and learn from them as well. I am proud that the United States
leads the world in mainstreaming and treating disabled people. However,
we have a long way to go before all psychological and physical barriers
to disabled people are torn down and they can be full participants in
our American way of life. We must pledge our full commitment to this
goal during the International Year.

FAMILIES

Because of my concern for American families, my Administration convened
last year the first White House Conference on Families which involved
seven national hearings, over 506 state and local events, three White
House Conferences, and the direct participation of more than 125,000
citizens. The Conference reaffirmed the centrality of families in our
lives and nation but documented problems American families face as well.
We also established the Office of Families within the Department of
Health and Human Services to review government policies and programs
that affect families.

I expect the departments and agencies within the executive branch of the
Federal government as well as Members of Congress, corporate and
business leaders, and State and local officials across the country, to
study closely the recommendations of the White House Conference and
implement them appropriately. As public policy is developed and
implemented by the Federal government, cognizance of the work of the
Conference should be taken as a pragmatic and essential step.

The Conference has done a good job of establishing an agenda for action
to assure that the policies of the Federal government are more sensitive
in their impact on families. I hope the Congress will review and
seriously consider the Conference's recommendations.

OLDER AMERICANS

My Administration has taken great strides toward solving the difficult
problems faced by older Americans. Early in my term we worked
successfully with the Congress to assure adequate revenues for the
Social Security Trust Funds. And last year the strength of the Social
Security System was strengthened by legislation I proposed to permit
borrowing among the separate trust funds. I have also signed into law
legislation prohibiting employers from requiring retirement prior to age
70, and removing mandatory retirement for most Federal employees. In
addition, my Administration worked very closely with Congress to amend
the Older Americans Act in a way that has already improved
administration of its housing, social services, food delivery, and
employment programs.

This year, I will be submitting to Congress a budget which again
demonstrates my commitment to programs for the elderly. It will include,
as my previous budgets have, increased funding for nutrition, senior
centers and home health care, and will focus added resources on the
needs of older Americans.

With the 1981 White House Conference on Aging approaching, I hope the
new Administration will make every effort to assure an effective and
useful conference. This Conference should enable older Americans to
voice their concerns and give us guidance in our continued efforts to
ensure the quality of life so richly deserved by our senior citizens.

REFUGEES

We cannot hope to build a just and humane society at home if we ignore
the humanitarian claims of refugees, their lives at stake, who have
nowhere else to turn. Our country can be proud that hundreds of
thousands of people around the world would risk everything they
have--including their own lives--to come to our country.

This Administration initiated and implemented the first comprehensive
reform of our refugee and immigration policies in over 25 years. We also
established the first refugee coordination office in the Department of
State under the leadership of a special ambassador and coordinator for
refugee affairs and programs. The new legislation and the coordinator's
office will bring common sense and consolidation to our Nation's
previously fragmented, inconsistent, and in many ways, outdated, refugee
and immigration policies.

With the unexpected arrival of thousands of Cubans and Haitians who
sought refuge in our country last year, outside of our regular
immigration and refugee admissions process, our country and its
government were tested in being compassionate and responsive to a major
human emergency. Because we had taken steps to reorganize our refugee
programs, we met that test successfully. I am proud that the American
people responded to this crisis with their traditional good will and
hospitality. Also, we would never have been able to handle this
unprecedented emergency without the efforts of the private resettlement
agencies who have always been there to help refugees in crises.

Immigrants to this country always contribute more toward making our
country stronger than they ever take from the system. I am confident
that the newest arrivals to our country will carry on this tradition.

While we must remain committed to aiding and assisting those who come to
our shores, at the same time we must uphold our immigration and refugee
policies and provide adequate enforcement resources. As a result of our
enforcement policy, the illegal flow from Cuba has been halted and an
orderly process has been initiated to make certain that our refugee and
immigration laws are honored.

This year the Select Commission on Immigration and Refugee Policy will
complete its work and forward its advice and recommendations. I hope
that the recommendations will be carefully considered by the new
Administration and the Congress, for it is clear that we must take
additional action to keep our immigration policy responsive to
emergencies and ever changing times.

VETERANS

This country and its leadership has a continuing and unique obligation
to the men and women who served their nation in the armed forces and
help maintain or restore peace in the world.

My commitment to veterans, as evidenced by my record, is characterized
by a conscientious and consistent emphasis in these general areas:

First, we have worked to honor the Vietnam veteran. During my
Administration, and under the leadership of VA Administrator Max
Cleland, I was proud to lead our country in an overdue acknowledgement
of our Nation's gratitude to the men and women who served their country
during the bitter war in Southeast Asia. Their homecoming was deferred
and seemed doomed to be ignored. Our country has matured in the last
four years and at long last we were able to separate the war from the
warrior and honor these veterans. But with our acknowledgement of their
service goes an understanding that some Vietnam veterans have unique
needs and problems.

My Administration was able to launch a long sought after psychological
readjustment and outreach program, unprecedented in its popularity,
sensitivity and success. This program must be continued. The
Administration has also grappled with the difficult questions posed by
some veterans who served in Southeast Asia and were exposed to
potentially harmful substances, including the herbicide known as Agent
Orange. We have launched scientific inquiries that should answer many
veterans' questions about their health and should provide the basis for
establishing sound compensation policy. We cannot rest until their
concerns are dealt with in a sensitive, expeditious and compassionate
fashion.

Second, we have focused the VA health care system in the needs of the
service-connected disabled veteran. We initiated and are implementing
the first reform of the VA vocational rehabilitation system since its
inception in 1943. Also, my Administration was the first to seek a
cost-of-living increase for the recipients of VA compensation every
year. My last budget also makes such a request. The Administration also
launched the Disabled Veterans Outreach Program in the Department of
Labor which has successfully placed disabled veterans in jobs. Services
provided by the VA health care system will be further targeted to the
special needs of disabled veterans during the coming year.

Third, the VA health care system, the largest in the free world, has
maintained its independence and high quality during my Administration.
We have made the system more efficient and have therefore treated more
veterans than ever before by concentrating on out-patient care and
through modern management improvements. As the median age of the
American veteran population increases, we must concentrate on further
changes within the VA system to keep it independent and to serve as a
model to the nation and to the world as a center for research, treatment
and rehabilitation.

Government Assistance

GENERAL AID TO STATE AND LOCAL GOVERNMENTS

Since taking office, I have been strongly committed to strengthening the
fiscal and economic condition of our Nation's State and local
governments. I have accomplished this goal by encouraging economic
development of local communities, and by supporting the General Revenue
Sharing and other essential grant-in-aid programs.

GRANTS-IN-AID TO STATES AND LOCALITIES

During my Administration, total grants-in-aid to State and local
governments have increased by more than 40 percent, from $68 billion in
Fiscal Year 1977 to $96 billion in Fiscal Year 1981. This significant
increase in aid has allowed States and localities to maintain services
that are essential to their citizens without imposing onerous tax
burdens. It also has allowed us to establish an unprecedented
partnership between the leaders of the Federal government and State and
local government elected officials.

GENERAL REVENUE SHARING

Last year Congress enacted legislation that extends the General Revenue
Sharing program for three more years. This program is the cornerstone of
our efforts to maintain the fiscal health of our Nation's local
government. It will provide $4.6 billion in each of the next three years
to cities, counties and towns. This program is essential to the
continued ability of our local governments to provide essential police,
fire and sanitation services.

This legislation renewing GRS will be the cornerstone of
Federal-State-local government relations in the 1980's. This policy will
emphasize the need for all levels of government to cooperate in order to
meet the needs of the most fiscally strained cities and counties, and
also will emphasize the important role that GRS can play in forging this
partnership. I am grateful that Congress moved quickly to assure that
our Nation's localities can begin the 1980's in sound fiscal condition.

COUNTER-CYCLICAL ASSISTANCE

Last year, I proposed that Congress enact a $1 billion counter-cyclical
fiscal assistance program to protect States and localities from
unexpected changes in the national economy. This program unfortunately
was not enacted by the [full] Congress. I, therefore, have not included
funding for counter-cyclical aid in my Fiscal Year 1982 budget.
Nevertheless, I urge Congress to enact a permanent stand-by
counter-cyclical program, so that States and cities can be protected
during the next economic downturn.

URBAN POLICY

Three years ago, I proposed the Nation's first comprehensive urban
policy. That policy involved more than one hundred improvements in
existing Federal programs, four new Executive Orders and nineteen pieces
of urban-oriented legislation. With Congress' cooperation, sixteen of
these bills have now been signed into law.

ECONOMIC DEVELOPMENT

One of the principal goals of my domestic policy has been to strengthen
the private sector economic base of our Nation's economically troubled
urban and rural areas. With Congress' cooperation, we have substantially
expanded the Federal government's economic development programs and
provided new tax incentives for private investment in urban and rural
communities. These programs have helped many communities to attract new
private sector jobs and investments and to retain the jobs and
investments that already are in place.

When I took office, the Federal government was spending less than $300
million annually on economic development programs, and only $60 million
of those funds in our Nation's urban areas. Since that time, we have
created the Urban Development Action Grant (UDAG) program and
substantially expanded the economic development programs in the Commerce
Department. My FY 1982 budget requests more than $1.5 billion for
economic development grants, loans and interest subsidies and almost
$1.5 billion for loan guarantees. Approximately 60 percent of these
funds will be spent in our Nation's urban areas. In addition, we have
extended the 10 percent investment credit to include rehabilitation of
existing industrial facilities as well as new construction.

I continue to believe that the development of private sector investment
and jobs is the key to revitalizing our Nation's economically depressed
urban and rural areas. To ensure that the necessary economic development
goes forward, the Congress must continue to provide strong support for
the UDAG program and the programs for the Economic Development
Administration. Those programs provide a foundation for the economic
development of our Nation in the 1980's.

COMMUNITY DEVELOPMENT

The partnership among Federal, State and local governments to revitalize
our Nation's communities has been a high priority of my Administration.
When I took office, I proposed a substantial expansion of the Community
Development Block Grant (CDBG) program and the enactment of a new $400
million Urban Development Action Grant (UDAG) program. Both of these
programs have provided essential community and economic development
assistance to our Nation's cities and counties.

Last year, Congress reauthorized both the CDBG and UDAG programs. The
CDBG program was reauthorized for three more years with annual funding
increases of $150 million, and the UDAG program was extended for three
years at the current funding level of $675 million annually. My 1982
budget requests full funding for both of these programs. These actions
should help our Nation's cities and counties to continue the progress
they have made in the last three years.

NEIGHBORHOODS

During my Administration we have taken numerous positive steps to
achieve a full partnership of neighborhood organizations and government
at all levels. We have successfully fought against red lining and
housing discrimination. We created innovative Self Help funding and
technical resource transfer mechanisms. We have created unique methods
of access for neighborhood organizations to have a participating role in
Federal and State government decision-making. Neighborhood based
organizations are the threshold of the American community.

The Federal government will need to develop more innovative and
practical ways for neighborhood based organizations to successfully
participate in the identification and solution of local and neighborhood
concerns. Full partnership will only be achieved with the knowing
participation of leaders of government, business, education and unions.
Neither state nor Federal solutions imposed from on high will suffice.
Neighborhoods are the fabric and soul of this great land. Neighborhoods
define the weave that has been used to create a permanent fabric. The
Federal government must take every opportunity to provide access and
influence to the individuals and organizations affected at the
neighborhood level.

Rural Policy

Since the beginning of my Administration, I have been committed to
improving the effectiveness with which the Federal government deals with
the problems and needs of a rapidly changing rural America. The rapid
growth of some rural areas has placed a heavy strain on communities and
their resources. There are also persistent problems of poverty and
economic stagnation in other parts of rural America. Some rural areas
continue to lose population, as they have for the past several decades.

In December, 1979, I announced the Small Community and Rural Development
Policy. It was the culmination of several years' work and was designed
to address the varying needs of our rural population. In 1980, my
Administration worked with the Congress to pass the Rural Development
Policy Act of 1980, which when fully implemented will allow us to meet
the needs of rural people and their communities more effectively and
more efficiently.

As a result of the policy and the accompanying legislation, we have:

--Created the position of Under Secretary of Agriculture for Small
Community and Rural Development to provide overall leadership.

--Established a White House Working Group to assist in the
implementation of the policy.

--Worked with more than 40 governors to form State rural development
councils to work in partnership with the White House Working Group, and
the Federal agencies, to better deliver State and Federal programs to
rural areas.

--Directed the White House Working Group to annually review existing and
proposed policies, programs, and budget levels to determine their
adequacy in meeting rural needs and the fulfilling of the policy's
objectives and principles.

This effort on the part of my Administration and the Congress has
resulted in a landmark policy. For the first time, rural affairs has
received the prominence it has always deserved. It is a policy that can
truly help alleviate the diverse and differing problems rural America
will face in the 1980's.

With the help and dedication of a great many people around the country
who are concerned with rural affairs, we have constructed a mechanism
for dealing effectively with rural problems. There is now a great
opportunity to successfully combine Federal efforts with the efforts of
rural community leaders and residents. It is my hope this spirit of
cooperation and record of accomplishment will be continued in the coming
years.

CONSUMERS

In September, 1979, I signed an Executive Order designed to strengthen
and coordinate Federal consumer programs and to establish procedures to
improve and facilitate consumer participation in government
decision-making. Forty Federal agencies have adopted programs to comply
with the requirements of the Order. These programs will improve
complaint handling, provide better information to consumers, enhance
opportunities for public participation in government proceedings, and
assure that the consumer point of view is considered in all programs,
policies, and regulations.

While substantial progress has been made in assuring a consumer presence
in Federal agencies, work must continue to meet fully the goals of the
Executive Order. Close monitoring of agency compliance with the
requirements of the Order is necessary. Continued evaluation to assure
that the programs are effective and making maximum use of available
resources is also essential. As a complement to these initiatives,
efforts to provide financial assistance in regulatory proceedings to
citizen groups, small businesses, and others whose participation is
limited by their economic circumstances must continue to be pursued.

It is essential that consumer representatives in government pay
particular attention to the needs and interests of low-income consumers
and minorities. The Office of Consumer Affairs' publication, "People
Power: What Communities Are Doing to Counter Inflation," catalogues some
of the ways that government and the private sector can assist the less
powerful in our society to help themselves. New ways should be found to
help foster this new people's movement which is founded on the principle
of self-reliance.

Science and Technology

Science and technology contribute immeasurably to the lives of all
Americans. Our high standard of living is largely the product of the
technology that surrounds us in the home or factory. Our good health is
due in large part to our ever increasing scientific understanding. Our
national security is assured by the application pate science and
technology will bring.

The Federal government has a special role to play in science and
technology. Although the fruits of scientific achievements surround us,
it is often difficult to predict the benefits that will arise from a
given scientific venture. And these benefits, even if predictable, do
not usually lead to ownership rights. Accordingly, the Government has a
special obligation to support science as an investment in our future.

My Administration has sought to reverse a decade-long decline in
funding. Despite the need for fiscal restraint, real support of basic
research has grown nearly 11% during my term in office. And, my
Administration has sought to increase the support of long-term research
in the variety of mission agencies. In this way, we can harness the
American genius for innovation to meet the economic, energy, health, and
security challenges that confront our nation.

--International Relations and National Security. Science and technology
are becoming increasingly important elements of our national security
and foreign policies. This is especially so in the current age of
sophisticated defense systems and of growing dependence among all
countries on modern technology for all aspects of their economic
strength. For these reasons, scientific and technological considerations
have been integral elements of the Administration's decision-making on
such national security and foreign policy issues as the modernization of
our strategic weaponry, arms control, technology transfer, the growing
bilateral relationship with China, and our relations with the developing
world.

Four themes have shaped U.S. policy in international scientific and
technological cooperation: pursuit of new international initiatives to
advance our own research and development objectives; development and
strengthening of scientific exchange to bridge politically ideological,
and cultural divisions between this country and other countries;
formulation of programs and institutional relations to help developing
countries use science and technology beneficially; and cooperation with
other nations to manage technologies with local impact. At my direction,
my Science and Technology Adviser has actively pursued international
programs in support of these four themes. We have given special
attention to scientific and technical relations with China, to new forms
of scientific and technical cooperation with Japan, to cooperation with
Mexico, other Latin American and Caribbean countries and several states
in Black America, and to the proposed Institute for Scientific and
Technological Cooperation.

In particular our cooperation with developing countries reflects the
importance that each of them has placed on the relationship between
economic growth and scientific and technological capability. It also
reflects their view that the great strength of the U.S. in science and
technology makes close relations with the U.S. technical community an
especially productive means of enhancing this capability. Scientific and
technological assistance is a key linkage between the U.S. and the
developing world, a linkage that has been under-utilized in the past and
one which we must continue to work to strengthen.

--Space Policy. The Administration has established a framework for a
strong and evolving space program for the 1980's.

The Administration's space policy reaffirmed the separation of military
space systems and the open civil space program, and at the same time,
provided new guidance on technology transfer between the civil and
military programs. The civil space program centers on three basic
tenets: First, our space policy will reflect a balanced strategy of
applications, science, and technology development. Second, activities
will be pursued when they can be uniquely or more efficiently
accomplished in space. Third, a premature commitment to a high
challenge, space-engineering initiative of the complexity of Apollo is
inappropriate. As the Shuttle development phases down, however, there
will be added flexibility to consider new space applications, space
science and new space exploration activities.

--Technology Development. The Shuttle dominates our technology
development effort and correctly so. It represents one of the most
sophisticated technological challenges ever undertaken, and as a result,
has encountered technical problems. Nonetheless, the first manned
orbital flight is now scheduled for March, 1981. I have been pleased to
support strongly the necessary funds for the Shuttle throughout my
Administration.

--Space Applications. Since 1972, the U.S. has conducted experimental
civil remote sensing through Landsat satellites, thereby realizing many
successful applications. Recognizing this fact, I directed the
implementation of an operational civil land satellite remote sensing
system, with the operational management responsibility in Commerce's
National Oceanic and Atmospheric Administration. In addition, because
ocean observations from space can meet common civil and military data
requirements, a National Oceanic Satellite System has been proposed as a
major FY 1981 new start.

--Space Science Exploration. The goals of this Administration's policy
in space science have been to: (1) continue a vigorous program of
planetary exploration to understand the origin and evolution of the
solar system; (2) utilize the space telescope and free-flying satellites
to usher in a new era of astronomy; (3) develop a better understanding
of the sun and its interaction with the terrestrial environment; and (4)
utilize the Shuttle and Spacelab to conduct basic research that
complements earth-based life science investigations.

DISTRICT OF COLUMBIA

Washington, D.C., is home to both the Federal Government and to more
than half a million American citizens. I have worked to improve the
relationship between the Federal establishment and the Government of the
District of Columbia in order to further the goals and spirit of home
rule. The City controls more of its own destiny than was the case four
years ago. Yet, despite the close cooperation between my Administration
and that of Mayor Barry, we have not yet seen the necessary number of
states ratify the Constitutional Amendment granting full voting
representation in the Congress to the citizens of this city. It is my
hope that this inequity will be rectified. The country and the people
who inhabit Washington deserve no less.

THE ARTS

The arts are a precious national resource.

Federal support for the arts has been enhanced during my Administration
by expanding government funding and services to arts institutions,
individual artists, scholars, and teachers through the National
Endowment for the Arts. We have broadened its scope and reach to a more
diverse population. We have also reactivated the Federal Council on the
Arts and Humanities.

It is my hope that during the coming years the new Administration and
the Congress will:

--Continue support of institutions promoting development and
understanding of the arts;

--Encourage business participants in a comprehensive effort to achieve a
truly mixed economy of support for the arts;

--Explore a variety of mechanisms to nurture the creative talent of our
citizens and build audiences for their work;

--Support strong, active National Endowments for the Arts;

--Seek greater recognition for the rich cultural tradition of the
nation's minorities;

--Provide grants for the arts in low-income neighborhoods.

THE HUMANITIES

In recently reauthorizing Federal appropriations for the National
Endowment for the Humanities, the Congress has once again reaffirmed
that "the encouragement and support of national progress and scholarship
in the humanities . . . while primarily a matter for private and local
initiative, is also an appropriate matter of concern to the Federal
Government" and that "a high civilization must not limit its efforts to
science and technology alone but must give full value and support to the
other great branches of man's scholarly and cultural activity in order
to achieve a better understanding of the past, a better analysis of the
present, and a better view of the future."

I believe we are in agreement that the humanities illuminate the values
underlying important personal, social, and national questions raised in
our society by its multiple links to and increasing dependence on
technology, and by the diverse heritage of our many regions and ethnic
groups. The humanities cast light on the broad issue of the role in a
society of men and women of imagination and energy--those individuals
who through their own example define "the spirit of the age," and in so
doing move nations. Our Government's support for the humanities, within
the framework laid down by the Congress, is a recognition of their
essential nourishment of the life of the mind and vital enrichment of
our national life.

I will be proposing an increase in funding this year sufficient to
enable the Endowment to maintain the same level of support offered our
citizens in Fiscal Year 1981.

In the allocation of this funding, special emphasis will be given to:

--Humanities education in the nation's schools, in response to the great
needs that have arisen in this area;

--Scholarly research designed to increase our understanding of the
cultures, traditions, and historical forces at work in other nations and
in our own;

--Drawing attention to the physical disintegration of the raw material
of our cultural heritage--books, manuscripts, periodicals, and other
documents--and to the development of techniques to prevent the
destruction and to preserve those materials; and

--The dissemination of quality programming in the humanities to
increasingly large American audiences through the use of radio and
television.

The dominant effort in the Endowment's expenditures will be a commitment
to strengthen and promulgate scholarly excellence and achievement in
work in the humanities in our schools, colleges, universities,
libraries, museums and other cultural institutions, as well as in the
work of individual scholars or collaborative groups engaged in advanced
research in the humanities.

In making its grants the Endowment will increase its emphasis on
techniques which stimulate support for the humanities from non-Federal
sources, in order to reinforce our tradition of private philanthropy in
this field, and to insure and expand the financial viability of our
cultural institutions and life.

INSULAR AREAS

I have been firmly committed to self-determination for Puerto Rico, the
Virgin Islands, Guam, American Samoa and the Northern Mariana Islands,
and have vigorously supported the realization of whatever political
status aspirations are democratically chosen by their peoples. This
principle was the keystone of the comprehensive territorial policy I
sent the Congress last year. I am pleased that most of the legislative
elements of that policy were endorsed by the 96th Congress.

The unique cultures, fragile economies, and locations of our Caribbean
and Pacific Islands are distinct assets to the United States which
require the sensitive application of policy. The United States
Government should pursue initiatives begun by my Administration and the
Congress to stimulate insular economic development; enhance treatment
under Federal programs eliminating current inequities; provide vitally
needed special assistance and coordinate and rationalize policies. These
measures will result in greater self-sufficiency and balanced growth. In
particular, I hope that the new Congress will support funding for fiscal
management, comprehensive planning and other technical assistance for
the territories, as well as create the commission I have proposed to
review the applicability of all Federal laws to the insular areas and
make recommendations for appropriate modification.

IV. REMOVING GOVERNMENTAL WASTE AND INEFFICIENCY

One of my major commitments has been to restore public faith in our
Federal government by cutting out waste and inefficiency. In the past
four years, we have made dramatic advances toward this goal, many of
them previously considered impossible to achieve. Where government rules
and operations were unnecessary, they have been eliminated, as with
airline, rail, trucking and financial deregulation. Where government
functions are needed, they have been streamlined, through such landmark
measures as the Civil Service Reform Act of 1978. I hope that the new
administration and the Congress will keep up the momentum we have
established for effective and responsible change in this area of crucial
public concern.

CIVIL SERVICE REFORM

In March 1978, I submitted the Civil Service Reform Act to Congress. I
called it the centerpiece of my efforts to reform and reorganize the
government. With bipartisan support from Congress, the bill passed, and
I am pleased to say that implementation is running well ahead of the
statutory schedule. Throughout the service, we are putting into place
the means to assure that reward and retention are based on performance
and not simply on length of time on the job. In the first real test of
the Reform Act, 98 percent of the eligible top-level managers joined the
Senior Executive Service, choosing to relinquish job protections for the
challenge and potential reward of this new corps of top executives.
Though the Act does not require several of its key elements to be in
operation for another year, some Federal agencies already have
established merit pay systems for GS-13-15 managers, and most agencies
are well on their way to establishing new performance standards for all
their employees. All have paid out, or are now in the process of paying
out, performance bonuses earned by outstanding members of the Senior
Executive Service. Dismissals have increased by 10 percent, and
dismissals specifically for inadequate job performance have risen 1500
percent, since the Act was adopted. Finally, we have established a fully
independent Merit Systems Protection Board and Special Counsel to
protect the rights of whistle-blowers and other Federal employees faced
with threats to their rights.

In 1981, civil service reform faces critical challenges, all agencies
must have fully functioning performance appraisal systems for all
employees, and merit pay systems for compensating the government's
130,000 GS-13-15 managers. Performance bonuses for members of the Senior
Executive Service will surely receive scrutiny. If this attention is
balanced and constructive, it can only enhance the chances for ultimate
success of our bipartisan commitment to the revolutionary and crucial
"pay for performance" concept.

REGULATORY REFORM

During the past four years we have made tremendous progress in
regulatory reform. We have discarded old economic regulations that
prevented competition and raised consumer costs, and we have imposed
strong management principles on the regulatory programs the country
needs, cutting paperwork and other wasteful burdens. The challenge for
the future is to continue the progress in both areas without crippling
vital health and safety programs.

Our economic deregulation program has achieved major successes in five
areas:

Airlines: The Airline Deregulation Act is generating healthy
competition, saving billions in fares, and making the airlines more
efficient. The Act provides that in 1985 the CAB itself will go out of
existence.

Trucking: The trucking deregulation bill opens the industry to
competition and allows truckers wide latitude on the routes they drive
and the goods they haul. The bill also phases out most of the old law's
immunity for setting rates. The Congressional Budget Office estimates
these reforms will save as much as $8 billion per year and cut as much
as half a percentage point from the inflation rate.

Railroads: Overregulation has stifled railroad management initiative,
service, and competitive pricing. The new legislation gives the
railroads the freedom they need to rebuild a strong, efficient railroad
industry.

Financial Institutions: With the help of the Congress, over the past
four years we have achieved two major pieces of financial reform
legislation, legislation which has provided the basis for the most
far-reaching changes in the financial services industry since the
1930's. The International Banking Act of 1978 was designed to reduce the
advantages that foreign banks operating in the United States possessed
in comparison to domestic banks. The Depository Institutions
Deregulation and Monetary Control Act, adopted last March, provides for
the phased elimination of a variety of anti-competitive barriers to
financial institutions and freedom to offer services to and attract the
savings of consumers, especially small savers.

Recently, I submitted to the Congress my Administration's
recommendations for the phased liberalization of restrictions on
geographic expansion by commercial banks. Last year the Administration
and financial regulatory agencies proposed legislation to permit the
interstate acquisition of failing depository institutions. In view of
the difficult outlook for some depository institutions I strongly urge
the Congress to take prompt favorable action on the failing bank
legislation.

Telecommunications: While Congress did not pass legislation in this
area, the Federal Communications Commission has taken dramatic action to
open all aspects of communications to competition and to eliminate
regulations in the areas where competition made them obsolete. The
public is benefitting from an explosion of competition and new services.

While these initiatives represent dramatic progress in economic
deregulation, continued work is needed. I urge Congress to act on
communications legislation and to consider other proposed deregulation
measures, such as legislation on the bus industry. In addition, the
regulatory commissions must maintain their commitment to competition as
the best regulator of all.

The other part of my reform program covers the regulations that are
needed to protect the health, safety, and welfare of our citizens. For
these regulations, my Administration has created a management program to
cut costs without sacrificing goals. Under my Executive Order 12044, we
required agencies to analyze the costs of their major new rules and
consider alternative approaches, such as performance standards and
voluntary codes, that may make rules less costly and more flexible. We
created the Regulatory Analysis Review Group in the White House to
analyze the most costly proposed new rules and find ways to improve
them. The Regulatory Council was established to provide the first
Government-wide listing of upcoming rules and eliminate overlapping and
conflicting regulations. Agencies have launched "sunset" programs to
weed out outmoded old regulations. We have acted to encourage public
participation in regulatory decision-making.

These steps have already saved billions of dollars in regulatory costs
and slashed thousands of outmoded regulations. We are moving steadily
toward a regulatory system that provides needed protections fairly,
predictably, and at minimum cost.

I urge Congress to continue on this steady path and resist the
simplistic solutions that have been proposed as alternatives. Proposals
like legislative veto and increased judicial review will add another
layer to the regulatory process, making it more cumbersome and
inefficient. The right approach to reform is to improve the individual
statutes, where they need change, and to ensure that the regulatory
agencies implement those statutes sensibly.

PAPERWORK REDUCTION

The Federal Government imposes a huge paperwork burden on business,
local government, and the private sector. Many of these forms are needed
for vital government functions, but others are duplicative, overly
complex or obsolete.

During my Administration we cut the paperwork burden by 15 percent, and
we created procedures to continue this progress. The new Paperwork
Reduction Act centralizes, in OMB, oversight of all agencies'
information requirements and strengthens OMB's authority to eliminate
needless forms. The "paperwork budget" process, which I established by
executive order, applies the discipline of the budget process to the
hours of reporting time imposed on the public, forcing agencies to
scrutinize all their forms each year. With effective implementation,
these steps should allow further, substantial paperwork cuts in the
years ahead.

TIGHTENING STANDARDS FOR GOVERNMENTAL EFFICIENCY AND INTEGRITY

To develop a foundation to carry out energy policy, we consolidated
scattered energy programs and launched the Synthetic Fuels Corporation;
to give education the priority it deserves and at the same time reduce
HHS to more manageable size, I gave education a seat at the Cabinet
table, to create a stronger system for attacking waste and fraud, I
reorganized audit and investigative functions by putting an Inspector
General in major agencies. Since I took office, we have submitted 14
reorganization initiatives and had them all approved by Congress. We
have saved hundreds of millions of dollars through the adoption of
businesslike cash management principles and set strict standards for
personal financial disclosure and conflict of interest avoidance by high
Federal officials.

To streamline the structure of the government, we have secured approval
of 14 reorganization initiatives, improving the efficiency of the most
important sectors of the government, including energy, education, and
civil rights enforcement. We have eliminated more than 300 advisory
committees as well as other agencies, boards and commissions which were
obsolete or ineffective. Independent Inspectors General have been
appointed in major agencies to attack fraud and waste. More than a
billion dollars of questionable transactions have been identified
through their audit activities.

The adoption of business-like cash management and debt collection
initiatives will save over $1 billion, by streamlining the processing of
receipts, by controlling disbursements more carefully, and by reducing
idle cash balances. Finally this Administration has set strict standards
for personal financial disclosure and conflict of interest avoidance by
high Federal officials, to elevate the level of public trust in the
government.

V. PROTECTING BASIC RIGHTS AND LIBERTIES

I am extremely proud of the advances we have made in ensuring equality
and protecting the basic freedoms of all Americans.

--The Equal Employment Opportunity Commission (EEOC) and the Office of
Federal Contract Compliance (OFCCP) have been reorganized and
strengthened and a permanent civil rights unit has been established in
OMB.

--To avoid fragmented, inconsistent and duplicative enforcement of civil
rights laws, three agencies have been given coordinative and
standard-setting responsibilities in discrete areas: EEOC for all
employment-related activities, HUD for all those relating to housing,
and the Department of Justice for all other areas.

--With the enactment of the Right to Financial Privacy Act and a bill
limiting police search of newsrooms, we have begun to establish a sound,
comprehensive, privacy program.

Ratification of the Equal Rights Amendment must be aggressively pursued.
Only one year remains in which to obtain ratification by three
additional states.

The Congress must give early attention to a number of important bills
which remain. These bills would:

--strengthen the laws against discrimination in housing. Until it is
enacted, the 1968 Civil Rights Act's promise of equal access to housing
will remain unfulfilled;

--establish a charter for the FBI and the intelligence agencies. The
failure to define in law the duties and responsibilities of these
agencies has made possible some of the abuses which have occurred in
recent years;

--establish privacy safeguards for medical research, bank, insurance,
and credit records; and provide special protection for election fund
transfer systems.

EQUAL RIGHTS AMENDMENT

I remain committed as strongly as possible to the ratification of the
Equal Rights Amendment.

As a result of our efforts in 1978, the Equal Rights Amendment's
deadline for ratification was extended for three years. We have now one
year and three States left. We cannot afford any delay in marshalling
our resources and efforts to obtain the ratification of those three
additional States.

Although the Congress has no official role in the ratification process
at this point, you do have the ability to affect public opinion and the
support of State Legislators for the Amendment. I urge Members from
States which have not yet ratified the Equal Rights Amendment to use
their influence to secure ratification. I will continue my own efforts
to help ensure ratification of the Equal Rights Amendment.

MARTIN LUTHER KING, JR.

Dr. Martin Luther King, Jr. led this Nation's effort to provide all its
citizens with civil rights and equal opportunities. His commitment to
human rights, peace and non-violence stands as a monument to his
humanity and courage. As one of our Nation's most outstanding leaders,
it is appropriate that his birthday be commemorated as a national
holiday. I hope the Congress will enact legislation this year that will
achieve this goal.

FAIR HOUSING

The Fair Housing Act Amendments of 1980 passed the House of
Representatives by an overwhelming bipartisan majority only to die in
the Senate at the close of the 96th Congress. The leaders of both
parties have pledged to make the enactment of fair housing legislation a
top priority of the incoming Congress. The need is pressing and a
strengthened federal enforcement effort must be the primary method of
resolution.

CRIMINAL CODE

The Federal criminal laws are often archaic, frequently contradictory
and imprecise, and clearly in need of revision and codification. The new
Administration should continue the work which has been begun to develop
a Federal criminal code which simplifies and clarifies our criminal
laws, while maintaining our basic civil liberties and protections.

PRIVACY

As our public and private institutions collect more and more information
and as communications and computer technologies advance, we must act to
protect the personal privacy of our citizens.

In the past four years we acted on the report of the Privacy Commission
and established a national privacy policy. We worked with Congress to
pass legislation restricting wiretaps and law enforcement access to bank
records and to reporters' files. We reduced the number of personal files
held by the government and restricted the transfer of personal
information among Federal agencies. We also worked with the Organization
for Economic Cooperation and Development to establish international
guidelines to protect the privacy of personal information that is
transferred across borders.

VI. PROTECTING AND DEVELOPING OUR NATURAL RESOURCES

Two of our Nation's most precious natural resources are our environment
and our vast agricultural capacity. From the beginning of my
Administration, I have worked with the Congress to enhance and protect,
as well as develop our natural resources. In the environmental areas, I
have been especially concerned about the importance of balancing the
need for resource development with preserving a clean environment, and
have taken numerous actions to foster this goal. In the agricultural
area, I have taken the steps needed to improve farm incomes and to
increase our agricultural production to record levels. That progress
must be continued in the 1980's.

ENVIRONMENT

Preserving the quality of our environment has been among the most
important objectives of my Administration and of the Congress. As a
result of these shared commitments and the dedicated efforts of many
members of the Congress and my Administration, we have achieved several
historic accomplishments.

PROTECTION OF ALASKA LANDS

Passage of the Alaska National Interest Lands Conservation Act was one
of the most important conservation actions of this century. At stake was
the fate of millions of acres of beautiful land, outstanding and unique
wildlife populations, native cultures, and the opportunity to ensure
that future generations of Americans would be able to enjoy the benefits
of these nationally significant resources. As a result of the
leadership, commitment, and persistence of my Administration and the
Congressional leadership, the Alaska Lands Bill was signed into law last
December.

The Act adds 97 million acres of new parks and refuges, more than
doubling the size of our National Park and National Wildlife Refuge
Systems. The bill triples the size of our national wilderness system,
increasing its size by 56 million acres. And by adding 25 free-flowing
river segments to the Wild and Scenic River System, the bill almost
doubles the river mileage in that system. The Alaska Lands Act reaffirms
our commitment to the environment and strikes a balance between
protecting areas of great beauty and allowing development of Alaska's
oil, gas, mineral, and timber resources.

PROTECTION OF NATURAL RESOURCES

In addition to the Alaska Lands Act, over the past four years we have
been able to expand significantly the national wilderness and parks
systems. In 1978, the Congress passed the historical Omnibus Parks Act,
which made 12 additions to the National Park System. The Act also
established the first two national trails since the National Trails
System Act was passed in 1968. Then, in 1980, as a result of my 1979
Environmental Message, the Federal land management agencies have
established almost 300 new National Recreational Trails. With the
completion of the RARE II process, which eliminated the uncertainty
surrounding the status of millions of acres of land, we called for over
15 million acres of new wilderness in the nation's National Forest, in
1980 the Congress established about 4.5 million acres of wilderness in
the lower 48 states. In addition, the Administration recommended
legislation to protect Lake Tahoe, and through an Executive Order has
already established a mechanism to help ensure the Lake's protection.
Finally, in 1980 the Administration established the Channel Islands
Marine Sanctuary.

Administration actions over the past four years stressed the importance
of providing Federal support only for water resource projects that are
economically and environmentally sound. This policy should have a major
and lasting influence on the federal government's role in water resource
development and management. The Administration's actions to recommend to
the Congress only economically and environmentally sound water resource
projects for funding resulted not only in our opposing uneconomic
projects but also, in 1979, in the first Administration proposal of new
project starts in 4 years.

One of the most significant water policy actions of the past four years
was the Administration's June 6, 1978 Water Policy Reform Message to the
Congress. This Message established a new national water resources policy
with the following objectives:

--to give priority emphasis to water conservation;

--to consider environmental requirements and values more fully and along
with economic factors in the planning and management of water projects
and programs;

--to enhance cooperation between state and federal agencies in water
resources planning and management.

In addition, the Executive Office of the President established 11 policy
decision criteria to evaluate the proposed federal water projects, the
Water Resources Council developed and adopted a new set of Principles
and Standards for water projects which is binding on all federal
construction agencies, and improved regulations were developed to
implement the National Historic Preservation Act and the Fish and
Wildlife Coordination Act. As a result, water resource projects must be
determined to be economically sound before the Administration will
recommend authorization or appropriation. Over the years ahead, this
policy will help to reduce wasteful federal spending by targeting
federal funds to the highest priority water resource projects.

In the pursuit of this policy, however, we cannot lose projects. In the
part that sound water resource projects play in providing irrigation,
power, and flood control. We must also recognize the special needs of
particular regions of the country in evaluating the need for additional
projects.

ADDRESSING GLOBAL RESOURCE AND ENVIRONMENTAL PROBLEMS

The Global 2000 Report to the President, prepared in response to my 1977
Environment Message, is the first of its kind. Never before has our
government, or any government, taken such a comprehensive, long-range
look at the interrelated global issues of resources, population, and
environment.

The Report's conclusions are important. They point to a rapid increase
in population and human needs through the year 2000 while at the same
time a decline in the earth's capacity to meet those needs, unless
nations of the world act decisively to alter current trends.

The United States has contributed actively to a series of U.N.
conferences on the environment, population, and resources, and is
preparing for the 1981 Conference on New and Renewable Sources of
Energy. Following my 1977 Environmental Message, the Administration
development assistance programs have added emphasis to natural resource
management and environmental protection. My 1979 Environmental Message
called attention to the alarming loss of world forests, particularly in
the tropics. An interagency task force on tropical forests has developed
a U.S. government program to encourage conservation and wise management
of tropical forests. The Administration is encouraging action by other
nations and world organizations to the same purpose. The United States
is a world leader in wildlife conservation and the assessment of
environmental effects of government actions. The January 5, 1979,
Executive Order directing U.S. government agencies to consider the
effects of their major actions abroad, is another example of this
leadership.

COMMITMENT TO CONTROL OF POLLUTION AND HAZARDOUS CHEMICALS

Over the past four years, there has been steady progress towards cleaner
air and water, sustained by the commitment of Congress and the
Administration to these important national objectives. In addition, the
Administration has developed several new pollution compliance approaches
such as alternative and innovative waste water treatment projects, the
"bubble" concept, the "offset" policy, and permit consolidation, all of
which are designed to reduce regulatory burdens on the private sector.

One of the most pressing problems to come to light in the past four
years has been improper hazardous waste disposal. The Administration has
moved on three fronts. First, we proposed the Oil Hazardous Substances
and Hazardous Waste Response, Liability and Compensation Act (the
Superfund bill) to provide comprehensive authority and $1.6 billion in
funds to clean up abandoned hazardous waste disposal sites. In November
1980 the Congress passed a Superfund bill which I signed into law.

Second, the administration established a hazardous waste enforcement
strike force to ensure that when available, responsible parties are
required to clean up sites posing dangers to public health and to the
environment. To date, 50 lawsuits have been brought by the strike force.

Third, regulations implementing subtitle C of the Resource Conservation
and Recovery Act were issued. The regulations establish comprehensive
controls for hazardous waste and, together with vigorous enforcement,
will help to ensure that Love Canal will not be repeated.

THE FUTURE

For the future, we cannot, and we must not, forget that we are charged
with the stewardship of an irreplaceable environment and natural
heritage. Our children, and our children's children, are dependent upon
our maintaining our commitment to preserving and enhancing the quality
of our environment. It is my hope that when our descendants look back on
the 1980's they will be able to affirm:

--that we kept our commitment to the restoration of environmental
quality;

--that we protected the public health from the continuing dangers of
toxic chemicals, from pollution, from hazardous and radioactive waste,
and that we made our communities safer, healthier and better places to
live;

--that we preserved America's wilderness areas and particularly its last
great frontier, Alaska, for the benefit of all Americans in perpetuity;

--that we put this nation on a path to a sustainable energy future, one
based increasingly on renewable resources and on energy conservation;

--that we moved to protect America's countryside and coastland from
mismanagement and irresponsibility;

--that we redirected the management of the nation's water resources
toward water conservation, sound development and environmental
protection;

--that we faced squarely such worldwide problems as the destruction of
forests, acid rain, carbon dioxide build-up and nuclear proliferation;
and

--that we protected the habitat and the existence of our own species on
this earth.

AGRICULTURE THE FARM ECONOMY

The farm economy is sound and its future is bright. Agriculture remains
a major bulwark of the nation's economy and an even more important
factor in the world food system. The demand for America's agricultural
abundance, here and abroad, continues to grow. In the near-term, the
strength of this demand is expected to press hard against supplies,
resulting in continued price strength.

The health and vitality of current-day agriculture represents a
significant departure from the situation that existed when I came to
office four years ago. In January 1977, the farm economy was in serious
trouble. Farm prices and farm income were falling rapidly. Grain prices
were at their lowest levels in years and steadily falling. Livestock
producers, in their fourth straight year of record losses, were
liquidating breeding herds at an unparalleled rate. Dairy farmers were
losing money on every hundredweight of milk they produced. Sugar prices
were in a nosedive.

Through a combination of improvements in old, established programs and
the adoption of new approaches where innovation and change were needed,
my Administration turned this situation around. Commodity prices have
steadily risen. Farm income turned upward. U.S. farm exports set new
records each year, increasing over 80 percent for the four year period.
Livestock producers began rebuilding their herds. Dairy farmers began to
earn a profit again.

RECENT POLICY INITIATIVES

Several major agricultural policy initiatives have been undertaken over
the past year. Some are the culmination of policy proposals made earlier
in this Administration; others are measures taken to help farmers offset
the impact of rapid inflation in production costs. In combination, they
represent a significant strengthening of our nation's food and
agricultural policy. These initiatives include:

FOOD SECURITY RESERVE

The Congress authorized formation of a 4 million ton food grain reserve
for use in international food assistance. This reserve makes it possible
for the United States to stand behind its food aid commitment to food
deficit nations, even during periods of short supplies and high prices.
This corrects a serious fault in our past food assistance policy.

COMPREHENSIVE CROP INSURANCE

The Congress also authorized a significant new crop insurance program
during 1980. This measure provides farmers with an important new program
tool for sharing the economic risks that are inherent to agriculture.
When fully operational, it will replace a hodgepodge of disaster
programs that suffered from numerous shortcomings.

SPECIAL LOAN RATES

Another legislative measure passed late in the 2nd session of the 96th
Congress authorizes the Secretary of Agriculture to provide higher loan
rates to farmers who enter their grain in the farmer-owned grain
reserve. This additional incentive to participate will further
strengthen the reserve.

INCREASED LOAN PRICES

In July 1980, I administratively raised loan prices for wheat,
feedgrains, and soybeans to help offset the effects of a serious
cost-price squeeze. At the same time, the release and call prices for
the grain reserve were adjusted upward.

HIGHER TARGET PRICES

The Agricultural Adjustment Act of 1980 raised the target prices for
1980-crop wheat and feed grain crops. This change corrected for
shortcomings in the adjustment formula contained in the Food and
Agriculture Act of 1977.

FUTURE AGENDA

The food and agricultural policies adopted by this Administration over
the past four years, including those described above, will provide a
firm foundation for future governmental actions in this field.
Expiration of the Food and Agriculture Act of 1977 later this year will
require early attention by the Congress. With relatively minor changes,
most of the authorities contained in the 1977 Act should be extended in
their present form. The farmer-owned grain reserve has proven to be a
particularly effective means of stabilizing grain markets and should be
preserved in essentially its present form.

Beyond this, it will be important for the Congress to keep a close eye
on price-cost developments in the farm sector. As noted above, some of
the actions I took last year were for the purpose of providing relief
from the cost-price squeeze facing farmers. Should these pressures
continue, further actions might be required.

My Administration has devoted particular attention to the issues of
world hunger, agricultural land use, and the future structure of
American agriculture. I encourage the Congress and the next
Administration to review the results of these landmark enquiries and,
where deemed appropriate, to act on their recommendations.

Following a careful review of the situation, I recently extended the
suspension of grain sales to the Soviet Union. I am satisfied that this
action has served its purpose effectively and fairly. However, as long
as this suspension must remain in effect, it will be important for the
next Administration and the Congress to take whatever actions are
necessary to ensure that the burden does not fall unfairly on our
Nation's farmers. This has been a key feature of my Administration's
policy, and it should be maintained.

VII. FOREIGN POLICY

From the time I assumed office four years ago this month, I have
stressed the need for this country to assert a leading role in a world
undergoing the most extensive and intensive change in human history.

My policies have been directed in particular at three areas of change:

--the steady growth and increased projection abroad of Soviet military
power, power that has grown faster than our own over the past two
decades.

--the overwhelming dependence of Western nations, which now increasingly
includes the United States, on vital oil supplies from the Middle East.

--the pressures of change in many nations of the developing world, in
Iran and uncertainty about the future stability of many developing
countries.

As a result of those fundamental facts, we face some of the most serious
challenges in the history of this nation. The Soviet invasion of
Afghanistan is a threat to global peace, to East-West relations, and to
regional stable flow of oil. As the unprecedented relations, an and
overwhelming vote in the General Assembly demonstrated, countries across
the world, and particularly the nonaligned, regard the Soviet invasion
as a threat to their independence and security. Turmoil within the
region adjacent to the Persian Gulf poses risks for the security and
prosperity of every oil importing nation and thus for the entire global
economy. The continuing holding of American hostages in Iran is both an
affront to civilized people everywhere, and a serious impediment to
meeting the self-evident threat to widely-shared common interests,
including those of Iran.

But as we focus our most urgent efforts on pressing problems, we will
continue to pursue the benefits that only change can bring. For it
always has been the essence of America that we want to move on, we
understand that prosperity, progress and most of all peace cannot be had
by standing still. A world of nations striving to preserve their
independence, and of peoples aspiring for economic development and
political freedom, is not a world hostile to the ideals and interests of
the United States. We face powerful adversaries, but we have strong
friends and dependable allies. We have common interests with the vast
majority of the world's nations and peoples.

There have been encouraging developments in recent years, as well as
matters requiring continued vigilance and concern:

--Our alliances with the world's most advanced and democratic states
from Western Europe through Japan are stronger than ever.

--We have helped to bring about a dramatic improvement in relations
between Egypt and Israel and an historic step towards a comprehensive
Arab-Israeli settlement.

--Our relations with China are growing closer, providing a major new
dimension in our policy in Asia and the world.

--Across southern Africa from Rhodesia to Namibia we are helping with
the peaceful transition to majority rule in a context of respect for
minority as well as majority rights.

--We have worked domestically and with our allies to respond to an
uncertain energy situation by conservation and diversification of energy
supplies based on internationally agreed targets.

--We have unambiguously demonstrated our commitment to defend Western
interests in Southwest Asia, and we have significantly increased our
ability to do so.

--And over the past four years the U.S. has developed an energy program
which is comprehensive and ambitious. New institutions have been
established such as the Synthetic Fuels Corporation and Solar Bank.
Price decontrol for oil and gas is proceeding. American consumers have
risen to the challenge, and we have experienced real improvements in
consumption patterns.

The central challenge for us today is to our steadfastedness of purpose.
We are no longer tempted by isolationism. But we must also learn to deal
effectively with the contradictions of the world, the need to cooperate
with potential adversaries without euphoria, without undermining our
determination to compete with such adversaries and if necessary confront
the threats they may pose to our security.

We face a broad range of threats and opportunities. We have and should
continue to pursue a broad range of defense, diplomatic and economic
capabilities and objectives.

I see six basic goals for America in the world over the 1980's:

--First, we will continue, as we have over the past four years, to build
America's military strength and that of our allies and friends. Neither
the Soviet Union nor any other nation will have reason to question our
will to sustain the strongest and most flexible defense forces.

--Second, we will pursue an active diplomacy in the world, working,
together with our friends and allies, to resolve disputes through
peaceful means and to make any aggressor pay a heavy price.

--Third, we will strive to resolve pressing international economic
problems, particularly energy and inflation, and continue to pursue our
still larger objective of global economic growth through expanded trade
and development assistance and through the preservation of an open
multilateral trading system.

--Fourth, we will continue vigorously to support the process of building
democratic institutions and improving human rights protection around the
world. We are deeply convinced that the future lies not with
dictatorship but democracy.

--Fifth, we remain deeply committed to the process of mutual and
verifiable arms control, particularly to the effort to prevent the
spread and further development of nuclear weapons. Our decision to
defer, but not abandon our efforts to secure ratification of the SALT II
Treaty reflects our firm conviction that the United States has a
profound national security interest in the constraints on Soviet nuclear
forces which only that treaty can provide.

--Sixth, we must continue to look ahead in order to evaluate and respond
to resource, environment and population challenges through the end of
this century.

One very immediate and pressing objective that is uppermost on our minds
and those of the American people is the release of our hostages in Iran.

We have no basic quarrel with the nation, the revolution or the people
of Iran. The threat to them comes not from American policy but from
Soviet actions in the region. We are prepared to work with the
government of Iran to develop a new and mutually beneficial
relationship.

But that will not be possible so long as Iran continues to hold
Americans hostages, in defiance of the world community and civilized
behavior. They must be released unharmed. We have thus far pursued a
measured program of peaceful diplomatic and economic steps in an attempt
to resolve this issue without resorting to other remedies available to
us under international law. This reflects the deep respect of our nation
for the rule of law and for the safety of our people being held, and our
belief that a great power bears a responsibility to use its strength in
a measured and judicious manner. But our patience is not unlimited and
our concern for the well-being of our fellow citizens grows each day.

ENHANCING NATIONAL SECURITY, AMERICAN MILITARY STRENGTH

The maintenance of national security is my first concern, as it has been
for every president before me.

We must have both the military power and the political will to deter our
adversaries and to support our friends and allies.

We must pay whatever price is required to remain the strongest nation in
the world. That price has increased as the military power of our major
adversary has grown and its readiness to use that power been made all
too evident in Afghanistan. The real increases in defense spending,
therefore probably will be higher than previously projected; protecting
our security may require a larger share of our national wealth in the
future.

THE U.S.-SOVIET RELATIONSHIP

We are demonstrating to the Soviet Union across a broad front that it
will pay a heavy price for its aggression in terms of our relationship.
Throughout the last decades U.S.-Soviet relations have been a mixture of
cooperation and competition. The Soviet invasion of Afghanistan and the
imposition of a puppet government have highlighted in the starkest terms
the darker side of their policies, going well beyond competition and the
legitimate pursuit of national interest, and violating all norms of
international law and practice.

This attempt to subjugate an independent, non-aligned Islamic people is
a callous violation of international law and the United Nations Charter,
two fundamentals of international order. Hence, it is also a dangerous
threat to world peace. For the first time since the communization of
Eastern Europe after World War II, the Soviets have sent combat forces
into an area that was not previously under their control, into a
non-aligned and sovereign state.

The destruction of the independence of the Afghanistan government and
the occupation by the Soviet Union have altered the strategic situation
in that part of the world in a very ominous fashion. It has
significantly shortened the striking distance to the Indian Ocean and
the Persian Gulf for the Soviet Union.

It has also eliminated a buffer between the Soviet Union and Pakistan
and presented a new threat to Iran. These two countries are now far more
vulnerable to Soviet political intimidation. If that intimidation were
to prove effective, the Soviet Union could control an area of vital
strategic and economic significance to the survival of Western Europe,
the Far East, and ultimately the United States.

It has now been over a year since the Soviet invasion of Afghanistan
dealt a major blow to U.S.-Soviet relations and the entire international
system. The U.S. response has proven to be serious and far-reaching. It
has been increasingly effective, imposing real and sustained costs on
the U.S.S.R.'s economy and international image.

Meanwhile, we have encouraged and supported efforts to reach a political
settlement in Afghanistan which would lead to a withdrawal of Soviet
forces from that country and meet the interests of all concerned. It is
Soviet intransigence that has kept those efforts from bearing fruit.

Meanwhile, an overwhelming November resolution of the United Nations
General Assembly on Afghanistan has again made clear that the world has
not and will not forget Afghanistan. And our response continues to make
it clear that Soviet use of force in pursuit of its international
objectives is incompatible with the notion of business-as-usual.

BILATERAL COMMUNICATION

U.S.-Soviet relations remain strained by the continued Soviet presence
in Afghanistan, by growing Soviet military capabilities, and by the
Soviets' apparent willingness to use those capabilities without respect
for the most basic norms of international behavior.

But the U.S.-Soviet relationship remains the single most important
element in determining whether there will be war or peace. And so,
despite serious strains in our relations, we have maintained a dialogue
with the Soviet Union over the past year. Through this dialogue, we have
ensured against bilateral misunderstandings and miscalculations which
might escalate out of control, and have managed to avoid the injection
of superpower rivalries into areas of tension like the Iran-Iraq
conflict.

POLAND

Now, as was the case a year ago, the prospect of Soviet use of force
threatens the international order. The Soviet Union has completed
preparations for a possible military intervention against Poland.
Although the situation in Poland has shown signs of stabilizing
recently, Soviet forces remain in a high state of readiness and they
could move into Poland on short notice. We continue to believe that the
Polish people should be allowed to work out their internal problems
themselves, without outside interference, and we have made clear to the
Soviet leadership that any intervention in Poland would have severe and
prolonged consequences for East-West detente, and U.S.-Soviet relations
in particular.

DEFENSE BUDGET

For many years the Soviets have steadily increased their real defense
spending, expanded their strategic forces, strengthened their forces in
Europe and Asia, and enhanced their capability for projecting military
force around the world directly or through the use of proxies.
Afghanistan dramatizes the vastly increased military power of the Soviet
Union.

The Soviet Union has built a war machine far beyond any reasonable
requirements for their own defense and security. In contrast, our own
defense spending declined in real terms every year from 1968 through
1976.

We have reversed this decline in our own effort. Every year since 1976
there has been a real increase in our defense spending, and our lead has
encouraged increases by our allies. With the support of the Congress, we
must and will make an even greater effort in the years ahead.

The Fiscal Year 1982 budget would increase funding authority for defense
to more than $196 billion. This amount, together with a supplemental
request for FY 1981 of about $6 billion, will more than meet my
Administration's pledge for a sustained growth of 3 percent in real
expenditures, and provides for 5 percent in program growth in FY 1982
and beyond.

The trends we mean to correct cannot be remedied overnight; we must be
willing to see this program through. To ensure that we do so I am
setting a growth rate for defense that we can sustain over the long
haul.

The defense program I have proposed for the next five years will require
some sacrifice, but sacrifice we can well afford.

The defense program emphasizes four areas:

1. It ensures that our strategic nuclear forces will be equivalent to
those of the Soviet Union and that deterrence against nuclear war will
be maintained; 2. It upgrades our forces so that the military balance
between NATO and the Warsaw Pact will continue to deter the outbreak of
war, conventional or nuclear, in Europe; 3. It provides us the ability
to come quickly to the aid of friends and allies around the globe; 4.
And it ensures that our Navy will continue to be the most powerful on
the seas.

STRATEGIC FORCES

We are strengthening each of the three legs of our strategic forces. The
cruise missile production which will begin next year will modernize our
strategic air deterrent. B-52 capabilities will also be improved. These
steps will maintain and enhance the B-52 fleet by improving its ability
to deliver weapons against increasingly heavily defended targets.

We are also modernizing our strategic submarine force. Four more
POSEIDON submarines backfitted with new, 4,000 mile TRIDENT I missiles
began deployments in 1980. Nine TRIDENT submarines have been authorized
through 1981, and we propose one more each year.

The new M-X missile program to enhance our land-based intercontinental
ballistic missile force continues to make progress. Technical
refinements in the basing design over the last year will result in
operational benefits, lower costs, and reduced environmental impact. The
M-X program continues to be an essential ingredient in our strategic
posture, providing survivability, endurance, secure command and control
and the capability to threaten targets the Soviets hold dear.

Our new systems will enable U.S. strategic forces to maintain
equivalence in the face of the mounting Soviet challenge. We would
however need an even greater investment in strategic systems to meet the
likely Soviet buildup without SALT.

STRATEGIC DOCTRINE

This Administration's systematic contributions to the necessary
evolution of strategic doctrine began in 1977 when I commissioned a
comprehensive net assessment. From that base a number of thorough
investigations of specific topics continued. I should emphasize that the
need for an evolutionary doctrine is driven not by any change in our
basic objective, which remains peace and freedom for all mankind.
Rather, the need for change is driven by the inexorable buildup of
Soviet military power and the increasing propensity of Soviet leaders to
use this power in coercion and outright aggression to impose their will
on others.

I have codified our evolving strategic doctrine in a number of
interrelated and mutually supporting Presidential Directives. Their
overarching theme is to provide a doctrinal basis, and the specific
program to implement it, that tells the world that no potential
adversary of the United States could ever conclude that the fruits of
his aggression would be significant or worth the enormous costs of our
retaliation.

The Presidential Directives include:

PD-18: An overview of our strategic objectives PD-37: Basic space policy
PD-41: Civil Defense PD-53: Survivability and endurance for
telecommunications PD-57: Mobilization planning PD-58: Continuity of
Government PD-59: Countervailing Strategy for General War.

These policies have been devised to deter, first and foremost, Soviet
aggression. As such they confront not only Soviet military forces but
also Soviet military doctrine. By definition deterrence requires that we
shape Soviet assessments about the risks of war, assessments they will
make using their doctrine, not ours.

But at the same time we in no way seek to emulate their doctrine. In
particular, nothing in our policy contemplates that nuclear warfare
could ever be a deliberate instrument for achieving our own goals of
peace and freedom. Moreover, our policies are carefully devised to
provide the greatest possible incentives and opportunities for future
progress in arms control.

Finally, our doctrinal evolution has been undertaken with appropriate
consultation with our NATO Allies and others. We are fully consistent
with NATO's strategy of flexible response.

FORCES FOR NATO

We are greatly accelerating our ability to reinforce Western Europe with
massive ground and air forces in a crisis. We are undertaking a major
modernization program for the Army's weapons and equipment, adding
armor, firepower, and tactical mobility.

We are prepositioning more heavy equipment in Europe to help us cope
with attacks with little warning, and greatly strengthening our airlift
and sealift capabilities.

We are also improving our tactical air forces, buying about 1700 new
fighter and attack aircraft over the next five years, and increasing the
number of Air Force fighter wings by over 10 percent.

We are working closely with our European allies to secure the Host
Nation Support necessary to enable us to deploy more quickly a greater
ratio of combat forces to the European theater at a lower cost to the
United States.

SECURITY ASSISTANCE

As we move to enhance U.S. defense capabilities, we must not lose sight
of the need to assist others in maintaining their own security and
independence. Events since World War II, most recently in Southwest
Asia, have amply demonstrated that U.S. security cannot exist in a
vacuum, and that our own prospects for peace are closely tied to those
of our friends. The security assistance programs which I am proposing
for the coming fiscal year thus directly promote vital U.S. foreign
policy and national security aims, and are integral parts of our efforts
to improve and upgrade our own military forces.

More specifically, these programs, which are part of our overall foreign
aid request, promote U.S. security in two principal ways. First, they
assist friendly and allied nations to develop the capability to defend
themselves and maintain their own independence. An example during this
past year was the timely support provided Thailand to help bolster that
country's defenses against the large numbers of Soviet-backed Vietnamese
troops ranged along its eastern frontier. In addition, over the years
these programs have been important to the continued independence of
other friends and allies such as Israel, Greece, Turkey and Korea.
Second, security assistance constitutes an essential element in the
broad cooperative relationships we have established with many nations
which permit either U.S. bases on their territory or access by U.S.
forces to their facilities. These programs have been particularly
important with regard to the recently-concluded access agreements with
various countries in the Persian Gulf and Indian Ocean regions and have
been crucial to the protection of our interests throughout Southwest
Asia.

RAPID DEPLOYMENT FORCES

We are systematically enhancing our ability to respond rapidly to
non-NATO contingencies wherever required by our commitments or when our
vital interests are threatened.

The rapid deployment forces we are assembling will be extraordinarily
flexible: They could range in size from a few ships or air squadrons to
formations as large as 100,000 men, together with their support. Our
forces will be prepared for rapid deployment to any region of strategic
significance.

Among the specific initiatives we are taking to help us respond to
crises outside of Europe are:

The development of a new fleet of large cargo aircraft with
intercontinental range; the design and procurement of a force of
Maritime Prepositioning Ships that will carry heavy equipment and
supplies for three Marine Corps brigades; the procurement of fast
sealift ships to move large quantities of men and material quickly from
the U.S. to overseas areas of deployment; increasing training and
exercise activities to ensure that our forces will be well prepared to
deploy and operate in distant areas.

In addition, our European allies have agreed on the importance of
providing support to U.S. deployments to Southwest Asia.

NAVAL FORCES

Seapower is indispensable to our global position, in peace and also in
war. Our shipbuilding program will sustain a 550-ship Navy in the 1990's
and we will continue to build the most capable ships afloat.

The program I have proposed will assure the ability of our Navy to
operate in high threat areas, to maintain control of the seas and
protect vital lines of communication, both military and economic and to
provide the strong maritime component of our rapid deployment forces.
This is essential for operations in remote areas of the world, where we
cannot predict far in advance the precise location of trouble, or
preposition equipment on land.

MILITARY PERSONNEL

No matter how capable or advanced our weapons systems, our military
security depends on the abilities, the training and the dedication of
the people who serve in our armed forces. I am determined to recruit and
to retain under any foreseeable circumstances an ample level of such
skilled and experienced military personnel. This Administration has
supported for FY 1981 the largest peacetime increase ever in military
pay and allowances.

We have enhanced our readiness and combat endurance by improving the
Reserve Components. All reservists are assigned to units structured to
complement and provide needed depth to our active forces. Some reserve
personnel have also now been equipped with new equipment.

MOBILIZATION PLANNING

We have completed our first phase of mobilization planning, the first
such Presidentially-directed effort since World War II. The
government-wide exercise of our mobilization plans at the end of 1980
showed, first, that planning pays off and, second, that much more needs
to be done.

OUR INTELLIGENCE POSTURE

Our national interests are critically dependent on a strong and
effective intelligence capability. We will maintain and strengthen the
intelligence capabilities needed to assure our national security.
Maintenance of and continued improvements in our multi-faceted
intelligence effort are essential if we are to cope successfully with
the turbulence and uncertainties of today's world.

The intelligence budget I have submitted to the Congress responds to our
needs in a responsible way, providing for significant growth over the
Fiscal Year 1981 budget. This growth will enable us to develop new
technical means of intelligence collection while also assuring that the
more traditional methods of intelligence work are also given proper
stress. We must continue to integrate both modes of collection in our
analyses.

REGIONAL POLICIES

Every President for over three decades has recognized that America's
interests are global and that we must pursue a global foreign policy.

Two world wars have made clear our stake in Western Europe and the North
Atlantic area. We are also inextricably linked with the Far East,
politically, economically, and militarily. In both of these, the United
States has a permanent presence and security commitments which would be
automatically triggered. We have become increasingly conscious of our
growing interests in a third area, the Middle East and the Persian Gulf
area.

We have vital stakes in other major regions of the world as well. We
have long recognized that in an era of interdependence, our own security
and prosperity depend upon a larger common effort with friends and
allies throughout the world.

THE ATLANTIC ALLIANCE

In recognition of the threat which the Soviet invasion of Afghanistan
posed to Western interests in both Europe and Southwest Asia, NATO
foreign and defense ministers have expressed full support for U.S.
efforts to develop a capability to respond to a contingency in Southwest
Asia and have approved an extensive program to help fill the gap which
could be created by the diversion of U.S. forces to that region.

The U.S. has not been alone in seeking to maintain stability in the
Southwest Asia area and insure access to the needed resources there. The
European nations with the capability to do so are improving their own
forces in the region and providing greater economic and political
support to the residents of the area. In the face of the potential
danger posed by the Iran-Iraq conflict, we have developed coordination
among the Western forces in the area of the Persian Gulf in order to be
able to safeguard passage in that essential waterway.

Concerning developments in and around Poland the allies have achieved
the highest level of cohesion and unity of purpose in making clear the
effects on future East-West relations of a precipitous Soviet act there.

The alliance has continued to build on the progress of the past three
years in improving its conventional forces through the Long-Term Defense
Program. Though economic conditions throughout Europe today are making
its achievement difficult, the yearly real increase of 3 percent in
defense spending remains a goal actively sought by the alliance.

The NATO alliance also has moved forward during the past year with the
implementation of its historic December 1979 decision to modernize its
Theater Nuclear Force capabilities through deployment of improved
Pershing ballistic missiles and ground-launched cruise missiles in
Europe. Our allies continue to cooperate actively with us in this
important joint endeavor, whose purpose is to demonstrate convincingly
to the Soviet Union the potential costs of a nuclear conflict in Europe.
At the same time, we offered convincing evidence of our commitment to
arms control in Europe by initiating preliminary consultations with the
Soviet Union in Geneva on the subject of negotiated limits on long-range
theater nuclear forces. Also, during 1980 we initiated and carried out a
withdrawal from our nuclear weapons stockpile in Europe of 1,000 nuclear
warheads. This successful drawdown in our nuclear stockpile was a
further tangible demonstration of our commitment to the updating of our
existing theater nuclear forces in Europe.

In the NATO area, we continued to work closely with other countries in
providing resources to help Turkey regain economic health. We regretted
that massive political and internal security problems led the Turkish
military to take over the government on September 12. The new Turkish
authorities are making some progress in resolving those problems, and
they have pledged an early return to civilian government. The tradition
of the Turkish military gives us cause to take that pledge seriously. We
welcomed the reestablishment of Greece's links to the integrated
military command structure of the Atlantic Alliance--a move which we had
strongly encouraged--as a major step toward strengthening NATO's vital
southern flank at a time of international crisis and tension in adjacent
areas. Greek reintegration exemplifies the importance which the allies
place on cooperating in the common defense and shows that the allies can
make the difficult decisions necessary to insure their continued
security. We also welcomed the resumption of the intercommunal talks on
Cyprus.

THE U.S. AND THE PACIFIC NATIONS

The United States is a Pacific nation, as much as it is an Atlantic
nation. Our interests in Asia are as important to us as our interests in
Europe. Our trade with Asia is as great as our trade with Europe. During
the past four years we have regained a strong, dynamic and flexible
posture for the United States in this vital region.

Our major alliances with Japan, Australia and New Zealand are now
stronger than they ever have been, and together with the nations of
western Europe, we have begun to form the basic political structure for
dealing with international crises that affect us all. Japan, Australia
and New Zealand have given us strong support in developing a strategy
for responding to instability in the Persian Gulf.

Normalization of U.S. relations with China has facilitated China's full
entry into the international community and encouraged a constructive
Chinese role in the Asia-Pacific region. Our relations with China have
been rapidly consolidated over the past year through the conclusion of a
series of bilateral agreements. We have established a pattern of
frequent and frank consultations between our two governments,
exemplified by a series of high-level visits and by regular exchanges at
the working level, through which we have been able to identify
increasingly broad areas of common interest on which we can cooperate.

United States relations with the Association of Southeast Asian Nations
(ASEAN) have also expanded dramatically in the past four years. ASEAN is
now the focus for U.S. policy in Southeast Asia, and its cohesion and
strength are essential to stability in this critical area and beyond.

Soviet-supported Vietnamese aggression in Indo-china has posed a major
challenge to regional stability. In response, we have reiterated our
security commitment to Thailand and have provided emergency security
assistance for Thai forces facing a Vietnamese military threat along the
Thai-Cambodian border. We have worked closely with ASEAN and the U.N. to
press for withdrawal of Vietnamese forces from Cambodia and to encourage
a political settlement in Cambodia which permits that nation to be
governed by leaders of its own choice. We still look forward to the day
when Cambodia peacefully can begin the process of rebuilding its social,
economic and political institutions, after years of devastation and
occupation. And, on humanitarian grounds and in support of our friends
in the region, we have worked vigorously with international
organizations to arrange relief and resettlement for the exodus of
Indo-chinese refugees which threatened to overwhelm these nations.

We have maintained our alliance with Korea and helped assure Korea's
security during a difficult period of political transition.

We have amended our military base agreement with the Philippines,
ensuring stable access to these bases through 1991. The importance of
our Philippine bases to the strategic flexibility of U.S. forces and our
access to the Indian Ocean is self-evident.

Finally, we are in the process of concluding a long negotiation
establishing Micronesia's status as a freely associated state.

We enter the 1980's with a firm strategic footing in East Asia and the
Pacific, based on stable and productive U.S. relations with the majority
of countries of the region. We have established a stable level of U.S.
involvement in the region, appropriate to our own interests and to the
interests of our friends and allies there.

THE MIDDLE EAST AND SOUTHWEST ASIA

The continuing Soviet occupation of Afghanistan and the dislocations
caused by the Iraq-Iran war serve as constant reminders of the critical
importance for us, and our allies, of a third strategic zone stretching
across the Middle East, the Persian Gulf, and much of the Indian
subcontinent. This Southwest Asian region has served as a key strategic
and commercial link between East and West over the centuries. Today it
produces two-thirds of the world's oil exports, providing most of the
energy needs of our European allies and Japan. It has experienced almost
continuous conflict between nations, internal instabilities in many
countries, and regional rivalries, combined with very rapid economic and
social change. And now the Soviet Union remains in occupation of one of
these nations, ignoring world opinion which has called on it to get out.

We have taken several measures to meet these challenges.

MIDDLE EAST

In the Middle East, our determination to consolidate what has already
been achieved in the peace process--and to buttress that accomplishment
with further progress toward a comprehensive peace settlement--must
remain a central goal of our foreign policy. Pursuant to their peace
treaty, Egypt and Israel have made steady progress in the normalization
of their relations in a variety of fields, bringing the benefits of
peace directly to their people. The new relationship between Egypt and
Israel stands as an example of peaceful cooperation in an increasingly
fragmented and turbulent region.

Both President Sadat and Prime Minister Begin remain committed to the
current negotiations to provide full autonomy to the inhabitants of the
West Bank and Gaza. These negotiations have been complex and difficult,
but they have already made significant progress, and it is vital that
the two sides, with our assistance, see the process through to a
successful conclusion. We also recognize the need to broaden the peace
process to include other parties to the conflict and believe that a
successful autonomy agreement is an essential first step toward this
objective.

We have also taken a number of steps to strengthen our bilateral
relations with both Israel and Egypt. We share important strategic
interests with both of these countries.

We remain committed to Israel's security and are prepared to take
concrete steps to support Israel whenever that security is threatened.

PERSIAN GULF

The Persian Gulf has been a vital crossroads for trade between Europe
and Asia at many key moments in history. It has become essential in
recent years for its supply of oil to the United States, our allies, and
our friends. We have taken effective measures to control our own
consumption of imported fuel, working in cooperation with the other key
industrial / nations of the world. However, there is little doubt that
the healthy growth of our American and world economies will depend for
many years on continued safe access to the Persian Gulf's oil
production. The denial of these oil supplies would threaten not only our
own but world security.

The potent new threat from an advancing Soviet Union, against the
background of regional instability of which it can take advantage,
requires that we reinforce our ability to defend our regional friends
and to protect the flow of oil. We are continuing to build on the strong
political, economic, social and humanitarian ties which bind this
government and the American people to friendly governments and peoples
of the Persian Gulf.

We have also embarked on a course to reinforce the trust and confidence
our regional friends have in our ability to come to their assistance
rapidly with American military force if needed. We have increased our
naval presence in the Indian Ocean. We have created a Rapid Deployment
Force which can move quickly to the Gulf--or indeed any other area of
the world where outside aggression threatens. We have concluded several
agreements with countries which are prepared to let us use their
airports and naval facilities in an emergency. We have met requests for
reasonable amounts of American weaponry from regional countries which
are anxious to defend themselves. And we are discussing with a number of
our area friends further ways we can help to improve their security and
ours, both for the short and the longer term.

SOUTH ASIA

We seek a South Asia comprising sovereign and stable states, free of
outside interference, which can strengthen their political institutions
according to their own national genius and can develop their economies
for the betterment of their people.

The Soviet invasion of Afghanistan has posed a new challenge to this
region, and particularly to neighboring Pakistan. We are engaged in a
continuing dialogue with the Pakistan government concerning its
development and security requirements and the economic burden imposed by
Afghan refugees who have fled to Pakistan. We are participating with
other aid consortium members in debt rescheduling and will continue to
cooperate through the UNHCR in providing refugee assistance. We remain
committed to Pakistan's territorial integrity and independence.

Developments in the broad South/Southwest Asian region have also lent a
new importance to our relations with India, the largest and strongest
power in the area. We share India's interest in a more constructive
relationship. Indian policies and perceptions at times differ from our
own, and we have established a candid dialogue with this sister
democracy which seeks to avoid the misunderstandings which have
sometimes complicated our ties.

We attach major importance to strong economic assistance programs to the
countries in the area, which include a majority of the poor of the
non-Communist world. We believe that these programs will help achieve
stability in the area, an objective we share with the countries in the
region. Great progress has been achieved by these countries in
increasing food production; international cooperation in harnessing the
great river resources of South Asia would contribute further to this
goal and help to increase energy production.

We continue to give high priority to our non-proliferation goals in the
area in the context of our broad global and regional priorities. The
decision to continue supply of nuclear fuel to the Indian Tarapur
reactors was sensitive to this effort.

AFRICA

The United States has achieved a new level of trust and cooperation with
Africa. Our efforts, together with our allies, to achieve peace in
southern Africa, our increased efforts to help the poorest countries in
Africa to combat poverty, and our expanded efforts to promote trade and
investment have led to growing respect for the U.S. and to cooperation
in areas of vital interest to the United States.

Africa is a continent of poor nations for the most part. It also
contains many of the mineral resources vital for our economy. We have
worked with Africa in a spirit of mutual cooperation to help the African
nations solve their problems of poverty and to develop stronger ties
between our private sector and African economies. Our assistance to
Africa has more than doubled in the last four years. Equally important,
we set in motion new mechanisms for private investment and trade.

Nigeria is the largest country in Black Africa and the second largest
oil supplier to the United States. During this Administration we have
greatly expanded and improved our relationship with Nigeria and other
West African states whose aspirations for a constitutional democratic
order we share and support. This interest was manifested both
symbolically and practically by the visit of Vice President Mondale to
West Africa in July (1980) and the successful visit to Washington of the
President of Nigeria in October.

During Vice President Mondale's visit, a Joint Agricultural Consultative
Committee was established, with the U.S. represented entirely by the
private sector. This could herald a new role for the American private
sector in helping solve the world's serious food shortages. I am pleased
to say that our relations with Nigeria are at an all-time high,
providing the foundation for an even stronger relationship in the years
ahead.

Another tenet of this Administration's approach to African problems has
been encouragement and support for regional solutions to Africa's
problems. We have supported initiatives by the Organization of African
Unity to solve the protracted conflict in the western Sahara, Chad, and
the Horn. In Chad, the world is watching with dismay as a country torn
by a devastating civil war has become a fertile field for Libya's
exploitation, thus demonstrating that threats to peace can come from
forces within as well as without Africa.

In southern Africa the United States continues to pursue a policy of
encouraging peaceful development toward majority rule. In 1980, Southern
Rhodesia became independent as Zimbabwe, a multiracial nation under a
system of majority rule. Zimbabwean independence last April was the
culmination of a long struggle within the country and diplomatic efforts
involving Great Britain, African states neighboring Zimbabwe, and the
United States.

The focus of our efforts in pursuit of majority rule in southern Africa
has now turned to Namibia. Negotiations are proceeding among concerned
parties under the leadership of U.N. Secretary General Waldheim. This
should lead to implementation of the U.N. plan for self-determination
and independence for Namibia during 1981. If these negotiations are
successfully concluded, sixty-five years of uncertainty over the status
of the territory, including a seven-year-long war, will be ended.

In response to our active concern with issues of importance to Africans,
African states have cooperated with us on issues of importance to our
national interests. African states voted overwhelmingly in favor of the
U.N. Resolution calling for release of the hostages, and for the U.N.
Resolution condemning the Soviet invasion of Afghanistan. Two countries
of Africa have signed access agreements with the U.S. allowing us use of
naval and air facilities in the Indian Ocean.

Africans have become increasingly vocal on human rights. African leaders
have spoken out on the issue of political prisoners, and the OAU is
drafting its own Charter on Human Rights. Three countries in Africa--
Nigeria, Ghana, and Uganda--have returned to civilian rule during the
past year.

U.S. cooperation with Africa on all these matters represents a strong
base on which we can build in future years.

Liberia is a country of long-standing ties with the U.S. and the site of
considerable U.S. investment and facilities. This past April a coup
replaced the government and a period of political and economic
uncertainty ensued. The U.S. acted swiftly to meet this situation. We,
together with African leaders, urged the release of political prisoners,
and many have been released; we provided emergency economic assistance
to help avoid economic collapse, and helped to involve the IMF and the
banking community to bring about economic stability; and we have worked
closely with the new leaders to maintain Liberia's strong ties with the
West and to protect America's vital interests.

NORTH AFRICA

In early 1979, following a Libyan-inspired commando attack on a Tunisian
provincial city, the U.S. responded promptly to Tunisia's urgent request
for assistance, both by airlifting needed military equipment and by
making clear our longstanding interest in the security and integrity of
this friendly country. The U.S. remains determined to oppose other
irresponsible Libyan aspirations. Despairing of a productive dialogue
with the Libyan authorities, the U.S. closed down its embassy in Libya
and later expelled six Libyan diplomats in Washington in order to deter
an intimidation campaign against Libyan citizens in the U.S.

U.S. relations with Algeria have improved, and Algeria has played an
indispensable and effective role as intermediary between Iran and the
U.S. over the hostage issue.

The strengthening of our arms supply relationship with Morocco has
helped to deal with attacks inside its internationally recognized
frontiers and to strengthen its confidence in seeking a political
settlement of the Western Sahara conflict. While not assuming a
mediatory role, the U.S. encouraged all interested parties to turn their
energies to a peaceful and sensible compromise resolution of the war in
the Sahara and supported efforts by the Organization of African Unity
toward that end. As the year drew to a close, the U.S. was encouraged by
evolution in the attitudes of all sides, and is hopeful that their
differences will be peacefully resolved in the year ahead so that the
vast economic potential of North Africa can be developed for the
well-being of the people living there.

LATIN AMERICA AND THE CARIBBEAN

The principles of our policies in this hemisphere have been clear and
constant over the last four years. We support democracy and respect for
human rights. We have struggled with many to help free the region of
both repression and terrorism. We have respected ideological diversity
and opposed outside intervention in purely internal affairs. We will
act, though, in response to a request for assistance by a country
threatened by external aggression. We support social and economic
development within a democratic framework. We support the peaceful
settlement of disputes. We strongly encourage regional cooperation and
shared responsibilities within the hemisphere to all these ends, and we
have eagerly and regularly sought the advice of the leaders of the
region on a wide range of issues.

Last November, I spoke to the General Assembly of the Organization of
American States of a cause that has been closest to my heart--human
rights. It is an issue that has found its time in the hemisphere. The
cause is not mine alone, but an historic movement that will endure.

At Riobamba, Ecuador, last September four Andean Pact countries, Costa
Rica, and Panama broke new ground by adopting a "Code of Conduct," that
joint action in defense of human rights does not violate the principles
of nonintervention in the internal affairs of states in this hemisphere.
The Organization of American States has twice condemned the coup that
overturned the democratic process in Bolivia and the widespread abuse of
human rights by the regime which seized power. The Inter-American
Commission on Human Rights has gained world acclaim for its
dispassionate reports. It completed two major country studies this year
in addition to its annual report. In a resolution adopted without
opposition, the OAS General Assembly in November strongly supported the
work of the Commission. The American Convention on Human Rights is in
force and an Inter-American Court has been created to judge human rights
violations. This convention has been pending before the Senate for two
years; I hope the United States this year will join the other nations of
the hemisphere in ratifying a convention which embodies principles that
are our tradition.

The trend in favor of democracy has continued. During this past year,
Peru inaugurated a democratically elected government. Brazil continues
its process of liberalization. In Central America, Hondurans voted in
record numbers in their first national elections in over eight years. In
the Caribbean seven elections have returned governments firmly committed
to the democratic traditions of the Commonwealth.

Another major contribution to peace in the hemisphere is Latin America's
own Treaty for the Prohibition of Nuclear Weapons. On behalf of the
United States, I signed Protocol I of this Treaty in May of 1977 and
sent it to the Senate for ratification. I urge that it be acted upon
promptly by the Senate in order that it be brought into the widest
possible effect in the Latin American region.

Regional cooperation for development is gaining from Central America to
the Andes, and throughout the Caribbean. The Caribbean Group for
Cooperation in Economic Development, which we established with 29 other
nations in 1977, has helped channel $750 million in external support for
growth in the Caribbean. The recent meeting of the Chiefs of State of
the Eastern Caribbean set a new precedent for cooperation in that
region. Mexico and Venezuela jointly and Trinidad and Tobago separately
have established oil facilities that will provide substantial assistance
to their oil importing neighbors. The peace treaty between El Salvador
and Honduras will hopefully stimulate Central America to move forward
again toward economic integration. Formation of Caribbean/ Central
American Action, a private sector organization, has given a major
impetus to improving people-to-people bonds and strengthening the role
of private enterprise in the development of democratic societies.

The Panama treaties have been in force for over a year. A new
partnership has been created with Panama; it is a model for large and
small nations. A longstanding issue that divided us from our neighbors
has been resolved. The security of the canal has been enhanced. The
canal is operating as well as ever, with traffic through it reaching
record levels this year. Canal employees, American and Panamanian alike,
have remained on the job and have found their living and working
conditions virtually unchanged.

In 1980, relations with Mexico continued to improve due in large measure
to the effectiveness of the Coordinator for Mexican Affairs and the
expanded use of the U.S.-Mexico Consultative Mechanism. By holding
periodic meetings of its various working groups, we have been able to
prevent mutual concerns from becoming political issues. The Secretary of
State visited Mexico City in November, and, along with the Mexican
Secretary of Foreign Relations, reviewed the performance of the
Consultative Mechanism. The office of the Coordinator has ensured the
implementation of my directive to all agencies to accord high priority
to Mexican concerns. Trade with Mexico rose by almost 60 percent to
nearly $30 billion, making that country our third largest trading
partner.

These are all encouraging developments. Other problems remain, however.

The impact of large-scale migration is affecting many countries in the
hemisphere. The most serious manifestation was the massive, illegal
exodus from Cuba last summer. The Cuban government unilaterally
encouraged the disorderly and even deadly migration of 125,000 of its
citizens in complete disregard for international law or the immigration
laws of its neighbors. Migrations of this nature clearly require
concerted action, and we have asked the OAS to explore means of dealing
with similar situations which may occur in the future.

We have a long-standing treaty with Colombia on Quita Sueno, Roncador,
and Serrano which remains to be ratified by the Senate.

In Central America, the future of Nicaragua is unclear. Recent tensions,
the restrictions on the press and political activity, an inordinate
Cuban presence in the country and the tragic killing by the security
forces of a businessman well known for his democratic orientation, cause
us considerable concern. These are not encouraging developments. But
those who seek a free society remain in the contest for their nation's
destiny. They have asked us to help rebuild their country, and by our
assistance, to demonstrate that the democratic nations do not intend to
abandon Nicaragua to the Cubans. As long as those who intend to pursue
their pluralistic goals play important roles in Nicaragua, it deserves
our continuing support.

In El Salvador, we have supported the efforts of the Junta to change the
fundamental basis of an inequitable system and to give a stake in a new
nation to those millions of people, who for so long, lived without hope
or dignity. As the government struggles against those who would restore
an old tyranny or impose a new one, the United States will continue to
stand behind them.

We have increased our aid to the Caribbean, an area vital to our
national security, and we should continue to build close relations based
on mutual respect and understanding, and common interests.

As the nations of this hemisphere prepare to move further into the
1980's, I am struck by the depth of underlying commitment that there is
to our common principles: non-intervention, peaceful settlement of
disputes, cooperation for development, democracy and defense of basic
human rights. I leave office satisfied that the political, economic,
social and organizational basis for further progress with respect to all
these principles have been substantially strengthened in the past four
years. I am particularly reassured by the leadership by other nations of
the hemisphere in advancing these principles. The success of our common
task of improving the circumstances of all peoples and nations in the
hemisphere can only be assured by the sharing of responsibility. I look
forward to a hemisphere that at the end of this decade has proven itself
anew as a leader in the promotion of both national and human dignity.

THE INTERNATIONAL ECONOMY

A growing defense effort and a vigorous foreign policy rest upon a
strong economy here in the United States. And the strength of our own
economy depends upon our ability to lead and compete in the
international marketplace.

ENERGY

Last year, the war between Iraq and Iran led to the loss of nearly 4
million barrels of oil to world markets, the third major oil market
disruption in the past seven years. This crisis has vividly demonstrated
once again both the value of lessened dependence on oil imports and the
continuing instability of the Persian Gulf area.

Under the leadership of the United States, the 21 members of the
International Energy Agency took collective action to ensure that the
oil shortfall stemming from the Iran-Iraq war would not be aggravated by
competition for scarce spot market supplies. We are also working
together to see that those nations most seriously affected by the oil
disruption-- including our key NATO allies Turkey and Portugal--can get
the oil they need. At the most recent IEA Ministerial meeting we joined
the other members in pledging to take those policy measures necessary to
slice our joint oil imports in the first quarter of 1981 by 2.2 million
barrels.

Our international cooperation efforts in the energy field are not
limited to crisis management. At the Economic Summit meetings in Tokyo
and Venice, the heads of government of the seven major industrial
democracies agreed to a series of tough energy conservation and
production goals. We are working together with all our allies and
friends in this effort.

Construction has begun on a commercial scale coal liquefaction plant in
West Virginia co-financed by the United States, Japan and West Germany.
An interagency task force has just reported to me on a series of
measures we need to take to increase coal production and exports. This
report builds on the work of the International Energy Agency's Coal
Industry Advisory Board. With the assurances of a reliable United States
steam coal supply at reasonable prices, many of the electric power
plants to be built in the 1980's and 1990's can be coal-fired rather
than oil-burning.

We are working cooperatively with other nations to increase energy
security in other areas as well. Joint research and development with our
allies is underway in solar energy, nuclear power, industrial
conservation and other areas. In addition, we are assisting rapidly
industrializing nations to carefully assess their basic energy policy
choices, and our development assistance program helps the developing
countries to increase indigenous energy production to meet the energy
needs of their poorest citizens. We support the proposal for a new World
Bank energy affiliate to these same ends, whose fulfillment will
contribute to a better global balance between energy supply and demand.

INTERNATIONAL MONETARY POLICY

Despite the rapid increase in oil costs, the policy measures we have
taken to improve domestic economic performance have had a continued
powerful effect on our external accounts and on the strength of the
dollar. A strong dollar helps in the fight against inflation.

There has also been considerable forward movement in efforts to improve
the functioning of the international monetary system. The stability of
the international system of payments and trade is important to the
stability and good health of our own economy. We have given strong
support to the innovative steps being taken by the International
Monetary Fund and World Bank to help promote early adjustment to the
difficult international economic problems. Recent agreement to increase
quotas by fifty percent will ensure the IMF has sufficient resources to
perform its central role in promoting adjustment and financing payments
imbalances. The World Bank's new structural adjustment lending program
will also make an important contribution to international efforts to
help countries achieve a sustainable level of growth and development.

SUGAR

In 1980, Congress passed U.S. implementing legislation for the
International Sugar Agreement, thus fulfilling a major commitment of
this Administration. The agreement is an important element in our
international commodity policy with far-reaching implications for our
relations with developing countries, particularly sugar producers in
Latin America. Producers and consumers alike will benefit from a more
stable market for this essential commodity.

COFFEE

At year's end, Congress approved implementing legislation permitting the
U.S. to carry out fully its commitments under International Coffee
Agreement Specifically, the legislation enables us to meet our part of
an understanding negotiated last fall among members of the Agreement,
which defends, by use of export quotas, a price range well below coffee
prices of previous years and which commits major coffee producers to
eliminate cartel arrangements that manipulated future markets to raise
prices. The way is now open to a fully-functioning International Coffee
Agreement which can help to stabilize this major world commodity market.
The results will be positive for both consumers--who will be less likely
to suffer from sharp increases in coffee prices--and producers--who can
undertake future investment with assurance of greater protection against
disruptive price fluctuations in their exports.

NATURAL RUBBER

In 1980, the International Natural Rubber Agreement entered into force
provisionally. U.S. membership in this new body was approved
overwhelmingly by the Senate last year. The natural rubber agreement is
a model of its kind and should make a substantial contribution to a
stable world market in this key industrial commodity. It is thus an
excellent example of constructive steps to improve the operation of the
world economy in ways which can benefit the developing and
industrialized countries alike. In particular, the agreement has
improved important U.S. relationships with the major natural
rubber-producing countries of Southeast Asia.

COMMON FUND

The United States joined members of the United Nations Conference on
Trade and Development, both developed and developing nations, in
concluding Articles of Agreement in 1980 for a Common Fund to help
international commodity agreements stabilize the prices of raw
materials.

ECONOMIC COOPERATION WITH DEVELOPING NATIONS

Our relations with the developing nations are of major importance to the
United States. The fabric of our relations with these countries has
strong economic and political dimensions. They constitute the most
rapidly growing markets for our exports, and are important sources of
fuel and raw materials. Their political views are increasingly
important, as demonstrated in their overwhelming condemnation of the
Soviet invasion of Afghanistan. Our ability to work together with
developing nations toward goals we have in common (their political
independence, the resolution of regional tensions, and our growing ties
of trade for example) require us to maintain the policy of active
involvement with the developing world that we have pursued over the past
four years.

The actions we have taken in such areas as energy, trade, commodities,
and international financial institutions are all important to the
welfare of the developing countries. Another important way the United
States can directly assist these countries and demonstrate our concern
for their future is through our multilateral and bilateral foreign
assistance program. The legislation which I will be submitting to you
for FY 82 provides the authority and the funds to carry on this
activity. Prompt Congressional action on this legislation is essential
in order to attack such high priority global problems as food and
energy, meet our treaty and base rights agreements, continue our peace
efforts in the Middle East, provide economic and development support to
countries in need, promote progress on North-South issues, protect
Western interests, and counter Soviet influence.

Our proposed FY 1982 bilateral development aid program is directly
responsive to the agreement reached at the 1980 Venice Economic Summit
that the major industrial nations should increase their aid for food and
energy production and for family planning. We understand that other
Summit countries plan similar responses. It is also important to honor
our international agreements for multilateral assistance by authorizing
and appropriating funds for the International Financial Institutions.
These multilateral programs enhance the efficiency of U.S. contributions
by combining them with those of many other donor countries to promote
development; the proposed new World Bank affiliate to increase energy
output in developing countries offers particular promise. All these
types of aid benefit our long-run economic and political interests.

Progress was made on a number of economic issues in negotiations
throughout the U.N. system. However, in spite of lengthy efforts in the
United Nations, agreement has not been reached on how to launch a
process of Global Negotiations in which nations might collectively work
to solve such important issues as energy, food, protectionism, and
population pressures. The United States continues to believe that
progress can best be made when nations focus on such specific problems,
rather than on procedural and institutional questions. It will continue
to work to move the North-South dialogue into a more constructive phase.

FOOD--THE WAR ON HUNGER

The War on Hunger must be a continuous urgent priority. Major portions
of the world's population continue to be threatened by the specter of
hunger and malnutrition. During the past year, some 150 million people
in 36 African countries were faced with near disaster as the result of
serious drought, induced food shortages. Our government, working in
concert with the U.N.'s Food and Agricultural Organization (FAO), helped
to respond to that need. But the problems of hunger cannot be solved by
short-term measures. We must continue to support those activities,
bilateral and multilateral, which aim at improving food production
especially in developing countries and assuring global food security.
These measures are necessary to the maintenance of a stable and healthy
world economy.

I am pleased that negotiation of a new Food Aid Convention, which
guarantees a minimum annual level of food assistance, was successfully
concluded in March. The establishment of the International Emergency
Wheat Reserve will enable the U.S. to meet its commitment under the new
Convention to feed hungry people, even in times of short supply.

Of immediate concern is the prospect of millions of Africans threatened
by famine because of drought and civil disturbances. The U.S. plea for
increased food aid resulted in the organization of an international
pledging conference and we are hopeful that widespread starvation will
be avoided.

Good progress has been made since the Venice Economic Summit called for
increased effort on this front. We and other donor countries have begun
to assist poor countries develop long-term strategies to improve their
food production. The World Bank will invest up to $4 billion in the next
few years in improving the grain storage and food-handling capacity of
countries prone to food shortages.

Good progress has been made since the Tokyo Economic Summit called for
increased effort on this front. The World Bank is giving this problem
top priority, as are some other donor countries. The resources of the
consultative Group on International Agricultural Research will be
doubled over a five-year period. The work of our own Institute of
Scientific and Technological Cooperation will further strengthen the
search for relevant new agricultural technologies.

The goal of freeing the world from hunger by the year 2000 should
command the full support of all countries.

The Human Dimension of Foreign Policy

HUMAN RIGHTS

The human rights policy of the United States has been an integral part
of our overall foreign policy for the past several years. This policy
serves the national interest of the United States in several important
ways: by encouraging respect by governments for the basic rights of
human beings, it promotes peaceful, constructive change, reduces the
likelihood of internal pressures for violent change and for the
exploitation of these by our adversaries, and thus directly serves our
long-term interest in peace and stability; by matching espousal of
fundamental American principles of freedom with specific foreign policy
actions, we stand out in vivid contrast to our ideological adversaries;
by our efforts to expand freedom elsewhere, we render our own freedom,
and our own nation, more secure. Countries that respect human rights
make stronger allies and better friends.

Rather than attempt to dictate what system of government or institutions
other countries should have, the U.S. supports, throughout the world,
the internationally recognized human rights which all members of the
United Nations have pledged themselves to respect. There is more than
one model that can satisfy the continuing human reach for freedom and
justice:

1980 has been a year of some disappointments, but has also seen some
positive developments in the ongoing struggle for fulfillment of human
rights throughout the world. In the year we have seen:

--Free elections were held and democratic governments installed in Peru,
Dominica, and Jamaica. Honduras held a free election for installation of
a constituent assembly. An interim government was subsequently named
pointing toward national presidential elections in 1981. Brazil
continues on its course of political liberalization.

--The "Charter of Conduct" signed in Riobamba, Ecuador, by Ecuador,
Colombia, Venezuela, Peru, Costa Rica, Panama and Spain, affirms the
importance of democracy and human rights for the Andean countries.

--The Organization of American States, in its annual General Assembly,
approved a resolution in support of the Inter-American Human Rights
Commission's work. The resolution took note of the Commission's annual
report, which described the status of human rights in Chile, El
Salvador, Paraguay and Uruguay; and the special reports on Argentina and
Haiti, which described human rights conditions as investigated during
on-site inspections to these countries.

--The awarding of the Nobel Prize for Peace to Adolfo Perez Esquivel of
Argentina for his non-violent advocacy of human rights.

--The United States was able to rejoin the International Labor
Organization after an absence of two years, as that U.N. body reformed
its procedures to return to its original purpose of strengthening
employer-employee-government relations to insure human rights for the
working people of the world.

The United States, of course, cannot take credit for all these various
developments. But we can take satisfaction in knowing that our policies
encourage and perhaps influence them.

Those who see a contradiction between our security and our humanitarian
interests forget that the basis for a secure and stable society is the
bond of trust between a government and its people. I profoundly believe
that the future of our world is not to be found in authoritarianism:
that wears the mask of order, or totalitarianism that wears the mask of
justice. Instead, let us find our future in the human face of democracy,
the human voice of individual liberty, the human hand of economic
development.

HUMANITARIAN AID

The United States has continued to play its traditional role of
safehaven for those who flee or are forced to flee their homes because
of persecution or war. During 1980, the United States provided
resettlement opportunities for 216,000 refugees from countries around
the globe. In addition, the United States joined with other nations to
provide relief to refugees in country of first asylum in Africa, the
Middle East, and Asia.

The great majority of refugee admissions continued to be from
Indo-china. During 1980, 168,000 Indo-chinese were resettled in the
United States. Although refugee populations persist in camps in
Southeast Asia, and refugees continue to flee Vietnam, Laos and
Kampuchea, the flow is not as great as in the past. One factor in
reducing the flow from Vietnam has been the successful negotiation and
commencement of an Orderly Departure Program which permits us to process
Vietnamese for resettlement in the United States with direct departure
from Ho Chi Minh Ville in an orderly fashion. The first group of 250
departed Vietnam for the United States in December, 1980.

In addition to the refugees admitted last year, the United States
accepted for entry into the United States 125,000 Cubans who were
expelled by Fidel Castro. Federal and state authorities, as well as
private voluntary agencies, responded with unprecedented vigor to coping
with the unexpected influx of Cubans.

Major relief efforts to aid refugees in countries of first asylum
continued in several areas of the world. In December, 1980, thirty-two
nations, meeting in New York City, agreed to contribute $65 million to
the continuing famine relief program in Kampuchea. Due in great part to
the generosity of the American people and the leadership exercised in
the international arena by the United States, we have played the pivotal
role in ameliorating massive suffering in Kampuchea.

The United States has taken the lead among a group of donor countries
who are providing relief to some two million refugees in the Horn of
Africa who have been displaced by fighting in Ethiopia. U.S. assistance,
primarily to Somalia, consists of $35 million worth of food and $18
million in cash and kind. Here again, United States efforts can in large
part be credited with keeping hundreds of thousands of people alive.

Another major international relief effort has been mounted in Pakistan.
The United States is one of 25 countries plus the European Economic
Community who have been helping the Government of Pakistan to cope with
the problem of feeding and sheltering the more than one million refugees
that have been generated by the Soviet invasion of Afghanistan.

In April, 1980, the Congress passed the Refugee Act of 1980 which
brought together, for the first time, in one piece of legislation the
various threads of U.S. policy towards refugees. The law laid down a
new, broader definition of the term refugee, established mechanisms for
arriving at a level of refugee admissions through consultation with
Congress, and established the Office of the United States Coordinator
for Refugees.

It cannot be ignored that the destructive and aggressive policies of the
Soviet Union have added immeasurably to the suffering in these three
tragic situations.

The Control of Nuclear Weapons

Together with our friends and allies, we are striving to build a world
in which peoples with diverse interests can live freely and prosper. But
all that humankind has achieved to date, all that we are seeking to
accomplish, and human existence itself can be undone in an instant--in
the catastrophe of a nuclear war.

Thus one of the central objectives of my Administration has been to
control the proliferation of nuclear weapons to those nations which do
not have them, and their further development by the existing nuclear
powers-- notably the Soviet Union and the United States.

NON-PROLIFERATION

My Administration has been committed to stemming the spread of nuclear
weapons. Nuclear proliferation would raise the spectre of the use of
nuclear explosives in crucial, unstable regions of the world endangering
not only our security and that of our Allies, but that of the whole
world. Non-proliferation is not and can not be a unilateral U.S. policy,
nor should it be an issue of contention between the industrialized and
developing states. The international non-proliferation effort requires
the support of suppliers as well as importers of nuclear technology and
materials.

We have been proceeding on a number of fronts:

--First, we have been seeking to encourage nations to accede to the
Non-Proliferation Treaty. The U.S. is also actively encouraging other
nations to accept full-scope safeguards on all of their nuclear
activities and is asking other nuclear suppliers to adopt a full-scope
safeguards requirement as a condition for future supply.

--Second, the International Nuclear Fuel Cycle Evaluation (INFCE), which
was completed in 1980, demonstrated that suppliers and recipients can
work together on these technically complex and sensitive issues. While
differences remain, the INFCE effort provides a broader international
basis for national decisions which must balance energy needs with
non-proliferation concerns.

--Finally, we are working to encourage regional cooperation and
restraint. Protocol I of the Treaty of Tlatelolco which will contribute
to the lessening of nuclear dangers for our Latin American neighbors
ought now to be ratified by the United States Senate.

LIMITATIONS ON STRATEGIC ARMS

I remain convinced that the SALT II Treaty is in our Nation's security
interest and that it would add significantly to the control of nuclear
weapons. I strongly support continuation of the SALT process and the
negotiation of more far-reaching mutual restraints on nuclear weaponry.

CONCLUSION

We have new support in the world for our purposes of national
independence and individual human dignity. We have a new will at home to
do what is required to keep us the strongest nation on earth.

We must move together into this decade with the strength which comes
from realization of the dangers before us and from the confidence that
together we can overcome them.  The White House, January 16, 1981.

***

State of the Union Address
Ronald Reagan
January 26, 1982

Mr. Speaker, Mr. President, distinguished Members of the Congress,
honored guests, and fellow citizens:

Today marks my first State of the Union address to you, a constitutional
duty as old as our Republic itself.

President Washington began this tradition in 1790 after reminding the
Nation that the destiny of self-government and the "preservation of the
sacred fire of liberty" is "finally staked on the experiment entrusted
to the hands of the American people." For our friends in the press, who
place a high premium on accuracy, let me say: I did not actually hear
George Washington say that. But it is a matter of historic record.

But from this podium, Winston Churchill asked the free world to stand
together against the onslaught of aggression. Franklin Delano Roosevelt
spoke of a day of infamy and summoned a nation to arms. Douglas
MacArthur made an unforgettable farewell to a country he loved and
served so well. Dwight Eisenhower reminded us that peace was purchased
only at the price of strength. And John F. Kennedy spoke of the burden
and glory that is freedom.

When I visited this Chamber last year as a newcomer to Washington,
critical of past policies which I believed had failed, I proposed a new
spirit of partnership between this Congress and this administration and
between Washington and our State and local governments. In forging this
new partnership for America, we could achieve the oldest hopes of our
Republic--prosperity for our nation, peace for the world, and the
blessings of individual liberty for our children and, someday, for all
of humanity.

It's my duty to report to you tonight on the progress that we have made
in our relations with other nations, on the foundation we've carefully
laid for our economic recovery, and finally, on a bold and spirited
initiative that I believe can change the face of American government and
make it again the servant of the people.

Seldom have the stakes been higher for America. What we do and say here
will make all the difference to autoworkers in Detroit, lumberjacks in
the Northwest, steelworkers in Steubenville who are in the unemployment
lines; to black teenagers in Newark and Chicago; to hard-pressed farmers
and small businessmen; and to millions of everyday Americans who harbor
the simple wish of a safe and financially secure future for their
children. To understand the state of the Union, we must look not only at
where we are and where we're going but where we've been. The situation
at this time last year was truly ominous.

The last decade has seen a series of recessions. There was a recession
in 1970, in 1974, and again in the spring of 1980. Each time,
unemployment increased and inflation soon turned up again. We coined the
word "stagflation" to describe this.

Government's response to these recessions was to pump up the money
supply and increase spending. In the last 6 months of 1980, as an
example, the money supply increased at the fastest rate in postwar
history--13 percent. Inflation remained in double digits, and government
spending increased at an annual rate of 17 percent. Interest rates
reached a staggering 21.5 percent. There were 8 million unemployed.

Late in 1981 we sank into the present recession, largely because
continued high interest rates hurt the auto industry and construction.
And there was a drop in productivity, and the already high unemployment
increased.

This time, however, things are different. We have an economic program in
place, completely different from the artificial quick fixes of the past.
It calls for a reduction of the rate of increase in government spending,
and already that rate has been cut nearly in half. But reduced spending
the first and smallest phase of a 3-year tax rate reduction designed to
stimulate the economy and create jobs. Already interest rates are down
to 15 3/4 percent, but they must still go lower. Inflation is down from
12.4 percent to 8.9, and for the month of December it was running at an
annualized rate of 5.2 percent. If we had not acted as we did, things
would be far worse for all Americans than they are today. Inflation,
taxes, and interest rates would all be higher.

A year ago, Americans' faith in their governmental process was steadily
declining. Six out of 10 Americans were saying they were pessimistic
about their future. A new kind of defeatism was heard. Some said our
domestic problems were uncontrollable, that we had to learn to live with
this seemingly endless cycle of high inflation and high unemployment.

There were also pessimistic predictions about the relationship between
our administration and this Congress. It was said we could never work
together. Well, those predictions were wrong. The record is clear, and I
believe that history will remember this as an era of American renewal,
remember this administration as an administration of change, and
remember this Congress as a Congress of destiny.

Together, we not only cut the increase in government spending nearly in
half, we brought about the largest tax reductions and the most sweeping
changes in our tax structure since the beginning of this century. And
because we indexed future taxes to the rate of inflation, we took away
government's built-in profit on inflation and its hidden incentive to
grow larger at the expense of American workers.

Together, after 50 years of taking power away from the hands of the
people in their States and local communities, we have started returning
power and resources to them.

Together, we have cut the growth of new Federal regulations nearly in
half. In 1981 there were 23,000 fewer pages in the Federal Register,
which lists new regulations, than there were in 1980. By deregulating
oil we've come closer to achieving energy independence and helped bring
down the cost of gasoline and heating fuel.

Together, we have created an effective Federal strike force to combat
waste and fraud in government. In just 6 months it has saved the
taxpayers more than $2 billion, and it's only getting started.

Together we've begun to mobilize the private sector, not to duplicate
wasteful and discredited government programs, but to bring thousands of
Americans into a volunteer effort to help solve many of America's social
problems.

Together we've begun to restore that margin of military safety that
ensures peace. Our country's uniform is being worn once again with
pride.

Together we have made a New Beginning, but we have only begun.

No one pretends that the way ahead will be easy. In my Inaugural Address
last year, I warned that the "ills we suffer have come upon us over
several decades. They will not go away in days, weeks, or months, but
they will go away . . . because we as Americans have the capacity now,
as we've had it in the past, to do whatever needs to be done to preserve
this last and greatest bastion of freedom."

The economy will face difficult moments in the months ahead. But the
program for economic recovery that is in place will pull the economy out
of its slump and put us on the road to prosperity and stable growth by
the latter half of this year. And that is why I can report to you
tonight that in the near future the state of the Union and the economy
will be better--much better--if we summon the strength to continue on
the course that we've charted.

And so, the question: If the fundamentals are in place, what now? Well,
two things. First, we must understand what's happening at the moment to
the economy. Our current problems are not the product of the recovery
program that's only just now getting underway, as some would have you
believe; they are the inheritance of decades of tax and tax and spend
and spend.

Second, because our economic problems are deeply rooted and will not
respond to quick political fixes, we must stick to our carefully
integrated plan for recovery. That plan is based on four commonsense
fundamentals: continued reduction of the growth in Federal spending;
preserving the individual and business tax reductions that will
stimulate saving and investment; removing unnecessary Federal
regulations to spark productivity; and maintaining a healthy dollar and
a stable monetary policy, the latter a responsibility of the Federal
Reserve System.

The only alternative being offered to this economic program is a return
to the policies that gave us a trillion-dollar debt, runaway inflation,
runaway interest rates and unemployment. The doubters would have us turn
back the clock with tax increases that would offset the personal tax
rate reductions already passed by this Congress. Raise present taxes to
cut future deficits, they tell us. Well, I don't believe we should buy
that argument.

There are too many imponderables for anyone to predict deficits or
surpluses several years ahead with any degree of accuracy. The budget in
place, when I took office, had been projected as balanced. It turned out
to have one of the biggest deficits in history. Another example of the
imponderables that can make deficit projections highly questionable--a
change of only one percentage point in unemployment can alter a deficit
up or down by some $25 billion.

As it now stands, our forecast, which we're required by law to make,
will show major deficits starting at less than a hundred billion dollars
and declining, but still too high. More important, we're making progress
with the three keys to reducing deficits: economic growth, lower
interest rates, and spending control. The policies we have in place will
reduce the deficit steadily, surely, and in time, completely.

Higher taxes would not mean lower deficits. If they did, how would we
explain that tax revenues more than doubled just since 1976; yet in that
same 6-year period we ran the largest series of deficits in our history.
In 1980 tax revenues increased by $54 billion, and in 1980 we had one of
our all-time biggest deficits. Raising taxes won't balance the budget;
it will encourage more government spending and less private investment.
Raising taxes will slow economic growth, reduce production, and destroy
future jobs, making it more difficult for those without jobs to find
them and more likely that those who now have jobs could lose them. So, I
will not ask you to try to balance the budget on the backs of the
American taxpayers.

I will seek no tax increases this year, and I have no intention of
retreating from our basic program of tax relief. I promise to bring the
American people--to bring their tax rates down and to keep them down, to
provide them incentives to rebuild our economy, to save, to invest in
America's future. I will stand by my word. Tonight I'm urging the
American people: Seize these new opportunities to produce, to save, to
invest, and together we'll make this economy a mighty engine of freedom,
hope, and prosperity again.

Now, the budget deficit this year will exceed our earlier expectations.
The recession did that. It lowered revenues and increased costs. To some
extent, we're also victims of our own success. We've brought inflation
down faster than we thought we could, and in doing this, we've deprived
government of those hidden revenues that occur when inflation pushes
people into higher income tax brackets. And the continued high interest
rates last year cost the government about $5 billion more than
anticipated.

We must cut out more nonessential government spending and rout out more
waste, and we will continue our efforts to reduce the number of
employees in the Federal work force by 75,000.

The budget plan I submit to you on February 8th will realize major
savings by dismantling the Departments of Energy and Education and by
eliminating ineffective subsidies for business. We'll continue to
redirect our resources to our two highest budget priorities--a strong
national defense to keep America free and at peace and a reliable safety
net of social programs for those who have contributed and those who are
in need.

Contrary to some of the wild charges you may have heard, this
administration has not and will not turn its back on America's elderly
or America's poor. Under the new budget, funding for social insurance
programs will be more than double the amount spent only 6 years ago. But
it would be foolish to pretend that these or any programs cannot be made
more efficient and economical.

The entitlement programs that make up our safety net for the truly needy
have worthy goals and many deserving recipients. We will protect them.
But there's only one way to see to it that these programs really help
those whom they were designed to help. And that is to bring their
spiraling costs under control.

Today we face the absurd situation of a Federal budget with
three-quarters of its expenditures routinely referred to as
"uncontrollable." And a large part of this goes to entitlement programs.

Committee after committee of this Congress has heard witness after
witness describe many of these programs as poorly administered and rife
with waste and fraud. Virtually every American who shops in a local
supermarket is aware of the daily abuses that take place in the food
stamp program, which has grown by 16,000 percent in the last 15 years.
Another example is Medicare and Medicaid--programs with worthy goals but
whose costs have increased from 11.2 billion to almost 60 billion, more
than 5 times as much, in just 10 years.

Waste and fraud are serious problems. Back in 1980 Federal investigators
testified before one of your committees that "corruption has permeated
virtually every area of the Medicare and Medicaid health care industry."
One official said many of the people who are cheating the system were
"very confident that nothing was going to happen to them." Well,
something is going to happen. Not only the taxpayers are defrauded; the
people with real dependency on these programs are deprived of what they
need, because available resources are going not to the needy, but to the
greedy.

The time has come to control the uncontrollable. In August we made a
start. I signed a bill to reduce the growth of these programs by $44
billion over the next 3 years while at the same time preserving
essential services for the truly needy. Shortly you will receive from me
a message on further reforms we intend to install--some new, but others
long recommended by your own congressional committees. I ask you to help
make these savings for the American taxpayer.

The savings we propose in entitlement programs will total some $63
billion over 4 Years and will, without affecting social t security, go a
long way toward bringing Federal spending under control.

But don't be fooled by those who proclaim that spending cuts will
deprive the elderly, the needy, and the helpless. The. Federal
Government will still subsidize 95 million meals every day. That's one
out of seven of all the meals served in America. Head Start, senior
nutrition programs, and child welfare programs will not be cut from the
levels we proposed last year. More than one-half billion dollars has
been proposed for minority business assistance. And research at the
National Institute of Health will be increased by over $100 million.
While meeting all these needs, we intend to plug unwarranted tax
loopholes and strengthen the law which requires all large corporations
to pay a minimum tax.

I am confident the economic program we've put into operation will
protect the needy while it triggers a recovery that will benefit all
Americans. It will stimulate the economy, result in increased savings
and provide capital for expansion, mortgages for homebuilding, and jobs
for the unemployed.

Now that the essentials of that program are in place, our next major
undertaking must be a program--just as bold, just as innovative--to make
government again accountable to the people, to make our system of
federalism work again.

Our citizens feel they've lost control of even the most basic decisions
made about the essential services of government, such as schools,
welfare, roads, and even garbage collection. And they're right. A maze
of interlocking jurisdictions and levels of government confronts average
citizens in trying to solve even the simplest of problems. They don't
know where to turn for answers, who to hold accountable, who to praise,
who to blame, who to vote for or against. The main reason for this is
the overpowering growth of Federal grants-in-aid programs during the
past few decades.

In 1960 the Federal Government had 132 categorical grant programs,
costing $7 billion. When I took office, there were approximately 500,
costing nearly a hundred billion dollars--13 programs for energy, 36 for
pollution control, 66 for social services, 90 for education. And here in
the Congress, it takes at least 166 committees just to try to keep track
of them.

You know and I know that neither the President nor the Congress can
properly oversee this jungle of grants-in-aid; indeed, the growth of
these grants has led to the distortion in the vital functions of
government. As one Democratic Governor put it recently: The National
Government should be worrying about "arms control, not potholes."

The growth in these Federal programs has--in the words of one
intergovernmental commission--made the Federal Government "more
pervasive, more intrusive, more unmanageable, more ineffective and
costly, and above all, more (un) accountable." Let's solve this problem
with a single, bold stroke: the return of some $47 billion in Federal
programs to State and local government, together with the means to
finance them and a transition period of nearly 10 years to avoid
unnecessary disruption.

I will shortly send this Congress a message describing this program. I
want to emphasize, however, that its full details will have been worked
out only after close consultation with congressional, State, and local
officials.

Starting in fiscal 1984, the Federal Government will assume full
responsibility for the cost of the rapidly growing Medicaid program to
go along with its existing responsibility for Medicare. As part of a
financially equal swap, the States will simultaneously take full
responsibility for Aid to Families with Dependent Children and food
stamps. This will make welfare less costly and more responsive to
genuine need, because it'll be designed and administered closer to the
grass roots and the people it serves.

In 1984 the Federal Government will apply the full proceeds from certain
excise taxes to a grass roots trust fund that will belong in fair shares
to the 50 States. The total amount flowing into this fund will be $28
billion a year. Over the next 4 years the States can use this money in
either of two ways. If they want to continue receiving Federal grants in
such areas as transportation, education, and social services, they can
use their trust fund money to pay for the grants. Or to the extent they
choose to forgo the Federal grant programs, they can use their trust
fund money on their own for those or other purposes. There will be a
mandatory pass-through of part of these funds to local governments.

By 1988 the States will be in complete control of over 40 Federal grant
programs. The trust fund will start to phase out, eventually to
disappear, and the excise taxes will be turned over to the States. They
can then preserve, lower, or raise taxes on their own and fund and
manage these programs as they see fit.

In a single stroke we will be accomplishing a realignment that will end
cumbersome administration and spiraling costs at the Federal level while
we ensure these programs will be more responsive to both the people
they're meant to help and the people who pay for them.

Hand in hand with this program to strengthen the discretion and
flexibility of State and local governments, we're proposing legislation
for an experimental effort to improve and develop our depressed urban
areas in the 1980's and '90's. This legislation will permit States and
localities to apply to the Federal Government for designation as urban
enterprise zones. A broad range of special economic incentives in the
zones will help attract new business, new jobs, new opportunity to
America's inner cities and rural towns. Some will say our mission is to
save free enterprise. Well, I say we must free enterprise so that
together we can save America.

Some will also say our States and local communities are not up to the
challenge of a new and creative partnership. Well, that might have been
true 20 years ago before reforms like reapportionment and the Voting
Rights Act, the 10-year extension of which I strongly support. It's no
longer true today. This administration has faith in State and local
governments and the constitutional balance envisioned by the Founding
Fathers. We also believe in the integrity, decency, and sound, good
sense of grass roots Americans.

Our faith in the American people is reflected in another major endeavor.
Our private sector initiatives task force is seeking out successful
community models of school, church, business, union, foundation, and
civic programs that help community needs. Such groups are almost
invariably far more efficient than government in running social
programs.

We're not asking them to replace discarded and often discredited
government programs dollar for dollar, service for service. We just want
to help them perform the good works they choose and help others to
profit by their example. Three hundred and eighty-five thousand
corporations and private organizations are already working on social
programs ranging from drug rehabilitation to job training, and thousands
more Americans have written us asking how they can help. The volunteer
spirit is still alive and well in America.

Our nation's long journey towards civil rights for all our
citizens--once a source of discord, now a source of pride--must continue
with no backsliding or slowing down. We must and shall see that those
basic laws that guarantee equal rights are preserved and, when
necessary, strengthened.

Our concern for equal rights for women is firm and unshakable. We
launched a new Task Force on Legal Equity for Women and a Fifty States
Project that will examine State laws for discriminatory language. And
for the first time in our history, a woman sits on the highest court in
the land.

So, too, the problem of crime--one as real and deadly serious as any in
America today. It demands that we seek transformation of our legal
system, which overly protects the rights of criminals while it leaves
society and the innocent victims of crime without justice.

We look forward to the enactment of a responsible clean air act to
increase jobs while continuing to improve the quality of our air. We're
encouraged by the bipartisan initiative of the House and are hopeful of
further progress as the Senate continues its deliberations.

So far, I've concentrated largely, now, on domestic matters. To view the
state of the Union in perspective, we must not ignore the rest of the
world. There isn't time tonight for a lengthy treatment of social--or
foreign policy, I should say, a subject I intend to address in detail in
the near future. A few words, however, are in order on the progress
we've made over the past year, reestablishing respect for our nation
around the globe and some of the challenges and goals that we will
approach in the year ahead.

At Ottawa and Cancun, I met with leaders of the major industrial powers
and developing nations. Now, some of those I met with were a little
surprised that I didn't apologize for America's wealth. Instead, I spoke
of the strength of the free marketplace system and how that system could
help them realize their aspirations for economic development and
political freedom. I believe lasting friendships were made, and the
foundation was laid for future cooperation.

In the vital region of the Caribbean Basin, we're developing a program
of aid, trade, and investment incentives to promote self-sustaining
growth and a better, more secure life for our neighbors to the south.
Toward those who would export terrorism and subversion in the Caribbean
and elsewhere, especially Cuba and Libya, we will act with firmness.

Our foreign policy is a policy of strength, fairness, and balance. By
restoring America's military credibility, by pursuing peace at the
negotiating table wherever both sides are willing to sit down in good
faith, and by regaining the respect of America's allies and adversaries
alike, we have strengthened our country's position as a force for peace
and progress in the world.

When action is called for, we're taking it. Our sanctions against the
military dictatorship that has attempted to crush human rights in
Poland--and against the Soviet regime behind that military
dictatorship--clearly demonstrated to the world that America will not
conduct "business as usual" with the forces of oppression. If the events
in Poland continue to deteriorate, further measures will follow.

Now, let me also note that private American groups have taken the lead
in making January 30th a day of solidarity with the people of Poland.
So, too, the European Parliament has called for March 21st to be an
international day of support for Afghanistan. Well, I urge all
peace-loving peoples to join together on those days, to raise their
voices, to speak and pray for freedom.

Meanwhile, we're working for reduction of arms and military activities,
as I announced in my address to the Nation last November 18th. We have
proposed to the Soviet Union a far-reaching agenda for mutual reduction
of military forces and have already initiated negotiations with them in
Geneva on intermediate-range nuclear forces. In those talks it is
essential that we negotiate from a position of strength. There must be a
real incentive for the Soviets to take these talks seriously. This
requires that we rebuild our defenses.

In the last decade, while we sought the moderation of Soviet power
through a process of restraint and accommodation, the Soviets engaged in
an unrelenting buildup of their military forces. The protection of our
national security has required that we undertake a substantial program
to enhance our military forces.

We have not neglected to strengthen our traditional alliances in Europe
and Asia, or to develop key relationships with our partners in the
Middle East and other countries. Building a more peaceful world requires
a sound strategy and the national resolve to back it up. When radical
forces threaten our friends, when economic misfortune creates conditions
of instability, when strategically vital parts of the world fall under
the shadow of Soviet power, our response can make the difference between
peaceful change or disorder and violence. That's why we've laid such
stress not only on our own defense but on our vital foreign assistance
program. Your recent passage of the Foreign Assistance Act sent a signal
to the world that America will not shrink from making the investments
necessary for both peace and security. Our foreign policy must be rooted
in realism, not naivete or self-delusion.

A recognition of what the Soviet empire is about is the starting point.
Winston Churchill, in negotiating with the Soviets, observed that they
respect only strength and resolve in their dealings with other nations.
That's why we've moved to reconstruct our national defenses. We intend
to keep the peace. We will also keep our freedom.

We have made pledges of a new frankness in our public statements and
worldwide broadcasts. In the face of a climate of falsehood and
misinformation, we've promised the world a season of truth--the truth of
our great civilized ideas: individual liberty, representative
government, the rule of law under God. We've never needed walls or
minefields or barbed wire to keep our people in. Nor do we declare
martial law to keep our people from voting for the kind of government
they want.

Yes, we have our problems; yes, we're in a time of recession. And it's
true, there's no quick fix, as I said, to instantly end the tragic pain
of unemployment. But we will end it. The process has already begun, and
we'll see its effect as the year goes on.

We speak with pride and admiration of that little band of Americans who
overcame insuperable odds to set this nation on course 200 years ago.
But our glory didn't end with them. Americans ever since have emulated
their deeds.

We don't have to turn to our history books for heroes. They're all
around us. One who sits among you here tonight epitomized that heroism
at the end of the longest imprisonment ever inflicted on men of our
Armed Forces. Who will ever forget that night when we waited for
television to bring us the scene of that first plane landing at Clark
Field in the Philippines, bringing our POW's home? The plane door opened
and Jeremiah Denton came slowly down the ramp. He caught sight of our
flag, saluted it, said, "God bless America," and then thanked us for
bringing him home.

Just 2 weeks ago, in the midst of a terrible tragedy on the Potomac, we
saw again the spirit of American heroism at its finest--the heroism of
dedicated rescue workers saving crash victims from icy waters. And we
saw the heroism of one of our young government employees, Lenny Skutnik,
who, when he saw a woman lose her grip on the helicopter line, dived
into the water and dragged her to safety.

And then there are countless, quiet, everyday heroes of American who
sacrifice long and hard so their children will know a better life than
they've known; church and civic volunteers who help to feed, clothe,
nurse, and teach the needy; millions who've made our nation and our
nation's destiny so very special--unsung heroes who may not have
realized their own dreams themselves but then who reinvest those dreams
in their children. Don't let anyone tell you that America's best days
are behind her, that the American spirit has been vanquished. We've seen
it triumph too often in our lives to stop believing in it now.

A hundred and twenty years ago, the greatest of all our Presidents
delivered his second State of the Union message in this Chamber. "We
cannot escape history," Abraham Lincoln warned. "We of this Congress and
this administration will be remembered in spite of ourselves." The
"trial through which we pass will light us down, in honor or dishonor,
to the latest (last) generation."

Well, that President and that Congress did not fail the American people.
Together they weathered the storm and preserved the Union. Let it be
said of us that we, too, did not fail; that we, too, worked together to
bring America through difficult times. Let us so conduct ourselves that
two centuries from now, another Congress and another President, meeting
in this Chamber as we are meeting, will speak of us with pride, saying
that we met the test and preserved for them in their day the sacred
flame of liberty--this last, best hope of man on Earth.

God bless you, and thank you.

NOTE: The President spoke at 9 p.m. in the House Chamber at the Capitol.
He was introduced by Thomas P. O'Neill, Jr., Speaker of the House of
Representatives. The address was broadcast live on nationwide radio and
television.

***

State of the Union Address
Ronald Reagan
January 25, 1983

Mr. Speaker, Mr. President, distinguished Members of the Congress,
honored guests, and fellow citizens:

This solemn occasion marks the 196th time that a President of the United
States has reported on the State of the Union since George Washington
first did so in 1790. That's a lot of reports, but there's no shortage
of new things to say about the State of the Union. The very key to our
success has been our ability, foremost among nations, to preserve our
lasting values by making change work for us rather than against us.

I would like to talk with you this evening about what we can do
together--not as Republicans and Democrats, but as Americans--to make
tomorrow's America happy and prosperous at home, strong and respected
abroad, and at peace in the world.

As we gather here tonight, the state of our Union is strong, but our
economy is troubled. For too many of our fellow citizens--farmers, steel
and auto workers, lumbermen, black teenagers, working mothers--this is a
painful period. We must all do everything in our power to bring their
ordeal to an end. It has fallen to us, in our time, to undo damage that
was a long time in the making, and to begin the hard but necessary task
of building a better future for ourselves and our children.

We have a long way to go, but thanks to the courage, patience, and
strength of our people, America is on the mend.

But let me give you just one important reason why I believe this--it
involves many members of this body.

Just 10 days ago, after months of debate and deadlock, the bipartisan
Commission on Social Security accomplished the seemingly impossible.
Social security, as some of us had warned for so long, faced disaster.
I, myself, have been talking about this problem for almost 30 years. As
1983 began, the system stood on the brink of bankruptcy, a double victim
of our economic ills. First, a decade of rampant inflation drained its
reserves as we tried to protect beneficiaries from the spiraling cost of
living. Then the recession and the sudden end of inflation withered the
expanding wage base and increasing revenues the system needs to support
the 36 million Americans who depend on it.

When the Speaker of the House, the Senate majority leader, and I
performed the bipartisan--or formed the bipartisan Commission on Social
Security, pundits and experts predicted that party divisions and
conflicting interests would prevent the Commission from agreeing on a
plan to save social security. Well, sometimes, even here in Washington,
the cynics are wrong. Through compromise and cooperation, the members of
the Commission overcame their differences and achieved a fair, workable
plan. They proved that, when it comes to the national welfare, Americans
can still pull together for the common good.

Tonight, I'm especially pleased to join with the Speaker and the Senate
majority leader in urging the Congress to enact this plan by Easter.

There are elements in it, of course, that none of us prefers, but taken
together it performs a package that all of us can support. It asks for
some sacrifice by all--the self-employed, beneficiaries, workers,
government employees, and the better-off among the retired--but it
imposes an undue burden on none. And, in supporting it, we keep an
important pledge to the American people: The integrity of the social
security system will be preserved, and no one's payments will be
reduced.

The Commission's plan will do the job; indeed, it must do the job. We
owe it to today's older Americans and today's younger workers. So,
before we go any further, I ask you to join with me in saluting the
members of the Commission who are here tonight and Senate Majority
Leader Howard Baker and Speaker Tip O'Neill for a job well done. I hope
and pray the bipartisan spirit that guided you in this endeavor will
inspire all of us as we face the challenges of the year ahead.

Nearly half a century ago, in this Chamber, another American President,
Franklin Delano Roosevelt, in his second State of the Union message,
urged America to look to the future, to meet the challenge of change and
the need for leadership that looks forward, not backward.

"Throughout the world," he said, "change is the order of the day. In
every nation economic problems long in the making have brought crises to
(of) many kinds for which the masters of old practice and theory were
unprepared." He also reminded us that "the future lies with those wise
political leaders who realize that the great public is interested more
in Government than in politics."

So, let us, in these next 2 years--men and women of both parties, every
political shade--concentrate on the long-range, bipartisan
responsibilities of government, not the short-range or short-term
temptations of partisan politics.

The problems we inherited were far worse than most inside and out of
government had expected; the recession was deeper than most inside and
out of government had predicted. Curing those problems has taken more
time and a higher toll than any of us wanted. Unemployment is far too
high. Projected Federal spending--if government refuses to tighten its
own belt--will also be far too high and could weaken and shorten the
economic recovery now underway.

This recovery will bring with it a revival of economic confidence and
spending for consumer items and capital goods--the stimulus we need to
restart our stalled economic engines. The American people have already
stepped up their rate of saving, assuring that the funds needed to
modernize our factories and improve our technology will once again flow
to business and industry.

The inflationary expectations that led to a 21 1/2-percent interest
prime rate and soaring mortgage rates 2 years ago are now reduced by
almost half. Leaders have started to realize that double-digit inflation
is no longer a way of life. I misspoke there. I should have said
"lenders."

So, interest rates have tumbled, paving the way for recovery in vital
industries like housing and autos.

The early evidence of that recovery has started coming in. Housing
starts for the fourth quarter of 1982 were up 45 percent from a year
ago, and housing permits, a sure indicator of future growth, were up a
whopping 60 percent.

We're witnessing an upsurge of productivity and impressive evidence that
American industry will once again become competitive in markets at home
and abroad, ensuring more jobs and better incomes for the Nation's work
force. But our confidence must also be tempered by realism and patience.
Quick fixes and artificial stimulants repeatedly applied over decades
are what brought us the inflationary disorders that we've now paid such
a heavy price to cure.

The permanent recovery in employment, production, and investment we seek
won't come in a sharp, short spurt. It'll build carefully and steadily
in the months and years ahead. In the meantime, the challenge of
government is to identify the things that we can do now to ease the
massive economic transition for the American people.

The Federal budget is both a symptom and a cause of our economic
problems. Unless we reduce the dangerous growth rate in government
spending, we could face the prospect of sluggish economic growth into
the indefinite future. Failure to cope with this problem now could mean
as much as a trillion dollars more in national debt in the next 4 years
alone. That would average $4,300 in additional debt for every man,
woman, child, and baby in our nation.

To assure a sustained recovery, we must continue getting runaway
spending under control to bring those deficits down. If we don't, the
recovery will be too short, unemployment will remain too high, and we
will leave an unconscionable burden of national debt for our children.
That we must not do.

Let's be clear about where the deficit problem comes from. Contrary to
the drumbeat we've been hearing for the last few months, the deficits we
face are not rooted in defense spending. Taken as a percentage of the
gross national product, our defense spending happens to be only about
four-fifths of what it was in 1970. Nor is the deficit, as some would
have it, rooted in tax cuts. Even with our tax cuts, taxes as a fraction
of gross national product remain about the same as they were in 1970.
The fact is, our deficits come from the uncontrolled growth of the
budget for domestic spending.

During the 1970's, the share of our national income devoted to this
domestic spending increased by more than 60 percent, from 10 cents out
of every dollar produced by the American people to 16 cents. In spite of
all our economies and efficiencies, and without adding any new programs,
basic, necessary domestic spending provided for in this year's budget
will grow to almost a trillion dollars over the next 5 years.

The deficit problem is a clear and present danger to the basic health of
our Republic. We need a plan to overcome this danger--a plan based on
these principles. It must be bipartisan. Conquering the deficits and
putting the Government's house in order will require the best effort of
all of us. It must be fair. Just as all will share in the benefits that
will come from recovery, all would share fairly in the burden of
transition. It must be prudent. The strength of our national defense
must be restored so that we can pursue prosperity and peace and freedom
while maintaining our commitment to the truly needy. And finally, it
must be realistic. We can't rely on hope alone.

With these guiding principles in mind, let me outline a four-part plan
to increase economic growth and reduce deficits.

First, in my budget message, I will recommend a Federal spending freeze.
I know this is strong medicine, but so far, we have only cut the rate of
increase in Federal spending. The Government has continued to spend more
money each year, though not as much more as it did in the past. Taken as
a whole, the budget I'm proposing for the fiscal year will increase no
more than the rate of inflation. In other words, the Federal Government
will hold the line on real spending. Now, that's far less than many
American families have had to do in these difficult times.

I will request that the proposed 6-month freeze in cost-of-living
adjustments recommended by the bipartisan Social Security Commission be
applied to other government-related retirement programs. I will, also,
propose a 1-year freeze on a broad range of domestic spending programs,
and for Federal civilian and military pay and pension programs. And let
me say right here, I'm sorry, with regard to the military, in asking
that of them, because for so many years they have been so far behind and
so low in reward for what the men and women in uniform are doing. But
I'm sure they will understand that this must be across the board and
fair.

Second, I will ask the Congress to adopt specific measures to control
the growth of the so-called uncontrollable spending programs. These are
the automatic spending programs, such as food stamps, that cannot be
simply frozen and that have grown by over 400 percent since 1970. They
are the largest single cause of the built-in or structural deficit
problem. Our standard here will be fairness, ensuring that the
taxpayers' hard-earned dollars go only to the truly needy; that none of
them are turned away, but that fraud and waste are stamped out. And I'm
sorry to say, there's a lot of it out there. In the food stamp program
alone, last year, we identified almost $1.1 billion in overpayments. The
taxpayers aren't the only victims of this kind of abuse. The truly needy
suffer as funds intended for them are taken not by the needy, but by the
greedy. For everyone's sake, we must put an end to such waste and
corruption.

Third, I will adjust our program to restore America's defenses by
proposing $55 billion in defense savings over the next 5 years. These
are savings recommended to me by the Secretary of Defense, who has
assured me they can be safely achieved and will not diminish our ability
to negotiate arms reductions or endanger America's security. We will not
gamble with our national survival.

And fourth, because we must ensure reduction and eventual elimination of
deficits over the next several years, I will propose a standby tax,
limited to no more than 1 percent of the gross national product, to
start in fiscal 1986. It would last no more than 3 years, and it would
start only if the Congress has first approved our spending freeze and
budget control program. And there are several other conditions also that
must be met, all of them in order for this program to be triggered.

Now, you could say that this is an insurance policy for the future, a
remedy that will be at hand if needed but only resorted to if absolutely
necessary. In the meantime, we'll continue to study ways to simplify the
tax code and make it more fair for all Americans. This is a goal that
every American who's ever struggled with a tax form can understand.

At the same time, however, I will oppose any efforts to undo the basic
tax reforms that we've already enacted, including the 10-percent tax
break coming to taxpayers this July and the tax indexing which will
protect all Americans from inflationary bracket creep in the years
ahead.

Now, I realize that this four-part plan is easier to describe than it
will be to enact. But the looming deficits that hang over us and over
America's future must be reduced. The path I've outlined is fair,
balanced, and realistic. If enacted, it will ensure a steady decline in
deficits, aiming toward a balanced budget by the end of the decade. It's
the only path that will lead to a strong, sustained recovery. Let us
follow that path together.

No domestic challenge is more crucial than providing stable, permanent
jobs for all Americans who want to work. The recovery program will
provide jobs for most, but others will need special help and training
for new skills. Shortly, I will submit to the Congress the Employment
Act of 1983, designed to get at the special problems of the long-term
unemployed, as well as young people trying to enter the job market. I'll
propose extending unemployment benefits, including special incentives to
employers who hire the long-term unemployed, providing programs for
displaced workers, and helping federally funded and State-administered
unemployment insurance programs provide workers with training and
relocation assistance. Finally, our proposal will include new incentives
for summer youth employment to help young people get a start in the job
market.

We must offer both short-term help and long-term hope for our
unemployed. I hope we can work together on this. I hope we can work
together as we did last year in enacting the landmark Job Training
Partnership Act. Regulatory reform legislation, a responsible clean air
act, and passage of enterprise zone legislation will also create new
incentives for jobs and opportunity.

One of out of every five jobs in our country depends on trade. So, I
will propose a broader strategy in the field of international trade--one
that increases the openness of our trading system and is fairer to
America's farmers and workers in the world marketplace. We must have
adequate export financing to sell American products overseas. I will ask
for new negotiating authority to remove barriers and to get more of our
products into foreign markets. We must strengthen the organization of
our trade agencies and make changes in our domestic laws and
international trade policy to promote free trade and the increased flow
of American goods, services, and investments.

Our trade position can also be improved by making our port system more
efficient. Better, more active harbors translate into stable jobs in our
coalfields, railroads, trucking industry, and ports. After 2 years of
debate, it's time for us to get together and enact a port modernization
bill.

Education, training, and retraining are fundamental to our success as
are research and development and productivity. Labor, management, and
government at all levels can and must participate in improving these
tools of growth. Tax policy, regulatory practices, and government
programs all need constant reevaluation in terms of our competitiveness.
Every American has a role and a stake in international trade.

We Americans are still the technological leaders in most fields. We must
keep that edge, and to do so we need to begin renewing the
basics--starting with our educational system. While we grew complacent,
others have acted. Japan, with a population only about half the size of
ours, graduates from its universities more engineers than we do. If a
child doesn't receive adequate math and science teaching by the age of
16, he or she has lost the chance to be a scientist or an engineer. We
must join together--parents, teachers, grass roots groups, organized
labor, and the business community--to revitalize American education by
setting a standard of excellence.

In 1983 we seek four major education goals: a quality education
initiative to encourage a substantial upgrading of math and science
instruction through block grants to the States; establishment of
education savings accounts that will give middle and lower-income
families an incentive to save for their children's college education
and, at the same time, encourage a real increase in savings for economic
growth; passage of tuition tax credits for parents who want to send
their children to private or religiously affiliated schools; a
constitutional amendment to permit voluntary school prayer. God should
never have been expelled from America's classrooms in the first place.

Our commitment to fairness means that we must assure legal and economic
equity for women, and eliminate, once and for all, all traces of unjust
discrimination against women from the United States Code. We will not
tolerate wage discrimination based on sex, and we intend to strengthen
enforcement of child support laws to ensure that single parents, most of
whom are women, do not suffer unfair financial hardship. We will also
take action to remedy inequities in pensions. These initiatives will be
joined by others to continue our efforts to promote equity for women.

Also in the area of fairness and equity, we will ask for extension of
the Civil Rights Commission, which is due to expire this year. The
Commission is an important part of the ongoing struggle for justice in
America, and we strongly support its reauthorization. Effective
enforcement of our nation's fair housing laws is also essential to
ensuring equal opportunity. In the year ahead, we'll work to strengthen
enforcement of fair housing laws for all Americans.

The time has also come for major reform of our criminal justice statutes
and acceleration of the drive against organized crime and drug
trafficking. It's high time that we make our cities safe again. This
administration hereby declares an all-out war on big-time organized
crime and the drug racketeers who are poisoning our young people. We
will also implement recommendations of our Task Force on Victims of
Crime, which will report to me this week.

American agriculture, the envy of the world, has become the victim of
its own successes. With one farmer now producing enough food to feed
himself and 77 other people, America is confronted with record surplus
crops and commodity prices below the cost of production. We must strive,
through innovations like the payment-in-kind crop swap approach and an
aggressive export policy, to restore health and vitality to rural
America. Meanwhile, I have instructed the Department of Agriculture to
work individually with farmers with debt problems to help them through
these tough times.

Over the past year, our Task Force on Private Sector Initiatives has
successfully forged a working partnership involving leaders of business,
labor, education, and government to address the training needs of
American workers. Thanks to the Task Force, private sector initiatives
are now underway in all 50 States of the Union, and thousands of working
people have been helped in making the shift from dead-end jobs and
low-demand skills to the growth areas of high technology and the service
economy. Additionally, a major effort will be focused on encouraging the
expansion of private community child care. The new advisory council on
private sector initiatives will carry on and extend this vital work of
encouraging private initiative in 1983.

In the coming year, we will also act to improve the quality of life for
Americans by curbing the skyrocketing cost of health care that is
becoming an unbearable financial burden for so many. And we will submit
legislation to provide catastrophic illness insurance coverage for older
Americans.

I will also shortly submit a comprehensive federalism proposal that will
continue our efforts to restore to States and local governments their
roles as dynamic laboratories of change in a creative society.

During the next several weeks, I will send to the Congress a series of
detailed proposals on these and other topics and look forward to working
with you on the development of these initiatives.

So far, now, I've concentrated mainly on the problems posed by the
future. But in almost every home and workplace in America, we're already
witnessing reason for great hope--the first flowering of the manmade
miracles of high technology, a field pioneered and still led by our
country.

To many of us now, computers, silicon chips, data processing,
cybernetics, and all the other innovations of the dawning high
technology age are as mystifying as the workings of the combustion
engine must have been when that first Model T rattled down Main Street,
U.S.A. But as surely as America's pioneer spirit made us the industrial
giant of the 20th century, the same pioneer spirit today is opening up
on another vast front of opportunity, the frontier of high technology.

In conquering the frontier we cannot write off our traditional
industries, but we must develop the skills and industries that will make
us a pioneer of tomorrow. This administration is committed to keeping
America the technological leader of the world now and into the 21st
century.

But let us turn briefly to the international arena. America's leadership
in the world came to us because of our own strength and because of the
values which guide us as a society: free elections, a free press,
freedom of religious choice, free trade unions, and above all, freedom
for the individual and rejection of the arbitrary power of the state.
These values are the bedrock of our strength. They unite us in a
stewardship of peace and freedom with our allies and friends in NATO, in
Asia, in Latin America, and elsewhere. They are also the values which in
the recent past some among us had begun to doubt and view with a cynical
eye.

Fortunately, we and our allies have rediscovered the strength of our
common democratic values, and we're applying them as a cornerstone of a
comprehensive strategy for peace with freedom. In London last year, I
announced the commitment of the United States to developing the
infrastructure of democracy throughout the world. We intend to pursue
this democratic initiative vigorously. The future belongs not to
governments and ideologies which oppress their peoples, but to
democratic systems of self-government which encourage individual
initiative and guarantee personal freedom.

But our strategy for peace with freedom must also be based on
strength--economic strength and military strength. A strong American
economy is essential to the well-being and security of our friends and
allies. The restoration of a strong, healthy American economy has been
and remains one of the central pillars of our foreign policy. The
progress I've been able to report to you tonight will, I know, be as
warmly welcomed by the rest of the world as it is by the American
people.

We must also recognize that our own economic well-being is inextricably
linked to the world economy. We export over 20 percent of our industrial
production, and 40 percent of our farmland produces for export. We will
continue to work closely with the industrialized democracies of Europe
and Japan and with the International Monetary Fund to ensure it has
adequate resources to help bring the world economy back to strong,
noninflationary growth.

As the leader of the West and as a country that has become great and
rich because of economic freedom, America must be an unrelenting
advocate of free trade. As some nations are tempted to turn to
protectionism, our strategy cannot be to follow them, but to lead the
way toward freer trade. To this end, in May of this year America will
host an economic summit meeting in Williamsburg, Virginia.

As we begin our third year, we have put in place a defense program that
redeems the neglect of the past decade. We have developed a realistic
military strategy to deter threats to peace and to protect freedom if
deterrence fails. Our Armed Forces are finally properly paid; after
years of neglect are well trained and becoming better equipped and
supplied. And the American uniform is once again worn with pride. Most
of the major systems needed for modernizing our defenses are already
underway, and we will be addressing one key system, the MX missile, in
consultation with the Congress in a few months.

America's foreign policy is once again based on bipartisanship, on
realism, strength, full partnership, in consultation with our allies,
and constructive negotiation with potential adversaries. From the Middle
East to southern Africa to Geneva, American diplomats are taking the
initiative to make peace and lower arms levels. We should be proud of
our role as peacemakers.

In the Middle East last year, the United States played the major role in
ending the tragic fighting in Lebanon and negotiated the withdrawal of
the PLO from Beirut.

Last September, I outlined principles to carry on the peace process
begun so promisingly at Camp David. All the people of the Middle East
should know that in the year ahead we will not flag in our efforts to
build on that foundation to bring them the blessings of peace.

In Central America and the Caribbean Basin, we are likewise engaged in a
partnership for peace, prosperity, and democracy. Final passage of the
remaining portions of our Caribbean Basin Initiative, which passed the
House last year, is one of this administration's top legislative
priorities for 1983.

The security and economic assistance policies of this administration in
Latin America and elsewhere are based on realism and represent a
critical investment in the future of the human race. This undertaking is
a joint responsibility of the executive and legislative branches, and
I'm counting on the cooperation and statesmanship of the Congress to
help us meet this essential foreign policy goal.

At the heart of our strategy for peace is our relationship with the
Soviet Union. The past year saw a change in Soviet leadership. We're
prepared for a positive change in Soviet-American relations. But the
Soviet Union must show by deeds as well as words a sincere commitment to
respect the rights and sovereignty of the family of nations. Responsible
members of the world community do not threaten or invade their
neighbors. And they restrain their allies from aggression.

For our part, we're vigorously pursuing arms reduction negotiations with
the Soviet Union. Supported by our allies, we've put forward draft
agreements proposing significant weapon reductions to equal and
verifiable lower levels. We insist on an equal balance of forces. And
given the overwhelming evidence of Soviet violations of international
treaties concerning chemical and biological weapons, we also insist that
any agreement we sign can and will be verifiable.

In the case of intermediate-range nuclear forces, we have proposed the
complete elimination of the entire class of land-based missiles. We're
also prepared to carefully explore serious Soviet proposals. At the same
time, let me emphasize that allied steadfastness remains a key to
achieving arms reductions.

With firmness and dedication, we'll continue to negotiate. Deep down,
the Soviets must know it's in their interest as well as ours to prevent
a wasteful arms race. And once they recognize our unshakable resolve to
maintain adequate deterrence, they will have every reason to join us in
the search for greater security and major arms reductions. When that
moment comes--and I'm confident that it will--we will have taken an
important step toward a more peaceful future for all the world's people.

A very wise man, Bernard Baruch, once said that America has never
forgotten the nobler things that brought her into being and that light
her path. Our country is a special place, because we Americans have
always been sustained, through good times and bad, by a noble vision--a
vision not only of what the world around us is today but what we as a
free people can make it be tomorrow.

We're realists; we solve our problems instead of ignoring them, no
matter how loud the chorus of despair around us. But we're also
idealists, for it was an ideal that brought our ancestors to these
shores from every corner of the world.

Right now we need both realism and idealism. Millions of our neighbors
are without work. It is up to us to see they aren't without hope. This
is a task for all of us. And may I say, Americans have rallied to this
cause, proving once again that we are the most generous people on Earth.

We who are in government must take the lead in restoring the economy.
And here all that time, I thought you were reading the paper.

The single thing--the single thing that can start the wheels of industry
turning again is further reduction of interest rates. Just another 1 or
2 points can mean tens of thousands of jobs.

Right now, with inflation as low as it is, 3.9 percent, there is room
for interest rates to come down. Only fear prevents their reduction. A
lender, as we know, must charge an interest rate that recovers the
depreciated value of the dollars loaned. And that depreciation is, of
course, the amount of inflation. Today, interest rates are based on
fear--fear that government will resort to measures, as it has in the
past, that will send inflation zooming again.

We who serve here in this Capital must erase that fear by making it
absolutely clear that we will not stop fighting inflation; that,
together, we will do only those things that will lead to lasting
economic growth.

Yes, the problems confronting us are large and forbidding. And,
certainly, no one can or should minimize the plight of millions of our
friends and neighbors who are living in the bleak emptiness of
unemployment. But we must and can give them good reason to be hopeful.

Back over the years, citizens like ourselves have gathered within these
walls when our nation was threatened; sometimes when its very existence
was at stake. Always with courage and common sense, they met the crises
of their time and lived to see a stronger, better, and more prosperous
country. The present situation is no worse and, in fact, is not as bad
as some of those they faced. Time and again, they proved that there is
nothing we Americans cannot achieve as free men and women.

Yes, we still have problems--plenty of them. But it's just plain
wrong--unjust to our country and unjust to our people--to let those
problems stand in the way of the most important truth of all: America is
on the mend.

We owe it to the unfortunate to be aware of their plight and to help
them in every way we can. No one can quarrel with that. We must and do
have compassion for all the victims of this economic crisis. But the big
story about America today is the way that millions of confident, caring
people--those extraordinary "ordinary" Americans who never make the
headlines and will never be interviewed--are laying the foundation, not
just for recovery from our present problems but for a better tomorrow
for all our people.

From coast to coast, on the job and in classrooms and laboratories, at
new construction sites and in churches and community groups, neighbors
are helping neighbors. And they've already begun the building, the
research, the work, and the giving that will make our country great
again.

I believe this, because I believe in them--in the strength of their
hearts and minds, in the commitment that each one of them brings to
their daily lives, be they high or humble. The challenge for us in
government is to be worthy of them--to make government a help, not a
hindrance to our people in the challenging but promising days ahead.

If we do that, if we care what our children and our children's children
will say of us, if we want them one day to be thankful for what we did
here in these temples of freedom, we will work together to make America
better for our having been here--not just in this year or this decade
but in the next century and beyond.

Thank you, and God bless you.

NOTE: The President spoke at 9:03 p.m. in the House Chamber of the
Capitol. He was introduced by Thomas P. O'Neill, Jr., Speaker of the
House of Representatives. The address was broadcast live on nationwide
radio and television.

***

State of the Union Address
Ronald Reagan
January 25, 1984

Mr. Speaker, Mr. President, distinguished Members of the Congress,
honored guests, and fellow citizens:

Once again, in keeping with time-honored tradition, I have come to
report to you on the state of the Union, and I'm pleased to report that
America is much improved, and there's good reason to believe that
improvement will continue through the days to come.

You and I have had some honest and open differences in the year past.
But they didn't keep us from joining hands in bipartisan cooperation to
stop a long decline that had drained this nation's spirit and eroded its
health. There is renewed energy and optimism throughout the land.
America is back, standing tall, looking to the eighties with courage,
confidence, and hope.

The problems we're overcoming are not the heritage of one person, party,
or even one generation. It's just the tendency of government to grow,
for practices and programs to become the nearest thing to eternal life
we'll ever see on this Earth. And there's always that well-intentioned
chorus of voices saying, "With a little more power and a little more
money, we could do so much for the people." For a time we forgot the
American dream isn't one of making government bigger; it's keeping faith
with the mighty spirit of free people under God.

As we came to the decade of the eighties, we faced the worst crisis in
our postwar history. In the seventies were years of rising problems and
falling confidence. There was a feeling government had grown beyond the
consent of the governed. Families felt helpless in the face of mounting
inflation and the indignity of taxes that reduced reward for hard work,
thrift, and risktaking. All this was overlaid by an evergrowing web of
rules and regulations.

On the international scene, we had an uncomfortable feeling that we'd
lost the respect of friend and foe. Some questioned whether we had the
will to defend peace and freedom. But America is too great for small
dreams. There was a hunger in the land for a spiritual revival; if you
will, a crusade for renewal. The American people said: Let us look to
the future with confidence, both at home and abroad. Let us give freedom
a chance.

Americans were ready to make a new beginning, and together we have done
it. We're confronting our problems one by one. Hope is alive tonight for
millions of young families and senior citizens set free from unfair tax
increases and crushing inflation. Inflation has been beaten down from
12.4 to 3.2 percent, and that's a great victory for all the people. The
prime rate has been cut almost in half, and we must work together to
bring it down even more.

Together, we passed the first across-the-board tax reduction for
everyone since the Kennedy tax cuts. Next year, tax rates will be
indexed so inflation can't push people into higher brackets when they
get cost-of-living pay raises. Government must never again use inflation
to profit at the people's expense.

Today a working family earning $25,000 has $1,100 more in purchasing
power than if tax and inflation rates were still at the 1980 levels.
Real after-tax income increased 5 percent last year. And economic
deregulation of key industries like transportation has offered more
chances--or choices, I should say, to consumers and new changes--or
chances for entrepreneurs and protecting safety. Tonight, we can report
and be proud of one of the best recoveries in decades. Send away the
handwringers and the doubting Thomases. Hope is reborn for couples
dreaming of owning homes and for risktakers with vision to create
tomorrow's opportunities.

The spirit of enterprise is sparked by the sunrise industries of
high-tech and by small business people with big ideas--people like
Barbara Proctor, who rose from a ghetto to build a multimillion-dollar
advertising agency in Chicago; Carlos Perez, a Cuban refugee, who turned
$27 and a dream into a successful importing business in Coral Gables,
Florida.

People like these are heroes for the eighties. They helped 4 million
Americans find jobs in 1983. More people are drawing paychecks tonight
than ever before. And Congress helps--or progress helps everyone--well,
Congress does too----everyone. In 1983 women filled 73 percent of all
the new jobs in managerial, professional, and technical fields.

But we know that many of our fellow countrymen are still out of work,
wondering what will come of their hopes and dreams. Can we love America
and not reach out to tell them: You are not forgotten; we will not rest
until each of you can reach as high as your God-given talents will take
you.

The heart of America is strong; it's good and true. The cynics were
wrong; America never was a sick society. We're seeing rededication to
bedrock values of faith, family, work, neighborhood, peace, and
freedom--values that help bring us together as one people, from the
youngest child to the most senior citizen.

The Congress deserves America's thanks for helping us restore pride and
credibility to our military. And I hope that you're as proud as I am of
the young men and women in uniform who have volunteered to man the
ramparts in defense of freedom and whose dedication, valor, and skill
increases so much our chance of living in a world at peace.

People everywhere hunger for peace and a better life. The tide of the
future is a freedom tide, and our struggle for democracy cannot and will
not be denied. This nation champions peace that enshrines liberty,
democratic rights, and dignity for every individual. America's new
strength, confidence, and purpose are carrying hope and opportunity far
from our shores. A world economic recovery is underway. It began here.

We've journeyed far, but we have much farther to go. Franklin Roosevelt
told us 50 years ago this month: "Civilization can not go back;
civilization must not stand still. We have undertaken new methods. It is
our task to perfect, to improve, to alter when necessary, but in all
cases to go forward."

It's time to move forward again, time for America to take freedom's next
step. Let us unite tonight behind four great goals to keep America free,
secure, and at peace in the eighties together.

We can ensure steady economic growth. We can develop America's next
frontier. We can strengthen our traditional values. And we can build a
meaningful peace to protect our loved ones and this shining star of
faith that has guided millions from tyranny to the safe harbor of
freedom, progress, and hope.

Doing these things will open wider the gates of opportunity, provide
greater security for all, with no barriers of bigotry or discrimination.

The key to a dynamic decade is vigorous economic growth, our first great
goal. We might well begin with common sense in Federal budgeting:
government spending no more than government takes in.

We must bring Federal deficits down. But how we do that makes all the
difference.

We can begin by limiting the size and scope of government. Under the
leadership of Vice President Bush, we have reduced the growth of Federal
regulations by more than 25 percent and cut well over 300 million hours
of government-required paperwork each year. This will save the public
more than $150 billion over the next 10 years.

The Grace commission has given us some 2,500 recommendations for
reducing wasteful spending, and they're being examined throughout the
administration. Federal spending growth has been cut from 17.4 percent
in 1980 to less than half of that today, and we have already achieved
over $300 billion in budget savings for the period of 1982 to '86. But
that's only a little more than half of what we sought. Government is
still spending too large a percentage of the total economy.

Now, some insist that any further budget savings must be obtained by
reducing the portion spent on defense. This ignores the fact that
national defense is solely the responsibility of the Federal Government;
indeed, it is its prime responsibility. And yet defense spending is less
than a third of the total budget. During the years of President Kennedy
and of the years before that, defense was almost half the total budget.
And then came several years in which our military capability was allowed
to deteriorate to a very dangerous degree. We are just now restoring,
through the essential modernization of our conventional and strategic
forces, our capability to meet our present and future security needs. We
dare not shirk our responsibility to keep America free, secure, and at
peace.

The last decade saw domestic spending surge literally out of control.
But the basis for such spending had been laid in previous years. A
pattern of overspending has been in place for half a century. As the
national debt grew, we were told not to worry, that we owed it to
ourselves.

Now we know that deficits are a cause for worry. But there's a
difference of opinion as to whether taxes should be increased, spending
cut, or some of both. Fear is expressed that government borrowing to
fund the deficit could inhibit the economic recovery by taking capital
needed for business and industrial expansion. Well, I think that debate
is missing an important point. Whether government borrows or increases
taxes, it will be taking the same amount of money from the private
sector, and, either way, that's too much. Simple fairness dictates that
government must not raise taxes on families struggling to pay their
bills. The root of the problem is that government's share is more than
we can afford if we're to have a sound economy.

We must bring down the deficits to ensure continued economic growth. In
the budget that I will submit on February 1st, I will recommend measures
that will reduce the deficit over the next 5 years. Many of these will
be unfinished business from last year's budget.

Some could be enacted quickly if we could join in a serious effort to
address this problem. I spoke today with Speaker of the House O'Neill,
Senate Majority Leader Baker, Senate Minority Leader Byrd, and House
Minority Leader Michel. I asked them if they would designate
congressional representatives to meet with representatives of the
administration to try to reach prompt agreement on a bipartisan deficit
reduction plan. I know it would take a long, hard struggle to agree on a
full-scale plan. So, what I have proposed is that we first see if we can
agree on a down payment.

Now, I believe there is basis for such an agreement, one that could
reduce the deficits by about a hundred billion dollars over the next 3
years. We could focus on some of the less contentious spending cuts that
are still pending before the Congress. These could be combined with
measures to close certain tax loopholes, measures that the Treasury
Department has previously said to be worthy of support. In addition, we
could examine the possibility of achieving further outlay savings based
on the work of the Grace commission.

If the congressional leadership is willing, my representatives will be
prepared to meet with theirs at the earliest possible time. I would hope
the leadership might agree on an expedited timetable in which to develop
and enact that down payment.

But a down payment alone is not enough to break us out of the deficit
problem. It could help us start on the right path. Yet, we must do more.
So, I propose that we begin exploring how together we can make
structural reforms to curb the built-in growth of spending.

I also propose improvements in the budgeting process. Some 43 of our 50
States grant their Governors the right to veto individual items in
appropriation bills without having to veto the entire bill. California
is one of those 43 States. As Governor, I found this line-item veto was
a powerful tool against wasteful or extravagant spending. It works in 43
States. Let's put it to work in Washington for all the people.

It would be most effective if done by constitutional amendment. The
majority of Americans approve of such an amendment, just as they and I
approve of an amendment mandating a balanced Federal budget. Many States
also have this protection in their constitutions.

To talk of meeting the present situation by increasing taxes is a
Band-Aid solution which does nothing to cure an illness that's been
coming on for half a century--to say nothing of the fact that it poses a
real threat to economic recovery. Let's remember that a substantial
amount of income tax is presently owed and not paid by people in the
underground economy. It would be immoral to make those who are paying
taxes pay more to compensate for those who aren't paying their share.

There's a better way. Let us go forward with an historic reform for
fairness, simplicity, and incentives for growth. I am asking Secretary
Don Regan for a plan for action to simplify the entire tax code, so all
taxpayers, big and small, are treated more fairly. And I believe such a
plan could result in that underground economy being brought into the
sunlight of honest tax compliance. And it could make the tax base
broader, so personal tax rates could come down, not go up. I've asked
that specific recommendations, consistent with those objectives, be
presented to me by December 1984.

Our second great goal is to build on America's pioneer spirit--I said
something funny? I said America's next frontier--and that's to develop
that frontier. A sparkling economy spurs initiatives, sunrise
industries, and makes older ones more competitive.

Nowhere is this more important than our next frontier: space. Nowhere do
we so effectively demonstrate our technological leadership and ability
to make life better on Earth. The Space Age is barely a quarter of a
century old. But already we've pushed civilization forward with our
advances in science and technology. Opportunities and jobs will multiply
as we cross new thresholds of knowledge and reach deeper into the
unknown.

Our progress in space--taking giant steps for all mankind--is a tribute
to American teamwork and excellence. Our finest minds in government,
industry, and academia have all pulled together. And we can be proud to
say: We are first; we are the best; and we are so because we're free.

America has always been greatest when we dared to be great. We can reach
for greatness again. We can follow our dreams to distant stars, living
and working in space for peaceful, economic, and scientific gain.
Tonight, I am directing NASA to develop a permanently manned space
station and to do it within a decade.

A space station will permit quantum leaps in our research in science,
communications, in metals, and in lifesaving medicines which could be
manufactured only in space. We want our friends to help us meet these
challenges and share in their benefits. NASA will invite other countries
to participate so we can strengthen peace, build prosperity, and expand
freedom for all who share our goals.

Just as the oceans opened up a new world for clipper ships and Yankee
traders, space holds enormous potential for commerce today. The market
for space transportation could surpass our capacity to develop it.
Companies interested in putting payloads into space must have ready
access to private sector launch services. The Department of
Transportation will help an expendable launch services industry to get
off the ground. We'll soon implement a number of executive initiatives,
develop proposals to ease regulatory constraints, and, with NASA's help,
promote private sector investment in space.

And as we develop the frontier of space, let us remember our
responsibility to preserve our older resources here on Earth.
Preservation of our environment is not a liberal or conservative
challenge, it's common sense.

Though this is a time of budget constraints, I have requested for EPA
one of the largest percentage budget increases of any agency. We will
begin the long, necessary effort to clean up a productive recreational
area and a special national resource--the Chesapeake Bay.

To reduce the threat posed by abandoned hazardous waste dumps, EPA will
spend $410 million. And I will request a supplemental increase of 50
million. And because the Superfund law expires in 1985, I've asked Bill
Ruckelshaus to develop a proposal for its extension so there'll be
additional time to complete this important task.

On the question of acid rain, which concerns people in many areas of the
United States and Canada, I'm proposing a research program that doubles
our current funding. And we'll take additional action to restore our
lakes and develop new technology to reduce pollution that causes acid
rain.

We have greatly improved the conditions of our natural resources. We'll
ask the Congress for $157 million beginning in 1985 to acquire new park
and conservation lands. The Department of the Interior will encourage
careful, selective exploration and production on our vital resources in
an Exclusive Economic Zone within the 200-mile limit off our coasts--but
with strict adherence to environmental laws and with fuller State and
public participation.

But our most precious resources, our greatest hope for the future, are
the minds and hearts of our people, especially our children. We can help
them build tomorrow by strengthening our community of shared values.
This must be our third great goal. For us, faith, work, family,
neighborhood, freedom, and peace are not just words; they're expressions
of what America means, definitions of what makes us a good and loving
people.

Families stand at the center of our society. And every family has a
personal stake in promoting excellence in education. Excellence does not
begin in Washington. A 600-percent increase in Federal spending on
education between 1960 and 1980 was accompanied by a steady decline in
Scholastic Aptitude Test scores. Excellence must begin in our homes and
neighborhood schools, where it's the responsibility of every parent and
teacher and the right of every child.

Our children come first, and that's why I established a bipartisan
National Commission on Excellence in Education, to help us chart a
commonsense course for better education. And already, communities are
implementing the Commission's recommendations. Schools are reporting
progress in math and reading skills. But we must do more to restore
discipline to schools; and we must encourage the teaching of new basics,
reward teachers of merit, enforce tougher standards, and put our parents
back in charge.

I will continue to press for tuition tax credits to expand opportunities
for families and to soften the double payment for those paying public
school taxes and private school tuition. Our proposal would target
assistance to low- and middle-income families. Just as more incentives
are needed within our schools, greater competition is needed among our
schools. Without standards and competition, there can be no champions,
no records broken, no excellence in education or any other walk of life.

And while I'm on this subject, each day your Members observe a
200-year-old tradition meant to signify America is one nation under God.
I must ask: If you can begin your day with a member of the clergy
standing right here leading you in prayer, then why can't freedom to
acknowledge God be enjoyed again by children in every schoolroom across
this land?

America was founded by people who believed that God was their rock of
safety. He is ours. I recognize we must be cautious in claiming that God
is on our side, but I think it's all right to keep asking if we're on
His side.

During our first 3 years, we have joined bipartisan efforts to restore
protection of the law to unborn children. Now, I know this issue is very
controversial. But unless and until it can be proven that an unborn
child is not a living human being, can we justify assuming without proof
that it isn't? No one has yet offered such proof; indeed, all the
evidence is to the contrary. We should rise above bitterness and
reproach, and if Americans could come together in a spirit of
understanding and helping, then we could find positive solutions to the
tragedy of abortion.

Economic recovery, better education, rededication to values, all show
the spirit of renewal gaining the upper hand. And all will improve
family life in the eighties. But families need more. They need assurance
that they and their loved ones can walk the streets of America without
being afraid. Parents need to know their children will not be victims of
child pornography and abduction. This year we will intensify our drive
against these and other horrible crimes like sexual abuse and family
violence.

Already our efforts to crack down on career criminals, organized crime,
drugpushers, and to enforce tougher sentences and paroles are having
effect. In 1982 the crime rate dropped by 4.3 percent, the biggest
decline since 1972. Protecting victims is just as important as
safeguarding the rights of defendants.

Opportunities for all Americans will increase if we move forward in fair
housing and work to ensure women's rights, provide for equitable
treatment in pension benefits and Individual Retirement Accounts,
facilitate child care, and enforce delinquent parent support payments.

It's not just the home but the workplace and community that sustain our
values and shape our future. So, I ask your help in assisting more
communities to break the bondage of dependency. Help us to free
enterprise by permitting debate and voting "yes" on our proposal for
enterprise zones in America. This has been before you for 2 years. Its
passage can help high-unemployment areas by creating jobs and restoring
neighborhoods.

A society bursting with opportunities, reaching for its future with
confidence, sustained by faith, fair play, and a conviction that good
and courageous people will flourish when they're free--these are the
secrets of a strong and prosperous America at peace with itself and the
world.

A lasting and meaningful peace is our fourth great goal. It is our
highest aspiration. And our record is clear: Americans resort to force
only when we must. We have never been aggressors. We have always
struggled to defend freedom and democracy.

We have no territorial ambitions. We occupy no countries. We build no
walls to lock people in. Americans build the future. And our vision of a
better life for farmers, merchants, and working people, from the
Americas to Asia, begins with a simple premise: The future is best
decided by ballots, not bullets.

Governments which rest upon the consent of the governed do not wage war
on their neighbors. Only when people are given a personal stake in
deciding their own destiny, benefiting from their own risks, do they
create societies that are prosperous, progressive, and free. Tonight, it
is democracies that offer hope by feeding the hungry, prolonging life,
and eliminating drudgery.

When it comes to keeping America strong, free, and at peace, there
should be no Republicans or Democrats, just patriotic Americans. We can
decide the tough issues not by who is right, but by what is right.

Together, we can continue to advance our agenda for peace. We can
establish a more stable basis for peaceful relations with the Soviet
Union; strengthen allied relations across the board; achieve real and
equitable reductions in the levels of nuclear arms; reinforce our
peacemaking efforts in the Middle East, Central America, and southern
Africa; or assist developing countries, particularly our neighbors in
the Western Hemisphere; and assist in the development of democratic
institutions throughout the world.

The wisdom of our bipartisan cooperation was seen in the work of the
Scowcroft commission, which strengthened our ability to deter war and
protect peace. In that same spirit, I urge you to move forward with the
Henry Jackson plan to implement the recommendations of the Bipartisan
Commission on Central America.

Your joint resolution on the multinational peacekeeping force in Lebanon
is also serving the cause of peace. We are making progress in Lebanon.
For nearly 10 years, the Lebanese have lived from tragedy to tragedy
with no hope for their future. Now the multinational peacekeeping force
and our marines are helping them break their cycle of despair. There is
hope for a free, independent, and sovereign Lebanon. We must have the
courage to give peace a chance. And we must not be driven from our
objectives for peace in Lebanon by state-sponsored terrorism. We have
seen this ugly specter in Beirut, Kuwait, and Rangoon. It demands
international attention. I will forward shortly legislative proposals to
help combat terrorism. And I will be seeking support from our allies for
concerted action.

Our NATO alliance is strong. 1983 was a banner year for political
courage. And we have strengthened our partnerships and our friendships
in the Far East. We're committed to dialog, deterrence, and promoting
prosperity. We'll work with our trading partners for a new round of
negotiations in support of freer world trade, greater competition, and
more open markets.

A rebirth of bipartisan cooperation, of economic growth, and military
deterrence, and a growing spirit of unity among our people at home and
our allies abroad underline a fundamental and far-reaching change: The
United States is safer, stronger, and more secure in 1984 than before.
We can now move with confidence to seize the opportunities for peace,
and we will.

Tonight, I want to speak to the people of the Soviet Union, to tell them
it's true that our governments have had serious differences, but our
sons and daughters have never fought each other in war. And if we
Americans have our way, they never will.

People of the Soviet Union, there is only one sane policy, for your
country and mine, to preserve our civilization in this modern age: A
nuclear war cannot be won and must never be fought. The only value in
our two nations possessing nuclear weapons is to make sure they will
never be used. But then would it not be better to do away with them
entirely?

People of the Soviet, President Dwight Eisenhower, who fought by your
side in World War II, said the essential struggle "is not merely man
against man or nation against nation. It is man against war." Americans
are people of peace. If your government wants peace, there will be
peace. We can come together in faith and friendship to build a safer and
far better world for our children and our children's children. And the
whole world will rejoice. That is my message to you.

Some days when life seems hard and we reach out for values to sustain us
or a friend to help us, we find a person who reminds us what it means to
be Americans.

Sergeant Stephen Trujillo, a medic in the 2d Ranger Battalion, 75th
Infantry, was in the first helicopter to land at the compound held by
Cuban forces in Grenada. He saw three other helicopters crash. Despite
the imminent explosion of the burning aircraft, he never hesitated. He
ran across 25 yards of open terrain through enemy fire to rescue wounded
soldiers. He directed two other medics, administered first aid, and
returned again and again to the crash site to carry his wounded friends
to safety.

Sergeant Trujillo, you and your fellow service men and women not only
saved innocent lives; you set a nation free. You inspire us as a force
for freedom, not for despotism; and, yes, for peace, not conquest. God
bless you.

And then there are unsung heroes: single parents, couples, church and
civic volunteers. Their hearts carry without complaint the pains of
family and community problems. They soothe our sorrow, heal our wounds,
calm our fears, and share our joy.

A person like Father Ritter is always there. His Covenant House programs
in New York and Houston provide shelter and help to thousands of
frightened and abused children each year. The same is true of Dr.
Charles Carson. Paralyzed in a plane crash, he still believed nothing is
impossible. Today in Minnesota, he works 80 hours a week without pay,
helping pioneer the field of computer-controlled walking. He has given
hope to 500,000 paralyzed Americans that some day they may walk again.

How can we not believe in the greatness of America? How can we not do
what is right and needed to preserve this last best hope of man on
Earth? After all our struggles to restore America, to revive confidence
in our country, hope for our future, after all our hard-won victories
earned through the patience and courage of every citizen, we cannot,
must not, and will not turn back. We will finish our job. How could we
do less? We're Americans.

Carl Sandburg said, "I see America not in the setting sun of a black
night of despair... I see America in the crimson light of a rising sun
fresh from the burning, creative hand of God... I see great days ahead
for men and women of will and vision."

I've never felt more strongly that America's best days and democracy's
best days lie ahead. We're a powerful force for good. With faith and
courage, we can perform great deeds and take freedom's next step. And we
will. We will carry on the tradition of a good and worthy people who
have brought light where there was darkness, warmth where there was
cold, medicine where there was disease, food where there was hunger, and
peace where there was only bloodshed.

Let us be sure that those who come after will say of us in our time,
that in our time we did everything that could be done. We finished the
race; we kept them free; we kept the faith.

Thank you very much. God bless you, and God bless America.

NOTE: The President spoke at 9:02 p.m. in the House Chamber of the
Capitol. He was introduced by Thomas P. O'Neill, Jr., Speaker of the
House of Representatives. The address was broadcast live on nationwide
radio and television.

***

State of the Union Address
Ronald Reagan
February 6, 1985

Mr. Speaker, Mr. President, distinguished Members of the Congress,
honored guests, and fellow citizens:

I come before you to report on the state of our Union, and I'm pleased
to report that after 4 years of united effort, the American people have
brought forth a nation renewed, stronger, freer, and more secure than
before.

Four years ago we began to change, forever I hope, our assumptions about
government and its place in our lives. Out of that change has come great
and robust growth--in our confidence, our economy, and our role in the
world.

Tonight America is stronger because of the values that we hold dear. We
believe faith and freedom must be our guiding stars, for they show us
truth, they make us brave, give us hope, and leave us wiser than we
were. Our progress began not in Washington, DC, but in the hearts of our
families, communities, workplaces, and voluntary groups which, together,
are unleashing the invincible spirit of one great nation under God.

Four years ago we said we would invigorate our economy by giving people
greater freedom and incentives to take risks and letting them keep more
of what they earned. We did what we promised, and a great industrial
giant is reborn.

Tonight we can take pride in 25 straight months of economic growth, the
strongest in 34 years; a 3-year inflation average of 3.9 percent, the
lowest in 17 years; and 7.3 million new jobs in 2 years, with more of
our citizens working than ever before.

New freedom in our lives has planted the rich seeds for future success:

For an America of wisdom that honors the family, knowing that if (as)
the family goes, so goes our civilization;

For an America of vision that sees tomorrow's dreams in the learning and
hard work we do today;

For an America of courage whose service men and women, even as we meet,
proudly stand watch on the frontiers of freedom;

For an America of compassion that opens its heart to those who cry out
for help.

We have begun well. But it's only a beginning. We're not here to
congratulate ourselves on what we have done but to challenge ourselves
to finish what has not yet been done.

We're here to speak for millions in our inner cities who long for real
jobs, safe neighborhoods, and schools that truly teach. We're here to
speak for the American farmer, the entrepreneur, and every worker in
industries fighting to modernize and compete. And, yes, we're here to
stand, and proudly so, for all who struggle to break free from
totalitarianism, for all who know in their hearts that freedom is the
one true path to peace and human happiness.

Proverbs tell us, without a vision the people perish. When asked what
great principle holds our Union together, Abraham Lincoln said:
"Something in (the) Declaration giving liberty, not alone to the people
of this country, but hope to the world for all future time."

We honor the giants of our history not by going back but forward to the
dreams their vision foresaw. My fellow citizens, this nation is poised
for greatness. The time has come to proceed toward a great new
challenge--a second American Revolution of hope and opportunity; a
revolution carrying us to new heights of progress by pushing back
frontiers of knowledge and space; a revolution of spirit that taps the
soul of America, enabling us to summon greater strength than we've ever
known; and a revolution that carries beyond our shores the golden
promise of human freedom in a world of peace.

Let us begin by challenging our conventional wisdom. There are no
constraints on the human mind, no walls around the human spirit, no
barriers to our progress except those we ourselves erect. Already,
pushing down tax rates has freed our economy to vault forward to record
growth.

In Europe, they're calling it "the American Miracle." Day by day, we're
shattering accepted notions of what is possible. When I was growing up,
we failed to see how a new thing called radio would transform our
marketplace. Well, today, many have not yet seen how advances in
technology are transforming our lives.

In the late 1950's workers at the AT&T semiconductor plant in
Pennsylvania produced five transistors a day for $7.50 apiece. They now
produce over a million for less than a penny apiece.

New laser techniques could revolutionize heart bypass surgery, cut
diagnosis time for viruses linked to cancer from weeks to minutes,
reduce hospital costs dramatically, and hold out new promise for saving
human lives.

Our automobile industry has overhauled assembly lines, increased worker
productivity, and is competitive once again.

We stand on the threshold of a great ability to produce more, do more,
be more. Our economy is not getting older and weaker; it's getting
younger and stronger. It doesn't need rest and supervision; it needs new
challenge, greater freedom. And that word "freedom" is the key to the
second American revolution that we need to bring about.

Let us move together with an historic reform of tax simplification for
fairness and growth. Last year I asked Treasury Secretary-then-Regan to
develop a plan to simplify the tax code, so all taxpayers would be
treated more fairly and personal tax rates could come further down.

We have cut tax rates by almost 25 percent, yet the tax system remains
unfair and limits our potential for growth. Exclusions and exemptions
cause similar incomes to be taxed at different levels. Low-income
families face steep tax barriers that make hard lives even harder. The
Treasury Department has produced an excellent reform plan, whose
principles will guide the final proposal that we will ask you to enact.

One thing that tax reform will not be is a tax increase in disguise. We
will not jeopardize the mortgage interest deduction that families need.
We will reduce personal tax rates as low as possible by removing many
tax preferences. We will propose a top rate of no more than 35 percent,
and possibly lower. And we will propose reducing corporate rates, while
maintaining incentives for capital formation.

To encourage opportunity and jobs rather than dependency and welfare, we
will propose that individuals living at or near the poverty line be
totally exempt from Federal income tax. To restore fairness to families,
we will propose increasing significantly the personal exemption.

And tonight, I am instructing Treasury Secretary James Baker--I have to
get used to saying that--to begin working with congressional authors and
committees for bipartisan legislation conforming to these principles. We
will call upon the American people for support and upon every man and
woman in this Chamber. Together, we can pass, this year, a tax bill for
fairness, simplicity, and growth, making this economy the engine of our
dreams and America the investment capital of the world. So let us begin.

Tax simplification will be a giant step toward unleashing the tremendous
pent-up power of our economy. But a second American revolution must
carry the promise of opportunity for all. It is time to liberate the
spirit of enterprise in the most distressed areas of our country.

This government will meet its responsibility to help those in need. But
policies that increase dependency, break up families, and destroy
self-respect are not progressive; they're reactionary. Despite our
strides in civil rights, blacks, Hispanics, and all minorities will not
have full and equal power until they have full economic power.

We have repeatedly sought passage of enterprise zones to help those in
the abandoned corners of our land find jobs, learn skills, and build
better lives. This legislation is supported by a majority of you.

Mr. Speaker, I know we agree that there must be no forgotten Americans.
Let us place new dreams in a million hearts and create a new generation
of entrepreneurs by passing enterprise zones this year. And, Tip, you
could make that a birthday present.

Nor must we lose the chance to pass our youth employment opportunity
wage proposal. We can help teenagers, who have the highest unemployment
rate, find summer jobs, so they can know the pride of work and have
confidence in their futures.

We'll continue to support the Job Training Partnership Act, which has a
nearly two-thirds job placement rate. Credits in education and health
care vouchers will help working families shop for services that they
need.

Our administration is already encouraging certain low-income public
housing residents to own and manage their own dwellings. It's time that
all public housing residents have that opportunity of ownership.

The Federal Government can help create a new atmosphere of freedom. But
States and localities, many of which enjoy surpluses from the recovery,
must not permit their tax and regulatory policies to stand as barriers
to growth.

Let us resolve that we will stop spreading dependency and start
spreading opportunity; that we will stop spreading bondage and start
spreading freedom.

There are some who say that growth initiatives must await final action
on deficit reductions. Well, the best way to reduce deficits is through
economic growth. More businesses will be started, more investments made,
more jobs created, and more people will be on payrolls paying taxes. The
best way to reduce government spending is to reduce the need for
spending by increasing prosperity. Each added percentage point per year
of real GNP growth will lead to cumulative reduction in deficits of
nearly $200 billion over 5 years.

To move steadily toward a balanced budget, we must also lighten
government's claim on our total economy. We will not do this by raising
taxes. We must make sure that our economy grows faster than the growth
in spending by the Federal Government. In our fiscal year 1986 budget,
overall government program spending will be frozen at the current level.
It must not be one dime higher than fiscal year 1985, and three points
are key.

First, the social safety net for the elderly, the needy, the disabled,
and unemployed will be left intact. Growth of our major health care
programs, Medicare and Medicaid, will be slowed, but protections for the
elderly and needy will be preserved.

Second, we must not relax our efforts to restore military strength just
as we near our goal of a fully equipped, trained, and ready professional
corps. National security is government's first responsibility; so in
past years defense spending took about half the Federal budget. Today it
takes less than a third. We've already reduced our planned defense
expenditures by nearly a hundred billion dollars over the past 4 years
and reduced projected spending again this year.

You know, we only have a military-industrial complex until a time of
danger, and then it becomes the arsenal of democracy. Spending for
defense is investing in things that are priceless--peace and freedom.

Third, we must reduce or eliminate costly government subsidies. For
example, deregulation of the airline industry has led to cheaper
airfares, but on Amtrak taxpayers pay about $35 per passenger every time
an Amtrak train leaves the station, It's time we ended this huge Federal
subsidy.

Our farm program costs have quadrupled in recent years. Yet I know from
visiting farmers, many in great financial distress, that we need an
orderly transition to a market-oriented farm economy. We can help
farmers best not by expanding Federal payments but by making fundamental
reforms, keeping interest rates heading down, and knocking down foreign
trade barriers to American farm exports.

We're moving ahead with Grace commission reforms to eliminate waste and
improve government's management practices. In the long run, we must
protect the taxpayers from government. And I ask again that you pass, as
32 States have now called for, an amendment mandating the Federal
Government spend no more than it takes in. And I ask for the authority,
used responsibly by 43 Governors, to veto individual items in
appropriation bills. Senator Mattingly has introduced a bill permitting
a 2-year trial run of the line-item veto. I hope you'll pass and send
that legislation to my desk.

Nearly 50 years of government living beyond its means has brought us to
a time of reckoning. Ours is but a moment in history. But one moment of
courage, idealism, and bipartisan unity can change American history
forever.

Sound monetary policy is key to long-running economic strength and
stability. We will continue to cooperate with the Federal Reserve Board,
seeking a steady policy that ensures price stability without keeping
interest rates artificially high or needlessly holding down growth.

Reducing unneeded red tape and regulations, and deregulating the energy,
transportation, and financial industries have unleashed new competition,
giving consumers more choices, better services, and lower prices. In
just one set of grant programs we have reduced 905 pages of regulations
to 31. We seek to fully deregulate natural gas to bring on new supplies
and bring us closer to energy independence. Consistent with safety
standards, we will continue removing restraints on the bus and railroad
industries, we will soon end up legislation--or send up legislation, I
should say--to return Conrail to the private sector where it belongs,
and we will support further deregulation of the trucking industry.

Every dollar the Federal Government does not take from us, every
decision it does not make for us will make our economy stronger, our
lives more abundant, our future more free.

Our second American revolution will push on to new possibilities not
only on Earth but in the next frontier of space. Despite budget
restraints, we will seek record funding for research and development.

We've seen the success of the space shuttle. Now we're going to develop
a permanently manned space station and new opportunities for free
enterprise, because in the next decade Americans and our friends around
the world will be living and working together in space.

In the zero gravity of space, we could manufacture in 30 days lifesaving
medicines it would take 30 years to make on Earth. We can make crystals
of exceptional purity to produce super computers, creating jobs,
technologies, and medical breakthroughs beyond anything we ever dreamed
possible.

As we do all this, we'll continue to protect our natural resources. We
will seek reauthorization and expanded funding for the Superfund program
to continue cleaning up hazardous waste sites which threaten human
health and the environment.

Now, there's another great heritage to speak of this evening. Of all the
changes that have swept America the past 4 years, none brings greater
promise than our rediscovery of the values of faith, freedom, family,
work, and neighborhood.

We see signs of renewal in increased attendance in places of worship;
renewed optimism and faith in our future; love of country rediscovered
by our young, who are leading the way. We've rediscovered that work is
good in and of itself, that it ennobles us to create and contribute no
matter how seemingly humble our jobs. We've seen a powerful new current
from an old and honorable tradition--American generosity.

From thousands answering Peace Corps appeals to help boost food
production in Africa, to millions volunteering time, corporations
adopting schools, and communities pulling together to help the neediest
among us at home, we have refound our values. Private sector initiatives
are crucial to our future.

I thank the Congress for passing equal access legislation giving
religious groups the same right to use classrooms after school that
other groups enjoy. But no citizen need tremble, nor the world shudder,
if a child stands in a classroom and breathes a prayer. We ask you
again, give children back a right they had for a century and a half or
more in this country.

The question of abortion grips our nation. Abortion is either the taking
of a human life or it isn't. And if it is--and medical technology is
increasingly showing it is--it must be stopped. It is a terrible irony
that while some turn to abortion, so many others who cannot become
parents cry out for children to adopt. We have room for these children.
We can fill the cradles of those who want a child to love. And tonight I
ask you in the Congress to move this year on legislation to protect the
unborn.

In the area of education, we're returning to excellence, and again, the
heroes are our people, not government. We're stressing basics of
discipline, rigorous testing, and homework, while helping children
become computer-smart as well. For 20 years scholastic aptitude test
scores of our high school students went down, but now they have gone up
2 of the last 3 years. We must go forward in our commitment to the new
basics, giving parents greater authority and making sure good teachers
are rewarded for hard work and achievement through merit pay.

Of all the changes in the past 20 years, none has more threatened our
sense of national well-being than the explosion of violent crime. One
does not have to be attacked to be a victim. The woman who must run to
her car after shopping at night is a victim. The couple draping their
door with locks and chains are victims; as is the tired, decent cleaning
woman who can't ride a subway home without being afraid.

We do not seek to violate the rights of defendants. But shouldn't we
feel more compassion for the victims of crime than for those who commit
crime? For the first time in 20 years, the crime index has fallen 2
years in a row. We've convicted over 7,400 drug offenders and put them,
as well as leaders of organized crime, behind bars in record numbers.

But we must do more. I urge the House to follow the Senate and enact
proposals permitting use of all reliable evidence that police officers
acquire in good faith. These proposals would also reform the habeas
corpus laws and allow, in keeping with the will of the overwhelming
majority of Americans, the use of the death penalty where necessary.

There can be no economic revival in ghettos when the most violent among
us are allowed to roam free. It's time we restored domestic tranquility.
And we mean to do just that.

Just as we're positioned as never before to secure justice in our
economy, we're poised as never before to create a safer, freer, more
peaceful world. Our alliances are stronger than ever. Our economy is
stronger than ever. We have resumed our historic role as a leader of the
free world. And all of these together are a great force for peace.

Since 1981 we've been committed to seeking fair and verifiable arms
agreements that would lower the risk of war and reduce the size of
nuclear arsenals. Now our determination to maintain a strong defense has
influenced the Soviet Union to return to the bargaining table. Our
negotiators must be able to go to that table with the united support of
the American people. All of us have no greater dream than to see the day
when nuclear weapons are banned from this Earth forever.

Each Member of the Congress has a role to play in modernizing our
defenses, thus supporting our chances for a meaningful arms agreement.
Your vote this spring on the Peacekeeper missile will be a critical test
of our resolve to maintain the strength we need and move toward mutual
and verifiable arms reductions.

For the past 20 years we've believed that no war will be launched as
long as each side knows it can retaliate with a deadly counterstrike.
Well, I believe there's a better way of eliminating the threat of
nuclear war. It is a Strategic Defense Initiative aimed ultimately at
finding a nonnuclear defense against ballistic missiles. It's the most
hopeful possibility of the nuclear age. But it's not very well
understood.

Some say it will bring war to the heavens, but its purpose is to deter
war in the heavens and on Earth. Now, some say the research would be
expensive. Perhaps, but it could save millions of lives, indeed humanity
itself. And some say if we build such a system, the Soviets will build a
defense system of their own. Well, they already have strategic defenses
that surpass ours; a civil defense system, where we have almost none;
and a research program covering roughly the same areas of technology
that we're now exploring. And finally some say the research will take a
long time. Well, the answer to that is: Let's get started.

Harry Truman once said that, ultimately, our security and the world's
hopes for peace and human progress "lie not in measures of defense or in
the control of weapons, but in the growth and expansion of freedom and
self-government."

And tonight, we declare anew to our fellow citizens of the world:
Freedom is not the sole prerogative of a chosen few; it is the universal
right of all God's children. Look to where peace and prosperity flourish
today. It is in homes that freedom built. Victories against poverty are
greatest and peace most secure where people live by laws that ensure
free press, free speech, and freedom to worship, vote, and create
wealth.

Our mission is to nourish and defend freedom and democracy, and to
communicate these ideals everywhere we can. America's economic success
is freedom's success; it can be repeated a hundred times in a hundred
different nations. Many countries in east Asia and the Pacific have few
resources other than the enterprise of their own people. But through low
tax rates and free markets they've soared ahead of centralized
economies. And now China is opening up its economy to meet its needs.

We need a stronger and simpler approach to the process of making and
implementing trade policy, and we'll be studying potential changes in
that process in the next few weeks. We've seen the benefits of free
trade and lived through the disasters of protectionism. Tonight I ask
all our trading partners, developed and developing alike, to join us in
a new round of trade negotiations to expand trade and competition and
strengthen the global economy--and to begin it in this next year.

There are more than 3 billion human beings living in Third World
countries with an average per capita income of $650 a year. Many are
victims of dictatorships that impoverished them with taxation and
corruption. Let us ask our allies to join us in a practical program of
trade and assistance that fosters economic development through personal
incentives to help these people climb from poverty on their own.

We cannot play innocents abroad in a world that's not innocent; nor can
we be passive when freedom is under siege. Without resources, diplomacy
cannot succeed. Our security assistance programs help friendly
governments defend themselves and give them confidence to work for
peace. And I hope that you in the Congress will understand that, dollar
for dollar, security assistance contributes as much to global security
as our own defense budget.

We must stand by all our democratic allies. And we must not break faith
with those who are risking their lives--on every continent, from
Afghanistan to Nicaragua--to defy Soviet-supported aggression and secure
rights which have been ours from birth.

The Sandinista dictatorship of Nicaragua, with full Cuban-Soviet bloc
support, not only persecutes its people, the church, and denies a free
press, but arms and provides bases for Communist terrorists attacking
neighboring states. Support for freedom fighters is self-defense and
totally consistent with the OAS and U.N. Charters. It is essential that
the Congress continue all facets of our assistance to Central America. I
want to work with you to support the democratic forces whose struggle is
tied to our own security.

And tonight, I've spoken of great plans and great dreams. They're dreams
we can make come true. Two hundred years of American history should have
taught us that nothing is impossible.

Ten years ago a young girl left Vietnam with her family, part of the
exodus that followed the fall of Saigon. They came to the United States
with no possessions and not knowing a word of English. Ten years
ago--the young girl studied hard, learned English, and finished high
school in the top of her class. And this May, May 22d to be exact, is a
big date on her calendar. Just 10 years from the time she left Vietnam,
she will graduate from the United States Military Academy at West Point.
I thought you might like to meet an American hero named Jean Nguyen.

Now, there's someone else here tonight, born 79 years ago. She lives in
the inner city, where she cares for infants born of mothers who are
heroin addicts. The children, born in withdrawal, are sometimes even
dropped on her doorstep. She helps them with love. Go to her house some
night, and maybe you'll see her silhouette against the window as she
walks the floor talking softly, soothing a child in her arms--Mother
Hale of Harlem, and she, too, is an American hero.

Jean, Mother Hale, your lives tell us that the oldest American saying is
new again: Anything is possible in America if we have the faith, the
will, and the heart. History is asking us once again to be a force for
good in the world. Let us begin in unity, with justice, and love.

Thank you, and God bless you.

NOTE: The President spoke at 9:05 p.m. in the House Chamber of the
Capitol. He was introduced by Thomas P. O'Neill, Jr., Speaker of the
House of Representatives. The address was broadcast live on nationwide
radio and television.

***

State of the Union Address
Ronald Reagan
February 4, 1986

Mr. Speaker, Mr. President, distinguished Members of the Congress,
honored guests, and fellow citizens:

Thank you for allowing me to delay my address until this evening. We
paused together to mourn and honor the valor of our seven Challenger
heroes. And I hope that we are now ready to do what they would want us
to do: Go forward, America, and reach for the stars. We will never
forget those brave seven, but we shall go forward.

Mr. Speaker, before I begin my prepared remarks, may I point out that
tonight marks the 10th and last State of the Union Message that you've
presided over. And on behalf of the American people, I want to salute
you for your service to Congress and country. Here's to you!

I have come to review with you the progress of our nation, to speak of
unfinished work, and to set our sights on the future. I am pleased to
report the state of our Union is stronger than a year ago and growing
stronger each day. Tonight we look out on a rising America, firm of
heart, united in spirit, powerful in pride and patriotism. America is on
the move! But it wasn't long ago that we looked out on a different land:
locked factory gates, long gasoline lines, intolerable prices, and
interest rates turning the greatest country on Earth into a land of
broken dreams. Government growing beyond our consent had become a
lumbering giant, slamming shut the gates of opportunity, threatening to
crush the very roots of our freedom. What brought America back? The
American people brought us back with quiet courage and common sense,
with undying faith that in this nation under God the future will be
ours; for the future belongs to the free.

Tonight the American people deserve our thanks for 37 straight months of
economic growth, for sunrise firms and modernized industries creating 9
million new jobs in 3 years, interest rates cut in half, inflation
falling over from 12 percent in 1980 to under 4 today, and a mighty
river of good works--a record $74 billion in voluntary giving just last
year alone. And despite the pressures of our modern world, family and
community remain the moral core of our society, guardians of our values
and hopes for the future. Family and community are the costars of this
great American comeback. They are why we say tonight: Private values
must be at the heart of public policies.

What is true for families in America is true for America in the family
of free nations. History is no captive of some inevitable force. History
is made by men and women of vision and courage. Tonight freedom is on
the march. The United States is the economic miracle, the model to which
the world once again turns. We stand for an idea whose time is now: Only
by lifting the weights from the shoulders of all can people truly
prosper and can peace among all nations be secure. Teddy Roosevelt said
that a nation that does great work lives forever. We have done well, but
we cannot stop at the foothills when Everest beckons. It's time for
America to be all that we can be.

We speak tonight of an agenda for the future, an agenda for a safer,
more secure world. And we speak about the necessity for actions to steel
us for the challenges of growth, trade, and security in the next decade
and the year 2000. And we will do it--not by breaking faith with bedrock
principles but by breaking free from failed policies. Let us begin where
storm clouds loom darkest--right here in Washington, DC. This week I
will send you our detailed proposals; tonight let us speak of our
responsibility to redefine government's role: not to control, not to
demand or command, not to contain us, but to help in times of need and,
above all, to create a ladder of opportunity to full employment so that
all Americans can climb toward economic power and justice on their own.

But we cannot win the race to the future shackled to a system that can't
even pass a Federal budget. We cannot win that race held back by
horse-and-buggy programs that waste tax dollars and squander human
potential. We cannot win that race if we're swamped in a sea of red ink.
Now, Mr. Speaker, you know, I know, and the American people know the
Federal budget system is broken. It doesn't work. Before we leave this
city, let's you and I work together to fix it, and then we can finally
give the American people a balanced budget.

Members of Congress, passage of Gramm-Rudman-Hollings gives us an
historic opportunity to achieve what has eluded our national leadership
for decades: forcing the Federal Government to live within its means.
Your schedule now requires that the budget resolution be passed by April
15th, the very day America's families have to foot the bill for the
budgets that you produce. How often we read of a husband and wife both
working, struggling from paycheck to paycheck to raise a family, meet a
mortgage, pay their taxes and bills. And yet some in Congress say taxes
must be raised. Well, I'm sorry; they're asking the wrong people to
tighten their belts. It's time we reduce the Federal budget and left the
family budget alone. We do not face large deficits because American
families are undertaxed; we face those deficits because the Federal
Government overspends.

The detailed budget that we will submit will meet the
Gramm-Rudman-Hollings target for deficit reductions, meet our commitment
to ensure a strong national defense, meet our commitment to protect
Social Security and the truly less fortunate, and, yes, meet our
commitment to not raise taxes. How should we accomplish this? Well, not
by taking from those in need. As families take care of their own,
government must provide shelter and nourishment for those who cannot
provide for themselves. But we must revise or replace programs enacted
in the name of compassion that degrade the moral worth of work,
encourage family breakups, and drive entire communities into a bleak and
heartless dependency. Gramm-Rudman-Hollings can mark a dramatic
improvement. But experience shows that simply setting deficit targets
does not assure they'll be met. We must proceed with Grace commission
reforms against waste.

And tonight I ask you to give me what 43 Governors have: Give me a
line-item veto this year. Give me the authority to veto waste, and I'll
take the responsibility, I'll make the cuts, I'll take the heat. This
authority would not give me any monopoly power, but simply prevent
spending measures from sneaking through that could not pass on their own
merit. And you can sustain or override my veto; that's the way the
system should work. Once we've made the hard choices, we should lock in
our gains with a balanced budget amendment to the Constitution.

I mentioned that we will meet our commitment to national defense. We
must meet it. Defense is not just another budget expense. Keeping
America strong, free, and at peace is solely the responsibility of the
Federal Government; it is government's prime responsibility. We have
devoted 5 years trying to narrow a dangerous gap born of illusion and
neglect, and we've made important gains. Yet the threat from Soviet
forces, conventional and strategic, from the Soviet drive for
domination, from the increase in espionage and state terror remains
great. This is reality. Closing our eyes will not make reality
disappear. We pledged together to hold real growth in defense spending
to the bare minimum. My budget honors that pledge, and I'm now asking
you, the Congress, to keep its end of the bargain. The Soviets must know
that if America reduces her defenses, it will be because of a reduced
threat, not a reduced resolve.

Keeping America strong is as vital to the national security as
controlling Federal spending is to our economic security. But, as I have
said before, the most powerful force we can enlist against the Federal
deficit is an ever-expanding American economy, unfettered and free. The
magic of opportunity--unreserved, unfailing, unrestrained--isn't this
the calling that unites us? I believe our tax rate cuts for the people
have done more to spur a spirit of risk-taking and help America's
economy break free than any program since John Kennedy's tax cut almost
a quarter century ago.

Now history calls us to press on, to complete efforts for an historic
tax reform providing new opportunity for all and ensuring that all pay
their fair share, but no more. We've come this far. Will you join me
now, and we'll walk this last mile together? You know my views on this.
We cannot and we will not accept tax reform that is a tax increase in
disguise. True reform must be an engine of productivity and growth, and
that means a top personal rate no higher than 35 percent. True reform
must be truly fair, and that means raising personal exemptions to
$2,000. True reform means a tax system that at long last is profamily,
projobs, profuture, and pro-America.

As we knock down the barriers to growth, we must redouble our efforts
for freer and fairer trade. We have already taken actions to counter
unfair trading practices and to pry open closed foreign markets. We will
continue to do so. We will also oppose legislation touted as providing
protection that in reality pits one American worker against another, one
industry against another, one community against another, and that raises
prices for us all. If the United States can trade with other nations on
a level playing field, we can outproduce, outcompete, and outsell
anybody, anywhere in the world.

The constant expansion of our economy and exports requires a sound and
stable dollar at home and reliable exchange rates around the world. We
must never again permit wild currency swings to cripple our farmers and
other exporters. Farmers, in particular, have suffered from past unwise
government policies. They must not be abandoned with problems they did
not create and cannot control. We've begun coordinating economic and
monetary policy among our major trading partners. But there's more to
do, and tonight I am directing Treasury Secretary Jim Baker to determine
if the nations of the world should convene to discuss the role and
relationship of our currencies.

Confident in our future and secure in our values, Americans are striving
forward to embrace the future. We see it not only in our recovery but in
3 straight years of falling crime rates, as families and communities
band together to fight pornography, drugs, and lawlessness and to give
back to their children the safe and, yes, innocent childhood they
deserve. We see it in the renaissance in education, the rising SAT
scores for 3 years--last year's increase, the greatest since 1963. It
wasn't government and Washington lobbies that turned education around;
it was the American people who, in reaching for excellence, knew to
reach back to basics. We must continue the advance by supporting
discipline in our schools, vouchers that give parents freedom of choice;
and we must give back to our children their lost right to acknowledge
God in their classrooms.

We are a nation of idealists, yet today there is a wound in our national
conscience. America will never be whole as long as the right to life
granted by our Creator is denied to the unborn. For the rest of my time,
I shall do what I can to see that this wound is one day healed.

As we work to make the American dream real for all, we must also look to
the condition of America's families. Struggling parents today worry how
they will provide their children the advantages that their parents gave
them. In the welfare culture, the breakdown of the family, the most
basic support system, has reached crisis proportions--in female and
child poverty, child abandonment, horrible crimes, and deteriorating
schools. After hundreds of billions of dollars in poverty programs, the
plight of the poor grows more painful. But the waste in dollars and
cents pales before the most tragic loss: the sinful waste of human
spirit and potential. We can ignore this terrible truth no longer. As
Franklin Roosevelt warned 51 years ago, standing before this Chamber, he
said, "Welfare is a narcotic, a subtle destroyer of the human spirit."
And we must now escape the spider's web of dependency.

Tonight I am charging the White House Domestic Council to present me by
December 1, 1986, an evaluation of programs and a strategy for immediate
action to meet the financial, educational, social, and safety concerns
of poor families. I'm talking about real and lasting emancipation,
because the success of welfare should be judged by how many of its
recipients become independent of welfare. Further, after seeing how
devastating illness can destroy the financial security of the family, I
am directing the Secretary of Health and Human Services, Dr. Otis Bowen,
to report to me by year end with recommendations on how the private
sector and government can work together to address the problems of
affordable insurance for those whose life savings would otherwise be
threatened when catastrophic illness strikes.

And tonight I want to speak directly to America's younger generation,
because you hold the destiny of our nation in your hands. With all the
temptations young people face, it sometimes seems the allure of the
permissive society requires superhuman feats of self-control. But the
call of the future is too strong, the challenge too great to get lost in
the blind alleyways of dissolution, drugs, and despair. Never has there
been a more exciting time to be alive, a time of rousing wonder and
heroic achievement. As they said in the film "Back to the Future,"
"Where we're going, we don't need roads."

Well, today physicists peering into the infinitely small realms of
subatomic particles find reaffirmations of religious faith. Astronomers
build a space telescope that can see to the edge of the universe and
possibly back to the moment of creation. So, yes, this nation remains
fully committed to America's space program. We're going forward with our
shuttle flights. We're going forward to build our space station. And we
are going forward with research on a new Orient Express that could, by
the end of the next decade, take off from Dulles Airport, accelerate up
to 25 times the speed of sound, attaining low Earth orbit or flying to
Tokyo within 2 hours. And the same technology transforming our lives can
solve the greatest problem of the 20th century. A security shield can
one day render nuclear weapons obsolete and free mankind from the prison
of nuclear terror. America met one historic challenge and went to the
Moon. Now America must meet another: to make our strategic defense real
for all the citizens of planet Earth.

Let us speak of our deepest longing for the future: to leave our
children a land that is free and just and a world at peace. It is my
hope that our fireside summit in Geneva and Mr. Gorbachev's upcoming
visit to America can lead to a more stable relationship. Surely no
people on Earth hate war or love peace more than we Americans. But we
cannot stroll into the future with childlike faith. Our differences with
a system that openly proclaims and practices an alleged right to command
people's lives and to export its ideology by force are deep and abiding.
Logic and history compel us to accept that our relationship be guided by
realism--rock-hard, cleareyed, steady, and sure. Our negotiators in
Geneva have proposed a radical cut in offensive forces by each side with
no cheating. They have made clear that Soviet compliance with the letter
and spirit of agreements is essential. If the Soviet Government wants an
agreement that truly reduces nuclear arms, there will be such an
agreement.

But arms control is no substitute for peace. We know that peace follows
in freedom's path and conflicts erupt when the will of the people is
denied. So, we must prepare for peace not only by reducing weapons but
by bolstering prosperity, liberty, and democracy however and wherever we
can. We advance the promise of opportunity every time we speak out on
behalf of lower tax rates, freer markets, sound currencies around the
world. We strengthen the family of freedom every time we work with
allies and come to the aid of friends under siege. And we can enlarge
the family of free nations if we will defend the unalienable rights of
all God's children to follow their dreams.

To those imprisoned in regimes held captive, to those beaten for daring
to fight for freedom and democracy--for their right to worship, to
speak, to live, and to prosper in the family of free nations--we say to
you tonight: You are not alone, freedom fighters. America will support
with moral and material assistance your right not just to fight and die
for freedom but to fight and win freedom--to win freedom in Afghanistan,
in Angola, in Cambodia, and in Nicaragua. This is a great moral
challenge for the entire free world.

Surely no issue is more important for peace in our own hemisphere, for
the security of our frontiers, for the protection of our vital
interests, than to achieve democracy in Nicaragua and to protect
Nicaragua's democratic neighbors. This year I will be asking Congress
for the means to do what must be done for that great and good cause. As
(former Senator Henry M.)Scoop Jackson, the inspiration for our
Bipartisan Commission on Central America, once said, "In matters of
national security, the best politics is no politics."

What we accomplish this year, in each challenge we face, will set our
course for the balance of the decade, indeed, for the remainder of the
century. After all we've done so far, let no one say that this nation
cannot reach the destiny of our dreams. America believes, America is
ready, America can win the race to the future--and we shall. The
American dream is a song of hope that rings through night winter air;
vivid, tender music that warms our hearts when the least among us aspire
to the greatest things: to venture a daring enterprise; to unearth new
beauty in music, literature, and art; to discover a new universe inside
a tiny silicon chip or a single human cell.

We see the dream coming true in the spirit of discovery of Richard
Cavoli. All his life he's been enthralled by the mysteries of medicine.
And, Richard, we know that the experiment that you began in high school
was launched and lost last week, yet your dream lives. And as long as
it's real, work of noble note will yet be done, work that could reduce
the harmful effects of x rays on patients and enable astronomers to view
the golden gateways of the farthest stars.

We see the dream glow in the towering talent of a 12-year-old, Tyrone
Ford. A child prodigy of gospel music, he has surmounted personal
adversity to become an accomplished pianist and singer. He also directs
the choirs of three churches and has performed at the Kennedy Center.
With God as your composer, Tyrone, your music will be the music of
angels.

We see the dream being saved by the courage of the 13-year-old Shelby
Butler, honor student and member of her school's safety patrol. Seeing
another girl freeze in terror before an out-of-control school bus, she
risked her life and pulled her to safety. With bravery like yours,
Shelby, America need never fear for our future.

And we see the dream born again in the joyful compassion of a 13 year
old, Trevor Ferrell. Two years ago, age 11, watching men and women
bedding down in abandoned doorways--on television he was
watching--Trevor left his suburban Philadelphia home to bring blankets
and food to the helpless and homeless. And now 250 people help him
fulfill his nightly vigil. Trevor, yours is the living spirit of
brotherly love.

Would you four stand up for a moment? Thank you, thank you. You are
heroes of our hearts. We look at you and know it's true: In this land of
dreams fulfilled, where greater dreams may be imagined, nothing is
impossible, no victory is beyond our reach, no glory will ever be too
great.

So, now it's up to us, all of us, to prepare America for that day when
our work will pale before the greatness of America's champions in the
21st century. The world's hopes rest with America's future; America's
hopes rest with us. So, let us go forward to create our world of
tomorrow in faith, in unity, and in love.

God bless you, and God bless America.

NOTE: The President spoke at 8:04 p.m. in the House Chamber of the
Capitol. He was introduced by Thomas P. O'Neill, Jr., Speaker of the
House of Representatives. The address was broadcast live on nationwide
radio and television.

***

State of the Union Address
Ronald Reagan
January 27, 1987

Mr. Speaker, Mr. President, distinguished Members of Congress, honored
guests, and fellow citizens:

May I congratulate all of you who are Members of this historic 100th
Congress of the United States of America. In this 200th anniversary year
of our Constitution, you and I stand on the shoulders of giants--men
whose words and deeds put wind in the sails of freedom. However, we must
always remember that our Constitution is to be celebrated not for being
old, but for being young--young with the same energy, spirit, and
promise that filled each eventful day in Philadelphia's statehouse. We
will be guided tonight by their acts, and we will be guided forever by
their words.

Now, forgive me, but I can't resist sharing a story from those historic
days. Philadelphia was bursting with civic pride in the spring of 1787,
and its newspapers began embellishing the arrival of the Convention
delegates with elaborate social classifications. Governors of States
were called Excellency. Justices and Chancellors had reserved for them
honorable with a capital "H." For Congressmen, it was honorable with a
small "h." And all others were referred to as "the following respectable
characters." Well, for this 100th Congress, I invoke special executive
powers to declare that each of you must never be titled less than
honorable with a capital "H." Incidentally, I'm delighted you are
celebrating the 100th birthday of the Congress. It's always a pleasure
to congratulate someone with more birthdays than I've had.

Now, there's a new face at this place of honor tonight. And please join
me in warm congratulations to the Speaker of the House, Jim Wright. Mr.
Speaker, you might recall a similar situation in your very first session
of Congress 32 years ago. Then, as now, the speakership had changed
hands and another great son of Texas, Sam Rayburn--"Mr. Sam"--sat in
your chair. I cannot find better words than those used by President
Eisenhower that evening. He said, "We shall have much to do together; I
am sure that we will get it done and that we shall do it in harmony and
good will." Tonight I renew that pledge. To you, Mr. Speaker, and to
Senate Majority Leader Robert Byrd, who brings 34 years of distinguished
service to the Congress, may I say: Though there are changes in the
Congress, America's interests remain the same. And I am confident that,
along with Republican leaders Bob Michel and Bob Dole, this Congress can
make history.

Six years ago I was here to ask the Congress to join me in America's new
beginning. Well, the results are something of which we can all be proud.
Our inflation rate is now the lowest in a quarter of a century. The
prime interest rate has fallen from the 21 1/2 percent the month before
we took office to 7 1/2 percent today. And those rates have triggered
the most housing starts in 8 years. The unemployment rate--still too
high--is the lowest in nearly 7 years, and our people have created
nearly 13 million new jobs. Over 61 percent of everyone over the age of
16, male and female, is employed--the highest percentage on record.
Let's roll up our sleeves and go to work and put America's economic
engine at full throttle. We can also be heartened by our progress across
the world. Most important, America is at peace tonight, and freedom is
on the march. And we've done much these past years to restore our
defenses, our alliances, and our leadership in the world. Our sons and
daughters in the services once again wear their uniforms with pride.

But though we've made much progress, I have one major regret: I took a
risk with regard to our action in Iran. It did not work, and for that I
assume full responsibility. The goals were worthy. I do not believe it
was wrong to try to establish contacts with a country of strategic
importance or to try to save lives. And certainly it was not wrong to
try to secure freedom for our citizens held in barbaric captivity. But
we did not achieve what we wished, and serious mistakes were made in
trying to do so. We will get to the bottom of this, and I will take
whatever action is called for. But in debating the past, we must not
deny ourselves the successes of the future. Let it never be said of this
generation of Americans that we became so obsessed with failure that we
refused to take risks that could further the cause of peace and freedom
in the world. Much is at stake here, and the Nation and the world are
watching to see if we go forward together in the national interest or if
we let partisanship weaken us. And let there be no mistake about
American policy: We will not sit idly by if our interests or our friends
in the Middle East are threatened, nor will we yield to terrorist
blackmail.

And now, ladies and gentlemen of the Congress, why don't we get to work?
I am pleased to report that because of our efforts to rebuild the
strength of America, the world is a safer place. Earlier this month I
submitted a budget to defend America and maintain our momentum to make
up for neglect in the last decade. Well, I ask you to vote out a defense
and foreign affairs budget that says yes to protecting our country.
While the world is safer, it is not safe.

Since 1970 the Soviets have invested $500 billion more on their military
forces than we have. Even today, though nearly 1 in 3 Soviet families is
without running hot water and the average family spends 2 hours a day
shopping for the basic necessities of life, their government still found
the resources to transfer $75 billion in weapons to client states in the
past 5 years--clients like Syria, Vietnam, Cuba, Libya, Angola,
Ethiopia, Afghanistan, and Nicaragua. With 120,000 Soviet combat and
military personnel and 15,000 military advisers in Asia, Africa, and
Latin America, can anyone still doubt their single-minded determination
to expand their power? Despite this, the Congress cut my request for
critical U.S. security assistance to free nations by 21 percent this
year, and cut defense requests by $85 billion in the last 3 years.

These assistance programs serve our national interests as well as mutual
interests. And when the programs are devastated, American interests are
harmed. My friends, it's my duty as President to say to you again
tonight that there is no surer way to lose freedom than to lose our
resolve. Today the brave people of Afghanistan are showing that resolve.
The Soviet Union says it wants a peaceful settlement in Afghanistan, yet
it continues a brutal war and props up a regime whose days are clearly
numbered. We are ready to support a political solution that guarantees
the rapid withdrawal of all Soviet troops and genuine self-determination
for the Afghan people.

In Central America, too, the cause of freedom is being tested. And our
resolve is being tested there as well. Here, especially, the world is
watching to see how this nation responds. Today over 90 percent of the
people of Latin America live in democracy. Democracy is on the march in
Central and South America. Communist Nicaragua is the odd man
out--suppressing the church, the press, and democratic dissent and
promoting subversion in the region. We support diplomatic efforts, but
these efforts can never succeed if the Sandinistas win their war against
the Nicaraguan people.

Our commitment to a Western Hemisphere safe from aggression did not
occur by spontaneous generation on the day that we took office. It began
with the Monroe Doctrine in 1823 and continues our historic bipartisan
American policy. Franklin Roosevelt said we "are determined to do
everything possible to maintain peace on this hemisphere." President
Truman was very blunt: "International communism seeks to crush and
undermine and destroy the independence of the Americas. We cannot let
that happen here." And John F. Kennedy made clear that "Communist
domination in this hemisphere can never be negotiated." Some in this
Congress may choose to depart from this historic commitment, but I will
not.

This year we celebrate the second century of our Constitution. The
Sandinistas just signed theirs 2 weeks ago, and then suspended it. We
won't know how my words tonight will be reported there for one simple
reason: There is no free press in Nicaragua. Nicaraguan freedom fighters
have never asked us to wage their battle, but I will fight any effort to
shut off their lifeblood and consign them to death, defeat, or a life
without freedom. There must be no Soviet beachhead in Central America.

You know, we Americans have always preferred dialog to conflict, and so,
we always remain open to more constructive relations with the Soviet
Union. But more responsible Soviet conduct around the world is a key
element of the U.S.-Soviet agenda. Progress is also required on the
other items of our agenda as well--real respect for human rights and
more open contacts between our societies and, of course, arms reduction.

In Iceland, last October, we had one moment of opportunity that the
Soviets dashed because they sought to cripple our Strategic Defense
Initiative, SDI. I wouldn't let them do it then; I won't let them do it
now or in the future. This is the most positive and promising defense
program we have undertaken. It's the path, for both sides, to a safer
future--a system that defends human life instead of threatening it. SDI
will go forward. The United States has made serious, fair, and
far-reaching proposals to the Soviet Union, and this is a moment of rare
opportunity for arms reduction. But I will need, and American
negotiators in Geneva will need, Congress' support. Enacting the Soviet
negotiating position into American law would not be the way to win a
good agreement. So, I must tell you in this Congress I will veto any
effort that undercuts our national security and our negotiating
leverage.

Now, today, we also find ourselves engaged in expanding peaceful
commerce across the world. We will work to expand our opportunities in
international markets through the Uruguay round of trade negotiations
and to complete an historic free trade arrangement between the world's
two largest trading partners, Canada and the United States. Our basic
trade policy remains the same: We remain opposed as ever to
protectionism, because America's growth and future depend on trade. But
we would insist on trade that is fair and free. We are always willing to
be trade partners but never trade patsies.

Now, from foreign borders let us return to our own, because America in
the world is only as strong as America at home. This 100th Congress has
high responsibilities. I begin with a gentle reminder that many of these
are simply the incomplete obligations of the past. The American people
deserve to be impatient, because we do not yet have the public house in
order. We've had great success in restoring our economic integrity, and
we've rescued our nation from the worst economic mess since the
Depression. But there's more to do. For starters, the Federal deficit is
outrageous. For years I've asked that we stop pushing onto our children
the excesses of our government. And what the Congress finally needs to
do is pass a constitutional amendment that mandates a balanced budget
and forces government to live within its means. States, cities, and the
families of America balance their budgets. Why can't we?

Next, the budget process is a sorry spectacle. The missing of deadlines
and the nightmare of monstrous continuing resolutions packing hundreds
of billions of dollars of spending into one bill must be stopped. We ask
the Congress once again: Give us the same tool that 43 Governors have--a
lineitem veto so we can carve out the boondoggles and pork, those items
that would never survive on their own. I will send the Congress broad
recommendations on the budget, but first I'd like to see yours. Let's go
to work and get this done together.

But now let's talk about this year's budget. Even though I have
submitted it within the Gramm-Rudman-Hollings deficit reduction target,
I have seen suggestions that we might postpone that timetable. Well, I
think the American people are tired of hearing the same old excuses.
Together we made a commitment to balance the budget. Now let's keep it.
As for those suggestions that the answer is higher taxes, the American
people have repeatedly rejected that shop-worn advice. They know that we
don't have deficits because people are taxed too little. We have
deficits because big government spends too much.

Now, next month I'll place two additional reforms before the Congress.
We've created a welfare monster that is a shocking indictment of our
sense of priorities. Our national welfare system consists of some 59
major programs and over 6,000 pages of Federal laws and regulations on
which more than $132 billion was spent in 1985. I will propose a new
national welfare strategy, a program of welfare reform through
State-sponsored, community-based demonstration projects. This is the
time to reform this outmoded social dinosaur and finally break the
poverty trap. Now, we will never abandon those who, through no fault of
their own, must have our help. But let us work to see how many can be
freed from the dependency of welfare and made self-supporting, which the
great majority of welfare recipients want more than anything else. Next,
let us remove a financial specter facing our older Americans: the fear
of an illness so expensive that it can result in having to make an
intolerable choice between bankruptcy and death. I will submit
legislation shortly to help free the elderly from the fear of
catastrophic illness.

Now let's turn to the future. It's widely said that America is losing
her competitive edge. Well, that won't happen if we act now. How well
prepared are we to enter the 21st century? In my lifetime, America set
the standard for the world. It is now time to determine that we should
enter the next century having achieved a level of excellence unsurpassed
in history. We will achieve this, first, by guaranteeing that government
does everything possible to promote America's ability to compete.
Second, we must act as individuals in a quest for excellence that will
not be measured by new proposals or billions in new funding. Rather, it
involves an expenditure of American spirit and just plain American grit.
The Congress will soon receive my comprehensive proposals to enhance our
competitiveness, including new science and technology centers and strong
new funding for basic research. The bill will include legal and
regulatory reforms and weapons to fight unfair trade practices.
Competitiveness also means giving our farmers a shot at participating
fairly and fully in a changing world market.

Preparing for the future must begin, as always, with our children. We
need to set for them new and more rigorous goals. We must demand more of
ourselves and our children by raising literacy levels dramatically by
the year 2000. Our children should master the basic concepts of math and
science, and let's insist that students not leave high school until they
have studied and understood the basic documents of our national
heritage. There's one more thing we can't let up on: Let's redouble our
personal efforts to provide for every child a safe and drug-free
learning environment. If our crusade against drugs succeeds with our
children, we will defeat that scourge all over the country.

Finally, let's stop suppressing the spiritual core of our national
being. Our nation could not have been conceived without divine help. Why
is it that we can build a nation with our prayers, but we can't use a
schoolroom for voluntary prayer? The 100th Congress of the United States
should be remembered as the one that ended the expulsion of God from
America's classrooms.

The quest for excellence into the 21st century begins in the schoolroom
but must go next to the workplace. More than 20 million new jobs will be
created before the new century unfolds, and by then, our economy should
be able to provide a job for everyone who wants to work. We must also
enable our workers to adapt to the rapidly changing nature of the
workplace. And I will propose substantial, new Federal commitments keyed
to retraining and job mobility.

Over the next few weeks, I'll be sending the Congress a complete series
of these special messages--on budget reform, welfare reform,
competitiveness, including education, trade, worker training and
assistance, agriculture, and other subjects. The Congress can give us
these tools, but to make these tools work, it really comes down to just
being our best. And that is the core of American greatness. The
responsibility of freedom presses us towards higher knowledge and, I
believe, moral and spiritual greatness. Through lower taxes and smaller
government, government has its ways of freeing people's spirits. But
only we, each of us, can let the spirit soar against our own individual
standards. Excellence is what makes freedom ring. And isn't that what we
do best?

We're entering our third century now, but it's wrong to judge our nation
by its years. The calendar can't measure America because we were meant
to be an endless experiment in freedom--with no limit to our reaches, no
boundaries to what we can do, no end point to our hopes. The United
States Constitution is the impassioned and inspired vehicle by which we
travel through history. It grew out of the most fundamental inspiration
of our existence: that we are here to serve Him by living free--that
living free releases in us the noblest of impulses and the best of our
abilities; that we would use these gifts for good and generous purposes
and would secure them not just for ourselves and for our children but
for all mankind.

Over the years--I won't count if you don't--nothing has been so
heartwarming to me as speaking to America's young, and the little ones
especially, so fresh-faced and so eager to know. Well, from time to time
I've been with them--they will ask about our Constitution. And I hope
you Members of Congress will not deem this a breach of protocol if
you'll permit me to share these thoughts again with the young people who
might be listening or watching this evening. I've read the constitutions
of a number of countries, including the Soviet Union's. Now, some people
are surprised to hear that they have a constitution, and it even
supposedly grants a number of freedoms to its people. Many countries
have written into their constitution provisions for freedom of speech
and freedom of assembly. Well, if this is true, why is the Constitution
of the United States so exceptional?

Well, the difference is so small that it almost escapes you, but it's so
great it tells you the whole story in just three words: We the people.
In those other constitutions, the Government tells the people of those
countries what they're allowed to do. In our Constitution, we the people
tell the Government what it can do, and it can do only those things
listed in that document and no others. Virtually every other revolution
in history has just exchanged one set of rulers for another set of
rulers. Our revolution is the first to say the people are the masters
and government is their servant. And you young people out there, don't
ever forget that. Someday you could be in this room, but wherever you
are, America is depending on you to reach your highest and be your
best--because here in America, we the people are in charge.

Just three words: We the people--those are the kids on Christmas Day
looking out from a frozen sentry post on the 38th parallel in Korea or
aboard an aircraft carrier in the Mediterranean. A million miles from
home, but doing their duty.

We the people--those are the warmhearted whose numbers we can't begin to
count, who'll begin the day with a little prayer for hostages they will
never know and MIA families they will never meet. Why? Because that's
the way we are, this unique breed we call Americans.

We the people--they're farmers on tough times, but who never stop
feeding a hungry world. They're the volunteers at the hospital choking
back their tears for the hundredth time, caring for a baby struggling
for life because of a mother who used drugs. And you'll forgive me a
special memory--it's a million mothers like Nelle Reagan who never knew
a stranger or turned a hungry person away from her kitchen door.

We the people--they refute last week's television commentary downgrading
our optimism and our idealism. They are the entrepreneurs, the builders,
the pioneers, and a lot of regular folks--the true heroes of our land
who make up the most uncommon nation of doers in history. You know
they're Americans because their spirit is as big as the universe and
their hearts are bigger than their spirits.

We the people--starting the third century of a dream and standing up to
some cynic who's trying to tell us we're not going to get any better.
Are we at the end? Well, I can't tell it any better than the real
thing--a story recorded by James Madison from the final moments of the
Constitutional Convention, September 17th, 1787. As the last few members
signed the document, Benjamin Franklin--the oldest delegate at 81 years
and in frail health--looked over toward the chair where George
Washington daily presided. At the back of the chair was painted the
picture of a Sun on the horizon. And turning to those sitting next to
him, Franklin observed that artists found it difficult in their painting
to distinguish between a rising and a setting Sun.

Well, I know if we were there, we could see those delegates sitting
around Franklin--leaning in to listen more closely to him. And then Dr.
Franklin began to share his deepest hopes and fears about the outcome of
their efforts, and this is what he said: "I have often looked at that
picture behind the President without being able to tell whether it was a
rising or setting Sun: But now at length I have the happiness to know
that it is a rising and not a setting Sun." Well, you can bet it's
rising because, my fellow citizens, America isn't finished. Her best
days have just begun.

Thank you, God bless you, and God bless America.

NOTE: The President spoke at 9:03 p.m. in the House Chamber of the
Capitol. He was introduced by Jim Wright, Speaker of the House of
Representatives. The address was broadcast live on nationwide radio and
television.

***

State of the Union Address
Ronald Reagan
January 25, 1988

Mr. Speaker, Mr. President, and distinguished Members of the House and
Senate: When we first met here 7 years ago--many of us for the first
time--it was with the hope of beginning something new for America. We
meet here tonight in this historic Chamber to continue that work. If
anyone expects just a proud recitation of the accomplishments of my
administration, I say let's leave that to history; we're not finished
yet. So, my message to you tonight is put on your work shoes; we're
still on the job.

History records the power of the ideas that brought us here those 7
years ago--ideas like the individual's right to reach as far and as high
as his or her talents will permit; the free market as an engine of
economic progress. And as an ancient Chinese philosopher, Lao-tzu, said:
"Govern a great nation as you would cook a small fish; do not overdo
it." Well, these ideas were part of a larger notion, a vision, if you
will, of America herself--an America not only rich in opportunity for
the individual but an America, too, of strong families and vibrant
neighborhoods; an America whose divergent but harmonizing communities
were a reflection of a deeper community of values: the value of work, of
family, of religion, and of the love of freedom that God places in each
of us and whose defense He has entrusted in a special way to this
nation.

All of this was made possible by an idea I spoke of when Mr. Gorbachev
was here--the belief that the most exciting revolution ever known to
humankind began with three simple words: "We the People," the
revolutionary notion that the people grant government its rights, and
not the other way around. And there's one lesson that has come home
powerfully to me, which I would offer to you now. Just as those who
created this Republic pledged to each other their lives, their fortunes,
and their sacred honor, so, too, America's leaders today must pledge to
each other that we will keep foremost in our hearts and minds not what
is best for ourselves or for our party but what is best for America.

In the spirit of Jefferson, let us affirm that in this Chamber tonight
there are no Republicans, no Democrats--just Americans. Yes, we will
have our differences, but let us always remember what unites us far
outweighs whatever divides us. Those who sent us here to serve them--the
millions of Americans watching and listening tonight--expect this of us.
Let's prove to them and to ourselves that democracy works even in an
election year. We've done this before. And as we have worked together to
bring down spending, tax rates, and inflation, employment has climbed to
record heights; America has created more jobs and better, higher paying
jobs; family income has risen for 4 straight years, and America's poor
climbed out of poverty at the fastest rate in more than 10 years.

Our record is not just the longest peacetime expansion in history but an
economic and social revolution of hope based on work, incentives,
growth, and opportunity; a revolution of compassion that led to private
sector initiatives and a 77-percent increase in charitable giving; a
revolution that at a critical moment in world history reclaimed and
restored the American dream.

In international relations, too, there's only one description for what,
together, we have achieved: a complete turnabout, a revolution. Seven
years ago, America was weak, and freedom everywhere was under siege.
Today America is strong, and democracy is everywhere on the move. From
Central America to East Asia, ideas like free markets and democratic
reforms and human rights are taking hold. We've replaced "Blame America"
with "Look up to America." We've rebuilt our defenses. And of all our
accomplishments, none can give us more satisfaction than knowing that
our young people are again proud to wear our country's uniform.

And in a few moments, I'm going to talk about three developments--arms
reduction, the Strategic Defense Initiative, and the global democratic
revolution--that, when taken together, offer a chance none of us would
have dared imagine 7 years ago, a chance to rid the world of the two
great nightmares of the postwar era. I speak of the startling hope of
giving our children a future free of both totalitarianism and nuclear
terror.

Tonight, then, we're strong, prosperous, at peace, and we are free. This
is the state of our Union. And if we will work together this year, I
believe we can give a future President and a future Congress the chance
to make that prosperity, that peace, that freedom not just the state of
our Union but the state of our world.

Toward this end, we have four basic objectives tonight. First, steps we
can take this year to keep our economy strong and growing, to give our
children a future of low inflation and full employment. Second, let's
check our progress in attacking social problems, where important gains
have been made, but which still need critical attention. I mean schools
that work, economic independence for the poor, restoring respect for
family life and family values. Our third objective tonight is global:
continuing the exciting economic and democratic revolutions we've seen
around the world. Fourth and finally, our nation has remained at peace
for nearly a decade and a half, as we move toward our goals of world
prosperity and world freedom. We must protect that peace and deter war
by making sure the next President inherits what you and I have a moral
obligation to give that President: a national security that is
unassailable and a national defense that takes full advantage of new
technology and is fully funded.

This is a full agenda. It's meant to be. You see, my thinking on the
next year is quite simple: Let's make this the best of 8. And that means
it's all out--right to the finish line. I don't buy the idea that this
is the last year of anything, because we're not talking here tonight
about registering temporary gains but ways of making permanent our
successes. And that's why our focus is the values, the principles, and
ideas that made America great. Let's be clear on this point. We're for
limited government, because we understand, as the Founding Fathers did,
that it is the best way of ensuring personal liberty and empowering the
individual so that every American of every race and region shares fully
in the flowering of American prosperity and freedom.

One other thing we Americans like--the future--like the sound of it, the
idea of it, the hope of it. Where others fear trade and economic growth,
we see opportunities for creating new wealth and undreamed-of
opportunities for millions in our own land and beyond. Where others seek
to throw up barriers, we seek to bring them down. Where others take
counsel of their fears, we follow our hopes. Yes, we Americans like the
future and like making the most of it. Let's do that now.

And let's begin by discussing how to maintain economic growth by
controlling and eventually eliminating the problem of Federal deficits.
We have had a balanced budget only eight times in the last 57 years. For
the first time in 14 years, the Federal Government spent less in real
terms last year than the year before. We took $73 billion off last
year's deficit compared to the year before. The deficit itself has moved
from 6.3 percent of the gross national product to only 3.4 percent. And
perhaps the most important sign of progress has been the change in our
view of deficits. You know, a few of us can remember when, not too many
years ago, those who created the deficits said they would make us
prosperous and not to worry about the debt, because we owe it to
ourselves. Well, at last there is agreement that we can't spend
ourselves rich.

Our recent budget agreement, designed to reduce Federal deficits by $76
billion over the next 2 years, builds on this consensus. But this
agreement must be adhered to without slipping into the errors of the
past: more broken promises and more unchecked spending. As I indicated
in my first State of the Union, what ails us can be simply put: The
Federal Government is too big, and it spends too much money. I can
assure you, the bipartisan leadership of Congress, of my help in
fighting off any attempt to bust our budget agreement. And this includes
the swift and certain use of the veto power.

Now, it's also time for some plain talk about the most immediate
obstacle to controlling Federal deficits. The simple but frustrating
problem of making expenses match revenues--something American families
do and the Federal Government can't--has caused crisis after crisis in
this city. Mr. Speaker, Mr. President, I will say to you tonight what I
have said before and will continue to say: The budget process has broken
down; it needs a drastic overhaul. With each ensuing year, the spectacle
before the American people is the same as it was this Christmas: budget
deadlines delayed or missed completely, monstrous continuing resolutions
that pack hundreds of billions of dollars worth of spending into one
bill, and a Federal Government on the brink of default.

I know I'm echoing what you here in the Congress have said, because you
suffered so directly. But let's recall that in 7 years, of 91
appropriations bills scheduled to arrive on my desk by a certain date,
only 10 made it on time. Last year, of the 13 appropriations bills due
by October 1st, none of them made it. Instead, we had four continuing
resolutions lasting 41 days, then 36 days, and 2 days, and 3 days,
respectively.

And then, along came these behemoths. This is the conference
report--1,053 pages, report weighing 14 pounds. Then this--a
reconciliation bill 6 months late that was 1,186 pages long, weighing 15
pounds. And the long-term continuing resolution--this one was 2 months
late, and it's 1,057 pages long, weighing 14 pounds. That was a total of
43 pounds of paper and ink. You had 3 hours--yes, 3 hours--to consider
each, and it took 300 people at my Office of Management and Budget just
to read the bill so the Government wouldn't shut down. Congress
shouldn't send another one of these. No, and if you do, I will not sign
it.

Let's change all this. Instead of a Presidential budget that gets
discarded and a congressional budget resolution that is not enforced,
why not a simple partnership, a joint agreement that sets out the
spending priorities within the available revenues? And let's remember
our deadline is October 1st, not Christmas. Let's get the people's work
done in time to avoid a footrace with Santa Claus. And, yes, this
year--to coin a phrase--a new beginning: 13 individual bills, on time
and fully reviewed by Congress.

I'm also certain you join me in saying: Let's help ensure our future of
prosperity by giving the President a tool that, though I will not get to
use it, is one I know future Presidents of either party must have. Give
the President the same authority that 43 Governors use in their States:
the right to reach into massive appropriation bills, pare away the
waste, and enforce budget discipline. Let's approve the line-item veto.

And let's take a partial step in this direction. Most of you in this
Chamber didn't know what was in this catchall bill and report. Over the
past few weeks, we've all learned what was tucked away behind a little
comma here and there. For example, there's millions for items such as
cranberry research, blueberry research, the study of crawfish, and the
commercialization of wildflowers. And that's not to mention the five or
so million ($.5 million) that--so that people from developing nations
could come here to watch Congress at work. I won't even touch that. So,
tonight I offer you this challenge. In 30 days I will send back to you
those items as rescissions, which if I had the authority to line them
out I would do so.

Now, review this multibillion-dollar package that will not undercut our
bipartisan budget agreement. As a matter of fact, if adopted, it will
improve our deficit reduction goals. And what an example we can set,
that we're serious about getting our financial accounts in order. By
acting and approving this plan, you have the opportunity to override a
congressional process that is out of control.

There is another vital reform. Yes, Gramm-Rudman-Hollings has been
profoundly helpful, but let us take its goal of a balanced budget and
make it permanent. Let us do now what so many States do to hold down
spending and what 32 State legislatures have asked us to do. Let us heed
the wishes of an overwhelming plurality of Americans and pass a
constitutional amendment that mandates a balanced budget and forces the
Federal Government to live within its means. Reform of the budget
process--including the line-item veto and balanced budget
amendment--will, together with real restraint on government spending,
prevent the Federal budget from ever again ravaging the family budget.

Let's ensure that the Federal Government never again legislates against
the family and the home. Last September 1 signed an Executive order on
the family requiring that every department and agency review its
activities in light of seven standards designed to promote and not harm
the family. But let us make certain that the family is always at the
center of the public policy process not just in this administration but
in all future administrations. It's time for Congress to consider, at
the beginning, a statement of the impact that legislation will have on
the basic unit of American society, the family.

And speaking of the family, let's turn to a matter on the mind of every
American parent tonight: education. We all know the sorry story of the
sixties and seventies--soaring spending, plummeting test scores--and
that hopeful trend of the eighties, when we replaced an obsession with
dollars with a commitment to quality, and test scores started back up.
There's a lesson here that we all should write on the blackboard a
hundred times: In a child's education, money can never take the place of
basics like discipline, hard work, and, yes, homework.

As a nation we do, of course, spend heavily on education--more than we
spend on defense. Yet across our country, Governors like New Jersey's
Tom Kean are giving classroom demonstrations that how we spend is as
important as how much we spend. Opening up the teaching profession to
all qualified candidates, merit pay--so that good teachers get A's as
well as apples--and stronger curriculum, as Secretary Bennett has
proposed for high schools--these imaginative reforms are making common
sense the most popular new kid in America's schools. How can we help?
Well, we can talk about and push for these reforms. But the most
important thing we can do is to reaffirm that control of our schools
belongs to the States, local communities and, most of all, to the
parents and teachers.

My friends, some years ago, the Federal Government declared war on
poverty, and poverty won. Today the Federal Government has 59 major
welfare programs and spends more than $100 billion a year on them. What
has all this money done? Well, too often it has only made poverty harder
to escape. Federal welfare programs have created a massive social
problem. With the best of intentions, government created a poverty trap
that wreaks havoc on the very support system the poor need most to lift
themselves out of poverty: the family. Dependency has become the one
enduring heirloom, passed from one generation to the next, of too many
fragmented families.

It is time--this may be the most radical thing I've said in 7 years in
this office--it's time for Washington to show a little humility. There
are a thousand sparks of genius in 50 States and a thousand communities
around the Nation. It is time to nurture them and see which ones can
catch fire and become guiding lights. States have begun to show us the
way. They've demonstrated that successful welfare programs can be built
around more effective child support enforcement practices and innovative
programs requiring welfare recipients to work or prepare for work. Let
us give the States more flexibility and encourage more reforms. Let's
start making our welfare system the first rung on America's ladder of
opportunity, a boost up from dependency, not a graveyard but a
birthplace of hope.

And now let me turn to three other matters vital to family values and
the quality of family life. The first is an untold American success
story. Recently, we released our annual survey of what graduating high
school seniors have to say about drugs. Cocaine use is declining, and
marijuana use was the lowest since surveying began. We can be proud that
our students are just saying no to drugs. But let us remember what this
menace requires: commitment from every part of America and every single
American, a commitment to a drugfree America. The war against drugs is a
war of individual battles, a crusade with many heroes, including
America's young people and also someone very special to me. She has
helped so many of our young people to say no to drugs. Nancy, much
credit belongs to you, and I want to express to you your husband's pride
and your country's thanks.'. Surprised you, didn't I?

Well, now we come to a family issue that we must have the courage to
confront. Tonight, I call America--a good nation, a moral people--to
charitable but realistic consideration of the terrible cost of abortion
on demand. To those who say this violates a woman's right to control of
her own body: Can they deny that now medical evidence confirms the
unborn child is a living human being entitled to life, liberty, and the
pursuit of happiness? Let us unite as a nation and protect the unborn
with legislation that would stop all Federal funding for abortion and
with a human life amendment making, of course, an exception where the
unborn child threatens the life of the mother. Our Judeo-Christian
tradition recognizes the right of taking a life in self-defense. But
with that one exception, let us look to those others in our land who cry
out for children to adopt. I pledge to you tonight I will work to remove
barriers to adoption and extend full sharing in family life to millions
of Americans so that children who need homes can be welcomed to families
who want them and love them.

And let me add here: So many of our greatest statesmen have reminded us
that spiritual values alone are essential to our nation's health and
vigor. The Congress opens its proceedings each day, as does the Supreme
Court, with an acknowledgment of the Supreme Being. Yet we are denied
the right to set aside in our schools a moment each day for those who
wish to pray. I believe Congress should pass our school prayer
amendment.

Now, to make sure there is a full nine member Supreme Court to interpret
the law, to protect the rights of all Americans, I urge the Senate to
move quickly and decisively in confirming Judge Anthony Kennedy to the
highest Court in the land and to also confirm 27 nominees now waiting to
fill vacancies in the Federal judiciary.

Here then are our domestic priorities. Yet if the Congress and the
administration work together, even greater opportunities lie ahead to
expand a growing world economy, to continue to reduce the threat of
nuclear arms, and to extend the frontiers of freedom and the growth of
democratic institutions.

Our policies consistently received the strongest support of the late
Congressman Dan Daniel of Virginia. I'm sure all of you join me in
expressing heartfelt condolences on his passing.

One of the greatest contributions the United States can make to the
world is to promote freedom as the key to economic growth. A creative,
competitive America is the answer to a changing world, not trade wars
that would close doors, create greater barriers, and destroy millions of
jobs. We should always remember: Protectionism is destructionism.
America's jobs, America's growth, America's future depend on
trade--trade that is free, open, and fair.

This year, we have it within our power to take a major step toward a
growing global economy and an expanding cycle of prosperity that reaches
to all the free nations of this Earth. I'm speaking of the historic free
trade agreement negotiated between our country and Canada. And I can
also tell you that we're determined to expand this concept, south as
well as north. Next month I will be traveling to Mexico, where trade
matters will be of foremost concern. And over the next several months,
our Congress and the Canadian Parliament can make the start of such a
North American accord a reality. Our goal must be a day when the free
flow of trade, from the tip of Tierra del Fuego to the Arctic Circle,
unites the people of the Western Hemisphere in a bond of mutually
beneficial exchange, when all borders become what the U.S.-Canadian
border so long has been: a meeting place rather than a dividing line.

This movement we see in so many places toward economic freedom is
indivisible from the worldwide movement toward political freedom and
against totalitarian rule. This global democratic revolution has removed
the specter, so frightening a decade ago, of democracy doomed to
permanent minority status in the world. In South and Central America,
only a third of the people enjoyed democratic rule in 1976. Today over
90 percent of Latin Americans live in nations committed to democratic
principles. And the resurgence of democracy is owed to these courageous
people on almost every continent who have struggled to take control of
their own destiny.

In Nicaragua the struggle has extra meaning, because that nation is so
near our own borders. The recent revelations of a former high-level
Sandinista major, Roger Miranda, show us that, even as they talk peace,
the Communist Sandinista government of Nicaragua has established plans
for a large 600,000-man army. Yet even as these plans are made, the
Sandinista regime knows the tide is turning, and the cause of Nicaraguan
freedom is riding at its crest. Because of the freedom fighters, who are
resisting Communist rule, the Sandinistas have been forced to extend
some democratic rights, negotiate with church authorities, and release a
few political prisoners.

The focus is on the Sandinistas, their promises and their actions. There
is a consensus among the four Central American democratic Presidents
that the Sandinistas have not complied with the plan to bring peace and
democracy to all of Central America. The Sandinistas again have promised
reforms. Their challenge is to take irreversible steps toward democracy.
On Wednesday my request to sustain the freedom fighters will be
submitted, which reflects our mutual desire for peace, freedom, and
democracy in Nicaragua. I ask Congress to pass this request. Let us be
for the people of Nicaragua what Lafayette, Pulaski, and Von Steuben
were for our forefathers and the cause of American independence.

So, too, in Afghanistan, the freedom fighters are the key to peace. We
support the Mujahidin. There can be no settlement unless all Soviet
troops are removed and the Afghan people are allowed genuine
self-determination. I have made my views on this matter known to Mr.
Gorbachev. But not just Nicaragua or Afghanistan--yes, everywhere we see
a swelling freedom tide across the world: freedom fighters rising up in
Cambodia and Angola, fighting and dying for the same democratic
liberties we hold sacred. Their cause is our cause: freedom.

Yet even as we work to expand world freedom, we must build a safer peace
and reduce the danger of nuclear war. But let's have no illusions. Three
years of steady decline in the value of our annual defense investment
have increased the risk of our most basic security interests,
jeopardizing earlier hard-won goals. We must face squarely the
implications of this negative trend and make adequate, stable defense
spending a top goal both this year and in the future.

This same concern applies to economic and security assistance programs
as well. But the resolve of America and its NATO allies has opened the
way for unprecedented achievement in arms reduction. Our recently signed
INF treaty is historic, because it reduces nuclear arms and establishes
the most stringent verification regime in arms control history,
including several forms of short-notice, on-site inspection. I submitted
the treaty today, and I urge the Senate to give its advice and consent
to ratification of this landmark agreement. Thank you very much.

In addition to the INF treaty, we're within reach of an even more
significant START agreement that will reduce U.S. and Soviet long-range
missile--or strategic arsenals by half. But let me be clear. Our
approach is not to seek agreement for agreement's sake but to settle
only for agreements that truly enhance our national security and that of
our allies. We will never put our security at risk--or that of our
allies--just to reach an agreement with the Soviets. No agreement is
better than a bad agreement.

As I mentioned earlier, our efforts are to give future generations what
we never had--a future free of nuclear terror. Reduction of strategic
offensive arms is one step, SDI another. Our funding request for our
Strategic Defense Initiative is less than 2 percent of the total defense
budget. SDI funding is money wisely appropriated and money well spent.
SDI has the same purpose and supports the same goals of arms reduction.
It reduces the risk of war and the threat of nuclear weapons to all
mankind. Strategic defenses that threaten no one could offer the world a
safer, more stable basis for deterrence. We must also remember that SDI
is our insurance policy against a nuclear accident, a Chernobyl of the
sky, or an accidental launch or some madman who might come along.

We've seen such changes in the world in 7 years. As totalitarianism
struggles to avoid being overwhelmed by the forces of economic advance
and the aspiration for human freedom, it is the free nations that are
resilient and resurgent. As the global democratic revolution has put
totalitarianism on the defensive, we have left behind the days of
retreat. America is again a vigorous leader of the free world, a nation
that acts decisively and firmly in the furtherance of her principles and
vital interests. No legacy would make me more proud than leaving in
place a bipartisan consensus for the cause of world freedom, a consensus
that prevents a paralysis of American power from ever occurring again.

But my thoughts tonight go beyond this, and I hope you'll let me end
this evening with a personal reflection. You know, the world could never
be quite the same again after Jacob Shallus, a trustworthy and
dependable clerk of the Pennsylvania General Assembly, took his pen and
engrossed those words about representative government in the preamble of
our Constitution. And in a quiet but final way, the course of human
events was forever altered when, on a ridge overlooking the Emmitsburg
Pike in an obscure Pennsylvania town called Gettysburg, Lincoln spoke of
our duty to government of and by the people and never letting it perish
from the Earth.

At the start of this decade, I suggested that we live in equally
momentous times, that it is up to us now to decide whether our form of
government would endure and whether history still had a place of
greatness for a quiet, pleasant, greening land called America. Not
everything has been made perfect in 7 years, nor will it be made perfect
in seven times 70 years, but before us, this year and beyond, are great
prospects for the cause of peace and world freedom.

It means, too, that the young Americans I spoke of 7 years ago, as well
as those who might be coming along the Virginia or Maryland shores this
night and seeing for the first time the lights of this Capital City--the
lights that cast their glow on our great halls of government and the
monuments to the memory of our great men--it means those young Americans
will find a city of hope in a land that is free.

We can be proud that for them and for us, as those lights along the
Potomac are still seen this night signaling as they have for nearly two
centuries and as we pray God they always will, that another generation
of Americans has protected and passed on lovingly this place called
America, this shining city on a hill, this government of, by, and for
the people.

Thank you, and God bless you.

NOTE: The President spoke at 9:07 p.m. in the House Chamber of the
Capitol. He was introduced by Jim Wright, Speaker of the House of
Representatives. The address was broadcast live on nationwide radio and
television.

***

State of the Union Address
by George Herbert Walker Bush
February 9, 1989


Mr. Speaker, Mr. President, and distinguished Members of the House and
Senate, honored guests, and fellow citizens:

Less than 3 weeks ago, I joined you on the West Front of this very
building and, looking over the monuments to our proud past, offered you
my hand in filling the next page of American history with a story of
extended prosperity and continued peace. And tonight I'm back to offer
you my plans as well. The hand remains extended; the sleeves are rolled
up; America is waiting; and now we must produce. Together, we can build
a better America.

It is comforting to return to this historic Chamber. Here, 22 years ago,
I first raised my hand to be sworn into public life. So, tonight I feel
as if I'm returning home to friends. And I intend, in the months and
years to come, to give you what friends deserve: frankness, respect,
and my best judgment about ways to improve America's future. In return,
I ask for an honest commitment to our common mission of progress. If we
seize the opportunities on the road before us, there'll be praise
enough for all. The people didn't send us here to bicker, and it's time
to govern.

And many Presidents have come to this Chamber in times of great crisis:
war and depression, loss of national spirit. And 8 years ago, I sat in
that very chair as President Reagan spoke of punishing inflation and
devastatingly high interest rates and people out of work--American
confidence on the wane. And our challenge is different. We're fortunate--a
much changed landscape lies before us tonight. So, I don't propose
to reverse direction. We're headed the right way, but we cannot rest.
We're a people whose energy and drive have fueled our rise to greatness.
And we're a forward-looking nation--generous, yes, but ambitious, not
for ourselves but for the world. Complacency is not in our character--not
before, not now, not ever.

And so, tonight we must take a strong America and make it even better.
We must address some very real problems. We must establish some very
clear priorities. And we must make a very substantial cut in the
Federal budget deficit. Some people find that agenda impossible, but
I'm presenting to you tonight a realistic plan for tackling it. My plan
has four broad features: attention to urgent priorities, investment in
the future, an attack on the deficit, and no new taxes. This budget
represents my best judgment of how we can address our priorities. There
are many areas in which we would all like to spend more than I propose;
I understand that. But we cannot until we get our fiscal house in order.

Next year alone, thanks to economic growth, without any change in the
law, the Federal Government will take in over $80 billion more than it
does this year. That's right--over $80 billion in new revenues, with
no increases in taxes. And our job is to allocate those new resources
wisely. We can afford to increase spending by a modest amount, but
enough to invest in key priorities and still cut the deficit by almost
40 percent in 1 year. And that will allow us to meet the targets set
forth in the Gramm-Rudman-Hollings law. But to do that, we must
recognize that growth above inflation in Federal programs is not
preordained, that not all spending initiatives were designed to be
immortal.

I make this pledge tonight: My team and I are ready to work with the
Congress, to form a special leadership group, to negotiate in good
faith, to work day and night--if that's what it takes--to meet the
budget targets and to produce a budget on time.

We cannot settle for business as usual. Government by continuing
resolution, or government by crisis, will not do. And I ask the
Congress tonight to approve several measures which will make budgeting
more sensible. We could save time and improve efficiency by enacting
2-year budgets. Forty-three Governors have the line-item veto. Presidents
should have it, too. And at the very least, when a President proposes
to rescind Federal spending, the Congress should be required to vote on
that proposal instead of killing it by inaction. And I ask the Congress
to honor the public's wishes by passing a constitutional amendment to
require a balanced budget. Such an amendment, once phased in, will
discipline both the Congress and the executive branch.

Several principles describe the kind of America I hope to build with
your help in the years ahead. We will not have the luxury of taking the
easy, spendthrift approach to solving problems because higher spending
and higher taxes put economic growth at risk. Economic growth provides
jobs and hope. Economic growth enables us to pay for social programs.
Economic growth enhances the security of the Nation, and low tax rates
create economic growth.

I believe in giving Americans greater freedom and greater choice. And I
will work for choice for American families, whether in the housing in
which they live, the schools to which they send their children, or the
child care they select for their young. You see, I believe that we have
an obligation to those in need, but that government should not be the
provider of first resort for things that the private sector can produce
better. I believe in a society that is free from discrimination and
bigotry of any kind. And I will work to knock down the barriers left by
past discrimination and to build a more tolerant society that will stop
such barriers from ever being built again.

I believe that family and faith represent the moral compass of the
Nation. And I'll work to make them strong, for as Benjamin Franklin
said: "If a sparrow cannot fall to the ground without His notice, can
a great nation rise without His aid? And I believe in giving people the
power to make their own lives better through growth and opportunity.
And together, let's put power in the hands of people.

Three weeks ago, we celebrated the bicentennial inaugural, the 200th
anniversary of the first Presidency. And if you look back, one thing is
so striking about the way the Founding Fathers looked at America. They
didn't talk about themselves. They talked about posterity. They talked
about the future. And we, too, must think in terms bigger than
ourselves. We must take actions today that will ensure a better
tomorrow. We must extend American leadership in technology, increase
long-term investment, improve our educational system, and boost
productivity. These are the keys to building a better future, and here
are some of my recommendations:

I propose almost $2.2 billion for the National Science Foundation to
promote basic research and keep us on track to double its budget by
1993.

I propose to make permanent the tax credit for research and development.

I've asked Vice President Quayle to chair a new Task Force on
Competitiveness.

And I request funding for NASA [National Aeronautics and Space
Administration] and a strong space program, an increase of almost $2.4
billion over the current fiscal year. We must have a manned space
station; a vigorous, safe space shuttle program; and more commercial
development in space. The space program should always go "full
throttle up. And that's not just our ambition; it's our destiny.

I propose that we cut the maximum tax rate on capital gains to increase
long-term investment. History on this is clear--this will increase
revenues, help savings, and create new jobs. We won't be competitive if
we leave whole sectors of America behind. This is the year we should
finally enact urban enterprise zones and bring hope to the inner cities.

But the most important competitiveness program of all is one which
improves education in America. When some of our students actually have
trouble locating America on a map of the world, it is time for us to
map a new approach to education. We must reward excellence and cut
through bureaucracy. We must help schools that need help the most. We
must give choice to parents, students, teachers, and principals; and we
must hold all concerned accountable. In education, we cannot tolerate
mediocrity. I want to cut that dropout rate and make America a more
literate nation, because what it really comes down to is this: The
longer our graduation lines are today, the shorter our unemployment
lines will be tomorrow.

So, tonight I'm proposing the following initiatives: the beginning of a
$500 million program to reward America's best schools, merit schools;
the creation of special Presidential awards for the best teachers in
every State, because excellence should be rewarded; the establishment
of a new program of National Science Scholars, one each year for every
Member of the House and Senate, to give this generation of students a
special incentive to excel in science and mathematics; the expanded use
of magnet schools, which give families and students greater choice; and
a new program to encourage alternative certification, which will let
talented people from all fields teach in our classrooms. I've said I'd
like to be the "Education President. And tonight, I'd ask you to join
me by becoming the "Education Congress.

Just last week, as I settled into this new office, I received a letter
from a mother in Pennsylvania who had been struck by my message in the
Inaugural Address. "Not 12 hours before, she wrote, "my husband and I
received word that our son was addicted to cocaine. He had the world at
his feet. Bright, gifted, personable--he could have done anything with
his life. And now he has chosen cocaine. "And please, she wrote,
"find a way to curb the supply of cocaine. Get tough with the pushers.
Our son needs your help.

My friends, that voice crying out for help could be the voice of your
own neighbor, your own friend, your own son. Over 23 million Americans
used illegal drugs last year, at a staggering cost to our nation's
well-being. Let this be recorded as the time when America rose up and
said no to drugs. The scourge of drugs must be stopped. And I am asking
tonight for an increase of almost a billion dollars in budget outlays
to escalate the war against drugs. The war must be waged on all fronts.
Our new drug czar, Bill Bennett, and I will be shoulder to shoulder in
the executive branch leading the charge.

Some money will be used to expand treatment to the poor and to young
mothers. This will offer the helping hand to the many innocent victims
of drugs, like the thousands of babies born addicted or with AIDS
because of the mother's addiction. Some will be used to cut the waiting
time for treatment. Some money will be devoted to those urban schools
where the emergency is now the worst. And much of it will be used to
protect our borders, with help from the Coast Guard and the Customs
Service, the Departments of State and Justice, and, yes, the U.S.
military.

I mean to get tough on the drug criminals. And let me be clear: This
President will back up those who put their lives on the line every
single day--our local police officers. My budget asks for beefed-up
prosecution, for a new attack on organized crime, and for enforcement
of tough sentences--and for the worst kingpins, that means the death
penalty. I also want to make sure that when a drug dealer is convicted
there's a cell waiting for him. And he should not go free because
prisons are too full. And so, let the word go out: If you're caught and
convicted, you will do time.

But for all we do in law enforcement, in interdiction and treatment, we
will never win this war on drugs unless we stop the demand for drugs.
So, some of this increase will be used to educate the young about the
dangers of drugs. We must involve the parents. We must involve the
teachers. We must involve the communities. And, my friends, we must
involve ourselves, each and every one of us in this concern.

One problem related to drug use demands our urgent attention and our
continuing compassion, and that is the terrible tragedy of AIDS. I'm
asking for $1.6 billion for education to prevent the disease and for
research to find a cure.

If we're to protect our future, we need a new attitude about the
environment. We must protect the air we breathe. I will send to you
shortly legislation for a new, more effective Clean Air Act. It will
include a plan to reduce by date certain the emissions which cause acid
rain, because the time for study alone has passed, and the time for
action is now. We must make use of clean coal. My budget contains full
funding, on schedule, for the clean coal technology agreement that
we've made with Canada. We've made that agreement with Canada, and we
intend to honor that agreement. We must not neglect our parks. So, I'm
asking to fund new acquisitions under the Land and Water Conservation
Fund. We must protect our oceans. And I support new penalties against
those who would dump medical waste and other trash into our oceans. The
age of the needle on the beaches must end.

And in some cases, the gulfs and oceans off our shores hold the promise
of oil and gas reserves which can make our nation more secure and less
dependent on foreign oil. And when those with the most promise can be
tapped safely, as with much of the Alaska National Wildlife Refuge, we
should proceed. But we must use caution; we must respect the
environment. And so, tonight I'm calling for the indefinite
postponement of three lease sales which have raised troubling questions,
two off the coast of California and one which could threaten the
Everglades in Florida. Action on these three lease sales will await the
conclusion of a special task force set up to measure the potential for
environmental damage.

I'm directing the Attorney General and the Administrator of the
Environmental Protection Agency to use every tool at their disposal to
speed and toughen the enforcement of our laws against toxic-waste
dumpers. I want faster cleanups and tougher enforcement of penalties
against polluters.

In addition to caring for our future, we must care for those around us.
A decent society shows compassion for the young, the elderly, the
vulnerable, and the poor. Our first obligation is to the most
vulnerable--infants, poor mothers, children living in poverty--and my
proposed budget recognizes this. I ask for full funding of Medicaid, an
increase of over $3 billion, and an expansion of the program to include
coverage of pregnant women who are near the poverty line. I believe we
should help working families cope with the burden of child care. Our
help should be aimed at those who need it most: low-income families
with young children. I support a new child care tax credit that will
aim our efforts at exactly those families, without discriminating
against mothers who choose to stay at home.

Now, I know there are competing proposals. But remember this: The
overwhelming majority of all preschool child care is now provided by
relatives and neighbors and churches and community groups. Families who
choose these options should remain eligible for help. Parents should
have choice. And for those children who are unwanted or abused or whose
parents are deceased, we should encourage adoption. I propose to
reenact the tax deduction for adoption expenses and to double it to
$3,000. Let's make it easier for these kids to have parents who love
them.

We have a moral contract with our senior citizens. And in this budget,
Social Security is fully funded, including a full cost-of-living
adjustment. We must honor our contract.

We must care about those in the shadow of life, and I, like many
Americans, am deeply troubled by the plight of the homeless. The causes
of homelessness are many; the history is long. But the moral imperative
to act is clear. Thanks to the deep well of generosity in this great
land, many organizations already contribute, but we in government
cannot stand on the sidelines. In my budget, I ask for greater support
for emergency food and shelter, for health services and measures to
prevent substance abuse, and for clinics for the mentally ill. And I
propose a new initiative involving the full range of government
agencies. We must confront this national shame.

There's another issue that I've decided to mention here tonight. I've
long believed that the people of Puerto Rico should have the right to
determine their own political future. Personally, I strongly favor
statehood. But I urge the Congress to take the necessary steps to allow
the people to decide in a referendum.

Certain problems, the result of decades of unwise practices, threaten
the health and security of our people. Left unattended, they will only
get worse. But we can act now to put them behind us.

Earlier this week, I announced my support for a plan to restore the
financial and moral integrity of our savings system. I ask Congress to
enact our reform proposals within 45 days. We must not let this
situation fester. We owe it to the savers in this country to solve this
problem. Certainly, the savings of Americans must remain secure. Let me
be clear: Insured depositors will continue to be fully protected, but
any plan to refinance the system must be accompanied by major reform.
Our proposals will prevent such a crisis from recurring. The best
answer is to make sure that a mess like this will never happen again.
The majority of thrifts in communities across the Nation have been
honest. They've played a major role in helping families achieve the
dream of home ownership. But make no mistake, those who are corrupt,
those who break the law, must be kicked out of the business; and they
should go to jail.

We face a massive task in cleaning up the waste left from decades of
environmental neglect at America's nuclear weapons plants. Clearly, we
must modernize these plants and operate them safely. That's not at
issue; our national security depends on it. But beyond that, we must
clean up the old mess that's been left behind. And I propose in this
budget to more than double our current effort to do so. This will allow
us to identify the exact nature of the various problems so we can clean
them up, and clean them up we will.

We've been fortunate during these past 8 years. America is a stronger
nation than it was in 1980. Morale in our Armed Forces has been
restored; our resolve has been shown. Our readiness has been improved,
and we are at peace. There can no longer be any doubt that peace has
been made more secure through strength. And when America is stronger,
the world is safer.

Most people don't realize that after the successful restoration of our
strength, the Pentagon budget has actually been reduced in real terms
for each of the last 4 years. We cannot tolerate continued real
reduction in defense. In light of the compelling need to reduce the
deficit, however, I support a 1-year freeze in the military budget,
something I proposed last fall in my flexible freeze plan. And this
freeze will apply for only 1 year, and after that, increases above
inflation will be required. I will not sacrifice American preparedness,
and I will not compromise American strength.

I should be clear on the conditions attached to my recommendation for
the coming year: The savings must be allocated to those priorities for
investing in our future that I've spoken about tonight. This defense
freeze must be a part of a comprehensive budget agreement which meets
the targets spelled out in Gramm-Rudman-Hollings law without raising
taxes and which incorporates reforms in the budget process.

I've directed the National Security Council to review our national
security and defense policies and report back to me within 90 days to
ensure that our capabilities and resources meet our commitments and
strategies. I'm also charging the Department of Defense with the task
of developing a plan to improve the defense procurement process and
management of the Pentagon, one which will fully implement the Packard
commission report. Many of these changes can only be made with the
participation of the Congress, and so, I ask for your help. We need
fewer regulations. We need less bureaucracy. We need multiyear
procurement and 2-year budgeting. And frankly--and don't take this
wrong--we need less congressional micromanagement of our nation's
military policy. I detect a slight division on that question, but
nevertheless-- [laughter].

Securing a more peaceful world is perhaps the most important priority
I'd like to address tonight. You know, we meet at a time of
extraordinary hope. Never before in this century have our values of
freedom, democracy, and economic opportunity been such a powerful and
intellectual force around the globe. Never before has our leadership
been so crucial, because while America has its eyes on the future, the
world has its eyes on America.

And it's a time of great change in the world, and especially in the
Soviet Union. Prudence and common sense dictate that we try to
understand the full meaning of the change going on there, review our
policies, and then proceed with caution. But I've personally assured
General Secretary Gorbachev that at the conclusion of such a review we
will be ready to move forward. We will not miss any opportunity to work
for peace. The fundamental facts remain that the Soviets retain a very
powerful military machine in the service of objectives which are still
too often in conflict with ours. So, let us take the new openness
seriously, but let's also be realistic. And let's always be strong.

There are some pressing issues we must address. I will vigorously
pursue the Strategic Defense Initiative. The spread, and even use, of
sophisticated weaponry threatens global security as never before.
Chemical weapons must be banned from the face of the Earth, never to be
used again. And look, this won't be easy. Verification--extraordinarily
difficult, but civilization and human decency demand
that we try. And the spread of nuclear weapons must be stopped. And
I'll work to strengthen the hand of the International Atomic Energy
Agency. Our diplomacy must work every day against the proliferation of
nuclear weapons.

And around the globe, we must continue to be freedom's best friend. And
we must stand firm for self-determination and democracy in Central
America, including in Nicaragua. It is my strongly held conviction that
when people are given the chance they inevitably will choose a free
press, freedom of worship, and certifiably free and fair elections.

We must strengthen the alliance of the industrial democracies, as solid
a force for peace as the world has ever known. And this is an alliance
forged by the power of our ideals, not the pettiness of our differences.
So, let's lift our sights to rise above fighting about beef hormones,
to building a better future, to move from protectionism to progress.

I've asked the Secretary of State to visit Europe next week and to
consult with our allies on the wide range of challenges and
opportunities we face together, including East-West relations. And I
look forward to meeting with our NATO partners in the near future.

And I, too, shall begin a trip shortly to the far reaches of the
Pacific Basin, where the winds of democracy are creating new hope and
the power of free markets is unleashing a new force. When I served as
our representative in China 14 or 15 years ago, few would have
predicted the scope of the changes we've witnessed since then. But in
preparing for this trip, I was struck by something I came across from a
Chinese writer. He was speaking of his country, decades ago, but his
words speak to each of us in America tonight. "Today, he said, "we're
afraid of the simple words like `goodness' and `mercy' and `kindness.'
My friends, if we're to succeed as a nation, we must rediscover those
words.

In just 3 days, we mark the birthday of Abraham Lincoln, the man who
saved our Union and gave new meaning to the word "opportunity. Lincoln
once said: "I hold that while man exists, it is his duty to improve
not only his own condition but to assist in ameliorating that of
mankind. It is this broader mission to which I call all Americans,
because the definition of a successful life must include serving others.

And to the young people of America, who sometimes feel left out, I ask
you tonight to give us the benefit of your talent and energy through a
new program called YES, for Youth Entering Service to America.

To those men and women in business, remember the ultimate end of your
work: to make a better product, to create better lives. I ask you to
plan for the longer term and avoid that temptation of quick and easy
paper profits.

To the brave men and women who wear the uniform of the United States of
America, thank you. Your calling is a high one: to be the defenders of
freedom and the guarantors of liberty. And I want you to know that this
nation is grateful for your service.

To the farmers of America, we appreciate the bounty you provide. We
will work with you to open foreign markets to American agricultural
products.

And to the parents of America, I ask you to get involved in your
child's schooling. Check on the homework, go to the school, meet the
teachers, care about what is happening there. It's not only your
child's future on the line, it's America's.

To kids in our cities, don't give up hope. Say no to drugs; stay in
school. And, yes, "Keep hope alive.

To those 37 million Americans with some form of disability, you belong
in the economic mainstream. We need your talents in America's work
force. Disabled Americans must become full partners in America's
opportunity society.

To the families of America watching tonight in your living rooms, hold
fast to your dreams because ultimately America's future rests in your
hands.

And to my friends in this Chamber, I ask your cooperation to keep
America growing while cutting the deficit. That's only fair to those
who now have no vote: the generations to come. Let them look back and
say that we had the foresight to understand that a time of peace and
prosperity is not the time to rest but a time to press forward, a time
to invest in the future.

And let all Americans remember that no problem of human making is too
great to be overcome by human ingenuity, human energy, and the untiring
hope of the human spirit. I believe this. I would not have asked to be
your President if I didn't. And tomorrow the debate on the plan I've
put forward begins, and I ask the Congress to come forward with your
own proposals. Let's not question each other's motives. Let's debate,
let's negotiate; but let us solve the problem.

Recalling anniversaries may not be my specialty in speeches--[laughter]--but
tonight is one of some note. On February 9th, 1941, just 48 years
ago tonight, Sir Winston Churchill took to the airwaves during
Britain's hour of peril. He'd received from President Roosevelt a
hand-carried letter quoting Longfellow's famous poem: "Sail on, O Ship of
State! Sail on, O Union, strong and great! Humanity with all its fears,
With all the hopes of future years, Is hanging breathless on thy fate!
And Churchill responded on this night by radio broadcast to a nation at
war, but he directed his words to Franklin Roosevelt. "We shall not
fail or falter, he said. "We shall not weaken or tire. Give us the
tools, and we will finish the job.

Tonight, almost half a century later, our peril may be less immediate,
but the need for perseverance and clear-sighted fortitude is just as
great. Now, as then, there are those who say it can't be done. There
are voices who say that America's best days have passed, that we're
bound by constraints, threatened by problems, surrounded by troubles
which limit our ability to hope. Well, tonight I remain full of hope.
We Americans have only begun on our mission of goodness and greatness.
And to those timid souls, I repeat the plea: "Give us the tools, and
we will do the job.

Thank you. God bless you, and God bless America.

***

State of the Union Address
George H.W. Bush
January 31, 1990

Tonight, I come not to speak about the "State of the Government", not to
detail every new initiative we plan for the coming year, nor describe
every line in the budget. I'm here to speak to you and to the American
people about the State of the Union about our world, the changes we've
seen, the challenges we face. And what that means for America.

There are singular moments in history, dates that divide all that goes
before from all that comes after. And many of us in this chamber have
lived much of our lives in a world whose fundamental features were
defined in 1945. And the events of that year decreed the shape of
nations, the pace of progress, freedom or oppression for millions of
people around the world.

Nineteen Forty-Five provided the common frame of reference the compass
points of the postwar era we've relied upon to understand ourselves. And
that was our world until now. The events of the year just ended, the
Revolution of '89, have been a chain reaction, changes so striking that
it marks the beginning of a new era in the world's affairs.

Think back think back just twelve short months ago to the world we knew
as 1989 began.

One year, one year ago the people of Panama lived in fear under the
thumb of a dictator. Today democracy is restored. Panama is free.

"Operation Just Cause" has achieved its objective. And the number of
military personel in Panama is now very close to what it was before the
operation began. And tonight I am announcing that before the end of
February the additional numbers of American troops, the brave men and
women of our armed forces who made this mission a success, will be back
home.

A year ago in Poland, Lech Walesa declared he was ready to open a
dialogue with the Communist rulers of that country. And today, with the
future of a free Poland in their own hands, members of Solidarity lead
the Polish government.

And a year ago, freedom's playwright, Vaclav Havel, languished as a
prisoner in Prague. And today it's Vaclav Havel, President of
Czechoslovakia.

And one year ago Erich Honecker of East Germany claimed history as his
guide. He predicted the Berlin Wall would last another hundred years.
And today, less than one year later, it's the wall that's history.

Remarkable events, remarkable events, events that fulfill the long-held
hopes of the American people. Events that validate the longstanding
goals of American policy, a policy based upon a single shining
principle: the cause of freedom.

America, not just the nation, but an idea alive in the minds of the
people, everywhere. As this new world takes shape, America stands at the
center of a widening circle of freedom, today, tomorrow and into the
next century.

Our nation is the enduring dream of every immigrant who ever set foot on
these shores, and the millions still struggling to be free. This nation,
this idea called America was and always will be a new world, our new
world.

At a workers' rally in a place called Branik on the outskirts of Prague
the idea called America is alive. A worker, dressed in grimy overalls,
rises to speak at the factory gates. And he begins his speech to his
fellow citizens with these words, words of a distant revolution: "We
hold these truths to be self-evident. That all men are created equal,
that they are endowed by their creator with certain unalienable rights,
and that among these are life, liberty and the pursuit of happiness."
It's no secret here at home freedom's door opened long ago. The
cornerstones of this free society have already been set in place:
democracy, competition, opportunity, private investment, stewardship,
and of course, leadership.

And our challenge today is to take this democratic system of ours, a
system second to none, and make it better:

A better America where there's a job for whoever wants one;

Where women working outside the home can be confident their children are
in safe and loving care, and where Government works to expand child
alternatives for parents.

Where we reconcile the needs of a clean environment and a strong
economy.

Where "Made in the USA" is recognized around the world as the symbol of
quality and progress,

And where every one of us enjoys the same opportunities to live, to work
and to contribute to society. And where, for the first time, the
American mainstream includes all of our disabled citizens.

Where everyone has a roof over his head, and where the homeless get the
help they need to live in dignity.

Where our schools challenge and support our kids and our teachers, and
every one of them makes the grade,

Where every street, every city, every school and every child is
drug-free.

And finally, and finally, where no American is forgotten. Our hearts go
out to our hostages, our hostages who are ceaselessly in our minds and
in our efforts. That's part of the future we want to see, the future we
can make for ourselves. But dreams alone won't get us there. We need to
extend our horizon, to commit to the long view. And our mission for the
future starts today.

In the tough competitive markets around the world, America faces the
great challenges and great opportunities. And we know that we can
succeed in the global economic arena of the 90's. But to meet that
challenge we must make some fundamental changes, some crucial
investments in ourselves.

Yes, we are going to invest in America. This Administration is
determined to encourage the creation of capital, capital of all kinds.
Physical capital: everything from our farms and factories to our
workshops and production lines, all that is needed to produce and
deliver quality goods and quality services. Intellectual, intellectual
capital: the source of ideas that spark tomorrow's products. And of
course human capital: the talented work force that we'll need to compete
in the global market.

And let me tell you, if we ignore human capital, if we lose the spirit
of American ingenuity, the sprit that is the hallmark of the AMERICAN
worker, that would be bad. The American worker is the most productive
worker in the world.

We need to save more. We need to expand the pool of capital for new
investments that mean more jobs and more growth. And that's the idea
behind the new initiative I call the Family Savings Plan, which I will
send to Congress tomorrow.

We need to cut the tax on capital gains, encourage, encourage
risk-takers, especially those in small businesses, to take those steps
that translate into economic reward, jobs, and a better life for all of
us.

We'll do what it takes to invest in America's future. The budget
commitment is there. The money is there. It's there for research and
development, R and D, a record high. It's there for our housing
initiative, hope, H-O-P-E, to help everyone from first-time homebuyers
to the homeless. The money's there to keep our kids drug-free, 70
percent more than when I took office in 1989. It's there for space
exploration, and its there for education, another record high.

And one more, and one more thing. Last fall at the education summit, the
governors and I agreed to look for ways to help make sure that our kids
are ready to learn the very first day they walk into the classroom. And
I've made good on that commitment by proposing a record increase in
funds, an extra half billion dollars, for something near and dear to all
of us: Head Start.

Education is the one investment that means more for our future, because
it means the most for our children. Real improvement in our schools is
not simply a matter of spending more. It's a matter of asking more,
expecting more, of our schools, our teachers, of our kids, of our
parents and of ourselves. And that's why tonight, and that's why
tonight, I am announcing America's education goals, goals developed with
enormous cooperation from the nation's governors. And if I might I'd
like to say I'm very pleased that Governor Gardner and Governor Clinton,
Governor Branstad, Governor Campbell, all of whom were very key in these
discussion, these deliberations, are with us here tonight.

By the, by the year 2000, every child must start school ready to learn.
The United States must increase the high school graduation rate to no
less than 90 percent. And we are going to make sure our schools'
diplomas mean something. In critical subjects, at the fourth, eighth,
and 12th grades, we must assess our students' performance.

By the, by the year 2000 U.S. students must be the first in the world in
math and science achievement. Every American adult must be a skilled,
literate worker and citizen. Every school must offer the kind of
disciplined environment that makes it possible for our kids to learn.
And every school in America must be drug-free.

Ambitious aims? Of course. Easy to do? Far from it. But the future's at
stake. The nation will not accept anything less than excellence in
education.

These investments will help keep America competitive. And I know this
about the American people: we welcome competition. We'll match our
ingenuity, our energy, our experience, and technology our spirit and
enterprise against anyone. But let the competition be free, but let it
also be fair. America is ready.

Since we really mean it, and since we're serious about being ready to
meet our challenge, we're getting our own house in order. We have made
real progress. Seven years ago, the Federal deficit was 6 percent of our
gross national product, 6 percent. In the new budget I sent up two days
ago the deficit is down to 1 percent of GNP.

That budget brings Federal spending under control. It meets the
Gramm-Rudman target. It brings the deficit down further. And balances
the budget by 1993, with no new taxes.

And let me tell you, there's still more than enough Federal spending.
For most of us, $1.2 trillion is still a lot of money.

And once the budget is balanced, we can operate the way every family
must when it has bills to pay. We won't leave it to our children and
grandchildren. Once it's balanced, we will start paying off the national
debt.

And there's something more, and there's something more we owe the
generations of the future: stewardship, the safekeeping of America's
precious environmental inheritance.

As just one sign of how serious we are, we will elevate the
Environmental Protection Agency to Cabinet rank. Not, not more
bureaucracy, not more red tape, but the certainty that here at home, and
especially in our dealings with other nations, environmental issues have
the status they deserve.

This year's budget provides over $2 billion in new spending to protect
our environment, with over $1 billion for global change research, and a
new initiative I call America the Beautiful to expand our national parks
and wildlife preserves and improve recreational facilities on public
lands.

And something else, something that will help keep this country clean,
from our forest land to the inner cities, and keep America beautiful for
generations to come, the money to plant a billion trees a year.

And tonight, and tonight let me say again to all the members of the
Congress, the American people did not send us here to bicker. There is
work to do, and they sent us here to get it done. And once again, in the
spirit of cooperation I offer my hand to all of you. And let's work
together to do the will of the people--clean air, child care, the
educational excellence act, crime and drugs. It's time to act. The farm
bill, transportation policy, product liability reform, enterprise zones.
It's time to act together.

And there's one thing I hope we can agree on. It's about our
commitments. And I'm talking about Social Security.

To every American out there on Social Security, to every, every American
supporting that system today, and to everyone counting on it when they
retire, we made a promise to you, and we are going to keep it.

We, we rescued the system in 1983 and it's sound again, bipartisan
arrangement. Our budget fully funds today's benefits and it assures that
future benefits will be funded as well. And the last thing we need to do
is mess around with Social Security.

There's one more problem we need to address. We must give careful
consideration to the recommendations of the health care studies under
way now. And that's why tonight, I am asking Dr. Sullivan, Lou Sullivan,
Secretary of Health and Human Services, to lead a Domestic Policy
Council review of recommendations on the quality, accessibility and cost
of our nation's health care system. I am committed to bring the
staggering costs of health care under control.

The State of the Government does indeed depend on many of us in this
very chamber. But the State of the Union depends on all Americans. We
must maintain the democratic decency that makes a nation out of millions
of individuals. And I've been appalled at the recent mail bombings
across this country. Every one of us must confront and condemn racism,
anti-Semitism, bigotry and hate. Not next week, not tomorrow, but right
now. Every single one of us.

The State of the Union depends on whether we help our neighbor, claim
the problems of our community as our own. We've got to step forward when
there's trouble, lend a hand, be what I call a point of light to a
stranger in need. We've got to take the time after a busy day to sit
down and read with our kids, help them with their homework, pass along
the values we had as children. And that's how we sustain the State of
the Union.

Every effort is important. It all adds up. It's doing the things that
give democracy meaning. It all adds up to who we are and who we will be.

And let me say, that so long as we remember the American idea, so long
as we live up to the American ideal, the State of the Union will remain
sound and strong.

And to those who worry that we've lost our way, well, I want you to
listen to parts of a letter written by James Markwell, Pvt. 1st Class
James Markwell, a 20-year-old Army medic to the First Battalion, 75th
Rangers. It's dated Dec. 18, the day before our armed forces went into
action in Panama. It's a letter servicemen write--and hope will never,
ever be sent. And sadly, Private Markwell's mother did receive this
letter. She passed it on to me out there in Cincinnati.

And here is some of what he wrote: "I've never been afraid of death, but
I know he is waiting at the corner...I've been trained to kill and to
save, and so has everyone else. I am frightened of what lays beyond the
fog, and yet... do not mourn for me. Revel in the life that I have died
to give you... But most of all, don't forget that the Army was my
choice. Something that I wanted to do. Remember I joined the Army to
serve my country and inure that you are free to do what you want and to
live your lives freely."

Let me add that Private Markwell was among the first to see battle in
Panama, and among the first to fall. But he knew what he believed in. He
carried the idea we call America in his heart.

I began tonight speaking about the changes we've seen this past year.
There is a new world of challenges and opportunities before us. And
there is a need for leadership that only America can provide.

Nearly 40 years ago, in his last address to the Congress, President
Harry Truman predicted such a time would come. He said, "As our world
grows stronger, more united, more attractive to men on both sides of the
Iron Curtain, then inevitably there will come a time of change within
the Communist world." Today, that change is taking place.

For more than 40 years, America and its allies held Communism in check
and insured that democracy would continue to exist. And today, with
Communism crumbling, our aim must be to insure democracy's advance, to
take the lead in forging peace and freedom's best hope, a great and
growing commonwealth of free nations.

And to the Congress and to all Americans, I say it is time to acclaim a
new consensus at home and abroad, a common vision of the peaceful world
we want to see.

Here in our own hemisphere it is time for all the people of the
Americas, North and South, to live in freedom.

In the Far East and Africa, it's time for the full flowering of free
governments and free markets that have served the engine of progress.

It is time to offer our hand to the emerging democracies of Eastern
Europe so that continent, for too long a continent divided, can see a
future whole and free.

It's time to build on our new relationship with the Soviet Union, to
endorse and encourage a peaceful process of internal change toward
democracy and economic opportunity.

We are in a period of great transition, great hope, and yet great
uncertainty. We recognize that the Soviet military threat in Europe is
diminishing, but we see little change in Soviet strategic modernization.
And, therefore, we must sustain our own strategic offense modernization
and the Strategic Defense Initiative.

But the time is right to move forward on a conventional arms control
agreement to move us to more appropriate levels of military forces in
Europe, a coherent defense program that insures the U.S. will continue
to be a catalyst for peaceful change in Europe. And I've consulted with
leaders of NATO. In fact I spoke by phone with President Gorbachev just
today.

And I agree with our European allies that an American military presence
in Europe is essential and that it should not be solely tied to the
Soviet military presence in Eastern Europe.

But our troop levels can still be lower. And so tonight I am announcing
a major new step for a further reduction in U.S. and Soviet manpower in
Central and Eastern Europe to 195,000 on each side.

This number, this number, this level, reflects the advice of our senior
military advisers. It's designed to protect American and European
interests and sustain NATO's defense strategy. A swift conclusion to our
arms control talks--conventional, chemical and strategic--must now be
our goal. And that time has come.

Still, we must recognize an unfortunate fact: in many regions of the
world tonight the reality is conflict, not peace. Enduring animosities
and opposing interests remain. And thus the cause of peace must be
served by an America strong enough and sure enough to defend our
interests and our ideals. It's this American idea that for the past four
decades helped inspire the Revolution of '89.

And here at home, and in the world, there is history in the making, and
history to be made. Six months ago, early in this season of change, I
stood at the gates of the Gdansk shipyard in Poland at the monument to
the fallen workers of Solidarity. It's a monument of simple majesty.
Three tall crosses rise up from the stones, and atop each cross, an
anchor, an ancient symbol of hope.

The anchor in our world today is freedom. Holding us steady in times of
change, a symbol of hope to all the world. And freedom is at the very
heart of the idea that is America. Giving life to the idea depends on
every one of us. Our anchor has always been faith and family.

In the last few days of this past monumentous year, our family was
blessed once more, celebrating the joy of life when a little boy became
our 12th grandchild. When I held the little guy for the first time, the
troubles at home and abroad seemed manageable, and totally in
perspective.

And now I know, I know you're probably thinking, Well, that's just a
grandfather talking.

Well, maybe you're right. But I've met a lot of children this past year
across this country, as all of you have. Everywhere from the Far East to
Eastern Europe. All kids are unique. Yet, all kids are alike. The
budding young environmentalist I met this month, who joined me in
exploring the Florida Everglades. The Little Leaguers I played catch
with in Poland, ready to go from Warsaw to the World Series. And even
the kids who are ill or alone--and God bless those boarder babies, born
addicted to drugs and AIDS--coping with problems no child should have to
face. But, you know, when it comes to hope and the future, every kid is
the same: full of dreams, ready to take on the world, all special
because they are the very future of freedom. And to them belongs this
new world I've been speaking about.

And so tonight, I'm going to ask something of every one of you. Now let
me start with my generation, with the grandparents out there. You are
our living link with the past. Tell your grandchildren the story of
struggles waged at home and abroad, of sacrifices freely made for
freedom's sake. And tell them your own story as well, because every
American has a story to tell.

And parents, your children look to you for direction and guidance. Tell
them of faith and family. Tell them we are one nation under God. Teach
them that of all the many gifts they can receive, liberty is their most
precious legacy. And of all the gifts they can give, the greatest, the
greatest is helping others.

And to the children and young people out there tonight, with you rests
our hope, all that America will mean in the years and decades ahead. Fix
your vision on a new century, your century, on dreams we cannot see, on
the destiny that is yours and yours alone.

And finally, let all Americans, all of us here in this chamber, the
symbolic center of democracy, affirm our allegiance to this idea we call
America. And let us remember that the State of the Union depends upon
each and every one of us.

God bless all of you. And may God bless this great nation, the United
States of America.

***

State of the Union Address
George H.W. Bush
January 29, 1991

Mr. President, Mr. Speaker, members of the United States Congress.

I come to this house of the people to speak to you and all Americans,
certain we stand at a defining hour.

Halfway around the world, we are engaged in a great struggle in the
skies and on the seas and sands. We know why we're there. We are
Americans--part of something larger than ourselves.

For two centuries we've done the hard work of freedom. And tonight we
lead the world in facing down a threat to decency and humanity.

What is at stake is more than one small country, it is a big idea--a new
world order, where diverse nations are drawn together in common cause to
achieve the universal aspirations of mankind: peace and security,
freedom, and the rule of law. Such is a world worthy of our struggle,
and worthy of our children's future.

The community of nations has resolutely gathered to condemn and repel
lawless aggression. Saddam Hussein's unprovoked invasion--his ruthless,
systematic rape of a peaceful neighbor--violated everything the
community of nations holds dear. The world has said this aggression
would not stand, and it will not stand.

Together, we have resisted the trap of appeasement, cynicism and
isolation that gives temptation to tyrants. The world has answered
Saddam's invasion with 12 United Nations resolutions, starting with a
demand for Iraq's immediate and unconditional withdrawal, and backed up
by forces from 28 countries of six continents. With few exceptions, the
world now stands as one.

The end of the cold war has been a victory for all humanity. A year and
a half ago, in Germany, I said our goal was a Europe whole and free.
Tonight, Germany is united. Europe has become whole and free, and
America's leadership was instrumental in making it possible.

The principle that has guided us is simple: our objective is to help the
Baltic peoples achieve their aspirations, not to punish the Soviet
Union. In our recent discussions with the Soviet leadership we have been
given representations, which, if fulfilled, would result in the
withdrawal of some Soviet forces, a re-opening of dialogue with the
republics, and a move away from violence.

We will watch carefully as the situation develops. And we will maintain
our contact with the Soviet leadership to encourage continued commitment
to democratization and reform.

If it is possible, I want to continue to build a lasting basis for
U.S.-Soviet cooperation, for a more peaceful future for all mankind.

The triumph of democratic ideas in Eastern Europe and Latin America, and
the continuing struggle for freedom elsewhere around the world all
confirm the wisdom of our nation's founders.

Tonight, we work to achieve another victory, a victory over tyranny and
savage aggression.

We in this Union enter the last decade of the 20th Century thankful for
all our blessings, steadfast in our purpose, aware of our difficulties
and responsive to our duties at home and around the world.

For two centuries, America has served the world as an inspiring example
of freedom and democracy. For generations, America has led the struggle
to preserve and extend the blessings of liberty. And today, in a rapidly
changing world, American leadership is indispensable. Americans know
that leadership brings burdens, and requires sacrifice.

But we also know why the hopes of humanity turn to us. We are Americans;
we have a unique responsibility to do the hard work of freedom. And when
we do, freedom works.

The conviction and courage we see in the Persian Gulf today is simply
the American character in action. The indomitable spirit that is
contributing to this victory for world peace and justice is the same
spirit that gives us the power and the potential to meet our challenges
at home.

We are resolute and resourceful. If we can selflessly confront evil for
the sake of good in a land so far away, then surely we can make this
land all it should be.

If anyone tells you America's best days are behind her, they're looking
the wrong way.

Tonight, I come before this house, and the American people, with an
appeal for renewal. This is not merely a call for new government
initiatives, it is a call for new initiative in government, in our
communities, and from every American--to prepare for the next American
century.

America has always led by example. So who among us will set this
example? Which of our citizens will lead us in this next American
century? Everyone who steps forward today, to get one addict off drugs;
to convince one troubled teen-ager not to give up on life; to comfort
one AIDS patient; to help one hungry child.

We have within our reach the promise of renewed America. We can find
meaning and reward by serving some purpose higher than ourselves--a
shining purpose, the illumination of a thousand points of light. It is
expressed by all who know the irresistible force of a child's hand, of a
friend who stands by you and stays there--a volunteer's generous
gesture, an idea that is simply right.

The problems before us may be different, but the key to solving them
remains the same: it is the individual--the individual who steps
forward. And the state of our Union is the union of each of us, one to
the other: the sum of our friendships, marriages, families and
communities.

We all have something to give. So if you know how to read, find someone
who can't. If you've got a hammer, find a nail. If you're not hungry,
not lonely, not in trouble--seek out someone who is.

Join the community of conscience. Do the hard work of freedom. That will
define the state of our Union.

Since the birth of our nation, "we the people" has been the source of
our strength. What government can do alone is limited, but the potential
of the American people knows no limits.

We are a nation of rock-solid realism and clear-eyed idealism. We are
Americans. We are the nation that believes in the future. We are the
nation that can shape the future.

And we've begun to do just that, by strengthening the power and choice
of individuals and families.

Together, these last two years, we've put dollars for child care
directly in the hands of patients instead of bureaucracies, unshackled
the potential of Americans with disabilities, applied the creativity of
the marketplace in the service of the environment, for clean air, and
made homeownership possible for more Americans.

The strength of a democracy is not in bureaucracy, it is in the people
and their communities. In everything we do, let us unleash the potential
of our most precious resource--our citizens. We must return to families,
communities, counties, cities, states and institutions of every kind,
the power to chart their own destiny, and the freedom and opportunity
provided by strong economic growth. That's what America is all about.

I know, tonight, in some regions of our country, people are in genuine
economic distress. I hear them.

Earlier this month Kathy Blackwell of Massachusetts wrote me about what
can happen when the economy slows down, saying, "My heart is aching, and
I think that you should know--your people out here are hurting badly."

I understand. And I'm not unrealistic about the future. But there are
reasons to be optimistic about our economy.

First, we don't have to fight double-digit inflation. Second, most
industries won't have to make big cuts in production because they don't
have big inventories piled up. And third, our exports are running solid
and strong. In fact, American businesses are exporting at a record rate.

So let's put these times in perspective. Together, since 1981, we've
created almost 20 million jobs, cut inflation in half and cut interest
rates in half.

Yes, the largest peacetime economic expansion in history has been
temporarily interrupted. But our economy is still over twice as large as
our closest competitor.

We will get this recession behind us and return to growth soon. We will
get on our way to a new record of expansion, and achieve the competitive
strength that will carry us into the next American century.

We should focus our efforts today on encouraging economic growth,
investing in the future and giving power and opportunity to the
individual.

We must begin with control of Federal spending. That's why I'm
submitting a budget that holds the growth in spending to less than the
rate of inflation. And that's why, amid all the sound and fury of last
year's budget debate, we put into law new, enforceable spending caps so
that future spending debates will mean a battle of ideas, not a bidding
war.

Though controversial, the budget agreement finally put the Federal
Government on a pay-as-you-go basis, and cut the growth of debt by
nearly $500 billion. And that frees funds for saving and job-creating
investment.

Now, let's do more. My budget again includes tax-free family savings
accounts; penalty-free withdrawals from I. R. A.'s for first-time
homebuyers; and, to increase jobs and growth, a reduced tax for
long-term capital gains.

I know their are differences among us about the impact and the effects
of a capital gains incentive. So tonight I am asking the Congressional
leaders and the Federal Reserve to cooperate with us in a study, led by
Chairman Alan Greenspan, to sort out our technical differences so that
we can avoid a return to unproductive partisan bickering.

But just as our efforts will bring economic growth now and in the
future, they must also be matched by long-term investments for the next
American century.

That requires a forward-looking plan of action, and that's exactly what
we will be sending to the Congress. We have prepared a detailed series
of proposals, that include: A budget that promotes investment in
America's future--in children, education, infrastructure, space and high
technology. Legislation to achieve excellence in education, building on
the partnership forged with the 50 governors at the education summit,
enabling parents to choose their children's schools and helping to make
America No. 1 in math and science. A blueprint for a new national
highway system, a critical investment in our transportation
infrastructure. A research and development agenda that includes record
levels of Federal investment and a permanent tax credit to strengthen
private R and D and create jobs. A comprehensive national energy
strategy that calls for energy conservation and efficiency, increased
development and greater use of alternative fuels. A banking reform plan
to bring America's financial system into the 21st Century, so that our
banks remain safe and secure and can continue to make job-creating loans
for our factories, businesses, and homebuyers. I do think there has been
too much pessimism. Sound banks should be making more sound loans, now.
And interest rates should be lower, now. In addition to these proposals,
we must recognize that our economic strength depends upon being
competitive in world markets. We must continue to expand America's
exports. A successful Uruguay Round of world trade negotiations will
create more real jobs, and more real growth, for all nations. You and I
know that if the playing field is level, America's workers and farmers
can outwork and outproduce anyone, anytime, anywhere.

And with the Mexican free trade agreement and our Enterprise for the
Americas Initiative we can help our partners strengthen their economies
and move toward a free trade zone throughout this entire hemisphere.

The budget also includes a plan of action right here at home to put more
power and opportunity in the hands of the individual. That means new
incentives to create jobs in our inner cities by encouraging investment
through enterprise zones. It also means tenant control and ownership of
public housing. Freedom and the power to choose should not be the
privilege of wealth. They are the birthright of every American.

Civil rights are also crucial to protecting equal opportunity. Every one
of us has a responsibility to speak out against racism, bigotry, and
hate. We will continue our vigorous enforcement of existing statutes,
and I will once again press the Congress to strengthen the laws against
employment discrimination without resorting to the use of unfair
preferences.

We're determined to protect another fundamental civil right: freedom
from crime and the fear that stalks our cities. The Attorney General
will soon convene a crime summit of the nation's law-enforcement
officials. And to help us support them we need a tough crime control
legislation, and we need it now.

As we fight crime, we will fully implement our nation strategy for
combatting drug abuse. Recent data show we are making progress, but much
remains to be done. We will not rest until the day of the dealer is
over, forever.

Good health care is every American's right and every American's
responsibility. So we are proposing an aggression program of new
prevention initiatives--for infants, for children, for adults, and for
the elderly-- to promote a healthier America and to help keep costs from
spiraling.

It's time to give people more choice in government by reviving the ideal
of the citizen politician who comes not to stay, but to serve. One of
the reasons there is so much support for term limitations is that the
American people are increasingly concerned about big-money influence in
politics. We must look beyond the next election, to the next generation.
The time has come to put the national interest ahead of the special
interest--and totally eliminate political action committees.

That would truly put more competition in elections and more power in the
hands of individuals. And where power cannot be put directly into the
hands of the individual, it should be moved closer to the people--away
from Washington.

The federal government too often treats government programs as if they
are of Washington, by Washington, and for Washington. Once established,
federal programs seem to become immortal.

It's time for a more dynamic program life cycle. Some programs should
increase. Some should decrease. Some should be terminated. And some
should be consolidated and turned over to the states.

My budget includes a list of programs for potential turnover totaling
more than $20 billion. Working with Congress and the governors, I
propose we select at least $15 billion in such programs and turn them
over to the states in a single consolidated grant, fully funded, for
flexible management by the states.

The value of this turnover approach is straightforward. It allows the
Federal Government to reduce overhead. It allows states to manage more
flexibly and more efficiently. It moves power and decision-making closer
to the people. And it re-enforces a theme of this Administration:
appreciation and encouragement of the innovative power of "states as
laboratories."

This nation was founded by leaders who understood that power belongs in
the hands of the people. They planned for the future. And so must
we--here and around the world.

As Americans, we know there are times when we must step forward and
accept our responsibility to lead the world away from the dark chaos of
dictators, toward the bright promise of a better day.

Almost 50 years ago, we began a long struggle against aggressive
totalitarianism. Now we face another defining hour for America and the
world.

There is no one more devoted, more committed to the hard work of
freedom, than every soldier and sailor, every marine, airman and
coastguardsman-- every man and every woman now serving in the Persian
Gulf.

Each of them has volunteered to provide for this nation's defense. And
now they bravely struggle to earn for America and for the world and for
future generations, a just and lasting peace.

Our commitment to them must be equal of their commitment to our country.
They are truly America's finest.

The war in the gulf is not a war we wanted. We worked hard to avoid war.
For more than five months we, along with the Arab League, the European
Community and the United Nations, tried every diplomatic avenue. U.N.
Secretary General Perez de Cuellar; Presidents Gorbachev, Mitterand,
Ozal, Mubarak, and Bendjedid; Kings Fahd and Hassan; Prime Ministers
Major and Andreotti--just to name a few--all worked for a solution. But
time and again Saddam Hussein flatly rejected the path of diplomacy and
peace.

The world well knows how this conflict began, and when: it began on
August 2nd, when Saddam invaded and sacked a small, defenseless
neighbor. And I am certain of how it will end. So that peace can
prevail, we will prevail.

Tonight I'm pleased to report that we are on course. Iraq's capacity to
sustain war is being destroyed. Our investment, our training, our
planning --all are paying off. Time will not be Saddam's salvation.

Our purpose in the Persian Gulf remains constant: to drive Iraq out from
Kuwait, to restore Kuwait's legitimate government, and to insure the
stability and security of this critical region.

Let me make clear what I mean by the region's stability and security. We
do not seek the destruction of Iraq, its culture or its people. Rather,
we seek an Iraq that uses its great resources not to destroy, not to
serve the ambitions of a tyrant, but to build a better life for itself
and its neighbors. We seek a Persian Gulf where conflict is no longer
the rule, where the strong are neither tempted nor able to intimidate
the weak.

Most Americans know instinctively why we are in the Gulf. They know we
had to stop Saddam now, not later. They know this brutal dictator will
do anything, will use any weapon, will commit any outrage, no matter how
many innocents must suffer.

They know we must make sure that control of the world's oil resources
does not fall into his hands only to finance further aggression. They
know that we need to build a new, enduring peace--based not on arms
races and confrontation, but on shared principles and the rule of law.

And we all realize that our responsibility to be the catalyst for peace
in the region does not end with the successful conclusion of this war.

Democracy brings the undeniable value of thoughtful dissent, and we have
heard some dissenting voices here at home, some reckless, most
responsible. But the fact the all the voices have the right to speak out
is one of the reasons we've been united in principle and purpose for 200
years.

Our progress in this great struggle is the result of years of vigilance
and a steadfast commitment to a strong defense. Now, with remarkable
technological advances like the Patriot missile, we can defend the
ballistic missile attacks aimed at innocent civilians.

Looking forward, I have directed that the S.D.I. program be refocused on
providing protection from limited ballistic missile strikes, whatever
their source. Let us pursue an S.D.I. program that can deal with any
future threat to the United States, to our forces overseas and to our
friends and allies.

The quality of American technology, thanks to the American worker, has
enabled us to successfully deal with difficult military conditions, and
help minimize the loss of life. We have given our men and women the very
best. And they deserve it.

We all have a special place in our hearts for the families of men and
women serving in the Gulf. They are represented here tonight, by Mrs.
Norman Schwarzkopf, and to all those serving with him. And to the
families, let me say, our forces in the gulf will not stay there one day
longer than is necessary to complete their mission.

The courage and success of the R.A.F. pilots--of the Kuwaiti, Saudi,
French, Canadians, Italians, the pilots of Qatar and Bahrain--all are
proof that for the first time since World War II, the international
community is united. The leadership of the United Nations, once only a
hoped-for ideal, is now confirming its founders' vision.

I am heartened that we are not being asked to bear alone the financial
burden of this struggle. Last year, our friends and allies provided the
bulk of the economic costs of Desert Shield, and having now received
commitments of over $40 billion for the first three months of 1991, I am
confident they will do no less as we move through Desert Storm.

But the world has to wonder what the dictator of Iraq is thinking. If he
thinks that by targeting innocent civilians in Israel and Saudi Arabia,
that he will gain an advantage--he is dead wrong. If he thinks that he
will advance his cause through tragic and despicable environmental
terrorism--he is dead wrong. And if he thinks that by abusing coalition
P.O.W.s, he will benefit--he is dead wrong.

We will succeed in the Gulf. And when we do, the world community will
have sent an enduring warning to any dictator or despot, present or
future, who contemplates outlaw aggression.

The world can therefore seize this opportunity to fulfill the long-held
promise of a new world order--where brutality will go unrewarded, and
aggression will meet collective resistance.

Yes, the United States bears a major share of leadership in this effort.
Among the nations of the world, only the United States of America has
had both the moral standing, and the means to back it up. We are the
only nation on this earth that could assemble the forces of peace.

This is the burden of leadership--and the strength that has made America
the beacon of freedom in a searching world.

This nation has never found glory in war. Our people have never wanted
to abandon the blessings of home and work, for distant lands and deadly
conflict. If we fight in anger, it is only because we have to fight at
all. And all of us yearn for a world where we will never have to fight
again.

Each of us will measure, within ourselves, the value of this great
struggle. Any cost in lives is beyond our power to measure. But the cost
of closing our eyes to aggression is beyond mankind's power to imagine.

This we do know: Our cause is just. Our cause is moral. Our cause is
right.

Let future generations understand the burden and the blessings of
freedom. Let them say, we stood where duty required us to stand.

Let them know that together, we affirmed America, and the world, as a
community of conscience.

The winds of change are with us now. The forces of freedom are united.
We move toward the next century, more confident than ever, that we have
the will at home and abroad, to do what must be done--the hard work of
freedom.

May God bless the United States of America.

***

State of the Union Address
George H.W. Bush
January 28, 1992

Mr. Speaker, Mr. President, distinguished members of Congress, honored
guests and fellow citizens:

I mean to speak tonight of big things, of big changes and the promises
they hold and of some big problems and how together we can solve them
and move our country forward as the undisputed leader of the age.

We gather tonight at a dramatic and deeply promising time in our
history, and in the history of man on earth. For in the past 12 months,
the world has known changes of almost biblical proportions. And even
now, months after the failed coup that doomed a failed system, I am not
sure we have absorbed the full impact, the full import of what happened.

But Communism died this year. Even as President, with the most
fascinating possible vantage point, there were times when I was so busy
helping to manage progress and lead change that I didn't always show the
joy that was in my heart But the biggest thing that has happened in the
world in my life, in our lives, is this: By the grace of God, America
won the Cold War. And there's another to be singled out, though it may
seem inelegant. I mean a mass of people called the American taxpayer. No
ever thinks to thank the people who pay country's bill or an alliance's
bill. But for a half Century now, the American people have shouldered
the burden and paid taxes that were higher than they would have been to
support a defense that was bigger than it would have been if imperial
communism had never existed. But it did. But it doesn't anymore. And
here is a fact I wouldn't mind the world acknowledging: The American
taxpayer bore the brunt of the burden, and deserves a hunk of the glory.

And so, now, for the first time in 35 years, our strategic bombers stand
down. No longer are they on round-the-clock alert. Tomorrow our children
will go to school and study history and how plants grow. And they won't
have, as my children did, air-raid drills in which they crawl under
their desks and cover their heads in case of nuclear war. My
grandchildren don't have to do that, and won't have the bad dreams
children once had in decades past. There are still threats. But the long
drawn-out dread is over.

A year ago tonight I spoke to you at a moment of high peril. American
forces had just unleashed Operation Desert Storm. And after 40 days in
the desert skies and 4 days on the ground, the men and women of
America's armed forces and our allies accomplished the goals that I
declared, and that you endorsed: we liberated Kuwait.

Soon after, the Arab world and Israel sat down to talk seriously, and
comprehensively, about peace, an historic first. And soon after that, at
Christmas, the last American hostages came home. Our policies were
vindicated.

Much good can come from the prudent use of power. And much good can come
from this: A world once divided into two armed camps now recognizes one
sole and pre-eminent power, the United States of America. And this they
regard with no dread. For the world trusts us with power, and the world
is right. They trust us to be fair, and restrained. They trust us to be
on the side of decency. They trust us to do what's right.

I use those words advisedly. A few days after the war began, I received
a telegram from Joanne Speicher, the wife of the first pilot killed in
the gulf, Lieutenant Commander Scott Speicher. Even in her grief, she
wanted me to know that some day, when her children were old enough, she
would tell them "that their father went away to war because it was the
right thing to do". She said it all. It was the right thing to do.

And we did it together. There were honest differences here, in this
chamber. But when the war began, you put your partisanship aside and
supported our troops. This is still a time for pride, but this is no
time to boast. For problems face us, and we must stand together once
again and solve them--and not let our country down.

Two years ago, I began planning cuts in military spending that reflected
the changes of the new era. But now, this year, with Imperial Communism
gone, that process can be accelerated. Tonight I can tell you of
dramatic changes in our strategic nuclear force. These are actions we
are taking on our own, because they are the right thing to do.

After completing 20 planes for which we have begun procurement, we will
shut down production of the B-2 bomber. We will cancel the ICBM program.
We will cease production of new warheads for our sea-based missiles. We
will stop all production of the peacekeeper missile. And we will not
purchase any more advanced cruise missiles.

This weekend I will meet at Camp David with Boris Yeltsin of the Russian
Federation. I have informed President Yeltsin that if the commonwealth,
the former Soviet Union, will eliminate all land-based multiple-warhead
ballistic missiles, I will do the following: We will eliminate all
Peacekeeper missiles. We will reduce the number of warheads on Minuteman
missiles to one and reduce the number of warheads on our sea-based
missiles by about one-third. And we will convert a substantial portion
of our strategic to primarily conventional use.

President Yeltsin's early response has been very positive, and I expect
our talks at Camp David to be fruitful. I want you to know that for half
a century, American presidents have longed to make such decisions and
say such words. But even in the midst of celebration, we must keep
caution as a friend. For the world is still a dangerous place. Only the
dead have seen the end of conflict. And though yesterday's challenges
are behind us, tomorrow's are being born.

The Secretary of defense recommended these cuts after consultation with
the joint chiefs of staff. And I make them with confidence. But do not
misunderstand me: The reductions I have approved will save us an
additional $50 billion over the next five years. By 1997 we will have
cut defense by 30 percent since I took office. These cuts are deep, and
you must know my resolve: this deep, and no deeper. To do less would be
insensible to progress, but to do more would be ignorant of history. We
must not go back to the days of "the hollow army". We cannot repeat the
mistakes made twice in this century when armistice was followed by
recklessness and defense was purged as if the world was permanently
safe.

I remind you this evening that I have asked for your support in funding
a program to protect our country from limited nuclear missile attack. We
must have this protection because too many people in too many countries
have access to nuclear arms. There are those who say that now we can
turn away from the world, that we have no special role, no special
place. But we are the United States of America, the leader of the West
that has become the leader of the world.

As long as I am President we will continue to lead in support of freedom
everywhere, not out of arrogance and not out of altruism, but for the
safety and security of our children. This is a fact: Strength in the
pursuit of peace is no vice; isolationism in the pursuit of security is
no virtue.

Now to our troubles at home. They are not all economic, but the primary
problem is our economy. There are some good signs. Inflation, that
thief, is down, and interest rates are down. But unemployment is too
high, some industries are in trouble and growth is not what it should
be. Let me tell you right from the start and right from the heart: I
know we're in hard times, but I know something else: This will not
stand.

My friends in this chamber, we can bring the same courage and sense of
common purpose to the economy that we brought to Desert Storm. And we
can defeat hard times together. I believe you will help. One reason is
that you're patriots, and you want the best for your country. And I
believe that in your hearts you want to put partisanship aside and get
the job done, because it's the right thing to do.

The power of America rests in a stirring but simple idea: that people
will do great things if only you set them free. Well, we're going to
have to set the economy free, for if this age of miracles and wonders
has taught us anything, it's that if we can change the world, we can
change America.

We must encourage investment. We must make it easier for people to
invest money and make new products, new industries, and new jobs. We
must clear away obstacles to new growth: high taxes, high regulation,
red tape, and yes, wasteful government spending. None of this will
happen with a snap of the fingers, but it will happen. And the test of a
plan isn't whether it's called new or dazzling. The American people
aren't impressed by gimmicks. They're smarter on this score than all of
us in this room. The only test of a plan is, It is sound and will it
work? We must have a short-term plan to address our immediate needs and
heat up the economy. And then we need a long-term plan to keep the
combustion going and to guarantee our place in the world economy.

There are certain things that a president can do without Congress, and I
am going to do them. I have this evening asked major cabinet departments
and federal agencies to institute a 90-day moratorium on any new federal
regulations that could hinder growth. In those 90 days, major
departments and agencies will carry out a top-to-bottom review of all
regulations, old and new, to stop the ones that will hurt growth and
speed up those that will help growth.

Further, for the untold number of hard-working, responsible American
workers and businessmen and women who've been forced to go without
needed bank loans, the banking credit crunch must end. I won't neglect
my responsibility for sound regulations that serve the public good, but
regulatory overkill must be stopped. And I have instructed our
government regulators to stop it.

I have directed Cabinet departments and federal agencies to speed up
pro-growth expenditures as quickly as possible. This should put an extra
$10 billion into the economy in the next six months. And our new
transportation bill provides more than $150 billion for construction and
maintenance projects that are vital to our growth and well-being. That
means jobs building roads, jobs building bridges and jobs building
railways. And I have this evening directed the secretary of the Treasury
to change the federal tax withholding tables. With this change, millions
of Americans from whom the government withholds more than necessary can
now choose to have the government withhold less from their paychecks.
Something tells me a number of taxpayers may take us up on this one.
This initiative could return about $25 billion back into the economy
over the next 12 months, money people can use to help pay for clothing,
college or a new car. And finally, working with the Federal Reserve, we
will continue to support monetary policy that keeps both interest rates
and inflation down.

Now these are the things that I can do. And now, members of Congress,
let me tell you what you can do for your country. You must, you must
pass the other elements of my plan to meet our economic needs. Everyone
knows investment speeds recovery. And I am proposing this evening a
change in the alternative minimum tax, and the creation of a new 15%
investment tax allowance. This will encourage businesses to accelerate
investment and bring people back to work. Real estate has led our
economy out of almost all the tough times we've ever had. Once building
starts, carpenters and plumbers work, people buy homes and take out
mortgages.

My plan would modify the passive-loss rule for active real-estate
developers. And it would make it easier for pension plans to purchase
real estate. For those Americans who dream of buying a first home but
who can't quite afford it, my plan would allow first-time home buyers to
withdraw savings from IRAs without penalty and provide a $5000 tax
credit for the first purchase of that home.

And finally, my immediate plan calls on Congress to give crucial help to
people who own a home, to every one who has a business, a farm or a
single investment.

This time, at this hour, I cannot take "No" for an answer. You must cut
the capital gains tax on the people of this country. Never has an issue
been so demagogued by its opponents. But the demagogues are wrong. They
are wrong, and they know it. Sixty percent of people who benefit from
lower capital gains have incomes under $50,000. A cut in the capital
gains tax increases jobs and helps just about everyone in our country.
And so I'm asking you to cut the capital gains tax to a maximum of
15.4%. And I'll tell you, I'll tell you, those of you who say, "Oh no,
someone who's comfortable may benefit from this" you kind of remind me
of the old definition of the Puritan, who couldn't sleep at night
worrying that somehow someone somewhere was out having a good time.

The opponents of this measure and those who've authored various
so-called soak-the-rich bills that are floating around this chamber
should be reminded of something: When they aim at the big guy, they
usually hit the little guy. And maybe it's time that stopped.

This then is my short-term plan. Your part, members of Congress,
requires enactment of these common-sense proposals that will have a
strong effect on the economy, without breaking the budget agreement and
without raising tax rates. And while my plan is being passed and kicking
in, we've got to care for those in trouble today. I have provided for up
to $4.4 billion in my budget to extend federal unemployment benefits,
and I ask for Congressional action right away. And I thank the
committee--well, at last. And let's be frank. Let's be frank; let me
level with you.

I know, and you know, that my plan is unveiled in a political season. I
know, and you know, that everything I propose will be viewed by some in
merely partisan terms. But I ask you to know what is in my heart. And my
aim is to increase our nation's good. And I'm doing what I think is
right; I'm proposing what I know will help. I pride myself that I'm a
prudent man, and I believe that patience is a virtue, but I understand
politics is, for some, a game and that sometimes the game is to stop all
progress and then decry the lack of improvement. But let me tell you,
let me tell you, far more important than my political future--and far
more important than yours--is the well-being of our country. And members
of this chamber, members of this chamber, are practical people, and I
know you won't resent some practical advice: When people put their
party's fortunes, whatever the party, whatever the side of this aisle,
before the public good, they court defeat not only for their country,
but for themselves. And they will certainly deserve it.

And I submit my plan tomorrow. And I am asking you to pass it by March
20. From the day after that--if it must be--the battle is joined. And
you know, when principle is at stake, I relish a good fair fight.

I said my plan has two parts, and it does. And it's the second part that
is the heart of the matter. For it's not enough to get an immediate
burst. We need long-term improvement in our economic position. We all
know that the key to our economic future is to insure that America
continues as the economic leader of the world. We have that in our
power. Here, then, is my long-term plan to guarantee our future.

First, trade: We will work to break down the walls that stop world
trade. We will work to open markets everywhere. And in our major trade
negotiations, I will continue pushing to eliminate tariffs and subsidies
that damage America's farmers and workers. And we'll get more good
American jobs within our own hemisphere through the North American Free
Trade Agreement, and through the Enterprise for the Americas Initiative.
But changes are here, and more are coming. The work place of the future
will demand more highly skilled workers than ever, people who are
computer literate, highly educated.

And we must be the world's leader in education. And we must
revolutionize America's schools. My America 2000 strategy will help us
reach that goal. My plan will give parents more choice, give teachers
more flexibility and help communities create new American schools.
Thirty states across the nation have established America 2000 programs.
Hundreds of cities and towns have joined. Now Congress must join this
great movement. Pass my proposals for new American schools.

That was my second long-term proposal. And here's my third: We must make
common-sense investments that will help us compete, long-term, in the
marketplace. We must encourage research and development. My plan is to
make the R and D tax credit permanent, and to provide record levels of
support, over $76 billion this year alone for people who explore the
promise of emerging technologies.

And fourth, we must do something about crime and drugs. And it is time
for a major renewed investment in fighting violent street crime. Its
saps our strength and hurts our faith in our society, and in our future
together. Surely a tired woman on her way to work at six in the morning
on a subway deserves the right to get there safely. And surely, it's
true that everyone who changes his or her way of life because of
crime--from those afraid to go our at night to those afraid to walk in
the parks they pay for--surely those people have been denied a basic
civil right. It is time to restore it. Congress, pass my comprehensive
crime bill. It is tough on criminals and supportive of police, and it
has been languishing in these hallowed halls for years now. Pass it.
Help your country.

And fifth, I ask you tonight to fund our HOPE housing proposal and to
pass my enterprise-zone legislation, which will get businesses into the
inner city. We must empower the poor with the pride that comes from
owning a home, getting a job, becoming part of things. My plan would
encourage real estate construction by extending tax incentives for
mortgage-revenue bonds and low-income housing. And I ask tonight for
record expenditures for the program that helps children born into want
move into excellence: Head Start.

Step six: We must reform our health care system for this too, bears on
whether or not we can compete in the world. American health costs have
been exploding. This year America will spend over $800 billion on
health, and that is expected to grow to $1.6 trillion by the end of the
decade. We simply cannot afford this. The cost of health care shows up
not only in your family budget, but in the price of everything we buy
and everything we sell. When health coverage for a fellow on the
assembly line costs thousands of dollars, the cost goes into the product
he makes. And you pay the bill. Now we must make a choice.

Now some pretend we can have it both ways: they call it play or pay. But
that expensive approach is unstable. It will mean higher taxes, fewer
jobs, and eventually, a system under complete government control.
Really, there are only two options. And we can move toward a
nationalized system, a system which will restrict patient choice in
picking a doctor and force the government to ration services
arbitrarily. And what we'll get is patients in long lines, indifferent
service and a huge new tax burden. Or we can reform our own private
health-care system, which still gives us, for all its flaws, the best
quality health care in the world. Well, let's build on our strengths.

My plan provides insurance security for all Americans while preserving
and increasing the idea of choice. We make basic health insurance
affordable for all low-income people not now covered. We do it by
providing a health-insurance tax credit of up to $3750 for each
low-income family. The middle class gets help, too. And by reforming the
health insurance market, my plan assures that Americans will have access
to basic health insurance even if they change jobs or develop serious
health problem We must bring costs under control, preserve quality,
preserve choice and reduce people's nagging daily worry about health
insurance. My plan, the details of which I will announce shortly, does
just that.

And seventh, we must get the federal deficit under control. We now have
in law, enforcable spending caps, and a requirement that we pay for the
programs we create. There are those in Congress who would ease that
discipline now. But I cannot let them do it. And I won't. My plan would
freeze all domestic discretionary budget authority which means "No more
next year than this year". I will not tamper with Social Security but I
would put real caps on the growth of uncontrolled spending. And I would
also freeze federal domestic government employment. And with the help of
Congress, my plan will get rid of 246 programs that don't deserve
federal funding. Some of them have noble titles, but none of them is
indispensible. We can get rid of each and every one of them.

You know, it's time we rediscovered a home truth the American people
have never forgotten: the government is too big and spends too much. And
I call on Congress to adopt a measure that will help put an end to the
annual ritual of filling the budget with pork-barrel appropriations.
Every year, the press has a field day making fun of outrageous examples,
a Lawrence Welk Museum, a research grant for Belgian Endive. We all know
how these things get into the budget, and maybe you need someone to help
you say no. I know how to say it. And you know what I need to make it
stick. Give me the same thing 43 governors have--the line-item veto--and
let me help you control spending.

We must put an end to unfinanced government mandates. These are the
requirements Congress puts on our cities, counties and states without
supplying the money. And if Congress passes a mandate, it should be
forced to pay for it and balance the cost with savings elsewhere. After
all, a mandate just increases someone else's tax burden, and that means
higher taxes at the state and local level.

Step Eight: Congress should enact the bold reform proposals that are
still awaiting congressional action: bank reform, civil justice reform,
tort reform, and my national energy strategy.

And finally, we must strengthen the family, because it is the family
that has the greatest bearing on our future. When Barbara holds an AIDS
baby in her arms and reads to children, she's saying to every person in
this country, "Family Matters".

And I am announcing tonight a new commission on America's urban
families. I've asked Missouri's governor, John Ashcroft, to be chairman,
former Dallas Mayor Annetter Strauss to be co-chair. You know, I had
Mayors, the leading mayors from the League of Cities, in the other day
at the White House, and they told me something striking. They said that
every one of them, Republican and Democrat, agreed on one thing: That
the major cause of the problems of the cities is the dissolution of the
family. And they asked for this commission, and they were right to ask,
because it's time to determine what we can do to keep families together,
strong and sound.

There's one thing we can do right away: Ease the burden of rearing a
child. I ask you tonight to raise the personal exemption by $500 per
child for every family. For a family with four kids, that's an increase
of $2000. This is a good start in the right direction, and it's what we
can afford. It's time to allow families to deduct the interest they pay
on student loans. And I'm asking you to do just that. And I'm asking you
to allow people to use money from their IRAs to pay medical and
educational expenses, all without penalties. And I'm asking for more.
Ask American parents what they dislike about how things are going in our
country, and chances are good that pretty soon they'll get to welfare.

Americans are the most generous people on Earth. But we have to go back
to the insight of Franklin Roosevelt who, when he spoke of what became
the welfare program, want that it must not become a narcotic and a
subtle destroyer of the spirit. Welfare was never meant to be a life
style. It was never meant to be a habit. It was never supposed to be
passed on from generation to generation like a legacy. It's time to
replace the assumptions of the welfare state and help reform the welfare
system.

States throughout the country are beginning to operate with new
assumptions: that when able-bodied people receive government assistance
they have responsibilities to the taxpayer. A responsibility to seek
work, education, or job training. A responsibility to get their lives in
order. A responsibility to hold their families together and refrain from
having children out of wedlock. And a responsibility to obey the law. We
are going to help this movement. Often, state reform requires waiving
certain federal regulations. I will act to make that process easier and
quicker for every state that asks our help. And I want to add, as we
make these changes, we work together to improve this system, that our
intention is not scapegoating and finger-pointing. If you read the
papers or watch TV you know there's been a rise these days in a certain
kind of ugliness: racist comments, anti-Semitism, an increased sense of
division. Really, this is not us. This is not who we are. And this is
not acceptable.

And so you have my plan for America. And I am asking for big things, but
I believe in my heart you will do what's right.

And you know, it's kind of an American tradition to show a certain
skepticism toward our democratic institutions. I myself have sometimes
thought the aging process could be delayed if it had to make its way
through Congress. But you will deliberate, and you will discuss, and
that is fine. But my friends the people cannot wait. They need help now.
And there's a mood among us. People are worried. There has been talk of
decline. Someone even said our workers are lazy and uninspired. And I
thought, "Really? Go tell Neil Armstrong standing on the moon. Tell the
American farmer who feeds his country and the world. Tell the men and
women of Desert Storm." Moods come and go, but greatness endures. Our
does.

And maybe for a moment it's good to remember what, in the dailyness of
our lives, we forget. We are still and ever the freest nation on Earth,
the kindest nation on Earth, the strongest nation on Earth. And we have
always risen to the occasion. And we are going to lift this nation out
of hard times inch by inch and day by day, and those who would stop us
better step aside. Because I look at hard times and I make this vow:
This will not stand. And so we move on, together, a rising nation, the
once and future miracle that is still, this night, the hope of the
world.

***

State of the Union Address
by Bill Clinton
February 17, 1993


The speech was not officially deemed a "State of the Union address";
like the freshman addresses of President George H. W. Bush, President
Clinton treated this speech as simply an "Address to a Joint Session of
Congress."


Mr. President, Mr. Speaker, Members of the House and the Senate,
distinguished Americans here as visitors in this Chamber, as am I. It
is nice to have a fresh excuse for giving a long speech. [Laughter]

When Presidents speak to Congress and the Nation from this podium,
typically they comment on the full range in challenges and
opportunities that face the United States. But this is not an ordinary
time, and for all the many tasks that require our attention, I believe
tonight one calls on us to focus, to unite, and to act. And that is our
economy. For more than anything else, our task tonight as Americans is
to make our economy thrive again.

Let me begin by saying that it has been too long, at least three
decades, since a President has come and challenged Americans to join
him on a great national journey, not merely to consume the bounty of
today but to invest for a much greater one tomorrow.

Like individuals, nations must ultimately decide how they wish to
conduct themselves, how they wish to be thought of by those with whom
they live, and later, how they wish to be judged by history. Like every
individual man and woman, nations must decide whether they are prepared
to rise to the occasions history presents them.

We have always been a people of youthful energy and daring spirit. And
at this historic moment, as communism has fallen, as freedom is
spreading around the world, as a global economy is taking shape before
our eyes, Americans have called for change. And now it is up to those
of us in this room to deliver for them.

Our Nation needs a new direction. Tonight I present to you a
comprehensive plan to set our Nation on that new course. I believe we
will find our new direction in the basic old values that brought us
here over the last two centuries: a commitment to opportunity, to
individual responsibility, to community, to work, to family, and to
faith. We must now break the habits of both political parties and say
there can be no more something for nothing and admit frankly that we
are all in this together.

The conditions which brought us as a nation to this point are 
well-known: two decades of low productivity, growth, and stagnant wages;
persistent unemployment and underemployment; years of huge Government
deficits and declining investment in our future; exploding health care
costs and lack of coverage for millions of Americans; legions of poor
children; education and job training opportunities inadequate to the
demands of this tough, global economy. For too long we have drifted
without a strong sense of purpose or responsibility or community.

And our political system so often has seemed paralyzed by special
interest groups, by partisan bickering, and by the sheer complexity of
our problems. I believe we can do better because we remain the greatest
nation on Earth, the world's strongest economy, the world's only
military superpower. If we have the vision, the will, and the heart to
make the changes we must, we can still enter the 21st century with
possibilities our parents could not even have imagined and enter it
having secured the American dream for ourselves and for future
generations.

I well remember 12 years ago President Reagan stood at this very podium
and told you and the American people that if our national debt were
stacked in thousand-dollar bills, the stack would reach 67 miles into
space. Well, today that stack would reach 267 miles. I tell you this
not to assign blame for this problem. There is plenty of blame to go
around in both branches of the Government and both parties. The time
has come for the blame to end. I did not seek this office to place
blame. I come here tonight to accept responsibility, and I want you to
accept responsibility with me. And if we do right by this country, I do
not care who gets the credit for it.

The plan I offer you has four fundamental components. First, it shifts
our emphasis in public and private spending from consumption to
investment, initially by jumpstarting the economy in the short term and
investing in our people, their jobs, and their incomes over the long
run. Second, it changes the rhetoric of the past into the actions of
the present by honoring work and families in every part of our public
decision-making. Third, it substantially reduces the Federal deficit
honestly and credibly by using in the beginning the most conservative
estimates of Government revenues, not, as the executive branch has done
so often in the past, using the most optimistic ones. And finally, it
seeks to earn the trust of the American people by paying for these
plans first with cuts in Government waste and efficiency; second, with
cuts, not gimmicks, in Government spending; and by fairness, for a
change, in the way additional burdens are borne.

Tonight I want to talk with you about what Government can do because I
believe Government must do more. But let me say first that the real
engine of economic growth in this country is the private sector, and
second, that each of us must be an engine of growth and change. The
truth is that as Government creates more opportunity in this new and
different time, we must also demand more responsibility in turn.

Our immediate priority must be to create jobs, create jobs now. Some
people say, "Well, we're in a recovery, and we don't have to do that."
Well, we all hope we're in a recovery, but we're sure not creating new
jobs. And there's no recovery worth its salt that doesn't put the
American people back to work.

To create jobs and guarantee a strong recovery, I call on Congress to
enact an immediate package of jobs investments of over $30 billion to
put people to work now, to create a half a million jobs: jobs to
rebuild our highways and airports, to renovate housing, to bring new
life to rural communities, and spread hope and opportunity among our
Nation's youth. Especially I want to emphasize, after the events of
last year in Los Angeles and the countless stories of despair in our
cities and in our poor rural communities, this proposal will create
almost 700,000 new summer jobs for displaced, unemployed young people
alone this summer. And tonight I invite America's business leaders to
join us in this effort so that together we can provide over one million
summer jobs in cities and poor rural areas for our young people.

Second, our plan looks beyond today's business cycle because our
aspirations extend into the next century. The heart of this plan deals
with the long term. It is an investment program designed to increase
public and private investment in areas critical to our economic future.
And it has a deficit reduction program that will increase the savings
available for the private sector to invest, will lower interest rates,
will decrease the percentage of the Federal budget claimed by interest
payments, and decrease the risk of financial market disruptions that
could adversely affect our economy.

Over the long run, all this will bring us a higher rate of economic
growth, improved productivity, more high-quality jobs, and an improved
economic competitive position in the world. In order to accomplish both
increased investment and deficit reduction, something no American
Government has ever been called upon to do at the same time before,
spending must be cut and taxes must be raised.

The spending cuts I recommend were carefully thought through in a way
to minimize any adverse economic impact, to capture the peace dividend
for investment purposes, and to switch the balance in the budget from
consumption to more investment. The tax increases and the spending cuts
were both designed to assure that the cost of this historic program to
face and deal with our problems will be borne by those who could
readily afford it the most. Our plan is designed, furthermore, and
perhaps in some ways most importantly, to improve the health of
American business through lower interest rates, more incentives to
invest, and better trained workers.

Because small business has created such a high percentage of all the
new jobs in our Nation over the last 10 or 15 years, our plan includes
the boldest targeted incentives for small business in history. We
propose a permanent investment tax credit for the smallest firms in
this country, with revenues of under $5 million. That's about 90
percent of the firms in America, employing about 40 percent of the work
force but creating a big majority of the net new jobs for more than a
decade. And we propose new rewards for entrepreneurs who take new risks.
We propose to give small business access to all the new technologies of
our time. And we propose to attack this credit crunch which has denied
small business the credit they need to flourish and prosper.

With a new network of community development banks and $1 billion to
make the dream of enterprise zones real, we propose to bring new hope
and new jobs to storefronts and factories from south Boston to south
Texas to south central Los Angeles. This plan invests in our roads, our
bridges, our transit systems, in high-speed railways and high-tech
information systems. And it provides the most ambitious environmental
cleanup in partnership with State and local government of our time, to
put people to work and to preserve the environment for our future.

Standing as we are on the edge of a new century, we know that economic
growth depends as never before on opening up new markets overseas and
expanding the volume of world trade. And so, we will insist on fair
trade rules in international markets as a part of a national economic
strategy to expand trade, including the successful completion of the
latest round of world trade talks and the successful completion of a
North American Free Trade Agreement with appropriate safeguards for our
workers and for the environment.

At the same time--and I say this to you in both parties and across
America tonight, all the people who are listening--it is not enough to
pass a budget or even to have a trade agreement. This world is changing
so fast that we must have aggressive, targeted attempts to create the
high-wage jobs of the future. That's what all our competitors are doing.
We must give special attention to those critical industries that are
going to explode in the 21st century but that are in trouble in America
today, like aerospace. We must provide special assistance to areas and
to workers displaced by cuts in the defense budget and by other
unavoidable economic dislocations.

And again I will say we must do this together. I pledge to you that I
will do my best to see that business and labor and Government work
together for a change.

But all of our efforts to strengthen the economy will fail--let me say
this again; I feel so strongly about this--all of our efforts to
strengthen the economy will fail unless we also take this year, not
next year, not 5 years from now but this year, bold steps to reform our
health care system.

In 1992, we spent 14 percent of our income on health care, more than 30
percent more than any other country in the world, and yet we were the
only advanced nation that did not provide a basic package of health
care benefits to all of its citizens. Unless we change the present
pattern, 50 percent of the growth in the deficit between now and the
year 2000 will be in health care costs. By the year 2000 almost 20
percent of our income will be in health care. Our families will never
be secure, our businesses will never be strong, and our Government will
never again be fully solvent until we tackle the health care crisis. We
must do it this year.

The combination of the rising cost of care and the lack of care and the
fear of losing care are endangering the security and the very lives of
millions of our people. And they are weakening our economy every day.
Reducing health care costs can liberate literally hundreds of billions
of dollars for new investment in growth and jobs. Bringing health costs
in line with inflation would do more for the private sector in this
country than any tax cut we could give and any spending program we
could promote. Reforming health care over the long run is critically
essential to reducing not only our deficit but to expanding investment
in America.

Later this spring, after the First Lady and the many good people who
are helping her all across the country complete their work, I will
deliver to Congress a comprehensive plan for health care reform that
finally will bring costs under control and provide security to all of
our families, so that no one will be denied the coverage they need but
so that our economic future will not be compromised either. We'll have
to root out fraud and overcharges and make sure that paperwork no
longer chokes your doctor. We'll have to maintain the highest American
standards and the right to choose in a system that is the world's
finest for all those who can access it. But first we must make choices.
We must choose to give the American people the quality they demand and
deserve with a system that will not bankrupt the country or further
drive more Americans into agony.

Let me further say that I want to work with all of you on this. I
realize this is a complicated issue. But we must address it. And I
believe if there is any chance that Republicans and Democrats who
disagree on taxes and spending or anything else could agree on one
thing, surely we can all look at these numbers and go home and tell our
people the truth. We cannot continue these spending patterns in public
or private dollars for health care for less and less and less every
year. We can do better. And I will work to do better.

Perhaps the most fundamental change the new direction I propose offers
is its focus on the future and its investment which I seek in our
children. Each day we delay really making a commitment to our children
carries a dear cost. Half of the 2-year-olds in this country today
don't receive the immunizations they need against deadly diseases. Our
plan will provide them for every eligible child. And we know now that
we will save $10 later for every $1 we spend by eliminating preventable
childhood diseases. That's a good investment no matter how you measure
it.

I recommend that the women, infants, and children's nutrition program
be expanded so that every expectant mother who needs the help gets it.
We all know that Head Start, a program that prepares children for
school, is a success story. We all know that it saves money. But today
it just reaches barely over one-third of all the eligible children.
Under this plan, every eligible child will be able to get a head start.
This is not just the right thing to do; it is the smart thing to do.
For every dollar we invest today, we'll save $3 tomorrow. We have to
start thinking about tomorrow. (I've heard that somewhere before.)
[Laughter]

We have to ask more in our schools of our students, our teachers, our
principals, our parents. Yes, we must give them the resources they need
to meet high standards, but we must also use the authority and the
influence and the funding of the Education Department to promote
strategies that really work in learning. Money alone is not enough. We
have to do what really works to increase learning in our schools.

We have to recognize that all of our high school graduates need some
further education in order to be competitive in this global economy. So
we have to establish a partnership between businesses and education and
the Government for apprenticeship programs in every State in this
country to give our people the skills they need. Lifelong learning must
benefit not just young high school graduates but workers, too,
throughout their career. The average 18-year-old today will change jobs
seven times in a lifetime. We have done a lot in this country on worker
training in the last few years, but the system is too fractured. We
must develop a unified, simplified, sensible, streamlined 
worker-training program so that workers receive the training they need
regardless of why they lost their jobs or whether they simply need to
learn something new to keep them. We have got to do better on this.

And finally, I propose a program that got a great response from the
American people all across this country last year: a program of
national service to make college loans available to all Americans and
to challenge them at the same time to give something back to their
country as teachers or police officers or community service workers; to
give them the option to pay the loans back, but at tax time so they
can't beat the bill, but to encourage them instead to pay it back by
making their country stronger and making their country better and
giving us the benefit of their knowledge.

A generation ago when President Kennedy proposed and the United States
Congress embraced the Peace Corps, it defined the character of a whole
generation of Americans committed to serving people around the world.
In this national service program, we will provide more than twice as
many slots for people before they go to college to be in national
service than ever served in the Peace Corps. This program could do for
this generation of Members of Congress what the land grant college act
did and what the GI bill did for former Congressmen. In the future,
historians who got their education through the national service loan
will look back on you and thank you for giving America a new lease on
life, if you meet this challenge.

If we believe in jobs and we believe in learning, we must believe in
rewarding work. If we believe in restoring the values that make America
special, we must believe that there is dignity in all work, and there
must be dignity for all workers. To those who care for our sick, who
tend our children, who do our most difficult and tiring jobs, the new
direction I propose will make this solemn, simple commitment: By
expanding the refundable earned-income tax credit, we will make history.
We will reward the work of millions of working poor Americans by
realizing the principle that if you work 40 hours a week and you've got
a child in the house, you will no longer be in poverty.

Later this year, we will offer a plan to end welfare as we know it. I
have worked on this issue for the better part of a decade. And I know
from personal conversations with many people that no one, no one wants
to change the welfare system as badly as those who are trapped in it. I
want to offer the people on welfare the education, the training, the
child care, the health care they need to get back on their feet, but
say after 2 years they must get back to work, too, in private business
if possible, in public service if necessary. We have to end welfare as
a way of life and make it a path to independence and dignity.

Our next great goal should be to strengthen our families. I compliment
the Congress for passing the Family and Medical Leave Act as a good
first step, but it is time to do more. This plan will give this country
the toughest child support enforcement system it has ever had. It is
time to demand that people take responsibility for the children they
bring in this world.

And I ask you to help to protect our families against the violent crime
which terrorizes our people and which tears our communities apart. We
must pass a tough crime bill. I support not only the bill which didn't
quite make it to the President's desk last year but also an initiative
to put 100,000 more police officers on the street, to provide boot
camps for first-time nonviolent offenders for more space for the
hardened criminals in jail. And I support an initiative to do what we
can to keep guns out of the hands of criminals. Let me say this. I will
make you this bargain: If you will pass the Brady bill, I'll sure sign
it.

Let me say now, we should move to the harder parts.

I think it is clear to every American, including every Member of
Congress of both parties, that the confidence of the people who pay our
bills in our institutions in Washington is not high. We must restore it.
We must begin again to make Government work for ordinary taxpayers, not
simply for organized interest groups. And that beginning must start
with real political reform. I am asking the United States Congress to
pass a real campaign finance reform bill this year. I ask you to
increase the participation of the American people by passing the motor
voter bill promptly. I ask you to deal with the undue influence of
special interests by passing a bill to end the tax deduction for
lobbying and to act quickly to require all the people who lobby you to
register as lobbyists by passing the lobbying registration bill.

Believe me, they were cheering that last section at home. I believe
lobby reform and campaign finance reform are a sure path to increased
popularity for Republicans and Democrats alike because it says to the
voters back home, "This is your House. This is your Senate. We're your
hired hands, and every penny we draw is your money."

Next, to revolutionize Government we have to ensure that we live within
our means, and that should start at the top and with the White House.
In the last few days I have announced a cut in the White House staff of
25 percent, saving approximately $10 million. I have ordered
administrative cuts in budgets of agencies and departments. I have cut
the Federal bureaucracy, or will over the next 4 years, by
approximately 100,000 positions, for a combined savings of $9 billion.
It is time for Government to demonstrate, in the condition we're in,
that we can be as frugal as any household in America.

And that's why I also want to congratulate the Congress. I noticed the
announcement of the leadership today that Congress is taking similar
steps to cut its costs. I think that is important. I think it will send
a very clear signal to the American people.

But if we really want to cut spending, we're going to have to do more,
and some of it will be difficult. Tonight I call for an across-the-board 
freeze in Federal Government salaries for one year. And
thereafter, during this 4-year period, I recommend that salaries rise
at one point lower than the cost of living allowance normally involved
in Federal pay increases.

Next, I recommend that we make 150 specific budget cuts, as you know,
and that all those who say we should cut more be as specific as I have
been.

Finally, let me say to my friends on both sides of the aisle, it is not
enough simply to cut Government; we have to rethink the whole way it
works. When I became President I was amazed at just the way the White
House worked, in ways that added lots of money to what taxpayers had to
pay, outmoded ways that didn't take maximum advantage of technology and
didn't do things that any business would have done years ago to save
taxpayers' money.

So I want to bring a new spirit of innovation into every Government
Department. I want to push education reform, as I said, not just to
spend more money but to really improve learning. Some things work, and
some things don't. We ought to be subsidizing the things that work and
discouraging the things that don't. I'd like to use that Superfund to
clean up pollution for a change and not just pay lawyers.

In the aftermath of all the difficulties with the savings and loans, we
must use Federal bank regulators to protect the security and safety of
our financial institutions, but they should not be used to continue the
credit crunch and to stop people from making sensible loans.

I'd like for us to not only have welfare reform but to reexamine the
whole focus of all of our programs that help people, to shift them from
entitlement programs to empowerment programs. In the end we want people
not to need us anymore. I think that's important.

But in the end we have to get back to the deficit. For years there's
been a lot of talk about it but very few credible efforts to deal with
it. And now I understand why, having dealt with the real numbers for 4
weeks. But I believe this plan does; it tackles the budget deficit
seriously and over the long term. It puts in place one of the biggest
deficit reductions and one of the biggest changes in Federal priorities,
from consumption to investment, in the history of this country at the
same time over the next 4 years.

Let me say to all the people watching us tonight who will ask me these
questions beginning tomorrow as I go around the country and who've
asked it in the past: We're not cutting the deficit just because
experts say it's the thing to do or because it has some intrinsic merit.
We have to cut the deficit because the more we spend paying off the
debt, the less tax dollars we have to invest in jobs and education and
the future of this country. And the more money we take out of the pool
of available savings, the harder it is for people in the private sector
to borrow money at affordable interest rates for a college loan for
their children, for a home mortgage, or to start a new business.

That's why we've got to reduce the debt, because it is crowding out
other activities that we ought to be engaged in and that the American
people ought to be engaged in. We cut the deficit so that our children
will be able to buy a home, so that our companies can invest in the
future and in retraining their workers, so that our Government can make
the kinds of investments we need to be a stronger and smarter and safer
nation.

If we don't act now, you and I might not even recognize this Government
10 years from now. If we just stay with the same trends of the last 4
years, by the end of the decade the deficit will be $635 billion a year,
almost 80 percent of our gross domestic product. And paying interest on
that debt will be the costliest Government program of all. We'll still
be the world's largest debtor. And when Members of Congress come here,
they'll be devoting over 20 cents on the dollar to interest payments,
more than half of the budget to health care and to other entitlements.
And you'll come here and deliberate and argue over 6 or 7 cents on the
dollar, no matter what America's problems are. We will not be able to
have the independence we need to chart the future that we must. And
we'll be terribly dependent on foreign funds for a large portion of our
investment.

This budget plan, by contrast, will by 1997 cut $140 billion in that
year alone from the deficit, a real spending cut, a real revenue
increase, a real deficit reduction, using the independent numbers of
the Congressional Budget Office. [Laughter] Well, you can laugh, my
fellow Republicans, but I'll point out that the Congressional Budget
Office was normally more conservative in what was going to happen and
closer to right than previous Presidents have been.

I did this so that we could argue about priorities with the same set of
numbers. I did this so that no one could say I was estimating my way
out of this difficulty. I did this because if we can agree together on
the most prudent revenues we're likely to get if the recovery stays and
we do right things economically, then it will turn out better for the
American people than we say. In the last 12 years, because there were
differences over the revenue estimates, you and I know that both
parties were given greater elbow room for irresponsibility. This is
tightening the rein on the Democrats as well as the Republicans. Let's
at least argue about the same set of numbers so the American people
will think we're shooting straight with them.

As I said earlier, my recommendation makes more than 150 difficult
reductions to cut the Federal spending by a total of $246 billion. We
are eliminating programs that are no longer needed, such as nuclear
power research and development. We're slashing subsidies and canceling
wasteful projects. But many of these programs were justified in their
time, and a lot of them are difficult for me to recommend reductions in,
some really tough ones for me personally. I recommend that we reduce
interest subsidies to the Rural Electric Administration. That's a
difficult thing for me to recommend. But I think that I cannot exempt
the things that exist in my State or in my experience, if I ask you to
deal with things that are difficult for you to deal with. We're going
to have to have no sacred cows except the fundamental abiding interest
of the American people.

I have to say that we all know our Government has been just great at
building programs. The time has come to show the American people that
we can limit them too; that we can not only start things, that we can
actually stop things.

About the defense budget, I raise a hope and a caution. As we
restructure our military forces to meet the new threats of the 
post-cold-war world, it is true that we can responsibly reduce our defense
budget. And we may all doubt what that range of reductions is, but let
me say that as long as I am President, I will do everything I can to
make sure that the men and women who serve under the American flag will
remain the best trained, the best prepared, the best equipped fighting
force in the world. And every one of you should make that solemn pledge.
We still have responsibilities around the world. We are the world's
only superpower. This is still a dangerous and uncertain time, and we
owe it to the people in uniform to make sure that we adequately provide
for the national defense and for their interests and needs. Backed by
an effective national defense and a stronger economy, our Nation will
be prepared to lead a world challenged as it is everywhere by ethnic
conflict, by the proliferation of weapons of mass destruction, by the
global democratic revolution, and by challenges to the health of our
global environment.

I know this economic plan is ambitious, but I honestly believe it is
necessary for the continued greatness of the United States. And I think
it is paid for fairly, first by cutting Government, then by asking the
most of those who benefited the most in the past, and by asking more
Americans to contribute today so that all of us can prosper tomorrow.

For the wealthiest, those earning more than $180,000 per year, I ask
you all who are listening tonight to support a raise in the top rate
for Federal income taxes from 31 to 36 percent. We recommend a 10
percent surtax on incomes over $250,000 a year, and we recommend
closing some loopholes that let some people get away without paying any
tax at all.

For businesses with taxable incomes in excess of $10 million, we
recommend a raise in the corporate tax rate, also to 36 percent, as
well as a cut in the deduction for business entertainment expenses. Our
plan seeks to attack tax subsidies that actually reward companies more
for shutting their operations down here and moving them overseas than
for staying here and reinvesting in America. I say that as someone who
believes that American companies should be free to invest around the
world and as a former Governor who actively sought investment of
foreign companies in my State. But the Tax Code should not express a
preference to American companies for moving somewhere else, and it does
in particular cases today.

We will seek to ensure that, through effective tax enforcement, foreign
corporations who do make money in America simply pay the same taxes
that American companies make on the same income.

To middle class Americans who have paid a great deal for the last 12
years and from whom I ask a contribution tonight, I will say again as I
did on Monday night: You're not going alone any more, you're certainly
not going first, and you're not going to pay more for less as you have
too often in the past. I want to emphasize the facts about this plan:
98.8 percent of America's families will have no increase in their
income tax rates, only 1.2 percent at the top.

Let me be clear: There will also be no new cuts in benefits for
Medicare. As we move toward the 4th year, with the explosion in health
care costs, as I said, projected to account for 50 percent of the
growth of the deficit between now and the year 2000, there must be
planned cuts in payments to providers, to doctors, to hospitals, to
labs, as a way of controlling health care costs. But I see these only
as a stopgap until we can reform the entire health care system. If
you'll help me do that, we can be fair to the providers and to the
consumers of health care. Let me repeat this, because I know it matters
to a lot of you on both sides of the aisle. This plan does not make a
recommendation for new cuts in Medicare benefits for any beneficiary.

Secondly, the only change we are making in Social Security is one that
has already been publicized. The plan does ask older Americans with
higher incomes, who do not rely solely on Social Security to get by, to
contribute more. This plan will not affect the 80 percent of Social
Security recipients who do not pay taxes on Social Security now. Those
who do not pay tax on Social Security now will not be affected by this
plan.

Our plan does include a broad-based tax on energy, and I want to tell
you why I selected this and why I think it's a good idea. I recommend
that we adopt a Btu tax on the heat content of energy as the best way
to provide us with revenue to lower the deficit because it also combats
pollution, promotes energy efficiency, promotes the independence,
economically, of this country as well as helping to reduce the debt,
and because it does not discriminate against any area. Unlike a carbon
tax, that's not too hard on the coal States; unlike a gas tax, that's
not too tough on people who drive a long way to work; unlike an ad
valorem tax, it doesn't increase just when the price of an energy
source goes up. And it is environmentally responsible. It will help us
in the future as well as in the present with the deficit.

Taken together, these measures will cost an American family with an
income of about $40,000 a year less than $17 a month. It will cost
American families with incomes under $30,000 nothing because of other
programs we propose, principally those raising the earned-income tax
credit.

Because of our publicly stated determination to reduce the deficit, if
we do these things, we will see the continuation of what's happened
just since the election. Just since the election, since the Secretary
of the Treasury, the Director of the Office of Management and Budget,
and others who have begun to speak out publicly in favor of a tough
deficit reduction plan, interest rates have continued to fall long-term.
That means that for the middle class who will pay something more each
month, if they had any credit needs or demands, their increased energy
costs will be more than offset by lower interest costs for mortgages,
consumer loans, credit cards. This can be a wise investment for them
and their country now.

I would also point out what the American people already know, and that
is, because we're a big, vast country where we drive long distances, we
have maintained far lower burdens on energy than any other advanced
country. We will still have far lower burdens on energy than any other
advanced country. And these will be spread fairly, with real attempts
to make sure that no cost is imposed on families with incomes under
$30,000 and that the costs are very modest until you get into the
higher income groups where the income taxes trigger in.

Now, I ask all of you to consider this: Whatever you think of the tax
program, whatever you think of the spending cuts, consider the cost of
not changing. Remember the numbers that you all know. If we just keep
on doing what we're doing, by the end of the decade we'll have a 
$650-billion-a-year deficit. If we just keep on doing what we're doing, by
the end of the decade 20 percent of our national income will go to
health care every year, twice as much as any other country on the face
of the globe. If we just keep on doing what we're doing, over 20 cents
on the dollar will have to go to service the debt.

Unless we have the courage now to start building our future and stop
borrowing from it, we're condemning ourselves to years of stagnation
interrupted by occasional recessions, to slow growth in jobs, to no
more growth in income, to more debt, to more disappointment. Worse,
unless we change, unless we increase investment and reduce the debt to
raise productivity so that we can generate both jobs and incomes, we
will be condemning our children and our children's children to a lesser
life than we enjoyed. Once Americans looked forward to doubling their
living standards every 25 years. At present productivity rates, it will
take 100 years to double living standards, until our grandchildren's
grandchildren are born. I say that is too long to wait.

Tonight the American people know we have to change. But they're also
likely to ask me tomorrow and all of you for the weeks and months ahead
whether we have the fortitude to make the changes happen in the right
way. They know that as soon as I leave this Chamber and you go home,
various interest groups will be out in force lobbying against this or
that piece of this plan, and that the forces of conventional wisdom
will offer a thousand reasons why we well ought to do this but we just
can't do it.

Our people will be watching and wondering, not to see whether you
disagree with me on a particular issue but just to see whether this is
going to be business as usual or a real new day, whether we're all
going to conduct ourselves as if we know we're working for them. We
must scale the walls of the people's scepticisms, not with our words
but with our deeds. After so many years of gridlock and indecision,
after so many hopeful beginnings and so few promising results, the
American people are going to be harsh in their judgments of all of us
if we fail to seize this moment.

This economic plan can't please everybody. If the package is picked
apart, there will be something that will anger each of us, won't please
anybody. But if it is taken as a whole, it will help all of us. So I
ask you all to begin by resisting the temptation to focus only on a
particular spending cut you don't like or some particular investment
that wasn't made. And nobody likes the tax increases, but let's just
face facts. For 20 years, through administrations of both parties,
incomes have stalled and debt has exploded and productivity has not
grown as it should. We cannot deny the reality of our condition. We
have got to play the hand we were dealt and play it as best we can.

My fellow Americans, the test of this plan cannot be "what is in it for
me." It has got to be "what is in it for us." If we work hard and if we
work together, if we rededicate ourselves to creating jobs, to
rewarding work, to strengthening our families, to reinventing our
Government, we can lift our country's fortunes again.

Tonight I ask everyone in this Chamber and every American to look
simply into your heart, to spark your own hopes, to fire your own
imagination. There is so much good, so much possibility, so much
excitement in this country now that if we act boldly and honestly, as
leaders should, our legacy will be one of prosperity and progress. This
must be America's new direction. Let us summon the courage to seize it.

Thank you. God bless America.

***

State of the Union Address
William J. Clinton
January 25, 1994

Mr. Speaker, Mr. President, members of the 103rd Congress, my fellow
Americans:

I am not sure what speech is in the TelePrompTer tonight, but I hope we
can talk about the State of the Union.

I ask you to begin by recalling the memory of the giant who presided
over this chamber with such force and grace. Tip O'Neill liked to call
himself "A Man of the House" and he surely was that. But even more, he
was a man of the people, a bricklayer's son who helped to build the
great American middle class. Tip O'Neill never forgot who he was, where
he came from, or who sent him here. Tonight he's smiling down on us for
the first time from the Lord's gallery. But in his honor, may we too
also remember who we are, where we come from, and who sent us here.

If we do that we will return over and over again to the principle that
if we simply give ordinary people equal opportunity, quality education,
and a fair shot at the American dream, they will do extraordinary
things.

We gather tonight in a world of changes so profound and rapid that all
nations are tested. Our American heritage has always been to master such
change, to use it to expand opportunity at home, and our leadership
abroad. But for too long and in too many ways, that heritage was
abandoned, and our country drifted.

For 30 years family life in America has been breaking down. For 20 years
the wages of working people have been stagnant or declining. For the 12
years of trickle down economics we built a false prosperity on a hollow
base as our national debt quadrupled. From 1989 to 1992 we experienced
the slowest growth in a half century. For too many families, even when
both parents were working, the American dream has been slipping away.

In 1992 the American people demanded that we change. I year ago I asked
all of you to join me in accepting responsibility for the future of our
country.

Well, we did. We replaced drift and deadlock with renewal and reform.
And I want to thank every one of you here who heard the American people,
who broke gridlock, who gave them the most successful teamwork between a
president and a Congress in 30 years.

Accomplishments

This Congress produced a budget that cut the deficit by half a trillion
dollars, cut spending and raised income taxes on only the wealthiest
Americans. This Congress produced tax relief for millions of low-income
workers to reward work over welfare. It produced NAFTA. It produced the
Brady bill, now the Brady law.

And thank you, Jim Brady, for being here, and God bless you, Sarah. This
Congress produced tax cuts to reduce the taxes of nine out of 10 small
businesses who use the money to invest more and create more jobs. It
produced more research and treatment for AIDS, more childhood
immunizations, more support for women's health research, more affordable
college loans for the middle class, a new national service program for
those who want to give something back to their country and their
communities for higher education, a dramatic increase in high-tech
investments to move us from a defense to a domestic high-tech economy.
This Congress produced a new law--the motor voter bill--to help millions
of people register to vote. It produced family and medical leave--all
passed, all signed into law, with not one single veto.

These accomplishments were all commitments I made when I sought this
office, and in fairness, they all had to be passed by you in this
Congress. But I am persuaded that the real credit belongs to the people
who sent us here, who pay our salaries, who hold our feet to the fire.
But what we do here is really beginning to change lives. Let me just
give you one example.

Family And Medical Leave

I will never forget what the family and medical leave law meant to just
one father I met early one Sunday morning in the White House. It was
unusual to see a family there touring early Sunday morning, but he had
his wife and his three children there, one of them in a wheelchair. And
I came up, and after we had our picture taken and had a little visit, I
was walking off, and that man grabbed me by the arm and he said, "Mr.
President, let me tell you something. My little girl here is desperately
ill. She's probably not going to make it. But because of the family
leave law, I was able to take time off to spend with her, the most
important I ever spent in my life, without losing my job and hurting the
rest of my family. It means more to me than I will ever be able to say.
Don't you people up here ever think what you do doesn't make a
difference. It does."

Though we are making a difference, our work has just begun. Many
Americans still haven't felt the impact of what we've done. The recovery
still hasn't touched every community or created enough jobs. Incomes are
still stagnant. There's still too much violence and not enough hope in
too many places.

Abroad, the young democracies we are strongly supporting still face very
difficult times and look to us for leadership.

And so tonight, let us resolve to continue the journey of renewal, to
create more and better jobs, to guarantee health security for all, to
reward welfare--work over welfare, to promote democracy abroad and to
begin to reclaim our streets from violent crime and drugs and gangs to
renew our own American community.

Deficit Reduction

Last year, we began to put our house in order by tackling the budget
deficit that was driving us toward bankruptcy. We cut $255 billion in
spending, including entitlements, in over 340 separate budget items. We
froze domestic spending and used honest budget numbers.

Led by the vice president, we've launched a campaign to reinvent
government. We've cut staff, cut perks, even trimmed the fleet of
federal limousines. After years of leaders whose rhetoric attacked
bureaucracy but whose actions expanded it, we will actually reduce it by
252,000 people over the next five years. By the time we have finished,
the federal bureaucracy will be at its lowest point in 30 years.

Because the deficit was so large and because they benefited from tax
cuts in the 1980s, we did ask the wealthiest Americans to pay more to
reduce the deficit. So on April the 15th, the American people will
discover the truth about what we did last year on taxes. Only the top
one--the top 1.2 percent of Americans, as I said all along, will face
higher income tax rates--let me repeat, only the wealthiest 1.2 percent
of Americans will face higher income tax rates and no one else will, and
that is the truth. Of course, there were, as there always are in
politics, naysayers who said this plan wouldn't work, but they were
wrong. When I became president, the experts predicted that next year's
deficit would be $300 billion, but because we acted, those same people
now say the deficit's going to be under $180 billion, 40 percent lower
than was previously predicted.

The Economy

Our economic program has helped to produce the lowest core inflation
rate and the lowest interest rates in 20 years, and because those
interest rates are down, business investment and equipment is growing at
seven times the rate of the previous four years. Auto sales are way up,
home sales at a record high. Millions of Americans have refinanced their
homes and our economy has produced 1.6 million private-sector jobs in
1993, more than were created in the previous four years combined.

The people who supported this economic plan should be proud of its early
results--proud. But everyone in this chamber should know and acknowledge
that there is more to do. Next month I will send you one of the toughest
budgets ever presented to Congress. It will cut spending in more than
300 programs, eliminate 100 domestic programs, and reforms the way in
which governments buy goods and services.

This year we must again make the hard choices to live within the hard
spending ceilings we have set. We must do it. We have proved we can
bring the deficit down without choking off recovery, without punishing
seniors or the middle class, and without putting our national security
at risk. If you will stick with this plan, we will post three
consecutive years of declining deficits for the first time since Harry
Truman lived in the White House. And once again, the buck stops here.

Trade

Our economic plan also bolsters our strength and our credibility around
the world. Once we reduced the deficit and put the steel back into our
competitive edge, the world echoed with the sound of falling trade
barriers. In one year, with NAFTA, with GATT, with our efforts in Asia
and the national export strategy, we did more to open world markets to
American products than at any time in the last two generations. That
means more jobs and rising living standards for the American people, low
deficits, low inflation, low interest rates, low trade barriers and high
investments. These are the building blocks of our recovery. But if we
want to take full advantage of the opportunities before us in the global
economy, you all know we must do more.

As we reduce defense spending, I ask Congress to invest more in the
technologies of tomorrow. Defense conversion will keep us strong
militarily and create jobs for our people here at home.

As we protect our environment, we must invest in the environmental
technologies of the future which will create jobs. This year we will
fight for a revitalized Clean Water Act and a Safe Drinking Water Act
and a reformed Superfund program.

And the vice president is right; we must also work with the private
sector to connect every classroom, every clinic, every library, every
hospital in America into a national information superhighway by the year
2000. Think of it. Instant access to information will increase
productivity. It will help to educate our children. It will provide
better medical care. It will create jobs. And I call on the Congress to
pass legislation to establish that information superhighway this year.

As we expand opportunity and create jobs, no one can be left out. We
must continue to enforce fair lending and fair housing and all civil
rights laws, because America will never be complete in its renewal until
everyone shares in its bounty. But we all know, too, we can do all these
things-- put our economic house in order, expand world trade, target the
jobs of the future, guarantee equal opportunity.

But if we're honest, we'll all admit that this strategy still cannot
work unless we also give our people the education, training and skills
they need to seize the opportunities of tomorrow. We must set tough,
world-class academic and occupational standards for all our children and
give our teachers and students the tools they need to meet them.

Education

Our Goals 2000 proposal will empower individual school districts to
experiment with ideas like chartering their schools to be run by private
corporations or having more public school choice, to do whatever they
wish to do as long as we measure every school by one high standard: Are
our children learning what they need to know to compete and win in the
global economy?

Goals 2000 links world-class standards to grassroots reforms and I hope
Congress will pass it without delay. Our school to work initiative will
for the first time link school to the world of work, providing at least
one year of apprenticeship beyond high school. After all, most of the
people we're counting on to build our economic future won't graduate
from college. It's time to stop ignoring them and start empowering them.
We must literally transform our outdated unemployment system into a new
reemployment system. The old unemployment system just sort of kept you
going while you waited for your old job to come back. We've got to have
a new system to move people into new and better jobs because most of
those old jobs just don't come back. And we know that the only way to
have real job security in the future, to get a good job with a growing
income, is to have real skills and the ability to learn new ones. So
we've got to streamline today's patchwork of training programs and make
them a source of new skill for our people who lose their jobs.
Reemployment, not unemployment, must become the centerpiece of our
economic renewal. I urge you to pass it in this session of Congress.

Welfare

And just as we must transform our unemployment system, so must we also
revolutionize our welfare system. It doesn't work; it defies our values
as a nation. If we value work, we can't justify a system that makes
welfare more attractive than work if people are worried about losing
their health care.

If we value responsibility, we can't ignore the $34 billion in child
support absent parents out to be paying to millions of parents who are
taking care of their children--. If we value strong families, we can't
perpetuate a system that actually penalizes those who stay together. Can
you believe that a child who has a child gets more money from the
government for leaving home than for staying home with a parent or a
grandparent? That's not just bad policy, it's wrong and we ought to
change it.

I worked on this problem for years before I became president, with other
governors and with members of Congress in both parties and with the
previous administration of another party. I worked on it with people who
were on welfare, lots of them. And I want to say something to everybody
here who cares about this issue. The people who most want to change this
system are the people who are dependent on it. They want to get off
welfare; they want to go back to work; they want to do right by their
kids.

I once had a hearing when I was a governor and I brought in people on
welfare from all over America who had found their way to work and a
woman from my state who testified was asked this question. What's the
best thing about being off welfare and in a job. And without blinking an
eye, she looked at 40 governors and she said, when my boy goes to school
and they say "What does your mother do for a living?" he can give an
answer. These people want a better system and we ought to give it to
them.

Last year, we began this. We gave the states more power to innovate
because we know that a lot of great ideas come from outside Washington
and many states are already using it. Then this Congress took a dramatic
step. Instead of taxing people with modest incomes into poverty, we
helped them to work their way out of poverty by dramatically increasing
the earned income tax credit. It will lift 15 million working families
out of poverty, rewarding work over welfare, making it possible for
people to be successful workers and successful parents. Now that's real
welfare reform.

But there is more to be done. This spring I will send you a
comprehensive welfare reform bill that builds on the Family Support Act
of 1988 and restores the basic values of work and responsibility. We
will say to teenagers if you have a child out of wedlock, we'll no
longer give you a check to set up a separate household, we want families
to stay together; say to absent parents who aren't paying their child
support if you're not providing for your children we'll garnish your
wages, suspend your license, track you across state lines, and if
necessary make some of you work off what you owe.

People who bring children into this world cannot and must not walk away
from them.

But to all those who depend on welfare, we should offer ultimately a
simple compact. We will provide the support, the job training, the child
care you need for up to two years, but after that anyone who can work,
must, in the private sector wherever possible, in community service if
necessary. That's the only way we'll ever make welfare what it ought to
be, a second chance, not a way of life.

I know it will be difficult to tackle welfare reform in 1994 at the same
time we tackle health care. But let me point out, I think it is
inevitable and imperative. It is estimated that one million people are
on welfare today because it's the only way they can get health care
coverage for their children. Those who choose to leave welfare for jobs
without health benefits, and many entry level jobs don't have health
benefits, find themselves in the incredible position of paying taxes
that help to pay for health care coverage for those who made the other
choice, to stay on welfare. No wonder people leave work and go back to
welfare, to get health care coverage. We've got to solve the health care
problem to have real welfare reform.

Health Care Reform

So this year we will make history by reforming the health care system.
And I would say to you, all of you my fellow public servants, this is
another issue where the people are way ahead of the politicians.

That may not be popular with either party, but it happens to be the
truth.

You know, the first lady has received now almost a million letters from
people all across America and from all walks of life. I'd like to share
just one of them with you. Richard Anderson of Reno, Nevada, lost his
job and, with it, his health insurance. Two weeks later, his wife, Judy,
suffered a cerebral aneurysm. He rushed her to the hospital, where she
stayed in intensive care for 21 days. The Anderson's bills were over
$120,000. Although Judy recovered and Richard went back to work at $8 an
hour, the bills were too much for them and they were literally forced
into bankruptcy.

"Mrs. Clinton," he wrote to Hillary, "no one in the United States of
America should have to lose everything they've worked for all their
lives because they were unfortunate enough to become ill." It was to
help the Richard and Judy Andersons of America that the first lady and
so many others have worked so hard and so long on this health care
reform issue. We owe them our thanks and our action.

I know there are people here who say there's no health care crisis. Tell
it to Richard and Judy Anderson. Tell it to the 58 million Americans who
have no coverage at all for some time each year. Tell it to the 81
million Americans with those preexisting conditions; those folks are
paying more or they can't get insurance at all or they can't ever change
their jobs because they or someone in their family has one of those
preexisting conditions. Tell it to the small businesses burdened by
skyrocketing costs of insurance. Most small businesses cover their
employers, and they pay on average 35 percent more in premiums than big
businesses or government. Or tell it to the 76 percent of insured
Americans, three out of four whose policies have lifetime limits, and
that means they can find themselves without any coverage at all just
when they need it the most.

So, if any of you believe there's no crisis, you tell it to those
people, because I can't.

There are some people who literally do not understand the impact of this
problem on people's lives, but all you have to do is go out and listen
to them. Just go talk to them anywhere, in any congressional district in
this country. They're Republicans and Democrats and independents. It
doesn't have a lick to do with party. They think we don't get it, and
it's time we show that we do get it.

From the day we began, our health care initiative has been designed to
strengthen what is good about our health care system--the world's best
health care professionals, cutting edge research, and wonderful research
institutions, Medicare for older Americans. None of this--none of it
should be put at risk. But we're paying more and more money for less and
less care. Every year, fewer and fewer Americans even get to choose
their doctors. Every year, doctors and nurses spend more time on
paperwork and less time with patients because of the absolute
bureaucratic nightmare the present system has become.

This system is riddled with inefficiency, with abuse, with fraud, and
everybody knows it. In today's health care system, insurance companies
call the shots. They pick whom they cover and how they cover them. They
can cut off your benefits when you need your coverage the most. They are
in charge.

What does it mean? It means every night millions of well-insured
Americans go to bed just an illness, an accident, or a pink slip away
from having no coverage or financial ruin. It means every morning
millions of Americans go to work without any health insurance at
all--something the workers in no other advanced country in the world do.
It means that every year more and more hard working people are told to
pick a new doctor because their boss has had to pick a new plan. And
countless others turndown better jobs because they know, if they take
the better job, they'll lose their health insurance.

If we just let the health care system continue to drift, our country
will have people with less care, fewer choices, and higher bill.

Now, our approach protects the quality of care and people's choices. It
builds on what works today in the private sector, to expand employer
based coverage, to guarantee private insurance for every American. And I
might say, employer based private insurance for every American was
proposed 20 years ago by President Richard Nixon to the United States
Congress. It was a good idea then, and it's a better idea today.

Why do we want guaranteed private insurance? Because right now, nine out
of ten people who have insurance get it through their employers--and
that should continue. And if your employer is providing good benefits at
reasonable prices, that should continue too. And that ought to make the
Congress and the president feel better. Our goal is health insurance
everybody can depend on--comprehensive benefits that cover preventive
care and prescription drugs, health premiums that don't just explode
when you get sick or you get older, the power--no matter how small your
business is --to choose dependable insurance at the same competitive
rates that governments and big business get today, one simple form for
people who are sick, and most of all, the freedom to choose a plan and
the right to choose your own doctor.

Our approach protects older Americans. Every plan before the Congress
proposes to slow the growth of Medicare. The difference is this. We
believe those savings should be used to improve health care for senior
citizens. Medicare must be protected, and it should cover prescription
drugs, and we should take the first steps in covering long-term care.

To those who would cut Medicare without protecting seniors, I say the
solution to today's squeeze on middle class working people's health care
is not to put the squeeze on middle class retired people's health care.
We can do better than that. When it's all said and done, it's pretty
simple to me. Insurance ought to mean what it used to mean. You pay a
fair price for security, and when you get sick, health care is always
there--no matter what.

Along with the guarantee of health security, we all have to admit, too,
there must be more responsibility on the part of all of us in how we use
this system. People have to take their kids to get immunized. We should
all take advantage of preventive care. We must all work together to stop
the violence that explodes our emergency rooms. We have to practice
better health habits, and we can't abuse the system. And those who don't
have insurance under our approach will get coverage, but they will have
to pay something for it, too. The minority of businesses that provide no
insurance at all, and in so doing, shift the cost of the care of their
employees to others, should contribute something. People who smoke
should pay more for a pack of cigarettes. Everybody can contribute
something if we want to solve the health care crisis. There can't be
anymore something for nothing. It will not be easy, but it can be done.
Now in the coming months I hope very much to work with both Democrats
and Republicans to reform a health care system by using the market to
bring down costs and to achieve lasting health security. But if you look
at history, we see that for 60 years this country has tried to reform
health care. President Roosevelt tried, President Truman tried,
President Nixon tried, President Carter tried. Every time the special
interests were powerful enough to defeat them, but not this time.

Campaign Finance Reform

I know that facing up to these interests will require courage. It will
raise critical questions about the way we finance our campaigns and how
lobbyists yield their influence. The work of change, frankly, will never
get any easier until we limit the influence of well financed interests
who profit from this current system. So I also must now call on you to
finish the job both houses began last year, by passing tough and
meaningful campaign finance reform and lobby reform legislation this
year.

You know, my fellow Americans, this is really a test for all of us. The
American people provide those of us in government service with terrific
health care benefits at reasonable costs. We have health care that's
always there. I think we need to give every hard working, taxpaying
American the same health care security they have already given to us.

I want to make this very clear: I am open, as I have said repeatedly, to
the best ideas of concerned members of both parties. I have no special
brief for any specific approach, even in our own bill, except this: if
you send me legislation that does not guarantee every American private
health insurance that can never be taken away, you will force me to take
this pen, veto the legislation, and we'll come right back here and start
all over again.

But I don't think that's going to happen. I think we're ready to act
now. I believe that you're ready to act now. And if you're ready to
guarantee every American the same health care that you have, health care
that can never be taken away--now, not next year or the year after, now
is the time to stand with the people who sent us here. Now.

Foreign Policy

As we take these steps together to renew our strength at home, we cannot
turn away from our obligations to renew our leadership abroad. This is a
promising moment. Because of the agreements we have reached this year,
last year, Russia's strategic nuclear missiles soon will no longer be
pointed at the United States. Nor will we point ours at them.

Instead of building weapons in space, Russian scientists will help us to
build the international space station.

And of course there are still dangers in the world: rampant arms
proliferation, bitter regional conflicts, ethnic and nationalist
tensions in many new democracies, severe environmental degradation the
world over, and fanatics who seek to cripple the world's cities with
terror. As the world's greatest power, we must therefore maintain our
defenses and our responsibilities. This year we secured indictments
against terrorists and sanctions against those harbor them. We worked to
promote environmentally-sustainable economic growth. We achieved
agreements with Ukraine, with Belarus, with Kazakhstan, to eliminate
completely their nuclear arsenals. We are working to achieve a Korean
Peninsula free of nuclear weapons. We will seek early ratification of
the treaty to ban chemical weapons worldwide. And earlier today we
joined with over 30 nations to begin negotiations on a comprehensive ban
to stop all nuclear testing.

But nothing--nothing--is more important to our security than our
nation's armed forces. We honor their contributions, including those who
are carrying out the longest humanitarian airlift in history in
Bosnia---- those who will complete their mission in Somalia this year
and their brave comrades who gave their lives there. Our forces are the
finest military our nation has ever had, and I have pledged that as long
as I am president they will remain the best-equipped, the best-trained
and the best-prepared fighting force on the face of the earth.

Defense

Last year, I proposed a defense plan that maintains our post-Cold War
security at a lower cost. This year, many people urged me to cut our
defense spending further to pay for other government programs. I said
no. The budget I send to Congress draws the line against further defense
cuts. It protects the readiness and quality of our forces. Ultimately,
the best strategy is to do that. We must not cut defense further. I hope
the Congress without regard to party will support that position.

Ultimately, the best strategy to ensure our security and to build a
durable peace is to support the advance of democracy elsewhere.
Democracies don't attack each other. They make better trading partners
and partners in diplomacy. That is why we have supported, you and I, the
democratic reformers in Russia and in the other states of the former
Soviet bloc. I applaud the bipartisan support this Congress provided
last year for our initiatives to help Russia, Ukraine and the other
states through their epic transformations.

Our support of reform must combine patience for the enormity of the task
and vigilance for our fundamental interest and values. We will continue
to urge Russia and the other states to press ahead with economic
reforms, and we will seek to cooperate with Russia to solve regional
problems while insisting that, if Russian troops operate in neighboring
states, they do so only when those states agree to their presence and in
strict accord with international standards.

But we must also remember as these nations chart their own futures, and
they must chart their own futures, how much more secure and more
prosperous our own people will be if democratic and market reform
succeed all across the former communist bloc. Our policy has been to
support that move and that has been the policy of the Congress. We
should continue it.

Europe

That is why I went to Europe earlier this month, to work with our
European partners to help to integrate all the former communist
countries into a Europe that has the possibility of becoming unified for
the first time in its entire history, it's entire history, based on the
simple commitments of all nations in Europe to democracy, to free
markets, and to respect for existing borders.

With our allies, we have created a partnership for peace that invites
states from the former Soviet bloc and other non-NATO members to work
with NATO in military cooperation. When I met with Central Europe's
leaders, including Lech Walesa and Vaclav Havel, men who put their lives
on the line for freedom, I told them that the security of their region
is important to our country's security.

This year, we must also do more to support democratic renewal and human
rights and sustainable development all around the world. We will ask
Congress to ratify the new GATT accord, we will continue standing by
South Africa as it works its way through its bold and hopeful and
difficult transition to democracy. We will convene a summit of the
Western hemisphere's democratic leaders from Canada to the tip of South
America. And we will continue to press for the restoration of true
democracy in Haiti.

And as we build a more constructive relationship with China, we must
continue to insist on clear signs of improvement in that nation's human
rights record.

Middle East

We will also work for new progress toward the Middle East peace. Last
year the world watched Yitzhak Rabin and Yasir Arafat at the White House
when they had their historic handshake of reconciliation. But there is a
long, hard road ahead. And on that road I am determined that I and our
administration will do all we can to achieve a comprehensive and lasting
peace for all the peoples of the region.

Now, there are some in our country who argue that with the Cold War,
America should turn its back on the rest of the world. Many around the
world were afraid we would do just that. But I took this office on a
pledge that had no partisan tinge to keep our nation secure by remaining
engaged in the rest of the world. And this year, because of our work
together, enacting NAFTA, keeping our military strong and prepared,
supporting democracy abroad, we have reaffirmed America's leadership,
America's engagement, and as a result, the American people are more
secure than they were before.

Crime

But while Americans are more secure from threats abroad, I think we all
now that in many ways we are less secure from threats here at home.
Everyday the national peace is shattered by crime.

In Petaluma, California, an innocent slumber party gives way to
agonizing tragedy for the family of Polly Klaas. An ordinary train ride
on Long Island ends in a hail of nine millimeter rounds. A tourist in
Florida is nearly burned alive by bigots simply because he is black.
Right here in our nation's capital, a brave young man named Jason White,
a policeman, the son and grandson of policemen, is ruthlessly gunned
down.

Violent crime and the fear it provokes are crippling our society,
limiting personal freedom, and fraying the ties that bind us.

The crime bill before Congress gives you a chance to do something about
it, a chance to be tough and smart. What does that mean? Let me begin by
saying I care a lot about this issue. Many years ago, when I started out
in public life, I was the attorney general of my state. I served as a
governor for a dozen years. I know what it's like to sign laws
increasing penalties, to build more prison cells, to carry out the death
penalty. I understand this issue and it is not a simple thing.

First, we must recognize that most violent crimes are committed by a
small percentage of criminals who too often break the laws even when
they are on parole. Now those who commit crimes should be punished, and
those who commit repeated violent crimes should be told when you commit
a third violent crime, you will be put away and put away for good, three
strikes and you are out.

Second, we must take serious steps to reduce violence and prevent crime,
beginning with more police officers and more community policing. We know
right now that police who work the streets, know the folks, have the
respect of the neighborhood kids, focus on high crime areas, we know
that they are more likely to prevent crime as well as catch criminals.
Look at the experience of Houston, where the crime rate dropped 17
percent in one year when that approach was taken. Here tonight is one of
those community policemen, a brave, young detective, Kevin Jett, whose
beat is eight square blocks in one of the toughest neighborhoods in New
York. Every day he restores some sanity and safety, and a sense of
values and connection to the people whose lives he protects. I'd like to
ask him to stand up and be recognized tonight.

You will be given a chance to give the children of this country, the law
abiding working people of this country, and don't forget, in the
toughest neighborhoods in this country, in the highest crime
neighborhoods in this country the vast majority of people get up every
day and obey the law, pay their taxes, do their best to raise their
kids. They deserve people like Kevin Jett, and you're going to be given
the chance to give the American people another 100,000 of them, well
trained, and I urge you to do it.

You have before you crime legislation which also establishes a police
corps to encourage young people to get an education, and pay it off by
serving as police officers, which encourages retiring military personnel
to move into police forces--and enormous resources for our country, one
which has a safe schools provisions which will give our young people the
chance to walk to school in safety and to be in school in safety instead
of dodging bullets. These are important things.

The third thing we have to do is to build on the Brady Bill--the Brady
Law to take further steps----to take further steps to keep guns out of
the hands of criminals.

Now, I want to say something about this issue. Hunters must always be
free to hunt, law abiding adults should always be free to own guns and
protect their homes. I respect that part of our culture. I grew up in
it. But I want to ask the sportsmen and others who lawfully own guns to
join us in this campaign to reduce gun violence. I say to you, I know
you didn't create this problem, but we need your help to solve it. There
is no sporting purpose on earth that should stop the United States
Congress from banishing assault weapons that outgun police and cut down
children.

Fourth, we must remember that drugs are a factor in an enormous
percentage of crimes. Recent studies indicate, sadly, that drug use is
on the rise again among our young people. The Crime Bill contains--all
the crime bills contain--more money for drug treatment, for criminal
addicts, and boot camps for youthful offenders that include incentives
to get off drugs and to stay off drugs. Our administration's budget,
with all its cuts, contains a large increase in funding for drug
treatment and drug education. You must pass them both. We need then
desperately.

My fellow Americans, the problem of violence is an un-American problem.
It has no partisan or philosophical element. Therefore, I urge you find
ways as quickly as possible to set aside partisan differences and pass a
strong, smart, tough crime bill.

But further, I urge you to consider this: As you demand tougher
penalties for those who choose violence, let us also remember how we
came to this sad point. In our toughest neighborhoods, on our meanest
streets, in our poorest rural areas, we have seen a stunning and
simultaneous breakdown of community, family, and work, the heart and
soul of civilized society. This has created a vast vacuum which has been
filled by violence and drugs and gangs. So I ask you to remember that
even as we say no to crime, we must give people, especially our young
people something to say yes to. Many of our initiatives, from job
training to welfare reform to health care to national service will help
to rebuild distressed communities, to strengthen families, to provide
work, but more needs to be done. That's what our community empowerment
agenda is all about--challenging businesses to provide more investment
through empowerment zones, ensuring banks will make loans in the same
communities their deposits come from, passing legislation to unleash the
power of capital through community development banks to create jobs,
opportunity, and hope where they're needed most.

But I think you know that to really solve this problem, we'll all have
to put our heads together, leave our ideological armor aside, and find
some new ideas to do even more.

The Role Of Government

And let's be honest, we all know something else, too. Our problems go
way beyond the reach of government. They're rooted in the loss of values
and the disappearance of work and the breakdown of our families and our
communities. My fellow Americans, we can cut the deficit, create jobs,
promote democracy around the world, pass welfare reform and health care,
pass the toughest crime bill in history and still leave too many of our
people behind.

The American people have got to want to change from within if we're
going to bring back work and family and community. We cannot renew our
country when, within a decade, more than half of the children will be
born into families where there has been no marriage. We cannot renew
this country when 13-year-old boys get semi-automatic weapons to shoot 9
year olds for kicks. We can't renew our country when children are having
children and the fathers walk away as if the kids don't amount to
anything. We can't renew the country when our businesses eagerly look
for new investments and new customers abroad but ignore those people
right here at home who'd give anything to have their jobs and would
gladly buy their products if they had the money to do it.

We can't renew our country unless more of us--I mean all of us--are
willing to join the churches and the other good citizens, people like
all the black ministers I've worked with over the years or the priests
and the nuns I met at Our Lady of Help in East Los Angeles or my good
friend Tony Campolo in Philadelphia, unless we're willing to work with
people like that, people who are saving kids, adopting schools, making
streets safer. All of us can do that.

We can't renew our country until we realize that governments don't raise
children; parents do. Parents who know their children's teachers and
turn off the television and help with the homework and teach their kids
right from wrong--those kind of parents can make all the difference. I
know. I had one. And I'm telling you we have got to stop pointing our
fingers at these kids who have no future and reach our hands out to
them. Our country needs it. We need it. And they deserve it.

And so I say to you tonight let's give our children a future. Let us
take away their guns and give them books. Let us overcome their despair
and replace it with hope. Let us, by our example, teach them to obey the
law, respect our neighbors, and cherish our values. Let us weave these
sturdy threads into a new American community that once more stand strong
against the forces of despair and evil because everybody has a chance to
walk into a better tomorrow.

Oh, there will be naysayers who fear that we won't be equal to the
challenges of this time, but they misread our history, our heritage,
even today's headlines. All those things tell us we can and we will
overcome any challenge.

When the earth shook and fires raged in California; when I saw the
Mississippi deluge the farmlands of the Midwest in a 500 year flood;
when the century's bitterest cold swept from North Dakota to Newport
News it seemed as though the world itself was coming apart at the seams.
But the American people, they just came together. They rose to the
occasion, neighbor helping neighbor, strangers risking life and limb to
stay total strangers, showing the better angels of our nature.

Let us not reserve the better angels only for natural disasters, leaving
our deepest and most profound problems to petty political fighting.

Let us instead by true to our spirit, facing facts, coming together,
bringing hope and moving forward.

Tonight, my fellow Americans, we are summoned to answer a question as
old as the republic itself, what is the state of our union?

It is growing stronger but it must be stronger still. With your help and
God's help it will be.

Thank you and God Bless America.

***

State of the Union Address
William J. Clinton
January 24, 1995

Mr. President, Mr. Speaker, members of the 104th Congress, my fellow
Americans:

Again we are here in the sanctuary of democracy. And once again, our
democracy has spoken.

So let me begin by congratulating all of you here in the 104th Congress,
and congratulating you, Mr. Speaker.

If we agree on nothing else tonight, we must agree that the American
people certainly voted for change in 1992 and in 1994.

And as I look out at you, I know how some of you must have felt in 1992.

I must say that in both years we didn't hear America singing, we heard
America shouting. And now all of us, Republicans and Democrats alike,
must say: We hear you. We will work together to earn the jobs you have
given us. For we are the keepers of the sacred trust and we must be
faithful to it in this new and very demanding era.

Over 200 years ago, our founders changed the entire course of human
history by joining together to create a new country based on a single,
powerful idea. We hold these truths to be self-evident, that all men are
created equal, endowed by their creator with certain inalienable rights.
Among these are life, liberty and the pursuit of happiness.

It has fallen to every generation since then to preserve that idea--the
American idea--and to deepen and expand its meaning in new and different
times. To Lincoln and to his Congress, to preserve the Union and to end
slavery. To Theodore Roosevelt and Woodrow Wilson, to restrain the
abuses and excesses of the Industrial Revolution and to assert our
leadership in the world. To Franklin Roosevelt, to fight the failure and
pain of the Great Depression and to win our country's great struggle
against fascism.

And to all our Presidents since, to fight the cold war. Especially, I
recall two who struggled to fight that cold war in partnership with
Congresses where the majority was of a different party. To Harry Truman,
who summoned us to unparalleled prosperity at home and who built the
architecture of the cold war. And to Ronald Reagan, whom we wish well
tonight, and who exhorted us to carry on until the twilight struggle
against Communism was won.

In another time of change and challenge, I had the honor to be the first
President to be elected in the post-cold-war era, an era marked by the
global economy, the information revolution, unparalleled change in
opportunity and in security for the American people.

I came to this hallowed chamber two years ago on a mission: To restore
the American dream for all our people and to make sure that we move into
the 21st century still the strongest force for freedom and democracy in
the entire world.

I was determined then to tackle the tough problems too long ignored. In
this effort I am frank to say that I have made my mistakes. And I have
learned again the importance of humility in all human endeavor.

But I am also proud to say tonight that our country is stronger than it
was two years ago.

Accomplishments

Record numbers, record numbers of Americans are succeeding in the new
global economy. We are at peace, and we are a force for peace and
freedom throughout the world. We have almost six million new jobs since
I became President, and we have the lowest combined rate of unemployment
and inflation in 25 years.

Our businesses are more productive and here we have worked to bring the
deficit down, to expand trade, to put more police on our streets, to
give our citizens more of the tools they need to get an education and to
rebuild their own communities. But the rising tide is not lifting all
the boats.

While our nation is enjoying peace and prosperity, too many of our
people are still working harder and harder for less and less. While our
businesses are restructuring and growing more productive and
competitive, too many of our people still can't be sure of having a job
next year or even next month. And far more than our material riches are
threatened, things far more precious to us: our children, our families,
our values.

Our civil life is suffering in America today. Citizens are working
together less and shouting at each other more. The common bonds of
community which have been the great strength of our country from its
very beginning are badly frayed.

What are we to do about it?

More than 60 years ago at the dawn of another new era, President
Roosevelt told our nation new conditions impose new requirements on
Government and those who conduct Government. And from that simple
proposition he shaped the New Deal, which helped to restore our nation
to prosperity and defined the relationship between our people and their
Government for half a century.

That approach worked in its time but today we face a very different time
and very different conditions. We are moving from an industrial age
built on gears and sweat to an information age demanding skills and
learning and flexibility.

Our Government, once a champion of national purpose, is now seen by many
as simply a captive of narrow interests putting more burdens on our
citizens rather than equipping them to get ahead. The values that used
to hold us all together seem to be coming apart.

So tonight we must forge a new social compact to meet the challenges of
this time. As we enter a new era, we need a new set of understandings
not just with Government but, even more important, with one another as
Americans.

New Covenant

That's what I want to talk with you about tonight. I call it the New
Covenant but it's grounded in a very, very old idea that all Americans
have not just a right but a solemn responsibility to rise as far as
their God-given talents and determination can take them. And to give
something back to their communities and their country in return.

Opportunity and responsibility--they go hand in hand; we can't have one
without the other, and our national community can't hold together
without both.

Our New Covenant is a new set of understandings for how we can equip our
people to meet the challenges of the new economy, how we can change the
way our Government works to fit a different time and, above all, how we
can repair the damaged bonds in our society and come together behind our
common purpose. We must have dramatic change in our economy, our
Government and ourselves.

My fellow Americans, without regard to party, let us rise to the
occasion. Let us put aside partisanship and pettiness and pride. As we
embark on this course, let us put our country first, remembering that
regardless of party label we are all Americans. And let the final test
of everything we do be a simple one: Is it good for the American people?

Let me begin by saying that we cannot ask Americans to be better
citizens if we are not better servants. You made a good start by passing
that law which applies to Congress all the laws you put on the private
sector--and I was proud to sign it yesterday.

But we have a lot more to do before people really trust the way things
work around here. Three times as many lobbyists are in the streets and
corridors of Washington as were here 20 years ago. The American people
look at their capital and they see a city where the well-connected and
the well-protected can work the system, but the interests of ordinary
citizens are often left out.

As the new Congress opened its doors, lobbyists were still doing
business as usual--the gifts, the trips--all the things that people are
concerned about haven't stopped.

Twice this month you missed opportunities to stop these practices. I
know there were other considerations in those votes, but I want to use
something that I've heard my Republican friends say from time to time:
There doesn't have to be a law for everything.

So tonight I ask you to just stop taking the lobbyists' perks, just
stop.

We don't have to wait for legislation to pass to send a strong signal to
the American people that things are really changing. But I also hope you
will send me the strongest possible lobby reform bill, and I'll sign
that, too. We should require lobbyists to tell the people for whom they
work what they're spending, what they want. We should also curb the role
of big money in elections by capping the cost of campaigns and limiting
the influence of PAC's.

And as I have said for three years, we should work to open the air waves
so that they can be an instrument of democracy not a weapon of
destruction by giving free TV time to candidates for public office.

When the last Congress killed political reform last year, it was
reported in the press that the lobbyists actually stood in the halls of
this sacred building and cheered. This year, let's give the folks at
home something to cheer about.

More important, I think we all agree that we have to change the way the
Government works. Let's make it smaller, less costly and smarter. Leaner
not meaner.

I just told the Speaker the equal time doctrine's alive and well.

The Role Of Government

The New Covenant approach to governing is as different from the old
bureaucratic way as the computer is from the manual typewriter. The old
way of governing around here protected organized interests; we should
look out for the interests of ordinary people. The old way divided us by
interests, constituency or class; the New Covenant way should unite us
behind a common vision of what's best for our country.

The old way dispensed services through large, top-down, inflexible
bureaucracies. The New Covenant way should shift these resources and
decision making from bureaucrats to citizens, injecting choice and
competition and individual responsibility into national policy.

The old way of governing around here actually seemed to reward failure.
The New Covenant way should have built-in incentives to reward success.

The old way was centralized here in Washington. The New Covenant way
must take hold in the communities all across America, and we should help
them to do that.

Our job here is to expand opportunity, not bureaucracy, to empower
people to make the most of their own lives and to enhance our security
here at home and abroad.

We must not ask Government to do what we should do for ourselves. We
should rely on Government as a partner to help us to do more for
ourselves and for each other.

I hope very much that as we debate these specific and exciting matters,
we can go beyond the sterile discussion between the illusion that there
is somehow a program for every problem, on the one hand, and the other
illusion that the Government is the source of every problem that we
have.

Our job is to get rid of yesterday's Government so that our own people
can meet today's and tomorrow's needs.

And we ought to do it together.

You know, for years before I became President, I heard others say they
would cut Government and how bad it was. But not much happened.

We actually did it. We cut over a quarter of a trillion dollars in
spending, more than 300 domestic programs, more than 100,000 positions
from the Federal bureaucracy in the last two years alone.

Based on decisions already made, we will have cut a total of more than a
quarter of a million positions from the Federal Government, making it
the smallest it has been since John Kennedy was president, by the time I
come here again next year.

Under the leadership of Vice President Gore, our initiatives have
already saved taxpayers $ 63 billion. The age of the $ 500 hammer and
the ashtray you can break on David Letterman is gone. Deadwood programs
like mohair subsidies are gone. We've streamlined the Agriculture
Department by reducing it by more than 1,200 offices. We've slashed the
small-business loan form from an inch thick to a single page. We've
thrown away the Government's 10,000-page personnel manual.

And the Government is working better in important ways. FEMA, the
Federal Emergency Management Agency, has gone from being a disaster to
helping people in disaster.

You can ask the farmers in the Middle West who fought the flood there or
the people in California who've dealt with floods and earthquakes and
fires and they'll tell you that.

Government workers, working hand-in-hand with private business, rebuilt
Southern California's fractured freeways in record time and under
budget.

And because the Federal Government moved fast, all but one of the 5,600
schools damaged in the earthquake are back in business.

Now, there are a lot of other things that I could talk about. I want to
just mention one because it'll be discussed here in the next few weeks.

University administrators all over the country have told me that they
are saving weeks and weeks of bureaucratic time now because of our
direct college loan program, which makes college loans cheaper and more
affordable with better repayment terms for students, costs the
Government less and cuts out paperwork and bureaucracy for the
Government and for the universities.

We shouldn't cap that program, we should give every college in America
the opportunity to be a part of it.

Previous Government programs gather dust; the reinventing Government
report is getting results. And we're not through--there's going to be a
second round of reinventing Government.

We propose to cut $ 130 billion in spending by shrinking departments,
extending our freeze on domestic spending, cutting 60 public housing
programs down to 3, getting rid of over a hundred programs we do not
need like the Interstate Commerce Commission and the Helium Reserve
Program.

And we're working on getting rid of unnecessary regulations and making
them more sensible. The programs and regulations that have outlived
their usefulness should go. We have to cut yesterday's Government to
help solve tomorrow's problems.

And we need to get Government closer to the people it's meant to serve.
We need to help move programs down to the point where states and
communities and private citizens in the private sector can do a better
job. If they can do it, we ought to let them do it. We should get out of
the way and let them do what they can do better.

Community Empowerment

Taking power away from Federal bureaucracies and giving it back to
communities and individuals is something everyone should be able to be
for. It's time for Congress to stop passing onto the states the cost of
decisions we make here in Washington.

I know there are still serious differences over the details of the
unfunded mandates legislation but I want to work with you to make sure
we pass a reasonable bill which will protect the national interest and
give justified relief where we need to give it.

For years, Congress concealed in the budget scores of pet spending
projects. Last year was no different. There was a million dollars to
study stress in plants and $ 12 million for a tick removal program that
didn't work. It's hard to remove ticks; those of us who've had them
know.

But I'll tell you something, if you'll give me the line-item veto, I'll
remove some of that unnecessary spending.

But, I think we should all remember, and almost all of us would agree,
that Government still has important responsibilities.

Our young people--we should think of this when we cut--our young people
hold our future in their hands. We still owe a debt to our veterans. And
our senior citizens have made us what we are.

Budget

Now, my budget cuts a lot. But it protects education, veterans, Social
Security and Medicare, and I hope you will do the same thing. You
should, and I hope you will.

And when we give more flexibility to the states, let us remember that
there are certain fundamental national needs that should be addressed in
every state, north and south, east and west.

Immunization against childhood disease, school lunches in all our
schools, Head Start, medical care and nutrition for pregnant women and
infants--all these things are in the national interest.

I applaud your desire to get rid of costly and unnecessary regulations,
but when we deregulate let's remember what national action in the
national interest has given us: safer food for our families, safer toys
for our children, safer nursing homes for our parents, safer cars and
highways and safer workplaces, cleaner air and cleaner water. Do we need
common sense and fairness in our regulations? You bet we do. But we can
have common sense and still provide for safe drinking water. We can have
fairness and still clean up toxic dumps and we ought to do it.

Should we cut the deficit more? Well of course we should. Of course we
should. But we can bring it down in a way that still protects our
economic recovery and does not unduly punish people who should not be
punished, but instead should be helped.

I know many of you in this chamber support the balanced-budget
amendment. I certainly want to balance the budget. Our Administration
has done more to bring the budget down and to save money than any in a
very, very long time.

If you believe passing this amendment is the right thing to do, then you
have to be straight with the American people. They have a right to know
what you're going to cut, what taxes you're going to raise, how it's
going to affect them.

And we should be doing things in the open around here. For example,
everybody ought to know if this proposal is going to endanger Social
Security. I would oppose that, and I think most Americans would.

Welfare

Nothing is done more to undermine our sense of common responsibility
than our failed welfare system. This is one of the problems we have to
face here in Washington in our New Covenant. It rewards welfare over
work, it undermines family values, it lets millions of parents get away
without paying their child support, it keeps a minority--but a
significant minority--of the people on welfare trapped on it for a very
long time.

I worked on this problem for a long time--nearly 15 years now. As a
Governor I had the honor of working with the Reagan Administration to
write the last welfare reform bill back in 1988.

In the last two years we made a good start in continuing the work of
welfare reform. Our Administration gave two dozen states the right to
slash through Federal rules and regulations to reform their own welfare
systems and to try to promote work and responsibility over welfare and
dependency.

Last year, I introduced the most sweeping welfare reform plan ever
presented by an Administration. We have to make welfare what it was
meant to be--a second chance, not a way of life.

We have to help those on welfare move to work as quickly as possible, to
provide child care and teach them skills, if that's what they need, for
up to two years. But after that, there ought to be a simple, hard rule.
Anyone who can work must go to work.

If a parent isn't paying child support, they should be forced to pay.

We should suspend driver's licenses, track them across state lines, make
them work off what they owe. That is what we should do. Governments do
not raise children, people do. And the parents must take responsibility
for the children they bring into this world.

I want to work with you, with all of you, to pass welfare reform. But
our goal must be to liberate people and lift them from dependence to
independence, from welfare to work, from mere childbearing to
responsible parenting. Our goal should not be to punish them because
they happen to be poor.

We should--we should require work and mutual responsibility. But we
shouldn't cut people off just because they're poor, they're young or
even because they're unmarried. We should promote responsibility by
requiring young mothers to live at home with their parents or in other
supervised settings, by requiring them to finish school. But we
shouldn't put them and their children out on the street.

And I know all the arguments pro and con and I have read and thought
about this for a long time: I still don't think we can, in good
conscience, punish poor children for the mistakes of their parents.

My fellow Americans, every single survey shows that all the American
people care about this, without regard to party or race or region. So
let this be the year we end welfare as we know it.

But also let this be the year that we are all able to stop using this
issue to divide America.

No one is more eager to end welfare.

I may be the only President who's actually had the opportunity to sit in
the welfare office, who's actually spent hours and hours talking to
people on welfare, and I am telling you the people who are trapped on it
know it doesn't work. They also want to get off.

So we can promote, together, education and work and good parenting. I
have no problem with punishing bad behavior or the refusal to be a
worker or a student or a responsible parent. I just don't want to punish
poverty and past mistakes. All of us have made our mistakes and none of
us can change our yesterdays, but every one of us can change our
tomorrows.

And America's best example of that may be Lynn Woolsey, who worked her
way off welfare to become a Congresswoman from the state of California.

Crime

I know the members of this Congress are concerned about crime, as are
all the citizens of our country. But I remind you that last year we
passed a very tough crime bill--longer sentences, three strikes and
you're out, almost 60 new capital punishment offenses, more prisons,
more prevention, 100,000 more police--and we paid for it all by reducing
the size of the Federal bureaucracy and giving the money back to local
communities to lower the crime rate.

There may be other things we can do to be tougher on crime, to be
smarter with crime, to help to lower that rate first. Well if there are,
let's talk about them and let's do them. But let's not go back on the
things that we did last year that we know work--that we know work
because the local law-enforcement officers tell us that we did the right
thing. Because local community leaders, who've worked for years and
years to lower the crime rate, tell us that they work.

Let's look at the experience of our cities and our rural areas where the
crime rate has gone down and ask the people who did it how they did it
and if what we did last year supports the decline in the crime rate, and
I am convinced that it does, let us not go back on it, let's stick with
it, implement it--we've got four more hard years of work to do to do
that.

I don't want to destroy the good atmosphere in the room or in the
country tonight, but I have to mention one issue that divided this body
greatly last year. The last Congress also passed the Brady bill and in
the crime bill the ban on 19 assault weapons.

I don't think it's a secret to anybody in this room that several members
of the last Congress who voted for that aren't here tonight because they
voted for it. And I know, therefore, that some of you that are here
because they voted for it are under enormous pressure to repeal it. I
just have to tell you how I feel about it.

The members who voted for that bill and I would never do anything to
infringe on the right to keep and bear arms to hunt and to engage in
other appropriate sporting activities. I've done it since I was a boy,
and I'm going to keep right on doing it until I can't do it anymore.

But a lot of people laid down their seats in Congress so that police
officers and kids wouldn't have to lay down their lives under a hail of
assault-weapon attacks, and I will not let that be repealed. I will not
let it be repealed.

I'd like to talk about a couple of other issues we have to deal with. I
want us to cut more spending, but I hope we won't cut Government
programs that help to prepare us for the new economy, promote
responsibility and are organized from the grass roots up, not by Federal
bureaucracy.

The very best example of this is the National Service Corps--AmeriCorps.
It passed with strong bipartisan support and now there are 20,000
Americans --more than ever served in one year in the Peace
Corps--working all over this country, helping person to person in local
grass-roots volunteer groups, solving problems and in the process
earning some money for their education.

This is citizenship at its best. It's good for the AmeriCorps members,
but it's good for the rest of us, too. It's the essence of the New
Covenant and we shouldn't stop it.

Illegal Immigration

All Americans, not only in the states most heavily affected, but in
every place in this country are rightly disturbed by the large numbers
of illegal aliens entering our country.

The jobs they hold might otherwise be held by citizens or legal
immigrants. The public services they use impose burdens on our
taxpayers. That's why our Administration has moved aggressively to
secure our borders more, by hiring a record number of new border guards,
by deporting twice as many criminal aliens as ever before, by cracking
down on illegal hiring, by barring welfare benefits to illegal aliens.

In the budget I will present to you, we will try to do more to speed the
deportation of illegal aliens who are arrested for crimes, to better
identify illegal aliens in the workplace as recommended by the
commission headed by former Congresswoman Barbara Jordan.

We are a nation of immigrants, but we are also a nation of laws. It is
wrong and ultimately self-defeating for a nation of immigrants to permit
the kind of abuse of our immigration laws we have seen in recent years,
and we must do more to stop it.

The most important job of our Government in this new era is to empower
the American people to succeed in the global economy. America has always
been a land of opportunity, a land where, if you work hard, you can get
ahead. We've become a great middle-class country; middle-class values
sustain us. We must expand that middle class and shrink the underclass
even as we do everything we can to support the millions of Americans who
are already successful in the new economy.

America is once again the world's strongest economic power: almost six
million new jobs in the last two years, exports booming, inflation down,
high-wage jobs are coming back. A record number of American
entrepreneurs are living the American dream.

If we want it to stay that way, those who work and lift our nation must
have more of its benefits.

Today, too many of those people are being left out. They're working
harder for less. They have less security, less income, less certainty
that they can even afford a vacation, much less college for their kids
or retirement for themselves.

We cannot let this continue. If we don't act, our economy will probably
keep doing what it's been doing since about 1978, when the income growth
began to go to those at the very top of our economic scale. And the
people in the vast middle got very little growth and people who worked
like crazy but were on the bottom then, fell even further and further
behind in the years afterward, no matter how hard they worked.

We've got to have a Government that can be a real partner in making this
new economy work for all of our people, a Government that helps each and
every one of us to get an education and to have the opportunity to renew
our skills.

Education

That's why we worked so hard to increase educational opportunities in
the last two years from Head Start to public schools to apprenticeships
for young people who don't go to college, to making college loans more
available and more affordable.

That's the first thing we have to do: We've got to do something to
empower people to improve their skills.

Taxes

Second thing we ought to do is to help people raise their incomes
immediately by lowering their taxes.

We took the first step in 1993 with a working family tax cut for 15
million families with incomes under $ 27,000, a tax cut that this year
will average about $ 1,000 a family.

And we also gave tax reductions to most small and new businesses. Before
we could do more than that, we first had to bring down the deficit we
inherited and we had to get economic growth up. Now we've done both, and
now we can cut taxes in a more comprehensive way.

But tax cuts should reinforce and promote our first obligation: to
empower our citizens through education and training to make the most of
their own lives. The spotlight should shine on those who make the right
choices for themselves, their families and their communities.

Middle Class Bill Of Rights

I have proposed a middle-class bill of rights, which should properly be
called the bill of rights and responsibilities, because its provisions
only benefit those who are working to educate and raise their children
and to educate themselves. It will, therefore, give needed tax relief
and raise incomes, in both the short run and the long run, in a way that
benefits all of us.

There are four provisions:

First, a tax deduction for all education and training after high school.
If you think about it, we permit businesses to deduct their investment,
we permit individuals to deduct interest on their home mortgages, but
today an education is even more important to the economic well-being of
our whole country than even those things are. We should do everything we
can to encourage it, and I hope you will support it.

Second, we ought to cut taxes $ 500 for families with children under 13.

Third, we ought to foster more savings and personal responsibility by
permitting people to establish an individual retirement account and
withdraw from it tax free for the cost of education, health care,
first-time home buying or the care of a parent.

And fourth, we should pass a G.I. bill for America's workers. We propose
to collapse nearly 70 Federal programs and not give the money to the
states but give the money directly to the American people, offer
vouchers to them so that they--if they're laid off or if they're working
for a very low wage--can get a voucher worth $ 2,600 a year for up to
two years to go to their local community colleges or wherever else they
want to get the skills they need to improve their lives. Let's empower
people in this way. Move it from the Government directly to the workers
of America.

Cutting The Deficit Now

Any one of us can call for a tax cut, but I won't accept one that
explodes the deficit or puts our recovery at risk. We ought to pay for
our tax cuts fully and honestly. Just two years ago it was an open
question whether we would find the strength to cut the deficit.

Thanks to the courage of the people who were here then, many of whom
didn't return, we did cut the deficit. We began to do what others said
would not be done: We cut the deficit by over $ 600 billion, about $
10,000 for every family in this country. It's coming down three years in
a row for the first time since Mr. Truman was President and I don't
think anybody in America wants us to let it explode again.

In the budget I will send you, the middle-class bill of rights is fully
paid for by budget cuts in bureaucracy, cuts in programs, cuts in
special interest subsidies. And the spending cuts will more than double
the tax cuts. My budget pays for the middle-class bill of rights without
any cuts in Medicare, and I will oppose any attempts to pay for tax cuts
with Medicare cuts. That's not the right thing to do.

I know that a lot of you have your own ideas about tax relief. And some
of them, I find quite interesting. I really want to work with all of
you.

My tests for our proposals will be: Will it create jobs and raise
incomes? Will it strengthen our families and support our children? Is it
paid for? Will it build the middle class and shrink the underclass?

If it does, I'll support it. But if it doesn't, I won't.

Minimum Wage

The goal of building the middle class and shrinking the underclass is
also why I believe that you should raise the minimum wage.

It rewards work--two and a half million Americans, often women with
children, are working out there today for four-and-a-quarter an hour. In
terms of real buying power, by next year, that minimum wage will be at a
40-year low. That's not my idea of how the new economy ought to work.

Now I studied the arguments and the evidence for and against a
minimum-wage increase. I believe the weight of the evidence is that a
modest increase does not cost jobs and may even lure people back into
the job market. But the most important thing is you can't make a living
on $ 4.25 an hour. Now --especially if you have children, even with the
working families tax cut we passed last year.

In the past, the minimum wage has been a bipartisan issue and I think it
should be again. So I want to challenge you to have honest hearings on
this, to get together to find a way to make the minimum wage a living
wage.

Members of Congress have been here less than a month but by the end of
the week--28 days into the new year--every member of Congress will have
earned as much in congressional salary as a minimum-wage worker makes
all year long.

Everybody else here, including the President, has something else that
too many Americans do without and that's health care.

Health Care

Now, last year we almost came to blows over health care, but we didn't
do anything. And the cold, hard fact is that since last year--since I
was here--another 1.1 million Americans in working families have lost
their health care. And the cold, hard fact is that many millions
more--most of them farmers and small business people and self-employed
people--have seen their premiums skyrocket, their co-pays and
deductibles go up.

There's a whole bunch of people in this country that in the statistics
have health insurance but really what they've got is a piece of paper
that says they won't lose their home if they get sick.

Now I still believe our country has got to move toward providing health
security for every American family, but--but I know that last year, as
the evidence indicates, we bit off more than we could chew.

So I'm asking you that we work together. Let's do it step by step. Let's
do whatever we have to do to get something done. Let's at least pass
meaningful insurance reform so that no American risks losing coverage
for facing skyrocketing prices but that nobody loses their coverage
because they face high prices or unavailable insurance when they change
jobs or lose a job or a family member gets sick.

I want to work together with all of you who have an interest in this:
with the Democrats who worked on it last time, with the Republican
leaders like Senator Dole who has a longtime commitment to health care
reform and made some constructive proposals in this area last year. We
ought to make sure that self-employed people in small businesses can buy
insurance at more affordable rates through voluntary purchasing pools.
We ought to help families provide long-term care for a sick parent to a
disabled child. We can work to help workers who lose their jobs at least
keep their health insurance coverage for a year while they look for
work, and we can find a way--it may take some time, but we can find a
way--to make sure that our children have health care.

You know, I think everybody in this room, without regard to party, can
be proud of the fact that our country was rated as having the world's
most productive economy for the first time in nearly a decade, but we
can't be proud of the fact that we're the only wealthy country in the
world that has a smaller percentage of the work force and their children
with health insurance today than we did 10 years ago--the last time we
were the most productive economy in the world.

So let's work together on this. It is too important for politics as
usual.

Much of what the American people are thinking about tonight is what
we've already talked about. A lot of people think that the security
concerns of America today are entirely internal to our borders, they
relate to the security of our jobs and our homes and our incomes and our
children, our streets, our health and protecting those borders.

Foreign Policy

Now that the Cold War has passed, it's tempting to believe that all the
security issues, with the possible exception of trade, reside here at
home. But it's not so. Our security still depends on our continued world
leadership for peace and freedom and democracy. We still can't be strong
at home unless we're strong abroad.

Mexico

The financial crisis in Mexico is a case in point. I know it's not
popular to say it tonight but we have to act, not for the Mexican people
but for the sake of the millions of Americans whose livelihoods are tied
to Mexico's well-being. If we want to secure American jobs, preserve
American exports, safeguard America's borders then we must pass the
stabilization program and help to put Mexico back on track.

Now let me repeat: it's not a loan, it's not foreign aid, it's not a
bail-out. We'll be given a guarantee like co-signing a note with good
collateral that will cover our risk.

This legislation is the right thing for America. That's why the
bipartisan leadership has supported it. And I hope you in Congress will
pass it quickly. It is in our interest and we can explain it to the
American people, because we're going to do it in the right way.

Russia

You know, tonight this is the first State of the Union address ever
delivered since the beginning of the cold war when not a single Russian
missile is pointed at the children of America.

And along with the Russians, we're on our way to destroying the missiles
and the bombers that carry 9,000 nuclear warheads. We've come so far so
fast in this post-cold-war world that it's easy to take the decline of
the nuclear threat for granted. But it's still there, and we aren't
finished yet.

This year, I'll ask the Senate to approve START II to eliminate weapons
that carry 5,000 more warheads. The United States will lead the charge
to extend indefinitely the Nuclear Nonproliferation Treaty, to enact a
comprehensive nuclear test ban, and to eliminate chemical weapons.

North Korea

To stop and roll back North Korea's potentially deadly nuclear program,
we'll continue to implement the agreement we have reached with that
nation. It's smart, it's tough, it's a deal based on continuing
inspection with safeguards for our allies and ourselves.

This year, I'll submit to Congress comprehensive legislation to
strengthen our hand in combating terrorists, whether they strike at home
or abroad. As the cowards who bombed the World Trade Center found out,
this country will hunt down terrorists and bring them to justice.

Middle East

Just this week, another horrendous terrorist act in Israel killed 19 and
injured scores more. On behalf of the American people and all of you, I
send our deepest sympathy to the families of the victims. I know that in
the face of such evil, it is hard for the people in the Middle East to
go forward. But the terrorists represent the past, not the future. We
must and we will pursue a comprehensive peace between Israel and all her
neighbors in the Middle East.

Accordingly, last night I signed an executive order that will block the
assets in the United States of terrorist organizations that threaten to
disrupt the peace process. It prohibits financial transactions with
these groups.

And tonight I call on all our allies in peace-loving nations throughout
the world to join us with renewed fervor in a global effort to combat
terrorism, we cannot permit the future to be marred by terror and fear
and paralysis.

Defense

From the day I took the oath of office, I pledged that our nation would
maintain the best-equipped, best-trained and best-prepared military on
earth. We have and they are. They have managed the dramatic downsizing
of our forces after the cold war with remarkable skill and spirit. But
to make sure our military is ready for action and to provide the pay and
the quality of life the military and their families deserve, I'm asking
the Congress to add $ 25 billion in defense spending over the next six
years.

I have visited many bases at home and around the world since I became
President. Tonight I repeat that request with renewed conviction. We ask
a very great deal of our armed forces. Now that they are smaller in
number, we ask more of them. They go out more often to more different
places and stay longer. They are called to service in many, many ways,
and we must give them and their families what the times demand and what
they have earned.

Just think about what our troops have done in the last year, showing
America at its best, helping to save hundreds of thousands of people in
Rwanda, moving with lightning speed to head off another threat to
Kuwait, giving freedom and democracy back to the people of Haiti.

We have proudly supported peace and prosperity and freedom from South
Africa to Northern Ireland, from Central and Eastern Europe to Asia,
from Latin America to the Middle East. All these endeavors are good in
those places but they make our future more confident and more secure.

Well, my fellow Americans, that's my agenda for America's future:
expanding opportunity not bureaucracy, enhancing security at home and
abroad, empowering our people to make the most of their own lives.

It's ambitious and achievable. But it's not enough.

We even need more than new ideas for changing the world or equipping
Americans to compete in the new economy, more than a Government that's
smaller, smarter and wiser, more than all the changes we can make in
Government and in the private sector from the outside in.

Values And Voices

Our fortunes and our prosperity also depend upon our ability to answer
some questions from within--from the values and voices that speak to our
hearts as well as our heads, voices that tell us we have to do more to
accept responsibility for ourselves and our families, for our
communities, and yes, for our fellow citizens.

We see our families and our communities all over this country coming
apart. And we feel the common ground shifting from under us. The PTA,
the town hall meeting, the ball park--it's hard for a lot of overworked
parents to find the time and space for those things that strengthen the
bonds of trust and cooperation.

Too many of our children don't even have parents and grandparents who
can give them those experiences that they need to build their own
character and their sense of identity. We all know that while we here in
this chamber can make a difference on those things, that the real
differences will be made by our fellow citizens where they work and
where they live.

And it'll be made almost without regard to party. When I used to go to
the softball park in Little Rock to watch my daughter's league and
people would come up to me--fathers and mothers--and talk to me, I can
honestly say I had no idea whether 90 percent of them were Republicans
or Democrats.

When I visited the relief centers after the floods in California,
Northern California, last week, a woman came up to me and did something
that very few of you would do. She hugged me and said, "Mr. President,
I'm a Republican, but I'm glad you're here."

Now, why? We can't wait for disasters to act the way we used to act
every day. Because as we move into this next century, everybody matters.
We don't have a person to waste. And a lot of people are losing a lot of
chances to do better.

That means that we need a New Covenant for everybody--for our corporate
and business leaders, we're going to work here to keep bringing the
deficit down, to expand markets, to support their success in every
possible way. But they have an obligation: when they're doing well, to
keep jobs in our communities and give their workers a fair share of the
prosperity they generate.

For people in the entertainment industry in this country, we applaud
your creativity and your worldwide success and we support your freedom
of expression but you do have a responsibility to assess the impact of
your work and to understand the damage that comes from the incessant,
repetitive, mindless violence and irresponsible conduct that permeates
our media all the time.

We've got to ask our community leaders and all kinds of organizations to
help us stop our most serious social problem: the epidemic of teen
pregnancies and births where there is no marriage. I have sent to
Congress a plan to target schools all over this country with
anti-pregnancy programs that work. But government can only do so much.
Tonight, I call on parents and leaders all across this country to join
together in a national campaign against teen pregnancy to make a
difference. We can do this and we must.

And I would like to say a special word to our religious leaders. You
know, I'm proud of the fact that the United States has more house of
worship per capita than any country in the world. These people, who lead
our houses of worship, can ignite their congregations to carry their
faith into action, can reach out to all of our children, to all of the
people in distress, to those who have been savaged by the breakdown of
all we hold dear, because so much of what must be done must come from
the inside out. And our religious leaders and their congregations can
make all the difference. They have a role in the New Covenant as well.

There must be more responsibility for all of our citizens. You know it
takes a lot of people to help all the kids in trouble stay off the
streets and in school. It takes a lot of people to build the Habitat for
Humanity houses that the Speaker celebrates on his lapel pin. It takes a
lot of people to provide the people power for all the civic
organizations in this country that made our communities mean so much to
most of us when we were kids. It takes every parent to teach the
children the difference between right and wrong and to encourage them to
learn and grow and to say no to the wrong things but also to believe
that they can be whatever they want to be.

I know it's hard when you're working harder for less, when you're under
great stress, to do these things. A lot of our people don't have the
time or the emotional stress they think to do the work of citizenship.
Most of us in politics haven't helped very much. For years, we've mostly
treated citizens like they were consumers or spectators, sort of
political couch potatoes who were supposed to watch the TV ads--either
promise them something for nothing or play on their fears and
frustrations. And more and more of our citizens now get most of their
information in very negative and aggressive ways that is hardly
conducive to honest and open conversations. But the truth is we have got
to stop seeing each other as enemies just because we have different
views.

If you go back to the beginning of this country, the great strength of
America, as de Tocqueville pointed out when he came here a long time
ago, has always been our ability to associate with people who were
different from ourselves and to work together to find common ground. And
in this day everybody has a responsibility to do more of that. We simply
cannot wait for a tornado, a fire or a flood to behave like Americans
ought to behave in dealing with one another.

I want to finish up here by pointing out some folks that are up with the
First Lady that represent what I'm trying to talk about. Citizens. I
have no idea what their party affiliation is or who they voted for in
the last election, but they represent what we ought to be doing.

Cindy Perry teaches second-graders to read in AmeriCorps in rural
Kentucky. She gains when she gives. She's a mother of four.

She says that her service inspired her to get her high school
equivalency last year. She was married when she was a teen-ager. Stand
up, Cindy. She married when she was a teen-ager. She had four children,
but she had time to serve other people, to get her high school
equivalency and she's going to use her AmeriCorps money to go back to
college.

Steven Bishop is the police chief of Kansas City. He's been a national
leader--stand up Steve. He's been a national leader in using more police
in community policing and he's worked with AmeriCorps to do it, and the
crime rate in Kansas City has gone down as a result of what he did.

Cpl. Gregory Depestre went to Haiti as part of his adopted country's
force to help secure democracy in his native land. And I might add we
must be the only country in the world that could have gone to Haiti and
taken Haitian-Americans there who could speak the language and talk to
the people, and he was one of them and we're proud of him.

The next two folks I've had the honor of meeting and getting to know a
little bit. The Rev. John and the Rev. Diana Cherry of the A.M.E. Zion
Church in Temple Hills, Md. I'd like to ask them to stand. I want to
tell you about them. In the early 80's they left Government service and
formed a church in a small living room in a small house in the early
80's. Today that church has 17,000 members. It is one of the three or
four biggest churches in the entire United States. It grows by 200 a
month.

They do it together. And the special focus of their ministry is keeping
families together. They are--Two things they did make a big impression
on me. I visited their church once and I learned they were building a
new sanctuary closer to the Washington, D.C., line, in a higher-crime,
higher-drug-rate area because they thought it was part of their ministry
to change the lives of the people who needed them. Second thing I want
to say is that once Reverend Cherry was at a meeting at the White House
with some other religious leaders and he left early to go back to his
church to minister to 150 couples that he had brought back to his church
from all over America to convince them to come back together to save
their marriages and to raise their kids. This is the kind of work that
citizens are doing in America. We need more of it and it ought to be
lifted up and supported.

The last person I want to introduce is Jack Lucas from Hattiesburg,
Mississippi. Jack, would you stand up. Fifty years ago in the sands of
Iwo Jima, Jack Lucas taught and learned the lessons of citizenship. On
February the 20th, 1945, he and three of his buddies encountered the
enemy and two grenades at their feet. Jack Lucas threw himself on both
of them. In that moment he saved the lives of his companions and
miraculously in the next instant a medic saved his life. He gained a
foothold for freedom and at the age of 17, just a year older than his
grandson, who's up there with him today, and his son, who is a West
Point graduate and a veteran, at 17, Jack Lucas became the youngest
marine in history and the youngest soldier in this century to win the
Congressional Medal of Honor. All these years later, yesterday, here's
what he said about that day: Didn't matter where you were from or who
you were. You relied on one another. You did it for your country. We all
gain when we give and we reap what we sow. That's at the heart of this
New Covenant. Responsibility, opportunity and citizenship.

More than stale chapters in some remote civic book they're still the
virtue by which we can fulfill ourselves and reach our God-given
potential and be like them. And also to fulfill the eternal promise of
this country, the enduring dream from that first and most-sacred
covenant. I believe every person in this country still believes that we
are created equal and given by our creator the right to life, liberty
and the pursuit of happiness.

This is a very, very great country and our best days are still to come.
Thank you and God bless you all.

***

State of the Union Address
William J. Clinton
January 23, 1996

Mr. Speaker, Mr. Vice President, members of the 104th Congress,
distinguished guests, my fellow Americans all across our land:

Let me begin tonight by saying to our men and women in uniform around
the world, and especially those helping peace take root in Bosnia and to
their families, I thank you. America is very, very proud of you.

My duty tonight is to report on the state of the Union--not the state of
our government, but of our American community; and to set forth our
responsibilities, in the words of our Founders, to form a more perfect
union.

The state of the Union is strong. Our economy is the healthiest it has
been in three decades. We have the lowest combined rates of unemployment
and inflation in 27 years. We have created nearly 8 million new jobs,
over a million of them in basic industries, like construction and
automobiles. America is selling more cars than Japan for the first time
since the 1970s. And for three years in a row, we have had a record
number of new businesses started in our country.

Our leadership in the world is also strong, bringing hope for new peace.
And perhaps most important, we are gaining ground in restoring our
fundamental values. The crime rate, the welfare and food stamp rolls,
the poverty rate and the teen pregnancy rate are all down. And as they
go down, prospects for America's future go up.

We live in an age of possibility. A hundred years ago we moved from farm
to factory. Now we move to an age of technology, information, and global
competition. These changes have opened vast new opportunities for our
people, but they have also presented them with stiff challenges. While
more Americans are living better, too many of our fellow citizens are
working harder just to keep up, and they are rightly concerned about the
security of their families.

The Role Of Government

We must answer here three fundamental questions: First, how do we make
the American Dream of opportunity for all a reality for all Americans
who are willing to work for it? Second, how do we preserve our old and
enduring values as we move into the future? And, third, how do we meet
these challenges together, as one America?

We know big government does not have all the answers. We know there's
not a program for every problem. We have worked to give the American
people a smaller, less bureaucratic government in Washington. And we
have to give the American people one that lives within its means.

The era of big government is over. But we cannot go back to the time
when our citizens were left to fend for themselves. Instead, we must go
forward as one America, one nation working together to meet the
challenges we face together. Self-reliance and teamwork are not opposing
virtues; we must have both.

I believe our new, smaller government must work in an old-fashioned
American way, together with all of our citizens through state and local
governments, in the workplace, in religious, charitable and civic
associations. Our goal must be to enable all our people to make the most
of their own lives--with stronger families, more educational
opportunity, economic security, safer streets, a cleaner environment in
a safer world.

To improve the state of our Union, we must ask more of ourselves, we
must expect more of each other, and we must face our challenges
together.

Here, in this place, our responsibility begins with balancing the budget
in a way that is fair to all Americans. There is now broad bipartisan
agreement that permanent deficit spending must come to an end.

I compliment the Republican leadership and the membership for the energy
and determination you have brought to this task of balancing the budget.
And I thank the Democrats for passing the largest deficit reduction plan
in history in 1993, which has already cut the deficit nearly in half in
three years.

Deficit

Since 1993, we have all begun to see the benefits of deficit reduction.
Lower interest rates have made it easier for businesses to borrow and to
invest and to create new jobs. Lower interest rates have brought down
the cost of home mortgages, car payments and credit card rates to
ordinary citizens. Now, it is time to finish the job and balance the
budget.

Though differences remain among us which are significant, the combined
total of the proposed savings that are common to both plans is more than
enough, using the numbers from your Congressional Budget Office to
balance the budget in seven years and to provide a modest tax cut.

These cuts are real. They will require sacrifice from everyone. But
these cuts do not undermine our fundamental obligations to our parents,
our children, and our future, by endangering Medicare, or Medicaid, or
education, or the environment, or by raising taxes on working families.

I have said before, and let me say again, many good ideas have come out
of our negotiations. I have learned a lot about the way both Republicans
and Democrats view the debate before us. I have learned a lot about the
good ideas that we could all embrace.

We ought to resolve our remaining differences. I am willing to work to
resolve them. I am ready to meet tomorrow. But I ask you to consider
that we should at least enact these savings that both plans have in
common and give the American people their balanced budget, a tax cut,
lower interest rates, and a brighter future. We should do that now, and
make permanent deficits yesterday's legacy.

Now it is time for us to look also to the challenges of today and
tomorrow, beyond the burdens of yesterday. The challenges are
significant. But America was built on challenges, not promises. And when
we work together to meet them, we never fail. That is the key to a more
perfect Union. Our individual dreams must be realized by our common
efforts.

Tonight I want to speak to you about the challenges we all face as a
people.

Strengthening Families

Our first challenge is to cherish our children and strengthen America's
families. Family is the foundation of American life. If we have stronger
families, we will have a stronger America.

Before I go on, I would like to take just a moment to thank my own
family, and to thank the person who has taught me more than anyone else
over 25 years about the importance of families and children--a wonderful
wife, a magnificent mother and a great First Lady. Thank you, Hillary.

All strong families begin with taking more responsibility for our
children. I have heard Mrs. Gore say that it's hard to be a parent
today, but it's even harder to be a child. So all of us, not just as
parents, but all of us in our other roles--our media, our schools, our
teachers, our communities, our churches and synagogues, our businesses,
our governments--all of us have a responsibility to help our children to
make it and to make the most of their lives and their God-given
capacities.

To the media, I say you should create movies and CDs and television
shows you'd want your own children and grandchildren to enjoy.

I call on Congress to pass the requirement for a V-chip in TV sets so
that parents can screen out programs they believe are inappropriate for
their children. When parents control what their young children see, that
is not censorship; that is enabling parents to assume more personal
responsibility for their children's upbringing. And I urge them to do
it. The V-chip requirement is part of the important telecommunications
bill now pending in this Congress. It has bipartisan support, and I urge
you to pass it now.

To make the V-chip work, I challenge the broadcast industry to do what
movies have done--to identify your programming in ways that help parents
to protect their children. And I invite the leaders of major media
corporations in the entertainment industry to come to the White House
next month to work with us in a positive way on concrete ways to improve
what our children see on television. I am ready to work with you.

I say to those who make and market cigarettes: every year a million
children take up smoking, even though it is against the law. Three
hundred thousand of them will have their lives shortened as a result.
Our administration has taken steps to stop the massive marketing
campaigns that appeal to our children. We are simply saying: Market your
products to adults, if you wish, but draw the line on children.

I say to those who are on welfare, and especially to those who have been
trapped on welfare for a long time: For too long our welfare system has
undermined the values of family and work, instead of supporting them.
The Congress and I are near agreement on sweeping welfare reform. We
agree on time limits, tough work requirements, and the toughest possible
child support enforcement. But I believe we must also provide child care
so that mothers who are required to go to work can do so without
worrying about what is happening to their children.

I challenge this Congress to send me a bipartisan welfare reform bill
that will really move people from welfare to work and do the right thing
by our children. I will sign it immediately.

Let us be candid about this difficult problem. Passing a law, even the
best possible law, is only a first step. The next step is to make it
work. I challenge people on welfare to make the most of this opportunity
for independence. I challenge American businesses to give people on
welfare the chance to move into the work force. I applaud the work of
religious groups and others who care for the poor. More than anyone else
in our society, they know the true difficulty of the task before us, and
they are in a position to help. Every one of us should join them. That
is the only way we can make real welfare reform a reality in the lives
of the American people.

To strengthen the family we must do everything we can to keep the teen
pregnancy rate going down. I am gratified, as I'm sure all Americans
are, that it has dropped for two years in a row. But we all know it is
still far too high.

Tonight I am pleased to announce that a group of prominent Americans is
responding to that challenge by forming an organization that will
support grass-roots community efforts all across our country in a
national campaign against teen pregnancy. And I challenge all of us and
every American to join their efforts.

I call on American men and women in families to give greater respect to
one another. We must end the deadly scourge of domestic violence in our
country. And I challenge America's families to work harder to stay
together. For families who stay together not only do better
economically, their children do better as well.

In particular, I challenge the fathers of this country to love and care
for their children. If your family has separated, you must pay your
child support. We're doing more than ever to make sure you do, and we're
going to do more, but let's all admit something about that, too: A check
will not substitute for a parent's love and guidance. And only you--only
you can make the decision to help raise your children. No matter who you
are, how low or high your station in life, it is the most basic human
duty of every American to do that job to the best of his or her ability.

Education

Our second challenge is to provide Americans with the educational
opportunities we will all need for this new century. In our schools,
every classroom in America must be connected to the information
superhighway, with computers and good software, and well-trained
teachers. We are working with the telecommunications industry, educators
and parents to connect 20 percent of California's classrooms by this
spring, and every classroom and every library in the entire United
States by the year 2000. I ask Congress to support this education
technology initiative so that we can make sure this national partnership
succeeds.

Every diploma ought to mean something. I challenge every community,
every school and every state to adopt national standards of excellence;
to measure whether schools are meeting those standards; to cut
bureaucratic red tape so that schools and teachers have more flexibility
for grass-roots reform; and to hold them accountable for results. That's
what our Goals 2000 initiative is all about.

I challenge every state to give all parents the right to choose which
public school their children will attend; and to let teachers form new
schools with a charter they can keep only if they do a good job.

I challenge all our schools to teach character education, to teach good
values and good citizenship. And if it means that teenagers will stop
killing each other over designer jackets, then our public schools should
be able to require their students to wear school uniforms.

I challenge our parents to become their children's first teachers. Turn
off the TV. See that the homework is done. And visit your children's
classroom. No program, no teacher, no one else can do that for you.

My fellow Americans, higher education is more important today than ever
before. We've created a new student loan program that's made it easier
to borrow and repay those loans, and we have dramatically cut the
student loan default rate. That's something we should all be proud of,
because it was unconscionably high just a few years ago. Through
AmeriCorps, our national service program, this year 25,000 young people
will earn college money by serving their local communities to improve
the lives of their friends and neighbors. These initiatives are right
for America and we should keep them going.

And we should also work hard to open the doors of college even wider. I
challenge Congress to expand work-study and help one million young
Americans work their way through college by the year 2000; to provide a
$1000 merit scholarship for the top five percent of graduates in every
high school in the United States; to expand Pell Grant scholarships for
deserving and needy students; and to make up to $10,000 a year of
college tuition tax deductible. It's a good idea for America.

Our third challenge is to help every American who is willing to work for
it, achieve economic security in this new age. People who work hard
still need support to get ahead in the new economy. They need education
and training for a lifetime. They need more support for families raising
children. They need retirement security. They need access to health
care. More and more Americans are finding that the education of their
childhood simply doesn't last a lifetime.

G.I. Bill For Workers

So I challenge Congress to consolidate 70 overlapping, antiquated
job-training programs into a simple voucher worth $2,600 for unemployed
or underemployed workers to use as they please for community college
tuition or other training. This is a G.I. Bill for America's workers we
should all be able to agree on.

More and more Americans are working hard without a raise. Congress sets
the minimum wage. Within a year, the minimum wage will fall to a 40-year
low in purchasing power. Four dollars and 25 cents an hour is no longer
a living wage, but millions of Americans and their children are trying
to live on it. I challenge you to raise their minimum wage.

In 1993, Congress cut the taxes of 15 million hard-pressed working
families to make sure that no parents who work full-time would have to
raise their children in poverty, and to encourage people to move from
welfare to work. This expanded earned income tax credit is now worth
about $1,800 a year to a family of four living on $20,000. The budget
bill I vetoed would have reversed this achievement and raised taxes on
nearly 8 million of these people. We should not do that.

I also agree that the people who are helped under this initiative are
not all those in our country who are working hard to do a good job
raising their children and at work. I agree that we need a tax credit
for working families with children. That's one of the things most of us
in this Chamber, I hope, can agree on. I know it is strongly supported
by the Republican majority. And it should be part of any final budget
agreement.

I want to challenge every business that can possibly afford it to
provide pensions for your employees. And I challenge Congress to pass a
proposal recommended by the White House Conference on Small Business
that would make it easier for small businesses and farmers to establish
their own pension plans. That is something we should all agree on.

We should also protect existing pension plans. Two years ago, with
bipartisan support that was almost unanimous on both sides of the aisle,
we moved to protect the pensions of 8 million working people and to
stabilize the pensions of 32 million more. Congress should not now let
companies endanger those workers' pension funds. I know the proposal to
liberalize the ability of employers to take money out of pension funds
for other purposes would raise money for the treasury. But I believe it
is false economy. I vetoed that proposal last year, and I would have to
do so again.

Health Care

Finally, if our working families are going to succeed in the new
economy, they must be able to buy health insurance policies that they do
not lose when they change jobs or when someone in their family gets
sick. Over the past two years, over one million Americans in working
families have lost their health insurance. We have to do more to make
health care available to every American. And Congress should start by
passing the bipartisan bill sponsored by Senator Kennedy and Senator
Kassebaum that would require insurance companies to stop dropping people
when they switch jobs, and stop denying coverage for preexisting
conditions. Let's all do that.

And even as we enact savings in these programs, we must have a common
commitment to preserve the basic protections of Medicare and
Medicaid--not just to the poor, but to people in working families,
including children, people with disabilities, people with AIDS, and
senior citizens in nursing homes.

In the past three years, we've saved $15 billion just by fighting health
care fraud and abuse. We have all agreed to save much more. We have all
agreed to stabilize the Medicare Trust Fund. But we must not abandon our
fundamental obligations to the people who need Medicare and Medicaid.
America cannot become stronger if they become weaker.

The G.I. Bill for workers, tax relief for education and child rearing,
pension availability and protection, access to health care, preservation
of Medicare and Medicaid--these things, along with the Family and
Medical Leave Act passed in 1993--these things will help responsible,
hard-working American families to make the most of their own lives.

But employers and employees must do their part, as well, as they are
doing in so many of our finest companies--working together, putting the
long-term prosperity ahead of the short-term gain. As workers increase
their hours and their productivity, employers should make sure they get
the skills they need and share the benefits of the good years, as well
as the burdens of the bad ones. When companies and workers work as a
team they do better, and so does America.

Crime

Our fourth great challenge is to take our streets back from crime and
gangs and drugs. At last we have begun to find a way to reduce crime,
forming community partnerships with local police forces to catch
criminals and prevent crime. This strategy, called community policing,
is clearly working. Violent crime is coming down all across America. In
New York City murders are down 25 percent; in St. Louis, 18 percent; in
Seattle, 32 percent. But we still have a long way to go before our
streets are safe and our people are free from fear.

The Crime Bill of 1994 is critical to the success of community policing.
It provides funds for 100,000 new police in communities of all sizes.
We're already a third of the way there. And I challenge the Congress to
finish the job. Let us stick with a strategy that's working and keep the
crime rate coming down.

Community policing also requires bonds of trust between citizens and
police. I ask all Americans to respect and support our law enforcement
officers. And to our police, I say, our children need you as role models
and heroes. Don't let them down.

The Brady Bill has already stopped 44,000 people with criminal records
from buying guns. The assault weapons ban is keeping 19 kinds of assault
weapons out of the hands of violent gangs. I challenge the Congress to
keep those laws on the books.

Our next step in the fight against crime is to take on gangs the way we
once took on the mob. I'm directing the FBI and other investigative
agencies to target gangs that involve juveniles in violent crime, and to
seek authority to prosecute as adults teenagers who maim and kill like
adults.

And I challenge local housing authorities and tenant associations:
Criminal gang members and drug dealers are destroying the lives of
decent tenants. From now on, the rule for residents who commit crime and
peddle drugs should be one strike and you're out.

I challenge every state to match federal policy to assure that serious
violent criminals serve at least 85 percent of their sentence.

More police and punishment are important, but they're not enough. We
have got to keep more of our young people out of trouble, with
prevention strategies not dictated by Washington, but developed in
communities. I challenge all of our communities, all of our adults, to
give our children futures to say yes to. And I challenge Congress not to
abandon the Crime Bill's support of these grass-roots prevention
efforts.

Finally, to reduce crime and violence we have to reduce the drug
problem. The challenge begins in our homes, with parents talking to
their children openly and firmly. It embraces our churches and
synagogues, our youth groups and our schools.

I challenge Congress not to cut our support for drug-free schools.
People like the D.A.R.E. officers are making a real impression on grade
schoolchildren that will give them the strength to say no when the time
comes.

Meanwhile, we continue our efforts to cut the flow of drugs into
America. For the last two years, one man in particular has been on the
front lines of that effort. Tonight I am nominating him--a hero of the
Persian Gulf War and the Commander in Chief of the United States
Military Southern Command--General Barry McCaffrey, as America's new
Drug Czar.

General McCaffrey has earned three Purple Hearts and two Silver Stars
fighting for this country. Tonight I ask that he lead our nation's
battle against drugs at home and abroad. To succeed, he needs a force
far larger than he has ever commanded before. He needs all of us. Every
one of us has a role to play on this team.

Thank you, General McCaffrey, for agreeing to serve your country one
more time.

Environment

Our fifth challenge: to leave our environment safe and clean for the
next generation. Because of a generation of bipartisan effort we do have
cleaner water and air, lead levels in children's blood has been cut by
70 percent, toxic emissions from factories cut in half. Lake Erie was
dead, and now it's a thriving resource. But 10 million children under 12
still live within four miles of a toxic waste dump. A third of us
breathe air that endangers our health. And in too many communities, the
water is not safe to drink. We still have much to do.

Yet Congress has voted to cut environmental enforcement by 25 percent.
That means more toxic chemicals in our water, more smog in our air, more
pesticides in our food. Lobbyists for polluters have been allowed to
write their own loopholes into bills to weaken laws that protect the
health and safety of our children. Some say that the taxpayer should
pick up the tab for toxic waste and let polluters who can afford to fix
it off the hook. I challenge Congress to reexamine those policies and to
reverse them.

This issue has not been a partisan issue. The most significant
environmental gains in the last 30 years were made under a Democratic
Congress and President Richard Nixon. We can work together. We have to
believe some basic things. Do you believe we can expand the economy
without hurting the environment? I do. Do you believe we can create more
jobs over the long run by cleaning the environment up? I know we can.
That should be our commitment.

We must challenge businesses and communities to take more initiative in
protecting the environment, and we have to make it easier for them to do
it. To businesses this administration is saying: If you can find a
cheaper, more efficient way than government regulations require to meet
tough pollution standards, do it--as long as you do it right. To
communities we say: We must strengthen community right-to-know laws
requiring polluters to disclose their emissions, but you have to use the
information to work with business to cut pollution. People do have a
right to know that their air and their water are safe.

Foreign Policy

Our sixth challenge is to maintain America's leadership in the fight for
freedom and peace throughout the world. Because of American leadership,
more people than ever before live free and at peace. And Americans have
known 50 years of prosperity and security.

We owe thanks especially to our veterans of World War II. I would like
to say to Senator Bob Dole and to all others in this Chamber who fought
in World War II, and to all others on both sides of the aisle who have
fought bravely in all our conflicts since: I salute your service, and so
do the American people.

All over the world, even after the Cold War, people still look to us and
trust us to help them seek the blessings of peace and freedom. But as
the Cold War fades into memory, voices of isolation say America should
retreat from its responsibilities. I say they are wrong.

The threats we face today as Americans respect no nation's borders.
Think of them: terrorism, the spread of weapons of mass destruction,
organized crime, drug trafficking, ethnic and religious hatred,
aggression by rogue states, environmental degradation. If we fail to
address these threats today, we will suffer the consequences in all our
tomorrows.

Of course, we can't be everywhere. Of course, we can't do everything.
But where our interests and our values are at stake, and where we can
make a difference, America must lead. We must not be isolationist.

We must not be the world's policeman. But we can and should be the
world's very best peacemaker. By keeping our military strong, by using
diplomacy where we can and force where we must, by working with others
to share the risk and the cost of our efforts, America is making a
difference for people here and around the world. For the first time
since the dawn of the nuclear age, there is not a single Russian missile
pointed at America's children.

North Korea

North Korea has now frozen its dangerous nuclear weapons program. In
Haiti, the dictators are gone, democracy has a new day, the flow of
desperate refugees to our shores has subsided. Through tougher trade
deals for America--over 80 of them--we have opened markets abroad, and
now exports are at an all-time high, growing faster than imports and
creating good American jobs.

Northern Ireland

We stood with those taking risks for peace: In Northern Ireland, where
Catholic and Protestant children now tell their parents, violence must
never return. In the Middle East, where Arabs and Jews who once seemed
destined to fight forever now share knowledge and resources, and even
dreams.

Bosnia

And we stood up for peace in Bosnia. Remember the skeletal prisoners,
the mass graves, the campaign to rape and torture, the endless lines of
refugees, the threat of a spreading war. All these threats, all these
horrors have now begun to give way to the promise of peace. Now, our
troops and a strong NATO, together with our new partners from Central
Europe and elsewhere, are helping that peace to take hold.

As all of you know, I was just there with a bipartisan congressional
group, and I was so proud not only of what our troops were doing, but of
the pride they evidenced in what they were doing. They knew what
America's mission in this world is, and they were proud to be carrying
it out.

Through these efforts, we have enhanced the security of the American
people. But make no mistake about it: important challenges remain.

Russia

The START II Treaty with Russia will cut our nuclear stockpiles by
another 25 percent. I urge the Senate to ratify it--now. We must end the
race to create new nuclear weapons by signing a truly comprehensive
nuclear test ban treaty--this year.

As we remember what happened in the Japanese subway, we can outlaw
poison gas forever if the Senate ratifies the Chemical Weapons
Convention--this year. We can intensify the fight against terrorists and
organized criminals at home and abroad if Congress passes the
anti-terrorism legislation I proposed after the Oklahoma City
bombing--now. We can help more people move from hatred to hope all
across the world in our own interest if Congress gives us the means to
remain the world's leader for peace.

My fellow Americans, the six challenges I have just discussed are for
all of us. Our seventh challenge is really America's challenge to those
of us in this hallowed hall tonight: to reinvent our government and make
our democracy work for them.

Reform

Last year this Congress applied to itself the laws it applies to
everyone else. This Congress banned gifts and meals from lobbyists. This
Congress forced lobbyists to disclose who pays them and what legislation
they are trying to pass or kill. This Congress did that, and I applaud
you for it.

Now I challenge Congress to go further--to curb special interest
influence in politics by passing the first truly bipartisan campaign
reform bill in a generation. You, Republicans and Democrats alike, can
show the American people that we can limit spending and open the
airwaves to all candidates.

I also appeal to Congress to pass the line-item veto you promised the
American people.

Our administration is working hard to give the American people a
government that works better and costs less. Thanks to the work of Vice
President Gore, we are eliminating 16,000 pages of unnecessary rules and
regulations, shifting more decision-making out of Washington, back to
states and local communities.

As we move into the era of balanced budgets and smaller government, we
must work in new ways to enable people to make the most of their own
lives. We are helping America's communities, not with more bureaucracy,
but with more opportunities. Through our successful Empowerment Zones
and Community Development Banks, we are helping people to find jobs, to
start businesses. And with tax incentives for companies that clean up
abandoned industrial property, we can bring jobs back to places that
desperately, desperately need them.

But there are some areas that the federal government should not leave
and should address and address strongly. One of these areas is the
problem of illegal immigration. After years of neglect, this
administration has taken a strong stand to stiffen the protection of our
borders. We are increasing border controls by 50 percent. We are
increasing inspections to prevent the hiring of illegal immigrants. And
tonight, I announce I will sign an executive order to deny federal
contracts to businesses that hire illegal immigrants.

Let me be very clear about this: We are still a nation of immigrants; we
should be proud of it. We should honor every legal immigrant here,
working hard to become a new citizen. But we are also a nation of laws.

I want to say a special word now to those who work for our federal
government. Today our federal government is 200,000 employees smaller
than it was the day I took office as President.

Our federal government today is the smallest it has been in 30 years,
and it's getting smaller every day. Most of our fellow Americans
probably don't know that. And there is a good reason: The remaining
federal work force is composed of Americans who are now working harder
and working smarter than ever before, to make sure the quality of our
services does not decline.

I'd like to give you one example. His name is Richard Dean. He is a 49
year-old Vietnam veteran who's worked for the Social Security
Administration for 22 years now. Last year he was hard at work in the
Federal Building in Oklahoma City when the blast killed 169 people and
brought the rubble down all around him. He reentered that building four
times. He saved the lives of three women. He's here with us this
evening, and I want to recognize Richard and applaud both his public
service and his extraordinary personal heroism.

But Richard Dean's story doesn't end there. This last November, he was
forced out of his office when the government shut down. And the second
time the government shut down he continued helping Social Security
recipients, but he was working without pay.

On behalf of Richard Dean and his family, and all the other people who
are out there working every day doing a good job for the American
people, I challenge all of you in this Chamber: Never, ever shut the
federal government down again.

On behalf of all Americans, especially those who need their Social
Security payments at the beginning of March, I also challenge the
Congress to preserve the full faith and credit of the United States--to
honor the obligations of this great nation as we have for 220 years; to
rise above partisanship and pass a straightforward extension of the debt
limit and show people America keeps its word.

I know that this evening I have asked a lot of Congress, and even more
from America. But I am confident: When Americans work together in their
homes, their schools, their churches, their synagogues, their civic
groups, their workplace, they can meet any challenge.

I say again, the era of big government is over. But we can't go back to
the era of fending for yourself. We have to go forward to the era of
working together as a community, as a team, as one America, with all of
us reaching across these lines that divide us--the division, the
discrimination, the rancor--we have to reach across it to find common
ground. We have got to work together if we want America to work.

I want you to meet two more people tonight who do just that. Lucius
Wright is a teacher in the Jackson, Mississippi, public school system. A
Vietnam veteran, he has created groups to help inner-city children turn
away from gangs and build futures they can believe in. Sergeant Jennifer
Rodgers is a police officer in Oklahoma City. Like Richard Dean, she
helped to pull her fellow citizens out of the rubble and deal with that
awful tragedy. She reminds us that in their response to that atrocity
the people of Oklahoma City lifted all of us with their basic sense of
decency and community.

Lucius Wright and Jennifer Rodgers are special Americans. And I have the
honor to announce tonight that they are the very first of several
thousand Americans who will be chosen to carry the Olympic torch on its
long journey from Los Angeles to the centennial of the modern Olympics
in Atlanta this summer--not because they are star athletes, but because
they are star citizens, community heroes meeting America's challenges.
They are our real champions.

Now, each of us must hold high the torch of citizenship in our own
lives. None of us can finish the race alone. We can only achieve our
destiny together--one hand, one generation, one American connecting to
another.

There have always been things we could do together--dreams we could make
real--which we could never have done on our own. We Americans have
forged our identity, our very union, from every point of view and every
point on the planet, every different opinion. But we must be bound
together by a faith more powerful than any doctrine that divides us--by
our belief in progress, our love of liberty, and our relentless search
for common ground.

America has always sought and always risen to every challenge. Who would
say that, having come so far together, we will not go forward from here?
Who would say that this age of possibility is not for all Americans?

Our country is and always has been a great and good nation. But the best
is yet to come, if we all do our part.

Thank you, God bless you and God bless the United States of America.
Thank you.

***

State of the Union Address
William J. Clinton
February 4, 1997

Mr. Speaker, Mr. Vice President, members of the 105th Congress,
distinguished guests, my fellow Americans:

I think I should start by saying thanks for inviting me back.

I come before you tonight with a challenge as great as any in our
peacetime history--and a plan of action to meet that challenge, to
prepare our people for the bold new world of the 21st century.

We have much to be thankful for. With four years of growth, we have won
back the basic strength of our economy. With crime and welfare rolls
declining, we are winning back our optimism, the enduring faith that we
can master any difficulty. With the Cold War receding and global
commerce at record levels, we are helping to win an unrivaled peace and
prosperity all across the world.

My fellow Americans, the state of our union is strong, but now we must
rise to the decisive moment, to make a nation and a world better than
any we have ever known.

The new promise of the global economy, the Information Age, unimagined
new work, life-enhancing technology--all these are ours to seize. That
is our honor and our challenge. We must be shapers of events, not
observers, for if we do not act, the moment will pass and we will lose
the best possibilities of our future.

We face no imminent threat, but we do have an enemy. The enemy of our
time is inaction.

So tonight I issue a call to action--action by this Congress, action by
our states, by our people to prepare America for the 21st century;
action to keep our economy and our democracy strong and working for all
our people; action to strengthen education and harness the forces of
technology and science; action to build stronger families and stronger
communities and a safer environment; action to keep America the world's
strongest force for peace, freedom and prosperity; and above all, action
to build a more perfect union here at home.

The spirit we bring to our work will make all the difference.

We must be committed to the pursuit of opportunity for all Americans,
responsibility from all Americans in a community of all Americans. And
we must be committed to a new kind of government: not to solve all our
problems for us, but to give our people--all our people--the tools they
need to make the most of their own lives. And we must work together.

The people of this nation elected us all. They want us to be partners,
not partisans. They put us all right here in the same boat. They gave us
all oars, and they told us to row. Now, here is the direction I believe
we should take.

First, we must move quickly to complete the unfinished business of our
country: to balance the budget, renew our democracy, and finish the job
of welfare reform.

Over the last four years we have brought new economic growth by
investing in our people, expanding our exports, cutting our deficits,
creating over 11 million new jobs, a four-year record.

Now we must keep our economy the strongest in the world. We here tonight
have an historic opportunity. Let this Congress be the Congress that
finally balances the budget. Thank you.

In two days I will propose a detailed plan to balance the budget by
2002. This plan will balance the budget and invest in our people while
protecting Medicare, Medicaid, education and the environment. It will
balance the budget and build on the vice president's efforts to make our
government work better--even as it costs less.

It will balance the budget and provide middle-class tax relief to pay
for education and health care, to help to raise a child, to buy and sell
a home.

Balancing the budget requires only your vote and my signature. It does
not require us to rewrite our Constitution. I believe, I believe it is
both unnecessary, unwise to adopt a balanced budget amendment that could
cripple our country in time of economic crisis and force unwanted
results such as judges halting Social Security checks or increasing
taxes.

Let us at least agree we should not pass any measure, no measure should
be passed that threatens Social Security. We don't need, whatever your
view on that, we all must concede we don't need a constitutional
amendment, we need action. Whatever our differences, we should balance
the budget now, and then, for the long-term health of our society, we
must agree to a bipartisan process to preserve Social Security and
reform Medicare for the long run, so that these fundamental programs
will be as strong for our children as they are for our parents.

And let me say something that's not in my script tonight. I know this is
not going to be easy. But I really believe one of the reasons the
American people gave me a second term was to take the tough decisions in
the next four years that will carry our country through the next 50
years. I know it is easier for me than for you to say or do. But another
reason I was elected is to support all of you, without regard to party,
to give you what is necessary to join in these decisions. We owe it to
our country and to our future.

Our second piece of unfinished business requires us to commit ourselves
tonight, before the eyes of America, to finally enacting bipartisan
campaign finance reform.

Now, Senators McCain and Feingold, Representatives Shays and Meehan have
reached across party lines here to craft tough and fair reform. Their
proposal would curb spending, reduce the role of special interests,
create a level playing field between challengers and incumbents, and ban
contributions from non-citizens, all corporate sources, and the other
large soft-money contributions that both parties receive.

You know and I know that this can be delayed, and you know and I know
that delay will mean the death of reform.

So let's set our own deadline. Let's work together to write bipartisan
campaign finance reform into law and pass McCain-Feingold by the day we
celebrate the birth of our democracy, July the 4th.

There is a third piece of unfinished business. Over the last four years
we moved a record two and a quarter million people off the welfare
roles. Then last year Congress enacted landmark welfare reform
legislation demanding that all able-bodied recipients assume the
responsibility of moving from welfare to work. Now each and every one of
us has to fulfill our responsibility, indeed our moral obligation, to
make sure that people who now must work can work. And now we must act to
meet a new goal: two million more people off the welfare rolls by the
year 2000.

Here is my plan: Tax credits and other incentives for businesses that
hire people off welfare; Incentives for job placement firms in states to
create more jobs for welfare recipients; Training, transportation and
child care to help people go to work. Now I challenge every state--turn
those welfare checks into private sector paychecks. I challenge every
religious congregation, every community nonprofit, every business to
hire someone off welfare. And I'd like to say especially to every
employer in our country who ever criticized the old welfare system, you
can't blame that old system anymore; we have torn it down. Now, do your
part. Give someone on welfare the chance to go to work.

Tonight I am pleased to announce that five major corporations--Sprint,
Monsanto, UPS, Burger King and United Airlines--will be the first to
join in a new national effort to marshal America's businesses large and
small to create jobs so that people can move from welfare to work.

We passed welfare reform. All of you know I believe we were right to do
it. But no one can walk out of this chamber with a clear conscience
unless you are prepared to finish the job.

And we must join together to do something else, too, something both
Republican and Democratic governors have asked us to do: to restore
basic health and disability benefits when misfortune strikes immigrants
who came to this country legally, who work hard, pay taxes, and obey the
law. To do otherwise is simply unworthy of a great nation of immigrants.

Now, looking ahead, the greatest step of all, the high threshold to the
future we must now cross, and my number one priority for the next four
years, is to ensure that all Americans have the best education in the
world. Thank you.

Let's work together to meet these three goals: every eight-year-old must
be able to read, every 12-year-old must be able to log on to the
Internet, every 18-year-old must be able to go to college, and every
adult American must be able to keep on learning for a lifetime.

My balanced budget makes an unprecedented commitment to these goals--$51
billion next year--but far more than money is required. I have a plan, a
call to action for American education based on these 10 principles:

First, a national crusade for education standards--not federal
government standards, but national standards, representing what all our
students must know to succeed in the knowledge economy of the 21st
century. Every state and school must shape the curriculum to reflect
these standards and train teachers to lift students up to them. To help
schools meet the standards and measure their progress, we will lead an
effort over the next two years to develop national tests of student
achievement in reading and math.

Tonight I issue a challenge to the nation. Every state should adopt high
national standards, and by 1999, every state should test every 4th
grader in reading and every 8th grader in math to make sure these
standards are met.

Raising standards will not be easy, and some of our children will not be
able to meet them at first. The point is not to put our children down,
but to lift them up. Good tests will show us who needs help, what
changes in teaching to make, and which schools need to improve. They can
help us end social promotion, for no child should move from grade school
to junior high or junior high to high school until he or she is ready.

Last month our secretary of education, Dick Riley, and I visited
northern Illinois, where 8th grade students from 20 school districts, in
a project aptly called First in the World, took the third International
Math and Science Study.

That's a test that reflects the world-class standards our children must
meet for the new era. And those students in Illinois tied for first in
the world in science and came in second in math. Two of them, Kristen
Tanner and Chris Getsla, are here tonight along with their teacher, Sue
Winski. They're up there with the first lady, and they prove that when
we aim high and challenge our students, they will be the best in the
world. Let's give them a hand. Stand up, please.

Second, to have the best schools, we must have the best teachers. Most
of us in this chamber would not be here tonight without the help of
those teachers. I know that I wouldn't be here.

For years many of our educators, led by North Carolina's governor, Jim
Hunt, and the National Board for Professional Teaching Standards, have
worked very hard to establish nationally accepted credentials for
excellence in teaching.

Just 500 of these teachers have been certified since 1995. My budget
will enable 100,000 more to seek national certification as master
teachers. We should reward and recognize our best teachers. And as we
reward them, we should quickly and fairly remove those few who don't
measure up, and we should challenge more of our finest young people to
consider teaching as a career.

Third, we must do more to help all our children read. Forty percent--40
percent--of our 8-year-olds cannot read on their own. That's why we have
just launched the America Reads initiative, to build a citizen army of
one million volunteer tutors to make sure every child can read
independently by the end of the 3rd grade. We will use thousands of
AmeriCorps volunteers to mobilize this citizen army. We want at least
100,000 college students to help.

And tonight I'm pleased that 60 college presidents have answered my
call, pledging that thousands of their work-study students will serve
for one year as reading tutors.

This is also a challenge to every teacher and every principal.

You must use these tutors to help your students read. And it is
especially a challenge to our parents. You must read with your children
every night.

This leads to the fourth principle: Learning begins in the first days of
life. Scientists are now discovering how young children develop
emotionally and intellectually from their very first days and how
important it is for parents to begin immediately talking, singing, even
reading to their infants. The first lady has spent years writing about
this issue, studying it. And she and I are going to convene a White
House conference on early learning and the brain this spring to explore
how parents and educators can best use these startling new findings.

We already know we should start teaching children before they start
school. That's why this balanced budget expands Head Start to one
million children by 2002. And that is why the vice president and Mrs.
Gore will host their annual family conference this June on what we can
do to make sure that parents are an active part of their children's
learning all the way through school.

They've done a great deal to highlight the importance of family in our
life, and now they're turning their attention to getting more parents
involved in their children's learning all the way through school. I
thank you, Mr. Vice President, and I thank you especially, Tipper, for
what you're doing.

Fifth, every state should give parents the power to choose the right
public school for their children. Their right to choose will foster
competition and innovation that can make public schools better. We
should also make it possible for more parents and teachers to start
charter schools, schools that set and meet the highest standards and
exist only as long as they do.

Our plan will help America to create 3,000 of these charter schools by
the next century, nearly seven times as there are in the country today,
so that parents will have even more choices in sending their children to
the best schools.

Sixth, character education must be taught in our schools. We must teach
our children to be good citizens. And we must continue to promote order
and discipline; supporting communities that introduce school uniforms,
impose curfews, enforce truancy laws, remove disruptive students from
the classroom, and have zero tolerance for guns and drugs in schools.

Seventh, we cannot expect our children to raise themselves up in schools
that are literally falling down. With the student population at an
all-time high, and record numbers of school buildings falling into
disrepair, this has now become a serious national concern. Therefore, my
budget includes a new initiative: $5 billion to help communities finance
$20 billion in school construction over the next four years.

Eighth, we must make the 13th and 14th years of education--at least two
years of college--just as universal in America by the 21st century as a
high school education is today, and we must open the doors of college to
all Americans.

To do that, I propose America's Hope Scholarship, based on Georgia's
pioneering program--two years of a $1,500 tax credit for college
tuition, enough to pay for the typical community college. I also propose
a tax deduction of up to $10,000 a year for all tuition after high
school, an expanded IRA you can withdraw from tax free for education,
and the largest increase in Pell Grant scholarship in 20 years.

Now this plan will give most families the ability to pay no taxes on
money they save for college tuition. I ask you to pass it and give every
American who works hard the chance to go to college.

Ninth, in the 21st century we must expand the frontiers of learning
across a lifetime. All our people, of whatever age, must have the chance
to learn new skills.

Most Americans live near a community college. The roads that take them
there can be paths to a better future. My GI bill for America's workers
will transform the confusing tangle of federal training programs into a
simple skill grant to go directly into eligible workers' hands.

For too long this bill has been sitting on that desk there, without
action. I ask you to pass it now. Let's give more of our workers the
ability to learn and to earn for a lifetime.

Tenth, we must bring the power of the Information Age into all our
schools.

Last year I challenged America to connect every classroom and library to
the Internet by the year 2000, so that for the first time in our
history, children in the most isolated rural town, the most comfortable
suburbs, the poorest inner-city schools will have the same access to the
same universe of knowledge.

That is my plan--a call to action for American education. Some may say
that it is unusual for a president to pay this kind of attention to
education. Some may say it is simply because the president and his
wonderful wife have been obsessed with this subject for more years than
they can recall. That is not what is driving these proposals. We must
understand the significance of this endeavor.

One of the greatest sources of our strength throughout the Cold War was
a bipartisan foreign policy. Because our future was at stake, politics
stopped at the water's edge. Now I ask you, and I ask all our nation's
governors, I ask parents, teachers and citizens all across America, for
a new nonpartisan commitment to education, because education is a
critical national security issue for our future and politics must stop
at the schoolhouse door.

To prepare America for the 21st century, we must harness the powerful
forces of science and technology to benefit all Americans. This is the
first State of the Union carried live in video over the Internet, but
we've only begun to spread the benefits of a technology revolution that
should become the modern birthright of every citizen.

Our effort to connect every classroom is just the beginning. Now we
should connect every hospital to the Internet so that doctors can
instantly share data about their patients with the best specialists in
the field.

And I challenge the private sector tonight to start by connecting every
children's hospital as soon as possible so that a child in bed can stay
in touch with school, family and friends. A sick child need no longer be
a child alone.

We must build the second generation of the Internet so that our leading
universities and national laboratories can communicate in speeds a
thousand times faster than today to develop new medical treatments, new
sources of energy, new ways of working together. But we cannot stop
there.

As the Internet becomes our new town square, a computer in every home: a
teacher of all subjects, a connection to all cultures. This will no
longer be a dream, but a necessity. And over the next decade, that must
be our goal.

We must continue to explore the heavens, pressing on with the Mars
probes and the International Space Station, both of which will have
practical applications for our everyday living.

We must speed the remarkable advances in medical science. The human
genome project is now decoding the genetic mysteries of life. American
scientists have discovered genes linked to breast cancer and ovarian
cancer and medication that stops a stroke in progress and begins to
reverse its effects, and treatments that dramatically lengthen the lives
of people with HIV and AIDS.

Since I took office, funding for AIDS research at the National
Institutes of Health has increased dramatically to $1.5 billion. With
new resources, NIH will now become the most powerful discovery engine
for an AIDS vaccine, working with other scientists, to finally end the
threat of AIDS. Thank you. Remember that every year, every year we move
up the discovery of an AIDS vaccine we'll save millions of lives around
the world. We must reinforce our commitment to medical science.

To prepare America for the 21st century we must build stronger families.
Over the past four years the Family and Medical Leave Law has helped
millions of Americans to take time off to be with their families.

With new pressures on people and the way they work and live, I believe
we must expand family leave so that workers can take time off for
teacher conferences and a child's medical checkup. We should pass flex
time so workers can choose to be paid for overtime in income or trade it
in for time off to be with their families.

We must continue--we must continue, step by step, to give more families
access to affordable quality health care. Forty million Americans still
lack health insurance. Ten million children still lack health insurance.
Eighty percent of them have working parents who pay taxes. That is
wrong.

My--my balanced budget will extend health coverage to up to 5 million of
those children. Since nearly half of all children who lose their
insurance do so because their parents lose or change a job, my budget
will also ensure that people who temporarily lose their jobs can still
afford to keep their health insurance. No child should be without a
doctor just because a parent is without a job.

My Medicare plan modernizes Medicare, increases the life of the trust
fund to 10 years, provides support for respite care for the many
families with loved ones afflicted with Alzheimer's, and, for the first
time, it would fully pay for annual mammograms.

Just as we ended drive-through deliveries of babies last year, we must
now end the dangerous and demeaning practice of forcing women home from
the hospital only hours after a mastectomy.

I ask your support for bipartisan legislation to guarantee that a woman
can stay in the hospital for 48 hours after a mastectomy. With us
tonight is Dr. Kristen Zarfos, a Connecticut surgeon whose outrage at
this practice spurred a national movement and inspired this legislation.
I'd like her to stand so we can thank her for her efforts. Dr. Zarfos,
thank you.

In the last four years, we have increased child support collections by
50 percent. Now we should go further and do better by making it a felony
for any parent to cross a state line in an attempt to flee from this,
his or her most sacred obligation.

Finally, we must also protect our children by standing firm in our
determination to ban the advertising and marketing of cigarettes that
endanger their lives.

To prepare America for the 21st century, we must build stronger
communities. We should start with safe streets. Serious crime has
dropped five years in a row. The key has been community policing. We
must finish the job of putting 100,000 community police on the streets
of the United States.

We should pass the Victims' Rights Amendment to the Constitution, and I
ask you to mount a full-scale assault on juvenile crime, with
legislation that declares war on gangs with new prosecutors and tougher
penalties, extends the Brady bill so violent teen criminals will not be
able to buy handguns, requires child safety locks on handguns to prevent
unauthorized use, and helps to keep our schools open after hours, on
weekends and in the summer so our young people will have someplace to go
and something to say yes to.

This balanced budget includes the largest anti-drug effort ever--to stop
drugs at their source; punish those who push them; and teach our young
people that drugs are wrong, drugs are illegal, and drugs will kill
them. I hope you will support it.

Our growing economy has helped to revive poor urban and rural
neighborhoods, but we must do more to empower them to create the
conditions in which all families can flourish and to create jobs through
investment by business and loans by banks.

We should double the number of empowerment zones. They've already
brought so much hope to communities like Detroit, where the unemployment
rate has been cut in half in four years. We should restore contaminated
urban land and buildings to constructive use. We should expand the
network of community development banks.

And together, we must pledge tonight that we will use this empowerment
approach, including private sector tax incentives, to renew our capital
city so that Washington is a great place to work and live--and once
again the proud face America shows the world!

We must protect our environment in every community. In the last four
years, we cleaned up 250 toxic waste sites, as many as in the previous
12. Now we should clean up 500 more so that our children grow up next to
parks, not poison. I urge to pass my proposal to make big polluters live
by a simple rule: If you pollute our environment, you should pay to
clean it up.

In the last four years, we strengthened our nation's safe food and clean
drinking water laws; we protected some of America's rarest, most
beautiful land in Utah's Red Rocks region; created three new national
parks in the California desert; and began to restore the Florida
Everglades.

Now we must be as vigilant with our rivers as we are with our lands.
Tonight I announce that this year I will designate 10 American Heritage
Rivers to help communities alongside them revitalize their waterfronts
and clean up pollution in the rivers, proving once again that we can
grow the economy as we protect the environment.

We must also protect our global environment, working to ban the worst
toxic chemicals and to reduce the greenhouse gases that challenge our
health even as they change our climate.

Now, we all know that in all of our communities some of our children
simply don't have what they need to grow and learn in their own homes or
schools or neighborhoods. And that means the rest of us must do more,
for they are our children, too. That's why President Bush, General Colin
Powell, former Housing Secretary Henry Cisneros will join the vice
president and me to lead the President's Summit of Service in
Philadelphia in April.

Our national service program, AmeriCorps, has already helped 70,000
young people to work their way through college as they serve America.
Now we intend to mobilize millions of Americans to serve in thousands of
ways. Citizen service is an American responsibility which all Americans
should embrace. And I ask your support for that endeavor.

I'd like to make just one last point about our national community. Our
economy is measured in numbers and statistics. And it's very important.
But the enduring worth of our nation lies in our shared values and our
soaring spirit. So instead of cutting back on our modest efforts to
support the arts and humanities I believe we should stand by them and
challenge our artists, musicians, and writers, challenge our museums,
libraries, and theaters.

We should challenge all Americans in the arts and humanities to join
with their fellow citizens to make the year 2000 a national celebration
of the American spirit in every community, a celebration of our common
culture in the century that is past and in the new one to come in a new
millennium so that we can remain the world's beacon not only of liberty
but of creativity long after the fireworks have faded.

To prepare America for the 21st century we must master the forces of
change in the world and keep American leadership strong and sure for an
uncharted time.

Fifty years ago, a farsighted America led in creating the institutions
that secured victory in the Cold War and built a growing world economy.
As a result, today more people than ever embrace our ideals and share
our interests. Already we have dismantled many of the blocks and
barriers that divided our parents' world. For the first time, more
people live under democracy than dictatorship including every nation in
our own hemisphere but one, and its day, too, will come.

Now we stand at another moment of change and choice, and another time to
be farsighted, to bring America 50 more years of security and
prosperity.

In this endeavor, our first task is to help to build for the very first
time an undivided, democratic Europe. When Europe is stable, prosperous,
and at peace, America is more secure.

To that end, we must expand NATO by 1999, so that countries that were
once our adversaries can become our allies. At the special NATO summit
this summer, that is what we will begin to do. We must strengthen NATO's
Partnership for Peace with non-member allies. And we must build a stable
partnership between NATO and a democratic Russia.

An expanded NATO is good for America, and a Europe in which all
democracies define their future not in terms of what they can do to each
other, but in terms of what they can do together for the good of
all--that kind of Europe is good for America.

Second, America must look to the East no less than to the West.

Our security demands it. Americans fought three wars in Asia in this
century.

Our prosperity requires it. More than 2 million American jobs depend
upon trade with Asia. There, too, we are helping to shape an Asia
Pacific community of cooperation, not conflict.

Let our--let our progress there not mask the peril that remains.
Together with South Korea, we must advance peace talks with North Korea
and bridge the Cold War's last divide. And I call on Congress to fund
our share of the agreement under which North Korea must continue to
freeze and then dismantle its nuclear weapons program.

We must pursue a deeper dialogue with China for the sake of our
interests and our ideals. An isolated China is not good for America. A
China playing its proper role in the world is. I will go to China, and I
have invited China's president to come here, not because we agree on
everything, but because engaging China is the best way to work on our
common challenges, like ending nuclear testing, and to deal frankly with
our fundamental differences, like human rights.

The American people must prosper in the global economy. We've worked
hard to tear down trade barriers abroad so that we can create good jobs
at home. I'm proud to say that today America is once again the most
competitive nation and the No. 1 exporter in the world.

Now we must act to expand our exports, especially to Asia and Latin
America, two of the fastest-growing regions on earth, or be left behind
as these emerging economies forge new ties with other nations. That is
why we need the authority now to conclude new trade agreements that open
markets to our goods and services even as we preserve our values.

We need not shrink from the challenge of the global economy. After all,
we have the best workers and the best products. In a truly open market,
we can out-compete anyone, anywhere on earth.

But this is about more than economics. By expanding trade, we can
advance the cause of freedom and democracy around the world. There is no
better example of this truth than Latin America where democracy and open
markets are on the march together. That is why I will visit there in the
spring to reinforce our important ties.

We should all be proud that America led the effort to rescue our
neighbor, Mexico, from its economic crisis. And we should all be proud
that last month Mexico repaid the United States, three full years ahead
of schedule, with half a billion dollar profit to us.

America must continue to be an unrelenting force for peace. From the
Middle East to Haiti, from Northern Ireland to Africa, taking reasonable
risks for peace keeps us from being drawn into far more costly conflicts
later. With American leadership, the killing has stopped in Bosnia. Now
the habits of peace must take hold.

The new NATO force will allow reconstruction and reconciliation to
accelerate. Tonight I ask Congress to continue its strong support of our
troops. They are doing a remarkable job there for America, and America
must do right by them.

Fifth, we must move strongly against new threats to our security. In the
past four years, we agreed to ban--we led the way to a worldwide
agreement to ban nuclear testing.

With Russia, we dramatically cut nuclear arsenals and we stopped
targeting each other's citizens. We are acting to prevent nuclear
materials from falling into the wrong hands, and to rid the world of
land mines.

We are working with other nations with renewed intensity to fight drug
traffickers and to stop terrorists before they act and hold them fully
accountable if they do.

Now we must rise to a new test of leadership--ratifying the Chemical
Weapons Convention. Make no mistake about it, it will make our troops
safer from chemical attack. It will help us to fight terrorism. We have
no more important obligations, especially in the wake of what we now
know about the Gulf War.

This treaty has been bipartisan from the beginning, supported by
Republican and Democratic administrations, and Republican and Democratic
members of Congress, and already approved by 68 nations. But if we do
not act by April the 29th, when this convention goes into force--with or
without us--we will lose the chance to have Americans leading and
enforcing this effort. Together we must make the Chemical Weapons
Convention law so that at last we can begin to outlaw poisoned gas from
the earth.

Finally, we must have the tools to meet all these challenges. We must
maintain a strong and ready military. We must increase funding for
weapons modernization by the year 2000. And we must take good care of
our men and women in uniform. They are the world's finest.

We must also renew our commitment to America's diplomacy and pay our
debts and dues to international financial institutions like the World
Bank--and to a reforming United Nations. Every dollar--every dollar we
devote to preventing conflicts, to promoting democracy, to stopping the
spread of disease and starvation brings a sure return in security and
savings. Yet international affairs spending today is just 1 percent of
the federal budget, a small fraction of what America invested in
diplomacy to choose leadership over escapism at the start of the cold
war.

If America is to continue to lead the world, we here who lead America
simply must find the will to pay our way. A farsighted America moved the
world to a better place over these last 50 years. And so it can be for
another 50 years. But a shortsighted America will soon find its words
falling on deaf ears all around the world.

Almost exactly 50 years ago in the first winter of the Cold War
President Truman stood before a Republican Congress and called upon our
country to meet its responsibilities of leadership. This was his
warning. He said, "If we falter, we may endanger the peace of the world,
and we shall surely endanger the welfare of this nation."

That Congress, led by Republicans like Senator Arthur Vandenburg,
answered President Truman's call. Together, they made the commitments
that strengthened our country for 50 years. Now let us do the same. Let
us do what it takes to remain the indispensable nation, to keep America
strong, secure and prosperous for another 50 years.

In the end, more than anything else, our world leadership grows out of
the power of our example here at home, out of our ability to remain
strong as one America.

All over the world people are being torn asunder by racial, ethnic and
religious conflicts that fuel fanaticism and terror. We are the world's
most diverse democracy, and the world looks to us to show that it is
possible to live and advance together across those kinds of differences.
America has always been a nation of immigrants.

From the start, a steady stream of people in search of freedom and
opportunity have left their own lands to make this land their home. We
started as an experiment in democracy fueled by Europeans. We have grown
into an experiment in democratic diversity fueled by openness and
promise.

My fellow Americans, we must never, ever believe that our diversity is a
weakness; it is our greatest strength.

Americans speak every language, know every country. People on every
continent can look to us and see the reflection of their own great
potential, and they always will, as long as we strive to give all our
citizens, whatever their background, an opportunity to achieve their own
greatness.

We're not there yet. We still see evidence of a biting bigotry and
intolerance in ugly words and awful violence, in burned churches and
bombed buildings. We must fight against this in our country and in our
hearts.

Just a few days before my second inauguration, one of our country's
best-known pastors, Reverend Robert Schuller, suggested that I read
Isaiah 58:12. Here's what it says: "Thou shalt raise up the foundations
of many generations, and thou shalt be called the repairer of the
breach, the restorer of paths to dwell in."

I placed my hand on that verse when I took the oath of office, on behalf
of all Americans, for no matter what our differences in our faiths, our
backgrounds, our politics, we must all be repairers of the breach.

I want to say a word about two other Americans who show us how.
Congressman Frank Tejeda was buried yesterday, a proud American whose
family came from Mexico. He was only 51 years old. He was awarded the
Silver Star, the Bronze Star and the Purple Heart fighting for his
country in Vietnam. And he went on to serve Texas and America fighting
for our future here in this chamber.

We are grateful for his service and honored that his mother, Lillie
Tejeda, and his sister, Mary Alice, have come from Texas to be with us
here tonight. And we welcome you. Thank you.

Gary Locke, the newly-elected governor of Washington state, is the first
Chinese-American governor in the history of our country. He's the proud
son of two of the millions of Asian American immigrants who strengthened
America with their hard work, family values and good citizenship.

He represents the future we can all achieve. Thank you, governor, for
being here. Please stand up.

Reverend Schuller, Congressman Tejeda, Governor Locke, along with
Kristen Tanner and Chris Getsla, Sue Winski and Dr. Kristen
Zarfos--they're all Americans from different roots whose lives reflect
the best of what we can become when we are one America.

We may not share a common past, but we surely do share a common future.
Building one America is our most important mission, the foundation for
many generations of every other strength we must build for this new
century. Money cannot buy it, power cannot compel it, technology cannot
create it. It can only come from the human spirit.

America is far more than a place; it is an idea--the most powerful idea
in the history of nations, and all of us in this chamber, we are now the
bearers of that idea, leading a great people into a new world.

A child born tonight will have almost no memory of the 20th century.
Everything that child will know about America will be because of what we
do now to build a new century. We don't have a moment to waste.

Tomorrow there will be just over 1,000 days until the year 2000. One
thousand days to prepare our people. One thousand days to work together.
One thousand days to build a bridge to a land of new promise.

My fellow Americans, we have work to do. Let us seize those days and the
century.

Thank you. God bless you. And God bless America.

***

State of the Union Address
William J. Clinton
January 27, 1998

Mr. Speaker, Mr. Vice President, members of the 105th Congress,
distinguished guests, my fellow Americans:

Since the last time we met in this chamber, America has lost two
patriots and fine public servants. Though they sat on opposite sides of
the aisle, Representatives Walter Capps and Sonny Bono shared a deep
love for this House and an unshakable commitment to improving the lives
of all our people.

In the past few weeks, they have both been eulogized. Tonight, I think
we should begin by sending a message to their families and their friends
that we celebrate their lives, and give thanks for their service to our
nation.

For 209 years, it has been the president's duty to report to you on the
state of the union. Because of the hard work and high purpose of the
American people, these are good times for America. We have more than 14
million new jobs, the lowest unemployment in 24 years, the lowest core
inflation in 30 years, incomes are rising and we have the highest home
ownership in history. Crime has dropped for a record five years in a
row, and the welfare rolls are at their lowest levels in 27 years. Our
leadership in the world is unrivaled. Ladies and gentlemen, the state of
our union is strong.

But with barely 700 days left in the 20th century, this is not a time to
rest. It is a time to build--to build the America within reach, an
America where everybody has a chance to get ahead, with hard work; where
every citizen can live in a safe community; where families are strong,
schools are good, and all our young people can go on to college; an
America where scientists find cures for diseases from diabetes to
Alzheimer's to AIDS; an America where every child can stretch a hand
across a keyboard and reach every book ever written, every painting ever
painted, every symphony ever composed; where government provides
opportunity and citizens honor the responsibility to give something back
to their communities; an America which leads the world to new heights of
peace and prosperity.

This is the America we have begun to build. This is the America we can
leave to our children--if we join together to finish the work at hand.
Let us strengthen our nation for the 21st century.

Rarely have Americans lived through so much change in so many ways in so
short a time. Quietly, but with gathering force, the ground has shifted
beneath our feet as we have moved into an information age, a global
economy, a truly new world.

For five years now, we have met the challenge of these changes as
Americans have at every turning point in our history, by renewing the
very idea of America, widening the circle of opportunity, deepening the
meaning of our freedom, forging a more perfect union. We shaped a new
kind of government for the information age. I thank the vice president
for his leadership, and the Congress for its support, in building a
government that is leaner, more flexible, a catalyst for new ideas, and
most of all, a government that gives the American people the tools they
need to make the most of their own lives.

We have moved past the sterile debate between those who say government
is the enemy and those who say government is the answer. My fellow
Americans, we have found a third way. We have the smallest government in
35 years, but a more progressive one. We have a smaller government but a
stronger nation.

We are moving steadily toward a an even stronger America in the 21st
century--an economy that offers opportunity, a society rooted in
responsibility, and a nation that lives as a community.

First, Americans in this chamber and across this nation have pursued a
new strategy for prosperity: fiscal discipline to cut interest rates and
spur growth; investments in education and skills, in science and
technology and transportation, to prepare our people for the new
economy; new markets for American products and American workers.

When I took office, the deficit for 1998 was projected to be $357
billion, and heading higher. This year, our deficit is projected to be
$10 billion, and heading lower.

For three decades, six presidents have come before you to warn of the
damage deficits pose to our nation. Tonight, I come before you to
announce that the federal deficit, once so incomprehensively large that
it had 11 zeros, will be simply zero.

I will submit to Congress, for 1999, the first balanced budget in 30
years.

And if we hold fast to fiscal discipline, we may balance the budget this
year--four years ahead of schedule.

You can all be proud of that, because turning a sea of red ink into
black is no miracle. It is the product of hard work by the American
people, and of two visionary actions in Congress: The courageous vote in
1993 that led to a cut in the deficit of 90 percent and the truly
historic bipartisan balanced budget agreement passed by this Congress.

Here's the really good news: If we maintain our resolve, we will produce
balanced budgets as far as the eye can see.

We must not go back to unwise spending or untargeted tax cuts that risk
reopening the deficit. Last year, together, we enacted targeted tax cuts
so that the typical middle class family will now have the lowest tax
rates in 20 years.

My plan to balance the budget next year includes both new investments
and new tax cuts targeted to the needs of working families: for
education, for child care, for the environment.

But whether the issue is tax cuts or spending, I ask all of you to meet
this test: approve only those priorities that can actually be
accomplished without adding a dime to the deficit.

Now, if we balance the budget for next year, it is projected that we'll
then have a sizeable surplus in the years that immediately follow. What
should we do with this projected surplus?

I have a simple four-word answer: Save Social Security first.

Tonight, I propose that we reserve 100 percent of the surplus--that's
every penny of any surplus--until we have taken all the necessary
measures to strengthen the Social Security system for the 21st century.

Let us say--let us say to all Americans watching tonight, whether you're
70 or 50, or whether you just started paying into the system, Social
Security will be there when you need it. Let us make this commitment:
Social Security first. Let's do that--together.

I also want to say that all the American people who are watching us
tonight should be invited to join in this discussion, in facing these
issues squarely and forming a true consensus on how we should proceed.
We'll start by conducting nonpartisan forums in every region of the
country, and I hope that lawmakers of both parties will participate.
We'll hold a White House conference on Social Security in December. And
one year from now, I will convene the leaders of Congress to craft
historic bipartisan legislation to achieve a landmark for our
generation, a Social Security system that is strong in the 21st century.

In an economy that honors opportunity, all Americans must be able to
reap the rewards of prosperity. Because these times are good, we can
afford to take one simple, sensible step to help millions of workers
struggling to provide for their families. We should raise the minimum
wage.

The information age is first and foremost an education age, in which
education will start at birth and continue throughout a lifetime. Last
year, from this podium, I said that education has to be our highest
priority. I laid out a 10-point plan to move us forward, and urged all
of us to let politics stop at the schoolhouse door.

Since then, this Congress--across party lines--and the American people
have responded, in the most important year for education in a
generation-- expanding public school choice, opening the way to 3,000
charter schools, working to connect every classroom in the country to
the information superhighway, committing to expand Head Start to a
million children, launching America Reads, sending literally thousands
of college students into our elementary schools to make sure all our
8-year-olds can read.

Last year I proposed--and you passed--220,000 new Pell Grant
scholarships for deserving students. Student loans, already less
expensive and easier to repay--now you get to deduct the interest.
Families all over America now can put their savings into new, tax-free
education IRAs.

And this year, for the first two years of college, families will get a
$1500 tax credit--a Hope Scholarship that will cover the cost of most
community college tuition. And for junior and senior year, graduate
school, and job training, there is a lifetime learning credit. You did
that, and you should be very proud of it.

And because of these actions, I have something to say to every family
listening to us tonight: your children can go on to college. If you know
a child from a poor family, tell her not to give up, she can go on to
college. If you know a young couple struggling with bills, worried they
won't be able to send their children to college, tell them not to give
up, their children can go on to college. If you know somebody who's
caught in a dead-end job and afraid he can't afford the classes
necessary to get better jobs for the rest of his life, tell him not to
give up, he can go on to college.

Because of the things that have been done, we can make college as
universal in the 21st century as high school is today. And, my friends,
that will change the face and future of America.

We have opened wide the doors of the world's best system of higher
education. Now we must make our public elementary and secondary schools
the world's best as well--by raising standards, raising expectations and
raising accountability.

Thanks to the actions of this Congress last year, we will soon have, for
the very first time, a voluntary national test based on national
standards in fourth grade reading and eighth grade math.

Parents have a right to know whether their children are mastering the
basics. And every parent already knows the key; good teachers and small
classes.

Tonight, I propose the first ever national effort to reduce class size
in the early grades. My balanced budget will help to hire a hundred
thousand new teachers who have passed the state competency tests. Now
with these teachers--listen--with these teachers, we will actually be
able to reduce class size in the first, second and third grades to an
average of 18 students a class all across America.

Now, if I've got the math right, more teachers teaching smaller classes
requires more classrooms. So I also propose a school construction tax
cut to help communities modernize or build 5,000 schools.

We must also demand greater accountability. When we promote a child from
grade to grade who hasn't mastered the work, we don't do that child any
favors. It is time to end social promotion in America's schools.

Last year, in Chicago, they made that decision--not to hold our children
back, but to lift them up. Chicago stopped social promotion and started
mandatory summer school to help students who are behind to catch up.

I propose to help other communities follow Chicago's lead. Let's say to
them stop promoting children who don't learn, and we will give you the
tools to make sure they do.

I also ask this Congress to support our efforts to enlist colleges and
universities to reach out to disadvantaged children starting in the
sixth grade so that they can get the guidance and hope they need so they
can know that they, too, will be able to go on to college.

As we enter the 21st century, the global economy requires us to seek
opportunity not just at home, but in all the markets of the world. We
must shape this global economy, not shrink from it.

In the last five years, we have led the way in opening new markets, with
240 trade agreements that remove foreign barriers to products bearing
the proud stamp, "Made in the USA." Today, record high exports account
for fully one-third of our economic growth. I want to keep them going,
because that's the way to keep America growing and to advance a safer,
more stable world.

Now, all of you know, whatever your views are, that I think this is a
great opportunity for America. I know there is opposition to more
comprehensive trade agreements. I have listened carefully, and I believe
that the opposition is rooted in two fears: first, that our trading
partners will have lower environmental and labor standards, which will
give them an unfair advantage in our market and do their own people no
favors, even if there's more business; and second, that if we have more
trade, more of our workers will lose their jobs and have to start over.

I think we should seek to advance worker and environmental standards
around the world. It should--I have made it abundantly clear that it
should be a part of our trade agenda, but we cannot influence other
countries' decisions if we send them a message that we're backing away
from trade with them.

This year I will send legislation to Congress, and ask other nations to
join us, to fight the most intolerable labor practice of all-abusive
child labor.

We should also offer help and hope to those Americans temporarily left
behind with the global marketplace or by the march of technology, which
may have nothing to do with trade. That's why we have more than doubled
funding for training dislocated workers since 1993. And if my new budget
is adopted, we will triple funding. That's why we must do more, and more
quickly, to help workers who lose their jobs for whatever reason.

You know, we help communities in a special way when their military base
closes. We ought to help them in the same way if their factory closes.
Again, I ask the Congress to continue its bipartisan work to consolidate
the tangle of training programs we have today into one single GI Bill
for Workers, a simple skills grant so people can, on their own, move
quickly to new jobs, to higher incomes and brighter futures.

Now, we all know in every way in life change is not always easy, but we
have to decide whether we're going to try to hold it back and hide from
it, or reap its benefits. And remember the big picture here: while we've
been entering into hundreds of new trade agreements, we've been creating
millions of new jobs. So this year we will forge new partnerships with
Latin America, Asia and Europe, and we should pass the new African Trade
Act. It has bipartisan support.

I will also renew my request for the fast-track negotiating authority
necessary to open more new markets, created more new jobs, which every
president has had for two decades.

You know, whether we like it or not, in ways that are mostly positive,
the world's economies are more and more interconnected and
interdependent. Today, an economic crisis anywhere can affect economies
everywhere. Recent months have brought serious financial problems to
Thailand, Indonesia, South Korea and beyond.

Now why should Americans be concerned about this?

First, these countries are our customers. If they sink into recession,
they won't be able to buy the goods we'd like to sell them.

Second, they're also our competitors, so if their currencies lose their
value and go down, then the price of their goods will drop, flooding our
market and others with much cheaper goods, which makes it a lot tougher
for our people to compete.

And finally, they are our strategic partners. Their stability bolsters
our security.

The American economy remains sound and strong, and I want to keep it
that way. But because the turmoil in Asia will have an impact on all the
world's economies, including ours, making that negative impact as small
as possible is the right thing to do for America, and the right thing to
do for a safer world.

Our policy is clear: no nation can recover if it does not reform itself,
but when nations are willing to undertake serious economic reform, we
should help them do it. So I call on Congress to renew America's
commitment to the International Monetary Fund.

And I think we should say to all the people we're trying to represent
here, that preparing for a far off storm that may reach our shores is
far wiser than ignoring the thunder 'til the clouds are just overhead.

A strong nation rests on the rock of responsibility. A society rooted in
responsibility must first promote the value of work, not welfare. We
could be proud that after decades of finger-pointing and failure,
together we ended the old welfare system. And we're now replacing
welfare checks with paychecks.

Last year, after a record four-year decline in welfare rolls I
challenged our nation to move two million more Americans off welfare by
the year 2000. I'm pleased to report we have also met that goal two full
years ahead of schedule.

This is a grand achievement, the sum of many acts of individual courage,
persistence and hope.

For 13 years, Elaine Kinslow of Indianapolis, Indiana was on and off
welfare. Today she's a dispatcher with a van company. She's saved enough
money to move her family into a good neighborhood. And she's helping
other welfare recipients go to work.

Elaine Kinslow and all those like her are the real heroes of the welfare
revolution. There are millions like her all across America, and I am
happy she could join the first lady tonight. Elaine, we're very proud of
you. Please stand up.

We still have a lot more to do, all of us, to make welfare reform a
success; providing child care, helping families move closer to available
jobs, challenging more companies to join our Welfare to Work
Partnership, increasing child-support collections from deadbeat parents
who have a duty to support their own children. I also want to thank
Congress for restoring some of the benefits to immigrants who are here
legally and working hard. And I hope you will finish that job this year.

We have to make it possible for all hard-working families to meet their
most important responsibilities. Two years ago, we helped guarantee that
Americans can keep their health insurance when they changed jobs. Last
year, we extended health care to up to 5 million children. This year, I
challenge Congress to take the next historic steps. A hundred and sixty
million of our fellow citizens are in managed care plans. These plans
save money, and they can improve care. But medical decisions ought to be
made by medical doctors, not insurance company accountants.

I urge this Congress to reach across the aisle and write into law a
consumer bill of rights that says this: You have the right to know all
your medical options, not just the cheapest. You have the right to
choose the doctor you want for the care you need. You have the right to
emergency room care wherever and whenever you need it. You have the
right to keep your medical records confidential.

Now, traditional care or managed care, every American deserves quality
care. Millions of Americans between the ages of 55 and 65 have lost
their health insurance. Some are retired. Some are laid off. Some lose
their coverage when their spouses retire. After a lifetime of work,
they're left with nowhere to turn.

So I ask the Congress, let these hard-working Americans buy into the
Medicare system. It won't add a dime to the deficit, but the peace of
mind it will provide will be priceless.

Next, we must help parents protect their children from the gravest
health threat that they face: an epidemic of teen smoking spread by
multimillion dollar marketing campaigns. I challenge Congress. Let's
pass bipartisan, comprehensive legislation that will improve public
health, protect our tobacco farmers, and change the way tobacco
companies do business forever.

Let's do what it takes to bring teen smoking down. Let's raise the price
of cigarettes by up to $1.50 a pack over the next 10 years, with
penalties on the tobacco industry if it keeps marketing to our children.

Now tomorrow, like every day, 3,000 children will start smoking, and a
thousand will die early as a result. Let this Congress be remembered as
the Congress that saved their lives.

In the new economy, most parents work harder than ever. They face a
constant struggle to balance their obligations to be good workers, and
their even more important obligations to be good parents.

The Family and Medical Leave Act was the very first bill I was
privileged to sign into law as president in 1993. Since then, about 15
million people have taken advantage of it, and I've met a lot of them
all across this country. I ask you to extend the law to cover 10 million
more workers, and to give parents time off when they have to go see
their children's teachers or take them to the doctor.

Child care is the next frontier we must face to enable people to succeed
at home and at work. Last year, I co-hosted the very first White House
conference on child care with one of our foremost experts, America's
first lady. From all corners of America, we heard the same
message--without regard to region or income or political
affiliation--we've got to raise the quality of child care, we've got to
make it safer, we've got to make it more affordable.

So here's my plan: Help families to pay for child care for a million
more children; scholarships and background checks for child-care
workers, and a new emphasis on early learning; tax credits for
businesses that provide child care for their employees; and a larger
child-care tax credit for working families.

Now, if you pass my plan, what this means is that a family of four with
an income of $35,000 and high child-care costs will no longer pay a
single penny of federal income tax.

You know, I think this is such a big issue with me because of my own
personal experience. I have often wondered how my mother, when she was a
young widow, would have been able to go away to school and get an
education and come back and support me, if my grandparents hadn't been
able to take care of me. She and I were really very lucky.

How many other families have never had that same opportunity? The truth
is, we don't know the answer to that question, but we do know what the
answer should be. Not a single American family should ever have to
choose between the job they need and the child they love.

A society rooted in responsibility must provide safe streets, safe
schools, and safe neighborhoods. We pursued a strategy of more police,
tougher punishment, smarter prevention with crime-fighting partnerships,
with local law enforcement and citizen groups, where the rubber hits the
road.

I can report to you tonight that it's working. Violent crime is down,
robbery is down, assault is down, burglary is down for five years in a
row all across America. Now, we need to finish the job of putting
100,000 more police on our streets.

Again, I ask Congress to pass a juvenile crime bill that provides more
prosecutors and probation officers to crack down on gangs and guns and
drugs and bar violent juveniles from buying guns for life. And I ask you
to dramatically expand our support for after-school programs. I think
every American should know that most juvenile crime is committed between
the hours of 3:00 in the afternoon and 8:00 at night. We can keep so
many of our children out of trouble in the first place if we give them
some place to go other than the streets, and we ought to do it.

Drug use is on the decline. I thank General McCaffrey for his
leadership, and I thank this Congress for passing the largest anti-drug
budget in history. Now I ask you to join me in a ground-breaking effort
to hire a thousand new Border Patrol agents and to deploy the most
sophisticated available new technologies to help close the door on drugs
at our borders.

Police, prosecutors, and prevention programs, good as they are, they
can't work if our court system doesn't work. Today, there are large
numbers of vacancies in our federal courts. Here is what the chief
justice of the United States wrote: "Judicial vacancies cannot remain at
such high levels indefinitely without eroding the quality of justice."

I simply ask the United States Senate to heed this plea and vote on the
highly qualified nominees before you, up or down.

We must exercise responsibility not just at home but around the world.
On the eve of a new century, we have the power and the duty to build a
new era of peace and security. But make no mistake about it; today's
possibilities are not tomorrow's guarantees. America must stand against
the poisoned appeals of extreme nationalism. We must combat an unholy
access of new threats from terrorists, international criminals and drug
traffickers.

These 21st century predators feed on technology and the free flow of
information and ideas and people, and they will be all the more lethal
if weapons of mass destruction fall into their hands. To meet these
challenges, we are helping to write international rules of the road for
the 21st century, protecting those who join the family of nations and
isolating those who do not.

Within days, I will ask the Senate for its advice and consent to make
Hungary, Poland and the Czech Republic the newest members of NATO. For
50 years, NATO contained communism and kept America and Europe secure.
Now these three formerly communist countries have said yes to democracy.
I ask the Senate to say yes to them, our new allies.

By taking in new members and working closely with new partners,
including Russia and Ukraine, NATO can help to assure that Europe is a
stronghold for peace in the 21st century.

Next, I will ask Congress to continue its support for our troops and
their mission in Bosnia. This Christmas, Hillary and I traveled to
Sarajevo with Senator and Mrs. Dole and a bipartisan congressional
delegation. We saw children playing in the streets where, two years ago,
they were hiding from snipers and shells. The shops were filled with
food. The cafes were alive with conversation. The progress there is
unmistakable; but it is not yet irreversible.

To take firm root, Bosnia's fragile peace still needs the support of
American and allied troops when the current NATO mission ends in June. I
think Senator Dole actually said it best. He said: "This is like being
ahead in the fourth quarter of a football game; now is not the time to
walk off the field and forfeit the victory."

I wish all of you could have seen our troops in Tuzla. They're very
proud of what they are doing in Bosnia, and we're all very proud of
them. One of those--one of those brave soldiers is sitting with the
first lady tonight: Army Sergeant Michael Tolbert. His father was a
decorated Vietnam vet. After college in Colorado, he joined the Army.
Last year he led an infantry unit that stopped a mob of extremists from
taking over a radio station that is a voice of democracy and tolerance
in Bosnia. Thank you very much, Sergeant, for what you represent.

In Bosnia and around the world, our men and women in uniform always do
their mission well. Our mission must be to keep them well-trained and
ready, to improve their quality of life, and to provide the 21st century
weapons they need to defeat any enemy.

I ask Congress to join me in pursuing an ambitious agenda to reduce the
serious threat of weapons of mass destruction. This year, four decades
after it was first proposed by President Eisenhower, a Comprehensive
Nuclear Test Ban is within reach. By ending nuclear testing, we can help
to prevent the development of new and more dangerous weapons, and make
it more difficult for non-nuclear states to build them.

I am pleased to announce that four former chairmen of the Joint Chiefs
of Staff--Generals John Shalikashvili, Colin Powell and David Jones, and
Admiral William Crowe--have endorsed this treaty, and I ask the Senate
to approve it this year.

Together we must also confront the new hazards of chemical and
biological weapons, and the outlaw states, terrorists and organized
criminals seeking to acquire them.

Saddam Hussein has spent the better part of this decade, and much of his
nation's wealth, not on providing for the Iraqi people, but on
developing nuclear, chemical and biological weapons and the missiles to
deliver them.

The United Nations weapons inspectors have done a truly remarkable job,
finding and destroying more of Iraq's arsenal than was destroyed during
the entire gulf war. Now, Saddam Hussein wants to stop them from
completing their mission.

I know I speak for everyone in this chamber, Republicans and Democrats,
when I say to Saddam Hussein, "You cannot defy the will of the world,"
and when I say to him, "You have used weapons of mass destruction
before; we are determined to deny you the capacity to use them again."

Last year, the Senate ratified the Chemical Weapons Convention to
protect our soldiers and citizens from poison gas. Now we must act to
prevent the use of disease as a weapon of war and terror. The Biological
Weapons Convention has been in effect for 23 years now. The rules are
good, but the enforcement is weak. We must strengthen it with a new
international inspection system to detect and deter cheating. In the
months ahead, I will pursue our security strategy with old allies in
Asia and Europe, and new partners from Africa to India and Pakistan,
from South America to China. And from Belfast to Korea to the Middle
East, America will continue to stand with those who stand for peace.

Finally, it's long past time to make good on our debt to the United
Nations.

More and more we are working with other nations to achieve common goals.
If we want America to lead, we've got to set a good example. As we
see--as we see so clearly in Bosnia, allies who share our goals can also
share our burdens. In this new era, our freedom and independence are
actually enriched, not weakened, by our increasing interdependence with
other nations. But we have to do our part.

Our founders set America on a permanent course toward a more perfect
union. To all of you, I say, it is a journey we can only make together,
living as one community.

First, we have to continue to reform our government, the instrument of
our national community. Everyone knows elections have become too
expensive, fueling a fund-raising arms race.

This year, by March the 6th, at long last the Senate will actually vote
on bipartisan campaign finance reform proposed by senators McCain and
Feingold. Let's be clear; a vote against McCain-Feingold is a vote for
soft money and for the status quo. I ask you to strengthen our democracy
and pass campaign finance reform this year.

But at least equally important, we have to address the real reason for
the explosion in campaign costs: the high cost of media advertising. I
will-- for the folks watching at home, those were the groans of pain in
the audience--I will formally request that the Federal Communications
Commission act to provide free or reduced-cost television time--for
candidates who observe spending limits voluntarily. The airwaves are a
public trust, and broadcasters also have to help us in this effort to
strengthen our democracy.

Under the leadership of Vice President Gore, we have reduced the federal
payroll by 300,000 workers, cut 16,000 pages of regulation, eliminated
hundreds of programs and improved the operations of virtually every
government agency. But we can do more.

Like every taxpayer, I'm outraged by the reports of abuses by the IRS.
We need some changes there: new citizen advocacy panels, a stronger
taxpayer advocate, phone lines open 24 hours a day, relief for innocent
taxpayers.

Last year, by an overwhelming bipartisan margin, the House of
Representatives passed sweeping IRS reforms. This bill must not now
languish in the Senate. Tonight, I ask the Senate: Follow the House;
pass the bipartisan package as your first order of business. I hope to
goodness before I finish I can think of something to say 'Follow the
Senate' on so I'll be out of trouble!

A nation that lives as a community must value all its communities. For
the past five years, we have worked to bring the spark of private
enterprise to inner city and poor rural areas with community development
banks, more commercial loans into poor neighborhoods, cleanup of
polluted sites for development.

Under the continued leadership of the vice president, we propose to
triple the number of empowerment zones to give business incentives to
invest in those areas. We should. We should also give poor families more
help to move into homes of their own, and we should use tax cuts to spur
the construction of more low-income housing.

Last year, this Congress took strong action to help the District of
Columbia. Let us renew our resolve to make our capital city a great city
for all who live and visit here.

Our cities are the vibrant hubs of great metropolitan areas. They are
still the gateway for new immigrants from every continent who come here
to work for their own American dreams. Let's keep our cities going
strong into the 21st Century. They're a very important part of our
future.

Our communities are only as healthy as the air our children breathe, the
water they drink, the Earth they will inherit. Last year we put in place
the toughest-ever controls on smog and soot. We moved to protect
Yellowstone, the Everglades, Lake Tahoe. We expanded every community's
right to know about toxics that threaten their children.

Just yesterday, our food safety plan took effect, using new science to
protect consumers from dangers like e. coli and salmonella.

Tonight, I ask you to join me in launching a new Clean Water initiative,
a far-reaching effort to clean our rivers, our lakes and our coastal
waters for our children.

Our overriding environmental challenge tonight is the worldwide problem
of climate change, global warming, the gathering crisis that requires
worldwide action. The vast majority of scientists have concluded
unequivocally that if we don't reduce the emission of greenhouse gases
at some point in the next century, we'll disrupt our climate and put our
children and grandchildren at risk.

This past December, America led the world to reach a historic agreement
committing our nation to reduce greenhouse gas emissions through market
forces, new technologies, energy efficiency.

We have it in our power to act right here, right now. I propose $6
billion in tax cuts, in research and development, to encourage
innovation, renewable energy, fuel-efficient cars, energy-efficient
homes. Every time we have acted to heal our environment, pessimists have
told us it would hurt the economy. Well, today our economy is the
strongest in a generation, and our environment is the cleanest in a
generation. We have always found a way to clean the environment and grow
the economy at the same time. And when it comes to global warming, we'll
do it again.

Finally, community means living by the defining American value, the
ideal heard 'round the world: that we're all created equal. Throughout
our history, we haven't always honored that ideal, and we've never fully
lived up to it. Often it's easier to believe that our differences matter
more than what we have in common. It may be easier, but it's wrong.

What we have to do in our day and generation to make sure that America
truly becomes one nation, what do we have to do? We're becoming more and
more and more diverse. Do you believe we can become one nation? The
answer cannot be to dwell on our differences, but to build on our shared
values.

And we all cherish family and faith, freedom and responsibility. We all
want our children to grow up in the world where their talents are
matched by their opportunities.

I've launched this national initiative on race to help us recognize our
common interests and to bridge the opportunity gaps that are keeping us
from becoming one America. Let us begin by recognizing what we still
must overcome.

Discrimination against any American is un-American. We must vigorously
enforce the laws that make it illegal. I ask your help to end the
backlog at the Equal Employment Opportunity Commission. Sixty thousand
of our fellow citizens are waiting in line for justice, and we should
act now to end their wait.

We should also recognize that the greatest progress we can make toward
building one America lies in the progress we make for all Americans,
without regard to race. When we open the doors of college to all
Americans, when we rid all our streets of crime, when there are jobs
available to people from all our neighborhoods, when we make sure all
parents have the child care they need, we're helping to build one
nation.

We in this chamber and in this government must do all we can to address
the continuing American challenge to build one America. But we'll only
move forward if all our fellow citizens, including every one of you at
home watching tonight, is also committed to this cause.

We must work together, learn together, live together, serve together. On
the forge of common enterprise, Americans of all backgrounds can hammer
out a common identity.

We see it today in the United States military, in the Peace Corps, in
AmeriCorps. Wherever people of all races and backgrounds come together
in a shared endeavor and get a fair chance, we do just fine. With shared
values and meaningful opportunities and honest communications and
citizen service, we can unite a diverse people in freedom and mutual
respect. We are many. We must be one.

In that spirit, let us lift our eyes to the new millennium. How will we
mark that passage? It just happens once every thousand years. This year,
Hillary and I launched the White House Millennium Program to promote
America's creativity and innovation and to preserve our heritage and
culture into the 21st century. Our culture lives in every community, and
every community has places of historic value that tell our stories as
Americans. We should protect them.

I am proposing a public-private partnership to advance our arts and
humanities and to celebrate the millennium by saving America's treasures
great and small. And while we honor the past, let us imagine the future.

Now, think about this. The entire store of human knowledge now doubles
every five years. In the 1980s, scientists identified the gene causing
cystic fibrosis; it took nine years. Last year, scientists located the
gene that causes Parkinson's disease--in only nine days! Within a
decade, gene chips will offer a road map for prevention of illnesses
throughout a lifetime. Soon, we'll be able to carry all the phone calls
on Mother's Day on a single strand of fiber the width of a human hair. A
child born in 1998 may well live to see the 22nd century.

Tonight, as part of our gift to the millennium, I propose a 21st Century
research fund for pathbreaking scientific inquiry, the largest funding
increase in history for the National Institutes of Health, the National
Science Foundation, and the National Cancer Institute. We have already
discovered we have already discovered genes for breast cancer and
diabetes. I ask you to support this initiative so ours will be the
generation that finally wins the war against cancer and begins a
revolution in our fight against all deadly diseases.

As important as all this scientific progress is, we must continue to see
that science serves humanity, not the other way around. We must prevent
the misuse of genetic tests to discriminate against any American, and we
must ratify the ethical consensus of the scientific and religious
communities, and ban the cloning of human beings.

We should enable all the world's people to explore the far reaches of
cyberspace. Think of this: the first time I made a State of the Union
speech to you, only a handful of physicists used the World Wide Web--
literally just a handful of people.

Now in schools and libraries, homes and businesses, millions and
millions of Americans surf the Net every day.

We must give parents the tools they need to help protect their children
from inappropriate material on the Net, but we also must make sure that
we protect the exploding, global commercial potential of the Internet.
We can do the kinds of things that we need to do and still protect our
kids. For one thing, I ask Congress to step up support for building the
next generation Internet. It's getting kind of clogged, you know. And
the next generation Internet will operate at speeds up to a thousand
times faster than today.

Even as we explore this inner space, in the new millennium we're going
to open new frontiers in outer space.

Throughout all history, human kind has had only one place to call home:
our planet Earth. Beginning this year, 1998, men and women from 16
countries will build a foothold in the heavens--the International Space
Station. With its vast expanses, scientists and engineers will actually
set sail on an uncharted sea of limitless mystery and unlimited
potential.

And this October, a true American hero, a veteran pilot of 149 combat
missions and one five-hour space flight that changed the world, will
return to the heavens. Godspeed, John Glenn!

John, you will carry with you America's hopes, and on your uniform once
again you will carry America's flag, marking the unbroken connection
between the deeds of America's past and the daring of America's future.

Nearly 200 years ago, a tattered flag, its broad stripes and bright
stars still gleaming through the smoke of a fierce battle, moved Francis
Scott Key to scribble a few words on the back of an envelope, the words
that became our National Anthem. Today, that Star-Spangled Banner, along
with the Declaration of Independence, the Constitution and the Bill of
Rights, are on display just a short walk from here. They are America's
treasures. And we must also save them for the ages.

I ask all Americans to support our project to restore all our treasures
so that the generations of the 21st century can see for themselves the
images and the words that are the old and continuing glory of America,
an America that has continued to rise through every age against every
challenge, a people of great works and greater possibilities, who have
always, always found the wisdom and strength to come together as one
nation, to widen the circle of opportunity, to deepen the meaning of our
freedom, to form that more perfect union.

Let that be our gift to the 21st century.

God bless you, and God bless the United States.

***

State of the Union Address
William J. Clinton
January 19, 1999

Mr. Speaker, Mr. Vice President, members of Congress, honored guests, my
fellow Americans:

Tonight I have the honor of reporting to you on the State of the Union.

Let me begin by saluting the new speaker of the House and thanking him
especially tonight for extending an invitation to two guests sitting in
the gallery with Mrs. Hastert. Lyn Gibson and Wei Ling Chestnut are the
widows of the two brave Capitol Hill police officers who gave their
lives to defend freedom's house.

Mr. Speaker, at your swearing in you asked us all to work together in a
spirit of civility and bipartisanship. Mr. Speaker, let's do exactly
that.

Tonight, I stand before you to report that America has created the
longest peacetime economic expansion in our history. With nearly 18
million new jobs, wages rising at more than twice the rate of inflation,
the highest homeownership in history, the smallest welfare roles in 30
years, and the lowest peacetime unemployment since 1957.

For the first time in three decades, the budget is balanced. From a
deficit of $290 billion in 1992, we had a surplus of $70 billion last
year. And now, we are on course for budget surpluses for the next 25
years.

Thanks to the pioneering leadership of all of you, we have the lowest
violent crime rate in a quarter century and the cleanest environment in
a quarter century.

America is a strong force for peace--from Northern Ireland to Bosnia to
the Middle East.

Thanks to the leadership of Vice President Gore, we have a government
for the Information Age, once again a government that is a progressive
instrument of the common good, rooted in our oldest values of
opportunity, responsibility and community, devoted to fiscal
responsibility, determined to give our people the tools they need to
make the most of their own lives in the 21st century, a 21st century
government for 21st century America.

My fellow Americans, I stand before you tonight to report that the state
of our union is strong. Now, America is working again. The promise of
our future is limitless. But we cannot realize that promise if we allow
the hum of our prosperity to lull us into complacency. How we fare as a
nation far into the 21st century depends upon what we do as a nation
today.

So, with our budget surplus growing, our economy expanding, our
confidence rising, now is the moment for this generation to meet our
historic responsibility to the 21st century.

Our fiscal discipline gives us an unsurpassed opportunity to address a
remarkable new challenge, the aging of America. With the number of
elderly Americans set to double by 2030, the baby boom will become a
senior boom.

So first and above all, we must save Social Security for the 21st
century.

Early in this century, being old meant being poor. When President
Roosevelt created Social Security, thousands wrote to thank him for
eliminating what one woman called "the stark terror of penniless,
helpless old age." Even today, without Social Security, half our
nation's elderly would be forced into poverty.

Today, Social Security is strong, but by 2013, payroll taxes will no
longer be sufficient to cover monthly payments. By 2032, the trust fund
will be exhausted and Social Security will be unable to pay the full
benefits older Americans have been promised.

The best way to keep Social Security a rock solid guarantee is not to
make drastic cuts in benefits; not to raise payroll tax rates; not to
drain resources from Social Security in the name of saving it. Instead,
I propose that we make the historic decision to invest the surplus to
save Social Security.

Specifically, I propose that we commit 60 percent of the budget surplus
for the next 15 years to Social Security, investing a small portion in
the private sector just as any private or state government pension would
do. This will earn a higher return and keep Social Security sound for 55
years.

But we must aim higher. We should put Social Security on a sound footing
for the next 75 years. We should reduce poverty among elderly women, who
are nearly twice as likely to be poor as are other seniors. And we
should eliminate the limits on what seniors on Social Security can earn.

Now, these changes will require difficult, but fully achievable choices
over and above the dedication of the surplus. They must be made on a
bipartisan basis. They should be made this year. So let me say to you
tonight, I reach out my hand to all of you in both houses in both
parties and ask that we join together in saying to the American people,
we will save Social Security now.

Now, last year, we wisely reserved all of the surplus until we knew what
it would take to save Social Security. Again, I say, we shouldn't spend
any of it, not any of it, until after Social Security is truly saved.
First thing's first.

Second, once we have saved Social Security, we must fulfill our
obligation to save and improve Medicare. Already we have extended the
life of the Medicare trust fund by 10 years, but we should extend it for
at least another decade. Tonight, I propose that we use one out of every
six dollars in the surplus for the next 15 years to guarantee the
soundness of Medicare until the year 2020.

But, again--but, again, we should aim higher. We must be willing to work
in a bipartisan way and look at new ideas, including the upcoming report
of the Bipartisan Medicare Commission. If we work together, we can
secure Medicare for the next two decades and cover the greatest growing
need of seniors--affordable prescription drugs.

Third, we must help all Americans from their first day on the job to
save, to invest, to create wealth.

From its beginnings, Americans have supplemented Social Security with
private pensions and savings. Yet today millions of people retire with
little to live on other than Social Security. Americans living longer
than ever simply must save more than ever.

Therefore, in addition to saving Social Security and Medicare, I propose
a new pension initiative for retirement security in the 21st century. I
propose that we use a little over 11 percent of the surplus to establish
universal savings accounts--USA accounts--to give all Americans the
means to save.

With these new accounts, Americans can invest as they choose and receive
funds to match a portion of their savings with extra help for those
least able to save. USA accounts will help all Americans to share in our
nation's wealth and to enjoy a more secure retirement. I ask you to
support them.

Fourth, we must invest in long-term care.

I propose a tax credit of $1,000 for the aged, ailing or disabled and
the families who care for them. Long-term care will become a bigger and
bigger challenge with the aging of America--and we must do more to help
our families deal with it.

I was born in 1946, the first year of the baby boom. I can tell you that
one of the greatest concerns of our generation is our absolute
determination not to let our growing old place an intolerable burden on
our children and their ability to raise our grandchildren.

Our economic success and our fiscal discipline now give us the
opportunity to lift that burden from their shoulders, and we should take
it.

Saving Social Security, Medicare, creating U.S. accounts, this is the
right way to use the surplus. If we do so, if we do so, we will still
have resources to meet critical needs and education and defense.

And I want to point out that this proposal is fiscally sound. Listen to
this, if we set aside 60 percent of the surplus for Social Security and
16 percent for Medicare over the next 15 years, that savings will
achieve the lowest level of publicly-held debt since right before World
War I in 1917.

So with these four measures; saving Social Security, strengthening
Medicare, establishing the USA accounts, supporting long-term care, we
can begin to meet our generation's historic responsibility to establish
true security for 21st century seniors.

Now, there are more children, from more diverse backgrounds, in our
public schools that any time in our history. Their education must
provide the knowledge and nurture the creativity that will allow our
entire nation to thrive in the new economy.

Today we can say something we couldn't say six years ago. With tax
credits and more affordable student loans, with more work-study grants
and more Pell Grants, with education IRAs, the new HOPE Scholarship tax
cut that more than five million Americans will receive this year, we
have finally opened the doors of college to all Americans.

With our support, nearly every state has set higher academic standards
for public schools and a voluntary national test is being developed to
measure the progress of our students. With over $1 billion in discounts
available this year, we are well on our way to our goal of connecting
every classroom and library to the Internet.

Last fall, you passed our proposal to start hiring 100,000 new teachers
to reduce class size in the early grades. Now I ask you to finish the
job.

You know our children are doing better. SAT scores are up. Math scores
have risen in nearly all grades. But there's a problem. While our
fourth-graders out performed their peers in other countries in math and
science, our eighth-graders are around average, and our 12th-graders
rank near the bottom. We must do better.

Now each year the national government invests more than $15 billion in
our public schools. I believe we must change the way we invest that
money to support what works and to stop supporting what does not work.

First, later this year I will send to Congress a plan that for the first
time holds states and school districts accountable for progress and
rewards them for results. My Education Accountability Act will require
every school district receiving federal help to take the following five
steps:

First, all schools must end social promotion.

Now, no child, no child should graduate from high school with a diploma
he or she can't read. We do our children no favors when we allow them to
pass from grade to grade without mastering the material. But we can't
just hold students back because the system fails them.

So my balanced budget triples the funding for summer school and
after-school programs to keep a million children learning. Now, if--if
you doubt this will work, just look at Chicago, which ended social
promotion and made summer school mandatory for those who don't master
the basics. Math and reading scores are up three years running with some
of the biggest gains in some of the poorest neighborhoods. It will work,
and we should do it.

Second, all states and school districts must turn around their worst
performing schools or shut them down. That's the policy established in
North Carolina by Governor Jim Hunt. North Carolina made the biggest
gains in test scores in the nation last year. Our budget includes $200
million to help states turn around their own failing schools.

Third, all states and school districts must be held responsible for the
quality of their teachers. The great majority of our teachers do a fine
job, but in too many schools teachers don't have college majors or even
minors in the subjects they teach. New teachers should be required to
pass performance exams, and all teachers should know the subject their
teaching.

This year's balanced budget contains resources to help them reach higher
standards. And to attract talented young teachers to the toughest
assignments, I recommend a six-fold increase in our program for college
scholarships for students who commit to teach in the inner-cities and
isolated rural areas and in Indian communities. Let us bring excellence
to every part of America.

Fourth, we must empower parents with more information and more choices.
In too many communities it's easier to get information on the quality of
the local restaurants than on the quality of the local schools.

Every school district should issue report cards on every school. And
parents should be given more choices in selecting their public schools.

When I became president, there was just one independent public charter
school in all America. With our support on a bipartisan basis, today
there are 1,100. My budget assures that early in the next century, there
will be 3,000.

Fifth, to assure that our classrooms are truly places of learning, and
to respond to what teachers have been asking us to do for years, we
should say that all states and school districts must both adopt and
implement sensible discipline policies.

Now let's do one more thing for our children. Today, too many schools
are so old they're falling apart, or so overcrowded students are
learning in trailers. Last fall, Congress missed the opportunity to
change that. This year, with 53 million children in our schools,
Congress must not miss that opportunity again. I ask you to help our
communities build or modernize 5,000 schools.

If we do these things--end social promotion, turn around failing
schools, build modern ones, support qualified teachers, promote
innovation, competition and discipline--then we will begin to meet our
generation's historic responsibility to create to 21st century schools.

Now, we also have to do more to support the millions of parents who give
their all every day at home and at work.

The most basic tool of all is a decent income. So let's raise the
minimum wage by a dollar an hour over the next two years.

And let's make sure that women and men get equal pay for equal work by
strengthening enforcement of the equal pay laws.

That was encouraging, you know? There was more balance on the seesaw. I
like that. Let's give them a hand. That's great.

Working parents also need quality child care. So, again this year, I ask
Congress to support our plan for tax credits and subsidies for working
families, for improved safety and quality, for expanded after-school
program. And our plan also includes a new tax credit for stay-at-home
parents, too. They need support as well.

Parents should never have to worry about choosing between their children
and their work. Now, the Family and Medical Leave Act, the very first
bill I signed into law, has now, since 1993, helped millions and
millions of Americans to care for a newborn baby or an ailing relative
without risking their jobs. I think it's time, with all of the evidence
that it has been so little burdensome to employers, to extend family
leave to 10 million more Americans working for smaller companies, and I
hope you will support it.

Finally, on the matter of work, parents should never have to face
discrimination in the workplace. So I want to ask Congress to prohibit
companies from refusing to hire or promote workers simply because they
have children. That is not right.

America's families deserve the world's best medical care. Thanks to
bipartisan federal support for medical research, we are not on the verge
of new treatments to prevent or delay diseases from Parkinson's to
Alzheimer's to arthritis to cancer. But as we continue our advances in
medical science, we can't let our medical system lag behind.

Managed care has literally transformed medicine in America, driving down
costs, but threatening to drive down quality as well.

I think we ought to say to every American, you should have the right to
know all you medical options, not just the cheapest. If you need a
specialist, you should have a right to see one. You have a right to the
nearest emergency care if you're in an accident. These are things that
we ought to say. And I think we ought to say you should have a right to
keep your doctor during a period of treatment whether it's a pregnancy
or a chemotherapy treatment or anything else. I believe this.

Now I've ordered these rights to be extended to the 85 million Americans
served by Medicare, Medicaid and other federal health programs. But only
Congress can pass a Patients' Bill of Rights for all Americans.

Last year, Congress missed that opportunity, and we must not miss that
opportunity again. For the sake of our families, I ask us to join
together across party lines and pass a strong enforceable Patients' Bill
of Rights.

As more of our medical records are stored electronically, the threats to
all of our privacy increase. Because Congress has given me the authority
to act if it does not do so by August, one way or another, we can all
say to the American people, we will protect the privacy of medical
records this year.

Now, two years ago, we acted to extend health coverage to up to five
million children. Now we should go beyond that. We should make it easier
for small businesses to offer health insurance. We should give people
between the ages of 55 and 65 who lose their health insurance the chance
to buy into Medicare.

And we should continue to ensure access to family planning. No one
should have to choose between keeping health care and taking a job. And
therefore, I especially ask you tonight to join hands to pass the
landmark bipartisan legislation proposed by Sens. Kennedy and Jeffords,
Roth and Moynihan, to allow people with disabilities to keep their
health insurance when they go to work.

We need to enable our public hospitals, our community, our university
health centers to provide basic, affordable care for all the millions of
working families who don't have any insurance. They do a lot of that
today, but much more can be done. And my balanced budget makes a good
down payment toward that goal. I hope you will think about them and
support that provision.

Let me say we must step up our efforts to treat and prevent mental
illness. No American should ever be able--afraid ever to address this
disease. This year we will host a White House Conference on Mental
Health. With sensitivity, commitment and passion, Tipper Gore is leading
our efforts here, and I'd like to thank her for what she's done. Thank
you. Thank you.

As everyone knows, our children are targets of a massive media campaign
to hook them on cigarettes. Now, I ask this Congress to resist the
tobacco lobby, to reaffirm the FDA's authority to protect our children
from tobacco and to hold tobacco companies accountable, while protecting
tobacco farmers.

Smoking has cost taxpayers hundreds of billions of dollars under
Medicare and other programs. You know, the states have been right about
this. Taxpayers shouldn't pay for the cost of lung cancer, emphysema,
and other smoking-related illnesses, the tobacco companies should.

So tonight I announce that the Justice Department is preparing a
litigation plan to take the tobacco companies to court and with the
funds we recover to strengthen Medicare.

Now, if we act in these areas--minimum wage, family leave, child care,
health care, the safety of our children--then we will begin to meet our
generation's historic responsibilities to strengthen our families for
the 21st century.

Today, America is the most dynamic, competitive, job-creating economy in
history, but we can do even better in building a 21st century economy
that embraces all Americans.

Today's income gap is largely a skills gap. Last year, the Congress
passed a law enabling workers to get a skills grant to choose the
training they need. And I applaud all of you here who were part of that.

This year, I recommend a five-year commitment to the new system, so that
we can provide over the next five years appropriate training
opportunities for all Americans who lose their jobs and expand rapid
response teams to help all towns which have been really hurt when
businesses close. I hope you will support this.

Also, I ask your support for a dramatic increase in federal support for
adult literacy to mount a national campaign aimed at helping the
millions and millions of working people who still read at less than a
fifth-grade level. We need to do this.

Here's some good news. In the past six years, we have cut the welfare
rolls nearly in half.

Two years ago, from this podium, I asked five companies to lead a
national effort to hire people off welfare. Tonight our welfare-to-work
partnership includes 10,000 companies who have hired hundreds of
thousands of people, and our balanced budget will help another 200,000
people move to the dignity and pride of work. I hope you will support
it.

We must bring the spark of private enterprise to every corner of
America, to build a bridge from Wall Street to Appalachia to the
Mississippi Delta, to our Native American communities, with more support
for community development banks for empowerment zones, for 100,000 more
vouchers for affordable housing.

And I ask Congress to support our bold new plan to help businesses raise
up to $15 billion in private sector capital, to bring jobs and
opportunities and inner cities, rural areas, with tax credits, loan
guarantees, including the new American Private Investment Companies,
modeled on the Overseas Private Investment Companies.

Now, for years and years we've had this OPIC, this Overseas Private
Investment Corporation, because we knew we had untapped markets
overseas. But our greatest untapped markets are not overseas--they are
right here at home. And we should go after them.

We must work hard to help bring prosperity back to the family farm.

As this Congress knows very well, dropping prices and the loss of
foreign markets have devastated too many family farmers. Last year, the
Congress provided substantial assistance to help stave off a disaster in
American agriculture, and I am ready to work with lawmakers of both
parties to create a farm safety net that will include crop insurance
reform and farm income assistance.

I ask you to join with me and do this. This should not be a political
issue. Everyone knows what an economic problem is going on out there in
rural America today, and we need an appropriate means to address it.

We must strengthen our lead in technology. It was government investment
that led to the creation of the Internet. I propose a 28-percent
increase in long-term computing research.

We also must be ready for the 21st century from its very first moment by
solving the so-called Y2K computer problem. We had one member of
Congress stand up and applaud. And we may have about that ration out
there applauding at home in front of their television sets. But
remember, this is a big, big problem, and we've been working hard on it.
Already we've made sure that the Social Security checks will come on
time.

But I want all the folks at home listening to this to know that we need
every state and local government, every business large and small to work
with us to make sure that this Y2K computer bug will be remembered as
the last headache of the 20th century, not the first crisis of the 21st.

For our own prosperity, we must support economic growth abroad. You
know, until recently a third of our economic growth came from exports.
But over the past year and a half, financial turmoil has put that growth
at risk. Today, much of the world is in recession, with Asia hit
especially hard. This is the most serious financial crisis in half a
century.

To meet it, the U.S. and other nations have reduced interest rates and
strengthened the International Monetary Fund and while the turmoil is
not over, we have worked very hard with other nations to contain it.

At the same time, we will continue to work on the long-term project:
building a global financial system for the 21st century that promotes
prosperity and tames the cycle of boom and bust that has engulfed so
much of Asia. This June, I will meet with other world leaders to advance
this historic purpose and I ask all of you to support our endeavors. I
also ask you to support creating a freer and fairer trading system for
21st century America.

You know, I'd like to say something really serious to everyone in this
chamber in both parties. I think trade has divided us and divided
Americans outside this chamber for too long. Somehow, we have to find a
common ground on which business and workers and environmentalists and
farmers and government can stand together. I believe these are the
things we ought to all agree on. So, let me try.

First, we ought to tear down barriers, open markets and expand trade,
but at the same time, we must ensure that ordinary citizens in all
countries actually benefit from trade; a trade that promotes the dignity
of work and the rights of workers and protects the environment.

We must insist that international trade organizations be open to public
scrutiny instead of mysterious, secret things subject to wild criticism.

When you come right down to it, now that the world economy is becoming
more and more integrated, we have to do in the world what we spent the
better part of this century doing here at home. We have got to put a
human face on the global economy.

Now, we must enforce our trade laws when imports unlawfully flood our
nation. I have already informed the government of Japan if that nation's
sudden surge of steel imports into our country is not reversed, America
will respond.

We must help all manufacturers hit hard by the present crisis with loan
guarantees, and other incentives to increase American exports by nearly
$2 billion. I'd like to believe we can achieve a new consensus on trade
based on these principles. And I ask the Congress to join me again in
this common approach and to give the president the trade authority long
used and now overdue and necessary to advance our prosperity in the 21st
century.

Tonight, I issue a call to the nations of the world to join the United
States in a new round of global trade negotiation to expand exports of
services, manufactures and farm products.

Tonight, I say, we will work with the International Labor Organization
on a new initiative to raise labor standards around the world. And this
year, we will lead the international community to conclude a treaty to
ban abusive child labor everywhere in the world.

If we do these things--invest in our people, our communities, our
technology--and lead in the global economy, then we will begin to meet
our historic responsibility to build a 21st century prosperity for
America.

You know, no nation in history has had the opportunity and the
responsibility we now have to shape a world that is more peaceful, more
secure, more free.

All Americans can be proud that our leadership helped to bring peace in
Northern Ireland.

All Americans can be proud that our leadership has put Bosnia on the
path to peace. And with our NATO allies we are pressing the Serbian
government to stop its brutal repression in Kosovo--to bring those
responsible to justice and to give the people of Kosovo the
self-government they deserve.

All Americans can be proud that our leadership renewed hope for lasting
peace in the Middle East. Some of you were with me last December as we
watched the Palestinian National Council completely renounce its call
for the destruction of Israel.

Now, I ask Congress to provide resources so that all parties can
implement the Wye Agreement, to protect Israel's security, to stimulate
the Palestinian economy, to support our friends in Jordan. We must not,
we dare not, let them down. I hope you will help me.

As we work for peace, we must also meet threats to our nation's
security, including increased danger from outlaw nations and terrorism.

We will defend our security wherever we are threatened, as we did this
summer when we struck at Osama bin Laden's network of terror. The
bombing of our embassies in Kenya and Tanzania reminds us again of the
risks faced every day by those who represent America to the world. So
let's give them the support they need, the safest possible workplaces,
and the resources they must have so America can continue to lead.

We must work to keep terrorists from disrupting computer networks. We
must work to prepare local communities for biological and chemical
emergencies, to support research into vaccines and treatments. We must
increase our efforts to restrain the spread of nuclear weapons and
missiles, from Korea to India and Pakistan. We must expand our work with
Russia, Ukraine and other former Soviet nations to safeguard nuclear
materials and technology so they never fall into the wrong hands. Our
balanced budget will increase funding for these critical efforts by
almost two-thirds over the next five years.

With Russia we must continue to reduce our nuclear arsenals. The START
II Treaty and the framework we have already agreed to for START III
could cut them by 80 percent from their Cold War height.

It's been two years since I signed the Comprehensive Test Ban Treaty. If
we don't do the right thing, other nations won't either. I ask the
Senate to take this vital step, approve the treaty now to make it harder
for other nations to develop nuclear arms, and to make sure we can end
nuclear testing for ever.

For nearly a decade, Iraq has defied its obligations to destroy its
weapons of terror and the missiles to deliver them.

America will continue to contain [Iraqi President] Saddam [Hussein] and
we will work for the day when Iraq has a government worthy of its
people. Now, last month, in our action over Iraq, our troops were
superb. Their mission was so flawlessly executed, that we risk taking
for granted the bravery and skill it required. Captain Jeff Taliaferro,
a 10-year Air Force veteran of the Air Force, flew a B-1B bomber over
Iraq as we attacked Saddam's war machine. He is here with us tonight. I
would like to ask you to honor him and all the 33,000 men and women of
Operation Desert Fox.

It is time to reverse the decline in defense spending that began in
1985.

Since April, together we have added nearly $6 billion to maintain our
military readiness. My balanced budget calls for a sustained increase
over the next six years for readiness, for modernization, and for pay
and benefits for our troops and their families.

You know, we are the heirs of a legacy of bravery represented in every
community in America by millions of our veterans. America's defenders
today still stand ready at a moments notice to go where comforts are few
and dangers are many, to do what needs to be done as no one else can.
They always come through for America. We must come through for them.

The new century demands new partnerships for peace and security. The
United Nations plays a crucial role, with allies sharing burdens America
might otherwise bear alone. America needs a strong and effective U.N. I
want to work with this new Congress to pay our dues and our debts.

We must continue to support security and stability in Europe and Asia--
expanding NATO and defining its new missions, maintaining our alliance
with Japan, with Korea, with our other Asian allies, and engaging China.

In China last year, I said to the leaders and the people what I'd like
to say again tonight: Stability can no longer be bought at the expense
of liberty.

But I'd also like to say again to the American people, it's important
not to isolate China. The more we bring China into the world, the more
the world will bring change and freedom to China.

Last spring, with some of you, I traveled to Africa, where I saw
democracy and reform rising, but still held back by violence and
disease. We must fortify African democracy and peace by launching radio
democracy for Africa, supporting the transition to democracy now
beginning to take place in Nigeria, and passing the African Trade and
Development Act.

We must continue to deepen our ties to the Americas and the Caribbean,
our common work to educate children, fight drugs, strengthen democracy
and increase trade. In this hemisphere, every government but one is
freely chosen by its people. We are determined that Cuba, too, will know
the blessings of liberty.

The American people have opened their arms and their hearts and their
arms to our Central American and Caribbean neighbors who have been so
devastated by the recent hurricanes. Working with Congress, I am
committed to help them rebuild.

When the first lady and Tipper Gore visited the region, they saw
thousands of our troops and thousands of American volunteers. In the
Dominican Republic, Hillary helped to rededicate a hospital that had
been rebuilt by Dominicans and Americans working side by side. With her
was some one else who has been very important to the relief efforts. You
know sports records are made and sooner or later, they're broken. But
making other people's lives better and showing our children the true
meaning of brotherhood, that lasts forever. So for far more than
baseball, Sammy Sosa, you're a hero in two countries tonight. Thank you.

So I say to all of you, if we do these things, if we pursue peace, fight
terrorism, increase our strength, renew our alliances, we will begin to
meet our generation's historic responsibility to build a stronger 21st
century America in a freer, more peaceful world.

As the world has changed, so have our own communities. We must make the
safer, more livable, and more united. This year, we will reach our goal
of 100,000 community police officers ahead of schedule and under budget.

The Brady Bill has stopped a quarter million felons, fugitives, and
stalkers from buying handguns and now, the murder rate is the lowest in
30 years, and the crime rate has dropped for six straight years.

Tonight, I propose a 21st Century Crime Bill to deploy the latest
technologies and tactics to make our communities even safer. Our
balanced budget will help put up to 50,000 more police on the street in
the areas hardest hit by crime, and then to equip them with new tools
from crime-mapping computers to digital mug shots. We must break the
deadly cycle of drugs and crime.

Our budget expands support for drug testing and treatment, saying to
prisoners, "If you stay on drugs, you have to stay behind bars." And to
those on parole, "If you want to keep your freedom, you must stay free
of drugs."

I ask Congress to restore the five-day waiting period for buying a
handgun and extend the Brady Bill to prevent juveniles who commit
violent crimes from buying a gun.

We must do more to keep our schools the safest places in our
communities. Last year, every American was horrified and heartbroken by
the tragic killings in Jonesboro, Paducah, Pearl, Edinboro, Springfield.
We were deeply moved by the courageous parents now working to keep guns
out of the hands of children and to make other efforts so that other
parents don't have to live through their loss.

After she lost her daughter, Suzann Wilson of Jonesboro, Arkansas, came
here to the White House with a powerful plea. She said "Please, please
for the sake of your children, lock up your guns. Don't let what
happened in Jonesboro, happen in your town."

It's a message she is passionately advocating every day. Suzann is here
with us tonight, with the first lady. I would like to thank her for her
courage and her commitment.

In memory of all the children who lost their lives to school violence, I
ask you to strengthen the Safe And Drug Free School Act, to pass
legislation to require child trigger locks, to do everything possible to
keep our children safe.

Today, we're--excuse me--a century ago, President Theodore Roosevelt
defined our great central task as leaving this land even a better land
for our descendants than it is for us. Today, we're restoring the
Florida Everglades, saving Yellowstone, preserving the red rock canyons
of Utah, protecting California's redwoods, and our precious coasts.

But our most fateful new challenge is the threat of global warming.
Nineteen ninety-eight was the warmest year ever recorded. Last year's
heat waves, floods and storm are but a hint of what future generations
may endure if we do not act now.

Tonight, I propose a new clean air fund to help communities reduce
greenhouse and other pollutions, and tax incentives and investment to
spur clean energy technologies. And I want to work with members of
Congress in both parties to reward companies that take early, voluntary
action to reduce greenhouse gases.

Now, all our communities face a preservation challenge as they grow, and
green space shrinks. Seven thousand acres of farmland and open space are
lost every day. In response, I propose two major initiatives. First, a
$1 billion livability agenda to help communities save open space, ease
traffic congestion, and grow in ways that enhance every citizen's
quality of life. And second, a $1 billion lands legacy initiative to
preserve places of natural beauty all across America, from the most
remote wilderness to the nearest city park.

These are truly landmark initiatives, which could not have been
developed without the visionary leadership of the vice president and I
want to thank him very much for his commitment here. Thank you.

Now, to get the most out of your community, you have to give something
back. That's why we created AmeriCorps, our national service program
that gives today's generation a chance to serve their communities and
earn money for college.

So far, in just four years, 100,000 young Americans have built
low-income homes with Habitat for Humanity, helped tutor children with
churches, work with FEMA to ease the burden of natural disasters and
performed countless other acts of service that has made America better.
I ask Congress to give more young Americans the chance to follow their
lead and serve America in AmeriCorps.

Now, we must work to renew our national community as well for the 21st
century. Last year, the House passed the bipartisan campaign finance
reform legislation sponsored by Representatives [Christopher] Shays
(R-Conn.) and [Martin T.] Meehan (D-Mass.) and Sens. [John] McCain
(R-Ariz.) and [Russell] Feingold (D-Wis.). But a partisan minority in
the Senate blocked reform. So I would like to say to the House, pass it
again--quickly.

And I'd like to say to the Senate, I hope you will say yes to a stronger
American democracy in the year 2000.

Since 1997, our Initiative on Race has sought to bridge the divides
between and among our people. In its report last fall, the Initiatives
Advisory Board found that Americans really do want to bring our people
together across racial lines.

We know it's been a long journey. For some it goes back to before the
beginning of our republic. For others, back since the Civil War; for
others, throughout the 21st century. But for most of us alive today, in
a very real sense this journey began 43 years ago, when a woman named
Rosa Parks sat down on a bus in Alabama and wouldn't get up.

She's sitting down with the first lady tonight, and she may get up or
not as she chooses.

We know that our continuing racial problems are aggravated, as the
presidential initiative said, by opportunity gaps.

The initiative I've outlined tonight will help to close them. But we
know that the discrimination gap has not been fully closed either.
Discrimination or violence because of race or religion, ancestry or
gender, disability or sexual orientation, is wrong and it ought to be
illegal. Therefore, I ask Congress to make the Employment
Non-Discrimination Act and the Hate Crimes Prevention Act the law of the
land.

You know, now since every person in America counts, every American ought
to be counted. We need a census that uses modern scientific methods to
do that.

Our new immigrants must be part of our one America. After all, they're
revitalizing our cities, they're energizing our culture, they're
building up our economy. We have a responsibility to make them welcome
here, and they have a responsibility to enter the mainstream of American
life.

That means learning English and learning about our democratic system of
government. There are now long waiting lines of immigrants that are
trying to do just that.

Therefore, our budget significantly expands our efforts to help them
meet their responsibility. I hope you will support it.

Whether our ancestors came here on the Mayflower, on slave ships;
whether they came to Ellis Island or LAX in Los Angeles; whether they
came yesterday or walked this land 1,000 years ago, our great challenge
for the 21st century is to find a way to be one America. We can meet all
the other challenges if we can go forward as one America.

You know, barely more than 300 days from now we will cross that bridge
into the new millennium. This is a moment, as the first lady has said,
to honor the past and imagine the future.

I'd like to take just a minute to honor her, for leading our Millennium
Project, for all she's done for our children. For all she has done in
her historic role to serve our nation and our best ideals at home and
abroad, I honor her.

Last year--last year I called on Congress and every citizen to mark the
millennium by saving America's treasures. Hillary's traveled all across
the country to inspire recognition and support for saving places like
Thomas Edison's invention factory or Harriet Tubman's home.

Now we have to preserve our treasures in every community. And tonight,
before I close, I want to invite every town, every city, every community
to become a nationally recognized millennium community by launching
projects that save our history, promote our arts and humanities, prepare
our children for the 21st century.

Already the response has been remarkable. And I want to say a special
word of thanks to our private sector partners and to members in Congress
of both parties for their support. Just one example. Because of you, the
Star Spangled Banner will be preserved for the ages.

In ways large and small, as we look to the millennium, we are keeping
alive what George Washington called the "sacred fire of liberty."

Six years ago, I came to office in a time of doubt for America, with our
economy troubled, our deficit high, our people divided. Some even
wondered whether our best days were behind us. But across this nation,
in a thousand neighborhoods, I have seen, even amidst the pain and
uncertainty of recession, the real heart and character of America.

I knew then we Americans could renew this country.

Tonight, as I deliver the last State of the Union Address for the 20th
century, no one anywhere in the world can doubt the enduring resolve and
boundless capacity of the American people to work toward that "more
perfect union" of our founders' dreams.

We are now, at the end of a century, when generation after generation of
Americans answered the call to greatness, overcoming Depression, lifting
up the dispossessed, bringing down barriers to racial prejudice,
building the largest middle class in history, winning two world wars and
the "long twilight struggle" of the Cold War.

We must all be profoundly grateful for the magnificent achievements of
our forbearers in this century.

Yet perhaps in the daily press of events, in the clash of controversy,
we don't see our own time for what it truly is--a new dawn for America.

A hundred years from tonight, another American president will stand in
this place and report on the State of the Union. He--or she--will look
back on the 21st century shaped in so many ways by the decisions we make
here and now.

So let it be said of us then that we were thinking not only of our time,
but of their time; that we reached as high as our ideals; that we put
aside our divisions and found a new hour of healing and hopefulness;
that we joined together to serve and strengthen the land we love.

My fellow Americans, this is our moment. Let us lift our eyes as one
nation, and from the mountaintop of this American century, look ahead to
the next one--asking God's blessing on our endeavors and on our beloved
country.

Thank you, and good evening.

***

State of the Union Address
William J. Clinton
January 27, 2000

Mr. Speaker, Mr. Vice President, Members of Congress, honored guests, my
fellow Americans:

We are fortunate to be alive at this moment in history. Never before has
our nation enjoyed, at once, so much prosperity and social progress with
so little internal crisis or so few external threats. Never before have
we had such a blessed opportunity--and, therefore, such a profound
obligation-- to build the more perfect union of our founders' dreams.

We begin the new century with over 20 million new jobs. The fastest
economic growth in more than 30 years; the lowest unemployment rates in
30 years; the lowest poverty rates in 20 years; the lowest
African-American and Hispanic unemployment rates on record; the first
back-to-back budget surpluses in 42 years.

Next month, America will achieve the longest period of economic growth
in our entire history.

We have built a new economy.

Our economic revolution has been matched by a revival of the American
spirit: Crime down by 20 percent, to its lowest level in 25 years. Teen
births down seven years in a row and adoptions up by 30 percent. Welfare
rolls cut in half to their lowest levels in 30 years.

My fellow Americans, the state of our union is the strongest it has ever
been.

As always, the credit belongs to the American people.

My gratitude also goes to those of you in this chamber who have worked
with us to put progress above partisanship.

Eight years ago, it was not so clear to most Americans there would be
much to celebrate in the year 2000. Then our nation was gripped by
economic distress, social decline, political gridlock. The title of a
best-selling book asked: "America: What went wrong?"

In the best traditions of our nation, Americans determined to set things
right. We restored the vital center, replacing outdated ideologies with
a new vision anchored in basic, enduring values: opportunity for all,
responsibility from all, and a community of all Americans.

We reinvented government, transforming it into a catalyst for new ideas
that stress both opportunity and responsibility, and give our people the
tools to solve their own problems.

With the smallest federal workforce in 40 years, we turned record
deficits into record surpluses, and doubled our investment in education.
We cut crime: with 100,000 community police and the Brady Law, which has
kept guns out of the hands of half a million criminals.

We ended welfare as we knew it--requiring work while protecting health
care and nutrition for children, and investing more in child care,
transportation, and housing to help their parents go to work. We have
helped parents to succeed at work and at home--with family leave, which
20 million Americans have used to care for a newborn child or a sick
loved one. We have engaged 150,000 young Americans in citizen service
through AmeriCorps--while also helping them earn their way through
college.

In 1992, we had a roadmap. Today, we have results. More important,
America again has the confidence to dream big dreams. But we must not
let our renewed confidence grow into complacency. We will be judged by
the dreams and deeds we pass on to our children. And on that score, we
will be held to a high standard, indeed. Because our chance to do good
is so great.

My fellow Americans, we have crossed the bridge we built to the 21st
Century. Now, we must shape a 21st-Century American revolution--of
opportunity, responsibility, and community. We must be, as we were in
the beginning, a new nation.

At the dawn of the last century, Theodore Roosevelt said, "the one
characteristic more essential than any other is foresight. . . It should
be the growing nation with a future which takes the long look ahead."

Tonight let us take our look long ahead--and set great goals for our
nation.

To 21st Century America, let us pledge that:

Every child will begin school ready to learn and graduate ready to
succeed. Every family will be able to succeed at home and at work--and
no child will be raised in poverty. We will meet the challenge of the
aging of America. We will assure quality, affordable healthcare for all
Americans. We will make America the safest big country on earth. We will
bring prosperity to every American community. We will reverse the course
of climate change and leave a cleaner, safer planet. America will lead
the world toward shared peace and prosperity, and the far frontiers of
science and technology. And we will become at last what our founders
pledged us to be so long ago--one nation, under God, indivisible, with
liberty and justice for all.

These are great goals, worthy of a great nation. We will not reach them
all this year. Not even in this decade. But we will reach them. Let us
remember that the first American revolution was not won with a single
shot. The continent was not settled in a single year. The lesson of our
history--and the lesson of the last seven years--is that great goals are
reached step by step: always building on our progress, always gaining
ground.

Of course, you can't gain ground if you're standing still. For too long
this Congress has been standing still on some of our most pressing
national priorities. Let's begin with them.

I ask you again to pass a real patient's bill of rights. Pass
common-sense gun-safety legislation. Pass campaign finance reform. Vote
on long overdue judicial nominations and other important appointees.
And, again, I ask you to raise the minimum wage.

Two years ago, as we reached our first balanced budget, I asked that we
meet our responsibility to the next generation by maintaining our fiscal
discipline. Because we refused to stray from that path, we are doing
something that would have seemed unimaginable seven years ago: We are
actually paying down the national debt. If we stay on this path, we can
pay down the debt entirely in 13 years and make America debt-free for
the first time since Andrew Jackson was president in 1835.

In 1993, we began to put our fiscal house in order with the Deficit
Reduction Act, winning passage in both houses by just one vote. Your
former colleague, my first Secretary of the Treasury, led that effort.
He is here tonight. Lloyd Bentsen, you have served America well.

Beyond paying off the debt, we must ensure that the benefits of debt
reduction go to preserving two of the most important guarantees we make
to every American--Social Security and Medicare. I ask you tonight to
work with me to make a bipartisan down payment on Social Security reform
by crediting the interest savings from debt reduction to the Social
Security Trust Fund to ensure that it is strong and sound for the next
50 years.

But this is just the start of our journey. Now we must take the right
steps toward reaching our great goals.

Opportunity and Responsibility in Education

First and foremost, we need a 21st Century revolution in education,
guided by our faith that every child can learn. Because education is
more than ever the key to our children's future, we must make sure all
our children have that key. That means quality preschool and
afterschool, the best trained teachers in every classroom, and college
opportunities for all our children.

For seven years, we have worked hard to improve our schools, with
opportunity and responsibility: Investing more, but demanding more in
return.

Reading, math, and college entrance scores are up. And some of the most
impressive gains are in schools in poor neighborhoods.

All successful schools have followed the same proven formula: higher
standards, more accountability, so all children can reach those
standards. I have sent Congress a reform plan based on that formula. It
holds states and school districts accountable for progress, and rewards
them for results. Each year, the national government invests more than
$15 billion in our schools. It's time to support what works and stop
supporting what doesn't.

As we demand more than ever from our schools, we should invest more than
ever in our schools.

Let's double our investment to help states and districts turn around
their worst-performing schools--or shut them down.

Let's double our investment in afterschool and summer school programs--
boosting achievement, and keeping children off the street and out of
trouble. If we do, we can give every child in every failing school in
America the chance to meet high standards.

Since 1993, we've nearly doubled our investment in Head Start and
improved its quality. Tonight, I ask for another $1 billion to Head
Start, the largest increase in the program's history.

We know that children learn best in smaller classes with good teachers.
For two years in a row, Congress has supported my plan to hire 100,000
new, qualified teachers, to lower class sizes in the early grades. This
year, I ask you to make it three in a row.

And to make sure all teachers know the subjects they teach, tonight I
propose a new teacher quality initiative--to recruit more talented
people into the classroom, reward good teachers for staying there, and
give all teachers the training they need.

We know charter schools provide real public school choice. When I became
President, there was just one independent public charter school in all
America. Today there are 1,700. I ask you to help us meet our goal of
3,000 by next year.

We know we must connect all our classrooms to the Internet. We're
getting there. In 1994, only three percent of our classrooms were
connected. Today, with the help of the Vice President's E-rate program,
more than half of them are; and 90 percent of our schools have at least
one connection to the Internet.

But we can't finish the job when a third of all schools are in serious
disrepair, many with walls and wires too old for the Internet. Tonight,
I propose to help 5,000 schools a year make immediate, urgent repairs.
And again, to help build or modernize 6,000 schools, to get students out
of trailers and into high-tech classrooms.

We should double our bipartisan GEAR UP program to mentor 1.4 million
disadvantaged young people for college. And let's offer these students a
chance to take the same college test-prep courses wealthier students use
to boost their test scores.

To make the American Dream achievable for all, we must make college
affordable for all. For seven years, on a bipartisan basis, we have
taken action toward that goal: larger Pell grants, more-affordable
student loans, education IRAs, and our HOPE scholarships, which have
already benefited 5 million young people. 67 percent of high school
graduates now go on to college, up almost 10 percent since 1993. Yet
millions of families still strain to pay college tuition. They need
help.

I propose a landmark $30-billion college opportunity tax cut--a
middle-class tax deduction for up to $10,000 in college tuition costs.
We've already made two years of college affordable for all. Now let's
make four years of college affordable for all.

If we take all these steps, we will move a long way toward making sure
every child starts school ready to learn and graduates ready to succeed.

Rewarding Work and Strengthening Families

We need a 21st Century revolution to reward work and strengthen
families-- by giving every parent the tools to succeed at work and at
the most important work of all--raising their children. That means
making sure that every family has health care and the support to care
for aging parents, the tools to bring their children up right, and that
no child grows up in poverty.

From my first days as President, we have worked to give families better
access to better health care. In 1997, we passed the Children's Health
Insurance Program--CHIP--so that workers who don't have health care
coverage through their employers at least can get it for their children.
So far, we've enrolled 2 million children, and we're well on our way to
our goal of 5 million.

But there are still more than 40 million Americans without health
insurance, more than there were in 1993. Tonight I propose that we
follow Vice President Gore's suggestion to make low income parents
eligible for the insurance that covers their kids. Together with our
children's initiative, we can cover nearly one quarter of the uninsured
in America.

Again, I ask you to let people between 55 and 65--the fastest growing
group of uninsured--buy into Medicare. And let's give them a tax credit
to make that choice an affordable one.

When the Baby Boomers retire, Medicare will be faced with caring for
twice as many of our citizens--and yet it is far from ready to do so. My
generation must not ask our children's generation to shoulder our
burden. We must strengthen and modernize Medicare now.

My budget includes a comprehensive plan to reform Medicare, to make it
more efficient and competitive. And it dedicates nearly $400 billion of
our budget surplus to keep Medicare solvent past 2025; and, at long
last, to give every senior a voluntary choice of affordable coverage for
prescription drugs.

Lifesaving drugs are an indispensable part of modern medicine. No one
creating a Medicare program today would even consider excluding coverage
for prescription drugs. Yet more than three in five seniors now lack
dependable drug coverage which can lengthen and enrich their lives.
Millions of older Americans who need prescription drugs the most pay the
highest prices for them.

In good conscience, we cannot let another year pass without extending to
all seniors the lifeline of affordable prescription drugs.

Record numbers of Americans are providing for aging or ailing loved ones
at home. Last year, I proposed a $1,000 tax credit for long-term care.
Frankly, that wasn't enough. This year, let's triple it to $3,000--and
this year, let's pass it.

And we must make needed investments to expand access to mental health
care. I want to thank the person who has led our efforts to break down
the barriers to the decent treatment of mental illness: Tipper Gore.

Taken together, these proposals would mark the largest investment in
health care in the 35 years since the creation of Medicare--a big step
toward assuring health care for all Americans, young and old.

We must also make investments that reward work and support families.
Nothing does that better than the Earned Income Tax Credit, the EITC.
The "E" in "EITC" is about earning; working; taking responsibility and
being rewarded for it. In my first Address to you, I asked Congress to
greatly expand this tax credit; and you did. As a result, in 1998 alone,
the EITC helped more than 4.3 million Americans work their way out of
poverty and toward the middle class--double the number in 1993.

Tonight, I propose another major expansion. We should reduce the
marriage penalty for the EITC, making sure it rewards marriage just as
it rewards work. And we should expand the tax credit for families with
more than two children to provide up to $1,100 more in tax relief.

We can't reward work and family unless men and women get equal pay for
equal work. The female unemployment rate is the lowest in 46 years. Yet
women still earn only about 75 cents for every dollar men earn. We must
do better by providing the resources to enforce present equal pay laws,
training more women for high-paying, high-tech jobs, and passing the
Paycheck Fairness Act.

Two-thirds of new jobs are in the suburbs, far away from many low-income
families. In the past two years, I have proposed and Congress has
approved 110,000 new housing vouchers--rent subsidies to help working
families live closer to the workplace. This year, let us more than
double that number. If we want people to go to work, they have to be
able to get to work.

Many working parents spend up to a quarter of their income on child
care. Last year, we helped parents provide child care for about two
million children. My child care initiative, along with funds already
secured in welfare reform, would make child care better, safer, and more
affordable for another 400,000 children.

For hard-pressed middle-income families, we should also expand the child
care tax credit. And we should take the next big step. We should make
that tax credit refundable for low-income families. For those making
under $30,000 a year, that could mean up to $2,400 for child-care costs.
We all say we're pro-work and pro-family. Passing this proposal would
prove it.

Tens of millions of Americans live from paycheck to paycheck. As hard as
they work, they still don't have the opportunity to save. Too few can
make use of IRAs and 401-K retirement plans. We should do more to help
working families save and accumulate wealth. That's the idea behind
so-called Individual Development Accounts. Let's take that idea to a new
level, with Retirement Savings Accounts that enable every low- and
moderate-income family in America to save for retirement, a first home,
a medical emergency, or a college education. I propose to match their
contributions, however small, dollar for dollar, every year they save.
And to give a major new tax credit for any small business that provides
a meaningful pension to its workers.

Nearly one in three American children grows up in a home without a
father. These children are five times more likely to live in poverty
than children with both parents at home. Clearly, demanding and
supporting responsible fatherhood is critical to lifting all children
out of poverty.

We have doubled child support collections since 1992, and I am proposing
tough new measures to hold still more fathers responsible. But we should
recognize that a lot of fathers want to do right by their children--and
need help to do it. Carlos Rosas of St. Paul, Minnesota, got that help.
Now he has a good job and he supports his son Ricardo. My budget will
help 40,000 fathers make the choices Carlos did. And I thank him for
being here.

If there is any issue on which we can reach across party lines it is in
our common commitment to reward work and strengthen families. Thanks to
overwhelming bipartisan support from this Congress, we have improved
foster care, supported those who leave it when they turn eighteen, and
dramatically increased the number of foster children going to adoptive
homes. I thank you for that. Of course, I am especially grateful to the
person who has led our efforts from the beginning, and who has worked
tirelessly for children and families for thirty years now: my wife,
Hillary.

If we take all these steps, we will move a long way toward empowering
parents to succeed at home and at work and ensuring that no child is
raised in poverty. We can make these vital investments in health care,
education and support for working families--and still offer tax cuts to
help pay for college, for retirement, to care for aging parents and
reduce the marriage penalty--without forsaking the path of fiscal
discipline that got us here. Indeed, we must make these investments and
tax cuts in the context of a balanced budget that strengthens and
extends the life of Social Security and Medicare and pays down the
national debt.

Responsibility and Crime

Crime in America has dropped for the past seven years--the longest
decline on record, thanks to a national consensus we helped to forge on
community police, sensible gun safety laws, and effective prevention.
But nobody believes America is safe enough. So let's set a higher goal:
let's make America the safest big country in the world.

Last fall, Congress supported my plan to hire--in addition to the
100,000 community police we have already funded--50,000 more,
concentrated in high-crime neighborhoods. I ask your continued support.

Soon after the Columbine tragedy, Congress considered common-sense gun
safety legislation to require Brady background checks at gun shows,
child safety locks for all new handguns, and a ban on the importation of
large-capacity ammunition clips. With courage--and a tie-breaking vote
by the Vice President--the Senate faced down the gun lobby, stood up for
the American people, and passed this legislation. But the House failed
to follow suit.

We've all seen what happens when guns fall into the wrong hands. Daniel
Mauser was only 15 years old when he was gunned down at Columbine. He
was an amazing kid, a straight-A student, a good skier. Like all parents
who lose their children, his father Tom has borne unimaginable grief.
Somehow Tom has found the strength to honor his son by transforming his
grief into action. Earlier this month, he took a leave of absence from
his job to fight for tougher gun safety laws. I pray that his courage
and wisdom will move this Congress to make common-sense gun safety
legislation the very next order of business. Tom, thank you for being
here tonight.

We must strengthen gun laws and better enforce laws already on the
books. Federal gun crime prosecutions are up 16 percent since I took
office. But again, we must do more. I propose to hire more federal and
local gun prosecutors, and more ATF agents to crack down on illegal gun
traffickers and bad-apple dealers. And we must give law enforcement the
tools to trace every gun--and every bullet--used in a crime in America.

Listen to this: the accidental gun death rate of children under 15 in
the United States is nine times higher than in the other 25
industrialized nations--combined. Technologies now exist that could lead
to guns that can only be fired by the adults who own them. I ask
Congress to fund research in Smart Gun technology. I also call on
responsible leaders in the gun industry to work with us on smart guns
and other steps to keep guns out of the wrong hands and keep our
children safe.

Every parent I know worries about the impact of violence in the media on
their children. I thank the entertainment industry for accepting my
challenge to put voluntary ratings on TV programs and video and Internet
games. But the ratings are too numerous, diverse, and confusing to be
really useful to parents. Therefore, I now ask the industry to accept
the First Lady's challenge--to develop a single, voluntary rating system
for all children's entertainment, one that is easier for parents to
understand and enforce.

If we take all these steps, we will be well on our way to making America
the safest big country in the world.

Opening New Markets

To keep our historic economic expansion going, we need a 21st Century
revolution to open new markets, start new businesses, and hire new
workers right here in America--in our inner cities, poor rural areas,
and on Indian reservations.

Our nation's prosperity has not yet reached these places. Over the last
six months, I have traveled to many of them--joined by many of you, and
many far-sighted business people--to shine a spotlight on the enormous
potential in communities from Appalachia to the Mississippi Delta, from
Watts to the Pine Ridge Indian Reservation. Everywhere I've gone, I've
met talented people eager for opportunity, and able to work. Let's put
them to work.

For business, it's the smart thing to do. For America, it's the right
thing to do. And if we don't do it now, when will we ever get around to
it?

I ask Congress to give businesses the same incentives to invest in
America's new markets that they now have to invest in foreign markets.
Tonight, I propose a large New Markets Tax Credit and other incentives
to spur $22 billion in private-sector capital--to create new businesses
and new investments in inner cities and rural areas.

Empowerment Zones have been creating these opportunities for five years
now. We should also increase incentives to invest in them and create
more of them.

This is not a Democratic or a Republican issue. It is an American issue.
Mr. Speaker, it was a powerful moment last November when you joined me
and the Reverend Jesse Jackson in your home state of Illinois, and
committed to working toward our common goal, by combining the best ideas
from both sides of the aisle. Mr. Speaker, I look forward to working
with you.

We must maintain our commitment to community development banks and keep
the community reinvestment act strong so all Americans have access to
the capital they need to buy homes and build businesses.

We need to make special efforts to address the areas with the highest
rates of poverty. My budget includes a special $110 million initiative
to promote economic development in the Mississippi Delta; and $1 billion
to increase economic opportunity, health care, education and law
enforcement for Native American communities. In this new century, we
should honor our historic responsibility to empower the first Americans.
I thank leaders and members from both parties who have already expressed
an interest in working with us on these efforts.

There's another part of our American community in trouble today--our
family farmers. When I signed the Farm Bill in 1996, I said there was a
great danger it would work well in good times but not in bad. Well,
droughts, floods, and historically low prices have made times very bad
for our farmers. We must work together to strengthen the farm safety
net, invest in land conservation, and create new markets by expanding
our program for bio-based fuels and products.

Today, opportunity for all requires something new: having access to a
computer and knowing how to use it. That means we must close the digital
divide between those who have these tools and those who don't.

Connecting classrooms and libraries to the Internet is crucial, but it's
just a start. My budget ensures that all new teachers are trained to
teach 21st Century skills and creates technology centers in 1,000
communities to serve adults. This spring, I will invite high-tech
leaders to join me on another New Markets tour--to close the digital
divide and open opportunity for all our people. I thank the high-tech
companies that are already doing so much in this area--and I hope the
new tax incentives I have proposed will encourage others to join us.

If we take these steps, we will go a long way toward our goal of
bringing opportunity to every community.

Global Change and American Leadership

To realize the full possibilities of the new economy, we must reach
beyond our own borders, to shape the revolution that is tearing down
barriers and building new networks among nations and individuals,
economies and cultures: globalization.

It is the central reality of our time. Change this profound is both
liberating and threatening. But there is no turning back. And our open,
creative society stands to benefit more than any other--if we
understand, and act on, the new realities of interdependence. We must be
at the center of every vital global network, as a good neighbor and
partner. We cannot build our future without helping others to build
theirs.

First, we must forge a new consensus on trade. Those of us who believe
passionately in the power of open trade must ensure that it lifts both
our living standards and our values, never tolerating abusive child
labor or a race to the bottom on the environment and worker protection.
Still, open markets and rules-based trade are the best engines we know
for raising living standards, reducing global poverty and environmental
destruction, and assuring the free flow of ideas. There is only one
direction for America on trade: we must go forward.

And we must make developing economies our partners in prosperity--which
is why I ask Congress to finalize our groundbreaking African and
Caribbean Basin trade initiatives.

Globalization is about more than economics. Our purpose must be to bring
the world together around democracy, freedom, and peace, and to oppose
those who would tear it apart.

Here are the fundamental challenges I believe America must meet to shape
the 21st Century world.

First, we must continue to encourage our former adversaries, Russia and
China, to emerge as stable, prosperous, democratic nations. Both are
being held back from reaching their full potential: Russia by the legacy
of communism, economic turmoil, a cruel and self-defeating war in
Chechnya; China by the illusion that it can buy stability at the expense
of freedom. But think how much has changed in the past decade: thousands
of former Soviet nuclear weapons eliminated; Russian soldiers serving
with ours in the Balkans; Russian people electing their leaders for the
first time in a thousand years. And in China, an economy more open to
the world than ever before. No one can know for sure what direction
these great countries will choose. But we must do everything in our
power to increase the chance they will choose wisely, to be constructive
members of the global community.

That is why we must support those Russians struggling for a democratic,
prosperous future; continue to reduce both our nuclear arsenals; and
help Russia safeguard weapons and materials that remain.

That is why Congress should support the agreement we negotiated to bring
China into the WTO, by passing Permanent Normal Trade Relations as soon
as possible this year. Our markets are already open to China. This
agreement will open China's markets to us. And it will advance the cause
of peace in Asia and promote the cause of change in China.

A second challenge is to protect our security from conflicts that pose
the risk of wider war and threaten our common humanity. America cannot
prevent every conflict or stop every outrage. But where our interests
are at stake and we can make a difference, we must be peacemakers.

We should be proud of America's role in bringing the Middle East closer
than ever to a comprehensive peace; building peace in Northern Ireland;
working for peace in East Timor and Africa; promoting reconciliation
between Greece and Turkey and in Cyprus; working to defuse crises
between India and Pakistan; defending human rights and religious
freedom.

And we should be proud of the men and women of our armed forces and
those of our allies who stopped the ethnic cleansing in Kosovo--enabling
a million innocent people to return to their homes.

When Slobodan Milosevic unleashed his terror on Kosovo, Captain John
Cherrey was one of the brave airmen who turned the tide. And when
another American plane went down over Serbia, he flew into the teeth of
enemy air defenses to bring his fellow pilot home. Thanks to our armed
forces' skill and bravery, we prevailed without losing a single American
in combat. Captain Cherrey, we honor you, and promise to finish the job
you began.

A third challenge is to keep the inexorable march of technology from
giving terrorists and potentially hostile nations the means to undermine
our defenses. The same advances that have shrunk cell phones to fit in
the palms of our hands can also make weapons of terror easier to conceal
and easier to use.

We must meet this threat: by making effective agreements to restrain
nuclear and missile programs in North Korea, curbing the flow of lethal
technology to Iran; preventing Iraq from threatening its neighbors;
increasing our preparedness against chemical and biological attack;
protecting our vital computer systems from hackers and criminals; and
developing a system to defend against new missile threats--while working
to preserve our Anti-Ballistic Missile Treaty with Russia.

I hope we can have a constructive bipartisan dialogue this year to build
a consensus which will lead eventually to the ratification of the
Comprehensive Nuclear Test Ban Treaty.

A fourth challenge is to ensure that the stability of our planet is not
threatened by the huge gulf between rich and poor. We cannot accept a
world in which part of humanity lives on the cutting edge of a new
economy, while the rest live on the bare edge of survival. We must do
our part, with expanded trade, expanded aid, and the expansion of
freedom.

From Nigeria to Indonesia, more people won the right to choose their
leaders in 1999 than in 1989, the year the Berlin Wall fell. We must
stand by democracies--like Colombia, fighting narco-traffickers for its
people's lives, and our children's lives. I have proposed a strong
two-year package to help Colombia win this fight; and I ask for your
support. And I will propose tough new legislation to go after what drug
barons value most-- their money.

In a world where 1.2 billion people live on less than a dollar a day, we
must do our part in the global endeavor to reduce the debts of the
poorest countries so they can invest in education, health and economic
growth--as the Pope and other religious leaders have urged. Last year,
Congress made a down payment on America's share. And I ask for your
continued support.

And America must help more nations break the bonds of disease. Last year
in Africa, AIDS killed ten times as many people as war did. My budget
invests $150 million more in the fight against this and other infectious
killers. Today, I propose a tax credit to speed the development of
vaccines for diseases like malaria, TB and AIDS. I ask the private
sector and our partners around the world to join us in embracing this
cause. Together, we can save millions of lives.

Our final challenge is the most important: to pass a national security
budget that keeps our military the best trained and best equipped in the
world, with heightened readiness and 21st Century weapons; raises
salaries for our service men and women; protects our veterans; fully
funds the diplomacy that keeps our soldiers out of war; and makes good
on our commitment to pay our UN dues and arrears. I ask you to pass this
budget and I thank you for the extraordinary support you have
given--Republicans and Democrats alike--to our men and women in uniform.
I especially want to thank Secretary Cohen for symbolizing our
bipartisan commitment to our national security--and Janet Cohen, I thank
you for tirelessly traveling the world to show our support for the
troops.

If we meet all these challenges, America can lead the world toward peace
and freedom in an era of globalization.

Responsibility, Opportunity, and the Environment

I am grateful for the opportunities the Vice President and I have had to
work hard to protect the environment and finally to put to rest the
notion that you can't expand the economy while protecting the
environment. As our economy has grown, we have rid more than 500
neighborhoods of toxic waste and ensured cleaner air and water for
millions of families. In the past three months alone, we have acted to
preserve more than 40 million acres of roadless lands in our National
Forests and created three new National Monuments.

But as our communities grow, our commitment to conservation must grow as
well. Tonight, I propose creating a permanent conservation fund to
restore wildlife, protect coastlines, and save natural treasures from
California redwoods to the Everglades. This Lands Legacy endowment
represents by far the most enduring investment in land preservation ever
proposed.

Last year, the Vice President launched a new effort to help make
communities more livable--so children will grow up next to parks, not
parking lots, and parents can be home with their children instead of
stuck in traffic. Tonight, we propose new funding for advanced transit
systems-- for saving precious open spaces--for helping major cities
around the Great Lakes protect their waterways and enhance their quality
of life.

The greatest environmental challenge of the new century is global
warming. Scientists tell us that the 1990s were the hottest decade of
the entire millennium. If we fail to reduce emissions of greenhouse
gases, deadly heat waves and droughts will become more frequent, coastal
areas will be flooded, economies disrupted.

Many people in the United States and around the world still believe we
can't cut greenhouse gas pollution without slowing economic growth. In
the Industrial Age that may have been true. In the digital economy, it
isn't. New technologies make it possible to cut harmful emissions and
provide even more growth. For example, just last week, automakers
unveiled cars that get 70 to 80 miles a gallon--the fruits of a unique
research partnership between government and industry. Before you know
it, efficient production of biofuels will give us the equivalent of
hundreds of miles from a gallon of gas.

To speed innovations in environmental technologies, I propose giving
major tax incentives to businesses for the production of clean
energy--and to families for buying energy-saving homes and appliances
and the next generation of super-efficient cars when they hit the
showroom floor. I also call on the auto industry to use available
technologies to make all new cars more fuel efficient right away. And on
Congress to make more of our clean-energy technologies available to the
developing world--creating cleaner growth abroad and new jobs at home.

The Opportunity and Responsibility of Science and Technology

In the new century, innovations in science and technology will be the
key not only to the health of the environment but to miraculous
improvements in the quality of our lives and advances in the economy.

Later this year, researchers will complete the first draft of the entire
human genome--the very blueprint of life. It is important for all
Americans to recognize that your tax dollars have fueled this research--
and that this and other wise investments in science are leading to a
revolution in our ability to detect, treat, and prevent disease.

For example, researchers have identified genes that cause Parkinson's
Disease, diabetes, and certain types of cancer--and they are designing
precision therapies that will block the harmful effects of these faulty
genes for good. Researchers are already using this new technique to
target and destroy cells that cause breast cancer. Soon, we may be able
to use it to prevent the onset of Alzheimer's Disease. Scientists are
also working on an artificial retina to help many blind people to see
and microchips that would directly stimulate damaged spinal cords and
allow people who are now paralyzed to stand up and walk.

Science and engineering innovations are also propelling our remarkable
prosperity. Information technology alone now accounts for a third of our
economic growth, with jobs that pay almost 80 percent above the private
sector average. Again, we should keep in mind: government-funded
research brought supercomputers, the Internet, and communications
satellites into being. Soon researchers will bring us devices that can
translate foreign languages as fast as you can speak; materials 10 times
stronger than steel at a fraction of the weight; and molecular computers
the size of a teardrop with the power of today's fastest supercomputers.

To accelerate the march of discovery across all disciplines of science
and technology, my budget includes an unprecedented $3 billion increase
in the 21st Century Research Fund, the largest increase in civilian
research in a generation.

These new breakthroughs must be used in ways that reflect our most
cherished values. First and foremost, we must safeguard our citizens'
privacy. Last year, we proposed rules to protect every citizen's medical
records. This year, we will finalize those rules. We have also taken the
first steps to protect the privacy of bank and credit card statements
and other financial records. Soon I will send legislation to the
Congress to finish that job. We must also act to prevent any genetic
discrimination by employers or insurers.

These steps will allow America to lead toward the far frontiers of
science and technology--enhancing our health, environment, and economy
in ways we cannot even imagine today.

Community

At a time when science, technology and the forces of globalization are
bringing so many changes into our lives, it is more important than ever
that we strengthen the bonds that root us in our local communities and
in our national communities.

No tie binds different people together like citizen service. There is a
new spirit of service in America--a movement we have supported with
AmeriCorps, an expanded Peace Corps, and unprecedented new partnerships
with businesses, foundations, and community groups. Partnerships to
enlist 12,000 companies in moving 650,000 of our fellow citizens from
welfare to work. To battle drug abuse and AIDS. To teach young people to
read. To Save America's Treasures. To strengthen the arts. To fight teen
pregnancy. To prevent youth violence. To promote racial healing.

We can do even more to help Americans help each other. We should help
faith-based organizations do more to fight poverty and drug abuse and
help young people get back on the right track with initiatives like
Second Chance Homes to help unwed teen mothers. We should support
Americans who tithe and contribute to charities, but don't earn enough
to claim a tax deduction for it. Tonight, I propose new tax incentives
to allow low- and middle-income citizens to get that deduction.

We should do more to help new immigrants fully participate in the
American community--investing more to teach them civics and English. And
since everyone in our community counts, we must make sure everyone is
counted in this year's census.

Within ten years there will be no majority race in our largest state,
California. In a little more than 50 years, there will be no majority
race in America. In a more interconnected world, this diversity can be
our greatest strength. Just look around this chamber. We have members
from virtually every racial, ethnic, and religious background. And
America is stronger for it. But as we have seen, these differences all
too often spark hatred and division, even here at home.

We have seen a man dragged to death in Texas simply because he was
black. A young man murdered in Wyoming simply because he was gay. In the
last year alone, we've seen the shootings of African Americans, Asian
Americans, and Jewish children simply because of who they were. This is
not the American way. We must draw the line. Without delay, we must pass
the Hate Crimes Prevention Act and the Employment Non-Discrimination
Act. And we should reauthorize the Violence Against Women Act.

No American should be subjected to discrimination in finding a home,
getting a job, going to school, or securing a loan. Tonight, I propose
the largest ever investment to enforce America's civil rights laws.
Protections in law must be protections in fact.

Last February, I created the White House Office of One America to
promote racial reconciliation. That's what Hank Aaron, has done all his
life. From his days as baseball's all-time homerun king to his recent
acts of healing, he has always brought Americans together. We're pleased
he's with us tonight.

This fall, at the White House, one of America's leading scientists said
something we should all remember. He said all human beings, genetically,
are 99.9 percent the same. So modern science affirms what ancient faith
has always taught: the most important fact of life is our common
humanity.

Therefore, we must do more than tolerate diversity--we must honor it and
celebrate it.

My fellow Americans, each time I prepare for the State of the Union, I
approach it with great hope and expectations for our nation. But tonight
is special--because we stand on the mountaintop of a new millennium.
Behind us we see the great expanse of American achievement; before us,
even grander frontiers of possibility.

We should be filled with gratitude and humility for our prosperity and
progress; with awe and joy at what lies ahead; and with absolute
determination to make the most of it.

When the framers finished crafting our Constitution, Benjamin Franklin
stood in Independence Hall and reflected on a painting of the sun, low
on the horizon. He said, "I have often wondered whether that sun was
rising or setting. Today," Franklin said, "I have the happiness to know
it is a rising sun." Well, today, because each generation of Americans
has kept the fire of freedom burning brightly, lighting those frontiers
of possibility, we still bask in the warmth of Mr. Franklin's rising
sun.

After 224 years, the American Revolution continues. We remain a new
nation. As long as our dreams outweigh our memories, America will be
forever young. That is our destiny. And this is our moment.

Thank you, God bless you, and God bless America.

***

State of the Union Address
George W. Bush
February 27, 2001

Mr. Speaker, Mr. Vice President, members of Congress:  It's a great
privilege to be here to outline a new budget and a new approach for
governing our great country.  I thank you for your invitation to speak
here tonight.  I know Congress had to formally invite me, and it could
have been a close vote.  (Laughter.)  So, Mr. Vice President, I
appreciate you being here to break the tie.  (Laughter.)

I want to thank so many of you who have accepted my invitation to come
to the White House to discuss important issues.  We're off to a good
start.  I will continue to meet with you and ask for your input.  You
have been kind and candid, and I thank you for making a new President
feel welcome.  (Applause.)

The last time I visited the Capitol, I came to take an oath on the steps
of this building.  I pledged to honor our Constitution and laws.
(Applause.)  And I asked you to join me in setting a tone of civility
and respect in Washington.  (Applause.)

I hope America is noticing the difference, because we're making
progress.  Together, we are changing the tone in the Nation's Capital.
And this spirit of respect and cooperation is vital, because, in the
end, we will be judged not only by what we say or how we say it, we will
be judged by what we're able to accomplish.

America today is a nation with great challenges, but greater resources.
An artist using statistics as a brush could paint two very different
pictures of our country.  One would have warning signs: increasing
layoffs, rising energy prices, too many failing schools, persistent
poverty, the stubborn vestiges of racism.  Another picture would be full
of blessings:  a balanced budget, big surpluses, a military that is
second to none, a country at peace with its neighbors, technology that
is revolutionizing the world, and our greatest strength -- concerned
citizens who care for our country and care for each other.

Neither picture is complete in and of itself.  And tonight I challenge
and invite Congress to work with me to use the resources of one picture
to repaint the other; to direct the advantages of our time to solve the
problems of our people.  Some of these resources will come from
government.  Some, but not all.

Year after year in Washington, budget debates seem to come down to an
old, tired argument:  on one side, those who want more government,
regardless of the cost; on the other, those who want less government,
regardless of the need.  We should leave those arguments to the last
century, and chart a different course.  (Applause.)

Government has a role, and an important role.  Yet, too much government
crowds out initiative and hard work, private charity and the private
economy.  Our new governing vision says government should be active, but
limited; engaged, but not overbearing.  And my budget is based on that
philosophy.

It is reasonable, and it is responsible.  It meets our obligations, and
funds our growing needs.  We increase spending next year for Social
Security and Medicare, and other entitlement programs, by $81 billion.
We've increased spending for discretionary programs by a very
responsible 4 percent, above the rate of inflation.  My plan pays down
an unprecedented amount of our national debt.  And then, when money is
still left over, my plan returns it to the people who earned it in the
first place.  (Applause.)


A budget's impact is counted in dollars, but measured in lives.
Excellent schools, quality health care, a secure retirement, a cleaner
environment, a stronger defense -- these are all important needs, and we
fund them.  The highest percentage increase in our budget should go to
our children's education.  (Applause.)  Education is not my top priority
-- education is my top priority and, by supporting this budget, you'll
make it yours, as well.

Reading is the foundation of all learning.  So during the next five
years, we triple spending, adding $5 billion to help every child in
America learn to read.  Values are important, so we've tripled funding
for character education to teach our children not only reading and
writing, but right from wrong.  (Applause.)

We've increased funding to train and recruit teachers, because we know a
good education starts with a good teacher.  And I have a wonderful
partner in this effort.  I like teachers so much, I married one.
(Applause.)  Laura has begun a new effort to recruit Americans to the
profession that will shape our future -- teaching.  She will travel
across America to promote sound teaching practices and early reading
skills in our schools and in programs such as Head Start.

When it comes to our schools, dollars alone do not always make the
difference.  Funding is important, and so is reform.  So we must tie
funding to higher standards and accountability for results.  (Applause.)

I believe in local control of schools.  We should not, and we will not,
run public schools from Washington, D.C.  (Applause.)  Yet when the
federal government spends tax dollars, we must insist on results.
Children should be tested on basic reading and math skills every year
between grades three and eight.  Measuring is the only way to know
whether all our children are learning.  And I want to know, because I
refuse to leave any child behind in America.  (Applause.)

Critics of testing contend it distracts from learning.  They talk about
teaching to the test.  But let's put that logic to the test.  If you
test a child on basic math and reading skills, and you're teaching to
the test, you're teaching math and reading.  And that's the whole idea.
(Applause.)  As standards rise, local schools will need more flexibility
to meet them.  So we must streamline the dozens of federal education
programs into five, and let states spend money in those categories as
they see fit. (Applause.)

Schools will be given a reasonable chance to improve and the support to
do so.  Yet, if they don't, if they continue to fail, we must give
parents and students different options -- a better public school, a
private school, tutoring or a charter school.  (Applause.)  In the end,
every child in a bad situation must be given a better choice because,
when it comes to our children, failure is simply not an option.
(Applause.)

Another priority in my budget is to keep the vital promises of Medicare
and Social Security, and together we will do so.  To meet the health
care needs of all America's seniors, we double the Medicare budget over
the next 10 years.  My budget dedicates $238 billion to Medicare next
year alone, enough to fund all current programs and to begin a new
prescription drug benefit for low-income seniors.  (Applause.)  No
senior in America should have to choose between buying food and buying
prescriptions.  (Applause.)

To make sure the retirement savings of America's seniors are not
diverted in any other program, my budget protects all $2.6 trillion of
the Social Security surplus for Social Security, and for Social Security
alone. (Applause.)

My budget puts a priority on access to health care, without telling
Americans what doctor they have to see or what coverage they must
choose.  Many working Americans do not have health care coverage, so we
will help them buy their own insurance with refundable tax credits.
(Applause.)  And to provide quality care in low-income neighborhoods,
over the next five years we will double the number of people served at
community health care centers.  (Applause.)

And we will address the concerns of those who have health coverage, yet
worry their insurance company doesn't care and won't pay. Together this
Congress and this President will find common ground to make sure doctors
make medical decisions, and patients get the health care they deserve
with a patients' bill of rights.  (Applause.)

When it comes to their health, people want to get the medical care they
need, not be forced to go to court because they didn't get it. We will
ensure access to the courts for those with legitimate claims.  But
first, let's put in place a strong, independent review   so we promote
quality health care, not frivolous lawsuits.  (Applause.)

My budget also increases funding for medical research, which gives hope
to many who struggle with serious disease.  Our prayers tonight are with
one of your own who is engaged in his own fight against cancer -- a fine
representative, and a good man, Congressman Joe Moakley. (Applause.)  I
can think of no more appropriate tribute to Joe than to have the
Congress finish the job of doubling the budget for the National
Institutes of Health.  (Applause.)

My new Freedom Initiative for Americans with Disabilities funds new
technologies, expands opportunities to work, and makes our society more
welcoming.  For the more than 50 million Americans with disabilities, we
need to break down barriers to equality. (Applause.)

The budget I propose to you also supports the people who keep our
country strong and free, the men and women who serve in the United
States military.  (Applause.)  I'm requesting $5.7 billion in increased
military pay and benefits, and health care and housing.  Our men and
women in uniform give America their best and we owe them our support.
(Applause.)

America's veterans honored their commitment to our country through their
military service.  I will honor our commitment to them with a
million-dollar increase to ensure better access to quality care and
faster decisions on benefit claims.  (Applause.)

My budget will improve our environment by accelerating the cleanup of
toxic brownfields.  And I propose we make a major investment in
conservation by fully funding the Land and Water Conservation Fund.
(Applause.)  Our national parks have a special place in our country's
life. Our parks are places of great natural beauty and history.  As good
stewards, we must leave them better than we found them.  So I propose
providing $4.9 billion over five years for the upkeep of these national
treasures.  (Applause.)

And my budget adopts a hopeful new approach to help the poor and the
disadvantaged.  We must encourage and support the work of charities and
faith-based and community groups that offer help and love one person at
a time.  (Applause.)  These groups are working in every neighborhood in
America to fight homelessness and addiction and domestic violence; to
provide a hot meal or a mentor or a safe haven for our children.
Government should welcome these groups to apply for funds, not
discriminate against them.  (Applause.)

Government cannot be replaced by charities or volunteers. Government
should not fund religious activities.  (Applause.)  But our nation
should support the good works of these good people who are helping their
neighbors in need.  (Applause.)  So I propose allowing all taxpayers,
whether they itemize or not, to deduct their charitable contributions.
Estimates show this could encourage as much as $14 billion a year in new
charitable giving, money that will save and change lives.  (Applause.)

Our budget provides more than $700 million over the next 10 years for a
federal compassion capital fund, with a focused and noble mission, to
provide a mentor to the more than 100 million children with a parent in
prison, and to support other local efforts to fight illiteracy, teen
pregnancy, drug addiction and other difficult problems.  (Applause.)

With us tonight is the Mayor of Philadelphia.  Please help me welcome
Mayor John Street.  (Applause.)  Mayor Street has encouraged faith-based
and community organizations to make a significant difference in
Philadelphia.  He's invited me to his city this summer to see
compassionate action.  I'm personally aware of just how effective the
Mayor is.  Mayor Street's a Democrat.  (Applause.)  Let the record show,
I lost his city, big time.  (Applause.)  But some things are bigger than
politics.  So I look forward to coming to your city, to see your
faith-based programs in action.  (Applause.)

As government promotes compassion, it also must promote justice. Too
many of our citizens have cause to doubt our nation's justice, when the
law points a finger of suspicion at groups, instead of individuals.  All
our citizens are created equal, and must be treated equally.
(Applause.)

Earlier today, I asked John Ashcroft, the Attorney General, to develop
specific recommendations to end racial profiling.  It's wrong and we
will end it in America.  (Applause.)  In so doing, we will not hinder
the work of our nation's brave police officers.  They protect us every
day -- often at great risk.  (Applause.)  But by stopping the abuses of
a few, we will add to the public confidence our police officers earn and
deserve. (Applause.)

My budget has funded a responsible increase in our ongoing operations.
It has funded our nation's important priorities.  It has protected
Social Security and Medicare.  And our surpluses are big enough that
there is still money left over.

Many of you have talked about the need to pay down our national debt.  I
listened, and I agree.  (Applause.)  We owe it to our children and
grandchildren to act now, and I hope you will join me to pay down $2
trillion in debt during the next 10 years.  (Applause.)  At the end of
those 10 years, we will have paid down all the debt that is available to
retire.  (Applause.)  That is more debt, repaid more quickly than has
ever been repaid by any nation at any time in history.  (Applause.)

We should also prepare for the unexpected, for the uncertainties of the
future.  We should approach our nation's budget as any prudent family
would, with a contingency fund for emergencies or additional spending
needs.  For example, after a strategic review, we may need to increase
defense spending.  We may need to increase spending for our farmers or
additional money to reform Medicare.  And so, my budget sets aside
almost a trillion dollars over 10 years for additional needs.  That is
one trillion additional reasons you can feel comfortable supporting this
budget.  (Applause.)

We have increased our budget at a responsible 4 percent.  We have funded
our priorities.  We paid down all the available debt.  We have prepared
for contingencies.  And we still have money left over.

Yogi Berra once said, "When you come to a fork in the road, take it."
(Laughter.)  Now, we come to a fork in the road; we have two choices.
Even though we have already met our needs, we could spend the money on
more and bigger government.  That's the road our nation has traveled in
recent years.

Last year, government spending shot up 8 percent.  That's far more than
our economy grew, far more than personal income grew, and far more than
the rate of inflation.  If you continue on that road, you will spend the
surplus and have to dip into Social Security to pay other bills.
(Applause.)  Unrestrained government spending is a dangerous road to
deficits, so we must take a different path.  (Applause.)  The other
choice is to let the American people spend their own money to meet their
own needs.  (Applause.)

I hope you will join me in standing firmly on the side of the people.
You see, the growing surplus exists because taxes are too high and
government is charging more than it needs.  The people of America have
been overcharged and, on their behalf, I am here asking for a refund.
(Applause.)

Some say my tax plan is too big.  (Applause.)  Others say it's too
small.  (Applause.)  I respectfully disagree.  (Laughter.)  This plan is
just right.  (Applause.)  I didn't throw darts at the board to come up
with a number for tax relief.  I didn't take a poll or develop an
arbitrary formula that might sound good.  I looked at problems in the
Tax Code and calculated the cost to fix them.

A tax rate of 15 percent is too high for those who earn low wages, so we
must lower the rate to 10 percent.  (Applause.)  No one should pay more
than a third of the money they earn in federal income taxes, so we
lowered the top rate to 33 percent.  (Applause.)

This reform will be welcome relief for America's small businesses, which
often pay taxes at the highest rate.  And help for small business means
jobs for Americans.  (Applause.)  We simplified the Tax Code by reducing
the number of tax rates from the current five rates to four lower ones,
10 percent, 15, 25 and 33 percent.  In my plan, no one is targeted in or
targeted out.  Everyone who pays income taxes will get relief.
(Applause.)

Our government should not tax, and thereby discourage marriage, so we
reduced the marriage penalty.  (Applause.)  I want to help families rear
and support their children, so we doubled the child credit to $1,000 per
child.  (Applause.)  It's not fair to tax the same earnings twice --
once when you earn them, and again when you die -- so we must repeal the
death tax.  (Applause.)

These changes add up to significant help.  A typical family with two
children will save $1,600 a year on their federal income taxes.  Now,
$1,600 may not sound like a lot to some, but it means a lot to many
families:  $1,600 buys gas for two cars for an entire year; it pays
tuition for a year at a community college; it pays the average family
grocery bill for three months.  That's real money.

With us tonight representing many American families are Steven and
Josefina Ramos.  (Applause.)  They are from Pennsylvania.  (Applause.)
But they could be from any one of your districts.  Steven is the network
administrator for a school district.  Josefina is a Spanish teacher at a
charter school.  And they have a two-year-old daughter.

Steven and Josefina tell me they pay almost $8,000 a year in federal
income taxes.  My plan will save them more than $2,000.  Let me tell you
what Steven says:  "Two thousand dollars a year means a lot to my
family.  If we had this money, it would help us reach our goal of paying
off our personal debt in two years' time."  After that, Steven and
Josefina want to start saving for Lianna's college education.

My attitude is, government should never stand in the way of families
achieving their dreams.  (Applause.)  And as we debate this issue,
always remember, the surplus is not the government's money, the surplus
is the people's money.  (Applause.)

For lower-income families, my tax plan restores basic fairness. Right
now, complicated tax rules punish hard work.  A waitress supporting two
children on $25,000 a year can lose nearly half of every additional
dollar she earns above the $25,000.  Her overtime, her hardest hours,
are taxed at nearly 20 percent.  This sends a terrible message:  you'll
never get ahead. But America's message must be different.  We must honor
hard work, never punish it.  (Applause.)  With tax relief, overtime will
no longer be over-taxed time for the waitress.  (Applause.) People with
the smallest incomes will get the highest percentage of reductions.  And
millions of additional American families will be removed from the income
tax rolls entirely.  (Applause.)

Tax relief is right and tax relief is urgent.  The long economic
expansion that began almost 10 years ago is faltering.  Lower interest
rates will eventually help, but we cannot assume they will do the job
all by themselves.

Forty years ago, and then 20 years ago, two Presidents, one Democrat,
one Republican, John F. Kennedy and Ronald Reagan, advocated tax cuts
to, in President Kennedy's words, get this country moving again.  They
knew then what we must do now.  To create economic growth and
opportunity, we must put money back into the hands of the people who buy
goods and create jobs.  (Applause.)

We must act quickly.  The Chairman of the Federal Reserve has testified
before Congress that tax cuts often come too late to stimulate economic
recovery.  So I want to work with you to give our economy an important
jump-start by making tax relief retroactive.  (Applause.)

We must act now because it is the right thing to do.  We must also act
now because we have other things to do.  We must show courage to
confront and resolve tough challenges, to restructure our nation's
defenses, to meet our growing need for energy, and to reform Medicare
and Social Security.

America has a window of opportunity to extend and secure our present
peace by promoting a distinctly American internationalism.  We will work
with our allies and friends to be a force for good and a champion of
freedom.  We will work for free markets, free trade and freedom from
oppression.  Nations making progress toward freedom will find America is
their friend.  We will promote our values.  We will promote the peace.
And we need a strong military to keep the peace.

But our military was shaped to confront the challenges of the past.  So
I've asked the Secretary of Defense to review America's Armed Forces and
prepare to transform them to meet emerging threats.  My budget makes a
down payment on the research and development that will be required. Yet,
in our broader transformation effort, we must put strategy first, then
spending.  Our defense vision will drive our defense budget, not the
other way around.  (Applause.)

Our nation also needs a clear strategy to confront the threats of the
21st century -- threats that are more widespread and less certain. They
range from terrorists who threaten with bombs to tyrants in rogue
nations intent upon developing weapons of mass destruction.  To protect
our own people, our allies and friends, we must develop and we must
deploy effective missile defenses.  (Applause.)

And as we transform our military, we can discard Cold War relics, and
reduce our own nuclear forces to reflect today's needs.  (Applause.)  A
strong America is the world's best hope for peace and freedom.

Yet the cause of freedom rests on more than our ability to defend
ourselves and our allies.  Freedom is exported every day, as we ship
goods and products that improve the lives of millions of people.  Free
trade brings greater political and personal freedom.  Each of the
previous five Presidents has had the ability to negotiate far reaching
trade agreements. Tonight I ask you to give me the strong hand of
presidential trade promotion authority, and to do so quickly.
(Applause.)

As we meet tonight, many citizens are struggling with the high cost of
energy.  We have a serious energy problem that demands a national energy
policy.  (Applause.)  The West is confronting a major energy shortage
that has resulted in high prices and uncertainty.  I've asked federal
agencies to work with California officials to help speed construction of
new energy sources, and I have direct Vice President Cheney, Commerce
Secretary Evans, Energy Secretary Abraham and other senior members in my
administration to develop a national energy policy. (Applause.)

Our energy demand outstrips our supply.  We can produce more energy at
home while protecting our environment, and we must.  (Applause.) We can
produce more electricity to meet demand, and we must.  (Applause.) We
can promote alternative energy sources and conservation, and we must.
(Applause.)  America must become more energy-independent, and we will.
(Applause.)

Perhaps the biggest test of our foresight and courage will be reforming
Medicare and Social Security.  Medicare's finances are strained and its
coverage is outdated.  Ninety-nine percent of employer-provided health
plans offer some form of prescription drug coverage; Medicare does not.
The framework for reform has been developed by Senators Frist and Breaux
and Congressman Thomas, and now is the time to act.  (Applause.)

Medicare must be modernized, and we must make sure that every senior on
Medicare can choose a health care plan that offers prescription drugs.
(Applause.)

Seven years from now, the baby boom generation will begin to claim
Social Security benefits.  Every one in this chamber knows that Social
Security is not prepared to fully fund their retirement.  And we only
have a couple of years to get prepared.  Without reform, this country
will one day awaken to a stark choice:  either a drastic rise in payroll
taxes or a radical cut in retirement benefits.

There is a better way.  This spring I will form a presidential
commission to reform Social Security.  The commission will make its
recommendations by next fall.  Reform should be based on these
principles: It must preserve the benefits of all current retirees and
those nearing retirement.  It must return Social Security to sound
financial footing. And it must offer personal savings accounts to
younger workers who want them.  (Applause.)

Social Security now offers workers a return of less than 2 percent on
the money they pay into the system.  To save the system, we must
increase that by allowing younger workers to make safe, sound
investments that yield a higher rate of return.  Ownership, access to
wealth and independence should not be the privilege of the few.  They
are the hope of every American, and we must make them the foundation of
Social Security. (Applause.)

By confronting the tough challenge of reform, by being responsible with
our budget, we can earn the trust of the American people. And we can add
to that trust by enacting fair and balanced election and campaign
reforms.  (Applause.)

The agenda I have set before you tonight is worthy of a great nation.
America is a nation at peace, but not a nation at rest.  Much has been
given to us, and much is expected.  Let us agree to bridge old divides.
But let us also agree that our goodwill must be dedicated to great
goals.  Bipartisan is more than minding our matters.  It is doing our
duty.  (Applause.)

No one can speak in this Capitol and not be awed by its history. As so
many turning points, debates in these chambers have reflected the
collected or divided conscience of our country.  And when we walk
through Statuary Hall and see those men and women of marble, we're
reminded of their courage and achievement.

Yet America's purpose is never found only in statues or history.
America's purpose always stands before us.  Our generation must show
courage in a time of blessing, as our nation has always shown in times
of crisis.  And our courage, issue by issue, can gather to greatness and
serve our country.  This is the privilege and responsibility we share.
And if we work together, we can prove that public service is noble.

We all came here for a reason.  We all have things we want to accomplish
and promises to keep.  Juntos podemos -- together we can. (Applause.)

We can make Americans proud of their government.  Together we can share
in the credit of making our country more prosperous and generous and
just, and earn from our conscience and from our fellow citizens the
highest possible praise:  Well done, good and faithful servants.

Thank you all.  Good night and God bless.  (Applause.)

***

State of the Union Address
George W. Bush
September 20, 2001

Mr. Speaker, Mr. President Pro Tempore, members of Congress, and fellow
Americans:

In the normal course of events, Presidents come to this chamber to
report on the state of the Union.  Tonight, no such report is needed.
It has already been delivered by the American people.

We have seen it in the courage of passengers, who rushed terrorists to
save others on the ground -- passengers like an exceptional man named
Todd Beamer.  And would you please help me to welcome his wife, Lisa
Beamer, here tonight.  (Applause.)

We have seen the state of our Union in the endurance of rescuers,
working past exhaustion.  We have seen the unfurling of flags, the
lighting of candles, the giving of blood, the saying of prayers -- in
English, Hebrew, and Arabic.  We have seen the decency of a loving and
giving people who have made the grief of strangers their own.

My fellow citizens, for the last nine days, the entire world has seen
for itself the state of our Union -- and it is strong.  (Applause.)

Tonight we are a country awakened to danger and called to defend
freedom.  Our grief has turned to anger, and anger to resolution.
Whether we bring our enemies to justice, or bring justice to our
enemies, justice will be done.  (Applause.)

I thank the Congress for its leadership at such an important time.  All
of America was touched on the evening of the tragedy to see Republicans
and Democrats joined together on the steps of this Capitol, singing "God
Bless America."  And you did more than sing; you acted, by delivering
$40 billion to rebuild our communities and meet the needs of our
military.

Speaker Hastert, Minority Leader Gephardt, Majority Leader Daschle and
Senator Lott, I thank you for your friendship, for your leadership and
for your service to our country.  (Applause.)

And on behalf of the American people, I thank the world for its
outpouring of support.  America will never forget the sounds of our
National Anthem playing at Buckingham Palace, on the streets of Paris,
and at Berlin's Brandenburg Gate.

We will not forget South Korean children gathering to pray outside our
embassy in Seoul, or the prayers of sympathy offered at a mosque in
Cairo.  We will not forget moments of silence and days of mourning in
Australia and Africa and Latin America.

Nor will we forget the citizens of 80 other nations who died with our
own:  dozens of Pakistanis; more than 130 Israelis; more than 250
citizens of India; men and women from El Salvador, Iran, Mexico and
Japan; and hundreds of British citizens.  America has no truer friend
than Great Britain.  (Applause.)   Once again, we are joined together in
a great cause -- so honored the British Prime Minister has crossed an
ocean to show his unity of purpose with America.  Thank you for coming,
friend.  (Applause.)

On September the 11th, enemies of freedom committed an act of war
against our country.  Americans have known wars -- but for the past 136
years, they have been wars on foreign soil, except for one Sunday in
1941.  Americans have known the casualties of war -- but not at the
center of a great city on a peaceful morning.  Americans have known
surprise attacks -- but never before on thousands of civilians.  All of
this was brought upon us in a single day -- and night fell on a
different world, a world where freedom itself is under attack.

Americans have many questions tonight.  Americans are asking:  Who
attacked our country?  The evidence we have gathered all points to a
collection of loosely affiliated terrorist organizations known as al
Qaeda.  They are the same murderers indicted for bombing American
embassies in Tanzania and Kenya, and responsible for bombing the USS
Cole.

Al Qaeda is to terror what the mafia is to crime.  But its goal is not
making money; its goal is remaking the world -- and imposing its radical
beliefs on people everywhere.

The terrorists practice a fringe form of Islamic extremism that has been
rejected by Muslim scholars and the vast majority of Muslim clerics -- a
fringe movement that perverts the peaceful teachings of Islam.  The
terrorists' directive commands them to kill Christians and Jews, to kill
all Americans, and make no distinction among military and civilians,
including women and children.

This group and its leader -- a person named Osama bin Laden -- are
linked to many other organizations in different countries, including the
Egyptian Islamic Jihad and the Islamic Movement of Uzbekistan.  There
are thousands of these terrorists in more than 60 countries.  They are
recruited from their own nations and neighborhoods and brought to camps
in places like Afghanistan, where they are trained in the tactics of
terror.  They are sent back to their homes or sent to hide in countries
around the world to plot evil and destruction.

The leadership of al Qaeda has great influence in Afghanistan and
supports the Taliban regime in controlling most of that country.  In
Afghanistan, we see al Qaeda's vision for the world.

Afghanistan's people have been brutalized -- many are starving and many
have fled.  Women are not allowed to attend school.  You can be jailed
for owning a television.  Religion can be practiced only as their
leaders dictate.  A man can be jailed in Afghanistan if his beard is not
long enough.

The United States respects the people of Afghanistan -- after all, we
are currently its largest source of humanitarian aid -- but we condemn
the Taliban regime.  (Applause.)  It is not only repressing its own
people, it is threatening people everywhere by sponsoring and sheltering
and supplying terrorists.  By aiding and abetting murder, the Taliban
regime is committing murder.

And tonight, the United States of America makes the following demands on
the Taliban:  Deliver to United States authorities all the leaders of al
Qaeda who hide in your land. (Applause.)  Release all foreign nationals,
including American citizens, you have unjustly imprisoned.  Protect
foreign journalists, diplomats and aid workers in your country.  Close
immediately and permanently every terrorist training camp in
Afghanistan, and hand over every terrorist, and every person in their
support structure, to appropriate authorities.  (Applause.)  Give the
United States full access to terrorist training camps, so we can make
sure they are no longer operating.

These demands are not open to negotiation or discussion.  (Applause.)
The Taliban must act, and act immediately.  They will hand over the
terrorists, or they will share in their fate.

I also want to speak tonight directly to Muslims throughout the world.
We respect your faith.  It's practiced freely by many millions of
Americans, and by millions more in countries that America counts as
friends.  Its teachings are good and peaceful, and those who commit evil
in the name of Allah blaspheme the name of Allah.  (Applause.)  The
terrorists are traitors to their own faith, trying, in effect, to hijack
Islam itself.  The enemy of America is not our many Muslim friends; it
is not our many Arab friends.  Our enemy is a radical network of
terrorists, and every government that supports them.  (Applause.)

Our war on terror begins with al Qaeda, but it does not end there.  It
will not end until every terrorist group of global reach has been found,
stopped and defeated.  (Applause.)

Americans are asking, why do they hate us?  They hate what we see right
here in this chamber -- a democratically elected government.  Their
leaders are self-appointed.  They hate our freedoms -- our freedom of
religion, our freedom of speech, our freedom to vote and assemble and
disagree with each other.

They want to overthrow existing governments in many Muslim countries,
such as Egypt, Saudi Arabia, and Jordan.  They want to drive Israel out
of the Middle East.  They want to drive Christians and Jews out of vast
regions of Asia and Africa.

These terrorists kill not merely to end lives, but to disrupt and end a
way of life.  With every atrocity, they hope that America grows fearful,
retreating from the world and forsaking our friends.  They stand against
us, because we stand in their way.

We are not deceived by their pretenses to piety.  We have seen their
kind before.  They are the heirs of all the murderous ideologies of the
20th century.  By sacrificing human life to serve their radical visions
-- by abandoning every value except the will to power -- they follow in
the path of fascism, and Nazism, and totalitarianism.  And they will
follow that path all the way, to where it ends:  in history's unmarked
grave of discarded lies. (Applause.)

Americans are asking:  How will we fight and win this war?   We will
direct every resource at our command -- every means of diplomacy, every
tool of intelligence, every instrument of law enforcement, every
financial influence, and every necessary weapon of war -- to the
disruption and to the defeat of the global terror network.

This war will not be like the war against Iraq a decade ago, with a
decisive liberation of territory and a swift conclusion.  It will not
look like the air war above Kosovo two years ago, where no ground troops
were used and not a single American was lost in combat.

Our response involves far more than instant retaliation and isolated
strikes.  Americans should not expect one battle, but a lengthy
campaign, unlike any other we have ever seen.  It may include dramatic
strikes, visible on TV, and covert operations, secret even in success.
We will starve terrorists of funding, turn them one against another,
drive them from place to place, until there is no refuge or no rest.
And we will pursue nations that provide aid or safe haven to terrorism.
Every nation, in every region, now has a decision to make. Either you
are with us, or you are with the terrorists.  (Applause.)  From this day
forward, any nation that continues to harbor or support terrorism will
be regarded by the United States as a hostile regime.

Our nation has been put on notice:  We are not immune from attack.  We
will take defensive measures against terrorism to protect Americans.
Today, dozens of federal departments and agencies, as well as state and
local governments, have responsibilities affecting homeland security.
These efforts must be coordinated at the highest level.  So tonight I
announce the creation of a Cabinet-level position reporting directly to
me -- the Office of Homeland Security.

And tonight I also announce a distinguished American to lead this
effort, to strengthen American security: a military veteran, an
effective governor, a true patriot, a trusted friend -- Pennsylvania's
Tom Ridge.  (Applause.)  He will lead, oversee and coordinate a
comprehensive national strategy to safeguard our country against
terrorism, and respond to any attacks that may come.

These measures are essential.  But the only way to defeat terrorism as a
threat to our way of life is to stop it, eliminate it, and destroy it
where it grows.  (Applause.)

Many will be involved in this effort, from FBI agents to intelligence
operatives to the reservists we have called to active duty.  All deserve
our thanks, and all have our prayers.  And tonight, a few miles from the
damaged Pentagon, I have a message for our military:  Be ready.  I've
called the Armed Forces to alert, and there is a reason.  The hour is
coming when America will act, and you will make us proud.  (Applause.)

This is not, however, just America's fight.  And what is at stake is not
just America's freedom.  This is the world's fight.  This is
civilization's fight.  This is the fight of all who believe in progress
and pluralism, tolerance and freedom.

We ask every nation to join us.  We will ask, and we will need, the help
of police forces, intelligence services, and banking systems around the
world.  The United States is grateful that many nations and many
international organizations have already responded -- with sympathy and
with support.  Nations from Latin America, to Asia, to Africa, to
Europe, to the Islamic world.  Perhaps the NATO Charter reflects best
the attitude of the world:  An attack on one is an attack on all.

The civilized world is rallying to America's side.  They understand that
if this terror goes unpunished, their own cities, their own citizens may
be next.  Terror, unanswered, can not only bring down buildings, it can
threaten the stability of legitimate governments.  And you know what --
we're not going to allow it.  (Applause.)

Americans are asking:  What is expected of us?  I ask you to live your
lives, and hug your children.  I know many citizens have fears tonight,
and I ask you to be calm and resolute, even in the face of a continuing
threat.

I ask you to uphold the values of America, and remember why so many have
come here.  We are in a fight for our principles, and our first
responsibility is to live by them.  No one should be singled out for
unfair treatment or unkind words because of their ethnic background or
religious faith.  (Applause.)

I ask you to continue to support the victims of this tragedy with your
contributions.  Those who want to give can go to a central source of
information, libertyunites.org, to find the names of groups providing
direct help in New York, Pennsylvania, and Virginia.

The thousands of FBI agents who are now at work in this investigation
may need your cooperation, and I ask you to give it.

I ask for your patience, with the delays and inconveniences that may
accompany tighter security; and for your patience in what will be a long
struggle.

I ask your continued participation and confidence in the American
economy.  Terrorists attacked a symbol of American prosperity.  They did
not touch its source.  America is successful because of the hard work,
and creativity, and enterprise of our people.  These were the true
strengths of our economy before September 11th, and they are our
strengths today. (Applause.)

And, finally, please continue praying for the victims of terror and
their families, for those in uniform, and for our great country.  Prayer
has comforted us in sorrow, and will help strengthen us for the journey
ahead.

Tonight I thank my fellow Americans for what you have already done and
for what you will do.  And ladies and gentlemen of the Congress, I thank
you, their representatives, for what you have already done and for what
we will do together.

Tonight, we face new and sudden national challenges.  We will come
together to improve air safety, to dramatically expand the number of air
marshals on domestic flights, and take new measures to prevent
hijacking.  We will come together to promote stability and keep our
airlines flying, with direct assistance during this emergency.
(Applause.)

We will come together to give law enforcement the additional tools it
needs to track down terror here at home.  (Applause.)  We will come
together to strengthen our intelligence capabilities to know the plans
of terrorists before they act, and find them before they strike.
(Applause.)

We will come together to take active steps that strengthen America's
economy, and put our people back to work.

Tonight we welcome two leaders who embody the extraordinary spirit of
all New Yorkers:  Governor George Pataki, and Mayor Rudolph Giuliani.
(Applause.)  As a symbol of America's resolve, my administration will
work with Congress, and these two leaders, to show the world that we
will rebuild New York City.  (Applause.)

After all that has just passed -- all the lives taken, and all the
possibilities and hopes that died with them -- it is natural to wonder
if America's future is one of fear.  Some speak of an age of terror.  I
know there are struggles ahead, and dangers to face.  But this country
will define our times, not be defined by them.  As long as the United
States of America is determined and strong, this will not be an age of
terror; this will be an age of liberty, here and across the world.
(Applause.)

Great harm has been done to us.  We have suffered great loss.  And in
our grief and anger we have found our mission and our moment.  Freedom
and fear are at war.  The advance of human freedom -- the great
achievement of our time, and the great hope of every time -- now depends
on us.  Our nation -- this generation -- will lift a dark threat of
violence from our people and our future.  We will rally the world to
this cause by our efforts, by our courage.  We will not tire, we will
not falter, and we will not fail.  (Applause.)

It is my hope that in the months and years ahead, life will return
almost to normal.  We'll go back to our lives and routines, and that is
good.  Even grief recedes with time and grace.  But our resolve must not
pass.  Each of us will remember what happened that day, and to whom it
happened.  We'll remember the moment the news came -- where we were and
what we were doing.  Some will remember an image of a fire, or a story
of rescue.  Some will carry memories of a face and a voice gone forever.

And I will carry this:  It is the police shield of a man named George
Howard, who died at the World Trade Center trying to save others.  It
was given to me by his mom, Arlene, as a proud memorial to her son.
This is my reminder of lives that ended, and a task that does not end.
(Applause.)

I will not forget this wound to our country or those who inflicted it.
I will not yield; I will not rest; I will not relent in waging this
struggle for freedom and security for the American people.

The course of this conflict is not known, yet its outcome is certain.
Freedom and fear, justice and cruelty, have always been at war, and we
know that God is not neutral between them.  (Applause.)

Fellow citizens, we'll meet violence with patient justice -- assured of
the rightness of our cause, and confident of the victories to come.  In
all that lies before us, may God grant us wisdom, and may He watch over
the United States of America.

Thank you.  (Applause.)

***

State of the Union Address
George W. Bush
January 29, 2002

Thank you very much. Mr. Speaker, Vice President Cheney, members of
Congress, distinguished guests, fellow citizens: As we gather tonight,
our nation is at war, our economy is in recession, and the civilized
world faces unprecedented dangers. Yet the state of our Union has never
been stronger. (Applause.)

We last met in an hour of shock and suffering. In four short months, our
nation has comforted the victims, begun to rebuild New York and the
Pentagon, rallied a great coalition, captured, arrested, and rid the
world of thousands of terrorists, destroyed Afghanistan's terrorist
training camps, saved a people from starvation, and freed a country from
brutal oppression. (Applause.)

The American flag flies again over our embassy in Kabul. Terrorists who
once occupied Afghanistan now occupy cells at Guantanamo Bay.
(Applause.) And terrorist leaders who urged followers to sacrifice their
lives are running for their own. (Applause.)

America and Afghanistan are now allies against terror. We'll be partners
in rebuilding that country. And this evening we welcome the
distinguished interim leader of a liberated Afghanistan: Chairman Hamid
Karzai. (Applause.)

The last time we met in this chamber, the mothers and daughters of
Afghanistan were captives in their own homes, forbidden from working or
going to school. Today women are free, and are part of Afghanistan's new
government. And we welcome the new Minister of Women's Affairs, Doctor
Sima Samar. (Applause.)

Our progress is a tribute to the spirit of the Afghan people, to the
resolve of our coalition, and to the might of the United States
military. (Applause.) When I called our troops into action, I did so
with complete confidence in their courage and skill. And tonight, thanks
to them, we are winning the war on terror. (Applause.) The men and women
of our Armed Forces have delivered a message now clear to every enemy of
the United States: Even 7,000 miles away, across oceans and continents,
on mountaintops and in caves--you will not escape the justice of this
nation. (Applause.)

For many Americans, these four months have brought sorrow, and pain that
will never completely go away. Every day a retired firefighter returns
to Ground Zero, to feel closer to his two sons who died there. At a
memorial in New York, a little boy left his football with a note for his
lost father: Dear Daddy, please take this to heaven. I don't want to
play football until I can play with you again some day.

Last month, at the grave of her husband, Michael, a CIA officer and
Marine who died in Mazur-e-Sharif, Shannon Spann said these words of
farewell: "Semper Fi, my love." Shannon is with us tonight. (Applause.)

Shannon, I assure you and all who have lost a loved one that our cause
is just, and our country will never forget the debt we owe Michael and
all who gave their lives for freedom.

Our cause is just, and it continues. Our discoveries in Afghanistan
confirmed our worst fears, and showed us the true scope of the task
ahead. We have seen the depth of our enemies' hatred in videos, where
they laugh about the loss of innocent life. And the depth of their
hatred is equaled by the madness of the destruction they design. We have
found diagrams of American nuclear power plants and public water
facilities, detailed instructions for making chemical weapons,
surveillance maps of American cities, and thorough descriptions of
landmarks in America and throughout the world.

What we have found in Afghanistan confirms that, far from ending there,
our war against terror is only beginning. Most of the 19 men who
hijacked planes on September the 11th were trained in Afghanistan's
camps, and so were tens of thousands of others. Thousands of dangerous
killers, schooled in the methods of murder, often supported by outlaw
regimes, are now spread throughout the world like ticking time bombs,
set to go off without warning.

Thanks to the work of our law enforcement officials and coalition
partners, hundreds of terrorists have been arrested. Yet, tens of
thousands of trained terrorists are still at large. These enemies view
the entire world as a battlefield, and we must pursue them wherever they
are. (Applause.) So long as training camps operate, so long as nations
harbor terrorists, freedom is at risk. And America and our allies must
not, and will not, allow it. (Applause.)

Our nation will continue to be steadfast and patient and persistent in
the pursuit of two great objectives. First, we will shut down terrorist
camps, disrupt terrorist plans, and bring terrorists to justice. And,
second, we must prevent the terrorists and regimes who seek chemical,
biological or nuclear weapons from threatening the United States and the
world. (Applause.)

Our military has put the terror training camps of Afghanistan out of
business, yet camps still exist in at least a dozen countries. A
terrorist underworld--including groups like Hamas, Hezbollah, Islamic
Jihad, Jaish-i-Mohammed--operates in remote jungles and deserts, and
hides in the centers of large cities.

While the most visible military action is in Afghanistan, America is
acting elsewhere. We now have troops in the Philippines, helping to
train that country's armed forces to go after terrorist cells that have
executed an American, and still hold hostages. Our soldiers, working
with the Bosnian government, seized terrorists who were plotting to bomb
our embassy. Our Navy is patrolling the coast of Africa to block the
shipment of weapons and the establishment of terrorist camps in Somalia.

My hope is that all nations will heed our call, and eliminate the
terrorist parasites who threaten their countries and our own. Many
nations are acting forcefully. Pakistan is now cracking down on terror,
and I admire the strong leadership of President Musharraf. (Applause.)

But some governments will be timid in the face of terror. And make no
mistake about it: If they do not act, America will. (Applause.)

Our second goal is to prevent regimes that sponsor terror from
threatening America or our friends and allies with weapons of mass
destruction. Some of these regimes have been pretty quiet since
September the 11th. But we know their true nature. North Korea is a
regime arming with missiles and weapons of mass destruction, while
starving its citizens.

Iran aggressively pursues these weapons and exports terror, while an
unelected few repress the Iranian people's hope for freedom.

Iraq continues to flaunt its hostility toward America and to support
terror. The Iraqi regime has plotted to develop anthrax, and nerve gas,
and nuclear weapons for over a decade. This is a regime that has already
used poison gas to murder thousands of its own citizens--leaving the
bodies of mothers huddled over their dead children. This is a regime
that agreed to international inspections--then kicked out the
inspectors. This is a regime that has something to hide from the
civilized world.

States like these, and their terrorist allies, constitute an axis of
evil, arming to threaten the peace of the world. By seeking weapons of
mass destruction, these regimes pose a grave and growing danger. They
could provide these arms to terrorists, giving them the means to match
their hatred. They could attack our allies or attempt to blackmail the
United States. In any of these cases, the price of indifference would be
catastrophic.

We will work closely with our coalition to deny terrorists and their
state sponsors the materials, technology, and expertise to make and
deliver weapons of mass destruction. We will develop and deploy
effective missile defenses to protect America and our allies from sudden
attack. (Applause.) And all nations should know: America will do what is
necessary to ensure our nation's security.

We'll be deliberate, yet time is not on our side. I will not wait on
events, while dangers gather. I will not stand by, as peril draws closer
and closer. The United States of America will not permit the world's
most dangerous regimes to threaten us with the world's most destructive
weapons. (Applause.)

Our war on terror is well begun, but it is only begun. This campaign may
not be finished on our watch--yet it must be and it will be waged on our
watch.

We can't stop short. If we stop now--leaving terror camps intact and
terror states unchecked--our sense of security would be false and
temporary. History has called America and our allies to action, and it
is both our responsibility and our privilege to fight freedom's fight.
(Applause.)

Our first priority must always be the security of our nation, and that
will be reflected in the budget I send to Congress. My budget supports
three great goals for America: We will win this war; we'll protect our
homeland; and we will revive our economy.

September the 11th brought out the best in America, and the best in this
Congress. And I join the American people in applauding your unity and
resolve. (Applause.) Now Americans deserve to have this same spirit
directed toward addressing problems here at home. I'm a proud member of
my party--yet as we act to win the war, protect our people, and create
jobs in America, we must act, first and foremost, not as Republicans,
not as Democrats, but as Americans. (Applause.)

It costs a lot to fight this war. We have spent more than a billion
dollars a month--over $30 million a day--and we must be prepared for
future operations. Afghanistan proved that expensive precision weapons
defeat the enemy and spare innocent lives, and we need more of them. We
need to replace aging aircraft and make our military more agile, to put
our troops anywhere in the world quickly and safely. Our men and women
in uniform deserve the best weapons, the best equipment, the best
training--and they also deserve another pay raise. (Applause.)

My budget includes the largest increase in defense spending in two
decades --because while the price of freedom and security is high, it is
never too high. Whatever it costs to defend our country, we will pay.
(Applause.)

The next priority of my budget is to do everything possible to protect
our citizens and strengthen our nation against the ongoing threat of
another attack. Time and distance from the events of September the 11th
will not make us safer unless we act on its lessons. America is no
longer protected by vast oceans. We are protected from attack only by
vigorous action abroad, and increased vigilance at home.

My budget nearly doubles funding for a sustained strategy of homeland
security, focused on four key areas: bioterrorism, emergency response,
airport and border security, and improved intelligence. We will develop
vaccines to fight anthrax and other deadly diseases. We'll increase
funding to help states and communities train and equip our heroic police
and firefighters. (Applause.) We will improve intelligence collection
and sharing, expand patrols at our borders, strengthen the security of
air travel, and use technology to track the arrivals and departures of
visitors to the United States. (Applause.)

Homeland security will make America not only stronger, but, in many
ways, better. Knowledge gained from bioterrorism research will improve
public health. Stronger police and fire departments will mean safer
neighborhoods. Stricter border enforcement will help combat illegal
drugs. (Applause.) And as government works to better secure our
homeland, America will continue to depend on the eyes and ears of alert
citizens.

A few days before Christmas, an airline flight attendant spotted a
passenger lighting a match. The crew and passengers quickly subdued the
man, who had been trained by al Qaeda and was armed with explosives. The
people on that plane were alert and, as a result, likely saved nearly
200 lives. And tonight we welcome and thank flight attendants Hermis
Moutardier and Christina Jones. (Applause.)

Once we have funded our national security and our homeland security, the
final great priority of my budget is economic security for the American
people. (Applause.) To achieve these great national objectives--to win
the war, protect the homeland, and revitalize our economy--our budget
will run a deficit that will be small and short-term, so long as
Congress restrains spending and acts in a fiscally responsible manner.
(Applause.) We have clear priorities and we must act at home with the
same purpose and resolve we have shown overseas: We'll prevail in the
war, and we will defeat this recession. (Applause.)

Americans who have lost their jobs need our help and I support extending
unemployment benefits and direct assistance for health care coverage.
(Applause.) Yet, American workers want more than unemployment checks--
they want a steady paycheck. (Applause.) When America works, America
prospers, so my economic security plan can be summed up in one word:
jobs. (Applause.)

Good jobs begin with good schools, and here we've made a fine start.
(Applause.) Republicans and Democrats worked together to achieve
historic education reform so that no child is left behind. I was proud
to work with members of both parties: Chairman John Boehner and
Congressman George Miller. (Applause.) Senator Judd Gregg. (Applause.)
And I was so proud of our work, I even had nice things to say about my
friend, Ted Kennedy. (Laughter and applause.) I know the folks at the
Crawford coffee shop couldn't believe I'd say such a
thing--(laughter)--but our work on this bill shows what is possible if
we set aside posturing and focus on results. (Applause.)

There is more to do. We need to prepare our children to read and succeed
in school with improved Head Start and early childhood development
programs. (Applause.) We must upgrade our teacher colleges and teacher
training and launch a major recruiting drive with a great goal for
America: a quality teacher in every classroom. (Applause.)

Good jobs also depend on reliable and affordable energy. This Congress
must act to encourage conservation, promote technology, build
infrastructure, and it must act to increase energy production at home so
America is less dependent on foreign oil. (Applause.)

Good jobs depend on expanded trade. Selling into new markets creates new
jobs, so I ask Congress to finally approve trade promotion authority.
(Applause.) On these two key issues, trade and energy, the House of
Representatives has acted to create jobs, and I urge the Senate to pass
this legislation. (Applause.)

Good jobs depend on sound tax policy. (Applause.) Last year, some in
this hall thought my tax relief plan was too small; some thought it was
too big. (Applause.) But when the checks arrived in the mail, most
Americans thought tax relief was just about right. (Applause.) Congress
listened to the people and responded by reducing tax rates, doubling the
child credit, and ending the death tax. For the sake of long-term growth
and to help Americans plan for the future, let's make these tax cuts
permanent. (Applause.)

The way out of this recession, the way to create jobs, is to grow the
economy by encouraging investment in factories and equipment, and by
speeding up tax relief so people have more money to spend. For the sake
of American workers, let's pass a stimulus package. (Applause.)

Good jobs must be the aim of welfare reform. As we reauthorize these
important reforms, we must always remember the goal is to reduce
dependency on government and offer every American the dignity of a job.
(Applause.)

Americans know economic security can vanish in an instant without health
security. I ask Congress to join me this year to enact a patients' bill
of rights--(applause)--to give uninsured workers credits to help buy
health coverage--(applause)--to approve an historic increase in the
spending for veterans' health--(applause)--and to give seniors a sound
and modern Medicare system that includes coverage for prescription
drugs. (Applause.)

A good job should lead to security in retirement. I ask Congress to
enact new safeguards for 401K and pension plans. (Applause.) Employees
who have worked hard and saved all their lives should not have to risk
losing everything if their company fails. (Applause.) Through stricter
accounting standards and tougher disclosure requirements, corporate
America must be made more accountable to employees and shareholders and
held to the highest standards of conduct. (Applause.)

Retirement security also depends upon keeping the commitments of Social
Security, and we will. We must make Social Security financially stable
and allow personal retirement accounts for younger workers who choose
them. (Applause.)

Members, you and I will work together in the months ahead on other
issues: productive farm policy--(applause)--a cleaner
environment--(applause) --broader home ownership, especially among
minorities--(applause)--and ways to encourage the good work of charities
and faith-based groups. (Applause.) I ask you to join me on these
important domestic issues in the same spirit of cooperation we've
applied to our war against terrorism. (Applause.)

During these last few months, I've been humbled and privileged to see
the true character of this country in a time of testing. Our enemies
believed America was weak and materialistic, that we would splinter in
fear and selfishness. They were as wrong as they are evil. (Applause.)

The American people have responded magnificently, with courage and
compassion, strength and resolve. As I have met the heroes, hugged the
families, and looked into the tired faces of rescuers, I have stood in
awe of the American people.

And I hope you will join me--I hope you will join me in expressing
thanks to one American for the strength and calm and comfort she brings
to our nation in crisis, our First Lady, Laura Bush. (Applause.)

None of us would ever wish the evil that was done on September the 11th.
Yet after America was attacked, it was as if our entire country looked
into a mirror and saw our better selves. We were reminded that we are
citizens, with obligations to each other, to our country, and to
history. We began to think less of the goods we can accumulate, and more
about the good we can do.

For too long our culture has said, "If it feels good, do it." Now
America is embracing a new ethic and a new creed: "Let's roll."
(Applause.) In the sacrifice of soldiers, the fierce brotherhood of
firefighters, and the bravery and generosity of ordinary citizens, we
have glimpsed what a new culture of responsibility could look like. We
want to be a nation that serves goals larger than self. We've been
offered a unique opportunity, and we must not let this moment pass.
(Applause.)

My call tonight is for every American to commit at least two
years--4,000 hours over the rest of your lifetime--to the service of
your neighbors and your nation. (Applause.) Many are already serving,
and I thank you. If you aren't sure how to help, I've got a good place
to start. To sustain and extend the best that has emerged in America, I
invite you to join the new USA Freedom Corps. The Freedom Corps will
focus on three areas of need: responding in case of crisis at home;
rebuilding our communities; and extending American compassion throughout
the world.

One purpose of the USA Freedom Corps will be homeland security. America
needs retired doctors and nurses who can be mobilized in major
emergencies; volunteers to help police and fire departments;
transportation and utility workers well-trained in spotting danger.

Our country also needs citizens working to rebuild our communities. We
need mentors to love children, especially children whose parents are in
prison. And we need more talented teachers in troubled schools. USA
Freedom Corps will expand and improve the good efforts of AmeriCorps and
Senior Corps to recruit more than 200,000 new volunteers.

And America needs citizens to extend the compassion of our country to
every part of the world. So we will renew the promise of the Peace
Corps, double its volunteers over the next five years--(applause)--and
ask it to join a new effort to encourage development and education and
opportunity in the Islamic world. (Applause.)

This time of adversity offers a unique moment of opportunity--a moment
we must seize to change our culture. Through the gathering momentum of
millions of acts of service and decency and kindness, I know we can
overcome evil with greater good. (Applause.) And we have a great
opportunity during this time of war to lead the world toward the values
that will bring lasting peace.

All fathers and mothers, in all societies, want their children to be
educated, and live free from poverty and violence. No people on Earth
yearn to be oppressed, or aspire to servitude, or eagerly await the
midnight knock of the secret police.

If anyone doubts this, let them look to Afghanistan, where the Islamic
"street" greeted the fall of tyranny with song and celebration. Let the
skeptics look to Islam's own rich history, with its centuries of
learning, and tolerance and progress. America will lead by defending
liberty and justice because they are right and true and unchanging for
all people everywhere. (Applause.)

No nation owns these aspirations, and no nation is exempt from them. We
have no intention of imposing our culture. But America will always stand
firm for the non-negotiable demands of human dignity: the rule of law;
limits on the power of the state; respect for women; private property;
free speech; equal justice; and religious tolerance. (Applause.)

America will take the side of brave men and women who advocate these
values around the world, including the Islamic world, because we have a
greater objective than eliminating threats and containing resentment. We
seek a just and peaceful world beyond the war on terror.

In this moment of opportunity, a common danger is erasing old rivalries.
America is working with Russia and China and India, in ways we have
never before, to achieve peace and prosperity. In every region, free
markets and free trade and free societies are proving their power to
lift lives. Together with friends and allies from Europe to Asia, and
Africa to Latin America, we will demonstrate that the forces of terror
cannot stop the momentum of freedom. (Applause.)

The last time I spoke here, I expressed the hope that life would return
to normal. In some ways, it has. In others, it never will. Those of us
who have lived through these challenging times have been changed by
them. We've come to know truths that we will never question: evil is
real, and it must be opposed. (Applause.) Beyond all differences of race
or creed, we are one country, mourning together and facing danger
together. Deep in the American character, there is honor, and it is
stronger than cynicism. And many have discovered again that even in
tragedy--especially in tragedy--God is near. (Applause.)

In a single instant, we realized that this will be a decisive decade in
the history of liberty, that we've been called to a unique role in human
events. Rarely has the world faced a choice more clear or consequential.

Our enemies send other people's children on missions of suicide and
murder. They embrace tyranny and death as a cause and a creed. We stand
for a different choice, made long ago, on the day of our founding. We
affirm it again today. We choose freedom and the dignity of every life.
(Applause.)

Steadfast in our purpose, we now press on. We have known freedom's
price. We have shown freedom's power. And in this great conflict, my
fellow Americans, we will see freedom's victory.

Thank you all. May God bless. (Applause.)

***

State of the Union Address
George W. Bush
January 28, 2003

Mr. Speaker, Vice President Cheney, Members of Congress, distinguished
guests, fellow citizens:

Every year, by law and by custom, we meet here to consider the state of
the union. This year, we gather in this chamber deeply aware of decisive
days that lie ahead.

You and I serve our country in a time of great consequence. During this
session of Congress, we have the duty to reform domestic programs vital
to our country...and we have the opportunity to save millions of lives
abroad from a terrible disease. We will work for a prosperity that is
broadly shared...and we will answer every danger and every enemy that
threatens the American people.

In all these days of promise and days of reckoning, we can be confident.
In a whirlwind of change, and hope, and peril, our faith is sure, our
resolve is firm, and our union is strong.

This country has many challenges. We will not deny, we will not ignore,
we will not pass along our problems to other Congresses, other
presidents, and other generations. We will confront them with focus, and
clarity, and courage.

During the last two years, we have seen what can be accomplished when we
work together. To lift the standards of our public schools, we achieved
historic education reform - which must now be carried out in every
school, and every classroom, so that every child in America can read,
and learn, and succeed in life. To protect our country, we reorganized
our government and created the Department of Homeland Security - which
is mobilizing against the threats of a new era. To bring our economy out
of recession, we delivered the largest tax relief in a generation. To
insist on integrity in American business, we passed tough reforms, and
we are holding corporate criminals to account.

Some might call this a good record. I call it a good start. Tonight I
ask the House and Senate to join me in the next bold steps to serve our
fellow citizens.

Our first goal is clear: We must have an economy that grows fast enough
to employ every man and woman who seeks a job.

After recession, terrorist attacks, corporate scandals, and stock market
declines, our economy is recovering - yet it is not growing fast enough,
or strongly enough. With unemployment rising, our Nation needs more
small businesses to open, more companies to invest and expand, more
employers to put up the sign that says, "Help Wanted."

Jobs are created when the economy grows; the economy grows when
Americans have more money to spend and invest; and the best, fairest way
to make sure Americans have that money is not to tax it away in the
first place.

I am proposing that all the income tax reductions set for 2004 and 2006
be made permanent and effective this year. And under my plan, as soon as
I have signed the bill, this extra money will start showing up in
workers' paychecks. Instead of gradually reducing the marriage penalty,
we should do it now. Instead of slowly raising the child credit to a
thousand dollars, we should send the checks to American families now.

This tax relief is for everyone who pays income taxes - and it will help
our economy immediately. Ninety-two million Americans will keep - this
year - an average of almost 1,100 dollars more of their own money. A
family of four with an income of 40,000 dollars would see their federal
income taxes fall from 1,178 dollars to 45 dollars per year. And our
plan will improve the bottom line for more than 23 million small
businesses.

You, the Congress, have already passed all these reductions, and
promised them for future years. If this tax relief is good for Americans
three, or five, or seven years from now, it is even better for Americans
today.

We also strengthen the economy by treating investors equally in our tax
laws. It is fair to tax a company's profits. It is not fair to again tax
the shareholder on the same profits. To boost investor confidence, and
to help the nearly 10 million seniors who receive dividend income, I ask
you to end the unfair double taxation of dividends.

Lower taxes and greater investment will help this economy expand. More
jobs mean more taxpayers - and higher revenues to our government. The
best way to address the deficit and move toward a balanced budget is to
encourage economic growth - and to show some spending discipline in
Washington, D.C. We must work together to fund only our most important
priorities. I will send you a budget that increases discretionary
spending by four percent next year - about as much as the average
family's income is expected to grow. And that is a good benchmark for
us: Federal spending should not rise any faster than the paychecks of
American families.

A growing economy, and a focus on essential priorities, will also be
crucial to the future of Social Security. As we continue to work
together to keep Social Security sound and reliable, we must offer
younger workers a chance to invest in retirement accounts that they will
control and they will own.

Our second goal is high quality, affordable health care for all
Americans.

The American system of medicine is a model of skill and innovation -
with a pace of discovery that is adding good years to our lives. Yet for
many people, medical care costs too much - and many have no coverage at
all. These problems will not be solved with a nationalized health care
system that dictates coverage and rations care. Instead, we must work
toward a system in which all Americans have a good insurance
policy...choose their own doctors..and seniors and low-income Americans
receive the help they need. Instead of bureaucrats, and trial lawyers,
and HMOs, we must put doctors, and nurses, and patients back in charge
of American medicine.

Health care reform must begin with Medicare, because Medicare is the
binding commitment of a caring society. We must renew that commitment by
giving seniors access to the preventive medicine and new drugs that are
transforming health care in America.

Seniors happy with the current Medicare system should be able to keep
their coverage just the way it is. And just like you, the members of
Congress, members of your staffs, and other federal employees, all
seniors should have the choice of a health care plan that provides
prescription drugs. My budget will commit an additional 400 billion
dollars over the next decade to reform and strengthen Medicare. Leaders
of both political parties have talked for years about strengthening
Medicare - I urge the members of this new Congress to act this year.

To improve our health care system, we must address one of the prime
causes of higher costs - the constant threat that physicians and
hospitals will be unfairly sued. Because of excessive litigation,
everybody pays more for health care - and many parts of America are
losing fine doctors. No one has ever been healed by a frivolous lawsuit
- and I urge the Congress to pass medical liability reform.

Our third goal is to promote energy independence for our country, while
dramatically improving the environment.

I have sent you a comprehensive energy plan to promote energy efficiency
and conservation, to develop cleaner technology, and to produce more
energy at home. I have sent you Clear Skies legislation that mandates a
70 percent cut in air pollution from power plants over the next 15
years. I have sent you a Healthy Forests Initiative, to help prevent the
catastrophic fires that devastate communities, kill wildlife, and burn
away millions of acres of treasured forest.

I urge you to pass these measures, for the good of both our environment
and our economy. Even more, I ask you to take a crucial step, and
protect our environment in ways that generations before us could not
have imagined. In this century, the greatest environmental progress will
come about, not through endless lawsuits or command and control
regulations, but through technology and innovation. Tonight I am
proposing 1.2 billion dollars in research funding so that America can
lead the world in developing clean, hydrogen-powered automobiles.

A simple chemical reaction between hydrogen and oxygen generates energy,
which can be used to power a car - producing only water, not exhaust
fumes. With a new national commitment, our scientists and engineers will
overcome obstacles to taking these cars from laboratory to showroom - so
that the first car driven by a child born today could be powered by
hydrogen, and pollution-free. Join me in this important innovation - to
make our air significantly cleaner, and our country much less dependent
on foreign sources of energy.

Our fourth goal is to apply the compassion of America to the deepest
problems of America. For so many in our country - the homeless, the
fatherless, the addicted - the need is great. Yet there is power -
wonder-working power - in the goodness, and idealism, and faith of the
American people.

Americans are doing the work of compassion every day - visiting
prisoners, providing shelter to battered women, bringing companionship
to lonely seniors. These good works deserve our praise...they deserve
our personal support...and, when appropriate, they deserve the
assistance of our government. I urge you to pass both my faith-based
initiative and the Citizen Service Act - to encourage acts of compassion
that can transform America, one heart and one soul at a time.

Last year, I called on my fellow citizens to participate in USA Freedom
Corps, which is enlisting tens of thousands of new volunteers across
America. Tonight I ask Congress and the American people to focus the
spirit of service and the resources of government on the needs of some
of our most vulnerable citizens - boys and girls trying to grow up
without guidance and attention...and children who have to go through a
prison gate to be hugged by their mom or dad. I propose a 450 million
dollar initiative to bring mentors to more than a million disadvantaged
junior high students and children of prisoners. Government will support
the training and recruiting of mentors, yet it is the men and women of
America who will fill the need. One mentor, one person, can change a
life forever - and I urge you to be that one person.

Another cause of hopelessness is addiction to drugs. Addiction crowds
out friendship, ambition, moral conviction, and reduces all the richness
of life to a single destructive desire. As a government, we are fighting
illegal drugs by cutting off supplies, and reducing demand through
anti-drug education programs. Yet for those already addicted, the fight
against drugs is a fight for their own lives.

Too many Americans in search of treatment cannot get it. So tonight I
propose a new 600 million dollar program to help an additional 300,000
Americans receive treatment over the next three years.

Our Nation is blessed with recovery programs that do amazing work. One
of them is found at the Healing Place Church in Baton Rouge, Louisiana.
A man in the program said, "God does miracles in people .s lives, and
you never think it could be you." Tonight, let us bring to all Americans
who struggle with drug addiction this message of hope: The miracle of
recovery is possible, and it could be you.

By caring for children who need mentors, and for addicted men and women
who need treatment, we are building a more welcoming society - a culture
that values every life. And in this work we must not overlook the
weakest among us. I ask you to protect infants at the very hour of
birth, and end the practice of partial-birth abortion. And because no
human life should be started or ended as the object of an experiment, I
ask you to set a high standard for humanity and pass a law against all
human cloning.

The qualities of courage and compassion that we strive for in America
also determine our conduct abroad. The American flag stands for more
than our power and our interests. Our Founders dedicated this country to
the cause of human dignity - the rights of every person and the
possibilities of every life. This conviction leads us into the world to
help the afflicted, and defend the peace, and confound the designs of
evil men. In Afghanistan, we helped to liberate an oppressed
people...and we will continue helping them secure their country, rebuild
their society, and educate all their children - boys and girls. In the
Middle East, we will continue to seek peace between a secure Israel and
a democratic Palestine. Across the earth, America is feeding the hungry;
more than 60 percent of international food aid comes as a gift from the
people of the United States.

As our Nation moves troops and builds alliances to make our world safer,
we must also remember our calling, as a blessed country, to make this
world better. Today, on the continent of Africa, nearly 30 million
people have the AIDS virus - including three million children under the
age of 15. There are whole countries in Africa where more than one-third
of the adult population carries the infection. More than four million
require immediate drug treatment. Yet across that continent, only 50,000
AIDS victims - only 50,000 - are receiving the medicine they need.

Because the AIDS diagnosis is considered a death sentence, many do not
seek treatment. Almost all who do are turned away. A doctor in rural
South Africa describes his frustration. He says, "We have no
medicines..many hospitals tell [people], 'You've got AIDS. We can't help
you. Go home and die.' "

In an age of miraculous medicines, no person should have to hear those
words. AIDS can be prevented. Anti-retroviral drugs can extend life for
many years. And the cost of those drugs has dropped from 12,000 dollars
a year to under 300 dollars a year - which places a tremendous
possibility within our grasp.

Ladies and gentlemen, seldom has history offered a greater opportunity
to do so much for so many. We have confronted, and will continue to
confront, HIV/AIDS in our own country. And to meet a severe and urgent
crisis abroad, tonight I propose the Emergency Plan for AIDS Relief - a
work of mercy beyond all current international efforts to help the
people of Africa. This comprehensive plan will prevent seven million new
AIDS infections...treat at least two million people with life-extending
drugs...and provide humane care for millions of people suffering from
AIDS, and for children orphaned by AIDS. I ask the Congress to commit 15
billion dollars over the next five years, including nearly ten billion
dollars in new money, to turn the tide against AIDS in the most
afflicted nations of Africa and the Caribbean.

This Nation can lead the world in sparing innocent people from a plague
of nature. And this Nation is leading the world in confronting and
defeating the man-made evil of international terrorism.

There are days when the American people do not hear news about the war
on terror. There is never a day when I do not learn of another threat,
or receive reports of operations in progress, or give an order in this
global war against a scattered network of killers. The war goes on, and
we are winning.

To date we have arrested, or otherwise dealt with, many key commanders
of al-Qaida. They include a man who directed logistics and funding for
the September 11th attacks...the chief of al-Qaida operations in the
Persian Gulf who planned the bombings of our embassies in East Africa
and the USS Cole...an al-Qaida operations chief from Southeast Asia...a
former director of al-Qaida's training camps in Afghanistan...a key
al-Qaida operative in Europe..and a major al-Qaida leader in Yemen. All
told, more than 3,000 suspected terrorists have been arrested in many
countries. And many others have met a different fate. They are no longer
a problem for the United States and our friends and allies.

We are working closely with other nations to prevent further attacks.
America and coalition countries have uncovered and stopped terrorist
conspiracies targeting the American embassy in Yemen...the American
embassy in Singapore...a Saudi military base...and ships in the straits
of Hormuz, and the straits of Gibraltar. We have broken al-Qaida cells
in Hamburg, and Milan, and Madrid, and London, and Paris - as well as
Buffalo, New York.

We have the terrorists on the run, and we are keeping them on the run.
One by one, the terrorists are learning the meaning of American justice.

As we fight this war, we will remember where it began - here, in our own
country. This government is taking unprecedented measures to protect our
people and defend our homeland. We have intensified security at the
borders and ports of entry...posted more than 50,000 newly trained
federal screeners in airports...begun inoculating troops and first
responders against smallpox...and are deploying the Nation's first early
warning network of sensors to detect biological attack. And this year,
for the first time, we are beginning to field a defense to protect this
Nation against ballistic missiles.

I thank the Congress for supporting these measures. I ask you tonight to
add to our future security with a major research and production effort
to guard our people against bio-terrorism, called Project Bioshield. The
budget I send you will propose almost six billion dollars to quickly
make available effective vaccines and treatments against agents like
anthrax, botulinum toxin, Ebola, and plague. We must assume that our
enemies would use these diseases as weapons, and we must act before the
dangers are upon us.

Since September 11th, our intelligence and law enforcement agencies have
worked more closely than ever to track and disrupt the terrorists. The
FBI is improving its ability to analyze intelligence, and transforming
itself to meet new threats. And tonight, I am instructing the leaders of
the FBI, Central Intelligence, Homeland Security, and the Department of
Defense to develop a Terrorist Threat Integration Center, to merge and
analyze all threat information in a single location. Our government must
have the very best information possible, and we will use it to make sure
the right people are in the right places to protect our citizens.

Our war against terror is a contest of will, in which perseverance is
power. In the ruins of two towers, at the western wall of the Pentagon,
on a field in Pennsylvania, this Nation made a pledge, and we renew that
pledge tonight: Whatever the duration of this struggle, and whatever the
difficulties, we will not permit the triumph of violence in the affairs
of men...free people will set the course of history.

Today, the gravest danger in the war on terror...the gravest danger
facing America and the world...is outlaw regimes that seek and possess
nuclear, chemical, and biological weapons. These regimes could use such
weapons for blackmail, terror, and mass murder. They could also give or
sell those weapons to their terrorist allies, who would use them without
the least hesitation.

This threat is new; America's duty is familiar. Throughout the 20th
century, small groups of men seized control of great nations...built
armies and arsenals..and set out to dominate the weak and intimidate the
world. In each case, their ambitions of cruelty and murder had no limit.
In each case, the ambitions of Hitlerism, militarism, and communism were
defeated by the will of free peoples, by the strength of great
alliances, and by the might of the United States of America. Now, in
this century, the ideology of power and domination has appeared again,
and seeks to gain the ultimate weapons of terror. Once again, this
Nation and our friends are all that stand between a world at peace, and
a world of chaos and constant alarm. Once again, we are called to defend
the safety of our people, and the hopes of all mankind. And we accept
this responsibility.

America is making a broad and determined effort to confront these
dangers. We have called on the United Nations to fulfill its charter,
and stand by its demand that Iraq disarm. We are strongly supporting the
International Atomic Energy Agency in its mission to track and control
nuclear materials around the world. We are working with other
governments to secure nuclear materials in the former Soviet Union, and
to strengthen global treaties banning the production and shipment of
missile technologies and weapons of mass destruction.

In all of these efforts, however, America's purpose is more than to
follow a process - it is to achieve a result: the end of terrible
threats to the civilized world. All free nations have a stake in
preventing sudden and catastrophic attack. We are asking them to join
us, and many are doing so. Yet the course of this Nation does not depend
on the decisions of others. Whatever action is required, whenever action
is necessary, I will defend the freedom and security of the American
people.

Different threats require different strategies. In Iran, we continue to
see a government that represses its people, pursues weapons of mass
destruction, and supports terror. We also see Iranian citizens risking
intimidation and death as they speak out for liberty, human rights, and
democracy. Iranians, like all people, have a right to choose their own
government, and determine their own destiny - and the United States
supports their aspirations to live in freedom.

On the Korean peninsula, an oppressive regime rules a people living in
fear and starvation. Throughout the 1990s, the United States relied on a
negotiated framework to keep North Korea from gaining nuclear weapons.
We now know that the regime was deceiving the world, and developing
those weapons all along. And today the North Korean regime is using its
nuclear program to incite fear and seek concessions. America and the
world will not be blackmailed. America is working with the countries of
the region - South Korea, Japan, China, and Russia - to find a peaceful
solution, and to show the North Korean government that nuclear weapons
will bring only isolation, economic stagnation, and continued hardship.
The North Korean regime will find respect in the world, and revival for
its people, only when it turns away from its nuclear ambitions.

Our Nation and the world must learn the lessons of the Korean peninsula,
and not allow an even greater threat to rise up in Iraq. A brutal
dictator, with a history of reckless aggression..with ties to
terrorism... with great potential wealth...will not be permitted to
dominate a vital region and threaten the United States.

Twelve years ago, Saddam Hussein faced the prospect of being the last
casualty in a war he had started and lost. To spare himself, he agreed
to disarm of all weapons of mass destruction. For the next 12 years, he
systematically violated that agreement. He pursued chemical, biological,
and nuclear weapons even while inspectors were in his country. Nothing
to date has restrained him from his pursuit of these weapons - not
economic sanctions, not isolation from the civilized world, not even
cruise missile strikes on his military facilities. Almost three months
ago, the United Nations Security Council gave Saddam Hussein his final
chance to disarm. He has shown instead his utter contempt for the United
Nations, and for the opinion of the world.

The 108 UN weapons inspectors were not sent to conduct a scavenger hunt
for hidden materials across a country the size of California. The job of
the inspectors is to verify that Iraq's regime is disarming. It is up to
Iraq to show exactly where it is hiding its banned weapons...lay those
weapons out for the world to see...and destroy them as directed. Nothing
like this has happened.

The United Nations concluded in 1999 that Saddam Hussein had biological
weapons materials sufficient to produce over 25,000 liters of anthrax -
enough doses to kill several million people. He has not accounted for
that material. He has given no evidence that he has destroyed it.

The United Nations concluded that Saddam Hussein had materials
sufficient to produce more than 38,000 liters of botulinum toxin -
enough to subject millions of people to death by respiratory failure. He
has not accounted for that material. He has given no evidence that he
has destroyed it.

Our intelligence officials estimate that Saddam Hussein had the
materials to produce as much as 500 tons of sarin, mustard, and VX nerve
agent. In such quantities, these chemical agents also could kill untold
thousands. He has not accounted for these materials. He has given no
evidence that he has destroyed them.

U.S. intelligence indicates that Saddam Hussein had upwards of 30,000
munitions capable of delivering chemical agents. Inspectors recently
turned up 16 of them, despite Iraq's recent declaration denying their
existence. Saddam Hussein has not accounted for the remaining 29,984 of
these prohibited munitions. He has given no evidence that he has
destroyed them.

From three Iraqi defectors we know that Iraq, in the late 1990s, had
several mobile biological weapons labs. These are designed to produce
germ warfare agents, and can be moved from place to place to evade
inspectors. Saddam Hussein has not disclosed these facilities. He has
given no evidence that he has destroyed them.

The International Atomic Energy Agency confirmed in the 1990s that
Saddam Hussein had an advanced nuclear weapons development program, had
a design for a nuclear weapon, and was working on five different methods
of enriching uranium for a bomb. The British government has learned that
Saddam Hussein recently sought significant quantities of uranium from
Africa. Our intelligence sources tell us that he has attempted to
purchase high strength aluminum tubes suitable for nuclear weapons
production. Saddam Hussein has not credibly explained these activities.
He clearly has much to hide.

The dictator of Iraq is not disarming. To the contrary, he is deceiving.
From intelligence sources, we know, for instance, that thousands of
Iraqi security personnel are at work hiding documents and materials from
the UN inspectors - sanitizing inspection sites, and monitoring the
inspectors themselves. Iraqi officials accompany the inspectors in order
to intimidate witnesses. Iraq is blocking U-2 surveillance flights
requested by the United Nations. Iraqi intelligence officers are posing
as the scientists inspectors are supposed to interview. Real scientists
have been coached by Iraqi officials on what to say. And intelligence
sources indicate that Saddam Hussein has ordered that scientists who
cooperate with UN inspectors in disarming Iraq will be killed, along
with their families.

Year after year, Saddam Hussein has gone to elaborate lengths, spent
enormous sums, taken great risks, to build and keep weapons of mass
destruction - but why? The only possible explanation, the only possible
use he could have for those weapons, is to dominate, intimidate, or
attack. With nuclear arms or a full arsenal of chemical and biological
weapons, Saddam Hussein could resume his ambitions of conquest in the
Middle East, and create deadly havoc in the region. And this Congress
and the American people must recognize another threat. Evidence from
intelligence sources, secret communications, and statements by people
now in custody, reveal that Saddam Hussein aids and protects terrorists,
including members of al-Qaida. Secretly, and without fingerprints, he
could provide one of his hidden weapons to terrorists, or help them
develop their own.

Before September 11, 2001, many in the world believed that Saddam
Hussein could be contained. But chemical agents and lethal viruses and
shadowy terrorist networks are not easily contained. Imagine those 19
hijackers with other weapons, and other plans - this time armed by
Saddam Hussein. It would take just one vial, one canister, one crate
slipped into this country to bring a day of horror like none we have
ever known. We will do everything in our power to make sure that day
never comes.

Some have said we must not act until the threat is imminent. Since when
have terrorists and tyrants announced their intentions, politely putting
us on notice before they strike? If this threat is permitted to fully
and suddenly emerge, all actions, all words, and all recriminations
would come too late. Trusting in the sanity and restraint of Saddam
Hussein is not a strategy, and it is not an option.

This dictator, who is assembling the world's most dangerous weapons, has
already used them on whole villages - leaving thousands of his own
citizens dead, blind, or disfigured. Iraqi refugees tell us how forced
confessions are obtained - by torturing children while their parents are
made to watch. International human rights groups have catalogued other
methods used in the torture chambers of Iraq: electric shock, burning
with hot irons, dripping acid on the skin, mutilation with electric
drills, cutting out tongues, and rape.

If this is not evil, then evil has no meaning. And tonight I have a
message for the brave and oppressed people of Iraq: Your enemy is not
surrounding your country - your enemy is ruling your country. And the
day he and his regime are removed from power will be the day of your
liberation.

The world has waited 12 years for Iraq to disarm. America will not
accept a serious and mounting threat to our country, our friends, and
our allies. The United States will ask the UN Security Council to
convene on February 5th to consider the facts of Iraq's ongoing defiance
of the world. Secretary of State Powell will present information and
intelligence about Iraq's illegal weapons programs; its attempts to hide
those weapons from inspectors; and its links to terrorist groups. We
will consult, but let there be no misunderstanding: If Saddam Hussein
does not fully disarm, for the safety of our people, and for the peace
of the world, we will lead a coalition to disarm him.

Tonight I also have a message for the men and women who will keep the
peace, members of the American Armed Forces: Many of you are assembling
in and near the Middle East, and some crucial hours may lie ahead. In
those hours, the success of our cause will depend on you. Your training
has prepared you. Your honor will guide you. You believe in America, and
America believes in you.

Sending Americans into battle is the most profound decision a president
can make. The technologies of war have changed. The risks and suffering
of war have not. For the brave Americans who bear the risk, no victory
is free from sorrow. This Nation fights reluctantly, because we know the
cost, and we dread the days of mourning that always come.

We seek peace. We strive for peace. And sometimes peace must be
defended. A future lived at the mercy of terrible threats is no peace at
all. If war is forced upon us, we will fight in a just cause and by just
means - sparing, in every way we can, the innocent. And if war is forced
upon us, we will fight with the full force and might of the United
States military - and we will prevail. And as we and our coalition
partners are doing in Afghanistan, we will bring to the Iraqi people
food, and medicines, and supplies...and freedom.

Many challenges, abroad and at home, have arrived in a single season. In
two years, America has gone from a sense of invulnerability to an
awareness of peril...from bitter division in small matters to calm unity
in great causes. And we go forward with confidence, because this call of
history has come to the right country.

Americans are a resolute people, who have risen to every test of our
time. Adversity has revealed the character of our country, to the world,
and to ourselves.

America is a strong Nation, and honorable in the use of our strength. We
exercise power without conquest, and sacrifice for the liberty of
strangers.


Americans are a free people, who know that freedom is the right of every
person and the future of every nation. The liberty we prize is not
America's gift to the world, it is God;s gift to humanity.

We Americans have faith in ourselves - but not in ourselves alone. We do
not claim to know all the ways of Providence, yet we can trust in them,
placing our confidence in the loving God behind all of life, and all of
history.

May He guide us now, and may God continue to bless the United States of
America.

Thank you.

***

State of the Union Address
George W. Bush
January 20, 2004

Mr. Speaker, Vice President Cheney, members of Congress, distinguished
guests, and fellow citizens: America this evening is a nation called to
great responsibilities. And we are rising to meet them.

As we gather tonight, hundreds of thousands of American servicemen and
women are deployed across the world in the war on terror. By bringing
hope to the oppressed, and delivering justice to the violent, they are
making America more secure. (Applause.)

Each day, law enforcement personnel and intelligence officers are
tracking terrorist threats; analysts are examining airline passenger
lists; the men and women of our new Homeland Security Department are
patrolling our coasts and borders. And their vigilance is protecting
America. (Applause.)

Americans are proving once again to be the hardest working people in the
world. The American economy is growing stronger. The tax relief you
passed is working. (Applause.)

Tonight, members of Congress can take pride in the great works of
compassion and reform that skeptics had thought impossible. You're
raising the standards for our public schools, and you are giving our
senior citizens prescription drug coverage under Medicare. (Applause.)

We have faced serious challenges together, and now we face a choice: We
can go forward with confidence and resolve, or we can turn back to the
dangerous illusion that terrorists are not plotting and outlaw regimes
are no threat to us. We can press on with economic growth, and reforms
in education and Medicare, or we can turn back to old policies and old
divisions.

We've not come all this way -- through tragedy, and trial and war --
only to falter and leave our work unfinished. Americans are rising to
the tasks of history, and they expect the same from us. In their
efforts, their enterprise, and their character, the American people are
showing that the state of our union is confident and strong. (Applause.)

Our greatest responsibility is the active defense of the American
people. Twenty-eight months have passed since September 11th, 2001 --
over two years without an attack on American soil. And it is tempting to
believe that the danger is behind us. That hope is understandable,
comforting -- and false. The killing has continued in Bali, Jakarta,
Casablanca, Riyadh, Mombasa, Jerusalem, Istanbul, and Baghdad. The
terrorists continue to plot against America and the civilized world. And
by our will and courage, this danger will be defeated. (Applause.)

Inside the United States, where the war began, we must continue to give
our homeland security and law enforcement personnel every tool they need
to defend us. And one of those essential tools is the Patriot Act, which
allows federal law enforcement to better share information, to track
terrorists, to disrupt their cells, and to seize their assets. For
years, we have used similar provisions to catch embezzlers and drug
traffickers. If these methods are good for hunting criminals, they are
even more important for hunting terrorists. (Applause.)

Key provisions of the Patriot Act are set to expire next year.
(Applause.) The terrorist threat will not expire on that schedule.
(Applause.) Our law enforcement needs this vital legislation to protect
our citizens. You need to renew the Patriot Act. (Applause.)

America is on the offensive against the terrorists who started this war.
Last March, Khalid Shaikh Mohammed, a mastermind of September the 11th,
awoke to find himself in the custody of U.S. and Pakistani authorities.
Last August the 11th brought the capture of the terrorist Hambali, who
was a key player in the attack in Indonesia that killed over 200 people.
We're tracking al Qaeda around the world, and nearly two-thirds of their
known leaders have now been captured or killed. Thousands of very
skilled and determined military personnel are on the manhunt, going
after the remaining killers who hide in cities and caves, and one by
one, we will bring these terrorists to justice. (Applause.)

As part of the offensive against terror, we are also confronting the
regimes that harbor and support terrorists, and could supply them with
nuclear, chemical or biological weapons. The United States and our
allies are determined: We refuse to live in the shadow of this ultimate
danger. (Applause.)

The first to see our determination were the Taliban, who made
Afghanistan the primary training base of al Qaeda killers. As of this
month, that country has a new constitution, guaranteeing free elections
and full participation by women. Businesses are opening, health care
centers are being established, and the boys and girls of Afghanistan are
back in school. With the help from the new Afghan army, our coalition is
leading aggressive raids against the surviving members of the Taliban
and al Qaeda. The men and women of Afghanistan are building a nation
that is free and proud and fighting terror -- and America is honored to
be their friend. (Applause.)

Since we last met in this chamber, combat forces of the United States,
Great Britain, Australia, Poland and other countries enforced the
demands of the United Nations, ended the rule of Saddam Hussein, and the
people of Iraq are free. (Applause.)

Having broken the Baathist regime, we face a remnant of violent Saddam
supporters. Men who ran away from our troops in battle are now dispersed
and attack from the shadows. These killers, joined by foreign
terrorists, are a serious, continuing danger. Yet we're making progress
against them. The once all-powerful ruler of Iraq was found in a hole,
and now sits in a prison cell. (Applause.) Of the top 55 officials of
the former regime, we have captured or killed 45. Our forces are on the
offensive, leading over 1,600 patrols a day and conducting an average of
180 raids a week. We are dealing with these thugs in Iraq, just as
surely as we dealt with Saddam Hussein's evil regime. (Applause.)

The work of building a new Iraq is hard, and it is right. And America
has always been willing to do what it takes for what is right. Last
January, Iraq's only law was the whim of one brutal man. Today our
coalition is working with the Iraqi Governing Council to draft a basic
law, with a bill of rights. We're working with Iraqis and the United
Nations to prepare for a transition to full Iraqi sovereignty by the end
of June.

As democracy takes hold in Iraq, the enemies of freedom will do all in
their power to spread violence and fear. They are trying to shake the
will of our country and our friends, but the United States of America
will never be intimidated by thugs and assassins. (Applause.) The
killers will fail, and the Iraqi people will live in freedom.
(Applause.)

Month by month, Iraqis are assuming more responsibility for their own
security and their own future. And tonight we are honored to welcome one
of Iraq's most respected leaders: the current President of the Iraqi
Governing Council, Adnan Pachachi.

Sir, America stands with you and the Iraqi people as you build a free
and peaceful nation. (Applause.)

Because of American leadership and resolve, the world is changing for
the better. Last month, the leader of Libya voluntarily pledged to
disclose and dismantle all of his regime's weapons of mass destruction
programs, including a uranium enrichment project for nuclear weapons.
Colonel Qadhafi correctly judged that his country would be better off
and far more secure without weapons of mass murder. (Applause.)

Nine months of intense negotiations involving the United States and
Great Britain succeeded with Libya, while 12 years of diplomacy with
Iraq did not. And one reason is clear: For diplomacy to be effective,
words must be credible, and no one can now doubt the word of America.
(Applause.)

Different threats require different strategies. Along with nations in
the region, we're insisting that North Korea eliminate its nuclear
program. America and the international community are demanding that Iran
meet its commitments and not develop nuclear weapons. America is
committed to keeping the world's most dangerous weapons out of the hands
of the most dangerous regimes. (Applause.)

When I came to this rostrum on September the 20th, 2001, I brought the
police shield of a fallen officer, my reminder of lives that ended, and
a task that does not end. I gave to you and to all Americans my complete
commitment to securing our country and defeating our enemies. And this
pledge, given by one, has been kept by many.

You in the Congress have provided the resources for our defense, and
cast the difficult votes of war and peace. Our closest allies have been
unwavering. America's intelligence personnel and diplomats have been
skilled and tireless. And the men and women of the American military --
they have taken the hardest duty. We've seen their skill and their
courage in armored charges and midnight raids, and lonely hours on
faithful watch. We have seen the joy when they return, and felt the
sorrow when one is lost. I've had the honor of meeting our servicemen
and women at many posts, from the deck of a carrier in the Pacific to a
mess hall in Baghdad.

Many of our troops are listening tonight. And I want you and your
families to know: America is proud of you. And my administration, and
this Congress, will give you the resources you need to fight and win the
war on terror. (Applause.)

I know that some people question if America is really in a war at all.
They view terrorism more as a crime, a problem to be solved mainly with
law enforcement and indictments. After the World Trade Center was first
attacked in 1993, some of the guilty were indicted and tried and
convicted, and sent to prison. But the matter was not settled. The
terrorists were still training and plotting in other nations, and
drawing up more ambitious plans. After the chaos and carnage of
September the 11th, it is not enough to serve our enemies with legal
papers. The terrorists and their supporters declared war on the United
States, and war is what they got. (Applause.)

Some in this chamber, and in our country, did not support the liberation
of Iraq. Objections to war often come from principled motives. But let
us be candid about the consequences of leaving Saddam Hussein in power.
We're seeking all the facts. Already, the Kay Report identified dozens
of weapons of mass destruction-related program activities and
significant amounts of equipment that Iraq concealed from the United
Nations. Had we failed to act, the dictatator's weapons of mass
destruction programs would continue to this day. Had we failed to act,
Security Council resolutions on Iraq would have been revealed as empty
threats, weakening the United Nations and encouraging defiance by
dictators around the world. Iraq's torture chambers would still be
filled with victims, terrified and innocent. The killing fields of Iraq
-- where hundreds of thousands of men and women and children vanished
into the sands -- would still be known only to the killers. For all who
love freedom and peace, the world without Saddam Hussein's regime is a
better and safer place. (Applause.)

Some critics have said our duties in Iraq must be internationalized.
This particular criticism is hard to explain to our partners in Britain,
Australia, Japan, South Korea, the Philippines, Thailand, Italy, Spain,
Poland, Denmark, Hungary, Bulgaria, Ukraine, Romania, the Netherlands --
(applause) -- Norway, El Salvador, and the 17 other countries that have
committed troops to Iraq. (Applause.) As we debate at home, we must
never ignore the vital contributions of our international partners, or
dismiss their sacrifices.

From the beginning, America has sought international support for our
operations in Afghanistan and Iraq, and we have gained much support.
There is a difference, however, between leading a coalition of many
nations, and submitting to the objections of a few. America will never
seek a permission slip to defend the security of our country.
(Applause.)

We also hear doubts that democracy is a realistic goal for the greater
Middle East, where freedom is rare. Yet it is mistaken, and
condescending, to assume that whole cultures and great religions are
incompatible with liberty and self-government. I believe that God has
planted in every human heart the desire to live in freedom. And even
when that desire is crushed by tyranny for decades, it will rise again.
(Applause.)

As long as the Middle East remains a place of tyranny and despair and
anger, it will continue to produce men and movements that threaten the
safety of America and our friends. So America is pursuing a forward
strategy of freedom in the greater Middle East. We will challenge the
enemies of reform, confront the allies of terror, and expect a higher
standard from our friend. To cut through the barriers of hateful
propaganda, the Voice of America and other broadcast services are
expanding their programming in Arabic and Persian -- and soon, a new
television service will begin providing reliable news and information
across the region. I will send you a proposal to double the budget of
the National Endowment for Democracy, and to focus its new work on the
development of free elections, and free markets, free press, and free
labor unions in the Middle East. And above all, we will finish the
historic work of democracy in Afghanistan and Iraq, so those nations can
light the way for others, and help transform a troubled part of the
world. (Applause.)

America is a nation with a mission, and that mission comes from our most
basic beliefs. We have no desire to dominate, no ambitions of empire.
Our aim is a democratic peace -- a peace founded upon the dignity and
rights of every man and woman. America acts in this cause with friends
and allies at our side, yet we understand our special calling: This
great republic will lead the cause of freedom. (Applause.)

In the last three years, adversity has also revealed the fundamental
strengths of the American economy. We have come through recession, and
terrorist attack, and corporate scandals, and the uncertainties of war.
And because you acted to stimulate our economy with tax relief, this
economy is strong, and growing stronger. (Applause.)

You have doubled the child tax credit from $500 to $1,000, reduced the
marriage penalty, begun to phase out the death tax, reduced taxes on
capital gains and stock dividends, cut taxes on small businesses, and
you have lowered taxes for every American who pays income taxes.

Americans took those dollars and put them to work, driving this economy
forward. The pace of economic growth in the third quarter of 2003 was
the fastest in nearly 20 years; new home construction, the highest in
almost 20 years; home ownership rates, the highest ever. Manufacturing
activity is increasing. Inflation is low. Interest rates are low.
Exports are growing. Productivity is high, and jobs are on the rise.
(Applause.)

These numbers confirm that the American people are using their money far
better than government would have -- and you were right to return it.
(Applause.)

America's growing economy is also a changing economy. As technology
transforms the way almost every job is done, America becomes more
productive, and workers need new skills. Much of our job growth will be
found in high-skilled fields like health care and biotechnology. So we
must respond by helping more Americans gain the skills to find good jobs
in our new economy.

All skills begin with the basics of reading and math, which are supposed
to be learned in the early grades of our schools. Yet for too long, for
too many children, those skills were never mastered. By passing the No
Child Left Behind Act, you have made the expectation of literacy the law
of our country. We're providing more funding for our schools -- a
36-percent increase since 2001. We're requiring higher standards. We are
regularly testing every child on the fundamentals. We are reporting
results to parents, and making sure they have better options when
schools are not performing. We are making progress toward excellence for
every child in America. (Applause.)

But the status quo always has defenders. Some want to undermine the No
Child Left Behind Act by weakening standards and accountability. Yet the
results we require are really a matter of common sense: We expect third
graders to read and do math at the third grade level -- and that's not
asking too much. Testing is the only way to identify and help students
who are falling behind. This nation will not go back to the days of
simply shuffling children along from grade to grade without them
learning the basics. I refuse to give up on any child -- and the No
Child Left Behind Act is opening the door of opportunity to all of
America's children. (Applause.)

At the same time, we must ensure that older students and adults can gain
the skills they need to find work now. Many of the fastest growing
occupations require strong math and science preparation, and training
beyond the high school level. So tonight, I propose a series of measures
called Jobs for the 21st Century. This program will provide extra help
to middle and high school students who fall behind in reading and math,
expand advanced placement programs in low-income schools, invite math
and science professionals from the private sector to teach part-time in
our high schools. I propose larger Pell grants for students who prepare
for college with demanding courses in high school. (Applause.) I propose
increasing our support for America's fine community colleges, so they
can -- (applause.) I do so, so they can train workers for industries
that are creating the most new jobs. By all these actions, we'll help
more and more Americans to join in the growing prosperity of our
country. Job training is important, and so is job creation.

We must continue to pursue an aggressive, pro-growth economic agenda.
(Applause.) Congress has some unfinished business on the issue of taxes.
The tax reductions you passed are set to expire. Unless you act --
(applause) -- unless you act -- unless you act, the unfair tax on
marriage will go back up. Unless you act, millions of families will be
charged $300 more in federal taxes for every child. Unless you act,
small businesses will pay higher taxes. Unless you act, the death tax
will eventually come back to life. Unless you act, Americans face a tax
increase. What Congress has given, the Congress should not take away.
For the sake of job growth, the tax cuts you passed should be permanent.
(Applause.)

Our agenda for jobs and growth must help small business owners and
employees with relief from needless federal regulation, and protect them
from junk and frivolous lawsuits. (Applause.)

Consumers and businesses need reliable supplies of energy to make our
economy run -- so I urge you to pass legislation to modernize our
electricity system, promote conservation, and make America less
dependent on foreign sources of energy. (Applause.)

My administration is promoting free and fair trade to open up new
markets for America's entrepreneurs and manufacturers and farmers -- to
create jobs for American workers. Younger workers should have the
opportunity to build a nest egg by saving part of their Social Security
taxes in a personal retirement account. (Applause.) We should make the
Social Security system a source of ownership for the American people.
(Applause.) And we should limit the burden of government on this economy
by acting as good stewards of taxpayers' dollars. (Applause.)

In two weeks, I will send you a budget that funds the war, protects the
homeland, and meets important domestic needs, while limiting the growth
in discretionary spending to less than 4 percent. (Applause.) This will
require that Congress focus on priorities, cut wasteful spending, and be
wise with the people's money. By doing so, we can cut the deficit in
half over the next five years. (Applause.)

Tonight, I also ask you to reform our immigration laws so they reflect
our values and benefit our economy. I propose a new temporary worker
program to match willing foreign workers with willing employers when no
Americans can be found to fill the job. This reform will be good for our
economy because employers will find needed workers in an honest and
orderly system. A temporary worker program will help protect our
homeland, allowing Border Patrol and law enforcement to focus on true
threats to our national security.

I oppose amnesty, because it would encourage further illegal
immigration, and unfairly reward those who break our laws. My temporary
worker program will preserve the citizenship path for those who respect
the law, while bringing millions of hardworking men and women out from
the shadows of American life. (Applause.)

Our nation's health care system, like our economy, is also in a time of
change. Amazing medical technologies are improving and saving lives.
This dramatic progress has brought its own challenge, in the rising
costs of medical care and health insurance. Members of Congress, we must
work together to help control those costs and extend the benefits of
modern medicine throughout our country. (Applause.)

Meeting these goals requires bipartisan effort, and two months ago, you
showed the way. By strengthening Medicare and adding a prescription drug
benefit, you kept a basic commitment to our seniors: You are giving them
the modern medicine they deserve. (Applause.)

Starting this year, under the law you passed, seniors can choose to
receive a drug discount card, saving them 10 to 25 percent off the
retail price of most prescription drugs -- and millions of low-income
seniors can get an additional $600 to buy medicine. Beginning next year,
seniors will have new coverage for preventive screenings against
diabetes and heart disease, and seniors just entering Medicare can
receive wellness exams.

In January of 2006, seniors can get prescription drug coverage under
Medicare. For a monthly premium of about $35, most seniors who do not
have that coverage today can expect to see their drug bills cut roughly
in half. Under this reform, senior citizens will be able to keep their
Medicare just as it is, or they can choose a Medicare plan that fits
them best -- just as you, as members of Congress, can choose an
insurance plan that meets your needs. And starting this year, millions
of Americans will be able to save money tax-free for their medical
expenses in a health savings account. (Applause.)

I signed this measure proudly, and any attempt to limit the choices of
our seniors, or to take away their prescription drug coverage under
Medicare, will meet my veto. (Applause.)

On the critical issue of health care, our goal is to ensure that
Americans can choose and afford private health care coverage that best
fits their individual needs. To make insurance more affordable, Congress
must act to address rapidly rising health care costs. Small businesses
should be able to band together and negotiate for lower insurance rates,
so they can cover more workers with health insurance. I urge you to pass
association health plans. (Applause.) I ask you to give lower-income
Americans a refundable tax credit that would allow millions to buy their
own basic health insurance. (Applause.)

By computerizing health records, we can avoid dangerous medical
mistakes, reduce costs, and improve care. To protect the doctor-patient
relationship, and keep good doctors doing good work, we must eliminate
wasteful and frivolous medical lawsuits. (Applause.) And tonight I
propose that individuals who buy catastrophic health care coverage, as
part of our new health savings accounts, be allowed to deduct 100
percent of the premiums from their taxes. (Applause.)

A government-run health care system is the wrong prescription.
(Applause.) By keeping costs under control, expanding access, and
helping more Americans afford coverage, we will preserve the system of
private medicine that makes America's health care the best in the world.
(Applause.)

We are living in a time of great change -- in our world, in our economy,
in science and medicine. Yet some things endure -- courage and
compassion, reverence and integrity, respect for differences of faith
and race. The values we try to live by never change. And they are
instilled in us by fundamental institutions, such as families and
schools and religious congregations. These institutions, these unseen
pillars of civilization, must remain strong in America, and we will
defend them. We must stand with our families to help them raise healthy,
responsible children. When it comes to helping children make right
choices, there is work for all of us to do.

One of the worst decisions our children can make is to gamble their
lives and futures on drugs. Our government is helping parents confront
this problem with aggressive education, treatment, and law enforcement.
Drug use in high school has declined by 11 percent over the last two
years. Four hundred thousand fewer young people are using illegal drugs
than in the year 2001. (Applause.) In my budget, I proposed new funding
to continue our aggressive, community-based strategy to reduce demand
for illegal drugs. Drug testing in our schools has proven to be an
effective part of this effort. So tonight I proposed an additional $23
million for schools that want to use drug testing as a tool to save
children's lives. The aim here is not to punish children, but to send
them this message: We love you, and we don't want to lose you.
(Applause.)

To help children make right choices, they need good examples. Athletics
play such an important role in our society, but, unfortunately, some in
professional sports are not setting much of an example. The use of
performance-enhancing drugs like steroids in baseball, football, and
other sports is dangerous, and it sends the wrong message -- that there
are shortcuts to accomplishment, and that performance is more important
than character. So tonight I call on team owners, union representatives,
coaches, and players to take the lead, to send the right signal, to get
tough, and to get rid of steroids now. (Applause.)

To encourage right choices, we must be willing to confront the dangers
young people face -- even when they're difficult to talk about. Each
year, about 3 million teenagers contract sexually-transmitted diseases
that can harm them, or kill them, or prevent them from ever becoming
parents. In my budget, I propose a grassroots campaign to help inform
families about these medical risks. We will double federal funding for
abstinence programs, so schools can teach this fact of life: Abstinence
for young people is the only certain way to avoid sexually-transmitted
diseases. (Applause.)

Decisions children now make can affect their health and character for
the rest of their lives. All of us -- parents and schools and government
-- must work together to counter the negative influence of the culture,
and to send the right messages to our children.

A strong America must also value the institution of marriage. I believe
we should respect individuals as we take a principled stand for one of
the most fundamental, enduring institutions of our civilization.
Congress has already taken a stand on this issue by passing the Defense
of Marriage Act, signed in 1996 by President Clinton. That statute
protects marriage under federal law as a union of a man and a woman, and
declares that one state may not redefine marriage for other states.

Activist judges, however, have begun redefining marriage by court order,
without regard for the will of the people and their elected
representatives. On an issue of such great consequence, the people's
voice must be heard. If judges insist on forcing their arbitrary will
upon the people, the only alternative left to the people would be the
constitutional process. Our nation must defend the sanctity of marriage.
(Applause.)

The outcome of this debate is important -- and so is the way we conduct
it. The same moral tradition that defines marriage also teaches that
each individual has dignity and value in God's sight. (Applause.)

It's also important to strengthen our communities by unleashing the
compassion of America's religious institutions. Religious charities of
every creed are doing some of the most vital work in our country --
mentoring children, feeding the hungry, taking the hand of the lonely.
Yet government has often denied social service grants and contracts to
these groups, just because they have a cross or a Star of David or a
crescent on the wall. By executive order, I have opened billions of
dollars in grant money to competition that includes faith-based
charities. Tonight I ask you to codify this into law, so people of faith
can know that the law will never discriminate against them again.
(Applause.)

In the past, we've worked together to bring mentors to children of
prisoners, and provide treatment for the addicted, and help for the
homeless. Tonight I ask you to consider another group of Americans in
need of help. This year, some 600,000 inmates will be released from
prison back into society. We know from long experience that if they
can't find work, or a home, or help, they are much more likely to commit
crime and return to prison. So tonight, I propose a four-year, $300
million prisoner re-entry initiative to expand job training and
placement services, to provide transitional housing, and to help newly
released prisoners get mentoring, including from faith-based groups.
(Applause.) America is the land of second chance, and when the gates of
the prison open, the path ahead should lead to a better life.
(Applause.)

For all Americans, the last three years have brought tests we did not
ask for, and achievements shared by all. By our actions, we have shown
what kind of nation we are. In grief, we have found the grace to go on.
In challenge, we rediscovered the courage and daring of a free people.
In victory, we have shown the noble aims and good heart of America. And
having come this far, we sense that we live in a time set apart.

I've been witness to the character of the people of America, who have
shown calm in times of danger, compassion for one another, and toughness
for the long haul. All of us have been partners in a great enterprise.
And even some of the youngest understand that we are living in historic
times. Last month a girl in Lincoln, Rhode Island, sent me a letter. It
began, "Dear George W. Bush. If there's anything you know, I, Ashley
Pearson, age 10, can do to help anyone, please send me a letter and tell
me what I can do to save our country." She added this P.S.: "If you can
send a letter to the troops, please put, 'Ashley Pearson believes in
you.'" (Applause.)

Tonight, Ashley, your message to our troops has just been conveyed. And,
yes, you have some duties yourself. Study hard in school, listen to your
mom or dad, help someone in need, and when you and your friends see a
man or woman in uniform, say, "thank you." (Applause.) And, Ashley,
while you do your part, all of us here in this great chamber will do our
best to keep you and the rest of America safe and free. (Applause.)

My fellow citizens, we now move forward, with confidence and faith. Our
nation is strong and steadfast. The cause we serve is right, because it
is the cause of all mankind. The momentum of freedom in our world is
unmistakable -- and it is not carried forward by our power alone. We can
trust in that greater power who guides the unfolding of the years. And
in all that is to come, we can know that His purposes are just and true.

May God continue to bless America. (Applause.)

***

State of the Union Address
George W. Bush
February 2, 2005

Mr. Speaker, Vice President Cheney, members of Congress, fellow
citizens:

As a new Congress gathers, all of us in the elected branches of
government share a great privilege: We've been placed in office by the
votes of the people we serve. And tonight that is a privilege we share
with newly-elected leaders of Afghanistan, the Palestinian Territories,
Ukraine, and a free and sovereign Iraq. (Applause.)

Two weeks ago, I stood on the steps of this Capitol and renewed the
commitment of our nation to the guiding ideal of liberty for all. This
evening I will set forth policies to advance that ideal at home and
around the world.

Tonight, with a healthy, growing economy, with more Americans going back
to work, with our nation an active force for good in the world -- the
state of our union is confident and strong. (Applause.)

Our generation has been blessed -- by the expansion of opportunity, by
advances in medicine, by the security purchased by our parents'
sacrifice. Now, as we see a little gray in the mirror -- or a lot of
gray -- (laughter) -- and we watch our children moving into adulthood,
we ask the question: What will be the state of their union? Members of
Congress, the choices we make together will answer that question. Over
the next several months, on issue after issue, let us do what Americans
have always done, and build a better world for our children and our
grandchildren. (Applause.)

First, we must be good stewards of this economy, and renew the great
institutions on which millions of our fellow citizens rely. America's
economy is the fastest growing of any major industrialized nation. In
the past four years, we provided tax relief to every person who pays
income taxes, overcome a recession, opened up new markets abroad,
prosecuted corporate criminals, raised homeownership to its highest
level in history, and in the last year alone, the United States has
added 2.3 million new jobs. (Applause.) When action was needed, the
Congress delivered -- and the nation is grateful.

Now we must add to these achievements. By making our economy more
flexible, more innovative, and more competitive, we will keep America
the economic leader of the world. (Applause.)

America's prosperity requires restraining the spending appetite of the
federal government. I welcome the bipartisan enthusiasm for spending
discipline. I will send you a budget that holds the growth of
discretionary spending below inflation, makes tax relief permanent, and
stays on track to cut the deficit in half by 2009. (Applause.) My budget
substantially reduces or eliminates more than 150 government programs
that are not getting results, or duplicate current efforts, or do not
fulfill essential priorities. The principle here is clear: Taxpayer
dollars must be spent wisely, or not at all. (Applause.)

To make our economy stronger and more dynamic, we must prepare a rising
generation to fill the jobs of the 21st century. Under the No Child Left
Behind Act, standards are higher, test scores are on the rise, and we're
closing the achievement gap for minority students. Now we must demand
better results from our high schools, so every high school diploma is a
ticket to success. We will help an additional 200,000 workers to get
training for a better career, by reforming our job training system and
strengthening America's community colleges. And we'll make it easier for
Americans to afford a college education, by increasing the size of Pell
Grants. (Applause.)

To make our economy stronger and more competitive, America must reward,
not punish, the efforts and dreams of entrepreneurs. Small business is
the path of advancement, especially for women and minorities, so we must
free small businesses from needless regulation and protect honest
job-creators from junk lawsuits. (Applause.) Justice is distorted, and
our economy is held back by irresponsible class-actions and frivolous
asbestos claims -- and I urge Congress to pass legal reforms this year.
(Applause.)

To make our economy stronger and more productive, we must make health
care more affordable, and give families greater access to good coverage
-- (applause) -- and more control over their health decisions.
(Applause.) I ask Congress to move forward on a comprehensive health
care agenda with tax credits to help low-income workers buy insurance, a
community health center in every poor country, improved information
technology to prevent medical error and needless costs, association
health plans for small businesses and their employees -- (applause) --
expanded health savings accounts -- (applause) -- and medical liability
reform that will reduce health care costs and make sure patients have
the doctors and care they need. (Applause.)

To keep our economy growing, we also need reliable supplies of
affordable, environmentally responsible energy. (Applause.) Nearly four
years ago, I submitted a comprehensive energy strategy that encourages
conservation, alternative sources, a modernized electricity grid, and
more production here at home -- including safe, clean nuclear energy.
(Applause.) My Clear Skies legislation will cut power plant pollution
and improve the health of our citizens. (Applause.) And my budget
provides strong funding for leading-edge technology -- from
hydrogen-fueled cars, to clean coal, to renewable sources such as
ethanol. (Applause.) Four years of debate is enough: I urge Congress to
pass legislation that makes America more secure and less dependent on
foreign energy. (Applause.)

All these proposals are essential to expand this economy and add new
jobs -- but they are just the beginning of our duty. To build the
prosperity of future generations, we must update institutions that were
created to meet the needs of an earlier time. Year after year, Americans
are burdened by an archaic, incoherent federal tax code. I've appointed
a bipartisan panel to examine the tax code from top to bottom. And when
their recommendations are delivered, you and I will work together to
give this nation a tax code that is pro-growth, easy to understand, and
fair to all. (Applause.)

America's immigration system is also outdated -- unsuited to the needs
of our economy and to the values of our country. We should not be
content with laws that punish hardworking people who want only to
provide for their families, and deny businesses willing workers, and
invite chaos at our border. It is time for an immigration policy that
permits temporary guest workers to fill jobs Americans will not take,
that rejects amnesty, that tells us who is entering and leaving our
country, and that closes the border to drug dealers and terrorists.
(Applause.)

One of America's most important institutions -- a symbol of the trust
between generations -- is also in need of wise and effective reform.
Social Security was a great moral success of the 20th century, and we
must honor its great purposes in this new century. (Applause.) The
system, however, on its current path, is headed toward bankruptcy. And
so we must join together to strengthen and save Social Security.
(Applause.)

Today, more than 45 million Americans receive Social Security benefits,
and millions more are nearing retirement -- and for them the system is
sound and fiscally strong. I have a message for every American who is 55
or older: Do not let anyone mislead you; for you, the Social Security
system will not change in any way. (Applause.) For younger workers, the
Social Security system has serious problems that will grow worse with
time. Social Security was created decades ago, for a very different era.
In those days, people did not live as long. Benefits were much lower
than they are today. And a half-century ago, about sixteen workers paid
into the system for each person drawing benefits.

Our society has changed in ways the founders of Social Security could
not have foreseen. In today's world, people are living longer and,
therefore, drawing benefits longer. And those benefits are scheduled to
rise dramatically over the next few decades. And instead of sixteen
workers paying in for every beneficiary, right now it's only about three
workers. And over the next few decades that number will fall to just two
workers per beneficiary. With each passing year, fewer workers are
paying ever-higher benefits to an ever-larger number of retirees.

So here is the result: Thirteen years from now, in 2018, Social Security
will be paying out more than it takes in. And every year afterward will
bring a new shortfall, bigger than the year before. For example, in the
year 2027, the government will somehow have to come up with an extra
$200 billion to keep the system afloat -- and by 2033, the annual
shortfall would be more than $300 billion. By the year 2042, the entire
system would be exhausted and bankrupt. If steps are not taken to avert
that outcome, the only solutions would be dramatically higher taxes,
massive new borrowing, or sudden and severe cuts in Social Security
benefits or other government programs.

I recognize that 2018 and 2042 may seem a long way off. But those dates
are not so distant, as any parent will tell you. If you have a
five-year-old, you're already concerned about how you'll pay for college
tuition 13 years down the road. If you've got children in their 20s, as
some of us do, the idea of Social Security collapsing before they retire
does not seem like a small matter. And it should not be a small matter
to the United States Congress. (Applause.) You and I share a
responsibility. We must pass reforms that solve the financial problems
of Social Security once and for all.

Fixing Social Security permanently will require an open, candid review
of the options. Some have suggested limiting benefits for wealthy
retirees. Former Congressman Tim Penny has raised the possibility of
indexing benefits to prices rather than wages. During the 1990s, my
predecessor, President Clinton, spoke of increasing the retirement age.
Former Senator John Breaux suggested discouraging early collection of
Social Security benefits. The late Senator Daniel Patrick Moynihan
recommended changing the way benefits are calculated. All these ideas
are on the table.

I know that none of these reforms would be easy. But we have to move
ahead with courage and honesty, because our children's retirement
security is more important than partisan politics. (Applause.) I will
work with members of Congress to find the most effective combination of
reforms. I will listen to anyone who has a good idea to offer.
(Applause.) We must, however, be guided by some basic principles. We
must make Social Security permanently sound, not leave that task for
another day. We must not jeopardize our economic strength by increasing
payroll taxes. We must ensure that lower-income Americans get the help
they need to have dignity and peace of mind in their retirement. We must
guarantee there is no change for those now retired or nearing
retirement. And we must take care that any changes in the system are
gradual, so younger workers have years to prepare and plan for their
future.

As we fix Social Security, we also have the responsibility to make the
system a better deal for younger workers. And the best way to reach that
goal is through voluntary personal retirement accounts. (Applause.) Here
is how the idea works. Right now, a set portion of the money you earn is
taken out of your paycheck to pay for the Social Security benefits of
today's retirees. If you're a younger worker, I believe you should be
able to set aside part of that money in your own retirement account, so
you can build a nest egg for your own future.

Here's why the personal accounts are a better deal. Your money will
grow, over time, at a greater rate than anything the current system can
deliver -- and your account will provide money for retirement over and
above the check you will receive from Social Security. In addition,
you'll be able to pass along the money that accumulates in your personal
account, if you wish, to your children and -- or grandchildren. And best
of all, the money in the account is yours, and the government can never
take it away. (Applause.)

The goal here is greater security in retirement, so we will set careful
guidelines for personal accounts. We'll make sure the money can only go
into a conservative mix of bonds and stock funds. We'll make sure that
your earnings are not eaten up by hidden Wall Street fees. We'll make
sure there are good options to protect your investments from sudden
market swings on the eve of your retirement. We'll make sure a personal
account cannot be emptied out all at once, but rather paid out over
time, as an addition to traditional Social Security benefits. And we'll
make sure this plan is fiscally responsible, by starting personal
retirement accounts gradually, and raising the yearly limits on
contributions over time, eventually permitting all workers to set aside
four percentage points of their payroll taxes in their accounts.

Personal retirement accounts should be familiar to federal employees,
because you already have something similar, called the Thrift Savings
Plan, which lets workers deposit a portion of their paychecks into any
of five different broadly-based investment funds. It's time to extend
the same security, and choice, and ownership to young Americans.
(Applause.)

Our second great responsibility to our children and grandchildren is to
honor and to pass along the values that sustain a free society. So many
of my generation, after a long journey, have come home to family and
faith, and are determined to bring up responsible, moral children.
Government is not the source of these values, but government should
never undermine them.

Because marriage is a sacred institution and the foundation of society,
it should not be re-defined by activist judges. For the good of
families, children, and society, I support a constitutional amendment to
protect the institution of marriage. (Applause.)

Because a society is measured by how it treats the weak and vulnerable,
we must strive to build a culture of life. Medical research can help us
reach that goal, by developing treatments and cures that save lives and
help people overcome disabilities -- and I thank the Congress for
doubling the funding of the National Institutes of Health. (Applause.)
To build a culture of life, we must also ensure that scientific advances
always serve human dignity, not take advantage of some lives for the
benefit of others. We should all be able to agree -- (applause) -- we
should all be able to agree on some clear standards. I will work with
Congress to ensure that human embryos are not created for
experimentation or grown for body parts, and that human life is never
bought and sold as a commodity. (Applause.) America will continue to
lead the world in medical research that is ambitious, aggressive, and
always ethical.

Because courts must always deliver impartial justice, judges have a duty
to faithfully interpret the law, not legislate from the bench.
(Applause.) As President, I have a constitutional responsibility to
nominate men and women who understand the role of courts in our
democracy, and are well-qualified to serve on the bench -- and I have
done so. (Applause.) The Constitution also gives the Senate a
responsibility: Every judicial nominee deserves an up or down vote.
(Applause.)

Because one of the deepest values of our country is compassion, we must
never turn away from any citizen who feels isolated from the
opportunities of America. Our government will continue to support
faith-based and community groups that bring hope to harsh places. Now we
need to focus on giving young people, especially young men in our
cities, better options than apathy, or gangs, or jail. Tonight I propose
a three-year initiative to help organizations keep young people out of
gangs, and show young men an ideal of manhood that respects women and
rejects violence. (Applause.) Taking on gang life will be one part of a
broader outreach to at-risk youth, which involves parents and pastors,
coaches and community leaders, in programs ranging from literacy to
sports. And I am proud that the leader of this nationwide effort will be
our First Lady, Laura Bush. (Applause.)

Because HIV/AIDS brings suffering and fear into so many lives, I ask you
to reauthorize the Ryan White Act to encourage prevention, and provide
care and treatment to the victims of that disease. (Applause.) And as we
update this important law, we must focus our efforts on fellow citizens
with the highest rates of new cases, African American men and women.
(Applause.)

Because one of the main sources of our national unity is our belief in
equal justice, we need to make sure Americans of all races and
backgrounds have confidence in the system that provides justice. In
America we must make doubly sure no person is held to account for a
crime he or she did not commit -- so we are dramatically expanding the
use of DNA evidence to prevent wrongful conviction. (Applause.) Soon I
will send to Congress a proposal to fund special training for defense
counsel in capital cases, because people on trial for their lives must
have competent lawyers by their side. (Applause.)

Our third responsibility to future generations is to leave them an
America that is safe from danger, and protected by peace. We will pass
along to our children all the freedoms we enjoy -- and chief among them
is freedom from fear.

In the three and a half years since September the 11th, 2001, we have
taken unprecedented actions to protect Americans. We've created a new
department of government to defend our homeland, focused the FBI on
preventing terrorism, begun to reform our intelligence agencies, broken
up terror cells across the country, expanded research on defenses
against biological and chemical attack, improved border security, and
trained more than a half-million first responders. Police and
firefighters, air marshals, researchers, and so many others are working
every day to make our homeland safer, and we thank them all. (Applause.)

Our nation, working with allies and friends, has also confronted the
enemy abroad, with measures that are determined, successful, and
continuing. The al Qaeda terror network that attacked our country still
has leaders -- but many of its top commanders have been removed. There
are still governments that sponsor and harbor terrorists -- but their
number has declined. There are still regimes seeking weapons of mass
destruction -- but no longer without attention and without consequence.
Our country is still the target of terrorists who want to kill many, and
intimidate us all -- and we will stay on the offensive against them,
until the fight is won. (Applause.)

Pursuing our enemies is a vital commitment of the war on terror -- and I
thank the Congress for providing our servicemen and women with the
resources they have needed. During this time of war, we must continue to
support our military and give them the tools for victory. (Applause.)

Other nations around the globe have stood with us. In Afghanistan, an
international force is helping provide security. In Iraq, 28 countries
have troops on the ground, the United Nations and the European Union
provided technical assistance for the elections, and NATO is leading a
mission to help train Iraqi officers. We're cooperating with 60
governments in the Proliferation Security Initiative, to detect and stop
the transit of dangerous materials. We're working closely with the
governments in Asia to convince North Korea to abandon its nuclear
ambitions. Pakistan, Saudi Arabia, and nine other countries have
captured or detained al Qaeda terrorists. In the next four years, my
administration will continue to build the coalitions that will defeat
the dangers of our time. (Applause.)

In the long-term, the peace we seek will only be achieved by eliminating
the conditions that feed radicalism and ideologies of murder. If whole
regions of the world remain in despair and grow in hatred, they will be
the recruiting grounds for terror, and that terror will stalk America
and other free nations for decades. The only force powerful enough to
stop the rise of tyranny and terror, and replace hatred with hope, is
the force of human freedom. (Applause.) Our enemies know this, and that
is why the terrorist Zarqawi recently declared war on what he called the
"evil principle" of democracy. And we've declared our own intention:
America will stand with the allies of freedom to support democratic
movements in the Middle East and beyond, with the ultimate goal of
ending tyranny in our world. (Applause.)

The United States has no right, no desire, and no intention to impose
our form of government on anyone else. That is one of the main
differences between us and our enemies. They seek to impose and expand
an empire of oppression, in which a tiny group of brutal, self-appointed
rulers control every aspect of every life. Our aim is to build and
preserve a community of free and independent nations, with governments
that answer to their citizens, and reflect their own cultures. And
because democracies respect their own people and their neighbors, the
advance of freedom will lead to peace. (Applause.)

That advance has great momentum in our time -- shown by women voting in
Afghanistan, and Palestinians choosing a new direction, and the people
of Ukraine asserting their democratic rights and electing a president.
We are witnessing landmark events in the history of liberty. And in the
coming years, we will add to that story. (Applause.)

The beginnings of reform and democracy in the Palestinian territories
are now showing the power of freedom to break old patterns of violence
and failure. Tomorrow morning, Secretary of State Rice departs on a trip
that will take her to Israel and the West Bank for meetings with Prime
Minister Sharon and President Abbas. She will discuss with them how we
and our friends can help the Palestinian people end terror and build the
institutions of a peaceful, independent, democratic state. To promote
this democracy, I will ask Congress for $350 million to support
Palestinian political, economic, and security reforms. The goal of two
democratic states, Israel and Palestine, living side by side in peace,
is within reach -- and America will help them achieve that goal.
(Applause.)

To promote peace and stability in the broader Middle East, the United
States will work with our friends in the region to fight the common
threat of terror, while we encourage a higher standard of freedom.
Hopeful reform is already taking hold in an arc from Morocco to Jordan
to Bahrain. The government of Saudi Arabia can demonstrate its
leadership in the region by expanding the role of its people in
determining their future. And the great and proud nation of Egypt, which
showed the way toward peace in the Middle East, can now show the way
toward democracy in the Middle East. (Applause.)

To promote peace in the broader Middle East, we must confront regimes
that continue to harbor terrorists and pursue weapons of mass murder.
Syria still allows its territory, and parts of Lebanon, to be used by
terrorists who seek to destroy every chance of peace in the region. You
have passed, and we are applying, the Syrian Accountability Act -- and
we expect the Syrian government to end all support for terror and open
the door to freedom. (Applause.) Today, Iran remains the world's primary
state sponsor of terror -- pursuing nuclear weapons while depriving its
people of the freedom they seek and deserve. We are working with
European allies to make clear to the Iranian regime that it must give up
its uranium enrichment program and any plutonium reprocessing, and end
its support for terror. And to the Iranian people, I say tonight: As you
stand for your own liberty, America stands with you. (Applause.)

Our generational commitment to the advance of freedom, especially in the
Middle East, is now being tested and honored in Iraq. That country is a
vital front in the war on terror, which is why the terrorists have
chosen to make a stand there. Our men and women in uniform are fighting
terrorists in Iraq, so we do not have to face them here at home.
(Applause.) And the victory of freedom in Iraq will strengthen a new
ally in the war on terror, inspire democratic reformers from Damascus to
Tehran, bring more hope and progress to a troubled region, and thereby
lift a terrible threat from the lives of our children and grandchildren.

We will succeed because the Iraqi people value their own liberty -- as
they showed the world last Sunday. (Applause.) Across Iraq, often at
great risk, millions of citizens went to the polls and elected 275 men
and women to represent them in a new Transitional National Assembly. A
young woman in Baghdad told of waking to the sound of mortar fire on
election day, and wondering if it might be too dangerous to vote. She
said, "Hearing those explosions, it occurred to me -- the insurgents are
weak, they are afraid of democracy, they are losing. So I got my
husband, and I got my parents, and we all came out and voted together."

Americans recognize that spirit of liberty, because we share it. In any
nation, casting your vote is an act of civic responsibility; for
millions of Iraqis, it was also an act of personal courage, and they
have earned the respect of us all. (Applause.)

One of Iraq's leading democracy and human rights advocates is Safia
Taleb al-Suhail. She says of her country, "We were occupied for 35 years
by Saddam Hussein. That was the real occupation. Thank you to the
American people who paid the cost, but most of all, to the soldiers."
Eleven years ago, Safia's father was assassinated by Saddam's
intelligence service. Three days ago in Baghdad, Safia was finally able
to vote for the leaders of her country -- and we are honored that she is
with us tonight. (Applause.)

The terrorists and insurgents are violently opposed to democracy, and
will continue to attack it. Yet, the terrorists' most powerful myth is
being destroyed. The whole world is seeing that the car bombers and
assassins are not only fighting coalition forces, they are trying to
destroy the hopes of Iraqis, expressed in free elections. And the whole
world now knows that a small group of extremists will not overturn the
will of the Iraqi people. (Applause.)

We will succeed in Iraq because Iraqis are determined to fight for their
own freedom, and to write their own history. As Prime Minister Allawi
said in his speech to Congress last September, "Ordinary Iraqis are
anxious to shoulder all the security burdens of our country as quickly
as possible." That is the natural desire of an independent nation, and
it is also the stated mission of our coalition in Iraq. The new
political situation in Iraq opens a new phase of our work in that
country.

At the recommendation of our commanders on the ground, and in
consultation with the Iraqi government, we will increasingly focus our
efforts on helping prepare more capable Iraqi security forces -- forces
with skilled officers and an effective command structure. As those
forces become more self-reliant and take on greater security
responsibilities, America and its coalition partners will increasingly
be in a supporting role. In the end, Iraqis must be able to defend their
own country -- and we will help that proud, new nation secure its
liberty.

Recently an Iraqi interpreter said to a reporter, "Tell America not to
abandon us." He and all Iraqis can be certain: While our military
strategy is adapting to circumstances, our commitment remains firm and
unchanging. We are standing for the freedom of our Iraqi friends, and
freedom in Iraq will make America safer for generations to come.
(Applause.) We will not set an artificial timetable for leaving Iraq,
because that would embolden the terrorists and make them believe they
can wait us out. We are in Iraq to achieve a result: A country that is
democratic, representative of all its people, at peace with its
neighbors, and able to defend itself. And when that result is achieved,
our men and women serving in Iraq will return home with the honor they
have earned. (Applause.)

Right now, Americans in uniform are serving at posts across the world,
often taking great risks on my orders. We have given them training and
equipment; and they have given us an example of idealism and character
that makes every American proud. (Applause.) The volunteers of our
military are unrelenting in battle, unwavering in loyalty, unmatched in
honor and decency, and every day they're making our nation more secure.
Some of our servicemen and women have survived terrible injuries, and
this grateful country will do everything we can to help them recover.
(Applause.) And we have said farewell to some very good men and women,
who died for our freedom, and whose memory this nation will honor
forever.

One name we honor is Marine Corps Sergeant Byron Norwood of
Pflugerville, Texas, who was killed during the assault on Fallujah. His
mom, Janet, sent me a letter and told me how much Byron loved being a
Marine, and how proud he was to be on the front line against terror. She
wrote, "When Byron was home the last time, I said that I wanted to
protect him like I had since he was born. He just hugged me and said,
'You've done your job, Mom. Now it is my turn to protect you.'" Ladies
and gentlemen, with grateful hearts, we honor freedom's defenders, and
our military families, represented here this evening by Sergeant
Norwood's mom and dad, Janet and Bill Norwood. (Applause.)

In these four years, Americans have seen the unfolding of large events.
We have known times of sorrow, and hours of uncertainty, and days of
victory. In all this history, even when we have disagreed, we have seen
threads of purpose that unite us. The attack on freedom in our world has
reaffirmed our confidence in freedom's power to change the world. We are
all part of a great venture: To extend the promise of freedom in our
country, to renew the values that sustain our liberty, and to spread the
peace that freedom brings.

As Franklin Roosevelt once reminded Americans, "Each age is a dream that
is dying, or one that is coming to birth." And we live in the country
where the biggest dreams are born. The abolition of slavery was only a
dream -- until it was fulfilled. The liberation of Europe from fascism
was only a dream -- until it was achieved. The fall of imperial
communism was only a dream -- until, one day, it was accomplished. Our
generation has dreams of its own, and we also go forward with
confidence. The road of Providence is uneven and unpredictable -- yet we
know where it leads: It leads to freedom.

Thank you, and may God bless America. (Applause.)

***

State of the Union Address
George W. Bush
January 31, 2006

Thank you all. Mr. Speaker, Vice President Cheney, members of Congress,
members of the Supreme Court and diplomatic corps, distinguished guests,
and fellow citizens: Today our nation lost a beloved, graceful,
courageous woman who called America to its founding ideals and carried
on a noble dream. Tonight we are comforted by the hope of a glad reunion
with the husband who was taken so long ago, and we are grateful for the
good life of Coretta Scott King. (Applause.)

Every time I'm invited to this rostrum, I'm humbled by the privilege,
and mindful of the history we've seen together. We have gathered under
this Capitol dome in moments of national mourning and national
achievement. We have served America through one of the most
consequential periods of our history -- and it has been my honor to
serve with you.

In a system of two parties, two chambers, and two elected branches,
there will always be differences and debate. But even tough debates can
be conducted in a civil tone, and our differences cannot be allowed to
harden into anger. To confront the great issues before us, we must act
in a spirit of goodwill and respect for one another -- and I will do my
part. Tonight the state of our Union is strong -- and together we will
make it stronger. (Applause.)

In this decisive year, you and I will make choices that determine both
the future and the character of our country. We will choose to act
confidently in pursuing the enemies of freedom -- or retreat from our
duties in the hope of an easier life. We will choose to build our
prosperity by leading the world economy -- or shut ourselves off from
trade and opportunity. In a complex and challenging time, the road of
isolationism and protectionism may seem broad and inviting -- yet it
ends in danger and decline. The only way to protect our people, the only
way to secure the peace, the only way to control our destiny is by our
leadership -- so the United States of America will continue to lead.
(Applause.)

Abroad, our nation is committed to an historic, long-term goal -- we
seek the end of tyranny in our world. Some dismiss that goal as
misguided idealism. In reality, the future security of America depends
on it. On September the 11th, 2001, we found that problems originating
in a failed and oppressive state 7,000 miles away could bring murder and
destruction to our country. Dictatorships shelter terrorists, and feed
resentment and radicalism, and seek weapons of mass destruction.
Democracies replace resentment with hope, respect the rights of their
citizens and their neighbors, and join the fight against terror. Every
step toward freedom in the world makes our country safer -- so we will
act boldly in freedom's cause. (Applause.)

Far from being a hopeless dream, the advance of freedom is the great
story of our time. In 1945, there were about two dozen lonely
democracies in the world. Today, there are 122. And we're writing a new
chapter in the story of self-government -- with women lining up to vote
in Afghanistan, and millions of Iraqis marking their liberty with purple
ink, and men and women from Lebanon to Egypt debating the rights of
individuals and the necessity of freedom. At the start of 2006, more
than half the people of our world live in democratic nations. And we do
not forget the other half -- in places like Syria and Burma, Zimbabwe,
North Korea, and Iran -- because the demands of justice, and the peace
of this world, require their freedom, as well. (Applause.)

No one can deny the success of freedom, but some men rage and fight
against it. And one of the main sources of reaction and opposition is
radical Islam -- the perversion by a few of a noble faith into an
ideology of terror and death. Terrorists like bin Laden are serious
about mass murder -- and all of us must take their declared intentions
seriously. They seek to impose a heartless system of totalitarian
control throughout the Middle East, and arm themselves with weapons of
mass murder.

Their aim is to seize power in Iraq, and use it as a safe haven to
launch attacks against America and the world. Lacking the military
strength to challenge us directly, the terrorists have chosen the weapon
of fear. When they murder children at a school in Beslan, or blow up
commuters in London, or behead a bound captive, the terrorists hope
these horrors will break our will, allowing the violent to inherit the
Earth. But they have miscalculated: We love our freedom, and we will
fight to keep it. (Applause.)

In a time of testing, we cannot find security by abandoning our
commitments and retreating within our borders. If we were to leave these
vicious attackers alone, they would not leave us alone. They would
simply move the battlefield to our own shores. There is no peace in
retreat. And there is no honor in retreat. By allowing radical Islam to
work its will -- by leaving an assaulted world to fend for itself -- we
would signal to all that we no longer believe in our own ideals, or even
in our own courage. But our enemies and our friends can be certain: The
United States will not retreat from the world, and we will never
surrender to evil. (Applause.)

America rejects the false comfort of isolationism. We are the nation
that saved liberty in Europe, and liberated death camps, and helped
raise up democracies, and faced down an evil empire. Once again, we
accept the call of history to deliver the oppressed and move this world
toward peace. We remain on the offensive against terror networks. We
have killed or captured many of their leaders -- and for the others,
their day will come.

We remain on the offensive in Afghanistan, where a fine President and a
National Assembly are fighting terror while building the institutions of
a new democracy. We're on the offensive in Iraq, with a clear plan for
victory. First, we're helping Iraqis build an inclusive government, so
that old resentments will be eased and the insurgency will be
marginalized.

Second, we're continuing reconstruction efforts, and helping the Iraqi
government to fight corruption and build a modern economy, so all Iraqis
can experience the benefits of freedom. And, third, we're striking
terrorist targets while we train Iraqi forces that are increasingly
capable of defeating the enemy. Iraqis are showing their courage every
day, and we are proud to be their allies in the cause of freedom.
(Applause.)

Our work in Iraq is difficult because our enemy is brutal. But that
brutality has not stopped the dramatic progress of a new democracy. In
less than three years, the nation has gone from dictatorship to
liberation, to sovereignty, to a constitution, to national elections. At
the same time, our coalition has been relentless in shutting off
terrorist infiltration, clearing out insurgent strongholds, and turning
over territory to Iraqi security forces. I am confident in our plan for
victory; I am confident in the will of the Iraqi people; I am confident
in the skill and spirit of our military. Fellow citizens, we are in this
fight to win, and we are winning. (Applause.)

The road of victory is the road that will take our troops home. As we
make progress on the ground, and Iraqi forces increasingly take the
lead, we should be able to further decrease our troop levels -- but
those decisions will be made by our military commanders, not by
politicians in Washington, D.C. (Applause.)

Our coalition has learned from our experience in Iraq. We've adjusted
our military tactics and changed our approach to reconstruction. Along
the way, we have benefitted from responsible criticism and counsel
offered by members of Congress of both parties. In the coming year, I
will continue to reach out and seek your good advice. Yet, there is a
difference between responsible criticism that aims for success, and
defeatism that refuses to acknowledge anything but failure. (Applause.)
Hindsight alone is not wisdom, and second-guessing is not a strategy.
(Applause.)

With so much in the balance, those of us in public office have a duty to
speak with candor. A sudden withdrawal of our forces from Iraq would
abandon our Iraqi allies to death and prison, would put men like bin
Laden and Zarqawi in charge of a strategic country, and show that a
pledge from America means little. Members of Congress, however we feel
about the decisions and debates of the past, our nation has only one
option: We must keep our word, defeat our enemies, and stand behind the
American military in this vital mission. (Applause.)

Our men and women in uniform are making sacrifices -- and showing a
sense of duty stronger than all fear. They know what it's like to fight
house to house in a maze of streets, to wear heavy gear in the desert
heat, to see a comrade killed by a roadside bomb. And those who know the
costs also know the stakes. Marine Staff Sergeant Dan Clay was killed
last month fighting in Fallujah. He left behind a letter to his family,
but his words could just as well be addressed to every American. Here is
what Dan wrote: "I know what honor is.   It has been an honor to protect
and serve all of you. I faced death with the secure knowledge that you
would not have to . Never falter! Don't hesitate to honor and support
those of us who have the honor of protecting that which is worth
protecting."

Staff Sergeant Dan Clay's wife, Lisa, and his mom and dad, Sara Jo and
Bud, are with us this evening. Welcome. (Applause.)

Our nation is grateful to the fallen, who live in the memory of our
country. We're grateful to all who volunteer to wear our nation's
uniform -- and as we honor our brave troops, let us never forget the
sacrifices of America's military families. (Applause.)

Our offensive against terror involves more than military action.
Ultimately, the only way to defeat the terrorists is to defeat their
dark vision of hatred and fear by offering the hopeful alternative of
political freedom and peaceful change. So the United States of America
supports democratic reform across the broader Middle East. Elections are
vital, but they are only the beginning. Raising up a democracy requires
the rule of law, and protection of minorities, and strong, accountable
institutions that last longer than a single vote.

The great people of Egypt have voted in a multi-party presidential
election -- and now their government should open paths of peaceful
opposition that will reduce the appeal of radicalism. The Palestinian
people have voted in elections. And now the leaders of Hamas must
recognize Israel, disarm, reject terrorism, and work for lasting peace.
(Applause.) Saudi Arabia has taken the first steps of reform -- now it
can offer its people a better future by pressing forward with those
efforts. Democracies in the Middle East will not look like our own,
because they will reflect the traditions of their own citizens. Yet
liberty is the future of every nation in the Middle East, because
liberty is the right and hope of all humanity. (Applause.)

The same is true of Iran, a nation now held hostage by a small clerical
elite that is isolating and repressing its people. The regime in that
country sponsors terrorists in the Palestinian territories and in
Lebanon -- and that must come to an end. (Applause.) The Iranian
government is defying the world with its nuclear ambitions, and the
nations of the world must not permit the Iranian regime to gain nuclear
weapons. (Applause.) America will continue to rally the world to
confront these threats.

Tonight, let me speak directly to the citizens of Iran: America respects
you, and we respect your country. We respect your right to choose your
own future and win your own freedom. And our nation hopes one day to be
the closest of friends with a free and democratic Iran. (Applause.)

To overcome dangers in our world, we must also take the offensive by
encouraging economic progress, and fighting disease, and spreading hope
in hopeless lands. Isolationism would not only tie our hands in fighting
enemies, it would keep us from helping our friends in desperate need. We
show compassion abroad because Americans believe in the God-given
dignity and worth of a villager with HIV/AIDS, or an infant with
malaria, or a refugee fleeing genocide, or a young girl sold into
slavery. We also show compassion abroad because regions overwhelmed by
poverty, corruption, and despair are sources of terrorism, and organized
crime, and human trafficking, and the drug trade.

In recent years, you and I have taken unprecedented action to fight AIDS
and malaria, expand the education of girls, and reward developing
nations that are moving forward with economic and political reform. For
people everywhere, the United States is a partner for a better life.
Short-changing these efforts would increase the suffering and chaos of
our world, undercut our long-term security, and dull the conscience of
our country. I urge members of Congress to serve the interests of
America by showing the compassion of America.

Our country must also remain on the offensive against terrorism here at
home. The enemy has not lost the desire or capability to attack us.
Fortunately, this nation has superb professionals in law enforcement,
intelligence, the military, and homeland security. These men and women
are dedicating their lives, protecting us all, and they deserve our
support and our thanks. (Applause.) They also deserve the same tools
they already use to fight drug trafficking and organized crime -- so I
ask you to reauthorize the Patriot Act. (Applause.)

It is said that prior to the attacks of September the 11th, our
government failed to connect the dots of the conspiracy. We now know
that two of the hijackers in the United States placed telephone calls to
al Qaeda operatives overseas. But we did not know about their plans
until it was too late. So to prevent another attack  - based on
authority given to me by the Constitution and by statute -- I have
authorized a terrorist surveillance program to aggressively pursue the
international communications of suspected al Qaeda operatives and
affiliates to and from America. Previous Presidents have used the same
constitutional authority I have, and federal courts have approved the
use of that authority. Appropriate members of Congress have been kept
informed. The terrorist surveillance program has helped prevent
terrorist attacks. It remains essential to the security of America. If
there are people inside our country who are talking with al Qaeda, we
want to know about it, because we will not sit back and wait to be hit
again. (Applause.)

In all these areas -- from the disruption of terror networks, to victory
in Iraq, to the spread of freedom and hope in troubled regions -- we
need the support of our friends and allies. To draw that support, we
must always be clear in our principles and willing to act. The only
alternative to American leadership is a dramatically more dangerous and
anxious world. Yet we also choose to lead because it is a privilege to
serve the values that gave us birth. American leaders -- from Roosevelt
to Truman to Kennedy to Reagan -- rejected isolation and retreat,
because they knew that America is always more secure when freedom is on
the march.

Our own generation is in a long war against a determined enemy -- a war
that will be fought by Presidents of both parties, who will need steady
bipartisan support from the Congress. And tonight I ask for yours.
Together, let us protect our country, support the men and women who
defend us, and lead this world toward freedom. (Applause.)

Here at home, America also has a great opportunity: We will build the
prosperity of our country by strengthening our economic leadership in
the world.


Our economy is healthy and vigorous, and growing faster than other major
industrialized nations. In the last two-and-a-half years, America has
created 4.6 million new jobs -- more than Japan and the European Union
combined. (Applause.) Even in the face of higher energy prices and
natural disasters, the American people have turned in an economic
performance that is the envy of the world.

The American economy is preeminent, but we cannot afford to be
complacent. In a dynamic world economy, we are seeing new competitors,
like China and India, and this creates uncertainty, which makes it
easier to feed people's fears. So we're seeing some old temptations
return. Protectionists want to escape competition, pretending that we
can keep our high standard of living while walling off our economy.
Others say that the government needs to take a larger role in directing
the economy, centralizing more power in Washington and increasing taxes.
We hear claims that immigrants are somehow bad for the economy -- even
though this economy could not function without them. (Applause.) All
these are forms of economic retreat, and they lead in the same direction
-- toward a stagnant and second-rate economy.


Tonight I will set out a better path: an agenda for a nation that
competes with confidence; an agenda that will raise standards of living
and generate new jobs. Americans should not fear our economic future,
because we intend to shape it.

Keeping America competitive begins with keeping our economy growing. And
our economy grows when Americans have more of their own money to spend,
save, and invest. In the last five years, the tax relief you passed has
left $880 billion in the hands of American workers, investors, small
businesses, and families -- and they have used it to help produce more
than four years of uninterrupted economic growth. (Applause.) Yet the
tax relief is set to expire in the next few years. If we do nothing,
American families will face a massive tax increase they do not expect
and will not welcome.

Because America needs more than a temporary expansion, we need more than
temporary tax relief. I urge the Congress to act responsibly, and make
the tax cuts permanent. (Applause.)

Keeping America competitive requires us to be good stewards of tax
dollars. Every year of my presidency, we've reduced the growth of
non-security discretionary spending, and last year you passed bills that
cut this spending. This year my budget will cut it again, and reduce or
eliminate more than 140 programs that are performing poorly or not
fulfilling essential priorities. By passing these reforms, we will save
the American taxpayer another $14 billion next year, and stay on track
to cut the deficit in half by 2009. (Applause.)

I am pleased that members of Congress are working on earmark reform,
because the federal budget has too many special interest projects.
(Applause.) And we can tackle this problem together, if you pass the
line-item veto. (Applause.)

We must also confront the larger challenge of mandatory spending, or
entitlements. This year, the first of about 78 million baby boomers turn
60, including two of my Dad's favorite people -- me and President
Clinton. (Laughter.) This milestone is more than a personal crisis --
(laughter) -- it is a national challenge. The retirement of the baby
boom generation will put unprecedented strains on the federal
government. By 2030, spending for Social Security, Medicare and Medicaid
alone will be almost 60 percent of the entire federal budget. And that
will present future Congresses with impossible choices -- staggering tax
increases, immense deficits, or deep cuts in every category of spending.

Congress did not act last year on my proposal to save Social Security --
(applause) -- yet the rising cost of entitlements is a problem that is
not going away. (Applause.) And every year we fail to act, the situation
gets worse.

So tonight, I ask you to join me in creating a commission to examine the
full impact of baby boom retirements on Social Security, Medicare, and
Medicaid. This commission should include members of Congress of both
parties, and offer bipartisan solutions. We need to put aside partisan
politics and work together and get this problem solved. (Applause.)

Keeping America competitive requires us to open more markets for all
that Americans make and grow. One out of every five factory jobs in
America is related to global trade, and we want people everywhere to buy
American. With open markets and a level playing field, no one can
out-produce or out-compete the American worker. (Applause.)

Keeping America competitive requires an immigration system that upholds
our laws, reflects our values, and serves the interests of our economy.
Our nation needs orderly and secure borders. (Applause.) To meet this
goal, we must have stronger immigration enforcement and border
protection. (Applause.) And we must have a rational, humane guest worker
program that rejects amnesty, allows temporary jobs for people who seek
them legally, and reduces smuggling and crime at the border. (Applause.)

Keeping America competitive requires affordable health care. (Applause.)
Our government has a responsibility to provide health care for the poor
and the elderly, and we are meeting that responsibility. (Applause.) For
all Americans -- for all Americans, we must confront the rising cost of
care, strengthen the doctor-patient relationship, and help people afford
the insurance coverage they need. (Applause.)

We will make wider use of electronic records and other health
information technology, to help control costs and reduce dangerous
medical errors. We will strengthen health savings accounts -- making
sure individuals and small business employees can buy insurance with the
same advantages that people working for big businesses now get.
(Applause.) We will do more to make this coverage portable, so workers
can switch jobs without having to worry about losing their health
insurance. (Applause.) And because lawsuits are driving many good
doctors out of practice -- leaving women in nearly 1,500 American
counties without a single OB/GYN -- I ask the Congress to pass medical
liability reform this year. (Applause.)

Keeping America competitive requires affordable energy. And here we have
a serious problem: America is addicted to oil, which is often imported
from unstable parts of the world. The best way to break this addiction
is through technology. Since 2001, we have spent nearly $10 billion to
develop cleaner, cheaper, and more reliable alternative energy sources
-- and we are on the threshold of incredible advances.

So tonight, I announce the Advanced Energy Initiative -- a 22-percent
increase in clean-energy research -- at the Department of Energy, to
push for breakthroughs in two vital areas. To change how we power our
homes and offices, we will invest more in zero-emission coal-fired
plants, revolutionary solar and wind technologies, and clean, safe
nuclear energy. (Applause.)

We must also change how we power our automobiles. We will increase our
research in better batteries for hybrid and electric cars, and in
pollution-free cars that run on hydrogen. We'll also fund additional
research in cutting-edge methods of producing ethanol, not just from
corn, but from wood chips and stalks, or switch grass. Our goal is to
make this new kind of ethanol practical and competitive within six
years. (Applause.)

Breakthroughs on this and other new technologies will help us reach
another great goal: to replace more than 75 percent of our oil imports
from the Middle East by 2025. (Applause.) By applying the talent and
technology of America, this country can dramatically improve our
environment, move beyond a petroleum-based economy, and make our
dependence on Middle Eastern oil a thing of the past. (Applause.)

And to keep America competitive, one commitment is necessary above all:
We must continue to lead the world in human talent and creativity. Our
greatest advantage in the world has always been our educated,
hardworking, ambitious people -- and we're going to keep that edge.
Tonight I announce an American Competitiveness Initiative, to encourage
innovation throughout our economy, and to give our nation's children a
firm grounding in math and science. (Applause.)

First, I propose to double the federal commitment to the most critical
basic research programs in the physical sciences over the next 10 years.
This funding will support the work of America's most creative minds as
they explore promising areas such as nanotechnology, supercomputing, and
alternative energy sources.

Second, I propose to make permanent the research and development tax
credit -- (applause) -- to encourage bolder private-sector initiatives
in technology. With more research in both the public and private
sectors, we will improve our quality of life -- and ensure that America
will lead the world in opportunity and innovation for decades to come.
(Applause.)

Third, we need to encourage children to take more math and science, and
to make sure those courses are rigorous enough to compete with other
nations. We've made a good start in the early grades with the No Child
Left Behind Act, which is raising standards and lifting test scores
across our country. Tonight I propose to train 70,000 high school
teachers to lead advanced-placement courses in math and science, bring
30,000 math and science professionals to teach in classrooms, and give
early help to students who struggle with math, so they have a better
chance at good, high-wage jobs. If we ensure that America's children
succeed in life, they will ensure that America succeeds in the world.
(Applause.)

Preparing our nation to compete in the world is a goal that all of us
can share. I urge you to support the American Competitiveness
Initiative, and together we will show the world what the American people
can achieve.

America is a great force for freedom and prosperity. Yet our greatness
is not measured in power or luxuries, but by who we are and how we treat
one another. So we strive to be a compassionate, decent, hopeful
society.

In recent years, America has become a more hopeful nation. Violent crime
rates have fallen to their lowest levels since the 1970s. Welfare cases
have dropped by more than half over the past decade. Drug use among
youth is down 19 percent since 2001. There are fewer abortions in
America than at any point in the last three decades, and the number of
children born to teenage mothers has been falling for a dozen years in a
row. (Applause.)

These gains are evidence of a quiet transformation -- a revolution of
conscience, in which a rising generation is finding that a life of
personal responsibility is a life of fulfillment. Government has played
a role. Wise policies, such as welfare reform and drug education and
support for abstinence and adoption have made a difference in the
character of our country. And everyone here tonight, Democrat and
Republican, has a right to be proud of this record. (Applause.)

Yet many Americans, especially parents, still have deep concerns about
the direction of our culture, and the health of our most basic
institutions. They're concerned about unethical conduct by public
officials, and discouraged by activist courts that try to redefine
marriage. They worry about children in our society who need direction
and love, and about fellow citizens still displaced by natural disaster,
and about suffering caused by treatable diseases.

As we look at these challenges, we must never give in to the belief that
America is in decline, or that our culture is doomed to unravel. The
American people know better than that. We have proven the pessimists
wrong before -- and we will do it again. (Applause.)

A hopeful society depends on courts that deliver equal justice under the
law. The Supreme Court now has two superb new members -- new members on
its bench: Chief Justice John Roberts and Justice Sam Alito. (Applause.)
I thank the Senate for confirming both of them. I will continue to
nominate men and women who understand that judges must be servants of
the law, and not legislate from the bench. (Applause.)

Today marks the official retirement of a very special American. For 24
years of faithful service to our nation, the United States is grateful
to Justice Sandra Day O'Connor. (Applause.)

A hopeful society has institutions of science and medicine that do not
cut ethical corners, and that recognize the matchless value of every
life. Tonight I ask you to pass legislation to prohibit the most
egregious abuses of medical research: human cloning in all its forms,
creating or implanting embryos for experiments, creating human-animal
hybrids, and buying, selling, or patenting human embryos. Human life is
a gift from our Creator -- and that gift should never be discarded,
devalued or put up for sale. (Applause.)

A hopeful society expects elected officials to uphold the public trust.
(Applause.) Honorable people in both parties are working on reforms to
strengthen the ethical standards of Washington -- I support your
efforts. Each of us has made a pledge to be worthy of public
responsibility -- and that is a pledge we must never forget, never
dismiss, and never betray. (Applause.)

As we renew the promise of our institutions, let us also show the
character of America in our compassion and care for one another.

A hopeful society gives special attention to children who lack direction
and love. Through the Helping America's Youth Initiative, we are
encouraging caring adults to get involved in the life of a child -- and
this good work is being led by our First Lady, Laura Bush. (Applause.)
This year we will add resources to encourage young people to stay in
school, so more of America's youth can raise their sights and achieve
their dreams.

A hopeful society comes to the aid of fellow citizens in times of
suffering and emergency -- and stays at it until they're back on their
feet. So far the federal government has committed $85 billion to the
people of the Gulf Coast and New Orleans. We're removing debris and
repairing highways and rebuilding stronger levees. We're providing
business loans and housing assistance. Yet as we meet these immediate
needs, we must also address deeper challenges that existed before the
storm arrived.

In New Orleans and in other places, many of our fellow citizens have
felt excluded from the promise of our country. The answer is not only
temporary relief, but schools that teach every child, and job skills
that bring upward mobility, and more opportunities to own a home and
start a business. As we recover from a disaster, let us also work for
the day when all Americans are protected by justice, equal in hope, and
rich in opportunity. (Applause.)

A hopeful society acts boldly to fight diseases like HIV/AIDS, which can
be prevented, and treated, and defeated. More than a million Americans
live with HIV, and half of all AIDS cases occur among African Americans.
I ask Congress to reform and reauthorize the Ryan White Act, and provide
new funding to states, so we end the waiting lists for AIDS medicines in
America. (Applause.) We will also lead a nationwide effort, working
closely with African American churches and faith-based groups, to
deliver rapid HIV tests to millions, end the stigma of AIDS, and come
closer to the day when there are no new infections in America.
(Applause.)

Fellow citizens, we've been called to leadership in a period of
consequence. We've entered a great ideological conflict we did nothing
to invite. We see great changes in science and commerce that will
influence all our lives. Sometimes it can seem that history is turning
in a wide arc, toward an unknown shore. Yet the destination of history
is determined by human action, and every great movement of history comes
to a point of choosing.

Lincoln could have accepted peace at the cost of disunity and continued
slavery. Martin Luther King could have stopped at Birmingham or at
Selma, and achieved only half a victory over segregation. The United
States could have accepted the permanent division of Europe, and been
complicit in the oppression of others. Today, having come far in our own
historical journey, we must decide: Will we turn back, or finish well?

Before history is written down in books, it is written in courage. Like
Americans before us, we will show that courage and we will finish well.
We will lead freedom's advance. We will compete and excel in the global
economy. We will renew the defining moral commitments of this land. And
so we move forward -- optimistic about our country, faithful to its
cause, and confident of the victories to come.

May God bless America. (Applause.)

***

State of the Union Address
by George W. Bush
January 23, 2007


Thank you very much. And tonight, I have a high privilege and distinct
honor of my own--as the first President to begin the State of the
Union message with these words: Madam Speaker (Applause.)

In his day, the late Congressman Thomas D'Alesandro, Jr. from Baltimore,
Maryland, saw Presidents Roosevelt and Truman at this rostrum. But
nothing could compare with the sight of his only daughter, Nancy,
presiding tonight as Speaker of the House of Representatives.
(Applause.) Congratulations, Madam Speaker. (Applause.)

Two members of the House and Senate are not with us tonight, and we
pray for the recovery and speedy return of Senator Tim Johnson and
Congressman Charlie Norwood. (Applause.)

Madam Speaker, Vice President Cheney, members of Congress,
distinguished guests, and fellow citizens:

The rite of custom brings us together at a defining hour--when
decisions are hard and courage is needed. We enter the year 2007 with
large endeavors underway, and others that are ours to begin. In all of
this, much is asked of us. We must have the will to face difficult
challenges and determined enemies--and the wisdom to face them
together.

Some in this chamber are new to the House and the Senate--and I
congratulate the Democrat majority. (Applause.) Congress has changed,
but not our responsibilities. Each of us is guided by our own
convictions--and to these we must stay faithful. Yet we're all held to
the same standards, and called to serve the same good purposes: To
extend this nation's prosperity; to spend the people's money wisely; to
solve problems, not leave them to future generations; to guard America
against all evil; and to keep faith with those we have sent forth to
defend us. (Applause.)

We're not the first to come here with a government divided and
uncertainty in the air. Like many before us, we can work through our
differences, and achieve big things for the American people. Our
citizens don't much care which side of the aisle we sit on--as long as
we're willing to cross that aisle when there is work to be done.
(Applause.) Our job is to make life better for our fellow Americans,
and to help them to build a future of hope and opportunity--and this
is the business before us tonight.

A future of hope and opportunity begins with a growing economy--and
that is what we have. We're now in the 41st month of uninterrupted job
growth, in a recovery that has created 7.2 million new jobs--so far.
Unemployment is low, inflation is low, and wages are rising. This
economy is on the move, and our job is to keep it that way, not with
more government, but with more enterprise. (Applause.)

Next week, I'll deliver a full report on the state of our economy.
Tonight, I want to discuss three economic reforms that deserve to be
priorities for this Congress.

First, we must balance the federal budget. (Applause.) We can do so
without raising taxes. (Applause.) What we need is impose spending
discipline in Washington, D.C. We set a goal of cutting the deficit in
half by 2009, and met that goal three years ahead of schedule.
(Applause.) Now let us take the next step. In the coming weeks, I will
submit a budget that eliminates the federal deficit within the next
five years. (Applause.) I ask you to make the same commitment. Together,
we can restrain the spending appetite of the federal government, and we
can balance the federal budget. (Applause.)

Next, there is the matter of earmarks. These special interest items are
often slipped into bills at the last hour--when not even C-SPAN is
watching. (Laughter.) In 2005 alone, the number of earmarks grew to
over 13,000 and totaled nearly $18 billion. Even worse, over 90 percent
of earmarks never make it to the floor of the House and Senate--they
are dropped into committee reports that are not even part of the bill
that arrives on my desk. You didn't vote them into law. I didn't sign
them into law. Yet, they're treated as if they have the force of law.
The time has come to end this practice. So let us work together to
reform the budget process, expose every earmark to the light of day and
to a vote in Congress, and cut the number and cost of earmarks at least
in half by the end of this session. (Applause.)

And, finally, to keep this economy strong we must take on the challenge
of entitlements. Social Security and Medicare and Medicaid are
commitments of conscience, and so it is our duty to keep them
permanently sound. Yet, we're failing in that duty. And this failure
will one day leave our children with three bad options: huge tax
increases, huge deficits, or huge and immediate cuts in benefits.
Everyone in this chamber knows this to be true--yet somehow we have
not found it in ourselves to act. So let us work together and do it now.
With enough good sense and goodwill, you and I can fix Medicare and
Medicaid--and save Social Security. (Applause.)

Spreading opportunity and hope in America also requires public schools
that give children the knowledge and character they need in life. Five
years ago, we rose above partisan differences to pass the No Child Left
Behind Act, preserving local control, raising standards, and holding
those schools accountable for results. And because we acted, students
are performing better in reading and math, and minority students are
closing the achievement gap.

Now the task is to build on the success, without watering down
standards, without taking control from local communities, and without
backsliding and calling it reform. We can lift student achievement even
higher by giving local leaders flexibility to turn around failing
schools, and by giving families with children stuck in failing schools
the right to choose someplace better. (Applause.) We must increase
funds for students who struggle--and make sure these children get the
special help they need. (Applause.) And we can make sure our children
are prepared for the jobs of the future and our country is more
competitive by strengthening math and science skills. The No Child Left
Behind Act has worked for America's children--and I ask Congress to
reauthorize this good law. (Applause.)

A future of hope and opportunity requires that all our citizens have
affordable and available health care. (Applause.) When it comes to
health care, government has an obligation to care for the elderly, the
disabled, and poor children. And we will meet those responsibilities.
For all other Americans, private health insurance is the best way to
meet their needs. (Applause.) But many Americans cannot afford a health
insurance policy.

And so tonight, I propose two new initiatives to help more Americans
afford their own insurance. First, I propose a standard tax deduction
for health insurance that will be like the standard tax deduction for
dependents. Families with health insurance will pay no income on
payroll tax--or payroll taxes on $15,000 of their income. Single
Americans with health insurance will pay no income or payroll taxes on
$7,500 of their income. With this reform, more than 100 million men,
women, and children who are now covered by employer-provided insurance
will benefit from lower tax bills. At the same time, this reform will
level the playing field for those who do not get health insurance
through their job. For Americans who now purchase health insurance on
their own, this proposal would mean a substantial tax savings--$4,500
for a family of four making $60,000 a year. And for the millions of
other Americans who have no health insurance at all, this deduction
would help put a basic private health insurance plan within their reach.
Changing the tax code is a vital and necessary step to making health
care affordable for more Americans. (Applause.)

My second proposal is to help the states that are coming up with
innovative ways to cover the uninsured. States that make basic private
health insurance available to all their citizens should receive federal
funds to help them provide this coverage to the poor and the sick. I
have asked the Secretary of Health and Human Services to work with
Congress to take existing federal funds and use them to create
"Affordable Choices" grants. These grants would give our nation's
governors more money and more flexibility to get private health
insurance to those most in need.

There are many other ways that Congress can help. We need to expand
Health Savings Accounts. (Applause.) We need to help small businesses
through Association Health Plans. (Applause.) We need to reduce costs
and medical errors with better information technology. (Applause.) We
will encourage price transparency. And to protect good doctors from
junk lawsuits, we passing medical liability reform. (Applause.) In all
we do, we must remember that the best health care decisions are made
not by government and insurance companies, but by patients and their
doctors. (Applause.)

Extending hope and opportunity in our country requires an immigration
system worthy of America--with laws that are fair and borders that are
secure. When laws and borders are routinely violated, this harms the
interests of our country. To secure our border, we're doubling the size
of the Border Patrol, and funding new infrastructure and technology.

Yet even with all these steps, we cannot fully secure the border unless
we take pressure off the border--and that requires a temporary worker
program. We should establish a legal and orderly path for foreign
workers to enter our country to work on a temporary basis. As a result,
they won't have to try to sneak in, and that will leave Border Agents
free to chase down drug smugglers and criminals and terrorists.
(Applause.) We'll enforce our immigration laws at the work site and
give employers the tools to verify the legal status of their workers,
so there's no excuse left for violating the law. (Applause.)

We need to uphold the great tradition of the melting pot that welcomes
and assimilates new arrivals. (Applause.) We need to resolve the status
of the illegal immigrants who are already in our country without
animosity and without amnesty. (Applause.) Convictions run deep in this
Capitol when it comes to immigration. Let us have a serious, civil, and
conclusive debate, so that you can pass, and I can sign, comprehensive
immigration reform into law. (Applause.)

Extending hope and opportunity depends on a stable supply of energy
that keeps America's economy running and America's environment clean.
For too long our nation has been dependent on foreign oil. And this
dependence leaves us more vulnerable to hostile regimes, and to
terrorists--who could cause huge disruptions of oil shipments, and
raise the price of oil, and do great harm to our economy.

It's in our vital interest to diversify America's energy supply--the
way forward is through technology. We must continue changing the way
America generates electric power, by even greater use of clean coal
technology, solar and wind energy, and clean, safe nuclear power.
(Applause.) We need to press on with battery research for plug-in and
hybrid vehicles, and expand the use of clean diesel vehicles and
biodiesel fuel. (Applause.) We must continue investing in new methods
of producing ethanol--(applause)--using everything from wood chips to
grasses, to agricultural wastes.

We made a lot of progress, thanks to good policies here in Washington
and the strong response of the market. And now even more dramatic
advances are within reach. Tonight, I ask Congress to join me in
pursuing a great goal. Let us build on the work we've done and reduce
gasoline usage in the United States by 20 percent in the next 10 years.
(Applause.) When we do that we will have cut our total imports by the
equivalent of three-quarters of all the oil we now import from the
Middle East.

To reach this goal, we must increase the supply of alternative fuels,
by setting a mandatory fuels standard to require 35 billion gallons of
renewable and alternative fuels in 2017--and that is nearly five times
the current target. (Applause.) At the same time, we need to reform and
modernize fuel economy standards for cars the way we did for light
trucks--and conserve up to 8.5 billion more gallons of gasoline by
2017.

Achieving these ambitious goals will dramatically reduce our dependence
on foreign oil, but it's not going to eliminate it. And so as we
continue to diversify our fuel supply, we must step up domestic oil
production in environmentally sensitive ways. (Applause.) And to
further protect America against severe disruptions to our oil supply, I
ask Congress to double the current capacity of the Strategic Petroleum
Reserve. (Applause.)

America is on the verge of technological breakthroughs that will enable
us to live our lives less dependent on oil. And these technologies will
help us be better stewards of the environment, and they will help us to
confront the serious challenge of global climate change. (Applause.)

A future of hope and opportunity requires a fair, impartial system of
justice. The lives of our citizens across our nation are affected by
the outcome of cases pending in our federal courts. We have a shared
obligation to ensure that the federal courts have enough judges to hear
those cases and deliver timely rulings. As President, I have a duty to
nominate qualified men and women to vacancies on the federal bench. And
the United States Senate has a duty, as well, to give those nominees a
fair hearing, and a prompt up-or-down vote on the Senate floor.
(Applause.)

For all of us in this room, there is no higher responsibility than to
protect the people of this country from danger. Five years have come
and gone since we saw the scenes and felt the sorrow that the
terrorists can cause. We've had time to take stock of our situation.
We've added many critical protections to guard the homeland. We know
with certainty that the horrors of that September morning were just a
glimpse of what the terrorists intend for us--unless we stop them.

With the distance of time, we find ourselves debating the causes of
conflict and the course we have followed. Such debates are essential
when a great democracy faces great questions. Yet one question has
surely been settled: that to win the war on terror we must take the
fight to the enemy. (Applause.)

From the start, America and our allies have protected our people by
staying on the offense. The enemy knows that the days of comfortable
sanctuary, easy movement, steady financing, and free flowing
communications are long over. For the terrorists, life since 9/11 has
never been the same.

Our success in this war is often measured by the things that did not
happen. We cannot know the full extent of the attacks that we and our
allies have prevented, but here is some of what we do know: We stopped
an al Qaeda plot to fly a hijacked airplane into the tallest building
on the West Coast. We broke up a Southeast Asian terror cell grooming
operatives for attacks inside the United States. We uncovered an al
Qaeda cell developing anthrax to be used in attacks against America.
And just last August, British authorities uncovered a plot to blow up
passenger planes bound for America over the Atlantic Ocean. For each
life saved, we owe a debt of gratitude to the brave public servants who
devote their lives to finding the terrorists and stopping them.
(Applause.)

Every success against the terrorists is a reminder of the shoreless
ambitions of this enemy. The evil that inspired and rejoiced in 9/11 is
still at work in the world. And so long as that's the case, America is
still a nation at war.

In the mind of the terrorist, this war began well before September the
11th, and will not end until their radical vision is fulfilled. And
these past five years have given us a much clearer view of the nature
of this enemy. Al Qaeda and its followers are Sunni extremists,
possessed by hatred and commanded by a harsh and narrow ideology. Take
almost any principle of civilization, and their goal is the opposite.
They preach with threats, instruct with bullets and bombs, and promise
paradise for the murder of the innocent.

Our enemies are quite explicit about their intentions. They want to
overthrow moderate governments, and establish safe havens from which to
plan and carry out new attacks on our country. By killing and
terrorizing Americans, they want to force our country to retreat from
the world and abandon the cause of liberty. They would then be free to
impose their will and spread their totalitarian ideology. Listen to
this warning from the late terrorist Zarqawi: "We will sacrifice our
blood and bodies to put an end to your dreams, and what is coming is
even worse." Osama bin Laden declared: "Death is better than living on
this Earth with the unbelievers among us."

These men are not given to idle words, and they are just one camp in
the Islamist radical movement. In recent times, it has also become
clear that we face an escalating danger from Shia extremists who are
just as hostile to America, and are also determined to dominate the
Middle East. Many are known to take direction from the regime in Iran,
which is funding and arming terrorists like Hezbollah--a group second
only to al Qaeda in the American lives it has taken.

The Shia and Sunni extremists are different faces of the same
totalitarian threat. Whatever slogans they chant, when they slaughter
the innocent they have the same wicked purposes. They want to kill
Americans, kill democracy in the Middle East, and gain the weapons to
kill on an even more horrific scale.

In the sixth year since our nation was attacked, I wish I could report
to you that the dangers had ended. They have not. And so it remains the
policy of this government to use every lawful and proper tool of
intelligence, diplomacy, law enforcement, and military action to do our
duty, to find these enemies, and to protect the American people.
(Applause.)

This war is more than a clash of arms--it is a decisive ideological
struggle, and the security of our nation is in the balance. To prevail,
we must remove the conditions that inspire blind hatred, and drove 19
men to get onto airplanes and to come and kill us. What every terrorist
fears most is human freedom--societies where men and women make their 
own choices, answer to their own conscience, and live by their hopes 
instead of their resentments. Free people are not drawn to violent and 
malignant ideologies--and most will choose a better way when they're 
given a chance. So we advance our own security interests by helping 
moderates and reformers and brave voices for democracy. The great 
question of our day is whether America will help men and women in 
the Middle East to build free societies and share in the rights of 
all humanity. And I say, for the sake of our own security, we 
must. (Applause.)

In the last two years, we've seen the desire for liberty in the broader
Middle East--and we have been sobered by the enemy's fierce reaction.
In 2005, the world watched as the citizens of Lebanon raised the banner
of the Cedar Revolution, they drove out the Syrian occupiers and chose
new leaders in free elections. In 2005, the people of Afghanistan
defied the terrorists and elected a democratic legislature. And in 2005,
the Iraqi people held three national elections, choosing a transitional
government, adopting the most progressive, democratic constitution in
the Arab world, and then electing a government under that constitution.
Despite endless threats from the killers in their midst, nearly 12
million Iraqi citizens came out to vote in a show of hope and
solidarity that we should never forget. (Applause.)

A thinking enemy watched all of these scenes, adjusted their tactics,
and in 2006 they struck back. In Lebanon, assassins took the life of
Pierre Gemayel, a prominent participant in the Cedar Revolution.
Hezbollah terrorists, with support from Syria and Iran, sowed conflict
in the region and are seeking to undermine Lebanon's legitimately
elected government. In Afghanistan, Taliban and al Qaeda fighters tried
to regain power by regrouping and engaging Afghan and NATO forces. In
Iraq, al Qaeda and other Sunni extremists blew up one of the most
sacred places in Shia Islam--the Golden Mosque of Samarra. This
atrocity, directed at a Muslim house of prayer, was designed to provoke
retaliation from Iraqi Shia--and it succeeded. Radical Shia elements,
some of whom receive support from Iran, formed death squads. The result
was a tragic escalation of sectarian rage and reprisal that continues
to this day.

This is not the fight we entered in Iraq, but it is the fight we're in.
Every one of us wishes this war were over and won. Yet it would not be
like us to leave our promises unkept, our friends abandoned, and our
own security at risk. (Applause.) Ladies and gentlemen: On this day, at
this hour, it is still within our power to shape the outcome of this
battle. Let us find our resolve, and turn events toward victory.
(Applause.)

We're carrying out a new strategy in Iraq--a plan that demands more
from Iraq's elected government, and gives our forces in Iraq the
reinforcements they need to complete their mission. Our goal is a
democratic Iraq that upholds the rule of law, respects the rights of
its people, provides them security, and is an ally in the war on terror.

In order to make progress toward this goal, the Iraqi government must
stop the sectarian violence in its capital. But the Iraqis are not yet
ready to do this on their own. So we're deploying reinforcements of
more than 20,000 additional soldiers and Marines to Iraq. The vast
majority will go to Baghdad, where they will help Iraqi forces to clear
and secure neighborhoods, and serve as advisers embedded in Iraqi Army
units. With Iraqis in the lead, our forces will help secure the city by
chasing down the terrorists, insurgents, and the roaming death squads.
And in Anbar Province, where al Qaeda terrorists have gathered and
local forces have begun showing a willingness to fight them, we're
sending an additional 4,000 United States Marines, with orders to find
the terrorists and clear them out. (Applause.) We didn't drive al Qaeda
out of their safe haven in Afghanistan only to let them set up a new
safe haven in a free Iraq.

The people of Iraq want to live in peace, and now it's time for their
government to act. Iraq's leaders know that our commitment is not 
open-ended. They have promised to deploy more of their own troops to secure
Baghdad--and they must do so. They pledged that they will confront
violent radicals of any faction or political party--and they need to
follow through, and lift needless restrictions on Iraqi and coalition
forces, so these troops can achieve their mission of bringing security
to all of the people of Baghdad. Iraq's leaders have committed
themselves to a series of benchmarks--to achieve reconciliation, to
share oil revenues among all of Iraq's citizens, to put the wealth of
Iraq into the rebuilding of Iraq, to allow more Iraqis to re-enter
their nation's civic life, to hold local elections, and to take
responsibility for security in every Iraqi province. But for all of
this to happen, Baghdad must be secure. And our plan will help the
Iraqi government take back its capital and make good on its commitments.

My fellow citizens, our military commanders and I have carefully
weighed the options. We discussed every possible approach. In the end,
I chose this course of action because it provides the best chance for
success. Many in this chamber understand that America must not fail in
Iraq, because you understand that the consequences of failure would be
grievous and far-reaching.

If American forces step back before Baghdad is secure, the Iraqi
government would be overrun by extremists on all sides. We could expect
an epic battle between Shia extremists backed by Iran, and Sunni
extremists aided by al Qaeda and supporters of the old regime. A
contagion of violence could spill out across the country--and in time,
the entire region could be drawn into the conflict.

For America, this is a nightmare scenario. For the enemy, this is the
objective. Chaos is the greatest ally--their greatest ally in this
struggle. And out of chaos in Iraq would emerge an emboldened enemy
with new safe havens, new recruits, new resources, and an even greater
determination to harm America. To allow this to happen would be to
ignore the lessons of September the 11th and invite tragedy. Ladies and
gentlemen, nothing is more important at this moment in our history than
for America to succeed in the Middle East, to succeed in Iraq and to
spare the American people from this danger. (Applause.)

This is where matters stand tonight, in the here and now. I have spoken
with many of you in person. I respect you and the arguments you've made.
We went into this largely united, in our assumptions and in our
convictions. And whatever you voted for, you did not vote for failure.
Our country is pursuing a new strategy in Iraq, and I ask you to give
it a chance to work. And I ask you to support our troops in the field,
and those on their way. (Applause.)

The war on terror we fight today is a generational struggle that will
continue long after you and I have turned our duties over to others.
And that's why it's important to work together so our nation can see
this great effort through. Both parties and both branches should work
in close consultation. It's why I propose to establish a special
advisory council on the war on terror, made up of leaders in Congress
from both political parties. We will share ideas for how to position
America to meet every challenge that confronts us. We'll show our
enemies abroad that we are united in the goal of victory.

And one of the first steps we can take together is to add to the ranks
of our military so that the American Armed Forces are ready for all the
challenges ahead. (Applause.) Tonight I ask the Congress to authorize
an increase in the size of our active Army and Marine Corps by 92,000
in the next five years. (Applause.) A second task we can take on
together is to design and establish a volunteer Civilian Reserve Corps.
Such a corps would function much like our military reserve. It would
ease the burden on the Armed Forces by allowing us to hire civilians
with critical skills to serve on missions abroad when America needs
them. It would give people across America who do not wear the uniform a
chance to serve in the defining struggle of our time.

Americans can have confidence in the outcome of this struggle because
we're not in this struggle alone. We have a diplomatic strategy that is
rallying the world to join in the fight against extremism. In Iraq,
multinational forces are operating under a mandate from the United
Nations. We're working with Jordan and Saudi Arabia and Egypt and the
Gulf States to increase support for Iraq's government.

The United Nations has imposed sanctions on Iran, and made it clear
that the world will not allow the regime in Tehran to acquire nuclear
weapons. (Applause.) With the other members of the Quartet--the U.N.,
the European Union, and Russia--we're pursuing diplomacy to help bring
peace to the Holy Land, and pursuing the establishment of a democratic
Palestinian state living side-by-side with Israel in peace and security.
(Applause.) In Afghanistan, NATO has taken the lead in turning back the
Taliban and al Qaeda offensive--the first time the Alliance has
deployed forces outside the North Atlantic area. Together with our
partners in China, Japan, Russia, and South Korea, we're pursuing
intensive diplomacy to achieve a Korean Peninsula free of nuclear
weapons. (Applause.)

We will continue to speak out for the cause of freedom in places like
Cuba, Belarus, and Burma [1]--and continue to awaken the conscience of
the world to save the people of Darfur. (Applause.)

American foreign policy is more than a matter of war and diplomacy. Our
work in the world is also based on a timeless truth: To whom much is
given, much is required. We hear the call to take on the challenges of
hunger and poverty and disease--and that is precisely what America is
doing. We must continue to fight HIV/AIDS, especially on the continent
of Africa. (Applause.) Because you funded our Emergency Plan for AIDS
Relief, the number of people receiving life-saving drugs has grown from
50,000 to more than 800,000 in three short years. I ask you to continue
funding our efforts to fight HIV/AIDS. I ask you to provide $1.2
billion over five years so we can combat malaria in 15 African
countries. (Applause.)

I ask that you fund the Millennium Challenge Account, so that American
aid reaches the people who need it, in nations where democracy is on
the rise and corruption is in retreat. And let us continue to support
the expanded trade and debt relief that are the best hope for lifting
lives and eliminating poverty. (Applause.)

When America serves others in this way, we show the strength and
generosity of our country. These deeds reflect the character of our
people. The greatest strength we have is the heroic kindness, courage,
and self-sacrifice of the American people. You see this spirit often if
you know where to look--and tonight we need only look above to the
gallery.

Dikembe Mutombo grew up in Africa, amid great poverty and disease. He
came to Georgetown University on a scholarship to study medicine--but
Coach John Thompson got a look at Dikembe and had a different idea.
(Laughter.) Dikembe became a star in the NBA, and a citizen of the
United States. But he never forgot the land of his birth, or the duty
to share his blessings with others. He built a brand new hospital in
his old hometown. A friend has said of this good-hearted man: "Mutombo
believes that God has given him this opportunity to do great things."
And we are proud to call this son of the Congo [2] a citizen of the
United States of America. (Applause.)

After her daughter was born, Julie Aigner-Clark searched for ways to
share her love of music and art with her child. So she borrowed some
equipment, and began filming children's videos in her basement. The
Baby Einstein Company was born, and in just five years her business
grew to more than $20 million in sales. In November 2001, Julie sold
Baby Einstein to the Walt Disney Company, and with her help Baby
Einstein has grown into a $200 million business. Julie represents the
great enterprising spirit of America. And she is using her success to
help others--producing child safety videos with John Walsh of the
National Center for Missing and Exploited Children. Julie says of her
new project: "I believe it's the most important thing that I have ever
done. I believe that children have the right to live in a world that is
safe." And so tonight, we are pleased to welcome this talented business
entrepreneur and generous social entrepreneur--Julie Aigner-Clark.
(Applause.)

Three weeks ago, Wesley Autrey was waiting at a Harlem subway station
with his two little girls, when he saw a man fall into the path of a
train. With seconds to act, Wesley jumped onto the tracks, pulled the
man into the space between the rails, and held him as the train passed
right above their heads. He insists he's not a hero. He says: "We got
guys and girls overseas dying for us to have our freedoms. We have got
to show each other some love." There is something wonderful about a
country that produces a brave and humble man like Wesley Autrey.
(Applause.)

Tommy Rieman was a teenager pumping gas in Independence, Kentucky, when
he enlisted in the United States Army. In December 2003, he was on a
reconnaissance mission in Iraq when his team came under heavy enemy
fire. From his Humvee, Sergeant Rieman returned fire; he used his body
as a shield to protect his gunner. He was shot in the chest and arm,
and received shrapnel wounds to his legs--yet he refused medical
attention, and stayed in the fight. He helped to repel a second attack,
firing grenades at the enemy's position. For his exceptional courage,
Sergeant Rieman was awarded the Silver Star. And like so many other
Americans who have volunteered to defend us, he has earned the respect
and the gratitude of our entire country. (Applause.)

In such courage and compassion, ladies and gentlemen, we see the spirit
and character of America--and these qualities are not in short supply.
This is a decent and honorable country--and resilient, too. We've been
through a lot together. We've met challenges and faced dangers, and we
know that more lie ahead. Yet we can go forward with confidence--because 
the State of our Union is strong, our cause in the world is
right, and tonight that cause goes on. God bless. (Applause.)

See you next year. Thank you for your prayers.

***

State of the Union Address
by George W. Bush
January 28, 2008


THE PRESIDENT: Madam Speaker, Vice President Cheney, members of
Congress, distinguished guests, and fellow citizens: Seven years have
passed since I first stood before you at this rostrum. In that time,
our country has been tested in ways none of us could have imagined. We
faced hard decisions about peace and war, rising competition in the
world economy, and the health and welfare of our citizens. These issues
call for vigorous debate, and I think it's fair to say we've answered
the call. Yet history will record that amid our differences, we acted
with purpose. And together, we showed the world the power and
resilience of American self-government.

All of us were sent to Washington to carry out the people's business.
That is the purpose of this body. It is the meaning of our oath. It
remains our charge to keep.

The actions of the 110th Congress will affect the security and
prosperity of our nation long after this session has ended. In this
election year, let us show our fellow Americans that we recognize our
responsibilities and are determined to meet them. Let us show them that
Republicans and Democrats can compete for votes and cooperate for
results at the same time. (Applause.)

From expanding opportunity to protecting our country, we've made good
progress. Yet we have unfinished business before us, and the American
people expect us to get it done.

In the work ahead, we must be guided by the philosophy that made our
nation great. As Americans, we believe in the power of individuals to
determine their destiny and shape the course of history. We believe
that the most reliable guide for our country is the collective wisdom
of ordinary citizens. And so in all we do, we must trust in the ability
of free peoples to make wise decisions, and empower them to improve
their lives for their futures.

To build a prosperous future, we must trust people with their own money
and empower them to grow our economy. As we meet tonight, our economy
is undergoing a period of uncertainty. America has added jobs for a
record 52 straight months, but jobs are now growing at a slower pace.
Wages are up, but so are prices for food and gas. Exports are rising,
but the housing market has declined. At kitchen tables across our
country, there is a concern about our economic future.

In the long run, Americans can be confident about our economic growth.
But in the short run, we can all see that that growth is slowing. So
last week, my administration reached agreement with Speaker Pelosi and
Republican Leader Boehner on a robust growth package that includes tax
relief for individuals and families and incentives for business
investment. The temptation will be to load up the bill. That would
delay it or derail it, and neither option is acceptable. (Applause.)
This is a good agreement that will keep our economy growing and our
people working. And this Congress must pass it as soon as possible.
(Applause.)

We have other work to do on taxes. Unless Congress acts, most of the
tax relief we've delivered over the past seven years will be taken away.
Some in Washington argue that letting tax relief expire is not a tax
increase. Try explaining that to 116 million American taxpayers who
would see their taxes rise by an average of $1,800. Others have said
they would personally be happy to pay higher taxes. I welcome their
enthusiasm. I'm pleased to report that the IRS accepts both checks and
money orders. (Laughter and applause.)

Most Americans think their taxes are high enough. With all the other
pressures on their finances, American families should not have to worry
about their federal government taking a bigger bite out of their
paychecks. There's only one way to eliminate this uncertainty: Make the
tax relief permanent. (Applause.) And members of Congress should know:
If any bill raises taxes reaches my desk, I will veto it. (Applause.)

Just as we trust Americans with their own money, we need to earn their
trust by spending their tax dollars wisely. Next week, I'll send you a
budget that terminates or substantially reduces 151 wasteful or bloated
programs, totaling more than $18 billion. The budget that I will submit
will keep America on track for a surplus in 2012. American families
have to balance their budgets; so should their government. (Applause.)

The people's trust in their government is undermined by congressional
earmarks--special interest projects that are often snuck in at the
last minute, without discussion or debate. Last year, I asked you to
voluntarily cut the number and cost of earmarks in half. I also asked
you to stop slipping earmarks into committee reports that never even
come to a vote. Unfortunately, neither goal was met. So this time, if
you send me an appropriations bill that does not cut the number and
cost of earmarks in half, I'll send it back to you with my veto.
(Applause.)

And tomorrow, I will issue an executive order that directs federal
agencies to ignore any future earmark that is not voted on by Congress.
If these items are truly worth funding, Congress should debate them in
the open and hold a public vote. (Applause.)

Our shared responsibilities extend beyond matters of taxes and spending.
On housing, we must trust Americans with the responsibility of
homeownership and empower them to weather turbulent times in the
housing market. My administration brought together the HOPE NOW
alliance, which is helping many struggling homeowners avoid foreclosure.
And Congress can help even more. Tonight I ask you to pass legislation
to reform Fannie Mae and Freddie Mac, modernize the Federal Housing
Administration, and allow state housing agencies to issue tax-free
bonds to help homeowners refinance their mortgages. (Applause.) These
are difficult times for many American families, and by taking these
steps, we can help more of them keep their homes.

To build a future of quality health care, we must trust patients and
doctors to make medical decisions and empower them with better
information and better options. We share a common goal: making health
care more affordable and accessible for all Americans. (Applause.) The
best way to achieve that goal is by expanding consumer choice, not
government control. (Applause.) So I have proposed ending the bias in
the tax code against those who do not get their health insurance
through their employer. This one reform would put private coverage
within reach for millions, and I call on the Congress to pass it this
year. (Applause.)

The Congress must also expand health savings accounts, create
Association Health Plans for small businesses, promote health
information technology, and confront the epidemic of junk medical
lawsuits. (Applause.) With all these steps, we will help ensure that
decisions about your medical care are made in the privacy of your
doctor's office--not in the halls of Congress. (Applause.)

On education, we must trust students to learn if given the chance, and
empower parents to demand results from our schools. In neighborhoods
across our country, there are boys and girls with dreams--and a decent
education is their only hope of achieving them.

Six years ago, we came together to pass the No Child Left Behind Act,
and today no one can deny its results. Last year, fourth and eighth
graders achieved the highest math scores on record. Reading scores are
on the rise. African American and Hispanic students posted all-time
highs. (Applause.) Now we must work together to increase accountability,
add flexibility for states and districts, reduce the number of high
school dropouts, provide extra help for struggling schools.

Members of Congress: The No Child Left Behind Act is a bipartisan
achievement. It is succeeding. And we owe it to America's children,
their parents, and their teachers to strengthen this good law.
(Applause.)

We must also do more to help children when their schools do not measure
up. Thanks to the D.C. Opportunity Scholarships you approved, more than
2,600 of the poorest children in our Nation's Capital have found new
hope at a faith-based or other non-public school. Sadly, these schools
are disappearing at an alarming rate in many of America's inner cities.
So I will convene a White House summit aimed at strengthening these
lifelines of learning. And to open the doors of these schools to more
children, I ask you to support a new $300 million program called Pell
Grants for Kids. We have seen how Pell Grants help low-income college
students realize their full potential. Together, we've expanded the
size and reach of these grants. Now let us apply that same spirit to
help liberate poor children trapped in failing public schools.
(Applause.)

On trade, we must trust American workers to compete with anyone in the
world and empower them by opening up new markets overseas. Today, our
economic growth increasingly depends on our ability to sell American
goods and crops and services all over the world. So we're working to
break down barriers to trade and investment wherever we can. We're
working for a successful Doha Round of trade talks, and we must
complete a good agreement this year. At the same time, we're pursuing
opportunities to open up new markets by passing free trade agreements.

I thank the Congress for approving a good agreement with Peru. And now
I ask you to approve agreements with Colombia and Panama and South
Korea. (Applause.) Many products from these nations now enter America
duty-free, yet many of our products face steep tariffs in their markets.
These agreements will level the playing field. They will give us better
access to nearly 100 million customers. They will support good jobs for
the finest workers in the world: those whose products say "Made in the
USA." (Applause.)

These agreements also promote America's strategic interests. The first
agreement that will come before you is with Colombia, a friend of
America that is confronting violence and terror, and fighting drug
traffickers. If we fail to pass this agreement, we will embolden the
purveyors of false populism in our hemisphere. So we must come together,
pass this agreement, and show our neighbors in the region that
democracy leads to a better life. (Applause.)

Trade brings better jobs and better choices and better prices. Yet for
some Americans, trade can mean losing a job, and the federal government
has a responsibility to help. (Applause.) I ask Congress to reauthorize
and reform trade adjustment assistance, so we can help these displaced
workers learn new skills and find new jobs. (Applause.)

To build a future of energy security, we must trust in the creative
genius of American researchers and entrepreneurs and empower them to
pioneer a new generation of clean energy technology. (Applause.) Our
security, our prosperity, and our environment all require reducing our
dependence on oil. Last year, I asked you to pass legislation to reduce
oil consumption over the next decade, and you responded. Together we
should take the next steps: Let us fund new technologies that can
generate coal power while capturing carbon emissions. (Applause.) Let
us increase the use of renewable power and emissions-free nuclear power.
(Applause.) Let us continue investing in advanced battery technology
and renewable fuels to power the cars and trucks of the future.
(Applause.) Let us create a new international clean technology fund,
which will help developing nations like India and China make greater
use of clean energy sources. And let us complete an international
agreement that has the potential to slow, stop, and eventually reverse
the growth of greenhouse gases. (Applause.)

This agreement will be effective only if it includes commitments by
every major economy and gives none a free ride. (Applause.) The United
States is committed to strengthening our energy security and
confronting global climate change. And the best way to meet these goals
is for America to continue leading the way toward the development of
cleaner and more energy-efficient technology. (Applause.)

To keep America competitive into the future, we must trust in the skill
of our scientists and engineers and empower them to pursue the
breakthroughs of tomorrow. Last year, Congress passed legislation
supporting the American Competitiveness Initiative, but never followed
through with the funding. This funding is essential to keeping our
scientific edge. So I ask Congress to double federal support for
critical basic research in the physical sciences and ensure America
remains the most dynamic nation on Earth. (Applause.)

On matters of life and science, we must trust in the innovative spirit
of medical researchers and empower them to discover new treatments
while respecting moral boundaries. In November, we witnessed a landmark
achievement when scientists discovered a way to reprogram adult skin
cells to act like embryonic stem cells. This breakthrough has the
potential to move us beyond the divisive debates of the past by
extending the frontiers of medicine without the destruction of human
life. (Applause.)

So we're expanding funding for this type of ethical medical research.
And as we explore promising avenues of research, we must also ensure
that all life is treated with the dignity it deserves. And so I call on
Congress to pass legislation that bans unethical practices such as the
buying, selling, patenting, or cloning of human life. (Applause.)

On matters of justice, we must trust in the wisdom of our founders and
empower judges who understand that the Constitution means what it says.
(Applause.) I've submitted judicial nominees who will rule by the
letter of the law, not the whim of the gavel. Many of these nominees
are being unfairly delayed. They are worthy of confirmation, and the
Senate should give each of them a prompt up-or-down vote. (Applause.)

In communities across our land, we must trust in the good heart of the
American people and empower them to serve their neighbors in need. Over
the past seven years, more of our fellow citizens have discovered that
the pursuit of happiness leads to the path of service. Americans have
volunteered in record numbers. Charitable donations are higher than
ever. Faith-based groups are bringing hope to pockets of despair, with
newfound support from the federal government. And to help guarantee
equal treatment of faith-based organizations when they compete for
federal funds, I ask you to permanently extend Charitable Choice.
(Applause.)

Tonight the armies of compassion continue the march to a new day in the
Gulf Coast. America honors the strength and resilience of the people of
this region. We reaffirm our pledge to help them build stronger and
better than before. And tonight I'm pleased to announce that in April
we will host this year's North American Summit of Canada, Mexico, and
the United States in the great city of New Orleans. (Applause.)

There are two other pressing challenges that I've raised repeatedly
before this body, and that this body has failed to address: entitlement
spending and immigration. Every member in this chamber knows that
spending on entitlement programs like Social Security, Medicare, and
Medicaid is growing faster than we can afford. We all know the painful
choices ahead if America stays on this path: massive tax increases,
sudden and drastic cuts in benefits, or crippling deficits. I've laid
out proposals to reform these programs. Now I ask members of Congress
to offer your proposals and come up with a bipartisan solution to save
these vital programs for our children and our grandchildren. (Applause.)

The other pressing challenge is immigration. America needs to secure
our borders--and with your help, my administration is taking steps to
do so. We're increasing worksite enforcement, deploying fences and
advanced technologies to stop illegal crossings. We've effectively
ended the policy of "catch and release" at the border, and by the end
of this year, we will have doubled the number of border patrol agents.
Yet we also need to acknowledge that we will never fully secure our
border until we create a lawful way for foreign workers to come here
and support our economy. (Applause.) This will take pressure off the
border and allow law enforcement to concentrate on those who mean us
harm. We must also find a sensible and humane way to deal with people
here illegally. Illegal immigration is complicated, but it can be
resolved. And it must be resolved in a way that upholds both our laws
and our highest ideals. (Applause.)

This is the business of our nation here at home. Yet building a
prosperous future for our citizens also depends on confronting enemies
abroad and advancing liberty in troubled regions of the world.

Our foreign policy is based on a clear premise: We trust that people,
when given the chance, will choose a future of freedom and peace. In
the last seven years, we have witnessed stirring moments in the history
of liberty. We've seen citizens in Georgia and Ukraine stand up for
their right to free and fair elections. We've seen people in Lebanon
take to the streets to demand their independence. We've seen Afghans
emerge from the tyranny of the Taliban and choose a new president and a
new parliament. We've seen jubilant Iraqis holding up ink-stained
fingers and celebrating their freedom. These images of liberty have
inspired us. (Applause.)

In the past seven years, we've also seen images that have sobered us.
We've watched throngs of mourners in Lebanon and Pakistan carrying the
caskets of beloved leaders taken by the assassin's hand. We've seen
wedding guests in blood-soaked finery staggering from a hotel in Jordan,
Afghans and Iraqis blown up in mosques and markets, and trains in
London and Madrid ripped apart by bombs. On a clear September day, we
saw thousands of our fellow citizens taken from us in an instant. These
horrific images serve as a grim reminder: The advance of liberty is
opposed by terrorists and extremists--evil men who despise freedom,
despise America, and aim to subject millions to their violent rule.

Since 9/11, we have taken the fight to these terrorists and extremists.
We will stay on the offense, we will keep up the pressure, and we will
deliver justice to our enemies. (Applause.)

We are engaged in the defining ideological struggle of the 21st century.
The terrorists oppose every principle of humanity and decency that we
hold dear. Yet in this war on terror, there is one thing we and our
enemies agree on: In the long run, men and women who are free to
determine their own destinies will reject terror and refuse to live in
tyranny. And that is why the terrorists are fighting to deny this
choice to the people in Lebanon, Iraq, Afghanistan, Pakistan, and the
Palestinian Territories. And that is why, for the security of America
and the peace of the world, we are spreading the hope of freedom.
(Applause.)

In Afghanistan, America, our 25 NATO allies, and 15 partner nations are
helping the Afghan people defend their freedom and rebuild their
country. Thanks to the courage of these military and civilian personnel,
a nation that was once a safe haven for al Qaeda is now a young
democracy where boys and girls are going to school, new roads and
hospitals are being built, and people are looking to the future with
new hope. These successes must continue, so we're adding 3,200 Marines
to our forces in Afghanistan, where they will fight the terrorists and
train the Afghan Army and police. Defeating the Taliban and al Qaeda is
critical to our security, and I thank the Congress for supporting
America's vital mission in Afghanistan. (Applause.)

In Iraq, the terrorists and extremists are fighting to deny a proud
people their liberty, and fighting to establish safe havens for attacks
across the world. One year ago, our enemies were succeeding in their
efforts to plunge Iraq into chaos. So we reviewed our strategy and
changed course. We launched a surge of American forces into Iraq. We
gave our troops a new mission: Work with the Iraqi forces to protect
the Iraqi people, pursue the enemy in its strongholds, and deny the
terrorists sanctuary anywhere in the country.

The Iraqi people quickly realized that something dramatic had happened.
Those who had worried that America was preparing to abandon them
instead saw tens of thousands of American forces flowing into their
country. They saw our forces moving into neighborhoods, clearing out
the terrorists, and staying behind to ensure the enemy did not return.
And they saw our troops, along with Provincial Reconstruction Teams
that include Foreign Service officers and other skilled public servants,
coming in to ensure that improved security was followed by improvements
in daily life. Our military and civilians in Iraq are performing with
courage and distinction, and they have the gratitude of our whole
nation. (Applause.)

The Iraqis launched a surge of their own. In the fall of 2006, Sunni
tribal leaders grew tired of al Qaeda's brutality and started a popular
uprising called "The Anbar Awakening." Over the past year, similar
movements have spread across the country. And today, the grassroots
surge includes more than 80,000 Iraqi citizens who are fighting the
terrorists. The government in Baghdad has stepped forward, as well ?
adding more than 100,000 new Iraqi soldiers and police during the past
year.

While the enemy is still dangerous and more work remains, the American
and Iraqi surges have achieved results few of us could have imagined
just one year ago. (Applause.) When we met last year, many said that
containing the violence was impossible. A year later, high profile
terrorist attacks are down, civilian deaths are down, sectarian
killings are down.

When we met last year, militia extremists--some armed and trained by
Iran--were wreaking havoc in large areas of Iraq. A year later,
coalition and Iraqi forces have killed or captured hundreds of militia
fighters. And Iraqis of all backgrounds increasingly realize that
defeating these militia fighters is critical to the future of their
country.

When we met last year, al Qaeda had sanctuaries in many areas of Iraq,
and their leaders had just offered American forces safe passage out of
the country. Today, it is al Qaeda that is searching for safe passage.
They have been driven from many of the strongholds they once held, and
over the past year, we've captured or killed thousands of extremists in
Iraq, including hundreds of key al Qaeda leaders and operatives.

Last month, Osama bin Laden released a tape in which he railed against
Iraqi tribal leaders who have turned on al Qaeda and admitted that
coalition forces are growing stronger in Iraq. Ladies and gentlemen,
some may deny the surge is working, but among the terrorists there is
no doubt. Al Qaeda is on the run in Iraq, and this enemy will be
defeated. (Applause.)

When we met last year, our troop levels in Iraq were on the rise. Today,
because of the progress just described, we are implementing a policy of
"return on success," and the surge forces we sent to Iraq are beginning
to come home.

This progress is a credit to the valor of our troops and the brilliance
of their commanders. This evening, I want to speak directly to our men
and women on the front lines. Soldiers and sailors, airmen, Marines,
and Coast Guardsmen: In the past year, you have done everything we've
asked of you, and more. Our nation is grateful for your courage. We are
proud of your accomplishments. And tonight in this hallowed chamber,
with the American people as our witness, we make you a solemn pledge:
In the fight ahead, you will have all you need to protect our nation.
(Applause.) And I ask Congress to meet its responsibilities to these
brave men and women by fully funding our troops. (Applause.)

Our enemies in Iraq have been hit hard. They are not yet defeated, and
we can still expect tough fighting ahead. Our objective in the coming
year is to sustain and build on the gains we made in 2007, while
transitioning to the next phase of our strategy. American troops are
shifting from leading operations, to partnering with Iraqi forces, and,
eventually, to a protective overwatch mission. As part of this
transition, one Army brigade combat team and one Marine Expeditionary
Unit have already come home and will not be replaced. In the coming
months, four additional brigades and two Marine battalions will follow
suit. Taken together, this means more than 20,000 of our troops are
coming home. (Applause.)

Any further drawdown of U.S. troops will be based on conditions in Iraq
and the recommendations of our commanders. General Petraeus has warned
that too fast a drawdown could result in the "disintegration of the
Iraqi security forces, al Qaeda-Iraq regaining lost ground, [and] a
marked increase in violence." Members of Congress: Having come so far
and achieved so much, we must not allow this to happen. (Applause.)

In the coming year, we will work with Iraqi leaders as they build on
the progress they're making toward political reconciliation. At the
local level, Sunnis, Shia, and Kurds are beginning to come together to
reclaim their communities and rebuild their lives. Progress in the
provinces must be matched by progress in Baghdad. (Applause.) We're
seeing some encouraging signs. The national government is sharing oil
revenues with the provinces. The parliament recently passed both a
pension law and de-Baathification reform. They're now debating a
provincial powers law. The Iraqis still have a distance to travel. But
after decades of dictatorship and the pain of sectarian violence,
reconciliation is taking place--and the Iraqi people are taking
control of their future. (Applause.)

The mission in Iraq has been difficult and trying for our nation. But
it is in the vital interest of the United States that we succeed. A
free Iraq will deny al Qaeda a safe haven. A free Iraq will show
millions across the Middle East that a future of liberty is possible. A
free Iraq will be a friend of America, a partner in fighting terror,
and a source of stability in a dangerous part of the world.

By contrast, a failed Iraq would embolden the extremists, strengthen
Iran, and give terrorists a base from which to launch new attacks on
our friends, our allies, and our homeland. The enemy has made its
intentions clear. At a time when the momentum seemed to favor them, al
Qaida's top commander in Iraq declared that they will not rest until
they have attacked us here in Washington. My fellow Americans: We will
not rest either. We will not rest until this enemy has been defeated.
(Applause.) We must do the difficult work today, so that years from now
people will look back and say that this generation rose to the moment,
prevailed in a tough fight, and left behind a more hopeful region and a
safer America. (Applause.)

We're also standing against the forces of extremism in the Holy Land,
where we have new cause for hope. Palestinians have elected a president
who recognizes that confronting terror is essential to achieving a
state where his people can live in dignity and at peace with Israel.
Israelis have leaders who recognize that a peaceful, democratic
Palestinian state will be a source of lasting security. This month in
Ramallah and Jerusalem, I assured leaders from both sides that America
will do, and I will do, everything we can to help them achieve a peace
agreement that defines a Palestinian state by the end of this year. The
time has come for a Holy Land where a democratic Israel and a
democratic Palestine live side-by-side in peace. (Applause.)

We're also standing against the forces of extremism embodied by the
regime in Tehran. Iran's rulers oppress a good and talented people. And
wherever freedom advances in the Middle East, it seems the Iranian
regime is there to oppose it. Iran is funding and training militia
groups in Iraq, supporting Hezbollah terrorists in Lebanon, and backing
Hamas' efforts to undermine peace in the Holy Land. Tehran is also
developing ballistic missiles of increasing range, and continues to
develop its capability to enrich uranium, which could be used to create
a nuclear weapon.

Our message to the people of Iran is clear: We have no quarrel with you.
We respect your traditions and your history. We look forward to the day
when you have your freedom. Our message to the leaders of Iran is also
clear: Verifiably suspend your nuclear enrichment, so negotiations can
begin. And to rejoin the community of nations, come clean about your
nuclear intentions and past actions, stop your oppression at home,
cease your support for terror abroad. But above all, know this: America
will confront those who threaten our troops. We will stand by our
allies, and we will defend our vital interests in the Persian Gulf.
(Applause.)

On the home front, we will continue to take every lawful and effective
measure to protect our country. This is our most solemn duty. We are
grateful that there has not been another attack on our soil since 9/11.
This is not for the lack of desire or effort on the part of the enemy.
In the past six years, we've stopped numerous attacks, including a plot
to fly a plane into the tallest building in Los Angeles and another to
blow up passenger jets bound for America over the Atlantic. Dedicated
men and women in our government toil day and night to stop the
terrorists from carrying out their plans. These good citizens are
saving American lives, and everyone in this chamber owes them our
thanks. (Applause.)

And we owe them something more: We owe them the tools they need to keep
our people safe. And one of the most important tools we can give them
is the ability to monitor terrorist communications. To protect America,
we need to know who the terrorists are talking to, what they are saying,
and what they're planning. Last year, Congress passed legislation to
help us do that. Unfortunately, Congress set the legislation to expire
on February the 1st. That means if you don't act by Friday, our ability
to track terrorist threats would be weakened and our citizens will be
in greater danger. Congress must ensure the flow of vital intelligence
is not disrupted. Congress must pass liability protection for companies
believed to have assisted in the efforts to defend America. We've had
ample time for debate. The time to act is now. (Applause.)

Protecting our nation from the dangers of a new century requires more
than good intelligence and a strong military. It also requires changing
the conditions that breed resentment and allow extremists to prey on
despair. So America is using its influence to build a freer, more
hopeful, and more compassionate world. This is a reflection of our
national interest; it is the calling of our conscience.

America opposes genocide in Sudan. (Applause.) We support freedom in
countries from Cuba and Zimbabwe to Belarus and Burma. (Applause.)

America is leading the fight against global poverty, with strong
education initiatives and humanitarian assistance. We've also changed
the way we deliver aid by launching the Millennium Challenge Account.
This program strengthens democracy, transparency, and the rule of law
in developing nations, and I ask you to fully fund this important
initiative. (Applause.)

America is leading the fight against global hunger. Today, more than
half the world's food aid comes from the United States. And tonight, I
ask Congress to support an innovative proposal to provide food
assistance by purchasing crops directly from farmers in the developing
world, so we can build up local agriculture and help break the cycle of
famine. (Applause.)

America is leading the fight against disease. With your help, we're
working to cut by half the number of malaria-related deaths in 15
African nations. And our Emergency Plan for AIDS Relief is treating 1.4
million people. We can bring healing and hope to many more. So I ask
you to maintain the principles that have changed behavior and made this
program a success. And I call on you to double our initial commitment
to fighting HIV/AIDS by approving an additional $30 billion over the
next five years. (Applause.)

America is a force for hope in the world because we are a compassionate
people, and some of the most compassionate Americans are those who have
stepped forward to protect us. We must keep faith with all who have
risked life and limb so that we might live in freedom and peace. Over
the past seven years, we've increased funding for veterans by more than
95 percent. And as we increase funding-- (applause.) And as increase
funding we must also reform our veterans system to meet the needs of a
new war and a new generation. (Applause.) I call on the Congress to
enact the reforms recommended by Senator Bob Dole and Secretary Donna
Shalala, so we can improve the system of care for our wounded warriors
and help them build lives of hope and promise and dignity. (Applause.)

Our military families also sacrifice for America. They endure sleepless
nights and the daily struggle of providing for children while a loved
one is serving far from home. We have a responsibility to provide for
them. So I ask you to join me in expanding their access to child care,
creating new hiring preferences for military spouses across the federal
government, and allowing our troops to transfer their unused education
benefits to their spouses or children. (Applause.) Our military
families serve our nation, they inspire our nation, and tonight our
nation honors them. (Applause.)

The strength--the secret of our strength, the miracle of America, is
that our greatness lies not in our government, but in the spirit and
determination of our people. (Applause.) When the Federal Convention
met in Philadelphia in 1787, our nation was bound by the Articles of
Confederation, which began with the words, "We the undersigned
delegates." When Gouverneur Morris was asked to draft a preamble to our
new Constitution, he offered an important revision and opened with
words that changed the course of our nation and the history of the
world: "We the people."

By trusting the people, our Founders wagered that a great and noble
nation could be built on the liberty that resides in the hearts of all
men and women. By trusting the people, succeeding generations
transformed our fragile young democracy into the most powerful nation
on Earth and a beacon of hope for millions. And so long as we continue
to trust the people, our nation will prosper, our liberty will be
secure, and the state of our Union will remain strong. (Applause.)

So tonight, with confidence in freedom's power, and trust in the people,
let us set forth to do their business. God bless America. (Applause.)


***